HomeMy WebLinkAboutCOUNCIL - AGENDA ITEM - 08/18/2020 - RESOLUTION 2020-077 AUTHORIZING EXECUTION OF RESOLAgenda Item 15
Item # 15 Page 1
AGENDA ITEM SUMMARY August 18, 2020
City Council
STAFF
Joaquin Garbiso, Sr. Manager, Benefits
Jenny Lopez Filkins, Legal
SUBJECT
Resolution 2020-077 Authorizing Execution of Resolutions and Agreements to Finalize Transition of City-
Sponsored 401(a) Money Purchase Pension Plans, 457(b) Deferred Compensation Plans and Post-
Employment Health Plans to Nationwide Retirement Solutions, Inc.
EXECUTIVE SUMMARY
The purpose of this item is to seek Council authorization to execute resolutions, agreements and a plan
document necessary to finalize transition of City-sponsored retirement plans from one recordkeeper to
another. The agreements include adoption agreements for City-sponsored 401(a) money purchase pension
plans, 457(b) deferred compensation plans and affiliation agreements. The retirement plans were established
for City employees based upon employment classifications.
Council is asked to consider and adopt trust agreements for the 401(a) money purchase pension plans and
457(b) deferred compensation plans. Council is also asked to consider and adopt the plan document for post-
employment health plans (PEHP), offered through a Voluntary Employees’ Beneficiary Association (VEBA)
Trust, the PEHP trust agreement and resolutions prepared by Nationwide Retirement Solutions, Inc.
STAFF RECOMMENDATION
Staff recommends adoption of the Resolution.
BACKGROUND / DISCUSSION
The City Code requires the City’s purchasing agent to advertise for services such as retirement recordkeeping
and plan document services through a competitive procurement process. This allows the City the opportunity
to view what is happening nationally, what organizations are doing to stay competitive both for their employee
talent and financially and to ensure the City is offering the best benefit programs to its employees. The City’s
Retirement Governance Committee consisting of Chief Financial Officer, Chief Human Resources Officer,
Assistant City Manager, Sr. Analyst Treasury and Sr. Manager, Benefits, in partnership with Innovest Portfolio
Solutions (Investment Advisor and Co-Fiduciary) and Purchasing, went through an extensive and objective
retirement record keeping Request for Proposal. Through this process there were numerous factors
considered, such as:
• Alignment with the City’s demographics, organization and cultural fit.
• Education and engagement programs structured to engage employees using a combination of high tech,
high touch, personal service and technology helping employees plan for retirement.
• Performance metrics on client satisfaction and loyalty.
• Innovative web and mobile platforms built to help employees understand how they can best prepare for
retirement.
• Lower costs allowing more assets to stay in employees accounts.
• Investment in technology.
Agenda Item 15
Item # 15 Page 2
Effective June 1, 2020, the City entered into an administrative services agreement with Nationwide Retirement
Solutions, Inc., together with its affiliates and subsidiaries (collectively “Nationwide”), to provide retirement
recordkeeping and plan document services. The City, consistent with its required procurement process,
selected Nationwide to provide retirement recordkeeping and plan document services after a comprehensive
search for a competitive, effective retirement recordkeeper.
Previously, the City entered into intergovernmental agreements with its partners at Poudre Fire Authority
(PFA), Poudre River Public Library (Library) and Downtown Development Authority (DDA) requiring the City to
administer the payroll and retirement plans established for their employees. With this transition to Nationwide,
the City, PFA, DDA and Library have negotiated an affiliation agreement between the City and each of these
entities that, in connection with the transfer of recordkeeping and plan document services to Nationwide,
memorialize the parties’ understanding of their affiliation and respective rights and responsibilities with regard
to 401(a) money purchase pension plans and 457(b) deferred compensation plans established for the benefit
of PFA, DDA and Library employees and the Nationwide ASA. The affiliation agreements are identified as the
Affiliation Agreement between the City and Poudre Fire Authority, the Affiliation Agreement between the City
and the Downtown Development Authority and the Affiliation Agreement between the City and Poudre River
Library District.
