CITY AND COUNTY OF HONOLULU DEFERRED COMPENSATION PLAN COMMITTEE MINUTES OF THE SPECIAL MEETING OF THE COMMITTEE

Transcription

1 CITY AND COUNTY OF HONOLULU DEFERRED COMPENSATION PLAN COMMITTEE MINUTES OF THE SPECIAL MEETING OF THE COMMITTEE A special meeting of the City and County of Honolulu Deferred Compensation Committee was held on Thursday, March 21, 2013, commencing at 10:35 a.m., at Honolulu Hale, BFS Conference Room, 2 nd Floor, 530 South King Street, Honolulu, Hawaii. Present: Staff: Nelson Koyanagi (BFS Acting Director) Gary Kurokawa (BFS Deputy Director) Diane Kawauchi (Acting Corporation Counsel) Vera Onouye (DHR Chief, Employment and Personnel Services Division) Mike Hansen, Chief, Internal Control Division Mike Golojuch (Deferred Compensation Plan Committee Administrator and BFS Administrative Services Officer) Jenny Tobin (DHR Chief, Benefits, Research and Transactions Section) Guests: Gavin Gruenberg (Vice-President Tax Exempt Markets, ING Retirement Services) Jared Nakamoto, ING-Hawaii Case Manager By teleconference: Bill Tugaw, SST Benefits I. CALL TO ORDER: With a quorum present Nelson Koyanagi called the meeting to order and presided as chair of the meeting. Mike Golojuch acted as secretary of the meeting. II. MINUTES OF PREVIOUS MEETINGS A. The minutes of the January 31, 2013 Annual meeting were reviewed and filed as corrected on page 2, paragraph II A. 2, line one: change from the reduction to a small increase in the number of accounts. B. The minutes of the January 31, 2013 Quarterly meeting were reviewed and filed as corrected on page 1, Present, add: Alison Look (Acting Chief, BFS Internal Control Division). C. The minutes of the March 7, 2013 Special meeting were reviewed and filed as corrected on Page 2, paragraph II. A. 3. line two, delete: or the following after March 9, 2013; line six, delete: Cardinal and add: a ; lines six and seven, delete: or another mailing service ; lines eight and nine, delete: another company,. 1

2 III. ELECTION REQUIREMENTS FOR NEW COMMITTEE MEMBERS: A. Jenny Tobin briefed the Committee members that she was able to speak with Cardinal mailing service. They gave an estimate of approximate $4,500 to send out a two page, double-sided document. They also could provide bulk rating mailing for those participants on Oahu and first class mailing for those on neighbor islands and the mainland. Jenny Tobin thought that about 75% of the participants live on Oahu, which means 25% would need first class mailing. ING thought that it is closer to 80% who live on Oahu. She did say that we needed to provide them with a mailing list. Jared Nakamoto has an Excel file mailing list that can be sent. 1. Jenny Tobin also stated that she had contacted EMSS. They could only give a general estimate of $.15 to $.20 per person plus first class postage. We would also need to provide envelopes with return address. The cost would be more than $4, Jenny Tobin provided everyone with the revised documents to be mailed. a. The first document was the Notice of Elections Request for Candidates. She had added a Note at the top of the document concerning why the participant was receiving the notice and basic information on candidate and voter eligibility. She had also included the election time frame, June 1, 2013 to June 14, She stated that she would change wording about the application being enclosed instead of being attached. Finally, she changed the date that the application must be received at the City and County of Honolulu from March 27, 2013 to April 19, b. Diane Kawauchi provided a handout with some proposed changes to the notice document. The first series of changes concerned the Note. The term guarantee was replaced with establish. There were also other clarifying comments. It was suggested that wording be added that ballots would not be mailed out if there were no need for an election, meaning three or less candidates had applied. Jenny Tobin would add the appropriate language. Effective July 1, 2013, was added before the Deferred Compensation 2

3 Committee at the beginning of paragraph five. 3. Jenny Tobin changed one of the Question and Answers (Q&As). Under What is the time commitment?, the first bullet was changed to read: Committee members are expected to attend all Committee meetings. Meeting attendance and review of meeting materials is on the Committee member s own time. There were no other changes to the Q&As. 4. For the Candidate Application document, Jenny Tobin updated the due date from March 27, 2013 to April 19, 2013 and added the address where the application needs to be sent. a. Diane Kawauchi provided a revised statement for the Candidate Application. The new statement was reviewed and two small changes were made to the revision so it reads: You may submit a statement regarding your candidacy that will be available to those employees and retirees who are eligible to vote for the Committee Member vacancies. Please include with your statement your name and department (or the department from which you retired). The statement may be handwritten, typewritten or printed, one page, and is limited to no more than 200 words (exclusive of your name and department). The statement will be available, unedited except as provided below: If the statement is more than 200 words, all words after the 200 th word will be deleted or masked. If the statement includes remarks, deemed by the Committee Chair in his sole discretion, to be obscene or offensive, the statement will not be published. 5. On a motion duly made by Vera Onouye and unanimously carried, the Committee approved the initial mailing of the corrected documents and selected Cardinal Mailing Service to handle this transaction. 3

