Under the "Bond" catagory, Greensboro's participants are currently invested in
VT PIMCO Total Return Intermediate-Term Bond - Expense Ratio = 0.71%
Under the "Bond" catagory, Greensboro's participants could be invested in the following funds Winston Salem already offers;
Vanguard Short-Term Inv-Grade Short-Term Bond - Expense Ratio = 0.10%
Vanguard Intermed-Term Inv-Grd Corporate Bond - Expense Ratio = 0.10%
Under the "Balanced" catagory, Greensboro's participants are currently offered nothing.
Winston Salem's "Balanced" catagory offering;
Vanguard Wellington Admiral Moderate Allocation - Expense Ratio = 0.18%
Under the "U.S. Stock" catagory, Greensboro's participants are currently invested in
VT Vantagepoint Equity Income Large Value - Expense Ratio = 0.78%
VT Invesco Diversified Div Large Value - Expense Ratio = 0.63%
Victory Diversified Stock A Large Blend - Expense Ratio = 1.08%
Vanguard 500 Index Signal Large Blend - Expense Ratio = 0.05%
Under the "U.S. Stock" catagory, Greensboro's fiduciaries could eliminate the VT and Victory funds and participants could be invested in the following funds Winston Salem already offers via ICMA-RC;
Vanguard Equity Income Admiral Large Value - Expense Ratio = 0.21%
Vanguard 500 Index Signal Large Blend - Expense Ratio = 0.05%
Under the "Mid-Cap" catagory, Greensboro's fiduciaries could eliminate their current lineup and participants could be invested in the following funds Winston Salem already offers via ICMA-RC;
Greensboro's current "Mid-Cap" lineup;
Artisan Mid Cap Value Inv22 Mid-Cap Value - Expense Ratio = 1.20%
Goldman Sachs Mid Cap Value A Mid-Cap Value - Expense Ratio = 1.14%
T Rowe Price® Mid-Cap Growth Mid-Cap Growth - Expense Ratio = 1.05%
VT AMG TimesSquare Mid Cap Gr Mid-Cap Growth - Expense Ratio = 1.27%
Columbia Acorn Z Mid-Cap Growth - Expense Ratio = 0.82%
Winston Salem's current "Mid-Cap" lineup with invested funds;
Vanguard Mid-Cap Index Signal Mid-Cap Blend - Expense Ratio = 0.10%
Under the "Small-Cap" catagory, Greensboro's fiduciaries could eliminate their current lineup and participants could be invested in the following funds Winston Salem already offers via ICMA-RC;
Greensboro's current "Small-Cap" lineup;
VT AllianzGI NFJ Sm-Cap Val Small Value - Expense Ratio = 1.02%
VT T Rowe Price® Sm-Cap Value Small Blend - Expense Ratio = 1.24%
Royce Value Plus Service Small Growth - Expense Ratio = 1.45%
Winston Salem's current "Small-Cap" lineup with invested funds;
Vanguard Small-Cap Index Sig Small Blend - Expense Ratio = 0.10%
Under the "International/Global Stock" catagory, Greensboro's fiduciaries could eliminate their current lineup and participants could be invested in the following funds Winston Salem already offers via ICMA-RC;
Greensboro's current "International/Global Stock"lineup;
Templeton World A World Stock - Expense Ratio = 1.05%
VT Fidelity Diversified Intl Foreign Large Blend - Expense Ratio = 0.95%
Winston Salem's current "International/Global Stock" lineup includes;
Dodge & Cox Global Stock World Stock - Expense Ratio = 0.65%
An alternative not in Winston's "International/Global Stock" current lineup;
Vanguard FTSE All-World ex-US Index Fund Admiral - Expense Ratio = 0.15%
As ICMA-RC currently charges Winston Salem's $19,933,124 an extra 0.34% on top of the expenses listed above, the extra fee for Greensboro's $87,898,314 should be substantially less, should ICMA members Jim Westmorland and Mary Vigue choose to negotiate and ask ICMA-RC to quote a price, which from what I have been told so far, they have neglected to do.
ICMA-RC, located in the same Washington D.C. building as ICMA, was created by the International City/County Management Association (ICMA) in 1972. "its 10-member board includes four current or retired government officials and the executive director of the ICMA (as of 9/22/2010), who also is a retired government official. The ICMA-RC pays the ICMA a licensing fee...", like Nationwide pays the National Association of Counties for the same thing only different.
According to ICMA-RC's 2012 IRS form 990, Robert O'neal, ICMA's Executive Director, serves as a paid director of ICMA-RC.
San Antonio’s Assistant City Manager and ICMA member Frances Gonzalez serves on ICMA-RC's board. San Antonio has $254,377,728 of City employee funds with ICMA-RC.
Decatur, Georgia’s City Manager and ICMA member Peggy Merriss serves on ICMA-RC's board as Decatur offers an overpriced ICMA-RC 457 retirement plan.
