BILL ANALYSIS
SB 581
Page 1
Date of Hearing: June 27, 2007
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Mark Leno, Chair
SB 581 (Wiggins) - As Amended: June 11, 2007
Policy Committee: P.E.R. &
S.S.Vote: 6-0
Urgency: No State Mandated Local Program:
Yes Reimbursable: No
SUMMARY
This bill transfers the Volunteer Firefighter Length of Service
Award System (VFLSAS) from CalPERS to the California State Fire
Employees Welfare Benefit Corporation. Specifically, the bill:
1)Requires CalPERS to divulge and transfer the files of
individual members by March 1, 2008.
2)Requires the California State Fire Employees Welfare Benefit
Corporation to maintain a benefit plan pursuant to specified
provisions of the Internal Revenue Code, and select a
financial institution or other qualified entity to act as
trustee and establish a trust for the award system.
3)Establishes a qualifications review commission for determining
eligibility for service award benefits, and requires both
volunteer firefighters participating in VFLSAS and the members
of the qualification review commission to certify, under
penalty of perjury, that the volunteer firefighter has
participated in specified fire department activities.
FISCAL EFFECT
1)Potential savings to fire districts which participate in the
VFLSAS program. Costs to CalPERS for transferring the program
are expected to be minor, and will be deducted from the fund
prior to the transfer.
2)Any local enforcement costs associated with the provision
requiring participants in the VFLSAS program to provide
certain information under the penalty of perjury is not
SB 581
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state-reimbursable.
COMMENTS
1)Background . The VFLSAS was established by Chapter 1145,
Statutes of 1979 (SB 273, Johnson) for fire departments and
districts to offer a small lifetime award to their volunteer
firefighters when they reach retirement age as a recruitment
and retention incentive. In order to be eligible for the
award, the member must have attained the age of 60 and have at
least 10 years of service.
The award is $50 per month for members with 10 years of
service, up to $100 per month for those with 20 years of
service. The program also provides a $3,000 lump sum death
benefit paid to the member's beneficiary. The VFLSAS is
administered by the CalPERS Board and is funded entirely by
contributions from contracting fire entities and the
investment earnings of the Volunteer Firefighters Length of
Service Award Fund. About 130 volunteer firefighters are
receiving monthly payments under the program. The balance in
the VFLSAS fund is $2.8 million.
CalPERS changed the method it used in determining the
administrative costs of the VFLSA in 1998. Since then,
administrative costs have grown from $10,000 in 1998-99 to an
estimated $139,000 for 2007-08.
2)Rationale . The sponsor of the bill (California State
Firefighters Association) indicates that the ever rising
administrative costs have made it difficult for the VFLSAS
fund to achieve the growth necessary to sustain the program.
The intent of the bill is to reduce administrative costs by
shifting the administration of the program to the California
State Fire Employees Welfare Benefit Corporation, which
currently administers several group insurance benefit programs
for members of the California State Firefighters Association.
Analysis Prepared by : Brad Williams / APPR. / (916) 319-2081