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Consideration of request by Human Resources Director and Finance Director for approval of contracts related to the consolidation of the City's Deferred Compensation program
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Submitted by:
John Ruggini, Finance Director
Beth Mbow, Human Resources Director
Department:
Finance Department
Human Resources Department
A. Issue
Request for approval to enter a contract with Nationwide for a deferred compensation 457(b) plan for employee retirement savings.
B. Background/Options
In January 2025, the City began a process to review and consolidate our current deferred compensation plan providers. Deferred compensation is a program that employees can choose to have funds deducted tax deferred from their paycheck and invested through a third-party provider. In the private sector, this is known as a 401K plan. In the public sector, it is a 457-plan based on the authorizing section of the federal tax code. While the assets belong to the employees, the City is considered the fiduciary. Current, retired and former employees have approximately $40 million invested in the City's plans.
Previously, the City offered three different plans for employees to consider for deferred compensation retirement savings. Having three separate plans made it difficult to market to and educate employees on this benefit and was difficult to administer at the plan level. In addition, the City had limited leverage to reduce fees. The goal of this project was to select the best single provider, so we could consolidate our plans and offer the best solution for our employees.
With assistance from a consultant, we formed a 457 Plan Advisory Committee, which consists of employees from all levels of the organization and represents departments from all throughout the City. This group has worked together since January to conduct an RFP and review the vendor proposals to make the best decision for the City and employees.
We received a total of seven vendor responses. The team worked to n...
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