The following questions and answers are designed to help you understand the upcoming changes to the Duke Faculty and Staff Retirement Plan (“Duke Retirement Plan”).
A Duke Benefits team will conduct informational sessions and individual meetings concerning the modifications of the plan and answer any questions you may have. Fidelity Retirement Planners will also be available to answer questions.
- What is changing?
- What are the new funds and investment choices?
- What is a Self-Directed Brokerage account?
- When will the changes take effect and what will happen?
- What happens to my existing investment options?
- What is a mapping strategy and what happens during this process?
- Will there be any changes to the contributions made by Duke?
- Will there be any changes to the Employees’ Retirement Plan?
- Will there be any changes to the contributions I can make?
- Who do I contact with questions about these changes?
- How can I learn more?
- What types of educational resources are available?
- What will happen to the loan I have at VALIC or TIAA?
- Effective January 2019, Fidelity Investments (“Fidelity”) will become the primary service provider for administration of the Duke Retirement Plan’s investment options, enrollment, and changes to your contribution amount.
- Vanguard will be eliminated as a service provider for administration.
- VALIC’s annuity accounts will be frozen to all new contributions. VALIC will continue to administer frozen annuity products. Mutual funds balances at VALIC will transfer to Fidelity based on a mapping strategy.
- TIAA’s annuity products will be frozen to all new contributions except for the TIAA Traditional Fixed Annuity fund, which will continue to be available. TIAA will administer frozen annuity products and the TIAA Traditional Fixed Annuity fund. Mutual fund balances at TIAA will transfer to Fidelity based on a mapping strategy.
- Duke will implement a new investment lineup and offer a self-directed brokerage account through Fidelity effective in May 2018.
The new investment lineup and self-directed brokerage option in the Duke Retirement Plan will provide a variety of investment choices available through Fidelity. You can develop and customize a diversified investment portfolio from the following:
- Tier 1: Target Date Funds. The Vanguard Retirement Target Date funds continue to be the Plan’s Tier 1 funds. These funds are designed for investors expecting to retire around the year indicated in each fund's name. A Target Date Fund is invested in a portfolio of mutual funds that automatically becomes more conservative as the fund approaches its target retirement date and beyond. Principal invested is not guaranteed. These funds are chosen and monitored by Duke’s Investment Advisory Committee (IAC). You can visit hr.duke.edu/retirementredesign to view the investment descriptions for the Vanguard Retirement Target Date Funds.
- Tier 2: Core Funds. Duke’s IAC, with the assistance of an investment advisory firm, carefully selected the core investment options, which include some existing funds as well as new funds, that reflect all major asset classes and includes short-term investments, bonds, and stocks. Each fund offered is priced at the lowest share price available for the particular fund. The new investment lineup allows you to customize and build a portfolio your way. You can visit hr.duke.edu/retirementredesign to view the investment descriptions for the new Core Funds.
- Tier 3: Self-Directed Brokerage Account. Fidelity BrokerageLink®, a self-directed brokerage account, gives you access to additional mutual funds for your retirement savings beyond the target date funds and core funds available in Tiers 1 and 2. BrokerageLink® combines the convenience of your workplace retirement plan with the additional flexibility of a brokerage account. Note, though, that the IAC neither evaluates nor monitors the mutual funds available through BrokerageLink®. It is your responsibility to ensure the investments you select are suitable for your situation, including your goals, time horizon, and risk tolerance. You can visit hr.duke.edu/retirementredesign to view the commission schedule for applicable fees and risks.
Beginning in May 2018, you may choose among these options through Fidelity to create a mix of funds that best suits your investment portfolio. Visit hr.duke.edu/retirementredesign to learn more.
A self-directed brokerage account is essentially a do-it-yourself option that is designed for investors who desire more choice of investments. When you direct contributions to a self-directed brokerage account, your investments are allocated in mutual funds apart from those available in the plan. This option offers participants a broad range of mutual fund options, but may require more time and expertise to assess, monitor, and manage your chosen funds.
The IAC neither evaluates nor monitors the investments available through BrokerageLink®. It is your responsibility to ensure the investments you select are suitable for your situation, including your goals, time horizon, and risk tolerance. You can visit hr.duke.edu/retirementredesign to view the commission schedule for applicable fees and risks.
The self-directed brokerage account option will be provided by Fidelity BrokerageLink® and will be added to the Duke Retirement Plan effective in May 2018. This option may allow participants to continue investing in funds which may no longer be available in the Duke Retirement Plan.
In May 2018, Duke will implement the new investment lineup, as well as provide a self-directed brokerage account through Fidelity. Starting in May, you will be able to select investments in the revamped investment lineup or self-directed brokerage account at Fidelity. The existing funds available through the other providers will continue to be available until January 2019. Unless you elect otherwise, your contributions will continue to be directed to your selected provider and investment option(s) until January 2019.
In January 2019, Fidelity will become the primary service provider for administration of the Duke Retirement Plan. VALIC and Vanguard will no longer be available as service provider administrators of the Duke Retirement Plan. Further, you will not be able to invest future contributions to the Plan in VALIC’s annuity products. Access to TIAA’s investment options will be limited to the TIAA Traditional Fixed Annuity fund. If you do not transfer your existing funds and/or redirect your future contributions by December your existing funds will be transferred (or “mapped”) to what CAPTRUST, the Plan’s investment advisor, has determined to be comparable funds in the revamped investment lineup or the appropriate Target Date Fund, based on your age, if there is no comparable fund. Your future contributions will be allocated to a Target Date Fund.
