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REQUEST FOR PROPOSAL CITY OF MISSOULA, MONTANA 457 DEFERRED COMPENSATION PLAN ---PAGE BREAK--- City of Missoula - 457 Deferred Compensation Plan Request for Proposal Page 1 TABLE OF CONTENTS BACKGROUND AND KEY PLAN STATISTICS AS OF JUNE 30, 2009 – NATIONWIDE: KEY PLAN STATISTICS AS OF JUNE 30, 2009 – VALIC: KEY PLAN STATISTICS AS OF JUNE 30, 2009 – MINIMUM PROVIDER CONTRACT RESPONSE REQUIRED WRITTEN DOCUMENTS STANDARD CONTRACT PROVISIONS OTHER NEGOTIATION WITH SELECTED VENDOR ATTACHMENT A – CURRENT BREAKDOWN OF ASSETS AND FEES BY FUND ---PAGE BREAK--- City of Missoula - 457 Deferred Compensation Plan Request for Proposal Page 2 CITY OF MISSOULA 457 DEFERRED COMPENSATION PLAN JULY 2009 BACKGROUND AND OBJECTIVES City of Missoula, Montana is accepting proposals from qualified firms to provide sole-provider administration, recordkeeping, education, and investment management services for the City’s Section 457 Deferred Compensation Plan. Listed below are the primary objectives of this review and selection process: • Lower participant and plan expenses; • Provide a simplified investment menu; • Provide for an orderly and timely transition; • Provide group seminars and individual meetings on investment and retirement planning topics; and • Outsource City plan administrative functions as appropriate. The City of Missoula (“City”) is a public agency located in Missoula, Montana. For more information, please refer to the City’s website at http://www.ci.missoula.mt.us/. The City currently offers one active 457 Deferred Compensation Plan. Nationwide Retirement Solutions (“Nationwide”), VALIC (“VALIC”), and ICMA Retirement Corporation (“ICMA”) currently provide enrollment, communication/education, investment management, and recordkeeping services for the Plan. As of June 30, 2009, there was approximately $4,666,552 invested in the 457 Plan. Provider asset breakdowns and key Plan statistics are as follows: KEY PLAN STATISTICS AS OF JUNE 30, 2009 – NATIONWIDE: Total Assets June 30, 2009 Total Number of Participant Accounts Total Active Accounts $2,325,533 92 57 2006 Total Deferrals 2007 Total Deferrals 2008 Total Deferrals Total Deferrals As of 6/30/09 $137,745 $123,941 $147,282 $60,105 2006 Total Roll-Ins 2007 Total Roll-Ins 2008 Total Roll-Ins Total Roll-Ins As of 6/30/09 $0 $0 $295,319 $163,769 Accounts in Distribution Annuitized 4 0 ---PAGE BREAK--- City of Missoula - 457 Deferred Compensation Plan Request for Proposal Page 3 Year Total Withdrawals (Systematic) Rollovers / Transfers Out Annuity Purchases 2006 $33,318 $15,821 0 2006 $19,689 $74,496 0 2008 $26,723 $6,330 0 As of 6/30/09 $13,143 $46,900 0 Fixed Income Rates: 2008 Annualized Yield 3.88% 2nd Quarter 2009 Credited Rate 3.60% Guaranteed For How Long? 3.60% guaranteed for 2nd quarter 2009. 2009 rate minimum is 3.50% KEY PLAN STATISTICS AS OF JUNE 30, 2009 – VALIC: Total Assets June 30, 2009 Total Number of Participant Accounts Total Active Accounts $2,025,720 [PHONE REDACTED] Total Deferrals 2007 Total Deferrals 2008 Total Deferrals Total Deferrals As of 6/30/09 $242,143 $287,672 $304,145 $155,145 2006 Total Roll-Ins 2007 Total Roll-Ins 2008 Total Roll-Ins Total Roll-Ins As of 6/30/09 $0.28 $68,378 $131,237 $0 Accounts in Distribution Annuitized N/A N/A Year Total Withdrawals (Systematic) Rollovers / Transfers Out Annuity Purchases 2006 $249,022 0 0 2006 $55,234 0 0 2008 $72,594 0 0 As of 6/30/09 $100,326 0 0 ---PAGE BREAK--- City of Missoula - 457 Deferred Compensation Plan Request for Proposal Page 4 KEY PLAN STATISTICS AS OF JUNE 30, 2009 – VALIC CONT.: Fixed Income Rates: 2008 Annualized Yield 3.75% 2nd Quarter 2009 Credited Rate 3.75% Guaranteed For How Long? September 2009 KEY PLAN STATISTICS AS OF JUNE 30, 2009 – ICMA: Total Assets June 30, 2009 Total Number of Participant Accounts Total Active Accounts $315,299 17 10 2006 Total Deferrals 2007 Total Deferrals 2008 Total Deferrals Total Deferrals As of 6/30/09 $44,400 $61,811 $37,268 $10,446 2006 Total Roll-Ins 2007 Total Roll-Ins 2008 Total Roll-Ins Total Roll-Ins As of 6/30/09 $0 $0 $0 $0 Accounts in Distribution Annuitized $0 ICMA does not track Year Total Withdrawals (Systematic) Rollovers / Transfers Out Annuity Purchases 2006 0 0 N/A 2006 1 0 N/A 2008 1 0 N/A As of 6/30/09 0 0 N/A Fixed Income Rates: 2008 Annualized Yield 4.09% 2nd Quarter 2009 Credited Rate 3.08% Guaranteed For How Long? One month For more information on Plan asset breakdowns and expenses, please see Attachment A. ---PAGE BREAK--- City of Missoula - 457 Deferred Compensation Plan Request for Proposal Page 5 MINIMUM REQUIREMENTS Proposing firms must meet the following requirements: 1. The firm must have at least three years experience administering Section 457 governmental deferred compensation plans and must be currently providing single-provider administration services to a minimum of three governmental Section 457 plans. 2. All proposals must come directly from the recordkeeping organization. 3. Options in the core Plan will be mutual funds with readily available expense ratios and daily NAV pricing. The only possible exception is the stable value option and where appropriate, to use co- mingled or separate account vehicles. 4. Should the City select a new Plan provider(s), the firm must have the ability to work with the former Plan provider to provide a recordkeeping solution for any assets that must remain invested with the former Plan provider until available to transition. 