Re: Changes to the investment options in the Arizona University System (AUS) Retirement Plans

Transcription

1 February 7, 2018 Re: Changes to the investment options in the Arizona University System (AUS) Retirement Plans To AUS Retirement Plan Participants: Last October the Arizona University System introduced several new investment options to the Optional Retirement Plan (ORP), Voluntary 403(b) Plan. We are writing to inform you of an additional change occurring in March 2018 that will remove some of the current investment options from the fund lineups. The ultimate goal is to create a consistent investment lineup between our retirement plans while simplifying the investment lineups so you can more easily create an asset allocation that meets your needs, both long and short term. On March 29, 2018 at the close of the market, typically 2 p.m. Mountain Time, the investment changes outlined in this guide will take place. The changes vary between TIAA and Fidelity as well as the AUS retirement plans. What Do I Need to Do? You do not need to do anything. The changes outlined in this document will occur with no action required from you. To learn more: - Please review the information for each provider and plan in which you are enrolled so you will understand how your account(s) will be affected. - Attend an informational session. Fidelity and TIAA representatives will be on site to review the changes that will be taking place. Please refer to the enclosed schedule for dates and times for your university. - Schedule a one-on-one appointment with a TIAA or Fidelity representative to review your investments and get answers to any questions you may have. You can set an appointment with Fidelity online at For TIAA you can set an appointment online at or call If you would like to request changes to your account with Fidelity Investments, log on to NetBenefits at or call Monday through Friday, between 5 a.m. and 9 p.m. Mountain Time. If you would like to request changes to your account with TIAA, you can access your account online at or call , weekdays from 5 a.m. to 7 p.m., or Saturday, 6 a.m. to 3 p.m. Mountain Time. Sincerely, Arizona Board of Regents Arizona State University Northern Arizona University The University of Arizona

2 Your AUS Retirement Plan investment lineup as of March 30, 2018 Overview The new investment lineup will be structured in four distinct groups, or tiers. The approaches vary and are intended for investors with different levels of investment experience. They are also dependent on the level of involvement you want in managing your investment mix. Remember, any of the investment options offered by your Plan are available to you at any time so you could choose options from each tier to create an asset allocation that best fits your needs. Fund descriptions for all of the options in your Plan are available on your chosen investment provider s website. Tier 1: Target Retirement Date Funds The T. Rowe Price Retirement Date Funds (Class F in the ORP and Class I in the Voluntary 403(b) Plan) 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 T. Rowe Price Retirement 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 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. Principal invested is not guaranteed at any time, including at or after the funds' target dates. If you are looking for a single fund solution you may want to consider a Target Retirement Date option. Tier 2: Passively Managed Investment Options With this approach you determine and maintain the mix of investments in your Plan account using passive index options. Passively managed funds commonly known as index funds seek to match their benchmark s performance, rather than beat their benchmark. Because the objective is to simply mirror the holdings and return of a particular index, less research is needed, transactions occur less frequently, and expenses tend to be lower than those of actively managed funds. 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. Tier 3: Actively Managed Investment Options With this approach you determine and maintain the mix of investments in your Plan account using actively managed funds. Actively managed funds seek to beat, or exceed, their benchmarks. The fund managers have flexibility to actively seek out investments that they believe will beat, or exceed, the performance of a particular index. Since actively managed strategies often involve a great deal of research, transactions within these funds tend to occur more frequently and expenses tend to be higher than those of passively managed funds. Tier 4: Brokerage Window Option The brokerage window provides you with an opportunity to invest in a broad range of mutual fund investment options beyond those offered directly through the Plan. The investments available through a brokerage window are not evaluated nor monitored by the Plan. 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 chosen provider for applicable fees and risks.

