Optional Retirement Program & Tax Sheltered Annuity Plan Overview Guide

Transcription

1 Optional Retirement Program & Tax Sheltered Annuity Plan Overview Guide

2 GET READY FOR THE CHANGES AHEAD Starting this fall, new investment options will be available through Fidelity Investments, TIAA, VALIC, and Voya for the Optional Retirement Plan (ORP) and Tax-Sheltered Annuity (TSA). Please review this guide to learn how these important changes may affect you and your investment options in the ORP and TSA. n Read the transition highlights to understand what changes are being made in your ORP and TSA. n Review the new investment lineup and how your current investments may be affected during the change. n Carefully review the actions you may need to take and the key dates. TABLE OF CONTENTS Plan Change Highlights 3 Investment Options Overview 4 Investment Options Available 5 Key Dates 8 How Investment Options Changes Will Affect Accounts at Each Vendor Resources Available 10 PAGE 9 A special note for former employees, retired employees, alternate payees, and plan beneficiaries with account balances in the plans: Some of the information enclosed may not apply to you. However, your account balance may be affected by the change to the new investment lineup, so please read this material carefully. Whether your retirement is right around the corner or years away, continue to closely monitor your overall financial plan. If you have any questions regarding the information in this guide or your retirement plan, contact your investment vendor or visit their website. 2

3 PLAN CHANGE HIGHLIGHTS Investing in yourself for retirement is about to get easier with the ORP and TSA. We are pleased to introduce a new simplified investment structure to help faculty and staff and employees build a diversified retirement savings portfolio in the ORP and TSA. Beginning this fall, you will have the option to invest your contributions in a streamlined selection of funds or a self-directed brokerage account. These changes are the result of an extensive review undertaken by the Retirement Plan Advisory Committee, which is a group appointed by both the University of North Texas and UNT Health Science Center to exercise oversight of the investments available in the UNTS ORP and TSA. The Retirement Plan Advisory Committee has engaged CAPTRUST Financial Advisors to assist the committee in a thorough review of the retirement plans, with the goal of reducing administrative fees and offering a simplified, easier-to-understand menu of investment funds. The review included an assessment of our current investment options and an analysis of the current choices for investment and administrative fees. What is not changing? n Fidelity, TIAA, VALIC, and Voya will continue as the investment vendors for the ORP and TSA. n The ORP and TSA design and rules of the plans all remain unchanged. n Vesting, contributions, eligibility, base and matching employer contributions, loan guidelines, and distributions all remain the same. n Your current payroll contribution amount and to which vendor(s) it is directed will remain the same. n Balances in the TIAA legacy options will not change. n Beneficiary information currently on file will remain. However, you can designate a beneficiary by contacting your selected vendor(s). n Outstanding loans will not be affected, and payments should continue to be repaid as normal. Outstanding loan repayments will be directed according to your investment elections in the new investment options. No changes will be made to the payment amount, payment date, or other terms of your loan. What is changing? n New funds will be available at each current vendor. Many of the current investment options will no longer be available in the core offering. n The investment options no longer available will be reallocated to the core lineup at each current vendor. n Most of the current investment options, as well as hundreds more, will be available through a self-directed brokerage account with your chosen vendor(s). Why? n UNTS believes many of the changes will result in lower costs to you, as a participant. n UNTS believes the changes will help make the selection of your investment choices easier. n The changes allow the Retirement Plan Advisory Committee to identify what it considers to be suitable investment options for the ORP and TSA that are also monitored by the committee. What do I need to do? n No action is required. Any contributions and balances will be allowed only in the new investment lineup. If your contributions or balances are in an investment option that will no longer be part of the core lineup, they will be redirected to a new fund in the core lineup. n You may review the mapping of investments as provided by your chosen vendor(s) under separate cover. The mapping outlines the fund no longer offered and to which new core fund your future contributions and balances will be directed. n You do not have to enroll, re-enroll, change your enrollments, make new fund selections, or change your payroll contribution amount. 3

