PERS S 45900_00014078 RFP AttH Statement of Work Final.pdf

RFP S 45900-00014078 – PERS Actuarial Services Att H

PERS RFP S-45900-00014078 AttH Statement of Work Page 1 of 5

ATTACHMENT H - STATEMENT OF WORK

Proposer shall provide PERS the actuarial services and deliverables set forth below.

All such services shall meet the highest standards prevalent for actuarial services. All costs must be reflected on Attachment E (Price Proposal).

1. Actuarial Services Based on a monthly Retainer Fee

The following actuarial services shall be provided by Proposer under a set monthly retainer fee:

1.1. Attendance of a Qualified Actuary at regular and special Board and PERS staff meetings. Proposer shall assume approximately twenty (20) meetings every two years.

1.2. Provide regular assistance by a Qualified Actuary to PERS staff, by telephone, e-mail, writing, or personal meeting as necessary to prepare information for the staff or Board or to respond to questions raised by the staff or Board. Proposer is required to provide availability by telephone during PERS’ normal business hours of a Qualified Actuary familiar with PERS. Proposer should expect to return phone calls or respond to e-mails no more than one (1) business day and respond to other correspondence no more than five (5) business days, after request is received by Proposer. During legislative sessions, responses to phone calls and e-mails must be no more than four (4) hours from time of request.

1.3. Respond to requests for information from representatives of PERS-participating political subdivisions, including their auditors, with prior approval by PERS.

1.4. At the request and direction of the Board or PERS staff, submit to and cooperate fully in audits of the methodology used to provide the actuarial services required under the Contract. Cooperate fully with the independent audit of the actuarial services that are completed every 5 years.

1.5. Inform PERS of any new developments or changes in federal or state legislation, GASB standards, or tax regulations regarding financing, benefits, vesting, fiduciary responsibility or disclosure, and assist PERS in implementing such changes as they pertain to actuarial requirements pertinent to PERS.

1.6 Allow PERS, with attribution to Proposer, to republish or link to articles, research papers, or other education materials that Proposer may distribute to its clients that PERS chooses to redistribute to its members, employers, or other stakeholders.

2. Actuarial Services based on a Fixed Fee.

The following actuarial services shall be provided at a fixed fee per project. If the parties agree that additional work is required as a result of unforeseen circumstances such as state or federal legislative or regulatory changes, additional work shall be authorized by a Work Order and be consistent with the rates contained in Attachment E (Price Proposal).

PERS RFP S-45900-00014078 AttH Statement of Work Page 2 of 5

2.1 Experience Studies. Analysis of experience of the membership of the System, including recommendations of economic and non-economic actuarial assumptions to be used in future valuations, to be completed on or before the regularly scheduled July meeting of the Board in all odd-numbered years, based on data for the two-year period ending on December 31st of the previous even-numbered year. This analysis shall include an experience study for each of the defined benefit plans that are part of the System, including the Health Insurance Program, with separate analyses for ORS Chapter 238 and 238A Benefit Groups. Proposer shall assume the issuance of at least one experience study every two years.

2.2 Valuations. Provide one full actuarial valuation of the System every year, in compliance with ORS Chapter 238 and 238A, on the System's fund value and liabilities as of December 31 of the preceding calendar year. Unless otherwise approved by OPERS, Proposer shall perform the actuarial valuation using the actuarial methodology described in its response. Services will include but are not limited to:

2.2.1. Presentation to the Board of a detailed valuation report for the System, signed by a Qualified Actuary, at the regularly scheduled July or September meeting of the Board every year. The report shall include a summary of the results by employer group, analysis of retired reserves, analysis of active data by employer group, and other analyses or information appropriate to include in a detailed valuation report or as directed by the Board or by PERS staff.

2.2.2. Preparation of individual valuation reports for each participating employer or actuarial pool, including the results of the valuation and recommended contribution rates, and information to make financial statement disclosures in accordance with generally accepted accounting principles and GASB standards.

This information will be due on or before October 31 of each year based on the valuation as of December 31st of the previous year. These summaries must identify all significant factors that contributed to determination of each employer's rate and provide other relevant valuation information as directed by PERS staff.

2.2.3. Provide explanatory text describing key actuarial assumptions, methodology and conclusions sufficient to provide a reasonable understanding to individuals with fiduciary responsibility for the System.