3 Before investing in any investment option, consider the investment objectives, risks, charges, and expenses. Contact Fidelity for a mutual fund prospectus or, if available, a summary prospectus. Contact TIAA for a mutual fund or variable annuity prospectus or, if available, a summary prospectus containing this information. Your AUS Retirement Plan Investment lineup as of March 30, 2018 Offered through both Fidelity and TIAA Offered only through Fidelity Offered only through TIAA Tier 1- Target Date Funds Class I Ticker 1 Asset class T. Rowe Price Retirement 2005 TRPFX Target Date Fund T. Rowe Price Retirement 2010 TRPAX Target Date Fund T. Rowe Price Retirement 2015 TRFGX Target Date Fund T. Rowe Price Retirement 2020 TRBRX Target Date Fund T. Rowe Price Retirement 2025 TRPHX Target Date Fund T. Rowe Price Retirement 2030 TRPCX Target Date Fund T. Rowe Price Retirement 2035 TRPJX Target Date Fund T. Rowe Price Retirement 2040 TRPDX Target Date Fund T. Rowe Price Retirement 2045 TRPKX Target Date Fund T. Rowe Price Retirement 2050 TRPMX Target Date Fund T. Rowe Price Retirement 2055 TRPNX Target Date Fund T. Rowe Price Retirement 2060 TRPLX Target Date Fund Tier 2- Passive Investment Options Ticker Asset class Vanguard Total Bond Market Index Fund Institutional Shares VBTIX Intermediate-Term Bond Vanguard Institutional Index Fund Institutional Shares VINIX Large Cap Blend Vanguard Extended Market Index Fund Institutional Shares VIEIX Small/Mid Cap Blend Vanguard Total International Stock Index Fund Institutional Shares VTSNX Foreign Large Cap Blend Tier 3- Active Investment Options Ticker Asset class Vanguard Federal Money Market Fund Investor Money Market VMFXX Shares Metropolitan West Total Return Bond Plan Class MWTSX Intermediate-Term Bond MFS Value Fund Class R6 MEIKX Large Value MassMutual Select Mid Cap Growth Fund Class I MEFZX Mid-Cap Growth Goldman Sachs Small Cap Fund Value Class R6 GSSUX Small Value Vanguard Explorer Fund Admiral Shares VEXRX Small Growth Wells Fargo Stable Return C (ORP plan only) - Stable Value Principal Fixed Account (Voluntary 403(b) only) - Stable Value Fidelity Contrafund - Class K FCNKX Large Growth Socially Responsible JPMorgan Mid Cap Value Institutional FLMVX Mid-Cap Blend Neuberger Berman Socially Responsible Fund Institutional Class NBSLX Socially Responsible Fidelity Diversified International Fund - Class K FDIKX Foreign Large Growth Principal Real Estate Securities Institutional Class PIREX Real Estate CREF Money Market R3 2 - Money Market

4 TIAA Traditional - Stable Value Wells Fargo Stable Return Class E 3 - Stable Value CREF Stock R3 - Large Blend Large Growth T. Rowe Price Growth Stock I PRUFX Large Growth JPMorgan Mid Cap Value Fund Class R6 JMVYX Mid-Cap Blend CREF Social Choice R3 - Socially Responsible American Funds EuroPacific Growth Fund Class R6 RERGX Foreign Large Growth TIAA Real Estate - Real Estate Tier 4- Brokerage Window Ticker Investment type Fidelity BrokerageLink - Self-directed brokerage window TIAA Self-Directed Acct (Brokerage) - Self-directed brokerage window 1 The T. Rowe Price Retirement Trusts- Class F are offered through employer plans only and therefore have not been issued a ticker symbol. 2 CREF Money Market R3 is not available in the Voluntary 403(b) Plan. 3 Wells Fargo Stable Return Class E is not available in the Voluntary 403(b) Plan. Investment changes in the ORP When the market closes (generally 2:00 p.m. Mountain Time) on March 29, 2018, the investment options in the left side of the charts below offered through the Arizona Board of Regents Optional Retirement Plan will no longer be available. As a result, all existing balances and future contributions will be transferred to the fund on the right side of the chart. See the following chart for details. The transfer of balances will appear as an exchange on your account history and quarterly statement. Current investment at Fidelity and TIAA New investment at Fidelity and TIAA Principal Diversified Real Asset 4 Age based T. Rowe Price Retirement Trust Class F 4 This fund will be transferred to a T-Rowe Price Retirement Trust Class F based on your date of birth and projected retirement date assuming retirement at age 65. Please see the chart on page 12 to determine which fund is applicable to you. Current investment at TIAA Large Cap Stock Fund New investment at TIAA 50% to MFS Value R6 50% to T. Rowe Price Growth Stock I Calvert Equity I T. Rowe Price Growth Stock I Eaton Vance Atlanta Capital SMID-Cap I MassMutual Select Mid Cap Growth Equity II I T. Rowe Price Retirement Trust Balanced 4 Age based T. Rowe Price Retirement Trust Class F T. Rowe Price Retirement Trust 2005 A T. Rowe Price Retirement Trust 2005 Trust Class F

