- Background
For individuals interested in retirement planning, there are a variety of software packages available from a number of sources including websites, financial advisors and specialty vendors. However, these packages are far from uniform in their required input, methodology and resulting recommendations. In 2003, the Society of Actuaries (SOA) and LIMRA International, in collaboration with the International Foundation for Retirement Education (InFRE), published a study that explored prevailing retirement planning software packages with particular emphasis on how they treat post-retirement risks. The goal of the original study was greater understanding of this treatment of post-retirement risks and how it might be improved.
Download the 2003 report.
With the passage of four years and advances in the software packages, an update to the 2003 study is particularly relevant. Consequently, the SOA, the Actuarial Foundation, and NAVA have joined together in seeking researchers to produce an update to the 2003 study.
- Research Objective
The objective of this effort is to investigate a variety of financial planning software tools and compile a report on the approaches taken to address various risks, particularly post–retirement risks. The examination should cover how these risks are treated for individuals and couples in differing circumstances. Respondents to this request for proposals are strongly encouraged to read the prior report as a framework for the desired result of the updated study. For further background on the motivation of the study, respondents may wish to review other reports produced by the SOA's Committee on Post Retirement Needs and Risks. The mission of this Committee is to initiate research and advance knowledge in the area of risks faced by retirees and near retirees. These reports can be found on the following Research Projects in Pension page.
In regards to the methodology used to evaluate the software, respondents are free to propose approaches that are different than the 2003 study or employ the same ones. In either case, proposals should clearly state the intended methodology. Note that an approach in the 2003 study was to use several case studies to represent examples of differing financial circumstances. These case studies were constructed with help from financial planners and cover a range of real life situations. If case studies are not included in the methodology for testing the software, then proposals should explain how a range of financial situations will be identified and covered.
It is important to note that the study is not intended to be a buyer's guide or Consumer Reports–style evaluation of retirement planning software packages. The characteristics of any individual software package will not be described in a manner such that a reader could identify the software package by name. However, a list of all software evaluated will appear as an exhibit in the final report.
In addition, the issues identified may be used to provide education for consumers on considerations for using retirement planning software. As well, a desired outcome of the project is that it ultimately encourages software vendors to make future improvements to their products.
- Proposal
To facilitate the evaluation of proposals, the following information should be submitted:
- Resumes of the researcher(s), including any graduate student(s) expected to participate, indicating how their background, education and experience bear on their qualifications to undertake the research. If more than one researcher is involved, a single individual should be designated as the lead researcher and primary contact. The person submitting the proposal must be authorized to speak on behalf of all the researchers as well as for the firm or institution on whose behalf the proposal is submitted.
- An outline of the approach to be used, emphasizing issues that require special consideration. Details should be given regarding the techniques to be used, collateral material to be consulted and possible limitations of the analysis.
- Cost estimates for the research, including computer time, salaries, report preparation, research costs, etc. Such estimates can be in the form of hourly rates, but in such cases, time estimates should also be included. Any guarantees as to total cost should be given and will be considered in the evaluation of the proposal. While cost will be a factor in the evaluation of the proposal, it will not necessarily be the decisive factor. Note that at present, the funding organizations have budgeted approximately $45,000 for this project. If bids are submitted in excess of that amount, additional funding partners may need to be sought and/or the project may no longer be feasible.
- A schedule for completion of the research, identifying key dates or time frames for research completion and report submissions.
- Ideas regarding the form and distribution of the final report, both for immediate release and for permanent reference (e.g., submission to North American Actuarial Journal, Society of Actuaries Monograph Series, CD ROM).
- Other related factors that give evidence of a proposer's capabilities to perform in a superior fashion should be detailed.
- Selection Process
The SOA, the Actuarial Foundation and NAVA are responsible for the selection of the proposal to be funded. Input from other knowledgeable individuals also may be sought, but the organizations will make the final decision. A SOA Research Actuary will provide staff actuarial support. A Project Oversight Group composed of representatives from the organizations will be appointed to oversee the project and provide guidance.
- Questions
Any questions regarding this RFP should be directed by fax, or e–mail to: Steven Siegel, SOA Research Actuary (f: 847.273.8578).
- Notification of Intention to Submit Proposal
If you intend to submit a proposal, please send written notification by October 12, 2007 to Jeanne Nallon or (f: 847.273.8592).
- Submission of Proposal
Please e–mail a copy of the proposal to: Jeanne Nallon.
Proposals must be received no later than October 30, 2007. It is anticipated that all researchers who have submitted proposals will be informed of the status of their proposal no later than November 30, 2007.
Note: Proposals are considered confidential and proprietary.
- Conditions
The SOA, the Actuarial Foundation and NAVA reserve the right to not award a contract for this research. Reasons for not awarding a contract could include, but are not limited to, a lack of acceptable proposals or a finding that insufficient funds are available to proceed. The organizations also reserve the right to redirect the projects as is deemed advisable. The organizations intend to copyright and publish the results of this research. The research will be considered work–for–hire and all rights thereto belong to the organizations. However, appropriate credit will be given to the researcher(s).