REQUEST FOR PROPOSALS
               FOR
      ACTUARIAL CONSULTING

                  May, 2005

Alabama Prepaid Affordab...
Section I
                              GENERAL INFORMATION

1. Purpose
This Request for Proposal (RFP) has been issued by...
A. Supervising Actuary
Each respondent must certify that the Supervising Actuary meets the following minimum
qualification...
All questions concerning this RFP should be directed to the College Savings Programs Director,
Brenda Emfinger at 334-242-...
All duties of the Actuary shall be set forth in the Contract between the selected firm and the
Board. A sample Contract is...
C. Client Information
    1. Identify your top (3) references from clients for whom you are currently providing
       pre...
developments in federal legislation and/or regulations regarding college financing, tuition
       rates, etc.

   10. Att...
11. The Provider shall retain on file the necessary detailed information for the actuarial
         analysis to produce th...
EXHIBIT B
       MINIMUM QUALIFICATIONS AND MISCELLANEOUS INFORMATION
1. Primary Contact Concerning the Proposal:
       N...
7. Company has a company policy and practice of equal employment opportunity and non-
   discrimination based on race, cre...
WHEREAS, payments are received, from the sale of prepaid tuition contracts and placed
in the Trust Fund; and

        WHER...
Office of the Alabama Secretary of State, attesting to its qualifications to do business in
the State of Alabama.

(b)    ...
Section 3. Effective Date and Term: The effective date of this contract is ________ 1, 2005,
and it will continue in effec...
(b)     Actuary will be liable for actual damages to the extent they result from Actuary’s
negligent, reckless, willful mi...
Section 12. Amendment: Any amendment to this Agreement shall be in writing executed by
both parties with the same formalit...
Section 17. Audits: The Board reserves the right to designate persons to conduct periodic audits
of the Actuary’s procedur...
With a copy to the Office of General Counsel

J. Michael Manasco, General Counsel
State Capitol Building S-106
600 Dexter ...
furnished by either party to the other shall be treated as confidential and shall not be disclosed to
third parties except...
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REQUEST FOR PROPOSALS

  1. 1. REQUEST FOR PROPOSALS FOR ACTUARIAL CONSULTING May, 2005 Alabama Prepaid Affordable College Tuition Program (PACT) Kay Ivey, State Treasurer Alabama State Capitol 600 Dexter Avenue Montgomery, Alabama 36104 1
  2. 2. Section I GENERAL INFORMATION 1. Purpose This Request for Proposal (RFP) has been issued by State Treasurer Kay Ivey (Treasurer), at the direction of the Prepaid Affordable College Tuition (PACT) Trust Fund Board of Directors (Board). The Treasurer solicits proposals from qualified firms to serve as the consulting Actuary for PACT. This notice of need for professional services shall be widely disseminated to the professional community in a full and open manner. This Request for Proposals (hereinafter “RFP”) is issued in accordance with the requirements of Section 41-16-72(4), Code of Alabama (1975). This RFP is not an offer to contract but seeks the submission of proposals from qualified, professional firms that may form the basis for negotiation of a Contract with one of the qualified firms. The Board reserves the right to reject any or all proposals and to solicit additional proposals if that is determined to be in the best interest of the PACT Program. It is the intent of the Treasurer to do business with Alabama firms that pay Alabama taxes and employ Alabama citizens. When all factors are equal, corporations located in Alabama will be given preference The Treasurer shall post the RFP on the treasury website www.treasury.alabama.gov. 2. Program Information PACT is a qualified 529 prepaid college savings program. PACT has held an annual enrollment period since 1990. A contract is purchased to prepay four years (135 semester hours) of undergraduate tuition and 8 semesters of qualified fee payments. The contract is purchased for a beneficiary who must be ninth grade or younger at the time of purchase. Three payment plans are offered: a one time lump sum, monthly payments for five years, and monthly payments extending from November of the year purchased to May of the year the beneficiary graduates from high school. Currently, PACT has approximately 56,000 active accounts with approximately 16,000 beneficiaries eligible to use their benefits. The Trust Fund is 91.5% funded as of September 30, 2004 with assets of approximately $620,000,000. The PACT Trust Fund holds the program assets which include payments made by purchasers and earnings. Information about the PACT program, including the 2004 Actuarial Report, is available at the Treasurer’s website which is www.treasury.alabama.gov. 3. 3 . Minimum Qualifications and Requirements 2
