REPORT TO COUNCIL
SUBJECT
Title
Action on an Agreement for Professional Services with Hyas Group, LLC to provide consulting services related to the Deferred Compensation Plan
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 that is separate and distinct from the CalPERS pension system. 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.
As stated in Resolution No. 12-7948, the Plan is overseen by the City Manager as the Plan Administrator ("Administrator"). Historically, the City has used a committee to advise on the administration services provider, along with other milestones relative to this effort. 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 providing benefits to participants and beneficiaries, and engage in a prudent process for making all decisions related to the operation of the plan, including decisions related to the plan's investments and related services. Government Code Sections 53601, et seq., describes the types of investments that can be made by a deferred compe...
Click here for full text