HomeMy WebLinkAbout55D - RESO - RETIREMENT SRVSREQUEST FOR
COUNCIL ACTION
CITY COUNCIL MEETING DATE:
JUNE 21, 2016
TITLE:
RESOLUTION TO ESTABLISH
IRREVOCABLE TRUST WITH PUBLIC,
AGENCY RETIREMENT SERVICES
{STRATEGIC PLAN NO. 4, 1)
(SURPLUS ALLOCATION FUNDING)
WE f ®�
RECOMMENDED ACTION
CLERK OF COUNCIL USE ONLY:
APPROVED
❑ As Recommended
❑ As Amended
❑ Ordinance on 181 Reading
❑ Ordinance on 2nd Reading
❑ Implementing Resolution
❑ Set Public Hearing For
CONTINUED TO
FILE NUMBER
Adopt a resolution to establish an Irrevocable Trust Agreement for the purpose of Pre -
Funding Pension and Other Post - Employment Benefits Obligations between the City and
Public Agency Retirement Services.
2. Authorize the City Manager and Clerk of the Council to execute an agreement with Public
Agency Retirement Services, for the Irrevocable Trust plan installation and administration
services for the period of June 22, 2016 through June 21, 2019, for an amount of $10,000,
subject to non - substantive changes approved by the City Manager and City Attorney.
3. Authorize the City Manager and Clerk of the Council to execute Trustee Forms with US
Bank / HighMark Capital Management, Inc., for the purpose of managing Plan Assets for
the period of June 22, 2016 through June 21, 2019, subject to non - substantive changes
approved by the City Manager and City Attorney.
4. Authorize the City to transfer $500,000 from the City's Surplus Allocation fund to the Public
Agency Retirement Services account for the purpose of pre- funding pension obligations.
Project in accordance with the Council approved Surplus Allocation Plan as of October 20, 2015.
Department:
Project:
I Category
Total Funding:
Finance
Pension Stability Fund
City -Wide
$500,000
DISCUSSION
In 2012, the Government Accounting Standards Board (GASB) issued Statement No. 68,
Accounting and Financial Reporting for Pensions and to be reflected in the City's Financial
55D -1
Resolution to establish an Irrevocable Trust with Public Agency Retirement Services
June 21, 2016
Page 2
Statements as of June 30, 2015. Specifically, Cities are required to disclose their unfunded
pension obligations for their defined benefit plans (CaIPERS) within their Balance Sheet. The
City's unfunded pension obligations as of June 30, 2015 totaled approximately $417 million.
However, the City's overall net position approximated a positive $800 million after implementing
the unfunded pension liability as required by GASB 68.
Upon approval by City Council for the City's Surplus Allocation Plan, the City elected to establish
a Pension Stability Reserve (Reserve) totaling $500,000. The Reserve was established to offset
and /or pre -fund the City's unfunded pension obligations. Additionally, the funds were assigned
and reflected in the City's Comprehensive Annual Financial Report as of June 30, 2015. Staff
has continued to research measures which would reduce the City's unfunded Pension obligations
and as a result identified the establishment of an Irrevocable Trust (Trust) with a third -party
(Exhibit 1 and 2). Establishment of a Trust provides the following benefits for both Pension and
Other Post - Employment Obligations (OPEB):
• Establishment of Plan demonstrates the City's efforts in maintaining fiscal responsibility.
• Local Control over Assets — The Trust can be accessed at any time so long as it is utilized
to pay the City's pension obligations.
• Lower Net Pension Liability (NPL) — Contributions placed in the trust reduces the City's
unfunded pension liability. Additionally, assets placed in the Trust will directly reduce the
City's NPL for financial reporting purposes in accordance with GASB 68.
• Pension Rate Stabilization — Assets may be transferred to the City's existing CaIPERS
plan (Miscellaneous or Safety) at the City discretion, which would reduce or eliminate large
fluctuations in Employer contributions to CaIPERS.
• Investment Flexibility— The City maintains oversight of the investment manager (HighMark
Capital Management, Inc.) and the portfolio's risk tolerance along with diversification of
plan assets are in accordance with California Government Code section 53216.