The adoption agreements describe how each plan must be administered, including but not limited to each
plan’s eligibility requirements; the type, amount and method of contributions allowed in each plan; the
contribution vesting schedules and distribution options. The adoption agreements for each of the plans are
identified as:
• the City of Fort Collins 457(b) Deferred Compensation Plan Adoption Agreement; and
• the City of Fort Collins 401(a) Service Directors’ and Council Employees’ Plan; and
• the City of Fort Collins 401(a) Police Plan; and
• the City of Fort Collins 401(a) Unclassified and Classified Employees’ Plan.
The Nationwide Trust Agreements for the 401(a) and 457(b) plans identify how funds in each plan must be
held in trust or variable annuity. This agreement allows the plan to use Nationwide Trust Company’s services
to meet this requirement. The trust agreements for each of the 401(a) and 457(b) plans are identified as:
• the City of Fort Collins 457(b) Deferred Compensation Plan Trust Agreement; and
• the City of Fort Collins 401(a) Service Directors’ and Council Employees’ Plan Trust Agreement; and
• the City of Fort Collins 401(a) Police Plan Trust Agreement; and
• the City of Fort Collins 401(a) Unclassified and Classified Employees’ Plan Trust Agreement.
The PEHP Plan document describes the terms of the Plan. The PEHP requires the establishment of a
Voluntary Employees’ Beneficiary Association Trust. Nationwide requires the consideration and approval of a
resolution for each PEHP, identified as:
• the City of Fort Collins Police Plan; and
• the City of Fort Collins Police Inactive Plan; and
• the City of Fort Collins FOP Inactive Plan; and
• the City of Fort Collins Unclassified and Classified Plan.
These documents, along with other related documents, have been extensively reviewed by our internal legal
department along with qualified outside counsel.
City staff, Nationwide staff and legal counsel have worked diligently with ICMA-RC personnel to effectuate a
smooth transition of assets held in each of the Plans and to remap each Plan from its existing Plan document
onto the respective volume submitter governmental 401(a) money purchase pension plan, Section 457(b)
deferred compensation plan or Post-Employment Health Plan documents (as applicable) maintained by
Nationwide.
Agenda Item 15
Item # 15 Page 3
CITY FINANCIAL IMPACTS
As a part of this process, costs of services were reduced.
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RESOLUTION 2020-077
OF THE COUNCIL OF THE CITY OF FORT COLLINS
AUTHORIZING EXECUTION OF RESOLUTIONS AND AGREEMENTS TO
FINALIZE TRANSITION OF CITY-SPONSORED 401(a) MONEY PURCHASE
PENSION PLANS, 457(b) DEFERRED COMPENSATION PLANS
AND POST-EMPLOYMENT HEALTH PLANS TO
NATIONWIDE RETIREMENT SOLUTIONS, INC.
WHEREAS, the City of Fort Collins (City) previously established 21 qualified 401(a)
money purchase pension, 457(b) deferred compensation and retiree health savings plans (the
“Plans”) for the benefit of certain City employees based upon employment classifications;
and
WHEREAS, the City entered into various administrative and trust agreements with
International City Management Association Retirement Corporation ("ICMA-RC") with
respect to administrative, recordkeeping and custodial services for the Plans; and
WHEREAS, the City recently, consistent with its required procurement process,
selected Nationwide Retirement Solutions, Inc., along with its affiliates and subsidiaries
(collectively “Nationwide”) to provide administrative, recordkeeping and custodial services
for the Plans, after a comprehensive search for a competitive, effective retirement
recordkeeper; and
WHEREAS, effective June 1, 2020, the City entered into an administrative services
agreement with Nationwide (“Nationwide ASA”); and
WHEREAS, City staff members, Nationwide staff members and legal counsel have
worked diligently with ICMA-RC personnel to effectuate a smooth transition of assets held
in each of the Plans and to remap each Plan from its existing Plan document onto the
respective volume submitter governmental 401(a) money purchase pension plan, Section
457(b) deferred compensation plan or Post-Employment Health Plan documents (as
applicable) maintained by Nationwide; and
WHEREAS, the City previously entered into intergovernmental agreements with the
Poudre Fire Authority, an independent governmental entity (“PFA”), the Fort Collins,
Colorado Downtown Development Authority, a body corporate and politic (“DDA”), and the
Poudre River Public Library District, an independent governmental entity (“Library”), and
such intergovernmental agreements call for the City to administer payroll and public
retirements plans for PFA, DDA and Library; and
WHEREAS, Colorado Revised Statutes § 24-51-101, et seq., generally permits local
government entities to affiliate with retirement plans established by municipalities; and
WHEREAS, the City has negotiated with PFA, DDA and Library an affiliation
agreement between the City and each of these entities that, in connection with the transfer of
recordkeeping and plan document services to Nationwide, memorializes the parties’
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understanding of their affiliation and respective rights and responsibilities with respect to
401(a) money purchase pension plans and 457(b) deferred compensation plans established for
the benefit of PFA, DDA and Library employees and the Nationwide ASA; and
