KANSAS PUBLIC EMPLOYEES RETIREMENT SYSTEM REQUEST FOR PROPOSALS

ISSUE DATE: April 13, 2017

TITLE: Death & Disability Program Actuarial Consulting Services

ISSUING AGENCY: KANSAS PUBLIC EMPLOYEES RETIREMENT SYSTEM ATTN: MARY BETH GREEN CHIEF BENEFITS OFFICER 611 SOUTH KANSAS AVENUE, SUITE 100 TOPEKA, KS 66603-3869

SEALED PROPOSALS for furnishing the services described herein will be received until June 8, 2017, @ 3:00 P.M. C.D.T. LATE PROPOSALS WILL NOT BE ACCEPTED. ELECTRONIC OR TELEGRAPHIC TRANSMISSION OF PROPOSALS WILL NOT BE ACCEPTED EXCEPT AS PROVIDED IN SECTION VI. All inquiries for information should be directed to Mary Beth Green, Chief Benefits Officer, Kansas Public Employees Retirement System, mgreen@kpers.org, phone: (785) 296-6885, fax: (785) 296-6682. If proposals are mailed, send directly to issuing agency shown above. Packages must be labeled as indicated in Section IX, Special Terms and Conditions, Identification of Proposal Envelope. If proposals are hand-delivered, deliver to Kansas Public Employees Retirement System, Reception Desk, ATTN: Mary Beth Green, Chief Benefits Officer. Packages must be labeled as indicated in Section IX, Special Terms and Conditions, Identification of Proposal Envelope. Note: This RFP is posted on the Kansas Public Employees Retirement System website, www.kpers.org, to allow Offerors the ability to view documents and programs referenced in this RFP. PLEASE RETURN THE ORIGINAL AND FIVE (5) COMPLETE PAPER COPIES OF YOUR PROPOSAL. ALL COPIES OF THE PROPOSAL BEING SUBMITTED MUST BE PACKAGED IN A SEALED BOX OR ENVELOPE. PLEASE SUBMIT ONE (1) ELECTRONIC COPY OF THE ENTIRE PROPOSAL IN MICROSOFT WORD OR PDF FORMAT. SEE SECTION VI FOR DETAILS. *************************************************************************************************************

In compliance with this Request for Proposals and with all Conditions imposed therein, the undersigned Offeror agrees to furnish the services in accordance with the attached signed proposal or as mutually agreed upon by subsequent negotiation. I certify that I have read and understand this Request for Proposals and am authorized to sign this proposal for the Offeror. NAME AND ADDRESS OF FIRM: DATE: BY: (signature in ink) NAME: (print or type) TITLE: FEI/FIN: TELEPHONE: E-MAIL: FAX:

2

Table of Contents

I. Purpose ............................................................................................................................... 3

II. Background ....................................................................................................................... 3

A. Membership and Employers ................................................................................ 3

B. Membership and Demographic Information ................................................ 4

C. Funding Background .............................................................................................. 4

III. Timeline .............................................................................................................................. 4

IV. Communication with KPERS ....................................................................................... 5

V. Statement of Needs ....................................................................................................... 5

A. Death and Disability Program Valuation Services ....................................... 6

B. GASB Valuation Services ........................................................................................ 7

C. Board of Trustees’ Consultation, Education and Meetings ...................... 7

D. Fiscal Impact of Proposed Legislation .............................................................. 7

E. General Consulting Services ................................................................................ 8

F. Additional Services .................................................................................................. 8

G. Miscellaneous ............................................................................................................. 8

VI. Proposal Preparation and Submission Requirements ..................................... 9

A. Required Copies ........................................................................................................ 9

B. Proposal Preparation ............................................................................................... 9

C. Proposal Contents ................................................................................................. 10

VII. Evaluation Criteria and Award ................................................................................ 12

VIII. General Terms and Conditions ............................................................................... 13

IX. Special Terms and Conditions ................................................................................ 15

X. Attachments .................................................................................................................. 16

3

I. PURPOSE

The purpose of this Request for Proposals (RFP) is for the Kansas Public Employees Retirement System (KPERS or the Retirement System) to solicit proposals from qualified firms to provide actuarial consulting services for the death and disability program administered by KPERS in accordance with the specifications, terms and conditions contained herein. This RFP provides information on KPERS’ death and disability actuarial services, establishes the specifications and requirements for submitting proposals, and provides information about the proposal evaluation process.

The Retirement System reserves the right without prejudice to reject any or all proposals submitted. There is no express or implied obligation for KPERS to reimburse Offerors for any expenses incurred in preparing proposals in response to this request. In the event none of the proposals are satisfactory to KPERS, no selection will be made. Proposals submitted in response to this RFP become the property of KPERS and are subject to public inspection. KPERS reserves the right to modify the RFP contents and requirements at any time prior to the submission deadline.

II. BACKGROUND

The Kansas Public Employees Retirement System, located in Topeka, KS, is an umbrella organization for three pension groups serving the needs of virtually all Kansas public servants. Benefits are determined by the Kansas Legislature through legislative action, and the Retirement System administers the programs that deliver these benefits. With over $18 billion in assets, KPERS is an umbrella organization for three pension groups:

the Kansas Public Employees Retirement System, the Kansas Police and Firemen’s Retirement System (KP&F), and the Kansas Retirement System for Judges (Judges).

The Retirement System administers group term and optional life insurance for all three groups, long-term disability benefit programs for the KPERS group and retirement disability programs for the KP&F and Judges groups. The KP&F and Judges’ disability plans are not included within the scope of this RFP.

