Charter school teachers fear IRS rules change

[Geee]

Washington Examiner:

A little-noticed proposed change in Internal Revenue Service regulations could have devastating effects for charter school teachers by making them ineligible for state retirement plans, and they could stand to lose much of the money that they already have accrued.

The proposed rule, released with little fanfare near the end of last year, would make major changes to the definition of “governmental plans,” the federal standard for who can be considered a government employee for the purposes of participating in state pension systems.

“The IRS did not have charter schools in their sights, but whether they had them in their sights or not, it could have negative consequences for us,” said Todd Ziebarth, vice president for state advocacy and support at the National Alliance for Public Charter Schools. “Our concern is that this could raise some questions. It’s a gray area around whether charters would meet the test.”

The proposed change would establish five criteria for determining eligibility in state retirement plans, the most troublesome of which, from the point of view of whether charter school teachers could participate, is a provision stating that “the governing officers either are appointed by state officials or publicly elected.” Another condition is that a government body must be responsible for all the debt a participating institution accumulates.