Fit for Retirement: A Guide to Changing Your Investments

Fit for Retirement: A Guide to Changing Your Investments Dear RIT Colleague, In our previous communications regarding the simplification of RIT s Retirement Savings Plan, we identified what changes will occur, why and when. See below Reminder: What s Changing? For more information about the changes, go to RIT s HR website and click on the Retirement Plan Simplification logo. In this newsletter, we are focusing on how you can make changes to your investment selections for your payroll contributions and your existing account balances. We encourage you to make an active decision about how your retirement money will be invested in the future. There are many resources available to help you through this transition. I encourage you to take advantage of the educational sessions, individual appointments with Fidelity and TIAA-CREF retirement consultants, and the many other resources we have on the Retirement Simplification website. See the resources information on page 7 for web links and telephone numbers. If you have suggestions for what would be helpful to you and other participants, please let us know. We also encourage you to consider the following as you review your investments: Consider increasing your payroll contribution percentage; even a 1% increase can translate to a big difference in your final account balance when you retire. Sign up for automatic increase so that your contributions will automatically increase by your designated percentage (e.g. 1%, 2%) on RIT s salary increase date. If you are not contributing the maximum allowed by law but you wish to do so, contact your benefits representative in the HR department to sign up for our Max-Out Club. Participants in the Max-Out Club have their contribution percentage automatically calculated and adjusted to achieve the maximum they are legally allowed to contribute each year. For 2012, the annual maximum is $17,000 if you are under age 50 and $22,500 if you are age 50 and over. Renee R. Brownstein Associate Director, Human Resources REMINDER: WHAT S CHANGING? Basic and Voluntary Retirement Plans were merged into one plan, the RIT Retirement Savings Plan, as of January 1, 2012. RIT s Retirement Plan Investment Committee has selected a simplified menu of investment options, available beginning February 1, 2012, and will monitor the investment performance and fees associated with those options in Tier 1 (target retirement date funds), Tier 2 (core mutual funds) and Tier 3 (annuities). A new brokerage account, Fidelity s BrokerageLink, is added for sophisticated investors who prefer a broad range of investment choices; RIT is not responsible for monitoring investment performance or fees associated with BrokerageLink (Tier 4). Fees have been negotiated and reduced, and will be disclosed in a more transparent manner. KEY DATES: February 1, 2012 New four-tier funds become available; current funds remain available February 29 March 16, 2012 Investment changes to TIAA-CREF contributions cannot be made March 1, 2012 Eliminated and frozen funds no longer available for future contributions, transfers in, and rollovers March 15 and 16, 2012 Payroll contributions (depending on your pay date) will be directed to active funds only June 1, 2012 If you have not taken any action, existing balances in eliminated funds will be transferred to a Tier 1 default fund Note: The effective dates for investment changes to payroll contributions will be March 15 and 16, 2012. If you have not made an election directing your future contributions to an active fund by 4:00PM (ET) on February 29, your contributions will be directed to the appropriate Vanguard Target Retirement Series Fund based on your age (the default fund ). 1 January, 2012

HOW TO MAKE CHANGES The new fund lineup first becomes available in the RIT Retirement Savings Plan on February 1, and we want to make it easy for you to take action. Essentially, there are two categories of changes you may want to make: changes to the investment of your future payroll contributions (and RIT s matching contributions), and changes to the investment of your existing account balances. If you will be directing money to a new recordkeeper, see Opening an Account at Fidelity or TIAA-CREF on page 3. CHANGING THE RECORDKEEPER FOR YOUR FUTURE CONTRIBUTIONS If you wish to change the portion of your contribution that goes to either Fidelity and/or TIAA-CREF (the plan s recordkeepers), you will first need to complete the RIT Retirement Savings Plan Salary Reduction Agreement, which you can find and print from the HR website. This agreement directs RIT as to what percentage to withhold from your pay, and what portion of your contributions (and RIT s matching contributions) to send to each recordkeeper. Because of the significant changes in the fund lineup, we expect there will be many participants who will need to complete this form. We have posted some examples of completed forms to the Retirement Plan Simplification website to help you understand how to complete the form. Example: Jane is contributing 100% of her payroll contributions (and RIT s matching contributions) to TIAA-CREF today. She decides she is going to invest 50% of her future contributions in a Tier 1 target retirement date fund, for which Fidelity is the recordkeeper, and