In order to recruit and retain high-quality employees, the City of Shakopee offers a competitive and comprehensive benefit package to employees. This includes city-funded options including health, dental, disability, and life insurance options, as well as several entirely voluntary and employee-funded benefits. Among the voluntary benefits are various options for additional retirement savings and investments.

Staff is seeking approval for two additional voluntary deferred compensation offerings for employees: one new investment option through the existing Nationwide deferred compensation plan, and a new deferred compensation plan offering through Edward Jones (via John Hancock). 

Nationwide

Employees already participate in Nationwide’s voluntary deferred compensation program, and this modification would expand the available investment offerings to participating employees. The current proposal is to add Nationwide’s Indexed Principal Protection plan as an available investment tool. Under this plan the S&P 500 Daily Risk Control 5% Excess Return Index (Index) is assessed and used to determine interest earnings, subject to a capped rate based on a percentage of employees’ assets in the plan. If the index goes up, the participant’s interest earnings are increased accordingly up to their cap. If the index goes down, the principal value is protected so the only loss is potential new interest earnings. Interest is capitalized on a quarterly basis, so the protected principal value does increase under favorable market conditions while remaining protected during unfavorable market conditions.

If approved, this new investment option would be available to both employees currently participating in Nationwide’s programs as well as new participants looking to establish a retirement savings program.

Edward Jones (Via John Hancock)

In the last employee engagement survey, several employees had expressed a desire for an additional deferred compensation plan offering. There is a local licensed financial advisor with connections to the community that has expressed a strong desire to offer financial planning services to employees, including a deferred compensation program.

John Hancock plans to offer a number of investment options, payroll integration to allow for efficient pre and post-tax contributions, a simple fee structure, educational tools and programs, and personalized service.