Get Full Government Meeting Transcripts, Videos, & Alerts Forever!
Get email alerts on the Pensions topic
No spam. Unsubscribe anytime.
Nationwide tells committee Sacramento deferred-comp plans approach $889 million; rollovers drive most outflows
Summary
Nationwide reported the city's deferred-compensation plans ended the quarter near $889 million, with distributions of about $12 million and rollovers accounting for roughly $7.2 million. The committee discussed education and targeted marketing to retain assets.
Nationwide presented the fourth-quarter report to the Good Defined Contribution Plans Committee on March 18, reporting positive market gains and raising retention concerns as rollovers accounted for more than half of distributions for the period.
"The plan ended roughly $889,000,000 as of the end of the year," Nationwide’s presenter said, walking the committee through quarter-by-quarter activity, participation statistics and plan-level trends. Nationwide reported roughly $12 million in distributions for the quarter; about $7.2 million of that total was rollovers by participants who had separated service.
Committee members and staff explored the drivers of higher balances in the city's 457 plan compared with 401(a) plans, and Nationwide attributed the larger 457 balances to the plan’s longer history and broader eligibility. Nationwide also cited the higher IRS contribution limits available in the 457 structure and the effect of prior fee reductions and governance changes on participant outcomes.
Nationwide recommended a retention strategy focused on outreach to participants who separate service, including targeted mailing campaigns, seminars and in-person consultations. The presenter said the firm would try to send a marketing specialist to a future meeting and proposed working with staff on a targeted campaign aimed at newly separated employees and participants approaching required minimum distribution ages.
The committee highlighted operational and engagement metrics: about 75% of participants have opted out of paper delivery, 86% have online accounts, and 95% have beneficiaries on file. Nationwide also reported 1,237 participants using Roth contributions (about $23.9 million) and 1,925 participants enrolled in a fee-for-service managed accounts product.
Members asked about eligibility limits for roll-ins; Nationwide confirmed some accounts (for example, inherited IRAs) are not eligible for roll-in to the city’s 457 plan. The committee also discussed loan rules and the committee’s prior decision to allow separated employees to take loans as a retention tool.
No formal committee action was required on the report; staff received the presentation as informational and discussed next steps for potential participant outreach.
