New opportunities for your retirement strategy. Announcing updates to the Voluntary Individual 403(b) Retirement Plan for TIAA participants

Transcription

1 New opportunities for your retirement strategy Announcing updates to the Voluntary Individual 403(b) Retirement Plan for TIAA participants

2 Table of contents Voluntary Individual 403(b) Retirement Plan (or Tax-Sheltered Annuity (TSA)) 1 New TSA TIAA core investment lineup 2 For all active TIAA TSA plan participants 3 Your future payroll contributions to the TIAA-CREF Lifecycle Index Funds 3 New TIAA Brokerage option 4 Q&A 5 We re here to help Back cover Questions? Call or visit TIAA.org/passhe

3 Voluntary Individual 403(b) Retirement Plan Also referred to as a Tax-Sheltered Annuity (TSA) Currently, the State System makes available the TSA option for employees to voluntarily defer additional monies for their retirement. The State System does not endorse or have any contracts with the current listing of vendors, nor are the investments offered or the fees charged by the vendors monitored by the State System. Beginning July 2018, there will be a change to the list of vendors. Employees will be able to choose from either TIAA and/ or Fidelity Investments. What you need to know as an employee currently deferring payroll contributions to TIAA New core investment lineup. Employees will be provided the same core investment lineup as the group retirement plan, the Alternative Retirement Plan (ARP), in which investments and share class fees are regularly reviewed and monitored. See page 2. New TIAA Brokerage option. A brokerage window will be available for employees to independently select from thousands of mutual funds if you desire investment choices outside the core lineup. See page 4. Please note: the State System will not monitor the performance of the funds in your personal brokerage account, and TIAA does not offer investment advice for brokerage balances. New loan feature available from your TSA account. With these changes, all employees making voluntary contributions to a TIAA TSA account will be issued a new Retirement Choice (RC) contract. All future payroll contributions will be directed to your new account. Any balance in your existing TIAA accounts will remain there, although no new contributions, rollovers or transfers may be made to them. Introducing the new State System TSA website Beginning July 2, 2018, a new online website, Retirement@Work, will be available for all State System employees to enroll, make changes to voluntary payroll contributions and investment provider choices. The Retirement@Work website helps you simplify and manage your TSA accounts in one location. Once Retirement@Work is live, you'll be given instructions on how to access the online portal. Retirement plan key dates. Key dates Weeks of May 7, 2018 and May 14, 2018 June 6, 2018 July 2, 2018 July 6, 2018 Event Employee informational meetings held at your university campus. See the enclosed schedule. You will be enrolled in a new TIAA Retirement Choice contract and a confirmation will be sent to your address of record. State System Retirement@Work TSA website available for active employees. First contributions are directed to the new Retirement Choice (RC) contracts and new investment lineup. No longer employed by the State System? You are receiving this guide because you currently have investments in the Voluntary Individual 403(b) Retirement Plan. Even though you are not actively contributing and no action is required, you are eligible to take advantage of the new investment lineup. Please call TIAA to learn more. Questions? Call or visit TIAA.org/passhe 1