  3. 3. A. Supervising Actuary Each respondent must certify that the Supervising Actuary meets the following minimum qualifications before submitting a response to the RFP. 1. Fellow or Associate of the Society of Actuaries and or Fellow of the Conference of Actuaries in Public Practice. 2. Member of the American Academy of Actuaries and/or meet the standards of a qualified Actuary under the provisions of ERISA. 3. At least five years experience as a supervising Actuary on consulting services in analysis and valuation assignments for prepaid tuition plans or large retirement systems with clients that have a minimum asset base of $300 million. B. Company Each respondent must certify that the Company meets the following requirements before submitting a response to the RFP. 4. Company is qualified with the Secretary of State to conduct business in the State of Alabama. (To download the form for a “Certificate of Existence”, access www.sos.state.al.us, corporations division, or call 334-242-5324 to request the form.) This will be required for the successful Respondent. 5. Company maintains sufficient procedures and capabilities to ensure the timely and accurate backup and full recovery for all computers and other data storage systems related to the PACT account. 6. Company has a company policy and practice of equal employment opportunity and non- discrimination based on race, creed or gender. 7. Company cannot be indemnified by the Board or the State of Alabama. If the respondent fails to meet any of the required criteria, the respondent should not proceed further in the RFP process. Written certification of these qualifications and requirements is required in Exhibit B. 4. Submission of Proposals Proposals must be received at the following address no later than the close of business on June 20, 2005. Provide the original plus three (3) copies. Attention: Kay Ivey, State Treasurer State Treasurer’s Office Alabama State Capitol 600 Dexter Avenue Montgomery, Alabama 36104 It is the responsibility of the Respondent to ensure that its proposal is timely delivered and received in the proper office on or before the deadline for responding to this RFP. The Treasurer will not consider proposals received after the date specified herein. All proposals received will be subject to public disclosure in accordance with Alabama public records laws. 3
  4. 4. All questions concerning this RFP should be directed to the College Savings Programs Director, Brenda Emfinger at 334-242-7515 or brenda.emfinger@treasury.alabama.gov. During the RFP process, no other employees of the Treasurer’s Office, the Treasurer, or the Board should be contacted by any individual or firm that intends to submit a response regarding the RFP. Doing so may disqualify the firm from selection. 5. Proposal Required Information Proposals should be as thorough and detailed as possible so that capabilities to provide the required services can be properly evaluated. To be considered, responses to this RFP must include a cover page, Exhibit A, Exhibit B (Minimum Qualifications), Exhibit C, (a statement of fees), and Exhibit D, (a Disclosure Statement). All proposals submitted in response to this RFP must include a completed Disclosure Statement as required by Section 41-16-80, et seq., Code of Alabama (1975). Copies of the Disclosure Statement, and information, may be downloaded from the Alabama Attorney General’s web site at www.ago.state.al.us/ag_items.cfm. The Proposal must be signed by an official in the responding organization who has the authority to bind the organization. 6. Evaluation and Selection After the review and evaluation of the proposals, the Board may conduct interviews. Finalists chosen for interviews, if necessary, will be notified. The Board reserves the right to request a best and final offer for fees from finalists. The Board will select the Respondent the Board determines, in their sole discretion, to be fully qualified and best suited among those submitting proposals on the basis of the evaluation factors, including fees, to best meet the needs of the PACT Program. All proposals received in response to this RFP may be rejected and the Board may solicit additional proposals. Responses to this RFP will be evaluated based upon the following: Respondent’s Qualifications – Weight 20% Ability to Perform Required Work - Weight 40% Fees – Weight 35% Located in Alabama – Weight 5% Upon identification of the selected Actuary, if any, the Board may initiate negotiations for contract terms and conditions. The contract will incorporate reference to the requirements of the RFP and the proposal as negotiated. It is expected that the term of the contract be for a period of five (5) years. 7. Contract 4
