For City Council Meeting [December 10, 2019]
TO: Honorable Mayor and City Council
APPROVAL: Rod Foster, City Administrator
FROM: Jessica Brown, Finance Director
Title
Request City Council Approve the Professional Services Agreement with SFG Retirement Plan Consulting, LLC (SFGRPC) for 457(b), 457(b) OBRA, and 401(a) plan consulting and investment fiduciary services.
Body
BACKGROUND
The City provides an employer-sponsored deferred compensation plan under Section 457(b), a 457(b) OBRA Plan for Part-Time Employees, and a 401(a) defined contribution plan under the Internal Revenue Code (IRC). The 457(b) Plans provide tax benefits to employees whom make deposits into the Plan for their retirement. ICMA-RC, Lincoln and Nationwide provide record-keeping and administrative services for the 457(b) Plans. The 457(b) OBRA plan is also known as a Social Security Alternative Plan and is a mandatory plan for the City's part-time employees - it also provides tax benefits for employees on the deposits made by the City and the employees. Nationwide provides record-keeping and administration services for the 457(b) OBRA plan. The 401(a) Plan provides additional tax benefit retirement savings for employees. Lincoln provides record-keeping and administration services for the 401(a) Plan. The City manages the 457(b), 457(b) OBRA and 401(a) Plans with internal staff. As the plan sponsor, the City has certain fiduciary duties and responsibilities under State law (California State Constitution, Article XVI Section 17). These duties and responsibilities focus on ensuring the operation and investment of the public retirement plan is for the exclusive purpose of providing benefits to participants and beneficiaries. Specifically, fiduciary responsibilities include:
* Investing the assets of the plan;
* Administering the plan; and
* Engaging in a prudent process for making all decisions related to the operation of the plan, including decisions related to the plan's investment...
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