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American University Retirement Plan
American University is committed to providing you with retirement savings opportunities to help you plan and achieve the retirement you want.
AU offers diversified investment options through two investment service providers: Fidelity and TIAA. Both Fidelity and TIAA include funds from multiple fund companies and you may choose to invest with either or both service provider.
We have divided the Plan into four tiers to satisfy varying levels of desired involvement in allocating retirement dollars. Tier 1 includes all-in-one investments that may be more appropriate for individuals who want a diversified investment approach in a single fund. Tiers 2 & 3 may be more appropriate for those who want a more active role in determining how they want their retirement dollars allocated. For those desiring the most investment flexibility and choice, Tier 4 offers a self-directed brokerage option, which gives you access to an extended range of mutual funds. These tiers and the investment options are described in more detail below.
To view performance information for a mutual fund investment option, click on the fund's corresponding "Ticker" symbol in the tables below. This will bring you to the fund quote on Morningstar.com, a 3rd party provider of mutual fund analysis.
To view information for an annuity investment option, click on the corresponding "Fact Sheet" or "Prospectus" link in the tables below. This will bring you to the annuity's fact sheet or prospectus which will provide key information and performance data.
Target Retirement Date Funds are single fund solutions that are professionally managed and designed to provide varying degrees of long-term appreciation and capital preservation based on an investor's age or target retirement date through a mix of asset classes. The mix changes over time to become less focused on growth and more focused on income.
Target Date Funds are an asset mix of stocks, bonds and other investments that automatically becomes more conservative as the fund approaches its target retirement date and beyond. Principal invested is not guaranteed.
Target date funds offer a way to make a single choice for your retirement investments based on your expected year of retirement. American University's retirement plan offers the Vanguard Target Date Funds available through Fidelity and TIAA.
| Offered through Fidelity and TIAA | Ticker |
|---|---|
| Vanguard Target Retirement Income Fund Investor Shares | VTINX |
| Vanguard Target Retirement 2015 Fund Investor Shares | VTXVX |
| Vanguard Target Retirement 2020 Fund Investor Shares | VTWNX |
| Vanguard Target Retirement 2025 Fund Investor Shares | VTTVX |
| Vanguard Target Retirement 2030 Fund Investor Shares | VTHRX |
| Vanguard Target Retirement 2035 Fund Investor Shares | VTTHX |
| Vanguard Target Retirement 2040 Fund Investor Shares | VFORX |
| Vanguard Target Retirement 2045 Fund Investor Shares | VTIVX |
| Vanguard Target Retirement 2050 Fund Investor Shares | VFIFX |
| Vanguard Target Retirement 2055 Fund Investor Shares | VFFVX |
| Vanguard Target Retirement 2060 Fund Investor Shares | VTTSX |
| Vanguard Target Retirement 2065 Fund Investor Shares | VLXVX |
Commonly known as "index funds," passively managed funds do not seek to beat their benchmark, but rather to match the benchmark's performance. Since the investment decisions made by the fund manager are made to simply mirror each fund's particular index, passively managed funds are designed to provide a broad selection of investments at relatively low cost.
The following chart shows the Tier 2 funds offered through Fidelity and TIAA.
| Fund Type | Offered through Fidelity | Ticker | Offered through TIAA | Ticker |
|---|---|---|---|---|
| Bond Funds | Fidelity® U.S. Bond Index Fund | FXNAX | Vanguard Total Bond Market Index Institutional Shares | VBTIX |
| Domestic Stock Funds | Fidelity® 500 Index Fund | FXAIX | Vanguard Institutional Index Institutional Shares | VINIX |
| Fidelity® Extended Market Index Fund | FSMAX | Vanguard Extended Market Index Institutional Shares | VIEIX | |
| Vanguard FTSE Social Index Fund Admiral Shares | VFTAX | |||
| International Stock Funds | Fidelity® Global ex U.S. Index Fund | FSGGX | Vanguard Total International Stock Index Institutional Shares | VTSNX |
Actively managed funds seek to beat, or exceed their benchmark. Unlike the index funds, the managers of these funds do not attempt to mirror the stocks and performance in an index. Fund managers often have broad flexibility to actively seek out investments that they believe will exceed the performance of a particular index. As a result, these funds are called "actively managed," and because managing the fund often involves a great deal of research and the transactions within the fund are often more frequent, expenses tend to be higher than those of passively managed funds.
