St. Mary's County, MD 457(b) Governance Committee, 26 Aug 2021

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From YouTube: 8/26/21 457(b) Governance Board for St. Mary's County

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A

Good afternoon, I'd like to welcome you to the st mary's county, 457b.

A

Governance committee today thursday august 26th 3 o'clock, first I'd like to call to order.

A

I am jeanette cudmore chief financial officer and the acting chair day. Chris.

B

Castle, amis director of economic development- um I think I'm an employee representative.

C

Catherine pratzen, director of human resources and I'm the plan administrator.

D

County representative.

D

Marvin butler, I'm, the chief of staff, saint mary's, county sheriff's office, all right. Thank you.

A

Everybody first I'd like to get an approval for the um actually approval for the the day's agenda.

B

D

Seconded I have a first and a second all in favor, aye aye.

A

Aye motion carries now. We need an approval for the may 20th 2021 meeting minutes. Please.

A

um Take your time and review them and then I'll take a motion when ready.

B

I'll move approval of the minutes.

B

A second I have a first and a second all, those in favor aye, aye.

A

Motion carries all right. We have um new business, uh we have the second quarter planned performance.

A

From sarawaka, am I saying that correctly uh at voya welcome sarah sarla charla.

A

Welcome and we're ready for you, everyone, yes, okay, great, I'm gonna share my screen, see.

E

There you go. Can you see my screen? Okay now? Yes, thank you perfect well good afternoon and thank.

E

You so much for inviting me to your um eating today. I hope you're all doing well what I'd like.

E

To do is just provide you with the snapshot of the plan and then I'll walk you through.

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How your employees are engaging with the benefit and then provide you with an update on.

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Some of our recent enhancements.

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And certainly at any time, if you have any questions, feel free to stop me and just as a.

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Reminder this is the team. That's supporting your plan on a daily basis and to the far right is.

E

um Marta I like to refer to her as the rock star she's, the one that's meeting with your employees.

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Speaking with them, helping them feel more confident as they plan for their financial future.

E

So with that, I will walk you through the most recent.

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One-Year period ending june 30th. So if you look at the far right.

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Hand, column I'll, walk you through that and I'll certainly point out. Some highlights.

E

And you'll see at the beginning of the period we had about 14 million in assets under management.

E

And there were about 1.1 million that was added to the plan through payroll, deferrals and 97 of those.

E

Deferrals are being made on a pre-tax basis. It's also important to note that there is an increase.

E

Compared to the previous one-year period of about three percent, so that's um I'm sorry about 21.

E

Excuse me compared to the same time period. A year ago, distributions were down. Other activity is a.

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Combination of dividends, asset transfers, revenue, credit fees, etc, and that they were basically on.

E

Par, we also had significant appreciation about 2.7 million, so entered the period with 18 million.

E

Which um represents about a 30 increase from the beginning of the period. So when we look at.

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Contributions, assets, distributions they're all headed in the right direction,.

E

Now we'll take a look at additional demographics, we had 18 new accounts that were added during.

E

This period and that number is certainly much lower than the previous time period.

E

But it's really a result of the environment. We had seven individuals that separated from service.

E

And um took their money out of the plan, it ended a period with 341 participants. So again as a.

E

Reminder when we talk about participants that includes active employees as well as.

E

Individuals that have separated from service so of that number of the 341 we have 77 participants.

E

Or former employees that chose to leave their money within the plan.

E

And of that, 14 have less than 5 000 in their account. If you look down at the bottom.

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Grid you'll see that the average account balance is up um it's much higher than the benchmark.

E

When we look at the bench markets, all of voya's government plans and then the average deferral.

E

Amount is significantly higher. It's almost double the amount for that same time period. A year ago,.

E

And just in speaking with marta, she she mentioned to me that as she's meeting with employees to sing.

E

Or she's hearing from participants about how they want to focus more um on retirement planning, so.

E

There they have a secure retirement, which is resulting in participants increasing their.

E

Contributions and then the average number of investment options being held by a participant.

E

Is 1.6 versus the benchmark and again we're using the target deep funds? So you expect.

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That number to be less than the benchmark.

E

And here we'll take a look at how the assets as well as contributions are being invested by.

E

Category and you'll see here that um majority of the assets are in the target date. Funds.

E

As well as that's where the contributions are being invested, and we typically see a.

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High utilization rate of target date, funds, when that is the default fund and the feedback that.

E

Mart is hearing from participants. Is they like the philosophy of the target date, funds.

E

So you have 288 participants that are utilizing one fund and 99 of um those are in the.

E

Funds or the target date funds which makes sense because they're fully diversified.

