master actuarial services agreement a. whereas, … · actuary shall prepare and deliver to fcera...

MASTER ACTUARIAL SERVICES AGREEMENT

THIS MASTER ACTUARIAL SERVICES AGREEMENT (this "Agreement") is made and entered into by and between FRESNO COUNTY EMPLOYEES’ RETIREMENT ASSOCIATION ("FCERA") and The Segal Company ("Actuary").

A. WHEREAS, FCERA is a public agency created pursuant to the California County Employees Retirement Law of 1937 (Cal. Gov’t Code Section 31450, etseq.) and is administered by its Board of Retirement (the "Board");

B. WHEREAS, pursuant to Gov’t Code Section 31453 and other applicable provisions, the Board has a duty to engage the services of an actuary;

C. WHEREAS, Actuary represents that it is an "enrolled actuary" under Sections 1241 and 1242 of Title 29 of the United States Code and meets the standards of a qualified actuary under the Employee Retirement Income Security Act of 1974, and is specifically qualified and experienced thereunder and desires to perform the actuarial services as contemplated herein; and

D. WHEREAS, the Board has determined that it is in the best interest of FCERA to (i) retain and engage the services of Actuary and (ii) assign to Actuary the duties and responsibilities as more particularly set forth herein.

NOW, THEREFORE, in consideration of the foregoing premises and the mutual covenants of the parties set forth herein, IT IS HEREBY AGREED AS FOLLOWS:

Description of Actuarial Services.

a. Actuary shall provide the actuarial services more particularly set forth on Exhibit A (the "Services"), upon the request of the Board from time to time, during the term of this Agreement. The request shall be in writing and signed by both parties (the "Scope of Work") and shall be consecutively marked as an exhibit to, shall become a part of, and shall be subject to the terms and conditions of this Agreement (each, an "Exhibit" and collectively, the "Exhibits"). Each Scope of Work shall identify, as fully as possible, the scope of the Services requested, including, but not limited to, the final deliverables, appropriate time frames in which the deliverables are to be complete, the fees and costs for the deliverables, and the location for the performance of the Services. Actuary agrees that its principals, Paul Angelo, Michael Moehle and Andy Yeung, shall be assigned to FCERA work under this Agreement as its primary relationship actuaries.

b. All Exhibits shall be subject to the terms of this Agreement, and to the extent the terms of any Exhibit and this Agreement are in direct conflict, the terms of this Agreement shall govern unless the applicable Exhibit expressly provides otherwise by explicit reference to this Section 1.B. Unless otherwise expressly specified in writing, the terms and conditions of each Exhibit shall not be affected by and shall have no effect upon, the terms and conditions of any other Exhibit.

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2. Standards of Performance.

a. Actuary shall deliver to FCERA the Services and deliverables in such form and manner and at such times as are specified in the applicable Exhibits. FCERA acknowledges that such time frames represent Actuary’s good faith estimate of the periods required to perform the Services and further, that any such estimated time frame is contingent upon FCERA providing to Actuary any necessary information and/or performing any necessary action in a timely fashion,

b. Actuary shall perform the Services in accordance with the following standards:

(1) Actuary shall perform the Services in the highest professional manner, and shall assign staff that, in Actuary’s judgment, has sufficient education, training or experience to perform the tasks assigned to them. Members of the assigned project team, while working "on-site" at FCERA premises, shall conduct themselves in accordance with FCERA’s policies and procedures respecting the conduct of FCERA’ s own employees, which such policies and procedures shall be communicated in advance to the assigned project team.

(2) The Services and deliverables provided to FCERA in connection with the performance of the Services shall not infringe on any intellectual property right of any third party.

(3) Actuary shall perform its obligations hereunder in a professional and workmanlike manner in accordance with industry norms. Actuary shall maintain in force and effect, and in performing the Services shall comply with, all of its internal Quality Assurance Procedures which procedures are incorporated herein by this reference.

(4) Actuary shall comply at all times with all federal, state and local laws applicable to it and to FCERA, and shall obtain from the appropriate authorities all registrations, permits, licenses and indemnities required for the conduct of Actuary’s business and the provision of Services and deliverables pursuant to this Agreement.

3. Fees and Payment.

a. FCERA shall pay Actuary, in consideration tbr the Services provided to FCERA, such fees as are set forth on the applicable Exhibit. Actuary shall prepare and deliver to FCERA all invoices, as and when specified in the applicable Exhibits; each such invoice shall include (i) a detailed list of the Services rendered to FCERA by Actuary, and (ii) the charges therefor. Unless otherwise specified in the applicable Exhibit, payment thereunder will be due and payable to Actuary within thirty (30) days of FCERA’s receipt of Actuary’s invoice.

b. FCERA agrees to reimburse Actuary for all reasonable and necessary expenses actually incurred by Actuary in performing the Services, provided all such expenses are contemplated by and described on the Exhibit.

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4. Client Information. FCERA shall provide Actuary with all such direction, materials, information and access to an FCERA representative as may be necessary for Actuary to render the Services. Actuary shall not be responsible for verifying the accuracy or completeness of any information supplied to Actuary by FCERA. To the extent such information is known by Actuary to be inaccurate or incomplete, written notice shall be given to FCERA of the nature of the inaccurate or incomplete information and any material time or expense required to correct the information shall be billed as an additional service outside of the relevant Scope of Work.

5. Confidential Information.

a. Definition. The term "Confidential Information" shall mean any and all information that is disclosed to Actuary verbally, electronically, visually, or in a written or other tangible form that is either identified or should be reasonably understood to be confidential or proprietary, including members’ records as provided by law. The term Confidential Information shall not include any information that (1) was in the possession of, or was rightfully known by Actuary without an obligation to maintain its confidentiality prior to receipt from ECERA; (2) is or becomes generally known to the public through no fault of Actuary; (3) is obtained by Actuary in good faith from a third party having the right to disclose it without any obligation of confidentiality; (4) is independently developed by Actuary without the use of or reference to any of FCERA’ s Confidential Information and without violating any of Actuary’s obligations under this Paragraph 5; or (5) is required to be disclosed by court order or applicable law, provided notice is promptly given to FCERA and, provided further, that diligent efforts are undertaken to limit such disclosure.

b. FCERA’s Confidential Information shall be treated as strictly confidential by Actuary and shall not be disclosed by Actuary to any third party, except to those third parties operating wider non-disclosure provisions no less restrictive than those set forth in this Section and who have ajustified "need to know" in connection with the conduct of F’CERA’s business.

C. The terms of this Section 5 shall survive termination of this Agreement.

6, Indemnification. Actuary agrees to indemnify, defend and hold harmless ECERA, its Board, officers and employees from any and all claims, losses, damages and liability, and any attorneys fees and costs incurred in connection therewith, (collectively, "Claims") to the extent caused by Actuary’s wrongful or negligent acts or omissions. Notwithstanding anything to the contrary herein, Actuary shall not be liable for that portion of any Claims to the extent caused by the wrongful or negligent acts or omissions of FCERA, its Board, officers, employees, other contractors or agents. The terms of this Section 6 shall survive termination of this Agreement.

Audit, At any time during the term of this Agreement and for a period of two (2) years after the date a final invoice is delivered to FCERA in respect of any Services, FCERA shall have the right to review, upon reasonable notice, any and all records relating to the Services and the charges incurred for the Services provided under the Scope of Work, except for the confidential or proprietary information or trade secrets of Actuary, or as otherwise provided by law with respect to any third party. Actuary shall retain all such records for so long as necessary to

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perform its obligations hereunder. Upon the exercise by FCERA of this right, Actuary shall make available such records as determined by Actuary to be necessary to enable FCERA to audit the services rendered and the entire amounts charged to FCERA under a Scope of Work. FCERA shall compensate Actuary for reasonable time expended by Actuary and shall reimburse Actuary for any reasonable expenses incurred in connection with said review, which review shall be conducted at mutually convenient times and locations, and in a manner that does not disrupt Actuary’s or FCERA’s business operations. Any information disclosed to FCERA in the course of the review, if designated in writing as confidential by Actuary, shall be treated as confidential information of the Actuary and shall not be disclosed by FCERA to any third party, except to those third parties operating under non-disclosure provisions no less restrictive than those set forth in this Agreement and who have a justified business "need to know", or pursuant to a court order. Notwithstanding the foregoing, to the extent FCERA engages a third party to assist it in conducting a review contemplated by this provision, no such third party may participate in the review without the prior reasonable consent of the Actuary. It shall not be considered reasonable for Actuary to refuse to consent to allow a third party that provides similar services as Actuary to participate on behalf of FCERA in the audit review process, except Actuary may decline to disclose to such a third party its confidential, proprietary information or trade secrets. The terms of this Section 7 shall survive termination of this Agreement for the period provided by this Section.

8. Ownership of Deliverables. Except to the extent of Actuary’s proprietary techniques, methodologies and report formats (collectively, "Actuary’s Proprietary Information"), all documents, data, and other tangible materials authored or prepared and delivered by Actuary to FCERA under the terms of this Agreement (collectively, the "Deliverables"), are the sole and exclusive property of FCERA once paid for by FCERA, unless it is otherwise excused from payment. To the extent that Actuary’s Proprietary Information is incorporated into such Deliverables, FCERA shall have a perpetual, nonexclusive, worldwide, royalty-free license to use, copy, and modify Actuary’s Proprietary Information as part of the Deliverables, in the ordinary course of FCERA’s business.

