University of Puget Sound Retirement Savings Plan Frequently Asked Questions April 27, 2011 Puget Sound is committed to helping you achieve your retirement goals and adding value to your participation in the university s retirement savings plan. In order to support a retirement savings plan in the best interests of participants, Puget Sound is transitioning to a single recordkeeper and an open investment platform that will consolidate reporting for participants; better manage costs for participants; meet our regulatory and fiduciary responsibilities; and simplify selection of investments from a range of competitively performing options. OVERVIEW 1. What changes are being made to the University of Puget Sound Retirement Savings Plan? As of June 1, 2011, the retirement savings plan will contract with TIAA-CREF as its single recordkeeper and will offer a variety of fund options as part of an open investment platform. The university currently has two recordkeepers: TIAA-CREF and Vanguard. 2. What is an open investment platform? With an open investment platform, contributions will flow through a single recordkeeper (TIAA-CREF) and be directed by participants to an array of investment options with a history of competitive performance¹ (from TIAA-CREF, Vanguard, and other leading investment managers) screened by the Retirement Plan Advisory Committee (RPAC) with assistance from a retirement plan consultant. 3. What is a single recordkeeper? A single recordkeeper is where one company is responsible for the administration and operation of the plan. The benefits to you of a single recordkeeper include enrolling with a single company even if you choose funds from multiple investment managers, a consolidated statement, integrated investment advice and education, and simplified distributions. 4. Are contribution percentages changing? No. The change to a single recordkeeper and an open investment platform does not mean a change in the university s contributions to the plan on behalf of faculty and staff members. 5. Who made the decision to make these changes? Following new 403(b) fiduciary regulations, Vice President Sherry Mondou appointed a standing Retirement Plan Advisory Committee (RPAC) to ensure compliance with applicable laws and regulations, evaluate best practices in the administration of our 1
retirement savings plan, and make recommendations that are in the best interests of plan participants. The RPAC made the recommendations to Vice President Mondou, who advanced the recommendation to the President s Cabinet and the Executive Committee of the Board of Trustees and secured endorsement to proceed with the implementation plans. The board will act on a new plan document for the Retirement Savings Plan, codifying these changes, during the May board meeting. The Roth 403(b) option was recommended by the Benefits Task Force, and it made sense to implement it along with the other plan changes. 6. Why did the university decide to move from two retirement savings plan recordkeepers to one? After a thorough review and analysis of our retirement savings plan vendors, the university determined that working with a single recordkeeper would provide a consolidation service to plan participants and, when coupled with the open investment platform, provide flexibility in investment options with a history of competitive performance¹. It also helps us manage plan costs and helps to comply with applicable regulations. 7. Why did Puget Sound choose TIAA-CREF as the retirement savings plan s single recordkeeper? With the advice and counsel of its independent fiduciary consultant, Multnomah Group, Puget Sound chose TIAA-CREF as the single recordkeeper for the plan. In addition to the company s record in providing superior investment performance, low expense ratios, excellent customer service, and complete, cost-effective compliance and administrative services, selecting TIAA-CREF as the plan s recordkeeper also minimizes the impact on current plan participants, because TIAA-CREF manages the majority (88 percent) of current plan assets. 8. When does this change take effect? Vanguard will no longer serve as a recordkeeper starting June 2011. You will be able to allocate contributions to the new fund options under the open investment platform, when you receive your welcome packet from TIAA-CREF. Additional details will be sent to you in the mail. 9. Will there be future changes in the investment options available to me under the plan? As part of its ongoing responsibilities, the RPAC meets regularly to review the performance of investment options available under the plan. As needed, the RPAC will make recommendations, informed by the research, knowledge, and expertise of Multnomah Group consultants, to change the investment menu in support of participants retirement savings goals. PLANNING FOR THE CHANGE 2
1. How will I be affected? You will be sent a notice with additional information about the plan changes in early May. Updated content detailing the plan s new investment choices will be available beginning May 3, 2011 on University of Puget Sound s dedicated plan website at www.tiaa-cref.org/pugetsound. 2. I currently contribute to Vanguard. What happens to my current assets and future contributions? Investment options offered directly through Vanguard will be closed to future contributions on June 1, 2011. Additionally, on or around June 16, 2011, your existing Vanguard assets will be automatically transferred to the most similar investment options on the new investment menu. There are 6 Vanguard funds available on the new investment menu. You will be automatically enrolled into TIAA-CREF s open investment platform and be sent a welcome packet in the latter half of June. This packet will contain information regarding your newly issued TIAA-CREF contract(s), instructions on how to create a secure-access login to the TIAA-CREF website (if you don t already have one), and information regarding how to change your asset allocation and beneficiary designation. All future contributions will also be automatically directed to similar investment options on the new investment menu. After contracts have been issued, you will have the opportunity to change the way your future contributions are invested. 3. I currently contribute to TIAA-CREF. What happens to my current assets and future contributions? Existing assets in your current TIAA-CREF contracts (your legacy funds ) cannot be transferred to the new contracts automatically. No new contributions will be made to the funds in your existing contract(s) after June 1, 2011. The accumulations in your legacy funds will continue to earn interest or participate in the investment experience of the funds in which you re invested, and you will continue to have the opportunity to transfer your existing accumulations among the funds within the legacy funds contracts. Legacy funds will not be monitored by RPAC. As of the June 15, 2011 payroll, all future contributions will be automatically directed to similar investment options on the new investment menu. After contracts have been issued you will have the opportunity to change the way your future contributions are invested. You will be automatically enrolled into new TIAA-CREF contracts and will receive a welcome packet in mid-june. This packet will contain information regarding your newly issued TIAA-CREF contract(s), instructions on how to create a secure-access login to the TIAA-CREF website (if you don t already have one), and information regarding how to change your asset allocation and beneficiary designation. 3
