2004 AGN DEC 07 I05 - Laserfiche WebLink

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Item #5 CITY OF COLTON AGENDA REPORT FOR THE COUNCIL MEETING OF DECEMBER 7, 2004 TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL FROM: ANTHONY ARROYO, HUMAN RESOURCES MANAGER f5 APPROVE AND ADOPT THE PROPOSED RESOLUTION AMENDING SUBJECT: RESOLUTION R-89-93, THE ADMINISTRATIVE SERVICES AGREEMENTS FOR THE ICMA RETIREMENT PLAN NUMBERS 302774 AND 108507 DATE: NOVEMBER 22, 2004 BACKGROUND: The City of Colton has an agreement with ICMA Retirement Corporation (ICMA) that established a 457 deferred compensation plan. With recently added plans such as the 401(a) and the Retirement Health Savings accounts, there has been an increase in funds to the various ICMA accounts. Participants in the various deferred compensation plans pay approximately $50,000 per year in administrative costs. DISCUSSION/ANALYSIS: Recently, the ICMA representative and City staff met to discuss the administrative costs and the increase in participation of City staff in the ICMA retirement plans. ICMA is proposing to amend the contract cutting the administrative fee from approximately 0.50% to 0.29% (a reduction of almost 50%). This reduction in the administrative fee would result in a savings of approximately $30,000 per year and as more money is invested, the savings will be greater. In exchange for a reduction in the administrative fee, ICMA is seeking an extension of five years to the contract, with the option of automatically renewing the contract at the end of the fifth year (containing a clause specifying a 60 day notice if the City seeks to terminate the contract at any time). Additionally, in order to expedite any changes that are required by the Internal Revenue Service, staff is seeking Council's approval to provide the City Manager with the authority to sign any contract amendments that are required per IRS rules and regulations. Staff will present to Council on a quarterly basis, or as needed, any changes that have been made to the ICMA agreement. ENVIRONMENTAL IMPACT: This item does not carry any environmental impact. FINANCIAL IMPACT: There is no financial impact to the City as the monies are invested into the ICMA accounts by the City on the employee's behalf.