State of Rhode Island 457(b) Deferred Compensation and 401(a) Defined Contribution Plans

Transcription

1 State of Rhode Island 457(b) Deferred Compensation and 401(a) Defined Contribution Plans REQUEST FOR PROPOSAL TO PROVIDE DEFERRED COMPENSATION & DEFINED CONTRIBUTION SERVICES Recordkeeping/Administration, Communication/Education, Onsite Education, Investment Advisory, Investment Management and Custodial Trustee Services Issue Date: February 14, 2017 Deadline for Questions: February 21, 2017 Deadline for RFP Submission: March 7, 2017 Copyright 2017 by The Segal Group, Inc. All rights reserved.

2 Ta b l e o f C o n t e n t s Request for Proposal to Provide Bundled Deferred Compensation and Defined Contribution Services: Recordkeeping/Administration, Communication/Education, Onsite Education, Investment Advisory, Investment Management, and Custodial Trustee Intent to Reply... 1 I. General Invitation... 1 II. State Required Information... 3 III. Scope of Services... 4 IV. Preparing Proposals: Required Information... 4 V. Evaluating Proposals... 4 VI. Confidentiality... 8 Section 1:Scope of Services Purpose/Objective Scope of Services Information Regarding the 457(b) Plan Plan Demographic Information: Fidelity Plan Demographic Information: VALIC Plan Demographic Information: Voya Investment Line-ups Information Regarding the 401(a) Plan Plan Demographic Information: TIAA Investment Line-up Goals and Objectives of the Request for Proposal Finalist Presentations Exceptions/Additions Section 2: Administrative Services Questionnaire Organization and History References Client Service/Quality Assurance Recordkeeping/Administration Systems Capabilities and Hardware Custodial Trustee Regulatory/Compliance Service Communication & Education Plan Sponsor Reporting Participant Reporting Participant Services/Automated Voice Response System (VRS) Participant Services/1-800 Customer Service Center Participant Services/Internet Services Field Service Representatives i

3 Investment Advisory Services Plan Implementation Section 3: Investment Management Services Questionnaire Investment Management Services Self-Directed Brokerage Stable Value Fund Section 4: Fees Section 5: Attachments Attachment A: Certification of Compliance with Minimum Requirements of RFP Attachment B: Certification of Compliance with Standard State Contract Section 6: Appendices A. 457(b) Plan Document B. 401(a) Plan Document ii

4 Intent to Reply Please complete the information below and send an copy of this form to Craig Chaikin at Segal Marco Advisors, regarding your intent to reply to this RFP by February 21, The State in consultation with Segal Marco Advisors will issue responses to inquiries and any other corrections or amendments it deems necessary in addenda issued prior to the Proposed Submission Deadline. Respondents should not rely on any representations, statements or explanations other than those made in this RFP or in a formal addendum. It is the respondent s responsibility to ensure receipt of all addenda. Amendments to the RFP will only be sent to those firms that complete and return this form via fax or provide the requested information by . RFP Name: State of Rhode Island 457(b) Deferred Compensation and 401(a) Defined Contribution Plans Recordkeeping and Investment Services Company name Mailing address Phone number Fax number Contact person address All amendments will be sent via . Any alterations to this document made by the respondent may be grounds for rejection of the proposal, cancellation of any subsequent award, or any other legal remedies available to the Committee. From the date this RFP is issued until the award of the contract, all communication related to this RFP shall be only directed to Segal Marco Advisors. I. General Invitation The Deferred Compensation Plan, Defined Contribution Retirement Plan and FICA Alternative Retirement Plan (FARP) for Public Employees of the State of Rhode Island ("Plans"), invites the submission of proposals for investment management, recordkeeping/administration, communication/education, investment advisory and custodial trustee services. The intent of the RFP is to identify organization(s) as described in greater detail below. Organization(s) with demonstrated experience in this area, and with an interest in making their services available to the Plans, are invited to respond to this RFP. Respondents means the organization(s) that submit their qualifications to this RFP. The documents submitted will be referred to as "Proposal." 1

5 A. General Information and Guidelines 1. Communications Between the Plan and Respondents Respondents should not communicate with the State regarding the RFP and must communicate only with Segal Marco Advisors who has been retained by the Plans to coordinated the evaluation process. Current vendors may discuss ongoing business with the State but are not permitted to discuss any aspects of this RFP. All questions or requests for clarification must be in writing, sent by , and directed to the attention of: Craig Chaikin, Vice President Segal Marco Advisors 333 West 34 th Street 5 th Floor New York NY cchaikin@segalmarco.com A Respondent that deviates from any of these restrictions is subject to immediate disqualification from this RFP process. There should be no communication, either in person, in writing, or by phone, between any respondent (or prospective respondent) and any (1) member of the State Investment Commission or staff, (2) elected officials or their staff members, or (3) any other person in a position to influence the decision of the State any time during the RFP process. Direct communication with any person who falls within the descriptions in this section in an attempt to influence the awarding of the RFP shall be considered grounds for disqualification. B. Submission of Proposals Each vendor must submit their RFP response in accordance with all stipulations listed below: Each service provider must submit a total of copies, as outlined below, by 5:00 p.m. Eastern Standard Time on March 7, 2017 to the following: Two (2) bound copies and one (1) electronic, PDF copy to: Kimberly Shockley Associate Director, College & Retirement Savings Plans 50 Service Avenue Warwick, RI Kimberly.Shockley@treasury.ri.gov One (1) bound copy and one (1) electronic, PDF copy to: Craig Chaikin, CFA Segal Marco Advisors 333 West 34 th Street, 5 th Floor New York, NY cchaikin@segalmarco.com 2

