STATE UNIVERSITIES RETIREMENT SYSTEM OF ILLINOIS
REQUEST FOR PROPOSALS
ACTUARIAL CONSULTANT SERVICES
I. RFP SUMMARY STATEMENT
The State Universities Retirement System (SURS) of Illinois requests proposals from
qualified actuarial consulting firms interested in providing a range of actuarial services while
functioning as actuarial advisor to the SURS Board of Trustees and the Executive Director of
The goal of this RFP is to evaluate and select an actuarial firm that will serve as consulting
actuary to the SURS Board of Trustees and Executive Director of SURS for a five year
period commencing July 1, 2008, and ending June 30, 2013.
II. BACKGROUND INFORMATION
SURS is a cost-sharing, multiple-employer, public employee retirement system, serving the
retirement needs of personnel employed by the public institutions of higher education in
Illinois. The membership of the system is roughly 200,000 members, including
approximately 43,000 benefit recipients, 82,000 active members, and 75,000 inactive
members. SURS administers both a defined benefit plan and a defined contribution plan.
The defined benefit pension trust fund has assets of approximately $16 billion. The defined
contribution plan has accounts with assets of approximately $650 million.
SURS is administered by an Executive Director who is responsible to a policy setting nine-
member Board of Trustees. The agency employs approximately 120 employees.
SURS is created by and subject to the Illinois Pension Code (Illinois Compiled Statutes,
Chapter 40, Articles 1, 1A, 15, 20 and 22) and other state and federal laws. SURS’ latest
Comprehensive Annual Financial Report and other information about SURS may be
obtained on its website at www.surs.org. For additional information about SURS, its
financial and benefit structures, please refer to the Comprehensive Annual Financial Report
ended June 30, 2007, at the Investments tab on the SURS homepage.
III. SCOPE OF SERVICES
Contract Services and Deliverables
The consulting actuary shall perform tasks which include, but shall not be limited to, the
A. General Duties
(i) Load and reconcile all the data in the SURS database. The primary computer system
supporting SURS’ business applications is an IBM I-Series mid-range computer.
SURS will furnish the consulting actuary with all data and statistical information
deemed necessary to perform specified contract services, provided the data is available
in the records and files of the system. This data will be reported to the actuary via file
(ii) Treat all member information as confidential.
(iii) Seek written consent prior to public release of information resulting from the
engagement. With respect to any publicity given to the actuarial services provided
under terms of the resulting contract, the consulting actuary shall identify SURS as the
sponsoring agency and shall not release any information without prior approval of the
Executive Director of the system or appointed designee. This information includes, but
is not limited to, press releases, research, and reports.
(iv) SURS expects the consulting actuary to route all requests, reports and other
communication in connection with this contract through the Executive Director of the
system or appointed designee.
(v) All work product to be signed by consulting actuary.
(vi) Perform all services within the scope of the contract under the direct supervision of a
qualified actuary. An approved actuary must be regularly engaged in the business of
providing actuarial services and have at least 10 years experience with major public
employee retirement systems and designation as a Fellow in the Society of Actuaries.
SURS reserves the right to reject the firm’s choice of a consulting actuary and may
terminate the contract if a consulting actuary acceptable to the SURS Board of Trustees
cannot be made available by the firm.
B. Consultation and Advisory Services
(i) Provide actuarial consultation and advisory services. These services may be delivered
in meetings or by telephone calls and written correspondence, as requested by SURS.
SURS expects these services may include public testimony to committees, boards,
commissions, and legislators on any technical, policy, legal or administrative problems
arising during the course of operation of the system. The consulting actuary should be
readily accessible to SURS’ Executive Director by telephone within one working day
and be available for meetings within five working days of a request. SURS expects the
consulting actuary to attend a minimum of two Board of Trustees meetings per contract
year in Chicago or Champaign, Illinois, including one meeting to review the annual
actuarial valuation. SURS also expects the consulting actuary to be available for
educational discussions with the Board of Trustees and/or SURS employees. The
consulting actuary must have the ability to discuss actuarial theory and other matters in
(ii) Prepare various actuarial operating tables and factors. From time to time, these tables
and factors may be required for operation of the system. These tools include, but are
not limited to, mortality tables, option tables for annuitants, present value factors, and
survivor benefit factors.
