403(b) Plan Consolidation for Petersburg City Public Schools
Discover how Petersburg City Public Schools aimed to consolidate their 403(b) retirement plan with key vendors like AXA Equitable and VALIC. Learn about the RFP process, goals, and criteria for selecting a provider to enhance plan services and participant experience.
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Presentation Transcript
403(b) Plan PETERSBURG CITY PUBLIC SCHOOLS OCTOBER 3, 2018
403(b) Background Information A 403(b) plan is a retirement plan for certain public school employees Although the VRS provides retirement benefits, this Plan is offered to employees as an optional supplemental plan Currently participant assets are invested across eight (8) vendors Of the eight, AXA Equitable, First Investors (PenServ) and VALIC are the most prevalent; none of the five other vendors have more than 10 participant balances AXA = $1.9 million, 62 participants with balance First Investors = $668 thousand, 62 participants with balance VALIC = $2.3 million, 230 participants with balance Approximately $315,000 in distributions last year
RFP Process and Goals PCPS desired to consolidate the 403(b) program under one vendor Reduction of plan sponsor responsibilities relating to coordination among vendors Simplification of service provider fee monitoring Streamlining of investment options, facilitating improved participant behavior and limiting investment monitoring responsibilities
RFP Process and Goals PCPS conducted a provider search (RFP) the with following goals in mind: Improved servicing for both PCPS and plan participants Outsourcing and automation of plan administrative tasks where possible Enhanced participant enrollment/education services, whether in-person or multimedia Intuitive website for participants and administrators Competitive fees considering overall value proposition Streamlining of investment options combined with increased flexibility in regard to selection
RFP Process and Goals Initially requested proposals from 9 providers, all of whom declined to proposed PCPS reissued the RFP to AXA Equitable, PenServ, and VALIC as they are the Plan s top 3 current providers PenServ was removed from contention due to a lack of scale in the public school market and other considerations
RFP Process and Goals AXA Equitable and VALIC were scored according to the criteria set forth in the RFP Factor Quality of Plan Administration Services Commitment to/Quality of Employee Education Program Breadth, Depth and Quality of Investment Platform Quality of Services for Plan Participant Cost for PCPS and Plan Participants Performance and Cost Guarantees Offeror s Credentials (Experience, Financial Stability, etc.) Quality of Proposal and Overall Responsiveness of Offeror Grand Total Points 10.0 20.0 10.0 10.0 20.0 15.0 10.0 5.0 100.0 VALIC received the top score
Next Steps Notification to VALIC of contract award with a go live date of 1/1/2019 Any participant may leave their asset balances with their current provider, but all new contributions beginning 1/1/2019 must be made to a VALIC account VALIC will work with each participant to ensure options are discussed and decisions made prior to the go live date One of our primary goals is to have more participants in the program; VALIC has committed to an educational program to assist our employees with understanding the benefits of this supplemental retirement plan
