07_Offerors Questions Government Responses to RFQ_Mod 01 SF30.pdf

Offers must acknowledge receipt of this amendment prior to the hour and date specified in the solicitation or as amended, by one of the following methods:

(a) By completing items 8 and 15, and returning or (c) By separate letter or electronic communication which includes a reference to the solicitation and amendment numbers. FAILURE OF YOUR ACKNOWLEDGMENT TO BE RECEIVED AT THE PLACE DESIGNATED FOR THE RECEIPT OF OFFERS PRIOR TO THE HOUR AND DATE SPECIFIED MAY RESULT IN REJECTION OF YOUR OFFER. If by virtue of this amendment you desire to change an offer already submitted, such change may be made by letter or electronic communication, provided each letter or electronic communication makes reference to the solicitation and this amendment, and is received prior to the opening hour and date specified.

E. IMPORTANT: Contractor is not X_is required to sign this document and return 1 (one) copies to the issuing office.

AMENDMENT OF SOLICITATION/MODIFICATION OF CONTRACT 1. CONTRACT ID CODE

2. AMENDMENT/MODIFICATION NUMBER 3. EFFECTIVE DATE 4. REQUISITION/PURCHASE REQUISITION NUMBER 5. PROJECT NUMBER (If applicable)

7. ADMINISTERED BY (If other than Item 6) CODE

STANDARD FORM 30 (REV. 11/2016)

Prescribed by GSA FAR (48 CFR) 53.243

FACILITY CODE

9A. AMENDMENT OF SOLICITATION NUMBER

9B. DATED (SEE ITEM 11)

10A. MODIFICATION OF CONTRACT/ORDER NUMBER

10B. DATED (SEE ITEM 13)

11. THIS ITEM ONLY APPLIES TO AMENDMENTS OF SOLICITATIONS

The above numbered solicitation is amended as set forth in Item 14. The hour and date specified for receipt of Offers is extended. is not extended.

12. ACCOUNTING AND APPROPRIATION DATA (If required) copies of the amendment; (b) By acknowledging receipt of this amendment on each copy of the offer submitted;

13. THIS ITEM APPLIES ONLY TO MODIFICATIONS OF CONTRACTS/ORDERS. IT MODIFIES THE CONTRACT/ORDER NUMBER AS DESCRIBED IN ITEM 14.

CHECK ONE A. THIS CHANGE ORDER IS ISSUED PURSUANT TO: (Specify authority) THE CHANGES SET FORTH IN ITEM 14 ARE MADE IN THE CONTRACT ORDER NUMBER

IN ITEM 10A.

B. THE ABOVE NUMBERED CONTRACT/ORDER IS MODIFIED TO REFLECT THE ADMINISTRATIVE CHANGES (such as changes in paying office, appropriation data, etc.) SET FORTH IN ITEM 14, PURSUANT TO THE AUTHORITY OF FAR 43.103(b).

C. THIS SUPPLEMENTAL AGREEMENT IS ENTERED INTO PURSUANT TO AUTHORITY OF:

D. OTHER (Specify type of modification and authority)

Except as provided herein, all terms and conditions of the document referenced in Item 9A or 10A, as heretofore changed, remains unchanged and in full force and effect.

15C. DATE SIGNED

15A. NAME AND TITLE OF SIGNER (Type or print)

16C. DATE SIGNED

16A. NAME AND TITLE OF CONTRACTING OFFICER (Type or print)

14. DESCRIPTION OF AMENDMENT/MODIFICATION (Organized by UCF section headings, including solicitation/contract subject matter where feasible.)

PAGE OF PAGES

6. ISSUED BY CODE

8. NAME AND ADDRESS OF CONTRACTOR (Number, street, county, State and ZIP Code) (X)

CODE

15B. CONTRACTOR/OFFEROR

(Signature of person authorized to sign)

16B. UNITED STATES OF AMERICA

(Signature of Contracting Officer)

Previous edition unusable

The purpose of this modification is to publish Questions and Answers (see, below).