  5. 5. All duties of the Actuary shall be set forth in the Contract between the selected firm and the Board. A sample Contract is attached as Exhibit E for informational purposes only, and is subject to changes and revisions. If the Respondent opposes any language in the sample Contract, this should be addressed in the Proposal. EXHIBIT A PROPOSAL Proposal should include the following: 1. Corporate Information This section includes corporate overview, personnel and client information. A. Corporate Overview-Provide an overview of the firm, including the following: 1. Corporate profile, including the financial condition of the firm, overall business objectives, firm experience, quality control procedures and ownership; 2. Any restrictions, consent orders, or litigation involving the firm, principals, or key personnel within the past five years; 3. Indicate prior experience of the firm which is relevant to the successful accomplishment of the work defined by this RFP. Include descriptions of the qualifying experience including project descriptions and starting and completion dates of projects successfully completed. 4. Detailed information on any vendors or subcontractors the firm will partner with to provide services to PACT. 5. Describe the capability of the computer system, the ownership control of this system and the facilities to be utilized in the performance of this contract. B. Personnel 1. Identify the supervising actuary to be assigned the work proposed. This person must meet or exceed the “Standards for Supervising Actuaries”. Identify all other personnel who shall be performing work under the contract. Provide summaries of the professional and experience qualifications of all persons, including supervising and support actuaries who shall perform work under the contract. 5
  6. 6. C. Client Information 1. Identify your top (3) references from clients for whom you are currently providing prepaid tuition or similar services related to this RFP. References must include the name, title, address, type of services provided, and length of time serviced. 2. Work Required, Analyses and Reports All actuarial analysis on pricing, final reports, presentations of assumptions and similar technical documentation from the company must be approved and signed by the Supervising Actuary. A. Work Required 1. Provide expert advice and guidance regarding any actuarial, pricing and policy issues which may affect the actuarial soundness of PACT. Give expert testimony to various authorities, including the State legislature and staff, if the need arises. 2. Periodically review the form and content of data files maintained by PACT and make recommendations for modifications, additions or deletions that will insure the maintenance of studies and analyses. 3. Maintain a database in order to individually reconcile and sort data such as college enrollment, tuition, contract and investment data from year to year and to test the accuracy of the submitted data to be used to perform the cumulative analyses. PACT will provide copies of data files to the approved Provider, however, the Provider must keep this information confidential unless other wise approved by PACT 4. Interact with PACT’s legal counsel, staff, or Board to determine if pending legal issues may affect the actuarial soundness of the program. 5. Be readily accessible to the Board, State Treasurer and staff by telephone within one working day, and be available for meetings in Montgomery within five working days of request. 6. Provide guidance and advice regarding prepaid tuition program structure, pricing structure, payment plans and enrollment periods. 7. Analyze and make recommendations relative to possible improvements in the cost structure and accounting methods used to determine fees and expensed assessed by PACT. Keep the Board and staff apprised of current trends, methods and progress within the actuarial profession and the education field related to PACT’s activities to enhance the program. 8. Evaluate, if requested, the effect of any proposed legislative changes regarding the cost of the program, participation rates, the program’s actuarial soundness, etc. Provide actuarial review of any program amendments to PACT’s enabling legislation . 9. Provide guidance and advice regarding any new actuarial issues that may affect PACT and which arise during the term of the contract. Keep the Board and staff advised on 6
