This notice describes how your contributions to the Faculty and Staff Retirement Plan (the “Plan”) will be invested if you have a payroll deduction set up to contribute but do not select specific investment funds. It also describes your rights and responsibilities in connection with default investments. No action is required at this time unless you would like to make changes to your investment selections.
Your Right to Direct Investments
You have the right to direct contributions for investment into one or more investment options in the Plan. The Plan offers a range of investments, intended to allow you to achieve a diversified portfolio. Effective January 2019, Fidelity will become the primary recordkeeper of the Plan for retirement services and investment options. TIAA will only offer its traditional fixed annuity product.
If you have a payroll deduction set up to contribute or will start receiving Duke’s contribution but do not make investment elections, contributions will be automatically invested in the appropriate default investment fund at Fidelity. The default investment fund established under the Plan is the Vanguard Institutional Target Retirement Date Fund series.
Contributions invested in a default investment fund will remain invested in the default fund until you direct otherwise. You may change your investment allocation of your Plan’s account at any time without incurring financial penalty. However, the value of your account at the time of transfer is based on current market value and is subject to any gains or losses. If you would like to change how the contributions to your Faculty and Staff Retirement Plan are invested, you can do so through the Fidelity website at fidelity.com/duke. If you need assistance, contact Fidelity at 800-343-0860.
It is intended that the default investment fund be a "qualified default investment alternative" (QDIA) as defined under the Employee Retirement Income Security Act of 1974 (ERISA). Details about the Vanguard Institutional Target Retirement Date Fund are included in this notice.
Understanding Your Investments
You should consider the investment objectives, risks, charges and expenses carefully before investing. The fee disclosure information which includes fees and services associated with the plan is available at: hr.duke.edu/performance. This disclosure is intended to provide you with important information about your retirement plan investment options.
You may also obtain a prospectus from Fidelity for any investment fund. Contact TIAA to obtain additional information about the TIAA Traditional account. The prospectus will contain detailed information. If you invest in a target retirement fund, either by default or by affirmative election, the risks of each target retirement fund are the same as those of the underlying mutual funds in which they invest. The net expense ratio includes fees for the target retirement fund and fees for the underlying funds; each target retirement fund indirectly bears its pro rata share of the fees and expenses incurred by the underlying funds.
Learn More...Contact Your Retirement Service Provider
Please contact Fidelity to make changes to your current investment elections. It is strongly recommended that you review the investment objectives, risks, charges, and expenses prior to making an investment decision. This information can be found in each fund's prospectus.
|Retirement Service Provider||Website||Telephone Number|
|Fidelity Investment||fidelity.com/duke||(800) 343-0860|
Additional information about the Plan and how to enroll is also available on the retirement section of our website: hr.duke.edu/benefits/retirement. If you have questions regarding this notice, please contact the Benefits Office at (919) 684-5600.
Default Investment Fund Details for the Plan
The Vanguard Institutional Target Retirement Date Fund series has been designated as the default investment fund under the Plan. This fund series is available at Fidelity. Your contributions will be invested in the appropriate age based fund based on the year you turn age 65. These funds seek to provide capital appreciation and current income consistent with their current asset allocations. Once your money is invested in the fund with the date that is closest to the year when you turn age 65, the fund will gradually and automatically shift from more aggressive investments (stocks) to more conservative ones (bonds and short-term reserves). Use this chart to determine where your future contributions will be invested:
|Date of Birth||Retirement Date Range||Fund Name||Ticker Symbol||Expense Ratio as of 9/30/2018*|
|1947 and Earlier||2010 and before||Vanguard Institutional Target Retirement Income Fund Institutional Shares||VITRX||0.09%|
|1948-1952||2015 – 2020||Vanguard Institutional Target Retirement 2015 Fund Institutional Shares||VITVX||0.09%|
|1953-1957||2020-2025||Vanguard Institutional Target Retirement 2020 Fund Institutional Shares||VITWX||0.09%|
|1958-1962||2025 – 2030||Vanguard Institutional Target Retirement 2025 Fund Institutional Shares||VRIVX||0.09%|
|1963-1967||2030-2035||Vanguard Institutional Target Retirement 2030 Fund Institutional Shares||VTTWX||0.09%|
|1968-1972||2035 – 2040||Vanguard Institutional Target Retirement 2035 Fund Institutional Shares||VITFX||0.09%|
|1973-1977||2040-2045||Vanguard Institutional Target Retirement 2040 Fund Institutional Shares||VIRSX||0.09%|
|1978-1982||2045-2050||Vanguard Institutional Target Retirement 2045 Fund Institutional Shares||VITLX||0.09%|
|1983-1987||2050-2055||Vanguard Institutional Target Retirement 2050 Fund Institutional Shares||VTRLX||0.09%|
|1988-1992||2055-2060||Vanguard Institutional Target Retirement 2055 Fund Institutional Shares||VIVLX||0.09%|
|1993–1997||2060-2064||Vanguard Institutional Target Retirement 2060 Fund Institutional Shares||VILVX||0.09%|
|1998 and later||2065 and beyond||Vanguard Institutional Target Retirement 2065 Fund Institutional Shares||VSXFX||0.09%|
*Contact Fidelity at (800)343-0860 for a fund fact sheet or prospectus for additional details about a fund’s fees and expenses.
