Actuarial Consulting Services RFP.pdf

STATE OF MARYLAND

MARYLAND STATE RETIREMENT AGENCY (SRA)

REQUEST FOR PROPOSALS (RFP)

ACTUARIAL CONSULTING SERVICES

RFP NUMBER BPM055357

ISSUE DATE: JUNE 5, 2026

A Prospective Offeror that has received this document from a source other than eMarylandMarketplace Advantage (eMMA) https://procurement.maryland.gov should register on eMMA https://emma.maryland.gov/

NOTICE TO BIDDERS

SMALL BUSINESS PREFERENCE PROCUREMENT

THIS PROCUREMENT HAS BEEN DESIGNATED FOR A SMALL BUSINESS PREFERENCE

UNDER COMAR 21.11.01.05. THE PROCUREMENT AGENCY WILL ACCEPT THE MOST

FAVORABLE RESPONSIVE BID FROM A RESPONSIBLE SMALL BUSINESS (COMAR

21.01.02.01B(80)) IF THE BID OF THE SMALL BUSINESS DOES NOT EXCEED THE MOST

FAVORABLE RESPONSIVE BID RECEIVED FROM A RESPONSIBLE BIDDER WHO IS NOT A

SMALL BUSINESS BY: (1) MORE THAN 5 PERCENT; (2) MORE THAN 7% FOR A VETERAN-

OWNED SMALL BUSINESS; (3) MORE THAN 8% FOR A DISABLED-VETERAN-OWNED

SMALL BUSINESS; OR (4) THE PERCENTAGE OTHERWISE IDENTIFIED IN THE

SOLICITATION AS THE SMALL BUSINESS PREFERENCE.

MINORITY BUSINESS ENTERPRISES ARE ENCOURAGED TO RESPOND TO THIS

SOLICITATION.

https://procurement.maryland.gov/ https://emma.maryland.gov/

Actuarial Consulting Services Solicitation #: BPM055357

RFP Document

RFP for the Maryland State Retirement Agency Page 2 of 91

STATE OF MARYLAND

MARYLAND STATE RETIREMENT AGENCY (SRA)

KEY INFORMATION SUMMARY SHEET

Request for Proposals Services - Actuarial Consulting Services

Solicitation Number: BPM055357

RFP Issue Date: June 5, 2026

RFP Issuing Office: Maryland State Retirement Agency (SRA or the "Agency")

Procurement Officer: Jane Noble 120 East Baltimore Street Baltimore, MD 21202

Email:

Phone Number:

jnoble@sra.state.md.us 410-625-5660

Proposals are to be sent to:

Submit on emma.maryland.gov under Solicitation Number BPM055357 To submit a proposal, offerors must first register on emma.maryland.gov.

We recommend registering in advance to become acquainted with the site.

No Bid/Proposal Notice Feedback Form

*If you are not submitting a proposal for this solicitation, submit Attachment 1 with your reasons why.

Pre-Proposal Conference:

June 16, 2026, at 11:00AM Local Time Microsoft Teams meeting Join:

https://teams.microsoft.com/meet/2488914705792?p=zkCPEjyN7DtLhB MQcI Meeting ID: 248 891 470 579 2 Passcode: db65Zx2z Dial in by phone: +1 443-709-8970,,810685759# See Section 4.3 for additional details.

See Attachment 2 to RSVP by June 17, 2026, by 5:00pm to Attend

Questions Due Date and Time:

June 23, 2026, at 5:00PM Local Time https://teams.microsoft.com/meet/2488914705792?p=zkCPEjyN7DtLhBMQcI https://teams.microsoft.com/meet/2488914705792?p=zkCPEjyN7DtLhBMQcI tel:+14437098970,,810685759

RFP for the Maryland State Retirement Agency Page 3 of 91

Proposal Due (Closing) Date and Time:

June 29, 2026, at 5:00PM Local Time Local Time Offerors are reminded that a completed Feedback Form is requested if a no-bid/proposal decision is made (see Attachment 1 - No Bid Notice/Vendor Feedback Form).

MBE Subcontracting Goal:

Not Applicable

VSBE Subcontracting Goal:

Not Applicable

Procurement Method: A Contract will be awarded in accordance with the Competitive Sealed Proposals method under COMAR 21.05.03.

Multiple or Alternate Bids:

Multiple or alternate Proposals will not be accepted.

Contract Type: Firm Fixed Price

Contract Duration: Five (5) year base period, with up to four (4) additional 1-year option periods.

Primary Place of Performance:

To Be Determined

SBR Designation: No

Federal Funding: No

RFP for the Maryland State Retirement Agency Page 4 of 91

ATTACHMENT 1. NO BID/PROPOSAL NOTICE/VENDOR FEEDBACK FORM

Solicitation Title: Compensation Consultant RFP Solicitation Number: SRA 27-02 / BPM055357 Name of Company/Firm (Bidder/Offeror):

To help us improve the quality of State solicitations, and to make our procurement process more responsive and business friendly, please provide comments and suggestions regarding this solicitation. Please return your comments with your response. If you have chosen not to respond to this solicitation, please email or fax this completed form to the attention of the Procurement Officer (see Key Information Summary Sheet below for contact information).

