Request for Information FIDUCIARY & GOVERNANCE REVIEW AND EVALUATION

Transcription

1 for Information FIDUCIARY & GOVERNANCE REVIEW AND EVALUATION TABLE OF CONTENTS REQUIREMENTS HISTORY AND STRUCTURE , CONFLICTS OF INTEREST AND STANDARD OF CONDUCT... 8 RELATIONSHIPS... 9 IN THE WORKFORCE AND REGULATORY ACTION ESSAY QUESTIONS REQUIREMENTS (COMMENTS) (COMMENTS) SURROUNDING CONSULTANTS AND SENIOR EMPLOYEES DEPARTURES IN THE LAST THREE YEARS (COMMENTS) SUBMISSIONS The Board s Chief Investment Officer, Samuel Kunz, shall oversee the RFI process. If you are interested, you must submit electronic by 07/29/2011 to QUESTIONS Questions concerning the RFP must be submitted in writing ten business days before the submission date deadline. 1

2 INTRODUCTION PURPOSE The for Information issued by the Retirement board of the Policemen s Annuity and Benefit Fund of the City of Chicago ( Fund, Plan ) has the purpose of soliciting data from qualified firms that provide Fiduciary & Governance Review and Evaluation to the Retirement Board Trustees, Staff, and its operations. The RFI process is for the Fund s benefit and is intended to provide the Fund with competitive information to assist in the evaluation of institutional firms. Each firm is responsible for determining all factors necessary for submission of a comprehensive proposal. s become the property of the Fund and these and any late submissions will not be returned. Your answers will be open to the public under the Illinois Freedom of Information Act (FOIA) (5 ILCS 140) and other applicable laws and rules, unless you request in your Proposal that we treat certain information as exempt. This for Information (RFI) is for planning purposes only and should not be construed as a solicitation or as an obligation on the part of the Policemen s Annuity and Benefit Fund of the City of Chicago. BASIC REQUIREMENTS To be considered for evaluation the firm must meet all of the following minimum requirements * : 1. The Responder agrees not to make any claims for or have a right to damages because of any misrepresentations or misunderstanding of the specifications or because of any lack of information. The Responder must have verifiable experience in providing Fiduciary & Governance Review and Evaluation for public defined benefit pension system or public 2. funds with at least $1.0B in assets. 3. The individual assigned to the Fund as Primary Consultant must possess previous experience with at least one public defined benefit pension system or public with at least $1.0B in assets. The term Primary Consultant shall refer to the lead, most senior consultant assigned to provide the review and evaluation. 4. The Responder certifies that if selected to perform the services discussed in this RFI, it can and will provide and make available, at a minimum, all awarded services set forth in this RFI. 5. The Responder warrants that all information provided by it in connection with this request for information is true and accurate. 6. No possible conflict of interest between the Fund and the contracting firm, subsidiaries or affiliates. 7. Compliance with all U.S. and Illinois laws and statutes. Yes/No 8. Provide references for three (3) defined benefit public pension system clients or public funds contact person and telephone number, date of inception of client relationship, and assets under supervision as of May, * Please provide any relevant comments in related table in the Appendix 2

3 3

4 SERVICES The firm will be required to provide the following scope of services to the Fund * : 9. Review of the Plan s organizational structure. 10. Evaluation of transparency, accountability, ethics and conflicts of interest. 11. Review of the Plan s fiduciary liability insurance. 12. Legal issues (evaluation of enabling provisions and potential alignment of interest issues). 13. Evaluation of cost and fees paid by the Plan (including custodial services) 14. Review of brokerage and trading operations, and custodial services. 15. Assessment of the Fund s disaster recovery and business continuation plan. Yes/No * Please provide any relevant comments in related table in the Appendix 4

5 QUESTIONS FIRM HISTORY AND STRUCTURE 16. Name of firm. 17. Year of organization. 18. Address of the firm s main office and the location city of all other firm offices that provide services similar to those requested by this RFI. 19. Current ownership structure. 20. List affiliated companies (parent and subsidiary), and/or joint ventures. 21. Briefly description of the firm s history. List any persons who have an ownership or distributive income share in the 22. consultant that is in excess of 7.5%. Include individuals and corporate owners and indicate which individual owners are employed by your firm and the positions they hold. 23. Please list any person who serves as an executive officer of the firm. 24. Please list all subcontractors *, and the expected amount of money each will receive under the contract. Within the past five years, have there been any significant developments in your 25. organization such as changes in ownership, restructuring or personnel reorganizations? 26. Please describe any such anticipated changes in your organization in the next 12 months. Please complete the following table by listing and describing all lines of business for 27. your organization, by percentage of revenue and by percentage of employees. Line of Business Percent of Revenue Percent of Employees * subcontractors do not include non-investment related professionals or professionals offering services that are not directly related to the investment of assets, such as legal counsel, actuary, proxy-voting services, services used to track compliance with legal standards, and investment fund of funds where the board has no direct contractual relationship with the investment advisers or partnerships. 5

6 28. Has your firm filed for bankruptcy, reorganization or any financial hardship in the last seven years? 29. If so, what security will your firm provide to the Fund to ensure contract fulfillment and quality of services? 30. Describe the level of errors and omissions insurance coverage and any other fiduciary or professional liability insurance the firm carries. 31. Please name the carriers providing such insurance. 32. Has there been any claim made on any of the above policies in the last five years? 33. If so, describe the outcome. 6