1 5

16PBGC20Q01040001 OCT 19, 2020 RQ-32-21-000003

PD

PENSION BENEFIT GUARANTY CORP

PROCUREMENT DEPARTMENT

1200 K ST NW

WASHINGTON DC 20005-4026

PRAD

PENSION BENEFIT GUARANTY CORP

Policy, Research & Analysis Department

1200 K ST NW, STE. 240

WASHINGTON DC 20005-4026

16PBGC20Q0104

SEP 24, 2020

See Schedule

Attachment Page

PAGE 2 OF 5 16PBGC20Q01040001

16PBGC20Q0104, Modification 01 Questions & Answers

No Solicitation Document or Attached Reference (or state "General")

Page No/ Paragraph

No Quoter's Question PBGC's Answer

RFQ Attachment B - STATEMENT OF OBJECTIVES (SOO)

1 Attachment B B.5 Please clarify the timing of this project. The RFQ states it is a 6-month project, but that the dates are April 2021 through October 2022, which is an eighteen-month period.

PBGC anticipates one (1) Base Period of 6-months. The period of performance shall read as follows: "Base Period: April 12, 2021 through October 11, 2021".

2 B.5 9 Is the end date of the Base Period intended to be October 11, 2021

(vs. October 11, 2022 as written)? Same as Answer No. 1 (above).

3 Attachment B B.2

Will the PBGC be looking for opinions on any whether additional inputs would improve the PIMS models, or should the operation of the model itself be considered out of scope, with commentary limited to already-existing inputs?

For example, we note that future Treasury Bond yields follow a random walk process in the current PIMS model. Would proposals to improve this process be in or out of scope?

To the extent that changes could be made to the data inputs to improve the model, that is in scope. Review of the model methodologies is out of scope.

4 Attachment B B.2 Will you be able to provide a current summary list of all inputs to the SE and ME PIMS models?

Yes - we have a list that we will provide at the start of the project.

See Attachment A for more detail information.

5 Solicitation No:

16PBGC20Q0104

7 / Section B.2 paragraph 1

It’s noted that pension plan data is derived from Form 5500 attachments. Does the PBGC have the ability to automate the download of data from 5500 attachments into a consistent and usable format, or must that be done manually?

A separate project is underway to evaluate data automation. That is out of scope for this project.

6 Solicitation No:

16PBGC20Q0104

7 / Section B.2 paragraph 1 and 11 / paragraph 2

For what types of modeling purposes will the PBGC use only a sample of multiemployer pension plans (per page 7, Section B.2 paragraph 1)?

What additional data is available for certain plans that is not available for all of them (per page 11, paragraph 2)? Is this additional data available only for “booked plans” (which are subject to confidential treatment requests)? If not, for which plans is the additional data available? What is a “booked plan”?

For some of the large plans, we have access to the actuarial valuation reports that contain more information than what is reported on the Schedule MB. A "booked" plan is a plan that is not yet terminated but is reflected in the liabilities for our financial statements. For booked plans, PBGC collects additional data, which is subject to confidential treatment requests under 29 CFR

4901.24. If appropriate, this data will be shared at the start of the project.

7 Solicitation No:

16PBGC20Q0104

7 – 8 / Section B.2

Will the PBGC provide access to the source data used for the most recent PIMS report for purposes of the peer review? Yes, as needed

8 Solicitation No:

16PBGC20Q0104 8 / B.2 #7

The scope states that “Data is also collected on the financial position of the employers sponsoring the insured defined benefit plans.” How and from what sources is that data collected and compiled for multiemployer plans?

That line item is only applicable to single-employer plans.

RFQ Attachment B / SOO Exhibit A - SE-PIMS Data Description

9 SOO Exhibit A Page 10 Can you provide detail on the sampling techniques currently used for the SE-PIMS model, to select the 500 plans modeled? Yes, will provide at project commencement.

10 SOO Exhibit A Page 10 Can you comment on any computing limitations that would preclude the PBGC from using the entire universe of SE plans (above a certain size threshold) rather than sampling?

