Governmental Plans Answer Book

by Calhoun, Carol V.; Moore, Cynthia L.

• ISBN13: 9780735525726
• ISBN10: 0735525722
• Format: Hardcover
• Copyright: 2002-01-01
• Publisher: Wolters Kluwer

Summary

Written by a team of practicing experts, preeminent in their fields, this book takes the reader step-by-step through the various laws that govern such plans. For those practitioners with private plan experience who wish to work with governmental plans, it compares the regulation of the two types of plans. The authors' systematically answer hundreds of questions and provide an invaluable reference for investment advisors, plan administrators, attorneys, actuaries, and accountants. This book will also serve those institutions that promote, market, service, or provide technical support to retirement plans, products, and related services. the latest update includes: Update on Internal Revenue Code after-death distribution rules Types of distributions that may be problematic under code Section 401(a)(9): COLAs and annuity payments to nonspousal beneficiaries, among others Types of relief for benefits not in compliance with the minimum distribution rules Types of relief for benefits not in compliance with the minimum distribution rules Requirements for deemed IRA (Section 408(q) status) When a labor union plan may be treated as an eligible government plan Outline of state laws governing commonlaw marriages Discussion of same-sex marriages and domestic partnerships Tax treatment of an eligible plan's PADRO distribution

Table of Contents

Introduction to Governmental Plans	1	(1)
What Is a Governmental Plan?	2	(8)
Statutory Definitions	2	(2)
Plans of Native American Tribes	4	(1)
Plans of Quasi-Governmental Entities	5	(3)
Other Special Situations	8	(2)
Importance of Differences Between Governmental Plans and Private Plans	10
Legal Issues-In General	10	(1)
ERISA Exemptions	11	(1)
Qualification Rule Differences	12	(26)
Section 403(b) Rule Differences	38	(2)
Other Legal Differences	40
Structure of State and Local Governmental Plans	1	(1)
General Information About State and Local Governmental Plans	2	(1)
Creating Entity, Governing Law, and Individuals Covered	2	(2)
Entity That Administers the Plans	4	(6)
Assets in State and Local Governmental Retirement Plans	10	(1)
Contributions	11	(2)
Comparison of Defined Benefit Plans and Defined Contribution Plans	13	(6)
Portability of Benefits Under Defined Benefit Plans	19	(3)
Benefits Provided by Retirement Systems and Plans	22	(5)
Protections for the Plans and Their Participants	27	(1)
Employer Pickups	28	(1)
Joint and Survivor Annuities	29	(1)
State Vesting Rules	29
Identifying the Employer	1	(1)
Reasons for Identifying the Employer	2	(2)
Definitions of Employer	4	(1)
Controlled Group Rules	5	(6)
Independent Contractors	11	(4)
Leased Employees	15
Obtaining Favorable Tax Status	1	(1)
Effect of Favorable Tax Status	2	(11)
Types of Favorable Tax Status	13	(3)
Requirements for Qualified Plan (Section 401 (a)) Status	16	(32)
In General	16	(2)
Trust Requirement	18	(1)
Created or Organized in the United States Requirement	19	(1)
Exclusive Benefit Rule	20	(1)
Permanence Requirement	20	(1)
Contributions by the Employer, the Employees, or Both	21	(1)
Pension Plan	21	(7)
Profit Sharing Plan	28	(2)
Vesting	30	(4)
Minimum Required Distributions	34	(1)
Limitations on Compensation Considered, Contributions, and Benefits	35	(2)
Exclusive Benefit Rule and Prohibited Transactions	37	(3)
Retiree Medical Benefits	40	(1)
Other Qualification Rules	41	(1)
IRS Determination Letters	42	(4)
Requirements for Qualified Plan (Section 403(a)) Status	46	(2)
Requirements for Tax-Deferred Annuity or Custodial Account (Section 403(b)) Status	48	(7)
Requirements for Section 457(b) Status	55	(2)
Requirements for Excess Benefit Plan (Section 415(m)) Status	57	(1)
Pretax Employee Contributions	58	(1)
IRS Audit Activity	58	(1)
Correction Procedures	59
Reporting	1	(1)
Purpose of Reporting by State and Local Governmental Plans	2	(1)
Annual Statement of Member's Account	2	(2)
Other Ways in Which Retirement Systems Communicate with Plan Participants	4	(1)
Summary Plan Description	4	(2)
Annual Reports	6	(6)
Open Meetings Laws	12	(1)
Open Records Laws	12
Governmental Plan Funding	1	(1)
Federal Rules	2	(17)
In General	2	(1)
Qualified (401 (a)) Defined Benefit Plans	2	(10)
Qualified (401 (a)) Defined Contribution Plans	12	(2)
Qualified (401 (a)) Combination Defined Benefit and Defined Contribution Plans	14	(1)
Qualified (403(a)) Fully Insured Plans	15	(1)
403(b) Arrangements	15	(1)
457(b) Plans	16	(2)
Excess Benefit (415(m)) Plans	18	(1)
Typical State Rules	19
Qualified (401 (a)) Defined Benefit Plans	19	(8)
