Invitation to Negotiate

Transcription

1 Invitation to Negotiate RETIREMENT PLAN CHOICE AND ASSET GUIDANCE SERVICES FOR THE FLORIDA RETIREMENT SYSTEM Issued by THE STATE BOARD OF ADMINISTRATION OF FLORIDA OFFICE OF DEFINED CONTRIBUTION PROGRAMS February 13, 2017 DEADLINE FOR RECEIPT OF NOTIFICATION OF INTENT TO RESPOND: February 24, :00 pm ET DEADLINE FOR RECEIPT OF RESPONSES: March 27, :00 pm ET Submit Responses to: Ruthie Bianco State Board of Administration of Florida Office of Defined Contribution Programs Hermitage Centre 1801 Hermitage Boulevard Suite 100 Tallahassee, FL Telephone: (850) Do not contact SBA staff or any member of the SBA s Board of Trustees (or their respective staff) regarding this ITN. Direct all correspondence during the ITN process to the contact listed above. 1

2 Table of Contents Section I Purpose and General Information... 4 A. Purpose... 4 B. Background and General Information... 4 C. Retirement Plan Choice/Asset Guidance Services to be Provided... 7 D. Investment Plan Fund Descriptions... 8 E. Minimum Qualifications... 8 Section II Scope of Services... 9 A. Overview... 9 B. Deliverables... 9 Section III Evaluation Criteria Section IV Timeline Section V Required Information A. Cover Letter B. General Information C. Summary of Proposed Services D. Fee Proposal E. Fiscal Report F. Questionnaire Response G. Conflicts of Interest H. General Survey Information I. Service Requirements Affirmation Statement Section VI Proposal Requirements A. Instructions for Completion B. Submission Instructions C. Completeness D. Cost Liability E. Additional Information F. Respondent s Responsibility G. Disclosure of Proposal Contents H. Economy of Presentation I. Rejection of Proposals J. Contract Execution K. Contract Term L. Collusion M. Quiet Period N. Respondent Guarantees O. Oral Interview P. Right to Amend and/or Withdraw Q. Conflicts of Interest R. False or Misleading Statements S. Further Instructions and Conditions Section VII - Questionnaire A. General Questions B. Descriptive Information on Your Retirement Plan Choice and Asset Guidance Services C. Working Relationships D. Fees and Services E. General Survey Information Appendix I: Service Requirements - Affirmation Statement

3 Appendix II: (8) and (10), Florida Statutes Attachment Attachment

4 Section I Purpose and General Information A. Purpose The State Board of Administration of Florida (SBA), Office of Defined Contribution Programs (ODCP), is soliciting competitive responses from vendors capable of offering retirement-related web-based financial education services to help eligible members of the Florida Retirement System (FRS) make a choice between the plans available under Florida law in light of their personal circumstances and to provide financial guidance on investments to help prepare them for retirement (see Appendix II for statutory references). The SBA is seeking one or more vendors for financial education retirement plan choice and asset guidance services (ECAGs) with core competencies in the following areas: (To be selected as a vendor for the program a respondent need not have a financial education core competency in more than one area, but each vendor must serve the entire membership base, unless otherwise noted.) Education and Retirement Plan Choice Software modeling tools web-based Education and Asset Guidance Software modeling tools web-based Important: Respond to the ITN only with respect to your firm and the products/services it is willing to provide directly, unless a question expressly directs otherwise. If you desire to be considered under this ITN process as a retirement plan choice/asset guidance vendor working in concert with one or more specific retirement plan choice/asset guidance vendors of your preference, the questionnaire must be completed separately for each vendor in order for them to be considered for this program. The SBA recognizes the potential for cost advantages or other efficiencies which could arise from vendor-preferred working relationships or from hiring a single organization capable of providing the full array of desired services in-house, and will give these alternatives appropriate consideration. See Section VII. Subsection C. for related questions. Responses to this ITN should be sufficiently detailed to demonstrate the Respondent s ability to effectively operate in a collaborative environment. Independence of Service Providers The firm(s) selected to provide retirement plan choice/asset guidance services to FRS members as required under section , F.S., may not be an Approved Investment Plan Provider. An Approved Investment Plan Provider is defined under the statute as a private sector company that is selected and approved by the SBA to offer one or more investment products or services to the FRS Investment Plan (IP). There is no prohibition against the selected provider(s) being an investment product provider, or being affiliated with a provider, under the State University System Optional Retirement Program, the State Community College System Optional Retirement Program, or the Senior Management Service Optional Annuity Program. There is also no prohibition against a selected educational provider being an investment product provider, or being affiliated with a provider, under any of the voluntary tax deferred savings plans sponsored by any participating employers of the State or its agencies, local governments, cities, or special districts. These plans include IRC Section 403(b), 457, 401(k), and any similar plans. B. Background and General Information Organization of the State Board of Administration of Florida The SBA is a constitutional entity of Florida State Government that provides investment and trust services to various governmental entities. These services include managing the assets of the 4

5 Florida Retirement System (FRS) Pension Plan (an Internal Revenue Code (IRC) Section 401(a) tax-qualified defined benefit plan), the Lawton Chiles Endowment Fund, the Local Government Surplus Funds Trust Fund, and a variety of smaller funds. Additionally, the SBA is the Plan Sponsor for the FRS Investment Plan (an IRC Section 401(a) defined contribution plan), and is responsible for a multi-media education program (i.e., MyFRS Financial Guidance Program) available to all active members of the FRS to help them make informed choices between the two FRS retirement plans, within their FRS plan choice period and beyond, and to prepare financially for retirement. Governing Authority The Governing Board of the SBA (herein referred to as the Trustees ) is comprised of Florida s Governor (as Chair), Chief Financial Officer, and Attorney General, all of whom are elected statewide to their respective positions. Administrative Structure The Trustees delegate authority to the Executive Director & CIO, who serves at the discretion of the Trustees and is responsible for managing and directing all administrative, personnel, budgeting, investment policy, and investment functions. Within the SBA, the Office of Defined Contribution Programs (ODCP) is a separate budget entity reporting to the Executive Director & CIO. Investment Advisory Council The Investment Advisory Council (IAC) of the SBA consists of nine members with specialized knowledge, experience, and familiarity with financial investments and portfolio management. The IAC meets at least quarterly to review and discuss the SBA's investment strategy and performance of the FRS Trust Fund and the FRS Investment Plan Trust Fund. The Florida Retirement System (FRS) The FRS presently has approximately 650,000 active (working) members and over 1,000 participating employers. Members are employees of state, county and city governments, school boards, community colleges and universities, and special districts. The FRS is employee and employer funded and consists of two programs: 1. The FRS Pension Plan is a traditional public sector IRC Section 401(a) defined benefit program. Vesting is 6 years for members hired before July 1, 2011 and 8 years for those hired July 1, 2011 and after. The FRS Pension Plan has been in place since 1970 and has about 518,000 active members and 395,000 retirees. The total market value of the assets of the FRS Pension Plan was $144.3 billion as of December 30, The FRS Investment Plan is a participant-directed IRC Section 401(a) defined contribution program. Employees must affirmatively elect to participate in lieu of participating in the FRS Pension Plan. Vesting is 1 year. Benefits accrue in individual accounts that are portable and participant-directed and managed. In accordance with Section (15)(b), Florida Statutes, participants and beneficiaries bear the investment risks that result when they exercise control over investments in their accounts. The Plan has been in place since mid-2002 and had 172,121 active accounts and 110,998 retirees as of December 30, The total market value of assets held in the FRS Investment Plan was $9.3 billion as of December 30, The FRS employers hire approximately 70,000 new employees per year. New employees are enrolled in the FRS Pension Plan unless they affirmatively elect the FRS Investment Plan within 5 months after their month of hire. In Fiscal Year (July-June), approximately 23% of new hires chose the FRS Investment Plan, 18% actively chose the FRS Pension Plan and 60% defaulted into the FRS Pension Plan. Additionally, approximately 425 FRS Pension Plan members use their 2 nd Election each month to switch to the FRS Investment Plan; transferring on average approximately $50 million 5