keep contributing the other 50% to TIAA-CREF. Jane must complete the RIT salary reduction agreement indicating that 50% of her contributions are to be directed to Fidelity and 50% to TIAA- CREF. If you wish to change the percentage of your pay that you are contributing, you can do it on the same form. Now is a good time to consider increasing your retirement savings! CHANGING YOUR INVESTMENT ELECTION FOR FUTURE CONTRIBUTIONS Whether your contributions are going to be directed to Fidelity or TIAA-CREF or both, you need to identify the investment funds to receive those contributions. You need to do this directly with Fidelity or TIAA-CREF or both. Here are directions for each of the recordkeepers: Fidelity: Log on to your Fidelity account. From the home page, click on Quick Links next to your plan name, select Change Investments from the drop-down menu, then click the Investment Elections link. Choose Select Lifecycle Fund or Select Funds. Enter the percentage of your payroll contributions to direct to each investment option your selections must add up to 100%. (Note: this only relates to the portion of your contribution which is directed to Fidelity). View the online prospectus for each fund in which you are investing. Confirm your investment elections. TIAA-CREF: Log into your TIAA-CREF account and go to the Manage My Portfolio tab. Select Change Where Future Contributions are Invested. Select the contract for which you wish to have your allocations changed. The chart on the right side will show the breakdown of your current elections and the percentages will be listed next to the appropriate funds. Only the investment choices available under the plan/contract you selected will be listed. To change, indicate the percentage next to the funds to which you want your future allocations made. The sum of all percentage values entered must total 100%. (Note: this only relates to the portion of your contribution which is directed to TIAA-CREF). Click the Preview selected allocation changes button to preview or Reset to start over. Preview selected allocation changes page. Select Back to make any adjustments or Submit to make allocation changes. January, 2012 2

OPENING AN ACCOUNT AT FIDELITY OR TIAA-CREF If you have not previously been a Fidelity or TIAA-CREF participant, the process for you to open an account with that recordkeeper has been streamlined. After you ve completed your salary reduction agreement (specifying the portion of your contributions that will go to Fidelity and/or TIAA-CREF) and returned it to HR, you should contact the recordkeeper either by phone or online to set up your user name and password, and select the funds to which you wish to direct your payroll contributions. TRANSFERRING YOUR EXISTING BALANCE(S) You may wish to transfer all or some of your existing balances. There are several potential scenarios for transfers. First, you can transfer account balances within your current recordkeeper: Transfer money from current Fidelity funds to funds in Tiers 1, 2 and 4, for which Fidelity is the recordkeeper Transfer money from current TIAA-CREF funds to funds in Tier 3, for which TIAA-CREF is the recordkeeper In-kind transfers from Fidelity funds to a BrokerageLink account. Transfers of account balances within Fidelity or within TIAA-CREF can be done online or by phone. Representatives of these firms will also be available to assist you with transferring balances at the Help Desk sessions described on page 7. To transfer an account balance within Fidelity: Log on to your Fidelity account. From the home page, click Quick Links next to your plan name, then click Change Investments. Under the Move Money Between Investments heading, click Exchanges. Complete fields for investments from which you want to move money (exchange), then click Continue. Complete the fields for investments to which you want to move money (exchange) and click Continue. Follow remaining prompts to the confirmation screen. To transfer an account balance within TIAA-CREF: Log into your TIAA-CREF account and go to Manage My Portfolio tab. Select Exchange Funds within a Plan. Select the contract you want to transfer money from. From the menu, select the fund you want to transfer from. Enter either the dollar amount or a percentage of the money you wish to transfer. The minimum amount that can be transferred is the lesser of $1,000 or 100% of the assets being transferred out. Select where you want the money to go (which investments). You must transfer into the new funds the same way you ve selected to transfer out (dollar to dollar or percent to percent). The total figure must match the amount or percentage you ve selected to transfer out. Click Continue to review the transfer. Review the Transfer. Click Continue to make the transfer, select Back to make any adjustments. Confirmation of your transfer. Canceling the transfer can be done before close of that business day. To check the status of a transfer or cancel a transfer, click on View/Cancel Pending Transfers on your Manage My Portfolio page. You may wish to transfer existing balances from one recordkeeper to another: Transfer money from Fidelity funds to funds in Tier 3, for which TIAA-CREF is the recordkeeper Transfer money from TIAA-CREF funds to funds in Tiers 1, 2 and 4, for which Fidelity is the recordkeeper Transfers between TIAA-CREF and Fidelity must be done using the appropriate forms. A retirement consultant from the firm you are transferring money to will need to assist you with this process, so we encourage you to contact them or attend a Help Desk session described on page 7. TO SET UP A BROKERAGE LINK ACCOUNT For information or for assistance with setting up a BrokerageLink account, contact a Fidelity retirement consultant (see page 7). 3 January, 2012

