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Good morning, welcome to the

January 14th

Special meeting of the

Defined Contributions Plan Committee meeting.

The meeting is now called to order.

Will the clerk please call the roll and establish a quorum?

Yes.

Please unmute your microphones.

Member Rugani.

Present.

Member Colville.

Here.

Member Kang.

Here.

Member Tunson.

Here.

Member Gardella.

Here.

Vice Chair Levison.

Here.

Chair Hoekstra.

Here.

Thank you.

We have a quorum.

And there appear to be no alternate members here.

Thank you.

I would like to remind the members of the public and chambers that if you would like to speak on an agenda item, please turn in a speaker slip when the item begins.

You will have two minutes to speak once you are called on.

After the first speaker, we will no longer accept speaker slips.

We will now proceed with today's agenda and the land acknowledgement.

Please rise.

Please rise, if you're able.

To the original people of this land, the Nisanan people, the southern Maidu, Valley and Plains, Miwok, Patuan Wintun peoples, and the people of the Wilton Rancheria, Sacramento's only federally recognized tribe.

May we acknowledge and honor the native people who came before us and still walk beside us today on these ancestral lands by choosing to gather together today in the active practice of acknowledgement and appreciation for Sacramento's indigenous peoples' history, contributions, and lives.

Thank you.

Now I'd like to lead us in the Pledge of Allegiance.

I pledge allegiance to the flag of the United States of America

and to the republic for which it stands,

one nation, under God, indivisible, with liberty and justice for all.

Okay, easy one today.

Discussion calendar, item number one, retirement plans,

investment consulting services request for proposals.

I think we should just have, if there's any discussion,

let's have a little bit of discussion and there's no one here to question or anything.

If you want to make a statement or anything like that, I think that's great.

And then we'll take a motion to vote and see which vendor you guys would like to choose.

How's that sound?

So does anybody have any comments?

First of all, I want to thank Samantha and all her team for all the extra work that this

meeting requires.

I want to thank all of you for the extra time to look and research this further.

It was a lot of information and I felt I needed a little additional time to make sure I made

a thorough responsible choice.

So from there, anybody else, please.

Yeah, I agree.

Thank you.

I appreciate giving us the extension of time.

Just gave me the ability to go back and reread the RFPs.

It was a lot of reading, a lot of new stuff for me.

So I felt a little bit more prepared.

It was just a little crammed, and I just wanted to do my due diligence.

So I appreciate the extension.

Your intention is to, after the comments, just to move on to a motion?

Unless someone doesn't want to, I think I'm ready to make a decision.

I think we all are.

I mean, unless you are not.

I mean, but that's okay.

Whatever you want to do.

Yeah, yeah.

Well, I do want to thank Samantha for finding and contracting with the highest group going back to 2017.

That was when the working group began meeting with Rosh to write the organizational documents that later city council approved that created the committee.

That was an incredibly wise decision to bring in an expert to work with the oversight committee at dozens of that already had experience with dozens of public agencies here and many in California.

and to guide us.

And then, of course, the advice they've given us

on our investment options

and how our record keepers should be paid

and provide services.

That early and very seemingly simple decision

ended up saving our participants

more than a million dollars every year.

And we couldn't do the work that we have been able to do

to support our participants

without the advice of an independent investment consultant.

It's been a little frustrating for me, though,

that sometimes our ability to have communications

with the investment consultant are not as open as I'd like to have.

John, I'd like to ask you if you called Rosh and said,

Hey, Rosh, I hear there's this new investment vehicle out there

called Collective Investment Trust.

I don't know anything about it.

Could you do a little research on that

and maybe bring back a one or two page

and five minute presentation to the committee

just to let us know about the idea?

If you were told, sure, I'll do that

and I'll submit it to Samantha

and you later found out that when it got to Shelly,

Shelly said, we're not prepared to have this discussion.

So no, it's not going on the committee agenda.

I don't know how you would feel about it,

but I can tell you how I felt about it,

and that's been disappointing.

Or if the work was done, it was on the agenda,

and then you were told, you know,

I'd like to call Roche and talk to him about it,

and you were told, no, you know,

the city signs the contract with HIAS.

The city is the contract gatekeeper.

All communications have to go through Samantha or Shelley.

You can't talk to him.

He can't talk to you.

You can't ask him to do something.

That's the message that's been given to me.

And I think this committee deserves the ability

to have a more complete relationship

with our investment consultant.

We're counting on them.

And we're not, you know,

if there's something that's being asked

that's extraordinarily time-consuming,

yeah, push back to the person who's asking.

And so that's, what Rosh put in his proposal was,

you know, we should do some things differently.

And I agree.

But my question is just like during an election campaign

when someone's running for reelection,

they say we ought to change things.

And you ask them, well, how come you didn't change

during your first term in office?

And that's, if we had Roche here today,

that's what I'd be asking them.

If you think it's important when the agenda

for this committee is being put together to have,

I think you referred to it as stakeholders,

then why haven't we done that?

Why, you know, why are we still fighting

out on the Thursday before the meeting what's on the agenda.

