Forfeiting Service Credit Following a Break in Service
The OSA has received questions about how service credit is handled for a relief association member who resumes active service and membership following a break in service or leave of absence. Specifically, relief association trustees have asked if members must “start over” when they return after a break in service if they were not vested based on their original period of service.
For relief associations that pay defined-benefit lump-sum or monthly service pensions, Minn. Stat. § 424A.02, subd. 3(h) requires that the method of calculating service pensions be applied uniformly for all years of active service. A defined-benefit relief association is obligated to credit all years of active service for any member who is active and meets the minimum service and membership requirements. Credit must be given for all years of active service except for caps on service credit if so provided in the bylaws of the relief association.
For example, a member serves for four years and then moves from the community. The member is absent from the fire department for two years before returning and resuming active service with the fire department and active membership in the relief association. When the member resumes active service and active membership, the member retains credit for the original four years of service. Any additional service credit that is accrued is added on to the four years accrued during the member’s original period of service.
Published last in the May 2016 Pension Newsletter