REPORT TO COUNCIL
SUBJECT
Title
Action to approve an agreement with Nationwide Retirement Solutions, Inc. as the City's Deferred Compensation Plan administration services provider
Report
BACKGROUND
The City currently provides a Deferred Compensation Plan ("Plan"), qualified under Section 457(b) of the Internal Revenue Code, to its employees. The Plan is a voluntary defined contribution savings plan. The City does not provide matching contributions to the Plan. The purpose of the Plan is to encourage employees to save additional funds on a tax-qualified basis to be available for their post-employment use. Approximately 715 current employees and 435 former employees participate in the City's Plan with aggregated assets of over $155 million.
Massachusetts Mutual Life Insurance Company ("MassMutual"), acting as agent for Hartford Life Insurance Company, has been the City's Plan provider since 1980. The Plan is overseen by the City Manager as the Plan Administrator ("Administrator"). The Administrator has utilized a Deferred Compensation Plan Committee ("Committee") made up of five City employees to provide fiduciary oversight and consider investment decisions based on information from the Plan's administration services provider. The composition of the Committee has historically included the Director of Finance as the chair and four representatives from various employee groups.
California Constitution Article XVI, Section 17 ("Constitution") contains provisions governing the fiduciary duties for the administration of public pension and retirement systems. Government Code Section 53609 states that deferred compensation plans are considered "public pension or retirement funds" for the purposes of the Constitution.
The Constitution provides that retirement boards of public pension and retirement systems (including deferred compensation plans) have a duty to invest the assets of the plan, administer the plan, act for the exclusive purpose of ...
Click here for full text