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multiplied by the administrative reimbursement rate of 2 basis points, or 0.02%. For
this purpose, the assets are the June 30, 2020, balance of $526,332,271 less the
$7,086,701 balance of loans, with no assumption of growth. The 0.02% administrative
reimbursement rate is codified in the County’s contract with MassMutual.

2020-21 Expenditures—Budgeted plan expenses of $132,600 are based on the approved
2019-20 budget with the following adjustments for the DCAC’s consideration.

• NAGDCA Conference, Other Trainings—Decrease by $19,000, from $20,000 to
$1,000. This decrease represents the lower cost of the virtual version of
NAGDCA’s annual conference, NAGDCA Connect. This line item can be expected
to increase again in 2021-22 assuming safe travel resumes in 2021 after a COVID
vaccine is readily available.
• Insurance Premium—Decrease by $11,000, from $31,000 to $20,000. This
decrease reflects actual cost of fiduciary liability insurance as quoted by the
County’s insurance broker.
• Staffing—Decrease by $20,000, from $50,000 to $30,000. This decrease
eliminates a placeholder for potential staffing costs related to enhanced financial
reporting. This budget retains $15,000 in placeholders for financial reporting and
financial audits in case the new GASB (Governmental Accounting Standards
Board) Statement No. 97 impacts this plan.

2020-21 Ending Fund Balance—By the end of 2020-21, the Deferred Compensation
Fund’s budgeted fund balance is projected to decrease by $24,751 from $257,468 to
$232,717. In past budgets, the DCAC approved an annual operating deficit to reduce
excess fund balance leftover from the prior administrative services contract (in which
the reimbursement rate was higher than needed). That strategy continues in this
recommended budget.

As shown in the attached spreadsheet, prospectively, the unrestricted fund balance
would be reduced by $43,751 per year, assuming that revenues and expenditures remain
steady. It is a conservative assumption given the auto-enrollment and auto-escalation
features within our plan. More than likely, assets and plan revenues will continue to
increase over a multi-year period excepting an extreme market downturn. At the
$43,751 rate of reduction, the unrestricted fund balance of $150,567 would be fully
depleted by the end of 2023-24. However, the next administrative services RFP is
scheduled for 2022-23, and it would be an opportunity to 2 basis point revenue stream.

2019-20 & 2020-21 WORKPLANS

2019-20 Workplan Accomplishments—The 2019-20 budget provided resources for the
DCAC’s following accomplishments in 2019-20:

• Quarterly Investment Reviews (4)
• Quarterly Plan Reviews (4)
• Legislative Updates (4)
• Participant Survey (August 2019)
• Annual Review of Education Policy (August 2019)
• Annual Review of Fund Balance Policy (August 2019)
• NAGDCA Leadership Award (September 2019)
• Annual Review of Investment Performance (November 2019)