5. Upon award of the contract, the winning firm must be duly qualified to do business in the State of Montana. 6. The firm must comply with all applicable terms and conditions outlined in the Standard Contract Provisions included in this document. Unless otherwise noted in the cover letter, it is assumed that, by submitting a response to this RFP, your firm intends to conform to the specifications in every way. The proposed contract is subject to modification as to detailed working or format. 7. Any contract entered into by the City must stipulate that there will be no front-end charges, and no back-end charges or market value adjustments of any kind, with the exception of stable value or fixed income products. In addition, there will be no liquidity restrictions or penalties on participant transfers or withdrawals, with the possible exception of stable value equity wash provisions and/or mutual fund specific short-term trading fees. 8. The firm must offer a diversified stable value option or be able to administer a non-proprietary stable value fund. 9. The firm must accurately and fully disclose all fund expense and revenue sharing arrangements associated with all funds available to the City. 10. The firm must have knowledge of and comply with all applicable Montana state and federal regulations regarding governmental retirement plans and investment options. All laws of the State of Montana, whether substantive or procedural, shall apply to this contract, and all statutory, charter, and ordinance provisions that are applicable to public contracts in the City shall be followed with respect to this contract. 11. The terms outlined in this RFP must be guaranteed up to and through the negotiation of the final contract. ---PAGE BREAK--- City of Missoula - 457 Deferred Compensation Plan Request for Proposal Page 6 SCHEDULE The City plans to adhere to the following schedule regarding this RFP: Distribute Request for Proposal October 14, 2009 Deadline for written submittal of vendor questions, clarifications, exceptions and protests of specifications October 21, 2009 Response to vendor questions October 27, 2009 Sealed responses due to City and AM&A November 3, 2009 Evaluation period November 3, 2009 – December 4, 2009 Optional finalist interviews TBD Announcement of Intent to Award TBD Contract effective/work begins TBD The anticipated selection date expresses the present intent of the City to award a contract for deferred compensation plan services and is not a representation, agreement or promise that in fact any contract will be awarded on that date or at any other time. It is the City’s intent to contract with a single deferred compensation plan vendor, but the City retains the right to reject any and all proposals made to it. PROVIDER QUESTIONS Questions regarding this RFP must be submitted via email to Arnerich Massena & Associates, the Plan’s consultant, at [EMAIL REDACTED] and [EMAIL REDACTED], with an additional electronic copy to [EMAIL REDACTED]. The deadline for submitting written questions is October 21, 2009. Interpretations, clarifications or supplemental instructions will be issued in writing and will be emailed to all parties recorded as having received the Request for Proposal. Only questions answered by formal written addenda will be binding. Oral and other interpretations, clarifications or submittal instructions will be without legal effect. Responses to these questions will be posted on the City’s website on October 27, 2009. CONTRACT PERIOD The contract will be for a minimum term of three years, with the option to extend for additional terms subject to approval from the City. At the time of renewal, fees and expenses may be renegotiated. RESPONSE SUBMISSION Two hard copies and one separate CD ROM copy of the response must be received by 5:00 p.m. Mountain Time on November 3, 2009 at: Mr. Brentt Ramharter, Finance Director / Treasurer City of Missoula 435 Ryman Street Missoula, MT 59802 [EMAIL REDACTED] ---PAGE BREAK--- City of Missoula - 457 Deferred Compensation Plan Request for Proposal Page 7 In addition please provide one hard copy and an electronic version (in Word and Excel only), via e-mail, to: Howard Biggs, Managing Director, Retirement Plan Consulting Arnerich Massena & Associates 2045 NE Martin Luther King Jr. Blvd Portland, OR 97212 [EMAIL REDACTED] and [EMAIL REDACTED] Any proposal not received at the above addresses by the prescribed time and date will be considered non-responsive. Faxed proposals will not be accepted. Proposals must be submitted specifically as outlined and each request for information must be answered thoroughly and accurately. The written proposals are the official documents in the event of any disparity between electronic files and written proposal responses. REQUIRED WRITTEN DOCUMENTS 1. Cover Letter. The proposer’s cover letter should not exceed two pages in length and must be signed by an individual with authority to bind the organization to the terms quoted in the Request for Proposal. 