Amherst College Defined Contribution Retirement Plan for Amherst College and Folger Shakespeare Library Employees

Transcription

1 Amherst College Defined Contribution Retirement Plan for Amherst College and Folger Shakespeare Library Employees Inside is detailed information you need to know about the transition to the new Investment Menu. Amherst College

2 1 Introduction 2 Upcoming Events 4 The Plan's New Investment Menu 6 Transitioning to the New Investment Menu 9 If You Currently Only Invest With Fidelity 10 What To Expect Going Forward 11 Updating Your Investment Choices 12 Building Your Retirement Portfolio 14 Frequently Asked Questions 16 Glossary of Investment Terms 2 Amherst College Defined Contribution Retirement Plan

3 The Amherst College Defined Contribution Retirement Plan (the Plan) Upcoming Enhancements We are introducing a new Investment Menu To help you navigate the complex world of retirement investing, we are offering a new Investment Menu, customized for Amherst College and Folger Shakespeare Library retirement plan participants. The new Investment Menu reflects a broad range of investment choices, from TIAA-CREF and other leading investment providers. We are moving to more cost-effective TIAA-CREF funds. We are replacing the Plan s TIAA-CREF Retirement Share Class mutual funds with more cost-effective TIAA-CREF Institutional Share Class mutual funds. This change will help reduce investment expenses. New Group Contracts Going forward, Retirement Choice Annuity (RC) and Retirement Choice Plus Annuity (RCP) contracts will be used for all future contributions after December 1, TIAA-CREF will provide all Recordkeeping Services for the Plan. All investments, whether TIAA-CREF funds or funds from other investment providers, will be coordinated through and recordkept by TIAA-CREF. Each year the recordkeeping performance of TIAA-CREF will be evaluated to ensure they are providing competitive services. You continue to have objective investment advice from TIAA-CREF. TIAA-CREF s advice services continue to be available to all retirement plan participants at no charge. Your consultant can create an investment plan, based on the new funds, that is tailored to your unique financial situation. Your consultant will determine whether or not you are on track for reaching your retirement goals and which asset allocation mix and investment strategy makes the most sense for you. Note: The Design of the Plan Will Not Change. Contribution rates, eligibility requirements, and all other aspects of the Plan remain the same. Amherst College Defined Contribution Retirement Plan 1

4 Learn More About the New Investment Menu Have questions about the upcoming changes? Learn more about your new investment choices at our on-campus events, online or via phone. 1. Attend a Financial Education Seminar Consultants from Baystate Fiduciary Advisors and TIAA-CREF, along with members of the Defined Contribution Retirement Plan Investment Committee, will provide detailed information on the new Investment Menu. As a thank you for your time, Goodie Bags will be distributed at each seminar. Plus, one ipad 2 will be given away at the end of each seminar day. The winner will be announced via an from Human Resources. Amherst College Dates: Date Time Location Thursday, October 27 1:30 p.m. 2:30 p.m. 3 p.m. 4 p.m. 4:15 p.m. 5:15 p.m. Friedmann Room: Keefe Campus Center Friday, October 28 Tuesday, November 1 10 a.m. 11 a.m. Noon 1 p.m. 2:30 p.m. 3:30 p.m. 10:30 a.m. 11:30 a.m. Noon 1 p.m. 2 p.m. 3 p.m. Friedmann Room: Keefe Campus Center Friedmann Room: Keefe Campus Center Folger Shakespeare Library Date: Date Time Location Wednesday, November 9 10 a.m. 11 a.m. Board Room 1 p.m. 2 p.m. 2 Amherst College Defined Contribution Retirement Plan

5 2. Schedule an On-Campus Individual Counseling Session TIAA-CREF Consultants will be available to discuss the new Investment Menu and answer your questions. Your consultant can create a personalized retirement portfolio, based on the new funds, tailored to your unique financial situation and goals. To schedule your session, call TIAA-CREF at , Monday through Friday, 8 a.m. to 8 p.m. (ET). This service is available to all retirement plan participants at no charge, on the following dates: Amherst College Date Location Thursday, November 3 Keefe Campus Center: Conference Room 208 Friday, November 4 Keefe Campus Center: Conference Room 208 Wednesday, November 9 Alumni House Thursday, November 10 Keefe Campus Center: Conference Room 208 Wednesday, November 16 Alumni House Thursday, November 17 Keefe Campus Center: Conference Room 208 Folger Shakespeare Library Date Friday, November 18 Location Board Room 3. Visit the Retirement Plan Website at Review updated investment information, portfolio strategies and performance details for the new Investment Menu Manage your account, including updating your retirement portfolio and beneficiary designation Access interactive retirement planning tools and calculators 4. If you are unable to attend a seminar, you can view the narrated presentation at For your convenience, the presentation will be available 24/7, starting October Call TIAA-CREF at Monday to Friday, 8 a.m. to 10 p.m. and Saturday, 9 a.m. to 6 p.m. (ET). Consultants are on hand to assist with any questions you may have about the retirement plan. Amherst College Defined Contribution Retirement Plan 3

