Focus on . . . Governmental Plans (Part II)

Abstract

Ever since the enactment of ERISA in 1974, governmental plans have received special treatment under both ERISA and the Internal Revenue Code, but the boundaries between governmental and nongovernmental plans have not been clear. The distinction has recently become more important, as the Taxpayer Relief Act of 1997 has exempted most governmental retirement plans from most of the Code's nondiscrimination rules. Part I of this article (published in the Spring 1998 issue) discusses the statutory definitions of the term 'governmental plan' and described how the substantive rules applicable to these retirement plans differ from the rules that apply to nongovernmental plans. The second part discusses the employer aggregation rules for governmental retirement plans.

Keywords: governmental plans, ERISA, Internal Revenue Code, Taxpayer Relief Act of 1997