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The “Mechanics” of Combining Your Agency’s Multiple 457(b) Plans
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...
Why Hire A “3(38)” Adviser For A Public Agency 457(b) Or 401(a) Plan?
Most public sector retirement plan sponsors understand that even though their plans may not be subject to the fiduciary duties and responsibilities of ERISA, they are still subject to fiduciary duties under applicable State law. Moreover, certain States like...
Does Your Plan Have A Proper Fiduciary Structure?
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 advisers...
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The Proper Timing of 457(b) Deferral Elections
Although many people think that governmental section 457(b) plans and private sector 401(k) plans are the same – because they both allow pre-tax deferrals of similar amounts of income – they are not the same. Due to their differing origins, their rules and...
Differences Between Plan Administrators, Third-Party Plan Administrators, and Recordkeepers
Sponsors of governmental retirement plans seem to be hiring, firing, or transitioning to new third-party administrators (TPAs) or recordkeepers all the time. The differing roles, duties and legal responsibilities of plan administrators, TPAs, and recordkeepers need to...
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...
When is a Public Employee a “Qualified Participant” in a Social Security Replacement Plan?
As previously discussed, a public agency that does not have a section 218 agreement has a choice of participating in Social Security or providing a Social Security Replacement Plan (SSRP). Although many California local governments rely on CalPERS as their principal...
Do You Have An Appropriate OPEB Document?
Due to the rising costs of health care and health insurance, pressure from union bargaining partners, and the application of the “equal contribution rule” for public agencies that provide health coverage through CalPERS, many California cities and special districts...
School District 403(b) Plans and Participant-Directed Investments
This post addresses the availability of participant-directed investments in practically all California public school district 403(b)s and why the special rules mentioned in California Government Code section 53213.5 must apply if the 403(b) plan is employer-sponsored....
School District 403(b) Plans and Recordkeeper Selection
Continuing our commentary on California public school and charter school 403(b)s, we shift focus from the ability of a 403(b) employer to limit investment selection to a discussion of the California law on the selection by public school districts and charter schools...
School District 403(b) Plans and Investment Selection
When it comes to 403(b) plans of California school districts or charter schools, there is confusion about the ability of the sponsoring district or charter school to limit the participant’s ability to select a particular insurance provider for their tax-sheltered...
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...
What Happens to Participants’ 457(b) Deferral Elections When they Pass Away?
Just the other day, a public agency client contacted us to find out what to do with a participant’s 457(b) plan deferral election following the participant’s untimely death due to COVID. As with most cases, cities and special districts would owe the former employee...
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...
Understanding the Difference Between Contributions and Allocations In Public Agency Plans
Most public agency defined contribution plan sponsors can easily recall the current amount being contributed to participants in their plan; however, not all can tell you “how” the contribution is being allocated amongst the participants. The distinction between a...