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HomeMy WebLinkAboutCAG2019-397 - Original - ICMA Retirement Corporation - Deferred Compensation Third Party Administrator Services - 05/23/2019 REQUEST FOR MAYOR'S SIGNATURE KENT Print on Cherry-Colored Paper Routing Information: (ALL REQUESTS MUST FIRST BE ROUTED THROUGH THE LAW DEPARTMENT) Approved by Director Originator: Laura Horea Phone (Originator): 253,856.5290 Date Sent: 8/22/19 Date Required: 8/27/19 Return Signed Document to: Laura Horea Contract TS Y 0LCt te:jj�afters VENDOR NAME: Date Finance No lfied: ICMA-RC (Only required on contracts May 2019 20 000 and over or on any Grant DATE OF COUNCIL APPROVAL: 6/18/19 Date Risk Manager Notified:May 2019 (Required on Non-City Standard Contracts/Agreements Has this Document been Specificall Account Number: 130800 (?) Authorized in the Budget? • YES NO Brief Explanation of Document: Deferred Compensation Third Party Administrator Services aol9- 3ci-7 All Contracts Must Be Routed Through The Law Department (Thi ea to comple ed y the Law Department) Received: Approval of Law Dept.: Law Dept. Comments: Date Forwarded to mayor: Shaded Areas To Be Completed By Administration Staff Received: AUG 2 7 2019 City of Kent Recommendations and Comments: VE71)� Office of the Mayor Disposition: AUK 26 2019 k�AlDate Returned: ! VV \ rvil\orrns\ ocument rocessing\Request for Mayor's Signature docx V(/ 1 ADMINISTRATIVE SERVICES AGREEMENT Between IC\TA Retirement Corporation and City of Kent Plan niunber 301655 ADMINISTRATIVE SERVICES AGREEMENT Oh This Administrative Services Agreement("Agreement"),made as of the2-5 day of Mood' . 201�(herein referred to as the"Inception 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 Kent("Employer"), an entity organized and existing tinder the laws of the State of Washington with an office at 220 4t'Avenue South Kent Washington,98032. 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 fiends; 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 fiords (the "Fronds")for the investment of plan assets as referenced in VantageTrust's principal disclosure documents, the VantageTrust Disclosure Memorandum and the Funds' Fact Sheets(together,"VT Disclosures"); and In addition to serving as investment adviser to VantageTrust Company LLC, ICMA-RC provides a range of services to public employers for the operation of employee retirement plans including,but not limited to, conummications concerning investment alternatives, accouunt maintenance, account recordkeeping, investment and tax reporting,transaction processing, and benefit disbursement. 2of13 Plan munber 301655 AGREEMENTS 1. Appointment of ICMA-RC Employer hereby appoints ICMA-RC as Administrator of the Plan to perform all nondiscretionary finnctions necessary for the administration of the Plan. The fimctions 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 VT Disclosures or Employer Bulletins) as those terms and conditions may be adjusted from time to time. 3. Exclusivity Agreement Employer agrees that for the initial or succeeding term of this Agreement specified in Section 11, so long as ICMA-RC continues to perform in all material respects the services to be performed by it under this Agreement, Employer shall not obtain plan administration from anyone other than ICMA-RC. Employer acknowledges that ICMA- RC has agreed to the compensation to be paid to ICMA-RC under this Agreement in the expectation that ICMA-RC will be able to offset costs allocable to performing this Agreement with revenues arising from Employer's exclusive use of ICMA-RC at the rates provided herein throughout the initial or succeeding term. 4. Employer Duty to Fu1711'sh Information Employer agrees to fiunish 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 accotunts to Fluids 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 mamier regarding changes in staff as it relates to various roles. Such notification 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 IC1ti1A- 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. 3of13 Plan number 30165.5 Employer is required to send in contribution information 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 fiends that do not have fiend 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 fiord 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. 5. ICMA-RC 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,or its wholly owned subsidiary,to serve as investment adviser to VantageTnust Company is dependent upon the continued willingness of VantageTnust Company for ICMA-RC, or its wholly owned subsidiary,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)(i) ICMA-RC shall maintain and administer the 457(b)Plan in accordance with the requirements for eligible deferred compensation plans under Section 457 of the Internal Revenue Code and other applicable federal law, provided,however, that ICMA-RC shall not be responsible for the eligible status of the 457(b) Plan in the event that the Employer directs ICMA-RC to administer the 457(b)Plan or disburse assets in a manner inconsistent with the requirements of Section 457 or otherwise causes the 457(b)Plan not to be carried out in accordance with its terms. Further, in the event that the Employer uses its own customized plan document, ICMA-RC shall not be responsible for the eligible status of the 457(b) Plan to the extent affected by terms in the Employer's plan document that differ from those in ICMA-RC's model plan document. ICMA-RC shall not be responsible for monitoring state or local law applicable to retirement plans or for administering the 457(b)Plan in compliance with local or state requirements regarding plan administration unless Employer notifies ICMA-RC of any such local or state requirements. 