On September 26, 2016, the University introduced:

Transcription

1 RETIREMENT PLANNING SIMPLIFIED FUND CHANGES GUIDE 1

2 University of Virginia Retirement and Savings Plans Fund Changes Guide The University of Virginia (UVA) is committed to helping you invest in your financial future. In early September, we sent you information regarding the changes being made to the UVA Retirement and Savings Plans, including the Optional Retirement Plan (ORP), Medical Center Retirement Plan (MCRP), 403(b) Plan and Cash Match Plan. On September 26, 2016, the University introduced: A streamlined three-tier investment structure to better align choices with your investment style A consistent structure across all of the university s retirement plans A simplified investment menu within each tier that offers many competitive fund choices 2

3 Three-tiered investment structure In early September, we sent you information detailing the new tiers and funds that became available on September 26. Consider what type of investor you might be when you review them below: Tier 1: Do it for me investor Using target date funds, we provide access to diversified portfolios to meet your investment goals. Investors are directed to a target date fund tailored to their expected retirement age. The investments automatically adjust as investors move through their careers. Tier 2: Help me do it investor We provide access to mostly passive funds, and you make the selections. Investors wanting to build a portfolio with a focus on diversification and indexing at a lower cost can use the funds in this tier to accomplish their goals. Investors should account for changes to their personal circumstances and adjust their portfolios as they approach retirement. Tier 3: Expanded choice investor We provide access to select actively managed funds and self-directed brokerage that provides a wide range of mutual funds. Investors who want diverse fund options and plan to actively manage their own portfolios fit in this group. This tier focuses on choice and relies on investors to determine the risk and asset allocation that will meet their goals. 3

4 Tier 1: Do it for me investor Target date funds provide access to diversified portfolios to meet investment goals. Investors are directed to a target date fund tailored to their expected retirement age. Target date funds available through TIAA & Fidelity Vanguard Target Retirement Income Fund Vanguard Target Retirement 2010 Fund Vanguard Target Retirement 2015 Fund Vanguard Target Retirement 2020 Fund Vanguard Target Retirement 2025 Fund Vanguard Target Retirement 2030 Fund Vanguard Target Retirement 2035 Fund Vanguard Target Retirement 2040 Fund Vanguard Target Retirement 2045 Fund Vanguard Target Retirement 2050 Fund Vanguard Target Retirement 2055 Fund Vanguard Target Retirement 2060 Fund Target date funds available through TIAA only TIAA CREF Lifecycle Retirement Income Fund (Institutional) TIAA CREF Lifecycle 2010 Fund (Institutional) TIAA CREF Lifecycle 2015 Fund (Institutional) TIAA CREF Lifecycle 2020 Fund (Institutional) TIAA CREF Lifecycle 2025 Fund (Institutional) TIAA CREF Lifecycle 2030 Fund (Institutional) TIAA CREF Lifecycle 2035 Fund (Institutional) TIAA CREF Lifecycle 2040 Fund (Institutional) TIAA CREF Lifecycle 2045 Fund (Institutional) TIAA CREF Lifecycle 2050 Fund (Institutional) TIAA CREF Lifecycle 2055 Fund (Institutional) TIAA CREF Lifecycle 2060 Fund (Institutional) Target date funds available through Fidelity only Fidelity Freedom K Income Fund Fidelity Freedom K 2005 Fund Fidelity Freedom K 2010 Fund Fidelity Freedom K 2015 Fund Fidelity Freedom K 2020 Fund Fidelity Freedom K 2025 Fund Fidelity Freedom K 2030 Fund Fidelity Freedom K 2035 Fund Fidelity Freedom K 2040 Fund Fidelity Freedom K 2045 Fund Fidelity Freedom K 2050 Fund Fidelity Freedom K 2055 Fund Fidelity Freedom K 2060 Fund 4

5 Tier 2: Help me do it investor Mostly passively managed investments that offer broader diversification at a lower cost Asset Class Money Market Short Term Bond Intermediate Term Bond Inflation Protected Bond Long Term Bond High Yield Bond Large Cap Blend Mid Cap Blend Small Cap Blend Foreign Large Cap Blend Diversified Emerging Markets Real Estate Investments that will be available at TIAA and Fidelity in risk order (least to most risk) Vanguard Federal Money Market Fund (Investor Shares) Vanguard Short Term Bond Index Fund Vanguard Total Bond Market Index Fund Vanguard Inflation Protected Securities Fund Vanguard Long Term Bond Index Fund (Investor Shares) Vanguard High Yield Corporate Fund (Admiral Shares) Vanguard Total Stock Market Index Fund (Institutional Plus Shares) Vanguard Mid Cap Index Fund Vanguard Small Cap Index Fund Vanguard Developed Markets Index Fund Vanguard Emerging Markets Stock Index Fund Vanguard REIT Index Fund Asset Class Money Market Stable Value Investments that will be available at TIAA CREF Money Market Account (R3) TIAA Traditional Asset Class Stable Value Investments that will be available at Fidelity New York Life Guaranteed Interest Account 5

