Investment Consulting Bid Document: Government Employees Pension Fund(Gepf 01/2017)

INVESTMENT CONSULTING BID DOCUMENT: GOVERNMENT EMPLOYEES PENSION FUND(GEPF 01/2017)

Confidential

Government Employees

Pension Fund

(GEPF)

Request for proposal (RFP) to provide INVESTMENT CONSULTING SERVICES to theGEPF

INDEX

Section Topic Page

Terms of Reference 03 of 40 to 05 of 40

Evaluation Criteria 06 of 40 to 07 of 40

Guide to Responses 08 of 40 to 08 of 40

SBD Forms 09of 40 to 25 of 40

Special Conditions of Contract 26 of 40 to 28 of 40

General Conditions of Contract 29 of 40 to 40 of 40

Index to Administrative Annexure

Annexure Topic

ASBD Forms

B Special Conditions of Contract

C General Conditions of Contract

Terms of Reference

1.1.Overview

The Government Employees Pension Fund (GEPF) manages pensions on behalf of approximately 1.4 million active members and 423000 pensioners and their beneficiaries. As at 31 March 2016, the GEPF’s assets were R1.67 trillion.

The GEPF is a Defined Benefit Fund established in terms of the Government Employees Pension Law (GEP), 1996. The objective of the Fund is to meet its liabilities and other long term obligations.

The GEPF’s investment philosophy and objectives are outlined in the Fund’s Investment Policy Statement. The Fund’s investment policy is developed in consultation with the Minister of Finance, in line with Section 9(6) of the GEP Law. Theinvestment policy and philosophy are underpinned by the Fund’s statement of investment beliefs.

The investment strategy of the GEPF is designed using an extensive asset liability modelling exercise,taking into consideration the liabilities and other long term obligations of the Fund.

The Fund’s investment strategy is implemented by the Public Investment Corporation (PIC), according to the Investment Management Agreement entered into in 2007.

The Fund makes investments in local equities, local property, local bonds, local money market, Africa equities, global bonds and global equities. A portion of the assets are invested in accordance with the Fund’s developmental investment policy, whose objective is to earn good returns for members and pensioners of the Fund while supporting positive, long term economic, social and environmental outcomes for South Africa.

The Fund is a signatory to the PRI and seeks to apply responsible investment principles in all its investment decisions.

The GEPF is establishing a middle–office function whose responsibilities will include: ensuring data integrity, monitoring specific investment–related risks throughout the investment life cycle processes, and producing reports on the investment and financial performance of GEPF’s assets.

This document outlines the scope of work and terms of reference for the appointment of a service provider to render Investment Consulting Services to the GEPF.

1.2.Purpose

The Board of Trustees of the GEPF seeks to enlist a service provider to carry out Investment Consulting services forthe GEPF. Having completed an Asset Liability Modelling exercise, the GEPF has to review its investment policies, mandates and strategic asset allocation. The appointed Investment Consultant will provide investment consulting services to the GEPFon the following related projects:

Review of the Fund’s investment policies.
Recommendations on aligning the Fund’s policies to global best practice.
Ensuring consistency and coherence among the Fund’s policies.
Review of the Fund’s risk budgeting framework.
Review of the investment mandate in consultation with the GEPF and PIC.
Advising the Fund on implementing a robustperformance monitoring process.
Optimising the Fund’smiddle office function.
Scope of Work

The Investment Consultant must give recommendations to the GEPF after reviewing the Fund’s investment policies, mandates and investment processes.The recommended changes will be provided for approval by the Board of Trustees, through the Investment Committee.

The scope of work the service provider is expected to coverincludes but is not limited to the following:

Conduct a review of the existing Investment Policy Statement.
Develop a valuation policy for listed investments.
Review the existing valuation policy for unlisted investments.
Conduct a review of the Fund’s Responsible Investing and Developmental Investing policies.
Conduct a review of the Fund’s investment mandates.
Conduct a review of the risk budgeting framework.
Conduct a review ofinvestment performance monitoring systems and processes.
Provide recommendations onthe Fund’smiddle office capacity:

Asset valuation processes and systems.
Producing investment reports.
Enhancing financial performance monitoring systems and processes.
Enhancing internal controls.
Ensuring data integrity.

Advise on any developments in the investment industry that may have an impact on the GEPF.
Make presentations to theBoard of Trustees and committee meetingsas and when required.

