Forest Park village officials have a precise legal role in administering the deferred compensation plan for many current and former village employees. But somewhere over the past few months, Village Administrator Tim Gillian and the village council forgot one critical aspect of the 457(b) plan: It isn’t their money.
Every dollar – and its seven million dollars in the fund – was put there by a village employee who chose to save a little out of every paycheck to supplement the entirely separate pension system the village does control and contribute to.
The deferred compensation plan has been in place and administered by one outside company – Nationwide Retirement Solutions –for decades. Employees seemed comfortable with the investment options they were offered, the returns they were earning, the personal service they were receiving. And so when, in December, Gillian recommended and the village council unanimously agreed to ditch Nationwide and replace it with AXA Equitable, many employees felt apprehensive and unheard on a topic that is very sensitive to every worker: How will I manage to stay solvent in my retirement?
The Review began getting anonymous calls from employees, and so it seems did Mayor Anthony Calderone. The mayor is very close to many employees and retirees and clearly did not like the unhappiness he was hearing.
So now it is February and the $7 million is still under the management of Nationwide and will, says Calderone, stay there. There is the matter of the village’s binding contract with AXA Equitable to be resolved. We trust a solution will be found and accept it might cost the village some money.
What’s the lesson? When you are managing other people’s money you need to find a way to advise them and consult with them – even if it is not legally required – before you make notable changes. It is common sense, common courtesy, and politically smart.