The NACo Financial Services Center (FSC), Nationwide Retirement Solutions (NRS) and state associations of counties have partnered to provide county employees with Section 401(a) Defined Contribution Retirement Programs. These programs allow a county to provide employees with a retirement program that guarantees a specific contribution from the employer each pay period while allowing the employee to manage the investment of those contributions. Defined contribution retirement programs are often used when a county is transitioning from a defined benefit retirement program.
The NACo FSC Defined Contribution Retirement Program also includes an option to create a matching funds incentive for deferred compensation. In a match program, the county sets up a 401 (a) account for employees and agrees to contribute a specific amount to this account each year as long as the employee contributes at least a like amount to the deferred compensation program, thus helping county employees save for their own retirement. The program also gives county governments an additional benefit option to offer to their employees.
• Helps public employees save for retirement
• Enables public employees to reduce current taxes
• Institutes a systematic savings program for public employees
• Automatic contribution deductions make it easy for employees to save
• An employee’s account and its earnings grow on a tax-deferred basis
• Employees are 100% vested in their accounts
• Helps to recruit and retain quality personnel
• Usually less expensive to maintain than defined benefit plans
• Employer contributions are not subject to Federal Insurance Contributions Act (FICA)
• Flexibility in program design
• Helps the county manage unfunded liabilities that are more prevalent with defined benefit plans
For more information on NACo’s Defined Contribution Retirement Program, please contact Lisa Cole at 202.942.4270 or lcole@naco.org.