The university’s new retirement plan for future employees—approved by the board of curators in October—includes a defined contribution 401(a) plan. The university also has been considering for some time the administrative consolidation of its current 403(b) 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,” said University of Missouri System Vice President of Human Resources Betsy Rodriguez. “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.”
Fidelity will become the university’s single administrator in October 2012 when the new retirement plan takes effect for new employees. Fidelity has no requirement to use any proprietary funds of the administrator.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.