Final_Responses_to_Custodian_Banking_Services.docx

Responses to Custodian Banking Services

PBGC01-RP-14-0007

April 7, 2014

1. Reference Section B. Pages 6-27 – The pricing schedules in Section B do not contain a section in which to provide fees for performance measurement and related services. If these are required services, please advise how you would like to have these fees included in the pricing schedules.

Response: These services are adequately represented in the RFP and shall not be priced separately.

2. Reference Section B. Is there an ability to add in additional fee categories to the pricing grids in Section B for services that may apply but for which volumes were not provided?

Response: No.

3. Reference Section B. Page 6, Section B.2, Custodian Banking Services Pricing: Are the fees included in this section intended to be flat annual fees or are they simply totals of the Menu Based fees?

Response: Totals of Menu based fees.

4. Reference Section B. Page 7, Section B: There are no fee grids for pricing the option of a 1 year base fee and 9 one year options. How would you like us to present those fees?

Response: See instructions in the RFP and the Amendment 01- Section B. Additionally, the Word Version of the Section B is provide as a separate attachment.

5. Reference Section B. Page 21, Section B.6, PBGC Account Assumptions: In addition to the 35 separate accounts and 15 commingled funds, does the fund hold any additional assets such as LPs, Real Estate funds and Hedge Funds. If so, please provide the number of accounts holdings these assets.

Response: The PBGC does hold private market limited partnerships (inclusive of both private equity and private real estate) and hedge funds. There are a very small number of hedge funds set up as line items in PBGC’s main commingled holdings account as the PBGC awaits for redemption periods to end. With respect to private markets assets, the PBGC has three main portfolios, two of which are set up as aggregate line items as PBGC’s contractors provide the valuation of the underlying portfolios and the contractors provide the aggregate dollar amounts. The third portfolio is commingled at PBGC’s current custodian and numbers approximately 88 distinct limited partnerships as of December 2013.

6. Reference Section B. Please provide the Domestic Market Value ($50 b) broken down by separately managed assets vs. line item assets Response: The 50B is an estimate and providing a breakdown of this information is not available.

7. Reference Section B. Reference Section B. Page 24, Section B.6, #9, Transition Costs per quarter: Please clarify what the volume of transfers of physical securities represents?

Response: The number of 15,000 represents each transfer of a physical security.

8. Reference Section B. Page 25, Section 10, Servicing of Bank Loans: Please provide the following information on your bank loan portfolio:

· Reference Section B. Page 25, Section 10, Servicing of Bank Loans: Please provide the following information on your bank loan portfolio: Market values of the bank loans by the tiers provided in the pricing grid

Response: The market values of the bank loans are not available because PBGC assumes that the market values should not affect the pricing.

· Reference Section B. Page 25, Section 10, Servicing of Bank Loans: Please provide the following information on your bank loan portfolio: Is PBGC acting as agent for these loans or are you purchasing loans as investments in the portfolio?

Response: PBGC is purchasing the market values of the bank loans as investments in the portfolio as these are not available because PBGC assumes that the market values should not affect the pricing.

· Reference Section B. Page 25, Section 10, Servicing of Bank Loans: Please provide the following information on your bank loan portfolio: Are the bank loans actively traded or bought and held?

Response: Bank loans could be both actively traded or bought and held.

· Reference Section B. Page 25, Section 10, Servicing of Bank Loans: Please provide the following information on your bank loan portfolio: Are there any private loans?

Response: No.

9. Reference Section B. Page 25, Section 11, Pricing of OTC and Centrally Cleared Derivatives: Please provide a breakdown of the 3,200 positions as follows:

· # of OTC derivative positions

· Response: The # of OTC derivative positions is not available because PBGC assumes that the # of OTC derivative positions should not affect the pricing.

· # of positions by type of OTC derivative

Response: The # of positions by type of OTC derivative is not available because PBGC assumes that the # of positions by type of OTC derivative should not affect the pricing.

· # of Centrally Cleared derivative positions Response: The # of Centrally Cleared derivative positions is not available because PBGC assumes that the # of Centrally Cleared derivative positions should not affect the pricing.

