HomeMy WebLinkAboutItem 16 - Amend Agreement for Plan and Investment Advisory Services Pertaining to the 457 Deferred Compensation PlanFinance and Management Services
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Item # 16
City of Santa Ana
20 Civic Center Plaza, Santa Ana, CA 92701
Staff Report
August 29, 2023
TOPIC: Amend Agreement for Plan and Investment Advisory Services Pertaining to the
457 Deferred Compensation Plan
AGENDA TITLE
Amend Agreement with Benefit Financial Services Group, LLC (BFSG) for Plan and
Investment Advisory Services Pertaining to the 457 Deferred Compensation Plan to Add
Participant Planning and Consulting Services at No Additional Cost
RECOMMENDED ACTION
Authorize the City Manager to execute the first amendment to the agreement with Benefit
Financial Services Group, LLC to provide Participant Planning and Consulting Services
at no additional cost, subject to non -substantive changes approved by the City Manager
and City Attorney.
DISCUSSION
On November 21, 2018, at the conclusion of a competitive bidding process, the City
Council awarded a three-year agreement, with the provision for two-year contract
extensions, to BFSG to provide plan and investment advisory services pertaining to the
457 Deferred Compensation Plan. The City has exercised the contract extensions and
the current contract expires on December 31, 2024. City staff anticipates releasing an
RFP for similar services before the existing agreement expires.
The City of Santa Ana offers full-time employees a 457 Deferred Compensation Plan
("plan" or "457 plan"), which was established in 1973, with the adoption of City
Resolution 7-21, along with a corresponding US Internal Revenue Service approval.
The 457 Deferred Compensation Plan is a voluntary supplemental retirement savings
program that allows employees to make contributions on a pre-tax basis. Each calendar
year, employees can choose to contribute to the Plan up to an amount established by
the Internal Revenue Service. The City does not contribute any funds on the employees'
behalf.
BFSG has proven to be reliable and highly knowledgeable in assisting with 457 plan
administration. As of March 31, 2023, the Plan holds $132.5 million in Plan Assets for
1,350 participants. BFSG has provided assistance in plan administration, investment
advisory, and communication services during the term of the contract. BFSG is
Amend Agreement with Benefit Financial Services Group
August 29, 2023
Page 2
prepared to offer Financial Planning and Consulting services to plan participants at no
additional cost. If the recommendation is approved, plan participants would have the
option to elect to obtain such services from BFSG. As a registered investment advisor,
BFSG is an independent fiduciary firm that is legally bound to have a fundamental
obligation to act in the best interests of their clients and to provide investment advice in
their client's best interest. These additional services, if elected by plan participants,
could be an added benefit when planning for retirement and investment decisions. For
these reasons, staff recommends amending the agreement with BFSG to add
Participant Planning and Consulting Services.
FISCAL IMPACT
There is no fiscal impact associated with this action.
EXHIBIT(S)
1. First Amendment to Agreement
2. BFSG Financial Planning and Consulting Agreement
Submitted By: Kathryn Downs, FMSA Executive Director
Approved By: Kristine Ridge, City Manager
EXHIBIT 1
FIRST AMENDMENT TO AGREEMENT TO PROVIDE INDEPENDENT
INVESTMENT ADVISORY SERVICES PERTAINING TO THE CITY'S
457 DEFERRED COMPENSATION PLAN
THIS FIRST AMENDMENT to the above -referenced agreement is entered into on August 29,
2023, by and between Benefit Financial Services Group, LLC, a California Limited Liability
Corporation and SEC registered investment advisor and wholly -owned, indirect subsidiary of
Focus Financial Partners (`BFSG" or "Consultant") and the City of Santa Ana, a charter city and
municipal corporation organized and existing under the Constitution and laws of the State of
California ("City").
RECITALS
A. The parties entered into Agreement No. A-2019-037, dated February 19, 2019, by which
Consultant agreed to provide services regarding the monitoring of investments and providing
independent investment advice pertaining to the City's 457 Deferred Compensation Plan
("Plan") to assist the City's Plan Administrative and Investment Committee with oversight of
the Plan ("Agreement").
B. The Agreement remains in effect through December 31, 2024, following the City's exercise of
its option under the Agreement to extend the initial term of the Agreement for one (1)
additional two (2) year period. The Agreement is current and in -effect.
