HomeMy WebLinkAboutRFP - P943 PENSION SERVICES POUDRE FIRE AUTHORITYc 1ty of Tort colltns
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REQUEST FOR PROPOSAL
Please submit six (6) written copies to City of Fort Collins' Purchasing Division, 215 North
Mason St., 2nd floor, Fort Collins, Colorado 80524. Proposals will be received before 3:00
p.m. (our clock), June 30, 2004. Proposal No. P943. If delivered, they are to be sent to 215
North Mason Street, 2"d Floor, Fort Collins, Colorado 80524. If mailed, the address is P.O. Box
580, Fort Collins, 80522-0580.
In addition to the copies submitted to the Purchasing Division, please submit one (1) hard copy
and one (1) electronic copy of your proposal by 3:00 pm on June 30, 2004:
Innovest Portfolio Solutions LLC
Wendy Dominguez
8301 E. Prentice Ave., Suite 300
Greenwood Village, CO 80111
wendyd(cDinnovestinc.com
If your firm is planning to submit a proposal, please fill out and return the Vendor
Qualification form, as soon as possible, following the receipt of this invitation.
Poudre Fire Authority does not want to be contacted during the RFP process.
Questions concerning the scope of the project should be directed to Wendy Dominguez via
email to wendyd(cDinnovestinc.com or Brad Brewer bradbco)-innovestinc.com at Innovest.
Questions regarding proposals submittal or process should be directed to James B. O'Neill, II,
CPPO, FNIGP (970) 221-6775.
A copy of the Proposal may be obtained as follows:
Call the Purchasing Fax -line, 970-416-2033 and follow the verbal instruction to
request document #30943.
2. Download the Proposal/Bid from the BuySpeed Webpage,
https://secure2.fcqov.com/bso/login.'sp.
3. Come by Purchasing at 215 North Mason St., 2"d floor, Fort Collins, and request
a copy of the Bid.
Sales Prohibited/Conflict of Interest: No officer, employee, or member of City Council, shall
have a financial interest in the sale to the City of any real or personal property, equipment,
material, supplies or services where such officer or employee exercises directly or indirectly
any decision -making authority concerning such sale or any supervisory authority over the
services to be rendered. This rule also applies to subcontracts with the City. Soliciting or
accepting any gift, gratuity favor, entertainment, kickback or any items of monetary value from
any person who has or is seeking to do business with the City of Fort Collins is prohibited.
b) Was the system initially purchased from an outside vendor? If so, from whom?
c) If your system was not purchased, when was it first put into place and last updated?
d) Is the system hardware completely dedicated to defined contribution/deferred compensation plan
administration?
2. Describe your company's Technology Plan including backup emergency and disaster recovery systems. How
often are these systems tested? Include the system's structure (i.e., backbone, Internet Service Provider,
router, etc.) What are your plans for systems enhancements and improvements?
3. Do you have the ability to accept the current payroll and indicative file layouts from the City of Fort Collins?
(see attached sample file layouts)
4. Do you have the ability to reconcile payroll contributions every two weeks before any funds are wired?
5. How do you control access to the recordkeeping system? Please comment on the system security measures.
6. Describe the quality control procedures you have in place. What types of reconciliation and editing do you
perform? How do you resolve data discrepancies?
7. Does your organization charge clients for system modifications required by legislative changes?
8. Please describe your plan compliance services. Are these services part of your standard package or are they
additional items with separate fees?
9. Describe the type of legal support you provide. Can you assist with plan document design? If so, how?
10. Can you prepare Forms 1099R? If not, how do you propose to complete this process?
11. Describe the reports that are furnished to the plan sponsor and participants.
12. To what extent can these reports be customized? Provide sample reports, including participant statements.
13. Describe Internet access available to plan sponsors and participants.
14. Do you foresee any specific problems incorporating this plan into your recordkeeping system? If so, describe in
detail.
Administration
Which of these administrative services do you provide? Please describe your services in detail, including the
hours the service is available, the type of transactions that can be initiated using the service, and the number of
plans currently using the service.
a) Voice response system
SA 10/01
10
this
403(a) that agrees to separately account for amounts so transferred, including
separately accounting for the portion of such distribution which is includible in
gross income and the portion of such distribution which is not so includible.
An eligible retirement plan is an individual retirement account described
in Code Section 408(a), an individual retirement annuity described in Code
Section 408(b), an annuity plan described in Code Section 403(a), or a
qualified trust described in Code Section 401(a) that accepts the distributee's
eligible rollover distribution. For purposes of the direct rollover provisions in
this § 6.6, an Eligible Retirement Plan shall also mean an annuity contract
described in Code § 403(b) and an eligible plan under Code § 457(b) which is
maintained by a state, political subdivision of a state, or any agency or
instrumentality of a state or political subdivision of a state and which agrees to
separately account for amounts transferred into such plan from this Plan. The
definition of Eligible Retirement Plan shall also apply in the case of a
distribution to a surviving spouse, or to a spouse or former spouse who is the
alternate payee under a domestic relations order, as defined in Code § 414(p).
IN WITNESS WHEREOF, this Resolution was adopted by the Poudre Fire Authority
_ day of 2002.
POUDRE FIRE AUTHORITY
By:
Its:
ATTEST:
By:
Its:
VII.
Old Hire 2nd Amendment
Resolution 03-6
Adopting the Second Amendment to the
Poudre Fire Authority Old Hire Money Purchase Pension Plan
And Trust Agreement as Amended and Restated, Effective December 24, 2001
WHEREAS, the Poudre Fire Authority (the "Employer"), established the Poudre Fire
Authority Old Hire -City Money Purchase Pension Plan and Trust Agreement (the "Plan"),
effective January 1, 1988; and
WHEREAS, the Employer adopted the amended and restated Plan (the "2001 Restated
Plan"), effective December 24, 2001; and
WHEREAS, the Employer adopted via Resolution 02-13 the first amendment to the
2001 Restated Plan effective January 1, 2002; and
WHEREAS, the Board of Trustees of the Poudre Fire Authority Old Hire Money
Purchase Pension Plan and Trust Agreement have recommended the adoption of the 2001
Restated Plan amendments set forth herein; and
WHEREAS, pursuant to § 11.1 of the 2001 Restated Plan, the Employer has the
authority to amend the Plan with the approval of at least sixty-five percent of the total votes
cast by actively -employed eligible Employees and all former employees who are entitled to a
benefit from the 2001 Restated Plan; and
WHEREAS, after a duly conducted election, the 2001 Restated Plan amendments set
forth herein were approved by at least sixty-five percent of the total votes cast by actively -
employed eligible Employees and all former employees who are entitled to a benefit from the
2001 Restated Plan.
NOW, THEREFORE, be it resolved by the Board of Directors of the Poudre Fire
Authority that the 2001 Restated Plan is hereby amended, effective April 22, 2003 as follows:
1. ARTICLE VII. THE TRUST AND TRUST FUND, § 7.13 Loans to Participants
shall be revised to read as follows:
7.13 Loans to Participants:
(a) General Rules: The Trustees, in accordance with a
uniform and nondiscriminatory policy, may make a loan to any Participant (for
purposes of this Section 7.13, the term "Participant" shall include "Former
Participant") who makes a written request for such a loan. The Trustees will
promulgate rules and procedures regarding Participant loans. No loan to a
Participant may exceed the Participant's vested Accrued Benefit. In addition, a
loan, when added to the outstanding balance of all other loans to the Participant
from this and any other qualified Plan maintained by the Employer, may not
exceed the lesser of. (1) $50,000 less the excess of the highest outstanding
balance of loans from the Plan during the one-year period ending on the day
before such loan is made over the outstanding balance of loans from the Plan on
the day such loan is made; or (2) the greater of one-half of the value of the
Participant's vested Accrued Benefit as of the last preceding valuation date or
$10,000.
(b) Security and Interest: All loans will be adequately secured
and will bear a rate of interest considered reasonable on the date the loan was
made. Participant loans will be considered a Participant -directed investment
under Section 7.2 of the Participant requesting the loan and interest paid on the
loan will be allocated to the account of the Participant -borrower.
(c) Term of Loan: Any loan must be repaid in level payments
of principal and interest at least quarterly within five years of the date on which
it was made. However, any loan verified by the Trustees as used to acquire any
dwelling unit used or to be used within a reasonable time as the principal
residence of the Participant must be repaid within the time prescribed by the
Trustees. If a Participant does not repay a loan within the time prescribed, in
addition to enforcing payment through any legal remedy, the Trustees may
deduct the total amount of the loan and any unpaid interest due on it from the
Participant's Account when the Account becomes distributable under the Plan.
IN WITNESS WHEREOF, this Resolution was adopted by the Poudre Fire Authority
this 22"d day of April, 2003.
POUDRE FIRE AUTHORITY
By:
Its:
ATTEST:
By:
Its:
Old Hire Restatement 48
Vill.
Old Hire 3d Amendment
Resolution 04-3
Adopting the Third Amendment to the Poudre Fire Authority
Old Hire Money Purchase Pension Plan and Trust Agreement
as Amended and Restated Effective December 24, 2001
WHEREAS, the Poudre Fire Authority (the "Employer"), established the Poudre Fire
Authority Old Hire -City Money Purchase Plan and Trust Agreement (the "Plan"), effective
January 1, 1983; and
WHEREAS, the Plan merged with the Poudre Fire Authority Fire Protection District
Plan to form the Poudre Fire Authority Old Hire Money Purchase Pension Plan and Trust
Agreement as amended and restated, effective December 24, 2001 (the "2001 Restated Plan");
and
WHEREAS, the Employer adopted via Resolution 02-13 the First Amendment to the
2001 Restated Plan effective January 1, 2002; and
WHEREAS, the Employer adopted via Resolution 03-6 the Second Amendment to the
2001 Restated Plan effective April 22, 2003; and
WHEREAS, the Board of Trustees of the Poudre Fire Authority Old Hire Money
Purchase Pension Plan and Trust Agreement have recommended the adoption of the
amendments set forth herein; and
WHEREAS, pursuant to §11.1 of the 2001 Restated Plan, the Employer has the
authority to amend the Plan without the approval of Participants of said Plan solely for the
purpose of incorporating minor, technical amendments which are required from time to time by
changes in state or federal laws or regulations; and
WHEREAS, the Employer deems it advisable to amend the Plan and desires to further
amend the Plan to incorporate the minimum required distribution provisions of Code §401(a)(9)
and the Final Regulations thereunder, as required pursuant to IRS Revenue Procedure 2002-29.
NOW, THEREFORE, be it resolved by the Board of Directors of the Poudre Fire
Authority that the 2001 Restated Plan is hereby amended, effective January 1, 2003, as follows:
1. ARTICLE VII., DISTRIBUTION FROM TRUST FUND, §6.3, Post -Death
Distribution, shall be deleted in its entirety and replaced by a new §6.3, Required Minimum
Distribution Rules, to read as follows:
6.3 Required Minimum Distribution Rules
a. General Rules.
(1) Effective Date. The provisions of this Section 6.3 will
apply for purposes of determining required minimum distributions for
calendar years beginning with the 2003 calendar year.
(2) Precedence. The requirement of this Section 6.3 will take
precedence over any inconsistent provisions of the plan.
(3) Requirements of Treasury Regulations Incorporated. All
distributions required under this Section 6.3 will be determined and made
in accordance with the Treasury Regulations under Code §401(a)(9).
(4) TEFRA §242(b)(2) Elections. Notwithstanding the other
provisions of this Section 6.3, distributions may be made under a
designation made before January 1, 1984, in accordance with §242(b)(2)
of the Tax Equity and Fiscal Responsibility Act (TEFRA) and the
provisions of the plan that relate to §242(b)(2) of TEFRA.
b. Death of Participant Before Distribution Begin. If the Participant
dies before distributions begin, the Participant's entire interest will be
distributed, or begin to be distributed, no later than as follows:
(1) If the Participant's surviving spouse is the Participant's sole
designated beneficiary, then distributions to the surviving spouse will
begin by December 31 of the calendar year immediately following the
calendar year in which the Participant died, or by December 31 of the
calendar year in which the Participant would have attained age 70 1/2, if
later.
(2) If the Participant's surviving spouse is not the Participant's
sole designated beneficiary, then distributions to the designated
beneficiary will begin by December 31 of the calendar year immediately
following the calendar year in which the Participant died.
(3) If there is no designated beneficiary as of September 30 of
the year following the year of the Participant's death, the Participant's
entire interest will be distributed by December 31 of the calendar year
containing the fifth anniversary of the Participant's death.
(4) If the Participant's surviving spouse is the Participant's sole
designated beneficiary and the surviving spouse dies after the Participant
but before distributions to the surviving spouse begin, this Section 6.3(b),
other than Section 6.3(b)(1), will apply as if the surviving spouse were the
Participant.
(5) For purposes of this Section 6.3(b) and Section 6.3(d),
unless Section 6.3(b)(4) applies, distributions are considered to begin on
the Participant's required beginning date. If Section 6.3(b)(4) applies,
distributions are considered to begin on the date distributions are required
to begin to the surviving spouse under Section 6.3(b)(1). If distributions
under an annuity purchased from an insurance company irrevocably
commence to the Participant before the Participant's required beginning
date (or to the Participant's surviving spouse before the date distributions
are required to begin to the surviving spouse under Section 6.3(b)(1)), the
date distributions are considered to begin is the date distributions actually
commence.
C. Required Minimum Distributions During Participant's Lifetime.
(1) Amount of Required Minimum Distribution for Each
Distribution Calendar Year. During the Participant's lifetime, the
minimum amount that will be distributed for each distribution calendar
year is the lesser of.
(i) the quotient obtained by dividing the Participant's
account balance by the distribution period in the Uniform Lifetime Table
set forth in §1.401(a)(9)-9 of the Treasury Regulations, using the
Participant's age as of the Participant's birthday in the distribution calendar
year; or
(ii) if the Participant's sole designated beneficiary for
the distribution calendar year is the Participant's spouse, the quotient
obtained by dividing the Participant's account balance by the number in
the Joint and Last Survivor Table set forth in §1.401(a)(9)-9 of the
Treasury Regulations, using the Participant's and spouse's attained ages as
of the Participant's and spouse's birthdays in the distribution calendar year.
Required minimum distributions will be determined under
this Section 6.3(c) beginning with the first distribution calendar year and
up to and including the distribution calendar year that includes the
Participant's date of death.
d. Required Minimum Distributions After Participant's Death.
(1) Death On or After Date Distributions Begin.
(i) Participant Survived by Designated Beneficiary. If
the Participant dies on or after the date distributions begin and there is a
designated beneficiary, the minimum amount that will be distributed for
each distribution calendar year after the year of the Participant's death is
the quotient obtained by dividing the Participant's account balance by the
longer of the remaining life expectancy of the Participant or the remaining
life expectancy of the Participant's designated beneficiary, determined as
follows:
(A) The Participant's remaining life expectancy
is calculated using the age of the Participant in the year of death, reduced
by one for each subsequent year.
(B) If the Participant's surviving spouse is the
Participant's sole designated beneficiary, the remaining life expectancy of
the surviving spouse is calculated for each distribution calendar year after
the year of the Participant's death using the surviving spouse's age as of
the spouse's birthday in that year. For distribution calendar years after the
year of the surviving spouse's death, the remaining life expectancy of the
surviving spouse is calculated using the age of the surviving spouse as of
the spouse's birthday in the calendar year of the spouse's death, reduced by
one for each subsequent calendar year.
(C) If the Participant's surviving spouse is not
the Participant's sole designated beneficiary, the designated beneficiary's
remaining life expectancy is calculated using the age of the beneficiary in
the year following the year of the Participant's death, reduced by one for
each subsequent year.
(ii) No Designated Beneficiary. If the Participant dies
on or after the date distributions begin and there is no designated
beneficiary as of September 30 of the year after the year of the
Participant's death, the minimum amount that will be distributed for each
distribution calendar year after the year of the Participant's death is the
quotient obtained by dividing the Participant's account balance by the
Participant's remaining life expectancy calculated using the age of the
Participant in the year of death, reduced by one for each subsequent year.
(2) Death Before Date Distribution Begin.
(I) Participant Survived by Designated Beneficiary. If
the Participant dies before the date distributions begin and there is a
designated beneficiary, the minimum amount that will be distributed for
each distribution calendar year after the year of the Participant's death is
the quotient obtained by dividing the Participant's account balance by the
remaining life expectancy of the Participant's designated beneficiary,
determined as provided in Section 6.3(d)(1).
(ii) No Designated Beneficiary. If the Participant dies
before the date distributions begin and there is no designated beneficiary
as of September 30 of the year following the year of the Participant's
death, distribution of the Participant's entire interest will be completed by
December 31 of the calendar year containing the fifth anniversary of the
Participant's death.
(iii) Death of Surviving Spouse Before Distributions to
Surviving Spouse Are Required to Begin. If the Participant dies before
the date distributions begin, the Participant's surviving spouse is the
Participant's sole designated beneficiary, and the surviving spouse dies
before distributions are required to begin to the surviving spouse under
Section 6.3(b)(1), this Section 6.3(d)(2) will apply as if the surviving
spouse were the Participant.
e. Definitions. The following definitions apply to this Section 6.3.
(1) Designated Beneficiary. The individual who is designated
as the Beneficiary by the Participant, or by the Plan, who is a "designated
beneficiary" under Code §401(a)(9) and §1.401(a)(9)-1, Q&A-4, of the
Treasury Regulations.
(2) Distribution Calendar Year. A calendar year for which a
minimum distribution if required. For distributions beginning before the
Participant's death, the first distribution calendar year is the calendar year
immediately preceding the calendar year which contains the Participant's
required beginning date. For distributions beginning after the Participant's
death, the first distribution calendar year is the calendar year in which
distributions are required to begin under Section 6.3(b). The required
minimum distribution for the Participant's first distribution calendar year
will be made on or before the Participant's required beginning date. The
required minimum distribution for other distribution calendar years,
including the required minimum distribution for the distribution calendar
year in which the Participant's required beginning date occurs, will be
made on or before December 31 of that distribution calendar year.
(3) Life Expectancy. Life expectancy as computed by use of
the Single Life Table in § 1.401 (a)(9)-9 of the Treasury Regulations.
(4) Participant's Account Balance. The balance of the
Participant's Account as of the last valuation date in the calendar year
immediately preceding the distribution calendar year (valuation calendar
year) increased by the amount of any contributions made and allocated or
forfeitures allocated to the Account as of dates in the valuation calendar
year after the valuation date and decreased by distributions made in the
valuation calendar year after the valuation date. The account balance for
the valuation calendar year includes any amounts rolled over or
transferred to the Plan either in the valuation calendar year or in the
distribution calendar year if distributed or transferred in the valuation
calendar year.
(5) Required Beginning Date. The latest date for
commencement of distributions for a Participant, as determined under
Section 6.4 of the Plan
IN WITNESS WHEREOF, this Resolution was adopted by the Poudre Fire Authority
this 24`h day of February, 2004.
POUDRE FIRE AUTHORITY
By:
ATTEST:
By:
Recording Secretary
Old Hire Restatement 55
PFA Board Chair
b) Internet / web site capabilities
c) Dedicated call center operators
2. Toll free telephone and internet / web site access:
a) Do you provide a toll free telephone access number to participants? If so, how long has the toll free
number been operational?
b) Does the toll free number utilize a voice response system or a human operator or both? What is the
average wait time for a human operator?
c) What days/hours is an operator available (Mountain Time)?
d) What days/hours is the voice response system available (Mountain Time)?
e) Describe the platform supporting your voice, data and Internet systems.
How many defined contribution plans use your voice response and internet system capabilities? How
many participants does this represent? How does your firm describe excessive telephone or web volume?
Has this volume ever been reached? If so, what contingency plan was utilized to handle the overload? If
not, what is your contingency plan? Describe your policy, in detail, on restricting or suspending system
access due to routine maintenance and/or telephone and Internet service provider failures.
g) Would the following functions be considered standard or additional add -on features to your voice response
and internet system access service?
(1) Information, e.g., plan provisions
(2) Enrollment
(3) Investment fund information and performance
(4) Account balances
(5) Current participant information
(6) Change of address or status
(7) Reallocation of existing account balances
(8) Withdrawals/disbursements
(9) PIN code change
(10) Beneficiary designation
(11) Statement Requests
(12) Prospectus Orders
(13) Confirmation letter of any change
(14) Asset allocation modeling
(15) Account balance projections
(16) Loan modeling
(17) Retirement planning calculators
(18) Investment advice
Please discuss your capabilities in offering investment advice to participants. Who provides it? Explain how it
is delivered (i.e, in person, over the internet, etc.). Explain how Poudre Fire is indemnified by the advice you
offer.
SA 10/01
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Ix.
Old Hire Reinstatement
09/2001
SAW\57133\348247.07
RESTATED
POUDRE FIRE AUTHORITY
OLD HIRE MONEY PURCHASE PENSION PLAN
AND
TRUST AGREEMENT
December 24, 2001
SAW\57133\348247.07
TABLE OF CONTENTS
Page
ARTICLEI. PURPOSE......................................................................................................
1
ARTICLE II. DEFINITIONS AND CONSTRUCTION.................................................................
2
2.1
Definitions...............................................................................................................
2
(a)
Accrued Benefit......................................................................................................
3
(b)
Aggregate Account..................................................................................................
3
(c)
Authorized Leave of Absence.....................................................................................
3
(c)
Beneficiary............................................................................................................3
(d)
Compensation........................................................................................................
3
(e)
Disability..............................................................................................................4
(f)
Effective Date........................................................................................................
4
(g)
Employee.............................................................................................................
4
(h)
Employee Contribution Account..................................................................................
5
(i)
Employee Rollover Account.......................................................................................
5
(i)
Employee Voluntary Contribution Account.....................................................................
5
0)
Employer..............................................................................................................5
(k)
Employer Contribution Account..................................................................................
5
(1)
Fiduciaries............................................................................................................
5
(m)
Former Participant...................................................................................................
5
(o)
Income.................................................................................................................6
(p)
Internal Revenue Code..............................................................................................
6
(4)
Normal Retirement Age............................................................................................
6
(r)
Participant.............................................................................................................6
(s)
Participation.................................................... ......................................
................ 6
(t)
Plan ....................................................................................................................
6
(u)
Service.................................................................................................................6
(v)
Trust (or Trust Fund)...................................................................
(w)
Valuation Date.......................................................................................................
6
(x)
Year (Plan Year).....................................................................................................
7
2.2
Construction.............................................................................................................
7
ARTICLE
III. PARTICIPATION AND SERVICE........................................................................
7
3.1
Participation.............................................................................................................
7
3.2
Participation Upon Re-Employment.................................................................................
7
3.3
Mandatory Participation in Plan ......................................................................................
7
ARTICLE
IV. CONTRIBUTIONS AND FORFEITURES...............................................................
8
4.1
Employer Contributions...............................................................................................
8
4.2
Contributions by Participants.........................................................................................
8
4.3
Disposition of Forfeitures.............................................................................................
9
4.4
Rollover Contributions.................................................................................................
9
ARTICLE
V. ALLOCATIONS TO PARTICIPANTS' ACCOUNTS................................................10
5.1
Individual Accounts...................................................................................................10
5.2
Account Adjustments ........................ ............................................................
I............. 10
5.3
Maximum Additions...................................................................................................
11
5.4
Multiple Plan Reduction..............................................................................................13
5.5
Qualified Military Service............................................................................................
14
5.6
Return of Contributions...............................................................................................
14
ARTICLEVl.
BENEFITS.....................................................................................................14
6.1
Benefits..................................................................................................................
14
6.2
Payment of Benefits...................................................................................................15
6.3
Post -Death Distribution...............................................................................................18
6.4
Designation of Beneficiary.....................................................................
6.5
Distributions Under Domestic Relations Order...................................................................
19
6.6
Direct Transfers and Rollovers......................................................................................
19
ARTICLE
VII. THE TRUST AND TRUST FUND....................................................................20
SAW\57133\348247.07 Old Hire Restatement
7.1
Contributions to Trust.................................................................................................20
7.2
Participant Direction of Investment.................................................................................
21
7.3
Trustees' Powers and Duties.........................................................................................22
7.4
Further Powers of the Trustees......................................................................................24
7.5
Investment Manager...................................................................................................25
7.6
Claims Procedure......................................................................................................26
7.7
Records and Reports..................................................................................................26
7.8
Other Administrative Powers and Duties..........................................................................27
7.9
Rules and Decisions...................................................................................................27
7.10
Benefit Payments......................................................................................................28
7.11
Application and Forms for Benefits.................................................................................28
7.12
Indemnification.........................................................................................................
28
7.13
Loans to Participants..................................................................................................
28
7.14
Payment of Expenses and Fees......................................................................................
29
7.15
Protection of the Trustees............................................................................................30
7.16
Accounts of the Trustees.............................................................................................30
ARTICLE
VIII. TRUSTEES.................................................................................................31
8.1
Trustees.................................................................................................................31
8.2
Use of Corporate Trustee.............................................................................................32
8.3
Officers..................................................................................................................33
8.4
Officer Responsibilities...............................................................................................33
8.5
Annual Meeting........................................................................................................
33
8.6
Quorum..................................................................................................................34
8.7
Majority Vote..........................................................................................................34
ARTICLE IX. FIDUCIARIES................................................................................................34
9.1
Fiduciaries..............................................................................................................34
9.2
General Fiduciary Duties.............................................................................................
35
9.3
Bonding and Insurance................................................................................................35
9.4
Delegation of Authority...............................................................................................
36
ARTICLE
X. MISCELLANEOUS..........................................................................................36
10.1
Nonguarantee of Employment.......................................................................................
36
10.2
Rights to Trust Assets.................................................................................................36
10.3
Nonalienation of Benefits.............................................................................................36
10.4
Payments to Minors or Persons of Unsound Mind...............................................................
37
10.5
Disposition of Unclaimed Payments................................................................................
37
10.6
Severability of Provisions............................................................................................38
10.7
Trust and Plan to be Tax Exempt...................................................................................38
ARTICLE
XI. AMENDMENT OR TERMINATION OF THE PLAN................................................38
11.1
Right and Restrictions.................................................................................................38
11.2
Merger or Consolidation of the Plan...............................................................................39
ARTICLE
XII. GOVERNING LAW......................................................................................39
SAW\57133\348247.07 Old Hire Restatement
POUDRE FIRE AUTHORITY
OLD HIRE MONEY PURCHASE PENSION PLAN
AND
TRUST AGREEMENT
WHEREAS, Poudre Fire Authority continues, within this Trust Agreement, a Plan for
the administration and distribution of contributions made by the Employer and its eligible
Employees for the purpose of providing retirement benefits for its eligible Employees. This
Plan is an amended plan, in restated form, resulting from the merger of two plans: The Poudre
Fire Authority (Old Hire -City) Money Purchase Pension Plan and Trust Agreement (hereinafter
referred to as the "Old Hire -City Plan"), and the Poudre Valley Fire Protection District Pension
Plan (hereinafter referred to as the "District Pension Plan") (the Old Hire -City Plan and the
District Pension Plan shall collectively be referred to hereinafter as the "Prior Plans"). The
provisions of this Plan shall apply solely to an Employee whose employment with the Employer
terminates on or after the restated Effective Date of the Plan. If an Employee's employment
with the Employer terminates prior to the restated Effective Date, that Employee shall be
entitled to benefits under the Prior Plan in which such Employee participated, as such Prior Plan
existed on the date of the Employee's termination of employment.
Now, therefore, the Poudre Fire Authority amends and restates the Old Hire Money
Purchase Pension Plan and Trust Agreement to be effective December 24, 2001, the terms of
which shall supersede the provisions of any plan in effect prior to December 24, 2001.
ARTICLE XIV. PURPOSE
Effective as of December 24, 2001, Poudre Fire Authority, known as the Employer, and
, and as the Trustees, hereby adopt and establish the
Old Hire Restatement
Amended and Restated Poudre Fire Authority Old Hire Money Purchase Pension Plan and Trust
Agreement.
The purpose of the Plan is to reward Employees of the Employer for their loyal and
faithful service, to help the Employees accumulate funds for their later years and to provide
funds for their beneficiaries in the event of death or disability. The benefits provided by this
Plan will be paid from a Trust Fund established by the Employer as a result of the merger of the
Prior Plans, and will be in addition to the benefits Employees are entitled to receive under any
other programs of the Employer.
The provisions of this Plan and Trust shall apply only to an Employee who terminates
employment on or after the Effective Date of this Plan (December 24, 2001). Each Participant
shall be entitled to receive a benefit immediately after the merger (determined as if such Prior
Plan had then terminated) which is equal to or greater than the benefit he would have been
entitled to receive immediately before such merger (if the Prior Plan had then terminated). The
rights and benefits, if any, of a former employee whose employment terminated prior to
December 24, 2001 shall be determined in accordance with the provisions of any Prior Plan and
Trust in effect on the date his employment terminated.
The Plan is being established pursuant to C.R.S. § 31-30.5-802 and 31-31-601 and is a
governmental retirement plan exempt from the provisions of the Employee Retirement Income
Security Act. The Plan and Trust are intended to meet the requirements of Sections 401(a) and
501(a) of the Internal Revenue Code of 1986 to the extent applicable to governmental plans.
ARTICLE XV. DEFINITIONS AND CONSTRUCTION
15.1 Definitions: The following words and phrases, when used herein, unless their
context clearly indicates otherwise, shall have the following respective meanings:
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(a) Accrued Benefit: Means the amount standing in a Participant's
account(s) as of any date derived from Employer contributions, Mandatory Participant
Contributions and Rollover Contributions.
(b) Aggregate Account: The value of all accounts maintained on behalf of a
Participant, whether attributable to Employer or Employee contributions or rollover accounts.
(c) Authorized Leave of Absence: Any absence authorized by the Employer
under the Employer's standard personnel practices provided that all persons under similar
circumstances must be treated alike in the granting of such Authorized Leaves of Absence and
provided further that such leave shall end as of the date it was extended to.
(d) Beneficiary: A person or persons (natural or otherwise) designated by a
Participant in accordance with the provisions of Section 6.4 to receive any death benefit which
shall be payable under this Plan.
(e) Compensation: A Participant's base salary received from the Employer
for personal services during the Year, but excluding holiday pay, acting officer pay, longevity
pay, bonus payments, payments for unused vacation, overtime, uniform cleaning and travel
allowances, and excluding any benefits paid under this Plan or any other retirement or life
insurance program or under any other health or welfare plan. For purposes of allocating the
Employer's contribution for the Year in which a Participant begins or resumes Participation,
Compensation shall be determined as of the first day of the year in which the Employee became
a Participant and Compensation before his Participation began or resumed shall be disregarded.
Contributions shall be made on a Participant's base salary as defined herein, before taking into
account the reduction of any salary deferrals under the Employer's deferred compensation plan
maintained under Code Section 457. Effective January 1, 1994, Compensation in excess of
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3
$150,000 (as adjusted by the Secretary of the Treasury for cost of living increases or by
Congress) shall not be taken into account under the Plan.
(f) Disability: Disability hereunder shall mean when a Participant is found
by the Board of Directors of the Colorado Fire and Police Pension Association to be eligible for
disability benefits as a result of such Participant's becoming totally disabled or occupationally
disabled as provided under and defined in C.R.S. Section 31-31-803.
(g) Effective Date: The original effective date is January 1, 1983. The
Effective Date of this amended and restated Plan shall be December 24, 2001, except as
otherwise noted.
and
(h) Employee: Employee shall mean any person:
(1) who is employed by the Employer on or after the Effective Date;
(2) whose most recent employment with the Employer or the City
commenced prior to April 8, 1978 or whose most recent employment with the Employer or the
City commenced on or after April 8, 1978, but before January 1, 1980, and who complies with
the requirements set forth in C.R.S. Section 31-30.5-103(1)(b).
(3) who is paid by the Employer on a salary basis; and
(4) whose duties are directly involved with the provision of fire
protection as certified by the Employer.
The term "Employee" shall not mean nor include clerical or other
personnel whose services for the Employer are auxiliary to actual fire protection or any
volunteer firefighter, as defined in C.R.S. Section 31-30-1102(9), as may be amended from time
to time.
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Anything contained in this Section 2.1(h) to the contrary notwithstanding,
the term "Employee" shall also mean any person who was a participant in the Poudre Valley
Fire Protection District Pension Plan as in effect on December 31, 1989, as amended, and who
continues to be a participant on the Effective Date.
The Employer shall, under its current employment policies, make the
determination of whether a person employed by it meets the definition of "Employee" as set
forth herebefore in this Section 2.1(h).
(i) Employee Contribution Account: The account maintained for a
Participant to record his mandatory contributions to the Plan and adjustments relating thereto.
0) Employee Rollover Account: The account established to hold and
account for the contributions rolled over by a Participant from Prior Plans or any other qualified
rollover.
(k) Employee Voluntary Contribution Account: The account maintained for
a Participant to record his voluntary contribution to the Trust and adjustments relating thereto.
(1) Employer: The Employer shall mean the Poudre Fire Authority.
(m) Employer Contribution Account: The account maintained for a Par-
ticipant to record his share of the contributions of the Employer and adjustments relating
thereto.
(n) Fiduciaries: The Employer and the Trustees, but only with respect to the
specific responsibilities of each for Plan and Trust administration, all as described in Article IX.
(o) Former Participant: A Participant whose employment with the Employer
has terminated but who has a vested account balance under the Plan which has not been paid in
full.
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5
(p) Income: The net gain or loss of the Trust Fund from investments, as
reflected by interest payments, dividends, realized and unrealized gains and losses on securities,
other investment transactions and expenses paid from the Trust Fund. In determining the
Income of the Trust Fund for any period, assets shall be valued on the basis of their fair market
value.
(q) Internal Revenue Code: The Internal Revenue Code of 1986, as
amended.
(r) Normal Retirement Age: The date a Participant completes twenty (20)
Years of Service or attains the age of fifty (50), whichever occurs first.
(s) Participant: An Employee participating in the Plan in accordance with
the provisions of Section 3.1.
(t) Participation: The period commencing as of the date the Employee
became a Participant and ending upon the termination of employment.
(u) Plan: The Poudre Fire Authority Old Hire Money Purchase Pension Plan
and Trust, the Plan set forth herein, as amended from time to time.
(v) Service: A Participant's period of employment with the Employer
determined in accordance with Section 3.2.
(w) Trust (or Trust Fund): The Trust maintained in accordance with the
terms of this Trust Agreement, as from time to time amended, which constitutes a part of this
Plan, and the funds now or hereafter placed with the Trustees to be held, invested and paid out
pursuant to the provisions of this Plan and Trust Agreement.
(x) Valuation Date: The Valuation Date is the last day of each Year or such
other date or dates deemed necessary by the Trustees. The Valuation Date may include any day
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Z
4. How are participant and employer complaints handled? Are the complaints and resolutions tracked, monitored
and reported to your clients? How quickly are they reported to clients?
5. How are personal identification numbers (PINS) or passwords handled? What other security measures are
taken to ensure proper access to participant information?
6. Provide representative samples of employee aids for using your voice response system/web site (i.e.,
brochures, maps, or other materials).
7. Can participants enroll on-line or through the voice response system?
8. When will participant statements be mailed?
9. Provide your company's statement accuracy percentage.
10. Is there a limit on the types of distributions an employee can have?
11. Describe your procedures for identifying and calculating age 70'/2 minimum distributions and substantially equal
payments.
12. Upon receipt of plan contributions, provide a timeline of contribution processing and the requirements that you
will impose on the plan. Provide the same information for participant elections for transfers of funds between
available investment options, including specifics on switching funds, settlement process and lagtime.
13. Describe your process for handling and administering QDRO's, plan loans and hardship withdrawals. Describe
the flexibility in your loan repayment processing (i.e., additional payments, multiple loans, missed payments
etc.)
14. Check Disbursement Process:
a) Describe, including turnaround time, check preparation, cut-off dates, etc.
I Investment Management Services 1
1. Do you have the ability to offer the plan the mutual funds listed in the Statement of Plan Services in the
Statement of Work?
2. Do you have the ability to offer an open universe of fund offerings, with no more than 50% of the funds on the
platform being proprietary?
3. Do you have the ability to recordkeep custom lifecycle funds created from the underlying mutual funds offered
in the plan? If no, how do you recommend handling? Would there be any additional charges for this service?
4. Please supply a complete list of all of the funds available on your platform. (Please include share class, ticker
symbol and the level of revenue sharing you receive for each mutual fund.)
5. If the plan were to choose to add funds outside of your platform, can they be accommodated? What are the
restrictions?
SA 10/01
12
during the Plan Year that the Trustees, any transfer agent appointed by the Trustees and any
stock exchange used by such agent are open for business.
(y) Year (Plan Year): The plan year consisting of the 12-month period
commencing on January 1 and ending on the following December 31.
15.2 Construction: The masculine gender, where appearing in this Plan and Trust,
shall be deemed to include the feminine gender, unless the context clearly indicates to the
contrary.
ARTICLE XVI. PARTICIPATION AND SERVICE
16.1 Participation: Each Employee becomes a Participant in the Plan on the later of
his date of hire or the date he attains age 18. Each Employee who was a Participant in the Prior
Plans on the day before the Effective Date of this restated Plan continues as a Participant in the
Plan.
16.2 Participation Upon Re -Employment: If the Service of an Employee terminates
and he or she is re-employed as an Employee, such re-employed Employee will be eligible to
become a Participant and shall begin participation in the Plan on the date he or she is re-
employed by the Employer as an Employee and is first compensated as a re-employed
Employee.
16.3 Mandatory Participation in Plan: Except as provided in the following sentence,
all Employees who are eligible to participate in the Plan must participate in the Plan as a
condition of their employment as an Employee with the Employer, and no current Participant
may elect to discontinue his or her participation in the Plan. The provisions of this Section 3.3
may not be applicable to the fire chief of the Employer, provided that the applicable provisions
of the Colorado Revised Statutes are complied with, and further provided that if said chief
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participates in another retirement plan sponsored by the Employer, such participation in such
other retirement plan does not detrimentally impact the continued tax qualification of this Plan
and Trust Agreement under the Internal Revenue Code.
ARTICLE XVII. CONTRIBUTIONS AND FORFEITURES
17.1 Employer Contributions: Not less than monthly, the Employer shall pay into the
Trust Fund an amount equal to eight percent (8%) of the Compensation of all Participants
eligible to receive a contribution for such month.
17.2 Contributions by Participants:
(a) Mandatory Contributions: Not less than monthly, each Participant will
be required to make a mandatory contribution of eight percent (8%) of their monthly
Compensation.
The Employer shall pick up Mandatory Employee Contributions for all
Compensation paid after the Effective Date and the contributions so picked up shall be treated
as Employer contributions pursuant to Section 414(h)(2) of the Internal Revenue Code in
determining tax treatment under such Code. The Employer shall pay these Employee
contributions directly to the Trust Fund in lieu of paying such amounts to Employees, and such
contributions shall be paid from the same funds which are used in paying salaries to the
Employees. Employee contributions so picked up shall be treated for all purposes of this Plan,
other than federal tax, in the same manner as Employee contributions which are not picked up
by the Employer.
(b) Voluntary Contributions: In order to encourage savings and investments
by Participants, each Participant voluntarily may contribute to the Trust an amount not to
exceed seven percent (7%) of Compensation in addition to contributions under subparagraph (a)
SAW\57133\348247.07 Old Hire Restatement
10
of this subsection. All contributions shall be made by payroll deduction. The percentage, if
any, which a Participant contributes under this section may be changed by filing a written notice
with the Plan Manager prior to the effective date of such change. All voluntary contributions
shall be paid to the Trustee by the Employer at least monthly. No Participant shall have any
obligation to make any voluntary contribution.
17.3 Disposition of Forfeitures: The amount of a Participant's Accrued Benefit
forfeited under the Plan pursuant to Section 10.5 is a Participant forfeiture. Subject to any
restoration allocation required under Section 10.5, the Trustees will use, allocate and credit the
forfeiture as an additional Employer contribution for the Plan Year in which the forfeiture
occurs. The Trustees will allocate the participant forfeitures for a Plan Year to the Account of
each Participant in the same ratio that each Participant's Compensation for the Plan Year bears
to the total Compensation of all Participants for the Plan Year. A Participant will not share in
the allocation of a forfeiture of any portion of his Accrued Benefit.
17.4 Rollover Contributions: As permitted by law, an Employee who has an
entitlement to a distribution of his entire interest in a plan which meets the requirements of
Section 401(a) of the Internal Revenue Code or from an Individual Retirement Account may, in
accordance with the procedures of the Trustees, transfer the rollover amount to the Trustees.
The plan -to -Plan rollover must be executed on or before the 60th day after the day on which he
is entitled to receive such distribution, to the extent that the fair market value of the rollover
amount exceeds the amounts considered contributed by the Employee, reduced by any amounts
previously distributed to him which were not includible in gross income. Such rollover amount
shall be non -forfeitable, shall be held in a separate account and shall receive income allocations.
The acceptance of the rollover amounts and the provisions established by the Trustees shall be
governed by the provisions of the Internal Revenue Code.
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0
ARTICLE XVIII. ALLOCATIONS TO PARTICIPANTS' ACCOUNTS
18.1 Individual Accounts: The Trustees shall create and maintain adequate records to
disclose the interest in the Trust of each Participant, Former Participant and Beneficiary. Such
records shall be in the form of individual accounts, and credits and charges shall be made to
such accounts in the manner herein described. A Participant may have up to five (5) separate
accounts: an Employer Contribution Account, a Mandatory Employee Contribution Account,
Employee Voluntary Contribution Account, Employee Mandatory Post Tax Contribution
Account, and an Employee Rollover Account. The maintenance of individual accounts is only
for accounting purposes, and a segregation of the assets of the Trust Fund to each account shall
not be required. Distribution and withdrawals made from an account shall be charged to the
accounts as of the date paid.
18.2 Account Adjustments: The accounts of Participants, Former Participants and
Beneficiaries shall be adjusted in accordance with the following:
(a) Income: On each business day of the Year, a daily determination of
unrealized and realized gains and losses, interest, dividends and capital gain distributions will
be calculated and allocated based on the actual activity in each Participant's account. Activity
includes, but is not limited to, allocation of contributions, forfeitures and distributions.
Earnings or losses with respect to a Participant's directed account shall be allocated in
accordance with Section 7.2.
Participant's transfers from other qualified plans and voluntary contributions
deposited in the general Trust Fund shall share in any earnings and losses (net appreciation or
net depreciation) of the Trust Fund in the same manner provided above. Each segregated
SAW\57133\348247.07 Old Hire Restatement
10
account maintained on behalf of a Participant shall be credited or charged with its separate
earnings and losses.
(b) Employer Contributions: Employer contributions shall be allocated to
the Employer Contribution Account of each eligible Participant not less than monthly,
according to the amount that is actually contributed on behalf of each Participant in accordance
with Section 4.1.
(c) Expenses: To the extent the Employer does not pay the administrative,
legal, investment and consulting fees of the Trust in accordance with Section 7.14, such
expenses shall be paid and shall be allocated to and deducted from the accounts of Participants.
Expenses which are incurred as a direct result of the investments held in the Trust, shall be
deducted from the interest, dividends and net income of the appropriate investment prior to
allocating each month's Income to Participants. General administrative, legal and consulting
fees and expenses shall be deducted from the accounts of all Participants in the proportion that
each Participant's account balance bears to the total account balances of all Participants in the
Plan on the date such expenses are deducted.
18.3 Maximum Additions: Notwithstanding anything contained herein to the
contrary, the total Additions made to the Employer and Employee Contribution Accounts of a
Participant for any Year shall not exceed the "Maximum Permissible Amount," reduced by the
sum of any Additions allocated to the Participant's accounts for the same Year under any other
defined contribution plan or welfare benefit fund (as defined in Code Section 419(e))
maintained by the employer. The Maximum Permissible Amount shall be equal to the lesser of
$30,000 or 25% of the Participant's Compensation for such Year, or such amount as provided in
§415 of the Internal Revenue Code.
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(a) The term "Additions" means the total of the Employer contributions and
forfeiture amounts allocated to a Participant's Employer Contribution Account, plus the amount
of any Employee Contributions to the Plan. Amounts allocated to an individual medical
account (as defined in Code Section 415(1)(2)) included as part of a defined benefit plan
maintained by the Employer are Additions. Furthermore, Additions include contributions paid
or accrued attributable to post -retirement medical benefits allocated to the separate account of a
key employee (as defined in Code Section 419A(d)(3)) under a welfare benefit fund (as defined
in Code Section 419(e)) maintained by the Employer.
(b) "Addition" does not include "rollovers" from a qualified plan or
Individual Retirement Account as defined in the Internal Revenue Code.
(c) As of January I of each calendar year, and applicable for that Plan Year,
the dollar limit may be adjusted for increases in the cost of living in accordance with
regulations prescribed by the Secretary of the Treasury or his delegate. If such additions exceed
the limitation, the contributions made by the Participant for the Year, which cause the excess,
shall be returned to the Participant. If, after returning the Participant's contribution an excess
still exists, such excess which is attributable to Forfeitures shall be held in a suspense account.
Such account may be maintained if (1) no Employer contributions are made when their
allocation could be precluded by Section 415 of the Internal Revenue Code, (2) no income is
allocated to the account, and (3) amounts in the account are allocated as of each allocation date
on which Forfeitures may be allocated until the account is exhausted. Upon termination of the
Plan, the balance of such account may revert to the Employer.
(d) For purposes of this section, the limitation year shall mean the Plan Year.
The term "Compensation" means, for purposes of Sections 5.3 and 5.4 only, a Participant's
earned income, wages, salaries, fees for professional services and other amounts received for
SAW\57133\348247.07 Old Hire Restatement
12
personal services actually rendered in the course of employment with the employer maintaining
the Plan, including cash awards and elective contributions. "Elective contributions" are
amounts excludible from an Employee's gross income under Code Section 125, and amounts
contributed by the Employer, at the Employee's election, to a Code Section 457 Plan
arrangement or a cafeteria plan.
18.4 Multiple Plan Reduction: If an Employee is a Participant in one or more defined
benefit plans and one or more defined contribution plans maintained by the Employer, the sum
of the defined benefit plan fraction and the defined contribution plan fraction for any Plan Year
prior to January 1, 2000 may not exceed 1.0. The defined benefit plan fraction for any year is a
fraction (a) the numerator of which is the projected "annual benefit" of the Participant under the
Plan (determined as of the close of the Year), and (b) the denominator of which is the lesser of-
(1) the product of 1.25 multiplied by the maximum dollar limitation in effect under
Section 415(b)(1)(A) of the Code for such year, or (2) the product of 1.4 multiplied by the
amount which may be taken into account under Section 415(b)(1)(B) of the Code for such year.
The defined contribution plan fraction for any year is a fraction (a) the numerator of which is
the sum of the "annual additions" to the Participant's Account as of the close of the Year and
(b) the denominator of which is the sum of the lesser of the following amounts determined for
such year and each prior Year of Service with the Employer: (1) the product of 1.25 multiplied
by the dollar limitation in effect under Section 415(c)(1)(A) of the Code for such year (deter-
mined without regard to Section 415(c)(6) of the Code), or (2) the product of 1.4 multiplied by
the amount which may be taken into account under Section 415(c)(1)(B) of the Code for such
year.
At the election of the Trustees, in applying the provision of Section 5.4 with
respect to the defined contribution plan fraction for any Year ending after January 1, 1984, the
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13
amount taken into account for the denominator for each Participant for all Years ending before
December 31, 1983 shall be an amount equal to the product of (a) the amount of the
denominator determined under Section 5.4 (as in effect for the Year ending in 1982) for Years
ending in 1982, multiplied by (b) the "transition fraction."
For purposes of the preceding paragraph, the term "transition fraction" shall
mean a fraction (a) the numerator of which is the lesser of (1) $51,875 or (2) 1.4 multiplied by
twenty-five percent (25%) of the Participant's Compensation for the Year ending in 1981, and
(b) the denominator of which is the lesser of (1) $41,500 or (2) twenty-five percent (25%) of the
Participant's Compensation for the Year ending in 1981.
18.5 Qualified Military Service. Notwithstanding any provision of this Plan to the
contrary, contributions, benefits and service credit with respect to qualified military service will
be provided in accordance with Section 414 (u) of the Internal Revenue Code.
18.6 Return of Contributions. An Employer Contribution which is made by reason of
a mistake of fact, or where the contribution was conditioned upon its deductibility, shall be
returned to the Employer in accordance with this section. The return to the Employer of the
amount involved must be made within one (1) year after:
(a) the Employer made the contribution by mistake of fact; or
(b) the disallowance of the contribution as a deduction, and then, only to the
extent of the disallowance.
ARTICLE XIX. BENEFITS
19.1 Benefits: If a Participant's employment with the Employer is terminated, the
Participant shall be entitled to receive the entire vested amount then in the Participant's
Aggregate Accounts in accordance with Section 6.2. The Employer Contribution Account,
SAW\57133\348247.07 Old Hire Restatement
14
Mandatory Employee Account, Employee Voluntary Contribution Account, Employee
Mandatory Post Tax Contribution Account, and the Employee Rollover Account balance shall
be one -hundred percent (100%) vested at all times.
Upon termination of employment, the Employer shall notify the Trustees in
writing of the name and address of the Participant who has terminated employment. The
Trustees shall determine the amount of the Participant's Aggregate Accounts as calculated
above and shall, subject to the election of the Participant as provided in Section 6.2, distribute
such to the Participant as soon as administratively practicable after the Participant's termination
of employment.
19.2 Payment of Benefits:
(a) Within a reasonable time prior to or following termination of a Participant's
employment for any reason, the Trustees shall provide to the Participant a benefit application
form, which shall describe in plain language the terms and conditions of the optional forms of
benefits described below and which shall be provided for the Participant to indicate his benefit
commencement date, his election of an optional form of benefit, and his Beneficiary or
contingent annuitant. The completed benefit application form should be returned to the
Trustees prior to the Participant's benefit commencement date. If the Participant files another
benefit application form after the first form and prior to his benefit commencement date, the
earlier form shall be deemed annulled.
The Trustees shall follow a Participant's Beneficiary designation and may follow
the method of payment, if any, selected by the Participant in the case of a distribution on
account of the Participant's death.
Payment of a Participant's benefits must commence within a reasonable time
after the Participant's termination of employment. In any event, payment of a terminated
SAW\57133\348247.07 Old Hire Restatement
15
Participant's benefits shall, unless the Participant otherwise elects a later date in writing, begin
not later than the 60th day after the latest of the close of the Year in which (1) the Participant
attains age 55, (2) the occurrence of the 10th anniversary of the year in which the Participant
commenced participation in the Plan, or (3) the Participant terminates employment with the
Employer. Notwithstanding any provision above to the contrary, mandatory minimum
distributions of a Participant's benefits shall commence either during the taxable year in which
he attains age 70-1/2, or the year in which he actually retires, whichever is later. Alternatively,
distributions to a Participant must begin no later than such taxable year and must be made over
the life of the Participant (or lives of the Participant and the Participant's spouse) or over a
period not exceeding the life expectancy of the Participant (or the life expectancies of the
Participant and the Participant's spouse). Distributions (as described above) may be made to a
Participant and a non -spouse Beneficiary provided as the measuring lives remain those of the
Participant and the Participant's spouse.
The methods of payment available to a Participant are as follows:
(1) In a lump sum,
(2) By the purchase of a single -premium nontransferable annuity contract
from a legal reserve life insurance company, with a term and in the form as the Participant, with
the approval of the Trustees, shall determine,
(3) A joint and 50% survivor annuity, or
(4) Periodic payments over a period not exceeding the life expectancy of
the Participant (or the joint life expectancies of the Participant and the Participant's designated
beneficiary), with any amounts remaining in the Plan to receive income and expense allocations
pursuant to Section 5.2(a) and (c).
SAW\57133\348247.07 Old Hire Restatement
16
6. Describe your brokerage account window? Are there any limitations on the types of security or investment
vehicle purchased or sold? What is the additional cost both per participant and per transaction? How are
brokerage account values accounted for on participant statements and on your VRU/Intemet systems?
7. Regarding your stable value fund, supply the following information:
a) Your policies for:
(1) Employee -initiated withdrawals
(2) Employer -initiated withdrawals
(3) Inter -fund transfers
b) Asset allocation
c) Can a money market fund be used in lieu of a stable value fund?
8. Provide evidence of your company's responsiveness to the investment wishes of participants and your
responsiveness to changing market environments.
Cost Proposal
Identify extraordinary one-time start-up costs expected to be incurred.
1. Please provide fees, if any, for:
a) Plan set-up
b) Implementation of:
(1) Voice response
(2) Internet/web site capabilities
(3) Live operators
(4) Investment advice vendors
2. Customized communications materials
3. Customized statements and reports
4. Employee and plan sponsor meetings
5. Any additional start-up or related fees
6. Loan origination fees
7. On -going loan fees
8. QDRO processing fees
9. Enrollment fees
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13
For distributions made on or after January 1, 1993 notwithstanding any provision
of the Plan to the contrary which would otherwise limit a Participant's election under this
section, a Participant may elect, at the time and in the manner prescribed by the Trustees, to
have any portion of an eligible rollover distribution, as defined in Internal Revenue Code
Section 402(c)(4), paid directly to an eligible retirement plan specified by the Participant in a
direct rollover.
Notwithstanding the foregoing, a Participant may elect to defer receipt of the
balance in his Aggregate Account. Such Former Participant shall receive Income allocations
pursuant to Section 5.2(a) and shall have trust expenses deducted pursuant to Section 5.2(c)
until the balance of the Former Participant's Aggregate Account has been distributed. A Former
Participant may make application for distribution of his Aggregate Account in accordance with
the procedures contained in this section. In any event, a distribution option for a Former
Participant's Aggregate Account shall be elected no later than the close of the Year in which the
Former Participant attains age 65.
Notwithstanding any provision herein to the contrary, if the present value of a
Former Participant's Accrued Benefit is less than $5,000, or whatever amount is provided under
Internal Revenue Code Section 411(a)(11)(A), the Plan may distribute the Accrued Benefit
without the Former Participant's consent.
(b) After a Participant attains Normal Retirement Age, the participant, until he
retires, has a continuing election to receive all or any portion of his Accrued Benefit. A
Participant shall make an election under this paragraph (b) on a form prescribed by the Trustees
at any time during the Plan Year for which his election is to be effective. In his written election,
the Participant shall specify the percentage or dollar amount he wishes the Trustees to distribute
to him. Furthermore, the Participant's election shall relate solely to the percentage or dollar
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amount specified in his election form and his right to elect to receive an amount, if any, for a
particular Plan Year greater than the dollar amount or percentage specified in his election form
shall terminate on the Valuation Date. The Trustees shall make a distribution to a Participant in
accordance with his election under this paragraph (b) within the 90-day period (or as soon as
administratively practicable) after the Participant files his written election with the Trustees.
The Trustees shall distribute the balance of the Participant's Accrued Benefit not distributed
pursuant to his election(s) in accordance with the other distribution provisions of this Plan.
19.3 Post -Death Distribution: Notwithstanding any provision herein to the contrary,
where distributions did commence before death, distributions must continue to be made at least
as rapidly as the deceased elected.
Where distributions did not commence before death, benefits shall be distributed
within the five year period following the date of death unless (i) a portion of benefits is payable
to a designated Beneficiary, and that portion will be distributed over the life of the Beneficiary,
and distributions commence no later than 1 year after the date of death; and/or (ii) a portion of
the benefits is to be paid to the surviving spouse and is distributed over the life of, or a period
not exceeding the life of, the spouse, and the distributions commence no later than the date on
which the Employee would have attained age 70-1/2.
19.4 Designation of Beneficiary: Each Participant from time to time may designate
any person or persons (who may be designated contingently or successively and who may be an
entity other than a natural person) as his Beneficiary or Beneficiaries to whom his Plan benefits
are paid if he dies before receipt of all such benefits. Each Beneficiary designation shall be in
the form prescribed by the Trustees and will be effective only when filed with the Trustees
during the Participant's lifetime. Each Beneficiary designation filed with the Trustees will
cancel all Beneficiary designations previously filed with the Trustees.
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If any Participant fails to designate a Beneficiary in the manner provided above,
or if the Beneficiary designated by a deceased Participant dies before him or before complete
distribution of the Participant's benefits, the Trustees, in their discretion, may distribute such
Participant's benefits (or the balance thereof) pursuant to Colorado law.
19.5 Distributions Under Domestic Relations Order. Nothing contained in this
Plan prevents the Trustees from complying with the provisions of a domestic relations order
pursuant to C.R.S. § 14-10-113. A distribution to an alternate payee shall be made as soon as
administratively practicable after the Trustees determines that an order submitted to the Plan
complies with the terms of C.R.S. § 14-10-113, and shall be in the form of a lump sum.
19.6 Direct Transfers and Rollovers. This section applies to distributions made on or
after January 1, 1993. Notwithstanding any provision of the Plan to the contrary that would
otherwise limit a distributee's distribution election under this Article, a distributee may elect, at
the time and in the manner prescribed by the Trustee, to have any portion of an eligible rollover
distribution paid directly to an eligible retirement plan specified by the distributee in a direct
rollover.
An eligible rollover distribution is any distribution of all or any portion of the
balance to the credit of the Participant, except that an eligible rollover distribution does not
include: (i) any distribution that is one of a series of substantially equal periodic payments (not
less frequently than annually) made for the life (or life expectancy) of the distributee or the joint
lives (or joint life expectancies) of the distributee and the distributee's designated Beneficiary,
or for a specified period of ten years or more; (ii) any distribution to the extent such distribution
is required under Code Section 401(a)(9); and (iii) the portion of any distribution that is not
includible in gross income (determined without regard to the exclusion for net unrealized
appreciation with respect to employer securities).
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An eligible retirement plan is an individual retirement account described in Code
Section 408(a), an individual retirement annuity described in Code Section 408(b), an annuity
plan described in Code Section 403(a), or a qualified trust described in Code Section 401(a) that
accepts the distributee's eligible rollover distribution. However, in the case of an eligible
rollover distribution to the surviving spouse, an eligible retirement plan is an individual
retirement account or individual retirement annuity.
A distributee includes an Employee or former Employee. In addition, the
Employee's or former Employee's surviving spouse and the Employee's or former Employee's
spouse or former spouse who is the alternate payee under a qualified domestic relations order,
as defined in Code Section 414(p), are distributees with regard to the interest of the spouse or
former spouse.
A direct rollover is a payment by the Plan to the eligible retirement plan
specified by the distributee.
The Trustees may establish procedures for the distribution of eligible rollover
distributions, including any limitations on the amount eligible for a rollover distribution, to the
extent permitted by law.
ARTICLE XX. THE TRUST AND TRUST FUND
20.1 Contributions to Trust: All contributions under this Plan shall be paid to the
Trustees and deposited in the Trust Fund. All assets of the Trust Fund, including investment
income, shall be retained for the exclusive benefit of Participants, Former Participants, and
Beneficiaries and shall be used to pay benefits to such persons or to pay administrative expenses
of the Plan and Trust Fund to the extent not paid by the Employer and shall not revert to or
inure to the benefit of the Employer.
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Notwithstanding anything herein to the contrary, upon the Employer's request, a
contribution which was made by a mistake of fact shall be returned by the Trustees to the
Employer within one year after the payment of the contribution.
