All Proposers Request For Proposals #106009: Actuarial Valuation Services. The following answers are provided in response to questions received:

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1 BONNIE HAMMERSLEY Director of Administration DATE: February 9, 2006 COUNTY OF DANE DEPARTMENT OF ADMINISTRATION PURCHASING DIVISION Room 425 City-County Building 210 Martin Luther King Jr. Blvd. Madison, WI / FAX 608/ TDD 608/ CHARLES HICKLIN Controller TO: FROM: All Proposers Request For Proposals #106009: Actuarial Valuation Services Carolyn Clow, Purchasing Agent SUBJECT: ADDENDUM #2 The following answers are provided in response to questions received: Question #1: Answer #1: Question #2: Answer #2: Question #3: Answer #3: Question #4: Answer #4: Attachment C Reference Data Sheet asks for a list of references for which we have recently provided Financial Advisor Services. Should this read GASB OPEB or actuarial valuation services? Strike Financial Advisor Services and replace with Actuarial Valuation Services in Attachment C. Paragraph 20.3 of the Standard Terms and Conditions calls for insurance coverage from a company authorized and licensed in Wisconsin. Our insurers do not do business in your state. Given that this is a professional services project, will you accept other insurance coverage as long as the limits are at or above those listed in 20.3? The Risk Manager will have to address the specific issue during the negotiation process as the answer is dependent upon factors such as, but not limited to, the policy and company(ies) underwriting the insurance. Could you please provide, if available, a summary plan description for the healthcare benefits? See Attachment A: Dean Health Plan & Attachment B: Physicians Plus Health Plan. Could you please provide, if available, a copy of the most recent enrollment forms, including premium by type of coverage? See Attachment C: Health Plan Form, Attachment D: Dental Plan Form, and INTERNET ADDRESS MEMBER: NATIONAL INSTITUTE OF GOVERNMENTAL PURCHASING AND WISCONSIN ASSOCIATION OF PUBLIC PURCHASERS

2 Attachment E: Insurance Premiums. Question #5: Answer #5: Question #6: Answer #6: Question #7: Answer #7: Question #8: Answer #8: Question #9: Answer #9: Question #10: Answer #10: What are the eligibility requirements for participation in the County s postretirement healthcare plan? Any employee who retires from county service who was covered under the group health plan when they retired is eligible to continue coverage either at their own expense or using their accumulated sick leave to pay the premiums. Employees who were covered when they retired from county service can defer coverage for a period not to exceed 10 years from the date of retirement. What is the annual sick leave accrual rate? Employees earn.5 sick days for each 80 hours they work. So a regular 1.0 FTE earns 12 sick days per year. Does the County need the results of the actuarial valuation separated by different funds or employee groups? If yes, could you please provide the number of funds or employee groups? Yes, the county will need the breakdown for six different funds. Please provide a summary of unique Eligibility Requirements and Retiree Premium Contributions for each County group/bargaining unit (e.g., Highway, Parks, Deputy Sheriffs, Non-Represented, etc.). Please specify, as shown in the attachment, if retirees within a particular bargaining unit have different Requirements and/or Contributions. The County does not pay any percentage of the retiree premium for health or dental insurance. Retirees are allowed to continue on the County s group health insurance at their own cost either by using converted accumulated sick leave or by making payment from their own resources. Timeframe for completion: Dane County projects a contract start date of late March What timeframe does the County desire for completion of the GASB 45 actuarial valuation? The County seeks to have preliminary results of the analysis during May 2006 so that estimates can be included in the preliminary budget process Proposed Revisions to Standard Terms and Conditions: Will the County accept the revisions to the RFP # Standard Terms and Conditions that are highlighted (using the redline "Track Changes" function in Word) in the attached document? Note that our legal counsel recommended revisions in Sections 13.0, 14.0, 20.2, 20.3, 20.4, and Proposed changes Dane County s Standard Terms & Conditions will be negotiated with the successful proposer during contract negotiations. INTERNET ADDRESS MEMBER: NATIONAL INSTITUTE OF GOVERNMENTAL PURCHASING AND WISCONSIN ASSOCIATION OF PUBLIC PURCHASERS

