201 S. Anaheim Blvd.
Suite #501
Anaheim, CA 92805
Tel: (714) 765-5111
Fax: (714) 765-5215
www.anaheim.net
CITY COUNCIL AGENDA REPORT
City of Anaheim
HUMAN RESOURCES DEPARTMENT
DATE: AUGUST 29, 2023
FROM: HUMAN RESOURCES DEPARTMENT
SUBJECT: PROFESSIONAL SERVICES AGREEMENT FOR CONSULTANT
SERVICES - DEFINED CONTRIBUTION PLANS
ATTACHMENT (Y/N): YES ITEM # 12
GOVERNMENT CODE § 84308 APPLIES: YES
RECOMMENDATION:
That the City Council, by Motion, approve an agreement with the Hyas Group to provide professional services and act as co-fiduciary regarding Anaheim’s Defined Contribution Programs, in a total amount not to exceed $198,776, for a three-year period with two one-year optional renewals; and authorize the City Manager to execute, and the Human Resources Director, or designee, to implement and administer the agreement.
DISCUSSION:
The City offers four defined contribution plans for its employees: a voluntary 457(b) plan for all employees, a 401(a) plan for those affected by CalPERS compensation limits, a 3121 plan for part-time employees (as a Social Security replacement plan) and a Retirement Health Savings (RHS) plan for applicable full-time employees. The Human Resources Department administers the Plans while the Deferred Compensation Committee, comprised of active employees and a retiree representative, serves as the Trustee. These plans are administered by MissionSquare Retirement.
Beginning in September 2019, the City has contracted with the Hyas Group to provide independent investment consulting, analysis of performance of funds and provider, and to ensure a continued comprehensive and diversified investment lineup with competitive pricing for city employees. The Hyas Group worked with the City to accomplish the following:
Participant investment returns = $13.2 Million.
Participant savings since 2018 = $1,927,517.
Negotiated a $50,000 transition guarantee from MissionSquare's partner for recordkeeping, digital and operational technologies.
Negotiated a MissionSquare contract extension resulting in a $36,700 annual savings.
Conducted fiduciary training and education to the Deferred Comp Committee members and deferred comp staff.
Professional Services Agreement for Consultant Services – Defined Contribution Plans August 29, 2023
Provided legal & regulatory guidance to ensure Plan compliance with federal and state laws (Setting Every Community Up for Retirement Enhancement (SECURE) 1.0, Coronavirus Aid, Relief, and Economic Security Act (CARES) Act, SECURE 2.0, update on auto-enrollment & Department of Labor (DOL issues).
Participated in the creation of the plan governance documents. Completed special projects and reports for the City at no additional cost.
If authorized, the Hyas Group, as the City’s investment consultant, would continue to:
Provide guidance and oversight to protect the City and Committee against fiduciary liability.
Advocate for best-in-class pricing for investments and plan fees. Adhere to the Plan’s Investment Policy Statement
Provide legal and regulatory support.
Conduct fiduciary training.
Conduct provider RFP when appropriate.
The total consulting services fee amounts to $198,776 which includes the following two components:
Annual Consulting Fee of $59,592 for the three-year period. This fee has increased by 4 % compared to the previous contract to account for the three-year cost of living increase.
Fee for conducting the Request or Proposal Services (RFP). This fee has undergone a reduction of 50% compared to the previous contract.
The consulting services fee will be funded through the MissionSquare Administrative Allowance Account’s plan administrative fees.
On September 2021, the Hyas Group became a separate business unit within Morgan Stanley Institutional Investment Advisors LLC. The organizational restructuring allows Hyas Group to continue to operate independently and without conflict.
IMPACT ON BUDGET:
Sufficient funds are included in the Human Resources Department Fiscal Year 2023/24 budget, supported by administration fees paid by plan participants.
Respectfully submitted,
Gretchen R. Beatty
Acting Human Resources Director
Professional Services Agreement for Consultant Services – Defined Contribution Plans August 29, 2023
Attachment:
1. Agreement with Hyas Group