Pending ARP & 403(b) Plan Changes

Effective January 1, 2020, BGSU will offer four vendor choices for all future contributions for the Alternative Retirement Plan (ARP) and 403(b) program.

FAQs

Recent legislative changes allow the Ohio Department of Higher Education (ODHE) and public universities to “modernize” the ARP and 403(b) plans to provide employees with greater investment options and flexibility in fund selections and enabling the universities to negotiate lower fees.

Over the past two years, BGSU and the other Inter-University Council (IUC) schools have been working closely with ODHE, the Ohio Attorney General’s office (AG), and outside counsel, Ice Miller LLP, preparing for the pending changes.

Beginning January 1, 2020, BGSU will offer four vendor choices for all future contributions to the ARP and 403(b) plans:  AXA-Equitable, Fidelity, TIAA, and Voya.

All previous contributions can remain with your current vendor if you so choose.

The four selected vendors will offer three tiers of investment choices.  Tier 1 will provide a Target Date Fund (based upon your current age and your estimated retirement age).  Tier 2 will offer both passive and actively managed mutual fund choices across all major asset classes and will include many recognized major mutual fund providers.  Tier 3 will allow you to choose your preferred investment fund choices through a brokerage window although there may be higher fees associated with this option.

By reducing our approved vendor list to four, the University is able to leverage our volume and size to negotiate substantially lower fees and broader plan options for employees.  Additionally, modernizing our retirement plans will now permit your retirement funds to be directly invested into mutual funds without incurring the additional ongoing fees associated with fixed or variable rate annuity products.

We recognize that this change may initially create confusion and cause some concerns.  To assist and help guide faculty and staff through this process, we will hold information sessions and conduct individual counseling sessions with representatives from the four vendors.   Information will be available on the Human Resources website, including FAQs and other resources. We have shared initial information about the coming changes with our constituent groups – Classified Staff Council, Administrative Staff Council and Faculty Senate – but you can expect more details as we roll out this important development for our campuses in the coming months.

In addition to the assistance we have received from the AG’s office and Ice Miller LLP, the IUC schools issued a “Request for Proposals” to competitively select a consultant to assist, advise and to serve as an independent investment advisor.  The selected firm is Cammack Retirement Group, one of the largest retirement plan consultants serving institutions of higher education, healthcare, the public sector, and other not-for-profit clients.  Cammack Retirement Group helped us to select the approved vendors and we will continue to work closely with them to review the investment choices those vendors will offer.

We are confident this new structure will benefit our employees and we are committed to working with each of you to assist and support you through this transition.