WHEREAS, this Resolution comes before City Council to authorize execution of
affiliation agreements with each affiliated entity in accordance with the terms agreed upon by
the City and each affiliated entity, including the Affiliation Agreement between the City and
Poudre Fire Authority, the Affiliation Agreement between the City and the Downtown
Development Authority, and the Affiliation Agreement between the City and the Poudre River
Library District (collectively, the “Affiliation Agreements”), substantially in the form shown
on Exhibit A, attached hereto and incorporated herein by this reference; and
WHEREAS, the City, as the employer sponsoring the Plans, with Nationwide’s
assistance, developed adoption agreements for each of the Plans that set out the rules that
apply to each such Plan, including but not limited to the Plan’s eligibility requirements; the
type, amount and method of contributions allowed in each Plan; the contribution vesting
schedules and distributions options, including:
• the City of Fort Collins 457(b) Deferred Compensation Plan Adoption Agreement;
• the City of Fort Collins 401(a) Service Directors’ and Council Employees’ Plan
Agreement; and
• the City of Fort Collins 401(a) Police Plan Agreement; and
• the City of Fort Collins 401(a) Unclassified and Classified Employees’ Plan
Agreement; (collectively, the “City 401(a) and 457(b) Adoption Agreements”),
substantially in the form shown on “Exhibit B,” attached hereto and incorporated
herein by this reference; and
WHEREAS, the City and Nationwide developed trust agreements for the 401(a) and
457(b) Plans that describe the terms and conditions of establishing trusts, the custody of trust
assets, and the maintenance of trust assets for the exclusive benefit of the City’s employees or
their beneficiaries, including:
• the City of Fort Collins 457(b) Deferred Compensation Plan Trust Agreement;
• the City of Fort Collins 401(a) Service Directors’ and Council Employees’ Plan Trust
Agreement; and
• the City of Fort Collins 401(a) Police Plan Trust Agreement; and
• the City of Fort Collins 401(a) Unclassified and Classified Employees’ Plan Trust
Agreement;
(collectively, the “City 401(a) and 457(b) Trust Agreements”), substantially in the form
shown on “Exhibit C,” attached hereto and incorporated herein by this reference; and
WHEREAS, in the process of drafting the adoption and trust agreements, City and
Nationwide staff members identified an opportunity to reduce the number of Plans and the
burden of administering the original number of Plans by consolidating the Plans to 8 in
number; and
WHEREAS, in order to effect the consolidation of Plans, the City resolves to merge
certain of the Plans, effective as of September 18, 2020, in accordance with the requirements
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of applicable Internal Revenue Code and Colorado Revised Statutes provisions, and direct
that associated administrative documents be executed; and
WHEREAS, after conferral with representatives of the Fraternal Order of Police
Lodge No. 3, the City is transferring assets held in retiree health savings plans on behalf of
employees in the collective bargaining agreement between the City and the Fraternal Order
of Police Lodge No. 3 to Post-Employment Health Plans offered through a Voluntary
Employees’ Beneficiary Association Trust; and
WHEREAS, the City and Nationwide developed a Voluntary Employees’ Beneficiary
Association Trust Agreement for the Post-Employment Health Plans that describes the terms
and conditions of such trust, substantially in the form shown on Exhibit D, attached hereto and
incorporated herein by this reference; and
WHEREAS, the City and Nationwide developed a plan document for the Post
Employment Health Plan, the “City Post-Employment Health Plan,” substantially in the form
shown on Exhibit E, attached hereto and incorporated herein by this reference; and
WHEREAS, the City and Nationwide developed adopting resolutions for each of the
Post-Employment Health Plans including:
• the City of Fort Collins Police Plan Resolution; and
• the City of Fort Collins Police Inactive Plan Resolution; and
• the City of Fort Collins FOP Inactive Plan Resolution; and
• the City of Fort Collins Unclassified and Classified Plan Resolution; and
(collectively, the “City Post-Employment Health Plan Resolutions,” substantially in the form
shown on Exhibits F, attached hereto and incorporated herein by this reference; and
WHEREAS, by resolution, the City Council adopted an investment policy that grants
authority to the City’s Chief Financial Officer to adopt administrative procedures, with City
Manager approval, to accomplish operation of the City Council-approved investment policy;
and
WHEREAS, pursuant to such authority, the City’s Chief Financial Officer, with the
City Manager’s approval, adopted a financial administrative procedure that created a
governance committee with investment oversight responsibility; and
WHEREAS, the Plans may require amendments that are largely ministerial or
administrative in nature, such as an amendment to reflect a change in tax law, and authorizing
the Governance Committee to make such amendments would not infringe on the City’s full
authority to amend the Plans; and
WHEREAS, the adoption of the Plan, Agreements and Resolutions as described
herein and as offered by Nationwide will result in reduced recordkeeping and plan document
management service costs to the City.
