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457 Deferred Compensation Plan Update

457 Deferred Compensation Plan Update. Employee Benefits and Wellness Team October 21, 2009. ICMA-RC Fund Lineup. ICMA-RC has a standard trust series lineup of funds. ICMA-RC performs full qualitative and quantitative due diligence on funds in the trust series.

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457 Deferred Compensation Plan Update

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  1. 457 Deferred Compensation Plan Update Employee Benefits and Wellness Team October 21, 2009

  2. ICMA-RC Fund Lineup • ICMA-RC has a standard trust series lineup of funds. • ICMA-RC performs full qualitative and quantitative due diligence on funds in the trust series. • City of Scottsdale will make changes to its fund lineup to align with changes ICMA-RC has made to its standard trust series.

  3. Monies invested in a fund being eliminated will be mapped to a similar fund that is in the trust series – employees can choose some other fund if they wish. • Communication to employees and transfer of funds to be accomplished in about 90 days. • Funds eliminated represent about 5% of City of Scottsdale plan assets. • More information and sample employee communication to follow.

  4. Default for Funds being Eliminated

  5. Managed Accounts – new ICMA-RC service being considered • Totally voluntary program enhancement in which an employee may elect to turn over management of their account to a third party portfolio manager Ibbotson and Associates. • Program designed for “passive investor” who prefers to delegate investment decisions to professionals. • Service customized to investors ‘ long term goals, planned retirement age, amount of savings, etc. • Online enrollment or enroll during meeting with retirement plan specialist. • Participant may opt in or out of program. • Most other cities offer this service in their 457 plan. • Employee pays fee based on size of account balance. • Ranges from .6% annually on first $25,000 to .25% annual for amounts over $250,000.

  6. Brokerage Window Option – new ICMA-RC service being considered • Totally voluntary program enhancement in which participants may elect to manage their funds through self directed investment in the universe of stocks and mutual funds. • Minimum $30,000 account balance is required. • Initial minimum transfer to brokerage account is $5,000. • May invest in funds outside of City of Scottsdale standard lineup – including those being replaced. • Employee bears full responsibility for investment decision.

  7. Signature of disclosure statement required – employee responsible for choices. • Transactions made on line or by phone. • $50 start up fee plus additional fee per transaction. • Includes statements, confirmation of transactions. • More information, meetings with retirement plan specialists to follow.

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