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BUDGET AND FINANCE AGENDA 12-17-12
Jl Central Contra Costa Sanitary District SPECIAL MEETING OF THE CENTRAL CONTRA COSTA SANITARY DISTRICT BUDGET AND FINANCE COMMITTEE Chair McGill Member Nejedly Monday, December 17, 2012 3:00 p.m. Executive Conference Room 5019 Imhoff Place Martinez, California INFORMATION FOR THE PUBLIC ADDRESSING THE COMMITTEE ON AN ITEM ON THE AGENDA BOARD OF DIRECTORS: JAMES A. NEJEDLY President DA V7D R. 97LLIAMS President Pro Tem PA UL H. CA USEY MICHAEL R. MCGILL TAD J. PILECKI PHONE: (925) 228 -9500 FAX.- (925) 676 -7211 www.centralsan.org Anyone wishing to address the Committee on an item listed on the agenda will be heard when the Committee Chair calls for comments from the audience. The Chair may specify the number of minutes each person will be permitted to speak based on the number of persons wishing to speak and the time available. After the public has commented, the item is closed to further public comment and brought to the Committee for discussion. There is no further comment permitted from the audience unless invited by the Committee. ADDRESSING THE COMMITTEE ON AN ITEM NOT ON THE AGENDA In accordance with state law, the Committee is prohibited from discussing items not calendared on the agenda. You may address the Committee on any items not listed on the agenda, and which are within their jurisdiction, under PUBLIC COMMENTS. Matters brought up which are not on the agenda may be referred to staff for action or calendared on a future agenda. AGENDA REPORTS Supporting materials on Committee agenda items are available for public review at the Reception Desk, 5019 Imhoff Place, Martinez. Reports or information relating to agenda items distributed within 72 hours of the meeting to a majority of the Committee are also available for public inspection at the Reception Desk. During the meeting, information and supporting materials are available in the Conference Room. AMERICANS WITH DISABILITIES ACT In accordance with the Americans With Disabilities Act and state law, it is the policy of the Central Contra Costa Sanitary District to offer its public meetings in a manner that is readily accessible to everyone, including those with disabilities. If you are disabled and require special accommodations to participate, please contact the Secretary of the District at least 48 hours in advance of the meeting at (925) 229 -7303. Budget and Finance Committee December 17, 2012 Page 2 1. Call Meeting to Order 2. Public Comments 3. Old Business a. Review staff's response to the Committee's requests for information at a previous meeting, regarding the following: *1) Updates on the following resulting from the March 29, 2012 cogeneration incident: • Insurance claim • Outage and repair costs contribution to Fiscal Year 2012 -2013 November 30, 2012 year -to -date negative variances Staff Recommendation: Review staff's response. 4. Risk Management *a. Review Loss Control Report and discuss outstanding claims Staff Recommendation: Review the report, discuss outstanding claims and provide direction if needed. *5. Receive report on previous contract work done by actuary John Bartel comparing Contra Costa County Employees' Retirement Association (CCCERA) to California Public Employees' Retirement System ( CALPERS), in particular, the mechanism and costs for moving from CCCERA to CALPERS Staff Recommendation: Receive the report and provide input if needed. *6. Review Jon Chambers' of Schultz Williams Lawson Chambers recommended plan to educate the employees, determine whether the District should go with one carrier, and to negotiate a better fee structure and fund portfolio with ICMA Staff Recommendation: Review and provide input to staff if needed. 7. Expenditures a. Review Expenditures (Item 5.b. in Board Binder) Staff Recommendation: Review and recommend Board approval. Budget and Finance Committee December 17, 2012 Page 3 *b. Review Legal Expenditure Summary Staff Recommendation: Review Legal Expenditure Summary. 8. Reports and Announcements a. Caffe Classico Foods Compliance Status (Item 8.a.1) in Board Binder) Staff Recommendation: Receive the announcement. 9. Suggestions for future agenda items 10. Adjournment * Attachment Central Contra Costa Sanitary District December 10, 2012 TO: BUDGET AND FINANCE COMMITTEE VIA: ANN FARRELL, GENERAL MANAGER FROM: SHARI DEUTSCH, SAFETY & RISK MANAGEMENT SUBJECT: 2. >. ADMINISTRATOR STATUS OF INSURANCE CLAIM FOR COGEN LOSS On March 30, 2012 the District notified its property insurance carrier of the CoGen explosion with the intent to file a claim for damages arising from the event. Since then staff has worked closely with the carrier's claims adjuster and engineering experts to coordinate the clean up, investigation, and repair to the affected property and equipment. Our primary focus was to get the CoGen system back into service. During that effort we met regularly with the insurance adjuster to make sure we did not jeopardize our coverage or proceed in a way that would limit our potential recovery. There are two types of insurance available to the District under its property policy; "Property Damage" and "Extra Expense ". Property Damage coverage reimburses the District for reasonable costs to clean up and repair the damage to our facility. This includes the hourly wages for District staff who worked on the project. Staff has submitted this portion of the claim to the insurer. The attached spreadsheet summarizes the costs incurred to respond to the CoGen loss. As noted above, the policy covers reasonable costs to respond and repair the damage. Some items designated as "investigation" costs may not be fully reimbursed because they include costs for uninsured work (i. e. legal research) or were duplicative of work already being performed (i. e. cause and origin analysis). The second page shows the total expense for clean up, investigation and repair of $677,028. We added an additional $80,496 for District staff time spent on the response and repairs and then deducted the self- insured retention of $250,000. This shows a maximum Property Damage recovery of $507,524. We anticipate the adjuster will have questions and will request additional information before we receive a settlement for this portion of our claim. Barring unforeseen complications, we expect a check to arrive within the next two months. "Extra Expense" covers the additional costs the District incurred as a result of the loss. Our only extra expense is the increased cost of electricity to operate the treatment plant since the end of March 2012. Craig Mizutani has worked diligently with our insurer's experts, Engineering Design and Testing (ED &T), to collect and analyze current and prior year records to determine the differential power cost arising from the CoGen loss. ED &T is currently working on the calculations for our review and expects to complete this work by the end of the year. Although their analysis is not yet complete, we are estimating a differential power cost of $1,000,000. This results in a maximum recovery of just over $1.5 million. Y) 7 M w N u Q `c Z N 7 W w N 5 V Q C C V V) M m D C 7 O E Q N 2 LU H 13 LU LU c O U CCi ,U O N > 00 c N — _C6 00 O ~ C m m Cl) 3 c_ v F— v c C — C O O� p O O O O O O O v CV N_ O a) C C a) N O N lC CO It N O O N (D N N O ('O M to 8 N O N N CR O O O v 0 B 2. 