Required Minimum Distributions (RMDs) – The Out of Sight, Out of Mind Problem

By: Jeff Chang

We all sometimes lose track of things hidden away in the back of the closet or fail to stay in touch with friends we haven’t heard from or seen in a while. These common tendencies can cause inconvenience in our everyday lives — but may lead to catastrophic failures when it’s our pension requirements that are out of sight, out of mind. Susceptible to this phenomenon are many tax-qualified pension plans, particularly in the public sector, that must comply with the required minimum distribution, or RMD, rules. These are the tax rules that, among other things, generally require participants to commence or receive their benefits by no later than the April 1st following their attainment of age 70½, if they are no longer working. Continue reading

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Watch Out For What Your Plans Say – Or Don’t Say – About Transfers

By: Jeff Chang

Most of the special districts and municipalities we represent have numerous collective bargaining units, and many have multiple service locations and facilities. While advising these entities on their retirement and welfare benefits, we’ve come to realize that their retirement plans often do not address a lot of day-to-day operational issues, including the treatment of intra-agency ‘transfers’. Continue reading

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Retiree Health Reimbursement Arrangements are Receiving More Attention

By: Jeff Chang

Previously, we wrote about the uses of health reimbursement arrangements and the IRS rules that apply to them. As we explained, an HRA is basically an employer-funded account that may be used for paying specified medical and health costs (including health insurance premiums). Due to the enactment of the Affordable Care Act and its treatment of HRAs under the group health plan rules, HRAs covering active employees are now much harder to establish and maintain. These ACA rules, however, do not apply to retiree-only HRAs. Retiree-only HRAs can provide significant tax-free health benefits and, if structured properly, can help public employers address budgetary and compliance problems under Fair Labor Standards Act and Public Employees’ Medical & Hospital Care Act. As a result, many agencies are revisiting the utility of these arrangements as part of their collective bargaining and budgeting processes. Continue reading

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Using a Section 115 Trust to Help Manage Pension Obligations

By Jeff Chang

An increasing number of cities, public agencies and special districts are investigating the use of an Internal Revenue Code section 115 trust to help them better manage the short-term costs and long-term liabilities associated with pensions. What is a 115 trust and how does it work?

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New Home, Same Great Information

By Jeff Chang

As some of you may have heard, Susan Neethling and I recently joined the law firm Best Best & Krieger LLP. Like many changes of this sort, this one was bittersweet. We are pleased, though, to continue bringing you the latest public benefits information news. We have joined a unique powerhouse in the highly specialized area of public sector benefits. The attorneys in BB&K’s Employee Benefits & Executive Compensation practice group serve more than 200 California cities and public agencies. As a team, we hope to provide more information to the municipalities, special districts, school districts and other public sector clients who rely on us for effective counsel.

Jeff Chang is a partner at Best Best & Krieger LLP. He has four decades of experience skillfully evaluating benefit and retirement plan compliance to achieve maximum outcomes for public agency clients throughout California. He can be reached at jeff.chang@bbklaw.com or (916) 329-3685.

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