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<br />l..'Lt... -'U <br /> <br /> <br />/' .~ <br />I . <br /> <br />. <br /> <br /> <br />S. <br /> <br />f(q 0 <br />.~ (jf) <br />NE.vJ f'2-8;\ , <br />. r4(..A7'~ <br />~~~ R.Bv(2..~ <br />V8~'I" <br />b. <br /> <br />d. <br /> <br />_'.I. .I.c.. 4..> <br /> <br />I U ~ :;...)..j I _N:.. 1 ..) <br /> <br />I hL, I. _t I I <br /> <br />1...1, Uh......ll, l,u...h <br /> <br />I ..J_ _, I . lJ4 <br /> <br />Jnvesll1Jent~ .\ <br />a. Lack oC ComWlanc~..by VQ]luileer Flre(h~hter Relief J\c;soclBtJons In Reportil]g <br />Investment Performance. Since 1990, volunteer firefighter reHeC assocJatlons <br />with at least $SOO,Ooo in assets have been requIred to report quarterly and annual <br />Investment performance returns, but 40 of the 51 volunteer Chefighter reller <br />associations ~overed by the law (78.4 percent) Called to comply, mostly by Calling <br />to report any performance results or by CHing Incorrectly computed performance <br />rcsu Its. <br /> <br />J'Qlen!ia! E~c1ullon of a G~aler I'iUI11I!~ of ~OIQn!eer ~~eq~hter Belie! <br />AsSOclCJtlOns from Inv~~tm~.m P~tlQ.rm~G.~ RcmQt!iniJ~~qul[~IDeli1. Potential <br />draft legislation would Increase the asset threshold for the Investment <br />performance reporting requirement from $500,000 to $3,000,000, thereby <br />eliminating all but two currenf volunteer firefighter relief associations from the <br />reporting requirement. <br /> <br />c. R~Jier AssociatiQll Investmen{.c; in Fire Department EquipmenJ or Lo~nl <br />I;conomic Development. Although slale Jaw does not generally permit it, Some <br />volunteer firefighter relief associations reportedly have considered or actually <br />have directly or indirectly invested relief association special fund assets in fire <br />department equipment. such as fire trucks, or ill local ~conomic development <br />investments, such as local residential real estale or construction loans. <br /> <br />Insurance Products as AuthQr;zed Investments. Currenllaw limits volunteer <br />nrefighter relieC association investments in insurance products to single premium <br />annuity contracts on behalf of retiring firefighters fnlieu of a lump sum service <br />pension or In guaranteed investment conlracts through the State Board of <br />Investment's Supplemental Investment Fund, but some interested parties have <br />argued Cor also allowing life Insurance as a p'ermiued Investment. <br /> <br />6. Plan Administration <br /> <br />a. <br /> <br />@ <br /> <br />b. <br /> <br />c. <br /> <br />q(I( <br />-rAt <br />s ~"'(lj <br /> <br />Regulation of the General FlIud. The general fund ora volunteer firefighter <br />relief association can support a wide variety of potential activities without any <br />statutory regulation, although with the potential for sizeable proceeds from <br />lawful gambling or Jarge scale carnivals the eoeral fund acUvities l11a not any <br />longer constitute a re a lve U15 leant ort on 0 volunteer firefighters reli~f' <br />ass5CHUion ac IVltles. . <br />---- . <br /> <br />Admfnl~tratfve Expenses R~I~lted to Lawful GambllOg. For volunteer firefighter <br />relief associations involved witb hiwful ga~bling, the administrative expense load <br />and time conunltment of relieC association trustees and officers arising out of the <br />lawful gambling activities may be considerable. <br /> <br />Federql Jncome Tax Oua1lf1~fl(iQu. Volunteer firefighter relief associations <br />potentially can be qualified for federal income tax exemption as an orgnnizalion <br />either under Internal Revenue Code Section 401(a) or Section SOI(c)(4), with <br />Internal Revenue Code Section 401(a) tax qualification bringing additional <br />individual taxpayer income tax deferral benefits, but it is unclear how many <br />volunteer firefighter relief associations have clarified theIr federal tnx status. <br /> <br />7. Other <br />a. Propriety of Invp]vem~nt with Lawful GambHnj. At least 186 volunteer <br />firefighter reHef associations are currently sponsoring lawful gambling, but, <br />because of the pension and benefit connection, additional specialized regulation <br />of this activity may be appropriate. <br /> <br />Approptiate Enforcement Measures for Statutory Noncompllanc~. The current <br />penalty for noncomplianc~ with statutory funding or related requirements, the <br />tlisquuliricallon from future (ire state aid receipt, is apparently not Imposed <br />regularly and may not be well designed to ensure compliance. <br /> <br />b. <br />@/ <br /> <br />Page 3 <br /> <br />/. <br /> <br />4M1291LM <br /> <br />e <br /> <br />e <br /> <br />e <br /> <br />- <br />