MACON-BIBB COUNTY, GEORGIA
MACON-BIBB GENERAL EMPLOYEES RETIREMENT SYSTEM
DEFINED BENEFIT PLAN
REQUEST FOR PROPOSAL (RFP)
RFP DUE DATE AND TIME: 4:00 PM August 8, 2014
RFP ISSUANCE DATE: July 15, 2014
DEPARTMENT CONTACT:
Dale M. Walker
County Manager
Macon – Bibb County
700 Poplar Street
Macon, GA 31202
For Investment Consulting Services
Table of Contents
Information Page Number
I. Background 1
II. Scope of Service 1
III. Minimum Eligibility Requirements 2
IV. Contact Information 3
V. Submission of Proposals 3
Request for Proposal
1. Proposal Contents 4
a. Company information 4
b. Investment Advice 5
c. Employees/Culture/Standards of Conduct 5
d. Similar Engagements with other retirement systems 6
e. Conflict of Interest 6
f. Investment Policy Development 7
g. Asset Allocation 7
h. Investment Manager Selection 8
i. Performance Measurement and Evaluation 8
j. Research 9
k. Client Education 9
l. References 10
m. Insurance and Liability 10
n. Litigation, Settlements, and Investigations 10
o. Form ADV 10
p. Proposed Contract 11
2. Submission Requirements- Cost Submittal 11
3. Miscellaneous 11
4. Representations and Warranties Addendum 12
Exhibits
A. Investment Policy Statement for Division A of the Macon Pension A
and Retirement System Dated October 17, 2012
B. Actuarial Valuation as of July 1, 2013 determines the contribution B
for the fiscal year 2014/2015
C. May 31, 2014 Internal Financial Statement C
D. Audited Financial Statements for six months ending December 31, 2013 D
E. Cost Analysis E
F. Scorecard F
20 | Page
The defined benefit plan for Macon-Bibb County, Georgia called the Macon-Bibb General Employees Retirement System Defined Benefit Plan, a tax-qualified defined benefit pension plan, is requesting respondents to provide “manager of managers” or bundled investment consulting services to its Board of Trustees (BOT).
I. Background
This retirement system was formerly for the Bibb County General Employees but on January 1, 2014 it was consolidated into Macon-Bibb County General Employees Retirement System. As such it is an active plan with all new employees hired after January 1, 2014 going into this system. As a governmental plan, the retirement system plan is subject to the applicable provisions of the Internal Revenue Code of 1986, as amended, and is not subject to the Employee Retirement Income Security Act of 1974, as amended. The retirement system assets are invested in accordance with its Statement of Investment Policy, Guidelines, and Objectives (“Investment Policy Statement”) (attached as Exhibit A). The retirement system is administered and managed by a Board of Trustees which is currently is the entire Macon-Bibb Commission comprised of seven (7) members. As of May 31, 2014 the retirement system assets had approximately $111 million. As of the December 31, 2013 actuarial report there are 744 active employees, 138 inactive employees and 337 retirees for a total of 1,219 participants.
II. Scope of Services
The scope of service contemplated by this Request for Proposal (“RFP”) includes, but is not limited to, the following:
(1) Review existing investment guidelines, policies, procedures and asset allocations, and making recommendations regarding the improvement of same in compliance of Federal and State of Georgia Statutes;
(2) Provide a “manager of managers” level of service to the retirement system for its investment managers and to make recommendations regarding the selection and termination of same (including mutual funds);
(3) Monitor the performance of retirement system investment managers and prepare performance reports (at least quarterly) for the BOT’s review and shall include, but not be limited to, the following:
(A) Performance reviews based on appropriate benchmark indices, contractual commitments and quartile performances in specific investment categories;
(B) Notifications of significant changes in key personnel or in the organizational structure of the investment management firms;
(C) Monitor an investment watch list for the plan;
(D) Provide an annual and quarterly commentary of the performance and outlook for the various markets; and
(E) Advise on the timing and frequency of rebalancing processes.
