Penn State, in conjunction with a third-party consultant, has recently completed a comprehensive review of its defined-contribution retirement plan and supplemental retirement plans to ensure that the University is offering low-cost, best-in-class investments, service and resources to help faculty and staff reach their retirement savings goals. As a result of this review, it has been identified that the retirement savings experience for faculty and staff could be improved significantly, and Penn State could increase compliance with new regulations around retirement savings as well as create administrative efficiencies by altering its retirement plan structure.
Over the next several months, faculty and staff will be notified of exciting changes, which includes consolidating all retirement investment vendors to a single vendor, TIAA-CREF, who will have responsibility of recordkeeping for Penn State’s retirement savings plan. In addition, the plan will offer a simplified core investment menu with best-in-class funds across all asset classes. The core menu will include mutual funds from PIMCO, T. Rowe Price, BlackRock, Vanguard, and ING, to name a few. In addition, there will be a brokerage feature included with the enhanced retirement plan, which will allow faculty and staff to self-direct retirement funds to more than 3,000 mutual fund offerings.
As of July 1, 2011, in preparation for the changes to the retirement plan, all faculty and staff who are enrolling in a supplemental 403(b) or 457(b) plan are being enrolled with TIAA-CREF. Those individuals who currently participate with one of the four vendors (AXA Equitable, Fidelity, Vanguard and VALIC) will continue to be able to make contributions to those accounts until Sept. 30, 2011; thereafter, all supplemental retirement savings will be redirected to the new retirement plan.
It is important to remember that this announcement does not pertain to the State Employee's Retirement System. These changes will only affect the TIAA-CREF retirement plan and the voluntary supplemental retirement plans.
The Office of Human Resources will be meeting with the appropriate constituencies to provide more information about this change. In addition, the Employee Benefits website will be updated as announcements are made, and TIAA-CREF counselors will be available during all open enrollment meetings to assist faculty and staff with any questions.