A Plan Sponsor Decides Simplification Is Best for Everyone

January 3, 2014 ( – Many 403(b) sponsors were faced with necessary changes following passage of new Internal Revenue Service regulations in 2007, and Niagara University was no different.

By Rebecca Moore | January 03, 2014
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The university recognized it needed a retirement plan committee responsible for monitoring investments, so University President Reverend James J. Maher appointed people to committee, including faculty, staff and administration. There are seven people on the 403(b) investment oversight committee; Edward W. Hutton, CFA, assistant professor of finance and director of the University’s Financial Markets Laboratory, was elected chair in 2012.

Niagara University, founded in 1856, is located along the top of picturesque Monteagle Ridge overlooking the Niagara River Gorge, just four miles north of Niagara Falls. Hutton was a financial industry investment professional for 20 years, and became a full-time faculty member at the university six years ago.

The 403(b) plan is the university’s only retirement program for faculty, staff and administration. There is a faculty union, so the design of the plan and any plan changes must be approved by the union.

Over the past 10 years, the university has used three different plan vendors and a number of investment providers. In all, participants had more than 150 choices for investments, Hutton tells PLANSPONSOR. There was no reasoning for why the choices were offered, he says, “It was partly because we wanted a broad offering.”

But, the university found it was too much for participants. According to Hutton, there was no clear-cut, logic for selecting investments, and many participants did not know what funds they were in, why they were in them or how the funds were doing. Some were invested in 15 or 20 different funds trying to have diversification, but not knowing what they were doing.