(4) Advise on state and federal legislation;
(5) Be available for monthly meetings with the BOT, and periodic meetings with the County Manager and/or Director of Finance and/or staff as requested;
(6) Perform strategic asset/liability review in concert and in support of the Plan’s Actuary in conducting asset/liability studies, Monte Carlo simulation, customized investment analysis and comprehensive reporting;
(7) Assist the retirement system in the search for additional or replacement service providers, including an in-depth analysis of candidate firms and the negotiation of fees for custody and safekeeping services;
(8) Communicate important and significant events/matters affecting the retirement system’s investment strategy and asset allocations;
(9) Advise the retirement system regarding its management or investment structure (active v. passive and investment style mixes); and
(10) Provide Trustee Education.
III. Minimum Eligibility Requirements
(1) Registered investment advisor under the Investment Company Act of 1940 and the Investment Advisors Act of 1940;
(2) Ability to comply with applicable ordinances and resolutions of Macon-Bibb County, the laws of the State of Georgia and the United States and agree to be (and accept the responsibilities of) investment fiduciaries as defined therein;
(4) Agree to disclose all conflicts of interest, sources of revenue and affiliations;
(5) Individual assigned to the BOT must have a minimum of five (5) total years of experience as the Primary Consultant for at least one public and/or private defined benefit pension fund. The term “Primary Consultant” shall refer to the lead, most-senior consultant assigned to regularly provide direct investment consulting services in a consulting relationship; and
(6) A minimum of ten (10) years of public sector investment consulting services.
IV. Contact Information
Inquiries concerning this RFP shall be made in writing to:
Board of Trustees
C/O County Manager
Macon – Bibb County
700 Poplar Street
Macon, GA 31202
V. Submission of Proposals
The purpose of this Section is to identify the information required by the RFP and to describe the procedures for submitting Submittal. All references herein to the “company” or “respondent” shall include the entity’s parent, subsidiaries and affiliates and, where appropriate, its employees, officers, directors and shareholders.
Please provide twenty (20) copies of the submittal in response to this RFP, one copy by electronically. Proposals must be received no later than 4 P.M., on August 15, 2014, (“Deadline”) at the following address:
Board of Trustees
Attention: County Manager
Macon – Bibb County
700 Poplar Street
Macon, GA 31202
A proposal cover letter/executive summary must be included and signed by a person authorized to legally bind the company. The letter must include:
· A description of the proposal;
· A statement that the proposal will remain valid one hundred twenty (120) days after August 15, 2014; and
· The differentiators of the firm demonstrating the reasons to be selected.
Submit a completed and fully executed REPRESENTATIONS AND WARRANTIES ADDENDUM attached with the RFP and proposal/cover letter. In the sole and absolute discretion of the BOT, the failure to submit an executed Addendum may disqualify an RFP from consideration.
Macon – Bibb County BOT reserves the right to:
· Reject any or all proposals for any reason;
· Request additional information from any or all firms submitting proposals;
· Conduct discussions with respondents for the purpose of clarification to assure a full understanding of, and responsiveness to the solicitation requirements;
· Negotiate modifications to the firm’s proposal prior to final award for the purpose of best and final offers.
1. PROPOSAL CONTENTS
Respondents shall address the following questions to the best of their ability. For convenience purposes, responses should be provided in the same order as asked.
(A) Company Information:
(i) Briefly describe the company’s background, history and ownership structure, including any parent, affiliated or subsidiary companies, and any business partners or joint ventures.
(ii) Provide information regarding the company’s current clients including number of clients, type of client, asset size and years as client.
(iii) Describe the services the company provides, and the percentage of the company’s total revenue derived from each type of service, including any parent, affiliated or subsidiary companies. Also include revenue percentages from the following: investment management organizations, brokerage activities, tax-exempt institutional investors, and high net-worth individuals.
(iv) Provide the total number of investment management clients (e.g., institutional clients and individual investors) served by the company, including the median asset size and the average relationship length.
(v) Describe any significant developments in the company (such as ownership, personnel, etc.) that have occurred within the past three (3) years. Describe any significant changes anticipated within the next five (5) years.
(vi) Describe any services offered by the company that may not be offered by competitors.
(B) Investment Advice
(i) When did your organization begin providing investment advisory services?
(ii) Is providing investment advisory services currently one of your organization’s principal line of business?
