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Council approves $550,000 transfer to establish Section 115 OPEB trust administered by Shuster Advisory Group
Summary
Gardena council adopted Resolution 6717 to establish a Section 115 OPEB trust administered by Shuster Advisory Group LLC and to transfer the city's current CalPERS-held retiree benefit reserves and a $550,000 budgeted contribution; the motion passed with four yays and one abstention.
The Gardena City Council voted March 10 to establish a Section 115 trust to manage other post-employment benefits and to authorize a $550,000 transfer into the new account.
City Manager presented staff's evaluation, saying the proposed trust administered by Shuster Advisory Group LLC offered lower administrative fees and higher historical returns compared with the city's existing program. "Shuster Advisory Group LLC had the lowest administrative fees, the highest return, and is an actively managed investment portfolio program," the city manager said during the meeting.
The council was told staff compared the city's current CalPERS-served strategy and two other programs and found Shuster's 5-year actual return of 8.35% exceeded the city's current strategy performance of about 6.04% on a 70/30 allocation. Staff recommended authorizing the city manager to execute all documents and to transfer the existing balance in the city's California Employers Retiree Benefit Trust and the budgeted $550,000 contribution for fiscal year 2025'26 to the new trust.
Council members asked procedural and conflict-of-interest questions during discussion; the motion to adopt Resolution 6717 was approved with four yes votes and one abstention (Council Member Love). The resolution authorizes the city manager to complete the transfers and to execute required documents.
What's next: staff will work with Shuster Advisory Group to finalize account setup and report back to council on the timing and confirmation of transferred assets and any changes to reporting or investment policy.