6 The Plan s New Investment Menu The Election Period, from November 1 to December 1, occurs before the new Investment Menu takes effect on December 2. You have the opportunity to choose how your future contributions are invested during this Election Period. See the detailed instructions on page 11. Of course, you can make changes at any time going forward, after December 1. Your new Investment Menu includes the following annuity accounts and mutual funds. The enhanced Investment Menu consists of 33 funds, including Target Date Funds from T. Rowe Price. These new investment choices give you more flexibility to create a retirement portfolio that s tailored to your investment preferences and goals. Please see the Glossary of Investment Terms on page 16 for an explanation of asset classes and other investment terms. Beginning October 24, you can view investment objective, strategy and performance for the funds on the new Investment Menu online at Click on PLANS & INVESTMENTS and then select INVESTMENT CHOICES to view the individual fund information. 4 Amherst College Defined Contribution Retirement Plan

7 The Plan s New Investment Menu (continued) GUARANTEED MONEY MARKET BONDS MULTI-ASSET EQUITIES TIAA Traditional * Fixed Accounts CREF Money Market Account Money Market Metropolitan West High Yield Bond (MWHIX) High Yield Bond PIMCO Total Return Institutional (PTTRX) Intermediate-Term Bond Templeton Global Bond (TGBAX) World Bond T. Rowe Price Retirement 2005 (TRRFX) Target Date T. Rowe Price Retirement 2010 (TRRAX) Target Date T. Rowe Price Retirement 2015 (TRRGX) Target Date T. Rowe Price Retirement 2020 (TRRBX) Target Date T. Rowe Price Retirement 2025 (TRRHX) Target Date T. Rowe Price Retirement 2030 (TRRCX) Target Date T. Rowe Price Retirement 2035 (TRRJX) Target Date T. Rowe Price Retirement 2040 (TRRDX) Target Date T. Rowe Price Retirement 2045 (TRRKX) Target Date T. Rowe Price Retirement 2050 (TRRMX) Target Date T. Rowe Price Retirement 2055 (TRRNX) Target Date T. Rowe Price Retirement Income (TRRIX) Retirement Income CREF Stock Account Large Blend TIAA-CREF Equity Index Institutional (TIEIX) Large Blend T. Rowe Price New America Growth (PRWAX) Large Growth TIAA-CREF Large-Cap Growth Index Institutional (TILIX) Large Growth Invesco Diversified Dividend Institutional (DDFIX) Large Value TIAA-CREF Growth & Income Institutional (TIGRX) Large Blend ING Mid-Cap Opportunities (NMCIX) Mid-Cap Growth TIAA-CREF Mid-Cap Growth Institutional (TRPWX) Mid-Cap Growth RidgeWorth Mid-Cap Value Equity (SMVTX) Mid-Cap Value TIAA-CREF Mid-Cap Value Institutional (TIMVX) Mid-Cap Value TIAA-CREF Small-Cap Blend Index Institutional (TISBX) Small Blend TIAA-CREF Social Choice Equity Institutional (TISCX) Large Blend BlackRock International Opportunities Portfolio (BISIX) Foreign Large Blend DFA Emerging Markets Value Fund (DFEVX) Diversified Emerging Markets E.I.I. International Property Institutional (EIIPX) Global Real Estate Prudential Jennison Natural Resources (PNRZX) Natural Resources LOWER RISK MEDIUM RISK HIGHER RISK Note: The Morningstar category is in purple. * The TIAA Traditional Annuity is a guaranteed insurance contract and not an investment for Federal Securities Law purposes. Annuity account options are available through annuity contracts issued by TIAA or CREF. These contracts are designed for retirement or other long-term goals, and offer a variety of income options, including lifetime income. Payments from the variable annuity accounts are not guaranteed and will rise or fall based on investment performance. Mutual funds do not offer the range of income options available through annuities. Please note that as with all mutual funds, the principal value of a target date isn't guaranteed. Also, the target date represents an approximate date when investors may plan to begin withdrawing from the fund. After the target date has been reached, some of these funds may be merged into a fund with a more stable asset allocation. Amherst College Defined Contribution Retirement Plan 5

8 Transitioning to the New Investment Menu If You Currently Invest With TIAA-CREF: Future Contributions Redirected To Plan s Default Fund The funds listed below, on the current Investment Menu, will remain on the new Investment Menu. However, as we transition to the new Investment Menu, your future contributions to these funds will automatically be re-directed to the Plan s default fund, which is an Age-Appropriate Target Date Fund from T. Rowe Price. During the Election Period, November 1 to December 1, you have the opportunity to update your investment choices, for future contributions, based on the new Investment Menu. If you do not update your investment choices, they will remain in an Age-Appropriate Target Date Fund from T. Rowe Price. To update your investment choices, for future contributions, based on the new Investment Menu, see the instructions on page 11. Funds on Current Investment Menu (Also available after 12/1 On New Investment Menu) Future Contributions, After 12/1, Redirected To An Age-Appropriate Target Date Fund (Unless You Take Action) TIAA-CREF Equity Index Institutional TIAA-CREF Growth & Income Institutional TIAA-CREF Large-Cap Growth Index Institutional TIAA-CREF Mid-Cap Growth Institutional TIAA-CREF Mid-Cap Value Institutional TIAA-CREF Small-Cap Blend Index Institutional Age-Appropriate T. Rowe Price Target Date Fund TIAA-CREF Social Choice Equity Institutional TIAA Traditional CREF Stock CREF Money Market 6 Amherst College Defined Contribution Retirement Plan

