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REQUEST FOR <br />COUNCIL ACTION <br />CITY COUNCIL MEETING DATE: <br />OCTOBER 4, 2016 <br />TITLE: <br />AGREEMENT FOR 457 DEFERRED <br />COMPENSATION SERVICES AND <br />AUTHORIZATION TO ISSUE A <br />REQUEST FOR PROPOSAL <br />(STRATEGIC PLAN NO. 7,4) <br />CITY MANAGE t <br />RECOMMENDED ACTION <br />CLERK OF COUNCIL USE ONLY: <br />0=160210, <br />❑ As Recommended <br />❑ As Amended <br />❑ Ordinance onIs`Reading <br />❑ Ordinance on 2n'Reading <br />❑ Implementing Resolution <br />❑ Set Public Hearing For <br />CONTINUED TO <br />FILE NUMBER <br />1. Authorize the City Manager and Clerk of the Council to execute an agreement with <br />Empower, formerly known as Great -West Financial, for deferred compensation services <br />for an initial 10 -month period expiring July 31, 2017, with a provision for a two -month <br />extension expiring September 30, 2017, exercisable by the City Manager and the City <br />Attorney, subject to non - substantive changes approved by the City Manager and City <br />Attorney. <br />2. Authorize staff to issue a Request for Proposal for Deferred Compensation Services. <br />DISCUSSION <br />The City of Santa Ana's full -time employee 457 Deferred Compensation Plan (Plan) was <br />established in 1973, with the adoption of City Resolution 7 -21, along with a corresponding US <br />Internal Revenue Service approval. The Plan is a voluntary deferral program that is separate and <br />distinct from the CalPERS pension system. Specifically, the establishment of this Plan, pursuant <br />to regulations in §457 of the Internal Revenue Code, provides participants an opportunity to <br />supplement their CalPERS retirement by allowing them to defer a portion of their current earnings <br />and associated taxes until retirement or separation. <br />The Plan currently is administered through the Finance & Management Services Agency and <br />maintains plan assets approximating $100.3 million with 1,176 participants. Empower, the Plan <br />Sponsor, has been engaged to provide administrative, recordkeeping and communication <br />services for the Plan. The Plan offers employees 36 highly diversified investment options <br />including, but not limited to: mutual funds, bond funds and fixed asset funds. <br />During 2014, the City, in order to enhance employees' investment experience and in conjunction <br />with its deferred compensation consultant Benefit Financial Services Group, LLC [BFSG], <br />negotiated with Empower to change the plan structure which enabled participants greater fund <br />transparency, better access, and varied investment options. The negotiated agreement allowed <br />for greater expansion of fund selection and flexibility than provided under the former annuity - <br />2513-1 <br />