10. Reference Section B. Page 26, Section 5, Securities Lending Services Revenue Estimate: Would the following indexes be appropriate to use as benchmarks for the securities lending analysis? If not, please provide further details regarding the specific indexes:

· For the Barclays US Treasury Index – the Barclays United States Treasury ESC Composite

Response: No, use the Barclays Capital U.S. Treasury Index, which is a component of the U.S. Aggregate Index.

· Reference Section B. For the Barclays US Agency Index (subcomponent of the Barclays US Aggregate Index) – the Barclays U.S. Aggregate GLA Eligible - Agency Index

Response: No, use the Barclays Capital U.S. Agency Index, which is a component of the U.S. Aggregate Index.

· Reference Section B. For the Barclays US Corporate Index – the Barclays U.S. Corporate Index (A3/A-)

Response: No, use the Barclays Capital U.S. Corporate Investment Grade Index, which is a component of the U.S. Aggregate Index.

11. Reference Section B. Page 26, Section 5, Securities Lending Services Revenue Estimate: What is the current securities lending fee arrangement? E.g., straight split, tiered split, etc.. Does the PBGC prefer a certain type of fee arrangement?

Response: The current securities lending fee arrangement is straight split. No, please refer to the RFP for instructions.

12. Reference Section B. Does the PBGC currently use any third party securities lending agents?

Response: No.

13. Reference Section C. Page 30, Section 2.0, Introduction – The Revolving Fund: Are all of the assets held in a single account or are there multiple accounts? In what format does PBGC provide information for the Revolving fund from the US Treasury to the current provider? What data elements are provided for the Revolving fund? What reporting is required?

Response: The accounting and financial reporting of Revolving Fund assets is not within the scope of this RFP. However investment performance reporting of Revolving Fund activity is required under this contract. That being said, assets are in multiple accounts which include Cash, Treasuries, and TIPS. Files are sent by PBGC to custodian bank analytics in Excel format. In regard to data elements, information for the Treasury portfolio includes holdings, CUSIPs, a listing of monthly trades, accrued interest and valuation. Reporting is incorporated into performance reporting for the Total Fund.

14. Reference Section C. Page 33, Section 3.1.1.5.1, Optional Services: - Please provide the following additional information on the 10 Escrow Account Mortgages:

· How do these accounts operate?

Response: PBGC believes the information related to this section is adequately described in the RFP.

· How many loans are in each account?

Response: For purposes of the solicitation, there would be one loan in each account.

· Are the funds to be held in these escrow accounts for residential, commercial or other types of loans?

Response: Funds to be held in these escrow accounts may be residential, commercial, or other types of loans.

· Do the balances in these escrow accounts represent escrow balances for loans that the service provider is servicing or are the balances for loans serviced by third party servicers?

Response: Any escrow balances would represent loans that the service provider is servicing

· Is there a current servicer in place for these loans?

Response: Yes.

· Are these loans whole loans, portfolios of loans, etc.?

Response: Yes, these loans could be either of these.

· Do you have the jurisdictions (country) for where the loans were originated or where the collateral for the loan resides?

Response: No.

· Would the service provider be holding loan notes, and mortgage documents? If yes can the loans and collateral documents be held in the U.S.?

Response: Yes, the service provider would hold loan notes and mortgage documents. Yes, the loans and collateral documents may be held in the U.S.

15. Reference Section C. Page 33, Section 3.1.2, a: Please clarify if your requirement for Settlement Date Accounting (Contractual and Actual basis) is for all accounting ledgers (i.e. would the Balance Sheet and Income Statement and gains/losses) need to be expressed in terms of settled date or is this just a requirement to run custody cash ledgers as settled actual and contractual?

Response: Each transaction should be accounted for using the same date in each ledger.

16. Reference Section C. Page 33, Section 3.1.2, f: Please elaborate on the requirement to provide “separate recording of discounts and allowances for each receivable”.

Response: This section is adequately described.

17. Reference Section C. Page 33, Section 3.1.2, h: Please provide additional information on this requirement. Do you require the custodian to track ownership of the defunct plans in the Trust Fund via unitized accounting? If so, please provide additional details on the number of plans, etc… Response: No.

