Washington County Public SchoolsRFP # 2014-80

10435 Downsville PikeRecordkeeping and Investment Services

Hagerstown, MD 21740403(b) and 457(b) retirement plans

Technical Proposal/Questionnaire

Please answer all relevant questions to the best of your ability. Please do not leave any question unanswered, as that could deem your bid as non-responsive.

THE PHRASE "403(b) PLAN" HAS BEEN USED IN THIS DOCUMENT SOLELY FOR SIMPLICITY. PLEASE ANSWER ALL FOLLOWING SECTIONS FOR 403(b) EXPERIENCE AND 457(b) EXPERIENCE SEPARATELY.

Please let us know under which award scenarios you are responding:

Single vendor
Dual vendors
Three vendors
Four or more vendors

For the above scenarios, are your contracts considered:

Individual contracts
Group contracts

Which type of plan are you bidding?

403(b)
457(b)
Both
  1. General Information

A.Organization

  1. Please provide the following information regarding your company:
  2. Full name of company;
  3. Home office address;
  4. Local business address (if available);
  5. Brief overview of your company and history of your organization;
  6. Description of all parent/subsidiary/affiliate relationships;
  7. Please include an organizational chart of your retirement plan operations.
  1. Are there any public agreements to merge or sell your company or parts of your company?

☐Yes ☐No

  1. Is any portion of your services, including but not limited to recordkeeping services, subcontracted to a third-party provider? If yes, please identify the following information:
  2. Name of third party;
  3. History of the subcontractor’s organization (including date of entry into the benefits field);
  4. Length of contract;
  5. Flexibility to terminate contract (with or without cause);
  6. Current contingency plans in the event that subcontractor terminates services, is terminated, or is purchased.
  1. Please provide the following information regarding your employees:
  2. Number of individuals employed by your company;
  3. Number of individuals dedicated to the defined contribution market.
  1. Please identify your company’s ratings (A.M. Best, Fitch, Moody’s, and Standard & Poor’s) for each of the last 5 years. If your company is not rated or does not have an A.M. Best rating, please explain why not and provide a copy of your company’s financial statements. In addition:
  2. Please explain any upgrades or downgrades to your credit ratings that have occurred in the past 2 years;
  3. Have you been placed on watch list or outlook by any of the rating agencies? If yes, please explain the reason.

Credit Ratings
Year / Rating Agency
A.M. Best / Fitch / Moody / S&P
2014
2013
2012
2011
2010

B.Insurance

Note: If you are using subcontracted on-site representatives, please answer all of Section I.B, as it pertains to those representatives and their company as well as the TPA.

  1. Does your company maintain errors and omissions (“E&O”) coverage for both home office personnel and onsite representatives?
  1. What company provides your company’s E&O insurance?
  1. What is the maximum limit of E&O coverage per occurrence?
  1. What is the maximum limit of E&O coverage per representative?
  1. In the past 5 years, have there been any claims submitted to your errors & omissions insurance carrier? If yes, please describe.

☐Yes ☐No

  1. Does your company provide fidelity bond insurance? If no, please describe what type of insurance your company has to protect against employee theft.
  1. In the past 5 years, have there been any claims submitted to your fidelity bond insurance carrier? If yes, please describe.

☐Yes ☐No

C.Litigation

  1. Are you currently involved in any unresolved litigation regarding your defined contributions services? (Yes or No) Will this restrict, limit, or affect your ability to provide services to WCPS?

Any ☐Yes ☐No

Affect Services☐Yes ☐No

If you answered yes to either question, please explain.

  1. In the past five years, has your company had any of the following denied, revoked, or suspended: 1) a license to do business, 2) an agent/broker license, or 3) any other license? (Yes or No) Will this restrict, limit, or affect your ability to provide services to WCPS?

Any ☐Yes ☐No

Affect Services☐Yes ☐No

If you answered yes to either question, please explain.

  1. Has your company ever been involved in any settlements regarding its compliance services for failure to calculate or providing inaccurate calculations on any compliance limits? (Yes or No) Will this restrict, limit, or affect your ability to provide services to WCPS?

Any ☐Yes ☐No

Affect Services☐Yes ☐No

If you answered yes to either question, please explain.

  1. Has your company been cited by any state or federal regulators for violations of any laws or regulations? (Yes or No) Will this restrict, limit, or affect your ability to provide services to WCPS?