REBALANCING YOUR ACCOUNT Rebalancing is bringing your portfolio back to your original asset allocation mix. This is necessary because over time some of your investments may become out of alignment with your investment goals. You ll find that some of your investments will grow faster than others. By rebalancing, you ll ensure that your portfolio does not overemphasize one or more asset categories, and you ll return your portfolio to a comfortable level of risk. For more information on rebalancing, see the Fidelity and/or TIAA-CREF websites. If you invest in Tiers 1, 2 or 4, the investment options for which Fidelity is the recordkeeper, please note that the automatic rebalancing feature that currently exists will no longer be available beginning June 1, 2012. The reason is that the availability of the BrokerageLink account (Tier 4) is not compatible systematically with the automatic rebalancing feature. This affects you even if you are not participating in BrokerageLink, as it must be consistently applied to all participants in a particular plan. However, you can rebalance your Fidelity account yourself by taking these steps: Log on to your Fidelity account. From the home page, click on Quick Links next to your plan name, select Change Investments, then select Rebalance. Enter the percentage of the balance in each of your investment options that you wish to direct to each investment option you choose your selections must add up to 100%. Please note you need to do this separately for your BrokerageLink account, if you have one. View the online prospectus for each fund in which you are investing. Confirm your elections. BE SURE TO DESIGNATE YOUR BENEFICIARIES Fidelity If you have not previously participated in funds for which Fidelity is the recordkeeper, and will now be doing so, you will need to designate beneficiaries who would receive your account in the event of your death. Here are the steps you need to take: Online Log on to Fidelity s website. Click RIT Retirement Savings Plan. On the left margin of the screen, click Plan Information and Documents. On the next screen, click Plan Literature. A long screen with various plan documents and fund prospectuses will appear. Near the top of the screen, you will find 403(b) Beneficiary Form. Scroll down and click the box to Send Literature at the very bottom of the list, and it will be sent to your address on record in three to five business days. Complete the form and mail it to Fidelity at the address in General Instructions at the top of the form. Phone Call Fidelity and ask a representative to send you a beneficiary form. Complete the form and mail to Fidelity (address at the top of the form). TIAA-CREF If you have not previously participated in funds for which TIAA-CREF is the recordkeeper, and will now be doing so, you will need to designate beneficiaries who would receive your account in the event of your death. Here are the steps you need to take: Online Log into TIAA-CREF s website, click on My Profile, and then click on Beneficiary. Phone If you do not yet have online access to TIAA-CREF s website, or if you prefer to do your beneficiary designation by phone, call TIAA-CREF and they will walk you through the process of establishing a login ID and password and the beneficiary designation process. Fidelity or TIAA-CREF will send you a reminder about designating your beneficiaries, but you may wish to do it as soon as you enroll. For participants who will continue with a recordkeeper, you may wish to check on your beneficiaries to ensure they are up to date, using the processes described above. January, 2012 4

ALL ABOUT FEES In the past, plan participants have paid fees related to investments and plan administration. You may not have been aware of the fees because 403(b) plans were not required to disclose them. Any applicable fees were deducted from your investment returns before the investment gains and losses were posted to your account. Therefore, in the past, you have not seen the fee information on your retirement account statements. A new government regulation requires that fees paid within retirement plans will need to be disclosed to participants. Prior to May 31, 2012, Fidelity will provide the required fee disclosure notice to you on RIT s behalf. Beginning with first quarter statements, your statements from both Fidelity and TIAA-CREF will show fees that have been applied to your account balance. This is a positive step that will help you better understand the costs associated with the retirement plan. Please note: At the time of this writing, the government was considering a delay in the effective date of the new regulation, so it is possible that the timeline may change for fee disclosures. Other good news is that, in connection with our new fund lineup, we were able to negotiate lower fees than we have previously had. Over time, savings from fee