6. Employerpresentations and Warranties Employer represents and warrants to ICMA-RC that: 4of13 Plan number 301655 (a) Employer is organized in the form and manner recited in the opening paragraph of this Agreement with fiill 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. (b) Employer understands and agrees that ICMA-RC's sole finction 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 neither the "Plan Administrator"nor"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 bust. ICMA-RC does not perform any service under this Agreement that aught cauuse ICMA-RC to be treated as a "fiduciary"of the Plan under applicable law, except, and only, to the extent that ICMA-RC provides investment advisory services to individual participants enrolled in Guided Pathways Advisory Services. (c) 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 find share class. Where applicable, Employer understands that the VT Retirement IncomeAdvantage Fund is an investment option for the Plan and that the find 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 VT Disclosures and that it has read the information therein concerning the VT Retirement IncomeAdvantage Fund. (d) 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. (e) 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. 5of13 Plan ntunber 301655 (f) 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. 7. Participation in Certain Proceedings 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, cturent spouse, or child pursuant to a domestic relations order or child support order. 8. Compensation and Payment (a) Participant Fees.Plan participant accounts shall be assessed an asset-based fee to cover the costs of record-keeping and other services provided by ICMA-RC, and other costs associated with the Plans as directed by the Employer.The Employer shall work with ICMA-RC to determine the appropriate amount of the gross asset-based fee to be charged to participant accounts,which may be increased or decreased fiom time to time at the direction of the Employer. At the inception of this contract the participant fee shall be 0.105%. (b) Revenue Requirement.ICMA-RC shall receive total annual aggregate revenue of 0.0350,0 of Plan assets under ICMA-RC's administration for providing recordkeeping and other services to the Plans. Such revenue shall be deducted by ICMA-RC from amounts collected through the application of the asset-based fee described in section 8(a)prior to allocation of any participant level asset-based fees to the Administrative Allowance Account described is section 8(c)below. (c) Administrative Allowance Account.Amounts collected through the application of the asset-based fee described in section 8(a) above in excess of the Revenue Requirement specified in subsection 8(b)above, if any, shall be held in an Administrative Allowance Account(that is maintained as a Plan asset by ICMA-RC). Employer understands that the Plan administrative allowance is to be used only to pay for reasonable plan administrative expenses of the Plan or allocated to Plan participants at the instruction of the Employer. (d) Revenue Received From Investment Options.Neither ICMA-RC nor the Employer shall receive recordkeeping revenue directly from investment options made available under the Plan. ICMA-RC shall be compensated from fees collected from participant accounts through the application of the asset- 6 of 13 • Plan nuruber 301655 based fee described in section 8(a)above.In the event that any Plan investment options do generate revenue from plan investments,ICMA-RC shall,as directed by the Employer, credit any and all revenue back to those participant accounts invested in the option in question. (e) Compensation for Management Services to VantageTrust, Compensation for Advisory and other Services to the VT III 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 VantageTnist for investment advisory services and plan and participant services furnished to VantageTrust. Employer fiu-ther acknowledges that ICMA-RC, including certain of its wholly owned subsidiaries, receives compensation for advisory and other services ftimished to the VT III 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 find not affiliated with ICMA-RC, ICMA-RC or its wholly owned subsidiary receives payments from the third-party mutual fimd 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 fimd. These fees are described in the VT Disclosures and ICMA-RC's fee disclosure statement. In addition, to the extent that third party mutual finds are included in the investment line-up for the Plan,ICMA-RC receives administrative fees from its third party mutual fund settlement and