2. Questionnaire. Respond to all questions and requests listed on pages 12 through 30 of the Request for Proposal. Please precede your answer with a copy of the question. STANDARD CONTRACT PROVISIONS Proposer Certification By submission of this proposal, the proposer certifies that: 1. The proposer has not paid or agreed to pay any fee or commission, or any other item of value contingent on the award of this contract to any employee, official or current contracting consultant of the City. 2. The prices in this proposal have been arrived at independently and without consultation, communication or agreement, for the purpose of restricting competition as to any matter relating to such prices, with any other proposer. Proposer Incurred Costs Each proposer will be responsible for all costs incurred in preparing or responding to this RFP. All materials and documents submitted by the proposer in response to this RFP will become the property of the City and will not be returned. The proposer agrees to bear all risks for loss, injury or destruction of goods and materials ordered or supplied as the result of the eventual contract, which may occur prior to the delivery to the City; and such loss, injury or destruction shall not release the contractor from any obligation under this RFP or any resulting contract. ---PAGE BREAK--- City of Missoula - 457 Deferred Compensation Plan Request for Proposal Page 8 Proposal Confidentiality All proposals received become a part of public record and subject to public disclosure. Contractual Obligation: The City shall consider the contents of the submission of the proposal as a contractual obligation upon acceptance of the proposal. Failure to meet these obligations may result in forfeiture of the proposal bond, or any other bonds, as liquidated damages therefore. Contract Termination The City may terminate this contract due to non-renewal, unavailability of funds or for neglect as determined by the City which shall include, but not necessarily be limited to; insufficient insurance coverage, failure to provide required standards of service, failure to provide quality and frequency of service deemed by the City of Missoula to be unsatisfactory. This may include any cessation or diminution of service including but not limited to failure to maintain adequate personnel, whether arising from labor disputes, or otherwise, any substantial change in ownership or proprietorship of the contractor which in the opinion of the City is not in its best interest, or failure to comply with the terms of this contract. The City shall provide ten (10) calendar days written notice of contract neglect and unless within ten (10) calendar days such neglect has ceased and arrangements made to correct, the City may terminate the contract. The City upon 10-day written notice may cancel contract if it is determined that the contractor does not conform to the procedures outlined in their proposal. Should the City breach any terms or provisions of this contract, the contractor shall serve written notice on the City setting forth the alleged breach and demanding compliance with the contract. Unless within ten (10) calendar days after receiving such notice, the allegations shall be contested or such breach shall cease and arrangements made for corrections, the contractor may terminate the contract. Other Information 1. The contractor shall be financially responsible for obtaining all required permits, licenses, and bonding to comply with pertinent regulations; municipal, county, state and federal laws, and assume liability for applicable taxes. 2. The contractor shall indemnify, hold harmless and defend the City of Missoula against any and all liability claims, cost of whatsoever kind and nature occurring in connection with or in any way incident to or arising out of service, operations or performance of work in connection with this contract resulting in whole or part from the negligent acts or omissions of contractor, employee, agent or representative of the contractor. 3. Recognizing that the successful performance of this contract is dependent on favorable response from the users, the contractor shall meet regularly with the authorized City agent, or representative to effect adjustments in operations, and cooperate at all times to maintain maximum efficiency and good public relations. ---PAGE BREAK--- City of Missoula - 457 Deferred Compensation Plan Request for Proposal Page 9 4. The contractor shall not engage the services of any person employed by the City including any department, commission or board thereof without written consent of the City. 5. It is understood that the contractor’s officers and employees are in no way considered employees of the City of Missoula. 6. The contractor agrees that this agreement has been entered into without collusion or other action in restraint of competition. 7. The contractor shall certify that it carries workers’ compensation insurance for its employees and that it has either elected workers’ compensation coverage for its principals or has an approved exemption from such coverage as required by Section 39-71-401 MCA. Prime Contractor The contract and any part thereof shall not be subcontracted or assigned to another contractor without prior written permission of the City of Missoula. Severability and Survival If any of the provisions contained in the Contract are held illegal, invalid, or unenforceable, the enforceability of the remaining provisions shall not be impaired thereby. Limitations of liability and indemnities shall survive termination of the Contract for any cause. If a part of this Contract is valid, all valid parts that are severable from the invalid part remain in effect. If a part of this Contract is invalid in one or more of its applications, the part remains in effect in all valid applications that are severable from the invalid applications. Non-Discrimination and Affirmative Action The Contractor will take affirmative action to ensure that applicants are selected, and that employees are treated during employment, without regard to their race, color, creed, religion, national origin, sex, sexual orientation, marital status, status with regard to public assistance, membership or activity in a local civil rights commission, disability or age. Insurance / Indemnification The Contractor agrees to procure and maintain in effect insurance policies in the amount and with the type of coverage shown below: 1. Errors and Omission insurance protecting the Contractor and its employees in an amount not less than $1 million. 