Department of Buildings and General Services
Agency of Administration
Office of Purchasing & Contracting
109 State Street
Montpelier VT 05609-3001
REQUEST FOR PROPOSAL
INVESTMENT RECORDKEEPING SERVICES
QUESTIONS DUE BY:
RFP RESPONSES DUE BY:
May 28, 2020
June 12, 2020 3:30PM
July 10, 2020, 4:30PM
BE ADVISED THAT ALL NOTIFICATIONS, RELEASES, AND ADDENDUMS ASSOCIATED WITH
THIS RFP WILL BE POSTED AT:
THE STATE WILL MAKE NO ATTEMPT TO CONTACT INTERESTED PARTIES WITH UPDATED
INFORMATION. IT IS THE RESPONSIBILITY OF EACH BIDDER TO PERIODICALLY CHECK THE
ABOVE WEBPAGEFOR ANY AND ALL NOTIFICATIONS, RELEASES AND ADDENDUMS
ASSOCIATED WITH THIS RFP.
RFP Revised February 21, 2020
This Request for Proposal (“RFP”) is issued by the Office of the State Treasurer to secure services for
the recordkeeping of data associated with investments on behalf of the Vermont Pension Investment
Committee (“VPIC”). VPIC is a public body formed by Vermont Statute 3 V.S.A. § 522, that acts within its
scope on behalf of the Vermont State Employees' Retirement System (VSERS), Vermont State
Teachers' Retirement System (VSTRS), and the Vermont Municipal Employees' Retirement System
(VMERS), responsible for the investment of approximately $4.8 billion in pooled pension fund assets.
Below is the VPIC organizational chart and helpful links:
RFP Revised February 24, 2020
HELPFUL STATE LINKS
VPIC General Information
VPIC Asset Allocation
VPIC Board Information
VPIC Investment Policies
VPIC Environmental, Social & Governance Materials
The Vermont Treasurer’s ESG Report
The VPIC utilizes a master custodian, JPMorgan Chase Bank, to provide a variety of custody, record
keeping, securities lending (although not actively today), and cash management services. The Attorney
General’s office acts as the VPIC’s Legal Counsel.
The primary objective of the VPIC is to strive to maximize the total return on investment, within
acceptable levels of risk and liquidity for public retirement systems, in accordance with the standards of
care established by the prudent investor rule under 14A V.S.A. §902. Specifically, in making investments
for the Retirement Systems, the members of the VPIC shall exercise “reasonable care, skill, and caution”
and “invest and manage trust assets as a prudent investor would, by considering the purposes, terms,
distribution requirements, and other circumstances of the trust.” Specific responsibilities include:
• Allocation of assets
• Selection and oversight of pension consultant(s) and custodian bank
• Selection and oversight of investment managers
• Establishment of appropriate investment policies and guidelines
• Communication with the Treasurer’s office regarding all matters relating to investment of the
As noted in the Organizational Chart above, the Committee has a small professional staff, operating out
of the Treasurer’s office per Statute to develop, implement, and monitor a prudent investment program,
consistent with the Committee’s Investment Policy Statement. Staff and VPIC have historically relied on
Excel, Access and Bloomberg PORT for investment recordkeeping service needs.
As the VPIC portfolio and the use of illiquid private market strategies has grown, and as actuarial
characteristics of the three underlying plans have evolved, the Treasurer’s office is now seeking to
upgrade its investment recordkeeping capabilities through this RFP process to assist its professional staff
in the following Service Categories:
1. Data Management
2. Performance Services
3. Asset Allocation Tracking and Trade Assistance
4. Holdings Transparency
The anticipated scope of each Service Category is detailed in Section 2, “Detailed Requirements/Desired
Outcomes” of this RFP. Instructions for submitting proposals are outlined in the following pages.
1.2. CONTRACT PERIOD Contracts arising from this RFP will be for a period of five years with an option
to renew for two additional five-year periods. The State anticipates the start date will be May 31, 2020.
1.3. SINGLE POINT OF CONTACT All communications concerning this RFP are to be addressed in
writing to the State Contact listed on the front page of this RFP. Actual or attempted contact with any
other individual from the State concerning this RFP is strictly prohibited and may result in disqualification.
1.4. QUESTION AND ANSWER PERIOD Any bidder requiring clarification of any section of this RFP
or wishing to comment on any requirement of the RFP must submit specific questions in writing no later
RFP Revised February 21, 2020
than the deadline for questions indicated on the first page of this RFP. Questions may be e-mailed to the
point of contact on the front page of this RFP. Questions or comments not raised in writing on or before
the last day of the question period are thereafter waived. At the close of the question period a copy of all
questions or comments and the State's responses will be posted on the State’s web site
http://www.bgs.state.vt.us/pca/bids/bids.php Every effort will be made to post this information as soon as
possible after the question period ends, contingent on the number and complexity of the questions.
1.5. MINIMUM BIDDER QUALIFICATIONS The Contractor must meet the following minimum client
base and experience requirements as of February 29, 2019:
1.5.1.At least two (2) pension plans with combined total plan assets of at least $500 million and similar
complexity to the State with whom the Contractor has contracted for at least two (2) consecutive
1.5.2.The proposed team members to be assigned to the State have authorizations, permits, licenses of
certifications required by the Federal government and Vermont laws and regulations to perform
services outlined in this RFP.
