Request for Proposal for Professional Services for Trust and Investment Services. Prepared by Avalon Borough, Allegheny County, Pennsylvania.

Transcription

1 Request for Proposal for Professional Services for Trust and Investment Services Prepared by Avalon Borough, Allegheny County, Pennsylvania for POLICE AND NON-UNIFORM PENSION PLANS OCTOBER 2017 Lorraine Makatura Borough Manager 640 California Avenue Pittsburgh, PA 15202

2 Table of Contents Page Introduction 3 A. Specifications Relating to the Services Requested 4 B. Evaluation Process 5 C. Application Applicants History, Ownership & Organization 6 Investment Policy and Philosophy 6 Services 7 Fees 8 D. Act44 of 2009 Disclosures 9 2

3 Introduction Avalon Borough is seeking a service provider for the services listed below. We will employ the enclosed Evaluation Process and will require evidence that the responder has a history of providing a complete package of services. Avalon Borough sponsors two defined benefit pension plans. The Police Pension has assets of approximately $2.3M, Non-uniform Pension assets of approximately $600K. The Borough is soliciting proposals to provide the following investment and custodial services: 1. Investment counseling services to provide sound strategies for the stability, preservation and growth of pension assets. 2. Custodial services to provide secure possession, investment placement, reporting and distribution of pension assets. Separate trust funds and custodial accounts are required for each of the pension plans. Requests for clarification or documents needed to complete the RFP may only be made to: Lorraine Makatura, 640 California Avenue Pittsburgh, PA All interested respondents must complete each section of the Application and Disclosure Form and forward it to: lmakatura@boroughofavalon.org. Proposals and disclosure forms must be received no later than 4:00 pm on November 10,

4 A. Specifications Relating to the Services Requested The proposal shall include detailed information on the following topics.: Identify and describe the specific professional services with respect to which you are proposing. Describe your history and experience in providing such services to current clients, including Pennsylvania municipal defined benefit plans. Provide current list of client references for those Pennsylvania municipal defined benefit plans. Identify the limits, if any, of services provided under your proposed fee and your fee schedule for other services. Describe with particularity the nature and frequency of consultative services and the availability of customer services you will provide. Specify limits on your Errors and Omissions Insurance and what securities are in place to protect against unauthorized access to accounts. Set forth any facts or factors, not otherwise addressed in this RFP, which you feel are relevant to the Borough s selection of professional service providers. Submit all required disclosures under Act 44 of Form provided as part of this RFP. 4

5 B. Evaluation Process The evaluation of responses to this RFP and final decision will be conducted by the Plan Trustees (Borough Council) for both funds. The procedures for receiving and evaluating applicants to determine the most qualified include a review of the applicant's qualifications, experience, expertise and fees to be charged. Note that the contract will not necessarily be awarded to the lowest bidder. The applicant's track record with the Borough will be taken into account, not only for this Plan, but for any investment services the applicant may have provided other professionals engaged by the Borough or Borough officials. Upon review, the Borough may request all, some or none of the applicants submit to an interview. The Borough reserves the right to reject any bid automatically for requested information omitted or for submission past the deadline. If the Borough is not satisfied with the bids received, the Borough shall either (1) place a second advertisement with any revisions deemed appropriate or (2) cancel the solicitation of services. Upon the award of the contract, within 10 days the Borough shall provide the unsuccessful bidders a copy of the winning bidder's application (sans proprietary information), disclosure forms and a summary of the relevant evaluation factors considered. This information shall be posted on the Borough's website (publically displayed at the Borough's office) at least seven days subsequent to the execution of the contract. The criteria to be used shall center upon the responder s qualifications, experience, expertise, proposed fee schedule, the Borough s prior experience with and knowledge of the responder, and the Borough s cumulative confidence in the successful responder. We will consider a number of factors in combination. These factors will include, but not be limited to, the items listed in Section C as referenced below and in the RFP. Final decisions will be based on responses in those specific items. The successful bidder will be engaged immediately to transfer all pensions funds in a timely manner, not to interfere with retiree disbursements. It is also understood that fees for anticipated services other than those listed in Section C, will be quoted to the Borough before commencement. At the Borough's discretion, the successful applicant will be retained beyond the duration of the contract, subject to its approval of the fee schedule proposed. 5

