City Council considers deferred compensation plan change
The City of Minneapolis currently offers three options for City employees to enroll in a deferred compensation plan: ING, ICMA and the Minnesota Deferred Compensation Plan. At its May 7 meeting, the City Council’s Ways and Means Committee approved a proposal to transfer employees’ deferred compensation plan investments that are currently with ING and ICMA to the Minnesota Deferred Compensation Plan, which is a state-managed plan.
If the proposal is approved by the full City Council, employees with ICMA and ING accounts will have their accounts transferred to Minnesota Deferred Compensation Plan in the fall. The proposal is on the agenda for the City Council’s May 11 meeting.
Additional information will be mailed to participants’ homes during the week of May 21. This summer, the City will schedule seminars to help ICMA and ING participants understand the transfer process and the advantages of moving investment funds to the Minnesota Deferred Compensation Plan.
The state plan has been in existence for more than 35 years, has more than $4 billion in assets and serves more than 600 of Minnesota’s public employers. The Minnesota Deferred Compensation Plan offers 11 standard investment options, 11 target retirement date funds and a brokerage window offering participants access to more than 13,000 different mutual funds. In addition, the Minnesota Deferred Compensation Plan provides an overall more competitive fee structure for its standard investment options as compared to both ING and ICMA. Lower fees mean more money in participants’ accounts working for them over time.
The proposal stems from a review of the deferred compensation plan structure by staff from Finance, Human Resources and the City Attorney’s Office. Their assessment determined that transitioning to the state plan would provide employees the same investment options while reducing the City of Minneapolis’ need to provide costly plan administration and investment oversight. The recommendation before the City Council was reviewed with the Minneapolis Board of Business Agents, who concurred with the recommendation.
Published May 9, 2012