1. If you have chosen not to respond to this solicitation, please indicate the reason(s) below:

o Other commitments preclude our participation at this time o The subject of the solicitation is not something we ordinarily provide o We are inexperienced in the work/commodities required o Specifications are unclear, too restrictive, etc. (Explain in REMARKS section) o The scope of work is beyond our present capacity o Doing business with the State is simply too complicated. (Explain in REMARKS section) o We cannot be competitive. (Explain in REMARKS section) o Time allotted for completion of the Bid/Proposal is insufficient o Start-up time is insufficient o Bonding/Insurance requirements are restrictive (Explain in REMARKS section) o Bid/Proposal requirements (other than specifications) are unreasonable or too risky (Explain in

REMARKS section) o MBE or VSBE requirements (Explain in REMARKS section) o Prior State of Maryland contract experience was unprofitable or otherwise unsatisfactory.

(Explain in REMARKS section) o Payment schedule too slow o Other: __________________________________________________________

2. If you have submitted a response to this solicitation, but wish to offer suggestions or express concerns, please use the REMARKS section below. (Attach additional pages as needed.)

REMARKS:

VENDOR NAME: ________________________________ DATE: _______________________

CONTACT PERSON: _________________________________ PHONE (____) _____ -________

ADDRESS: _____________________________________________________________________

E-MAIL ADDRESS: ______________________________________________________________

RFP for the Maryland State Retirement Agency Page 5 of 91

Attachment 2. Pre-Bid/Proposal Conference Response Form Solicitation Title: Compensation Consultant RFP Solicitation Number: SRA 27-02 / BPM055357 Name of Company/Firm (Bidder/Offeror):

See the Key Information Summary Sheet for the date and time for the Pre-Bid/Pre-Proposal Conference.

Please return this form by the due date noted for the RSVP, advising whether or not your firm plans to attend.

The completed form should be returned via e-mail to the Procurement Officer at the contact information below:

Jane Noble Maryland State Retirement Agency E-mail: jnoble@sra.state.md.us

Please indicate:

_______ Yes, the following representatives will be in attendance. Please provide the email addresses for all attendees of the Procurement Officer to be sent an invitation to this meeting:

________ No, we will not be in attendance.

This meeting will be held via Microsoft Teams on June 16th at 11:00AM Local Time Join: https://teams.microsoft.com/meet/2488914705792?p=zkCPEjyN7DtLhBMQcI

Meeting ID: 248 891 470 579 2 Passcode: db65Zx2z

Dial in by phone

+1 443-709-8970,,810685759# United States, Arbutus

Please specify whether any reasonable accommodations are requested (see IFB § 4.3“Pre-Bid conference”):

Bidder: ______________________________________________________________________________

(Bidder Name Please Print or Type)

By: _________________________________________________________________________________ (Signature/Seal)

Printed Name: __________________________________________________________________________

(Printed Name)

Title: _______________________________________________________________________________ (Title)

Date: ______________________________________________________________________________

(Date) https://teams.microsoft.com/meet/2488914705792?p=zkCPEjyN7DtLhBMQcI tel:+14437098970,,810685759

RFP for the Maryland State Retirement Agency Page 6 of 91

TABLE OF CONTENTS – RFP

1 Minimum Qualifications

1.1 Offeror Minimum Qualifications

2 Contractor Requirements: Scope of Work

2.1 Summary Statement

2.2 Background and Purpose

2.3 Contractor Responsibilities and Tasks

2.4 Experience and Personnel

2.5 Substitution of Personnel

2.6 Supplemental Category of Work Requirements and Responsibilities

3 Standard Terms and Conditions

3.1 Contract Initiation Requirements

3.2 End of Contract Transition

3.3 Invoicing

3.4 Liquidated Damages

3.5 Problem Escalation Procedure

3.6 Work Orders

3.7 Payments by Electronic Funds Transfer

3.8 Prompt Payment Policy

3.9 Federal Funding Acknowledgement

3.10 Conflict of Interest Affidavit and Disclosure

3.11 Non-Disclosure Agreement

3.12 Maryland Healthy Working Families Act Requirements

3.13 The State of Maryland’s Commitment to Purchasing Environmentally Preferred Products and

Services (EPPs)

3.14 Insurance Requirements

3.15 Non-Compete Clause Prohibition

4 Proposal Submission Information and Instructions

4.1 eMaryland Marketplace Advantage (eMMA)

4.2 Electronic Means

4.3 Pre-Proposal Conference

4.4 Questions

RFP for the Maryland State Retirement Agency Page 7 of 91

4.5 Proposal Due (Closing) Date and Time

4.6 Economy of Preparation

4.7 Public Information Act Notice

4.8 Oral Presentation

4.9 Duration of Proposals

4.10 Revisions to the RFP

4.11 Cancellations

4.12 Incurred Expenses

4.13 Protest/Disputes

4.14 Offeror Responsibilities

4.15 Acceptance of Terms and Conditions

4.16 Compliance with Laws/Arrearages

4.17 Verification of Registration and Tax Payment

4.18 False Statements

5 Proposal Submission Information and Instructions

5.1 Two Part Submission

5.2 Proposal Delivery and Packaging

5.3 Volume I - Technical Proposal

5.4 Volume II – Financial Proposal

6 Evaluation and Selection Process

6.1 Evaluation Committee

6.2 Technical Proposal Evaluation Criteria

6.3 Financial Proposal Evaluation Criteria

6.4 Reciprocal Preference

6.5 Selection Procedures

6.6 Documents Required upon Notice of Recommendation for Contract Award RFP Attachments

(Table B)

7 RFP Appendices and Exhibits

7.1 Appendices (Table C)

7.2 Exhibits (Table D)

RFP for the Maryland State Retirement Agency Page 8 of 91

1 Minimum Qualifications

1.1 Offeror Minimum Qualifications

The Offeror must document in its Proposal that it satisfies the following Minimum Qualifications:

A. The Offeror must demonstrate a minimum of five (5) years of experience providing actuarial valuation and pension consulting services for defined benefit public pension plans.