1.4.Deliverables

The key deliverables and outputs expected from the service provider are as follows:

Updated investment agreements and policies, i.e.:
Investment Policy Statement.
Investment management agreement(s).
Valuation policies for listed and unlisted investments.
Developmental Investment policies.
Responsible Investing policies.
Policies and agreements aligned with the Fund’s investment beliefs andrisk appetite statements.
Enhanced risk budgeting framework.
Recommendations on middle office capacity:
Enhanced performance monitoring systems and processes.
Enhanced investment accounting and reporting.

Advice on any developments in the industry that may have an impact on the GEPF.
Attendance of Board meetings as and when required.

The service provider may be required to provide support to the GEPF during any consultation process with its major stakeholders.

All GEPF-related documents produced must be delivered in an editable softcopy version utilising software agreed to by the GEPF.

1.5.Duration of Appointment

Subject to completion of the above mentioned deliverables.

1.6.Fees

The GEPF and the serviceprovider will agree on the fee structure before commencement of the exercise. The agreement will consider (but may not be limited to):

The standard fee structures for similar investment consulting services.
Out of pocket expenses including travelling and/ or overheads.
All fees quoted must include VAT.

Contractual Obligations

Acontract will be entered into between GEPF and the service provider.
The service provider will be required to provide support to the GEPF during the consultation process with the GEPF’sstakeholders for the approval of the updated investment agreements and policies.
No other contract relating to the services of the GEPF will be entered into between the Service Provider and any third party unless such contract is approved by the GEPF.
Payment will be made within 30 days on presentation of billing documents as agreed and based on meeting all deliverables and outputs as contained in this Terms of Reference and as per the contractual agreement entered into by the parties.

Evaluation Criteria

The service provider should render investment consulting services with the highest level of skill, integrity and professional competence. Responses to this RFP will be evaluated based upon the three stage criteria mentioned below.

Stage one of the evaluation will comprise of the compliance checks referred to in this document under Special Conditions of Contract prior to determining the functionality score.

2.1.Evaluation Criteria

Item No. / Evaluation Criteria Item – Stage One :
Administrative Compliance
A /

Include aSARS certificate/pin number/original tax clearance certificate.
All compulsory standard bidding documents have been properly completed. (SBD documents as attached).
Containstechnical/functional proposal.
Contains apricing proposal.These should be in line with the structure laid out in SDB 3.1 in order to facilitate price comparison.
Attendance of the compulsory briefing session.
A joint venture agreement in the event of a joint venture proposal.

FAILURE TO COMPLY WITH ANY OF THE ABOVE ADMINISTRATIVE REQUIIREMENTS WILL RENDER YOUR BID NOT RESPONSIVE AND IT WILL BE DISQUALIFIED.
Item No. / Evaluation Criteria Item – Stage Two :

B

/ Functionality / 100
At least 5years company experience in investment consulting. / 20
Understanding of the GEPF requirements. / 10
Relevant skill – qualifications and CV’s. / 20
Relevant knowledge and experience of the pension fund industry. / 20
Knowledge of the public sector. / 10
Soundness of the proposed approach, planned methodology and proposed activities. / 20
NB: Minimum qualification of 60% on functionality
Item No. / *Evaluation Criteria Item – Stage Three : / Weight

C

/ Price / 70
BBBEE status level / 30
Total / 100

*The bidder who attains the highest score on price and BBBEE will be chosen. There will be a due diligence preceding the final selection of a service provider. A successful bidder will be chosen based on meeting stage one of the evaluation; attaining the highest score on price and BBBEE, the outcome of the due diligence process and the risk assessment.

2.2.Enquiries

Enquiries must be submitted on or before 23 March2017 and responses will be sent to all bidders by the close of the business day on 28 March 2017.

Technical enquiries:

Fikile Mbhokota

Investment Manager

Email:

General enquiries:

William Ramoroka

Assistant Manager: Demand & Acquisition:GPAA

E-mail:

Guide to Responses

Administrative Compliance

Include aSARS certificate/pin number/original tax clearance certificate.

All compulsory standard bidding documents have been properly completed (SBD documents).
Contains technical/functional proposals.
Containspricing proposals.
Proof of attendance of compulsory briefing session.

FAILURE TO COMPLY WITH ANY OF THE ABOVE ADMINISTRATIVE REQUIREMENTS WILL RENDER YOUR BID NOT RESPONSIVE AND IT WILL BE DISQUALIFIED.

Functionality:

Relevant experience in investment consulting.

At least 5 years company experience in providing investment consulting services.
Broad and in-depth experience with pension fund investments.
Proof of appointment and/or reference letters from pension fund clients.Bidders are required to submit reference letters from three similar audited clients in the pension fund industry attesting to excellence of investment consulting services rendered.