6 Proposals must be clearly labeled: Request for Proposal Response: State of Rhode Island 457(b) Deferred Compensation Plan, 401(a) Defined Contribution Retirement Plan and FICA Alternative Retirement Plan Services. RFPs received after the deadline are late and will not be considered. Respondents are responsible for ensuring that their proposals are received in a timely fashion. RFP Schedule The timetable for the selection process is summarized below. Note that these target dates are subject to change by the Plan. Key Activity Target Date RFP release February 14, 2017 Submission of vendor questions February 21, 2017 Responses to vendor questions February 28, 2017 Proposals Due March 7, 2017 Finalist Presentations Selection of vendor Week of April 17 th Week of April 17 th Recommendation to Board April 26, 2017 Board Approval April 26, 2017 Contracts Approved May 2017 Implementation/Transition October 1, 2017 II. State Required Information The selected respondents must agree to abide by all applicable Rhode Island minority hiring laws, Equal Opportunity Rules and Regulations, Executive Orders, and any and all other applicable Rhode Island employment laws, rules and regulations. The successful vendor/s will be required to be in compliance with Title 7 Chapter 1.2 of the General Laws of Rhode Island requiring that foreign corporations (those without a Rhode Islandbased business) must procure and maintain a Certificate of Authority to transact business from the Rhode Island Secretary of State. All materials submitted in response to this RFP become the property of the State and will not be returned. Vendors are advised that all materials submitted to the State for consideration in response to this RFP will be considered to be public records pursuant to Title 38, Chapter 2 of the General Laws of Rhode Island. 3

7 III. Scope of Services A. Scope of Services The Services that the Plans seek to acquire are described in detail in Section 1 to this RFP (the Services ). B. Term of Services The initial contract term will be five (5) years from the date on which a contract is awarded by the Plans. The contract may be renewed for an additional term based upon the discretion of the State Investment Commission. IV. Preparing Proposals: Required Information Each RFP must contain all of the following documents and must conform to the following requirements. A. Format of Proposals Qualifications should be prepared on 8½ x 11 letter size paper (preferably recycled), printed double-sided and bound on the long side. The Plans encourage using reusable, recycled, recyclable and chlorine-free printed materials for bids, proposals, reports, and other documents prepared in connection with this solicitation. Sections should be separated by labeled tabs and organized in accordance with subject matter sequence as set forth below. V. Evaluating Proposals The State of Rhode Island along with Segal Marco Advisors will review and evaluate the Proposals, as described below. The State of Rhode Island and Segal Marco Advisors will first examine proposals to eliminate those that are clearly non-responsive to the stated requirements. Therefore, respondents should exercise particular care in reviewing the proposal format required for this RFP. In evaluating the proposals, all aspects of the required services will be fully evaluated. The State may consider any factors it deems necessary and proper for best value, including but not limited to: 1. Commitment to onsite employee enrollment, ongoing communication, customer service, and employee education. This includes an understanding of the DB plan at a level where a member can be assisted on their full retirement package as it relates to their state employment. 4

8 2. Data-management services, including creation and maintenance of employee data, transaction data and history, interfaces with suppliers and Payroll, and other record keeping and administrative functions, including compliance. 3. Overall cost structure. 4. Size, structure, resources, and experience in providing deferred compensation and defined contribution services that are similar in size and scope to that of the Plans. 5. Open architecture investment platform. 6. Investment advisory services. 7. Responsiveness: The State will consider the completeness and accuracy of Respondent's Proposal. 8. Financial Stability: Respondent must be financially stable, helping to ensure performance over the duration of the services. 9. Compliance with Laws, Ordinances and Statutes: The State will consider Respondent's compliance with all laws, ordinances, and statutes governing the services and of the respondent. 10. Conflict of Interest: The State will consider any information regarding a Respondent, including information contained in a Respondent's proposal, that may indicate any conflicts (or potential conflicts) of interest which might compromise the Respondent's ability to successfully perform the proposed services or undermine the integrity of the competitive procurement process. If any Respondent has done any work for the Plan in researching, consulting, advising, drafting, or reviewing this RFP or any work related to this RFP, such Respondent may be disqualified from further consideration. 11. Legal actions, if any, against Respondent and any division, subsidiary or parent company of Respondent. Selection Criteria The State will evaluate all proposals according to the factors and weights listed below. Evaluation will be done in two phases as described: Phase One: Will utilize all factors below but pricing for winning ONLY the 401(a) and FICA plans. This evaluation will result in a winner for just the 401(a) and FICA plans. Phase Two: Will utilize all factors below but pricing for winning ONLY a 457(b) component. This evaluation will result in the top three most competitive proposals for just a 457(b) component. For the winner of Phase One, pricing provided for winning the 401(a), FICA & a 457(b) component will be used instead of the 457(b) only pricing. Those Contractors that score in the Competitive Range may be invited to make presentations to the State. Each proposal will be scored on a scale of 0 to 100, with 100 being the highest. The major evaluation categories are listed below: 1. Experience of Contractor (15 points), including but not limited to: 5

9 a. Financial condition b. Public sector 401(a) and 457(b) experience respective to the phase being scored 1) Number of similar plans 2) Number of public sector participants c. Quality assurance d. Prior performance record (including references) e. Experience of transition and ongoing teams 2. Proposed Plan of Work (40 points), including but not limited to: a. Timeliness of transition plan b. Participant communication c. Participant education d. Investment advisory services e. Recordkeeping and administration f. Dedicated field representatives g. Reporting to the State h. Participant services (1-800, VRS & Internet) i. Technology management 3. Investment Services (20 points), including but not limited to: a. Breadth of standard investment platform b. Breadth of stable value offerings c. Proposed stable value option 4. Cost (25 points), including but not limited to: a. Transition costs; b. Recordkeeping and administration costs; c. Optional participant services (e.g. loans & QDROs) d. Other administrative costs (if any) e. Deferred sales charges (if any) Minimum Qualifications of Service Provider Respondent(s) must meet all of the following minimum qualifications to be given further consideration. If a proposal is submitted by a company that does not satisfy the minimum qualifications it will not be reviewed or considered. The incumbent providers are exempt from satisfying the minimum requirements. 1. Respondents must certify that they are a qualified firm to provide administrative services pursuant to Sections 457 and 401(a) of the Internal Revenue Code, including all rules and regulations of the State of Rhode Island. 6