9. Term and Termination. This Agreement shall be deemed effective as of February 7, 2007 ("Effective Date"), and shall remain in effect, unless terminated earlier pursuant to this Section, for three years. Notwithstanding the foregoing, either party may terminate this Agreement, or a project described in a Scope of Work, at any time and for any reason, by providing at least thirty (30) days prior written notice to the other. Upon termination, FCERA shall be responsible for all actual expenses and charges incurred for Services performed up to the effective date of the termination.

10. Insurance. During the term of this Agreement and any Scope of Work, and for so long thereafter as necessary to cover events occurring during such term and the consequences therefrom, Actuary shall maintain insurance policies relating to professional liability, statutory minimum workers’ compensation and general liability in amounts that are reasonable and customary for Actuary’s business activities. Notwithstanding the foregoing, Actuary shall secure one or more insurance policies from insurer(s) with A.M. Best ratings satisfactory to FCERA, for Professional Errors and Omissions ("E&O Insurance") with coverage of at least five million dollars ($5,000,000) in the aggregate for occurrences during any single year, which such E&O Insurance shall cover all Actuary’s officers, directors, owners, members, partners,

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employees and agents performing Services and rendering deliverables pursuant to this Agreement. All policies, except for the Workers’ Compensation and E&O Insurance, shall cover FCERA and its officers, trustees, and employees as additional named loss payees with respect to liabilities arising out Actuary’s performance in connection with this Agreement. All policies required by this Section shall be primary and non-contributory with any insurance or self-insurance programs carried or administered by FCERA. Actuary shall furnish certificates of insurance to FCERA evidencing such insurance coverage, prior to the commencement of performance of Services hereunder, and shall be responsible for furnishing updated certificates as timely and appropriate.

ii. Independent Contractor. All Services provided by Actuary shall be rendered in Actuary’s capacity as an independent contractor. None of the terms set forth in this Agreement shall be interpreted to create any agency, master-servant, employment or any other relationship between FCERA and Actuary,

12. Dispute Resolution.

a. The parties agree that they will work in good faith to resolve any dispute arising under this Agreement. If a dispute cannot be resolved amicably within a reasonable time by the parties, the matter will be submitted to nonbinding mediation for possible resolution in a timely manner before either of the parties may pursue the procedure as set forth in subsection b. hereof. Notwithstanding the foregoing, either party may proceed pursuant to subparagraph K hereof at such time as may be necessary to prevent the expiration of any statutory period of limitations applicable to the dispute.

b. The parties desire to expedite resolution of any dispute or claims arising under this Agreement and, accordingly, have agreed, that this subparagraph b. sets forth the exclusive procedure for resolution of any such disputes or claims. Following unsuccessfiul mediation as set forth in subparagraph a. hereof, the parties agree that a party with one or more disputes or claims may commence an action in either the California state Superior Court or the United States District Court located in Fresno County, California, which court shall have exclusive jurisdiction and venue over the parties, to which they hereby submit.

13. Notice. All notices or other communications required or permitted to be given under this Agreement shall be made in writing and sent to the address set forth below:

If to Actuary:

The Segal Company 120 Montgomery Street, Suite 500 San Francisco, CA 94104 Attention: Paul Angelo Fax No.: (415) 263-8290

with a copy to: The Segal Company One Park Avenue New York, New York 10016 Attn: General Counsel Fax No.: (212)2251-5275

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If to FCERA

Fresno County Employees’ Retirement Association 1111 H Street Fresno, CA 93721 Attention: Roberto Pefla, Administrator Fax No.: 559-457-0318

with a copy to: Reed Smith, LLP Two Embarcadero Center Suite 2000 San Francisco, CA 94111 Attention: Harvey L. Leiderman, Esq. Fax No.: 415-391-8269

All notices shall be deemed given if delivered receipt confirmed using one of the following methods: registered or certified first class mail, postage prepaid; recognized courier delivery; electronic mail; telecopier or other electronic facsimile transmission.

14. Waiver. The failure of any party at any time to take action against the other party, or the failure of either party to terminate this Agreement as provided herein, shall not affect either party’s right to require thil performance of this Agreement, including all Exhibits, at any time thereafter, and the waiver by either party of a breach of any provision of this Agreement, including all Exhibits, shall not constitute a waiver of any subsequent breach thereof nor nullify the effectiveness of such provisions or the right of such party to demand redress for their respective losses, damages and prejudices.

15. Audited Financial Statements. During the term of this Agreement, Actuary shall, upon written request of FCERA’s Administrator, permit FCERA’s Administrator to review (but not retain) Actuary’s most recent audited annual financial statements (or if none, financial statements certified as true and correct by Actuary’s Chief Executive Officer). FCERA shall treat any information that it leans as a result of its review as the confidential information of Actuary and will not make any such information part of its public records; provided, however, that the Administrator may disclose such information to the Board and staff members of ECERA to the extent he deems it necessary to the administration of the retirement system.

16. Miscellaneous: This Agreement, including all Exhibits, and the rights and obligations of the parties hereto shall be governed by and construed in accordance with the laws of the State of California without regard to its conflicts of law principles. Except as otherwise specifically stated herein, remedies herein provided shall be cumulative and there shall be no obligation to exercise a particular remedy. If any provision of this Agreement, including all Exhibits, is held to be unenforceable, the other provisions shall nevertheless remain in fill force and effect. This Agreement, including all Exhibits, constitute the entire understanding between the parties with respect to the subject matter hereof and may only be amended or modified by a writing signed by a duly authorized representative of each party. This Agreement and each Exhibit may be executed in counterparts, each of which shall be deemed an original. This Agreement replaces and supersedes any prior verbal or written understandings, communications, and representations between the parties regarding the subject matter contained herein. No purchase order or other ordering document that purports to modify or supplement the printed text of this Agreement or any Exhibit shall add to or vary the terms of this Agreement, unless signed by

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both parties. Neither party may assign any rights set forth in this Agreement to any third party without the other’s written consent and any such assignment shall automatically terminate this Agreement.

IN WITNESS WHEREOF, the parties hereby agree to all of the above terms and have executed this Agreement as of the Effective Date.

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Exhibit B�Schedule of Fees - See attached letter to FCERA dated February 2,2007

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Exhibit A�Actuarial Services - See attached letter to FCERA dated February 2, 2007

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*SEGAL THE SEGAL COMPANY 120 Montgomery Street, Suite 500 San Francisco. CA 04104-4305 T 415.263.8200 F 415.263.8290 ’w.segalco.com

?aul Angelo, FSA Senior Vice President & Actuary [email protected]

February 2, 2007

Mr. Roberto Pena Fresno County Employees’ Retirement Association 1111 H Street Fresno, CA 93721

Re: June 30, 2006 Actuarial Valuation and Experience Study Proposal

Dear Roberto:

As we discussed, this letter presents our proposal to provide the June 30, 2006 actuarial valuation and experience study services to the Fresno County Employees! Retirement Association (ECERA).

Proposed Timeframe

We believe we can produce the June 30, 2006 actuarial valuation within six to eight weeks of receiving complete data, provided we utilize the actuarial assumptions last adopted by your Board.

Attempting to complete the June 30, 2006 triennial experience study prior to the valuation will most certainly result in delays. For that reason, we propose that the experience study be completed after the valuation. The experience study would be presented to the Board in late spring or earlier summer in time for setting assumptions to be first used in the June 30, 2007 valuation. We have utilized this same approach with other 1937 Act clients. It is our understanding that conducting the study as of June 30, 2006 satisfies the "every three year" review of actuarial assumptions required under Section 31453 of the government code, even though the resulting assumption changes will not be implemented until the June 30, 2007 valuation.

We will send a data request to FCERA immediately upon the approval of this proposal by the Retirement Board. Note that for the experience study, we intend to request historical data from Public Pension Professionals (PPP); however, we believe it is safer to have your original data in hand in addition to what we receive from PPP.

Benefits, Compensation and HR Consulting ATLANTA BOSTON CALGARY CHICAGO CLEVELAND DENVER HARTFORD HOUSTON LOSANGELES MINNEAPOLIS NEW ORLEANS NEW YORK PHILADELPHIA PHOENIX PRINCETON RALEIGH SAN FRANCISCO TORONTO WASHINGTON D.C.

Multinational Group of Actuaries and Consultants BARCELONA BRUSSELS DUBLIN GENEVA HAMBURG JOHANNESBURG LONDON MELBOURNE A

e MEXICO CITY OSLO PARIS

Mr. Roberto Pena February 2, 2007 Page 2

Fee Proposal

Our fee for completing the valuation and the accompanying report is $55,000. This includes separate valuation of the "regular" and "settlement" benefits, as well as the non-valuation benefits. This fee includes a single on-site meeting with your Board to present and discuss our results.

