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Responses for the Actuarial Services RFP Questions

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  • 1. Responses for the Actuarial Services RFP Questions 1. What are the reasons PSPRS is going out to bid for these services? Please explain any particular challenges or improvements desired within the current environment. (e.g. objectives driving this project, risks PSPRS is currently facing) PSPRS has never issued a RFP for actuarial services. The governing board has adopted a schedule to regularly access audit, legal and actuarial services. Due to the complexity and higher volume of actuarial services, it was decided to reassess the actuarial services this year. 2. What is driving the decision date of 4/27? The RFP is for actuarial valuation and services for fiscal year ended June 30, 2009. 3. How were the firms that received a direct solicitation included in this process? All of the large actuarial firms were included in the process as well as an ad placed in P&I. 4. Please describe the level of satisfaction with the current actuarial consultant? Describe desirable improvements that could be made under the current consultant arrangement? PSPRS is satisfied with the current actuarial consultant. It was just time to reassess those services due to the complexity and high volume of work. 5. Does PSPRS have a budget for this project? Yes, there is a budget for this project. The budget range is approximately $150,000 to $170,000. 6. What is the current fee arrangement with Rodwan? What are the current levels of fees for this work? The current fee arrangement is all inclusive of travel, administrative, third-party, phone calls, routine correspondence and all other costs. The fee is approximately $147,000 for all three plans. This fee includes a monthly component of $1,930 for ongoing actuarial and consulting services. 7. What other firms are being included in this process? If this information can not be shared, please provide the number of firms invited. Buck Consulting, Milliman, GRS, Mercer and Rodwan were invited to participate. However, we anticipate other responses from the ad placed in P&I.
  • 2. 8. How long has the current actuary been providing these services to PSPRS? Rodwan has been providing these services for PSPRS for approximately 30 years. 9. Will the current actuary (Rodwan) be invited to participate in this bid? Yes. 10. Minimum qualifications require the Primary Actuary to be an FSA with a minimum of 10 years experience working with public retirement systems of at least 40,000 members, and the Supporting Actuary have at least 5 years of experience working with public retirement systems of at least 40,000 members and no credential requirements. Would you accept a team that meets all the requirements, but may not on an individual basis? The RFP was revised after the invitation to bid was mailed out. Please go to our website for the most recent version of the RFP. www.psprs.com 11. Is the minimum qualification standard (discussed in question 8 above) a new requirement for your existing actuary? See response to question #10. 12. Would you accept a contract with a limit of liability clause? This appears to be the normal business practice. However, all of our contracts have to go through legal review by our counsel. 13. Does your scope of services include GASB 25 and 43/45 calculations? Are GASB 27 calculations required for the employers? If so, is the actuary expected to enter into separate contracts with the employers to make these calculations? Yes, the scope of services includes all applicable disclosures for GASB. A copy of an individual actuarial valuation is available for review on our website. 14. When is the next 5 year experience analysis expected to be performed? The last 5 year experience study was performed in 2007. The next one will be in 2012. 15. How will data be made available for the next experience review? If a new firm is selected, all data will be made available from the previous actuary and staff. 16. How many cost estimates of proposed legislation are typically required each year? Varies. This year has been unique due to the economic situation.
  • 3. 17. How often are actuarial tables and factors changed? If necessary, tables and factors are changed as a result of the experience study. In addition, the tables and factors could change anytime there is a change in assumptions directed by the Fund Manager. 18. How many years are typically included in projection valuation studies? Are these studies deterministic or stochastic? PSPRS hasn’t really requested or had projection valuation studies performed in the past. However, this could be included and would be stochastic. 19. Are the questions with regard to actuarial audits (eg D1, appendix F) intentional, or should they refer to actuarial valuation clients and services? This was accidental and should refer to actuarial valuation clients and services not audits. 20. Can you share with us who will make up the Operations Sub-Committee for this bid? The Operations Sub-Committee is made up of 2 members of the Fund Manager, governing board. The current members are the Chair, Judge Carter Olson and the Advisor, Brian Delfs. 21. If we were selected as a finalist, will we have access to the decision making committee in order to confirm and refine our capabilities presentation and proposal? Yes, all finalists would have access to the decision making committee. 22. Can the designated finalists expect in-person interviews? Or are these meetings subject to cancellation due to scheduling or to possibly accelerate the decision making process? It is anticipated that in-person interviews will be conducted. 23. How likely is PSPRS to make a change? Is “status quo” an option? “Status quo” is an option. However, the selection will be based on the needs of PSPRS and the best suited firm to provide those services. 24. Could you provide a copy of one of the individual employer reports for PSPRS and CORP? Are the individual employer reports currently prepared by the actuary or does the actuary provide the results for each employer and the system produces the report? A sample individual report for PSPRS and CORP has been placed on our website. The individual reports are currently prepared by the actuary, sent to PSPRS for distribution to all the participating employers.
  • 4. 25. Could you provide the key dates (in general terms) in the valuation timeline, i.e. date member data is sent to actuary, date asset information is provided to the actuary, date of draft report, date of final report and date of presentation to the Fund Manager? Is this timeline satisfactory or are you looking to make changes? Data is sent to the actuary in July. Asset information is sent to the actuary in August. Preliminary consolidated information is available and presented to the Fund Manager in late September/early October. Final consolidated report and individual reports due by the end of November. We are comfortable with the current timeline. 26. Can you provide the number of cost studies the actuary performed for the 2007 and 2008 legislative sessions? Were these typical years as far as the number of studies requested of the actuary? If not, what level of activity is reasonable to expect? Activity at the legislature has increased significantly due to the current economic situation. Since the legislature started in January, we probably requested at least twenty different calculations from the actuary. We are looking at mitigating employer contribution rate increases based on the 6/30/09 results. Fortunately, the Fund Manager has the power, without going to the legislature, to change the actuarial assumed earnings rate, salary growth assumptions, demographic assumptions, amortization period, smoothing period and the actuarial cost method used. It is difficult to estimate the future cost studies that would be required of the actuary. But, one can anticipate that the requests will be unusually high until the situation changes and employer rates begin to level off.