1.5.3.All documents, reports, computer software, paper and other materials (“records”), except for records
generally available in the public domain, shall be deemed and shall remain exclusive property of the
2. DETAILED REQUIREMENTS/DESIRED OUTCOMES
In all work and activity conducted by the Contractor in performance of the awarded Contract, Contractor
shall discharge its duties solely in the best interest of the State, and coordinate with and support VPIC’s mission
and standards, and apply industry best practices and a high standard of care.
In each “Service Category” description below, all items and descriptions of work shall be understood to be
performed or completed by the Contractor awarded this contract.
2.1. Service Category 1: Data Management
2.1.1.Create and manage the data supply chain, particularly the investment manager and custodian
2.1.2.Reduce the time to reconcile the custodian and investment manager data through automation and
provide data quality checks across the VPIC composite and sub-plans (VSERS, VSTRS, VMERS).
126.96.36.199. Review data submitted by individual investment managers and report any variances
greater than the State-established tolerance of 20 bps from that reported by the State’s
custodian. The Contractor shall take steps to review the data for reasonableness. Any variance
outside State-established tolerance shall have reporting capabilities to look-through to the
cause of the discrepancy (see “Section 6.8 Attachments: I” for an example of a current
188.8.131.52. Quarterly report reconciling the contractual fee of each investment fund to that invoiced or
aggregated out of the fund balance.
184.108.40.206. Daily report checking the cash balances within each investment fund to ensure no
overdrafts or unusual cash movements occurred the prior day or overnight.
2.2. Service Category 2: Performance Services
2.2.1.For separate accounts, provide a daily report for the month-to-date performance calculation.
2.2.2.On a monthly basis provide a summary performance analysis of individual managers, their
corresponding benchmarks, analysis of allocated portfolios, and the designated composite returns
(see “Section 6.8 Attachments: II” for example of current report).
220.127.116.11. Plan composite return performance shall be measured using a money-weighted rate of
return, with a preference for the Internal Rate of Return (IRR) methodology, which shall account
for external Plan cash flows on the value dates of the flows. Investment manager and composite
return performance shall be calculated using a time-weighted methodology, given there is a
need to neutralize the effect of external cash flows to evaluate active management prudently.
RFP Revised February 21, 2020
18.104.22.168. All return calculations shall be in both gross and net, but the report shall be net of fees.
22.214.171.124. Performance shall be calculated for a monthly, quarterly, year to date, fiscal year to date,
three-year, five-year, seven-year, and ten-year period, as they become available.
126.96.36.199. Risk statistics and fee information shall be included in the report. Risk statistics include the
Sharpe ratio and standard deviation.
188.8.131.52. The report should provide a line with the variance between the benchmark and the
investment manager performance for each given period.
184.108.40.206. Performance calculations will use the custodian NAV.
2.2.3.Provide a monthly comparison report of calculated performance versus the reported performance
from investment managers. Highlight variances above a State determined threshold.
2.2.4.Service Category 3: Asset Allocation Tracking and Trade
Asset Allocation Tracking
220.127.116.11. The Contractor will perform a daily analysis measuring the assets allocated to each
investment manager for the VPIC and each of the underlying sub-plans (VSERS, VSTRS,
This measurement will incorporate daily cash balances sent from the custodian,
individual trades and cash transfers, and updated holdings information received from
commingled managers intramonth.
18.104.22.168. Provide a view that displays the assets allocated to each composite compared to its policy
target allocation. Provide filters to view this display at the rolled-up composite level and with all
the underlying investment manager funds within each composite (see “Section 6.8 Attachments:
III” for example of current report unfiltered).
22.214.171.124. Provide display assessing asset allocation versus policy targets and recommend trades in
and out of investment management funds.
Allow State to enter potential trades to assess the changes to the portfolio at the
Calculate asset allocation of all composites and investment management funds
versus policy target if potential trade is completed (see “Section 6.8 Attachments: IV” for
example of current view used by the State).
Populate trade documents specific to the State (see “Section 6.8 Attachments: V”
for an example of a current trade document) once a trade has been designated for
Provide a secure trade approval system that uses electronic signatures of
designated individuals. This system should also include a notification and workflow
tracking feature that allows designated individuals to see who has approved the trade and
who has yet to complete the review. Security features must be built into this system that
identify the individual performing the review.
2.2.5.Service Category 4: Holdings Transparency
126.96.36.199. Provide top-down look through capability from the unitized NAV received from the
custodian and the underlying holdings received from investment managers for commingled
funds and the custodian for separate accounts.
The views required would be for VPIC and the underlying sub-plans (VSERS,
VSTRS, VMERS) and include the following filters: Composites, asset classes, investment
managers, underlying security holdings.
188.8.131.52. Provide reports that aggregate the underlying attributes of the holdings by geography,
industry, sub-industry, currency, and, where applicable, years to maturity and rating.
2.2.6.Future Scope of Work Desired
Create a report evaluating underlying security holdings for compliance with contractual
investment guidelines and reporting any variances on a daily basis.
RFP Revised February 21, 2020