City Council Agenda Report
Meeting Date: August 4, 2026
From: Alice Hui, Director of Finance/City Treasurer
Department: Finance
Submitted by: Marisela Martinez, Buyer
Subject
Participation in a Multiple Employer Other Post-Employment Benefits (OPEB)/Pension Section 115 Trust and Approval of Related Agreements with Global Retirement Partners, LLC d/b/a Shuster Advisory Group
Recommendation
A. Adopt Resolution No. 2026-037 Approving the Multiple Employer OPEB/Pension Section 115 Trust administered by Shuster Advisory Group, LLC, for the purpose of pre-funding the City’s pension and OPEB obligations; and authorizing the transfer of the City’s current OPEB trust from the California Employers’ Retiree Benefit Trust (CERBT) administered by CalPERS; and B. Approve and authorize the City Administrator to execute the Trust Adoption Agreement for participation in the Multiple Employer OPEB/Pension Section 115 Trust and the related Investment Advisor Agreement with Global Retirement Partners, LLC, d/b/a Shuster Advisory Group, a HUB International Company (SHUSTER) and the Trust Administrative Services Agreement with Shuster Advisory Group, LLC, in substantially the same form as submitted.
Background
Shuster Advisory Group, LLC (Shuster) is an independent investment advisory firm and fiduciary specializing in providing governmental and institutional retirement plan consulting services, as well as private wealth management. Shuster is a Securities and Exchange Commission (SEC)- registered investment adviser with more than $11 billion in assets under management and serves the unique needs of governmental agencies and special districts. The firm serves as an investment fiduciary for more than 100 governmental agencies and special districts, providing investment selection, monitoring, and management, along with retirement plan consulting and participant services.
Shuster currently serves as the City’s fiduciary investment advisor and plan consultant for the City’s 457(b) deferred compensation plan. The firm’s low-cost, transparent fee structure and high level of customer service have resulted in an 86% reduction in the plan’s recordkeeping and administrative plan costs while significantly improving the quality and variety of investment options available to employees. Shuster also negotiated a higher crediting rate for the plan’s stable value investment option. Based on the reduction in administrative fees alone, the City estimates projected savings of approximately $1.2 million over 10 years, $4.3 million over 20 years, and $11.3 million over 30 years. These estimates do not include any potential additional investment gains resulting from the improved investment options.
Based on Shuster’s analysis of the Section 115 Trust marketplace, the firm concluded that many existing programs provide limited investment flexibility, customization, transparency, and customer service while charging higher administrative fees than necessary. In response, the firm developed a Section 115 Trust program intended to provide governmental agencies with greater investment flexibility, enhanced service, and competitive pricing. Based on the City’s experience with Shuster’s administration of the 457(b) plan, staff anticipates a similar level of service and oversight should the City elect to utilize Shuster’s Section 115 Trust.
Assets held in a Section 115 Trust are irrevocably committed for the government purpose in the applicable trust agreement. Additionally, assets held in such trusts are invested under rules specific to those trusts rather than the investment restrictions applicable to the City’s pooled investments under California Government Code Section 53601. This broader investment authority provides greater flexibility in developing an investment strategy and may allow the trust assets to achieve higher long-term returns than funds invested solely under Section 53601 guidelines, although investment returns are not guaranteed.
The City currently has an agreement with California Public Employee’s Retirement System (CalPERS). CalPERS offers two Section 115 trust programs, the California Employers’ Retiree Benefit Trust (CERBT) for funding OPEB liabilities and the California Employers’ Pension Prefunding Trust (CEPPT) for funding future pension liabilities. Both Trusts charge employers a single fee to cover all program costs. CERBT offers three diversified asset allocation strategies, while CEPPT offers two diversified asset allocation strategies. Although these programs generally have lower fees than comparable programs offered by Public Agency Retirement Services (PARS) and Shuster, they provide fewer investment strategy options. Historically, the reported long-term returns of the CERBT and CEPPT investment strategies have exceeded those of the State‘s Local Agency Investment Fund (LAIF) and the Los Angeles County investment pool, but have generally been lower than those reported by comparable investment strategies offered by PARS and Shuster. Assets held within the CalPERS trust programs are commingled with those of other participating public agencies for investment purposes and are valued on a monthly basis. As a result, participating agencies have limited flexibility to customize investment strategies or asset allocations to meet their specific objectives. In contrast, Shuster’s Section 115 Trust allows the City to maintain a separately managed trust and offers a minimum of 10 investment strategies, including both actively managed and passive (index) portfolios. The trust is valued daily and may also be customized to meet the City‘s investment objectives at no additional cost.
