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Council OKs consolidation of retirement recordkeepers; staff says fees will fall
Summary
The council approved consolidation of the city's multiple 457/401-type retirement recordkeepers to a single vendor (Empower) after an RFP and fiduciary review, with staff estimating a significant reduction in participant administrative fees and an expected 2–4 month transition.
The Port Hueneme City Council on Jan. 20 approved staff's recommendation to consolidate multiple retirement plan recordkeepers into a single vendor, following an RFP that selected Empower as the records keeper and a fiduciary services arrangement.
Staff explained the city had four different recordkeepers for various accounts and that consolidating into a single provider would create economy of scale and reduce administrative fees charged to participants. A fiduciary adviser handled the RFP process and negotiations; staff reported aggregate participant fees previously totaled about $86,000 per year and anticipated they would be reduced substantially under the new arrangement.
Council members asked whether performance reviews had been done, whether a blackout or lockout period would limit participant fund movements during transfer, and what communications retirees and employees would receive. Staff and the fiduciary adviser said performance had been considered, that a short freeze could occur for some account types (perhaps about one pay period) but participants would still receive communications and correspondence during transition, and that the city would run an outreach campaign to inform employees and retirees.
Council voted unanimously to adopt the resolution authorizing the transition and related steps; staff said the transition could take two to four months once the resolution was approved.
