Lower fees cited in recommended switch of Greensburg city worker savings plan

Greensburg could see lower costs if the city switches to a new provider for its employee retirement savings plan.

Financial adviser Ed Gaskey this week recommended city council change the company offering the voluntary 457 tax-deferred employee savings plan from Nationwide to OneAmerica, based on proposals from four companies.

Mayor Robert Bell said council will take action soon on Gaskey’s presentation.

Compared to those of competitors, Gaskey said, the existing Nationwide plan has higher fees for the more than $6.4 million invested for roughly 70 participating employees.

Nationwide’s “hard billable” fees charged to the city total about $7,600 annually, Gaskey said, while most other companies don’t assess such charges.

“Most companies will do it through the fund fees that are being paid by each of the participants,” he said. “The best scenario is to keep fees to a minimum in all cases.”

Comparing four of the top five investment holdings most city participants have in the plan, Gaskey said, Nationwide’s fees average 1.59% compared to .86% for OneAmerica.

“It’s a significant cost savings,” he said.

Switching to a new provider, he said, will bring “both service technology and customer service to the city into the 21st century.”

Greensburg’s plan has been administered for 29 years by Nationwide, initially operating as Public Employees Benefit Services Corporation, city officials said.

Gaskey also obtained 457 plan proposals from Voya Financial, John Hancock and Empower Retirement. OneAmerica, which also provides some insurance coverage for the city, is offering an extra incentive.

“If they were to partner with you for the 457 plan, they would do a rate lock on the existing insurance you have with them,” Gaskey said.

Gaskey said competitive bidding for the 457 plan is recommended every three years.