Helping Idaho Public Employees Build A Secure Retirement

Firefighters Retirement Fund (FRF) Handbook

Disclaimer
This handbook covers the benefits of the Firefighters Retirement Fund (FRF), as defined in Chapter 14, Title 72, Idaho Code. This section of Idaho Code is available from PERSI or on-line at http://legislature.idaho.gov/idstat/Title72/T72CH14.htm. The handbook is a general summary only and should not be taken as final legal authority. Nothing in this handbook creates an entitlement. If there is any discrepancy between this publication and the law, the provisions of the law will prevail.

INTRODUCTION

The Firefighters Retirement Fund is a Defined Benefit 401(a) Pension Plan administered by the Public Employee Retirement System of Idaho (PERSI). The plan is a "closed" plan, meaning no new members are entering the system. As of June 30, 1998, there were 163 active members, and 482 retired members. The last active working member will be able to retire with 25 years of service by the year 2005.

On October 1, 1980, administration of the FRF became the responsibility of PERSI. Paid firefighters hired on or after October 1, 1980 are PERSI members, with benefit entitlements as outlined in Chapter 13, Title 59, Idaho Code.

Although now administered by PERSI, the retirement benefits of FRF members will never be less than what they would have been had the FRF system remained separate from PERSI. Paid firefighters who are FRF members will receive the benefits outlined in this handbook. Firefighters hired on or after October 1, 1980 should refer to the PERSI member handbook for their benefit entitlements.

ELIGIBILITY FOR MEMBERSHIP

Employer Units: A city or fire district who, on October 1, 1980, employed paid FRF firefighters, is an FRF employer unit.

Employee Member: A paid firefighter or beneficiary of a firefighter prior to October 1, 1980, who was receiving benefits or establishing the right to receive benefits from the FRF, is a member of the FRF. A paid firefighter is an employee (except for office secretaries) who devotes his or her principle time of employment to the care, operation, maintenance or the requirements of a regularly constituted fire department.

MEMBERSHIP CATEGORIES

Active: A paid firefighter who meets the basic requirements for membership and is making contributions to the fund through payroll deduction.

Inactive: A former active member with at least five years of active service, who is not receiving a retirement benefit, has not received a separation benefit and has not reached the age of 60.

Retired: A former active member who is receiving a retirement allowance.

Beneficiary: A surviving spouse or minor child receiving a retirement allowance because of the death of a firefighter.

Option I and Option 2

Firefighters hired before July 1, 1976 had the choice to become Option I (Class A) or Option II (Class B) members. Firefighters hired after July 1, 1976 and before October 1, 1980 automatically became Option II (Class C) members. Class C FRF members merged with Class B on April 1, 1990. Contributions and benefits are different for the two options.

  • Option I - Contributions and benefits are based on the state average paid firefighters salary.
  • Option II - Contributions and benefits are based on the firefighter's own individual salary.
CONTRIBUTIONS

Active FRF members and their employers contribute to the fund. Employer contribution rates are set by the Retirement Board at levels which will keep the system fiscally sound and support the funding plan developed from the actuarial valuation. Employee rates are set by statute, and have remained constant at 11.45% of gross pay since 1978.

The funding for the FRF system is paid by member contributions, employer contributions and receipts from a fire insurance premium tax. Employer contributions are comprised of three elements: 8.65% of the salaries of covered members, the PERSI fire and police employer rate and an additional rate applied to the salaries of all firefighters of the employer. The additional rate is designed to meet the costs of the fund not covered by other resources. Idaho Code, Section 59-1394 requires the cost of the excess benefits to be retired by the schedule of contributions over a period of time not to exceed 50 years.

Based on the July 1, 1998 actuarial valuation, the current schedule or excess contributions will amortize the FRF excess costs by March 31, 2017, or 18.8 years from the valuation date. This is less than the fund's original funding goal, which is to amortize the liabilities by June 30, 2018 (forty years from July 1, 1978). The current amortization period is less than the statutory maximum of 50 years.