There are computing limitations but evaluating those is out of scope. We are in the process of updating our technology.

RFQ Attachment B / SOO Exhibit B - ME-PIMS Data Description

11 SOO Exhibit B Page 11

For the ME-PIMS model, can you describe in more detail which metrics use the 25th, 50th and 75th percentiles where data is not available? How is it determined which of these quartiles applies? If there is more than one input, could more than one quartile apply?

Yes, will provide at project commencement.

12 Solicitation No:

16PBGC20Q0104

11 / SOO

Exhibit B

PPA zone status certifications have extensive financial information that is more up to date than information contained in Forms 5500.

Has data from these required filings been utilized for PIMS-ME modeling purposes? If not, why not?

Yes, where appropriate. Details to be provided at project commencement.

13 Exhibits A and B 10 and 11 Can you describe how you anticipate the contractor will access and review both (a) data the PBCC collects from public sources and (b) data that is accessed via non-public data sources (e.g., Compustat)?

The contractor will access the data through the PBGC network.

For more information, please see:

https://www.pbgc.gov/about/projections-report/pension-insurance-modeling-system

15 General N/A Are there any conditions or constraints on partnering with another individual or firm? No

16 General N/A With respect to the PBGC’s PIMS modernization effort, does the PBGC anticipate future changes in input data? If so, is that part of the current review?

This effort is focused on current PIMS.

14 Solicitation No:

16PBGC20Q0104

10 – 11 /

SOO

Exhibits A and B

To facilitate scope and fee development, can the PBGC please share the latest report providing detailed specifications on the methodology currently used for developing and applying the data used in the PIMS model? If available, we are looking for more detail beyond that outlined in SOO Exhibits A and B.

PAGE 3 OF 5 16PBGC20Q01040001

PIMS Data Input Table – Current and Potential Future Inputs 16PBGC20Q0104, Modification 01 Attachment A

October 2020

Data Inputs

Name Source Scope Description Usage in PIMS

1. Funding target

Schedule SB, line 3

All plans Active vested, active total, TV, & retiree funding liability

Used to calibrate plan benefits and liabilities calculated by PIMS

2. Participant count

Schedule SB, line 3

All plans Number of participants by active, TV, and retiree status

Active count used for reference. TV and retiree counts used to scale inactive census projections.

3. Funding target normal cost

Schedule SB, line 6

All plans Annual funding liability accrual for active benefits

Used to calibrate plan normal cost calculated by PIMS

4. Market value of assets

Schedule SB, line 2

All plans Market value of assets as of valuation date

Used for minimum funding calculations, and to calibrate partner firm scaling

5. Actuarial value of assets

Schedule SB, line 2

All plans Smoothed value of assets as of valuation date

Used for minimum funding calculations

6. Effective interest rate

Schedule SB, line 5

All plans Single effective interest rate producing same liability present value as funding segment rates

Not used directly – available for reference. Could be used to provide as a partial proxy for plan duration.

7. Funding standard carryover balance

Schedule SB, line 13a

All plans Beginning of year funding standard carryover balance available to satisfy minimum contribution requirements

Used for minimum funding calculations. Plan sponsor is assumed to use up credit balances prior to making cash contributions.

8. Prefunding balance

Schedule SB, line 13b

All plans Beginning of year prefunding balance available to satisfy minimum contribution requirements

Used for minimum funding calculations. Plan sponsor is assumed to use up credit balances prior to making cash contributions.

9. Active count age/service scatters

Schedule SB attachments

Tier 1 Plans

Active counts broken out into 5-year age/service buckets

Used as active census proxy.

Also used to generate TV and retiree census data profiles.

