HomeMy WebLinkAbout55E - RESO - DESIGNEE FOR RETIREMENT PLAN' `
CITY COUNCIL MEETING DATE:
JUNE 21, 2016
TITLE:
ADOPT A RESOLUTION TO AMEND RESOLUTION
NO. 2011 -080 TO AFFIRM THE APPOINTMENT OF
THE EXECUTIVE DIRECTOR OF PERSONNEL
SERVICES, OR HIS OR HER DESIGNEE, AS THE
CITY'S PLAN ADMINISTRATOR OF THE
RETIREMENT HEALTH SAVINGS PLAN AND
AFFIRM THE APPOINTMENT OF THE CITY'S
EXECUTIVE DIRECTOR OF FINANCE AS THE
PLAN TRUSTEE, AND EXECUTE THE
PARTICIPATION AGREEMENT WITH VANTAGE
TRUST COMPANY, LLC. TRUSTEE OF THE
VANTAGETRUST II MULTIPLE COLLECTIVE
INVESTMENT FUNDS TRUST
{STATEGIC PLAN NO. 7,6}
CITY MANAG
RECOMMENDED ACTION
CLERK OF COUNCIL USE ONLY:
Elaucr.]TA4 7
❑ As Recommended
❑ As Amended
❑ Ordinance on 1®' Reading
❑ Ordinance on 2nd Reading
❑ Implementing Resolution
❑ Set Public Hearing For
CONTINUED
TO
FILE
NUMBER
1. Adopt a resolution to amend Resolution No. 2011 -080, which authorized the adoption of the
ICMA -RC VantageCare Retirement Health Savings Plan Accessible to All Bargaining Units to
affirm the appointment of the Executive Director of Personnel Services, or his or her designee,
as the City's Retirement Health Savings ( "RHS ") Plan Administrator of the Plan, authorized to
implement the RHS plan, amend the RHS plan, and to take additional action as necessary to
maintain the City's participation in the RHS plan, maintain compliance with any regulations
regarding the RHS plan, and to administer the RHS plan for current and retired bargaining unit
members on behalf of the City.
2. Adopt a resolution to amend Resolution No. 2011 -080, to affirm the appointment of the
Executive Director of Finance, or his or her designee, as the City's Plan Trustee authorized to
maintain compliance with any regulations regarding the trust for the VantageCare Retirement
Health Savings Plan and make changes as necessary to the RHS plan investment options
available to plan participants.
55E -1
ICMA -RC RHS Plan Investment Change
June 21, 2016
Page 2
3. Authorize the City Manager to approve the Participation Agreement with Vantage Trust
Company, LLC, trustee of the Vantage Trust II Multiple Collective Investment Funds Trust on
behalf of the City's various Retirement Health Savings Plans, subject to nonsubstantive changes
approved by the City Manager and City Attorney.
In November 2011, the City established a Retirement Health Savings Plan administered through
ICMA -RC and made it accessible to all full -time bargaining units and officers on a voluntary
basis. Under this plan, bargaining unit members are allowed to accumulate assets to pay for
health insurance and out -of- pocket medical expenses at retirement.
Full time members of SEIU, PMA, SAMA, CASA, EM, APPOINTED Officials and PTCS SEW
elected to participate in the RHS Plan. Initially, ICMA -RC made available Vantagepoint Funds, a
no -load, diversified mutual fund for public employer plan assets, including RHS Plan assets.
Recently, ICMA -RC restructured its proprietary investment options to a collective investment
trust ( "CIT ") -only structure and offered a new series of funds, the VantageTrust II Funds ( "VT II
Funds "), for the RHS Plan. Details from ICMA -RC as to the VT II Funds are attached hereto as
"Exhibit 1 ". CIT's combine the assets of multiple investors into a single fund with a specific
investment strategy. The change to a CIT -only structure will deliver a simplified investment
structure, improved flexibility, and more cost - efficient investment options that lower participant
costs by approximately 0.08 %. Total costs paid by the plan participants amounts to
approximately 0.22% of assets under management along with applicable quarterly transaction
charges.
Personnel and the Finance Department request that the City Council approve entering into the
Participation Agreement (Exhibit "2 ") with Vantage Trust Company, LLC., the trustee of the
Vantage Trust II Multiple Collective Investment Funds Trust which will replace the Vantagepoint
Funds currently available to the City's RHS Plan participants with VT II Funds. It is anticipated
that the change will reduce participant costs by approximately 0.08 %.
