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Proposal for Adoption of the Section 115 Trust Administered by Shuster Advisory Group Project Title: Adoption of the Multiple Employer OPEB/Pension 115 Trust Administered by Shuster Advisory Group
Prepared for: City of Vernon (“City”)
Prepared by: Shuster Advisory Group (“Shuster”)
Date: 04/24/2026
1. Firm Overview
Shuster Advisory Group is an independent, SEC-registered investment advisory firm specializing in Section 115 Trust administration and investment management for California public agencies. We serve as a full fiduciary to trust assets — acting solely in the best interest of each agency — providing discretionary investment management, trust administration, and ongoing compliance oversight for Other Post-Employment Benefits (“OPEB”) and pension prefunding programs. Our program offers individual (non-pooled) accounts, fully customizable investment portfolios, complete fee transparency, and dedicated local service, supported by Charles Schwab Trust Bank as Custodian and Alta Trust as Directed Trustee.
2. Scope of Work
Trust Administration and Investment Advisory Services
A. Shuster will serve as Trust Administrator and discretionary Investment Advisor and Fiduciary for the City’s Section 115 Trust. Shuster will perform the following services:
1. Coordinate all aspects of Trust establishment.
2. Develop and maintain a customized Investment Policy Statement tailored to the City’s OPEB funding objectives, risk tolerance, and liquidity needs.
3. Provide discretionary investment management of trust assets in accordance with the approved Investment Policy Statement, including portfolio construction, ongoing monitoring, and quarterly rebalancing.
4. Coordinate contributions to and qualified distributions from the Trust, including processing of all required documentation and coordination with the custodian, Charles Schwab Trust Bank.
5. Provide quarterly investment performance reports and account statements, including GASB 75- compliant reporting to support the City’s annual financial reporting obligations.
6. Monitor federal and state regulatory compliance requirements applicable to the Trust on an ongoing basis and keep the City informed of relevant changes.
7. Provide general fiduciary consulting, including analysis of funding strategies, asset allocation recommendations, and availability for staff and City Council presentations as needed.
3. Cost Proposal
The fees for all services provided by Shuster as Trust Administrator and Investment Advisor, Charles Schwab Trust Bank as Custodian, and Alta Trust Company as Trustee are detailed below. Fees are to be invoiced directly to the Trust assets unless otherwise directed by the City.
Trust Administration Fees (This Agreement)1
: 0.01%
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Trustee Fees (Trust Adoption Agreement)2: 0.02%
Custodial Asset Based Fee (Custodial Agreement)3
: 0.01%
Investment Advisory Fees (Investment Advisory Agmt.): 0.08% Fees will be collected quarterly other than the Investment Advisory Fee which will be collected monthly.
1 - Will convert to a flat dollar fee after the end of contract year-3 based on the highest year-end balance of the first 3 contract years.
2 - Annual maximum fee per plan of $5,000.
3 - Annual minimum fee per plan of $400. Custodian may also charge fees related to non- standard assets, checks and wire fees outlined in the Custodial Agreement for the Plan.
4. Agreement
Upon the City’s acceptance of this proposal, the parties will execute a Trust Adoption Agreement, Trust Administrative Services Agreement, and Investment Advisor Agreement agreed upon by the City and Shuster.
Shuster Advisory Group looks forward to the opportunity to serve the City of Vernon.