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...

Can Your Hospital District Have a 403(b) Plan?

Can Your Hospital District Have a 403(b) Plan?

Of California’s more than 75 public healthcare districts, a significant number of them maintain Internal Revenue Code (IRC) section 403(b) plans. The question is: of those that have them, are they “eligible” to have them? We raise this issue because we have become...

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...

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....

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...

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

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

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 individual...

Ways to Correct Governmental Plan Problems

Ways to Correct Governmental Plan Problems

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 main subgroups:...

Do Not Apply AB 5 Too Broadly

Do Not Apply AB 5 Too Broadly

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 California wage...

The Improper Use of Governmental “Pre-Approved” Plans

The Improper Use of Governmental “Pre-Approved” Plans

There continues to be new, complicated problems arising from the improper completion and use of off-the-shelf governmental pre-approval plans. Generally, a pre-approved plan from the document provider is reviewed and pre-approved by the IRS for its general use and...

Why You Need to “Monitor” Full-time, Temporary Employees

Why You Need to “Monitor” Full-time, Temporary Employees

Due to budget restrictions and general hiring freezes, many California public agencies are forced to fill workforce gaps with temporary employees from staffing agencies. This practice, while quite common, is not well-understood — particularly when it comes to...