Attachment A - Scope of Work.pdf

ITB No.: DMS-25/26-039 Page 1 of 8

Investment Consulting and Monitoring Services for Optional Annuity and Retirement Programs

ATTACHMENT A – SCOPE OF WORK

INVESTMENT CONSULTING AND MONITORING SERVICES FOR

OPTIONAL ANNUITY AND RETIREMENT PROGRAMS

1.0 OBJECTIVE

The Contractor shall regularly and consistently monitor and analyze the investment options within the Department’s two (2) optional retirement programs, the SUSORP and the SMSOAP. In furtherance of preparing the reviews and reports, the Contractor will obtain the Investment Policy Statement (IPS) from the Department to be used for analysis and monitoring.

2.0 DESCRIPTION OF SERVICES

2.1 Services Sought

Through this ITB, the Division of Retirement (Division), seeks the following:

• Investment Consulting for Optional Annuity and Retirement Programs

• Monitoring Services for the Optional Annuity and Retirement Programs

• Ad Hoc Consulting

2.2 Background

The Division administers two defined contribution retirement plans:

2.1.1 State University System Optional Retirement Program (SUSORP)

The Division oversees the administration of the SUSORP with assets of approximately $7.5 billion as of Sept. 30, 2024. This total excludes legacy assets held by companies no longer offering services to new members under the plan. The SUSORP serves the retirement needs for approximately 18,000 active members employed by the twelve (12) State universities in Florida and over 30,000 inactive members.

The four (4) currently approved Service Provider companies who receive ongoing contributions for the SUSORP are Equitable, TIAA, VALIC, and Voya Financial.

Additionally, Brighthouse Financial, Nationwide (Jefferson National) and Empower maintain legacy investment products for SUSORP participants.

Section 121.35(6)(b), Florida Statutes (F.S.), authorizes the Department to designate no more than six (6) companies as Service Provider companies from which contracts may be purchased under the program.

2.1.2 Senior Management Service Optional Annuity Program (SMSOAP)

The Division also oversees the administration of the SMSOAP retirement plan with assets of approximately $14.6 million as of Sept. 30, 2024. This total excludes legacy assets held by companies no longer offering services to new members under the plan.

ITB No.: DMS-25/26-039 Page 2 of 8

Effective July 1, 2017, the SMSOAP retirement plan was closed to new members;

however, it continues to serve the retirement needs for about five (5) active members employed by the State of Florida and 128 inactive members.

The approved Service Provider companies who receive ongoing contributions for the SMSOAP are Empower (Great West), TIAA, VALIC, and Voya Financial. Great West maintains legacy investment products for SMSOAP participants.

Section 121.055(6)(f)1., F.S., allows the Department to designate one (1) or more Service Provider companies from which annuity contracts may be purchased under the program.

2.1.3 The current Service Providers may change as the Department has issued an Invitation to Negotiate. The Investment Options for the SUSORP and SMSOAP are provided in Attachment F, List of Authorized Products. This Attachment should not be considered a final and comprehensive list of Investment Options as it is subject to change at any time prior to or after the Contract award.

3.0 DEFINITIONS/ACRONYMS

3.1 Current Investment Products: Annuity and mutual fund products that are offered by current Department Service Providers that are under contract, have Member assets, and are receiving contributions.

3.2 Day: Calendar days, unless otherwise stated.

3.3 ET: Eastern Time.

3.4 Investment Policy Statement (IPS): A document that outlines general rules, investment goals and objectives for investments and describes the strategies that should employ to meet these objectives. Specific information on matters such as asset allocation, risk tolerance and liquidity requirements are included in an IPS.

3.5 Investment Options: All Current Investment Products and Legacy Investment Products.

3.6 Legacy Investment Products: Annuity and mutual fund products that were offered by former Department Service Providers that are no longer under contract but still have Member assets that may or may not receive contributions.

3.7 Service Provider: DMS contracted or non-contracted investment contractor with active and/or inactive contracts for annuity and mutual fund investment products.

