The City of Vallejo Deferred Compensation Committee met in the council chambers and unanimously approved several administrative and investment actions, including continuing watch status for existing funds, adding the MissionSquare Plus Fund to watch, approving travel for the National Association of Government Defined Contribution Administrators conference and adding Vanguard’s 2070 target-date fund to the plan lineup.

The committee’s action came after presentations from Luther Hermano of MissionSquare, who reviewed participant engagement, security and outreach initiatives, and Vincent Galindo of Highest Group, the committee’s fiduciary consultant, who reviewed plan performance, fees and the rationale for watch-list decisions.

The committee approved multiple motions by roll call. Committee Chair Brown, Vice Chair Olsen, Committee Member Derek Crutchfield, Committee Member Garcia and Committee Member Peterson voted “yes” on each action taken during the meeting.

MissionSquare presentation: participant services, security and plan metrics

Luther Hermano, relationship manager for MissionSquare Retirement, told the committee the firm is revamping its website and call-center security and expanding participant-facing services including no-cost comprehensive financial planning. He said MissionSquare is rolling out layered voice-security measures and biometric tools to help detect fraudulent callers: “When participants call in ... it’s gonna tell whether or not there’s a bad actor trying to access a participant’s account.”

Hermano reported plan-level metrics for the second quarter: total plan assets totaled about $65,700,000 (a 15.3% year-over-year increase), plan contributions were about $928,000 for the quarter, and net positive cash flow was $432,000. He said there were 42 retirement-plan specialist consultations and five certified financial planner consultations in Q2, a decline from the prior-year period explained in part by a change in how MissionSquare counts a “consultation.” Hermano also described a newly added retention/outreach specialist to help separated employees understand their post-separation distribution and consolidation options.

Highest Group review: markets, watch-list rationale and fees

Vincent Galindo, the committee’s fiduciary consultant (representing Highest Group / Fiduciary Consulting Group), summarized recent market performance and explained why several funds remain or were placed on watch. He said international and U.S. equity markets produced strong returns year-to-date, and fixed income returns were also positive.

Galindo detailed the committee’s watch decisions and the reason for adding the MissionSquare Plus Fund to watch: MissionSquare’s longtime manager, Karen Chung-Wolf, moved away from portfolio management and is no longer with the firm, creating management disruption. Galindo said the firm’s lieutenant is now managing the fund but that the committee’s fiduciary consultant placed the fund on watch to monitor stability.

He also recommended retaining watch status for Vanguard US Growth and Vanguard International Value and said the consultant expects to present replacement candidates for those slots at a future meeting.

Administrative account and fees: discussion of use and fairness

The committee reviewed the plan’s administrative/fee revenue account, funded by an administrative fee (disclosed as a plan-level 10 basis points). Galindo and Luther described the account as a growing holding that is invested in a stable-value vehicle and is available to reimburse plan-related expenses on the committee’s directions. MissionSquare said the account had an ending balance of about $86,789 at the end of the quarter.

Committee members raised fairness and outreach concerns: long-tenured participants pay more in asset-based fees than newer, lower-balance participants yet may not use educational events such as lunch-and-learn seminars. Galindo outlined alternative fee models other public plans use—per-participant fees, tiered approaches and caps—emphasizing that the committee must balance reasonableness with incentives to keep participants in the plan. Members asked staff to return with a future agenda item summarizing the existing fee policy, a ledger of recent expense-account transactions and options for communications and fiduciary training.

Votes at a glance

- Motion: Move Action Calendar (Item 8) ahead of Presentations (Item 7). Outcome: Approved (unanimous).
- Motion: Approve additions to committee membership (swear in Derek Crutchfield; add Jeremy Callanan as main and Daniel Kellison as alternate for BPOA; add Alan French as alternate for finance). Outcome: Approved (unanimous).
- Motion: Continue watch status for the following funds: Vanguard International Value Fund; MFS Value Fund; MFS Mid Cap Growth Fund; Vanguard US Growth Fund. Outcome: Approved (unanimous).
- Motion: Add MissionSquare Plus Fund to watch status. Outcome: Approved (unanimous).
- Motion: Approve attendance at the NAGDCA conference (Sept. 28–Oct. 1, San Diego); committee designated Derek Crutchfield as primary delegate with Chair Brown as alternate pending availability. Outcome: Approved (unanimous).
- Motion: Add Vanguard Target Date 2070 vintage to the target-date series. Outcome: Approved (unanimous).

Why it matters

The committee sets investment lineups and oversees administration of deferred compensation plans for Vallejo employees. Watch-list actions and any eventual fund replacements affect participant investment choices and fees. The administrative account and how the committee spends accumulated fee revenue determine what participant-facing education and services the plan can fund without drawing on municipal general funds.

What’s next

The committee asked staff to return with (1) a concise report on the administrative/fee-account transaction history and budget, (2) a review of the fee-policy options and (3) a proposed communication and fiduciary-training plan for employees and committee members. The committee’s next regular meeting is scheduled for Oct. 27; members expect a post-conference update after NAGDCA.