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I. STATEMENT OF OBJECTIVES
The Office of the State Comptroller (OSC), on behalf of the State of
Connecticut and the Connecticut State Employees Retirement Commission, is
soliciting proposals from contractors qualified to serve as Third Party
Administrator (TPA) for its 457 plan, 403(b) plan, and Alternate Retirement
Program during the period from July 1, 2005 to June 30, 2009. OSC
anticipates that during the course of the four-year agreement it seeks to
negotiate, the TPA selected will face two over-arching administrative tasks,
Phase 1. Transitioning the Existing 457(b) plan. Start Date: July 1,
2005. The TPA will be responsible for transitioning participants from the
three authorized institutions of the existing 457 Program into its new
administrative environment and, working with the Retirement & Benefit
Services Division (RBSD) of the OSC and third-party fiduciary advisors,
improving the investment offerings. A major objective of this phase will be
to introduce lower-priced investment choices and increase the diversity of
investment options available to participants. The TPA will be responsible
for developing an account transfer communication plan to encourage
participant transfers and a mapping strategy for those participants who make
no transfer election.
Phase 2. Transitioning the Existing 403(b) plan and Alternate Retirement
Program (ARP). Start Date: January 1, 2006. The TPA will be responsible for
transitioning participants from the six authorized institutions of the
existing 403(b) Plan and the investment choices from a single provider in
the existing ARP into its new administrative environment and, working with
the RBSD, improving the investment offerings. After January 1, 2006, all new
contributions will be invested in the new plan choices. However, unlike the
457 plan, old account balances may not be mappable from the existing
providers?participants may need to make elections to transfer existing
assets to the new administrative environment. The TPA should develop a
strategy to encourage individual participant transfers that minimizes
disruption of participant accounts.
In addition to establishing the new administrative environment, the
TPA will be responsible for establishing and maintaining a financial
education program for participants in all three plans and an IRS
compliance program for the 457(b), 403(b) and ARP.
II. BACKGROUND INFORMATION
The 457 Program was established in 1974 in accordance with provisions of
Public Act No. 73-578 (codified as Connecticut General Statutes, Section
5-264a). Section 5-264a has been revised several times since 1973, but the
benefit offered to state employees has not changed substantially. Under
Internal Revenue Code, Section 457, state employees can enter into
agreements with their employer to defer payment of a defined portion of
current compensation until retirement or separation from service. The
advantages offered to state employees for participating in the 457 Program
include the ability to defer paying income tax on the deferred amount until
it is paid or made available to them and, at the same time, serve as a way
to save for retirement. As provided by the Connecticut General Statutes, the
administration of the 457 Program shall be under the direction of OSC, which
is empowered to enter into contracts with state employees to defer earned
income and with financial service organizations to provide the necessary
investment vehicles. There are currently three such authorized institutions:
- ING Financial Advisors, LLC.
- The Hartford
- Phoenix investment Partners, Ltd.
The authorized institutions are responsible for explaining the
advantages, as well as any disadvantages, to state employees who may be
considering participating in the 457 Program. The insurance companies
maintain the records of all participants, provide quarterly reporting to
each participant, and are the investors of the funds in the 457 Program.
Each of the authorized institutions offers a selection of investment
possibilities to the participants. Although OSC is responsible for "due
care" in selecting the providers approving the investment vehicles, the
participants assume the risk of any loss from decreases in the values of the
457 Program's assets. Since the TPA will assume all responsibilities
currently assumed by the current insurance company vendors, their contracts
with OSC will be terminated as of June 30, 2005.
As allowed under the Connecticut General Statutes, OSC is under contract
with Mellon HR as a limited scope TPA. Mellon has been compensated under
agreements it negotiates with the authorized institutions of the 457
Program. OSC anticipates that Mellon's responsibilities will be assumed by
the TPA and, for this reason, the limited scope TPA agreement will be also
Currently, approximately 26,000 participants with over $950 million in
assets contribute to the 457 plan. Estimated annual contributions exceed $90
Alternate Retirement Program
The Alternate Retirement Program (ARP) was established by P.A. 75-636 in
1975 and enrollment in the plan began in 1976. Since its inception,
TIAA-CREF has been the sole financial services organization for the plan.
The ARP qualifies under section 401(a) of the Internal Revenue Code. The
State of Connecticut contributes 8% of pay to the plan and participants pay
As a general proposition, unclassified employees of the following state
agencies are eligible to participate in the ARP: (1) University of
Connecticut, including the University of Connecticut Health Center; (2)
State Universities, including the Board of Trustees; (3) Community-Technical
Colleges, including the Board of Trustees; (4) Department of Higher
Education central office staff. At the current time, approximately 8,500
employees are actively contributing to the ARP. The Plan has approximately
$1 billion in assets, with over $24 million in employee contributions and
$38 million in employer contributions added annually.
