Addendum 2 - Defined Contribution

CERTIFICATE OF ACKNOWLEDGMENT OF RECEIPT OF ADDENDUM

 

THE CITY OF READING

 

ADDENDUM NO. 2RFP:                     RFP – Defined Contribution
 
DUE DATE:           February 2, 2018
                               3:00 P.M. Prevailing Time

 

NOTICE

 

This addendum must be signed, attached to, and returned with your proposal to the City of Reading by the time and date indicated ABOVE:

 

Q1. Who is eligible for the plan, just non-uniform employees? If so, is the non-uniform defined benefit pension plan frozen?

 

A1. All new non-uniform employees hired after July 1, 2018 and all existing employees who choose to join who were hired after January 1, 2015.

 

Q2. Are there unions involved, and if so, have they agreed to the change from a defined benefit plan to a defined contribution plan for new hires?

 

A2. Yes, union are involved but there is language in the contracts that allows for new pension plan to be introduced. The City will work with the unions when finalizing the implementation of plan.

 

Q3.When do you expect to introduce the new defined contribution plan for participants to enroll?

A3. Ideally within the next six months.

Q4. How many participants do you anticipate will enroll, initially, in the defined contribution plan? How many new hires do you typically have in a given year who may become eligible to participate in the plan?

 

A4. Initially, we anticipate that there will be 25 employees enrolled in the defined contribution plan and approximately 35 new employees per year.

 

Q5. How much do you expect the annual contributions, both employer and employee, to be in years 1, 3, 5?

 

A5. The City is looking at a minimum employee contribution of 5% of salary and up to 10% with a City match on the first 5%

 

Q6. Has a plan document or Summary Plan Description been developed for the plan? If so, can you provide us with a copy of either to review?

A6. This is a new plan, no current plan documents exist.

 

Q7. How frequently do you want to meet with the investment advisor on an on-going basis?

A7. Approximately quarterly, but at least twice a year.

 

Q8. Do you have a sense of how many vendors you would consider, as part of an RFP process, to provide administrative services for the defined contribution plan?

 

A8. The City would prefer to work with one consultant but would consider two.

 

Q9. Do you work with an existing consultant? If so, what is the name of the consultant?

A9. Not yet for the development of this plan.

Q10. How long has the current consultant been providing services?

A10. Plan is under development, there is no consultant.

Q11. Is the current consultant allowed to bid in this RFP?

A11. Plan is under development, there is no consultant.

 

Q12. What is the total dollar amount of fees paid to the current or previous consultant for the last two (2) years? Was it a fixed fee or is it percentage of assets?

A12. This is a new plan.

Q13.Who is the current TPA?

A13. Plan is under development, there is no TPA.

 

  1. When does the current TPA contract expire?

     

  2. What is the expected date for the RFP process to select the next TPA?

     

  3. What education/communication services is the TPA currently providing?

 

Q14. Is the consultant’s education/communication services requested in the scope supplementing or coordinating the education/communication services already provided by the TPA? Can you please explain/clarify?

 

A14. No.

 

Q15. Is the City seeking 3(21) co-fiduciary services or 3(38) discretionary?

A15. The city is seeking 3(21) co-fiduciary service for the defined contribution plan.

 

Q16. Has the City considered 3(38) discretionary services in order to further reduce their fiduciary liability related to sponsoring the plan?

A16. This particular section 3(38) would need more data to support a decision to give an investment manage full discretionary authority and control to make the actual investment decisions.

 

Q17. Would the City be willing to consider 3(38) discretionary services to further mitigate their fiduciary liability?

 

A17. To this end, there needs to be more data gathered to consider giving an investment manager full discretionary authority and control to make decisions without consulting the O&E Board members.

 

Q18. Is there anything you would like the new consultant to do differently, improve and/or provide additional services?

 

A18. The City of Reading would like to have good communication between them and the consultant to share information with the Aggregated Board of Trustees, so they are keep abreast of how well the fund is doing. By having up-to-date outcome data from the consultant, the O&E Board can facilitate quality decisions based on the recommendations provided by the consultant.

 

Q19. What is the total number of plan participants?

 

A19. The City anticipating anywhere from 25-60 in the first year.

 

Q20. Please provide the total gross plan contributions, including employee and employer contributions excluding rollovers, and disbursements in years 2016 and 2017.

 

A20. Unknown at this time.

 

Q21. Are advisory services or managed accounts offered to plan participants now? If yes, please provide name, Advisor Company, fee structure and description of services.

 

A21. Not at this time. This is a new plan.

 

Q22. Can you please identify amount of plan assets in risk-based/managed account portfolios?

A22. We anticipate approximately $100,000 in the first year.

Q23. Would you like fiduciary education workshops to be implemented for the investment committee by the consultant?

A23. Ongoing educational workshops would be welcome by the City of Reading to keep the board members and employees abreast of up-to-date information associated with the defined plan.

 

Q24. What are the current activities, individual and group meeting activities in the last 12 months, involved at the retirement seminars mentioned in the RFP scope?

 

A24. We are in the design stage of facilitating activities to move towards a defined contribution plan.

 

Q25. Are the current activities meeting the City’s expectations?

A25. No.

Q26. Would you be interested in the consultant providing a review of current TPA education plan and materials?

 

A26. No.

 

Q27. Can you provide us with the ticker symbols and the current market value of each fund option in the Plans?

 

A27. This is a new plan.

 

Q28. Are any of the funds in the Plans’ lineup currently on watch or slated for removal? If yes, which ones?

 

A28. This is a new plan.

 

Q29. What is the current interest rate on the fixed or stable value account and the market value of the account for the existing vendor?

 

A29. This is a new plan.

 

Q30. What is the minimum guaranteed interest rate?

A30. There is no guaranteed interest rate.

Q31. Is the MWBE participation requirement a new component of the RFP?

A31. No

Q32. If not, who is the current MWBE Company participating in the current contract?

A32. None, this is a new plan.

 

I, HEREBY CERTIFY THAT THE CHANGES COVERED BY THIS ADDENDUM HAVE BEEN TAKEN INTO ACCOUNT.

 

Firm Name (Type or Print)_____________________________________________

 

Authorized Signature_________________________________________________

 

Title______________________________________________________________

 

Name (Type or Print)________________________________________________

 

Date______________________________________________________________