2.2.4 Prepare a detailed gain/loss analysis by source measuring, reconciling, and explaining differences between assumptions and actual experience as of December 31 of the previous year. This analysis shall describe the reasons for changes in gains and losses from valuation to valuation based on a comparison of actual changes in liabilities and assets with expected changes according to each of the various actuarial assumptions. This analysis will be conducted for each actuarial pool and for individually valued employers as a group.

2.2.5 Ensure all information required for the actuarial section of PERS' Annual Comprehensive Financial Report (ACFR) is prepared in accordance with standards established by the Government Accounting Standards Board and the Government Finance Officers Association, by October 31 of each year.

PERS RFP S-45900-00014078 AttH Statement of Work Page 3 of 5

Proposer shall provide its data request requirements to PERS no later than the first business day of January of the year in which the experience study or valuation is to be completed.

PERS will provide the data required to perform the work as specified in above Sections 2.1 and 2.2, in csv, a data reporting format, or in a manner available to PERS and agreed to by both parties, no later than May 1st for the experience study data and annual valuation data. Proposer’s delivery deadlines may be extended by PERS if PERS fails to deliver the required data by the above deadlines or due to other circumstances not reasonably within PERS’ or Proposer’s control. Within two weeks of PERS submitting all requested data, Proposer shall meet with PERS staff to clarify and resolve any data request requirement issues.

Proposer shall notify PERS of additional needs or questions regarding any required data no later than 30 days following PERS’ submission of data for the experience study or the annual valuation. Failure by Proposer to identify and report data issues to PERS staff within that time shall nullify any right by Proposer to extend Proposer’s completion deadline for the associated report(s).

2.3 Variable Annuity Values. Provide an annual calculation by a Qualified Actuary of the variable annuity unit value and assignment of units to all beneficiaries retired during the year who elected to have benefits paid under the variable annuity.

Calculation to be completed within 30 days following receipt from PERS of the most recent valuation of the variable portfolio by PERS and receipt from PERS of a list of members who retired since the previous valuation.

2.4 IRC § 415 Factors. Provide factors, in compliance with federal law, for the purpose of complying with the requirements set forth in federal statutes (including without limitation IRC § 415), state statutes (including without limitation ORS Chapters 238 and 238A), administrative rules, and court rulings that impose limitations on contributions made to and benefits paid from an IRC § 401(a) qualified retirement plan. These factors or tables will include, but not be limited to:

2.4.1 The conversion of lump sum amounts to annual straight life annuities and their equivalents.

2.4.2 Annual IRC § 415-dollar limits for members retiring before age 62 and after age 65.

2.5 Actuarial Equivalency Factors. Perform actuarial equivalency studies required for

ORS Chapter 238 and 238A Benefit Groups, reviewing the assumptions and actuarial factors used to convert account balances to monthly allowances, to convert the standard form of benefit to elective options with various survivorship features, and to reduce service retirement allowances for voluntary retirement or requirements as stated under Oregon Revised Statutes and Oregon Administrative Rules. This study is to be completed, and recommendations based on its results are to be reported by selected Contractor to the PERS Board not later than 60 days following the PERS Board's formal acceptance of the experience study described in Section 2.1 of this Statement of Work.

2.6 GASB 67/68 and 74/75 Calculation. Provide actuarial statistical tables, actuarial summary statements and other actuarial data for the ACFR based on Governmental Accounting Standards Board (GASB) Statements 67, 68, 74 and 75 and any relevant new or amended GASB Statements adopted during the term of this Contract.

PERS RFP S-45900-00014078 AttH Statement of Work Page 4 of 5

2.7 Financial Modeling Services. Provide the Board with detailed analyses of potential future System benefits and costs, given a certain set of deviations from adopted assumptions or changes to methodologies.

Financial Modeling Services shall include:

2.7.1 Coordination with PERS staff at least every two years, to identify a set of demographic and economic assumptions, and other parameters as agreed by PERS and Proposer to be studied. These recommendations may also include changes to methodologies used in the valuation of the System.

2.7.2 Based on the agreed upon assumptions and methodologies, Proposer will conduct an analysis of outcomes as described in Section 2.2.4 of this Statement of Work. Proposer must provide a detailed approach to how this analysis is to be done.

