Master Administrator Participant Notice Effective Dec. 2011

TO:                  UM Tax-Deferred Investment Plan Participant

FROM:              Kelley Stuck, AVP Total Compensation

DATE:              December 9, 2011

RE:                  Board Vote on Changes for Tax-Deferred Investment (TDI) Plans

As a participant in one or more of the university’s voluntary tax-deferred plans, this letter is to update you on action taken by the University of Missouri Board of Curators at its Dec. 9, 2011, meeting.  The Board has approved Fidelity Investments as the master administrator to manage the defined contribution portion of the new retirement plan for employees hired after Sept. 30, 2012, as well as its voluntary tax-deferred investment (TDI) program.

This decision pertains only to the administrative functions of the plans. The university has not yet selected its asset investment list, and Fidelity does not require the use of any of their proprietary investment funds.  As the next step, the Retirement and Staff Benefits Committee will meet with Fidelity and investment advisors, providing input on the investment selection process.   The university will bring a recommendation that mitigates employee risk, encourages retirement plan savings, and provides an appropriate array of options at the February 2012 board of curators meeting. As a part of the process, feedback will be gathered from staff and faculty councils, as well as the Retirement and Staff Benefits Committee.

The Retirement and Staff Benefits Committee, composed of faculty and staff representatives from all campuses, has been considering administrative consolidation in the TDI plans for some time. For example, the UM 403(b) plan has more than 870 mutual funds through 10 different investment providers. Because these vendors only manage a portion of the investments, employees are paying higher fees. In addition, regulatory requirements have placed a larger fiduciary responsibility on the university to manage investments in these plans. 

Fidelity Investments was chosen as master administrator from among four finalists.  The finalists were evaluated on their key players and account managers, organization experience and qualifications, recordkeeping and administrative capabilities, participant communication and educational resources, conversion process resources, and fees, among other items.  Fidelity Investments offered the lowest participant fees and expenses, state-of-the-art technology and online enrollment capabilities, and a broad array of investment options designed to meet various investment needs and preferences.

A list of questions and answers may be found on the UM Benefits website: www.umsystem.edu/mytotalrewards.  If you have additional questions, please contact LaRae Kostal, 573-882-6582, kostall@umsystem.edu or Rebecca Hay, 573-884-2350, hayr@umsystem.edu.

Reviewed 2011-12-22.