Supplemental Benefit Reimbursements
The form to seek reimbursement of any supplemental benefits paid during 2023 is now available on the Minnesota Department of Revenue (DOR)’s website. Instructions for completing the form and answers to frequently asked questions are also provided on this DOR webpage.
The online form requires that a relief association provide its Minnesota ID number. If you do not know the relief association’s ID number, you can obtain it by calling Business Registration within the DOR at (651) 282-5225.
A relief association seeking reimbursement of supplemental benefits paid during 2023 must submit the Supplemental Benefit Reimbursement form to the DOR by February 15, 2024, to receive reimbursement in March 2024. If the relief association misses this filing deadline, the reimbursement request cannot be submitted again until the filing period begins the following November. Relief associations that pay service pensions as a one-time lump-sum payment (rather than monthly payments) must also pay a supplemental benefit. The supplemental benefit is paid at the same time as the service pension and is intended to help offset taxes which must be paid on the service pension or benefit distribution. No supplemental benefit is paid for monthly service pension recipients.
For service pensions and disability benefits, the amount of the supplemental benefit is equal to ten percent of the lump-sum distribution, up to a maximum of $1,000. For survivor benefits, the amount of the supplemental benefit is equal to 20 percent of the survivor benefit distribution, up to a maximum of $2,000. A 2019 law change allows a supplemental survivor benefit to be paid to a designated beneficiary or to an estate if the deceased firefighter had no surviving spouse or surviving children. The new law applies to supplemental benefits paid in 2019 and, thereafter, for the death of an active or deferred firefighter that occurred on or after January 1, 2019.
Supplemental benefits should be calculated on the pre-tax pension or benefit amount before any deferred interest is credited. In addition, deferred interest should not accrue on the supplemental benefit. Supplemental benefits are payable to members who are fully vested, as well as those who are partially vested.
Additional information about supplemental benefits is provided in the OSA’s Statement of Position on this topic.
Published last in the November 2023 Pension Newsletter