Fit for Retirement: A Guide to
Changing Your Investments
Dear RIT Colleague,
ent Savings Plan, we identified what changes
In our previous communications regarding the simplification of RIT’s Retirem
information about the changes, go to RIT’s
will occur, why and when. See below “Reminder: What’s Changing?” For more
HR website and click on the Retirement Plan Simplification logo.
ent selections for your payroll contributions
In this newsletter, we are focusing on how you can make changes to your investm
n about how your retirement money will be
and your existing account balances. We encourage you to make an active decisio
invested in the future.
age you to take advantage of the educational
There are many resources available to help you through this transition. I encour
consultants, and the many other resources
sessions, individual appointments with Fidelity and TIAA-CREF retirement
ation on page 7 for web links and telephone
we have on the Retirement Simplification website. See the resources inform
participants, please let us know.
numbers. If you have suggestions for what would be helpful to you and other
ents:
We also encourage you to consider the following as you review your investm
e can translate to a big difference in your
• Consider increasing your payroll contribution percentage; even a 1% increas
final account balance when you retire.
increase by your designated percentage (e.g.
• Sign up for automatic increase so that your contributions will automatically
1%, 2%) on RIT’s salary increase date.
do so, contact your benefits representative
• If you are not contributing the maximum allowed by law but you wish to
the Max-Out Club have their contribution
in the HR department to sign up for our “Max-Out Club.” Participants in
they are legally allowed to contribute each
percentage automatically calculated and adjusted to achieve the maximum
$22,500 if you are age 50 and over.
year. For 2012, the annual maximum is $17,000 if you are under age 50 and
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 TIAACREF.
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:
TIAA-CREF:
• Log on to your Fidelity account.
• Log into your TIAA-CREF account and go to the Manage My Portfolio tab.
• 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.
• Select Change Where Future Contributions are Invested.
• 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.
• 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. • Confirm your investment elections.
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
BE SURE TO DESIGNATE YOUR
BENEFICIARIES
REBALANCING YOUR ACCOUNT
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:
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.
Online
• Log on to Fidelity’s website.
• Click RIT Retirement Savings Plan.
• On the left margin of the screen, click Plan
Information and Documents.
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. • 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.
However, you can rebalance your Fidelity account
yourself by taking these steps:
• Complete the form and mail it to Fidelity at the
address in General Instructions at the top of the form.
• Log on to your Fidelity account.
Phone
• From the home page, click on Quick Links next to
your plan name, select Change Investments, then
select Rebalance.
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).
• 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.
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:
• View the online prospectus for each fund in which
you are investing.
Online
• Confirm your elections.
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
you have the right to choose how your
As a participant or beneficiary in the RIT Retirement Savings Plan (the Plan),
investment choices available under the Plan.
Plan contributions and existing Plan account balances are invested in the
utions and account balances should be
If you do not affirmatively provide investment instructions as to how contrib
is known as the Plan’s default investment
invested, the Plan will invest the contributions and account balances in what
ent Date Fund series will become the Default
(the Default Fund). Effective March 1, 2012, the Vanguard Target Retirem
le investment option at anytime.
Fund. You have the right to transfer out of the Default Fund to another availab
ng to retire around the year indicated
The Vanguard Target Retirement Date Funds are designed for investors expecti
vative over time. The investment risk
in each fund’s name. The funds are managed to gradually become more conser
ion changes. The funds are subject to the
of each Target Retirement Date Fund changes over time as its asset allocat
ents in the U.S. and abroad, and may be
volatility of the financial markets, including equity and fixed income investm
dity-related, and foreign securities. Principal
subject to risks associated with investing in high-yield, small-cap, commo
invested is not guaranteed at any time, including at or after their target dates.
t Fund will be determined based on the
The specific Vanguard Target Retirement Date Fund used as your Defaul
directions to the Plan, the following table
assumption that you will retire at age 65. If you do not provide investment
d based on your date of birth. The table
indicates the fund that your contributions and existing balances will be directe
also sets forth each fund’s current expense ratio.
Your Birth Date
Vanguard Target Retirement Date Fund Name
Before 1942
1942–1947
Vanguard Target Retirement Income Fund
Vanguard Target Retirement 2010 Fund
Vanguard Target Retirement 2015 Fund
1948–1952
1953–1957
1958–1962
1963–1967
1968–1972
1973–1977
1978–1982
1983–1987
1988 and Later
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 2055Fund
Annual Fund Expenses as a
Percentage of Fund Assets*
0.17%
0.17%
0.16%
0.17%
0.18%
0.18%
0.19%
0.19%
0.19%
0.19%
0.19%
change over time as the funds’ asset
*Each of the Vanguard Target Retirement Date Funds’ expense ratios will
impose short-term trading or similar fees.
allocation changes. The Vanguard Target Retirement Date Funds do not
ation Guide. Also copies of the funds’
A full description of each of the funds was included in the Investment Inform
account, to obtain additional information
prospectus can be found at www.fidelity.com. To request changes to your
log on to Fidelity NetBenefits at www.
about the Plan’s other investments, or to receive answers to your questions,
Friday (excluding New York Stock Exchange
fidelity.com/atwork or call Fidelity at 1-800-343-0860, Monday through
representative.
holidays) between 8:00 A.M. and midnight Eastern time to speak with a
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 TIAACREF. 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
1
2
3
4
5
6
Date
Monday, February 20
Tuesday, February 21
Thursday, March 1
Friday, March 2
Monday, March 5
Tuesday, March 6
Number
7
8
9
10
11
12
Date
Monday, April 30
Tuesday, May 1
Thursday, May 10
Friday, May 11
Monday, May 14
Friday, May 18
Fidelity Information:
TIAA-CREF Information:
Website: www.fidelity.com/atwork
Website: www.tiaa-cref.org/rit
Phone: (800) 343-0860/V
Phone: (800) 842-2776/v
(800) 259-9734/TTY
(800) 842-2755/TTY
To schedule an appointment, go to
www.fidelity.com/atwork/reservations or call (800) 642-7131/V and (800) 259-9734/TTY
To schedule an appointment, go to www.tiaa-cref.org/rit
or call (800) 732-8353/V and (585) 246-4610/TTY
For questions (contact by e-mail preferred):
David Howe
E-Mail: [email protected]
Direct phone: (585) 246-4607
Toll-free phone: (800) 209-3144, ext 4607
For questions:
Bill Giesen
E-Mail: [email protected]
Direct phone: (585) 216-5636
Paul Bolles
E-Mail: [email protected]
Direct: 800-248-4213 ext 3130
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
A-L
Contact
Valerie Liegey
Telephone
(585) 475-5346
E-Mail
[email protected]
M-Z
Brett Lagoe
(585) 475-5983
[email protected]
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