First Responders Retirement Parity Act: Contracted Firefighters and EMTs Gain Access to Government Pension Plans

This bill, officially titled the First Responders Retirement Parity Act, makes a critical change to federal retirement law. Simply put, it ensures that government pension plans can include employees from certain contracted public safety agencies—think private ambulance companies or contracted fire services—without jeopardizing the plan’s special tax status as a “governmental plan.” This applies specifically to firefighters, EMTs, and paramedics who are contracted by a local government to provide substantially all of their emergency response services. The change takes effect for plan years starting after the law is enacted.

Closing the Retirement Gap for Contracted First Responders

If you’re an EMT working for a private company that handles 911 calls for your city, your retirement options might look very different from the city’s directly employed firefighters. This bill aims to fix that. The federal tax code offers governmental plans certain advantages, and this legislation expands who can participate in them. Under Section 2, if a tax-exempt public safety agency (a 501(c) organization) contracts with a local government to provide fire or emergency medical services, the employees doing that work can now be included in the government’s pension plan. This is huge for parity.

For the first responder, this means access to the often more robust and stable retirement benefits typically reserved for direct government employees. For example, a paramedic working for a contracted service in a rural county could now potentially join the county’s established pension fund, gaining better retirement security. The bill also makes necessary technical updates to existing laws, like ERISA and the Internal Revenue Code, ensuring that these newly included workers are treated the same as government employees when it comes to things like maximum benefit limits and pension insurance coverage.

What This Means for Local Governments and Pension Funds

This isn't just a win for the first responders; it’s a practical fix for the local governments that rely on these contracted services. Many smaller towns and rural areas contract out their EMS or fire services. Before this bill, those arrangements created a complex retirement hurdle. Now, the government can offer a more cohesive benefits package to all its emergency providers, which is a major boost for recruitment and retention in critical public safety jobs.

However, it’s worth noting that while the bill prevents the governmental plan from losing its status, including new groups of employees does mean more people drawing from the fund eventually. While this is the cost of extending parity, it adds administrative complexity and potential liability to the existing governmental pension funds. The clarity provided by the bill’s language—that the employees must dedicate “substantially all” of their work to the contracting subdivision—is key here, aiming to prevent the inclusion of employees whose work is only marginally related to the government contract. This specificity helps keep the focus on those truly acting as local emergency response providers.