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E > 0 k 0 ] k 7 7) w / c / c C> 12 ® CL uj U 2/ 3 3 _ CL . �ƒ / § 0 / /Ekk swƒ S.QA') Central Contra Costa Sanitary District December 13, 2012 TO: BUDGET AND FINANCE COMMITTEE VIA: CURT SWANSON, DIRECTOR OF OPERATIONS FROM: DAVE ROBBINS, PLANT MAINTENANCE MANAGER 2�4� SUBJECT: COGEN OUTAGE /REPAIR COSTS CONTRIBUTION TO FISCAL YEAR 2012 -2013 NOVEMBER 30, 2012 YEAR -TO -DATE NEGATIVE VARIANCES Cogen was out of service beginning March 30, 2012. The total cost of the outage is captured in a separate memo by Shari Deutsch, Risk Manager. This memo looks only at the impacts of the cogen outage on the current fiscal year budget. Cogen was out of service for the first three months of fiscal year 2012 -2013. The difference in Plant electricity costs between July- September 2011 when Cogen was operating and July - September 2012 when Cogen was not operating is approximately $765,000. This difference is contributing to the line item for utilities being over budget by $530,000 year to date. There were $122,022 of unbudgeted cogen repair invoices charged to Outside Repairs and Maintenance $120,365 of unbudgeted cogen consulting services invoices charged to Technical Services. The total costs incurred for the cogen repair that were not budgeted and have been charged to O &M accounts for fiscal year 2012 -13 is approximately $1 million. Risk management is seeking to recover this amount less our deductible of $250,000 from our insurance. The recovery may or may not be complete this fiscal year. C:\ Users\ danderson \AppData \Local\Microsoft \Windows \Temporary Internet Files \Content.Outlook \DVCG8C5G \Cogen negative variance impact (3).doc L O Q. M� I.L O r.. C O Ln Ln O J M T- N r O N 0 CN.) C v V c ca a (a N N O C J C a� (D c v— C s O z0 Z W W U) m W CC CD _Z m J a O Z Q Cl) O J LL W > O 0 V CO 0. 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N o m 0c e C U s J0 �C7ui r p i u2 T o �,a °¢°0_ N +- N M 8 88 0 TT C7 C7 M _ N N N N N M C C o- o o n c O D U O O Q N O > O E m L c ca .c O E U ''a) ^ V/ O U cu (6 U O O o- i6 O Z Central Contra Costa Sanitary District December 17, 2012 TO: BUDGET AND FINANCE COMMITTEE VIA: ANN FARRELL, GENERAL MANAGER FROM: THEA VASSALLO, FINANCE MANAGER Qk-� SUBJECT: CCCERA vs CALPERS STUDY ISSUED BY BARTEL AND ASSOCIATES - FOLLOW UP At the December 3, 2012 Budget and Finance Committee meeting, staff was asked to report on previous contract work done by Bartel and Associates comparing Contra Costa County Employees' Retirement Association ( CCCERA) to California Public Employees' Retirement System ( CALPERS). Attached is the 2 part report dated November 2008. Report #1 SlD CENTRAL CONTRA COSTA SANITATION DISTRICT CCCERA — Ca1PERS Retirement Systems Study Executive Summary November 2008 Executive Summary Central Contra Costa Sanitation District CCCERA and CalPERS Retirement Benefit Study Introduction Before discussing Central Contra Costa Sanitation District's possible transition from Contra Costa County Employees' Retirement Association (CCCERA) to the California Public Employee's Retirement System (CaIPERS), the reader may want to review some actuarial terminology. This information can be found in the Basic Definitions section at the end of this report. Central Contra Costa Sanitation District is considering moving from CCCERA to CalPERS. Bartel Associates has been asked to help the District evaluate the difference in the two systems and provide estimated contribution rates for certain alternative CalPERS benefits. In reviewing this infonmation it's important to understand that if the two systems provide the exact same benefits and they both earn the same investment return (net of expenses), then the cost is the saine for each system. Cost differences arrive because benefits provided, administrative costs and/or investment earnings are not the same. CCCERA and CalPERS System Differences There are several System differences between CCCERA and CalPERS. These differences are summarized in the following table: Items CCCERA CaIPERS System Type • Multiple employer cost sharing • CalPERS is a multiple employer system. system. • Both investment and non- • Agencies with less than 100 investment experience is active employees, assets are "pooled" from one member "pooled ", but non - investment agency to another. experience is not. • Because CCCERA is primarily C Agencies with more than 100 made up of County employees, active employees, assets are not this means CCCERA's pooled with other agencies. This experience (and the District's means ultimately they stand on contribution rates) follows their own and pay for their own County experience. benefits. • Because the District has more than 100 active employees, we do not expect the District will be pooled. However, while we don't expect they will, it is possible CaIPERS will change their position on this. n November 11, 2008 CC S Executive Summary Central Contra Costa Sanitation District CCCERA and Ca1PERS Retirement Benefit Study Page 2 Items Board Investment Earnings Allocation Policy Benefit Determination I CCCEIRA • CCCERA Board has historically tried to mitigate contribution swings by transferring excess earnings to surplus when investment returns exceeded expectations and moving money from surplus when investment returns fell below expectations. • In addition, CCCERA uses certain asset smoothing to mitigate investment gains and losses. However, CCCERA's asset smoothing is less dramatic than CaIPERS asset smoothing. • CCCERA benefits are generally determined by a combination of CCCERA Board policy and District choice. • Little California Legislature intervention in benefit determination. o For example if the District wants to improve benefits, the Legislature must make that Choice available to CCCERA, CCCERA Board must allow the District to choose the new fonnula and the District must then adont the new formula_ November 11, 2008 CalPERS • CaIPERS Board takes a very different approach than CCCERA in investment return allocation. Generally, they allocate all investment earnings to each agency. This creates somewhat more contribution volatility, but also provides a better picture of how well funded each agency's plan is. • To mitigate contribution volatility, Ca1PERS use actuarial smoothing techniques to allocate investment earnings. The techniques CaIPERS uses are some of the most aggressive (and some of the most effective) techniques used by any system in California. • CaIPERS Benefits are much more a function of District election. © For example if the District wants to improve benefits, the Legislature must make that choice available to the District and the District must then adopt the new formula. However, occasionally the CaIPERS Board has