In my previous article, I laid out why Troy City Council’s repeated claim, that “the IRS made us” eliminate the Volunteer Firefighter Incentive Program, is not supported by the record. The IRS did not ban volunteer firefighter retirement benefits. It did not order Troy to terminate its plan. It raised issues about how Troy structured and taxed its program, leaving Troy with options. Troy chose elimination, and then sold that choice to firefighters and residents as inevitability.
That’s where Clawson comes in.
Because Clawson didn’t just say volunteer firefighters can have a legitimate retirement benefit. Clawson built one, funded it, governed it, disclosed it publicly, and, in 2024, expanded it. And Clawson did this for paid-on-call volunteer firefighters, operating under Michigan law and federal tax rules, the same basic legal environment Troy claims made its plan impossible.
To understand how deeply Troy’s narrative falls apart, you have to look closely at how Clawson’s system actually works, not at slogans, but at ordinances, audits, actuarial reports, and pension governance. That’s what follows.
Clawson Shows the Truth: Volunteer Firefighters Can Have a Real Pension, So Why Did Troy Tell Us Otherwise?
Troy residents have been told, over and over, some version of the same message:
- “Volunteer firefighter pensions aren’t workable.”
- “The IRS made us do it.”
- “It would cause tax problems.”
- “We had no choice.”
In my view, that narrative wasn’t just incomplete, it was deliberately framed to end the conversation and to justify stripping volunteer firefighters of the benefit that kept the system stable. Because a few miles away, the City of Clawson demonstrates exactly what Troy pretends is impossible:
A real, functioning pension plan for paid-on-call / volunteer firefighters, with a governing board, a separate trust, actuarial oversight, investment management, and regular pension payments.
Clawson’s plan isn’t a rumor. It’s documented. And once you read how Clawson actually operates, the “we had no choice” story collapses.
1) First: Yes, Clawson Firefighters Are Volunteers (Paid-On-Call)
Clawson itself describes its fire department as consisting of “part-paid volunteer firefighters.” That’s important, because Troy loves to blur this point when it’s convenient, as if “volunteer” automatically means “no pension,” “no retirement benefit,” or “illegal.”
Clawson proves the opposite: they are volunteers, and the city still provides a pension benefit through a structured plan.
2) Clawson’s Pension Is Not a 401(k). It’s a Defined Benefit Plan.
Clawson’s plan is a single-employer defined benefit pension plan, not an individual “investment account” like a 401(k).
That means:
- The benefit is defined by a formula (years of service → monthly pension).
- The money is held and managed in a pension trust.
- The retiree typically receives a monthly benefit payable for life (based on plan rules).
- This is not “cash paid out while you work” and it’s not “your own 401(k) account.”
Clawson’s own audited financial statements state plainly that the plan provides pensions “for all paid on call fire fighters.”
Downtown Clawson
3) Who Runs the Plan? A Real Pension Board (Not “City Hall Makes It Up as They Go”)
Clawson’s plan is governed by a Fire Department Pension Board / Board of Trustees. The City’s audited financial statements describe management as vested in a 5-member Pension Board.
Clawson’s Summary Annual Report also lists the Board members and shows this is a standing governance body, not an informal promise. And even a 2024 ordinance update reflects that Clawson maintains the pension board structure in its code.
That matters because a real pension plan isn’t “vibes.” It’s governance, accountability, and fiduciary administration.
4) Where Is the Money Kept? In a Trust Separate From City Assets.
Clawson’s plan assets are held in a trust separate from other City assets, and the plan publicly describes how trust funds can be used. From the plan’s Summary Annual Report:
- Assets are “held and invested in a trust separate from other City assets”
- Disbursements are made only to retirees/beneficiaries, contribution refunds (if applicable), and plan expenses
This is exactly what a legitimate pension structure looks like: a segregated trust, administered for plan purposes.
5) How Do Benefits Work? The Retirement Formula and Eligibility.
Clawson’s audited financial statements spell out key benefit provisions:
Retirement age and monthly benefit
- Employees who retire at age 55 are entitled to a monthly pension payable for life calculated as:
- $45 × years of service
Vesting rules
The plan also has vesting requirements:
- 5 years of total service for employees hired before July 1, 2009
- 10 years for employees hired after that
Death benefits
Clawson’s audited statements note the plan provides death benefits, described as based on the present value of accrued benefits and provided regardless of years of service. That is not “just a stipend.” That is a retirement system with benefit rules.
