TN 8 (01-20)

SL 30001.321 What a Retirement System Is for Purposes of a Referendum

When the 1954 Social Security Amendments authorized the coverage of employees in positions under a retirement system, it prescribed the mechanics for accomplishing this coverage. The State must have authority under State law and the State Section 218 Agreement to extend coverage to employees in positions under a retirement system. Additionally, the Act authorizes the States to extend coverage to positions under a retirement system after giving the employees an opportunity to vote to determine whether their services should be covered. Federal law gives the State some flexibility to designate the scope of the retirement system for purposes of the referendum.

A. Designating a retirement system

If a retirement system covers the positions of employees of the State and positions of employees of one or more political subdivisions, or, alternatively, the employees of more than one political subdivision, the State has the following choices as to what may constitute the retirement system for purposes of the referendum:

  • The entire system;

  • A distinct structured tier or plan within the retirement system that (1) has its own fund or sum of money set apart for the particular purpose of retirement, pensions, or annuities of that tier or plan and (2) that is not comingled with the assets of another tier or plan;

  • Positions under the retirement system filled by employees of the State;

  • Positions under the retirement system filled by employees of a specific political subdivision;

  • Positions under the retirement system filled by employees of any combination of the State or one or more political subdivisions;

  • Positions under the retirement system filled by employees of each institution of higher learning, which includes junior colleges and teachers' colleges; and

    NOTE: 

    Institutions of higher learning that are not political subdivisions and that do not in themselves comprise the entire retirement system, cannot be combined for purposes of the referendum. If a State elects to hold separate referendums for such institutions, a separate referendum must be held for each. Institutions of higher learning that are separate political subdivisions may be combined with other political subdivisions and/or with the State.

    A retirement system that covers the positions of employees of a single political subdivision can only be further divided to treat employees of each institution of higher learning as separate retirement systems for referendum purposes. A retirement system that covers only the positions of employees of a State can be subdivided further to treat employees of each institution of higher learning as separate retirement systems; it cannot be subdivided to provide coverage for employees of different departments of the State.

  • Positions under the retirement system filled by the employees of a hospital that is an integral part of a political subdivision, two or more political subdivisions, or the employees of two or more hospitals each of which is an integral part of the same political subdivision.

    NOTE: 

    The term "hospital" is used in the ordinary sense and refers to any institution organized and operated for the reception and medical or surgical care of the sick, injured, aged, and infirm. If there are two or more hospitals that are integral parts of the same political subdivision(s), a separate referendum may be held for each or, in contrast to institutions of higher learning, the hospitals may be combined for a referendum.

    A retirement system that covers the positions of employees of a single political subdivision can only be further divided to treat employees of hospitals as separate retirement systems for referendum purposes.

NOTE: 

The State has additional options for police and firefighter positions under a retirement system (see SL 30001.345; SL 30001.346; SL 30001.347).

B. Separate retirement systems required

If the State optionally excluded a class of positions from the retirement system coverage group (see SL 30001.357) (or optionally excluded a class of positions from an absolute coverage group that subsequently came under a retirement system) and the State later wishes to cover those positions, then the positions constitute a separate retirement system for referendum purposes. If the State optionally excluded "all classes" of the position involved, then "all classes" of the position constitute the retirement system for referendum purposes.

Example: The State excluded all classes of part-time positions under a retirement system from coverage under its Section 218 Agreement. If the State later decides to cover these positions under its Agreement, all classes of part-time positions under the retirement system would be treated as a separate retirement system for referendum purposes.

A State may not combine multiple distinct retirement systems for the purpose of conducting a referendum. For example, the State could not hold a single referendum to expand coverage to positions under a State retirement system and a political subdivision retirement system that is not a part of the State system.


To Link to this section - Use this URL:
http://policy.ssa.gov/poms.nsf/lnx/1930001321
SL 30001.321 - What a Retirement System Is for Purposes of a Referendum - 01/29/2020
Batch run: 01/29/2020
Rev:01/29/2020