भ रत ह व इल क ट र कल स ललल ट ड क र प र ट क र लर BHARAT HEAVY ELECTRICALS LIMITED CORPORATE OFFICE

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1 To- (All Life Insurance Companies) No. AA: HR: BHEL Pension Scheme Date: Closing Date: Time by: 3 PM Dear Sir, Sub: Expression of Interest (EOI) for Fund Managers cum Annuity Providers for BHEL Employees Superannuation Benefit Fund BHEL is the largest Engineering and Manufacturing enterprise of India in the energy & infrastructure related sectors. BHEL was established more than 40 years ago and manufactures over 180 products under 30 major product groups and caters to core sectors of the Indian economy viz., Power Generation & Transmission, Industry, Transportation, Renewable Energy, Defence etc. The wide network of BHEL s 17 Manufacturing Units, 2 Repair Units, 4 Power Sector Regions, 8 Service Centers, 15 Regional Offices, 1 Subsidiaries and more than 150 Project Sites spread all over India and abroad enables the Company to provide most suitable products, systems and services efficiently and at competitive prices. BHEL s vision is to be A global engineering enterprise providing solutions for a better tomorrow. The Company has managed to sustain its leadership position and is ready to embark on a new phase of dynamic growth. BHEL is a Maharatna PSU and a Limited Company registered under the Indian Companies Act 1956 and its stock is listed with BSE and NSE. Presently 63.06% is held by GOI (promoter), 32.61% is held by Institutions and 4.33% by others. BHEL (hereinafter may also be called as the Company) has realized the capability to deliver 20,000 MW p.a. power equipment capacity. The Company has achieved a Turnover of 40,338 Crores in FY Based on the DPE instructions, which have allowed upto 30% of Basic pay plus DA for four elements of superannuation benefits viz. CPF, Gratuity, Pension and Post Retirement Medical Benefits to its employees, a Pension Scheme has been implemented in BHEL. The Company has formed a Trust, BHEL Employees Superannuation Benefit Fund (herein after may also be called as the Trust ) which will be dealing with respective Fund Managers for management of the Funds contributed by the Company every year. The said Trust will also assist in providing Pension Corpus to the eligible employees/ beneficiary for purchase of Annuities from the Annuity Providers upon cessation from service of the Company including death, as approved in the BHEL Pension Scheme. The Copy of the BHEL Employees Scheme is enclosed. The said Trust also assists in providing Pension Corpus to the eligible employees/ beneficiary for purchase of Annuities from the Annuity Providers upon cessation from service of the Company including death, as approved in the BHEL Pension Scheme. 1

2 BHEL invites Expression of Interest (EOI) from the interested Insurance Companies registered with the IRDA having IRDA approved Group Pension Products on traditional platform on , to select and appoint minimum of five nos. to a maximum of Ten Insurance Companies as Fund Managers cum Annuity Providers. The detailed EOI document containing role & responsibilities of Fund manager and Annuity Provider, Pre-Qualification and Evaluation criteria s of offers for appointment of Fund Manager and Annuity Provider, General Terms & Conditions etc. is enclosed. Insurance Companies interested in the EOI for appointment of Fund Manager/ Annuity Providers may submit their offers containing Part I Technical cum commercial offer & Part II Evaluation for empanelment as Fund Manager cum Annuity Provider offers in two separate envelopes, both of these two envelopes be then kept into another envelope super-scribed as EOI for BHEL Employees Superannuation Benefit Fund addressed to Sr. Manager (HR) Corporate HR & Secretary BHEL Employees Superannuation Benefit Fund, BHEL Corporate Office, Siri Fort New Delhi; and submit the same in TENDER BOX provided for the purpose on or before, Date up to 3:00 p.m. Any EOI(s) received after the specified time of their Submission shall be treated as Late EOI and shall not be considered under any circumstance. The prospective bidders are advised to visit BHEL web site for update on the Expression of Interest including modification of terms & conditions of the EOI document before the due date of offer submission. The sealed covers received on or before the due date and time i.e by 3 PM shall be opened at 3.30 p.m. on or such extended time if so communicated by BHEL, in the presence of the representatives (one each) of the interested Insurance Companies who have submitted their sealed cover and want to be present. Thanking You, Yours faithfully, for and on behalf of Bharat Heavy Electricals Limited (Manoj Singh) Sr. Manager (HR) & Secretary- BHEL Employees Superannuation Benefit Fund Encl: As above 2