10 2. Respondents must offer bundled administrative services (i.e., recordkeeping/administration, communication/education, custodial trustee services, and investment advisory services), as well as an open architecture investment platform. 3. Respondent must have at least ten (10) years' experience in providing the proposed services and products to the public sponsor defined contribution marketplace. 4. Respondents must administer a minimum of three (3) 457(b) deferred compensation plans and three (3) tax advantaged governmental plans of similar size. 5. Respondent must also have at least three (3) plans where you administer both the 457(b) deferred compensation plan and the tax advantaged governmental plan. 6. Respondent must have a minimum of $2 billion under administration for public sector plans. 7. Respondent must have at least three (3) public sector 457(b) plans each with 3,000 or more participants. 8. Respondent must have at least three (3) tax advantaged governmental plans each with 30,000 or more participants. 9. Any relationships proposed to provide services offered in this RFP must have been in place for at least five (5) years and provide services to similar plans (size and demographics). 10. Respondents who elect to provide investment advisory services/onsite services utilizing a joint-venture must have a minimum of five (5) years experience with the proposed service provider. Service Provider Preferences 1. Respondents should be able to accommodate an October 1, 2017 implementation date. 2. Respondents should have the capability to establish a two-way data interface with the Plans and will be solely responsible for timely, accurate transmission and, as appropriate, editing and validation of data for processing enrollments and contribution activity. The successful service provider will absorb all of the Plans programming costs to accommodate any changes to its payroll system. 3. Respondent should have a Statement on Standards for Attestation Engagements (SSAE) 16 Audit conducted at least annually and provide their most recent SSAE 16 as part of their response to this proposal. 4. Respondents should have its IT security and systems tested regularly as part of the SSAE 16 or through a separate IT audit and provide the results as part of their response to this proposal. 5. Respondents must provide field service representatives to support the on-going consultation to all the Plans participants located throughout the State. Representatives should provide enrollment, education and participant communication services and may not have commission-based compensation or any financial incentives to promote any investment product or services. The selected vendor must have field service support available by August 2017 to commence the new plan roll out. 7

11 6. Respondents should be able to maintain and track participant contribution rate changes and report an electronic feedback file with updated information to payroll so that they can in turn update their payroll deduction records. 7. Respondents should be solely liable and responsible for any processing errors of the provider or its agents. In the event of a participant s loss of interest and/or dividend and/or principal due to an error by the selected respondent or its agent in processing transactions on behalf of the participant, the selected respondent agrees to adjust the participant s account to the same position as if the processing error had not occurred. 8. Respondents should be able to provide the daily ongoing administration of a Roth 457(b) provision. This feature is not offered under the current plan design but is being considered by the State. Any responses not meeting the minimum qualification may be considered, at the sole discretion of the State as non-responsive. While the service provider preferences are not required, the State strongly prefers the selected bidder to have all qualifications. As part of the evaluation process, the State will review the information required by Sections II, III and IV for each Proposal received. The State may also review any other information that is available to it, including but not limited to information gained by checking references and by investigating the Respondent(s) financial condition. The Plans reserve the right to seek clarification of any information submitted by any Respondent in any portion of its Proposal or to request additional information during the evaluation process. Any material misrepresentation made by a Respondent may void the Proposal and eliminate the Respondent from further consideration. VI. Confidentiality Responses to this RFP become the exclusive property of the Plans. All documents submitted in response to this RFP are subject to the State of Rhode Island Open Records Law and may be regarded as public records subject to disclosure. Confidentiality Requirements Related to Plan Information All of the reports, information, or data, prepared or assembled by or provided to the Respondent in this RFP are confidential. Except as may be required by law, the Respondent will not make available such reports, information, or data, to any other individual or organization and will use the reports, information or data only to assist in preparation of Respondent s Proposals. Additional Details of the RFP Process A. Addenda If it becomes necessary to revise or expand upon any part of this RFP, an addendum will be sent to all of the prospective Respondents that have completed the Notice to Respondent Form. 8

12 B. Plan's Rights to Reject Qualifications The Plans reserve the right to reject any and all Proposals that do not conform to the requirements set forth in this RFP; or that do not contain at least the information required by Section III, below or for any reason. C. No Liability for Costs The Plans are not responsible for costs or damages incurred by Respondents, team member(s), subcontractors or other interested parties in connection with the RFP process, including but not limited to costs associated with preparing the Proposals and of participating in any finalists presentations or negotiations. 9

