Travis County Commssioners Court
March 16, 2004
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Item 40
Why don't we call up number 40. And that is to consider and take appropriate action on request for proposal of deferred compensation and other financial services for county employees. There's a little backup on this and it just shows pacifically the worker's comp program. Various spenders over the last two, three, four years have basically told me that we haven't issued one in years, and three, claimed to have better services at lower prices as they all do. What I'm asking the court here basically is authorize the issuance of an r.f.p., Rfq or whatever request we would normally do, give those who provide these services an opportunity to propose, and we basically give ourselves plenty of time to put it in place. That basically is the request.
>> alicia, is this in the work plan?
>> no, ma'am. It is not part of our fy '04 work plan.
>> we did some work on this two years ago.
>> yes, sir, a couple of years ago, we looked at various r.f.p. And talked to a couple of other companies.
>> is there anything you've done this year that has been on the work plan?
>> no, sir.
>> you have added some items.
>> absolutely. When was the last time the court approved the work plan?
>> we'll bring it to you on Thursday.
>> when was the last ti
E the court approved the work plan?
>> in your budget.
>> the work plan in August, September?
>> yes, sir. You approved the budget, and that is a work plan for us, but we've developed a formal one and we'll bring it to you on Thursday. But i'll give you an example. Wellness was not in the budget and that's --
>> issue an r.f.p., A good idea or a bad one?
>> that is the pleasure of the court. I don't know that it is either a good or bad --
>> the last time we did it for this service?
>> 1980 -- this contract has been in place since 1980.
>> 24 years? I have no idea what the outcome would be, I just think that it's fair for us to do this. And I have talked about doing it for the last two or three years because I thought it was -- it was called to my attention actually more than three years ago. Now, in terms of -- how much work will it mean for you? Purchasing needs to be involved and some other people also, right?
>> yes, sir.
>> I think we ought to appoint a committee to work on this deal and tell them to take their time. I don't know that there's any big rush, but it is something that I think we ought to be doing, which is how much -- what percentage of the work has been done on the r.f.p.?
>> we have a couple of sample r.f.p.'s, and -- but we could work from -- I think there's a couple of issues that the committee and the court would want to consider. Are you intending to just open it up for other companies or one of the ideas that was out there, and we would not recommend --
>> by the way, I don't have any specific ideas.
>> all right.
>> my only idea is that we compete for this service.
>> it doesn't matter --
>> it could be that we end up choosing the same vendor. At least for those who have been talking to me over the last three years, I keep my promise of trying to issue the r.f.p.
>> an one other vendor with the vendor you now have.
>> I'm open to whatever -- I do think that a committee, unbiased, fair committee, should take a look at proposals. We see what the other major employers are dividing and at what cost. And bifkly -- basically make a fair decision based on that.
>> judge, I think there's a huge difference between whether you open it up for -- we're starting over from scratch versus we're looking at a proposal to potentially add on new vendors to this. Because there are a great number of employees that had their dollars invested in what I will call proprietary funds. They are very specific to this particular program. And if they are forced because we might move to a different
>> I have not heard anybody say this is a program that needs to be changed. And there are lots of salespeople that come around saying we're the biggest, we're the best, but these are professional services, and it's not in the same category as, say, a competitive contract. I really think that this is something that the employees ought to be telling us they are looking for either a second choice or a different choice, and I'm just flat out not hearing it. This will take an awful lot of time and attention, and it's my understanding from talking to alicia that this is not time sensitive in the sense that it has to occur by open enrollment. But we do have a major design that I think will be occurring related to our health insurance plans to bring forward rates. And that will take the time and attention of our employee benefits committee and hr that is time sensitive because of when open enrollment kurds. So to me if this is something that we're talking about wanting to see what's out there and to potentially add a second or third vendor, that is quite different from saying let's drop everything on something that has no deadline and put this in the mix when we have an awful lot of things that are extraordinarily time sensitive.
>> everything we do is time sensitive, number one.
>> (indiscernible).