9 Transitioning to the New Investment Menu (continued) If You Currently Invest With TIAA-CREF: Frozen Funds As we transition to the new Investment Menu, the following TIAA-CREF Funds on the current Investment Menu will be frozen. Existing Assets: Your existing assets in a frozen fund will remain where they are unless you choose to transfer them to the new Investment Menu. After market close on December 5, you will not be able to transfer assets from one frozen fund to another frozen fund. You can transfer your existing assets to the new Investment Menu, beginning market open on December 6. Future Contributions: If you do not take action, your future contributions to these closed funds will be redirected to an age-appropriate T. Rowe Price Target Date Fund, for contributions received after December 1. You can update your investment choices based on the new Investment Menu when you receive your new Welcome Kit(s). See page 11 for detailed instructions. To determine how your current assets and future contributions will be affected by the transition to the new Investment Menu, locate your most recent Investment Statement from TIAA-CREF. Then, compare your investments to the chart below. If a fund is listed below, it is classified as "frozen" going forward. However, please note investments in frozen funds continue to be subject to market gains and losses and are accessible for distribution in the same manner as they are currently. Frozen Funds On Current Menu (No Further Contributions Allowed After 12/1/11) Future Contributions, After 12/1, Redirected To An Age-Appropriate Target Date Fund (Unless You Take Action) TIAA-CREF LIFECYCLE 2010-RTMT TIAA-CREF LIFECYCLE 2015-RTMT TIAA-CREF LIFECYCLE 2020-RTMT TIAA-CREF LIFECYCLE 2025-RTMT TIAA-CREF LIFECYCLE 2030-RTMT TIAA-CREF LIFECYCLE 2035-RTMT TIAA-CREF LIFECYCLE 2040-RTMT TIAA-CREF LIFECYCLE 2045-RTMT TIAA-CREF LIFECYCLE 2050-RTMT TIAA-CREF LIFECYCLE RTMT INC-RTMT TIAA-CREF GR & INC-RTMT TIAA-CREF INTL EQ-RTMT TIAA-CREF INTL EQ IDX-RTMT TIAA-CREF LG-CAP GR IDX-RTMT TIAA-CREF LG-CAP VAL-RTMT TIAA-CREF LG-CAP VAL IDX-RTMT TIAA-CREF MID-CAP GR-RTMT TIAA-CREF MID-CAP VAL-RTMT TIAA-CREF REAL EST SECS-RTMT TIAA-CREF SM-CAP BL IDX-RTMT TIAA-CREF SM-CAP EQ-RTMT TIAA-CREF SOCIAL CH EQ-RTMT TIAA-CREF S&P 500 IDX-RTMT TIAA-CREF EQ INDEX-RTMT TIAA Real Estate CREF SOCIAL CHOICE CREF BOND MARKET CREF GLOBAL EQUITIES CREF GROWTH CREF EQUITY INDEX CREF INFLATION-LINKED BOND Age-Appropriate T. Rowe Price Target Date Fund Amherst College Defined Contribution Retirement Plan 7

10 Transitioning to the New Investment Menu (continued) If You Currently Invest With TIAA-CREF: Assets Move To More Cost-Effective Funds on December 2 On December 2, 2011, we're moving all existing assets in the plan s TIAA-CREF Retirement Share Class mutual funds (including frozen funds) to more cost-effective TIAA-CREF Institutional Share Class mutual funds. This change will help reduce investment expenses. With the exception of their lower expenses, the TIAA-CREF Institutional Share Class funds have the same investment strategies as the TIAA-CREF Retirement Share Class funds. Please note that annuities offered by TIAA-CREF are not impacted by this change. You will receive a confirmation notice when this change occurs in early December. You do not need to take any action as a result of this change. The following chart shows how your current assets will be moved to the more cost-effective funds: Frozen funds are highlighted in purple. Please note that these funds are frozen to new contributions, per the chart on page 7, after December 1, Closing Funds In Retirement Share Class Current Assets Moving To Institutional Share Class Funds Replacement Fund Ticker TIAA-CREF Lifecycle 2010 Retirement Class TIAA-CREF Lifecycle 2010 Fund Institutional Class TCTIX TIAA-CREF Lifecycle 2015 Retirement Class TIAA-CREF Lifecycle 2015 Fund Institutional Class TCNIX TIAA-CREF Lifecycle 2020 Retirement Class TIAA-CREF Lifecycle 2020 Fund Institutional Class TCWIX TIAA-CREF Lifecycle 2025 Retirement Class TIAA-CREF Lifecycle 2025 Fund Institutional Class TCYIX TIAA-CREF Lifecycle 2030 Retirement Class TIAA-CREF Lifecycle 2030 Fund Institutional Class TCRIX TIAA-CREF Lifecycle 2035 Retirement Class TIAA-CREF Lifecycle 2035 Fund Institutional Class TCIIX TIAA-CREF Lifecycle 2040 Retirement Class TIAA-CREF Lifecycle 2040 Fund Institutional Class TCOIX TIAA-CREF Lifecycle 2045 Retirement Class TIAA-CREF Lifecycle 2045 Fund Institutional Class TTFIX TIAA-CREF Lifecycle 2050 Retirement Class TIAA-CREF Lifecycle 2050 Fund Institutional Class TFTIX TIAA-CREF Lifecyle RTMT INC Retirement Class TIAA-CREF Lifecycle Retirement Income Fund Institutional Class TLRIX TIAA-CREF GR & INC Retirement Class TIAA-CREF Growth & Income Fund Institutional Class TIGRX TIAA-CREF INTL EQ Retirement Class TIAA-CREF International Equity Fund Institutional Class TIIEX TIAA-CREF INTL EQ IDX Retirement Class TIAA-CREF International Equity Index Fund -Institutional Class TCIEX TIAA-CREF LG-CAP GR IDX Retirement Class TIAA-CREF Large-Cap Growth Index Fund Institutional Class TILIX TIAA-CREF LG-CAP VAL Retirement Class TIAA-CREF Large-Cap Value Fund Institutional Class TRLIX TIAA-CREF LG-CAP VAL IDX Retirement Class TIAA-CREF Large-Cap Value Index Fund Institutional Class TILVX TIAA-CREF MID-CAP GR Retirement Class TIAA-CREF Mid-Cap Growth Fund Institutional Class TRPWX TIAA-CREF MID-CAP VAL Retirement Class TIAA-CREF Mid-Cap Value Fund Institutional Class TIMVX TIAA-CREF REAL EST SECS Retirement Class TIAA-CREF Real Estate Securities Fund Institutional Class TIREX TIAA-CREF SM-CAP BL IDX Retirement Class TIAA-CREF Small-Cap Blend Index Fund Institutional Class TISBX TIAA-CREF SM-CAP EQ Retirement Class TIAA-CREF Small-Cap Equity Fund Institutional Class TISEX TIAA-CREF SOCIAL CH EQ Retirement Class TIAA-CREF Social Choice Equity Fund Institutional Class TISCX TIAA-CREF S&P 500 IDX Retirement Class TIAA-CREF S&P 500 Index Fund Institutional Class TISPX TIAA-CREF EQ INDEX Retirement Class TIAA-CREF Equity Index Fund Institutional Class TIEIX 8 Amherst College Defined Contribution Retirement Plan

