Best Practices for Municipal Retirement Plans

Listed below are several factors local governments should keep in mind when creating a municipal retirement plan:

• Create a Plan Document
  • Do not rely solely on special acts, ordinances, or collective bargaining agreements
  • Reflect collectively bargained provisions
  • Update contemporaneously to reflect changes in bargained terms
• Make Sure Plan Terms Regarding Non-Union Employees are Properly Authorized
• Know and Understand the Terms of the Plan – Read the Plan!
  • Avoid enrolling ineligible participants
  • Avoid excluding eligible employees
  • Avoid underfunding plan
• If Employee Mandatory Contributions are “Picked Up,” Make Sure Plan Document Provides for the Pick-Up and that Assets are Held in a Trust or Annuity Contract that is Treated as a Trust
• Make Sure Claim Procedures For Contesting Benefit Calculations Are Clearly Described
  • Address in Collective Bargaining Agreement
  • Address in Plan Document
  • Cross Reference