The URL can be used to link to this page

Home My WebLink AboutMINUTES - 03252014 - D.9RECOMMENDATION(S): 1. APPROVE and AUTHORIZE the County Administrator to sign the Administrative Services Agreement between Contra Costa County and Massachusetts Mutual Life Insurance Company, subject to approval as to form by County Counsel. 2. APPROVE and AUTHORIZE the County Administrator to sign the Trust Agreement between Contra Costa County and Reliance Trust Company, subject to approval as to form by County Counsel. 3. AUTHORIZE Massachusetts Mutual Life Insurance Company to act as an agent of the Trustee as indicated in the Trust Agreement. 4. APPROVE and AUTHORIZE the County Administrator to sign the Investment Agreement between Contra Costa County and Massachusetts Mutual Life Insurance Company, subject to approval as to form by County Counsel. FISCAL IMPACT: The program is funded by fees charged to employee participants. There is no fiscal impact beyond overhead administrative support costs. APPROVE OTHER RECOMMENDATION OF CNTY ADMINISTRATOR RECOMMENDATION OF BOARD COMMITTEE Action of Board On: 03/25/2014 APPROVED AS RECOMMENDED OTHER Clerks Notes: VOTE OF SUPERVISORS AYE:John Gioia, District I Supervisor Candace Andersen, District II Supervisor Karen Mitchoff, District IV Supervisor Federal D. Glover, District V Supervisor ABSENT:Mary N. Piepho, District III Supervisor Contact: Christine Penkala, County Benefits Manager (925) 335-1747 I hereby certify that this is a true and correct copy of an action taken and entered on the minutes of the Board of Supervisors on the date shown. ATTESTED: March 25, 2014 , County Administrator and Clerk of the Board of Supervisors By: Stacey M. Boyd, Deputy cc: Christine Penkala, County Benefits Manager, Robert Campbell, Auditor-Controller D.9 To:Board of Supervisors From:David Twa, County Administrator Date:March 25, 2014 Contra Costa County Subject:Contract with MassMutual Life Insurance Company for Administrative Services for the Deferred Compensation Plan BACKGROUND: On October 1, 2013 the Board of Supervisors authorized the Human Resources Department to negotiate a new three-year contract with Massachusetts Mutual Life Insurance Life Insurance Company (“MassMutual”), with regards to the Contra Costa County Deferred Compensation Plan. Consistent with the Board’s direction, the agreement with MassMutual will include the following provisions (summarized in the attached letter from MassMutual): The contract is for a period of three (3) years with the option for two (2) additional one (1) year contract extensions. The contract period is April 1, 2014 through March 31, 2017, with the option to extend the contract through March 31, 2018, and again through March 31, 2019. The contract provides for a book value discontinuance provision of the General Account at the end of the original three-year contract period, as well as at the end of each of the two optional extensions. If the County terminates the General Account on any date other than March 31, 2017, or March 31, 2018, or March 31, 2019, the General fund assets would be subject to a two sided market value adjustment. The contract includes a $50 loan initiation fee. The Hartford/MassMutual charged a quarterly administrative fee in the previous contract. Those fees will be eliminated effective April 1, 2014. Variable Account management fees will be used for the sole purpose of providing management, administrative and investment services for Variable Accounts investors. Effective April 1, 2014, variable accounts will include a management and administrative fee of 6 basis points (bp). When combined with the management, administrative and investment service fees for the General Account, the total fee for the