Until July, 1992, the ARP was funded with individual retirement annuity
contracts with TIAA-CREF. Since July, 1992, the ARP has been funded with
TIAA-CREF group retirement annuity contracts.
The 403(b) Program is an employer-sponsored, tax-sheltered retirement
supplement, similar to the Connecticut Deferred Compensation (457) Plan.
However, unlike the 457 Plan, which is open to all employees, the 403(b)
Program is available only to state educational employees. As a general
proposition, employees of the following state agencies are eligible to
participate in the 403(b) Program: (1) University of Connecticut, including
the University of Connecticut Health Center; (2) State Universities,
including the Board of Trustees; (3) Community-Technical Colleges, including
the Board of Trustees; (4) Department of Higher Education; (5) Department of
Education, including the Vocational-Technical High Schools; (6) Department
of Correction, Unified School District No.1; (7) Department of Children and
Families, Unified School District No. 2; and, (8) Department of Mental
Retardation, Unified School District No. 3. At the current time,
approximately 5,600 employees are actively contributing to the 403(b)
Recognizing the 403(b) Program to be in need of reform and modernization,
the General Assembly transferred responsibility for its management to the
Office of the State Comptroller (OSC). At the time of transfer of authority,
sixty-six vendors participated in the 403(b) Program. Consistent with this
grant of legislative authority, OSC pursued a number of improvements in the
403(b) Program, including the competitive selection of six authorized
Financial Services Organizations (FSOs). The following six FSOs were chosen
effective July, 2002:
Oldham Resource Group
Travelers Life & Annuity
Currently, 5,600 participants with approximately $400 million in assets
actively contribute to the 403(b) plan. Annual employee contributions equal
about $40 million.
Information about all three plans is available at: www.osc.state.ct.us/empret/
The State is interested in replacing the current administrative structure
with a TPA arrangement. The goal is to establish a centrally-administered,
institutionally-priced platform that will enable the state to offer improved
services and investment offerings to participants at a substantially lower
Under the current arrangement, financial education seminars and other
meetings with participants have been difficult to arrange due to the
multi-vendor environment. In addition, IRS compliance problems have existed.
In particular, contribution and catch-up limits have been difficult to track
with multiple vendors.
For the 457 plan transition, all new contributions after July 1, 2005
will be made to investment options on the new platform. Participants will be
given sufficient time to choose new investment options. Participants who do
not make an election will be mapped to similar funds on the new platform.
Contractors should discuss in their proposal how they would propose
transitioning participants in the existing guaranteed fixed accounts of ING,
The Hartford, and Phoenix.
For the 403(b) and ARP transitions, all new contributions after January
1, 2006, will be made to the investment options on the new platform. Since
participants will have considerable lead-time to select new investment
choices, it is anticipated that most participants will have made selections
by January 1, 2006. However, unlike the 457 plan, new contributions and
existing assets cannot be mapped to the new platform. Contractors should
discuss how they propose to work with the state to ensure that participants
transfer accounts to the new platform.
The goals for the new plan design are to offer more and better investment
choices, lower fees, central administration, third-party fiduciary advice,
improved counseling and other services to participants, and greater fee
transparency and accountability to the state.
- Central Administration. One goal of the RFP is to select a single third
party administrator who will be responsible for central record-keeping,
IRS and other compliance, maintenance of toll-free services lines,
web-site administration and participant transactional access, and overall
administration accountability to the state. The TPA will be required to
provide full custodial and record-keeping services for multiple investment
- Third-party Fiduciary Advice. A third-party investment advisory service
will provide fiduciary services regarding fund selection, constant fund
performance monitoring, and replacement recommendations. The fiduciary
service will be charged with finding suitable investment managers and fund
choices that will offer more variety and substantially lower fees than
- Improved Counseling and Services. Some of the services will be offered
directly by the TPA. Other services, such as participant counseling, may
be offered by independent counselors and/or independent information
sources if the TPA also offers investment choices in the plans.
In order to be considered, each contractor responding to this RFP must,
at a minimum, possess the following qualifications:
A. Organizational Experience
The contractor must have been in operation for at least five continuous
years as of December 31, 2004.
B. Professional Experience
The chief administrative officer and account representatives of the TPA
must each have at least a three-year history of providing administrative
services for Section 457, Section 401(a), 401(k), or Section 403(b) plans as
of December 31, 2004.
C. Plans Under Administration
The contractor must have a minimum of five (5) Section 457, Section
401(a) defined contribution, or Section 403(b) plans, each with at least
5,000 participants, to which it provides administrative services as of
December 31, 2004.
