REQUEST FOR PROPOSAL

       ACTUARIAL AUDIT SERVICES

             RFP JAN06-2

            January 13, 2006




Iowa Pub...
IOWA PUBLIC EMPLOYEES’ RETIREMENT SYSTEM
ACTUARIAL AUDIT RFP




                               Table of Contents




I.  ...
IOWA PUBLIC EMPLOYEES’ RETIREMENT SYSTEM
ACTUARIAL AUDIT RFP


                                        SECTION I

        ...
IOWA PUBLIC EMPLOYEES’ RETIREMENT SYSTEM
ACTUARIAL AUDIT RFP


     Auditor in providing direct services to IPERS. As used...
IOWA PUBLIC EMPLOYEES’ RETIREMENT SYSTEM
ACTUARIAL AUDIT RFP


     1.     The audit should cover the following:
         ...
IOWA PUBLIC EMPLOYEES’ RETIREMENT SYSTEM
ACTUARIAL AUDIT RFP


     1. January 13, 2006—RFP ISSUED
     2. January 27, 200...
IOWA PUBLIC EMPLOYEES’ RETIREMENT SYSTEM
ACTUARIAL AUDIT RFP


                                       SECTION II

        ...
IOWA PUBLIC EMPLOYEES’ RETIREMENT SYSTEM
ACTUARIAL AUDIT RFP


            members, and IPERS staff during the selection p...
IOWA PUBLIC EMPLOYEES’ RETIREMENT SYSTEM
ACTUARIAL AUDIT RFP


D.   PROPOSAL OBLIGATIONS

     The contents of the proposa...
IOWA PUBLIC EMPLOYEES’ RETIREMENT SYSTEM
ACTUARIAL AUDIT RFP


     of that which is most beneficial to the interests of t...
IOWA PUBLIC EMPLOYEES’ RETIREMENT SYSTEM
ACTUARIAL AUDIT RFP


M.   THE RESULTING CONTRACT

     The Contract shall be a c...
IOWA PUBLIC EMPLOYEES’ RETIREMENT SYSTEM
ACTUARIAL AUDIT RFP


            to achieve performance criteria or outcomes. Di...
IOWA PUBLIC EMPLOYEES’ RETIREMENT SYSTEM
ACTUARIAL AUDIT RFP


                                        SECTION III

      ...
IOWA PUBLIC EMPLOYEES’ RETIREMENT SYSTEM
ACTUARIAL AUDIT RFP


           services are provided. For each office, provide ...
IOWA PUBLIC EMPLOYEES’ RETIREMENT SYSTEM
ACTUARIAL AUDIT RFP


           Committee, or IPERS staff in the last twelve mon...
IOWA PUBLIC EMPLOYEES’ RETIREMENT SYSTEM
ACTUARIAL AUDIT RFP


     7.    For the Primary Auditor and all Secondary Audito...
IOWA PUBLIC EMPLOYEES’ RETIREMENT SYSTEM
ACTUARIAL AUDIT RFP


           •   Date of departure
           •   Name
      ...
IOWA PUBLIC EMPLOYEES’ RETIREMENT SYSTEM
ACTUARIAL AUDIT RFP


                recommendations. How are these services mon...
IOWA PUBLIC EMPLOYEES’ RETIREMENT SYSTEM
ACTUARIAL AUDIT RFP


     5.    Within the last five years, has your firm been n...
IOWA PUBLIC EMPLOYEES’ RETIREMENT SYSTEM
ACTUARIAL AUDIT RFP


F.   FEES

     1.     Describe how fees are determined for...
IOWA PUBLIC EMPLOYEES’ RETIREMENT SYSTEM
ACTUARIAL AUDIT RFP


                                       SECTION IV

        ...
IOWA PUBLIC EMPLOYEES’ RETIREMENT SYSTEM
ACTUARIAL AUDIT RFP


        Auditor fails to remedy the conditions contained in...
IOWA PUBLIC EMPLOYEES’ RETIREMENT SYSTEM
ACTUARIAL AUDIT RFP


          provision in no way limits the remedies available...
IOWA PUBLIC EMPLOYEES’ RETIREMENT SYSTEM
ACTUARIAL AUDIT RFP


9. CONTRACT CHANGES. Changes in contractual provisions or s...
IOWA PUBLIC EMPLOYEES’ RETIREMENT SYSTEM
ACTUARIAL AUDIT RFP


            of a foreign country.

      10.5 In the event ...
IOWA PUBLIC EMPLOYEES’ RETIREMENT SYSTEM
ACTUARIAL AUDIT RFP


       12.4 Reporting of Unauthorized Disclosure. The Audit...
IOWA PUBLIC EMPLOYEES’ RETIREMENT SYSTEM
ACTUARIAL AUDIT RFP


   payment arising from the Contract without prior written ...
IOWA PUBLIC EMPLOYEES’ RETIREMENT SYSTEM
ACTUARIAL AUDIT RFP


26. AUDITOR’S TERMINATION AND TRANSITION DUTIES. If this Co...
IOWA PUBLIC EMPLOYEES’ RETIREMENT SYSTEM
ACTUARIAL AUDIT RFP




32. NOTICE: Any notice, advice, or report to be given pur...
IOWA PUBLIC EMPLOYEES’ RETIREMENT SYSTEM
ACTUARIAL AUDIT RFP




IN WITNESS, WHEREOF the parties have agreed to all provis...
IOWA PUBLIC EMPLOYEES’ RETIREMENT SYSTEM
ACTUARIAL AUDIT RFP




                                         SECTION V

     ...
Upcoming SlideShare
Loading in …5
×

INVESTMENT MANAGER QUESTIONNAIRE

683 views
547 views

Published on

Published in: Economy & Finance, Business
0 Comments
0 Likes
Statistics
Notes
  • Be the first to comment

  • Be the first to like this

No Downloads
Views
Total views
683
On SlideShare
0
From Embeds
0
Number of Embeds
1
Actions
Shares
0
Downloads
9
Comments
0
Likes
0
Embeds 0
No embeds

