Employee benefit plans of Federal, state, or local governmental agencies escape many of the rules under ERISA and the Internal Revenue Code. However, they are often subject to similar or stricter rules under state law. For example, the California constitution imposes ERISA-like fiduciary duties on fiduciaries of California governmental plans. Likewise, under certain circumstances, the Impairment of Contract doctrine may prevent a California agency from making changes to its promised benefits without violating the state constitution. In addition, the California Public Employees’ Pension Reform Act of 2013 (PEPRA) imposes certain requirements on all California public pension systems. Also, California statutory pension or health systems such as the Public Employees’ Retirement System (CalPERS) and the Public Employees’ Health and Medical Care Act (PEMHCA) have their own rules and regulations regarding the benefits that can be provided.
State and local governmental entities can also opt out of the Social Security System provided they offer a retirement plan known as a Social Security Replacement Plan that provides a minimum benefit to replace what employees would otherwise receive under Social Security. Our attorneys have the experience to help governmental entities design and maintain sustainable benefit programs.