Understanding of the GEPF requirements.

Bidders must demonstrate their understanding of the GEPF requirements.
Understanding the RFP and interpreting it correctly.

Relevant skill – qualifications and CVs

Bidders must demonstrate skill in the investment consulting industry.
Qualifications, skills, relevant expertise and experience of the proposed consulting team.
The structure and composition of the proposed team.
Qualifications and CVs of the proposed team leader(s).

Knowledge and experience of the pensionfund industry

At least 5 years’ experience and knowledge of the pension fund industry.
A one-pager highlighting recent trends and challenges, including international trends affecting pension funds.
Bidders must demonstrate knowledge of defined benefit funds.

Knowledge and experience of the public sector.

The public sector differs from the private sector in many respects. Knowledge and experience in working with the stakeholders of a public sector institution is critical.
Points will be awarded per reference, up to a maximum of 3.

Soundness of the proposed approach, planned methodology and proposed activities.

The service provider must submit a proposed project plan taking into account the key deliverables outlined under Section 1.4 above.
Clear and understandable communication to the client. Clear and simple communication is important in ensuring that proper decisions are made and that information is shared with the Trustees in an accessible and informative manner.
Detailed approach and methodology in line with the scope of work.

Annexure A

(GEPF)

SCM

Standard Bid Document

SBD1

INVITATION TO BID

YOU ARE HEREBY INVITED TO BID FOR REQUIREMENTS OF GOVERNMENT EMPLOYEE PENSION FUND (GEPF)

BID NUMBER: GEPF 01/2017CLOSINGDATE:04 April 2017

CLOSING TIME: 12:00 pm

DESCRIPTION:Provide Investment Consulting Services

THE SUCCESSFUL BIDDER WILL BE REQUIRED TO FILL IN AND SIGN A WRITTEN CONTRACT

BID DOCUMENTS MUST BE DEPOSITED IN THE BID BOX SITUATED AT:

GOVERNMENT PENSIONS ADMINISTRATION AGENCY (GPAA)

34 Hamilton Street

Arcadia

Pretoria

ADDRESSED TO:

The Principal Executive Officer: GEPF

Bidders should ensure that bids are delivered timeously to the correct address. If the bid is late, it will not be accepted for consideration.The bid box is open 8 hours a day between 08:00 to 16:30, Mondays to Fridays.

ALL BIDS MUST BE SUBMITTED WITH THE STANDARD FORMS – (NOT TO BE RE-TYPED)

THIS BID IS SUBJECT TO THE GENERAL CONDITIONS OF CONTRACT (GCC) AND, IF APPLICABLE, ANY OTHER SPECIAL CONDITIONS OF CONTRACT

THE FOLLOWING PARTICULARS MUST BE FURNISHED (FAILURE TO DO SO MAY RESULT IN THE BID BEING DISQUALIFIED) ALL STANADARD BIDDING DOCUMENT AS ATTACHED

NAMEOF BIDDER……………………………………………………………………………………………….....

POSTAL ADDRESS…………………………………………………………………………………………………………....

STREET ADDRESS…………………………………………………………………………………………………………....

TELEPHONE NUMBER CODE……………NUMBER……………………………………………......

CELLPHONE NUMBER…………………………………………………………………………………………

FACSIMILE NUMBERCODE ………… NUMBER…………………………………......

VAT REGISTRATION NUMBER …………………………………………………………………………......

HAS A TAX CLEARANCE CERTIFICATE BEEN SUBMITTED (SBD2)?

YES/NO

SIGNATURE OF BIDDER ……………………………………………………......

DATE……………………………………………………......

CAPACITY UNDER WHICH THIS BID IS SIGNED……………………………………………......

SBD3.1

PRICING SCHEDULE – FIRM PRICES

NOTE:ONLY FIRM PRICES WILL BE ACCEPTED. NON-FIRM PRICES (INCLUDING PRICES SUBJECT TO RATES OF EXCHANGE VARIATIONS) WILL NOT BE CONSIDERED

IN CASES WHERE DIFFERENT DELIVERY POINTS INFLUENCE THE PRICING, A SEPARATE PRICING SCHEDULE MUST BE SUBMITTED FOR EACH DELIVERY POINT

Name of bidder…...... Bid number:GEPF01/2017
Closing Time 12:00 pm on Monday,04 April 2017.

OFFER TO BE VALID FOR120DAYS FROM THE CLOSING DATE OF BID.

