Page 83 - Yucaipa Valley Water District

Director Memorandum 18-106

Date: July 17, 2018

Prepared By: Allison M. Edmisten, Chief Financial Officer

Subject: Consideration of Consolidating 457(b) Deferred Compensation Plans with
VOYA Financial

Recommendation: That the Board authorize the consolidation of the CalPERS 457(b) plan
to the VOYA 457(b) plan.

The District currently offers employees two options for their 457(b) Deferred Compensation plans,
one plan through CalPERS and one plan through VOYA. VOYA also administers the CalPERS
plan. By consolidating our two plans into one plan through VOYA we will provide a reduction in
fees paid by employees, significant improvements to the plan, and additional options available to
employees.

Current Current VOYA Proposed
CalPERS 457(b) 457(b) Plan Consolidated VOYA
Plan 457(b) Plan
Recordkeeping Fee 0.42% - 0.44% 1.25% 0.40%
Investment Fee (average) 0.41% 0.86% 0.20%

Other options included in the proposed consolidation are as follows:

• Voya Fixed Account with current interest rate of 1.75% for all employees
o Current plan with CalPERS does not offer guaranteed investment option for those
who want stability of principal.
• Access to open architecture investment menu
o Allows District to monitor investments through publicly available information
o Allows District to engage in selection and ongoing review of investment menu with
no restriction on mutual fund choices
o Allows full transparency in fees and investment information for plan participants –
able to track online (not currently available with CalPERS or VOYA existing plans)
o New proposed investment menu from well know, cost effective, high quality
investment managers (e.g. Vanguard, American Funds).
o New proposed investment menu fills asset classes missing from current choices
with CalPERS (e.g. Large Cap Value, Large Cap Growth, Mid Cap Value, Mid Cap
Blend, Mid Cap Growth, Small Value, Small Growth, Global and International).
• Local Service from VOYA based out of their Redlands location
• Administrative function outsourcing to relieve staff burden and improve participant
experience. The following functions will be reviewed and approved by VOYA:
o Domestic Relations Orders
o Unforeseen Emergency Withdrawals
o Participant Account Loans

Yucaipa Valley Water District - July 17, 2018 - Page 81 of 94