2. The contractor shall certify that it carries workers’ compensation insurance for its employees and that it has either elected workers’ compensation coverage for its principals or has an approved exemption from such coverage as required by Section 39-71-401 MCA. 3. Commercial General Liability insurance on an “Occurrence Basis” with limits of liability not less than $1,500,000 per occurrence and/or aggregate combined single limit personal injury, bodily injury and property damage. ---PAGE BREAK--- City of Missoula - 457 Deferred Compensation Plan Request for Proposal Page 10 4. Motor Vehicle Liability, with limits of liability not less than $500,000 per occurrence combined single- limit bodily injury and property damage. Coverage shall include all non-owned vehicles, and all hired vehicles. OTHER CONSIDERATIONS For purposes of addressing questions concerning this RFP or for seeking alternative contract terms, the sole contact will be the City’s Consultant, Arnerich Massena & Associates, Inc. Upon issuance of this RFP, employees and representatives (including elected officials) of the City must not be contacted regarding this RFP process. Failure to observe this restriction may result in disqualification of any vendor response. This restriction does not preclude discussions between affected parties for the purpose of conducting business unrelated to this procurement. The City will not consider the submission of unsolicited, additional terms, after the response deadline. This RFP and all written material received from the successful vendor will be incorporated into the contract between the City and the firm unless specifically superseded in the signed contract. All information becomes the property of the City. All responses and information will be kept confidential until after the awarding of the contract. A respondent filing a proposal thereby certifies that no officer, agent or employee of the City who has pecuniary interest in this RFP has participated in the contract negotiations on the part of the City, that the proposal is made in good faith, without fraud, collusion or connection of any kind with any other respondent of the same call for proposals, and that the respondent is competing solely in its own behalf without connection with or obligation to, any undisclosed person or firm. The proposer shall make all investigations necessary to inform itself regarding the services to be performed under this RFP. Issuance of this RFP and receipt of responses does not commit the City to award a contract, and the City reserves the right to reject any and all responses at any time with no penalty and/or waive immaterial defects and minor irregularities in responses. All vendors are hereby notified that the execution of a contract pursuant to this RFP is dependent on the negotiation of an acceptable contract with the successful vendor. If such a contract cannot be negotiated within a reasonable period, the City may enter into negotiations with another qualified vendor. The City will not be liable for any costs incurred by vendors in the preparation and presentation of information submitted in response to the RFP or in the participation in demonstrations. The City will not recognize any assignment or transfer of interest in the contract without written notice to and written acceptance by the City. NEGOTIATION WITH SELECTED VENDOR The final evaluation will be based, in part, on the Vendor’s method of providing the service and the fee schedule achieved through discussions and agreement with the City’s Deferred Compensation Oversight Committee. The City is under no obligation to accept the lowest priced proposal and reserves the right to further negotiate services and costs that are proposed. If a contract is not successfully negotiated with the selected vendor, then the City reserves the right, but it is not required, to negotiate with another vendor, and so on, until a contract is negotiated. Otherwise the City may reject all proposals. ---PAGE BREAK--- City of Missoula - 457 Deferred Compensation Plan Request for Proposal Page 11 INTERVIEWS The City may require interviews with Proposers. The City may also request work samples if the City determines that such further evaluation should be added as rated criteria to enable the City to properly evaluate the proposals. NEGOTIATIONS The matters subject to negotiation shall be limited to the following: Price, including fees and expenses; Investment options; Services to be provided; The manner in which the services are to be performed; The personnel to be committed to the City’s contract; and Contract terms and provisions that the City would like to change. ACTION UPON