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
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