Important information and changes to the Princeton University Retirement Plans

Transcription

1 Important information and changes to the Princeton University Retirement Plans

2 Table of contents Overview of changes... 4 What to expect for TIAA participants... 5 Vanguard participants... 6 Retirees... 8 Investment options... 9 Retirement plan investment advice Frequently asked questions...14 Account information...16

3 A message from Princeton University Helping you plan and save for your financial future is very important to us. That s why we re pleased to offer enhancements to the Princeton University Retirement Plans. By consolidating our recordkeeping with one recordkeeper, TIAA, we can: Offer the same investment options you have today (including Vanguard funds) while reducing your investment fees. Provide all your University Retirement Plan account information in one online location. Reduce paperwork and time needed to transfer dollars between investments, take out loans or make withdrawals. Offer automatic rebalancing, which rebalances your retirement plan portfolio periodically to keep your investment mix in line with your original goals. Please review the important dates and information on the following pages and consider any actions you may want to take as you balance your needs today with the need to save and invest for tomorrow. Princeton University Office of Human Resources Questions? Call or visit TIAA.org/princeton 3

4 Overview of changes One source for managing your account You ll be able to conveniently view all of your investment options and make transactions through TIAA. There will be one website, one participant services phone number and one consolidated statement each quarter. From the TIAA website, you ll access your retirement account information, as well as review and select investment options from both Vanguard and TIAA. Lower investment costs help you save All TIAA and Vanguard investments will remain as investment options available through the Retirement Plans. The investment fees on most Vanguard funds will be reduced. While the TIAA investments are already at the lowest-cost share class available, the consolidation of plan services through TIAA allows for most of the Vanguard funds to also move to a lower-cost share class. Expanded retirement information and advice services Whether you re just starting your career or already retired, you ll have access to helpful resources, such as online communities for women and retirees, financial calculators and the 360 Financial View, an online tool that helps you budget and manage your finances by tracking income, bills, financial accounts and net worth. Personalized advice is also available on all of the Plans invest`ment options at no additional cost to you. Investing insight What s the benefit of a lower-cost share class? Investing in a lower-cost share class of a fund means you pay less for investment fees and a higher percentage of any potential return stays invested. For example, a reduction of 0.10% in mutual fund fees would result in annual savings of $10 each year for every $10,000 invested. If your account is worth $100,000, you would save approximately $100 a year in mutual fund fees. While returns can t be guaranteed, paying lower fees can help your savings add up over time. 4 Princeton University

5 What to expect if you currently invest with TIAA No action is required at this time While no action is required on your part, you should regularly review your account information and consider whether you d like to make any investment or beneficiary changes. A new benefit to TIAA participants You will now be able to view and easily invest in Vanguard funds through TIAA. Date to note: Date June 20, 2016 Event You will be able to view all of the Plans investments (including Vanguard funds) through your TIAA account. Questions? Call or visit TIAA.org/princeton 5

6 What to expect if you currently invest with Vanguard No action is required at this time All Vanguard funds will automatically transfer to the Princeton University Retirement Plans on TIAA s recordkeeping platform. Your current investment strategy, investment elections and beneficiary information will not change. Once the transfer is complete, you will receive a confirmation by mail from TIAA. See the Investment Transfer Strategy insert for additional details. While no action is required on your part, you should regularly review your account information and consider whether you d like to make any investment or beneficiary changes. A new benefit reduced investment costs By consolidating all plan administration to a single recordkeeper, TIAA, the same Vanguard funds will continue to be offered, but most will be at a new, lower-cost share class. If you are invested in any of these funds, your current assets and future contributions will be automatically directed to the lower-cost share class of the same Vanguard fund. Restrictions during the Blackout Period * There will be a brief period of time during which your Vanguard funds will move to the recordkeeping platform through TIAA and you will not be able to make changes to your Vanguard account. This occurs from approximately July 8 through July 25. You will not be able to change your investments, make withdrawals or transfer funds during this time; however, scheduled payroll contributions will continue and your assets will remain invested. See the enclosed Important Notice for additional information on the Blackout Period. If you currently have accounts with both Vanguard and TIAA, the Blackout Period will only affect your Vanguard account. What happens if I currently invest in both Vanguard and TIAA? After the transition, your Vanguard investments will reside on the recordkeeping platform through TIAA. Your future contributions will not change. During the transfer period (Blackout Period), you will not have access to your Vanguard investments or account. Your beneficiary information will default to the information you have on file for your TIAA account. You may log in to your existing TIAA account to update your beneficiary at any time. *Important note: The start and end of the Blackout Period depend on the accurate, timely transfer of assets and data from Vanguard to TIAA. If this does not occur, these dates may be delayed. 6 Princeton University