clearing agent for providing administrative and other services based on assets invested in third party mutual finds; such administrative fees come from payments made by third party mutual finds to the settlement and clearing agent. (f) Redemption Fees. Redemption fees imposed by outside mutual finds in which Plan assets are invested are collected and paid to the mutual fimd by ICMA-RC. ICMA-RC remits 100010 of redemption fees back to the specific mutual fund to which redemption fees apply. These redemption fees and the individual mutual fimd's policy with respect to redemption fees are specified in the prospectus for the individual mutual find and referenced in the VT Disclosures. (g) Phis Fund Share Class. ICMA-RC shall provide the R-12 share class version of the Plus Fiuud as the stable value investment option in the City of Kent 457 Plan. (h) Fees for Investment Advice. ICMA-RC shall waive the standard fee of$20 for participant utilization of the on-line investment advice tool. (i) Financial Planning Break-Points. The amount of participant assets required for a participant to receive a written financial plan once annually from ICMA- RC at no cost shall be as follows: 7of13 Plan number 301655 a. For a fitll financial plan: $100,000 in combined ICMA-RC assets,to include Plan assets,IRAs and spousal assets held with ICMA-RC. b. For a goal-speck financial plan: $50,000 in combined ICMA-RC assets, to include Plan assets, IRAs and spousal assets held with ICMA-RC (j} Payment Procedures. All payments to ICMA-RC pursuant to this Section 8 shall be made from Plan assets held by VantageTrust or received from third-party mutual fimds or their service providers in connection with Plan assets invested in such third-party mutual fiords, to the extent not paid by the Employer. The amount of Plan assets administered by ICMA-RC shall be adjusted as required to reflect any such payments as are made from the Plan. In the event that the Employer agrees to pay amounts owed pursuant to this Section 8 directly, any amounts unpaid and outstanding after 30 days of invoice to the Employer shall be withdrawn from Plan assets. The compensation and payment set forth in this Section 8 are contingent upon the Employer's use of ICMA-RC's EZLink system for contribution processing and submitting contribution fiords by ACH or wire transfer on a consistent basis over the term of this Agreement. The compensation and payment set forth in this Section 8 is also contingent upon the Vantagepoint PLUS Fund as the sole stable value fund. The compensation and payment in this Section 8 will take effect July 1, 2019 or the month following receipt at a Delivery Address (defined below the signature line)if receipt is after July 1, 2019, of one fiilly executed copy of this Administrative Services Agreement. Employer fin-ther acknowledges and agrees that compensation and payment under this Agreement shall be subject to re-negotiation in the event that the Employer(a) chooses to implement additional mutual fiends that neither(i)trade via NSCC nor(ii) meet ICMA-RC's daily trading operational guidelines or(b)chooses to implement investment options that are not mutual fiends. 8. 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. 9. Indemnification ICMA-RC shall not be responsible for any acts or omissions of any person with respect to the Plan or its related Lust, other than ICMA-RC in connection with the administration or operation of the Plan. To the extent allowed by law,Employer shall indemnify ICMA- 8of13 Plan munber 301655 RC against, and hold ICMA-RC harmless from, any and all loss, damage,penalty, liability, cost, and expense, including without limitation,reasonable attorney's fees, that may be incurred by, imposed upon,or asserted against ICMA-RC by reason of any claim, regulatory proceeding, or litigation arising from any act done or omitted to be done by any individual or person with respect to the Plan or its related trust, excepting only any and all loss, damage,penalty, liability, cost or expense resulting from ICMA-RC's negligence, bad faith, or willful misconduct. 10. Tenn This Agreement shall be in effect and continence on the date all parties have signed and executed this Agreement ("Inception Date"). The term of this Agreement will continence on the Inception Date and extend five(5)years from that date. The Employer understands and agrees that, in the event the Employer terminates this Agreement (or replaces the Vantagepoint PLUS Fund of VantageTrust as an investment option in its investment line- up), ICMA-RC retains full discretion to release Plan assets invested in the Vantagepoint PLUS Fund in an orderly manner over a period of up to 12 months fi-om the date ICMA- RC receives written notification from the Employer that it is initiating withdrawal of all or part of the Plans' assets from the VT Vantagepoint PLUS Find. 11. 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 modification. (c) The parties agree that enhancements may be made to administrative 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 messages or special mailing. 