B. As proof of satisfying the minimum requirement in 1.1.A., the Offeror shall provide with its proposal, references that prove experience using the form in Attachment L Reference Checks, to include experience testifying before Boards, Legislative and Administrative bodies in support of actuarial analyses and/or the principles used in valuing defined benefit public employee retirement systems.

THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK.

RFP for the Maryland State Retirement Agency Page 9 of 91

2 Contractor Requirements: Scope of Work

2.1 Summary Statement

The Maryland State Retirement Agency (Agency) is issuing this Request for Proposals (RFP) in order to obtain the services of a qualified firm(s) to provide Actuarial Consulting Services, as specified in this Section 2.

It is the State’s intention to obtain services, as specified in this RFP, from a Contract between the selected Offeror and the State. The period of time from the date of Contract Commencement through the Notice To Proceed Date (see Appendix 1: Item “N”) will be the Contract “Start-up Period.” During the Start-up Period the Contractor shall perform start-up activities such as necessary to enable the Contractor to begin the successful performance of Contract activities as of the Notice To Proceed Date. No compensation will be paid to the Contractor for any activities it performs during the Start-up Period.

The Notice To Proceed Date is anticipated to be on January 1, 2027. The duration of the Contract will be for the period of time from the Notice To Proceed Date plus five (5) years. This Contract may be extended for four (4) periods of one year each at the sole discretion of the Agency and at the prices quoted in the Financial Proposal Form for Option Years. The Contractor shall perform all activities required by the Contract, including the requirements of this solicitation, and the offerings in its Technical Proposal, for the compensation described in its Financial Proposal.

The Agency intends to make a single award as a result of this RFP. See RFP Section 6.5 Selection Procedures for more Contract award information.

A Contract award does not ensure a Contractor will receive all or any State business under the Contract.

2.2 Background and Purpose

The Agency is the administrator of the Maryland State Retirement and Pension System (the System). The System was established in accordance with Division II of the State Personnel and Pension Article of the Annotated Code of Maryland to provide retirement allowances and other benefits to State employees, teachers, law enforcement officers, correctional officers, state police, judges, legislators, and employees of participating governmental units (PGUs), including but not limited to, political subdivisions of the State, certain boards and commissions and other local governmental agencies. The System does not administer other post-employment benefits, including health insurance. The System is comprised of seven qualified defined benefit plans pursuant to Internal Revenue Code Sections 401(a) and 414(d), and responsibility for the System’s administration and operation is vested in a 15-member Board of Trustees (Board).

The System is made up of two cost-sharing employer pools: the “State Pool” and the “Municipal Pool.”

The State Pool consists of the State agencies, boards of education, community colleges and libraries. The Municipal Pool consists of the PGUs that elected to join the System. For actuarial valuation and funding purposes, neither pool shares in the other’s actuarial liabilities. Participation by State agencies, boards of education, community colleges and libraries is mandatory. Participation by PGUs is optional, and a PGU may elect to join the system or withdraw at the beginning or end of a fiscal year, respectively. Participating governmental units may also transfer some or all of their members from one plan within the System to another plan within the System. A special actuarial valuation is performed prior to a governmental unit joining, withdrawing, or transferring within the System. Members of a withdrawing governmental unit may in certain instances elect to remain with the System. An actuarial accrued liability is calculated for the withdrawn governmental unit whose members have elected to remain with the System and for their current retirees.

The System is comprised of several separate and distinct systems, each comprising different contribution and benefit structures. Further differentiation exists at the plan level. For example, the Employees’ and Teachers’ Pension Systems include members who are required to pay member contributions on all earnable compensation, as well as certain members who are not required to pay member contributions for earnable compensation that does not exceed the taxable wage base. In addition, the State Police System

RFP for the Maryland State Retirement Agency Page 10 of 91 and the Law Enforcement Officers’ Pension System offer a Deferred Retirement Option Program (DROP) which provides eligible members the opportunity to accrue deferred future retirement benefits while continuing employment. The System includes all of the individual systems identified in State Pers. & Pens.

Art., §21-102, including (hereinafter called the “individual systems” or “State systems”):

Teachers’ Retirement System (TRS), including Selection A (Unlimited COLA), Selection B (Limited COLA), and Selection C (Combination formula)

• TRS is closed to new members hired on or after January 1, 1980. Members on December 31, 1979 continue to be members unless they elected to transfer into the Teachers’ Pension System (established January 1, 1980) prior to January 1, 2005.

Teachers’ Pension System (TPS), including the Teachers’ Contributory Pension Benefit, Teachers’ Non- Contributory Pension Benefit, Teachers’ Alternative Contributory Pension Selection, and the Teachers’ Reformed Contributory Benefit Employees’ Retirement System (ERS), including Selection A (Unlimited COLA), Selection B (Limited COLA), and Selection C (Combination formula), Correctional Officers’ Retirement System (CORS), and Legislative Pension Plan (LPP)

• ERS is closed to new members hired on or after January 1, 1980. Members on December 31, 1979 continue to be members unless they elected to transfer into the Employees’ Pension System (established January 1, 1980) prior to January 1, 2005.

