HomeMy WebLinkAboutCC 6 DEFERRED COMP. 05-06-85~0.. Honorable Mayor and City Council
;ROM. Mary E. Wynn, Deferred Compensation Committee Chairperson
SUBJECT: REVISED DEFERRED COMPENSATION AGREENENT WITH UNITED STATES CONFERENCE OF
MAYORS
RECOPllENDATION:
Approval of the standard United States Conference of Mayors Deferred Compensation
agreement as attached and recommended by the Deferred Compensation Committee.
BACKGROUND:
On October 15, 1984, the City Council approved the Deferred Compensation Agreement
with the United States Conference of Mayors (USCM) that included two changes to their
standard agreement.
The two changes were:
A clause that provided for a penalty of $1,000 per day for each day
beyond 15 working days after the end of each calendar quarter that
employees do not receive their quarterly statements; and
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Section K which stated that USCM agrees to administer the existing City
of Tustin Deferred Compensation plan which includes investments in Home
Savings, etc.
After reviewing our existing plan, USCM is unable to include these two changes to
their standard agreement.'
Due to the fact that we only have 10 people enrolled in Home Savings, Ronald Nault,
Finance Director, has agreed to administer that investment.
The Committee, Ronald Nault and Bill Wilson (Deferred Compensation Consultant) have
investigated many other plans and we are all of the opinion that USCM offers the best
investments with the highest potential.
The Deferred Compensation Committee recommends that the Council approve the standard
USCM agreement as attached.
Mary E. Wynn
City Clerk
Deferred Compensation Committee Chairperson
Attachments
UNITEr) STATES CONFEI~,NCE OF MAYORS
DEFERR~'rD COMPENSATION PROGRAM
CITY ADMINISTRATIVE AGREEMENT
This a~reement is executed by and between the United States Conference of Mayors (USCM)
Of Washington, D.C., and the City of ,(City).
RECITALS
I. TIrE PROGRAM:
USCM has established a Master D~ferred Compensation Pro,rem for Cities, perm/ttin~ Cities,
other local ~over~m~,,t a~ndes and thdr employees to enjoy the advantages to be derived
from Section 457 of the Internal Revenue Code.
The intent of the Prol;r,am is to assist ~itiee and their employees in establishing an increased
measure of financial security by providing for additional retirement income through the
deferral of before-tax dollars and the reduction of current income tax liability thus offsetting
the effects of inflation on their ultimate reth'ement benefits.
The Pro/r,m will provide Cities with a new way to help employees help themselves by
provl,tb~g an at~ive incentive to build a voluntary fund for their supplemental retirement
income requirements.
The Pro,rem will be provided at no cost to Cities other than incidental expenses related to
payroll deductions.
II. REGULATORY CONSIDERATIONS:
USCM has received opinion of conn-~el that the Program meets all necessary criteria for
approval by all federal regulatory anthorities gover~i-~ such Pro~r~m-~ including the Internal
IlL COMPETITIVE BID PROCESS:
USCM has conduct~l a competitive Bid selection process on behalf of its Member Cities and,
as a result of careful evaluation of aami,~is~rative abilities and experience, has selected those
insurance and investment institutions proposing the most attractive combination of costs,
benefits and services.
An independent actuary was retsined to review the costs, benefits, services and investment
yields of the products offered under the Prosr~m to insure their competitive balance in the
marketlol~ee and to best meet the needs of w~mber cities.
This Bid selection process wes performed by USCM in order to comply as closely as possible
with governmental purchasing procedures.
IV. PROGRAM ADMINISTRATOR:
USCM has a~reed to sponsor the Pro,rem and has selected and contracted with an
independent plan ~dmlnlstrator emi,~entJy quslifed to accept and ~'~lfill the responsibility
for all administrative requirements necessary for the successful operation of the Pro,rem.
TSP-210-A
V. CITY CONSIDERATION:
City recognizes that such tax-deferred savings benefits will act as incentives for employees
to voluntarily set aside and invest portions of their current income to meet their future
financial requirements and supplement their City retirement income.