6 monthly. Very few Investment Plan members switch to the Pension Plan (approximately 4,618 since inception in 2002). 3. For calendar year 2016 usage of education services were as follows: Year-Ended December 2016 Year on Year Growth MyFRS Guidance Line Counseling Calls 309,353 10% MyFRS.com Sessions 2,163,073-2% Initial Election Choice Service 72,734-5% 2 nd Election Choice Service 12,468 43% Personal Online Advisor Service 73,141-5% FRS Retirement Plan Choice and Asset Guidance In conjunction with the 2000 legislation directing the Trustees of the SBA to establish the FRS Investment Plan, the Trustees were also directed to establish an education program consisting of an initial and ongoing education component to provide employees with information necessary to make informed plan choice decisions, to make informed decisions about choices within their program of membership, and to make preparations for retirement. In general, plan comparisons should provide information regarding the main features of each plan, including plan type, vesting periods, investment responsibility, benefit formulas, distribution options, and sample estimated benefits that could be provided under each plan based upon various factors, including but not limited to starting age, salary, service credit, retirement date, investment returns, and any other relevant factors. Additional information that is to be provided includes: The amount of money (present value) available to a member to transfer to the Investment Plan. The general features of and differences between the Pension Plan and the Investment Plan. The estimated benefits available to members if they were to retire under each of the retirement plans using various salary, age and service credit scenarios. The historical rates of return for the investment alternatives available in the Investment Plan. The program choices available to employees of the State University System Optional Retirement Program and the general benefits of each available program, if applicable. Payout options available in each of the retirement plans. The education program has been branded as the MyFRS Financial Guidance Program. Educational services are provided independently of investment or administrative companies. EY (the current participant communication specialist), Financial Engines (the current retirement plan choice/asset guidance provider), AonHewitt Consulting (current print service provider), and TekStream (current web portal provider) are under contract to provide educational services through print, video, internet, workshop, and on-the-phone channels. The educational and transactional website is The SBA also coordinates the education program with the State of Florida Division of Retirement, the benefits administrator for the FRS Pension Plan. EY EY, the current participant communication specialist, provides a telephone guidance service staffed by appropriately credentialed, well-trained, competent personnel. The guidance service provides participants the following services: Answers participant education questions, explains any and all plan educational materials to participants, offers guidance on Pension Plan/Investment Plan choice for both first and 6

7 second elections, including the operation of choice software tools, operates plan education software on behalf of participants and interprets software output. Asset guidance covering Investment Plan investing, and financial and retirement planning for members of both plans, utilizing the asset guidance software. The Division of Retirement (Division) The Division is the administrator for the FRS Pension Plan, providing full accounting and administration of benefits and contributions. The Division initiates actuarial studies, recommends benefit and contribution changes, and proposes rules for the administration of the FRS Pension Plan. The State Legislature has the responsibility of setting contribution and benefit levels and providing statutory guidance for the administration of the FRS. The Division operates as part of the MyFRS Financial Guidance Program, which they helped develop and actively support. They also administer the Health Insurance Subsidy (HIS) program, provide retirement payroll reporting services, and manage the disability benefit and in-line-of duty death benefit programs for both the FRS Pension Plan and FRS Investment Plan. Investment Plan Administrator and Plan Choice Administrator The SBA has a contract with AonHewitt for plan choice enrollment and recordkeeping responsibility for the FRS Investment Plan (this contract is separate and apart from the contract the SBA has with AonHewitt Consulting, which is the current print communications service provider). Recordkeeping is in a daily environment. Retiree services including withdrawals and payments are included in the contract with AonHewitt. BNY Mellon serves as the custodian of the Investment Plan and processes distributions. Investment Policy and Structure An Investment Policy Statement (IPS) serves as the primary statement of Trustee policy regarding their statutory responsibilities and authority to establish and operate an optional defined contribution retirement program for members of the FRS. Section (14), Florida Statutes, directs the Trustees of the State Board of Administration to approve the IPS. The IPS also identifies certain education policies. A copy of the IPS can be found at or Additional information regarding the SBA is available on the SBA s website located at C. Retirement Plan Choice/Asset Guidance Services to be Provided Generally, the retirement plan choice/asset guidance vendor(s) will provide member retirement plan choice and asset guidance in three related areas: 1. The initial election for new hires, in which the decision is made to either stay in the defined benefit plan (FRS Pension Plan), or transfer to the defined contribution plan (FRS Investment Plan). This applies to new employees who have until the last business day of the fifth month following their month of hire to make an initial election. If they do not make an active election during this period, they will default to the FRS Pension Plan. Subsequent to the initial election period, all members of both plans receive educational support regarding their 2 nd Election option available under Florida law to switch to the other plan so long as they are an actively working FRS member. 2. For those who elect to enroll in the Investment Plan, guidance is provided on decisions about how to invest the assets in their account (average account balances are currently $52,610). In addition, investment education is provided to all members of both retirement plans regarding investing in other tax-deferred savings plans (457, 403(b), IRA, etc.) as well as post-tax savings. 7

8 3. As a framework for both of the above decisions, an understanding of retirement planning is needed in order to establish reasonable financial goals and plans for post-retirement years. This planning is offered through multiple channels. Responses to the ITN should be sufficiently detailed to demonstrate the Respondent s expertise and capabilities to provide necessary services in these areas, and include specific information on the methodology and framework used to provide retirement plan choice/asset allocation guidance to members. Specific retirement plan choice/asset allocation guidance deliverables are defined in the Scope of Services of this ITN. D. Investment Plan Fund Descriptions The Investment Plan currently offers 21 investment funds. The funds consist of mutual funds, institutional commingled trust funds, retirement date funds, multi-manager funds, and a Self- Directed Brokerage Account. All mutual funds are provided through Bundled Providers (i.e., Fidelity, Prudential and VALIC). Details of all the funds can be found online at MyFRS.com by clicking on the Investment Funds tab on the landing page. E. Minimum Qualifications Respondents must be able to affirmatively respond to each of the following statements as of March 27, 2017 in order to be considered for the contract award: 1. The Respondent must accept and enter into a written services contract as supplied by the SBA. The services contract will be negotiated in final form during the negotiation process, unless the SBA elects otherwise in its sole discretion; 2. The Respondent must agree (by written affirmation) to provide the services as detailed in Section II, as well as agree to all other requirements as stated in this ITN; 3. The Respondent must be willing to enter into a Service Level Agreement (SLA) for performance measurement purposes. 4. The Respondent s key professionals and the organization must disclose any past or current actual or potential conflicts of interest with the SBA, the members of its Board of Trustees (or their respective staffs), EY, Financial Engines, AonHewitt Consulting, AonHewitt, TekStream, MetLife, or BNY Mellon, or any of the investment providers for the Investment Plan. 5. The Respondent s response to this ITN must be responsive fully to all of the requirements and questions set forth in this ITN. Failure by any Respondent to satisfy the Minimum Requirements described in this Section E. will result in the automatic rejection of the Respondent s response. 8

9 Section II Scope of Services A. Overview The purpose of this section is to describe the deliverables which are sought for the financial education program of the Investment Plan and the MyFRS Financial Guidance Program. The SBA has identified two types of vendors required for the program, as listed below. A single vendor may serve both functions; however, Respondents seeking to perform both functions must be willing to perform only one. A vendor may subcontract with other firms to provide portions of the required services, subject to approval by the SBA. 1 Responses to this ITN should be sufficiently detailed to demonstrate the Respondent s ability to effectively operate in a collaborative environment. Retirement Plan Choice Specialist (RPCS) Key responsibility: Provide web-based content for an employee education program covering Pension Plan/Investment Plan choice for both first and second elections. Key deliverable: Web based software tools for retirement plan benefit modeling. Secondary deliverables: o Employee benefit comparison statements for new employees showing estimated benefits under both plans; o Content for printed and web based educational materials; o Technical content for educational outreach publications, workshops and videos; o Telephone support for technical software questions. Asset Guidance Specialist (AGS) Key responsibility: Provide web-based content for an employee education and asset guidance program covering Investment Plan investing, and retirement planning for both plans. Key deliverable: Web based software tools for asset management. Secondary deliverables: o Employee personal retirement forecast statements; o Content for printed and web based educational materials; o Technical content for educational outreach publications, workshops and videos; o Telephone support for technical software questions. The term retirement plan choice/asset guidance vendor (ECAG) encompasses both types of specialty vendors as described above. B. Deliverables The SBA seeks the following deliverables for the Investment Plan/MyFRS Financial Guidance Program education program. The SBA reserves the right to alter or amend the list of deliverables during contract negotiations. This list comprises a minimum set of deliverables. It is expected that Respondents will propose additional items they deem necessary to meet the overall objectives of the education program and the needs of FRS members in each functional area. All deliverables must comply with section 404(c) ERISA regulations. It is required that the RPCS, the AGS, the Investment Plan Administrator (AonHewitt), the Investment Plan Web Administrator (TekStream) and the Division of Retirement (Division) work closely to provide seamless integrated services to all FRS members. Toward that end, AonHewitt, Division and TekStream are responsible for giving the ECAGs electronic access to: (a) Division- 1 Proposed subcontractors need not have responded to this ITN. However, similar information will be required before the SBA authorizes a subcontractor relationship. 9