3 Annexure-1 Special Terms & Conditions of Empanelment of Fund Manager cum Annuity Provider The Trust intends to select and appoint a minimum of five nos. and a maximum of Ten Insurance Companies as Fund Managers- cum-annuity Providers out of the Insurance Companies having IRDA approved Group Pension Products on traditional platform as on , based on evaluation criteria specified at Annexure- 2 & 3. In a scenario where top five Fund Managers happen to be the top five annuity providers, the total no. of Fund Manager cum Annuity Provider will get restricted to five nos. only. Accordingly, based on the evaluation criteria there will be a minimum of five and a maximum of ten Fund Manager cum Annuity Providers. 1. Roles and Responsibilities of Fund Manager(s) The Five Fund Managers will be identified out of the Insurance Companies registered with the IRDA having IRDA approved Group Pension Products on traditional platform on , through the selection process by the Company will be managing the funds for a term of five years from the date of appointment or till whichever occurs later. However, BHEL reserves the right to terminate the contract and go for fresh empanelment at any time before the expiry of the above mentioned period of 5 years. Insurance companies interested in appointment as Fund Manager, as a Pre-Qualification, must have IRDA approved annuity product with options LA-ROC & JLA ROC, as Group/ retail product. The selected Fund Managers with whom the funds will be placed will have to re-invest the funds in the Group Pension Products on traditional platform. The monthly/ quarterly/ half yearly/ annual statement giving the details of inflows and outflows will have to be submitted by the Fund Managers. On behalf of the eligible beneficiary and based on the advice of the Secretary /Trust for the purpose, the Fund Manager will transfer the Pension Corpus to Annuity Provider(s) for purchase of Annuities through NEFT/ electronically within 2-3 working days from the receipt of the authorization by Post/ / Fax. Pension corpus as stated above may also be advised to be released by the Trust in parts with a time gap. Therefore, Annuity Providers, in such an event, will be issuing more than one annuity account for a single beneficiary. The contact details including the name and full address of the dealing officials in the Insurance Company will have to be indicated by the Fund Manager who will be dealing with the Trust. In case of change in the contact details the same will be promptly communicated to the Trust. Initial contribution & contribution received during the empanelled period will be allocated amongst the appointed Fund Managers. In addition, Token amount as mentioned in the EOI shall also be allocated to the appointed Annuity Providers who are not the top ranking Fund Managers but rank high for being empanelled as Annuity Providers. Such appointed Annuity Providers will not be considered for the purpose of re-distribution and / or additional contributions during the period of empanelment. Allocation of funds, i.e. initial & periodic contributions received from the Company, 3

4 to appointed fund managers will be decided by BHEL Superannuation Benefit Trust from time to time in the pre-determined ratio. Similarly, withdrawal of funds during empanelled period (i.e. upto & then during the subsequent years) will be effected as per pre-determined criteria decided by BHEL Superannuation Benefit Trust from time to time. However, BHEL reserves the right during the period of contract, to withdraw the Fund from the Fund Manager(s) in case of non/ under performance even under good Market conditions and place such Fund(s) with any other Fund Manager(s) after giving one month s notice. Monthly statement of the Fund and monthly/quarterly/ half- yearly/ annual statement will be submitted by the Fund Manager(s). There will be a monthly /fortnightly/ weekly meeting of the Fund managers and Trustees/ Company representatives. By virtue of being selected as Fund Managers, these five Insurance Companies will get selected automatically as Annuity Providers. 2. Roles and Responsibilities of Annuity Provider(s) In addition to five Funds Managers who by virtue of being selected as Fund Manager get empanelled as Annuity Provider with the Company/Trust, a maximum five Annuity Providers may also be identified out of the Insurance Companies having IRDA approved Group Annuity Products on traditional platform as on in case they happen to rank higher in the evaluation for annuity providers. In a scenario where top five Fund Managers happen to be the top five annuity providers, the total no. of Fund Manager cum Annuity Provider will get restricted to five nos. only. Accordingly there will be a minimum a five and a maximum of ten Fund Manager cum Annuity Providers. The five annuity providers so selected will remain empanelled for a term of five years from the date of appointment for immediate annuities or till whichever occurs later. However, BHEL reserves the right to terminate the contract and go for fresh empanelment at any time before the expiry of the above mentioned period of 5 years. Insurance companies interested in appointment as Annuity Provider, as a Pre-Qualification, must have IRDA approved annuity product with two options viz. LA-ROC,JLA- ROC, as Group product. For appointment as Annuity Provider only these two annuity options shall be evaluated. However, besides these two options, insurance companies may also offer annuity options of Life Annuity( LA) and Joint Life Annuity (JLA) as group annuity product. No other annuity options is permissible to be offered to beneficiaries. To de-panel the Annuity Provider(s) in case of withdrawal of approval/ de-registration/ imposition of penalty or deficient services to Annuity purchases which in the sole opinion of BHEL/ Trust are serious enough to invite such action against the Annuity Provider(s). 4

5 On being eligible for Pension Corpus, on behalf of the beneficiary and based on the authorization received for the purpose, the Fund/ Trust will transfer the Pension Corpus to Annuity Provider(s) specifying selected annuity option(s) for purchase of Annuities. Pension corpus as stated above may be released by the Fund in parts with time gaps. Based on receipt of the pension corpus, annuity providers will issue more than one annuity account for disbursement of annuities. The annuity providers will issue a separate annuity certificate to all annuitants against each annuity account containing detailed terms & conditions. Scrutiny of the documents/ Forms for purchase of annuity filled by the employee/ beneficiary will have to be completed and deficiencies, if any, communicated to the Trust by the Annuity provider within a period of 2 to 3 working days from the date of receipt of Pension Corpus from the Fund Manager. The Annuities as per option given by the beneficiary/ employee will be issued by the Annuity Provider within 10 working days from the date of receipt of documents complete in all respects. Any employee/ beneficiary shall have the option to add any of own sum directly to the Annuity provider while purchasing Annuity out of the Pension corpus, the Annuity Provider will have no objection to such additional purchases and will apply the same rate as indicated under the scheme. BHEL has developed a web based portal for its retired employees/ beneficiaries for applying for pension and all annuity providers will be provided a system generated application form duly signed by the applicant for purchase of annuities. Annuity providers will be required to upload pension data on the portal in respect of cases processed by them on a monthly basis. Annuity providers may have an option to integrate their IT based application with BHEL Pension Portal. Also after remittance of pension corpus (purchase price) to annuity provider and start of the pension (annuity), all matter related to nomination(s), change in bank accounts and return of capital to nominee etc. will be directly dealt by annuity providers with the annuitants and / or the registered nominees. The Fund (Trust) will not be involved in any issues after commencement of pension/ disbursement of annuities. The Annuity Provider will be called for a review meeting in respect of the pending claims/ discussion on issues raised by the employees/ beneficiaries on a Fortnightly / monthly basis. The Annuity Provider will have to provide the details of the dealing officials in the identified branches who will be dealing with BHEL Trust. Since the retirement date in BHEL is 24 th of the month, the Annuity Options and the specific applicable rates will be provided by the Annuity Providers to BHEL on a monthly basis latest by 10 th of the same month to enable the employees to exercise the options. Further, the annuity rates will remain valid till the end of the month. The employee / beneficiary from BHEL have been given an option under the Pension Scheme to select maximum two Annuity Provider(s) for purchase of annuity. 5

