Travis County Commissioners Court
December 30, 2008
Item 11
11, consider and take appropriate action on letter of understanding concerning the administration of the nation white fixed account. If we could just hit the highlights, that would be good. We got this late yesterday.
>> judge and Commissioners, loren and bar are has worked with nationwide and great west and she got these copies yesterday out to the court. This, we believe, resolves all the outstanding issues we had with nationwide. Basically it is the agreement that will allow them to pay off the fixed account participants if they were to retire or terminate with the county. That was the issue we out h. Outstanding with them. It also details how it will -- how the transactions will occur between great west and nationwide and the fact that it would be -- it would not take longer than the two-day process that we had wanted to have. Barbara, do you have any highlights?
>> no. This just -- this finalizes the logistics of how the benefit sensitivity will be honored.
>> we've been discussing a 60-month payout.
>> yes.
>> one time we were getting e-mails from employees regarding that. I guess we answered questions. The e-mails stopped.
>> I don't know why the e-mails stopped. It could be because we sent two letters and their questions are answered and they feel comfortable at this point. Could be they just got tired of e-mailing.
>> can we explain that 60-month transition again? And what happens if you have that money in the account and you leave employment.
>> if you have funds invest understand a fixed account with nationwide, in order for the participants not to pay a market advancement fee which was over $2 million so basically whatever recall have in in your fixed account will be over 60 months. The issue we had with nationwide was there was a question about whether someone had left the county or retired during that 60-month period.
>> or had an emergency situation that would qualify under the law to allow them to withdraw any of the fund from their account.
>> whether they would pay that off and that was an issue because certainly people planning on retiring or leaving didn't want to have their money stuck and wouldn't have any -- be able to get that out. But this agreement indicates that nationwide will pay off those, so that's not an issue. The issue though really still is that we're going to transition to great west on January 30th. And if you have money invest understand a fixed account at nationwide during that period of time, it's going to be frozen over there until it's transferred over to great west. So you won't be able to move that investment to a different investment option. So that's the issue. If somebody has a fixed account value at nationwide and they think they may want to move into a mutual fund investment within the next five years, they may want to consider moving it out of the fixed account at nationwide prior to the transition and would have until January 22 to make any changes to mayor nationwide account. They could move it into another investment option that will move over to great west at 100%. Then they could move that at great west whatever investment they would like. So that's the issue. If you are invested in a fixed account and you feel like you may want to move that investment to another option, then you may want to consider doing that prior to the transition because once the transition occurs and you still have money in the fixed account at nationwide, it will be frozen there until it's transferred over that 60-month period, unless you were to terminate or retire or have an emergency, as barbara mentioned before. Blank.
>> [one moment, please, for change in captioners]
>> would you be able to go to great west and borrow it, 50% of the total?
>> you can borrow 50% of the total that you have, as long as you have 50% of the total at great west, which means that this is really only a problem that would affect people in the first two and a half years of the transition because then they'll have 50% of whatever was in their fixed account at great west's because it will have been moostled over on the 60 month transition, but if in the next two and a half years you want a loan and you had everything at nationwide, you would be limited to what had been transferred over.
>> okay.
>> and one other point I'm on the loan is you will have until January 16th to request a loan from nationwide. That will be last date they consider loans at nationwide. So that's the deadline for that.
>> so there will be a blackout period or frozen period from the 16th through the 30th in terms of getting new loans.
>> is anyone confused about what we're talking about here today? The transition period, the deadline, the dates, all of these things that we're discussing here today. I know last week I think we mentioned some opportunities for employees to get some answers. Have that information been placed out according to what the motion we made last week to make sure that everyone understands --
>> on the county's website? Not yet, but we're working on that and we'll get that done and also send a global e-mail out that will have all of the meeting schedules. We did have a poster that we requested liaisons to come get from our office to post in their departments, and of course all departments should have received a letter that had the schedule out. So we urge everybody that has questions to attend one of the meetings and hopefully we can answer everyone's questions so that they're comfortable with the situation. Basically, though, the January 16th terms for loans, which we just indicated. January 22nd is the last date that nationwide can make any changes to your options --
>> before 3:00 in the afternoon.
>> before 3:00. January 30th is when your value will transfer over from your nationwide to great west, except for those on the fixed account, and then February 6 is when great west will reopen, and you can direct to make changes to your great west account. So that's the main dates, transition dates that people need to be aware of. And we will have meetings the first two weeks of January. So just be wear of those -- just plan on coming to a meeting and I think we can answer most people's questions.
>> move approval of the proposed letter of understanding.
>> second.
>> discussion of the motion? All in favor? That passes by unanimous vote. I want to thank county staff and the nationwide representatives for helping us work through this. This was a difficult and delicate. So we're indebted to you. You do an outstanding job.
>> and in truth, most of the working through that relates to this letter had to be done between great west and nationwide because it was how they would match their systems and the way they do things. So our thanks should go also to our new provider.
>> we'll do it.
>> good luck, Gerald.
>> thank you.
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Last Modified:
Tuesday, December 30, 2008 2:27 PM