(iii) Prepare actuarial cost estimates of proposed legislation. The consulting actuary shall
provide timely financial impact estimates of planned statutory amendments as
requested by SURS’ Executive Director. SURS expects the consulting actuary to
prepare an average of six estimates per contract year (fee for analyses in excess of six
will be negotiated separately). The majority of these pricing requests will occur during
the legislative audit session and will require the actuary’s response within three
working days or sooner.
(iv) Recommend possible improvements in SURS’ financing and benefit structure. Provide
advice with respect to the actuarial funding methods, assumptions and techniques.
Throughout the duration of the contract, the consulting actuary will inform SURS of
any new developments in the retirement industry and their effect on the financing and
benefit structure of a retirement system. The consulting actuary should keep the Board
of Trustees and the Executive Director of the System apprised of current trends and
advancements within the actuarial profession.
(v) Assist SURS staff in review of valuations and drafting new legislation or proposed
changes to existing retirement laws which govern the system. Furthermore, the
consulting actuary should assist SURS in developing strategies for resolving any policy
or administrative problems associated with implementing new legislation.
(vi) Keep SURS informed of any new developments or changes in federal legislation and/or
tax regulations regarding financing, benefits, vesting, fiduciary responsibility or
disclosure. SURS also expects the consulting actuary to assist SURS in implementing
federal law appropriately.
C. Valuation Services
(i) Perform annual actuarial valuations for the system. The resulting valuation reports
must contain a) a detailed explanation of any significant changes in actuarial losses or
gains because of deviations from expected experience; and b) projections for required
contributions, assets and liabilities for a period of fifty years into the future.
(ii) Complete, by mid-October each year, the self-managed plan disability and defined
benefit plan actuarial valuation for the fiscal year ended June 30 so the Board of
Trustees may certify the actuarially determined employer contribution rate for the
upcoming fiscal year.
(iii) Preparation of experience studies (every 5 years).
(iv) Preparation of actuarial summary statement for the comprehensive annual financial
(v) Provide asset/liability modeling.
(vi) Provide sensitivity analysis regarding actuarial assumption factors.
(vii) Provide any special actuarial studies requested by SURS (the fee for which shall be
IV. MINIMUM ELIGIBILITY REQUIREMENTS AND RFP PROCESS
A. Minimum Eligibility Requirements
The actuarial consulting firm must be regularly established in the industry of providing
actuarial consulting services, financially responsible and have experienced personnel able to
provide the required services. SURS may request information substantiating the above
requirements. Failure to provide this information may result in a responder’s proposal being
The individual(s) assigned to SURS as lead consultant(s) must have a minimum of five years
professional experience in the actuarial consulting field. All actuaries shall be enrolled
actuaries and shall be members of the American Academy of Actuaries or the Society of
The actuarial consulting firm must have been in business for a minimum of five years.
The firm must have provided actuarial services to other public retirement systems or
corporate pension plans which are approximately the size or complexity of SURS.
The firm must be able to maintain a data processing interface with the retirement system’s
custodian by tape, disk, on-line connection or by other electronic means.
The firm must not seek to unreasonably limit their liability for negligence or breach of
The following schedule may be changed if necessary. If the schedule changes, affected
responders will be notified by mail. In no event will the dates listed below be changed to
RFP issuance on: January 29, 2008
Written questions from potential
responders must be received by: February 11, 2008
Answers to written questions will be
disseminated on: February 14, 2008
Proposals due: February 22, 2008
Finalist(s) notified: February 28, 2008
Finalists’ presentations: March 14, 2008
Preliminary decision announced: March 15, 2008
Contract negotiation begin: March 18, 2008
Contract award by: March 31, 2008
C. Submission of Questions
In order to clarify any issues in this Request for Proposals, the System will respond only to
questions that are presented in writing via e-mail to firstname.lastname@example.org. All questions
concerning this RFP must be received by February 11, 2008. These questions will be
consolidated into a single Q&A document. The Q&A document will be posted to the
website (www.surs.org) on or around February 14, 2008 without divulging the source of any
D. Proposal Submission
In order to be considered for selection, proposals must be received via e-mail in Adobe
Acrobat format by Ms. Lori Kern at email@example.com no later than 4:30 p.m., Central Time
Zone, on February 22, 2008. Please reference the “Actuarial Consultant Services RFP”
in the e-mail subject line of your proposal. An e-mail confirmation will be sent confirming
receipt of the proposal.