Our fee for the experience study and the accompanying report will be $27,000. This fee includes a single on-site meeting with your Board to present and discuss our results.

We also understand that the FCERA may request Segal to provide additional services related to the administration of the Association. For instance, we understand that FCERA is interested in having Segal updated the COLA banks and the associated COLA benefits effective April 2007. Our estimate is that the time to provide such update will be about 2-3 hours for a cost of about $1,000. Any other services authorized by FCERA will be performed at the hourly rates shown below.

Class of Personnel Hourly Rate

Principal Actuaries $425 (Angelo, James, Moehie)

Reviewing Actuaries $375 (Bergerson, Shively)

Supervising Actuaries $350

(Monroe, Yeung, Yum)

Actuarial Analysts $150�$340

Compliance Consultant $350

After the Board approves our timeline and fee proposal, we would be glad to work with the Association in exploring if a new contract or our audit contract from last year can be amended to include these new services.

Roberto, thank you and your Board for this opportunity. We look forward to working with you.

Cordially,

Paul Angelo, FSA

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40062W2108049.102

Prwn LSemian, Harvey L [mailto:[email protected]] Sent Friday, July 13, 2001 10:25 AM To: Pena, Roberto Cc: Rieger, Jeffrey P.,; Van Wyk, Becky; Avalos, Elizabeth *ibjecb RE: FCERA - Revised Member Contribution Rates

If its of any help, here are a few highlights. The Agreement provides important protections and due diligence mitigation of risks for FCERA:

The actuaries pledge to perform services in the highest professional manner, and in compliance with their own internal Quality Assurance Procedures.

o The actuaries agree to indemnify and hold FCERA harmless from any loss or damages, and attorneys fees, caused by their wrongful conduct or negligent acts or omissions, without limitation or exception. There is no limitation of liability.

Ther actuaries must maintain at least $5 million in E&O insurance coverage, naming FCERA as a direct loss payee, and furnishing FCERA with certificates evidencing the insurance coverage.

Disputes would be resolved first thru non-binding mediation, then in Fresno Superior Court if necessary. Not somewhere else in the country.

� FCERA has the right to inspect the actuaries’ annual audited financial statements. This will enable FCERA to assess whether any pending liabilities might negatively impact the actuaries’ ability to perform their work for FCERA or perform their contractual obligations.

While we hope that we never have to rely on these protections, recent developments demonstrate the importance of taking prudent steps to protect the system from professional negligence. These protections are "state of the art" for public pension funds in their dealings with actuarial service firms, and we commend Segal for recognizing their importance and being willing to assure its clients that the highest professional standards will apply to its work.

FRESNO COUNTY EMPLOYEES RETIREMENT ASSOCIATION

REQUEST FOR PROPOSAL

ACTUARIAL CONSULTANT SERVICES

July 9, 2007

IMPORTANT: SUBMIT PROPOSAL IN SEALED PACKAGE WITH PROPOSAL NUMBER, CLOSING DATE AND BUYER’S NAME MARKED CLEARLY ON THE OUTSIDE TO:

FCERA 1111 H Street FRESNO, CA 93721

CLOSmO DATE OF OD WILL BE AT 5:00 P.M. ON JULY 27 9 2007

All proposal information will be available for review after contract award.

Clarifications of specifications are to be directed to: Becky Van Wyk, phone (559) 457-0681, FAX (559) 457-0318.

BIDDER TO COMPLETE

UNDERSIGNED AGREES TO FURNISH THE COMMODITY OR SERVICE STIPULATED IN THE ATTACHED PROPOSAL SCHEDULE AT THE PRICES AND TERMS STATED, SUBJECT TO THE "FCERA STANDARD INSTRUCTIONS AND CONDITIONS FOR REQUEST FOR PROPOSALS (RFPS) AND REQUESTS FOR QUOTATIONS (RFQ’S)’ATTACHED.

Except as noted on individual items, the following will apply to all items in the Proposal Schedule.

1, Complete delivery will be made within calendar days after receipt of Order.

2 A

days will apply,

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FACSIMILE NUMBER

E-MAIL

C\DOCUMENTS AND SE1TINGS*jLLEIDER\LOCAL SETTINO&IEMPORARY INTERNET FILES\OLI< 11REQUEST FOR PROPOSAL ACTUARIAL P0-040(8106) CONSULTANTOOC

Proposal No. Actuarial Consultant Services

FRESNO COUNTY EMPLOYEES’ RETIREMENT ASSOCIATION

STANDARD INSTRUCTIONS AND CONDITIONS FOR REQUESTS FOR PROPOSALS (RFP’S) AND REQUESTS FOR QUOTATIONS (RFQ’S)

Note: the reference to ’bids" in the following paragraphs applies to RFP’s and RFQ’s

GENERAL CONDITIONS

By submitting a bid the bidder agrees to the following conditions. These conditions will apply to all subsequent purchases based on this bid.

1. BID PREPARATION:

A) All prices and notations must be typed or written in ink. No erasures permitted. Errors may be crossed out, initialed and corrections printed in ink by person signing bid.

B) Brand Names: Brand names and numbers when given are for reference. Equal items will be considered, provided the offer clearly describes the article and how it differs from that specified. In the absence of such information it shall be understood the offering is exactly as specified.

C) State brand or make of each item. If bidding on other than specified, state make, model and brand being bid and attach supporting literature/specifications to the bid.

C) Bid on each item separately. Prices should be stated in units specified herein. All applicable charges must be quoted; charges on invoice not quoted herein will be disallowed.

E) Time of delivery is a part of the consideration and must be stated in definite terms and must be adhered to. FOB. Point shall be destination or freight charges must be stated.

F) All bids must be dated and signed with the firm’s name and by an authorized officer or employee.

G) Unless otherwise noted, prices shall be firm for 120 days after closing date of bid.

2. SUBMITTING BIDS:

A) Each bid must be submitted on forms provided in a sealed envelope with bid name and closing date and time on the outside of the envelopelpackage.

B) Interpretation: Should any discrepancies or omissions be found in the bid specifications or doubt as to their meaning, the bidder shall notify the Buyer in writing at once. FCERA shall not be held responsible for verbal interpretations. Questions regarding the bid must be received by FCERA by July 20, 2007, All addenda issued shall be in writing, duly issued by FCERA and incorporated into the contract.

C) ISSUING AGENT/AUTHORIZED CONTACT: This RFP/RFQ has been issued by the Fresno County Employees’ Retirement Association (FCERA). FCERA shall be the vendors sole point of

contact with regard to the RFP/RFQ, its content, and all issues concerning it.

All communication regarding this RFP/RFQ shall be directed to an authorized representative of FCERA. The specific person managing this RFP/RFQ is identified on the cover page, along with his or her telephone number, and he or she should be the primary point of contact for discussions or information pertaining to the RFPJRFQ. Contactwith any other FCERA representative, including elected officials, for the purpose of discussing this RFP/RFQ, its content, or any other issue concerning it, is prohibited unless authorized by FCERA, Violation of this clause, by the vendor having unauthorized contact (verbally or in writing) with such other FCERA representatives, may constitute grounds for rejection by FCERA of the vendoris quotation.

The above stated restriction on vendor contact with FCERA representatives shall apply until FCERA has awarded a purchase order or contract to a vendor or vendors, except as follows, First, in the event that a vendor initiates a formal protest against the RFP/RFQ, such vendor may contact the appropriate individual, or individuals who are managing that protest as outlined in FCERA’s established protest procedures. All such contact must be in accordance with the sequence set forth under the protest procedures. Second, in the event a public hearing is scheduled before the Board of Retirement to hear testimony prior to its approval of a purchase order or contract, any vendor may address the Board.

D) Bids received after the dosing time will NOT be considered.

E) Bidders are to bid what is specified or requested first. If unable to or willing to, bidder may bid alternative or option, indicating all advantages, disadvantages and their associated cost.

F) Public Contract Code Section 7028.15

G) Where the State of California requires a Contractor’s license, it is a misdemeanor for any person to submit a bid unless specifically exempted.

3. TAXES, CHARGES AND EXTRAS:

A) FCERA is subject to Califomia sales and/or use tax (7.975%). Please indicate as a separate line item if applicable.

B) Charges for transportation, containers, packing, etc, will not be paid unless specified in bid.

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4. W-9 - REQUEST FOR TAXPAYER IDENTIFICATION NUMBER AND CERTIFICATION:

Upon award of bid, the vendor shall submit to FCERA, a completed Request for Taxpayer Identification Number and Certification if not already a current vendor with FCERA, This form is available from the IRS to complete on line at

5. AWARDS:

A) Subject to the local preference provisions referenced in Paragraph 6 below and more thoroughly set forth in the General Requirements section of this RFP/RFQ, award(s) will be made to the most responsive responsible bidder- The evaluation will include such things as life-cycle cost, availability, delivery costs and whose product and/or service is deemed to be in the best interest of FCERA. FCERA shall be the sole judge in making such determination.

B) Unless bidder gives notice of all-or-none award in bid, FCERA may accept any item, group of items or on the basis of total bid.

C) FCERA reserves the right to reject any and all bids and to waive informalities or irregularities in bids.