18. Reference Section C. Page 36, Section 3.3.1.6, Daily Valuation of Assets: Does the PBGC require the striking of an audited daily NAV or is monthly valuation required?

Response: Transactions need to be valued on the day they occur and at the end of each month, all assets must be valued.

19. Reference Section C. Page 36, Section 3.3.1.10: Please elaborate on the process of the custodian receiving assets in and assigning a unique numerical identifier. We would like to understand in more detail how this process works with your current provider.

Response: This section is adequately described and cannot elaborate on the current provider’s process.

20. Reference Section C. Page 37, Section 3.3.1.14.2: Is the independent pricing source chosen by the PBGC or a secondary pricing source of the custodian’s.

Response: PBGC works in collaboration with the Custodian Bank to determine the appropriate independent pricing source.

21. Page 37, Section 3.3.1.16:

· Does the PBGC receive a custom general ledger feed into your accounting system today?

Response: No

· Can you provide more commentary or detail around your general ledger classifications?

Response: PBGC works in collaboration with the Custodian Bank to determine the appropriate general ledger classifications.

· Specifically are your general ledger accounts specific to asset type or are they more generic at the account level. For example, does the PBGC break out cost by Cash and Cash Equivalents, Fixed Income, Equity etc.? Or is there just one general ledger account for Cost?

Response: The general ledger accounts are specific to asset type and breaks them out by cash and cash equivalents, Fixed Income, and Equity which are further broken down to asset types. No, there is not just one general ledger account for cost.

22. Reference Section C. Page 40, Section 3.4.3.5: Which third party risk system does the PBGC currently use?

Response: The third party risk system that PBGC uses is BlackRock’s Green Package.

23. Reference Section C. Page 42, Section 4.1.2.5.1: For performance measurement, is PBGC looking to have data elements loaded other than gross and net of fee returns and market values since inception? Does PBGC expect holdings to be loaded for any reporting purposes?

Response: At this time, PBGC does not anticipate requiring additional information to ensure its performance history is accurately recorded, however, it is difficult to definitely determine this until the process commences. Other than a limited number of months during a potential transition period, the PBGC does not expect further historical position holdings to be loaded.

24. Reference Section C. Page 43, Section 4.1.2.7: Please provide the benchmarks you are using? Please provide your custom benchmarks and the components used.

Response: PBGC utilizes various benchmarks and custom benchmarks that may include the following:

Russell 1000 Growth Index, Russell 1000 Value Index, S&P 500 Index, Russell 2000 Index, Dow Jones US Completion Index, Russell 3000 Index, Dow Jones US Total Stock Market Index, Dow Jones US Select Real Est Sec Index, MSCI EAFE Standard Index, MSCI EAFE Small Cap Index, MSCI EAFE IMI Index, MSCI Canada Standard Index, MSCI Emerging Markets Standard Index, MSCI ACWI ex-US Standard Index, MSCI ACWI ex-US IMI Index, Barclays Capital Long Gov/Cred Index, Barclays Capital Aggregate Bond Index, Barclays Capital US TIPS Index, Barclays Capital US HY Ba/B 1% Capped Index, Barclays Capital US Universal Index, BC Global Aggregate Index, Hedged, BC Global Aggregate ex-US Index, Hedged, JP Morgan EMBIG Diversified, Barclays Capital Multiverse Index, 3 Month Treasury Bill, 4 Week Treasury Bill, Wilshire US Large Growth Index (custom), Wilshire US Large Value Index (custom), Wilshire US Top 2500 Growth Index (custom), Wilshire US Top 2500 Value Index (custom), S&P Midcap 400 Index, Trust & RF Long Duration Bonds Benchmark, Barclays Capital Aggregate Bond Index, 75% BC US Aggregate / 25% BC Global ex-US Aggregate, Barclays Capital US Treasury, Barclays Capital Treasury Index, Barclays Capital Global Aggregate Index, Unhedged, Barclays Capital US Treasury 7+ Index, Barclays Capital US Treasury Intermediate Index, BC U.S. Government: Intermediate, BC U.S. Government: Long, BC Intermediate Corporate, BC Long U.S. Corporate, BC Long A+ Credit Index, BC CMBS (AAA/Aaa) Index, BC Agency MBS Index, JP Morgan Emerging Markets Bond Index Global Diversified, JP Morgan Global Bond Index Emerging Markets Global Diversified, JP Morgan CEMBI Broad Index, Barclays US Aggregate

25. Reference Section C. Page 43, Section 4.1.2.7: Is PBGC looking for monthly or daily buy and hold attribution to the security level? Is this the same for equities and fixed income?

