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Palatka pension board orders RFQ for custodial services after complaints about Principal
Summary
After trustees and staff described slow responses and delayed retiree payments under Principal, the City of Palatka General Employees Retirement Plan board voted to issue a request for qualifications for a new custodian and tasked the consultant to collect responses and recommend finalists.
The City of Palatka General Employees Retirement Plan board voted to issue a request for qualifications for custodial services after trustees and staff described persistent service problems with the plan’s current custodian, Principal.
The board approved a motion to issue the RFQ and asked the investment consultant to send the RFQ to a shortlist of custodians that serve Florida municipal plans and to aggregate proposals for the board to review. The consultant said any change would be made so a new custodian would begin benefit payments on Jan. 1, 2027, if the board decides to switch.
Why it matters: Custodians hold plan assets, provide account statements and execute benefit payments; delays or service lapses can cause retiree hardship and complicate auditing and reporting. Trustees said retirees have called the plan office about slow payments and slow processing of forms, and staff reported overdue account statements from the custodian.
The consultant described the core problems raised by plan staff and the plan administrator: slow turnaround on statements and wiring instructions, customer-service delays and occasional delays in benefit payments that led to retiree calls to the plan office. “Their customer service is not great,” the consultant said, urging an RFQ to evaluate alternatives.
Board action and next steps: The motion to issue the RFQ passed. The consultant will distribute the questionnaire to custodians (examples named during the discussion included Salem Trust and Fifth Third Bank), collect responses, and return to the board with either a short list of finalists for in-person presentations or a staff recommendation. The consultant advised a multi-year fee guarantee from respondents; Principal is currently honoring the fee arrangement from Truist for one year.
The consultant also noted the broader market context: two custodians have recently left the Florida municipal market, prompting multiple clients to re-run searches. Staff and the consultant will be copied on RFQ correspondence and will bring recommendations to the next quarterly meeting.