4 New TSA TIAA core investment lineup The new lineup is now the same as the group retirement plan (ARP), in which investments and share class fees are regularly reviewed and monitored. To learn more about the investment options, go to TIAA.org and enter the ticker symbol in the site s search feature. GUARANTEED TIAA Stable Value*,1 N/A TIAA Traditional Annuity* N/A MONEY MARKET CREF Money Market Account R3 (Variable Annuity) QCMMIX FIXED INCOME CREF Bond Market Account R3 (Variable Annuity) QCBMIX CREF Inflation-Linked Bond Account R3 (Variable Annuity) QCILIX TIAA-CREF Short-Term Bond Institutional TISIX MULTI-ASSET CREF Social Choice Account R3 (Variable Annuity) QCSCIX TIAA-CREF Lifecycle Index 2010 Institutional TLTIX TIAA-CREF Lifecycle Index 2020 Institutional TLWIX TIAA-CREF Lifecycle Index 2025 Institutional TLQIX TIAA-CREF Lifecycle Index 2030 Institutional TLHIX TIAA-CREF Lifecycle Index 2035 Institutional TLYIX TIAA-CREF Lifecycle Index 2040 Institutional TLZIX TIAA-CREF Lifecycle Index 2045 Institutional TLXIX TIAA-CREF Lifecycle Index 2050 Institutional TLLIX TIAA-CREF Lifecycle Index 2055 Institutional TTIIX TIAA-CREF Lifecycle Index 2060 Institutional TVIIX TIAA-CREF Lifecycle Index Retirement Income Institutional TRILX EQUITIES Cohen & Steers Institutional Realty Shares CSRIX CREF Global Equities Account R3 (Variable Annuity) QCGLIX CREF Growth Account R3 (Variable Annuity) QCGRIX CREF Stock Account R3 (Variable Annuity) QCSTIX DFA International Small-Cap Value I DISVX Oppenheimer Developing Markets I ODVIX T. Rowe Price Institutional Large-Cap Growth TRLGX T. Rowe Price New Horizons I PRJIX TIAA-CREF Equity Index Institutional TIEIX TIAA-CREF International Equity Institutional TIIEX TIAA-CREF Large-Cap Value Institutional TRLIX TIAA-CREF Mid-Cap Growth Institutional TRPWX TIAA-CREF S&P 500 Index Institutional TISPX TIAA-CREF Social Choice Equity Institutional TISCX Vanguard Mid-Cap Value Index Admiral VMVAX Vanguard S&P Small-Cap 600 Index I VSMSX BROKERAGE SERVICES PAGE 4 * TIAA Traditional Annuity and TIAA Stable Value are guaranteed insurance contracts and not investments for federal securities law purposes. Any guarantees under annuities issued by TIAA are subject to TIAA s claims-paying ability. Interest credited includes a guaranteed rate, plus additional amounts as may be established by the TIAA Board of Trustees. Such additional amounts, when declared, remain in effect for the declaration year which begins each March 1 for accumulating annuities and January 1 for payout annuities. Additional amounts are not guaranteed for periods other than the period for which they were declared. 1 TIAA Stable Value is subject to Equity Wash restrictions. In order to provide the performance, stability and liquidity attributes of a stable value option, participant transfers from stable value options are subject to an industry standard 90-day Equity Wash rule. The rule prohibits transfers from the TIAA Stable Value fund directly to Competing Funds. Competing Funds are plan investment options that exhibit a pattern of performance consistent with stability and include the Money Market Funds, Short-Term Bond Funds, TIAA Real Estate Account and the TIAA Brokerage account. The TIAA Brokerage account option is considered a Competing Fund since it offers access to Competing Funds. Participants wishing to transfer amounts from TIAA Stable Value to Competing Funds must first transfer to Noncompeting Funds, where the amount originally transferred must remain for 90 days before the participant can then transfer the amount to one or more Competing Funds. 2 Questions? Call or visit TIAA.org/passhe

