PURSUANT TO EXECUTIVE ORDER N-29-20 ISSUED BY GOVERNOR GAVIN NEWSOM ON MARCH 17, 2020, THE SPECIAL DEFERRED COMPENSATION MEETING FOR MAY 4, 2021 AT 12:00 P.M. WILL TAKE PLACE SOLELY BY VIDEOCONFERENCE/TELECONFERENCE.
TO ACCESS THE MEETING:
Please click the link below to join the webinar: https://us02web.zoom.us/j/89529896694 Description: Deferred Compensation Committee Or One tap mobile : US: +16699006833,,89529896694# or +12532158782,,89529896694#
Or Telephone: Dial(for higher quality, dial a number based on your current location): US: +1 669 900 6833 or +1 253 215 8782 or +1 346 248 7799 or +1 301 715 8592 or +1 312 626 6799 or +1 929 205 6099
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In order to facilitate public participation at meetings held solely by electronic means, the City will accept public comment in the following manner:
1. Members of the public may submit comments of any length up to two hours prior to the start of the meeting, at the following email address:
Please be aware that, while these comments will be provided to the members of the body and will become part of the meeting record, they will not be read aloud. Any comment submitted in this fashion will be forwarded to the legislative body prior to the start of the meeting.
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Public Comment - Limited to items on this Special Meeting Agenda and will be heard at the time the item is considered.
IF YOU NEED A REASONABLE MODIFICATION OR ACCOMMODATION PURSUANT TO THE AMERICANS WITH DISABILITIES ACT BECAUSE YOU ARE UNABLE TO PARTICIPATE ELECTRONICALLY AS SET FORTH ABOVE, CONTACT THE DEPARTMENT OF FINANCE AS SOON AS POSSIBLE AT (626) 744-4355 OR [email protected]
MEETING MINUTES February 2, 2021
CITY OF PASADENA DEFERRED COMPENSATION TRUST ADMINISTRATION COMMITTEE
The meeting of the Deferred Compensation Committee of the City of Pasadena was held on Tuesday, February 2, 2021 solely by video conference/teleconference.
The meeting was called to order at 12:03 p.m.
In attendance:
Committee Members Staff Other Attendees Mark Jomsky, Chair Vic Erganian Jayson Davidson, Hyas Group Raphy Timour Matthew Hawkesworth Jessica Bigueur, Empower Michael Paliwoda Judith Hernandez Keir Tilford, Empower Bob Ridley Paula Hanson
Recording Secretary: Gloria Acevedo
1. Jayson Davidson, Senior Consultant, Hyas Group presented the Fourth Quarter 2020 Performance Report, which showed continued strength of global equity markets as world economies fight to recover from the effects of the COVID-19 pandemic. As the prospect of more widespread vaccine distribution and further government stimulus promoted much of the positive momentum during the quarter, those themes remain primary drivers for markets going into 2021. Mr. Davidson noted that the Fourth Quarter had a pronounced shift in the relative performance of certain asset categories with Small Cap and Value stocks outperforming their Large and Growth counterparts. Whether the shift will continue, remains to be seen as we navigate the probability of a more lasting and comprehensive economic recovery. The City’s 457 Plan had three funds on watch at the start of the quarter, the Victory Integrity Small Cap Value Fund, the American Funds EuroPacific Growth Fund, and the Vanguard International Value Fund. The Victory Fund remained in violation of policy and will thus remain on watch. It did enjoy a strong relative performance quarter. The EuroPacific Growth Fund, on the back of another strong quarter, is now comfortably in investment policy compliance. The Hyas Group recommends holding the watch status and will revisit the possibility of removing the Fund from watch at the next meeting. The Vanguard International Value Fund was placed on watch last quarter due to a significant change in the subadvisory management arrangements and the related allocations to the subadvisors. It will remain on watch until confirmation that the change does not disrupt the management of the Fund.
Deferred Compensation Committee February 2, 2021 Page 2 of 3
2. Vanguard announced a change to the minimum asset requirements for the Institutional Share Class of the Vanguard Target Date Retirement Funds. The City’s 457 Plan now qualifies for a move from the current Investor Share Class, which will result in an expense reduction from a 12 to 15 bps range to a consistent 9 bps across all target-date vintages. The committee voted to approve the share class change. The Hyas Group Analytics Team will work with Empower on the transition process.
3. The committee engaged in the annual review of the plan’s investment policy statement. The document was approved with an adjustment to the language related to the watch status initiation and evaluation process for the target date investment options. This change is to accommodate the fact that the target date options are offered as a series in the plans and the watch process should be assessed at the series level when warranted.
4. Empower representatives presented the quarterly plan review, discussed participant transaction activity and service activity in general. The plan finished the year with a total of 127 Corona Related Distributions and these distributions weighed on cash flow, which came in negative for the year. Empower’s participant service representative continues to conduct one-on-one meetings virtually and this has allowed for more flexibility in scheduling time for City employees. A total of 66 virtual meetings were conducted during the fourth quarter. As with many public sector retirement plans, the City of Pasadena’s plan has a large portion of the assets tied to participants that are over the age of 50. Empower has been focused on targeting this cohort with communications and completed a “Stay In The Plan” campaign, with an email distribution to 435 active participants and a 64% open rate.
5. The committee was informed that the plan amendment application for the in-service, age 59 ½ distribution option was submitted and the provision is now available in the Plan. The Qualified Birth or Adoption distribution option has not been implemented as Empower is waiting on guidance from the IRS, which is expected in April of this year. Both of these provisions will require an amendment to the plan document and Empower is working on migrating the City to a new version of its model document. Once complete, the City’s plan document should be up-to-date and in compliance.
6. The committee was briefed on the filing of a claim against the City by a participant, related to the processing of a Corona Related Distribution request, submitted before the end of 2020. The CARES Act enabled option ended on December 31, 2020 and the participant’s request was not processed prior to the ending of this provision. It is unknown whether the committee will be involved further in the matter. An update will be provided at the next meeting.