Employee Rates

Since the FRF funding was changed effective October 1, 1978, the member contribution rate has been 11.45% of gross salary from the previous year. For Option I members, this means 11.45% of the statewide average firefighter salary. For Option II members, this is 11.45% of their individual average salary.

Contributions made after June 30, 1983 are tax-deferred. Contributions before then were taxed. Taxed and tax-deferred contributions are accounted for separately. Interest is credited on member contributions beginning effective July 1, 1991.

History of FRF Employer Contribution Rates as a Percent of Pay
Option Class Definition
I
A
Retire under statewide average salary
II
B
Hired before 7-1-76 and retired under their individual average salaries
II
B
Hired 7-1-76 and later. Prior to 4-1-90 were Class C
N/A
D
Under PERSI
FRF Employer Contribution Rate
Dates Class Total Rate Normal Contribution Rate Excess Merger Cost Rate Additional Employer Rate Employer SS Rate
10-1-80 to 12-31-80
A,B,C
26.63%
9.50%
10.00%
1.00%
6.13%
1-1-81 to 12-31-81
A,B,C
27.15
9.50
10.00
1.00
6.65
1-1-82 to 9-30-82
A,B,C
27.20
9.50
10.00
1.00
6.70
10-1-82 to 2-28-83
A,B,C
25.09
9.05
8.34
1.00
6.70
3-1-83 to9-30-83
A,B,
24.71
8.75
8.26
1.00
6.70
10-1-83 to 12-31-83
A,B,
38.58
8.75
22.13
1.00
6.70
1-1-84 to9-30-84
A,B,
38.88
8.75
22.13
1.00
7.00
10-1-84 to 12-31-84
A,B,
41.33
8.82
24.51
1.00
7.00
1-1-85 to9-30-85
A,B,
41.38
8.82
24.51
1.00
7.05
10-1-85 to 12-31-85
A,B,
41.14
8.89
24.20
1.00
7.05
1-1-86 to 12-31-87
A,B,
41.24
8.89
24.20
1.00
7.15
1-1-88 to 12-31-89
A,B,
41.60
8.89
24.20
1.00
7.51
1-1-90 to3-31-90
A,B,C
41.74
8.89
24.20
1.00
7.65
4 -1-90 to9-30-92
A,B
41.74
8.89
24.20
1.00
7.65
10-1-92 to 12-21-92
A,B
41.74
9.75
23.34
1.00
7.65
1-1-93 to6-30-93
A,B
35.90
9.75
17.50
1.00
7.65
7-1-93 to9-30-93
A,B
35.90
9.99
17.26
1.00
7.65
10-1-93 to 9-30-94(1)
A,B
35.90
10.87
16.38
1.00
7.65
10-1-94 to 10-31-97(2)
A,B
35.90
11.85
15.40
1.00
7.65
11-1-97 to
A,B
35.90
10.01
17.24
1.00
7.65
10-1-80 to9-30-82
D
19.50%
9.50%
10.00%
10-1-82 to2-28-83
D
17.39
9.05
8.34
3-1-83 to9-30-83
D
17.01
8.75
8.26
10-1-83 to9-30-84
D
30.88
8.75
22.13
10-1-84 to9-30-85
D
33.33
8.82
24.51
10-1-85 to9-30-92
D
33.09
8.89
24.20
10-1-92 to 12-31-92
D
33.09
9.75
23.34
1-1-93 to6-30-93
D
27.25
9.75
17.50
7-1-93 to9-30-93
D
27.25
9.99
17.26
0-1-93 to9-30-94
D
27.25
10.87
16.38(3)
10-1-94 to10-31-97
D
27.25
11.85
15.40(4)
Class C merged with Class B -
11-1-97 to
D
27.25
10.01
17.24
no rate change

1) Rule 120.03.a

2) Ch. 03, Rule 027.01

3) Rule 120.03.b

4) Ch. 03, Rule 027.02

CREDITED SERVICE

FRF service is counted in years. A year is 12 months of employment. Months are counted on a day-to-day basis. For example, if a member started working on June 8th, his service is counted from June 8th to July 7th. Total service in years is months divided by 12, and rounded down. For example, a member with 71 months has 5 years of service (71 ÷ 12 = 5.92, rounded down to 5). If the member had 72 months, he would have 6 years of service (72 ÷ 12 = 6).