The following chart shows the Tier 3 funds offered through Fidelity and TIAA.
| Fund Type | Offered through Fidelity | Ticker | Offered through TIAA | Ticker |
|---|---|---|---|---|
| Short Term and Stable Value Options | New York Life Guaranteed Interest Account | Fact Sheet | CREF Money Market Account R2# - Variable Annuity* | QCMMPX |
| Vanguard Federal Money Market Fund Investor Shares# | Prospectus | |||
| TIAA Traditional Annuity - Guaranteed Annuity* | Fact Sheet | |||
| Bond Funds | Metropolitan West Total Return Bond Fund Plan Class | MWTSX | Metropolitan West Total Return Bond Fund Plan Class | MWTSX |
| Domestic Stock Funds | John Hancock Funds Disciplined Value Fund Class R6 | JDVWX | John Hancock Funds Disciplined Value Fund Class R6 | JDVWX |
| Vanguard Small Cap Value Index Fund Admiral Shares | VSAIX | Vanguard Small Cap Value Index Fund Admiral Shares | VSAIX | |
| MassMutual Small Cap Growth Equity Fund Class I | MSGZX | MassMutual Small Cap Growth Equity Fund Class I | MSGZX | |
| MFS Mid Cap Growth Fund Class R4 | OTCJX | MFS Mid Cap Growth Fund Class R4 | OTCJX | |
| MFS® Mid Cap Value Fund Class R6 | MVCKX | MFS® Mid Cap Value Fund Class R6 | MVCKX | |
| Fidelity® Contrafund® - Class K | FCNKX | CREF Social Choice Account R2 - Variable Annuity* | QCSCPX | |
| CREF Stock Account R2 - Variable Annuity* | QCSTPX | |||
| Harbor Capital Appreciation Fund Institutional Class | HACAX | |||
| International Stock Funds | American Funds EuroPacific Growth Fund® Class R-6 | RERGX | American Funds EuroPacific Growth Fund® Class R-6 | RERGX |
| MFS® International Intrinsic Value Fund Class R6 | MINJX | MFS® International Intrinsic Value Fund Class R6 | MINJX | |
| Real Estate | Principal Real Estate Securities Fund Institutional Class | PIREX | TIAA Real Estate Account - Variable Annuity* | QREARX |
#You could lose money by investing in a money market fund. Although the fund seeks to preserve the value of your investment at $1.00 per share, it cannot guarantee it will do so. An investment in the fund is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. The fund?s sponsor has no legal obligation to provide financial support to money market funds and you should not expect that the sponsor will provide financial support to the fund at any time.
* All funds are mutual funds unless noted as an annuity. Any guarantees for annuities issued by TIAA-CREF are subject to TIAA-CREF's claims-paying ability. Withdrawal restrictions may apply to annuities. Annuity account options are available through annuity contracts issued by TIAA or CREF. These contracts are designed for retirement or other long-term goals, and offer a variety of income options, including lifetime income. Payments from the variable annuity accounts are not guaranteed and will rise or fall based on investment performance. TIAA Traditional is a guaranteed insurance contract and not an investment for federal securities law purposes.
Self-directed brokerage combines the convenience of the university's retirement plan account with the additional flexibility of a brokerage account, giving you expanded investment choices and the opportunity to more actively manage your retirement contributions. A self-directed brokerage account may entail greater risk and is not appropriate for everyone. Additional fees apply to this type of account.
Are you interested in investing in options beyond what your plan offers in the standard lineup?
A self-directed brokerage account allows you to choose investments outside of the standard lineup in your workplace retirement savings plan.