• Improve the City's Credit Rating — Rating agencies, such as Standard & Poor's, reflect
favorably on cities that develop a strategy and establish a corresponding Trust to offset
unfunded pension liabilities.
On an annual basis, staff will continue to identify City funds that are eligible for transfer to Public
Agency Retirement Services (PARS). Council approval will be sought for future contributions to
the Trust.
STRATEGIC PLAN ALIGNMENT
Approval of this item supports the City's effort to meet Goal #4 — City Financial Stability,
Objective #1 (maintain a stable, efficient and transparent financial environment).
55D -2
Resolution to establish an Irrevocable Trust with Public Agency Retirement Services
June 21, 2016
Page 3
FISCAL IMPACT
Pre - funding for Pension Obligations:
Funds in the amount of $500,000 have been identified to be transferred to PARS and are
available in the FY 2015 -16 budget in the Finance Council Special Projects account (05010018-
62303).
Annual Asset Fee Payment:
PARS has provided the City two options as to how the pay for the Annual Asset Fee (includes
PARS administration fee and HighMark Capital Management, Inc., investment management fee):
• Invoice the City directly
• Automatically deduct from Plan Assets (Trust)
Currently, the City has elected to invoice and pay PARS (administration and investment
management fee) directly. Fees assessed and invoiced by PARS to the City are subject to
amount of funds (Plan Contributions) transferred by the City for an amount of $10,000 based on
the plan contribution assumptions. The fee will be budgeted and available in the Finance
Management and Support Services account (01110100- 62300) as follows:
Fiscal Year
Amount
2016 -17
$ 3,333
2017 -18
$ 3,333
2018 -19
$ 3,334
However, in future fiscal years the City will analyze plan assets to determine if investment gains
are sufficient to offset any incurred fees (Annual Asset Fee). Thus, the City would not be
invoiced and the Annual Asset fee will be paid directly from Plan Assets.
APPROVED AS TO FUNDS AND ACCOUNTS:
Francisco Gutierrez
Executive Director
Finance and Management Services Agency
SV
Exhibit 1. Resolution
2. Agreement with Public Agency Retirement Services
3. Trustee Investment Forms
55D -3
55D -4
Imf06 /2/2016
EXHIBIT 1
RESOLUTION NO. 2016 -XXX
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
SANTA ANA APPROVING THE ADOPTION OF THE PUBLIC
AGENCIES POST - EMPLOYMENT BENEFITS TRUST
ADMINISTERED BY PUBLIC AGENCY RETIREMENT
SERVICES (PARS)
WHEREAS, PARS has made available the PARS Public Agencies Post -
Employment Benefits Trust (the "Program ") for the purpose of pre- funding pension
obligations and /or other post - employment benefits ( "OPEB ") obligations; and
WHEREAS, the City of Santa Ana is eligible to participate in the Program, a tax -
exempt trust performing an essential governmental function within the meaning of
Section 115 of the Internal Revenue Code, as amended, and the Regulations issued
thereunder, and is a tax - exempt trust under the relevant statutory provisions of the State
of California; and
WHEREAS, the City's adoption and operation of the Program has no effect on
any current or former employee's entitlement to post - employment benefits; and
WHEREAS, the terms and conditions of post - employment benefit entitlement, if
any, are governed by contracts separate from and independent of the Program; and
WHEREAS, the City's funding of the Program does not, and is not intended to,
create any new vested right to any benefit nor strengthen any existing vested right; and
WHEREAS, the City reserves the right to make contributions, if any, to the
Program.
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY
OF SANTA ANA AS FOLLOWS:
Section 1. The City Council hereby adopts the PARS Public Agencies Post -
Employment Benefits Trust, effective June 21, 2016.
Section 2. The City Council hereby appoints the City Manager, or his or her
designee, as the City's Plan Administrator for the Program.
Section 3. The City's Plan Administrator is hereby authorized to execute the
PARS legal and administrative documents on behalf of the City and to take whatever
additional actions are necessary to maintain the City's participation in the Program and
to maintain compliance of any relevant regulation issued or as may be issued; therefore,
authorizing him or her to take whatever additional actions are required to administer the
City's Program.
