Form Rev 3/6/2023
RESOLUTION NO. __________
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
CHULA VISTA APPROVING THE ADMINISTRATIVE
SERVICES AGREEMENT BETWEEN THE CITY AND
NATIONWIDE RETIREMENT SOLUTIONS, INC. ,
APPROVING THE DELEGATION OF PLAN SPONSOR AND
ITS DUTIES OF THE 457(B) AND 401(A) PLANS TO THE
DIRECTOR OF FINANCE /TREASURER, AND APPROVING
THE ESTABLISHMENT OF AN OVERSIGHT COMMITTEE
WHEREAS, under Section 457(b) and 401(a) of the Internal Revenue Code ( “IRC”), government entities may sponsor a deferred comp ensation plan to allow employees to defer income tax on retirement savings into future years. The City sponsors a Governmental 457(b) Deferred Compensation Plan under Section 457(b) and 401(a) Money Purchase Plan under Section 401(a) of the IRC; and
WHEREAS, under the California State Constitution, Article XVI Section 17, government entities that sponsor a 457(b) and/ or 401(a) plans, have fiduciary responsibilities as Plan Sponsors to ensure the operation and investment of the ir respective public retirement plan s are for the exclusive purpose of providing benefits to participants and beneficiaries. The fiduciary responsibilities include investing the assets of the plan, administering the plan, and engaging in a prudent process for making al l decisions related to the operation of the plan, including decisions related to the plan’s investments and related services; and
WHEREAS, the City reached out to Fiduciary Experts, LLC, the City’s fiduciary retirement plan consulting firm to conduct a blind request for information in late 2023 primarily to evaluate the administrative fees of the Plans but also to review all the terms and conditions, including but not limited to investment options, asset values, fixed account interest rates, and additional fees that may be charged by plan administrators; and
WHEREAS, after evaluations were completed, staff is recommending the City approve a renegotiated agreement with the City’s current plan administrator since 2005, Nationwide Retirement Solutions, Inc, hereinafter known as Nationwide, a Delaware Corporation and an affiliate and subsidiary of Nationwide Financial Services, Inc., under a renegotiated Administrative Services Agreement and other new terms and conditions that allows the City to obtain lower plan fees, higher competitive fixed interest rates, enhanced investment options for plan participants , and a lifetime income product for those who wish to include this into their retirement income planning; and
WHEREAS, the City desires to continue to contract with Nationwide in connection with the administration of the Plan; and
WHEREAS, the City Council desires to delegate to the Director of Finance/Treasurer the role of Plan Sponsor to carry out the fiduciary resp onsibilities of the 457(b) and 401(a) plans and Resolution No.
authorize the Director of Finance/Treasurer to establish a Deferred Compensation Plan Oversight Committee, hereinafter referred to as “the Committee” to delegate some or all of his or her administrative and fiduciary oversight duties and authority to the Committee.
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Chula Vista, that it delegates to the Director of Finance/Treasurer t he role of Plan Sponsor of the 457(b) and 401(a) plans to carry out the fiduciary responsibilities of the plan; and
BE IT FURTHER RESOLVED that the City Council may revoke or change such delegation of authority and responsibilities under one or more of the Plans at any time; and
BE IT FURTHER RESOLVED by the City Council of the City of Chula Vista, that it approves the Administrative Services Agreement for the Governmental 457(b) Deferred Compensation Plan and 401(a) Money Purchase Plan , between the City and Nationwide in the form presented , with such m inor modifications as may be required or approved by the City Attorney, a copy of which shall be kept on file in the Office of the City Clerk, and authorizes the Director of Finance/Treasurer to sign the Agreement as Plan Sponsor; and
BE IT FURTHER RESOLV ED that the Director of Finance/Treasurer is authorized to establish a Deferred Compensation Plan Oversight Committee, to delegate some or all of her administrative and fiduciary oversight duties and authority to the Committee.
Presented by Approved as to form by
Sarah Schoen Jill D.S. Maland
Director of Finance/Treasurer Lounsbery Ferguson Altona & Peak Acting City Attorney