Is Your Social Security Replacement Plan Up to Snuff?

By Jeff Chang

As we previously explained, most public agencies are not automatically subject to Social Security. They have a choice between voluntarily participating in Social Security pursuant to a section 218 agreement, or they can exempt some or all of their payroll by providing what is known as a “Social Security Replacement Plan” (SSRP).

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The “Mechanics” of Combining Your Agency’s Multiple 457(b) Plans

By Jeff Chang

Many public agencies have come to sponsor and maintain multiple 457(b) plans, which can unnecessarily increase the compliance burden as well the fees paid by participants. Although the human resource and finance managers who typically oversee these plans know that it makes sense to simplify and consolidate these plans, many don’t know how to start or accomplish this task. If you are in this situation here are a few suggestions for breaking down and addressing the tasks:

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California Public Agency 401(a) Sponsors Should Amend Their Plans for PEPRA and May Want to Submit for a New IRS Determination Letter

By Jeff Chang

Ongoing changes in the way the IRS reviews and “approves” qualified retirement plan documents and the need for California public agencies to comply with the Public Employees’ Pension Reform Act (PEPRA) are forcing these agencies to reevaluate the “form” of 401(a) plan document they use. Although California’s landmark pension reform legislation was directed primarily at public sector defined benefit pension plans, such as CalPERS, CalSTRS, and the numerous county retirement systems, PEPRA also established a number of requirements for California public agency defined contribution plans, or 401(a) plans. In 2017, the IRS significantly changed the rules regarding the use of pre-approved plan documents (i.e., the form/template plan documents typically offered or sold by plan recordkeepers, financial institutions or benefits consultants that previously have gone through an IRS “pre-approval” process and have received an IRS opinion letter regarding satisfaction of various plan qualification rules). We will refer to these plans as “PPDs.”

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Posted in 401(a), Governmental plans, individually designed plan, PEPRA, Plan Qualification, Pre-Approved | Tagged , | Comments Off on California Public Agency 401(a) Sponsors Should Amend Their Plans for PEPRA and May Want to Submit for a New IRS Determination Letter

Authorized Plan Representatives for Your Governmental 457(b) or 401(a) Plan

By Jeff Chang

Whenever you engage a new recordkeeper for your governmental 457(b) or 401(a) plan, the plan sponsor will be asked to complete, sign and return an authorized plan representatives form (APRF). The APRF designates the so-called “contact persons” and the plan sponsor from whom the recordkeeper may receive directions and instructions. Most human resource directors fill-in the names, titles and emails of two to four members of their human resources staff and return the form to the recordkeeper without much thought. Completing the form in this manner may not be a good idea for a number of reasons:

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Improving Administrative Service Agreements For Public Agency Retirement Plans

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.

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