Resolution No. 2016 -xxx
Page 1 of 2
55D -5
Jmf 06/212016
Section 4. This Resolution shall take effect immediately upon its adoption by
the City Council, and the Clerk of the Council shall attest to and certify the vote adopting
this Resolution.
ADOPTED this 21 st day of June, 2016.
Miguel A. Pulido
Mayor
APPROVED AS TO FORM:
Sonia R. Carvalho, City Attorney
By: ti JW.
n M. Funk
Assistant City Attorney
AYES Councilmembers
NOES: Councilmembers
ABSTAIN: Councilmembers
NOT PRESENT: Councilmembers
CERTIFICATE OF ATTESTATION AND ORIGINALITY
I, MARIA D. NUIZAR, Clerk of the Council do hereby attest to and certify the attached
Resolution No 2016 -XXX to be the original resolution adopted by the City Council of the
City of Santa Ana on June 21, 2016.
ME
Clerk of the Council
City of Santa Ana
55D -6
Resolution No. 2016 -xxx
Page 2 of 2
EXHIBIT 2
AGREEMENT FOR ADMINISTRATIVE SERVICES
This agreement ( "Agreement") is made this 21st day of June, 2016, between Phase II
Systems, a corporation organized and existing under the laws of the State of California, doing
business as Public Agency Retirement Services and PARS (hereinafter "PARS ") 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 ( "Agency ").
WHEREAS, the Agency has adopted the PARS Public Agencies Post - Employment Benefits
Trust for the purpose of pre - funding pension obligations and /or OPEB obligations ( "Plan"),
and is desirous of retaining PARS as Trust Administrator to the Trust, to provide
administrative services.
NOW THEREFORE, the parties agree;
1. Services. PARS will provide the services pertaining to the Plan as described in the
exhibit attached hereto as "Exhibit 1A" ( "Services ") in a timely manner, subject to the
further provisions of this Agreement.
2. Fees for Services. PARS will be compensated for performance of the Services as
described in the exhibit attached hereto as "Exhibit 13". The total sum to be expended
under this Agreement for the period June 22, 2016 through Jame 21, 2019 is $10,000
based on Plan contribution assumptions provided by the Agency.
3. Payment Terms. Payment for the Services will be remitted directly from Plan assets
unless the Agency chooses to make payment directly to PARS. In the event that the
Agency chooses to make payment directly to PARS, it shall be the responsibility of the
Agency to remit payment directly to PARS based upon an invoice prepared by PARS and
delivered to the Agency. If payment is not received by PARS within forty -five (45) days
of the invoice delivery date, the balance due shall bear interest at the rate of 1.5% per
month. If payment is not received from the Agency within sixty (60) days of the invoice
delivery date, payment plus accrued interest will be remitted directly from Plan assets,
unless PARS has previously received written communication disputing the subject
invoice that is signed by a duly authorized representative of the Agency.
4. Fees for Services Beyond Scope. Fees for services beyond those specified in this
Agreement will be billed to the Agency at the rates indicated in the PARS' standard fee
schedule in effect at the time the services are provided and shall be payable as described
in Section 3 of this Agreement. Before any such services are performed, PARS will
provide the Agency with a detailed description of the services, terms, and applicable rates
for such services. Such services, terms, and applicable rates shall be agreed upon in
writing and executed by both parties.
5. Information Furnished to PARS. PARS will provide the Services contingent upon the
Agency's providing PARS the information specified in the exhibit attached hereto as
"Exhibit 1C" ( "Data "). It shall be the responsibility of the Agency to certify the
accuracy, content and completeness of the Data so that PARS may rely on such
information without fuirther audit. It shall further be the responsibility of the Agency to
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55D -7
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deliver the Data to PARS in such a manner that allows for a reasonable amount of time
for the Services to be performed. Unless specified in Exhibit IA, PARS shall be under
no duty to question Data received from the Agency, to compute contributions made to the
Plan, to determine or inquire whether contributions are adequate to meet and discharge
liabilities under the Plan, or to determine or inquire whether contributions made to the
Plan are in compliance with the Plan or applicable law. In addition, PARS shall not be
liable for non performance of Services to the extent such non performance is caused by or
results from erroneous and /or late delivery of Data from the Agency. In the event that the
Agency fails to provide Data in a complete, accurate and timely manner and pursuant to
the specifications in Exhibit IC, PARS reserves the right, notwithstanding the further
provisions of this Agreement, to terminate this Agreement upon no less than ninety (90)
days written notice to the Agency.