FAILURE TO EXECUTE CONTRACT In the event that a contract cannot be negotiated with the selected Proposer, the City will start contract negotiations with the next highest ranked Proposer. Nothing in this RFP shall restrict or prohibit the City from canceling the solicitation at any time. NOTICE OF AWARD The City will select the proposal deemed most beneficial to the participants based on its evaluation of the proposals. The apparent successful Proposer and all other persons who submitted proposals will be notified of the City’s selection. Final award will depend upon the execution of an acceptable contract and evidence of insurance, if required, and may be withdrawn by the City at any time prior to execution of the contract by the City. ---PAGE BREAK--- City of Missoula - 457 Deferred Compensation Plan Request for Proposal Page 12 QUESTIONNAIRE Keep responses clear and concise. Questions that are marked with Yes/No only require a description if requested. If no description is requested, these questions will be recorded as a Yes/No response only, and no additional consideration will be given. SECTION A – ORGANIZATION AND FINANCIAL STRENGTH A-1. Please complete the tables below. Data as of 9/30/09 Total Participants Total Number of Plans Total Plan Assets Defined Contribution Plans Data as of 9/30/09 Average Plan Participants Average Plan Assets Median Plan Participants Median Plan Assets Defined Contribution Plans A-2. Please complete the following plan profile tables, which describe your current defined contribution plan clientele, including 457, 401(a), 403(b), and 401(k) plans. Data as of 9/30/09 Total Participants Total Number of Plans Total Plan Assets Average Plan Participants Average Plan Assets Median Plan Participants Median Plan Assets Under 100 participants From 100 to 500 participants From 500 to 1,000 participants From 1,000 to 5,000 participants From 5,000 to 10,000 participants Over 10,000 participants TOTAL ---PAGE BREAK--- City of Missoula - 457 Deferred Compensation Plan Request for Proposal Page 13 Data as of 9/30/09 Total Participants Total Number of Plans Total Plan Assets Average Plan Participants Average Plan Assets Median Plan Participants Median Plan Assets Under $2 million From $2 million to $10 million From $10 million to $50 million From $50 million to $100 million From $100 million to $250 million From $250 million to $500 million Over $500 million TOTAL A-3. How many defined contribution plans have you won in the last three years? How many existing defined contribution plan clients have you lost in the last three years? Please complete the following table. This response should not include existing clients that were successfully retained, but should include cases in which you elected not to re-bid. Data as of 9/30/09 Bids Won Existing Clients Lost Under $2 million From $2 million to $10 million From $10 million to $50 million From $50 million to $100 million From $100 million to $250 million From $250 million to $500 million Over $500 million TOTAL A-4. Provide the legal name of the responding organization and its address, telephone number, fax number, and company Internet web address. Please provide the mailing address, if different. A-5. Provide the name, address, telephone number, fax number, and e-mail address of the primary contact for matters relating to this RFP. A-6. Briefly describe the ownership structure of your organization and any subsidiaries it may have. Identify parent company and any affiliated businesses of the vendor. ---PAGE BREAK--- City of Missoula - 457 Deferred Compensation Plan Request for Proposal Page 14 A-7. In what year was your organization founded? A-8. In what year did your organization begin to provide defined contribution recordkeeping services? A-9. How many total employees does your firm have that service defined contribution plans? A-10. How long has your organization been providing services to defined contribution plans? Please complete the table: Type of Plan Since 401(a) plans 403(b) plans 457 plans 401(k) plans All defined contribution plans A-11. How many total employees does your firm have that service defined contribution plans? Please complete the table: Type of Plan Number of Employees 401(a) plans 403(b) plans 457 plans 401(k) plans All defined contribution plans A-12. Are there any discussions or pending agreements to merge or sell any part of your organization? (Yes/No) If yes, please explain. A-13. Are there any discussions or pending agreements to buy any outside organizations? (Yes/No) If yes, please explain. A-14. Has your organization ever been petitioned into bankruptcy or insolvency? (Yes/No) If yes, please explain and provide applicable date(s). A-15. Please provide your most recent audited financial statement. A-16. Please provide the responding firm’s credit ratings from Standard & Poor’s, Moody’s, and Fitch. If rated by another service, provide the rating and rating criteria. If not rated, demonstrate to the best of your ability the financial strength and stability of your organization. Please also comment on any ratings changes in the past 24 months. A-17. Describe any legal issues, litigation, and/or subpoenas from regulators, in the past five years, your organization and/or local service representatives have been involved in resulting from current or past involvement with any defined contribution or pension plan. ---PAGE BREAK--- City of Missoula - 457 Deferred