10 provided individual employee service and salary records; (b) Division-provided estimated/actual determinations of each employee s Accumulated Benefit Obligation (ABO) transfer eligible amount and/or estimated Pension Plan benefit; and (c) each Investment Plan participant s account balance and investment option allocation. This data will be used as input to software tools provided by the ECAG. 1. Retirement Plan Choice Specialist (RPCS) Deliverables Employee website The SBA has created a single Internet site ( to service all FRS members (both Pension Plan and Investment Plan). The Investment Plan Administrator and the RPCS will be responsible for maintaining portions of the site. The website replicates information maintained by the Division on their website ( links to information on the Investment Plan Administrator s web site, and links to information provided by the current ECAG. The site contains all ECAG software tools supporting the education program, and, in html format, the content of all program educational materials developed by all vendors in the program. Specific software requirements The RPCS will develop for the website (MyFRS.com) detailed plan information, and customized software providing members with education on Pension Plan/Investment Plan choice for both first and second elections similar to the Initial Election and 2 nd Election online tools currently available. At a minimum, specific elements include: An employee web-based Pension Plan/Investment Plan comparative calculator for both first and second elections; Access to the employee s service and salary records, as maintained by the Division of Retirement; Access to the employee s potential ABO transfer amount i.e., the present value of Pension Plan benefits as provided by the Division of Retirement; New employee benefit comparison statement printed and website-only, password protected All of the retirement plan choice software will include education for employees on what ranges of forward-looking assumptions are reasonable. The website will be structured so that employees are guided through the information and tools in a logical order. Initial Election Test User Go to and enter the following User ID: test , Password: test123456, then select Choice Service. Second Election Test User Go to and enter the following User ID: test , Password: test123456, then select 2 nd Choice. Employee benefit comparison statement Utilizing Division member-specific service data, the RPCS may be responsible for preparing a Pension Plan/Investment Plan benefit comparison statement for each newly hired FRS employee (approximately 70,000 annually). The statement will be printed and mailed to the new employee along with other educational information and available on the MyFRS.com website during the choice period and will be password protected. The employee will be allowed to view the underlying service information. In addition to printing the statement from the website, the employee must be able to request by mail or phone a hard copy; fulfillment to be handled by the RPCS. Printed content for the educational material will be provided by the communication consultant (AonHewitt Consulting). This statement is not currently produced by the RPCS however it may be reinstated in the future. See sample in Attachment 1. 10

11 Quarterly newsletters (Employee and Employer) The newsletters contain information on Investment Plan program developments, tips for successful long-term investing and other topical educational information. The RPCS may be requested to submit content and associated graphics. The Employee Newsletter is integrated with the quarterly account statements and fund performance reports to participants distributed by the Investment Plan Administrator and drafted and printed by AonHewitt Consulting. See samples at and 2. Asset Guidance Specialist (AGS) Deliverables Employee website The SBA has created a single internet site ( to service all FRS members (both Pension Plan and Investment Plan). The Investment Plan Administrator and the AGS will be responsible for maintaining portions of the site. The website replicates information maintained by Division on their website ( links to information on the Investment Plan Administrator web site, and links to information provided by the current ECAG. The site contains all ECAG software tools supporting the education program, and, in html format, the content of all program educational materials developed by all vendors in the program. Specific software requirements The AGS will develop for the website ( detailed plan information, and customized software providing members with education and guidance on investing and retirement planning for both plans. At a minimum, specific elements include: A risk assessment and asset allocation modeling software; A succinct discussion of the fundamentals for successful long-term retirement investing; A succinct discussion of the risks employees face in managing their Investment Plan assets, how to prioritize and manage those risks, how to establish appropriate investment goals and how to assess their success toward achieving those goals; Software supporting retirement financial planning, including a tool to estimate retirement income needs; Pension Plan/Investment Plan investment and retirement planning guidance. It is preferred that the investment guidance software be capable of providing for adjustment of a participant s asset allocation based on guidance rendered, if approved by the participant; A clear explanation of fees and their impact on long-term returns including an illustrative tool to enhance employee comprehension; A clear explanation of inflation and its impact on long-term real wealth accumulation (purchasing power) including an illustrative tool to enhance employee comprehension; Explanations of investment volatility and its relationship to long-term return, diversification, compounding, dollar cost averaging, active vs. passive investing and related topics; Historic and forward-looking data on investment returns and volatility generally and for the specific products to be offered. All of the modeling software will include education for employees on what ranges of forwardlooking assumptions are reasonable. The website will be structured so that employees are guided through the information and tools in a logical order. ADVISOR SERVICES Test User Go to and enter the following User ID: test , Password: test123456, then select ADVISOR. 11

12 Employee web-based financial planning software The AGS will be responsible for providing an FRS member an online site similar to the Personal Online ADVISOR SERVICE from the current ECAG to provide members planning forecast simulations. Employee technical support The AGS may be responsible for operating a limited technical support telephone service for other partner vendors having difficulty operating the portions of the website provided by the AGS. Partner vendors will access this service through a toll-free telephone support line. Employee Personal Forecast Statements Utilizing Division-provided service data, the AGS may be responsible for preparing a Personal Forecast Statement for each FRS member with 12 or more months of service (approximately 650,000 annually). The statement should provide an estimated FRS retirement benefit and projected social security benefit, along with any personal outside assets to show total projected retirement income for each member. It should also show any shortfall that should be considered to provide total retirement income from all sources of at least 70% of pre-retirement salary. The statement may be printed and mailed to the employee along with other educational information and may be available on the MyFRS.com website password protected. The member will be allowed to view the underlying service information. In addition to printing the statement from the website, the employee must be able to request a hard copy by mail or phone; fulfillment to be handled by the AGS. Printed content for the educational material will be provided by the communication consultant. This statement is not currently produced however it may be reinstated in the future. See sample in Attachment 2. Quarterly newsletters (Employee and Employer) The newsletters contain information on Investment Plan program developments, tips for successful long-term investing and other topical educational information. The Employee Newsletter is integrated with the quarterly account statements and fund performance reports to participants distributed by the PA. The AGS is responsible for providing content and associated graphics, if requested. See samples at and 12

13 Section III Evaluation Criteria Criteria: The responses to this ITN will be independently evaluated by an Evaluation Team on the basis of the written responses to this ITN and additional written information as requested. If they are determined to be necessary, the Evaluation Team will conduct oral and/or onsite interviews. The evaluation will utilize the following broad scoring categories: Scoring Categories: Weights Experience, qualifications and resources 40% Quality, clarity and responsiveness of the proposal 25% Adherence to ITN requirements 5% Fees 30% TOTAL 100% The Evaluation Team will review the responses and assign a score to each category for each Respondent. The scoring by each member of the Evaluation Team will be aggregated to establish an overall ranking by the team. Using the scoring and evaluation process, up to three firms each for the RPCS and AGS will be recommended for possible interviews/presentations. Commitments made by the Respondents at the interviews will be considered binding. Information and materials obtained during such time will be used by the Evaluation Team to prepare final scores for the Respondents. This final scoring may take into consideration any information, evidence or capabilities that, in the judgment of the Evaluation Team, demonstrate a finalist as being best qualified to provide the necessary services to the SBA. The Evaluation Team will then make a recommendation of finalist(s) to the Negotiating Team, who will then make a recommendation to the Executive Director of the SBA. The Negotiating Team intends to evaluate fee proposals within the context of each Respondent s complete response and fee evaluation. Subsequent fee negotiations are expected to take place upon selection of the finalist(s). The SBA will not be required to select the lowest-cost Respondent. The issuance of this ITN is merely the beginning of the negotiation process. Alternate means of accomplishing the requirements specified herein, with reasonable assurance of satisfactory results, will be considered and may be accepted, at the SBA s sole discretion, without further addendum to the ITN. The contract that shall serve as the agreement between the parties will be developed through the negotiation process. The SBA may enter into negotiations with Respondents in order to achieve the most effective contract for FRS members. The SBA reserves the right to negotiate concurrently or separately with competing Respondents any time after the finalists are selected. The SBA reserves the right to accept portions of a competing Respondent s response and use such portions to form an overall program in the best interest of the SBA. Further, the SBA shall have the right to use any or all ideas or adaptations of the ideas presented in any response received pursuant to this ITN. Selection or rejection of a response will not affect this right. The SBA reserves the right to reject any and all responses or portions thereof. The SBA reserves the right to withdraw this ITN or a portion of this ITN without selecting a contractor. The right of the SBA to set aside submitted proposals and re-negotiate with its existing vendors is retained without exception. 13

14 Section IV Timeline The timeline of the search and evaluation process as currently planned (subject to changes at the sole discretion of the SBA without liability) is as follows: February 13, 2017 February 24, 2017 March 3, 2017 March 10, 2017 March 27, 2017 April 21, 2017 May 1-12, 2017 May 19, 2017 ITN Issued Notifications of Intent to Respond and Qualifications Due, no later than 5:00 p.m., EST Requests and clarification questions on ITN due Responses to ITN Questions Posted ITN Responses Due; no later than 5:00 p.m., EST Selection of Finalist(s) Interviews, if necessary Finalist Selection and Notification. (Contingent on Successful Contract Negotiations) Note: The SBA reserves the right to change the ITN Timeline. Changes will be communicated to respondents via and posted on the SBA website. 14

