By Dan Sparks, 

State Senator, District 27

Pensions are the lifeblood of retirees. A healthy pension fund can be the difference between a comfortable retirement and one lived on the edge. According to the United States Census Bureau, there were 600 public pension systems in Minnesota as of 2015. Of these, 12 were state-level programs, while the remaining 588 were administered at the local level.

The city of Austin’s volunteer firefighters forego pay altogether, but they are rewarded with a pension upon retirement. These hardworking and community-minded men and women risk their lives to keep our citizens safe, so it is up to the city — and elected officials like me — to help ensure their retirement pension is safe and healthy. Over the past few years the city of Austin has dealt with a mix-up in how the volunteer firefighters and paid firefighter pension accounts were funded. The mix-up put the city on the hook for nearly a quarter-million dollars. I’m happy to say that this issue has been resolved after a lot of hard work and cooperation on behalf of city and state officials. 

Generally speaking, any state aid received by a city for fire services has to be deposited into that city’s volunteer firefighter relief association, if one exists. Prior to 2013, however, a law existed that allowed cities an exception to this rule. Under that exception, eligible municipalities were able to allocate an appropriate portion of fire state aid to help fund any municipal contributions owed to the Public Employees Police and Fire Retirement Plan (PERA-P&F) – and the city of Austin had been doing just that.

The city of Austin has a combination fire department, consisting of both paid firefighters as well as volunteers. The legislation allowed the city to allocate state aid it received for fire services between the volunteer firefighters and paid firefighters plan. An agreement was reached between these organizations as to how these funds would be divvied up.

But a problem arose when the state auditor contacted the city last year to let them know that the statute they’d been operating under had been repealed. It turns out that Austin was the only city still doing this, but didn’t have statutory authority any longer to allocate the state funds received for fire services. This meant the city owed the volunteer firefighter’s pension fund for several years’ worth of state aid that had been paid to PERA-P&F — a sum totaling $214,650.

That’s a fairly large chunk of money for the city to come up with, so they asked me for help from the state. Last week, we had important legislation heard in the Legislative Commission on Pensions and Retirement (LCPR). The legislation allows Austin to continue allocating a portion of the state aid it receives to cover paid firefighters within PERA-P&F and relieves the debt owed to the volunteer fire relief association.

The desired outcome was to put firefighter’s pension accounts in good standing and keep the city of Austin’s budget balanced. We did not want to burden taxpayers with increased taxes to help pay back the fund, and now we don’t have to. This is a great example of local and state elected officials working together for the good of Minnesotans.