0) After award, all bids shall be open to public inspection. FCERA assumes no responsibility for the confidentiality of information offered in a bid.

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All other factors being equal, the contract may be awarded by the flip of a coin in the presence of witnesses or the entire bid may be rejected and re-bid,

7. PATENT INDEMNITY:

The vendor shalt hold FCERA, its officers, agents and employees, harmless from liability of any nature or kind, including costs and expenses, for infringement or use of any copyrighted or uncopyrighted composition, secret process, patented or unpatented invention, article or appliance furnished or used in connection with this bid.

B. SAMPLES:

Samples, when required, must be furnished and delivered free and, if not destroyed by tests, will upon written request (within 30 days of bid closing date) be returned at the bidder’s expense. In the absence of such notification, FCERA shall have the fight to dispose of the samples in whatever manner it deems appropriate.

9. RIGHTS AND REMEDIES OF FCERA FOR DEFAULT:

A) In case of default by vendor, FCERA may procure the articles or service from another source and may recover the cost difference and related expenses occasioned thereby from any unpaid balance due the vendor or by proceeding against performance bond of the vendor, If any, or by suit against the vendor. The prices paid by FCERA shall be considered the prevailing market price at the time such purchase is made,

B) Articles or services, which upon delivery inspection do not meet specifications, will be rejected and the vendor will be considered in

default. Vendor shall reimburse FCERA for expenses related to delivery of non-specified goods or services.

C) Regardless of FOB, point, vendor agrees to bear all risks of loss, injury or destruction to goods and materials ordered herein which occur prior to delivery and such loss, injury or destruction shall not release vendor from any obligation hereunder.

ID. DISCOUNTS:

Terms of less than 15 days for cash payment will be considered as net in evaluating this bid, A discount for paymentwithin fifteen (15) days or more will be considered in determining the award of bid. Discount period will commence eitherthe later of delivery or receipt of invoice by FCERA. Standard terms are Net Forty-five (45) days.

11, SPECIAL CONDITIONS IN BID SCHEDULE SUPERSEDE GENERAL CONDITIONS.

The "General Conditions’ provisions of this RFP/RFQ shall be superseded if in conflict with any other section of this bid, to the extent of any such conflict.

12. SPECIAL REQUIREMENT:

With the invoice or within twenty-five (25) days of delivery, the seller must provide to FCERA a Material Safety Data Sheet for each product, which contains any substance on ’The List of 800 Hazardous Substances’, published by the State Director of Industrial Relations. (See Hazardous Substances Information and Training Act, California State Labor Code Sections 6360 through 6399,7.)

13. RECYCLED PRODUCTS/MATERIALS:

Vendors are encouraged to provide and quote (with documentation) recycled or recyclable products/materials which meet stated specifications.

14. YEAR COMPUANCE WARRANTY

Vendor warrants that any product furnished pursuant to this Agreement/order shall support a four-digit year format and be able to accurately process date and time data from, into and between the twentieth and twenty-first centuries, as well as leap year calculations. ’Product’ shall include, without limitation, any piece or component of equipment, hardware, firmware, middieware, custom or commercial software, or internal components or subroutines therein, This warranty shall survive termination or expiration of this Agreement.

15, CONFIDENTIALITY:

All services performed by vendor shall be in strict conformance with all applicable Federal, State of California and/or local laws and regulations relating to confidentiality, including but not limited to. California Civil Code California Welfare and Institutions Code, Health and Safety Code, California Code of Regulations, Code of Federal Regulations.

Vendor shall submit to FCERA’s monioring of said compliance.

Vendor may be a business associate of FCERA, as that term is defined in the ’Privacy Rule’ enacted by the Health Insurance Portability and Accountability Act of 1996 (HIPAA). As a HIPAA Business Associate, vendor may use or disclose protected health information (PHI’) to perform functions, activities or services for or on behalf of FCERA as specified by FCERA, provided that such use or disclosure shall not violate HIFAA and As implementing regulations. The uses and disclosures if PHI may not be more expansive than those applicable

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to FCERA, as the ’Covered Entity’ under HIPPXS Privacy Rule, except as authorized for management, administrative or legal responsibilities of the Business Associate.

Vendor shall not use or further disclose PHI other than as permitted or required by FCERA, or as required by law without written notice to FCEM.

Vendor shall ensure that any agent, including any subcontractor, to which vendor provides PHI received from, or created or received by the vendor on behalf of FOERA, shall comply with the same restrictions and conditions with respect to such information.

16. APPEALS

Appeals must be submitted in writing within seven (7) working days after the review committee notification of proposed recommendations. Appeals should be submitted to FCERA, 1111 H Street, Fresno California 93721. Appeals should address only areas regarding RFP contradictions, procurement errors, quotation rating discrepancies, legality of procurement context, conflict of interest, and inappropriate or unfair competitive procurement grievance regarding the RFP process.

The Assistant Retirement Administrator will provide a written response to the complaint within seven (7) working days unless the complainant is notified more time is required.

If the protesting bidder is not satisfied with the decision of the Assistant Retirement Administrator, he/she shall have the right to appeal to the Retirement Administrator within seven (7) business days after notification of the Assistant Retirement Administrator’s decision.

If the protesting bidder is not satisfied with Retirement Administrator’s decision, the final appeal is with the Board of Retirement.

17, OBLIGATIONS OF CONTRACTOR:

A) CONTRACTOR shall perform as required by the ensuing contract. CONTRACTOR also warrants on behalf of itself and all subcontractors engaged for the performance of the ensuing contact that only persons authorized to work in the United States pursuant to the Immigration Reform and Control Act of 1986 and other applicable laws shall be employed in the performance of the work hereunder.

B) CONTRACTOR shall obey all Federal, State, local and special district laws, ordinances and regulations.

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Proposal No, Actuarial Consultant Services Page 3

OVERVIEW Fresno County Employees’ Retirement Association (FCERA) requests proposals from qualified actuarial consulting firms interested in providing a range of actuarial services while functioning as actuarial advisor the FCERA Board of Retirement and the Retirement Administrator of the association.

FCERA was established in 1945 as a contributory defined benefit plan organized under the provisions of the 1937 County Employees Retirement Law (1937 Act), FCERA provides lifetime benefits upon retirement, death or disability of members. FCERA is a cost-sharing, multiple-employer plan that includes substantially all full-time employees and permanent part-time employees who work 50% or more for the plan sponsors, including the County of Fresno, Superior Court of California-County of Fresno, Clovis Memorial District, Fresno Mosquito and Vector Control, North Central Fire Protection District and the Fresno-Madera Area Agency on Ageing.

FCERA’s membership includes 13,800 active employees, deferred and retired members and their survivors and dependents.

As of June 30, 2006, FCERA’s membership composition was:

Retirees and beneficiaries receiving benefits 4,610

Deferred members 1,514

Total retired and deferred members 6,124

Active vested general members 4’ 535

Active vested safety members 710

Active nonvested general members 2,144

Active nonvested safety members 287

Total active membership 7,676

Total combined membership 13.800

For additional information about FCERA, its financing and benefit structures, please refer to the association’s Comprehensive Annual Financial Report for the period ending June 30, 2006 which is available on FCERA’s website at wwwfcera.ori.

RFP Issue Date: July jtiiYj

Vendor Conference: None Scheduled, Questions should be e-mailed to bvanwykco.fresno.ca.us or faxed to 559,457.0318

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Deadline for Written or Fax Requests July16, 2007 for Interpretations or Corrections of Fax No, (559) 456-7831 REP:

RFP Closing Date: July 21, 2007 at 5:00 P.M. FCERA 1111 H Street Fresno, CA 93721

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PROPOSAL IDENTIFICATION SHEET

RESPONDENT TO COMPLETE AND RETURN WITH PROPOSAL

Our proposal is attached and identified as:

The undersigned agrees to furnish the service stipulated at the prices and terms stated in the cost proposal.

Work services will commence within calendar days after signing of the final

contract.

Company:

Address:

Signed by:

( ) (

Telephone Fax Number E-mail Address

Date:

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Proposal No. Actuarial Consultant Services Page 6

TRADE SECRET ACKNOWLEDGEMENT All proposals received by FCERA shall be considered "Public Record" as defined by Section 6252 of the California Government Code. This definition reads as follows:

"...Public records" includes any writing containing information relating to the conduct of the public’s business prepared owned, used or retained by any state or local agency regardless of physical form or characteristics "Public records" in the custody of, or maintained by, the Governor’s office means any writing prepared on or after January 6, 1975."

Each proposal submitted is Public record and is therefore subject to inspection by the public per Section 6253 of the California Government Code. This section states that ’every citizen has a right to inspect any public record".

FCERA will not exclude any proposal or portion of a proposal from treatment as a public record except in the instance that it is submitted as a trade secret as defined by the California Government Code, Information submitted as proprietary, confidential or under any other such terms that might suggest restricted public access will not be excluded from treatment as public record.