Employees’ Pension System (EPS), including the Employees Contributory Pension Benefit, Employees Non-Contributory Pension Benefit, Employees Alternative Contributory Pension Selection and the Employees Reformed Contributory Benefit State Police Retirement System (SPRS), including multiple tiers Judges’ Retirement System (JRS), including multiple tiers Law Enforcement Officers’ Pension System (LEOPS), including multiple tiers The State of Maryland is responsible for paying employer contributions for more than 180,000 active members including teachers, judges, State employees, State police, legislators and certain elected or appointed State and local officials. These individuals participate in the following individual systems: TRS, TPS, ERS, EPS, SPRS, JRS, LPS, CORS, or LEOPS. For actuarial valuation and funding purposes, these participants are considered to be members of the State Pool. For purposes of determining the employer contributions required to be paid by the State, in accordance with State Pers. & Pens. Art., § 21-304, the ERS, EPS, CORS, and LPP are considered together as one State system (referred to as the “Employees’ Combined Systems”), and TRS and TPS are considered together as one State system (referred to as the “Teachers’ Combined Systems”).

Various local governmental units in Maryland also participate in the System as PGUs, and are responsible for paying employer contributions for more than 27,000 active members including non-teacher employees of the 68 boards of education, community colleges and public libraries, and local government employees and certain elected or appointed local government officials of more than 150 current and former participating governmental units. These individuals participate as members of the following individual systems: ERS (including CORS), EPS, or LEOPS (municipal portion of the plan). For actuarial valuation and funding purposes, PGUs in these State systems are considered to be members of the Municipal Pool.

In accordance with the State Personnel and Pension Article, § 21-305, the EPS and ERS are considered together for purposes of determining the employer contributions required to be paid by a PGU on behalf of its employees participating in these State systems.

The current actuarial assumptions and funding method adopted by the Board of Trustees are based upon a 2024 experience study covering the period of 2018 thru 2023. The actuarially determined rates are equal to the employer normal cost plus the Unfunded Actuarial Accrued Liability (UAAL) contribution rate. The unfunded actuarial contribution rate is equal to the payment resulting from amortizing the unfunded liability as a level percentage of pay over various time periods depending on the source of the UAAL. The General Assembly passed legislation in 2023 that amends how the unfunded liabilities of the System are

RFP for the Maryland State Retirement Agency Page 11 of 91 amortized. The existing unfunded liability as of June 30, 2023 for each State System will continue to be amortized over a single closed 25-year period beginning July 1, 2014 and ending June 30, 2039 (13 years remaining as of the June 30, 2025 valuation, which determines the fiscal year 2027 contribution).

Beginning July 1, 2023 (first affecting the 2024 valuation), any new unfunded liabilities or surpluses that accrued during the preceding fiscal year are amortized over closed periods according to the following guidelines:

• Over 15 years for experience gains and losses;

• Over 25 years for gains or losses attributable to changes to actuarial assumptions or methods;

• Over a period ranging from no less than 10 and no more than 15 years for gains or losses stemming from new legislation (except early retirement incentives); and

• Over 5 years for any accrued liability stemming from legislation providing incentives for the early retirement of State employees.

As of June 30, 2025, the actuarial value of the System’s assets was $73.8 billion, while its total actuarial accrued liabilities totaled $99.9 billion.

For additional information, please refer to Division II of the State Pers. & Pens. Art., and the Agency’s website at www.sra.state.md.us where both the Maryland State Retirement and Pension System’s most current Actuarial Valuation Report and Annual Comprehensive Financial Report (ACFR) are available.

The System is seeking qualified firms to provide comprehensive proposals to support the proper administration of the System for each of the following categories of professional actuarial services:

A. General Requirements B. Annual Actuarial Valuations (Fixed Rate) C. Actuarial Consulting Services (Fixed Rate) D. Experience Study and Analysis Services (Fixed Rate) E. Employer Valuation Services (Fixed Rate)

2.3 Contractor Responsibilities and Tasks

2.3.1 General Requirements

A. The Contractor shall perform the following services in accordance with all applicable statutes, rules, governmental accounting standards, and actuarial standards of practice. In addition, the Contractor shall perform all services in accordance with the statutory requirements set forth in Division II of the Annotated Code of Maryland, State Personnel and Pensions Article and regulations promulgated by the Board at Code of Maryland Regulations (COMAR) Title 22, and consistent with the actuarial assumptions and funding method adopted by the Board of Trustees.

B. The Contractor shall comply with the requirements of the Maryland State Retirement and Pension System (MSRPS) or any other applicable state or federal law or regulation as they apply to the privacy of member data. All data provided to the actuary by MSRPS should be considered confidential unless declared otherwise, in writing, by the MSRPS.

C. The Contractor shall seek written consent prior to the release of public information resulting from the engagement. With respect to any publicity given to the actuarial services provided under terms of the resulting contract, the Contractor shall identify MSRPS as the sponsoring agency and shall not release any information without prior written approval of the Executive Director of MSRPS or the Executive Director’s appointed designee.

D. The Contractor shall perform all services within the scope of the contract under the direct supervision of a qualified actuary as defined in Section I Minimum Qualifications.

E. The Contractor shall maintain the ability to securely accept and transfer data files and documents via password protected and encrypted emails and attachments and/or including (if applicable) data files and documents to be sent by the Agency, to the Offeror’s secure web site.