13 Section 1: Scope of Services Purpose/Objective The State of Rhode Island, 457(b) Deferred Compensation Plan and 401(a) Defined Contribution Retirement Plan ( Plans ), are seeking competitive proposals from qualified organization(s) to provide recordkeeping/administration, communication/education, onsite education, investment advisory, investment management and custodial trustee services. The State expects to award either three or four contracts for this proposal. Pursuant to Rhode Island General Laws (R.I.G.L.) (b), the State is required to maintain three vendors in the 457(b) program. Currently there is a different vendor for the 401(a) program. The 401(a) vendor also administers a FICA Alternative Retirement Income Security Program. Through this proposal process, it is possible that one vendor could win a 457(b) component and the 401(a) and FICA plans. Any vendor that is selected for the 401(a) plan will also be required to administer the FICA plan. The 457(b) Plan currently has three service providers: Fidelity Investments, VALIC and Voya Retirement Services. They provide plan administration, recordkeeping, investment management, communication and education, participant services (1-800, VRS & Internet) and onsite education. Fidelity has approximately $120.9 million of assets and 2,900 accounts, VALIC has $58.9 million of assets and 1,000 accounts and Voya has $156.0 million of assets and 4,100 accounts. The 457(b) program has approximately 11,000 eligible employees. If a 457(b) service provider is deselected, the State will make its best efforts for those assets to move to the newly selected provider. However, participants will be given the choice of assets mapping to the new service provider or choosing among the remaining providers. Additionally, if there is more than one 457(b) vendor deselected, the State expects to award 457(b) assets based on 457(b) scoring and subsequent ranking. The Defined Contribution Retirement Plan is a defined contribution (money purchase) plan that operates under Section 401(a) of the Internal Revenue Code (IRC). The Plan is established pursuant to R.I.G.L et.sea. The Plan was effective as of July 1, All Eligible Employees of an authorized employer under RIGL ( Employer ) can participate in the Plan. An Eligible Employee means all employees with less than 20 years of service as of June 30, 2012 who are eligible to participate under the Defined Benefit plans administered by the State under the Employees Retirement System of Rhode Island ( ERSRI ) or the Municipal Employees Retirement System ( MERS ), excluding legislators, correction officers, and MERS general police and fire employees who participate in Social Security. Judges and state police officers are also excluded from the Plan. Leased Employees are not eligible to participate in the Plan. Individuals deemed by the Plan Administrator to be independent contractors are also not eligible to participate in the Plan. 10

14 The 401(a) Plan is currently administered by TIAA who provides plan administration, recordkeeping, investment management, communication and education, participant services (1-800, VRS & Internet) and onsite education. The Plan has approximately $585.2 million of assets and 35,000 accounts. TIAA also administers the FICA Alternative Retirement Plan, which has approximately $2.2 million of assets and 1,600 accounts. For additional information, the Plan documents for the 457(b) and 401(a) Plans have been included in the Appendix to this RFP. As noted above, the State is required to have three, 457(b) vendors. It is possible that a vendor could successfully bid on a piece of the 457(b) and the 401(a) and FICA. Scope of Services Implementation Services The successful respondent will be required to provide a detailed plan transition strategy along with communication materials to explain any new plan changes and enhancements. The potential conversion from the current plan provider to a new provider will require you to provide an explanation of the process, blackout period and reconciliation of plan assets to the individual participant records. It is required that onsite support team be in place prior to the actual transition date. The implementation will be crossing the Plans fiscal year. Detailed reconciliations of assets at the plan and member level will be required. Administration and Recordkeeping Services The successful respondent will be required to provide detailed information about their recordkeeping and administrative systems and use of technology. Important factors include the ability to process payroll deductions, monitor compliance, daily processing of participant transactions, provide timely and accurate participant statements and financial statements. The respondent must have in place a toll-free customer center, voice response services and internet services that allow participants access to their accounts. Employee Communication, Education, and Enrollment Services The successful respondent will be required to provide a comprehensive employee communication and investment education program. Communication services are to be supported by customer service representatives and comprehensive Internet services that provide participants with interactive financial and retirement planning tools and software. A dual hightouch, high-tech approach will be required to provide the participants with all of the necessary financial information and data to make informed investment decisions related to their elections. An explanation that outlines your firm s capabilities in designing and implementing a communication and education strategy will be required for both the initial transition and ongoing 11

15 process. The goal is to identify a respondent that offers comprehensive communication and education services supported by field representatives to accommodate the needs of the employees located throughout the Plan. In addition to your core communication services, it is the expectation that your field service representatives will be available to provide one-on-one counseling and investment advisory services. Additionally, the State requires that all onsite representatives be able to discuss the State s Defined Benefit Plan s features in addition to the DC component. The compensation structure of the field service representative should not allow for any cross selling of any investment products or services, unless the bidder provides services on both a 457(b) component and the 401(a) and FICA, in which case they would only be allowed to cross-sell this one product. Compensation and incentive awards for your field representatives must be structured to maintain an objective and unbiased distribution of investment products and services to the Plans participants. Your proposal should clearly define the number of field service representatives that will be devoted to this relationship, their compensation structure, and ability to provide one on one participant level investment advisory services. The successful respondent will be required to assist employees with the completion of enrollment forms, verify the completeness of the forms and coordinate the institution of salary deferrals with the Plan s payroll system. The winning 401(a) respondent must be willing to provide a permanent field representative at 50 Service Ave, Warwick, RI if requested by the State. The State will provide the office space and IT/phone equipment. Trustee/Custodial Services The successful respondent must provide trustee/custodial services for the Plan or arrange for trustee services with an outside party. Any additional costs for trustee/custodial services are to be fully disclosed in the fee section of this Request for Proposal. Investment Management Services The Plans are interested in selecting a service provider that offers an attractive and flexible array of investment options. For the 401(a) line-up, recommendations are not being considered with the RFP with the exception of stable value. The 401(a) investment line-up will be designed by Segal Marco Advisors along with the State Investment Commission once the RFP process has been completed. Respondent should propose a Stable Value/Fixed Income Fund that is fully diversified, limits credit risk/exposure, provides competitive returns with no benefit payment limitations and provides attractive contract termination conditions. 12