made benefit improvements (which were made available by the Legislature) more attractive by temporarily reducing cost. _�� S Executive Summary Central Contra Costa Sanitation District CCCERA and Ca1PERS Retirement Benefit Study Page 3 Items CCCERA CalPERS Asset Allocation • CCCERA's asset allocation is: • CalPERS asset allocation is: . Cash &cash equivalents 1 ° o Cash &cash equivalents 0% Domestic Equities 39 Global Equities 56 International Equities 12 Private Equities 10 2.7 % @55 Alternative Investments 5 Inflation linked assets 5 • Real Estate 10 Real Estate 10 Final Average Domestic Fixed Income 29 Global Fixed Income 19 International Fixed Inc. 4 . Benefit Summary We understand the District provides the " CCCERA 2 % @55" formula and that all employees in Tier 1 with retirement benefits based on the highest 12 months average earnings. Furthermore benefits are increased using a 30/'o cost of living adjustment. One key benefit difference between CCCERA and CalPERS is the compensation used to determine retirement benefits. CCCERA, under the Ventura decision, is required to include certain Terminal Pay items in final average earnings. Terminal pay items will vary significantly from one individual to another. It's important to note these terminal pay items are expressly excluded under CalPERS calculations. The followine table summarizes alternative CaIPERS benefits included in this reuort. November 11, 2008 ' Items Alternative CalPERS Benefits • Formulas . 2 % @55 • 2.5 % @55 • 2.7 % @55 • 3 %@60 • Final Average a Highest year -- all 4 formulas Compensation . Average of highest 3 years — 2.7 % @55 only Options • PERSable Wages o Include EPMC as Special Compensation base pay loaded 7% or 8% • Service Options • All Service Only • COLA . 3% • Pre Retirement s Option: Pre - Retirement Option 2 Survivor Benefit for those eligible Survivor Benefit to retire 50% continuance to survivor • Post Retirement o Option: 50% continuance to survivor Survivor Allowance November 11, 2008 ' Executive Summary Central Contra Costa Sanitation District CCCERA and Ca1PERS Retirement Benefit Study Page 4 The following table summarizes the key different features in the CCCERA and Ca1PERS for miscellaneous plans. Features ■ Eligibility ■ Tenninal Pay ■ Benefit ■ COLA Miscellaneous Plans CCCERA Ca1PERS • 50 &10, or 30 years of • 50 & 5 service, or age 70 • Includes vacation & holiday • Excludes vacation & holiday ------ • 100% of final compensatic • 3% Annual • Waiting Period: I" COLA May 1 of l" calendar year following retirement ■ Survivor Continuance • 60% • 100% for industrial disabili • No cap • 3% Annual • Waiting Period: 15` COLA May 1 of 2 °a calendar year following retirement • 500.% The following table shows the current CCCERA formula, compared to the alternative Ca1PERS formulas: 50 1.092% 1.426% 2.000% 2.000% 2.000% 1.426% 51 1.156% 1.522% 2.100% 2.140% 2.100% 1.522% 52 1.224% 1.628% 2.200% 2.280% 2.200% 1.628% 53 1.296% 1.742% 2.300% 2.420% 2.300% 1.742% 54 1.376% 1.866% 2.400% 2.560% 2.400% 1.866% 55 1.460% 2.000% 2.500% 2.700% 2.500% 2.000% 56 1.552% 2.052% 2.500% 2.700% 2.600% 2.052% 57 1.650% 2.104% 2.500% 2.700% 2.700% 2.104% 58 1.758% 2.156% 2.500% 2.700% 2.800% 2.156% 59 1.874% 2.210% 2.500% 2.700% 2.900% 2.210% 60 2.000% 2.262% 2.500% 2.700% 3.000% 2.262% 61 2.134% 2.314% 2.500% 2.700% 3.000% 2.314% 62 2.272% 2.366% 2.500% 2.700% 3.000% 2.366% 63 2.418% 2.418% 2.500% 2.700% 3.000% 2.440% 64 2.418% 2.418% 2.500% 2.700% 3.000% 2.526% 65 2.418% 2.418% 2.500 %_ 2.700% 3.000% 2.611% The following chart compares the retirement factors for the above fonnulas. The line labeled "CCCERA +22 % -7° %" is an attempt to show the impact of terminal pay on the benefit factors. The November 11, 2008 Executive Summary Central Contra Costa Sanitation District CCCERA and CalPERS Retirement Benefit Study Page 5 district's average terminal pay increase at retirement is 22° o and we've offset that amount with a 7 9,'0 increase due to EPMC. Benefit Factor Comparison - Miscellaneous -a 2 % @60 -O- 2 % @55 2.5 % @55 -n- 2.7 % @55 -m- 3 % @60 CCCERA CCCERA +22 % -7% J 3.0% 61� 2.8% — - -- -- AIA��Q 2.6 % Jr ®/ - -- O -Y -O- G 2.4% 2.2% — - —MO-410 O V 2.0% aS 8% X1. — O 1.4% — - - -- 1.2% 1.0% 50 51 52 53 54 55 56 57 58 59 60 61 62 63 64 65 Retirement Age Demographic Information There are 256 active and 151 retired District participants in CCCERA. The following table summarizes the demographic information used in the study: ® Actives • Count 256 ® Average Age 48.1 ® Average Service 13.3 o Average Salary $85,301 e Total 2008/09 Salary (000s) 21,837 ■ Retirees • Count 151 • Average Age 68.1 • Average Age at Retirement 56.6 • Estimated Annual Benefit $35,000 Historical Investment Return for CCCERA and Ca1PERS The following table shows historical investment returns for CCCERA and Ca1PERS. CCCERA has provided investment returns from 1995 through 2007. FYE FYE 12/31 CalPERS 12/31 CalPERS CCCERA November 11 2008 Executive Summary Central Contra Costa Sanitation District CCCERA and CalPERS Retirement Benefit Study Page 6 FYE FYE - 200.6 12/31 CalPERS 12/31 CalPERS CCCERA � 100 °. 1984 12.9% 1995 25.3% 25.8% 1985 28.0% 1996 12.8% 15.6% 1986 15.9% 1997 19.0% 21.8% 1987 4.3% 1998 18.5% 16.2% 1988 12.8% 1999 16.0% 16.3% 1989 21.3% 2000 -1.4% 2.2% 1990 -0.8% 2001 -6.2% -2.4% 1991 23.0% 2002 -9.5% -9.5% 1992 6.5% 2003 23.3% 23.5% 1993 13.4% 2004 13.4% 13.4% 1994 -1.0% 2005 11.1% 10.8% 2006 15.7% 15.3% 2007 10.2% 7.3% We have asked CCCERA for data prior to 1995, historical interest crediting rates (rates the Board has credited plan assets with as noted earlier), and whether the above investment return rates are or are not net of expenses, but have not yet received a response. The above CalPERS investment return rates are net of expenses. The following chart shows the investment return for the two systems. Ca1PERS & CCCERA Investment Returns 3001. 250'. - 200.6 - 15.0'. � 100 °. u a e 50% 0.0% 50% 100% - - 1 \ 1 \ f 1 1 1 1 - 150% ♦-• --- T- ,�pT -*�- -�- �,p- -T -T�_ Year - -n-C.1PERS _ CCCERA Actuarial Methods and Assumptions Plan funded status and required contributions are calculated using certain actuarial funding methods and assumptions about future events. These methods and assumptions can dramatically affect a plans funded status and contribution rates. There are difference in the economic assumptions between November 11, 2008 ' Executive Summary Central Contra Costa Sanitation District CCCERA and CalPERS Retirement Benefit Study Page 7 CCCERA and CalPERS. CalPERS has recently adopted a policy to use the same demographic assumptions when an agency is moving from a local system (such as CCCERA) into CalPERS. The followinp- table summarizes some kev assumptions used in the study. CCCERA Plan Termination Methods When an agency withdraws from CCCERA, active liability (assuming all prior service is transferred) is transferred from CCCERA to the new system. However, non - active liability (retirees and terminated employees that have not yet retired) remain at CCCERA. To be certain the County and other