Title
Amend Ordinance S-50504 to Extend Payment Authority with Hyas Group for Investment Consulting Services for 401(A)/457 Plans and Post Employment Health Plans (PEHP) (Ordinance S-51816) - Citywide
Description
This report requests City Council approval to extend payment authorization awarded on January 24, 2024, under Contract 149752 with Hyas Group, LLC from February 28, 2025 to June 30, 2025. Further request authorization for the City Controller to disburse all funds related to this extension.
Report
Summary
Hyas Group was awarded a contract to provide consulting services to the 401(A)/457 ("Deferred Compensation Plan", "DCP") and PEHP Plans following a competitive procurement in 2019. The original three-year agreement included two, one-year options to extend, which have been exercised, with a total contract value of an amount not to exceed $600,000. A short contract extension through June 30, 2025, is requested to allow for continuing investment and plan consulting services to allow Hyas Group to continue providing consulting services and implementation of the 2024 provisions of the federal regulations included in the SECURE 2.0 (Setting Every Community Up for Retirement Enhancement) legislation.
SECURE 2.0 makes several important changes to the retirement savings that greatly benefit all City employees and their beneficiaries. There are a total of 38 federal statutory changes that apply to Phoenix's DCP and PEHP Plans. The 2024 changes include the addition of plan provisions that allow for penalty free emergency withdrawals for unforeseeable or immediate financial needs, penalty free withdrawals for individuals involved in cases of domestic abuse and extends the age at which required minimum distributions must be taken, to name a few.
As of February 2025, there are still funds remaining under the agreement and Hyas Group continues to work on implementing the required federal plan changes.
Contract Term
The initial contract term was for three years covering February 27, 2019 through February 27, 2022. The City Council approved previous extensions for an updated end date to February 28, 2025. Prior to February 28, 2025, staff amended the agreements end date to June 30, 2025.
Financial Impact
The total contract value does not exceed the previously approved amount of $720,000. Funds still remain within that appropriation but were not expended prior to the expiration date. The consulting service fees are paid from the City of Phoenix Employees' Deferred Compensation Plan Trust. The Trust's funding source is retained revenue from the DCP investment earnings and are restricted funds.
Concurrence/Previous Council Action
The City Council previously reviewed and approved the following:
- Contract 149752 on April 3, 2019.
- Ordinance S-50504 extending the contract term to February 28, 2025.
Department
Responsible Department
This item is submitted by Assistant City Manager Inger Erickson and the Retirement Office.