7 Dates to note: Date July 5, 2016 July 8, 2016 (4 p.m. ET) July 13, 2016 July 15, 2016 July 25, 2016 Event You now have access to your TIAA account and a Welcome Kit will be mailed to you. It includes important information on TIAA and how to access your TIAA account (account access information is also provided on the back cover of this guide). The Blackout Period is expected to begin. Refer to the Investment Transfer Strategy insert and review the enclosed Important Notice for more information. If you plan to make changes to your account, such as setting up systematic distributions, you should plan ahead and make any changes before or after the Blackout Period. All future contributions (both yours and any from Princeton University) will be directed to the same Vanguard funds now available to you through your new account with TIAA. Vanguard assets will be transferred in-kind and reregistered as they move to TIAA. Your account will remain fully invested through this transfer process. A confirmation statement will be mailed to you from TIAA containing details of the transfer once completed. The Blackout Period for Vanguard assets is expected to end on or before this date. You can access your TIAA account to change investments and allocations, as well as review your beneficiary information at TIAA.org/princeton. Investing insight 360 Financial View online tool Use the 360 Financial View online tool to help manage your entire financial life. You can view all of your financial assets, whether from another employer s retirement plan, a personal brokerage account, an IRA, a 529 college savings plan or your bank and credit accounts. You can get a complete picture of your finances, monitor your savings progress, track spending, set up alerts or manage a budget. Visit TIAA.org/princeton, select Log In, go to My Account and select 360 Financial View. Questions? Call or visit TIAA.org/princeton 7

8 What to expect if you are a retiree As a participant in the Plans, it s important that you stay informed on all the investment and service updates. Whether you invest in TIAA and/or the Vanguard investment options, be sure to review the information that applies to your retirement account(s). Distribution information If you currently receive income or distribution payments from Vanguard or TIAA, there should be no change or interruption to your payments or payment schedule as administration of the Plans moves to TIAA. The Plans will continue to offer the same retirement income options. Advantages of staying in the Plans $ Investment oversight Princeton University provides ongoing oversight of all investments offered through the Plans. You can be assured that all investments are reviewed on a regular basis and changes are made, when needed, based on the Plans investment criteria. Low-cost fees Most Vanguard and TIAA investments are offered at the lowest available share class (lowest cost). Minimizing investment expenses helps keep more of your current savings invested and working for you. Help when you need it When you have questions or need information, TIAA financial consultants are available to assist you. One-on-one consultations may be scheduled so you can get the retirement planning information, help and resources you need at no additional cost to you. Call weekdays from 8 a.m. to 8 p.m. (ET) to schedule a consultation. 8 Princeton University