6 Annexure-2 PRE QUALIFICATIION CRITERIA FOR APPOINTMENT OF FUND MANAGER CUM ANNUITY PROVIDER As pre-qualification for the Expression of Interest (EOI), the Insurance Companies, having Group Pension Products on traditional platform and duly approved by IRDA, will be required to unconditionally agree for all of the following conditions failing which their application will stand summarily rejected. Pre- Qualification Criteria- Confirmation in Affirmative for following conditions: 1. Confirmation of having Group Pension Products on traditional platform and duly approved by IRDA and in vogue (i.e. allowing enrollment of new members) 2. Initial the policy term will be for a period of more than One year upto Thereafter, the policy shall be renewed on an annual basis. Accordingly initial funds & contribution received during the initial policy term shall be allocated to empanelled fund managers only as per criteria specified at Annexure- 3 Part A & B. During the subsequent renewed policy term(s), re-distribution of funds amongst empanelled fund managers shall be done based on criteria specified at Annexure - 3 Part C. Since such redistribution of funds shall happen only after the maturity of the policy term, it will not be termed as bulk exits and surrender, hence, provisions of Market Value Adjustment (MVA) shall not be attracted. Further since vesting/ withdrawal from invested funds by the Trust for purchase of annuities by beneficiaries is NOT termed as bulk exits and surrender, provisions of Market Value Adjustment (MVA), in such cases, shall not be attracted. Those of the insurance companies who agree to this condition in to-to will be preferred for selection as fund manager for bulk of the funds since it is clearly in advantage of the trust & retired employees. Accordingly on or after , funds initially placed and also periodic contribution placed for more than one year shall be re-distributed amongst the fund managers. The respective Insurance Company(s) will have to provide waiver of the applicability of Market Value Adjustment (MVA) in cases of withdrawal of funds which were placed for a period of more than one year and being withdrawn for re-distribution as per criteria specified at Annexure- 3 part C. 3. Returns to fund invested shall be net of all charges hence there shall be no separate fund management charges, 4. The empanelled period being initially for five years, there shall be no surrender charges. 6

7 5. There shall be no entry and exit charges/ load. 6. Since no brokerage is involved, there shall be no administrative charges. Otherwise also no administrative charges is payable. 7. Initial Policy term will be upto Thereafter, the policy shall be renewed on annual basis. 8. There shall be No Lock-In period 9. Interest accrued on fund invested on annual basis shall be inclusive of Minimum Floor Rate, non-negative additional interest and non- negative residual additions and any other additions, if any. 10. Insurance companies interested in appointment as Fund Manager, as a Pre-Qualification, must have IRDA approved annuity product with options LA-ROC & JLA ROC, as Group/ retail product. Insurance companies interested in appointment as Annuity Provider, as a Pre-Qualification, must have IRDA approved annuity product with two options viz. LA-ROC,JLA- ROC, as Group product. For appointment as Annuity Provider only these two annuity options shall be evaluated. However, besides these two options, insurance companies may also offer annuity options of Life Annuity( LA) and Joint Life Annuity (JLA) as group annuity product. No other annuity options is permissible to be offered to beneficiaries. 11. Insurance company should not be Black-Listed by any other CPSE and / or Central Govt. organization. In case a bidder is Black-Listed by any other CPSE and / or Central Govt organization, such a fact should be brought to the notice of BHEL as part of the bid or during the process of evaluation as the case may be. Such a bidder will automatically stand disqualified for evaluation for empanelment as Fund Manager cum Annuity Provider. If it comes to the notice of the Trust at a later date that the bidder had suppressed the facts of it being black-listed by any other CPSE and /or Central Government Organization, the Insurance Company will automatically cease to be a Fund Manager and the fund invested with such an insurance company shall be withdrawn along with the interest accrued based on last declared rates and such withdrawal will not attract Market Value Adjustment (MVA). Further, suitable action in line with the Company s Policy will be taken against such Insurance Company. However the annuities issued to beneficiaries will not get affected. Insurance Companies, having affirmative answers to conditions stipulated in Pre- Qualification, will only qualify for the evaluation for empanelment as Fund Manager cum annuity providers. Those of the insurance companies who agree to condition stipulated above w.r.t. MVA, in to-to will be preferred for selection as fund manager for bulk of the funds since it is clearly in advantage of the trust & retired employees. Part II envelope of only such Insurance Companies shall be opened. 7

