North Kansas City Schools

Request for Proposal

NORTH

KANSAS CITY

SCHOOLS

403 (b) and 457(b)

Plan Provider

Request for Proposal

July 20, 2009

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North Kansas City Schools

Request for Proposal

Table of Contents

Background...... 1

RFP Process and Instructions...... 2

Minimum Requirements...... 4

Questionnaire...... 5

North Kansas City Schools

Request for Proposal

Background

North Kansas City Schools (the District) is a nationally accredited school district known for innovation and excellence. The District serves 18,000 students who live in twelve municipalities across southern Clay County, Missouri and includes four high schools, five middle schools and 21 elementary schools in addition to an early childhood center and several alternative education programs

The District offers both a 403(b) and 457(b) plan to its 3,100 employees. Approximately 600 participants contribute$185,000 monthly to the programs - currently offered through 22 vendors and administered by CPI/CUNA Mutual.

The District invites proposals from qualified firms to provide administration, recordkeeping, education, enrollment, and investment services for its403(b) and 457(b) plans. The District is interested in selecting a single provider to represent the programs going forward. While it is anticipated new participants willbe offered only the option of the new provider, the District is evaluating the possibility of allowing current participants the option of remaining with their existing providers. The selected provider will be the only vendor asked to provide on-site education and employee consultation.

RFP Process and Instructions

This request for proposal (RFP) is an invitation by the District for providers to submit complete information regarding their programs and services related to administration, recordkeeping, investment, enrollment and education capabilities. RFP responses will be evaluated by a panel of District representatives to determine the relative strengths of potential providers for the plans. After evaluating responses, it is anticipated the finalists will be asked to make formal presentations to the panel.

All prospective providers will be afforded an opportunity to submit statements of qualifications in response to the request and will not be discriminated against on the basis of race, religion, color, national origin, age, sex, or disability in receiving consideration for an award of any contract entered into pursuant to the RFP.

Below is the anticipated timeline:

  • RFP released...... July 24, 2009
  • Proposals due from Respondents...... August 10, 2009
  • Finalists selected...... August 19, 2009
  • Finalist presentations...... week of August 24, 2009
  • Respondent selected...... September 1, 2009
  • Recommendation to Board of Education...... September 8, 2009
  • Plan implementation...... November 1, 2009

Statement of Interest & Questions

It is requestedthat all interested firms send a statement of interest and questions in writing by e-mail toJanet Thompson (at ) or John Dykes (at )no later than Friday, July 31, 2009. All Respondents sending questions or an expression of interest will receive responses to all questions by e-mail and any other addenda that may be released.

Proposal Submission

An original and 2 copies(plus an electronic copy) of the proposal must be submitted by 4:00 p.m. (CST) on Monday, August 10, 2009 to:

The Cottonwood Group

6900 College Boulevard, Suite 300

Overland Park, KS 66211

ATTN: Janet Thompson

Please place the questionnaire responses under separate cover from exhibits and attachments. Any proposal not received at the above address by the prescribed time and date will be returned unopened to the Respondent and will be considered non-responsive. Late proposals will not be accepted. Faxed proposals will not be accepted. Proposals must be submitted specifically as outlined and each request for information must be answered thoroughly and accurately.

Other Considerations

All responses, inquiries, and correspondence relating to or in reference to this RFP and all materials, charts, schedules, exhibits, and other documentation produced by Respondents will become property of the District and are subject to public disclosure. This RFP and the Respondent’s response will be incorporated into any contract by reference.

Issuance of this RFP and receipt of proposals does not commit the Districtto award a contract, and the District reserves the right to reject any and all proposals. The contract will be awarded to the qualified Respondent whose proposal is most advantageous to the Districtbased on an evaluation system developed by the District.The respondent’s overall capabilities related to administration, education and investments will be considered.

