HomeMy WebLinkAbout03.d. Presentation (Handout)Item 3.d. (Handout)
Background
Deferred Compensation Advisory 7,,
Committee (DCAC) established by Board _ dj
in 1982
Comprised of seven members appointed
by department headsi
DCAC membership designed to be
representative of workforce, including��
both Local 1 and MSCG
Finance Manager serves permanent
term as Chair and Plan Administrator
3
Plan Composition
• All full-time permanent employees
• Voluntary employee contributions only
• All full-time permanent employees
• Employer contribution of 6.2% up to statutory social
security income caps and terminal pay
• All Tier III full-time permanent employees
• Employer contribution of 1.5% of base salary
• Management & Unrepresented at -will
• Varying mandatory employee contributions, contingent
on group, hire date, and income bracket
4
DCAC Scope
Co -fiduciary to Central San Board over
Plan
Annual communication to Board
Scope of DCAC defined in the Deferred
Compensation Plan Board Policy (BP
047)
Investment Policy Statement (IPS) and
Education Policy Statement contained
within Administrative Procedures
Approval of Unforeseen Emergency
Withdrawals can be delegated to
recordkeeper
5
DCAC Membership
BargainingDepartment I Group
�
Arellano, Grace** Administrative Services Operations MSCG 12/31 /24** **
Assistant
2 Cruz,Tricia Accountant Administration Local 1 12/31/26 1
3 Lawson, Dana Senior Engineer Engineering MSCG 12/31/25 **
4 Mercerjustin InstrumentTechnician Operations Local l 12/31/26 2nd
5 Mizuno, Kevin Finance Manager
6 Niswander, Geoff Senior Household Hazardous Engineering Local 1 12/31/25 **
Waste Technician
7 Thomas, Christopher Accounting Supervisor Administration MSCG 12/31/24 2nd
*Committee Chair position is title -specific and not employee specific. Finance Manager position serves as Plan
Administrator and Committee Chair. Term limits do not apply.
**Appointed to complete term of predecessor pursuant to AP 047.
N�Nffifflwmn,_ �
1.
DCAC Activities &
Accomplishments
• Quarterly plan
Designed and
Design and
Conducted two
performance
approved efficient
rollout of
fiduciary training
reviews
fund menu
participant
sessions for
conducted.
investment lineup
education plan
DCAC members
• Adoption of a
for Plan which
for 2023
on plan
2024 DCAC
was rolled out
Formation of a
administration
budget returning
successfully in
sub -committee
and plan
excess admin to
June 2023
to test a new
governance
participants
financial planning
Sending DCAC
• Execution of a
tool for
member to
new 5-year term
participants,
annual NAGDCA
record keeping
expected to
conference
agreement.
rollout in 2024
7
New Core
Investment Menu
S
New structure in -line with best
practices issued by National
Savings to
Association of Governmental
participants
•Higher
Deferred Compensation
Administrators (NAGDCA)
benchmarked
Reduces "decision paralysis" by
funds for
Alleviates participants
cutting fund option choices in half
fiduciary risk
26 remaining options still provides for
diversity in
and burden
choice
Reduces
Projected to generate up to $1.675
participant
million in savings to participants
"Decision
through lower expense ratios over 5
paralysis"
years
8
M
Overview of New Core
Investment Lineup
• New fund lineup inspired by 3(21) fiduciary advisor
recommended structure (5-4-3-2-1-0)
• Total of 26 options (including self -directed brokerage),
compared to 50 offered previously
• 22 basis point overall reduction in fund expense ratios
• Self -directed brokerage option retained for participants
outside of core lineup
• Target Date Funds separated into 5-year retirement
increment groups spanning 2010 through 2060
Large Cap
Value 11
(Putnam
LCV)
Small Cap
Value III 11
(PIMCO
RAE)
0. Specialty (2)
I. Active International (1)
Large Cap
Growth III 11
(AB Large
Cap Growth)
Small Cap
Growth II 11
(AB Small
Cap Growth)
-o--6T CENTRAL SAN
Passive /Index
Funds
Four funds offered in passive/
index fund category
Each fund offered scored highest
rating possible (10) by 3(21)
fiduciary advisor
11
Other Funds
Three funds offered in active fixed
oncome fund category
One fund offered in active
international equity fund category
Additionally, two specialty funds
include:
Real Estate Investment (Cohen &
Steers Realty Shares Q
Retirement Fixed Income Fund
(MissionSquare Retirement
IncomeAdvantage Fund IRS)
12
Value Blend
J�
E
Growth
Int.Value Int. Blend Int. Growth
BlackRock
J
I:
Vl
Core Fixed Income Fixed Income Cash Equivalent
Active Fixed Income
Core Fixed Income Fixed Income Cash Equivalent
Lord Abbeft Core MissionSquare
Fixed Income R6 PLUS Fund Class
Active International Equity
Value Blend Growth
International Equity
11 (Fidelity Intl Cap
J ••
IA E
M
Self -Directed Brokerage
Option
Will continue to be offered outside of core investment
lineup
Designed for knowledgeable investors who wish to invest
outside of the core lineup
Central San not fiduciarily responsible for investments held
in self -directed brokerage accounts
Minimum balances and administration fees apply
13
Annual Report
Highlights
Assets in 457b plan make up 57%
of Plan assets, while 401a Plan is
approximately 42%
Largest share of plan assets is in
U.S. Equities
Assets in Balanced/Asset
Allocation and Stable Value / Cash
Management make up large
portion of plan assets
14
SUMMARY DISTIBUTION BY
INVESTMENTTYPE
International/Global Specialty
Stock 9.4%
3 g� !!! Stable Value/Cash
_Management
213%
U.S. Stock
32.9%,
Bonds
7.2%
Guaranteed
Lifetime Income
3.3 %
Balanced/Asset
Allocation
21.9%
i
7
Annual Report
Highlights
Market value of Plan increased
approximately 16.73% from the
prior year
2023 Events:
New Core Investment Lineup that
took into effect June 16, 2023
Federal Reserve interest rate hikes
Total contributions into plan were
$7.1 million
15
Annual Report
Highlights
US Equities consistently the largest
asset class in Plan
Decrease in relative proportion of
Stable Value/Cash Management
category offset by increase in
Balance/Asset Allocation category
Little change in Guaranteed
Lifetime Income, Bonds,
Specialties, or International
Equities
16
Total Market Value of Plan Assets as of
December 31 st
$200,000,000
$175,257,995 $174,820,254
$180,000,000
$152,787,496
$160,000,000
$140,000,000
$149,761,621
$120,000,000
$126,296,802
$100,000,000
$80,000,000
2019 2020 2021 2022 2023
Ratio of Investments by Type:
Central San's ICMA 457 and 401(a) Plans
45.00%
40.00%
35.00%
30.00%
25.00%
20.00%
5.00%
10.00%
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■ 2019 - 2020
_ 2021
2022 r 2023
go
2023 Education &
Outreach Efforts
A designated Retirement Plan Specialist
held 91 one-on-one meetings with
participants
A designated Retirement Plan Specialist
conducted 11 webinars on various
financial wellness topics for participants
Certified Financial Planners held 34 one-
on-one consultations with participants
46 webinars were conducted by
Certified Financial Planners on financial
planning and wellness topics
17
What's on the
horizon?
Execute 2024 participant education and
outreach program
Consider plan amendment for revokable
auto enrollments with default contribution
percentages (new employees only)
Assess impacts of Secure 2.0 legislation
and recommend plan changes to board if
appropriate
Roll out WellCents financial planning tool
targeted for new employees
IN
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