Response: Since the accounting process is monthly versus daily, the attribution analysis will also be based on monthly holdings.

26. Reference Section C. Page 43, Section 4.1.2.10: If possible, please share the Trade Cost Analysis reports you are currently receiving.

Response: The information in the TCA reports is proprietary to the current vendor.

27. Reference Section C. Page 45, Section 5, Other Services, 5.1.2: Please provide further details on requirements around this service.

Response: Through the termination and trusteeship of pension plans by the PBGC as well as through the bankruptcy process and settlement agreements executed between the PBGC and former plan sponsors (and former plan sponsor affiliates), the PBGC receives certain assets considered to be illiquid relative to other types of securities received. This includes, but not limited to, direct real estate; equity (common and preferred) in non-publicly traded entities; equity in publicly traded entities which may be subject to lock up periods, represent large block positions, and/or are thinly traded; fixed income securities such as promissory notes; collateralized debt obligations; bankruptcy claims; partnership interests; and physical assets such as jewelry, art, coins, and other miscellaneous property. These special situation assets are assigned to an investment manager for valuation, management and ultimate liquidation. The custodian houses the special situations account and is responsible for monthly reporting and may be required to price the publicly traded securities in the portfolio, but will generally rely on the investment manager for the monthly valuations and will participate in the monthly reconciliation process to ensure correct valuations and cash flows. The custodian will act on direction from the PBGC to establish line items on the accounting schedules for this account as new assets are received. It will also act on direction from the investment manager to remove these line items as the assets are liquidated. Further, it will be responsible for receiving and recording flows such as interest and rent payments.

28. Reference Section C. Page 68, Section 9, Transition, 9.2.8: Please provide the type of historical data that requires backloading, i.e., performance data, accounting data, etc..

Response: Historical investment performance returns and asset levels will require backloading since inception.

29. Reference Section H. Page 78, Section H.6, PBGC Information Security: Please provide the specific sections of the NIST 800 series to which the custodian must adhere. If the custodian is not NIST compliant, what are the expectations around the timeframe to become NIST compliant? Please also provide the specific sections of FISCAM and the technology orders listed in a, b and c of this section to which the custodian must adhere.

Response: Per the PBGC Clause PBGC-04-004, the provider of information technology, if applicable, shall adhere to the NIST PIPS. In addition to this, the provider of the information technology must adhere to the PBGC implementation of Security Guidelines (800 series), as detailed in section 5a) of the subject clause, in which the document can be found here: http://www.pbgc.gov/docs/im_05_2.pdf. It is the expectation of PBGC that the offeror/custodian will be NIST compliant immediately upon award. Per the PBGC Clause PBGC-04-004, the must adhere to the FISCAM in its entirety and to the orders listed in a, b, and c in their entirety, which can be found at the links within the clause.

30. Reference Section H. Page 84, Section I, Contract Clauses: Are each of the FARs referenced in this section intended to be incorporated into the Contract?

Response: The FARs are not referenced on page 84. If the question is if each of the FAR clauses referenced are intended to be incorporated into the contract, the answer is yes.

31. Reference Section H. What is the process for introducing and including service-specific contractual terms and conditions as part of a Proposer’s response that would be included in an eventual Contract? May we include copies of our relevant agreements for your review and if so, what volume should contain these agreements?

Response: The offeror may include service-specific proposed contractual terms and conditions in Volume 3 and identify them as Exceptions to the Terms and Conditions. Copies of relevant agreements are not required at this time.

32. Reference Section H. What is the process for qualifying, modifying or taking exception to the various contractual language/terms and conditions in the RFP? Which volume should contain those exceptions?

