CHARTER TOWNSHIP OF BLOOMFIELD REQUEST FOR PROPOSAL (RFP) FOR INVESTMENT ADVISER AND CONSULTING SERVICES FOR

Transcription

1 CHARTER TOWNSHIP OF BLOOMFIELD REQUEST FOR PROPOSAL (RFP) FOR INVESTMENT ADVISER AND CONSULTING SERVICES FOR 401(a) DEFINED CONTRIBUTION PLAN, 457(b) DEFERRED COMPENSATION PLAN, RETIREE HEALTH CARE TRUST (VEBA), EQUITY FUND FOR DEFINED BENEFIT PENSION PLAN, RETIREMENT HEALTH SAVINGS PLAN, AND 529 COLLEGE SAVINGS PLAN Posted on Monday, May 15, 2017 Sealed written responses must be received, on or before 5:00 p.m., EST, Thursday, June 15, 2017 at the following address: Brian E. Kepes, Treasurer Charter Township of Bloomfield 4200 Telegraph Rd Bloomfield Hills, MI

2 Table of Contents I. BACKGROUND... 1 II. MINIMUM QUALIFICATIONS AND REQUIREMENTS... 1 III. SCOPE OF SERVICES... 3 IV. TECHNICAL PROPOSAL... 4 V. COST PROPOSAL... 6 VI. SUBMISSION REQUIREMENTS AND CONDITIONS... 6

3 I. BACKGROUND The Charter Township of Bloomfield, Michigan is seeking an investment adviser and consultant for its various fiduciary funds. The Township has not created an independent board to manage these assets, but it does have a Financial Sustainability Committee that is involved in this RFP process. The 401(a) Defined Contribution Plan began in 2005 for all new hires. The plan currently is through American Funds and the current balance is over $5M. Current number of participants is 117. The 457(b) Deferred Compensation Plan currently allows employees to choose between two vehicles which each have their own adviser. One is through Empower and the other is through Voya. The current combined balance is over $21M. Current number of participants combined is 313. The Retiree Health Care Trust (VEBA) was initially established in 2005 with a minimal deposit. The Township is on the pay-as-you-go method of paying for retiree health care. The purpose of this trust is to invest funds that will grow and pay retiree health care premiums directly from this trust. Since 2011, there have been annual deposits into the trust and the current combined balance is about $10M. The Township has $160M held and managed by Prudential as the provider of the Defined Benefit Pension Plan. These specific assets are not part of the proposal. There are other pension assets held in an Equity Fund for the Defined Benefit Pension Plan. This is where the Township invested its $80M in pension obligation bonds issued in November The balance has decreased because the Township has had to transfer funds from this account to the assets held with Prudential per certain provisions in the contract. The current balance of this fund is about $55M. The Retirement Health Savings Plan began in 2011 for all new hires. In lieu of the Township providing retiree health care, it provides an account that both the employer and the employees contribute to throughout active employment. The balance of an employee s account upon retirement becomes available to them for health care expenses and premiums. The current balance is about $900k. The current number of participants is 101. The 529 College Savings Plan with American Funds is offered by the Township and allows employees to make contributions through an elective payroll deduction. The current balance of 24 individual accounts is over $600k. II. MINIMUM QUALIFICATIONS AND REQUIREMENTS 1. As of January 1, 2017, the firm must have been in business at least five (5) years and have combined total assets under management of at least $3 Billion. 2. Must be a firm capable of serving as investment adviser and consultant for a Defined Contribution 401(a) Plan and must have over 5 years experience with Michigan municipal clients having plan assets of at least $25 million and at least 150 participants. 3. Must be a firm capable of serving as investment adviser and consultant for a Deferred Compensation 457(b) Plan and must have over 5 years experience with 1