Compensation Plan Request for Proposal Page 15 A-18. Has your organization or any of your service representatives been cited, reprimanded or penalized, by any regulatory agency within the past five years? (Yes/No) If yes, please describe. A-19. Does your firm have any affiliations with or endorsements from any public or private organizations? (Yes/No) If yes, please describe the relationship and include a description of whether or not it is a monetary relationship. SECTION B – PARTICIPANT SERVICES B-1: How do you propose staffing for onsite participant services? B-2: Briefly describe the credentials and related experience of participant service representative(s) who will be assigned. B-3: Do you currently have staff located in the City of Missoula? (Yes/No) B-4: Do you currently have an office located in the City of Missoula? (Yes/No) If no, where is the closest office located? B-5: Where will the participant service representatives for this account be located? B-6: How many participant service representatives will be dedicated to the Plan? B-7: Will the participant service representative(s) for this account be exclusively dedicated and serve only the Plan? (Yes/No) B-8: If the participant service representatives will not be exclusively dedicated, how many accounts will the assigned representative(s) be responsible for? B-9: What is the total number of participants each service representative will be responsible for, including this Plan’s participants? B-10: Will you need to hire any additional staff in order to service this account? (Yes/No) B-11: Will the Plan Sponsor be able to participate in selecting participant service representatives? (Yes/No) Please explain. B-12: Will the assigned participant service representatives be employees of your firm? (Yes/No) B-13: Will the assigned participant service representatives be compensated on an annual salary basis? (Yes/No) B-14: Will participant service representatives receive commissions, bonuses, incentives, or other compensation? (Yes/No) If yes, please detail the compensation structure for the representatives. Be sure to include an explanation of how bonuses and incentives are determined. B-15: Are participant service representatives incentivized to solicit products that are not directly associated with the Plan? (Yes/No) ---PAGE BREAK--- City of Missoula - 457 Deferred Compensation Plan Request for Proposal Page 16 B-16: Do you require any special licensing or training for local service personnel? (Yes/No) If yes, please describe. Yes / No Series 6 Series 7 Series 63 Series 65 CFP Other (describe) B-17: Will you provide participants with onsite, group education, and retirement planning sessions on an on-going basis? (Yes/No) B-18: Are you willing to provide individual meetings and group sessions at sites and times specified by the Plan Sponsor? (Yes/No) B-19: Are you willing to indemnify and hold City of Missoula harmless from any and all legal claims, and actions arising out of the education activities related to administration of the plan in compliance with related deferred compensation fiduciary compliance requirements under state and federal law? (Yes/No) If no, or if there are any limitations, please explain. B-20: Are all local representatives equipped with a laptop computer? (Yes/No) If yes, complete the table listing information and transaction capabilities available via the laptop. Your response should include information and transactions that are available entirely via the representative’s laptop computer. You should not answer affirmatively if the process involves phone contact or the completion of a paper form. Information Available via Laptop Available (Yes / No) Internet Connection Required (Yes/No) Plan/Participant Balances by Fund Contribution History Transaction History Outstanding Loan Balances Loan History Loan Modeling Withdrawal History Fund Performance Information Retirement Benefit Illustrations Financial Advice Programs Take Home Pay Effect Calculator Information Available via Laptop Available (Yes / No) Internet Connection Required (Yes/No) Enrollment Transactions Fund to Fund Transfers Future Investment Election Changes Deferral Rate Changes Initiate Loans Initiate Term Distribution ---PAGE BREAK--- City of Missoula - 457 Deferred Compensation Plan Request for Proposal Page 17 B-21: What measures are in place to ensure participant information stored on a laptop computer is secure? Please explain. B-22: Are local representatives equipped with a portable printer? (Yes/No) B-23: Are participants able to enroll and make changes to their accounts by filling out a paper form? (Yes/No) B-24: Are participants able to enroll and make changes to their accounts electronically? (Yes/No) B-25: How many onsite service days per year will you commit to? per representative. total. B-26: Do you offer video or web-based educational programs to participants and retirees? (Yes/No) If yes, please list the classes/courses/topics currently available. No description necessary. B-27: Do you offer general investment guidance to participants online? (Yes/No) Investment Guidance Info Describe On-line advice vendor Used since Number of plans utilizing this service Total number of participants utilizing this service Average utilization rate B-28: Do you offer specific investment advice (not related to managed accounts – see question B-59 for managed account services) to participants online? (Yes/No) If yes, complete