Any ☐Yes ☐No

Affect Services☐Yes ☐No

If you answered yes to either question, please explain.

  1. Has your company been investigated by the Department of Labor within the past 5 years? (Yes or No) Will this restrict, limit, or affect your ability to provide services to WCPS?

Any ☐Yes ☐No

Affect Services☐Yes ☐No

If you answered yes to either question, please explain.

  1. In your opinion, what are some of the largest fiduciary concerns K-12 plan sponsors are facing administering their 403(b) plans?

D.Experience & References

  1. What year did your company enter the 403(b) marketplace?
  1. How many unique 403(b) recordkeeping clients has your company gained and lost each year during the past 5 years? Please do not include: current clients who have added new plans, any clients gained/lost due to mergers or acquisitions, or the purchase of TPAs. In a given year, if the number of clients lost exceeds the number of clients gained, please explain. How many of these gains or losses have been K-12 school systems?

Total 403(b) Plans Administered
Year / Gained / Lost
2013
2012
2011
2010
2009
Total K-12 403(b) Plans Administered
Year / Gained / Lost
2013
2012
2011
2010
2009
  1. As of December 31, 2013, what is your company’s (not parent company):
  2. Total retirement plan assets under administration;
  3. Total defined contribution assets under administration;
  4. Total retirement plans under administration;
  5. Total retirement plan participants under administration.
  1. As of December 31, 2013, what is your company’s (not parent company):
  2. Total 403(b) assets under administration;
  3. Total 403(b) plans under administration;
  4. Under 500 employees;
  5. 500 - 1,000 employees
  6. Over 1,000 employees
  7. Total 403(b) participants under administration?
  1. As of December 31, 2013, what is your company’s (not parent company):
  2. Total K-12 403(b) assets under administration;
  3. Total K-12 403(b) plans under administration;
  4. Under 500 employees;
  5. 500 - 1,000 employees
  6. Over 1,000 employees
  7. Total K-12 403(b) participants under administration?
  8. Total number of single vendor K-12 plans
  9. Total number of dual vendor K-12 plans
  10. Total number of three vendor K-12 plans
  11. Total number of four vendor K-12 plans
  12. Total number of five vendor K-12 plans
  1. What is the size of your largest, smallest, median and average 403(b) recordkeeping accounts in terms of assets and participants?
  1. What is the size of your largest, smallest, median and average K-12 403(b) recordkeeping accounts in terms of assets and participants?
  1. How many 403(b) plans do you have who utilize your proposed recordkeeping and administration services?
  1. Please provide three 403(b) client references for plans which are currently utilizing your recordkeeping service and have similar demographics to WCPS in terms of expected cash flow, asset size, and participants. We will be checking all references. Please include names, mailing addresses, email addresses, and telephone numbers of key contact persons for each reference.
  1. As of December 31, 2013, what is your company’s (not parent company):
  2. Total 457(b) assets under administration;
  3. Total 457(b) plans under administration;
  4. Under 500 employees;
  5. 500 - 1,000 employees
  6. Over 1,000 employees
  7. Total 457(b) participants under administration?
  1. Recordkeeping and Administration

A.Auditor Report

  1. Please provide the following information regarding your SSAE 16 report:
  2. Date of the most recent independent quality control audit of your recordkeeping system;
  3. Name of auditing company;
  4. Total number of all exceptions found;
  5. Frequency of audits performed;
  6. Please provide a copy of auditor’s most recent SSAE 16 report, as well as their opinion letter.
  1. If exceptions were noted in the auditor’s report, please list them along with the corrective steps which your company has taken (please do not refer to attachments).
  1. Regarding testing criteria for the SSAE 16 report:
  2. How is testing criteria for the SSAE 16 determined?
  3. Who determines the test criteria?
  4. How many criteria were conducted?
  5. How many actual tests were conducted?

B.Systems Maintenance

Note: Please answer the following as it pertains to the recordkeeping system that will be used for WCPS.

