Treasurer’s Office Negotiates 51% Administrative Fee Reduction for Supplemental Retirement Plans -- Savings Will Accrue to Plan Participants
MONTPELIER, VT — Vermont State Treasurer Beth Pearce announced today that members of the State (VSERS), Teachers’ (VSTRS), and Municipal (VMERS) retirement systems will soon be able to save more money for retirement under an agreement with a new third-party administrator, Prudential Retirement. The Treasurer’s Office was able to negotiate a 51% reduction in administrative fees plan participants pay for supplemental retirement, saving members an estimated $3.2 million over 5 years.
“As the fiduciary of retirement plans, we work every day to ensure that plan participants can achieve retirement security,” said Treasurer Pearce. “After reviewing multiple proposals, we determined Prudential Retirement would provide excellent value and service to plan participants. Every dollar saved in administering the plans will accrue to the benefit of participating members and to Vermont taxpayers.”
The savings and efficiencies achieved in the switch to Prudential builds upon a successful track record of reducing administrative fees paid by plan participants. In February 2016, the per participant fee for the State 457 Deferred Compensation Plan was reduced by 30 percent. Similar fee reductions have been achieved throughout other plans administered by the Treasurer’s Office.
Prudential Retirement was selected by the Treasurer’s Office after an open RFP was conducted with each of the three retirement systems’ Board of Trustees. Prudential Retirement was selected as the third-party administrator for the seven preexisting optional plan offerings available to VSERS, VSTRS, and VMERS members. The VSERS, VSTRS and VMERS defined benefit plans are not impacted by this change and will continue to be administered by the Vermont Retirement Division and overseen by the Retirement Boards.
The scope of service includes administration of:
- State 457 Deferred Compensation Plan
- State Defined Contribution Plan
- Municipal Employees 457 Deferred Compensation Plan
- Municipal Defined Contribution Plan
- Municipal Retiree Health Savings Plan
- Teachers 403(b) Plan
- Single Deposit Investment Account Plan
The transition to Prudential will occur in February 2018. Plan participants will benefit from enhanced services and lower fees. Additionally, plan participants will be able to access a number of account management options and improved financial literacy planning tools.
The Treasurer’s Office and Prudential Retirement will continue to communicate directly with VSERS, VSTRS and VMERS plan participants as the transition occurs.