Deferred Compensation Committee February 2, 2021 Page 3 of 3
Adjournment
With no further business to come before the committee, the meeting adjourned at 1:37 p.m.
Attest:
______Mark Jomsky, Chair Date Gloria Acevedo Date Recording Secretary
March 31, 2021 Performance Flash Report CITY OF PASADENA PERFORMANCE REVIEW 457 Deferred Compensation Plan First Quarter 2021
Annualized QTR YTD 1Yr 3Yr 5Yr 10Yr 2020 2019 2018 2017 2016 2015 Putnam Stable Value (0.20%) 0.56 0.56 2.44 2.44 2.24 2.17 2.51 2.51 2.30 2.00 1.79 1.78 3 Yr Constant Maturity US Treasury Yield 0.06 0.06 0.21 1.49 1.48 1.10 0.43 1.94 2.63 1.58 1.05 1.02 US 90 Day T-Bill 0.01 0.01 0.10 1.32 1.11 0.58 0.36 2.06 1.94 0.93 0.32 0.05 +/- Index 0.50 0.50 2.23 0.95 0.76 1.07 2.08 0.57 (0.32) 0.42 0.75 0.76 US Stable Value 3 3 2 8 9 24 3 14 10 12 18 18
QTR YTD 1Yr 3Yr 5Yr 10Yr 2020 2019 2018 2017 2016 2015 BlackRock US Debt Index F -3.39 -3.39 0.83 4.73 3.18 3.53 7.64 8.78 0.03 3.63 2.69 0.57 BBgBarc Capital US Aggregate Bond Index -3.37 -3.37 0.71 4.65 3.10 3.44 7.51 8.72 0.01 3.54 2.65 0.55 +/- Index (0.02) (0.02) 0.12 0.08 0.08 0.09 0.13 0.06 0.02 0.09 0.04 0.02 US Fund Intermediate Core Bond 69 69 82 43 51 40 57 29 26 27 38 27
QTR YTD 1Yr 3Yr 5Yr 10Yr 2020 2019 2018 2017 2016 2015 Metropolitan West Total Return Bond Plan -2.91 -2.91 3.65 5.56 3.76 4.28 9.17 9.23 0.29 3.49 2.56 0.25 BBgBarc Capital US Aggregate Bond Index -3.37 -3.37 0.71 4.65 3.10 3.44 7.51 8.72 0.01 3.54 2.65 0.55 +/- Index 0.46 0.46 2.94 0.91 0.66 0.84 1.66 0.51 0.27 (0.05) (0.09) (0.30) US Fund Intermediate Core-Plus Bond 58 58 82 21 51 22 27 53 17 78 83 31
QTR YTD 1Yr 3Yr 5Yr 10Yr 2020 2019 2018 2017 2016 2015 DFA Inflation Protection Securities I -1.69 -1.69 7.97 5.92 3.88 3.56 11.65 8.46 -1.29 3.28 4.67 -1.22 BBgBarc Capital US TIPS Index -1.47 -1.47 7.54 5.68 3.86 3.44 10.99 8.43 -1.26 3.01 4.68 -1.44 +/- Index (0.22) (0.22) 0.43 0.24 0.02 0.12 0.66 0.03 (0.03) 0.27 (0.02) 0.22 US Fund Inflation-Protected Bond 76 76 53 13 27 9 17 25 37 24 38 19
QTR YTD 1Yr 3Yr 5Yr 10Yr 2020 2019 2018 2017 2016 2015 MFS Value R6 8.69 8.69 48.27 11.04 11.84 11.40 4.03 30.18 -9.78 17.86 14.25 -0.42 Russell 1000 Value Index 11.26 11.26 56.09 10.96 11.74 10.99 2.80 26.54 -8.27 13.66 17.34 -3.83 +/- Index (2.57) (2.57) (7.82) 0.08 0.10 0.41 1.23 3.64 (1.51) 4.20 (3.09) 3.40 US Fund Large Value 79 79 75 41 43 23 38 9 67 29 51 11
1 CITY OF PASADENA PERFORMANCE REVIEW 457 Deferred Compensation Plan First Quarter 2021
Annualized QTR YTD 1Yr 3Yr 5Yr 10Yr 2020 2019 2018 2017 2016 2015 BlackRock Equity Index F 6.18 6.18 56.43 16.84 16.34 13.96 18.48 31.55 -4.37 21.84 11.97 1.43 S&P 500 Index 6.17 6.17 56.35 16.78 16.29 13.91 18.40 31.49 -4.38 21.83 11.96 1.38 +/- Index 0.01 0.01 0.08 0.06 0.05 0.05 0.08 0.06 0.01 0.01 0.01 0.05 US Fund Large Blend 55 55 47 19 17 8 30 20 18 28 25 19
QTR YTD 1Yr 3Yr 5Yr 10Yr 2020 2019 2018 2017 2016 2015 MFS Growth R6 0.40 0.40 49.88 21.17 20.61 16.14 31.74 37.81 2.68 30.99 2.55 7.49 Russell 1000 Growth Index 0.94 0.94 62.74 22.80 21.05 16.63 38.49 36.39 -1.51 30.21 7.08 5.67 +/- Index (0.54) (0.54) (12.86) (1.63) (0.44) (0.49) (6.76) 1.42 4.20 0.78 (4.52) 1.82 US Fund Large Growth 75 75 93 38 32 25 56 10 11 28 54 18
QTR YTD 1Yr 3Yr 5Yr 10Yr 2020 2019 2018 2017 2016 2015 Wells Fargo Special Mid Cap Value R6 11.20 11.20 68.32 11.70 12.18 11.86 3.36 35.68 -13.02 11.27 21.68 -2.65 Russell Mid Cap Value Index 13.05 13.05 73.76 10.70 11.60 11.05 4.96 27.06 -12.29 13.34 20.00 -4.78 +/- Index (1.85) (1.85) (5.44) 1.00 0.58 0.81 (1.60) 8.62 (0.74) (2.07) 1.69 2.13 US Fund Mid-Cap Value 90 90 76 26 31 5 49 2 50 71 20 24
QTR YTD 1Yr 3Yr 5Yr 10Yr 2020 2019 2018 2017 2016 2015 BlackRock Mid Cap Index F 13.48 13.48 83.56 13.50 14.45 12.00 13.81 26.25 -11.05 16.26 20.75 -2.11 S&P Mid Cap 400 Index 13.47 13.47 83.46 13.40 14.37 11.92 13.66 26.20 -11.08 16.24 20.74 -2.18 +/- Index 0.01 0.01 0.10 0.10 0.08 0.08 0.15 0.05 0.03 0.02 0.01 0.07 US Fund Mid-Cap Blend 11 11 20 33 25 18 35 56 35 39 13 22
QTR YTD 1Yr 3Yr 5Yr 10Yr 2020 2019 2018 2017 2016 2015 MFS Mid Cap Growth R6 -2.40 -2.40 57.87 20.63 19.79 14.70 35.80 37.93 1.21 26.39 4.75 4.60 Russell Mid Cap Growth Index -0.57 -0.57 68.61 19.41 18.39 14.11 35.59 35.47 -4.75 25.27 7.33 -0.20 +/- Index (1.83) (1.83) (10.74) 1.22 1.40 0.59 0.21 2.46 5.96 1.12 (2.58) 4.80 US Fund Mid-Cap Growth 93 93 89 37 32 21 40 17 9 31 55 9
2 CITY OF PASADENA PERFORMANCE REVIEW 457 Deferred Compensation Plan First Quarter 2021
Annualized QTR YTD 1Yr 3Yr 5Yr 10Yr 2020 2019 2018 2017 2016 2015 Victory Integrity Small-Cap Value R6 22.66 22.66 108.69 9.06 11.68 9.91 1.33 23.28 -18.42 12.59 24.52 -6.49 Russell 2000 Value Index 21.17 21.17 97.05 11.57 13.56 10.06 4.63 22.39 -12.86 7.84 31.74 -7.47 +/- Index 1.49 1.49 11.64 (2.51) (1.88) (0.15) (3.30) 0.88 (5.56) 4.75 (7.22) 0.98 US Fund Small Value 34 34 29 58 47 32 61 30 81 15 63 56
QTR YTD 1Yr 3Yr 5Yr 10Yr 2020 2019 2018 2017 2016 2015 BlackRock Russell 2000 Index F 12.74 12.74 95.08 14.89 16.54 11.89 19.99 25.72 -10.88 14.88 21.58 -4.20 Russell 2000 Index 12.70 12.70 94.85 14.76 16.35 11.68 19.96 25.52 -11.01 14.65 21.31 -4.41 +/- Index 0.04 0.04 0.23 0.13 0.19 0.21 0.03 0.20 0.13 0.23 0.27 0.21 US Fund Small Blend 72 72 28 14 5 18 12 33 30 22 44 39
QTR YTD 1Yr 3Yr 5Yr 10Yr 2020 2019 2018 2017 2016 2015 Vanguard Small Cap Growth Index I 2.56 2.56 83.11 19.40 19.06 13.18 35.31 32.77 -5.69 21.94 10.74 -2.52 Vanguard US Small Cap Growth Index 2.55 2.55 83.12 19.40 19.04 13.10 35.35 32.75 -5.68 21.90 10.62 -2.60 +/- Index 0.01 0.01 (0.01) 0.00 0.02 0.08 (0.04) 0.03 (0.01) 0.04 0.11 0.08 US Fund Small Growth 75 75 73 50 57 57 51 27 50 46 47 52
QTR YTD 1Yr 3Yr 5Yr 10Yr 2020 2019 2018 2017 2016 2015 Invesco Global R6 1.00 1.00 65.29 14.05 16.87 11.28 28.10 32.09 -13.21 36.79 0.59 4.34 MSCI ACWI (Net) Index 4.57 4.57 54.60 12.07 13.21 9.14 16.25 26.60 -9.41 23.97 7.86 -2.36 +/- Index (3.57) (3.57) 10.69 1.98 3.66 2.14 11.85 5.49 (3.80) 12.81 (7.27) 6.71 US Fund World Large Stock 87 87 20 26 15 18 20 10 82 4 85 9
QTR YTD 1Yr 3Yr 5Yr 10Yr 2020 2019 2018 2017 2016 2015 Vanguard International Value Inv 5.74 5.74 56.36 6.07 9.76 5.47 8.99 20.39 -14.52 27.96 4.46 -6.44 MSCI ACWI Ex-USA Value (Net) Index 7.06 7.06 48.68 2.40 7.25 3.02 -0.77 15.71 -13.97 22.66 8.92 -10.06 +/- Index (1.32) (1.32) 7.68 3.67 2.51 2.45 9.76 4.68 (0.55) 5.30 (4.46) 3.62 US Fund Foreign Large Value 72 72 29 6 3 14 5 21 34 8 30 88
3 CITY OF PASADENA PERFORMANCE REVIEW 457 Deferred Compensation Plan First Quarter 2021
Annualized QTR YTD 1Yr 3Yr 5Yr 10Yr 2020 2019 2018 2017 2016 2015 Vanguard Total Intl Stock Index Adm 3.94 3.94 52.80 6.51 9.97 5.22 11.28 21.51 -14.43 27.55 4.67 -4.26 Vanguard Total International Stock Index 3.82 3.82 51.97 6.71 9.96 5.24 11.24 21.81 -14.62 27.41 4.72 -4.29 +/- Index 0.12 0.12 0.83 (0.20) 0.01 (0.02) 0.04 (0.30) 0.18 0.14 (0.05) 0.03 US Fund Foreign Large Blend 39 39 30 37 24 57 30 52 50 23 12 79