The City is not required to remain with its current Section 115 Trust provider and may transfer its trust assets to another provider at any time, subject to the applicable trust agreements. When the City originally established its CalPERS Section 115 Trust, there were relatively few providers offering comparable services. Since then, the Section 115 Trust marketplace has expanded, providing public agencies with additional investment and service options. Compared to the City’s current CalPERS program, the proposed Shuster trust offers lower administrative costs, a broader range of investment options, and greater flexibility to customize investment strategies based on the City’s objectives and risk tolerance.
Staff evaluated Shuster’s proposal (Attachment 3) against the City’s current CalPERS Section 115 Trust program and determined that the proposed program offers several advantages, including customizable investment portfolios, the ability to adjust investment strategies as market conditions and the City’s risk tolerance changes, and access to a diverse selection of investment managers, including Fidelity, Vanguard, American Funds, BlackRock, PIMCO, etc. Shuster offers ten investment strategies that combine both active and passive (index) investment options and will also develop a customized portfolio for the City at no additional cost. Based on staff’s evaluation, transferring the City’s Section 115 Trust assets from CalPERS to Shuster would provide the City with greater investment flexibility and competitive administrative fees while maintaining comprehensive fiduciary and investment advisory services, including:
• Investment fiduciary services
• Consolidated full fee transparency
• Customizable investment options
• Individual accounts
• Daily account valuation and access
• Blend of active and passive investment options
• Private equity/debt (optional)
• GASB compliant reporting
• Dedicated local service team
• Direct access to portfolio management team
Based on staff’s evaluation, transferring the City’s existing OPEB Section 115 Trust from CalPERS to Shuster is expected to provide greater investment flexibility, enhanced fiduciary services, competitive administrative fees, and expanded investment options while continuing to support the City’s long-term strategy for funding its OPEB obligations.
In addition to adoption of Resolution No. 2026-037, City Council approval of related agreements is necessary to effectuate the City’s participation in the Multiple Employer OPEB/Pension 115 Trust administered by Shuster. Such agreements include the Trust Adoption Agreement as well as an Investment Advisor Agreement with Global Retirement Partners, LLC, d/b/a Shuster Advisory Group, a HUB International Company (SHUSTER) and a Trust Administrative Services Agreement with Shuster Advisory Group, LLC. The Investment Advisor Agreement and Trust Administrative Services Agreement are incorporated as Exhibits to the Trust Adoption Agreement (Attachment 2).
The proposed agreements may be awarded without competitive bidding. The City of Oxnard currently has a contract with Shuster for the Multiple Employer OPEB/Pension 115 Trust Advisory Services which allows the City to piggyback for the scope of services and fees. Pursuant to Vernon Municipal Code (VMC) Section 3.32.110 (A)(5) competitive bidding and competitive selection shall not be required when contracts for supplies, equipment or services can be purchased in cooperation with other public agencies where services can be purchased from a vendor offering the same prices, terms and conditions.
A total combined fee of 12 basis points (0.12%) of each trust’s portfolio will be charged for trust administration, trustee, custodial, and investment advisory services. The Trustee fee is subject to an annual maximum of $5,000 per plan, the Custodial fee is subject to a minimum annual fee of $400 per plan, and the Trust Administration fee will convert to a flat annual dollar amount after the third contract year based on the highest year-end trust balance during the first three contract years. All fees will be netted against investment earnings and allocated to each trust account based on its investment balance.
Resolution No. 2026-037 and the related Trust Adoption Agreement, Investment Advisor Agreement, and Trust Administrative Services Agreement were reviewed and approved as-toform by the City Attorney’s Office.
Strategic Plan Goals
Goal 5: Strengthen Organizational Efficiency and Financial Planning Fiscal Impact
There is no direct fiscal impact by the approval of the OPEB Trust provider. Annual administrative fees associated with the trust will be paid from trust assets, including investment earnings and City contributions, and are not expected to require additional City appropriation.
Attachments
1. Resolution No. 2026-037
2. Trust Adoption Agreement
3. Shuster Advisory Group Proposal