  1. If an outside vendor provides your recordkeeping system, please identify the outside vendor and describe the arrangement, including terms and guarantees.
  1. Was the recordkeeping system developed internally, purchased, or leased from another provider?
  1. Does your record keeping system have a formal name?
  1. How long has your recordkeeping system been in place?
  1. Who has the ultimate responsibility/authority to make sure the system remains current with laws, regulations, client needs, etc?
  1. How many business analysts are employed by your firm?
  1. How many unique participants have been maintained on the proposed recordkeeping system each year over the past 5 years (2013, 2012, 2011, 2010, and 2009)?
  1. How many unique plans have been maintained on the proposed recordkeeping system each year over the past 5 years (2013, 2012, 2011, 2010, and 2009)?
  1. Does your recordkeeping system protect participant data? If yes, please describe the security protocols.
  1. Have your security protocols failed within the past 5 years? If so, please list the date and describe the security compromise.
  1. What has your firm budgeted for a recordkeeping system in 2014 and 2015?
  1. How much did you spend on your recordkeeping system over the past 3 years (2013, 2012, and 2011)?
  1. What makes your record keeping system and technology unique compared to your competitors?
  1. Where are your redundancy centers located?
  1. How often do you test your redundancy centers and are they tested for a full fail?
  1. In the next few years, how will the Plan Sponsor and Participant experience change based on your firm’s planned technological changes?

C.Internal Revenue Code Compliance

  1. Will your company prompt participants when they are eligible for age 50 catch-up elections? (Yes or No) If yes, please describe.

☐Yes ☐No

  1. Are there controls in place to ensure the maximum catch-up limits are not exceeded? If yes, please describe.
  1. Have these controls ever been unsuccessful? If yes, please explain.
  1. Will your company track the cumulative catch-up contributions? (Yes or No)

☐Yes ☐No

  1. Will your company automatically provide WCPS with a list of participants utilizing the catch-up provision?
  1. Do you routinely review plans for compliance with recently issued regulations or laws? If yes, will you provide guidance for changes to WCPS? Are there any fees associated with this service?

D.Remittance

  1. WCPS's current payroll provider is Lawson. Can your firm integrate with WCPS’s current payroll provider? Can your firm integrate with all commonly known providers?
  1. WCPS is in the process of changing their Financial and HRMS system. Would any additional fees exist if WCPS changed payroll providers?

E.Loan Feature

  1. Does your platform allow loans?
  1. Are paperless loans available?
  1. Will you approve loan requests?
  1. Will you process a loan?
  1. Describe the flexibility in your loan repayment processing.
  1. How do you handle delinquent and/or defaulted loans, including plan and participant notification?
  1. What responsibility does the Plan Sponsor retain for initial and ongoing loan servicing?
  1. What are the loan origination and maintenance fees?
  1. How are outstanding loans for both active and terminated employees handled?
  1. Can you provide a copy of the loan amortization schedule to WCPS?
  1. Are loans subject to IRC Code limitations?

F.Hardship Withdrawals

  1. Should a participant take a hardship withdrawal:
  2. Does your company automatically prohibit that participant from making future contributions over the next 6 months? If so, do you notify WCPS to stop payroll deductions before issuing the withdrawal?
  3. Please describe your process for updating WCPS on these participants. Can this be accomplished automatically?
  4. How does your system prevent participants from taking multiple hardship withdrawals?
  1. What responsibility does the Plan Sponsor retain for hardship withdrawals?

G.QDRO Feature

  1. Will youqualify DROs?If no, who is responsible for this function?
  1. Will you approve DROs? If no, who is responsible for this function?
  1. Will youprocess QDROs?If no, who is responsible for this function?
  1. Interactive Participant Services

A.Voice Response Unit (“VRU”)

  1. Do you offer voice response services?
  1. What is your VRU toll-free number?
  1. Can the VRU be activated by voice instruction, keystrokes on the telephone pad, or both?
  1. Describe the services available through your VRU.
  1. Describe how data is secured within the system (i.e., PIN, audit trail, confirmations).
  1. Describe the level of customization available within your VRU.
  1. What transactions cannot be performed through VRU?
  1. Can a participant elect to move from the VRU to a service representative?
  1. How often is the data on the VRU updated? How does the VRU interface with the recordkeeping system?

