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Is my employer exempt from ERISA?


Guest John Mc Tigue
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Guest John Mc Tigue

My employer is a Public Transit Authority in the State of Washington. It claims to be exempt from the provisions of ERISA which specifically gives it the right to exclude certain individuals from participation in its retirement plan. Our current retirement plan is a 401(a) with mandatory employee and employer contributions. The state of Washington has a public employeees retirement system which my employer chooses not to participate in. Our retirement plan is collectivly bargained every three years.

I understand that ERISA exempts govermental agencies who have a govermental retirement plan from the provisions of ERISA. However,

I question if my employer is actually participating in a govermental retirement plan when it elected not to participate in the state public employees retirement system.

So my question is: Is my employer exempt from ERISA, and can it exclude from participation in the retirement plan employees that ERISA says must be allowed participation?

This is important to about thirty of us. Thanks for your help.

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Guest CVCalhoun

Hello, John!

The statutory rule is that any plan which covers employees of a governmental employer is a governmental plan--whether or not the employer chooses to participate in a statewide system. There is even a fair amount of authority for treating transit system employees as employed by a governmental employer, even if they are employed by a contractor which runs the transit system on behalf of the state. And if a plan covers primarily governmental employees but includes some nongovernmental employees, there is at least some authority to the effect that it can still be treated as a governmental plan (and therefore exempt from ERISA).

Obviously, if there is any question about whether your specific employer is governmental, or about whether the plan includes enough nongovernmental employees to be subject to ERISA, a lot will depend on the specific facts. And because I see that you are not a lawyer yourself, I should caution you that anything I say here can only provide the most general of observations, not specific legal advice. Moreover, if it makes any difference to you, I used to represent the statewide plan in your state, although I no longer do. (Sorry, I'm a lawyer, and we are really fond of disclaimers! :) )

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  • 1 month later...
Guest Ralph Amadio

John, I can only echo Carol's comments, except to emphasize that governmental plans are primarily subject to State law, and further if your transit authority happens to involve railways, it may be further subject to the Railway form of a governmental plan.

Neither of these programs are subject to ERISA. I certainly am not an expert in Washingto law, nor am I even a lawyer, but I would point out that the remedies under State , contract and common law go directly into State courts, which may be even more equity oriented than ERISA, and further do not exempt employers in some of the ways ERISA exempts them. Also check your collective bargaining law, and the laws in your state dealing with impairment of contracts. Possibly the changes you seek may be available through collective bargaining. Like Carol, I am fond of caveats when I don't know specifics. Good Luck!

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Guest CVCalhoun

Don't have anything to add to Ralph's comments, but just wanted to say welcome to the board--I notice you responded to a number of messages over the weekend.

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