16 For the 457(b) line-up, the State is requesting a recommended line-up be proposed for informational purposes. Similar to the 401(a), the final investment options will be fully vetted and approved by the State Investment Commission. The liquidity provisions on the current stable value options are below. The assets will be transferred to the selected stable value product subject to the best interests of the Plans participants. Fidelity: Not applicable VALIC: Fixed Account Plus: Individual annuity contracts that require participant consent to transfer asset Fixed Account: 5-year payout with equal installments 5-year payout with decreasing balance method (increasing percentage each year) In addition to the Stable Value restrictions, approximately $13.8 million of the VALIC assets are in individual annuity contracts. These assets are only transferable with a participant s consent. Voya: Voya Fixed Account: Equal payments, with interest, over a period not to exceed 60 months Single payment subject to a Market Value Adjustment Guaranteed Accumulation Account: Single payment subject to a Market Value Adjustment TIAA: Lump sum at book value; payment will either be made within 90 days of the discontinuance date or two years from the discontinuance date depending on the result of a contractual formula intended to serve as a proxy for the movement of interest rates over time Fees The State will carefully examine all the costs associated with each provider s products and services. Each respondent will be required to fully disclose fees based on the plan information provided in this RFP. Currently members earning less than $35,000 indexed in a calendar year do not pay the plan admin fees: Waiver of administrative fees. Any plan administration fees assessed to members of the plan after July 1, 2015, shall be reimbursed by the state for any member whose annual compensation is thirty-five thousand dollars ($35,000) or less, said dollar amount to be indexed annually in the same percentage determined under (h)(1)(B). History of Section. (P.L. 2015, ch. 141, art. 21, 10.) 13

17 Preparation Costs All costs incurred or in any way associated with the qualification s preparation, response, submission, presentation, or oral interviews shall be the sole responsibility of the respondent and shall not be reimbursed by the Plans. 14

18 Information Regarding the 457(b) Plan Plan: Plan Type: Eligible Employees: 11,083 Eligibility: Rollovers: State of Rhode Island and Providence Plantations Section 457(b) Deferred Compensation Plan Plan Year: January 1 to December 31 Benefit Payment Events: In-Service Withdrawals: Force outs: Forms of Distribution: Catch-up Contributions: Purchase of Service Credit: All State of Rhode Island public employees receiving compensation with the exception of certain school employees Rollover contributions from other eligible plans and IRAs are allowed The Plan allows for withdrawals for the following events: Termination of employment Retirement Death Financial Hardship Participants may withdraw their contributions plus interest for the following reason: Unforeseeable Emergency Withdrawals as defined under section 457(d)(1)(A)(iii) of the Code If 1) total amount payable does not exceed the dollar amount under section 411(a)(11)(A) of the Code 2) No payment has been deferred during the two-year period ending on the date of distribution 3) No prior in-service or force out distributions If the State elects, it may pay out a participants account under the following conditions: If total amount payable does not exceed $1,000 No payment has been deferred during the two-year period ending on the date of distribution No prior in-service or force out distributions Forms of Annuity Lump Sum Partial Lump Sum Payment in equal amounts for period designated by participants Systematic Withdrawal Option Minimum Required Distributions Any other method agreed upon between the Participant and the State and accepted by the service provider As permitted by law Yes, if transfer is for the purchase of permissive service credit (as defined in section 415(n)(3)(A) of the Code) or a repayment to which section 415 of the Code does not apply by reason of section 415(k)(3) of the Code 15

19 Plan Demographic Information: Fidelity 1. Frequency of contributions (weekly/bi-weekly/monthly): Bi-Weekly 2. Medium used to remit contributions files (electronic, disk, magnet tape, etc.): Electronic 3. Funding method (check, wire, ACH): Wire 4. Number of payroll locations: 1 5. Number of payroll files: Participation Breakdown: Fidelity Total Active 1,435 1,384 1,336 1,306 Actively Contributing 1,006 1,026 1,030 1,040 Total Accounts 2,874 2,830 2,804 2,781 Cash Flow: Fidelity Contributions 6,985,626 6,315,700 5,957,034 5,793,025 Withdrawals (6,482,344) (4,882,201) (3,539,091) (3,522,330) Net Cash Flow 503,282 1,433,498 2,417,943 2,270,695 Participant Information: Fidelity 457 Plan 12/31/16 Number of participants active and contributing 1,006 Number of participants active, not contributing 433 Number of terminated participants w/balances 36 Number of terminated participants w/balances less than $5, Number of participants suspended due to hardship 4 Total account balances - participants active and contributing $117,236,039 Total account balances - terminated participants w/balances $2,513,131 Total account balances participants with loans $80,494 Average account balance $42,085 16

20 Transaction Activity: Fidelity 457 Plan Number of new participants Number of new loans N/A N/A N/A N/A Number of outstanding loans N/A N/A N/A N/A Number of hardship withdrawals Number of in-service withdrawals not due to financial hardship Number of lump sum distributions Number of recordkeeper IRAs opened N/A N/A N/A N/A Number of minimum required distributions Number of QDROs Number of rollovers into the plan Contributions/Cash-in: Fidelity 457 Plan Employee Pre-tax (excluding catch-up contributions) $6,479,997 $6,181,480 $5,849,161 $5,701,105 Age 50 catch-up N/A N/A N/A N/A 3-year catch-up N/A N/A N/A N/A 15-year catch-up N/A N/A N/A N/A Roth N/A N/A N/A N/A After-Tax N/A N/A N/A N/A Employer Match N/A N/A N/A N/A Employer Discretionary N/A N/A N/A N/A Rollover Contributions $505,629 $134,220 $107,873 $91, Contract exchanges $37,999 $295,519 $139,489 $26,350 Loan repayments N/A N/A N/A N/A Withdrawals/Cash-out: Fidelity 457 Plan Lump sum distributions cash $544,878 $293,595 $288,793 $472,191 Lump sum distributions rollover $4,933,268 $4,071,588 $2,930,321 $2,467,933 De Minimum payments (less than $5,000) $0 $0 $0 $0 Installment payments $153,384 $108,005 $76,072 $18,935 Unforeseeable/Hardship withdrawals $1,287 $62,208 $124,731 $65,908 In-service withdrawals (ex-hardships) $639,391 $346,805 $116,208 $497,364 Loan withdrawals N/A N/A N/A N/A Fees (i.e., loans, self-directed brokerage) ($25) ($119) ($169) ($1,664) 17

