Auditor Blaha Releases 2021 Financial and Investment Report of Volunteer Fire Relief Associations - April 12, 2023

Relief association trustees called on to scrutinize both overfunded and underfunded pensions

Saint Paul, MN – “Fire relief associations have consistent, on-going funding sufficiencies and on average have outperformed their investment assumptions,” said State Auditor Julie Blaha on the release of the 2021 Financial and Investment Report of volunteer fire relief associations. “The average funding ratio for the time period covered by this report was over 164 percent.”

A volunteer fire relief association is a governmental entity that receives and manages public money used to provide retirement benefits to firefighters and first responders. The relief association is a separate entity from its affiliated city or town fire department, and is governed by its own board of trustees. Relief associations have various reporting requirements with the Office of the State Auditor as well as other state and federal agencies. They qualify to receive state aid based on the completion of these annual reports.

Blaha added, “Overfunded pensions deserve as much scrutiny as underfunded pensions. We call on trustees of relief association with large sufficiencies to work to get extra funds into the hands of their members.”

“While it’s tempting to celebrate the funding sufficiencies, we need to remember that pension funds are not banks,” Blaha continued. “Relief associations are meant to pay out benefits to retiring volunteer and paid on-call firefighters. Every dollar that a relief association holds in surplus is a dollar that’s not being paid to firefighters.”

Most firefighters in Minnesota are volunteer or paid on-call firefighters and perform this essential public service while also having separate full-time jobs. Relief associations pay retirement benefits to these firefighters after they have completed a minimum length of fire department service and have met additional minimum requirements. Relief association service pensions are an important tool to help recruit and retain firefighters in Minnesota and reward them for their service to their local communities.

Some highlights from the report include:

• Relief associations held $731.7 million in net assets at the end of 2021, representing accrued benefits for 15,706 firefighters.
• Relief associations received $24.5 million in state aid and $5.4 million in municipal contributions during 2021.
• A total of $39.6 million in service pensions was paid out by 283 different relief associations in 2021.
• The average lump sum benefit level for relief association members during 2021 was $2,335 per member, per year of service.

The complete report, including an Executive Summary, graphs, and tables, is available on the OSA website.