15 Section V Required Information The purpose of this section is to identify the information that should be submitted in response to this ITN and the order in which it should appear in the proposal response. Each response package should include the following, in the order listed below: A. Cover Letter The proposal shall contain a cover letter identifying the Respondent s name, principal office address, and the name, telephone number and address of the person (or persons) authorized to represent the Respondent regarding all matters related to the proposal. The letter shall also explicitly affirm the following: The Respondent has the current capability to provide the proposed services. The Respondent has reviewed the minimum qualifications and meets the eligibility criteria set forth in Section I, Subsection E. of this ITN. The Respondent has thoroughly reviewed the ITN. The Respondent acknowledges and accepts all terms and conditions included in the ITN. Note: A person authorized to bind the Respondent to all commitments made in its proposal must sign the letter. B. General Information Each proposal shall include the following: 1. A brief description of the Respondent s experience in providing the services identified in Section II, Scope of Services. Respondents must submit for each of the proposed members of the project team the following information: o o The name. The role this person would play on the project and his/her role and position within the company. o Specific examples of related project experience that equips the proposed team member with the skills required to fulfill his/her role on the project. 2. Respondent s References The Respondent should provide names, addresses and telephone numbers of three clients for whom the Respondent has provided retirement plan choice and/or asset guidance or similar services within the past 5 years, and briefly describe the nature of the services. Limit this listing to clients served by the members of the proposed project team. The SBA may contact any of these clients as references. If the Respondent requires advance notice of the SBA s intention to make inquiries, please so indicate. 3. Subcontractors The Respondent shall disclose any subcontractor(s) that may be used to provide any portion of the services outlined in this ITN. 4. Notice of Legal Proceedings a) Each Respondent shall disclose any and all known or threatened material lawsuits, legal or administrative proceedings or governmental investigations, criminal actions or law enforcement activities (including those by federal, state or local authorities, or self-regulatory organizations) or non-routine Securities and Exchange Commission inquiries or investigations relating to Respondent or any of Respondent s affiliates, including any proceedings to which Respondent, its affiliates, or any of their respective officers, directors or employees, is a named party or of which any of such has been the focus. Is Respondent aware of any activities of its firm, its affiliates, or their respective officers, directors or employees that are likely to result in any of the above investigations or proceedings? 15

16 b) List and describe any such proceedings or actions that have occurred in the last two (2) years, including whether Respondent or any of its affiliates, or their respective officers, directors or employees has been censured by any regulatory body. c) In the last two (2) years, indicate whether the Respondent, its principals or any of Respondent s affiliates has submitted a claim for errors & omissions, fiduciary liability and/or fidelity bond insurance coverage. If yes, please explain and provide details. 5. Please list any possible, known or potential conflicts of interests the Respondent may have with the SBA or vendors servicing the Investment Plan or the MyFRS Financial Guidance Program. C. Summary of Proposed Services Generally describe the Respondent's approach and plans for accomplishing the work outlined in Section II, Scope of Services. The description should be provided in sufficient detail to permit the evaluation of proposals fairly without the possibility of misinterpretation. The Respondent should indicate any additional tasks that are necessary and/or advisable that it recommends. A summary of the Respondent s plan to work with the SBA staff and Investment Plan/MyFRS Financial Guidance Program vendors should be provided as well. Respondents should provide a detailed description of the information and assistance the Respondent would require from SBA staff and Investment Plan/MyFRS Financial Guidance Program vendors in the provision of the services required to satisfy Section II, Scope of Services. Provide a detailed development and transition plan that would ensure a seamless transition from the legacy services to the new services proposed by the Respondent. The detailed plan should include an estimate of the time required to complete the full development and transition of the services. D. Fee Proposal All qualified Respondents submitting a Notification of Intent to Respond shall provide complete fee estimates as part of their final proposal responses. Respondents should be sure to include any estimated cost of development and transition (if none, it should be stated). Please understand that the issuance of this ITN is the beginning of a negotiation process. Alternate means of accomplishing the requirements specified herein, with reasonable assurance of satisfactory results, will be considered and may be accepted, at the SBA s sole discretion, without further addendum to the ITN. The contract that shall serve as the agreement between the parties will be developed through the negotiation process. The SBA may enter into negotiations with the Respondent in order to achieve the most effective plan for FRS members. The SBA reserves the right to negotiate concurrently or separately with competing Respondents. The SBA reserves the right to accept portions of a competing Respondent s response and use such portions to form an overall program in the best interests of FRS members. Further, the SBA shall have the right to use any or all ideas or adaptations of the ideas presented in any response received pursuant to this ITN. Selection or rejection of a response will not affect this right. The SBA reserves the right to reject any and all responses or portions thereof. The SBA reserves the right to withdraw this ITN or a portion of this ITN without selecting a contractor. Be sure to include and identify an estimate of required travel time and travel expenses. (Travel expenses will be reimbursed in accordance with Section , Florida Statutes, and related administrative rules.) Respondents are encouraged to provide the SBA with their most competitive price offered to large institutions. E. Fiscal Report The Respondent shall provide a copy of the Respondent's most recent annual fiscal report, containing audited financial statements. 16

17 F. Questionnaire Response The Respondent must answer all the questions posed in Section VII, Questionnaire. The answers must be organized in the same sequence as the questions are presented. Each question must be replicated in no less than Bold 10 point font and precede each response. G. Conflicts of Interest The Respondent must disclose within its proposal whether any officer, director, employee, or agent is also a current or former employee of the SBA. All Respondents must further disclose any factors, financial or otherwise, known to them which may give rise to a conflict of interest between the Respondent and the SBA and its employees, or have the effect of impacting the ability of the Respondent to meet its responsibilities, duties, and obligations to the SBA, as set forth in this ITN. H. General Survey Information The Respondent must complete the applicable sections of the survey. Where information is not available or not tracked as required by the survey the Respondent should so indicate. I. Service Requirements Affirmation Statement The response shall include a signed copy of the Service Requirements Affirmation Statement attached as Appendix I. 17

18 Section VI Proposal Requirements The purpose of this section is to indicate the terms and conditions that will govern the submission and review of proposals made in response to the ITN. A. Instructions for Completion Respondents shall: 1. Prepare their proposals according to the requested format as set forth herein; 2. Respond directly to each question posed and provide each disclosure required herein; and, 3. Provide such relevant attachments as appropriate. B. Submission Instructions To be considered a complete response, each Respondent must adhere to the following procedure: 1. Notification of Intent to Respond: Please send a letter (to be received either by fax, , or hard copy) by 5:00 PM ET on February 24, 2017 addressed to: RUTHIE BIANCO Defined Contribution Specialist Office of Defined Contribution Programs State Board of Administration of Florida 1801 Hermitage Boulevard, Suite 100 Tallahassee, FL Ruthie.Bianco@sbafla.com (850) (office) (850) (fax) In this letter, please provide the following information: An affirmative (but non-binding) statement of your firm s intent to respond to the ITN, the name of the responding firm, and a contact to whom any revisions, notifications, and any further information about this ITN can be directed. Any responses received without a Notification of Intent to respond may be judged as nonresponsive at the sole discretion of the SBA. 2. Proposal Submission: All proposals are due for submission by: March 27, 2017 at 5:00 PM ET. Please submit and deliver all documentation as required and necessary for a complete response to this ITN to the SBA contact listed below: Clearly mark envelope/packages: "FRS Investment Plan Retirement Plan Choice and Asset Guidance Services" RUTHIE BIANCO Defined Contribution Specialist Office of Defined Contribution Programs State Board of Administration of Florida 1801 Hermitage Blvd, Suite 100 Tallahassee, FL

19 The following should be included in your response: Number of Copies Required 1. Cover Letter (See Section V. A.) 8 Yes 2. General Information (See Section V. B.) 8 Yes 3. Summary of Proposed Services (See Section V. C.) 8 Yes 4. Fee Proposal (See Section V. D.) 8 Yes 5. Fiscal Report (See Section V. E.) 8 Yes 6. Questionnaire Response (See Section V. F.) 8 Yes 7. Conflicts of Interest (See Section V. G.) 8 Yes 8. General Survey Information (See Section V. H.) 8 Yes 9. Additional Attached Materials 8 Optional 10. Trade Secret Information (See Section VI. G.) 8 If necessary 11. Flash Drive containing all items 1-9 above 2 Yes Please provide the indicated number of hard copies of each section (in order) in your proposal. Provide 2 flash drives (electronic copies) with your submission to the SBA. (Note: Information legitimately marked as trade secret can be excluded from electronic copy.) It is each Respondent's responsibility to deliver its response to the exact location specified above by the time indicated. Respondents should be certain to allow for sufficient and mail-delivery time to ensure timely receipt of their proposals. Receipt after the time and date specified above or at another location may result in disqualification at the SBA s sole discretion. Incomplete responses may be eliminated from further consideration, in the SBA s sole discretion. The SBA accepts no responsibility whatsoever for failure to deliver or late delivery by services or postal or commercial courier services. Failure by the services or postal or commercial courier services to meet the response deadline may result in disqualification. C. Completeness A response must be complete as to all terms and conditions, including the appendices, on the date submitted. Additional information submitted after the response or separate from the response will not be considered unless specifically requested by the SBA, in its sole discretion, and then only to the extent requested. Incomplete responses may be eliminated from further consideration, in the SBA s sole discretion. D. Cost Liability The SBA shall not be liable or responsible for any costs incurred by any Respondents in preparing and submitting any response to this ITN, attending any oral interview, or for any other activities or occurrences related to this ITN prior to the issuance of a contract. The SBA shall pay all costs incurred by the selected Respondent(s) after the issuance of the contract in accordance with the applicable compensation schedule as agreed upon by the SBA and the successful Respondent(s). The SBA will not pay expenses and costs incurred outside the scope of the applicable compensation schedule. E. Additional Information Questions regarding this ITN or requests for additional information should be directed in written form and sent via to: Ruthie.Bianco@sbafla.com and Jennifer.Williams@sbafla.com. Oral requests for additional information or clarification will not be accepted. Interested firms should not contact any employee, officer, or Trustee of the SBA concerning this ITN after the date of issuance of the ITN (except as required during the normal course of preexisting business relationships). All correspondence, inquiries, and communications regarding the ITN (aside from clarification questions and requests for additional information see above) should be directed to RUTHIE BIANCO and JENNIFER WILLIAMS. Questions will be taken through March 3, Copies 19

