Deferred comp advisory committee reviews quarterly plan; places Vanguard international value fund on watch

The San Joaquin County Deferred Compensation Advisory Committee reviewed fourth-quarter 2024 plan results and market conditions at its Feb. 27 meeting, then voted 5-0 to place the Vanguard International Value Fund on watch and later approved minutes from the Oct. 24, 2024 quarterly meeting.

Nationwide presented fourth-quarter plan data including total 457 plan participants, cash flows, loan activity and online engagement. The carrier reported 7,428 participants in the 457 plan, and said plan contributions for the quarter totaled roughly $7.3 million while rollovers out totaled more than $6.5 million. Required minimum distributions (RMDs) in the quarter were about $2.2 million, Nationwide said. The 401(a) plan held about $32 million with 45 participants and an average account balance reported at $222,000.

Nationwide also described participant usage patterns: 12 participants had self-directed brokerage accounts (Schwab) with a higher-than-average balance, 368 active loans were on file with an average loan balance of about $9,300, and online engagement metrics showed 64 percent of participants have online accounts and 77 percent of distributions were processed online. Beneficiary information was on file for about 90 percent of accounts and Nationwide had email addresses for 91 percent of participants.

HIAS Group consultant Vincent Galindo delivered a market review and fund-by-fund analysis. Galindo flagged two funds for watch placement and recommended retaining watch status on one other underperformer. After discussion, the committee moved and seconded a motion to place Vanguard International Value Fund on watch because of underperformance and a heavier cash allocation; the committee approved that motion 5-0.

Committee discussion also covered the target-date lineup and fees. Highest Group noted target-date glide-path differences among providers and compared expense levels: incumbent T. Rowe Price vintages have higher average equity exposures in some vintages and higher weighted fees (around 42 basis points) versus passively managed Vanguard vintages (about 8 basis points). After discussion, the committee did not move to replace T. Rowe Price and expressed no immediate change to the incumbent provider.

On administrative items, the committee approved the minutes from the Oct. 24, 2024 quarterly meeting by voice vote (motion carried; recorded as approved). Committee members briefly discussed education and outreach, including a Nationwide webinar series and the NAGDA conference in San Diego (Sept. 28–Oct. 1). Committee members raised auto-enrollment for bargaining negotiations as an item to pursue with labor groups to boost participation.

Votes at a glance: - Place Vanguard International Value Fund on watch (motion): approved 5-0; mover/second not specified; reason: underperformance and heavy cash allocation per consultant report. - Approve minutes from Oct. 24, 2024 (motion): approved by voice vote; recorded as carried.

The committee asked staff to follow up on watch procedures, confirm any required vendor paperwork, and circulate materials and webinar dates to committee members.