11 If You Are Currently Investing With Fidelity Investments: What You Need to Know If you currently only invest in funds offered by Fidelity that are being removed from the Investment Menu, by November 1, you will need to complete a TIAA-CREF Enrollment Package, select investments for your future contributions from the new Investment Menu and designate your beneficiary. Human Resources will assist you with this process. Your assets at Fidelity can remain where they are, unless you choose to transfer them to the new Investment Menu. Your TIAA-CREF Consultant can assist you with this process during your Individual Counseling Session. Amherst College Defined Contribution Retirement Plan 9

12 What to Expect Going Forward: All Current Employees Going forward, Retirement Choice Annuity (RC) and Retirement Choice Plus Annuity (RCP) contracts will be used for all future contributions after December 1, Late October: Welcome Kits In late October, you will receive Welcome Kit(s) from TIAA-CREF for the new contracts for future contributions after December 1. The Kit(s) will contain: An enrollment confirmation statement: Your investment for future contributions will be listed as an age-appropriate T. Rowe Price Target Date Fund. Information on how you can update your investment choices based on the new Investment Menu. Information on services available to you as a TIAA-CREF participant. November 1 December 1: Election Period The Plan is funded by contributions made by your employer and by you. As a participant in the Plan, you take an active role in making investment decisions. From November 1 to December 1, before the New Investment Menu takes effect, you have the opportunity to choose how your future contributions are invested. See the detailed instructions on page 11. Of course, you can make changes at any time going forward, after December 1. If you do not update your investment choices for future contributions, they will be automatically invested for you in an age-appropriate Target Date Fund managed by T. Rowe Price. Please see the separate Notice and Fund Fact Sheet that was mailed with your Transition Guide. Until Market Close on December 5 Existing assets can be moved between the funds on the current Investment Menu until market close on December 5. After that time, you will no longer be able to transfer existing assets to any of the frozen funds. See the detailed information on page 7. December: New Group Contracts Going forward, Retirement Choice Annuity (RC) and Retirement Choice Plus Annuity (RCP) contracts will be used for all future contributions after December 1, In December, you will receive a certificate based on the TIAA-CREF contract type(s) you currently have in the Plan. If you currently only have a Retirement Annuity (RA) contract then you will only receive a new Retirement Choice Annuity (RC) Certificate. If you have a Retirement Annuity (RA), Group Supplemental Retirement Annuity (GSRA) and/or Supplemental Retirement Annuity (SRA) contract, you will receive both Retirement Choice Annuity (RC) and Retirement Choice Plus Annuity (RCP) Certificates per the chart below: TIAA-CREF Retirement Annuity (RA) New TIAA-CREF Retirement Choice Annuity (RC) TIAA-CREF Supplemental Retirement Annuity (SRA) TIAA-CREF Group Supplemental Retirement Annuity (GSRA) New TIAA-CREF Retirement Choice Plus Annuity (RCP) New TIAA-CREF Retirement Choice Plus Annuity (RCP) Recordkeeping Change: New Plan Number As part of the transition to the new Investment Menu, we are creating a new plan number within the TIAA-CREF recordkeeping system and merging our existing plan with the new plan market close on December 5, The merger of the existing plan into the new plan will result in one consolidated Investment Statement for both plans starting in You will receive a confirmation notice when this change occurs. Going forward, you will see the new plan number on your Quarterly Investment Statements and on the retirement plan website at amherst. This is simply a recordkeeping change to accommodate the new investment menu. 10 Amherst College Defined Contribution Retirement Plan