20 of all questions and answers will be provided to all Respondents via (as provided in the respondents submission) and will be posted on the SBA website. No inquiries should be directed to any other entity or party regarding this ITN. The SBA does not guarantee the validity or reliability of information obtained from other sources. If it becomes necessary to revise any part of this ITN, an addendum will be provided by to all Respondents that received the initial ITN and the addendum will be posted on the SBA website ( under Doing Business with the SBA, Vendors. The Respondents are responsible for checking the website for any addenda or updates. The SBA reserves the right to accept or reject any or all requests for additional information, either in whole or in part, and may require requests to be clarified or supplemented through additional written submissions. Respondents will be notified of the rejection of their request for additional information. F. Respondent s Responsibility Each Respondent should familiarize itself with the service specifications and the work to be performed before submitting a response. All proposals are to remain valid for at least 180 days from the date of submission. G. Disclosure of Proposal Contents All materials submitted by Respondents shall become the property of the SBA and will not be returned. Proposals submitted may be reviewed and evaluated by any person designated by the SBA, in its sole discretion. Pursuant to Chapter 119, Florida Statutes, the Florida Public Records Law, Proposals submitted in response to this ITN are public records and must be made available for inspection in accordance with the provisions of Chapter 119. If information is provided which could reasonably be ruled a "trade secret" as defined in Section , Florida Statutes, please mark each page (as appropriate and necessary) as such and include in a separate attachment clearly marked - "Trade Secret Information FRS Investment Plan Retirement Plan Choice and Asset Guidance Services ITN Response." Please include a table of contents within this attachment with a detailed listing of and explanation for EACH item marked as a "trade secret." Designation of items as "trade secrets" by Respondents is not dispositive and does not guarantee that the items will not ultimately be disclosed pursuant to Chapter 119, Florida Statutes. Florida is renowned for putting a high priority on the public's right of access to governmental meetings and records. Please operate in a similar spirit and do not include any materials, which could not be reasonably judged as "trade secrets". By submitting a response, each Respondent further understands and agrees that the SBA shall have the right to use any and all information, records, documentation, or items, including any derivation or adaptation thereof or knowledge gained thereby, presented by any Respondent in any response, during any oral interview, or otherwise in connection with this ITN in negotiating and entering into any services contract or for any purpose. The SBA shall have such rights regardless of whether the SBA enters into a services contract with such Respondent or any Respondent under this ITN, successfully negotiates any services contract with any Respondent(s), rejects any or all responses to this ITN, amends or withdraws this ITN at any time, or otherwise satisfies its needs through alternative means. H. Economy of Presentation To be considered for selection, Respondents must submit a complete response to this ITN. Proposals should be prepared simply and economically, providing a straightforward, concise description of the Respondent s capabilities and approach in meeting the requirements set forth in this ITN. The emphasis should be on each proposal s completeness and clarity of content. I. Rejection of Proposals The SBA will be the sole judge of the Respondent s responsiveness to the ITN and reserves the right to reject, in whole or in part, any or all responses, with or without cause, without incurring any liability whatsoever. The SBA may also waive any material or immaterial defect in a response or deviation from the requirements of this ITN. Any waiver exercised under this section will not modify any provision of this ITN. 20

21 J. Contract Execution After selection, the SBA may enter into contract negotiations with the selected Respondent to finalize terms, fees and conditions. This ITN and the selected Respondent's proposal, or any part thereof, may be included in and made a part of the final contract. The resulting contract and all attachments shall be a public document. If, in the sole opinion of the SBA, an acceptable contract with the selected Respondent cannot be reached, the SBA reserves the right to disqualify such Respondent and to negotiate with the next preferred Respondent, or to take any other actions (including no action), in its sole discretion, as contemplated by this ITN. K. Contract Term The SBA proposes to hire a vendor or vendors for a period of 5 years with a possible extension of 2 one year periods for a total of 7 years. The contract or contracts will be effective July 1, 2018, or sooner, if possible. L. Collusion By responding, the Respondent represents that the proposal is not made in connection with any competing Respondent submitting a separate response to the ITN and is in all respects fair and without collusion or fraud. It is further represented that the Respondent did not directly or indirectly induce any firm to submit a false or sham proposal or to refrain from proposing. In addition, the Respondent represents that it did not participate in the ITN development process, had no knowledge of the specific contents of the ITN prior to its issuance, and that no employee of the SBA participated directly or indirectly in the Respondent's proposal preparation. M. Quiet Period The Respondent and its agents, officers, principals and employees will not engage in any written or verbal communication during the selection period (defined below) between the Respondent or any individual assisting the Respondent to be selected and the Executive Director & CIO of the SBA, the Evaluation Team, any SBA employee, whether or not such individual or employee is assisting in the selection of the Respondent, or any member of the Board of Trustees or their respective staffs, consultants or managers, regarding the merits of the Respondent or regarding whether the SBA should retain or select the Respondent. An exception is given for the Procurement Manager. Any unauthorized contact may disqualify the Respondent from further consideration. Normal business communications are allowed, however, for current SBA service providers who are also ITN respondents. The Respondent will not engage in any lobbying efforts or other attempts to influence the SBA, the Executive Director & CIO of the SBA, the Evaluation Team, or any other SBA employees, or any member of the Board of Trustees or their respective staffs, consultants or managers, in an effort to be selected. Any and all such efforts made by the Respondent or its agents, officers, principals, employees, or lobbyist will be disclosed to the Executive Director of the SBA within five calendar days of its becoming known. The selection period for this ITN begins on February 13, 2017 (Date Issued) and will continue until the final selection has been announced or the selection process is otherwise concluded. Nothing herein shall preclude the SBA from seeking clarification about the substance of the response to the ITN within the time frame as provided herein. Nothing herein shall preclude a Respondent from seeking a request for clarification as provided herein. N. Respondent Guarantees All terms and conditions submitted in response to the ITN (all parts) must be guaranteed to remain effective and may not be changed, amended, modified, qualified, or otherwise altered by the selected Respondent(s) for a period beginning on the date of the response filing deadline for this ITN and ending at the conclusion of the term of the services contract. All range of fees and charges, as proffered in response to this ITN must be guaranteed for the term of the services contract. 21

22 O. Oral Interview Respondents that submit a response to this ITN may be required to conduct an oral interview with the SBA with respect to their responses. Should oral interviews be entertained for any such Respondent, each selected Respondent will be given an opportunity to clarify or elaborate on its response. The SBA will determine the occurrence, date, time, and location of such presentation(s), if needed. P. Right to Amend and/or Withdraw The SBA, in its sole discretion, reserves the right to amend or withdraw this ITN at any time and for any reason. Issuance of this ITN in no way constitutes a commitment by or obligation of the SBA to enter into an agreement with any Respondent ultimately selected, and the SBA may, in its sole discretion, reject all responses to this ITN for any reason whatsoever. Q. Conflicts of Interest The Respondent must disclose within its response whether any officer, director, employee, or agent is also a current or former employee of the SBA or any of the members of the Board of Trustees. All Respondents must further disclose any factors, financial or otherwise, known to them which may give rise to an actual or potential conflict of interest between the Respondent and the SBA and its employees, or have the effect of impacting the ability of the Respondent to meet its responsibilities, duties, and obligations to the SBA, as set forth in this ITN. R. False or Misleading Statements Any response which contains false or misleading statements, or which provides references which do not support an attribute, condition, or capability claimed in the response, will not be considered by the SBA, if, in the opinion of the SBA, such false or misleading statement was intended to mislead the SBA in its evaluation of such response. S. Further Instructions and Conditions 1. All responses to this ITN must conform to these instructions. Failure to conform may be considered appropriate cause for rejection of the response in the SBA s sole discretion. 2. Terms and conditions of ITN Submission of a proposal indicates the Respondent s acceptance of the conditions contained in this ITN, unless clearly and specifically noted in the proposal submitted and confirmed in the contract between the SBA and the firm selected. 3. Conformance with statutes Any contract awarded as a result of this ITN must be in full conformance with statutory requirements of the State of Florida and the U.S. Government. 4. Timing and sequence The timing and sequence of events resulting from this ITN will be determined solely by the SBA, and may be modified by the SBA in its sole discretion. 5. Oral agreements - Any alleged oral agreement or arrangement made by a Respondent with any agency or employee shall be superseded by the written contract between the SBA and such a Respondent. 6. Amending or canceling requests - The SBA reserves the right to amend or cancel this ITN, prior to the due date and time, at its sole discretion. 7. Rejection for default or misrepresentation - The SBA reserves the right to reject the proposal of any Respondent that is in default of any prior contract, for misrepresentation or otherwise, as may be determined by the SBA (or its designate), in its sole discretion. 8. SBA s clerical errors in awards - The SBA reserves the right to correct, in its sole discretion, inaccurate awards resulting from its clerical errors. 9. Rejection of qualified proposals - Proposals are subject to rejection in whole or in part if they limit or modify any of the terms and conditions and/or specifications of the ITN. 22