20.2 Participant Direction of Investment: The investment of Trust funds hereunder is
governed by the provisions of C.R.S. §31-30.5-803(2). To the extent allowed by the Trustees,
each Participant shall exercise control of the investment of the Participant's individual
Aggregate Account under the Plan. The Trustees shall select at least three investment
alternatives, each of which is diversified in itself, that allow the Participant a broad range of
investments and a meaningful choice between risk and return in the investment of the
Participant's individual Aggregate Account. The Trustees shall allow each Participant to change
investments at least once each calendar quarter. The Trustees shall provide the Participant with
information describing the investment alternatives, and the nature, investment performance,
fees, and expenses of the investment alternatives and other information to assist a Participant in
making informed investment decisions. The Trustees may establish written procedures for
Participant direction of investment under this Plan. The Trustees are not liable for any loss, nor
are they liable for any breach resulting from a Participant's control and/or direction of the
investment of any part of the Participant's individual Aggregate Account. Moreover, the
Trustees may decline to implement participant instructions which would result in a prohibited
transaction or would generate income which would be taxable to the Plan.
As of each Valuation Date, all Participant -directed accounts shall be charged or
credited with the net earnings, gains, losses and expenses as well as any appreciation or
depreciation in the market value using publicly -listed fair market values when available or
appropriate.
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(a) To the extent that the assets in a Participant's directed account are
accounted for as pooled assets or investments, the allocation of earnings, gains and losses of
each Participant's directed account shall be based upon the total amount of funds so invested, in
a manner proportionate to the participant's share of such pooled investment.
(b) To the extent that the assets in the Participant's account are accounted for
as segregated assets, the allocation of earnings, gains and losses from such assets shall be made
on a separate and distinct basis.
20.3 Trustees' Powers and Duties: To the extent funds held by the Trust are not
invested pursuant to Participant direction as provided in Section 7.2 hereof, it shall be the duty
of the Trustees to hold the funds from time to time received by it from the Employer, to
manage, invest and reinvest the Trust Fund and the income therefrom pursuant to the provisions
hereinafter set forth, without distinction between principal and income. The Trustees shall be
responsible only for such sums as shall be actually received by it as Trustees. The Trustees
shall have no duty to collect any sums from the Employer or the Participants.
The Trustees shall have the power to invest and/or reinvest any and all money or
property of any description at any time held by it and constituting a part of the Trust Fund,
without previous application to, or subsequent ratification of, any court, tribunal or commission,
or any federal or state governmental agency, in accordance with the following powers:
(a) With regard to its investments, the Trustees may invest and reinvest any
and all money or property constituting the Trust Fund subject to the Uniform Prudent Investor
Act, Article 1.1, of Title 15, C.R.S., in investments, including, but not limited to, obligations of
the United States government and in obligations fully guaranteed as to principal and interest by
the United States government, in state and municipal bonds, in corporate notes, bonds or
debentures, convertible or otherwise, in railroad equipment trust certificates, in real property
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and in loans secured by first mortgages or deeds of trust on real property, in participation
guarantee agreements with life insurance companies, in real estate limited partnerships, or
limited liability companies, and in other types of investment agreements, and the foregoing
investments may be made without limitation as to the percentage of the book value of the assets
of the retirement fund so invested. Investments may also be made in either common or
preferred corporate stocks.
(b) The Trustees, in the matter of the investment of the Trust Fund, shall be
held harmless in every respect in exercising its discretion as to how much of the Trust Fund
shall remain uninvested and in cash temporarily awaiting investment or for the expected cash
distributions out of the Trust Fund in accordance with the provisions of this Plan.
(c) The Trustees may cause any part of the money or other property of the
Trust to be commingled with the money or property of trusts created by others causing such
assets to be invested as part of a pooled pension and profit sharing fund. In addition, any
portion of the Trust assets may be invested in any other collective investment fund approved by
the Trustees as an investment option, the terms of such collective investment trust shall be
incorporated as part of this Plan and Trust upon approval of the Trustees.
(d) The Trustees from time to time shall determine the immediate and long-
term financial requirements of the Plan and on the basis of such determination, establish a
policy and method of funding which will enable the Trustees or the investment manager or
managers, if any, to coordinate the investment policies of the Plan's funds with the objectives
and financial needs of the Plan.
(e) The Trustees may delegate its investment responsibilities to an
Investment Manager pursuant to Section 7.5 or permit Participants to direct the investment of
their Aggregate Accounts pursuant to Section 7.2.
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20.4 Further Powers of the Trustees: The Trustees shall have all powers necessary or
advisable to carry out the provisions of this Plan and Trust Agreement and all inherent, implied
and statutory powers now or hereafter provided by law, including specifically the power to do
any of the following:
(a) To cause any securities or other property to be registered and held in its
name as Trustees, or in the name of one or more of its nominees, without disclosing the
fiduciary capacity, or to keep the same in unregistered form payable to bearer.
(b) To sell, grant options to sell, exchange, pledge, encumber, mortgage,
deed in trust, or use any other form of hypothecation, or otherwise dispose of the whole or any
part of the Trust Fund on such terms and for such property or cash, or part cash and credit, as it
may deem best and it may retain, hold, maintain or continue any securities or investments which
it may hold as part of the Trust Fund for such length of time as it may deem advisable, and
generally, in all respects, the Trustees may do all things and exercise each and every right,
power and privilege in connection with and in relation to the Trust Fund as could be done,
exercised or executed by an individual holding and owning said property in absolute and
unconditional ownership.
(c) To abandon, compromise, contest and arbitrate claims and demands; to
institute, compromise and defend actions at law (but without obligation to do so); as the
Trustees shall deem advisable; all at the risk and expense of the Trust Fund.
(d) To borrow money for this Trust upon such terms and conditions as the
Trustees shall deem advisable, and to secure the repayment thereof by the mortgage or pledge of
any assets of the Trust Fund.
(e) To vote in person or by proxy any shares of stock or rights held in the
Trust Fund; to participate in reorganization, liquidation or dissolution of any corporation, the
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securities of which are held in the Trust Fund and to exchange securities or other property in
connection therewith.
(f) To pay any amount due on any loan or advance made to the Trust Fund,
all taxes of any nature levied, assessed or imposed upon the Trust Fund, and all reasonable
expenses and attorney fees necessarily incurred by the Trustees with respect to any of the
foregoing matters.
(g) To defend any suit or legal proceedings against the Trust and the Trustees
may sue or bring legal proceedings against any party or parties, compromise, submit to
arbitration, or settle any suit or legal proceeding, claim, debt, damage or undertaking due or
owing from or to the Trust Fund. In the administration of the Fund, the Trustees shall not be
obligated to take any action which would subject them to any expense or liability unless they be
first indemnified in an amount and in the manner satisfactory to the Trustees or to be furnished
with funds sufficient, in the sole judgment of the Trustees, to cover such expenses.
20.5 Investment Manager: To the extent funds held by the Trust are not invested
pursuant to Participant direction as provided in Section 7.2 hereof, the Trustees may appoint one
or more Investment Managers to exercise the power of the Trustees to direct the investment and
reinvestment of the Trust Fund, pursuant to the provisions of Section 7.3 of this Plan and Trust.
Such appointment shall be made in writing and accepted by the Investment Manager, a copy of
which shall be delivered to the Trustees and may be revoked by the Trustees by written notice
delivered to the Investment Manager. The Investment Manager shall receive such
compensation and reimbursement for expenses as shall be agreed upon from time to time by the
Trustees and the Investment Manager which shall be paid, in whole or in part by the Employer,
and any amount thereof not paid by the Employer shall be paid by the Trustees out of the
principal or income of the Trust. The Investment Manager shall discharge his duties relating to
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the investment and reinvestment of the Trust Fund in conformity with Article VII of this Plan
and shall be subject to the liabilities therein stated insofar as his duties are concerned. The
Trustees shall not be liable with respect to acts or omissions of the Investment Manager, or be
under an obligation to invest or otherwise manage any assets of the Plan or Trust Fund which
are subject to the management of the Investment Manager, except insofar as they shall be liable
for the breach of co -fiduciaries pursuant to Article IX hereof.
20.6 Claims Procedure: The Trustees shall make all determinations as to the right of
any person to a benefit. Any denial by the Trustees of the claim for benefits under the Plan by a
Participant or Beneficiary shall be stated in writing by the Trustees and delivered or mailed to
the Participant or Beneficiary; and such notice shall set forth the specific reasons for the denial,
reference pertinent Plan provisions, describe any additional information needed and the steps to
be taken to submit the claim for review, all written to the best of the Trustees' ability in a
manner that may be understood without legal or actuarial counsel. Should a Participant or
Beneficiary receive no response to his claim for benefits within 90 days of making the claim, it
shall be deemed to be denied and the Participant or Beneficiary may proceed to have the claim
reviewed. The claimant may, within 60 days after receiving such denial notice, request a repeal
of the denial in writing, submit issues and comments, and may review pertinent documents.
The Trustees shall reach a decision as to the claimant's appeal not later than 60 days after
receiving the request for review.
20.7 Records and Reports: The Trustees shall exercise such authority and
responsibility as it deems appropriate relating to records of Participant's Service, account
balances and the percentage of such account balances which are non -forfeitable under the Plan;
and notifications to Participants.
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10. Rollover fees
11. Distribution fees
12. Trustee fees
13. Fees for managing the stable value fund
Participant Communications
1. Fully describe how you will charge for the preparation of materials and training sessions. Provide a fee for the
first year and subsequent years, including licensing fees, if any.
2. Provide the hourly rate that would be assessed for ad hoc communication services that the plan may request.
Administrative, Recordkeeping and Investment Management
1. Fully describe all ongoing fees and charges as requested in the Statement of Plan Services in the Statement of
Work. Information should include, but not be limited to, the following:
a) Do you charge a base fee, a fixed per participant fee or an asset -based fee?
b) List all annual fees for each of the funds the plan intends to offer broken out by type of fee. Include the
internal expense ratio of the fund, administration fees charged by your firm, custody fees charged by your
firm, mortality expense asset charges (M&E) charged by your firm and any other fee that applies. Will any
of the investment fees be rebated to cover administrative costs? If so, please include a separate column
for the rebate amount.
c) If the plan were to replace a fund in their current line-up with a non -revenue sharing fund, how much would
you charge on those assets?
d) What dollar amount or percentage of revenue sharing earned will be rebated back to Poudre Fire to pay
additional plan costs (legal, consulting, audit, etc.).
2. Describe all transaction fees and restrictions:
a) Identify all charges and restrictions associated with processing contributions.
b) Identify every expense for each form of disbursement or benefit payment and the conditions under which
the charge would apply.
3. Are there any additional costs that have not been addressed (e.g., custody, trustee, transfers, trading, online
advice, transactions, etc.)? If so, please outline those costs completely.
4. Identify all fees related to contract termination.
5. How long do you guarantee your pricing?
6. Are your fees negotiable?
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14
20.8 Other Administrative Powers and Duties: The Trustees shall also have such
duties and powers as may be necessary to discharge its duties hereunder, including, but not by
way of limitation, the following:
(a) To construe and interpret the Plan, decide all questions of eligibility and
determine the amount, manner and time of payment of any benefits hereunder;
(b) To prescribe procedures to be followed by Participants or Beneficiaries
filing applications for benefits;
(c) To prepare and distribute, in such manner as it determines to be
appropriate, information explaining the Plan;
(d) To receive from the Employer and from Participants such information as
shall be necessary for the proper administration of the Plan;
(e) To furnish the Employer, upon request, such annual reports with respect
to the administration of the Plan as are reasonable and appropriate;
(f) To receive, review and keep on file (as they deem convenient or proper)
reports of the financial condition, and of the receipts and disbursements, of the Trust Fund;
(g) To appoint or employ individuals to assist in the administration of the
Plan and any other agents they deem advisable, including legal, investment, custodial, third -
party administrators and actuarial counsel.
The Trustees shall have no power to add to, subtract from or modify any of the
terms of the Plan, or to change or add to any benefits provided by the Plan, or to waive or fail to
apply any requirements of eligibility for a benefit under the Plan. No member of the Trustees
shall act upon his own application for a benefit under the Plan.
20.9 Rules and Decisions: The Trustees may adopt such rules as it deems necessary,
desirable, or appropriate. All rules and decisions of the Trustees shall be uniformly and
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consistently applied to all Participants in similar circumstances. When making a determination
or calculation, the Trustees shall be entitled to rely upon information furnished by a Participant
or Beneficiary, the Employer or the legal counsel of the Employer.
20.10 Benefit Payments: The Trustees shall pay all benefits from the Trust Fund
pursuant to the provisions of the Plan.
20.11 Application and Forms for Benefits: The Trustees may require a Participant to
complete and file with the Trustees an application for a benefit and all other forms approved by
the Trustees and to furnish all pertinent information requested by the Employer. The Trustees
may rely upon all such information so furnished it, including the Participant's current mailing
address.
20.12 Indemnification: To the extent allowed by law, the Employer shall indemnify
and hold harmless the Trustees from any and all claims, losses, damages, expenses (including
counsel fees approved by the Trustees), and liabilities (including any amounts paid in settlement
with the Trustees' approval) arising from any act or omission of the Trustees, except when the
same is judicially determined to be due to the gross negligence or willful misconduct of such
Trustees.
20.13 Loans to Participants:
(a) General Rules: The Trustees, in accordance with a uniform and
nondiscriminatory policy, may make a loan to any Participant who remains actively employed
with the Employer and who makes a written request for such a loan. The Trustees will
promulgate rules and procedures regarding Participant loans. No loan to a Participant may
exceed the Participant's vested Accrued Benefit. In addition, a loan, when added to the
outstanding balance of all other loans to the Participant from this and any other qualified Plan
maintained by the Employer, may not exceed the lesser of: (1) $50,000 less the excess of the
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IT.
highest outstanding balance of loans from the Plan during the one-year period ending on the day
before such loan is made over the outstanding balance of loans from the Plan on the day such
loan is made; or (2) the greater of one-half of the value of the Participant's vested Accrued
Benefit as of the last preceding valuation date or $10,000.
(b) Security and Interest: All loans will be adequately secured and will bear a
rate of interest considered reasonable on the date the loan was made. Participant loans will be
considered a Participant -directed investment under Section 7.2 of the Participant requesting the
loan and interest paid on the loan will be allocated to the account of the Participant -borrower.
(c) Term of Loan: Any loan must be repaid in level payments of principal and
interest at least quarterly within five years of the date on which it was made or on the
occurrence of any event that renders the Participant's Account distributable, whichever occurs
first. However, any loan verified by the Trustees as used to acquire any dwelling unit used or to
be used within a reasonable time as the principal residence of the Participant must be repaid
within the time prescribed by the Trustees, or upon distribution of the Participant's Account,
whichever occurs first. If a Participant does not repay a loan within the time prescribed, in
addition to enforcing payment through any legal remedy, the Trustees may deduct the total
amount of the loan and any unpaid interest due on it from the Participant's Account when the
Account becomes distributable under the Plan.
20.14 Payment of Expenses and Fees: The expenses of administration of the Trust
incurred by the Trustees, including legal counsel and consulting fees and other charges, shall be
paid by the Employer and if not paid by the Employer, then from the Trust Fund. The Trustees
shall receive in addition to all their expenses, such compensation that may be agreed upon from
time to time by the Employer and the Trustees. However, if any Trustee is already receiving
compensation from the Employer, as a full-time Employee they shall not also receive
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compensation as a member of the Trustees. If and to the extent that the Employer does not pay
such compensation or expense, it shall be paid from the Trust Fund.
20.15 Protection of the Trustees: The Trustees shall not incur any liability by reason of
taking any action indicated by this instrument to be within the scope of the authority of an
Investment Manager appointed by the Trustees in accordance with any written instrument
purporting to be signed by such person or persons authorized to sign for the Investment
Manager, or in reliance upon a certified copy of a resolution of the Trustees, any of which the
Trustees, in good faith, believe to be genuine. The Trustees may consult with counsel, who may
be counsel for the Employer, in respect to any of its duties or obligations hereunder and shall be
fully protected in acting or refraining from acting in accordance with the advice of such counsel.
The Trustees shall incur no liability for any loss to or depreciation in value of the
Trust Fund or for any act done or omitted to be done in the administration of the Trust, except
for breach of its fiduciary duty as set forth in this instrument. The Trustees shall be indemnified
and saved harmless by the Employer from and against any and all liability arising from breach
of its fiduciary duty, as provided in Section 7.12, including all expenses reasonably incurred in
its defense, in case the Employer fails to provide such defense.
20.16 Accounts of the Trustees: The Trustees shall maintain accurate records and
accounts of all transactions hereunder, which shall be available at all reasonable times for
inspection or audit by any person or persons designated by the Employer. The Trustees at the
direction of the Employer shall submit to the auditors for the Employer such valuations, reports
or other information as they may reasonably require. As of December 31st of each fiscal Year
(i.e., the Valuation Date) the Trustees shall value the Trust Fund at its fair market value. The
Trustees shall furnish a copy of such valuation to the Employer as soon as possible. Any
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valuation by the Trustees shall be conclusive and binding on any persons having an interest
hereunder.
ARTICLE XXI. TRUSTEES
21.1 Trustees: The Trustees shall be made up of four (4) members composed initially
as follows: two (2) members appointed by the Employer and two (2) members who are
Employees that are duly elected by the Participants to be Trustees of the Plan. The Trustees
shall serve initial terms of office as follows: two (2) Employer members and one (1) Employee
member shall each serve a term of three (3) years and one (1) Employee member shall serve a
term of two (2) years. Successors shall each serve a term of three (3) years and shall become
Trustees in the following manner: the Employer shall appoint successors to its member
positions and successor Employee members shall be elected by a plurality vote of active
Participants. The Trustees shall make all decisions in a non-discriminatory manner.
An Employee member of the Trustees may resign at any time upon giving
written notice thereof by registered or certified mail, hand delivery, or by telegram or telefax to
the Employer. Upon termination of employment of an Employee representative member of the
Trustees, such person's membership on the Trustees shall terminate and a successor shall be
appointed in accordance with this Section 8.1 to fill the remaining unexpired term of such
Trustee. Such resignation shall become effective forthwith upon the receipt of such written
notice by the Employer. Each successor Trustee appointed as provided in Section 8.1 shall
upon succeeding as a Trustee be vested with all of the rights, powers and discretions herein
vested in and imposed upon the Trustees. Upon the removal, resignation or expiration of the
term of any Trustee, he shall cause to be delivered to the Trustees any Trust property or records
then in his possession. No successor Trustee shall have any duty to examine the accounts or
doings of his predecessors. Any successor Trustee shall be responsible only for the money and
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property known to him to comprise the principal and income of the Fund and shall in no way be
liable or responsible for anything done or omitted to have been done by his predecessors.
21.2 Use of Corporate Trustee: At any time and from time to time the Trustees may
appoint, as Corporate Trustee, a bank or trust company located in the United States which has
capital and surplus aggregating not less than $50,000,000.00, as shown by its last published
statement. The Trustees may delegate to the Corporate Trustee (i) the power to hold all or any
part of the Trust Fund as sole trustee of a trust separate from the Trust created by this
Agreement (and not as agent of the Trustees or as Co -Trustee hereunder with the Trustees),
(ii) the power to invest and reinvest the Trust Fund in the Corporate Trustee's sole discretion,
and (iii) such other duties and powers as the Trustees may deem advisable. The Trustees may
enter into and execute a trust agreement with the Corporate Trustee, which agreement shall
contain such provisions as the Trustees may deem advisable. The Corporate Trustee shall have
no obligations under this Agreement or under the Plan and its powers and duties shall be limited
to those set forth in the agreement between it and the Trustees. Upon execution of an agreement
with the Corporate Trustee, the Trustees may transfer and convey to the Corporate Trustee any
part or all of the assets of the Trust Fund acceptable to the Corporate Trustee, and thereupon,
the Trustees shall be forever released and discharged from any responsibility or liability with
respect to the assets so transferred as to any period subsequent to such transfer and with respect
to the investment and reinvestment thereof by the Corporate Trustee during the time the Trust
Fund is in the hands of the Corporate Trustee. Notwithstanding such transfer, the Trustees shall
continue to carry out its administrative functions under the Plan in accordance with the
provisions of the Plan and Trust Agreement.
Any Corporate Trustee appointed as provided in this section may be removed at
any time, with or without cause, by majority vote of the Trustees and upon written notice
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thereof being furnished to such Corporate Trustee as provided by the terms of the Corporate
Trustee Agreement previously entered into by the Trustees with such Corporate Trustee. If and
when so removed, such Corporate Trustee shall cause to be transferred to the Trustees any and
all Trust property, assets and records then in its possession.
21.3 Officers: The officers of the Board of Trustees shall be selected annually at the
first regularly -called meeting in each fiscal year by the Trustees from among themselves and
shall serve until their successors have been selected and qualified. The officers shall include a
Chairman and Secretary.
21.4 Officer Responsibilities: The Chairman shall be responsible for the conduct of
the meeting. The Secretary shall keep minutes or records of all meetings, proceedings and acts
of the Trustees and shall make these available to all Trustees. The Chairman and the Secretary
shall jointly execute written documents and instruments authorized by the Trustees.
21.5 Annual Meeting: An annual meeting of the Trustees shall be held for the
purpose of selecting officers for the ensuing year. The date and place of the annual and regular
meetings shall be fixed by Resolution of the Trustees. Special meetings may be called by the
Chairman or Secretary or any three (3) other Trustees by giving to each Trustee at least ten (10)
days' written notice of time and place of such meeting; or may be held without notice if all
Trustees consent in writing, or if the Trustees in attendance constitute a quorum and they agree
to waive notice by their attendance.
Whenever any notice is required to be given to any Trustee hereunder, a waiver
thereof in writing, signed at any time, whether before or after the time of meeting, by the
Trustees entitled to such notice, shall be deemed equivalent to the giving of such notice. The
attendance of a Trustee at a meeting shall constitute a waiver of notice of such a meeting, except
where a Trustee attends a meeting and objects prior to the first order of business to the
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33
transaction of any business upon the ground that the meeting was not lawfully called or
convened.
21.6Quorum: Three (3) Trustees, at least one representing the Employer and one
representing the Employees, present in person shall constitute a quorum for the transaction of
business at any meeting.
21.7 Majority Vote: All decisions of the Trustees shall be made by majority vote of
the Trustees present at the meeting at which such vote is taken.
ARTICLE XXII. FIDUCIARIES
22.1 Fiduciaries: The Fiduciaries shall have only those specific powers, duties,
responsibilities and obligations as are specifically given them under this Plan or the Trust. In
general, the Employer shall have the responsibility for making the contributions provided for
under Section 4.1. The Trustees shall have the sole responsibility for the administration of this
Plan, which responsibility is specifically described in this Plan and Trust. The Trustees shall
have the sole responsibility for the administration of the Trust and the management of the assets
held under the Trust. Each Fiduciary warrants that any directions given, information furnished,
or action taken by it shall be in accordance with the provisions of the Plan and Trust authorizing
or providing for such direction, information or action. Furthermore, each Fiduciary may rely
upon any such direction, information or action of another Fiduciary as being proper under this
Plan and Trust, and is not required under this Plan and Trust to inquire into the propriety of any
such direction, information or action. It is intended under this Plan and Trust that each
Fiduciary shall be responsible for the proper exercise of its own powers, duties, responsibilities
and obligations under this Plan and Trust and shall not be responsible for any act or failure to
SAW\57133\348247.07 Old Hire Restatement
34
act of another Fiduciary. No Fiduciary guarantees the Trust Fund in any manner against
investment loss or depreciation in asset value.
The following will cause a person to be classified as a "Fiduciary" for purposes
of this Plan and Trust: (1) Exercise of any discretionary authority or discretionary control
respecting the management or disposition of Plan or Trust assets, (2) rendering any investment
advice for a fee or other compensation, or (3) exercise of any discretionary authority or
responsibility for Plan or Trust administration.
22.2 General Fiduciary Duties: All Fiduciaries must discharge their duties solely in
the interest of the Employees eligible to participate and Beneficiaries of the Plan. In addition,
Fiduciaries must act exclusively for the purpose of providing benefits to Employees eligible to
participate and Beneficiaries and defraying reasonable expenses of the Plan. They must carry
out their duties with the care, skill, prudence and diligence which a prudent man acting in a like
capacity would use under conditions prevailing at the time. To the extent funds held by the
Trust are not invested pursuant to Participant direction as provided in Section 7.2 hereof,
investments of the Plan shall be diversified so that the risk of loss will be minimized unless this
clearly is not prudent under the circumstances. However, investment in pooled funds will not
violate the diversification rule if the Fund itself is sufficiently diversified.
22.3 Bonding and Insurance: The Trustees, any Investment Manager appointed
pursuant to Section 7.5, and anyone acting as a Fiduciary as described in this Article IX, may be
bonded. The Employer shall obtain Errors and Omissions Insurance in a minimum amount of
$1,000,000 or such higher amount that they deem advisable to protect the Trust Fund.
However, if the Employer does not provide the appropriate amount of insurance, the Trustees
may obtain Errors and Omissions Insurance for such amount as they deem advisable to protect
SAW\57133\348247.07 Old Hire Restatement
W,
the Trust Fund. Such insurance and bond premiums and fees may be paid as an expense of the
Trust pursuant to Section 7.14.
22.4 Delegation of Authority: The Trustees shall have the power to delegate specific
fiduciary responsibilities with respect to the control and management of the assets of the Trust
and with respect to the administration of the Plan and Trust by a written agreement between the
Trustees and any such designated person or entity.
ARTICLE XXIII. MISCELLANEOUS
23.1 Nonguarantee of Employment: Nothing contained in this Plan shall be construed
as a contract of employment between the Employer and any Employee, or as a right of any
Employee to be continued in the employment of the Employer, or as a limitation of the right of
the Employer to discharge any of its Employees.
23.2 Rights to Trust Assets: No Employee or Beneficiary shall have any right to, or
interest in, any assets of the Trust Fund upon termination of his employment or otherwise,
except as provided from time to time under this Plan, and then only to the extent of the benefits
payable under the Plan to such Employee out of the assets of the Trust Fund. All payments of
benefits as provided for in this Plan shall be made solely out of the assets of the Trust Fund and
none of the Fiduciaries shall be liable therefor in any manner.
23.3 Nonalienation of Benefits: Except for assignments for child support purposes as
provided for in sections 14-10-118(1) and 14-14-107, C.R.S., as they existed prior to July 1,
1996, for income assignments for child support purposes pursuant to section 14-14-111.5,
C.R.S., for writs of garnishment that are the result of a judgment taken for an earages for child
support or for child support debt, and for payments made in compliance with a properly
executed court order approving a written agreement entered into pursuant to section 14-10-
113(6), C.R.S., benefits payable under this Plan shall not be subject in any manner to
SAW\57133\348247.07 Old Hire Restatement
36
Contract Provisions
Please provide a copy of a standard contract for a plan similar to Poudre Fire. Please review Poudre Fire's
standard contract terms (attached) and comment on your ability to incorporate their terms. Please comment on
your flexibility in incorporating client changes or additions, including ability to include service standards with
monetary damages paid back to the plan for non-compliance.
2. Are you able to comply with the term of the contract being no longer than 3 years and after the initial term,
termination can be made by either party, with or without cause with 60 days notice?
3. Describe any conditions or exceptions that your company must impose. Note that it is not expected that any
significant required conditions or exceptions to the services required under the RFP will be accepted.
SA 10/01
15
anticipation, alienation, sale, transfer, assignment, pledge, encumbrance, charge, garnishment,
execution, or levy of any kind, either voluntary or involuntary, prior to actually being received
by the person entitled to the benefit under the terms of the Plan, and any attempt to anticipate,
alienate, sell, transfer, assign, pledge, encumber, charge or otherwise dispose of any right to
benefits payable hereunder, shall be void. The Trust Fund shall not in any manner be liable for,
or subject to, the debts, contracts, liabilities, engagements or torts of any person entitled to
benefits hereunder. The Trust Fund shall be held and distributed for the purpose of this article
and for no other purpose whatsoever.
23.4 Payments to Minors or Persons of Unsound Mind: If any person entitled to
receive any payment hereunder is a minor, or a person of unsound mind, whether formally
adjudicated so or not, such payment shall be made to or for the benefit of such minor or person
of unsound mind in any of the following ways, as the Trustees, in its sole discretion, shall
determine: (a) to the legal representative of such person; (b) directly to such person; (c) to some
near relative of such person; (d) in such other manner as the Trustees may deem appropriate
under the circumstances. The Trustees shall not be required to see to the proper application of
any such payment made to any person pursuant to the provisions of this Section.
23.5 Disposition of Unclaimed Payments: If the Trustees are unable to make any
payment due under the Plan to any person because they cannot ascertain the identity or
whereabouts of such person after making such written or telephonic inquiries as the Trustees, in
their sole discretion, deem reasonable, the Trustees shall suspend all further payments to such
person until he makes his identity or whereabouts known to the Trustees within seven (7) years
after such payment was due. The Trustees shall declare such payment, and all remaining
payments due such person, to be forfeited as of the expiration of such seven-year period.
SAW\57133\348247.07 Old Hire Restatement
37
23.6 Severability of Provisions: If any provision of this Plan is held to be invalid or
unenforceable, such invalidity or unenforceability shall not affect any other provisions, and this
Plan shall be construed and enforced as if such provision had not been included.
23.7 Trust and Plan to be Tax Exempt: The Trust and the Plan are intended to qualify
under Internal Revenue Code Section 401(a) and to be tax exempt under Section 501(a),
respectively, and is a "Governmental Plan" within the meaning of Section 414(d) of the Internal
Revenue Code of 1986, as amended from time to time and Section 3(32) of the Employee
Retirement Income Security Act of 1974. The Plan and Trust have been established with the
expectation that the Trust will be irrevocable and in the belief that the Plan and Trust will be
approved by the Internal Revenue Service, as meeting the requirements of the Internal Revenue
Code of 1986 and the Regulations issued thereunder with respect to qualified employee benefit
plans.
ARTICLE XXIV. AMENDMENT OR TERMINATION OF THE PLAN
24.1 Right and Restrictions: The Employer reserves the right, with the approval of at
least sixty-five percent (65%) of the total votes cast by actively -employed eligible Employees
and all former employees who are entitled to a benefit from the Plan, to amend (retroactively or
otherwise) or terminate the Plan, in whole or in part, or to discontinue contributions thereunder,
provided that no amendment shall have the effect of (1) diverting for the benefit of any persons,
other than Participants or their Beneficiaries, amounts attributable to contributions by the
Employer, or (2) decreasing the nonforfeitable percentage or amount in any Participant's
Aggregate Account. Notwithstanding the foregoing, the Employer shall have the right to amend
the Plan without the approval of Participants, solely for the purpose of incorporating minor,
technical amendments which are required, from time to time, by changes in state or federal laws
SAW\57133\348247.07 Old Hire Restatement
W
or regulations. On the complete or partial termination of the Plan or complete discontinuance
by the Employer of contributions under the Plan, the Accrued Benefit of each of the affected
Participant's Aggregate Accounts shall be nonforfeitable and shall be distributed pursuant to
Section 6.2.
24.2 Merger or Consolidation of the Plan: In the event of any merger or consolidation
of the Plan with, or transfer of assets or liabilities of the Plan to, any other plan, each Participant
shall be entitled to receive a benefit immediately after such merger, consolidation or transfer
(determined as if such other plan had then terminated) which is equal to or greater than the
benefit he would have been entitled to receive immediately before such merger, consolidation or
transfer (if the Plan had then terminated).
ARTICLE XXV. GOVERNING LAW
The Trust contained herein shall be deemed executed and governed under the laws of the
State of Colorado. Should any provision of the laws of the State of Colorado be in conflict with
the express powers, duties and responsibilities of the Trustees as set forth in this instrument, in
such event the law shall control. For the convenience of the parties hereto, this Plan and Trust
Agreement may be executed in multiple identical counterparts, each of which is complete in
itself and may be introduced in evidence or used for any other purpose without the production
of any other counterpart.
SAW\57133\348247.07 Old Hire Restatement
39
This Plan document is the Restated Poudre Fire Authority Old Hire Money Purchase
Pension Plan and Trust Agreement effective December 24, 2001.
ATTEST:
EMPLOYER
POUDRE FIRE AUTHORITY
By:
Its:
TRUSTEES
SAW\57133\348247.07 Old Hire Restatement
.m
06/10/2004 07:40 FAX 14157721111 T ROWE PRICE Q 002
Poudre Fire Authority Vendor Qualifications
Experience
• Vendor must have public plan experience. Vendors with Colorado public plan experience are preferred.
• Vendors must have experience with plans with similar asset and participant levels. The majority of
vendor plans must be in the $20 million to $200 million range.
Investments
• Open universe of fund offerings. At least 50% of the funds offered must be non-proprietary funds.
• All investments will be offered on a share basis, not a unit basis and will be purchased at NAV.
• A stable value fund may be offered as part of the investment menu, however, no market value
adjustment on either participant or plan level withdrawals will be allowed.
Costs
• The Fire District realizes their plan is very attractive for vendors due to the high average account
balances in the plan. A preferred vendor will refund to the plan revenue sharing in excess of their fee to
pay for additional plan costs (legal, consulting, audit, etc.).
Education
• Investment advice must be offered. The preferred provider will have the ability to offer advice from both
In -person, salaried representatives and computer based systems.
• Vendors will be required to offer quarterly participant meetings on site at the various fire houses In Fort
Collins for two days each quarter in order to have access to all shifts. In addition, general education
meetings will be provided for new hires as requested, but shall not be more than 2 per year. Also,
retirement planning seminars by CFP or similarly accredited professionals will be provided at least once
per quarter. Participants should also have phone access to CFP's for routine questions.
Contract Provisions
• Service standards with monetary damages paid back to the plan for non-compliance will be included In
the contract. Vendors must have the flexibility to Include these negotiated service standards in their
contract, as well as other reasonable requests of the City of Fort Collins Purchasing department.
• The term of the contract will be no longer than 3 years and after the initial term, termination can be
made by either party, with or without cause with 60 days notice. No contract termination fees will be
allowed.
Any questions about these qualifications should be directed to Wendy Dominguez at Innovest Portfolio
Solutions. She can be reached at wendvd0linnovestinc.com or 303-694-1900 extension 301.
If you believe your firm meets the vendor qualification requirements as stated above, please complete and
sign the bottom of this form and return it to Jim O'Neill in the Purchasing Department at the City of Fort
Collins. His fax number Is 970-221-6707.
1 certify that our firm meets the vendor requirements as stated above and we plan on submitting a proposal,
when an RFP is issued.
Vendor Name
"Sxf 4r.S arr✓ccs �
Vendor Repre_
Vendor erese6tative Signature
P943 Pension Services Poudre Fire Authority
Poudre Fire Authority Money Purchase Pension Plan
(Old Hire & New Hire)
Statement of Work
06/28/04 MON 14:00 FAX
la 002
Poudre Fire Authority Vendor Qualifications
Experience
• Vendor must have public plan experience. Vendors with Colorado public plan experience are preferred.
• Vendors must have experience with plans with similar asset and participant levels. The majority of
vendor plans must be in the $20 million to $200 million range.
Investments
• Open universe of fund offerings. At least 50% of the funds offered must be non-proprietary funds.
• All investments will be offered on a share basis, not a unit basis and will be purchased at NAV.
• A stable value fund may be offered as part of the investment menu, however, no market value
adjustment on either participant or plan level withdrawals will be allowed.
Costs
• The Fire District realizes their plan is very attractive for vendors due to the high average account
balances in the plan. A preferred vendor will refund to the plan revenue sharing in excess of their fee to
pay for additional plan costs (legal, consulting, audit, etc.).
Education
• Investment advice must be offered. The preferred provider will have the ability to offer advice from both
in -person, salaried representatives and computer based systems.
• Vendors will be required to offer quarterly participant meetings on site at the various fire houses in Fort
Collins for two days each quarter in order to have access to all shifts. In addition, general education
meetings will be provided for new hires as requested, but shall not be more than 2 per year. Also,
retirement planning seminars by CFP or similarly accredited professionals will be provided at least once
per quarter. Participants should also have phone access to CFP's for routine questions.
Contract Provisions
• Service standards with monetary damages paid back to the plan for non-compliance will be included in
the contract. Vendors must have the flexibility to include these negotiated service standards in their
contract, as well as other reasonable requests of the City of Fort Collins Purchasing department.
• The term of the contract will be no longer than 3 years and after the initial term, termination can be
made by either party, with or without cause with 60 days notice. No contract termination fees will be
allowed.
Any questions about these qualifications should be directed to Wendy Dominguez at Innovest Portfolio
Solutions. She can be reached at wendvd(")a innovestinc.com or 303-694-1900 extension 301.
If you believe your firm meets the vendor qualification requirements as stated above, please complete and
sign the bottom of this form and return it to Jim O'Neill in the Purchasing Department at the City of Fort
Collins. His fax number is 970-221-6707.
1 certify that our firm meets the vendor requirements as stated above and we plan on submitting a proposal,
when an RFP is issued.
Vendor Name
1�gic.W„ A, i�a�arge
Vendor Representative
Vendor Represent v Signature
P943 Pension Services Poudre Fire Authority
Poudre Fire Authority Money Purchase Pension Plan
(Old Hire & New Hire)
Statement of Work
JUN 22 '04 10:17 FR UALIC 713-831-6172713 831 6172 TO 919702216707 P.02i02
Poudre Fire Authority Vendor Qualifications
Experience
• Vendor must have public plan experience. Vendors with Colorado public plan experience are preferred.
• Vendors must have experience with plans with similar asset and participant levels. The majority of
vendor plans must be in the $20 million to $200 million range,
Investments
+ Open universe of fund offerings. At least 50% of the funds offered must be non-proprietary funds.
• All investments will be offered on a share basis, not a unit basis and will be purchased at NAV.
• A stable value fund may be offered as part of the investment menu, however, no market value
Costs adjustment on either participant or plan level withdrawals will be allowed.
• The Fire District realizes their plan is very attractive for vendors due to the high average account
balances in the plan. A preferred vendor will refund to the plan revenue sharing in excess of their fee to
pay for additional plan costs (legal, consulting, audit, etc.).
Education
• Investment advice must be offered. The preferred provider will have the ability to offer advice from both
in -person, salaried representatives and computer based systems.
• Vendors will be required to offer quarterly participant meetings on site at the various fire houses in Fort
Collins for two days each quarter in order to have access to all shifts. In addition, general education
meetings will be provided for new hires as requested, but shall not be more than 2 per year. Also,
retirement planning seminars by CFP or similarly accredited professionals will be provided at least once
per quarter. Participants should also have phone access to CFP's for routine questions.
Contract Provisions
+ Service standards with monetary damages paid back to the plan for non-compliance will be included in
the contract. Vendors must have the flexibility to include these negotiated service standards in their
contract, as well as other reasonable requests of the City of Fort Collins Purchasing department.
• The term of the contract will be no longer than 3 years and after the initial term, termination can be
made by either party, with or without cause with 60 days notice. No contract termination fees will be
allowed.
Any questions about these qualifications should be directed to Wendy Dominguez at Innovest Portfolio
Solutions. She can be reached at wendvd0nnovestinc.com or 303-694.1900 extension 301.
If you believe your firm meets the vendor qualification requirements as stated above, please complete and
sign the bottom of this form and return it to Jim O'Neill in the Purchasing Department at the City of Fort
Collins. His fax number is 970-221-6707,
I certify that our firm meets the vendor requirements as stated above and we plan on submitting a proposal,
when an RFP is issued.
AIG VALIC
Vendor Name
Cynthia S. Seeman Vice President, Consultant Relations
Ken
dor Representative
r Representative Signature
P943 Pension Services Poudre Fire Authority
Poudre Fire Authority Money Purchase Pension Plan
(Old Hire & New Hire)
Statement of Work
** TnTAl PAr,F _ P **
06/16/2004 12:59 FAX 860 843 3763 [a001/001
Poudre Fire Authority Vendor Qualifications
Experience
• Vendor must have public plan experience. Vendors with Colorado public plan experience are preferred.
• Vendors must have experience with plans with similar asset and participant levels. The majority of
vendor plans must be in the $20 million to $200 million range.
Investments
• Open universe of fund offerings. At least 50% of the funds offered must be non-proprietary funds.
• All investments will be offered on a share basis, not a unit basis and will be purchased at NAV.
• A stable value fund may be offered as part of the investment menu, however, no market value
adjustment on either participant or plan level withdrawals will be allowed.
costs
• The Fire District realizes their plan is very attractive for vendors due to the high average account
balances in the plan. A preferred vendor will refund to the plan revenue sharing in excess of their fee to
pay for additional plan costs (legal, consulting, audit, etc.)_
Education
• Investment advice must be offered. The preferred provider will have the ability to offer advice from both
in -person, salaried representatives and computer based systems.
• Vendors will be required to offer quarterly participant meetings on site at the various fire houses in Fort
Collins for two days each quarter in order to have access to all shifts. In addition, general education
meetings will be provided for new hires as requested, but shall not be more than 2 per year. Also,
retirement planning seminars by CFP or similarly accredited professionals will be provided at least once
per quarter. Participants should also have phone access to CFP's for routine questions.
Contract Provisions
• Service standards with monetary damages paid back to the plan for non-compliance will be included in
the contract. Vendors must have the flexibility to include these negotiated service standards in their
contract, as well as other reasonable requests of the City of Fort Collins Purchasing department.
• The term of the contract will be no longer than 3 years and after the initial term, termination can be
made by either party, with or without cause with 60 days notice. No contract termination fees will be
allowed.
Any questions about these qualifications should be directed to Wendy Dominguez at Innovest Portfolio
Solutions. She can be reached at wendvdAinnovestinc.com or 303-694-1900 extension 301.
If you believe your firm meets the vendor qualification requirements as stated above, please complete and
sign the bottom of this form and return it to Jim O'Neill in the Purchasing Department at the City of Fort
Collins. His fax number is 970-221-6707.
certify that our fine meets the vendor requirements as stated above and we plan on submitting a proposal,
when an RFP is issued.
The Hartford
Vendor Name
Matthew J. Sarra
Vendor Representative
Vendor Represents Signature
P943 Pension Services Poudre Fire Authority
Poudre Fire Authority Money Purchase Pension Plan
(Old Hire & New Hire)
Statement of Work ..
Post -it• Fax Note 7671
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Phone #
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Fax #
Fax #
JUN-09-04 WED 03:38 PM FIRST NAT'L BANK -TRUST D FAX N0, 9704937419 P. 01
Poudre Fire Authority Vendor Qualifications
Experience
• Vendor must have public plan experience. Vendors with Colorado public plan experience are preferred.
• Vendors must have experience with plans with similar asset and participant levels. The majority of
vendor plans must be in the $20 million to $200 million range.
Investments
• Open universe of fund offerings, At least 50% of the funds offered must be non-proprietary funds.
■ All investments will be offered on a share basis, not a unit basis and will be purchased at NAV,
• A stable value fund may be offered as part of the investment menu, however, no market value
adjustment on either participant or plan level withdrawals will be allowed.
Costs
The Fire District realizes their plan is very attractive for vendors due to the high average account
balances in the plan. A preferred vendor will refund to the plan revenue sharing in excess of their fee to
pay for additional plan costs (legal, consulting, audit, etc.).
Education
• Investment advice must be offered. The preferred provider will have the ability to offer advice from both
In -person, salaried representatives and computer based systems.
• Vendors will be required to offer quarterly participant meetings on site at the various fire houses in Fort
Collins for two days each quarter in order to have access to all shifts. In addition, general education
meetings will be provided for new hires as requested, but shall not be more than 2 per year. Also,
retirement planning seminars by CFP or similarly accredited professionals will be provided at least once
per quarter. Participants should also have phone access to CFP's for routine questions.
Contract Provisions
■ Service standards with monetary damages paid back to the plan for non-compliance will be included in
the contract. Vendors must have the flexibility to include these negotiated service standards in their
contract, as well as other reasonable requests of the City of Fort Collins Purchasing department.
• The term of the contract will be no longer than 3 years and after the initial term, termination can be
made by either party, with or without cause with 60 days notice. No contract termination fees will be
allowed.
Any questions about these qualifications should be directed to Wendy Dominguez at Innovest Portfolio
Solutions. She can be reached at wendyd@innoyestino.mm, or 303-694-1900 extension 301.
If you believe your firm meets the vendor qualification requirements as stated above, please complete and
sign the bottom of this form and return it to Jim O'Neill in the Purchasing Department at the City of Fort
Collins. His fax number is 970-221-5707.
I certify that our firm meets the vendor requirements as stated above and we plan on submitting a proposal,
when an RFP is issued.
First National Sank Investment Management & Trust
Vendor Name
Jack B. Wolfe Senior Vice President
Vendor Representative
gnature
P943 Pension Services Poudre Fire Authority
idre Fire Authority Money Purchase Pension Plan
(Old Hire & New Hire)
Statement of Work
JUN 01 2004 6:39 AM FR PRUDENTIAL 18005453123 TO 919702216707 P.02
Poudre Fire Authority Vendor Qualifications
Experience
• Vendor must have public plan experience. Vendors with Colorado public plan experience are preferred.
• Vendors must have experience with plans with similar asset and participant levels. The majority of
vendor plans must be in the $20 million to $200 million range.
Investments
• Open universe of fund offerings. At least 50% of the funds offered must be non-proprietary funds.
• All investments will be offered on a share basis, not a unit basis and will be purchased at NAV.
• A stable value fund may be offered as part of the investment menu, however, no market value
adjustment on either participant or plan level withdrawals will be allowed.
Costs
• The Fire District realizes their plan is very attractive for vendors due to the high average account
balances in the plan. A preferred vendor will refund to the plan revenue sharing in excess of their fee to
pay for additional plan costs (legal, consulting, audit, etc.).
Education
• Investment advice must be offered. The preferred provider will have the ability to offer advice from both
in -person, salaried representatives and computer based systems.
• Vendors will be required to offer quarterly participant meetings on site at the various fire houses in Fort
Collins for two days each quarter in order to have access to all shifts. In addition, general education
meetings will be provided for new hires as requested, but shall not be more than 2 per year. Also,
retirement planning seminars by CFP or similarly accredited professionals will be provided at least once
per quarter. Participants should also have phone access to CFP's for routine questions.
Contract Provisions
• Service standards with monetary damages paid back to the plan for non-compliance will be included in
the contract. Vendors must have the flexibility to include these negotiated service standards in their
contract, as well as other reasonable requests of the City of Fort Collins Purchasing department.
• The term of the contract will be no longer than 3 years and after the initial term, termination can be
made by either party, with or without cause with 60 days notice. No contract termination fees will be
allowed.
Any questions about these qualifications Should be directed to Wendy Dominguez at Innovest Portfolio
Solutions. She can be reached at wendydRinnovestinc.com or 303-694-1900 extension 301,
If you believe your firm meets the vendor qualification requirements as stated above, please complete and
sign the bottom of this form and return it to Jim O'Neill in the Purchasing Department at the City of Fort
Collins. His fax number is 970-221-6707.
I certify that our firm meets the vendor requirements as stated above and we plan on submitting a proposal,
when an RFP is issued.
Vendor Name
771oma f
Ve Representative
Vendor Representatilkqd Signature
P943 Pension Services Poudre Fire Authority
Poudre Fire Authority Money Purchase Pension Plan
(Old Hire & New Hire)
Statement of Work
** TOTA1 PAGF . RP **
REVIEW AND ASSESSMENT
Professional firms will be evaluated on the following criteria. These criteria will be the basis for
review of the written proposals and interview session. Responses to this request will be
evaluated by Innovest Portfolio Solutions LLC, the investment consultant retained by the plan
for RFP services and a staff committee. Summaries will be provided to Poudre Fire Authority
and finalists may be asked to make a presentation to the Board.
The rating scale shall be from 1 to 5, with 1 being a poor rating, 3 being an average rating, and
5 being an outstanding rating. Finalists will be selected based on the following factors as
presented in the bidder's response to this request:
WEIGHTING
FACTOR
QUALIFICATION
STANDARD
Does the proposal show an understanding of the project
2.0
Scope of Proposal
objective, methodology to be used and results that are desired
for pension services including:
• Participant and plan sponsor customer service
• Universe of investment choices
• Quality of administrative, trustee and plan reporting
services and systems combined with innovative uses of
technology for the administration of the plan
• Success of plan conversions
• Ability to accept current payroll and eligibility file layout and
transmit in the current file layout format (copies are
attached)
• Employee education and communication program
• Ability to offer investment advice to participants
• Fees and cost of the program
• Complete and concise responses to inquiries in the
Statement of Plan Services
The evaluation criteria above are not listed in any specific order of
im ortance.
Do the persons who will be working on the project have the
2.0
Assigned Personnel
necessary skills? Are sufficient people of the requisite skills
assigned to provide pension services?
Can the work be completed in the necessary time? Can the
1.0
Availability
target start and completion dates be met? Are other qualified
personnel available to assist in meeting the project schedule if
required? Is the project team available to attend meetings as
required by the Scope of Work?
Is the firm interested and are they capable of doing the work in
1.0
Motivation
the required time frame?
How do the fees and costs compare to other proposals? What
2.0
Fees and Costs
is the overall perceived value to the Ian?
Does the firm have the support capabilities the assigned
2.0
Firm Capability
personnel require? Has the firm done previous projects of this
type and scope?
SA 10/01
16
Jun 03 2004 8:25AM HP LRSERJET 3330
p.2
Poudre Fire Authority Vendor Qualifications
Exoerlence
• Vendor must have public plan experience. Vendors with Colorado public plan experience are preferred.
• Vendors must have experience with plans with similar asset and participant levels. The majority of
vendor plans must be in the $20 million to $200 million range.
Investments
• Open universe of fund offerings. At least 50% of the funds offered must be non-proprietary funds.
• All Investments will be offered on a share basis, not a unit basis and will be purchased at NAV.
• A stable value fund may be offered as part of the Investment menu, however, no market value
adjustment on either participant or plan level withdrawals will be allowed.
Costs
The Fire District realizes their plan is very attractive for vendors due to the high average account
balances in the plan. A preferred vendor will refund to the plan revenue sharing in excess of their fee to
pay for additional plan costs (legal, consulting, audit, etc.).
Education
• Investment advice must be offered. The preferred provider will have the ability to offer advice from both
in -person, salaried representatives and computer based systems.
• Vendors will be required to offer quarterly participant meetings on site at the various fire houses in Fort
Collins for two days each quarter In order to have access to all shifts. In addition, general education
meetings will be provided for new hires as requested, but shall not be more than 2 per year. Also,
retirement planning seminars by CFP or similarly accredited professionals will be provided at least once
per quarter. Participants should also have phone access to CFP's for routine questions.
Contract Provisions
• Service standards with monetary damages paid back to the plan for non-compliance will be Included in
the contract. Vendors must have the flexibility to Include these negotiated service standards in their
contract, as well as other reasonable requests of the City of Fort Collins Purchasing department.
• The term of the contract will be no longer than 3 years and after the initial term, termination can be
made by either party, with or without cause with 60 days notice. No contract termination fees will be
allowed.
Any questions about these qualifications should be directed to Wendy Dominguez at Innovest Portfolio
Solutions. She can be reached at wendyd(mbinnovestinc.com or 303-694-1900 extension 301.
If you believe your firm meets the vendor qualification requirements as stated above, please complete and
sign the bottom of this form and return it to Jim O'Neill In the Purchasing Department at the City of Fort
Collins. His fax number is 970-221-6707.
I certify that our firm meets the vendor requirements as stated above and we plan on submitting a proposal,
when an RFP is issued.
.TMA- #atVaWorNsme
g�r��
Poudre Fire Authority
ly Purchase Pension Plan
,..w , u New Hire)
Statement of Work
JUN-09-04 WED 03:38 PH FIRST NAT'L BANK -TRUST D FAX N0, 9704937419 P. 01
Poudre Fire Authority Vendor Qualifications
Experience
• Vendor must have public plan experience. Vendors with Colorado public plan experience are preferred.
• Vendors must have experience with plans with similar asset and participant levels. The majority of
vendor plans must be in the $20 million to $200 million range.
Investments
• Open universe of fund offerings. At least 60% of the funds offered must be non-proprietary funds.
+ All investments will be offered an a share basis, not a unit basis and will be purchased at NAV.
• A stable value fund may be offered as part of the investment menu, however, no market value
adjustment on either participant or plan level withdrawals will be allowed.
_Costs_
41 The Fire District realizes their plan is very attractive for vendors due to the high average account
balances in the plan_ A preferred vendor will refund to the plan revenue sharing in excess of their fee to
pay for additional plan costs (legal, consulting, audit, etc.).
Education
• Investment advice must be offered. The preferred provider will have the ability to offer advice from both
in -person, salaried representatives and computer based systems.
• Vendors will be required to offer quarterly participant meetings on site at the various fire houses in Fort
Collins for two days each quarter in order to have access to all shifts. In addition, general education
meetings will be provided for new hires as requested, but shall not be more than 2 per year, Also,
retirement planning seminars by CFP or similarly accredited professionals will be provided at least once
per quarter. Participants should also have phone access to CFP's for routine questions.
Contract Provisions
• Service standards with monetary damages paid back to the plan for non-compliance will be included in
the contract. Vendors must have the flexibility to include these negotiated service standards in their
contract, as well as other reasonable requests of the City of Fort Collins Purchasing department.
• The term of the contract will be no longer than 3 years and after the initial term, termination can be
made by either party, with or without cause with 60 days notice. No contract termination fees will be
allowed.
Any questions about these qualifications should be directed to Wendy Dominguez at Innovest Portfolio
Solutions. She can be reached at wendyd@1nnoyestine.com or 303-694-1900 extension 301.
If you believe your firm meets the vendor qualification requirements as stated above, please complete and
sign the bottom of this form and return it to Jim O'Neill in the Purchasing Department at the City of Fort
Collins. His fax number is 970-221-6707.
I certify that our firm meets the vendor requirements as stated above and we plan on submitting a proposal,
when an RFP is issued.
First National Sank Investment Management & Trust
Vendor Name
Vendor
e President
P943 Pension Services Poudre Fire Authority
idre Fire Authority Money Purchase Pension Plan
(Old Hire & New Hire)
Statement of Work
J UJ 0 L F F_ Q F &) i?, F::'�.�o0-c
Jun, 2. 2004 11:46AM CHARLES SCHWAB INC, No, 5186 P. 2/2
Poudre Fire Authority Vendor Qualifications
Exoerienc�
• Vendor must have public plan experience. Vendors with Colorado public plan experience are preferred.
• Vendors must have experience with plans with similar asset and participant levels. The majority of
vendor plans must be in the $20 million to $200 million range.
Investments
• Open universe of fund offerings. At least 50% of the funds offered must be non-proprietary funds.
• All investments will be offered on a share basis, not a unit basis and will be purchased at NAV.
• A stable value fund may be offered as part of the investment menu, however, no market value
adjustment on either participant or plan level withdrawals will be allowed.
Costs
The Fire District realizes their plan is very attractive for vendors due to the high average account
balances in the plan. A preferred vendor will refund to the plan revenue sharing in excess of their fee to
pay for additional plan costs (legal, consulting, audit, etc.).
Education
• Investment advice must be offered. The preferred provider will have the ability to offer advice from both
in -person, salaried representatives and computer based systems_
Vendors will be required to offer quarterly participant meetings on she at the various fire houses in Fort
Collins for two days each quarter in order to have access to all shifts. In addition, general education
meetings will be provided for new hires as requested, but shall not be more than 2 per year. Also,
retirement planning seminars by CFP or similarly accredited professionals will be provided at least once
per quarter. Participants should also have phone access to CFP's for routine questions.
Contract Provisi0as '
• Service standards with monetary damages paid back to the plan for non-compliance will be included in
the contract. Vendors must,have the.flexibility to include these negotiated service standards in -their
contract, as well as other reasonable requests of the City of Fort Collins Purchasing department
• The term of the contract will be no longer than 3 years and after the initial term, termination can be
made by either party, with or without cause with 60 days notice. No contract termination fees will be
allowed.
Any questions about these qualifications should be directed to Wendy Dominguez at Innovest Portfolio
Solutions. She can be reached at wandvdrdlinnovestinc.com or 303-694-1900 extension 301.
If you believe your firm meets the vendor qualification requirements as stated above, please complete and
sign the bottom of this form and return it to Jim O'Neill in the Purchasing Department at the City of Fort
Collins. His fax number is 970-221-6707.
I certify that our firm meets the vendor requirements as stated above and we plan on submitting a proposal,
when an RFP is issued.
Name
Vendor
I e,3 I hW
GllyiCy
Vendor Representative Signature U
P943 Pension Services Poudre Fire Authority
Poudre Fire Authority Money Purchase Pension Plan
(Old Hire & New Hire)
Statement of Work
June 24, 2005
Prudential Retirement Services
Address
City, State, Zip
RE: Poudre Fire Authority Old Hire and New Hire 401(a) Plans ("Plans")
Dear xxxx:
This letter is in regard to the above referenced qualified retirement plan currently being
administered by your firm. At a Board meeting held on (date), a resolution was adopted
to transfer the qualified retirement assets from Prudential Retirement Services to ICMA-
RC. Therefore, this letter serves as notice that the Poudre Fire Authority 401(a) Old and
New Hire Plans will be terminating the services with your firm effective September 20,
2005 and that ICMA-RC will now serve as the new plan administrator.
Contact information for ICMA-RC authorized representatives is as follows:
Carl Klein, Sr. Specialist
Phone: (202) 962-8070
Facsimile: (202) 962-4601
e-mail: cklein _ ,icmarc.org
Jeff Gibson, Manager New Business Unit
Phone: (202) 962-8247
Facsimile: (202) 962-4601
e-mail: j ig bson(i�icmarc.org;
Finally, this letter serves as authorization for you to provide ICMA-RC with plan -related
information as requested. We appreciate your attention to this matter and your
anticipated cooperation.
Thank you.
Sincerely,
Name
Title
CC: (name of plan)
SUGGESTED RESOLUTION FOR A LEGISLATIVE BODY
RELATING TO A 401 MONEY PURCHASE PLAN
ACCOUNT NUMBER:
RESOLUTION OF
(EMPLOYER NAME).
WHEREAS, the Employer has employees rendering valuable services; and
WHEREAS, the establishment of a money purchase retirement plan benefits employees by providing funds for retirement and
funds for their beneficiaries in the event of death; and
WHEREAS, the Employer desires that its money purchase retirement plan be administered by the ICMA Retirement Corpora-
tion and that the funds held under such plan be invested in the ICMA Retirement Trust, a trust established by public employers
for the collective investment of funds held under their retirement and deferred compensation plans:
NOW THEREFORE BE IT RESOLVED that the Employer hereby establishes or has established a money purchase retirement
plan (the "Plan") in the form of: (Select one)
❑ The ICMA Retirement Corporation Governmental Money Purchase Plan & Trust, pursuant to the
specific provisions of the Adoption Agreement (executed copy attached hereto).
❑ The Plan and Trust provided by the Employer (executed copy attached hereto).
The Plan shall be maintained for the exclusive benefit of eligible employees and their beneficiaries; and
BE IT FURTHER RESOLVED that the Employer hereby executes the Declaration of Trust of the ICMA Retirement Trust,
attached hereto, intending this execution to be operative with respect to any retirement or deferred compensation plan subse-
quently established by the Employer, if the assets of the plan are to be invested in the ICMA Retirement Trust.
BE IT FURTHER RESOLVED that the Employer hereby agrees to serve as trustee under the Plan and to invest funds held
under the Plan in the ICMA Retirement Trust; and
BE IT FURTHER RESOLVED that the (use title of official, not name) shall be the coordinator for the
Plan; shall receive reports, notices, etc., from the ICMA Retirement Corporation or the ICMA Retirement Trust; shall cast, on
behalf of the Employer, any required votes under the ICMA Retirement Trust; may delegate any administrative duties relating to
the Plan to appropriate departments; and is authorized to execute all necessary agreements with the ICMA Retirement Corpora-
tion incidental to the administration of the Plan.