13 Updating Your Investment Choices From November 1 to December 1, before the new Investment Menu takes effect, you have the opportunity to choose how your future contributions are invested. Of course, you can make changes at any time going forward, after December 1. Please note, however, that the "frozen funds" listed on page 7 cannot receive new contributions after December 1. In addition, you cannot transfer assets from one frozen fund to another frozen fund after market close on December 5. To update your retirement portfolio: 1. Review the new Investment Menu, along with the information on frozen funds and the change to lower-cost funds for certain TIAA-CREF assets. 2. Attend a Financial Education Seminar. 3. Schedule a One-on-One Investment Counseling Session with a TIAA-CREF Consultant and bring your 3rd Quarter Investment Statement(s) to your session. Once you are comfortable with your retirement portfolio strategy, you can update your portfolio. You will need to be ready with the following information: Your TIAA-CREF Contract Number(s) or current log-in information. If you need assistance locating this information, call TIAA-CREF at Investment choices and allocations for your future contributions based on the new Investment Menu. Your Social Security Number. Your Beneficiary s Social Security Number (if available), Birth Date and Address. (If your Beneficiary is a trust, you will need to include the trust name, the date the trust was established, and the type of trust.) Making Changes Online To update your portfolio online, go to and follow the instructions to access and update your account. For future contributions, your investment will be listed as an age-appropriate T. Rowe Price Target Date Fund. To update your investments, be sure to have your choices and allocations ready, based on the new Investment Menu. Note, you will see both the current menu and the new menu. Be sure to only select funds that will be available on the new menu. Making Changes by Phone If you prefer, you can update your retirement portfolio by calling TIAA-CREF at , Monday through Friday, 8 a.m. to 10 p.m. or Saturday, 9 a.m. to 6 p.m. (ET). Be sure to have your investment choices and allocations ready, based on the new Investment Menu. Amherst College Defined Contribution Retirement Plan 11

14 Building Your Retirement Portfolio The Plan s new Investment Menu offers you two ways to invest for retirement: 1) The One-Step Investing Strategy and 2) The Choose Your Own Investment Mix Strategy. What Type Of Investor Are You? Select Option 1: The One-Step Investing Strategy If you are a passive investor Select Option 2: Choose Your Own Investment Mix If you are an active investor Option 1: The One-Step Investing Strategy Through this strategy, you choose a Target Date Fund that s specifically designed to adjust its asset allocation and risk profile throughout your working and retirement years. Target Date Funds available through the new Investment Menu offer you a convenient way to have your retirement savings professionally managed and automatically rebalanced. With Target Date Funds, all you need to do is select the fund with the date that s closest to the year of your expected retirement, and the fund s professional investment managers will do the rest. (Note: You are not required to retire in that year. The estimated retirement year is used to develop the asset allocation mix in your retirement portfolio.) The objective of each Target Date Fund is to seek high total returns over time through a combination of capital appreciation and income. Each Target Date Fund combines different types of assets with underlying funds that invest in various stocks, bonds and the money market starting off with an asset allocation generally considered appropriate for investors at a particular stage of retirement planning. Over time, the fund s professional investment managers readjust the allocations to maintain an appropriate balance of various assets, using a progressively more conservative portfolio, as you move through your career and into retirement. The target date represents an approximate date when investors plan to begin withdrawing from the fund. After the target date has been reached, some of these funds may be merged into a fund with a more stable asset allocation. As with all mutual funds, the principal value of a Target Date Fund isn t guaranteed. In addition to the age-appropriate retirement date, you should also consider such factors as risk tolerance, personal circumstances and your complete financial situation before choosing to invest in a Target Date Fund. Your TIAA-CREF Consultant can explain the One-Step Investing Strategy in more detail. Option 2: Choose Your Own Investment Mix Through the Choose Your Own Investment Mix strategy, you create your own portfolio using the funds on the new Investment Menu. The menu offers a wide range of funds from a variety of companies in the major asset classes, which include equity (stock), bond, real estate, guaranteed and money market funds and accounts. If you re interested in building your retirement portfolio, you can get help from a TIAA-CREF Consultant on how best to allocate your assets and create a retirement plan tailored to your investment preferences and needs. Retirement Plan Advice At No Additional Charge To You As a participant in the Plan, you have access to personalized, objective investment advice from TIAA-CREF. Through this advice service, a TIAA-CREF Consultant will help you select the accounts and funds that are appropriate for your investment preferences and goals. This service is available at no additional cost to you. TIAA-CREF s objective advice is designed to help you answer three questions: 1. How much do I need to save now? 2. How should I allocate my retirement portfolio? 3. When can I retire? To schedule your One-on-one Counseling Session: Call TIAA-CREF at , Monday through Friday, from 8 a.m. to 8 p.m. (ET). 12 Amherst College Defined Contribution Retirement Plan

