BOARD MEETING DATE: October 5, 2007
AGENDA NO. 15

RECOMMENDED ACTION:

Approve release of the attached Request for Proposals #P2008-06 for 457 Deferred Compensation Plan Consultant Services funded on a cost reimbursement basis by The Hartford.

Barry R. Wallerstein, D.Env.
Executive Officer

Background

AQMD sponsors and administers a 457 deferred compensation program for its employees. State law governs the fiduciary requirement for the operation and investment of 457 plans sponsored by governmental entities. Subsections (a), (b) and (c) of Article XVI, Section 17, of the California Constitution contain the provisions governing the fiduciary duties for the administration of public pension and retirement systems. Since 457 plans are deferred compensation plans for state and local governments, a 457 plan satisfies the definition of public pension and retirement funds for purposes of the California Constitution. This means that the Governing Board serves a fiduciary role subject to the duties and obligations under Article XVI, Section 17.

To meet its fiduciary responsibilities, the Governing Board, at the time it established AQMD’s 457 Plan also established a Deferred Compensation Committee to oversee the administration of the Plan. The current committee is composed of the District Counsel, Chief Financial Officer, Assistant Deputy Executive Officer/Administration and a Human Resources Manager.

Request for Proposals

This action is to issue an RFP for consultant services focused on assisting staff in the discharge of the agency’s fiduciary responsibilities, which include development of a formal Deferred Compensation Committee Charter and Investment Policy Statement; and in providing ongoing analysis of plan assets and investment options, employee education and administrative support.

Bid Evaluation

The contractor will be selected through an open bid process according to AQMD's Consultant Selection Policy and Proposals. It is anticipated that a single award will be made from this solicitation.

Outreach

In accordance with AQMD’s Procurement Policy and Procedure, a public notice advertising the RFP/RFQ and inviting bids will be published in the Los Angeles Times, the Orange County Register, the San Bernardino Sun, and Riverside County Press Enterprise newspapers to leverage the most cost-effective method of outreach to the entire South Coast Basin.

Additionally, potential bidders may be notified utilizing AQMD’s own electronic listing of certified minority vendors. Notice of the RFP/RFQ will be mailed to the Black and Latino Legislative Caucuses and various minority chambers of commerce and business associations, the State of California Contracts Register website, and placed on the Internet at AQMD’s Web site (http://www.aqmd.gov where it can be viewed by making menu selections “Inside AQMD”/“Employment and Business Opportunities”/“Business Opportunities” or by going directly to http://www.aqmd.gov/rfp/index.html). Information is also available on AQMD’s bidder’s 24-hour telephone message line (909) 396-2724.

Benefits to AQMD

A recently completed Fiduciary Structure and Cost Assessment review of the AQMD plan established that the plan’s current mix of investment options performs well, both in earnings and costs, when benchmarked to other plans. The proposed consultant services will assist AQMD in optimizing its 457 program, bringing it up to date with current fiduciary and administrative practices, and ensuring regulatory compliance.

Resource Impacts

These consultant services will be funded on a cost reimbursement basis by the 457 plan vendor (The Hartford) as provided for under the Internal Revenue Code.

Attachment (DOC 816kb)
RFP #P2008-06 - Deferred Compensation Plan Consultant Services