E

Mutual funds and then we'll look at a a breakdown here shows us the percentage of assets by fund.

E

Now we'll switch gears a little bit we'll take a look at how your employees are engaging.

E

With the plan they have, 64 of their participants are engaging through the participant website.

E

Mobile app and our customer call center, which is absolutely phenomenal and then 57 are engaging.

E

Digitally so when, when you have employees or participants that are engaging digitally.

E

We found that their savings rates tend to be higher than those that are not.

E

So I may have mentioned this um the last time that we spoke, but I think it's definitely worth.

E

Repeating the information you have a high percentage of participants that are signed.

E

Up for e-delivery- and that means that they have elected to receive electronic communications.

E

And um help says when we're communicating with them we can. We can leverage some of the.

E

Personalized journeys they receive to help them engage with the plan even more, and then you also.

E

When we look at the web registration- that's a that's a very high number as well. So.

E

um I think this is probably the uh some of the highest numbers that I've seen.

E

Certainly higher than um all of our government plans we're looking at so, I think kudos to.

E

um To you that the message is getting to your employees and they're taking action and then.

E

If you look at the below chart, it just breaks down how employees are engaging by age group.

E

And all age groups the uh that they're accessing the participant website.

E

The younger population they're not using the call center as much, which is what we expect and then, if.

E

You look at the older population. You'll see that they're utilizing the call center a little bit.

E

More so I I think some of the goals that I'd like to put in place is getting to that 100 percent.

E

For e-delivery on web registration, um that will definitely benefit your plan participants, so I.

B

Have a question: why why don't those numbers have to 100 percent within each age group.

E

E

Saying that's an excellent question. Let me take that back and I'll get a um an answer.

E

I'll make myself a note.

E

Any other questions I have a question. This is chris again, I think we talked about this.

B

Once before, but I'm I'm interested in fun performance, so we've got.

B

We know where people are putting their money, but we don't know how each of these funds are doing.

B

So, for example, a target day retirement fund- you know 2025. How does that? How did that perform for.

B

The year and how did so, how does each fund that we're our employees are investing in what kind.

B

Of returns are those seeing and then how does that compare to the market in general? You know.

B

We had this discussion in the previous meeting. We did there's really nothing here about performance.

E

I can certainly I will follow up um with the fund performance and then going forward.

E

I will include that, as part of this um summary great. Thank you. Thank you.

E

You're welcome. I did have a couple questions.

D

Just in general, I know that anytime we get a new employee in my in my department. I always try to.

D

Mentor them and talk to them about the voyager plan, um or are we doing enough to.

D

Inform new employees the opportunity to.

D

Get into this program.

E

So what we're doing today is working with cindy to send out information, email blast.

E

About the plan we've just re, we recently created a brain chart that provides an overview of the.

E

The plan, and so for those individuals that would like to enroll on their own.

E

Their directions are included. At the same token, their mardis information is included.

E

um As as part of that brain chart presentation, but we can certainly and we're more than happy to.

E

If we're able to get the contact, information for all of the new hires is proactively contact them.

D

Okay, yeah, I I just think it's important, I think you know I mean um especially when.

D

They're in their 20s or even early 30s, if they get into the plan early right, they and if they.

D

Stay within the county until they retire it's it sets them up very well later. On.

E

I agree and um certainly we'd be happy to um at any time set up a um a presentation.

E

Where we can go through the benefit with your um your new hires or just your employees in general,.

E

And they follow that up with 101 appointments.

C

um And if I may jump in this is catherine, we also introduced the plan in orientation right.

C

You know, and and individuals are given, that information and orientation, um so I just went.

C

Back to look at the number of participants, so we have 341 participants. We have about.

C

850 employees, so that just gives you a percentage of how many are are involved in the plan.

C

Now, although the 850, what 60 something of them were hired after this reporting period,.

C

Right so maybe we'll see an increase at the next quarter right right.

C

So, but always looking for ways to promote the plan, um and I know that in the friday fitbit that.

C

Cindy sends out every week there's always voya information. Marta is available. You know at any.

C

Time, but if any of you think of ways that we can, you know more successfully, promote it or continue.

C

To promote it, please please, let us know: do we have a wellness day this year we have a wellness week.

A

A wellness week, a wellness week, there you go yes and voya has a big part of the wellness week. Yes,.

D

E

They were always open to um different ideas, so if you think of something.

E

That you would like us to consider we'd be more than happy to thank you.

E

And the next slide is just a summary of the types of actions that participants.

E

Are taking as a result of their engagement.

E

So for those that used the participant website.

E

We saw that 61 participants made a change to their deferral amount and then.

E

We had a high number that used the mobile app as well that made a change to their deferral amount.

