University of Rochester

Retirement Changes - 2012



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Retirement edition of Currents (.pdf)


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RETIREMENT
Special Edition

Retirement plan changes: What you need to know

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The University has made several enhancements and updates to the 403(b) Retirement Program and the 457(b) Deferred Compensation Plan for faculty and staff. The enhancements are designed to better support your efforts to save and invest for retirement. The basic design of the plans will remain the same, and the changes will not affect the University contribution formula or your eligibility to participate.

What’s new?

A streamlined investment menu: The University has introduced a new, user-friendly investment structure with a streamlined set of investment options designed to meet the diverse needs and investing preferences for faculty and staff. The investment options have been screened and will be reviewed on a periodic basis. Mutual funds and annuities will be offered from well-known investment providers such as Lord Abbett, PIMCO, T. Rowe Price, TIAA-CREF, and Vanguard. Learn more about the new menu at www.tiaa-cref.org/Rochester.

Self-Directed Brokerage Account Option: A Self-Directed Brokerage Account (SDBA) option is available for those who wish to invest in mutual funds that are not available on the new investment menu. Designed for the sophisticated investor, the SDBA option allows you to invest in thousands of mutual funds from hundreds of fund families. Learn more about the brokerage account option at www.tiaa-cref.org/brokerage or call (800) 410-6497. A full list of fund families is available at www.tiaa-cref.org/Rochester.

One recordkeeper—TIAA-CREF: Retirement plans are also being consolidated to one recordkeeper, TIAA-CREF. Having a single recordkeeper enables you to enroll using a single logon, receive one consolidated statement, and access a single enhanced website. If you do not have an applicable account with TIAA-CREF, you should have recently received a welcome package from TIAA-CREF. The package, sent to your home address, includes information about your new account, how to make investment changes, and how to update your beneficiaries.

Why are changes being made?

During the last year and a half, the University’s Retirement Plan Committee analyzed the current retirement plan options and providers. One of the committee’s main responsibilities is fiduciary in nature, which means ensuring program costs are kept reasonable, that plans are administered in compliance with regulatory requirements, that investment choices are appropriate for long-term investing, and that plans offer a high level of customer service. After reviewing the services offered by multiple providers, the committee determined that one retirement recordkeeper offered improved services for participants—including a single logon, consolidated statements, and an enhanced website

What do I need to do?

The new investment menu offers you three strategies to invest for retirement: One-Step Investing, Mix Your Own, and Self-Directed Brokerage Account. Read more about each option on page 2. Once you’ve decided which strategy is right for you, follow the directions listed under that strategy.

What if I don’t do anything?

If you don’t take any action, your current balance(s) and future contributions will automatically be directed to the age-appropriate Vanguard Target Retirement Fund based on your date of birth. Target date funds, also known as lifecycle funds, are designed based on an investor’s age or target retirement date. The mix of investments changes over time to become less focused on growth and more focused on income as the investor nears retirement.

Key dates

April 1–30: Window for employees to enroll for a one-time, in-kind mutual fund unit transfer into the Self-Directed Brokerage Account.
April 1 to June 7: Window for employees to select their investments for future contributions and existing balances.
June 7–29: The blackout period is expected to start at the close of business June 7 and is expected to end on or before June 29.
June 15: Existing balances are transferred. Only new investment options are now available.

Next page: Which Investment Strategy?