All material submitted in response to the RFP will become property of SURS. Proposals will
be confidential during the selection process. Upon completion of the selection process, all
responses, including that of the firms selected, will be a matter of public information and will
be open to public inspection in accordance with the State of Illinois Freedom of Information
E. Rights Reserved
This RFP does not obligate SURS to complete the RFP process. SURS reserves the right
without prejudice to reject any or all proposals submitted.
SURS reserves the right to award all, part, or none of this contract if deemed appropriate and
desirable by SURS. SURS also reserves the right to remove one or more of the services from
consideration for this contract should the evaluation show that it is in SURS’ best interest to
do so. SURS also may, at its discretion, issue a separate contract for any service or groups of
services included in this RFP. SURS may negotiate additional provisions to the contract
awarded under this RFP.
SURS reserves the right to waive or permit cure of nonmaterial variances in a proposal
provided, however, such waiver will be based on SURS’ best interest. Nonmaterial variances
include, but are not limited to, the following: minor informalities that do not affect
responsiveness, variances that are merely a matter of form or format, variances that do not
change the relative standing of other bidders, variances that do not prejudice other bidders,
variances that do not change the meaning or scope of the RFP, or variances that do not reflect
a material change in the services. Failure to meet the minimum requirements or provide the
required information shall not be considered a nonmaterial variation that SURS can waive or
permit cure. In the event SURS waives or permits cure of nonmaterial variances, such a
waiver or cure will not modify the RFP requirements or excuse the bidder from full
compliance with RFP specifications or other RFP requirements if the responder is awarded a
contract. The determination of whether a particular matter constitutes a material or
nonmaterial variation from the RFP is within the sole discretion of SURS.
SURS reserves the right to amend any segment of the RFP prior to the announcement of
selected firms. In case of such amendment, all qualified responders will be afforded the
opportunity to revise their proposals to accommodate the RFP amendment.
There is no express or implied obligation for SURS to reimburse for any expenses incurred in
preparing proposals or other actions taken in response to this request.
F. Specific Proposal Contents
Any firm responding to this RFP must submit its proposal via e-mail in one electronic
document. A specific outline must be followed in order to facilitate SURS’ review and
evaluation of the responses received. A response to this RFP must include the following
sections in the order listed:
1. Transmittal Letter
2. Expressed Understanding of the Services Required
3. Responses to Attached Appendices (within length limitations noted)
G. Ex-parte Communications
Public Act 93-617, which became effective December 9, 2003, brought about new Illinois
ethics procedures. All “ex parte communications” concerning investment, rulemaking or
quasi-adjudicatory matters pending before the State agency must be documented and some
must be reported. An “ex parte communication” is any written or oral communication by any
person that imparts or requests material information or makes a material argument regarding
potential action concerning an investment, a rulemaking process, or a quasi-adjudicatory
matter. An ex parte communication does not include statements publicly made in a public
forum or communications among employees of the State agency.
An ex parte communication from an interested party or his or her official representative or
attorney to an employee or the agency must be memorialized and made a part of the record.
An “interested party” is a person or entity whose rights, privileges, or interests are the subject
of or are directly affected by an investment, regulatory or quasi-adjudicatory matter.
An ex parte communication other than that just described must be reported by the staff
member or Trustee immediately to the agency’s Ethics Officer. The communication
must be memorialized and made a part of the record. The communication must be filed
with the Executive Ethics Commission, accompanied by a memorandum from the ethics
H. Quiet Period Policy
The SURS Board of Trustees has established guidelines by which Board Members and staff
will communicate with prospective service providers during a search process. The Policy is
attached as Exhibit A.
