SENATE, No. 1878

 

STATE OF NEW JERSEY

 

INTRODUCED MARCH 10, 1997

 

 

By Senator MATHEUSSEN

 

 

An Act concerning annuities for volunteer fire fighters, supplementing chapters 10 and 14 of Title 40A of the New Jersey Statutes and amending N.J.S.40A:10-31.

 

    Be It Enacted by the Senate and General Assembly of the State of New Jersey:

 

    1. (New section) In addition to the powers granted to municipalities under Title 40A of the New Jersey Statutes, a municipality that maintains a volunteer fire department has one or more incorporated volunteer fire companies may enter into a contract or contracts with an insurance company authorized to do business in this State to provide members of the volunteer fire department or members of an incorporated volunteer fire company, on a group or individual basis, individual retirement annuities as defined by section 408(b) of the Federal Internal Revenue Code of 1954 as amended (26 U.S.C.§408(b)). The contract or contracts shall provide for coverage under these annuities of such volunteers and may provide for the establishment of annuities on behalf of the spouses of the volunteers. In the discretion of the governing body of the municipality, it may appropriate and pay all or any portion of the costs of such contract or contracts.

 

    2. (New section) The board of commissioners of a fire district that maintains a volunteer fire department or has one or more incorporated volunteer fire companies affording fire protection to the fire district may, in addition to any other benefit provided in Title 40A of the New Jersey Statutes, enter into a contract or contracts with an insurance company authorized to do business in this State to provide members of the volunteer fire department or incorporated volunteer fire company or companies, on a group or individual basis, individual retirement annuities as defined by section 408(b) of the Federal Internal Revenue Code of 1954 as amended (26 U.S.C.§408(b)). The contract or contracts shall provide for coverage under these annuities of such members and may provide for the establishment of annuities on behalf of their spouses. By resolution, the board of commissioners may appropriate and pay all or any portion of the costs of such contract or contracts.

 

    3. N.J.S.40A:10-31 is amended to read as follows:

    40A:10-31. A volunteer fireman shall not be ineligible to receive any of the benefits under N.J.S.40A:10-29 [and], N.J.S.40A:10-30 or section 2 of P.L. c. (C. ) (now pending before the Legislature as this bill) because he may otherwise receive any form of compensation or salary from the municipality.

(cf: P.L.1979, c.230, s.1)

 

    4. This act shall take effect immediately.

 

 

STATEMENT

 

    This bill was prompted by an Attorney General Opinion in November of 1996 which advised the Department of Community Affairs that, under his interpretation of current law, municipalities and fire districts are not authorized to purchase annuity contracts for the benefit of volunteer firefighters if the contracts provide for the payment of annuity benefits to individuals in any event other than their total permanent disability.

    However, the loss of the use of such incentives is expected to detract from the ability of communities to recruit and retain volunteer firefighters. Therefore, this bill would clarify the right of municipalities and fire districts that maintain volunteer fire departments or in which there are one or more incorporated volunteer fire companies to offer volunteer firefighters and their spouses insurance annuity policies. Such annuity policies could be provided on a group or individual basis with insurance firms authorized to do business in New Jersey.

 

 

                             

 

Permits municipalities and fire districts to provide retirement annuities to volunteer firefighters.