Volunteer Emergency Services Recruitment and Retention Act of 2015

To amend the Internal Revenue Code of 1986 to provide recruitment and retention incentives for volunteer emergency service workers. 1. Short title This Act may be cited as the Volunteer Emergency Services Recruitment and Retention Act of 2015 2. Elective treatment of length of service award programs as eligible deferred compensation plans (a) In general Section 457(e) (19) Special rules applicable to length of service award plans (A) In general The term eligible deferred compensation plan (B) Length of service award plan For purposes of this paragraph— (i) In general The term length of service award plan (ii) Bona fide volunteer An individual shall be treated as a bona fide volunteer if the only compensation received by such individual for performing qualified services is in the form of— (I) reimbursement for (or a reasonable allowance for) reasonable expenses incurred in the performance of such services, or (II) reasonable benefits (including length of service awards), and fees for such services, customarily paid by eligible employers in connection with the performance of such services by volunteers. (iii) Qualified services The term qualified services (C) Maximum deferral amount In the case of a length of service award plan whose sponsor has elected to have such plan treated as an eligible deferred compensation plan, subsection (b)(2) shall be applied by striking the lesser of— the applicable dollar amount, (D) Distribution requirements In the case of a length of service award plan whose sponsor has elected to have such plan treated as an eligible deferred compensation plan, subsection (d)(1)(A)(ii) shall be applied by deeming a severance from employment to have occurred at the later of— (i) the payment date under the terms of the plan, or (ii) the date on which the plan participant ceases to perform qualified services. (E) Limitation on accruals (i) In general In the case of a length of service award plan that is a defined benefit plan (as defined in section 414(j)) whose sponsor has not elected to have such plan treated as an eligible deferred compensation plan, such plan shall be treated as not providing for the deferral of compensation if the aggregate amount of length of service awards accruing with respect to any year of service for any bona fide volunteer does not exceed $5,500. In the case of a length of service award plan described in the preceding sentence that is a defined benefit plan (as defined in section 414(j)), the limitation on the annual deferral shall apply to the actuarial present value of the aggregate amount of length of service awards accruing with respect to any year of service. Such actuarial present value shall be calculated using reasonable actuarial assumptions and methods assuming payment shall be made under the most valuable form of payment of the length of service award under the program with payment commencing at the later of the earliest age at which unreduced benefits are payable under the program or the participant’s current age. (ii) Cost-of-living adjustment In the case of taxable years beginning after December 31, 2015, the Secretary shall adjust the $5,500 amount under clause (i) at the same time and in the same manner as under section 415(d), except that the base period shall be the calendar quarter beginning July 1, 2014, and any increase under this paragraph that is not a multiple of $500 shall be rounded to the next lowest multiple of $500. . (b) Conforming amendments (1) Section 457(e)(11) (11) Certain plans excluded Any bona fide vacation leave, sick leave, compensatory time, severance pay, disability pay, or death benefit plan shall be treated as not providing for the deferral of compensation. . (2) Section 3121(a)(5)(I) of such Code is amended by striking section 457(e)(11)(A)(ii) section 457(e)(19) (c) Effective date The amendments made by this section shall apply to taxable years beginning after December 31, 2014. 3. Exemption of length of service award programs from the Employee Retirement Income Security Act of 1974 The Secretary of Labor shall issue guidance clarifying that a length of service award program described in section 457(e)(19) 29 U.S.C. 1002(2)

Summary: Volunteer Emergency Services Recruitment and Retention Act of 2015 Amends the Internal Revenue Code to allow sponsors of certain deferred compensation plans to elect to include length of service award plans for bona fide volunteers providing firefighting and fire prevention services, emergency medical services, ambulance services, and emergency rescue services. Directs the Secretary of Labor to issue guidance clarifying that a length of service award program is not an employee pension benefit plan under the Employee Retirement Income Security Act of 1974 (ERISA).