SELECTION PROCESS AND SCHEDULE
Request for Proposals and Response Phase
November 23, 2004
Release of RFP by OSC
December 10, 2004
Letters of Intent with contractor email address due at RBSD of the OSC
December 14, 2004
Questions due at email@example.com
December 17, 2004
OSC answers questions received via email to all contractors
January 14, 2005
Proposals due at RBSD of the OSC
Review and Selection Schedule
January 15-February 1, 2005
Reading and Scoring of Proposals by Screening Committee
February 1 - 15, 2005
see note 1
March 1, 2005
see note 2
March 2- 31, 2005
July 1, 2005
see note 3
- Finalist Interviews. Contractors selected for a final interview will be
expected to make a presentation, followed by a question and answer period,
to the RBSD of the OSC and the Review Committee at OSC Offices in Hartford,
Connecticut. The number of finalists to be selected for interviews has yet
to be determined; however, the expectation is that this number will not
- Selection of the TPA is expressly conditioned upon a site visit by up to
three OSC representatives, to be conducted at a mutually agreeable date and
time. All expenses incurred by OSC in making the site visit shall be borne
exclusively by the TPA and treated as a cost of responding to this RFP.
- TPA Conversion. It is OSC's expectation that, following the successful
conclusion of contract negotiations, the TPA will develop and thereafter
follow a work plan which has as its objective the implementation of Phase 1
on July 1, 2005 and Phase 2 on January 1, 2006.
RIGHTS RESERVED TO OSC
OSC reserves the right to award in part, to reject any and all proposals in
whole or in part, to waive technical defects, irregularities and omissions if,
in its judgement, the best interest of the State will be served.
INSTRUCTIONS TO CONTRACTORS
Conformance - All responses to this RFP must conform to these instructions.
Failure to conform may be considered appropriate cause for rejection of the
Communication Blackout Period - Except as called for in this RFP,
contractors may not communicate with the OSC, the Retirement & Benefit
Services Division of the OSC, or members of the State Employees Retirement
Commission about the RFP until a TPA is selected.
Letter of Intent - The letter of intent will be due at the offices of the
RBSD by 4:30 PM on December 10, 2004. In the letter, the Contractor must provide
an email address for communication of information about the RFP, answers to
questions submitted by contractors, and other matters about the contractor
Delivery of Responses - RFP responses must be in sealed envelopes upon
which a clear indication has been made of the RFP reference title, as well as
the date and time the proposal is due. The name and address of the contractor
must appear on the envelope. FAX responses are not acceptable.
Structure of Response - Contractors must structure the responses as
outlined in this RFP.
Exclusion of Taxes from Prices - The State of Connecticut is exempt from
the payment of excise, transportation, and sales taxes imposed by the Federal
Government and the State. Such taxes must be excluded from quoted prices.
Prohibition of Commissions - The State of Connecticut will contract
directly with organizations capable of performing the requirements of this RFP.
Contractors must be represented directly. Participation by brokers or
commissioned agents will not be allowed during the proposal process or during
the term of the proposed contract between the TPA and the State. The selected
TPA will submit a compensation plan for TPA personnel for approval by the OSC
and may not include broker or commissioned agent fees either implicit or
explicit in the costs of the TPA contract. The approved plan will be included in
the contract between the State and the TPA.
Signature and Responsible Persons - The proposal must be signed by an
authorized official. The proposal must also provide name, title, address, and
telephone number for individuals with authority to negotiate and contractually
bind the contractor, and for those who may be contacted for the purpose of
clarifying the information provided.
"Not to Exceed" Quotations - All cost estimates will be considered
as "not to exceed" quotations.
TERMS AND CONDITIONS
Any contractor responding to this RFP must be willing to adhere to the
following conditions and must so state in its submission:
- Acceptance or Rejection by the State - The state reserves the right to
accept or reject any or all proposals submitted for consideration. All
proposals will be kept sealed and safe until the deadline for submission has
- Conformance with Statutes - Any contract awarded as a result of this RFP
must be in full conformance with statutory requirements of the State of
- Ownership of Proposals - All proposals in response to this RFP are to be
the sole property of the state, and subject to the provisions of Section
1-19 of the Connecticut General Statutes (Freedom of Information).
- Ownership of Subsequent Products - Any product, whether acceptable or
unacceptable, developed under the contract awarded as a result of this RFP
is to be the sole property of the state unless stated otherwise in the RFP
- Availability of Work Papers - All work papers and data used in the
process of performing this project must be available for inspection by the
State of Connecticut Auditors of Public Accounts for a period of three (3)
years or until audited.
- Timing and Sequence - Timing and sequence of events resulting from this
RFP will ultimately be determined by the state.