12. Notices All notices required to be delivered sunder this Agreement shall be in writing and shall be delivered, mailed, e-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., Saute 600, Washington, D.C._, 20002-4240 Facsimile; (202)962-4601 9of13 Plan number 301655 Employer: at the office set forth it the first paragraph hereof, or to any other address, facsimile number or e-mail address designated by the Employer to receive the same by written notice sinularly 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 or e-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. 13. Complete Agreement This Agreement shall constitute the complete and full understanding and sole agreement between ICMA-RC and Employer relating to the object of this Agreement 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. Any prior agreements,promises, negotiations or representations,verbal or otherwise,not expressly set forth in this Agreement are of no force and effect. 14. 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. 15. Incorporation of Exhibits All Exhibits (and any subsequent amendments thereto), attached hereto,and referenced herein, are hereby incorporated within this Agreement as if set forth fully herein. 16. Governuig Law This Agreement shall be governed by and constnied in accordance with the laws of the State of Washington,applicable to contracts made in that jurisdiction without reference to its conflicts of laws provisions. 10 of 13 Plan munber 301655 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 Inception Date first above written. CITY OF KENT By �. Signature/Date By XS Name and Title (Please Pant) INTERNATIONAL CITY MANAGEhIENT ASSOCIATION RETIREMENT CORPORATION ,7 By Erica Mcfarquhaf Assistant Secretary Please return an executed copy of the Agreement to a Delivery Address,either: (a)Electronically to PlanAdoptionServices aOicmarc_org,or (b)In paper farm to ICMA-RC ATTN:PLAN ADOPTION SERVICES 777 North Capitol Street NE Suite 600 Washington DC 20002-4240 11 of 13 Plan number 301655 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 instnictions 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 instnictions. 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 fiuids 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 or EZLunk),beneficiary designation instnictions and all other documents concerning each participant's account. (t) Provision of periodic reports to the Employer through EZLink. Participants will have access to account information through Investor Services,Voice Response System, Account Access, TextAccess and through quarterly statements that can be delivered electronically through Account Access or by postal service. (g) Communication to participants of information regarding their rights and elections under the Plan. (h) Making available Investor Services Representatives through a toll-fiee 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. (i) Making available access to ICMA-RC's web site, to allow participants to access certain account information and initiate certain plan transactions at any time. Account access is normally available 24 hours a day, seven days a week except during scheduled maintenance periods designed to ensure high- quality performance. The scheduled maintenance window is outlined at hgps://haiDerI.icmarc.or /logiu jsy (j) Maintaining the security and confidentiality of client information through a system of controls including but not limited to, as appropriate: restricting plan and participant information only to those who need it to provide services, software 12 of 13 Plan munber 301655 and hardware security, access controls, data back-up and storage procedures,non- disclosure agreements, sectnity incident response procedures, and audit reviews. (k) Making available access to ICMA-RC's plan sponsor EZLink web site to allow plan sponsors to access certain plan information and initiate plan transactions such as enrolluig participants and managing contributions at any time. EZLiuk is normally available 24 hours a day, seven days a week except dining scheduled maintenance periods designed to ensure high-quality performance. The scheduled maintenance window is outlined at https://harperl.icmarc orgAogin isp. (1) Distribution of benefits as agent for the Employer in accordance with terns of the Plan. Participants who have separated fiom service can request distributions through Account Access or via form. (m)Upon approval by the Employer that a domestic relations order is an acceptable qualified domestic relations order under the terns of the Plan,ICMA-RC will establish a separate account record for the alternate payee and provide for the investment and distribution of assets held thereunder. (n) 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 Account Access. If allowed by the City,loans will be available to both active and separated participants. (o) Guided Pathways Advisory Services—ICMA-RC's participant advice service, "Fund Advice", and asset allocation service, "Asset Class Guidance"may be made available through a third party vendor on the terns specified on ICMA- RC's website. If allowed by the City, the Guided Pathway Managed Account Service may be made available to separated/retired employees only. { (p) 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.). 13 of 13