The Internal Revenue Service and the Treasury Department have issued a notice saying they anticipate issuing proposed regulations that would permit a state or local retirement system that is a governmental plan to cover public charter school employees if certain requirements are satisfied.
Notice 2015-07 also announces that broader transition relief will be addressed in the proposed regulations and includes a request for public comments.
Charter schools have become an increasingly popular option for many students and their parents, but the rules have remained murky for many of the schools, which in some places such as New York City are actually sharing space with traditional public schools.
School reformers and for-profit charter school operators have been flexing their muscles in recent years and pushed for further expansion of charter schools, which can be both public and private schools. Charter schools have become more of a politicized issue as well, as teachers unions and charter school operators find themselves squaring off for their share of taxpayer dollars.
The question of how to deal with retirement plans that have traditionally covered government employees could have major ramifications as the IRS steps into the debate, though the proposed regulations appear to be aimed at employees of public charter schools rather than private schools. But the guidance could potentially also answer questions for the growing number of schoolteachers and administrators who find themselves working for charter schools that have a foothold in both the private and public sectors.