State and local governments have the sole authority under the law to establish retirement benefit plans for their employees. As the legal plan sponsor, each government has the right to determine the retirement benefits provided, the structures and policies for funding the benefits promised, the investment of the retirement plan’s assets, and the governance and administration of the plan.
This authority is in the very nature and purpose of being the plan sponsor in the first place. A good technical resource describing this authority can be found in the Public Pension Governance Series published by the National Association of State
