Algood Employees to Receive New Retirement Plan Options

The City of Algood employees will receive new options for retirement investing through a state-regulated 401(K).

City Manager Keith Morrison said the new retirement investing gives the council and employees better options.

“It does not change the city’s cost in any way. We already budgeted for this change would not be any additional cost for this change. However, the fees that are accessed on the employees,” Morrison said. “And their retirement would be substantially less than what they are through the Principal account. It also relieves the city council of a liability that was placed on them when the plan was initiated. ”

Morrison said Principal can no longer maintain the old money purchase plans.

With the state-regulated 401(k), employees can choose their risk and proposed retirement date, Mayor Kirk Dyer said.

“It also affords the employee a say-so in how their money is invested going forward,” Dyer said. “Which is the way it should have always been to start with, but that is one of the main goals that I was hoping to achieve.”

Once a year, employees can meet with representatives about their investments and retirement options as well, Morrison said.

“What the TCRS representative said is that the employees that are currently here are going to be invested just like how they are now. So if they are at three years, they would remain at three years,” Morrison said. “If they are at five years, they will remain at five years. Whatever the current level of service is it will roll over into the new plan as well as being able to roll over the money they currently have in their retirement.”

The council also approved offering a state-regulated 457(b) plan as well. The 457(b) plan allows workers to draw from it once they reach termination in service.

Both Putnam County and Cookeville shifted to the state-regulated retirement plans, Morrison said.