KPERS is a governmental defined benefit plan governed by K.S.A. 74-4901 et seq. and Section 401(a) of the Internal Revenue Code. The State of Kansas and Kansas unified school districts are required to participate in KPERS, while participation by other local political subdivisions is optional but irrevocable once elected. The KPERS death and disability programs are governed by K.S.A. 74-4927 et seq. Prospective bidders are encouraged to review the Retirement System’s governing statutes, which may be obtained from the KPERS website at www.kpers.org/procurement.htm.

4

A. Membership and Employers

The Retirement System partners with approximately 1,500 public employers to provide retirement, disability and survivor benefits for public employees in Kansas. Our membership includes approximately 152,000 active employees, 98,000 retirees, and 53,000 inactive members. Participating employers include the State of Kansas, school districts, counties, cities, public libraries, hospitals and other governmental units.

B. Membership and Demographic Information

Complete background and demographic information, including the System’s fiscal year 2016 Comprehensive Annual Financial Report and calendar year 2015 Actuarial Valuation Report, and fiscal year 2016 Death and Disability Benefit Plan Annual Report and Actuarial Valuation may be obtained from the Retirement System’s website at www.kpers.org/procurement.htm. Prospective bidders are encouraged to review these reports.

C. Funding Background

The KPERS Death and Disability Plan is a cost-sharing multi-employer plan that provides long-term disability and life insurance benefits to eligible employees. The Plan is funded entirely by employer contributions, and has been managed on a pay-as-you-go basis since the early 2000s. The Kansas Legislature periodically adopts funding moratoria to achieve budget savings. The Plan is currently in a funding moratorium through June 30, 2017, with an extension through September 30, 2017, likely.

III. TIMELINE

The following timeline is an estimate and may be adjusted at the Retirement System’s discretion any time during this procurement process.

Task Date Distribution of RFP April 13, 2017

Deadline for questions submitted in writing May 1, 2017

Proposals due (no later than 3 p.m. C.D.T.) June 8, 2017

Finalist presentations (if scheduled) June 19 -30, 2017 (tentative)

Award business (contingent on final negotiations) July 20, 2017 (tentative)

Estimated contract start date August 1, 2017

All proposals submitted in response to this RFP must be delivered to KPERS no later than 3:00 p.m. C.D.T. on June 8, 2017.

5

IV. COMMUNICATION WITH KPERS

KPERS is the sole point of contact during the RFP process and any questions should be submitted in writing to Mary Beth Green, Chief Benefits Officer, at Kansas Public Employees Retirement System, 611 S. Kansas Ave., Suite 100, Topeka, KS 66603-3869, or by email to mgreen@kpers.org, or by fax at (785) 296-6682 by 3 p.m. C.D.T., May 1, 2017. Answers to written questions will be posted on the Retirement System’s website at www.kpers.org/procurement.htm. Vendors are responsible for checking the website periodically for updates to the RFP and responses to written questions. Telephone questions will not be accepted. No verbal communication will override written communications, and only written communications are binding.

KPERS policy prohibits direct contact between prospective service providers and KPERS Board members, consultants or staff regarding this RFP during the selection process. From the date of release of this RFP until an Offeror/Contractor is selected and a contract is executed and approved, all contacts and communications regarding this RFP are restricted except communications with KPERS staff identified in this section and designated participants in attendance ONLY DURING negotiations, presentations, and contract award and execution. Violation of these conditions may result in rejection of a bidder’s proposal.

V. STATEMENT OF NEEDS

The Contractor shall provide death and disability program actuarial and consulting services for the Retirement System in compliance with KPERS’ legal, management, and reporting requirements. Primary valuation services must be performed periodically (usually annually), and others must be performed on an as-needed basis. The Contractor will be required to perform all periodic services according to a schedule mutually agreed upon by the Retirement System and the Contractor and all unscheduled services on an ad hoc basis as required by the Retirement System.

Please indicate your willingness and ability to meet the requirements specified below and designate any differences from the specified requirements. KPERS may consider deviations from the following requirements but any proposed deviation must be submitted in writing as part of the proposal and clearly identified in the appropriate section of the proposal.

Required actuarial and consulting services shall include, but are not limited to, the following:

6

A. Death and Disability Program Valuation Services

The Contractor shall perform a valuation of the KPERS Death and Disability Program as of June 30, 2017, and subsequent years. The Contractor shall submit an annual written report of this review to the KPERS Board of Trustees by April 1 following fiscal year end unless KPERS and the Contractor mutually agree upon an earlier date.

1. The valuations shall be based on annual data for each fiscal year, with final results contained in one report and submitted to the Retirement System’s Board of Trustees by April 1 following fiscal year end. These annual valuations will include the determination of the actuarial liability for active lives, as well as disabled lives, along with related items such as the unfunded actuarial liability (UAL), normal cost, and annual required contributions (ARC).

2. The valuation report shall include financial results for each plan and any specified major groups including contribution rates, value of assets, liabilities, membership demographics and cash flow projections.

3. Contractor may propose to perform a full actuarial valuation of the plan, for the June 30, 2017, and June 30, 2018, valuations, and an interim valuation in alternate years beginning with the June 30, 2019, valuation. This pattern may be repeated in future two-year increments, with a full valuation performed at least once every two years. Proposals must include both proposed fee schedules (full valuation each year and full valuations in FY 2017 and FY 2018 followed by interim valuations in alternate years).

4. Elements included in the full valuation, but not in the “interim” valuation, include calculation of the annual required contribution rate (ARC) and preparation of the required disclosure schedules.

