Bruce Dale

During an internal audit at the City of Austin, a discovery was made: The city’s 457 plan funds were being held in a liability account and not in trust with the plan per Internal Revenue Service (IRS) regulations. According to Section 457(g) of the Internal Revenue Code (IRC), all amounts deferred under eligible IRC Section 457(b) plans of state and local government employers must be set aside in trust for the exclusive benefit of plan participants.

So the plan contacted its relationship manager, Bruce Dale of Empower Retirement. Dale, whose formal title is managing director, government relationship, has devoted most of his career to the government market and knew the importance of keeping a plan in compliance with all applicable laws—in this case, those “specifically regarding keeping plan assets in trust for 457 plans,” he says.

This was a complex issue, taking 17 months to resolve, says A.J. Padilla of the plan. “There have been countless hours of meetings, phone calls and research, leading to the plan assets being moved in trust within the plan,” Padilla says. During that near year-and-a-half, Dale worked closely with the plan sponsor and Empower’s internal teams to educate the plan about the transition and assist Padilla in performing it.

“The root cause of the issue was discovered during the conversion,” Dale explains. “We identified the issue and [helped] the plan through the process.”

Padilla points to the end result, which is multifaceted: “Bruce helped the deferred compensation committee reach compliance with the IRS regulation that protects the plan but, more importantly, protected the participants and their assets. Bruce has been instrumental in moving the City of Austin 457 plan forward.”