Vallejo Deferred Compensation Committee approves fund swaps, minor policy updates and engagement incentive

The Vallejo Deferred Compensation Committee voted to replace two underperforming investment options, remove a previously monitored fund from watch status and to establish a $250 quarterly engagement incentive funded from administrative fees.

In a sequence of roll‑call votes during the meeting, the committee approved removing the plus fund from watch status, replacing the Vanguard US Growth fund with Fidelity Blue Chip Growth K, and replacing the MFS Value fund with Putnam Large Cap Value R6. The committee also approved minor, administrative updates to the statement of investment policies and guidelines and authorized a $250 quarterly incentive program to encourage participant engagement and beneficiary updates, with staff and vendor Mission Square asked to return with implementation details.

“Given the succession plan is in place, our comfort is high with Oliver and his remaining team,” Vincent said while recommending removal of the plus fund from watch status, referring to a prior manager transition. The committee moved the fund off watch status by motion and approved the change on a roll‑call vote. Vincent had earlier presented the committee with performance and peer‑ranking data that underpinned the fund‑replacement recommendations.

Mission Square’s Luther reviewed plan health and engagement metrics earlier in the meeting and highlighted two regulatory provisions that may affect plan administration in 2026: a “super catch‑up” that allows participants age 60–63 to make an additional $11,250 catch‑up contribution and a separate Roth catch‑up rule that applies to plans where the employer pays into social security. Luther said plan sponsors may temporarily opt out of the super‑catch‑up if payroll systems cannot track the provision.

Votes at a glance

- Remove plus fund from watch status — motion carried (approved). - Replace Vanguard US Growth with Fidelity Blue Chip Growth K — motion carried (approved). - Replace MFS Value with Putnam Large Cap Value R6 — motion carried (approved). - Approve updates to the statement of investment policies and guidelines — motion carried (approved). - Establish $250 quarterly engagement incentive (funded from administrative fees) — motion carried by majority; staff and vendor to return with program details.

Committee members asked Mission Square to provide the analytics and communications support needed to run the incentive program and to help with implementation logistics because the city’s benefits staffing is currently limited. Members emphasized that the incentive should target active employees and help increase beneficiary designations and webinar participation. The committee agreed to finalize the program design at a future meeting and to begin the program in 2026 once logistics are settled.

The committee added the quarterly incentive program and the annual investment policy statement review to future agendas and adjourned after completing the action calendar.