For more information or to open a self-directed brokerage account, first enroll in your Fidelity workplace retirement savings plan. Then visit BrokerageLink® Central (NetBenefits Homepage > Quick Links > BrokerageLink) to review additional information, including the commission schedule for applicable fees and risks.
BrokerageLink includes investments beyond those in your plan's lineup. You should compare investments and share classes that are in your plan's lineup with those available through BrokerageLink, and determine the available investments and share class that is appropriate for your situation. The plan fiduciary neither evaluates nor monitors the investments available through BrokerageLink. It is your responsibility to ensure that the investments you select are suitable for your situation, including your goals, time horizon, and risk tolerance.
TIAA Brokerage Services lets you allocate a portion of your assets to a wide range of mutual funds beyond those in the Plan's lineup. Investors who may benefit from a brokerage account generally have financial knowledge and the time to research, trade and manage their accounts independently, or work with their investment advisor to discuss their account.
Make transactions online, by phone or with a consultant
A wide range of investment choices
Choose from over 7,200 funds from over 250 well-known mutual fund families. Please keep in mind that returns for mutual funds are not guaranteed, and you assume all the risks associated with investing in them. You can view the list of fund families by going to the dedicated website at www.tiaa.org/brokerage.
Minimum dollar amounts may apply to both your initial transfer amount and to subsequent transactions. For a complete list of fees and costs associated with a mutual fund investment, and a full explanation of our fees, go to our website at www.tiaa.org/brokerage.
Subject to the terms of American University's 403(b) Retirement Plan, the TIAA Brokerage Services Account is suited for investors who want to independently research and select their own investments among a broad array of mutual funds. If you lack the time or expertise to actively manage your portfolio, a brokerage account may not be appropriate for you. Please speak with a TIAA financial consultant if you have any questions about opening a brokerage account and other types of brokerage accounts that may be right for you.
The American University 403(b) Retirement Plan allows you to make contributions immediately to your retirement savings. Don't wait to begin saving for your future. You can set aside pre-tax dollars immediately, regardless of age and service. If you meet the eligibility requirements, your contributions will be matched once you are eligible.
Learn about the plan basics, including eligibility, and investment options available through Fidelity and TIAA for American University's retirement plan.
Eligibility to participate: You are eligible to participate if you are an AU faculty or staff, full or part time, who is not a student or non-resident alien.
Eligibility for the AU match: You are eligible to receive the 2-to-1 matching contribution if you have worked at AU for 12 consecutive months, worked at least 1,000 hours during that 12-month period, and are normally scheduled to work at least 20 hours per week. If you have a year of service at another 501(c)(3) non-profit or university, you may be eligible for a waiver of the one-year waiting period.
If you contributed to the Plan prior to your eligibility for the match, you will automatically receive the 2-to-1 match up to the first five percent (5%) of your payroll contribution when you meet the eligibility requirements. If you have not participated in the Plan prior to your eligibility for the match, you will be automatically enrolled in the retirement plan upon eligibility for a 1% contribution matched by a 2% contribution by the university unless you opt out at the time of your eligibility. To opt out of the automatic enrollment, update your contribution amount and enter 0% as your payroll contribution.
If you have completed one year of service (you have worked at least 1,000 hours during that 12-month period and are normally scheduled to work at least 20 hours per week), you will be automatically enrolled in the American University 403(b) Retirement Plan, unless you have previously enrolled on your own or opt out of the one-year anniversary automatic enrollment. If you are automatically enrolled in the Plan, American University will deduct 1% of your pay, and the university will match that 1% with an additional 2%. These contributions will be defaulted to an account with Fidelity Investments and invested in a Vanguard Institutional Target Retirement Fund Institutional Shares fund with the target retirement date closest to the year you might retire, based on your current age and assuming a retirement age of 65, at the direction of the American University 403(b) Retirement Plan. You can change your investment option at any time.
To opt out of the automatic enrollment, update your contribution amount and enter 0% as your payroll contribution.
You can contribute between 1% and 100% of your eligible pay, up to the annual IRS dollar limits. Contribution limits on compensation for determining contributions as well as contribution limits are determined under federal tax laws. Click here to view the current year's contribution limit.
