By Jeff Chang Municipal and special district employers, particularly their elected council and board members, continue to express concerns over the size of their agencies’ CalPERS “liabilities” and what can be done to mitigate them. Although there are several...
By Jeff Chang To prepare for and manage significantly increased CalPERS employer contribution rates in the coming years, California public agencies approved the establishment and funding of so-called "pension rate stabilization trusts." Clients have asked for...
By Jeff Chang Almost 4 years ago, we discussed an IRS private letter ruling that raised serious concerns about public agency money purchase pension plans. The ruling allowed employees to "opt-in" to, or elect, their own rate of employee contribution. It was expected...
By Jeff Chang Many California cities and public agencies negotiate with — and reach memorandums of understanding with — their union bargaining partners on a regular basis. In some cases, these unions are local police or firefighter unions. In other cases, the...
By Jeff Chang The more you read about what has been going on in the private sector (in the U.S.) and in the public sector (in Europe) with respect to pension plan investing, the more you come across the concept of “liability-driven investment strategy.” Although there...
By: Jeff Chang There are two ways in which state and local government employees can receive a “rude awakening” from the Social Security Administration: Through the application of the Windfall Elimination Provision and/or the Government Pension Offset. Because the loss...
By Jeff Chang Substantial confusion exists about whether the assets of an Internal Revenue Code section 115 trust created to fund pension or OPEB (retiree health) obligations may be used to offset the overall pension or OPEB liabilities that public employers are...
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...
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?
By: Jeff Chang Our efforts to educate employers about the dangers and surprises associated with PTO cash‑outs (see, Chapter 13 and "When Having Your Cake and Eating It May Be a Bad Thing: Cautions About Cash-Outs of Unused Leave Or PTO") are having an effect....
By: Jeff Chang A recently issued IRS private letter ruling (PLR) puts the kibosh on the fairly common practice of allowing public agency employees to elect whether and at what level to participate in the agency's mandatory contribution pension plan. This plan design...
By: Jeff Chang The IRS has just announced major changes to its program for reviewing and approving the qualified status of certain retirement plan documents (see, Announcement 2015-19). Essentially, the Service is doing away with its program for issuing determination...
By: Jeff Chang Here’s an interesting difference between public and private industry plans that we were reminded of recently and that we’d like to share with our governmental clients and their advisors because it can be so problematic. In most private industry plans,...
By: Jeff Chang On February 4, 2015, the Judge overseeing the City of Stockton bankruptcy issued an opinion, overruling Franklin Templeton's lone objections to the City's plan of reorganization and, very pointedly, clarifying the true role of CalPERS – at least in a...
By: Jeff Chang On June 26, 2013, in United States v. Windsor (Windsor), the Supreme Court decided that section 3 of the Defense Of Marriage Act (DOMA) was unconstitutional. DOMA had limited "marriage" to opposite-gender couples for purposes of federal law. As result...
By: Jeff Chang A recent matter that came to our firm involving interpretation of the California Public Employees' Pension Reform Act of 2013 (PEPRA) brought to light yet another painfully confusing question. What exactly is a "new member?" During a recent phone call...
By: Jeff Chang Although governmental plans are not subject to ERISA, all are subject to a combination of State and common law fiduciary rules – many of which (including California's) contain language identical to the standards of ERISA. Most fiduciaries of public...
By: Jeff Chang Last fall, the IRS announced that it would begin the process of issuing regulations to clarify what is a "governmental plan" under Internal Revenue Code section 414(d) and asked interested parties to comment on the general approach it was taking...
By: Jeff Chang Since the Stanford Institute For Economic Policy Research (SIEPR) issued its latest report on California's public pension spending, a fair amount has been written by those who are seriously concerned about the potentially enormous size of the unfunded...