Title
Contract Extension with Hyas Group for Investment Consulting for 401(A)/457 Plans and Post Employment Health Plan (PEHP) (Ordinance S-50504)
Description
This report requests City Council approval to extend Contract 149752 with Hyas Group, LLC for a one year period and add $120,000 in additional payment authority for consulting services over the term of the extension. 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 one-year contract extension 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' 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.
During this time, a new procurement process will be started.
Contract Term
The initial contract term was for three years covering Feb. 27, 2019 through Feb. 27, 2022, and included two options to extend in one year increments which extend the expiration date to Feb. 27, 2024. The additional contract extension term will be for one year beginning Feb. 28, 2024, through Feb. 28, 2025.
Financial Impact
The additional funding authority will not exceed $120,000, for a total contract value not to exceed $720,000. The consulting service fees are paid from the City of Phoenix Employees' Deferred Compensation Plan Trust. The Trust funding source is retained revenue from the DCP investment earnings and are restricted funds.
Concurrence/Previous Council Action
The City Council approved the original Contract 149752 on Apr. 3, 2019.
The DCP/PEHP Board of Trustees recommended approval of the Contract 149752 extension on Dec. 14, 2023.
Department
Responsible Department
This item is submitted by Deputy City Manager Inger Erickson and the Retirement Office.