CCCERA participating agencies are not "on- the - hook" for the transferring agency's remaining participants, CCCERA has developed a termination policy. CCCERA's Termination Policy allows the District to withdraw from CCCERA under one of two withdrawal methods. The first approach ( "Market ") calculates liabilities using settlement assumptions. Settlement assumptions are, generally, the same assumptions as valuation assumptions, except that the investment return assumption is conservative (based on the interest rates the Pension Benefit Guarantee Corporation (PBGC) uses to measure plan funding in the private sector). By comparison, the valuation uses a 7.8% discount rate, while current PBGC rates are approximately 5.8°' for the next 20 years and B _�November 11, 2008 dAM MI. June 30, 2008 Stud • Valuation Date • June 30 2008 • Discount rate • CCCERA — 7.80% • CalPERS — 7.75% • General Inflation • CCCERA — 4% • CalPERS — 3% • Aggregate Payroll • CCCERA — 4.25% Increase • CalPERS — 3.25% • Merit Payroll Increases • CCCERA increase rates • • CalPERS increase rates CCCERA assumptions • Mortality, Withdrawal, Disability • Retirement • CCCERA sample retirement rates: Age Safety Miscellaneous 45 2% 0% 50 25% 3% 55 30% 20% 60 100% 25% 65 100% 35% 70 100% 100% • Expected Retirement Age: ➢ Misc. — 56.6 CCCERA Plan Termination Methods When an agency withdraws from CCCERA, active liability (assuming all prior service is transferred) is transferred from CCCERA to the new system. However, non - active liability (retirees and terminated employees that have not yet retired) remain at CCCERA. To be certain the County and other CCCERA participating agencies are not "on- the - hook" for the transferring agency's remaining participants, CCCERA has developed a termination policy. CCCERA's Termination Policy allows the District to withdraw from CCCERA under one of two withdrawal methods. The first approach ( "Market ") calculates liabilities using settlement assumptions. Settlement assumptions are, generally, the same assumptions as valuation assumptions, except that the investment return assumption is conservative (based on the interest rates the Pension Benefit Guarantee Corporation (PBGC) uses to measure plan funding in the private sector). By comparison, the valuation uses a 7.8% discount rate, while current PBGC rates are approximately 5.8°' for the next 20 years and B _�November 11, 2008 dAM MI. Executive Summary Central Contra Costa Sanitation District CCCERA and CalPERS Retirement Benefit Study Page 8 4.9 °ro thereafter. The Market approach generates significantly higher liabilities than the "Valuation" approach. The second ( "Valuation ") approach calculates liabilities (and subsequently assets available for transfer) using CCCERA's actuarial valuation assumptions. Under this approach the District would transfer to CalPERS the initial transfer amount. Subsequently, every two years, CCCERA would re- determine this amount, keeping track of any differences. Ultimately, as asset and liability gains and losses occur, the District will either owe CCCERA an additional amount or CCCERA will transfer an additional amount to CalPERS. A separate "Final Settlement" calculation would be done after several (perhaps 20) years after the transfer. At that point more information would be known about the actual experience. The District could request settlement in a shorter period. However, when a final settlement occurs CCCERA will use the above Market approach to be certain other CCCERA agencies will not be adversely impacted. Allowing a longer period of time to pass lessens the impact of the Market approach. The following summarizes the two approaches. ■ Method #1 (Market Approach) ° Assets at market value ® Liability at market/termination basis ® Method #2 (Valuation Approach) • Assets at market value • Liability at on going (valuation) basis • True up every two years Results The following tables show the estimated District, employee and total contribution rates impact of moving to CalPERS under the two CCCERA termination approaches. The contributions, for illustration purposes, assume the move happens June 30, 2008, thus comparing contribution for the 2008 -09 fiscal year. Method #1 - 2008 -09 Contribution % Based on Liability at Market /Termination Basis CCCERA CalPERS ■ Formula 2 % @55 2 % @55 2.5 % @55 2.7 % @55 2.7 % @55 3 % @60 ■ FAE 1 Year 1 Year 1 Year 3 Years 1 Year 1 Year ■ Include EPMC No Yes Yes Yes Yes Yes ■ Discount Rate 7.80% 7.75% 7.75% 7.75% 7.75% 7.75% ■ District • Normal Cost 16.5% 14.7% 16.5% 16.0% 18.7% 19.5% • UAAL' 16.4 23.5 32.5 30.7 32.1 43.9 • Total 32.9% 38.1% 49.1% 46.7% 50.8% 63.3% ■ Employee 10.8 7.0 8.0 8.0 8.0 8.0 ■ Total % 43.7% 45.1% 57.1% 54.7% 58.8% 71.3% UAAL Amortized as a level percent of pay over 15 years. nbi Almil) November 11, 2008 Executive Summary Central Contra Costa Sanitation District CCCERA and CalPERS Retirement Benefit Study Page 9 Method #2 - 2008 -09 Contribution % Based on Liability at Valuation Basis Issues and Comments i Timing for Moving from CCCERA to CalPERS • Given the recent market downturn, the District may want to consider the timing of moving from CCCERA to CaIPERS. If the District continues with CCCERA, the asset loss from the market downturn will be mitigated because CCCERA uses an asset smoothing method as well as in interest crediting method. This means the impact of the recent market downturn will not be immediate. On the other hand, if the District transfers to CalPERS assets will be valued at current market value, meaning the entire asset loss will be realized at the time of transfer. • CaIPERS modified its method of allocating the investment earnings several years ago. All money will be credited with the same annual rate of return, prorated by the time of the money in the fund. For example, if CaIPERS investment return was -20% in the first 6 months and +10% in the next 6 months, the net return would be approximately -10% for the year. If District transferred assets on January 1 (6 months), it will be credited with -5% (=-10%x6/12). If the District decides to move to CalPERS it may want to consider the tinning of the asset transfer. ® Vested Rights In California, public sector employees are entitled to pension benefits at least as good as those provided when hired. It is not clear whether this applies to just the basic formula or to all ancillary benefits. For example, CCCERA includes terminal pay in the retirement benefit calculation but CaIPERS excludes it. We recommend the District seek legal advice regarding the vested rights under CCCERA system in the following areas: • Tenninal Pay: included in CCCERA but not CaIPERS O Timing for Cost of living adjustment: CCCERA starts May 1 of the I" calendar year following retirement but CalPERS starts at May 1 of the 2 °a calendar year following retirement O Post retirement survivor allowance: CCCERA provides 60% post retirement survivor allowance benefits for service retirement and 100° o for industrial disability. CalPERS allows only 50% post retirement survivor allowance. UAAL Amortized as a level percent of pay over 15 years. 