The Amherst College Defined Contribution Retirement Plan ... › media › view › 353301 ›...

The Amherst College

Defined Contribution Retirement Plan

Make the Most of Your Financial Future

Agenda

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• Introductions

• Background

• Benchmarking

• New Investment Menu

• Transitioning to the New Investment Menu

• Updating Your Investment Choices

• Learn More

• Questions

• iPad 2 Entries

Background

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• Partnership with TIAA-CREF as primary 403(b) service provider since 1941;

Strong partnership continues

• Changing 403(b) legislation/regulation prompted Amherst College to reassess/

enhance governance structure:

– Increased audit and reporting requirements

– Heightened DOL focus on fiduciary obligations

• In 2010, formalized Defined Contribution Retirement Savings Plan Investment

Committee:

– Cross-functional membership: HR, Legal, Finance, Investments

– Engaged independent investment advisory firm to conduct benchmarking

• Benchmarking the current plan:

– Recordkeeping and administrative services

– Employee communication, education and advice

– Investment options: diverse and complimentary investment styles, consistent

risk/return profiles, cost effective, etc

– Formalize risk management and ongoing oversight

Benchmarking Project Objectives

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• Ensure administrative and recordkeeping services are at, or better, than market

and simplify/consolidate services with one provider

• Increase/improve employee communications and investment education

• Provide participants with full array of diversified investment options; allow

exposure to complimentary investment styles and return/risk profiles that are

cost effective

• Make enhancements that can positively impact Participant’s retirement

outcomes

• What’s Not Changing:

– Overall design of the Plan

– Contribution rates

– Eligibility requirements

Benchmarking the Recordkeeper

Evaluative Criteria Included Ability To:

• Provide satisfactory services to employer and participants

• Provide open-architecture capabilities to recordkeep and coordinate multiple vendor

funds

• Supply services at competitive rates

• Provide participant education and counseling services

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Benchmarking and Selecting Funds

• Establishment of Investment Policy Statement

– Asset categories that enable diversification

– Allocation or asset mix is what drives return, not the funds themselves

• Selection and ongoing monitoring criteria

– 11 criteria evaluated and scored each and every quarter

– Data fields downloaded from Morningstar

– On average, historical net returns of new funds have outperformed net returns of

existing funds offered in same category

– No guarantees but fair, reasonable, repeatable process with documented and

actionable results

• Quarterly meetings/reports

– Continuous focus on best interest of plan participant

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Fund Selection Criteria

1. Inception Date: Must have 3 Yr track history

2. Tenure: Senior manager must have at least 2 Yr

3. Assets: Minimum of $75M

4. Composition: Greater than or equal to 80%

5. Style: Must match peer group

6. Net Expense: Must not be in lower quartile

7. Alpha: Top 50% of peer group

8. Sharpe: Top 50% of peer group

9. 1 Yr Net Rtn: Top 50% of peer group



Minimum criteria for short list:

An Illustration of Fund Selection

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Sample results for Large Growth:

• 22,785 mutual funds

• 1,605 Large Growth

• 32 in top 10% Fiduciary Score

• 13 top 25% 5 Yr Net Return

Fund 1 2 3 4 5 6 7 8 9 10 11

Wells Fargo √ √ √ √ √ √ √ √ √ √ √

Ridge worth √ √ √ √ √ √ √ √ √ √ √

T.Rowe Price √ √ √ √ √ √ √ √ √ √ √

Franklin Growth √ √ √ √ √ √ √ √ X √ √

TIAA-CREF √ √ √ √ √ √ X X X X X

An Illustration of Fund Selection

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Fiduciary Score Fiduciary Score Manager Tenure

Name Ticker Qtr 3YR Average 1 Yr Rtn 3 Yr Rtn 5 Yr Rtn 10 Yr Rtn Sharpe (years)