MEMBER ACCOUNTS

Every FRF member has his own individual member account. As employee contributions are received, they are credited to the individual accounts. Although employers contribute on behalf of their employees, employer funds are not attributed to individual member accounts.

Each September, members receive a Membership Account Statement showing accumulated contributions and credited service as of June 30 of that year.

TRANSFER OF EMPLOYMENT

If an active FRF member transfers from one participating FRF employer to another, all accrued service is retained without penalty.

If an FRF member transfers to an employer that is not an FRF member, accumulation of FRF service ceases. If the employer is not an FRF employer, the firefighter becomes a Class D PERSI firefighter if he remains a firefighter. If he takes a general member position, he becomes a PERSI general member.

LEAVES OF ABSENCE

Employers may grant leaves of absence without pay to firefighters where the firefighter is expected to return to active employment.

During a period of leave of absence without pay, the firefighter becomes inactive, and does not accrue service because there is no salary from which contributions can be withheld. Upon return to active employment, contributions and service credit resume.

Any leave without pay will lengthen the member's date of voluntary retirement by an equal number of days.

A separation benefit is not payable while a firefighter is on a leave of absence.

RETIREMENT BENEFITS

FRF retirement benefits are based on the firefighter's years of service as well as the Final Average Salary (FAS). A firefighter must have five years of service to be eligible for a lifetime retirement allowance at age 60. With 5 - 19 years of service, the firefighter will receive 2% of FAS for each year as a paid firefighter, payable at age 60. With 20 or more years of service, the member receives 40 - 65% of FAS for each year as a paid firefighter (see chart below).

For Option I members, the FAS is based on the statewide average firefighter salary. For Option II members, the FAS is based on the firefighter's individual salary. For Option II, the FAS is calculated using the final 60 months average compensation. The firefighter's years of service determine his pension benefit.

Voluntary Retirement

Option I (Class A)

  • Hire date prior to July 1, 1976
  • Final Average Salary based on all firefighters statewide
  • No Minimum Retirement Age if 20 or more years of service.
  • Minimum Retirement Age if less than 20 years of service: 60

Option I (Class B and former Class C)

  • Hire date prior to October 1, 1980
  • Final Average Salary based on individual's own salary
  • No Minimum Retirement Age if 20 or more years of service.
  • Minimum Retirement Age if less than 20 years of service: 60

YEARS OF SERVICE DETERMINE RETIREMENT BENEFIT

Years of Service % of Final Average Salary (FAS)
5 to 19 Years
2% of FAS for each year as paid firefighter
At least 20 Years 
40% of FAS
21
45%
22
50%
23
55%
24
60%
25
65%

Idaho Code Section 72-1447 states that an initial benefit amount cannot be more than 100% of compensation during a firefighter's final 36 months of service.

APPLYING FOR RETIREMENT

A firefighter considering retirement should contact PERSI at the closest service office (Boise, Pocatello, Coeur d'Alene) to request an Application for Retirement. The application should be submitted at least one month before the planned retirement date.

The retirement allowance is payable from the first day after the firefighter retires from active service. The first payment will be as of the first of the month following the first full month the firefighter ceases to be an employee. (Example: Last day of employment is March 15. Retirement is effective March 16. The first payment will be made on May 1, and will include March 16-31 allowance and April's benefit.)

