As you’re conscious, the school just lately applied enhancements to the 403(b) Retirement Plan. These adjustments have been introduced in late September and communicated within the transition information mailed to your deal with on file in October. We wish to reply to some questions which were raised in regards to the timing, course of, and rationale for these adjustments. Whereas we can not cowl each matter inside this communication, I’ll make myself accessible on the subsequent College Council and Workers Council conferences to reply any questions as effectively.
We perceive that retirement financial savings are a delicate, advanced matter and that some workers have skilled a stage of aggravation and confusion associated to the adjustments and we apologize for any inconvenience that has been induced. The purpose of those adjustments was to not take something away however to reinforce accessible choices, notably for the overwhelming majority of workers who usually are not actively engaged with their funding choices.
Why the adjustments?
Ithaca Faculty is dedicated to offering our workers with aggressive retirement advantages and instruments that can help attaining their retirement saving objectives. The 403(b) Funding Committee, which incorporates the CFO, CHRO, advantages employees, in addition to college and employees representatives, meets recurrently to evaluate the plans and think about how one can enhance accessible choices and has endorsed these adjustments. This committee is suggested by Fiduciant, a third-party impartial funding advisor and has been working with each TIAA, the recordkeeper and administrator of our retirement plans and NFP, our advantages dealer, to implement the adjustments.
As a part of their evaluate course of and in an effort to raised align the plan with greatest practices and make enhancements for our contributors the committee determined to modernize the payment construction and to transition the strategy for our goal date traders (“do it for me” contributors). Nationwide Analysis exhibits that over 60% of workers don’t actively have interaction with their retirement funding plans in any respect. Due to this fact, it’s incumbent upon the fiduciaries of the 403(b) plan to make sure that it stays updated, modernized, and totally profiting from accessible choices to make sure that investments for all workers are working to their fullest potential.
In implementing these adjustments, nothing has been taken away from workers. Staff who want to retain their present funding configuration are free to take action.
Merely log in to your account at TIAA.org/ithaca to get began. From this one location, you may:
- Make funding adjustments to your present stability or future contributions
- Unsubscribe from the Goal Revenue Mannequin portfolios (choose out) at any time and make your individual funding elections
- Evaluate or change your beneficiary info
Some workers have requested why the adjustments have been rolled out with a default of “opting out” versus “opting in.” Common re-enrollment when altering a QDIA (Certified Default Funding Different) is a retirement plan business greatest apply. It allows plan sponsors like Ithaca Faculty to make sure contributors are allotted appropriately in the event that they don’t take any motion and supplies higher outcomes by permitting contributors to stay in an age-appropriate mannequin. All contributors can nonetheless actively select their very own funding allocation, however this apply ensures that those that take no motion will probably be benefiting from essentially the most up-to-date choices accessible.
What Does This Imply for You?
You now have entry to extra funding selections, instruments and companies that can assist you save on your monetary future. As a part of these enhancements, except you selected completely different funding choices, all future contributions and present balances have been directed to the plan’s new default funding possibility – the Goal Revenue Reasonable mannequin portfolio that aligns along with your anticipated retirement age. Any annuity balances remained in your Retirement Annuity (RA), Supplemental Retirement Annuity (SRA) and Group Supplemental Retirement Annuity (GSRA) accounts.
TIAA will proceed to be the service supplier for the administration and recordkeeping of your Ithaca Faculty retirement plans. You’ll be able to proceed to work with a TIAA monetary advisor as you select. We perceive that among the native TIAA advisors expressed that they weren’t totally conscious of the school’s plans or rationale for the adjustments. Whereas TIAA has assured us that communication and coaching was supplied to those advisors, they’re dedicated to working with the native workforce to make sure they totally perceive Ithaca Faculty’s transition and advantages of the goal date fashions.
If you happen to have been unable to attend the webinars held in November that reviewed the plan adjustments, you may entry a recording of the session right here. Extra assets relating to the plan adjustments are additionally accessible at TIAA.org/ithaca/transition, together with solutions to continuously requested questions (FAQs). Please go to the next hyperlink for solutions to some questions which were raised (Hyperlink) We’re additionally trying to schedule extra informational classes within the new yr to reply any remaining questions you could have.
Get Assist Reviewing Your Account
You will have a number of assets accessible to you to assist perceive the adjustments and deal with your questions.
- Fiducient Advisors supplies complete fiduciary governance and oversight companies to Ithaca Faculty, together with managing plan charges to make sure they’re affordable and aggressive (the Plan’s administrative payment requirement has been diminished by ~80% since 2021) and supplies funding monitoring and reporting companies (guarantee funds within the plan are performing effectively). Fiducient works with roughly 100 faculties and universities offering these identical companies and has roughly $275 billion in belongings below advisement.
- NFP is our present advantages dealer. They’re a non-public entity that’s 100% fairness and worker owned and has no affiliation with any IC particular person or entity. The school had beforehand been working with Mercer as our advantages dealer, however they’d not been proactive in advocating for the school’s pursuits. By switching to NFP and thru their re-negotiation of our present contracts with advantages distributors, the school has been capable of notice vital financial savings during the last two years with out negatively impacting advantages for our workers. As well as, NFP is a certified retirement plan consulting agency that gives an enhanced stage of funding choices and monetary training to our workers, in partnership with TIAA and at no extra price to particular person workers. NFP could be reached at 1-800-959-0071 or [email protected]
- TIAA stays our recordkeeper and administrator of our retirement plans. Staff can entry customized recommendation from a TIAA monetary marketing consultant by calling 800-732-8353, weekdays 8 a.m. to eight p.m. (ET) or visiting TIAA.org/schedulenow. Throughout your session, you may get solutions to your particular questions and develop a retirement motion plan tailor-made to your monetary scenario.
457(b) Deferred Compensation Plan
I might additionally like to handle questions which were raised relating to the school’s 457(b) plan.
Beneath the school’s 403(b) plan, all eligible workers can have elective deferred compensation as much as $19,500 per yr (2020 and 2021), going as much as $20,500 in 2022 with catch ups relying on age. These are deductions that come out of their paycheck pre-tax and are positioned of their TIAA account. That cash is invested and grows over time and is then taxed upon withdrawal. The school presently matches that contribution as much as 5% of the worker’s annual wage for all eligible workers.
The 457(b) plan, which was instituted in 2015, is an extra plan which is normal throughout non-profits. This plan permits HCEs (extremely compensated workers, or the highest 5% of workers by way of compensation no matter title, which incorporates some college) to contribute an extra $20,500 (or regardless of the present federal restrict is) of their very own pre-tax revenue (past the $20,500 famous above) to an account with TIAA. These contributions usually are not matched or supplemented in any method by the school, however reasonably supplies an possibility for these eligible workers to take a position their very own private funds. None of those people obtained any extra cash from the school past what has been accessible to different workers. All have been topic to the discount of the match contributions final yr, however have been capable of proceed to contribute their very own funds to the 457(b) plan. The SRA (Supplemental Retirement Plan) doc for the plan is publicly accessible and accommodates additional particulars.
These plans are quite common and are a vital element of being an Employer of Selection to be able to appeal to and retain prime expertise for government and college positions.
It is a lot of knowledge to soak up. Please know that we’re dedicated to creating certain you’ve entry to solutions to no matter questions you could have, both by connecting you to the fitting assets or by simply being accessible for a cellphone name. I might a lot reasonably be capable to have a direct dialog with you and reply your questions than to have misinformation circulating.
Wishing everybody a protected vacation with time to relaxation and rejuvenate for subsequent semester.
Vice President, Human Assets and Planning