Understanding investment performance: As you review this update, please remember that the performance data stated represents past performance, which does not guarantee future results. Investment return and principal value of an investment will fluctuate; therefore, you may have a gain or loss when you sell your shares. Current performance may be higher or lower than the performance stated. To learn more or to obtain the most recent month-end performance, call Fidelity at 800-343-0860 or visit fidelity.com/duke (log in, choose plan, select Investment Choices & Research and then pick investment option).
|Fund Name||Ticker Symbol||Asset Class||Quarterly Average
1 Year % (as of 9/30/2018)
5 Year % (as of 9/30/2018)
10 Year % (as of 9/30/2018)
|Inception Date||Shortterm Trading Fee (%/days)||Gross Expense Ratio %||Gross Expense Ratio Date|
|Vanguard Institutional Target Retirement 2015 Fund Institutional Shares||VITVX||Target-Date 2015||4.60||N/A||N/A||5.07||06/26/2015||None||0.09||01/25/2018|
|Vanguard Institutional Target Retirement 2020 Fund Institutional Shares||VITWX||Target-Date 2020||5.92||N/A||N/A||6.04||06/26/2015||None||0.09||01/25/2018|
|Vanguard Institutional Target Retirement 2025 Fund Institutional Shares||VRIVX||Target-Date 2025||6.85||N/A||N/A||6.67||06/26/2015||None||0.09||01/25/2018|
|Vanguard Institutional Target Retirement 2030 Fund Institutional Shares||VTTWX||Target-Date 2030||7.73||N/A||N/A||7.15||06/26/2015||None||0.09||01/25/2018|
|Vanguard Institutional Target Retirement 2035 Fund Institutional Shares||VITFX||Target-Date 2035||8.54||N/A||N/A||7.64||06/26/2015||None||0.09||01/25/2018|
|Vanguard Institutional Target Retirement 2040 Fund Institutional Shares||VIRSX||Target-Date 2040||9.39||N/A||N/A||8.11||06/26/2015||None||0.09||01/25/2018|
|Vanguard Institutional Target Retirement 2045 Fund Institutional Shares||VITLX||Target-Date 2045||9.92||N/A||N/A||8.44||06/26/2015||None||0.09||01/25/2018|
|Vanguard Institutional Target Retirement 2050 Fund Institutional Shares||VTRLX||Target-Date 2050||9.88||N/A||N/A||8.44||06/26/2015||None||0.09||01/25/2018|
|Vanguard Institutional Target Retirement 2055 Fund Institutional Shares||VIVLX||Target-Date 2055||9.84||N/A||N/A||8.43||06/26/2015||None||0.09||01/25/2018|
|Vanguard Institutional Target Retirement 2060 Fund Institutional Shares||VILVX||Target-Date 2060+||9.83||N/A||N/A||8.41||06/26/2015||None||0.09||01/25/2018|
|Vanguard Institutional Target Retirement 2065 Fund Institutional Shares||VSXFX||Target-Date 2060+||9.93||N/A||N/A||11.61||07/12/2017||None||0.09||01/25/2018|
|Vanguard Institutional Target Retirement Income Fund Institutional Shares||VITRX||Target-Date Retirement||3.34||N/A||N/A||4.18||06/26/2015||None||0.09||01/25/2018|
Last categorization update date 09/30/2018
Total returns are historical and include change in share value and reinvestment of dividends and capital gains, if any. Cumulative total returns are reported as of the period indicated. Life of Fund figures are reported as of the inception date to the period indicated. These figures do not include the effect of sales charges, if any, as these charges are waived for contributions made through your company's employee benefit plans. If sales charges were included, returns would have been lower.
