Bipartisan bill would eliminate burdensome and confusing IRS requirements that make it difficult for volunteer emergency personnel to receive benefits
Click HERE for a one-pager of the bill
Washington, D.C. — Today, U.S. Senators Susan Collins (R-ME) and Ben Cardin (D-MD) introduced the Volunteer Emergency Services Recruitment and Retention Act (VESRRA), a bipartisan bill that would simplify how Length of Service Award Programs (LOSAPs) given to volunteer emergency personnel are taxed without increasing or reducing federal spending or taxes.
“Across our nation, volunteer emergency personnel play a critical role in ensuring the safety of our communities and the well-being of our neighbors. Maine is largely a rural state, and more than 90 percent of our firefighters are volunteers. Without these dedicated individuals, many smaller communities would be unable to provide firefighting and other emergency services at all,” said Senator Collins. “Often, communities seek to recruit and retain volunteers by offering modest benefits. Our bipartisan bill would support these efforts by helping to ensure that these nominal benefits to volunteers are not entangled in bureaucracy or needlessly held back by regulations.”
“In a majority of communities in Maryland and across the nation, when a fire starts or an emergency strikes, volunteers arrive to fight fires and save lives. These volunteer first responders are essential to the safety and well-being of the communities they serve. That is why I am committed to ensuring that local governments have the tools they need to recruit and retain these brave men and women. This bipartisan bill would simplify requirements to make it easier for local agencies to administer retirement plans and for volunteer emergency personnel to receive benefits they have earned,” said Senator Cardin.
The Volunteer Emergency Services Recruitment and Retention Act is endorsed by the National Volunteer Fire Council and the Maine State Federation of Firefighters.
“As the Maine State Federation of Firefighters continues the fight to fund our state LOSAP program, it is critical that the federal laws governing how LOSAP is taxed make sense,” said Ken Desmond, President of the Maine State Federation of Firefighters. “I’d like to thank Senator Collins for introducing this important bill, and for her longstanding support of the volunteer fire service in Maine and across the nation.”
LOSAPs are retirement accounts for volunteer emergency responders that approximately 20 percent of the 814,000 volunteer firefighters in the United States are enrolled in. Many communities provide modest financial incentives to their volunteer firefighters and EMS personnel to boost recruitment and retention. LOSAPs are one of the most popular benefits.
The tax code currently specifies that LOSAPs are not an eligible deferred compensation plan. This prevents LOSAPs from being tax-deferred, guaranteed, and portable. The rules for eligible deferred compensation plans are typically designed with the employer/employee relationship in mind and work for employees who receives a regular wage or salary in addition to pension contributions. However, for volunteers who receive no compensation outside of LOSAPs, these rules are problematic.
The Volunteer Emergency Services Recruitment and Retention Act would solve this problem by allowing LOSAPs to operate as traditional employer retirement plans. Simplifying how LOSAPs are taxed would make it easier for departments to provide retirement benefits, helping them to recruit and retain volunteer emergency personnel.
Click HERE for a one-pager of bill.