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HomeMy WebLinkAbout07. Approve proposed revisions to Board Policy No. BP 047 - Deferred Compensation PlanDCENTRALSAN MEETING DATE: JUNE 15, 2023 BOARD OF DIRECTORS POSITION PAPER Page 1 of 6 Item 7. SUBJECT: APPROVE PROPOSED REVISIONS TO BOARD POLICY NO. BP 047 - DEFERRED COMPENSATION PLAN SUBMITTED BY: INITIATING DEPARTMENT: KATIE YOUNG, SECRETARY OF THE SECRETARYOF THE DISTRICT DISTRICT REVIEWED BY: KEVIN MIZUNO, FINANCE MANAGER PHILIP LEIBER, DEPUTYGENERAL MANAGER -ADMINISTRATION Roger S. Bailey General Manager ISSUE Revisions to Board of Directors (Board) policies must be approved by Central San's Board. BACKGROUND The policy is up for its biennial review and staff would like to propose revisions to update the language in the policy. No substantive changes were made. I n summary, the changes are largely limited to the following: • Changing the abbreviation of the Deferred Compensation Advisory Committee from "Advisory Committee" to "DCAC" to further distinguish it from Board Committees and be more in line with the acronym that is most commonly used at the District currently; • Change the reference to the 401(h) plan to "Health Reimbursement Arrangement (HRA); • Changing the abbreviation of the Mission Square from "third party administrator (TPA)" to "record keeper" which is more in line with standard retirement plan industry terminology; June 15, 2023 Regular Board Meeting Agenda Packet - Page 33 of 93 Page 2 of 6 • Update the "Participant Education" section to also include "Outreach"; and • Revise the "Participant Education & Outreach" section to better reflect modern fiduciary requirements. ALTERNATIVES/CONSIDERATIONS The Board could elect to not accept the changes. FINANCIAL IMPACTS None. COMMITTEE RECOMMENDATION This item was reviewed at the June 6, 2023, Administration Committee meeting. The Committee approved staffs recommended changes. RECOMMENDED BOARD ACTION Approve the proposed revisions to BP 047 - Deferred Compensation Plan. Strategic Plan re -In GOAL FOUR: Governance and Fiscal Responsibility Strategy 1 - Promote and uphold ethical behavior, openness, and accessibility, Strategy 3 - Maintain financial stability and sustainability ATTACHMENTS: 1. Proposed Revisions to BP 047 - Deferred Compensation Plan June 15, 2023 Regular Board Meeting Agenda Packet - Page 34 of 93 Number: BP 047 Authority: Board of Directors Effective: May 20, 2021 Revised: Page 3 of 6 Reviewed: June 6, 2023 Initiating Dept/Div: Administration/Finance BOARD POLICY DEFERRED COMPENSATION PLAN PURPOSE Central Contra Costa Sanitary District's (Central San's) Deferred Compensation Plan (the Plan) provides a valued employee benefit for its employees and the accumulated fund balance represents a significant monetary value. Accordingly, this policy shall clarify the role, authority, and responsibility of the Board of Directors (Board), the Deferred Compensation Plan Advisory Committee (Advisory Corn mitteeDCAC), the General Manager, and the Plan Administrator in overseeing and administering the Plan. SCOPE This policy shall apply to the 457(b) deferred compensation, the 401(a) money purchase, and the retiree Health Reimbursement Arrangement (HRA)401 (h) retiree health annei tritS plan which collectively comprise the Plan. BACKGROUND Central San established the Plan in 1976 after voluntarily withdrawing from participation in the Federal Social Security System. The Plan is administered by the District which has the sole authority to enforce the Plan and is responsible for the operation of the Plan in accordance with its terms. In 1982 the Board established the Advisery Gom�mittDCAC to oversee the Plan and facilitate internal administrative matters. POLICY Role of the Board of Directors As the governing body of Central San, the Board has fiduciary responsibility for the plan as the sole authority to adopt and amend Plan documents and execute an agreement(s) with third party admiRistraters (Tonrecord keepers to administer employee retirement benefits covered under the Plan. The Board established the dyiser„ Committee DCAC and delegates operational matters to the General Manager. The Board shall receive an Annual Report from the Advisory Committee June 15, 2023 Regular Board Meeting Agenda Packet - Page 35 of 93 Page 4 of 6 Number: BP 047 DEFERRED COMPENSATION PLAN Page 2 of 4 DCAC highlighting plan performance and other relevant matters demonstrating fiduciary oversight over the Plan, whish n4ay innluido the investmentDolin„ Statement, fee and other benGhmarkonq data, industry trends and best praGtoGe-S. Role of the General Manager The General Manager has the sole authority to enact and amend the Deferred Compensation Plan Administrative Procedures_AP), which provides direction and guidance to staff to ensure the directives of the Board and requirements of the Plan are being met. The Administrative Procedures shall provide guidance on the appointment, terms, meetings, and other matters of the Advisory Committee DCAC not specifically addressed by this Board Policy. The General Manager shall also be responsible for communicating any changes or important information about the administration of the Plan to the Board and ensuring the Plan Administrator is adequately carrying out their responsibilities. III. Role of the Advisory C^mmitteeDCAC The AdviseFy Gemmittee DCAC shall facilitate the internal administration of the Plan and advise on any major actions impacting the Plan and its participants prior to recommendation to the Board and/or General Manager. It is comprised of Plan participant employees