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HomeMy WebLinkAbout09 Deferred Comp Adv BoardCITY OF SAN BERNARDINO - REQUEST FOR COUNCIL ACTION From: Roger Poyzer Dept: Deferred Compensation Advisory Board Date: July 28, 1999 Synopsis of Previous Council action: 93 -460 Agreement with Great Western Savings Recommended motion: Approve Resolution Subject: Resolution authorizing administrator agreement with National Deferred ti NluiNAL Compensation Inc ,l 5W14ture Contact person: Roger Poyzer, Chairman Deferred Compensation Board Phone: 384 -5625 Supporting data attached: Yes Ward: All FUNDING REQUIREMENTS: Amount: None Source: (Acct. No.) (Acct. Description) Council Notes: Finance: Agenda Item No. CITY OF SAN BERNARDINO - REQUEST FOR COUNCIL ACTION STAFF REPORT SUBJECT: Approve Resolution authorizing and directing the Mayor to execute on behalf of the City an agreement with National Deferred Compensation for services as Administrator of the City of San Bernardino Deferred Compensation Plan. BACKGROUND: In December 1993 the City Council passed Resolution 93 -460 authorizing Great Western Bank to become the Administrator of the City's deferred compensation plan. In 1996 Great Western Bank outsourced their deferred compensation program to Fund Select, an affiliate of National Deferred Compensation Inc. Great Western Bank remained the contract administrator of the City's plan, which remained fully intact, unchanged, and enforceable. Fund Select merely took over the day to day management, and reporting of the program. In 1998 Great Western Bank was purchased by Washington Mutual Bank. Washington Mutual became the administrator of the City's deferred compensation plan with Fund Select still providing day to day management of the program. The City's 1993 agreement remained fully intact, unchanged, and enforceable. In January 1999 the City was notified that National Deferred was purchased by Nationwide Financial Services. National Deferred, although owned by Nationwide Financial, remains a stand -alone subsidiary. National Deferred remained the manager of the City's deferred compensation plan and the 1993 agreement remained fully intact, unchanged, and enforceable. To simplify communications National Deferred discontinued the use of the name Fund Select. In July 1999 the City Deferred Compensation Advisory Board received notification from Washington Mutual Bank of their intent to discontinue the administration of 457 Deferred Compensation Plans and assign the administration of their existing programs to National Deferred Compensation. The proposed "Assignment Agreement" keeps the City's 1993 agreement fully intact, unchanged, and enforceable. Washington Mutual will contract with National Deferred Compensation to provide the FDIC liquid savings and Certificate of Deposit accounts. National Deferred Compensation is the country's largest administrator of public sector deferred compensation plans. The assignment change will not change any of the City's current investment options, administrative services, or plan management expenses. National Deferred has pledged to enhance certain administrative services such as asset allocation services and Internet service. The City Deferred Compensation Advisory Board endorses the proposed change of assignment. FINANCIAL IMPACT: None RECOMMENDATIONS: Adopt resolution Attachment A: "Assignment of Deferred Compensation Plan Administration Agreement" 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 COPY RESOLUTION NO. RESOLUTION OF THE CITY OF SAN BERNARDINO AUTHORIZING THE EXECUTION OF AN AGREEMENT WITH NATIONAL DEFERRED COMPENSATION, INC FOR SERVICES AS ADMINISTRATOR OF THE CITY'S DEFERRED COMPENSATION PLAN BE IT RESOLVED BY THE MAYOR AND COMMON COUNCIL OF THE CITY OF SAN BERNARDINO AS FOLLOWS: SECTION 1. The Mayor of the City of San Bernardino is hereby authorized and directed to execute on behalf of said City an agreement with National Deferred Compensation for services as administrator of the City's Deferred Compensation Plan, a copy of which is attached hereto, marked Attachment "A" and incorporated herein by reference as fully as though set forth at length. SECTION 2. The authorization granted hereunder shall expire and be void and of no further effect if the agreement is not executed by both parties and returned to the Office of the City Clerk within sixty (60) days following the effective date of the resolution. 