6) Who Pays Into It? The City Funds It Based on Actuarial Recommendations.
A major “tell” in these debates is whether a city acts like a plan is real by actually funding it like a plan.
Clawson does.
Actuarial oversight
Clawson’s Summary Annual Report explains that a valuation is prepared and that the board’s tasks include ensuring contributions are received and benefits are paid according to plan provisions. The report also notes an actuarial valuation prepared by Foster & Foster, and explains the plan’s funding objective.
Member contributions
The plan report states member contribution rate: none (i.e., the firefighters aren’t funding it through payroll deductions as a condition).
Employer contributions
The audited financials state the Pension Board establishes contribution rates based on an actuarially determined contribution recommended by an independent actuary.
And in the Summary Annual Report, the required employer contribution for the fiscal year is shown (e.g., computed employer rate $98,262 for that valuation cycle).
Revize
The audit also provides an example of city contributions for a fiscal year (e.g., the City contributed $129,710 for the year ended June 30, 2022).
Again: this is normal pension practice, fund it annually, under actuarial guidance.
7) Is the Plan Healthy? Clawson Publishes Funded Status and Asset Values.
Clawson’s Summary Annual Report includes funded status and trust values, including:
- Market value of assets (example shown: $4,202,644 as of June 30, 2023)
- Actuarial accrued liability and funded ratio (example shown: 110.6% funded ratio)
- It also shows investment returns and projected expenditures, including pension payments and administrative expenses.
Clawson also publishes an annual pension report (GASB/actuarial style) describing the plan as a single employer defined benefit plan administered by a five-member board. This is what transparency looks like: not “trust us,” but “here are the numbers.”
8) Who Manages Investments? Real Custody + Professional Advisors.
Clawson’s Summary Annual Report lists professional advisors and service providers, including:
- A custodian bank (Comerica Bank listed)
- Investment management / advisory entities
- An actuary (Foster & Foster)
- Legal counsel (listed)
In other words, the plan is operated as a serious financial entity, as a pension trust should be.
9) So Why Does This Matter for Troy?
Because Clawson is proof of concept: Volunteer / paid-on-call firefighters can be covered by a defined benefit pension plan.
- The plan can be funded with actuarial discipline
- The assets can be kept in a separate trust
- The plan can be overseen by a pension board
- The city can publish transparent reports on funded status and payments
So when Troy leaders imply “a volunteer pension is not workable” or “tax issues make this impossible,” Clawson stands there like a receipt.
In my view, the way Troy framed this wasn’t honest leadership, it was a tactic: Create confusion, emphasize fear (“tax”), then declare the benefit dead and move on.
10) The Most Damaging Part: This Doesn’t Just Hurt Firefighters, It Hurts Every Resident.
If you hollow out the volunteer system, you don’t get “business as usual.” You get:
- fewer trained responders,
- fewer experienced officers,
- longer response gaps,
- deeper reliance on mutual aid,
- and eventually the “solution” residents can’t afford: full-time staffing expansion.
So when Troy misleads firefighters, Troy is also misleading residents, because public safety is not a talking point. It’s the service you call when your kid can’t breathe, when your house is on fire, when someone is trapped, when seconds matter.
Clawson is a working example of a city that chose to support its volunteers with a real plan.
Troy chose a different path, and then told everyone the choice was forced.
11) What Troy Council Should Be Forced to Answer (On the Record)
If Troy still wants to say “we couldn’t,” then the public deserves specific answers:
- Why can Clawson run a defined benefit plan for paid-on-call firefighters?
- Why can Clawson hold assets in a separate trust and pay real monthly benefits?
- Why can Clawson publish funded status and pension payments publicly?
- Why did Troy choose elimination and confusion instead of a clear, transparent replacement design?
Because “we had no choice” is not an answer. It’s a slogan.
Clawson doesn’t just have a “benefit.” Clawson has a system, board governance, segregated trust assets, actuarial funding, investment management, and documented retirement benefits for volunteer / paid-on-call firefighters.
That’s the part Troy doesn’t want residents to see.