HomeMy WebLinkAboutRES 4221CITY OF RENTON, WASHINGTON
RESOLUTION NO. 4221
A RESOLUTION OF THE CITY OF RENTON, WASHINGTON, RATIFYING AND
CONFIRMING: (1) THE CITY'S REQUEST FOR PROPOSAL PROCESS AND
RETENTION OF A 457(b) PLAN CONSULTANT; (2) TERMINATION OF THE
HARTFORD AND ICMA-RETIREMENT CORPORATION AS THE CITY'S 457(b)
RECORDKEEPERS AND PLAN ASSET CUSTODIANS; (3) SELECTION OF TIAA-CREF
AS THE CITY'S 457(b) PLAN RECORDKEEPER AND PLAN ASSET CUSTODIAN; (4)
THE EXECUTION OF THE 457(b) CONTRACTS BY NANCY A. CARLSON, HRRM
ADMINISTRATOR; (5) TRANSFER OF THE CITY'S 457(b) PLAN ASSETS TO TIAA-
CREF; (6) ALL ACTIONS TAKEN AND ALL CONTRACTS EXECUTED BY CITY
EMPLOYEES IN THIS PROCESS; AND (7) AUTHORIZING ANNUAL REPORTS BY
THE PLAN'S INVESTMENT COMMITTEE FOR FURTHER REVIEW AND
RATIFICATION EACH YEAR BY THE CITY.
WHEREAS, the City of Renton has employees rendering valuable service to the City, its
citizens and this community; and
WHEREAS, the establishment of a deferred compensation plan for such employees
serves the interests of the City of Renton by enabling it to provide reasonable retirement
security for its employees via a federal income tax deferred retirement savings plan under
Internal Revenue Code Section 457(b), enabling the City to provide reasonable retirement
security for its employees by providing increased flexibility in its personnel management system
and by assisting in the attraction and retention of competent personnel; and
WHEREAS, the City as the Plan Sponsor has the duty to monitor and ensure proper
administration ofthe 457(b) Plan; and
WHEREAS, the City's Human Resources & Risk Management Administrator and staff
received notice that one of the City's existing 457(b) Plan custodians was pursuing the sale of its
retirement plans business, which announcement was communicated to the City's employees
and Plan participants on or about May 20, 2012; and
RESOLUTION NO. 4221
WHEREAS, following discussion, the Human Resources & Risk Management
Administrator made a decision to investigate steps to improve the City's 457(b) Plan for the
City's employee participants and held a meeting on May 10, 2012 with Greg Settle of Hyas
Group, a 457(b) Plan consultant, to discuss changes announced by the City's departing 457(b)
Plan custodian and whether to utilize Hyas Group in the Request for Proposal process to
address the changes necessitated by The Hartford's withdrawal as 457(b) Plan custodian; and
WHEREAS, following a reference check performed by the City's Human Resources & Risk
Management department of proposed 457(b) Plan consultant, Hyas Group, on May 21, 2012, a
meeting was conducted with Greg Settle of Hyas Group to discuss set-up of a Request for
Proposal Committee, and notice was sent on June 27, 2012 to the City's Union presidents,
inviting them to participate in the formation of the Request for Proposal Committee; and
WHEREAS, an initial meeting of the Request for Proposal Committee was held with
457(b) Plan consultant, Greg Settle of Hyas Group, on August 2, 2012 and it was determined to
send notices to the City's 457(b) Plan custodians/recordkeepers, The Hartford and ICMA-
Retirement Corporation. Said notices were sent on August 30, 2012, informing the Plan
custodians that the City was contracting with Hyas Group to consult with the City and to discuss
the change arising from The Hartford's announcement to sell its retirement plans business, of
which the City's 457(b) Plan was a part, and methods of improving the City's 457(b) Plan for the
City's employee participants, and about utilizing Hyas Group in the Request for Proposal
process; and
WHEREAS, the Human Resources & Risk Management department sent an email on
September 7, 2012 to all City employees announcing that The Hartford, one of the City's 457(b)
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Plan custodians, had reached an agreement to sell its retirement plans business to MassMutual
and that the City's Human Resources & Risk Management department was exploring all other
vendor and 457(b) Plan options; and
WHEREAS, the City's consultant had made numerous recommendations to improve the
City's 457(b) Plan, including emphasizing efforts to reduce the 457(b) Plan's overall expenses
and costs to the City's employee participants; to find a 457(b) Plan custod ian that could offer
competitive investment options, including a broad variety of low cost investment funds,
together with the investment flexibility of mutual funds and/or brokerage accounts for the
Plan's employee participants; and
WHEREAS, as a result of the recommendations of the City's consultant, the Human
Resources & Risk Management department prepared, with the assistance of the City's
consultant, a Request for Proposal directed to possible 457(b) Plan custodians/recordkeepers
and vendors, so that each proposal could be fairly compared with others. The City's Request
for Proposal was released to the industry on November 30, 2012 and the City received nine (9)
responses from vendors to its Request for Proposal; and
WHEREAS, the Request for Proposal Committee met to discuss and review the
responses to the City's Request for Proposal on January 16, 2013, including a determination of a
scoring system for the responses and the selection of finalists from the City's Request for
Proposal; and
WHEREAS, after review of each proposal and in consultation with its consultant, the
Request for Proposal Committee conducted a finalist interview on January 31, 2013, of ICMA-
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Retirement Corporation and TIAA-CREF, with a subsequent reference check of TIAA-CREF on
February 6, 2013; and
WHEREAS, the Request for Proposal Committee, in consultation with the City's
consultant, unanimously determined that an established 457(b) Plan custodian/recordkeeper,
TIAA-CREF, would offer the best investment options at the lowest costs to the City's employee
participants, including investment advice, consultation and account services, and that TIAA-
