Frequently Asked Questions
Important: The retirement plan transition is delayed until June 12, 2020. Please read this announcement the Retirement Plan Governance Committee sent about the delay here.
- Optional Retirement Plan
- Retirees, Former Employees or Beneficiaries
- Minnesota State Retirement System (MSRS)
Q: What is changing with the retirement plans?
A: The University of Minnesota is transitioning the Faculty Retirement Plan and the Voluntary Retirement Plans to a single administrative service provider to streamline options and administration as part of the ongoing oversight of its retirement plans. You can see a chart of all the balances that are automatically transferring to Fidelity here. This change does not impact the Minnesota State Retirement System.
Q: Why is this change being made?
A: Several years ago the University considered how its defined contribution plans compared to current best practice approaches in both retirement plan administration and supporting employee retirement readiness. It was determined that the University should focus on two objectives:
- providing strong governance of the retirement plans on behalf of all participants
- improving your participant experience whenever possible while making your retirement benefits easier to understand, more accessible, and more meaningful to you through better education and greater administrative transparency.
These two objectives led to the decision by the Retirement Plan Governance Committee (RPGC) to move to one administrative service provider along with a restructured and streamlined fund line up across all three defined contribution plans (Faculty Retirement Plan, Optional Retirement Plan, and the 457 Deferred Compensation Plan).
Q: Who made this decision?
A: The University has improved its governance of the retirement plans through the formation of the Retirement Plan Governance Committee (RPGC) in 2016. This is not a representative body but a fiduciary committee charged with responsibility for the plans on behalf of all participants.
The Retirement Plan Governance Committee currently is:
- Chair: Brian Burnett, Senior Vice President and Chief Financial Officer
- Vice Chair: Ken Horstman, Interim Vice President of Human Resources
- Stuart Mason, Chief Investment Officer, Office of Investment and Banking
- Professor Murray Frank, Chair of the Senate Retirement Subcommittee
- Associate Professor Colleen Flaherty Manchester, President’s Appointee
In addition to identifying the need to a single provider of administrative services for retirement, the RPGC selected a single vendor and restructured and streamlined the fund lineup across all plans.
Q: Can I opt out of this transition and leave my money where it’s at (like Vanguard or Securian)?
A: Not every plan or investment fund is automatically transitioning to Fidelity; you can see which plans are transitioning here.
In most cases, you are not able to opt-out of the transition if you are still employed by the University. An exception is that the Faculty Retirement Plan allows active employees over the age of 62 to take in-service withdrawals which could be rolled over to other qualified retirement accounts.
If you are retired or otherwise no longer working at the University, you can roll your money over to another qualified retirement plan or to another plan recordkeeper whenever you wish, either before or after the transition.
Q: When will this change take effect and what can I expect?
A: Starting June 12, 2020, Fidelity will be the single provider of administrative services for the Faculty Retirement Plan, the Optional Retirement Plan and the 457 Deferred Compensation Plan. After this date, all new contributions will go to your account(s) at Fidelity. Some current account balances will also automatically move to Fidelity; some account balances will require participant action after June 2020 in order to transfer to Fidelity. You can see a chart of all the balances that are automatically transferring to Fidelity here.
Q: Which plans does this change affect?
A: These changes will pertain to the University’s defined contribution plans: Faculty Retirement Plan, the Optional Retirement Plan, and the 457 Deferred Compensation Plan. This change does not affect the Minnesota State Retirement System defined benefit pension plan.
Q: How do I figure out which plan(s) I am in?
A: Review your statements and contact the various investment providers to determine your account information. Or, check your pay statement on MyU to determine to which plans you are currently contributing.
Q: Where can I find information about the new investment fund lineup?
Q: Will participants still be able to invest in the Minnesota Life General Account (GA) and General Account Limited (GAL)?
A: Yes. The GA and GAL will be available through Fidelity beginning June 12, 2020.
Q: Can I keep my same investment funds?
A: Maybe. While some individual funds that were previously available will still be available with Fidelity in the core fund lineup, the majority of the investment options will not be. You can see which funds will be available in the core fund lineup here.
After the transition, you may be able to access specific individual fund(s) through Fidelity’s BrokerageLink® option that will be available to all participants after the transition. BrokerageLink® has over 5,000 investment options available.
Q: Which of my account balances will automatically move to Fidelity? How will the funds transfer?