DISABILITY RETIREMENT

Disability due to Occupational Causes

A paid firefighter incapacitated by injury or illness wholly or partially attributed to occupational causes shall be eligible for disability retirement. To initially qualify, the incapacity must be to a degree that prevents efficient service. During an initial two-year period of incapacitation, disability retirement allowances will be paid as follows:

  • Option I firefighters (Class A): 65% of the average paid firefighter's wage in the state.
  • Option II firefighters hired prior to July 1, 1976 (Class B) and Option II firefighters hired between July 1, 1976 and October 1, 1980 (former Class C): 65% of the firefighter's individual average monthly salary.
  • PERSI firefighters (Class D) hired after October 1, 1980 but before July 1, 1993: if not eligible for PERSI disability retirement,is eligible for disability benefits at least equal to those of an Option II firefighter.
  • PERSI firefighters (Class D) hired on or after July 1, 1993: The allowance amount is based on the PERSI disability retirement benefit calculation. Firefighter members with less than 10 years of PERSI service may qualify for disability retirement if incapacitated on the job. After 10 years, the allowance is based on PERSI Code. Refer to Idaho Code 59-1352, 59-1302(12) and 72-1445(36).

If the firefighter has not returned to work within two years, the Retirement Board will determine if the disability has rendered the firefighter totally incapacitated as defined in Idaho Code. Medical exams may again be required to determine the level of incapacity. If the firefighter is totally incapacitated, payments shall continue at the rate initially provided.

If after two years the incapacity is determined to be less than total, but the disability is such that it reduces the member's ability to engage in any gainful employment, payments will be made based on the percentage of disability as compared to the whole person. This determination will be made by the Retirement Board based on medical and non-medical information.


Disability due to Non-Occupational Causes

An active firefighter with more than 5 and less than 21 years of service as a paid firefighter who becomes totally incapacitated due to non-occupational causes (a personal injury or disease arising outside the course of employment) may be eligible for disability retirement as long as he remains totally incapacitated. Monthly payments will be made as follows:

  • Option I firefighters (Class A): 2% of the statewide average firefighter's wage, for each year of active service (example: 9 years service x 2% = 18% of statewide average wage).
  • Option II firefighters hired prior to July 1, 1976 (Class B) and Option II firefighters hired July 1, 1976 and after (former Class C): 2% of the firefighter's individual final average monthly salary, for each year of active service (example: 13 years of service x 2% = 26% individual final average salary).

An active firefighter with at least 21 years of service as a paid firefighter who becomes totally incapacitated due to non-service related causes may choose disability retirement or a monthly allowance equal to voluntary retirement.

All paid firefighters who become totally incapacitated due to non-service related causes may be subject to periodic review and re-examination.


Applying for Disability Retirement

A firefighter or his department head must apply to PERSI for Disability Retirement. Disability determination will be made by the Retirement Board based on medical and non-medical information.

FRF disability does not have a waiting period, and starts the day after sick leave or salary ends.

The disability retirement allowance is payable the first day of the calendar month in which the firefighter is no longer in a pay status (when sick leave is exhausted).

If an FRF member returns to work from a disability retirement, he is given service credit for the period of disability retirement.

DEATH BENEFITS

Beneficiaries

A beneficiary is the firefighter's surviving spouse, or if the spouse is deceased, the firefighter's children under age 18. The benefit is paid monthly for the remainder of the spouse's life. A child may receive monthly benefits until age 18, or until marrying, whichever occurs first.

Example of minor children receiving benefit: If there are three children under age 18, they split the benefit three ways. When the oldest child reaches 18, the remaining two share the benefit. If one of those children marries at age 17, the entire amount is paid to the last minor child. Once the last child reaches age 18, all death benefit payments cease.

Should a firefighter die, PERSI needs the following documents before benefits may be paid to the surviving spouse: The firefighter and spouse's marriage certificate, and the surviving spouse's social security card.


Occupational Related Death

If a paid firefighter is killed or sustains injury from which death results while in the performance of his job, a death benefit will be paid to the firefighter's beneficiary.

The monthly amount paid to the beneficiary:

  • Option I firefighter (Class A): 65% of the statewide average firefighter's salary.
  • Option II firefighter hired before July 1, 1976 (Class B) and Option II firefighter hired July 1, 1976 and after (former Class C): 65% of the individual's final average salary.

Annual Cost of Living Adjustments (COLAs) would be added.