reductions will translate to larger account balances for plan participants! In addition, it is the role of the RIT Retirement Plan Investment Committee to monitor these fees in the future for the funds in Tiers 1, 2 and 3. There are several main categories of fees: Investment Expenses These fees reflect an investment option s total operating expenses and include management and other fees associated with operating the mutual fund. They are often the largest component of retirement plan costs and are paid by all shareholders of the investment option. These fees are typically stated as a percentage of the assets invested in the option, and are commonly referred to as the expense ratio. The fund s expense ratio represents the cost participants pay to be invested in the fund. The fees for your particular investments are subtracted from your investment return. To estimate your annual cost for a mutual fund, multiply the expense ratio by your balance in that mutual fund. For example, if the fund s expense ratio is 0.45%, then that means for every $1,000 invested in the fund, $4.50 is deducted from your investment return on an annualized basis. If you have $10,000 in the fund, your annual fee of $45.00 will be deducted from your balance. You can view the funds investment expense ratios as well as investment performance for the plan s investment options on Fidelity s and TIAA-CREF s websites. For options in Tiers 1, 2 and 4: Go to www.fidelity.com. At the top of the home page, click Research. A series of additional links will appear. Click Mutual Funds. At the top right of the screen, there s a box to enter text, just to the right of the words Fund Facts. Enter a ticker symbol in the Fund Facts box and click Go. You can find the ticker symbols for the funds in the RIT plan s new lineup in the Investment Information Guide mailed to your home, or on the Retirement Plan Simplification website at the link called Four-Tier Investment Lineup. An example of a ticker symbol is VTWNX for the Vanguard Target Retirement 2020 Fund. A Results page will appear with a link that shows the fund name. Click on the link and you will see detailed performance information as well as fees identified as expense ratio. For Tier 3 TIAA-CREF annuities, go to http://www.tiaa-cref.org/rit for fund fact sheets. Plan administrative fees and expenses These fees include payment for services required for the ongoing maintenance of the plan, such as recordkeeping, legal, and accounting fees. Each participant in the plan pays a share of these fees. Some investments distribute a portion of the expense ratio directly to the recordkeeper to offset these administrative expenses. In the past, these amounts paid from the investments have eliminated any plan administrative fees being paid directly from your account. In the future, this process will continue whereby any amounts paid by the investments directly to the recordkeeper will reduce, and potentially eliminate, any administrative charges that would otherwise be paid from your account. If the amounts paid to the recordkeeper do not completely cover the administrative costs charged for the plan, there may be a small fee assessed to your account. Individual fees and expenses These fees and expenses are associated with a service or transaction that an individual participant may select. These fees are typically deducted from the account of an individual who uses the service or incurs the expense. Examples of individual fees and expenses are those associated with loans and BrokerageLink accounts. 5 January, 2012

The following notice is required by Federal law to be provided to participants: Notice of Qualified Default Investment Alternative As a participant or beneficiary in the RIT Retirement Savings Plan (the Plan), you have the right to choose how your Plan contributions and existing Plan account balances are invested in the investment choices available under the Plan. If you do not affirmatively provide investment instructions as to how contributions and account balances should be invested, the Plan will invest the contributions and account balances in what is known as the Plan s default investment (the Default Fund). Effective March 1, 2012, the Vanguard Target Retirement Date Fund series will become the Default Fund. You have the right to transfer out of the Default Fund to another available investment option at anytime. The Vanguard Target Retirement 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. The investment risk of each Target Retirement Date Fund changes over time as its asset allocation changes. The funds are subject to the volatility of the financial markets, including 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, commodity-related, and foreign securities. Principal invested is not guaranteed at any time, including at or after their target dates. The specific Vanguard Target Retirement Date Fund used as your Default Fund will be determined based on the assumption that you will retire at age 65. If you do not provide investment directions to the Plan, the following table indicates the fund that your contributions and existing balances will be directed based on your date of birth. The table also sets forth each fund s current expense ratio. Your Birth Date Vanguard Target Retirement Date Fund Name Annual Fund Expenses as a Percentage