It is also requested that the City Council amend Resolution No. 2011 -080, which authorized the
adoption of the ICMA -RC VantageCare Retirement Health Savings Plan Accessible to All
Bargaining Units (attached hereto as Exhibit "3"), to affirm the appointment of the Executive
Director of Personnel Services, or his or her designee, as the City's Plan Administrator of the
RHS Plan, authorized to implement the RHS plan, amend the RHS plan, and to take additional
action as necessary to maintain the City's participation in the RHS plan, maintain compliance
with any regulations regarding the RHS plan, and to administer the RHS plan for current and
retired bargaining unit members on behalf of the City. Additionally, it is requested that the City
Council amend Resolution No. 2011 -080, to affirm the appointment of the Executive Director of
Finance, or his or her designee, as the City's Plan Trustee authorized to maintain compliance
with any regulations regarding the trust for the VantageCare Retirement Health Savings Plan
55E -2
ICMA -RC RHS Plan Investment Change
June 21, 2016
Page 3
and make changes as necessary to the RHS plan investment options available to plan
participants as needed.
STRATEGIC PLAN ALIGNMENT
Approval of this item allows the City to meet Goal #7 — Team Santa Ana, Objective #6. Provide
a positive workplace environment that supports the health of its employees and celebrates its
success and Goals.
FISCAL IMPACT
There is no additional fiscal impact associated with this participation agreement. This plan will
continue to be administered by ICMA -RC at no cost to the City.
4dA-K _
Edward ya
Executive Director
Personnel Services Agency
Exhibits: 1. March 2016 Letter from ICMA -RC entitled "Changes Coming to Your
VantageCare Retirement Health Savings Plan."
2. VantageTrust II Multiple Collective Investment Funds trust Participation
Agreement.
3. Resolution No. 2011 -080
55E -3
55E -4
6
BUILDING PUBLIC SECTOR
RETIREMENT SECURITY G2.2
March 2016
Re: Reminder — Changes Corning to Your VantageCare Retirement Health Savings Plan —Act Now If
You flave Not AG eady Done So
Dear RHS Plan Sponsor:
Earlier this year we notified you of the opportunity to adopt a new series of Collective Investment Trust
( "CIT ") funds, the Vantagel' rust 11 Funds ( "VT II Funds "), for your VantageCare Retirement Health Savings
( "RHS ") plan.
The VT IT Funds will offer significant savings to your RHS plan and participants. The V' II Funds will invest
in fonds that are currently available as direct investments in your RHS plan -- The Vantagepoint Funds and
a third -party cash management fund (currently the Dreyfus Cash Management Fund).
We estimate that the CIT structure of the VT 11 Funds will result in an 8- basis -point savings on assets
currently invested in The Vantagepoint Funds and the Dreyfus Cash Management Fund. For example, a plan
with $1 million currently invested among The Vantagepoint Funds and Dreyfus Cash Management Fund
would experience savings of approximately $800 each year by investing in the corresponding VT II Funds.
In order for you to access the VT II Funds, you must first adopt VantageTrust II ( "VT 11 ") by simply
reviewing and executing theenclosed VantageTrust IIPatticipution Agreement ( "Participation
Agreement "), and returning It to us by:
• mail, using the enclosed postage -paid envelope addressed to ICMA -RC, ATTN: Workflow
Management Team, P.O. Box 96220, Washington, D.C. 20090 - 6220;
• email to planadoptionservices n ianarc.org; or
• fix to 202 - 682 -6439, ATTN: Workflow Management -Team.
Your adoption of VT II will serve as instructions to ICMA -RC to transfer assets currently invested in The
Vantagepoint Funds and Dreyfus Cash Management Fund to the corresponding VT 1I Funds. ICMA -RC
wilt manage the transition to VF II Funds, and keep you and your participants informed of the timing of the
transition.
For detailed information abour VT 11 and the VT lI Funds, please refer to the documents included in the
initial milling:
+ 1/irntrr,e7izrst7/ Declmation of Tru >t
• Urruan�reCarr. Rrehement Health 5'�rvings Plan — I /irntageTrust II Investment O /icinns
• /rtve3n9IClatr It4rt /ping Cfinn -t
• lrnnt�rge7ivnszlll�lsclo >znreMemotnm %rrz
(contimeed oil bade)
Exhibit 1 ICMA RETIREMENT CORPORATION 1 777 NORTH CAPIT0L STREET, NE I WASHINGTON, DC 20002-4240 AC 02768248
TEL: 202.962.4600 1 FAX; 202- 962- 4l05�Fj{f�G00 669 7400 I WWWAMARCORG
Or, you may contact your Plan Sponsor Services team at ($00) 326 -7272 to obtain additional copies of these
documents.
