RETURN

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The League of California Cities and The
California State Association of Counties
Employee Relations Institute
Supplemental Retirement Plans In The Public
Sector SEGAL ADVISORS, INC. Roderick B. Crane,
JD Vice President Public Sector Compliance
Director
RETURN
TIME
RISK
January 2002
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Supplemental Retirement Plans In The Public
Sector What We Will Cover

• Designing the Plan
• Funding Vehicles

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Supplemental Retirement Plans In The Public
Sector Benefits Design Elements

• Eligibility - Who is the Plan for?
• Management/higher paid?
• Rank and file?
• Both?
• Benefits Design
• Defined Benefit or Defined Contribution
• Employer/Employee Contributions
• Purpose Supplemental, Additional Compensation,
  Incentive/Merit/Bonus, Excess
  benefit restoration
• Ancillary benefits - Death and Disability
• Retiree Health
• Vesting
• Distributions

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Supplemental Retirement Plans In The Public
Sector Benefits Design Elements

• Administration
• Self Administered
• Third-Party Provider out-sources in whole or in
  part
• Investments
• Trustee Directed
• Participant Directed for DC plans

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Supplemental Retirement Plans In The Public
Sector Funding Vehicles

• For Deferred Compensation/Retirement Income
• IRC 401(a) qualified plans
• IRC 457(b) eligible deferred compensation
  plans
• IRC 457(f) ineligible deferred compensation
  plans
• IRC 403(b) tax-sheltered annuities or
  custodial accounts
• IRC 401(k) cash or deferred arrangements
• IRC 415(m) excess benefit plans
• For Retiree Medical
• IRC 401(h) medical accounts
• IRC 115 public sector grantor trusts
• IRC 501(c)(9) voluntary employee benefits
  association trusts (VEBA)
• Rabbi trusts
• Employer general asset accounts

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Supplemental Retirement Plans In The Public
Sector Which Funding Vehicle is Best?

• IRC 401(a) qualified plans
• For all employer types
• IRC 457(b) eligible deferred compensation plans
• For school employers coupled with 403(b) TSAs
• IRC 457(f) ineligible deferred compensation
  plans
• Rarely appropriate
• IRC 403(b) tax-sheltered annuities or custodial
  accounts
• Good for TSA eligible employers only
• IRC 401(k) cash or deferred arrangements
• Only useful if grandfathered plan exists
• IRC 415(m) excess benefit plans
• Good for additional savings above 415 limits
  both DB and DC

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IRC 401(a) Qualified Retirement Plans
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IRC 401(a) Qualified Retirement Plans
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IRC 401(a) Qualified Retirement Plans
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IRC 401(a) Qualified Retirement Plans
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IRC 401(a) Qualified Retirement Plans
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IRC 457(b) Eligible Deferred Compensation Plans
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IRC 457(b) Eligible Deferred Compensation Plans
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IRC 457(b) Eligible Deferred Compensation Plans
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IRC 457(b) Eligible Deferred Compensation Plans
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IRC 457(f) Ineligible Deferred Compensation
Plans
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IRC 457(f) Ineligible Deferred Compensation Plans
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IRC 457(f) Ineligible Deferred Compensation Plans
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IRC 457(f) Ineligible Deferred Compensation Plans
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IRC 403(b) Tax Sheltered Annuities
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IRC 403(b) Tax Sheltered Annuities
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IRC 403(b) Tax Sheltered Annuities
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IRC 403(b) Tax Sheltered Annuities
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IRC 403(b) Tax Sheltered Annuities
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IRC 401(k) Cash or Deferred Arrangements
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IRC 401(k) Cash or Deferred Arrangements
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IRC 401(k) Cash or Deferred Arrangements
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IRC 401(k) Cash or Deferred Arrangements
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IRC 401(k) Cash or Deferred Arrangements
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IRC 415(m) Excess Benefit Arrangements
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IRC 415(m) Excess Benefit Arrangements
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IRC 415(m) Excess Benefit Arrangements
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IRC 415(m) Excess Benefit Arrangements
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Questions?

• Denver Office - Contact Rod Crane
• Phone [phone]
• rcrane_at_segalco.com
• Los Angeles Office - Contact Thomas Morrison
• 818-956-6700
• San Francisco Office - Contact Tony Angelo
• 415-263-8200