of Fund Assets* Before 1942 Vanguard Target Retirement Income Fund 0.17% 1942 1947 Vanguard Target Retirement 2010 Fund 0.17% 1948 1952 Vanguard Target Retirement 2015 Fund 0.16% 1953 1957 Vanguard Target Retirement 2020 Fund 0.17% 1958 1962 Vanguard Target Retirement 2025 Fund 0.18% 1963 1967 Vanguard Target Retirement 2030 Fund 0.18% 1968 1972 Vanguard Target Retirement 2035 Fund 0.19% 1973 1977 Vanguard Target Retirement 2040 Fund 0.19% 1978 1982 Vanguard Target Retirement 2045 Fund 0.19% 1983 1987 Vanguard Target Retirement 2050 Fund 0.19% 1988 and Later Vanguard Target Retirement 2055Fund 0.19% *Each of the Vanguard Target Retirement Date Funds expense ratios will change over time as the funds asset allocation changes. The Vanguard Target Retirement Date Funds do not impose short-term trading or similar fees. A full description of each of the funds was included in the Investment Information Guide. Also copies of the funds prospectus can be found at www.fidelity.com. To request changes to your account, to obtain additional information about the Plan s other investments, or to receive answers to your questions, log on to Fidelity NetBenefits at www. fidelity.com/atwork or call Fidelity at 1-800-343-0860, Monday through Friday (excluding New York Stock Exchange holidays) between 8:00 A.M. and midnight Eastern time to speak with a representative. IF YOU CURRENTLY CONTRIBUTE TO TIAA-CREF FUNDS Please note that you will be unable to change investment elections for payroll contributions to TIAA-CREF between February 29 (4PM) and March 16 (4PM). For those participants contributing to TIAA-CREF funds that will no longer be available for payroll contributions (categorized as eliminated or frozen ) who take no action to change their contribution election, RIT will make the necessary adjustment so the March 15 semi-monthly payroll or March 16 biweekly payroll contributions previously directed to these eliminated or frozen TIAA-CREF funds will be directed to the Tier 1 default fund at Fidelity. Before March 1 and after March 16, you can make investment election changes for future contributions. This does not affect participants who contribute to Fidelity or TIAA-CREF participants whose contributions are directed only to funds categorized as active as of February 29. It also does not affect your ability to transfer existing balances out of eliminated or frozen funds during this time. January, 2012 6

RESOURCES RIT Human Resources is providing a number of resources to help you through this transition. You will find information on a separate page on the HR website devoted to these (http://finweb.rit.edu/humanresources/benefits/retirement/simplified. html). We encourage you to check out the Frequently Asked Questions (FAQs) section we have been making updates regularly. If you have a question that is not posted: Click on the Submit a Question link on the Retirement Plan Simplification web page; or Call the Benefits Hot Line at (585) 475-5016/v and leave a detailed question as well as your name and contact information. Sign up to attend an educational session to hear from representatives from RIT Human Resources, Fidelity and TIAA- CREF. In addition, we have increased the number of days that the Fidelity and TIAA-CREF consultants are available for individual counseling sessions. You will also find the dates and reservation information on the Retirement Plan Simplification page. Help Desk Sessions (Hands-On Computer Help) Representatives from Fidelity Investments and TIAA-CREF will be available to help employees make investment changes online. All sessions will be held in Nathaniel Rochester Hall from 9:00 a.m. to 4:00 p.m. Come at your convenience anytime during the open hours. Number Date 1 Monday, February 20 2 Tuesday, February 21 3 Thursday, March 1 4 Friday, March 2 5 Monday, March 5 6 Tuesday, March 6 Number Date 7 Monday, April 30 8 Tuesday, May 1 9 Thursday, May 10 10 Friday, May 11 11 Monday, May 14 12 Friday, May 18 Fidelity Information: Website: www.fidelity.com/atwork Phone: (800) 343-0860/V (800) 259-9734/TTY To schedule an appointment, go to www.fidelity.com/atwork/reservations or call (800) 642-7131/V and (800) 259-9734/TTY For questions (contact by e-mail preferred): Bill Giesen E-Mail: william.giesen@fmr.com Direct phone: (585) 216-5636 Paul Bolles E-Mail: paul.bolles@fmr.com Direct: 800-248-4213 ext 3130 TIAA-CREF Information: Website: www.tiaa-cref.org/rit Phone: To schedule an appointment, go to www.tiaa-cref.org/rit or call (800) 732-8353/V and (585) 246-4610/TTY For questions: (800) 842-2776/v (800) 842-2755/TTY David Howe E-Mail: dhowe@tiaa-cref.org Direct phone: (585) 246-4607 Toll-free phone: (800) 209-3144, ext 4607 If you have questions during this process, feel free to contact your benefits representative in the Human Resources Department based on the first letter of your last name as follows: Your Last Name Contact Telephone E-Mail A-L Valerie Liegey (585) 475-5346 valpsn@rit.edu M-Z Brett Lagoe (585) 475-5983 bllpsn@rit.edu 7 January, 2012

Rochester Institute of Technology Department of Human Resources 8 Lomb Memorial Drive Rochester, NY 14623-5604 FIRST CLASS MAIL U.S. POSTAGE PAID ROCHESTER, NY PERMIT NO. 626 ATTENTION: Important information enclosed about new investment options available for RIT Retirement Savings Plan Participants