Travis County Commissioners Court
December 13, 2005
Item 8
Item number 8, consider and take appropriate action on the following, a, discuss and take appropriate action on the deferred compensation 457-b plan consultant for Travis County. And b, approve contract award for the deferred compensation 457-b plan consultant for Travis County, rfs s 0' 118-oj to the best qualified responsibility, the retirement store. >> good morning. Last June the court asked us to -- directed staff to invite competition for the -- to hire a consultant to review our deferred compensation plan, 457 plan. 457 plan is an avenue for employees to save money on a tax deferred basis. The plan right now holds about $23 million. It is administered by nationwide through (indiscernible). And this is one of the recommendations that is committee of employees made to the court was to hire a consultant to review the plan. The cost for the consultant would be paid or reimbursed to the county by the administrator of the plan when one was chosen, or if the court diseedz just to stay with nationwide, nationwide has agreed to reimburse the county for the consultant services. In your backup you see the tasks to be accomplished by the consultant, and there's the development of a planning review objective, a policy to ensure that there's due diligence and administration of the plan, consultation on improvements of plans, assistance with developing a policy for the 457 investment option, and then looking at fees, the plan design and presenting those findings to the court. Also, if the court decided to go out on an r.f.p., the consultant would also assist with developing a request for proposals for distribution, help us identify companies or firms to receive those proposals, assist with the evaluation, criteria and evaluation, and then assist with the negotiation of a new contract or negotiation with the current administrator, which is nationwide.
>> it sounded slightly different at the beginning than it did at the end, so I want to make sure that people have a clear understanding. So where are we going with all of this? If this is to verify are we getting the best that we can from our current provider, that's one thing. If we're making sure we get from the current provider and if there are any gaps and a second provider is brought in, that's another thing, but if this is saying that somehow we are going to start from scratch and raise the possibility to a lot of county employees that we will switch vendors when people are not e-mailing me saying I am unhappy and want you to get a new 457. I知 hearing from people who in seeing this posting are going, what are you doing!!?? So if this is a process to verify, I知 cool with that. If this is a process that says there are gaps, then perhaps a second vendor needs to be brought in to give people choices, I知 also cool with that because I know which choice I知 going to make, but if this is one that we are going to move in a direction of start from scratch and that people face the loss of switching their retirement choices from where we are right now, then I just need to have a clear understanding of where we are headed because two of those options don't bother me, and I知 fine with and let the process work. But the third one, and that's what I知 hearing from employees going, what are you doing? Please enlighten us all.
>> and I知 getting the smaim e-mails from -- same e-mails from employees wondering what we're doing and that they're very happy with the present provider.
>> the two options that you mentioned first, Commissioner Sonleitner, the direction that we're going, we've been with the naco program since the early 1980's and there's never been a review of this program. The size of the program now is $23 million. And there's a certain amount of due diligence and fiduciary responsibility that we believe the county needs to exercise. When the subcommittees looking at the 457-b program reviewed what we had and where we were going, we realized that this was a very involved program, 457-b. And that's the reason we brought back to court the request to hire a consultant who is an expert in that field. It was to review the program that we have now, the administration, the offerings, the stocks, as well as the fees being charged. It's not to start from scratch, it's to establish that we have the best benefit for our employees at the most reasonable cost, and that the administration is adequate to meet the needs of the 457 program. It's not to come in and replace anyone, it's not to start from scratch, it's to analyze and make recommendations to the court on the program that we have now. The intention is that once the analysis is done and the recommendation is developed that we would come back to Commissioners court for your further direction on what you want us to do.
>> I just want to make sure that that's understood. So are you saying that as we go through this due diligence, under no circumstances will there be an option out there that says that people will not retain the option choice discretion to stick with what they've got as opposed to having the change?
>> if that's the direction the court gives us, then that's exactly what the procedure will be.
>> I知 just wondering out loud here why are we not saying that out loud right now? And I知 fine with the due diligence because I think it's good, it's warranted, et go there. But I just don't want there to be some decision point that somehow after we get through all of this, somebody says, do you know what, we are going to throw it all out because I think that's very disruptive to our employees of going, I don't want to do this.
>> we want to make sure the employees have the option of keeping what they have is what you're saying.
