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,
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
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.
8. How long has the current actuary been providing these services to PSPRS?
Rodwan has been providing these services for PSPRS for approximately 30
9. Will the current actuary (Rodwan) be invited to participate in this bid?
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
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
16. How many cost estimates of proposed legislation are typically required each
Varies. This year has been unique due to the economic situation.
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
20. Can you share with us who will make up the Operations Sub-Committee for this
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
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
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.
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
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
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.