No notes for slide

INVESTMENT MANAGER QUESTIONNAIRE

  1. 1. REQUEST FOR PROPOSAL ACTUARIAL AUDIT SERVICES RFP JAN06-2 January 13, 2006 Iowa Public Employees’ Retirement System 7401 Register Drive P.O. Box 9117 Des Moines, IA 50306-9117 Phone: 515-281-0070 Toll-Free: 1-800-622-3849 Fax: 515-281-0045
  2. 2. IOWA PUBLIC EMPLOYEES’ RETIREMENT SYSTEM ACTUARIAL AUDIT RFP Table of Contents I. Purpose, Minimum Qualifications, and Scope of Services……………………………….3 II. Administrative and Proposal Submission Information …………………..………………7 III. Questionnaire…………………………………………………………………………….13 IV. Proposed Contract…………………………………………………………...………….. 21 V. Required Appendices……….……………………………………………………………32 Page 2
  3. 3. IOWA PUBLIC EMPLOYEES’ RETIREMENT SYSTEM ACTUARIAL AUDIT RFP SECTION I PURPOSE, MINIMUM QUALIFICATIONS, AND SCOPE OF SERVICES A. PURPOSE 1. This Request for Proposal (“RFP”) is issued by the Iowa Public Employees’ Retirement System (“IPERS” or “System”) for the purpose of hiring an actuarial firm (“Auditor”) to perform an independent actuarial audit and evaluation of actuarial services provided to IPERS by its current actuarial consultant, Milliman, Inc. The purpose is to provide an evaluation sufficient to allow the Auditor to express an actuarial opinion regarding the reasonableness and/or accuracy of valuation results, actuarial assumptions, application of the actuarial cost method, and the experience study to be completed by June 30, 2006. The audit shall be conducted in accordance with generally recognized and accepted actuarial principles and practices which are consistent with Actuarial Standards of Practice, the Code of Professional Conduct, Qualifications Standards for Public Statements of Actuarial Opinion of the American Academy of Actuaries, and GASB Statement 25. The Auditor will also provide all required services in accordance with federal and state statutes and the Contract between the System and the Auditor (“Contract”). Negotiation, execution, and amendment of the Contract, and operational oversight of services provided under the Contract, are responsibilities of IPERS’ Chief Executive Officer. 2. IPERS is a multi-employer, contributory defined benefit public employee pension plan. The System covers approximately 306,000 active, inactive, and retired members and annuitants. The System consists of three membership groups: regular membership and two protection occupation groups. The System was created under Iowa Code Chapter 97B. Complete background information, including the System’s Fiscal Year (FY) 2005 Actuarial Valuation Report, FY2005 Comprehensive Annual Financial Report, and Fiscal Years 1998–2001 Experience Study may be obtained from the System’s Web site www.ipers.org/publications.htm. 3. This RFP is posted on IPERS’ Web site at www.ipers.org/rfp. Proposals will be accepted from any firm that meets the Minimum Qualifications as stated below and is willing and able to provide the services outlined in this RFP. B. MINIMUM QUALIFICATIONS To be considered as the Auditor for the purpose stated above, the firm must meet all of the following Minimum Qualifications. Failure to do so shall result in rejection of the proposal. As used in this RFP, the term “Primary Auditor” shall refer to the lead and most senior actuary to be assigned to and provide direct services to IPERS. The term “Supporting Auditors” shall refer to less senior actuaries that will support the Primary Page 3
  4. 4. IOWA PUBLIC EMPLOYEES’ RETIREMENT SYSTEM ACTUARIAL AUDIT RFP Auditor in providing direct services to IPERS. As used in this RFP, the term “Auditing Actuaries” shall mean the Primary Auditor and all Supporting Auditors to be assigned to and provide direct services to IPERS. 1. The firm must be a professional actuarial services firm that provides actuarial valuation, experience investigations, actuarial audits, and pension consulting services. 2. The firm must have been in existence as a business entity performing such services for a minimum of three years. 3. The firm must have all necessary permits and licenses. Liability insurance must be in full force at the time the proposal is submitted and throughout the term of the Contract. 4. Within the past three years, the firm must have had a minimum of three public pension clients, each client with at least 100,000 members and annuitants, who engaged the firm for such services as valuation assignments, experience analysis and/or actuarial audit assignments. 5. The Primary Auditor performing the work must be a Fellow of the Society of Actuaries and an enrolled actuary. Any Supporting Auditor must be either a Fellow, enrolled, or have ten years of pension consulting experience. 6. The Primary Auditor performing the services under the Contract must have a minimum of ten years of experience as an actuary providing pension consulting services, experience analysis, valuation assignments, and actuarial audit assignments for multi-employer public retirement systems with memberships of at least 100,000 members and annuitants. 7. Any Supporting Auditor performing services under the Contract must have five years of experience as an actuary providing pension consulting services, experience analysis, valuation assignments, and actuarial audit assignments for multi-employer public retirement systems with memberships of at least 100,000 members and annuitants. 8. The firm must provide its own work facilities, equipment, supplies, and support staff to perform the required services. C. SCOPE OF SERVICES All services described in this section shall apply to the regular IPERS membership and to the two protection occupation groups. The audit will review the FY2005 annual valuation and the FY2001–2005 experience study to assure that the results presented therein are actuarially sound, reasonable, and consistent with industry standards. Page 4
  5. 5. IOWA PUBLIC EMPLOYEES’ RETIREMENT SYSTEM ACTUARIAL AUDIT RFP 1. The audit should cover the following: a. Analyze the appropriateness of the actuarial assumptions. b. Review the actuarial assumptions and methodology for compliance with State statutes, IPERS’ policies; and for compliance with generally recognized and accepted actuarial principles and practices which are consistent with Actuarial Standards of Practice, the Code of Professional Conduct, Qualifications Standards for Public Statements of Actuarial Opinion of the American Academy of Actuaries, and GASB Statement 25. c. Evaluate the data used for performance of the valuations including IPERS’ applicable internal control procedures concerning the production of data used in the actuarial calculations, the degree to which data is sufficient to support the conclusions of the investigation, and the use and appropriateness of any assumptions made regarding the data. d. Conduct a test of the valuation results of the FY2005 valuation using a mathematical model of plan activity or sampling based on the same data, methods, and assumptions used by Milliman. e. Evaluate the test results and reconcile any significant discrepancies between the findings, assumptions, methodology, rates, and adjustments of the auditing firm and Milliman. f. Assess whether the valuation appropriately reflects information required to be disclosed under required reporting standards (GASB, etc.). g. Assess the accuracy of the simulation model provided to IPERS by its actuary. 2. The audit should culminate in a report that: a. Provides an evaluation and expresses an opinion regarding the reasonableness and accuracy of the valuation results (including a determination of actuarial accrued liability, normal cost, and actuarial required contributions), experience study findings, actuarial assumptions, and appropriateness and application of the actuarial cost method. b. Includes any recommendations regarding reasonable alternatives to the actuarial assumptions used in the FY2005 valuation or recommended as a result of the FY2001–2005 experience study. c. Provides any recommendations to improve the quality and understanding of the valuation report. d. Is provided first in draft form so that this information may be reviewed and commented upon, by IPERS and Milliman, prior to the issuance of the final report. e. Is provided in final form to the Investment Board at its September 2006 meeting. The auditor should provide 60 hard copies and one electronic copy of the final report. f. Is summarized in a letter or comment format to be included in IPERS’ FY2006 Comprehensive Annual Financial Report. D. TIMETABLE Page 5