>> let me have my say. Number two is those that want to stay with the deferred comp program, I have no problem with that. That would be the easiest way to do it. What I have in mind is not necessarily changing. What I have in mind is competing for the service. It makes sense. If I were one of the members employees in the deferred comp program, it could be that I might want to stay there. If we have the audit on this committee, we have the employees represented and if you say there are employees in the worker's comp, deferred compensation program, it appears maybe we ought to do that.
>> I just remember from having this gone to the employees benefits committee before, their recommendation was not to go out for an rfs at that time because it was something that was not necessary. A good number of the folks that used deferred comp get what I call the backup plan. It's the I don't want to think about what choice I want. I want the very specific -- in this case it's nationwide savings account because of the great uncertainty that's going out there in the market. There are a number of people that are in those kinds of accounts. I remember leroy nellis telling me the story eliminate related to the folks that are more on the sophisticated side that there are specific products that are offered by this vendor that are not necessarily there or open related to other vendors. So there may be people -- if you say you must switch who would have to pull money out of their investment strategy and go someplace else, but it is quite a different matter if we're talking about do we want the option of adding a second or a third, because then that keeps the employee whole, but if they don't want to talk about it, deal with it, make changes, then they can pay no attention to it. But for those who would like to switch, it is going to be totally going to be in there option or you make it available to new employees who have a number of people to switch from. But I don't want to go down a path that even remotely suggests that people will be forced to change deferred comp accounts if it came to that. And I have seen this happen in other counties and it has been ugly.
>> if we want to do this, we ought to get a committee to do it. If we don't want to do it, then we ought not do it. If the committee were to recommend that we not touch deferred comp, I don't have a problem with it. I'm just saying that it's time for us to compete for the service, appoint a committee that we think has more expertise than this court, including all five of us, as we normally do, and we basically evaluate the committee's recommendation or recommendations, whatever they are when they come back. It is early enough in the year for us to look toward the beginning of the fiscal year if we choose to do so. I mean, I -- 24 years is a long time. And three years of promises from me to different people is a long time too. In fairness I think we ought to go out. In fairness too, I'm willing to land wherever the committee thinks we ought to. There are a whole lot of factors that ought to be considered and I'm open to considering all of them. I don't have any kind of preset ideas on what the recommendations ought to be.
>> and in terms of who we are with, this is tied into the national association of counties. This is a contract that has been negotiated and it has the power of naco behind it related to the numbers and being able to backup that what they've got in terms of offerings that there is -- there is a national oversight that is quite different than if a county decides to go out on their own to do this.
>> that gets to the merit of the situation. Which I don't think we ought to do today.
>> so the thought is to refer this to a committee, judge, and see what their suggestions are?
>> yes.
>> so there's not a preconceived idea that we are or we're not.
>> the only preconceived ideas that i've heard today have been expressed by you.
>> and you.
>> I didn't express -- my only preconceived idea is it ought to be competed, which is about as general as you can get. And I said whatever recommendations come back, I will fairly consider and act on. What the action is, I thought i'd keep to myself.
>> and see, my problem is with the word competed because competed means that somehow there is a competition and somebody that we would be making decisions that will impact -- [overlapping speakers].
>> we would have an opportunity to review some sort of request before it goes out. We wouldn't know -- we would know who was on the evaluation committee. And if you want to do the survey before you do that or afterwards, I'm open. I don't have a preset disposition.
>> judge.
>> the beauty of me on this item is I'm going along with the majority one way or the other. I think it ought to be -- I think we ought to go out. And that's because 24 years is a long time. But i'll be able to say I i put it on the agenda and the court took action. I voted to go out and whatever the others vote, i'll share that too. Yes, sir.
>> well, as somebody that participates in the 457 plan, and I'm really surprised that we haven't gone out in 24 years. That's pretty crazy. And I do think that you need to compete these things. I do think that once you sit down with folks and they understand what the opportunities are and that they will make -- that they will make the right decision. I mean, I don't think anybody is going to be forced to do something that certainly is prudent and look and see what kind of programs there might be out there. I just zoomed that you probably did this every few years. But if that's not the case, you know, what do we have to lose? And the reason that you probably don't have a lot of folks talk to you about deferred compensation is because it is a little confusing to a number of people. We've only got one out of four people that participate in the deferred. And I would think that those -- that 25% is fairly attuned to what they're doing. And for one, I had no idea, again --
>> should we encourage others to participate? I did for years.
