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REQUEST FOR <br />COUNCIL ACTION <br />CITY COUNCIL MEETING DATE: <br />DECEMBER 6, 2010 <br />TITLE: <br />AGREEMENT WITH ICMA-RC FOR <br />DEFERRED COMPENSATION SERVICES <br />CITY MANAGER <br />RECOMMENDED ACTION <br />CLERK OF COUNCIL USE ONLY: <br />APPROVED <br />? As Recommended <br />? As Amended <br />? Ordinance on 1st Reading <br />? Ordinance on 2nd Reading <br />? Implementing Resolution <br />? Set Public Hearing For_ <br />CONTINUED TO <br />FILE NUMBER <br />Authorize the City Manager and the Clerk of the Council to execute the attached agreement with <br />ICMA-RC for deferred compensation services for a period of 5 years with provisions for two one-year <br />extensions, subject to non-substantive changes approved by the City Manager and City Attorney. <br />DISCUSSION <br />The City of Santa Ana's full-time employee 457 Deferred Compensation Plan (Plan) was established <br />in 1973, with the adoption of City Resolution 73-21. The 457 Plan is a voluntary deferral program that <br />is separate and distinct from the CalPERS pension system. The establishment of this deferred <br />compensation plan, pursuant to regulations in §457 of the Internal Revenue Code, provides <br />participants the opportunity of supplementing their CalPERS retirement by allowing them to defer a <br />portion of their current earnings and associated taxes until retirement or separation. <br />The Plan is administered through the Finance & Management Services Agency. Currently, the Plan <br />has approximately $95.7 million in participant assets, with 1,388 participants. The Plan fund portfolio <br />maintains 30 different investment options including mutual fund, bond fund and fixed asset funds. In <br />2005, the City retained the services of Benefit Funding Services Group (BFSG), to assist in the <br />review of the plan structure including investments and service levels. BFSG is an independent public <br />and private sector retirement plan fiduciary consulting firm. In 2006-07, with the assistance of BFSG, <br />a Request for Information (RFI), was released to assess the competitiveness of the City's existing <br />Plan. Based on the survey, the City determined that there could be a potential gain for the <br />participants as well as operational savings from a new deferred compensation plan agreement. <br />On February 9, 2010, the City issued a Request for Proposal (RFP) for administrative, recordkeeping, <br />communication, and investment management services of the City's 457 Deferred Compensation Plan <br />to 13 firms. Seven proposals were received. <br />Each vendor's response was evaluated based on the committee's criteria of vendor's proven <br />commitment to the 457 plan marketplace, state-of-the-art technology and premium recordkeeping <br />platform, investment flexibility and performance, strong compliance support, maintain or reduce <br />25L-1