QTR YTD 1Yr 3Yr 5Yr 10Yr 2020 2019 2018 2017 2016 2015 American Funds EuroPacific Growth R6 -0.43 -0.43 60.79 10.20 12.90 7.72 25.27 27.40 -14.91 31.17 1.01 -0.48 MSCI ACWI Ex-USA Growth (Net) Index -0.08 -0.08 49.36 10.31 12.03 6.69 22.20 27.34 -14.43 32.01 0.12 -1.25 +/- Index (0.35) (0.35) 11.43 (0.11) 0.87 1.03 3.06 0.06 (0.48) (0.84) 0.89 0.77 US Fund Foreign Large Growth 70 70 26 55 36 41 33 59 58 44 20 66
QTR YTD 1Yr 3Yr 5Yr 10Yr 2020 2019 2018 2017 2016 2015 MFS International New Discovery R6 0.47 0.47 47.61 6.18 10.04 7.97 10.14 22.94 -10.29 32.16 0.65 2.85 MSCI ACWI Ex-USA Small Growth (Net) Index 3.34 3.34 72.65 8.89 11.70 7.18 23.69 24.61 -18.27 33.64 -0.28 6.50 +/- Index (2.87) (2.87) (25.04) (2.71) (1.66) 0.79 (13.56) (1.67) 7.98 (1.48) 0.94 (3.65) US Fund Foreign Small/Mid Growth 42 42 98 79 86 65 96 84 9 83 14 74
QTR YTD 1Yr 3Yr 5Yr 10Yr 2020 2019 2018 2017 2016 2015 Vanguard Target Retirement Income Inv 0.08 0.08 17.02 7.06 6.38 5.66 10.02 13.16 -1.99 8.47 5.25 -0.17 Vanguard Retirement Income Index 0.11 0.11 17.35 7.39 6.64 5.87 10.70 13.40 -1.98 8.67 5.35 0.12 +/- Index (0.03) (0.03) (0.33) (0.33) (0.26) (0.21) (0.68) (0.24) (0.01) (0.19) (0.10) (0.30) US Fund Target-Date Retirement 62 62 57 32 46 16 36 49 21 62 41 7
QTR YTD 1Yr 3Yr 5Yr 10Yr 2020 2019 2018 2017 2016 2015 Vanguard Target Retirement 2015 Inv 0.32 0.32 19.57 7.41 7.45 6.73 10.32 14.81 -2.97 11.50 6.16 -0.46 Vanguard Retirement 2015 Index 0.36 0.36 19.85 7.78 7.73 6.93 11.01 15.08 -2.88 11.61 6.40 -0.22 +/- Index (0.04) (0.04) (0.28) (0.37) (0.28) (0.20) (0.69) (0.27) (0.09) (0.11) (0.24) (0.24) US Fund Target-Date 2015 95 95 90 78 74 56 75 69 20 44 56 11
4 CITY OF PASADENA PERFORMANCE REVIEW 457 Deferred Compensation Plan First Quarter 2021
Annualized QTR YTD 1Yr 3Yr 5Yr 10Yr 2020 2019 2018 2017 2016 2015 Vanguard Target Retirement 2020 Inv 1.28 1.28 27.16 8.73 8.92 7.68 12.04 17.63 -4.24 14.08 6.95 -0.68 Vanguard Retirement 2020 Index 1.33 1.33 27.45 9.15 9.23 7.96 12.86 17.87 -4.14 14.22 7.17 -0.40 +/- Index (0.05) (0.05) (0.29) (0.42) (0.31) (0.28) (0.82) (0.24) (0.10) (0.14) (0.22) (0.28) US Fund Target-Date 2020 62 62 47 37 36 19 46 28 42 17 29 23
QTR YTD 1Yr 3Yr 5Yr 10Yr 2020 2019 2018 2017 2016 2015 Vanguard Target Retirement 2025 Inv 1.86 1.86 32.57 9.62 9.95 8.31 13.30 19.63 -5.15 15.94 7.48 -0.85 Vanguard Retirement 2025 Index 1.91 1.91 32.92 10.10 10.29 8.62 14.19 19.93 -5.01 16.08 7.66 -0.58 +/- Index (0.05) (0.05) (0.35) (0.48) (0.34) (0.31) (0.89) (0.30) (0.14) (0.14) (0.18) (0.27) US Fund Target-Date 2025 48 48 37 30 29 17 40 22 42 21 23 24
QTR YTD 1Yr 3Yr 5Yr 10Yr 2020 2019 2018 2017 2016 2015 Vanguard Target Retirement 2030 Inv 2.49 2.49 37.19 10.26 10.77 8.84 14.10 21.07 -5.86 17.52 7.85 -1.03 Vanguard Retirement 2030 Index 2.54 2.54 37.46 10.73 11.10 9.13 14.96 21.33 -5.74 17.65 8.11 -0.80 +/- Index (0.05) (0.05) (0.27) (0.47) (0.33) (0.29) (0.86) (0.26) (0.12) (0.13) (0.26) (0.23) US Fund Target-Date 2030 68 68 48 41 36 23 38 32 37 34 32 31
QTR YTD 1Yr 3Yr 5Yr 10Yr 2020 2019 2018 2017 2016 2015 Vanguard Target Retirement 2035 Inv 3.17 3.17 41.87 10.86 11.57 9.33 14.79 22.44 -6.58 19.12 8.26 -1.26 Vanguard Retirement 2035 Index 3.19 3.19 42.14 11.32 11.90 9.64 15.67 22.76 -6.48 19.24 8.55 -1.02 +/- Index (0.02) (0.02) (0.27) (0.46) (0.33) (0.31) (0.87) (0.33) (0.10) (0.12) (0.29) (0.24) US Fund Target-Date 2035 73 73 60 48 42 29 43 42 32 35 32 37
QTR YTD 1Yr 3Yr 5Yr 10Yr 2020 2019 2018 2017 2016 2015 Vanguard Target Retirement 2040 Inv 3.82 3.82 46.64 11.43 12.36 9.79 15.47 23.86 -7.32 20.71 8.73 -1.59 Vanguard Retirement 2040 Index 3.84 3.84 46.92 11.90 12.69 10.11 16.31 24.19 -7.22 20.87 8.98 -1.25 +/- Index (0.02) (0.02) (0.28) (0.47) (0.33) (0.32) (0.83) (0.33) (0.11) (0.16) (0.25) (0.34) US Fund Target-Date 2040 77 77 59 46 39 26 40 43 37 25 27 43
5 CITY OF PASADENA PERFORMANCE REVIEW 457 Deferred Compensation Plan First Quarter 2021
Annualized QTR YTD 1Yr 3Yr 5Yr 10Yr 2020 2019 2018 2017 2016 2015 Vanguard Target Retirement 2045 Inv 4.47 4.47 51.64 12.03 12.89 10.04 16.30 24.94 -7.90 21.42 8.87 -1.57 Vanguard Retirement 2045 Index 4.49 4.49 51.85 12.50 13.21 10.36 17.03 25.36 -7.77 21.54 9.13 -1.25 +/- Index (0.02) (0.02) (0.21) (0.47) (0.32) (0.32) (0.73) (0.42) (0.13) (0.11) (0.26) (0.32) US Fund Target-Date 2045 73 73 47 37 32 22 36 43 43 26 28 42
QTR YTD 1Yr 3Yr 5Yr 10Yr 2020 2019 2018 2017 2016 2015 Vanguard Target Retirement 2050 Inv 4.53 4.53 51.82 12.09 12.93 10.06 16.39 24.98 -7.90 21.39 8.85 -1.58 Vanguard Retirement 2050 Index 4.59 4.59 52.18 12.58 13.26 10.39 17.18 25.36 -7.77 21.54 9.13 -1.25 +/- Index (0.06) (0.06) (0.36) (0.49) (0.33) (0.33) (0.79) (0.38) (0.13) (0.14) (0.28) (0.32) US Fund Target-Date 2050 80 80 59 43 40 24 37 47 37 38 29 45
QTR YTD 1Yr 3Yr 5Yr 10Yr 2020 2019 2018 2017 2016 2015 Vanguard Target Retirement 2055 Inv 4.54 4.54 51.79 12.07 12.92 10.06 16.32 24.98 -7.89 21.38 8.88 -1.72 Vanguard Retirement 2055 Index 4.59 4.59 52.18 12.58 13.26 10.39 17.18 25.36 -7.77 21.54 9.13 -1.25 +/- Index (0.05) (0.05) (0.39) (0.51) (0.34) (0.33) (0.86) (0.38) (0.12) (0.16) (0.25) (0.46) US Fund Target-Date 2055 85 85 66 45 45 30 41 51 37 48 27 53
QTR YTD 1Yr 3Yr 5Yr 10Yr 2020 2019 2018 2017 2016 2015 Vanguard Target Retirement 2060 Inv 4.54 4.54 51.75 12.06 12.91 - 16.32 24.96 -7.87 21.36 8.84 -1.68 Vanguard Retirement 2060 Index 4.59 4.59 52.18 12.58 13.26 - 17.18 25.36 -7.77 21.54 9.13 -1.25 +/- Index (0.05) (0.05) (0.43) (0.52) (0.35) - (0.85) (0.40) (0.10) (0.18) (0.28) (0.43) US Fund Target-Date 2060+ 85 85 71 52 57 - 42 66 34 53 21 46
QTR YTD 1Yr 3Yr 5Yr 10Yr 2020 2019 2018 2017 2016 2015 Vanguard Target Retirement 2065 Inv 4.55 4.55 51.66 12.02 - - 16.17 24.96 -7.95 - - - Vanguard Retirement 2065 Index 4.59 4.59 52.18 12.58 - - 17.18 25.36 -7.77 - - - +/- Index (0.04) (0.04) (0.52) (0.56) - - (1.00) (0.39) (0.18) - - - US Fund Target-Date 2060+ 82 82 73 55 - - 47 64 39 - - -
6 Wells Fargo Sale of Asset Management March 2, 2021
MEMORANDUM
From: Hyas Group, LLC
RE: Sale of Wells Fargo Asset Management
Dear Client:
Wells Fargo Bank recently announced that in the second half of 2021 it would be selling 90% of Wells Fargo Asset Management (WFAM) to two private equity firms: GTCR and Reverence Capital Partners. These two firms will be utilizing funds launched in 2020 for the purchase.
The Hyas Group has spoken with WFAM about this development. WFAM has re-iterated that it does not intend to overhaul any existing investment management teams and has structured compensation packages designed to encourage employee retention. Additionally, the Board of 108 NW 9th Ave #203 this new enterprise, which is likely to be renamed, will include multiple independent members, Portland, Ore. 97209 Nico Marais (current CEO to WFAM), and three members apiece from GTCR and Reverence (971) 634-1500 Capital Partners. Asset management industry veteran Joseph Sullivan will serve as Executive hyasgroup.com Chairman.
