General – Page 5 – Firefly Admin Inc.

LOSAP BENEFITS CANNOT BE ROLLED OVER

May 20, 2019

We’ve recently been discussing the ramifications of the fact that the assets of a LOSAP are not participant assets, but municipal assets. Another ramification is that the benefits paid cannot be rolled over to an IRA. There are other tangential reasons as well, but a main reason why is that the assets are not the…

FEDERAL TAXATION OF LOSAP

May 17, 2019

Benefits paid from a LOSAP are subject to federal income tax as of the date this blog post is being written. In general, any form of compensation is taxable in the year in which it is earned, unless the the Internal Revenue Code specifically exempts it. One of those exemptions are contributions into 401(k) –…

LOSAP & DIVORCE

May 16, 2019

Last time we discussed how LOSAP assets are assets of the sponsoring municipality. One ramification of this is when a participant goes through a divorce. Most people are aware of a Qualified Domestic Relations Order, or QDRO, where pension assets are divided. Many try and divide LOSAP assets in the same way. But since the…

LOSAP ASSETS ARE MUNICIPAL ASSETS

May 15, 2019

A key difference between a LOSAP and a qualified pension plan is that the LOSAP assets are municipal assets. They are not owned by the individual participants, nor are they protected from the general creditors of the municipality. We’ll explore in future posts how this key factor impacts several ways that a LOSAP is administered.

COULD HUMAN LIFESPAN EXCEED 100 YEARS?

May 13, 2019

An article which ran on CNBC.com on Wednesday May 8th had the following key points: You can read the entire article here: www.cnbc.com/2019/05/08/techs-next-big-disruption-could-be-delaying-death.html The intention of this article was to alert investors to an opportunity. If this becomes a reality, it isn’t just the stock prices of these companies that will be increasing, but the contributions…

CAN A LOSAP SPONSOR IMPOSE A ONE-YEAR WAITING PERIOD TO PARTICIPATE?

May 9, 2019

We discussed yesterday that all active volunteer firefighters are eligible to participate in a LOSAP in New York State. The next question is – is a waiting period before an eligible volunteer can begin participating? We believe the answer is no. We have reviewed many plans that will not allow a participant to participate in…

ELIGIBILITY TO PARTICIPATE

May 8, 2019

All active volunteer firefighters are eligible to participate in the LOSAP. Article 11-A defined an active volunteer firefighter as “a person who has been approved by the authorities in control of a duly organized volunteer fire company or volunteer fire department as an active volunteer firefighter of such fire company or department and who is…

DB VS DC – ONE APPROACH

May 3, 2019

Recently, some questions have been raised about which plan is better – the DB or the DC plan. There are a lot of factors to consider when making this determination, and the assumptions you use play a major role. I’m going to look at one example. Let’s consider comparing a $20 DB plan and a…

ADJUSTING THE INTEREST RATE

April 24, 2019

This post is a piggy-back of the last post – go back one day to read that (you may want to read a few of the prior posts as well). We saw in the last post that is we assumed a 2.5% rate of return on the investments but consistently earned only 1.5%, contributions would…

FAILING TO MEET EARNINGS TARGET

April 23, 2019

Yesterday we looked at a simple scenario to help illustrate how the funded ratio increases towards 100% over time as contributions are made and earnings are realized. It looked like the following, where the first number is the assets of the plan, the second number is the present value of accrued benefits, and the third…

Category: General