4 INVESTMENT OPTIONS OVERVIEW A streamlined investment lineup will be available. There will be several types of investment options within each vendor s investment lineup so you can easily create an investment mix to help you meet your retirement goals and investing style and needs. You do not need to choose from just one category; you may invest using any or all of these categories. You can select from the following tiers of investments: Tier 1: Target Date Funds This tier offers options that are already allocated for you. The target date funds are designed for investors expecting to retire around the year indicated in each fund's name. The funds are managed to gradually become more conservative over time as they approach the target date. The investment risk of each target date fund changes over time as the fund's asset allocation changes. The funds are subject to the volatility of the financial markets, including that of equity and fixedincome investments in the U.S. and abroad, and may be subject to risks associated with investing in high-yield, small-cap, and foreign securities. Principal invested is not guaranteed at any time, including at or after the funds' target dates. Tier 2: Passively Managed Funds Tier 3: Actively Managed Funds Actively managed funds try to outperform comparable market indices or benchmarks. These funds are actively managed by a fund manager or team of managers who select the investments they think will deliver the best combination of risk and return. Actively managed funds often have higher fees than passively managed funds, due to the level of involvement the fund manager has in maintaining the portfolio. These actively managed funds give you a great degree of flexibility and the ability to rebalance and manage the portfolio over time and as your situation changes. The cost of actively managed funds may be higher than passive funds. Tier 4: Self-Directed Brokerage Account A Self-Directed Brokerage account provides you with an opportunity to invest in a broad range of investment options beyond those offered directly through the ORP and TSA. The Plan fiduciary neither evaluates nor monitors the investments available through the selfdirected brokerage account. It is your responsibility to ensure the investments you select are suitable for your situation, including your goals, time horizon, and risk tolerance. Contact your selected vendor(s) for a fact sheet and commission schedule for applicable fees and risks. Passively managed funds (also called index funds) are designed to mirror a market index or benchmark. These funds generally have lower fees than funds that are actively managed, that is, funds that try to outperform, or beat market returns, rather than just track them. Ultimately, index funds are designed to provide exposure to a broad selection of securities at a relatively low cost. While these funds typically perform very similarly to the index they track, you should be aware that index funds cannot be expected to meet or beat the index s performance. 4

5 INVESTMENT OPTIONS AVAILABLE The investment options in your ORP and TSA give you a choice of investments that cover the major asset investment classes: stocks, bonds, and short-term investments. The investment options also give you the flexibility to build your own strategy to help meet your needs. The investments listed below will become the new investment lineup in the ORP and TSA. Many investment options currently offered through the ORP and TSA will no longer be available. As a result, future contributions and existing balances (where possible) will be transferred to a fund in the new investment lineup. Additional information will be provided to you throughout these changes. Please make sure to carefully review any information you receive and contact your chosen vendor(s) with questions. TIER 1: TARGET DATE FUNDS Vanguard Institutional Target Retirement Income Fund Vanguard Institutional Target Retirement 2015 Fund Vanguard Institutional Target Retirement 2020 Fund Vanguard Institutional Target Retirement 2025 Fund Vanguard Institutional Target Retirement 2030 Fund Vanguard Institutional Target Retirement 2035 Fund Vanguard Institutional Target Retirement 2040 Fund Vanguard Institutional Target Retirement 2045 Fund Vanguard Institutional Target Retirement 2050 Fund Vanguard Institutional Target Retirement 2055 Fund Vanguard Institutional Target Retirement 2060 Fund Vanguard Institutional Target Retirement 2065 Fund TICKER SYMBOL VITRX VITVX VITWX VRIVX VTTWX VITFX VIRSX VITLX VTRLX VIVLX VILVX VSXFX AVAILABLE THROUGH: Fidelity, TIAA, VALIC, and Voya TIER 2: PASSIVELY MANAGED FUNDS Vanguard Total Bond Market Index Fund Vanguard Institutional Index Fund Vanguard Extended Market Index Fund Vanguard Total International Stock Index Fund TICKER SYMBOL VBTIX VINIX VIEIX VTSNX AVAILABLE THROUGH: Fidelity, TIAA, VALIC, and Voya 5