E

And I think it is helpful with the communications that cindy's sending out on a regular basis that.

E

That helps promote the plan and the tools and resources.

E

And then we also have um employees utilizing the tools, the call center etc.

E

We had 60 participants that utilized either my orange money tool or personal financial.

E

Dashboard contacted the customer service center and, as a result, we had 26 individuals take action.

E

With 20 increasing their contributions, so that's about 43 percent took action.

E

So, in addition to the online, the digital engagement.

E

Employees are also engaging with marta. um She had so far. She's engaged with 306 participants through.

E

Calls virtual appointments for a short period of time. Marta had resumed uh on-site visits and she.

E

Said those were pretty successful. The topics that are important to your employees, they're.

E

Talking about their account reviews, beneficiaries and their options at retirement, marta continues.

E

To be proactive, uh contacting participants to set up an individual appointment and then.

E

We're utilizing the email communications as well as the newsletters. So thank you to.

E

um Catherine and and her team for partnering us partnering with us on that.

E

And as always, some we have resources.

E

That are that are always available to participants just as a reminder.

E

We've recently made some enhancements, we've introduced text nudging and I'll go um I'll.

E

Cover that in just a moment enhancements to the participant website, we've changed the.

E

Look of it, making it more intuitive easier to use we've added a personal digital assistant.

E

So, as participants are on the website, they have a question: they can just type their.

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Question into that chat box and a customer service representative responds to individuals, questions.

E

So it is a personalized message, as opposed to about responding and then enhancements to the plan.

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Sponsor website, which include making it easier to navigate having access to key data.

E

E

So we expanded our outreach to include text nudging which really complements the personalized.

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Journeys that participants are eligible to receive if they've provided their email address.

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And then it's based on certain criteria, so participants will need to opt in to the text.

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Nudging so when they log into their account, they'll have the option to sign up for checks.

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To receive text messages and for those that opt in there are one of three messages that they may.

E

Receive if they don't have a beneficiary on file, maybe they'll receive a message about.

E

The importance of reviewing and updating their beneficiary or perhaps a participant.

E

Has not changed their default amount in six months, they'll receive a text message to save more.

E

So you've probably seen something very similar: a lot of doctors, offices.

E

Are using text messaging or if you've done some online shopping, there's text messages.

E

Just as a follow-up to give you a status of your account of your order, a similar concept.

E

Just another way to make it easier for employees or participants to engage with this benefit.

E

And here's just a sample of the types of messages.

E

That a participant would receive should they opt into receiving text messages.

E

And that is it.

A

Well, thank you for that nice presentation. um Are there any questions.

B

I did have one more question. You said at the beginning that the great majority.

B

Of the contributions were pre-tax, I'm just curious: why aren't they all pre-tax.

E

You have the option of saving on a rock basis as well: okay, okay, yep, any other questions.

A

All righty um with this can I get a motion to accept the second quarter report from voya.

D

B

Second, chris, I have a first and a second all in favor, aye aye motion carries hi.

A

Thank you. Thank you all righty. So now we have thank you. Now we have some old business from.

A

Catherine prattson on alternate employee deferral options. Well, thank you jeanette. You may recall the.

C

Last meeting we talked about offering employees the option to defer, via a percentage deferral in.

C

Addition to a cash deferral and um we have worked with voya and that is in the plan.

A

Wonderful, oh, so that is effective. We are updating material for employees, we're updating.

C

The orientation material so for those currently involved in the plan, you don't need to do anything.

C

Okay, but you certainly could go in and make the change if you wish and then it really is going.

C

To be targeted toward new enrollees um and the preference would be to enroll via a percentage.

C

Because then, each time your salary changes, you would your your contribution, changes and yet.

C

You don't have to do anything so the employee, it's a passive, you know, increase wonderful yeah.

C

That is a great idea, yep yep, so that offers them the option and we were able to do that.

C

um And if I may, could I just ask everybody to jump back to the second quarter item because there's a.

C

Couple of documents in there the fiduciary guide, yes and the government guide. I asked sarla to.

C

Provide that to us I have not had a chance to look at them, but wanted to include that for all the.

C

Board members, and what I'd like to do is review them and go over them next month or the next.

C

Meeting rather, okay and um and just as a reminder, we are fiduciaries of the plan, we're all covered.

C

With fiduciary insurance, um the plan is set up in accordance with the erisa regulations. Although.

C

It's not required because we are a government entity, but we follow that as a best practice.

C

But this is just a guide and- and I think it speaks a little bit chris to what you're asking about the.

C

Performance, so voya is the record keeper for the plan. They're, not the investment manager.

