Introducing the New York State Voluntary Defined Contribution Plan The new retirement option for New York State employees A presentation for payroll and human resources professionals
Who s covered? State employees who earn $75,000+ Unrepresented by a union Hired on or after July 1, 2013 For Institutional Investor Use Only. Not for Use With or Distribution to the Public. 2
When does it start? July 1, 2013 For Institutional Investor Use Only. Not for Use With or Distribution to the Public. 3
What is the Voluntary Defined Contribution Plan?
What is the Voluntary Defined Contribution Plan? 1 It must be offered to all new employees Employees can also select the State Retirement Plans: Fixed, guaranteed monthly income Contributions invested by the state For Institutional Investor Use Only. Not for Use With or Distribution to the Public. 5
What is the Voluntary Defined Contribution Plan? (continued) 2 3 Benefits defined by Employer and employee contributions Investment earnings Tax-deferred 4 Participant-directed investments For Institutional Investor Use Only. Not for Use With or Distribution to the Public. 6
What is the Voluntary Defined Contribution Plan? (continued) 5 It s portable Take it from job to job Accrues interest even after worker leaves plan Account belongs to the employee, not the state Variety of distribution options A lifetime annuity A lump-sum distribution Installments Roll assets into an IRA Leave assets in the plan For Institutional Investor Use Only. Not for Use With or Distribution to the Public. 7
What is the Voluntary Defined Contribution Plan? (continued) 6 It lets participants take an active role in their retirement Select investment options Choose how to allocate Design payment stream Professional guidance For Institutional Investor Use Only. Not for Use With or Distribution to the Public. 8
What is the Voluntary Defined Contribution Plan? (continued) 7 Contributions The state contributes 8% Employee contribution rate is based on earnings: Wages of $100,000.01 and greater Wages between $75,000.01 and 100,000.00 Wages up to $75,000 4.5% 5.75% 6% 0 1 2 3 4 5 6 7 8 9 10 These are subject to change by legislation passed by New York State For Institutional Investor Use Only. Not for Use With or Distribution to the Public. 9
What is the Voluntary Defined Contribution Plan? (continued) 8 Vesting Employee contributions always fully vested Employer contributions vest after 366 days Participant not entitled to non-vested balances if they leave During the vesting period, funds held in escrow Once vested, the agency adds 4% Determination of vesting status depends on history, validation For Institutional Investor Use Only. Not for Use With or Distribution to the Public. 10
What is the Voluntary Defined Contribution Plan? (continued) 9 Distribution options Loans Death benefits Lifetime retirement income Single and/or systematic lump-sum withdrawals Minimum distribution payments Interest payments Rollovers For more information, visit www.vdc.ny.gov Some distribution options are not available until separation of service. For Institutional Investor Use Only. Not for Use With or Distribution to the Public. 11
What makes the VDC Plan a good choice for your agency? Flexible Attract, retain employees Better manage plan cost Employees take an active role For Institutional Investor Use Only. Not for Use With or Distribution to the Public. 12
The VDC Plan Plan sponsor: SUNY Optional Retirement Plan Plan administrator: David Morrell, University Wide Benefits Administrator, State University of New York. Investment providers: Employees have the option of selecting TIAA-CREF, ING, MetLife or VALIC. Plan recordkeeper: TIAA-CREF For Institutional Investor Use Only. Not for Use With or Distribution to the Public. 13
About TIAA-CREF
About TIAA-CREF Recordkeeper and plan service provider Central point of contact Help getting plan started Bookkeeping, services and agency support Help operate the recordkeeping system Help you onboard your agency Day-to-day operations contact Coordinate data transition and transmissions Manage the employee enrollment For Institutional Investor Use Only. Not for Use With or Distribution to the Public. 15
About TIAA-CREF (continued) With SUNY for almost 50 years Headquartered in New York City A Fortune 100 financial services company $520 billion in assets* Serving 3.7 million participants Highest ratings for stability, claims-paying ability and overall financial strength Specializes in serving the academic, medical, cultural, governmental and research fields * As of 3/31/13. For Institutional Investor Use Only. Not for Use With or Distribution to the Public. 16
Your role and your resources
What s your role? As a payroll or human resources manager, you are considered a VDC plan administrator. Your duties include: Communicating the plan to new employees Remitting contribution data and funding Reporting Determining eligibility Enrolling new employees Updating terminations. Answering payroll-related questions For Institutional Investor Use Only. Not for Use With or Distribution to the Public. 18
A dedicated Voluntary Defined Benefits Phone Line 888 984-0010 8 a.m. 6 p.m. Monday Friday For Institutional Investor Use Only. Not for Use With or Distribution to the Public. 19
A secure, information website Agency guide and instructions FAQs VDC plan presentations Implementation timelines Employee materials For Institutional Investor Use Only. Not for Use With or Distribution to the Public. 20
A convenient plan administrator website Approve and decline new enrollments Employment status updates View contribution history Remittance file upload via File Exchange Reporting For Institutional Investor Use Only. Not for Use With or Distribution to the Public. 21
Investment providers TIAA-CREF 800 842-2252 www.tiaa-cref.org/suny ING 800 677-4636 https://suny.prepare4myfuture.com/emadmin/landingpage.action MetLife 800 560-5001 www.metlife.com/suny VALIC 800 448-2542 www.valic.com/suny For Institutional Investor Use Only. Not for Use With or Distribution to the Public. 22
Getting started
Getting started Employee Enrollment Guide Summarizes program Provides enrollment instructions Shows how to manage retirement accounts after enrollment For Institutional Investor Use Only. Not for Use With or Distribution to the Public. 24
Getting started (continued) To enroll in the program, you will need to direct employees to: Enroll Online www.vdc.ny.gov For Institutional Investor Use Only. Not for Use With or Distribution to the Public. 25
Getting started (continued) Preparing for implementation: Onboard your agency by calling TIAA-CREF at 888 984-0010 Notify your payroll to start work on data requirements Create remittance data file for new hires Establish an escrow account and process Prepare to communicate to new employees Don t worry: TIAA-CREF can help For Institutional Investor Use Only. Not for Use With or Distribution to the Public. 26
Getting started (continued) It usually takes about six weeks for new hires to come onboard the Voluntary Defined Contribution Plan To help you get ready, contact TIAA-CREF 888 984-0010 8 a.m. 6 p.m. Monday Friday For Institutional Investor Use Only. Not for Use With or Distribution to the Public. 27
You should consider the investment objectives, risks, charges and expenses carefully before investing. Go to www.tiaa-cref.org/prospectuses for product and fund prospectuses that contain this and other information. Please read the prospectuses carefully before investing. TIAA-CREF Individual & Institutional Services, LLC and Teachers Personal Investors Services, Inc., members FINRA, distribute securities products. Annuity contracts and certificates are issued by Teachers Insurance and Annuity Association (TIAA) and College Retirement Equities Fund (CREF), New York, NY. Investment products may be subject to market and other risk factors. See the applicable product literature, or visit tiaa-cref.org for details. Investment, insurance and annuity products are not FDIC insured, are not bank guaranteed, are not deposits, are not insured by any federal government agency, are not a condition to any banking service or activity, and may lose value. For Institutional Investor Use Only. Not for Use With or Distribution to the Public. 28
Thank You