Summing Up the Changes Coming Your Way with the UNC System Retirement Plans

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July 1, 2014 will bring significant changes to retirement plans offered by the UNC System. New plan participants won’t be able to open accounts with VALIC or Lincoln Financial Group (LFG) as of that date. Available providers in the Optional Retirement Plan (ORP) are being reduced to the same two providers in the UNC System-sponsored 403(b) plan – TIAA-CREF and Fidelity.

On this date, there will be an introduction of new investment options within both plans. The investment options offered by each provider have a four “tiered” structure.

  • Tier 1 contains twelve (12) target date (or lifecycle) funds. The funds are the same for both providers.
  • Tier 2 provides pre-constructed risk-based portfolios.
  • Tier 3 is a set of 22 “core” mutual funds with considerable overlap between the two providers. Of the 22 core mutual funds offered by Fidelity and TIAA-CREF, 17 are common to both providers.
  • A brokerage trading platform makes up Tier 4. This provides you with a much wider selection of investment options. Brokerage access is an option for all employee contributions and earnings in the ORP and 403(b) plans, but not your employer contributions and earnings. Access to the brokerage trading platform for the ORP will be available on June 6. Access to the platform has been available in the 403(b) plan for a few years.

Due to the coming changes, we suggest reviewing your ORP and 403(b) accounts in the context of your overall financial circumstances and making decisions to keep your accounts working in an integrated fashion.

We are here to help. Please contact one of our advisors to schedule a complimentary meeting to review how these changes may affect you and to receive help navigating your path forward.

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