thatare representative of the Central employee rr�ps and organ izational units as further outlined in the Administrative PrOGedures onaGte l by the General Managerin accordance with the AP enacted by the General Manager. The six -major roles of the Advisor„ Committee DCAC are described further as follows: 1. Internal Administration of the Plan The Gernmottee DCAC shall be responsible for developing, maintaining, and adhering to the Adminictro+i"o Drn-Ged irocAP within the provisions of the Plan agreement with the seleGte l third party administrator record keeper and Plan fiduciary adviseor. The Administrative Pronodu irocAP will outline protocols for the facilitation of routine business in regards Loin regard to the Plan and further clarify the roles and responsibilities of the Advisory CommitteeDCAC, Plan Administrator, staff, and TP-Arecord keeper. The A'�'''n,�tTa � ProGederesAP and any subsequent revisions thereto must be authorized by the General Manager prior to taking effect. 2. Participant Education and Outreach The DCAC shall oversee Darticioant education and outreach. which will be Primarily performed by the record keeper. The DCAC shall identify priorities for participant education and outreach and assist the record keeper in carrying out activities to support these priorities. Certain Plan information including contact information for the Plan Administrator. Plan staff. and record keener will be June 15, 2023 Regular Board Meeting Agenda Packet - Page 36 of 93 Page 5 of 6 Number: BP 047 DEFERRED COMPENSATION PLAN Page 3 of 4 maintained on the Plan web page, and Plan staff will periodically review the information for accuracy and relevance. Additionally, the DCAC shall periodical) review and assess educational and outreach efforts to ensure employees are adequately informed of Plan benefits, provisions, changes, and other significant matters.Tho Adyosory Gernmottee shall deyelon informs+inn s rnmarizina the Pla -- - - - - NOW - --ma 0-- 0-- m--- W-- w--- -- -- - - -- -- -- - - - - r 02 3. Fiduciary Oversight The Advisory Gemmittee DCAC shall act in a fiduciary oversight capacity over the Plan overseeing the activities of the TPA record keeper and working to obtain appropriate value for Plan participants ^onsisten+ with other goyernmon� �l deferred GornpeRsation plans of like size. 4. Unforeseen Emergency Withdrawals Unless delegated to the record keeper in the Administrative Services Agreement, rRequests for unforeseen emergency withdrawals of funds from the Plan must be reviewed by the Advisor„ Committee DCACor ror•ord Loonor Any such withdrawals must be authorized in accordance with the Internal Revenue Code. by the Advisory Committee in adyanGo If the record keeper is delegated the task of reviewing and determining unforeseen emergency withdrawal applications, a participant whose application has been denied shall be offered the opportunity to appeal the decision to the DCAC as described in the underlying AP. The DCAC shall ensure the Plan record keeper administers the review and approval of unforeseen emergency withdrawal applications in a reasonably timely manner, as specified in the record keeping administrative services agreement. 5. Investment Performance The Advisory Committee DCAC shall actively monitor and assess the quarterly, annual, and inoon+ion_to_date investment performance of the Plan and select and revise the investment design features of the Plan as necessary. Design features may include the number of and types of investment alternatives available to Plan participants. 6. Annual Report The AdviseFy GGmmittee DCAC shall submit an Annual Report to the Board which will summarize the Plan's investment performance, education and June 15, 2023 Regular Board Meeting Agenda Packet - Page 37 of 93 Page 6 of 6 Number: BP 047 DEFERRED COMPENSATION PLAN Page 4 of 4 outreach efforts, and performance of the TRArecord keeper. The report will also describe activities of the Adviser„ Committee DCAC and, if applicable, provide recommendations for change to the Plan document. IV. Role of the Plan Administrator Central San's Finance Manager shall serve as the Plan Administrator, responsible for managing the day-to-day administrative affairs of the Plan including, but not limited to the following: serving as the primary contact with the TP-Arecord keeper and Plate advisoer; ensuring participant contributions to the trust are made pursuant to plan and legal requirements; facilitating or overseeing participant services provided by the District or the record keeper to participants, including timely reviews of participant unforeseen emergency withdrawal and loan requests; monitoring and enforcing limits on participant deferrals, catch -ups, loans and unforeseen emergency withdrawals; record keeper representative availability to participants; participant education. The Plan Administrator shall have the authority to sign Plan documents that have been approved in form by the Board via minute motion or resolution. The Plan Administrator shall also serve as the Chair of the Advisory C M.ittPeDCAC, responsible for facilitating orderly meetings of the dyisepy Gemmittee DCAC necessary to comply with this Board Policy and the associated AcIministrn .PrI, rPsAP enacted by the General Manager. The Human Resources & Organizational Development Manager shall serve as the Deputy Plan Administrator, with all the responsibilities and powers of the Plan Administrator in the event the Finance Manager position is vacant. [Original retained by the Secretary of the District] June 15, 2023 Regular Board Meeting Agenda Packet - Page 38 of 93