6. Records. Throughout the duration of this Agreement, and for a period of five (5) years
after termination of this Agreement, PARS shall provide duly authorized representatives
of Agency access to all records and material relating to calculation of PARS' fees under
this Agreement. Such access shall include the right to inspect, audit and reproduce such
records and material and to verify reports furnished in compliance with the provisions of
this Agreement. All information so obtained shall be accorded, confidential treatment as
provided under applicable law.
7. Confidentiality. Without the Agency's consent, PARS shall not disclose any
information relating to the Plan except to duly authorized officials of the Agency, subject
to applicable law, and to parties retained by PARS to perform specific services within
this Agreement. The Agency shall not disclose any information relating to the Plan to
individuals not employed by the Agency without the prior written consent of PARS,
except as such disclosures may be required by applicable law.
8. Independent Contractor. PARS is and at all times hereunder shall be an independent
contractor. As such, neither the Agency not any of its officers, employees or agents shall
have the power to control the conduct of PARS, its officers, employees or agents, except
as specifically set forth and provided for herein. PARS shall pay all wages, salaries and
other amounts due its employees in connection with this Agreement and shall be
responsible for all reports and obligations respecting them, such as social security,
income tax withholding, unemployment compensation, workers' compensation and
similar matters.
9. Indemnification. PARS and Agency hereby indemnify each other and hold the other
harmless, including their respective officers, directors, employees, agents and attorneys,
from any claim, loss, demand, liability, or expense, including reasonable attorneys' fees
and costs, incurred by the other as a consequence of, to the extent, PARS' or Agency's,
as the case may be, negligent acts, errors or omissions with respect to the performance of
their respective duties hereunder.
10. Compliance with Applicable Law. The Agency shall observe and comply with federal,
state and local laws in effect when this Agreement is executed, or which may come into
effect during the term of this Agreement, regarding the administration of the Plan,
PARS shall observe and comply with federal, state and local laws in effect when this
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55D -9
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Agreement is executed, or which may come into effect during the term of this
Agreement, regarding Plan administrative services provided under this Agreement,
11. Applicable Law, This Agreement shall be governed by and construed in accordance
with the laws of the State of California. In the event any party institutes legal
proceedings to enforce or interpret this Agreement, venue and jurisdiction shall be in any
state court of competent jurisdiction.
12, Force Majeure. When a party's nonperformance hereunder was beyond the control and
not due to the fault of the party not performing, a party shall be excused from performing
its obligations under this Agreement during the time and to the extent that it is prevented
from performing by such cause, including but not limited to: any incidence of fire, flood,
acts of God, acts of terrorism or war, commandeering of material, products, plants or
facilities by the federal, state or local govermnent, or a material act or omission by the
other party.
13. Ownership of Reports and Documents. The originals of all letters, documents, reports,
and data produced for the purposes of this Agreement shall be delivered to, and become
the property of the Agency. Copies may be made for PARS but shall not be furnished to
others without written authorization from Agency.
14. Designees, The Plan Administrator of the Agency, or their designee, shall have the
authority to act for and exercise any of the rights of the Agency as set forth in this
Agreement, subsequent to and in accordance with the written authority granted by the
Governing Body of the Agency, a copy of which writing shall be delivered to PARS.
Any officer of PARS, or his or her designees, shall have the authority to act for and
exercise any of the rights of PARS as set forth in this Agreement.
15. Notices. All notices hereunder and communications regarding the interpretation of the
terms of this Agreement, or changes thereto, shall be effected by delivery of the notices
in person or by depositing the notices in the U.S. mail, registered or certified mail, return
receipt requested, postage prepaid and addressed as follows:
(A) To PARS: PARS; 4350 Von Karman Avenue, Suite 100, Newport Beach, CA
92660; Attention: President
(B) To Agency: City of Santa Ana; 20 Civic Center Plaza, Santa Ana, CA 92702;
Attention: City Manager
Notices shall be deemed given on the date received by the addressee.