6 INVESTMENT OPTIONS AVAILABLE (CONTINUED) TIER 3: ACTIVELY MANAGED FUNDS TICKER SYMBOL AVAILABLE THROUGH: Vanguard Federal Money Market Fund Investor Shares VMFXX Fidelity, TIAA, VALIC, and Voya Lincoln Stable Value Account N/A Fidelity TIAA Traditional N/A TIAA VALIC Fixed Interest Option N/A VALIC Voya Fixed Account N/A Voya Fidelity Total Bond K6 Fund FTKFX Fidelity Prudential Total Return Bond Fund Class Q PTRQX TIAA, VALIC, and Voya MFS Value Fund Class R6 MEIKX Fidelity, TIAA, VALIC, and Voya CREF Stock R2 N/A TIAA Fidelity Contrafund K6 FLCNX Fidelity T. Rowe Price Blue Chip Growth Fund I Class TBCIX TIAA, VALIC, and Voya JPMorgan Mid Cap Value Fund Class R6 American Funds EuroPacific Growth Fund Class R-6 Goldman Sachs Small Cap Value Fund Class R6 JMVYX RERGX GSSUX Fidelity, TIAA, VALIC, and Voya Principal Real Estate Securities Fund Class R-6 PFRSX Fidelity, VALIC, and Voya TIAA Real Estate CREF Social Choice R2 MFS Mid Cap Growth Fund Class R6 Goldman Sachs Small Cap Growth Insights Fund Class R6 N/A N/A OTCKX GINUX TIAA Fidelity, TIAA, VALIC, and Voya Vanguard FTSE Social Index Fund VFTNX Fidelity, VALIC, and Voya Vanguard Wellington Fund Admiral Shares VWENX Fidelity, TIAA, VALIC, and Voya TIER 4: SELF DIRECTED BROKERAGE TICKER SYMBOL AVAILABLE THROUGH: Self-Directed Brokerage N/A Fidelity, TIAA, VALIC, and Voya 6

7 INVESTMENT OPTIONS AVAILABLE (CONTINUED) Target Date Funds Age Chart Vanguard Target Retirement Funds provide a professionally maintained, diversified mix of investments that shifts its emphasis to more conservative investments as the year of retirement nears. Investments in Target Retirement Funds are subject to the risks of their underlying funds. The year in the fund name refers to the approximate year (the target date) when an investor in the fund would retire and leave the workforce. The fund will gradually shift its emphasis from more aggressive investments to more conservative ones based on its target date. An investment in a Target Retirement Fund is not guaranteed at any time, including on or after the target date. Keep in mind that diversification does not ensure a profit or protect against a loss. The funds are subject to the volatility of the financial markets, including that of equity and fixed-income investments in the U.S. and abroad, and may be subject to risks associated with investing in high-yield, small-cap, and foreign securities. UNTS has determined that, if you have not made investment choices at Fidelity, TIAA, VALIC and/or Voya, your future contributions will be invested in a Vanguard Target Retirement Fund. Please use the guidelines in the table below to determine in which target date fund future contributions will be invested. Also, use this age table to determine which target date fund your existing balances and future contributions, if applicable, will be invested after the plan s fund change on January 2, DATE OF BIRTH FUND NAME RETIREMENT DATE RANGE Before January 1, 1948 January 1, 1948 December 31, 1952 January 1, 1953 December 31, 1957 January 1, 1958 December 31, 1962 January 1, 1963 December 31, 1967 January 1, 1968 December 31, 1972 January 1, 1973 December 31, 1977 January 1, 1978 December 31, 1982 January 1, 1983 December 31, 1987 January 1, 1988 December 31, 1992 January 1, 1993 December 31, 1997 January 1, Date-of-birth ranges were selected by UNTS. Vanguard Institutional Target Retirement Income Fund Vanguard Institutional Target Retirement 2015 Fund Vanguard Institutional Target Retirement 2020 Fund Vanguard Institutional Target Retirement 2025 Fund Vanguard Institutional Target Retirement 2030 Fund Vanguard Institutional Target Retirement 2035 Fund Vanguard Institutional Target Retirement 2040 Fund Vanguard Institutional Target Retirement 2045 Fund Vanguard Institutional Target Retirement 2050 Fund Vanguard Institutional Target Retirement 2055 Fund Vanguard Institutional Target Retirement 2060 Fund Vanguard Institutional Target Retirement 2065 Fund Before

