HomeMy WebLinkAboutContract 46185 CITY sECRETAW
COMT(FlF C 6 NO.
ADMINISTRATIVE SERVICES AGREEMENT
Between
ICMA Retirement Corporation
and
City of Fort Worth
Type: 401
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Plan number 106439
ADMINISTRATIVE SERVICES AGREEMENT
This Administrative Services Agreement ("Agreement"), made as of the day
of , 2014 (herein referred to as the "Effective Date"), between the International
City Management Association Retirement Corporation ("ICMA-RC"), a nonprofit
corporation organized and existing under the laws of the State of Delaware, and the City
of Fort Worth (`Employer"), a City organized and existing under the laws of the State of
Texas with an office at 1000 Throckmorton, Fort Worth, Texas 76102.
RECITALS
Employer acts as public plan sponsor of a retirement plan ("Plan"), and in that
capacity, has responsibility to obtain administrative services and investment alternatives
for the Plan;
VantageTrust is a group trust established and maintained in accordance with New
Hampshire Revised Statutes Annotated section 391:1 and Internal Revenue Service
Revenue Ruling 81-100, 1981-1 C.B. 326, which provides for the commingled
investment of retirement funds held by various state and local governmental units for
their employees;
ICMA-RC acts as investment adviser to VantageTrust Company, LLC, the
Trustee of VantageTrust;
ICMA-RC has designed, and VantageTrust offers, a series of separate funds (the
"Funds") for the investment of plan assets as referenced in VantageTrust's principal
disclosure document, "Making Sound Investment Decisions: A Retirement Investment
Guide" and the accompanying VantageTrust Fund Fees and Expenses document
("Retirement Investment Guide").
The Funds are available only to public employers and only through VantageTrust
and ICMA-RC.
In addition to serving as investment adviser to VantageTrust, ICMA-RC provides
a range of services to public employers for the operation of employee retirement plans
including, but not limited to, communications concerning investment alternatives,
account maintenance, account recordkeeping, investment and tax reporting,transaction
processing, benefit disbursement, and asset management.
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Plan number 106439
AGREEMENTS
1. Appointment of ICMA-RC
Employer hereby appoints ICMA-RC as Administrator of the Plan to perform all
nondiscretionary functions necessary for the administration of the Plan. The functions to
be performed by ICMA-RC shall be those set forth in Exhibit A to this Agreement.
2. Adoption of Trust
Employer has adopted the Declaration of Trust of VantageTrust Company and agrees to
the commingled investment of assets of the Plan within VantageTrust. Employer agrees
that the investment, management, and distribution of amounts deposited in VantageTrust
shall be subject to the Declaration of Trust, as it may be amended from time to time and
shall also be subject to terms and conditions set forth in disclosure documents (such as
the Retirement Investment Guide or Employer Bulletins) as those terms and conditions
may be adjusted from time to time.
3. Employer Duty to Furnish Information
Employer agrees to furnish to ICMA-RC on a timely basis such information as is
necessary for ICMA-RC to carry out its responsibilities as Administrator of the Plan,
including information needed to allocate individual participant accounts to Funds in
VantageTrust, and information as to the employment status of participants, and
participant ages, addresses, and other identifying information (including tax identification
numbers). Employer also agrees that it will notify ICMA-RC in a timely manner
regarding changes in staff as it relates to various roles. This is to be completed through
the online EZLink employer contact options. ICMA-RC shall be entitled to rely upon the
accuracy of any information that is furnished to it by a responsible official of the
Employer or any information relating to an individual participant or beneficiary that is
furnished by such participant or beneficiary, and ICMA-RC shall not be responsible for
any error arising from its reliance on such information. ICMA-RC will provide reports,
statements and account information to the Employer through EZLink, the online plan
administrative tool.
Employer is required to send in contributions through EZLink, the online plan
administration tool provided by ICMA-RC. Alternative electronic methods may be
allowed, but must be approved by ICMA-RC for use. Contributions may not be sent
through paper submittal documents.
