What is the Retirement Plan Committee?
The Retirement Plan Committee (the “Committee”) was appointed last year by the Board of Trustees to oversee the administrative operation of the Lafayette College Retirement Plan (the “Plan”). That Committee includes faculty and staff who represent a cross-section of the College’s constituencies, and is advised by the College’s investment consultant, Fiduciary Investment Advisors (“FIA”), now part of Dimeo Schneider & Associates.
What process was followed by the Retirement Plan Committee in determining these changes?
The Retirement Plan Committee, with the assistance of FIA, conducted a thorough review of the record keepers and investment options. The review included an evaluation of the available administrative platforms offered by our two Plan administrators (“record keepers”), TIAA and Fidelity, and the investment options available on those platforms.
The Committee has completed its review regarding recordkeeping and the investment line-up, and its decisions are now being implemented. In making its decisions, the full Committee received recommendations from the Investment Subcommittee of the Retirement Plan Committee.
The Committee will review on a continuing basis the recordkeeping functions and investment menu to ensure service and performance expectations are being met.
What are the upcoming changes to the administration of the Plan?
As a Plan participant, you currently are able to utilize TIAA and/or Fidelity as your record keeper, and you will continue to be able to do so. The Committee was able to obtain favorable pricing for the administrative services provided by both record keepers under the Plan, which will benefit Plan participants.
The investment options offered to participants on both the TIAA and Fidelity platforms will be changed. The new TIAA and Fidelity platforms will include a parallel lineup of ten (10) mutual funds, and TIAA will also include five (5) TIAA and CREF annuity investments.
What do I need to know about the new investment options?
A parallel lineup of funds was chosen by the Committee for the two recordkeeping platforms. Going forward, the TIAA and Fidelity platforms will each include the same ten (10) mutual funds, and TIAA will also include the TIAA annuity, and a few CREF annuities, that are only available through the TIAA platform. The streamlined lineup was carefully selected to continue to provide a desirable mix of options.
Investments will include a mix of index and actively managed funds, mutual funds and annuity offerings, and a selection of investments from various well-known organizations across the industry, including names like Vanguard, TIAA and CREF, MetWest, and The Hartford. Vanguard will serve as the index provider on the Plan. A suite of Vanguard Target Date Funds have been added to each line-up. Target date funds are an asset mix of stocks, bonds, and other investments that automatically become more conservative as a participant approaches their target retirement date and beyond. If a Faculty or Staff member does not choose a preferred platform (TIAA or Fidelity) upon eligibility in the Plan, that member’s contributions will be directed to a Vanguard Target Retirement Fund based on their date of birth on the TIAA platform, which will serve as the Plan Qualified Date Investment Alternative (“QDIA”). A QDIA is a default investment option used for plan participants who have not elected where to invest their retirement plan contributions.
When will the changes be effective?
- New funds will be available December 1, 2020
- Effective January 6, 2021, if you did not make any changes to your investment options by 3:59 p.m. (EST) on January 5, 2021, your current funds will automatically be mapped to the new investments that have been chosen to align with the funds no longer being offered.
Will I be required to take action during this transition?
NO — You are not required to take any action as a result of the new investment menu and other changes. However, this is a valuable opportunity to re-evaluate your retirement strategy.
Where can I find more information on the new fund line-up, closing funds, and where existing funds will be mapped?
Please refer to the participant communication from your current record keeper, TIAA and/or Fidelity.
Plan participant communications are now posted to the retirement plan section of the HR Lafayette webpage.
What do I need to know about participant investment and recordkeeping fees?
Investment fees for the new fund line-up in 2021 are generally lower than investment fees for funds offering in the past. Lower fees can have a significant impact on fund balances as a result of compounding.
The TIAA and Fidelity platforms will both include the same line-up of funds with the same investment fund fees; in addition, the TIAA platform will also include an additional five annuities that were previously offered by TIAA.
Recordkeeping fees on both platforms have been reduced and restructured.
TIAA is moving from a fee of .13% of your account balance to .09%, which is approximately a 31% reduction in cost. Participants will continue to have the opportunity to receive refunds throughout the year in the form of plan service credits to the extent that total recordkeeping fees collected for the plan exceed $100 per Plan participant, minus plan administration expenses.
Fidelity has changed its structure to an annual participant fee of $115. In the past, Fidelity combined the recordkeeping fee and investment fee in the expense ratio of the funds. Other costs of administering the plan may also be charged to participants should they arise.
I am currently contributing to TIAA and/or CREF annuities and I want to make changes to my investment options. What do I need to do?
On December 1, 2020, the new investment options will be available to you. You will have the ability to change your investment election before the mapping implementation takes place if you take action between December 1, 2020, and 3:59 p.m. (EST) on January 5, 2021. You can redirect your balances and future contributions to your TIAA and/or CREF annuities; however, there are limitations with any balances in the TIAA Traditional annuity, and these limitations will continue to apply.
I am currently contributing to TIAA and/or CREF annuities but do not take any action to change my investment options by 3:59 p.m. (EST) on January 5, 2021. What will happen to my existing assets and future contributions effective January 6, 2021?
For those annuities that are remaining open as investment options, any balances and new contributions directed to those funds will continue.
For balances and contributions to those annuities that are being closed, existing assets will remain in those funds, and future contributions will be redirected to replacement funds on the new investment menu.
I am currently contributing to Fidelity funds, and use Fidelity as my record keeper, and I want to make changes to my investment options. What do I need to do?
Beginning December 1, 2020, the new investment options on the Fidelity recordkeeping platform will be available to you. You will have the ability to change your investment election before the mapping implementation takes place if you take action between December 1, 2020, and 3:59 p.m. (EST) January 5, 2021. Effective January 6, 2021, the prior Fidelity investment fund line-up will be closed. (See mapping schedule on the communication from Fidelity for more details.)