5. Each actuarial valuation report shall include the accounting information and schedules required to comply with Governmental Accounting Standards (GASB) standards and guidance. The Contractor shall provide the valuation report in a format that may be incorporated into the Retirement System’s Comprehensive Annual Financial Report.

6. Each actuarial valuation report shall contain sufficient explanatory text to provide a reasonable understanding of the actuarial assumptions, methods, trends and conclusions to individuals with a fiduciary responsibility for the funding status of the Retirement System.

7. As appropriate, the valuation report shall contain comments and recommendations concerning the Death & Disability Plan’s actuarial condition, actuarial assumptions, demographic experience and funding progress.

8. The Contractor must calculate the annual cash flows necessary to pay the death and disability benefits paid by the Plan.

7

The most recent actuarial valuation report for the System’s Death and Disability Plan is available at www.kpers.org/procurement.htm. Prospective bidders are encouraged to review this report.

B. GASB Valuation Services

The KPERS Death & Disability Trust Fund is a non-qualified trust per the requirements of paragraph 4 of GASB Statement No. 75, “Accounting and Financial Reporting for Postemployment Benefits Other Than Pensions.” The Group Life Insurance program, for active employees, is also administered from the same trust.

The Contractor shall prepare GASB valuation reports for participating employers, approximately 400 of the current 1,500 employers, who have total Other Post-Employment Benefits (OPEB) liability as defined in GASB Statement No. 75. These annual reports will include but are not limited to: total OPEB liability, changes in the total OPEB liability, sensitivity of the total OPEB liability to changes in the discount rate, OPEB expense, and deferred outflows and deferred inflows of resources.

Contractor must provide advice and guidance on any technical issues related to implementation of GASB Statement No. 75 and other relevant GASB Statements.

C. Board of Trustees’ Consultation, Education and Meetings

The Contractor serves as a technical advisor to the Retirement System’s Board of Trustees and should be available as outlined below.

1. The Contractor should be prepared to attend a minimum of one (1) on-site Board of Trustees meeting per contract year to review the annual actuarial valuation. The Contractor must be willing to attend additional on-site meetings according to schedules mutually agreed upon by the Retirement System and the Contractor. Proposed fees should clearly indicate the number of on-site visits included in the proposal.

2. The Contractor should keep KPERS’ Board of Trustees, Executive Director and senior management staff apprised of current trends and recent developments within the actuarial profession as related to death and disability programs within public defined benefit retirement plans.

3. The Contractor’s primary actuary assigned to KPERS must have the ability to discuss actuarial theory and other actuarial or pension subjects in layperson’s terms.

D. Fiscal Impact of Proposed Legislation

KPERS may occasionally request that the Contractor review certain benefit proposals and perform actuarial calculations related to these proposals.

8

KPERS may request that the Contractor assist with preparing cost estimates of the fiscal impact of proposed legislation.

1. The Contractor must have resources available to provide these non-recurring services in a timely manner as requested by KPERS.

2. Fee proposals should assume analysis of an average of one or two benefit proposals per contract year. Any specific or anticipated costs that are not included in the fee proposal should be clearly indicated.

3. While rare, the Contractor must be available to attend legislative meetings or make presentations, provide testimony and respond to questions when mutually agreed upon by KPERS and the Contractor.

E. General Consulting Services

These services may include, but are not limited to, interpretation or information concerning actuarial issues and actuarial principles, federal legislation, benefit provisions, mortality tables, and present value factors and calculations.

1. The Contractor must have resources available to provide these non-recurring services in a timely manner as requested by KPERS.

2. Any specific or anticipated costs that are not included in the fee proposal should be clearly indicated.

F. Additional Services

1. Occasionally, the Contractor may be expected to provide additional consulting services, assist with other technical issues, or contribute to reports that are not specifically listed in the Statement of Needs.

2. These additional services must be performed on an as-needed basis according to a schedule mutually agreed upon by the Retirement System and the Contractor. The Contractor must have resources available to provide these services in a timely manner as requested by KPERS.

3. Fees for these services will be negotiated with the Contractor on an as-needed basis.

G. Miscellaneous

The Contractor shall make available at least one primary staff contact and one secondary contact to which KPERS’ Executive Director and senior management staff may direct questions and seek assistance as needed. The primary and secondary consulting actuaries should be readily accessible to the Retirement System’s designated staff by telephone or e-mail within one (1) working day.

9

VI. PROPOSAL PREPARATION AND SUBMISSION REQUIREMENTS

Proposals submitted in response to this RFP should be prepared simply and economically, avoiding the use of elaborate promotional materials beyond those sufficient to provide a complete, accurate and reliable presentation. The Retirement System assumes no financial responsibility for any costs incurred in responding to this RFP. All materials submitted in response to this RFP become the property of KPERS and are subject to public inspection.

A. Required Copies

To be considered for selection, Offerors must submit a complete response to this RFP. One (1) original and five (5) paper copies must be submitted to the Kansas Public Employees Retirement System in a sealed box(s) or envelope(s). PLEASE SUBMIT ONE (1) ELECTRONIC COPY OF THE ENTIRE PROPOSAL IN MICROSOFT WORD OR PDF FORMAT. No other distribution of the proposal shall be made by the Offeror.

One (1) original and five (5) paper copies shall be delivered to the Kansas Public Employees Retirement System at the following street address:

Mary Beth Green Chief Benefits Officer

Kansas Public Employees Retirement System 611 South Kansas Avenue, Suite 100 Topeka, Kansas 66603-3869

The electronic copy may be emailed to mgreen@kpers.org or delivered to Mary Beth Green at the above address.