"Trade secrets" as defined by Section 62541 of the California Government Code are deemed not to be public record. This section defines trade secrets as:

,.Trade secrets," as used in this section, may include, but are not limited to, any formula, plan, pattern, process, tool, mechanism, compound, procedure, production data or compilation of information that is not patented, which is known only to certain individuals within a commercial concern who are using it to fabricate, produce, or compound an article of trade or a service having commercial value and which gives its user an opportunity to obtain a business advantage over competitors who do not know or use it."

Information identified by bidder as "trade secret" will be reviewed by FCERA’s legal counsel to determine conformance or non-conformance to this definition. Examples of material not considered to be trade secrets are pricing, cover letter, promotional materials, etc. Such material should be submitted in a separate binder not marked "Trade Secret".

INFORMATION THAT IS PROPERLY IDENTIFIED AS TRADE SECRET AND CONFORMS TO THE ABOVE DEFINITION WILL NOT BECOME PUBLIC RECORD. FCERA WILL SAFEGUARD THIS INFORMATION IN AN APPROPRIATE MANNER.

Information identified by bidder as trade secret and determined not to be in conformance with the California Government Code definition shall be excluded from the proposal. Such information will be returned to the bidder at bidders expense upon written request.

Trade secrets must be submitted in a separate binder that is plainly marked "Trade Secrets."

FCERA shall not in any way be liable or responsible for the disclosure of any proposals or portions thereof, if they are not (1) submitted in a separate binder that is plainly marked ’Trade Secret’ on the outside; and (2) if disclosure is required under the provision of law or by order of Court.

Vendors are advised that FCERA does not wish to receive trade secrets and that vendors are not to supply trade secrets unless they are absolutely necessary.

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TRADE SECRET ACKNOWLEDGEMENT

I have read and understand the above "Trade Secret Acknowledgement?

understand that FCERA has no responsibility for protecting information submitted as a trade secret if it is not delivered in a separate binder plainly marked "Trade Secret."

Enter company name on appropriate line:

has submitted information identified as Trade (Company Name) Secrets

has not submitted information identified as Trade (Company Name) Secrets

ACKNOWLEDGED BY:

Signature

Print Name

C

City

State Zip

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Firm:

REFERENCE LIST Provide a list of at least five (5) customers for whom you have recently provided similar services (preferably California State or local government agencies). Be sure to include addresses and phone numbers.

Reference Name:

City:

State Contact

Phone No.: Date: Service Provided:

Reference Name City: State Contact


>.*oac . - ...:- . rr.1w -....fly . r- .....................................

Reference Name: City: State Contact


I- -.. rwr . ’,-:-w’. ............................. - .


Phone No,: Date: Service Provided:



Failure to provide a list of at least five (5) customers may be cause for rejection of this RFP.

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GENERAL REQUIREMENTS DEFINITIONS: The terms Bidder, Proposer, Contractor and Vendor are all used interchangeably and refer to that person, partnership, corporation, organization, agency, etc. which is offering the proposal and is identified on the "Provider" line of the Proposal Identification Sheet.

RFP CLARIFICATION AND REVISIONS: Any revisions to the RFP will be issued and distributed as written addenda,

FIRM PROPOSAL: All proposals shall remain firm for at least one hundred eighty (180) days.

PROPOSAL PREPARATION: Proposals should be submitted in the formats shown under "PROPOSAL CONTENT REQUIREMENTS" section of this RFP.

SUPPORTIVE MATERIAL: Additional material may be submitted with the proposal as appendices. Any additional descriptive material that is used in support of any information in your proposal must be referenced by the appropriate paragraph(s) and page number(s).

Bidders are asked to submit their proposals in a binder (one that allows for easy removal of pages) with index tabs separating the sections identified in the Table of Contents. Pages must be numbered on the bottom of each page.

Any proposal attachments, documents, letters and materials submitted by the vendor shall be binding and included as a part of the final contract should your bid be selected.

TAXES: The quoted amount must include all applicable taxes. If taxes are not specifically identified in the proposal it will be assumed that they are included in the total quoted.

SALES TAX: FCERA pays California State Sales Tax in the amount of 7.975% regardless of vendor’s place of doing business.

INTERPRETATION OF RFP: Vendors must make careful examination of the requirements, specifications and conditions expressed in the RFP and fully inform themselves as to the quality and character of services required. If any person planning to submit a proposal finds discrepancies in or omissions from the RFP or has any doubt as to the true meaning or interpretation, correction thereof may be requested in writing from FCERA, a minimum of seven (7) FCERA business days prior to the bid closing date. Any change in the RFP will be made only by written addendum, duly issued by FCERA. FCERA will not be responsible for any other explanations or interpretations.

RETENTION: FCERA reserves the right to retain all proposals, excluding proprietary documentation submitted per the instructions of this RFP, regardless of which response is selected.

ORAL PRESENTATIONS: Each finalist may be required to make an oral presentation in Fresno and answer questions from FCERA personnel and Board of Retirement.

AWARDIREJECTION: The award will be made to the vendor offering the overall proposal deemed to be to the best advantage of FCERA. FCERA shall be the sole judge in making

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LLJ’ itatI]

such determination. FCERA reserves the right to reject any and all proposals. The lowest bidders are not arbitrarily the vendors whose proposals will be selected.

FCERA will chair or co-chair all award, evaluation and contract negotiation committees.

Award will require approval by the FCERA Board of Retirement.

NEGOTIATION: FCERA will prepare and negotiate its own contract with the selected vendor, giving due consideration to the stipulation of the vendor’s standard contracts and associated legal documents.

WAIVERS: FCERA reserves the right to waive any informalities or irregularities and any technical or clerical errors in any quote as the interest of FCERA may require.

TERMINATION: FCERA reserves the right to terminate any resulting contract upon written notice.

MINOR DEVIATIONS: FCEFtA reserves the right to negotiate minor deviations from the prescribed terms, conditions and requirements with the selected vendor.

PROPOSAL REJECTION: Failure to respond to all questions or not to supply the requested information could result in rejection of your proposal.

ASSIGNMENTS: The ensuing proposed contract will provide that the vendor may not assign any payment or portions of payments without prior written consent of FCERA.

BIDDERS LIABILITIES: FCERA will not be held liable for any cost incurred by vendors in responding to the RFP.

CONFIDENTIALITY: Bidders shall not disclose information about FCERA’s business or business practices and safeguard confidential data which vendor staff may have access to in the course of system implementation.

DISPUTE RESOLUTION: The ensuing contract shall be governed by the laws of the State of California.

Any claim which cannot be amicably settled without court action will be litigated in the U. S. District Court for the Eastern District of California in Fresno, CA or in a state court for Fresno County.

NEWS RELEASE: Vendors shall not issue any news releases or otherwise release information to any third party about this RFP or the vendor’s quotation without prior written approval from FCERA.

BACKGROUND REVIEW: FCERA reserves the right to conduct a background inquiry of each proposer/bidder which may include collection of appropriate criminal history information, contractual and business associations and practices, employment histories and reputation in the business community. By submitting a proposal/bid to FCERA, the vendor consents to such an inquiry and agrees to make available to FCERA such books and records FCERA deems necessary to conduct the inquiry.

PERFORMANCE BOND: The successful bidders may be required to furnish a faithful performance bond.

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Xroposal No. Actuarial Consultant Services Page-1-f

EXCEPTIONS: Identify with explanation, any terms, conditions, or stipulations of the RFP with which you CAN NOT or WILL NOT comply with by proposal group.

ADDENDA: In the event that it becomes necessary to revise any part of this RFP, addenda will be provided to all agencies and organizations that receive the basic RFP,

SUBCONTRACTORS: If a subcontractor is proposed, complete identification of the subcontractor and his tasks should be provided. The primary contractor is not relieved of any responsibility by virtue of using a subcontractor.

CONFLICT OF INTEREST: FCERA shall not contract with, and shall reject any bid or proposal submitted by the persons or entities specified below, unless the Board of Retirement finds that special circumstances exist which justify the approval of such contract:

1. Employees of FCERA or public agencies for which the Board of Retirement is the governing body.

2. Profit-making firms or businesses in which employees described in Subsection (1) serve as officers, principals, partners or major shareholders.

3. Persons who, within the immediately preceding twelve (12) months, came within the provisions of Subsection (1), and who were employees in positions of substantial responsibility in the area of service to be performed by the contract, or participated in any way in developing the contract or its service specifications.

4. Profit-making firms or businesses in which the former employees described in Subsection (3) serve as officers, principals, partners or major shareholders.

5. No FCERA employee, whose position in FCERA enables him to influence the selection of a contractor for this RFP, or any competing RFP, and no spouse or economic dependent of such employee, shall be employees in any capacity by a bidder, or have any other direct or indirect financial interest in the selection of a contractor.

6. In addition, no FCERA employee will be employed by the selected vendor to fulfill the vendor’s contractual obligations to FCERA.

ORDINANCE 3.08.130 - POST-SEPARATION EMPLOYMENT PROHIBITED

No officer or employee of FCERA who separates from FCERA service shall for a period of one year after separation enter into any employment, contract, or other compensation arrangement with any FCERA consultant, vendor, or other FCERA provider of goods, materials, or services, where the officer or employee participated in any part of the decision making process that led to FCERA relationship with the consultant, vendor or other FCERA provider of goods, materials or services.