Wells Fargo’s interest in this spin-off has generally been known throughout the industry for several years and this transaction serves as welcomed closure to ongoing speculation. That said, private equity funds generally have limited holding periods (typically seven to ten years) and this structure is often perceived as transitional in nature. Under this structure, it will be essential that the private equity firms allow the WFAM investment teams to retain their autonomy and ownership of processes.
Due to the uncertainty this transaction introduces, the Hyas Group recommends funds managed by WFAM and its subsidiaries be formally placed “on-watch” with particular concern for any key personnel turnover as this transaction unfolds. If you have any questions, please contact your Hyas Group consultant.
Contact:
Jayson Davidson, CFA Rasch Cousineau Ted Grigsby, CIMA [email protected] [email protected] [email protected] 503.360.3510 702.898.0441 503.750.5052
Greg Settle Ned Taylor [email protected] [email protected] 360.480-6501 503.309.0156
Vincent Galindo Audrey White [email protected] [email protected] 503.929.9402 503.740.5609 Vanguard Target Date Fund Operational Changes February 24, 2021
MEMORANDUM
From: Hyas Group, LLC
RE: Operational Changes to the Vanguard Target Date Funds
Dear Client:
Vanguard recently announced several operational changes to the management of its target date strategy. These changes, which have recently gone into effect, are the result of a multi-quarter risk analysis designed to determine what approach will help Vanguard minimize the tracking error and transaction costs associated with its target date funds. A discussion of these adjustments, their rationale, and the Hyas Group’s perspective is provided below. Importantly, the suite’s target asset allocation and investment management fees will not change in conjunction with these adjustments. 108 NW 9th Ave #203 Portland, Ore. 97209 Adjustment #1: Daily Rebalancing (971) 634-1500 A continuation of its current policy, Vanguard concluded that a daily rebalancing of its target hyasgroup.com date suite remains appropriate for minimizing tracking error and asset allocation drift from targets. In contrast, a less frequent rebalancing approach (such as weekly, monthly, or quarterly) would allow the underlying asset allocation greater latitude to move off target and experience performance swings outside of management’s expectations. While the Hyas Group takes no issue with this approach, it is important to consider it in conjunction with the increased rebalancing latitude that Vanguard has adopted (see Adjustment #2).
Adjustment #2: Widening Rebalancing Thresholds and Weights Relative to Target Vanguard’s new policy stemming from this change is to increase the degree the asset allocations may differ from their current target of 75 basis points to a new target of 200 basis points (a basis point is one-hundredth of a percentage point). Additionally, the post-rebalance target was increased from 50 to 100 basis points. In arriving at this new policy, Vanguard determined that the benefits of reduced transaction costs attributable to this increased latitude exceeded the potential for increased tracking error. The Hyas Group’s expectations generally match Vanguard’s: increased tracking error and decreased transaction costs. The net benefit of these two variables is yet to be determined. With increased latitude, this policy places incrementally greater reliance on the judgement of Vanguard’s team, for better or worse. However, the new thresholds are still viewed as conservative and their contribution to tracking error as marginal.
Adjustment #3: Adopting a Monthly Glide-path Roll-down Vanguard’s previous roll-down policy was to adjust the target date funds’ asset allocations on a quarterly basis to match the glide path as it changes over time, within the confines of Vanguard’s rebalancing thresholds. Since a glide path generally shifts from stocks to bonds and cash over time, this new policy is likely to marginally lower the glide path’s risk and return levels by moving the asset allocation towards relatively conservative investments at a more frequent pace. Additionally, by diffusing its roll-down increments, Vanguard will be less exposed to trading in volatile or crowded markets where liquidity is scarce. This marginal risk reduction will be most pronounced in near-retirement funds where the shift from stocks to bonds is generally larger. The Hyas Group welcomes this policy shift as it is expected to facilitate trading and reduce sequence of returns risk, especially for near-retirement, generally higher-balance investors.
Adjustment #4: Limited Use of Futures Under this new policy, up to 2% of a fund’s assets may be invested in equity index and interest rate futures, whose performance is expected to generally reflect that of the applicable stock and bond markets. This policy, allowing Vanguard to use the highly liquid futures markets to a limited extent, may also relieve some trading pressure in cases where liquidity and transaction costs of underlying securities render them relatively unappealing. The Hyas Group takes no issue with this policy.
In addition to these adjustments, Vanguard also recently announced that it has launched an 108 NW 9th Ave #203 International Bond Index fund exclusively for use within the target date suite. Vanguard Portland, Ore. 97209 announced this creation in 2020 but delayed its implementation due to elevated market (971) 634-1500 volatility. The Hyas Group continues to find this endeavor appropriate as it will better segregate hyasgroup.com flows of the target date funds from the broader investor base and thereby limit transaction costs.
While the risk and return implications of these changes may prove to be offsetting, they are not expected to materially change those of the target date suite as a whole. Generally, they provide Vanguard with greater, but still constrained, flexibility and are likely to further reduce transaction costs. In summary, the Hyas Group accepts these changes as reasonable and does not believe they warrant investment action.
If you have any questions, please contact your Hyas Group consultant.
Contact:
Jayson Davidson, CFA Rasch Cousineau Ted Grigsby, CIMA [email protected] [email protected] [email protected] 503.360.3510 702.898.0441 503.750.5052
Greg Settle Ned Taylor [email protected] [email protected] 360.480-6501 503.309.0156
Vincent Galindo Audrey White [email protected] [email protected] 503.929.9402 503.740.5609 Empower Plan Review Report
Plan Review
CITY OF PASADENA DEFERRED COMPENSATION PLAN | 98741-01 Reporting Period Ending March 31, 2021
Keir Tilford Empower Retirement 303-737-1721 [email protected]
Table of Contents
Executive Summary Plan Assets Asset Allocation Plan Utilization Participant Details Contribution Analysis Distributions Loans Voice Response System Utilization Services Offered Glossary of Terms
City of Pasadena Deferred Compensation Plan 98741-01 Reporting Period Ending March 31, 2021 For Plan Sponsor Use Only Page 2 Executive Summary
Plan Assets As of 12/31/2019 As of 12/31/2020 As of 03/31/2021
Plan Asset Balance $314,196,131 $351,127,291 $357,271,825
Account Reduction Loan Balance $6,774,440 $6,014,993 $6,095,998
Total Plan Asset Balance $320,970,571 $357,142,284 $363,367,823
01/01/2019 01/01/2020 01/01/2021 Cash Flow to to to 12/31/2019 12/31/2020 03/31/2021
Contributions $12,426,224 $13,545,838 $3,802,478
Distributions $19,675,182 $19,412,633 $6,200,378
Net Cash Flow $-7,248,958 $-5,866,794 $-2,397,900
City of Pasadena Deferred Compensation Plan 98741-01 Reporting Period Ending March 31, 2021 For Plan Sponsor Use Only Page 3 Executive Summary
Participants 12/31/2019 12/31/2020 03/31/2021
Eligible Employees 2,498 1,891 1,842
Participants Contributing 2,280 1,480 1,346
Active Participants with Balances 1,725 1,758 1,771
Terminated Participants with Balances 869 872 871
Participants with Loan Balance 532 482 473
CashPlan Utilization Flow 12/31/2019 12/31/2020 03/31/2021
Participation Rate 91.27% 78.27% 73.07%
Average Participant Paycheck Contribution Percentage Rate* 0.00% 0.00% 0.00%
Average Participant Paycheck Contribution Dollar Amount** $487 $440 $440
Average Participant Contribution Amount*** $5,253 $8,440 $2,352
Average Participant Balance $121,082 $133,472 $135,183
Investment Options in Plan with a Balance 34 34 34
*If your plan only allows participant paycheck elections by amount, this will reflect 0%. **If your plan only allows participant paycheck elections by percent, this will reflect $0. ***Average of total contributions during the reporting period.
Figures provided represent plan information as of the reporting date listed. Please refer to the Glossary of Terms for a description of each figure's calculation.
City of Pasadena Deferred Compensation Plan 98741-01 Reporting Period Ending March 31, 2021 For Plan Sponsor Use Only Page 4 Plan Assets
Your plan's total asset balance is illustrated here. Total asset balance includes the balances of all employed and previously employed participants, in addition to plan forfeiture assets. Total loan balance includes all outstanding loans. Plan Asset History
$400,000,000 % Change in Plan Assets
$350,000,000 12/31/2020 to 03/31/2021 1.74%
12/31/2019 to 12/31/2020 11.27% $300,000,000
$250,000,000 Number of Investment Options
As of 03/31/2021, your plan offered 45 investment $200,000,000 options.