1 I ' 1 November 11, 2008 CCCERA CalPERS • Formula 2 % @55 _ 2 % @55 2.5 % @55 2.7 % @55 2.7 % @55 3 % @60 • FAE 1 Year 1 Year 1 Year 3 Years 1 Year 1 Year • Include EPMC No Yes Yes Yes Yes Yes • Discount Rate 7.80% 7.75% 7.75% 7.75% 7.75% 7.75% • District • Normal Cost 16.5% 14.7% 16.5% 16.0% 18.7% 19.5% • UAAL' 16.4 16.9 26.0 24.2 25.6 37.3 • Total 32.9% 31.6% 42.5% 40.1% 44.3% 58.8% • Employee 10.8 7.0 8.0 8.0 8.0 8.0 • Total % 43.7% 38.6% 50.5% 48.1% 52.3% 64.8% Issues and Comments i Timing for Moving from CCCERA to CalPERS • Given the recent market downturn, the District may want to consider the timing of moving from CCCERA to CaIPERS. If the District continues with CCCERA, the asset loss from the market downturn will be mitigated because CCCERA uses an asset smoothing method as well as in interest crediting method. This means the impact of the recent market downturn will not be immediate. On the other hand, if the District transfers to CalPERS assets will be valued at current market value, meaning the entire asset loss will be realized at the time of transfer. • CaIPERS modified its method of allocating the investment earnings several years ago. All money will be credited with the same annual rate of return, prorated by the time of the money in the fund. For example, if CaIPERS investment return was -20% in the first 6 months and +10% in the next 6 months, the net return would be approximately -10% for the year. If District transferred assets on January 1 (6 months), it will be credited with -5% (=-10%x6/12). If the District decides to move to CalPERS it may want to consider the tinning of the asset transfer. ® Vested Rights In California, public sector employees are entitled to pension benefits at least as good as those provided when hired. It is not clear whether this applies to just the basic formula or to all ancillary benefits. For example, CCCERA includes terminal pay in the retirement benefit calculation but CaIPERS excludes it. We recommend the District seek legal advice regarding the vested rights under CCCERA system in the following areas: • Tenninal Pay: included in CCCERA but not CaIPERS O Timing for Cost of living adjustment: CCCERA starts May 1 of the I" calendar year following retirement but CalPERS starts at May 1 of the 2 °a calendar year following retirement O Post retirement survivor allowance: CCCERA provides 60% post retirement survivor allowance benefits for service retirement and 100° o for industrial disability. CalPERS allows only 50% post retirement survivor allowance. UAAL Amortized as a level percent of pay over 15 years. 1 I ' 1 November 11, 2008 Executive Summary Central Contra Costa Sanitation District CCCERA and Ca1PERS Retirement Benefit Study Page 10 © Deferred Compensation Plan An alternative to moving all the retirement benefits to Ca1PERS is the District can contract with a basic benefit formula with CaIPERS and add a deferred compensation plan (a 457 plan) to the over whole employee compensation package. We recommend the District consults with legal advisor whether the combined benefits can be used to satisfy the vested rights. A deferred compensation plan generally provides higher benefits for younger employees but less for older ones because younger employees have a longer time frame to accumulate the assets. It is possible a deferred compensation plan will satisfy the vested rights for younger employees but not older ones. M Longevity Incentive Program It may be more cost effective for the District to provide a longevity incentive program together with a lower CaIPERS benefit formula (for example 2 % @55) than a higher Ca1PERS benefit formula (for example 2.7% @55). The design for the longevity incentive program can be based on service and age with payment of some percentage of base pay. For example, the program provides 3% of base pay for 20 years service at age 56 and 4% of base pay for 25 years service at age 61. The program can be designed so that the combined Ca1PERS 2% @ 55 formula and the longevity program provide a 2.7 %@ 55 benefits at certain target ages. For those retire before the target age, the District will only provide 2% @55 benefits. The longevity incentive program also can serve as a tool to retain the employees. We recommend the District consults with an attorney regarding the ability to include the longevity payments in PERSable wages under CalPERS law, paying particular attention to vested rights issues. ® CCCERA Investment Returns and Asset Crediting Rates We have asked CCCERA for investment returns prior to 1995 but not got a response. CCCERA Board has historically tried to mitigate contribution swings by transferring excess earning to surplus when investment returns exceeded expectations and pulling money from surplus when investment returns fell below expectations. This policy has resulted in CCCERA using an asset crediting rate that is not directly linked to the investment return. We have asked CCCERA for all past interest crediting rates but not yet received a response. ® Cost Sharing in CCCERA CCCERA is a multiple employer cost sharing system. This means both investment return and non - investment return experience is pooled from on member agency to another. Because CCCERA is primarily made up of County employees, CCCERA's experience follows County experiences. Furthermore, while we can't be certain, it appears non -safety contribution rates seem to subsidize safety contribution rate. If correct, then the District is likely subsidizing other CCCERA participating agencies, including the County. November 11. 2008 ' Executive Summary Central Contra Costa Sanitation District CCCERA and Ca1PERS Retirement Benefit Study Page 11 BASIC DEFINITIONS The following information has been taken from the January 2001 issue of Western City magazine. Understanding these terns makes it easier to understand the different actuarial cost infonnation and to grasp the ramifications of any benefit structure and system changes. Present Value of Benefits: When any actuary prepares a pension valuation, they first gather participant data (including active employees, former employees not in payment status, participants and beneficiaries in payment status) at the valuation date (for example December 31, 2007). Using this data and some actuarial assumptions, they project future benefit payments. (The assumptions predict, among other things, when people will retire, tenninate, die or become disabled, as well as what salary increases, inflation and investment return might be.) Those future benefit payments are discounted, using expected future investment return, back to the valuation date. This discounted present value is the plan's present value of benefits. It represents the amount the plan needs as of the valuation date to pay all future benefits if all assumptions are met and no future contributions (employee or employer) are made. Actuarial Liability: This represents the portion of the present value of benefits that participants have eamcd (on an actuarial, not