Investing Through the SBI vs. Joining the Statewide Plan

Sometimes there is confusion about the difference between investing through the State Board of Investment (SBI) and joining the Statewide Volunteer Firefighter Retirement Plan that is administered by the Public Employees Retirement Association (PERA). Investing through the SBI is a choice on how relief association assets will be invested, while joining the statewide plan is a choice on how the volunteer firefighters’ pension plan will be administered.

Investing Through the SBI

Relief associations have authority to invest through the SBI Supplemental Investment Fund. The Supplemental Investment Fund is a multi-purpose investment program that offers a range of investment options. There are six accounts from among which a relief association may choose to invest. Relief associations may choose to invest some or all of their special fund through the SBI. (Relief associations should maintain at least a minimal amount of cash equivalents in a local financial institution to cover short term expenses.) Many relief associations that invest through the SBI do so for a portion of their special fund portfolio, and work with an investment broker and local financial institution for the remainder of their portfolio.

Information about investing through the SBI is available on the SBI website.

Joining the Statewide Plan

Relief associations may choose to administer their own pension plans for their volunteer firefighters or may choose to turn over administration of the pension plans to PERA by joining the statewide plan. While assets for relief associations that join the statewide plan are automatically invested by the SBI, under this scenario a relief association’s entire special fund is transferred to the SBI and the association ceases to exist as a pension plan. PERA handles the management of the statewide plan and pays benefits. Benefit eligibility requirements are set in statute instead of in local bylaws, and fire state aid is paid directly to PERA.

Information about the statewide plan is available on PERA’s website.

Published last in the November 2015 Pension Newsletter