34.6% of plans reported 1-15 investment options offered $150,000,000 for participant contributions in Defined Contribution plans.*
*Source: PSCA 61st Annual Survey, 2017 Plan Experience $100,000,000 Plan Asset History $50,000,000 (Includes Plan Asset Balance and Account Reduction Loan Balance)
$0 03/31/2021 $363,367,823 12/31/2019 12/31/2020 3/31/2021 12/31/2020 $357,142,284 12/31/2019 $320,970,571 Plan Asset Balance Account Reduction Loan Balance
City of Pasadena Deferred Compensation Plan 98741-01 Reporting Period Ending March 31, 2021 For Plan Sponsor Use Only Page 5
Asset Allocation
Assets Assets As of % of Number of As of % of Number of Asset Class Investment Option 12/31/2020 Total Participants 03/31/2021 Total Participants
Asset Allocation Vanguard Target Retirement 2015 Inv $4,620,669 1.32% 55 $4,515,565 1.26% 55 Asset Allocation Vanguard Target Retirement 2020 Inv $16,426,390 4.68% 140 $17,292,280 4.84% 137 Asset Allocation Vanguard Target Retirement 2025 Inv $20,971,445 5.97% 195 $22,592,245 6.32% 198 Asset Allocation Vanguard Target Retirement 2030 Inv $12,703,177 3.62% 170 $13,658,792 3.82% 177 Asset Allocation Vanguard Target Retirement 2035 Inv $14,541,883 4.14% 222 $15,151,104 4.24% 226 Asset Allocation Vanguard Target Retirement 2040 Inv $8,006,047 2.28% 196 $8,402,731 2.35% 198 Asset Allocation Vanguard Target Retirement 2045 Inv $9,889,538 2.82% 238 $10,672,716 2.99% 241 Asset Allocation Vanguard Target Retirement 2050 Inv $3,974,957 1.13% 157 $4,163,426 1.17% 158 Asset Allocation Vanguard Target Retirement 2055 Inv $2,846,578 0.81% 120 $3,029,386 0.85% 129 Asset Allocation Vanguard Target Retirement 2060 Inv $452,244 0.13% 43 $520,059 0.15% 49 Asset Allocation Vanguard Target Retirement 2065 Inv $430,050 0.12% 14 $548,507 0.15% 16 Asset Allocation Vanguard Target Retirement Income Inv $5,576,372 1.59% 63 $4,608,838 1.29% 60 $100,439,349 28.60% $105,155,649 29.43% International Fund American Funds EuroPacific Gr R6 $4,186,240 1.19% 218 $4,045,213 1.13% 217 International Fund Invesco Global R6 $5,150,783 1.47% 186 $4,983,814 1.39% 188 International Fund MFS International New Discovery R6 $3,235,892 0.92% 162 $3,200,680 0.90% 160 International Fund Vanguard International Value Portfolio $2,853,993 0.81% 163 $3,004,706 0.84% 161 International Fund Vanguard Total Intl Stock Index Admiral $1,064,923 0.30% 61 $1,148,011 0.32% 64 $16,491,831 4.70% $16,382,424 4.59% Small Cap BlackRock Russell 2000 Index Coll F $3,189,151 0.91% 153 $3,527,057 0.99% 159 Small Cap Vanguard Small Cap Growth Index Instl $13,125,368 3.74% 334 $13,557,600 3.79% 341 Small Cap Victory Integrity Small Cap Value R6 $4,296,090 1.22% 219 $5,438,932 1.52% 216 $20,610,609 5.87% $22,523,589 6.30% Mid Cap BlackRock Mid Cap Equity Index - Coll F $3,692,304 1.05% 170 $4,178,378 1.17% 174 Mid Cap MFS Mid Cap Growth R6 $8,026,343 2.29% 260 $7,862,414 2.20% 258 Mid Cap Wells Fargo Spec Md Cp Val R6 $3,126,855 0.89% 154 $3,571,551 1.00% 153 $14,845,502 4.23% $15,612,343 4.37% Large Cap BlackRock Equity Index - Collective F $30,273,911 8.62% 585 $31,395,371 8.79% 585 Large Cap MFS Growth R6 $35,809,335 10.20% 550 $35,418,044 9.91% 544 Large Cap MFS Value R6 $13,473,997 3.84% 316 $14,063,744 3.94% 315 $79,557,243 22.66% $80,877,159 22.64% Bond BlackRock US Debt Index Fund Coll F $1,190,121 0.34% 63 $1,140,009 0.32% 62 Bond DFA Inflation-Protected Securities I $1,495,383 0.43% 41 $1,409,022 0.39% 44 Bond Metropolitan West Total Return Bond Plan $5,516,984 1.57% 297 $5,301,454 1.48% 297 $8,202,488 2.34% $7,850,485 2.20% Fixed Putnam Stable Value Fund: 20bps $98,811,748 28.14% 1,442 $97,776,787 27.37% 1,428 $98,811,748 28.14% $97,776,787 27.37% Brokerage Schwab SDB Securities $11,051,552 3.15% 57 $9,736,727 2.73% 63 Brokerage Schwab SDB Securities Roth $183,669 0.05% 8 $159,338 0.04% 9 Brokerage Schwab SDB Sweep Program $921,355 0.26% 57 $1,163,329 0.33% 63 Brokerage Schwab SDB Sweep Program Roth $11,945 0.00% 9 $33,994 0.01% 8 $12,168,521 3.47% $11,093,388 3.11%
City of Pasadena Deferred Compensation Plan 98741-01 Reporting Period Ending March 31, 2021 For Plan Sponsor Use Only Page 6 Grand Total: $351,127,291 100.00% $357,271,825 100.00% *Your plan's default investment election(s).
City of Pasadena Deferred Compensation Plan 98741-01 Reporting Period Ending March 31, 2021 For Plan Sponsor Use Only Page 7 Asset Allocation by Age (As of 03/31/2021)
129 Participants 698 Participants
2,642 Participants Age <=29 Age 50 - 59 29% Your Plan's Asset Allocation 5% 4% 1% 26% 18%
5% 3% 6% 29% 9% 61% 2% 4% 3% 4% 23% 27% 480 Participants 699 Participants Age 30 - 39 Age >=60 20% 3% 1% 3% 15% 39% 0% 5% 6% 2% 4% 23% 17% 6% 4% 4% 5% 50% 23% 4% 3%
633 Participants 3 Participants Age 40 - 49 Age Unknown Asset Allocation 29% 35% 26% International Fund 5% 4% Small Cap 6% 16% Mid Cap 4% 2% Large Cap 23% Bond 2% Fixed 27% Brokerage 3% Total: 100% 6% 24% 7% 19% 6% 55%
City of Pasadena Deferred Compensation Plan 98741-01 Reporting Period Ending March 31, 2021 For Plan Sponsor Use Only Page 8 Asset Allocation
The number of investment options that plan participants direct contributions, as well as the number of investment options where balances are held in plan participant accounts, is shown here, by age and gender. Average Number of Investment Option Allocations for New Contributions As of 03/31/2021
3.5 2.5 Age Male Female Unknown 3.0 2.0 <=29 1 1 1 2.5 1.5 2.0 30 - 39 2 2 1
1.5 1.0 40 - 49 2 2 3
1.0 50 - 59 3 3 2 0.5 0.5 >=60 2 2 2 0.0 0.0 <= 29 30 - 39 40 - 49 50 - 59 >= 60 Unknown Average by Gender Unknown 0 0 1
Average Number of Investment Options for Existing Account Balances As of 03/31/2021
5 5 Age Male Female Unknown 4 4 <=29 2 1 5
3 3 30 - 39 2 2 3 40 - 49 3 3 3 2 2 50 - 59 3 3 3 1 1 >=60 3 3 2 0 0 0 0 1 <= 29 30 - 39 40 - 49 50 - 59 >= 60 Unknown Average by Gender Unknown
Male Female Unknown
City of Pasadena Deferred Compensation Plan 98741-01 Reporting Period Ending March 31, 2021 For Plan Sponsor Use Only Page 9 Asset Allocation (As of 03/31/2021)
Your plan's percentage of participants, by age, with balances in Risk / Date Based Investment Options as well as other investment options, is illustrated here. 100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0% <= 29 30 - 39 40 - 49 50 - 59 >= 60 Unknown
Risk / Date Based Investment Options Only 74.42% 56.46% 34.12% 16.19% 7.87% 0.00%
Risk / Date Based Investment Options and 13.95% 20.00% 30.49% 33.81% 26.75% 33.33% Other Investment Options
Other Investment Options Only 11.63% 23.54% 35.39% 50.00% 65.38% 66.67%
City of Pasadena Deferred Compensation Plan 98741-01 Reporting Period Ending March 31, 2021 For Plan Sponsor Use Only Page 10 Asset Allocation (As of 03/31/2021)
91 Participants 105 Participants Age <=29 Age 50 - 59 712 Participants 1% 2% Percentage of Participants with Balances in 1% 1% 1% 10% One Risk / Date Based Investment Option 2% 1% 1% 36% 7% 18% 13%
1% 37% 33% 1% 4% 34% 0% 8% 5% 9% 257 Participants 48 Participants 12% Age 30 - 39 Age >=60
0% 8% 0% 1% 6% 0% 4% 4% 15% 20% 8% 4% 14% 12% 19%
33% 40% 33% 38%
Vanguard Target Retirement 2015 Inv 1% 211 Participants 0 Participants Vanguard Target Retirement 2020 Inv 4% Vanguard Target Retirement 2025 Inv 8% Age 40 - 49 Age Unknown Vanguard Target Retirement 2030 Inv 9% Vanguard Target Retirement 2035 Inv 15% 2% Vanguard Target Retirement 2040 Inv 12% 0% 10% Vanguard Target Retirement 2045 Inv 19% 0% Vanguard Target Retirement 2050 Inv 14% 1% ***There are no balances for this age group*** Vanguard Target Retirement 2055 Inv 12% 1% Vanguard Target Retirement 2060 Inv 5% 20% Vanguard Target Retirement 2065 Inv 0% Vanguard Target Retirement Income Inv 1% Total: 100% 36% 29%
City of Pasadena Deferred Compensation Plan 98741-01 Reporting Period Ending March 31, 2021 For Plan Sponsor Use Only Page 11 Plan Utilization
Your plan's participation rates by age are shown here. Your plan's participation rate equals the total number of participants making regular contributions divided by the total number of eligible employees. Average Participation Rate by Age
100% Participation Rate
As of 03/31/2021, the participation rate for your plan was 80% 73.07%.
