Indian Tribal Government Retirement Plans

Indian Tribal Government Retirement Plans

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...

Governmental Plans and Required Beginning Dates

Governmental Plans and Required Beginning Dates

Like their private sector counterparts, governmental retirement plans (e.g., defined benefit, 401(a), 457(b), and 403(b)) are all subject to the general retirement plan rules pertaining to “required minimum distributions.” The good news is that several recent law...

SECURE 2.0 Impacts on Governmental Plans

SECURE 2.0 Impacts on Governmental Plans

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”...

More on the Documentation of Employer “Pick-up” Contributions

More on the Documentation of Employer “Pick-up” Contributions

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...

When “Public” Does Not Refer to “Governmental”

When “Public” Does Not Refer to “Governmental”

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...

Multiple Plans May Result in Excessive Participant Loans

Multiple Plans May Result in Excessive Participant Loans

Having more 457(b) or 401(a) plans than you really need can create administrative headaches, cost participants unnecessary fees, and sometimes result in “excessive” participant loan situations. If an employee participates in a 457(b) or 401(a) plan, it is likely that...

Many Governmental 401(a) Plans Must Be Restated By July 31, 2022

Many Governmental 401(a) Plans Must Be Restated By July 31, 2022

In addition to the thousands of private sector 401(k) and 401(a) plans that must be restated by this July 31st, practically all governmental 401(a) plans using recordkeeper-provided plan documents – in other words, pre-approved plan documents – must also be restated....

Are Your Employer “Pick-Ups” Properly Documented?

Are Your Employer “Pick-Ups” Properly Documented?

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...

What Is a Section 415(m) Plan, and When Might You Need One?

What Is a Section 415(m) Plan, and When Might You Need One?

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...

Why a Public Agency Might Want to Add a 401(a) Plan

Why a Public Agency Might Want to Add a 401(a) Plan

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...

Is Your 457(b) or 401(a) Plan Fee Allocation Fair and Reasonable?

Is Your 457(b) or 401(a) Plan Fee Allocation Fair and Reasonable?

By Jeff Chang Investment fiduciaries and plan administrators of California public sector 457(b) and 401(a) plans are required by law to act as “prudent experts” for the sole and exclusive purpose of providing benefits and defraying “reasonable expenses” of...

Is Your Social Security Replacement Plan Up to Snuff?

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...

COVID-19 Pandemic May Force Some Cities to Reset Employee Benefits

COVID-19 Pandemic May Force Some Cities to Reset Employee Benefits

By Jeff Chang As the harsh realities of the coronavirus pandemic, along with its widespread impact on all aspects of daily life, continue to shock and numb us all, many cities have already been identified as “high risk” from a financial stability perspective by the...

One-time Irrevocable Elections and 401(a) Opt-in Plans

One-time Irrevocable Elections and 401(a) Opt-in Plans

By Jeff Chang There appears to be some confusion among California municipalities about 401(a) opt-in plans use and an employee’s ability to make a one-time irrevocable election to make pre-tax contributions. Because these plans are designed to give participants...

Taking Advantage of Governmental Retirement Plan Contribution Limits

Taking Advantage of Governmental Retirement Plan Contribution Limits

By Jeff Chang Many governmental 457(b) deferred compensation and 401(a) defined contribution plan sponsors do not take full advantage of the contribution limits for these plans. To do this, you need to understand: the limits, who they apply to, how they coordinate and...

Understanding the Fees Paid by Your Governmental Retirement Plan

Understanding the Fees Paid by Your Governmental Retirement Plan

By Jeff Chang There are several fundamental principles and concepts that governmental plan sponsors and fiduciaries need to bear in mind as they select and monitor their plan providers and the fees that these providers charge. Practically all governmental plan...

Ways to Correct Governmental Plan Problems

Ways to Correct Governmental Plan Problems

By Jeff Chang There are several tools that can be used to correct or fix governmental plan problems. First, some classification. Practically all the retirement plans we discuss are “tax-advantaged” in one form or another. However, within this group, there are three...

Do Not Apply AB 5 Too Broadly

Do Not Apply AB 5 Too Broadly

By Jeff Chang Perhaps the biggest news coming out of California’s Legislature this year was the passage of Assembly Bill 5 – the new law that codifies the 2018 Dynamex case and which imposes a new test for determining employee or independent contractor status for...

“Encouraging” the Repayment of Student Loan Debt

“Encouraging” the Repayment of Student Loan Debt

By Jeff Chang Many of the public agencies we work with have expressed a strong interest in programs and arrangements that will help or encourage their employees to pay off their student loan debts. These programs can be important recruiting, retention and collective...

Does Your Plan Have A Proper Fiduciary Structure?

Does Your Plan Have A Proper Fiduciary Structure?

By Jeff Chang Recently, we have dealt with an "epidemic" of retirement plans, both very large and very small, that all have the same problem – the lack of a proper fiduciary structure.  Why? As with so many personnel and benefits-related programs, new managers and new...