Nationwide in the Middle of Alabama State Benefits Dispute

June 18, 2009 ( - The Alabama State Personnel Board, citing a lack of financial transparency, canceled a contract with Nationwide Retirement Solutions, which provides a deferred compensation plan for state workers.

The Associated Press reports that the decision stems from an ongoing feud between the Board and the Alabama State Employees Association (ASEA). Under state law, the employee association recommends a deferred compensation plan, and the Personnel Board approves it. The latest plan was approved by the Personnel Board in 1994 at ASEA’s request.

Board members say they were unaware the 1994 agreement provided for Nationwide, based in Columbus, Ohio, to make large payments to ASEA. The Association’s tax returns show those payments have reached almost $6 million since 2002, Board attorney Alice Ann Byrne said, according to the AP.

Spokesperson Erica Lewis said Nationwide feels caught in the middle of the dispute. Nationwide has cited a court order as its reason for declining to give documents to the Personnel Board.

Two state employees are suing ASEA and Nationwide over the plan, complaining it is a bad deal for state workers. The State Personnel Board has asked to intervene on the side of the employees. The judge handling that suit has issued a protective order that keeps financial records from becoming public, the AP said.

In addition, ASEA is suing Personnel Board members, accusing them of violating the association’s contractual rights and conspiring to damage the organization.

The cancellation of the deferred compensation plan contract will take effect in six months, and Board members said they will have another deferred compensation plan in place when the contract ends.