Non-Occupational Related Death

If an active firefighter with more than 5 and less than 21 years of service dies from non-occupational causes, a death benefit will be paid to the firefighter's beneficiary. The monthly amount paid to the beneficiary(ies):

  • Option I firefighter (Class A): 2% of the statewide average firefighter's salary, for each year of active service.
  • Option II firefighter hired before July 1, 1976 (Class B) and Option II firefighter hired July 1, 1976 and after (former Class C): 2% of the individual's final average salary, for each year of active service.

If an active firefighter has 21+ years of service, the beneficiary's monthly payment would be as if the firefighter retired voluntarily the month of his death. Refer to Retirement Benefits. Annual COLAs would be added.

Death of a Retired Firefighter

If a retired firefighter dies, the surviving spouse will continue receiving the same monthly benefit amount (plus COLAs) for as long as the surviving spouse lives. If the surviving spouse dies, the retirement benefit will be paid to any surviving children of the firefighter until they reach age 18, or marry, whichever occurs first.

SEPARATION BENEFITS

If a firefighter under age 60 terminates employment with less than 20 years of service, he may elect to receive a lump sum separation benefit consisting of his contributions plus interest (interest began accruing July 1, 1991). If the member is later re-employed as a paid firefighter, he may repay the separation benefit plus interest to buy back service.

In lieu of withdrawing accumulated contributions, a firefighter with less than 20 years of service, may choose to convert his contributions to an equivalent benefit under the PERSI retirement system in the Class D PERSI Firefighter category. This conversion will normally result in a higher "years of service" factor than firefighters under FRF, which is the explicitly stated legislative intent. Contact PERSI for more information.

A firefighter with five or more years of service is eligible for a lifetime retirement benefit at age 60, and should request a retirement estimate before deciding to withdraw his funds.

TAXES ON RETIREMENT BENEFITS

Federal

Retirement benefits are taxable under Internal Revenue Service code. At the time of retirement, an IRS form W-4P will be provided for withholding of federal income taxes. Unless the member indicates "no withholding," or designates the number of exemptions, federal income tax will be withheld from the retirement payments at the rate appropriate for a married person with three exemptions. IRS publication 575 discusses tax liabilities on pension and annuity income. Firefighters should review this publication or discuss the liabilities with a tax consultant.

Each January, PERSI provides each retiree with a 1099-R statement of the gross allowance paid and taxes withheld for the previous year. The 1099-R is used to file federal income taxes. Notices are also sent each time the net amount of the retirement benefit changes.

Taxes have already been withheld from contributions made prior to July 1, 1983. A percentage of the monthly retirement benefit will not be taxable if contributions were made prior to that date.

State

FRF benefits paid to Idaho residents are subject to Idaho State income tax, with certain amounts deductible based on individual tax filing status. According to the Idaho Tax Commission, FRF benefits paid to retirees living outside Idaho are not subject to Idaho State tax withholding.

Idaho State income tax can be withheld from retirement benefit payments if authorized by the firefighter on form RS-322.

PERSI staff is not qualified to provide individual tax advice or information. Questions concerning taxes should be directed to a tax professional or the appropriate taxing agency.

Taxes on Death Benefits

Death benefits may be subject in whole or in part to federal and state income tax. Financial information for tax purposes is sent to monthly benefit recipients at the end of each year. Beneficiaries are urged to seek tax advice from the IRS, state tax commission, or an accountant to determine individual tax liability.

Other tax issues firefighters should investigate:

  • There may be a different taxation of disability retirement benefits. Consult with a tax advisor.
  • There may be a "Government Pension Offset" in the Social Security system. Contact Social Security for more information.
DIRECT DEPOSIT

80% of PERSI and FRF retirees have their monthly benefit check deposited directly into a bank account instead of having it sent through the mail. With direct deposit, checks are safely deposited into bank accounts the first day of the month, saving time and effort. Direct deposit eliminates the possibility of delayed, lost or stolen checks, and direct deposit funds are available for use earlier than those sent by check through the mail.

