25A - DEFERRED COMP SRVS - Laserfiche WebLink

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