  6. 6. IOWA PUBLIC EMPLOYEES’ RETIREMENT SYSTEM ACTUARIAL AUDIT RFP 1. January 13, 2006—RFP ISSUED 2. January 27, 2006—INQUIRES—Inquires and requests for interpretation or clarification of the RFP from potential bidders will be accepted only in writing, as mailed, e-mailed or faxed, and only if received no later than 4 p.m. CT, January 27, 2005. Mail, e-mail, or fax requests to: Iowa Public Employees’ Retirement System Attn: Donna M. Mueller 7401 Register Drive Des Moines, IA 50321-2953 E-mail: ceo@ipers.org Fax: 515-281-0045 3. February 3, 2006—RESPONSES TO INQUIRIES—Responses to and addenda resulting from requests for interpretation shall be posted on the IPERS Web site by 4 p.m. CT, February 3, 2006. 4. February 15, 2006—PROPOSALS DUE—Proposals must be received by 4 p.m. CT, February 15, 2006. 5. March 13–24, 2006—FINALIST INTERVIEWS—Members of the Evaluation Committee will interview finalist firms at IPERS’ office during the period of March 13 – 24, 2006. IPERS may choose to hold additional interviews at the firms’ offices. 6. March 31, 2006 (Tentative)—ANNOUNCEMENT OF SELECTION—The System will notify all firms that submitted a proposal of its Auditor selection, which shall be subject to successful Contract negotiation with the selected firm. 7. September 8, 2006—Final audit report due to IPERS. 8. September 21, 2006—PRESENTATION of final audit report to the IPERS Investment Board. Page 6
  7. 7. IOWA PUBLIC EMPLOYEES’ RETIREMENT SYSTEM ACTUARIAL AUDIT RFP SECTION II ADMINISTRATIVE AND PROPOSAL SUBMISSION INFORMATION A. INSTRUCTIONS FOR SUBMITTING PROPOSALS 1. Firms responding to this RFP must provide answers to the questions posed in Section III of this RFP. All proposals must be complete in every respect and must answer concisely and clearly all questions proposed by the RFP. Late proposals will not be accepted, and will be returned unopened to the provider. 2. Proposals shall be submitted with a letter providing factual and verifiable support that the firm meets all of the Minimum Qualifications listed in Section I.B of this RFP, and that the firm is able and willing to provide the type and level of services required to fulfill the mandate proposed in this RFP. The firm must include in the letter a restatement of each of the Minimum Qualifications as shown in Section I.B of this RFP, followed by factual and verifiable information supporting the firm’s satisfaction of each requirement. The letter should also affirm that the proposal shall remain in effect for a period of 180 days from the proposal due date, and should include either an affirmative compliance statement or a disclosure statement relative to IPERS’ Ethics Policy (see Section II.F below). Attach said letter as Appendix A to the proposal. 3. The letter and the offer made by the proposal, and any clarifications to that proposal, shall be signed by an officer of the offering firm or a designated agent empowered to bind the firm in a Contract. The cover letter must also identify any sections of the proposal that the firm is identifying as confidential. (See Disclosure of Proposal Content below.) 4. Proposals should follow the order of questions as they are asked in Section III of this RFP. In response to each question asked in Section III, restate the main question (denoted by a number or a letter) in bold font followed by your answers stated in regular font. Responses should be thorough and answer the specific question asked, including the issues addressed in any bullet points following a question. 5. In preparation of the proposal, please use Word format for text and Excel format for spreadsheets, single-spaced with 1-inch page margins. Font should be 12- point, preferably Times New Roman. 6. Supporting material must be clearly referenced to the appropriate question. Information and materials which are strictly promotional in nature should not be used. The submission of such material may serve to disqualify the firm from further consideration. 7. Verbal communication with IPERS Trustees, Benefits Advisory Committee Page 7
  8. 8. IOWA PUBLIC EMPLOYEES’ RETIREMENT SYSTEM ACTUARIAL AUDIT RFP members, and IPERS staff during the selection process is greatly discouraged. Firms will be given the opportunity to submit written requests for clarification of questions or terms contained in the RFP. In all cases, written communications will override verbal communications. 8. Proposals must be received no later than 4 p.m. CT, February 15, 2006. 9. A firm must submit ten hard copies, plus one copy on CD, of its proposal to IPERS at the following address: Iowa Public Employees' Retirement System Attn: Donna M. Mueller 7401 Register Drive Des Moines, IA 50321-2953 B. REJECTION OF PROPOSALS 1. IPERS reserves the right to reject any or all proposals in whole or in part received by this request, due to noncompliance with the requirements of this RFP or for any other reason. IPERS will not pay for any information herein requested, nor is it liable for any costs incurred by the submitting firms. 2. Firms whose proposals do not meet the minimum requirements will be so notified. After evaluation of the proposals and approval by the IPERS Investment Board of the firm recommended, all firms having submitted proposals will be notified of the successful firm. 3. IPERS reserves the right to not hire or to defer the hiring of a firm for these services. C. DISCLOSURE OF PROPOSAL CONTENT The laws of Iowa require that at the conclusion of the selection process the contents of all proposals be placed in the public domain and be open to inspection by interested parties. Trade secrets or proprietary information that are recognized as such and protected by law may be withheld, but only if designation of such sections is stated in proposing firms’ cover letters and confidential information is clearly identified as such on each of the applicable pages within the body of the proposal. A bidder is strictly prohibited from marking or otherwise declaring that an entire proposal is confidential. IPERS will return any proposals marked as entirely confidential to the bidder. A bidder will not have its bid reviewed under these circumstances. Page 8
  9. 9. IOWA PUBLIC EMPLOYEES’ RETIREMENT SYSTEM ACTUARIAL AUDIT RFP D. PROPOSAL OBLIGATIONS The contents of the proposal and any clarifications thereto submitted by the successful firm shall become part of the contractual obligation and will be incorporated by reference into the Contract. E. DISPOSITION OF PROPOSALS All proposals become the property of IPERS and shall not be returned to the vendor unless all proposals are rejected or the RFP is cancelled. Otherwise, at the conclusion of the selection process, the contents of all proposals will be in the public domain and be open to inspection by interested parties subject to exceptions provided in Iowa Code Chapter 22 or other applicable law. F. GRATUITIES 1. The laws of Iowa provide that it is a felony to offer or promise to give anything of value or benefit to a state board or committee member or state employee with the intent to influence that person’s duties. Evidence of violations of this statute will be turned over to the proper prosecuting attorney. 2. IPERS provides reimbursement for transportation, lodging, meals, and miscellaneous expenses for its Investment Board members, Benefits Advisory Committee members, and employees. 3. IPERS’ Investment Board members, Benefits Advisory Committee members, and employees are subject to stringent statutory restrictions relative to acceptance of gifts, meals, lodging, or transportation from any service contractor. 4. Bidders must agree to comply with the Iowa Public Employees’ Retirement System Ethics Policy. Pursuant to that policy, the successful bidder must not be involved in any relationships with IPERS’ Key Employees or with any other party providing services to IPERS that would constitute a conflict of interest, as defined in the policy, with respect to the products and/or services to be provided under this RFP. Each Bidder must provide a positive statement in its proposal’s Appendix A affirming either that it has no such conflicts of interest, or an IPERS disclosure statement disclosing potential conflicts and requesting approval in advance. The policy may be viewed by using the following link: www.ipers.org/pdfs/investments/policies/ipersethicspolicy.pdf G. IOWA STATUTES AND RULES The terms and conditions of this RFP and the resulting Contract shall be construed in accordance with the laws of Iowa. Whenever differences exist between federal and state statutes or regulations affecting this procurement, interpretation shall be in the direction Page 9