Clerk of the (City, Count)4 etc.) of
resolution proposed by (Council Member,Trustee, etc.) of
(Council, Board, etc.) of the (City, County, etc.) of
_, do hereby certify that the foregoing
-, was duly passed and adopted by the
at a regular meeting thereof assembled
this day of 20 , by the following vote:
AYES:
NAYS:
ABSENT:
(SEAL)
Clerk of the (City, County, etc.)
ADMINISTRATIVE SERVICES AGREEMENT
Type: 401
Account Number: 6042
Plan # 6042
ADMINISTRATIVE SERVICES AGREEMENT
This Agreement, made as of the day of , 2005 (herein referred to as
the "Inception Date"), between The International City Management Association
Retirement Corporation ("RC"), a nonprofit corporation organized and existing under
the laws of the State of Delaware; and the Poudre Fire Authority -Old Hires
("Employer") an Authority organized and existing under the laws of the State of
Colorado with an office at 102 Remington, Fort Collins, Colorado 80524.
RECITALS
Employer acts as a public plan sponsor for a retirement plan ("Plan") with responsibility
to obtain investment alternatives and services for employees participating in that Plan;
The VantageTrust (the "Trust") is a common law trust governed by an elected Board
of Trustees for the commingled investment of retirement funds held by state and local
governmental units for their employees;
RC acts as investment adviser to the Trust; RC has designed, and the Trust offers, a
series of separate funds (the "Funds") for the investment of plan assets as referenced
in the Trust's principal disclosure document, "Making Sound Investment Decisions: A
Retirement Investment Guide." The Funds are available only to public employers and
only through the Trust and RC.
In addition to serving as investment adviser to the Trust, RC provides a complete
offering of services to public employers for the operation of employee retirement plans
including, but not limited to, communications concerning investment alternatives,
account maintenance, account record -keeping, investment and tax reporting, form
processing, benefit disbursement and asset management.
AGREEMENTS
1. Appointment of RC
Employer hereby designates RC as Administrator of the Plan to perform all non -
discretionary functions necessary for the administration of the Plan with respect to
assets in the Plan deposited with the Trust. The functions to be performed by RC
include:
(a) allocation in accordance with participant direction of individual accounts to
investment Funds offered by the Trust;
(b) maintenance of individual accounts for participants reflecting amounts deferred,
-2-
Plan # 6042
income, gain, or loss credited, and amounts disbursed as benefits;
(c) provision of periodic reports to the Employer and participants of the status of
Plan investments and individual accounts;
(d) communication to participants of information regarding their rights and elections
under the Plan; and
(e) disbursement of benefits as agent for the Employer in accordance with terms of
the Plan.
RC shall perform its functions under this Agreement in accordance with the
service guarantees set forth in Exhibit A to this Agreement.
2. Adoption of Trust
Employer has adopted the Declaration of Trust of VantageTrust and agrees to the
commingled investment of assets of the Plan within the Trust. Employer agrees that
operation of the Plan and investment, management and disbursement of amounts
deposited in the Trust shall be subject to the Declaration of Trust, as it may be
amended from time to time and shall also be subject to terms and conditions set forth
in disclosure documents (such as the Retirement Investment Guide or Employer
Bulletins) as those terms and conditions may be adjusted from time to time. It is
understood that the term "Employer Trust" as it is used in the Declaration of Trust
shall mean this Administrative Services Agreement.
3. Exclusivity Agreement
Employer agrees that for the initial or succeeding term of this Agreement specified in
Section 10, so long as RC continues to perform in all material respects the services to be
performed by it under this Agreement, Employer shall not obtain plan administration and
investment advisory services from anyone other than RC. Employer acknowledges that RC
has agreed to the compensation to be paid to RC under this Agreement in the expectation
that RC will be able to offset costs allocable to performing this Agreement with revenues
arising from Employer's exclusive use of RC at the rates provided herein throughout the
initial or succeeding term.
4. Employer Duty to Furnish Information
Employer agrees to furnish to RC on a timely basis such information as is necessary for
RC to carry out its responsibilities as Administrator of the Plan, including information
needed to allocate individual participant accounts to Funds in the Trust, and
information as to the employment status of participants, and participant ages,
-3-
Plan # 6042
addresses and other identifying information (including tax identification numbers). RC
shall be entitled to rely upon the accuracy of any information that is furnished to it by
a responsible official of the Employer or any information relating to an individual
participant or beneficiary that is furnished by such participant or beneficiary, and RC
shall not be responsible for any error arising from its reliance on such information. RC
will provide account information in reports, statements or accountings.
5. Certain Representations, Warranties, and Covenants
RC represents and warrants to Employer that:
(a) RC is a non-profit corporation with full power and authority to enter into this
Agreement and to perform its obligations under this Agreement. The ability of
RC to serve as investment adviser to the Trust is dependent upon the continued
willingness of the Trust for RC to serve in that capacity.
(b) RC is an investment adviser registered as such with the Securities and Exchange
Commission under the Investment Advisers Act of 1940, as amended. ICMA-RC
Services, Inc. (a wholly owned subsidiary of RC) is registered as a broker -dealer
with the Securities and Exchange Commission (SEC) and is a member in good
standing of the National Association of Securities Dealers, Inc.
RC covenants with employer that:
(c) RC shall maintain and administer the Plan in compliance with the
requirements for plans which satisfy the qualification requirements of Section
401 of the Internal Revenue Code; provided, however, RC shall not be
responsible for the qualified status of the Plan in the event that the Employer
directs RC to administer the Plan or disburse assets in a manner inconsistent
with the requirements of Section 401 or otherwise causes the Plan not to be
carried out in accordance with its terms; provided, further, that if the plan
document used by the Employer contains terms that differ from the terms of
RC's standardized plan document, RC shall not be responsible for the
qualified status of the Plan to the extent affected by the differing terms in
the Employer's plan document.
Employer represents and warrants to RC that:
(d) Employer is organized in the form and manner recited in the opening paragraph
of this Agreement with full power and authority to enter into and perform its
obligations under this Agreement and to act for the Plan and participants in the
manner contemplated in this Agreement. Execution, delivery, and performance
of this Agreement will not conflict with any law, rule, regulation or contract by
IZ!
Plan # 6042
which the Employer is bound or to which it is a party.
6. Participation in Certain Proceedings
The Employer hereby authorizes RC to act as agent, to appear on its behalf, and to join
the Employer as a necessary party in all legal proceedings involving the garnishment of
benefits or the transfer of benefits pursuant to the divorce or separation of participants
in the Employer Plan. Unless Employer notifies RC otherwise, Employer consents to
the disbursement by RC of benefits that have been garnished or transferred to a former
spouse, spouse or child pursuant to a domestic relations order.
7. Compensation and Payment
(a) Administrative Compensation. There shall be no asset based administration
fees assessed against Plan assets invested in the Trust. Should the Employer
choose to replace an investment fund or investment funds after the initial
consolidation of assets, RC shall receive revenue based on Plan assets
invested in the replacement funds at a level comparable to the original funds.
ICMA-RC will prepare an annual report of revenue received for each fund that
includes 1) revenue retained by ICMA-RC for proprietary funds and revenue
received from the fund company as a percent of assets, 2) average month -
end balances for the year, and 3) revenue in dollars derived by multiplying
revenue received/retained with average month -end balances for each fund."
(b) Account Maintenance Fee. There shall be no per participant fees assessed
under this Agreement.
(c) Compensation for Management Services to the Trust and for Advisory and
other Services to the Vantagepoint Funds. Employer acknowledges that in
addition to amounts payable under this Agreement, RC receives fees from
the Trust for investment management services furnished to the Trust.
Employer further acknowledges that certain wholly -owned subsidiaries of RC
including but not limited to ICMA-RC Services, LLC. receive compensation for
advisory and other services furnished to the Vantagepoint Funds, which
serve as the underlying portfolios of a number of Funds offered through the
Trust. The fees referred to in this subsection are disclosed in the Retirement
Investment Guide. These fees are not assessed against assets invested in the
Trust's Mutual Fund Series.
(d) Administrative Allowance. To the extent that the revenue requirement
specified below is met, RC shall annually pay to the Employer an
administrative allowance equal to the revenue RC receives from investments
held by all plans administered by RC on behalf of the Employer, including the
-5-
Reference evaluation (Top Ranked Firm)
The project Manager will check references using the following criteria. The evaluation rankings
will be labeled Satisfactory/Unsatisfactory.
QUALIFICATION
STANDARD
Overall Performance
Would you hire this Professional again? Did
they show the skills required by this project?
Timetable
Was the original Scope of Work completed
within the specified time? Were interim
deadlines met in a timely manner?
Completeness
Was the Professional responsive to client
needs; did the Professional anticipate
problems? Were problems solved quickly and
effectively?
Budget
Was the original Scope of Work completed
within the project budget?
Job Knowledge
a) If a study, did it meet the Scope of Work?
b) If Professional administered a construction
contract, was the project functional upon
completion and did it operate properly?
Were problems corrected quickly and
effectively?
SA 10/01
17
Plan # 6042
Plan, in excess of 0.08% of total plan assets. This amount shall be the total
administrative allowance payable in connection with all plans administered by
RC, including the Plan, during the term of this Agreement.
(e) Investment Advice Service. The annual fee for the on-line investment advice
service made available by RC through its arrangement with Morningstar is
hereby waived throughout the term of this Agreement.
(f) Vantage Planning Service. The individual fee for the individual financial plans
made available by RC through our Certified Financial Planners is hereby
waived throughout the term of this Agreement.
(g) Payment Procedures. All payments to RC pursuant to this Section 7 shall be
paid out of the Plan assets held by the Trust and shall be paid by the Trust.
The amount of Plan assets held in the Trust shall be adjusted by the Trust as
required to reflect such payments.
The compensation and payment set forth in this Section 7 is contingent upon RC
receiving revenue from investment options selected by the Employer to fund the
plans to be administered on behalf of the Employer by RC, including the Plan, in the
amount of at least 0.08% of all plan assets. Employer acknowledges and agrees
that, in the event that this revenue requirement is not met, compensation and
payment under this Agreement shall be subject to re -negotiation. The
compensation and payment set forth in this section 7 is further contingent upon the
transfer of all assets of the Plans formerly administered by Prudential Retirement.
8. Custody
Employer understands that amounts invested in the Trust are to be remitted directly to
the Trust in accordance with instructions provided to Employer by RC and are not to
be remitted to RC. In the event that any check or wire transfer is incorrectly labeled or
transferred to RC, RC will return it to Employer with proper instructions.
9. Responsibility
RC shall not be responsible for any acts or omissions of any person other than RC in
connection with the administration or operation of the Plan.
10. Term
This Agreement shall be in effect for an initial term beginning on the Inception Date and
ending 3 years after the Inception Date. This Agreement will be renewed automatically for
each succeeding year unless written notice of termination is provided by either party to the
Plan # 6042
other no less than 60 days before the end of such Agreement year.
This Agreement may be terminated without penalty by either party on sixty days
advance notice in writing to the other.
11. Amendments and Adjustments
(a) This Agreement may not be amended except by written instrument signed by
the parties.
(b) The parties agree that an adjustment to compensation may only be implemented
by RC through a proposal to the Employer via written correspondence. The
Employer will be given at least 60 days to review the proposal before the
effective date of the adjustment. Such adjustment shall become effective
unless, within the 60 day period before the effective date, the Employer notifies.
RC in writing that it does not accept such adjustment, in which event the
parties will negotiate with respect to the adjustment.
(c) No failure to exercise and no delay in exercising any right, remedy, power or
privilege hereunder shall operate as a waiver of such right, remedy, power or
privilege.
12. Notices
All notices required to be delivered under Section 10 of this Agreement shall be
delivered personally or by registered or certified mail, postage prepaid, return receipt
requested, to (i) Legal Department, ICMA Retirement Corporation, 777 North Capitol
Street, N.E., Suite 600, Washington, D.C, 20002-4240; (ii) Employer at the office set
forth in the first paragraph hereof, or to any other address designated by the party to
receive the same by written notice similarly given.
13. Complete Agreement
This Agreement shall constitute the sole agreement between RC and Employer relating
to the object of this Agreement and correctly sets forth the complete rights, duties and
obligations of each party to the other as of its date. Any prior agreements, promises,
negotiations or representations, verbal or otherwise, not expressly set forth in this
Agreement are of no force and effect.
14. Governing Law
This agreement shall be governed by and construed in accordance with the laws of the
State of Colorado, applicable to contracts made in that jurisdiction without reference to
-7-
Plan # 6042
its conflicts of laws provisions.
In Witness Whereof, the parties hereto have executed this Agreement as of the
Inception Date first above written.
POUDRE FIRE AUTHORITY -OLD HIRES
by:
Signature/Date
Name and Title (Please Print)
INTERNATIONAL CITY MANAGEMENT
ASSOCIATION RETIREMENT
CORPORATION
by:��i4'I
Paul Gallagher
Corporate Secretary
Plan # 6042
Exhibit A
RC Service Guarantees
RC makes the following 401 Plan service guarantees:
Standard
Guarantee
Transition Deliverables
Transition of assets to RC by
$1,500 if delay caused by factors
agreed upon deadline and
controllable by RC.
reconciliation of assets within one
week.
Transition Time -line
Transition of assets to RC by
$1,500 if delay caused by factors
agreed upon deadline and
controllable by RC.
reconciliation of assets within one
week.
On -Site Service
Registered representative on site
$2,500 if performance standard is
at least fifteen days a year to
not met in a calendar year due to
provide educational seminars and
circumstances under RC control.
individual consultations; Salaried
UP on -site at least four days per
year. In addition, RC shall
annually provide to each
participant a letter offering
availability of individual
consultations and such other
information as may be mutually
agreed.
Quarterly Statement delivery
Quarterly statements mailed within
$500 for each quarter in which
12 business days, unless
less than 99% of statements for
performance returns received late
the plan meet deadline due to
due to factors beyond RC's control.
circumstances under RC control.
Contribution posting
Same evening at the price as of the
$250 for each for each payroll in
close of business that day, if
which posting of contributions
received in good order by 4:00 p.m.
received in good order is not
Eastern Standard Time.
processed within benchmark due
to RC error.
Withdrawal processing
Process lump sum payments no
$250 for each withdrawal
later than one business day
received in good order not
following the date of receipt, if
processed within benchmark due
received in good order; check
to RC error.
issued by second business day
following receipt in good order.
Rollovers out
Rollovers processed no later than
$250 for each rollover request
one business day of receipt of all
received in good order not
required paperwork in good order;
processed within benchmark due
check issue by second business
to RC error.
day following receipt in good
order.
Loan Processing
Loans processed no later than one
$250 for each loan request
business day following receipt if
received in good order not
received in good order; check
Processed within benchmark due
r.�
Plan # 6042
Standard
Guarantee
issued by second business day
to RC error,
following receipt in good order.
Retiree Health Savings CRHS'j
RHS claims processed within ten
$250 for each RHS claim received
Account Claims
business days of receipt if received
in good order not processed
in good order.
within benchmark due to RC
error.
Address changes made at the same time as withdrawal, rollout or loan instructions delay the mailing of
checks by seven calendar days. When this occurs, the applicable performance standard is seven calendar
days later than that listed above.
-10-
ADMINISTRATIVE SERVICES AGREEMENT
Type: 401
Account Number: 6042
Plan # 6042
ADMINISTRATIVE SERVICES AGREEMENT
This Agreement, made as of the day of , 2005 (herein referred to as
the "Inception Date"), between The International City Management Association
Retirement Corporation ("RC"), a nonprofit corporation organized and existing under
the laws of the State of Delaware; and the Poudre Fire Authority -Old Hires
("Employer") an Authority organized and existing under the laws of the State of
Colorado with an office at 102 Remington, Fort Collins, Colorado 80524.
RECITALS
Employer acts as a public plan sponsor for a retirement plan ("Plan") with responsibility
to obtain investment alternatives and services for employees participating in that Plan;
The VantageTrust (the "Trust") is a common law trust governed by an elected Board
of Trustees for the commingled investment of retirement funds held by state and local
governmental units for their employees;
RC acts as investment adviser to the Trust; RC has designed, and the Trust offers, a
series of separate funds (the "Funds") for the investment of plan assets as referenced
in the Trust's principal disclosure document, "Making Sound Investment Decisions: A
Retirement Investment Guide." The Funds are available only to public employers and
only through the Trust and RC.
In addition to serving as investment adviser to the Trust, RC provides a complete
offering of services to public employers for the operation of employee retirement plans
including, but not limited to, communications concerning investment alternatives,
account maintenance, account record -keeping, investment and tax reporting, form
processing, benefit disbursement and asset management.
AGREEMENTS
1. Appointment of RC
Employer hereby designates RC as Administrator of the Plan to perform all non -
discretionary functions necessary for the administration of the Plan with respect to
assets in the Plan deposited with the Trust. The functions to be performed by RC
include:
(a) allocation in accordance with participant direction of individual accounts to
investment Funds offered by the Trust;
(b) maintenance of individual accounts for participants reflecting amounts deferred,
-2-
Plan # 6042
income, gain, or loss credited, and amounts disbursed as benefits;
(c) provision of periodic reports to the Employer and participants of the status of
Plan investments and individual accounts;
(d) communication to participants of information regarding their rights and elections
under the Plan; and
(e) disbursement of benefits as agent for the Employer in accordance with terms of
the Plan.
RC shall perform its functions under this Agreement in accordance with the
service guarantees set forth in Exhibit A to this Agreement.
2. Adoption of Trust
Employer has adopted the Declaration of Trust of VantageTrust and agrees to the
commingled investment of assets of the Plan within the Trust. Employer agrees that
operation of the Plan and investment, management and disbursement of amounts
deposited in the Trust shall be subject to the Declaration of Trust, as it may be
amended from time to time and shall also be subject to terms and conditions set forth
in disclosure documents (such as the Retirement Investment Guide or Employer
Bulletins) as those terms and conditions may be adjusted from time to time. It is
understood that the term "Employer Trust" as it is used in the Declaration of Trust
shall mean this Administrative Services Agreement.
3. Exclusivity Agreement
Employer agrees that for the initial or succeeding term of this Agreement specified in
Section 10, so long as RC continues to perform in all material respects the services to be
performed by it under this Agreement, Employer shall not obtain plan administration and
investment advisory services from anyone other than RC. Employer acknowledges that RC
has agreed to the compensation to be paid to RC under this Agreement in the expectation
that RC will be able to offset costs allocable to performing this Agreement with revenues
arising from Employer's exclusive use of RC at the rates provided herein throughout the
initial or succeeding term.
4. Employer Duty to Furnish Information
Employer agrees to furnish to RC on a timely basis such information as is necessary for
RC to carry out its responsibilities as Administrator of the Plan, including information
needed to allocate individual participant accounts to Funds in the Trust, and
information as to the employment status of participants, and participant ages,
-3-
Plan # 6042
addresses and other identifying information (including tax identification numbers). RC
shall be entitled to rely upon the accuracy of any information that is furnished to it by
a responsible official of the Employer or any information relating to an individual
participant or beneficiary that is furnished by such participant or beneficiary, and RC
shall not be responsible for any error arising from its reliance on such information. RC
will provide account information in reports, statements or accountings.
5. Certain Representations, Warranties, and Covenants
RC represents and warrants to Employer that:
(a) RC is a non-profit corporation with full power and authority to enter into this
Agreement and to perform its obligations under this Agreement. The ability of
RC to serve as investment adviser to the Trust is dependent upon the continued
willingness of the Trust for RC to serve in that capacity.
(b) RC is an investment adviser registered as such with the Securities and Exchange
Commission under the Investment Advisers Act of 1940, as amended. ICMA-RC
Services, Inc. (a wholly owned subsidiary of RC) is registered as a broker -dealer
with the Securities and Exchange Commission (SEC) and is a member in good
standing of the National Association of Securities Dealers, Inc.
RC covenants with employer that:
(c) RC shall maintain and administer the Plan in compliance with the
requirements for plans which satisfy the qualification requirements of Section
401 of the Internal Revenue Code; provided, however, RC shall not be
responsible for the qualified status of the Plan in the event that the Employer
directs RC to administer the Plan or disburse assets in a manner inconsistent
with the requirements of Section 401 or otherwise causes the Plan not to be
carried out in accordance with its terms; provided, further, that if the plan
document used by the Employer contains terms that differ from the terms of
RC's standardized plan document, RC shall not be responsible for the
qualified status of the Plan to the extent affected by the differing terms in
the Employer's plan document.
Employer represents and warrants to RC that:
(d) Employer is organized in the form and manner recited in the opening paragraph
of this Agreement with full power and authority to enter into and perform its
obligations under this Agreement and to act for the Plan and participants in the
manner contemplated in this Agreement. Execution, delivery, and performance
of this Agreement will not conflict with any law, rule, regulation or contract by
-4-
Plan # 6042
which the Employer is bound or to which it is a party.
6. Participation in Certain Proceedings
The Employer hereby authorizes RC to act as agent, to appear on its behalf, and to join
the Employer as a necessary party in all legal proceedings involving the garnishment of
benefits or the transfer of benefits pursuant to the divorce or separation of participants
in the Employer Plan. Unless Employer notifies RC otherwise, Employer consents to
the disbursement by RC of benefits that have been garnished or transferred to a former
spouse, spouse or child pursuant to a domestic relations order.
7. Compensation and Payment
(a) Administrative Compensation. There shall be no asset based administration
fees assessed against Plan assets invested in the Trust. Should the Employer
choose to replace an investment fund or investment funds after the initial
consolidation of assets, RC shall receive revenue based on Plan assets
invested in the replacement funds at a level comparable to the original funds.
ICMA-RC will prepare an annual report of revenue received for each fund that
includes 1) revenue retained by ICMA-RC for proprietary funds and revenue
received from the fund company as a percent of assets, 2) average month -
end balances for the year, and 3) revenue in dollars derived by multiplying
revenue received/retained with average month -end balances for each fund."
(b) Account Maintenance Fee. There shall be no per participant fees assessed
under this Agreement.
(c) Compensation for Management Services to the Trust and for Advisory and
other Services to the Vantagepoint Funds. Employer acknowledges that in
addition to amounts payable under this Agreement, RC receives fees from
the Trust for investment management services furnished to the Trust.
Employer further acknowledges that certain wholly -owned subsidiaries of RC
including but not limited to ICMA-RC Services, LLC. receive compensation for
advisory and other services furnished to the Vantagepoint Funds, which
serve as the underlying portfolios of a number of Funds offered through the
Trust. The fees referred to in this subsection are disclosed in the Retirement
Investment Guide. These fees are not assessed against assets invested in the
Trust's Mutual Fund Series.
(d) Administrative Allowance. To the extent that the revenue requirement
specified below is met, RC shall annually pay to the Employer an
administrative allowance equal to the revenue RC receives from investments
held by all plans administered by RC on behalf of the Employer, including the
-5-
SERVICES AGREEMENT
THIS AGREEMENT made and entered into the day and year set forth below by and
between POUDRE FIRE AUTHORITY acting through its agent THE CITY OF FORT COLLINS,
COLORADO, a Municipal Corporation, hereinafter referred to as the "City" and
hereinafter referred to as "Service Provider".
WITNESSETH:
In consideration of the mutual covenants and obligations herein expressed, it is agreed
by and between the parties hereto as follows:
1. Scope of Services. The Service Provider agrees to provide services in
accordance with the scope of services attached hereto as Exhibit "A", consisting of
( ) page[s], and incorporated herein by this reference.
2. The Work Schedule. [Optional] The services to be performed pursuant to this
Agreement shall be performed in accordance with the Work Schedule attached hereto as
Exhibit "B", consisting of ( ) page[s], and incorporated herein by this reference.
3. Time of Commencement and Completion of Services. The services to be
performed pursuant to this Agreement shall be initiated within ( ) days
following execution of this Agreement. Services shall be completed no later than
Time is of the essence. Any extensions of the time limit set forth above
must be agreed upon in a writing signed by the parties.
4. Contract Period. [Option 1] This Agreement shall commence upon the date of
execution shown on the signature page of this Agreement and shall continue in full force and
effect for one (1) year, unless sooner terminated as herein provided. In addition, at the option
of the City, the Agreement may be extended for an additional period of one (1) year at the rates
provided with written notice to the Professional mailed no later than ninety (90) days prior to
contract end.
SA 10r01
18
Plan # 6042
Plan, in excess of 0.07% of total plan assets. This amount shall be the total
administrative allowance payable in connection with all plans administered by
RC, including the Plan, during the term of this Agreement.
(e) Investment Advice Service. The annual fee for the on-line investment advice
service made available by RC through its arrangement with Morningstar is
hereby waived throughout the term of this Agreement.
(f) Vantage Planning Service. The individual fee for the individual financial plans
made available by RC through our Certified Financial Planners is hereby
waived throughout the term of this Agreement.
(g) Payment Procedures. All payments to RC pursuant to this Section 7 shall be
paid out of the Plan assets held by the Trust and shall be paid by the Trust.
The amount of Plan assets held in the Trust shall be adjusted by the Trust as
required to reflect such payments.
The compensation and payment set forth in this Section 7 is contingent upon RC
receiving revenue from investment options selected by the Employer to fund the
plans to be administered on behalf of the Employer by RC, including the Plan, in the
amount of at least 0.07% of all plan assets. Employer acknowledges and agrees
that, in the event that this revenue requirement is not met, compensation and
payment under this Agreement shall be subject to re -negotiation. The
compensation and payment set forth in this section 7 is further contingent upon the
transfer of all assets of the Plans formerly administered by Prudential Retirement.
8. Custody
Employer understands that amounts invested in the Trust are to be remitted directly to
the Trust in accordance with instructions provided to Employer by RC and are not to
be remitted to RC. In the event that any check or wire transfer is incorrectly labeled or
transferred to RC, RC will return it to Employer with proper instructions.
9. Responsibility
RC shall not be responsible for any acts or omissions of any person other than RC in
connection with the administration or operation of the Plan.
10. Term
This Agreement shall be in effect for an initial term beginning on the Inception Date and
ending 5 years after the Inception Date. This Agreement will be renewed automatically for
each succeeding year unless written notice of termination is provided by either parry to the
Plan # 6042
other no less than 60 days before the end of such Agreement year.
This Agreement may be terminated without penalty by either party on sixty days
advance notice in writing to the other.
11. Amendments and Adjustments
(a) This Agreement may not be amended except by written instrument signed by
the parties.
(b) The parties agree that an adjustment to compensation may only be implemented
by RC through a proposal to the Employer via written correspondence. The
Employer will be given at least 60 days to review the proposal before the
effective date of the adjustment. Such adjustment shall become effective
unless, within the 60 day period before the effective date, the Employer notifies
RC in writing that it does not accept such adjustment, in which event the
parties will negotiate with respect to the adjustment.
(c) No failure to exercise and no delay in exercising any right, remedy, power or
privilege hereunder shall operate as a waiver of such right, remedy, power or
privilege.
12. Notices
All notices required to be delivered under Section 10 of this Agreement shall be
delivered personally or by registered or certified mail, postage prepaid, return receipt
requested, to (i) Legal Department, ICMA Retirement Corporation, 777 North Capitol
Street, N.E., Suite 600, Washington, D.C, 20002-4240; (ii) Employer at the office set
forth in the first paragraph hereof, or to any other address designated by the party to
receive the same by written notice similarly given.
13. Complete Agreement
This Agreement shall constitute the sole agreement between RC and Employer relating
to the object of this Agreement and correctly sets forth the complete rights, duties and
obligations of each party to the other as of its date. Any prior agreements, promises,
negotiations or representations, verbal or otherwise, not expressly set forth in this
Agreement are of no force and effect.
14. Governing Law
This agreement shall be governed by and construed in accordance with the laws of the
State of Colorado, applicable to contracts made in that jurisdiction without reference to
-7-
Plan # 6042
its conflicts of laws provisions.
In Witness Whereof, the parties hereto have executed this Agreement as of the
Inception Date first above written.
POUDRE FIRE AUTHORITY -OLD HIRES
by:
Signature/Date
Name and Title (Please Print)
INTERNATIONAL CITY MANAGEMENT
ASSOCIATION RETIREMENT
CORPORATION
by: /!
Paul Gallagher
Corporate Secretary
Plan # 6042
Exhibit A
RC Service Guarantees
RC makes the following 401 Plan service guarantees:
Standard
Guarantee
Transition Deliverables
Transition of assets to RC by
$1,500 if delay caused by factors
agreed upon deadline and
controllable by RC.
reconciliation of assets within one
week.
Transition Time -line
Transition of assets to RC by
$1,500 if delay caused by factors
agreed upon deadline and
controllable by RC.
reconciliation of assets within one
week.
On -Site Service
Registered representative on site
$2,500 if performance standard is
at least fifteen days a year to
not met in a calendar year due to
provide educational seminars and
circumstances under RC control.
individual consultations; Salaried
CFP on -site at least four days per
year. In addition, RC shall
annually provide to each
participant a letter offering
availability of individual
consultations and such other
information as may be mutually
agreed.
Quarterly Statement delivery
Quarterly statements mailed within
$500 for each quarter in which
12 business days, unless
less than 99% of statements for
performance returns received late
the plan meet deadline due to
due to factors beyond RC's control.
circumstances under RC control.
Contribution posting
Same evening at the price as of the
$250 for each for each payroll in
close of business that day, if
which posting of contributions
received in good order by 4:00 p.m.
received in good order is not
Eastern Standard Time.
processed within benchmark due
to RC error.
Withdrawal processing
Process lump sum payments no
$250 for each withdrawal
later than one business day
received in good order not
following the date of receipt, if
processed within benchmark due
received in good order; check
to RC error.
issued by second business day
following receipt in good order.
Rollovers out
Rollovers processed no later than
$250 for each rollover request
one business day of receipt of all
received in good order not
required paperwork in good order;
processed within benchmark due
check issue by second business
to RC error.
day following receipt in good
order.
Loan Processing
Loans processed no later than one
$250 for each loan request
business day following receipt if
received in good order not
received in good order; check
processed within benchmark due
Plan # 6042
StaWard
Guarantee
issued by second business day
to RC error.
following receipt in good order.
Retiree Health Savings ("RHS')
RHS claims processed within ten
$250 for each RHS claim received
Account Claims
business days of receipt if received
in good order not processed
in good order.
within benchmark due to RC
error.
Address changes made at the same time as withdrawal, rollout or loan instructions delay the mailing of
checks by seven calendar days. When this occurs, the applicable performance standard is seven calendar
days later than that listed above.
-10-
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Topeka KS
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Scommel , Az
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33.a% based on empblm¢, 16 B%aW mac¢el¢
G wM over $15 MM I MM over
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Manager ofwa a bas'c tluce0m
Hertford is M1cuatl on paral mom.
The employ ccmmunicetim pen
Fir.... cRers'mwNmenl Mass.
Security Bmef(h focusal m
T. Ram Pnslin.,tleffecusN. crMive
Vanguard ceMnly M1ea many rewurws for pin
n NN man be aupmnM by A uMe
me tl-an- toosia is r..—all.
subs. by Chi is ddngWMhmsiw
through a widemags d mNie lot
proic inq lwabfae educations
munim mMviMvewM maies', . ere
aPssns and pvtics to
pentdoes . Vanguard
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erydeltlma. Ticdm
Mi
Pchelson. The br¢d hu-es and ost
erdfkndre e. PmsFire Auladmittedem n,vail
irlez in -parson smr¢. heart
and Wce for plan priWh. licn
e¢ little MormeOw dNel.Gal Use
tl ome. 11 of Me key lecWS Dal Popme Fee
shag esmoN malignant tivess
mwGrq severe mNwiels wore gmenc.
how Me chose M cuslwnim a sandy
mallangNbidemos, averMephwre. and
Hwleuw, their sanding O'limll
matinps. Most of Me proam armed on
AUMnNy is lot In as far as the edusaMn
;tralphtlwwxd lagrape. The
but awned to mused rgwanl
of aipcls rmeamrp Mom moment and
eba4micmaybe shopping a pMnwahip
their reps m-¢Ile miss efwte
reasons around meXmgs seal internal
program. They geambd ewtll-wgrvrtl program
spe Watilz secaetlgi.
annothmadiesm en m¢y to
Iwmof MeessommuNcaSms. TM1eu
with Tirunud Engines aN lbEdam Mk
sldsornerl We
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lnelwwld alMvfaaanmcM trgalM aN more
4 spy infmrWan,
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M an site seminars and CFP awards by
supple mere command guidance he
shooppossinal that PmMe Fire
that wane pav'rM wore wigiral entl
irgeragly prande ww ammrmof ed. for
;bNeabk nMlmwl 4Gkts, as
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GMARGaaredod Thesemaii
"i padiapmh prclydrq an mama
Psalmody enomeray prMiNlm
covided bask inwellrp cmcepla paw
In. Paticiden6. Vangrvd'a peer. smlrws
0 As srll educational wnaurs.
mwOh do eppml to e whey miof
cover pMnml hording hpan
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sib ¢tlea. Thlfundayi
parr sit and tldNl onset has Individual
seem to a bra magM1 to nMesl many mcWart
sal Most Cgere Your ae z
shompmldwumrephaca Dempih Tea
designed N ppml W a age range d
day many We W cudprvm
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fundofwe, Treatmen NtO
th'ameallrglo Wwtlwnb2ad Non. The
spyrlegrMcadmgMnot
onal gslone through Hartford Is
andaystorm. The use of a tledcakd OFF
crrmuricNim melaWs for Poul Fire
appmdu weer s]gwM and
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fWNmNdp wad Mismanage, Hartford
to pause resmdlms maddement
AUMwso sore may no lndlWlm of Maas
contained Mwnangelm-tpe
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cptim Is uM tldatMY WWce ll they said,
in Sake Carts M1ea limited sM
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pWrms to fuMa Wit. mrNlmenl
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xk .—norm sell.maw, s
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and readings eacetl in the
and ercarpe mrlaipenl¢bmcroom
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and Inampermand Oppose and 5tralgrea
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repines were gmenc and did
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inws.rmt hsues in a cbr mmnw.
this poposal¢leb¢ Mal mpkr d
onto Nsphy Sewsy Bernard
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Percapd w¢YaM. d praaywMrte,
mill" cuslwnize ma is.
gall 10 Mvmescn m Yl model Wind$
mush subiaOw end uum5a0w lWil Vanguard
significant mo onq Gnenchl dwhhars
cmknl am eddrmsM key
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offer. InlenatuveymployawouN
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retirmmllbr lauN. ICMAMRC .
impureammy lkwen mantas they he. the
IaorNed account level
IMdy tooddefit asset from T. Rose Pecs
inwdmmt options outside the Vmgurl hand! line
education through its representatives,
pwtrwshp with Mxmrgdr paws Mm
adFtybctllwtcmanh¢m¢. XMeyere
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up. WMIe Vwquwdpm..mmymmple
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a good sduson for Muke and
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intwnel cmhnt of all the wows
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dfardhod provider
to eprmsly damMele their.14 Is sow
short fund nfdmNam whsed Vanguard Inds
onwal0meson andcanal sell. In
wlalb peodude n perEumMs.
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srcaai Enyrns was, a 025 per sand
mud M. AMuuuWm
Arrangements Wth MormrgaW, reserves
A. Eprga Adages lw
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0 Adw, abWwlNde funs.
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in. 3.eperele goods me
pnde rgwnn, Me FpM Gcme
HarXwtl sent, IXWnm(Possibilities
pfm¢ Ann Mae w.cepllm N Mefimd
as a resultd moreg Is to prcpkbry
Fined lncwm dell and Abney
RegxM 13 misting funds MM T. Row
Replaced lB easery funds with pdmwaly Vmgwnd
pMn end MwayMrNl spas
Prpnm)
spostarl
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funds
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Is HrBwd pr duc. and we. not
determined! by Hadog m their empanel,
Nmllar to evading rnargannl-
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ICMA rwuands o men do GT%May it 5
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aawbtl log de. PLUS IW%d
the Plan Assuming 0"MA in modest
Vanguard console In nwvdmeparg swWcg arcgt
aewna amrhg. 0. 10%.nes
soring, a 155,844 Wmimsalw
msaws Mere, o Wmanaded.
rM ea.uch Mll nimMad pe tlminlstw ne
usordk wsM d 010%
$15, 000
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$7.590
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.1 Aceanl Option -Gurwhtl
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nags gtlmed he W 100%
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ICMA
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Prudential
General
Prudential Retirement is a business unit of the Prudential Insurance Company of America, an indirectly
wholly owned subsidiary of Prudential Financial, Inc. A list of current directors was provided in the
response.
Prudential will maintain the same service team as it is the incumbent in this search. The account would
continue to be serviced from the Scranton, PA location. Brief biographies and duties of the team follow.
John Drupa, a Financial Advisor with Wachovia Securities based in Denver, will continue to meet with
Poudre Fire Authority as needed to provide both plan and participant level services. He currently
provides investment advisory services to more than 500 individuals and institutions nationwide. John has
been in his current role for more than 9 years, and has been with Prudential for 17 years.
Gabriel "Gabe" D'Ulisse began his career with Prudential in 1988, working in the Underwriting and
Contract Unit. In 1991, Gabe transferred to the Governmental Plans group, specializing in 401(a), 403(b),
and 457 Deferred Compensation arrangements. Gabe has been the Relationship Manager for Poudre Fire
Authority for the past two years.
William Brennan joined Prudential in 1998. In his current role as Senior Account Executive, Bill is
responsible for servicing clients as the main point of contact in the day-to-day administration of
retirement plans. Bill works together with the various functional units of Prudential and the plan's
Financial Advisors to ensure the smooth operation of the plans for which he is responsible. Bill has been
the Account Executive for Poudre Fire Authority for the past five years.
As of March 31, 2004, Prudential Retirement had approximately $67 billion in total defined contribution
assets under management, and currently services two million defined contribution participants. Out of
7,637 plans Prudential services, 1,420 (18.6%) plans have between 100 and 500 employees while 357
(4.7%) plans have between $20 and $50 million in assets. Approximately 25% of their defined
contribution plan business represents public retirement plans. Prudential services approximately 45
Colorado based defined contribution plans.
Prudential Retirement has not been the subject of any disciplinary action by any security regulatory
agency, been party to any litigation, directly or indirectly related, to the conduct of their business, or been
the subject of any ethical or legal inquiries, or disciplinary proceedings during the past ten years for any
of the services offered in this proposal.
Prudential acknowledges limited fiduciary status to the extent its trust affiliate, Prudential Trust
Company, serves as a directed trustee for a plan. Although Prudential does not currently provide trustee
services for Poudre Fire Authority, the Prudential Trust Company (PTC), a wholly owned subsidiary of
Prudential, provides complete nondiscretionary trustee services. Prudential and its subsidiaries maintain a
corporate executive risk insurance program that includes professional liability (errors and omissions)
insurance coverage. The policy specifics are listed in the response.
Over the last three years, Prudential has gained 161 plans and lost 149 plans. A list of references and
plans with similar demographics as Poudre Fire Authority was provided in the response.
Prudential Retirement does not place any limitations or restrictions on an audit. They are willing to
provide resources and materials requested for no additional charge. Prudential Retirement does not offer
a Retiree Health Savings Plan product.
Employee Communication
Prudential's education and communication program attempts to addresses key phases in developing a
successful retirement plan. They utilize a variety of communication methods, including print materials,
on -site visits, training, and web -based tools that focus on the needs of participants and plan sponsors.
Prudential will provide personalized communication materials based on individual participant data and
life events. They can provide messages and materials appropriate to the individual, as well as targeted
groups of employees. To accomplish Poudre Fire Authority's communication and education goals,
Prudential engages in the following processes: developing a strategy, identifying needs -based
communications, establishing success metrics, preparing enrollment delivery plan, implementing
communications strategy, and measuring results.
Typical communication materials for newly eligible employees include a retirement planning guide,
enrollment confirmation letter, and participant statements. All of these materials are customizable to
Poudre Fire Authority's discretion. Typical ongoing education includes quarterly newsletters, brochures,
posters, payroll stuffers, post cards, videos, on -site education meetings, online website access, and
interactive voice response services.
Prudential offers a variety of planning tools for participants. The following is a representative list taken
from the response:
• Retirement Planning Guide —This explains retirement planning, investing, and investment
terms, plan -specific provisions, and how to join the plan.
• Online Retirement Center Website—This website offers interactive capabilities, individualized
account data, and retirement planning information for participants.
• GoalMaker Asset Allocation Program —This service assists participants in selecting an asset
allocation strategy quickly and easily and includes 12 portfolio alternatives that are based on the
investor's time horizon and risk tolerance.
• Prudential.com—Prudential's main website offers tools in financial planning concepts. These
tools include a range of interactive worksheets, calculators, and quizzes designed to help users get
personalized answers to their questions.
• Financial Engines.com—Participants have the capability to obtain direct financial advice. It
allows participants to access third -party advice through a link on their Online Retirement Center
website. There is a one-time set up fee for this service ranging from $5,000 to $25,000 and an
annual $15 fee per participant.
• Quicken —Through a partnership with Intuit, Inc., clients get account tracking software. This
partnership allows plan participants to use Intuit's Quicken software to track their retirement
account activity along with their personal finances.
• Educational Seminars —Prudential can provide packaged seminars on Asset Allocation,
Retirement Investing, and Retirement Distribution. These seminars can be conducted by
Prudential's Education and Enrollment Consultants, by a local Financial Professional, or by the
plan sponsor.
• Distribution Education Center Participants with distribution -related questions are connected
to a specially trained representative in the Distribution Education Center. Distribution Specialists
are dedicated to helping employees simplify the process of changing employers, retiring, rolling
over money, or pursuing other distribution options.
2
John Drupa, Poudre Fire Authority's Wachovia Securities Financial Advisor, has not, nor will he in the
future, use meetings in order to solicit outside business. In addition, Prudential Retirement's Education
and Enrollment team members are employees of Prudential Retirement. They are not compensated on a
commission basis and have no incentive to solicit outside business. They strictly provide education and
enrollment services to the clients serviced by Prudential Retirement and do not operate in a sales capacity.
Incentives for representatives are not tied to any product or investment.
Prudential's in-house communication team provides applicable education materials in a presentable way.
Their sample brochures and newsletters offered insight into both investments and plan structure. A
variety of retirement calculators, fund specific information, participant specific information, and financial
planning tools were available through Prudential's online website. The onsite educational seminars
would apply to a wide range of participants, but the topics seem broad and generic. One concern is that
John Drupa is paid commissions. Although Prudential states he will not solicit outside business, this
needs to be monitored by Poudre Fire. In addition, if retained, the new contract should be amended to
expressly prohibit the solicitation of outside business and offer monetary damages back to the plan for
non compliance.
Recordkeeping
Recordkeeping System: Prudential developed its recordkeeping system in partnership with SunGard,
which produces software for the defined contribution industry. The system was implemented in 1993 and
is continually upgraded. Since 1999, Prudential has used an enhanced and proprietary version of
SunGard's OmniPlus. Other than the core software, SunGard's OmniPlus, all of Prudential's
recordkeeping software and systems have been developed internally. In May 2004 Prudential upgraded to
OMNI 5.2.
Systems Backup: Prudential utilizes Comdisco utilities to backup the system on a daily, weekly, monthly,
and annual basis. Backup data is stored off -site, but can be retrieved within 24 hours. Prudential has
developed a disaster recovery plan that incorporates recovery of the system at a hotsite in the event of a
disaster at a computer facility. Disaster recovery tests are conducted twice a year. The last disaster
recovery test was conducted at the December 31, 2003 year-end and it was successful.
Payroll/Wire Reconciliation: Prudential can reconcile payroll contributions before Poudre Fire wires the
funds.
Contribution Processing: Prudential can post fund purchases on the same date as the contribution is
deducted from the participants' paychecks, if the data from Poudre Fire is reconciled in advance of actual
wire from Poudre Fire.
Recordkeeping System Security: All of Prudential's systems are secured to prevent unauthorized use.
Prudential has a team of technicians responsible for ensuring that all security solutions are up to date.
Access to their systems is permitted in a controlled manner. Prudential logs all system access that occurs
within each of their computer platforms. System Security Administrators review these logs to ensure that
only authorized users maintain their access. In addition, there are several automated processes in place to
prevent unauthorized access to business or client data. These preventive processes route unauthorized
access attempts to System Security Administrators, who ensure that security firewalls have not been
compromised.
System Modifications for Legislative Changes: Prudential does not charge for required system changes
for new laws or regulations.
3
4. Contract Period. [Option 2] This Agreement shall commence 200_,
and shall continue in full force and effect until 200_, unless sooner terminated as
herein provided. In addition, at the option of the City, the Agreement may be extended for
additional one year periods not to exceed _ (_) additional one year periods. Pricing changes
shall be negotiated by and agreed to by both parties and may not exceed the Denver - Boulder
CPI-U as published by the Colorado State Planning and Budget Office. Written notice of
renewal shall be provided to the Service Provider and mailed no later than ninety (90) days
prior to contract end.
5. Delay. If either party is prevented in whole or in part from performing its
obligations by unforeseeable causes beyond its reasonable control and without its fault or
negligence, then the party so prevented shall be excused from whatever performance is
prevented by such cause. To the extent that the performance is actually prevented, the
Service Provider must provide written notice to the City of such condition within fifteen (15)
days from the onset of such condition.
[Early Termination clause here as an option.
6. Early Termination by City/Notice. Notwithstanding the time periods contained
herein, the City may terminate this Agreement at any time without cause by providing written
notice of termination to the Service Provider. Such notice shall be delivered at least fifteen (15)
days prior to the termination date contained in said notice unless otherwise agreed in writing by
the parties. All notices provided under this Agreement shall be effective when mailed, postage
prepaid and sent to the following addresses:
SA 10/01
19
Compliance Testing: Prudential can perform the following compliance testing services as part of the
service agreement:
401(k)/401(m) discrimination testing
Internal Revenue Code (IRC) §415 contribution limit testing
IRC §402(g) dollar limit testing on 401(k) deferrals
IRC §416 top heavy testing
IRC §415(c)
Legal Support: Prudential has a staff of ERISA attorneys and paralegals dedicated to the Retirement Plan
Services unit. The Compliance Services Department is responsible for assisting with plan design and
plan drafting issues. Routine questions are at no charge.
1099-R Reporting & Distribution Processing: Distributions are only limited by the terms of the plan.
Upon receipt of distribution forms in good order, Prudential executes the trades to generate funds, audits
the information, and distributes the check. In January of the year following distribution, Prudential will
issue Form 1099-R to the participant.
Participant Statements: Prudential's objective is to send quarterly statements to participants summarizing
their account activity within 10 days of quarter -end. Online statements are available in 7-8 days on the
website covering any 90 day period. Transaction confirmations are sent to participants within 48 hours of
a transaction.
Plan Reporting: Prudential generates certain reports to Plan sponsors automatically. Weekly reports are
sent detailing contributions, loans, withdrawals, and plan market values. A quarterly report is prepared to
provide a summary of the participants' activity by money source, fund, and activity. An annual certified
copy of the trust activity and age 70%z report are prepared each year. Reports can be requested ad hoc as
well.
Report Customization: Plan level reports can be requested from Prudential, or Poudre Fire can run them
directly from the website. The website has model reports, but a report builder tool is available to create
more custom reports. Participant statements are available in different formats and participants can choose
the level of detail on their statements on an individual basis.
Internet Access: Prudential provides plan sponsor Internet access through their Online Retirement Center
website. Poudre Fire can access participant level activity, find investment performance, monitor plan
level statistics, read compliance newsletters, and request ad hoc reports at this website. The website is
available for plan participants detailing plan information such as eligibility, matching formulas, and
vesting. The website also allows participants to view, monitor, and manage their retirement account.
Retirement planning calculators, social security calculators, and investment advice (if chosen by Poudre
Fire) are available at the website.
Anticipated Problems: N/A
Administration
Voice Response System & Web Access: Prudential provides Poudre Fire plan participants the ability to
execute transactions through their Interactive Voice Response System (IVR) and the website. All of the
services listed in the Statement of Work and in the proposal, with the exception of address changes,
beneficiary designations, and investment advice are standard services offered on both the NR and
website.
0
The IVR is has been in effect since 1997. Participants using the IVR can transfer to a call center operator
at any time during service hours, 6:OOam to 6:OOpm MT, Monday through Friday (excluding major
holidays). The average response time to access a representative from the VRS is 10 seconds.
VRS and Web Capabilities & Platform: Prudential's IVR and website serve over 7,637 defined
contribution plans. Prudential's IVR supports 144 simultaneous connections. The Participant Service
Center received approximately two million calls in 2003. The Online Retirement Center website can
support approximately 130,000 log -ins per day. Currently, the average number of log -ins to the site is
approximately 11,000 per day. To date, neither the IVR nor the Online Retirement Center has ever
approached maximum capacity. Prudential schedules routine maintenance on equipment and systems
when website usage is at its lowest (e.g., Mondays between 2 a.m. and 5 a.m., Eastern time).
Complaints: Participant questions and complaints are first routed to the Participant Service Center. If the
issue is not resolved, it is escalated to the Client Services Team Leader who will work with the participant
to resolve the issue.
Personal Identification Numbers (PINS) and Passwords: Personal Identification Numbers are
individually selected by each participant the first time they call the IVR or log onto the participant
website. A participant needs to input his or her Social Security Number and PIN to access the Interactive
Voice Response Service and to change the PIN. Three incorrect PIN entries locks a caller out of the IVR.
If the PIN is lost, the participant may speak with a Participant Service representatives to reset the PIN.
Age 7W12 Distributions: Prudential will calculate, notify, and distribute to qualifying participants their
minimum required distribution on an annual basis. Payments are made according to the participant's
election on the distribution form.
Fund Transfers: Participants may transfer among the plan investment options daily via the IVR, website,
or through a participant services representative. Transfer requests are processed the next business day
based on that day's closing share price. Transaction confirmations will be mailed within 2 business days.
QDROs: QDROs are processed in accordance with plan guidelines. The alternate payee is set up on the
system and the account of the participant is separated. Prudential has an outsourcing arrangement with
QDRO Consultants, Inc. to make QDRO determinations. The fee is $500 to set up the process and $350
per QDRO determination.
Plan Loans: Participants may initiate loans via the VRS, website, or through a participant services
representative.
Hardship Withdrawals: Participants may initiate loans via the VRS, website, or through a participant
services representative.
Investment Services
Prudential's total investment universe consists of over 600 funds in the open -architecture "PruArray". As
the incumbent, the proposal includes retaining all of the existing options as well as the three separate
accounts (MIDCAP Account, Core Equity Account and PRIDEX Account).
Prudential's proposal includes the choice of two general account fixed income funds: the GIA and the
GIF. The GIA includes a hybrid crediting method, where new money and old money receive different
crediting rates. The GIF contains a book value payout where both new money and old money receive the
same crediting rate. Both options are general account backed and do not have an explicit expense ratio.
Rather, the options have an implied margin or spread that typically ranges from 1.00%-2.00%. Based on
5
the current asset allocations, the weighted average expense of the Prudential investment menu is 0.92%
(which assumes a 1.00% fee on the Fixed Income option).
The strength of Prudential's investment proposal is based on their position as the incumbent provider
where no changes to the investment menu would be required. They have also offered to provide the
ability to customize a menu of NAV mutual funds from the PruArray. The primary drawback to the
investment proposal is the requirement of the GIA or GIF general account fixed income options which are
typically not as competitive as stable value funds.
Cost Proposal
Prudential is proposing that their services will be paid for by the revenue sharing and management fees
they collect from the mutual funds and the spread on the Fixed Interest Option. They did not specify a
revenue requirement. Under their proposal, they will increase the administrative allowance to $30,000
per annum.
Investment advice is provided by Financial Engines where additional set-up and ongoing charges apply.
A self -directed option is available $100 per participant fee. Prudential charges $75 for loan origination,
$25 for loan maintenance and includes full service QDRO processing. The proposal has waived all fees
for hardship withdrawals, enrollments, rollovers and distributions. All potential termination fees have
been waived.
Since the administrative allowance is static, rather than an allowance based on asset -based revenue
sharing, Poudre Fire will not be able to participate in the growth of the plan. Revenue sharing derived
from an asset -based surplus is desirable and gives the Plan fiduciaries choice in terms of adding ancillary
services or reducing overall participant fees.
AIG VALIC
General
VALIC agrees to all requirements in the Statement of Work.
VALIC is a publicly held corporation incorporated under the laws of the State of Texas and is licensed to
do business in Colorado. VALIC Financial Advisors, Inc. (VFA) is a registered investment advisor under
the Investment Advisor Act of 1940, as amended. A List of directors, executive officers, and major
shareholders was included in the response.
AIG VALIC is the marketing name for a family of companies that includes VALIC Retirement Services
Company and VALIC Financial Advisors, Inc. that are subsidiaries of The Variable Annuity Life
Insurance Company, a member of the American International Group, Inc. (AIG). VALIC provides a
comprehensive package of investment options and retirement services through their family of companies
along with AIG Federal Savings Bank (AIG FSB).
From its inception in 1955, VALIC has provided retirement programs and related investment, record
keeping and underwriting services for a variety of employer types across the nation, including hospital
and healthcare organizations, elementary and secondary education institutions, higher education
institutions, governmental entities, and other non-profit organizations. They currently provide tax -
favored retirement program services for more than 28,000 organizations, representing more than two
million accounts, across the nation for various plan types, including Section 403(b), 401(a), 401(k),
403(a) and 457 plans.
Poudre Fire Authority's account will be serviced from the home office in Houston, Texas and the district
office in Fort Collins, Colorado. Most plan sponsor inquires will be directed to a dedicated Relationship
Manager. Most participant inquires will be handled by a local financial advisor.
Mr. Greg Powell (relationship manager) is responsible for overseeing the administration of the plan
within VALIC's home office on an ongoing basis. Mr. Powell will oversee all plan -level activity, plan
administration, servicing and program support. He will work with the local servicing team, consisting of
the regional vice president, district manager and the local financial advisor.
Mr. Dale Forde (district manager) will be the local point of contact for Poudre Fire Authority, and will
have overall hands-on management responsibilities. The district manager is also responsible for the
financial advisor and will respond to questions and service issues. Mr. Forde also functions as a liaison
between the district and home office. In this capacity, he assures that issues concerning the plan are
addressed in a prompt and thorough fashion.
Out of 26,317 plans that VALIC services, 2,471 (9.3%) of the plans have between 100 and 500
employees and 270 (1.0%) of the plans have between $20 and $50 million in assets. Public retirement
plans represent 56 percent of VALIC's defined contribution business. VALIC currently provides services
to sponsors of approximately 235 public retirement plans in Colorado.
To ensure a successful conversion for Poudre Fire Authority's retirement program, VALIC will assign a
team from the home office and district office in Fort Collins, Colorado. VALIC would try to minimize
the time commitment from Poudre Fire Authority personnel during the phases of the relationship
including enrollment, implementation, and ongoing operations.
7
The members of the transition and ongoing service team have, on average, six years of experience in the
industry. VALIC assigns a dedicated implementation consultant to handle all aspects of plan setup and
conversion. Their first step is to create a timeline of implementation activities and responsibilities.
Important milestones like signing agreements, developing an enrollment plan (including dates and
locations for meetings), assigning local contacts, establishing formats and procedures for transmitting
contributions, conducting enrollment meetings, testing files, transferring plan assets, and activating the
voice response system and Web site are all handled by this team. A sample timeline was included in the
response.
VALIC has not been the subject of any disciplinary action by any security regulatory agency. Over the
past ten years, The Variable Annuity Life Insurance Company ("VALIC") is and has been a party in
general litigation matters, most of which are routine and ordinary to its business and services. VALIC
Financial Advisors, Inc. and the Variable Annuity Marketing Company ("VAMCO"), now dissolved, are
and were broker -dealer subsidiaries of VALIC during this time and have been parties to general litigation
matters, most of which are routine and ordinary to their businesses and services. From time -to -time,
certain employees, directors and registered representatives have been named as additional parties to such
actions. All closed matters were dismissed, settled, or otherwise resolved on terms satisfactory to all
VALIC parties. VALIC, VAMCO and certain directors are also parties in a class action lawsuit. This
action is pending before the United States District Court for The District of Arizona. Generally, this
lawsuit is similar to those brought against other annuity providers over the past few years and alleges that
deferred annuity contracts are not suitable for tax -favored retirement plans. Given the inherent
uncertainties of litigation, it is not possible to predict the ultimate outcome of any of the above matters.
However, VALIC strongly believes it has good and adequate defenses to the claims brought against the
company and is currently and vigorously defending these matters. VALIC is a subsidiary of American
International Group, Inc. ("AIG"). We are not in a position to adequately know of or comment upon the
litigation matters of AIG.
AIG Federal Savings Bank (AIG FSB) is prepared and willing to accept fiduciary responsibility for the
proper holding and disposition of plan/participant assets consistent with the direction it receives from the
employer or named trustee. AIG FSB does not provide discretionary services. AIG FSB acts only as a
custodian or directed trustee. It does not assume fiduciary responsibilities for the plan as a whole or as a
plan administrator or investment advisor. However, as a key element of their standard business practices,
they strive to act with the care, skill, and prudence necessary to protect the interests of plan participants
and beneficiaries.
VALIC home office employees are insured under insurance and self -insured programs in force for all
American International Group, Inc. (AIG) subsidiaries and affiliates. AIG (together with AIG VALIC
and AIG FSB) maintains a self-insurance program for $5,000,000 for all claims made against AIG and its
subsidiaries.
Over the last three years, VALIC has lost 145 clients totaling $20.8 million in assets while gaining 1,067
clients totaling $733.1 million in assets. VALIC is not aware of any lost clients who have terminated the
relationship due to service issues. The primary reasons for these changes are related to organizational
changes such as mergers, acquisitions, dissolutions. In some cases, plans are terminated or frozen and
replaced with a new plan in which VALIC is a carrier. Five references were given in the response that
represents governmental plans with similar demographics as Poudre Fire Authority. They have not
converted any accounts in the last three years from Prudential.
VALIC provides any assistance necessary to the Plan's auditors, both internal and external, to conduct
their operations.
VALIC utilizes several methods to notify clients of legislative or regulatory changes that may affect their
programs. First, a newsletter provides updates on such changes periodically. This publication is sent to
clients, as well as all field offices and relationship managers. Secondly, local financial advisors, district
managers, and relationship managers will be available to discuss any pending legislation. Finally,
VALIC's Web site features the most current news, legislation, and regulatory updates that may affect
retirement programs.
VALIC is willing to discuss offering Retiree Health Savings Plans to the Poudre Fire Authority's
participants upon the receipt of additional information about the Poudre Fire Authority's specific needs.
Employee Communication
VALIC will provide Poudre Fire Authority with a participant friendly multi -media array of
communications materials as well as local service in order to ensure the appreciation and growth of
Poudre Fire Authority's retirement plan. VALIC's communication and education services include an
announcement program, group orientation sessions, individual participant counseling, plan enrollment,
ongoing educational programs and follow up visits from Financial advisors.
VALIC also offers face-to-face or group meetings, client service via telephone, an automated voice
response system, and a web site with an array of educational materials.