1 I 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 RESOLUTION NO. RESOLUTION OF THE CITY OF SAN BERNARDINO AUTHORIZING THI EXECUTION OF AN AGREEMENT WITH NATIONAL DEFERRED COMPENSATION INC FOR SERVICES AS ADMINISTRATOR OF THE CITY'S DEFERREI COMPENSATION PLAN I HEREBY CERTIFY that the foregoing Resolution was duly adopted by the Mayor ani Common Council of the City of San Bernardino at a meetir thereof, held on the day of , 1999, by the following vote, to w COUNCIL MEMBERS: AYES NAYS ABSTAIN ABSENT ESTRADA LIEN MCGINNIS SCHNETZ (VACANT) ANDERSON MILLER CITY CLERK The foregoing Resolution is hereby approved this day of Approved as to form and legal content: JAMES F. PENMAN, City Attorney 2 JUDITH VALLES, Mayor City of San Bernardino , 1999. ATTACHMENF A ASSIGNMENT OF DEFERRED COMPENSATION PLAN ADMINISTRATION AGREEMENT This Assignment of the Deferred Compensation Plan Administration Agreement (the "Assignment Agreement") is entered into this day of 1999 by and among Washington Mutual Bank, FA (the "Assignor ") successor by merger to Great Western Bank ("Great Western"), National Deferred Compensation, Inc. (the "Assignee ") and the City of San Bernardino ("Agency "). BACKGROUND A. The Assignor is the successor party to Great Western to a certain Deferred Compensation Plan Administration Agreement dated 199_ , by and between the Agency and Assignor. B. The Assignor was contracted to provide certain administrative, recordkeeping, reporting, enrollment_ sales and brokerage functions for the Agency's Section 457 Deferred Compensation Plan pursuant to the terms of the Deferred Compensation Plan Administration Agreement. The administrative, reporting, and recordkeeping functions were sub - contracted by Assignor to Assignee pursuant to the Administrative Service Contract dated July 1, 1993 while the enrollment, sales, and brokerage functions were sub - contracted to Assignee per the First Amendment to Administrative Service Contract dated February 24, 1997 (collectively the "Joint Sub - Servicing Agreement "). It is understood that Assignor will continue to act as a depository in regard to deferred compensation funds invested in its federally insured deposit products established prior to the date of this Assignment in accordance with the terms and conditions applicable to such deposit products. C. The Assignor now desires to assign and transfer to Assignee all of Assignor's right, title and interest in and to the Deferred Compensation Plan Administration Agreement, other than Assignor's depository functions, and Assignee desires to accept such assignment. STATEMENT OF AGREEMENT NOW, THEREFORE, in consideration of the foregoing and of the terms and conditions hereinafter set forth and for other good and valuable consideration, the sufficiency and receipt of which are hereby acknowledged, the parties, intending to be legally bound, do hereby agree as follows: 1. Assignment Assignor does hereby grant, assign, transfer, convey and deliver to Assignee, all of Assignor's right, title and interest in and to the Deferred Compensation Plan Administration Agreement accruing on or after the date of this Assignment Agreement, other than those depository functions described in Section 4.A. and 4.B. of such Agreement entitled "Investment Options ", which will continue to be performed by Assignor on or after the date of this Assignment. 2. Acceptance of Assignment Assignee does hereby accept the assignment set forth in Section 1. herein and expressly assumes and agrees to keep, perform and fulfill the terms, covenants, conditions and obligations required to be kept by Assignor under the Deferred Compensation Plan Administration Agreement. M: \Corp \1001 \assignment DRAFT.doc 3. Indemnification Assignee. its successor and assigns. hereby covenant and agree that they shall defend, indemnify and hold harmless Assignor from and against any and all claims, liabilities, damages, losses, suits, costs. and expenses of every kind, nature and type asserted by any person. entity or party attributable to events arising out of or under the Deferred Compensation Plan Administration Agreement on or after the date of this Assignment. All indemnity rights existing under the Joint Sub - Servicing Agreement are not superseded by this Assignment Agreement and shall remain in full force and effect. 4. Consent to Assignment The Agency hereby consents to the assignment set forth in this Assignment Agreement and hereby acknowledges that all rights, obligations or liabilities under the Deferred Compensation Plan Administration Agreement accruing on or after the effective date of this assignment will be the responsibility of Assignee and Assignor is expressly released from such obligations and liabilities assigned hereunder. 5. Miscellaneous This Assignment Agreement sets forth the entire understanding of the parties hereto with respect to the assignment of the Deferred Compensation Plan Administration Agreement and shall supersede all prior contracts, agreements, arrangements, communications, discussions, representations and warranties, whether oral or written, among the parties related to said assignment. The parties hereto expressly agree that the Joint Sub - Servicing Agreement is in full force and effect, provided, however, any rights, liabilities and obligations thereunder relating to Agency which accrue on or after the date hereof are terminated. This Assignment Agreement shall be binding upon and inure to the benefit of the successors and assigns of each of the parties hereto. The rights, obligations or liabilities under QW this Assignment Agreement shall not be assignable by any party without the prior written consent of each