actual, basis) through the valuation date. It also represents the amount of money a plan would (theoretically) have if the plan had always been funded and all historical assumptions had always been met. Current Employer Normal Cost: The total normal cost represents the portion of the present value of benefits expected to be earned (on an actuarial, not actual, basis) in the corning year. The current employer normal cost represents the employer's portion of the total normal cost - that is, the total normal cost offset by employee contributions. Another way to think of this amount is that, if the District always contributes the nonnal cost, then rate payers are paying the benefits being earned each ear by people who are renderine service to the rate paver. Present Value of Benefits Current Employer Normal Cost Actuarial Liability Once these amounts are calculated, the actuary compares actuarial assets to the actuarial liability. When assets equal liabilities, a plan is considered on track for funding. When assets are greater than liabilities, the plan has excess assets; when assets are less than liabilities, the plan has an unfunded liability. Agail-) nN November 11, 2008 Executive Summary Central Contra Costa Sanitation District CCCERA and Ca1PERS Retirement Benefit Study Page 12 Contribution Rate: Actuaries don't require an agency to make up any shortfall (unfunded liability) immediately, nor do they allow an immediate credit for any excess assets. Instead, the difference is amortized over time. An agency's contribution rate is nothing more complicated than the current employer normal cost, plus the amortized unfunded liability or less the amortized excess assets. Simply put, this contribution is the value of employer benefits earned during the year, plus something to move the plan toward being on track for funding. It is important to note actuaries generally by to have a plan move towards having assets equal liabilities. This means that it's generally considered good when a plan's contribution to equals the Normal Cost. t� November 11 2008 1 Report #2 CENTRAL COSTA COUNTY SANITATION DISTRICT CCCERA Study Is the District Subsidizing Others? JOHN E. BARTEL t,- P_TCL IS" )C! kM 1 LC June 5, 2009 Agenda Topic CCCERA Background Terminal Pay Demographic Experience Rate Group Asset Allocation County's Pension Obligation Bonds Excess Earnings Allocation Page 1 2 3 5 7 8 o kcliensskenlml comm costa sanitation dissrickaIN—cceraWa ceninlsan 09 -06 -05 «cem study.v2.dx CCCERA BACKGROUND ■ CCCERA is Cost Sharing Multiple Employer Plan ■ Five Groups Retirees Four Rate Groups ■ Rate Groups • General Enhanced • General Non - Enhanced • Safety Enhanced • Safety Non - Enhanced B) f � June 5, 2009 l ' TERMINAL PAY • Terminal Pay • CCCERA Assumption — 11.5% • District — 22% • Losses go to pool A. June 5, 2009 Z ' (B z, June 5, 2009 3 I I DEMOGRAPHIC EXPERIENCE ■ CCCSD demographic information • Higher average age • Higher average service • Higher average salary ■ CCCSD average higher cost mitigated by pool (B� A June 5, 2009 4 J DEMOGRAPHIC EXPERIENCE r — Active Participant Statistics CCCERA 12/31/07 Valuation Data Enhanced General Tier 1 Tier 3 Total CCCSD ■ Count 931 6,766 7,697 264 ■ Average Age 50.4 46.1 46.6 47.6 ■ Average Service 16.7 8.8 9.7 13.4 ■ Average Entry Age 33.7 37.3 36.9 34.2 ■ Projected Average Salary $ 79,474 $ 64,472 $ 67,412 $86,545 ■ Total Projected Salary (000s) 82,653 436,221 518,874 22,848 (B z, June 5, 2009 3 I I DEMOGRAPHIC EXPERIENCE ■ CCCSD demographic information • Higher average age • Higher average service • Higher average salary ■ CCCSD average higher cost mitigated by pool (B� A June 5, 2009 4 J RATE GROUP ASSET ALLOCATION �- - - -- - - -- - -- - -- - -Ij 1. Assets allocated to Retirees 2. Remaining assets allocated to Active Rate Groups a. In proportion to Expected Assets by Active rate Group b. Not determined by rolling assets forward c. Determined based on actuarial liabilities and expected UAAL based on contribution rates (NA) June 5, 2009 E RATE GROUP ASSET ALLOCATION- ■ Potential for bias: Higher Safety ratio of retirees to actives When Rate Group has losses more assets allocated When Rate Group has gains fewer assets allocated ■ Likely shift in assets from General to Safety Safety retirees Safety disability June 5, 2009 6 IF L COUNTY'S PENSION OBLIGATION BOND i ■ POB Adjustment: • Rates calculated without regard to POB • Agencies without POB rates adjusted upward based on: ❑ Balance established as a "frozen unfunded liability" ❑ Balance credited at valuation interest rate, without regard to actual investment return ■ Good investment return —), District wins ■ Bad investment return--+ District loses ■ Historical market value investment returns slightly below assumed since POBs issued (B" / 1 June 5, 2009 EXCESS EARNINGS ALLOCATION I E — -- --- — -- -- ■ Earnings in excess of valuation interest rate PF5-CK-SD1 ■ Reviewed historical Board policy (in actuarial reports) --* found nothing unreasonable ■ Board policy changes over time —), continue to monitor BAJune 5, 2009 g Central Contra Costa Sanitary District December 17, 2012 TO: BUDGET AND FINANCE COMMITTEE VIA: ANN FARRELL, GENERAL MANAGER FROM: THEA VASSALLO, FINANCE MANAGER SUBJECT: CONSOLIDATION OF 457 AND 401(A) DEFERRED COMPENSATION PLAN INTO ICMA -RC AS A SINGLE PROVIDER - FOLLOW UP Attached for your review is the revised ICMA -RC proposal summary report prepared by Jon Chambers, of Schultz Collins Lawson Chambers Investment Counsel. The Deferred Compensation Committee plans to meet sometime in January to review the report. RECORDKEEPING AND ADMINISTRATION FEES AND TOTAL PLAN COST Assumed Asset Values 1. Basic Plan maintenance fee (annual) 2. Participant fee (875 participants) - a) PPT fee in $$ 3. Asset based fee 4. Estimated revenue share 5. Rebate of excess fees /revenue credit 6. Total primary recordkeeping revenue (= 1 + 2a + 3 + 4 + 5) 7. Estimated Fund Costs B. Investment consulting fee 9. Trustee fee 10. Revenue credit offset against total cost 11. Estimated total plan cost (= 6 + 7 + 8 + 9 + 10) 12. Estimated all -in expense ratio $67,246,660 $67,246,660 $67,246,660 $51,630,908 $23,024,583 $74,655,491 $0.00 $0.00 $0.00 $1,000 $0.00 ! $50.00, $40.002 $0.00 $43,750 $19,400 $0.00 $0.00 $41,305 $112,157 $55,285 $20,652 ($18,000) 0.00 ($20,652) $94,157 $99,035 $61,704 $323,102 $218,263 $231,601 $0.00 $0.00 $30,979 $0.00. $0.00 $800 $0.00 $0.00 ($20,652) $305,102 $262,012 $304,432 0.45% 0.39% 0.59% $1,000 $2,000 $0.00 $45.003 N/A $0.00 $17,190 36,590 $0.00 $20,722 62,027 $224,458 ($90,000) $134,458 $489,491 $11,512 $32,164 ($11,5121 ($32,164) $38,912 $100,616 $103,820 $335,421 $0.00 $13,815 $44,794 $0.00 $800 $1,600 $0.00 11512 ($32,164) $399,491 $145,835 $450,267 0.59% 0.63% 0.60% [NOTES ON SPECIFIC FEE PROPOSALS AND FEE ASSUMPTIONS The following assumptions were used to calculate estimated fees: • Since SCLC did not request proposals for the Central Contra Costa Sanitary District Retirement Plans under a formal Request for Proposal (RFP) structure, different vendors used different