C. The parties now wish to amend and augment the Scope of Services set forth in the Agreement.
No other changes, including any extensions of the Agreement, are contemplated by this
Amendment.
The Parties therefore agree:
1. Section 1, Scope of Services, is hereby amended to include the following language:
Additionally, Consultant will offer financial planning and consulting services, as well as those
services described in Exhibit A-1, which is attached hereto and incorporated herein by
reference ("Outside Investment Services") directly to Plan Participants (or City Employees) at
no additional cost to the City. Plan Participants maintain the option to elect and/or request
such Outside Investment Services from Consultant, and any such agreements for Outside
Investment Services shall be entered into between the Plan Participant and Consultant only,
and the City shall not be interpreted or implied, in any manner, to be a party to said agreements
for Outside Investment Services. As a registered investment advisor, Consultant is an
independent fiduciary firm that is legally bound to exercise its fundamental obligation to act
and/or advise in the best interests of its clients.
2. Consultant agrees that it has not provided any of the Outside Investment Services detailed
above and will not begin any Outside Investment Services prior to the effective date provided
herein.
3. Except as modified by this Amendment, all terms and conditions of the Agreement shall remain
in full force and effect.
Page 1 of 2
SIGNATURE PAGE FOR FIRST AMENDMENT TO AGREEMENT TO PROVIDE
INDEPENDENT INVESTMENT ADVISORY SERVICES PERTAINING TO THE
CITY'S 457 DEFERRED COMPENSATION PLAN
IN WITNESS WHEREOF, the parties hereto have executed this First Amendment to the
Agreement on the date and year first written above.
ATTEST
JENNIFER L. HALL
City Clerk
APPROVED AS TO FORM
Sonia R. Carvalho
City Attorney ,
B
JONATHAN T. MA INEZ
Assistant City Attorney
RECOMMENDED FOR APPROVAL
KATHRYN DOWNS
Executive Director
Finance & Management Services Agency
CITY OF SANTA ANA
KRISTINE RIDGE
City Manager
CONSULTANT
Title: V-F/ SGcd C.�0.�
Page 2 of 2
,EXHIBIT A=1
A� 16
all
Add ressi ng the needs of retirement pla n pa rtici pa nts by givi ng
them the tools to take action to secure their financial future
Why OfferPlanning Services?
Keeping costs low and having prudent
investment options can only get your
participants so far. Many participants
need help answering the basic
questions, like:
• Am I saving enough to retire when
I'm ready?
• Should I contribute to a Roth?
• Have I allocated my account
properly?
• What does my entire financial picture
look like?
That is why we developed Personal
Financial Strategies (PFS). To help
participants answer their personal
questions and provide them with an
action plan customized to their needs
and goals.
What The PFS Program Offers -
Identify financial goals and
objectives
Z Assist with establishing a budget
Develop and understand full
financial picture
Create a customized action
plan with recommendations
on savings rate and portfolio
allocation
• Advice provided in a fiduciary capacity.
• Will not solicit assets to leave the
retirement plan.
• Do not sell products or receive any
commissions.
• Program offered through our team of
Certified Financial Planners"
BFSG Amendment - JTM - 8.14.23 - CAO
signed
Final Audit Report
Created: 2023-08-14
By: Kristin Andrade (kandrade@santa-ana.org)
Status: Signed
Transaction ID: CBJCHBCAABAAEiO—jusgfRquKw77rFDUVCOCIzp3WoS5
2023-08-14
"BFSG Amendment - JTM - 8.14.23 - CAO signed" History
Document created by Kristin Andrade (kandrade@santa-ana.org)
2023-08-14 - 11:43:19 PM GMT
P4 Document emailed to Kathryn Downs (kdowns@santa-ana.org) for signature
2023-08-14 - 11:43:34 PM GMT
Email viewed by Kathryn Downs (kdowns@santa-ana.org)
2023-08-14 - 11:43:59 PM GMT
I�q Document e-signed by Kathryn Downs (kdowns@santa-ana.org)
Signature Date: 2023-08-14 - 11:44:30 PM GMT - Time Source: server
Q Agreement completed.