V. SELECTION PROCESS
The selection process under this RFP will be as follows:
A. Non-Qualifying Proposals
The Evaluation Team (the Executive Director, Associate Executive Director, Chief
Investment Officer, General Counsel, Chief Financial Officer, and Director of Applications
Development & Research) will evaluate each Proposal to determine if it was submitted in
accordance with the requirements set forth in this RFP. All non-qualifying proposals will be
rejected at this time and the rejected proposing firms so notified.
B. Selection of Finalists
The remaining Proposals will be evaluated by the Evaluation Team. Responders may be
invited to participate in a due diligence interview with the Evaluation Team. Based on the
information provided in response to this criteria and information gained by due diligence, the
Evaluation Team may determine two or more firms to appear before the SURS Board of
Trustees to present on a selected firm’s capabilities. The final determination will be made by
the SURS Board of Trustees with the assistance of the Evaluation Team. The criteria used in
evaluating the proposals will include, but is not limited to, the following:
(i) Quality, conciseness, clarity and completeness of the proposal, including a
demonstrated understanding of SURS’ needs relative to the actuarial services referred to
in this RFP.
(ii) Relevant experience of the team identified and the firm as it relates primarily to
actuarial services for pension funds.
(iii) Suitability, appropriateness and specificity of the proposal’s description of the
services to be provided.
(iv) Fee proposals.
Appendix A: Questionnaire
A. Background of the consulting firm (2 page maximum):
(i) Briefly describe your firm’s background, history, and ownership structure,
including any parent, affiliated or subsidiary company, and any business partners.
(ii) Describe the services your firm provides and give the percentage of revenue
derived from actuarial services.
(iii) Provide an organizational chart of your firm and describe the relationship between
each component and your actuarial consulting group.
(iv) Within the past three years, have there been any significant developments in your
organization such as changes in ownership, restructuring, or personnel
reorganizations? Describe anticipated future significant changes in your
organization in the next five years?
(v) Give the address of your corporate office and indicate which office(s) will service
(vi) Identify any actuarial services you are unable to perform.
B. Consultants (1 page maximum):
(i) How many actuarial consultants does your firm have?
(ii) Discuss the ways you manage growth, including any limits to the client/consultant
C. Standards of conduct (2 page maximum):
(i) Does your firm have a written code of conduct or a set of standards for
professional behavior? If so, a) please attach the code or standards (does not
count against the page limit), and b) how are they monitored and enforced?
(ii) How are consultant’s recommendations to clients reviewed and monitored by
your organization? Does your firm adhere to a level of consistency in consultant
(iii) Within the last five years, has your organization or an officer or principal been
involved in litigation or other legal proceedings relating to your actuarial services
assignments? If so, please provide an explanation and indicate the current status
(iv) Has your firm ever been censured by any regulatory body? If so, please describe
D. Conflicts of Interest (3 page limit):
(i) Are there any potential conflict of interest issues your firm would have in
servicing SURS? If so, describe them.
(ii) How does your firm identify and manage conflicts of interest?
(iii) Have you or anyone in your firm provided in an amount greater than $25.00 any
gifts, travel and room expenses, entertainment or meals to any SURS Board
Member or staff during the past 12 months? If yes, please describe the amount of
the expense and what it was for.
(iv) Have you or anyone in your firm paid any fees, commissions, or payments of any
type to any third party (non-employee) in connection with this RFP? If so, please
identify the recipient and the amount paid.
(v) List and describe any professional relationship you have with the SURS plan
sponsor, any employers who pay into SURS or legislative oversight bodies during
the past three years.
E. Consulting Team (2 page maximum):
(i) Please provide contact information for each consultant that will be assigned to
SURS in a grid similar to this.
Name Address Business Business Email Address
(ii) Please describe the role of each consultant for this assignment.
(iii) Please describe your team’s experience with similar work performed for other
public retirement systems or corporate pension, particularly using projected unit
credit valuation methodologies.
