DB Plan - Benefit Statements & SPD

[Penman2006]

Is a municiple DB plan required to provide a benefit statement to a plan participant upon request (as is required in a private sector plan)? Similarly, what about the SPD, must it be provided upon request?

[John Feldt ERPA CPC QPA]

A governmental employer sponsored plan is not subject to ERISA, and thus they do not have to provide SPDs, SARs, or benefit statements. But, according to §1.401-1(a)(2), the plan must still be somehow communicated to employees in some manner. If you do provide some sort of a plan summary, many of the "rights" that you see in private sector plan SPDs should probably not be listed in the gov plan's summary, assuming they weren't included in the plan document either.

[Guest Nathan Kolbes]

A governmental employer sponsored plan is not subject to ERISA, and thus they do not have to provide SPDs, SARs, or benefit statements. But, according to §1.401-1(a)(2), the plan must still be somehow communicated to employees in some manner. If you do provide some sort of a plan summary, many of the "rights" that you see in private sector plan SPDs should probably not be listed in the gov plan's summary, assuming they weren't included in the plan document either.

I am providing some testimony in a case of an employee vs PA. Do ou have any specific cases requiring information being given the to the employee such as proof of funding.

[John Feldt ERPA CPC QPA]

No.

Governmental plans must have a formal written plan document and use the plan assets exclusively for the benefit of participants and beneficiaries. Generally, governmental plans must satisfy the following:

Code Section 401(a)(1)

Code Section 401(a)(2)

Code Section 401(a)(3) (but under the pre-ERISA rules)

Code Section 401(a)(4)

Code Sections 401(a)(5) and 401(l)

Code Section 401(a)(7) (but under the pre-ERISA rules)

Code Section 401(a)(8)

Code Section 401(a)(9)

Code Sections 401(a)(16) and 415 (under the pre-TRA 1986 rules for limits for early and late retirement)

Code Section 401(a)(17)

Code Section 401(a)(25)

Code Section 401(a)(26) (some exceptions apply)

Code Section 401(a)(31)

Code Section 401(b)

Code Sections 402 and 72

Code Section 3405

Code Section 6652(i)

Governmental plans are generally exempt from the following:

Code Sections 401(a)(10) and 416

Code Sections 401(a)(11) and 417

Code Sections 401(a)(12) and 414(l)

Code Section 401(a)(13)

Code Section 401(a)(14)

Code Section 401(a)(15)

Code Section 401(a)(19)

Code Section 401(a)(20)

Code Section 401(a)(29)

Code Section 410 (pre-ERISA)

Code Section 411 (pre-ERISA)

Code Section 412

Code Section 414(p)

Code Section 4975

Code Section 4980

Code Sections 6057, 6058, and 6059; IRS Form 5500; Schedule B; Schedule SSA

ERISA Section 4(b)(1) exempts governmental plans from all of ERISA Title I. The participant protection provisions don't apply. A governmental plan can even reduce accrued benefits. The fiduciary responsibility requirements, reporting and disclosure requirements, and antialienation requirements do not apply to governmental plans.

Best of success to you.

[Guest taxesquire]

I agree with J4FKBC's posts - please do not take this response as me being disagreeable with im/her. I do want to point out that you need to examine State law on this issue.

Florida law, for example, contains a specific provision requiring municipal plans to provide a "plan summary" - it actually lists what information is required. It also lists what info a municipal plan must file wtih the state government on a regular basis.

Check PA law.

[John Feldt ERPA CPC QPA]

Thanks, tax esquire, good point.

[Guest Nathan Kolbes]

I agree with J4FKBC's posts - please do not take this response as me being disagreeable with im/her. I do want to point out that you need to examine State law on this issue.

Florida law, for example, contains a specific provision requiring municipal plans to provide a "plan summary" - it actually lists what information is required. It also lists what info a municipal plan must file wtih the state government on a regular basis.

Check PA law.

[Guest mjb]

J4FKBC: You really need to check your cites for IRC provisions that apply to govt plans. For example, under IRC 401(a)(5)(G) govt plans ar not subject to minimium participation and non discrimination provisions of IRC 401(a)(3) and (a)(4) since 1996. Govt plans are also exempt from intergration b/c they are exempt from 401(a)(4) see IRC 401(a)(5)© and (D).

[John Feldt ERPA CPC QPA]

Yep. (thus the word "Generally"). Thanks for the upgraded info mjb!

This does not change the requirement regarding statements, nor taxesquire's point to check with state law.