8 KEY DATES Whether or not you are planning retirement in the near future, we encourage you to carefully consider how the following key dates may affect your retirement planning and your overall financial plan. If you have any questions or if you would like to make any changes to your account, please contact your selected vendor(s). KEY DATES* September 28, 2018 January 2, 2019 January 15, 2019 February 1, 2019 PLAN ACTIVITY/ACTION STEPS New investment options will be added to Fidelity, TIAA, VALIC and Voya. You can now make investments elections in the new investment lineup or self-directed brokerage option. If you would like to change your TSA contribution amount or change your vendor, you may do so by logging in at any time to Retirement Manager. ORP and TSA future contributions and balances will be directed to the new investment options as indicated by each vendor under separate cover. The investment options no longer in the ORP and TSA are removed. You may make changes to your balances on January 3, 2019, by logging into your account with your current vendor(s). All employees and participant account balances in, and contributions to the UNT Health Sciences Center ORP and TSA will merge into the UNTS ORP and TSA. Employees and participants in the HSC plans will be notified of the ORP and TSA merge in December. Fidelity becomes the primary service and recordkeeping vendor for the ORP and TSA plans. The Fidelity Retirement Service Center at and Fidelity NetBenefits website at NetBenefits.com/UNT will be available for the following plan services. Through Fidelity NetBenefits, you can: n Make changes to your TSA contribution amount or enroll in the TSA. n Set up your NetBenefits account and preferences. - If you have a username and password for Fidelity NetBenefits, you can continue to use that information to access your retirement account. - If you do not have a Fidelity username and password, log on to NetBenefits.com/UNT, click Register, and follow the step-by-step instructions to set up your account. n Change investment elections for future contributions directed to Fidelity. Contact TIAA, VALIC or Voya directly to make changes to your investment elections for future contributions. n Review additional Plan information online at NetBenefits.com/UNT. * The timing of the plan changes and transition period, including any asset reallocations, described within this brochure depends on a variety of factors, which may include the timing and accuracy of the transfer of data, receipt of instructions, and receipt of assets. Changes in any of these factors may result in changes to the timing of the delivery of services, the transition period, and/or the dates on which, and thus the prices at which, assets in your account are sold and/or reinvested. 8

9 HOW INVESTMENT OPTIONS CHANGES WILL AFFECT ACCOUNTS AT EACH VENDOR Each vendor will provide an overview of the investment option changes. Review your vendor(s) notice to determine how the investment option changes may affect your account. Keep in mind that the new investment lineup will be available at each vendor beginning September 28, All future contributions and balances will be directed to the new investment lineup on January 2,

10 RESOURCES AVAILABLE Whether you are in the ORP or TSA, we encourage you to contact your chosen vendor(s) with questions regarding your future contributions and investment options. Each vendor is available to help you with your questions and retirement strategy. Employee information sessions will be available throughout the fall semester. We encourage you to pay special attention to the information provided in the coming months. The following resources will be available to help you prepare and understand the ORP and TSA changes: n Vendor representatives will be on campus to offer help and provide advice on investing. You can also get help and advice on investing over the phone by calling your vendor(s). n Various s and printed materials will be sent to provide additional details. CALL CLICK MEET - SCHEDULE AN APPOINTMENT Fidelity , Monday through Friday, 7 a.m. to 11 p.m. (CT) NetBenefits.com/UNT or visit NetBenefits.com/UNT and click the Contact Us tab, then Meet. TIAA , weekdays, 7 a.m. to 9 p.m. or Saturdays, 8 a.m. to 5 p.m. (CT) TIAA.org/unt or visit TIAA.org/schedulenow VALIC , Monday through Friday, between 7 a.m. and 8 p.m. (CT) VALIC.com Voya , Monday through Friday, 7:30 a.m. to 4 p.m. (CT) VoyaRetirementPlans.com or visit VoyaRetirementPlans.com 10

11 NOTES

12 UNIVERSITY OF NORTH TEXAS SYSTEM Before investing in any mutual fund, consider the investment objectives, risks, charges, and expenses. Contact Fidelity for a prospectus or, if available, a summary prospectus containing this information. Read it carefully. Investing involves risk, including risk of loss. TIAA, VALIC, Voya, Fidelity and CAPTRUST are independent entities and are not legally affiliated. The third-party trademarks and service marks appearing herein are the property of their respective owners. Fidelity Brokerage Services LLC, Member NYSE, SIPC, 900 Salem Street, Smithfield, RI FMR LLC. All rights reserved