2023-08-14 - 11:44:30 PM GMT
U Adobe Acrobat Sign
EXHIBIT 2
BENEFIT FINANCIAL SERVICES GROUP
FINANCIAL PLANNING AND CONSULTING AGREEMENT
In connection with the agreement entered into on <<<DATE>>> between Benefit Financial Services Group, an SEC
registered investment adviser having a principal mailing address of 2040 Main Street, Suite 720, Irvine, California 92614
(the "PLANNER") and <<<EMPLOYER INFO>>>, whose mailing address is <<<ADDRESS>>> (the "EMPLOYER"), I,
<<<EMPLOYEE NAME>>> (the "CLIENT"), as a prerequisite to receiving the services contemplated under the Agreement,
acknowledge and agree to the following:
PLANNER agrees to provide basic financial planning and consulting services to CLIENT. Per the terms of the Agreement
described above, such services are to be provided only to the extent requested by CLIENT. CLIENT will not incur any
separate or additional fee as a result of electing to receive the PLANNER's financial planning and consulting services.
CLIENT acknowledges that recommendations provided by PLANNER are not endorsed or reviewed by EMPLOYER.
PLANNER's financial planning and consulting services shall conclude upon PLANNER's communication of its
recommendations to CLIENT. It is expressly understood by CLIENT that these services do not create an ongoing
relationship between PLANNER and CLIENT.
PLANNER will remain available to review and update any recommendations provided to CLIENT upon CLIENT's request.
PLANNER's recommendations (i.e. investments, estate planning, retirement planning, taxes, insurance, etc.) shall be
discussed by the PLANNER with CLIENT and may be implemented, at CLIENT's sole discretion, with the corresponding
professional advisors (i.e. broker, accountant, attorney, etc.) of CLIENT's choosing. In respect to estate planning matters,
PLANNER's role shall be that of a facilitator between CLIENT and CLIENT's corresponding professional advisors. No
portion of PLANNER's services should be interpreted as legal or accounting advice. CLIENT should defer to CLIENT's
attorney or accountant.
CLIENT agrees to provide information and/or documentation requested by PLANNER as pertains to CLIENT's objectives,
needs, and goals. PLANNER shall not be required to verify any information obtained from the CLIENT, CLIENT's attorney,
accountant, or other professionals, and is expressly authorized to rely thereon. CLIENT is free at all times to accept or reject
any recommendation from PLANNER, and CLIENT acknowledges that he has the sole authority with regard to the
implementation, acceptance, or rejection of any recommendation or advice from PLANNER.
CLIENT is free to obtain legal, accounting, and brokerage services from any professional source to implement the
recommendations of PLANNER. CLIENT will retain absolute discretion over all implementation decisions.
PLANNER's financial planning and consulting services do not include investment implementation, supervisory,
management, or reporting services, nor the regular reviewing, updating, or monitoring of CLIENT's investment portfolio or
financial plan. In the event CLIENT desires that PLANNER provide investment supervisory or management services,
CLIENT may request that PLANNER do so under the terms of a separate Investment Advisory Agreement between
PLANNER and the CLIENT, for which services PLANNER shall be paid a separate and additional fee.
PLANNER, acting in good faith, shall not be liable for any action, omission, investment recommendation/decision, or loss in
connection with its services. The federal and state securities laws impose liabilities under certain circumstances on persons
who act in good faith, and therefore nothing herein shall in any way constitute a waiver or limitation of any rights which
CLIENT may have under any federal or state securities laws, ERISA, or under the rules promulgated by the Employee
Benefits Security Administration and/or the Department of Labor. In no event shall PLANNER be responsible to CLIENT for
any special, indirect, incidental, exemplary, punitive, or consequential damages in connection with or otherwise arising out
of this Agreement.
CLIENT hereby acknowledges prior receipt of a copy of the PLANNER's written Disclosure Statement as set forth on Part
2A of Form ADV and PLANNER's Privacy Notice.
Subject to the conditions and exceptions noted below, and to the extent not inconsistent with applicable law, in the event of
any dispute pertaining to PLANNER's services, both PLANNER and CLIENT agree to submit the dispute to arbitration in
accordance with the auspices and rules of the American Arbitration Association ("AAA"), provided that the AAA accepts
jurisdiction. PLANNER and CLIENT understand that such arbitration shall be final and binding, and that by agreeing to
arbitration, both PLANNER and CLIENT are waiving their respective rights to seek remedies in court, including the right to
a jury trial. CLIENT acknowledges that he/she/it has had a reasonable opportunity to review and consider this arbitration
provision prior to execution.
Agreed to and accepted by:
Name (Printed)
Signature Date