I am currently contributing to Fidelity funds, and use Fidelity as my record keeper, but do not take any action to change my investment options by 3:59 p.m. (EST) on January 5, 2021. What will happen to my existing assets and future contributions effective January 6, 2021?
Effective January 6, 2021, the Fidelity investment fund line-up will be closed, and replaced by a new Fidelity investment fund line-up. Existing assets and future contributions will be redirected to replacement funds that form the new investment menu on the Fidelity recordkeeping platform.
After January 6, 2021 can I still make changes?
After January 6, 2021, when the transition is completed, you will have the opportunity to direct your existing assets and/or future contributions to any of the options in the new investment line-ups with TIAA and/or Fidelity. There are limitations however, with any balances in the TIAA Traditional annuity, and these limitations will continue to apply.
What is the difference between an annuity account and a mutual fund?
A mutual fund is a type of investment in which the money of many investors is pooled together to buy a portfolio of different securities. The fund is managed by professionals who invest in stocks, bonds, money market instruments or other securities. In contrast, an annuity is a contract by which an insurance company agrees to make regular payments to someone for life or for a fixed period. Generally, there are two types of annuities. A guaranteed annuity is backed by an insurance company’s claims-paying ability and guarantees principal and a specified minimum interest rate. It may also offer the opportunity for additional amounts in excess of the guaranteed rate. A variable annuity is a contract that provides future payments, usually at retirement. Future payments depend on the performance of the portfolio’s securities and may rise or fall based on investment performance.
What are Target Date Funds?
Target date funds are an asset mix of stocks, bonds, and other investments that automatically become more conservative as a participant approaches their target retirement date and beyond. A suite of Vanguard Target Date Funds have been added to each of the TIAA and Fidelity platforms.
For more information on these funds, please refer to the participant communication from your current record keeper, TIAA and/or Fidelity. You may also refer to your dedicated Retirement Plan website at TIAA, www.TIAA.org/lafayette, and/or Fidelity, www.netbenefits.com/atwork.
If I would like, how would I switch from one record keeper to the other record keepers’ platform (e.g., move from TIAA to Fidelity, or vice versa)?
If you wish to move future contributions or balances to the other record keeper, refer to the HR website at https://hr.lafayette.edu/benefits/retirement-savings-plan/ for enrollment information and the salary reduction form that you will need to complete and return to Human Resources.
Can I make contributions to both the TIAA platform and the Fidelity platform?
Yes, suppose you are currently a participant with one of the platforms and would like to add contributions to a second platform. In that case, you will need to refer to the HR website at https://hr.lafayette.edu/benefits/retirement-savings-plan/ for enrollment information and the salary reduction form that you will need to complete and return to Human Resources.
If you are currently a participant on both platforms and wish to continue contributing to both platforms, you would not need to take any action.
How do I get help choosing an appropriate mix of investments?
TIAA and Fidelity Financial Consultants can provide personalized, fund-specific advice and planning services using investment choices on the new menu. During a one-on-one counseling session, a consultant will help you determine if you are saving enough for retirement and create an investment portfolio that is tailored to your unique financial situation and goals. All employees, retirees, and other Retirement Plan participants are welcome to schedule an appointment. You may also use a Financial Advisor of your choice to assist you.
To schedule an individual session with TIAA by phone, please call 800-732-8353, weekdays, between 8 a.m. and 8 p.m. (EST). You can also schedule a meeting online at www.TIAA.org/schedulenow.
To schedule an individual session with Fidelity by phone, please visit http://www.fidelity.com/reserve. You may also call 800-343-0860, weekdays, between 8:30 a.m. and 8 p.m. (EST) for assistance.
What Educational Sessions are available to me during this transition besides the individual counseling sessions mentioned above?
- Live information education sessions will be held on Thursday, November 19, at 2:00 p.m., Friday, November 20, at 12:00 p.m., and Monday, November 23, at 4:00 p.m., which will include a Zoom presentation by the Lafayette College HR Department, along with representatives from FIA, TIAA and Fidelity. Please register online for one of these sessions. A session will be recorded if you are unable to attend.
- There will be a TIAA group workshop offered on Wednesday, December 2, 2020, at 11 a.m. (register online) and Tuesday, December 15, 2020, at 2 p.m. (register online).
- There will be a Fidelity group workshop offered on Tuesday, December 1, 2020, at 2 p.m. (register online) and Wednesday, December 9, 2020, at 4 p.m. (register online).
- To schedule an individual counseling session with TIAA by phone, please call 800-732-8353, weekdays, between 8 a.m. and 8 p.m. (EST). You can also schedule a meeting online at tiaa.org/schedulenow. Session dates that can be reserved by appointment: November 18 & 19, 2020, December 2, 3, 9, & 10, 2020, and January 12 & 20, 2021.
- To schedule an individual counseling session with Fidelity by phone, visit fidelity.com/reserve. You may also call 800-343-0860, weekdays, between 8:30 a.m. and 8 p.m. (EST) for assistance. Session dates that can be reserved by appointment: December 1, 8, 17, & 22, 2020.
Whom do I contact for help?
- Contact Human Resources at 610-330-5060 or email@example.com.
- Call TIAA at 800-842-2252. Consultants are available weekdays from 8 a.m. to 10 p.m. (EST), and Saturday from 9 a.m. to 6 p.m. (EST). You can also schedule a meeting online at TIAA.org/schedulenow.
- Call Fidelity at 800-343-0860. Consultants are available weekdays from 8:30 a.m. and 8 p.m. (EST).