Take Your Pick – Employees Allowed to Choose Between Future 401(a) Plan Contributions and Future HRA Contributions

By Jeff Chang

A recently issued IRS private letter ruling may provide public agencies and their employees with another way to give employees more control over the types of retirement benefits they will eventually receive.

As we previously reported, governmental employers can provide their employees with the benefits of tax-free reimbursements from a health expense reimbursement arrangement. However, HRAs only can be funded with employer contributions – employees cannot make salary reduction contributions. Governmental employers also can make pre-tax retirement contributions to either a 457(b) plan or a 401(a) plan, but, because governmental employers generally cannot maintain 401(k) plans, employee pre-tax elective contributions generally must be made to a 457(b) plan with its lower contribution limits, not to a 401(a) plan.

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The Differences Between Bundled and Unbundled Retirement Plan Servicing Arrangements

By Jeff Chang

When it comes to retirement plan servicing arrangements for most public agencies, there are basically two flavors: bundled and unbundled. It is important for public plan sponsors and plan fiduciaries to understand the differences between these arrangements so they can ensure that their plans and plan participants are being serviced appropriately. Continue reading

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Problems with Co-Provider 457(b) Plan Arrangements

By Jeff Chang

There is a novel recordkeeping and plan investment arrangement for governmental 457(b) plans that could create a number of problems for the plan’s sponsor, fiduciaries and participants. There may be a significant number of these arrangements throughout California. Continue reading

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Tightening Budgets, Layoffs and Ongoing Labor Negotiations Highlight the Value of Retiree Health Reimbursement Arrangements

By Jeff Chang

Given the current circumstances, many public agencies are finding ways to use health reimbursement arrangements as creative and cost-effective benefits for their employees and former employees. As explained in earlier posts, HRAs possess a number of important and valuable features. Continue reading

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