NOTE THAT PROPOSALS DELIVERED TO KPERS AFTER 3:00 P.M. C.D.T. ON June 8, 2017, SHALL NOT BE ACCEPTED.

B. Proposal Preparation

1. Proposals should be prepared simply and economically, providing a straightforward, concise description of capabilities to satisfy the requirements of the RFP. Emphasis should be placed on completeness and clarity of content.

2. Proposals should be organized in the order in which the requirements are presented in Section V, Parts A through E, and Section VI, Part C. All pages of the proposal should be numbered.

3. Each paper copy of the proposal should be bound or contained in a single volume where practical. All documentation submitted with the proposal should be contained in that single volume.

10

4. Ownership of all data, materials and documentation originated and prepared for KPERS pursuant to the RFP shall belong exclusively to KPERS and be subject to public inspection in accordance with the Kansas Open Records Act, which is at K.S.A. 45-215 et seq. (exceptions at K.S.A. 45-221).

C. Proposal Contents

Proposals submitted in response to this RFP must include, at a minimum, the information and documents outlined below.

1. Signed RFP Cover Sheet (see page 1) and Signed Addenda Acknowledgement Forms (as applicable).

The original signed cover sheet and signed addenda acknowledgement forms (as applicable) must be submitted in a separate sealed envelope inside the package containing the original proposal and original copies of other required documents. Copies of the cover sheet and addenda acknowledgement forms must be included in each copy of the proposal.

2. Transmittal Letter

The transmittal letter must include the company name, address, and the name, title or position, and contact information of the person or persons authorized to bind the Offeror to all commitments made in the proposal. The transmittal letter must identify all materials and enclosures being submitted in response to this RFP and must be signed by a person or persons authorized to bind the Offeror contractually.

The transmittal letter must include the following statement:

“We have read KPERS’ Request for Proposals (RFP) for death and disability program actuarial and consulting services, dated April 13, 2017, and fully understand its intent. We certify that we have adequate personnel, equipment, and facilities to provide the requested services. We understand that our ability to meet the criteria and provide the required services shall be judged solely by the KPERS Board of Trustees and its staff.

Our proposal is genuine. We have no conflicts of interest in providing actuarial and consulting services for KPERS. We have not directly nor indirectly induced or solicited any person to submit a false proposal or to refrain from proposing, nor have we in any manner sought by collusion to secure an advantage over any other proposer. We have thoroughly examined the RFP requirements and our proposed fees cover all services that we have indicated we can meet. We acknowledge and accept all terms and conditions included in the RFP.”

11

3. Minimum Qualifications Certificate (Attachment A)

The Contractor’s primary and secondary consulting actuary(ies) must satisfy the minimum qualifications outlined in Attachment A: Minimum Qualifications Certificate, and Offerors must complete and return Attachment A. Offerors should provide detailed information regarding the professional and experience qualifications of the supervising and supporting actuaries who shall perform work under the resulting contract.

Evidence supporting affirmative statements within Attachment A should be fully supported by the information and responses provided in that document in conjunction with the Offeror’s response to the RFP Questionnaire.

4. Response to RFP Questionnaire (Attachment B)

Offerors must complete and return all sections of the RFP Questionnaire (Attachment B). The information requested must be provided in the prescribed format. It is important that each question be completed as instructed. Any alternative or creative responses may be attached separately, but may not be used in lieu of answering or completing any questions. Failure to complete this questionnaire in the format provided may result in rejection of the proposal. Proposals containing false or misleading information may be rejected.

5. Firm Proposal and Work Plan

This section must identify the major tasks outlined in Section V, Parts A through G, to be accomplished within delineated time frames for use as a scheduling and managing tool. Offerors may propose additional tasks or activities if they will substantially improve service delivery. The work plan also must indicate how the firm will organize its staff and the various duties they will perform to carry out the responsibilities defined in Section V, Parts A through G.

6. Cost Proposal

a. The Offeror’s cost proposal must include the total cost for general actuarial duties, valuations, consultation and advisory services, as detailed in Section V, Parts A through G, to be performed during the contract period. It is anticipated that the initial contract shall be for a six-year period commencing August 1, 2017, for the June 30, 2017, actuarial valuation. The KPERS Board of Trustees reserves the right to renew the contract upon the mutual agreement of the Board and Contractor.

12

b. Unless otherwise specified in Section V, Parts A through G, the total cost must be all inclusive with costs for specified items identified separately. Offerors also must indicate hourly rates of compensation for any additional services requested. There will be no additional reimbursement for travel, communicating costs, computer charges, and other expenses incidental to the contract unless otherwise specified.

VII. EVALUATION CRITERIA AND AWARD

A. Proposal Evaluation

The Retirement System will evaluate proposals based on the following criteria:

Qualifications and experience of the firm and key personnel assigned to KPERS, with emphasis on documented experience in successfully completing work on contracts of similar size and scope to those required by this RFP.

The Offeror’s planned approach for performing services required by the Statement of Needs, Section V, of this RFP.

The overall ability of Offeror to successfully provide the services outlined in this RFP.

The Offeror’s cost proposal.

Other relevant criteria, as determined by the Retirement System.

At any time during the evaluation process, Offerors may be requested to be interviewed or to provide explicit written clarification of any part of their proposal. At its sole discretion, the Retirement System reserves the right to reject any or all proposals and/or to waive any deviation or defect (deemed by KPERS to be immaterial) within proposals. KPERS’ waiver of any immaterial deviation or defect shall in no way modify the proposal or the RFP documents or excuse the applicant from full compliance with the RFP requirements.

