Board of Directors Regular Meeting Agenda


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Meeting Date: 11/20/2013  

SUBJECT MATTER:
Receive, consider and act upon award of retirement benefits analysis for Township retirement benefits;
FISCAL IMPACT:
$9,000, which is not specifically included in the 2013 Budget, however funds for consulting services are available in the Human Resources Department budget for this expenditure
BACKGROUND:
At the October Board Meeting, staff was directed to release a Request for Proposal for Retirement Benefits Analysis by the Board.  The analysis is intended to answer the following questions:

• How do the Township’s retirement benefits compare to those offered by other comparable government entities in Texas?
• What changes, if any, should the Township consider making to its retirement benefits in order to:
o Decrease employee investment risk and/or increase retirement payout
o Improve the Township’s ability to attract and retain quality personnel
o Continue to avoid unfunded liabilities
o Improve cost effectiveness

The proposal was released on October 30, 2013, and responses were due back on November 12, 2013.  The RFP was emailed to actuarial firms who had responded to a similar RFP for the proposed TLFFRA plan in 2012, and posted on the Township website.  Four responses were received:  Gallagher Benefits Services, Segal Consulting, Retirement Horizons, Inc., and Frost HR Consulting.

The proposals were reviewed by the Director of Human Resources and scored based on the following criteria:

25% Experience in retirement benefits analysis
15% Knowledge of employee retirement benefits
15% Years of consulting experience and qualifications
10% Previous history with public sector entities
5% Lead consultant’s involvement
20% Pricing scale of services
5% Familiarity with The Woodlands/The Woodlands Township
5% References
The decision matrix used to score each of the respondents is attached for your review.

Using a scale from 1 – 5, the vendors were ranked in the following order:
Retirement Horizons 5.0
Gallagher Benefits Services 4.85
Segal Consulting 4.30
Frost HR Consulting 3.80
Costs for performing the scope of services ranged from $55,000 to $9,000 (two firms each bid $9,000).  The proposals are attached for your review.

Retirement Horizons was formed as a Texas corporation in 1998 and now has 28 employees in three locations in Texas including Dallas, San Antonio and The Woodlands.  RHI approaches every actuarial assignment with a commitment to client service, grounded in generally accepted actuarial principles and practices.  Their consulting style is personalized and interactive, combining strong technical knowledge with excellent listening skills and a “plain English” communication style.  RHI has performed an actuarial analysis for The Woodlands Township in 2012, and their clients also include the city of Houston, Houston METRO, Houston Housing Authority and the Houston Firefighters Retirement System.

RHI proposed costs not to exceed $9,000 to conduct the scope of services and to complete this work within 90 days.  The Township and Retirement Horizons had previously entered into a Consulting Agreement which was reviewed by legal counsel prior to execution.  If RHI is selected to perform the retirement benefits analysis, they propose to add an addendum to the previous Consulting Agreement, rather than creating a new agreement.
RECOMMENDATION:
Approve the selection of Retirement Horizons, Inc. to perform a Retirement Benefits Analysis and authorize the President/General Manager to execute an addendum to the Consulting Agreement.
Attachments
RFP Decision Matrix
Retirement Horizons Proposal
Gallagher Benefits Proposal
Segal Consulting Proposal
Frost HR Consulting Proposal


    

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