proposal assumptions and pricing strategies. This makes direct pricing comparisons more difficult. • The ICMA -RC original proposal assumes no change to the investment lineup, but requires consolidation of assets from the other two providers into the ICMA -RC program. The ICMA -RC revised proposal optimizes the investment lineup, and allows CCCSD to select from three different consolidation approaches -(1) no change; (2) merge Hartford in but keep Nationwide separate; and (3) merge both Hartford and Nationwide in. The three approaches have slightly different revenue credit assumptions. The information presented above summarizes the full consolidation approach. • The Vanguard and ICMA -RC (both original and revised) proposals were based on March 31, 2012 ICMA -RC balances in both plans, which were $67.25 million. The Graystone /CPI proposal was based on an approximately 10% higher asset balance of $74.65 million. • The ICMA -RC (both original and revised) and Vanguard proposals used current Plan asset allocations to figure fund costs. The Graystone /CPI proposal assumed fixed and uniform asset allocations across all fund options. Vanguard assumes 875 total participants. CPI assumes 485 457 Plan participants. 3 CPI assumes 485 457 Plan participants. S C H U L T Z C 0 L L I N s L A W S 0 N C H A M! E R 5 1 N C The Graystone /CPI proposal includes an investment consulting service that is not offered under the other two proposals. This additional service, plus the 10% higher asset balance, explains much of the higher total cost of the Graystone /CPI proposal. The optimized investment lineup in the revised ICMA -RC proposal generates a weighted average of approximately 16.7 basis points of revenue share, primarily from the VantageTrust PLUS fund. Since this proposal only requires a weighted average 14 basis points of revenue share, the excess 2.7 basis points (approximately $18,000, based on a $67 million plan balance) is available as a revenue credit, to cover fiduciary investment consulting services, other plan expenses, or for allocation back to participant accounts. OBSERVATIONS ON PROPOSALS • The Vanguard and Graystone /CPI proposals indicate required revenue to support recordkeeping and administrative services should be approximately $100,000 /year. Thus, the original ICMA -RC proposal appeared high, even after the $90,000 credit. The revised ICMA -RC proposal prices recordkeeping and administrative services at approximately $94,000 /year. • The revised ICMA -RC proposal is a significant improvement relative to the original proposal. Although the fee credit is reduced by $72,000, fund costs drop by $166,000. ICMA -RC agrees to provide the same set of services for $40,000 less annual revenue. • Recordkeeping revenue under both the original and revised ICMA -RC proposals is understated, because approximately $20 million of balances at Nationwide and Hartford are excluded from the total. Recordkeeping revenues under the Vanguard and Graystone /CPI proposals are also understated, but less so, due to a lesser reliance on asset based revenue under these proposals. Thus, for example, under the ICMA -RC revised proposal, recordkeeping revenues would increase from approximately $94,000 to approximately $122,000, when $20 million of balances are added to the total, and are billed at 14 basis points. • Total revenue from all four proposals may be understated given the general increase in value in most global capital markets since March 31, 2012. Conversely, if distributions from the plans have been greater than contributions to the plans since March 31, 2012, revenue may be overstated. Given the dynamic changes in asset values, any pricing comparisons should be construed as estimates, and not as precise pricing evaluations. • Participants count assumptions between the three proposals are reasonably consistent. • Investment consulting services could be added to the ICMA -RC and Vanguard proposals if desired. We estimate that the annual cost for investment consulting for the two plans should run approximately $30,000 - $40,000 /year, through Graystone, Schultz Collins, or other similarly positioned firms serving in a fiduciary capacity. • The revised ICMA -RC proposal includes adding a brokerage account option that would allow participants to invest in virtually any eligible publicly offered fund or security. While general plan sponsor experience indicates that a relatively small number of participants actually use the brokerage account option (typically, 2% - 4% of participants), availability of the option may help to address concerns that moving to a single provider and streamlining the set of available investment options is constraining the range of investment choice offered to participants. We have not modeled pricing or revenue implications of asset transfers to the brokerage account option; we expect that addition of the option would represent a modest decrement (likely 5% or less) to modeled revenues. S C H U L T Z C 0 L L I N 5 L A W S 0 N C H A M B E R S, I N C. Assumptions • ICMA -RC retains current 457 and 401(a) assets only • 5 year term agreement • Total inclusive fund expense ratio 0.49% • Revenue Requirement to ICMA -RC 0.21% Any revenue received from investment companies above the revenue requirement would be provided back to the plan. isite Education • Up to 30 days /year— Kim Hammond: individual meetings and educational seminars • Up to 6 days /year — Bill Eagan, CFP'": individual meetings and Financial Planning Seminars • Up to 6 days /year — Dennis Duarte, Regional Manager, providing plan level support •. • Services • ICMA -RC 401 Plan Document Maintenance • ICMA -RC 457 Plan Document Maintenance • Required Minimum Distributions • Qualified Domestic Relations Order (QDRO) Support and Processing • Emergency Withdrawal /Hardship Support and Processing • Online Loans /Loans by Telephone • Loan Delinquency Monitoring • De Minimus Account Distribution and Processing • Legal Support • Premier Services program offering access to a salaried, local Certified Financial Planner" and financial planning services on a reduced or no -cost basis • Monthly Employer Bulletin with plan administration information and regulatory updates • Quarterly Participant newsletters with age- appropriate information • Online Withdrawals • Online Enrollment • Vantagebroker service thru TD Ameritrade • Online appointment scheduling A iCMn-RC B ,, 'Brokerage services are provided by TD Ameritrade, Inc. a registered broker - dealer and member of FINRA/SIPCiNFA. ICMA -RC and TD Ameritrade are separate, unaffiliated companies and not responsible for each others services or policies. TD Ameritrade is a trademark jointly owned by TD Ameritrade IP Company, Inc. and the Toronto - Dominion Bank. Used with permission. ' TD Ameritrade receives remuneration from fund companies participating in its no -load, no- transaction -fee program for recordkeeping and shareholders services, and other administrative services. The amount of remuneration for these services is based in part on the amount of