Thank you for yourconsideration.
Sincerely,
r�
David Tanguay
Senior Vice President, Client Services
Enclosures
Exhibit 1
55E -6
VantageTrust 11 Multiple Collective Investment Funds Trust
Im
This participation Agreement by and between VantageTrust Company, LLC ("Trust Company "), the trustee
of the VantageTrust II Multiple Collective Investment Funds Trust (the "Trust"), and the employer executing
this Participation Agreement ( "Employer) on behalf of the retirement plan(s) or retirement trust(s) Identified
on the signature page and effective as of the date specified at the end of this Agreement (the "Retirement
Trust").
RECITALS
1. The Trust Company maintains the Trust (including each separate Investment fund established as a "Fund ")
under the Declaration of Trust dated January 1, 2015, and all other attachments thereto, as amended and
In effect from time to time (the "Declaration of Trust "), as a medium for the collective investment and
reinvestment of assets of certain tax - exempt, governmental pension and profit - sharing plans, and
retiree welfare plans within the meaning of section 401(a)(24) of the Internal Revenue Code of 1986, as
amended, and related trusts, and other eligible investors that become Participating Trusts under the
Declaration of Trust (defined as "Eligible Trust" in the Declaration of Trust).
2. The Retirement Trust desires to become a Participating Trust as defined In the Declaration of Trust.
DEFINITIONS
1. Unless otherwise specified herein, any capitalized word or phrase shall have the meaning as set forth In the
Declaration of Trust.
AGREEMENT
In consideration of the foregoing and the promises set forth below, the parties agree to the following:
1. Appointment and Acceptance. The Employer hereby acknowledges that the Trust Company has appointed
ICMA Retirement Corporation ( "Investment Adviser "), an investment adviser registered under the
Investment Advisers Act of 1940, as an investment adviser, pursuant to the terms of the Declaration of
'Trust to provide advice and recommendations to the Trust Company in the management of the Funds. The
Employer further acknowledges and accepts that the Trust Company Is a wholly owned subsidiary of
Investment Adviser.
3. Adoption of Trust. The Retirement Trust's participation in each Fund will at all times be subject to the
terms of the Declaration of Trust, which is hereby adopted as a part of the Retirement Trust and this
Participation Agreement. The Retirement Trust's participation in each Fund will also be subject to the
terms of the Declaration of Trust.
4. Acceptance of Plan. The Trust Company accepts the Retirement Trust (including each plan forming a part
thereof) as a Participating Trust as of the date specified on the execution page of this Participation
Agreement.
S. Notice of Disqualification. In the event that the Retirement Trust ceases to be an Eligible Trust as defined in
the Declaration of Trust, then, in the case of any such event, the Employer shall deliverto the Trust Company
a written notice of its ceasing to be an Eligible Trust within fifteen (15) calendar days of receipt of any notice,
execution of any amendment, receipt of any letter or determination of such cessation. Upon the Trust
r {2016
Exhibit 2 55E -7
Company's receipt of such information, in writing or otherwise, the Retirement Trust's Units shall be
redeemed in accordance with the provisions of the Declaration of Trust.