Pursuant to Government Code section 25132(a), a violation of the ordinance may be enjoined by an injunction in a civil lawsuit, or prosecuted as a criminal misdemeanor.

EVALUATION CRITERIA: Respondents will be evaluated on the basis of their responses to all questions and requirements in this RFP and product cost. FCERA shall be the sole judge in the ranking process and reserves the right to reject any or all bids. False, incomplete or unresponsive statements in connection with this proposal may be sufficient cause for its rejection.

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SELECTION PROCESS: All proposals will be evaluated by a team consisting of representatives from appropriate FCERA staff and professional advisors. It will be their responsibility to make the final recommendations. The Retirement Administrator will chair the evaluation or evaluation process.

Organizations that submit a proposal may be required to make an oral presentation to the Selection Committee and/or the Board of Retirement. These presentations provide an opportunity for the individual, agency, or organization to clarify its proposal to ensure thorough, mutual understanding.

INDEPENDENT CONTRACTOR: In performance of the work, duties, and obligations assumed by Contractor under any ensuing Agreement, it is mutually understood and agreed that Contractor, including any and all of Contractor’s officers, agents, and employees will at all times be acting and performing as an independent contractor, and shall act in an independent capacity and not as an officer, agent, servant, employee, joint venturer, partner, or associate of FCERA. Furthermore, FCERA shall have no right to control, supervise, or direct the manner or method by which Contractor shall perform its work and function. However, FCERA shall retain the right to administer this Agreement so as to verify that Contractor is performing its obligations in accordance with the terms and conditions thereof. Contractor and FCERA shall comply with all applicable provisions of law and the rules and regulations, if any, of governmental authorities having jurisdiction over matters the subject thereof.

Because of its status as an independent contractor, Contractor shall have absolutely no right to employment rights and benefits available to FCERA employees. Contractor shall be solely liable and responsible for providing to, or on behalf of, its employees all legally required employee benefits. In addition, Contractor shall be solely responsible and save FCERA harmless from all matters relating to payment of Contractor’s employees, including compliance with Social Security, withholding, and all other regulations governing such matters. It is acknowledged that during the term of the Agreement, Contractor may be providing services to others unrelated to FCERA or to the Agreement.

HOLD HARMLESS CLAUSE: Contractor agrees to indemnify, save, hold harmless and at FCERA’s request, defend FCERA, its officers, agents and employees, from any and all costs and expenses, damages, liabilities, claims and losses occurring or resulting to FCERA in connection with the performance, or failure to perform, by Contractor, its officers, agents or employees under this Agreement and from any and all costs and expenses, damages, liabilities, claims and losses occurring or resulting to any person, firm or corporation who may be injured or damaged by the performance, or failure to perform, of Contractor, its officers, agents or employees under this Agreement.

PRICE RESPONSIBILITY: The selected vendor will be required to assume full responsibility for all services and activities offered in the proposal, whether or not they are provided directly. Further, FCERA will consider the selected vendor to be the sole point of contact with regard to contractual matters, including payment of any and all charges resulting from the contract. The contractor may not subcontract or transfer the contract, or any right or obligation arising out of the contract, without first having obtained the express written consent of FCERA.

ADDRESSES AND TELEPHONE NUMBERS: The vendor will provide the business address and mailing address, if different, as well as the telephone number of the individual signing the contract.

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ASSURANCES: Any contract awarded under this RFP must be carried out in full compliance with The Civil Rights Act of 1964, The Americans With Disabilities Act of 1990, their subsequent amendments, and any and all other laws protecting the rights of individuals and agencies. FCERA has a zero tolerance for discrimination, implied or expressed, and wants to ensure that policy continues under this RFP. The contractor must also guarantee that services, or workmanship, provided will be performed in compliance with all applicable local, state, or federal laws and regulations pertinent to the types of services, or project, of the nature required under this RFP. In addition, the contractor may be required to provide evidence substantiating that their employees have the necessary skills and training to perform the required services or work.

INSURANCE:

Without limiting FCERA’s right to obtain indemnification from CONTRACTOR or any third parties, CONTRACTOR, at its sole expense, shall maintain in full force and effect the following insurance policies throughout the term of the Agreement:

A. Commercial General Liability

Commercial General Liability Insurance with limits of not less than Five Million Dollars ($5,000,000) per occurrence and an annual aggregate of Five Million Dollars ($5,000,000). This policy shall be issued on a per occurrence basis. FCERA may require specific coverages including completed operations, products liability, contractual liability, Explosion-Collapse-Underground, fire legal liability or any other liability insurance deemed necessary because of the nature of this contract.

B. Automobile Liability

Comprehensive Automobile Liability Insurance with limits for bodily injury or property damages of not less than One Million Dollars ($1,000,000.00) per accident. Coverage should include owned and non-owned vehicles used in connection with this Agreement.

C. Professional Liability

If CONTRACTOR employs licensed professional staff, (e.g., Ph.D., R.N., L.C.S.W., M.F.C,C.) in providing services, Professional Liability Insurance with limits of not less than One Million Dollars ($1,000,000.00) per occurrence, Three Million Dollars ($3,000,000.00) annual aggregate.

This coverage shall be issued on a per claim basis. Contractor agrees that it shall maintain, at its sole expense, in full force and effect for a period of three (3) years following the termination of this Agreement, one or more policies of professional liability insurance with limits of coverage as specified herein.

0. Worker’s Compensation

A policy of Worker’s Compensation insurance as may be required by the California Labor Code.

CONTRACTOR shall obtain endorsements to the Commercial General Liability insurance naming FCERA, its officers, agents, and employees, individually and collectively, as additional insured, but only insofar as the operations under this Agreement are concerned. Such coverage for additional insured shall apply as primary insurance and any other insurance, or self-insurance, maintained by FCERA, its officers, agents and employees shall be excess only and not contributing with insurance provided under CONTRACTOR’s policies herein. This insurance shall not be cancelled or changed without a minimum of thirty (30) days advance written notice given to FCERA,

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Within Thirty (30) days from the date CONTRACTOR executes this Agreement, CONTRACTOR shall provide certificates of insurance and endorsement as stated above for all of the foregoing policies, as required herein, to FCERA, Roberto L. Peæa, Retirement Administrator, 1111 H Street, Fresno, CA 93721, stating that such insurance coverage have been obtained and are in full force; that FCERA, its officers, agents and employees will not be responsible for any premiums on the policies; that such Commercial General Liability insurance names FCERA, its officers, agents and employees, individually and collectively, as additional insured, but only insofar as the operations under this Agreement are concerned; that such coverage for additional insured shall apply as primary insurance and any other insurance, or self-insurance, maintained by FCERA, its officers, agents and employees, shall be excess only and not contributing with insurance provided under CONTRACTOR’s policies herein; and that this insurance shall not be cancelled or changed without a minimum of thirty (30) days advance, written notice given to FCERA.

In the event CONTRACTOR fails to keep in effect at all times insurance coverage as herein provided, FCERA may, in addition to other remedies it may have, suspend or terminate this Agreement upon the occurrence of such event.

All policies shall be with admitted insurers licensed to do business in the State of California. Insurance purchased shall be purchased from companies possessing a current A.M. Best, Inc. rating of A FSC VII or better.

AUDITS AND INSPECTIONS: The Contractor shall at any time during business hours, and as often as FCERA may deem necessary, make available to FCERA for examination all of its records and data and respect to the matters covered by this Agreement. The Contractor shall, upon request by FCERA, permit FCERA to audit and inspect all of such records and data necessary to ensure Contractor’s compliance with the terms of this Agreement.

If this Agreement exceeds Ten Thousand and No/1 00 dollars ($10,000.00), Contractor shall be subject to the examination and audit of the Auditor General for a period of three (3) years after final payment under contract (Government Code Section 8546.7).

FCERA will not be held liable for any cost incurred by bidders in responding to RFP.

DEFAULT: In case of default by the selected bidder, FCERA may procure materials and services from another source and may recover the loss occasioned thereby from any unpaid balance due the selected bidder, or by any other legal means available to FCERA.

BREACH OF CONTRACT: In the event of breach of contract by either party, the other party shall be relieved of its obligations under this agreement and may pursue any legal remedies.

SAMPLE CONTRACT: Submitted as a part of bidder’s response to the RFP, shall be a sample of the contract he is proposing with FCERA. The tentative award of the contract is based on successful negotiation pending formal recommendation of award. Bidder is to include in response the names and titles of officials authorized to conduct such negotiations.

CONFIDENTIALITY

All services performed by vendor shall be in strict conformance with all applicable Federal, State of California and/or local laws and regulations relating to confidentiality, including but not limited to, California Civil Code, California Welfare and Institutions Code, Health and Safety Code, California Code of Regulations, Code of Federal Regulations.

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Mroposal No. Actuarial Consultant Services

Page 15

Vendor shalt submit to FCERA’s monitoring of said compliance.

