2223-04 RFP TR, FICA Alternative QA.pdf

QUESTIONS AND ANSWERS AND MODIFICATIONS

2223-04 RFP TR

Social Security Alternative Retirement Income Security Program for Other Personal Service (OPS) Employees

Addendum No. 1

This Addendum consists of the following sections:

A. Questions and Answers

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A. Questions and Answers

QUESTI

ON #

ATTACHMENT

IDENTIFIER

SECTION

NUMBER

SUB-SECTION

REFERENCE

ITEM

REFERENCE

PAGE

NUMBER QUESTION DEPARTMENT RESPONSE

1 N/A N/A N/A N/A N/A

Are the annual statements currently being distributed electronically or by traditional mail. If through traditional mail, would the plan be open to moving to electronic distribution only?

The current distribution method is mailing, with an opt-in for an electronic statement. Per the Request for Proposal, the Plan has a preference for electronic statements with an opt-out for a mailed statement.

2 N/A N/A N/A N/A N/A What is the current crediting rate for the Stable Value/ Fixed Account fund being offered in the plan?

The current crediting rate for the Fixed Account is 2.20%.

3 N/A N/A N/A N/A N/A What is the expense ratio for the Stable Value/Fixed Account fund being offered in the plan?

The Fixed Account has no stated expense ratio.

4 N/A N/A N/A N/A N/A What is the number of participants with a balance less than $1,000?

As of June 30, 2023, there are 9,958 Participants with an account balance less than $1,000.00.

5 N/A N/A N/A N/A N/A Please provide the amount of contributions to the plan in calendar year 2022

Contributions to the Plan in calendar year 2022 were $19,145,607.00.

6 N/A N/A N/A N/A N/A Please provide the amount of disbursements from the plan in calendar year 2022

Disbursements from the Plan in calendar year 2022 were $10,626,077.60.

7 N/A N/A N/A N/A N/A Please provide the current asset allocation as of 6/30/2023

See Exhibit 1 – Plan Assets to this Questions & Answers (Q&A) document, attached.

8 N/A 1

1.2 Program

Statistics Total Assets 4 of 21

Can you please provide a breakdown of the total assets by investment?

See Exhibit 1- Plan Assets to this Q&A document, attached.

9 N/A N/A N/A N/A N/A

Can you please identify any applicable market value adjustment (MVA), put period or installment liquidation that applies to any of the existing investment options at termination? If a market value adjustment applies, can you please provide the most recent MVA calculation? If the plan has multiple termination options available for one investment, please confirm (example: Fixed

Under the current Contract, “In case of Plan sponsor-directed or induced transfers from the Fixed-Interest Option to another investment option under the Plan, the Fixed-Interest Option may be surrendered for the Accumulation Value, under one of two alternatives. Under the standard payment option, the Accumulation

Interest Option can either be terminated at market value OR in X installments).

Value will be paid under a 5-year payout consisting of equal amount installments or a decreasing balance method. Upon election of the 5-year payout or decreasing balance method the company will declare a new rate of interest guaranteed for the ensuing twelve months. Thereafter, rates will be declared in advance and guaranteed for each subsequent twelve-month period. The rates are guaranteed to be no less than the lifetime minimum interest rate set forth in the contract. The second alternative is an immediate surrender of the contract after application of a Market Value Adjustment.”

There is no most recent Market Value Adjustment calculation available.

10 2 5 – Contractor

Responsibilities H –

Investments 2 – Fixed

Income Product

Regarding the liquidity statement "Fixed income product shall be fully liquid;" Is the State seeking full/immediate liquidity at termination at the participant level, the plan level, or both? Does the States existing Fixed income product include full/immediate liquidity at both the plan and participant level?

The State seeks full/immediate liquidity at termination at the Participant level and the Plan level.

The current agreement does not include full/immediate liquidity at the Participant and Plan level.

11 N/A N/A N/A N/A N/A Can you please provide the total number of self-directed option (SDO) accounts in the plan?

There are no self-directed option accounts in the Plan.

12 N/A N/A N/A N/A N/A

Can you please provide the total number of loans outstanding? Additionally, please identify how loan repayments are made (payroll deduct or ACH)

There are no loans outstanding.

13 N/A N/A N/A N/A N/A Can you please provide the $ amount of assets using managed account services?

There are no assets using managed account services.

14 N/A 1

1.2 Program

Statistics Number of Accounts

Of the approximately 20,885 inactive plan participants, can you please provide the number of these accounts with balances less than $1,000 eligible for automatic cash out in January 2024? Additionally, can you please provide the number of automatic cash outs processed at each eligible period of January and July for the years 2020-July 2023?

The current Contractor is expected to perform a cash out by January 2024 of approximately 6,602 accounts. The Plan performed automatic cash outs in 2019 (6,295), 2020 (4,559), and 2021 (3,630).

15 1

1.2 Program

Statistics Active

Accounts

Of the 7,661 Active plan participants, can you please provide the number of active accounts with a balance less than $1,000?

