County takes advantage of NACo plan
Since 1992, Stone County, Mo., has participated in a deferred compensation plan that has allowed county employees to set aside pre-tax earnings in a retirement fund. The county adopted the plan, created by the National Association of Counties, at a time when it had no other means of offering a retirement program to its employees.
NACo instituted the plan, underwritten by Columbus, Ohio-based Nationwide Life Insurance and administered by Columbus-based Nationwide Retirement Services (NRS), to provide deferred compensation benefits to counties that could not otherwise afford them. More than 380,000 county employees from approximately 1,900 counties currently participate in the plan. NACo offers the program at no cost to the counties.
The Stone County Commission voted to join the deferred compensation program in August 1992. “It was the feeling of the county commission at the time, as it is today, that this was an opportunity for our employees to set aside funds for the future,” says County Administrator Ron Housman.
The program offers employees several investment options, including two fixed annuity options and a variable annuity of differing investment styles and risk levels. As part of the program, NRS provides marketing, record-keeping, customer support and account management, as well as a regular enrollment and education seminars for employees. Employees also may enroll individually through NACo. An advisory committee, composed of county officials from participating counties nationwide and supervised by NACo, monitors the program’s investments, communications and policies.
County personnel may contribute up to 25 percent of their salaries, with a cap of $8,500, to the plan each year. “We have employees that set aside $10 to $20 a pay period, and others contribute much more,” Housman says. “No matter what the amount is, it allows them to set something aside and start planning for their futures.
“The results have been wonderful,” he notes. “[The program] allows them to defer any tax ramifications until a future date, and, in the interim, those dollars are earning dollars for them. It has been a tremendous benefit for our employees.”
For more information on NACo’s financial services program, visit www.naco.org.