Pension for firefighters increased
Members of the Bemidji Pioneer Firefighters Relief Association will have access to increased pension funds starting next year.
The association appeared before the Bemidji City Council on Monday requesting permission to increase pension benefits from $4,150 per year of service to $5,100.
With approximately 20 firefighters looking on from the audience, the council voted 4-2 to authorize the increase. Councilors Nancy Erickson and Roger Hellquist voted against the motion and Councilor Ron Johnson was absent.
Complete pension funds are available to "fully vested" firefighters who have served at least 20 years with the fire department and who are at least 50 years old. "Vested" firefighters, those who have given at least 10 years of service, have access to a portion of their pension funds, if they decide to retire.
The last increase to the pension fund was authorized in June 2006, when it was raised from $3,750 to $4,150. Erickson voted against that motion as well.
Pension funds are paid out of the relief association's own funds. The state contributes some money each year, and the fund is built mainly through investments, explained Bill Batchelder, the president of the relief association, in a Wednesday interview.
There are few tax dollars involved, he said.
However, if the association's fund is ever in an underfunded position, the city of Bemidji is responsible for covering the deficit, according to State Statute.
Erickson voted against the increase because of this requirement, saying that taxpayers would be responsible for covering the difference if ever necessary.
Once the pension amount is raised it can not be lowered, Erickson said.
In the 100-year history of the association, that happened once, Batchelder said. Following 9/11, the association's investments dipped, as did most nationally, he explained. For three years, the city had to cover the difference in the fund, which amounted to about $10,000 a years.
The association keeps a 5 percent reserve fund, which amounts to about $100,000, he explained.
The Bemidji Pioneer Fire department Relief Association works with a financial planner to make sure its investment portfolio is diversified, Batchelder said. It also meets with Finance Director Ron Eischens, who backed the association during Monday's meeting, telling the council that the portfolio is diversified .
"We have a very, very solid investment policy statement," Batchelder said. "It's very conservative."
The Bemidji Fire Department has 40 paid, on-call volunteer firefighters, who are paged when additional help is needed at a call.
Batchelder said it is the relief association's obligation to make sure that volunteer firefighters are getting a good return on the investments.
"We are charged with getting the maximum return to our members with the lowest amount of risk," he said.