REPORT/RECOMMENDATION TO THE BOARD OF SUPERVISORS
OF THE COUNTY OF SAN BERNARDINO
AND RECORD OF ACTION
March 10, 2020
FROM
DIANE RUNDLES, Director, Human Resources Department
SUBJECT
Title
Approve amendments to Stabilizer Contracts between the County of San Bernardino and Voya Retirement Insurance and Annuity Company
End
RECOMMENDATION(S)
Recommendation
Approve Amendment No. 2 to Agreement No. 14-954 between the County of San Bernardino and Voya Retirement Insurance and Annuity Company as the provider for administration, investment, and recordkeeping services for the voluntary retirement plans and the retirement medical trust plan amending the following in the plan sub-agreements to move the assets in the Stabilizer fund from the Intermediate Aggregate Plus Strategy to the Intermediate Aggregate Strategy effective April 1, 2020:
1. Stabilizer Contract for the 401(k) Defined Contribution Plan.
2. Stabilizer Contract for the 457(b) Deferred Compensation Plan.
3. Stabilizer Contract for the 401(a) Defined Contribution Plan.
4. Stabilizer Contract for the PST Deferred Compensation Retirement Plan.
(Presenter: Diane Rundles, Director, 387-5570)
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COUNTY AND CHIEF EXECUTIVE OFFICER GOALS & OBJECTIVES
Operate in a Fiscally-Responsible and Business-Like Manner.
FINANCIAL IMPACT
Approval of this item will not result in the use of Discretionary General Funding (Net County Cost). The administrative costs of preparing the amendment are minimal, and the proposed amendment will not result in a cost to the County. This recommendation amends the Stabilizer Contracts to move the assets in the Stabilizer Fund from the Intermediate Aggregate Plus Strategy to the Intermediate Aggregate Strategy effective April 1, 2020. As of December 31, 2019, there was approximately $334,945,683 of assets in the Intermediate Aggregate Plus Strategy. The new Intermediate Aggregate Strategy will lower participant expense by 0.10% from 0.44% to 0.34%, which may save participants approximately $272,000 per year in fees. Additionally, the new Intermediate Aggregate Strategy employs less risk for participants by limiting exposure to risky assets.
BACKGROUND INFORMATION
Approval of this item authorizes amendments to the County of San Bernardino’s (“County”) Stabilizer Contracts for the 401(k) Defined Contribution Plan, 457(b) Deferred Compensation Plan, 401(a) Defined Contribution Plan and the PST Deferred Compensation Retirement Plan (collectively, the “Defined Contribution Plans” or the “Plans”).
The Defined Contribution (DC) Committee is an advisory committee to the Plan Administrator (Human Resources Division Chief, Employee Benefits and Services Division) and the County Board of Supervisors, consisting of nine members from the County, associated agencies, and labor organizations including: the Auditor-Controller/Treasurer/Tax Collector, San Bernardino County Employees’ Retirement Association, County Administrative Office, Human Resources, Teamsters Local 1932, Sheriff’s Employees’ Benefit Association and other individuals appointed by the County’s Chief Executive Officer.
One investment option for participants in the Defined Contribution Plans is the stable value investment option (“Stabilizer Fund”). It seeks to preserve participant account balances and to return steady growth over time without daily fluctuations. On December 2, 2014 (Item No. 21), the Board of Supervisors (Board) approved Agreement No. 14-954, which includes Stabilizer Contracts for the Defined Contribution Plans for the period of January 9, 2015 through January 8, 2020. On July 23, 2019 (Item No. 19), the Board approved Amendment No. 1 to Agreement No. 14-954, exercising the option to extend the contract through December 31, 2021.
On August 14, 2019, the DC Committee unanimously recommended to request approval from the Board to move the assets in the Stabilizer Fund from the Intermediate Aggregate Plus Strategy to the Intermediate Aggregate Strategy in an effort to lower participant expenses and limit the level of exposure to risky assets.
PROCUREMENT
Not applicable
REVIEW BY OTHERS
This item has been reviewed by County Counsel (Jamie Ryan, Deputy County Counsel, 387-3088) on February 3, 2020; Finance (Jessica Trillo, Administrative Analyst, 387-4020) on February 19, 2020; and County Finance and Administration (Robert Saldana, Deputy Executive Officer, 387-5423) on February 25, 2020.