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Home My WebLink AboutAmendment to the 457 Deferred Compensation Plan Administrati a L MEETING DATE: 2/22/2005 DEPARTMENT ID NUMBER:AS05-008 Council/Agency Meeting Held:—rQ 42OS' Deferred/Continued to: Approved ❑ Conditionally Approved El Denied ty erk's ignat ey Council Meeting Date: 2/22/2005 Department ID Number: AS05-008 CITY OF HUNTINGTON BEACH REQUEST FOR CITY COUNCIL ACTION i SUBMITTED TO: HONORABLE MAYORALTY COUNCIL MEMBERS - SUBMITTED BY: ROBERT BEARDSLEY, ACTING ASSISTANT CITY�'.J ADMINISTRATOR �= D PREPARED BY: CHARLES THOMAS, aING DIRECTOR OF ADMINISTRATIVE SERVICES SUBJECT: APPROVE AMENDMENTS TO AGREEMENTS FOR DEFERRED COMPENSATION PLANS Statement of Issue,Funding Source,Recommended Action,Alternative Action(s),Analysis,Environmental Status,Attachments) Statement of Issue: The City contracts with ICMA Retirement Corporation (ICMA-RC) and Nationwide Retirement Solutions for IRS 457 Deferred Compensation Plans. The City also has an agreement with ICMA-RC for three 401 a Money Purchase Retirement Plans. Both companies have provided the City with amendments to the Administrative Services Agreements to reduce the Administrative fees paid by employees. In addition, one 401a plan, for the City Administrator is inactive. Funding Source: Not applicable 'Recommended Action: Approve the amendments to the Administrative Services Agreements with the ICMA Retirement Corporation for Plans Numbered 107578 (401 a for City Administrator), 107694 (401 a for appointed Department Directors), 107695 (401 a for elected Department Directors) and 301516 (457 Deferred Compensation Plan). Approve the Amendment to the 457 Deferred Compensation Plan Administration Agreement with Nationwide Retire_m_Retirement Solutions to reduce plan administration fees by fund, as identified. _ C� P:\RCA\RCA 22205.doc -�3- 2/7/2005 5:05 PM 1 REQUEST FOR ACTION MEETING DATE: 2/22/2005 DEPARTMENT ID NUMBER:AS05-008 Alternative Action(s): Do not amend the contracts, The ICMA-RC contract currently allows for termination without penalty by either party on a 60-day notice and includes administrative fees averaging approximately $150 per employee participant annually. The only modification to the Nationwide Retirement Solutions contract is the reduction of administrative fees paid by employees; all other provisions remain the same. Analysis: The City adopted an IRS Section 457 Deferred Compensation Plan in 1973 and added a 401A Money Purchase Retirement Plan in 2000. The City currently contracts with two organizations to provide administrative services and investments for the plans (ICMA-RC and Nationwide Retirement Solutions.) The program is supported through a combination of administrative fees paid by participating employees and fees received from proprietary mutual fund accounts offered in the plans. One of the providers, the ICMA-RC has offered to reduce employee-paid administrative fees for all plans to 0% (currently at .29%), if the City amends the contract with the following provisions: 1. Agree to a term of five years, followed by successive 2-year terms that can only be cancelled with written notice provided no less than 60 days before the end of each term. This is a non-exclusive contract, allowing the City to continue to provide choice to employees in deferred compensation plan service providers. Currently, the agreement allows for termination without penalty by either party on a 60-day notice. 2. The City will utilize the ICMA-RC EZLink software for transmitting contributions and reports. Through this software, the City is able to electronically transfer contributions out of each bi-weekly payroll. This fee reduction affects both the 457 and 401 a plans. Based on current assets, the reduction to 0% of participant-paid administrative fees represents a savings of approximately $53,398 annually or about $150 for the average participant each year. The Nationwide Retirement Solutions has also agreed to fee reductions, including reducing the employee-paid administrative fees from .45% to .40% for some funds and from .20% to .15% for others (see attachment 3 for an outline of administrative fees by fund). There are no conditions requested from Nationwide for reducing the administrative fees. Additionally, staff is recommending modifications to the inactive 401 a Money Purchase Plan for the City Administrator. This plan was originally set up as an employer contribution plan and has not been in use for a number of years. This amendment will change the plan into an employee contribution plan and activate it. Staff believes the provisions to the ICMA-RC agreement are reasonable. Environmental Status: Not Applicable P:\RCA\RCA 22205.doc 4 2/8/2005 8:14 AM a REQUEST FOR ACTION MEETING DATE: 2/22/2005 DEPARTMENT ID NUMEER:AS05-008 Attachment(s1: . - ® - . ..... ...........___. ......._.. ........ .... . ........ ..... ..___...... .. _ ... .. ..... _. 