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HELPS Retiree Legislation Update - August 4, 2006
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IAFF Wins Passage of HELPS Retirees Bill
August 4, 2006 – The IAFF has won an unprecedented congressional victory in the successful passage of its HELPs retiree health care proposal and the elimination of early withdraw penalties from Deferred Retirement Option Program (DROP) accounts. Both proposals have been top IAFF legislative priorities this year.
“The joint passage of HELPs and the DROP language represent the most significant financial benefits ever provided by Congress exclusively to the nation’s fire fighters and other public safety employees,” says IAFF General President Harold Schaitberger. “It is an enormous achievement.”
The bill, H.R 4, the Pension Protection Act of 2006, was passed overwhelmingly late August 3 in the U.S. Senate. The House had passed the identical bill last week. The legislation now heads to The White House for the president’s signature. All indications suggest that President George Bush will sign the measure.
Beginning in 2007, all current and future public safety retirees will receive a $3,000 tax credit towards the cost of health insurance or long-term care insurance premiums. Depending on the retiree’s tax bracket, this equals tax savings of between $540 and $870 per year. “The average retiree will see a lifetime in pocket tax savings in the tens of thousands of dollars,” says President Schaitberger. “The passage of HELPs is a real and measurable benefit to every IAFF member.”
The total cost of HELPs is in excess of $3.4 billion over the next 10 years.
Also included in H.R 4 is language eliminating the 10 percent penalty for withdrawals from DROP accounts prior to age 59 1/2. Beginning January 1, 2007, retirees can access DROP money at age 50.
“The passage of this bill is the result of 18 months of hard work and effective lobbying of leadership in both parties about the necessity of passing a pension bill that included our HELPs and DROP language.”
The IAFF’s proposal was supported by several congressional allies, including Representative Chris Chocola (R-IN), the bill’s principal sponsor who shepherded the legislation throughout the entire process.
“This victory is the result of our bipartisan approach to politics and lobbying,” Schaitberger says. “Once again, our union has delivered real results for our membership and highlighted the value and importance of political action.”
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