The average Defined Contribution plan participation rate for eligible employees is 79.2%.* 60% *Source: PLANSPONSOR Defined Contribution Survey, 2018, Overall Results
40%
Defaulted Participants 20% Your plan has 1,346 employees participating in the plan. As of 03/31/2021, 67 of these employees have not made an active investment election and their contributions are 0% currently being allocated to the plan's default investment <= 29 30 - 39 40 - 49 50 - 59 >= 60 Unknown option.
# of Contributing Participants as of 104 344 403 362 133 0 03/31/2021
12/31/2019 12/31/2020 03/31/2021
City of Pasadena Deferred Compensation Plan 98741-01 Reporting Period Ending March 31, 2021 For Plan Sponsor Use Only Page 12 Plan Utilization
Your plan's average participant contribution amount by age is shown here. Your plan's average participant contribution amount equals the total amount of contributions divided by the total number of contributing participants. Average Participant Contribution Amount by Age Paycheck Contribution Information
As of 03/31/2021, your plan's average participant paycheck $12,000 contribution percentage rate was 0.00% per payroll period.**
As of 03/31/2021, your plan's average participant paycheck $10,000 contribution dollar amount was $440 per payroll period.** **If your plan only allows participant paycheck elections by percent (or amount) the value will reflect as 0% (or $0). $8,000 The average deferral rate among non-highly compensated participants in Defined Contribution plans is 6.0%.*
$6,000 *Source: PSCA 61st Annual Survey, 2017 Plan Experience
$4,000
Average Participant Contribution Amount by Age $2,000 Age 2019 2020 2021 <=29 $3,957 $5,254 $1,474
$0 30 - 39 $5,523 $6,432 $1,761 <= 29 30 - 39 40 - 49 50 - 59 >= 60 Unknown 40 - 49 $6,438 $8,378 $2,354 # of Contributing 50 - 59 $6,479 $10,064 $2,905 Participants as of 104 344 403 362 133 0 03/31/2021 >=60 $2,874 $11,174 $3,052 12/31/2019 12/31/2020 03/31/2021 Unknown $2 $0 $0
City of Pasadena Deferred Compensation Plan 98741-01 Reporting Period Ending March 31, 2021 For Plan Sponsor Use Only Page 13 Participant Details
Your plan's average participant balance and the average number of investment options held by your plan participants are shown here. Average Participant Balance
$140,000
$133,472 $135,183 $120,000 $121,082
$100,000 Number of Investment Options $80,000 As of 03/31/2021, participants in your plan held an average of 2.71 investment options. $60,000 On average, participants hold 5.5 investment options in their Defined Contribution plan account.* $40,000 *Source: PLANSPONSOR Defined Contribution Survey, 2018, Overall Results $20,000
$0 12/31/2019 12/31/2020 3/31/2021
# of Participants with 2,594 2,630 2,642 a Balance
City of Pasadena Deferred Compensation Plan 98741-01 Reporting Period Ending March 31, 2021 For Plan Sponsor Use Only Page 14 Participant Details
Here is a breakdown of your plan's average participant balance by age, by year. Average Participant Balance by Age Your Plan $180,000 Age 2019 2020 2021 $160,000 <=29 $19,976 $24,839 $24,362
$140,000 30 - 39 $53,261 $53,120 $55,148 40 - 49 $113,958 $126,573 $128,233 $120,000 50 - 59 $154,999 $174,114 $177,222
$100,000 >=60 $159,257 $174,027 $175,431 Unknown $12,305 $13,478 $13,573 $80,000 All Ages $121,082 $133,472 $135,183 $60,000
$40,000 Average Participant Account Balance The average participant account balance for year-end 2018 $20,000 was $102,586.*
*Source: PLANSPONSOR Defined Contribution Survey, 2018, Overall $0 Results <= 29 30 - 39 40 - 49 50 - 59 >= 60 Unknown
# of Participants with a Balance as of 129 480 633 698 699 3 03/31/2021
12/31/2019 12/31/2020 03/31/2021
City of Pasadena Deferred Compensation Plan 98741-01 Reporting Period Ending March 31, 2021 For Plan Sponsor Use Only Page 15 Participant Details
Average Account Balance - All Participants As of 03/31/2021
$240,000 $160,000 Age Male Female Unknown $140,000 $200,000 <=29 $19,257 $28,221 $191,675 $120,000 $160,000 30 - 39 $60,147 $49,060 $17,362 $100,000 40 - 49 $149,388 $120,035 $43,624 $120,000 $80,000
$60,000 50 - 59 $211,431 $190,068 $54,471 $80,000 $40,000 >=60 $222,296 $190,148 $123,909
$40,000 $20,000 Unknown $0 $0 $13,573
$0 $0 <= 29 30 - 39 40 - 49 50 - 59 >= 60 Unknown Average by Gender Average Account Balance Your participants have an average balance of approximately $135,183 in this plan. Average Account Balance - Contributing Participants As of 03/31/2021
$280,000 $160,000 Age Male Female Unknown $240,000 $140,000 <=29 $15,939 $26,583 $0 $120,000 $200,000 30 - 39 $64,768 $53,286 $0 $100,000 $160,000 40 - 49 $174,707 $137,028 $0 $80,000 $120,000 $60,000 50 - 59 $239,033 $212,485 $54,471
$80,000 $40,000 >=60 $245,050 $189,866 $0
$40,000 $20,000 Unknown $0 $0 $0
$0 $0 <= 29 30 - 39 40 - 49 50 - 59 >= 60 Unknown Average by Gender Male Female Unknown
City of Pasadena Deferred Compensation Plan 98741-01 Reporting Period Ending March 31, 2021 For Plan Sponsor Use Only Page 16 Participant Details
The number and percentage of participants who have an account balance but have not made a contribution during the reporting period, by age and gender, are illustrated here. Percentage of Participants with an Account Balance and No Current Paycheck Contributions During the Period
100% 45% 40% 80% 35% 30% 60% Non-Contributing Participants 25% 20% 40% 58.74% of your participants with an 15% account balance are currently not 10% contributing to their DC plan. 20% 5%
0% 0% <= 29 30 - 39 40 - 49 50 - 59 >= 60 Unknown Percentage by Gender
Number of Participants with an Account Balance and No Current Paycheck Contributions During the Period
320 750 280 Industry Percentage of 240 Contributing Participants 500 200 On average, only 61% of American 160 workers are saving for retirement.* 120 250 80 *Source: Retirement Confidence Survey, 2019 RCS Fact Sheet #3 40
0 0 <= 29 30 - 39 40 - 49 50 - 59 >= 60 Unknown Total by Gender
Male Female Unknown
City of Pasadena Deferred Compensation Plan 98741-01 Reporting Period Ending March 31, 2021 For Plan Sponsor Use Only Page 17 Contributions
Your plan's contribution amounts by money type are shown here. Contributions by Money Type
$14,000,000
$12,000,000 Contribution Detail
01/01/2019 01/01/2020 01/01/2021 $10,000,000 to to to Money Type 12/31/2019 12/31/2020 03/31/2021
Before Tax $5,965,270 $6,429,650 $1,938,428 $8,000,000 After Tax $0 $0 $0 Roth $345,193 $673,797 $208,027 $6,000,000 Rollover $447,082 $964,430 $444,893 Employer $5,668,678 $5,477,962 $1,211,130 $4,000,000 Total $12,426,224 $13,545,838 $3,802,478
$2,000,000
$0 12/31/2019 12/31/2020 3/31/2021
Before Tax After Tax Roth Rollover Employer
City of Pasadena Deferred Compensation Plan 98741-01 Reporting Period Ending March 31, 2021 For Plan Sponsor Use Only Page 18
Contribution Analysis
Contributions Number of Contributions Number of 01/01/2020 - % of Participants 01/01/2021 - % of Participants Asset Class Investment Option 12/31/2020 Total Contributing 03/31/2021 Total Contributing