4 B. Jenny Tobin stated that she contacted several companies that provide balloting and tabulating services. Gavin Gruenberg provided information for SMS Research and Marketing Services, Inc (SMS). 1. The companies contacted included Ward Research, PKF Hawaii, and the League of Woman Voters. 2. Ward Research said they could do both the online and mail balloting. They would need to devise a unique individual identifiers which would add to the cost. They did not provide a dollar amount at this time. 3. PKF Hawaii could also handle online and mail ballots. The Employees Retirement System has used this firm. Again, details concerning costs and timing were not available at this time. 4. League of Women Voters could handle the balloting but only paper ballots. They have worked with unions and credit unions. Ballots mailed to a specific location, which are picked up at one time by the League. They count and certify. They do not handle the mailing of the ballots and related documents. We would need to do this or have a mailing service do it. The only cost available was that they charged $8,000 for their labor costs to tabulate 5,500 ballots. 5. Gavin Gruenberg provided a one page document that showed SMS s original services and estimated cost of $30,650. There was also a revised offer for $22,689. a. The city and County would provide SMS with 7,500 envelopes with the City s return address pre-printed. The total number was revised to 7,000, which may reduce the cost. b. The second alert post card to remind participants to return election page was deleted. c. There was a question on how the City is charged for the pre-paid return envelopes for those who mail in their ballot instead of going online to vote. Gavin Gruenberg would check on how the City would be charged. d. Gavin Gruenberg stated that SMS needs three weeks before the initial mailing should they be selected. 6. Nelson Koyanagi stated that the Committee needed additional information before making a final decision. 4

5 The Committee has until April 19, 2013 before they actually know whether or not an election will be necessary. Jenny Tobin would get additional information from the other three companies. As necessary, another Special meeting will be scheduled in the latter part of April 2013 to finalize the election process. IV. ING UPDATE ON INVESTMENT CHANGES A. Gavin Gruenberg confirmed for the Committee that one of the four funds approved for replacement at the January 31, 2013 Deferred Compensation Committee is Lord Abbett Small Cap Value. The fund is to be replaced with DFA US Targeted Value I. As stated at the January 31, 2013 meeting, the DFA fund does not provide ING with any revenue, which means a loss of 40 basis points (bps) in revenue to ING. As a result ING will add an administrative fee of 0.40% to the DFA US Targeted Value fund. This fund replacement also affects our Custom Life Style funds, Conservative, Moderate, and Aggressive since Lord Abbett was part of the underlying fund lineup in those three portfolios. Gavin reported that ING is unable to add an administrative fee to a single underlying fund in the custom lifestyle portfolios. As a result, to replace the lost revenue due to the elimination of Lord Abbett Small Cap Value, ING will add an administrative fee of 0.05% to the Conservative Lifestyle Portfolio, 0.10% to the Moderate Lifestyle Portfolio, and 0.15% to the Aggressive Lifestyle Portfolio. With these administrative fees, the total expense for each custom lifestyle fund will change as follows: Conservative from.0.68% to.0.69%; Moderate from 0.73% to 0.74%; and Aggressive from 0.73% to 0.71%. The Committee did not express any concerns with the required administrative fees for the custom lifestyle portfolios. ING will therefore proceed with all changes as voted upon at the January 31, 2013 Committee meeting. B. Gavin Gruenberg stated that they had hoped to make the changes with the appropriate 30 day notice to participants by May 6, However, with the need to inform the Committee of the addition of administrative fees to the lifestyle portfolios, the changes will probably be delayed approximately one week. V. NEXT MEETING DATE A. Quarterly meeting May 23, 2013, 10:00 a.m. to 12:00 p.m., Mayor s Conference Room. 5

6 VI. ANNOUNCEMENT Gavin Gruenberg and Bill Tugaw expressed their thanks and appreciation for the confidence that the Committee had in their organizations by extending their contracts by one year. VII. ADJOURNMENT: There being no further business, the meeting was adjourned at 11:35 a.m. Respectfully submitted, Mike Golojuch, Secretary 6