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 January 2020, Harvard announced 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” which was mailed to retirement plan participants on February 18, 2020, and learn more by viewing this 15-minute overview of the changes and transition.

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

What is happening

Effective April 9, 2020, Harvard implemented the new TIAA platform and new investment lineup. New accounts were set up 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 are being 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.

Effective September 2020, retirement account balances at Fidelity and Vanguard were transferred to participants’ new accounts at TIAA and existing balances in many TIAA accounts were transferred to the new investment lineup,

  • September 9: TIAA mutual fund account balances that were in funds that are not part of the new investment lineup were moved to funds available in the new lineup (balances in annuities will not transfer).
  • September 15: Account balances with Fidelity and Vanguard were moved to your account at TIAA and directed to funds in the new investment lineup.

Please review the Transfer of Retirement Plan Balances brochure for details.

The Changes

New Investment Lineup

The Harvard retirement plans has a new simplified retirement plan investment lineup (refer to page 3) for plan contributions.

  • 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 is a 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. 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. Contact TIAA to set up a brokerage account.

New Online, Consolidated Investment Platform

Along with the new lineup, Harvard retirement plans have moved to a single multi-vendor platform that is managed by TIAA for retirement account administration and recordkeeping. Participants’ retirement account balances in Fidelity and Vanguard (two of Harvard’s previous retirement account vendors) were transferred to the new TIAA platform. See the “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.

You will receive a consolidated quarterly statement showing all your 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

The transition timeline was as follows:

April 8, 2020

New TIAA accounts were set up for Fidelity or Vanguard participants

April 9, 2020

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

September 9, 2020

TIAA account balances invested in funds that are no longer available in Harvard fund line-up were moved to funds in the new line-up

September 15, 2020

Remaining account balances at Fidelity and Vanguard transferred to participants’ TIAA accounts