calculators
forms and publications
news
about etf
frequently asked questions
contact etf
site map
video library
related links
home
top of page
home
members retirees employers governing boards careers at etf
 
Employers

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.

 

supporting excellence in Wisconsin public service