Asset Allocation Vanguard Target Retirement 2015 Inv $65,525 0.48% 14 $21,671 0.57% 12 Asset Allocation Vanguard Target Retirement 2020 Inv $500,722 3.70% 76 $116,495 3.06% 54 Asset Allocation Vanguard Target Retirement 2025 Inv $792,762 5.85% 125 $222,338 5.85% 105 Asset Allocation Vanguard Target Retirement 2030 Inv $1,015,689 7.50% 136 $493,126 12.97% 118 Asset Allocation Vanguard Target Retirement 2035 Inv $1,129,389 8.34% 162 $221,300 5.82% 143 Asset Allocation Vanguard Target Retirement 2040 Inv $641,704 4.74% 147 $168,003 4.42% 130 Asset Allocation Vanguard Target Retirement 2045 Inv $1,054,333 7.78% 184 $435,810 11.46% 161 Asset Allocation Vanguard Target Retirement 2050 Inv $607,397 4.48% 121 $254,759 6.70% 111 Asset Allocation Vanguard Target Retirement 2055 Inv $471,467 3.48% 100 $131,125 3.45% 100 Asset Allocation Vanguard Target Retirement 2060 Inv $127,771 0.94% 37 $32,288 0.85% 34 Asset Allocation Vanguard Target Retirement 2065 Inv $39,328 0.29% 12 $11,552 0.30% 11 Asset Allocation Vanguard Target Retirement Income Inv $46,717 0.34% 15 $13,592 0.36% 12 $6,492,804 47.93% $2,122,059 55.81% International Fund American Funds EuroPacific Gr R6 $108,184 0.80% 97 $23,541 0.62% 84 International Fund Invesco Global R6 $134,022 0.99% 87 $38,827 1.02% 81 International Fund MFS International New Discovery R6 $126,874 0.94% 86 $29,996 0.79% 73 International Fund Vanguard International Value Portfolio $152,888 1.13% 87 $30,480 0.80% 67 International Fund Vanguard Total Intl Stock Index Admiral $71,083 0.52% 39 $17,094 0.45% 42 $593,051 4.38% $139,937 3.68% Small Cap BlackRock Russell 2000 Index Coll F $119,395 0.88% 82 $30,791 0.81% 73 Small Cap Vanguard Small Cap Growth Index Instl $354,739 2.62% 157 $106,420 2.80% 145 Small Cap Victory Integrity Small Cap Value R6 $125,266 0.92% 101 $33,773 0.89% 86 $599,399 4.42% $170,984 4.50% Mid Cap BlackRock Mid Cap Equity Index - Coll F $140,735 1.04% 88 $35,114 0.92% 78 Mid Cap MFS Mid Cap Growth R6 $215,381 1.59% 124 $65,603 1.73% 117 Mid Cap Wells Fargo Spec Md Cp Val R6 $120,161 0.89% 88 $22,850 0.60% 69 $476,276 3.52% $123,567 3.25% Large Cap Becker Value Equity Institutional $12,254 0.09% 118 $0 0.00% 0 Large Cap BlackRock Equity Index - Collective F $770,369 5.69% 300 $207,162 5.45% 259 Large Cap MFS Growth R6 $661,710 4.88% 243 $173,666 4.57% 208 Large Cap MFS Value R6 $253,029 1.87% 134 $65,731 1.73% 111 $1,697,363 12.53% $446,559 11.74% Bond BlackRock US Debt Index Fund Coll F $57,325 0.42% 38 $13,482 0.35% 31 Bond DFA Inflation-Protected Securities I $74,764 0.55% 25 $19,463 0.51% 25 Bond Metropolitan West Total Return Bond Plan $161,175 1.19% 79 $67,922 1.79% 64 $293,263 2.16% $100,867 2.65% Fixed Putnam Stable Value Fund: 20bps $3,262,899 24.09% 531 $642,526 16.90% 434 $3,262,899 24.09% $642,526 16.90% Brokerage Schwab SDB Sweep Program $90,886 0.67% 9 $42,265 1.11% 7 Brokerage Schwab SDB Sweep Program Roth $39,898 0.29% 3 $13,713 0.36% 3 $130,784 0.97% $55,978 1.47%
City of Pasadena Deferred Compensation Plan 98741-01 Reporting Period Ending March 31, 2021 For Plan Sponsor Use Only Page 19 Grand Total: $13,545,838 100.00% $3,802,478 100.00% *Your plan's default investment election(s).
City of Pasadena Deferred Compensation Plan 98741-01 Reporting Period Ending March 31, 2021 For Plan Sponsor Use Only Page 20 Contribution Analysis
Total Paycheck Contributions From 01/01/2021 to 03/31/2021
$450,000 $2,000
$400,000 Average Contributions $350,000 $1,600
$300,000 $1,200 Your participants contribute an average $250,000 of $2,352 per year.* $200,000 $800 *Average of total contributions during the $150,000 reporting period.
$100,000 $400
$50,000
$0 $0 <= 29 30 - 39 40 - 49 50 - 59 >= 60 Unknown Average by Gender
Total Rollover Contributions From 01/01/2021 to 03/31/2021
$500,000 $100,000 $450,000 $400,000 $80,000 $350,000 $300,000 $60,000 $250,000 $200,000 $40,000 $150,000 $100,000 $20,000 $50,000 $0 $0 <= 29 30 - 39 40 - 49 50 - 59 >= 60 Unknown Average by Gender Male Female Unknown
City of Pasadena Deferred Compensation Plan 98741-01 Reporting Period Ending March 31, 2021 For Plan Sponsor Use Only Page 21 Contribution Analysis (As of 03/31/2021)
Paycheck Contributions per Pay Period Paycheck Contributions per Pay Period As a Percentage of Salary In Dollars
# of # of Percent Participants % of Total Dollars Participants % of Total
0% 0 0.00% $0 - 25 106 13.38% 1% 0 0.00% $26 - 50 0 0.00% 2% 0 0.00% $51 - 75 41 5.18% 3% 0 0.00% $76 - 100 75 9.47% 4% 0 0.00% $101 - 125 29 3.66% 5% 0 0.00% $126 - 150 40 5.05% 6% 0 0.00% $151 - 175 0 0.00% 7% 0 0.00% $176 - 200 0 0.00% 8% 0 0.00% $201 - 225 0 0.00% 9% 0 0.00% $226 - 250 0 0.00% 10+% 0 0.00% >$250 0 0.00%
Please Note: There are 1,034 eligible, employed participants in your plan who have not elected a paycheck contribution percentage / amount.
Average Paycheck Contribution
The average deferral rate among non-highly compensated participants in Defined Contribution plans is 6.0%.* *Source: PSCA 61st Annual Survey, 2017 Plan Experience
City of Pasadena Deferred Compensation Plan 98741-01 Reporting Period Ending March 31, 2021 For Plan Sponsor Use Only Page 22 Distributions
An overview of your plan's distribution activity is shown here, including distribution reasons, number of distributions and percentage of rollovers / transfers versus payment to self. Reasons for Distribution As of 03/31/2021 Industry Average
Percentages are based on dollar amount of distributions. 49.6% of plans are providing education to participants taking a pre-retirement or retirement distribution beyond the required forms.* 1% 3% 3% *Source: PSCA 61st Annual Survey, 2017 Plan Experience 33%
Comparing Common Distribution Reasons As of 03/31/2021 Percentages are based on dollar amount of distributions. Rollovers / Transfers Payments to Self 60% 100%
Death Benefit De Minimis In-Service Retirement Separation of Service Other 80%
60% Percentage of Distributions Distribution Amounts 40% Rolled Over / Number Amount Transferred 20% 01/01/2021 to 03/31/2021 187 $6,200,378 61.70%
0% 01/01/2020 to 12/31/2020 614 $19,412,633 39.45% Retirement Separation of Service In-Service 01/01/2019 to 12/31/2019 633 $19,675,182 59.22% 66.17% 33.83% 70.07% 29.93% 0.00% 100.00%
City of Pasadena Deferred Compensation Plan 98741-01 Reporting Period Ending March 31, 2021 For Plan Sponsor Use Only Page 23 Distributions (From 01/01/2021 to 03/31/2021)
Full Withdrawal Rollover IRA Summary by Top Providers by Number of Participants
3 7.5
2 Participant Distributions 5.0
The top providers represent 1 70.00% of total participants 2.5 withdrawn and rolled to an IRA.
0
NFS JPMS 0.0
Other AMERITRADE CORP EDWARD JONES FIRST CLEARING CHARLES SCHWAB Top Providers Full Withdrawal Rollover IRA Summary by Top Providers by Dollars $2,400,000 $3,200,000
$2,000,000 $2,800,000 $1,600,000 $2,400,000 Percentage of Assets $2,000,000 $1,200,000 $1,600,000 The top providers represent $800,000 86.49% of total assets $1,200,000 $400,000 withdrawn and rolled to an $800,000 IRA. $0 $400,000
NFS JPMS $0
Other AMERITRADE CORP EDWARD JONES FIRST CLEARING CHARLES SCHWAB Top Providers
City of Pasadena Deferred Compensation Plan 98741-01 Reporting Period Ending March 31, 2021 For Plan Sponsor Use Only Page 24 Distributions
The total amount of all plan participant rollovers, contributions and withdrawals made, by month, are reflected here. Total Contribution and Withdrawal Summary*
$3,200,000 Payroll $2,800,000 Month Rollover Contributions Withdrawals
Apr 2020 $394,192 $1,032,289 $1,146,445 $2,400,000 May 2020 $5,091 $1,004,657 $1,741,317 $2,000,000 Jun 2020 $34,575 $991,290 $1,925,224 Jul 2020 $37,580 $1,007,083 $2,242,998 $1,600,000 Aug 2020 $181,929 $1,009,230 $1,437,371
$1,200,000 Sep 2020 $11,161 $1,022,605 $1,479,308 Oct 2020 $15,616 $1,063,735 $1,508,187 $800,000 Nov 2020 $55,698 $1,059,445 $1,713,197
$400,000 Dec 2020 $0 $1,077,692 $1,229,963 Jan 2021 $4,207 $1,087,877 $2,771,724 $0 Feb 2021 $11,495 $1,039,600 $2,987,582 Mar 2021 $621,286 $1,038,014 $887,983 Apr 2020May 2020Jun 2020Jul 2020Aug 2020Sep 2020Oct 2020Nov 2020Dec 2020Jan 2021Feb 2021Mar 2021
Rollover Payroll Contributions Withdrawals
*Monthly totals may not exactly match the amounts for the reporting periods on the Executive Summary pages due to any retroactive changes or corrections made.