8 Annexure-3 CRITERIA FOR EVALUATION OF OFFERS FOR FUND MANAGER, ANNUITY PROVIDER Insurance Companies, having affirmative answers to conditions stipulated in Pre-Qualification, will only qualify for the evaluation for empanelment as Fund Manager cum annuity providers. Such qualifying Insurance Companies will be evaluated for appointment as Fund Manager and Annuity Provider separately: A. Initial Evaluation for empanelment as Fund Manager 100 marks S.No. Criteria Weightage Parameter / verification 1. Group Traditional (Fund Based) Plans- Asset Under Management (As on ) 25 Group Traditional (Fund Based) Plans- Asset Under Management other than Annuity. This shall comprise of AUM of Employer-employee related policies only. Note: Such group traditional plans may be having different names in Companies as per Product Approval by IRDA 1(i) Group Traditional (Fund based) Plans- Asset Under Management (Annuity Only) (for information only) Group Traditional(Fund Based) Plans- Asset Under Management (Annuity) 2. Net worth net of accumulated losses (As on ) 10 Annual Report Disclosures 3. Returns/ interest declared in traditional plans for a corpus invested on actual case basis (other than guaranteed returns) ( Insurance Company shall provide evidence in the format given along with contact details for placement of funds of having been appointed as Fund Managers for the specified corpus against which the returns are being furnished by them. Wherever evidence in the form of work order for placement of funds is not attached, the same will be treated as NIL and ranked accordingly.) For evaluation for appointment as Fund Manager, funds invested as Pension Funds are only to be reckoned. Average return of only Non- Guaranteed returns are to be provided for evaluation. *Since new pension products were not vogue during entire FY with most of insurance companies, all insurance companies shall furnish returns in respect of the last four quarters, ending for new products. i). Upto 25 Crs : 2.25 Avg. annual Interest accrued in last three FY (old products), (Old products), (New products) : * : 4.50 ii). Above 25 Crs. to 50 Crs : 2.75 Avg. annual Interest accrued in last three FY (old products), (Old products), (New products) :

9 * : 5.50 iii). Above 50 Crs. to 100 Crs : 3.25 Avg. annual Interest accrued in last three FY (old products), (Old products), (New products) : * : 6.50 iv). Above 100 Crs. to 200 Crs : 3.75 Avg. annual Interest accrued in last three FY (old products), (Old products), (New products) : * : 7.50 v). Above 200 Crs : 4.25 Avg. annual Interest accrued in last three FY (old products), (Old products), (New : 4.25 products) * : 8.50 Format for reference for clients: Corpus invested Fin.Year Rate of actual interest / returns declared Nature returns of (Non Guaranteed/ Guaranteed) Name of client Contact details of client (Ph. No.) Address details B. Initial Evaluation for empanelment as Annuity Provider 100 marks S.No. Criteria Weight-age Parameter 1. Group Traditional (Fund Based) Plans- Asset Under Management(As on ) Note: Such group traditional plans may be having different names in Companies as per Product Approval by IRDA 2. Net worth net of accumulated losses (As on ) 30 Group Traditional (Fund Based) Plans- Asset Under Management other than Annuity. This shall comprise of AUM of Employeremployee related policies only. 10 Annual Report Disclosures 3. Avg. annuity rates for last three years per hundred rupees of corpus (without any incentive on amount of corpus) (only for information) Avg. return in last three fin. Yrs. Reference age for returns/rates: 60 Years 9

10 i). Life Annuity with Return of capital 20 Avg. return in last three fin. Yrs. ii). Joint Life Annuity with Return of capital 20 Avg. return in last three fin. Yrs. 3 Incentive on individual corpus - 3(i) Less than /- 2 Additional Avg. return in last three fin. Yrs. 3(ii) 250,000/- to 499,999/- 2 Additional Avg. return in last three fin. Yrs. 3(iii) 5,00,000/- to 7,49,999/- 2 Additional Avg. return in last three fin. Yrs. 3(iv) 8,00,000/- & 9,99,999/- 2 Additional Avg. return in last three fin. Yrs. 3(v) 10,00,000/- & above 2 Additional Avg. return in last three fin. Yrs. 4. Incentive on total corpus remitted during the year- 4(i) Less than 2.5 Crs. 2 Additional Avg. return in last three fin. Yrs. 4(ii) Above 2.5 Crs up to 10 Crs. 2 Additional Avg. return in last three fin. Yrs. 4(iii) Above 10 Crs. upto 25 Crs 2 Additional Avg. return in last three fin. Yrs. 4(iv) Above 25 Crs. upto 50 Crs 2 Additional Avg. return in last three fin. Yrs. 4(v) Above 50 Crs. upto 100 Crs 2 Additional Avg. return in last three fin. Yrs. C. Evaluation Criteria for Fund re-distribution amongst Top Five Fund Managers at the time of renewal of policy on or after S. No. Criteria Weightage Parameter / verification Details submitted by the Insurance Company Marks awarded 1. Group Traditional (Fund Based) Plans- Asset Under Management (During Last FY at the time of evaluation) Note: Such group traditional plans may be having different names in Companies as per Product Approval by IRDA 25 Group Traditional (Fund Based) Plans- Asset Under Management other than Annuity. This shall comprise AUM of Employer-employee related policies only. 1(i) Group Traditional (Fund based) Plans- Asset Under Management (Annuity Only) (For information only) Group Traditional (Fund Based) Plans- Asset Under Management (Annuity). 2. Net worth net of accumulated losses (During Last FY at the time of evaluation) 10 10