- Stability of Proposed Prices - Any price offerings from contractors must
be valid for a period of one hundred eighty (180) days from the due date of
- Oral Agreements - Any alleged oral agreement or arrangement made by a
contractor with any agency or employee will be superseded by the written
- Amending or Canceling Requests - The state reserves the right to amend
or cancel this RFP, prior to the due date and time, if it is in the best
interests of the state.
- Rejection for Default or Misrepresentation - The state reserves the
right to reject the proposal of any contractor which is in default of any
prior contract or for misrepresentation.
- State's Clerical Errors in Awards - The state reserves the right to
correct inaccurate awards resulting from its clerical errors.
- Rejection of Qualified Proposals - Proposals are subject to rejection in
whole or in part if they limit or modify any of the terms and conditions
and/or specifications of the RFP.
- Contractor Presentation of Supporting Evidence - A contractor, if
requested, must be prepared to present evidence of experience, ability,
service facilities, and financial standing necessary to satisfactorily meet
the requirements set forth or implied in the proposal.
- Changes to Proposal - No additions or changes to the original proposal
will be allowed after submittal. While changes are not permitted,
clarification at the request of the agency may be required at the
- Collusion - By responding, the contractor implicitly states that the
proposal is not made in connection with any competing contractor submitting
a separate response to the RFP, and is in all respects fair and without
collusion or fraud.
- Include a summary of your contractor's experience with affirmative action.
This information is to include a summary of your affirmative action plan and
your affirmative action policy statement.
IV. PROPOSAL SUBMISSION REQUIREMENTS
1. The Contractor shall submit an original plus nine (9) copies of its
proposal in loose-leaf binders. Proposals shall be submitted to:
STATE OF CONNECTICUT
2. Final proposals must be in writing and received before the close of
business, 4:30 p.m., January 14, 2005.
Office of the State Comptroller
Attention: Thomas C. Woodruff, Ph.D.
Retirement & Benefit Services Division
55 Elm Street
Hartford, CT 06106
3. Proposal should include the following:
The title page should indicate the date, subject, name of the
contractor, address, telephone number, name and title of contractor's
A description of the office that would support the State's
activities, including its geographic location, staffing level, the
background, experience, and qualifications of personnel, as well as
other available resources.
A description of your experience specific to the services requested
in this RFP. List all other government agencies, Corporations, and
Organizations that you have provided these services for in the past
two (2) years. The profile should not exceed four (4) pages.
Complete answers to "Request for Proposal" Section VI.
Samples of reports, policy and procedural recommendations,
memoranda, etc., from previous consulting engagements relevant to the
scope of work proposed in this contract may be attached to the
proposal. It is only necessary to submit one copy of each sample for
The contractor will submit a detailed line item budget with
narrative for each of the three (3) years. The budget should include
all personnel and non-personnel costs associated with the
implementation and ongoing operations under this contract.
The State of Connecticut is not responsible for any costs incurred
by any party in responding to this RFP.
The Proposal must include a summary of the contractor's
experience with Affirmative Action. This information is to include a
summary of the contractor's affirmative action plan and the contractor's affirmative action policy statement.
Regulations of Connecticut State Agencies Section 46a-68j-30(10) requires agencies to consider the following factors when awarding a
contract that is subject to contract compliance requirements:
- The contractor's success in implementing an affirmative action
- The contractor's success in developing an apprenticeship program
complying with Section 46a-68-1 to 46a-68-17 of the Connecticut
General Statutes, inclusive;
- The contractor's promise to develop and implement a successful
affirmative action plan;
- The contractor's submission of EEO-1 data indicating that the
composition of its work force is at or near parity when compared to
the racial and sexual composition of the work force in the relevant
labor market area; and
- The contractor's promise to set aside a portion of the contract
for legitimate small contractors and minority business enterprises,
where applicable. (See CGS 32-9e)
A "Notification to Contractors" form is attached, which
should be read and signed by the contractor. (Attachment I)
Also attached is a Contract Compliance Requirement reporting form,
which the contractor must complete and sign, which will be sent to the
Commission on Human Rights and Opportunities by the awarding agency.
At the contractor's option, an Executive Summary may be included in
V. EVALUATION OF PROPOSALS
Each proposal will be evaluated by a Screening Committee using the
following criteria to determine which contractor is most capable of
implementing OSC's requirements, as follows:
- Contractor's experience with and ability to do the specific work,
including experience in the administration of Section 457, 403(b) and
401(a) defined contribution plans.
- Contractor's understanding of the plans' purpose and scope, as
evidenced by the proposed approach and the level of effort.
- Competitiveness of proposed cost to participants.