So it's been, I appreciate what he's saying and I'd like to continue using their services,

but our ability to have independent conversations with our investment consultant,

particularly given, yes, I understand the city signs the contract, but I can remember back

to the working group meeting where it dawned on everybody there as we were creating this committee

that we really needed the services of an investment consultant and everyone seemed to be in agreement

and i and i turned to laney who was in that meeting and i said so laney will the city be paying for

that and she said oh absolutely not the participants have to pay for it and i spent almost three years

trying to get a mechanism together so that we could pay for it.

The city was unwilling to put any money into it,

but now they're unwilling to let us,

who represent the participants who are paying for it,

they're unwilling to let us have more of a relationship

directly with the consultants.

So I'm happy to be supporting the highest group

under their new name, Fiduciary Consulting Group,

But I'm hoping that things are handled a little bit differently, and I don't know if that's going to be possible.

I'd like them, I don't, I said it at the last meeting, I don't know whether they're independent anymore, completely independent.

I think Rosh has been pulling his punches a few times.

And that conversation I had, maybe it was surprising to you when I said it, I put it in an email to Rosh back in March, so it shouldn't have been surprising to him.

It wasn't the first time he and I had had that conversation.

So that's what I have to say today.

We do incredibly good work.

I was disappointed that between Nationwide and Highest,

they couldn't get that award application for NAGDA together last year like we had talked about.

That wasn't so much that we could win the award.

It was so that we could step back and see how successful we've been from where we were in 2015

when we did an RFP and got rid of ICMARC and got nationwide in.

We've just done a decade of outstanding, outstanding work.

Our track record speaks for itself, and yet people continue to question,

why does this committee exist?

What kind of authority should you have?

Ryan's predecessor, our attorney here, almost three years ago said,

yes, Murray, you're right.

The bylaws do say that the committee has authority

to make the choices on the mutual funds

in your investment lineup.

And yet three years later,

our staff reports still say

the committee recommends a certain change.

Not that we're doing it, that we're, we don't have.

So I'd like to see the committee

have a more active role in setting the agenda,

long-term agenda, short-term agenda,

be able to talk about the things that we need to,

And if our consultant wants to take the lead as he's written in his, our current consultant has written in his proposal, I'd really like to have that happen.

I'd really like to have that happen.

And if others have differing opinions, I'd welcome that as well.

That's the end of my comments.

So, Brad, can I speak now?

Of course.

Murray and I have not always seen eye to eye, but I respect the passion he has of this job.

He really does.

He puts in a monumental time on this, and that's appreciated.

It really is.

And I can't speak to the relationship that this committee has with HR because I think it's blurry.

And I agree with you.

But HR is the provider for the city.

I know we're trying to more define the roles of this council and we have for a while.

And it needs to be done.

You're right.

I mean, we've submitted, my office has submitted language to HR on how we should change.

and it hasn't gotten nowhere.

It really hasn't.

I mean, and maybe Samantha can speak to that

because we worked with Jeff to try to change the language.

HR has been engaging with the unions

to attempt to change the structure of the committee

in order to be able to make things more efficient,

have these kinds of discussions.

Murray is aware of that because Murray receives those messages.

So I'm confused on some of the statements, Murray, because you are aware that we've been, I know that we have another meeting with the unions that need to happen, but we have to go through that process.

If you want to talk about that, all of those messages have been addressed to the unions.

None of them have been addressed to people who are on this committee.

Yes, and that was explained as well.

But I also want to remind everyone, the committee is here to select a vendor, and the makeup of the committee, how the responsibilities, all that is not on the agenda for today.

So my point being is the individuals who graded RFP proposals, you can see from the staff report there was a significant difference.

I do agree, and I was, you know, when this all began way back when,

when you guys brought on Hoss Group, that was a great idea.

It really was.

He's done a lot for this organization, done a lot for the shareholders,

a lot for the employees.

I didn't see anything in the other presentations that would make me want to change, per se.

so my recommendation or my is that we retain highest group or Morgan Stanley

for another five years and work on our relationships on this board I don't know

how much longer I'm going to be involved because I don't have the time or the

we're gonna get you we're gonna get you in this seat buddy you're not you

certainly not but I mean you guys should be proud I mean you really should be

proud of what you've accomplished here I mean this is a big plan with a lot of

of responsibilities and a lot of people's security involved in this.

And I have a big piece of this pile, so I'm interested because it's going to change my

lifestyle a little bit.

But I think we should retain them.

I can't speak to you making requests to Rosh and not getting through the gatekeeper.

I'm sorry about that.

I didn't know about that.

I think if this committee, I still believe it's an advisory committee.

and I think that's what the council is,

but I still think we have the ability to make change

and we have the ability to ask our advisor pertinent questions

that can help the people that we support.

And it goes beyond bookkeeping and performance analysis

and things like that.

There's a lot of things in this industry that I'm not aware of

because it's not the world I travel in on a daily basis,

and I thank you for bringing stuff to our attention.

But I think Rosh has proven that he's dedicated to this organization, and he's really done some good things.

So I think my vote is to retain him for another five years and see where we can go with that.

Thank you.

Go ahead, Ash.

Yeah, I'll jump in.

So I actually am new to the committee.

