Memorandum
City of Lawrence
Administrative Services Department
TO: |
Dave Corliss, City Manager |
FROM: |
Frank Reeb, Administrative Services Director |
CC: |
Lori Carnahan, Personnel Manager Beth Frailey Krishtalka, Management Assistant |
Date: |
April 4, 2007 |
RE: |
457 Deferred Compensation Plan |
Please include the following item on the City Commission Consent Agenda for consideration on April 10, 2007.
Project Description. Established 1974, the City’s 457 Deferred Compensation Plan (Plan) has been provided to employees through an arrangement with ICMA Retirement Corporation (ICMA-RC). Last fall, staff conducted a first-time market survey of 457 plan provider administrative, recordkeeping and investment services. On January 23, 2007, the City Commission accepted staff’s report and unanimously approved staff’s recommendation to change the Plan provider arrangement from ICMA RC to Diversified Investment Advisors (Diversified).
Project History.
July 20, 2006 |
Request for Proposals issued. |
August 18, 2006 |
Last day to submit proposals. |
October 12, 2006 |
On-site presentations by top three finalists. |
January 23, 2007 |
Report and Recommendation to City Commission. |
April 24, 2007 |
Last date for participant account changes prior to Plan conversion. |
May 1, 2007 |
Conversion of Plan assets from ICMA-RC to Diversified |
Project Details. This change in the Plan’s provider arrangement involves the termination of the current services arrangement and Plan trust with ICMA-RC and the establishment of a new services arrangement with Diversified concurrent with the appointment of Investors Bank and Trust Company (Investors) as successor trustee. With the possible exception of assets currently invested in the ICMA-RC stable value PLUS Fund, all Plan assets will transfer to Diversified on or about May 1, 2007. Due to the guaranteed investment contract characteristics of the PLUS Fund, ICMA-RC reserves the right to fund an employer withdrawal from this Fund over a 12-month period depending on market conditions.
Project Funding. Related consulting and legal services are being paid from budgeted Personnel Division funds. Diversified is covering any applicable redemption fees assessed against any participant deferred contribution investments as well as an early withdrawal penalty assessed against the single certificate of deposit Plan asset held by ICMA-RC, which will also be liquidated as part of the conversion.
Action Requested. Approve Resolution 6713 removing ICMA-RC as the provider and appointing Diversified as the successor provider with respect to administrative, recordkeeping and investment services; removing ICMA-RC as trustee and appointing Investors as the successor trustee; and delegating to the City Manager and delegatees such authority as may be needed to implement the above actions and such other actions as may be necessary with respect to the administrative and investment oversight of the Plan.
Please let me know if there are any questions.
Respectfully submitted,
Frank S. Reeb, City Clerk/Administrative Services Director