5 For all active TIAA TSA plan participants New accounts You will be enrolled in a new Retirement Choice (RC) contract on June 6, 2018, and sent an enrollment confirmation. Your current beneficiary designation will be applied to your new account. Updating your investment choices Beginning July 2, 2018, you will be able to update your investment choices and access your TSA account online through the new State System Retirement@Work TSA website. Active employees will receive additional information about the new site in June. If you make no changes, your voluntary contributions will be directed as outlined below. How your future contributions and current account balances will be affected Starting July 6, your future voluntary payroll contributions will be directed to your new account and the new investment options as outlined below. Your existing balances will remain in your current contracts; however, no new contributions may be directed to the current contracts. Because the investment lineup has changed, your future contributions will be defaulted to the TIAA-CREF Lifecycle Index Funds Until you update your investment choices, your future contributions will be directed to the TIAA-CREF Lifecycle Index Fund that corresponds to the year you turn age 65. Locate your year of birth on the chart below to identify the corresponding fund. Birth year New investment option Ticker Earlier 1948 TIAA-CREF Lifecycle Index 2010 Institutional TLTIX TIAA-CREF Lifecycle Index 2020 Institutional TLWIX TIAA-CREF Lifecycle Index 2025 Institutional TLQIX TIAA-CREF Lifecycle Index 2030 Institutional TLHIX TIAA-CREF Lifecycle Index 2035 Institutional TLYIX TIAA-CREF Lifecycle Index 2040 Institutional TLZIX TIAA-CREF Lifecycle Index 2045 Institutional TLXIX TIAA-CREF Lifecycle Index 2050 Institutional TLLIX TIAA-CREF Lifecycle Index 2055 Institutional TTIIX 1989 present TIAA-CREF Lifecycle Index 2060 Institutional TVIIX A lifecycle* fund is a fund of funds primarily invested in shares of mutual funds. As with all mutual funds, the principal value of a lifecycle fund isn t guaranteed at any time and will fluctuate with market changes. The target date approximates when investors may plan to start making withdrawals. However, you are not required to withdraw the funds at that target date. After the target date has been reached, some of your money may be merged into a fund with a more stable asset allocation.* * Lifecycle funds share the risks associated with the types of securities held by each of the underlying funds in which they invest. In addition to the fees and expenses associated with the lifecycle funds, there is exposure to the fees and expenses associated with the underlying mutual funds. Questions? Call or visit TIAA.org/passhe 3

6 New TIAA Brokerage option Before investing in a brokerage account, consider contacting TIAA to learn more. Learn more about a brokerage account* by contacting us at , weekdays, 8 a.m. to 7 p.m. (ET). Access thousands of mutual funds and many well-known fund families beyond the core investment options. 1 For investors with specialized investing needs, more choices can mean more opportunity to direct retirement investments across markets and asset classes outside of your plan s core lineup. With your brokerage account, you can independently research and select from thousands of mutual funds. There are no fees to open a brokerage account and trading fees will be waived through October 5, Short-term redemption fees for certain investments may apply. It s important to understand that the State System will not monitor the performance of the funds offered through the brokerage account, and TIAA does not offer investment advice for brokerage assets. As a participant, you will bear the risk of investing, and certain securities may not be suitable for all investors. It is your responsibility to evaluate this option, monitor the investments over time, and make adjustments to your portfolio when necessary. 1 The brokerage account option is available to participants who maintain both a legitimate U.S. residential address and a legitimate U.S. mailing address. Certain securities may not be suitable for all investors. Securities are subject to investment risk, including possible loss of the principal amount invested. * Trading fees will be reinstated without written notification. After October 5, you will be charged a commission only on applicable transactions and other accountrelated fees in accordance with the TIAA Commission and Fee Schedule. Please visit TIAA.org/SDA_CAA. Other fees and expenses apply to a continued investment in the funds and are described in the fund s current prospectus. 4 Questions? Call or visit TIAA.org/passhe