23 10. Respondent s presentation of supporting evidence - A Respondent, if requested, must be prepared to present evidence of experience, ability, service facilities, and financial standing necessary to satisfactorily meet the requirements set forth or implied in its proposal. 11. Respondent s changes to proposal - No additions or changes to a Respondent s original proposal shall be allowed after submittal, except where corrections of errors or omissions may serve the best interests of the FRS and the SBA. Clarification at the request of the SBA may be required at the Respondent s expense. The SBA may permit any Respondent to modify its response after the deadline if the SBA determines that such modification is in the best interest of the SBA. 12. SBA s corrections and changes Any corrections or changes to this ITN will be issued by the SBA, will be identified as a correction or change, and will be posted on the SBA website. Corrections or changes made in any other manner will not be binding. It is the responsibility of the Respondent to obtain all corrections and changes. 13. Right to award, reject or waive The SBA reserves the right, in its sole discretion, to award in part, to reject any and all proposals in whole or in part, to waive technical defects, irregularities and omissions if, in its judgment, the best interests of the FRS and the SBA will be served. 14. Dispute Resolution and Venue - The Agreement will not include binding arbitration provisions, such as those typically found in Alternative Dispute Resolution Procedures, and any action or proceeding to resolve any disputes will be brought and conducted in a state court located in Leon County, Florida. 15. Response Content and Format - In determining the capabilities of a Respondent to perform the services specified herein, the information required in this ITN must be provided by the Respondent and will be weighed by the Evaluation Team as indicated in the evaluation process. (Note: Each requirement must be thoroughly addressed. Taking exception to any requirement listed in the ITN may disqualify the Respondent and its response, in the SBA s sole discretion.) 16. Respondent s Credentials - The SBA may make such investigations, as deemed necessary in its sole discretion, to determine the ability of the Respondent to perform the services contemplated by this ITN. The SBA reserves the right to reject any response if the evidence submitted by, or the investigation of, the Respondent fails to satisfy the SBA that the Respondent is properly qualified to carry out the obligations of the Agreement. 17. Third Party Assurances or Certifications The Respondent should describe any third party assurances or certifications it has obtained as an organization, such as SSAE16 SOC reports, ISO certifications, etc. Also, on a staff level, provide any industry-wide standards, certifications, or qualifications that would demonstrate the Respondent s expertise, experience, and capabilities to provide the requested services. 23

24 Section VII - Questionnaire The Respondent must answer all the questions posed in this section. The answers must be organized in the same sequence as the questions are presented. Each question must be replicated in no less than Bold 10 point font and precede each response. A. General Questions 1. Identify the specific services you are submitting for consideration under this ITN process. 2. Provide the name(s), title(s), address(es), address, and telephone and fax number(s) of the individual(s) responsible for responding to these questions. 3. Provide a brief overview of your company and history of your organization including an organizational chart of your operations. Describe any parent/subsidiary/affiliate relationships. Include information on the geographical locations of your staff. 4. Does your firm, its parent/subsidiaries/affiliates or your financial practice have any economic interest in the sale or marketing of investment products, including but not limited to mutual funds, annuities, and insurance? 5. Describe any commissions, referral fees, incentives or other forms of compensation or rebates that may be provided to individuals or units in your company in return for their recommending or suggesting the purchase of any financial products or services. Disclose any marketing or other arrangements with other firms. 6. Has your financial practice been the subject of litigation or claims in the last three years? If so, for each instance, describe the nature of the suit or claim, including its resolution or its current status. 7. Describe any additional potentially adverse issues or concerns regarding your firm or its personnel that we should be aware of in considering your firm as a vendor for the FRS. 8. Describe the fiduciary responsibility you are willing to undertake for each service provided. 9. Briefly describe your firm s background and experience in providing retirement plan choice and/or asset guidance services. Indicate how many years your company has been active in the defined contribution sector, i.e., 401(k), profit sharing, etc. Indicate how many years your company has been active in defined benefit sector. (Indicate the period of time for each service, if different, such as retirement plan choice for X years, asset guidance for Y years, software tools for Z years.) Provide a representative client list. 10. Briefly describe the qualifications of your leadership team and any significant recent changes in the leadership of your financial practice. 11. Briefly describe the financial strength and stability of your firm. 12. How large is your retirement plan choice and/or asset guidance line of business revenue relative to your other lines of business. Provide the following breakdown of operating income for your most recently completed fiscal year, if applicable. 24

25 Percentage of your Organization s Last Fiscal Year Total Operating Income from All Types of DC Plan Clients by Services Rendered (Year Ended June 2016) Service Rendered 401(a) 401(k) 403(b) 457 Other Total Education Only Asset Guidance Only Education And Asset Guidance Education and/or Asset Guidance plus Administration Managed Account Programs Education and/or Asset Guidance plus Administration and Investment Services Administration and/or Investment Services Only Retirement Plan Choice Only Retirement Plan Choice and Asset Guidance Only Total 13. Describe your firm s philosophy and mission statement. Include your general philosophy on retirement plan choice and/or asset guidance. 14. Describe what distinguishes your services from the services provided by your competitors. Why should we select you? 15. Complete the table below which deals with organizations that you have served in the past but have terminated your services. Also, indicate the rationale provided by these clients for service termination. Total Number of Clients (group by type of service) Number of Clients Terminating Service (group by type of service) Number of Eligible Participants for Largest Client Terminating Service (indicate services terminated) Calendar Year 2015 Calendar Year 2016 Calendar Year to Date What is your average client relationship duration? 17. Describe the service model you propose to implement for the SBA? 25

26 18. Provide a copy of your firm s Form ADV, Uniform Application for Investment Adviser Program, if applicable. 19. Are you a provider of any type of investment, administrative and/or educational service, or affiliated with such a provider, for any of the following plans in Florida: the State University System Optional Retirement Program; the State Community College System Optional Retirement Program; the Senior Management Service Optional Annuity Program; or any of the voluntary tax deferred savings plans sponsored by any participating employers of the State or its agencies, local governments, cities, or special districts (these include IRC Sections 403(b), 457, and 401(k) plans as well as similar plans)? If so, please identify which plans, your scope of responsibilities and the duration of the relationship. 20. Does your firm have a Florida presence? If so, how much of the work on this contract would be done in Florida? B. Descriptive Information on Your Retirement Plan Choice and Asset Guidance Services 1. Describe all of your currently provided retirement plan choice and asset guidance services. Your description should encompass, but should not necessarily be limited to, the following: Types of employee benefit plans which you incorporate in your services; Methods of instruction (in person, through an 800 number, or other technology); Description of each retirement plan choice and asset guidance product or service offered; Examples of retirement plan choice and asset guidance products; Descriptions of any electronic tools you provide, both software-based and web-based; and Innovations that you envision in your service and product offerings within the next two years. 2. For asset guidance Respondents, review the current investment line-up of the FRS Investment Plan and describe how you would implement your asset guidance model. Your response should include, but should not necessarily be limited to, the following: Description of the philosophy/theory supporting the investment guidance model, including return assumptions, fund expenses, income taxes, social security, retirement age, and income replacement ratio; Method for evaluating the current investment line-up and its sufficiency; Method for ongoing investment monitoring; Number of possible investment portfolios for recommendation to participants; Description of connectivity capabilities with AonHewitt, as Investment Plan Administrator, and other vendor s websites (e.g., 457 or 403(b) providers); Description of experience with EY, or other providers, as client s telephone counselor; Description of the minimum participant information required to run your asset guidance model; Detail any asset classes and funds that your model cannot incorporate or other limitations that you have encountered; Ability of the model to incorporate future salary increases, defined benefit plans, other employment after retirement, outside assets, financial data aggregation, and spouse/partner income and assets; and Description of the participant s experience including assessment of existing investment structure, type of recommendations provided, forecast of retirement income, toll-free phone assistance, periodic status updates, participant s ability to adjust the guidance by changing the desired risk level or retirement date. 3. Describe separately your typical retirement plan choice and asset guidance program (including printed material, visits, training, etc.). If your services are tailored to a specific plan sponsor s needs, identify the critical determinations to be made in designing such a program. Provide samples of your communication and education materials, if applicable. Provide access to your online system, if applicable. 26

