City staff requested proposals for bundled services for an IRS Code Section 457(b) Deferred Compensation plan, including recordkeeping, administration, custodial/trustee services, communication and education, and investment advisory/management services.  Staff is requesting that the City Council approve a contract with the selected plan provider.  The 457(b) plan is a voluntary participation, public sector, deferred income tax, retirement savings vehicle.  The City of Billings plan is entirely funded by employee contributions, except for some previous City Administrators who negotiated City contributions on his/her behalf.  
The City historically allowed two 457(b) plan administrators but had not reviewed their services for many years.  The new selection process attempts to ensure that the City is providing the best possible benefit to City employees.  Ms. Karlynn Schramm, Gallagher Benefit Services Client Consultant, worked with the City's selection committee, consisting of union and non-bargaining employees, to review 13 proposals.  The consultant and committee narrowed the search to two finalists and interviews were conducted on February 21, 2018.  Mass Mutual was selected to administer the City's 457(b) plan, with the exception of Nationwide for IAFF (firefighter) members.  Nationwide is one of the two providers that historically served the City employees. 
 

City Council may:

• Approve the contracts with Mass Mutual and Nationwide, or
• Choose not to approve the contracts, and the City would remain with current 457(b) vendors, or
• Select another 457(b) vendor(s).

There is no direct financial impact to the City; however, there will be a significant reduction in fees of approximately $200,000, annually, for employees. These fees are paid by the employees' invested Plan assets.

Staff recommends that the City Council approve Mass Mutual to be the City's 457(b) Plan vendor and Nationwide for IAFF members.