To the extent Employer selects third-party funds that do not have fund profile
information provided to ICMA-RC through our electronic data feeds from external
sources (such as Morningstar) or third party fund providers, the Employer is responsible
for providing to ICMA-RC timely fund investment updates for disclosure to Plan
participants. Such updates may be provided to ICMA-RC through the Employer's
investment consultant or other designated representative.
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Plan number 106439
Failure to provide timely fund profile update information, including the source of the
information, may result in a lack of fund information for participants, as ICMA-RC will
remove outdated fund profile information from the systems that provide fund information
to Plan participants.
4. Certain Representations and Warranties
ICMA-RC represents and warrants to Employer that:
(a) ICMA-RC is a non-profit corporation with full power and authority to
enter into this Agreement and to perform its obligations under this
Agreement. The ability of ICMA-RC to serve as investment adviser to
VantageTrust is dependent upon the continued willingness of
VantageTrust for ICMA-RC to serve in that capacity.
(b) ICMA-RC is an investment adviser registered as such with the U.S.
Securities and Exchange Commission under the Investment Advisers Act
of 1940, as amended.
(c) ICMA-RC shall maintain and administer the Plan in accordance with the
requirements for plans which satisfy the qualification requirements of
Section 401 of the Internal Revenue Code and other applicable federal
law; provided, however, ICMA-RC shall not be responsible for the
qualified status of the Plan in the event that the Employer directs ICMA-
RC to administer the Plan or disburse assets in a manner inconsistent with
the requirements of Section 401 or otherwise causes the Plan not to be
carried out in accordance with its terms; provided, further, that if the plan
document used by the Employer contains terms that differ from the terms
of ICMA-RC's standardized plan document, ICMA-RC shall not be
responsible for the qualified status of the Plan to the extent affected by the
differing terms in the Employer's plan document. ICMA-RC shall not be
responsible for monitoring state or local law affecting retirement plans or
for administering the Plan in compliance with local or state requirements
affecting retirement plans unless Employer notifies ICMA-RC of any such
local or state requirements.
Employer represents and warrants to ICMA-RC that:
(d) Employer is organized in the form and manner recited in the opening
paragraph of this Agreement with full power and authority to enter into
and perform its obligations under this Agreement and to act for the Plan
and participants in the manner contemplated in this Agreement. Execution,
delivery, and performance of this Agreement will not conflict with any
law, rule, regulation or contract by which the Employer is bound or to
which it is a party.
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Plan number 106439
(e) Employer understands and agrees that ICMA-RC's sole function under
this Agreement is to act as recordkeeper and to provide administrative,
investment or other services at the direction of Plan participants, the
Employer, its agents or designees in accordance with the terms of this
Agreement. Under the terms of this Agreement, ICMA-RC does not
render investment advice, is not the Plan Administrator or Plan Sponsor as
those terms are defined under applicable federal, state, or local law, and
does not provide legal, tax or accounting advice with respect to the
creation, adoption or operation of the Plan and its related trust. ICMA-RC
does not perform any service under this Agreement that might cause
ICMA-RC to be treated as a"fiduciary" of the Plan under applicable law.
(f) Employer acknowledges and agrees that ICMA-RC does not assume any
responsibility with respect to the selection or retention of the Plan's
investment options. Employer shall have exclusive responsibility for the
Plan's investment options, including the selection of the applicable mutual
fund share class. Where applicable, Employer understands that the VT
Retirement Income Advantage Fund is an investment option for the Plan
and that the fund invests in a separate account available through a group
variable annuity contract. By entering into this Agreement, Employer
acknowledges that it has received the Important Considerations document
and the Retirement Investment Guide and that it has read the information
therein concerning the VT Retirement Income Advantage Fund.
(g) Employer acknowledges that certain such services to be performed by
ICMA-RC under this Agreement may be performed by an affiliate or
agent of ICMA-RC pursuant to one or more other contractual
arrangements or relationships, and that ICMA-RC reserves the right to
change vendors with which it has contracted to provide services in
connection with this Agreement without prior notice to Employer.
