This blog was posted by Terry Mumford and Albert Lee.

NCPERS Annual Legislative Conference was held February 3, 2009 and the NAPPA Tax Section Meeting was held February 4, 2009.  Both were in Washington, D.C. and included speakers from Congress, the U. S. Treasury and the IRS. 

National Conference on Public Employee Retirement Systems (NCPERS)

The NCPERS conference is designed to educate attendees about hot topics on Capitol Hill so that they can be well informed in making calls on their U.S. representatives and senators.  I was particularly interested in the comments made by Mildeen Worrell, tax counsel to the Ways and Means Committee because she focused on issues that she believes governmental plans will face in the future.  In particular she talked about the following issues that "cross-over" from the private sector to affect governmental plans:

  • Funding.  Worrell observed that articles about the funding levels of public plans can have a negative effect unless governmental plans make their voices heard. 
  • Benefit Design.  If Congress allows the private sector retirement plans to be increasingly based on individual plans, that will also threaten traditional DB governmental plans.  In her personal opinion, hybrid plans (cash balance plans) are the future of defined benefit plans.  However, political forces prevent Congress and regulators from doing what should be done on cash balance plans.  Leaving the situation to the courts does not make sense.
  • Fee Disclosure.  According to Worrell, the fee disclosure issue will likely expand outside of the 401(k) context – at least to 403(b) and 457(b) plans.
  • Other issues on the horizon include providing for independent investment advice and the "auto IRA."

Many Ice Miller governmental clients will be challenged in 2009 and beyond to address these issues at the state and local level.

Read a discussion of regulatory topics at the NCPERS conference.

National Association of Public Pension Attorneys (NAPPA) Tax Section
Terry Mumford is the lead chair of the NAPPA Tax Section.

The NAPPA Tax Section meeting is intended to educate public pension attorneys on statutory and regulatory developments that affect the qualified status of public pension plans and the taxation of member benefits. Martin "Marty" Pippins, IRS EP technical guidance and quality assurance, has addressed this group for many years with regard to IRS guidance projects.
 
Pippins discussed a governmental plan questionnaire (Form 14035) that at the time of the conference had not yet been released.  As stated by Pippins the survey went to 25 governmental plans that were randomly selected to answer the survey.  At the same time the survey was posted on the Web site for a 90 day comment period.  Based upon the comments, the questionnaire will be revised and then sent to additional plans (100-200) for completion.

Read a question and answer session with Marty Pippins that contains more information.