Item Description:
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Negotiate Agreement with Nationwide to administer a 457(b) Deferred Compensation Plan on behalf of Hennepin County, rescinding BAR 25-0144 and BAR 25-0145 dated April 29, 2025
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Resolution:
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BE IT RESOLVED, that the Hennepin County Board of Commissioners authorizes the County Administrator to negotiate an agreement with Nationwide to serve as the recordkeeper of the county’s 457(b) Deferred Compensation Plan.
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Background:
Hennepin County’s current deferred compensation options include 457(b) plans through Voya, Fidelity, and MSRS. MSRS has recently retained Voya to serve as its recordkeeper. For many years, the county has offered employees 457(b) plans through these vendors, each of which administer the county’s plan but have slightly different investment offerings and fees. In May, the Board authorized negotiation of new agreements to continue services with both Voya and Fidelity, but those agreements have not yet been finalized. In July, the county learned that National Association of Counties (NACo) partners with Nationwide for its 457(b) recordkeeping services and as a result Nationwide has unique experience providing services to counties.
Nationwide provided the county with a very competitive proposal with investment fees well below the rates charged by the current service providers. Nationwide’s proposal will save county employees an estimated $370,000 per year in recordkeeping fees. Additionally, county employees will earn an estimated additional $800,000 in interest per year in stable value funds.
The county’s Deferred Compensation Committee met twice to discuss this proposal, along with the county’s long-time investment consultant. The Committee and investment advisor met with a representative of Nationwide to ask a number of questions regarding Nationwide’s proposal. The Committee then recommended the County Administrator take Nationwide’s proposal to the County Board.
After careful analysis and extensive discussions, County Administration and Human Resources believe that streamlining the number of options will benefit employees and increase plan participation.
Nationwide is a mutual company founded in 1926 that is owned by its members, meaning they have total focus on clients versus stockholders. Their mission is to protect people, businesses, and futures with extraordinary care, and they are the #1 provider of governmental retirement plans with more than $158 billion in assets nationally. Their offer includes:
• Lower Administration Fee
• Higher Stable Value Fund Returns
• Target Date Fund Flexibility
• Variable Investment Lineup Flexibility
• Co-Fiduciary Investment Advisory Service
• Primary-Dedicated County Representative, plus 2 additional metro-area Support-Representatives
• Unlimited virtual CFP Financial Planning services
• Custom website and URL
• Self-directed Brokerage Option through Charles Schwab
• End-to-end loan administration services
Nationwide currently provides deferred compensation services to 123 County/County special districts in Minnesota, including Dakota, Stearns, Washington and Ramsey counties.
To proceed with the Nationwide agreement, County Administration and Human Resources request the following BARs dated April 29, 2025 be rescinded:
BAR 25-0144, which authorized the County Administrator to negotiate Agmt A2512840 with Voya Retirement Insurance and Annuity Company for the provision of deferred compensation plan services for county employees, 04/01/2025-03/31/32, with the option to extend for three (3) additional one-year periods; and
BAR 25-0145, which authorized the County Administrator to negotiate Agreement A2512839 with Fidelity Investment Tax Exempt Services Company for the provision of deferred compensation plan services for county employees, 06/01/25-05/31/32, with the option to extend for three (3) additional one-year periods.
Current Request: Approval to negotiate an Agreement with Nationwide to administer Hennepin County’s 457(b) Deferred Compensation Plan; and rescind BARs 25-0144 and 25-0145.
recommendation
Recommendation from County Administrator: Recommend Approval