Notwithstanding anything in this Agreement to the contrary, ICMA-RC
shall retain ultimate responsibility for the provision of all services under
this Agreement, whether provided by ICMA-RC or by and affiliate or
agent.
(h) Employer acknowledges that it has received ICMA-RC's Fee Disclosure
Statement, prepared in substantial conformance with ERISA regulations
regarding the disclosure of fees to plan sponsors.
(i) Employer approves the use of its Plan in ICMA-RC external media,
publications and materials. Examples include press releases
announcements and inclusion of the general plan information in request
for proposal responses.
5. Participation in Certain Proceedings
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Plan number 106439
The Employer hereby authorizes ICMA-RC to act as agent, to appear on its behalf, and to
join the Employer as a necessary party in all legal proceedings involving the garnishment
of benefits or the transfer of benefits pursuant to the divorce or separation of participants
in the Plan. Unless Employer notifies ICMA-RC otherwise, Employer consents to the
disbursement by ICMA-RC of benefits that have been garnished or transferred to a
former spouse, current spouse, or child pursuant to a domestic relations order or child
support order.
6. Compensation and Payment
(a) Plan Administration Fee. The amount to be paid for plan administration
services under this Agreement shall be 0.55%per annum of the amount of
Plan assets invested in VantageTrust. Such fee shall be computed based on
average daily net Plan assets in VantageTrust.
(b) Account Maintenance Fee. There shall be an annual account
maintenance fee of$25.00. The account maintenance fee is payable in full
on January 1 of each year on each account in existence on that date. For
accounts established after January 1, the fee is payable on the first day of
the calendar quarter following establishment and is prorated by reference
to the number of calendar quarters remaining on the day of payment.
(c) Mutual Fund Services Fee. There is an annual charge of 0.15% assessed
against average daily net Plan assets invested in VantageTrust's Trust
Series funds, which are a group of funds each of which invests
substantially all of its assets in a third-party mutual fund not affiliated with
ICMA-RC. .
(d) Compensation for Management Services to VantageTrust,
Compensation for Advisory and other Services to The Vantagepoint
Funds and Payments from Third-Party Mutual Funds. Employer
acknowledges that, in addition to amounts payable under this Agreement,
ICMA-RC receives fees from VantageTrust for investment advisory
services and plan and participant services furnished to VantageTrust.
Employer further acknowledges that certain wholly owned subsidiaries of
ICMA-RC receive compensation for advisory and other services furnished
to The Vantagepoint Funds, which serve as the underlying portfolios of a
number of Funds offered through VantageTrust. For a VantageTrust Fund
that invests substantially all of its assets in a third-party mutual fund not
affiliated with ICMA-RC, ICMA-RC or its wholly owned subsidiary
receives payments from the third-party mutual fund families or their
service providers in the form of 12b-1 fees, service fees, compensation for
sub-accounting and other services provided based on assets in the
underlying third-party mutual fund. These fees are described in the
Retirement Investment Guide and ICMA-RC's fee disclosure statement.
In addition, to the extent that third party mutual funds are included in the
investment line-up for the Plan, ICMA-RC receives administrative fees
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Plan number 106439
from its third party mutual fund settlement and clearing agent for
providing administrative and other services based on assets invested in
third party mutual funds; such administrative fees come from payments
made by third party mutual funds to the settlement and clearing agent.
(e) Redemption Fees. Redemption fees imposed by outside mutual funds in
which Plan assets are invested are collected and paid to the mutual fund by
ICMA-RC. ICMA-RC remits 100% of redemption fees back to the
specific mutual fund to which redemption fees apply. These redemption
fees and the individual mutual fund's policy with respect to redemption
fees are specified in the prospectus for the individual mutual fund and
referenced in the Retirement Investment Guide.
