#09 - Cost anaysis SVF plan - Laserfiche WebLink

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Who Can Participate in the Statewide Volunteer Firefighter (SVF) Plan? Participation in the SVF Plan is voluntary and open to fire departments as a replacement of their existing volunteer firefighter service pension plan. It is also open to departments that do not currently have a service pension plan for their volunteer firefighters. Who Decides Whether a Fire Department Joins the SVF Plan? The fire department’s relief association (if one exists) and governing body jointly make the decision to join the SVF Plan. The fire department may join the SVF Plan if both its relief association (if one exists) and governing body approve pension coverage under the SVF Plan. Common Considerations for Prospective SVF Plan Participants The following is information to consider when deciding whether to join the SVF Plan: 1. The SVF Plan’s assumed investment earnings rate of 6% is higher than the 5% rate set in statute for local relief associations. This means the SVF Plan assumes investment earnings will cover more of the fire department’s annual pension cost than a relief association would assume. The SVF Plan’s higher investment earnings assumption reduces the governing body’s required contribution by more than a relief association’s investment earnings assumption. 2. The year a fire department joins the SVF Plan, the relief association (if one exists) must file one last set of financial reports (as required by law) with the Office of the Minnesota State Auditor and pay for one last audit/attestation. Going forward, however, the relief association is no longer obligated to perform the following duties:  Assemble/file financial reports with the Office of the Minnesota State Auditor.  Pay for an outside audit or attestation.  Invest the assets of the special fund. Professional portfolio managers with the State Board of Investment (SBI) take over this responsibility.  Pay pension benefits and file the paperwork necessary to receive the Minnesota Department of Revenue’s supplemental benefit reimbursement.