Faculty and Voluntary Retirement Plan Transition
The University is moving the Faculty Retirement Plan (FRP), Optional Retirement Plan (ORP), and the 457 Deferred Compensation Plan (457 Plan) to a single service provider for new contributions, Fidelity Investments, on June 12, 2020.
Important Changes Regarding Automatic Withdrawals
You may see changes in how your automatic withdrawals are being processed for funds that are transitioning from Securian to Fidelity. These may impact the timing and amount of your automatic withdrawals.
Fidelity processes recurring payments, including Minimum Required Distributions (MRDs), differently than Securian, so be sure to check your automatic withdrawals at Fidelity to ensure they meet your needs and the MRD requirements. For instance, Securian processed MRDs by aggregating plans together, but Fidelity processes MRDs individually for each plan. The dates for processing withdrawal payments are also different at Fidelity.
Please review this letter from Fidelity to see whether you are affected by these automatic withdrawal processing changes. You can call Fidelity at 800-343-0860 with questions or in order to change the amount withdrawn.
Plans Now Live with Fidelity
The plans transitioning from Securian and Vanguard are now live with Fidelity. You can access your accounts on Fidelity's NetBenefits site.
Investments Transferred In-kind Will Exchange into New Fund Lineup
Any investments that transferred in-kind will transfer to the new fund lineup as an exchange at the close of business on July 30, 2020 (generally 3 p.m. Central time). You will be able to view your new investments by logging on to NetBenefits on or after July 31, 2020.
In order to meet retirement plan best practices, the University of Minnesota's fiduciary body, the Retirement Plan Governance Committee (RPGC), went through a process of due diligence to review its benefit plans and compare them to other higher education institutions.
The RPGC determined that moving to a single service provider and simplifying the investment fund lineup would best meet its objectives of improving the retirement plan experience for employees. Through that process, the University chose Fidelity Investments to be the sole service provider of retirement contributions after June 12, 2020.
The benefits of the transition to Fidelity include making plan provisions more understandable and accessible, promoting and improving education and one-on-one consultations, and restructuring and simplifying the fund lineup.
Video Overview with SVP Brian Burnett
There are a number of key changes to the retirement plans to be aware of:
- All new contributions after June 12, 2020, will go to a Fidelity account.
- Some current balances will transfer automatically to Fidelity during the transition. Not every balance will transfer automatically, so please see this chart of what is transferring automatically or search for your plan or vendor to see how your current balance will be handled.
- Simplified fund choices. Currently there are hundreds of investment options to choose from among many plan service providers. By having one plan service provider, the University is simplifying your investment choices while still giving you a variety of choices among many asset classes.
- Online transactions. Before the transition, you had to conduct most plan transactions by filling out paper forms. With Fidelity, you can change your investments and choose your beneficiaries all online for the Faculty Retirement Plan. For the ORP and 457 Plans you can also enroll and change your contribution rates online.
There are a lot of changes to highlight with the transition to Fidelity, but here is what is not changing:
- The Minnesota State Retirement System, also known as the MSRS, is not affected by the transition to Fidelity. The MSRS is the primary retirement plan for Civil Service and Labor-represented employees (who are not Faculty).
- The University of Minnesota’s contributions to the primary retirement plans for all employee groups will not change.
- The Minnesota Life General Account and General Account Limited funds will continue to be fund options in the plans as before.
Two exciting options will be added to the ORP starting June 12, 2020—a Roth contribution option and rollovers from qualifying accounts.
Roth 403(b) Option
In addition to the traditional pre-tax contribution option within the ORP, you will have an after-tax Roth option after the transition. A Roth contribution option allows you to make after-tax contributions to the ORP while taking your earnings tax-free at retirement as long as the withdrawal is a qualified one.
Rollovers Welcome Starting June 12, 2020
Starting in June, you will be able to roll over eligible pretax and Roth contributions from a former workplace savings plan account or an IRA. Call Fidelity at 800-343-0860 for more information or for assistance with a rollover.
You can see a detailed timeline on the Timeline and Checklist page, which includes more information on the new transition date.
Call Fidelity at 800-343-0860 for help or investment advice. To make an appointment with a Fidelity representative, call the Fidelity reservation line at 800-642-7131, go online to NetBenefits.com/UMN.
You can contact Total Compensation by calling 4-UOHR (612-624-8647 or 800-756-2363) and select option 1 or you can send an email to firstname.lastname@example.org.