Not too long ago, we were browsing the California State Controller’s website and were surprised to find a requirement for the filing of a Public Retirement System Financial Transactions Report for each state and local public retirement system on an annual basis. Of...
Governmental employers are challenged by today’s tight labor market, where many experienced and older public employees have already retired. It is becoming increasingly difficult to attract experienced or senior management personnel without commitments or guarantees...
This post discusses some of the interesting and special rules and laws that govern the retirement plans established by Indian tribal governments (ITGs). Concerns over state and local government sovereignty caused Congress to exempt the plans of state and local...
This post highlights many of the significant law changes affecting governmental retirement plans that are part of the recently adopted Secure 2.0 Act of 2022 (the Act). The table below simply highlights “what” is changed, “when” the change takes effect, and “whether”...
In an earlier post, we explained what “pick-up” contributions are, and how they are used by many governmental employers to convert mandatory after-tax employee contributions into pre-tax contributions. IRS Revenue Ruling 2006-43 contains specific guidance on what the...
Recently, a retirement plan advisor asked whether a “public” charity was “governmental” and eligible to maintain a non-ERISA retirement plan. This post explores some of the terminology that is used by the IRS, and in the retirement industry, and how one does not...
Sponsors of governmental retirement plans seem to be hiring, firing, or transitioning to new third-party administrators (TPAs) or recordkeepers all the time. The differing roles, duties and legal responsibilities of plan administrators, TPAs, and recordkeepers need to...
Although most public employers are familiar with the concept of a “pick-up” of employee mandatory contributions, many do not appreciate what is required to properly document a “pick-up”. This post reviews the basics of employer pick-ups and the documentation...
As previously discussed, a public agency that does not have a section 218 agreement has a choice of participating in Social Security or providing a Social Security Replacement Plan (SSRP). Although many California local governments rely on CalPERS as their principal...
Due to the rising costs of health care and health insurance, pressure from union bargaining partners, and the application of the “equal contribution rule” for public agencies that provide health coverage through CalPERS, many California cities and special districts...
Because both the Internal Revenue Code (Code) and PEPRA sometimes “conspire” to limit the retirement benefits of public agency employees in ways that make it harder for affected agencies to hire and retain certain individuals, it may become necessary for those...
The vast majority of public agencies already maintain a 457(b), or eligible deferred compensation plan. A much smaller number also maintains one or more 401(a) plans in addition. This post discusses some of the reasons a public agency might want to add a 401(a) plan...
Most public agency defined contribution plan sponsors can easily recall the current amount being contributed to participants in their plan; however, not all can tell you “how” the contribution is being allocated amongst the participants. The distinction between a...
Recently announced changes in the IRS-sponsored Voluntary Compliance Program (VCP) may encourage public agencies with known plan compliance problems or defects to apply this calendar year under Anonymous VCP, before that option is replaced in 2022. As part of its...
By Jeff Chang A section 218 agreement is an agreement between a state (or its local governments and instrumentalities) and the Social Security Administration providing for participation in Social Security and/or Medicare for designated groups of employees....
By: Jeff Chang Recently, I spoke to a roomful of public agency human resources managers. As I sometimes do, I took a few informal surveys of my audience. One of the questions I posed was: "How many of your agencies allow employees to cash out some or all of their...
By: Jeff Chang In the governmental non-ERISA marketplace, there are a number of investment providers and plan recordkeepers that offer and provide retirement plan documents for use by governmental employers that have been "pre-approved" by the IRS. Typically, these...