SUBJECT/RECOMMENDATION:
Title
Approve the Second Amendment between the City of Clearwater and the International City Management Association Retirement Corporation (ICMA-RC) dba MissionSquare Retirement (MissionSquare) to provide administrative services as Administrator of the City 401a Money Purchase Pension Plan and the voluntary 457 Deferred Compensation Plan, for the term June 1, 2024 through May 31, 2029, pursuant to RFP 16-18 and Clearwater Code of Ordinances Section 2.563(1)(d), Non-Competitive Purchase, and authorize the appropriate officials to execute same. (consent)
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SUMMARY:
MissionSquare currently administers the City’s 401a Money Purchase Pension Plan and the voluntary 457 deferred compensation program. MissionSquare was selected per RFP 16-18 issued in January 2018. In September 2018 Council approved the agreement with MissionSquare for an initial five-year term of January 1, 2019 through December 31, 2023, with the agreement automatically renewing for an additional one year period.
MissionSquare has approached the City with a proposed fee reduction for plan participants, from the current .049% to .039%, in exchange for a new five-year agreement, equating to a 20.4% decrease in the fee. The City retains the right to terminate the agreement at any time with 90 days written notice.
Staff is very pleased with the level of administrative services and employee support provided by MissionSquare and recommends approval of a new five-year agreement to take advantage of the significant fee reduction for employees/plan participants. Seeking a new vendor at this time would cause a significant disruption to employees as employees would need to transition and set up new accounts, which recently occurred in 2019. That transition process took approximately 4-6 months. For these reasons this purchase is impractical to bid. At the end of this five-year renewal, Staff intends to issue a new RFP.
The 401a Money Purchase Pension Plan is funded by City contributions on behalf of participants and is provided to those hired into exempt management positions that do not qualify for enrollment in the defined benefit pension plan. The voluntary 457 deferred compensation plan is funded by plan participants.
APPROPRIATION CODE AND AMOUNT: There is no City cost associated with this agreement, as MissionSquare administrative fees are paid by plan participants.
STRATEGIC PRIORITY:
High Performing Government: Provide evidence-based measurement tools to continually guide municipal performance and promote accountable governance. The Fiduciary Investment Committee has the responsibility to review, confirm and document the reasonableness of plan expenses and services. The significant fee reduction benefits the city and all plan participants.
Superior Public Service: Attract and retain top-quality personnel through the maintenance of a competitive compensation program. The significant fee reduction is a benefit as part of the overall compensation package to those who participate in the plan.
