I have a school district that wants to implement a 401(a) plan with ongoing employer-only contributions for their cabinet-level employees. They are going to add language to each one of the administrators’ employment contracts regarding this plan.
Is having the language in the contract sufficient legal authority for the school district to adopt and implement the 401(a) plan, or is an additional governing board resolution needed to establish legal authority for the plan?
A: The school district’s governing board will need to pass a board resolution to adopt the plan and will also establish the type of 401(a) plan being adopted (whether discretionary, or money purchase). That will leave the individual employment contracts to establish how much, when and for whom!