SERVICE AWARD PROGRAMS

Length of Service Award Programs (LOSAPs)

LOSAPs are pension-like programs intended to help recruit and retain volunteer firefighters and volunteer ambulance squad members. In a LOSAP, volunteers are financially rewarded based upon the number of years they serve.

Why Communities
Need LOSAPs

Today there are three times the amount of emergency calls and only half the amount of volunteers there were 25 years ago. In effort to provide communities with solutions to this critical dilemma, Length of Service Awards (LOSAPs) have been established in many states for several years.

How LOSAPs Can Help Save Taxpayers Money

By choosing a LOSAP, towns and municipalities can avoid the significant tax dollars associated with the costs of full-time, paid emergency services, and still reward its valuable volunteers.

Entitlement Age

In operation, LOSAPs pay eligible volunteers cash "service awards" at the "entitlement age." Typically the entitlement age is 55-67 years of age. LOSAPs normally pay cash benefits if a volunteer should die or become disabled before reaching the entitlement age.

Types of LOSAPs

There are two different types of LOSAPs. One is a defined contribution plan where an organization defines a set, cash contribution it makes each year to a volunteer's LOSAP account. Under a defined benefit plan, an organization defines what the cash payout to the volunteer will be at the entitlement age and then make their contribution, which is determined by an actuary.

 

Step #1: One meeting with the volunteer organization or local government officials to select program rules. Discussions will include choice of defined benefit or defined contribution plan if necessary, entitlement age, length of service award, etc. Penflex will then prepare a draft summary of the proposed program rules based on meeting #1.

Step #2: A second meeting will be held to prepare an outline of LOSAP service crediting. You can reduce fees here by establishing a LOSAP credit system on your own.

Step #3: A Penflex representative will explain the proposed LOSAP to volunteers at a highly recommended yet optional meeting.

Step #4: Penflex will then prepare a draft of the resolution to be adopted by the sponsor. If required by state law, voter approval may be required.

Step #5: An optional public information meeting on the proposed LOSAP. Penflex has had only one LOSAP not approved in the last seven years, which was subsequently approved at the second election. Penflex recommends that a public information meeting be held if voter approval of a proposed program is required.

Step #6: Formal approval of the LOSAP. (May require an election.)

Step #7: Penflex drafts the required formal and legal plan documents.

Step #8: Penflex advises officials of their responsibilities in operation of the program.

Costs of LOSAPS

The grand total fee for the above depends on how many optional steps are chosen. One-time establishment fees range from $2,500 - $5,000.