Minimum Requirements

Proposing firms must meet the following requirements:

  • The firm must have at least 10 years experience administering public sector plans and must administer a minimum of $3 billion dollars in assets in public sector defined contribution retirement plans.
  • On-site service representatives of the Respondent must have at least two years of experience providing on-site services for public sector retirement plans.
  • Representatives of the Respondentwill be forbidden to sell ancillary products (such as life insurance) to participants without written consent of the District. Participant data is the sole property ofthe District and may not be used in any way to market other products or be sold to other organizations without the express written consent of the District.
  • A wide spectrum of investment options must be available to participants, including a stable value fund that does not restrict participant withdrawals or transfers (with the exception of transfers to “competing” fixed income funds) and the asset classes requested in the investment section of the questionnaire.
  • There may be no plan level termination, withdrawal or transfer charges or restrictions (including market value adjustments) throughout the term of the contract. The only exceptions are a) restrictions related to a stable value fund, b) charges for early withdrawal from fixed maturity or other structured investment products (such as CDs) which have a clearly defined investment period that if shortened would jeopardize the strategy and benefits to longer-term investors, and c) redemption fees for short-term trading.
  • The Respondent must accept full responsibility for correcting errors it makes and they must be reported within a reasonable period of time. In the event a participant incurs a loss or a lost opportunity due to such an error, the Respondent shall adjust the participant’s account to the same level as if the processing error had not occurred.
  • The Respondent must comply with all components of this RFP. Unless otherwise noted in your cover letter, it is assumed that by submitting a response to this RFP, your response conforms to all specifications in every way. After finalist selection, the proposal of additional terms may not be considered.

Any proposal not meeting these specifications will not be considered.

Questionnaire

I.Organization

A.Provide the name of the proposing organization and its address, telephone and fax number. Provide an overview of the organization including how long you have been in business, how many 403(b)/457(b) plans do you administer and what percentage is this of your business.

B.Provide the same for your organization’s contact for this proposal including name, direct telephone number and email address.

  1. How many public-sector plans do you currently administer? What are the assets and number of participants in these public sector retirement plans?
  1. How many new 403(b)/457(b) plans did you add to your book of business this year, last year and how many clients left you this year, last year?
  1. Describe any regulatory censure or litigation involving the business of your firm with relation to its deferred compensation or defined contribution services in the past ten years.
  1. Are there any current or pending litigation or administrative actions against your firm? If yes, please describe them.
  1. Does your firm receive any commissions or other compensation from any of the mutual funds that are or will be contained in the plan and, if so, please explain what it is used for and/or if it used to reduce costs?
  1. Will your firm, its employees, and/or any affiliated or related entity be paid fees and/or commissions (including those from revenue-sharing and commission recapture) for its services to the plan from sources other than the plan? Please explain.
  1. Does your firm, its employees, and/or any affiliated or related entity derive any economic benefit from any investments entities, intermediaries or service Respondents that are or will be involved in the plan? Please explain.
  1. Please submit your privacy policy.
  1. Does the firm have Errors and Omissions Insurance? Directors Officers Liability Insurance? Fiduciary Liability Insurance for client plans? Who are the carriers and what are the limits?
  1. Detail your firm’s policies, procedures, data encryption, and technical measures to prevent unauthorized access or alteration, fraud, theft, misuse or physical damage to hardware, software, communications networks and data.
  1. Describe your company’s system back-up, security and disaster recovery procedures. Have procedures been tested? When did you last perform a full-scale disaster recovery test?
  1. Is your administrative staff “certified” by any organization and if so, what credentials do they have? Be specific as it relates to the plan.
  1. What quality control systems do you have in place? Please submit your organization’s SAS 70 report.

II.Participant Services

  1. Describe the educational program you will conduct once selected. Quantify your on-site personnel commitment.
  1. Describe the educational program that will be performed by your on-site service representatives:

1. Describe the individual consultations your representatives will provide on-site, including the software your representatives use to work with participants.

2. Describe the on-site group education you will provide on an on-going basis. What specific subjects are covered in your program?

3.Briefly describe how you encourage new employees to join the plan and how you assist participants nearing retirement.

4.How much time will representatives dedicate on-site to serve the plans? Define how many educational seminars and individual consultations will be provided annually.

5.Describe how your employees are compensated and whether they receive any additional compensation for the sale of annuities or life insurance to participants.

  1. Describe the educational features and transaction capabilities offered to public employees on your web site. Provide a sample account for us to review.
  1. Describe transactions and information available through call center representatives and through your voice response system. Provide the call abandon rate and average response time for the 12 months ending as of the end of the last quarter.
  1. Provide a sample quarterly statement. How many days after quarter-end are they mailed?
  1. Describe annuity and non-annuity disbursement options available to plan participants. How long does it take to mail a check to the participant? How long does it take to mail a check to another provider? Identify all participant-level or plan-level transfer or withdrawal restrictions.
  1. Describe how investment advice is made available to participants and identify any associated costs.
  1. Describe the transactions that can be implemented by employees on-line.
  1. Provide the URL for your web site and a test account for us to view all participant functions. The test account should be made available to us for at least 60 days.
  1. Describe the licenses held, special training received and other qualifications of call center personnel.
  1. What hours are call center representatives available?
  1. How do you measure participant satisfaction and the success of your educational programs?
  1. Describe how you handle minimum required distributions, QDROs/DROs, hardship/emergency withdrawal requests, and loan applications.