B. Selection Criteria

On the basis of the evaluation factors included in Section VII, Part A, Offerors deemed to be fully qualified and best suited among those submitting proposals may be interviewed by the KPERS Procurement Negotiating Committee (PNC) in a process that may include discussion and negotiation of key terms. Contract fees and rates will be considered but need not be the sole determining factor.

13

After interviews have been conducted with each Offeror so selected, the PNC will select the Offeror which, in its opinion, made the best proposal, and will recommend to the Board of Trustees that it award the contract to such Offeror. KPERS may cancel this Request for Proposals or reject proposals at any time prior to an award. The award document will be a contract incorporating by reference all the requirements, terms and conditions of the solicitation and the contractor’s proposal as negotiated, as well as other terms and conditions as appropriate.

VIII. GENERAL TERMS AND CONDITIONS

A. KPSSA

This solicitation is subject to the provisions of the Kansas Professional Services Sunshine Act, K.S.A. 75-37,131 et seq. Specifically, see K.S.A. 75-37,132(h).

B. APPLICABLE LAWS AND COURTS

This solicitation and any resulting contract shall be governed in all respects by the laws of the State of Kansas, and any litigation with respect thereto shall be brought in the District Court of Shawnee County, Kansas. See K.S.A. 74-4904(1). The Contractor shall comply with all applicable federal, state and local laws, rules and regulations.

C. KANSAS CONTRACTUAL PROVISIONS

By submitting their proposals, Offerors certify their willingness to comply with the provisions of Kansas Department of Administration Form DA-146a, Contractual Provisions Attachment, which states among other things that “[t]his form contains mandatory contract provisions and must be attached to or incorporated in all copies of any contractual agreement.” Form DA-146a is Attachment C to this RFP.

D. ETHICS IN PUBLIC CONTRACTING

By submitting their bids or proposals, Offerors certify that their bids/proposals are made without collusion or fraud and that they have not offered or received any kickbacks or inducements from any other Bidder/Offeror, supplier, manufacturer or subcontractor in connection with their bid/proposal, and that they have not conferred on any public employee having official responsibility for this procurement transaction any payment, loan, subscription, advance, deposit of money, services or anything of more than nominal value, present or promised, unless consideration of substantially equal or greater value was exchanged.

14

E. CLARIFICATION OF TERMS

If any prospective Offeror has questions about this RFP or the appendices hereto, the prospective Offeror should contact KPERS’ representative whose name appears on the face of this RFP prior to the stated deadline. Any revisions to the solicitation will be made only by addendum issued by KPERS.

F. PRECEDENCE OF TERMS

All of the above General Terms and Conditions shall apply in all instances. In the event there is a conflict between any of the other General Terms and Conditions and any Special Terms and Conditions in this solicitation, the Special Terms and Conditions shall apply.

G. QUALIFICATIONS OF OFFERORS

KPERS may make such reasonable investigations as deemed proper and necessary to determine the ability of the Offeror to perform the services/furnish the goods and the Offeror shall furnish to KPERS all such information and data for this purpose as may be requested. KPERS reserves the right to inspect the Offeror’s physical facilities prior to award to satisfy questions regarding the Offeror’s capabilities. KPERS further reserves the right to reject any proposal if the evidence submitted by, or investigations of, such Offeror is properly qualified to carry out the obligations of the contract and to provide the services and/or furnish the goods contemplated therein.

H. BUSINESS CONTINUITY

The Contractor must indicate any recent or anticipated changes in their corporate structure such as mergers, acquisitions, new venture capital, stock issue, etc. The Contractor agrees to present to KPERS a business continuation plan for this program in the event of natural or other disaster.

I. TESTING AND INSPECTION

KPERS reserves the right to conduct any test/inspection it may deem advisable to assure goods and services conform to the specifications.

J. ASSIGNMENT OF CONTRACT

A contract shall not be assignable by the Contractor in whole or in part without the written consent of KPERS.

15

IX. SPECIAL TERMS AND CONDITIONS

A. CONFIDENTIALITY

The Contractor is expected to comply with provisions of Kansas statutes regarding confidentiality of membership data and agrees not to disclose confidential membership information to other parties without KPERS’ prior authorization and approval.

B. PROPOSAL ACCEPTANCE PERIOD

Any offer in response to this solicitation shall be valid for 120 days. At the end of the 120 days the proposal may be withdrawn at the written request of the Offeror. If the proposal is not withdrawn at that time it remains in effect until an award is made or the solicitation is canceled.

C. IDENTIFICATION OF PROPOSAL ENVELOPE

The signed proposal should be returned in a separate envelope or package addressed as directed on page 1 and Section VI, Part A. The envelope should be sealed and identified as follows:

From: Name of Offeror

Street Address or P.O. Box

City, State, Zip Code

RFP Title:

Offeror’s Contact Name:

Contact Phone Number:

Contact E-Mail Address:

If a proposal not contained in an envelope marked as described above is mailed or delivered to KPERS, the Offeror assumes the risk that the envelope may be inadvertently opened and the information compromised, which may cause the proposal to be disqualified. Proposals may be hand-delivered to the designated location specified on page 1 and in Section VI, Part A. No other correspondence or other bids/proposals should be placed in the envelope.