(f) Payment Procedures. All payments to ICMA-RC pursuant to this Section
6 shall be made from Plan assets held by VantageTrust or received from
third party mutual funds or their service providers in connection with Plan
assets invested in such third party mutual funds, to the extent not paid by
the Employer. The amount of Plan assets held through VantageTrust shall
be adjusted by VantageTrust as required to reflect any such payments as
are made from Plan assets invested in VantageTrust. In the event that the
Employer agrees to pay amounts owed pursuant to this Section 6 directly,
any amounts unpaid and outstanding after 30 days of invoice to the
Employer shall be withdrawn from Plan assets held by VantageTrust.
The compensation and payment set forth in this Section 6 are contingent upon the
Employer's use of ICMA-RC's EZLink system for contribution processing and
submitting contribution funds by ACH or wire transfer on a consistent basis over the
term of this Agreement.
The compensation and payment in this Section 6 will take effect in the calendar
quarter following receipt of one fully executed copy of this Administrative
Services Agreement based upon the following schedule:
• Agreement received by February 20—Effective April
• Agreement received by May 20—Effective July
• Agreement received by August 20—Effective October
• Agreement received by November 20—Effective January
7. Contribution Remittance
Employer understands that amounts invested through VantageTrust are to be remitted
directly to VantageTrust in accordance with instructions provided to Employer by ICMA-
RC and are not to be remitted to ICMA-RC. In the event that any check or wire transfer is
incorrectly labeled or transferred to ICMA-RC, ICMA-RC may return it to Employer
with proper instructions.
8. Responsibility
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Plan number 106439
ICMA-RC shall not be responsible for any acts or omissions of any person with respect
to the Plan or its related trust, other than ICMA-RC, or its agents or affiliates, in
connection with the administration or operation of the Plan.
9. Term
This Agreement shall be in effect and commence on August 29, 2014 and extend through
August 29, 2017. This Agreement may be renewed for up to two additional one-year
periods by signed, written mutual agreement of the parties. The Employer understands
and agrees that, in the event the Employer terminates this Agreement (or replaces the VT
PLUS Fund as an investment option in its investment line-up), ICMA-RC retains full
discretion to release Plan assets invested in the VT PLUS Fund in an orderly manner over
a period of up to 12 months from the date ICMA-RC receives written notification from
the Employer that it has made a final and binding selection of a replacement for ICMA-
RC as administrator of the Plan (or a replacement investment option for the VT PLUS
Fund).
10. Amendments and Adjustments
(a) This Agreement may be amended by written instrument signed by the parties.
(b) ICMA-RC may modify this agreement by providing 60 days' advance written
notice to the Employer prior to the effective date of such proposed modification.
Such modification shall become effective unless, within the 60-day notice period,
the Employer notifies ICMA-RC in writing that it objects to such amendment.
Except for reductions in the Compensation and Payment to ICMA-RC, the two
immediately preceding sentences shall not apply to material terms of this
Agreement.
(c) The parties agree that enhancements may be made to administrative and
operations services under this Agreement. The Employer will be notified of
enhancements through the Employer Bulletin, quarterly statements, electronic
messages or special mailings. Likewise, if there are any reductions in fees,these
will be announced through the Employer Bulletin, quarterly statement, electronic
or special mailing.
11. Notices
All notices required to be delivered under this Agreement shall be in writing and shall be
delivered, mailed, or faxed to the location of the relevant party set forth below or to such
other address or to the attention of such other persons as such party may hereafter specify
by notice to the other party.
ICMA-RC: Legal Department, ICMA Retirement Corporation, 777
North Capitol Street, N.E., Suite 600, Washington, D.C., 20002-4240
Facsimile; (202) 962-4601
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Plan number 106439
Employer: at the office set forth in the first paragraph hereof, or to any
other address, facsimile number designated by the Employer to receive the
same by written notice similarly given.
Each such notice, request or other communication shall be effective: (i) if given by
facsimile, when transmitted to the applicable facsimile number and there is appropriate
confirmation of receipt; (ii) if given by mail, upon transmission to the designated address
with no indication that such address is invalid or incorrect; or (iii) if given by any other
means, when actually delivered at the aforesaid address.
Notwithstanding the foregoing, notices regarding the day-to-day operation of the Plan
may be provided by e-mail to an e-mail address provided in writing by facsimile, mail or
delivery, signed by an authorized member of the receiving party.
