We wish to provide two points of clarification with regard to Pensions & Investments' Nov. 1 "Nationwide vs. Great-West" article, which concerns the plan administrator selection process for the Los Angeles Deferred Compensation Plan:
1. The article accurately states that Great-West proposed a $25 per participant investment advice fee that would only apply to participants who actually elect to use the service. Alternatively, we had previously discussed with the board the option of including the cost of investment advice in the basic fee, rather than just charging users of the service. Based on the utilization rates we discussed with the board, this alternative would add an across-the-board $2.50 to our base fee of $47.50. Under this option, our fee would be $50 per participant vs. the $59 per participant proposed by Nationwide. Great-West believes that either option presents a significant cost advantage over Nationwide.
2. Mr. McCleave of Nationwide fails to point out that Great-West outscored Nationwide in both the consultant evaluation and the staff evaluation. The staff evaluation awarded Great-West a score of 875.6 vs. 842.4 for Nationwide. The consultant evaluation awarded Great-West a score of 809.9 vs. 709.7 for Nationwide. Both evaluations were independent and used scoring criteria previously specified by the board members.
Given these facts, it's certainly understandable that people would question the outcome of the bid process. Consequently, we appreciate Ms. Feinberg's and P&I's ongoing coverage of this issue, and just as important, we applaud the actions taken by the City Council, the union and thousands of city employees who are committed to ensuring that the bid process results in the selection of the provider that best serves the interests of the plan and its participants.
Gregory E. Seller
senior vice president
Great-West Retirement Services