  10. 10. IOWA PUBLIC EMPLOYEES’ RETIREMENT SYSTEM ACTUARIAL AUDIT RFP of that which is most beneficial to the interests of the State of Iowa. H. SIGNATURE OF AUDITOR’S AGENT The offer made by the proposal, and any clarifications to that proposal, shall be signed by an officer of the offering firm or a designated agent empowered to bind the firm in a Contract. I. IPERS CONTRACT SIGNATORY Donna M. Mueller, IPERS Chief Executive Officer. J. CONTRACT AWARD IPERS reserves the right to award this Contract not necessarily to the firm with the lowest fee and cost proposal, but to the firm which will provide the best match to the requirements of the RFP. The successful firm will be determined in accordance with the evaluation criteria defined by IPERS. K. EVALUATION OF PROPOSALS An Evaluation Committee (“Committee”) has been established to evaluate and score proposals received, select finalist firms, conduct finalist interviews, and recommend one specific finalist firm to the full IPERS Investment Board. The Committee is composed of representative members of IPERS’ Investment Board and IPERS’ Benefits Advisory Committee, IPERS’ Chief Executive Officer, Chief Investment Officer, Chief Benefits Officer, General Counsel, and Chief Operations Officer. Finalist firms will be interviewed at IPERS’ office, and on-site due diligence visits to finalists’ offices may be conducted. Determination of which firms to interview and whether on-site diligence visits are necessary is at the sole discretion of the Committee. IPERS’ Investment Board will make the final Auditor selection. L. EVALUATION CRITERIA Proposals will be evaluated using the following criteria: 1. The Firm’s Organization, Experience, and Resources 25% 2. The Project Team’s Relevant Experience 30% 3. The Firm’s Methodology 25% 4. The Firm’s Fee Proposal 20% Page 10
  11. 11. IOWA PUBLIC EMPLOYEES’ RETIREMENT SYSTEM ACTUARIAL AUDIT RFP M. THE RESULTING CONTRACT The Contract shall be a combination of the specifications, terms, and conditions of the RFP, any written clarifications or changes made to this RFP, the offer contained in the successful proposal, and any additional contractual terms and conditions agreed to mutually and in writing by the parties. IPERS’ proposed Contract is included as Section IV of this RFP. N. TERM OF CONTRACT The Contract shall be for a one-time actuarial audit as described in Section I(C) and elsewhere in this RFP. The firm selected from the current search will not be eligible to bid on any IPERS full-service actuarial retainer that may be issued within the twelve- month period following publication of the actuarial audit report or issued as a result of the actuarial audit. O. PERFORMANCE-BASED FEES Iowa Code § 8.47 places a requirement on state agencies that service Contracts must contain a performance-based payment clause. The administrative rule, 11 Iowa Administrative Code 107.4, describes the acceptable types of performance-based payment clauses. It states: Acceptable kinds of payment clauses include the following. However, these descriptions are not intended to be an exhaustive or prescriptive list; they are provided as examples. a. A payment clause in which the department or establishment describes the limit of the total fee to be paid, and the fee is divided between a base fee and an at-risk fee. The base fee is the amount of fee the service provider will earn for minimal performance in the completion of the Contract. The at-risk portion of the fee is the incremental fee the service provider will earn as the service provider meets the performance criteria identified in the Contract. The amount of the fee in both instances may be stated in terms of a percentage, an amount, or some other term. Incentives and disincentives may be used to affect the payment of the base fee and the at-risk portion of the fee. The amount of the incentive or disincentive may be stated in terms of a percentage, an amount, or some other term. The payment of the fee shall be based upon the outcomes or outputs achieved or the performance criteria satisfied. b. A payment clause based on meeting minimum requirements for performance criteria, outcomes, or outputs with incentives and disincentives to achieve other desired outcomes, outputs or performance criteria. The incentives may be stated in terms of a percentage, a fixed amount, or some other term. Up to 100 percent of the incentive may be placed at risk in order to meet or exceed performance criteria or achieve desired outcomes or outputs. Disincentives may be employed Page 11
  12. 12. IOWA PUBLIC EMPLOYEES’ RETIREMENT SYSTEM ACTUARIAL AUDIT RFP to achieve performance criteria or outcomes. Disincentives may be stated in terms of a percentage, a fixed amount, or some other term. Disincentives may include payments to the department or establishment for performance failures up to 100 percent of the fee the service provider expects to earn from performance of the Contract. An acceptable performance-based payment clause that all bidders must include in their responses to the RFP can place the entire payment for all deliverables in the Contract at risk, or selected deliverables at risk. For the purpose of illustration only, an example might be: Contractor will provide the deliverable(s) specified in Section X, paragraph XX, by July 1, 200X. In the event that the deliverable(s) in Section X, paragraph XX, are not delivered by July 1, 200X, Contractor will forfeit [certain percentage of the invoice] [$X amount] [will subtract $XXXX/day until delivery is made to IPERS]. Each bidder must propose performance-based fees in its response to the RFP. IPERS encourages bidders to be creative. The Evaluation Committee will evaluate the performance-based fee proposals for each bidder. The performance-based fee proposals will be subject to final negotiations with the bidder selected pursuant to this RFP. Page 12
  13. 13. IOWA PUBLIC EMPLOYEES’ RETIREMENT SYSTEM ACTUARIAL AUDIT RFP SECTION III QUESTIONNAIRE The proposal must answer the following questions: A. ORGANIZATION AND OWNERSHIP 1. Provide the following information: Date of Response: Name of Firm: Primary Contact Person: Title: Address: Telephone Number: Facsimile Number: E-mail Address: 2. Describe the background and ownership of the firm. Describe any material changes in organization structure or ownership that have occurred in the past five years. • Year firm was formed and began providing actuarial consulting services to institutional clients. • The ownership structure. Indicate all entities that have an ownership stake in the firm (name and percentage). • Affiliated companies or joint ventures. • Recent or planned changes to the ownership or organization structure. • Transition plans for retirement of key executives. • Importance of actuarial consulting services to your parent company’s (if applicable) or your firm’s overall business strategy. • Percentage of parent company’s (if applicable) or your firm’s revenues from actuarial consulting services. 3. Provide as Appendix B one organization chart that diagrams the ownership of your firm and any interrelationships between the parent-subsidiary, affiliate, and joint venture entities. 4. Provide as Appendix C another organization chart that depicts the structure of the actuarial consulting group and that identifies this group’s key people and the people that will be involved in providing direct services to IPERS. 5. List the locations of each of the firm’s offices from which actuarial consulting Page 13
  14. 14. IOWA PUBLIC EMPLOYEES’ RETIREMENT SYSTEM ACTUARIAL AUDIT RFP services are provided. For each office, provide the function(s) performed and the number of professionals in that office. Indicate which office would be primarily responsible for servicing the IPERS account. 6. Provide as Appendix D the latest two years’ audited financial reports for your firm. Provide any additional information necessary to demonstrate financial stability, including total revenue, net income/(loss), assets, liabilities, and net worth for each year. 7. Describe the firm’s objectives with respect to future growth. What products/services will be emphasized or de-emphasized in the future? What are the firm’s expectations for its products, and how does it plan to manage the future growth of these products? Discuss how the firm plans to make sure that future growth does not compromise the quality of your existing actuarial consulting services. Include in your answer how you plan to manage growth in your client/actuarial consultant ratio. 8. Discuss in general the firm’s competitive advantage over other firms in the actuarial consulting industry and in the actuarial audit service area. Why should IPERS hire your firm? 9. Over the past five years, has your organization or any officer or principal been involved in any business litigation or other legal proceedings related to any actuarial consulting activities or actuarial auditing services? If so, provide a brief explanation and indicate the current status. 10. Has your firm, within the last ten years, been censured or fined by any regulatory body? If so, please indicate the dates and describe the situation. 11. Is the firm affiliated with any other firm(s) offering nonactuarial services that could represent conflicts of interest? If yes, briefly describe your firm’s policies and procedures for doing business with these affiliates while safeguarding against conflicts of interest. 12. Do you, your parent company, or any affiliated company have any business relationships with Milliman, Inc. (IPERS’ general services actuary), Wilshire Associates (IPERS’ general investment consultant), or Ice Miller (IPERS’ external plan counsel)? If so, describe that relationship. 13. List and describe any professional relationship your firm or any of your actuarial consulting group staff have with any member of the IPERS Investment Board, IPERS Benefits Advisory Committee, IPERS staff, or the IPERS plan sponsor (members of the Iowa General Assembly and the Governor of the State of Iowa). 14. Has anyone in your firm provided any gifts, travel expenses, entertainment, or meals to any member of the IPERS Investment Board, IPERS Benefits Advisory Page 14