21 Plan Demographic Information: VALIC 1. Frequency of contributions (weekly/bi-weekly/monthly): Bi-weekly 2. Medium used to remit contributions files (electronic, disk, magnet tape, etc.): Electronic 3. Funding method (check, wire, ACH): Wire 4. Number of payroll locations: 1 5. Number of payroll files: 26 Participation Breakdown: VALIC Total Active, Non- Contributing Actively Contributing Total Accounts 1,044 1,046 1,083 1,109 Cash Flow: VALIC Contributions 1,635,011 1,760,010 1,761,489 1,867,299 Withdrawals (2,461,815) (3,112,269) (2,741,605) (1,981,887) Net Cash Flow (1,388,196) (1,352,259) (980,115) (114,588) Stable Value Participation Breakdown: VALIC Under age 25 $43,290 $39,082 $37,087 $41,623 Age $116,176 $120,046 $110,388 $109,981 Age $745,324 $750,291 $805,036 $912,822 Age $4,528,951 $4,812,615 $5,643,140 $6,384,297 Age $11,780,296 $11,630,364 $11,672,167 $11,666,479 Age $7,935,569 $6,902,518 $5,475,101 $5,007,603 Age $4,381,423 $5,091,631 $5,098,324 $4,987,682 Age 80+ $2,502,985 $1,621,917 $1,572,998 $1,284,182 Stable Value Cash Flow: VALIC Contributions 719, , , ,371 Withdrawals (1,398,505) (1,768,485) (1,941,725) (1,268,098) Net Cash Flow (678,901) (959,287) (1,102,846) (330,727) Participant Information: VALIC 457 Plan 12/31/16 Number of participants active and contributing 480 Number of participants active, not contributing 564 Number of terminated participants w/balances Not available Number of terminated participants w/balances less than $5,000 Not available 18

22 Number of participants suspended due to hardship 0 Total account balances - participants active and contributing $30,078,766 Total account balances - terminated participants w/balances Total account balances participants with loans Not available Average account balance $58,666 Transaction Activity: VALIC 457 Plan Number of new participants Number of new loans N/A N/A N/A N/A Number of outstanding loans N/A N/A N/A N/A Number of hardship withdrawals Number of in-service withdrawals not due to financial hardship Number of lump sum distributions Number of recordkeeper IRAs opened Number of minimum required distributions Number of QDROs Number of rollovers into the plan * Number of recordkeeper IRA s opened not available Contributions/Cash-in: VALIC 457 Plan Employee Pre-tax (excluding catch-up contributions) N/A $1,635,011 $1,760,010 $1,761,489 $1,867,299 Age 50 catch-up Not Available Not Available Not Available Not Available 3-year catch-up Not Available Not Available Not Available Not Available 15-year catch-up Not Available Not Available Not Available Not Available Roth N/A N/A N/A N/A After-Tax N/A N/A N/A N/A Employer Match Employer Discretionary Rollover Contributions Contract exchanges Not Available Not Available Not Available Not Available Loan repayments N/A N/A N/A N/A Withdrawals/Cash-out: VALIC 457 Plan Lump sum distributions cash $419,110 $517,426 $448,504 $500,378 Lump sum distributions rollover $1,093,395 $1,420,753 $1,131,651 $478,205 19

23 De Minimum payments (less than $5,000) Not Available Not Available Not Available Not Available Installment payments $655,890 $674,961 $615,385 $532,192 Unforeseeable/Hardship withdrawals $19,732 $79,447 $53,402 $23,624 In-service withdrawals (ex-hardships) $0 $0 $3,450 $6,333 Loan withdrawals $0 $0 $0 $0 Fees (i.e., loans, self-directed brokerage) $0 $0 $0 $0 Plan Demographic Information: Voya 1. Frequency of contributions (weekly/bi-weekly/monthly): Bi-weekly 2. Medium used to remit contributions files (electronic, disk, magnet tape, etc.): Electronic 3. Funding method (check, wire, ACH): Wire 4. Number of payroll locations: 1 5. Number of payroll files: Participation Breakdown: Voya Total Active* 4,078 3,982 3,886 3,779 Actively Contributing 3,065 3,028 2,958 2,905 Total Accounts 4,078 3,982 3,886 3,779 Cash Flow: Voya Contributions 8,875,107 8,734,707 8,017,941 7,758,620 Withdrawals (8,420,120) (9,632,013) (6,605,577) (5,391,480) Net Cash Flow 454,987 (897,306) 1,412,364 2,367,140 * Includes all participants with a balance Stable Value Participation Breakdown: Voya Under age Age Age Age Age ,069 1,058 1,045 1,016 Age Age Age Stable Value Cash Flow: Voya Contributions 3,593,185 3,537,187 3,358,329 3,340,152 Withdrawals (4,101,439) (4,237,017) (3,391,031) (2,370,026) 20