There are 2,356 active Plan Participants with a balance less than $1000.00

16 2 3 Program

Document N/A 3 of 17

Can you please provide a copy of the existing plan document?

See Exhibit 2 – Current FICA Plan Document, to this Q&A document, attached.

17 N/A 3 3.3.2 B.1.d Services 12 of 21 What % of total participant accounts received the most recent annual account statement electronically?

The most recent statement was received electronically by 99.11% of Participants.

18 N/A N/A N/A N/A N/A

Please provide the following annual participant transaction data for 2020-2022 and 1/1-6/30/2023:

o Distributions o Exchanges o Calls to recordkeeper o Enrollments

See Exhibit 3 – Transaction Data, to this Q&A document, attached.

19 2 5- Contractor

Responsibilities

C.

Communication and education

3 5 of 17

We request the following addition to the end of the requirement to meet the requirement:

"The State shall provide a census file to the Contractor that includes the Participant's termination date to initiate the 30 calendar day notice period."

The State is not agreeable to this change.

20 2 5- Contractor

Responsibilities

D. Phone Representative s 5 6 of 17

Nationwide requests that this item language/deliverable be modified to mirror the language used in our existing 457 contract with the State.

The State is not agreeable to this change.

21 2 6- Deliverables N/A Deliverable and

Performance Measure

"The Contractor shall submit a monthly call detail report as verification that all calls were recorded, and 75% of calls answered by customer service representatives for this Program within twenty (20) seconds, with no call being placed on hold or in a queue for more than thirty (30) seconds." Nationwide requests that this deliverable be modified to mirror the language used in our existing 457 contract with the State.

The State is not agreeable to this change.

22 2 6- Deliverables N/A

Program website deliverable and performance measure, description and acceptance criteria

Nationwide requests that this deliverable mirror the structure of our deliverable in our existing 457 contract with the State.

The State is not agreeable to this change.

23 2 6- Deliverables N/A

Description and Acceptance

Criteria, Financial

Consequences

"The Contractor shall provide a report by the 15th Business Day after the end of each month indicating the daily backup was performed as evidence of the provision of this deliverable." Nationwide requests removal of the description/acceptance criteria and financial consequence associated with this deliverable to align with our existing 457 contract with the State.

The State is not agreeable to this change.

24 2 6- Deliverables N/A Deliverable and

Performance Measure

"The Contractor shall identify the amount of the State’s total payroll tax savings in the preceding quarter and submit this information to the Department." Nationwide requests removal of this deliverable as stated.

Nationwide is open to discussing the deliverable with the State to help meet its needs. If possible, please provide an example of the report requested for review.

25 1 11- Termination N/A N/A 4 and 5 of 11

Nationwide requests that this contract term be replaced in its entirety with the following:

a. Either the Plan Sponsor or Nationwide may terminate the Agreement for any reason upon providing 120 days written notice to the other party.

b. In the event either party fails to perform any or all of its obligations as defined in the Agreement, the non-defaulting party shall give the defaulting party written notice, specifying the particulars of the default. If such default is not cured within sixty days from the date in which notice of default is given, the non-defaulting party may terminate the Agreement upon 60 days written notice to the defaulting party.

c. Provision of such written notice of termination by Plan Sponsor to Nationwide does not relieve the Plan Sponsor of any termination requirements that may be associated with specific investment options.

d. Plan Sponsor further acknowledges and agrees that the Plan is responsible for any investment product liquidation fees, if applicable, and that neither Nationwide nor any of its affiliates assumes liability for any such fees.

e. Upon the effective date of termination of this Agreement the following shall occur:

i. Nationwide will no longer accept contributions to the Plan except by agreement of the parties.

ii. Nationwide will:

1. Provide Plan Sponsor, or such other entity as the Plan Sponsor may designate in writing, with a copy of all participant records in an electronic format and within a time frame as mutually agreed upon between Nationwide and Plan Sponsor.

2. Transfer any periodic distribution amounts and schedules, continuing loan repayments, or other ongoing participant transactional activity to the Plan Sponsor, or such other entity as the Plan Sponsor may designate in writing, in accordance with the time frame agreed to by the parties for the delivery of participant records.

3. Transfer all Plan assets under its control to the Plan Sponsor or to such other entity as the Plan Sponsor may designate in writing in accordance with the funding arrangement terms. Nationwide agrees to provide a final accounting of all Plan assets for which Nationwide provides recordkeeping.

26 1

19- Intellectual Property & 20- Ownership of

Property

N/A N/A 6 and 7 of 11

Nationwide typically agrees to plan ownership of all plan data. However, reports generated by Nationwide often remain subject to regulatory examination and legal subpoena powers. By retaining ownership of such reports, Nationwide can remain cooperative and compliant with all legal and regulatory requirements without having to frequently obtain written permission from the plan sponsor. Nationwide is willing to consider a provision granting a license to the use of such reports.