- Scope and suitability of proposed financial education and communication
- Availability in the state and competence of personnel with the
appropriate training and compensation.
- Conformity with specifications contained herein.
- Demonstration of commitment to affirmative action by full compliance
with the regulations of the Commission on Human Rights and Opportunities.
- At the option of the Screening Committee, an oral presentation.
VI. REQUEST FOR PROPOSAL QUESTIONNAIRE
ORGANIZATION AND HISTORY
- Please provide the name(s), title(s), address(es), e-mail address,
telephone and fax number(s) of the individual(s) responsible for
responding to this request.
- Provide a brief overview of your company and history of your
organization including an organizational chart of your retirement plan
operations. Please describe any parent/subsidiary/affiliate
- Are you currently participating in any alliances or joint
marketing efforts? If so, please describe in detail.
- Indicate how many years your company has been providing services
to defined contribution plans and, more specifically, to 403(b), 401(a)
and to governmental 457(b) deferred compensation plans.
- Indicate the total value of assets in all defined contribution
plans for which you provide recordkeeping services and, more
specifically, in 457(b), 401(a) and 403(b) plans.
- Indicate the total value of assets and the number of defined
contribution plans in the State of Connecticut for which you provide
recordkeeping services and, more specifically, in 457(b), 401(a) and
403(b)plans. Indicate the number of personnel you have working on these
plans in the State of Connecticut.
- Indicate your commitment to government and not-for-profit
institutions in the state of Connecticut.
- Indicate the total number of participants in all defined
contribution plans for which you provide recordkeeping services and more
specifically, in 457(b), 401(a) and 403(b) plans.
- Please complete the following plan profile tables, using data as
of June 30, 2004, to describe your current clientele, as well as your
current clientele in the 457(b), 401(a) and 403(b) marketplace. Complete
a separate table for each type of plan.
Number of Employees in Plans
Total Number Defined Contribution Plans
Plan Assets (M = Millions)
Total Number of Defined Contribution Plans
From $10M to $50M
From $50M to $100M
From $100M to $250M
10. Please provide a breakdown of the number of clients you service
by plan type as a percentage of your total business:
Plan Type - Percentage of Total Business
11. Please provide your most recent audited financial statement. If
the proposing firm is an insurance company please provide your claims
paying ability ratings from
- A.M. Best
- Standard & Poor's
- Duff & Phelps
- Weiss Ratings Inc.
12. Describe any litigation, past or pending, against your
organization or on-site service representatives resulting from your
current or past involvement with any deferred compensation, defined
contribution or public/private pension plan in the past five years.
13. Has your organization or have your service representatives been
cited, or reprimanded by any regulatory agency within the past ten
years? If so, please describe.
CORPORATE GOVERNANCE / CORPORATE RESPONSIBILITY
- Describe your approach to corporate governance.
- Do you monitor the companies in the investment portfolios to
ensure that each is managed in accordance with sound governance
principles? Describe your approach.
- Describe your commitment to workplace diversity, including your company's
record with respect to appointment of women and minorities to senior
- Describe your company's position on outsourcing of jobs to other
companies or overseas. Describe whether any service for the plan (other
than fiduciary, investment advisory, and counseling services) including
call centers, data processing, plan records, etc., would be outsourced or
whether all work in these areas will be accomplished with company
CLIENT SERVICE / QUALITY ASSURANCE
- Please describe the team that would deal directly with the State of
Connecticut during the conversion and on an ongoing basis.
- Describe how the team will be compensated.
- What is the average number of clients of similar size to the
Connecticut plan managed by the Relationship Manager that will be
assigned to our plan?
- If the account manager is not exclusive to the State of
Connecticut, how many accounts does he or she oversee?
- For those employees assigned to the State of Connecticut 's
account, briefly describe each member's role and where each member is
- Please describe the types of defined contribution, 457(b), 401(a)
and 403(b) (governmental and nongovernmental) plan training you provide
to your new employees before they work on client plans.
- How many of your employees' work on defined contribution, 403(b)
and 457(b) (governmental and non-governmental) plans?
||403(b) & 457(b) Plans
Financial Record keeping
- Describe your organization's commitment to quality and your
philosophy/approach to client services.
- Describe your procedures for monitoring:
- a. institutional client satisfaction;
- b. individual participant satisfaction.
- What checks and balances do you have in place to ensure plan
administration integrity and accuracy including participant account
- Are you willing to provide service performance guarantees? Please
describe any dollar amounts you are willing to put at risk for each
guarantee for which you will commit.
RECORD-KEEPING / ADMINISTRATION
- Do you provide one main contact for the daily administrative needs of
- Do you provide daily valuations? Describe in detail how your system
- What methods of data transmission are available?
