Financial Management Committee to propose adoption of state retirement plan, freeze Nationwide contributions

The Financial Management Committee will bring a proposal to the county commission in two weeks to formally adopt the state’s retirement plan, but those under the current Nationwide plan will not lose access to that, either.

Finance Director Brad Burke said the proposal was months in the making.

“The state plan offers more choices, lower fees and a lot more education,” Burke said.

The decision comes after months of possible plans from several different companies, including John Hancock, Edward Jones and even Nationwide.

“We are trying to help the employees,” he said. “We care about them.”

Under the state plan, participants will have access to both 457 and 401k investment options and will generally pay lower fees in the process.

For Carter County, the plan is employee-funded, so implementing the state plan will not provide another cost to add to the budget.

However, one of the biggest reasons for the switch, he said, was the lack of knowledge of how the Nationwide plan even worked in the first place.

“I had issues getting information from Nationwide,” Burke said.

The committee even invited a representative from Nationwide to one of their meetings in an attempt to explain what was going on, but commissioners left the meeting feeling less than satisfied.

“We are going to have some good education [with the state plan],” Burke said. “They do this all across the state.”

However, the investments employees have already made with Nationwide are complicated, and the county cannot simply withdraw everything all at once without incurring over $20,000 in fines.

“I would recommend not paying that fee,” Burke said.

Instead, the committee said it would freeze all new participants and current contributions into the Nationwide plan as it worked to set up the state plan instead.

He said the next step, once the commission approves the decision, would be to meet with the Tennessee Department of Treasury to work out the details of the new retirement plan. The county would then slowly chip away at contributions within the Nationwide plan.

“I cannot wait for the state program to start,” Burke said.

He said current projections say the new plan would start most likely in September, August at the earliest.

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