6 C. Application All proposals must follow the order of the questions as listed below. You may provide attachments and refer to them. List your organization s complete name, address, telephone and fax numbers. Also include contact information in the event that the Borough has specific questions on your proposal. Applicant s history, ownership and organization 1. Briefly describe the organization, the year it was founded, location of it s headquarters and other offices, its ownership structure and business focus. 2. What is the total asset base and number of municipal pension funds on which you consult? 3. Briefly describe any prior experience with the Borough. 4. Identify the consultants and other key staff who would be involved in serving our account. Provide brief resumes of these individuals. 5. Describe the turnover that your organization has had over the last five years with consultants that provide the requested investment advisory services. 6. Within the last five years has your organization or an officer or principal been involved in any business litigation or other legal proceedings relating to your professional activities? If so, provide an explanation and indicate the current status. Investment Policy and Philosophy 1. Describe the investment philosophy you would employ for this portfolio. 2. Describe your asset allocation process for pension investments. 3. How many investments are on your approved list and what are the guidelines you impose on the investment managers? Provide a one, three, five and ten year performance analysis of those investments. 4. Provide three references that we may contact where you provide investment management services and employ a philosophy which you have described above. 5. Confirm that your base services include preparation of an investment policy, and list the key components of the policy. 6

7 Services 1. Describe your proposal regarding investment services. 2. Describe your proposal regarding custodial services. Include a description of how monthly payments and lump sums are issued, including tax withholding and submission as well as tax report to IRS and to retirees. 3. Describe the policies and procedures you have in place to guard against any form of security breach, e.g., electronic, verbal requests. 4. Will you state in writing that you will act as a fiduciary of our investment program? 5. Describe your knowledge and experience with Act 44 of What methods do you use in calculating investment performance and benchmarking of a pension portfolio? How often are performance reports produced and delivered? Will we receive monthly statements? Include a sample performance evaluation report. 7

8 Fees 1. Please identify all fees if you were managing the two portfolios. These fees should include both direct and indirect fees, whether paid to you or to another entity. Please specify the terms of both dollar amounts and percent of asset fees. Complete the following chart, which includes the fee column (express as both dollar amount and % of assets) and the explanation column, where we are looking for a complete explanation as to how the fee in that category is being calculated. Also state whether the fees below are based on the combined assets of the two plans, or whether each plan is separate with respect to fees charged. ANNUAL/ONGOING $XX Portfolios(s) Description Fee Explanation Custodian Direct cost for custodial services Investment Advisory Direct cost for investment advisory services Mutual Fund Expenses Individual mutual fund fees Investment Expenses Fees for underlying investments outside of mutual funds (separate account manager fees, etc.) %/$ %/$ %/$ %/$ Explain how fee is calculated. Example, annual fee of $500 plus 0.10% of assets. Explain how fee is calculated. Example, annual fee of $500 plus 0.10% of assets. This is the dollar weighted average expense ratio based on the assets that will be placed in mutual funds. This is the dollar weighted average expense based on the assets placed in separate accounts. TOTAL ANNUAL FEES %/$ This represents the total in all fees. Other Potential Fees Explain what the additional fee would be for and the amount. Example $50 wire fee. 2. Do you receive any direct or indirect compensation from investment product providers? Set forth any facts or factors, not otherwise addressed in the RFP, which you feel are relevant to the selection of the respondent providing investment consulting and custodial services. 8

9 D. Act 44 of 2009 Disclosures Confirming with the disclosure provisions of Act 44 of 2009, please complete the Act 44 Disclosure attached to this application. Consider the following and identify any individuals employed or contracted by your firm who: Are current or former employees of the Borough. Are registered State or Federal lobbyists. Have been hired as a third party to communicate with the Borough. Have made political contributions to any Borough officials or candidates for Borough offices after October 1, Have solicited contributions for any Borough official or any Borough official's political party or political action committee. Have a direct business, commercial or financial relationship with any Borough officials. Have bestowed any gifts beyond a nominal value to any Borough officials. 9