9 Investment options All TIAA and Vanguard investments will be available on the TIAA recordkeeping platform beginning June 20. Most Vanguard funds will have new share classes and ticker symbols (see highlighted funds). To see additional details about each of the investments, log in to TIAA.org/princeton, select Plans and Investments, then under your plan, select Investment Choices. TIAA investment information is currently available on the website; Vanguard investment information will be available beginning May 16. Target date funds offer a diversified investment in a single fund. If you prefer a hands-off approach to investing, you may want to consider one of these funds. Each target date fund is a fund of funds, primarily invested in shares of other mutual funds.* Each fund s investments become more conservative as the target date approaches. The target date indicates when you might plan to begin making withdrawals; however, you are not required to make withdrawals at the target date. As with all mutual funds, the principal value of a target date fund is not guaranteed and will fluctuate. Asset class Multi-Asset Investment option TIAA-CREF Lifecycle Index Retirement Income Institutional TIAA-CREF Lifecycle Index 2010 Institutional TIAA-CREF Lifecycle Index 2015 Institutional TIAA-CREF Lifecycle Index 2020 Institutional TIAA-CREF Lifecycle Index 2025 Institutional TIAA-CREF Lifecycle Index 2030 Institutional TIAA-CREF Lifecycle Index 2035 Institutional TIAA-CREF Lifecycle Index 2040 Institutional TIAA-CREF Lifecycle Index 2045 Institutional TIAA-CREF Lifecycle Index 2050 Institutional TIAA-CREF Lifecycle Index 2055 Institutional TIAA-CREF Lifecycle Index 2060 Institutional Vanguard Target Retirement Income Institutional Vanguard Target Retirement 2010 Institutional Vanguard Target Retirement 2015 Institutional Vanguard Target Retirement 2020 Institutional Vanguard Target Retirement 2025 Institutional Vanguard Target Retirement 2030 Institutional Vanguard Target Retirement 2035 Institutional Vanguard Target Retirement 2040 Institutional Vanguard Target Retirement 2045 Institutional Vanguard Target Retirement 2050 Institutional Vanguard Target Retirement 2055 Institutional Vanguard Target Retirement 2060 Institutional Ticker symbol TRILX TLTIX TLFIX TLWIX TLQIX TLHIX TLYIX TLZIX TLXIX TLLIX TTIIX TVIIX VITRX VIRTX VITVX VITWX VRIVX VTTWX VITFX VIRSX VITLX VTRLX VIVLX VILVX *Target date funds share the risks associated with the types of securities held by each of the underlying funds in which they invest. In addition to the fees and expenses associated with the target date funds, there is exposure to the fees and expenses associated with the underlying mutual funds. Questions? Call or visit TIAA.org/princeton 9

10 Core options are designed for the participant who wants to choose from a limited set of investment options that cover all the basic asset classes. If you have some investing experience and the time to research the Plans investment options, you may wish to create a diversified portfolio from this group of investments. Asset class Investment option Guaranteed TIAA Traditional Annuity* NA Money Market Fixed Income CREF Money Market Account R3 (variable annuity) Vanguard Prime Money Market Admiral CREF Bond Market Account R3 (variable annuity) CREF Inflation-Linked Bond Account R3 (variable annuity) Vanguard Total Bond Market Index Institutional Ticker symbol QCMMIX VMRXX QCBMIX QCILIX VBTIX Multi-Asset CREF Social Choice Account R3 (variable annuity) QCSCIX Real Estate TIAA Real Estate Account (variable annuity) QREARX Equities CREF Equity Index Account R3 (variable annuity) CREF Global Equities Account R3 (variable annuity) CREF Growth Account R3 (variable annuity) CREF Stock Account R3 (variable annuity) Vanguard Total International Stock Index Institutional Vanguard Total Stock Market Index Institutional QCEQIX QCGLIX QCGRIX QCSTIX VTSNX VITSX *TIAA Traditional Annuity is a guaranteed insurance contract and not an investment for federal securities law purposes. Any guarantees under annuities issued by TIAA are subject to TIAA s claims-paying ability. 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. Investing involves risk of possible loss of principal. Certain transfer restrictions and/or surrender charges may apply, so please review the fact sheet before investing. 10 Princeton University