Deferred Compensation Plan is 11 bp. General Account management fees will be used for the sole purpose of providing management, administrative and investment services for the General Account investors. Effective April 1, 2014, the General Account will include a management and administrative fee of 16 basis points. When combined with the management, administrative and investment service fees for the variable accounts, the total fee for the Deferred Compensation Plan is 11 bp. Retain the General Account option. Based on 6 bp for variable investments and 16 bps for the general account, the General Account Rate schedule is as follows: 4/1/14 – 3.45% 7/1/14 – 3.20% 1/1/15 – 2.70% 7/1/15 – 2.45% 1/1/16 – 2.20% 7/1/16 – 2.00% 1/1/17 – 2.00% - End of original contract is 3/31/17 7/1/17 – 2.00% 1/1/18 – 2.00% - End of first 1-year Extension is 3/31/18 7/1/18 – 2.00% 1/1/19 – 2.00% - End of second 1-year extension is 3/31/19 Retain current investment options, if practicable. Most current investment options will be retained. List of proposed new fund or share classes is attached. Nine (9) SSgA investment options, two (2) Hartford investment options and one (1) AMCENT investment option will be converted to Vanguard investment Options. The Hartford General Account will convert to the MassMutual Guaranteed Interest Account. Eighteen (18) investment options would have reduced fees by converting to lower fee share classes. The self-directed brokerage account assets will be transferred in-kind from Schwab to State Street Global Market. The County’s Deferred Compensation Program Consistent with the Board’s direction on October 1, 2013, MassMutual will assist the County in updating the Deferred Compensation Program in the following manner: Participant Communication and Education MassMutual will provide initial and ongoing education and enrollment support to the County and its employees. MassMutual will report its activity on an annual basis. Annual report to the Board of Supervisors The Deferred Compensation Advisory Committee and the Deferred Compensation Plan Consultant (currently Buck Consultants) will provide the Board of Supervisors with an annual review of the Deferred Compensation Plan. This review will include participant demographics, Plan contributions and distributions, and a review of the investment options. MassMutual will provide benchmarking data on 5 similar-sized 457 Plans. This data will include information on: plan size (assets and participants); average participant account balance; average annual contribution per participant; percent of assets allocated to fixed account versus stable value account versus variable investments. Account Transparency On an annual basis, MassMutual will provide a Cost and Revenue Disclosure document. This document will show general account investment information including the credited rate, asset balance, revenue target in basis points, and the amount of revenue earned in dollars. This document will also include the variable investment options such as asset balances, revenue in basis points, and the dollars earned as well as the expense ratio, and related expense to the participants. In addition, the Deferred Compensation Advisory Committee will be fully constituted. In 2014 the Deferred Compensation Advisory Committee (“Committee”) will be at full membership capacity, and operate as it has in the past. The Committee reviews and monitors all aspects of the County’s Deferred Compensation Plan, and makes recommendations to both the County Administrator and Board of Supervisors. The Committee is made up of eight (8) members with equal representation from both labor and management. The Committee participants are appointed by the County Administrator and are