11 3. Returns/ interest declared in traditional plans for a corpus of given hereunder: Net %age returns declared on corpus allocated to them by BHEL Trust during the last one year ending and thereafter on an annual basis. 65 Net incremental amount on funds invested to be provided Other Important Instructions: Based on the information furnished by the bidders against each of the criterion, the bidders with highest figure will be marked as 1,2,3.. The respective weights will then be multiplied to the marks so assigned. The resultant figure for each of the criteria shall be totalled. The totals so arrived at will be finally ranked from lowest total to the highest (where the lowest total will be ranked as final number 1 rank). Accordingly based on evaluation criteria specified at Annex 3 A, top five Fund Manager and as per evaluation criteria specified at Annexure 3 B top five Annuity Providers will be selected. 11

12 Annexure-4 GENERAL TERMS & CONDITIONS FOR APPOINTMENT OF FUND MANAGER CUM ANNUITY PROVIDER 1.0 SUBMISSION OF EOI The information submitted should be complete in all respects. Proposals on company s letterhead with required details and documents should be either typed or written legibly in English. Alterations/ overwriting, if any, in the profile/ proposal should be authenticated by the person signing the profile/ proposal. 2.0 COST OF DOCUMENT NIL 3.0 INCOMPLETE EOI Incomplete EOIs, which do not contain all the information called for with supporting documents and/ or any addition/ deletion in the EOI document/ Annexures not authenticated as stated in S. No 1.0 above are liable to be rejected. 4.0 SELECTION PROCEDURE The Trust shall empanel maximum Five Fund Managers through the selection process for managing the funds for a period of five years from the date of appointment or whichever occurs later. In addition to the max. Five Funds Managers, maximum Five annuity providers will also be appointed who will be allocated 1% of the initial contribution for five years period of empanelment as Annuity Provider as stated above. However BHEL reserves the right to terminate the contract and go for fresh empanelment at any time before the expiry of the above mentioned period of 5 years. For selection of the Insurance Companies to be appointed as Fund Managers and forming a Panel of Annuity Providers, procedure detailed at Annexure - 3 Part A & B shall be adopted: a). Fund Managers: Initial contribution & contribution received from the Company during the empanelment period will be invested with appointed five fund managers as per predetermined criteria. b). Panel of Annuity Providers: In addition to five Funds Manager who by virtue of being selected as Fund Manager get empanelled as Annuity Provider with the Company/Trust. A maximum of Five Annuity providers may also be identified out of the 12

13 Insurance Companies having IRDA approved Group Annuity Products on traditional platform as on in case they happen to rank higher in the evaluation for annuity providers. In a scenario where the top five Fund Managers happen to be the top five annuity providers, the total no. of Fund Manager cum Annuity Provider will get restricted to five nos. only. Accordingly, there will be a minimum of five and a maximum of ten Fund Manager cum Annuity Providers. 5.0 SHARING OF BUSINESS FUND MANAGEMENT (INITIAL & SUBSEQUENT CONTRIBUTION) 5.1 PLACEMENT OF FUNDS WITH FUND MANAGERS: Based on the criteria specified at Annexure- 3 Part A & B, 95 % of the initial funds will be placed with top five Fund Managers in the ratio of 29%, 24%, 19%, 14% and 9 % i.e. Scheduled Allocation within a period of 30 days from selection. Balance 5% of initial fund would be invested with top five insurance companies selected as annuity providers with 1% of the fund each, based on the criteria specified for selection of Annuity Providers. The periodic contribution received during the period upto will be distributed in totality amongst the said Five Fund Managers only. For effecting such a distribution, the above ratios (i.e. 29%, 24%, 19%, 14% and 9 %), will be extrapolated for 100% and funds distributed accordingly. In case top five fund managers happen to be top five annuity providers, the total no. of Fund Manager cum Annuity Providers will get restricted to Five Nos. only as mentioned above. In such a case, 1% of fund earmarked for 5 annuity provider(s) will also be allocated to the top 5 Fund Managers only. However, the fund allocated for investment will not exceed 10% of the Group Traditional Asset Under Management (AUM) of the Insurance Company excluding Annuity, at the time of fund allocation. In case any of the Fund Manager is not able to get the Scheduled Allocations percentage due to ceiling of AUM or due to any other reason, the residual amount shall be allocated to the other Fund Managers in the ratio of Scheduled allocation i.e. 29%, 24%, 19%, 14% and 9 %, extrapolated to 100%. Accordingly on and annually thereafter, funds placed / redistributed and also periodic contribution placed for more than one year shall be re-distributed amongst the five fund managers based on the ranking arrived as per criteria specified at Annexure- 3 /Part C. Contribution from the Company, received by the fund beyond and annually thereafter will also be transferred in the ratio of Scheduled allocation i.e. 29%, 24%, 19%, 14% and 9 %, extrapolated to 100%. The incremental returns being credited on annual basis would have to comprise of minimum floor rate, non-negative additional interest, non-negative residual additions and other additions, if any. The exercise for re-distribution of funds amongst the appointed funds managers shall occur for the first time on or after and the funds shall be placed on or before Thereafter this exercise for re-distribution shall be carried out on or after 31 st 13

