The officers of the Charles County Sheriff’s Department have, to their understanding, contributed the bulk of the money currently invested in the county deferred benefits program. Because most of the program’s participants are their members, the local law enforcement union, Fraternal Order of Police – Local 24 (FOP), felt it should have been consulted when changes to the program’s vendors were first considered.
In August of last year, the local FOP heard that the county Human Resources (HR) Department wanted one deferred benefits provider instead of the current three. The FOP leadership became concerned. Their members’ investments with Hartford Financial, one of the county’s current investment vendors, are growing at a satisfactory rate of 15% and they are hesitant to trust that another company’s funds will give the same or better rate of return.
They are also unwilling to give up the service relationship they have with the Hartford representative. Because the financial advisor from Hartford works on commission, he made himself available to the officers at their stations, during their shifts. He took the time to explain the complicated investment process and gave seemingly good financial advice, so the officers gave Hartford their business.
An FOP contact told The Bay Net that their leadership moved quickly to put representation on the selection committee once they knew it existed. The committee, however, had been meeting for several months. It seemed to the FOP that by the time their representative joined the committee, Hartford Financial was already “out the door”.
The project began last April under the direction of the former HR director. The initial committee consisted of representatives from county Information Technology, Payroll and Legal Departments. Stephen Brayman assumed responsibility for the project when he became HR Director in August 2006.
At the last Commissioners’ Board meeting, HR Director Stephen Brayman and Bolton Partners’ Managing Director Carol Boykin presented a vendor recommendation. Investment consulting group Bolton Partners, Inc. was hired to analyze ten bids from investment firms. For a fee of $20,000 Bolton examined each firm’s bid and practices. Bolton selected three finalists for the committee to consider: AIG VALIC, ICMA-RC, and Lincoln Financial.
Of those three, Bolton and the selection committee recommended the non-profit International City/County Management Association — Retirement Corporation (ICMA-RC). Ms Boykin provided the commissioners with a Power Point summary of her firm’s report on the review/selection process.
According to the presentation, ICMA-RC had the lowest fee structure and strongest performance of all the firms reviewed. The firm also met Bolton’s criteria for experience with 457(b) programs, absorbing the costs of leaving the county’s former vendors, strong customer service from salaried representatives, efficient record keeping, and mutual fund options.
After the presentation, the commissioners seemed particularly concerned that the project looked close to completion without updates previously appearing before them. The Board asked the Boykin and Brayman what the deferred benefits program stood to gain from the change.
Ms Boykin pointed that ICMA-RC charged no administrative fees for their services. This was a large point in their favor. All of the current vendors have fees that come out of the employee participant’s pocket. It’s interesti