C250382_Exhibit_A_Scope_of_Work.pdf

RFP 250382

EXHIBIT A

SCOPE OF WORK

Deferred Compensation Plan Investment Advisory and Consulting Services (Non-ERISA Governmental 457(b) and 401(a) Plans)

I. Overview

The Orange County Transportation Authority (OCTA) is seeking proposals from qualified firms to provide investment advisory and consulting services for its governmental Deferred Compensation Plans, including its Internal Revenue Code Section 457(b) and 401(a) plans.

The selected consultant will provide independent, objective investment advisory services to assist the Deferred Compensation Plan Committee (Committee) in fulfilling its oversight responsibilities. The consultant shall act in a fiduciary capacity as defined under applicable law and consistent with governmental plan standards and shall provide advice solely in the interest of plan participants and beneficiaries.

All services shall be performed in accordance with the Plan’s Investment Policy Statement (IPS), applicable provisions of the Internal Revenue Code, California law governing public retirement plans, and industry best practices.

The resulting agreement is anticipated to be for a five (5) year term.

II. Scope of Services

The selected firm shall provide comprehensive investment advisory and consulting services, including but not limited to the following:

A. Governance and Committee Support

• Plan, coordinate, and conduct quarterly Deferred Compensation Plan Committee meetings, and additional meetings as requested.

• Develop and finalize meeting agendas in coordination with OCTA staff and the Plan recordkeeper, ensuring all relevant investment, administrative, and governance topics are addressed.

• Lead presentation of investment performance, market updates, and recommendations to the Committee.

• Prepare and distribute comprehensive meeting materials at least two (2) weeks in advance of each meeting.

• Prepare detailed and accurate Committee meeting minutes for review and approval by the Deferred Compensation Plan Committee.

• Provide ongoing fiduciary and governance education tailored to governmental (non- ERISA) plans.

• Advise the Committee on best practices for oversight, documentation, and decision-making processes.

B. Investment Policy and Strategy

• Conduct an annual review of the Investment Policy Statement (IPS) and recommend updates as needed.

• Ensure alignment of investment options with Plan objectives and participant demographics.

• Assist in maintaining an appropriate investment menu structure.

• Advise on portfolio construction, diversification, and overall investment strategy.

C. Investment Monitoring, Performance Reporting, and Fund Oversight

• Provide comprehensive quarterly investment performance reports that include:

o Historical performance for all investment options o Comparisons to appropriate benchmarks and peer groups o Performance attribution analysis o Risk metrics (e.g., standard deviation, Sharpe ratio, upside/downside capture)

• Monitor and evaluate all investment options for compliance with the Investment Policy Statement (IPS) and stated investment objectives.

• Conduct ongoing due diligence and monitoring of all investment managers and funds, including performance consistency, risk characteristics, organizational stability, and style consistency.

• Identify and communicate any material changes affecting investment options and assess potential impacts to the Plans.

• Establish, maintain, and administer a formal fund review and watchlist process, including defined qualitative and quantitative criteria, and provide recommendations regarding fund retention, placement on watch status, or replacement, supported by thorough quantitative and qualitative analysis.

• Conduct investment manager and fund searches as needed, including establishing selection criteria, screening candidates, and providing recommendations with supporting analysis.

• Recommend and periodically review appropriate performance benchmarks for each asset class and investment option.

• Evaluate investment-related fees and expenses for reasonableness and competitiveness relative to industry standards and comparable plans.

• Ensure the Plan’s investment lineup maintains appropriate diversification and participant choice consistent with the IPS.

• Monitor and evaluate managed account services and target date funds (if applicable), including methodology, performance (as applicable), fees, underlying investments, glide path appropriateness (for target date funds), and alignment with Plan objectives and participant demographics.

D. Recordkeeper Oversight and Plan Administration Support

• Assist in oversight of the Plan recordkeeper, including participation in regular administrative meetings with OCTA staff and the recordkeeper.

• Monitor recordkeeping services, service levels, and plan operations.

• Review and provide transparency on all plan-related fees and expenses.

• Monitor stable value or fixed account options and related contract provisions.

• Provide ongoing consulting support to OCTA Human Resources staff on plan administration and operations.

• Assist OCTA with procurement of plan-related services, as needed, including development of RFP scope and questionnaires, evaluation of proposals with written recommendations, and participation in evaluation committee meetings.

E. Regulatory and Industry Guidance

• Provide guidance on applicable laws and regulations governing governmental plans, including Internal Revenue Code Sections 457(b) and 401(a), and relevant California laws.

• Inform the Committee of regulatory updates, compliance considerations, and industry trends.

• Advise on plan design enhancements and best practices for governmental defined contribution plans.

F. Economic and Market Review

• Provide quarterly economic and capital market updates, including forward-looking insights and potential impacts on the Plan.

G. Participant Communication Support

• Assist in developing participant communication materials related to investment option changes, fund replacements, or plan enhancements.

• Ensure communications are clear, effective, and aligned with participant needs and applicable requirements.

H. Documentation and Recordkeeping Support

• Assist in maintaining Plan governance documentation, including the Investment Policy Statement, Committee Charter, meeting minutes, and other Plan-related documents.

• Support best practices for documentation and audit readiness.

III. Deliverables

The consultant shall provide:

• Quarterly investment performance reports

• Quarterly economic and market reports

• Committee meeting agendas, materials, and minutes

• Annual Investment Policy Statement review and recommended updates

• Fund due diligence and search reports

• Fee and expense analysis reports

• Additional analyses and reports as requested

All deliverables shall be provided in electronic format, with hard copies available upon request.

IV. Service Expectations

• Act in a fiduciary or advisory capacity as defined in the agreement and applicable to governmental plans.

• Provide independent, objective, and conflict-free advice.

• Disclose all potential conflicts of interest.

• Maintain transparency in all recommendations and fee structures.

• Deliver services in a timely, proactive, and professional manner.

LIMITATION ON GOVERNMENTAL DECISIONS

Nothing contained in this scope of work permits Consultant personnel to authorize or direct any actions, votes, appoint any person, obligate, or commit OCTA to any course of action or enter into any contractual agreement on behalf of OCTA. In addition, Consultant’s personnel shall provide information, an opinion, or a recommendation for the purpose of affecting a decision without significant intervening substantive review by OCTA personnel, counsel, and management.