FROM: James D. Herberg, General Manager
Originator: Lorenzo Tyner, Assistant General Manager
SUBJECT:
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SECTION 115 TRUST PENSION ACCOUNT CONTRACT AWARD
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GENERAL MANAGER'S RECOMMENDATION
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RECOMMENDATION:
A. Approve a Professional Services Agreement to Public Agency Retirement Services to establish and oversee Orange County Sanitation District's Internal Revenue Service (IRS) Code Section 115 pension trust administration and investment management services;
B. Adopt Resolution No. OC SAN 21-17 entitled: "A Resolution of the Board of Directors of Orange County Sanitation District Adopting a Post-Employment Benefit Trust Agreement with Public Agency Retirement Services; and Authorizing Officers to Execute Documents and Agreements" as amended; and
C. Authorize staff to make an initial investment of $15 million into the Section 115 pension trust.
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BACKGROUND
The Orange County Sanitation District (OC San) provides pension benefits to its employees through the Orange County Employee Retirement System (OCERS) at an annual cost of approximately $15 million. Staff continually examines strategies to support and minimize these costs. After an initial presentation, the Administration Committee directed staff to provide additional information and analysis of options to address funding these benefits ranging from advance payments to implementing an Internal Revenue Service Code Section 115 Trust Pension Account (115 Trust).
Staff researched and presented different options for Board consideration. All options involve moving funds from OC San's investment portfolio to a different investment vehicle with an opportunity to obtain higher yields. Once contributed into one of these strategies, fund use is limited to pension costs. The Board directed OC San staff to move forward with implementing a Section 115 Trust.
At its November 10, 2021, meeting, the Administration Committee approved a motion to recommend to the...
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