VALIC has a five -stage process education program. The first stage, planning, addresses the objectives of
the plan, the timeframe, and logistics of the communication plan, and the development of communication
materials. For the second stage, transitioning existing plan participants to the new plan, VALIC believes
direct mail and group meetings are effective in communicating the new plan's advantages. The third
stage focuses on educating new participants and newly eligible employees. Step four deals with the
design of ongoing communication meetings and materials. Finally, financial advisors will meet with
Poudre Fire Authority's employees on a one-to-one basis to discuss their unique needs and retirement
saving objectives and will provide counseling and advice. Sample communication and education
materials were provided in the response.
VALIC produces all communication and education materials in-house through their Marketing
Communications department. They would also create a custom education campaign for Poudre Fire
Authority's participants based on the goals and objectives of the retirement plan. There is no additional
cost to create a custom education campaign.
VALIC financial advisors are licensed to sell ancillary products such as IRAs or life insurance and can
offer these products to participants. Poudre Fire Authority's financial advisors will be provided
guidelines and will be closely monitored by field management during quarterly and annual reviews to
ensure compliance. Financial advisors are compensated using a salary and bonus structure. The bonus
compensation is based on client satisfaction and plan participation. To ensure unbiased education, they
do not provide any incentives for recommending a particular investment option. Financial advisors may
receive additional compensation for the sale of life insurance and annuities only if these products are
approved for sale by Poudre Fire Authority. These financial advisors hold SEC, NASD, and Colorado
registrations to market products in Colorado.
VALIC's participant education plan is logical and straightforward. It is supported by experienced
professionals and diverse forms of communication. VALIC's website contains a range of pertinent
investment advice, retirement literature, and life planning tools; however, it lacks fund specific
information. VALIC's main competency seems to be on one-to-one and group seminars/meetings.
However, they are commissionable sales people and Poudre Fire Authority should insist that these
meetings not be used as a sales opportunity for their representatives because that conflict of interest
9
certainly exists. The sample communication materials covered a broad range of topics for different levels
of investor sophistication. These samples, while not customized in the response, can be tailored to
address Poudre Fire Authority's needs.
Recordkeeping
Recordkeeping System: VALIC leases DST Systems, Inc.'s TRAC-2000 System to provide
recordkeeping services to clients. TRAC-2000 was first put into place at VALIC in 1997 and is
consistently being updated to accommodate regulatory changes. The most recent update was in March
2004.
Systems Backup: DST Systems, Inc. has an agreement with a disaster recovery organization to provide
disaster backup protection for DST's Winchester data center. The agreement includes the use of two sites,
one in Philadelphia and the other in Chicago. The combined capacity of both sites includes multiple
mainframe computers (IBM and Hitachi), with more than 1000 MIPS (Millions of Instructions Per
Second) and more than 4,500 gigabytes of disk storage. Backup tapes are created nightly and moved to
offsite vault storage in downtown Kansas City, Kansas. A second set of backup tapes is stored at another
location. These records are archived and are available for inquiry after restoration.
Payroll/Wire Reconciliation: VALIC will reconcile payroll contributions each week before Poudre Fire
wires the money to VALIC. VALIC has the ability to process participant contributions and loan
repayments submitted in the sample file layout.
Recordkeeping System Security: In addition to terminal and operator security, TRAC-2000 provides
security to be established at the plan, facility, and function levels. Dedicated communication lines are
used to provide access to the TRAC-2000 system. The Internet Web site provides two levels of security.
To secure access to the account, the participant is prompted to provide a personal identification number
(PIN). To secure the communications between the participant's personal computer and the online server,
VALIC utilizes a security protocol called Secure Sockets Layer (SSL) that provides communications
privacy and authentication over the Internet.
Quality Control: VALIC controls administrative and recordkeeping functions by using "on -hand" counts
(number of outstanding transactions to be processed at a given time) and "aging" reports that ensure the
oldest unprocessed transactions receive attention first. For each plan, cash movement is reconciled daily
to participant transactions on the recordkeeping system. VALIC uses a variety of edits, including both
online and batch, for financial and non -financial activity. Each plan's records and transactions are subject
to scheduled audits by VALIC's internal audit unit. Every October, VALIC develops a schedule of
internal audits to be performed in the following year.
System Modifications for Legislative Changes: VALIC does not charge for regulatory updates to their
system or for plan changes resulting from these updates.
Compliance Testing: VALIC will perform the following compliance testing services at no additional
costs:
401(a) (9) (age 70 % distribution testing)
402(g) limit testing includes reporting of participants approaching the 402(g)
limit
IRC 415(c) (contribution limits for DC Plans) testing
Distribution, loan and income summaries required for a plan's year end audit
Legal Support: VALIC has a staff of ERISA attorneys dedicated to defined contribution activities.
VALIC offers prototype plan documents and standard plan documents with various provisions. If this
10
does not meet the plan sponsor's needs for customization, client -requested modifications to VALIC's
standard documents can be made, subject to approval. VALIC can assist Poudre Fire in submitting a
custom plan document for approval by the IRS. However, this service will result in an additional fee.
1099-R Reporting & Distribution Processing: VALIC prepares and distributes all tax forms required by
the Internal Revenue Code to any participant who has received a distribution in the given plan year by
January 31, following the year in which the distribution has been made.
Participant Statements: VALIC mails participant statements within 15 days of quarter end. Detailed
information includes a bar graph depicting beginning and ending quarterly plan balances, a pie chart
illustrating investment summary information, transactions occurring during the quarter, including
contributions, investment activity including investment selections, beginning and ending balances,
contributions, withdrawals, loans, transfers, and net change in value, investment instructions (allocations)
and annualized investment performance.
Plan Reporting: VALIC offers a secured Plan Sponsor Web site to access plan and participant level
information 24 hours a day, seven days a week. The plan sponsor can access trust reports at any time and
use a myriad of various parameters through the Web site. In addition, trust reports, plan forfeiture
reports, participant termination reports, contribution reports and distribution reports are available upon
request. These reports are generally reviewed and mailed within one month after the end of the reporting
period. The standard reporting frequency is quarterly.
Report Customization: Poudre Fire will have the ability to run ad -hoc trust reports through the Plan
Sponsor Web site. The trust report summarizes plan activity, including plan sponsor/participant
contribution totals, investment gain/loss and account transactions. Standard customization to participant
statements, such as company logos can be accomplished without incurring an additional charge.
Internet Access: The website can accommodate all of the services listed in the Statement of Work.
However, account balance projections and some investment advice is at an additional charge.
Anticipated Problems: VALIC does not foresee any specific problems incorporating this plan into the
recordkeeping system.
Administration
Voice Response System & Web Access: VRS is fully integrated online with the recordkeeping system;
therefore, the information available to participants is current as of the close of business the preceding day.
All information is updated nightly. The VALIC participant website includes information on a variety of
topics such as investment options, products and performance, education and planning, account access and
news updates
VRS and Web Capabilities & Platform: The current network architecture is predominantly SNA/VTAM
supporting mainframe to mainframe communications, 3270 cluster controllers, and LAN -attached
devices. Currently, the TRAC-2000 voice response system can process up to 110,000 calls per day. The
highest volume to date has been 92,000 calls. VALIC maintains back-up systems for both the Internet
and VRS able to accept overflow capacity. VALIC's VRS and Internet are down less than '/z hour per
month for routine maintenance. This maintenance takes place at a tracked time of low volume.
Complaints: All complaints from participants or plan sponsors are documented on a Hot Line Call Form.
Each complaint is tracked and aged through its resolution electronically via an Automated Work
Distributor (AWD). Items are circulated through management in five-day increments. If a Client Service
Professional cannot answer a participant's question, Customer Service Managers are available to take over
11
the call. If an issue is escalated and needs research, the Client Service Professional will initiate the
search, coordinate the response and call the participant back with the resolution. Any unresolved
complaints or potential problems will be brought to the Poudre Fire's attention by the Poudre Fire's
dedicated Relationship Manager within 30 days.
Personal Identification Numbers (PINS) and Passwords: To access account specific information through
voice response, participants must enter a confidential personal identification number (PIN) and a valid
Social Security number. The same information is required of participants who use the voice response
system or the Internet. Participants will receive a PIN prior to the activation of the voice response system.
Participants can reset their PINs through the voice response system or Web site. Once the PIN has been
reset, participants can change it at any time. A confirmation will be sent notifying the participant of the
PIN change. For security reasons, this letter does not contain the PIN.
Age 70'% Distributions: VALIC notifies participants who are 70%z and are required to receive minimum
distributions. They automatically calculate and process minimum distributions according to the plan
document. VALIC's system will calculate a minimum distribution amount based on the account balance
at the end of the prior plan year using appropriate IRS tables and rates. The participant is advised of the
upcoming minimum distribution, which is processed prior to December 31 (April 1 for initial payments).
Fund Transfers: If a participant initiates a monetary transaction prior to 2:00 p.m. MST during normal
business hours of the stock market, the transaction will be processed that business day using closing
prices from that day. If the participant initiates the transaction after 2:00 p.m. MST, the transaction will be
processed the next business day.
QDROs: QDROs are processed in accordance with plan guidelines. The recipient is set up on the record
keeping system and VALIC transfers the amount from one account to another using a QDRO code for
auditing purposes. Withdrawals are subject to the 20 percent mandatory income tax withholding, but not
the 10 percent early withdrawal penalty tax.
Plan Loans: Poudre Fire participants may request a traditional (paper) loan through one of VALIC's
telephone Client Service Professionals (CSP). Processing additional payments, multiple loans, and
missed payments can be accommodated through the CSP. Checks are issued and mailed within one
business day.
Hardship Withdrawals: VALIC can perform non discretionary review of hardship withdrawal requests
and process such requests with approval from the Plan Administrator. The named Plan Administrator
would be responsible for ensuring that these procedures are in agreement with plan provisions. VALIC
will review, provide ministerial approval, and process the transactions subject to the guidelines. Hardship
withdrawal requests that fall outside the administrative guidelines or require discretionary approval would
be referred to the plan sponsor for final determination.
Investment Services
AIG VALIC's total investment universe consists of over 2,000 funds from over 40 different fund
families. VALIC has expressed their willingness and ability to add funds outside their network as
requested by the plan sponsor. The proposal includes replacing the three separate accounts (MIDCAP
Account, Core Equity Account and PRIDEX Account) as well as replacing nine existing funds with
outside mutual funds.
VALIC's proposal includes the VALIC Fixed Interest Options which is an insurance company backed
account. The option does not have an explicit expense ratio, rather the option has an implied margin or
spread that typically ranges from 1.00%-2.00%. Based on the current asset allocations, the weighted
12
average expense of the AIG VALIC proposal is 0.87% (assumes 1.00% fee on the VALIC Fixed Interest
Option). The proposal requires replacing the Dryden Stock Index Z (0.40% expense ratio) with the
Dreyfus Stock Index (0.52% expense ratio).
The strength of VALIC's investment proposal is based on their ability to offer a customized menu of
NAV mutual funds. They offer a considerable universe of funds to select from and are generally willing
to add outside investment managers. The primary drawback to the investment proposal is the requirement
of the VALIC Fixed Interest Option and the relatively expensive Dreyfus S&P 500 Index.
Cost Proposal
VALIC is proposing that their services will be paid for by the revenue sharing and management fees they
collect from the mutual funds and the spread on the Fixed Interest Option. They require 0.30% in revenue
sharing and will pass all revenue sharing above 0.30% back to the Plan with the exception of 12b-1 fees.
Investment advice is provided by Ibbotson Associates where personalized account management is
available for an asset -based fee of 1.00% (breakpoints available over $100,000). A self -directed option is
available through Schwab PCRA for a $50 per participant fee. VALIC charges $50 for loan origination,
$30 for loan maintenance and includes QDRO processing. The proposal has waived all fees for hardship
withdrawals, enrollments, rollovers and distributions. VALIC will charge a termination fee
(approximately $80,000) to recoup start-up costs if the Plan leaves within the first three contract years.
The price proposal from VALIC is somewhat higher than the most competitive proposals as they require
0.30% in revenue plus the spread on their Fixed Interest Option.
13
Collusive or sham proposals: Any proposal deemed to be collusive or a sham proposal will be
rejected and reported to authorities as such. Your authorized signature of this proposal
assures that such proposal is genuine and is not a collusive or sham proposal.
The City of Fort Collins reserves the right to reject any and all proposals and to waive any
irregularities or informalities.
Sincerely, n nn
am s B. O'Neill ll, CPPO, FNIGP
ire for of Purchasing & Risk Management
City:
Service Provider:
In the event of early termination by the City, the Service Provider shall be paid for services
rendered to the date of termination, subject only to the satisfactory performance of the Service
Provider's obligations under this Agreement. Such payment shall be the Service Provider's sole
right and remedy for such termination.
7. Contract Sum. The City shall pay the Service provider for the performance of
this Contract, subject to additions and deletions provided herein, the sum of
Dollars ($ ) [Option Cost Breakdown is attached Exhibit "C"]
8. City Representative. The City will designate, prior to commencement of the
work, its representative who shall make, within the scope of his or her authority, all necessary
and proper decisions with reference to the services provided under this agreement. All
requests concerning this agreement shall be directed to the City Representative.
9. Independent Service provider. The services to be performed by Service
Provider are those of an independent service provider and not of an employee of the City of
Fort Collins. The City shall not be responsible for withholding any portion of Service Provider's
compensation hereunder for the payment of FICA, Workmen's Compensation or other taxes or
benefits or for any other purpose.
10. Personal Services. It is understood that the City enters into the Agreement
based on the special abilities of the Service Provider and that this Agreement shall be
considered as an agreement for personal services. Accordingly, the Service Provider shall
neither assign any responsibilities nor delegate any duties arising under the Agreement without
the prior written consent of the City.
SA 10/01
20
Charles Schwab Corporate Services
Genera[
Schwab agrees to all requirements in the Statement of Work.
The Charles Schwab Corporation is incorporated in the State of Delaware and is licensed to do business
in all 50 states. Through Charles Schwab & Co., Inc., U.S. Trust Corporation, CyberTrader, Inc., and its
other operating subsidiaries, Schwab employs approximately 17,000 professionals who serve nearly 8
million active accounts with $1 trillion in client assets. Charles Schwab Corporate Services is not a
registered investment advisor. Schwab provided a list of directors, executive officers, and major
shareholders.
Charles Schwab Corporate Services offers retirement plan services including recordkeeping, actuarial,
and related administrative services through Schwab Retirement Plan Services, Inc., trustee and custodial
services through The Charles Schwab Trust Company, proprietary retirement plan recordkeeping systems
through Schwab Retirement Technologies, and the Schwab Personal Choice Retirement Account (PCRA)
self -directed brokerage account through Charles Schwab & Co., Inc. Each of these entities is an affiliate
of the other.
Mr. Morgan McKay will serve as the Client Service Manager for Poudre Fire and serve as the primary
contact. With the addition of Poudre Fire, Mr. McKay will service 15 retirement plan clients. Included in
his portfolio are such clients as the City of Littleton Fire Department, City of Aurora Fire Department,
West Metro Fire Protection District, City of Northglenn Police Department, and the City of Westminster
Employee Plan. The turnover rate at Schwab Corporate Services has averaged 9 percent over the last four
years.
The total market value of bundled defined contribution plans administered by Schwab Corporate Services
as of March 31, 2004 was $23.8 billion and the total number of participants was 391,764. Schwab
provided a breakdown of the number of plans by number of participants and number of assets. The total
number of plans serviced among the breakdown is 692. As a comparison to Poudre Fire Authority's plan,
Schwab services 303 (43.8%) plans that have between 100 and 500 employees, and 183 (26.4%) plans
that have between $20 million and $50 million in assets. Public retirement plans comprise less than 1 %
of their total defined contribution plan business. Schwab currently services nine Public Retirement Plans
in the state of Colorado.
Each plan is assigned a Conversion Team that is led by a Senior Conversion Manager. The team includes
a Conversion Consultant (responsible for data reconciliation), Conversion Payroll Specialist (responsible
for the set-up and processing of the contribution file), Quality Assurance Specialist (audits the
reconciliation and reviews system set-ups for the plan) and Conversion Administrative Assistant
(provides support to the entire team).
The Conversion Team will oversee development of the conversion timeline, completion of the service
agreements, resolution of the plan's design issues, investment fund selection issues, plan document
drafting, development of participant communication and education programs and a conversion
methodology. Schwab has converted over 750 daily valued plans from virtually every major
recordkeeping system. They have converted several clients that were converted from Prudential over 5
years ago; however, none within the past 3 years. Schwab will be converting a new client (eBay, Inc.)
from Prudential during Q3 of 2004.
14
The conversion process is divided into four phases. Phase 1 includes the drafting of documents,
developing a project plan, evaluating a plan design and preparing plan documentation. Phase 2 involves
coordinating data gathering from the current vendor, an announcement of the plan enhancements sent to
participants and employee meetings. During Phase 3, the assets are transferred, the current investments
are mapped to the new funds and the assets are reconciled. During the final Phase, the VRS and website
go live and the plan becomes operational. The blackout period is largely determined by the prior
recordkeeper's ability to send final account valuations to Schwab. However, once Schwab receives final
reconciled data, the plan is typically live within five days.
With respect to recordkeeping services provided by SRPS, there is no current or past litigation brought in
a federal or state court that has been instituted by any Plan or Plan Sponsor. However, SRPS has been
named in a few such litigation matters instituted by individual participants. In an excerpt of the
company's most recent 10-K filing, Schwab addresses legal issues pertaining to market timing in the
Excelsior Funds.
SRPS does not act as a fiduciary and has no discretionary authority over tax -qualified retirement plans.
The Charles Schwab Trust Company (CSTC) acts as a directed, nondiscretionary Trustee (or as Custodian
of such assets where the assets are trusteed elsewhere) with respect to assets of qualified retirement plans.
The Trustee is subject to the provisions of ERISA; to the extent such provisions apply to its
responsibilities.
Schwab carries Fiduciary Dishonesty Insurance underwritten by Travelers Casualty and Surety of
America which covers retirement plans at Charles Schwab Trust Company for loss of plan assets due to
dishonesty or fraud of CSTC employee, as required by Section 412 of ERISA. They also maintain a
comprehensive corporate insurance program, underwritten by Lloyd's of London that is commensurate
with the risks attendant in the services provided to clients. The policy is limited to $600 million in
aggregate.
Over the last three years, Schwab Retirement Plan Services has gained 242 clients and lost 101 clients.
As a result, they added $4.103 billion in plan assets. According to Schwab, most of the clients that ended
their relationship with Schwab were due to merger and acquisition activity or plan termination. Less than
1 % of the clients were lost for servicing reasons.
Employee Communication
Schwab's employee education program consists of two phases designed to accomplish this goal. Phase 1
is a conversion communication campaign while Phase 2 is an ongoing communication program.
The conversion communication campaign creates awareness of the change and reinforces a sense of
excitement about the plan's benefits. These objectives are met with an array of formants that include:
pre-recorded seminars and live online workshops over the internet; on -site education in either formal or
small group/one-on-one sessions (Spanish language presentations are also offered); direct mail campaigns
alerting participants of the change along with key dates and reminders; education guide CD-ROM that
provides enrollment directions, forms, fund information, and investing principles; an interactive CD-
ROM giving employees complete access to all plan information including plan highlights and provisions,
core fund information, investment principles, interactive investor profile tools, as well as links to
additional information online; and a custom multimedia campaign to reinforce Poudre Fire Authority's
key messages and concepts.
The ongoing education program is designed to develop and implement an annual strategy of programs —
both "across the board" to all employees and "uniquely targeted" to the demographics of employees and
to reinforce awareness of the plan as a valuable employee benefit. Schwab provided a very generic
15
outline of their education capabilities similar to the direct mail, on-line, and multimedia campaigns
described above. However, they did include samples of each of their communication techniques. The
materials offer a glimpse of the highly customized education available to different groups of participants.
With a few exceptions, all of Schwab's education materials are written and developed in-house by a team
of communication and graphic design professionals. The materials are designed based on feedback from
ongoing participant surveys, program evaluations, industry research, and focus group input.
Schwab presenters do not use on -site education meetings to solicit outside business. All SRPS employees
are salaried, full-time employees and are not compensated with commissions, incentives, or in any other
manner that would encourage representatives to influence a participant's choice of an investment option.
While all Schwab Education Specialists and Advice Representatives are required to be Series 7, 63, and
66 licensed, they do not possess those licenses to sell any products nor do they give direct investment
advice.
Schwab's communication program offers various options and services for plan sponsors and participants.
The timeline for the conversion and on -going communication seems reasonable and flexible, but was not
as detailed as the other candidates were. On -going seminars are well diversified and cover a wide range
of topics. Participants have access to one-on-one meetings with representatives. All of the samples were
straightforward and included pertinent investment concepts and timely investment topics.
Recordkeepinp
Recordkeeping System: In 1998 Schwab introduced the Schwab Retirement Information (SRI) system.
The SRI is an integrated daily valuation solution linking the recordkeeping system with the SchwabPlan
website, voice response system, and participant service representatives. The SRI is updated
approximately four times per year. The SRI hardware is completely dedicated to defined
contribution/deferred compensation administration.
Systems Backup: Records are backed up daily and transported offsite. On a monthly basis, back up tapes
are sent to SchwabPlan's record retention facility. SchwabPlan maintains a full Business Redemption
Plan (BRP) as part of company wide information security and business resumption strategy. These BRP
procedures are tested annually. The most recent test of this program, completed in April 2003, took less
than 24 hours to complete. The exercise validated the recovery strategy, integrity of tape backups, and
resources and documentation maintained off -site.
Payroll/Wire Reconciliation: Schwab will reconcile payroll contributions each week before Poudre Fire
wires the money to Schwab. Schwab has the ability to process participant contributions and loan
repayments submitted in the sample file layout, but would like to review an actual file to ensure integrity.
Schwab will send an electronic file of new enrollees and contribution changes each week to Poudre Fire.
Recordkeeping System Security: Schwab has safeguards in place to protect the recordkeeping system
from unauthorized access. Senior management within the Daily Valuation Operations Unit is responsible
for assigning access rights and responsibilities are segregated to prevent an employee responsible for
posting contributions and distributions from also being responsible or settling those transactions.
Tracking reports are maintained to monitor each change on the system, such as a participant name or
address change. Each Schwab employee is issued a password and log -in ID to limit access and permit
management to review error responsibility and monitor each employee's usage of the recordkeeping
system.
Quality Control: Schwab maintains a Quality Assurance Unit to examine and monitor product changes,
maintain copies of software for testing, and collect quality measures. All account positions in the SRI are
16
electronically reconciled on a daily basis. Assets reconciled daily include share positions, cash positions,
and participant loan balances. Schwab's system also performs edit checks on new data and issues
exception reports that are transmitted to plan sponsors.
System Modifications for Legislative Changes: Schwab will normally absorb costs associated with
upgrading the system to accommodate new legislation, regulatory changes, or vendor needs. Upgrades
made for a specific client may incur additional charges, depending on the scope of the project.
Compliance Testing: Schwab will perform the following compliance testing services at no additional
costs:
• 401(a)(9) (age 70'/z distribution testing)
• 402(g) limit testing includes reporting of participants approaching the 402(g) limit
• Internal Revenue Code (IRC) 410(b) ratio percentage testing (coverage test)
• IRC 415(c) (contribution limits for DC Plans) testing
• IRC 416 (top heavy) testing
• Return of excess contributions and or excess aggregate contributions( to highly
compensated employees prior to March 15, assuming accurate and timely employee data)
• ERISA Audit Kit (contains all audit schedules, reportable transactions, and distributions,
loan and income summaries required for a plan's year end audit
Schwab will perform the following compliance testing services at an additional cost:
IRC 401(a)(4) (discrimination) general testing
IRC 410(B) (coverage test) average benefits testing
IRC 414(s) (compensation) testing
Legal Support: Schwab's legal staff is comprised of ERISA attorneys, enrolled actuaries, CPAs, and
other professionals who are knowledgeable about qualified retirement plans. The legal staff offers
consulting and compliance services related to plan design changes, plan amendments, and other plan
guidance.
1099-R Reporting & Distribution Processing: Schwab sends the distribution check and corresponding
Form 1099-R to the employee at the time of distribution.
Participant Statements: Schwab mails participant statements at quarter -end. Plan participants can also
access their statements electronically. Schwab's e-Statement provides account information as well as
links to education and planning tools. The statement is delivered to participants via e-mail. It allows the
attachment to self -decrypt when the participants enter their assigned SchwabPlan PIN.
Plan Reporting: Schwab will provide quarterly and annual cumulative plan reports to Poudre Fire. The
reports should be mailed within five business days of quarter -end and sixty days of year-end. Quarterly
reports provide asset detail, a summary of assets, a schedule of assets acquired and sold, pending trades, a
cash summary, and overall plan summary. Annual trust reports include the quarterly information above
and a brokerage summary, and schedule of 5% reportable transactions.
Report Customization: Schwab can tailor plan management level reports, but additional charges may
apply depending on the scope of the project. The timeliness also depends on the complexity of the
project, but requests are normally processed within 24 hours. Participant statements can be modified
within specific parameters such as company name, logo, and a quarterly message to employees.
17
Anticipated Problems: Schwab does not foresee any problems incorporating the Poudre Fire plan into
their recordkeeping system.
Administration
Voice Response System & Web Access: Schwab will provide Poudre Fire plan participants the ability to
execute transactions through Schwab's Voice Response System (VRS) and the schwabplan.com website.
The VRS has been in effect since 1982. Participants using the VRS can transfer to a Participant Service
Representative (PSR) at any time during service hours, S:OOam to 9:OOpm MST, Monday through Friday
(excluding major holidays). The average response time to access a representative from the VRS is twenty
seconds.
VRS and Web Capabilities & Platform: Schwab's VRS and website serves nearly 400,000 participants.
Schwab's VRS is designed to handle 30,000 calls per day. If maximum usage is within four lines of the
available limit, an additional block of lines is added to the system. To date, the VRS has not reached its
maximum limit resulting in a busy signal to a participant. The website has the ability to handle the entire
participant population "hitting" the website at one time. The website has experienced greater than 99%
live status. Routine maintenance is done after-hours in a manner designed to be transparent to the plan
participant and plan sponsor. The SchwabPlan VRS was developed through Edify software. The
primarily programming languages used are C++, Visual Basic, Delphi, and VB script. The file servers
utilize Netware and NT Server as their operating system.
Complaints: Participant complaints are logged into Schwab's Information Tracking System and an
individual is assigned to resolve the issue. Participant complaints are first channeled to a Participant
Service Representative. If the participant service representative cannot resolve the issue, it is escalated to
a Manager based on the type of issue involved. Most complaints are resolved within one day.
Personal Identification Numbers (PINS) and Passwords: To gain access to Schwab's system, a
participant must enter their social security number and PIN. Participants who lose their PIN can contact a
service representative and receive a new PIN if they can verify their home address, date of birth, and
month/year of hire. The PIN will be effective immediately and a confirmation of the new PIN will be
sent to the home address of the participant. Participants unable to verify the information to receive a new
PIN are directed to the plan sponsor's human resource department.
Age 70'% Distributions: Schwab notifies participants who are 70'/z and are required to receive minimum
distributions. They automatically calculate and process minimum distributions according to the plan
document.
Fund Transfers: If a participant initiates a monetary transaction prior to 2:00 p.m. MST the transaction
will be processed that business day using closing prices from that day. If the participant initiates the
transaction after 2:00 p.m. MST, the transaction will be processed the next business day.
QDROs: QDROs are processed in accordance with plan guidelines. The recipient is set up on the record
keeping system and Schwab transfers the amount from one account to another using a QDRO code for
auditing purposes.
Plan Loans: Poudre Fire can choose either a traditional (paper) or enhanced (electronic) loan processing
method for the plan based on their desired level of involvement. Processing additional payments,
multiple loans, and missed payments can be accommodated with either approach.
IN
With traditional loan processing, participants model and apply for a loan using the VRS, call center or
website. Loan paperwork would be mailed to the participant on the next business day for completion and
return to Schwab. After receipt of the completed paperwork and approval by Poudre Fire, shares are
liquidated and a check is mailed to the participant.
With enhanced loan processing, participants model and apply for a loan using the VRS, call center or
website. This makes loans initiation available 24/7. Schwab will notify Poudre Fire of new loans and
mail the check and appropriate documents to the participant's home within two business days.
Hardship Withdrawals: Schwab handles hardship withdrawals in accordance with plan document
provisions. Schwab will work with Poudre Fire to develop a process for Schwab to approve the hardship
withdrawal distributions, or Poudre Fire can approve the distributions and forward the documents to
Schwab for processing.
Investment Services
Charles Schwab's total investment universe consists of over 3,000 funds from over 300 investment
managers. In terms of the investment menu, Schwab is willing to record -keep most of the existing
options with the exception of the three separate accounts (MIDCAP Account, Core Equity Account and
PRIDEX Account), the Prudential Fixed option and the existing Money Market option. To provide the
most competitive investment menu, Schwab also proposed eliminating a few select investment managers
in lieu of their recommended outside retail mutual funds. The proposal, however, grants full use of their
open architecture investment approach. Using this approach, the Plan would have the ability to customize
a menu of investment managers assuming the pricing guidelines of Schwab are adequately satisfied.
The Schwab proposal includes the Schwab Stable Value fund, subadvised by INVESCO Institutional,
which is a pooled stable value fund with a 0.50% expense ratio. In most cases, pooled stable value funds
provide a better value to participants than general account fixed income options. The proposal also
includes the Schwab S&P 500 Inv index fund which has a 0.36% expense ratio.
The strength of Schwab's investment proposal is based on their ability to offer a fully customized menu
of NAV mutual funds and the Schwab Stable Value fund. They offer a considerable universe of funds to
select from and are generally willing to add outside investment managers as necessary.
Cost Proposal
Schwab is proposing that their services will be paid for by the revenue sharing and management fees they
collect from the mutual funds. Schwab provided excellent fee disclosure and offered to share up to 0.06%
in revenue above 0.30%. The proposed investment menu has a 0.77% weighted average expense and
generated 0.39% in weighted average revenue, which would result in 0.06% in revenue sharing or
approximately $18,600 back to the plan.
Investment advice is provided by Guided Choice at no additional charge. A self directed option, PCRA,
is available for a $100 per participant annual fee. Schwab charges $100 for loan origination, $0 for loan
maintenance and $100 per QDRO processing occurrence. The proposal has waived all fees for hardship
withdrawals, enrollments, rollovers and distributions. A termination fee (to cover the transmittal of
records to the new vendor and start-up costs) would be assessed in the first five contract years for reasons
relating to merger or acquisition activity.
Schwab's cost proposal is conducted on an open disclosure basis and all investment management fees
have been fully disclosed. The 0.30% recordkeeping fee requirement is higher than both ICMA (0.08%)
and Great -West (0.10%).
19
First National Bank
General
First National Bank will agree to all requirements in the Statement of Work and Vendor Qualifications
Document.
First National Bank is chartered under the national banking laws and is authorized to have banking
facilities in Fort Collins, Loveland, and Wellington, Colorado. A list of officers was provided in the
response
Established in 1934, First National Bank is locally managed within the Fort Collins community. For 62
years, First National Bank Investment Management & Trust has been serving customers in northern
Colorado. With current assets under care totaling over $1 billion, they are the largest full service provider
of fiduciary services in northern Colorado. They provide bundled retirement plan services for plan
sponsors and private investment management for individuals, corporations, governments, and
foundations. Their organization administers 374 retirement plans covering 31,343 participants. In total,
they provide recordkeeping services for $1.25 billion dollars in retirement plan assets.
Dale Cloud, Vice President and Relationship Manager, would be Poudre Fire Authority's main contact.
Dale's responsibilities would include the oversight of the entire plan, providing employee training, one-
on-one employee meetings, and would work directly with Poudre Fire Authority to administer the plan.
Dale lives and works in Fort Collins and is supported by a local administrative and portfolio management
staff. Biographies of his supporting staff were provided in the response.
The total number of plans serviced among the breakdown is 374. As a comparison to Poudre Fire
Authority's plan, they service 38 (10.2%) plans that have between 100 and 500 employees, and 6 (1.6%)
plans that have between $20 million and $50 million in assets. They have two Colorado Public
Retirement Plans and three public retirement plans overall.
The same staff will be responsible for conversion and ongoing support. Poudre Fire Authority's account
would be handled entirely from the Fort Collins office. Lorene Kilburn will lead the conversion effort.
Lorene joined First National Bank in 1975. She has served most of those years for Investment
Management & Trust, first in Operations and currently as the Administrative Officer for Retirement Plan
Services. Lorene is responsible for Retirement Plan and IRA documentation, compliance, and tax
reporting. She remains current in her field by attending classes at Colorado State University, AIB, and
Pension Publications, Inc.
First National recommends that conversion planning begin at least 75 days in advance. While the
blackout period is largely dependent on the prior firm, First National estimates the blackout on their end
would be approximately 7 business days.
First National has had no material litigation in the past ten years. First National Bank accepts fiduciary
responsibility of the plan in the capacity of agent to the plan trustee, plan administrator, and custodian.
Fiduciary Liability coverage is through St. Paul Mercury and Travelers Casualty in the amounts of $25
million and $15 million, respectively.
First National Bank could provide trustee services in addition to recordkeeping services. First National
Bank is a bundled service provider, and as such, does not work under a joint venture arrangement.
20
In order to provide plan specific investment advice, First National has arranged with Morningstar
Associates to provide on-line third party advice to the participants. Morningstar Associates is an
investment advisor registered with the Securities and Exchange Commission under the Investment
Advisers Act of 1940. Morningstar Associates is a wholly owned subsidiary of Morningstar, Inc.
Morningstar Associates provides investment education and advisory services to individuals via its
proprietary software platform, Morningstar Advice Online. First National may also use an outside agency
for graphic design and print work to create customized communication materials.
Over the course of the last three years they have lost 14 plans, of these four were plan terminations, one
was a resignation by First National Bank, one was due to a merger, and one was due to the sale of the
company. They have not lost any plans in the last three years for service related reasons. They have
gained at least 28 plans during this time.
They have not converted a plan from Prudential in the last three years.
First National is willing to comply with any auditing request.
First National Bank can offer Health Savings Accounts to participants at an additional cost.
Employee Communication
Relationship Manager, Dale Cloud, will work with Poudre Fire Authority to develop a communication
and education program customized to participant's needs and goals.
Their participant communications approach focuses on on -site, face-to-face meetings and will be tailored
to specific participant populations. Investment Education Seminars are scheduled at on site at convenient
times. By using Investor Profile Quizzes, they teach participants general financial and investment
information such as risk and return, diversification, tax -deferred investing, effects of inflation and how to
determine future retirement income needs.
First National Bank's Communication Plan Elements include, specific transition elements such as post
cards announcing the transition, the transition brochure, and post cards announcing the transition end.
Ongoing education elements include, an education brochure, enrollment and education meetings, a series
of 4 quarterly post cards urging participants to monitor their accounts and investments, quarterly
participant meetings on site at the various firehouses, and general education meetings for new hires as
requested.
First National thinks participants would be best served by a customized education campaign that is
updated each year. First National will use a third party to design materials and included some mock-ups
in their proposal. They also recommend developing a stand-alone web site or provide electronic data to
add a few pages to existing intranet. First National Bank would budget $30,000 the first year and $10,000
in subsequent years for these customized materials. This would be paid by First National Bank and
would not be an additional cost to Poudre Fire Authority.
Every participant can use Morningstar Advice Online to create their own personalized asset allocation
model using the mutual fund options that are available in the retirement plan. An on-line questionnaire
builds participant's preferences. Through the web site, participants can take advantage of investment
education and research to further their investment understanding.
In addition, educational seminars are planned and are available to Poudre Fire at no additional charge.
Seminars are conducted by trained retirement plan professionals, many of which are CFPs or are similarly
21
accredited professional such as CPAs, CFAs, CRPSs, or have equivalent training. Sample slides were
included in their proposal. Their representatives are not compensated by commissions.
Dale Cloud and his team claim to take great care in providing whatever media Poudre Fire Authority
deems necessary for employee education. Despite being the smallest firm in terms of resources, it
appears to us that they will give the most personal contact. Their onsite seminars cover a variety of
retirement related topics, and their partnership with Morningstar will offer solid investment advice online.
The sample materials displayed the highly customized approach First National takes.
Recordkeeping
Recordkeeping System: The First National Bank recordkeeping system was purchased from
Sungard/Corbel. Through Sungard/Corbel First National Bank receives technology updates to their
recordkeeping system, Relius. First National Bank has an internal team of staff members who implement
and test the updates.
Systems Backup: Disaster plans are tested without notice, annually. In the event of a disaster First
National Bank is prepared to operate off -site. Data for the bank is backed up daily either in Fort Collins
or Omaha. Systems are tested annually in compliance with First National and OCC standards. The Bank's
network consists of several layers of firewalls, routers, intrusion detection devices and switches. The
locations of the branches are interconnected through a combination of point-to-point T1 circuits and
frame relay circuits on Qwest's and AT&T's networks. First National utilizes Cisco routers and switches,
HP and IBM servers, HP, EMC and Hitachi SAN/NAS, HP and Storagetech backup devices and IBM
Mainframes throughout the system. Internet connectivity is all controlled out of First National Bank of
Omaha and consists of 3 DS3 Internet backbones. These backbones are on both ULJNet and AT&T.
The First National Bank data center is located in Omaha, NE. The center allows First National Bank to
house critical systems and operations in a secure location. The Omaha Data Center was built with
redundant power, redundant communications, and redundant environmentals.
Payroll/Wire Reconciliation: First National Bank will reconcile payroll contributions each week before
Poudre Fire wires the funds. First National Bank has the ability to process participant contributions and
loan repayments submitted in the sample file layout. First National Bank will send an electronic file of
new enrollees, contribution changes, address updates, and other indicative data each week to Poudre Fire.
Recordkeeping System Security: First National Bank employs a dedicated security staff. Access to
recordkeeping data is provided on a need -to -know basis. Access is also restricted based on an
individual's level of responsibility and service area.
Quality Control: Retirement plans are reconciled daily. Automated audit functions verify that the
total of the plan assets are equal to the total of the participant account balances. Any data
discrepancy is immediately investigated and resolved.
System Modifications for Legislative Changes: First National Bank does not charge for required system
changes for new laws or regulations.
Compliance Testing: First National Bank performs the following compliance services for plan
sponsors:
• §415limit
• §402(g) limit
• IRS Form 1099R for plan distributions
22
Legal Support: There was no mention of internal legal staff to support the plan. First National Bank
can coordinate issues with their client's attorneys. First National Bank can work with plan attorneys to
draft or amend a customized document. For an individually designed plan, the drafting attorney will
prepare the Summary Plan Description and any other ancillary documents needed to administer a plan.
1099-R Reporting & Distribution Processing: As part of First National Bank's standard service, they
provide 1099R forms to participants that take distributions from the plan and will file them with the
IRS at no additional cost.
Participant Statements: First National Bank's objective is to send quarterly statements to participants
summarizing their account activity within 10 days of quarter -end. First National Bank has a 100%
statement accuracy percentage. Online statements are available "on -demand" on the website
Plan Reporting: Each quarter, plan participants will be mailed to their home address a statement of
their account. Statements are customizable. Samples of the reports that are available to Poudre Fire on
Plan Sponsor Web include Plan Summary, Account Totals, Forfeiture Account Analysis, Account
Total By Division, Participant Overview, Investment Naming Convention, Investment Option Totals,
Summary of Investment Performance, Investment Option Transfers, Investment Option/Participation
by Age, Investment Option Balances by Age, Investment Option Participants by Age, Participation
Statistics by Division, Participation Statistics, Hotline/Internet Activity Summary and Summary of
Participant Accounts.
Report Customization: Participant statements are available in custom formats.
Internet Access: First National Bank offers participant Internet access to secure account information 24
hours a day, 7 days a week, using First National Bank's Retirement Gold web site. Poudre Fire can
access participant level activity, find investment performance, monitor plan level statistics, read
compliance newsletters, and request ad hoc reports at this website.
Anticipated Problems: First National Bank does not foresee any problems incorporating the Poudre Fire
plan into their recordkeeping system.
Administration
Voice Response System & Web Access: First National Bank will provide Poudre Fire plan participants the
ability to execute transactions through their Voice Response System (VRS) and the website. The website
or VRS can accommodate all of the services listed in the Statement of Work and in the proposal. Account
projections are limited to the website only.
The VRS is has been in effect since 1994. Participants using the VRS can transfer to a call center
operator at any time during service hours, 8:OOam to S:OOpm MT, Monday through Friday (excluding
major holidays). The average response time to access a representative from the VRS is less than 3 rings.
VRU and Web Capabilities & Platform: First National Bank's VRU and website serve 374 defined
contribution plans representing over 30,000 participants. No line capacity issues have arisen with the
VRS. In the event of capacity issues First National Bank will redirect participants to an alternate page of
the web site explaining the situation and providing participants with an estimated time frame for the
restriction. First National Bank also provides a phone number with the explanation if there are any
items, which need immediate attention. They will also provide a similar system for the VRU.
23
11. Acceptance Not Waiver. The City's approval or acceptance of, or payment for
any of the services shall not be construed to operate as a waiver of any rights or benefits
provided to the City under this Agreement or cause of action arising out of performance of this
Agreement.
12. Warranty.
(a) Service Provider warrants that all work performed hereunder shall be
performed with the highest degree of competence and care in
accordance with accepted standards for work of a similar nature.
(b) Unless otherwise provided in the Agreement, all materials and
equipment incorporated into any work shall be new and, where not
specified, of the most suitable grade of their respective kinds for their
intended use, and all workmanship shall be acceptable to City.
(c) Service Provider warrants .all equipment, materials, labor and other work,
provided under this Agreement, except City -furnished materials,
equipment and labor, against defects and nonconformances in design,
materials and workmanship/workwomanship for a period beginning with
the start of the work and ending twelve (12) months from and after final
acceptance under the Agreement, regardless whether the same were
furnished or performed by Service Provider or by any of its
subcontractors of any tier. Upon receipt of written notice from City of any
such defect or nonconformances, the affected item or part thereof shall
be redesigned, repaired or replaced by Service Provider in a manner and
at a time acceptable to City.
13. Default. Each and every term and condition hereof shall be deemed to be a
material element of this Agreement. In the event either party should fail or refuse to perform
according to the terms of this agreement, such party may be declared in default thereof.
14. Remedies. In the event a party has been declared in default, such defaulting
party shall be allowed a period of ten (10) days within which to cure said default. In the event
the default remains uncorrected, the party declaring default may elect to (a) terminate the
Agreement and seek damages; (b) treat the Agreement as continuing and require specific
performance; or (c) avail himself of any other remedy at law or equity. If the non -defaulting
party commences legal or equitable actions against the defaulting party, the defaulting party
SA 10/01
21
Complaints: Dale Cloud, Vice President and Relationship Manager, is committed to resolving concerns
quickly and efficiently. Most questions and issues are handled the same day. Dale will call the plan
sponsor directly to report how First National Bank solved any problems. In addition, as part of their
internal audit process, First National Bank documents customer complaints in a centralized location for
review.
Personal Identification Numbers (PINS) and Passwords: To access the VRU, participants must enter
their PIN and social security number. Each keystroke is recorded when a participant accesses the VRU.
A PIN is disabled after three unsuccessful attempts and the participant must contact the client services
team to reset the PIN.
Age M12 Distributions: First National Bank identifies participants who are nearing age 70 `/z. First
National Bank sends these participants a letter and helps them calculate their required minimum
distributions each year. First National Bank works directly with these participants to send them a lump -
sum check, set up a monthly or quarterly automatic check or directly deposit their distribution to their
checking or savings account.
Fund Transfers: Participants may transfer among the plan investment options daily via the VRS,
website, or through a participant services representative. Transfer requests received by 2:OOpm MST are
processed the same business day based on that day's closing share price. Transaction confirmations will
be mailed within 3 business days.
QDROs: QDROs are processed in accordance with plan guidelines. The alternate payee is set up on the
system and the account of the participant is separated. First National Bank will then transfer the funds.
Plan Loans: Participants may initiate loans via the VRS, website, or through a First National Bank
representative.
Hardship Withdrawals: First National Bank's recordkeeping system uses the plan specifications and
participant demographics stored in the system to determine if a participant is eligible to take an in-
service or hardship withdrawal. In both cases, the system will calculate the amount available based
on the historical activity in the participant's account as well as the Plan Sponsor's specifications.
Tax form 1099R information is maintained in the tax database in order for tax reporting to be
completed at year-end.
Investment Services
First National Bank's total investment universe consists of funds from 52 different fund families. First
National has expressed their willingness and ability to add funds outside their network as requested by the
plan sponsor. The proposal includes replacing the three separate accounts (MIDCAP Account, Core
Equity Account and PRIDEX Account) as well as the existing Fixed Income and Money Market options.
They suggest adding the Vanguard 500 Index Adm. (0.12% expense) and two proprietary funds.
The proposal includes the Federated Capital Preservation Fund option that is a pooled stable value fund
with a 0.55% explicit expense ratio. Based on the current asset allocations, the weighted average expense
of the First National proposal is 0.86% compared to the current weight expense of 0.92%.
The strength of First National's investment proposal is based on their ability to offer a customized menu
of NAV mutual funds. They offer a substantial universe of funds to select from and are generally willing
to add outside investment managers. The primary drawback to the investment proposal is the requirement
of several additional proprietary funds.
24
Cost Proposal
First National Bank is proposing that their services will be paid for by the revenue sharing and
management fees they collect from the mutual funds and proposed stable value fund. They require 0.20%
in revenue sharing and will pass all revenue sharing above 0.20% back to the Plan. Assuming 0.26% in
revenue sharing on their suggested lineup, the administrative allowance would be $18,600.
Investment advice is provided by Morningstar and no additional fee was specified. Custom asset
allocation funds are available at no extra charge. A self -directed option is available with a $125 fee plus
0.30% on assets up to $2M, 0.20% on the next $1M and 0.10% thereafter. First National waives all loan
origination and loan maintenance fees and includes QDRO processing at no additional charge. The
proposal has waived all fees for hardship withdrawals, enrollments, rollovers and distributions. No
termination fee was indicated. The First National Bank investment and cost proposal is somewhat
competitive relative to the other proposals.
25
Great -West Retirement Services
General
Great -West agrees to all of the requirements in the Vendor Qualifications Document but has a caveat to
the Statement of Work document. Initial and ongoing enrollment is not available via the voice response
system but is available via the Web site, through the on -site Education Counselors and through the
Retirement Plan Specialists (toll -free customer service representatives).
Great -West Life & Annuity Insurance Company is one of the oldest and largest financial institutions in
North America. Great -West Life & Annuity Insurance Company was originally formed in Kansas in
1907 under the name, The National Internment Association. For nearly 100 years, they have provided
services to non-profit and corporate pension and defined contribution/deferred compensation clients.
Great -West Retirement Services, a division of Great -West Life & Annuity Insurance Company
(hereinafter collectively referred to as Great -West), provides defined contribution services to state
government plans serving 14 of the 50 states.
Great -West would utilize a team management approach between their personnel and Poudre Fire
Authority. Britt Palmer, Defined Contribution Specialist Government Markets, will be responsible for
contracting, design of services and initial implementation of the plan. He will continue to work with the
Poudre Fire Authority and provide oversight throughout the implementation process. Andrew Ahrens,
Account Manager, is located in the regional office in Denver and will be responsible for coordinating the
onsite management of all plan services.
Eric Stamm, Senior Account Executive, will be responsible for the delivery of all onsite services for the
Poudre Fire Authority's plan. Gregory E. Seller, Senior Vice President, Government Markets, is the
senior officer responsible for Great -West's business in the government market and has expertise
concerning public employer plan design. In addition to pricing and plan design, he oversees the
development and implementation of their market strategy in the government sector from offices in Irvine,
California. Marilyn Collister, National Director, Plan Design and Compliance, will provide plan
compliance advice and is responsible for compliance and legal issues for Great -West's government
market plans. Allyson Zoellner, Vice President, Director of Marketing Communications, oversees the
design of communication and education materials from headquarters in Greenwood Village, Colorado.
Nora Hedges, Manager —Operations, is responsible for coordinating administrative and recordkeeping
issues for clients at their headquarters in Greenwood Village, Colorado. She will ensure the appropriate
systems support continues for the Poudre Fire Authority's plan. She will also work to ensure superior
service for the Poudre Fire Authority's program throughout its tenure with Great -West.
Average senior staff turnover for the past three years has been 4 percent. However, they have not
experienced any turnover in the Management Team that is responsible for handling larger cases such as
the Poudre Fire Authority's plan.
As of March 31, 2004, Great -West provides recordkeeping services to 2.3 million participants
representing assets of $55 billion. The total number of plans serviced among the breakdown is 12,343.
As a comparison to Poudre Fire Authority's plan, they service 1,831 (14.8%) plans that have between 100
and 500 employees, and 140 (1.1%) plans that have between $20 million and $50 million in assets.
Public retirement plans comprise 65% of their total defined contribution plan business. Great -West
currently services 16 Public Retirement Plans in the state of Colorado.
In addition to the team members outlined above, two additional personnel will be involved in the
conversion process. Mr. Bruce Dale, Assistant Vice PresidentPolicy& Implementation, will oversee the
26
implementation of the program and the transition to the Great -West system. He will assist with all
technical issues by ensuring the appropriate resources are dedicated to the program and will provide
program design guidance based on his experience of implementing hundreds of plans similar to the
Authority's plan. Ms. Lisa Tilley, Implementation Manager, is responsible for implementation and the
transition of governmental plans to the Great -West system. She will assist with technical issues and
provide program design guidance.
Great -West's conversion process will involve creating a team composed of representatives from both the
Poudre Fire Authority and Great -West. This team will develop the initial conversion schedule for the
transfer of assets and adjust the schedule as the transition progresses. One hundred percent of their
transitions have been completed in 10 business days or less. For the last year, they averaged seven
business days from receipt of reconciled files.
In the ordinary course of business, Great -West Life & Annuity Insurance Company is periodically named
as a defendant in a variety of types of litigation. None of the litigation currently pending against Great -
West is considered material. On advice of its counsel, Great -West does not discuss pending litigation.
Great -West will represent and agree to perform all services to the plan as an expert in defined
contribution administration and with the standard of care of a prudent person generally charged with such
administrative duties. They also agree to hold themselves out as possessing greater knowledge and skill
than the average person with respect to defined contribution plan TPA services. Since they will not be
exercising any discretionary control or authority over the plan or plan assets, they are not a plan fiduciary.
Great -West self -insures fiduciary liability coverage. The plan sponsor, plan, and participants are
protected by the full faith and financial stability of Great -West with $36.5 billion in assets and a capital
and surplus ratio of 8.1 percent of assets as of December 31, 2003. Errors and Omissions insurance is
self -insured for the wrongful acts unintentionally committed by Great -West in conjunction with the
performance of professional services.
Core recordkeeping and administrative functions are provided by Great -West's in-house systems and
support staff. They also perform the majority of the employee education and communication work with
in-house staff, and rely on outside vendors for very specific roles as described below:
Great -West has formed an alliance with 85 mutual fund families in the industry. Physical regulatory
documents, online prospectuses, and electronic delivery of notices for prospectuses and statements are
currently outsourced to New River. New River has delivered regulatory documents for the financial
services community since 1997. They also have relationships with the following organizations to provide
services discussed in their proposal. These services would require separate contracts with the plan
sponsor:
Self -directed brokerage account services are provided in partnership with Harrisdirect. Online investment
guidance, advice and discretionary managed account services offered through a wholly owned Registered
Investment Advisor subsidiary, Advised Assets Group. They are powered by Ibbotson Associates. The
engine powering these services is housed within Great -West's firewall, so the participant can choose to
automatically implement investment option advice without any links to external third parties. The plan
may offer participants direct access to Certified Financial Planners. This service is available through
Great -West's partnership with American Express Financial Advisors, Inc. These NASD Series 7 licensed
CFPs can provide comprehensive financial education and planning services which augment those
provided directly through the plan by Great -West. A separate agreement between the Poudre Fire
Authority and American Express is required to activate this service.
27
Great -West has added 41 governmental clients during the last three years, representing an asset total of
$3.7 billion. They lost seven governmental clients from 2001 to 2003 representing assets of
approximately $1.8 billion. Six contacts with similar demographics were provided in the response. The
names of two of the six converted plans from Prudential in 2003 were also provided in the response.
Great -West confirms that they are willing to comply with auditing requests.
Great -West will be offering two different Healthcare Savings Plans by the end 2004. Either type of plan
would have additional costs associated with it depending upon the plan features, annual flow, etc.
Employee Education
The key elements of a standard communication and education program include the following features:
enrollment education materials, exclusive asset allocation modeling assistance, on -site computerized
enrollment assistance, flexible communications approach, unbiased salaried professional personnel, and
initial and ongoing servicing.
Great -West's proposal assumes the Poudre Fire Authority will use their Capture Your Dreams theme for
educational materials. The enrollment booklets are customized to the plan to include the plan name and
logo and a summary of the features unique to the plan, at no additional charge. The Plan Highlights
section is also customized to the specific features of the Poudre Fire Authority's plan. A sample
enrollment booklet was included in this proposal. In addition, they have the following media available for
communications:
• Fund Data Sheets Information about the specific investment options available to plan
participants. This includes the inception date of the fund, the fund manager, the investment
objective, the allocation of assets and the top ten holdings of the fund
• Participant Newsletters— Financial Footnotes is their quarterly newsletter that updates participants
on issues such as market trends and updates, commonly asked participant questions, tips about the
voice response system, increasing contributions, and planning for retirement.
• Plan Sponsor Newsletters —Plan sponsors receive P1anWiseSM, a newsletter designed specifically
for plan sponsors. Article subjects include investment, legislative and technical topics.
• Group Meetings In addition to initial enrollment meetings, Great -West offers group meetings
(approximately 30 minutes in length) scheduled at different locations and times throughout the
year.
• Individual Counseling Sessions— Employees are encouraged to schedule one-on-one counseling
sessions, during which the Education Counselor is able to address plan features by answering
specific questions.
• Education Seminars —These seminars offer specialized education modules in basic, intermediate,
advanced, and specialized seminar formats.
Samples of all the materials described were included in their proposal.
Great -West creates all of their communication and education materials in-house. They are proposing to
offer the Capture Your Dreams materials to the Poudre Fire Authority, and these materials provide a
number of features that are customized to the plan. However, should the Poudre Fire Authority wish to
offer a more custom education program, Great -West would discuss any associated pricing implications.
In addition to the education services delivered by Great West specialists and the online advice and
guidance services offered to participants, they also offer participants access to Certified Financial
Planners and Registered Investment Advisors. This service is made available through Great West's
partnership with American Express Financial Advisors, Inc. This optional plan feature allows
participants to work directly with a local advisor to develop a personal financial plan that integrates their
retirement savings program with other financial information. Should Poudre Fire Authority elect to offer
this option, employees may request a complimentary, no -obligation consultation to assess their financial
situation and determine retirement and other financial goals. An advisor can provide group education
sessions, personal consultations, and planning services that address areas of financial planning, including:
financial position, education planning, retirement planning, estate planning, income tax planning,
investment planning, and protection planning. This optional service is offered to the Plan at no charge to
the Authority. In addition to the free initial consultation, participants electing to have an American
Express advisor develop a financial plan will have that cost discounted by $75. Participants pay
American Express directly for any financial planning services they choose beyond these services.
Great -West has also developed a series of electronic tools that are available to participants through
Education Counselors and/or on the participant Web site.
Great -West Education Counselors are salaried employees who do not receive any commission or
compensation based on the investment or withdrawal options selected by the participant. Should the
Poudre Fire Authority elect to offer the optional financial planning services provided by American
Express Financial Advisors, the use of the service would be at the personal discretion of each participant.
Certified Financial Planners receive no compensation related to investment choices within the retirement
plan.
Great -West offers a basic education plan that can be augmented by a wide variety of add-ons. The basic
plan captures essential investment advice in straightforward language. The sample exhibits showed good
mutual fund specific information, customizable enrollment booklets, as well as solid educational
seminars. Great -West's Capture Your Dreams campaign is generic and might not apply to all
participants. The online Plan Service Center has limited and generic investment advice; however, it does
provide some useful planning calculators. The use of financial planners through an agreement with
American Express needs to be carefully contemplated by the Board since they are commission based.
RecordkeepinQ
Recordkeeping System: All records are maintained on their administrative system, the Innovative
Strategic Investment System (ISIS). ISIS was specifically designed for the public employee defined
contribution market. ISIS was developed by and is wholly owned by Great West and the Great West
Family of Companies. ISIS was written using Oracle's relational database management system. The
software supporting the database was also developed using Oracle software products and includes more
than 1,000 databases that are online and available virtually 24 hours a day, seven days a week. More than
two-thirds of these tables support the setup and maintenance of each plan's specific rules and investment
choices. The Pro C programming language was used for procedural and batch programs.
Systems Backup: Great West maintains a separate functional Alternate Data Center facility which is
located a substantial distance from the primary Data Center and operates on a separate telephone and
power grid. In the event of a disaster, most system functionality can be brought back online within 24
hours. A Disaster Recovery Plan phases in additional systems and functionality until all are restored
within a few calendar days. Backups of database and application data files are completed six nights each
week. The Disaster Recovery Plan is tested at least three times each year.
Payroll/Wire Reconciliation: Great West has the ability to process participant contributions and loan
repayments submitted in the sample file layout. Great West works with the employer to establish
appropriate procedures for this process.
29
Recordkeeping System Security: Key card locks exist on the main entrances to the Data Center, as well as
on the doors of each room within the Data Center. Key cards are programmed to allow entry into these
rooms as necessary. It is the responsibility of IS management to authorize this access. Access to the Data
Center entrance can be authorized only by the Assistant Vice President of Information Technology
Services or the Senior Secretary of Computer Operations.
Quality Control: ISIS checks the rules of the plan into the database. Upgrades and improvements to ISIS
are developed and tested by a team of administrative staff, systems analysts, programmers and system
audit specialists. All enhancements are thoroughly tested utilizing a test database system. Regression and
integration testing is performed to ensure that any enhancements will not adversely affect the existing
production system.
System Modifications for Legislative Changes: Great West does not assess fees for required system
changes for new laws or regulations.
Compliance Testing: Great West will perform tests covering qualified plans, 401(a) plans, 403(b)
arrangements, 457(b) eligible deferred compensation plans, 457(f) nonqualified plans and nonqualified
deferred compensation plans for corporations.
Legal Support: Great West maintains a staff of ERISA attorneys and paralegals for guidance regarding
compliance with SEC and NASD requirements. Poudre Fire can access this team at no additional fee. If
Poudre Fire elects to use a custom plan document, and asks that Great West review or provide
amendments on a customized basis, a fee of $250 per hour may apply, depending on the nature and extent
of the work.
1099-R Reporting & Distribution Processing: Great West will mail the 1099 tax report to the participant
within one month of year-end.
Participant Statements: Statements are mailed to participants within 15 business days of the end of each
calendar quarter, or within 10 business days after receipt of information in good order from third party
sources, whichever is later. Participants may also elect to receive their statement electronically at no
additional charge through the Online File Cabinet feature on the participant Web site. Quarterly
statement accuracy for the first quarter of 2004 was 99.9 percent while 100 percent of statements were
delivered within the 15 business day standard. In 2003, average quarterly statement accuracy was 99.9
percent and on average, 99.9 percent of statements were delivered within the 15 business day standard.
Plan Reporting: Great West generates certain reports to Plan sponsors automatically. Daily reports give
an overview of the plan's activity by money source, fund, and activity. Quarterly reports summarize
contributions, investment gains and losses, disbursements, fund transfers, beginning and ending balances.