3 Question #11: Answer #11: Question #12: Answer #12: Question #13: Answer #13: Question #14: Answer #14: Question #15: Paragraph 1.1 of the RFP states that the County is seeking a vendor to assist it in the meeting of the requirements of Statement 45 of the Government Accounting Standards Board (GASB). Statement 45 of GASB describes financial reporting for sponsors for OPEB plans. Paragraph 5.1 also references Statement 43 of GASB. Statement 43 of GASB describes financial reporting for OPEB plans that are prefunded or administered through a separate trust. Will the County consider funding the retiree medical and dental benefits based on the results of the valuation? If so, would that work fall within the scope of this RFP? The County will use the results of the GASB 45 analysis to determine if it will seek to organize a trust to fund the OPEBs. To what extent will the contracting firm be expected to work with the County s auditors regarding financial reporting results? The results will be reviewed by the County s auditors, but the engagement will not require extensive interaction with the County s auditors. Government Accounting Standard Board (GASB) Statement 45 allows the use of one of six designated actuarial cost methods. Paragraph 1.1 of the RFP state The County will seek advice form the actuary regarding the most appropriate actuarial cost method to be employed. Does the scope of work in the RFP include testing of valuation results using each/any of the actuarial cost method options, or is higher, non-qualitative advice sought? The scope will require testing valuation methods the results will be discussed with County staff. Is there a particular budget or ranges established for this project? If so, can you mention what it is? There is not a specific budget for this valuation project. Is the County willing to negotiate its contract provisions or will the consultant need to accept the contract as presented? Answer #15: See the answer to Question #10. Question #16: Answer #16: Question #17: Does the County favor using a firm with consulting offices located in Dane County or in the State of Wisconsin? The evaluation criteria do not include the location of the firm s offices. Does the County currently contract with a vendor which provides other actuarial or consulting services for the retiree medical and dental plans? If so, can you provide the name of the firm and the tasks? INTERNET ADDRESS MEMBER: NATIONAL INSTITUTE OF GOVERNMENTAL PURCHASING AND WISCONSIN ASSOCIATION OF PUBLIC PURCHASERS

4 Answer #17: Question #18: Answer #18: Question #19: Answer #19: Question #20: Answer #20: The County does not presently contract for such services. Does the County anticipate any meetings or presentations to discuss the valuation results? If so, how many and will a conference call suffice for any of them? The County does not anticipate a need for meetings for presentations at this point. Has the County applied or plan to apply for the Medicare Part D Prescription Drug subsidy? If so, is a report available which estimates the subsidy amount so that it can be accurately reflected in the valuation? The County has invested this possibility and determined that it is not economically feasible. In our opinion, vendor experience consulting with entities (either public or private sector) regarding their post-retirement medical plans is significant for this project. Note that it is only the presentation of the items required to be disclosed that is different under GASB 43 and 45 (in the public sector) versus FAS 106 (in the private sector) The process and the calculations to that point are virtually the same. However, the County has requested only reference with similar governmental engagements. May we include private sector engagements that are similar in scope to this project? Including private and public sector engagements is permitted. Please acknowledge receipt of this addendum by noting Addendum #2 Received on the bottom of the Signature Affidavit when you submit your proposal. INTERNET ADDRESS MEMBER: NATIONAL INSTITUTE OF GOVERNMENTAL PURCHASING AND WISCONSIN ASSOCIATION OF PUBLIC PURCHASERS

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20 ******************************** 2006 ACTIVE Health and Dental Rates ***************************** Dean HMO Dean POE Total Employer Employee Total Employer Employee Single Single Family Family 1, , COBRA Single COBRA Single COBRA Family COBRA Family 1, , Dom Ptnr-taxable Dom Ptnr-taxable cap P+ HMO Dental Total Employer Employee Total Employer Employee Single Single Family Family COBRA Single COBRA Single COBRA Family COBRA Family Dom Ptnr-taxable ************************************* 2005 Health and Dental Rates ********************************** Dean HMO Dean POE Total Employer Employee Total Employer Employee Single Single Family Family 1, , COBRA Single COBRA Single COBRA Family COBRA Family 1, , over over over over over 1under over 1under over 2+ under over 2+ under 65 1, , over 1+ under over 1+ under 65 1, , cap P+ HMO Dental Total Employer Employee Total Employer Employee Single Single Family Family COBRA Single COBRA Single COBRA Family COBRA Family over over over 1under over 2+ under over 1+ under Health-Dental Rates 2006.xls