  15. 15. IOWA PUBLIC EMPLOYEES’ RETIREMENT SYSTEM ACTUARIAL AUDIT RFP Committee, or IPERS staff in the last twelve months? If yes, describe the expense and the purpose. B. ACTUARIAL SERVICES STAFFING 1. How many actuaries does your firm employ? 2. Describe in general the background of the professionals in the firm’s actuarial consulting services group: • Are they brought in from outside of the firm or promoted to their positions from within the organization? • For those recruited from the outside, what prior experience and educational credentials are generally sought? • What percentage are currently Fellows of the Society of Actuaries? Enrolled actuaries? • What ongoing educational programs are economically supported and/or required? If economic support is offered, state the extent of this. 3. For the key executives and professionals in the actuarial consulting group, including the Primary Auditor and all Secondary Auditors that would be assigned to IPERS, provide a table that identifies the following information: • Name • Title • Responsibilities within the firm. If a person has multiple responsibilities, indicate the percentage of time spent on each function in a footnote to the table • Years of relevant experience • Years with the firm • Degrees and professional designations • Institution awarding each degree and designation • Publications authored 4. How long has the current group of key executives and professionals in your actuarial consulting group been together? 5. For the Primary Auditor and all Secondary Auditors that will directly provide services to IPERS, provide biographies and label these as Appendix E. 6. For the Primary Auditor and all Secondary Auditors, state the length of time these individuals have all worked together as a team. Page 15
  16. 16. IOWA PUBLIC EMPLOYEES’ RETIREMENT SYSTEM ACTUARIAL AUDIT RFP 7. For the Primary Auditor and all Secondary Auditors, list their actuarial audit assignments for the past five years. Include for each assignment the date of the final audit report, whether the auditor served as the primary or secondary auditor, and the client’s name and size (number of pension plan members and annuitants). 8. For the Primary Auditor and all Secondary Auditors that will directly provide services to IPERS, state the role each would play in providing the required IPERS services. 9. State for the Primary Auditor and each Secondary Auditor the total number of clients currently assigned to these individuals; describe whether the assignment is for general actuarial services or actuarial audit services. 10. For the Primary Auditor and all Secondary Auditors, state whether any of these individuals are affiliated with any other business entity or activity that could pose a potential conflict of interest with their IPERS assignments. If so, provide details on the entity or activity. 11. For the Primary Auditor assigned to the IPERS account, state their experience making presentations to/testifying before state legislatures or committees thereof on behalf of clients. Include the year of the presentations. 12. Describe your compensation and incentive program for actuaries in your firm. How are actuaries evaluated and rewarded? What incentives are provided to attract and retain superior individuals? Identify the percentage of compensation which is: • Base salary • Performance bonus • Equity incentives • Other • Do you offer direct ownership, phantom stock, profit sharing, and/or performance bonus? • Who is eligible to participate? • On what basis are these incentives determined—is compensation tied to success factors such as client base growth, performance, or other factors? Please list and indicate the weight of each in determining total compensation. • How does your compensation structure/levels compare with other firms in the industry? 13. Discuss the causes and impact of any executive and professional staff turnover (departures or hiring/promotions) in the actuarial consulting group that has occurred in the last five years. Provide a table listing all of the professionals that have departed from that group over the past five years. For each individual, provide the following information: Page 16
  17. 17. IOWA PUBLIC EMPLOYEES’ RETIREMENT SYSTEM ACTUARIAL AUDIT RFP • Date of departure • Name • Title • Responsibilities • Years with the firm • Reason for leaving the firm • Name of replacement 14. Does the firm have a transition plan to deal with the possible sudden departure of key professionals within the group? Describe the plan. C. METHODOLOGY 1. Describe the specific methodology to be used for the required scope of work identified in Section I.C of this RFP. 2. Provide a timeline for completion of the work identified in Section I.C of this RFP. Include proposed dates for each key stage or event of the project, indicate dates by which your firm must have specific input data from IPERS or its retained actuary, and indicate points in the project when your firm would plan to meet with IPERS staff at our office. 3. Describe your firm’s theory and methodology used in recommending an appropriate actuarial cost method for a public pension fund. 4. Describe your firm’s theory and methodology for development of actuarial assumptions (except for the interest rate assumption, which is addressed separately). 5. Describe the methodology you use to formulate a pension fund’s actuarial interest rate assumption. How may this methodology differ from client to client? Under what circumstances would you recommend IPERS change its interest rate assumption? 6. Describe your firm’s approach to recommendations regarding the amortization of unfunded liabilities. 7. Describe your approach to measuring funded status and funding progress in order to facilitate the assessment of trends over several valuations of a client. 8. Describe the capabilities of your valuation system(s) and your computer system support. 9. Describe your quality control processes for actuarial audit reports and Page 17
  18. 18. IOWA PUBLIC EMPLOYEES’ RETIREMENT SYSTEM ACTUARIAL AUDIT RFP recommendations. How are these services monitored and reviewed? 10. Provide as Appendix F one recent actuarial audit report as provided to an existing client. D. RELEVANT EXPERIENCE 1. Complete the following table, reporting only those client relationships where actuarial auditing services similar to this mandate have been or are being provided. As of: 12/31/01 12/31/02 12/31/03 12/31/04 12/31/05 Total number of actuarial audit clients Total number of public pension plan actuarial audit clients 2. For all current public pension plan clients, state the client’s name, the first year of your initial Contract with the plan, and their asset and membership size as of June 30, 2005. Designate by asterisk which of these clients are multi-employer plans. 3. Provide the name, title, address, and telephone number for the following six client references for whom your firm has provided either full service actuarial consulting or actuarial audit services similar to this mandate, as specified in each question: • The client for whom your firm most recently completed an actuarial audit. • The client that most recently terminated your firm’s full-service actuarial consulting Contract. • The client with the longest full-service actuarial consulting relationship with your firm. • A multi-employer public pension plan client for whom your firm has provided full-service actuarial consulting for at least three years. • A full-service actuarial consulting client that has been assigned for at least two years to the Primary Auditor proposed for the IPERS account. • The client for whom the Primary Auditor most recently completed an actuarial audit. 4. List all pension plan clients that have terminated their actuarial service contracts with your firm in the last five years. Include the client firm’s name, size (number of pension plan members and annuitants), date of contract termination, and reason(s) for contract termination. Page 18
