Pooling of sick leave credit for use by other plan participants

[EGB]

very strange question: Facts: Employer participates in state retirement system db plan. Under the plan, sick leave credits may be used to purchase additional service credit. There are a number of participants who have accumulated sick leave credits, but cannot use them to purchase additional service credit under the plan because they have already accrued a maximum service level under the plan. Thus, such participants want to "pool" their accrued sick leave credits and allocate the credits among all participants who can benefit from such credit (ie, to those who have not maxed out the service credit allowable under the plan)and the employer wants to allow the participants to do this. They have not yet decided how they would allocate the credit, but let's assume it is allocated in a non-discriminatory manner. Can this be done? The state statute that governs the plan does not, on its face, contain any prohibition on doing this. A few thoughts: first, I assume this would/could affect funding obligations under the plan; second, we would want to get the approval of the state retirement system. Would this be a violation of the anti-alienation provisions of ERISA or any other ERISA rules/regulations? I doubt there is any absolute answer to this question. I would appreciate any thoughts on the issue.

[david rigby]

I have no idea, but as a taxpayer, I would strongly object to this giveaway, with no return to the employer/taxbase.

[Larry M]

You should post your question in the "Government Plans" section of the message boards.

But, as long as the question is here, here are my comments:

a.I'm with pax as far as my "d'ruthers'.

b.I believe the state plan is exempt from ERISA requirements (as most are); some, though, do refer to ERISA for certain items - such as funding.

c. As for the special benefit, you never can tell what a state retirement plan will allow, especially if the particpants can convince the voters to agree to it.