Available Now: SURS Deferred Compensation Plan Compliance Kit

In 2018, the Illinois legislature amended the Illinois Pension Code to add a requirement that the State Universities Retirement System (SURS) provide an optional defined contribution benefit to all eligible members of SURS (which is done through SURS employers).  The legislature’s purpose in enacting this amendment was to offer eligible employees a “low cost, uniform, high performing” savings plan to supplement their current retirement savings options. Neither employees nor colleges are required to contribute to the SURS Deferred Compensation Plan (“SURS Plan”), although the statute provides the option to do so.

We note that the statutory language and legislative history do not explicitly require colleges to adopt a savings plan and approve a Participation Agreement related to their participation in the SURS Plan.  However, based on our review of the SURS Plan document and Section 457(b) of the Internal Revenue Code, and through discussions with SURS, we understand that employer approval of a Participation Agreement is a prerequisite for employee participation in an approved plan. Notably, eligible employees must be able to participate in the SURS Plan. Therefore, even if a college offers another optional defined contribution plan to its employees, it is required to enter into a separate agreement with SURS to facilitate employees’ statutory right to participate in the SURS Plan.

SURS is requiring all employers to begin offering its SURS Plan to eligible employees no later than July 1, 2021.  In connection with this, SURS has directed employers to adopt a resolution and enter into an Employer Participation Agreement as soon as possible, and not later than June 30, 2021, to meet this deadline. The most recent version of the SURS Resolution and Employer Participation Agreement can be found here. The SURS forms should be carefully reviewed prior to adoption, particularly with regard to employer contributions. In addition, colleges should remember that conferral of this new benefit may result in union requests to bargain over its impact, even if the benefit does not require the employer to contribute.

We have reviewed the above documents, in addition to the SURS Plan, and based on questions and concerns from our clients, our attorneys have developed a SURS Deferred Compensation Plan Compliance Kit for use by colleges in connection with offering the SURS Plan to eligible employees. The SURS Deferred Compensation Plan Compliance Kit includes the following documents:

GUIDANCE DOCUMENT

Guidance on Completing the Employer Participation Agreement for the SURS Deferred Compensation Plan

CHECKLIST AND SAMPLE NOTICE

Administrator Checklist Related to Offering the SURS Deferred Compensation Plan and Sample Notice

NOTICE TO UNION(S)

Notice to Respective Union(s) Regarding SURS Deferred Compensation Plan

• 2 Versions (one for colleges that may have already adopted the plan and one for colleges that have not yet adopted the plan)

We are pleased to offer the SURS Deferred Compensation Plan Compliance Kit on a flat-fee basis. For more information, including pricing, please contact Catherine R. Locallo (clocallo@robbins-schwartz.com) or Philip H. Gerner III (pgerner@robbins-schwartz.com), or any other Robbins Schwartz attorney for assistance.