401(k) plan for a town?

[MR]

Are there any circumstances under which a town can have a 401(k) plan?

[Guest b2kates]

for employees, why not!

[Guest Therese]

b2kates - state & local government plans can't have 401(k) plans, under IRC 401(k)(4)(B)(ii). I don't know of any exception that would allow a town to have a plan.

[mbozek]

State and local governments which established 401(k) plans prior to June 1986 are grandfathered and may continue 401(k) plans for their employees.

[Guest Therese]

You're right - I had forgotten about that. There's a good discussion of governments and 401(k)plans at http://www.benefitslink.com/mbmirror/9988.html