On Dec. 3, the College will be expanding its pension plans for employees. The new plan will affect all faculty and staff with Teachers Insurance and Annuity Association-College Retirement Equities Fund (TIAA-CREF) contracts. These changes were ratified in the monthly faculty meeting, which took place on Oct. 3.
The major objective of this new plan is to reduce the administrative and management fees that are associated with making changes to one’s portfolio. The College was able to negotiate reduced costs with TIAA-CREF, which is the retirement provider for the College.
In addition, the plan offers new low-cost index funds, which will enhance the current investment menu offered to faculty and staff. These new options will offer a wide array of funds that will allow faculty and staff to easily diversify their current portfolios.
However, some investment options will no longer be available to faculty and staff in December. The College will eliminate the CREF Bond Market Account, CREF Inflation-Linked Bond Account, CREF Equity Index Account, CREF Growth Account and CREF Global Equities Account.
“At the most basic level, nothing changes,” said Kris Maloney, benefits administrator for the College. “Contribution rates – i.e. the amount the College contributes and the amount faculty and staff may contribute – eligibility requirements, and all other aspects of the plan remain the same.”
She said that the most popular investment options will continue. These options include the TIAA Traditional Annuity, the TIAA Real Estate Account variable annuity, the CREF Stock Account and the CREF Money Market Account and CREF Social Choice Account variable annuities.
According to Maloney, the changes did not result from the current state of the economy, but from a careful review of the current system with an eye towards streamlining and improving planholders’ experiences. “The changes resulted from the College’s Retirement Plan Committee, assisted by an independent advisory firm, Fiduciary Investment Advisors, conducting a thoughtful and thorough review,” Maloney said.
The Faculty Compensation Committee, Benefits Committee, the Board of Trustees’ Budget and Financial Planning Committee and senior staff were also consulted before the changes were made. Ultimately, the incentive for making changes to the plan was to reduce administrative and management costs as well as to offer more competitive investment options for employees.
There has been a rise in registrations for on-site workshops and one-on-one counseling sessions that will help faculty and staff navigate the new plan. Overall, according to Maloney, the faculty has met these changes with a generally positive response, as demonstrated during the most recent faculty meeting.