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Utopia Retirement System

Actuarial Services

RFP Questions

A.     Background of the consulting firm (2 page maximum)

1.           Briefly describe your firm’s background, history, and ownership structure, including any parent, affiliated or subsidiary company, and any business partners.

2.           Please describe the services your firm provides and give the percentage of revenue derived from actuarial services.

3.           Provide an organization chart of your firm and describe the relationship between each component and your consulting group.

4.           Within the past three years, have there been any significant developments in your organization such as changes in ownership, restructuring, or personnel reorganizations? Do you anticipate future significant changes in your organization?

5.           Please give the address of your corporate office and indicate which office(s) will service URS.

6.           Identify any services you are unable to perform.

B.    Consultants (1 page maximum):

1.           How many actuarial consultants does your firm have?

2.           Discuss the ways you manage growth, including any limits to the client/consultant ratio.

C.    Standards of conduct (1 page maximum):

1.           Does your firm have a written code of conduct or a set of standards for professional behavior? If so, how are they monitored and enforced?

2.           How are consultants’ recommendations to clients reviewed and monitored by your organization? Does your firm adhere to a level of consistency in consultant recommendations?

3.           Within the last five years, has your organization or an officer or principal been involved in litigation or other legal proceedings relating to your actuarial services assignments? If so, please provide an explanation and indicate the current status or disposition.

4.           Has your firm ever been censured by any regulatory body? If so, please describe the situation.

D.    Conflicts of Interest (3 page maximum):

1.           Are there any potential conflict of interest issues your firm would have in servicing URS? If so, describe them.

2.           How does your firm identify and manage conflicts of interest?

3.           Have you or anyone in your firm provided any gifts, travel and room expenses, entertainment or meals to any URS Board member or staff during the past 12 months? If yes, please describe the amount of expenses and what it was for.

4.           List and describe any professional relationship you have with the URS plan sponsor, any employers who pay into URS or legislative oversight bodies during the past three years.

E.     Consulting team (2 page maximum):

1.      Please provide contact information for each consultant that will be assigned to URS in a grid similar to this.

2.          Please describe the role of each consultant for this assignment.

3.          Please describe your team’s experience with similar work performed for other public retirement systems or corporate pension.

4.          State whether the individuals assigned to the work have any responsibilities other than providing actuarial services, and if so, specify such responsibilities.

5.          Describe your firm’s backup procedures in the event that key personnel in this assignment should leave the firm.

6.          Describe the resources your firm has that specifically address the needs of public sector clients.

7.          Describe how your firm controls the cost of services rendered for a client.

8.          If your firm utilizes external benefits legal expertise, describe how it is used in conjunction with internal expertise.

F.     Actuarial Valuations (3 page maximum):

1.           Is your firm capable of performing actuarial valuations for a system the size of URS?

2.           Describe the approach you would follow to conduct an actuarial valuation of the URS pension plan; describe your approach to the transition from our current actuaries.

3.           Describe your approach to measuring funding status and funding progress in order to facilitate the assessment of trends over several actuarial valuations with respect to the overall solvency of URS.

4.           Describe your approach to assessing the current mandatory provisions of the statutes relating to the actuarial valuations and recommending appropriate changes in these requirements.

5.           Discuss the theory and methodology for the actuarial assumptions your firm employs. How do you develop asset class assumptions?

6.           Describe your firm’s approach to providing recommendation regarding the amortization of unfunded liabilities.

7.           Describe your approach to the development and maintenance of valuation software.

8.           Describe the capabilities of your valuation system(s) and your computer hardware support.

9.           Describe the tools, resources, and training you can make available to the URS staff so that they can model various scenarios.

NAPPA Notes:

If a retirement system also offers a healthcare program and actuarial services are needed for that, the system may want to consider one firm for both pension and healthcare work or use two different firms. Questions need to be developed that specifically address healthcare actuarial issues.

G.    Actuarial policies (1 page maximum):

1.           Describe your approach to the analysis of applicable legal parameters/restrictions under which URS must operate.

2.           Describe your process for maintaining a continuous review of actuarial policies.

H.    Reporting (1 page maximum):

1.           What period of time is required to prepare reports after year end?

2.           Give a brief overview of the hardware and software systems used in the production of actuarial reports.

I.        Unique qualifications (2 page maximum):

1.           Describe how your actuarial consulting work is distinguished from that of your competitors.

2.           Describe any services of your organization that may not be offered by other consultants.

J.      Trustee education (1 page maximum):

1.           Does your firm offer training of plan fiduciaries as it relates to their benefits and services oversight responsibilities? If so, describe the type of training available and the qualifications of the individuals assigned to conduct the training.

K.    References:

Please provide three references who are clients for whom work similar to that requested in this RFP has been performed.

L.     Previous clients:

Please list public sector clients who have terminated your actuarial relationship during the past three years and their reasons for doing so. Please include their names, titles and telephone numbers.

M.    Insurance and liability:

1.           What limitation on liability, if any, do you impose through your contract?

2.           Please describe the levels of coverage for errors and omissions insurance and any fiduciary or professional liability insurance your firm carries. Is the coverage on a per client basis, or is the dollar figure applied to the firm as a whole? List the insurance carriers.

3.           Describe your quality assurance procedures.

4.           Describe your firm’s disaster recovery plan as it relates to the equipment, software, and data tapes and personnel that would be used in providing the services required by URS.

N.    Subcontracting:

1.           If your firm uses the services of a subcontractor, please identify the subcontractor and describe the skills and qualifications of the subcontractor and its individual employees.

2.           Describe what portions of the project will be assigned to the subcontractor.

3.           Identify the cost associated with the portions of the project assigned to the subcontractor.

4.           Describe the inclusive periods and percentage of time the subcontractor will devote to the project.

5.           Describe the contractual arrangement contemplated with each subcontractor and describe generally the control/delegation of responsibilities anticipated in that arrangement.

O.    Fees:

Please list your fees for annual valuations of all the defined benefit plans under URS, assuming this will be a five year contract.

Please give hourly rates you will charge for work within the scope of services for which the precise number of hours is unknown.

Appendices

Appendix A. Biographies

Please include biographies for all consultants listed in your proposal. Indicate what year each consultant joined your firm and describe his or her position, current responsibilities, areas of expertise, experience, education, professional designations and memberships, and relevant publications and presentations.

Appendix B. Annual Financial Report

Please attach your firm’s current Annual Financial Report.

Appendix C. Sample Contract or Agreement

Please attach a sample contract or agreement your firm uses for actuarial services.

Other Information (2 page maximum)

Please describe areas or processes, not included in the scope of this engagement that your firm may examine in order to provide more complete and thorough services.