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ITEM 15 |
City Council Memorandum Human Resources Memo No.
N/A
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Date: |
February 22, 2024 |
To: |
Mayor and Council |
Thru: |
Joshua H. Wright, City Manager Tadd Wille, Assistant City Manager Rae Lynn Nielsen, Human Resources Director |
From: |
Christina Pryor, Procurement & Supply Senior Manager |
Subject: |
Resolution No. 5775, Approving Agreement No. HR3-953-4609, for Deferred Compensation 457 Plan and Post Employment Health Plan Administration, Investment, and Trust Services |
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Proposed Motion: |
Move City Council pass and adopt Resolution No. 5775, approving Agreement No. HR3-953-4609, for deferred compensation 457 plan and post employment health plan administration, investment, and trust services, with Nationwide Retirement Solutions, Inc., for a period of three years, January 1, 2024, through December 31, 2026, and authorizing the City Manager to sign all associated plan documents and future extensions. |
Background: |
The City of Chandler maintains a deferred compensation plan in accordance with Internal Revenue Code Section 457 (the “457 Plan”). The City has also established three Retirement Health Savings Plans (the “RHS Plans”). One RHS Plan covers all full-time employees and benefit-eligible part-time employees. A second RHS plan covers City Council members. A third RHS Plan covers retirees eligible for Medical Expense Reimbursement Plan payments. Administrative, investment and trust services for all plans are currently provided by MissionSquare Retirement (formerly ICMA-RC). On May 12, 2023, staff issued Request for Proposal No. HR3-953-4609, for deferred compensation 457 plan and post employment health plan administration, investment, and trust services. Notice was sent to all registered vendors. Seven proposals were received from: Empower Retirement, LLC Lincoln Retirement Services Company, LLC MissionSquare Retirement Nationwide Retirement Solutions, Inc. U.S. Retirement & Benefits Partners (USRBP) VALIC Retirement Services Company (Corebridge Financial) Voya Retirement Insurance and Annuity Company The Evaluation Committee reviewed the proposals and recommends award to Nationwide Retirement Solutions, Inc., which submitted the most advantageous proposal in accordance with the evaluation criteria. |
Discussion: |
This new agreement with Nationwide to administer the city's 457 plan is anticipated to provide several benefits for employees and the city over the current vendor agreement. Notably, Nationwide offers an improved website and mobile app experience, an in-person integration at the Arizona State Retirement System (ASRS) offices, full-picture retirement tool, and full integration with the city's payroll and Human Resources Information System (HRIS) functions. All funds currently held by MissionSquare on behalf of city employees will map over to the new plan, with the only difference a proprietary investment product that will convert automatically to a similar Nationwide product. The tentative timeline for implementation is 90-120 days following approval of the agreement. |
Financial Implications: |
The per participant annual cost structure is as follows: 457(b) - $76 open structure or $28 using proprietary stable value (a reduction from the current $46 per year) PEHP (RHS) - $25 for open structure or using proprietary stable value These fees will be paid annually and computed on a quarterly basis, per quarter per participant, based on their investments. |
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