investments in such funds by TD Ameritrade clients. No- transaction -fee funds have other fees and expenses that apply to a continued investment in the fund and are described in the prospectus. Investors should carefully consider the investment objectives, risks, charges, and expenses of any mutual fund or ETFs before investing. Other fees and expenses do apply to a continued investment in the funds. Fund families may impose redemption fees in addition to the fees described above. To obtain a prospectus which contains this and other important information, please visit www. tdameritraderetirement. corn or call a TD Ameritrade representative at 866 - 766 -4015. Please read the prospectus carefully before investing. /1\ IChM Assumptions • ICMA -RC retains current 457 and 401(a) assets • Consolidation of all the current Hartford plan assets with ICMA -RC • 5 vear agreement • Total inclusive fund expense ratio 0.49% • Revenue Requirement to ICMA -RC 0.18% Anv revenue received from investment companies above our minimum revenue reauirement would be provided back to the • Up to 5 days on -site transition meetings • Up to 30 days /year— Kim Hammond: individual meetings and educational seminars • Up to 6 days /year — Bill Eagan, CFP'": individual meetings and Financial Planning Seminars • Up to 6 days /vear — Dennis Duarte. Reeional Manager, providing plan level support • ICMA -RC 401 Plan Document Maintenance • ICMA -RC 457 Plan Document Maintenance i • Required Minimum Distributions • Qualified Domestic Relations Order (QDRO) Support and Processing • Emergency Withdrawal /Hardship Support and Processing • Online Loans /Loans by Telephone • Loan Delinquency Monitoring • De Minimus Account Distribution and Processing • Legal Support • Premier Services program offering access to a salaried, local Certified Financial PlannerT" and financial planning services on a reduced or no -cost basis • Monthly Employer Bulletin with plan administration information and regulatory updates • Quarterly Participant newsletters with age- appropriate information • Online Withdrawals • Online Enrollment • Vantagebroker service thru TD Ameritrade • Online appointment scheduling • Automatic Rebalancing • Independent, third -party Plan Fiduciary Services offered through Mesirow Financial , or partnering with consultant of vour choice ICMA "Brokerage services are provided by TO Ameritrade, Inc. a registered broker - dealer and member of FINRA/SIPCINFA. ICMA -RC and TO Ameritrade are separate, unaffiliated companies and not responsible for each other's services or policies. TO Ameritrade is a trademark jointly owned by TD Ameritrade IP Company, Inc. and the Toronto - Dominion Bank. Used with permission. TO Ameritrade receives remuneration from fund companies participating in its no -load, no- transaction -fee program for recordkeeping and shareholders services, and other administrative services. The amount of remuneration for these services is based in part on the amount of investments in such funds by TO Ameritrade clients. No- transaction -fee funds have other fees and expenses that apply to a continued investment in the fund and are described in the prospectus. Investors should carefully consider the investment objectives, risks, charges, and expenses of any mutual fund or ETFs before investing. Other fees and expenses do apply to a continued investment in the funds. Fund families may impose redemption fees in addition to the fees described above. To obtain a prospectus which contains this and other important information, please visit www. tdameritraderetirement.com or call a TO Ameritrade representative at 866- 766 -4015. Please read the prospectus carefully before investing. ICMA Assumptions • ICMA -RC retains current 457 and 401(a) assets • Consolidation of all the current Hartford and Nationwide plan assets with ICMA -RC • 5 vear term agreement • Total inclusive fund expense ratio 0.49% • Revenue Requirement to ICMA -RC 0.14% revenue received from investment companies above our minimum revenue requirement would be provided back to the • Up to 5 days on -site transition meetings • Up to 30 days /year— Kim Hammond: individual meetings and educational seminars • Up to 6 days /year — Bill Eagan, CFP'"^: individual meetings and Financial Planning Seminars • Up to 6 days /year— Dennis Duarte, Regional Manager, providing plan level support • ICMA -RC 401 Plan Document Maintenance • ICMA -RC 457 Plan Document Maintenance • Required Minimum Distributions • Qualified Domestic Relations Order (QDRO) Support and Processing • Emergency Withdrawal /Hardship Support and Processing • Online Loans /Loans by Telephone • Loan Delinquency Monitoring • De Minimus Account Distribution and Processing • Legal Support • Premier Services program offering access to a salaried, local Certified Financial Planner'"' and financial planning services on a reduced or no -cost basis • Monthly Employer Bulletin with plan administration information and regulatory updates • Quarterly Participant newsletters with age- appropriate information • Online Withdrawals • Online Enrollment • Vantagebroker service thru TD Ameritrade* • Online appointment scheduling • Automatic Rebalancing • Independent, third -party Plan Fiduciary Services offered through Mesirow Financial, or partnering with consultant of your choice /1\ I('MA 'Brokerage services are provided by TD Ameritrade, Inc. a registered broker - dealer and member of FINRA/SIPC'NFA. ICMA -RC and TD Ameritrade are separate, unaffiliated companies and not responsible for each other's services or policies. TD Ameritrade is a trademark jointly owned by TD Ameritrade IP Company, Inc. and the Toronto- Dominion Bank. Used with permission. TD Ameritrade receives remuneration from fund companies participating in its no -load, no- transaction -fee program for recordkeeping and shareholders services, and other administrative services. The amount of remuneration for these services is based in part on the amount of investments in such funds by TD Ameritrade clients. No- transaction -fee funds have other fees and expenses that apply to a continued investment in the fund and are described in the prospectus. Investors should carefully consider the investment objectives, risks, charges, and expenses of any mutual fund or ETFs before investing. Other fees and expenses do apply to a continued investment in the funds. Fund families may impose redemption fees in addition to the fees described above. To obtain a prospectus which contains this and other important information, please visit www. tdameritraderetirement.com or call a TD Ameritrade representative at 866- 766 -4015. Please read the prospectus carefully before investing. /1\1 irMn m E E VI CD L x W CD J 0 z LL LL c z a u 2 u u u W N z W CL W z Z z D w Z J� N N � ca C CD I( cu N N C co Z C (D (D N 12 a) C/) o c .a cn O - c 0 rn -a a) U Z 0 O z ,_ N N m 0 c C/) a� Cf) �>. U (D (D u C Z cn O) O O Q N (B Q U U CB Y U N (a O M O LL O N U N m N = Q J = pp0Cl 0CACl�OO Q Q Q Q d W W U d w CO .. 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