16

X. ATTACHMENTS

Attachment A: Minimum Qualifications Certificate

Attachment B: RFP Questionnaire

Attachment C: Required Contractual Provisions Attachment (KS Dept. of Administration Form DA-146a)

17

ATTACHMENT A: MINIMUM QUALIFICATIONS CERTIFICATE

MINIMUM QUALIFICATIONS OF THE ACTUARIAL FIRM The Contractor must meet all of the following minimum qualifications. Failure to meet the minimum qualifications described in this RFP may result in the rejection of the proposal. The Offeror shall certify that the firm, the primary or principal actuary performing the work, and any secondary or supporting actuaries who may assist under the contract, each meet the required minimum qualifications.

REQUIREMENT DESCRIPTION YES NO

A. Is your firm a professional actuarial consulting services firm whose primary line of business includes providing actuarial valuation, experience analysis, actuarial audits, and pension or death and disability consulting services to public pension plans or similar entities of substantial size?

B. Has your firm been in existence as a business entity performing such services for at least five (5) years?

C. Does your firm have all necessary permits and licenses to perform the work required in this RFP?

D. Does your firm have at least three (3) current death and disability plan or other similar employee benefit plan clients, each with at least 10,000 to 50,000 members?

E. Is the primary actuary assigned to the account a Fellow of the Society of Actuaries and an Enrolled Actuary, with at least ten (10) years of experience providing death and disability consulting services, experience analysis, and valuation assignments for public retirement systems with at least 10,000 to 50,000 members or similar entities of substantial size?

F. Are all secondary actuaries performing services under this contract Fellows of the Society of Actuaries or Enrolled Actuaries with at least three years of actuarial pension or death and disability consulting experience?

G. Do all actuaries performing work under this proposal meet the professional qualification standards of the American Academy of Actuaries?

H. Do the primary and secondary actuaries performing services under this contract have the required knowledge and understanding of applicable requirements of the Governmental Accounting Standards Board?

18

ATTACHMENT B: RFP QUESTIONNAIRE RFP QUESTIONNAIRE This questionnaire consists of several sections that correspond to the broad criteria that will be used to assess responses. If you reprint the questions, you must provide your answers following each question in the order below. Include any assumptions or clarifying information as part of your response. Respond to each question in the order presented.

A. Organization, Structure and Personnel

1. Provide the name and address of your company’s primary headquarters and

the name and address of the office(s) that will service this account.

2. Provide the primary RFP contact’s name, address, title, telephone number, fax number and email address. Provide brief biographies including title, function, academic credentials, actuarial credentials, death and disability benefit or public sector experience and other relevant experience for all primary and back-up personnel proposed for this account. Also, indicate the total number of clients assigned to all primary and back-up personnel proposed for this account.

3. Give a brief history of your firm’s involvement in the actuarial consulting

business, including the year of organization, current and historical ownership structure, and affiliations. Include experience with death and disability plans.

4. Describe any material changes to the company during the previous five

years, including changes in ownership structure, account personnel, business focus or objective, etc. Are ownership or senior management changes planned or anticipated at this time?

5. How many years has your firm provided actuarial consulting services to

public sector pension plans? To death and disability plans?

6. What do you consider to be your firm’s consulting specialties, strengths and limitations?

7. What services, if any, does your firm offer clients in addition to actuarial

consulting services? Please indicate the percentage of total income that such services represent for your firm.

19

8. Provide details on the financial condition of your firm. Provide your most recent audited financial reports (as Appendix A in your response). Also provide any additional information necessary to demonstrate the financial stability of your firm.

9. During the past five years, has your organization or any of its affiliates,

parent or predecessor organizations or any officer or principal of your organization been involved in any business litigation, regulatory or legal proceedings? If yes, provide a brief explanation of the matter including the parties to the litigation, and indicate the current status of the proceedings.

10. During the past five years, has your organization or any of its affiliates,

parent or predecessor organizations or any officer or principal of your organization been the subject of an audit, inquiry, or administrative action by the SEC, IRS, U.S. Justice Department, or state regulatory body? If yes, provide a brief explanation of the matter including the parties to the litigation, and indicate the current status of the proceedings.

11. Describe your firm’s support and succession policies and procedures should

any key personnel leave the firm. How would these policies and procedures apply to professionals assigned to the KPERS account? Are any changes in key personnel assigned to the KPERS account planned or anticipated at this time?

12. Describe your firm’s level of coverage for errors and omissions insurance and

any fiduciary or professional liability insurance carried by your firm. Is the coverage on a per client basis, or is the dollar figure applied to the firm as a whole?

13. The State of Kansas’ Department of Administration requires all state

contracts to incorporate and attach form DA-146a, Contractual Provisions Attachment. This is a required form. Please review the DA-146a (Attachment C), paying particular attention to paragraphs 2, 4, and 7. Please affirm your willingness to incorporate this form along with any necessary comments.

B. Actuarial Services & Resources

1. What standard services does your firm typically provide to its public pension

or death and disability full service actuarial consulting clients? Include descriptions of any research or other technical resources (including on-line databases and computer-based analytical tools) that you routinely make available to your clients.

2. Describe the services that distinguish your firm from your competitors.

Briefly explain why your firm is the most qualified for this engagement.

20

3. Describe your approach to providing actuarial, legal and regulatory updates applicable to the death and disability plan, including your approach to communicating information about current trends, developments, and best practices within the industries that relate to the plan.

4. Describe your firm’s philosophy relating to the actuarial consultant’s relationship with trustees and staff.

5. How does your firm inform clients of relevant pending changes in federal legislation or IRS rules and regulations?

6. How do you propose to keep KPERS informed of changes or developments related to GASB requirements and pronouncements?

7. Provide a sample or mock up copy of the GASB 75 valuation report that you would propose providing for KPERS’ participating employers.