B.Administration Call Center

  1. Does your organization offer live administrative support? If yes, do you tape calls?
  1. Where is your call center located?
  1. How many call center representatives are currently employed?
  1. Please identify the toll-free number participants can call to reach a representative?
  1. What are the days and hours of availability for telephone account service representatives?
  1. What is your average performance for each of the past 5 years, starting with 2013 for:
  2. Response time (in seconds)
  3. Average length of call
  4. Percentage of calls requiring follow-up
  5. Number of calls
  6. Call abort rate
  7. Percentage of incoming calls totally handled via VRU versus toll-free live service center representative.
  8. Percentage of service requests handled via website versus call center and VRU.
  1. Do you offer phone services to Spanish speaking participants? Are additional languages available?If yes, please identify the languages which are readily available.
  1. Do you offer phone services to hearing-impaired participants? If no, how do these participants communicate with your administration call center?
  1. Can your firm provide any dedicated representative(s) for WCPS? If not, please explain how WCPS participants will be handled.
  1. Please describe security measures used in the Administrative Call Center to ensure caller identity.

C. Internet Capabilities

  1. Do you offer on-line access at both the plan sponsor and the participant level? If yes, please provide demo links and passwords.

Plan Sponsor ☐Yes ☐No

Participant ☐Yes ☐No

  1. What is the address of the participant website?
  1. Describe the account services and transaction capabilities available through your participant website.
  1. Do you have back-up procedures in the event your server goes down? Please explain.
  1. Are there any transactions that cannot be processed through your website?
  1. If a participant elects to move from the website to a call center representative, describe the interface between the website and the representative.
  1. Is all data on the website real-time? Is it also real-time with the recordkeeping system?
  1. Does your company have security protocols to protect employee data?

☐Yes ☐No

  1. Have your security protocols ever been compromised? If yes, what have you done to address this?

☐Yes ☐No

  1. The following types of transactions can be processed on your internet site (Yes or No):

a)Loan initialization;

b)Confirmation reports;

c)PIN resets;

d)Request prospectus;

e)Auto-rebalancing;

f)Transaction history data;

g)Deliver statements by email;

h)Online enrollment for new participants;

i)Balance Inquiries;

j)Contribution changes;

k)Beneficiary changes?

  1. Please describe your company’s rebalancing capabilities. How often can participants rebalance their accounts (i.e. daily, quarterly, semi-annually, and annually)? If the plan changes investment options, will participants need to re-select the option to rebalance?
  1. Does your firm offer a plan sponsor report card measuring the success of the plan?
  1. What are some of the benchmarks in the plan sponsor report card? Please provide examples.
  1. In your opinion, what are the questions that WCPS needs to be asking to determine if their plan is successful?

D. Interactive Participant Services

  1. Please provide a sample participant statement.
  1. Are participant statements available on the website?
  1. How many days after the end of the quarter are participant statements sent by mail? Are there additional costs for mailing statements?
  1. How many days after the end of the quarter are participant statements available on the website?
  1. Do you provide personalized rate-of-returns on your statements? On your website?
  1. What personalized rate-of-return time periods are reflected on the participant statements?
  1. What personalized rate-of-return time periods are available on the website?
  1. Do you provide participants with the ability to calculate the after-tax impact of different deduction sizes on their take-home pay?
  1. Communications

A.Case Management

  1. Please identify the external case manager (relationship manager) who will be assigned to work with WCPS staff. Please include their bio with related experience, including number of years employed with your company.
  1. To whom does the external case manager report? How often will this individual meet with the external case manager to review WCPS’s plan? Please include their bio with related experience, including number of years employed with your company.
  1. Please identify the internal case manager who will be assigned to work with WCPS staff. Please include their bio with related experience, including number of years employed with your company.
  1. What criteria did your firm use to determine that these individuals would serve as lead for WCPS?
  1. How many years of case manager experience do the proposed case managers each have?
  1. Please state the total number of cases, regardless of location or size, which are currently assigned to the proposed case managers? How many are public school system plans?
  1. Within the past 5 years, have there been any written complaints filed against any of the proposed case managers? If yes, please describe.
  1. Please state whether case managers are salaried or commission-based employees.
  1. Please describe the compensation and incentive packages for the case manager.
  1. Is the proposed case manager eligible to receive a bonus? Under what conditions?
  1. If the proposed case manager will be salary based for this assignment, are they assigned to any other cases where they are compensated on a commission basis? If yes, how many of these cases are assigned on a commission basis?
  1. How many cases are jointly shared between the proposed internal and external case managers? If applicable, how many years have they been working together?
  1. How often would your firm be willing to meet with WCPS to review the plan?
  1. Please provide a sample plan sponsor review report.
B.On-Site Representatives

Note: If you are using subcontracted on-site representatives, please answer all of Section IV.B as it pertains to those representatives and their company.