Legislation Benefiting Volunteer Firefighters, Backed by Penflex, Inc. and the National Volunteer Fire Council, Introduced in Senate

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Volunteer Emergency Services Recruitment and Retention Act Legislation Previously Introduced in the House by Representative Peter King Makes its Way to the Senate.

Penflex-Service Award Program Specialists

There are 44,000 fewer volunteer firefighters this year than last and for the seventh year in a row the percentage of volunteers over 40 rose.

The Volunteer Emergency Services Recruitment and Retention Act (VESRRA), legislation endorsed by Penflex, Inc. and the National Volunteer Fire Council, was introduced in the House by Representative Peter King (R-NY) last January as H.R. 376. Recently the legislation, aimed at clarifying tax code problems with Length of Service Award Programs (LOSAPs), was introduced by Senator Susan Collins (R-ME) in the Senate and is known as S. 1911. Approximately 20 percent of volunteer firefighters nationwide participate in some form of LOSAP, a pension-like benefit that emergency services agencies use to recruit and retain personnel.

“The latest U.S. Fire Department Profile offers incontrovertible proof that volunteer departments need all the help they can get with their recruitment and retention efforts,” says Ed Holohan, President and Actuary of Penflex, Inc. “There are 44,000 fewer volunteers this year than last and for the seventh year in a row the percentage of volunteers over 40 rose. LOSAPs are tools used by departments as they struggle to reverse these alarming trends and it’s our civic responsibility to do everything we can and keep LOSAPs cost-effective and easy to implement and maintain.”

The VESRRA act would allow LOSAP plan sponsors to protect funds contributed into a LOSAP as if the LOSAP was an IRS approved pension plan. This protects the funds from creditors in case the sponsoring entity goes bankrupt and allows for portability of benefits earned by a volunteer. In addition the legislation would clarify, update and expand the confusing and out-dated provisions of the Internal Revenue Code regarding the taxation of the amounts paid to volunteers under these programs.

Finally, the legislation allows private, non-profit volunteer emergency services agencies that operate based on the terms of a written agreement with a local unit of government to elect to have their LOSAP be considered “governmental” for the purposes of taxation. This would exempt them from various reporting requirements that are an administrative burden, particularly in smaller communities.

The National Volunteer Fire Council (NVFC), along with Penflex, is leading the charge to get this legislation passed. VESRRA is one of the top legislative priorities for the NVFC. “We need to do more as a nation to encourage individuals to volunteer for their communities as emergency responders,” said NVFC Director of Government Relations, Dave Finger. “The beauty of H.R. 376/S. 1911 is that it will bolster recruitment and retention by simplifying the manner in which LOSAP programs are taxed, making it easier for communities that choose to provide a LOSAP to do so. We aren’t talking about cutting taxes or establishing a new federal program or anything else that would add to the federal deficit. Particularly in these difficult economic times when budgets at every level of government are tight, this is the type of common-sense legislation that members of Congress on both sides of the aisle can support.”

“The NVFC has set up a way for volunteers and citizens concerned with the declining numbers of volunteer firefighters to easily contact their representatives and ask them to support this legislation. They can use our form, contact the representatives appropriate to them and be finished in just minutes. The link to the online form for alerting a person’s representatives can be found on our website as well as the Penflex website,” adds Finger.

“More than 73-percent of the country is protected by volunteer firefighters. The constant decline in their numbers combined with a 7-year aging trend should concern everyone,” Holohan added. “Taxpayers need to be aware that volunteers save taxpayers approximately $128 billion annually in tax money. This is an issue that directly impacts not only the safety of communities but also directly impacts them economically as well. Passing this legislation is vitally important for the continued viability of the volunteer departments in this country.”

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Daniel Knight
Penflex, Inc.
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