  19. 19. IOWA PUBLIC EMPLOYEES’ RETIREMENT SYSTEM ACTUARIAL AUDIT RFP 5. Within the last five years, has your firm been notified by any actuarial consulting services client that your firm is in default of its contract, or that conditions exist endangering continuation of that contract? If so, state the client firm’s name, year the notice was received, reasons for the notice, and resolution or current status of the relationship. 6. Provide the names of all public pension plan clients for whom you have performed actuarial audits within the last five years. 7. Have your firm’s actuarial consulting service products been audited by another actuarial firm within the last five years? If so, state the number of such audits and whether any resulted in revisions to your clients’ annual valuation results, actuarial assumptions, or actuarial cost methods. E. RESOURCES 1. Would your firm propose to use any subcontracts in the provision of the required IPERS services? If so, describe the specific services that would be subcontracted, the name of the subcontractor, the cost to your firm of these services, and how you would control the quality of services provided. 2. Does your firm use internal or external legal expertise, or both? If external is used, state its source and nature. 3. What investments has the firm made in information technology? 4. Do you have plans/arrangements in place for alternative work sites should either your headquarters facility or the facility that will primarily provide services to IPERS become inoperative because of fire, earthquake, etc.? Briefly describe your emergency and disaster recovery plans. Include in your description your disaster recovery plans related to client data files. 5. Please describe the levels of coverage for errors and omissions insurance and any fiduciary or professional liability insurance your firm carries. Is the coverage on a per-client basis, or is the dollar figure applied to the firm as a whole? List the insurance carriers. 6. How does the firm monitor and measure actuarial client satisfaction and actuarial audit satisfaction? 7. Describe the resources your firm has that specifically address the needs of public fund clients. Page 19
  20. 20. IOWA PUBLIC EMPLOYEES’ RETIREMENT SYSTEM ACTUARIAL AUDIT RFP F. FEES 1. Describe how fees are determined for your firm’s actuarial auditing services. 2. How are fees billed (billing periods and prospective versus arrears)? 3. The proposed fee should include administrative, third-party, travel, and all other costs. 4. State the performance-based fee structure you propose for provision of the services described in Section I.C. State the fee tiers in dollars and include the specific performance benchmarks proposed for each fee tier. Page 20
  21. 21. IOWA PUBLIC EMPLOYEES’ RETIREMENT SYSTEM ACTUARIAL AUDIT RFP SECTION IV PROPOSED CONTRACT ACTUARIAL AUDIT SERVICES CONTRACT WHEREAS, the parties hereto desire to enter into this Contract for the purpose of providing actuarial services to the Iowa Public Employees’ Retirement System (IPERS) whose business location is 7401 Register Drive, Des Moines, Iowa 50321. NOW, THEREFORE, for the mutual covenants and agreements herein contained, the parties agree as follows: 1. DEFINITIONS. a. “Auditor” means the legal entity known as __________________, and its employees and agents. b. “Contract” means the negotiated contract, the terms and conditions of the RFP, the Auditor’s proposal made in response to the RFP, and any written clarifications or changes made in accordance with the provisions herein. c. “IPERS” means the Iowa Public Employees’ Retirement System as it is defined in Iowa Code chapter 97B, and other relevant sections of the Iowa Code. d. “Primary Auditor” means the lead and most senior auditor to be assigned to and provide direct services to IPERS. e. “Secondary Auditor” means the less senior auditor that will support the Primary Auditor in providing direct services to IPERS. 2. PARTIES TO THE CONTRACT. This Contract shall be between _________________, hereinafter referred to as Auditor, and the Iowa Public Employees’ Retirement System, hereinafter referred to as IPERS, for actuarial audit services as specified by this Contract. 3. TERM OF CONTRACT. This Contract shall begin on ____________, 2006. The duration of the Contract shall be through _______, 2006. 4. DELIVERABLES. [See SECTION I.C of the RFP.] 5. RETAINER FEES. This is a firm fixed price Contract. In exchange for the deliverables in Paragraph 4, Auditor will received $ _________________. [Performance-based fees will be included in this paragraph.] 6. TERMINATION OF CONTRACT. 6.1 Termination for cause: IPERS may terminate the Contract at any time after fifteen calendar days’ written notice if the Auditor fails to carry out its provisions. IPERS shall provide the Auditor with fifteen calendar days’ written notice of conditions endangering performance. If after such notice the Page 21
  22. 22. IOWA PUBLIC EMPLOYEES’ RETIREMENT SYSTEM ACTUARIAL AUDIT RFP Auditor fails to remedy the conditions contained in the notice, IPERS may do one or more of the following: • Exercise any remedy provided by law. • Terminate the Auditor's services. • Seek monetary damages from the Auditor. 6.2 The Auditor shall not be considered to be in default under this Contract, nor shall monetary damages be assessed, if performance is delayed or made impossible by an act of God, or such other event that is beyond the reasonable control of the Auditor. In each such case, the delay or impossibility must be beyond the reasonable control and without the fault or negligence of the Auditor. 6.3 Should IPERS obtain a money judgment against the Auditor as a result of a breach of this Contract, the Auditor consents to such judgment being offset against monies owed the Auditor by IPERS under this or any other agreement with IPERS or the State of Iowa. 6.4 Amounts due to IPERS as monetary damages may be deducted by IPERS from any money payable to the Auditor pursuant to this or any other agreement. IPERS shall notify the Auditor in writing of any claims for damages on or before the date IPERS deducts such sums from money payable to the Auditor. 6.5 Should either party be in default of its obligations, the party not in default shall issue a written notice of default providing for an agreed time frame in which defaulting party shall have an opportunity to cure, provided that the cure is possible and feasible. If after opportunity to cure, the default remains, the party not in default may exercise any remedy provided by Iowa law. 6.6 Notwithstanding any other provisions of Contract, if funds anticipated for continued fulfillment of said Contract are at any time not forthcoming or sufficient, either through the failure of IPERS to receive appropriated funds, discontinuance, or material alteration of the program for which funds were provided, then IPERS shall give written notice as soon as practical documenting the lack of funding, discontinuance, or program alteration. Unless otherwise agreed to by the parties, the Contract shall become null and void on the last day for which appropriations were available. 6.7 Remedies of the Auditor in event of termination by IPERS. In the event of termination of this Contract for any reason, IPERS shall pay only those amounts, if any, due and owing to the Auditor for services actually rendered up to and including the date of termination of the Contract and for which IPERS is obligated to pay pursuant to this Contract. Payment will be made only upon submission of invoices and proper proof of the Auditor’s claim. This Page 22
  23. 23. IOWA PUBLIC EMPLOYEES’ RETIREMENT SYSTEM ACTUARIAL AUDIT RFP provision in no way limits the remedies available to IPERS under this Contract in the event of termination. However, IPERS shall not be liable for any of the following costs: 6.7.1 The payment of unemployment compensation to the Contractor’s employees; 6.7.2 The payment of workers’ compensation claims which occur during the Contract or extend beyond the date on which the Contract terminates; 6.7.3 Any costs incurred by the Auditor in its performance of the Contract, including, but not limited to, startup costs, overhead, or other costs associated with the performance of the Contract; 6.7.4 Any taxes that may be owed by the Contractor in connection with the performance of this Contract, including, but not limited to, sales taxes, excise taxes, use taxes, income taxes, or property taxes. 6.8 Termination at will. IPERS may terminate the Contract without penalty on any day by giving written notice to the Auditor at least 30 calendar days prior to the termination. The Auditor may terminate the Contract without penalty on any given day by giving written notice to IPERS at least 180 days prior to the termination. 7. EQUAL EMPLOYMENT OPPORTUNITIES. The Auditor is prohibited from engaging in discriminatory employment practices forbidden by federal and state law, or executive orders pertaining to Equal Employment Opportunity. 8. AUDIT AND EXAMINATION OF RECORDS. The Auditor agrees that the Auditor of the State of Iowa, or any authorized representative of IPERS, and where federal funds are involved, the Comptroller General of the United States or any other representative of the United States Government, shall have access to, and the right to examine, audit, excerpt, and transcribe any directly pertinent books, documents, papers, and records of the Auditor relative to services performed, orders, invoices, or payments of this Contract. 8.1 All records relating to this Contract shall be retained by the Auditor for five years following the date of final payment or completion of any required audit, whichever is earlier. 8.2 Compliance with this clause does not relieve the Auditor from retaining any records required by other laws or regulations of federal, state, or local governmental units. The Auditor will not be eligible for additional payments from IPERS, for expenses incurred, to comply with the foregoing audit requirements. Page 23