4 Michigan municipal clients having plan assets of at least $25 million and at least 300 participants. 4. Must be a firm capable of serving as investment adviser and consultant for a Retiree Health Care Trust (VEBA) and must have over 5 years experience with Michigan municipal clients having plan assets of at least $15 million. 5. Must be a firm capable of serving as investment adviser and consultant for an Equity Fund for a Defined Benefit Pension Plan and must have over 5 years experience with Michigan municipal clients having plan assets of at least $100 million. 6. Must be a firm capable of serving as investment adviser and consultant for a Retirement Health Savings Plan and must have over 5 years experience with Michigan municipal clients having plan assets of at least $5 million and at least 150 participants. 7. Must be a firm capable of serving as investment adviser and consultant for a 529 College Savings Plan and must have over 5 years experience with Michigan municipal clients having plan assets of at least $750,000 and at least 30 participants. 8. The Consultant and Firm must agree to disclose all conflicts of interest, sources of revenue and affiliations. Whether directly or indirectly received as a result of Township accounts. 9. Does your firm solicit or accept any form of compensation (direct or indirect) for placing or helping to place investment managers, custodial banks, or other service providers? If so, please describe. 10. Does your firm solicit or accept any form of compensation (direct or indirect) from investment managers, custodial banks, or other service providers that are under contract with the clients for whom you provide investment consulting services? If so, please describe. 11. The Consultant and Firm must agree to acknowledge it is compliant with the Government Finance Officers Association (GFOA) Ethics Policy. 12. The primary consultant assigned to this account must have a minimum of five (5) years experience providing domestic and international investment consulting services to public and/or private defined contribution plans and/or defined benefit plans. 13. The Consultant and Firm must be a Registered Investment Advisor under the Investment Advisors Act of 1940 and acknowledge its responsibilities under Public Act 314 of 1965, as amended. 14. The Consultant and Firm must acknowledge it is a fiduciary of the plans and participants. 15. Outline the Errors and Omissions coverage and fidelity bond coverage your firm carries. Provide a valid, current Certificate of Insurance. State the amount to be covered in the proposed contract. 2

5 16. The Township has not created an independent board to manage these assets. The chosen firm must be able to offer insight/advice on investments and facilitate the investment process with the Township Board of Trustees. 17. The Firm must certify that all accounts comply with all local, state of Michigan, and federal investment and trust account rules/laws. 18. The selected vendor will be required to maintain all documents, papers, account records, and other evidence pertaining to work performed under any agreement with Bloomfield Township. This information and materials must be available at the office of the vendor(s) at all reasonable times for the duration of the agreement and thereafter up to six (6) years for audit or inspection by Bloomfield Township, State Auditor, or any other authorized individuals. III. SCOPE OF SERVICES Scope of Services required will include, but are not limited to, the following: 1. Investment Policy a. Conduct a comprehensive review and analysis of investment policies, objectives, asset allocation and portfolio structure, and recommend changes, if appropriate. b. The Township has not created an independent board to manage these assets. The Township expects the hired adviser to manage this process. 2. Transition a. Preparation of written transition plan including time line to be reviewed and approved by the Township; b. Transition of fund assets, as applicable, to investment managers/ mutual funds; c. Coordinate and assist with the transition of funds, investment advisors and any other third parties to ensure that the assets are transitioned in the most efficient and cost effective manner possible. 3. Ongoing Services a. Investment Manager Oversight, Search, and Selection; b. Provide on going monitoring and oversight of investment managers to ensure compliance with all laws and regulations, investment policies and manager mandates; c. Monitor and evaluate manager trading and transaction costs to produce the most value oriented result; d. Provide evidence of periodic discussions with managers on investment performance and organizational issues (such as changes in ownership, staff, new products, etc.); e. Review of all trust documents and advise on changes 4. Investment Policy and Asset Liability Studies a. Develop policies, guidelines and procedures for rebalancing the asset mix; b. Advise the Township of new developments in investment management techniques and portfolio management strategies; c. Provide advice and recommendations on various other investment policy issues. 5. Performance Evaluation Reporting a. Compare the investment performance of the total fund, asset classes and investment managers to relevant benchmarks and "peer group" samples; 3

6 b. Present performance reports on a semi-annual basis to the Township, ad hoc Financial Sustainability Committee meetings, Township Board Study Sessions, and others as requested; 6. Client Service, Employee/Retiree Service and Education a. Communicate and provide updates regarding the performance of the assets, as well as special meetings that may be necessary from time to time; b. Report any significant changes in the firm's ownership, organizational structure and personnel in a timely manner; c. Provide all other investment advisory related services as requested; Provide education to Township on investment issues. d. Provide group and individual meetings to Township employees and retirees as requested. At a minimum: a. Individual meetings when new employees are hired b. Individual meetings throughout employees career c. Individual meetings for retired employees d. Annual group meetings of which there may be 3-5 different groups e. Typical year has been individual meetings f. Meetings are not restricted to the employee/retiree and Township sponsored plans. They should include the spouse, and all assets and plans of the family to be able to give an overall strategy and advisement. e. Please outline a current education plan you implemented with one of your clients. Include the frequency, topics covered and delivery method. f. Provide plan for employee satisfaction results reporting to the Township. IV. TECHNICAL PROPOSAL 1. Describe your firm s investment management philosophy and distinguishing characteristics of your philosophy or strategy. 2. Identify and provide background information on the key person(s) who take the most active role(s) in the administration and management of the firm. 3. Identify the investment professionals (portfolio managers, analysts, and researchers) employed by your firm, by classification, and specify the average number of accounts handled by portfolio managers. Are there any established limits on accounts or assets under management? 4. Provide resumes and biographical information on key investment professionals that will be directly involved in the decision-making process for the portfolio. Include the number of years at your firm, total years of experience, and professional licenses and designations. Include the number of accounts managed and any limits on this. 5. Describe your firm s training and education efforts to keep portfolio managers informed of developments relevant to government investment managers. 6. Has there been any turnover of professional staff in the firm in the last three years assigned to public sector clients? 7. Describe the investment options your firm has access to and how the investment process will be facilitated. Include list of number of investment managers/options available through your current platform. 8. Describe your firm s investment process. 4

