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University of Missouri Board of Curators approves master administrator for new retirement plan and voluntary tax-deferred investment program

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John Fougere

Chief Communications Officer

University Relations

Dec 09, 2011

Fidelity Investments will support employees’ retirement goals through a streamlined, simplified retirement plan offering

The University of Missouri Board of Curators today approved Fidelity Investments as its master administrator to manage the defined contribution portion of the new retirement plan for new employees, as well as its voluntary tax-deferred investment program.

“This is a significant step for the university that will have long-lasting benefits for employees,” said University of Missouri System Vice President of Human Resources Betsy Rodriguez. “By moving to a master administrator, we will still provide employees with an array of investment options, but we will reduce administrative fees by more than half, expand employee services and allow the university to have a more structured, comprehensive retirement approach that benefits employees’ retirement savings goals.”

The university’s new retirement plan for future employees—approved by the board of curators in October—includes a defined contribution portion that requires a plan administrator. The university also has been considering for some time the administrative consolidation of its current voluntary tax deferred investments.  These investments have more than 870 funds from 10 different vendors. The current tax-deferred investment program requires employees to visit vendors’ websites for investment fund information and does not provide consolidated statements. In addition, employees are paying “retail” fees, and new regulatory requirements have placed a responsibility on the university to manage these funds well for its employees.

“The University of Missouri System is not alone when it comes to the administrative burden of maintaining multiple providers within their retirement plans,” Rodriguez said. “As a result, more and more not-for-profit institutions like the university are helping to minimize the fiduciary risk and exposure and deliver a more beneficial plan for employees by consolidating to a single administrator.”

Rodriguez emphasized that the university has not yet selected its asset investment list and will bring a recommendation that mitigates employee risk, encourages retirement plan savings, and provides an appropriate array of options at the February 2012 board meeting.

Fidelity will become the university’s single administrator in October 2012 when the new retirement plan takes effect for new employees. Fidelity—like all the vendor finalists—has no requirement to use any proprietary funds of the administrator.

"We are excited to be expanding and extending our nearly 20-year relationship with the University of Missouri," said John Ragnoni, executive vice president of Tax-Exempt Business for Fidelity Investments. "We are pleased that after a careful and comprehensive review, the University of Missouri System has joined other higher education institutions in affirming that Fidelity is best able to meet their needs and the needs of their employees."

Fidelity was chosen from among four finalists. The vendors were evaluated on their key players and account managers; organization experience and qualifications; record keeping and administrative capabilities; participant communication and educational resources; conversion process resources and experience; and fees, among other items. Fidelity 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.

The change to a single administrator was discussed with faculty and staff governance groups on all campuses and was recommended to the board of curators by the Retirement and Staff Benefits Committee.