C

And so we don't have an investment manager, and I don't know if that's something that the board you.

C

Know needs to consider so, for example, when voyage showed us the investment performance. The last time.

C

There's an item that they would have if it were their plan, they would have put on a watch list.

C

Right, um what do we do with that? You know and is the board going to be empowered to recommend.

C

Investment changes. Do we want um a consultant to recommend investment changes for us? I know that.

C

Jeanette and I some of the other boards that we're on, we have a consultant that manages that right.

C

So um would that need a change to our plan to allow that? No, it wouldn't need a change to.

C

The plan, but certainly we would have to figure out how to pay for that right. You know what we.

C

If, if we feel that it's necessary, if the board thinks that it's necessary, I think we would.

C

Bring it before the commissioners, you know and discuss that, um but I thought these fiduciary.

C

Guides might be a first step right and again, I haven't read them, but I just want to read and.

C

Understand what that responsibility is, and then just to remind everybody when we selected voya.

C

We used bolton and we had a consultant in that process and they helped us select the investments.

C

um And that was a big part of the process and, and I think the investment lineup is very robust and.

C

It's done very well, but we haven't been look like nobody's looking at it right. You know in.

C

Case there needs to be a change right so um and I I don't know if it would involve an rfp. You.

C

Know we would have to look and see. I don't know what the expense of something like that would be.

C

Okay, so more more to come, but I think that's a little bit I know voya can give us that.

C

Data- and they will, I think they shy away from it a little bit because they are not.

C

We have not hired them to do that right right but, like you said it's our responsibility to.

B

Make sure that we have options for the employees that are investing in something that's returning.

B

Well, and if we're aware of something that you know, needs to be substituted or changed.

C

You know we have that um responsibility as well, exactly yeah, exactly yeah and an investment policy.

C

Statement is usually the first step right for a board, um and I have asked if foia has a sample.

C

And I you may remember, we talked about it at our last meeting and they also don't like to provide.

C

Samples because they're so different for each different entity right, um I think that's something.

C

That, certainly we could do with mary claire right. We could do with um some of our other consultants.

C

um Might be able to provide some guidance right, so the committee is maturing and our.

C

Oversight of the plan is maturing, so I think these are really logical. Next steps sure.

C

You know for all of us to consider okay. Well, I think it's good for all of the you know board.

A

Members that we should be reading these fiduciary agreements, um the documents that are on the site.

A

um To understand our our role and then be ready for the next meeting to discuss it yeah and then.

C

I'll put it as an agenda item yeah and then um you know perhaps get do a little inquiry with.

C

Some of our current consultants about sample investment policy statements about.

C

Recommended next steps, I believe one of these documents even has a checklist in it.

B

Okay, you know so that can just help guide us and there also might be some other local jurisdictions.

A

That may have something in place too right now, that's a good idea! Yeah I'll! Do that as well.

C

So anyway, thank you for that. I just I digress, but I I think that's what I'm hearing you know where.

A

We need to have we're wanting more information and to understand better our responsibility.

A

Okay, any other comments before we go on to the committee reports.

A

Okay, um tracy there's no new business to report; jeanette, no new business, no.

A

You haven't spent any money at all, not yet all righty. Well, we don't have a report. I know I know.

A

All right um are there any uh comments from any of the board members prior to us adjourning.

A

I do have one other item if I may. Oh please, catherine, I looked at the calendar and we.

C

Probably I I didn't even think of it till today we probably should have proposed or should.

C

Propose a calendar for next year. Yes, because we need to let sherry know because this room.

C

Fills up so because our next meeting isn't until november of this year right. So if the board is.

C

Satisfied with meeting quarterly um what we're currently doing is meeting on the f.

C

Fourth, thursday and the pattern is february may august and november, and if the board is.

C

Willing to um uh consider you know repeating that um we, I would like a motion that would.

C

Be great, and the only exception to the fourth thursday is in november, because of thanksgiving.

C

Right and it's usually the third thursday all right well, can I get a motion from the board.

A

To propose the agenda as um presented from catherine, the the 2012 calendar I proposed.

D

That do that yes motion. Do I have a second? Is that marvin? Yes, all right, I have a first.

A

And a second I'm in favor, sorry thank you, hi motion carries and what I'll do thank.

C

You and what I'll do for the board is we'll send it um that in writing. Okay, so everybody.

C

Can update their calendars sounds great anything else, catherine. I don't you sure.

A

All right, thank you, one more time. All right can I get a motion to adjourn the meeting so moved.

A

Second, I got a first and a second all, those in favor say aye.

A

Aye aye aye aye motion carry all right. Thank you. Very much meeting is now adjourned. Thank you.

B