City of Dunwoody

The City of Dunwoody, Georgia, once an unincorporated suburban section of Atlanta, was established in December 2008. So was its retirement plan system. The latter consists of a 401(a) plan, an optional 457(b) plan and a Social Security replacement plan to serve its 110 employees, 78 of whom work in public safety.

Richard Platto, finance director for the city—actually a suburb of Atlanta—says employees may join the 401(a) and 457(b) from the first day of their employment, and employees as young as 18 are eligible.

Platto explains that the plan’s eligibility age used to be 21, but after the city hired an 18-year-old to work in public safety, it didn’t want to leave that person out, so it lowered the eligibility age. It also hoped that step might encourage more young workers to apply for municipal jobs.

Most of Dunwoody’s employees are police, and most of the rest are in areas such as development and administration, Platto says. Although, he says, it is too early to tell if the eligibility-age reduction will help in recruiting younger workers, he is optimistic that it will make the city more competitive in hiring.

Since Dunwoody employees are exempt from Social Security, the city offers a Social Security replacement plan. The city invests, in a trust account on behalf of the employee, the employer share of what would normally be deducted for FICA [Federal Insurance Contributions Act] taxes. This provision is universal for Dunwoody’s employees, and they do not contribute to it themselves.

Dunwoody also contributes 11% to its employees’ 401(a) accounts regardless of how much the individual contributes, and it matches 50% of contributions to the 457(b) up to 14%. The result: a total maximum of 15% employer contributions to the defined contribution plans.

According to Eric Linton, Dunwoody city manager, the 11% contribution was recently raised from 10% and is “one of the strings we can pull in terms of total compensation,” to remain competitive with other jurisdictions. “We try to keep our plan very dynamic,” Linton says, adding that the 457(b) requires an 8% contribution to receive the maximum employer match because the city wants to ensure its participants “have some skin in the game.”

More than 90% of participants in the DC plans invest in the plan’s default option, a target-date series managed by T. Rowe Price, Platto says. The plans also offer a range of other investment options, including large- and small-cap stock funds, a balanced fund and a growth fund, among others, for those looking for a more customized portfolio.

Dunwoody has a 91% plan-participation rate despite lacking automatic enrollment. However, they are working with OneDigital, the plan’s adviser, to implement the feature “likely for next year,” Platto says.

—Paul Mulholland