16. Term of Agreement. This Agreement shall remain in effect for the period beginning
June 22, 2016 and ending June 21, 2019 ( "Term "), This Agreement may be terminated at
any time by giving thirty (30) days written notice to the other party of the intent to
terminate. Absent a thirty (30) day written notice to the other party of the intent to
terminate, this Agreement will continue unchanged for successive twelve month periods
following the Tenn.
17. Amendment. This Agreement may not be amended orally, but only by a written
instrument executed by the parties hereto.
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18. Entire Agreement. This Agreement, including exhibits, contains the entire
understanding of the parties with respect to the subject matter set forth in this Agreement.
In the event a conflict arises between the parties with respect to any term, condition or
provision of this Agreement, the rernaiiung terms, conditions and provisions shall remain
in full force and legal effect. No waiver of any term or condition of this Agreement by
any party shall be construed by the other as a continuing waiver of such term or
condition.
19. Attorneys Fees. In the event any action is taken by a party hereto to enforce the terms of
this Agreement the prevailing party herein shall be entitled to receive its reasonable
attorney's fees.
20. Counterparts. This Agreement may be executed in any number of counterparts, and in
that event, each counterpart shall be deemed a complete original and be enforceable
without reference to any other counterpart.
21. Headings. Headings in this Agreement are for convenience only and shall not be used to
interpret or construe its provisions.
22. Effective Date. This Agreement shall be effective on the date first above written, and
also shall be the date the Agreement is executed.
AGENCY:
BY:
David Cavazos
TITLE: City Manager
DATE:
ATTEST:
BY:
Maria D. Huizar
TITLE: Clerk of Council
RECOMMENDED FOR APPROVAL:
BY:
Francisco Gutierrez
TITLE: Executive Director, Finance and
Management Services Agency
Page 4
55D -13
N
Tod Hammeras
TITLE: Chief Financial Officer
DATE:
APPROVED AS TO FORM:
BY: n vfrAL IR.1.
hn M. Funk
TITLE: Assistant City Attorney
55D -14
EXHIBIT 1A
SERVICES
PARS will provide the following services for the City of Santa Ana's Public Agencies Post -
Employment Benefits Trust:
1. Plan Installation Services:
(A) Meeting with appropriate Agency personnel to discuss plan provisions,
implementation timelines, actuarial valuation process, funding strategies, benefit
communication strategies, data reporting, and submission requirements for
contributions /reimbursements /distributions;
(B) Providing the necessary analysis and advisory services to finalize these elements of
the Plan;
(C) Providing the documentation needed to establish the Plan to be reviewed and
approved by Agency legal counsel. Resulting final Plan documentation must be
approved by the Agency prior to the commencement of PARS Plan Administration
Services outlined in Exhibit IA, paragraph 2 below.
2. Plan Administration Services:
(A) Monitoring the receipt of Plan contributions made by the Agency to the trustee of the
PARS Public Agencies Post - Employment Benefits Trust ( "Trustee "), based upon
information received from the Agency and the Trustee;
(B) Performing periodic accounting of Plan assets, reimbursements /distributions, and
investment activity, based upon information received from the Agency and /or
Trustee;
(C) Coordinating the processing of distribution payments pursuant to authorized direction
by the Agency, and the provisions of the Plan, and, to the extent possible, based upon
Agency - provided Data;
(D) Coordinating actions with the Trustee as directed by the Plan Administrator within
the scope this Agreement;
(E) Preparing and submitting a monthly report of Plan activity to the Agency, unless
directed by the Agency otherwise;
(F) Preparing and submitting an annual report of Plan activity to the Agency;
(G) Facilitating actuarial valuation updates and funding modifications for compliance
with GASI3 45, ifprefunding OPEB obligations;
(H) Coordinating periodic audits of the Trust;
(I) Monitoring Plan and Trust compliance with federal and state laws.
3. PARS is not licensed to provide and does not offer tax, accounting, legal, investment or
actuarial advice.
