Tribal governments may institute several types of organizational structures, and this article will outline retirement programs that will benefit the structure which your Tribe has selected.
If your Tribe has established any type of for-profit structure, such as a Tribal enterprise, typically, these types of structures are subject to ERISA and related regulations. The most common plan type utilized to establish retirement benefits for the employees within these entities is a 401(k) plan. With this type of structure, the employer deposit, whether profit sharing or match, can vary from organization to organization. Entities that may be more profitable have more flexibility and can provide a higher match on an annual basis to their employees. In fact, it is possible to make no matching employer contribution in start-up situations or in an extremely competitive business environment.
Secondly, Tribal governments have the ability to establish a separate retirement program for its Tribal government employees. This may include a defined benefit pension plan, a 401(k) plan, or both, if the Tribe chooses. These types of plans under a Tribal government are completely independent from those established for a Tribal enterprise, as discussed above. Tribal government plans are not subject to some of the more onerous administrative aspects of ERISA and can provide generous retirement benefits for eligible governmental employees. One important aspect of a Tribal government plan is that all individuals employed in a Tribal enterprise must be excluded from the Tribal government plan. It is not uncommon to see Tribes match three to five percent of an employee’s wages on an annual basis.
Lastly, Tribal governments have the ability to establish a retirement program for Tribal elected officials. This type of program recognizes the commitment many Tribal leaders have provided to their Tribal government and recognizes the unique components of their elected responsibilities, including tenure in office, long hours, constituent demands, and multiple assignments through committees and officer responsibilities. This type of structure would typically be established as a defined benefit pension plan. This type of plan is trending more and more with Tribal governments across the nation.
USI Consulting Group is uniquely positioned to assist Tribes with any of the above-mentioned retirement structures. We are committed to Indian Country, and our Tribal client base spans from the east to the west coast and to Alaska. We welcome any questions your Tribe may have, while considering the options for your retirement plans, and would be pleased to assist with the development of such plans