  7. 7. developments in federal legislation and/or regulations regarding college financing, tuition rates, etc. 10. Attend up to three board meetings or staff meetings annually. B. Analyses 1. Perform annual actuarial valuation and analysis. Prepare Annual Valuation Report for the PACT Trust Fund and examination of program participants at the end of each fiscal year. 2. Provide recommendations and guidance regarding assumptions, and document changes in assumptions with applicable written analysis. 3. Provide sensitivity analyses for the valuation based on variations in tuition rated and investment rates of return or other assumptions selected. 4. Develop a thorough cash-flow analysis of the program’s assets and liabilities, which includes a forecast of future financial obligations of PACT based on, but not limited to: the age of grade of the beneficiary, tuition rates, years remaining before payment is due, investment returns, pricing strategy, enrollment results, etc. 5. Determine and recommend annual pricing options for various payment plans. 6. Provide a pricing analysis which compares the changes in the costs from year to year and the reasons for those changes, based on a comparison of actual verses projected tuition rates and investment rates of return according to each of the various actuarial assumptions. At a minimum, annual and cumulative analyses shall be performed for each type of enrollment or group of participants and the payment plans offered. 7. Annually assess the fund surplus/deficit and recommend strategies of building a reserve. 8. Analyze tuition data for state public universities, college, and community/junior colleges, and provide recommendations and include the determination of the weighted average tuition rates based on data provided by PACT. 9. Review and recommend non-economic assumptions including, but not be limited to, college enrollment rates, tuition rates, termination and refund rates, drop out rates for purchasers on monthly payment plans, potential bias for attendance at certain colleges, death and disability, etc. 10. Provide timely information and future liability figures necessary for PACT to prepare its financial statements, annual report or other necessary reports. Calculations of future liability are crucial to the completion of PACT’s annual financial audit. Provide a certified summary statement of the soundness of the fund for the annual report. 7
  8. 8. 11. The Provider shall retain on file the necessary detailed information for the actuarial analysis to produce the cumulative analyses without further data from PACT (except for data covering periods before the Provider is retained by PACT). Data files from PACT will be available and downloaded at least once a year, at the end of the State’s fiscal year. 12. By special request, develop special analyses and provide various tables, matrices, supporting documentation and other materials need by PACT for reports, marketing efforts, legislative testimony or other purposes 13. Actuarial analyses shall contain sufficient explanatory text to permit a reasonable understanding of the actuarial assumptions, cost methods and conclusions by competent actuaries and by persons knowledgeable in the education field. This shall include, but not be limited to, an executive summary and charts of the valuation, description of actuarial assumptions and cost methods, and matrices of the costs for different age children or age groups by payment plan. 14. Provide the calculation of contract refunds of the Current Tuition Value cancellations based on death/disability (less than two per month). C. Reports 1. The Provider shall submit to the State Treasurer twenty (20) copies of each Actuarial Report when they are completed. In addition, for any other reports submitted by the Provider, twenty (20) copies shall also be provided 2. The Provider must be willing to provide any special reports of an actuarial nature which may be requested by the Treasurer or Board. A. 1. 2. 1. 1. 8
  9. 9. EXHIBIT B MINIMUM QUALIFICATIONS AND MISCELLANEOUS INFORMATION 1. Primary Contact Concerning the Proposal: Name: Address: Phone Number: Email: 2. Fellow or Associate of the Society of Actuaries and or Fellow of the Conference of Actuaries in Public Practice. Yes_____ No_____ 3. Member of the American Academy of Actuaries and/or meet the standards of a qualified actuary under the provisions of ERISA. Yes_____ No_____ 4. At least five years experience as a supervising actuary on consulting services in analysis and valuation assignments for prepaid tuition plans or large retirement systems with clients that have a minimum asset base of $300 million. Yes_____ No_____ 5. Company is qualified with the Secretary of State to conduct business in the State of Alabama. (To download the form for a “Certificate of Existence”, access www.sos.state.al.us, corporations division, or call 334-242-5324 to request the form.) This will be required for the successful Respondent. Yes_____ No_____ 6. Company maintains sufficient procedures and capabilities to ensure the timely and accurate backup and full recovery for all computers and other data storage systems related to the PACT account. Yes____ No____ 9