Additional information about these changes, key dates, and actions to consider will be provided later this year.
Throughout 2018, all existing investment options will remain available, unless notified otherwise. If you do not take action by January 2019, balances held at Fidelity, Vanguard and mutual fund balances held at TIAA and VALIC will transfer to the new investment lineup at Fidelity based on a mapping strategy. Annuity investments at TIAA and VALIC will not transfer to Fidelity unless you initiate an individual transfer of your assets.
TIAA annuity investments that will not transfer to Fidelity unless you initiate a transfer request include:
- CREF Stock
- TIAA Real Estate
- CREF Money Market
- CREF Social Choice
- CREF Bond Market
- CREF Global Equities
- CREF Growth
- CREF Equity Index
- CREF Inflation-Linked Bond
- TIAA Traditional
A mapping strategy is when existing balances and future fund allocations are transferred (or “mapped”) from one fund to another if the employee does not take action.
For your existing balances, there are 3 scenarios that will occur during Duke’s upcoming mapping to the Fidelity platform:
- Mapping to the Same Fund – If the same fund that is offered at Fidelity, TIAA, VALIC or Vanguard is available on the new investment lineup at Fidelity and therefore it will be mapped to the same fund on the Fidelity platform.
- Mapping to a Similar Fund - If the same fund is not available, the fund will be mapped to what CAPTRUST, the Plan’s investment advisor, has determined to be a comparable fund in the revamped investment lineup at Fidelity.
- Mapping to a Default Fund – If the same or similar fund is not available, then the fund balance will be mapped to the age-based Vanguard Target Retirement Date Fund at Fidelity based on the year the employee turns age 65.
If you take no action, the IAC has indicated that any of your future contributions will be invested in the age-based Vanguard Target Retirement Date Fund at Fidelity based on the year you turn age 65.
No. If you are eligible to receive Duke contributions through the Faculty and Staff Retirement Plan, the Duke contributions remain unchanged. The Duke contribution formula is determined each year and published prior to the beginning of the year. The formula for 2018 is:
- 8.9% of the first $64,000 of salary.
- 13.2% of annual salary in excess of $64,000, up to a statutory salary limit of $275,000.
No. If you are eligible for the Employees’ Retirement Plan (ERP), it remains unchanged.
No. You can still defer up to the maximum amount of contributions allowed by Internal Revenue Code on a pre-tax basis, Roth after-tax basis, or a combination of both. Please note the following:
- The 2018 contribution limit is $18,500.
- Any employee age 50 or older is eligible for an additional catch-up contribution of $6,000, which means your contribution can be up to $24,500 per calendar year.
- If you have more than 15 years of service at Duke and have not maximized contributions in the past, you may also be able to contribute an additional $3,000 per year using the “15 years catch-up” election.
A dedicated website will be available to provide you with information regarding these changes. Visit hr.duke.edu/retirementredesign. If you have any questions about these changes to your retirement plan, you may call (800) 823-0172 or email email@example.com.
Duke will host a number of information sessions throughout 2018. For a schedule of the information sessions and additional information, please visit hr.duke.edu/retirementredesign. We encourage you to pay special attention to the information provided in the coming months.
Duke Benefits will provide the following resources to help you prepare and understand the Duke Retirement Plan changes:
- We are committed to making this transition as smooth and seamless as possible. Fidelity representatives will increase their presence on campus to offer help and guidance and provide advice on investing. You can also get help and advice on investing over the phone at 800-343-0860.
- Information sessions hosted by the Benefits Office will be available to discuss the upcoming changes. For the schedule of the information sessions, please visit hr.duke.edu/retirementredesign.
- A dedicated website that will contain additional information and details at hr.duke.edu/retirementredesign.
- Various emails and printed materials will be sent throughout the year to provide additional details.
Individual consultations with Fidelity, VALIC, Vanguard, or TIAA representatives are available. They can help you answer questions about resources, investment strategy, and specific investments. To schedule an appointment, visit hr.duke.edu/carriers.
A new loan program with Fidelity will be introduced in 2018. You should continue to repay your loan as you do now. Most loans will transfer to Fidelity later in the year and payments would continue as normal but directed to Fidelity. Additional information will be provided later in 2018 about your specific loan. You will not be required to pay your loan off immediately in full at TIAA or VALIC and payment schedules will continue as normal.
Before investing in any mutual fund, consider the investment objectives, risks, charges, and expenses. Contact Fidelity for a prospectus or, if available, a summary prospectus containing this information. Read it carefully.
Investing involves risk, including risk of loss.
This document provides only a summary of the main features of the Duke Faculty and Staff Retirement Plan and the Plan Document will govern in the event of discrepancies.
The Plan is intended to be a participant-directed plan as described in Section 404(c) of ERISA, which means that fiduciaries of the Plan are ordinarily relieved of liability for any losses that are the direct and necessary result of investment instructions given by a participant or beneficiary.
VALIC, Vanguard, TIAA and Fidelity Investments are independent entities and are not legally affiliated.
The third-party trademarks and service marks appearing herein are the property of their respective owners.