For decades, governmental retirement plans have been exempt from many of the Code rules governing tax-advantaged retirement plans. Sponsors of these plans have had a number of tax-advantaged benefit structures available to meet the retirement needs of their employees, including tax-qualified plans under Code section 401(a), tax-deferred annuities under Code section 403(b), eligible deferred compensation plans under Code section 457(b), and deemed IRAs. This unique treatment continued in 2006 with the enactment of the Pension Protection Act. This article focuses on significant changes to the Code made by the PPA that affect governmental plans and the challenges these changes create for governmental plans.
This article will be published in a future issue of BNA’s “Tax Management Memorandum.”