What is the consequence if a governmental housing authority lets say, adopts a volume submitter document that is clearly an ERISA corporate plan? It has ERISA provisions and IRC provisions that are not applicable to a governmental entity. Is this just superfluous language as the attorney drafter (with huge legal fees) claims, or could this subject the employer to unnecessary provisions, which could be enforceable in an IRS audit?

What the plan says is what the plan says. There is no such thing as superfluous language, unless the Plan is written in a way that makes it superfluous. For example, if the drafter doctored up the vs plan to say something like "Sections so-and-so do not apply to a governmental plan described in Section 414(d) of the Code," than those Sections are inapplicable.

Pension Girl, in addition to jpod's suggestions, a caution that you might consider. An otherwise supposed provision of a document might be void (and so ineffective) if making the provision is beyond the governmental person's powers under applicable law. An agency, instrumentality, or political subdivision of a State has only those powers that State law grants. A housing authority often is restricted by State (and local) law and the conditions of Federal grants.

Perhaps because governmental plans aren't a big class of frequent flyers in the IRS's correction programs, there isn't much IRS guidance on what to do about a situation in which the plan's administration is contrary to a document's ostensible provision that, although consistent with IRC 401(a), is contrary to law. This situation doesn't work well in the IRS's standard correction programs, but can be negotiated using other means.

Of course, it's best to get the provisions right before the governmental person adopts a document.

Thank you both! It helps clarify the matter.

There are several attorneys around the country with considerable experience in drafting governmental plans. Having done a modest amount of this myself, I would urge the client to engage one of those practitioners rather than adopt a prototype.