Retirement Changes 2020

Important Upcoming 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 at on-campus and online information sessions; see dates at right and below.

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

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. Brokerate 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 be moved to the new TIAA brokerage option and will receive additional information by mail.

New Online, Consolidated Investment Platform

Along with the new lineup, Harvard retirement plans are moving to a single platform that will be managed by TIAA for retirement account administration and recordkeeping. Current investment accounts at Fidelity and Vanguard will be moved to the new TIAA platform in April; there will be a blackout period beginning April 6, 4pm and lasting until April 24 to ensure the smooth transition to the new platform. 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.

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.

Here’s how the transition of investments will generally work:

  • If you have money in funds that remain as part of our new lineup of funds, your balances and future contributions stay in those funds, with an account at TIAA.
     
  • If you have money in funds that will no longer be directly offered as part of Harvard’s retirement plans, your balances and future contributions will be moved to a similar fund in the new lineup, with an account at TIAA.

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

An overview of the transition timeline is as follows:

March 20, 2020

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

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

Existing balances in Fidelity and Vanguard transfer to TIAA accounts