Orange County Deferred Compensation 457 Plan, Orlando, Fla., hired Vanguard and Dimensional Fund Advisors to provide investment options for the $132 billion participant-directed fund, said Jim Moye, chief deputy comptroller. The hirings are pending contract negotiations.
Vanguard will provide 20 investment choices and Dimensional Fund Advisors, seven. Vanguard will also provide record-keeping services.
Plan officials later this year expect to search for other investment providers, possibly to provide seven other investment options, Mr. Moye said. The plan might not issue an RFP for the search and instead might survey plan participants on funds they would like, he said. Plan officials and the plans consultant, Bogdahn Group, would evaluate the proposed funds and other possible fund choices, he said.
Except for any participant accounts subject to an early withdrawal penalty fee, Nationwide Retirement Solutions, which manages $67 million for the plan; ING Financial Services, $53 million; and ICMA, $13 million, will be terminated in late January when the transition to Vanguard is expected to occur, he said.
Nationwide has $14 million and ING, $18 million, respectively, of the assets managed for the plan in fixed-rate contracts subject to such a penalty, which winds down over five and 10 years, respectively, Mr. Moye said. ICMA has no such encumbered accounts, he added.
In all, Nationwide, ING and ICMA now offer more than 200 investment options, Mr. Moye said. Participants will be mapped into Vanguard target-date funds, unless they specify transfers into particular Vanguard or DFA funds.
Nationwide, ING and ICMA also provided record-keeping services, which will be consolidated under the new structure with Vanguard.
The plan made the changes to reduce fees to participants and improve investment choices, Mr. Moye said.
Bogdahn Group assisted.