WARRANTIES, REPRESENTATIONS AND COVENANTS OF EMPLOYER AND ELIGIBLE TRUST
1. Employer and Retirement Trust represent and warrant as follows.
A. The Retirement Trust meets the definition of an "Eligible Trust" under the Declaration of Trust. This
means the Retirement Trust is any of the following:
a retirement, pension, profit - sharing, stock bonus, or other employee benefit trust that
Is exempt from Federal Income taxation under Section 5O1(a) of the Code by reason of
qualifying under Section 4O1(a) of the Code; or
H. an eligible governmental plan trust or custodial account under Section 457(b) of the
Code that is exempt under Section 457(8) of the Code; or
Iii. Section 401(a)(24) governmental plans; or
V. any common, collective, or commingled trust fund the assets of which consist solely of
assets of eligible Investors in a group trust under Revenue Ruling 81 -100; or
V. an Insurance company separate account (1) the assets of which consist solely of assets
of eligible investors in a group trust under Revenue Ruling 81 -100, (11) with respect to
which the insurance company maintaining the separate account has entered into a
written arrangement with the Trust Company consistent with the requirements of
Revenue Ruling 2011 -1, and (iii) the assets of which are insulated from the claims of the
insurance company's general creditors; or
V1. any other plan, trust, or other entity that Is an eligible Investor In a group trust under
Revenue Ruling 81400,
B. The Retirement Trust is established, maintained and administered under one or more documents that
authorize part or all of the assets of the Retirement Trust to be transferred to, and commingled for
Investment purposes In, a Trust that meets the requirements of Revenue Ruling 81.100;
C. The Declaration of Trust (including each Fund thereunder) is adopted as part of the Retirement Trust;
D. Authorization or license from any foreign, federal, state or local regulatory authority or agency required
on the part of the Employer or the Retirement Trust has been obtained and any necessary filing with any
of the foregoing has been duly made.
2. Employer hereby represents and acknowledges the following:
A. It has the requisite authority to enter Into this Participation Agreement on behalf of the Retirement
Trust, to authorize investments under the provisions of the documents of the Retirement Trust and to
make, on behalf of the Retirement Trust, any and all certifications, covenants, representations or
warranties set forth in this Agreement.
VantageTrust 11 Participation Agreement
1/2016
Exhibit 2
55E -8
B. It has received and reviewed the Declaration of Trust, any addenda thereto, the VantageTrust it Funds
Disclosure Memorandum, and any additional materials and Information it has requested describing the
Trust, and its business and operation, and that in making a prudent Investment decision with respect to
the contribution of assets to the Trust in exchange for Units, the Employer has relied solely upon
Independent investigations made, directly or indirectly, by it.
C. It has been given the opportunity to review with the Trust Company the terms and conditions of this
Participation Agreement and the Declaration of Trust, and to obtain additional information to verify the
accuracy of the Information contained in the aforesaid materials, and such other information as it
desires to evaluate its investment in the Trust.
D. 'The Units of the Fund(s) have not been registered under the Securities Act of 1933, or the applicable
securities laws of any states or other jurisdictions.
E. Neither the Trust nor any Fund is registered under the Investment Company Act of 1940 and investors
are not entitled to the protections of that Act.
F. The Units of the Fund(s) are not Insured by the Federal Deposit Insurance Corporation or any other
type of deposit insurance coverage,
3. Employer agrees promptly to notify the Trust Company in the event that any of the representations set forth
above or any Information provided pursuant to the provisions hereof ceases to be accurate during the term
of this Participation Agreement. Until such notice is given to the Trust Company, the Trust Company may rely
on the representations contained in, and all other Information provided pursuant to or as contemplated by,
this Participation Agreement in connection with all matters related to the Funds and the Trust.
FEES AND EXPENSES
1. Fees and expenses incurred with respect to the Trust, including compensation of the Trustee, shall be paid in
accordance with the Declaration of Trust.
MISCELLANEOUS
1. Construction, This Participation Agreement shall be deemed to be executed and delivered In the District of
Columbia, and, except to the extent superseded by federal laws, all laws or rules of construction of the
District of Columbia shall govern the rights of the parties hereto and the interpretation of provisions of this
Participation Agreement.
2. Counterparts. This Participation Agreement may be executed In any number of separate counterparts, each
of which shall be deemed an original, but the several counterparts shall together constitute one and the
same Participation Agreement of the parties hereto.
3. Amendments, This Participation Agreement shall be automatically amended by any amendment to the
Declaration of Trust, and all such amendments shall be automatically incorporated by reference herein, and
any provisions of this Participation Agreement Inconsistent with the terms of such amendment shall be null
and void on and after the effective date of such amendment.
4. Agreement Conflicts. In the event that any terms of this Participation Agreement conflict with or are in
addition to the terms of any Administrative Services Agreement ( "ASA ") between the parties, the terms of
this Participation Agreement and the Declaration of Trust shall prevail. In the event that the terms of this
VantageTrust It Participation Agreement
1 /2016
Exhibit 2 55E -9
Participation Agreement conflict with the terms of the Declaration of Trust, the terms of the Declaration of
Trust shall prevail,
S. Prohibited Transactions. If the Trust Company determines that the Retirement Trust's involvement with
certain assets, liabilities or transactions will result, or has resulted, in the Trust engaging in a transaction that
Is prohibited by the Internal Revenue Code, Securities Act of 1933, Investment Company Act of 1940 or other
applicable law, the Trust Company, in its sole discretion, may take action to correct such prohibited
transaction, or may treat the Retirement Trust as having withdrawn from participation and shall redeem the
Retirement Trust's Units, all in accordance with the Declaration of Trust.