  10. 10. 7. Company has a company policy and practice of equal employment opportunity and non- discrimination based on race, creed or gender. Yes____ No_____ 8. Company cannot be indemnified by the Board or the State of Alabama. Yes____ No____ EXHIBIT C STATEMENT OF FEES 1. It is anticipated that a five-year Contract will be awarded to the successful Respondent. 2. Provide a total for each year of the Contract beginning no later than October 1, 2005. All fees and charges must be included. 3. Include a statement that the prices submitted have been arrived at independently and without consultation, communication or agreement with any other Respondent and no attempt has been made by Respondent to induce any other firm to submit, or not to submit, a Proposal for the purpose of restricting competition. EXHIBIT D Disclosure Statement EXHIBIT E ACTUARIAL SERVICES MANAGEMENT AGREEMENT This Actuarial Management Services Agreement (the “Agreement”) is made and entered into between the Board of the Prepaid Affordable College Tuition Program (the “Board”) and _______ (the “Actuary”), on the 1st day of _________ 2005. Actuary acknowledges that this Agreement is not effective until it has received all requisite state government approvals. Actuary shall not begin performing work under this Agreement until notified to do so by Board. Actuary is not entitled to compensation for work performed prior to the confirmed effective date of the Agreement." WITNESSETH WHEREAS, the Board is charged with the oversight of the PACT Trust Fund by Section 16-33C-5 of the Code of Alabama; and, WHEREAS, the Board has determined that it is in the best interest of the PACT Trust Fund to engage qualified professionals as authorized under Section 16-33C-1 through Section 16-33C-8, Code of Alabama, 1975 (as last amended); and 10
  11. 11. WHEREAS, payments are received, from the sale of prepaid tuition contracts and placed in the Trust Fund; and WHEREAS, this Agreement is made pursuant to the provisions of section 41-16-21(a), Code of Alabama 1975, as amended, and is a contract exempt from competitive bidding in that the services to be secured encompass services of individuals possessing a high degree of professional skill; and WHEREAS, the State Merit System does not provide an appropriate job classification to perform the services described in this Agreement at this time; and WHEREAS, the Actuary has presented with the requisite expertise, ability and professional skill necessary to perform the services of an Actuary; now, THEREFORE, for good and valuable consideration and in consideration of the services to be performed and payments to be made, together with the mutual terms, covenants and conditions hereinafter set forth, and promises hereinafter stipulated, the parties mutually agree as follows: Section 1. Definitions. When used in this Agreement, the words and terms defined below shall have the following meanings: (a) “Board” means the Board of Trustees of the Prepaid Affordable College Tuition Program. (b) “Trust Fund” means the PACT trust fund created in Section 16-33C-6 (b) of the Code of Alabama (c) “Permitted Investments” means the investments that may be made with assets of the PACT Trust Fund authorized by Section 16-33C-5 (3) of the Code of Alabama that constitute legal investments for public funds in the state, including legal investments for the State Treasurer and the Alabama Trust Fund and as provided in the Investment Policy. (d) Investment Policy” means the Investment Policies and Guidelines Statement of the Trust Fund adopted by the Board of Trustees on August 25, 2004 and as may be amended from time to time. Changes to the investment policy will be binding on the Actuary upon receipt of notice specified in Section 24 hereof. A complete copy of the Investment Policy is available on the Treasurer’s website and incorporated by reference as if fully set out herein. Section 2. Representations and Warranties: The Actuary represents and warrants as follows: (a) That it is qualified with the Alabama Secretary of State to conduct business in the State of Alabama, and shall furnish, within ten days of the date of this contract, a certificate of good standing to do business in Alabama, or such other evidence from the 11
  12. 12. Office of the Alabama Secretary of State, attesting to its qualifications to do business in the State of Alabama. (b) That it currently carries, and will maintain in full force and effect errors and omissions insurance covering negligent acts or omissions, which adequately covers it under this Agreement. (c) That it is a stable organization that offers appropriate incentives to investment professionals with one goal being to minimize professional turnover. (d) That its policy and practice is for equal employment opportunity and non- discrimination based on race, creed or gender. (e) It is lawfully organized and constituted under all federal, state, and local laws, under ordinances of other authorities of its domicile, and is otherwise in full compliance with all legal requirements of its domicile as is necessary to perform is obligations under this Agreement. (f) It