- Describe in detail how your system processes contributions.
- What is the deadline for you to receive contributions and complete the
investment of those contributions into the appropriate fund on that same
- Describe in detail, including timing, how your system processes
withdrawals (i.e., in-service and hardship withdrawals). Describe any
differences for 457(b) and 403(b) plans.
- Describe in detail, including timing, how your system processes the
- a. lump-sum distributions,
- b systematic payments/installments,
- c. annuities,
- d. rollovers to an eligible retirement plan,
- e. required minimum distributions, and
- f. distributions of participant accounts under $5,000
- Describe in detail your loan processing capabilities, including
paperless loan capabilities.
- Is direct deposit to a bank account available for distributions,
withdrawals and loans?
- Are participants able to repay loans from sources other than from the
State of Connecticut payroll?
- Describe the flexibility or limitations in your loan repayment
processing (e.g., additional payments, multiple loans, missed payments).
- Describe in detail how your system processes transfers/exchanges
(including frequency/limitations). Are confirmations sent?
- Please describe your daily protocols and cutoff times for investment
transfers between funds.
- Describe your process and methods of reallocation (percent and/or
- Can your system recordkeep fixed annuity accounts managed by other
companies? Does your system have any limitation regarding fixed annuity
accounts with multiple interest rate vintages?
- Can employer and employee contributions be tracked separately?
- Describe how your system handles Federal and State tax reporting
(i.e., Forms 1099-R).
- Describe in detail how you administer qualified domestic
relations orders (QDROs).
- What checks and balances do you have in place to ensure
- In the event of a recordkeeping error within your control, will you be
financially responsible for making participants and/or the Plan whole?
- Do you provide an administration manual? If so, please provide a sample.
Is an administrative manual available on-line?
- Do you provide a phone line dedicated specifically to plan
- Do you have a dedicated plan sponsor Internet site? If so, please
describe the services available (e.g., the ability to update Plan
information on-line). Please provide us with access information for a
demonstration of this site.
- Please describe any other administrative services you provide.
- Indicate what administrative functions the State of Connecticut
must retain (e.g., loans, withdrawals, QDROs, etc.), assuming we
maximize the use of your administrative services.
- Will you accommodate payment of eligible Plan expenses from Plan assets
at the authorization of the State of Connecticut?
- Are your access channels (e.g. voice response system, plan sponsor and
participant websites, service center, and statements) fully integrated
with your recordkeeping systems? Please explain.
- Describe the standard reporting package that you provide, as well
as the media used (include sample packages). Describe the reports that
are available on-line.
- Describe any customized or ad hoc reporting capabilities including
Internet capabilities. Are there any additional costs associated with
customized or ad hoc reporting?
- Describe your standard participant-level statements and documents
- Can reports/statements be produced on other media? Please
- What is the standard time frame for providing each report after
the reporting period ends?
- Are participant statements available on-line or via e-mail? If
- Please provide samples of quarterly participant account
VOICE RESPONSE SYSTEM (VRS), INTERNET ACCESS AND CALL CENTER
Voice Response System (VRS)
- Describe the services available through your VRS.
- How are transactions processed? How are transactions documented?
Are written confirmations sent?
- Describe how data is secured within the system (i.e., passwords,
audit trail, confirmations).
- Describe the level of customization available within your VRS.
- What are the standard hours of operation?
- Are there any transactions that cannot be processed through the VRS?
- Is the menu easy for participants to use? Does it include
"help" information? Please describe the structure in detail.
- May a participant elect to transfer from the VRS to a service
representative? When and what services are available?
- How often is the data on the VRS updated?
- How does the VRS interface with your recordkeeping system?
- Will you provide customization for the VRS? If yes, briefly
describe the level of customization available on your VRS.
- Please explain how VRS passwords are assigned and changed.
- Describe the account services and transaction capabilities
available through your participant website.
- How are website transactions processed and documented?
- Are there any transactions that cannot be processed through your
- Describe how data is secured within the system (i.e., PIN, audit
- Describe the level of customization available for clients using
your Internet services.
- What are the standard hours of account access and transactional
- If a participant elects to move from the website to a call center
service representative, describe the interface between the website and
the service representative.
- How often is the data on the website updated? How does the website
interface with the recordkeeping system?
- Please identify your website account access and transactional
availability statistics (average availability per month as a
- Have there ever been instances within the last two years where
the website was not functioning? If so, please describe frequencies,
duration and how problem was resolved.
- Please explain how Internet passwords are assigned and changed.
- Please identify your call center service standards. Please
include, for each of the last three calendar quarters, statistics
related to actual performance.