Vendor may be a Business associate of FCERA, as that term is defined in the "Privacy Rule" enacted by the Health Insurance Portability and Accountability Act of 1996 (HIPAA). As a HIPAA Business Associate, vendor may use or disclose protected health information ("PHI") to perform functions, activities or services for or on behalf of FCERA, as specified by FCERA, provided that such use or disclosure shall not violate HIPAA and its implementing regulations. The uses and disclosures of PHI may not be more expansive than those applicable to FCERA, as the "Covered Entity" under HIPAA’S Privacy Rule, except as authorized for management, administrative or legal responsibilities of the Business Associate.

Vendor shall not use or further disclose PHI other than as permitted or required by FOERA, or as required bylaw without written notice to FCERA.

Vendor shall ensure that any agent, including any subcontractor, to which vendor provides PHI received from, or created or received by the vendor on behalf of FCERA, shall comply with the same restrictions and conditions with respect to such information.

!sVJ iL1

Appeals must be submitted in writing within seven (7) working days after the review committee notification of proposed recommendations. Appeals should be submitted to FCERA, 1111 H Street, Fresno, CA 93721. Appeals should address only areas regarding RFP contradictions, procurement errors, quotation rating discrepancies, legality of procurement context, conflict of interest, and inappropriate or unfair competitive procurement grievance regarding the RFP process.

The Retirement Administrator or his designee will provide a written response to the complaint within seven (7) working days unless the complainant is notified more time is required.

If the protesting bidder is not satisfied with the decision of the Retirement Administrator, he/she shall have the right to appeal to the Board of Retirement at the next regularly scheduled Board Meeting after notification of Retirement Administrators decision,

If the protesting bidder is not satisfied with Retirement Administrator’s decision, the final appeal is with the Board of Retirement.

SPECIFIC TERMS AND CONDITIONS

ISSUING AGENT: ThiŁ RFP has been issued by FCERA. FCERA shall be the vendor’s sole point of contact with regard to the RFP, its content, and all issues concerning it.

AUTHORIZED CONTACT: All communication regarding this RFP shall be directed to an authorized representative of FCERA. The specific buyer managing this RFP is identified on the cover page, along with his or her telephone number, and he or she should be the primary point of contact for discussions or information pertaining to the RFP. Contact with any other FCERA representative, including elected officials, for the purpose of discussing this RFP, it content, or any other issue concerning it, is prohibited unless authorized by FOERA. Violation of this clause, by the vendor having unauthorized contact (verbally or in writing) with such other FCERA representatives, may constitute grounds for rejection by FCERA of the vendor’s quotation.

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The above stated restriction on vendor contact with FCERA representatives shall apply until FCERA has awarded a purchase order or contract to a vendor or vendors, except as follows. First, in the event that a vendor initiates a formal protest against the RFP, such vendor may contact the appropriate individual, or individuals who are managing that protest as outlined in FCERA’s established protest procedures. All such contact must be in accordance with the sequence set forth under the protest procedures. Second, in the event a public hearing is scheduled before the Board of Retirement to hear testimony prior to its approval of a purchase order or contract, any vendor may address the Board.

NUMBER OF COPIES: Submit one (1) original and 4 copies of your proposal no later than the proposal acceptance date and time as stated on the front of this document to FCERA. The cover page of each document is to be appropriately marked "Original" or "Copy".

SELECTION COMMITTEE: All proposals will be evaluated by a team chaired by the Retirement Administrator. All proposals will be evaluated by a review committee that may consist of FCERA staff and professional advisors.

The proposals will be evaluated in a multi-stage selection process. Some bids may be eliminated or set aside after an initial review. If a proposal does not respond adequately to the RFP or the bidder is deemed unsuitable or incapable of delivering services, the proposal may be eliminated from consideration. It will be the selection committee’s responsibility to make the final recommendation to the Board of Retirement.

CONTRACT TERM: It is FCERA’s intent to contract with the successful bidder for a term of three years with the option to renew for up to two (2) additional one (1) year periods. FCERA will retain the right to terminate the Agreement upon giving thirty (30) days advance written notification to the Contractor.

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T-roposal No. Actuarial Consultant Services Page 17

SCOPE OF WORK

The goal of this RFP is to evaluate and select an actuarial firm who will serve as consulting actuary to the FCERA Board of Retirement and the Retirement Administrator for a period of thirty-six (36) months commencing with the Experience Study for the three years ended June 30, 2006 and the valuation for the year ended June 30, 2007, with an option for two additional years. The firm awarded the resulting contract will provide various actuarial services which include consultation and advisory services, valuation services, experience analysis, and other general duties.

The consulting actuary shall perform tasks which include, but shall not be limited to, the following:

A. General Duties:

1. Load and reconcile all the data in the FCERA database. The primary computer system supporting FCERA’s business applications is Microsoft Windows 2003. FCERA uses a customized defined benefit calculation system developed by Watson Wyatt Worldwide called PensionsIm for monitoring benefit accruals and benefit calculations. The application runs on a MicrosoftsQL server 200 on the service side and Microsoft Access 2003 on the client side. FCERA will provide the consulting actuary with all data and statistical information deemed necessary to perform specified contract services, provided the data is available and in the records and files of the Association. FCERA utilizes a secure FTP site for file transfer and requires that all files transferred between FCERA and the consulting actuary be encrypted with PGP.

2. Treat all member information as confidential. The consulting actuary is expected to treat as confidential all member information as it applies to all data created, gathered, generated or acquired with the contract.

3. Seek written consent prior to public release of information resulting from the engagement. With respect to any publicity given to the actuarial services provided underterms of the resulting contract, the consulting actuary shall identify FCERA as the sponsoring agency and shall not be release any information without prior approval of the Retirement Administrator of the association or appointed designee. This information includes, but is not limited to, press releases, research, and reports.

4. Communicate directly to the Retirement Administrator (or appointed designee). FCERA expects the consulting actuary to route all requests, reports and all other communication in connection with this contract through the Retirement Administrator of the association or appointed designee.

5. Document ideas and issues raised in discussions and meetings. All price quotations for extended services, final reports, correspondence regarding actuarial assumptions and other technical issues

must be reviewed, approved, and signed by the consulting actuary.

6. Perform all services within the scope of the contract under the direct supervision of a qualified actuary, An approved actuary must be regularly engaged in the business of providing actuarial services and have at least 10 years experience with major public employee retirement systems or designation as a Fellow in the Society of Actuaries. FCERA reserves the right to reject the firm’s choice of a consulting actuary and may terminate the contract if a consulting actuary, acceptable to the FCERA Board of Retirement, cannot be made available by the firm.

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B. Consultation and Advisory Services:

1. Provide actuarial consultation and advisory services. These services may be delivered in meetings or by telephone calls and written correspondence. FCERA expects these services may include public testimony to committees and board on any technical, policy, legal or administrative problems arising during the course of operation of the system. The consulting actuary should be readily accessible to FCERA’s Retirement Administrator by telephone within one working day and will be availablefor meetings within five (5) working days of a request. FCERA expects the consulting actuary to attend a minimum of six (6) Board of Retirement meetings per contract year, including one meeting to review the annual actuarial valuation. FCERA also expects the consulting actuary to be available for educational discussions with the Board of Retirement and/or FCERA employees. The consulting actuary must have the ability to discuss actuarial theory and other matters in laymen’s terms.

2. Prepare various actuarial operating tables and factors. From time to time, these tables and factors may be required for operation of the system. These tools include, but are not limited to, mortality tables, option tables for annuitants, present value factors, and survivor benefit factors.

3. Recommend possible improvements in FCERA’s financing and benefit structure. Throughout the duration of the contract, the consulting actuary will inform FCERA of any newdevelopments in the retirement industry and their effect on the financing and benefit structure of a retirement system. The consulting actuary should keep the Board of Retirement and the Retirement Administrator of the association apprised of current trends and advancements within the actuarial profession.

5. Assist FCERA staff in implementing new legislation or proposed changes to existing retirement laws which govern the association. Furthermore, the consulting actuary should assist FCERA in developing strategies for resolving any policy or administrative problems associated with implementing new legislation.

6. Keep FCERA informed of any new developments or changes in federal legislation and/or tax regulations regarding financing, benefits, vesting, fiduciary responsibility or disclosure. FCERA also expects the consulting actuary to assist FCERA in interpreting and implementing federal law appropriately.

7. Assist in establishing actuarial specifications for the association’s data files. FCERAwould like the consulting actuary to provide feedback, at FCERA’s request, on the proposed form and content of the data files and if necessary, make suggestions for system modifications to ensure that the full range of data needed for costing proposed benefit amendments, performing actuarial valuations and reviewing experience studies is maintained.

8. Provide advice on special benefit cases. FCERA may occasionally requestthat the consulting actuary review certain benefit applications and perform complex computations related to special cases including calculations for Modified Option IV benefits, Retirement Benefits subject to the IRS 415 limits, and retirement benefits to persons who are eligible for service retirement without meeting the age or years of service requirements.

9. Determine annual cost-of-living increase to the retirement benefits and maintain COLA bank for retired members. The consulting actuary shall, no later than February of each year, determine the Consumer Price Index for the Western Region Area for the purpose of providing a COLA to eligible retirees. The differences between the actual CPI and the maximum COLA of 3% are "banked". The consulting actuary will maintain the COLA bank,

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Proposal No, Actuarial Consultant Services

C. Valuation Services:

1. Perform annual actuarial valuations. The resulting valuation reports must contain detailed explanations of any significant changes in actuarial losses or gains because of deviations from expected experience.