possesses the legal authority and capacity to enter into and perform this Agreement. (g) It has been duly authorized to operate and to do business in all places where it will be required to conduct business under this Agreement; that it has obtained, at no cost to the Board, all necessary licenses and permits required in connection with this Agreement, and that it will fully comply with all laws, decrees, labor standards, and regulations of its domicile, and wherever performance occurs, as is necessary to and during the performance of this Agreement. (h) It has no present interest, nor shall it acquire any interest, which would conflict in any manner with its duties and obligations under this Agreement, provided that nothing in this Agreement shall limit or restrict the right of any director, officer, or employee of the Actuary to engage in any other business or to devote his or her time and attention in part to the management or other aspects of any other business or to render services of any kind to any other corporation, firm, individual, or association. (i) The Actuary and its personnel are fully qualified and hold such authorizations, permits, licenses, and certifications required to perform such services under federal, state, and local law, or as may reasonably be required by the Board. . (j) It has in place and will maintain sufficient procedures and capabilities to ensure the timely and accurate backup and full recovery for all computers and other data storage systems related to this Agreement. (k) That all representations of the Actuary contained it its proposal dated *** **, 2005 to the Treasurer and in its oral presentation are incorporated by reference as a part hereof the same as if fully set out herein. 12
  13. 13. Section 3. Effective Date and Term: The effective date of this contract is ________ 1, 2005, and it will continue in effect until ___________ 30, 2010, or when terminated according to Section 10 of this Agreement, whichever shall first occur. Section 4. Actuary Services. This section contains only sample headings for identification purposes. The listing does not represent a complete identification of services. The specifics will be taken from the RFP, the proposal, oral presentation to the Board, and as otherwise apparent or necessary. (a) Data Collection (b) Selection of Actuarial Assumptions and Methodology (c) Analysis of PACT Contract Price Structure (d) Presentation of the Results of Actuarial Analyses (e) Consultation and Advisory Services (f) Supervision of Services Provided Under this Agreement (g) Signature of Supervising Actuary (h) Maintain Database (i) Quality and Timeliness of Services: Section 5. Ownership of Data: The Board shall own all materials and data produced by or on behalf of the Board under this Agreement. Section 6. Taxes: The Actuary, including its agents and assignees are solely responsible for, and shall pay all federal, state, or local taxes that become payable as a result of this Agreement; and, shall hold harmless, defend and indemnify the Board, it’s officers, and the State of Alabama in regard thereto. Section 7. Standard of Performance: (a) The Actuary shall discharge its duties under this Agreement in all instances with reasonable care, professional skill, prudence and diligence under the circumstances then prevailing that a prudent actuary acting in a like capacity would provide and use in the conduct of an engagement of like character with like aims in performing its obligations under this Agreement. 13
  14. 14. (b) Actuary will be liable for actual damages to the extent they result from Actuary’s negligent, reckless, willful misconduct, fraud, or deception in performing its duties as set out in this Agreement Section 8. Public Access /Confidentiality: All documents, papers, letters, or other materials relating to this Agreement that are made or received by the Actuary in conjunction with this Agreement, and which are required by law to be maintained, shall be made available for public access and for audit purposes for the period of time so designated by law and by the Board during and after termination of this Agreement. In all other circumstances, all information furnished by either party to the other shall be treated as confidential and shall not be disclosed to third parties except as required by law or upon the written agreement signed by each party to this Agreement. Section 9. Compensation and Expenses: The Actuary shall be entitled to receive compensation for its services as follows: (a) The Actuary shall be compensated based on invoices for services rendered and expenses incurred. Invoices shall be submitted to the Treasurer in sufficient detail for a proper audit to be performed. Invoices will be paid within thirty (30) days of receipt. The total compensation for the term of this Agreement shall be as follows: Fiscal Year Ended