How a po­lice union nabbed flee­ing funds

An of­fi­cers’ as­so­ci­a­tion had many chal­lenges — the first one was getting re­tirees to stop los­ing tax-ex­empt money.

Employee Benefit News - - CONTENTS - By Phil Al­bi­nus

Chris Mon­a­han, a cap­tain for the New York Po­lice Depart­ment and se­nior of­fi­cial of the New York Po­lice Depart­ment’s Lieu­tenants Benev­o­lent As­so­ci­a­tion, had a prob­lem. The or­ga­ni­za­tion’s an­nu­ity was shrink­ing, in large part be­cause re­tir­ing po­lice lieu­tenants were be­ing per­suaded by re­tire­ment fund man­agers to move their lump-sum re­tire­ment funds from the union’s tax-ex­empt an­nu­ity ac­count into other types of fi­nan­cial ve­hi­cles. “We found that our mem­bers re­tired early and had money in a 457 ac­count, a de­fined ben­e­fit plan, and then the sharks came in and said, ‘ we want your money,’ said Mon­a­han, re­fer­ring to ad­vis­ers who ad­vised the of­fi­cers to in­vest in other in­vest­ment plans. “And they cost them a lot of money. We found that they lost money,” said Mon­a­han, speak­ing re­cently at the NAPA 401(k) Sum­mit in Nashville. Although he works in a union that en­gages in col­lec­tive bar­gain­ing, Mon­a­han be­lieves he has a re­spon­si­bil­ity to the 5,000 ac­tive-duty and re­tired union mem­bers who served as NYPD lieu­tenants and cap­tains. “The re­tire­ment they thought they were go­ing to have, they didn’t have, and they had to go back to work,” he said. “We felt there was a need for them and for us as a union. [We thought] ‘ we need to make sure you are fi­nan­cially sta­ble.’” So the as­so­ci­a­tion turned to Bar­bara Delaney, prin­ci­pal of re­tire­ment ad­viser Ston­eStreet Re­nais­sance, who with her team was able to re­store $125 mil­lion back into the fund. The key, Mon­a­han said, was one-on-one ed­u­ca­tion ses­sions with union mem­bers. For one fi­nan­cial well­ness sem­i­nar, the union held a raf­fle to at­tract par­tic­i­pants: $2,000 to pay for one month’s rent or mort­gage. The group also held sem­i­nars for par­ents of stu­dents about to en­ter col­lege. “It wasn’t about pay­ing for col­lege but about ap­ply­ing for grants, FISA forms and schol­ar­ships,” Mon­a­han said. “They asked a rep from New York State to come down and spend four hours at the po­lice academy, and they had 500 mem­bers in at­ten­dance to hear about getting a kid through col­lege.” Ac­cord­ing to Delaney, who also spoke at the con­fer­ence, the union pre­ferred one-on-one ses­sions with fi­nan­cial ad­vis­ers in­stead of in­ter­act­ing solely with apps and web por­tals. “We saw the well­ness wave com­ing, and this is why we moved to a one-on-one ba­sis. We needed to ad­dress em­ployee needs,” she said, adding that fi­nan­cial ad­vis­ers need to staff specif­i­cally for fi­nan­cial well­ness. Mon­a­han noted that the trust fac­tor drives the re­la­tion­ship be­tween the fi­nan­cial well­ness ad­viser and the em­ployee. “What we find in one-on-one [ses­sions] is that ev­ery­one is dif­fer­ent. Maybe your wife works, maybe they don’t work,” he said. “How many as­sets do you have? Any out­side stocks? Can we put that all into a com­puter sys­tem? Maybe one day we’ll be there. But right now, we find that sit­ting down, oneon-one, works the best.”

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