Executive Director's Report - Fall Issue
2003
Deferred Compensation Plan Benefits
Employees
All but three counties
in Alabama participate in the State Employees Retirement
Systems (ERS). The ERS is, by any standard, one of the
best in the country. A strong retirement program is something
practically everyone desires and government employees
who participate in the ERS are fortunate. It is what is
generally referred to as a "defined benefit"
retirement program. Stated simply, a predetermined amount
of money is paid into the program on behalf of employees
for a predetermined minimum number of years, which in
turn results in a predetermined benefit.
ERS benefits, in addition to
Social Security benefits, help to ensure financial security
during retirement years. Forty-nine county commissions
in the state allow their employees to participate in an
additional retirement program. This voluntary program
is referred to as "deferred compensation" or
a 457 Supplemental Retirement Account. Employees are authorized
to contribute up to a certain amount of their annual compensation.
Such programs are generally referred to as "defined
contribution" plans. Employees, through payroll deductions,
contribute to the program and the total they contribute,
plus or minus investment gains or losses, are available
to be withdrawn upon termination of employment.
The deferred compensation program
was established about 20 years ago by the National Association
of Counties (NACo) and subsequently endorsed by the ACCA.
It is administered by the Nationwide Insurance Company
through its subsidiary, Nationwide Retirement Solutions
(NRS). There are currently 83 county commissions and/or
county-related entities participating. More than 5,000
county employees in the state were participating as of
November 19, 2003.
These 5,000 employees now have
a third resource from which they can meet their financial
needs during retirement. While it would be inappropriate
to reveal specific numbers about particular counties we
can relate the following information. Twenty employees
in one of the least populous counties currently have deferrals
totaling more than $103,000. Thirty-four employees in
one of the medium populous counties have current deferrals
totaling almost $305,000. Employees in one of the five
most populous counties have deferrals totaling more than
$3 million.
The ACCA Board of Directors
has endorsed the deferred compensation program and encourages
the county commissions of the 18 non-participating counties
to make this program available to their employees. The
program is not hard to administer and employees will enjoy
watching their "extra" nest egg grow.
There
appears on the inside back cover of this issue of The
County Commissioner a map of Alabama. Next to
the map are the names of the NRS representatives who service
various regions of the state. These individuals are available
to service participating counties as well as to enroll
new ones.
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