A West Seneca financial planning firm and a former School Board member have criticized district changes in an employee retirement savings plan.
The district has had 18 firms offering investment tools in which employees could invest, said Treasurer Brian L. Schulz. But the federal government is tightening the regulations, requiring school districts to have a written plan and an administrator to direct the plan by Jan. 1.
The School Board appointed a single company as the independent third-party administrator for its 403(b) plan and another firm to offer investment programs, Schulz said.
The 403(b) plan is an employee tax-deferred savings plan that provides employees enhanced retirement benefits. Similar to a 401(k) plan, it is voluntary, and employees put their pretax dollars into the plan. District employees have almost $3 million invested through the plan.
Many area school districts selected an administrator but allowed employees to keep investing their money through different firms.
But in West Seneca, the 18 firms that have dealt with school district employees will not be able to invest any of their new money in January.
"In the past, we've always looked out for employees and given them choices," said James Asztalos, a former board president whose wife teaches in the district.
He said it was "irresponsible" that the district change the plan so that employees cannot invest their money with the financial planners whom they trust.
Asztalos, who left the board in June, asked the board to reconsider its action.
Patrick Sgroi said his firm, Sgroi Financial, has been working in the 403(b) area for 36 years. He recommended another firm be used as an administrator and that employees be allowed to invest their money with different firms.
"If the union got an attorney and pushed this, you would lose," Sgroi said.
Schulz said 478 of about 1,900 district employees invest in the 403(b) plan. Of those, 169 are with Sgroi. They can keep their existing funds with their current plans, but after Jan. 1, new funds must go to the new company.
Schulz said several companies submitted bids to be the third-party administrator, and one consortium, Dopkins Wealth Mangement and BPA Harbridge, offered to administer the plan and provide the investments.
The cost to the district was $1,250 to write the investment plan. Other firms would charge the district as much as $3,000 to write the plan, $3,995 to set up the plan and nearly $15,000 in yearly maintenance fees, he said.
Schulz said Dopkins shifts the maintenance costs to employees, which he said is where it belongs.
"We minimized the cost for the taxpayers," he said. "It has what we saw to be the least impact on our taxpayers."