7 Q&A 1. Why is the State System changing the TSA plan? The State System recently conducted a Request for Proposal for the Alternative Retirement Plan (ARP) group retirement plan. The successful vendors, TIAA and Fidelity contracts with the State System, will now include the TSA plan. By including the ability to offer the voluntary TSA plan with the contracts awarded to the group retirement plan vendors, employees can have access to investments that are regularly reviewed and monitored against performance standards and offered at a low cost. 2. Are loans available in the TSA plan? Yes, the State System TSA plan will now allow participants to borrow against their retirement account. TIAA Loan issuance fee. This one-time fee is deducted directly from your account at the time a loan is issued. A loan issuance fee would apply if you choose a general purpose loan and/or primary residence loan within the TSA plan. The costs of these loans are $75 per loan for a general purpose loan and $125 per loan for a residential loan. 3. Will I pay any fees to invest in the TSA plan? All investment options have expenses and other fees that can be found in the prospectuses by entering the investment s ticker symbol into the search feature at TIAA.org. Some investment options may also have redemption and other fees. See TIAA.org/passhe for more details. In addition to investment fees, there is an annual TIAA Plan Servicing Fee of up to 0.038% ($3.80 per $10,000 invested) assessed on a quarterly basis. This amount will be realized by assessing a fee or a credit to each investment you choose within the plan. Each fee or credit will be applied to your account on the last business day of each quarter and identified as a TIAA Plan Servicing Fee or a Plan Servicing Credit on your quarterly statement. You can view more information about the specific fees and credits by viewing Understanding Your TSA Plan Fees pdf available at TIAA.org/passhe. 4. I am currently contributing to the TSA with TIAA. What happens to my current account balances and future contributions? All balances will remain where they are. Once your new account is issued, you can direct any balance and future payroll contributions to other options on the new investment menu. If no action is taken by July 6, 2018, future payroll contributions will be invested in the lifecycle index fund closest to the year you turn 65 until you provide new instructions. 5. Can I move money from an existing TIAA account to a new one? Yes, but it s a move you ll want to weigh carefully. You may move money out of your existing TIAA TSA contracts to the new contracts, subject to any restrictions that apply to the investments. However, any money that you move out of your existing contract(s) cannot be moved back into them. Money in the TIAA Traditional Annuity deserves special attention. For instance, money moved out of TIAA Traditional in the existing contracts will no longer receive the 3% minimum guaranteed rate and you risk giving up favorable crediting rates on older contributions. In short, the pros and cons are different for every participant. To learn more about TIAA Traditional, liquidity rules, and the differences between your current contract and the new RC contracts, please see the contract comparison chart at TIAA.org/contractcomparison or contact TIAA at Questions? Call or visit TIAA.org/passhe 5

8 We re here to help Not sure where to begin? Let us help you take the next step! In person Phone Online Schedule a one-on-one advice session with TIAA by calling , weekdays, 8 a.m. to 8 p.m. (ET) or visit TIAA.org/schedulenow. There is no additional cost to you for this service. If you have any questions or would like assistance selecting your new investment options, call TIAA at , weekdays, 8 a.m. to 10 p.m. and Saturday, 9 a.m. to 6 p.m. (ET). Manage your account online by going to TIAA.org/passhe and selecting Log in. If you re new to TIAA, select Log in, then click on Need to register for online access. Follow the on-screen directions to gain online access to your account. This material is for informational or educational purposes only and does not constitute a recommendation or investment advice in connection with a distribution, transfer or rollover, a purchase or sale of securities or other investment property, or the management of securities or other investments, including the development of an investment strategy or retention of an investment manager or advisor. This material does not take into account any specific objectives or circumstances of any particular investor, or suggest any specific course of action. Investment decisions should be made in consultation with an investor s personal advisor based on the investor s own objectives and circumstances. Distributions from 403(b) plans before age 59½, severance from employment, death or disability may be prohibited, limited and/or subject to substantial tax penalties. Different restrictions may apply to other types of plans. Investment, insurance, and annuity products are not FDIC insured, are not bank guaranteed, are not bank deposits, are not insured by any federal government agency, are not a condition to any banking service or activity, and may lose value. You should consider the investment objectives, risks, charges, and expenses carefully before investing. Please call or go to TIAA.org/passhe for current product and fund prospectuses that contain this and other information. Please read the prospectuses carefully before investing. TIAA-CREF Individual & Institutional Services, LLC, Teachers Personal Investors Services, Inc., and Nuveen Securities, LLC, Members FINRA and SIPC, distribute securities products. Annuity contracts and certificates are issued by Teachers Insurance and Annuity Association of America (TIAA) and College Retirement Equities Fund (CREF), New York, NY. Each is solely responsible for its own financial condition and contractual obligations. TIAA Brokerage, a division of TIAA-CREF Individual & Institutional Services, LLC, Member FINRA/SIPC, distributes securities. Brokerage accounts are carried by Pershing, LLC, a subsidiary of The Bank of New York Mellon Corporation, Member FINRA, NYSE, SIPC Teachers Insurance and Annuity Association of America-College Retirement Equities Fund, 730 Third Avenue, New York, NY MT (04/18)