To begin direct deposit, retirees should request a form from PERSI, and return it with a voided deposit slip from the financial institution.

NCPERS

Firefighters who participated in the NCPERS (Prudential) group term life insurance program as an active member may continue coverage into retirement. The monthly premium will be deducted from the monthly retirement allowance. Enrollment may not be initiated after retirement. Payroll clerks can assist with enrollment. NCPERS is administrated by:

Byerly & Company
7600 E. Orchard Rd., Suite 250S
Englewood CO 80111
1-800-525-8056

COST OF LIVING ADJUSTMENTS (COLAs)

Each year, FRF applies a Cost of Living Adjustment to retirement benefits. For both Option I (Class A) and Option II (Class B and former Class C) members, the COLA is based on the increase in the average salary of all paid firefighters in the state. FRF members are fortunate to receive annual COLAs. Most private sector retirees receive no COLAs at all, so over time, their purchasing power drops considerably. FRF COLAs are effective January 1 each year, which is reflected in the benefit received on or about February 1.

Date Retired Prior to 7-1-76 Class A & B Hired Before 7-1-76 Class C Hired After 6-30-76
1-1-79 6.76% 3.00% 3.00%
1-1-80 6398 3.00 3.00
1-1-81 10.90 3.00 3.00
1-1-82 14.05 3.00 3.00
1-1-83 8.94 3.00 ** 3.00
1-1-84 5.08 5.08 3.00
1-1-85 3.74 3.74 3.00
1-1-86 4.80 4.80 3.00
1-1-87 4.50 4.50 3.00
1-1-88 3.70 3.70 3.00
1-1-89 5.70 5.70 3.00
1-1-90 5.12 5.12 3.00
4-1-90 5.12 5.12 no class C*
1-1-91 6.82 6.82  
1-1-92 4.52 4.52  
1-1-93 4.32 4.32  
1-1-94 7.15 7.15  
1-1-95 5.41 5.41  
1-1-96 3.54 3.54  
1-1-97 3.99 3.99  
1-1-98 5.00 5.00  
1-1-99 3.65 3.65  

* Class C Firemen merged with Class B 4-1-90 - no rate change.

** Those who retired after June 30, 1976 (Class A and B) had a 3% COLA ceiling until Supreme Court decision June, 1983. At that time, a lump sum adjustment to Statewide Average Fireman COLA was made. No apportionment of months was involved.

Note: Class A (Option I) retiring on Statewide Average Salary between date of October 1 and December 31 do not get a COLA the subsequent January 1 because they retired under the latest Statewide Average.

Class B (Option II) retiring up to December 31 of any year receive a COLA on subsequent January 1.

Interest accrual on FRF accounts began on July 1, 1991.

DIVORCE

If a firefighter was married at any time while an active member, his spouse may be legally entitled to a portion of the retirement benefit and/or account should they divorce.

If applying for a separation or retirement benefit, a copy of the divorce decree may be required.

For information on how divorce affects an FRF account, contact PERSI or an attorney experienced in divorce matters. After July 1, 1998, an Approved Domestic Relations Order (ADRO) must be obtained to divide FRF benefits.

ADDRESS CHANGES

It is vital that PERSI be informed of any address changes for an FRF member. This is particularly important if the member has left FRF employment but has left funds in the system. PERSI has thousands of dollars payable to people we cannot locate. Retirees who do not inform PERSI of address changes risk lost or delayed checks or notices. Address changes must be submitted in writing, and must include the member's Social Security Number.

SOCIAL SECURITY

Social Security contributions are entirely separate from FRF and PERSI. PERSI does not collect Social Security contributions and does not administer Social Security benefits and cannot answer questions related to Social Security. You may wish to call the State Social Security Manager at the Office of the State Controller for information regarding Social Security coverage.

RETIREMENT ESTIMATES

Firefighters within three years of retirement may request to have a retirement estimate calculated by a Field Representative. Estimate amounts may differ than amounts on annual account statements because the Field Representative will take a more in-depth look at the record when calculating the estimate.

