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NORTH CAROLINA DEPARTMENT OF STATE TREASURER

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NORTH CAROLINA DEPARTMENT OF STATE TREASURER Powered By Docstoc
					                 NORTH CAROLINA DEPARTMENT OF STATE TREASURER
                           REQUEST FOR QUALIFICATIONS
                     INVESTMENTS, FIDUCIARYAND TAX COUNSEL

                                    QUESTIONS AND ANSWERS
1. Can you provide the projected range of fees for each area (Tax, Fiduciary, and
   Investments Counsel)?

   Tax, Fiduciary and Investments counsel will be utilized on an as-needed basis. We are
   unable to accurately estimate the projected range of fees for each area.

2. Pertaining to the Format and Method of Submissions found in the RFQs and in the
   Procurement Process, can you please clarify the method of submission?

   Please follow the format and method of submissions instructions found in the RFQs.

3. Regarding information that the respondent clearly identifies as proprietary or trade secret,
   will the Department notify the respondent prior to any potential disclosure by the
   department (whether such potential disclosure is voluntary or is to be made pursuant to a
   North Carolina Public Records Law request) and permit the respondent the opportunity to
   assert such information as “trade secret” protected from disclosure under the N.C. Public
   Records Law?

   All submissions are subject to Chapter 132 of the North Carolina General Statutes. If
   any portion of the respondent’s submission contains proprietary or trade secret
   information, see N.C.G.S. § 66-152(3), the respondent is responsible for clearly
   identifying limited sections as such.
   The Department will notify a respondent prior to any potential disclosure of responses to
   the RFQ in response to a public records request. Where necessary, the respondent may
   assert that certain information is “trade secret” and not subject to disclosure.
4. What information should be included in a response to the RFQ relating to a joint-venture
   proposal with minority-women-owned firms?

   Respondents should provide the same information regarding a joint-venture as they
   would if the respondents were an independent firm responding to the RFQ.

5. May a respondent firm submit a joint venture proposal with a minority- or women-owned
   firm that did not submit an Expression of Interest by the due date?

   Yes.

6. Item III.C of the RFQ suggests that a respondent must list and describe all transactions
   meeting certain criteria handled by the respondent in the past five years. Where such


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   transactions are numerous, is there a number after which the Department does not care to
   have additional transactions listed a representative list would be preferred?

   A representative list of transactions may be provided.

7. Is membership in the North Carolina State Bar a condition to providing legal services under
   an implementation contract?

   The RFQs do not condition the provision of legal services under an implementation contract
   on membership in the North Carolina State Bar.

8. Do you have an estimate of how often you expect fiduciary counsel to be present in North
   Carolina to provide in-person legal advice and/or to appear before the General Assembly or
   its committees?

   Fiduciary counsel will be requested to provide in-person legal advice on an as-needed basis.
   Fiduciary counsel for the Supplemental Retirement Plan may be requested to attend all
   board meetings.

9. Has the Department historically had different counsel for fiduciary, tax and investment issues
   with respect to the pension plan? What does the Department perceive to be the advantages of
   this arrangement? Does it perceive any disadvantages?

   The Department currently uses outside investments counsel. The Department currently does
   not have designated fiduciary and tax counsel. The retention of fiduciary counsel that is
   independent of investments counsel is a “best practice” among public pension plans.

10. The fiduciary counsel RFP says the Department is seeking “fiduciary and legislative
    counsel.” In what ways do you anticipate fiduciary counsel will provide advice regarding or
    otherwise be involved with legislative matters?

   The Department anticipates that fiduciary counsel will provide advice regarding compliance
   with and potential changes to the statutes governing the Department and the Supplemental
   Retirement Plan.

11. The fiduciary counsel RFP anticipates that fiduciary counsel will advise on investment
    policies but not investment transactions. The investment counsel RFP anticipates that
    investment counsel will not advise on fiduciary issues. To the extent you agree that certain
    investment transactions could raise fiduciary issues, who will advise the Department on those
    issues?

   In-house attorneys with the Department will monitor the work of investments counsel and
   fiduciary counsel. If a fiduciary issue arises on an investment transaction, we expect that the
   investments counsel will bring that matter to the attention of the in-house attorneys. The in-
   house attorneys will determine how that issue should be addressed, and whether the advice
   of fiduciary and/or investments counsel is necessary.

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12. Of the asset allocation for the pension fund, what areas result in the highest concentration of
    your legal needs?
   The asset allocation for the pension fund, including the size of each asset class and
   permissible types of investments within each asset class, is set by the General Assembly. See
   N.C.G.S. § 147-69.2(b). New transactions for each asset class are executed based on the
   investment strategies for each asset class and the current size of the asset class, which is
   governed by statute.

13. How does the Department address conflicts from the standpoint of investment counsel who
    also may be providing representation to private equity and venture funds? To the extent that
    the Department is considering investment in such a fund, would that preclude our firm from
    representing the Department?

   Conflicts matters will be addressed on a case by case basis. We would anticipate that if, for
   example, law firm “A” represents private equity or venture fund (“Y”), law firm “A” would
   not advise the Department on an investment transaction or in other dealings with fund “Y.”

14. Are there any limitations on the size of investments, control position and/or co-investment
    partners?

   The asset allocation for the pension fund, including the size of each asset class and
   permissible types of investments within each asset class, is set by the General Assembly. See
   N.C.G.S. § 147-69.2(b).

15. Are there determination letters covering the qualified retirement plans?

   Yes.

16. Are there any determination letter requests pending?

   No.

17. Have the various systems and 401(k) Plan received in the past determination letters from the
    Internal Revenue Service on the tax qualified status of the Plans?

   Yes. See response to Question 15.

18. Were applications filed for determination letters in the IRS "Cycle C" period ending January
    31, 2009, or will Tax Counsel retained pursuant to the RFQ be asked to submit during the
    IRS "Cycle E" period ending January 31, 2011?

   No applications were filed in the IRS “Cycle C” period. (See response to Question 15.)
   We anticipate using the Voluntary Compliance Program to undertake IRS review of
   amendments to the plans administered by the Department.


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19. Please provide the name(s) of the law firm(s) and specific attorneys who have been providing
    the requested services (Investment Counsel, Fiduciary Counsel and Tax Counsel) for the past
    five (5) years.

   Ken Shelton, Womble, Carlyle, Sandridge & Rice, PLLC, has served as investments counsel
   to the Department. The Department currently does not have designated fiduciary and tax
   counsel.

20. Please provide a copy of the minutes of that portion of the meeting and any staff
    recommendation in which it was recommended and determined to request these RFQ
    responses.

   The staff recommendation to issue RFQs for investments, fiduciary and tax counsel is not
   reflected in any meeting minutes.




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