BOARD MEETING DATE: January 9, 2009
AGENDA NO. 13

PROPOSAL:

Annual Report on 457 Deferred Compensation Plan

SYNOPSIS:

AQMD sponsors an IRS-approved 457 deferred compensation program for its employees. On May 2, 2008 the Board approved the Deferred Compensation Plan Committee Charter formalizing the fiduciary duties and responsibilities of the Committee. The Annual Report addresses the Board’s responsibility for monitoring the activities of the Committee and ensuring the Committee carries out its duties and responsibilities under the Charter.

COMMITTEE:

Administrative, December 12, 2008, Recommended for Approval

RECOMMENDED ACTION:

Receive and file.
 

Barry R. Wallerstein, D.Env.
Executive Officer

Background

AQMD sponsors and administers a 457 deferred compensation program for its employees. State law governs the fiduciary requirement for the operation and investment of 457 plans sponsored by governmental entities. The AQMD Board serves a fiduciary role subject to the duties and obligations under Article XVI, Section 17 of the California Constitution.

To meet its fiduciary responsibilities, the Board, at the time it established AQMD’s 457 Plan, also established a Deferred Compensation Committee to oversee the administration of the Plan. On May 2, 2008, the Board approved the Deferred Compensation Plan Committee Charter formalizing the fiduciary duties and responsibilities of the Committee.
 

Proposal

Attached is the AQMD’s first 457 Deferred Compensation Plan Annual Report to the Board. For the 2007- 2008 period, the Committee engaged a third-party investment consultant to conduct a review of the fiduciary structure and all plan-related costs; to review and negotiate a renewal contract with the Plan’s current service provider, The Hartford, providing for the recapture of revenues in a Plan Expense Reimbursement Account to support ongoing administration of the Plan; and to establish a Committee Charter and review a new Investment Policy Statement for adoption. The attached report provides information as of June 30, 2008, regarding the Plan Assets/Demographics; Plan Performance; and a Cost Assessment as of June 2007.

Attachment (PDF, 1.36m)

Annual Report to the Board, South Coast Air Quality Management District 457 Deferred Compensation Plan