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HomeMy WebLinkAboutCC 6 U.S. CONF OF MYRS 10-15-84 FROM: MARY E. WYNN, CITY CLERK SUBJECT: UNITED STATES CONFERENCE OF MAYORS DEFERRED COMPENSATION PROGRAM CITY ADMINISTRATIVE AGREEMENT RECOMMENDATION: Authorize the Mayor and the City Clerk to execute the Deferred Compensation Program City Administrative Agreement between the City of Tustin and United States Conference of Mayors. BACKGROUND: The City of Tustin entered into an agreement with National Plan Coordinators, Inc. (NPC) on August 16, 1976, as Plan Coordinator for the City's Deferred Compensation Program. On August 20, 1979, the City Council authorized the proper amendments to the Deferred Compensation Plan so that it complied with the Revenue Act of 1978. On Kugust 30, 1979, the City entered into a new agreement with NPC as Administrator. From the beginning of the Deferred Compensation Program until April 22, 1982, Eugene Snyder was the Chairman of the Deferred Compensation Plan Committee. On April 22, 1982, I was elected Chairman of the Committee by the Deferred Compensation Committee. Because of dissatisfaction by the Deferred Compensation Committee and the City Attorney in the performance of the the administration of the Plan by NPC, the Committee voted to discontinue sending further contributions to NPC as of March 28, 1984. On May 15, 1984, NPC gave notice of cancellation of our agreement, just one day before we were planning to send them a letter of termination. The Committee has been in the process of investigating various Administrators and on September 21, 1984, it was moved to contract with the Untted States Conference of Mayors Deferred Compensation Program. On October 5, 1984, the Committee moved to approve the United States Conference of Mayors (USCM) Deferred Compensation Program City Administrative Agreement and to submit the agreement to the City Council for approval. In investigating various Administrators, USCM was the only administrator that would continue our present funding investments as well as offering additional investments. The Deferred Compensation Committee unanimously recommends approval of the attached greement. UNITED STATES CONFERENCE OF MAYORS DEFERRED COMPENSATION PROGRAM CITY AI)MINISTRATIYE AGREEMENT This agreement is executed by and between' the United States Conference of Mayors (USCM) of-Washington, D.C., and the City of Tustin. RECITALS 7. ll4E PROGRAbI: II. USCM has established a Master Deferred Compensation Program for Cities permitting Cities, other local government agencies and their e~loyees to enjoy the advantages to be derived from Section 457 of the Internal Revenue Code. The intent of the Program is to assist Cities and their ~loyees in establishing an increased measure of financial security by prov- iding for additional retirement income through the deferral of before-tax dollars and the reaction of current income tax liability thus offsetting the effects of inflation on their ultimate retirement benefits. The Program will provide Cities with a new w~y to help employees help themselves by providing'an attractive incentive to build a volunta~ fund for their supplemental retirement income requirements. The Program will be provided at no cost to Cities other than incid- ental expenses related to payroll deductions. REGULATORY CONSIDERATIONS: USCM has received opinion of counsel that the Program meets all necessary criteria for approval by all federal regulatory authorities governing such Programs, including the Internal Revenue Service. III. COMPETITIVE BID PROCESS: USCM has conducted a competitve Bid selection process on behalf of its Member Cities and, as a result of careful evaluation of admini- strative abilities and experience, has selected those.insurance and investment institutions proposing the most attractive combination of costs, benefits and services. An independent actuary was retained to review the costs, bene- fits, servtces and Investment yields of the products offered under ~e Program to insure their competitive balance in the marketplace and to best meet the needs of member cities. This Bid selection process was performed by USCM in order to comply as closely as possible with governmental purchasing procedures. I¥. PROGRAM ADMINISTRATOR: USCM has agreed to sponsor the Program and has selected and contracted with an independent plan administrator eminently qualified to accept and fulfill the responsibility for all .administrative requirements necessary for the succesful opera- tion of the Program. 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 administration of a national Program established and administered in compliance 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 admin- ister the Program. City has enacted the necessary resolution/court order to adopt the USCM Plan Agreement and to establish its Deferred Compens- ation Program for its employees. VI. USCM RESPONSIBILITES: NOW, THEREFORE, it is agreed that USCM shall: A. Provide 'City with a Deferred Compensation Plan Agreement and necessary agreements for execution with its participating employees which is and will be maintained in compliance with the.provisions of the Internal Revenue Code. B. Establish the overall Program, its funding options and administrative operation~ so as to comply with other regulatory authorities, including state statues, constitutional restrictions and other appropriate authorities. C. - Provide City with such techinal assistance as is necessary to implement the Program in accordance with the needs and objectives of the City's individual requirements. · D. 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 ~ervices for Cities and their employees. E. Review annually the administrative, operational and financial performance of such ~elected companies.and take such actions as are necessary to assure the City and its employees the best possible continuity of costs, benefits and services. F. Provide a comprehensive administrative service system to facilitate employee deferrals, reconciliations, disbursements to the investment media, maintenance of the individual and City account records, provide periodic statments and coordinate employee distributions, and assure proper tax reporting systems, monthly transmittals, quarterly reports to employees summary to City and semi-annual reports to City to include employee balances and June fiscal year end balances. USCM agrees to pay to City plan $1,000 per day for each day beyond fifteen (15) working days after the end of each calendar quarter that employees do not receive their quarterly statements. G. Provide such accounting and audit systems as are necessary to insure 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; copies of agreed upon reports attached as Exhibit 1. He Provide for an initial and continuous employee educational program to make certain all interested City employees receive a thorough understanding of the overall Program, its advantages and restrictive provisions of the Program. Provide such employee communication materials and other forms, documents and agreements as are necessary to administer the Program. Provide' the City and its employees such convenience and timeliness of individual services as are required for effective employee understanding of participation. USCM agrees to administer the existing City of Tustin deferred compensation plan which includes investments with Home Savings and Loan, Templeton Growth Fund, NILIC, Great Western Assurance and Pacific Fidelity, and to retain existing investments so long as directed by the City and make additional contributions thereto as directed by the City. VII. CITY NOW, A. RESPONSIBILITES: THEREFORE, it is agreed that the City shall: Provide USCM its full cooperation and support in admini- stering the necessary deferral system for employee cont- ributions. Disseminate from time to time such promotional material as provided by USCM for employee distribution. Arrange for representatives of USCM's Program to conduct orientation meetings with City employees. Name a' City offical or committee to act as Contract Administrator on behalf of the City on all material matters'relating to activities of the Program. E. Accept the terms and conditions of the insurance and in- vestment company contracts as represented by USCM pursu- ant to the operation of this Progam. F. Assist USCM and the Plan Administrator, as necessary, in the development of comprehensive investment and service specifications. It is mutually understood and agreed that USCM has designated Public Employees Benefit Services Corporation (PEBSCO) to act as its Agent in fulfilling certain of the administrative and marketing requirements of this Agreement. If USCM or. PEBSCO unsatisfactorily perform the responsibilities and services pursuant to this Agreement, the City shall give notice to. both USCM and PEBSCO specifically stating the nature of USCM or PEBSCO's failure to perform. If the-specified default is not corrected within nin'ety (90) days following the notice of default by the City, the City may terminate this Agreement. This Agreement is effective until written notice of termination is provided by either party. DATE: CITY OF TUSTtN October 15, 1984 ~A~OR UNITED STATES CONFERENCE OF MAYORS EXECUTIVE DIRECTOR ATTEST: DATE CITy' CLERK ' APPROVED AS TO FORM: CITY ATTORNEY