3.8 SMSOAP: Senior Management Service Optional Annuity Program. Pursuant to Section 121.055, Florida Statutes, the SMSOAP is a 401(a), Internal Revenue Code, qualified defined contribution retirement plan consisting of annuity investment products for State Personnel System Senior Managers and managerial staff of the Florida Legislature, Judicial Branch, Auditor General, and the State Board of Administration.

3.9 SUSORP: State University System Optional Retirement Program. Pursuant to Section 121.35, Florida Statutes, the SUSORP is a 403(b), Internal Revenue Code, qualified defined contribution retirement plan consisting of annuity and mutual fund investment products for eligible members of the state university faculty, administrators, and staff and employees participating in the State University System who elect to participate in the program.

ITB No.: DMS-25/26-039 Page 3 of 8

4.0 SCOPE OF WORK

The Contractor shall regularly and consistently monitor and analyze the investment options within the Department’s two (2) optional retirement programs, the SUSORP and the SMSOAP.

Based on its monitoring and analyses, the Contractor will provide a minimum of four (4) quarterly Investment Reviews and Reports and one (1) annual comprehensive Investment Review and Report for SUSORP and SMSOAP investment options.

In furtherance of preparing the reviews and reports, the Contractor will obtain the Investment Policy Statement (IPS) from the Department to be used for analysis and monitoring.

The Contractor will also provide ad hoc consulting services relating to the SMSOAP and SUSORP investment related needs.

4.1 Quarterly Requirements

Each quarter, the Contractor will be required to provide the Division with the following:

4.1.1 Investment Performance Review

4.1.1.1 A verbal Investment Performance Review of the Investment Options for the SUSORP and SMSOAP via a telephone, virtual or in-person meeting with the Division.

The Contractor shall coordinate and schedule these meetings to occur within 25 business days from the following end-of-the-quarter dates:

March 31, June 30, September 30, and December 31; and shall ensure that all necessary Contractor staff are in attendance.

4.1.1.2 The Contractor shall provide the following documents and reviews at its quarterly meetings:

a. Investment Options review – the monitoring of each Current and Legacy Product, as contemplated by Section 4.1.2 Investment Performance Report

b. Fiduciary process – monitor the plan’s Investment Options and investment categories for compliance with the plans objectives and document any unusual, notable, or extraordinary events.

c. Department scoring methodology – a twelve (12) point qualitative and quantitative quarterly score based on the Modern Portfolio Theory concept.

d. Investment Options watchlist – a list of underperforming Investment Options subject to heightened review over a reasonable period.

e. Investment Options recommendations – suggestions for potential additional Investment Options or upon removal and/or replacement of underperforming Investment Options.

4.1.2 Investment Performance Report

4.1.2.1 The Contractor shall provide an Investment Performance Report detailing each SUSORP and SMSOAP program Investment Option.

4.1.2.2 The Investment Performance Report shall be due to the Department’s Contract Manager via email within 20 business days from the end of the quarter dates: March 31, June 30, September 30, and December 31.

ITB No.: DMS-25/26-039 Page 4 of 8

The Investment Performance Report must be in accordance with the

IPS.

4.1.2.3 The Investment Performance Report will include the following:

a. Investment option inception date - the date that the option was first offered to investors.

b. Year To Date performance – option performance since the start of the calendar year.

c. One (1) year, three (3) year, five (5) year, and ten (10) year performances – option performances for the previous one (1), three (3), five (5) and ten (10) year periods.

d. Since inception date performance – option performance since the date the option was first offered to investors.

e. Expense ratio percentage - efficiency ratio that calculates management expenses as a percentage of the option’s total cost.

f. Benchmark comparisons – comparison to an appropriate option standard.

g. Investment strategy for investment option – the allocation of investments among different categories, such as stocks, bonds, and cash.

h. Management tenure - the length of time that a manager has been at the helm of a mutual fund.

i. Peer group percentile - relative ranking of the option’s return for the period compared to the peer group’s return expressed as a percentile ranking.

j. Investment options versus peer group evaluation – comparison of the option to its appropriate peer group.

k. Criteria score based on IPS - a twelve (12) point qualitative and quantitative quarterly score based on the Modern Portfolio Theory concept.

l. Investment option watchlist - underperforming funds subject to heightened review over a reasonable period.

m. Calendar year returns – options’ returns for the current calendar year.

n. Executive summary – summary of each option’s criteria scores for the previous four (4) quarters.

