While the Employee Retirement Income Security Act sets federal minimum standards for private employee benefit plans, employee benefit plans maintained by local governmental employers are not subject to similar federal guidance. No overarching federal law governs the investment and management of public funds. Instead, local government public funds and public pension funds are subject to a wide variety of state and local regulations.
Because every state has its own statutory scheme regarding the investment and custody of public funds and public pension funds, understanding and abiding by applicable laws and regulations require analysis akin to peeling an onion. Adding another layer, counties, municipalities, public agencies, and public authorities often also have their own codes, ordinances, and regulations that address these same issues. Sometimes applicable laws and regulations are expansive (especially in the case of home rule states), and in other cases they are restrictive. As explained below, having a thorough understanding of laws and regulations governing public funds is crucial to both maximizing returns for public entities and avoiding pitfalls when advising public entities or managing public funds.