2.7.3 A Qualified Actuary will present the results of the analysis in a report to the Board. Outcomes from this analysis may include, but not be limited to:

2.7.3.1 Impact or range of impacts on future funded status of the System over an agreed-upon period of time.

2.7.3.2 Impact or range of impacts on future employer rates over the same period(s) of time used for the funded status.

2.7.3.3 An analysis of probability of occurrence.

2.7.3.4 Impact or range of impacts on member benefits (if applicable) or classes of members within the System.

2.7.4 The Board may choose to request analyses at greater intervals due to changes in legislation, current events, or other circumstances as determined by the Board.

2.8 Best Practices/Administrative Operations Consulting. Upon request by PERS, Proposer will provide an assessment of PERS’ administrative operations, within the context of industry best practices, which can be developed into a comprehensive business plan that will efficiently and effectively accommodate current needs and provide flexibility to address ongoing changes in PERS' environment. This will be an if/as-needed project and will not occur on a regular schedule.

3. Actuarial Services for Special Projects Provided at a Fixed Rate per Hour

Proposer shall include its price per hour for actuarial services requested by PERS on an as needed basis for Special Projects. For any Special Project, a Qualified Actuary shall provide a written, itemized Work Order that shall include the description of the work to be performed, a schedule for the completion of the project, the number of hours required, and the total not-to-exceed maximum cost to be billed to PERS. Proposer may commence work on a Special Project only upon the written approval of PERS, following full execution of the Work Order and issuance by PERS of a Notice to Proceed. The Work Order will then become part of the Contract. Any work performed prior to issuance of a Notice to Proceed shall not be chargeable to PERS.

3.1 Actuarial analysis of Legislative Initiatives, including but not limited to:

PERS RFP S-45900-00014078 AttH Statement of Work Page 5 of 5

3.1.1 Determining, at the request of PERS, the cost impact of bills or legislative concepts related to PERS programs to be considered at any regular or special legislative session.

3.1.2 Appearance of a Qualified Actuary, on request by PERS, before legislative committees during regular or special sessions, interim legislative committees, gubernatorial task forces, or other groups to testify on cost impacts of pending or potential PERS-related legislation and respond to questions about the actuarial status and methodology of the System and the impacts of potential changes to the System.

3.1.3 Availability by telephone, between 7:00 AM and 6:00 PM Pacific Time, Monday through Friday, of a Qualified Actuary who is thoroughly familiar with the System.

3.2. Conduct such other services under the contract as may be reasonably asked of an actuarial consultant by a public pension plan.

3.3. Provide as requested by PERS’ staff an estimate of average blended contribution rate information for use in budgeting by State of Oregon Department of Administrative Services (DAS) and Oregon Legislative Fiscal Office.

Recent reports and presentations provided by the current Contractor under the preceding sections are posted on the PERS website at:

http://www.oregon.gov/pers/Pages/section/financial_reports/financials.aspx.

4. Actuarial Services that are Funded by the Employer

These services are allowed or required under ORS Chapter 238 and 238A and may be charged at the Special Projects hourly rate in section 1.1.3 above, or other rate as agreed upon by Proposer and the requesting employer. Services provided by Proposer under this section must be coordinated by PERS but shall be directly invoiced to and paid by the employer receiving the service and shall not be part of any costs to be billed to PERS under this Contract. Proposer may enter into an agreement with the employer receiving the service, but PERS will not be a party to any such agreement between Proposer and the employer. All such services shall be consistent with and are subject to the terms and conditions of Proposer's contract with PERS.

4.1. An evaluation and estimate of employer unfunded actuarial liability for the purpose of providing the basis for a lump-sum payment in compliance with OAR Chapter 459 Division 009. These services will be paid by the employer based on a flat rate negotiated by PERS and Proposer.

4.2. Any other evaluation or analysis as requested by and funded by employer(s), subject to approval by PERS. Development of scope of work, costs, and work results must be coordinated between the requesting employer(s) and Proposer through PERS. Work performed by Proposer under this subsection shall be prioritized below any work being performed by Proposer for PERS under this contract, unless PERS agrees to a higher priority. Work performed by Proposer under this subsection shall be subject to all PERS data confidentiality requirements and restrictions.