On August 25, 2023 the Internal Revenue Service issued Notice 2023-62, which provides a critical 2-year delay in the enforcement of new retirement plan Catch-up Contributions rules passed under the Secure 2.0 Act of 2022....more
9/14/2023
/ 401k ,
403(b) Plans ,
Employee Benefits ,
Employee Contributions ,
Employer Contributions ,
FICA Taxes ,
Individual Retirement Account (IRA) ,
IRS ,
Retirement ,
Retirement Plan ,
SECURE Act
Ensuring Eligibility is Key -
Of California’s more than 75 public health care districts, a significant number of them maintain Internal Revenue Code (IRC) section 403(b) plans. The question is: of those that have them, are...more
Over the past several months, we have seen a number of public agency clients struggle through the process of evaluating and selecting a retirement plan adviser based only on generic questionnaires, a few phone calls, and an...more
9/28/2020
/ 401k ,
457(b) Plans ,
Benefit Plan Sponsors ,
Employee Benefits ,
Employee Retirement Income Security Act (ERISA) ,
Fiduciary ,
Financial Adviser ,
Investment Adviser ,
Public Agencies ,
Public Employees ,
Retirement Plan ,
Retirement Plan Providers
A recently issued IRS private letter ruling may provide public agencies and their employees with another way to give employees more control over the types of retirement benefits they will eventually receive....more
Not surprisingly, many cities and special districts no longer have monies available in their budgets to spend on things such as legal fees to analyze and correct plan administration problems and compliance issues. When it is...more
8/12/2020
/ 457(b) Plans ,
Benefit Plan Sponsors ,
Compliance ,
Employee Benefits ,
Fiduciary Duty ,
Plan Administrators ,
Public Agencies ,
Recordkeeping Requirements ,
Reimbursements ,
Retirement Plan ,
State Constitutions
When it comes to retirement plan servicing arrangements for most public agencies, there are basically two flavors: bundled and unbundled. It is important for public plan sponsors and plan fiduciaries to understand the...more
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...more
Given the current circumstances, many public agencies are finding ways to use health reimbursement arrangements as creative and cost-effective benefits for their employees and former employees. As explained in earlier posts,...more
Based on numerous requests for plan documents from public agency clients, we know that many cannot find complete sets of their historical and current retirement plan documents that are properly authorized, signed and dated....more
Public agency employers trying to recruit or retain highly skilled or highly paid younger workers (e.g., doctors, nurses, IT specialists, engineers) may want to take advantage of a limited employer-paid benefit under the...more
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...more
As many California public agencies are forced to furlough employees during the COVID-19 pandemic, questions arise as to how furloughs are treated for retirement plan distribution rules’ purposes....more
Although many employers plan to make changes to their retirement plans to take advantage of employee-friendly CARES Act provisions, public agencies should not blindly adopt recommended changes without thinking about the steps...more
Public Employers Can Amend Plans to Allow Coronavirus-Related Distributions -
One provision of the recently signed $2.2 trillion federal economic rescue package allows public employers to grant employees access to their...more
As expected, the recently enacted Coronavirus Aid, Relief, and Economic Security Act contains provisions providing affected workers with greater, more tax-favored, access to portions of their retirement savings. Although it...more
During the Coronavirus emergency, it may make sense for state and local governments that sponsor 457(b) plans to allow their employees to access the monies in their accounts as unforeseeable emergency distributions. Not all...more
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....more
Several municipal clients adopted retiree health savings plans or post-employment health plans, and continue to have questions about what they are and how they should be administered....more
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...more
2/5/2020
/ 401k ,
457(b) Plans ,
Compensation & Benefits ,
Contribution Limits ,
Deferred Compensation ,
Defined Contribution Plans ,
Employee Benefits ,
Employee Contributions ,
Employer Contributions ,
Paid Time Off (PTO) ,
Public Employees ,
Retirement Plan ,
Tax Planning
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....more
1/14/2020
/ Benefit Plan Sponsors ,
Compensation & Benefits ,
Employee Benefits ,
Fees ,
Fiduciary Duty ,
Government Agencies ,
Investment ,
Investment Adviser ,
Investment Management ,
Retirement Plan ,
Service Agreements
Many cities and special districts in California maintain one or more defined contribution retirement plans (i.e., a 457(b) or 401(a) plan) in which the participants are given investment responsibility over their respective...more
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,...more
12/6/2019
/ 401k ,
403(b) Plans ,
457(b) Plans ,
Annuities ,
Deferred Compensation ,
Employee Benefits ,
EPCRS ,
Internal Revenue Code (IRC) ,
IRS ,
Plan Administrators ,
Public Employees ,
Retirement Plan ,
State-Sponsored Retirement Plans ,
Tax Favored Programs ,
Tax Planning
With overall required contribution rates increasing at an alarming rate, most CalPERS employers – particularly those with significant “classic” safety populations – are looking for help to pay for these obligations....more
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...more
10/22/2019
/ ABC Test ,
Common Law Test ,
Dynamex ,
Employee Benefits ,
Employee Definition ,
Employer Liability Issues ,
Freelance Workers ,
Gig Economy ,
Government Entities ,
Hiring & Firing ,
Income Taxes ,
Independent Contractors ,
Labor Regulations ,
Misclassification ,
Payroll Taxes ,
State and Local Government ,
State Labor Laws ,
Wage and Hour
With very few exceptions, the rules governing governmental 457(b) plans require a “severance of employment” to occur before a distribution can be made. Recently, we came across yet another of those arcane, little-known rules...more
10/9/2019
/ 457(b) Plans ,
CalPERS ,
Distribution Rules ,
Employee Benefits ,
Hiring & Firing ,
Labor Regulations ,
Public Agencies ,
Public Benefits ,
Retirement Plan ,
Severance Agreements ,
Termination