An estimate is just that -- an estimate. Actual retirement benefits cannot be calculated until actual retirement and PERSI receives final paperwork from the employer. If, in a rare instance, an estimate is higher than the actual benefit amount, PERSI cannot pay more than allowed by law.

RETIREMENT COUNSELING AND WORKSHOPS

PERSI provides individual retirement counseling for FRF members. Firefighters should meet with a Field Representative to discuss retirement benefits and the retirement process. After receiving a retirement benefit estimate, and when ready to complete the retirement application, call PERSI for an appointment.

PERSI also offers Retirement and Financial Planning workshops for members within 10 years of retirement. Although the PERSI information at the workshops would not be relevant for FRF members, the other topics could be very useful. The topics include: financial planning, estate planning, income projection, projecting retirement expenses, Social Security benefits, other sources of income in retirement, and more. Contact PERSI for information.

RETURNING TO EMPLOYMENT AFTER RETIREMENT

After beginning FRF retirement, a member may work for any public or private employer without affecting his retirement benefits, unless returning to work for the same fire district or fire department from which he retired. If returning to the same employer, retirement benefit payments stop, and the firefighter begins earning service credit again. Employer and employee contributions again become payable.

If a retired FRF firefighter (Option I or Option II) begins working at a different fire department or fire district in a position as a paid firefighter, he will become a new member of PERSI. Employee and employer contributions will be required at the PERSI Firefighter Class D rate. Service credit in PERSI, as a Class D, will begin accruing. The FRF retirement benefit will continue to be paid.

If a retired FRF firefighter (Option I or Option II) begins working for any PERSI employer in a non-firefighter position, he will become a new General Member of PERSI. Employee and employer contributions will be required at the PERSI General Member Class 1 rate. Service credit in PERSI will begin accruing. The FRF retirement benefit will continue to be paid.

ACTUARIAL VALUATION

The actuary values the assets and liabilities of the FRF separate and apart from the PERSI assets and liabilities. An independent actuarial valuation of the FRF is conducted every two years. Although the assets are accounted for separately they receive the same interest credit as all invested assets. The liabilities are calculated directly from the experience of all FRF members and employers.

INVESTMENT FUND

All funds received by FRF and PERSI, including member and employer contributions, are invested to earn the best rate of return with acceptable risk. The pension fund is administered by PERSI's professional investment staff under the direction of the Retirement Board. The Board, staff and funding agents are required to manage the assets according to Idaho's Prudent Investor Rule. FRF funds are invested with PERSI funds but the actuarial valuation accounts for them on a separate basis.

Investment policy and guidelines are determined by the Retirement Board in consultation with the investment staff. PERSI's investment horizon spans decades with the goal of funding benefits for members who range in age from 18 to over 100 years old.

PERSI strives to minimize the effect of external influences by diversifying among a wide range of asset classes and investment management styles, both domestically and internationally.

Equities - Stocks make the retirement systems part owner of many successful companies worldwide. This includes Real Estate where PERSI owns shares in shopping centers, office buildings and other income-producing propertie

Bonds/Fixed Income - Whether financing a government or corporation's need for money, bonds yield a steady stream of income.

Cash Equivalents - Money market accounts allow accessibility to funds and flexibility.

The investment fund earned 17.6% in FY 1998, and over the last decade asset growth has been strong.

An independent performance evaluation analysis of each money manager's investment results is conducted each quarter. Each year PERSI produces an Annual Report detailing the investment fund's performance for the year. It includes an actuarial review of both the PERSI and FRF funds.

RETIREMENT CHECKLIST

Firefighters thinking about retiring in a few years, should also start thinking about the steps needed to make the transition into retirement as smooth as possible. Here is a checklist of things to do plan a successful retirement and the documents needed to complete FRF's retirement process.

Throughout Career

  • Review Account Statement annually to ensure we have correct salary, Social Security number and other information. Contact PERSI if there are any questions about it.
  • Evaluate personal finances regularly including assets, liabilities, insurance and investments.
  • If work history includes any Social Security covered employment, contact Social Security every three years to verify work history and to receive an estimate.