Page 5
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EXHIBIT 1B
FEES FOR SERVICES
PARS will be compensated for performance of Services, as described in Exhibit 1A based
upon the following schedule:
(A) An annual asset fee paid by the Agency or paid from Plan Assets based on the following
schedule:
For Plan Assets from: Annual Rate:
$0 to $10,000,000 0.25%
$10,000,001 to $15,000,000 0.20%
$15,000,001 to $50,000,000 0115%
$50,000,001 and above 0.10%
Annual rates are prorated and paid monthly. The annual asset fee shall be calculated by
the following formula [Annual Rate divided by 12 (months of the year) multiplied by the
Plan asset balance at the end of the month], Trustee and Investment Management Fees
are not included.
(B) The annual asset fee referenced above shall be paid as follows:
Annual Asset Fee Payment Option (Please select one option below):
❑ Annual Asset Fee shall be paid from Plan Assets.
❑ Annual Asset Fee shall be invoiced to and paid by the Agency.
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EXHIBIT IC
DATA REQUIREMENTS
PARS will provide the Services under this Agreement contingent upon receiving the
following information:
1. Executed Legal Documents:
(A) Certified Resolution
(B) Adoption Agreement to the Public Agencies Post - Employment Benefits Tryst
(C) Trustee Investment Forms
2. Contribution — completed Contribution Transmittal Form signed by the Plan
Administrator (or authorized Designee) which contains the following information:
(A) Agency name
(B) Contribution amount
(C) Contribution date
(D) Contribution method (Check; ACH, Wire)
3. Distribution — completed Payment Reimbursement /Distribution Form signed by the
Plan Administrator (or authorized Designee) which contains the following
information:
(A) Agency name
(B) Payment reimbursement/distribution amount
(C) Applicable statement date
(D) Copy of applicable premium, claim, statement, warrant, and /or administrative
expense evidencing payment
(E) Signed certification of reimbursement /distribution from the Plan Administrator
(or authorized Designee)
4. Other information pertinent to the Services as reasonably requested by PARS and
Actuarial Provider,
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EXHIBIT 3
ADOPTION AGREEMENT
for the
POST - EMPLOYMENT SECTION 115 TRUST
A.I.I. Trust agreement with U.S. Bank National Association (the `Bank ") (the "Trust Agreement, "):
Post - Employment Section 115 Trust, Public Agencies Post - Employment Benefits -- -Trust
Agreement, effective November 5, 2014
A.1.2.
OPEB Plan:
Public Agencies Post - Employment Health Care Plan
The plan document for the OPEB Plan is the Public Agencies Post.
Employment Health Care Plan— Master Plan Document, effective as of
November 5, 2014 (the "Plan Document ").
A.13.
Pension Plan:
AAA.
Pension Plan's
effective date:
❑ (Check tf'applicable) Additional Pension Plans (and their respective
effective dates) are listed on an exhibit attached hereto.
A.2.1.
Employer:
Name:
U.S, mail address:
Phone number:
EIN:
Fiscal year end:
A.2.2.
Plan Administrator
Position at Employer:
Incumbent:
U.S. mail address:
Phone number:
Email address:
Page 1 of 4
55D -21
A3.1 Adoption. The Employer hereby:
A.3. I. I. Adopts the Trust Agreement as part of the (Check one or both of the following boxes):
❑ OPEB Plan
❑ Pension Plan
(each such plan separately, the "Plan ") and agrees to be bound by the Trust Agreement's terms, effective
as of the Employer's signature date below and subject to the investment approach selected below.
A.3.1.2. The following provisions apply if and only if the OPFB Plan box above is checked: (i)
Adopts the Plan Document and agrees to be bound by the Plan Document's terms, effective as of the
Employer's signature date below and (ii) acknowledges that the determination of Eligible Employees and
Eligible Beneficiaries is finally and conclusively made by the Employer according to the Employer's
applicable policies and collective bargaining agreements and without reference to the Trust Agreement.
A.3.1.3.Ratifles, affirms, and approves Employer's appointment of Phase II Systems as Trust
Administrator and represents and warrants that attached hereto is a fully- executed original of Employer's
Agreement for Administrative Services with Phase II Systems, d /b /a Public Agency Retirement Services
(PARS).
