Years ago, I worked with a client who liked to tell the story of having begun working with ERISA governed plans right after ERISA was enacted. He had been told by his bosses that there is this “new law,” and you are in charge of issues arising under it. That “new law,” of course, was ERISA. Little could he have known at that time that this “new law” would grow up, by force of preemption and the size of the benefits market, to control and govern an overwhelming slice of American life.
One of the stories I remember him telling me is about early attempts to determine whether something was or was not a governmental plan. Governmental plans, you may recall, are not subject to ERISA. Back then, as he told the story, he and others in the industry applied an “if it looks like a duck, walks like a duck and talks like a duck “ test, meaning if it looked and felt like the plan related to a governmental entity, than it was a governmental plan. It was as good a standard as any, as you have to remember that, at the time, the extensive body of case law that now exists concerning ERISA plans had yet to be created.
Well, now we know better, after years of court decisions concerning ERISA plans, including whether or not a plan constitutes a governmental plan. Mike Reilly, over at the Boom blog (I just like writing Boom blog, for some reason), has the latest word on the subject, and on how, today, we determine whether or not a plan is a governmental plan. Hint: it’s a lot different and more technical than seeing if it walks like a duck.