7 9. Describe your methods and capabilities in reviewing and/or recommending investment policies and guidelines. 10. Discuss your asset allocation experience and capabilities. 11. Do you provide specific asset allocation recommendations as part of your services? If so, please provide details. 12. Describe the investment program/options you are proposing, based on the Township s objectives, including the type of securities you propose to purchase, how the funds will be managed after the initial investments are made and the recommended method and frequency for rebalancing the portfolio. 13. State any surrender, claw back, withdrawal or deferred sales charges within the products of your proposal, if any. Are any additional fees to be netted from fund performance? If yes, please describe such fees in detail. 14. Describe the systems that are in place to ensure that portfolio managers are in adherence to client guidelines/policies. 15. State how quickly your firm is able to provide accurate, final asset and transaction statements following month-end. 16. Describe your firm s online capabilities and ability to deliver monthly portfolio reports electronically. 17. Include description of your firm business practice for the following: a) The back-up procedures you will have in place when the key investment professionals listed in above are unavailable. b) Whether portfolio managers work individually or in teams. c) How do portfolio managers and research analysts interact in the investment process? d) How are client objectives used to shape your investment management process? 18. Provide three client references of similar size. One should be a new client within the last 12 months, and the other two should be clients for at least the past 3 years. 19. In the past 36 months, how many Third Party Administrator (TPA) / Recordkeeper / Trustee searches have you conducted for the 401(a) and 457(b) plans your firm supports? 20. Are your proposed investments registered? 21. Describe any SEC, NASD, or regulatory censure or litigation involving your firm or its employees with the past three years. 22. Describe your advisory services. Are there any additional charges for this service? 23. Describe your firm s disaster recovery plan and business continuity strategy. 5

8 V. COST PROPOSAL Submit a complete and detailed fee proposal of any and all fees, including fee duration and guarantees. Your response should be thorough and include all charges, including charges for travel, advice, document preparation, meetings with the Township Officials and Board, meetings with employees/retirees, and any other types of charges included in your offer. Fees should be based upon all accounts, break points as the fund balances grow, and on a per account basis. VI. SUBMISSION REQUIREMENTS & CONDITIONS Requests for additional information relative to this Request for Proposal should be submitted by Wednesday, May 31, Proposals must meet the minimum requirements and may be rejected if they are conditional or incomplete. The Township reserves the right to reject any or all proposals, to allow a submitter to clarify or cure any defect in their submission, or to elect not to award any contract as a result of this competitive evaluation/selection process. Firms submitting proposals must agree to the following conditions and indicate this agreement in their submission: a. Late submissions will not be accepted. b. All costs incurred in preparing or submitting qualifications are the firm s sole responsibility. The Township will not reimburse any vendor for any costs incurred. c. The Township will treat all information submitted as available for public inspection once the execution of the contract has occurred. d. This request for proposal has been executed in the state of Michigan and shall be governed by and constructed under the laws of state of Michigan. In the event of any legal action to enforce or interpret this request for proposal, the sole and exclusive venue shall be a court of the competent jurisdictional Oakland County, Michigan. e. During the solicitation process, all forms of contact and correspondence in regard to any aspect of this solicitation shall only be with the Township Treasurer identified on page 6 of the proposal. Offeror shall not have communications with others for the purpose of restricting competition. Any alleged breach of this Section may, at The Township sole discretion, result in the rejection of the breaching Offeror s proposal. The estimated timeline for the review process is below: a. Week of July 13 th finish reviewing responses b. Week of July 24 th Committee meets to discuss c. Between 8/7 and 8/17 conduct interviews of finalists All information in a bidder s proposal and the subsequent contract is subject to the provisions of the Freedom of Information Act no.442, as amended, MCL or latest revision thereof. Two printed copies of the response to this Request for Proposal and an electronic copy must be received by 5:00 p.m. EST, on Thursday, June 15, 2017, at the following address: Brian E. Kepes, Treasurer, Charter Township of Bloomfield 4200 Telegraph Rd, Bloomfield Hills, MI Telephone (248) bekepes@bloomfieldtwp.org 6