Pasadena City Council to Vote on $400 Million Retirement Plan Provider Contract

The Pasadena City Council will consider Monday whether to approve a contract covering more than $400 million in employee retirement assets. 

The recommendation asks City Council members to authorize a deal with Empower Annuity Insurance Company of America: the firm would continue managing the city’s deferred compensation plans. 

More than 2,800 city employees participate in the voluntary retirement savings program. Assets in the plan now exceed $400 million. 

Empower has served Pasadena for 13 years, according to a report by the Finance Department. The company was known as Great-West Life & Annuity Insurance Company when first selected in 2012. 

Seven firms competed for the contract this spring. An April request for proposals drew 853 public views and 28 downloads. 

Empower scored highest among respondents at 86.30 points, the report said. Nationwide Retirement Solutions placed second with 78.44 points. 

The Deferred Compensation Oversight Committee unanimously recommended Empower in August. The panel cited the firm’s comprehensive proposal and stable service record. 

Evaluators assessed firms on security, participant services, investment flexibility and fees. They also considered transition capabilities and overall experience. 

The proposed contract runs five years with an optional five-year extension. No Pasadena-based businesses submitted proposals. 

Plan participants pay all fees. The report said the city faces no fiscal impact from the contract. 

Employees in the 457(b) plan make pre-tax or after-tax salary contributions. A smaller 401(a) plan serves limited eligible employees.

City Council members serve as plan trustees. The oversight committee includes three employee-elected members and two mayoral appointees. 

Morgan Stanley’s Fiduciary Consulting Group advised the committee as independent financial consultant. The firm conducts quarterly portfolio reviews. 

The current month-to-month agreement began after the previous contract expired June 30.