The Offeror’s secure website, passwords and level of encryption must be in accordance with https://sra.maryland.gov/actuarial-valuation-reports https://sra.maryland.gov/annual-financial-reports

RFP for the Maryland State Retirement Agency Page 12 of 91 requirements specified in Section 2.6.1.3, Information Technology. As proof of this requirement the Offeror shall provide references affirming this capability.

F. The Contractor shall certify their ability to process Agency data files in the format as provided by the Agency to the Actuary (see Exhibit 4).

G. An Offeror must be able to provide all services and meet all of the requirements requested in this solicitation and the successful Offeror (the Contractor) shall remain responsible for Contract performance.

H. The Offeror must employ and assign at least two (2) actuaries to perform services under this Contract with the following qualifications:

i. Both must be a member of the American Academy of Actuaries (MAAA) in good standing;

ii. At least one must be a Fellow of the Society of Actuaries (FSA), the other may be an

Associate of the Society of Actuaries (ASA) or an FSA; and

iii. At least one must be an Enrolled Actuary (EA).

I. The Offeror shall possess a valid business license to practice in the state of Maryland at the time its proposal is submitted and throughout the term of the contract; evidenced by a Certification of Status.

2.3.2 The Contractor shall perform the following services:

2.3.2.A.1. Annual Actuarial Valuations (For the State Pool and Combined State and Municipal

Pools) The Contractor shall prepare annual actuarial valuation reports for the State Pool and the combined State and Municipal Pools for fiscal year 2027 (July 1, 2026 – June 30, 2027) through fiscal year 2031 (July 1, 2030 – June 30, 2031), plus any extensions. The actuarial valuation reports shall include results for each individual system, presented in a format consistent with the June 30, 2025, actuarial valuation report (see public website - Actuarial Valuation Report).

The Contractor shall request and obtain from the Agency all participant and financial data necessary to calculate the actuarial value of assets, actuarial accrued liabilities, funded status, and contribution rates for the System and each individual systems within the State and Municipal Pools (identified in RFP Section 2.2). Participant data (including active members, former vested members, retirees, and beneficiaries, along with payroll and demographic information) will be provided by the Agency’s Retirement Benefit Division within sixty (60) days following the end of each fiscal year via the Contractor’s secure website (see Exhibit 4 for file specifications). Financial data (including System financial statements and participating employer cash flows) will be provided by the Agency’s Finance Division within ninety (90) days following the end of each fiscal year.

The Contractor shall request any additional data required to complete the actuarial valuation, and review and validate all data for reasonableness and consistency, including comparison to prior years and reported benefit payments. It is the Contractor’s responsibility to request any clarification from the Agency regarding data interpretation. It is also the Contractor’s responsibility for communicating any discrepancies or inconsistencies in the data.

The Contractor shall submit deliverables according to the following schedule:

• Preliminary Results: No later than September 1 of each year, submit preliminary valuation results, including recommended employer contribution rates for each individual system within the State and Municipal Pools;

• Draft Report: No later than October 1 of each year, submit a draft Actuarial Valuation Report, including recommended contribution rates; and

RFP for the Maryland State Retirement Agency Page 13 of 91

• Final Report: No later than October 31 of each year, submit the final Actuarial Valuation Report.

The Annual Actuarial Valuation Report shall, at a minimum, include the following:

i. An Actuarial Certification of the Annual Actuarial Valuation Results.

ii. Executive or Board Summary of the Actuarial Valuation Results.

iii. Summaries of Valuation Results – The annual valuation report shall include separate summaries of valuation results for the Municipal Pool portion of the Employees’ Retirement System, the Employees’ Pension System, the LEOPS-PGU System, and the Correctional Officers Retirement System-PGU.

iv. Certified Employer Contribution Rates – The Contractor shall certify the employer contribution rates (expressed as a percentage of covered payroll) applicable to each individual system within the State and Municipal pools based upon the actual fiscal year end valuation results.

v. Risk Analysis and Stress Testing – The annual valuation report shall include a discussion of types of risk that may affect the System’s future financial condition, including Investment Risk, Asset/Liability Mismatch, Contribution Risk, Salary and Payroll Risk, Longevity Risk, or Other Demographic

vi. Financial Disclosures – The Contractor shall present the following financial disclosures separately in the annual valuation report for the Municipal Pool portion of the Employees’ Retirement System, the Employees’ Pension System the LEOPS-PGU System, and the Correctional Officers Retirement System-PGU:

a) Actuarial and Market Value of System Assets – A detailed analysis of the methodology and components used to properly allocate System assets to the Municipal Pool.

b) Actuarial Accrued Liabilities

c) Employer Contribution Rates – The annual valuation report shall separately disclose the State Pool portion of employer contribution rates attributable to each of the individual systems and to the State as a whole expressed as a percentage of covered payroll and split between the normal cost and the unfunded actuarial liability.

d) Governmental Accounting Standards Board (GASB) Basis Accounting Statements

e) Statement of Changes in Actuarial Accrued Liability for the combined State and

Municipal pools and for each individual system.

vii. Statistical Disclosures – For each individual system, the State Pool, the Municipal Pool, and the System, the following statistical disclosures shall be presented in the annual valuation report:

a) Development of Normal Costs – The components used to develop each employer contribution rate.

b) Summaries of Membership Data – Schedules separately summarizing the aggregate number of active members (split between vested and non-vested), annual covered salaries, number of retirees and beneficiaries, benefits paid, members’ average age and number of vested former members by system.

c) Detailed Membership Statistics for active members, retirees and beneficiaries, and inactive/vested members.

d) Detailed Age, Salary, Benefit and Service Distribution Statistics

RFP for the Maryland State Retirement Agency Page 14 of 91

viii. Actuarial Assumptions, Procedures, and Funding Method used for each of the individual Systems.

ix. Summaries of Principal Plan Provisions for each of the individual systems.

x. Any additional reports, information, schedules, charts or graphs currently required or that may become required over the term of the contract as a result of new or existing accounting pronouncements or requirements of the GFOA, GASB, generally accepted actuarial principles and practices, and /or changes in applicable law.

xi. Any other information, reports, narratives, schedules, charts or graphs that may be necessary for a complete understanding of the annual actuarial results.

