When evaluating and developing an RFP, you should always
insist on the following elements:
1. A Fixed Fee. Don’t be fooled. Some firms only provide per plan
fee quotes. This can lead to an unpleasant surprise when you receive the bill for the
GASB 45 services. In a recent discussion with a school board, we learned that a well
known actuarial firm had quoted a fee of $5,000 per year. After further discussion
with the firm, the school learned that the actual bill for the services would be around $30,000.
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2. Clear Scope of services to be provided. Make sure that the firm you are considering understands the services you need.
Look for this in the scope section of the proposal they provide to you. Assume
that if it is not in the proposal, there will be an additional cost. Click to Request RFP Template
3. Roll
Forward Valuations. GASB 45 permits biennial
valuations. This means that the bulk of your GASB 45 work will not need to be performed annually.
This can add up to cost savings or additional costs if not accurately considered. Be
sure that the firms you are considering have justified the need for full valuations and have not overlooked and opportunity
to save your organization valuable time and resources. Compare each firms
total costs with respect to roll forward opportunities before making a final decision. Click
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4. Experience of the
Engagement Team. Insist that the members
of the engagement team have relevant operational experience. This experience can help
to minimize the level of effort needed by your organization as it implements GASB 45. Click
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5. Be Aware of Hidden
Costs. Is the firm you are considering
going to assist you with the implementation or will they simply wait for you to provide a data extract to run your projections? Your answer to this question will impact the fee quote and the total cost to your organization
as it implements GASB 45. Many organizations do not have the human resources available
to effectively implement GASB 45. This can lead to additional costs for items such
as consultants, staff over time and even additional charges from outside auditors. Click
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Be careful in selecting your actuarial firm. Make sure
you know what you will be paying when the final bill arrives. Be aware of the level
of services to be provided. Read between the lines and look past the quoted fee to
make implementing GASB 45 a positive experience for your organization.
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to Request RFP Template