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Local Gov't DB Merger into State Retirement System


lkpittman
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We have a local gov't client that joined PERS and discontinued their existing DB plan. Benefits in the DB were transferred to the State system. Some participants (retired, terminated) were already in pay status and annuities were not purchased for them in connection with the merger. Now,their benefits are in the State system and they are no longer receiving their benefits. Client now wants to go back and "preserve" those benefits and continue payment to those particiapnts. How should this have been handled in the first place? How should this "merger" have been documented? How can we now correct?

LKP

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You need to go to the person/attorney who negotiated the merger of the local govt plan with pers and ask who has the obligation to pay benefits to retirees who terminated before the merger with Pers under the merger agreement. This issue should have been negotiated by the parties. There is a contractual obligation of the local govt to pay benefits to retirees which is separate from the legal obligation of Pers to pay retirement benefits for persons who retire after the merger with the Pers system. If Pers did not assume the liability to pay benefits for current retirees under the merger agreement then the Local Govt has to continue the payments or purchase annuities for the retirees.

mjb

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