The Government of the District of Columbia offers several retirement plans to employees. Employees hired before 1987 are under a civil service retirement program, while those hired after are offered a 401(a) plan and a 457(b) plan. Police, firefighters and teachers have a defined benefit plan (DB) but all employees are able to participate in the 457(b) plan.
Employees are automatically enrolled in the 401(a) plan after one year of service, so the plan has 100% participation of eligible employees. The 457 plan is voluntary, with an aggregate participation rate of about 48%; although the participation rate in some government agencies is higher.
John S. Henry, associate treasurer - asset management in the Office of Finance and Treasury for the Government of the District of Columbia, explains that simply because the contract for the prior recordkeeper to the 401(a) and 457(b) plans was ending, the government issued a request for proposals, and ended up selecting ICMA-RC as the recordkeeper starting in August 2015.
One of the things the government liked about ICMA-RC was the company presented a good number of tools to potentially increase enrollment and engagement in the 457 plan. The Government of the District of Columbia recognized that with most employees not having a DB plan to supplement the 401(a), participating in the 457 plan was necessary to really have enough retirement income. In addition, he says there was concern that employees didn’t understand their retirement offerings, and if they did, they didn’t know how best to utilize them.
The government asked ICMA-RC to bring some unique things to employees. One of the tools the government wanted to use was ICMA-RC’s RealizeRetirement tour, which the government offered to employees in June. NEXT: The RealizeRetirement tour