PRICES MUST BE QUOTED AS A DETAILED FEE STRUCTUREIN THE FOLLOWING FORMAT:

PRICING SCHEDULE A:
Description of services during contract period
Review of and recommendations on the Fund’s investment policies and mandates, which are broadly:

Investment Policy Statement.
Investment management agreement(s).
Valuation policies for listed and unlisted investments.
Developmental Investment policies.
Responsible Investing policies.

/ Price (VAT included)
R
Developing the Fund’s risk budgeting framework / R
Advising the Fund on implementing a robust performance monitoring process and middle office function. / R
Consultation with the Fund’s investment manager andother stakeholders (assume 20 hours). / R
A total price for eight (8) Board of Trustee and eight (8) Investment Committee meetings. / R
Attendance of each meeting by the service provider can be assumed to be for twohours. / R

Workshops with committee members

/ R

Preliminary reports to GEPF Management.

/ R

Presentations and reports for the GEPF Investment Committee.

/ R

Final reports to the GEPF Board of Trustees.
Final documents.

/ R
Out of pocket expenses (please provide total breakdown) / R
GRAND TOTAL (VAT inclusive)

PRICING SCHEDULE B:

A rate split into: / Hourly rate (Rands) / Daily Rate (Rands)

Senior Consultant

/ R / R

Consultant

/ R / R

An assistant/analyst

/ R / R
PRICING SCHEDULE C: / Rands
A maximum fixed price based on the total estimated time for the completion of all phases and including all expenses over the term of the appointment. / R
Any other fees not included above / R
GRAND TOTAL / R

All prices must be in South African Rands (ZAR) including VAT.

Required by:GPAA

At:34 Hamilton Street

Arcadia

Pretoria

SBD 4

DECLARATION OF INTEREST

1.Any legal person, including persons employed by the state¹, or persons having a kinship with persons employed by the state, including a blood relationship, may make an offer or offers in terms of this invitation to bid (includes a price quotation, advertised competitive bid, limited bid or proposal). In view of possible allegations of favouritism, should the resulting bid, or part thereof, be awarded to persons employed by the state, or to persons connected with or related to them, it is required that the bidder or his/her authorised representative declare his/her positionin relation to the evaluating/adjudicating authority where-

-the bidder is employed by the state; and/or

-the legal person on whose behalf the bidding document is signed, has a relationship with persons/a person who are/is involved in the evaluation and or adjudication of the bid(s), or where it is known that such a relationship exists between the person or persons for or on whose behalf the declarant acts and persons who are involved with the evaluation and or adjudication of the bid.

2.In order to give effect to the above, the following questionnaire must be completed and submitted with the bid.

2.1Full Name of bidder or his or her representative: …………………………………………………

2.2Identity Number: ………………………………………………………………………………………

2.3Position occupied in the Company (director, trustee, shareholder²): ……………………………

2.4Company Registration Number: ………………………………………………………………………

2.5Tax Reference Number: ………………………………………………………………………………

2.6VAT Registration Number: ……………………………………………………………………………

2.6.1The names of all directors / trustees / shareholders / members, their individual identity numbers, tax reference numbers and, if applicable, employee / Persalnumbers must be indicated in paragraph 3 below.

¹“State” means –

(a)any national or provincial department, national or provincial public entity or constitutional institution within the meaning of the Public Finance Management Act, 1999 (Act No. 1 of 1999);

(b)any municipality or municipal entity;

(c)provincial legislature;

(d)national Assembly or the national Council of provinces; or

(e)Parliament.

²”Shareholder” means a person who owns shares in the company and is actively involved in the management of the enterprise or business and exercises control over the enterprise.

2.7Are you or any person connected with the bidder YES / NO

presentlyemployed by the state?

2.7.1If so, furnish the following particulars:

Name of person / director / trustee / shareholder/ member: ……....………………………

Name of state institution at which you or the person

connected to the bidder is employed : ………………………………………

Position occupied in the state institution: ……………………………

Any other particulars:

………………………………………………………………

2.7.2If you are presently employed by the state, did you obtainYES / NO

the appropriate authority to undertake remunerative

work outside employment in the public sector?

2.7.2.1If yes, did you attach proof of such authority to the bidYES / NO

document?

(Note: Failure to submit proof of such authority, where

applicable, may result in the disqualification of the bid.

2.7.2.2If no, furnish reasons for non-submission of such proof:

…………………………………………………………………….

2.8Did you or your spouse, or any of the company’s directors/ YES / NO

trustees / shareholders/ members or their spouses conduct

businesswith the state in the previous twelve months?

2.8.1If so, furnish particulars:

…………………………………………………………………..