8. Describe your firm’s internal quality control and peer review processes for

actuarial consultants’ reports and recommendations. How are these services monitored and reviewed?

9. Have your firm’s actuarial consulting service products been audited by

another actuarial firm within the last five years? If so, indicate the number of audits and whether any resulted in revisions to your clients’ annual valuation results, actuarial assumptions or actuarial cost methods.

10. Has your firm been retained by any clients to perform an audit of another

actuarial consulting firm’s work during the last five years? If so, indicate the number of such engagements performed by your firm and approximate completion dates.

11. Does your firm use internal or external legal expertise, or both? If external,

state its source and nature.

12. Describe the training, education, or client conferences that your firm would be willing to provide to KPERS’ trustees and staff as it relates to actuarial and death and disability plan concepts.

13. How does your firm monitor and measure actuarial client satisfaction?

14. List references for three public pension funds or large death and disability

clients for which the primary consultant and principal assistant to be assigned to the KPERS account have provided actuarial consulting services. For each reference, include client name, address, telephone number, and name of contact person.

21

15. Provide a sample of your company’s actuarial valuation reports.

16. Please indicate the earliest date you are willing to complete the annual

actuarial valuation (for example, December 31 for the fiscal year ending the previous June 30).

17. Describe your firm’s disaster recovery plan, including information regarding

when it was last tested and how data and documents are stored and protected.

18. What would your firm provide to add value to the KPERS Death and

Disability Plan? Why should KPERS select your firm?

C. References and Client Base

1. Complete the following table, reporting only those client relationships with “full service” actuarial consulting similar to this mandate.

2. Indicate the number of client relationships the proposed primary and secondary actuaries is currently involved in managing. Specify the largest and smallest client managed by each.

3. How many actuarial services accounts has your firm lost in each of the last

three years? List each terminated client and indicate the reason(s) each account was lost.

4. Identify (by name) your firm’s five largest client relationships (based on membership or covered lives).

5. Would your firm propose to use any subcontracts in the provision of the

Type of Clients

Total Number as of December 31 2016 2015 2014 2013 2012

Total actuarial consulting clients

Public pension plan actuarial consulting clients

Public death & disability actuarial plan clients

Death & disability actuarial plan clients

Clients covering 50,000 or more lives

22

required services? If yes, describe the specific services that would be subcontracted, the name of the subcontractor, and how you would control the quality of services provided.

D. Fees and Fee Structure

1. The Contractor’s fee proposal must include the total fees for general actuarial duties, valuations, consultation and advisory services, as detailed in Section V, Statement of Needs, to be performed during the six-year contract period. There will be no additional reimbursement for travel, communications, computer charges, or other expenses incidental to the contract unless clearly specified in the proposal and mutually agreed upon by KPERS and the Contractor. KPERS prefers the total fee to be all inclusive with fees for specified items identified separately. The fee proposal should have a flat annual fee for each year of the six-year contract or flat fees for each year of the full valuation with lower fees for the interim years. The proposal must include both options, although the Contractor may specify a preference along with rationale for the preference. The Contractor must indicate hourly rates of compensation for any additional services requested by KPERS. Varying rates for named individual actuaries is permitted but should be clearly indicated.

Table 1: Annual Fee for Actuarial Valuation/GASB Services

Full Valuation

Annually

Interim Valuation Alternate Years(a)

Year 1: For 6-30-2017 $

N/A

Year 2: For 6-30-2018 $ N/A

Year 3: For 6-30-2019 $ $ Year 4: For 6-30-2020 $ $ Year 5: For 6-30-2021 $ $

Year 6: For 6-30-2022 $ $

(a) IMPORTANT: A full valuation is required for the fiscal years ending 6-30- 2017 and 6-30-2018. The first interim valuation would apply to the fiscal year ending 6-30-2019. Beginning with FY 2019, a full valuation is required at least once every two years.

23

Table 2: Hourly Rates (b) for Additional Services

Hourly Rate

Projected Annual

Increases

Actuary 1 $

% or $

Actuary 2 $ % or $ Actuary 3 $ % or $ Actuary 4 $ % or $ Actuary 5 $ % or $

(b) Hourly rates may vary with organizational function. Please specify any projected annual increases or other increases during the contract period. Unless otherwise specified, KPERS assumes Table 1 fees cover all costs described in Section V, Items A through E and Item G.

24

ATTACHMENT C: Required Contractual Provisions Attachment (KS Dept. of Administration Form DA-146a)

State of Kansas Department of Administration DA-146a (Rev. 06-12)

CONTRACTUAL PROVISIONS ATTACHMENT Important: This form contains mandatory contract provisions and must be attached to or incorporated in all copies of any contractual agreement. If it

is attached to the vendor/contractor's standard contract form, then that form must be altered to contain the following provision: "The Provisions found in Contractual Provisions Attachment (Form DA-146a, Rev. 06-12), which is attached hereto, are hereby

incorporated in this contract and made a part thereof." The parties agree that the following provisions are hereby incorporated into the contract to which it is attached and made a part thereof,

said contract being the _____ day of ____________________, 20_____. 1. Terms Herein Controlling Provisions: It is expressly agreed that the terms of each and every provision in this attachment shall prevail and

control over the terms of any other conflicting provision in any other document relating to and a part of the contract in which this attachment is incorporated. Any terms that conflict or could be interpreted to conflict with this attachment are nullified.

