West Virginia Retirement Plus gaining steam

Nineteen cities across the state have elected to participate in West Virginia Retirement Plus, a 457 deferred compensation plan that cities, counties and other political subdivisions may offer their employees.

South Charleston, St. Albans, Dunbar and Ripley are among cities that make the plan available. A total of 30 counties, including Kanawha and Raleigh, offer the plan to their employees.

“We’re thrilled that these initial cities have seen fit to make the plan available,” State Treasurer John Perdue said. “We trust those numbers will continue to rise as more cities, counties and other entities understand what we can do for them.” Nineteen cities across the state have elected to participate in West Virginia Retirement Plus, a 457 deferred compensation plan that cities, counties and other political subdivisions may offer their employees.

South Charleston, St. Albans, Dunbar and Ripley are among cities that make the plan available. A total of 30 counties, including Kanawha and Raleigh, offer the plan to their employees.

“We’re thrilled that these initial cities have seen fit to make the plan available,” State Treasurer John Perdue said. “We trust those numbers will continue to rise as more cities, counties and other entities understand what we can do for them.”

City and county employees may enroll for free. Contributions lower taxable income and may even qualify one for an actual credit against taxes owed, depending on income level.

ING, the fund’s manager, charges relatively low fees, complimented by a large and varied investment menu. The West Virginia Municipal League is an official 457 sponsor.

Since Treasurer Perdue’s office took over the program in July of 2006, total enrollment has nearly doubled, from 5,000 to 9,500. Total assets have risen from $68 million to $74 million and more than 70 political subdivisions are participating. None participated in July of 2006 because previous state law barred them from doing so.

Municipalities that have joined are Ansted, Benwood, Bridgeport, Chesapeake, Dunbar, Franklin, Hinton, Hurricane, Mason, Marmet, Montgomery, Moundsville, Nitro, Oak Hill, Ripley, Romney,
South Charleston, St. Albans and Wardensville.

Legislation that transferred the program to the Treasurer’s Office also opened the program to those other than state employees.

A 457 plan is designed to supplement an employee’s pension, social security and other personal retirement savings, and it helps to complete a full circle of retirement planning.  The plan is similar to a 401k plan in structure except it is designed to complement a public employee’s primary retirement plan. 

Advantages for municipal employees:

Employees decide, within certain Internal Revenue Code (IRC) limits how much to contribute.
•   Contributions are conveniently deducted from their paychecks.
•   Employees can participate for as little as $10 per pay period and choose their own investments.
•   Contributions and any accumulated earnings are not taxed until withdrawn.
•   Employees can change or discontinue their contribution amounts at any time.

Advantages for local governments:

• The West Virginia State Treasurer’s Office administers the plan at no cost.
• Access to a quality investment menu with competitive fees; many times, West Virginia Retirement Plus fees are lower.
• It’s easy to join by completing simple adoption agreements.
• An added benefit which affords local governments the opportunity to attract and retain good employees.
• ING Financial Advisers provides investment and record keeping services.

Other benefits

• Supplements pensions and Social Security
• A menu of 26 investment options from respected fund families
• Local ING representatives to service participants
• Financial education and retirement planning
• Federal tax credits for certain income levels
• Lowers taxable income
• Employees who leave public service prior to age 59 ½ may withdraw funds without penalty

For more information, call 304-340-5022