2011 Retirement Plan Enhancements
In order to comply with new federal regulations and to provide enhanced investment options, Drexel University and Drexel University College of Medicine will be making changes to the Retirement Savings Plans (the "Plans") offered to faculty and professional staff beginning May 2, 2011. The changes focus mainly on the Plans' investments and fee structure and do not change the amount of Drexel University's or Drexel University College of Medicine's contribution or the providers available.
Please view the interactive explanation of the changes, the new investment options and a quiz to help you determine the best option that meets your needs and risk tolerance.
The changes will:
- Streamline the investment options. Currently the Plans' numerous investment options vary significantly across our three providers (Fidelity, TIAA-CREF, and Vanguard). By streamlining these options, we will have a similar structure with each provider that will:
- Simplify retirement investing for faculty and professional staff;
- Provide you multiple ways to choose your investments, based on your investment experience; and
- Create an environment where Drexel can more effectively monitor the investment options as required by law.
- Offer funds that have lower costs. Investment fees can eat away at your return. We have evaluated the investments offered to make sure any fees charged are reasonable. That includes offering many low-cost index fund options. Index funds seek to mirror the returns of a market benchmark resulting in lower fees because they avoid extra costs for investment research and selection.
What's Not Changing
- The contributions that Drexel and DUCOM make to your retirement account
- The Plans' eligibility requirements
- The three retirement vendors we use: TIAA-CREF, Fidelity and Vanguard
- The ten annuity-based funds offered by TIAA-CREF
- All three vendors will continue to offer their selection of Target Retirement Date funds
Transitioning to the New Program
- Many of the current mutual funds will be closed and not available under the new investment structure, unless purchased through the new brokerage window option.
- You will have a Special Election Period (May 2 through June 2, 2011) during which you can direct how you want your current balances and future contributions invested under the new plan structure. If the funds you are invested in are remaining in the plan you do not need to take any action. Representatives from TIAA-CREF, Fidelity and Vanguard will be available on campus in April and May, holding group meetings and offering individual counseling. Please see the Quick Links to the right for details.
- If you do not make an election during the Special Election Period, balances in funds that are closing and any future contributions directed to those funds will automatically be moved to an age-appropriate Target Retirement Date Fund for the appropriate vendor. Target Retirement Date Funds let you invest in a single option that offers you the advantages of pre-mixed, professionally managed, inexpensive funds with built-in diversification.
Special Election Period
Beginning May 2, all three vendors will have the new fund lineups running on their system platforms. If you do not want your balances in discontinued funds automatically moved to the most age-appropriate Target Retirement Date Fund, you must move your balances by June 2, 2011. Please note that you may also change your asset allocation or future contribution elections at any time after the transition to the new fund lineup. To move your assets to the new funds:
- Look for specific instructions from your retirement plan vendor to be sent to you at home.
- Plan on attending a group meeting for the retirement plan vendor you're investing with. Please see the Quick Links to the right for details.
- Make sure you know how to access your account(s) online.
- Schedule an individual counseling session with a non-commissioned representative of your retirement plan vendor. Please see the Quick Links for details.
Beginning May 2, 2011, the Plan will offer four different paths to allocate Plan investments.
Consider this if:
|Target Retirement Date Funds
- You want simplicity and convenience
- You want an investment professional to pick your investment mix
|Each fund is a mix of investment types, picked by investment professionals for a specific retirement date. You simply choose the fund based on the year that most closely matches your expected retirement date
|Core Mutual Funds
- You like to manage your own retirement savings
- You prefer a limited set of preselected investment choices
|A selection of mutual funds that provide a range of types of investments. With these funds, you can build and manage your own investment portfolio based on your time horizon and your comfort with risk.
- You want to build lifetime income
- You want investments that directly support this goal
|Ten annuity-based investment products that offer participants the opportunity to select investments that are paid out over their lifetime. (Note: Annuity options are only available through TIAA-CREF.)
|Self-Directed Brokerage Window
- You have a strong knowledge of investments
- You like to select, manage and monitor your own investments
|A new opportunity to choose from a broad range of mutual funds through a brokerage account within the Plans. You will have access to over 100 mutual fund families with over 1,000 mutual funds as potential investment options. Please note there may be fees associated with purchasing funds through the Brokerage Window.
May 2, 2011: Special election period opens. Investors will be able to choose which of the new investment options they want to use for their retirement savings portfolio.
June 2, 2011: Special election period ends.
June 3, 2011: If an election is not made during the Special Election Period, any assets held in funds that are not continuing under the new lineup will be automatically transferred to an age-appropriate Target Retirement Date Fund. This transfer will occur on June 3, 2011 for TIAA-CREF and Vanguard participants. To avoid short-term redemption fees, Fidelity accounts will transfer on September 6, 2011. At any time after the transfer you may move assets into any of the new fund options.
Accounts and assets will stay with an investor's current provider unless they choose to move their money to another vendor. To move your assets to another vendor, please contact Human Resources at AskHR.
Drexel Human Resources provides administrative support for all HR services and functions at Drexel University's separate, not-for-profit subsidiary, Drexel University College of Medicine.