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Page 2 of 3 <br />City of Redwood City 1017 Middlefield Road, Redwood City, CA. 94063 Tel: 650-780-7000 www.redwoodcity.org <br />MissionSquare Retirement (formerly, ICMA Retirement Corporation) <br />Nationwide <br />Voya <br />While the basic provisions of the plans are substantially the same, the investment funds available under <br />each plan to participants differ. <br />ANALYSIS <br />The City strives to maintain a variety of benefit options that meet the individual needs of its diverse <br />employee population and that allow the City to remain competitive in the labor market as an employer of <br />choice. Consistent with this intent, employees may choose to enroll in any of the four available 457 <br />deferred compensation plans available through the City. <br />The City should also have the agility to establish and modify 457 plans to ensure they continue to meet <br />the needs of a changing employee population and are responsive to external factors that affect the <br />benefit, such as fluctuations in the market and on investment returns. Currently, establishing or modifying <br />457 plans requires formal Council approval, a process that can delay the City’s ability to make timely <br />changes by weeks or months. Delegating the authority to establish and amend 457 plans to the City <br />Manager will allow for more immediately responsive changes to quickly correct errors and provide the <br />most beneficial plans to employees. <br />The City’s deferred compensation plans have not been updated for an extended period, resulting in the <br />following negative impacts: <br />All investment line up decisions must currently be made by the City, placing an undue burden on <br />the City, whereas a better practice would be to delegate these decisions to an experienced <br />fiduciary. <br />Current target date funds are underperforming. <br />The City offers a 2050 target date fund (for individuals eligible to retire in 2050), whereas most <br />modern plans offer at least 2065 target date funds. <br />The City would like to consider consolidating 457 plans, as fewer plans with more enrollments will <br />likely result in cost savings for the City. <br />On January 4, 1999, the City Council approved Resolution 13532, which appointed the City’s Finance <br />Director to act as Custodian/Trustee for the City of Redwood City’s Deferred Compensation Plan and Trust. <br />In partnership with the Finance Director, the City Manager can make informed and swift decisions to <br />continue to provide outstanding benefits to employees. <br />FISCAL IMPACT <br />Funding for administering the 457 deferred compensation plans is included in the FY 2025-26 Proposed <br />Budget. <br />6.C. - Page 2 of 4 <br />32