4.2 Annual Requirement

Annually, the Contractor will be required to provide the Division with the following:

4.2.1 Comprehensive Investment Performance Report

The Contractor shall provide an Annual Comprehensive Investment Report at the time the Contractor provides the last quarterly investment performance review and report for each year of the Contract and shall be due to the Department’s Contract Manager via email within 20 business days from December 31.

ITB No.: DMS-25/26-039 Page 5 of 8

4.2.1.1 The annual Comprehensive Investment Report will include, but not be limited to, the following:

a. combined and summarized information from all four quarters of the year reported (see section 4.1.2);

b. a comprehensive analysis of the performance of investment options consistent with the criteria established in the IPS;

c. recommendations on Investment Options that should be replaced, to include justification as to each recommendation;

d. retrospective review and future economic analysis of micro and macro economic conditions and the impact on Investment Options;

and

e. an executive summary providing a brief overview of the above topics.

4.2.2 Comprehensive Investment Performance Review

Contemporaneous with the year-end (December 31) Investment Performance Review, the Contractor shall provide a summation of the Investment Performance Reviews occurring during that calendar year with additional discussion of the Comprehensive Investment Performance Review.

4.3 Ad Hoc Consulting

The Contractor will be required to provide the Division with the following:

4.3.1 Consulting for the investment options of the SMSOAP and the SUSORP retirement plans

The Contractor shall provide consulting services, on an ad hoc basis, pertaining to 403(b), Internal Revenue Code, retirement plan investing.

Consulting services will include in-depth research of potential Investment Options and high-level knowledge of laws, rules, and regulations and investment policy best practices pertaining to 403(b), Internal Revenue Code, plans to respond to questions or requests for information from the Division, within very short turnaround timeframes, if necessary. The request for ad hoc consulting shall be submitted in writing to the Contractor. The Contractor shall acknowledge the Department’s request within two (2) business days.

The Contractor shall designate a primary point of contact who will be responsible for handling such requests and quickly providing thorough and accurate information and recommendations to the Division.

4.3.1.1 Evidence of Completion

After a request is made from the Division for consulting services, the Contractor shall provide a written summary of the Division’s question or request and its response to each inquiry.

4.3.2 Location

The Contractor’s employees are expected to work remotely and will not be provided Department equipment or space to fulfill its contractual obligations.

4.3.3 The Contract Manager reserves the right to increase/decrease hours as deemed necessary. Hours may be adjusted based on the status or urgency of scope of work activities or budget limitations. Should hours need to be adjusted, prior written notification shall be provided to the Contractor’s employee.

ITB No.: DMS-25/26-039 Page 6 of 8

4.3.4 Ad Hoc Consulting Meetings

4.3.4.1 Agenda

a. The Contractor shall draft an agenda for any meeting with the Department relating to Ad Hoc services to be held for the Department’s review. The draft agenda shall be submitted five (5) Business Days in advance of the scheduled meeting.

b. Upon written approval of the agenda by the Department’s Contract Manager, the Contractor shall disseminate the approved agenda to all invited participants and/or include it with the meeting invitation.

4.3.4.2 Meeting Location

a. Meetings will be held either in person or via Microsoft Teams or other agreed-to video conferencing methods.

b. Recurring or progress meetings may be held as necessary. Either party may request such a meeting, subject to reasonable notice.

Contractor shall not be entitled to additional compensation for meeting preparation, attendance, or travel.