September 30, 2006: $ Fiscal Year Ended September 30, 2007 $ Fiscal Year Ended September 30, 2008 $ Fiscal Year Ended September 30, 2009 $ Fiscal Year Ended September 30, 2010 $ (b) The maximum total amount to be paid under this Agreement shall not exceed $*******. This amount includes all compensation for services provided and all expenses incurred by Actuary in the performance of this Agreement. Section 10. Termination, Resignation, or Removal: The Board may terminate this Agreement at any time and for any reason by giving Actuary thirty (30) days written Notice. The Actuary may resign at any time by giving ninety (90) days written Notice to the Board. However, the Board may immediately terminate this Agreement in case of a breach of the Agreement by the Actuary or notice of a prospective sale or merger of Actuary. The Actuary shall fully account for the professional services and fees up to the effective date of the termination, resignation, or removal. The Actuary shall be entitled to receive its fees for the period through and including the effective date of the termination, resignation, or removal. Section 11. Disposition of Files: The Actuary shall upon request turn over and deliver to the Board copies of all data, reports, files, documents, and other tangible materials held by the Actuary that contain data or other information relating to the Trust Fund upon termination of this Agreement. The Actuary may retain its original work product. 14
  15. 15. Section 12. Amendment: Any amendment to this Agreement shall be in writing executed by both parties with the same formality of this Agreement and in strict compliance with all applicable federal or State of Alabama laws. Section 13. Assignment: This Agreement is not assignable in any part, manner or circumstance. Any attempted assignment is simultaneously void and shall constitute the simultaneous termination of this Agreement. Section 14. Indemnification: (a) The Actuary is designated and shall act as an independent contractor and not as an employee of the Board in the performance of all the tasks and duties of this Agreement. The Actuary shall indemnify, defend, and hold harmless the Board, its members, officers, and the State of Alabama from all claims, suits, judgments, or damages including litigation costs and reasonable attorneys’ fees arising from its negligent performance, willful misconduct, fraud or deception. The Actuary is entitled to prompt and timely notice of any third party claims for which indemnity is sought and shall be given the opportunity to participate in the defense of such claims. (b) No individual employee or agent of the State of Alabama shall be subject to or have any personal liability for the terms and conditions of this Agreement. The Actuary, and on behalf of its assigns and successors, hereby waives, for all purposes, any claims now apparent or which may hereafter arise against any agent or employee of the State of Alabama for personal liability of said agent or employee on behalf of the State of Alabama including its various agencies, boards, commissions, and departments. Section 15. Jurisdiction and Venue: (a) The validity, interpretation, and performance of this Agreement shall be controlled and construed under the laws of the State of Alabama. Jurisdiction and venue shall be in Montgomery County, Alabama for any action brought which relates to this Agreement. (b) The sole remedy available to Actuary for settlement of any and all disputes arising under the terms of this Agreement shall be limited to the filing of a claim with the Board of Adjustment for the State of Alabama. Any claims against Actuary will be resolved in federal or state court in Montgomery, Alabama pursuant to Alabama law. (c) Actuary and Board agree that for any and all disputes arising under the Agreement, when considering settlement of such disputes, to utilize appropriate forms of non-binding alternative dispute resolution including, but not limited to, mediation by and through the Attorney General’s Office of Administrative Hearings or where appropriate, private mediators. Section 16. Waiver. The failure of either party to object to, or to take affirmative action with respect to any conduct or performance of the other that is, or may be, in violation of the terms of this Agreement shall not constitute a waiver of the violation or breach, or of any future violation or breach. 15
