Establishing Multi-Year Benefit Level Proposals
Many relief associations review their benefit levels in the spring when completing their annual reporting forms. We understand that occasionally relief association trustees have an interest in seeking municipal ratification to increase the relief association’s benefit level over multiple years. Such a proposal is not consistent with established law unless the municipality ratifies each incremental benefit level before it becomes effective.
For example, if a relief association would like to increase its benefit level from $2,000 to $3,000 per year of service over a five-year period, the $2,000 benefit level would need to be ratified by the municipality in year one, and the $2,200 benefit level would need to be separately ratified in year two and so on.
Annual ratification of any benefit level change is required by law. Annual ratification also ensures that each incremental benefit level does not exceed the relief association’s maximum allowable benefit level, which can fluctuate from year to year.
Published last in the April 2017 Pension Newsletter