  24. 24. IOWA PUBLIC EMPLOYEES’ RETIREMENT SYSTEM ACTUARIAL AUDIT RFP 9. CONTRACT CHANGES. Changes in contractual provisions or services to be furnished under the Contract may be made only in writing and must be approved mutually by the Auditor and IPERS. 10. INDEMNIFICATION AND LIABILITY RESTRICTIONS. 10.1 The Auditor will indemnify IPERS against liability for any suits, actions, or claims arising from or relating to the performance of the Auditor under this Contract. 10.2 IPERS has no obligation to provide legal counsel or defense to the Auditor if a suit, claim, or action is brought against the Auditor or its subcontractors as a result of the Auditor's performance of its obligations under the Contract. In addition, IPERS has no obligation for the payment of any judgments or the settlement of any claims against the Auditor as a result of the Auditor's performance of its obligations under the Contract. The Auditor shall immediately notify IPERS of any claim made or suit filed against the Auditor resulting from the Auditor's obligations under the Contract. The Auditor will cooperate, assist, and consult with IPERS in the defense or investigation of any claim made or suit filed against IPERS resulting from the Auditor's performance under the Contract. 10.3 The Auditor agrees to indemnify and hold IPERS, its Chief Executive Officer, Managers, Board, Benefits Advisory Committee, elected and appointed officials, and employees harmless from any and all liabilities, damages, settlements, judgments, costs, and expenses, including reasonable attorney fees of IPERS staff or of the Iowa Attorney General's Office, and the costs and expenses and attorney fees of other counsel IPERS may retain, related to or arising from: 10.3.1 Property damage, personal injury, death, loss costs, expense or other harm arising out of, resulting from, relating to or connected with any act or omission by the Auditor, its divisions, subsidiaries, partners, principals, employees, agents, elected or appointed officials, officers, and directors in fulfilling this Contract; or 10.3.2 Claims for infringement of patents, trademarks, trade dress, trade secrets, or copyrights arising from this Contract; or 10.3.3 Any breach or any claimed breach of this Contract by the Auditor or by any of its partners, principals, officers, directors, employees, and agents. 10.4 IPERS shall not be responsible for action taken by the Auditor, its partners, principals, shareholders, employees, officers, elected or appointed officials, or its agents in knowing violation of any federal, state, or local law, or that Page 24
  25. 25. IOWA PUBLIC EMPLOYEES’ RETIREMENT SYSTEM ACTUARIAL AUDIT RFP of a foreign country. 10.5 In the event that either party deems it necessary to take legal action to enforce any provisions of the Contract, and in the event that IPERS prevails, the Auditor agrees to pay costs and fees at all stages of litigation as set by the court or hearing officer. Legal action shall include administrative proceedings. 11. TAXES. IPERS is exempt from federal excise taxes, and no payment will be made for any taxes levied on the Auditor’s wage payments. IPERS is exempt from state and local sales and use taxes on the services supplied pursuant to this Contract. In the event that the Auditor is in arrears in payment of any State taxes that are due to the State of Iowa, the State may offset any taxes in arrears from payments to the Auditor under the Contract. 12. SECURITY, CONFIDENTIALITY, AND OWNERSHIP OF DATA. 12.1 Access to Confidential Data. The Auditor’s employees, agents, and subcontractors may have access to confidential data maintained by IPERS to the extent necessary to carry out its responsibilities under the Contract. The Auditor shall presume that all information received pursuant to this Contract is confidential unless otherwise designated by IPERS. The Auditor shall provide to IPERS a written description of its policies and procedures to safeguard confidential information. Policies of confidentiality shall address, as appropriate, information conveyed in verbal, written, and electronic formats. The Consulting Auditor shall remain the responsible authority in charge of all data collected, used, or disseminated by the Auditor in connection with the performance of the Contract. The Auditor shall provide adequate supervision and training to its agents, employees, and subcontractors to ensure compliance with the terms of this Contract. The private or confidential data shall remain the property of IPERS at all times. 12.2 No Dissemination of Confidential Data. No confidential data collected, maintained, or used in the course of performance of the Contract shall be disseminated except as authorized by law and with the written consent of IPERS, either during the period of the Contract or thereafter. Any data supplied to or created by the Auditor shall be considered the property of the Agency. The Auditor must return any and all data collected, maintained, created, or used in the course of the performance of the Contract in whatever form it is maintained promptly at the request of IPERS. 12.3 Subpoena. In the event that a subpoena or other legal process is served upon the Auditor for records containing confidential information, the Auditor shall promptly notify IPERS and cooperate with IPERS in any lawful effort to protect the confidential information. Page 25
  26. 26. IOWA PUBLIC EMPLOYEES’ RETIREMENT SYSTEM ACTUARIAL AUDIT RFP 12.4 Reporting of Unauthorized Disclosure. The Auditor shall immediately report to IPERS any unauthorized disclosure of confidential information. 12.5 Survives Termination. The Auditor’s obligation under this Contract shall survive termination of this Contract. 13. RIGHTS IN PRODUCTS. IPERS retains all rights to the services and deliverables, and other results of the Contract. These rights exclude any copyrighted materials by the Auditor that are utilized by IPERS. The Auditor may not reproduce or otherwise use the products of this Contract without the written consent of IPERS. 14. WARRANTY AGAINST CONTINGENT FEES. The Auditor warrants that no person or selling agency has been employed or retained to solicit and secure this Contract upon an agreement or understanding of commission, percentage, brokerage, or contingency fee except bona fide employees maintained by the Auditor for the purpose of securing business. For breach or violation of this warranty, IPERS shall have the right to immediately terminate this Contract without liability other than for services already performed, or in IPERS’ discretion, to deduct from the Contract price or to otherwise recover the full amount of such commission, percentage, brokerage, or contingency. 15. CERTIFICATION OF INDEPENDENT PRICE DETERMINATION. By signing this Contract, the Auditor certifies that its prices in this Contract have been arrived at independently, without consultation, communication, or agreement, for the purpose of restricting competition, as to any matter relating to such prices with any competitor. No attempt was made by the Auditor to induce any other person or firm to submit or not submit a proposal for the purpose of restricting competition. 16. CONTRACT. This Contract between IPERS and the Auditor shall include the negotiated Contract, the terms and conditions of the RFP, the Auditor’s proposal made in response to the RFP, and any written clarifications or changes made in accordance with the provisions herein. In the event of conflict between the documents, the rights of IPERS and the Auditor shall be determined by first examining this agreement, then examining any written clarifications or changes that follow the effective date of this Contract, then the RFP, and finally the Auditor’s response to the RFP. 17. RELEASE OF INFORMATION ABOUT THIS CONTRACT. News releases or other material pertaining to this Contract shall not be made available to the public, the Auditor's clients, or potential clients without prior written approval of IPERS. 18. AUTHORITY OF IPERS. IPERS shall determine the quantity, quality, and acceptability of work under this Contract. IPERS shall decide all questions regarding performance and fulfillment of the Contract, including the obligations of the Auditor. 19. ASSIGNMENT. The Auditor shall not assign the Contract in whole or in part or any Page 26
