The Franklin City Finance Committee voted Oct. 28 to direct the director of finance and treasurer to implement administrative changes to the citys pension plans after a presentation by Principal Financial.

Principals relationship manager, Daniel (Principal), told the committee the changes are administrative rather than benefit changes: they will move the defined‑benefit plan into lower‑cost share classes and disclose fees as a full-plan asset deduction so the statement of investment returns will not be offset by revenue‑sharing fees. Daniel said the total cost for record keeping, investment advisory and actuarial services is about $73,000 today and that the change will leave that dollar amount in the plan but change how it appears on participant statements.

"What we're doing is we're just doing a shift from it," Daniel said. "That 73,000 will remain the same. It will just be a fully deducted fee out of plan assets." He added the change is intended to let the city and plan administrators show the plan's true investment return without investment fees coming out of the performance line.

On the money‑purchase (defined contribution) plan, Principal recommended replacing the plan's existing money‑market and guaranteed‑interest account options with Principals fixed‑income guaranteed option (GIC). Daniel said the GIC currently yields about 4.7%, resets every six months and will drop to roughly 4.65% at the next reset in January. He told the committee the GIC is more flexible for participants than the plan's current guaranteed‑interest account, which functions like a two‑year CD and prevents transfers during the GIC period.

Principal also said the record‑keeping fee for the money‑purchase plan is currently 0.37% on roughly $10 million of assets (about $37,000 a year) and that the changes would reduce that fee by roughly 10 basis points (about $10,000 in annual plan‑level savings), while giving participants a higher short‑term yield option.

Committee members moved and seconded the recommendation; the committee approved the package by voice vote. The motion directs staff to implement the administrative fee‑disclosure change for the defined‑benefit plan and to replace the money‑market/guaranteed‑interest options with the Principal fixed‑income guaranteed option in the money‑purchase plan.

Why it matters: The shift changes how fees appear in plan accounting and participant statements but does not change benefit levels or require additional city levy dollars. Participants and retirees will see fees taken as plan asset deductions rather than as revenue‑sharing offsets inside investment returns, and participants in the money‑purchase plan will have a new, more flexible fixed‑income option with a higher quoted yield.

Implementation and next steps: The committee's direction requires administrative steps by the director of finance and plan record‑keepers; staff said they will work with Principal and return to the committee with implementation details. The change to the money‑purchase plan will move participants out of two existing cash/guaranteed options into the GIC when their current guaranteed periods end, with automatic transfer rules outlined by Principal.