CREF offered the City an opportunity to provide 457(b) Plan employee participants the greatest
value and services at the lowest cost; and
WHEREAS, on March 25, 2013, the Human Resources & Risk Management department
invited representatives of the City's Unions to participate upon the Investment Committee for
the City's 457(b) Plan; and
WHEREAS, written notification of 457(b) Plan vendor termination was sent to The
Hartford and ICMA-Retirement Corporation on March 28, 2013, followed by notification by the
City to all 457(b) Plan employee participants on April 15, 2013, informing them of forthcoming
changes; and
WHEREAS, a "Blackout Notice" was sent on May 9, 2013 to all employee participants
from the City's new 457(b) Plan custodian, TIAA-CREF, a requirement as part of the transition
process and which prevents Plan participants from moving or withdrawing assets in the Plan as
the change and asset transfer from one Plan custodian to another is accomplished. The
"Blackout Period" is in addition to any restrictions individual funds held by employee
participants may have placed on redemptions by current, non-separated employee Plan
participants; and
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WHEREAS, the change to new 457(b) Plan custodian/recordkeeper, TIAA-CREF, required
the execution of several contractual agreements, including (1) a "Custodial Account Agreement
for a Non-Trusteed Governmental 457(b) Plan with a TIAA-CREF Brokerage Account," executed
on June 6, 2013; (2) "Recordkeeping Services Agreement for Governmental Plan(s) with a TIAA-
CREF Brokerage Account," executed on June 6, 2013; and (3) an "Adoption Agreement for the
457(b) Deferred Compensation Plan of the City of Renton, a Governmental Employer,"
executed on July 24, 2013. All three contracts with TIAA-CREF were executed by the City's
Human Resources & Risk Management Administrator, Nancy A. Carlson. None of the three
contracts involve the expenditure of public funds, as the contracts relate solely to the City's
457(b) Deferred Compensation Plan; and
WHEREAS, on June 14, 2013, a mailing was sent to the City's employee participants,
which consisted of the City's Transition Guide and Transfer Strategy insert. The Transition
Guide informed Plan employee participants about the City's 457(b) Plan updates and transition
of assets to new 457(b) Plan custodian, TIAA-CREF. This included informing employee
participants about on-site transition seminars and commencement ofthe Blackout Period on or
about July 5, 2013; and
WHEREAS, one ofthe ICMA funds, the PLUS Fund, had a 12-month hold on transfers out
of the fund, if the individual was an active employee. The restriction did not apply to
terminated/retired participants. The City received one complaint from an active employee and
a few complaints from retired participants about the 12-month hold. The City helped the
retired individuals to transfer out of the fund. The 12-month hold has now ended and the
active employees have now transferred out ofthe ICMA fund. The City also encountered a few
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other minor glitches and complaints during the transition process. However, the City's 457(b)
Plan program is now running smoothly, with positive participant comments; and
WHEREAS, an Investment Committee has been established to review the investment
performance ofthe funds and to identify fund problems and to recommend replacement funds.
To ensure that the City is properly monitoring the fund, as the Plan Sponsor, the Investment
Committee shall make annual reports to the City for review and ratification;
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF RENTON, WASHINGTON, DOES
RESOLVE AS FOLLOWS:
SECTION I. The above recitals are found to be true and correct in all respects.
SECTION II. The City of Renton hereby ratifies, confirms and adopts (1) the City's
457(b) Plan Request for Proposal process and retention of a 457(b) Plan consultant, Greg Settle
of Hyas Group; (2) termination of The Hartford and ICMA-Retirement Corporation as 457(b)
recordkeepers and Plan asset custodians; (3) the selection of TIAA-CREF as 457(b) recordkeeper
and Plan asset custodian; (4) the City's 457(b) Plan contracts and the execution of same by
Human Resources & Risk Management Administrator, Nancy A. Carlson, on behalf ofthe City of
Renton; (5) transfer of the City's 457(b) Plan assets to TIAA-CREF; (6) all actions taken and all
contracts executed by the City and its staff in the termination of the previous 457(b) Plan
custodians/recordkeepers, the Request for Proposal process, selection of TIAA-CREF as
replacement 457(b) Plan Administrator, and transfer of the 457(b) Plan's assets to TIAA-CREF;
and (7) each year, annual reports on the 457(b) Plan shall be delivered by the Plan's investment
Committee to the City for review and ratification.
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SECTION III. The City of Renton's Human Resources & Risk Management
Administrator shall be the coordinator for the City's 457(b) Plan; shall receive necessary
reports, notices or other documents from TIAA-CREF; shall establish and maintain on behalf of
the City of Renton, an Investment Committee for the City's 457(b) Deferred Compensation Plan
to consist of both represented and non-represented employees; shall carry out any and all
administrative duties required by the City's 457(b) Plan; and shall execute all necessary
agreements with TIAA-CREF incidental to the administration of the Plan or with regard to any
enhancements thereto, should a Roth 457(b) Plan or other enhancement be made available for
the City's employee participants.
PASSED BY THE CITY COUNCILthis 14th day of July , 2014.
Bonnie I. Walton, City Clerk
APPROVED BY THE MAYOR this 14th day of July j 2014.
Denis Law, Mayor
Approved as to form:
RES.1638:6/25/14:scr
Lawrence J. Warren, City Attorney
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