27 4. Describe the process(es) you use to help plan sponsors measure the effectiveness of your retirement plan choice and asset guidance efforts. 5. Describe your typical contributions toward newsletters or other periodic employee communications that a sponsor may make available. 6. Explain how your company complies with the Americans with Disabilities Act when delivering services to disabled members. 7. Describe what information you will provide to employees, and in what format, in order to help them make a choice between a DC plan and a DB plan. Have you ever provided employees with information on choosing between alternative retirement plans? 8. Describe your experience providing employee financial/retirement forecast statements. Provide a sample statement. 9. Are you willing to provide service performance guarantees? If so, describe. What percent of your total DC revenue is subject to a service guarantee provision? 10. Describe your current capacity to serve your largest client. Indicate how this capacity translates into service levels to plan members. This should cover the services outlined in the Scope of Services. 11. What do you see as the major challenges in providing support to the FRS employee base? 12. Do you provide educational multimedia software for clients? Is it accessible on the Internet for plan sponsors to access? Did you create this software or hire a third party to develop it? Do you have licensing rights? If not, please state the nature of your contract with the software developer. 13. Will your company provide direct communications to members (by , phone or mail) who are deviating greatly from the accepted standards of retirement planning (e.g., too conservative/aggressive an asset allocation; too frequent movement of assets)? 14. Does your firm currently provide any managed account services for DC plan participants? Describe. 15. Suppose, during their 6 month choice period, new employees wait until the last minute to use your services. How would you handle the unexpected workload? 16. Do you survey the plan members who use your services? Are you willing to make the survey results available to the SBA? 17. How do you measure the success of your programs in meeting clients objectives? What changes have you made, or are you making, to your services or products in response to program evaluations? 18. Have your services ever received an award for excellence or high accomplishment? Describe the awarded program, including but not limited to its objectives, the employee base, the specific deliverables and deployment strategy, the reaction of affected employees and how you measured the program s effectiveness. 19. Have you ever developed a web based defined benefit plan retirement benefit calculator? Describe the complexity of the plan and the features of the calculator. What inputs were required of the user? What parameters could the user specify? 20. Have you ever developed a Social Security benefit calculator? Describe. Have you incorporated it into more comprehensive software designed to estimate total retirement income? Describe. 27

28 21. Describe your services that would be aimed at the MyFRS program retirees or near retirees, if different from that described above. 22. Describe your experience integrating your solution(s) into an employer s website including the technology aspects of the integration. 23. Describe the security infrastructure and components used to safeguard personal and financial information when integrating from an employer-based website to your solution. Include, if applicable, discussion of SSO (single sign-on) components and API/web service calls between the website and your solution. 24. If you currently provide web-integration solutions to more than one employer, please describe the level of customization and/or differences in functionality between these employers. 25. Describe your security to protect member-specific identifying information and your privacy policies as they relate to plan sponsors. 26. Describe the technology you use to provide services, your disaster recovery plans, and any technology implementation challenges you anticipate in the SBA program. 27. Describe the process for updating your technology platform with additional features or functionality and how that platform is updated so that services being offered will be kept current. This should include the typical release schedule, and notice timelines/slas for integration partners. 28. Describe the process for updating your technology platform in the case of a security patch or update, particularly to underlying software or application components. How does this release process differ, if at all, for a security/maintenance update? C. Working Relationships 1. Although the SBA intends to contract with each vendor independently, indicate which of the following statements is applicable: My organization wishes to be considered only as a potential vendor working in concert with the following firm as the Principal Vendor of our group: My organization prefers being considered as a potential vendor working in concert with the following firm as the Principal Vendor of our group, but is willing to work with other vendors of SBA s choosing: My organization prefers being considered as a Principal Vendor of the following group of vendors, but is willing to work with other vendors of SBA s choosing: My organization is willing to be considered only as a Principal Vendor working in concert with the following firm(s) as a group: My organization has no particular preferences with respect to working with other vendors. Other, please describe: 28

29 2. If you believe your position on matters raised in question C.1. requires elaboration, please do so. 29

30 D. Fees and Services 1. Please indicate the services for which you wish to be considered: Web based content/tool for Pension Plan/Investment Plan choice for both first and second elections (perform services described under RPCS in scope of work) Web based content/tool for an asset guidance program covering Investment Plan investing, and retirement planning for both plans (perform services described under AGS in scope of work) Other related area(s): 2. Please indicate your proposed fees for the indicated services in the Fee Proposals table: FEE PROPOSALS Indicate the basis for the fee proposal, any minimum/maximum fee, and breakdown the fee in each category if possible, e.g., postage vs. design and development, materials, etc. Consider volume breakpoints in your fee structure and provide alternative pricing structures for the services being quoted, which would assist SBA in managing its costs. I. SOFTWARE TOOLS WEB-BASED PERFORMING AS RETIREMENT PLAN CHOICE SPECIALIST (RPCS) Using the table below, submit your proposed fees: SERVICE PROVIDED a. Providing webbased choice and 2 nd choice services to estimate benefit projections for both plans Year 1 Year 2 Year 3 Year 4 Year 5 Year 6-7 (if both 1 year extensions are triggered) b. Calculating, printing and fullfilling the New Hire Benefit Comparison Statements. Approximately 70,000 Annually (provide total and price per statement package mailed c. Other* *Submit development and/or transition costs under c. in the table above. If none, note that as well. 30

31 II. SOFTWARE TOOLS WEB-BASED PERFORMING AS ASSET GUIDANCE SPECIALIST (AGS) SERVICE PROVIDED Year 1 Year 2 Year 3 Year 4 Year 5 Year 6-7 (if both 1 year extensions are triggered) a. Providing webbased asset guidance and retirement planning tool (assume 650,000 active members between both Plans) b. Calculating, printing and mailing approximately 650,000 Personal Forecast Statements annually (provide total and price per statement package mailed) c. *Other *Submit development and/or transition costs under c. in the table above. If none, note that as well. III. IF YOU WISH TO ALSO PROPOSE YOUR SERVICES IN A DIFFERENT MANNER THAN REQUIRED ABOVE, YOU MAY DO SO BELOW 31

32 E. General Survey Information 1. If you provide on-line asset guidance please answer the following: Total clients for which you provide this service Total number of clients (i.e., distinct entities) to which you provide asset guidance (note if recordkeeper distribution system) Total dollar value of plan assets on which you provide guidance Total number of participants eligible to receive on-line guidance Total number of clients where a defined benefit component is considered in the guidance Total number of participants eligible to receive on-line guidance where a defined benefit component is considered in the guidance Number of recordkeepers with which you have a relationship Largest client (based on number of participants eligible for service) Largest number of participants eligible for on-line guidance from any single client Dollar value of plan assets on which you provide guidance for this client 2. If you provide managed account programs to defined contribution participants please answer the following: Total clients for which you provide this service Total number of clients (i.e., distinct entities) offering your managed account program (note if recordkeeper distribution system) Total dollar value of actual managed plan assets Total number of participants eligible for managed accounts Largest client (based on number of participants eligible for service) Largest number of participants eligible for managed accounts from a single client Dollar value of actual managed plan assets for this client 3. If you provide retirement plan choice services, please answer the following: Total clients for which you provide this service Total number of ongoing clients (i.e., distinct entities) Total dollar value of plan assets for these clients Total number of participants eligible to receive retirement plan choice services for these clients Largest client (based on number of participants eligible for service) Largest number of eligible participants from any single client Dollar value of plan assets for this client Average dollar value of participant account for this client Call center Annual call volume Peak daily call volume Number of currently employed fully-dedicated call center representatives 4. If you prepare participant statements with benefit projections, please answer the following: Number of clients (i.e., distinct entities) for which you prepare participant statements Number of clients (i.e., distinct entities) for which you incorporate defined benefit and defined contribution benefits in participant statements For the largest client (based on number of participants), number of participants for which you generate statements 32

33 Appendix I: Service Requirements - Affirmation Statement By inclusion and execution of the statement provided herein, each Respondent shall certify that: The selection of the Respondent will not result in any actual or potential conflict of interest with the SBA. Alternately, should any potential or existing conflict be known by the Respondent, the response shall specify the party with which the conflict exists or might arise, the nature of the conflict and whether the Respondent would step aside or resign from that engagement creating the conflict. The response is made without prior understanding, agreement, or connection with any corporation, other Respondent, or person submitting a response for the same services, and is in all respects fair and without collusion or fraud. The selection of the Respondent will not violate Section , Florida Statutes, which prohibits the State from selecting certain providers that have been convicted of or entered a plea of nolo contendere to fraud within a period of two years of such conviction. The Respondent and the agents, officers, principals, and professional employees thereof have not and will not participate in any communication prohibited in this ITN. The Respondent s responses to the ITN are those of the Respondent and have not been copied or obtained from any other Respondent responding to any other ITN or competitive proposal whether in Florida or elsewhere either in the past or present. The Respondent meets the Minimum Qualifications set forth in Section I, subsection E. of the ITN. The Respondent hereby agrees to abide by all conditions of this ITN for Retirement Plan Choice and Asset Guidance Services for the Florida Retirement System, and I hereby certify that all information provided in this response is true and correct, that I am authorized to sign this response for the Respondent and that the Respondent is in compliance with all requirements of this ITN, including but not limited to, requirements in this Appendix I. Authorized Signature (Manual) Name and Title (Typed) Date (Typed) 33