A.3.1.4.Agrees that capitalized terms used herein but not defined herein shall have the same
meaning attributed to them as in the Trust Agreement or Plan Document, as the case may be.
A4.1. The Employer hereby represents and warrants that:
AA.1.1. Authorizing haw. Employer has reviewed with its legal counsel and has
determined that Employer is authorized to establish and maintain the Plan and to establish a financial -
institution trust (separate and apart from the state) for the Plan, including the authority to adopt the Trust
Agreement.
A.4.1.2. Authorizing Resolution. Attached hereto is a certified copy of a resolution of
the Employer's governing body authorizing the adoption of the Trust Agreement as part of the Plan and
authorizing the appointment of the Plan Administrator designated by position of employment at the
Employer to act on the Employer's behalf in all matters relating to the trust;
A.4.1.3, Tax Status. The Plan is a "governmental plan' as defined in Section 414(d) of
the Internal Revenue Code of 19 86, as amended; is a "Section 401(a)(24) governmental plan" as defined
in Revenue Ruling 2011.1; and is not subject to Federal income taxation. The Plan's governing
document expressly provides that it is irrevocably impossible for any part of the corpus or income of the
Plan to be used for, or diverted to, purposes other than for the exclusive benefit of the Plan participants
and their beneficiaries, The Pension Plan is a qualified plan under Code Section 401(a). (In addition, the
Employer hereby acknowledges that the Plan is prohibited from assigning any part of its equity or interest
in the trust.)
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55D -22
A.4.2. Investment Approach,
4.2.1. The following provisions apply if and only if the OPEB Plan box above is checked;
OPEB Account. OPEB Account assets are invested in the discretion of (check one and only one of the
following boxes):
Discretionary investment, approach:
❑ The Bank, subject to Exhibit A (Investment Strategy Selection and Disclosure Form)
hereto.
Directed investment approach:
❑ The Plan Administrator.
The following registered investment adviser, bank (other than the Bank), or insurance
company (a "Third -Party Manager "):
The Employer
hereby represents and warrants that attached hereto is an executed copy of the agreement
with the above appointed Third Party Manager.
42.2. The following provisions apply if and only if the Pension Plan box above is checked:
Pension Account. Pension Account assets are invested in the discretion of (check one and only one of
the following boxes):
Discretionary investment approach:
❑ The Bank, subject to Exhibit A (Investment Strategy Selection and Disclosure Form)
hereto.
Directed investment X. rp oach:
❑ The Plan Administrator.
❑ The following registered investment adviser, bank (other than the Bank), or insurance
company (a "Third -Party Manager "):
The Employer
hereby represents and warrants that attached hereto is an executed copy of the agreement
with the above appointed Third Parry Manager.
Page 3 of 4
5501-23
EMPLOYER
By:
Its:
Date:
Accepted by: PHASE II SYSTEMS, DBA PUBLIC AGENCY
RETIREMENT SERVICES (PARS)
By:
Its: President
Date:
U.S. BANK NATIONAL ASSOCIATION
By:
Its: Vice President and Relationship Manager
Date:
By: QW4 !W. L4..
Jn M. Funk, Assistant City Attorney
City of Santa Ana
Page 4 of 4
55D -24
W INSTITUTIONAL TRUST & CUSTODY
INVESTMENT STRATEGY
SELECTION AND DISCLOSURE FORM
PARS SECTION 115 POST- EMPLOYMENT
BENEFITS TRUST PROGRAM
• This document is entered into by client and U.S. Bank National Association ( "U.S. Bank "), as trustee.
• Agency:
• Plan /Trust Name:
• To: HighMark Capital Management, Inc. and U.S. Bank
U.S. Bank has been or is hereby appointed Investment Manager of the above - referenced Plan /Trust. Please invest the assets of
the above - referenced Plan /Trust for which you have been appointed Investment Manager in the (select one of the strategies
listed below for each Plan funded by the Trust):
❑ OPEB ACCOUNT
❑ PENSION ACCOUNT
PRIMARY GOAL
STRATEGIC
RANGE
Provide current income with liquidity and
❑ Liquidity Management (US Treasury)
❑ Liquidity Management (US Treasury)
stability of principal through investments in
Money Market Fund
short -term U.S. Treasury obligations.
