1988 AGN JAN 05 I07 - Laserfiche WebLink

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CITY OF COLTON AGENDA REPORT(CONTINUED) FOR COUNCIL MEETING OF January 5 , 1987 SUBJECT: ADOPTION OF RESOLUTION N0. R-3-88, MODIFYING EXISTING DEFERRED COMPE14SATION PLAN AND ADDING THE ICMA RETIREMENT CORPORATION AS ALTERNATIVE PLAN ADMINISTRATOR We have been working with Prudential-Bache to resolve these issues; this does not seem possible, however, without the addition of City staff or a costly third party program administrator. During the next two months we will be working with Prudential-Bache and our employee associations to phase out Prudential-Bache's involvement in our deferred compensation program. Until we have reached agreement with all of the parties involved, staff is proposing that the City yconsider the International City Managers' Association Retirement Corporation as an additional investment opportunity/program admini- strator. The Retirement Corporation is a non-profit organization, organized and governed by and for public officials and employees. Over 2,250 local. government agencies currently offer this program to their_ employees, and participation may be transferred and continued when employees move - amongst various participating agencies. The Retirement Corporation currently offers four investment options: a guaranteed interest fund, a stock fund, a bond fund and a balanced bond -stock fund. Their rates and returns on investment are extremely competitive in comparisonarison withthe City's current options.ons. All of our current .investment options charge participants some type of fee. These fees are either_ ongoing monthly/quarterly/annual fees or back or front end charges and penalties for new deposits, withdrawals or option modifications. The Retirement Corporation charges a $1/month account maintenance fee to those participants contributing more than $800 a year. In addition, there is a management fee of to of the account balance, prorated monthly. These fees are basically equivalent to those charged on the City's current investment options. Since all of the Retirement Corporation's fees are prorated on a monthly basis, however, participants may move their money in and out of the program and from option to option with no additional fee or penalty. In addition, the Retirement Corporation is a deferred compensation administrator and will assure that the Cit 'srg_ legal requirements and thatparticipantam mets s aretprotectedinues to meet appropriate The current recommendation is simply to include the Retirement Corporation as an additional investment program option available to employees. During Ithe next month, we will be working with the employee associations to consolidate the number of investment options which we offer employees. As we have serious concerns about the type of services. provided by Prudential-Bache, we are also negotiating the deletion of their program from the available options. We should be returning to the Council with a number of recommendations restructuring our entire deferred compensation plan in February. Page 2 Of____L_ Item No.