- a. Number of calls received,
- b. Percentage of calls answered,
- c. Average length of calls,
- d. Average response time,
- e. Percentage of calls requiring follow-up,
- f. Call abort rate,
- g. Percentage of incoming calls totally handled via VRS versus
toll-free live service center representative assistance, and
- h. Percentage of service requests handled via website versus call
center and VRS.
- What training is provided to call center representatives before
they are allowed to handle incoming calls?
- What level of securities licensing do your call center
- What is the annual employee turnover rate for your call center
- Do you monitor and/or tape participants' service center calls?
- What are your case-management procedures for calls that have service
- What information is available to toll-free service representatives to
allow them to answer participant questions effectively?
- Where is your call center(s) located?
COMMUNICATION AND EDUCATION
- Briefly describe your background and experience in providing
communication and education programs.
- Identify the key elements provided as part of a standard
communication and education program package included in your proposal.
- Identify non-standard elements to a communication and education
program you may provide for an additional charge.
- Describe separately your initial and on-going communication and
education program (including printed material, visits, training, etc.).
If the program is tailored to a specific plan sponsor need, identify the
critical issues to be determined in designing such a program.
- What special educational services do you offer specifically for
employees nearing retirement? Can you customize these services to for
employees participating in the State Employees Retirement System or
other defined benefit plan?
- Do you offer forms and communication materials that are
specifically customized for your clients?
- Can material be customized? If so, briefly describe the level of
customization that is available and the cost of such customization.
- Do you provide personnel resources as part of on-going education
and retirement planning programs? If so, please complete the table below
indicating the number of meetings that you will commit to perform
annually, and list the subjects that will be covered in your program (no
description is necessary).
Number of group meetings (minimum of 100)
Number of individual meetings (minimum of 500)
Total number of service hours
Subjects to be covered
- Do you create all of your communication and education material
in-house or through third parties?
- Describe the process you use to help plan sponsors measure the
effectiveness of employee education efforts.
- Does your organization provide any services (e.g.,
questionnaires, software) that would help individual participants with
financial planning? Describe any electronic education tools you provide,
both software-based and web-based, to participants and retirees.
- Describe your position on providing investment advice to
participants. What fiduciary responsibility do you assume if advice is
- Do you offer third-party investment advice? Describe your
process, mode and scope of advice. Is there a separate charge?
- Describe your education tools or programs designed to support
both rollover and non-rollover distributions from the Plan.
- Do you provide prospectuses and periodic reports?
- Provide samples of initial enrollment and on-going communication
and education materials.
- Explain your conversion process, including time frame, based on
the options available (e.g., mapping, etc.). Please include a timeline
that describes necessary actions, responsible parties and target
completion dates. Please also provide a one-page outline of your plan
for communicating the conversion to participants.
- Is a "black-out" period required? If yes, how long is it
and what is restricted or not available during that time? Are you
willing to schedule the blackout period to occur over a weekend or
- How will distribution, hardship and loan requests be handled
during the conversion?
- How is investment of new Plan contributions handled during the
- How will new investment options be communicated to participants?
- Do you have a communication plan for former State of Connecticut
- What involvement will be required from the State of Connecticut
during the conversion process?
- Do you provide a dedicated conversion team? If yes, briefly
describe each member's role and where each member is located.
- Quantify your proposed personnel commitment for the conversion.
Include the number of group meetings you will conduct. Provide the names
and qualifications of the conversion team.
- Describe your process to ensure accurate conversion of all
- Do you have any limitations as to the format/media of conversion
- How does your system handle the conversion of existing loans and
- How do you monitor the effectiveness and quality of your
conversion process and team?
1. Describe in detail how your organization will monitor, cap and/or resolve the following maximum contribution limits for 403(b)/457
- IRC section 402(g) elective deferral limit
- Catch-up contribution limits under IRC sections
- IRC section 415(c) annual contribution limit
- IRC section 401(a)(17) annual compensation limit
2. What "safeguards" are built into your system to prevent over
deferrals from all Plans? How are over deferrals handled? How do you
address violations for any of the testing covered in question 1?
3. What fiduciary responsibility does your organization assume?
4. How do you ensure that your record-keeping system is in compliance
with all pertinent laws and regulations?
5. How do you keep plan sponsors informed and updated on any
regulatory and legislative changes affecting 457(b) , 401(a), and 403(b)
SYSTEMS CAPABILITIES AND HARDWARE
1. Describe the hardware platform and software system you use to
recordkeep and administer defined contribution plans.
2. Was the software developed internally, leased, or bought from
another provider? Who has the ultimate responsibility to make sure the
software is updated to reflect changes in the laws, regulations, client
3. How often is the system upgraded?
4. Describe the system enhancements you have planned over the next
three years for:
- Core record-keeping system
- Service technology
5. Describe your documented disaster recovery plan. How often do you
test your recovery system?