Qualified (401 (a)) Defined Contribution Plans	27	(1)
Qualified (403(a)) Fully Insured Plans and 403(b) Annuity Arrangements	28	(1)
403(b)(7) Custodial Accounts	28	(1)
457(b) Plans	29	(1)
Excess Benefit (415(m)) Plans	29
Investment of Plan Assets	1	(1)
Federal Fiduciary Requirements	3	(4)
In General	3	(1)
401 (a) (Qualified) Plans	4	(2)
403(b) Plans	6	(1)
457(b) Plans	6	(1)
415(m) (Excess Benefit) Plans	6	(1)
State Fiduciary Requirements	7	(14)
In General	7	(1)
Constitutional Requirements	8	(3)
State Statutes Creating Statewide Plans or Providing for the Creation of Local Plans	11	(1)
General State Fiduciary Statutes	12	(4)
Common-Law Fiduciary Requirements	16	(5)
Federal Prohibited Transaction Rules	21	(5)
401 (a) (Qualified) Plans	21	(5)
403(b) Plans	26	(1)
457(b) Plans	26	(1)
415(m) (Excess Benefit) Plans	26	(1)
State Prohibited Transaction Rules	26	(1)
Uniform Management of Public Employee Retirement Systems Act and Uniform Prudent Investor Act	27	(8)
Legal List Statutes	35	(1)
Social Investing	36	(8)
State Conflict of Interest Statutes and State Codes of Ethics	44	(1)
Wholly Owned Investments and Investments in Non-Publicly Traded Equity Securities	45	(10)
Unrelated Business Income Tax Issues	55
Selecting a Service Provider	1	(1)
State Law Issues	2	(2)
ERISA Analogies	4	(1)
Practical Steps for Meeting Fiduciary Duties in Choosing a Service Provider	5	(3)
Breaches of Fiduciary Duty in Selecting a Service Provider	8	(3)
Modification of Procedures for Selecting a Service Provider	11	(1)
Fiduciary Duties After a Service Provider Is Selected	12	(1)
Summary	13
Remedies for Fiduciary Breach	1	(1)
Criminal Penalties	2	(1)
Civil Remedies	3	(3)
In General	3	(1)
Common-Law Rules	4	(1)
Statutory Rules	5	(1)
Avoiding Fiduciary Liability	6
In General	6	(3)
Sovereign Immunity	9	(1)
Statutory Defenses	10	(1)
Insurance	11
Participation	1	(1)
Federal Participation Rules	1	(8)
In General	1	(1)
Universal Availability Rule for 403(b) Plans	2	(2)
Social Security and Medicare Tax Exclusions	4	(5)
State Participation Rules	9
In General	9	(1)
Louisiana State Employees' Retirement System	9	(2)
Teachers' Retirement System of Montana	11	(1)
South Carolina Retirement System-Police Officers' Plan	12
Distributions	1	(1)
Common Forms of Distribution	2	(1)
Federal Restrictions on Distributions	2	(10)
Early Distributions	2	(7)
Minimum Distributions	9	(3)
Definition of Retirement	12	(3)
Phased Retirement	12	(1)
Change of Employer	13	(1)
Reemployment	14	(1)
Taxation of Distributions	15	(5)
Retirement Benefits	15	(1)
Nonretirement Benefits	15	(5)
Rollovers and Plan-to-Plan Transfers	20	(1)
Withholding on Distributions	21	(3)
Reporting of Distributions	24
Beneficiary Designations	1	(1)
Making a Beneficiary Designation	2	(3)
Using Trusts	5	(1)
Family Rights That Restrain a Beneficiary Designation	6	(1)
Charitable Gifts	7	(1)
Common-Law Marriage	8	(11)
Community Property	19	(2)
Prenuptial Agreements	21	(2)
Postnuptial Agreements	23	(1)
Tenancy by the Entirety	24	(2)
Disclaimers	26	(3)
Medicaid and Other Government Claims	29	(2)
Unclaimed Property	31	(1)
Tax-Oriented Estate Planning	32	(7)
Who Can Give Advice?	39
Domestic Relations Orders	1	(1)
Reason for Retirement Plan Domestic Relations Order Provisions	3	(4)
Elements of a Domestic Relations Order	7	(1)
Elements of a Plan-Approved Domestic Relations Order	8	(5)
PADRO Distribution Before a Participant's Severance	13	(3)
Survivor Benefits, Beneficiaries, and Loans	16	(3)
State Variations	19	(4)
Deciding Whether an Order Is a PADRO	23	(2)
Plan Administration Procedures	25	(5)
Tax Treatment of a Distribution Under a Deemed QDRO	30	(7)
Tax Treatment of a Pre-2002 PADRO Distribution from a 457(b) Plan	37	(5)
Bankruptcy	42	(1)
Divorce Negotiation	43	(1)
Lawyer's Professional Conduct	44
Impact of Bankruptcy Law on Participant Interests in Governmental Plans	1	(1)
Bankruptcy Overview	2	(4)
Governmental Plan Concerns	6	(3)
Chapter 7 Considerations	9	(14)
General	9	(1)
Excluding a Participant's Interest from the Bankruptcy Estate	10	(5)
Exempting a Participant's Interest	15	(2)
Turnover of a Participant's Interest	17	(3)
Effect on Plan Loans	20	(2)
Role of Governmental Plan	22	(1)
Chapter 13 Considerations	23	(10)
General	23	(2)
Participant's Interest as Disposable Income	25	(2)
Impact on Participant Contributions	27	(3)
Impact on Plan Loans	30	(2)
Role of Governmental Plan	32	(1)
Pending Legislation to Amend the Bankruptcy Code	33
Appendix A-Background Information on State and Local Governmental Plans	1	(1)
Appendix B-Uniform Management of Public Employee Retirement Systems Act (1997)	1	(1)
Appendix C-Uniform Prudent Investor Act	1	(1)
Index	1