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Confiscation of ORP contributions to defined benefit plan


Guest Billt
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Guest Billt

Can the state legislature take money that a university contributes for optional retirement plan participants to help fund those in the defined benefit plan? This is occurring because the defined benefit plan now has expected unfunded future liabilities. I thought that the fiduciary duty would be to all employees and this would be a violation of IRS code 401(a)(2), exclusive benefit rule and 401(a)(4), requirement that plan benefits not discriminate in favor of certain employees.

If so, would I take the case to the attorney general or could I start a class action suit as well?

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The actions you describe may violate the spirit of those (or other) cites, if not the letter. However, in general, governmental plans are not subject to those rules.

IMHO, your first action is to complain to the governor, then to your state legislative representatives. (But, they may be in cahoots.) Perhaps there is a kind newspaper editor who will provide some publicity for your cause.

I'm a retirement actuary. Nothing about my comments is intended or should be construed as investment, tax, legal or accounting advice. Occasionally, but not all the time, it might be reasonable to interpret my comments as actuarial or consulting advice.

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