6. Severability. Each clause or term of this participation Agreement is severable from the entire Participation
Agreement, and if any clause or term is declared invalid, the remaining clauses or terms shall remain in
effect.
[Space Intentionally Blank]
VantageTrust II Participatfon Agreement
1/2016
Exhibit 2
55E -10
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date specified below.
VantageTrust II Multiple Collective Investment Funds Trust
By: VantageTrust Company, LLC, as Trustee,
By: /
Angela Montez
Secretary
Plan /Retirement Trust:
Plan /Retirement Trust Name
Plan /Retirement Trust Name
Bv:
WE
Name of Employer or Fiduciary
Authorized Officer Signature
Printed Name and Title
Address Line 1
Address Line 2
Telephone Number
5
Exhibit 2
55E -11
ICMA -RC Plan Number
ICMA -RC Plan Number
Customer Number
Date
APPROVED AS TO FORM
C�Laura A. Rossini -� .
Senior Assistant City Attorney
VantageTrust It Participation Agreement
1 /2016
55E -12
LAR 6/21/16
RESOLUTION NO. 2016-
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
SANTA ANA TO AMEND RESOLUTION NO. 2011 -080 TO
AFFIRM THE APPOINTMENT OF THE EXECUTIVE
DIRECTOR OF PERSONNEL SERVICES, OR HIS OR HER
DESIGNEE, AS THE CITY'S RETIREMENT HEALTH
SAVINGS PLAN ADMINISTRATOR AND AFFIRM THE
APPOINTMENT OF THE EXECUTIVE DIRECTOR OF
FINANCE AS THE CITY'S PLAN TRUSTEE.
BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF SANTA ANA AS
FOLLOWS:
Section 1: The City Council hereby finds, determines and declares as follows:
A. On November 28, 2011, the City Council adopted Resolution No. 2011-
080 adopting the ICMA -RC VantageCare Retirement Health Savings Plan
( "RHS ") accessible to all bargaining groups and authorizing the deposit of
existing (at the time) medical retirement subsidy funds for participating
bargaining units into the RHS trust and distributed equitably to current and
retired bargaining unit members. Each bargaining unit was allowed to
determine how the existing funds will be split among their membership
and it was determined that any future negotiated City contributions for
participating bargaining units would be deposited into the RHS trust.
B. Resolution No. 2011 -080 authorized the City Manager and Executive
Director of Personnel or their respective designees to execute any
documents required in furtherance of the establishment of the health
savings plan.
C. It is now desired to amend Council Resolution No. 2011 -080, in order to
effect the changes, as shown below:
Section 2: The Santa Ana City Council amends Resolution No. 2011 -080 to
affirm the appointment of the Executive Director of Finance, or his or her designee, as
the City's Plan Trustee authorized to maintain compliance with any regulations
regarding the trust for the VantageCare Retirement Health Savings Plan and make
changes as necessary to the RHS plan investment options available to plan
participants.
Section 3: The Santa Ana City Council amends Resolution No. 2011 -080, to
affirm the appointment of the Executive Director of Personnel Services, or his or her
designee, as the City's Plan Administrator for the RHS Plan, authorized to implement
Resolution No. 2016 XXX
Page 1 of 1
55E -13
the RHS plan, amend the RHS plan, and to take additional actions as necessary to
maintain the City's participation in the RHS plan, and to administer the RHS plan.
Section 4. That except as amended by this Resolution, all other provisions of
Resolution No. 2011 -080 shall remain in full force and effect.
Section 5. 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:
Laura A. Rossini
Senior Assistant City Attorney
AYES:
NOES:
ABSTAIN:
NOT PRESENT:
Councilmembers
Councilmembers
Councilmembers
Councilmembers
CERTIFICATE OF ATTESTATION AND ORIGINALITY
I, MARIA D. HUIZAR, Clerk of the Council, do hereby attest to and certify the attached
Resolution No. 2016 -_ to be the original Resolution adopted by the City Council of the
City of Santa Ana on June 21, 2016.
Date:
Resolution No. 2016 -XXX
Page 2 of 2
55E -14
Clerk of the Council
City of Santa Ana