MARKELL WORKS ON PROMISES
State workers to get new investment plan
The News Journal
By Nancy Charron
September 6, 1999
Political newcomer Jack Markell, who unseated incumbent state treasurer Janet Rzewnicki in last year's election, came into office on a pile of promises.
The 38-year Democrat is in the process of keeping them, including setting up an improved deferred compensation program to put more money in the investment accounts of the state's 15,000 workers.
Starting Wednesday, a team of investment advisors will fan out to state offices to brief workers and help them decide how the new plan can best benefit them.
The change takes effect Sept. 30, when $160 million in employee investments will transfer to the new plan.
The money will be supervised by Fidelity Investments, the world's largest privately held mutual-fund company and the nation's largest provider of 401(k) investment plans.
Markell, a financial officer for several high-tech firms before turning to politics, latched on early in last year's campaign to the poor quality of the employees' fund.
"Investment options weren't particularly good," Markell said.
Investors received statements from each investment instead of a consolidated statement. They had no Internet access to accounts, making it cumbersome to change investments or to even change the amount being deducted from paychecks for investing.
The quality of the program was reflected in the participation rate. Only about 20 percent of employees held active accounts compared with 40 percent nationally among public-sector employees.
"The investments weren't good, and the statement procedure wasn't good," said Robert Montgomery, deputy state fire marshal. "I didn't feel I would have enough control in the state plan." He opted for a commercial investment company instead.
Markell held six meetings with state workers after the elections, and 250 people attended.
"We essentially asked employees what they wanted," Markell said. "They wanted it all."
Reaction to the changes has been good.
"You were greatly limited in your investment fund options, and that's going to be greatly increased," said Maurice L. Tippett, manager of computer and application support for the Department of Health and Social Services.
Markell said: "We'll also have plenty of investment education," something not available in the past.
The financial advice won't be just for state workers. Markell is planning a free seminar called the Everywoman's Money Conference for Nov. 13 at University of Delaware's Clayton Hall in Newark.
It will address unique financial issues facing women and will be financed through more than $100,000 in corporate and other contributions.
Markell picked up the idea from a program run by Oregon's state treasurer and his own research, which showed many women don't participate in family investment decisions.
Women require a different investment strategy, he said. "The money has to last them longer because they live longer than men."
Gov. Tom Carper also has given Markell an opportunity to spread his financial wings by naming him head of the state's college savings plan.
Residents can invest in the tax-deferred program to send the children to school anywhere. When the money is withdrawn to pay for college, it is taxed at the student's rate.
Markell, who has two children enrolled in the plan, will try to boost the disappointing participation rate-$44 million in assets and only 550 households enrolled.
"Our real charge is to get the word out about the program," Markell said. "But everyone should get their own counsel about investing."
Another Markell campaign promise was to increase the number of banking programs in the schools that provide bank accounts for students.
He has been talking to banks and school officials about the expansion, and five schools are starting programs this year. Last spring, Markell organized 100 speakers to visit schools to talk to children about saving money.
Two workshops are scheduled this fall for elementary-school teachers about installing programs. Getting teachers interested in the programs, which includes some classroom instruction, is the key, he said.
Another Markell campaign promise was to provide financial advice to local governments, many of which are too small to afford much financial help.
In conjunction with the University of Delaware, Markell conducted a class with local governments to improve their investment decision-making. He plans seminars on budgeting this fall.
During the campaign, Markell suggested the treasurer's office could be scaled back, giving the remnants of overseeing state employee benefits programs to the Office of State Personnel.
The move was accomplished this summer as part of a 16 percent budget cut proposed by Markell for his department, one of the smallest in state government.
Though Markell is marked as a political comer by Democrats, he remains committed to serving out his four-year term rather than running for higher office next year.
"This is a position from which I can do good things," Markell said. "I need to do a good job here."
When Markell completes all the things on his current "to do" list, including improving the computerization, of the treasurer's office, he said, he'll stay busy.
"This job will be whatever I make of it," he said. "I'm not the kind of person to run out of things to do."