(iv) State whether the individuals assigned to the work have any responsibilities other
than providing actuarial services, and if so, specify such responsibilities.
(v) Describe your firm’s backup procedures in the event that key personnel in this
assignment should leave the firm.
(vi) Describe how your firm controls the cost of services rendered for a client.
F. Actuarial Valuations (5 page maximum):
(i) Is your firm capable of performing actuarial valuations for a system the size of
(ii) Describe the approach you would follow to conduct an actuarial valuation of the
SURS pension plan.
(iii) Describe your approach to measuring funding status and funding progress in order
to facilitate the assessment of trends over several actuarial valuations with respect
to the overall solvency of SURS.
(iv) Describe your approach to assessing the current mandatory provisions of the
statutes relating to the actuarial valuations and recommending appropriate
changes in these requirements.
(v) Discuss the theory and methodology for the actuarial assumptions your firm
employs. How do you develop asset class assumptions?
(vi) Describe your firm’s approach to providing recommendations regarding the
amortization of unfunded liabilities.
(vii) Describe your approach to the development and maintenance of valuation
(viii) Describe the capabilities of your valuation system(s) and your computer hardware
(ix) Describe the tools, resources, and training you can make available to the SURS
staff so that they can model various scenarios.
G. Actuarial policies (1 page maximum):
(i) Describe your approach to the analysis of applicable legal parameters/restrictions
under which SURS must operate.
(ii) Describe your process for maintaining a continuous review of actuarial policies.
H. Reporting (1 page maximum):
(i) What period of time is required to prepare reports after fiscal year end (June 30)?
By when is raw data needed from SURS in order to prepare reports in that
(ii) Give a brief overview of the hardware and software systems used in the
production of actuarial reports.
I. Unique qualifications (2 page maximum):
(i) Describe how your actuarial consulting work is distinguished from that of your
(ii) Describe any services of your organization that may not be offered by other
(iii) Does your firm offer training of plan fiduciaries (trustees and some staff)? If so,
describe the type of training available and the qualifications of the individuals
assigned to conduct the training.
J. Insurance and liability (2 page maximum):
(i) Do you, without exception, require a limitation on liability in your contract? If
so, what is that required limitation? If not, will you waive a limitation on liability
in your contract with SURS?
(ii) 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
(iii) Describe your quality assurance procedures.
(iv) Describe your firm’s disaster recovery plan as it relates to the equipment,
software, and data tapes and personnel that would be used in providing the
services required by SURS.
K. Subcontracting (1 page maximum):
(i) Does your firm anticipate using the services of a subcontractor in fulfilling this
(ii) Describe what portions of the project might be assigned to the subcontractor.
L. Fees (1 page maximum):
(i) Please list your total annual fees for general duties, valuations, consultation and
advisory services as detailed in this RFP to be performed during the five year
contract period. There will be no additional reimbursement for travel,
communicating costs, computer charges, and other expenses incidental to the
contract. The total fee must be all-inclusive, no additional amounts will be
(ii) Please give hourly rates of compensation and estimated hours for each anticipated
project or task for the purpose of illustrating how the annual fee was determined.
M. Previous Clients
(i) Please provide three references who are clients for whom work similar to that
requested in this RFP has been performed.
(ii) Please list public sector clients who have terminated your actuarial relationship
during the past three years and their reasons for doing so. Please include their
names, titles and telephone numbers.
Appendix B. Biographies
Please include biographies for all consultants listed in your proposal. Indicate what year each
consultant joined your firm and describe his or her position, current responsibilities, areas of
expertise, experience, education, professional designations and memberships, and relevant
publications and presentations.
Appendix C. Annual Financial Report
Please attach your firm’s current Annual Financial Report.
Appendix D. Sample Contract or Agreement
Please attach a sample contract or agreement your firm uses for actuarial services.
Appendix E. Other Information (2 page maximum)
Please describe areas or processes, not included in the scope of this engagement that your firm
may examine in order to provide more complete and thorough services.
Provide any additional information that you believe to be relevant to the RFP and your capability
to provide the services requested.