LOSAP programs 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.
Today there are three times the amount of emergency calls and only half the amount of volunteers there were 25 years ago. In an effort to provide communities with solutions to this critical dilemma, Length of Service Awards (LOSAPs) have been established in many states.
By choosing a LOSAP, towns and municipalities can avoid the significant costs associated with hiring full-time, paid emergency services personnel, and financially reward its valuable volunteers.
In operation, LOSAP programs pay eligible volunteers cash service awards at the entitlement age. Typically, the entitlement age is 55-67 years of age. In addition, LOSAP programs normally pay cash benefits if a volunteer should die or become disabled before reaching the entitlement age.
There are three different types of LOSAP programs. The first is a defined contribution plan where an organization defines a set, cash contribution it makes each year to a volunteer’s LOSAP account.
With the second type of LOSAP plan, a defined benefit plan, an organization defines what the cash payout to the volunteer will be at the entitlement age and then makes their contribution, which is determined by an actuary each year.
The third type is like a private sector profit-sharing plan where the funding organization examines the total cash contribution it will make to the LOSAP each year based on available funds. Each volunteer’s LOSAP account is then credited with a share (shares are based on years of service in many LOSAP plans) of the total contribution.
Contact Penflex today to find out how we can assist you with establishing a new LOSAP plan, reviewing an existing plan or even consolidating two different plans into one new LOSAP plan.