City recognizes that through the adoption of the USCM Program, all such regulatory,
operational, administrative and other Program management responsibilities are assumed by
USCM on behalf of City, in accordance with the Plan document.
City recognizes the important contribution of USCM's technical expertise in the design,
implementation and admini.~tration of a national Program established and administered in
compl/ance with all applicable regulatory jurisdictions.
City recognizes the advantages and economies of scale secured by the mass purchasing
leverage of USCM and Cities through a comprehensive bid selection analysis.
City recognizes the benefits of USCM's establishment of a functional administrative system
on behalf of Cities to sdrnini~ter the Program.
City has enacted the necessary resolution/court order to adopt the USCM Plan Agreement
and to establish its Deferred Compensation Progrsm for its employees.
VI. USCM RESPONSIBILITIES:
NOW, THEREFORE, it is agreed that USCM shalh
Provide City with a Deferred Compensation Plan Agreement and necessary agreements
for execution with its participating employees which is and will be walntalned in
compliance with the provisions of the Internal Revenue Code.
Establish the overall Prograrn~ its ftmdlng options and administrative operations so
as to comply with other regulatory authorities, including state statutes, constitutional
restrictions and other appropriate authorities.
Provide City with such technical assistance as is necessary to implement the Progrnm
in accordance with the needs and objectives of the City's individual requirements.
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Warrant that it has conducted, on behalf of Cities, a comprehensive bid selection process
designed to provide the most competitive combination of costs, benefits, and services
for Cities and their employees.
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Review annually the administrative, operational and financial performance of such
selected companies and take such actions as are necessary to assure the City and its
employees the best possible continuity of costs, benefits and services.
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Provide a comprehensive sdmlni.~trative service system to facilitate employee deferrals,
reconciliations, disbursements to the investment media, maintenance of the individual
and City account records, provide periodic statements and coordinate employee
distxibutions, and assure proper tax reporting systems.
Provide such accounting and audit system.~ as are necessary to in.,~re the fiscal integrity
of the Program and to provide City with reports and work papers as are reasonably
necessary to meet the City's individual financial reporting requirements;
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Provide for au initial and continuous employee educational program to make cert~aln
all interested City employees receive a thorough understanding of the overall Program~
its advantages and restrictive provisions of the Program.
I. Provide such employee comm"nlcation martials and other forms, documents and
agr~ts a8 are nscessary to ~mlnls~r the ~-O~'nm_
J. Provide the City and its employees such convenience and timeliness of individual
services as are required for effective employee understanding of participation.
VII. CITY RESPONSIBILITIES:
NOW, THEREFORE, it is agreed that the City sb-I1-'
A. Provide USCM its full cooperation and support in sdmlnlstering the necessary deferral
syst~n for employee contributions.
B. Disseminate from time to time such promotional msterial as provided by USCM for
employee distribution.
Arrsn~e for representatives of USCM's Pro.'sm to conduct orientation meetings with
City employees.
D. Name a City official or committee to act as Contract A~tmlnlstrator on behalf of the
City on all material matters relating to activities of the Progrsm_
E. Accept the terms and conditions of the insurance and investment company contracts
as represented by USCM pursuant to the operation of this Program.
Assis~ USCM and the Plan A,tml-istrator, as necessary, in the development of
comprehensive invest,~ent and service specifications.
It is mutually understood and a~reed that USCM has desi~ated Public Employees Benefit
Services Corporation (PEBSCO) to act as its Agent in f~lfillint~ ceSsi- of the srtmini-~trative
and marketing requirements of this A~reement.
If USCM or PEBSCO unsatisfactorily perform the responsibilities and services pursuant to
this A~reement, the City shall give notice to both USCM and PEBSCO specifically stating
the nature of USCM or PEBSCO's failure to perforn~ If the speelt~ed default is not corrected
with;- -i-ety (90) days following the notice of default by the City, the City may terminate
this A~reement.
This Agreement is effective until written notice of ter,,~;-ation is provided by either party.
CITY
UNITED STATES CONFERENCE OF MAYORS
Executive Director
Date Date