Public Pensions and Employee Benefits.

• Position: From the Library

The ABCs of Portability

Kittower, Diane

Governing, September 2001, pp. 58-60

The Economic Growth and Tax Relief Reconciliation Act of 2001 liberalized laws governing the portability of retirement assets for public employees. As of January 1, 2001, employees will be able to transfer retirement assets from one employer-sponsored plan to another or to an IRA. Although the new law modernizes the world of public pensions to reflect the increasing mobility of today's workforce, it also places greater demands on administrators and employees to understand the benefits and limitations of portability. Because of the tax advantages of public employee retirement plans, the transfer of assets from one of these plans to another requires careful planning. Violations of the rules governing the movement of retirement assets can result in harsh financial penalties. As such...