City of Dunwoody

To attract and retain top employees is a high priority for the City of Dunwoody, until 2008 an unincorporated suburban section of Atlanta. Its retirement system is a crucial means to that end.

In fact, says City Manager Eric Linton, due to the competitive nature of government retirement plans, especially for those employed in public safety—78 of the city’s 110 employees are in that field—having a generous, quality plan is key “to remain competitive with surrounding jurisdictions.”

The city offers a 401(a) plan, an optional 457(b) plan and a Social Security replacement plan, as city workers are exempt from Social Security, notes Richard Platto, finance director for the city. Workers may join the 401(a) and 457(b) from their first day at work, and those as young as 18 are eligible. The city vests its contributions immediately.

Platto says the city lowered the eligibility age from 21 so it could include a new hire in public safety. It also hoped that step might encourage more young people to apply for municipal jobs. Though he says it is too early to tell if that hope will be fulfilled, he is optimistic that the city will gain in hiring.

Either way, the combination of these three factors—immediate eligibility, eligibility at age 18 and immediate vesting—makes the plan about as open and available as a plan can be.

Dunwoody contributes 11% to its employees’ 401(a) accounts regardless of how much the individual defers, and it matches 50% of contributions to the 457(b) up to the first 8%. The 11% contribution was recently raised from 10% and is “one of the strings we can pull in terms of total compensation,” Linton says. “We try to keep our plan very dynamic.”

The investment menu is broad. Besides the default target-date series, Platto says, the plan offers index and actively managed funds that cover small, mid and large cap and foreign and specialty stocks. A balanced fund, funds that cover both intermediate- and high-yield bonds, and a stable value option round out the options.

The sponsor meets quarterly with the plan’s financial adviser, OneDigital, “to ensure that the funds we offer provide above average performance at a reasonable price,” Platto says. Employees may meet with a financial adviser or financial wellness coach. “The City strives to educate all employees about the importance of saving for retirement,” Platto says. “It encourages everyone to participate in the plans as much as financially possible.”

Participation stands at 91% without automatic enrollment, but the city is working with OneDigital to implement the feature “likely for next year,” he says.

Linton notes that making such enhancements is essential, both for high participation and to stay up to date.

To learn what the plan might need, the city often turns to its employees. “We continually seek out employee feedback on ways we can improve the plan and the investment choices offered,” Platto says.

—Paul Mulholland