14 May every year and redistributed funds shall be placed with fund managers on or before 30 th June every year. 5.2 WITHDRAWAL OF FUNDS FOR DISBURSEMENT OF PENSION CORPUS TO BENEFICIARIES FOR PURCHASE OF ANNUITIES During the period upto withdrawal of funds from the appointed fund managers (& not annuity providers) will be in the reverse order of initial percentage allocation of funds i.e. 9%, 14%,19%, 24% & 29%. Beyond , withdrawal of funds for Pension Corpus payout will be as per reverse order of the ratio of Scheduled allocation i.e. 9%, 14%,19%, 24% & 29%, extrapolated to 100%, at the time of re-distribution (Ref. criteria Annexure-3 Part C). Meaning thereby that higher withdrawal in %age terms will be from the fund manager, who has given least %age incremental returns on annual basis and are scoring lower Marks based on Asset Under Management & Net worth as specified at Annexure-3 part C. Thus initial ratio of distribution of funds will undergo a change on periodic basis at the time of each renewal term of the policy. 6.0 VALIDITY (a) For Fund Management: The Fund Managers identified through this methodology will be managing the funds initially for a term of five years from the date of appointment or whichever occurs later. (b) For panel of Annuity Providers: The first panel shall be valid for a term of five years or whichever occurs later and will be revised periodically as deemed fit. However BHEL reserves the right at any time during the period above to impose the following actions after giving one month s notice: a) To withdraw the Fund from the Fund Manager(s) in case of his non/ under performance even under good Market conditions and /or withdrawal of approval/ de-registration/ imposition of penalty by IRDA or any actions which in the sole opinion of BHEL/ Trust are serious enough to invite such action. The amount so withdrawn along with interest accrued till the date of withdrawal (based on the last interest declared for the funds invested by BHEL) and without applying MVA shall be placed by BHEL Trust with the other Fund Managers. For effecting such a distribution, the applicable ratios i.e. 29%, 24%, 19%, 14% and 9 %, extrapolated to 100%.will be extrapolated for 100% and funds distributed accordingly. b) To de-panel the Annuity Provider(s) in case of withdrawal of approval/ deregistration/ imposition of penalty or deficient services to Annuity purchasers which in the sole opinion of BHEL/ Trust are serious enough to invite such action against the Annuity Provider(s). 14

15 7.0 AUTHORISED OFFICER OF BHEL ED (HR&CC) shall be the authorized authority and his decision shall be final and binding with regard to the EOI. 8.0 CONFIDENTIALITY The Insurance Companies shall keep confidential and shall not, without the written consent of BHEL, divulge to any third party any document, data or other information furnished directly or indirectly by BHEL hereto in connection with the EOI. The Insurance Companies shall not use such documents, data and other information received from BHEL for any purpose other than purpose mentioned in the EOI. 9.0 ARBITRATION (i) In the event of any dispute, difference, controversy or claim arising out of or in any way relating to this EOI, the Parties shall endeavor to resolve such dispute or disagreement through mutual discussions conducted in good faith. If the Parties fail to arrive at a mutual settlement within thirty (30) days after receipt by a Party of written notice from the other Party informing that such dispute or disagreement exists, the same shall be referred to arbitration under the Arbitration & Conciliation Act, The arbitration shall be conducted by a sole arbitrator who shall be appointed by ED (HR&CC), BHEL Corporate Office, BHEL House, Siri Fort, New Delhi. The seat of arbitration shall be Delhi, and shall be conducted in the English language. The award of the arbitrator shall be final and binding on the Parties. (ii) If the bidder is a Public sector enterprise, then in the event of any dispute or difference, controversy or claim arising out of or in any way relating to this EOI, the Parties shall endeavor to resolve such dispute or disagreement through mutual discussions conducted in good faith. If the Parties fail to arrive at a mutual settlement within thirty (30) days after receipt by a Party of written notice from the other Party informing that such dispute or disagreement exists, the unresolved dispute or difference shall be referred to Arbitration as per Department of Public Enterprise, Government of India Guidelines for arbitration GOVERNING LAWS AND COURT JURISDICTION The EOI shall be governed by the laws in force in India. Subject to clause 11.0 hereinabove, the Courts at Delhi, India shall have exclusive jurisdiction in regard to all claims in respect of this EOI CANCELLATION OF THE EOI 15

16 BHEL reserves the right to cancel/ scrap the EOI without assigning any reason whatsoever INTEGRITY PACT The Insurance Company should note that Integrity Pact as enclosed at Annexure F with this EOI Document shall be applicable. The Insurance Companies evincing interest shall submit integrity pact duly signed by authorized signatory of the Insurance Company. This pact shall be considered as a preliminary qualification for further participation. The independent external monitor (IEM) for this EOI process shall be: Shri D.R.S Chaudhary, IAS (Retd.) Flat No. L-202 & L-203 (1st Floor) Ansal Lake View Enclave Shamla Hills Bhopal (M.P.) dilip.chaudhary@icloud.com 13.0 Insurance Companies evincing interest shall not contact BHEL on any matter relating to the EOI after opening of the same. Any effort to influence BHEL in evaluation/ comparison or award decision may result in rejection. 16

17 INTEGRITY PACT Annexure-5 Between Bharat Heavy Electricals Ltd. (BHEL), a company registered under the Companies Act 1956 and having its registered office at BHEL House, Siri Fort, New Delhi (India) hereinafter referred to as The Principal, which expression unless repugnant to the context or meaning hereof shall include its successors or assigns of the ONE PART and, (description of the party along with address), hereinafter referred to as The Bidder/ Contractor/Insurance Company which expression unless repugnant to the context or meaning hereof shall include its successors or assigns of the OTHER PART Preamble The Principal intends to award, under laid-down organizational procedures, contract/s for. The Principal values full compliance with all relevant laws of the land, rules and regulations, and the principles of economic use of resources, and of fairness and transparency in its relations with its Bidder(s)/ Contractor(s). In order to achieve these goals, the Principal will appoint Independent External Monitor(s), who will monitor the tender process and the execution of the contract for compliance with the principles mentioned above. 17

