The Proper Timing of 457(b) Deferral Elections

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...

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?

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 administering the plan....

Is Your Social Security Replacement Plan Up to Snuff?

Is Your Social Security Replacement Plan Up to Snuff?

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...

Problems with Co-Provider 457(b) Plan Arrangements

Problems with Co-Provider 457(b) Plan Arrangements

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....

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

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

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 California State...

Taking Advantage of Governmental Retirement Plan Contribution Limits

Taking Advantage of Governmental Retirement Plan Contribution Limits

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 your ability...

Understanding the Fees Paid by Your Governmental Retirement Plan

Understanding the Fees Paid by Your Governmental Retirement Plan

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 providers use assets...

Does Your Plan Have A Proper Fiduciary Structure?

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...

Chapter 23: Have You Checked Your Retirement Plan Fees Lately?

Chapter 23: Have You Checked Your Retirement Plan Fees Lately?

Many public agencies' 457(b) plans, where all fees are paid by the plans, may be neglected for years or even decades.  And while this neglect may not cost the district or the city any more money, it is definitely costing plan participants. Recently, we advised a...