By Kathryn Kretschmer-Weyland
February 11, 2008

“Your employees face difficult decisions every day,” Stamford (CT) Mayor Dannel P. Malloy told mayors convened at the USCM Winter Meeting. “Fortunately through the USCM, you have a tool at hand: deferred compensation. It’s an easy way to make the lives of your employees better.”

“Thirty years ago, deferred compensation did not exist for governmental employees. The Conference and Nationwide were the leading forces in bringing that benefit to employees. Ever since then, we’ve had a relationship with Nationwide. It’s because of that relationship our employees are better off,” Malloy said. “Offering deferred compensation is an easy way to make the lives of our employees better.”

Malloy pointed to several mega-trends that should concern mayors:

1. Non-participating employees tend to be 35 years old and younger. They don’t believe Social Security will play a major role in their lives in retirement. That may become a significant barrier in attracting employees to service in the public sector.

2. The cost of health care is pressing employees. The reality is, more and more of our employees will retire with their parents still alive. They’re not just worried about how they’ll pay for their own healthcare; they’re worried about how they’ll pay for their parents’ healthcare.

3. GASB 45 is requiring all of us in city government to show how we’re going to pay for retiree healthcare costs.

“Combined, these trends are making our employees more financially uncomfortable than they’ve ever been. I believe the solution is to encourage them to participate in deferred compensation,” Malloy said.

“Quite frankly, in the world of deferred compensation, nobody does it better than Nationwide,” he added.

USCM Vice President Miami Mayor Manuel Diaz agrees. “Through the USCM Deferred Compensation Program, we’re able to help employees plan for their retirement, and that helps me. I am pleased when employees are satisfied and have piece of mind about their retirement future.”

Diaz noted Miami significantly exceeds the national averages for employee participation, average account balance and contribution per active participant. “That’s Nationwide at work,” he said. “Their representatives do workshops at every site in the city and regularly meet one-on-one with employees. These numbers are proof that Nationwide is doing a great job educating our employees, and they’re responding.”

“If you don’t have the USCM Deferred Compensation Program administered by Nationwide, you need to look into adding it,” Diaz said.

The foundation of the USCM Deferred Compensation Program is a Nationwide-provided 457(b) plan that lets public employees enjoy the opportunity for tax-deferred growth of payroll-deducted money. By deferring federal taxes, their invested assets have the opportunity to grow and compound faster. Participants pay ordinary income taxes when and as they withdraw from their accounts.

Unlike other qualified plans, participants can access their funds immediately upon severing from employment — although, through Nationwide’s educational efforts, many see the long-term benefits of continuing to participate in the Program well into retirement. For more information about the USCM deferred compensation program, contact Kathryn Kretschmer-Weyland at The United States Conference of Mayors: phone: 301-460-5251, e-mail: kweyland@usmayors.org; or contact Jeffrey Bean at The United States Conference of Mayors: phone: 202-446-8140, e-mail: jbean@usmayors.org; or contact Louie Watson, Vice President of Strategic Relationships, at Nationwide: phone: 614-854-8895, e-mail: WatsonL2@Nationwide.com.