4. Do TIAA-CREF legacy funds have to be moved to the new contract(s)? No. It s up to each participant to determine if and when he/she wants to move TIAA- CREF legacy funds into the new contract(s). There will be opportunities to meet with TIAA-CREF representatives on campus in order to assist you in making this decision. 5. I currently contribute to both TIAA-CREF and Vanguard. What happens to my current accumulations and future contributions? The answers to questions 2, 3, and 4 above apply here as well. Note that your legacy and new investments will begin to appear on a single consolidated statement from TIAA-CREF. 6. How will this change affect the costs associated with the plan? The vast majority of participants may experience lower costs. Some faculty and staff members currently investing in Vanguard may experience a slight increase in costs because some of the new investment options have slightly higher expense ratios than current Vanguard options in the same asset class. However, current Vanguard participants will no longer pay the quarterly administrative fee. A single recordkeeper with an open investment platform results in greater investment flexibility and access to low-cost investment options for all participants. 7. What will happen to my beneficiary designation? If you're currently invested only with TIAA-CREF, your existing beneficiary designation(s) will automatically transfer to your new contract(s). If you contribute to TIAA-CREF and Vanguard, your current TIAA-CREF beneficiary information will apply to your new TIAA-CREF contracts. If you're currently invested only with Vanguard, your beneficiary designation at Vanguard will be provided to TIAA-CREF by Vanguard and applied to your new contract(s). If allocations among your beneficiaries at Vanguard are not clearly defined, it will be set to "Estate unless and until you decide to change it. Regardless of your current investments, once you're enrolled in the new contract(s), you'll want to review your beneficiary designation to make any necessary updates to ensure that your beneficiary designation is appropriate for you. 8. I m retiring this year. Can I keep my accounts where they are until I retire? If you have existing funds with TIAA-CREF, they will remain in their current contract(s) with the current investment allocations unless you decide to transfer your existing assets into the new contract(s), which you may do at any time after you receive your new contract(s). If you have existing funds at Vanguard, those funds will be automatically transferred into similar investment options under the open investment 4
platform. All contributions made on and after June 1, 2011, will be directed to your new TIAA-CREF contract(s). Upon retiring, you ll have a number of retirement savings plan distribution choices available to help meet your investment and income needs. At that time, you ll want to review carefully the options available and consult with a TIAA-CREF consultant or your financial advisor to design a retirement income strategy suitable for you. GROUP PRESENTATIONS AND PERSONAL FINANCIAL COUNSELING SESSIONS 1. How can I find out more about this change, how it will affect me, and whether I should change my allocation mix? Group presentations will be available on campus the weeks of May 9 and May 16. Personal financial counseling sessions will be available on campus the weeks of May 23, June 6, and June 13. Group presentations and personal financial counseling sessions will be offered in the daytime and evenings to accommodate the needs of Puget Sound s faculty and staff members and their families. You will receive an e-mail message with available dates and times. 2. How do I register for a group presentation or personal financial counseling session? To attend a group presentation or schedule an on-campus, personal financial counseling session for investment advice, please call 866.928.4221 (press 0 to bypass the automated message). 3. Can I bring my spouse/partner to a group presentation or personal financial counseling session? Yes. Your spouse/partner is welcome to attend either or both a group presentation or a personal financial counseling session. 4. What do I need to bring with me to a TIAA-CREF personal financial counseling session? Please bring your current retirement account statements and your (and your spouse/partner s) most recent Social Security statement to help the TIAA-CREF consultant get a more complete financial picture. You may also want to bring information on other retirement assets that you and your spouse/partner have to allow the consultant to address your needs more holistically. 5. How long does a personal financial counseling session last? What if I need more time? A personal financial counseling session with a TIAA-CREF consultant lasts approximately 45 minutes. You may schedule as many appointments as you need to help assist you with your retirement planning. 6. When will the updated website be available? The website will be updated with detailed investment and fund information for your review in early May, at www.tiaa-cref.org/pugetsound. 5
ACCESSING AND LEARNING ABOUT THE FUNDS 1. How can I see my accounts and perform transactions online? Once you receive your new contract information, you can view your account information, change allocations, and make transfers by visiting www.tiaacref.org/pugetsound. You will need a user ID and password to use this portion of TIAA- CREF s website. In the packet you will receive from TIAA-CREF, you will find instructions on how to create a secured-access login to the TIAA-CREF website if you don t already have one. MORE INFORMATION For additional information about Puget Sound s retirement savings plan, please contact Human Resources (hr@pugetsound.edu or 253.879.3369). Please read the prospectus and consider the investment objectives, risks, charges and expenses carefully before investing. 6