12. Complete Agreement
This Agreement shall constitute the complete and full understanding and sole agreement
between ICMA-RC and Employer relating to the services to be provided hereunder and
correctly sets forth the complete rights, duties and obligations of each party to the other
as of its date. This Agreement supersedes all written and oral agreements,
communications or negotiations among the parties relating to these same services;
provided, however,that the Governmental Money Purchase Plan &Trust Adoption
Agreement(Fort Worth City Secretary Contract 39382) executed and entered into by and
between the parties shall remain in full force and effect and, until amended, shall
continue to govern all matters addressed therein, including, but not limited to, the
contributions rates of Employer and participating employees. Except as otherwise noted
in the immediately preceding sentence, any prior agreements, promises, negotiations or
representations, verbal or otherwise, not expressly set forth in this Agreement are of no
force and effect.
13. Titles
The headings of Sections of this Agreement and the headings for each of the attached
schedules are for convenience only and do not define or limit the contents thereof.
14. Incorporation of Schedules
All Schedules (and any subsequent amendments thereto), attached hereto, and referenced
herein, are hereby incorporated within this Agreement as if set forth fully herein.
15. Governing Law
This Agreement shall be governed by and construed in accordance with the laws of the
State of Texas, applicable to contracts made in that jurisdiction without reference to its
conflicts of laws provisions.
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Plan number 106439
In Witness Whereof,the parties hereto certify that they have read and understand this
Agreement and all Schedules attached hereto and have caused this Agreement to be
executed by their duly authorized officers as of the Effective Date first above written.
CITY OF FORT WORTH
APPROVED AS TO
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ASS AN ITY ATTQRNEY ysa� Mani 555 1.��( a 5Q',
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RNATIONAL CITY MANAGEMENT ASSOCIATION
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Please return fully executed contract to: New Business Services
ICMA-RC
777 North Capitol Street NE
Suite 600
Washington DC 20002-4240
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OFFICIAL RECORD
10 CITY SECRETARY
FT.WORTH,TX
Plan number 106439
Exhibit A
Administrative Services
The administrative services to be performed by ICMA-RC under this Agreement shall be
as follows:
(a) Participant enrollment services, including providing a welcome package and
enrollment kit containing instructions and notices necessary to implement
the Plan's administration. Employees will enroll online or through a paper
form. Employer can also enroll employees through EZLink.
(b) Establishment of participant accounts for each employee participating in
the Plan for whom ICMA-RC receives appropriate enrollment
instructions. ICMA-RC is not responsible for determining if such Plan
participants are eligible under the terms of the Plan.
(c) Allocation in accordance with participant directions received in good
order of individual participant accounts to investment funds offered under
the Plan.
(d) Maintenance of individual accounts for participants reflecting amounts
deferred, income, gain or loss credited, and amounts distributed as
benefits.
(e) Maintenance of records for all participants for whom participant accounts
have been established. These files shall include enrollment instructions
(provided to ICMA-RC through Account Access,EZLink or form),
beneficiary designation instructions and all other and documents concerning
each participant's account.Provision of periodic reports to the Employer
through EZLink Participants will have access to account information
through Investor Services, Voice Response System, Account Access and
through quarterly statements that can be delivered electronically through
Account Access or by postal service.
(17 Communication to participants of information regarding their rights and
elections under the Plan.
(g) Making available Investor Services Representatives through a toll-free
telephone number from 8:30 a.m. to 9:00 p.m. Eastern Time, Monday
through Friday(excluding holidays and days on which the securities
markets or ICMA-RC are closed for business (including emergency
closings), to assist participants.
(h) Distribution of benefits as agent for the Employer in accordance with
terms of the Plan. Participants who have separated from service can
request distributions through Account Access or via form.
(i) Upon approval by the Employer that a domestic relations order is an
acceptable qualified domestic relations order under the terms of the Plan,
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Plan number 106439
ICMA-RC will establish a separate account record for the alternate payee
and provide for the investment and distribution of assets held there under.
