BOARD MEETING DATE: October 1, 2010
AGENDA NO. 25

TITLE:

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, September 17, 2010, 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 Governing 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 Plan 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.

Summary of Report

Attached is the 457 Deferred Compensation Plan Annual Report to the Board, for FY 2009-10. During this fiscal year period, the Committee reviewed the Plan funds and made several changes to replace funds that no longer met the Committee’s investment policy criteria. In addition, asset allocation models were added to the Plan to provide participants with a tool to assist them in allocating their accounts. The Committee also adopted a Plan Expense Reimbursement Account (PERA) Policy that outlines how excess revenues will be used and how Plan expenses will be paid. Finally, due to the retirement of three Committee members, the Committee Charter was updated to reflect the new Committee membership, as approved by the Board on June 4, 2010. The attached report provides information as of June 30, 2010, regarding the Plan Assets/Demographics and Plan Performance.

Attachment (PDF, 912k)

457 Deferred Compensation Plan Annual Report for FY 2009-10