RFQ ENCL 1 - SOW - SRP Fiduciary Insurance.pdf

Supplemental Retirement Plan (SRP)- Oversight Committee Fiduciary Liability Insurance

U.S. Securities and Exchange Commission

OHR – Office of Human Resources Supplemental Retirement Plan (SRP) – Oversight Committee Fiduciary Liability

Insurance

Statement of Work

RFQ Enclosure 1

1.0 Scope

The Statement of Work (SOW) serves to outline and specify the U.S. Securities and Exchange Commission’s ("SEC" or “Agency”) requirement for Fiduciary Liability Insurance for the Oversight Committee of the Agency’s Supplemental Retirement Plan (referred to herein as the “Plan” or as the “Supplemental Retirement Plan” or “SRP”) and to seek sources that are able to perform these requirements. The Oversight Committee oversees and serves as Plan Administrator of the SRP. The plan is a defined contribution program that complies with Section 401(a) of the Internal Revenue Code.

The contractor must not be directly regulated by the SEC, but a contractor will not be disqualified solely because it (or one or more partners) is part of a corporate structure that includes one or more entities that are directly regulated by the SEC.

2.0 Background

The mission of the SEC is to protect investors, maintain fair, orderly, and efficient markets, and facilitate capital formation. The SEC oversees the key participants in the securities industry, including securities exchanges, securities brokers and dealers, and investment advisors.

As part of the SEC’s compensation model, the plan was established to offer additional retirement benefits in addition to standard federal retirement programs such as Federal Employees Retirement System (FERS), the Civil Service Retirement System (CSRS), and the Thrift Savings Plan (TSP) for eligible employees. The Plan holds only employer contributions. Currently this plan has over 4900 participants.

The SEC currently contracts with a vendor that provides Trustee and Recordkeeping services for the plan. As the Plan Trustee in accordance with the requirements of Section 401(a) of the Internal Revenue Code, this vendor maintains plan assets in trust, preserves auditable records of all Plan assets, and accepts bi-weekly payroll transfers from the SEC’s payroll provider. As the recordkeeper, this vendor creates and maintains individual participant records containing all pertinent financial data (e.g., account balance, bi-weekly deposits, withdrawals, allocations of interest, vesting amounts), provides a secure web-based platform for participants to manage and verify all aspects of their individual account, and provides call center services to SRP participants throughout the continental U.S. We do not anticipate that the contractor selected for the fiduciary insurance will need to exchange any information with the Trustee and Recordkeeping vendor.

The Oversight Committee, which consists of seven members, was established to oversee and to serve as Plan Administrator of the Plan. In exercising its powers and fulfilling its responsibilities, the Committee’s guiding principle is that it will at all times fulfill its legal and fiduciary responsibilities in a manner that is consistent with the SEC’s mission to protect investors, maintain fair, orderly, and efficient markets, and facilitate capital formation.

Consistent with that guiding principle, the Committee will not make investments or decisions on behalf of the Plan that would have the effect of creating an actual or apparent conflict of interest between the SEC’s regulatory responsibilities and the Plan.

As Plan Administrator of the SEC’s Supplemental Retirement Plan, the Committee has all the rights and responsibilities of the Plan Administrator as detailed in the Plan Documents and as otherwise granted or required by law. These powers include, but are not limited to:

- Selecting a Plan Trustee and Recordkeeper;

- Carrying out fiduciary responsibilities;

- Selecting the investment vehicle(s) for the Plan assets;

- Determining what optional features the Plan will offer, and on what terms; and

- Resolving claims and disputes between the Plan, participants, and beneficiaries.

The contractor’s expertise must include:

• High level of understanding of the fiduciary responsibilities of qualified retirement plans of a similar size to protect the Commission and the plan’s assets against fiduciary-related claims of mismanagement of the agency’s supplemental retirement plan;

• Comprehensive understanding of qualified defined contribution plans, plan features, and provisions of law related to contribution plans;

• Reliability and ongoing commitment to quality and technology;

• Demonstrated capability of data integrity to ensure maximum security of Personally

Identifiable Information; and,

• Applicable credentials, certifications or accreditations to provide coverage.

3.0 Objectives

The contractor shall provide coverage to the Oversight Committee for associated legal costs and will step in on covered claims to indemnify members of the committee for any reason. To include:

o Allegations of imprudent investing if the plan loses money or does not meet participant growth expectations.

o Errors or delays in responding to requests for investment changes, distributions, and rollovers.

o Not adhering to plan documents.

o Claims by plan beneficiaries.

o Failing to make contributions on a timely basis.

o Engaging in prohibited activities under Section 401(a) of the Internal Revenue

Code.

o Wrongful termination of the plan.

o Conflicts of interest.

The contractor shall protect the Oversight Committee and its members when participants allege violations in connection with collectively bargained agreements.

The contractor shall cover the alleged improper selection of third party service providers, including trustee or custodian.

The Plan is not subject to the Employee Retirement Income Security Act of 1974 (ERISA), however, the contractor shall provide coverage similar to those required when a plan is subject to ERISA as required by the Department of Labor, IRS or other regulatory concerns.

The contractor must respond to telephone and e-mail inquiries by the SEC Contracting Officer (CO) and Contracting Officer’s Representative (COR) and committee members and return calls/messages within one (1) business day.

Travel to the SEC’s headquarters in Washington, DC may be required to support the Agency’s coverage for the committee members.

The contractor must ensure privacy and security of all data, maintaining the Commission’s standards for the handling of sensitive data.