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NOW, THEREFORE, BE IT RESOLVED BY THE COUNCIL OF THE CITY OF
FORT COLLINS as follows:
Section 1. That the City Council hereby makes any and all determinations and
findings contained in the recitals set forth above.
Section 2. That the Council makes the following Plan merger resolutions effective as
of September 18, 2020:
(1) that the City of Fort Collins Council Employees’ Plan and the City of Fort Collins
Service Director’s Plan shall be merged, in accordance with applicable requirements of the
Internal Revenue Code and Colorado law, to form the City of Fort Collins Service Directors'
and Council Employees' Plan; and
(2) that The City of Fort Collins Unclassified Management Plan and The City of Fort
Collins Classified Employees’ Plan shall be merged, in accordance with applicable
requirements of the Internal Revenue Code and Colorado law, to form the City of Fort
Collins Unclassified Management and Classified Employees' Plan.
Section 3. That immediately after the Plan mergers referenced above in Section 2,
each participant shall have an account balance in the merged Plan equal to the account
balance each participant had in the merging Plan immediately prior to the merger. The
mayor is hereby authorized to execute on behalf of the City any administrative documents
necessary, including transfer and assignment documents, to effectuate said plan mergers.
Section 4. That the Mayor is hereby authorized to execute on behalf of the City
each of the Affiliation Agreements attached hereto as Exhibit “A.”
Section 5. That the Mayor is hereby authorized to execute on behalf of the City
each of the City 401(a) and 457(b) Adoption Agreements attached hereto as Exhibit “B.”
Section 6. That the Mayor is hereby authorized to execute on behalf of the City
each of the City 401(a) and 457(b) Trust Agreements attached hereto as Exhibit “C.”
Section 7. That the Mayor is hereby authorized to execute on behalf of the City the
Voluntary Employees’ Beneficiary Association Trust Agreement attached hereto as Exhibit “D.”
Section 8. That the Mayor is hereby authorized to execute on behalf of the City
the City Post-Employment Health Plan attached hereto as Exhibit “E.”
Section 9. That the Mayor is hereby authorized execute on behalf of the City the
City Post-Employment Health Plan Resolutions attached hereto as Exhibit “F.”
Section 10. That the assets of the City-sponsored Plans shall continue to be held and
maintained in trust, with the City serving as trustee, for the exclusive benefit of the Plans'
participants and their beneficiaries, and the assets shall not be diverted to any other purpose.
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Section 11. That the Governance Committee is authorized to make ministerial or
administrative amendments to the Plans, as may be required from time to time, to reflect
changes in tax law and to make amendments that the Governance Committee believes are
necessary and appropriate; provided, however, that the City Council otherwise retains its
full authority to amend the Plans.
Section 12. That the Governance Committee is authorized to sign such other
documents ancillary to the transition of the Plans to Nationwide as necessary to carry out the
arrangements described in this Resolution and the attachments to it.
Passed and adopted at a regular meeting of the Council of the City of Fort Collins this
18th day of August, A.D. 2020.
_________________________________
Mayor
ATTEST:
_____________________________
City Clerk
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