St. Vrain Valley School District, Longmont, Colo., closed its 403(b) and 457 plans to new participants on July 1, confirmed Tony Whiteley, district accountant and plan administrator. New employees will be placed into the state-run PERAPlus 401(k) and 457(b) plans, he said.
The school district's DC plans, which have a combined $34 million in assets, have five service providers. An RFP was issued in February to potentially consolidate the number of providers to one or two, Mr. Whiteley said in a telephone interview. The retirement committee instead elected to close the plans to provide lower fees and a simpler investment menu.
“We didn't have much of an oversight of the (fees and offerings) of the 403(b) plan,” said Mr. Whiteley, who took over as plan administrator about two years ago,.
The PERAPlus plans, administered by the Colorado Public Employees' Retirement Association, Denver, have about $3 billion in assets and feature risk-based and age-based investment options for participants. Mr. Whiteley said part of the problem the district hopes to solve by the move to the state plan was “analysis paralysis,” where there were too many options and employees did not know what to do.
Existing participants can continue to contribute to the existing plans with the same five providers. All new participants can only contribute to the PERAPlus plans, which have always been available to employees. Rollovers from the current plans to PERAPlus are prohibited, Mr. Whiteley said.
Jeffrey Cable, DC plan manager for Colorado PERA, referred questions to the retirement system's media relations office. Spokeswoman Katie Kaufmanis was not available.