Wells Fargo Advantage Growth A SGRAX 0 0 26.3 3.5 8.9 1.8 0.2 8.7

RidgeWorth Aggressive Growth Stock A SAGAX 0 6 21.5 2.1 6.6 0.2 6.9

T. Rowe Price New America Growth PRWAX 0 0 19.3 3.2 6.0 2.8 0.2 8.5

Franklin DynaTech A FKDNX 0 2 18.5 0.9 5.4 3.8 0.1 43.0

JPMorgan Large Cap Growth A OLGAX 0 5 22.3 -0.3 5.3 0.4 0.1 6.4

MainStay Large Cap Growth A MLAAX 0 3 15.2 -0.5 4.9 2.4 0.1 15.5

BlackRock Capital Appreciation Inv A MDFGX 0 2 19.1 1.0 4.8 1.7 0.1 5.0

American Century Growth A TCRAX 0 3 17.4 -0.6 4.7 0.7 0.1 13.3

Franklin Growth A FKGRX 12 7 14.9 0.9 4.7 2.9 0.1 45.9

Wells Fargo Advantage Strat LgCp Gr A ESGAX 0 4 18.1 0.5 4.6 0.1 0.1 13.1

Nuveen Large Cap Growth Opp A FRGWX 0 6 22.1 0.7 4.5 0.4 0.1 8.5

Franklin Flex Cap Growth A FKCGX 0 4 16.3 -0.2 4.1 1.7 0.1 17.5

TIAA-CREF Large-Cap Growth R TILRX 49 Not Scored 12.8 -3.7 -0.1 4.8

Individual Fund Fact Sheets

• View investment objective, strategy and performance for each individual fund

on the new Investment Menu online at www.tiaa-cref.org/amherst

• Click on PLANS & INVESTMENTS and then select INVESTMENT CHOICES

to view individual fund information

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New Investment Menu

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Transitioning to the New Investment Menu:

Frozen Funds on Current Menu

No Further Contributions After 12/1

ALL FIDELITY FUNDS

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Transitioning to the New Investment Menu

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Unless you take action, Future Contributions, after 12/1,

redirected to Age-Appropriate Target Date Fund


New contributions for current employees

Beginning October 24, you can access information

about the new Investment Menu online at

www.tiaa-cref.org/amherst

Welcome Kit(s) from TIAA-CREF for the new RC and RCP contracts/certificates

Beginning November 1, select how your contributions are invested after December 1

If you do not update your choices by December 1, your future

contributions will be invested in an age-appropriate Target Date Fund

managed by T. Rowe Price

Anytime, following the December 2 transition to the New Investment

menu, you can choose to re-direct how your contributions are allocated

to the new investment menu

Retirement Choice Annuity (RC) and Retirement Choice Plus (RCP) contracts used after December 1,

2011

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See the Transition Guide for more details.

http://www.tiaa-cref.org/amherst




Existing assets in Frozen Funds

Beginning October 24, you can access

information about the new Investment Menu online

at


Existing assets can be moved between the funds on the existing

investment menu until market close on December 5

Contributions received after December 1 will be redirected to an age-

appropriate T. Rowe Price Target Date Fund if you do not take action

After December 5, transfers of existing assets in the frozen

funds can only be made to funds on the new Investment Menu

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Transitioning to Lower Cost Share Class

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If you currently invest with Fidelity

Beginning October 24, you can access information

about the new Investment Menu online at


Select investment choices for future contributions from the new

Investment Menu and designate your beneficiary, if necessary

Existing assets at Fidelity will remain, unless you transfer them

to the new Investment Menu

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All current employees

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• Review your 3rd Quarter Investment Statements, including statements from

TIAA-CREF and Fidelity, if applicable.

• Compare your statements to the new Investment Menu.

• Schedule a One-on-One Investment Counseling Session with a

TIAA-CREF consultant by calling 800 732-8353. During your Counseling

Session, you will receive assistance updating your retirement portfolio.

Please Note:

Bring your latest Investment Statements, including investments outside of your

Retirement Plan, and your most recent Social Security statement, if available,

to your counseling session.

Updating Your Investment Choices

Beginning November 1, you can update your investments via the following ways:

• Online: www.tiaa-cref.org/amherst

• Phone: 800 842-2888

Monday through Friday, 8 a.m. to 10 p.m. and Saturday, 9 a.m. to 6 p.m. (ET)

• In Person: On-Campus Counseling Sessions

You will receive assistance updating your investment choices during your Individual

Counseling Session

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Updating Your Investment Choices Online


Log into your account using your

TIAA-CREF Contract Number(s) or

current log-in information.

If you are unsure about your contract

number or have forgotten your log-in

information, contact TIAA-CREF at

800 842-2888.

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LOG IN

Updating Your Investment Choices

To update your investment choices:

1. Choose the plan/contract you want to change your asset allocation.

2. Select a new asset and input a percentage.

3. You will receive a confirmation in the mail anytime there is a change.

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Learn More

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Be sure to review the detailed Transition Guide that was mailed to your home and

posted on the Retirement Plan website, www.tiaa-cref.org/amherst

Set up an appointment for an Individual Counseling Session:

• Find out if you are saving enough

• Choose the right investment funds for your needs

• Receive assistance transitioning to the new menu

To schedule your session, call TIAA-CREF at 800 732-8353

Monday to Friday from 8 a.m. to 8 p.m. (ET).




Q&A

Remember to Register for the iPad 2 Drawing! One prize will be given away at the end of each seminar day.

The winner will be announced via an email from Human Resources.

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