The contract is funded by fees charged to participant 457 Deferred Compensation Plan accounts. There is no fiscal impact beyond overhead administrative support costs, which are partially offset through the plan.
On February 26, 2019, the Board of Supervisors authorized the Human Resources Department to negotiate a three-year contract with Great-West Life & Annuity Insurance Company, d/b/a Empower Retirement, with regards to the Contra Costa County Deferred Compensation Plan (I.R.C. § 457( ("the Plan") for a three (3) year term commencing on or after July 1, 2019, with the option for two (2) additional one (1) year contract extensions.
The anticipated contract with Empower sets forth the specific administrative and recordkeeping services that Empower will provide in connection with the Plan.
Pursuant to the contract, Empower will provide enrollment support to the County and its employees. Empower will also provide for initial and ongoing education for those who choose to participate in the Plan ("Participants"), including face-to-face group sessions and on-on-one consultations. Participants will be provided access to a participant website that is customized to their needs and will provide Plan Participants with powerful tools that they can use 24/7. Among other options, Participants will be able to do the following on the participant website:
- transfer assets;
- make beneficiary designations;
- calculate estimated health care expenses based on individualized information;
- calculate estimated monthly retirement income and goals based on Participant's financial data;
- access information about investment options, such as prospectuses.
Through Empower's services, Participants will be able to contact Empower through various means:
- Through the participant website, Participants will be able to have real time conversations with customer service representatives using Live Chat.
- By phone, Participants will be able to contact Empower service representatives through a toll-free number. To make it easier for employees to receive assistance, Empower's toll free customer service hours will include evenings and Saturdays.
- By a toll-free automated voice response system, Participants will be able to inquire or make account changes from a touch-tone telephone. Inquiry services available from the automated voice response system will use share prices, unit values and account balances that are as of the last calculated unit value/share price.
Empower's customer service representatives and field onsite representatives are required to hold Financial Industry Regulatory Authority Series 6 and 63 licenses, meaning that, when authorized, they have the capacity to provide professional financial advice to Plan Participants.
Empower will also provide educational and communication materials to Participants regarding financial investing, retirement options, and planning tools pursuant to the Plan. It will also make quarterly benefit statements available to Participants, including on the participant website, and circulate Plan notices.
In addition, Empower will offer fully automated loan administration, making it easy for Participants to monitor as well as apply for loans. It will also provide distributions to Participants, process Participant rollover contributions and provide Participants with transaction and investment statements.
Empower will also provide an annual report to the County concerning the services it has provided, investment information and benefit payments, among other information. It will also create a recordkeeping system online via Empower’s website for the County acting as Plan Sponsor that permits Plan Sponsor to communicate inquiries or changes while administering the Plan. As part of the transition to Empower for recordkeeping and administrative services, Empower will coordinate the transfer of records and assets from the Plan’s prior service provider and will reconcile asset values.
A trust is maintained in connection with the Plan to which Plan contributions are made and held by a trustee. The Trust Agreement with Great-West Trust Company, LLC, provides that it will establish and operate the exclusive benefit trust fund for the Plan, which includes Plan contributions and assets. Great-West Trust Company, LLC will serve as the Trustee under the Trust Agreement and will manage and invest the trust fund for the exclusive benefit of Plan participants and their beneficiaries. The Trust Agreement sets forth the general duties and powers of Great-West Trust Company, LLC. Such duties and powers include, but are not limited to: receiving contributions; administering the exclusive benefit trust fund; making payments from the trust; transferring and accepting property for eligible rollovers; and various ministerial acts.
The Schwab Personal Choice Retirement Account Plan Application and Agreement will allow Participants to continue to have the option of contributing funds to a Self-Directed Brokerage Account (“SDBA”) through Schwab. For those Participants with funds currently in a Schwab SDBA, the funds will continue to be held by Schwab. SDBAs allow Participants to exercise a higher level of control over their 457 Plan funds. Schwab will provide SDBA services pursuant to the terms in the Personal Choice Retirement Account Plan Application and Agreement, which contains mutual indemnification and arbitration clauses. Empower will provide recordkeeping and administrative services for the SDBAs offered through Schwab, subject to applicable fees, as described in the contract with Empower.
After finalizing all provisions and investment options, the Committee will return to the Board of Supervisors for their approval and adoption of contracts with fund companies as needed. Following contract approval, the County will begin facilitation of communication and educational materials for the Plan Participants.
The extension of the County’s contract with its current recordkeeper, Mass Mutual, will soon end. Without a successor contract in place, the County will not have a contract in place for the performance of necessary recordkeeping and administrative services and many of the favorable terms and conditions of the current contract will be lost.