5 T. Rowe Price Retirement Trust 2010 A T. Rowe Price Retirement Trust 2010 Trust Class F T. Rowe Price Retirement Trust 2015 A T. Rowe Price Retirement Trust 2015 Trust Class F T. Rowe Price Retirement Trust 2020 A T. Rowe Price Retirement Trust 2020 Trust Class F T. Rowe Price Retirement Trust 2025 A T. Rowe Price Retirement Trust 2025 Trust Class F T. Rowe Price Retirement Trust 2030 A T. Rowe Price Retirement Trust 2030 Trust Class F T. Rowe Price Retirement Trust 2035 A T. Rowe Price Retirement Trust 2035 Trust Class F T. Rowe Price Retirement Trust 2040 A T. Rowe Price Retirement Trust 2040 Trust Class F T. Rowe Price Retirement Trust 2045 A T. Rowe Price Retirement Trust 2045 Trust Class F T. Rowe Price Retirement Trust 2050 A T. Rowe Price Retirement Trust 2050 Trust Class F T. Rowe Price Retirement Trust 2055 A T. Rowe Price Retirement Trust 2055 Trust Class F T. Rowe Price Retirement Trust 2060 A T. Rowe Price Retirement Trust 2060 Trust Class F 4 This fund will be transferred to a T-Rowe Price Retirement Trust Class F based on your date of birth and projected retirement date assuming retirement at age 65. Please see the chart on page 12 to determine which fund is applicable to you. Future contribution elections to the fund below will be mapped to a different investment option in the Plan at TIAA as of the market close (generally 2:00 p.m. Mountain Time) on March 29, Current balances will continue to be invested in the fund and will not transfer. Current future contribution investment election at TIAA New future contribution investment election at TIAA CREF Money Market R3 Vanguard Federal Money Market Fund Investor Shares Current investment at Fidelity Large Cap Fund of Funds New investment at Fidelity 50% Fidelity Contrafund Class K 50% MFS Value Fund Class R6 Calvert Equity Y Fidelity Contrafund Class K Eaton Vance Atlanta Capital SMID-Cap I MassMutual Select Mid Cap Growth Fund Class I GMO International Equity Allc Ser R6 Fidelity Diversified International Class K

6 Investment changes in the Arizona University System Voluntary 403(b) Plan When the market closes (generally 2:00 p.m. Mountain Time) on March 29, 2018, the investment options in the left side of the chart below offered through the Arizona University System Voluntary 403(b) Plan at Fidelity will no longer be available. As a result, all existing balances and future contributions will be transferred to the fund on the right side of the chart. See the following chart for details. The transfer of balances will appear as an exchange on your account history and quarterly statement. Current investment at Fidelity New investment at Fidelity Principal Diversified Real Asset 4 Age based T. Rowe Price Retirement Fund I Class American Beacon Large Cap Value Inst MFS Value Fund Class R6 Fidelity Growth Company K Fidelity Contrafund Class K Eaton Vance Atlanta Capital SMID-Cap I MassMutual Select Mid Cap Growth Fund Class I GMO International Equity Allc Ser R6 Fidelity Diversified International Fund - Class K 4 This fund will be transferred to a T-Rowe Price Retirement Fund Class I based on your date of birth and projected retirement date assuming retirement at age 65. Please see the chart on page 12 to determine which fund is applicable to you.

7 T. Rowe Price Retirement Fund date chart Designated funds will be transferred to a T. Rowe Price Retirement Fund based on your date of birth. Find your date of birth range in the following chart to determine which T. Rowe Price Retirement Date fund is applicable to you. The date ranges are the same for Class F and I funds at Fidelity and TIAA. Target Date Fund Timeline was chosen by the Plan sponsor DOB Range T. Rowe Price Retirement 2005 Born before 12/31/1942 T. Rowe Price Retirement /1/ /31/1947 T. Rowe Price Retirement /1/ /31/1952 T. Rowe Price Retirement /1/ /31/1957 T. Rowe Price Retirement /1/ /31/1962 T. Rowe Price Retirement /1/ /31/1967 T. Rowe Price Retirement /1/ /31/1972 T. Rowe Price Retirement /1/ /31/1977 T. Rowe Price Retirement /1/ /31/1982 T. Rowe Price Retirement /1/ /31/1987 T. Rowe Price Retirement /1/ /31/1992 T. Rowe Price Retirement /1/1993 and after The dates shown are based on the timing and accuracy of a variety of factors, including the transfer of data, receipt of instructions, and receipt of assets. Changes in any of these factors may result in changes to the dates and timing, including the dates on which, and thus the prices at which, assets in your account are sold and/or reinvested.

8 Investing involves risk, including risk of loss. In the ORP Plan at Fidelity you are not permitted to make a direct exchange between or among the Wells Fargo Stable Return, Fidelity BrokerageLink and Vanguard Federal Money Market Fund Investor Shares (considered competing funds, without first exchanging to a noncompeting fund for 90 days. These requirements are typically imposed by issuers such as insurance companies, banks, or other approved financial institutions, as a condition for issuing investment contracts to retirement plans. In the ORP Plan at TIAA you are not permitted to make a direct exchange between or among CREF Money Market R3, TIAA-CREF Self Directed Brokerage Account, and Vanguard Federal Money Market Fund Investor Shares (considered competing funds, without first exchanging to a noncompeting fund for 90 days. These requirements are typically imposed by issuers such as insurance companies, banks, or other approved financial institutions, as a condition for issuing investment contracts to retirement plans TIAA and Fidelity Investments are independent entities and are not legally affiliated. Fidelity Brokerage Services LLC, Member NYSE, SIPC, 900 Salem Street, Smithfield, RI FMR LLC. All rights reserved