Retirement Plan Enhancements
Some exciting enhancements are coming to employee retirement plans at Virginia Tech in September. These changes are the result of a review of the plans by the university’s Retirement Advisory Committee and CAPTRUST, an independent and nationally recognized financial consultant firm. These changes will expand offerings, reduce fees, and provide tiered levels of investment management with a comparable investment menu across recordkeepers and plans.
While employees do not need to take any action at this time, they may review the new investments now, which will affect the following Virginia Tech retirement plans:
- Optional Retirement Plan (ORP) – for faculty only
- Cash Match Retirement Plan (Cash Match Plan) – for participating faculty and staff
- Tax Deferred Annuity (TDA) 403(b) Retirement Plan – for participating faculty, staff, and wage
- All other retirement plans administered by Virginia Tech
*Note: This does not affect the Virginia Retirement System, which is administered by the Commonwealth of Virginia.
Timeline
Following is a timeline of upcoming activities. No action is required at this time.
Date |
Activity |
Aug. 11 |
Tiers will be introduced and new funds available for investing on the TIAA (tiaa.org/vt) and Fidelity (netbenefits.fidelity.com/vatech) websites. Participants can schedule a meeting with a Fidelity or TIAA financial consultant through the websites to receive personalized advice on the new investment options. To schedule virtual and on-site one-on-one meetings with TIAA/Fidelity financial consultants:
|
Week of Aug. 14 |
A transition guide outlining details of the changes and available resources will be mailed to the participating employee's address of record with TIAA or Fidelity. The guide will outline how all current investments will be transferred to the new investment options. |
Sept. 11 - 2 p.m. |
In person and virtual information session Location: North End Center, Room 2420 Zoom: http://virginiatech.zoom.us/j/81493123628 |
| Sept. 12 - 10 a.m. | In person and virtual information session Location: North End Center, Room 2420 Zoom: https://virginiatech.zoom.us/j/81522398463 |
Sept. 12-15, 18-20 |
1:1 meetings by appointment with financial consultants. |
Sept. 25 (4 p.m. ET) |
Deselected funds will be removed and assets remaining in them will be moved to new funds. Details will be provided in the transition guide. |
Enhancement Details:
While the basic design of the retirement plans, including contribution rates and eligibility requirements, remain the same, the following enhancements will be added for plans managed by both TIAA and Fidelity:
- Expanded fund offerings: Both passive and index fund offerings will be expanded, and some lower-performing options removed. Both the TIAA and Fidelity target-date fund series remain unchanged.
- More uniform investment options across plans: The investment menus will be comparable for both TIAA and Fidelity, and similar across all plans. TIAA will continue to offer certain annuities in their investment lineup, including the TIAA Traditional guaranteed annuity.
- Lower investment expenses and administrative fees: Virginia Tech can leverage assets in the plans to negotiate lower investment share classes for some investments. The investment strategy remains the same, but you pay less in fees. The lower these expenses and fees, the more of your savings you retain.
- Self-directed brokerage option in all plans: Both TIAA and Fidelity will offer a self-directed brokerage option in all plans. This provides access to a broad range of mutual funds and fixed income securities beyond the established investment lineup for each plan. This option is meant for more experienced investors. These investments are not monitored by Virginia Tech.
- Tiered Investment Menu: The investment options will be organized into groups based on individual investment styles:
- Tier 1: Allocation tier: Offers target-date funds (TIAA-CREF Lifecycle funds and Fidelity Freedom® funds), which are a great option for those that want to “set it and forget it” by selecting a fund based on birth year which will automatically adjust and rebalance for you as you get closer to retirement.
- Tier 2: Passive managed funds: Offers lower-cost indexed options that attempt to match the performance of any of several market indexes (e.g., S&P 500®). This option can provide broad diversification within a single type of asset class.
- Tier 3: Active managed funds: Offers funds that have a manager who uses financial resources, forecasts, and their own judgment and experience to make investment decisions on what securities to buy, hold and sell within each portfolio.
- Tier 4: Self-directed brokerage option: Meant for experienced investors and provides opportunities to invest in a wide range of mutual funds and fixed income securities across several asset classes outside of the plans’ investment lineup.
- Deselected funds: Will be temporarily displayed and removed from the menu for investment when the plan enhancements are implemented. These funds will be reinvested into new investments automatically unless you make a different selection ahead of the transfer.
You can review the new investment tiers as well as the deselected funds on both TIAA and Fidelity’s websites by logging into your account.
Make the most of your Retirement Benefits
The upcoming enhancements provide an excellent opportunity for you to revisit your retirement plan options. Carefully review the transition guide for more details on key dates, specific action steps, upcoming information sessions, and resources available to you.
Have Questions?
If you have questions or need assistance, call TIAA at 800-842-2252, weekdays, 8 a.m. to 10 p.m. ET or Fidelity at 800-343-0860, weekdays, 8:30 a.m. to 8:30 p.m. ET.