I. CONSENT AGENDA
November 19, 2013
TO: Mayor Teresa Jacobs
Board of County Commissioners
FROM: Eric Gassman. Deputy County Adminis rat~
Jim Moye. Chief Deputy Comptroll '
SUBJECT: Orange County Deferred Compensation Program - Vanguard Renewal
CONSENT AGENDA ITEM DECEMBER 17, 2013
On September 30. 2008. the Board approved a contract with Vanguard for third party record
keeping services. and with Vanguard and Dimensional Fund Advisors for investment provider
services for the County's Deferred Compensation Program. The term of the contract was for
five (5) years with a five (5) year renewal option. The contract became effective on May 1.
2009, with the initial five (5) year term ending on April 30, 2014.
New Vanguard Fee Proposal
At the time of the initial contract, the lowest cost share class the County could offer employees
was Vanguard's Investors Share class per Vanguard's existing fee structure at that time. This
share class includes a record keeping fee component and a fund management fee component
as part of the overall fund expense ratio. For example. the Vanguard S&P 500 Index Fund has
a fund expense ratio of 0.17% consisting of 0.9% for record keeping expenses and 0.8% for
fund management expenses. Since the record keeping fee component does not cover the total
cost of record keeping, participants also pay an annual per-participant record keeping fee of
Vanguard recently revised its fee structure and the County is now eligible to offer employees
Vanguard's Admiral Share class (their lowest cost share class). The fund expense ratio of the
Admiral Share class does not include a record keeping expense percentage which results in a