CITY OF SAN MATEO
CITY OF SAN MATEO
Agenda Report
City Hall
330 W. 20th Avenue
San Mateo CA 94403
www.cityofsanmateo.org
Agenda Number: 8 Section Name: CONSENT CALENDAR Account Number: 10-2313 File ID: 25-10541 TO: City Council
FROM: Alex Khojikian, City Manager
PREPARED BY: Human Resources Department
MEETING DATE: November 17, 2025
SUBJECT:
Deferred Compensation Program Administrator and Investment Advisory Services Consultant — Approval RECOMMENDATION:
Adopt a Resolution to approve two agreements to continue a partnership with: 1) Voya Financial Retirement Solutions to administer the City's deferred compensation program for employees and retirees for the period of November 17, 2025 to October 31, 2030, with three (3) one (1)-year extension options, and 2) NFP to provide defined contribution plan and investment advisory services for the period of November 3, 2025 to September 30, 2030, with three 1-year extension options; and authorize the City Manager to execute the agreements.
BACKGROUND:
Voya Financial Retirement Solutions
On March 16, 2015, the City Council adopted a Resolution approving a service agreement with Voya Financial Retirement Solutions (Voya) to provide the City’s deferred compensation program for employees and retirees. The original agreement between the City of San Mateo and Voya was for a five (5)-year term from May 1, 2015, to April 30, 2020. On July 20, 2020, Council authorized amendments to the agreement with Voya Financial Retirement Solutions that extended services from May 1, 2020 to May 31, 2025. The amendment included a Resolution to adopt the use of an alternative purchasing procedure. Since then, the City has continued to receive services from Voya.
Staff requests for approval of the purchase pursuant to SMMC 3.60.070(h)(3), which allows the Council to use any purchasing process that is in the best interest of the City. On an ongoing basis, the City’s deferred compensation committee reviews the services provided by Voya and the investment options offered to plan participants. As a part of this process, NFP, the City’s investment advisor for deferred compensation, performed an analysis of the costs associated with the program and provided the analysis to the deferred compensation committee for review. The committee found that from an overall cost perspective our existing agreement with Voya was competitively priced and provided the services required from a record keeper.
Prior to our contract conclusion, Voya proactively offered to extend our agreement and proposed a fee reduction as a part of a new agreement. By continuing this relationship, participants will benefit from a reduced fee structure, which will enhance their retirement savings overall. Additionally, by not transitioning to another vendor, participant accounts are not impacted by a move to a new vendor. The City’s relationship with Voya is in the best interest of the City’s participants.
Therefore, the City’s deferred compensation committee recommends retaining Voya and moving forward under a new 5- year services agreement given our satisfaction with the services Voya provides, the proposed reduction in record keeping fees, and the competitive nature of these fees. This agreement would commence on November 17, 2025 to October 31, 2030, with three 1-year extension options.
CITY OF SAN MATEO
NFP
The City Council adopted a Resolution approving a service agreement (effective January 1, 2022) with NFP to provide: 1) defined contribution plan and investment advisory services, and 2) professional oversight, co-fiduciary status, and Committee meeting coordination with various parties to the plan, namely the recordkeeping provider. The original agreement between the City of San Mateo and NFP was for a five-year term from January 1, 2018 to December 31, 2022.
Although our contract expired on December 31, 2022, the City has been receiving services from NFP (previously from SST Benefits Consulting & Insurance Services, Inc.; since then been acquired by NFP).
NFP assists with monitoring plan performance, maintaining regulatory compliance, and offering employees access to professional investment guidance. NFP periodically reviews its advisory fee to ensure it remains fair and competitive. In June 2025, NFP prepared a Retirement Plan Fee Benchmarking Analysis comparing advisory service fees across similar type plans. The study found that NFP’s fee has been significantly below the average, as well as below the lower band, plans within our peer group. The average advisory fee for a plan of our size is roughly $108,000.
Staff requests for approval of the purchase pursuant to SMMC 3.60.070(h)(3), which allows the Council to use any purchasing process that is in the best interest of the City. Continuing the service agreement with NFP overseeing the City’s Defined Contribution Plan provides continuity in investment oversight, compliance support, and participant education.
Therefore, staff recommends continuing with NFP to provide defined contribution plan and investment advisory services to the City’s deferred compensation program for our employees and retirees for the period of November 17, 2025 to October 31, 2030, with three (3) one (1)-year extension options.
BUDGET IMPACT:
Voya Financial Retirement Solutions
There is no budget impact for approving the agreement with Voya Financial Retirement Solutions. The service costs are paid by the plan participants.
NFP
The quarterly reimbursement for plan expenses from VOYA (about $55,000) will offset the cost of the NFP contract ($40,000 per year).
ENVIRONMENTAL DETERMINATION:
This agreement is not a project subject to CEQA, because it is an organizational or administrative activity that will not result in direct or indirect physical changes in the environment. (CEQA Guidelines Section 15378(b)(5).)
NOTICE PROVIDED
All meeting noticing requirements were met.
ATTACHMENTS
Att 1 – Proposed Resolution
Att 2 – Voya 2025 Administrative Services Agreement
Att 3 – NFP 2025 Administrative Services Agreement
STAFF CONTACT
Gizelle Huynh,
[email protected]
(650) 522-7271