  16. 16. Section 17. Audits: The Board reserves the right to designate persons to conduct periodic audits of the Actuary’s procedures and activities at the Board’s expense. Section 18. Intent: Time is of essence in undertaking the provisions of this Agreement. Section 19. Captions: The captions or headings in this Agreement are for convenience only and in no way define, limit, or describe the scope or intent of any provisions or sections of this Agreement. Section 20. Publication: The Board is the only entity authorized to issue information for public knowledge or news releases for publication concerning the terms or performance of this Agreement. Section 21. Merit System Exclusion: The Actuary is an independent contractor and nothing contained herein shall constitute or designate the Actuary, or any of its agents or employees, as agents or employees of the State of Alabama or the Board. The Actuary, it agents or employees shall not receive any fringe benefits afforded merit system, appointed, or other regular, full or part-time employees of the State of Alabama. Section 22. Notices: All notices, requests, demands or other instruments which may be, or are required to be, given by either party to this Agreement, shall be in writing and shall be deemed given if hand delivered with a signed receipt for the Board, or sent by facsimile, and confirmed as received for the Board, or served by an law enforcement officer or process server appointed by a valid court order, or by electronic communication (“e-mail”) with a received electronic receipt for the Board or, if mailed on the fifth business day following deposit of such notice in the U. S. Mail, postage prepaid, by certified or registered mail, return receipt requested, to the other person at the address listed below, or at such other address which either party may so notify the other of in writing. Notices sent to Actuary will be addressed to: (Voice (Facsimile) (E-mail) Notices sent to the Board will be addressed to: The Honorable Kay Ivey Alabama State Treasurer State Capitol Building Room S-106 600 Dexter Avenue P.O. Box 302510 Montgomery, AL 36130-2510 334-242-7500(Voice) 334-242-7592(facsimile) 16
  17. 17. With a copy to the Office of General Counsel J. Michael Manasco, General Counsel State Capitol Building S-106 600 Dexter Avenue P.O. Box 302510 Montgomery, AL 36130-2510 334-353-0050 (Voice) 334-353-0056 (Facsimile) Mike.manasco@treasury.alabama.gov Section 23. Non-Exclusive Contract. The Board recognizes that the Actuary acts as adviser or Actuary to other clients and may give advice, and take action, with respect to any of those other clients that may differ from the advice given, actuarial services, the timing or nature of action taken, with respect to the Trust Fund. Section 24. Beneficiary of Agreement: The execution and performance of this Agreement is for the benefit of the Trust Fund and not for any other person or entity. Section 25. Severability and Survival: (a) If any provision of this Agreement shall be held to be void or inoperative by a court of competent jurisdiction, such provision shall be deemed severed from the remaining provisions of this Agreement, and the remaining provisions shall remain in full force and effect. (b) The rights, protections, and remedies under this Agreement for Actuary and Board shall survive its termination. Section 26. Entire Agreement This Agreement constitutes the entire understanding of the parties and supersedes any prior express or implied written or oral agreements between them. Section 27. Not a Debt of the State: This Agreement shall not be construed as a debt of the State of Alabama as prohibited by Section 213, Alabama Constitution 1901, as amended by Amendment 26. Section 28. Force Majeure: Neither Party will have any liability whatsoever for any damage, loss, expense or liability of any nature that the other Party may suffer or incur, caused by an act of God, fire, flood, civil or labor disturbance, war, terrorism, act of any governmental authority or other act or threat of any authority (de jure or de facto), legal constraint, or any cause beyond the reasonable control of either Party. Section 29. Public Access /Confidentiality: All documents, papers, letters, or other materials relating to this Agreement that are made or received by the Actuary in conjunction with this Agreement, and which are required by law to be maintained, shall be made available for public access and for audit purposes for the period of time so designated by law and by the Board during and after termination of this Agreement. In all other circumstances, all information 17
  18. 18. furnished by either party to the other shall be treated as confidential and shall not be disclosed to third parties except as required by law or upon the written agreement signed by each party to this Agreement. IN WITNESS WHEREOF the Board and the Actuary have executed this instrument as of the day and year first below written. BOARD OF TRUSTEES OF THE PACT TRUST FUND By: ______________________________ DATE: ______________ Kay Ivey, State Treasurer and Its Chairperson ACTUARY By: ____________________________ DATE: _____________ Its ______________________________ APPROVED: _________________________________ DATE: ________________ Bob Riley, Governor, State of Alabama 18

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