  27. 27. IOWA PUBLIC EMPLOYEES’ RETIREMENT SYSTEM ACTUARIAL AUDIT RFP payment arising from the Contract without prior written consent of IPERS and subject to such conditions and provisions as IPERS may deem necessary. 20. PROHIBITION AGAINST GRATUITIES. Iowa law provides that it is a felony to offer, promise, or give anything of value or benefit to an elected official, public official, public employee, candidate, or that person’s immediate family member, with the intent to influence that person's acts, opinion, judgment, or exercise of discretion with respect to that person's duties. In addition to any criminal and civil penalties, IPERS may, by written notice to the Auditor, terminate this Contract, if the Auditor violates this section. 21. USE OF THIRD PARTIES AND SUBCONTRACTORS. IPERS acknowledges that the Auditor may contract with third parties for the performance of any of the Auditor’s obligations under this Contract. All subcontracts shall be subject to prior approval by IPERS. The Auditor may enter into these contracts to complete the project provided that the Auditor remains responsible for all services performed under this Contract. All restrictions, obligations, and responsibilities of the Auditor under this Contract shall also apply to the subcontractors. IPERS shall have the right to request the removal of a subcontractor from the Contract for good cause. 22. WORKERS’ COMPENSATION AND UNEMPLOYMENT INSURANCE. During the term of the Contract, the Auditor shall provide and maintain for all employees of the Auditor engaged in work under this Contract, workers' compensation and unemployment insurance as required by applicable law. 23. LIABILITY, MALPRACTICE, AND/OR ERRORS AND OMISSIONS INSURANCE. The Auditor shall maintain malpractice and/or an Errors and Omissions Insurance Policy in the amount of at least $3,000,000. Additionally, the Auditor shall maintain adequate business insurance to include an umbrella liability policy of at least $1,000,000 per occurrence or $5,000,000 total. Coverage under these policies must include protection from the fraudulent conduct and breach of fiduciary responsibility of the Auditor. Evidence of insurance shall be furnished at Contract signing and upon request. 24. JURISDICTION OF DISPUTES. This Contract shall be governed under Iowa law. Jurisdiction over disputes involving this Contract, not settled by mutual consent of the parties, shall be solely in the courts of the State of Iowa and shall be tried in Polk County, Iowa District Court, or the United States District Court for the Southern District of Iowa, if jurisdiction is appropriate in federal court. 25. AUDITOR PERSONNEL. IPERS may request replacement of any of the Auditor’s personnel believed unable to carry out the responsibilities of this Contract. IPERS shall approve replacement personnel. Such approval shall not be unreasonably withheld. Such approval shall in no way lessen the Auditor’s responsibility for the proper selection, assignment, management, and discipline of the Auditor’s employees. Page 27
  28. 28. IOWA PUBLIC EMPLOYEES’ RETIREMENT SYSTEM ACTUARIAL AUDIT RFP 26. AUDITOR’S TERMINATION AND TRANSITION DUTIES. If this Contract is terminated with or without cause, not renewed, or if the Auditor is not the successful bidder at the next RFP process, the Auditor, upon the receipt of notice from IPERS, shall: 26.1 Cease work under this Contract and take all necessary or appropriate steps to limit disbursements and minimize costs, and furnish a report within thirty (30) days of the date of notice of termination, describing the status of all work under the Contract, including, without limitation, results accomplished, conclusions resulting therefrom, or any other matters IPERS may require. 26.2 Immediately cease using and return to IPERS any personal property, records, data, or materials, whether tangible or intangible, provided by the provided by IPERS to the Auditor, unless otherwise directed by IPERS. 26.3 Comply with IPERS’ instructions for the timely transfer of any active files and work product(s) produced by the Auditor under this Contract. 26.4 Cooperate in good faith with IPERS, its employees, agents, and contractors during the transition period between the notification and the substitution of any replacement contractor. 26.5 Immediately return to IPERS any payments made by IPERS for services that were not rendered by the Auditor. 27. INDEPENDENT CONTRACTOR STATUS. It is expressly understood and agreed that the Auditor will act an as independent contractor in performance of this Contract. No provision hereunder shall be intended to create an employer/employee relationship with respect to the Auditor’s employees and IPERS nor shall this Contract be construed to create a partnership or joint venture with respect to the services and deliverables, or otherwise. 28. INTEGRATION. This Contract represents the entire agreement between the parties and neither party is relying on any representation that may have been made which is not included in this Contract. 29. HEADINGS OR CAPTIONS. The paragraph headings or captions are for identification purposes only and do not limit or construe the contents of the paragraphs. 30. SUPERSEDES FORMER AGREEMENTS. This Agreement supersedes all prior Agreements between the Auditor and IPERS for the services provided in connection with this Agreement. 31. AUDITOR CHANGES. The Auditor shall provide notification to IPERS concerning changes in the Auditor’s organizational relationships, ownership, professional staff, or services, which may have an impact on the Auditor’s performance under this Contract. Page 28
  29. 29. IOWA PUBLIC EMPLOYEES’ RETIREMENT SYSTEM ACTUARIAL AUDIT RFP 32. NOTICE: Any notice, advice, or report to be given pursuant to this Contract shall be delivered or mailed to: FOR IPERS: Donna M. Mueller, Chief Executive Officer Iowa Public Employees’ Retirement System 7401 Register Drive, P.O. Box 9117 Des Moines, Iowa 50306-9117 E-mail: ceo@ipers.org Phone: 515-281-0070 Fax: 515-281-0045 FOR AUDITOR: 33. SEVERABILITY. If any provision of this Agreement is deemed invalid or unenforceable, the remainder shall be valid and enforceable. 34. WAIVER OF INFORMALITIES. Failure of IPERS at any time to require strict performance of any provision of this Contract shall not constitute a waiver of that provision nor in any way limit the enforcement of the provision. 35. COUNTERPARTS. This Contract may be executed in any number of counterpart copies, each of which when fully executed shall be considered as an original. 36. INVOICES. The Auditor shall submit an invoice pursuant to the performance-based payment schedule as agreed to by the Auditor and IPERS. IPERS shall be permitted a reasonable period to verify that the invoiced services were rendered and pay the invoice. The Auditor shall not be entitled to any interest unless provided for under Iowa law. 37. ADHERENCE TO ETHICS POLICY. The Auditor acknowledges that it has been provided with a copy of the IPERS Ethics Policy, and agrees to comply with that policy as a material requirement under this Contract. The Auditor agrees that, except as otherwise disclosed and preapproved by IPERS, it shall not be involved in relationships with IPERS’ Key Employees or with any other party providing products and/or services to IPERS where the relationships would constitute a conflict of interest under the IPERS Ethics Policy. In addition, the Auditor agrees to certify upon IPERS’ reasonable request that the provisions of this paragraph continue to be true, and also to promptly notify IPERS and request a ruling using the IPERS disclosure statement at any time when the provisions of the paragraph may no longer be true because of a potential or actual conflict of interest. Page 29
  30. 30. IOWA PUBLIC EMPLOYEES’ RETIREMENT SYSTEM ACTUARIAL AUDIT RFP IN WITNESS, WHEREOF the parties have agreed to all provisions contained herein and has executed this Agreement on the date indicated. IOWA PUBLIC EMPLOYEES’ RETIREMENT SYSTEM By ___________________________________________ Donna M. Mueller, Chief Executive Officer Date: _______________________ [AUDITOR] By ___________________________________________ [Name of person that can bind Auditor] [Title] Date: ________________________ Page 30
  31. 31. IOWA PUBLIC EMPLOYEES’ RETIREMENT SYSTEM ACTUARIAL AUDIT RFP SECTION V REQUIRED APPENDICES Appendix A—Letter evidencing firm’s satisfaction of minimum qualifications, ability and willingness to provide required services, and validating proposal for 180 days from date that the proposal is due. Appendix B—Organization chart reflecting firm’s ownership and relationship to parent and affiliates (if any). Appendix C—Organization chart of firm’s actuarial consulting group. Appendix D—Firm’s latest two years’ audited financial statements. Appendix E—Biographies of Primary Auditor and all Secondary Auditors to be assigned to the IPERS account. Appendix F—Sample actuarial audit report for existing client. Page 31

×