Making the most of your Arizona University System Optional Retirement Plan Fund Changes and...
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Transcript of Making the most of your Arizona University System Optional Retirement Plan Fund Changes and...
Making the most of your Arizona University System Optional Retirement Plan
Fund Changes and Transition
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What you’ll learn today
What is changing and why New investment lineup How changes may impact you Examples of investment option
changes Key dates and actions to consider Where to go for more information
What is changing Plan design and investments*.
» Tier I changing from core investments and default lifecycle funds to LifeCycle Options
» Tier II changing from unmonitored funds and annuities to monitored Core Options
» Tier III changing from self-directed brokerage account to Specialty Options that include self directed brokerage accounts with mutual funds and exchange traded funds and select annuities offered by TIAA-CREF. You may contribute 100% of contributions in the self-directed brokerage account.
VALIC will no longer be an available investment provider. If you are not invested in the funds that will be in the new tier lineup
or you are a VALIC participant, you may want to take action now.
*Determined upon a careful and thorough review by Arizona University System and Mercer Investment Consulting.
An annuity is not a mutual fund. Interest rates and time periods vary depending on the annuity contract. Guarantees are subject to the claims paying ability of the insurance company. 3
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New tiered investment lineup with TIAA-CREF on September 16, 2011
Tier I: Asset Allocation OptionsTIAA-CREF Lifecycle Mutual Funds
Tier II: Core OptionsVanguard Prime Money Market Fund Institutional SharesWells Fargo Stable ValuePIMCO Total Return Fund – Institutional ClassPrincipal Diversified Real Asset Institutional ClassVanguard Institutional Index Fund Institutional Shares Large Cap Stock Fund - 33.3333% Vanguard Windsor II Investor Class 33.3333% American Funds Fundamental Investors R6 33.3333% T. Rowe Price Growth StockAmerican Funds Euro Pacific Fund R6 Eaton Vance Atlanta SMID Cap Fund Class I
Tier III: Specialty OptionsSelf-directed Brokerage account TIAA TraditionalCREF Money Market accountCREF Stock account
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New tiered investment lineup with Fidelity on September 19, 2011
Tier I: LifeCycle OptionsFidelity Freedom K® FundsTier II: Core OptionsVanguard Prime Money Market Fund Institutional SharesManaged Income PortfolioPIMCO Total Return Fund – Institutional ClassPrincipal Diversified Real Asset Institutional ClassVanguard Institutional Index Fund Institutional Shares Large Cap Stock Fund - 25% American Beacon Large Cap Value 25% American Funds Fundamental Investor R5 25% Fidelity Contrafund 25% Fidelity Growth Company Fund Fidelity Diversified International Fund – Class KEaton Vance Atlanta SMID Cap Fund Class I
Tier III: Specialty Option Fidelity BrokerageLink®
A self-directed brokerage account may entail greater risk and is not appropriate for everyone. Additional fees apply to a BrokerageLink account.
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Future contributions that are not part of the new investment lineup will be redirected to the new investment lineup in September.
Remaining account balances that are not part of the new investment lineup will be reallocated in December 2011, to the new investment lineup. (Annuity balances will not transfer.)
To direct future contributions outside of the new investment lineup, you may do so through a brokerage account.
How the changes may impact Fidelity and TIAA-CREF Participants
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VALIC accounts will be restricted from investment changes and withdrawals beginning at 1 p.m. PT on September 19, 2011.
Future contributions and mutual fund account balances at VALIC are scheduled to be transferred to Fidelity on September 28, 2011, and will be mapped to the new tiered investment lineup, unless directed otherwise. Annuity balances will not transfer.
The last contribution that will be sent to VALIC will be in your September 9, 2011 paycheck unless you direct otherwise sooner.
How the changes may impact VALIC participants
Example: How future contributions and balances at VALIC will transfer to new investment lineup at Fidelity as of September 28, 2011.
Current investment options
at VALIC:New investment options at
Fidelity:
Old investment option New investment option
ABC Fund XYZ Fund
Arizona University System has decided to replace the current investment options at VALIC with what they believe to be similar investments. Once the transition is complete, participants will be able to request exchanges (transfers) among the new investment lineup at Fidelity.
The transfer of assets depends on the timely liquidation and delivery of assets from VALIC. A delay may result in a change to the above noted dates.
The details of the VALIC transfer of assets will be included in the VALIC transition notice scheduled to mail mid August, 2011.
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Example: TIAA-CREF / Fidelity investment option changes
Contributions directed to the current investment option:
will be redirected to the new investment option as of Sept. 16 (TIAA-CREF) / Sept. 19 (Fidelity)
Old Investment option New investment option
ABC Fund XYZ Fund
The reallocation of assets depends on the timely liquidation of those assets. A delay in liquidation may result in a change to the above noted dates.
