By Jeff Chang
Although many of our municipal and special district clients have sophisticated contracting and RFP departments, they often do not have balanced and well-negotiated administrative service agreements (ASAs) with their 401(a) and 457(b) recordkeepers. This is due in part to a lack of understanding of how ASAs differ from other local agency contracts and the fact that many such contracts are reviewed and “negotiated” when the contracting agency has little leverage.
Continue readingBy Jeff Chang
Having worked with dozens of cities and special districts, we are familiar with the focus and attention placed on memorandums of understanding (MOUs) and management employment contracts – especially provisions relating to retirement benefits and compensation. Unfortunately, because responsibility for the maintenance of retirement plan documents often does not reside with the individuals handling the labor negotiations or the processing of increased employer contributions, it is fairly common to find the agency’s retirement plan documents have not been timely or properly updated to reflect retirement benefit changes or enhancements made in recent MOUs or employment contracts.
Continue readingBy Jeff Chang
If you are responsible for the administration of a public agency 457(b) or 401(a) plan, you know that these tax-favored plans are complicated and subject to myriad rules and requirements found in the plan document, the Internal Revenue Code (and related IRS guidance), and applicable state law (e.g., the California Constitution and Government Code, for California agencies). Although many people are intimidated by the typical sixty-plus-page plan document on their credenzas, those who serve as designated plan administrators and fiduciaries need to understand that the plan document often is just the beginning – the “quick-start guide.”
Continue readingBy Jeff Chang
Although “governmental” plans are not subject to ERISA and the guidance issued by the U.S. Department of Labor (DOL), public agency plans in California are subject to ERISA-like rules and would benefit from following the DOL’s recent guidance on missing participants.
Continue readingBy Jeff Chang
Previously, we explained that California alone has thousands of public agency employers (i.e., cities, counties, special districts, school districts and JPAs) that do not contribute to Social Security, but instead provide a Social Security Replacement Plan (SSRP). We also explained how many government retirees could receive a rude awakening from Uncle Sam, through the application of the Windfall Elimination Provision (WEP) and/or the Government Pension Offset (GPO), which can adversely affect retirees (and their spouses) who participated in both Social Security and an SSRP. Many of these public employers are unaware that they are required to warn their employees of a possible reduction in their future Social Security benefits because of the WEP or GPO.
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