Statements are mailed 15 business days after quarter end.
Report Customization: Great West allows participants to customize their reports. Custom statement
features include Beginning and ending balances, Contributions, Interest or change in value, Transfers and
surrenders for each of the funding options for the quarter, Fees/charges (if applicable), Withdrawals, All
transactions that occurred during the quarter.
Internet Access: Great West provides plan sponsor Internet access through the Plan Service Center
(PSC). Great West has developed a personal Online File Cabinet feature on the participant Web site that
enables participants to receive electronic versions of their quarterly statements. When their statement has
been posted to the Online File Cabinet, participants will receive an email notification. They will then log
in to the secure Web site to view (and print if desired) their statement and any associated stuffers. The
30
participant makes the choice to have statements emailed rather than mailed and is able to opt out of this
service at any time. Poudre Fire can access participant level activity, find investment performance,
approve loan requests, monitor plan level trends, and request ad hoc reports at this website.
Anticipated Problems: Great West does not see any problems incorporating the Poudre Fire plan into
their recordkeeping system.
Administration
Voice Response System & Web Access: Great West will provide Poudre Fire plan participants the ability
to execute transactions through their KeyTalk Voice Response System (VRS) and the PSC website.
Spanish and English content is provided. The website and VRS can accommodate all of the services
listed in the Statement of Work and in the proposal, but some on-line investment advice service are an
additional charge. Account projections are limited to the website only.
The VRS has been in effect since the early 1980's. Participants using the VRS can transfer to a call
center operator at any time during business hours, 7:OOam to 6:OOpm MST, Monday through Friday
(excluding major holidays). The average response time to access a representative from the VRS in 2003
was 46 seconds.
VRS and Web Capabilities & Platform: Great West's. VRS and PSC website serve over 12,000 defined
contribution plans representing 2.3 million participants. The web site runs on a redundant environment.
All firewalls, routers, switches, web servers and application servers are redundant and run in parallel with
automatic failover capabilities. In addition, they run quarterly load tests and use the results for capacity
planning. Great West is configured to handle three times their daily peak load. To date they have not
reached three times capacity. The scheduled maintenance window is from 12 a.m. to 12 noon on Sundays
which is reserved for internal system maintenance. The telephone system is designed to handle 235 lines
at any given moment. The average daily volume is approximately 5,200 calls. On an average day, 70
percent of their phone lines are idle and available to receive calls. These idle lines are available in the
event of a call volume surge into the service center.
Complaints: Complaints are typically received as either written correspondence or calls to a Retirement
Plan Specialist. Most issues are resolved at the time of the call. If it requires research, an AR (account
resolution) ticket is opened, sent to the appropriate individual/department and tracked on the system until
resolved. A copy of the complaint is retained on file as well as documentation of all actions resulting from
the complaint. These records are periodically reviewed to ensure necessary follow-up measures. All
written complaints are tracked on a complaint log.
Personal Identification Numbers (PINS) and Passwords: Personal identification numbers are generated
for new participants when the applicant is added to the Great West system. To provide maximum account
security, participants are encouraged to customize their PINS. If participants lose or forget their PIN, they
can order a copy of their existing PIN through KeyTalk or the Web site and have a number mailed to their
address of record. Participants can also request a PIN from a Retirement Plan Specialist. If a participant
requests a PIN from a Retirement Plan Specialist, he or she will receive a temporary PIN over the phone
or a permanent one by mail. For added security, Great West asks the participant to change a temporary
PIN during first use and within 24 hours. In addition, a participant cannot change the PIN and address at
the same time.
Age 70'% Distributions: A letter is sent during the third quarter to all participants who will be age 70'/z or
older in the upcoming year and have not elected a fixed annuity or a periodic payment as mandated by the
Minimum Distribution Requirement. An explanation of the distribution information is provided to the
31
participant on the distribution form. The form allows the participant to submit all information required to
comply with the distribution rules. All distribution forms are filed and retained to facilitate future audits.
Fund Transfers: ISIS was designed to provide the ability to complete same -day trading of any
investment options offered within a plan. Participants may adjust the allocation of future contributions or
initiate transfers through their voice response system, KeyTalk, through the Web site or by contacting a
Retirement Plan Specialist. Allocation of contributions is accepted on a percentage basis. If a participant
elects to change the allocation or transfer money among investment options via KeyTalk, the Web site or
a Retirement Plan Specialist, a confirmation number is provided upon completion of the change. Written
confirmation of the transaction is mailed to the participant within five business days.
Plan Loans: Participants can initiate loans through KeyTalk and the Web site. When a participant
completes loan modeling on the Web site or the KeyTalk system, the following occurs:
• If a loan request is submitted by 4 p.m. Eastern Time, the request will be initiated that
day.
• Upon completion of the loan request, a check/promissory note is sent directly to the
participant's home address. By cashing the check, the participant has agreed to the
terms stated in the promissory note.
• The plan will also receive an electronic notification of the amortization schedule,
which will indicate the term of the loan and the repayment amount and first
repayment date. This document is the plan's confirmation that a loan occurred and
their notification to begin payroll deduction.
Loans are processed within three business days from the date the properly completed loan request is
received at Great West headquarters in Greenwood Village, Colorado. Participants can choose the loan
amount based on the loan qualification and the term for purposes of determining their various options.
Hardship Withdrawals: All in-service withdrawals are processed based on the rules of the plan. Great
West will process the withdrawals according to those rules. The system calculates and generates the tax
withholding and creates the check and confirmation. Checks will be mailed within 5 days as long as the
documents are filled out correctly.
Investment Services
Great -West's total investment universe consists of over 2,000 funds from 85 fund families. In terms of
the investment menu, Great -West is willing to record -keep all of the existing options with the exception
of the three separate accounts (MIDCAP Account, Core Equity Account and PRIDEX Account), the
Prudential Fixed option and the Money Market option. The proposal grants full use of their open
architecture investment approach. Using this platform, the Plan would have the flexibility to customize a
menu of retail and institutional mutual funds.
The Great -West proposal includes the Guaranteed Portfolio Fund which is an insurance company backed
account. The option does not have an explicit expense ratio, rather the option has an implied margin or
spread that typically ranges from 1.00%-2.00%. As such, full fee transparency is not available.
The strength of Great -West's investment proposal is based on their ability to offer a fully customized
menu of NAV mutual funds. They offer a considerable universe of funds to select from and are generally
willing to add outside investment managers as necessary.
32
Cost Proposal
Great -West is proposing that their services will be paid for by the revenue sharing and management fees
they collect from the mutual funds and the spread on the Guaranteed Portfolio Fund. Great -West
provided excellent fee disclosure in their proposal and offered a guaranteed $24,000 administrative
allowance plus all excess revenue sharing above 0.18%. Depending on the revenue sharing, the
administrative allowance may be significantly higher than $24,000. Considering the guaranteed $24,000
administrative allowance (which is roughly equivalent to 0.08% of plan assets) the net recordkeeping fee
is 0.10%.
Given the available funds and the relatively low revenue requirement, the Plan would have the ability to
select a modest number of institutionally priced mutual funds without triggering additional per participant
fees.
Investment advice is provided by Financial Engines, facilitated by the Advised Assets Group LLC and
requires a $25 per participant annual fee. A self directed option, HarrisDirect, is available for a $60 per
participant annual fee. Great -West charges $60 for loan origination, $35 for loan maintenance and
includes QDRO processing. Up to three custom asset allocation funds are available for no extra charge.
The proposal has waived all fees for hardship withdrawals, enrollments, rollovers and distributions.
Great -West will not charge a contract termination fee should the plan opt to change record -keepers.
Given the open -architecture platform and 0.10% net recordkeeping expense, the proposal is very
competitive relative to the other proposals.
33
shall be liable to the non -defaulting party for the non -defaulting party's reasonable attorney
fees and costs incurred because of the default.
15. Binding Effect. This writing, together with the exhibits hereto, constitutes the
entire agreement between the parties and shall be binding upon said parties, their officers,
employees, agents and assigns and shall inure to the benefit of the respective survivors, heirs,
personal representatives, successors and assigns of said parties.
16. Indemnity/Insurance. a. The Service Provider agrees to indemnify and save
harmless the City, its officers, agents and employees against and from any and all actions,
suits, claims, demands or liability of any character whatsoever brought or asserted for injuries
to or death of any person or persons, or damages to property arising out of, result from or
occurring in connection with the performance of any service hereunder.
b. The Service Provider shall take all necessary precautions in performing the work
hereunder to prevent injury to persons and property.
c. Without limiting any of the Service Provider's obligations hereunder, the Service
Provider shall provide and maintain insurance coverage naming the City as an additional
insured under this Agreement of the type and with the limits specified within Exhibit
consisting of (_) pages[s], attached hereto and incorporated herein by this
reference. The Service Provider before commencing services hereunder, shall deliver to the
City's Director of Purchasing and Risk Management, P. O. Box 580 Fort Collins, Colorado
80522 one copy of a certificate evidencing the insurance coverage required from an insurance
company acceptable to the City.
17. Entire Agreement. This Agreement, along with all Exhibits and other documents
incorporated herein, shall constitute the entire Agreement of the parties. Covenants or
representations not contained in this Agreement shall not be binding on the parties.
SA 10/01
22
Hartford Grou
General
The Hartford confirms its agreement to all of the requirements in the Statement of Work.
Hartford Life, Inc. (a Delaware corporation) together with its consolidated subsidiaries is a financial
services and insurance organization that provides, primarily in the United States, pre- and post -retirement
savings, mutual funds, estate planning, and employee benefits products. The Company is a direct
subsidiary of Hartford Accident and Indemnity Company (HA&I) and is ultimately a subsidiary of The
Hartford Financial Services Group, Inc. (The Hartford). Today, Hartford Life Group, Inc. has combined
assets of over $187 billion and is one of the largest stock insurance companies in the United States.
Bill Abramowicz, Regional Vice President will oversee the implementation and will manage The
Hartford representatives allocated to the plan. Local RPA representative Pat Mickelson will meet with
participants individually to discuss program benefits and their individual retirement goals. Bill and Pat
will work closely and handle the ongoing sales, education and relationship facets of the program. They
will also work closely with home office Plan Manager Mike Morrell who will coordinate all
administrative services from Hartford Life Headquarters in Simsbury, CT.
As of December 31, 2003, Hartford provided record -keeping services for more than 8,000 defined
contribution plans and 600,000 participants and assets under management in excess of $10 billion. Out of
8,162 defined contribution plans that Hartford services 8,049 plans had less than 500 participants, and
104 plans had between $10 and $50 million in plan assets. Public retirement plans represent just over
20% of Hartford's overall contribution plan business. The Hartford currently services 164 retirement
programs in Colorado.
Hartford's conversion team (separate from ongoing support) is made up of individuals from the Service
Center, Information Technology, and Accounts Management Teams. The conversion team will work
with Prudential to establish a timeline, and communicate with participants. They will perform and
oversee all the functions necessary to complete the conversion process. These functions include obtaining
test files early in the conversion process and performing a complete dry run of the conversion. This test
conversion and audit allows the team to identify any problems and resolve issues prior to the undertaking
of the live conversion. A biographical sketch of key team members was included in the response.
Hartford's implementation/conversion plan can be divided into three primary components: Planning,
Developing, and Implementing. There is no additional cost to the plan or its participants for these
services. The timeframe for a complete transition/implementation is 8-12 weeks.
During the Planning segment, Hartford works closely with Poudre Fire Authority and prior providers to
ensure that appropriate provision is made for all facets of the programs. Hartford develops a detailed time
line to ensure that all financial transactions are executed accurately including ongoing payroll remittances
as well as liquidation and reinvestment functions. They also ensure that special processes such as
systematic benefit payments and emergency withdrawals continue without interruption. Their goal is to
plan the implementation in such a way that there is minimal disruption to participants.
During the Developing phase, Hartford focuses on activities designed to minimize the impact of the actual
transfer of assets. They complete and deliver communication programs and materials designed to make
the implementation easy for participants. Next, they will work with the current providers to review data
transmission processes and to finalize the details associated with the transfer of assets. Finally, they will
34
provide detailed communications designed to ensure that all schedules are mutually agreeable and well
synchronized.
During the Implementing phase, data is transmitted to and loaded from their record keeping system. The
steps in this phase are as follows:
• Assets are liquidated and transferred to The Hartford.
• Assets are reinvested priced as of the day the funds are received.
• Financial data is transmitted and participant account records are updated.
• Data confirming the receipt of assets is released to plan sponsors and participants in an off -cycle
statement.
• Automated system feeds are updated and their services are made available to Poudre Fire
Authority.
The past and present major litigation with respect to The Hartford's governmental retirement plan
business included three cases that are detailed in the proposal.
The Hartford cannot accept fiduciary responsibility for Poudre Fire Authority's plan, as Hartford
exercises no discretion over the plan or its assets. Hartford does, however, assume a level of fiduciary
responsibility consistent with their role as a directed agent of the plan sponsor for the purpose of investing
and record keeping plan assets, as set forth by the requirements of the Internal Revenue Code of 1986, as
amended.
The Hartford will provide trustee services in addition to recordkeeping services. They have an
established arrangement with Investors Bank & Trust (IBT) located in Boston, MA. IBT has been
providing trustee services for over 30 years.
The Hartford Financial Services Group carries at least $1,000,000 of Professional Liability Insurance
Coverage (Errors & Omissions) on a per claim basis. This covers The Hartford and its subsidiaries, as
well as past, present and future officers, directors and employees. Coverage is for a Wrongful Act, which
means any actual or alleged breach or neglect of duty, error, misstatement, misleading statement, act, or
omission by the Hartford or another party for whom The Hartford is responsible in the conduct of The
Hartford's profession.
Over the last three years, Hartford gained 39 clients and lost four. A list of similar clients to Poudre Fire
Authority was provided in the response. They claim to have converted several private sector plans from
Prudential in the past three years.
The Hartford confirmed it is willing to comply with auditing requests from Poudre Fire Authority. With
written permission from Poudre Fire Authority, plan auditors can work directly with the dedicated plan
managers to obtain all necessary plan information. The auditors would have access to the same level of
information granted to the Plan Sponsor including the right to use various reports, plan statements, legal
plan documents, and agreements.
Hartford's dedicated compliance staff ensures The Hartford's policies, procedures, and documents all
comply with IRS 401(a) rules and regulations. The Hartford's Compliance Unit will use various means to
assist the Plan Sponsor in ensuring that their Plan remains in compliance with regulations. Through their
"Capitol Correspondent" publication, they provide information on major legislative issues such as the
Tax Reform Act of '97 and the Small Business Job Protection Act of 1996 and the Economic Growth and
Tax Relief Reconciliation Act of 2001, which all had an affect on 457 plans. The Hartford has a
specimen Plan Document, incorporating these legislative changes. The Hartford will provide Poudre Fire
35
Authority with information relative to legislative changes and regulations that may affect the Plan as they
occur.
On a selective basis, Hartford does offer retiree health savings programs to plans where deemed
appropriate. These programs are administered as an associated plan alongside the 401(a) and/or the 457
program.
Employee Communication
During the transition, Hartford will work with Poudre Fire Authority to develop the participant
communications that will describe the upcoming changes to the program. Hartford's approach is to
develop several different communications targeted to the different types of participants in the program:
active participants, in -active participants, and retirees. For example, Hartford will develop a letter to
introduce The Hartford to all participants with an overview of the upcoming changes, and inform
participants with details about the availability of representatives. Then Hartford targets their educational
program to all employees, explaining the benefits and value that they can expect from participation in
Poudre Fire Authority's Plan. Additionally, they provide information on upcoming group seminars and
enrollment meetings. Poudre Fire Authority will have the opportunity to review and/or be involved in the
creation of the communications to employees and participants.
For ongoing education, Hartford believes face-to-face contact is the most effective way to communicate
with participants and increase their investment knowledge. Pat Mickleson, Hartford's local
representative, will meet with employees in one on one meetings.
All program level communication and educational material is written and designed in-house, as well as a
number of non -product related educational material and seminar systems, including the proprietary Plan
for Life Series. Through its vendor, Emerald Publications, The Hartford also provides participants access
to a package of numerous seminar presentations covering a wide range of financial topics. A customized
education campaign would be created for Poudre Fire Authority employees at no additional charge.
Hartford representatives do sell Hartford products. However, Innovest recommends that if selected, the
Plan must require that Hartford reps would be restricted to only discussing Poudre Fire Authority's
program with its employees.
Hartford is focused on personal one-on-one education through its representative, Pat Mickelson. The
brochures and direct mailing sample materials were generic, but seemed to address relevant retirement
issues in an easy to understand approach. Their communication program is customizable enough to
appeal to a wide range of participant demographics. Despite the research available through Hartford's
relationship with Morningstar, Hartford provides no online investment advice. Both the "Plan for Life
Series Seminars" and "Investment Concept and Strategies Series" are a series of workshops that educate
and advise participants on significant upcoming financial decisions. Overall, Hartford provides
personalized education through its representatives, however, those reps are commissioned and will need
to be contractually limited on what they can and cannot sell. In addition, the online content is lacking vs.
the other providers.
Recordkeenin�
Recordkeeping System: The Hartford licenses the SunGard Omni Plus record keeping software package.
The Hartford began using the OmniPlus platform for record keeping in 1999. They implement
enhancements to the applications, which surround the OmniPlus core engine on a monthly basis. Core
record keeping enhancements from the vendor are implemented on an as -needed basis, usually three times
a year.
Systems Backup: The Hartford stores copies of tapes onsite and with a disaster recovery provider.
Periodic archive copies of files are made and stored for at least 10 years. A documented disaster recovery
plan is in place to support this system's environment, which is tested at least annually. The system is
balanced daily and backed up daily. In case of an emergency, data can be brought up within 24 hours in
an off -site office location.
Payroll/Wire Reconciliation: The Hartford will reconcile payroll contributions each week before Poudre
Fire wires the funds. The Hartford has the ability to reformat participant contributions and loan
repayments submitted in the sample file layout. The Hartford will send an electronic file of new
enrollees, contribution changes, address updates, and other indicative data each week to Poudre Fire.
Recordkeeping System Security: In order to control access to the record keeping system, all employees
authorized to use the record keeping system are registered with The Hartford's Corporate Data Security.
Each employee has a profile that controls the system functionality they are allowed to use. Access of the
system is controlled by passwords, which must be changed on a periodic basis.
Quality Control: The Omni Plus record keeping system has an automatic reconciliation process.
Confirmations will be reconciled to the system -generated reports to ensure accuracy of the activity
processed on a daily basis. In addition, the system looks to the plan parameters and will produce either a
warning or error message, if incorrect data or data that doesn't conform to the plan specifics is attempted
to be maintained on the system. Finally, the record keeping system produces reports detailing the posted
information and indicates if errors or rejects occurred due to insufficient information. System generated
reports are then reconciled to the individual payroll control totals. Any identified discrepancies are
communicated back to the plan sponsor for further information.
System Modifications for Legislative Changes: The Hartford does not charge for required system changes
for new laws or regulations.
Compliance Testing: The Hartford's Compliance Unit will use various means to assist the District to
ensure that the Plan remains in compliance with regulations. Through their "Capitol Correspondent"
publication, The Hartford provides information on major legislative issues such as the Tax Reform Act of
'97 and the Small Business Job Protection Act of 1996 and the Economic Growth and Tax Relief
Reconciliation Act of 2001, which all had an affect on 457 plans.
The Hartford will provide Poudre Fire with information relative to changes in the Internal Revenue Code
and any regulations that may affect their Plan.
Legal Support: The Hartford has a staff of ERISA attorneys dedicated to the Retirement Plan Services
unit. The Compliance Services Department is responsible for assisting with plan design and plan drafting
issues. Routine questions are at no charge.
1099-R Reporting & Distribution Processing: Distributions are only limited by the terms of the plan.
Upon receipt of distribution forms in good order, The Hartford executes the trades to generate funds,
audits the information, and distributes the check.
Participant Statements: The Hartford provides quarterly plan level statements of account on demand
within 10 business days of quarter end, Internet reports on demand, and over 45 ad hoc reports that are
available upon request, usually within 48 hours.
Plan Reporting: The Hartford generates certain reports to plan sponsors automatically. Monthly reports,
which show the breakdown of the participants' cash values, surrendered, federal, state and/or city taxes
37
withheld and the participants' net check amount are mailed within ten business days after the month end.
A quarterly report is prepared to provide a summary of the beginning and ending balances of each fund
and transaction details. Quarterly reports are mailed within ten business days of quarter end.
Internet Access: The Hartford provides plan sponsor Internet access through their website. Poudre Fire
can access participant level activity, find investment performance, monitor plan level statistics, read
compliance, newsletters, and request ad hoc reports at this website.
A website is available for plan participants detailing plan information such as eligibility, matching
formulas, and vesting. The website also allows participants to view, monitor, and manage their retirement
account.
Anticipated Problems: The Hartford does not foresee any problems incorporating the Poudre Fire plan
into their recordkeeping system.
Administration
Voice Response System & Web Access: The Hartford will provide Poudre Fire plan participants the
ability to execute transactions through their Voice Response System (VRS) and the website. The VRS is
available in both Spanish and English. The website and VRS can accommodate all of the services listed
in the Statement of Work and in the proposal.
Participants using the VRS can transfer to a call center operator at any time during service hours, 6:OOam
to 6:OOpm MT, Monday through Friday (excluding major holidays). The average response time to access
a representative from the VRS is less than 20 seconds.
VRS and Web Capabilities & Platform: Approximately 8,000 plans and over 600,000 participants have
access to these features. Currently, there are no known limitations and The Hartford closely monitor calls
and participant activity and uses this information to forecast future volumes to ensure that the available
infrastructure and systems are prepared to handle extreme volumes. The Hartford's VRU and Internet
experience nearly zero downtime thanks to system redundancy. As soon as an outage is detected, all
VRU/Internet traffic is immediately rerouted to the backup system. Each month, they perform
maintenance and direct traffic so that participants will always have the VRU/Internet available to them.
Complaints: Any complaint received is filed in a complaint log, COMPTRAK, at The Hartford's
Headquarters and is responded to within five business days. The Hartford maintains a record of all
complaints for a period of three years.
Personal Identification Numbers (PINS) and Passwords: To access the VRS, participant must enter their
PIN and social security number. Participants choosing to speak with a customer service representative are
also asked to provide additional information to ensure they are the account holder (current address, date
of birth, etc.). The Hartford's Internet website utilizes a Firewall and a DMZ area for security. Access to
the Internet is allowed only if the user has a valid ID and Password. Once the ID and Password are
authenticated, a Secure Socket Layer (SSL) connection is established to the participant's browser and the
information passed between The Hartford's Internet site and the participant's browser is encrypted
Age 70'/z Distributions: The Hartford will calculate, notify, and distribute to qualifying participants their
minimum required distribution on an annual basis. Payments are made according to the participant's
election on the distribution form.
go
Fund Transfers: Participants may transfer among the plan investment options daily via the VRS, website,
or through a participant services representative. Transfer requests received by 4:OOpm ET are processed
the same business day based on that day's closing share price.
QDROs: The Hartford has administrative procedures in place for QDRO processing which have varying
levels of Plan Sponsor involvement. These options will allow the Plan Sponsor to partially or fully
outsource this task.
Plan Loans: The Hartford offers three levels of administration that participants may select from. The
Hartford has the capability to track and report missed payments and automatically default loans when
appropriate.
Hardship Withdrawals: The Hartford offers employee Hardship Review and Distribution services for
plans that prefer to outsource the administration of this function to their provider. There are two options
available to plan sponsors. Using the first option, the plan reviews and approves all hardship withdrawal
requests. In the second option, the plan may delegate the administration of hardship requests to The
Hartford. In either case, requests that meet the plan's hardship guidelines are processed on the same
business day they are received in good order, before 4:00 PM ET, and a check is mailed the following
business day.
Investment Services
The Hartford's total investment universe consists of funds from over 50 different fund families. Their
universe of funds is considered proprietary and is only made available if they are selected as finalists.
While no specific funds were recommended, The Hartford is offering Poudre Fire a semi -bundled
platform that mixes proprietary and non-proprietary annuity options ("Hartford Life's Possibilities
Program"). Poudre Fire will be able to customize a portfolio of funds from the list of 33 proposed
investment options at no additional cost to the plan. As such, there would be a significant disruption to
the investment menu and most of the existing funds would be mapped into new annuity options.
The Hartford proposal includes the Declared Rate fixed income options which is an insurance company
backed account. The option does not have an explicit expense ratio, rather the option has an implied
margin or spread that typically ranges from 1.00%-2.00%. As such, full fee transparency is not available.
The SSgA S&P Index collective trust is offered with a 0.35% expense ratio.
Cost Proposal
The Hartford is proposing that their services will be paid for by the revenue sharing and management fees
they collect from the variable annuity options and the Declared Rate fixed income option. Assuming that
options are selected from their proposed list, the plan will have a "zero" administrative fee and will
provide $15,000 back to the plan per annum. Since the fund line-up has yet to be determined, we cannot
calculate the exact weighted average expense of the proposed options, however, based on the available
funds, the average expense ratio will likely be similar to the other vendors.
Investment education is provided through a relationship with Morningstar, though no specific investment
advice solutions were discussed. A self directed brokerage account is available through Schwab PCRA
for a $50 per participant fee. The Hartford charges $50 for loan origination, $50 for loan maintenance
and includes QDRO processing. The proposal has waived all fees for hardship withdrawals, enrollments,
rollovers and distributions. No contract termination fees were indicated. The price proposal from the
Hartford is not competitive relative to the other proposals since the investment option requirements would
impose significant disruption to the current investment menu. Moreover, The Hartford did not disclose
their required recordkeeping fees.
39
ICMA-RC
General
ICMA-RC agrees to all of the requirements in the Statement of Work. However, ICMA-RC noted that
loan modeling is available via the Call Center and website (not VRU) and loan initiation is available via
the website only. Also, prospectus orders are not available online, but requests can be made through the
Call Center.
ICMA-RC is a not -for -profit corporation. They were incorporated in 1972 in the State of Delaware.
ICMA-RC has been licensed to do business in the State of Colorado since August 1990. A list of the
board of directors and executive officers was included in the response. ICMA administers retirement
plans for state and local government employers exclusively. They administered the first nationally
available 457 deferred compensation plan in 1972, and in 1985 began offering qualified 401 defined
contribution plans. In 1999, they began offering Individual Retirement Accounts (IRAs) to the public
sector, and in 2000, rolled out a retirement health savings plan for clients.
ICMA-RC serves over 640,000 public employees with total assets of approximately $20 billion.
ICMA-RC will serve the plans with a team of on -site education, communications, and
administration/record keeping professionals. Rod Alcazar, Relationship Manager, will coordinate and
supervise delivery of all administrative/record keeping services to the plans. Mr. Alcazar currently serves
as Relationship Manager for seven ICMA-RC clients. Gary Helm, Territory Vice President, will
supervise delivery of all on -site services to the plan. Mr. Helm supervises and coordinates on -site service
for all of their clients in Colorado, Wyoming, Utah, Nevada, Arizona, Arkansas, and Louisiana. Michael
Collins., Retirement Plans Specialist, will provide on -site education and enrollment services to
participants through group seminars and in individual consultations. Four additional representatives will
assist Mr. Collins as necessary in providing on -site service. Mr. Collins serves 20 clients in the Denver,
Colorado region. Nancy Klick, Financial Planning Manager, will provide additional, in-depth financial
planning seminars and consultations on a quarterly basis. Ms. Klick, who is based in Minnesota, provides
CFP"' services to ICMA-RC clients in Colorado, Nebraska, Kansas, Iowa, Missouri, North Dakota, South
Dakota, Minnesota, Wisconsin, and Illinois. Jeff Gibson, Manager, New Business Unit, and Carl Klein,
Senior Implementation Specialist will conduct all operational elements of the transition of plans. Mr.
Gibson and Mr. Klein are located at corporate headquarters in Washington, DC. Mr. Gibson supervises
implementation/transition services for all new ICMA-RC clients. As of December 31, 2003, the 12-
month turnover rate for the Retirement Plans Specialist position was 9.2%.
Out of 6,839 plans serviced by ICMA-RC as of December 31, 2003, 882 (12.9%) of them had between
100 and 500 participants and 89 (1.3%) had between $20 and $50 million in assets. 100% of ICMA-RC's
defined contribution plan business is represented by public retirement plans. As of May 31, 2004, ICMA-
RC administered 466 retirement plans for 164 public sector clients in Colorado, with over 26,500
participants and $887.6 million in assets.
In order to minimize the blackout period, ICMA-RC typically requests four months to complete a plan
consolidation. This period allows for a detailed planning process, ongoing status meetings with Poudre
Fire Authority, two system tests, and a brief blackout period. While the actual duration of the blackout
period will depend on the accuracy of data received from the other administrator and their response to
issues that arise, ICMA-RC anticipates that the blackout period will last for one to two days. Out of the
last 165 transitions, 163 were converted with one to two business day blackouts.
.M
ICMA-RC Services, LLC was cited by Nevada in 1999 and Florida in 2002 for failure to register a branch
office with these states. ICMA-RC has not been involved in any substantive litigation regarding their
deferred compensation or defined contribution services.
ICMA-RC is a registered investment advisor and acts in a fiduciary capacity with respect to
VantageTrust, the commingled 81-100 trust through which most plan investments are made and
maintained. In addition, ICMA-RC acts in a fiduciary capacity with respect to the Vantagepoint Funds,
and undertakes responsibility for due diligence and monitoring with respect to the Vantagepoint Funds
and other investment alternatives it makes available to plans and participants.
The ICMA Retirement Corporation and its affiliated companies provide all services. Listed below are
organizations with which ICMA-RC has a relationship to provide the services outlined in their response:
• Statement Production. They subcontract the printing of quarterly participant statements, quarterly
employer statements, and annual participant tax statements to RTI Laser Print Services, Inc.,
which is a subsidiary of FYI, Inc.
• Investment Advice. *Morningstar Advice Online provides a web -based service to participants
wishing to have access to online investment advice.
• Custody. Investors Bank & Trust serves as the custodian for the ICMA-RC investment options of
the Plan. IBT calculates daily prices for each of these funds.
• Mailings and Fulfillment. ICMA-RC subcontracts mass mailings to MailBag. All fulfillment
requests, including packet assembly have been subcontracted to the DDD Company.
In the past three years, three programs with more than $15 million left ICMA-RC. Two of these former
clients selected another vendor in a competitive bid process. The third moved consolidated service in-
house and transferred assets to a lower -cost provider.
ICMA-RC has not transitioned any plans from Prudential within the last three years.
ICMA-RC will comply with auditing requests and provide access to all information retained by their
system pertaining to the plan. There is no cost for complying with audit requests for information retained
by ICMA-RC.
ICMA-RC also offers its VantageCare Retirement Health Savings Plan. VantageCare RHS is fully
integrated. A description of the program was provided in the response. Participants in the VantageCare
RHS plan are assessed an annual participant fee of $30 and an annual administration fee of 0.30% on all
assets.
Employee Communication
ICMA-RC's education strategy is to provide a combination of on -site seminars/consultations and
technology. These forms of media can be customized to Poudre Fire Authority's specific requests.
ICMA-RC will communicate with employees regarding Poudre Fire Authority's plan in two phases: 1)
the transition, and 2) continuing education.
The first phase is designed to introduce ICMA-RC as the new provider for the Plans. They will provide
information on details of the transition, schedule of seminars and consultations, and outline ICMA-RC's
enhanced services. They believe early and frequent communication throughout the transition,
emphasizing enhancements brought by the changes, and multiple channel and delivery methodologies are
the best strategies to accomplish this goal. ICMA-RC proposes that the transition communication plan
include the following: mailing packages to all participants, explaining the transition and the times and
locations of group meetings to discuss the transition, activate a dedicated transition website describing the
:fJ
schedule of on -site transition seminars, and other information pertinent to the transition, publicize group
meetings through posters and payroll stuffers, deliver on -site group educational presentations that will
give all employees the opportunity to attend, and have representatives meet with individuals who request
personal consultations.
The objective of ICMA-RC's continuing education program attempts to provide participants with the
tools and information they need to participate in the program, build a diversified investment portfolio, and
achieve their retirement savings goals. They will assist all participants in meeting their retirement savings
objectives through ongoing group seminars, individual consultations, and in-depth CFP seminars.
ICMA-RC will conduct quarterly participant meetings on site, specific to different sophistication levels
on a variety of subjects. Seminars and individual consultations will be scheduled at dates and locations
mutually agreed upon by Poudre Fire Authority and ICMA-RC. They will also design customized classes
to meet both the specific requirements of Poudre Fire Authority's plan and the needs of each employee.
ICMA-RC will also provide seminars and individual consultations conducted by a CFP each quarter.
Nancy Klick, Poudre Fire Authority's Certified Financial Planner, will offer comprehensive retirement
planning services, including benefit estimates regarding asset accumulation and disbursements from the
deferred compensation plan. Individual consultations include explanations regarding the features and tax
consequences of each withdrawal option. CFP seminars normally take I to 2 hours.
Available at ICMA-RC's VantageLink website, participants can access portfolio allocation
recommendations as well as independent investment advice through Morningstar Advice Online.
ICMA-RC attached sample enrollment kits, screenshots of their on line tools, educational publications,
newsletters, and instructional publications.
ICMA-RC's on -site representatives do not use group meetings or individual consultations to solicit
outside business, except to discuss the availability of ICMA-RC's IRA services. ICMA-RC will refrain
from any discussion of their IRA services if desired by Poudre Fire Authority. Representatives do not
promote products or plan features that are not identified in the proposal. Participant investment or
disbursement decisions have no impact on the compensation their representatives receive. All
representatives are NASD Series 6 (or Series 7) and 63 registered.
The employee communication plan outlined by ICMA-RC is comprehensive and flexible. Poudre Fire
Authority will have the chance to customize a variety of aspects concerning the content and form of these
communications. The use of on site seminars and CFP events by ICMA-RC is robust. These meetings
cover pertinent investing topics designed to appeal to a wide range of investors. The use of a dedicated
CFP to provide personalized investment advice to employees is an added benefit. The brochures and
sample mailings, while generic, explained relevant investment issues in a clear manner. The on line and
electronic education content also addressed key retirement/benefit subjects. ICMA-RC's partnership with
Morningstar gives them a good solution for advice and information provider.
RecordkeepinQ
Recordkeeping System: All record keeping functions are performed in-house on a proprietary system
using the OmniPlus software, which was developed and is maintained by the SunGard Corporation.
SunGard created OmniPlus in 1997, and it was installed at ICMA-RC in 1998 as an upgrade from the
OmniPlan system, which was first installed in 1994.
Systems Backup: ICMA-RC has leased computer room space at the SunGard Herndon, Virginia
MetroCenter to house critical network and Internet servers and floor space at the SunGard Philadelphia
42
MegaCenter to house their VRS. There are redundant communications links that connect ICMA-RC
headquarters to the servers in Herndon. Files are sent periodically throughout the day with data changes
for the mainframe and Oracle databases. A full -function telephone switch is also available. SunGard's
MegaCenter also serves as the mainframe and VRS recovery site. If that site is unavailable, ICMA-RC
can use another of SunGard's recovery centers. All critical data, both mainframe and LAN, is backed up
daily. Critical record keeping data on the mainframe is backed up three times each business day, twice at
critical processing points, and again at the end of the processing day. Critical record keeping data on the
LAN is replicated offsite periodically throughout the day.
Payroll/Wire Reconciliation: ICMA-RC has the ability to process participant contributions and loan
repayments submitted in the sample file layout. Reconciling payroll contributions before funds are wired
would be set up as a special handling process, which requires the employer to provide ICMA-RC with
critical reconciliation information, such as the dollar amount of the wire, and any adjustments, in an email
message at the time the file is being transmitted (usually 1-2 days prior to the wire). ICMA-RC works
with the employer to establish appropriate procedures for this process.
Recordkeeping System Security: ICMA-RC requires the use of a Secured Socket Layer (SSL)
compliant browser. An SSL-compliant browser uses encryption to transmit and receive data over the
Internet. Thus, a participant's VantageLink logon user ID, password, and account information does not
traverse the Internet in clear, readable text. A valid SSL-compliant connection to VantageLink can be
verified by the gold key on the bottom right of the web browser screen. In addition ICMA-RC employs
tripwires and firewalls to ensure the integrity of the system.
Quality Control: An array of edits is built into ICMA-RC's system to capture errors and ensure data
integrity. Transaction edits are performed during data entry by custom developed front end systems.
These edits include a review of plan and participant numbers, plan -level restrictions, dates, and
transaction viability. These front-end system edits provide immediate, online error messages. In addition,
OmniPlus allows ICMA-RC associates to "trial post" transactions. This is a process whereby the system
reviews the transaction as if it was posting it, and then flags any errors or warnings for immediate
attention and correction.
System Modifications for Legislative Changes: ICMA-RC does not assess fees for required system
changes for new laws or regulations.
Compliance Testing: ICMA-RC conducts numerous tests to ensure compliance with plan and IRC
provisions, including checks for participant adherence to minimum distribution requirements, and
maximum contribution limits. Plan provisions are built into the record keeping system and are housed in a
plan resume. The core record keeping system and the ancillary, proprietary systems use the plan resume
supplying information about the plan. In addition, participant transactions accessed and processed over
the record keeping system adhere to the plan resume.
Legal Support: ICMA-RC maintains a staff of ERISA attorneys and paralegals for guidance regarding
compliance with SEC and NASD requirements. Poudre Fire can access this team at no additional fee.
1099-R Reporting & Distribution Processing: In January of the year following distribution, ICMA-RC
will issue Form 1099-R to the participant.
Participant Statements: ICMA-RC provides an overview of account activity, including contributions,
investment gains and losses, disbursements, fund transfers, ancillary service charges (if applicable), and
beginning and ending account balances. Information is provided for the quarter as well as year-to-date. In
addition, participant statements include pie charts depicting asset allocations, and a calculation of the
43
18. Law/Severability. The laws of the State of Colorado shall govern the
construction interpretation, execution and enforcement of this Agreement. In the event any
provision of this Agreement shall be held invalid or unenforceable by any court of competent
jurisdiction, such holding shall not invalidate or render unenforceable any other provision of
this Agreement.
19. Special Provisions. [Optional] Special provisions or conditions relating to the
services to be performed pursuant to this Agreement are set forth in Exhibit _, consisting of
( ) page[s], attached hereto and incorporated herein by this reference.
SA 10/01
23
internal rate of return the participant achieved in the account. Statements are distributed within ten
business days after quarter -end.
Plan Reporting: ICMA-RC generates certain reports to Plan sponsors automatically. Daily reports give
an overview of the plan's activity by money source, fund, and activity. Quarterly reports summarize
contributions, investment gains and losses, disbursements, fund transfers, beginning and ending balances.
Statements are mailed 10 business days after quarter end. Distribution reports and ad hoc reports are
generated as requested.
Report Customization: ICMA-RC maintains a library of ad hoc reports, and generates several other
reports for internal control purposes. Ad hoc reports are typically generated within three to five business
days. Timing can be affected by the complexity of the request. Reports are based on information retained
by the ICMA-RC system. Ad hoc reports of reasonable quantity and complexity are provided at no extra
cost. ICMA-RC will work with Poudre Fire to meet customized or ad hoc reporting needs in a timely
manner.
Internet Access: ICMA provides plan sponsor Internet access through the VantageLink website. Poudre
Fire can access participant level activity, find investment performance, approve loan requests, monitor
plan level trends, and request ad hoc reports at this website. ICMA-RC will also provide Poudre Fire
with a customized website dedicated to the unique features of the plan. This site can include customized
educational components and other content specific to Poudre Fire's program. It will also feature all of the
standard account access and transactions functions available at the VantageLink website.
Anticipated Problems: ICMA-RC does not see any problems incorporating the Poudre Fire plan into their
recordkeeping system.
Administration
Voice Response System & Web Access: ICMA-RC will provide Poudre Fire plan participants the ability
to execute transactions through ICMA-RC's VantageLine Voice Response System (VRS) and the
website. Spanish and English content is provided. The website and VRS can accommodate all of the
services listed in the Statement of Work and in the proposal. Account projections are limited to the
website only.
The VRS has been in effect since 1980. Participants using the VRS can transfer to a call center operator
at any time during service hours, 6:30am to 7:00pm MST, Monday through Friday (excluding major
holidays). The average response time to access a representative from the VRS in 2003 was twelve
seconds.
VRS and Web Capabilities & Platform: ICMA-RC's VRS and website serve 6,900 defined
contribution plans representing 640,000 participants. ICMA-RC currently utilizes 47% of its VRS
capacity, and 46% of its website system capacity. Both systems recorded better than 99.9% availability in
2003. The primary programming languages used for the VRS and VantageLine website are built on the
Microsoft NT platform utilizing TALX Corporation's IVR application platform.
Complaints: ICMA-RC's standard for inquiries requiring research is for a voice phone response to be
given within one business day and a written response (if necessary) to be given within two business days.
ICMA-RC has met this standard over 90% of the time. Complaints will be reported to Poudre Fire within
two business days. Although ICMA-RC's corporate policy is to have issues completely resolved within
ten business days, the average turnaround is approximately five business days. A monthly report of all
issue resolution activity is generated and distributed to operations and systems managers as well as senior
management.
Personal Identification Numbers (PINS) and Passwords: The system locks out any individual who
attempts to enter an invalid PIN three times in order to access the website. This prevents multiple attempts
to improperly access accounts. When a participant decides to set up an account on the Internet, they go to
the home page and follow the prompts to request a PIN. The PINS are randomly generated and mailed the
following business day to the participant's address on file.
Participants calling an Investor Services Representative are asked specific information to validate the
identity of the caller, and, if the caller responds to the questions correctly, will be provided account
information and process requested transactions. If the representative believes the individual may be
attempting to gain unauthorized access to the account, the representative offers to call the individual back
at their home or office, using the numbers held in ICMA-RC's system.
Age 70'% Distributions: ICMA-RC calculates the required minimum distribution (RMD) for all
participants over 70Yz and separated from service to ensure that they receive their required minimum
distribution. If participants are on RMD payments, ICMA-RC will adjust their payments each year to
satisfy their RMD. If participants are on non-RMD payments, ICMA-RC tests their payments to ensure
they satisfy their RMD. If participants are not on payments, ICMA-RC will notify them by mail to make a
payment election. If no election is made, ICMA-RC distributes the RMD payment prior to the IRS
deadline.
Fund Transfers: Fund transfer request received in good order by 2:00 p.m., Mountain Time are invested
that evening.
QDROs: ICMA-RC processes QDRO distributions upon notification and in accordance with IRS
regulations and plan guidelines. The participant, employer, or ex -spouse sends copies of duly signed or
certified QDROs directly to ICMA-RC's Legal Department. ICMA-RC transfers funds according to
orders received with the employer authorization. The system also calculates and processes QDRO
distributions to alternate payees. ICMA-RC consults over the telephone, pre -reviews the QDRO, and
process the court order. Once accounts have been separated, the ex -spouse has access to his/her account
only. The ex -spouse has full access to all the investment options, the toll -free voice response unit,
customer service representatives and the Internet.
Plan Loans: To initiate the loan process, participants complete and submit a loan application.
Applications can be requested from the Retirement Plans Specialist, or from ICMA-RC's toll -free
Investor Services Representatives line. When ICMA-RC receives a loan application, they review the loan
amount for conformance with the Internal Revenue Code, Plan Document, and Loan Guidelines. ICMA-
RC then sends a disclosure statement, promissory note, amortization schedule, and the check to the
employer. The employer then obtains the necessary signatures from the participant, gives the participant
the check, and returns the loan documents to ICMA-RC. Applications received by Wednesday each week
are processed on the following Friday. Participants can get up-to-date information on their loans from
their toll -free Investor Services representatives, VantageLine ASL, or VantageLink website.
Hardship Withdrawals: Participants can request Emergency Withdrawal forms and counseling on
applicable rules (including the need for documentation of the circumstances) from Investor Services
Representatives via ICMA-RC's toll -free line or via their VantageLink web site. Upon receipt of signed
and approved emergency withdrawal applications from the participant, ICMA-RC processes the
transaction as a redemption on the record keeping system, which is included as part of the daily net
purchase or sale with each investment manager. Approvals received by 10:00 a.m. Mountain Time are
paid in one business day.
45
Investment Services
ICMA's total investment universe consists of over 5,800 funds that are either currently available or
pending contractual negotiations. Out of all the proposals, ICMA is the only vendor willing to record -
keep all of the existing variable investment options including the separate accounts (pending negotiations
with Prudential). Their proposal grants full use of their open architecture investment approach. Using
this approach, the Plan would have the flexibility to customize a menu of retail and institutional mutual
funds.
ICMA's proposal includes the VantageTrust Plus option that is essentially a pooled stable value fund with
a 0.47% explicit expense ratio. Stable Value funds provide full fee transparency with explicit expense
ratios.
The strength of ICMA's investment proposal is based on their ability to offer a fully customized menu of
NAV mutual funds and a reasonably priced Stable Value option. They offer a considerable universe of
funds to select from and are generally willing to add outside investment managers.
Cost Proposal
ICMA is proposing that their services will be paid for by the revenue sharing and management fees they
collect from the mutual funds and VantageTrust Stable Value option. ICMA provided excellent fee
disclosure in their proposal and offered three-year pricing of 0.08% and five-year pricing of 0.07%. All
revenue sharing captured above that amount will be rebated back to the Plan. Assuming 0.26% in
revenue sharing, a $55,800 administrative allowance will be generated per annum.
Given the available funds and the low revenue requirement, the Plan would have the ability to select
many institutionally priced mutual funds without triggering additional per participant fees.
Investment advice is provided at no additional charge by MPower which is owned my Morningstar. A
self directed option, VantageBroker, is available for a $50 per participant fee. ICMA charges $50 for loan
origination, $35 for loan maintenance and includes QDRO processing. Custom asset allocation funds are
available for $2,500 per fund per annum. The proposal has waived all fees for hardship withdrawals,
enrollments, rollovers and distributions. ICMA would not charge a contract termination fee and the
recordkeeping fee is guaranteed for the length of the contract.
In aggregate, the ICMA cost proposal is extremely competitive and provides a flexible open -architecture
platform.
M
Principal Financial Grou
General
Principal can accommodate all of the requirements in the Statement of Work.
Principal Life Insurance Company is a member of The Principal Financial Group, a publicly traded
corporation on the New York Stock Exchange (symbol: PFG). The Principal's state of domicile is Iowa.
They are licensed to do business in all 50 states and the District of Columbia. Organized in 1879, the
Principal Financial Group has been offering businesses, individuals, and clients a range of financial
products and services — including qualified and nonqualified retirement plans, mutual funds, and
brokerage services. A list of the board of directors, top shareholders, and top insider shareholders was
included in the response.
The biographies and duties of key members servicing Poudre Fire Authority's plan were included in the
response. Leila Bando, Account Executive Director, will be Poudre Fire Authority's strategic contact.
She will develop a proactive service strategy through planning, problem solving, plan reporting, and
review. She has been in the industry for eight years and came to Principal in 2003. Becky Duckett,
Senior Client Service Consultant, is the day-to-day contact for Poudre Fire Authority.
The supporting team will be based out of Principal's Des Moines Retirement and Investor Services
Corporate Center. These resources range from Poudre Fire Authority's daily contacts all the way to the
behind the scenes processors and IT analysts. These individuals serve as dedicated contacts for Becky
and Leila, and works with them so that they can focus primarily on the plan.
Jason Neal, Senior Client Transition Consultant, specializes in coordinating the implementation and
transition of retirement plans to Principal. He will coordinate records and investments, contribution
allocations, disbursements, and plan sponsor/participant reporting. A tailored conversion plan will be
drafted by Jason and Leila. A sample plan was provided in the response. Their average blackout time is
two days.
As of March 31, 2004, Principal provided full recordkeeping services for over $35 billion in defined
contribution retirement funds and more than two million participants. Out of 28,497 plans under
Principal's services, 3,160 (11.1%) of those plans had between 100 and 500 employees and 170 (0.6%) of
those plans had between $20 and $50 million in assets. Ten percent of The Principal's defined
contribution plans are public plans. Of those plans, 50 are in the state of Colorado.
According to the response, Principal is regularly involved in litigation, both as a defendant and as a
plaintiff. Litigation naming them as a defendant ordinarily arises out of their business operations as a
provider of asset management and accumulation products and services, and life, health, and disability
insurance.
Principal carries coverage to cover employee dishonesty. This is a fidelity bond covering all employees
offered through St. Paul Fire & Marine Insurance Company for $25 million. They are self insured for
amounts above this level. In addition, they self -insure their exposure to errors and omissions made by
employees. Principal also insures fiduciary liability coverage through LaMair-Mulock-Condon Co. The
insurers affording this coverage are Zurich -American Insurance Company, Twin City Fire Insurance
Company, Cincinnati Insurance Company, National Union Fire Insurance Co., and CHUBB Group of
Insurance Companies. Each carrier provides a limit of $10,000,000 with a total combined fiduciary
liability limit of $50,000,000.
47
Principal will provide trustee services along with recordkeeping. For trustee services, they can provide
directed trust services through the subsidiary, Principal Trust Company, or they can work with the trustee
of Poudre Fire Authority's choice, including independent trustees or Poudre Fire Authority's employees
named as trustees.
Principal does not have a strategic partnership or affiliation with external organizations to provide
retirement plan services. The Principal Financial Group, and fully owned subsidiaries, provide all
retirement services in-house.
Over the last three years, Principal has lost 9 clients and gained 87 clients.
Principal is willing to comply with auditing requests. They place no limitations or restrictions on audits.
Principal provided two potential approaches regarding retiree health savings plans —a health
reimbursement arrangement and a health savings account.
Employee Communication
Principal proposes a five -phase process for employee communication. Phase 1 promotes the plan's
benefits to employees. Phases 2 and 3 focus on initial education along with account management and
ongoing communication. Phase 4 directs education towards participants who are near retirement and
require more attention. Lastly, phase 5 considers educating participants that might benefit from additional
retirement planning avenues like IRAs and annuities. The Account Executive Director, Leila Bando, and
other members of their service team, will meet with Poudre Fire Authority to understand Poudre Fire
Authority's expectations and goals. These meetings will be the foundation for a customized education
and communication program for Poudre Fire Authority's participants. To ensure that Principal meets
Poudre Fire Authority employees' educational needs, the service team meets periodically, during the
previously outlined phases, to assess the effectiveness of the communications campaign. Principal
conducts focus groups and surveys to identify topics that employees want to learn more about, monitor
changes in investment behavior and attitudes, and solicit feedback on performance.
Principal offers employee investment advisory services through the online investment advice service
Financial Engines and Ibbotson Associates. Financial Engines allows plan participants who want to
actively manage the account created for them to obtain financial advice and can assist in all aspects of
their financial planning through a hyperlink on Principal's website. The Principal will make the new suite
of offerings available in late 2004 or early 2005.
Principal would provide ten education/enrollment meeting days annually as part of their standard service
package for Poudre Fire Authority. During the development of Poudre Fire Authority's three-year
program, Leila Bando can help determine the number of days Poudre Fire Authority would like to
dedicate to the education of new hires. These days may include a combination of onsite enrollment
meetings, "Train the Trainer," web-conferencing, tele-conferencing, and CD/video.
In addition to the onsite services provided by Leila Bando, Principal is offering Retire Secure services to
Poudre Fire Authority participants. Through the Retire Secure program, employees are provided with
individualized retirement planning guidance from a Local Retirement Resource Consultant. After they
are enrolled, participants receive ongoing progress reports. The Local Retirement Resource Consultant is
a local salary -based professional available to meet one-on-one with employees, conduct enrollment
meetings, and help those employees who want individualized assistance with their retirement planning.
Local Retirement Resource Consultants are generally degreed professionals with many years of
experience in the financial services industry — including experience in personal markets, retirement
planning, key executive planning, and estate planning. They are registered representative of Princor
Flu
Financial Services, a member of the Principal Financial Group, Series 7, 63, and life and health, and have
additional state specific licenses, if required. This service will be offered at no cost.
Employees of The Principal are salaried and their compensation is not dependent upon the options chosen
in the plan.
Principal offers investment advice through a wide range of media that includes in -person seminars, direct
mailings/brochures, over -the -phone, and electronic media. Principal's partnership with Financial Engines
and Ibbotson will provide ample retirement guidance for those participants preferring an online solution.
Although the response claimed they were able to customize communication materials for Poudre Fire
Authority, there was no indication of this in the samples provided. Overall, Principal's education plan is
well thought out and supported by a deep staff. While the proposal states that employees of Principal are
salaried, in our experience, the fact that they carry life and health insurance licenses means they have the
ability to collect commissions. If they are selected, the contract should be specific to expressly eliminate
their ability to offer outside products to participants.
Recordkeeping
Recordkeeping System: The Principal's recordkeeping system was developed internally in 1980. The
system is maintained in-house, enabling The Principal to modify and customize the applications to the
plan's specific requirements. The Principal added daily valuation capabilities in 1982 and restructured
significantly to a data driven system in 1993. The Principal employs a staff of over 400 IT specialists
dedicated to supporting and maintaining their recordkeeping system, including numerous types of
Internet, desktop, and server hardware and software applications. The hardware system is completely
dedicated to retirement plan administration.
Systems Backup: The Principal has developed a Corporate Business Resumption Plan ("CBRP") for its
operating business units and a Disaster Recovery Plan ("DRP") for the Information Services Department.
The CBRP, DRP, and related materials are stored in vaults at geographically diverse business locations
and in a central, secure directory on The Principal's network. This directory is backed up nightly during
the regular backup procedures. This directory is also backed up to a CD-ROM on a periodic basis and is
stored in off -site locations. The Principal has entered into an agreement with IBM Business Continuity
and Recovery Services (IBM BCRS) to provide batch and online processing in the event of a disaster at a
facility in Gaithersburg, Maryland.
Payroll/Wire Reconciliation: The Principal will reconcile payroll contributions each week before Poudre
Fire wires the funds. The Principal has the ability to process participant contributions and loan
repayments submitted in the sample file layout. Principal will send an electronic file of new enrollees,
contribution changes, address updates, and other indicative data each week to Poudre Fire.
Recordkeeping System Security: The Principal restricts access to only those that need it to perform
services for the Poudre Fire plan. Limited authorization to access information ensures the confidentiality
of data. In addition, all employees are issued security access cards, which must be worn to obtain
entrance into The Principal facilities at any time. Numerous areas of The Principal's buildings are also
monitored by closed-circuit cameras and video monitors. The hardware is protected by an internal
security system, as well as firewalls, so that unauthorized access to the system from outside The Principal
is not possible.
Contribution Processing: The Principal can post the fund purchases within 24 hours of the date as the
contribution is deducted from the participants' paychecks, if the data from Poudre Fire is reconciled in
advance of actual wire from Poudre Fire.
19
Information submitted to The Principal is first reviewed by a data entry specialist, then checked by a
senior data entry specialist and by Darrell Pierce, a Senior Client Service Associate assigned to Poudre
Fire. Any data that is unclear or questionable is verified with Poudre Fire prior to updating records. Mr.
Pierce also reviews all transactions including hardship withdrawals and investment transfer. In addition,
The Principal's internal auditing department randomly checks a portion of all transactions.
Quality Control: Plan data accuracy and security of their recordkeeping system is monitored by a
number of policies and edits. Plan level information is checked by different individuals and control
checks randomly audit activity. A tracking system is used to monitor administrative activity and all
administrative activity is double-checked. System program edits minimize the opportunity for errors and
reports ensure plan changes are properly reflected on the system. If information is sent electronically,
data is automatically downloaded into The Principal's recordkeeping system, eliminating the need for the
information to be manually inputted.
System Modifications for Legislative Changes: The Principal does not charge for required system
changes for new laws or regulations.
Compliance Testing: The Principal will perform the following compliance testing services as part of the
service agreement:
401(k)/401(m) discrimination testing
Internal Revenue Code 401(a) 17
Internal Revenue Code §415(c) annual addition testing
IRC §402(g) dollar limit testing on 401(k) deferrals
IRC §416(c) top heavy testing
§410(b)
Legal Support: The Principal has a staff of ERISA attorneys and paralegals dedicated to the Retirement
Plan Services unit. The Compliance Services Department is responsible for assisting with plan design
and plan drafting issues. Routine questions are at no charge.
1099-R Reporting & Distribution Processing: Distributions are only limited by the terms of the plan. In
January of the year following distribution, The Principal will issue Form 1099-R to the participant. At the
end of the year, they prepare and mail individual 1099-R forms to plan participants and beneficiaries who
had distributions for each tax year. The information is then filed with the IRS via magnetic tape in
accordance with their guidelines.
Participant Statements: The Principal sends quarterly statements to participants summarizing their
account activity within 15 days of the quarter end. Online statements are available "on -demand" on the
website covering any monthly period.
Plan Reporting: The Principal generates certain reports to Plan sponsors automatically. Monthly reports
are sent detailing participant loan activity. A quarterly report is prepared to provide a summary of the
participants' activity by participant valuation, loan delinquency, minimum required distributions, and
investment default. Participants can elect to have their statements mailed to their homes or be sent to
them electronically via the participant Message Center on the Internet. Copies can also be requested
through the Client Contact Center. An annual certified copy of the trust is prepared each year. Reports
can be requested ad hoc as well.
Report Customization: Plan level reports can be requested from The Principal, or Poudre Fire can run
them directly from the website. The website has model reports, but a report builder tool is available to
We
create more custom reports. Participant statements are available in different formats and participants can
choose the level of detail on their statements on an individual basis.
Internet Access: The Principal provides plan sponsor Internet access through their website. Poudre Fire
can access participant level activity, find investment performance, monitor plan level statistics and read
compliance newsletters. In addition the website allows plan participants to access detailed plan
information such as eligibility, matching formulas, and vesting. The website also allows participants to
view, monitor, and manage their retirement account. A retirement planning calculator is available at the
website.
Anticipated Problems: The Principal does not foresee any problems incorporating the Poudre Fire plan
into their recordkeeping system..
Administration
Voice Response System & Web Access: The Principal will provide Poudre Fire plan participants the
ability to execute transactions through their Interactive Voice Response System (IVR) and the website.
The website and IVR can accommodate all of the services listed in the Statement of Work and in the
proposal.
The IVRS is has been in effect since 1989. Participants using the IVRS can transfer to a call center
operator at any time during service hours, 6:OOam to 8:OOpm MT, Monday through Friday (excluding
major holidays), and 7:OOam to 1:OOpm MT on Saturday. The average response time to access a
representative from the IVR during the last 3 quarters is less than 60 seconds.
IVR and Web Capabilities & Platform: The Principal's IVR and website serve over 3 million
participants. In situations where call volume peaks, The Principal has backup retirement specialists in
Grand Island, Nebraska and Des Moines, Iowa call center locations available to assist with participant
inquiries. The Principal's Information Technology Department performs routine maintenance on the
system four times a year. Overall system availability has averaged 99. 9 %.
Complaints: If a service fails to meet Poudre Fire's expectations, a senior client service associate will
respond to the complaint and make every attempt to resolve the problem. If the correction does not meet
Poudre Fire's satisfaction, The Principal will waive the fee paid for that service. Additionally, comments
are monitored by senior management for trends and service improvement recommendations. The
Principal also has an annual retirement employee survey so employees can offer suggestions for
improvements. The Account Executive Director continually reviews complaints and comments
specifically for each plan to ensure that any issues are resolved.
