I'm calling the order to this hearing.

This is a public hearing of the committee of the whole of the Council of the District of Columbia.

I'm Phil Mendelson, Chairman of the Council and Chair of the Committee of the Whole.

Today is Monday, April 6, 2026.

The time is 1219 in the afternoon.

We are in room 500 of the John E.

Wilson Building.

The subject of this hearing is Bill 26-627 entitled Frequency Standardization for Contributions in Support of District Government Employee Benefits Amendment Act of 2026.

This legislation was introduced by me at the request of the Chief Financial Officer on Friday, March 13th.

And the stated purpose of this legislation is to amend the District of Columbia Comprehensive Merit Personnel Act of 1978 and the Police Officers Firefighters and Teachers Retirement Benefit Replacement Plan of 1998 to standardize and align the frequency of the district's contributions and support of benefits for employees of the district government.

The legislation proposes that the other postemployment benefits fund be paid instead of every fiscal year to on a regular pay period basis.

And it proposes that the defined contribution payment plan, also known as the Section 401A trust, to be instead of not less frequently than quarterly to read per pay period, and the legislation provides that the police officers, firefighters, and teacher retirement benefit replacement plan be changed from not more than 30 days after it is appropriated or 30 days after the beginning of the fiscal year for which it is appropriated, whichever is later, to instead read on the 15th and last day of every month.

The purpose of these changes is to smooth out the payments to these different funds so that instead of there being an a lump sum, that um it is more uh frequent and standardized.

That's why the legislation is entitled Frequency Standardization of Contributions.

The impetus behind this is to help the district with regard to cash flow purposes.

Uh since uh making, for example, an annual payment at the start of the fiscal year to the retirement funds uh doesn't recognize that the revenues that support that payment don't come in all at once at the beginning of the fiscal year.

The record in this matter will be open for two weeks.

That is, it will close at 5 p.m.

on Monday, April 20th, 2026.

So anyone who is testifying today or wishes to supplement their comments, and anyone who isn't testifying today but wishes to, um, all comments are welcome, but in order to be included in the record, they have to be filed with the committee no later than 5 p.m.

on Monday, April 20th, 2026.

Uh I'm going to break up the witnesses that we have uh to hear from uh the retirement board and then to hear from the chief financial officer.

So Daniel Hernandez, Pension Administrator from the for the District of Columbia Retirement Board, Kate Robinson, who's interim general counsel with the retirement board, and Tim Vincente, who is the actuary with Bolton Partners.

And I don't have a copy of your statement.

We have an informal statement.

We can provide you.

I have it on in uh thank you.

All right, the floor is yours.

Good afternoon, Chairman Mendelssohn, Committee of the Hall.

My name is Daniel Hernandez.

I'm the pension administrator for the District of Columbia Retirement Board.

Uh with me today, I have Leslie West, RC CFO, and Tom Vincente, our actuary from Bolton Incorporated.

Uh, we're here and pleased to provide testimony on bill on bill 26-627, the frequency standardization for contribution and the support of the district government employee benefits amendment act of 2026.

Though we do not have any any formal report, uh we have engaged with our actuary to study this further and provide additional analysis by your said date of April 20th, where we will be submitting a report.

With that, we provided you some general comments that I've just handed to you, and I'll let our actuary Tom Vicente talk a little bit about the impact of this bill on DCRB.

Thank you, Daniel.

Um the DCRB asked us basically three questions.

One was what are others doing?

How common is the current practice versus the proposed practice?

Uh what's the implication to the board and the pension plan itself?

Then finally, any other thoughts?

And finally, what?

And just any other thoughts we had on the on about the bill and the proposed changes.

So in terms of other organizations, we polled um a group called NASRA.

That's the National Association of State Retirement Administrators.

So they are a trade group for probably the 150 to 200 largest pension government pension plans in the U.S.

So they have a lot of surveys of their members' practices.

However, they do not have a survey about the timing of when individual when plans put their money in or governments put the money in.

The government finance officers association does publish what they call best practices.

However, they do not address this specific topic about the timing of when money should go in.

They just say there should be a commitment to put money into the plan.

So those two sort of national organizations didn't have anything.

So we did survey uh local employers of size in the Maryland, Virginia area, and we came up with 19 answers.

Um of those 11 use a single payment approach.

Seven of those make their payment in the first quarter of their fiscal year.

Uh the other seven use some sort of periodic approach, bi-monthly or quarterly or monthly type approaches.

So it's it's it's still more heavily toward the single approach, single payment approach, but it's not universal, certainly.

So nothing really conclusive there.

In terms of the implications for the plan itself, there's positives and negatives.

So the big negative is that when money goes into the plan, it's invested.