HHC Employees Should Eye Alternative Options

Since 2006, the Deferred Compensation 457(b) and 401(k) Plans (Deferred Comp) of the City of New York have been available to employees of the Health and Hospitals Corporation of the City of New York (HHC). Asset-allocation investing is available through the plans’ various Pre-Ar­ranged Portfolios (Target Date Funds). Deferred Comp investors pay 0.4 percent, or $400 per year, for each $100,000 under management.

Notwithstanding this de minimis cost, the participation rate among HHC workers is pitifully low because long before 2006, when Deferred Comp was first made available to HHC employees, they were investing in an expensive Prudential Life Insurance Company Tax Deferred Annuity Plan (TDA). How expensive? Prudential sales reps “advise” the HHC worker to invest in the asset-allocation program known as “GoalMaker.”