Personal Identification Numbers (PINS) and Passwords: Access to the IVR and participant website
requires an identification number and a 6-16 digit PIN that plan participants establish via the IVR or the
participant website after enrolling. Plan participants will also select a security phrase while establishing
their initial PIN. Participants will create the security phrase by creating a question and providing the
answer to that question. In order to establish or set a new PIN / Password using the IVR, the participant
can call a toll free number. Callers can opt to speak with a retirement specialist in The Principal's Client
Contact Center who will provide personal assistance in establishing a new PIN / Password. Participants
do not share the PIN / Password with the retirement specialist, and it is not kept in their system or
produced on paper.
Age 70`/z Distributions: The Principal will calculate, notify, and distribute to qualifying participants their
minimum required distribution on an annual basis. Payments are made according to the participant's
election on the distribution form.
51
Fund Transfers: Participants may transfer among the plan investment options daily via the IVR or the
website. Transfer requests received by 3:OOpm CST are processed the same business day based on that
day's closing share price.
QDROs: The Principal offers a standard QDRO service at no charge. The Principal provides information
to the plan sponsor to help determine if a Domestic Relations Order (DRO) is qualified. Upon receipt of a
DRO, a senior client service associate, reviews the information, completes a detailed checklist, and sends
correspondence to the plan sponsor. Upon receipt of a DRO, The Principal places a hold status on all
activity for the participant, establishes a separate account for the alternate payee once the order is
determined to be qualified and distributes the assets to the alternate payee, if requested and if it is allowed
by the plan. The Principal also offers an expanded QDRO service. If this service is requested, a QDRO
determination unit will be responsible for providing the services required to fully administer a submitted
DRO. The setup includes a review of the plan document and creation of customized QDRO
administrative procedures, model language for a DRO and letters for The Principal to use in
correspondence with the participant, alternate payee, and their respective legal advisors. There is an
initial setup fee of $500 for the expanded QDRO service.
Plan Loans: Participants may initiate loans via the IVR, website, or through a representative in the client
contact center. Checks are normally mailed to participants within 3-5 business days.
Hardship Withdrawals: Participants may initiate loans via the client contact center. Participants can
choose either a custom withdrawal service in which participants send the request to The Principal to
approve hardship withdrawals within predetermined guidelines set by the participant. The Principle
reviews the paperwork for the necessary signatures and then either directly deposits the funds or mails a
check directly to the participant's home. An additional fee of $35 per determination applies. Participants
may also opt for a Poudre Fire review. Upon completion, financial hardship documents are routed to
participants for review and signature. Once approved, The Principal direct deposits the funds or sends the
withdrawal check to the participant's home. There is no additional charge for this type of review.
Investment Services
Principal's semi -bundled investment universe consists of approximately 100 proprietary Principal and
150 outside investment options. A sample investment menu was provided that included 25 variable
annuity Principal and outside investment options. Under Principal's proposal, Poudre Fire would be able
to select from a limited list of annuity options and outside investment options. Selecting Principal would
initiate a major disruption to the existing investment menu as many of the existing options would be
mapped into proprietary Principal options.
Principal's proposal includes the Principal Fixed Income option which is an insurance company backed
account. The option does not have an explicit expense ratio, rather the option has an implied margin or
spread that typically ranges from 1.00%-2.00%. The Principal Stock Index Account has a 0.31 % though
it was not specifically included in the proposal.
Principal did not comply with the requirement for funds offered at NAV as defined in the Statement of
Work, instead they propose use of their variable annuity products.
Cost Proposal
Principal is proposing a "zero" administrative fee where their services will be paid for by the revenue
sharing and management fees they collect from the variable annuity options and the spread on the Fixed
52
Income option. Based on the available options, the weighted average expense ratio will likely be similar
to the vendors. No administrative reallowance or revenue sharing will be provided to Poudre Fire.
Investment advice is provided by Financial Engines which charges a $15 per participant annual fee.
Personalized managed account solutions are available through Ibbotson Associates. A self directed
brokerage account is available with a $75 annual fee. Principal charges $40 for loan origination, $42 for
loan maintenance and includes standard QDRO processing. The proposal has waived all fees for hardship
withdrawals, enrollments, rollovers, distributions and trustee charges. The recordkeeping fee is
guaranteed for the length of the three year contract.
The cost proposal from Principal is significantly higher than the proposals from ICMA and Great -West
since they are offering proprietary annuity options with limited flexibility and no revenue sharing.
Moreover, Principal did not provide full fee disclosure and their true recordkeeping cost.
53
POUDRE FIRE AUTHORITY
BOARD OF DIRECTORS
THE POUDRE FIRE AUTHORITY ACTING
THROUGH ITS AGENT
THE CITY OF FORT COLLINS
Dick Rayner James B. O'Neill II, CPPO, FNIGP
Chairman Director of Purchasing and Risk Management
Date:
ATTEST:
City Clerk
APPROVED AS TO FORM:
Assistant City Attorney
[Insert Professional's name] or
[Insert Partnership Name] or
[Insert individual's name]
Doing business as [insert name of business]
By:
PRESIDENT
ATTEST:
CORPORATE SECRETARY
PRINT NAME
CORPORATE PRESIDENT OR VICE
(Corporate Seal)
SA 10/01
24
Security Benefit Group
General
Security Benefit Group agrees to all requirements in the Statement of Work and Vendor Qualifications
Document.
Security Benefit, a mutual holding company, was established as a fraternal society in Topeka, Kansas in
1892. Over the last 100 years, Security Benefit has evolved into one of the country's leading providers of
retirement products and services.
Security Benefit specializes in providing retirement programs, investments, education, administration, and
record -keeping services for a broad array of markets and employer types including non-profit,
governmental, and for profit organizations. Their customers include municipalities, elementary and
secondary education institutions, hospital and healthcare organizations, and private -sector corporations.
Security Benefit has been offering investments since 1944 and providing defined contribution plan
investment and administration services since 1974
Security Benefit employs over 500 employees dedicated to the retirement plans marketplace, all located
in the Corporate Headquarters in Topeka, Kansas.
There will be a team of four key relationships between Security Benefit and Poudre Fire Authority. Mr.
Kevin Watt oversees market development strategies for employer -sponsored retirement plans in the
public, private, and not -for -profit markets. Mr. Frank Memmo is responsible for oversight of the
implementation plan and customer service. Ms. Catherine Newsham is responsible for management of
the implementation team and plan administrators assigned to the Plan. Mr. Paul Nacario is responsible
for oversight of sales and marketing efforts for the plan and would be the primary relationship manager
for the account. In addition to the above individuals, Security Benefit will provide on site financial
representatives.
Security Benefit currently provides recordkeeping services to plans totaling more than $12 billion in
assets, with participants totaling over 300,000. Out of 7,035 total plans, 210 (3.0%) have between 100
and 500 employees, and nine (.1 %) plans have between $20 and $50 million in assets. 99% of their plans
are public sector business. Security Benefit currently has 290 public plans in Colorado.
The same team that is responsible for conversion support will also be responsible for coordinating all
ongoing support on behalf of the plan. Under the guidance of the previously listed individuals, Security
Benefit forms a transition team dedicated to the conversion process. Mr. Kevin Watt, Mr. Frank Memmo,
and Ms. Catherine Newsham are part of this team.
Immediately after the contract is awarded, Security Benefit will form a transition team that will work very
closely with the Poudre Fire Authority. Next, legal documents and processes for transferring assets from
the current provider's trustees/custodians to Security Benefit's assigned trustee/custodian are reviewed
and completed. Then, information is gathered for integration of Security Benefit's recordkeeping system,
trading platform (NSCC), and the investment providers. All trade agreements are reviewed and signed to
establish trading rules and pricing agreements for the Plan. On the date of the conversion: funds are
wired to Security Benefit in conjunction with trust account ending balance records, plan records are
copied and electronically transferred to Security Benefit and loaded, Investment funds are wired to
Security Benefit and invested into the pre -determined mapped funds if applicable, the investment trading
platforms are activated for live trades, and plan and participant investment balances are reviewed and
balanced against the transferred assets. Finally, all records and plan components are reviewed for
54
accuracy and completeness. The length of the blackout period will be dependent upon how quickly
Security Benefit receives the transition data from the prior provider.
Administration of the plan will be handled from Security Benefit's Home Office located in Topeka,
Kansas. All plan level service will be provided directly by Security Benefit, while participants will be
serviced by Security Benefit as well as on site financial representatives. They will provide the plan and
participants the option to interact with Security Benefit through multiple means including; on site
financial representative(s), internet, customer service center, dedicated Plan Administrator, and interactive
voice response.
In the past ten years, Security Benefit has not been subject of any litigation or disciplinary action.
Security Benefit serves as a non -discretionary plan recordkeeper and will assist the plan sponsor with any
necessary fiduciary responsibilities. Security Benefit will assume fiduciary responsibility for all
administrative services performed on behalf of the Plan. Security Benefit provides a non -discretionary
directed trustee through UMB Bank. Security Financial Resources Inc. (SFR), Security Benefit's
subsidiary responsible for providing plan administration services, maintains a blanket liability policy for
errors and omissions. SFR has a single limit (individual claim and aggregate) coverage of $1M on a
claims -made basis under a policy issued by American International Specialty Lines Insurance Company.
Security Benefit is not utilizing a joint venture arrangement. Security Benefit will not be subcontracting
any services to another company.
Over the three years, Security Benefit has gained approximately 600 new defined contribution clients.
They have not lost any defined contribution clients during that time. Security Benefit has converted 18
defined contribution plans from Prudential during the last nine months.
Security Benefit will comply with audit requests, and unless the request is unusual, anticipates no
problems in providing as much assistance as is necessary.
Security Benefit offers the Security Benefit Group Healthcare Reimbursement AccountSM (HRA), which
is a bundled VEBA Trust program. An annual asset -based fee of 85 basis points would apply to this
program if offered in conjunction with the 401(a) services outlined in the proposal.
Employee Communication
Security Benefit will work with the Authority to design a series of group implementation and education
meetings to provide participants information about the program. These meetings will be offered on a
schedule designed to cover all required locations and shifts. A communication and education plan will be
developed with the Authority and will cover all aspects of the plan introduction as well as ongoing
education and enrollment support for the plan.
During the one-on-one consultation sessions, key plan features and benefits are reviewed including full
disclosure of all fees and restrictions. Each participant's risk tolerance and investment objectives are
reviewed and the representative will make specific investment recommendations. Participants requesting
a more in-depth financial analysis may schedule an off -site appointment convenient to their schedule.
On a quarterly basis, Security Benefit makes available investment information to participants containing
investment management information, fund descriptions, fund facts, portfolio manager process, and
updated fund performance. Participants also have access to Security Benefit's interactive Internet website
that offers asset allocation and investment selection tools, and educational information such as news
articles related to retirement plans.
55
Communication materials, such as posters, mailbox stuffers, and enrollment kits are utilized when
announcing a retirement plan program. During the enrollment process, participants will be actively
involved in identifying their specific retirement goals and objectives, complete a suitability questionnaire
to objectively evaluate their investment risk tolerance, and to determine their individual investment
profile.
As part of the ongoing communication and education plan, Security Benefit representatives are available
to provide financial planning workshops and seminars to plan participants. These topics may include
state retirement benefits, fundamentals of investing, retirement planning, and tax strategies.
Representatives will also participate in benefit fairs and other activities at no additional cost if desired by
the Authority. On an annual basis, Security Benefit will review Poudre Fire Authority's communication
and education plan to assure that it is achieving all defined objectives.
Security Benefit develops and provides their own communication and education materials, and the cost is
included in their cost proposal. Security Benefit is open to discuss any specific customization needs the
plan may have. The cost of customization is determined at the time of each request and is based on the
complexity and resources required to complete the request.
Security Benefit is willing to enter into a business practices agreement with any on -site representatives to
limit their on -site sales efforts to the programs being proposed. Representatives are compensated via a
commission structure that does not change based on participant investment and/or disbursement
decisions.
Security Benefit is focused on providing face-to-face education and advice for plan participants.
However, their wording to "limit" their reps on -site sales efforts still concerns us. We recommend that
Poudre Fire Authority expressly prohibit on site sales. The fund specific information provided in the
appendix was adequate and contained Morningstar -type analyses. The basic brochures and mailings
attached in the response were generic and did not display Security Benefit's ability to customize
materials. Their online website sample provided account level information; however, other educational
tools were lacking.
Recordkeepin�
Recordkeeping System: Security Benefit Group's recordkeeping system is leased from SunGuard
Corporation and has been utilized since 1999. SunGuard's programming staff maintains the system's
core accounting package. SunGard provides new releases for the OmniPlus system on a monthly and/or
quarterly basis. Security Benefit receives the upgrades when they are appropriate for the plans under
administration.
Systems Backup: Security Benefit Group has in place both Business Continuity and IT Disaster Recovery
plans that encompass critical operational elements of the company. SunGard Planning Solutions, Inc.
creates and maintains these plans and to provide facilities, equipment, and connectivity in the event of an
actual disaster. The plan documents are reviewed and updated at least annually. Tests are conducted
annually at SunGard's recovery facilities in Chicago, Philadelphia, and/or St. Louis. The OnmiPlus
system is PC based and is established on a Hewlett Packard Server and a Unix Operating system. The
system is constantly monitored to maintain compliance with current laws, regulations, and client needs.
Payroll/Wire Reconciliation: Security Benefit Group will reconcile payroll contributions each week
before Poudre Fire wires the funds. Security Benefit Group has the ability to process participant
contributions and loan repayments submitted in the sample file layout. Security Benefit Group will send
an electronic file of new enrollees, contribution changes, address updates, and other indicative data each
week to Poudre Fire.
56
Contribution Processing: Security Benefit Group can post the fund purchases on the same date as the
contribution is deducted from the participants' paychecks, if the data from Poudre Fire is reconciled in
advance of actual wire from Poudre Fire.
Recordkeeping System Security: Access to plans can be granted on a per -client or per -participant bases.
Each associate is assigned a confidential password in order to access the plan. The administrative system
is structured to allow the associates access to processing certain transaction types on specific clients
and/or participants. Virus protection is on every server and desktop and is automatically updated multiple
times each day.
Quality Control: Security Benefit Group has front-end edits to ensure that transactions are in compliance
with plan provisions. Examples include enforcing limits on the number of loans outstanding and limiting
enrollments in excess of plan limits. Transaction files are reconciled each day. For data discrepancies,
Security Benefit Group will contact the designated plan sponsor delegate no later than 24 hours upon
discovery of the discrepancy and coordinate resolution of the discrepancy with the appropriate
individual(s). All items are documented on an internal tacking system until resolved.
System Modifications for Legislative Changes: Security Benefit Group does not charge for required
system changes for new laws or regulations.
Compliance Testing: Security Benefit Group provides routine plan compliance services, including
consultations on plan design and documentation issues, administrative and operating procedures, error
corrections and reporting requirements, and other interactions with regulatory agencies. Under normal
circumstances, there is not an additional fee for these services.
Legal Support: Security Benefit maintains a staff of employee benefit professionals, including attorneys,
plan administrators, and compliance specialists that monitor the regulatory environment for changes in
both Federal and State laws as it pertains to retirement plans and to the general retirement industry. In
some cases, Security Benefit may utilize outside counsel for legal services, including legal opinions and
counsel.
1099-R Reporting & Distribution Processing: Distributions are only limited by the terms of the plan. In
January of the year following distribution, Security Benefit Group will issue Form 1099-R to the
participant.
Participant Statements: Online statements are available "on -demand" on the website covering any 90 day
period. Security Benefit Group mails participant statements 10 days after each calendar quarter and has
100% accuracy in mailing participant statements.
Plan Reporting: Security Benefit Group's recordkeeping and administrative system has the ability to
produce over 200 standard reports on a participant, employer and/or regulatory level. Depending on the
plan, Security Benefit Group can create manual asset summary and contribution reports, which present
fund activity at the plan level, including contributions and distributions. Security Benefit Group works
with each plan sponsor to determine the type of information needed and the best format to relay the
information back to the plan sponsor.
Report Customization: Security Benefit is open to discussing the customization needs of Poudre Fire in
regards to any reports. Additional fees may apply for customization of reports and will vary based on the
complexity of the request.
57
Internet Access: Security Benefit Group provides plan sponsor Internet access through their website.
Poudre Fire can access participant level activity, find investment performance and monitor plan level
statistics at this website.
Anticipated Problems: SBG does not foresee any problems incorporating the Poudre Fire plan into their
recordkeeping system.
Administration
Voice Response System & Web Access: Security Benefit Group offers a toll -free voice response system
(VRS) for participants in the Plan. The voice response system is available 24 hours a day / 7 days a week.
Security Benefit's VRS has been in operation since 1977. When using the voice response system
participant's have the capability to link to the Customer Call Center to speak to an associate, during the
Call Center's operational hours. Security Benefit Group's Customer Call Center is available Monday
through Friday from 6 am to 5 pm (MT). Security Benefit Group also provides participants 24-hour
access to a secured Internet site. This site provides employee education and guidance, online advice,
retirement calculators, loan calculators, paycheck calculators, and participant account access.
VRS and Web Capabilities & Platform: Security Benefit Group's telecom function is supported within
the Information Technology department. Security Benefit Group utilizes Siemens telecom solutions,
which includes a state-of-the-art PBX (Siemens Hicom 300), digital Siemens phones, unified messaging
(combined voice -mail, Email, and fax), digital server -based call recording, and state-of-the-art call center
tools. Redundant web servers and telecommunications interfaces are incorporated to ensure that access is
available 24-hours a day, 7 days a week, and 365 days per year. The Security Benefit Group Customer
Call Center has a response time goal to answer 90% of all calls within 20 seconds. Internet volume
averages 6,000 hits per day. The website has the capacity to handle approximately 500,000 hits per day.
Security Benefit Group has never hit peak capacity on the website.
Complaints: Customer service complaints are documented and responded to within 24 hours by a
customer service manager. If necessary, the complaint is referred to the plan manager to ensure
resolution occurs as soon as possible. All complaints are logged and reviewed by management to ensure
that Security Benefit continues to provide the highest quality service available.
Personal Identification Numbers (PINs) and Passwords: A PIN is assigned when the participant enrolls
into the plan. The participant has the capability to change their PIN number through either the VRS or
website. The change will result in written confirmation. If a participant misplaces their PIN, Security
Benefit can provide the participant with a new PIN via a request through a Customer Service
Representative. If a participant enters a PIN incorrectly 3 times on the system, Security Benefit will
restrict access to the account. A database -matching program is initiated to ensure the User ID and PIN
matches the participant's account. Each transaction request is maintained in an electronic history file and
becomes part of their permanent account records.
Age 70'% Distributions: When participants reach age 70 1/2, a letter of explanation and withdrawal form
are sent to the participant. The recordkeeping system maintains the life expectancy for calculating the
withdrawal amount. If a prior RMD has been processed, the system stores the life expectancy calculation
used from the prior payment. The system offers the participant the ability to have their RMD processed
automatically each year. The system sells the appropriate investments to satisfy the transaction request
and creates a disbursement record. The recordkeeping system calculates and withholds the appropriate
Federal and State taxes, generates the check, and maintains information for tax reporting. The check is
made payable to the name and address on the account and sent to the participant on the following business
day.
QDROs: QDROs are processed in accordance with plan guidelines. The alternate payee is set up on the
system and the account of the participant is separated.
Plan Loans: Participants may initiate loans via the VRS, website, or through a participant services
representative.
Hardship Withdrawals: Participants may initiate loans via the VRS, website, or through a participant
services representative.
Investment Services
Security Benefit Group's total investment universe consists of over 1,000 funds from 14 different
investment managers. Security Benefit has expressed their willingness and ability to expand their
universe and add funds outside their network as requested by the plan sponsor. The proposal includes
replacing the three separate accounts (MIDCAP Account, Core Equity Account and PRIDEX Account) as
well as the existing Fixed Income and Money Market options. Security Benefit proposed adding the
Security Mid Cap Value and Security Mid Cap Growth as well as the Federated Capital Appreciation
(large core) as new mutual fund options to replace the Prudential separate accounts.
The proposal includes the Security Benefit Advisor Fixed Account and the Dreyfus Money Market fund
(0.52% expense ratio). The Security Benefit Fixed Account is a general account backed option and does
not have an explicit expense ratio. Rather, the option has an implied margin or spread that typically
ranges from 1.00%-2.00%. As such, full fee transparency is not available. Based on the current asset
allocations, the weighted average expense of the proposal is nearly identical to the current 0.92%
weighted average fund expense.
The strength of Security Benefit's investment proposal is based on their ability to offer a customized
menu of NAV mutual funds. The investment universe, however, is considerably smaller than more of the
other vendors and the proposal includes the required use of a general account fixed income option.
Cost Proposal
Security Benefit is proposing that their services will be paid for by the revenue sharing and management
fees they collect from the mutual funds and the spread on the Security Benefit Fixed Account. They will
provide a $7,500 annual administrative allowance.
Guidance and investment advice is provided by Morningstar where the proposal assumes the cost of the
service. A self -directed option is available through Schwab and the annual participant administrative fee
is waived. Security Benefit charges $100 for loan origination, $50 ongoing and includes standard QDRO
processing at no additional charge. The proposal has waived all fees for hardship withdrawals,
enrollments, rollovers and distributions. No contract termination fees were included in the proposal.
Because Poudre Fire currently receives $7,500 in rebates from Prudential, there is no cost savings to this
option.
59
T. Rowe Price
General
T. Rowe Price agrees to all of the requirements in the Statement of Work. T. Rowe also provided copies
of their standard recordkeeping and trust agreements.
T. Rowe Price was established in 1937 and incorporated in the State of Maryland in 1946. T. Rowe Price
Group, Inc. is a publicly held corporation. T. Rowe is licensed to do business in Colorado and they have
operation facilities in Colorado Springs. If chosen, Poudre Fire Authority would be serviced out of
Colorado Springs. A list of directors and executive officers was included in the proposal along with their
respective biographies. While T. Rowe Price is a public company, 30% of outstanding shares are owned
by current and former employees. T. Rowe Price manages more than $200 billion in assets, including
nearly $60 billion in defined contribution plan assets. T. Rowe Price is a registered investment advisor
under the Advisor Act of 1940. They included Parts I and II of their ADV in the materials proposed.
Steve Smith, Senior Client Relationship Manager, will lead the T. Rowe Price client service team. He
will be responsible for coordinating overall delivery of services to Poudre Fire Authority and will meet
regularly with Poudre Fire. He will be the first point of contact in the event of any plan level concerns
and assist with implementation and conversion.
T. Rowe Price's New Business Conversion Team consists of at least five individuals on each team.
Barbara Weir will lead Poudre Fire Authority's Conversion Team. Once the conversion is complete, the
Plan Service Team, led by Todd Remmert, will handle ongoing administration. The Plan Service Team is
divided into three key functions: Client Service, Transactions, and Control. The Client Service division
will serve as the main contact for day-to-day administrative issues. Processing for most transactions is a
shared responsibility between the Client Service and Transaction groups. The Control group audits
transactions and deals with any special edits that may arise during regular processing.
T. Rowe Price maintains ERISA attorneys, paralegals, and benefits consultants on staff to assist clients in
compliance activities. Deborah Novotny will lead Poudre Fire Authority's Compliance Team. T. Rowe
Price has a team of over 60 communication managers, copywriters, designers, desktop publishing
specialists, production managers, and ERISA attorneys.
The average rate of turnover in T. Rowe Price Retirement Plan Services is 11%. For professional staff the
rate is 8%, while turnover among administrative/recordkeeping staff is approximately 14%. All turnover
rates include internal transfers and promotions.
T. Rowe Price manages over $59 billion in assets for retirement plans and provides recordkeeping
services for over 1.3 million participants. Out of 983 plans under service, T. Rowe Price has 268 (27.2%)
plans between 100 and 500 employees, and 187 (19.0%) plans with $20 to $50 million in assets.
Poudre Fire Authority will have a dedicated conversion team. However, the ongoing service team will be
involved from day one, to ensure they have a complete knowledge and understanding of the plan and its
requirements. Central to the conversion process is the development of a detailed implementation and
conversion plan documenting responsibilities and schedules for the critical dates related to administration,
conversion, information systems, and employee communications. The timetable serves as a monitoring
tool to ensure that all involved parties stay on track during this critical phase. A sample preliminary
implementation timeline was provided.
T. Rowe Price Associates, Inc., its subsidiaries, affiliates, officers, and employees are named as parties to
minor litigation involving the accounts of T. Rowe Price mutual fund shareholders, retirement plan
participants, and retail customers in the Company's brokerage unit. They included summaries of five
open cases against T. Rowe Price.
T. Rowe Price is a directed recordkeeper and trustee, meaning that they do not exercise discretion.
Consequently, Poudre Fire Authority would remain the administrative fiduciary. T. Rowe Price Trust
Company is a directed trustee and in that capacity, acts upon instructions provided by Poudre Fire
Authority or participants. T. Rowe Price maintains insurance to protect the plan, the employer, and the
participants from any loss resulting from fraud or negligence by their employees or representatives. The
insurance protects T. Rowe Price Associates, Inc., its various subsidiaries, and the Price Funds. The
liability coverage protects from losses resulting from errors and omissions, whereas the fidelity coverage
protects against loss due to third party fraud, robbery, embezzlement, theft, forgery, etc.
T. Rowe Price will provide most services directly; however, they will contract with the following outside
organizations to provide specific services. They include M&T Bank (custodial services), Bank of New
York (custodial services), Chase (custodial services), CBIZ (full form 5500), Oxford Associates (selected
compliance testing), Aon Consulting (QDRO approval) and Synhrgy HR Technologies, Inc. /Mercer
Outsourcing (Defined Benefit Recordkeeping). T. Rowe also maintains alignments with various non T
Rowe fund managers.
Over the last three years, T. Rowe has gained 77 clients with almost 330,000 participants and $11.7
billion in assets. During the period, they have lost 85 clients representing almost 98,000 participants and
$2.8 billion in assets. T. Rowe Price provided a list of client references in the response.
T. Rowe Price has agreed to work with the plan auditors to provide them with any requested information.
At this time, T. Rowe Price does not offer a Retiree Health Savings Plan.
Employee Communication
T. Rowe Price's Participant Communications Group will work with Poudre Fire Authority to develop a
comprehensive campaign to meet the needs of employees. Using the appropriate media and messages for
Poudre Fire Authority's population, a team of communication professionals will implement a tailored
Communications Plan developed specifically for Poudre Fire Authority.
The process begins with understanding Poudre Fire Authority's organization, its culture, employee
demographics, and past communications experiences. Once they have a true understanding of Poudre
Fire Authority's needs, they segment the population. T. Rowe Price believes that education, age, and
compensation levels significantly affect the position of various groups on the investor learning curve. In
the third phase, Poudre Fire Authority and T. Rowe Price select the most appropriate media and target
specific messages to each employee segment. They feel that success is dependent in large part on
audience segmentation and the use of straightforward messages and media that are most relevant to those
audiences. Based on the fact-finding process described above, they develop communications strategies
that are appropriate for both the novice and the more experienced investor.
At all stages of the process, T. Rowe Price will measure results. They will monitor diversification of
account balances and current contributions, as well as participation levels through detailed quarterly
reports. T. Rowe Price will also conduct an annual follow-up audit to ensure that their communications
efforts remain "on track" and consistent with Poudre Fire Authority's goals. A representative list of the
materials they will provide both during the conversion and ongoing is detailed within the response.
61
The overall campaign will include investment education materials as well as enrollment meetings and
ongoing seminars for employees. T. Rowe's in-house communications staff creates all of the
communication materials including design, writing, and production management. Printing and
production are out sourced to a third party. T. Rowe's advisory services are designed to cover an
investor's full lifecycle. They include initial plan enrollment and asset allocation guidance for new
participants, rollover services for terminating employees, distribution guidance, and post -retirement
management for retirees.
T. Rowe Price has formed an alliance with Morningstar Associates, LLC to give participants access to
several of Morningstar's tools such as Clear Future, Portfolio X-Ray, Portfolio Tracker and an IRA
calculator. Clear Future allows investors to examine the relationship between long and short-term risk,
asset allocation, and retirement income. Portfolio X-Ray gives investors a detailed analysis of an
investor's portfolio and shows total investment in individual stocks through direct ownership or across
mutual funds. Portfolio Tracker presents a quick reference page of financial information on a user -
defined group of mutual funds or stocks. All of these tools are available on T. Rowe Price's website free
of charge. T. Rowe also offers several on-line proprietary calculators that address many financial
planning decisions.
Meeting representatives are exclusively dedicated to providing retirement plan information. They do not
sell any outside products or services. Any attempt to solicit an employee for an outside product is
prohibited. As a firm policy, they do not share any employee information with T. Rowe's retail services
group or outside parties. Representatives are paid a base salary and are eligible for a discretionary bonus,
which is dependent on client satisfaction. Representatives are NASD registered (Series 6 and/or 7). They
do not hold insurance licenses. They have included 10 days of free employee meetings and 20 free web -
based employee meetings annually.
T. Rowe Price provided focused, creative communication materials; however, there was little informative
detail about live meetings. Most of the program seemed to revolve around mailings and internet usage.
The customized sample materials that were provided were original and covered basic investing concepts,
plan parameters, and detail about the individual fund offerings. The allowance of 10 meetings would
allow Poudre Fire Authority to put together some group programs to further promote enrollment and
encourage participants to increase deferrals. Their strategic relationship with Morningstar enables plan
participants to get detailed information on all mutual funds offered. Internet savvy employees would
likely benefit most from T. Rowe Price's education materials as they have the most internet content of all
the vendors.
Recordkeepinp
Recordkeeping System: T. Rowe Price's recordkeeping system was purchased from SunGuard
Corporation and has been utilized since 1988. SunGuard's programming staff maintains the system's
core accounting package. T. Rowe Price develops enhancements to the core system and is responsible for
upgrading the core system.
Systems Backup: T. Rowe Price utilizes IBM and SunGuard utilities to backup the system on a daily,
weekly, monthly, and annual basis. Backup data is stored off -site, but can be retrieved within 24 hours.
Disaster recovery tests are conducted throughout the year and a comprehensive test is conducted once a
year.
Payroll/Wire Reconciliation: T. Rowe Price will reconcile payroll contributions each week before Poudre
Fire wires the funds. T. Rowe Price has the ability to process participant contributions and loan
repayments submitted in the sample file layout. T. Rowe Price will send an electronic file of new
enrollees, contribution changes, address updates, and other indicative data each week to Poudre Fire.
62
Contribution Processing: T. Rowe Price can post the fund purchases on the same date as the contribution
is deducted from the participants' paychecks, if the data from Poudre Fire is reconciled in advance of
actual wire from Poudre Fire.
Recordkeeping System Security: The T. Rowe Price technology center employs a dedicated security staff
and is located in a remote, unmarked location. Access to recordkeeping data is provided on a need -to -
know basis. Access is also restricted based on an individual's level of responsibility and service area.
Quality Control: T. Rowe Price has developed front-end edits to ensure that transactions are in
compliance with plan provisions. Examples include enforcing limits on the number of loans outstanding
and limiting enrollments in excess of plan limits. Transaction files are reconciled each day.
System Modifications for Legislative Changes: T. Rowe Price does not charge for required system
changes for new laws or regulations.
Compliance Testing: T. Rowe Price will perform the following compliance testing services as part of the
service agreement:
40 1 (k)/401 (m) discrimination testing
Internal Revenue Code (IRC) §415 contribution limit testing
IRC §402(g) dollar limit testing on 401(k) deferrals
IRC §416 top heavy testing
IRC §410(b) coverage testing
Legal Support: T. Rowe Price has a staff of ERISA attorneys and paralegals dedicated to the Retirement
Plan Services unit. The Compliance Services Department is responsible for assisting with plan design
and plan drafting issues. Routine questions are at no charge, but an hourly fee of $130 may apply
depending on the scope of the project.
1099-R Reporting & Distribution Processing: Distributions are only limited by the terms of the plan.
Upon receipt of distribution forms in good order, T. Rowe Price executes the trades to generate funds,
audits the information, and distributes the check (usually 1-2 days). In January of the year following
distribution, T. Rowe Price will issue Form 1099-R to the participant.
Participant Statements: T. Rowe Price's objective is to send quarterly statements to participants
summarizing their account activity within 10 days of quarter -end. T. Rowe Price has a 99% statement
accuracy percentage. Online statements are available "on -demand" on the website covering any 90 day
period. Transaction confirmations are sent to participants within 48 hours of a transaction.
Plan Reporting: T. Rowe Price generates certain reports to Plan sponsors automatically. Weekly reports
are sent detailing contributions, loans, withdrawals, and plan market values. A quarterly report is
prepared to provide a summary of the participants' activity by money source, fund, and activity. Reports
can be requested ad hoc as well.
Report Customization: Plan level reports can be requested from the Plan Service Team, or Poudre Fire
can run them directly from the website. The website has model reports, but a report builder tool is
available to create more custom reports. Participant statements are available in different formats and
participants can choose the level of detail on their statements on an individual basis.
63
EXHIBIT B
INSURANCE REQUIREMENTS
1. The Service Provider will provide, from insurance companies acceptable to the City, the
insurance coverage designated hereinafter and pay all costs. Before commencing work under this bid,
the Service Provider shall furnish the City with certificates of insurance showing the type, amount,
class of operations covered, effective dates and date of expiration of policies, and containing
substantially the following statement:
"The insurance evidenced by this Certificate will not be cancelled or materially altered, except after ten
(10) days written notice has been received by the City of Fort Collins."
In case of the breach of any provision of the Insurance Requirements, the City, at its option, may take
out and maintain, at the expense of the Service Provider, such insurance as the City may deem proper
and may deduct the cost of such insurance from any monies which may be due or become due the
Service Provider under this Agreement. The City, its officers, agents and employees shall be named
as additional insureds on the Service Provider's general liability and automobile liability insurance
policies for any claims arising out of work performed under this Agreement.
2. Insurance coverages shall be as follows:
A. Workers' Compensation & Employer's Liability. The Service Provider shall maintain
during the life of this Agreement for all of the Service Provider's employees engaged in work
performed under this agreement:
Workers' Compensation insurance with statutory limits as required by Colorado
law.
2. Employer's Liability insurance with limits of $100,000 per accident, $500,000
disease aggregate, and $100,000 disease each employee.
B. Commercial General & Vehicle Liability. The Service Provider shall maintain during the
life of this Agreement such commercial general liability and automobile liability insurance as will
provide coverage for damage claims of personal injury, including accidental death, as well as for
claims for property damage, which may arise directly or indirectly from the performance of work under
this Agreement. Coverage for property damage shall be on a "broad form" basis. The amount of
insurance for each coverage, Commercial General and Vehicle, shall not be less than $500,000
combined single limits for bodily injury and property damage.
In the event any work is performed by a subcontractor, the Service Provider shall be responsible for
any liability directly or indirectly arising out of the work performed under this Agreement by a
subcontractor, which liability is not covered by the subcontractor's insurance.
Internet Access: T. Rowe Price provides plan sponsor Internet access through their Retirement
Plan@Work website. Poudre Fire can access participant level activity, find investment performance,
monitor plan level statistics, read compliance newsletters, and request ad hoc reports at this website.
A website is available for plan participants detailing plan information such as eligibility, matching
formulas, and vesting. The website also allows participants to view, monitor, and manage their retirement
account. Retirement planning calculators, social security calculators, and investment advice (if chosen by
Poudre Fire) are available at the website.
Anticipated Problems: T. Rowe Price does not foresee any problems incorporating the Poudre Fire plan
into their recordkeeping system.
Administration
Voice Response System & Web Access: T. Rowe Price will provide Poudre Fire plan participants the
ability to execute transactions through their Voice Response System (VRS) and the website. The website
and VRS can accommodate all of the services listed in the Statement of Work and in the proposal, but
some on-line investment advice service are an additional charge. Account projections are limited to the
website only.
The VRU is has been in effect since 1982. Participants using the VRS can transfer to a call center
operator at any time during service hours, 6:30am to 8:OOpm MT, Monday through Friday (excluding
major holidays). The average response time to access a representative from the VRS is less than 30
seconds.
VRS and Web Capabilities & Platform: T. Rowe Price's VRS and website serve over 500 defined
contribution plans representing over 1 million participants. Peak usage has been less than 5% of capacity
for the website. No line capacity issues have arisen with the VRS. T. Rowe Price utilizes a Meridian
Max Terminal to monitor VRS activity. For the website, maintenance is scheduled weekly from 12-3am
ET on Sundays if necessary. The VRS is updated every other Sunday in early morning hours.
Complaints: Participant questions and complaints are first routed to the Participant Service Center. If the
issue is not resolved, it is escalated to the Plan Service Team who will work with the participant to resolve
the issue.
Personal Identification Numbers (PINS) and Passwords: To access the VRS, participant must enter their
PIN and social security number. Each keystroke is recorded when a participant accesses the VRS. PINs
for the website are randomly assigned and mailed to the participants' homes. A PIN is disabled after
three unsuccessful attempts and the participant must contact the help desk to re -enable the PIN.
Participants will have two PINs with T. Rowe Price (VRS and website).
Age 70'/z Distributions: T. Rowe Price will calculate, notify, and distribute to qualifying participants their
minimum required distribution on an annual basis. Payments are made according to the participant's
election on the distribution form.
Fund Transfers: Participants may transfer among the plan investment options daily via the VRS, website,
or through a participant services representative. Transfer requests received by 4:OOpm ET are processed
the same business day based on that day's closing share price. Transaction confirmations will be mailed
within 2 business days.
QDROs: QDROs are processed in accordance with plan guidelines. The alternate payee is set up on the
system and the account of the participant is separated. T. Rowe Price has an outsourcing arrangement
64
with Aon Consulting to make QDRO determinations. The fee is $500 to set up the process and $750 per
QDRO determination.
Plan Loans: Participants may initiate loans via the VRS, website, or through a participant services
representative.
Hardship Withdrawals: Participants may initiate loans via the VRS, website, or through a participant
services representative.
Investment Services
T. Rowe Price's total investment universe consists of 91 proprietary funds and over 300 alliance funds.
While their universe is somewhat limited, T. Rowe Price has expressed their willingness to add outside
investment options as long as they are administratively compatible.
Out of the current investment menu, 13 options would be replaced by T. Rowe Price funds including the
T. Rowe Price Mid Cap Value, T. Rowe Price Mid Cap Growth, T. Rowe Price Growth Stock, T. Rowe
Price Equity Index, T. Rowe Price Retirement Date Funds (considered as one option and either age based
or risk based) and the T. Rowe Price Stable Value Fund. The weighted average expense of the existing
options would decrease from 0.92% to 0.71% under this scenario. The T. Rowe Price Stable Value fund
0.45% and the T. Rowe Price Equity Index fund 0.20% are competitively priced relative to the
competition. Moreover, the PIMCO Total Return "A" class would be converted to the lower cost
"Admin" share class.
Outside fund additions to the investment menu normally require a minimum of 0.25% in revenue sharing.
The T. Rowe Price proposed investment menu includes a competitive combination of existing outside
mutual funds with proprietary T. Rowe Price funds. One of the drawbacks to the proposal is the lack of
flexibility with respect to the proprietary funds, where proprietary fund eliminations would likely impact
the overall plan pricing.
Cost Proposal
T. Rowe Price is proposing that their services will be paid for by the revenue sharing and management
fees they collect from the mutual funds. No administrative reallowance will be provided under the T.
Rowe Price proposal, as all the revenue generated by the plan will only be used to offset the T. Rowe
Price recordkeeping costs. The weighted average expense of the investment menu is 0.71 % compared to
the existing 0.92% expense.
Investment advice is provided by either Morningstar, MPower or Financial Engines. A self directed
option, TradeLink, is available for a $75 per participant annual fee. T. Rowe Price charges $50 for loan
origination, $0 for loan maintenance and includes standard QDRO processing. The proposal has waived
all fees for hardship withdrawals, enrollments, rollovers, distributions and trustee charges. A $20 per
participant termination fee will be charged if the plan leaves within the first two years for reasons relating
to merger or acquisition.
T. Rowe Price's cost proposal is competitive from a mutual fund expense perspective as many of the
proprietary funds proposed have low expense ratios. However, the proposal does not include an
administrative reallowance or any revenue sharing.
65
Vanguard
Genera!
After a review of the information listed in the Statement of Work, Vanguard has determined that all of
Poudre Fire Authority's requirements can be accommodated.
Vanguard is registered as a corporation. The Vanguard Group, Inc., the entity of Vanguard, which would
provide recordkeeping services for Poudre Fire Authority, is a Pennsylvania corporation. All funds under
the Vanguard Group of Funds are registered for sale in Colorado. The Vanguard Group is the only
mutual fund organization that is owned by its member funds. A list of Vanguard's Senior Management
(directors) and Board of Directors was provided. Vanguard began operations on May 1, 1975, with John
Bogle at the helm.
As of March 31, 2004, the total value of assets for which Vanguard provides recordkeeping services and
the total number of participants in all defined contribution plans is over $200 billion and 2.7 million
participants, respectively. Vanguard provided a breakdown of the number of plans by number of
participants and number of assets. The total number of plans serviced among the breakdown is 2,168. As
a comparison to Poudre Fire Authority's plan, Vanguard services 360 plans that have between 1,000 and
5,000 employees and 180 plans that have between $50 million and $100 million in assets. 79% of the
plans that Vanguard services have fewer than 1,000 employees and 86% of the plans have under $100
million in assets.
The Poudre Fire Authority relationship team will be based out of the Scottsdale, Arizona office.
Poudre Fire Authority's conversion manager and conversion project leader will work together to
coordinate Vanguard's internal resources, arrange data testing, and set up the plan on the Vanguard
recordkeeping system. Associates from each Client Services area —including Account Administration,
Participant Education, Systems, and Sales —will participate in the transition process. After the plan is
converted and administered, the relationship manager and account administrator will assume
responsibility for ongoing administration. The Conversion Manager is responsible for the conversion
from Prudential to Vanguard. He or she coordinates the overall conversion project and manages the day-
to-day conversion and implementation phases within Vanguard. The relationship manager, account
administrator, and recordkeeping services manager provide day-to-day relationship management and will
help develop operations procedures and a comprehensive Administrative Manual for the plan. He or she
will be responsible for Poudre Fire Authority's overall relationship with Vanguard. The account
administrator acts as the daily point of contact and is available when questions arise or assistance is
required. After the conversion is complete, the relationship manager and account administrator will
assume responsibility for ongoing administration of the plan.
Vanguard's conversion process includes four major phases. This first phase involves receiving the
executed legal documents, finalizing the plan provisions and services, and testing the complete system
set-up and transactions. The second phase consists of finalizing payroll requirements, receiving test
payroll data, and testing processing for future contribution, loan, and other data files. These two phases
take place within the first few months before the valuation date. Phase three consists of defining the
participant data requirements, receiving test data from Prudential, reviewing test data for quality,
identifying existing reconciliation issues, enrolling Poudre Fire Authority's participants, and converting
loan information. The final phase of the project consists of receiving assets from Prudential, reinvesting
the assets the day they are received, and reconciling assets received to the final participant records.
Vanguard's transition period —from the time they receive reconciled data from Prudential to when they
update participants' records on the recordkeeping system —is no more than five business days.
Out of 2,168 plans under service, Vanguard has 725 (33.4%) plans between 100 and 500 employees, and
367 (16.9%) plans with $20 to $50 million in assets. Approximately 0.5 percent of Vanguard's full -
service contribution plan business represents public retirement plans. However, there are also 4.3% of
Vanguard's investment -only clients represented by public plans. There are two Colorado Public
Retirement Plan clients, both investment -only.
Within the last ten years, Vanguard has not been the subject of any disciplinary action by any security
regulatory agency or been the subject of any ethical inquiries, legal inquiries or other disciplinary
proceedings. There is currently pending litigation against Vanguard and its affiliates relating to
contractual disputes, provision of transfer agency and brokerage services, employment disputes and
property liability matters. According to Vanguard, no pending litigation is material.
Vanguard fully recognizes and accepts responsibility to act prudently and in the best interests of plan
participants in the areas of participant education/communication, investment management, and plan
administration/recordkeeping.
Vanguard maintains Directors and Officers Liability and Errors and Omissions insurance with coverage
up to $200 million (per loss and aggregate). The underwriter for the insurance coverage is ICI Mutual
Insurance Company, an investment industry captive insurer sponsored by the Investment Company
Institute, the national association for the mutual fund industry.
In addition to recordkeeping services, Vanguard provides nondiscretionary trustee services through
Vanguard Fiduciary Trust Company (VFTC), a wholly -owned subsidiary of The Vanguard Group.
The services being proposed will be the responsibility of Vanguard exclusively. Vanguard has a strategic
relationship with Financial Engines to provide investment advice to Vanguard clients. In addition,
Vanguard has entered into a relationship with CashEdge, a global online account aggregation and fund
transfer service. Vanguard also maintains agreements with more than 100 non -Vanguard fund managers
and administers more than 200 outside funds for their existing clients.
Over the last three years ending December 31, 2003, Vanguard has gained 380 clients totaling over $31.1
billion in assets. During that same time, they lost 196 clients totaling $12.8 billion. Vanguard sited the
following reasons for those clients leaving: A corporate merger or acquisition, an interest in other
services currently not provided by Vanguard and the desire to unbundle their 401(k) program. There are
no pending agreements to merge or sell Vanguard. Vanguard provided a list of clients as references as
well as an extended list of representative clients. Vanguard has converted 12 plans from Prudential to
Vanguard in the past three years and is scheduled for two more this year.
Prior to year-end, Vanguard will work with Poudre Fire Authority and the auditor to determine the
information and reports required to complete the annual financial audit. There is no additional fees for
providing data for routine annual audits.
Vanguard does not currently offer a Retiree Health Savings Plan.
Employee Communication
Vanguard's participant education programs offer a strategy that is customized for the particular goals and
employee population needs of each client. Their programs are designed to tackle the entire pyramid of
financial issues, from basic plan education to planning programs that address participants' total financial
67
situations and their sense of financial well-being. Throughout all of their materials, they employ a
communications approach that they call Plain Talk (e.g. straightforward, easy to understand advice and
planning brochures). They also believe education needs to be customized and targeted for each individual
participant. Poudre Fire Authority will have a dedicated education consultant, Winthrop Stauffer.
For the conversion of Poudre Fire Authority's plan to Vanguard, a dedicated education consultant will
work with Poudre Fire Authority to design an appropriate and effective program that includes
informational and educational literature (which may be delivered via print, online, or in a combination of
media), a video customized with Poudre Fire Authority's plan provisions and investment options, and
employee meetings that are conducted by fully trained and licensed Vanguard retirement education
specialists. According to Vanguard, these meetings often provide the foundation of a strong education
program, and although the meeting content varies with client needs and preferences, it generally includes
an overview of plan provisions, explanations of savings basics (e.g., dollar -cost averaging) and
investment concepts (e.g., asset allocation), fund descriptions, and financial planning information.
All participants have education -oriented information and tools available to them through Vanguard's
website, vanguard.com.
This education consultant will then work with Poudre Fire Authority to develop an ongoing education
program that is tailored to meet the needs of participants. Examples were provided from Vanguard and
include Vanguard's Plain Talk worksheets, personalized profiles, and personalized brochures/newsletter
campaigns. Vanguard will also make various advice models available to Poudre Fire Authority like
financial education meetings and reaching retirement workshops. An add -on to Vanguard's program is
their strategic relationship with Financial Engines. Financial Engines is a third party online retirement
planning advice tool. Some of the features available through Financial Engines include plan -level
customization, data population, and transactional capabilities. Plan level customization allows Financial
Engines to include Poudre Fire Authority's plan provisions and investment options in the analysis.
Participants have the option of automatically downloading their information from Vanguard's
recordkeeping system to Financial Engines. Finally, if participants are interested in implementing the
advice given by Financial Engines, it will be automatically executed on Vanguard's recordkeeping
system.
Vanguard financial counselors are salaried employees, and they receive no extra compensation for
making specific investment recommendations. In addition, because of their cost structure there is no
incentive for them to promote one fund over another.
Vanguard certainly has many resources for plan sponsors and participants to draw on. Vanguard
addressed all of the key factors that Poudre Fire Authority is looking for as far as the education program.
They presented a well -organized program that would allow for a smooth transition and more importantly
provide various avenues of education for the participants. Vanguard's prepared seminars seem to be
broad enough to interest many people, if they are willing to take advantage of them. The Financial
Engines feature would give participants an option to seek additional advice if they were interested and
that fact that it is linked with Vanguard's recordkeeping system is an added benefit. Individual attention
is available if participants are willing to pay for it. The only concern is how much qualitative and
quantitative detail Vanguard could provide if Poudre Fire Authority chose investment options outside the
Vanguard fund line up. While Vanguard provided many sample education materials, there was nothing
that really showed fund information outside of Vanguard funds or plan specific details.
RecordkeeninQ
Recordkeeping System: Vanguard's recordkeeping system has been in place since 1986. Vanguard
developed their system using the OMNIPLAN software package by SunGard Corporation. They
purchased the software from SunGard and licensed any enhancements they developed internally. After the
initial joint venture in 1986, Vanguard pursued an independent course to substantially enhance the system
to accommodate recordkeeping functions within a daily valuation environment. Vanguard's
recordkeeping system is now a proprietary product.
Systems Backup: Vanguard uses ACF2 on the system level. They also have several infrastructure features
to minimize the impact of systems outages and external disasters. A system -wide backup is conducted
weekly and the backup media is stored in off -site disaster recovery vaults.
Payroll/Wire Reconciliation: Vanguard will reconcile payroll contributions each week before Poudre
Fire wires the money to Vanguard. Vanguard has the ability to process participant contributions and loan
repayments submitted in the sample file layout provided in the RFP. All contribution transactions are
edited and reviewed on-line, prior to updating the recordkeeping system. The account administrator
assigned to the Poudre Fire account would contact Poudre Fire to resolve any data discrepancies.
Vanguard will send an electronic file of new enrollees, contribution changes, and other indicative data
each week to Poudre Fire.
Recordkeeping System Security: Vanguard security is designed to prevent unauthorized access both at the
system level and physical level. From a systems standpoint, management determines what access is
needed for each department and this access is limited with passwords and log -in IDs. Physically, the
facilities are protected by security guards 24 hours a day and the Technology Operations Center is
separate structure at the Vanguard campus. The building is equipped with security card access and is
monitored by an on -site closed circuit television system.
Quality Control: Vanguard's recordkeeping system contains specific internal controls to maintain audit
trails and accountability for all transactions. The recordkeeping system reconciles and balances all fund,
participant, and plan level activity. Reports generated from this system are reviewed by the Institutional
Control Department.
System Modifications for Legislative Changes: Vanguard does not charge for regulatory updates to their
system or for plan changes resulting from these updates.
Compliance Testing: Vanguard's Compliance Testing and Analysis Group (CTA) will perform the
following compliance testing services at year end as part of the standard package:
Compliance Testing
§415(c)(1) annual additions limit
IRC §402(g) annual deferral limit
§401(k)Actual Deferral Percentage (ADP)
§401(m)Actual Contribution Percentage (ACP)
Legal Support: Vanguard will provide plan design support to Poudre Fire through their ERISA Legal
Unit, Plan Consulting Group, and Compliance Testing and Analysis Group.
1099-R Reporting & Distribution Processing: Vanguard will mail 1099-R forms by January 31" to
participants who took distributions during the previous year. Vanguard files the 1099-Rs with the IRS by
February 28`h or as required. Vanguard does not impose any distribution restrictions other than required
by the plan document.
Participant Statement & Customization: Plan participants can receive quarterly statements via the U.S.
mail or access them electronically via the Internet. Participant statements can be customized or Poudre
Mot
Fire can select from standard layouts. Customized statements can include additional information such as
loan details, beneficiary information, and personal rates of return. Messages to participants can also be
included on the participant statements. Vanguard's goal is to mail participant statements within 15
calendar days following quarter -end.
Plan Reporting & Customization: Poudre Fire can choose from up to 43 categories of demographic
information to create customized ad hoc reports on-line at vanguard.com. Within 24 hours of request, the
report will be available to view on-line and an e-mail is sent notifying Poudre Fire of the report's
availability. The reports can be at the plan -level or the participant level. Examples of standard reports
available are distribution registers, plan financial reports, loan delinquency reports, and age 70'/z
minimum distribution reports. Vanguard can tailor plan management level reports, but additional charges
may apply if extensive programming is required.
Internet Access: The www.vanguard.com website includes education, account information, and
personalized financial guidance and advice. Custom messages can also be displayed to plan participants.
Participants can execute on-line transactions, including loans, allocation changes, and exchanges 24 hours
a day. The website can accommodate all of the services listed in the Statement of Work. Access to
personalized financial advice is an additional charge.
Anticipated Problems: Vanguard does not foresee any problems incorporating the Poudre Fire plan into
their recordkeeping system.
Administration
Voice Response System: Vanguard will provide Poudre Fire plan participants the ability to execute
transactions through Vanguard's VOICE Network, a toll -free voice response unit (VRU) available 24/7.
The VRU cannot accommodate the following participant services: plan information, address changes,
beneficiary changes, statement requests, account balance projections, retirement calculators, and
investment advice.
The VRU in existence at Vanguard today has been utilized since 1991. Participants using the VRU can
transfer to a Participant Services associate at any time during service hours, 6:30am to 7:O0pm MST,
Monday through Friday (excluding major holidays). The average response time to access a representative
from the VRU is eight seconds.
VRS and Web Capabilities & Platform: The website currently serves 2,168 defined contribution plans.
Vanguard maintains enough website capacity to handle five times the normal peak load of log ons per
minute. No instances have occurred where the VOICE network or website were overloaded. The VRU is
upgraded or repaired Sundays between lam and 5am EST. Upgrading the website is done in a manner
designed to be transparent to the plan sponsor and plan participants. The VOICE Network is based on
VRU technology and communications software developed by Avaya. The website architecture is
accessible through multiple T3 connections.
Complaints: Participant complaints are documented into Vanguard's Client Profile Report and sent to
Vanguard's Principal of Client Services. Complaints and resolutions are addressed and confirmed in
writing as a matter of procedure and assurance to clients.
Personal Identification Numbers (PINS) and Passwords: PIN numbers for access to the VRU are sent to
the participants' homes upon enrollment into the plan. Participants can contact Participant Services in the
event of a lost PIN. To access the website, participants must register by entering their social security
number, plan number, date of birth, home address, and zip code. To complete the registration process,
70
participants select a username and password. A Participant Services associate can also assist a participant
having difficulty with registration or who has forgotten his usemame or password.
Participant Enrollment: New participants can enroll via the website, VRU, or by accessing a Participant
Services associate.
Age 70% Distributions: Vanguard notifies participants who are 70Yz and are required to receive minimum
distributions. They automatically calculate and process minimum distributions according to the plan
document. In addition to minimum distribution notifications and calculations, the recordkeeping system
is flexible enough to accommodate participant requests for automatic distributions, including deferral of
distributions until a future elected start date.
Fund Transfers: The Vanguard recordkeeping system permits daily fund transfers either in dollar
amounts, shares, or in percentages of the fund account balances. Requests received by 4:OOpm ET are
valued and processed as of that day's close of business.
QDROs: QDROs are processed in accordance with plan guidelines. The recipient is set up on the record
keeping system and Vanguard transfers the amount from one account to another using a QDRO code for
auditing purposes. Depending on the complexity of the court order, QDRO's may take from 10-15 days
to process. (Including the account split and payout.)
Plan Loans: Poudre Fire can choose the loan process for the plan based on their desired level of
involvement. Poudre Fire can accept and approve loan requests, approve requests made over the VRU or
website, or have Vanguard execute loan requests made over the VRU or website. All loan requests
received by 4:OOpm EST are processed at the close of that business day. Vanguard will also notify
Poudre Fire of delinquent loans.
Hardship Withdrawals: Vanguard can administer hardship withdrawals for plans that follow the safe
harbor guidelines. Requests can be made through the VRU or website and requests received by 4:OOpm
EST are processed at the close of that business day.
Investment Services
Vanguard's total investment universe consists of roughly 90 Vanguard proprietary funds and over 100
outside funds. Importantly, Vanguard has expressed their willingness and ability to add funds outside
their network as requested by the plan sponsor. Vanguard proposed replacing 16 existing options with
Vanguard funds and a few outside mutual funds.
Vanguard's proposal includes the Vanguard Retirement Savings Trust (0.30% expense ratio) as the fixed
income option and the Vanguard LifeStrategy asset allocation funds (0.28% average expense ratio) and
the Vanguard 500 Index (0.18% expense ratio). Out of all the proposals, the Vanguard Retirement
Savings Trust has the lowest expense ratio. The proprietary Vanguard funds are institutionally priced,
giving Vanguard's proposal a distinct cost advantage over the competing vendors. For outside fund
additions, Vanguard requires 0.25% in revenue sharing (either through 12b-1 and STA fees or via an
explicit fee). The weighted average expense of the Vanguard investment menu is 0.53% which is
significantly lower than the existing arrangement (0.92%).
The strength of Vanguard's investment proposal is based on their ability to offer their low-cost
proprietary funds. While their current universe is somewhat limited, they have the ability add outside
funds and are willing to build a semi -customized investment portfolio. The suggested fund replacements
will likely cause significant disruption to the existing investment menu.
71
Cost Proposal
Vanguard is proposing that their services will be paid for entirely by the revenue sharing and management
fees they collect from the mutual funds. Since Vanguard provides its recordkeeping services at cost, they
will not provide an administrative allowance.
The Vanguard Stable Value offering has the lowest expense ratio (0.30%) out of all the proposals and the
Vanguard 500 Index is competitively priced with a 0.18% expense ratio.
Online investment advice is provided via Financial Engines which charges a $3,000 account set-up fee
and $10,000 for multiple accounts. A self directed account (VBO) is available with a $150 annual fee.
Vanguard charges $40 for loan origination, $25 for loan maintenance and $50 per QDRO processing
request. The proposal has waived all fees for hardship withdrawals, enrollments, rollovers and
distributions. Vanguard will charge a contract termination fee within two contract years if the plan leaves
due to an acquisition or merger.
Out of all the proposals, Vanguard offers the lowest overall weighted average fund expense. No explicit
recordkeeping fee was provided and Vanguard does not provide revenue sharing allowances.
72
P943 Pension Services Poudre Fire Authority
Documents included with this RFP:
I. Investment Policy 08/13/03
II. New Hire 1 st Amendment
III. New Hire 2nd Amendment
IV. New Hire 3rd Amendment
V. New Hire Reinstatement 09/2001
VI. Old Hire 1 st Amendment
VI 1. Old Hire 2nd Amendment
Vill. Old Hire 3rd Amendment
IX. Old Hire Reinstatement 09/2001
Investment Policy
08/13/03
INVESTMENT POLICY
POUDRE FIRE AUTHORITY NEW HIRE MONEY PURCHASE PENSION PLAN
Adopted on January 27, 1999
Amended August 13, 2003
TABLE OF CONTENTS
I. Statement of Purpose
II. Background
III. Responsibilities of Parties
IV. Investment Goal and Guidelines
V. Plan Administration Selection, Review, and Responsibilities
VI. Investment Options Selection and Review
Poudre Fire Authority Vendor Qualifications
Experience
• Vendor must have public plan experience. Vendors with Colorado public plan experience are
preferred.
Vendors must have experience with plans with similar asset and participant levels. The majority
of vendor plans must be in the $20 million to $200 million range.
Investments
• Open universe of fund offerings. At least 50% of the funds offered must be non-proprietary
funds.