El Liquidity Management (Prime Obligation)
❑Liquidity Management (Prime Obligation)
Generate current income with liquidity and
stability of principal.
Money Market Fund
O Conservative HighMark PLUS
❑ Conservative HighMark PLUS
Provide a consistent level of inilahonprotected
Equity: 5-20%
❑ Conservative Index PLUS'
. ❑ Conservative Index PLUS
income over the long -term.
Fixed Income: 60.95%
Cash: 0-20%
El Mode rately.Conservative H ighMark PLUS
❑ Moderately Conservative HighMark PLUS
Provide current income with capital
Equity: 2040%
O Moderately Conservative Index PLUS
❑ Moderately Conservative Index PLUS
appreciation as a secondary objective '.
Fixed Income 50-80%
Cash: 0-20%
A Moderate HighMark PLUS
❑ Moderate HighMark. PLUS
Provide cumentincome and moderate .'
Equity: 40-60% .
D Moderate Index PLUS
❑Moderate Index PLUS -
capital appreciation
Fixed Income: 40 -60%
Cash: 0 -20%
❑ Balanced HighMark PLUS
❑ Balanced Hig hMark PLUS
Equity: 50 -70%
❑ Balanced Index PLUS
❑ Balanced Index PLUS
Provide growth of principal and income
Fixed Income 30-50%
Cash: 0-20%
O Capital Appreciation HighMark PLUS '.
❑ Capital Appreciation HighMark PLUS
Equity: 65-80%
'❑ Capital Appreciation Index PLUS
❑ Capital Appreciation Index PLUS
Primary goal is growth of principal
Fixed Income 10 -30%
-
Cash: 0-20%
Equity:
❑ Custom -
0 Custom
Specify.
Fixed Income
Cash:
Note. HighMark PLUSporifolios are diversified portfolios of actively managed mutual funds, Index PLLISportfolios are diversified portfolios of index -based mutual funds or exchange
Traded funds,
ACKNOWLEDGED. AND APPROVED
Authorized Signer Title
Print Name Date
TO BE USED FOR REFERENCE ONLY - DO NOT COMPLETE
All of IM serving you- 55D -25 (Mbnaink.
0212015
NP INSTITUTIONAL TRUST & CUSTODY
DISCRETIONARY TRUSTEE
FEE SCHEDULE
PARS SECTION 115 POST - EMPLOYMENT
BENEFITS TRUST PROGRAM
This document is entered into by client and U.S. Bank National Association ( "U.S. Bank'), as trustee.
ANNUAL FEES
TRUST /CUSTODY FEES
■ All Plan assets -waived
INVESTMENT MANAGEMENT FEES
Investment Management Fees are based on the Investment Strategy you select. Following is a list of the Investment Management
Fees applicable to each Investment Strategy:
• Liquidity — First American U.S. Treasury Money Market– Fund level fees only (see prospectus)
• Liquidity— FirstAmerican Prime Obligation Fund Class Z– Fund level fees only (see prospectus)
s Diversified Portfolios (Conservative, Moderately Conservative, Moderate, Balanced, Capital Appreciation)
Per Annum Charges"
.35% on the first $ 5,000,0_0_0_�I
.25% on the next $ 5,000,000
.20% on the next $ 5,000,000
.15% on the next $35,000,000
.10% on all over $50,000,000 j
*waived for plan assets invested in First American and Nationwide /HighMark funds where HighMark Capital Management is the sub - adviser of the fund.
OTHER FEES
■ First American Mutual Funds – See Prospectus
PAYMENT OF FEES
Market values used for fee calculations on fee invoices may differ slightly from market values on client statements due to posting of
accruals, late pricing of securities and /or other timing issues.
Fees are calculated and charged to the account monthly. If account cannot be charged after 30 days, fees not paid will be subject to a
late charge of 1 % per month on the unpaid balance. Changes to this Fee Schedule may be made at any time by U.S. Bank upon
reasonable notice.
KNOWLEDGED AND APPROVED
Date
TO BE USED FOR REFERENCE ONLY - DO NOT COMPLETE
All of CM serving you° (Mbank.
02/2015 55D -26