Special Notice / Hearing: None__
Vote Required: Majority
To: Honorable Board of Supervisors
From: Rocio Kiryczun, Human Resources Director
Kim Pearson, Benefits Manager
Subject: Agreement with Innovest Portfolio Solutions LLC as the investment and fiduciary consultant to the County’s Deferred Compensation Advisory Committee
RECOMMENDATION:
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Adopt a resolution authorizing:
A) A two-year extension to the agreement with Innovest Portfolio Solutions LLC as the investment and fiduciary consultant to the County’s Deferred Compensation Advisory Committee and its defined contribution retirement plans for the period from January 1, 2025, to December 31, 2026, with the aggregate amount not to exceed $65,000 each year or $270,000 in total; and
B) The Director of Human Resources to execute contract amendments which modify the County's maximum fiscal obligation by no more than $25,000 (in aggregate), and/or modify the contract term and/or services so long as the modified term or services is/are within the current or revised fiscal provisions.
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BACKGROUND:
After a request for proposals process was conducted in 2021, the Deferred Compensation Advisory Committee on September 29, 2021, approved a three-year contract with Innovest to serve as the investment and fiduciary consultant for the County’s defined contribution plans. As part of the approval process, the DCAC authorized an option for a one-time 24-month extension. This memo recommends exercising the extension option.
DISCUSSION:
Over the course of its three-year contract, Innovest has successfully fulfilled its obligations to the County.
• Innovest has attended and participated in five DCAC meetings per year plus staff’s preparation and debriefing meetings for each DCAC meeting (15 meetings per year related to DCAC meetings).
• For each DCAC meeting, it has provided market and investment performance updates and has recommended replacement investment options as necessary.
• It has provided fiduciary education for each meeting as well as legislative updates.
• Innovest has also provided an annual investment fee review and analysis.
• Innovest conducted the 2022 recordkeeper RFP-an estimated $40,000 effort-as part of its total compensation.
• In addition, Innovest has consistently provided input and guidance throughout each calendar year on fiduciary issues related to numerous special projects.
The original three-year contract included total compensation of $170,000, inclusive of estimated cost-of-living adjustments in Years 2 and 3 based on the Consumer Price Index.
|
|
Annual Total |
|
• 2022 quarterly billings @$12,250 |
$ 49,000 |
|
• 2023 quarterly billings @$12,985 |
51,940 |
|
• 2024 quarterly billings @$13,401 |
53,604 |
|
Three-Year Total |
$ 154,544 |
Assuming conservative CPI adjustments of 3% in 2025 and 2026, additional compensation during the extension would total $115,000, bring the aggregate compensation during the five-year contract to $270,000.
The extension with Innovest will continue existing services. County Attorney has reviewed and approved the Resolution and Agreement as to form.
PERFORMANCE MEASURES:
|
Measure |
2025 Estimate |
2026 Estimate |
|
Provide market and investment performance updates for each quarterly DCAC meeting. |
100% |
100% |
|
Provide fiduciary education for each quarterly DCAC meeting. |
100% |
100% |
|
Provide legislative updates for each quarterly DCAC meeting. |
100% |
100% |
FISCAL IMPACT:
There is no net County cost associated with this agreement, as the cost is fully covered by the Deferred Compensation Trust Fund, which is funded through administrative reimbursements charged to participant accounts. The 2024-25 Deferred Compensation budget, approved by the DCAC in May 2024, already includes the cost of this agreement as an ongoing expense.