6. Describe your maintenance and backup procedures including daily
backups, retention timetable and off site backup storage approach. Where
are your off-site backup facilities located? Are backup records stored
in two separate locations.
7. Describe the method of maintaining plan sponsor and participant
history on the system and the period such information is maintained.
8. Describe the valuation methods offered by your system.
9. Are internal controls of your recordkeeping system audited by an
independent accounting firm on an annual or more frequent basis? If so,
please describe such controls and provide a copy of the most recent
10. How do you control access to the recordkeeping system? What
security precautions are in place?
11. Does the system allow for plan sponsor customization/limits such
- transfer frequency,
- minimum/maximum contribution percentages or amounts
- investment election changes,
12. Describe your system's maximum limits with regard to the
- investment funds,
- contribution types,
13. Please provide ongoing transaction layouts if specific layouts
14. Do you provide software that enables plan sponsors to interact
with your system? If so, please describe its capabilities and optimal
user system requirements.
1. How long have you been providing investment services?
2. Please identify the names by type for all investment vehicles you
3. What is the maximum number of investment options that can be
handled by your system?
4. In addition to the funds you are proposing, please provide an
entire list of the funds available through your proprietary and alliance
5. Please disclose all revenue sharing agreements you have in place
with the funds that you are proposing. Note: 12b-1 fees will not be
6. For each investment vehicle you are proposing, Complete as Exhibit
I the following:
- a. Name of investment Vehicle
- b. Investment vehicle objective/investment philosophy.
- c. Investment type (e.g., mutual fund, commingled fund, or
- d. Inception date.
- e. Name of the investment/portfolio manager and tenure.
- f. Comparative index(s) used by the manager.
- g. Withdrawal provisions (including restrictions on transfers).
- h. Expense structure that you propose for the State of
Connecticut. The fund-level fees should be stripped of all
administrative fees possible. Please list an explicit plan
administration asset-based fee that will represent the total fee for
plan administration. Together, the fund-level fees and the explicit
plan administration fees should represent total fees to be paid by
- i. Morningstar rating (if rated).
- j. Ticker symbol.
- k. Where appropriate, the standard deviation, alpha, beta, R2,
and Sharpe Ratio.
7. For each investment vehicle, provide the 1-year annualized return,
and the 3-, 5- and 10-year (or since inception) annualized returns,
risk-adjusted returns and annualized standard deviations ending on the
last calendar quarter.
8. For any guaranteed return investment, including fixed annuity
accounts, describe the current and minimum interest rate guarantees, how
interest is credited, and the frequency of rate changes. If interest is
credited by vintage or "bucket," how many "buckets"
can exist in a participant's account?
9. For a money market investment vehicle, provide the 7-day current yield
as of the last three calendar quarter-end dates.
10. Do you offer a brokerage window for participants in 403(b), 457, and
401(a) defined contribution plans? If so, provide a full description.
Describe all fees, mutual funds available, and the ability of plan
sponsors to determine which mutual funds are available to participants
through the window.
11. Do you provide prospectuses to participants following their
initial investments in funds? Please provide a prospectus for each fund
- Please provide five references of current clients of similar plan
demographics (e.g_, plan size [assets and participants]). Please provide at
least one reference from the State of Connecticut:
- Client name
- Contact name
- Phone number
- Services provided
- Year they became a client
- Plan demographics.
- Please provide two references of former clients who had similar plan
demographics as described above. Please provide
- Client name
- Contact name
- Phone number
- Services provided
- Year they became a client
- Year they ceased to be a client
- Plan demographics.
- The reason(s) for departure
1. Please provide any additional information you feel may be relevant in
evaluating your proposal.
Please describe your cost proposal and approach towards fees. Please describe
your approach to revenue sharing.
SAMPLE PLAN ADMINISTRATION BUDGET
Please Construct a Sample budget for the first three years of plan
operations. Assume 457(b) plan implementation July 1, 2005 and 403(b) and ARP
implementation on January 1, 2006. The purpose of the sample budget is to
demonstrate that your company can provide the necessary plan services within the
budget that will be possible from revenue from plan administration fees.
- Basic fee for recordkeeping and basic plan administration.
- Personnel costs for Plan Representatives.
- Plan setup/implementation.
- Consulting services for fiduciary and other services.
- Enrollment services (materials cost, number of meetings, travel
- Group education services, including any third-party software or other
- Payroll processing.
- Printing/mailing, etc.
- Fund exchange fees.
- Distribution fees.
- Report / Statement preparation fees.
- Interactive voice response.
- 1099R preparation.
- List any other cost categories that you anticipate.