18 Section 1 Commitments of the Principal 1.1 The Principal commits itself to take all measures necessary to prevent corruption and to observe the following principles: No employee of the Principal, personally or through family members, will in connection with the tender for, or the execution of a contract, demand, take a promise for or accept, for self or third person, any material or immaterial benefit which the person is not legally entitled to The Principal will, during the tender process treat all Bidder(s) with equity and reason. The Principal will in particular, before and during the tender process, provide to all Bidder(s) the same information and will not provide to any Bidder(s) confidential / additional information through which the Bidder(s) could obtain an advantage in relation to the tender process or the contract execution The Principal will exclude from the process all known prejudiced persons. 1.2 If the Principal obtains information on the conduct of any of its employees which is a penal offence under the Indian Penal Code 1860 and Prevention of Corruption Act 1988 or any other statutory penal enactment, or if there be a substantive suspicion in this regard, the Principal will inform its Vigilance Office and in addition can initiate disciplinary actions. Section 2 Commitments of the Bidder(s)/ Contractor(s) 2.1 The Bidder(s)/ Contractor(s) commit himself to take all measures necessary to prevent corruption. He commits himself to observe the following principles during his participation in the tender process and during the contract execution The Bidder(s)/ Contractor(s) will not, directly or through any other person or firm, offer, promise or give to the Principal or to any of the Principal s employees involved in the tender process or the execution of the contract or to any third person any material, immaterial or any other benefit which he / she is not legally entitled to, in order to obtain 18

19 in exchange any advantage of any kind whatsoever during the tender process or during the execution of the contract The Bidder(s)/ Contractor(s) will not enter with other Bidder(s) into any illegal or undisclosed agreement or understanding, whether formal or informal. This applies in particular to prices, specifications, certifications, subsidiary contracts, submission or nonsubmission of bids or any other actions to restrict competitiveness or to introduce cartelization in the bidding process The Bidder(s)/ Contractor(s) will not commit any penal offence under the relevant IPC/ PC Act; further the Bidder(s)/ Contractor(s) will not use improperly, for purposes of competition or personal gain, or pass on to others, any information or document provided by the Principal as part of the business relationship, regarding plans, technical proposals and business details, including information contained or transmitted electronically The Bidder(s)/ Contractor(s) will, when presenting his bid, disclose any and all payments he has made, and is committed to or intends to make to agents, brokers or any other intermediaries in connection with the award of the contract. 2.2 The Bidder(s)/ Contractor(s) will not instigate third persons to commit offences outlined above or be an accessory to such offences. Section 3 Disqualification from tender process and exclusion from future contracts If the Bidder(s)/ Contractor(s), before award or during execution has committed a transgression through a violation of Section 2 above, or acts in any other manner such as to put his reliability or credibility in question, the Principal is entitled to disqualify the Bidder(s)/ Contractor(s) from the tender process or take action as per the separate "Guidelines on Banning of Business dealings with Suppliers/ Contractors". framed by the Principal. Section 4 Compensation for Damages (NOT APPLICABLE) 4.1 If the Principal has disqualified the Bidder from the tender process prior to the award according to Section 3, the Principal is entitled to demand and recover the damages equivalent Earnest Money Deposit/Bid Security. 19

20 4.2 If the Principal has terminated the contract according to Section 3, or if the Principal is entitled to terminate the contract according to section 3, the Principal shall be entitled to demand and recover from the Contractor liquidated damages equivalent to 5% of the contract value or the amount equivalent to Security Deposit/Performance Bank Guarantee, whichever is higher. Section 5 Previous Transgression 5.1 The Bidder declares that no previous transgressions occurred in the last 3 years with any other company in any country conforming to the anti-corruption approach or with any other Public Sector Enterprise in India that could justify his exclusion from the tender process. If the Bidder makes incorrect statement on this subject, he can be disqualified from the tender process or the contract, if already awarded, can be terminated for such reason. Section 6 Equal treatment of all Bidders/ Contractors/ Sub-contractors 6.1 The Bidder(s)/ Contractor(s) undertake(s) to obtain from all subcontractors a commitment consistent with this Integrity Pact and report Compliance to the Principal. This commitment shall be taken only from those sub-contractors whose contract value is more than 20 % of Bidder s/ Contractor s contract value with the Principal. The Bidder(s)/ Contractor(s) shall continue to remain responsible for any default by his Sub-contractor(s). 6.2 The Principal will enter into agreements with identical conditions as this one with all Bidders and Contractors. 6.3 The Principal will disqualify from the tender process all bidders who do not sign this pact or violate its provisions. Section 7 Criminal Charges against violating Bidders/ Contractors /Subcontractors If the Principal obtains knowledge of conduct of a Bidder, Contractor or Subcontractor, or of an employee or a representative or an associate of a Bidder, Contractor or Subcontractor which constitutes corruption, or if the Principal has substantive suspicion in this regard, the Principal will inform the Vigilance Office. 20