1. Contract amendment to the Administrative Service Agreement with the ICMA-RC 2. Contract amendment to the Governmental Money Purchase Plan & Trust Adoption Agreement with ICMA-RC 3. ontract amendment to the Deferred Compensation Plan Administration a reement with Nationwide Retirement Solutions P:\RCA\RCA 22205.doc -9- 2/8/2005 8:14 AM ATTAC H M E N T #3 Amended Exhibit A to the Deferred Compensation flan Administration Agreement This Amended Exhibit A sets forth the mutual fund options incorporated by reference to become part of the Deferred Compensation Plan Administration Agreement and all amendments thereto to be effective January 28, 2005. FUND NAME PRICING AIM Dynamics Fund(Investor Class) 0.15% American Century Growth Fund(Investor Class) 0.40% American Century International Discovery Fund(Investor Class) 0.15% American Century Ultra(Investor Class) 0.15% American Century Value (Investor Class) 0.15% Brown Capital Management Small Company Fund(Investor Class) 0.15% Dreyfus Appreciation Fund,Inc. 0.15% Dreyfus Premier Mid Cap Stock(Class A) 0.15% Dreyfus S&P 500 Index Fund 0.40% Federated US Government SC FND 2-5 Years(Institutional Shares) 0.40% Fidelity Asset Manager 0.40% Fidelity Contrafund 0.40% Fidelity Equity Income Fund 0.40% Fidelity Magellan Fund 0.40% Franklin Balance Sheet INV Fund(Class A) 0.15% Gartmore Bond Market Index(Class A) 0.15% Gartmore International Index Fund(Class A) 0.15% Gartmore Investor Destinations Aggressive Fund(Service Class) 0.15% Gartmore Investor Destinations Conservative Fund(Service Class) 0.15% Gartmore Investor Destinations Moderate Aggressive Fund(Service Class) 0.15% Gartmore Investor Destinations Moderate Conservative Fund(Service Class) 0.15% Gartmore Investor Destinations Moderate Fund(Service Class) 0.15% Gartmore Mid Cap Market Index Fund(Class A) 0.15% Gartmore Money Market Fund(Prime Shares) 0.15% Gartmore Nationwide Fund(Class D) 0.15% Gartmore S&P 500 Index ISC 0.15% Gartmore Small Cap Index(Class A) 0.15% Growth Fund of America (Class A) 0.40% GVIT Small Company Fund(Class 1) 0.15% Income Fund of America INC* 0.40% Janus Fund 0.15% JP Morgan Fleming International Equity Fund(Select Class) 0.15% JP Morgan Mid Cap Value(Class A) 0.15% MASS Investors Growth Stock Fund(Class A) 0.15% MSIF Equity Growth Portfolio(Class B) 0.15% MSIF Fixed Income Fund(Class A) 0.40% Neuberger Berman Genesis Fund(Trust Class) 0.15% Neuberger Berman Socially Responsive Fund(Investor Class) 0.15% 011505 ahc Huntington Beach Page I of 2 FUND NAME PRICING One Group Mid Cap Growth Fund(Class A) 0.15% One Group Mid Cap Value Fund(Class A) 0.15% Oppenheimer Global (Class A) 0.15% PIMCO Total Return Fund(Class A) 0.15% Putnam Voyager Fund(Class A) 0.15% Templeton Foreign Fund(Class A) 0.15% Van Kampen Growth&Income Fund(Class A) 0.15% Waddell&Reed Advisor High Income(Class Y) 0.15% IN WITNESS WHEREOF, the Parties have caused this Amendment to be duly executed by their authorized representatives on the date first written herein above. CITY OF HUNTINGTON BEACH, NATIONWIDE RETIREMENT CALIFORNIA SOLUTIONS, INC. By: By: Title: yp Title: C� owe. se6�v��u•p� �� 011505 ahc Huntington Beach Page 2 of 2 FUND NAME PRICING One Group Mid Cap Growth Fund (Class A 0.15% One Group Mid Cap Value Fund (Class A) 0.15% Oppenheimer Global (Class A) 0.15% PMCO Total Return Fund(Class A) 0.15% Putnam Voyager Fund Class A 0.15% Templeton Foreign Fund (Class A) 0.15% Van Kampen Growth_&Income Fund (Class A) 0.15% Waddell &Reed Advisor High Income Class Y) 0.15% IN WITNESS WHEREOF, the Parties have caused this Amendment to be duly executed by their authorized representatives on the date first written herein above. CITY OF HUNTINGTON BEACH, NATIONWIDE RETIRE ENT CALIFORNIA SOLUTIO IN . By: By: ;VIZ/CIKACA"�w- Title: p Title: 4tt-T< Aes, �� Gf2l6/�•4� ,S/6N�c.�.5�� 011505 ahc Huntington Beach Page 2 of 2 RCA ROUTING SHEET INITIATING DEPARTMENT: Administrative Services SUBJECT: Amend Contract with ICMA& Nationwide Deferred Compensation Plans COUNCIL MEETING DATE: February 22, 2005 RCA ATTACHMENTS STATUS Ordinance (w/exhibits & legislative draft if applicable) Attached ❑ Not A licable Resolution (w/exhibits & legislative draft if applicable) Attached ❑ Not Appiicable Tract Map, Location Map and/or other Exhibits Attached ❑ Not Applicable Contract/Agreement (w/exhibits if applicable) AttachedNot Applicable El(Signed in full by the City Attorne Attached ❑ Subleases, Third Party Agreements, etc. Not Applicable (Approved as to form by City Attorne Certificates of Insurance (Approved b the City Attorne Attached ❑ ( pp Y Y Y) Not Applicable Attached ❑ Fiscal Impact Statement (Unbudget, over $5,000) Not Ap licable ❑ Bonds (If applicable) AttachedNot Applicable Attached ❑ Staff Report (If applicable) Not Applicable Commission, Board or Committee Report applicable)If a Attached ❑ p ( pp ) Not Applicable Findings/Conditions for Approval and/or Denial Attached Findin ❑ g Pp Not Applicable EXPLANATION FOKUSSING ATTACHMENTS REVIEWED ...,.,RETURNED, FORWARDED Administrative Staff ( ) Assistant City Administrator Initial City Administrator Initial City Clerk EXPLANATION FOR RETURN OF ITEM: a J _ • RCA Author: Sharon Hennegen