6.2 ERMUSR 12-13-2005 Elk River
' Municipal Utilities
13069 Orono Parkway phone: 763.441.2020
Elk River,MN 55330 Fax:763 9918099
December 5, 2005
To: Elk River Municipal Utilities commission
Jerry Takle
' Jim Tralle
John Dietz
From: Theresa Slominski
Subject: 2nd 457 plan
' As I mentioned at the last commission meeting in my staff update, I was investigating
another 457 plan to offer our employees to participate in. This would be an alternative
' plan for the employees, not a plan in addition to the current plan in terms of matching
dollars. Employees could opt to participate in one or both plans and ERMU, as an
• employer, would not be contributing anything more, only providing our current match in
whichever plan(s) they participate in. In other words,just as there is no cost to the
current plan besides the matching, there would be no cost to ERMU for this plan besides
the matching.
Currently, we participate in a 457 plan with Minnesota Deferred Compensation (MNDC).
Back in June I was approached by Wenzel and Associates, at the request of a few of our
' employees, about offering an alternative 457 plan through them. There are two major
influencing differences between the plans. One is that MNDC is a not for profit company
' that employs salaried representatives, where Wenzel and Associates is a private sector
business that employs commissioned representatives who are licensed financial
consultants. As such, Wenzel and Associates provides a personal financial planning and
' advice component that they can offer as licensed financial planners, which is the
component the employees were wanting, however, it comes at a cost of slightly higher
fees. The second difference is that MNDC is not owned or affiliated with any particular
financial or insurance company and so they represent a very broad investing base.
Wenzel and Associates are affiliated with ING and so they represent ING's products for
investment.
' I did some research on the firm (contacting their current customers, comparing rates, and
conducting some peer inquiries) and they appear to be a viable, honest firm. They do a
lot of business with other cities and counties in Minnesota and I have attached a list for
your information. I also contacted the city to see if they have a second plan or not. They
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11111 do have a second plan, and it is with ICMA, which is very similar to MNDC and is a not
for profit organization as well.
IIt would make sense to have the other plan in place in January since the plans report on a
calendar year. MNDC would need to "open a window" to allow employees to possibly
I transfer funds from MNDC to W&A if they choose. We could have an implementation
date of January 15, with the "window" being January 15 through February 15. Our
MNDC representative will be here in December to prepare for the 2006 year, and we
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could also schedule a late December visit for W&A.
I would like to offer this alternative plan to the employees.
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Listed below are the cities and counties we are presently
I doing business with:
I MINNESOTA
Cities Counties
IAvon Bagley Benton Big Stone
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Bayport Centerville Clearwater Grant
Cottonwood Dawson Hubbard Lac qui Parle
IElbow Lake Fairfax LeSueur Meeker
IFoley Glenwood Norman Pine
• Hallock Henning Pope Red Lake
Karlstad Kasson Swift Todd
ILong Prairie Mahnomen Wabasha Wilkin
Melrose Menahga Winona Yellow Medicine
Montevideo Monticello
I New York Mills Park Rapids
IPelican Rapids Pequot Lakes
Plainview Princeton
IRed Lake Falls Roseau
I
Walker West Concord
Wyoming