A: In general, any money that can move automatically. You can see a chart of all the balances that are automatically transferring to Fidelity here. Because some plan investments are invested in an individual contract, some assets will not transfer automatically. Please review your statements and find more information by either your plan type or your plan's vendor.
Q: Will the University’s contribution amounts change?
A: No. The University will continue to contribute the same amount to the Faculty Retirement Plan.
Q: How does the transition affect my beneficiary designations?
A: Answers vary by plan. Read the beneficiary fact sheet (pdf) for more information.
Q: Will the contribution elections I’ve made for the voluntary plans change?
A: No. The contributions elections you made prior to the transition will continue.
Q: Will there be a blackout period in order for this transition to occur?
A: Yes. There will be a period of time where no transaction will occur in order to ensure that the transition occurs accurately, which is also called a blackout period. During this time, you will not have access to your accounts and you will not be able to:
- Change your investments
- Request a distribution (loans from Securian must have been previously requested)
- Check your account balances
At the end of the blackout period, you will be able to access and update your funds through the NetBenefits.com/UMN or Fidelity's app, including all balances that have transferred.
Q: What if the market goes up or down during the blackout period?
A: Existing mutual fund account balances transferring to Fidelity will be liquidated at the close of business (generally 3:00 p.m. central time), and transition to Fidelity the following business day.
You will have an opportunity to choose your investments for current balances that will automatically transfer and any new contributions after June 12, 2020.
Q: I’m not currently contributing to either of the voluntary plans—how do I start?
A: Currently, enrollment or changes to one of the voluntary plans is done by completing paper forms for the Optional Retirement Plan or the 457 Deferred Compensation Plan. Beginning in June 2020, you will be able to enroll by going online to NetBenefits.com/UMN, or contacting a Fidelity service representative at 800-343-0860, from 7:00 a.m. to 11:00 p.m. (CST) Monday through Friday.
Q: When can I select new investments that will be available via the Fidelity platform after June 12, 2020?
A: There was an Early Choice Window from February 3 to March 17, 2020, where participants could make investment elections prior to the transition. Since the transition is delayed until June 12, 2020, there may be another open window to make changes. More information about that will be communicated and made available soon.
Q: What is an administrative service provider or recordkeeper?
A: The communication material you receive may reference Fidelity as the administrator and/or the recordkeeper. This refers to the company that tracks the assets in your retirement plan and manages the investment platform. The recordkeeper’s main function is to invest new contributions, track transactions in and out of your account, how accounts are invested, and gains/losses on those investments in order to provide an updated account balance at the end of every day the stock market is open. Additionally, they provide customer service and generate account or tax statements.
Investments from other companies will still be available, even though we are transitioning to Fidelity as the recordkeeper. For example, Vanguard investment options will still be offered via the Fidelity investment platform.
Q: What does a Roth account mean?
A: A Roth account allows you to contribute after-tax dollars and then withdraw money tax-free in retirement as long as certain conditions are met.
Q: I currently have a loan from the ORP. How does this change affect my outstanding loan?
A: You will receive information regarding the repayment process as we get closer to the transition date.
Q: I am a retired or terminated employee. What additional considerations should I be thinking about?
A: Additional information regarding distributions and blackout dates will be available mailed to homes in early February. This is a good time to review your investments to ensure you are in the right asset allocation.
Q: I will be retiring soon. What additional considerations should I be thinking about?
A: A checklist for employees nearing retirement will be developed soon.
Q: I’m currently taking installment distributions or a Required Minimum Distribution (RMD) from one of the other vendors, will this affect my distribution?
A: For account balances that move to Fidelity, distribution information will transition to Fidelity. Additional information by vendor will be available in the upcoming months.
Q: Does this change affect the Minnesota State Retirement System (MSRS)?
A: No. This transition will only impact the Faculty Retirement Plan and the two voluntary plans.
Q: I participate in Minnesota State Retirement System as my primary retirement plan. Can I participate in one of the Voluntary Retirement Plans?
A: Yes, employees who are paid regularly can participate in the ORP or 457 Plan. The IRS rules ban students from saving in the ORP and students and non-resident aliens are not allowed to save in the 457 Plan.
Currently, enrollment or changes to one of the voluntary plans is done by completing paper forms for the Optional Retirement Plan or the 457 Deferred Compensation Plan. Beginning in June 2020, you will be able to enroll by going online to Fidelity’s website, NetBenefits.com/UMN, or by contacting a Fidelity service representative at 800-343-0860, from 7:00 a.m. to 11:00 p.m. (CST) Monday through Friday.