Employer Bulletin
All Employers
Vol. 17, No. 9
April 12, 2000
The Wisconsin Deferred Compensation Program
| For
more information about the program or how to elect participation,
contact the WDC at:
Wisconsin Deferred Compensation Program
16 North Carroll Street Suite 209
Madison, Wisconsin 53703
(608) 256-6200 toll-free (800) 257-4457;
TTY (for hearing impaired) (800) 995-4457; Fax (608) 256-6125
or the WDC Web site
|
Did you know that as a local government or school district employer
in Wisconsin, you are eligible to elect to offer the Wisconsin Deferred
Compensation Program (WDC) to your employes? The WDC is a supplemental
retirement savings plan regulated by Section 457 of the Internal
Revenue Code and Chapter 40 of Wisconsin Statutes. Employes can
defer pre-tax income into one or more of the available investment
options. The account balance grows on a tax-deferred basis until
a distribution occurs, normally at retirement.
The Wisconsin Deferred Compensation Board and Department of Employe
Trust Funds (ETF) are responsible for the WDC. They select the administrative
services provider through a competitive bid process. The current
contract administrator is National Deferred Compensation, Inc. Plan
representatives are available at the local office in Madison, WI.
They also travel throughout Wisconsin to conduct group informational
meetings or meet with employes one-on-one. Meetings at the work
site are offered at least annually and scheduled at the employer's
discretion.
The Board and the Department also select and monitor the WDC's
investment options. Investments are independent of the contract
administrator. The investment options offered range from conservative
fixed interest options to aggressive growth mutual funds. In addition
to the 13 core options, in early 2000 the WDC also began offering
participants the opportunity to invest through a brokerage account
with Charles Schwab & Co. This enhancement provides participants
with approximately 2,000 additional mutual fund choices.
More than 550 local government employers have elected to offer
the WDC to its employes. As of January 31, 2000, there were 33,538
state and local government employes participating with total plan
assets exceeding $1.16 billion.
| The
WDC is designed to meet your employes' needs . . . .
from novice to experienced investor. |
| TIER ONE
For the
inexperienced investor or those that do not want to spend
much time on their retirement savings plan. |
The
WDC provides an asset allocation service that will allow your
employes to establish an investment plan based on a diversified
model portfolio and the plan administrator will review the
account each quarter. Anytime it is out of balance by 5% or
more in any one investment option, the WDC will automatically
rebalance the account by initiating exchanges to match the
balance to the designated model portfolio. |
| TIER TWO
For the
average investor that is comfortable using investments monitored
by the Deferred Compensation Board but wants discretion over
when or if the account is rebalanced. |
Participants
have 13 investment choices available that are selected and
monitored by the Deferred Compensation Board. The Board reviews
the options annually to determine if they continue to remain
acceptable long-term investment opportunities. Funds that
fail to meet performance benchmarks may be removed from the
WDC. Participants choose to invest in one or more of the available
options and have full discretion to maintain current investment
allocations or redirect deferrals or exchange balances at
any time. |
| TIER THREE
For the
experienced investor that wants more investment choices and
is prepared to evaluate options to determine if they are an
appropriate retirement investment. |
In
addition to the core spectrum of options, participants may
enroll in a separate brokerage option available through Charles
Schwab & Co. Investments into the brokerage are made as a
transfer of assets from the core funds. There are 2000 additional
mutual fund choices available from well known fund families.
Schwab resources for searching and analyzing investments are
available to WDC participants electing this option. |
Participant Fee Reduced Again in 2000
The Board is responsible for establishing the level of fees that
will be assessed to employes participating in the WDC. Fees have
been reduced every year since 1991. Effective in 2000, the Board
adopted a new fee structure that assesses a flat fee of between
$6 and $120 per year (depending on account balance) instead of an
asset fee based on the total account balance.
Because participants with higher account balances generally use
more plan services (more frequent exchanges, requests for information,
verifications of account balance, etc.), the new fee schedule continues
to raise fees as the account balance grows. As illustrated in the
table below, participants with an account balance up to $5,000 are
assessed $6 annually (50 cents per month). Once the balance reaches
$5,001, the fee increases to $18 per year (or $1.50 per month).
Fees also increase when the account balance reaches $25,001, $50,001,
$100,001 and $150,001.
Special Note:
If you would like more information about the WDC and the benefits
that it can provide your employes, you must call the WDC administration
office at (608) 256-6200 or toll free at (800) 257-4457 or return
the enclosed reply card. These are NOT Department of
Employe Trust Funds telephone numbers. All requests
for information or assistance on electing participation are handled
by the contract administrator and requests must be directed to the
above telephone numbers.
| Fee
for account
balances between |
Monthly
fee |
Total
fee for |
| Quarter |
Year |
| $0
to $5,000
$5,001
to $25,000
$25,001
to $50,000
$50,001
to $100,000
$100,001
to $150,000
$150,001
and up |
$.50
$1.50
$3.00
$6.00
$8.33
$10.00 |
$1.50
$4.50
$9.00
$18.00
$25.00
$30.00 |
$6.00
$18.00
$36.00
$72.00
$100.00
$120.00 |
| NATIONAL
ASSOCIATION OF GOVERNMENT DEFERRED COMPENSATION ADMINISTRATORS
ONE-DAY REGIONAL MEETING SET FOR MAY 22 IN EVANSTON, ILLINOIS
Do you currently
offer a Sec. 457 deferred compensation program to your employes?
Do you have questions about how it is administered but you
do not know where to go for answers? Do you just want to learn
more about what a 457 plan is?
If you answered
yes to any of these questions, you may want to attend the
one-day seminar, 457 Plans for the Future, on Monday,
May 22, 2000 in Evanston, Illinois, at the Northwestern University
campus. This seminar is offered by the National Association
of Government Deferred Compensation Administrators (NAGDCA).
Registration deadline is May 15, 2000.
For information
about NAGDCA and its regional meeting, go to the organization's
Web site at www.nagdca.org or contact NAGDCA headquarters
at P.O. Box 1017, Lexington, KY 40501-0067; Phone: (606) 231-1904;
Fax: (606) 514-9188. E-mail: info@nagdca.org
NAGDCA is a national
organization that represents over 200 government members and
more than 250 industrial/ corporate members in the 457/401(k)
government deferred compensation industry. NAGDCA is recognized
in the pensions and benefits industry as the only association
that concentrates on Section 457 government retirement plans.
Government members represent states, cities, counties and
other special-purpose entities/districts. Industrial members
include representatives from companies that have significant
involvement in the government retirement savings industry,
such as investment consultants, insurance companies, mutual
fund providers and independent plan administrators. |
|