of the other parties. This Assignment Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original, and all of which when taken together shall constitute one and the same instrument. The parties agree that a facsimile signature on this Assignment Agreement shall be deemed to be an original and legally binding for contractual purposes. The failure on the part of the parties hereto to enforce any provision of this Assignment Agreement shall not be construed to be a waiver of such provision or of the right thereafter to enforce same, and no waiver of any breach shall be construed as an agreement to waive any subsequent breach of the same or any other provision. In all other respects. the Deferred Compensation Plan Administration Agreement shall remain the same. IN WITNESS WHEREOF, the parties to the Assignment Agreement have executed this instrument to be effective on the date set forth above. Nation d C pensation. Inc. Washington I A Bv: By: X'." Its: President Its: VICE kESIDENT Agency l By:_ Its: MACorp\ 1001 \assignment DRAFT.doc AGENDA DEFERRED COMPENSATION MEETING TIME: 10:00 a.m., Wednesday, July 28, 1999 PLACE: 4th Floor Conference Room "A" The City of San Bernardino recognizes its obligation to provide equal access to public services to those individuals with disabilities. Please contact Facilities Management (384 -5244) two working days prior to the meeting for any requests for reasonable accommodation, to include interpreters. (�Wov PUBLIC COMMENTS ITEMS NOT ON AGENDA: CLOSED SESSION: OPEN SESSION: 1. Quarterly Reports 2. Presentation: National Deferred Presentation by National Deferred regarding the feasibility of becoming the Plan Provider for Deferred Compensation From now on its National Deferred... City Of San Bernardino Georgia Chamberlain 300 N D St 4Th Floor San Bernardino, CA 92418 Dear Employer: Retirement and Savings Plan Administrators tkenial Deferred 1550 Old Henderson Road P.O. Box 20629 Columbus, Ohio 43220 -0629 (614) 459 -9200 Fax (614) 442 -5496 National Deferred Compensation, Inc. is pleased to announce an assignment of your Deferred Compensation Plan Administration Agreement from Washington Mutual Bank, FA, formerly Great Western Bank to National Deferred Compensation, Inc. We are pleased to continue to provide all of your administrative services as currently performed through our same National Deferred organization and staff. Washington Mutual Bank, FA will continue to provide FDIC insured investment products to your deferred compensation plan. You may recall that several years ago Washington Mutual Bank previously sub - contracted with National Deferred Compensation, Inc. to provide administrative and participant communication and education services for their clients' deferred compensation plans. In 1998, National Deferred was acquired by Nationwide Financial (NF). National Deferred is now a larger and stronger service organization due to this expanded corporate relationship. National Deferred will continue to be maintained as a "stand- alone" subsidiary of NF and the persona! "customized" service you have come to expect will also continue. Nationwide Financial which now includes National Deferred, is an outstanding organization which provides a wide array of financial products and services to deferred compensation plans totaling $23 Billion in assets with nearly 1 Million participating public employees, making it the country's largest administrator of public sector deferred compensation plans. The relationship between National Deferred and NF will provide you with the "best of both worlds ": personalized custom deferred compensation services along with access to greater resources to improve and enhance your plan. The assignment will not result in any changes to your current Plan, its investment options or administrative services. However we will be making certain administrative enhancements such as offering Internet services later this year. C� Please sign the enclosed agreement and return in the postage paid envelope provided. Please retain a signed copy for your records. After we receive your signed agreement, you will be contacted shortly thereafter to discuss any additional enhancements that may be available to your plan. We value your business and appreciate the loyalty and confidence you have placed in us over the past several years. Please call us at 1- 800 - 697 -4457 if we can answer any questions you may have before our representative calls. Sincerely, J seph M. M mann President National Deferred Compensation, Inc Enclosure (1) - Assignment Document 4 �� ��i( uane C. Meek Vice President Nationwide Financial NationalDeferred in cooperation with Washington Mutual Bank, FA National Deferred Compensation, Inc. • P. O. Box 20186 1550 Old Henderson Road Columbus, Ohio 43220 -0186 January 25, 1999 From now on its National Deferred... City of San Bernardino Daniel E. Dickerson Fire Marshal \Division Chief 200 East 3rd Street San Bernardino, Ca 92410 Dear Employer, During 1993 and 1994, Great Western Bank (now Washington Mutual Bank) contracted