Remaining balances in the current investment option:
will be reallocated to the new investment option as of Dec. 13 (TIAA-CREF) / Dec. 19 (Fidelity)
Old Investment option New investment option
ABC Fund XYZ Fund
The details of the fund changes are scheduled to mail mid August, 2011.
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Key datesTIAA-CREF Fidelity
New investment options are available. July 1, 2011 July 1, 2011
Self-directed Brokerage applications are due by this date if you wish to continue to direct future contributions to funds outside of the new tiered investment lineup.
September 16, 2011
September 2, 2011
New tiered investment lineup is available. Investments options not in the new investment lineup will no longer be available and will be restricted from new contributions or exchanges in.
Future contributions are redirected to the new tiered investment lineup. Changes to how future contributions are directed must be made by this date.
September 16, 2011
1 p.m. PT on September 19,
2011
Self-directed Brokerage applications must be completed by this date if you wish to continue to invest balances in funds outside of the new tiered investment lineup.
December 13, 2011
December 5, 2011
Remaining account balances in the investment options no longer available will be reallocated to the new tiered investment lineup. Changes to account balances must be made by this date.
December 13, 2011
1 p.m. PT on December 19, 2011
The reallocation of assets depends on the timely liquidation of those assets. A delay in liquidation may result in a change to the above noted dates.11
Review current investment allocations and how your account balances are invested.
Review the fund changes notice mailed in mid-August to determine how current investment allocations and account balances will be directed to the new investment lineup.
Call Fidelity or TIAA-CREF for assistance with reallocating investments or to open a brokerage account.
If no changes are needed, no action is required.
Actions to consider for Fidelity and TIAA-CREF participants
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Key dates for VALIC transition
Last day at VALIC to request paperwork required for a hardship withdrawal or distribution.
1 p.m. PT on September 12,
2011Last day to elect a new provider in your University’s online enrollment system. You should open your account with Fidelity or TIAA-CREF at the same time you make you make your new provider election.
5 p.m. PT on September 15,
2011
Last day at VALIC to process paperwork for a transfer, hardship withdrawal or distribution.
Last day at VALIC to make investment election or exchanges to your VALIC account.
Blackout period begins.
1 p.m. PT on September 19,
2011
VALIC mutual fund account balances are transferred to Fidelity if no prior action is taken.
September 28, 2011
Blackout period ends. Fidelity accounts and services are available including online beneficiary designations.
Week of October 9, 2011
The effective date of plan changes and end of the Transition Period depend upon the accurate, timely transfer of data from VALIC. If this does not occur, the delivery of services and investment options described herein could be delayed.
Please be sure you understand the tax consequences of any withdrawal from the plan.
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Review current investment allocations and how your mutual fund account balances are invested at VALIC.
Review the VALIC transition letter mailed in mid-August, 2011. Future contributions and mutual fund balances will transfer to Fidelity
unless you direct otherwise. » If you will be actively electing a new vendor, make the election in your
University’s enrollment system by 5 p.m. on September 15, 2011. Open an account with Fidelity or TIAA-CREF at the same time.
» If changes to your current investment allocations or transfer/withdrawals of account balances are needed, make them with VALIC prior to 1 p.m. PT on September 19, 2011, when the blackout period begins.
If no changes are needed, no action is required. Your current investment allocations and mutual fund account balances will transfer to Fidelity.
Call Fidelity at 800-328-6608 or TIAA-CREF at 866-548-3705, ext. 457706 for help with questions and to learn more about your ORP changes.
Action to consider for VALIC participants
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Fidelity and TIAA-CREF representatives are available to help with questions.
Mid-August mailings will include more details regarding these changes and your options.
August & September on-campus meetings.
Fidelity Workplace Planning and Guidance Consultant Group
800.328.6608
www.mysavingsatwork.com/atwork/abor.htm
TIAA-CREF Counseling Center
800.842.2252
www.tiaa-cref.org/azus
Where to go for more information
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Important information
• Before investing in any investment option, please carefully consider the investment objectives, risks, charges, and expenses. For this and other information, call your service provider for a free mutual fund or variable annuity prospectus or, if available, a summary prospectus. For information on fixed annuities, contact your service provider to request a fact sheet. Read them carefully before you invest.
• Keep in mind investing involves risk. The value of your investment will fluctuate over time and you may gain or lose money.
• Unless otherwise noted, transaction requests confirmed after the close of the market, normally 4 p.m. Eastern time, or on weekends or holidays, will receive the next available closing prices.
• The investment options available through the plan reserve the right to modify or withdraw the exchange privilege. • TIAA-CREF or VALIC and Fidelity Investments are independent entities and are not legally affiliated.
© 2011 FMR LLC. All rights reserved.Fidelity Brokerage Services LLC, Member NYSE, SIPC, 900 Salem St, Smithfield, RI 02917588288.2.0