If you are automatically enrolled in the Plan, American University will deduct 1% of your pay, and the university will match that 1% with an additional 2%. These contributions will be defaulted to an account with Fidelity Investments and will be invested in the Vanguard Institutional Target Retirement Fund Institutional Shares fund with the target retirement date closest to the year you might retire, based on your current age and assuming a retirement age of 65, at the direction of the American University 403(b) Retirement Plan. You can change your investment option at any time.
The investment risk of each Vanguard Institutional Target Retirement Fund Institutional Shares fund changes over time as the fund's asset allocations change. The funds 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, commodity-linked, and foreign securities. Principal invested is not guaranteed at any time, including at or after the funds' target dates.
Retirement plan contributions you make through an outside business may impact your maximum contribution each calendar year. for more information regarding outside retirement contributions and yearly maximum contributions.
A type of retirement savings contribution that allows people over 50 to make additional contributions to their 403(b) and/or individual retirement accounts. The catch-up contribution provision was created by the Economic Growth and Tax Relief Reconciliation Act of 2001 (EGTRRA), so that older individuals would be able to set aside enough savings for retirement.
If you have 15+ years of service with American University and/or reached age 50 or will reach age 50 during the calendar year January 1 - December 31 and are making the maximum plan or IRS pre-tax contribution, you may be eligible to make additional "catch-up" contributions. For additional information and to see if you qualify, contact the human resources benefits team.
A Roth contribution is available to employees who participate in the American University 403(b) Retirement Plan and allows participants to make after-tax contributions and take any associated earnings completely tax free at retirement - as long as the distribution is a qualified one. A qualified distribution, in this case, is one that is taken at least five tax years after your first Roth contribution and after you have attained age 59½, or become disabled or die.
How do Roth Contributions Work?
You elect an amount of your salary that you wish to contribute after taxes to your Roth account, just as you would for your pretax contributions. The contribution is based on your eligible compensation, not on your net pay-for example, if your total annual eligible compensation is $40,000 per year and you elect a 6% deferral amount, then $2,400 per year would go into your Roth account.
Unlike your pretax contribution, with a Roth contribution, you pay the taxes now on the contributions you make-but later your earnings are all tax free, if you meet certain criteria.
Example: Sally earns $40,000 and has elected to put 6% toward her Roth contributions and 6% toward her pretax contributions on a monthly basis.
|
ROTH |
PRETAX |
|
|
Sally's monthly contribution into each account |
$200 |
$200 |
|
Sally's reduction in take-home pay |
$200 |
$156 |
This hypothetical example is based solely on an assumed federal income tax rate of 22%. No other payroll deductions are taken into account. Your own results will be based on your individual tax situation. Your combined Roth and pretax contributions cannot exceed the IRS limits for the year.
Would Roth Contributions Benefit Me?
The potential benefits of Roth contributions really depend on your personal situation, but are mainly focused on your existing tax rate and your anticipated tax rate at the time of retirement. If you are contributing to a Roth, you are giving up a tax break today for a tax break in the future.
Therefore, a Roth contribution might benefit you if your tax rate in retirement were higher than it had been during the years you contributed.
If your tax rate were lower in retirement, then a pretax contribution might be more beneficial to you than the Roth option. Talk with a tax professional for more information on how to determine if Roth contributions are right for you.
Are Pretax Contributions Still Beneficial?
Yes. For many participants pretax 403(b) contributions will still be the most beneficial type of retirement savings. We do not know what the future holds regarding tax rates. Therefore, it is not possible to predict with certainty which type of 403(b) savings will be most beneficial to a participant.
Remember, because Roth contributions are made after tax, you may take home less money in your paycheck than you would if you contributed on a pretax basis.
Fidelity does not provide legal or tax advice. The information herein is general in nature and should not be considered legal or tax advice. Consult an attorney or tax professional regarding your specific situation.
