Length of Service Award Programs (LOSAPs) are

pension A pension (, from Latin ''pensiō'', "payment") is a fund into which a sum of money is added during an employee's employment years and from which payments are drawn to support the person's retirement from work in the form of periodic payments ...

-like programs increasingly used across the United States to assist communities in recruiting, retaining and rewarding volunteer

firefighter A firefighter is a first responder and rescuer extensively trained in firefighting, primarily to extinguish hazardous fires that threaten life, property, and the environment as well as to rescue people and in some cases or jurisdictions also ...

s and EMS personnel. Wit
86% of all fire departments being volunteer

fire department A fire department (American English) or fire brigade (Commonwealth English), also known as a fire authority, fire district, fire and rescue, or fire service in some areas, is an organization that provides fire prevention and fire suppression se ...

s, communities are increasingly seeking tools to assist them in boosting the ranks of volunteers. Th
LOSAP
is a simple tool that can be implemented cost-effectively and with minimal taxpayer expense. Conversely, if enrollment numbers drop low enough, many municipalities can be forced to convert to paid departments potentiall
costing states and counties millions
in extra spending. Enrollment in volunteer fire departments ha

in each of the past two decades, making LOSAPs and other

recruitment Recruitment is the overall process of identifying, sourcing, screening, shortlisting, and interviewing candidates for jobs (either permanent or temporary) within an organization. Recruitment also is the processes involved in choosing individual ...

tools extremely important to the communities that count on th
nations more than 30,000 fire departments
A LOSAP is exempt from Internal Revenue Code §457 as a result of the passing of the Small Business Job Protection Act of 1996 on August 20, 1996. This bill amended §457(e)(11) of the Internal Revenue Code with language that excluded “any plan paying solely length of service awards to bona fide volunteers…” A defined contribution LOSAP is not a qualified plan like a 401(k), 457 or IRA, therefore distributions from a defined contribution LOSAP are not eligible for rollover into a qualified plan. Since funding of the LOSAP comes from the local government, there may be certain state restrictions or requirements for adopting and administering a LOSAP. Any municipality that would like to start a LOSAP should consult the applicable state laws first. There are some states with specific statutes governing LOSAP, like New York, New Jersey, and Wisconsin. Other states simply authorize municipalities to spend taxpayer dollars on "recruitment and retention", without specific guidelines on the LOSAP. The maximum benefit that can be accrued for any one year of service was $3,000 up until 2018 when the limit was increased to $6,000.

References

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