(iii) What percentage of your organization’s revenues in the last fiscal year was attributable to the investment advisory practice?
(C) Employees/Culture/Standards of Conduct/Etc.
(i) Provide a detailed list of the company’s professional staff, including the number of consultants, research analysts, and technical support personnel. The list should specify the names of the individuals who will be responsible for the retirement system’s account, and shall include a brief biography of each person (title, functions, academic credentials, professional affiliations, relevant work experience and number of years in the industry and with the company).
(ii) What is the average number of accounts handled per investment consultant?
(ii) Describe the company’s culture and code of ethics
(iii) Describe the turnover rate for investment consulting professionals over the past three (3) years and provide a brief explanation.
(iv) Describe the company’s written code of conduct and standards for professional behavior, including how such are monitored and enforced.
(v) Has the company adopted the Global Investment Professional Standard (GIPS) Code of Ethics and Standards? If so, how is employee compliance monitored. GIPS is the ethical standards to be used by investment managers for creating performance presentations that ensure fair representation and full disclosure of investment performance results.
(vi) How are the company’s consultants’ recommendations to clients reviewed and monitored? Does the company adhere to a level of consistency in consultant recommendations?
(D) Similar Engagements with Other Retirement Systems
(i) List the most significant company engagements performed within the last five (5) years (2008-2013) that include similar services contemplated by this RFP and that were performed for other similar organizations.
(E) Conflicts of Interest.
(i) Describe in detail any potential conflicts of interest the company may have in servicing this account.
(ii) Describe the company’s process for identifying and managing conflicts of interest.
(iii) Describe the company’s policy on soft dollar arrangements. These arrangements are where investment advisers are given certain benefits such as research from a broker-dealer in exchange for the advisor directing trades to that broker-dealer for the execution of a fee. Paying the commissions with direct payments is called hard dollars.
(iv) Are there any circumstances under which the company, or any employee, officer, director or shareholder of the company, receives compensation, finder’s fees or any other benefit from investment managers or third parties? If so, describe.
(v) Does the company act as a broker/dealer? If so, can the company assure the retirement system that such broker will not execute trades in any way related to the company’s consulting relationship with the retirement system?
(vi) Does the company serve as an investment manager for clients?
(vii) Does the company or the company’s vendor, if any, charge direct or indirect fees for investment managers to be included in the company’s investment manager database? If so, what are the fees and how does the company prevent conflicts of interest?
(F) Investment Policy Development
(i) Describe briefly the processes and tools your organization uses to help clients develop investment policies and objectives, including long-term asset allocations. How does your organization identify and understand BOT’s financial and investment objectives? In addition, comment on your organization’s process for recommending modifications to investment guidelines.
(ii) Include as Exhibit 1 a sample investment policy that your firm has developed for a public fund client similar to the Macon-Bibb General Employees Retirement System.
(G) Asset Allocation
(i) Is the company capable of performing asset/liability modeling studies?
(ii) Describe the theory and methodology of the asset allocation models utilized by the company. How does the company develop asset class assumptions? What are the advantages and disadvantages of the company’s models?
(iii) Describe how the company factors in the characteristics of plan liabilities in developing asset allocations.
(iv) Describe the company’s process for recommending an overall portfolio structure, specifically including its relationship to an investment policy statement and asset allocation model.
(v) Describe the company’s policy for recommending changes to an existing asset allocation in response to changes in the market environment. Does your organization assist clients in making shorter-term tactical asset allocation decisions? If yes, please describe the process
(vi) Describe the company’s position on the use of active versus passive investment management in the major asset classes.
(vii) Describe the company’s methodology for identifying and evaluating new investment opportunities.
(viii) Describe the company’s process for the development of asset class structures, investment objectives, and risk control policies (i.e., derivatives, securities lending, etc.).
(ix) Describe all asset classes with which the company has investment experience. Detail all asset classes with which the company has assisted other clients implement.
(x) Describe the company’s approach to the applicable legal parameters/restrictions under which the retirement system is required to operate.
(H) Investment Manager Selection
(i) How does the company utilize databases for investment manager searches? From whom does the company purchase its database? How many managers are in the database? Are non-United States based managers included?
(ii) What asset classes (public and private) does the company’s database cover?