staffed by the Human Resources Department Benefits Manager and the County’s Deferred Compensation Plan Consultant (which is currently Buck Consultants). At this time, the Committee needs six (6) members to be at the full capacity. The County Administrator is currently consulting with Department Heads, both elected and appointed, CCCERA, and union leadership to secure the names of candidates to fill these seats. CONSEQUENCE OF NEGATIVE ACTION: As of April 1, 2014, the Contra Costa County Deferred Compensation Plan would not have a Plan Administrator. CHILDREN'S IMPACT STATEMENT: Not applicable. CLERK'S ADDENDUM Rollie Katz, Public Employees' Union Local One; Jeff Morrow, MassMutual. ATTACHMENTS Letter from MassMutual dated March 20, 2014 List of Proposed New Fund or Share Classes Current Fund Name Proposed New Fund or Share Class AMCENT CAPITAL PRESERVATION INV Vanguard Prime Money Market Inv Inv HARTFORD INDEX HLS IA Vanguard Institutional Index I I HARTFORD MONEY MARKET HLS IA Vanguard Prime Money Market Inv Inv SSGA DJ TARGET TODAY IND SL Vanguard Target Retirement Income Inv Inv SSGA INTL IND SEC LEND SERIES Vanguard Total Intl Stock Index Admiral Admiral SSGA RUSSELL SC INDEX SEC LEND Vanguard Small Cap Index Admiral Admiral SSGA S&P MC INDEX NON-LEND SER Vanguard Mid Cap Index Admiral Admiral SSGA US TOT MKT INDEX SEC LEND Vanguard Total Stock Mkt Idx Admiral Admiral SSGA DJ TARGET 2015 SEC LEND Vanguard Target Retirement 2015 Inv Inv SSGA DJ TARGET 2025 SEC LEND Vanguard Target Retirement 2025 Inv Inv SSGA DJ TARGET 2035 SEC LEND Vanguard Target Retirement 2035 Inv Inv SSGA DJ TARGET 2045 SEC LEND Vanguard Target Retirement 2045 Inv Inv Vanguard Target Retirement 2010 Inv Vanguard Target Retirement 2020 Inv Vanguard Target Retirement 2030 Inv Vanguard Target Retirement 2040 Inv Vanguard Target Retirement 2050 Inv Vanguard Target Retirement 2055 Inv Vanguard Target Retirement 2060 Inv AMERICAN CENTURY EQUITY INCOME INV American Century Equity Income Instl Instl AMERICAN CENTURY SC VALUE INV AMERICAN CENTURY SC VALUE Instl AMERICAN FUNDS CAPWLD G&I R3 AMERICAN FUNDS CAPWLD G&I R5 AMERICAN FUNDS EUROPACIFIC R3 AMERICAN FUNDS EUROPACIFIC R5 AMERICAN FUNDS GROWTH FUND R3 AMERICAN FUNDS GROWTH FUND R5 BARON SMALL CAP BARON SMALL CAP Instl CALVERT EQUITY PORTFOLIO A CALVERT EQUITY PORTFOLIO Y INVESCO EQUITY AND INCOME A INVESCO EQUITY AND INCOME R5 INVESCO LEISURE INV INVESCO AMERICAN FRANCHISE R5 INVESCO REAL ESTATE A INVESCO REAL ESTATE Y IVY SCIENCE AND TECHNOLOGY R IVY SCIENCE AND TECHNOLOGY I KEELEY SMALL CAP VALUE A KEELEY SMALL CAP VALUE I LOOMIS SAYLES BOND Retail LOOMIS SAYLES BOND I MFS INTERNATIONAL NEW DISC A MFS INTERNATIONAL NEW DISC R5 MFS INTERNATIONAL VALUE R3 MFS INTERNATIONAL VALUE R5 MFS UTILITIES A MFS UTILITIES R5 OPPENHEIMER GLOBAL A OPPENHEIMER GLOBAL Y PIMCO TOTAL RETURN A PIMCO TOTAL RETURN I T. ROWE PRICE GROWTH STOCK ADV T. ROWE PRICE GROWTH STOCK Inv AMERICAN CENTURY INTL GROWTH INV AMERICAN CENTURY INTL GROWTH Inv AMERICAN CENTURY VALUE INV AMERICAN CENTURY VALUE Inv ARTISAN MID CAP INV ARTISAN MID CAP Inv DAVIS NEW YORK VENTURE A DAVIS NEW YORK VENTURE A HARTFORD CAPITAL APPRECTN HLS IA HARTFORD CAPITAL APPRECTN HLS IA HARTFORD DIVIDEND & GROWTH HLS IA HARTFORD DIVIDEND & GROWTH HLS IA HARTFORD HEALTHCARE HLS IA HARTFORD HEALTHCARE HLS IA HARTFORD MIDCAP HLS IA HARTFORD MIDCAP HLS IA HARTFORD SMALL COMPANY HLS IA HARTFORD SMALL COMPANY HLS IA HOTCHKIS WILEY MID-CAP VALUE A HOTCHKIS WILEY MID-CAP VALUE A PIMCO REAL RETURN A PIMCO REAL RETURN A PYXIS PREMIER GROWTH EQUITY A HIGHLAND PREMIER GROWTH EQUITY A Current Share Class Proposed Share Class Share Class Improvements No Change Fund Replacements Fund Additions List of Proposed New Fund or Share Classes