11 Specialized mutual funds are geared to the experienced investor who is interested in more specialized investment options. If you re an experienced investor and want specialized investments for extra diversification in your portfolio, you may wish to add funds from this group to your fund selections. These funds provide a wider variety of investment options so that you can diversify your portfolio the way you see fit.* Asset class Fixed Income Investment option TIAA-CREF High-Yield Institutional TIAA-CREF Short-Term Bond Institutional Ticker symbol TIHYX TISIX Multi-Asset Vanguard Wellington Admiral VWENX Equities Columbia Mid Cap Value Y TIAA-CREF Growth & Income Institutional TIAA-CREF International Equity Institutional TIAA-CREF Large-Cap Growth Index Institutional TIAA-CREF Large-Cap Value Institutional TIAA-CREF Mid-Cap Growth Institutional TIAA-CREF Mid-Cap Value Institutional TIAA-CREF S&P 500 Index Institutional TIAA-CREF Small-Cap Equity Institutional Vanguard 500 Index Admiral Vanguard Explorer Admiral Vanguard Extended Market Index Admiral Vanguard International Growth Admiral Vanguard International Value Investor Vanguard PRIMECAP Admiral Vanguard Windsor II Admiral CMVYX TIGRX TIIEX TILIX TRLIX TRPWX TIMVX TISPX TISEX VFIAX VEXRX VEXAX VWILX VTRIX VPMAX VWNAX Investing insight Ticker symbols Funds with a new share class also have new ticker symbols. Mutual funds typically offer multiple share classes, and while a share class and ticker symbol may change, the fund itself and its investment strategy do not change. *Diversification is a technique to help reduce risk. It is not guaranteed to protect against loss. Questions? Call or visit TIAA.org/princeton 11

12 Information and resources to help you 12 Princeton University

13 Retirement plan investment advice You have access to personalized advice on all of the Retirement Plans investment options from a TIAA financial consultant at no additional cost to you. The investment advice is designed to help you answer key questions, including: How much will I need to save to meet my retirement income needs? Which combination of investments is right for me? Am I on track to reach my savings goals? By phone or in person Schedule a one-on-one consultation to get answers to your financial questions or develop an action plan with clear steps that help address your retirement goals. If you schedule a consultation, bring your financial account statements (including statements for retirement investments outside of the Plans) and your most recent Social Security statement, if available. Call weekdays from 8 a.m. to 8 p.m. (ET) to schedule a consultation. Online Use TIAA s Retirement Advisor to create your own action plan in four easy steps. Visit TIAA.org/retirementadvisor and log in to your account. For Vanguard investors If you are working with a Vanguard financial consultant and wish to continue that relationship, Princeton University has arranged for you to do so. To schedule a session with Vanguard, please call , ext The projections and other information generated by the Retirement Advisor tool are hypothetical in nature, do not reflect actual investment results and do not guarantee future performance. Results may vary with each use and over time. TIAA and Vanguard or any of their affiliates or subsidiaries are not affiliated with or in any way related to each other. TIAA acts as a recordkeeper for the plan and, in that capacity, is not a fiduciary to the plan. TIAA is not responsible for the advice and education provided by Vanguard. TIAA also provides advice and education to plan participants and when it provides advice, TIAA takes fiduciary responsibility for that advice. Vanguard is not responsible for the advice and education provided by TIAA. Questions? Call or visit TIAA.org/princeton 13