24 Net Cash Flow (508,254) (699,830) (32,702) 970,126 * Includes all participants with any monies invested during applicable year Participant Information: Voya 457 Plan 12/31/16 Number of participants active and contributing 3,065 Number of participants active, not contributing Not available Number of terminated participants w/balances Not available Number of terminated participants w/balances less than $5,000 1,426* Number of participants suspended due to hardship Not monitored Total account balances - participants active and contributing $100,000,126 Total account balances - terminated participants w/balances Not available Total account balances participants with loans N/A Average account balance $38,260 * Includes all participants with balances less than $5,000; data for terminated participants not provided the State Transaction Activity: Voya 457 Plan Number of new participants Number of new loans N/A N/A N/A N/A Number of outstanding loans N/A N/A N/A N/A Number of hardship withdrawals Number of in-service withdrawals not due to financial hardship Not Tracked Not Tracked Not Tracked Not Tracked Number of lump sum distributions Number of recordkeeper IRAs opened Not Available Not Available Not Available Not Available Number of minimum required distributions Not Available Not Available Not Available Not Available Number of QDROs Not Available Not Available Not Available Not Available Number of rollovers into the plan Contributions/Cash-in: Voya 457 Plan Employee Pre-tax (excluding catch-up contributions) $8,875,107 $8,734,707 $8,017,941 $7,758,620 Age 50 catch-up Not Tracked Not Tracked Not Tracked Not Tracked 3-year catch-up Not Tracked Not Tracked Not Tracked Not Tracked 15-year catch-up N/A N/A N/A N/A Roth N/A N/A N/A N/A After-Tax N/A N/A N/A N/A Employer Match N/A N/A N/A N/A 21

25 Employer Discretionary N/A N/A N/A N/A Rollover Contributions $494,202 $844,825 $1,457,674 $1,514, Contract exchanges $378,203 $138,143 $239,292 $878,443 Loan repayments N/A N/A N/A N/A Withdrawals/Cash-out: Voya 457 Plan Lump sum distributions cash $4,496,270 $6,406,269 $4,429,071 $2,655,069 Lump sum distributions rollover $525,215 $639,908 $583,593 $1,103,923 De Minimum payments (less than $5,000)* Installment payments $669,958 $637,614 $557,668 $525,531 Unforeseeable/Hardship withdrawals $89,542 $150,597 $82,304 $245,070 In-service withdrawals (ex-hardships) Not Tracked Not Tracked Not Tracked Not Tracked Loan withdrawals N/A N/A N/A N/A Fees (i.e., loans, self-directed brokerage) N/A N/A N/A N/A * Have not been requested by State 22

26 Fidelity Investment Line-up Asset Class Fund Name Fund Ticker Symbol Market Value Stable return / Money market FMMT RETIRE GOV II FRTXX $6,507,212 Domestic Fixed Income FID US BOND IDX PR FSITX $1,269,965 Domestic Fixed Income PIM TOTAL RT INST PTTRX $6,161,377 Large Cap Value INVESCO DIVRS DIV R6 LCEFX $3,013,377 Large Cap Core FID 500 INDEX INST FXSIX $9,489,623 Large Cap Core FID LARGE CAP STOCK FLCSX $7,851,656 Large Cap Growth FID CONTRAFUND K FCNKX $25,624,614 Mid Cap Value FID LOW PRICED STK K FLPKX $9,612,769 Mid Cap Core FID MID CAP IDX PR FSCKX $1,205,249 Small Cap Core FID SM CAP IDX PR FSSVX $988,076 International FID INTL INDEX PR FSIVX $977,894 International HARBOR INTL INST HAINX $4,048,087 Target Date FID FREEDOM K INCOME FFKAX $1,473,733 Target Date FID FREEDOM K 2005 FFKVX $208,811 Target Date FID FREEDOM K 2010 FFKCX $3,999,174 Target Date FID FREEDOM K 2015 FKVFX $2,164,677 Target Date FID FREEDOM K 2020 FFKDX $13,092,687 Target Date FID FREEDOM K 2025 FKTWX $2,191,549 Target Date FID FREEDOM K 2030 FFKEX $8,789,445 Target Date FID FREEDOM K 2035 FKTHX $1,214,897 Target Date FID FREEDOM K 2040 FFKFX $579,892 Target Date FID FREEDOM K 2045 FFKGX $513,634 Target Date FID FREEDOM K 2050 FFKHX $172,118 Target Date FID FREEDOM K 2055 FDENX $221,863 Target Date FID FREEDOM K 2060 FDKNX $38,063 Self-Directed Brokerage Self-Directed Brokerage $9,490,751 Total $120,901,191 23

