More
than 18 months of hard work and effective lobbying has paid off
in an unprecedented congressional victory in the passage the
HELPS retiree health care proposal and elimination of early
withdrawal 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. It is an enormous achievement, and a real and
measurable benefit for IAFF members in the United States.
The bill, the
Pension Protection Act of 2006, was passed overwhelmingly August
3 in the U.S. Senate. The House had passed the identical bill
the previous week, and the legislation has now been signed by
President Bush.
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. The total cost of
HELPS is in excess of $3.4 billion over the next 10 years.
Also included
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.
This victory
is the result of our bipartisan approach to politics and
lobbying. Once again, our union has delivered real results for
our membership and highlighted the value and importance of
political action.
- Harold A. Schaitberger, General Presid