the following table. Investment Advice Info Describe On-line advice vendor Used since Number of plans utilizing this service Total number of participants utilizing this service Average utilization rate B-29: Will you offer forms and communication materials that are specifically customized for this Plan? (Yes/No) B-30: Do participant statements aggregate all account information if a participant were to have multiple plans/accounts with you as part of this contract? (Yes/No) B-31: Do all statements allow for a customized message from the Plan Sponsor? (Yes/No) ---PAGE BREAK--- City of Missoula - 457 Deferred Compensation Plan Request for Proposal Page 18 B-32: What type of fund performance and risk information is available on or with the quarterly statements? Complete the following table. Information Available (Yes/No) Quarterly Return Year-to-Date Return 5-Year Return Asset Allocation Expense Ratios Commentary Other (specify) B-33: Do all statements include a personal rate of return calculation? (Yes/No) If yes, how is this return calculated? B-34: How many days after quarter end until statements are mailed to participants? B-35: Are quarterly statements for all plans available to participants online? (Yes/No) If yes, how many days after quarter end? B-36: How long are archived participant statements available online? B-37: Is it possible for a participant to access historical data regarding their account online? (Yes/No) If yes, in what format is this information available to download (PDF, Excel, etc)? Please describe. B-38: Please provide a sample quarterly participant account statement. B-39: Will you provide a customized Internet site for the Plan? (Yes/No) If yes, briefly describe what level of customization is available. B-40: What Internet security measures do you have in place? B-41: Are Internet security measures tested or audited? (Yes/No) If yes, please briefly describe. B-42: What are the minimum requirements for participants to have the ability to access the website and account information? (Browser version, processor speed, memory, etc.). B-43: Are participants able to print statements of account for varying time periods (other than quarterly or annually), on demand, from your Internet site? (Yes/No) B-44: Does the plan sponsor have the ability to create a customized participant message for posting on the Internet site? (Yes/No) B-45: Have there ever been instances where the website was not functioning? (Yes/No) If yes, please describe frequencies and duration. B-46: Please explain how phone and Internet passwords are assigned and changed. ---PAGE BREAK--- City of Missoula - 457 Deferred Compensation Plan Request for Proposal Page 19 B-47: Indicate what level of securities licensing your phone customer service representatives (CSR) are required to carry? (Yes/No) Yes / No Series 6 Series 7 Series 63 Series 65 CFP Other (describe) B-48: Is participant information automatically relayed to CSRs through automated call center processing? B-49: What is the annual employee turnover rate for your phone CSRs? B-50: Will participants have access to a Voice Response Unit (VRU) that will allow them automated access to their account information and ability to make account changes? B-51: Will you provide customization for the Voice Response Unit (VRU)? (Yes/No) If yes, briefly describe the level of customization available on your VRU. B-52: What type of fund option performance and risk information is available through your website? B-53: Complete the following tables about your phone/internet services regarding the information and transaction capabilities available to participants through Customer Service Representatives (CSR) in home office, Voice Response Unit (VRU) and Internet. Indicate availability with yes/no. An affirmative response should be given only for information or transactions that can be retrieved or completed entirely via the represented medium. Do not answer “yes” for those information retrievals or transaction completions that require more than one medium for completion. Complete the following table regarding information available (Yes/No) Participant Inquiry CSR VRU Internet Total Account Balance Account Balance by Fund Deferral Rate SDBA Balances by Investment Investment Elections Fund Performance Transaction History Outstanding Loan Balance Loan History Loan Modeling Withdrawal History Contribution History Beneficiary Designation Specific Investment Advice Managed Accounts ---PAGE BREAK--- City of Missoula - 457 Deferred Compensation Plan Request for Proposal Page 20 Complete the following table regarding transaction capabilities available (Yes/No) Transactions CSR VRU Internet Enrollment (paperless)* Deferral Change (paperless)* Fund to Fund Transfers (paperless)* Automatic rebalance Future Investment Election Change (paperless)* SDBA Transactions Prospectus Request Loan (paperless)* IRA Rollover Term Distribution (paperless)* * Paperless transactions are those where the entire process can be conducted without completing or signing a paper form. B-54: Complete the following tables with information about your call center and Internet service. Times should be in Pacific Time. VRU Internet Site % of all participant transactions handled completely via Days available Hours available CSR % of all participant transactions handled completely via Total CSRs Total CSRs dedicated exclusively to defined contribution plans Days available