REQUEST FOR PROPOSAL FOR ACTUARIAL SERVICES FOR OTHER POST EMPLOYMENT BENEFITS (O.P.E.B.) # FN-P

Transcription

1 REQUEST FOR PROPOSAL FOR ACTUARIAL SERVICES FOR OTHER POST EMPLOYMENT BENEFITS (O.P.E.B.) # FN-P Issue Date: Monday, February 22nd, 2016 Due Date and Hour: Tuesday, April 5th, 2016 at 2:00 p.m. Albemarle County Service Authority 168 Spotnap Road Charlottesville, VA 22911

2 A. Purpose I. INTRODUCTION The Albemarle County Service Authority (Authority) is requesting proposals from qualified health benefits actuarial firms to provide an actuarial review of the Authority s post-employment benefits package for retired employees in accordance with the Governmental Accounting Standards Board (GASB) Statement No. 45, Accounting and Financial Reporting by Employers for Post Employment Benefits Other Than Pension. The report will allow implementation and compliance of the GASB rules regarding accounting for Other Post Employment Benefits (OPEB). The Authority will also need an estimate of the outstanding and future liabilities associated with providing its post-employment benefit package, in order to assess the annual contribution necessary to fund such benefits. B. Background Located in central Virginia, 100 miles southwest of Washington, DC and less than 65 miles west of Richmond, the state capital of Virginia, the Authority was established in 1964, pursuant to the Virginia Water and Waste Authorities Act, to provide water and sewer service to those jurisdictional areas in the County of Albemarle (County) designated by the County s Board of Supervisors. The current service areas include the urbanized ring around the City of Charlottesville (City), the communities of Crozet and Scottsville and the village of Rivanna. A six-member Board of Directors, appointed by County Supervisors for renewable four-year terms, appoints management and governs Authority operations. In June 1973 the Authority and the City sold all water and sewer treatment and major distribution facilities to the newly-formed Rivanna Water and Sewer Authority, which wholesales finished water and sewer treatment services to the Authority and to the City. In 1975 the Authority purchased from the City the facilities to serve all current water and sewer customers outside the City limits; since then it has been the sole public retailer of these services in the County. In addition to retailing finished water and sewer collection services, the Authority constructs pumping stations and line extensions; purchases, connects to the system, and upgrades private water systems; installs water supply and sewage collector systems; inspects water delivery and 2

3 sanitary sewage systems installed and contributed to it by developers; and maintains these constructed and contributed facilities. C. Current Work Force Description The schedule of full time employees as of June 30, 2015 is listed below: Fiscal Year Administration Finance Engineering Maintenance Total D. Employee Benefits to be Evaluated The Authority participates in a single employer plan and provides retirement and health insurance benefits for up to five years for full time employees who retire and meet the requirements of the Voluntary Early Retirement Incentive Program (VERIP). VERIP benefits are paid semi-monthly for a period of five years after retirement or until age 65, whichever comes first. Participants in the Authority s VERIP must meet the following requirements: must be eligible and prepare an application for early or full retirement under the provisions of the Virginia Retirement System (VRS); must have been employed by the Authority for 10 years prior to retirement, be at least 50 years of age and currently employed; and any employee retiring under the disability provisions of VRS and/or Social Security will not be eligible for the VERIP. In Fiscal Year 2015, there were 4 retirees participating in this program at a cost of $39,722. The Authority is a participant in the Virginia Retirement System (VRS), a plan which is mandatory for all full time employees. The employee pays 5% of their creditable compensation to VRS, and the Authority pays the remaining VRS mandated contribution rate. Employees who are eligible to retire under the Virginia Retirement System will be paid upon their retirement $200 per year for each year of continuous service to the Authority up to a maximum payment for 25 years of service. The surviving spouse of an active employee who dies will receive payment 3

4 for the former employee s years of service at the rate of $200 per year for each year of continuous full-time employment. II. SCOPE OF SERVICES The actuary will assist the Authority in complying with GASB 45 which establishes the measurement, recognition and display of OPEB expenses and related liabilities in the financial reports of the Authority. The actuary will provide the Authority with an actuarial determined valuation of the Authority s OPEB for compliance with GASB 45. The Authority currently finances its OPEB on a pay-as-you-go basis, and the financial statements do not report the financial effects of OPEB until the benefits are paid. GASB 45 requires the accrual of the expense of the OPEB over the working career of the employees rather than on the pay-as-you-go basis. Professional services will be required to perform the following: Prepare an actuarial report that provides the annual required contribution, the annual OPEB expense and other actuarial calculations as needed for 3 fiscal years, ended June 30, 2016 through June 30, Determine the present value of projected benefit payments. Develop a projection of the post-employment benefit payments for the next twenty years. Provide a model which can be used for forecasting the effect of changes in assumptions about coverage. The model provided should be based on the specific methods and assumptions that were used to develop valuations. Recommend the amount of reserves the Authority should accumulate to address the unfunded liability associated with OPEB reflecting funding periods covering the next ten, twenty and thirty years to fund the post-employment benefit liabilities. As appropriate, provide recommendations on managing the OPEB liability and enhancing data quality. Analyze the data to assess any inconsistencies. Prepare the necessary material for the Comprehensive Annual Financial Report to comply with GASB OPEB reporting and disclosure requirements. 4

5 III. CONTENTS OF PROPOSAL Interested firms shall provide three (3) copies of their proposals which shall include the following: 1. Provide the name, address of the office which is participating in project, telephone number, fax, address and website. 2. Submit letter of interest which includes a general introduction and brief statement stating the proposer s understanding of the actuarial services to be performed and a commitment to perform the services within the time period specified. 3. Name of supervising actuary who will be assigned to the project and contact information. A list of other actuaries and personnel who will have key roles in the project should also be identified. 4. Summary information regarding the professional qualifications and experience of supervising and support actuaries who shall perform work on the project. 5. Location of office where majority of services will be conducted. 6. State the overall approach of the valuation, including objectives, scope of work to be performed and methodologies or techniques to be used. 7. Names of references from at least three (3) other governmental entities for which comparable services have been rendered. Indicate the name of the client organizations, addresses, telephone numbers, contact persons and their titles, nature of the studies, number of employees/retirees addressed in the report, and the year the reports were completed. 8. Provide a schedule identifying all tasks to be performed. Indicate total time required to complete overall project. 9. A breakdown of the firm s hourly rates, fees and charges for services, for total project and a proposed payment schedule. For consideration to be given to any proposal pursuant to this RFP, three (3) paper copies of the RFP materials must be received by 2:00 p.m. local time on Tuesday, April 5 th to the address listed below: Albemarle County Service Authority Attention: Barb Klendworth 168 Spotnap Road Charlottesville, VA

6 Proposals may be made by personal delivery or by regular mail, but not by facsimile or . IV. PROPOSAL EVALUATION PROCESS The proposals will be evaluated on various criteria including and not limited to: 1. Expertise, experience and qualifications of the firm and its personnel. 2. Current and projected workload and availability to complete the project in a timely manner. 3. Performance of past work. 4. Experience working with governmental agencies. 5. Overall costs and associated fees to be charged. 6. Schedule for various elements of the scope of work and proposed completion date. The Authority will evaluate each of the proposals and may conduct interviews. The Authority reserves the right to reject any and all qualifications and reserves the right to award or not to award a contract as may be in the best interest of the Authority. All inquiries concerning this Request for Proposals should be directed to Barb Klendworth, Accountant, at (434) extension