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Olivette City pension board agrees to recommend advisor's fee increase to city council
Summary
The board agreed to recommend that the city council consider the advisor's proposed multi‑year fee increase (from $36,000 to staged increases up to $42,000). Members debated flat versus asset‑based fees and possible counteroffers before approving a recommendation to council.
The Olivette City Pension Board voted to recommend to the city council a proposed increase to its investment advisor’s contract fee after a lengthy discussion about fee structure and potential alternatives.
The advisor asked the board to consider raising the annual flat fee from $36,000 to $38,000 next year and then progressively to $40,000 and $42,000 in subsequent years; the presenter characterized this as roughly $500 a quarter. Board members questioned whether a flat fee or a percentage (basis points) model is fair, particularly for a mature, potentially descending plan where total assets can decline.
Members recalled the plan’s procurement history and that the advisor’s fee had not been raised from the firm’s 2006 start until a change in 2021. Several board members suggested negotiating a counteroffer (examples discussed included locking fees to 2030 or staged smaller annual increases) or running an RFP; others noted that institutional competitors typically charge materially higher basis points.
After discussion, an unidentified board member moved to accept the advisor’s proposed fee schedule and forward the recommendation to the city council; another member seconded. The motion passed by voice vote with no opposition recorded in the transcript. The board emphasized that council approval is required before any contractual change takes effect.
Board members asked that staff prepare contract language and return with details if the council approves the recommendation. Several members also asked for continuing oversight because the fee schedule would be revisited if future conditions change.
The board concluded with a request for additional information on pension cash flow and the pension property tax for the next meeting; staff said any tax increase would require a vote of the electorate.
