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The minimum required contribution is calculated by the officers of the relief association <br />during the month of July for the following year.4 To calculate the minimum required <br />municipal contribution, the officers need to know the special fund's financial <br />requirements for the following year. In July, the officers calculate the financial <br />requirements for the following year and the overall funding balance for the current <br />calendar year. <br />If the special fund is not fully funded, the financial requirements for the following <br />calendar year are determined by taking into account 1) the total accrued liability for all <br />active and deferred members of the relief association, calculated for the following <br />calendar year; 2) the increase in the total accrued liability for the following calendar year <br />over the present calendar year; 3) the amount of anticipated future administrative <br />expenses; and 4) one-tenth of the deficit resulting from either an increase in the service <br />pension or an investment loss occurring over the last ten years. The deficit can be <br />amortized over ten years. <br />If the special fund is fully funded, the financial requirements for the following calendar <br />year are the total of 1) the increase in the total accrued liability for all members for the <br />following calendar year over the present calendar year; and 2) the amount of anticipated <br />future administrative expenses. <br />iV~~ Monthly Service Pension Plans <br />For monthly service pension plans, the financial requirements of the special fund are <br />based on the most recent actuarial valuation. Each fire relief association must determine <br />the minimum obligation of the municipality for the following calendar year "on or before <br />August 1 of each year."5 The "most recent actuarial valuation" included in the <br />calculation would generally be a valuation from January 1 of the same year or December <br />31 of the prior year. <br />For most plans, the Governmental Accounting Standards Board (GASB) requires an <br />actuarial valuation every two years.b In addition, a new actuarial valuation is required <br />whenever there is a benefit chan~e. If the plan is in deficit, the statute permits <br />amortization over a period of years. <br />~,+~~ Defined Contribution Plans <br />For defined contribution plans, the individual volunteer firefighter experiences the gains <br />and the losses. The municipality has no obligation to make contributions to offset losses <br />if they occur, although it can make a voluntary contribution to the special fund. <br />a The Schedule Form, provided by the Office of the State Auditor, calculates the amount of any required <br />municipal contribution for the following year. For example, the 2010 Schedule Form will calculate the <br />required municipal contribution amount for the year 2011. <br />s Minn. Stat. § 69.773, subd. 5(a). <br />b See Minn. Stat. § 69.051, subd. 1 (financial statements in conformance with generally accepted <br />accounting principles); GASB Statement 25, para. 35 (biennial actuarial valuations required for financial <br />reporting purposes). <br />Minn. Stat. § 69.773, subd 4 (d). <br />Reviewed: July 2010 2 2009-2001 <br />Revised: July 2010 <br />