March 27, 2000 – the DOL issues Advisory Opinion 2000-03A, deciding that the Employees’ Money Purchase Pension Plan of the Housing Authority of the City of Santa Barbara is a governmental plan within the meaning of ERISA section 3(32) and therefore is excluded from ERISA Title I coverage by ERISA section 4(b)(1). In making that determination, the DOL found that the Housing Authority’s money purchase plan met the definition of “governmental plan” contained in ERISA section 3(32) because it was a public corporation established pursuant to a state statute which could exercise governmental powers, including eminent domain, and its property and revenues were exempt from state and local taxation, and it was controlled and supervised by the mayor and city council of the City of Santa Barbara.
On Nov. 7, 2011, the IRS issued Proposed Regulations on the Determination of Governmental Plan Status within the meaning of Internal Revenue Code section 414(d). Code section 414(d) defines the term “governmental plan” as a plan established and maintained for its employees by the Government of the United States, by the government of any State or political subdivision thereof, or by any agency or instrumentality of any of the foregoing. The definition of governmental plan in ERISA section 3(32) is essentially the same as Code section 414(d) except Code section 414(d) uses the term “established and maintained” and ERISA section 3(32) uses the term “established or maintained”. There are currently no regulations providing guidance about Code section 414(d) other than these new proposed regulations. The IRS has been using the facts and circumstances analysis contained in Rev. Rul. 89-49 to determine whether a retirement plan is a governmental plan within the meaning of Code section 414(d).