Merrillville's efforts to find a lower-cost option for an employee retirement plan are drawing criticism from the town's clerk-treasurer. The town council voted six-to-one Tuesday to switch from Nationwide to True Wealth as its 457 plan representative.
Interim Town Manager Michael Griffin said the switch will let the town see immediate improvements. "The meaningful difference is in the fees," Griffin explained. "You're approaching near two percent on Nationwide. You'll be at 0.8 for average fees for the True Wealth."
Additionally, Griffin said True Wealth would be able to meet with employees in-person, not just over the phone.
But Clerk-Treasurer Eric January felt True Wealth's investment options weren't any better. "They're basically garbage," January told council members. "They're retail investments. People are not given an opportunity to invest in real estate. They're not given an opportunity to invest in franchises. They're limited to what Wall Street wants to offer them."
January added that retail investments are "not what rich people do," citing the Bush family as an example. He also suggested that it may be worth paying higher fees for a larger return on investment.
"If stocks are so profitable, why do you have to sell them to make money? I didn't have to sell my business to make money. You just operate the business," January said.
But Griffin argued that approving the switch didn't mean the town couldn't keep exploring other options. "There's nothing that would stop you from formulating a plan that would allow direct investments where workers could get equities," Griffin said. "I would not have the ken or the experience or the risk tolerance to offer those to our workforce, but I have no objections to having you have a 457 plan that allows for that."
Council President Rick Bella noted that the choice of 457 plan representative was just one tool in employees' investment options.
