Benefits October 8, 2008

Baltimore School Officials Give Thumbs Down on 403(b) Vendor Consolidation

October 8, 2008 (PLANSPONSOR.com) - At a time when many 403(b) plans across the country are consolidating to a single service provider to ease compliance with new IRS rules, the Baltimore County school board voted not to follow that path in light of protest from hundreds of employees and the district's five labor groups.
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A Baltimore Sun news report said board members unanimously opposed the recommended contract with 403(b) provider Lincoln Financial Group, which would have moved away from the multiple vendors currently available to employees.

403(b) sponsors moving to a single-provider model say they are seeking simplified administration in light of new IRS requirements to monitor participant transactions among vendors (See The New 403(b) Model: Exclusive versus Multiple Vendor Programs ).

“What I think the board would like to see is possible scenarios of multiple vendors, certainly not going beyond the five who have … answered the requests for proposals,” said President JoAnn C. Murphy during the board’s meeting on Tuesday, according to the Sun.


About 300 people gathered at the school system headquarters to protest the possible vendor program change.

After the vote,Cheryl Bost, president of the teachers union, said she was glad the board acknowledged the letters it had received from employees about retirement plan services. “We’re pleased that they listened and at least want to take the time to investigate it further,” Bost told the Sun.

As of August 8, about 5,500 employees participated in the county’s 403(b) program.

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