21 Section 8 Independent External Monitor(s) 8.1 The Principal appoints competent and credible Independent External Monitor for this Pact. The task of the Monitor is to review independently and objectively, whether and to what extent the parties comply with the obligations under this agreement. 8.2 The Monitor is not subject to instructions by the representatives of the parties and performs his functions neutrally and independently. He reports to the CMD, BHEL. 8.3 The Bidder(s)/ Contractor(s) accepts that the Monitor has the right to access without restriction to all contract documentation of the Principal including that provided by the Bidder(s)/ Contractor(s). The Bidder(s)/ Contractor(s) will grant the monitor, upon his request and demonstration of a valid interest, unrestricted and unconditional access to his contract documentation. The same is applicable to Sub-contractor(s). The Monitor is under contractual obligation to treat the information and documents of the Bidder(s)/ Contractor(s) / Subcontractor(s) with confidentiality. 8.4 The Principal will provide to the Monitor sufficient information about all meetings among the parties related to the contract provided such meetings could have an impact on the contractual relations between the Principal and the Contractor. The parties offer to the Monitor the option to participate in such meetings. 8.5 As soon as the Monitor notices, or believes to notice, a violation of this agreement, he will so inform the Management of the Principal and request the Management to discontinue or take corrective action, or heal the situation, or to take other relevant action. The Monitor can in this regard submit non-binding recommendations. Beyond this, the Monitor has no right to demand from the parties that they act in a specific manner, refrain from action or tolerate action. 8.6 The Monitor will submit a written report to the CMD, BHEL within 8 to 10 weeks from the date of reference or intimation to him by the Principal and, should the occasion arise, submit proposals for correcting problematic situations. 21

22 8.7 The CMD, BHEL shall decide the compensation to be paid to the Monitor and its terms and conditions. 8.8 If the Monitor has reported to the CMD, BHEL, a substantiated suspicion of an offence under relevant IPC / PC Act, and the CMD, BHEL has not, within reasonable time, taken visible action to proceed against such offence or reported it to the Vigilance Office, the Monitor may also transmit this information directly to the Central Vigilance Commissioner, Government of India. 8.9 The number of Independent External Monitor(s) shall be decided by the CMD, BHEL The word Monitor would include both singular and plural. Section 9 Pact Duration 9.1 This Pact begins and shall be binding on and from the submission of bid(s) by bidder(s). It expires for the Contractor 12 months after the last payment under the respective contract and for all other Bidders 6 months after the contract has been awarded. 9.2 If any claim is made / lodged during this time, the same shall be binding and continue to be valid despite the lapse of this pact as specified as above, unless it is discharged/ determined by the CMD, BHEL. Section 10 Other Provisions 10.1 This agreement is subject to Indian Laws and jurisdiction shall be registered office of the Principal, i.e. New Delhi Changes and supplements as well as termination notices need to be made in writing. Side agreements have not been made If the Contractor is a partnership or a consortium, this agreement must be signed by all partners or consortium members. 22

23 10.4 Should one or several provisions of this agreement turn out to be invalid, the remainder of this agreement remains valid. In this case, the parties will strive to come to an agreement to their original intentions Only those bidders/ contractors who have entered into this agreement with the Principal would be competent to participate in the bidding. In other words, entering into this agreement would be a preliminary qualification For & On behalf of the Principal (Office Seal) For & On behalf of the Bidder/ Contractor (Office Seal) Place Date Witness: (Name & Address) Witness: (Name & Address) 23

24 Annexure- 6 GUIDELINES FOR SUBMISSION OF OFFERS & PROCESSING OF EXPRESSION OF INTEREST STAGE (I) EVALUATION FOR PRE-QUALIFICATION OF INSURANCE COMPANIES.. STAGE (II). EVALUATION FOR EMPANELMENT OF INSURANCE COMPANIES AS FUND MANAGER CUM ANNUITY PROVIDER (APPLICABLE ONLY FOR QUALIFYING BIDDERS AT STAGE -I) A. Offer against the Expression of Interest shall be submitted in TENDER BOX placed for the purpose of receiving the tenders in the Reception Area of the Corporate Side, at BHEL House SIRI Fort New Delhi on or before the stipulated due date & time. B. The offers shall be submitted in two parts: i. Part I Technical cum commercial offer. ii. Part II Evaluation for empanelment as Fund Manager cum Annuity Provider offer. I. Part-I : Technical cum commercial offer: The envelope shall contain the Technical cum Commercial Offer as per the enclosed proforma for technical cum commercial offer along with following other relevant documents: i. Copy of Certificate of Incorporation, ii. Copy of commencement of Business, iii. IRDA Certificate of Registration with date of Renewal, iv. Details of Joint venture Partner with Share Holding including foreign partner, v. Name of PSU clients for Employees Superannuation benefits i.e. pension, gratuity, leave encashment only. Copy of such empanelments vi. Copy of IRDA approval Group Pension Product with UIN No., vii. Details of solvency margin, viii. Number of years experience in providing Annuities, ix. Details of branches which will be servicing to BHEL employees. x. No-Deviation Certificate as per Annexure 7. xi. Confirmation of IRDA guidelines as per Annexure 8. xii. Certificate confirming that the Insurance Company has not been black-listed by any other CPSE and / or Central Government Organization as per Annexure 9. The envelope shall be super scribed Part-I: Technical cum Commercial Offer for empanelment of Fund Manager- Cum- Annuity Provider. II. The second envelope shall contain only the Annexure 6 (ii) and Annexure Annexure 6 (iii) as required for Part-II Evaluation for empanelment as Fund Manager cum Annuity Provider offer. Any other information in this Part-II shall not be considered. The envelope shall be sealed and super scribed Part-II - Evaluation offer for empanelment as Fund Managercum- Annuity Provider. Both the above two envelopes shall be kept into another sealed cover. The cover of common envelope shall be super scribed with Offer for Empanelment of Fund Manager Cum Annuity 24