>> there could be so. I think putting the committee together to take a look at it is really a smart thing to do.
>> that's really all I had in mind. You could be right on the deferred comp. It may not make any sense in the world of change, and if so, we ought to let the employees know that. I'm just thinking that there -- we have people in house with the expertise. If we don't, the committee ought to let us know. Other major employers in the area have similar services, especially public employers. And it could be that the naco's effort is too good to be true. Hey, whatever we come back with, I'm fine. This language here is intended to be as neutral as it is. And I don't even use compete in the language.
>> that's what -- those are the words --
>> request for proposal on deferred comp and/or financial services.
>> when you talk about competing it, that implies that the court will be making some kind of decision based on some kind of a rate, and it's like these are employee decisions about how they choose to invest their dollars. And if you talk about a process that could end up with their being -- there being one vendor that's been there for a long time and a lot of our employees have been putting money into this for a long time and telling them that they have to switch because of the decision of this Commissioners court, that will be extraordinarily serious business. Very serious.
>> I told Commissioner hiel again stein two years ago hilgenstein two years ago that I thought the court should issue an r.f.p. On this and I thought he was in agreement. Issue an r.f.p. Is not saying nationwide, we'll see you later. It is saying basically, this is an opportunity for you to either resubmit your current proposal or show us the new stuff that you have. And I know they've been working on some new stuff. This is the time to look at it.
>> and when the employee committee looked a at that big parcel of stuff that was brought in to all of their questions, their decision then was there's no reason to go out?
>> when was that?
>> two years, three years ago. How long has it been alicia?
>> at least three.
>> two years?
>> three.
>> it could be that our committee looks at that same statistics and reaches the same conclusion.
>> okay. Move that we esh a -- issue a request for proposal as the agenda item says.
>> that's not what I heard you saying that that was your recommendation was to refer this to a committee, is owtion is whether to --
>> if this passes -- no. My recommendation to the committee would be to come back with a specific request at some point for us to review as well as a list of county people who would serve on the committee. I think we ought to approve that. And I don't have any preference of whether there are three or four people on the committee or 10 or 12. Your idea -- the whole idea was to get employee input, especially from those involved in the deferred comp. In my view it is best obtained after we get proposals in, but it doesn't -- I deferred to the committee on that.
>> I would ask that we wait until Commissioner Gomez gets back next week if we're talking about something as serious as an rfs.
>> [ inaudible ]. Everything we do affects the whole county. But let me ask this question. Alicia, I participate, for example, in the deferred compensation. And, of course, the request for proposal as the motion was made suggests that there would be other entities that would be involved in deferred comp. That does not necessarily mean -- I want to make sure the employees understand this. That does not necessarily mean that because someone else becomes a part of deferred compensation doesn't mean they have to switch to that. In other words, there would be other opportunities to do that, but nothing that would be binding whereby they would have to alter, interview with their existing deferred comp under the people that we're using currently. Is that --
>> it would depend on how you structured the r.f.p. The last time we discussed it, yes, that would be the recommendation that you would -- that nationwide would be left in place to where people wouldn't have to switch their fund, but you could have, for example, icma or you could have another company. You could have two or three other companies to provide choice to the employees.
>> well, if it's an optional thing, I think it something that we can look at. But if someone said -- that's my whole point. I don't know whether if there are reconstructive or the details of the r.f.p., How would it be structured and how would it be defined, what would the language be in the r.f.p.? I don't know those things.
>> we would have to approve the r.f.p. Before it's issued. Commissioner Sonleitner asked for one week on this. We'll have it back on the sowrt court's agenda next week.
>> thank you.
Last Modified: Wednesday, March 17, 2004 7:22 AM