In response to questions posed to the City by each of you regarding the ICMA-RC plan, the City provides the following:
The City has been exhaustive in its efforts to respond to Mr. Hartzman’s queries and concerns about ICMA-RC investment plan options.
More like deceitful.
City staff, including City Manager Jim Westmoreland, Assistant City Manager Mary Vigue, Budget Director Larry Davis, Finance Director Rick Lusk and Human Resources Director Connie Hammond have each spent time and dedicated staff to reviewing Mr. Hartzman’s concerns.
With zero documentation of the reviews.
The City also engaged with AON consulting to review the information provided by Mr. Hartzman.
Which the City won't release any documentation on.
In addition, the City has responded to numerous public records requests for information, emails, and records pertaining to the ICMA-RC plan.
For good reason
as the City failed to produce requested documentation
provided by City employees
in violation of public records law.
At the core of Mr. Hartzman’s concerns are his focus on the City’s offer of lower cost retirement investment options for employees.
This is the first admission by the City
that retirement plan costs are a concern
Fund options in the two deferred compensation plans offered to City employees change from time to time based on fund performance with several changes made in 2015. The City’s Deferred Compensation Committee has replaced two funds being dropped by ICMA-RC with two low expense index funds offered by Vanguard, in addition to other fund replacements.
It took two years to get it done.
Overall, the City’s fund lineup (attached, with annual performance) for the ICMA-RC plan (457/401a) [now] includes several low expense index funds along with growth, value and other [relatively very expensive and under-performing] types of funds similar to the Prudential plan (NC 401k) in which employees also have the option to participate. Included in this response is the City’s current fund lineup for its two deferred compensation plans.
The City denies any and all insinuations that its staff has been somehow “influenced” by ICMA-RC.
Furthermore, the City feels that it [now] provides low cost, affordable options for its employees and provides access to educational opportunities to provide them with the information they need to make informed decisions about their retirement plans.
The educational opportunities are sales pitches by ICMA-RC
for more expensive, lower performing 'investment strategies'
of which the city is unaware of the actual returns of,
and hasn't/doesn't/won't/refused to ask for.
The public records requests in the PIRT system from Mr. Hartzman hold answers to many [meaning not all] of the questions he recently posed.
Meaning the City didn't answer all the questions,
especially the one about the $400,000 surrender charge
the managed fund returns,
the stable value fund and the retirement meeting sales pitches
for more expensive and lower performing profit makers.
There was one relatively under utilized,
under recommended low cost fund
which was included within my recommendations.
Saying "options" with a plural is misleading.
Now they have better choices.
The target date fund costs could be 75% lower.
The stable value fund appears to still be overpriced.
The 3,000 members of the Greensboro Team are the most crucial asset to the Greensboro community and in no way does City leadership seek to deny those employees with affordable, reliable retirement options for those individuals who choose to participate.
In closing, the City continues to assert that it has heard Mr. Hartzman’s concerns and provided time, records and attention to responding to those concerns.
At this time, the City considers the matter closed.
Donnie Turlington, APR, Director of Communications and Marketing
Office of the City Manager
City of Greensboro"
First they ignore you,
then they ridicule you,
then they fight you,
and then you win.
The City provided the performance numbers of the funds being replaced,
but not the performance numbers for index funds going in
But they did provide the expense ratios;
Vanguard Mid Cap Index Fund Expense Ratio = 0.10%
1.05% less per year
On $10 million, it's $105,000 per year difference in cost,
not counting actual performance,
which appears to have been less than the index fund,
otherwise why replace it?
To be continued...