FREQUENTLY ASKED QUESTIONS



Frequently Asked Questions

Deferred Compensation Request for Proposal Process

1. I am currently with Nationwide. What, if anything, should I do?

No action is required. There will be a transition period of approximately 4 months after the Board of Supervisors approves the recommendation. During this transition period, the County will provide you with additional information about Hartford’s new fund lineup that will take effect in August 2009. There will also be informational sessions for employees about changes to the deferred compensation plan. During the transition period, Nationwide participants should continue to contact Nationwide with questions regarding their accounts or if they wish to make fund changes up until the August 2009 effective date.

On the effective date of the transition in August 2009, your current Nationwide funds will be automatically “mapped” to Hartford’s funds. “Mapping” is a process of determining what new funds are most like your current Nationwide funds. For example, if an individual has divided investments between a fixed account, an international fund and large cap growth fund, the same percentage of investment for each of these funds will be transferred to similar fixed, international and large cap funds in the new line-up. Hartford will provide a summary of what currents funds will be mapped to new funds.

If you have additional questions, you can contact:

Jim Laffoon, Nationwide Representative, 650-787-2315, laffooj@

Ron Salvemini, Nationwide Representative, 510-502-6184, salvemr@

2. I am currently with Hartford. What, if anything, should I do?

No action is required. There will be a transition period of approximately 4 months after the Board of Supervisors approves the recommendation. During this transition period, the County will provide you with additional information about Hartford’s new fund lineup that will take effect in August 2009. There will also be informational sessions for employees about changes to the deferred compensation plan.

On the effective date of the transition in August 2009, your current Hartford funds will be automatically “mapped” to Hartford’s new funds, as described above. Hartford will provide a summary of what currents funds will be mapped to new funds.

If you have additional questions, please contact the County’s Hartford representative, Steve Davidson, at 888-593-0259, or email: steve.davidson@

3. How can I get more information about these changes?

First, you may attend any of the on-site information sessions that will be offered. These sessions will summarize new funds, what specific actions participants may take regarding changes to their funds and answer other general questions. Second, you will be able to schedule a personal appointment with Hartford representatives. Schedules for these meetings will be communicated to all employees and retirees. In addition, this information will be posted on our website.

If you have additional questions, please contact the County’s Hartford representative, Steve Davidson, at 888-593-0259, or email: steve.davidson@

4. How did the Deferred Compensation Committee make its decision in choosing Hartford?

The Deferred Compensation Committee rated each proposal based on the following primary RFP criteria: fund performance, fund expenses and employee education. Below are the ratings the committee gave to each proposal:

| |Fund Performance* |Fund Expenses |Employee Education |

|Hartford |1st |2nd |1st |

|Prudential |2nd |1st |2nd |

|ICMA – RC |3rd |3rd |3rd |

|Nationwide |4th |4th |4th |

*Funds in which the majority of participants and assets are located (large cap and fixed account) were more heavily weighted by the committee to ensure that maximum benefits are provided to those investment categories that have the largest assets / most participants.

Based on the above ratings, the Committee unanimously agreed that The Hartford’s proposal was the strongest among the five finalists. Due to major financial and employee educational gains offered by Hartford through the RFP process, the Committee believed it would not be in the best interests to maintain a dual provider model for deferred compensation.

5. I currently have a loan. How is that going to be affected by this change?

Loans will be automatically transferred from Nationwide to Hartford. Current Hartford loans will be continued as they are presently structured. There will be no change in loan repayments or timing of payments whether the loan is with Nationwide or Hartford.

6. When can I access Hartford’s new customized website and what information will be available?

We will announce when the site is available and its address as soon as we are ready to finalize the site information. We will also provide a summary of all the new features that will be available.

7. I like the funds I currently have and, because of the recent decline in the stock market, I am worried that this change will result in me losing money by moving my assets to other funds. How will I avoid losing money during this process?

The recent market decline has impacted all funds, both those which are currently offered and those which are newly being proposed. As a result, participants may be leaving funds that are lower but they will also be “mapped” to other funds that have similar characteristics and have been similarly impacted by the decline. However, the new funds are likely to have a superior upside when the market begins to recover. It is also important to remember that 20 of the current 32 Hartford funds are being retained so there will be no disruption for participants with investments in those funds.