2.3.2.A.2. Annual Actuarial Valuations (For the Municipal Pool) The Contractor shall prepare separate annual actuarial valuation reports for the Municipal Pool for fiscal year 2027 (July 1, 2026 – June 30, 2027) through fiscal year 2031 (July 1, 2030 – June 30, 2031), plus any extensions. The actuarial valuation reports shall include each individual system, presented in a format consistent with the June 30, 2025, actuarial valuation report (see public website - Actuarial Valuation Report).

The Contractor shall request and obtain from the System all participant and financial data necessary to calculate the actuarial value of assets, actuarial accrued liabilities, funded status, and the contribution rates for the individual systems within the Municipal Pool (identified in RFP Section 2.2). Participant data (including active members, former vested members, retirees, and beneficiaries, along with payroll and demographic information) will be provided by the Agency’s Retirement Benefit Division within sixty (60) days following the end of each fiscal year via the Contractor’s secure website (see Exhibit 4 for file specifications). Financial data (including System financial statements and participating governmental unit cash flows) will be provided by the Agency’s Finance Division within ninety (90) days following the end of each fiscal year.

The Contractor shall request any additional data required to complete the actuarial valuation, and review and validate all data for reasonableness and consistency, including comparison to prior years and reported benefit payments. It is the Contractor’s responsibility to request any clarification from the Agency regarding data interpretation. It is also the Contractor’s responsibility for communicating any discrepancies or inconsistencies in the data.

The Contractor shall submit deliverables according to the following schedule:

• Preliminary Results: No later than September 1 of each year, submit preliminary valuation results, including recommended employer contribution rates for each individual system within the Municipal Pool;

• Draft Report: No later than October 1 of each year, submit a draft Actuarial Valuation Report, including recommended contribution rates; and

• Final Report: No later than October 31 of each year, submit the final Actuarial Valuation Report.

The Annual Actuarial Valuation Report shall, at a minimum, include:

i. An Actuarial Certification of the Annual Actuarial Valuation Results.

ii. Executive or Board Summary of the Actuarial Valuation Results.

iii. Summaries of Principal Results – the annual valuation report shall include separate summaries of principal plan results for the Municipal Pool portion of the Employees’ Retirement System, the Employees’ Pension System, the LEOPS-PGU System, and the Correctional Officers Retirement System-PGU.

RFP for the Maryland State Retirement Agency Page 15 of 91

iv. Certified Employer Contribution Rates – the Contractor shall certify the employer contribution rates (expressed as a percentage of covered payroll) applicable to each individual system within the Municipal pool based upon the actual fiscal year end valuation results.

v. Financial Disclosures – The Contractor shall present the following financial disclosures separately in the annual valuation report for the Municipal Pool portion of the Employees’ Retirement System, the Employees’ Pension System the LEOPS-PGU System, and the Correctional Officers Retirement System-PGU:

a) Actuarial and Market Value of System Assets – A detailed analysis of the methodology and components used to properly allocate System assets to the Municipal Pool.

b) Actuarial Accrued Liabilities

c) Schedules of Funding Deficits and Surpluses by individual system for each governmental unit participating in the Municipal Pool.

d) Employer Contribution Rates – The annual valuation report shall separately disclose the employer contribution rates attributable to the Employees’ Retirement and Pension System portion of the Municipal pool as well as the LEOPS-PGU, and the Correctional Officers Retirement System-PGU portions of the Municipal Pool expressed as a percentage of covered payroll, and split between the new entrant normal and the unfunded actuarial liability components.

e) GASB Basis Accounting Statements

vi. Statistical Disclosures – For the Municipal Pool, the following statistical disclosures must be presented in the annual valuation report:

a) Development of Normal Costs – The components used to develop each employer contribution rate.

b) Summaries of Membership Data – Schedules separately summarizing the aggregate number of active members (split between vested and non-vested), annual covered salaries, number of retirees and beneficiaries, benefits paid, members’ average age and number of vested former members for the Municipal Pool.

c) Detailed Membership Statistics for active members, retirees and beneficiaries, and inactive/vested members.

d) Detailed Age, Salary, Benefit and Service Distribution Statistics

vii. Actuarial Assumptions, Procedures, and Funding Method for the Municipal Pool

viii. Summaries of Principal Plan Provisions for the Municipal Pool

ix. Any additional reports, information, schedules, charts or graphs currently required or that may become required over the term of the contract as a result of new or existing accounting pronouncements or requirements of the GFOA, GASB, generally accepted actuarial principles and practices, and /or changes in applicable law.

x. Any other information, schedules, charts or graphs that may be necessary for a complete understanding of the annual actuarial results.

