County employees get new retirement savings option | News | #retirement | #elderly | #seniors
MADISON — For county employees looking to minimize their retirement savings risk, there’s another investment option.
On Tuesday, the Madison County Board of Commissioners voted 3-0 to authorize what’s known as the Nationwide deferred compensation for Indexed Principal Protection for county employees.
It enables employees to forgo possible interest gains in the stock market for the assurance that they will never lose the principal of what they invested.
Anne Pruss, Madison County clerk, said Nationwide is offering it as another alternative retirement savings option. Employees are guaranteed growth of between 0% and 8% per quarter, she said.
“The plus is that it doesn’t go below the 0,” Pruss said.
Commissioner Eric Stinson said it seems like a worthwhile option and made the motion to accept it. Stinson was involved in retirement savings “for 20 years, 20 years ago,” he said.
“It guarantees the principal and, in return, Nationwide is capping it at 8%,” Stinson said. “So if earnings are 12%, you are still only going to get 8%, but if earning are -7 percent or when the market crashed and everyone’s 401(k) lost one-fourth or a half, you are never going to lose your principal.”
The investment contribution is all voluntary by the employees, with the county not providing any type of contribution. There also is no cost for the employees to take the option.
Nationwide is eliminating its guaranteed option for the county and replacing it with the guaranteed principal contribution, Stinson and Pruss said.