BOARD MEETING DATE: January 4, 2008
AGENDA NO. 4

Execute Contract for Deferred Compensation Plan Consultant Services

SYNOPSIS:

AQMD sponsors an IRS-approved 457 Deferred Compensation for its employees. State law governs the fiduciary requirement for the operation and investment of 457 plans sponsored by governmental entities. This action is to execute a contract with Benefit Funding Services Group for consultant services focused on assisting staff in developing a formal Deferred Compensation Committee Charter and Investment Policy Statement; and in providing analysis of plan assets and investment options, employee education and administrative support. These consultant services will be funded on a cost reimbursement basis by AQMD’s 457 Plan vendor (The Hartford) as provided for under the Internal Revenue Code.

COMMITTEE:

Administrative, December 14, 2007, Recommended for Approval

RECOMMENDED ACTION:

Authorize the Executive Officer to execute a contract with Benefit Funding Services Group to provide 457 Deferred Compensation Plan Consultant Services at an annual cost of $30,000.

Barry R. Wallerstein, D.Env.
Executive Officer

Background

AQMD sponsors and administers a 457 Deferred Compensation Plan 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. The AQMD 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. An RFP for 457 Plan Consulting Services was issued on October 5, 2007. These services are for a period of three years with the option to extend the services for two additional one-year renewals.

Outreach

In accordance with AQMD’s Procurement Policy and Procedure, a public notice advertising the RFP/RFQ and inviting bids was 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 have been notified utilizing AQMD’s own electronic listing of certified minority vendors. Notice of the RFP/RFQ have been 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. Information was also available on AQMD’s bidder’s 24-hour telephone message line (909) 396-2724.

Proposal

Five bids were received in response to the RFP when final bidding closed at 1:00 p.m. on November 9, 2007. The proposals were reviewed by the Deferred Compensation Committee. Two of the bidders did not meet the minimal technical score and were disqualified.

The evaluation results for the remaining three bidders are:

* Small Business/Local Business Points

Resource Impacts

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