• All investments will be offered on a share basis, not a unit basis and will be purchased at NAV.
• A stable value fund may be offered as part of the investment menu, however, no market value
adjustment on either participant or plan level withdrawals will be allowed.
Costs
• The Fire District realizes their plan is very attractive for vendors due to the high average account
balances in the plan. A preferred vendor will refund to the plan revenue sharing in excess of
their fee to pay for additional plan costs (legal, consulting, audit, etc.).
Education
• Investment advice must be offered. The preferred provider will have the ability to offer advice
from both in -person, salaried representatives and computer based systems.
• Vendors will be required to offer quarterly participant meetings on site at the various fire houses
in Fort Collins for two days each quarter in order to have access to all shifts. In addition, general
education meetings will be provided for new hires as requested, but shall not be more than 2 per
year. Also, retirement planning seminars by CFP or similarly accredited professionals will be
provided at least once per quarter. Participants should also have phone access to CFP's for
routine questions.
Contract Provisions
• Service standards with monetary damages paid back to the plan for non-compliance will be
included in the contract. Vendors must have the flexibility to include these negotiated service
standards in their contract, as well as other reasonable requests of the City of Fort Collins
Purchasing department.
The term of the contract will be no longer than 3 years and after the initial term, termination can
be made by either party, with or without cause with 60 days notice. No contract termination fees
will be allowed.
Any questions about these qualifications should be directed to Wendy Dominguez at Innovest
Portfolio Solutions. She can be reached at wendyd(a)innovestinc.com or 303-694-1900 extension
301.
If you believe your firm meets the vendor qualification requirements as stated above, please
complete and sign the bottom of this form and return it to Jim O'Neill in the Purchasing Department
at the City of Fort Collins. His fax number is 970-221-6707.
I certify that our firm meets the vendor requirements as stated above and we plan on submitting a
proposal, when an RFP is issued.
Vendor Name
Vendor Representative
Vendor Representative Signature
I. Statement of Purpose
The purpose of this policy is to clearly prescribe suitable and professional management
procedures for the Poudre Fire Authority's 401(a) retirement investment process. To foster
reasonable standards of due diligence and procedural prudence, this policy will outline the
responsibilities of all parties involved, the methods of meaningful communication among
the parties, clearly delineate the investment goal and guidelines, and set forth performance
standards for all investment options.
II. Background
The Plans are exempt alternative Plans and offer participant -directed investments
consistent with C.R.S. §§31-30.5-803 and 31-31-602. Participants in the Plans are
responsible for making their own investment decisions, and may select from an array of
investment alternatives. Neither the Trustees nor the employer(s) sponsoring the Plans are
liable for any loss or breach of duty resulting from a participant's direction of the
investments in his or her individual account.
The employer and employee each contribute 8% of the employees' salary to the employees'
retirement account. Participants may self -direct their investments as soon as they become
eligible to participate in the Plans, have a balance in their accounts, and complete and
return an investment election form. If no election form is returned, participants' accounts
will be invested in Guaranteed Interest until the election form is received. Participants may
select from a range of investments, change investments, and will receive financial and
activity statements as prescribed by state law.
The Boards of Trustees are composed of both employee and employer representatives. The
Trustees are elected or appointed as prescribed in the retirement Plan documents. Any
questions concerning this investment policy should be directed to a member of the Boards
of Trustees.
III. Responsibilities of the Parties
A. Responsibilities of the Boards of Trustees
The Trustees possess those powers and responsibilities set forth in Article
VIII of the Poudre Fire Authority New and Old Hire Plans and Article IX of
the District Old Hire Plan. The Trustees shall manage the Plan assets
pursuant to the terms and conditions of the Plans and solely in the interest of
the beneficiaries.
Investment Policy
2. The Trustees shall exercise reasonable care, skill, and caution in making
investment alternatives available to participants under the Plans.
3. The Trustees shall (i) select at least three investment alternatives, each of
which is diversified in itself, that allow the participant a broad range of
investments and a meaningful choice between risk and return in the
investment of the participant's accrued benefit; (ii) allow the participant to
change investments at least once each calendar quarter; and (iii) provide the
participant with information describing the investment alternatives and the
nature, investment performance, fees, and expenses of the investment
alternatives and other information to enable a participant to make informed
investment decisions.
4. The Trustees may delegate management and administrative functions and
fiduciary responsibilities that prudent trustees of comparable skills could
properly delegate under the circumstances.
5. The Trustees shall exercise reasonable care, skill, and caution in selecting
agents, establishing the scope and terms of the delegation consistent with the
purposes and terms of the Plans, and periodically reviewing the agents'
actions in order to monitor the agents' performance and compliance with the
terms of the delegation.
B. Responsibilities of Agents
I. In performing a delegated function, an agent owes a duty to the Plans to
utilize the same care, skill, prudence and due diligence under the
circumstances then prevailing that experienced investment professionals
acting in a like capacity and fully familiar with such matters would use in
like activities for like retirement plans with like aims, in accordance and
compliance with all applicable laws, rules and regulations from local, state,
federal and international political entities as they pertain to fiduciary duties
and responsibilities.
C. Responsibilities of Participants
Each participant shall provide timely input to the Trustees concerning his or
her level of satisfaction with the Plans, the Trustees' management of the
Plans, and any agent's performance.
2. Each participant shall take advantage of investment education opportunities
and written materials provided by the Trustees and agents to become fully
informed as to the nature of the Plan investment option alternatives, the
investment option performance, fees, and expenses of the investment option
Investment Policy 2
alternatives, and other information to enable a participant to make informed
investment decisions.
3. Each participant shall take responsibility for his or her investment decisions
and realize that each participant is responsible for his or her own retirement
planning.
IV. Investment Goal & Guidelines
The paramount goal of this policy is to enable employees to utilize sound investment
practices to develop an investment portfolio tailored to their own risk, return, and time -line
preferences. To meet this goal the following guidelines will be applied to the selection of
investment alternatives and to administration of the investment process:
A. Diversification within investment categories and with regard to the range of
investment options.
B. Timely investment performance information.
C. Meaningful range of risk and return options.
D. Readily available investment educational opportunities.
E. Full disclosure of investment costs.
F. Procurement of competent professionals to help administer the retirement
investment process including assisting the Boards on management matters and
providing educational opportunities to Plan participants.
V. Plan Administration Selection, Review, and Responsibilities
A. The Boards may select one or more agents as plan administrators to provide
services to the Boards. The plan administrator shall be a bank, insurance company,
investment management company, or an investment advisor as defined by the
Registered Investment Advisors Act of 1940. The Boards shall periodically review
the performance of the plan administrators to ensure that the plan administrators are
competently and professionally performing their duties as delegated to them by the
Boards. The frequency of such periodic review shall be as determined by the
Boards, but shall not be less frequent than biennially. Such review may include, but
is not limited to, the following criteria:
Investment Policy 3
Ability to and record of satisfactorily satisfying those responsibilities set
forth in subsection B of this Article V.
2. Level and quality of services provided to the Boards and participants.
3. Cost of services provided.
4. Nature, quality, and costs of investment options offered.
5. Quality and frequency of educational opportunities offered.
6. Quality of advice provided to the Boards.
7. Financial stability and integrity of the plan administrator and its personnel.
B. Unless otherwise specified by the Boards, the plan administrator shall be delegated
the following responsibilities:
1. Provide advice to the Boards concerning the selection and retention of
mutual funds and other investment options based upon the criteria set forth
in Article VI A of this policy.
2. Provide data, analysis, and recommendations to the Boards in order to allow
the Boards to conduct the annual review of investment options as described
in Article VI B of this policy.
3. Notify the Boards when any of the criteria set forth in Article VI C of this
policy indicate the need for a review of an investment option pursuant to
said provisions.
4. Promptly inform the Boards of all significant and/or material matters and
changes pertaining to any investment option offered by the Plans, including,
but not limited to any of the following:
a. Investment strategy;
b. Portfolio structure;
C. Tactical approaches;
d. Ownership;
e. Organizational structure;
f. Financial condition;
g. Professional staff,
h. Recommendations for guideline changes;
i. All legal matters and regulatory agency proceedings affecting the
investment option.
Investment Policy 4
5. Implement, maintain, and document a Plan participant communication
system which assures Plan members easy and efficient access to information
concerning: investment options and alternatives; risk and return associated
with the investment options; the nature, investment performance, fees, and
expenses of the investment option alternatives; and other information to
enable a participant to make informed investment decisions.
6. Implement, maintain, and document a Plan participant education program
which assures Plan members of easy and efficient access to understandable
retirement investment education concepts and information.
VI. Investment Options Selection and Review
A. General Criteria. In its selection and retention of mutual funds or other investment
options to be offered to Plan members, the Board may consider, but is not limited to, the
following:
performance of the investment option;
2. an examination of the return and risk history;
3. the reputation and the financial stability of the investment option and
investment option manager(s) in the industry;
4. the quality of the investment option management company;
5. size of the investment option;
6. name recognition by the public;
7. rating and rankings by independent investment option tracking and
monitoring services;
8. review of investment option operating expense information;
9. the prospectus of the investment option;
10. the compatibility with other investment options available in the Plan, and;
11. review of the investment style and composition of the investment option.
Investment Policy 5
B. Annual Review of Investment Options.
An annual review of investment options performance will be conducted in
April of each year, or as soon thereafter as deemed reasonable by the Board,
to test progress toward the attainment of longer term goals. Morningstar,
Inc. will be used for performance data for any openly traded investment
option. Proprietary investment options will be required to provide the
necessary data to the Board for review prior to the April performance
review. It is understood that there are likely to be short-term periods during
which performance deviates from market indexes. During such times,
greater emphasis shall be placed on peer -performance comparisons with
managers employing similar styles.
2. The annual review by the Board will, at a minimum, focus on:
a. Investment option manager adherence to the Policy guidelines;
b. material changes in the investment option manager's organization,
investment philosophy, and/or personnel;
C. Comparisons of the investment option manager's results to
appropriate indexes and peer groups, specifically:
Asset Category Index Peer Group Universe
Domestic Large
Capitalization Equities:
Value
Yield
Growth
Core
Domestic Small
Capitalization Equities
International Equities:
Core
Domestic Fixed Income:
Bond
Guaranteed Income Funds
S&P 500 Total Equity Database
S&P500
Value Equity Style
S&P500
Yield Equity Style
S&P500
Growth Equity Style
S&P500
Core Equity Style
Russell 2000
Small Capitalization Equity
MSCI EAFE
Lehman/Government/
Corporate Intermediate
5 Year Treasury
Investment Policy 6
International Equity
Core Fixed Municipal Bond
Fund Database
Intermediate Style
Any other types of funds or other investment options adopted by the
Boards of Trustees will use Peer Group Universe and Index used by
Morningstar, Inc. in their reporting of the specific investment option's
performance, to the extent reasonably possible.
3. The risk associated with each investment option's portfolio, as measured
by the variability of annual returns (standard deviation), should not
exceed that of the benchmark index and the peer group without a
corresponding increase in performance above the benchmark and peer
group.
4. Each investment option is expected to perform in the upper half of the
respective style universe. Investment options not meeting these
expectations will be reviewed again at the meeting of the Board of
Trustees 6 months from the initial review, or as soon thereafter as
deemed reasonable by the Board.
C. Other Review of Investment Options.
1. The Boards are aware that the ongoing review and analysis of investment
options is just as important as the due diligence implemented during the
initial selection process. The Boards may, in their discretion, take
corrective action by replacing an investment option if they deem it
appropriate at any time. Accordingly, a thorough review and analysis of
an investment option will be conducted i£
a. an investment option performs in the bottom quartile (75
percentile) of the peer group over an annual period;
b. an investment option manager falls in the southeast quadrant of
the risk/return scattergram for three year time periods as
compared to the appropriate index as listed in Section VI.B.2.c.
[amended 8/13/031;
C. an investment option has a five-year risk -adjusted return that falls
below that of the median within the appropriate peer group.
2. Performance that may require the replacement of an investment option
includes:
a. an investment option or investment option manager that performs
below the median (50th percentile) of the peer group over rolling
three year periods for more than three quarters;
b. an investment option or investment option manager that performs
below the median (50th percentile) of the peer group over a five
year period;
Investment Policy 7
C. an investment option or investment option manager with a
negative alpha for three and/or five year periods.
3. Major organizational changes or events that may warrant review of an
investment option, include:
a. change in professionals;
b. significant account losses in relation to the peer group or general
market conditions;
C. significant growth of new business;
d. change in ownership;
e. the investment option manager or other associated professionals
being named in significant legal action related to the operation of
the investment option.
Investment Policy 8
New Hire 1 St Amendment
Resolution 02-
Adopting the First Amendment to the
Poudre Fire Authority New Hire Money Purchase Pension Plan
And Trust Agreement as Amended and Restated, Effective December 24, 2001
WHEREAS, the Poudre Fire Authority (the "Employer"), established the Poudre Fire
Authority New Hire -City Money Purchase Pension Plan and Trust Agreement (the "Plan"),
effective January 1, 1988; and
WHEREAS, the Employer adopted the amended and restated Plan, effective
December 24, 2001; and
WHEREAS, pursuant to § 11.1 of the Plan, the Employer has the authority to amend
the Plan without a vote of the actively -employed eligible employees providing the
amendments are minor, technical amendments required from time to time by changes in state
or federal laws or regulations; and
WHEREAS, the Employer deems it advisable to amend the Plan to comply with the
Economic Growth and Tax Relief Reconciliation Act of 2001 (EGTRRA) and with technical
tax requirements requested by the Internal Revenue Service in conjunction with the request
for a determination letter; and
WHEREAS, the Board of Trustees of the Poudre Fire Authority New Hire Money
Purchase Pension Plan and Trust Agreement have recommended the adoption of the Plan
amendments set forth herein.
NOW, THEREFORE, be it resolved by the Board of Directors of the Poudre Fire
Authority that the Plan is hereby amended, effective January 1, 2002 as follows:
1. ARTICLE 11. DEFINITIONS AND CONSTRUCTION, § 2.1 Definitions (e)
Compensation shall be revised to read as follows:
(e) Compensation: A Participant's base salary received from the
Employer for personal services during the Year, but excluding holiday pay,
acting officer pay, longevity pay, bonus payments, payments for unused
vacation, overtime, uniform cleaning and travel allowances, and excluding any
benefits paid under this Plan or any other retirement or life insurance program
or under any other health or welfare plan. For purposes of allocating the
Employer's contribution for the Year in which a Participant begins or resumes
Participation, Compensation shall be determined as of the first day of the year
in which the Employee became a Participant and Compensation before his
Participation began or resumed shall be disregarded. Contributions shall be
made on a Participant's base salary as defined herein, before taking into
account amounts contributed by the Employer pursuant to a salary reduction
agreement which were excludable from the Employee's gross income under
Code Section 125, Code Section 132(f)(4), Code Section 402(a)(8), Code
Section 403(b) or Code Section 402(h) or 457. Effective January 1, 2002,
Compensation in excess of $ 200,000, as adjusted for cost -of -living increases
in accordance with section 401(a)(17)(B) of the Code, shall not be taken into
account under the Plan.
2. ARTICLE lI. DEFINITIONS AND CONSTRUCTION, § 2.1 Definitions new
section (r) Leased Employee shall be added, with the subsequent sections to be re -lettered, to
read as follows:
P943 Pension Services Poudre Fire Authority
Poudre Fire Authority Money Purchase Pension Plan
(Old Hire & New Hire)
Statement of Work
Background Information
The City of Fort Collins is seeking proposals on behalf of the Poudre Fire Authority from retirement plan vendors
that meet the attached Vendor Qualifications. Poudre Fire Authority has $31.6 million in assets, 3.4% is held by
inactive or retired participants. They have 141 participating employees (18 under the Old Hire Plan and 123 under
the New Hire Plan). Gross contributions for the year are approximately $1.6 million (26 pay periods). The formula
for determining the mandatory contribution amount is 8% employer contribution and 8% employee contribution. The
plan allows for voluntary employee contributions up to 7% per year. Forfeitures are allocated and credited as an
additional employer contribution in the plan year in which they occurr. The plan allows three loans per participant,
and currently has 46 outstanding. The amount of outstanding loans is $737,000.
Statement of Plan Services
The selected plan vendor must meet the following service requirements.
General Services
1. Significant experience with public plans.
2. Demonstrated ability to complete an organized, effective plan conversion minimizing the blackout
period.
Participant Customer Services
1. The selected vendor must be able to provide a toll -free voice response system as well as an
interactive, fully transactional web site for participant account access, both with the following
capabilities:
■ Enrollment
■ Changes to asset allocation
■ Loan modeling and initiation
• Participant statement requests — available to view online
■ Prospectus orders — available to view online
■ Plan information — available to view online
■ Investment option performance history — available to view online
■ On line investment advice
■ In person investment advice
2. An adequate number of participant service representatives must be available to provide service
over the telephone during reasonable hours.
3. Ability to offer fee concessions (service guarantees) for failure to meet service standards for
routine plan sponsor and participant services.
Recordkeeping and Administrative Services
1. Daily valuation is required.
2. Reconcile payroll contributions before money is wired.
3. Investment of payroll contributions must be credited to participant accounts on the day of receipt
of the funds.
SA 10/01
4
(r) Leased Employee: Any person who is not an employee of the
recipient and pursuant to an agreement between the Employer and any other
person, has performed services for the Employer on a substantially full time
basis for a period of at least one year, and such services are performed under
the primary direction and control of the Employer. Contributions or benefits
provided a leased employee by the leasing organization which are attributable
to services performed for the Employer shall be treated as provided by the
Employer. A Leased Employee or Employee shall not be considered an
employee of the Employer if: (i) such Employee is covered by a money
purchase pension plan providing (1) a non-integrated Employer contribution
rate of at least 10% of Compensation, as defined in Code Section 415(c)(3),
but including amounts contributed by the Employer pursuant to a salary
reduction agreement which were excludable from the Employee's gross income
under Code Section 125, Code Section 132(f)(4), Code Section 402(a)(8),
Code Section 403(b) or Code Section 402(h), (2) immediate participation, and
(3) full and immediate vesting; and (ii) leased employees do not constitute
more than 20% of the Employer's non -highly compensated work force.
3. ARTICLE IV. CONTRIBUTIONS AND FORFEITURES, § 4.2 Contributions by
Participants, (b) Voluntary Contributions is hereby amended by the replacement of the first
sentence to read as follows:
(b) Voluntary Contributions: In order to encourage savings and
investments by Participants, effective January 1, 2002, each Participant
voluntarily may contribute to the Trust an amount not to exceed seventy-two
percent (72%) of Compensation in addition to contributions under
subparagraph (a) of this subsection, and subject to the § 5.3 maximum
additions limit.
4. ARTICLE V. ALLOCATIONS TO PARTICIPANTS' ACCOUNTS, § 5.3
Maximum Additions, shall be revised to read as follows:
5.3 Maximum Additions: Notwithstanding anything contained
herein to the contrary, the total Additions made to the Employer and Employee
Contribution Accounts of a Participant for any Year shall not exceed the
"Maximum Permissible Amount," reduced by the sum of any Additions
allocated to the Participant's accounts for the same Year under any other
defined contribution plan or welfare benefit fund (as defined in Code
Section 419(e)) maintained by the employer. The Maximum Permissible
Amount shall be equal to the lesser of $ 40,000 or 100% of the Participant's
Compensation for such Year, or such amount as provided in §415 of the Code.
(a) The term "Additions" means the total of the Employer
contributions and forfeiture amounts allocated to a Participant's Employer
Contribution Account, plus the amount of any Employee Contributions to the
Plan. Amounts allocated to an individual medical account (as defined in Code
Section 415(1)(2)) included as part of a defined benefit plan maintained by the
Employer are Additions. Furthermore, Additions include contributions paid or
accrued attributable to post -retirement medical benefits allocated to the separate
account of a key employee (as defined in Code Section 419A(d)(3)) under a
welfare benefit fund (as defined in Code Section 419(e)) maintained by the
Employer.
(b) "Addition" does not include "rollovers" from an eligible
retirement plan as defined for the purpose of the direct rollover provisions of
§6.6.
(c) As of January 1 of each calendar year, and applicable for
that Plan Year, the dollar limit may be adjusted for increases in the cost of
living in accordance with regulations prescribed by the Secretary of the
Treasury or his delegate. If such additions exceed the limitation, the
contributions made by the Participant for the Year, which cause the excess,
shall be returned to the Participant. If, after returning the Participant's
contribution an excess still exists, such excess which is attributable to
Forfeitures shall be held in a suspense account. Such account may be
maintained if (1) no Employer contributions are made when their allocation
could be precluded by Code Section 415, (2) no income is allocated to the
account, and (3) amounts in the account are allocated as of each allocation date
on which Forfeitures may be allocated until the account is exhausted. Upon
termination of the Plan, the balance of such account may revert to the
Employer.
(d) For purposes of this section, the limitation year shall
mean the Plan Year. The term "Compensation" means, for purposes of
Sections 5.3 and 5.4 only, a Participant's earned income, wages, salaries, fees
for professional services and other amounts received for personal services
actually rendered in the course of employment with the employer maintaining
the Plan, including cash awards and Elective Contributions, provided,
however, that for Plan Years beginning before January 1, 1998, such amounts
shall not be included in Compensation for the purpose of applying the
limitations on allocations and benefits under Code Section 415. "Elective
Contributions" are amounts excludible from an Employee's gross income under
Code Sections 125, 132(f)(4), 402(e)(3), 403(b), 402(h)(1)(13), or 457, or any
other Elective Deferrals as defined in Code Section 402(g)(3).
5. ARTICLE VI. BENEFITS, § 6.6 Direct Transfers and Rollovers, paragraphs two
and three shall be amended to read as follows:
An eligible rollover distribution is any distribution of all or any portion
of the balance to the credit of the Participant, except that an eligible rollover
distribution does not include: (i) any distribution that is one of a series of
substantially equal periodic payments (not less frequently than annually) made
for the life (or life expectancy) of the distributee or the joint lives (or joint life
expectancies) of the distributee and the distributee's designated Beneficiary, or
for a specified period of ten years or more; (ii) any distribution to the extent
such distribution is required under Code Section 401(a)(9); and (iii) the portion
of any distribution that is not includible in gross income (determined without
regard to the exclusion for net unrealized appreciation with respect to employer
securities). For purposes of the direct rollover provisions in this § 6.6, a
portion of a distribution shall not fail to be an Eligible Rollover Distribution
merely because the portion consists of after-tax employee contributions which
are not includible in gross income. However, such portion may be transferred
only to an individual retirement account or annuity described in Code § 408(a)
or (b), or to a qualified defined contribution plan described in Code § 401(a) or
403(a) that agrees to separately account for amounts so transferred, including
separately accounting for the portion of such distribution which is includible in
gross income and the portion of such distribution which is not so includible.
this
An eligible retirement plan is an individual retirement account described
in Code Section 408(a), an individual retirement annuity described in Code
Section 408(b), an annuity plan described in Code Section 403(a), or a
qualified trust described in Code Section 401(a) that accepts the distributee's
eligible rollover distribution. For purposes of the direct rollover provisions in
this § 6.6, an Eligible Retirement Plan shall also mean an annuity contract
described in Code § 403(b) and an eligible plan under Code § 457(b) which is
maintained by a state, political subdivision of a state, or any agency or
instrumentality of a state or political subdivision of a state and which agrees to
separately account for amounts transferred into such plan from this Plan. The
definition of Eligible Retirement Plan shall also apply in the case of a
distribution to a surviving spouse, or to a spouse or former spouse who is the
alternate payee under a domestic relations order, as defined in Code § 414(p).
IN WITNESS WHEREOF, this Resolution was adopted by the Poudre Fire Authority
day of 2002.
POUDRE FIRE AUTHORITY
By:
Its:
ATTEST:
LE
New Hire 2nd Amendment
Resolution 03-5
Adopting the Second Amendment to the
Poudre Fire Authority New Hire Money Purchase Pension Plan
And Trust Agreement as Amended and Restated, Effective December 24, 2001
WHEREAS, the Poudre Fire Authority (the "Employer"), established the Poudre Fire
Authority New Hire -City Money Purchase Pension Plan and Trust Agreement (the "Plan"),
effective January 1, 1988; and
WHEREAS, the Employer adopted the amended and restated Plan (the "2001 Restated
Plan"), effective December 24, 2001; and
WHEREAS, the Employer adopted via Resolution 02-14 the first amendment to the
2001 Restated Plan effective January 1, 2002; and
WHEREAS, the Board of Trustees of the Poudre Fire Authority New Hire Money
Purchase Pension Plan and Trust Agreement have recommended the adoption of the 2001
Restated Plan amendments set forth herein; and
WHEREAS, pursuant to § 11.1 of the 2001 Restated Plan, the Employer has the
authority to amend the Plan with the approval of at least sixty-five percent of the total votes
cast by actively -employed eligible Employees and all former employees who are entitled to a
benefit from the 2001 Restated Plan; and
WHEREAS, after a duly conducted election, the 2001 Restated Plan amendments set
forth herein were approved by at least sixty-five percent of the total votes cast by actively -
employed eligible Employees and all former employees who are entitled to a benefit from the
2001 Restated Plan.
NOW, THEREFORE, be it resolved by the Board of Directors of the Poudre Fire
Authority that the 2001 Restated Plan is hereby amended, effective April 22, 2003 as follows:
1. ARTICLE VII. THE TRUST AND TRUST FUND, § 7.13 Loans to Participants
shall be revised to read as follows:
7.13 Loans to Participants:
(a) General Rules: The Trustees, in accordance with a
uniform and nondiscriminatory policy, may make a loan to any Participant (for
purposes of this Section 7.13, the term "Participant" shall include "Former
Participant") who makes a written request for such a loan. The Trustees will
promulgate rules and procedures regarding Participant loans. No loan to a
Participant may exceed the Participant's vested Accrued Benefit. In addition, a
loan, when added to the outstanding balance of all other loans to the Participant
from this and any other qualified Plan maintained by the Employer, may not
exceed the lesser of: (1) $50,000 less the excess of the highest outstanding
balance of loans from the Plan during the one-year period ending on the day
before such loan is made over the outstanding balance of loans from the Plan on
the day such loan is made; or (2) the greater of one-half of the value of the
Participant's vested Accrued Benefit as of the last preceding valuation date or
$10,000.
(b) Security and Interest: All loans will be adequately secured
and will bear a rate of interest considered reasonable on the date the loan was
made. Participant loans will be considered a Participant -directed investment
under Section 7.2 of the Participant requesting the loan and interest paid on the
loan will be allocated to the account of the Participant -borrower.
(c) Term of Loan: Any loan must be repaid in level payments
of principal and interest at least quarterly within five years of the date on which
it was made. However, any loan verified by the Trustees as used to acquire any
dwelling unit used or to be used within a reasonable time as the principal
residence of the Participant must be repaid within the time prescribed by the
Trustees. If a Participant does not repay a loan within the time prescribed, in
addition to enforcing payment through any legal remedy, the Trustees may
deduct the total amount of the loan and any unpaid interest due on it from the
Participant's Account when the Account becomes distributable under the Plan.
IN WITNESS WHEREOF, this Resolution was adopted by the Poudre Fire Authority
this 22nd day of April, 2003.
POUDRE FIRE AUTHORITY
By:
Its:
By:
Its:
R
New Hire 3nd Amendment
Resolution 04-2
Adopting the Third Amendment to the Poudre Fire Authority
New Hire Money Purchase Pension Plan and Trust Agreement
as Amended and Restated Effective December 24, 2001
WHEREAS, the Poudre Fire Authority (the 'Employer"), established the Poudre Fire
Authority New Hire Money Purchase Plan and Trust Agreement (the "Plan"), effective January
1, 1988; and
WHEREAS, the Employer adopted the amended and restated Plan, effective December
24, 2001 (the "2001 Restated Plan"); and
WHEREAS, the Employer adopted via Resolution 02-14 the First Amendment to the
2001 Restated Plan effective January 1, 2002; and
WHEREAS, the Employer adopted via Resolution 03-5 the Second Amendment to the
2001 Restated Plan effective April 22, 2003; and
WHEREAS, the Board of Trustees of the Poudre Fire Authority New Hire Money
Purchase Pension Plan and Trust Agreement have recommended the adoption of the
amendments set forth herein; and
WHEREAS, pursuant to §11.1 of the 2001 Restated Plan, the Employer has the
authority to amend the Plan without the approval of Participants of said Plan solely for the
purpose of incorporating minor, technical amendments which are required from time to time by
changes in state or federal laws or regulations; and
WHEREAS, the Employer deems it advisable to amend the Plan and desires to further
amend the Plan to incorporate the minimum required distribution provisions of Code §401(a)(9)
and the Final Regulations thereunder, as required pursuant to IRS Revenue Procedure 2002-29.
NOW, THEREFORE, be it resolved by the Board of Directors of the Poudre Fire
Authority that the 2001 Restated Plan is hereby amended, effective January 1, 2003, as follows:
1. ARTICLE VIL, DISTRIBUTION FROM TRUST FUND, §6.3, Post -Death
Distribution, shall be deleted in its entirety and replaced by a new §6.3, Required Minimum
Distribution Rules, to read as follows:
6.3 Required Minimum Distribution Rules
a. General Rules.
(1) Effective Date. The provisions of this Section 6.3 will
apply for purposes of determining required minimum distributions for
calendar years beginning with the 2003 calendar year.
(2) Precedence. The requirement of this Section 6.3 will take
precedence over any inconsistent provisions of the plan.
(3) Requirements of Treasury Regulations Incorporated. All
distributions required under this Section 6.3 will be determined and made
in accordance with the Treasury Regulations under Code §401(a)(9).
(4) TEFRA §242(b)(2) Elections. Notwithstanding the other
provisions of this Section 6.3, distributions may be made under a
designation made before January 1, 1984, in accordance with §242(b)(2)
of the Tax Equity and Fiscal Responsibility Act (TEFRA) and the
provisions of the plan that relate to §242(b)(2) of TEFRA.
b. Death of Participant Before Distribution Begin. If the Participant
dies before distributions begin, the Participant's entire interest will be
distributed, or begin to be distributed, no later than as follows:
(1) If the Participant's surviving spouse is the Participant's sole
designated beneficiary, then distributions to the surviving spouse will
begin by December 31 of the calendar year immediately following the
calendar year in which the Participant died, or by December 31 of the
calendar year in which the Participant would have attained age 70 1/2, if
later.
(2) If the Participant's surviving spouse is not the Participant's
sole designated beneficiary, then distributions to the designated
beneficiary will begin by December 31 of the calendar year immediately
following the calendar year in which the Participant died.
(3) If there is no designated beneficiary as of September 30 of
the year following the year of the Participant's death, the Participant's
entire interest will be distributed by December 31 of the calendar year
containing the fifth anniversary of the Participant's death.
(4) If the Participant's surviving spouse is the Participant's sole
designated beneficiary and the surviving spouse dies after the Participant
but before distributions to the surviving spouse begin, this Section 6.3(b),
other than Section 6.3(b)(1), will apply as if the surviving spouse were the
Participant.
(5) For purposes of this Section 6.3(b) and Section 6.3(d),
unless Section 6.3(b)(4) applies, distributions are considered to begin on
the Participant's required beginning date. If Section 6.3(b)(4) applies,
distributions are considered to begin on the date distributions are required
to begin to the surviving spouse under Section 6.3(b)(1). If distributions
under an annuity purchased from an insurance company irrevocably
commence to the Participant before the Participant's required beginning
date (or to the Participant's surviving spouse before the date distributions
are required to begin to the surviving spouse under Section 6.3(b)(1)), the
date distributions are considered to begin is the date distributions actually
commence.
C. Required Minimum Distributions During Participant's Lifetime.
(1) Amount of Required Minimum Distribution for Each
Distribution Calendar Year. During the Participant's lifetime, the
minimum amount that will be distributed for each distribution calendar
year is the lesser of:
(i) the quotient obtained by dividing the Participant's
account balance by the distribution period in the Uniform Lifetime Table
set forth in §1.401(a)(9)-9 of the Treasury Regulations, using the
Participant's age as of the Participant's birthday in the distribution calendar
year; or
(ii) if the Participant's sole designated beneficiary for
the distribution calendar year is the Participant's spouse, the quotient
obtained by dividing the Participant's account balance by the number in
the Joint and Last Survivor Table set forth in §1.401(a)(9)-9 of the
Treasury Regulations, using the Participant's and spouse's attained ages as
of the Participant's and spouse's birthdays in the distribution calendar year.
Required minimum distributions will be determined under
this Section 6.3(c) beginning with the first distribution calendar year and
up to and including the distribution calendar year that includes the
Participant's date of death.
d. Required Minimum Distributions After Participant's Death.
(1) Death On or After Date Distributions Begin.
(i) Participant Survived by Designated Beneficiary. If
the Participant dies on or after the date distributions begin and there is a
designated beneficiary, the minimum amount that will be distributed for
each distribution calendar year after the year of the Participant's death is
the quotient obtained by dividing the Participant's account balance by the
longer of the remaining life expectancy of the Participant or the remaining
4. The plan vendor will be required to mail quarterly participant statements of account directly to
participants at their home address.
5. The plan vendor will be required to provide quarterly administrative reports to the plan sponsor.
6. Comprehensive trust reports and schedules to facilitate the annual reporting and auditing process
is a requirement.
7. The plan vendor must handle benefit distribution processing including required notices, checks,
tax withholding, and tax reporting on Form 1099-R.
8. Complete outsourcing of QDRO validation and processing.
9. Complete outsourcing of loan processing.
Investments
1. A wide universe of investment securities with the flexibility to change securities daily is required.
Share accounting, not unit accounting is required.
2. Poudre Fire currently offers the following investment options and would like to maintain as many
as possible:
New Hire Balance
Old Hire Balance
Jennison Growth Z
$3,760,566
$1,164,295
Van Kampen Comstock A
$911,267
$435,348
Dryden Stock Index Z
$839,665
$923,842
Core Equity Account
$695,684
$160,728
American Funds Grwth Fnd Amer A
$641,317
$122,911
Janus Fund
$425,868
$177,777
PRIDEX Account
$182,839
$75,864
MFS Massachusetts Investors A
$99,438
$15,374
Franklin Equity Income A
$33,686
$0
Davis NY Venture A
$5,881
$0
Guaranteed Interest Account
$4,167,720
$2,845,706
Money Market Account
$249,560
$41,393
MIDCAP Account
$1,600,778
$632,779
Nuberger Berman Genesis Tr
$1,007,933
$404,477
Franklin Small -Mid Cap Growth A
$569,251
$236,682
Jennison US Emerging Growth Z
$251,116
$16,167
Dryden Active Allocation Z
$1,693,652
$743,703
American Balanced A
$958,473
$284,544
PIMCO Total Return A
$893,335
$1,367,948
Credit Suisse Global Fixed Income Corn
$319,301
$42,826
Dryden Government Income Z
$183,627
$40,153
Jennison Global Growth Z
$0
$0
Strategic Partners Intl Value Z
$859,698
$623,564
Templeton Foreign A
$232,900
$159,564
Seligman Communication & Info A
$138,599
$6,981
MFS Utilities A
$124,284
$9,845
SA 10/01
5
life expectancy of the Participant's designated beneficiary, determined as
follows:
(A) The Participant's remaining life expectancy
is calculated using the age of the Participant in the year of death, reduced
by one for each subsequent year.
(B) If the Participant's surviving spouse is the
Participant's sole designated beneficiary, the remaining life expectancy of
the surviving spouse is calculated for each distribution calendar year after
the year of the Participant's death using the surviving spouse's age as of
the spouse's birthday in that year. For distribution calendar years after the
year of the surviving spouse's death, the remaining life expectancy of the
surviving spouse is calculated using the age of the surviving spouse as of
the spouse's birthday in the calendar year of the spouse's death, reduced by
one for each subsequent calendar year.
(C) If the Participant's surviving spouse is not
the Participant's sole designated beneficiary, the designated beneficiary's
remaining life expectancy is calculated using the age of the beneficiary in
the year following the year of the Participant's death, reduced by one for
each subsequent year.
(ii) No Designated Beneficiary. If the Participant dies
on or after the date distributions begin and there is no designated
beneficiary as of September 30 of the year after the year of the
Participant's death, the minimum amount that will be distributed for each
distribution calendar year after the year of the Participant's death is the
quotient obtained by dividing the Participant's account balance by the
Participant's remaining life expectancy calculated using the age of the
Participant in the year of death, reduced by one for each subsequent year.
(2) Death Before Date Distribution Begin.
(I) Participant Survived by Designated Beneficiary. If
the Participant dies before the date distributions begin and there is a
designated beneficiary, the minimum amount that will be distributed for
each distribution calendar year after the year of the Participant's death is
the quotient obtained by dividing the Participant's account balance by the
remaining life expectancy of the Participant's designated beneficiary,
determined as provided in Section 6.3(d)(1).
(ii) No Designated Beneficiary. If the Participant dies
before the date distributions begin and there is no designated beneficiary
as of September 30 of the year following the year of the Participant's
death, distribution of the Participant's entire interest will be completed by
December 31 of the calendar year containing the fifth anniversary of the
Participant's death.
(iii) Death of Surviving Spouse Before Distributions to
Surviving Spouse Are Required to Begin. If the Participant dies before
the date distributions begin, the Participant's surviving spouse is the
Participant's sole designated beneficiary, and the surviving spouse dies
before distributions are required to begin to the surviving spouse under
Section 6.3(b)(1), this Section 6.3(d)(2) will apply as if the surviving
spouse were the Participant.
e. Definitions. The following definitions apply to this Section 6.3.
(1) Designated Beneficiary. The individual who is designated
as the Beneficiary by the Participant, or by the Plan, who is a "designated
beneficiary" under Code §401(a)(9) and §1.401(a)(9)-1, Q&A-4, of the
Treasury Regulations.
(2) Distribution Calendar Year. A calendar year for which a
minimum distribution if required. For distributions beginning before the
Participant's death, the first distribution calendar year is the calendar year
immediately preceding the calendar year which contains the Participant's
required beginning date. For distributions beginning after the Participant's
death, the first distribution calendar year is the calendar year in which
distributions are required to begin under Section 6.3(b). The required
minimum distribution for the Participant's first distribution calendar year
will be made on or before the Participant's required beginning date. The
required minimum distribution for other distribution calendar years,
including the required minimum distribution for the distribution calendar
year in which the Participant's required beginning date occurs, will be
made on or before December 31 of that distribution calendar year.
(3) Life Expectancy. Life expectancy as computed by use of
the Single Life Table in §1.401(a)(9)-9 of the Treasury Regulations.
(4) Participant's Account Balance. The balance of the
Participant's Account as of the last valuation date in the calendar year
immediately preceding the distribution calendar year (valuation calendar
year) increased by the amount of any contributions made and allocated or
forfeitures allocated to the Account as of dates in the valuation calendar
year after the valuation date and decreased by distributions made in the
valuation calendar year after the valuation date. The account balance for
the valuation calendar year includes any amounts rolled over or
transferred to the Plan either in the valuation calendar year or in the
distribution calendar year if distributed or transferred in the valuation
calendar year.
(5) Required Beginning Date. The latest date for
commencement of distributions for a Participant, as determined under
Section 6.4 of the Plan
IN WITNESS WHEREOF, this Resolution was adopted by the Poudre Fire Authority
this 241h day of February, 2004.
POUDRE FIRE AUTHORITY
By:
ATTEST:
By:
Recording Secretary
PFA Board Chair
V.
New Hire Restatement
09/2001
SAW\57133\386363.02
RESTATED
POUDRE FIRE AUTHORITY
NEW HIRE MONEY PURCHASE PENSION PLAN
AND
TRUST AGREEMENT
December 24, 2001
SAW\57133\386363.02
TABLE OF CONTENTS
Page
ARTICLEI. PURPOSE......................................................................................................
1
ARTICLE II. DEFINITIONS AND CONSTRUCTION.................................................................
2
2.1
Definitions...............................................................................................................
2
(a)
Accrued Benefit......................................................................................................
3
(b)
Aggregate Account..................................................................................................
3
(c)
Authorized Leave of Absence.....................................................................................
3
(c)
Beneficiary ............................................................................................................3
(d)
Compensation........................................................................................................
3
(e)
Disability..............................................................................................................4
(f)
Effective Date........................................................................................................
4
(g)
Employee.............................................................................................................
4
(h)
Employee Contribution Account..................................................................................
5
(i)
Employee Rollover Account.......................................................................................
5
(i)
Employee Voluntary Contribution Account.....................................................................
5
0)
Employer..............................................................................................................5
(k)
Employer Contribution Account..................................................................................
5
(1)
Fiduciaries............................................................................................................
5
(m)
Former Participant...................................................................................................
5
(o)
Income.................................................................................................................6
(P)
Internal Revenue Code..............................................................................................
6
(9)
Normal Retirement Age............................................................................................
6
(r)
Participant.............................................................................................................6
(s)
Participation..........................................................................................................
6
(t)
Plan ....................................................................................................................
6
(u)
Service.................................................................................................................6
(v)
Trust (or Trust Fund)...............................................................................................
6
(w)
Valuation Date.......................................................................................................
6
(x)
Year (Plan Year).....................................................................................................
7
2.2
Construction.............................................................................................................
7
ARTICLE
III. PARTICIPATION AND SERVICE........................................................................
7
3.1
Participation.............................................................................................................
7
3.2
Participation Upon Re-Employment.................................................................................
7
3.3
Mandatory Participation in Plan ......................................................................................
7
ARTICLE
IV. CONTRIBUTIONS AND FORFEITURES...............................................................
8
4.1
Employer Contributions...............................................................................................
8
4.2
Contributions by Participants.........................................................................................
8
4.3
Disposition of Forfeitures.............................................................................................
9
4.4
Rollover Contributions.................................................................................................
9
ARTICLE
V. ALLOCATIONS TO PARTICIPANTS' ACCOUNTS................................................10
5.1
Individual Accounts...................................................................................................10
5.2
Account Adjustments..................................................................................................10
5.3
Maximum Additions...................................................................................................11
5.4
Multiple Plan Reduction..............................................................................................13
5.5
Qualified Military Service............................................................................................
14
5.6
Return of Contributions...............................................................................................
14
ARTICLEVI. BENEFITS.....................................................................................................14
6.1
Benefits..................................................................................................................14
6.2
Payment of Benefits...................................................................................................15
6.3
Post -Death Distribution...............................................................................................18
6.4
Designation of Beneficiary...........................................................................................
18
6.5
Distributions Under Domestic Relations Order...................................................................
19
6.6
Direct Transfers and Rollovers......................................................................................
19
ARTICLE
VIL THE TRUST AND TRUST FUND....................................................................20
7.1
Contributions to Trust.................................................................................................20
7.2
Participant Direction of Investment.................................................................................
21
SAW\57133\386363.02
7.3
Trustees' Powers and Duties.........................................................................................22
7.4
Further Powers of the Trustees......................................................................................24
7.5
Investment Manager...................................................................................................25
7.6
Claims Procedure......................................................................................................
26
7.7
Records and Reports..................................................................................................26
7.8
Other Administrative Powers and Duties..........................................................................27
7.9
Rules and Decisions...................................................................................................
27
7.10
Benefit Payments......................................................................................................28
7.11
Application and Forms for Benefits.................................................................................28
7.12
Indemnification.........................................................................................................
28
7.13
Loans to Participants..................................................................................................
28
7.14
Payment of Expenses and Fees......................................................................................
29
7.15
Protection of the Trustees............................................................................................30
7.16
Accounts of the Trustees.............................................................................................30
ARTICLEVIII.
TRUSTEES.................................................................................................31
8.1
Trustees.................................................................................................................31
8.2
Use of Corporate Trustee.............................................................................................32
8.3
Officers..................................................................................................................33
8.4
Officer Responsibilities...............................................................................................
33
8.5
Annual Meeting........................................................................................................
33
8.6
Quorum..................................................................................................................34
8.7
Majority Vote..........................................................................................................34
ARTICLEIX.
FIDUCIARIES................................................................................................34
9.1
Fiduciaries..............................................................................................................
34
9.2
General Fiduciary Duties.............................................................................................35
9.3
Bonding and Insurance................................................................................................35
9.4
Delegation of Authority...............................................................................................36
ARTICLEX.
MISCELLANEOUS..........................................................................................36
10.1
Nonguarantee of Employment.......................................................................................
36
10.2
Rights to Trust Assets.................................................................................................36
10.3
Nonalienation of Benefits.............................................................................................36
10.4
Payments to Minors or Persons of Unsound Mind...............................................................37
10.5
Disposition of Unclaimed Payments................................................................................
37
10.6
Severability of Provisions............................................................................................
38
10.7
Trust and Plan to be Tax Exempt...................................................................................
38
ARTICLE
XI. AMENDMENT OR TERMINATION OF THE PLAN................................................38
11.1
Right and Restrictions.................................................................................................38
11.2
Merger or Consolidation of the Plan...............................................................................39
ARTICLE XII. GOVERNING LAW......................................................................................39
SAW\57133\386363.02 ii
POUDRE FIRE AUTHORITY
NEW HIRE MONEY PURCHASE PENSION PLAN
AND
TRUST AGREEMENT
WHEREAS, Poudre Fire Authority continues, within this Trust Agreement, a Plan for
the administration and distribution of contributions made by the Employer and its eligible
Employees for the purpose of providing retirement benefits for its eligible Employees. The
provisions of this Plan shall apply solely to an Employee whose employment with the Employer
terminates on or after the restated Effective Date of the Plan. If an Employee's employment
with the Employer terminates prior to the restated Effective Date, that Employee shall be
entitled to benefits under the Plan in which such Employee participated, as such Plan existed on
the date of the Employee's termination of employment.
Now, therefore, the Poudre Fire Authority amends and restates the New Hire Money
Purchase Pension Plan and Trust Agreement to be effective December 24, 2001, the terms of
which shall supersede the provisions of any plan in effect prior to December 24, 2001.
ARTICLE II. PURPOSE
Effective as of December 24, 2001, Poudre Fire Authority, known as the Employer, and
, and as the Trustees, hereby adopt and establish the
Amended and Restated Poudre Fire Authority New Hire Money Purchase Pension Plan and
Trust Agreement.
The purpose of the Plan is to reward Employees of the Employer for their loyal and
faithful service, to help the Employees accumulate funds for their later years and to provide
funds for their beneficiaries in the event of death or disability. The benefits provided by this
Plan will be paid from a Trust Fund established by the Employer and will be in addition to the
benefits Employees are entitled to receive under any other programs of the Employer.
The provisions of this Plan and Trust shall apply only to an Employee who terminates
employment on or after the Effective Date of this Plan December 24, 2001). The rights and
benefits, if any, of a former employee whose employment terminated prior to December 24,
2001 shall be determined in accordance with the provisions of the Plan and Trust in effect on
the date his employment terminated.
The Plan is being established pursuant to C.R.S. § 31-30.5-802 and 31-31-601 and is a
governmental retirement plan exempt from the provisions of the Employee Retirement Income
Security Act. The Plan and Trust are intended to meet the requirements of Sections 401(a) and
501(a) of the Internal Revenue Code of 1986 to the extent applicable to governmental plans.
ARTICLE III. DEFINITIONS AND CONSTRUCTION
3.1 Definitions: The following words and phrases, when used herein, unless their
context clearly indicates otherwise, shall have the following respective meanings:
(a) Accrued Benefit: Means the amount standing in a Participant's
account(s) as of any date derived from Employer contributions, Mandatory Participant
Contributions and Rollover Contributions.
(b) Aggregate Account: The value of all accounts maintained on behalf of a
Participant, whether attributable to Employer or Employee contributions or rollover accounts.
(c) Authorized Leave of Absence: Any absence authorized by the Employer
under the Employer's standard personnel practices provided that all persons under similar
circumstances must be treated alike in the granting of such Authorized Leaves of Absence and
provided further that such leave shall end as of the date it was extended to.
New Hire Restatement
4
(d) Beneficiary: A person or persons (natural or otherwise) designated by a
Participant in accordance with the provisions of Section 6.4 to receive any death benefit which
shall be payable under this Plan.
(e) Compensation: A Participant's base salary received from the Employer
for personal services during the Year, but excluding holiday pay, acting officer pay, longevity
pay, bonus payments, payments for unused vacation, overtime, uniform cleaning and travel
allowances, and excluding any benefits paid under this Plan or any other retirement or life
insurance program or under any other health or welfare plan. For purposes of allocating the
Employer's contribution for the Year in which a Participant begins or resumes Participation,
Compensation shall be determined as of the first day of the year in which the Employee became
a Participant and Compensation before his Participation began or resumed shall be disregarded.
Contributions shall be made on a Participant's base salary as defined herein, before taking into
account the reduction of any salary deferrals under the Employer's deferred compensation plan
maintained under Code Section 457. Effective January 1, 1994, Compensation in excess of
$150,000 (as adjusted by the Secretary of the Treasury for cost of living increases or by
Congress) shall not be taken into account under the Plan.
(f) Disability: Disability hereunder shall mean when a Participant is found
by the Board of Directors of the Colorado Fire and Police Pension Association to be eligible for
disability benefits as a result of such Participant's becoming totally disabled or occupationally
disabled as provided under and defined in C.R.S. Section 31-31-803.
(g) Effective Date: The original effective date is January 1, 1988. The
Effective Date of this amended and restated Plan shall be December 24, 2001, except as
otherwise noted.
(h) Employee: Employee shall mean any person:
New Hire Restatement
5
Costs
3. The plan will be looking at the possibility of adding or deleting investment options, however in order for
pricing to be on more of an "apples to apples" basis, we are asking that the vendors assume the final
line up will look as close to the current lineup as possible.
Poudre Fire realizes their plan is very attractive for vendors due to the high average account balances
in the plan. A preferred vendor will refund to the plan revenue sharing in excess of their fee to pay for
additional plan costs (legal, consulting, audit, etc.)
Communication Services
Employee communication should include:
a. Investment advice through both in person, salaried representatives and
computer based systems.
b. Quarterly participant meetings on site at the various fire houses in Fort Collins
for two days each quarter specific to different sophistication levels on a variety
of subjects.
C. General education meetings for new hires as requested, but shall not be more
than 2 per year.
d. Retirement planning seminars by CFP or similarly accredited professionals
should be provided at least once per quarter.
e. Prepare communications for Poudre Fire's specific needs and have ability to
communicate in person and hard copy
Legal Requirements
1. The vendor must have flexibility in their contractual language and have the ability to make
changes to the language based on the reasonable request of the City of Fort Collins Purchasing
Department.
2. Service standards with monetary damages paid back to the plan for non-compliance will be
included in the contract. Vendors must have the flexibility to include these negotiated service
standards in their contract.
3. The term of the contract will be no longer than 3 years and after the initial term, termination can
be made by either party, with or without cause with 60 days notice. No contract termination fees
will be allowed.
Timeline for selection:
Due Date for Proposals:
Finalist Interviews:
Selection of Vendor:
Administrative Issues
June 30, 2004 (by 3:00 pm)
July 27, 2004 (tentative)
August 3, 2004 (tentative)
Proposed Timeline for implementation:
Employee Communication on Transition: December 2004
Plan Conversion Date: January 1, 2005
SA 10/01
(1) who is employed by the Employer on or after the Effective Date;
(2) whose most recent employment with the Employer or the City of
Fort Collins, Colorado (the "City") commenced on or after April 8, 1978 and
(3) who is paid by the Employer on a salary basis; and
(4) whose duties are directly involved with the provision of fire
protection as certified by the Employer.
The term "Employee" shall not mean nor include clerical or other
personnel whose services for the Employer are auxiliary to actual fire protection or any
volunteer firefighter, as defined in C.R.S. Section 31-30-1102(9), as may be amended from time
to time.
The Employer shall, under its current employment policies, make the
determination of whether a person employed by it meets the definition of "Employee" as set
forth herebefore in this Section 2.1(h).
(i) Employee Contribution Account: The account maintained for a
Participant to record his mandatory contributions to the Plan and adjustments relating thereto.
0) Employee Rollover Account: The account established to hold and
account for the contributions rolled over by a Participant from Prior Plans or any other qualified
rollover.
(k) Employee Voluntary Contribution Account: The account maintained for
a Participant to record his voluntary contribution to the Trust and adjustments relating thereto.
(1) Employer: The Employer shall mean the Poudre Fire Authority.
(m) Employer Contribution Account: The account maintained for a Par-
ticipant to record his share of the contributions of the Employer and adjustments relating
thereto.
New Hire Restatement
on
(n) Fiduciaries: The Employer and the Trustees, but only with respect to the
specific responsibilities of each for Plan and Trust administration, all as described in Article IX.
(o) Former Participant: A Participant whose employment with the Employer
has terminated but who has a vested account balance under the Plan which has not been paid in
full.
(p) Income: The net gain or loss of the Trust Fund from investments, as
reflected by interest payments, dividends, realized and unrealized gains and losses on securities,
other investment transactions and expenses paid from the Trust Fund. In determining the
Income of the Trust Fund for any period, assets shall be valued on the basis of their fair market
value.
(q) Internal Revenue Code: The Internal Revenue Code of 1986, as
amended.
(r) Normal Retirement Age: The date a Participant completes twenty (20)
Years of Service or attains the age of fifty (50), whichever occurs first.
(s) Participant: An Employee participating in the Plan in accordance with
the provisions of Section 3.1.
(t) Participation: The period commencing as of the date the Employee
became a Participant and ending upon the termination of employment.
(u) Plan: The Poudre Fire Authority New Hire Money Purchase Pension
Plan and Trust, the Plan set forth herein, as amended from time to time.
(v) Service: A Participant's period of employment with the Employer
determined in accordance with Section 3.2.
(w) Trust (or Trust Fund): The Trust maintained in accordance with the
terms of this Trust Agreement, as from time to time amended, which constitutes a part of this
New Hire Restatement
7
Plan, and the funds now or hereafter placed with the Trustees to be held, invested and paid out
pursuant to the provisions of this Plan and Trust Agreement.
(x) Valuation Date: The Valuation Date is the last day of each Year or such
other date or dates deemed necessary by the Trustees. The Valuation Date may include any day
during the Plan Year that the Trustees, any transfer agent appointed by the Trustees and any
stock exchange used by such agent are open for business.
(y) Year (Plan Year): The plan year consisting of the 12-month period
commencing on January 1 and ending on the following December 31.
3.2 Construction: The masculine gender, where appearing in this Plan and Trust,
shall be deemed to include the feminine gender, unless the context clearly indicates to the
contrary.
ARTICLE IV. PARTICIPATION AND SERVICE
4.1 Participation: Each Employee becomes a Participant in the Plan on the later of
his date of hire or the date he attains age 18. Each Employee who was a Participant in the Prior
Plans on the day before the Effective Date of this restated Plan continues as a Participant in the
Plan.
4.2 Participation Upon Re -Employment: If the Service of an Employee terminates
and he or she is re-employed as an Employee, such re-employed Employee will be eligible to
become a Participant and shall begin participation in the Plan on the date he or she is re-
employed by the Employer as an Employee and is first compensated as a re-employed
Employee.
4.3 Mandatory Participation in Plan: Except as provided in the following sentence, all
Employees who are eligible to participate in the Plan must participate in the Plan as a condition
New Hire Restatement
N.
of their employment as an Employee with the Employer, and no current Participant may elect to
discontinue his or her participation in the Plan. The provisions of this Section 3.3 may not be
applicable to the fire chief of the Employer, provided that the applicable provisions of the
Colorado Revised Statutes are complied with, and further provided that if said chief participates
in another retirement plan sponsored by the Employer, such participation in such other
retirement plan does not detrimentally impact the continued tax qualification of this Plan and
Trust Agreement under the Internal Revenue Code.
ARTICLE V. CONTRIBUTIONS AND FORFEITURES
5.1 Employer Contributions: Not less than monthly, the Employer shall pay into the
Trust Fund an amount equal to eight percent (8%) of the Compensation of all Participants
eligible to receive a contribution for such month.
5.2 Contributions by Participants:
(a) Mandatory Contributions: Not less than monthly, each Participant will
be required to make a mandatory contribution of eight percent (8%) of their monthly
Compensation.
The Employer shall pick up Mandatory Employee Contributions for all
Compensation paid after the Effective Date and the contributions so picked up shall be treated
as Employer contributions pursuant to Section 414(h)(2) of the Internal Revenue Code in
determining tax treatment under such Code. The Employer shall pay these Employee
contributions directly to the Trust Fund in lieu of paying such amounts to Employees, and such
contributions shall be paid from the same funds which are used in paying salaries to the
Employees. Employee contributions so picked up shall be treated for all purposes of this Plan,
New Hire Restatement
9
other than federal tax, in the same manner as Employee contributions which are not picked up
by the Employer.
(b) Voluntary Contributions: In order to encourage savings and investments
by Participants, each Participant voluntarily may contribute to the Trust an amount not to
exceed seven percent (7%) of Compensation in addition to contributions under subparagraph (a)
of this subsection. All contributions shall be made by payroll deduction. The percentage, if
any, which a Participant contributes under this section may be changed by filing a written notice
with the Plan Manager prior to the effective date of such change. All voluntary contributions
shall be paid to the Trustee by the Employer at least monthly. No Participant shall have any
obligation to make any voluntary contribution.
5.3 Disposition of Forfeitures: The amount of a Participant's Accrued Benefit
forfeited under the Plan pursuant to Section 10.5 is a Participant forfeiture. Subject to any
restoration allocation required under Section 10.5, the Trustees will use, allocate and credit the
forfeiture as an additional Employer contribution for the Plan Year in which the forfeiture
occurs. The Trustees will allocate the participant forfeitures for a Plan Year to the Account of
each Participant in the same ratio that each Participant's Compensation for the Plan Year bears
to the total Compensation of all Participants for the Plan Year. A Participant will not share in
the allocation of a forfeiture of any portion of his Accrued Benefit.
5.4 Rollover Contributions: As permitted by law, an Employee who has an
entitlement to a distribution of his entire interest in a plan which meets the requirements of
Section 401(a) of the Internal Revenue Code or from an Individual Retirement Account may, in
accordance with the procedures of the Trustees, transfer the rollover amount to the Trustees.
The plan -to -Plan rollover must be executed on or before the 60th day after the day on which he
is entitled to receive such distribution, to the extent that the fair market value of the rollover
New Hire Restatement
10
amount exceeds the amounts considered contributed by the Employee, reduced by any amounts
previously distributed to him which were not includible in gross income. Such rollover amount
shall be non -forfeitable, shall be held in a separate account and shall receive income allocations.
The acceptance of the rollover amounts and the provisions established by the Trustees shall be
governed by the provisions of the Internal Revenue Code.
ARTICLE VI. ALLOCATIONS TO PARTICIPANTS' ACCOUNTS
6.1 Individual Accounts: The Trustees shall create and maintain adequate records to
disclose the interest in the Trust of each Participant, Former Participant and Beneficiary. Such
records shall be in the form of individual accounts, and credits and charges shall be made to
such accounts in the manner herein described. A Participant may have up to five (5) separate
accounts: an Employer Contribution Account, a Mandatory Employee Contribution Account,
Employee Voluntary Contribution Account, Employee Mandatory Post Tax Contribution
Account, and an Employee Rollover Account. The maintenance of individual accounts is only
for accounting purposes, and a segregation of the assets of the Trust Fund to each account shall
not be required. Distribution and withdrawals made from an account shall be charged to the
accounts as of the date paid.
