PROVIDENCE, R.I. — General Treasurer Gina M. Raimondo today announced that the state has received 12 proposals from vendors seeking to run Rhode Island's new defined contribution program. In the coming months, Rhode Island will develop and launch this new program as mandated in the recently passed Rhode Island Retirement Security Act. The program will be a core part of each employee's retirement plan and is intended to provide a secure source of retirement benefit, in addition to their pension benefit.
"The state remains committed to an open and transparent process as selection begins to hire a service provider," Raimondo said. "Our goal is to choose a provider whose priorities are low-cost and secure investment products, as well as strong and dependable customer service."
In total, the state received 12 responses from the following firms: VALIC, ACS, TIAA CREF, Prudential, Fidelity, Mass Mutual, ICMA-RC, Great-West, ING and Nationwide. Mass Mutual submitted two proposals with two advisor firms (Tim Ludwig of Legacy Financial Group and John Thompson of JWTI), each offering separate education services. J.W. Thompson Investments also submitted a separate proposal for investment education and communications services.
Proposals should include detailed answers in the following areas:
- Robust investment options and management
- Efficient plan administration and record keeping
- Effective member communication and education mechanisms
- Comprehensive retirement planning
- Fees and expenses
The proposals are under review by members of the State Investment Commission, Treasury staff and Segal Advisors, the consultant for the defined contribution RFP process.
Most Rhode Island state employees, teachers and municipal employees participating in the Municipal Employees Retirement System (MERS) will be required to contribute to the defined contribution program. It is estimated that the plan will initially cover approximately 30,000 government employees, and that annual contributions will be in the range of $100 million to $150 million.
The State Investment Commission is expected to approve a final choice by March 1, 2012. The new program will take effect on July 1, 2012.