(j) Loans may be made available on the terms specified in the Loan Guidelines,
if loans are adopted by the Employer. Participants can request loans through
Investor Services or Account Access.
(k) Guided Pathways—Participant Advice and Guidance may be made
available through a third party vendor on the terms specified on ICMA-
RC's website.
(1) ICMA-RC will determine appropriate delivery method (electronic and/or
print) for plan sponsor/participant communications and education based on
a number of factors (audience, effectiveness, etc.).
12
City of Fort Worth, Texas
Mayor and Council Communication
COUNCIL ACTION: Approved on 9/9/2014
DATE: Tuesday, September 09,2014 REFERENCE NO.: **C-26946
LOG NAME: 14ICMA—RC2014
SUBJECT:
Authorize Execution of an Agreement with International City Management Association Retirement
Corporation in the Annual Amount Not to Exceed$36,000.00 Per Year to Provide Administrative Services for
the City's FICA Alternative Plan (ALL COUNCIL DISTRICTS)
RECOMMENDATION:
It is recommended that the City Council authorize the City Manager to execute an Agreement with
International City Management Association Retirement Corporation with an annual account maintenance
cost of$25.00 per participant and a total annual amount not to exceed$36,000.00 per year, to administer the
City's FICA Alternative Plan.
DISCUSSION:
In December 2001, (M&C C-18904)the City Council authorized the City of Fort Worth(City)to establish a
FICA Alternative Retirement Plan for the City's part—time, seasonal and temporary employees. Under this
plan,instead of the participating employees and the City both making 6.25 percent contributions to Social
Security, plan participants contribute 7.5 percent of their salary to the plan. Implementation of the FICA
Alternative Plan saved the City$600,000.00 in the first plan year.
In July 2007,the City Council authorized execution of an Agreement with International City Management
Association Retirement Corporation (ICMA—RC)to administer the City's FICA Alternative Retirement Plan.
Under that contract, each participant was charged an administration fee equal to 55 basis points multiplied by
the participant's account balance and the City paid a fee in the amount of$18.00 per year.
Under the proposed new Agreement,each participant will be charged a fee equal to 55 basis points multiplied
by the participant's account balance for general administration services and a fee of 15 basis points of the
account's average daily net Plan assets invested in certain mutual funds that invest substantial assets in an -
unaffiliated third—party mutual fund. The City's annual per—participant account maintenance fee under the
new Agreement will be$25.00 per person. This is a three year Administrative Agreement with two, one—year
options. The three year Agreement amount will not exceed the amount of$108,000.00. These rates ar
consistent with the current market.
The City of Fort Worth currently has 1,404 participants in the plan, of which 994 are currently employed as
part—time, seasonal or temporary employees. The total of all account balances as of July 28,2014 was
$2,535,000.00. However, during 2016, Staff will pursue a reduction in inactive accounts consistent with
federal regulations in order to eliminate unnecessary administrative fees.
Staff solicited three quotes for these services and ICMA—RC per participant fee remains the more
competitive rate for this service.
M/WBE Office—A waiver of the goal for MBE/SBE subcontracting requirements was requested by the
Department and approved by the M/WBE Office, in accordance with the BDE Ordinance,because the
purchase of goods or services from source(s) where subcontracting or supplier opportunities are negligible.
FISCAL INFORMATION:
The Financial Management Services Director certifies that upon approval of the above recommendation and
the adoption of the Fiscal Year 2014-2015 budget by the City Council, funds will be available in the Fiscal
Year 2015 Operating Budgets, as appropriated, of the General Fund.
FUND CENTERS:
TO Fund/Account/Centers FROM Fund/Account/Centers
GG01 539120 0143000 $36.000.00
CERTIFICATIONS:
Submitted for City Manager's Office by_ Susan Alanis (8180)
Originating Department Head: Brian Dickerson (7783)
Additional Information Contact: Margaret Wise (8058)
ATTACHMENTS
1. FICA Waiver.pdf
2. Fund Verification.docx