To: Honorable Mayor and Members of City Council
From: Rajneil Prasad, Finance Director
Prepared By: Rajneil Prasad, Finance Director
TITLE:
Title
Post Employment Health Plan (PEHP) Adoption
LABEL
RECOMMENDED ACTION:
Recommendation
Adopt a resolution authorizing the adoption of the Post Employment Health Plan for Public Employees (PEHP), and authorizing the Finance Director to execute plan documents.
Body
DISCUSSION:
The City of Napa has had two recordkeepers for its Deferred Compensation 457(b), 401(a) and Retirement Health Savings plans, Nationwide and Mission Square. The city also has a Defined Contribution Plans Advisory Committee with representation from each of the six bargaining units, unrepresented, City Manager’s office, Finance, and HR. The Finance Director functions as the chairperson of the committee. The committee meets quarterly to review the Deferred Compensation 457(b), 401(a) and Retirement Health Savings plans.
The Hyas Group is an institutional consulting firm based in Portland, Oregon. They are the market leader in public sector DC consulting space. Hyas Group was hired by the City in May 2021 and facilitates reporting and meetings with the City of Napa Defined Contribution Plans Advisory Committee each quarter.
The Hyas Group, who serves as a co-fiduciary to the City of Napa’s Defined Contribution (DC) 457(b), 401(a) and Retirement Health Savings plans, distributed an RFP for plan recordkeeping and administration on April 17th, 2024. The objective of the RFP was to consolidate the two current DC Plan providers (MissionSquare and Nationwide) to a single recordkeeper, which is a best practice in the industry. Responses were received on June 6, 2024, from eight vendors, including: Corebridge, Empower, Lincoln, MissionSquare, Nationwide, OneAmerica, TIAA and Voya. The Hyas Group prepared an analysis of the vendor responses and discussed this analysis with the City of Napa Defined Contribution Plans Advisory Committee. After thorough evaluation, the Committee selected three firms to interview: Empower, MissionSquare and Nationwide. Finalist interviews were conducted in-person on August 27th, 2024. The Advisory Committee advised and the Finance Director selected Nationwide as the sole vendor for Napa’s Defined Contribution plans going forward
The City Council at its last meeting on November 19, 2024, authorized the consolidation of the recordkeeper and authorized the Finance Director to execute plan documents. As part of the consolidation and transition to Nationwide, this plan will now be administered by Nationwide Retirement Services (NRS) as well.
The transition to Nationwide should be completed by early next year.
FINANCIAL IMPACTS:
There are no direct costs to the City for adopting these plans. The actual cost of employer contributions that are negotiated between the City and bargaining unit(s) are included in the cost of the MOU and budgeted accordingly.
CEQA:
The Finance Director has determined that the recommended actions described in this agenda report are not subject to CEQA, pursuant to CEQA Guidelines Section 15060(c).
DOCUMENTS ATTACHED:
ATCH 1 - Resolution
EX A - City of Napa PEHP Plan Document
NOTIFICATION:
None.