STATE OF MARYLAND
Request for Proposals
COLLEGE SAVINGS PLANS OF MARYLAND
ACTUARIAL SERVICES
RFP ISSUE DATE: December 15, 2009
RFP Issuing Office: College Savings Plans of Maryland
217 E. Redwood Street; Suite 1350
Baltimore, Maryland 21202
Procurement Officer: Ms. Carol Kaiser, Chief Financial Officer
College Savings Plans of Maryland
Office Phone: 443-769-1021
Fax: 410-333-2295
e-mail: ckaiser@collegesavingsmd.org
Proposal(s) are to be sent to: College Savings Plans of Maryland
217 E. Redwood Street, Suite 1350
Baltimore, Maryland 21202
Attention: Carol Kaiser
Due: Monday, January 11, 2010 by 5 p.m.
This Request for Proposals (RFP) invites firms to submit proposals to the College Savings Plans of Maryland for the provision of actuarial and consultative services to the College Savings Plans of Maryland. Proposals must substantiate in detail and demonstrate the firm’s ability to provide such services for the College Savings Plans of Maryland (CSPM) as outlined in this RFP. Such services include actuarial studies and projections and periodic evaluations of the MPCT as requested by CSPM.
BACKGROUND
The College Savings Plans of Maryland was originally created under the Enabling Legislation as the Maryland Higher Education Investment Program by the 1997 Maryland General Assembly. CSPM is administered by a 10 member Board consisting of the State Treasurer, the State Comptroller, the Secretary of Higher Education, the State Superintendent of Public Schools, the Chancellor of the University System of Maryland and five citizen members appointed by the Governor.
CSPM offers two 529 Plans: the Maryland Prepaid College Trust that lets families lock in one semester to five years of future college tuition at today’s prices and is backed by a Maryland legislative guarantee; and the Maryland College Investment Plan that currently offers 14 no-load investment options and is currently managed and distributed by T. Rowe Price Associates, Inc.
Each plan is based on a different savings strategy, and each offers distinct benefits. The staff of CSPM administers all aspects of the MPCT and oversees and administers the Board’s contract with the program manager of the MCIP.
The State’s primary goals in offering these services is to enhance the accessibility and affordability of higher education for all citizens of the State and for all citizens of the District of Columbia by establishing a method to provide for the prepayment of tuition at eligible institutions of higher education and to allow contributions to an investment account established for the purposes of meeting the qualified higher education expenses of the beneficiary of an account.
The MPCT currently has in excess of 30,000 accounts, which are maintained on an automated database. This system contains information in regards to the individual account and its status, the purchaser, the beneficiary, benefits accrued and used, as well as other demographic information.
The MPCT has conducted twelve enrollment periods, the most recent concluded on April 6, 2009. To date, the MPCT has received more than 30,000 enrollments. The MPCT currently has nearly $445 million in invested assets.
The MCIP opened to participants on December 10, 2001. It is open for enrollment year-round. Through June, 2009, approximately 74,000 investors had opened more than 136,000 accounts for more than 112,000 beneficiaries, with more than $1.5 billion in invested assets.
The MPCT and the MCIP are marketed jointly as two options under the umbrella of the CSPM, since families can choose to enroll in either plan or both plans. In addition, many families do not understand the similarities and differences between the two plans, so marketing both plans together allows families to understand each plan prior to making their enrollment decision.
Complete details on these plans can be obtained at the CSPM website at www.collegesavingsmd.org.
GENERAL SCOPE OF WORK
CSPM seeks a Contractor to provide actuarial services to meet the needs of CSPM on the terms set forth in this RFP. The actuary shall provide the services detailed below and shall have documented and demonstrated experience in providing such services in similar applications. Generally, the actuary will be expected to develop actuarially based pricing alternatives for the Board’s review, address issues related to the maintenance of the Trust, and provide periodic evaluations certifying the actuarial soundness of the Trust.
Given that a Section 529 prepaid tuition program has certain unique characteristics, the Board seeks to contract with an actuary who is knowledgeable in all phases of structuring and evaluating factors and circumstances relevant to the operation of a prepaid tuition program. The scope of the engagement shall include, but will not be limited to the following: preparation of an annual actuarial evaluation of the Trust’s soundness, preparation of an actuarial analysis leading to the annual pricing of the contracts to be offered in the Trust’s annual enrollment periods; and provide advice the Board as to the structure of prepaid tuition contracts which will be offered during the Trust’s enrollment periods.
The actuary will be expected to keep the Board abreast of any and all developments pertaining to prepaid tuition plans nationally and the impact of these developments on the State of Maryland’s plans. The actuary will conduct an actuarial study to determine the status of the Trust and the pricing of the contracts required to ensure that the Trust remains actuarially sound. This study will be performed no less than annually.
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