I don't quite know all the history.

I just want to speak specifically to the vendor proposals we received.

And in terms of any of the specific vendors who were offering something that was really different,

I did want to highlight I was really intrigued by Josh with Retirement Plan Advisors

and his approach that he took in Alameda County to adjust the glide path.

Having thought about that a little bit more,

I think that's something we can engage the incumbent vendor on,

fiduciary consulting group.

And so, you know, it's risky to switch to a new vendor or a new firm.

And I didn't see any of the firms as really so compelling

that it was making me, like, wanting to switch.

but I do think we should try to explore this idea with Fiduciary Consulting Group.

And just for folks who weren't aware of it or haven't looked into it further,

essentially what Josh kind of proposed is that the traditional glide path in these target date funds

don't necessarily account for the pension benefits that a retiree may be receiving from the city.

And what that means is as the portfolio rebalances from equities to bonds, they're getting lower returns on the overall portfolio because those are generally less risky assets.

And you want that as you get later into your retirement years.

But Josh's point in kind of the goal of their assessment of what they did in Alameda County was to say, well, look, you know, a lot of these retirees who are receiving pension benefits have that kind of minimum level of security.

These retirees can get higher returns if they were more overweighted in equities at, you know, later parts of their retirement years.

And just from my perspective, I'm still new to investing, but I feel like I've made mistakes in terms of having too much money in bonds and really not getting much return on it and sort of missing out on these really high growth years that we've seen in equities.

And so I think that's something that could really add millions of dollars to our collective accounts if we kind of revisit that.

But I think it's something we can do with Fiduciary Consulting Group and ROSH.

And so hopefully we can explore that at some point in the future.

I don't know that we need to rush it or anything, but I just want to say I'd be happy to support the incumbent vendor at this point.

I wanted to add some information I found out in our absence since the last meeting.

I actually reached out to County of Alameda.

Hank Levy is their plan administrator, and I've met him at NAGDA a couple times.

And he loves Josh.

And they used to have Prudential, and Prudential got bought out by Empower, and he hates Empower.

So just throwing it out there.

He's a wonderful man.

And he's very, very smart.

He loves this stuff.

I believe he's the county's tax collector.

Yeah.

Anyway, he's got a big job.

And this is kind of like his side gig.

And so he loves Josh.

But like I said, he doesn't like Empower.

So note the future in a couple years.

But then I believe I'm going to throw Jeremy under the bus here.

Jeremy reached out and he heard the opposite.

So they don't like Josh, but they love Empower.

Let's have a reminder here.

We're not contracting a specific individual and we contract with a company and these individuals can leave these companies at any time.

Something could happen to them.

They no longer work there.

Well, that's true, but he is the CEO.

Let's just keep in mind that people pass away, people leave jobs, they retire, they sell off their company.

So we're not contracting with a specific individual.

Okay, but that's who we're dealing with today.

Correct.

Right.

So I just want to, we did some additional research and those were our findings.

But like you said, I didn't see any of the vendors that stood out so greatly that it

made me want to switch.

Anyone else have any comments?

If there's no more comments with the group, then I'm ‑‑ oh, well, she is part of the

group.

I'm sorry, Patricia.

Good morning.

Good morning.

How's everybody?

Great.

Thank you.

I didn't see anything that stood out either, but I prefer us to stick with the incumbent.

So FCG, I know formerly highest.

I like the work that they've done for us over the years.

I like the layout.

John has pointed out to us a couple times that he's the expert in this world, and we're not.

so I appreciate the fact that we do have

FCG who guides us with plans that we need to put on watch

what plans we need to switch out of some of our funds

so I know they switched over now they're under Morgan Stanley

the next couple years we can see if that changes

and if we see a change in their practice

we don't like something then we do this again

but I prefer to keep fiduciary consultant group.

Thank you.

Thank you, Ms. Knox.

I want to clarify something.

I'm not a specialist in this business.

I've been doing investments for 30 years,

but the divine contribution world is...

Trying to walk it back, huh?

I just want to make the record clear.

But thank you.

Well, if there's no more comments among the board, I would like to ask the clerk if there's any public comments.

I do not have any public comment for this item.

Okay.

Would someone like to make a motion?

I believe I did make a motion, Brad.

So my motion is to retain the incumbent.

Okay.

Well, okay.

You made a, you didn't say.

I made a recommendation.

Yeah.

Okay, so you're...

Can I make a motion?

Okay.

Is there a second?

I'll second that.

Thank you.

Okay, to clarify, the motion is to recommend the city award a contract to fiduciary consulting group.

Correct.

Okay.

Moved by Colville, seconded by Kang.

Approvable, Col?

Sure, please.

Does it meet your microphones?

Member Rugani?

Yes.

Member Colville?

Yes.

Member Kang?

Yes.

Member Tunson?

Yes.

Member Gardella?

Yes.

Vice Chair Levison?

Yes.

Chair Hoekstra?

Yes.

The motion passes.

Unanimously.

All right.

Well, we do are, we are having a regular meeting, so are there any other member comments, ideas

or questions?

Going, going, meeting adjourned.

Thank you, everybody.

Thank you.