Hours available Total number of participants record kept on the system ---PAGE BREAK--- City of Missoula - 457 Deferred Compensation Plan Request for Proposal Page 21 B-55: Complete the following table identifying your annual Call Center service standards and/or benchmarks. Also identify the actual performance in 2007 and 2008. Standard / Benchmark 2007 Actual 2008 Actual Number of calls Response time Average length of calls % of calls requiring follow-up Number of dropped calls % of calls handled completely by VRU Average hold time B-56: Please provide test passwords and log in information for demonstrations of your phone and Internet services. Please ensure that all test accounts remain available for a minimum of 90 days. B-57: Do you offer specific investment advice to participants on an in-person basis, not through an on- line advice provider? (Yes/No) If yes, please describe. B-58: Does your firm, or a firm you are partnered with to give investment advice, assume fiduciary responsibility for the recommendations that are given to participants? (Yes/No) B-59: Do you provide “managed account” services that enable a participant to pay a fee for your firm or partner firm to provide discretionary management of investment decisions for that participant? (Yes/No) If yes, please explain. Managed Account Info Describe On-line advice vendor Used since Number of plans utilizing this service Total number of participants utilizing this service Average utilization rate B-60: Will you offer comprehensive financial planning services, through a Certified Financial Planner (CFP) to participants? (Yes/No) If yes, is this service provided by your firm or an affiliate and are participants able to meet locally with the CFP? B-61: If your firm provides financial planning services other than through a CFP, please describe this service. B-62: What special educational services do you offer specifically for employees nearing retirement? B-63: What special educational services do you offer for those employees who are already in retirement? B-64: How do you communicate the availability of such services to retirees? ---PAGE BREAK--- City of Missoula - 457 Deferred Compensation Plan Request for Proposal Page 22 SECTION C – INVESTMENT FLEXIBILITY C-1: Would the investment options of the Plan be subject to any requirements or limitations (minimum number or assets in proprietary funds, certain share classes imposed, limited to certain fund families, etc.)? (Yes/No) If yes, describe requirements and limitations and specify whether a sole provider scenario is assumed. C-2: Please provide a list of funds that would be available to use as the Plan’s investment options. C-3: Are you willing to establish agreements with funds that are not currently available through your network of funds that would be available to use as the Plan’s investment options? (Yes/No) If yes, please describe any restrictions and timelines or windows. C-4: What is the maximum number of investment options that can be implemented? C-5: How long does it typically take to change an investment option? weeks. C-6: Is the process to add a fund to the network subject to any particular quarterly, or annual schedule? (Yes/No) If yes, please explain. C-7: What would the minimum fund revenue share requirement be, if any? C-8: Do you offer an automatic allocation rebalance feature that allows participants to rebalance their account periodically? (Yes/No) If yes, please describe and list what frequencies can be utilized. C-9: Can you administer a series of customized, risk-based or target date fund portfolios rebalanced quarterly, or annually? (Yes/No) C-10: What are the additional costs of having this series of customized funds (if any)? C-11: Do you offer a Self-Directed Brokerage Account (SDBA) option? (Yes/No) C-12: Which brokerage firm(s) can be utilized? C-13: Who is the recordkeeper of the SDBA? Since C-14: Who will be the Plan’s custodian for SDBAs? C-15: Where is the SDBA custodian located? C-16: Will the SDBA custodian also act as trustee? (Yes/No) C-17: Briefly, describe the process for conducting a transaction in a SDBA. C-18: How long have you offered a SDBA? C-19: What securities are participants capable of trading via the SDBA? C-20: Do you have the ability to restrict trading in a SDBA to certain types of securities? (Yes/No) C-21: Discuss any SDBA restrictions regarding asset transfers and trading frequencies that may be imposed. ---PAGE BREAK--- City of Missoula - 457 Deferred Compensation Plan Request for Proposal Page 23 C-22: Please describe what information quarterly statements include regarding specific transactions conducted in a SDBA. C-23: Are SDBA statements generated separately? If so, how frequently are statements mailed to participants and how many days after period-end? C-24: Are you able and willing to recordkeep non-proprietary stable value fund on your system? (Yes/No) If yes, please list which stable value or fixed accounts funds are available for utilization. C-25: If the Plan is required to use proprietary stable value or general account fund please provide the following information for the funds you are requiring: Market-to-Book Value % Fund 6/30/08 9/30/08 12/31/08 6/30/09 Average Portfolio Duration (in Years) Fund 6/30/08 9/30/08 12/31/08 6/30/09 Sector Allocation Fund U.S. Treasury Mortgages ABS Credit Non- U.S. GICS Cash Other (Specify) Total 100% 100% Quality Distribution Fund AAA AA A BBB