27 1

23- Compliance with Federal, State and Local Laws

N/A N/A 7 and 8 of 11

Nationwide monitors all state and federal laws and regulations pertaining to retirement plans. However, it does not monitor local laws, ordinances and regulations. It agrees to comply with applicable local regulation to the extent the plan sponsor brings them to Nationwide's attention.

The State is not agreeable to this change.

28 2 8 -

Miscellaneous Contract Terms

A. Background Security Checks

N/A 14 of 17

Nationwide requests that this contract term be replaced in its entirety with the Background Security Checks language mutually agreed upon in our existing 457 contract with the State.

The State is not agreeable to this change.

29 2 8 -

Miscellaneous Contract Terms

F. Termination N/A 16 of 17

Nationwide requests that this contract term be replaced in its entirety with the language used in G20 above

The State is not agreeable to this change.

30 2 5- Contractor

Responsibilities A. General

Requirements 4 3 of 17

Requested Addition: Contractor requires execution of a separate agreement with Nationwide Trust Company to meet this requirement.

The State is not agreeable to this change.

31 4 13 - Risk of Loss N/A N/A 5 of 14

This section does not appear to be relevant to this Agreement. We would propose adding it to the list of non-applicable sections under Section D on pages 15-16 of Attachment 2.

The State is not agreeable to this change.

32 4 22 - Termination for Convenience

N/A N/A 8 of 14

Nationwide requests that this contract term be replaced with the following: "Either the Plan Sponsor or Nationwide may terminate the Agreement for any reason upon providing 120 days written notice to the other party"

2223-04 RFP TR

FICA Alternative

SECTION 3.

PROPOSAL

INSTRUCTIONS

3.3.2 Volume 2:

Technical Proposal -

(9) Describe and provide a timeline of a Participant’s purchase and sale of the investment products the Proposer is offering.

Could you please clarify what is expected in terms of the timeline?

This answer should provide detail on the application of asset change to a Participant record through any settlement type (contribution, sale/purchase, distribution, etc.), and through expected processes such as payroll and Participant generated requests by mail, email, website, or telephone.

Price Proposal

ATTACHMENT

ATTACHMENT

e. Tab E:

Investment Products

The most current SVIA

Crediting Rate Average +/- the stated spread in Factor 1

Attachment 3, p. 54 of the RFP refers to the “stated spread in Factor 1”. Please confirm what is the stated spread in Factor 1?

The Price Proposal contains Factor 1 that is an agreed spread from the Stable Value Investment Association average for General Account Products.

Price Proposal

ATTACHMENT

ATTACHMENT

Price Proposal

The most current SVIA

Crediting Rate Average +/- the stated spread in Factor 1

We would like to propose the following modifications to the contract language:

13. Events of Default.

Provided such failure is not the fault of the Department or outside the reasonable control of the Contractor, the following non-exclusive list of events, acts, or omissions, constitutes events of default:

a. The commitment of any deliverable material breach of this Contract by the Contractor, including failure to timely deliver a deliverable, discontinuance of the performance of the work, failure to resume work that has been discontinued within a reasonable time after notice to do so, abandonment of the Contract, or failure to perform the level of services required for a deliverable;

The State is not agreeable to this change.

Standard Terms and Conditions

ATTACHMENT 1

Section 13

Standard Terms and Conditions

Events of Default

We would like to propose the following modifications to the contract language:

14. Indemnification.

We would like to propose the following modifications to the contract language:

Corebridge Financial is willing to enter into a mutually agreed upon contract provision to indemnify the Plan Sponsor for loss arising from specified errors, including those arising from gross negligence or willful misconduct of Corebridge employees.

Standard Terms and Conditions

ATTACHMENT 1

Section 14

Standard Terms and Conditions

Indemnification Pages 5-

We would like to propose the following modifications to the contract language:

19. Intellectual Property.

The Plan Sponsor and Contractor each recognize that each has no right, title, interest, proprietary or otherwise in the intellectual property owned or licensed by the other, unless otherwise agreed upon by the parties in writing. Any deliverable developed or specifically created or manufactured under this Agreement shall be considered work made for hire, and Contractor shall transfer any ownership claim to the City, except to the extent the deliverable includes intellectual property owned by Contractor or another.

The State is not agreeable to this change.

Standard Terms and Conditions

ATTACHMENT 1

Section 19

Standard Terms and Conditions

Intellectual Property

Pages 6-

Please confirm that the State intends to award the RFP to one provider who will be the exclusive contract service provider for the

FICA Alternative program for the duration of the contract.

Yes, confirmed.

38 1 N/A N/A 21 7 Will the State entertain alternate default investment options (QDIA)?

No.

39 N/A N/A N/A N/A N/A What is your current provider's fee structure? The current Provider receives $55.00 per account annually.

40 N/A N/A N/A N/A N/A Of the 28,546 accounts, how many have a balance less than $1,000?

As of June 30, 2023, there are 9,958 Participants with an account balance less than $1000.00.