LOSAP Myths

While length of service award programs (LOSAP) can be a great way for volunteer fire departments and ambulance squads to increase activity among existing members and recruit new members, they are not the only solution to recruitment and retention problems. Below is a list of the common myths or misunderstandings about LOSAP programs:

1. Members older than the entitlement age cannot participate in the program.

Not true. Any person who is an active volunteer firefighter or volunteer ambulance squad member and eligible under the company’s by-laws to participate in an organization’s activities which points can be earned is eligible to participate in the service award program, regardless of age. In fact, many senior members have begun to collect service award program benefits after earning a year of service credit under the point system of the program.

2. All volunteer fire and EMS services must use the same LOSAP point system.

Not true. The law generally defines the activities for which points can be earned by members and sets the rules as to how the points must be calculated. Each service award program sponsor can modify their point system as long as their rules are not more generous than the law allows. 

3. Life insurance must be included in the LOSAP.

Not true. Life insurance is included in many service award programs, but is in fact, only an option, not a requirement.

4. Only life insurance companies offer LOSAPs.

Not true. Life insurance companies, investment firms and banks offer investment and insurance products to be used to fund the LOSAP benefits. Some of these companies also provide certain service award program administrative services. Independent pension plan administrators offer administrative services to assist volunteer organizations to establish and run service award programs and will work directly with the sponsor, no matter where the sponsor chooses to invest the LOSAP funds.

5. The sponsor of the LOSAP must make the required contribution to the program trust fund at the beginning of the year.

Not true. The actual contribution needed each year generally varies from year to year and is based in part on the number of firefighters or ambulance squad workers who earn 50 points or more points during the year. Since the list of volunteers who earned 50 points is not prepared until after year-end, the exact amount due for the year is not known until after the year is over.

Except for the payment of any life insurance premiums, there is no requirement to make the contribution for the year at the beginning of the year and, in fact, many sponsors make the contribution after the year is over when the exact amount due can be calculated.

To read about more about the steps involved in creating a successful LOSAP click here!

To contact Penflex with questions about LOSAP programs click here. You can also call Penflex with LOSAP questions at: 1.800.742.1409.