Response: The offeror may include service-specific proposed contractual terms and conditions in Volume 3 and identify them as Exceptions to the Terms and Conditions.

33. Reference Section L. Page 104, Section 1.3.7.3, Letter of Transmittal: Which volume should contain the Letter of Transmittal?

Response: Volume 1

34. Reference Section L. Page 106, Section 1.5.1.1, Offer Validity Statement: What volume should contain the Offer Validity Statement?

Response: Please include the Offer Validity Statement in the Letter of Transmittal – Volume 1

35. Reference Section L. Page 106, Section 1.5.2, Phase 2, Volume 2, Factor 1, Technical Approach, items 1-8: To meet the requirements of 1-8, would you like us to respond to each item in the SOW individually or are you looking for a narrative response to items 1-8? Are the additional items requested on p.107 (the COOP, QCP, and Transition plans) included in the 200 page limit?

Response: Items 1-8 are high-level descriptions of the SOW sections and are not meant to be an all-inclusive list of the requirements of the SOW. Per the RFP, the proposal shall clearly and concisely describes how the Offeror’s proposed solution will accomplish all of the requirements of the SOW in Section C of the solicitation. Please see RFP for full details about the evaluations of proposals. The COOP, QCP, and the transition plans are part of the technical approach. The page limit for Phase 2, Volume 2, Factor 1 has been increased from 200 to 300.

36. Reference Section L. Page 107, Section 1.5.2.1, Request for Additional Information: Are the sample reports requested to be provided in a separate binder from Volume 2? Please clarify the intent of the statement “attach separately to Volume 2 and label accordingly”.

Response: The sample reports are to be provided in a separate binder from the Request for Additional Information submission. The phrase “attach separately to Volume 2 and label accordingly” means the supporting documentation to the Request for Additional Information section shall be bound separately and clearly identified with the appropriately named sample / example reports, statements, or exhibit.

37. Reference Section L. Page 115, Section 1.5.3, Phase 2, Volume 2, Factor 2, Corporate Experience: Please clarify what is meant by “reach back capabilities” at the top of p.115.

Response: Reach back capabilities are additional knowledge, resources, and expertise the offeror may have available in support of this requirement.

38. Reference Section L. Page 116, Section 1.5.5, Phase 2, Volume 2, Factor 4, Past Performance: At the top of p.116, a one page description of three past performance reference contracts is requested. Is the one page description required for the client references filling out the past performance questionnaire does this request pertain to 3 additional clients?

Response: The three, one page descriptions should be for the same clients that will be completing the questionnaire.

39. Reference FOD and CID Exhibits. FOD Exhibit II, Share Activity Report: Please explain what information is included in this report. Is this report related to the custodian tracking ownership of the defunct plans in the Trust Fund?

Response: The report represents the monthly activity of shares issued to the Trust Fund for assets transferred from Trusteed plans.

40. Reference FOD and CID Exhibits. CID Exhibit M, Manager Reconciliation Report and CID Exhibit N, Allocation Estimate Report: If possible, please provide clearer images of the report as these are hard to decipher.

Response: Clearer images of the report will be provided via Amendment 01.

41. Reference FOD and CID Exhibits. Does the PBGC engage in any commission recapture programs?

Response: No.

42. Since Transition Management Services are listed as an Optional Services in PBGC solicitation PBGC01-RP-14-0007, would the PBGC entertain a proposal solely focused on Transition Management Services, which would include completing the appropriate Pricing Grid provided in Section B.5.1 Optional Services Estimated Pricing, and B.5.2.1 Optional Services Pricing for CLIN 0003, based on Section B.7. Optional Services Assumptions?

Response: Offeror(s) shall submit a detailed proposal that clearly and concisely describes how the Offeror’s proposed solution will accomplish all of the requirements of the SOW in Section C of the solicitation. Proposals shall contain all the pertinent information in sufficient detail in the area of the proposal where it contributes most critically to the discussion of the same information. Please refer to the RFP for more information.

43. Clarifying Questions relating to Revolving Fund Section 2.0 Introduction: What is the frequency of performance on the Revolving Fund, and what is the performance methodology?