Serve one year at American University, or another university or non-profit organization, and AU will give you $2 for every $1 on the first 5% you contribute. You are eligible to receive the 2-to-1 matching contribution if you have worked at AU for 12 consecutive months, worked at least 1,000 hours during that 12-month period, and are normally scheduled to work at least 20 hours per week. If you have a year of service at another 501(c)(3) nonprofit or university, you may be eligible for a waiver of the one-year waiting period. You can find the Retirement Eligibility Verification form on the myBenefits - Retirement site. You will need to send the verification form to your previous employer and return the completed form to the Office of Human Resources.
When you are "vested" in your savings, it effectively means the money is yours to keep. You are always 100% vested in all contributions you and the university make to your plan, as well as any earnings on them.
Your beneficiary or beneficiaries will inherit your account in the event of your death. You should consider identifying a beneficiary when you enroll in The Plan, and updating the information if you experience a life-changing event such as a marriage, divorce, birth of a child, or death in the family.
If you have an account with Fidelity, login to Fidelity NetBenefits®, go to 'Profile' in the navigation bar at the top of your NetBenefits® page and click on the 'Summary tab' and then 'Beneficiaries'.
TIAA: Call 800-842-2252 or log in to your account by selecting TIAA in the drop down box at the top of the page under Your Account and follow the prompts to the TIAA website.
You are generally allowed to withdraw money from your plan when you leave your employer, retire or become permanently disabled. Also you may be eligible for a distribution if you have a financial hardship as defined by your plan. Withdrawals may be subject to income taxes and, if they occur prior to you becoming age 59½, a 10% early withdrawal tax penalty. For information on in-service distributions, loans, withdrawals, and hardship distributions, refer to the Faculty/Staff Benefits Manual.
Please contact your investment service provider directly for more information on taking a withdrawal from your Plan.
Fidelity Investments: Call 800-343-0860 or log in to your account by entering your username and password at the top of the website.
TIAA: Call 800-842-2252 or log in to your account by selecting TIAA in the drop down box at the top of the page under "Your Account" and follow the prompts to the TIAA website.
Although your plan account is intended for the future, you may borrow from your account for any reason. Generally, plan rules allow you to borrow up to 50% of your vested account balance.
The minimum loan amount is $1,000, and a loan must not exceed $50,000. Any outstanding loan balances from the previous 12 months may reduce the amount you have available to borrow. You then pay the money back into your account, plus interest, through ACH deductions from your bank account.
As of May 16, 2016, you may have only two loans outstanding at a time. The cost to initiate a loan at Fidelity is $75, and there is a quarterly maintenance fee of $6.25. The initiation and maintenance fees are deducted directly from your plan account. TIAA does not charge loan fees.
Please note, you may borrow from employee basic, employee voluntary and rollover contributions only. You cannot borrow from university contributions.
If you have retirement savings in another employer's plan or in an IRA, consolidating accounts may help make it easier to manage your savings but there are several options. Be sure to consider all your available options and the applicable fees and features of each before moving your retirement assets.
If you're not sure about the best option for you, talk to a Fidelity or TIAA representative today. They can explain each option in greater detail so you can make the best choice for your specific needs.
Fidelity Investments: Call 800-343-0860 or Log in to your account by entering your username and password at the top of this website.
TIAA: Call 800-842-2252 or log in to your account by selecting TIAA in the drop down box at the top of the page under "Your Account" and follow the prompts to the TIAA website.
Now is a great time to schedule an appointment for a confidential consultation to discuss your retirement planning goals.
For confidential consultations with TIAA, call 800-732-8353.
For confidential consultations with Fidelity, call 800-642-7131.
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| Fidelity | 1-800-343-0860 |
| TIAA | 1-800-842-2252 |
The providers above are independent entities and are not legally affiliated.
Schedule time with a financial professional to get help with your financial goals.
Before investing, consider the investment objectives, risks, charges and expenses of the fund or annuity and its investment options. Contact Fidelity for a prospectus or, if available, a summary prospectus containing this information. Read it carefully.
Investing involves risk, including risk of loss.
Fidelity Brokerage Services LLC, Member NYSE, SIPC, 900 Salem Street, Smithfield, RI 02917
