City Council
259 N. Wilma Avenue
Ripon, CA 95366
MEMO
To: Honorable City Council
From: Lisa Roos, City Clerk & Finance Director
Date: 10/10/2023
Subject: Strategic Retirement 457 Plan - change of Custodian RECOMMENDED ACTION:
This resolution removes Fidelity Investments and appoints Newport Trust Company as the custodian to the City of Ripon 457 Deferred Compensation Plan with Strategic Retirement and authorizes the City Administrator and City Clerk to execute the necessary documents to implement this change.
BACKGROUND:
Strategic Retirement is our advisor for one of our 457 Deferred Compensation Plans offered to employees. This plan has been offered to our employees since 2009. The Newport Group is the record keeper of this 457 Plan. They are responsible for the reconciliation of payroll contributions between the City of Ripon and the custodian of our funds, Fidelity Investments.
As of December 31, 2023, Newport Group has made the decision to no longer support plans that use external custodians. Because our Plan currently uses Fidelity Investments as our custodian, which is considered external to Newport, Newport Group is asking we appoint Newport Trust as the custodian for our plan. The other option would be for the City of Ripon to find a different record keeper for the Plan.
DISCUSSION/ANALYSIS:
Our advisor, Brent Mick with Strategic Retirement, has advised that we appoint Newport as the custodian of our Plan. Staff has deemed that this would be the most seamless adjustment because employees have their login information for their individual plans with Newport and the City makes the payroll contributions through the Newport website. Fidelity Investments is simply the “bank” that holds the funds.
Newport Trust is a wholly owned subsidiary of Newport Group, Inc., which maintains the necessary separation and appropriate controls to safeguard client information and satisfy applicable regulatory requirements. Therefore, there is no conflict with Newport serving in both roles and all plan legal requirements continue to be met to ensure the protection of City employees’ accounts.
FISCAL IMPACT:
There is no fiscal impact for this change.
Attachments:
1. WC01060_Newport Trust Company Agreement
RESOLUTION NO. 23-43
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
RIPON APPOINTING NEWPORT TRUST COMPANY AS THE
CUSTODIAN OF THE CITY OF RIPON 457 DEFERRED
COMPENSATION PLAN WITH STRATEGIC RETIREMENT
The undersigned authorized representative of City of Ripon (the “Employer”) hereby certifies that the following resolution was duly adopted by the City Council of the City of Ripon on October 10, 2023, and that such resolution has not been modified or rescinded as of the date hereof.
WHEREAS, the City of Ripon 457 Deferred Compensation Plan (the “Plan and Trust”) expressly provides the right to amend said Plan and Trust; and WHEREAS, the City Administrator and the City Clerk are authorized signors and proper representatives of the City of Ripon as both Plan Sponsors and Plan Administrators; and WHEREAS, the City of Ripon desires to amend the Plan and Trust in order to appoint Newport Trust Company (“Newport”) as nondiscretionary custodian of the Plan and Trust subject to its acceptance; and
WHEREAS, the City of Ripon desires to remove Fidelity Investments (“Current Custodian”) of the Plan and Trust.
NOW THEREFORE BE IT RESOLVED, that Newport Trust Company is appointed to act as a nondiscretionary Custodian of the trust established as part of the Plan and Trust and is authorized to hold the assets of the trust under the terms of the Custody Agreement entered into with Newport.
BE IT FURTHER RESOLVED, that the removal and resignation of the current Custodian of the Plan and Trust is hereby accepted, effective as of the date assets transfer to Newport Trust Company.
BE IT FURTHER RESOLVED, that the City Administrator and City Clerk, as proper representatives of the City of Ripon, be, and hereby are, authorized and directed to execute such instruments and to perform such other acts as they, in their discretion, deem necessary or desirable to carry out this resolution.
PASSED AND ADOPTED at a regular meeting of the City Council of the City of Ripon this 10th day of October, 2023, by the following vote:
RESULT: ADOPTED AS AMENDED BY CONSENT VOTE [UNANIMOUS]
MOVER: Daniel de Graaf, Council Member
SECONDER:Leo Zuber, Vice Mayor
AYES: Restuccia, Zuber, de Graaf, Barton, Uecker
THE CITY OF RIPON,
A Municipal Corporation
By ________________________________
MICHAEL RESTUCCIA, Mayor
ATTEST:
By: ___________________________
LISA ROOS, City Clerk