Response: Performance is calculated monthly by custodian bank analytics and the methodology is consistent with that of the PBGC Trust Fund.

44. Clarifying Questions relating to Revolving Fund Section 2.0 Introduction: Please provide the average # of monthly positions in the Revolving Fund?

Response: 60 securities

45. Clarifying Questions relating to Revolving Fund Section 2.0 Introduction: Please provide the average # of daily, weekly, and monthly transactions (holdings & cash) in the Revolving Fund?

Response: At least once per day the One Day Investment, plus on average at least another five trades per week (which may occur on one or two days during the week and in either of the LD or TIPS accounts) and therefore, on average a total of 60 trades per month.

46. Clarifying Questions relating to Revolving Fund Section 2.0 Introduction: How will daily transactions, including but not limited to buys, sells, write-downs, maturities, cash payments, be communicated to the contractor? By whom, PBGC, Treasury, Bureau of Public Debt, other? In what format, SWIFT, File, XLS, PDF, other? Timing, Trade Date (T), T+1, Settle Date, other?

Response: PBGC will send a detailed excel based file each month.

47. Clarifying Questions relating to Revolving Fund Section 2.0 Introduction: How will daily holdings and cash balances be communicated to the contractor? By whom, PBGC, Treasury, Bureau of Public Debt, other? And in what format, SWIFT, File, XLS, PDF, other? Timing, Trade Date (T), T+1, Settle Date, other?

Response: PBGC will send a detailed excel based file each month.

48. Clarifying Questions relating to Revolving Fund Section 2.0 Introduction: Who will the contractor reconcile holdings and cash against, PBGC, Treasury, Bureau of Public Debt, other?

Response: At present, the contractor will not need to perform a reconciliation. PBGC and the Bureau of Public Debt perform a reconciliation before the data is sent to the custodian bank.

49. Clarifying Questions relating to Revolving Fund Section 2.0 Introduction: Is there anything unique about these securities held at the US Treasury that may impair or prohibit the contractor from retrieving prices from vendors? If yes, who will provide prices, PBGC, Treasury, Bureau of Public Debt, other, and what is the timing?

Response: No.

50. Clarifying Questions relating to Revolving Fund Section 2.0 Introduction: Section 3.4.3.5: Who is PBGC’s risk management system provider? Including holdings information, what “other pertinent PBGC holdings information” is required? What are the format, frequency, and method of communication? Please provide a sample.

Response: BlackRock’s Green Package. Contractor will need to provide detailed holdings information (for all asset classes, including, but not limited to, domestic and international public equities; domestic and international fixed income; derivatives such as, but not limited to, interest rate swaps, CDS/CDX, forwards, futures, options; and Private Equity/Real Estate) on a monthly basis in a comma delimited file via secure FTP including, but not limited to, CUSIP, ticker, security name, shares owned, and certain other information.

51. Section 3.1.2(a): Besides the 3 accounting methodologies listed, please provide others that may be required ?

Response: There are no other accounting methodologies.

52. Section 3.1.9: Please provide OTC and Centrally Cleared average # of positions by type (i.e. CDS, CDX, IRS, etc), and expected volumes by type?

Response: PBGC does not believe this information to be relevant for purposes of this requirement. Please see the solicitation for full details.

53. Section 3.3.1.16: Please provide a sample Detailed Trial Balance Report using PBGC’s classifications.

Response: A sample of this report is included in the exhibits (Statement of Net Asset – Exhibit FOD GG)

54. Please clarify section 3.2.4 statement “ The Custodian Bank shall make available, all identified in this contract, written procedures ,processes, and or policies to PBGC within thirty (30) calendar days upon written request.” Please provide a sample request?

Response: While the requests may be formal or informal and be sent in writing or via email, a sample request is as follows:

Date: MM/DD/YYYY Dear Vendor:

As required by contract number ___________, this is to request that you provide the Pension Benefit Guaranty Corporation with your approved written policies and procedures to access and apply exchange rates for all types of transactions and position valuations by mail or email to the following addresses:

Street Address

Mr. or Ms. ____________________ Pension Benefit Guaranty Corporation 1200 K Street, NW Washington DC, 20005

Email Address

Lastname.Firstname@PBGC.gov

Thank you in advance for your assistance and cooperation.

