i_pofprc_2016a_2016-11-09t13:33:26z0 Hearing Summary

Date: 11/09/2016

Senator Cooke called the commission to order.



01:34 PM -- Presentation by the Office of the State Auditor



Mr. Andrew Knauer, Audit Manager, representing the Office of the State Auditor (OSA), came to the table and gave some introductory remarks. He provided members with a copy of the "Study of Volunteer Firefighter Pension Plans in Colorado" (Attachment A).



Attachment A.pdf



01:36 PM



Mr. William (Flick) Fornia, representing the Pension Trustee Advisors and OSA, came to the table to speak to the commission about the study. Mr. Fornia discussed the background and funding of volunteer firefighter plans in Colorado. He noted that the majority of plans in Colorado do not have any unfunded liability and generally follow best practices, but that at least 101 plans are underfunded. He also highlighted the statewide coordination of plans and administrative costs. He responded to a commission question regarding state funding of volunteer firefighter pensions.





01:42 PM



Mr. John Nixon, representing Duane Morris, LLP., and OSA, came to the table to discuss how volunteer pension plans maintain tax qualification. He noted that several plans in Colorado are not meeting tax qualification requirements. He discussed the repercussions of noncompliance and recommended some ways the plans can become tax compliant. In addition, he noted that while the vast majority of plans in Colorado are compliant with the Fair Labor Standards Act, 33 plans may warrant further investigation to determine if they are compliant.



01:54 PM



Mr. Fornia returned to the table and confirmed that the volunteer plans are paid out of the General Fund.



02:06 PM



Mr. Nixon returned to the table and discussed plan design alternatives and touched on issues related to restructuring noncompliant plans. He highlighted the six proposed alternatives to current plan structures as recommended in the study.