10. Active salary age/service scatters

Schedule SB attachments

Tier 1 Plans

Active salary averages broken out into 5-year age/service buckets

Used in conjunction with active age/service counts, to calculate approximate plan benefits

11. Cash balance account age/service scatters

Schedule SB attachments

Tier 1 Plans

Active cash balance average account balances broken out into 5-year age/service buckets

Used in conjunction with active age/service counts, to calculate approximate plan benefits

PAGE 4 OF 5 16PBGC20Q01040001

PIMS Data Input Table – Current and Potential Future Inputs 16PBGC20Q0104, Attachment A

October 2020

Data Inputs

Name Source Scope Description Usage in PIMS

12. Individual amortization base information

Schedule SB attachments

Tier 1 Plans

Schedule of amortization bases for prior years

Used for minimum funding calculations

13. Aggregate outstanding amortization balance

Schedule SB, line 32a

All plans Aggregated amortization balances for all years

Could be used for approximate minimum funding calculations for non-sample plans

14. Aggregate outstanding amortization installment

Schedule SB, line 32a

All plans Aggregated amortization installment amounts for all years

Could be used for approximate minimum funding calculations for non-sample plans

15. Asset allocations $ amounts

Schedule H lines 1a-1e

All plans Asset allocation categories:

noninterest-bearing cash, interest-bearing cash, US gov’t securities, corporate debt, corporate stocks, partnerships/joint venture interests, real estate, loans, etc.

Could be used to refine plan-specific expected asset return assumption, as well as to quantify asset risk profile

16. Asset allocation %s

Schedule R line 19a

All plans Asset allocation categories:

stock, investment-grade debt, high-yield debt, real estate, & other. Note that a potential concern is that sponsors frequently list a large amount of assets as “other”.

Could be used to refine plan-specific expected asset return assumption, as well as to quantify asset risk profile

17. Average duration of investment grade and high-yield debt

Schedule R line 19b-c

All plans Average duration of investment grade and high-yield debt, and duration measure (Effective, Macaulay, Modified, or other)

Could be used to refine plan-specific expected asset return assumption, as well as to quantify asset risk profile.

Additionally, can be used to assess and model LDI strategies.

18. Additional Asset Class Information

Not currently available.

Could be added to Form 5500 or Premium Filings.

All plans Additional asset class fields for derivative investment vehicles such as swaps or Treasury futures

If available, these fields could be used to capture interest rate exposure achieved through derivatives with leverage. Alternatively, could expand instructions on Form 5500 to specify that such investments should be included in duration calculations.

PAGE 5 OF 5 16PBGC20Q01040001

PIMS Data Input Table – Current and Potential Future Inputs 16PBGC20Q0104, Attachment A

October 2020

Data Inputs

Name Source Scope Description Usage in PIMS

19. PBGC

trusteed plan liability

Actuarial Services Division

(ASD)

PBGC-

trusteed plans

Plan liability for currently trusteed plans, from which cashflows are extrapolated

Not used directly in PIMS projection. Used to develop PBGC starting financial position in post-processing analysis.

20. PBGC SE

fund assets

PBGC

Annual Report

PBGC-

trusteed plans

Plan assets for SE plans currently trusteed and administered by PBGC

Not used directly in PIMS projection. Used to develop PBGC starting financial position in post-processing analysis.

21. Flat rate and variable rate premium amounts

Obtained from Financial Operations Department

(FOD)

All plans Aggregated flat and variable rate premiums collected for most recent year

Used to calibrate projected premium calculations

22. Partner firm count

User input Tier 1 plans

Number of partner firms created for a given plan (SE System Description 2-21). This methodology is a legacy PIMS parameter, and is not expected to be used for the transformed

SE PIMS.

Optional parameter to scale sample plan liabilities and assets in order to best represent the entire SE plan universe.

23. Business code

Form 5500 line 2d

All plans Plan sponsor business code, based on North American Industry Classification System (NAICS) codes

Could be used to develop projection results by industry, or to correlate with economy level projections for specific industry firm performance. Potentially useful for Technical Assistance requests.

24. Union/non-union indicator

Form 5500 Annual Return, Part I-C

All plans Indicator for whether plan is collectively bargained, for potential technical assistance analysis

Could be used to develop projection results by plan-type. Potentially useful for Technical Assistance requests. Problem could arise for plans with only a small proportion of union participants (would still have this box checked).