Sincerely,

55. Please provide a breakout of the number accounts by asset class that require performance service (i.e. fixed income vs. equity?

Response: Approximately 14 public equity (predominantly index commingled funds, but also containing actively managed separate accounts); approximately 30 fixed income (predominantly actively managed separate accounts).

56. As custodian bank, would Contractor be required to post collateral to secure any cash balance held under the custody relationship and/or be subject to any qualified public depository rules (or any similar rules) in effect?

Response: At this time, the PBGC is not aware of the need for the Custodian Bank to post collateral to secure any cash balance held under the custody relationship. PBGC would look to the Custodian bank to determine if it is subject to any qualified public depository rules (or any similar rules) in effect.

57. Regarding Section I.25 and FAR 52.212-5(b), please confirm that only the FAR clauses marked with an “X” (in the left margin) are deemed incorporated by reference into the contract.

Response: PBGC confirms that the only FAR clauses in 52.212-5(b) marked with an “X” are incorporated by reference.

58. Regarding Section H.7 – PBGC-04-005, Contractor/custodian typically does not have access to any personally identifiable information (PII) of pension plan participants. Please confirm whether any PII will be provided to the Contractor pursuant to this RFP.

Response: PBGC has removed this clause from the solicitation. See Amendment 01.

59. Please list all services / scope of service performed by the current custodian?

Response: PBGC cannot provide a full list of the current services / scope of service performed by the current custodian. Please refer to the solicitation for a full list of the current scope of work needed for the current solicitation.

60. Can you please advise what were the total custodial fees paid to your existing provider for 2011 and 2012, inclusive of all the services contemplated within your RFP?

Response: A yearly breakdown of fees paid to PBGC’s existing provided cannot be provided.

61. What are your average cash balance levels both in USD and foreign currency? For foreign balances, what is the currency breakdown?

Response: The average cash balance level for a 12 month period is $11.8 million (USD) and $28.4 million (foreign). Foreign currency is represented by greater than 30 different countries.

62. What is the highest value FX trade expressed in USD and what is the average?

Response: PBGC cannot provide this value.

63. What is the highest value wire transfer expressed in USD and what is the average?

Response: PBGC cannot provide this value.

64. Concerning OTC and centrally cleared derivatives (3.1.6), how many trading entities does PBCG have?

Response: Currently 5 trading entities, but could be up to 8.

65. Concerning OTC and centrally cleared derivatives (3.1.6), how many overall collateral relationships does PBCG have?(CSA’s, MSFTA’s, FCM’s, Clearing Brokers) Response: The number of overall collateral relationships that PBGC has is 15 to 20 OTC derivatives counterparties.

66. Concerning OTC and centrally cleared derivatives (3.1.6), how many external investment managers does PBCG use?

Response: Currently 5 external investment managers, but could be up to 8.

67. Concerning OTC and centrally cleared derivatives (3.1.6), which asset types are held and posted as collateral?

Response: The asset types held and posted as collateral include Cash and Cash Equivalents for OTC derivatives and exchange determined for centrally cleared derivatives.

68. Concerning OTC and centrally cleared derivatives (3.1.6), which underlying instruments require collateral?

Response: All OTC and centrally cleared derivatives require collateral, but levels vary.

69. Regarding Securities Lending, Current Lending Status. Are you currently engaged in securities lending?

Response: Yes.

70. Regarding Securities Lending, Current Lending Status. Can you disclose your current revenue sharing arrangement?

Response: No.

71. Regarding Securities Lending, Current Lending Status. What is the aggregate value on loan? Please provide a detailed listing of loans outstanding.

Response: From the PBGC Annual Report 2013, the total value of securities on loan at September 30, 2013 was $4,230 million. A detailed listing of loans outstanding is not necessary for completion of this RFP.

72. Regarding Collateral, Current Lending Status. Are you expecting to transition any legacy cash collateral investments to the new provider? If yes, which assets do you intend to transfer?