15 Building Your Retirement Portfolio (continued) Learn The Basics The best way to begin the process of choosing your retirement plan investments is by reviewing some key investment principles. Asset Allocation The way you allocate your assets is the foundation of your portfolio s performance. The goal of asset allocation is to create the most efficient mix of investments or asset classes that have the potential to appreciate while meeting your tolerance for risk or investment volatility. What you want to do is combine asset classes that tend to perform differently from one another under certain market conditions. How you divide your money among the broad asset classes is more important than choosing the specific funds within those classes. Past performance is no guarantee of future results. Diversification The key to smart asset allocation and one of the best ways to manage risk is to diversify, or spread the risk over a variety of investments. Since different types of investments may perform better than others at different times, diversification helps you offset the volatility (and potential losses) of a single investment and take greater advantage of the strengths of several asset classes working together. Of course, diversification is no guarantee against loss. To ensure adequate diversification, most investment experts recommend that you include at least three asset classes in your long-term portfolio. Diversifying does not guarantee that you won t lose money, but it can keep you from being overexposed to a major downturn in one type of investment. How much you allocate to each of the asset classes (and the accounts within those classes) will depend on your particular goals, tolerance for risk and preferences. Risk and Return At the cornerstone of any savings or investment plan is the relationship between risk and return. As a rule, the potential return on any investment corresponds to its level of risk. Most experts agree that you shouldn t take too much risk with your pension accumulation. On the other hand, it s important to take enough risk to build the assets to finance the retirement you want. Maintaining that delicate balance is the challenge of successful asset allocation. Your Time Horizon When it comes to retirement, your investment perspective should always be long term, because your actual time horizon should extend far beyond the day you actually retire. To keep pace with inflation, your money will have to keep working even after you stop, so you ll need to maintain some growth potential once you ve begun making withdrawals. How can a long-term perspective affect your allocation decision? If you re just getting started with your retirement savings strategy, you have a longer time horizon to absorb and recover from the ups and downs of the markets. So you may want to consider allocating a greater percentage of your contributions to stocks, which have historically offered greater potential for growth than other options. Past performance, of course, does not guarantee future results. As you approach retirement, you may be less willing to take risks with your retirement portfolio. So you may want to adjust your allocation mix to emphasize less volatile investments. Many people move accumulated funds to more conservative accounts at this stage. Other Savings and Investments It s important to coordinate the decisions you make about your retirement plan allocations with any other assets you re likely to have during retirement (such as Social Security benefits, defined benefit plans or IRAs). All of these savings will need to work together to produce the retirement income you re looking for. Please also refer to the Glossary of Investment Terms on page 16 for more information to consider before investing. Amherst College Defined Contribution Retirement Plan 13

16 Frequently Asked Questions. 1. Why did Amherst College decide to make changes to the Defined Contribution Retirement Plan Investment Menu? As a result of new regulations, 403(b) plans are subject to increased oversight and reporting. This was an opportunity for us to review and improve the quality of the plan's investment options. These Investment Menu changes enable us to more effectively comply with the new 403(b) plan regulations. 2. How were the funds on the new Investment Menu selected? To streamline and improve the quality of the plan s investment options, we have selected a more focused set of best-in-class funds with a broad range of asset class options. The review process included assistance from an investment advisory firm, Baystate Fiduciary Advisers, Inc. Selection criteria includes, but is not limited to fund's investment objective, strategy and style, inception date, portfolio manager tenure, assets under management, net expense ratio and various risk and return measures. 3. When will I be able to review the new Investment Menu Online? You can review the new Investment Menu via the dedicated retirement plan website at amherst, beginning October 24. Please note, from November 1 to December 1 you will see both the current Investment Menu and the new Investment Menu. 4. I am currently contributing to Fidelity Investments. What happens to my current assets and future contributions? TIAA-CREF will be the sole recordkeeper for the Plan for contributions made after December 1, Your current assets can remain with Fidelity unless you choose to transfer them to the plan s new investment choices. For future contributions, you can select your investment choices from the new Investment Menu. You can do this beginning November 1. If you do not choose your investment choices for future contributions by December 1, your contributions will be automatically placed in an age-appropriate Target Date Fund on the new Investment Menu. 5. How do I log into my new account online? Once you receive your new TIAA-CREF Welcome Kit(s), you can view your account online at 6. Can I leave my Fidelity money with Fidelity? Yes. Note that transfers between closed or frozen Fidelity funds will not be permitted after market close on December If I choose to move my Fidelity money, is there a time limit? No. You can move your current assets from Fidelity in part or in total at any time to the new Investment Menu. 8. I am currently contributing to TIAA-CREF. What happens to my current assets and future contributions? If you have assets in the TIAA-CREF funds that are being frozen, those assets will remain where they are unless you choose to transfer them to the new Investment Menu. If you have assets in the Retirement Share Class Funds, those assets will be moved to the lower-cost Institutional Share Class Funds. Your future contributions, after December 1, will be directed to an age-appropriate Target Date Fund, unless you take action and select funds from the new Investment Menu. Your TIAA-CREF Consultant can assist you with this process during your Individual Counseling Session. See pages 6 to 8 for detailed information. 9. Can I keep my current investment elections? No. After December 1, all future contributions will be directed to the new Investment Menu. Contributions will no longer be directed to Fidelity Investments, or to certain TIAA-CREF investment accounts. Please refer to pages 6 to 10 of this Transition Guide for detailed information. 10. I already have an account with TIAA-CREF. Do I need to re-enroll? No. If your retirement account is currently managed by TIAA-CREF, you do not need to take any action. However, if you do not take action, your investment elections for future contributions will be automatically directed to an age-appropriate Target Date Fund on the new Investment Menu, and your beneficiary designations will not change. Given the new Investment Menu, we encourage you to take this opportunity to review your retirement portfolio to determine if your investment choices and asset allocation match your planning goals. 11. What happens if I do nothing? No matter which provider you are investing with currently, you do not have to take any action. If you do not take action, your future contributions will be automatically placed in an age-appropriate Target Date Fund. Your contributions, as well as contributions from Amherst College (if you are eligible), will continue at the current deferral rate. 12. I am retiring soon. Can I keep my accounts where they are until I retire? As we transition to the new Investment Menu, certain TIAA-CREF Funds on the current Investment Menu will be frozen. A frozen fund cannot accept new contributions after December 1, Your existing assets in a frozen fund will remain where they are unless you choose to transfer them to the new Investment Menu. If you have existing funds at Fidelity, your assets will remain where they are unless you choose to transfer them to funds available on the new Investment Menu. All contributions after December 1 will be directed 14 Amherst College Defined Contribution Retirement Plan