27 VALIC Investment Line-up Fund Ticker Symbol Market Value Asset Class Fund Name Stable return / Money market SHORT TERM FIXED ACCOUNT N/A $163,603 Stable return / Money market FIXED ACCOUNT PLUS N/A $10,357,055 Stable return / Money market FIXED INTEREST OPTION N/A $21,513,358 Stable return / Money market AMER CENT US GOVT MMKT TCRXX $37,794 Stable return / Money market CAPITAL CONSERVATION N/A $3,927 Stable return / Money market GOVERNMENT MONEY MARKET I N/A $40,920 Domestic Fixed Income PIMCO TOTAL RET PTTAX $484,767 Government Fixed Income GOVERNMENT SECURITIES FUND N/A $4,569 Long-term Fixed Income VANGUARD LT INV-GRADE FUND N/A $8,510 Inflation-Protected Fixed Income AMCENT INF-ADJ BOND ACITX $756,665 High Yield Fixed Income FEDERATED INSTL HI YLD BD FIHBX $123,978 International Fixed Income INTERNATIONAL GOVERNMENT BOND N/A $3,466 Balanced ASSET ALLOCATION FUND N/A $92,226 Balanced VANGUARD WELLINGTON FUND INC N/A $227,552 Large Cap Value DIVIDEND VALUE N/A $7,088 Large Cap Value VANGUARD DIVIDEND GROWTH VDIGX $312,510 Large Cap Value VANGUARD WINDSOR II N/A $47,960 Large Cap Core VANGUARD 500 IDX ADM VFIAX $7,013,033 Large Cap Core STOCK INDEX FUND N/A $1,048,056 Large Cap Core CORE EQUITY FUND N/A $80,318 Large Cap Growth LARGE CAPITAL GROWTH N/A $32,706 Large Cap Growth GROWTH FUND N/A $314,332 Large Cap Growth MFS MASS INVEST GR STK MIGHX $2,532,329 Mid Cap Core DREYFUS MIDCAP INDEX PESPX $6,353,764 Mid Cap Core MID CAP INDEX FUND N/A $884,276 Mid Cap Growth MID CAP STRATEGIC GWTH N/A $35,265 Small Cap Core DREYFUS SM CAP STK INDX DISSX $3,308,414 Small Cap Core SMALL CAP INDEX FUND N/A $157,711 Global GLOBAL SOCIAL AWARENESS FUND N/A $37,482 International INTERNATL EQUITIES INDEX FUND N/A $43,673 International AMER FUNDS EUROPAC REREX $1,608,115 International FOREIGN VALUE N/A $536 Emerging Markets EMERGING ECONOMIES N/A $11,877 Target Date VANGUARD TGT RTMT 2010 VTENX $105,119 Target Date VANGUARD TGT RTMT 2020 VTWNX $445,605 Target Date VANGUARD TGT RTMT 2030 VTHRX $514,082 Target Date VANGUARD TGT RTMT 2040 VFORX $2,343 Target Date VANGUARD TGT RTMT 2050 VFIFX $28,248 Target Date VANGUARD TGT RTMT 2060 VTTSX $0 Specialty SCIENCE & TECHNOLOGY FUND N/A $157,341 Total $58,900,571 * Approximately $13.8 million of the assets is invested in individual annuity contracts and is not transferable without participant consent 24

28 Voya Investment Line-up Asset Class Fund Name Fund Ticker Symbol Market Value Stable return / Money market Voya Government Money Market IVMXX $220 Portfolio Stable return / Money market Voya Fixed Account - 457/401 N/A $73,242,492 Stable return / Money market Voya Fixed Account N/A $27,805 Stable return / Money market Voya Long Term Guaranteed N/A $32,526 Accumulation Account Domestic Fixed Income Voya U.S. Bond Index Portfolio ILBAX $534,630 Domestic Fixed Income Voya Intermediate Bond Portfolio IPIIX $5,669,196 Inflation-Protected Fixed Income PIMCO VIT Real Return Portfolio N/A $336,381 High Yield Fixed Income Prudential High Yield Fund PHYZX $617,740 Balanced Voya Balanced Portfolio IBPIX $18,249 Large Cap Value BlackRock Equity Dividend Fund MADVX $3,266,169 Large Cap Core Voya U.S. Stock Index Portfolio INGIX $7,099,501 Large Cap Core Voya Growth and Income Portfolio IIVGX $22,023,978 Large Cap Growth Voya Large Cap Growth Portfolio IEOHX $7,080,027 Large Cap Growth VY T. Rowe Price Capital Appreciation ITRIX $6,917,699 Portfolio Mid Cap Core Voya Russell Mid Cap Index Portfolio IIRMX $862,419 Mid Cap Growth Principal MidCap Fund PMBPX $8,040,442 Small Cap Core Voya Russell Small Cap Index Portfolio IIRSX $833,836 Small Cap Core Voya Small Company Portfolio IVCSX $7,413,839 Global VY Oppenheimer Global Portfolio IGMIX $5,601,712 International Voya International Index Portfolio IIIIX $266,958 International American Funds EuroPacific Growth REREX $4,330,155 Target Date Voya Solution Income Portfolio ISWIX $306,791 Target Date Voya Solution 2025 Portfolio ISZIX $439,964 Target Date Voya Solution 2035 Portfolio ISQIX $453,472 Target Date Voya Solution 2045 Portfolio ISRIX $441,398 Target Date Voya Solution 2055 Portfolio IISPX $165,773 Total $156,023,370 * The variable investment options are offered through the insurance company's separate account 25

29 Information Regarding the 401(a) Plan Plan: Plan Type: Eligible Employees: 25,000 State of Rhode Island Defined Contribution Retirement Plan Section 401(a) Defined Contribution Plan Eligibility: Employees of an authorized employer under RIGL All employees who are eligible to participate under the Defined Benefit plans administered by the State under the Employees Retirement System of Rhode Island ( ERSRI ) or the Municipal Employees Retirement System ( MERS ), excluding legislators, correction officers, and MERS general police and fire employees who participate in Social Security. Judges and state police officers are also excluded from the Plan. Leased Employees are not eligible to participate in the Plan. Individuals deemed by the Plan Administrator to be independent contractors are also not eligible to participate in the Plan. Employee Contributions: Teachers covered by SS 5% State employees covered by SS 5% MERS general non-police & fire covered by SS 5% Teachers not covered by SS 7% Employer Contributions: State employees - 1% Rollovers: MERS general non-police & fire not covered by SS 7% MERS general police & fire not covered by SS - 3% Teachers covered by SS 1% Plan Year: July 1 to June 30 Benefit Payment Events: In-Service Withdrawals: Forms of Distribution: Purchase of Service Credit: MERS general non-police & fire employees covered by SS 1% Teachers not covered by SS 3% MERS general non-police & fire not covered by SS 3% MERS general police & fire not covered by SS 3% Effective July 1, 2015, the State revised the contribution schedule and contributed an additional 0.25% for employees with 10 years of services and an additional 0.5% for employees with 15 years of service as of June 30, 2012 Rollover contributions from other eligible plans and IRAs are allowed The Plan allows for withdrawals for the following events: Termination of employment Retirement Death Not allowed Single or Joint and Survivor Annuity Lump sum Installments Minimum Required Distributions Yes, in accordance with the rules of the ERSRI or MERS 26