2.3.2.B. Actuarial Consulting Services The Contractor shall provide ongoing actuarial consulting services to support the administration, funding, and oversight of the System, including, but not limited to, the following:

i. Technical Advice and Consultation The Contractor shall respond to routine time-sensitive technical inquiries from the Executive Director and/or designated Agency staff within twenty-four (24) hours and shall be available to meet within five (5) business days upon request. Services may be provided via meetings, telephone, or

RFP for the Maryland State Retirement Agency Page 16 of 91 written correspondence. Such services shall include, as requested, providing expert testimony and technical support to the Board of Trustees, its committees, and committees of the Maryland General Assembly on actuarial, policy, administrative, or related matters.

ii. Board, Legislative, and Senior Staff Meetings The Contractor shall attend and participate in meetings with the Board of Trustees, members of the Maryland General Assembly, and Agency senior staff, as required, but no fewer than four (4) times annually, primarily in Baltimore or Annapolis, Maryland. The Contractor shall also provide educational presentations and must be capable of clearly communicating actuarial concepts in non-technical terms.

iii. Monitoring of Technical and Regulatory Changes The Contractor shall monitor and promptly advise the Agency of actual or proposed statutory, regulatory, and accounting changes that may impact the System. This includes developments related to funding, benefits, administration, taxation, fiduciary responsibilities, and disclosure requirements. The Contractor shall assist in interpreting and implementing applicable federal and State laws and shall promptly notify the Executive Director of any potential non-compliance.

iv. Alternative Valuation Estimates The Contractor shall perform alternative preliminary valuations under various factors, such as but not limited to, the number of participants, the amount of service credit transferred into the system, or recalculations due to errors or omissions in data. The Contractor shall reconcile such factors used in the development of alternative preliminary valuations to data control totals provided by the Agency to ensure consistent data treatment.

v. Special Calculations The Contractor shall perform complex calculations related to special cases, such as but not limited to IRC §415 benefit limitations. The Contractor shall provide the Agency a quick reference guide or table for Agency use as a tool to help identify individuals potentially subject to the IRC §415 benefit limitations. As requested by the Agency, the Contractor shall calculate the benefit amount payable in accordance with the IRC §415 benefit limitations on individuals identified as potentially subject to the limitations. The Contractor shall also compute the cost-of-service purchases not supported by the current actuarial module. The current actuarial module supports most purchase of service calculations.

vi. Social Security Integration Levels On at least an annual basis, the Contractor shall provide updated tables certifying Social Security integration levels and taxable wage bases.

vii. Alternative Benefit Structures and Plan Changes The Contractor shall estimate the actuarial and financial impact of proposed benefit changes or alternative plan designs, including required employer contributions. Cost estimates shall be provided within ten

(10) business days of request, unless otherwise agreed.

viii. System Simulation Model The Contractor shall develop and maintain a System simulation model which enables the Agency to project future assets, liabilities, contributions, benefits and payroll based on user defined variables such as investment assumptions, investment experience, inflation assumptions, inflation experience, population growth, payroll increases and benefit increases. The model shall be portable and capable of being operated by the Contractor on a laptop computer in real time during meetings and presentations at the Agency’s location.

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ix. Analysis of Proposed Benefit Changes The Contractor shall project and analyze the fiscal impact on the System including but not limited to the employer contribution rates related to proposed changes affecting the existing benefit structure.

x. Membership and Beneficiary Profiles The Contractor shall prepare a membership data profile and a beneficiary data profile for each of the Several Systems.

xi. Annual Comprehensive Financial Report (ACFR) Support The Contractor shall assist the Agency in preparing actuarial, financial, statistical, and plan summary information required for the ACFR in accordance with applicable standards, including those issued by GASB and the Government Finance Officers Association (GFOA).

Unless otherwise specified, the Contractor shall provide required ACFR deliverables no later than October 15 of each year. Deliverables shall include, but are not limited to:

a) GASB Statement Nos. 67 and 68 (see Exhibit 5);

b) Summary of Membership by System (State and Municipal combined) - full chart by August 30th;

c) Schedules of Funding Progress with supporting notes (State and Municipal combined) – Prior Year (PY) & Current Year (CY) (draft by October 1st; final by October 15th);

d) Schedule of Annual Required Contributions (State and Municipal combined) –

PY & CY;

e) Annual Certification Letter (draft by October 1st; final by October 15th)

f) Board Summary;

g) Accounting Statement Information (State and Municipal combined) – PY & CY full page;

h) Summary of Unfunded Liabilities/Solvency Test (State and Municipal combined)

– PY & CY (covered payroll should include mandated increases at 7/1);

i) Summary of Retirees and Beneficiaries Added to and Removed from Rolls (State and Municipal combined) PY & CY;

j) Statement of Changes in Net Pension Liability/(Asset) - (State and Municipal combined) – full chart;

k) Summary of Principal Results – full charts;

l) Schedule of Active Membership Valuation Data by Plan – PY & CY;

m) Summary of Membership Data by System Plan - provide 7/1/XX to 6/30/XX;

n) Ten-Year History of Active Membership by Plan – PY & CY – does not include graphs;

o) Ten-Year History of Retirees and Beneficiaries by Plan – PY & CY - does not include Graph;

p) Ten-Year History of Employer Contribution Rates by Plan – PY & CY;

q) Employer Contributions Received – Contribution Rates as a Percentage of

Payroll; Last 6 lines of chart – does not include graph;

r) Principal Participating Employers Current Year and Nine Years Ago;

s) Plan Summary Composite Pictures for each individual system – all shaded gray charts – no text;

t) Any additional financial, actuarial, or statistical data required.

xii. Independent Auditor Coordination The Contractor shall coordinate with the Agency’s independent auditors, including confirming actuarial data and responding to audit inquiries in a timely manner.

