Retirement Changes 2020

Changes to Retirement Investment Options and Administration

With Harvard’s retirement plans, you choose how to invest the money in your accounts, both those funded by the University and those you fund yourself, like the TDA. In April, Harvard is making some changes to the investment options available and the administration of plan investment accounts. The changes affect all retirement plan participants including active faculty and staff as well as retirees and former employees with retirement investment account balances.

You can read about the changes in detail in the “Your Guide to 2020 Retirement Program Changes” mailed to retirement plan participants on February 18, 2020, and learn more by joining an online information session.

There are no changes to Harvard’s retirement plan contributions, eligibility, vesting or other aspects of the plans’ designs.

IMPORTANT MESSAGE ON UPCOMING RETIREMENT CHANGES

As announced, earlier this year, Harvard will be introducing two changes in April: a streamlined investment lineup and a single, multi-vendor investment platform. This will still begin as scheduled, as outlined below.

However, due to the COVID-19 pandemic and the resulting stock market volatility, Harvard has decided to postpone the transfer of existing balances at Fidelity and Vanguard to the new TIAA administrative platform until further notice. By postponing the movement of existing balances, we also postpone a 15-business-day “blackout period,” during which Fidelity and Vanguard plan participants would not be able to see or re-allocate their balances. Learn more in the March 25, 2020 update letter.

What is happening

As of April 9, 2020, the new TIAA platform and new investment lineup will become active as originally planned. New accounts will be available in the TIAA platform for those with Vanguard and/or Fidelity accounts, as follows:

  • All contributions to Harvard retirement, TDA and 457(b) accounts after this date will be directed to your new account on the TIAA platform and into the new investment lineup default investments (see “Your Guide to the 2020 Retirement Plan Changes”).
  • You can make changes to your future investment allocations, update your beneficiaries in your TIAA account and view your new account balances.

No new contributions or transfers will be directed to existing accounts at Fidelity or Vanguard after this date, but existing balances will remain at these vendors and in your current investments. You can continue to view and manage these balances through their current vendor and receive quarterly statements.

Additional live Webinars have been added where you can learn about the changes.

The Changes You Will See

New Investment Lineup

In April, the Harvard retirement plans will have a new simplified retirement plan investment lineup (refer to page 3) that will include a number of the currently available mutual funds and annuities:

  • Target-date funds from Vanguard: This remains the default investment for Harvard retirement plans. A target-date fund is a diversified investment in a single fund with built-in asset allocation. Participants are generally invested in funds according to the year in which they turn age 65. It’s invested for potential growth in your early years, then gradually transitions to more conservative investments as you approach age 65.
     
  • Mutual funds from Vanguard and Schwab – If you prefer to choose your own investments, you can choose among the “core fund” choices, a range of investment options selected by Harvard to help you build a diversified portfolio.
     
  • Annuities from TIAA – Annuities are financial investment options that guarantee to pay you (or you and a spouse or partner) income for life. The investment lineup offers several options that you may elect.
     
  • In addition, there will be a new self-directed brokerage option from TIAA for sophisticated investors who are comfortable making their own investment selections. Brokerage offers access to thousands of mutual funds, including funds that will no longer be in the retirement investment lineup. Harvard does not monitor the funds available through brokerage and you cannot receive investment advice from the University’s one-on-one appointments on these investments. Current brokerage participants will automatically have a new TIAA brokerage account set up and received additional information by mail in March.

New Online, Consolidated Investment Platform

Along with the new lineup, Harvard retirement plans are moving to a single multi-vendor platform that will be managed by TIAA for retirement account administration and recordkeeping. See more below and refer to your “Your Guide to 2020 Retirement Program Changes” and the FAQs for additional details.

Having a single administration platform helps consolidate your information in one convenient place, with one website where you can view and elect investments and make changes as well as handle administrative tasks, like updating your beneficiaries.

The move of current investment accounts at Fidelity and Vanguard to the new TIAA platform has been postponed, as described above. Once the transfer is completed in the future, employees will receive a consolidated quarterly statement showing all Harvard retirement plan investments and account activity. If you use a phone app, the TIAA app (App Store or Google Play) will have all your Harvard retirement investment account information.

Fees

Retirement plan participants will be charged an administrative fee of $28 per year ($7 per quarter) per person (not per account). This represents a reduction in the fee for most Harvard plan participants. This fee covers administration and recordkeeping costs by TIAA. Note that the investment funds available through Harvard’s retirement programs charge additional management fees; please refer to “Your Guide to 2020 Retirement Program Changes” (pages 20-22) for details.

Transition to the new fund lineup

You do not have to make any active election or changes during the transition, although we encourage you to learn more and be informed about your retirement investment options. As of April 9, 2020, the new TIAA platform and new investment lineup will become active. New accounts will be available in the TIAA platform for those with Vanguard and/or Fidelity accounts, as follows:

  • All contributions to Harvard retirement, TDA and 457(b) accounts after this date will be directed to your new account on the TIAA platform and into the new investment lineup default investments.
  • You can make changes to your future investment allocations, update your beneficiaries in your TIAA account and view your new account balances.
  • Refer to the “Your Guide to 2020 Retirement Program Changes” for detailed fund-mapping:
    • If you are currently a Fidelity investor, see page 8
    • If you are currently a TIAA investor, see page 10
    • If you are currently a Vanguard investor, see page 13

No new contributions or transfers will be directed to existing accounts at Fidelity or Vanguard after this date, but existing balances will remain at these vendors and in your current investments. You can continue to view and manage these balances through their current vendor and receive quarterly statements.

An overview of the transition timeline is as follows:

March 20, 2020

THIS STEP IS POSTPONED UNTIL FURTHER NOTICE

Last day for participants with Fidelity or Vanguard accounts to make changes to those accounts

April 3

New investment lineup and brokerage available in TIAA and to participants with an existing account at TIAA

April 6, 4pm – April 24

THIS STEP IS POSTPONED UNTIL FURTHER NOTICE

Blackout period for participants with Fidelity or Vanguard accounts, during which you cannot make any changes

Note that the end date of the blackout period is subject to timely transfer of assets from Fidelity and Vanguard to TIAA

April 8

New TIAA accounts set up and available to Fidelity or Vanguard participants

April 9

All plan contributions directed to new TIAA accounts and funds available in the new investment lineup

April 14

THIS STEP IS POSTPONED UNTIL FURTHER NOTICE

Existing balances in Fidelity and Vanguard transfer to TIAA accounts