Previous attempts to save City of Greensboro 457 plan participants money;
From: Zack Matheny
Date: Tue, Oct 14, 2014 at 11:38 AM
Subject: Re: Council Request- ICMA-RC
To: "Vigue, Mary"
Cc: "Hammond, Connie" "Carruthers, Tom" "Lusk, Rick"
I spent over 8 years in this industry as a professional and have invested in mutual funds since I was in high school.
I would like to set a meeting with you, and anyone else that oversees this account.
There are some changes that could be made and their response was underwhelming.
Please, let me know when you can meet.
from: George Hartzman
to: "Westmoreland, Jim", Rick Lusk, "Hammond, Connie", "Vigue, Mary", bcc: Nancy Vaughan,
Zack Matheny, Tony Wilkins, Katie Cashion, donnie.turlington, "Healy, Sarah", "Clark, Jim (Legal)", "Jamiah.Waterman, Thomas.Carruthers, marlene.druga, Mike Barber, "Doyle, Steven",
Jeff Gauger, Amanda Lehmert, Joe Killian, "Craver, Richard N.", "abuzuaiter, Jeffrey Sykes, "McCollough, Mary", sharon.bell, "Schwartz, Sue, "Davis, Larry, Andy Scott, "Fischer, Adam",
"Harris, Barbara, "Wilson, Christian A (P&R)"
date: Wed, Oct 22, 2014 at 9:24 AM
subject: On October 21, 2014's ICMA 457 plan meeting with Mayor Vaughan and Mary Vigue
On Tuesday, I met with Greensboro Assistant City Manager Mary Vigue and Nancy Vaughan in the Mayor's office.
Mary, a member of ICMA, had met with a representative of ICMA-RC on Monday.
Mary became confrontational from the outset of the meeting, and seemed to be advocating for ICMA's justifications of Greensboro's current 457 plan fees as opposed to what's in the best interests of Greensboro's employees invested in the plan.
Mary cited a hidden asset based fee in Winston Salem's fee structure to assert Winston Salem doesn't pay less than Greensboro.
After adding in the $55,417 on the fifth page (53) of the attached Winston Salem PDF, which is clearly misleading on the part of ICMA, as the total at the bottom of the page doesn't reflect the top number, to the $94,097 on the first (49), I came up with
$94,097 + $55,417 = $149,514 total annual fees all participants are paying.
There are 1,029 participants in Winston.
$149,514 / 1,029 = $145.30 per participant for Winston Salem.
Both the attached 5 and 6 page Greensboro and Winston Salem fee document extracts are as of the first quarter of 2014.
Greensboro's plan is charged annualized total of $741,132 on the first page of the attached "Greensboro fee pages".
$741,132 total annual fees participants are paying.
There are 2,781 participants in Greensboro.
$741,132 / 2,781 = $266.50 per participant for Greensboro.
$266.50 per participant for Greensboro is more than $145.30 per participant for Winston Salem.
$121.20 more per participant in Greensboro than Winston.
Mary Vigue objected to the idea of considering the plan's fees per participant and asserted that Winston paid more during the meeting on several occasions.
Greensboro's VT Vantagepoint Equity Income "Large Value Fund" (page 67), which ICMA owns, which is inherently a conflict of interest, charges a total of 0.78% on $1,609,652 in Greensboro's plan.
Winston Salem's Vanguard Equity Income Admiral "Large Value Fund" (page 50), which is essentially the same thing Greensboro's Equity Income Large Value Fund only different, charges a total of 0.21% on $2,011,041. Adding in the 0.34% ICMA charges Winston on the back end, I found the total annual charge for Winston's participants to be 0.55%.
Greensboro's 0.78% is larger than Winston's 0.55%.
Winston Salem's Mid and Small Cap index funds (page 50), where most of the participant's money is invested, is charged a total of 0.44% by ICMA. (0.10% + 0.34%)
Greensboro's Mid and Small Cap funds total annual ICMA charges (pages 67 and 8) are 1.20%, 1.14%, 1.09%, 1.05%, 1.27%, 0.82%, 1.02%, 1.24% and 1.45%.
It's my understanding Mary did not ask for or inquire about any possible fee reductions during her meeting with ICMA-RC's representative on Monday, but instead appears to have consumed a great deal of ICMA cool aid to regurgitate to the benefit of ICMA, as opposed to proactively looking out for what the best course of action was for Greensboro's employees.
Mary asserted that nothing needed fixing in Tuesday's meeting with Mayor Vaughan and I.
Mary cited Rick Lusk, Connie Hammond, Larry Cooper and herself as experts who agreed that nothing needed to be done with the ICMA 457 plan's fee structure and fund line up in the face of an opportunity to leave more money in the retirement accounts of City of Greensboro participants.