RFP for the Maryland State Retirement Agency Page 18 of 91

xiii. GASB 68 Employer Reporting The Contractor shall prepare GASB 68 employer-specific reports and schedules (see Exhibit 6) in accordance with applicable accounting standards. Deliverables shall be provided at a time mutually agreed upon with the Contract Monitor to meet employer reporting and audit deadlines.

xiv. Actuarial Audits and Peer Review The Contractor shall cooperate fully with any actuarial audits, peer reviews, or other independent evaluations commissioned by the Agency.

xv. Reports and Meetings The Contractor shall participate in the following work status meetings and provide the following progress and interim reports during its performance of the Contract:

a) Work Initiation Meeting The Contractor shall meet with the Agency within ten (10) business days of Contract commencement for a work initiation meeting, at which the following shall take place:

i. The Agency and Contractor shall review all contract requirements;

ii. The Contractor shall submit for the Agency’s review and approval a detailed work plan in accordance with the Contractor’s technical proposal, including the assignment of personnel and other resources, and timeframes for accomplishing the required and proposed activities;

iii. The Agency and Contractor shall agree upon (1) the timing and format for status meetings and agree upon the dates for subsequent meetings; (2) a specific format of monthly progress reports; and (3) a specific format for any electronic version of reports.

b) Status Meetings The Contractor shall meet with the Contract Monitor on at least a quarterly basis, or more frequently as requested, to report on progress, key issues, and upcoming activities.

2.3.2.C Experience Study and Analysis Services In accordance with Annotated Code of Maryland, State Personnel and Pensions Article, § 21-125(c), the Contractor shall conduct an experience review and evaluation of the actuarial assumptions utilized in the annual actuarial valuations of the System. Experience studies shall be conducted at least once every five (5) years, or more frequently at the direction of the Board of Trustees. The most recent experience study covered the period of July 1, 2018 through June 30, 2023. The experience study shall consist of:

i. A review of the appropriate long-term economic assumptions such as investment return and wage and price inflation, and demographic assumptions such as disability rates and mortality rates.

ii. Comparison of the actuarial assumptions used in the preceding annual valuation, to the System’s actual experience to identify areas of significant deviation that may warrant action by the Board of Trustees.

iii. Subsequent to an experience study, the Contractor shall study the current annuity and option factors to determine whether the factors are in compliance with State Pension Law and to recommend any changes that are required to bring the factors into compliance. The Contractor shall develop the application program(s) necessary to calculate the annuity and option factors. At the conclusion of the review, the Contractor shall prepare a report summarizing the results of the review and any related recommendations for consideration by the Board of Trustees.

RFP for the Maryland State Retirement Agency Page 19 of 91

2.3.2.D. Employer Valuation Services The Contractor shall perform actuarial valuation services related to employer participation in the System, including new entrants, withdrawals, intra-System transfers, and liability settlement calculations, as follows:

i. New Entrant/Withdrawing Employer Valuations Periodically new employers apply for, and existing employers withdraw from, participation in the System. State pension law provides for special actuarial valuations to be performed for such employers prior to entry into, or withdrawal (full or partial) from, the System. At the request of the Contract Monitor, the Contractor shall compute the new entrant liabilities or withdrawn assets and liabilities and related amortization schedules. The Contractor shall perform a preliminary valuation for each employer considering entering or withdrawing from the System. Upon the employers’ election to enter or withdraw from the System, the Contractor shall perform a final valuation. The Contractor shall reconcile to Agency provided control totals to ensure consistent data treatment. The Contractor will perform such services at a fixed fee per service (which shall include the preliminary and final valuation and all calculations required for each new entrance or withdrawal) to be specified in the submitted Financial Proposal Form (Attachment B).

ii. Intra-System Transferring Valuations for Employers Periodically employers that participate within the System apply to transfer some or all of their participants from one plan within the System to another plan within the System. State pension law provides for special actuarial valuations to be performed for such employers prior to such a full or partial “intra-System” transfer. At the request of the Contract Monitor, the Contractor shall compute the intra-System transfer assets, liabilities and related amortization schedules. The Contractor shall perform a preliminary intra-System transferring employer valuation. Upon the employers’ election to transfer within the System the Contractor shall perform a final intra-System transferring employer valuation. The Contractor shall reconcile to Agency-provided control totals to ensure consistent data treatment. The Contractor will perform such services at a fixed fee per service (which shall include the preliminary and final valuation and all calculations required for each employer transfer) to be specified in the submitted Financial Proposal Form (Attachment B).

iii. Participating Governmental Units (PGU) Liability Pay-Down or Payoff Requests The Contractor shall provide a pay-down or payoff quote and revised amortization schedule, if applicable. The Contractor shall create an amortization schedule and corresponding pay-down or payoff formula for a participating employer that incurs a liability upon entering, withdrawing, or transferring within the System. These services will be performed at fixed fee per service to be specified in the contractor’s Financial Proposal Form (Attachment B).

2.4 Experience and Personnel

2.4.1 Preferred Offeror Experience

The Offeror shall demonstrate substantial experience providing actuarial consulting services to large, complex public defined benefit pension systems. The Offeror must have at least five (5) years of experience providing actuarial consulting services preferably within the past seven (7) years.