Response: No

73. Regarding Securities Lending, Current Lendable Assets. Page 27 of the RFP shows a high level summary of lendable assets and provides general characteristics of each asset type. In order to provide the most accurate and detailed revenue estimate, which will also allow for easier comparison by the PBGC of securities lending proposals, please provide a detailed asset listing (e.g., cusips/sedols, shares, par, security description, etc.) for all assets eligible for loan (in Excel format) for analysis.

Response: PBGC cannot disclose our current portfolio holdings publicly. Therefore, PBGC provided the assumptions on page 27 for purposes of price evaluation only. Please refer to the RFP for instructions.

74. Regarding Securities Lending, Options. Does section 4.1.2.4 on page 42 of the RFP indicate that the PGBC would consider a bid or proposal for only securities lending services where the custodian is not the securities lending agent? If yes, would a securities lending only bid be acceptable and strongly considered in-lieu of a bundled bid for all services required in the RFP?

Response: Offeror(s) shall submit a detailed proposal that clearly and concisely describes how the Offeror’s proposed solution will accomplish all of the requirements of the SOW in Section C of the solicitation. Proposals shall contain all the pertinent information in sufficient detail in the area of the proposal where it contributes most critically to the discussion of the same information. Please refer to the RFP for more information.

75. Section 3.4; item 3.4.3.2.1 references receipt of a “provide by Client (“PCP”) list” Please explain what that a PCP list is.

Response: In Section 3.4; item 3.4.3.2.1, the term is Provide by Client (“PBC”) and not “provide by Client (“PCP”). PBC is a typical term used by auditors to identify information prepared by the organization being audited.

76. Reference 1.5.2.1 REQUEST FOR ADDITIONAL INFORMATION “Securities Lending Clients

2. What are the number of principal clients and agent lending clients in your business? List the percent breakdown, number of each client type, and lendable assets for each year from 2008-2012 for the following groups:

i. Non-Affiliated Lending with Custody

ii. Non-Affiliated 3rd Party Lending (No Custody)

iii. Affiliated Lending” Could PBGC clarify what is the meaning / definition of “Affiliated Lending” on page 111?

Response: Affiliated lending is lending performed for index/active funds managed by an asset management firm that is affiliated with the custodian bank.

77. Within your securities lending program do you currently following ERISA regulations?

Response: Yes.

78. Reference 4.0 INVESTMENT SERVICES AND SUPPORT “4.1.2.4.1 Support a minimum of two securities lending due diligence meetings per year, at least one of which will be on site at the Custodian Bank. The Custodian Bank should also support ad hoc reporting and industry trend discussions. PBGC also uses a securities lending consultant and requires that the Custodian Bank provide data for the consultant’s review of securities lending performance. The Custodian Bank shall review the output from the consultant to verify the accuracy of the output and to facilitate discussions with PBGC.”

What is the frequency of the data provided to the securities lending consultant?

Response: Quarterly.

79. Are there other 3rd party vendors / contractors that receive data transmissions? If so, what is the frequency of these transmissions?

Response: SunGard Astec Analytics and securities lending transmissions are daily.

80. Reference 1.5.2.1 REQUEST FOR ADDITIONAL INFORMATION “Securities Lending Cash Collateral

8. For repurchase agreements, please list all acceptable collateral.”

Is PBGC requesting specific types of repo collateral be indemnified?

Response: PBGC is not requiring that repo collateral be indemnified.

81. Reference SECTION H SPECIAL CONTRACT REQUIREMENTS “H. 7 PBGC-04-005 PROTECTION OF PERSONALLY IDENTIFIABLE INFORMATION (PII) (FEB 2013)” What personnel at the contractor are required to attend the PII training?

Response: PBGC has removed this clause from the solicitation. See Amendment 01.

82. Reference SECTION B.7. Optional Services Assumptions “5) Securities Lending Services Revenue Estimate (Section 4.1.2.4):”

Would you provide a holdings listing in EXCEL format containing the information on the attached spreadsheet to ensure consistency in interpretation of PBGC’s actual holdings?

Response: No. PBGC cannot disclose our current portfolio holdings publicly. Therefore, PBGC provided the assumptions on page 27 for purposes of price evaluation only. Please refer to the RFP for instructions.