6 Tier 3: Expanded choice investor A few select actively managed funds and self-directed brokerage that provide access to thousands of mutual funds, many of which have no transaction fees. Asset Class Socially Responsible Large Cap Blend Real Estate Investments that will be available at TIAA listed in risk order (least to most risk) CREF Social Choice Account (R3) CREF Stock Account (R3) TIAA Real Estate Account TIAA Brokerage Account To view the mutual fund families available through TIAA Brokerage, simply visit TIAA.org/brokerage. For questions on specific funds, please contact TIAA Brokerage at Asset Class Socially Responsible Investments that will be available at Fidelity listed in risk order (least to most risk) Parnassus Fund Large Cap Growth Fidelity Contrafund Fund (Class K) Large Cap Growth Vanguard PRIMECAP Fund (Admiral Shares) Mid Cap Value Fidelity Low Priced Stock Fund (Class K) Foreign Large Cap Growth Fidelity Diversified International Fund (Class K) Fidelity Self Directed Brokerage Window (Fidelity BrokerageLink ) To utilize this feature, you must first open a separate brokerage account within the Plan. If you have questions or would like to open an account, please log on to Fidelity NetBenefits at or call Once you have opened an account, you may access, monitor or change investments by contacting Fidelity. 6

7 Upcoming changes to the plans Effective February 1, 2017, several changes will be made to the UVA Retirement and Savings Plans investment menu. Please read the enclosed Investment and Fund Transfers Guide for details as to how these changes will affect your plan investments. If you are happy with the way your investments will transfer, you do not need to take action. If you would like to make changes to your investments, please see page 9 for instructions. Key dates November 2016 January 2017 January 31, 2017 Event You will have the opportunity to attend an informational session or contact TIAA or Fidelity for a personalized, one-on-one session. See the enclosed informational session schedule for meeting dates, times and locations. Before this date, you should learn about the plan s investment lineup and change your elections if you choose. Investment transfers will occur after the market closes (generally 4 p.m. Eastern Time) on January 31, The transfer of balances will appear as an exchange on your account history and quarterly statement. 7

8 What is not changing Although we are simplifying the plans investment structure, the plans rules are not changing. Eligibility, vesting and employer contributions will all remain as they are today. TIAA and Fidelity will remain the investment providers for the University of Virginia Retirement and Savings Plans. These changes do not affect the Virginia Retirement System (VRS) or the Commonwealth of Virginia 457 Deferred Compensation Plan. How your investments will transfer January 31, 2017 Within the new investment structure, many existing fund options will be eliminated or frozen to new contributions. If you take no action by 4 p.m. Eastern Time on January 31, 2017, the assets in those funds will be moved into similar funds or, if no similar option exists, into a Tier 1 target date fund most closely matched to the date you turn age 65 (the plans default fund). Please note that many eliminated or frozen funds will be available through the self-directed brokerage in Tier 3. You will need to open a brokerage account to access these options through TIAA at TIAA.org/ brokerage or through Fidelity NetBenefits at (For specific questions, please see page 12.) The investment transfers will occur after 4 p.m. Eastern Time on January 31, 2017, and will be effective February 1, They are detailed in the enclosed Investment and Fund Transfers Guide and are summarized as follows: Five CREF variable annuities will be restricted and will no longer accept new contributions, transfers or rollovers. Since these investments are variable annuities, they can only be restricted and cannot be eliminated. This means your existing assets will remain in these investments, and you may keep your assets in the restricted investments (unless you elect to transfer out). Many existing mutual fund options will be eliminated and assets will be transferred. This means they will no longer be available for new contributions or existing balances. Other mutual fund options will be frozen and future contributions will be transferred to new investment options under the new fund lineup. It is important that you read the enclosed guide. You can also attend an informational group meeting (schedule enclosed) or one-on-one counseling session to learn more about how the investment options being eliminated and/or frozen will be transferred to the new options. If you are pleased with the way your investments will transfer, you do not need to take any action. 8

9 If you would like to change your future contributions or move account balances to different investment options, you may do so at any time. TIAA participants Visit TIAA.org/uva or call TIAA at , Monday to Friday, 8 a.m. to 10 p.m. and Saturday, 9 a.m. to 6 p.m. (ET). Fidelity participants Visit or call Fidelity at , Monday to Friday (excluding holidays), 8 a.m. to midnight (ET). 9

10 Where to learn more UVA understands that you may have questions about these changes. There are a number of resources to help you. Understand how your investments will transfer Refer to the Investment and Fund Transfers Guide for details. Informational meetings Informational meetings will be held between early November and late January. Refer to the enclosed schedule for dates, times and locations. Counseling sessions You can schedule a one-on-one consultation with TIAA or Fidelity to get answers to your financial questions or develop an action plan with clear steps that help address your retirement goals. Investment provider Phone Web address TIAA Fidelity , weekdays from 8 a.m. to 8 p.m. (ET) to schedule an advice session , weekdays from 8 a.m. to 10 p.m. (ET) to schedule a consultation TIAA.org/uva 10

11 What you need to do Read this brochure closely and review the enclosed Investment and Fund Transfers Guide. Attend an informational group meeting or a one-on-one counseling session (schedule enclosed). Log in to your secure account at TIAA.org/uva or Compare your current investments with the UVA Retirement and Savings Plans new investment lineup. If you are happy with the changes and fund transfers as they are, you do not need to take action. You may change your elections anytime for future contributions and move account balances to different investment options by contacting TIAA or Fidelity as noted on page 9. 11

12 Who to contact for help with the UVA Retirement and Savings Plans TIAA participants Please visit TIAA.org/uva or call TIAA at , Monday to Friday, 8 a.m. to 10 p.m., and Saturday, 9 a.m. to 6 p.m. (ET). For specific questions about the Brokerage option, please contact TIAA Brokerage at Fidelity participants Please visit or call Fidelity at , Monday to Friday (excluding holidays), 8 a.m. to midnight (ET). For specific questions about the Brokerage option, please contact Fidelity at Additional questions? Call the UVA HR Service Team at or askhr@virginia.edu. Help is available Monday to Friday, 8 a.m. to 5 p.m. (ET) _ (10/16)