Colorado Legislative Council Staff
NO FISCAL IMPACT
January 2, 1998
House Local Government
Steve Tammeus (866-2756)
TITLE: CONCERNING REVISIONS TO THE STATUTORY PROVISIONS GOVERNING FIRE AND POLICE PENSION PLANS FOR PURPOSES OF COMPLIANCE WITH THE QUALIFIED PLAN REQUIREMENTS OF THE FEDERAL INTERNAL REVENUE CODE.
Summary of Assessment
This bill adds requirements to the law that any volunteer firefighter pension plan must satisfy the qualification requirements of the federal internal revenue code, and specifies the criteria such plans must follow to meet the requirements.
The bill also adds requirements that benefits paid from an old hire pension fund must be distributed in accordance with certain internal revenue code requirements and specifies the criteria for meeting those requirements. The bill also specifies that contributions, benefits, and service credit with respect to qualified military service shall be provided in accordance with the internal revenue code.
The bill revises the term “money purchase plan” to “money purchase pension plan”, and further replaces the current definition of a money purchase plan with requirements for:
• the employer’s fixed obligation to make annual contributions to the plan;
• the plan to provide an individual account for each member; and
• the member’s benefits to be based solely on the amount contributed to the member’s account, and any income, expenses, gains, and losses allocated to the member’s account.
The bill specifies that upon attaining the eligibility requirements for a benefit, a member shall be fully vested in the benefits the member has accrued. The bill makes other conforming amendments.
The provisions of this bill require that fire and police pension plans comply with federal internal revenue code requirements for qualified pension plans. The bill does not affect state or local government contributions to the plans, distributions from the plans, or administrative expenses of the Fire and Police Pension Association.
The bill does not affect state, or local government, revenue or expenditures. Therefore, the bill is assessed as having no fiscal impact. The bill would become effective upon the signature of the Governor.
Fire and Police Pension Association Local Affairs