34 Appendix II: (8) and (10), Florida Statutes (8) INVESTMENT PLAN ADMINISTRATION. The investment plan shall be administered by the state board and affected employers. The state board may require oaths, by affidavit or otherwise, and acknowledgments from persons in connection with the administration of its statutory duties and responsibilities for the investment plan. An oath, by affidavit or otherwise, may not be required of a member at the time of enrollment. Acknowledgment of an employee s election to participate in the program shall be no greater than necessary to confirm the employee s election. The state board shall adopt rules to carry out its statutory duties with respect to administering the investment plan, including establishing the roles and responsibilities of affected state, local government, and education-related employers, the state board, the department, and third-party contractors. The department shall adopt rules necessary to administer the investment plan in coordination with the pension plan and the disability benefits available under the investment plan. (a)1. The state board shall select and contract with a third-party administrator to provide administrative services if those services cannot be competitively and contractually provided by the division. With the approval of the state board, the third-party administrator may subcontract to provide components of the administrative services. As a cost of administration, the state board may compensate any such contractor for its services, in accordance with the terms of the contract, as is deemed necessary or proper by the board. The third-party administrator may not be an approved provider or be affiliated with an approved provider. 2. These administrative services may include, but are not limited to, enrollment of eligible employees, collection of employer and employee contributions, disbursement of contributions to approved providers in accordance with the allocation directions of members; services relating to consolidated billing; individual and collective recordkeeping and accounting; asset purchase, control, and safekeeping; and direct disbursement of funds to and from the thirdparty administrator, the division, the state board, employers, members, approved providers, and beneficiaries. This section does not prevent or prohibit a bundled provider from providing any administrative or customer service, including accounting and administration of individual member benefits and contributions; individual member recordkeeping; asset purchase, control, and safekeeping; direct execution of the member s instructions as to asset and contribution allocation; calculation of daily net asset values; direct access to member account information; or periodic reporting to members, at least quarterly, on account balances and transactions, if these services are authorized by the state board as part of the contract. (b)1. The state board shall select and contract with one or more organizations to provide educational services. With approval of the state board, the organizations may subcontract to provide components of the educational services. As a cost of administration, the state board may compensate any such contractor for its services in accordance with the terms of the contract, as is deemed necessary or proper by the board. The education organization may not be an approved provider or be affiliated with an approved provider. 2. Educational services shall be designed by the state board and department to assist employers, eligible employees, members, and beneficiaries in order to maintain compliance with United States Department of Labor regulations under s. 404(c) of the Employee Retirement Income Security Act of 1974 and to assist employees in their choice of pension plan or investment plan retirement alternatives. Educational services include, but are not limited to, disseminating educational materials; providing retirement planning education; explaining the pension plan and the investment plan; and offering financial planning guidance on matters such as investment diversification, investment risks, investment costs, and asset allocation. An approved provider may also provide educational information, including retirement planning and investment allocation information concerning its products and services. (c)1. In evaluating and selecting a third-party administrator, the state board shall establish criteria for evaluating the relative capabilities and qualifications of each proposed administrator. In developing such criteria, the state board shall consider: a. The administrator s demonstrated experience in providing administrative services to public or private sector retirement systems. b. The administrator s demonstrated experience in providing daily valued recordkeeping to defined contribution programs. c. The administrator s ability and willingness to coordinate its activities with employers, the state board, and the division, and to supply to such employers, the board, and the division the information and data they require, including, but not limited to, monthly management reports, quarterly member reports, and ad hoc reports requested by the department or state board. d. The cost-effectiveness and levels of the administrative services provided. 34

35 e. The administrator s ability to interact with the members, the employers, the state board, the division, and the providers; the means by which members may access account information, direct investment of contributions, make changes to their accounts, transfer moneys between available investment vehicles, and transfer moneys between investment products; and any fees that apply to such activities. f. Any other factor deemed necessary by the state board. 2. In evaluating and selecting an educational provider, the state board shall establish criteria under which it shall consider the relative capabilities and qualifications of each proposed educational provider. In developing such criteria, the state board shall consider: a. Demonstrated experience in providing educational services to public or private sector retirement systems. b. Ability and willingness to coordinate its activities with the employers, the state board, and the division, and to supply to such employers, the board, and the division the information and data they require, including, but not limited to, reports on educational contacts. c. The cost-effectiveness and levels of the educational services provided. d. Ability to provide educational services via different media, including, but not limited to, the Internet, personal contact, seminars, brochures, and newsletters. e. Any other factor deemed necessary by the state board. 3. The establishment of the criteria shall be solely within the discretion of the state board. (d) The state board shall develop the form and content of any contracts to be offered under the investment plan. In developing the contracts, the board shall consider: 1. The nature and extent of the rights and benefits to be afforded in relation to the contributions required under the plan. 2. The suitability of the rights and benefits provided and the interests of employers in the recruitment and retention of eligible employees. (e)1. The state board may contract for professional services, including legal, consulting, accounting, and actuarial services, deemed necessary to implement and administer the investment plan. The state board may enter into a contract with one or more vendors to provide low-cost investment advice to members, supplemental to education provided by the third-party administrator. All fees under any such contract shall be paid by those members who choose to use the services of the vendor. 2. The department may contract for professional services, including legal, consulting, accounting, and actuarial services, deemed necessary to implement and administer the investment plan in coordination with the pension plan. The department, in coordination with the state board, may enter into a contract with the third-party administrator in order to coordinate services common to the various programs within the Florida Retirement System. (f) The third-party administrator may not receive direct or indirect compensation from an approved provider, except as specifically provided for in the contract with the state board. (g) The state board shall receive and resolve member complaints against the program, the third-party administrator, or any program vendor or provider; shall resolve any conflict between the third-party administrator and an approved provider if such conflict threatens the implementation or administration of the program or the quality of services to employees; and may resolve any other conflicts. The third-party administrator shall retain all member records for at least 5 years for use in resolving any member conflicts. The state board, the third-party administrator, or a provider is not required to produce documentation or an audio recording to justify action taken with regard to a member if the action occurred 5 or more years before the complaint is submitted to the state board. It is presumed that all action taken 5 or more years before the complaint is submitted was taken at the request of the member and with the member s full knowledge and consent. To overcome this presumption, the member must present documentary evidence or an audio recording demonstrating otherwise. * * * (10) EDUCATION COMPONENT. (a) The state board, in coordination with the department, shall provide for an education component for system members in a manner consistent with the provisions of this section. The education component must be available to eligible employees at least 90 days prior to the beginning date of the election period for the employees of the respective types of employers. (b) The education component must provide system members with impartial and balanced information about plan choices. The education component must involve multimedia formats. Program comparisons must, to the greatest extent possible, be based upon the retirement income that different retirement programs may provide to the member. The state board shall monitor the performance of the contract to ensure that the program is conducted in accordance with the contract, applicable law, and the rules of the state board. 35

36 (c) The state board, in coordination with the department, shall provide for an initial and ongoing transfer education component to provide system members with information necessary to make informed plan choice decisions. The transfer education component must include, but is not limited to, information on: 1. The amount of money available to a member to transfer to the defined contribution program. 2. The features of and differences between the pension plan and the defined contribution program, both generally and specifically, as those differences may affect the member. 3. The expected benefit available if the member were to retire under each of the retirement programs, based on appropriate alternative sets of assumptions. 4. The rate of return from investments in the defined contribution program and the period of time over which such rate of return must be achieved to equal or exceed the expected monthly benefit payable to the member under the pension plan. 5. The historical rates of return for the investment alternatives available in the defined contribution programs. 6. The benefits and historical rates of return on investments available in a typical deferred compensation plan or a typical plan under s. 403(b) of the Internal Revenue Code for which the employee may be eligible. 7. The program choices available to employees of the State University System and the comparative benefits of each available program, if applicable. 8. Payout options available in each of the retirement programs. (d) An ongoing education and communication component must provide eligible employees with information necessary to make informed decisions about choices within their retirement system and in preparation for retirement. The component must include, but is not limited to, information concerning: 1. Rights and conditions of membership. 2. Benefit features within the program, options, and effects of certain decisions. 3. Coordination of contributions and benefits with a deferred compensation plan under s. 457 or a plan under s. 403(b) of the Internal Revenue Code. 4. Significant program changes. 5. Contribution rates and program funding status. 6. Planning for retirement. (e) Descriptive materials must be prepared under the assumption that the employee is an unsophisticated investor, and all materials used in the education component must be approved by the state board prior to dissemination. (f) The state board and the department shall also establish a communication component to provide program information to participating employers and the employers personnel and payroll officers and to explain their respective responsibilities in conjunction with the retirement programs. (g) Funding for education of new employees may reflect administrative costs to the investment plan and the pension plan. (h) Pursuant to subsection (8), all Florida Retirement System employers have an obligation to regularly communicate the existence of the two Florida Retirement System plans and the plan choice in the natural course of administering their personnel functions, using the educational materials supplied by the state board and the Department of Management Services. 36

37 Attachment 1 37

38 Page 2 of 4 38

39 39

40 40

41 Attachment 2 41

42 42