New Supplemental State Aid Program

A new supplemental state aid program was established during the 2013 legislative session to provide additional funding for fire and police retirement plans. 

Effective for the fiscal year that begins July 1, 2013, an appropriation of $15,500,000 annually will be made to the new aid program. Of this appropriation, about $5.5 million will be allocated annually for volunteer fire relief associations and for volunteer firefighters covered by the Statewide Volunteer Firefighter Retirement Plan administered by the Public Employees Retirement Association (PERA). The remaining amount will be allocated to the PERA police and fire fund and to the state patrol plan administered by the Minnesota State Retirement System.

The supplemental state aid amount that a relief association receives is currently equal to the proportionate share that each association currently receives of fire state aid. The supplemental state aid is paid at the same time as the fire state aid. A state aid payment is usually made by an electronic funds transfer from the State to the municipality affiliated with the relief association. The supplemental state aid and fire state aid are paid in two separate transfers, with both transfers occurring on the same date. The municipality must transfer the supplemental state aid to the treasurer of the relief association within 30 days of receipt for deposit in the association’s Special Fund.

A relief association becomes eligible to receive supplemental state aid when all reporting requirements are met with the OSA, and the association has satisfied its reporting requirements with other government offices.

It is important to note that the supplemental state aid program will automatically terminate once the funding ratio of the PERA police and fire fund or the state patrol plan equals or exceeds 90 percent, whichever occurs last. The termination of the program should be taken into consideration when considering benefit improvements. 

Published last in the November 2013 Pension Newsletter