2. Kansas Law and Venue: This contract shall be subject to, governed by, and construed according to the laws of the State of Kansas, and

jurisdiction and venue of any suit in connection with this contract shall reside only in courts located in the State of Kansas. 3. Termination Due To Lack Of Funding Appropriation: If, in the judgment of the Director of Accounts and Reports, Department of Administration,

sufficient funds are not appropriated to continue the function performed in this agreement and for the payment of the charges hereunder, State may terminate this agreement at the end of its current fiscal year. State agrees to give written notice of termination to contractor at least 30 days prior to the end of its current fiscal year, and shall give such notice for a greater period prior to the end of such fiscal year as may be provided in this contract, except that such notice shall not be required prior to 90 days before the end of such fiscal year. Contractor shall have the right, at the end of such fiscal year, to take possession of any equipment provided State under the contract. State will pay to the contractor all regular contractual payments incurred through the end of such fiscal year, plus contractual charges incidental to the return of any such equipment. Upon termination of the agreement by State, title to any such equipment shall revert to contractor at the end of the State's current fiscal year. The termination of the contract pursuant to this paragraph shall not cause any penalty to be charged to the agency or the contractor.

4. Disclaimer Of Liability: No provision of this contract will be given effect that attempts to require the State of Kansas or its agencies to defend,

hold harmless, or indemnify any contractor or third party for any acts or omissions. The liability of the State of Kansas is defined under the Kansas Tort Claims Act (K.S.A. 75-6101 et seq.).

5. Anti-Discrimination Clause: The contractor agrees: (a) to comply with the Kansas Act Against Discrimination (K.S.A. 44-1001 et seq.) and the

Kansas Age Discrimination in Employment Act (K.S.A. 44-1111 et seq.) and the applicable provisions of the Americans With Disabilities Act (42 U.S.C. 12101 et seq.) (ADA) and to not discriminate against any person because of race, religion, color, sex, disability, national origin or ancestry, or age in the admission or access to, or treatment or employment in, its programs or activities; (b) to include in all solicitations or advertisements for employees, the phrase "equal opportunity employer"; (c) to comply with the reporting requirements set out at K.S.A. 44-1031 and K.S.A. 44-1116; (d) to include those provisions in every subcontract or purchase order so that they are binding upon such subcontractor or vendor; (e) that a failure to comply with the reporting requirements of (c) above or if the contractor is found guilty of any violation of such acts by the Kansas Human Rights Commission, such violation shall constitute a breach of contract and the contract may be cancelled, terminated or suspended, in whole or in part, by the contracting state agency or the Kansas Department of Administration; (f) if it is determined that the contractor has violated applicable provisions of ADA, such violation shall constitute a breach of contract and the contract may be cancelled, terminated or suspended, in whole or in part, by the contracting state agency or the Kansas Department of Administration.

Contractor agrees to comply with all applicable state and federal anti-discrimination laws. The provisions of this paragraph number 5 (with the exception of those provisions relating to the ADA) are not applicable to a contractor who

employs fewer than four employees during the term of such contract or whose contracts with the contracting State agency cumulatively total $5,000 or less during the fiscal year of such agency.

6. Acceptance Of Contract: This contract shall not be considered accepted, approved or otherwise effective until the statutorily required approvals

and certifications have been given. 7. Arbitration, Damages, Warranties: Notwithstanding any language to the contrary, no interpretation of this contract shall find that the State or its

agencies have agreed to binding arbitration, or the payment of damages or penalties. Further, the State of Kansas and its agencies do not agree to pay attorney fees, costs, or late payment charges beyond those available under the Kansas Prompt Payment Act (K.S.A. 75-6403), and no provision will be given effect that attempts to exclude, modify, disclaim or otherwise attempt to limit any damages available to the State of Kansas or its agencies at law, including but not limited to the implied warranties of merchantability and fitness for a particular purpose.

8. Representative's Authority To Contract: By signing this contract, the representative of the contractor thereby represents that such person is duly

authorized by the contractor to execute this contract on behalf of the contractor and that the contractor agrees to be bound by the provisions thereof.

9. Responsibility For Taxes: The State of Kansas and its agencies shall not be responsible for, nor indemnify a contractor for, any federal, state or

local taxes which may be imposed or levied upon the subject matter of this contract. 10. Insurance: The State of Kansas and its agencies shall not be required to purchase any insurance against loss or damage to property or any other

subject matter relating to this contract, nor shall this contract require them to establish a "self-insurance" fund to protect against any such loss or damage. Subject to the provisions of the Kansas Tort Claims Act (K.S.A. 75-6101 et seq.), the contractor shall bear the risk of any loss or damage to any property in which the contractor holds title.

11. Information: No provision of this contract shall be construed as limiting the Legislative Division of Post Audit from having access to

information pursuant to K.S.A. 46-1101 et seq. 12. The Eleventh Amendment: "The Eleventh Amendment is an inherent and incumbent protection with the State of Kansas and need not be

reserved, but prudence requires the State to reiterate that nothing related to this contract shall be deemed a waiver of the Eleventh Amendment." 13. Campaign Contributions / Lobbying: Funds provided through a grant award or contract shall not be given or received in exchange for the

making of a campaign contribution. No part of the funds provided through this contract shall be used to influence or attempt to influence an officer or employee of any State of Kansas agency or a member of the Legislature regarding any pending legislation or the awarding, extension, continuation, renewal, amendment or modification of any government contract, grant, loan, or cooperative agreement.