ADSPO16-157096-ADSPO16-157096_Evaluation_Report_and_Confirmation.pdf

Capabilities, Experience, and Expertise 340 Exceeds

Expectations

Exceeds Expectations

Below

Expectations

Below Expectations

Method of Approach 290 Below

Expectations 116 Meets Expectations 218

Below Expectations

Below

Expectations

Strengths: Great West (Empower) will act as the administrator, but not the investment fiduciary. A third party, LeafHouse will act as investment fiduciary. The quoted fees include both the Administrator and Fiduciary Services

Strengths: Single company, Nationwide, will act as Administrator and Investment fiduciary. Having one firm providing all services and also acting in a fiduciary role allows for non-bifurcated oversight by the Committee, clearer integration of services, a single point of vendor contact, and a single point of vendor responsibility.

Evaluation Report Solicitation No. ADSPO16-00006008

Deferred Compensation and Defined Contribution Plans

Offeror A - Great West Retirement Services

(Empower) Offeror B - Nationwide

Offeror C - Prudential Retirement

Offeror D - Voya

Grand Total 659 928 455 455

Weaknesses - Prudential will act as Administrator and investment fiduciary, under the "MoM" program for institutional separate accounts only. They will not act as fiduciary for retail mutual funds and recommend the State utilize the services of an independent third party advisory firm for such funds. The result would be multiple fiduciaries depending on investment products.

Weaknesses - Stated that they will not act as a fiduciary. Voya proposed that the State contract separately for investment fiduciary services.

Result would be an additional RFP to be issue, an additional vendor to be overseen, and new integration issue to be considered.

Weakness - Committee Admin Assistance - Did not indicate support for required monthly meetings (hosting, addressing, etc.

Weaknesses - Staffing and Member Services - While there are a number of reps assigned, VP and Plan Manager are not on site and are spending less than 50% of time working on Arizona account.

Weaknesses - Staffing & Member Service - 3 Retirement Consultants (for each region), 2 Office Managers, Weaknesses - Cap placed on amount of penalties they were willing to pay to a maximum of $125K.

Meets - Staffing and Member Service - 1 Client Relations Director (local), 6 Retirement Planning Counselors.

Strengths - Customer Service - 15-20 CSR working on account assigned to Arizona

Weakness - Committee Admin Assistance - Great West did not indicate that they will provide Committee Assistance noted in Section 3.20 of the SOW.

Weaknesses - Did not assign a dedicated group of Customer Service Representatives to the plan. Uses generalized call center and everyone handles all plans.

Strength - Nationwide has 16 Customer Service Representatives assigned to the State plans.

Meets - Staffing 7 total people 4 FTE equivalent personnel working on account.

Weakness - Committee Admin Assistance - Prudential did not indicate that they will provide Committee Assistance noted in Section 3.20 of the SOW.

Weakness -Transition Plan - Move all users to a Target Date Fund unless they opt-out.

Fees - Fee Schedule 270 Meets

Expectations 202.5

Exceeds Expectations

Meets

Expectations 202.5

Meets Expectations

202.5

Adherence to the Terms and Conditions 100 Unacceptable 0 Exceeds

Expectations 100 Unacceptable 0 Unacceptable 0

Exceeds Expectations

Meets Expectations

Below Expectations

Unacceptable

Weaknesses - Exceptions taken include Sections Below:

1) 2.3

2) 3.7, 3.8, 3.9

3) 5.2

4) 9.2 A, 9.4B, 9.4 C,9.4E, 9.4G, 9.5 - 9.5.2

5) 11

6) 12.0

7) 14.1

8) 16.1 and 16.3

9) 19.2.3, 19.2.3.44, 19.3

Weaknesses - Exceptions Taken to Sections Below:

1) Scope of Work - 4.0, 4.1, 4.1.1, 4.1.2, 4.1.3, 4.2, 4.3, 4.4

2) Special Terms & Conditions -

8.0 - Indemnification

3) Uniform T&C's - 8.2., 8.2.1 - Stop Work Order

4) 9.5, 9.5.1, 9.5.2, 9.5.3 - Termination and Default

Five (5) Year Fee BPS

0.20% 0.07% 0.07% 0.175%

Weaknesses - Fee structure was significantly higher using the Committed recommended plan

Strength: Quote based on committee recommended plan verses Administrator preferred plan

Weaknesses - Fee Structure was based on MoM program and did not include fees for a third party fiduciary for retail mutual funds.

Weaknesses - Fees did not include the cost of an investment fiduciary and were significantly higher than others.

Weakness - No Customer Service Representatives assigned specifically to the State plans.

Rating Definitions for Criteria other than Rate/Cost

Proposal meets all requirement(s) outlined in the RFP and provides innovative or exceptional responses. (100% of Points) For each of evaluation criteria, a determination was made regarding how well the proposals satisfied the stated requirements. The rating definitions, found here, formed the basis for determining the scores assigned to each proposal.

The strengths and weaknesses fields were used to note strengths and weaknesses of the proposal.

Proposal meets requirement(s) outlined in the RFP. (75% of Points)

Proposal does not fully meet or does not completely address requirement(s) of the RFP. (40% of Points)

Weaknesses - 0.09 BPS Fee Structure was based on Administror preferred plan.

Elements of the proposal are unacceptable to the State. (0% of Points)

Adherence

Weaknesses - Exceptions taken to Sections included Below:

1) Indemnification

2) Most Favored Pricing

3) Information Security and Data Privacy - Showstopper for State of Arizona

4) Unauthorized Access

5) Tax Indemnification

6) Risk of Loss

7) Termination and Default

8) Insurance Requirements

No exception taken.