The decision was made based on recommendations of a Retirement Plan Review Task Force formed in the fall of 2008 and including representatives from all employee groups. The plans currently use five providers.
A University FAQ about the review said the Task Force found improvements could be made to the University’s retirement plans to benefit all participants by:
- Leveraging the value of Purdue’s combined retirement assets to lower administrative and investment management costs paid by plan participants;
- Simplifying the investment process and encouraging participation by offering an improved investment menu with a wide variety of competitively priced options;
- Providing independent investment guidance; and
- Simplifying the recordkeeping process to comply with Internal Revenue/Department of Labor requirements.
According to the document, Fidelity’s proposal was unanimously ranked first by the Task Force because it has a state-of-the-art technology platform; the cost for administration, plan sponsor services, education, and investment guidance has been unbundled from the investment management costs, resulting in significant savings for plan participants; and Fidelity has agreed to establish an office in West Lafayette to service participants at all campuses. Fidelity will charge participants a flat annual fee for plan services, regardless of the number of funds a participant selects and the participant’s account balance.
Fidelity will provide participants with advice, and the fund menu is not restricted to Fidelity funds. The investment platform will use a four-tiered structure: target-date funds; index funds; diversified, actively managed funds including fixed annuity/stable value; and a self-directed brokerage window.A Fidelity press release said the plans cover about 15,000 Purdue participants, representing approximately $2.3 billion in assets.