17 Frequently Asked Questions (continued) through TIAA-CREF, even contributions to funds offered by other investment providers. Upon retiring, you ll have a number of retirement plan distribution choices available to meet your investment and income needs. At that time you ll want to carefully review these options and speak with a consultant to design a retirement income strategy suitable for you. You can reach a consultant by calling Monday through Friday 8 a.m. to 10 p.m. and Saturday 9 a.m. to 6 p.m. (ET). 13. How do I get help choosing an appropriate allocation mix? TIAA-CREF Consultants are able to provide personalized advice and planning services based on the new Investment Menu. This service is available to all retirement plan participants at no charge. During a one-on-one counseling session, a consultant will create a personalized retirement portfolio that s tailored to your unique financial situation and goals. To schedule your session, call TIAA-CREF at , Monday through Friday 8 a.m. to 8 p.m. (ET). 14. What do I need to bring with me to a TIAA-CREF investment counseling session? Bring all your investment account statements, including investments outside of the Amherst College Defined Contribution Retirement Plan, as well as your current retirement account statement(s) and your most recent Social Security statement if available. TIAA-CREF Consultants will need this information to get a complete picture of your current financial situation. 15. How long does a one-on-one counseling session last? A one-on-one counseling session with a TIAA-CREF Consultant lasts approximately one hour. You may schedule a follow-up appointment to further review or refine your retirement portfolio strategy. 16. My spouse/partner/friend handles all my finances. Can I bring them to a meeting? Yes. Employees can bring anyone they choose to the group meetings on campus and/or to an individual counseling session. Your consultant will consider the spouse s or partner s retirement assets when providing the objective investment advice service. 17. Will loans remain available? Yes. Loans are still available through the Retirement Plan. The design of the Retirement Plan has not changed. 18. What does best in class mean? Best in class refers to a diverse set of actively and passively managed mutual funds that have performed consistently well against their benchmarks and other funds within their peer group. (Please note that past performance does not guarantee future results.) 19. What is the difference between an annuity account and a mutual fund? When you re saving for retirement, mutual funds and annuities generally provide the same benefits. Your money is pooled with that of other investors into a mutual fund or annuity account that spreads the money across stocks, bonds or other asset classes in a diversified portfolio. Once you retire, mutual funds and annuities provide various ways to withdraw funds and receive income. However, an annuity provides the additional benefit of enabling you to convert all or a portion of the account s balance into a lifetime income stream to you and/or your spouse or chosen beneficiary for as long as you live, much like a traditional pension. For more information about the annuity conversion options and payment choices available, contact a TIAA-CREF Consultant. 20. Is there anything changing besides the Investment Menu? In addition to the new Investment Menu, we are moving to a new contract structure for the Plan. All other aspects of the Plan remain the same. 21. Will I see any fees, charges, or loads when I select funds on the new Investment Menu? No. There are no charges or loads when you select funds on the new Investment Menu. However, the internal management fees for each fund, referred to as expense ratios, will be netted from investment performance for each fund, which is standard industry practice. These expense ratios can be found in the individual fund fact sheets located at How can I see my accounts and perform transactions online? You can view your account information, change allocations, and make transfers by logging into your account at You will need to choose a user ID and password to use the secure portion of the site. 23. How do I speak to someone at TIAA-CREF? You can call a TIAA-CREF Consultant at , Monday through Friday 8 a.m. to 10 p.m. and Saturday 9 a.m. to 6 p.m. (ET). 24. Is the College making money on this change? No. The Investment Menu changes enable us to more effectively comply with new 403(b) plan regulations and improve the quality of the plan s investment options. 25. What is a "frozen" fund? A frozen fund cannot accept new contributions after December 1, Your existing assets in a frozen fund will remain where they are unless you choose to transfer them to the new Investment Menu. You can transfer your existing assets in a frozen fund to the new Investment Menu, beginning market open on December 6. Amherst College Defined Contribution Retirement Plan 15

