"air time"

[joel]

Please clarify/furnish an example.

Thank you,

Joel L. Frank

[Guest Carol the Writer]

Here is what I think it means. We have a public employer client that provides a pension for its volunteer firefighters. As volunteers, they receive no current compensation. However, they receive a "de minimis" pension of $750.00 monthly at retirement under a 10 C & L form of payment for 25 years of credited service.

Note this is a Code Section 415 definition of a de minimis pension.

"Air time" allows a volunteer firefighter who has less than 25 years of credited service to buy (out of his own pocket) credited service that he need to make up all or a part of those 25 years. There are, of course, document matters, as well as actuarial funding issues, and whether the cost to offer such air time purchases will be subsidized by the public employer. All of this needs to be worked out. But it is now possible under the PPA.

Our client has not yet addressed this, but we intend to bring it up with them the next time that we meet with them.

Any other thoughts? Carol Caruthers, MSPA, EA

[joel]

Here is what I think it means. We have a public employer client that provides a pension for its volunteer firefighters. As volunteers, they receive no current compensation. However, they receive a "de minimis" pension of $750.00 monthly at retirement under a 10 C & L form of payment for 25 years of credited service.

Note this is a Code Section 415 definition of a de minimis pension.

"Air time" allows a volunteer firefighter who has less than 25 years of credited service to buy (out of his own pocket) credited service that he need to make up all or a part of those 25 years. There are, of course, document matters, as well as actuarial funding issues, and whether the cost to offer such air time purchases will be subsidized by the public employer. All of this needs to be worked out. But it is now possible under the PPA.

Our client has not yet addressed this, but we intend to bring it up with them the next time that we meet with them.

Any other thoughts? Carol Caruthers, MSPA, EA

So if firefighter Fred has 20 years but he needs 25 he contributes the required additional employee cost and possibly the employer's so that he can start to draw his pension after 20 years of service rather than 25. Is this a realistic example.

Thanks,

Joel

[Guest Carol the Writer]

That's how I read it, but again it depends on the plan document. Carol Caruthers