III.Plan Sponsor Services

  1. Describe how you interact with plan sponsors and how you minimize the plan sponsor’s workload.
  1. Are you able to provide common remitter services to plan’s with multiple vendor relationships? If so, please describe.
  1. What reports do you provide plan sponsors to assist with due diligence? Provide sample employer reports.
  1. What reports do you provide plan sponsors to assist with due diligence? Provide sample employer reports.
  1. Who will serve as the plan sponsor’s contact for daily questions and issues related to the administration of the plan? Please submit biographical information including educational and professional credentials.
  1. How many client accounts will the representative assigned to the plan be required to serve?
  1. Describe on-line services available to plan sponsors. Provide a sample account for review.

IV.Investment Management

  1. Please provide a comprehensive listing of all investment choices and tickers available to the plan sponsor.
  1. Do you require client plans to use internally managed funds from which to choose participant offerings?
  1. What limitations, if any, apply to either the number of fund options or the kinds of fund options the plan can make available?
  1. Propose one mutual fund, including ticker symbol for each of the investment categories listed below:

  • Money Market / Stable Value
  • Intermediate-Term Bond
  • Treasury Inflation Protected Bond
  • Balanced
  • Large Cap Growth
  • Large Cap Blend
  • Large Cap Value
  • Mid-Cap Blend
/
  • Mid-Cap Value
  • Small Cap Blend
  • Small Cap Value
  • International
  • Real Estate
  • Target Date Funds
  • Emerging Markets

  1. Describe the flexibility you will provide in selecting investments for the plan. If you are providing open access to your mutual fund platform, list the fund families available.
  1. Describe your proposed stable-value fund or equivalent investment option. Provide the rate being paid in the current month and the market-book ratio as of the end of the last quarter. Describe fully any plan-level or participant-level limits, restrictions or fees on transfers or withdrawals.
  1. Please provide a sample annual plan-level report showing plan demographics, activity and performance.
  1. Please provide a sample participant statement disclosing any revenue sharing or asset charges incurred by individual participants.
  1. Describe how you support the plan sponsor’s due diligence process. How do you report on mutual funds in the plan to the plan sponsor? How do you assist selection, monitoring, and, if necessary, replacement of funds?

V.Fees and Expenses

  1. Complete the following table to provide all asset-based fees and current expenses (as of the latest quarter end) that you and the funds you propose will assess.

Asset Category / Fund Name / Gross
Expense / Net Expense / All Other
Asset Fees* / Total Fees & Expenses** / Total Revenue to Respondent
Stable Value
Intermed Term Bond
Treas Infl Prot Bond
Asset Category / Fund Name / Gross
Expense / Net Expense / All Other
Asset Fees* / Total Fees & Expenses** / Total Revenue to Respondent
Large Cap Growth
Large Cap Blend
Large Cap Value
Mid Cap Blend
Mid Cap Value
Small Cap Blend
Small Cap Value
International
Real Estate
Emerging Markets
Target Date

* Administration fees, risk and mortality expense fees, etc. Do not include asset based fees for advice or managed accounts in this table.

  1. If expenses and/or revenue for the stable value fund is not disclosed, explain why.
  1. Describe any additional fees (per participant or other) you will charge.
  1. Do the fees and expenses described above cover the costs for the services noted below? If not, please note any separate expenses that are applicable for these services.
  2. Plan implementation.
  3. All plan recordkeeping aspects.
  4. Plan loan administration.
  5. QDRO processing.
  6. Preparation and mailing of quarterly participant benefit statements.
  7. Benefit distributions, including completion of tax reporting forms.
  8. Enrollment package preparation.
  9. All enrollment meetings..
  10. Ongoing educational sessions.
  11. Travel related to enrollment and educational meetings.
  12. Annual (or more frequent) plan level review with client.
  1. Other than items noted in the above question, are there services you could provide for which there are separate expense schedules?
  1. Do you offer document preparation and IRS filing services? Do you offer a plan prototype or custom designed document? Do you require that your document be used in conjunction with your recordkeeping and administration services? Please address any expense differences should we use your document or an individually designed plan prepared by outside counsel.

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