D. Experience Analysis and Demographic Studies:

1. Prepare a comprehensive triennial experience study. In the third year of the contract, an experience study must be prepared that may include actuarial assumption changes.

2. Prepare necessary reports proiectinq demographic trends for FCERA that wilt impact future service demands,

E. Asset Liability Study:

1 Assist with preparation of Asset Liability Study. In conjunction with FCERNS Investment Consultant, an Asset Liability Study will be prepared at least one time during the contract period.

F. Non-vested supplemental benefits

1. Prepare cost estimates for modifying non-vested supplemental benefits. Cost estimates would include changes to the purchasing power protection cost of living and additional health benefit offered by the Board of Retirement.

G. Software Implementation:

1. FCERA plans on updating it benefit accounting system within the next three years. The consulting actuary will provide assistance in evaluating potential systems and testing conversion files to ensure continued accuracy of member records and benefit calculations.

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PROPOSAL CONTENT REQUIREMENTS

Bidders are requested to submit their proposals in a binder (one that allows for easy removal of pages) with index tabs separating the sections identified. Each page should be numbered.

Merely offering to meet the specifications is insufficient and will not be accepted. Each bidder shall submit a complete proposal with all information requested. Supportive material may be attached as appendices. All pages, including the appendices, must be numbered.

The content and sequence of the proposals will be as follows:

PROPOSAL IDENTIFICATION SHEET (as provided)

II. TRANSMITTAL LETTER: A one-page transmittal letter must be submitted on the firm’s official business letterhead. The letter is to transmit the proposal and provide an introduction to the firm. The transmittal letter include the name, address and telephone number of the person or persons to be used for contact and who will be authorized to make representations for the bidder. The transmittal letter must be signed by individual authorized to commit the consulting actuary to the scope of the work proposed at the price quoted in the firm’s cost proposal.

A. Whether the bidder is an individual, partnership or corporation shall also be stated. It will be signed by the individual, partner, or an officer or agent of the corporation

authorized to bind the corporation, depending upon the legal nature of the bidder. A corporation submitting a proposal may be required before the contract is finally awarded to furnish a certificate as to its corporate existence, and satisfactory evidence as to the officer or officers authorized to execute the contract on behalf of the corporation.

TABLE OF CONTENTS

IV, EXECUTIVE SUMMARY: The executive summary contains a condensed overview of the contents of each of the major sections of the proposal to provide members of the FCERA Evaluation Team with a broad understanding of the entire proposal. The executive summary should begin with an overview of the firm’s organization and prior experience, identify key employees who will serve FCERA and their qualifications. It should also present highlights from the firm’s Proposed Workplan and Detailed Cost Projection,

V. CONFLICT OF INTEREST STATEMENT: The Contractor may become involved in situations where conflict of interest could occur due to individual or organizational activities that occur within FCER.A. In this section the bidder should address the potential, if any, for conflict of interest and indicate plans, if applicable, to address potential conflict of interest. This section will be reviewed by FCERA Counsel for compliance with conflict of interest as part of the review process. The Contractor shall comply will all federal, state and local conflict of interest laws, statutes and regulations.

VI. TRADE SECRET ACKNOWLEDGMENT:

A. Sign and return

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VII. EXCEPTIONS: If the RFP contains any exceptions to the requirements of the RFP, this section should include a description of those exceptions. If exceptions are not noted, FCERA will assume that the bidders proposals meet those requirements. The exceptions shall be noted as follows:

A. Exceptions to General Requirements.

B. Exceptions to Background/Scope of Work.

C. Exceptions to Specific Terms and Conditions.

D. Exceptions to Proposal Content Requirements.

VIII. VENDOR COMPANY DATA: This section should include:

A. The highlights of the firm’s corporate resources, including total staff, organizational structure, financial stability, technical environment and details of previous experience. This section should include a description of the firm’s experience with particular emphasis on work performed for other California public employee retirement systems, especially those governed by the 1937 Act. At a minimum, this description should include a list of public employee retirement systems for which the firm currently provides actuarial services.

B. Descriptions of professional and experience qualifications of the supervising and support actuaries who shall perform work under the resulting contract.

C. Any material (including letters of support or endorsement) indicative of the bidder’s capability.

D. A brief description of the bidder’s current operations, and ability to provide the services.

E. Reference List (form provided)

F. Copies of the audited Financial Statements for the last three (3) years for the agency or program that will be providing the service(s) proposed. If audited statements are not available, complied or reviewed statements will be accepted with copies of three years of corresponding federal tax returns.

G. Describe any terminated contracts for services similar to vendor’s current bid for the RFP and provide the following:

1. Agency contract with

2. Date of original contract

3. Reason for termination

4. Contact person and telephone number for agency

H. Describe any pending lawsuits or legal actions:

1. Location filed, name of court and docket number

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2. Nature of the lawsuit or legal action

I. Describe any past payment problems with FCERA:

1. Funding source

2. Date(s) and amount(s)

3. Resolution

4. Impact to financial viability of organization.

IX. SCOPE OF WORK:

A. Bidders are to use this section to describe the essence of their proposal.

B. This section should be formatted as follows:

1. A general discussion of your understanding of the project, the Scope of Work proposed and a summary of the features of your proposal.

2. A detailed description of your proposal as it relates to each item listed under the "Scope of Work" section of this RFP. Bidders response should be stated in the same order as are the "Scope of Work" items. Each description should begin with a restatement of the "Scope of Work" item that it is addressing. Bidders must explain their approach and method of satisfying each of the listed items.

C. When reports or other documentation are to be a part of the proposal a sample of each must be submitted. Reports should be referenced in this section and submitted in a separate section entitled ’REPORTS."

D. A complete description of any alternative solutions or approaches to accomplishing the desired results.

E. Include a description of the hardware and software used to perform the services required under this RFP,

X. REPORTS: Samples of reports referenced in Section Vlll.C. should be displayed in this section.

XI. COST PROPOSAL: Quotations may be prepared in any manner to best demonstrate the worthiness of your proposal, Include rates for all services, materials, equipment, etc. to be provided under the proposal.

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AWARD CRITERIA

COST

A. As submitted under the "COST PROPOSAL" section.

CAPABILITY AND QUALIFICATIONS

A. Does the service descriptions address all the areas identified in the RFP? Will the proposed services satisfy FCERA’s needs and to what degree?

B. Does the bidder demonstrate knowledge or awareness of the problems associated with providing the services proposed and knowledge of laws, regulations, statutes and effective operating principles required to provide this service?

C. The amount of demonstrated experience in providing the services desired in a California public defined benefit retirement plan.

MANAGEMENT PLAN

A. Is the organizational plan and management structure adequate and appropriate for overseeing the proposed services?

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Exhibit B - Schedule of Fees

S ES AL

SECTION XI COST PROPOSAL

COST PROPOSAL: Qwotations may be prepared in any manner to best demonstrate the worthiness of your proposal. Include rates for all services, materials, equipment, etc. to be provided under the proposal.

Our fees for the tasks detailed in Section IX, Scope of Work, page 34 of our proposal, are shown in the following table. We have shown the cost for each performance of the task expected during the three-year contract.

The volume of Consulting Services can vary from system to system. The retained quoted is based on an estimate of providing approximately 10 hours of consulting services every quarter. Due to the actual volume of on-going consulting services requested by FCERA during our tenure as interim actuary for FCERA, we are proposing that our retainer fees be determined using time spent and the hourly rates from the fee schedule provided on the next page, offset by the quoted retainer fees shown below. At the request of FCERA, estimates of the fees for any special projects will be quoted in advance.

* For period July 1, 2003 through July 30, 2006. Quoted fee assumes cleaned up valuation data is available from the prior actuary. If this information is not available, additional fees may be incurred in cleaning up data provided by FCERA.

Additional Services

Our hourly rates for additional services (including additional meetings) are as follows. For any substantial projects or assignments, as appropriate, we would estimate the time charges required and receive FCERA approval before commencing the project.

Attendance at Board meetings typically run about $3,000 for the day of the meeting. Frequently, this will be part of the project budget for a special project. Preparation for and attendance at off-site training seminars for FCERA for Board and staff members typically runs $7,000 for an all day session.

FCERA 55 RFP for Actuarial Consultant Services -

SECTION XI COST FR OPOSAL

Hourly fee for consulting services and special studies

Principal Actuaries $450 $470 $485

Reviewing Actuaries $390 $400 $415

Supervising Actuaries $370 $385 $400

Senior Actuarial Analysts $230 - $360 $240 - $375 $250 - $390

Actuarial Analysts $150-$220 $150-$230 $150-$240

Compliance Consultant $370 $385 $400

Clerical No charge No charge No charge

The above rates are all-inclusive. The Segal Company does not charge or load for computer time or system usage, nor do we charge for clerical support.

FCERA 56 *SEGAL RFP for Actuarial Consultant Services

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