Three Years Before Retirement

  • Call PERSI to receive a benefits estimate, and to verify service history.
  • If work history includes any Social Security covered employment, contact Social Security to verify work history and to receive an estimate.

One to Two Years Before Retirement

  • Call PERSI to receive an updated benefits estimate, and to verify service history.
  • If work history includes any Social Security covered employment, contact Social Security to verify work history and to receive an updated estimate
  • Contact any other tax-deferred annuity agents or financial planners to discuss other retirement income. (Take FRF and (if applicable) Social Security estimate(s) along.)
  • Consult with a tax specialist about the tax consequences of various pension payments.

Six Months Before Retirement

  • Contact PERSI to receive an updated benefits estimate and to request a retirement application packet.
  • Send PERSI a copy of Social Security card and birth certificate. Birth certificate only required if retiring with less than 20 years of service. We may make copies at our office if more convenient.
  • Provide PERSI with divorce decree (if any), if married while an active FRF member and are divorced or divorcing.
  • If age 62 or older, and work history includes any Social Security covered employment, notify Social Security of retirement plans.
  • If participating in NCPERS Insurance, check with employer about continuing this after retirement.

Two Months to Two Weeks Before Retirement

  • Make an appointment to meet with a PERSI Field Representative (with spouse). This is not required, but can be very helpful.
  • Prepare application package ( W4-P, state withholding, direct deposit and retiree insurance forms). We advise submitting all forms to PERSI 30 days prior to planned retirement date, although we can process retirement in less time if needed.
  • If work history includes any Social Security covered employment, visit Social Security office with spouse, if retiring at age 62 or over.
  • Contact payroll representative to finalize insurance arrangements, if any.
  • Inform employer of planned retirement date.

Before Retirement Effective Date

  • Make sure employer sends an RS-109 Notice of Separation to PERSI. Retirement cannot be finalized without it. The form must be received by the last working day of the month prior to retirement date or the first payment will be delayed. It may be faxed.

After Retirement

  • If work history includes any Social Security covered employment, contact Social Security to learn procedures on applying for benefits and Medicare enrollment (parts A & B). (If applicable.)
RETIREMENT APPLICATION FORMS

Although we try to make retirement as easy as possible, a variety of forms are needed to complete the process. Please contact PERSI to receive application forms and have questions answered. FRF employers will not have the forms. When sending a document to PERSI, make sure name and Social Security number are written somewhere on the document or copy.

Application for Retirement RS-121F

Notice of Separation RS-109

The employer must complete this form and return it to PERSI prior to requested retirement date. If this form is late, the first monthly payment will be delayed.

State Tax Withholding Certificate RS-322 Optional

To withhold Idaho State income taxes from monthly allowance.

Federal Tax Withholding Certificate W-4P Optional

To withhold federal income taxes from monthly allowance. If this form is not completed, PERSI is required by the IRS to withhold at the rate of "married with 3 exemptions."

Direct Deposit Authorization RS-448 Optional

To deposit your monthly checks directly in a financial institution. A voided deposit slip is required.

Additional items needed to complete retirement

Unless indicated otherwise, send photocopies of documents only – do not send originals. PERSI can make copies at our offices if you come in for an appointment.

Birth Certificate or acceptable substitute

Required to verify age if retiring with less than 20 years of service.

Social Security Card

Voided Deposit Slip from Financial Institution Send original, voided, deposit slip – not photocopy

Required only if choosing to have monthly allowance deposited directly in a financial institution.

Divorce Decree and Property Settlement Agreement (if incorporated into the divorce decree)

If married at any time while an active FRF member and are divorcing or divorced.

PURCHASE OF FRF LAYOFF TIME

This law, effective July 1, 2000, allows FRF members who were laid off between 1978 and 1981 to purchase the service toward their retirement. There is no cost to the FRF system because members must pay the full cost themselves. The employer may participate in the purchase if they wish.

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