4.3.4.3 Meeting Minutes

Contractor will provide meeting minutes to the Department within three

(3) Business Days after each meeting held irrespective of the type of meeting held. Minutes will be sent via email to the Department. Minutes shall include, at a minimum, the following:

a. List of all attendees;

b. Invitees not present;

c. Information shared during the meeting;

d. Action items, with due dates and owners; and

e. Decisions made and/or to be made.

4.4 Timesheets

Timesheets shall be submitted in accordance with the requirements set forth in this section.

4.4.1 The Contractor shall provide personnel timesheets evidencing the number of hours worked weekly for each employee engaged in scope of work activities under Section 4.3, Ad Hoc Consulting, with a brief explanation of the performed work for each entry. The timesheet must be signed by the employee and approved by the Contractor. Time shall be billed in 6-minute increments with sufficient detail for audit.

4.4.2 Should there be a discrepancy in the hours worked and/or reflected on the Timesheet, the hours determined by the Department will prevail.

4.4.3 Contractor personnel timesheets must be submitted to the Department’s Contract Manager within five (5) days of the last day of each month that Ad Hoc consulting is performed, and Contractor is requesting payment.

4.5 Department Responsibilities

To assist the Contractor in ensuring that services are delivered as required under the Contract, the Department will provide or perform the following:

4.5.1 Provide the Contractor with any required assistance (e.g., data requests, information resources, direction, etc.);

ITB No.: DMS-25/26-039 Page 7 of 8

4.5.2 Issue financial consequences, as required, and provide a copy of any formal notices imposing financial consequences to the Department’s Contract Administrator;

4.5.3 Review and approve all deliverables, in writing;

4.5.4 Process all completed invoices and record all payments;

4.5.5 Monitor and evaluate the Contractor's performance, as required, during the Contract term and the Contractor’s overall performance at the conclusion of the Contract;

4.5.6 Maintain records regarding Contractor’s performance to be placed on file that will be considered if the Contract is subsequently used as a reference in future procurements; and

4.5.7 Timely review of all documents submitted by the Contractor. Notify the Contractor by e-mail of all approvals, or reason(s) for rejection, corrections and/or revisions required, and timeframe for completion.

5.0 DELIVERABLES

5.1 The Contractor shall submit deliverables in accordance with the Deliverables Table, below, which shall be approved by the Contract Manager in writing, prior to payment.

DELIVERABLE DESCRIPTION ANTICIPATED DUE DATE

Investment Performance Review (quarterly meetings) in accordance with Section 4.1.1.1

Within twenty-five (25) Business Days of March 31st.

Within twenty-five (25) Business Days of June 30th.

Within twenty-five (25) Business Days of September 30th.

Within twenty-five (25) Business Days of December 31st.

Investment Performance Report in accordance with Section 4.1.2.2

Within twenty (20) Business Days of March 31st.

Within twenty (20) Business Days of June 30th.

Within twenty (20) Business Days of September 30th.

Within twenty (20) Business Days of December 31st.

Comprehensive Investment Performance Review in accordance with Section 4.2.2

Within twenty -five (25) Business Days of December 31st.

ITB No.: DMS-25/26-039 Page 8 of 8

DELIVERABLE DESCRIPTION ANTICIPATED DUE DATE

Comprehensive Investment Performance Report in accordance with Section 4.2.1

Within twenty (20) Business Days of December 31st.

Ad hoc consulting service hours in accordance with Section 4.3., Ad Hoc Consulting.

As needed in accordance with directives provided by the Department’s Contract Manager, unless otherwise indicated in this

ITB.

5.2 All deliverables are subject to the approval and acceptance of the Department. Any deliverables submitted but not accepted by the Department will be subject to the applicable performance measure financial consequences, in accordance with Attachment – D, until the Department accepts the deliverable.

5.3 Anticipated due dates are subject to change upon mutually agreed dates set by the Department and Contractor.

5.4 All written documentation, services, and reports submitted by the Contractor are property of the Department.