8. I am a retiree who is receiving a specific amount of money per month or per quarter. What will happen to my payments after August 1?

You will continue to receive payments on schedule. Nationwide and Hartford will individually review all current payment schedules and will coordinate, during the transition, to assure that the payments continue to be sent to retirees without any interruption or change.

9. I really like the current representative I meet with. He knows me and my investments. Why does this need to change?

We recognize that long-term relationships have important value but it is our responsibility to assure that the net return (fund performance minus fees) that participants receive is the best it can be. We also have to assure that excellent services, especially in education, investment guidance and advice as well as individual counseling are provided to help participants plan their retirement. We will regularly meet with the on-site representatives to assure that they are performing their responsibilities and we will regularly invite your feedback on how well all Hartford services are being provided.

10. If I have all of my money in the Hartford General Account will there be any impact on me as a result of this change?

No. Your funds will remain within the General Account and the rate of 4.25% will be applied to your account upon completion of the transition. You will not need to take any action during this transition unless you wish to change your contributions or your asset allocation.

11. What is Financial Soundings and when can I take advantage of it?

Financial Soundings is a new service offered by the plan in conjunction with the Hartford contract that will provide all employees with an annual financial assessment and guidance on retirement planning. We expect the first annual assessment to be mailed to all employees in January 2010.

12. What is Woodbury Financial Services and when can I take advantage of it?

Woodbury Financial Services is a new resource that will be dedicated to help San Mateo County employees with general financial planning. We are currently working on the details of this service and expect that it will be available beginning in early 2010.

13. I’ve read that Hartford is not doing well financially. How can I be assured that my money is safe with Hartford?

We know that there have been a number of articles recently regarding Hartford’s financial status. The committee and our consultant firm reviewed several documents detailing Hartford’s 2008 performance and their current financial status. As of December 31,2008, Hartford’s statutory surplus exceeded $11 billion and they held more than $13 billion in cash, short-term investments and treasuries. Hartford also received a capaital infusion from Allianz in October 2008 totaling $2.5 billion. After our review, we concluded that Hartford, in addition to having the strongest proposal, is also well capitalized to address the current market issues we are facing. We encourage you to take a look as some of the financial detail we received. It is located at co.sanmateo.ca.us/hr/benefits (click on “Deferred Compensation” and then “Deferred Compensation RFP / Plan Improvements.”)

If you would like to review more detail regarding The Hartford’s financial position, you may visit their investor relations web site at .

14. Can I take my money out of the County’s deferred compensation plan or roll it over to an IRA?

The general rule is that employees are not eligible to either take a withdrawal of their Deferred Compensation assets or roll them over into an IRA until they separate from County service (i.e. terminating employment or retiring). The only exceptions to this rule are: small balance account withdrawals, withdrawals for unforeseeable emergencies, and loans of Deferred Compensation assets.

Small Balance Account Withdrawals

Employees are eligible to initiate a one-time disbursement of their deferred compensation account if their account balance is $5,000 or less and they did not contribute to the plan for at least two years.

Unforeseeable Emergency

Employees may be eligible to take a distribution from their deferred compensation account if they qualify for a financial hardship withdrawal. Hardship withdrawals are generally limited to the following circumstances: unexpected illness/medical expenses, imminent foreclosure/eviction, or funeral expenses. For more information, contact:

Hartford’s Customer Service Center: 800-528-9009

Nationwide’s Customer Service Center: 800-769-4457

Loans

Employees may borrow money from their deferred compensation account to meet unforeseen expenses. For more information about deferred compensation loans, visit, co.sanmateo.ca.us/hr/deferredcomp (click on “loan information”). For general questions about taking out a loan, including tax and financial implications, please contact your local deferred compensation representative:

Steve Davidson, Hartford Representative, 888-593-0259, steve.davidson@

Jim Laffoon, Nationwide Representative, 650-787-2315, laffooj@

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