Please confirm Mary's assertion that Rick Lusk, Connie Hammond and Larry Cooper found no need to look into potential savings in Greensboro's 457 plan fees.
Trying to do the right thing in this case has become much more difficult than it should have been.
Inaction has occurred for more than 12 months since these issues were initially raised.
Let's give Greensboro's 457 participants a raise and more money to spend locally in retirement by lowering their fees, which are demonstrably too high and retarding the prospect of wealth creation for 2,781 employees.
This email should not have been necessary.
from: Tony Wilkins
to: George Hartzman, "Westmoreland, Jim", Rick Lusk, "Hammond, Connie", "Vigue, Mary"
cc: nancy.vaughan, yvonne.johnson, mike.barber, marikay.abuzuaiter, sharon.hightower, jamal.fox, zack.matheny, nancy.hoffman, tony.wilkins
date: Wed, Oct 22, 2014 at 2:57 PM
subject: RE: On October 21, 2014's ICMA 457 plan meeting with Mayor Vaughan and Mary Vigue
Please tell me, in language that I can understand,
if George Hartzman’s claims in this e-mail are true.
Greensboro City Council
from: George Hartzman
to: "Vigue, Mary"
date: Thu, Oct 30, 2014 at 12:14 PM
subject: Fund Lineup
Any word on the fund line up we spoke of and you said you would inquire about?
From: George Hartzman
to: "Westmoreland, Jim", "Vigue, Mary", "Hammond, Connie", Nancy Vaughan,
"nancy votehoffmann, Zack Matheny, Rick Lusk
date: Wed, Nov 5, 2014 at 10:34 PM
subject: Fwd: Response to PIRT # 4006
Mary told me on Monday night, after telling both Nancy Vaughan and myself on October 21st that Mary would personally contact ICMA-RC, that she had been in touch with HR about getting the fund list of alternative investments with lower costs from ICMA-RC.
I spoke with ICMA-RC Deputy General Counsel Angela C. Montez this afternoon, who told me municipalities have the lattitude to negotiate fees and switch funds as fiduciaries deem prudent and in the best interests of participants.
Mary said otherwise. Jim doesn't seem to have a problem with it, or he doesn't know and should.
ICMA members Mary and Jim appear to be acting in the best interests of ICMA-RC.
Mary incorrectly informed both Mayor Vaughan and I that Winston Salem was paying less per participant on October 21st, acting as an overt advocate for ICMA-RC after meeting with an ICMA-RC rep the day before.
It's been about two weeks since Mary said she would personally get with ICMA-RC on the fund list, and two days since she said she directed HR to do so.
The information request attached suggests otherwise.
Nancy Hoffmann and Zack know what a fund list is.
To my knowledge, no one at the City has made any effort to save Greensboro's employees money within the 457 plan, despite more than a year's worth of effort on my part.
ICMA members Mary and Jim don't seem to mind ICMA-RC skimming off of Greensboro's employees.
It seems ICMA members Mary and Jim are acting in the best interests of ICMA-RC.
I would like to hear some good news on saving Greensboro's 457 plan participants some money by the close of business tomorrow.
Those names above are the only recipients of this email.
At this point, ICMA members Mary and Jim are involved in a betrayal of 2871 Greensboro 457 participants, in my view.
At this point, I believe ICMA members Mary and Jim have violated ICMA's ethics code conflict of interest rules, and probably the City's ethics code as well, as if either really means anything.
I am trying to do the right thing.
It appears ICMA members Mary and Jim are not only impeding my efforts, they are helping ICMA-RC maintain and increase profits at the expense of thier non-ICMA co-workers.
I have tried to get this done relatively quietly.
That period of time is coming to a close.
By doing nothing, I believe those involved in non-action are actively stealing from other people's kid's futures.
As of Monday, November 10, 2014, niether ICMA member and City of Greensboro Manager Jim Westmorland nor Assisstent City Manager Mary Vigue have responded.
The fine print on "VT", an acronym for Vantage Trust;
"Section 401 or 457 plans invest in these “underlying” funds through the funds of the VantageTrust (“VT Funds”). Reference to such underlying mutual fund ticker symbols or other non-performance data by VT Funds is for reference only and NOT reflective of the returns of the corresponding VT Funds [due to VT layered on fees].
The revenue amounts listed for VT Vantagepoint Funds and the VT PLUS Fund include all compensation paid by the fund to ICMA-RC and/or its affiliates.
The Vantagepoint Funds are distributed by ICMA-RC Services LLC, a wholly owned broker-dealer subsidiary of ICMA-RC.
ICMA-RC or its affiliates receive payments [kickbacks to ICMA-RC via VT] from third-party mutual funds that underlie certain VantageTrust Funds that may be available for investment through your plan. These payments are for services rendered by ICMA-RC or its affiliates to plans and participants, and are in the form of 12b-1 fees, service fees, compensation for sub-accounting and other services provided by ICMA-RC or its affiliates."