Morningstar, Inc. provided data on the non-Fidelity mutual funds. Although the data is gathered from reliable sources, accuracy and completeness cannot be guaranteed by Morningstar.
Expense Ratio Footnotes
For a mutual fund, the expense ratio is the total annual fund or class operating expenses (before waivers or reimbursements) paid by the fund and stated as a percent of the fund's total net assets. Where the investment option is not a mutual fund, the figure displayed in the expense ratio field is intended to reflect similar information. However, it may have been calculated using methodologies that differ from those used for mutual funds. Mutual fund data has been drawn from the most recent prospectus. For non-mutual fund investment options, the information has been provided by the trustee or plan sponsor. When no ratio is shown for these options it is due to the fact that none was available. Nevertheless, there may be fees and expenses associated with the investment option.
Morningstar Category Gross Expense Ratio: This figure represents average gross expense ratio paid by the funds in the Morningstar category. The information is based on the gross expense ratio as reported in each fund's most current prospectus and is provided by Morningstar.
Target date investments are generally designed for investors expecting to retire around the year indicated in each investment's name. The investments are managed to gradually become more conservative over time. The investment risks of each target date investment change over time as its asset allocation changes. They are subject to the volatility of the financial markets, including equity and fixed income investments in the U.S. and abroad and may be subject to risk associated with investing in high yield, small cap and foreign securities. Principal invested is not guaranteed at any time, including at or after their target dates.
Vanguard Institutional Target Retirement Income Fund Institutional Shares
Objective: The investment seeks to provide current income and some capital appreciation.
Strategy: The fund invests in other Vanguard mutual funds according to an asset allocation strategy designed for investors currently in retirement. Its indirect bond holdings are a diversified mix of short-,intermediate-, and long-term U.S. government, U.S. agency, and investment-grade U.S. corporate bonds; inflation-protected public obligations issued by the U.S. Treasury; mortgage-backed and asset backed securities; and government, agency, corporate, and securitized investment-grade foreign bonds issued in currencies other than the U.S. dollar.
Risk: The fund is subject to the volatility of the financial markets, including that of equity and fixed income investments. Fixed income investments carry issuer default and credit risk, inflation risk, and interest rate risk. (As interest rates rise, bond prices usually fall, and vice versa. This effect is usually more pronounced for longer-term securities.) Principal invested is not guaranteed at any time, including at or after retirement. Additional risk information for this product may be found in the prospectus or other product materials, if available.
Short-term redemption fee: None
Vanguard Institutional Target Retirement Date Funds Institutional Shares
Objective: The investment seeks to provide capital appreciation and current income consistent with its current asset allocation.
Strategy: The fund invests in other Vanguard mutual funds according to an asset allocation strategy designed for investors planning to retire and leave the workforce in or within a few years of the target year. The fund's asset allocation will become more conservative over time, meaning that the percentage of assets allocated to stocks will decrease while the percentage of assets allocated to bonds and other fixed income investments will increase.
Risk: The target date funds are designed for investors expecting to retire around the year indicated in each fund's name. The funds are managed to gradually become more conservative over time as they approach their target date. The investment risk of each target date fund changes over time as its asset allocation changes. They are subject to the volatility of the financial markets, including that of equity and fixed income investments in the U.S. and abroad, and may be subject to risks associated with investing in high-yield, small-cap, and foreign securities. Principal invested is not guaranteed at any time, including at or after their target dates. Additional risk information for this product may be found in the prospectus or other product materials, if available.
Short-term redemption fee: None