7 PERSONNEL 34. Provide an organizational chart for the consulting unit. 35. What is the number of full time employees in your firm? 36. What is the number of senior consultants in your firm? 37. What is the number of consultants (excluding senior consultants) in your firm? 38. What is the number of consultants with professional designations? * CONSULTANTS WITH PROFESSIONAL CERTIFICATIONS (BREAKDOWN) CFAs %total * CAIAs %total CPAs %total Other %total 39. How many consultants and senior employees have left your firm in the last three years? 40. Please describe the circumstances surrounding these departures. 41. How many other employees have left your firm in the last three years? * Percentage of total consultants Please specify designation Please provide any relevant comments in related table in the Appendix 7

8 AFFILIATIONS, CONFLICTS OF INTEREST AND STANDARD OF CONDUCT Provide a statement that no officer, member, employee or agent of the Fund has any 42. known personal or pecuniary interest, direct or indirect, in the services contemplated by this for Information. Has the firm received loans from any money management firms, their subsidiaries, 43. or principals? Does your firm, its principals or any affiliates own any part of, or have any strategic 44. alliance in a money management firm, broker-dealer or other organization that sells services to institutional investors and/or SEC registered advisors? Does your firm or any of the listed affiliates provide any other retirement or financial 45. services such as investment management, investment banking, actuarial, brokerage or consulting services? Please explain how services could create any type of conflicts between your firm 46. and the Fund? 47. If such conflict occurs how would you plan to manage the situation? If your firm and any affiliate organizations provide more than one service, describe 48. how you protect against conflicts of interest? 49. Does your firm receive any revenues from custodian banks? If yes, please describe the types of services provided and fee arrangements that 50. typically apply. Has the firm adopted the CFA Institute Code of Ethics and Standards of 51. Professional Conduct, and/or Does the firm have a written code of conduct or set of standards for professional behavior? 52. If so, please attach a copy. 53. If so, state how they are monitored and enforced. 54. If so, how is employee compliance monitored? 8

9 CLIENT RELATIONSHIPS Please provide a description of the team assigned to this account (Include titles, 55. functions, academic credentials and relevant experience. Identify and explain role of back-up personnel). 56. Primary contact name for this RFI and all contact information. 57. Please identify the primary consultant. 58. Please identify the back-up consultant. 59. Please identify who will perform the analytical work on the relationship. 60. Describe the firm's back-up procedures in the event the key personnel assigned to our accounts should leave the firm. Will your firm agree to specify in the contract that it will be a fiduciary as defined in 61. Section 3(21)A for the Employee Retirement Income Security Act of 1974 ( ERISA ) and to perform the fiduciary duties imposed on an ERISA fiduciary under that act? 62. Are there any restrictions you place on your service as fiduciary? 9

10 DIVERSITY IN THE WORKFORCE Does the firm qualify as "minority-owned business," "female-owned business," or "business owned by a person with a disability" as those terms are defined in the 63. (30 ILCS 575) Enterprise for Minorities, Females, and Persons with Disabilities Act? 64. Minority ownership (%)? 65. Women ownership (%)? 66. Person with disability ownership (%)? Does the firm have an Affirmative Action Policy or other policies that promote 67. diversity in the workforce? If Yes, please provide details. Does the firm have a MWDBE vendor supplier policy? Please describe. If such a 68. policy exists, please list the value amount of such programs for the last three years. Please provide as much detail as possible. Provide a list of names and addresses of woman-owned, minority-owned and 69. emerging businesses with which you currently do business. Please complete the attached Diversity Table and return separately. 70. DiversityTable.xls 10

11 LITIGATION AND REGULATORY ACTION 71. Has your firm been involved in litigation within the last five years? 72. If Yes, disclose the history and status of any such litigation. 73. Is there any pending litigation arising from your performance? 74. Please provide full explanations of all occurrences. Has your firm, its principals or any affiliates ever been the focus of a non-routine 75. Securities and Exchange Commission (SEC) inquiry or investigation or a similar inquiry or investigation from any similar federal, state or self-regulatory body or organization? 76. If yes, please provide details. 77. Describe any sanctions or any other disciplinary actions taken with respect to your firm by any other authoritative body. COSTS 78. What will the assignment cost be? Preference is given to fixed costs. 79. Does your firm offer a pricing schedule by modules? (See Service questions 9 to 15)? 80. If Yes, please break down 11

12 BRIEF ESSAY QUESTIONS 81. Please describe in general terms how you would structure the review and evaluation? To prepare us for fiduciary evaluation, can you identify specific prudent practices 82. that you will use as a benchmark to evaluate the Fund s conformity with the Prudent Person rule which represents the fiduciary standard by which the Fund is governed? (See Illinois Public Act 40 ILCS 51/-109 and PA ) 83. Please describe the methodology you will employ in evaluating the Fund s conformity with the Prudent Investor rule? 84. To avoid bias, is your methodology applied on a consistent and standardized basis in all such reviews you perform? 85. Which aspects of the Fund s operation should be reviewed in evaluating our conformity with the Prudent Investor rule? 86. What plan documents and data that would be required? 87. What Fund personnel identified by function should be interviewed? 88. What would be required from the Fund s service providers in terms of documentation, availability for interview etc.? 89. What qualifies someone or a firm to perform the evaluation which the Fund seeks? 90. What support would be required from the Fund to facilitate the review and evaluation? 91. How long will the assignment take to complete? 92. How should findings be presented to the Fund s Board? 12

13 APPENDIX BASIC REQUIREMENTS (COMMENTS) Comments * SERVICES (COMMENTS) Comments CIRCUMSTANCES SURROUNDING CONSULTANTS AND SENIOR EMPLOYEES DEPARTURES IN THE LAST THREE YEARS (COMMENTS) Name Date joined/left Position/Function Replaced by Reason for leaving * Please reference comments to the question number 13

14 14