14 Frequently asked questions Why is Princeton University consolidating the Retirement Plans to one recordkeeper? Streamlining to one plan recordkeeper (TIAA) makes it easier for all participants to access the Plans information and resources, as well as potentially benefit from investment and administrative cost savings. If I m invested in Vanguard funds, how will this affect my investments? All of the Vanguard funds will remain available to you. In most cases, the investment costs you pay for the funds will be lower. After your Vanguard account transfers to TIAA on or about July 15, you will access all Vanguard investment information through your new TIAA account. Specific details are provided on pages 6-7. Will my Vanguard investments be sold as part of the transfer? No. Your investments will transfer as mutual fund shares directly from Vanguard to the TIAA recordkeeping platform and will remain fully invested during the transfer process. Are the new share classes actually a different fund than what I have now? No. A mutual fund may offer multiple share classes. Regardless of share class, each shareholder owns a pro rata share of the fund s investment portfolio. Each share class has a unique ticker symbol and is registered with the Securities and Exchange Commission (SEC) as a separate share class of the existing mutual fund. So, while the fund ticker will change on or about July 15, you are still investing in the same fund, just within a different share class. Is there any period of time when I can t make transactions? Yes, if you currently invest with Vanguard. Your account will remain fully invested; however, there will be a short period of time (the Blackout Period) during which you will not be able to access or make changes to your Vanguard assets. See pages 6-7 for detailed information on the dates and transfer process. Do I pay any fees to invest in the Retirement Plans? There are no fees to have an account in the Retirement Plans; however, most retirement plan investment options have investment fees. Certain investment options have redemption fees, but no redemption fees will be assessed when Vanguard assets transfer to TIAA. Additional details on specific investment fees can be found in the fund prospectuses. TIAA prospectuses are available on TIAA.org/princeton and Vanguard fund prospectuses will be added to the website on May 16. Will I need to update my beneficiary information? It depends where you re currently invested. If you only have a Vanguard account, your beneficiary information will transfer automatically to TIAA. If you only have a TIAA account, your beneficiary information will not change. If you have accounts with both Vanguard and TIAA, your TIAA beneficiary information will default to the information you have on file for your TIAA account. Once your account is available at TIAA, you should log in and confirm or update your designation. 14 Princeton University

15 What if I have a Power of Attorney or Qualified Domestic Relations Order on file for my Vanguard account? Powers of Attorney or in-progress Qualified Domestic Relations Orders will not transfer directly from Vanguard to TIAA. You must resubmit them. To do so, please contact TIAA. Are there any withdrawal restrictions or distribution changes to the Plans? No. There are no changes to the Plans withdrawal or distribution provisions. What if I d like some help making investment choices? Investment advice is offered as a service through the Plans at no additional cost. For more information, see page 13. What should I expect from a one-on-one consultation? The session will last approximately one hour. The financial consultant can review your Retirement Plans account with you, will use any additional statements and information you bring along to help understand your current financial situation, and can provide information and advice on the Retirement Plans investment options. You are welcome to bring a family member or guest to the consultation with you. Questions? Call or visit TIAA.org/princeton 15

16 Account information Log in to TIAA.org/princeton to view your account, see the latest performance data, make transactions and access retirement planning tools. If you are new to TIAA, click Register for Access and follow the on-screen instructions to access your new account and view your investments. Call weekdays 8 a.m. to 10 p.m. and Saturdays 9 a.m. to 6 p.m. (ET). Distributions from 403(b) plans before age 59½, severance from employment, death or disability may be prohibited, limited, and/or subject to substantial tax penalties. Different restrictions may apply to other types of plans. Investment, insurance and annuity products are not FDIC insured, are not bank guaranteed, are not bank deposits, are not insured by any federal government agency, are not a condition to any banking service or activity, and may lose value. You should consider the investment objectives, risks, charges, and expenses carefully before investing. Call or access TIAA.org/princeton for current product and fund prospectuses that contain this and other information. Please read the prospectuses carefully before investing. TIAA-CREF Individual & Institutional Services, LLC, Teachers Personal Investors Services, Inc., and Nuveen Securities, LLC, Members FINRA and SIPC, distribute securities products. Annuity contracts and certificates are issued by Teachers Insurance and Annuity Association of America (TIAA) and College Retirement Equities Fund (CREF), New York, NY. Each is solely responsible for its own financial condition and contractual obligations Teachers Insurance and Annuity Association of America-College Retirement Equities Fund, 730 Third Avenue, New York, NY C _ (06/16)