Municipal Plan "Spinoff"

[LIBOR]

What I have is a municipal plan - no minimum funding requirement - and one plan document that describes a different benefit provision for each of 3 groups of municipal employees (firemen,police, & office staff) - the town now wants to create 3 separate plans - for funding purposes, would this have to be treated as a spin-off with the current single asset pool split to each of the groups ? or being a municipal plan, could the single asset pool be retained and just continue to merge the liabilities ??

[david rigby]

Tough analysis. Not sure if this will help, but here goes.

As always, even though there is no minimum funding requirement under ERISA, there may be state or local statute which weighs in on the matter. This may be hard to track down.

Although it may seem irrelevant to your question, it may have a direct impact on whether you should have one or three plans. Even if not required, there might be other reasons for separating the assets and liabilities of each group, such as politics or public impression.

[LIBOR]

Thanks for the analysis Pax - sometimes we think too actuarially & in this case I think the factors that you have mentioned are more relevant - thanks again !!