with National Deferred Compensation, Inc. to provide administrative services for their clients' deferred compensation plans. Two years ago, our agreement with Great Western Bank was expanded to include plan communication services through NationalDeferred's wholly owned subsidiary, FundSelect® Advisers, Inc. Since that time, Great Western Bank was purchased by Washington Mutual Bank, FA and National Deferred was acquired by Nationwide Financial Services, Inc. (NFS). Both Washington Mutual Bank and National Deferred are now larger and stronger organizations due to these expanded corporate relationships. Nationwide Financial Services, Inc. which now includes National Deferred, is an organization which provides deferred compensation services to plans totaling $20 Billion in assets with nearly 1 Million participating public employees, making it the largest administrator of public deferred compensation plans. In order to simplify the communication of our plan services, we are discontinuing the use of the name FundSelect®. Enclosed is a copy of the January 1999 issue of the "FYI" newsletter announcing this change which will be mailed with your participating employees' statements. NationalDeferred's fees are among the lowest in the industry. Unlike other service providers, Nationa I Deferred's fee structure does not depend upon certain investment product margins, revenue sharing from funds or other considerations of where funds are invested. NationalDeferred's fees are also fully disclosed. Many record keeping Deposit products are offered by Washington Mutual Bank, FA a federal savings bank. and are FDIC insured. The Stable Value Ftutd is a bank collective fund, managed by Galliard Capital Management, a wholly owned subsidi�y of Norwest Barilc of Minnesota, NA Mutual Fund products are offered through Nationwide Investment Sennces Corporation (MSC), a broker dealer cdfiliate of NationalDeferred..hutual fund products and the Stable Value Fund ore not FDIC insured, are not deposits or other obligations of, or guaranteed by Washin on Mutual Bank, FA and are subject to investment risk, including possible loss of the principal amount invested. NatlonalDeferred and Washington Mutual FA are independent companies and are not affiliated with each other, nor are they affiliated with Norwest Bank/Galliard Capital Management. Nationwide Investment Services Corporation is a member of NASD. NationalDeferred is a wholly owned subsidiary of Nationwide Financial Services, Inc. companies, who also sell proprietary investment products, do not disclose fees, or they provide incomplete information about their fees because the revenue they require for record keeping is more than covered from the profit margins they receive on the investment options they offer. National Deferred offers "unbundled" plan services, utilizing "best of class" investment options from many different fund families. NationaIDeferred does not sell proprietary products of its own. Please be assured that all current services will continue to be provided by the same organization and staff. In fact, our new affiliation will allow us to introduce more new technological enhancements in the near future. Expanded Interactive Voice Response System (IVR) capabilities, internet applications providing current account information and online transaction capability, a comprehensive asset allocation service including an optional rebalancing service, a new participant account statement, and a self directed mutual fund brokerage option are all currently in development. We appreciate your loyalty and the confidence you have placed in us. Please call us at 1- 800 - 697 -4457 if we can answer any questions about the new relationships. Sincerely, / A Bernard J. Austing Vice President, Plan Services Enclosure GREAT WESTERN BANK �u 2960 Rancho California Road Temecula. California 92591 March 17. 1998 Georgia Chamberlain City of San Bernardino 300 North D St. 4th Floor San Bernardino. CA 92418 Dear Georgia, You have probably heard that Great Western Bank has joined the Washington Mutual family of companies. This has increased our service capabilities for our valued deferred compensation customers. In April 1998, you will begin to see us use our official name, Washington Mutual Bank, FA throughout California and Florida. Washington Mutual Bank, FA is a subsidiary of Washington Mutual, Inc. which, as of 12/31/97, was the largest savings institution holding company and 11th largest depository institution holding company in the nation. Great Western has been a proud pioneer in the fast growing deferred compensation industry and has offered Section 457 products and services for over 20 years. Our Deferred Compensation Program has become part of our Specialized Sales Administration unit. We are pleased to continue to provide administration/communications services to our valued 457 deferred compensation clients through National Deferred Compensation, Inc., and its affiliate Fund/Select(& Advisers, Inc. We are committed to providing a wide array of financial