REPORT TO COUNCIL
SUBJECT
Title
Action on Amendment No. 1 to the Agreement for Professional Services with Hyas Group, LLC to provide consulting services related to the City's Deferred Compensation Plan [Council Pillar: Enhance Community Engagement and Transparency]
Report
BACKGROUND
The City 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 retirement savings plan. The purpose of the Plan is to provide employees an option to save additional funds on a tax-qualified basis to be available for their post-employment use. Approximately 1300 current and former employees participate in the Plan with aggregated assets of approximately $160 million.
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 compensation plan, which includes the investments offered by the City's Administration Services provider, Nationwide Retirement Solutions ("Nationwide").
The City Manager is designated as the Plan Administrator ("Administrator") and the Administrator utilizes a Deferred Compensation Plan Committee ("Commit...
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