>> that's all I知 saying, judge.
>> I致e said that before and it doesn't bother me at all. It's their money, ought to be their option.
>> and that's the intention --
>> in that case I move approval of a and b. Of number 8.
>> I値l second that. Let me ask you this also. When could we expect the result of what these suggested findings will come back to the Commissioners court if we go through this route?
>> the solicitation contained a calendar and a task list, and it's eight weeks from the notice to proceed, so once the court makes a decision on the consultant, it would be eight weeks from that point, so I would imagine early to mid March.
>> early to mid March of '06. Okay. Well, anyway, I would like to see what those things are, but again, we don't mind looking at that. I think we're going to go there as far as the board is concerned, but I think it's something good to see. Take a peek and see exactly what is going on. So -- I have no problem with that, that's why I second the motion.
>> any more discussion?
>> yeah, judge. I don't want employees to be frightened about that you're going to be -- you're not going to have a choice. That's not what this is about. What this is about is the Commissioners court making sure that we have the best 457 plan that we can possibly have. You're right. None of us probably get e-mails about I知 not happy with my 457 plan. But I will also tell you, after 20 something years in this county, people haven't known what are my choices, what our comparisons -- I壇 like to know what las vegas county, what program are they in? Maybe it's not nationwide. Maybe it's this. I mean, I would think that if you ask every employee in Travis County, they would say give me the comparisons of five different people that do these programs, and you say, nationwide has done this for us, so and so has done this for us, and you find some bigger number, I will tell you that you will get a lot of e-mails from people saying why aren't I doing something that gives me the better yield. I知 not saying that they're not -- this is -- this from the git-go has not been pleasant for me, and pleasant for anybody because I think that there are a number of people who think that you ought to stay. If nationwide is not the people doing this, something is wrong. I知 not saying that at all. Nationwide may be the people who ought to be doing this.
>> nationwide is on our side. [ laughter ]
>> I致e heard that jingle. We've already benefitted -- Travis County needs to understand that we've already benefitted from this. And we've benefitted from fees being changed, things being brought to the table that would not have been brought to the table had we got gone through this process. That is not a condemnation of anyone because that is how this world works, competition makes things better for all of us. So every time this gets brought up, I mean, somebody gets defensive about it, I think we're going to leave this company, I知 not going to leave the company if it's the company doing the best job for the former employees of Travis County. And that's what everybody that's watching this needs to hear today. And so if that's the case, unfortunately we've already heard it's probably not going to work best if you divide this thing up, and some people can go over here and some people can stay. I mean, we know that, let's just admit it. Two providers is not -- nationwide will tell us that, even though they probably would not -- they would probably rather have half than none. I guess, I don't know. But most likely where we're headed is trying to make the right choice for the entity that is going to do the best job for the employees in our 457 plan. And I would think that, you know, having somebody that really knows this business, the folks that are coming in this instance, the retirement store, I think we're going to get that. I look forward to whoever -- if it's nationwide, then thanks. Let's move on and go on down the road. And maybe that's what it will be. Who is the major administrator or the person, the contact person for the retirement store that we're going to be dealing with?
>> al dechristophero. I believe he's in the back of the room.
>> the only thing I would want to add on this is we need to validate what's going on. I will also say, though, that naco has been validating what's been going on because they go through a process annually in terms of their independent committees about is this the best deal on behalf of the national association of counties? We get the benefit of their expertise on this and they have the ability to change out that provider in terms of the naco arm on this. The reason that folks are being cautious and raising appropriate questions about where is this headed is because it has happened in other counties that decisions have been made to yank it from one provider and give it to another under the auspice of, well, we're just trying to give you a better deal. And the employees have gotten angry because it's like, thank you very much, but I get to decide what's best for me and my family and my retirement situation. And so I知 going to go back to where the judge is in saying, I think we're headed to leaving people with the choice of where they want to be, and that this is not going to be something that will require a change if people don't want to.
>> all in favor of the motion? Show Commissioners Davis, Sonleitner, yours truly and Commissioner Daugherty. Commissioner Gomez voting against. Thank you very much. See you back mid to late March.
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Last Modified:
Tuesday, December 13, 2005 3:38 PM