products and services to your participants. We have aiteady begun working closely with our Treasury Department on deposit pricing to provide your participants with the opportunity to receive greater returns on their retirement savings. And the FDIC insures their deposit accounts up to S100,000. In addition to the new pricing of the deposit products, our Program allows your participants to choose among non -FDIC insured products offered through FundSelect® and to take advantage of their excellent communication and educational services. I will be contacting you in the near future to discuss Washington Mutual's Deferred Compensation products and services. A newsletter article will be included with your participant's first quarter statements explaining the r4me change. We look to serving you and your participants in the future. You may contact me at (909) 699 -0985. Sincerely, Milt Bledsoe Vice President & National Sales Director Washington Mutual Bank, FA Specialized Sales Administration l JUL -2S -SS 0S =27 FROM :WASHINGTON MUTUAL BANK ID- 90`Jtaa97676 in9t 13'Wa FA 27555 YNE2 ROAD. SUrTE 120 PHONE: (909) 308.7270 FaX To: Roger Poyzer Fool MILT BLEDSOE F=-- 3845789 p 3 -- TH/EC XA. CA 92561 FAX. RW 6034684 Ptumte: 3846 -M Deft Thursday. July 29. 1999 Ree Leibet to Paul Bashaw CC: Gewjia Chambertain 0364 -6043) o urgcnt 0 For Rsr:aw ❑ Please Conmmnt ❑ Piave Neph► ❑ FYI • Gores I believe that this fetter addresses the aonoefn that you m6mated at yesbm y's meeting itt the third paragraph. The cor*aa even aftr the assignment 'rtihos fi* kita:f1 unchanged. artd enforceable•. The only change is the name ftm Great W 1 Of tD National I can see no reason to rewMe the cof*2d unless there are some major changes that yQu would 6tae tO see in the way we are currently operating- If you have further questions, please call CadidwtiaW NoW The slfoarsa0on c. Vi- t0 in trta tux mtMVe is irkrtded C* for the PW00" art0 00 fider6d lee Of the desi vftd redpiertI named above_ N the reader d tttis message is root the i ftnded re *" I or an ag" reaport k for debaig t to the irti wmkd mcoeM you we barmy ^'ttat you bare rl, ^ i i , #is dOC Txxt n agar. and Out arty tsWON dsremit�tlort agnbtdott ar aopyM d the message is *Edy p dQ)om& It you have mewed In aorm>t+ticfiott it ww. pl�* no* us cmw*ak* by **phone and tabstt the acgmW message b us by n L Thm* you. M you ate rriysYtg Or umbra w mw any of the Gages Freese ql us at pw 306Q= W tare the psgrs rem[ JUL -29 -99 09,27 FROM.WASHINGTON MUTUAL HANK ID =9096997676 PAGE !lLli v V ACE � l3 tiGtil � CJ 1 C LV. r Dt1i V I1 i `, 92OO Oakdaw Aw" e A Federdi Savrgs Ba* ChatLMMOrm Ca ism—a %3n -6w � 7rS -757 FAX c8M 3dW2734 pecember 20. 1996 Cherie* Nl S1edd First vice Pte54sw Associwe mat Cov� Mr. Paul Bashaw City of San BernardnO 970 W. Marshal Boulevard San Bernardino, CA 92405 l,e. National Deferred Compensation/ FundSeleaO Advisors Expanded Role with Great Western Bank Dear Mr. Bashaw: As koxK se counsel to Great Western Bank. a Federal Savings Bank. I have been asked to Provide the folOwUV information to the Cory of San Bernardino. concesm9 the expanded role of National Deferred ComPOMKinn, kr— and its sister affWkve FundSelectO Acv s rimed to Deferred • pro �. Speci %ical �Y' I have �1 �esswhste the expansion of this Wesoer under ou< role attars in any manner the Citys legal rights with GrWestern contractual agreement to proves services to your Deferred Connpensation Plan_ The derision to expand the role of National Deferred by fufdw m&sowcng partite communicadon and compliance fug to FundSekhae will have no adverse impact wtk- asoever on the City's relationship's Great Westem- kndeed the opposite will be true. We believe the City will experience additional benefits from this rely tkxl *- The oonuva between ttm City and Great Western remairns WRY intact.• unchanged, and enforceable. The pry of Paragraphs 14 and 16 of the corners dead set forth that even thought Great Western can dekgate the performance of certain services to an 390M Great Western cetains respOnsrb�rtY for performance of the the terms of the Agreemem by such agent- in addition. City " rececve benefit of the expertise of National Deferred, a spedalty firm in the deferred compensadon market. regarding compliance, disdoSIXes, educational and marketing materials. Nabors Deferred and FundSelecte have produced vutstanduV educational pieces for other Plans• such as the State of Wisconsin's Section 457 Plan, Pieces sirrxlar to these will be made available to the Great Western Oanss- By copy of dais letter to Michael Studebaker, counsel for National OefemeCI O am requeswVd he provide YOU with some examples of educational pieces pWared 2/3 JUL -29 -99 09 =27 FROM:WASHINCTON MUTUAL BANK 0 W Pat" Bashaw December 20. IM Pape 2 ID•909699767S ,Q - I hope &a foregoing addresses the questions you raised. Please feel free to contact me if Great Westem can Provide huther information- JCmS cc: Oerurs Sadow. City Attorney .lukanne flies Michael J. SuAtbaker 3 p0G{O,WI N0.4QW b*=1A=) Very truly yours. PACE 3/3