COUNTY OF SAN MATEO

Inter-Departmental Correspondence

Human Resources Department

DATE:

June 8, 2009

BOARD MEETING DATE:

June 23, 2009

SPECIAL NOTICE/HEARING:

None

VOTE REQUIRED:

Majority

TO:

Honorable Board of Supervisors

FROM:

Donna Vaillancourt, Human Resources Director
Peter Bassett, Benefits Manager

SUBJECT:

Extension of Agreements with Hartford and Nationwide

RECOMMENDATION:

Approve a resolution:

1) Authorizing the Human Resources Director, upon approval by County Counsel, to execute amendments extending the current agreements with Hartford and Nationwide on a month-to-month basis for a period not to exceed December 31, 2009.

2) Authorizing the Human Resources Director or the Director's designee to execute contract amendments which modify the County's maximum fiscal obligation by no more than $25,000 (in aggregate), and/or modify the contract term and/or services so long as the modified term or services is/are within the current or revised fiscal provisions.

VISION ALIGNMENT:

Commitment: Responsive, effective and collaborative government

Goals 20: Government decisions are based on careful consideration of future impact rather than temporary relief or immediate gain

Extending the existing agreements with Hartford and Nationwide will allow the County to complete a Request for Proposal (RFP) process to ensure the County is receiving the best plan benefits currently available in the marketplace.

Performance Measure(s):

Measure

2008 Actual

2009 Projected

Deferred compensation plan participants*

4,078*

4,078*

Number of employees actively contributing

707 (Nationwide)

1,859 (Hartford)

700 (Nationwide)

1,800 (Hartford)

Average annual contribution per actively contributing employee

$6,720 (Nationwide)

$7,113 (Hartford)

$6,000 (Nationwide)

$7,000 (Hartford)

*Includes active employees and retirees

BACKGROUND:

The County offers a Deferred Compensation Plan to all benefit-eligible employees, governed by Section 457 of the Internal Revenue Code. The plan allows employees to make pre-tax contributions into a tax-deferred investment account with either Nationwide Retirement Solutions or The Hartford to save money for retirement. The County’s current agreements with Hartford and Nationwide expire on June 30, 2009.

DISCUSSION:

In November 2008, the County initiated a formal RFP process for its deferred compensation plan administrator. The County’s Deferred Compensation Committee reviewed proposals from several deferred compensation providers.

Due to recent market decline and economic uncertainty, the Committee decided to hold off on bringing a preliminary recommendation to the Board of Supervisors. Extending the current agreements with Hartford and Nationwide will enable the Committee to conduct additional due diligence on its recommendation to the Board to ensure that it is in the best interests of employees and the County.

County Counsel has reviewed and approved the Resolution as to legal form.

FISCAL IMPACT:

There is no net County cost associated with this contract extension.