Date: November 11, 2008 To: All Faculty, Staff and Administrators From: Sheri J. Tonn, Vice President for Finance and Operations RE: PLU Retirement Plans The Pacific Lutheran University retirement plan will change January 1, 2009 as a result of new federally mandated regulations. Due to these new regulations, we will no longer offer Thrivent or Fidelity as providers of retirement investments. All PLU retirement plans will be administered by TIAA-CREF beginning January 1, 2009. There will also be some changes in the investment options available from TIAA-CREF and new retirement plan contracts will be issued to everyone. NO IMMEDIATE ACTION ON YOUR PART IS REQUIRED. HOWEVER YOU MAY WISH TO ATTEND INFORMATIONAL SESSIONS AS THEY ARE SCHEDULED. There will be two initial campus meetings this Friday, November 14, one from 9:15 a.m. to 10:15 a.m. and repeating at 12:30 p.m. to 1:30 p.m., both in UC 133. Providing additional information at these meetings will be the consultant who has been working with us through this process, a representative of TIAA-CREF and me. You’ll be receiving more details soon, along with a schedule of group and individual counseling sessions. Thrivent decided to discontinue offering a PLU retirement plan because 403(b) plans like ours are not a large portion of their business. Given the scope of their 403(b) business and given the cost of coping with federal regulations, the home office came to the conclusion that it was not cost effective to continue with retirement plans like ours. We were disappointed that it turned out this way but understand the business decision that was made. The PLU Ad Hoc Retirement Committee conducted an exhaustive review of bids submitted by both TIAA- CREF and Fidelity. The committee concluded that Fidelity’s bid was not as competitive for a variety of reasons including less investment flexibility, fewer on-campus services, and higher expenses. After careful consideration, the decision was made to go with one vendor, TIAA-CREF. Overall we believe that the changes that are coming to the retirement plan will benefit both you and the university through: lower fees for participants; increased services through educational seminars, increased on campus visits, and built in penalties paid to PLU if TIAA-CREF is in non-compliance; a thoughtfully constructed menu of investment choices including TIAA-CREF and non-TIAA-CREF funds that cover all the major asset classes; the financial strength and stability of TIAA-CREF. In fact, TIAA is one of only a few insurance companies to have the highest possible ratings from all four of the major ratings agencies; consolidated reports that will streamline administration and result in savings to the university. WHEN THE MOVE IS MADE TO THE NEW TIAA-CREF PLAN, THERE WILL BE NO CHANGES TO THE CURRENT BASE CONTRIBUTIONOF 7.5 PERCENT FROM PLU OR THE CURRENT MATCHING SCHEDULE. In other words, there is no change to the current contribution structure in place today. The approximately 200 current participants with Thrivent and Fidelity will be joining those already with TIAA-CREF. Everyone will be receiving new contracts with TIAA-CREF—those new to TIAA-CREF as well as those currently with them. Some aspects of this transition are still being finalized. If you have questions in the meantime, please contact Teri Phillips, ext. 7187 or email@example.com.
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