City of Pasadena Deferred Compensation Plan 98741-01 Reporting Period Ending March 31, 2021 For Plan Sponsor Use Only Page 25 Distributions (From 01/01/2021 to 03/31/2021)
Hardship Withdrawals (in Dollars) Number of Participants Taking Hardships
$6 6
$4 4
$2 2 ***There are no hardships*** ***There are no hardships*** $0 0
($2) -2
($4) -4
($6) -6 <= 29 30 - 39 40 - 49 50 - 59 >= 60 Unknown <= 29 30 - 39 40 - 49 50 - 59 >= 60 Unknown
Average Hardship Withdrawals (in Dollars)
$6
$4
$2 ***There are no hardships*** $0
($2)
($4)
($6) <= 29 30 - 39 40 - 49 50 - 59 >= 60 Unknown Male Female Unknown
City of Pasadena Deferred Compensation Plan 98741-01 Reporting Period Ending March 31, 2021 For Plan Sponsor Use Only Page 26 Loans
Here is a breakdown of your plan's total outstanding loan balance, newly issued loans and loans that have defaulted during each period. The number of plan participants with loans and the average loan balance are also shown. Total Outstanding Loan Balance
$7,000,000 $6,774,440
$6,000,000 Loan Details $6,014,993 $6,095,998 As of 03/31/2021, 473 participants in your plan had an outstanding $5,000,000 loan. The average loan balance of all outstanding participant loans for your plan was $12,888. $4,000,000 As of 03/31/2021, 18.00% of your plan participants had an outstanding loan. $3,000,000 For plans that do offer loans, an average of 13.5% of plan $2,000,000 participants have an outstanding loan.*
*Source: PLANSPONSOR Defined Contribution Survey, 2018, Overall $1,000,000 Results
$0 12/31/2019 12/31/2020 3/31/2021
# of Loans 532 482 473
New Loans Defaulted Loans Number Amount Number Amount 01/01/2021 to 03/31/2021 28 $704,195 4 $49,254
01/01/2020 to 12/31/2020 103 $2,135,096 12 $136,372
01/01/2019 to 12/31/2019 159 $3,069,867 16 $204,600
City of Pasadena Deferred Compensation Plan 98741-01 Reporting Period Ending March 31, 2021 For Plan Sponsor Use Only Page 27
Voice Response System
01/01/2019 01/01/2020 01/01/2021 Activity Detail to to to Activity Summary 12/31/2019 12/31/2020 03/31/2021 Totals 2021 Average Distinct Users 84 81 96 Opt to Client Service Representative 1,144 1,237 134 Total Calls 1,898 2,012 184 16
Account Inquiries Account Balance 27 35 4 Allocations 3 19 2 Fund Values 0 1 1 Loans 198 158 8 Request Statements 2 0 0 Transaction History 11 21 1 2020 Totals: 241 234 16 10 Account Changes Allocations 0 3 0 Loan Requests 10 7 0 Totals: 10 10 0
234
2019 10
241
Account Inquiries Account Changes
City of Pasadena Deferred Compensation Plan 98741-01 Reporting Period Ending March 31, 2021 For Plan Sponsor Use Only Page 28 Services Offered
Available Today / Available Today / Administrative Services Information Administrative Services Information
Years on System 8.97 Loans Available Yes Online Loan Initiation Yes Online Statements Yes Loan File Feeds Yes Beneficiary Recordkeeping Yes Automatic Enrollment No Online Enrollment Yes Default Percentage N/A Deferral Recordkeeping Yes Auto Escalation Percentage N/A Auto Escalation Percentage Maximum N/A To-Do List No
Online Distributions Yes
Advisory Services No
SecureFoundation No
IRA Rollover Solution Yes
Approval Services Yes
QDIA Notices No
City of Pasadena Deferred Compensation Plan 98741-01 Reporting Period Ending March 31, 2021 For Plan Sponsor Use Only Page 29 Glossary of Terms
Term Description
Account Reduction Loan Balance The total amount of all active, outstanding loans held by plan participants. Loans that have been offset or deemed as a distribution are not included.
Active Participants with Balances Plan participants who are actively employed and have a balance.
Contributions Amounts deposited for all money types, both regular payroll and single rollovers. Assets that are added to the plan during conversion to our recordkeeping system are not included.
Defaulted Loan A loan that is not current on all loan assessments, which are due by the prior quarter-end; when this occurs, the loan will default as of the next quarter-end. The outstanding amount with accrued interest as of the default date will be tax-reported for the calendar year in which it defaulted.
Distributions All full and partial withdrawals for every disbursement reason and tax reason code. In this report, the five most common distribution types are illustrated individually; any other types are combined into the “Other” category.
Eligible Employees Employees who have met age and service requirements and are actively employed. The count is based upon employee information that has been transmitted to or input by the plan on the recordkeeping system.
Funds in Plan with a Balance Count of funds or investment options within the plan’s fund lineup that have balances greater than $0.01 are included. This includes any employer stock awaiting purchase and self-directed brokerage products, as applicable.
Loan Balance (Average) The average of all outstanding loan balances in the plan. This includes defaulted loan balances, but does not include offset or deemed loan balances.
City of Pasadena Deferred Compensation Plan 98741-01 Reporting Period Ending March 31, 2021 For Plan Sponsor Use Only Page 30 Glossary of Terms
Term Description Net Cash Flow The plan’s total contributions less total distributions. Forfeited amounts and loan balances are not included in this calculation.
Participant Balance (Average) The average balance of all actively employed and terminated plan participants. Only participant balances that are $0.01 or greater are included. This balance does not include any outstanding loan amounts.
Participant Contribution Amount The total amount of plan contributions for all money types divided by the number of (Average) contributing participants, both currently employed or employed during the reporting period.
Participant Paycheck Contribution For plans that utilize our deferral recordkeeping services, this is the average Dollar Amount (Average) amount of all dollar amount deferrals that have been established by actively employed participants for any held employee money types during the reporting period. Only participant deferral amounts that are greater than $0.01 are included.
Participant Paycheck Contribution For plans that utilize our deferral recordkeeping services, this is the average rate Percentage Rate (Average) of all percentage deferrals that have been established by actively employed participants for any held employee money types during the reporting period. Only participant deferral amounts that are greater than 1% are included.
Participants Contributing The number of actively employed plan participants who have regular payroll contributions during the reporting period.
City of Pasadena Deferred Compensation Plan 98741-01 Reporting Period Ending March 31, 2021 For Plan Sponsor Use Only Page 31 Glossary of Terms
Term Description Participants with Loan Balance The number of individual plan participants who have an outstanding loan balance. This includes participants with defaulted loans, but does not include participants with offset or deemed loans.
Participation Rate The percentage of the eligible employees participating in the plan; this figure is derived by dividing the total number of contributing participants by the total number of eligible employees. The rate is based upon participant information that is transmitted to or input by the plan on the recordkeeping system.
Payments to Self A distribution that is taken for any qualifying reason in which the distribution proceeds are made payable directly to the participant.
Plan Asset Balance A rollup of all contributions and deposit types, transfers in / out, interest and dividends, change in value, fees and withdrawals, and forfeiture assets.
Rollovers A distribution that is taken for a qualifying reason in which the distribution proceeds are rolled over into an eligible plan, traditional IRA or Roth IRA.
Terminated Participants with Plan participants who are no longer employed, but have a balance. Balances
Total Participating The number of eligible participants actively contributing to and participating in the plan. The rate is based upon participant information that is transmitted to or input by the plan on the recordkeeping system.
City of Pasadena Deferred Compensation Plan 98741-01 Reporting Period Ending March 31, 2021 For Plan Sponsor Use Only Page 32 Glossary of Terms
Term Description Total Plan Asset Balance A rollup of all contributions and deposit types, transfers in / out, interest and dividends, changes in value, fees and withdrawals, and forfeiture assets plus the total amount of all active, outstanding participant loans.
Transfers A distribution that is taken for a qualifying reason in which the proceeds are disbursed as a permissible plan transfer.
Empower Retirement refers to the products and services offered in the retirement markets by Great-West Life & Annuity Insurance Company (GWL&A) , Corporate Headquarters: Greenwood Village, CO; Great-West Life & Annuity Insurance Company of New York, Home Office: NY, NY; and their subsidiaries and affiliates. The trademarks, logos, service marks, and design elements used are owned by their respective owners and are used by permission.
Empower Retirement Advisory Services are offered by Advised Assets Group, LLC (AAG), a federally registered investment adviser and wholly owned subsidiary of Great-West Life & Annuity Insurance Company. More information about AAG can be found at www.adviserinfo.sec.gov.
City of Pasadena Deferred Compensation Plan 98741-01 Reporting Period Ending March 31, 2021 For Plan Sponsor Use Only Page 33 Rollover Distribution Activity 98741-01 Q1_2021 Termed Participant Actions % assets Assets Participants Average Account Balance $88,174 Average Rollover Balance $220,200 Allocation Of Total Assets $7,847,464 89 Stay in Plan 33% $2,570,006 15 Cash Outs 17% $1,313,853 56 Rollovers to External Provider 50% $3,922,679 16 Rollover to Empower IRA 0.4% $28,682 1 Rollover to Empower Plan 0.2% $12,245 1 Top 10 External Rollover Destinations Charles Schwab $2,024,161 4 JP Morgan Chase $356,030 1 First Clearing $352,168 1 Pershing $346,670 2 Thrivent $306,475 1 National Financial Services $270,704 2 Fidelity $133,155 1 TD Ameritrade $49,141 1 Edward Jones $41,529 1 Voya $23,319 1 Average Roll In Balance $60,734 Total Roll ins $546,607 9