18 Glossary of Investment Terms Active: An investment strategy that seeks to outperform the average returns of the financial markets. Asset Allocation: Asset allocation means spreading your investments over different types of investment categories, i.e., stocks, bonds, cash, etc. By taking advantage of this concept, you can invest some assets for safety, some for income and some for growth. Asset Class: A group of investments considered similar in potential risk and return. There are three basic asset classes: stocks, also known as equity investments; bonds, also known as fixed income investments; and short-term investments, also known as money market investments or cash equivalents. Assets: Assets are the property and resources (such as cash and investments) of a person or company. A mutual fund s assets include whatever securities (stocks, bonds, Treasury bills, etc.) it owns, plus any cash. Bonds: Bonds are essentially loans or debt. They re issued by corporations, governments, or municipalities to raise money. A bond certificate is like an IOU; it shows the amount loaned (principal), the rate of interest to be paid on the loan, and the date that the principal will be paid back (maturity date). Bond prices fluctuate based upon the direction of interest rates. Mutual funds that invest primarily in bonds are called income funds. Common Stocks: When people talk about a company s stock, they usually mean common stock. When you own common stock in a company, you share in its success or failure. If the company prospers, you may get part of the profits, called dividends. Also, the value of your shares of the company may go up; common stock generally has the most potential for growth. However, it also carries the most risk since the value can drop if the company does poorly. If the company goes bankrupt, common stockholders are the last to receive any payment. Diversification: This concept involves spreading your money across different kinds of investments to lower your investment risks. It s the idea of not putting all your eggs in one basket. A diversified portfolio can help shield you from large losses because even if some securities falter, others may perform well. However, diversification does not ensure a profit or guarantee against loss. Equity: This means ownership in a company. When you own shares of stock of a company, it also means that you own equity in that company. So, stock investments are also called equities. Similarly, mutual funds that invest in stocks are often called equity funds. Equity Funds: Mutual funds that invest exclusively or primarily in equities (stocks). Guaranteed Annuity: An annuity that offers a guaranteed rate of return.* The TIAA Traditional Annuity is a guaranteed annuity backed by TIAA s claims-paying ability that guarantees principal and a minimum interest rate, plus the opportunity for additional amounts in excess of the guaranteed rate. These additional amounts, when declared by the TIAA Board of Trustees, remain in effect for the declaration year, which begins each March 1. Index/Benchmarks: An index measures the price and performance of a specific group of investments. There are many indices that an investor can track every business day, such as: The Dow Jones Industrial Average: A formula that represents the stock prices of 30 major industrial companies in the United States. Because it includes companies that represent core sectors of our economy, the Dow is considered the most accepted indicator of overall market performance. When the Dow is up, it means the weighted average price of these companies rose during the day; when it s down, the weighted average price fell. The S&P 500 Index: An index of 500 widely held U.S. stocks. The Standard & Poor s Corporation calculates the market prices of these stocks, which includes the reinvestment of dividends, as a way to track the overall performance of the stock market. Inflation: When the price of goods and services rises over time, the result is called inflation. This means that things you buy today will cost more in the future. International Equity Funds: Mutual funds that seek a favorable long-term total return, mainly through capital appreciation from equity securities of foreign issuers. Investment Mix: The combination of investment choices that you select. Issuer: A company, government, or municipality that offers bonds to investors. Large-Cap Value Funds: Mutual funds that seek a favorable long-term total return, mainly through capital appreciation, primarily from equity securities of large domestic companies. 16 Amherst College Defined Contribution Retirement Plan

19 Glossary of Investment Terms (continued) Management Styles: There are three broad levels of management that can apply to an investment fund: Active management means that the portfolio manager is actively buying and selling securities within an investment fund in an attempt to outperform the market. Whatever the market does, as measured by certain benchmarks, the manager will try to do better and increase value for investors. Passive management means that the portfolio manager does very little buying and selling of securities within the investment fund. Generally this is because the objective of the fund is to try to achieve a return for investors comparable to the return of the overall market or an index. In that case, the fund will be made up of securities that mirror the market or index to which it is compared. For this reason, little trading is required and therefore the fund can be passively managed. Unmanaged is when it is not necessary for a professional manager to make buy/sell decisions, because investment decisions are driven by participant-directed cash flows. Mid-Cap Value Funds: Mutual funds that seek a favorable long-term total return, mainly through capital appreciation, primarily from equity securities of mediumsized domestic companies that may be underpriced and present an opportunity for increased value. Money Market Funds: Mutual funds that invest in shortterm debt obligations, such as Treasury bills, certificates of deposit, and commercial paper. Money market funds seek high current income consistent with maintaining liquidity and preserving capital. Mutual Funds: Professionally managed investments in which you pool your money with other investors to purchase stocks, bonds and/or other assets. Investing in a mutual fund enables you to diversify your savings and participate in the market experience of the fund s investments. Your principal balance will increase or decrease depending on the investments performance. Passive: An investment strategy that seeks to match, rather than outperform, the return and risk characteristics of a specific benchmark by holding all securities that make up an index (or a statistically representative sample of the index). Portfolio: A portfolio is a collection of securities and other investments. Your investment portfolio refers to your investment holdings within your Amherst College Defined Contribution Retirement Plan. Prospectus: A prospectus provides investors with a thorough description of a fund. It explains the fund s objective, how it invests its money, and fees and expenses associated with the fund. You should read a fund s prospectus before choosing to invest in that fund. Return: This is the rate an investment earns it s expressed as a percentage. It generally refers to the change in value (increase or decrease in share or unit price) and any income earned on the investment over a period of time. It enables you to compare investment performance among funds. Securities: This term refers to all investment choices, including stocks, bonds, short-term investments, and shares of mutual funds, etc. Small-Cap Funds: Mutual funds that seek a favorable long-term total return, mainly through capital appreciation, primarily from equity securities of smaller domestic companies. Social Choice Funds: Mutual funds that invest only in companies that meet predetermined ethical or moral standards. For instance, some socially responsible funds do not invest in cigarette manufacturers or companies that sell alcoholic beverages. Green funds may invest only in companies that are deemed to be environmentally friendly. Stock: A company sells stock to raise money. When individuals or other companies buy stock, they become owners of a part of the corporation. This ownership is called equity. Ticker Symbol: A sequence of letters used to identify a stock or a mutual fund. Variable Annuity: A professionally managed investment in which you pool your money with other investors to purchase stocks, bonds and/or other assets. A variable annuity allows you to diversify your savings and participate in the market experience of the underlying investments. Your principal balance may increase or decrease depending on the performance of these investments. With an annuity, you have the choice of receiving lifetime income upon retirement.* Yield: The yield is the effective interest rate or dividend on an investment. * Guarantees are based upon the claims-paying ability of the issuer. Amherst College Defined Contribution Retirement Plan 17

20 Amherst College and TIAA-CREF are committed to providing the resources you need to plan for the future you deserve. Welcome to the new Investment Menu! Please read the prospectus and consider the investment objectives, risks, charges and expenses carefully before investing.