Summary of the Report of

The House Interim Committee on Fire Board Regulation

Representatives Tom George and Juanita Walton, Co-Chairs

December, 2001

In October of this year the Speaker of the House appointed the Interim Committee on Fire Board Regulation to study problems of fire protection districts. The committee found that many fire district pension plans are experiencing a shift in demographic trends or what is described as the maturation of a plan. In most fire protection districts, a majority of vested participants are at or near normal retirement eligibility. The utilization of the lump sum option in a mature plan will reduce plan assets at a very rapid pace.

The committee also found that audits required by statute of St. Louis and Greene counties and reported to the State Auditor’s Office are not used by the State Auditor. The State Auditor has no oversight over the fire boards.

The committee recognizes some of the problems associated with fire board pension plans and recommends:

Recommendation 1:

The Committee recommends that the fire protection district boards of trustees obtain an outside actuarial review every five years to evaluate plan experience and actuarial assumptions for reasonableness. The districts may want to consider a separate governing structure for their pension plans. The voluntary compliance with any recommendations as a result of the special review is essential to ensure benefits promised today are adequately funded and do not become a financial burden to the next generation.

Recommendation 2:

The Committee recommends that St. Louis and Greene Counties no longer be required to file a copy of biennial audits with the State Auditor’s Office since the Auditor has no oversight over the fire board audits.

Steve Bauer, Legislative Analyst