6.2 Account Adjustments: The accounts of Participants, Former Participants and
Beneficiaries shall be adjusted in accordance with the following:
(a) Income: On each business day of the Year, a daily determination of
unrealized and realized gains and losses, interest, dividends and capital gain distributions will
be calculated and allocated based on the actual activity in each Participant's account. Activity
includes, but is not limited to, allocation of contributions, forfeitures and distributions.
New Hire Restatement
11
Earnings or losses with respect to a Participant's directed account shall be allocated in
accordance with Section 7.2.
Participant's transfers from other qualified plans and voluntary contributions
deposited in the general Trust Fund shall share in any earnings and losses (net appreciation or
net depreciation) of the Trust Fund in the same manner provided above. Each segregated
account maintained on behalf of a Participant shall be credited or charged with its separate
earnings and losses.
(b) Employer Contributions: Employer contributions shall be allocated to
the Employer Contribution Account of each eligible Participant not less than monthly,
according to the amount that is actually contributed on behalf of each Participant in accordance
with Section 4.1.
(c) Expenses: To the extent the Employer does not pay the administrative,
legal, investment and consulting fees of the Trust in accordance with Section 7.14, such
expenses shall be paid and shall be allocated to and deducted from the accounts of Participants.
Expenses which are incurred as a direct result of the investments held in the Trust, shall be
deducted from the interest, dividends and net income of the appropriate investment prior to
allocating each month's Income to Participants. General administrative, legal and consulting
fees and expenses shall be deducted from the accounts of all Participants in the proportion that
each Participant's account balance bears to the total account balances of all Participants in the
Plan on the date such expenses are deducted.
6.3 Maximum Additions: Notwithstanding anything contained herein to the
contrary, the total Additions made to the Employer and Employee Contribution Accounts of a
Participant for any Year shall not exceed the "Maximum Permissible Amount," reduced by the
sum of any Additions allocated to the Participant's accounts for the same Year under any other
New Hire Restatement
12
defined contribution plan or welfare benefit fund (as defined in Code Section 419(e))
maintained by the employer. The Maximum Permissible Amount shall be equal to the lesser of
$30,000 or 25% of the Participant's Compensation for such Year, or such amount as provided in
§415 of the Internal Revenue Code.
(a) The term "Additions" means the total of the Employer contributions and
forfeiture amounts allocated to a Participant's Employer Contribution Account, plus the amount
of any Employee Contributions to the Plan. Amounts allocated to an individual medical
account (as defined in Code Section 415(1)(2)) included as part of a defined benefit plan
maintained by the Employer are Additions. Furthermore, Additions include contributions paid
or accrued attributable to post -retirement medical benefits allocated to the separate account of a
key employee (as defined in Code Section 419A(d)(3)) under a welfare benefit fund (as defined
in Code Section 419(e)) maintained by the Employer.
(b) "Addition" does not include "rollovers" from a qualified plan or
Individual Retirement Account as defined in the Internal Revenue Code.
(c) As of January 1 of each calendar year, and applicable for that Plan Year,
the dollar limit may be adjusted for increases in the cost of living in accordance with
regulations prescribed by the Secretary of the Treasury or his delegate. If such additions exceed
the limitation, the contributions made by the Participant for the Year, which cause the excess,
shall be returned to the Participant. If, after returning the Participant's contribution an excess
still exists, such excess which is attributable to Forfeitures shall be held in a suspense account.
Such account may be maintained if (1) no Employer contributions are made when their
allocation could be precluded by Section 415 of the Internal Revenue Code, (2) no income is
allocated to the account, and (3) amounts in the account are allocated as of each allocation date
New Hire Restatement
13
on which Forfeitures may be allocated until the account is exhausted. Upon termination of the
Plan, the balance of such account may revert to the Employer.
(d) For purposes of this section, the limitation year shall mean the Plan Year.
The term "Compensation" means, for purposes of Sections 5.3 and 5.4 only, a Participant's
earned income, wages, salaries, fees for professional services and other amounts received for
personal services actually rendered in the course of employment with the employer maintaining
the Plan, including cash awards and elective contributions. "Elective contributions" are
amounts excludible from an Employee's gross income under Code Section 125, and amounts
contributed by the Employer, at the Employee's election, to a Code Section 457 Plan
arrangement or a cafeteria plan.
6.4 Multiple Plan Reduction: If an Employee is a Participant in one or more defined
benefit plans and one or more defined contribution plans maintained by the Employer, the sum
of the defined benefit plan fraction and the defined contribution plan fraction for any Plan Year
prior to January 1, 2000 may not exceed 1.0. The defined benefit plan fraction for any year is a
fraction (a) the numerator of which is the projected "annual benefit" of the Participant under the
Plan (determined as of the close of the Year), and (b) the denominator of which is the lesser of.
(1) the product of 1.25 multiplied by the maximum dollar limitation in effect under
Section 415(b)(1)(A) of the Code for such year, or (2) the product of 1.4 multiplied by the
amount which may be taken into account under Section 415(b)(1)(B) of the Code for such year.
The defined contribution plan fraction for any year is a fraction (a) the numerator of which is
the sum of the "annual additions" to the Participant's Account as of the close of the Year and
(b) the denominator of which is the sum of the lesser of the following amounts determined for
such year and each prior Year of Service with the Employer: (1) the product of 1.25 multiplied
by the dollar limitation in effect under Section 415(c)(1)(A) of the Code for such year
New Hire Restatement
14
(determined without regard to Section 415(c)(6) of the Code), or (2) the product of 1.4
multiplied by the amount which may be taken into account under Section 415(c)(1)(B) of the
Code for such year.
At the election of the Trustees, in applying the provision of Section 5.4 with
respect to the defined contribution plan fraction for any Year ending after January 1, 1984, the
amount taken into account for the denominator for each Participant for all Years ending before
December 31, 1983 shall be an amount equal to the product of (a) the amount of the
denominator determined under Section 5.4 (as in effect for the Year ending in 1982) for Years
ending in 1982, multiplied by (b) the "transition fraction."
For purposes of the preceding paragraph, the term "transition fraction" shall
mean a fraction (a) the numerator of which is the lesser of (1) $51,875 or (2) 1.4 multiplied by
twenty-five percent (25%) of the Participant's Compensation for the Year ending in 1981, and
(b) the denominator of which is the lesser of (1) $41,500 or (2) twenty-five percent (25%) of the
Participant's Compensation for the Year ending in 1981.
6.5 Qualified Military Service. Notwithstanding any provision of this Plan to the
contrary, contributions, benefits and service credit with respect to qualified military service will
be provided in accordance with Section 414 (u) of the Internal Revenue Code.
6.6 Return of Contributions. An Employer Contribution which is made by reason of
a mistake of fact, or where the contribution was conditioned upon its deductibility, shall be
returned to the Employer in accordance with this section. The return to the Employer of the
amount involved must be made within one (1) year after:
(a) the Employer made the contribution by mistake of fact; or
(b) the disallowance of the contribution as a deduction, and then, only to the
extent of the disallowance.
New Hire Restatement
15
P943 Pension Services Poudre Fire Authority
Poudre Fire Authority Money Purchase Pension Plan
Proposal Questionnaire
General
1. Please indicate your company's legal name, contact person, address, telephone and fax numbers, e-mail
address, and federal tax I.D. number.
2. Confirm that you agree to all requirements in the Statement of Work and Vendor Qualifications Document.
3. Provide the following information about your company:
■ Type of entity (corporation, partnership, etc.)
■ State under which laws your company is organized; confirm that your company is licensed to do business
in Colorado.
■ List of the directors and executive officers and major shareholders
■ Brief history, including year founded and types of services offered
4. Please provide a brief biographical sketch, including name, position, education, experience and training, other
accounts assigned, and location of the individuals who would be servicing this account. Please explain each
person's responsibility for this account. Please also comment on the historical turnover rates for this position
within your firm.
5. Indicate the total value of assets for which you provide recordkeeping services and the total number of
participants in all defined contribution plans currently being administered by your organization.
6. How many defined contribution plans do you currently administer in the following categories:
Under 100 employees
100-500 employees
500-1,000 employees
1,000-5,000 employees
Over 5,000 employees
7. How many defined contribution plans do you currently administer in the following categories:
Under $20 million in assets
$20 - $50 million in assets
$50 - $100 million in assets
$100 - $500 million in assets
over $500 million in assets
5A 10/01
ARTICLE VII. BENEFITS
7.1 Benefits: If a Participant's employment with the Employer is terminated, the
Participant shall be entitled to receive the entire vested amount then in the Participant's
Aggregate Accounts in accordance with Section 6.2. The Employer Contribution Account,
Mandatory Employee Account, Employee Voluntary Contribution Account, Employee
Mandatory Post Tax Contribution Account, and the Employee Rollover Account balance shall
be one -hundred percent (100%) vested at all times.
Upon termination of employment, the Employer shall notify the Trustees in
writing of the name and address of the Participant who has terminated employment. The
Trustees shall determine the amount of the Participant's Aggregate Accounts as calculated
above and shall, subject to the election of the Participant as provided in Section 6.2, distribute
such to the Participant as soon as administratively practicable after the Participant's termination
of employment.
New Hire Restatement
16
7.2 Payment of Benefits:
(a) Within a reasonable time prior to or following termination of a Participant's
employment for any reason, the Trustees shall provide to the Participant a benefit application
form, which shall describe in plain language the terms and conditions of the optional forms of
benefits described below and which shall be provided for the Participant to indicate his benefit
commencement date, his election of an optional form of benefit, and his Beneficiary or
contingent annuitant. The completed benefit application form should be returned to the
Trustees prior to the Participant's benefit commencement date. If the Participant files another
benefit application form after the first form and prior to his benefit commencement date, the
earlier form shall be deemed annulled.
The Trustees shall follow a Participant's Beneficiary designation and may follow
the method of payment, if any, selected by the Participant in the case of a distribution on
account of the Participant's death.
Payment of a Participant's benefits must commence within a reasonable time
after the Participant's termination of employment. In any event, payment of a terminated
Participant's benefits shall, unless the Participant otherwise elects a later date in writing, begin
not later than the 60th day after the latest of the close of the Year in which (1) the Participant
attains age 55, (2) the occurrence of the 10th anniversary of the year in which the Participant
commenced participation in the Plan, or (3) the Participant terminates employment with the
Employer. Notwithstanding any provision above to the contrary, mandatory minimum
distributions of a Participant's benefits shall commence either during the taxable year in which
he attains age 70-1/2, or the year in which he actually retires, whichever is later. Alternatively,
distributions to a Participant must begin no later than such taxable year and must be made over
the life of the Participant (or lives of the Participant and the Participant's spouse) or over a
New Hire Restatement
17
period not exceeding the life expectancy of the Participant (or the life expectancies of the
Participant and the Participant's spouse). Distributions (as described above) may be made to a
Participant and a non -spouse Beneficiary provided as the measuring lives remain those of the
Participant and the Participant's spouse.
The methods of payment available to a Participant are as follows:
(1) In a lump sum,
(2) By the purchase of a single -premium nontransferable annuity contract
from a legal reserve life insurance company, with a term and in the form as the Participant, with
the approval of the Trustees, shall determine,
(3) A joint and 50% survivor annuity, or
(4) Periodic payments over a period not exceeding the life expectancy of
the Participant (or the joint life expectancies of the Participant and the Participant's designated
beneficiary), with any amounts remaining in the Plan to receive income and expense allocations
pursuant to Section 5.2(a) and (c).
For distributions made on or after January 1, 1993 notwithstanding any provision
of the Plan to the contrary which would otherwise limit a Participant's election under this
section, a Participant may elect, at the time and in the manner prescribed by the Trustees, to
have any portion of an eligible rollover distribution, as defined in Internal Revenue Code
Section 402(c)(4), paid directly to an eligible retirement plan specified by the Participant in a
direct rollover.
Notwithstanding the foregoing, a Participant may elect to defer receipt of the
balance in his Aggregate Account. Such Former Participant shall receive Income allocations
pursuant to Section 5.2(a) and shall have trust expenses deducted pursuant to Section 5.2(c)
until the balance of the Former Participant's Aggregate Account has been distributed. A Former
New Hire Restatement
18
Participant may make application for distribution of his Aggregate Account in accordance with
the procedures contained in this section. In any event, a distribution option for a Former
Participant's Aggregate Account shall be elected no later than the close of the Year in which the
Former Participant attains age 65.
Notwithstanding any provision herein to the contrary, if the present value of a
Former Participant's Accrued Benefit is less than $5,000, or whatever amount is provided under
Internal Revenue Code Section 411(a)(11)(A), the Plan may distribute the Accrued Benefit
without the Former Participant's consent.
(b) After a Participant attains Normal Retirement Age, the participant, until he
retires, has a continuing election to receive all or any portion of his Accrued Benefit. A
Participant shall make an election under this paragraph (b) on a form prescribed by the Trustees
at any time during the Plan Year for which his election is to be effective. In his written election,
the Participant shall specify the percentage or dollar amount he wishes the Trustees to distribute
to him. Furthermore, the Participant's election shall relate solely to the percentage or dollar
amount specified in his election form and his right to elect to receive an amount, if any, for a
particular Plan Year greater than the dollar amount or percentage specified in his election form
shall terminate on the Valuation Date. The Trustees shall make a distribution to a Participant in
accordance with his election under this paragraph (b) within the 90-day period (or as soon as
administratively practicable) after the Participant files his written election with the Trustees.
The Trustees shall distribute the balance of the Participant's Accrued Benefit not distributed
pursuant to his election(s) in accordance with the other distribution provisions of this Plan.
7.3 Post -Death Distribution: Notwithstanding any provision herein to the contrary,
where distributions did commence before death, distributions must continue to be made at least
as rapidly as the deceased elected.
New Hire Restatement
19
Where distributions did not commence before death, benefits shall be distributed
within the five year period following the date of death unless (i) a portion of benefits is payable
to a designated Beneficiary, and that portion will be distributed over the life of the Beneficiary,
and distributions commence no later than 1 year after the date of death; and/or (ii) a portion of
the benefits is to be paid to the surviving spouse and is distributed over the life of, or a period
not exceeding the life of, the spouse, and the distributions commence no later than the date on
which the Employee would have attained age 70-1/2.
7.4 Designation of Beneficiary: Each Participant from time to time may designate
any person or persons (who may be designated contingently or successively and who may be an
entity other than a natural person) as his Beneficiary or Beneficiaries to whom his Plan benefits
are paid if he dies before receipt of all such benefits. Each Beneficiary designation shall be in
the form prescribed by the Trustees and will be effective only when filed with the Trustees
during the Participant's lifetime. Each Beneficiary designation filed with the Trustees will
cancel all Beneficiary designations previously filed with the Trustees.
If any Participant fails to designate a Beneficiary in the manner provided above,
or if the Beneficiary designated by a deceased Participant dies before him or before complete
distribution of the Participant's benefits, the Trustees, in their discretion, may distribute such
Participant's benefits (or the balance thereof) pursuant to Colorado law.
7.5 Distributions Under Domestic Relations Order. Nothing contained in this Plan
prevents the Trustees from complying with the provisions of a domestic relations order pursuant
to C.R.S. § 14-10-113. A distribution to an alternate payee shall be made as soon as
administratively practicable after the Trustees determines that an order submitted to the Plan
complies with the terms of C.R.S. § 14-10-113, and shall be in the form of a lump sum.
New Hire Restatement
20
7.6 Direct Transfers and Rollovers. This section applies to distributions made on or
after January 1, 1993. Notwithstanding any provision of the Plan to the contrary that would
otherwise limit a distributee's distribution election under this Article, a distributee may elect, at
the time and in the manner prescribed by the Trustee, to have any portion of an eligible rollover
distribution paid directly to an eligible retirement plan specified by the distributee in a direct
rollover.
An eligible rollover distribution is any distribution of all or any portion of the
balance to the credit of the Participant, except that an eligible rollover distribution does not
include: (i) any distribution that is one of a series of substantially equal periodic payments (not
less frequently than annually) made for the life (or life expectancy) of the distributee or the joint
lives (or joint life expectancies) of the distributee and the distributee's designated Beneficiary,
or for a specified period of ten years or more; (ii) any distribution to the extent such distribution
is required under Code Section 401(a)(9); and (iii) the portion of any distribution that is not
includible in gross income (determined without regard to the exclusion for net unrealized
appreciation with respect to employer securities).
An eligible retirement plan is an individual retirement account described in Code
Section 408(a), an individual retirement annuity described in Code Section 408(b), an annuity
plan described in Code Section 403(a), or a qualified trust described in Code Section 401(a) that
accepts the distributee's eligible rollover distribution. However, in the case of an eligible
rollover distribution to the surviving spouse, an eligible retirement plan is an individual
retirement account or individual retirement annuity.
A distributee includes an Employee or former Employee. In addition, the
Employee's or former Employee's surviving spouse and the Employee's or former Employee's
spouse or former spouse who is the alternate payee under a qualified domestic relations order,
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as defined in Code Section 414(p), are distributees with regard to the interest of the spouse or
former spouse.
A direct rollover is a payment by the Plan to the eligible retirement plan
specified by the distributee.
The Trustees may establish procedures for the distribution of eligible rollover
distributions, including any limitations on the amount eligible for a rollover distribution, to the
extent permitted by law.
ARTICLE VIII. THE TRUST AND TRUST FUND
8.1 Contributions to Trust: All contributions under this Plan shall be paid to the
Trustees and deposited in the Trust Fund. All assets of the Trust Fund, including investment
income, shall be retained for the exclusive benefit of Participants, Former Participants, and
Beneficiaries and shall be used to pay benefits to such persons or to pay administrative expenses
of the Plan and Trust Fund to the extent not paid by the Employer and shall not revert to or
inure to the benefit of the Employer.
Notwithstanding anything herein to the contrary, upon the Employer's request, a
contribution which was made by a mistake of fact shall be returned by the Trustees to the
Employer within one year after the payment of the contribution.
8.2 Participant Direction of Investment: The investment of Trust funds hereunder is
governed by the provisions of C.R.S. §31-31-602(2). To the extent allowed by the Trustees,
each Participant shall exercise control of the investment of the Participant's individual
Aggregate Account under the Plan. The Trustees shall select at least three investment
alternatives, each of which is diversified in itself, that allow the Participant a broad range of
investments and a meaningful choice between risk and return in the investment of the
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Participant's individual Aggregate Account. The Trustees shall allow each Participant to change
investments at least once each calendar quarter. The Trustees shall provide the Participant with
information describing the investment alternatives, and the nature, investment performance,
fees, and expenses of the investment alternatives and other information to assist a Participant in
making informed investment decisions. The Trustees may establish written procedures for
Participant direction of investment under this Plan. The Trustees are not liable for any loss, nor
are they liable for any breach resulting from a Participant's control and/or direction of the
investment of any part of the Participant's individual Aggregate Account. Moreover, the
Trustees may decline to implement participant instructions which would result in a prohibited
transaction or would generate income which would be taxable to the Plan.
As of each Valuation Date, all Participant -directed accounts shall be charged or
credited with the net earnings, gains, losses and expenses as well as any appreciation or
depreciation in the market value using publicly -listed fair market values when available or
appropriate.
(a) To the extent that the assets in a Participant's directed account are
accounted for as pooled assets or investments, the allocation of earnings, gains and losses of
each Participant's directed account shall be based upon the total amount of funds so invested, in
a manner proportionate to the participant's share of such pooled investment.
(b) To the extent that the assets in the Participant's account are accounted for
as segregated assets, the allocation of earnings, gains and losses from such assets shall be made
on a separate and distinct basis.
8.3 Trustees' Powers and Duties: To the extent funds held by the Trust are not
invested pursuant to Participant direction as provided in Section 7.2 hereof, it shall be the duty
of the Trustees to hold the funds from time to time received by it from the Employer, to
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manage, invest and reinvest the Trust Fund and the income therefrom pursuant to the provisions
hereinafter set forth, without distinction between principal and income. The Trustees shall be
responsible only for such sums as shall be actually received by it as Trustees. The Trustees
shall have no duty to collect any sums from the Employer or the Participants.
The Trustees shall have the power to invest and/or reinvest any and all money or
property of any description at any time held by it and constituting a part of the Trust Fund,
without previous application to, or subsequent ratification of, any court, tribunal or commission,
or any federal or state governmental agency, in accordance with the following powers:
(a) With regard to its investments, the Trustees may invest and reinvest any
and all money or property constituting the Trust Fund subject to the Uniform Prudent Investor
Act, Article 1.1, of Title 15, C.R.S., in investments, including, but not limited to, obligations of
the United States government and in obligations fully guaranteed as to principal and interest by
the United States government, in state and municipal bonds, in corporate notes, bonds or
debentures, convertible or otherwise, in railroad equipment trust certificates, in real property
and in loans secured by first mortgages or deeds of trust on real property, in participation
guarantee agreements with life insurance companies, in real estate limited partnerships, or
limited liability companies, and in other types of investment agreements, and the foregoing
investments may be made without limitation as to the percentage of the book value of the assets
of the retirement fund so invested. Investments may also be made in either common or
preferred corporate stocks.
(b) The Trustees, in the matter of the investment of the Trust Fund, shall be
held harmless in every respect in exercising its discretion as to how much of the Trust Fund
shall remain uninvested and in cash temporarily awaiting investment or for the expected cash
distributions out of the Trust Fund in accordance with the provisions of this Plan.
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(c) The Trustees may cause any part of the money or other property of the
Trust to be commingled with the money or property of trusts created by others causing such
assets to be invested as part of a pooled pension and profit sharing fund. In addition, any
portion of the Trust assets may be invested in any other collective investment fund approved by
the Trustees as an investment option, the terms of such collective investment trust shall be
incorporated as part of this Plan and Trust upon approval of the Trustees.
(d) The Trustees from time to time shall determine the immediate and long-
term financial requirements of the Plan and on the basis of such determination, establish a
policy and method of funding which will enable the Trustees or the investment manager or
managers, if any, to coordinate the investment policies of the Plan's funds with the objectives
and financial needs of the Plan.
(e) The Trustees may delegate its investment responsibilities to an
Investment Manager pursuant to Section 7.5 or permit Participants to direct the investment of
their Aggregate Accounts pursuant to Section 7.2.
8.4 Further Powers of the Trustees: The Trustees shall have all powers necessary or
advisable to carry out the provisions of this Plan and Trust Agreement and all inherent, implied
and statutory powers now or hereafter provided by law, including specifically the power to do
any of the following:
(a) To cause any securities or other property to be registered and held in its
name as Trustees, or in the name of one or more of its nominees, without disclosing the
fiduciary capacity, or to keep the same in unregistered form payable to bearer.
(b) To sell, grant options to sell, exchange, pledge, encumber, mortgage,
deed in trust, or use any other form of hypothecation, or otherwise dispose of the whole or any
part of the Trust Fund on such terms and for such property or cash, or part cash and credit, as it
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8. What percentage of your contribution plan business represents public retirement plans? How many Colorado
Public Retirement Plan clients do you have?
9. Will the same team be responsible for conversion and ongoing support? Please distinguish the conversion staff
from the ongoing services staff, include bios on the conversion staff.
10. Explain your conversion process, including time frame. Is a blackout period required? If yes, how long and
what is restricted or not available during that time.
11. From which location will the Poudre Fire account be handled? Please describe the process for servicing the
account from both the plan sponsor and the participant perspective.
12. Within the last ten years, has your firm, any entity owning an interest in your firm, any subsidiaries, or any
partners, professionals, or any other member of your firm:
a) Been the subject of any disciplinary action by any security regulatory agency?
b) Been the party to any litigation directly or indirectly related to the conduct of your business?
c) Been the subject of any ethical inquiries, legal inquiries, or other disciplinary proceedings?
Please describe in detail.
13. What fiduciary responsibility does your firm assume? Does your firm carry fiduciary liability insurance? If so,
how much and with what carrier?
14. Will your firm provide trustee services in addition to recordkeeping services?
15. Does your firm carry Errors & Omissions insurance? If so, how much and with what carrier?
16. Is your firm a registered advisor with the SEC under the Investment Advisor Act of 1940? If so, please include
a copy of the firm's ADV Parts I and II that are currently on file with the SEC.
17. Is the package of services being quoted provided under a joint venture arrangement? If so, describe the
arrangement, its terms and conditions and whether your company and the other companies have been involved
in similar joint ventures in the past.
18. Indicate whether any services will be subcontracted to another company and fully describe these services and
the stability, background and qualifications of the company that will provide the services.
19. Over the last three years, how many clients have you gained and how many were lost? What was the dollar
amount of the gains and losses? What was the reason for each lost client?
20. Describe any pending agreement to merge or sell the company.
21. Give a brief history of your company's participation in any similar defined contribution plans. Please include a
client list. Also, please provide five (5) clients of similar participant and asset size who may be contacted. At
least 1 of the 5 should have converted within the last year. Include client name, contact person, phone number,
number of participants, plan assets and length of relationship.
22. In the past three years, have you converted any plans from Prudential? If so, please list references.
SA 10/01
may deem best and it may retain, hold, maintain or continue any securities or investments which
it may hold as part of the Trust Fund for such length of time as it may deem advisable, and
generally, in all respects, the Trustees may do all things and exercise each and every right,
power and privilege in connection with and in relation to the Trust Fund as could be done,
exercised or executed by an individual holding and owning said property in absolute and
unconditional ownership.
(c) To abandon, compromise, contest and arbitrate claims and demands; to
institute, compromise and defend actions at law (but without obligation to do so); as the
Trustees shall deem advisable; all at the risk and expense of the Trust Fund.
(d) To borrow money for this Trust upon such terms and conditions as the
Trustees shall deem advisable, and to secure the repayment thereof by the mortgage or pledge of
any assets of the Trust Fund.
(e) To vote in person or by proxy any shares of stock or rights held in the
Trust Fund; to participate in reorganization, liquidation or dissolution of any corporation, the
securities of which are held in the Trust Fund and to exchange securities or other property in
connection therewith.
(f) To pay any amount due on any loan or advance made to the Trust Fund,
all taxes of any nature levied, assessed or imposed upon the Trust Fund, and all reasonable
expenses and attorney fees necessarily incurred by the Trustees with respect to any of the
foregoing matters.
(g) To defend any suit or legal proceedings against the Trust and the Trustees
may sue or bring legal proceedings against any party or parties, compromise, submit to
arbitration, or settle any suit or legal proceeding, claim, debt, damage or undertaking due or
owing from or to the Trust Fund. In the administration of the Fund, the Trustees shall not be
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obligated to take any action which would subject them to any expense or liability unless they be
first indemnified in an amount and in the manner satisfactory to the Trustees or to be furnished
with funds sufficient, in the sole judgment of the Trustees, to cover such expenses.
8.5 Investment Manager: To the extent funds held by the Trust are not invested
pursuant to Participant direction as provided in Section 7.2 hereof, the Trustees may appoint one
or more Investment Managers to exercise the power of the Trustees to direct the investment and
reinvestment of the Trust Fund, pursuant to the provisions of Section 7.3 of this Plan and Trust.
Such appointment shall be made in writing and accepted by the Investment Manager, a copy of
which shall be delivered to the Trustees and may be revoked by the Trustees by written notice
delivered to the Investment Manager. The Investment Manager shall receive such
compensation and reimbursement for expenses as shall be agreed upon from time to time by the
Trustees and the Investment Manager which shall be paid, in whole or in part by the Employer,
and any amount thereof not paid by the Employer shall be paid by the Trustees out of the
principal or income of the Trust. The Investment Manager shall discharge his duties relating to
the investment and reinvestment of the Trust Fund in conformity with Article VII of this Plan
and shall be subject to the liabilities therein stated insofar as his duties are concerned. The
Trustees shall not be liable with respect to acts or omissions of the Investment Manager, or be
under an obligation to invest or otherwise manage any assets of the Plan or Trust Fund which
are subject to the management of the Investment Manager, except insofar as they shall be liable
for the breach of co -fiduciaries pursuant to Article IX hereof.
8.6 Claims Procedure: The Trustees shall make all determinations as to the right of
any person to a benefit. Any denial by the Trustees of the claim for benefits under the Plan by a
Participant or Beneficiary shall be stated in writing by the Trustees and delivered or mailed to
the Participant or Beneficiary; and such notice shall set forth the specific reasons for the denial,
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reference pertinent Plan provisions, describe any additional information needed and the steps to
be taken to submit the claim for review, all written to the best of the Trustees' ability in a
manner that may be understood without legal or actuarial counsel. Should a Participant or
Beneficiary receive no response to his claim for benefits within 90 days of making the claim, it
shall be deemed to be denied and the Participant or Beneficiary may proceed to have the claim
reviewed. The claimant may, within 60 days after receiving such denial notice, request a repeal
of the denial in writing, submit issues and comments, and may review pertinent documents.
The Trustees shall reach a decision as to the claimant's appeal not later than 60 days after
receiving the request for review.
8.7 Records and Reports: The Trustees shall exercise such authority and
responsibility as it deems appropriate relating to records of Participant's Service, account
balances and the percentage of such account balances which are non -forfeitable under the Plan;
and notifications to Participants.
8.8 Other Administrative Powers and Duties: The Trustees shall also have such
duties and powers as may be necessary to discharge its duties hereunder, including, but not by
way of limitation, the following:
(a) To construe and interpret the Plan, decide all questions of eligibility and
determine the amount, manner and time of payment of any benefits hereunder;
(b) To prescribe procedures to be followed by Participants or Beneficiaries
filing applications for benefits;
(c) To prepare and distribute, in such manner as it determines to be
appropriate, information explaining the Plan;
(d) To receive from the Employer and from Participants such information as
shall be necessary for the proper administration of the Plan;
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(e) To furnish the Employer, upon request, such annual reports with respect
to the administration of the Plan as are reasonable and appropriate;
(f) To receive, review and keep on file (as they deem convenient or proper)
reports of the financial condition, and of the receipts and disbursements, of the Trust Fund;
(g) To appoint or employ individuals to assist in the administration of the
Plan and any other agents they deem advisable, including legal, investment, custodial, third -
party administrators and actuarial counsel.
The Trustees shall have no power to add to, subtract from or modify any of the
terms of the Plan, or to change or add to any benefits provided by the Plan, or to waive or fail to
apply any requirements of eligibility for a benefit under the Plan. No member of the Trustees
shall act upon his own application for a benefit under the Plan.
8.9 Rules and Decisions: The Trustees may adopt such rules as it deems necessary,
desirable, or appropriate. All rules and decisions of the Trustees shall be uniformly and
consistently applied to all Participants in similar circumstances. When making a determination
or calculation, the Trustees shall be entitled to rely upon information furnished by a Participant
or Beneficiary, the Employer or the legal counsel of the Employer.
8.10 Benefit Payments: The Trustees shall pay all benefits from the Trust Fund
pursuant to the provisions of the Plan.
8.11 Application and Forms for Benefits: The Trustees may require a Participant to
complete and file with the Trustees an application for a benefit and all other forms approved by
the Trustees and to furnish all pertinent information requested by the Employer. The Trustees
may rely upon all such information so furnished it, including the Participant's current mailing
address.
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8.12 Indemnification: To the extent allowed by law, the Employer shall indemnify
and hold harmless the Trustees from any and all claims, losses, damages, expenses (including
counsel fees approved by the Trustees), and liabilities (including any amounts paid in settlement
with the Trustees' approval) arising from any act or omission of the Trustees, except when the
same is judicially determined to be due to the gross negligence or willful misconduct of such
Trustees.
8.13 Loans to Participants:
(a) General Rules: The Trustees, in accordance with a uniform and
nondiscriminatory policy, may make a loan to any Participant who remains actively employed
with the Employer and who makes a written request for such a loan. The Trustees will
promulgate rules and procedures regarding Participant loans. No loan to a Participant may
exceed the Participant's vested Accrued Benefit. In addition, a loan, when added to the
outstanding balance of all other loans to the Participant from this and any other qualified Plan
maintained by the Employer, may not exceed the lesser of. (1) $50,000 less the excess of the
highest outstanding balance of loans from the Plan during the one-year period ending on the day
before such loan is made over the outstanding balance of loans from the Plan on the day such
loan is made; or (2) the greater of one-half of the value of the Participant's vested Accrued
Benefit as of the last preceding valuation date or $10,000.
(b) Security and Interest: All loans will be adequately secured and will bear a
rate of interest considered reasonable on the date the loan was made. Participant loans will be
considered a Participant -directed investment under Section 7.2 of the Participant requesting the
loan and interest paid on the loan will be allocated to the account of the Participant -borrower.
(c) Tenn of Loan: Any loan must be repaid in level payments of principal and
interest at least quarterly within five years of the date on which it was made or on the
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occurrence of any event that renders the Participant's Account distributable, whichever occurs
first. However, any loan verified by the Trustees as used to acquire any dwelling unit used or to
be used within a reasonable time as the principal residence of the Participant must be repaid
within the time prescribed by the Trustees, or upon distribution of the Participant's Account,
whichever occurs first. If a Participant does not repay a loan within the time prescribed, in
addition to enforcing payment through any legal remedy, the Trustees may deduct the total
amount of the loan and any unpaid interest due on it from the Participant's Account when the
Account becomes distributable under the Plan.
8.14 Payment of Expenses and Fees: The expenses of administration of the Trust
incurred by the Trustees, including legal counsel and consulting fees and other charges, shall be
paid by the Employer and if not paid by the Employer, then from the Trust Fund. The Trustees
shall receive in addition to all their expenses, such compensation that may be agreed upon from
time to time by the Employer and the Trustees. However, if any Trustee is already receiving
compensation from the Employer, as a full-time Employee they shall not also receive
compensation as a member of the Trustees. If and to the extent that the Employer does not pay
such compensation or expense, it shall be paid from the Trust Fund.
8.15 Protection of the Trustees: The Trustees shall not incur any liability by reason of
taking any action indicated by this instrument to be within the scope of the authority of an
Investment Manager appointed by the Trustees in accordance with any written instrument
purporting to be signed by such person or persons authorized to sign for the Investment
Manager, or in reliance upon a certified copy of a resolution of the Trustees, any of which the
Trustees, in good faith, believe to be genuine. The Trustees may consult with counsel, who may
be counsel for the Employer, in respect to any of its duties or obligations hereunder and shall be
fully protected in acting or refraining from acting in accordance with the advice of such counsel.
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The Trustees shall incur no liability for any loss to or depreciation in value of the
Trust Fund or for any act done or omitted to be done in the administration of the Trust, except
for breach of its fiduciary duty as set forth in this instrument. The Trustees shall be indemnified
and saved harmless by the Employer from and against any and all liability arising from breach
of its fiduciary duty, as provided in Section 7.12, including all expenses reasonably incurred in
its defense, in case the Employer fails to provide such defense.
8.16 Accounts of the Trustees: The Trustees shall maintain accurate records and
accounts of all transactions hereunder, which shall be available at all reasonable times for
inspection or audit by any person or persons designated by the Employer. The Trustees at the
direction of the Employer shall submit to the auditors for the Employer such valuations, reports
or other information as they may reasonably require. As of December 31 st of each fiscal Year
(i.e., the Valuation Date) the Trustees shall value the Trust Fund at its fair market value. The
Trustees shall furnish a copy of such valuation to the Employer as soon as possible. Any
valuation by the Trustees shall be conclusive and binding on any persons having an interest
hereunder.
ARTICLE IX. TRUSTEES
9.1 Trustees: The Trustees shall be made up of four (4) members composed initially
as follows: two (2) members appointed by the Employer and two (2) members who are
Employees that are duly elected by the Participants to be Trustees of the Plan. The Trustees
shall serve initial terms of office as follows: two (2) Employer members and one (1) Employee
member shall each serve a term of three (3) years and one (1) Employee member shall serve a
term of two (2) years.. Successors shall each serve a term of three (3) years and shall become
Trustees in the following manner: the Employer shall appoint successors to its member
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positions and successor Employee members shall be elected by a plurality vote of active
Participants. The Trustees shall make all decisions in a non-discriminatory manner.
An Employee member of the Trustees may resign at any time upon giving
written notice thereof by registered or certified mail, hand delivery, or by telegram or telefax to
the Employer. Upon termination of employment of an Employee representative member of the
Trustees, such person's membership on the Trustees shall terminate and a successor shall be
appointed in accordance with this Section 8.1 to fill the remaining unexpired term of such
Trustee. Such resignation shall become effective forthwith upon the receipt of such written
notice by the Employer. Each successor Trustee appointed as provided in Section 8.1 shall
upon succeeding as a Trustee be vested with all of the rights, powers and discretion herein
vested in and imposed upon the Trustees. Upon the removal, resignation or expiration of the
term of any Trustee, he shall cause to be delivered to the Trustees any Trust property or records
then in his possession. No successor Trustee shall have any duty to examine the accounts or
doings of his predecessors. Any successor Trustee shall be responsible only for the money and
property known to him to comprise the principal and income of the Fund and shall in no way be
liable or responsible for anything done or omitted to have been done by his predecessors.
9.2 Use of Corporate Trustee: At any time and from time to time the Trustees may
appoint, as Corporate Trustee, a bank or trust company located in the United States which has
capital and surplus aggregating not less than $50,000,000.00, as shown by its last published
statement. The Trustees may delegate to the Corporate Trustee (i) the power to hold all or any
part of the Trust Fund as sole trustee of a trust separate from the Trust created by this
Agreement (and not as agent of the Trustees or as Co -Trustee hereunder with the Trustees),
(ii) the power to invest and reinvest the Trust Fund in the Corporate Trustee's sole discretion,
and (iii) such other duties and powers as the Trustees may deem advisable. The Trustees may
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enter into and execute a trust agreement with the Corporate Trustee, which agreement shall
contain such provisions as the Trustees may deem advisable. The Corporate Trustee shall have
no obligations under this Agreement or under the Plan and its powers and duties shall be limited
to those set forth in the agreement between it and the Trustees. Upon execution of an agreement
with the Corporate Trustee, the Trustees may transfer and convey to the Corporate Trustee any
part or all of the assets of the Trust Fund acceptable to the Corporate Trustee, and thereupon,
the Trustees shall be forever released and discharged from any responsibility or liability with
respect to the assets so transferred as to any period subsequent to such transfer and with respect
to the investment and reinvestment thereof by the Corporate Trustee during the time the Trust
Fund is in the hands of the Corporate Trustee. Notwithstanding such transfer, the Trustees shall
continue to carry out its administrative functions under the Plan in accordance with the
provisions of the Plan and Trust Agreement.
Any Corporate Trustee appointed as provided in this section may be removed at
any time, with or without cause, by majority vote of the Trustees and upon written notice
thereof being furnished to such Corporate Trustee as provided by the terms of the Corporate
Trustee Agreement previously entered into by the Trustees with such Corporate Trustee. If and
when so removed, such Corporate Trustee shall cause to be transferred to the Trustees any and
all Trust property, assets and records then in its possession.
9.3 Officers: The officers of the Board of Trustees shall be selected annually at the
first regularly -called meeting in each fiscal year by the Trustees from among themselves and
shall serve until their successors have been selected and qualified. The officers shall include a
Chairman and Secretary.
9.4 Officer Responsibilities: The Chairman shall be responsible for the conduct of
the meeting. The Secretary shall keep minutes or records of all meetings, proceedings and acts
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of the Trustees and shall make these available to all Trustees. The Chairman and the Secretary
shall jointly execute written documents and instruments authorized by the Trustees.
9.5 Annual Meeting: An annual meeting of the Trustees shall be held for the
purpose of selecting officers for the ensuing year. The date and place of the annual and regular
meetings shall be fixed by Resolution of the Trustees. Special meetings may be called by the
Chairman or Secretary or any three (3) other Trustees by giving to each Trustee at least ten (10)
days' written notice of time and place of such meeting; or may be held without notice if all
Trustees consent in writing, or if the Trustees in attendance constitute a quorum and they agree
to waive notice by their attendance.
Whenever any notice is required to be given to any Trustee hereunder, a waiver
thereof in writing, signed at any time, whether before or after the time of meeting, by the
Trustees entitled to such notice, shall be deemed equivalent to the giving of such notice. The
attendance of a Trustee at a meeting shall constitute a waiver of notice of such a meeting, except
where a Trustee attends a meeting and objects prior to the first order of business to the
transaction of any business upon the ground that the meeting was not lawfully called or
convened.
9.6Quorum: Three (3) Trustees, at least one representing the Employer and one
representing the Employees, present in person shall constitute a quorum for the transaction of
business at any meeting.
9.7 Majority Vote: All decisions of the Trustees shall be made by majority vote of
the Trustees present at the meeting at which such vote is taken.
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23. Please confirm that your company is willing to comply with auditing requests. Are there any limitations or
restrictions you would impose on an audit? Would you be willing to provide resources or materials requested
through our audit without imposing additional cost?
24. How do you keep your clients informed of regulatory and legislative changes that impact employee benefit
plans?
25. Do you have the ability to offer Retiree Health Savings Plans to Poudre Fire participants? Please describe your
solution in detail. Are there additional costs for this offering?
I Particivant Communication Services
1. Fully describe your communications approach and methods used.
2. Based on each of the employee communication areas outlined in the Statement of Work in Item F., please
provide a detailed communication plan, including proposed timetables.
3. Attach samples of the visual and demonstrative aids that your company would use to educate employees about
the plan. (both enrollment and ongoing)
4. Confirm your ability to mail enrollment kits directly to a participant's home, and handle new hires directly. What
materials would they receive?
5. Do you create the communication and education materials in house or through 3m parties? Would you create a
custom education campaign for our participants? If so, is the cost included in your cost proposal?
6. Does your organization provide any services (i.e., personal questionnaires, software, one on one meetings with
CFP's etc) that would help individual participants with financial planning?
7. Describe the policies and practices you employ to prevent the following occurrences:
a) Representatives use of on -site group meetings and individual consultations to solicit outside business(i.e.,
insurance products, mutual funds, IRA's, other investments)
b) Representatives in person or by mail promoting products or plan features not identified in your proposal.
c) Commissions, incentives or other compensation that encourages your representatives to improperly
influence a participant's choice of an investment option.
8. Do your Representatives have securities or insurance licenses to sell products?
Services
1. Describe your company's recordkeeping system:
a) How long has your system been in existence?
SA ioioi
ARTICLE X. FIDUCIARIES
10.1 Fiduciaries: The Fiduciaries shall have only those specific powers, duties,
responsibilities and obligations as are specifically given them under this Plan or the Trust. In
general, the Employer shall have the responsibility for making the contributions provided for
under Section 4.1. The Trustees shall have the sole responsibility for the administration of this
Plan, which responsibility is specifically described in this Plan and Trust. The Trustees shall
have the sole responsibility for the administration of the Trust and the management of the assets
held under the Trust. Each Fiduciary warrants that any directions given, information furnished,
or action taken by it shall be in accordance with the provisions of the Plan and Trust authorizing
or providing for such direction, information or action. Furthermore, each Fiduciary may rely
upon any such direction, information or action of another Fiduciary as being proper under this
Plan and Trust, and is not required under this Plan and Trust to inquire into the propriety of any
such direction, information or action. It is intended under this Plan and Trust that each
Fiduciary shall be responsible for the proper exercise of its own powers, duties, responsibilities
and obligations under this Plan and Trust and shall not be responsible for any act or failure to
act of another Fiduciary. No Fiduciary guarantees the Trust Fund in any manner against
investment loss or depreciation in asset value.
The following will cause a person to be classified as a "Fiduciary" for purposes
of this Plan and Trust: (1) Exercise of any discretionary authority or discretionary control
respecting the management or disposition of Plan or Trust assets, (2) rendering any investment
advice for a fee or other compensation, or (3) exercise of any discretionary authority or
responsibility for Plan or Trust administration.
10.2 General Fiduciary Duties: All Fiduciaries must discharge their duties solely in
the interest of the Employees eligible to participate and Beneficiaries of the Plan. In addition,
New Hire Restatement
36
Fiduciaries must act exclusively for the purpose of providing benefits to Employees eligible to
participate and Beneficiaries and defraying reasonable expenses of the Plan. They must carry
out their duties with the care, skill, prudence and diligence which a prudent man acting in a like
capacity would use under conditions prevailing at the time. To the extent funds held by the
Trust are not invested pursuant to Participant direction as provided in Section 7.2 hereof,
investments of the Plan shall be diversified so that the risk of loss will be minimized unless this
clearly is not prudent under the circumstances. However, investment in pooled funds will not
violate the diversification rule if the Fund itself is sufficiently diversified.
10.3 Bonding and Insurance: The Trustees, any Investment Manager appointed
pursuant to Section 7.5, and anyone acting as a Fiduciary as described in this Article IX, may be
bonded. The Employer shall obtain Errors and Omissions Insurance in a minimum amount of
$1,000,000 or such higher amount that they deem advisable to protect the Trust Fund.
However, if the Employer does not provide the appropriate amount of insurance, the Trustees
may obtain Errors and Omissions Insurance for such amount as they deem advisable to protect
the Trust Fund. Such insurance and bond premiums and fees may be paid as an expense of the
Trust pursuant to Section 7.14.
10.4 Delegation of Authority: The Trustees shall have the power to delegate specific
fiduciary responsibilities with respect to the control and management of the assets of the Trust
and with respect to the administration of the Plan and Trust by a written agreement between the
Trustees and any such designated person or entity.
ARTICLE XI. MISCELLANEOUS
11.1 Nonguarantee of Employment: Nothing contained in this Plan shall be construed
as a contract of employment between the Employer and any Employee, or as a right of any
New Hire Restatement
37
Employee to be continued in the employment of the Employer, or as a limitation of the right of
the Employer to discharge any of its Employees.
11.2 Rights to Trust Assets: No Employee or Beneficiary shall have any right to, or
interest in, any assets of the Trust Fund upon termination of his employment or otherwise,
except as provided from time to time under this Plan, and then only to the extent of the benefits
payable under the Plan to such Employee out of the assets of the Trust Fund. All payments of
benefits as provided for in this Plan shall be made solely out of the assets of the Trust Fund and
none of the Fiduciaries shall be liable therefor in any manner.
11.3 Nonalienation of Benefits: Except for assignments for child support purposes as
provided for in sections 14-10-118(1) and 14-14-107, C.R.S., as they existed prior to July 1,
1996, for income assignments for child support purposes pursuant to section 14-14-111.5,
C.R.S., for writs of garnishment that are the result of a judgment taken for arrearages for child
support or for child support debt, and for payments made in compliance with a properly
executed court order approving a written agreement entered into pursuant to section 14-10-
113(6), C.R.S., benefits payable under this Plan shall not be subject in any manner to
anticipation, alienation, sale, transfer, assignment, pledge, encumbrance, charge, garnishment,
execution, or levy of any kind, either voluntary or involuntary, prior to actually being received
by the person entitled to the benefit under the terms of the Plan, and any attempt to anticipate,
alienate, sell, transfer, assign, pledge, encumber, charge or otherwise dispose of any right to
benefits payable hereunder, shall be void. The Trust Fund shall not in any manner be liable for,
or subject to, the debts, contracts, liabilities, engagements or torts of any person entitled to
benefits hereunder. The Trust Fund shall be held and distributed for the purpose of this article
and for no other purpose whatsoever.
New Hire Restatement
11.4 Payments to Minors or Persons of Unsound Mind: If any person entitled to
receive any payment hereunder is a minor, or a person of unsound mind, whether formally
adjudicated so or not, such payment shall be made to or for the benefit of such minor or person
of unsound mind in any of the following ways, as the Trustees, in its sole discretion, shall
determine: (a) to the legal representative of such person; (b) directly to such person; (c) to some
near relative of such person; (d) in such other manner as the Trustees may deem appropriate
under the circumstances. The Trustees shall not be required to see to the proper application of
any such payment made to any person pursuant to the provisions of this Section.
11.5 Disposition of Unclaimed Payments: If the Trustees are unable to make any
payment due under the Plan to any person because they cannot ascertain the identity or
whereabouts of such person after making such written or telephonic inquiries as the Trustees, in
their sole discretion, deem reasonable, the Trustees shall suspend all further payments to such
person until he makes his identity or whereabouts known to the Trustees within seven (7) years
after such payment was due. The Trustees shall declare such payment, and all remaining
payments due such person, to be forfeited as of the expiration of such seven-year period.
11.6 Severability of Provisions: If any provision of this Plan is held to be invalid or
unenforceable, such invalidity or unenforceability shall not affect any other provisions, and this
Plan shall be construed and enforced as if such provision had not been included.
11.7 Trust and Plan to be Tax Exempt: The Trust and the Plan are intended to qualify
under Internal Revenue Code Section 401(a) and to be tax exempt under Section 501(a),
respectively, and is a "Governmental Plan" within the meaning of Section 414(d) of the Internal
Revenue Code of 1986, as amended from time to time and Section 3(32) of the Employee
Retirement Income Security Act of 1974. The Plan and Trust have been established with the
expectation that the Trust will be irrevocable and in the belief that the Plan and Trust will be
New Hire Restatement
39
approved by the Internal Revenue Service, as meeting the requirements of the Internal Revenue
Code of 1986 and the Regulations issued thereunder with respect to qualified employee benefit
plans.
ARTICLE XII. AMENDMENT OR TERMINATION OF THE PLAN
12.1 Right and Restrictions: The Employer reserves the right, with the approval of at
least sixty-five percent (65%) of the total votes cast by actively -employed eligible Employees
and all former employees who are entitled to a benefit from the Plan, to amend (retroactively or
otherwise) or terminate the Plan, in whole or in part, or to discontinue contributions thereunder,
provided that no amendment shall have the effect of (1) diverting for the benefit of any persons,
other than Participants or their Beneficiaries, amounts attributable to contributions by the
Employer, or (2) decreasing the nonforfeitable percentage or amount in any Participant's
Aggregate Account. Notwithstanding the foregoing, the Employer shall have the right to amend
the Plan without the approval of Participants, solely for the purpose of incorporating minor,
technical amendments which are required, from time to time, by changes in state or federal laws
or regulations. On the complete or partial termination of the Plan or complete discontinuance
by the Employer of contributions under the Plan, the Accrued Benefit of each of the affected
Participant's Aggregate Accounts shall be nonforfeitable and shall be distributed pursuant to
Section 6.2.
12.2 Merger or Consolidation of the Plan: In the event of any merger or consolidation
of the Plan with, or transfer of assets or liabilities of the Plan to, any other plan, each Participant
shall be entitled to receive a benefit immediately after such merger, consolidation or transfer
(determined as if such other plan had then terminated) which is equal to or greater than the
New Hire Restatement
.O
benefit he would have been entitled to receive immediately before such merger, consolidation or
transfer (if the Plan had then terminated).
ARTICLE XIII. GOVERNING LAW
The Trust contained herein shall be deemed executed and governed under the laws of the
State of Colorado. Should any provision of the laws of the State of Colorado be in conflict with
the express powers, duties and responsibilities of the Trustees as set forth in this instrument, in
such event the law shall control. For the convenience of the parties hereto, this Plan and Trust
Agreement may be executed in multiple identical counterparts, each of which is complete in
itself and may be introduced in evidence or used for any other purpose without the production
of any other counterpart.
This Plan document is the Restated Poudre Fire Authority New Hire Money Purchase
Pension Plan and Trust Agreement effective December 24, 2001.
ATTEST:
Its:
EMPLOYER
POUDRE FIRE AUTHORITY
By:
Its:
TRUSTEES
New Hire Restatement
41
vl.
Old Hire 1St Amendment
Old Hire Restatement 42
Resolution 02-
Adopting the First Amendment to the
Poudre Fire Authority Old Hire Money Purchase Pension Plan
And Trust Agreement as Amended and Restated, Effective December 24, 2001
WHEREAS, the Poudre Fire Authority (the "Employer"), established the Poudre Fire
Authority Old Hire -City Money Purchase Pension Plan and Trust Agreement ("Old Hire -City
Plan"), effective January 1, 1983; and
WHEREAS, the Old Hire -City Plan merged with the Poudre Fire Authority Fire
Protection District Plan to form the Poudre Fire Authority Old Hire Money Purchase Pension
Plan and Trust Agreement as amended and restated Plan (the "Plan"), effective December 24,
2001; and
WHEREAS, pursuant to § 11.1 of the Plan, the Employer has the authority to amend
the Plan without a vote of the actively -employed eligible employees providing the
amendments are minor, technical amendments required from time to time by changes in state
or federal laws or regulations; and
WHEREAS, the Employer deems it advisable to amend the Plan to comply with the
Economic Growth and Tax Relief Reconciliation Act of 2001 (EGTRRA) and with technical
tax requirements requested by the Internal Revenue Service in conjunction with the request
for a determination letter; and
WHEREAS, the Board of Trustees of the Poudre Fire Authority Old Hire Money
Purchase Pension Plan and Trust Agreement have recommended the adoption of the Plan
amendments set forth herein.
NOW, THEREFORE, be it resolved by the Board of Directors of the Poudre Fire
Authority that the Plan is hereby amended, effective January 1, 2002 as follows:
1. ARTICLE II. DEFINITIONS AND CONSTRUCTION, § 2.1 Definitions (e)
Compensation shall be revised to read as follows:
(e) Compensation: A Participant's base salary received from the
Employer for personal services during the Year, but excluding holiday pay,
acting officer pay, longevity pay, bonus payments, payments for unused
vacation, overtime, uniform cleaning and travel allowances, and excluding any
benefits paid under this Plan or any other retirement or life insurance program
or under any other health or welfare plan. For purposes of allocating the
Employer's contribution for the Year in which a Participant begins or resumes
Participation, Compensation shall be determined as of the first day of the year
in which the Employee became a Participant and Compensation before his
Participation began or resumed shall be disregarded. Contributions shall be
made on a Participant's base salary as defined herein, before taking into
account amounts contributed by the Employer pursuant to a salary reduction
agreement which were excludable from the Employee's gross income under
Code Section 125, Code Section 132(f)(4), Code Section 402(a)(8), Code
Section 403(b) or Code Section 402(h) or 457. Effective January 1, 2002,
Compensation in excess of $ 200,000, as adjusted for cost -of -living increases
in accordance with section 401(a)(17)(B) of the Code, shall not be taken into
account under the Plan.
2. ARTICLE II. DEFINITIONS AND CONSTRUCTION, § 2.1 Definitions new
section (r) Leased Employee shall be added, with the subsequent sections to be re -lettered, to
read as follows:
(r) Leased Employee: Any person who is not an employee of the
recipient and pursuant to an agreement between the Employer and any other
person, has performed services for the Employer on a substantially full time
basis for a period of at least one year, and such services are performed under
the primary direction and control of the Employer. Contributions or benefits
provided a leased employee by the leasing organization which are attributable
to services performed for the Employer shall be treated as provided by the
Employer. A Leased Employee or Employee shall not be considered an
employee of the Employer if: (i) such Employee is covered by a money
purchase pension plan providing (1) a non-integrated Employer contribution
rate of at least 10% of Compensation, as defined in Code Section 415(c)(3),
but including amounts contributed by the Employer pursuant to a salary
reduction agreement which were excludable from the Employee's gross income
under Code Section 125, Code Section 132(f)(4), Code Section 402(a)(8),
Code Section 403(b) or Code Section 402(h), (2) immediate participation, and
(3) full and immediate vesting; and (ii) leased employees do not constitute
more than 20% of the Employer's non -highly compensated work force.
3. ARTICLE IV. CONTRIBUTIONS AND FORFEITURES, § 4.2 Contributions by
Participants, (b) Voluntary Contributions is hereby amended by the replacement of the first
sentence to read as follows:
(b) Voluntary Contributions: In order to encourage savings and
investments by Participants, effective January 1, 2002, each Participant
voluntarily may contribute to the Trust an amount not to exceed seventy-two
percent (72%) of Compensation in addition to contributions under
subparagraph (a) of this subsection, and subject to the § 5.3 maximum
additions limit.
4. ARTICLE V. ALLOCATIONS TO PARTICIPANTS' ACCOUNTS, § 5.3
Maximum Additions, shall be revised to read as follows:
5.3 Maximum Additions: Notwithstanding anything contained
herein to the contrary, the total Additions made to the Employer and Employee
Contribution Accounts of a Participant for any Year shall not exceed the
"Maximum Permissible Amount," reduced by the sum of any Additions
allocated to the Participant's accounts for the same Year under any other
defined contribution plan or welfare benefit fund (as defined in Code
Section 419(e)) maintained by the employer. The Maximum Permissible
Amount shall be equal to the lesser of $ 40,000 or 100% of the Participant's
Compensation for such Year, or such amount as provided in §415 of the Code.
(a) The term "Additions" means the total of the Employer
contributions and forfeiture amounts allocated to a Participant's Employer
Contribution Account, plus the amount of any Employee Contributions to the
Plan. Amounts allocated to an individual medical account (as defined in Code
Section 415(1)(2)) included as part of a defined benefit plan maintained by the
Employer are Additions. Furthermore, Additions include contributions paid or
accrued attributable to post -retirement medical benefits allocated to the separate
account of a key employee (as defined in Code Section 419A(d)(3)) under a
welfare benefit fund (as defined in Code Section 419(e)) maintained by the
Employer.
(b) "Addition" does not include "rollovers" from an eligible
retirement plan as defined for the purpose of the direct rollover provisions of
§6.6.
(c) As of January 1 of each calendar year, and applicable for
that Plan Year, the dollar limit may be adjusted for increases in the cost of
living in accordance with regulations prescribed by the Secretary of the
Treasury or his delegate. If such additions exceed the limitation, the
contributions made by the Participant for the Year, which cause the excess,
shall be returned to the Participant. If, after returning the Participant's
contribution an excess still exists, such excess which is attributable to
Forfeitures shall be held in a suspense account. Such account may be
maintained if (1) no Employer contributions are made when their allocation
could be precluded by Code Section 415, (2) no income is allocated to the
account, and (3) amounts in the account are allocated as of each allocation date
on which Forfeitures may be allocated until the account is exhausted. Upon
termination of the Plan, the balance of such account may revert to the
Employer.
(d) For purposes of this section, the limitation year shall
mean the Plan Year. The term "Compensation" means, for purposes of
Sections 5.3 and 5.4 only, a Participant's earned income, wages, salaries, fees
for professional services and other amounts received for personal services
actually rendered in the course of employment with the employer maintaining
the Plan, including cash awards and Elective Contributions, provided,
however, that for Plan Years beginning before January 1, 1998, such amounts
shall not be included in Compensation for the purpose of applying the
limitations on allocations and benefits under Code Section 415. "Elective
Contributions" are amounts excludible from an Employee's gross income under
Code Sections 125, 132(f)(4), 402(e)(3), 403(b), 402(h)(1)(B), or 457, or any
other Elective Deferrals as defined in Code Section 402(g)(3).
5. ARTICLE VI. BENEFITS, § 6.6 Direct Transfers and Rollovers, paragraphs two
and three shall be amended to read as follows:
An eligible rollover distribution is any distribution of all or any portion
of the balance to the credit of the Participant, except that an eligible rollover
distribution does not include: (i) any distribution that is one of a series of
substantially equal periodic payments (not less frequently than annually) made
for the life (or life expectancy) of the distributee or the joint lives (or joint life
expectancies) of the distributee and the distributee's designated Beneficiary, or
for a specified period of ten years or more; (ii) any distribution to the extent
such distribution is required under Code Section 401(a)(9); and (iii) the portion
of any distribution that is not includible in gross income (determined without
regard to the exclusion for net unrealized appreciation with respect to employer
securities). For purposes of the direct rollover provisions in this § 6.6, a
portion of a distribution shall not fail to be an Eligible Rollover Distribution
merely because the portion consists of after-tax employee contributions which
are not includible in gross income. However, such portion may be transferred
only to an individual retirement account or annuity described in Code § 408(a)
or (b), or to a qualified defined contribution plan described in Code § 401(a) or