Sample Bylaw Guides

Below are some tips for selecting the Sample Bylaw Guides that are right for your relief association.

Relief associations are classified by how they pay out benefits, which is known as a plan type. The two types of plans covered by the guides are defined-benefit lump-sum and defined-contribution. Defined benefit lump-sum plans pay benefits as a one-time lump-sum payment to members upon their retirement. The benefits are paid to members based on the annual benefit level in effect when the member separates from active service and membership. Defined-benefit lump-sum plans are the most common relief association plan type.

Defined-contribution plans (also known as split-the-pie plans) are similar to defined-benefit lump-sum plans in that members receive a one-time lump-sum payment when they retire. The benefit amount is equal to the member’s individual account balance at the time of retirement. Members of defined-contribution plans receive equal shares of state and municipal contributions and pro-rated shares of investment earnings. Member account balances fluctuate from year to year based on the relief association’s investment performance, revenues, and expenses. 

Relief associations are further categorized by fire department affiliation. Relief associations can be affiliated either with a city fire department, a town fire department, a joint-powers fire department, or an independent nonprofit firefighting corporation. Sample bylaw guides are provided for the two different types of plans with the four different fire department affiliations.

Multiple guides are required because state statutes vary slightly between the different types of plans, and the affiliations. The guides reflect these differences. Requirements for ratifying changes in benefit levels and revisions to bylaws, and the composition of a relief association’s board of trustees, vary depending on the plan type and fire department affiliation. 

Guides have not been created for defined-benefit monthly plans or defined-benefit monthly/lump-sum combination plans because only a few of these plans exist and their benefit provisions are unique. These plans may find many of the provisions within the guides helpful, however, especially provisions covering the governance, organization, and funds of the association.

Published last in the September 2012 Pension Newsletter