The University of Nebraska System is planning changes to its retirement program with the intent to simplify and streamline the investment menu; lower costs for participants; and provide investment flexibility for those who want it.
Announced in an all-university message on Feb. 21, the improvements follow a months-long review process by a system-wide team of finance and benefit experts, including leading finance faculty from the University of Nebraska–Lincoln, University of Nebraska at Omaha and University of Nebraska at Kearney. The changes are in line with best practices being adopted by universities nationwide.
The University of Nebraska’s contribution amounts to participants’ retirement plans are not changing.
The updates include:
A streamlined, lower-cost investment menu in which participants’ retirement investments will be allocated to target-date funds based on the year they turn 65. With the simpler approach, less experienced investors won’t have to navigate a complex menu of options. More experienced investors who desire additional options will be able to open a self-directed brokerage account to access more than 8,000 mutual funds available on TIAA’s or Fidelity’s platform — significantly more than the 200 options currently available to plan participants.
A transition to a fixed-dollar recordkeeping fee, which will provide significant savings to most plan participants.
A transition to a new TIAA Traditional annuity investment option that has improved liquidity.
These changes make the university’s retirement program more competitive, and they are expected to yield about $11 million in savings annually — savings that will go directly back to plan participants.
The changes are expected to go into effect in the fall. Employees and retirees do not need to take any immediate action. The university will provide updates in the fall on how participants can customize their investments. Employees who prefer the streamlined target-date funds will have their retirement funds transitioned to the new menu automatically — most plan participants will not need to take any action at any time as part of the changes.
Members of the university community are invited to two upcoming Zoom forums to learn more and ask questions. Those sessions are 2 p.m. Feb. 23 and 9 a.m. March 3. Both will be recorded and posted online.
More information and a detailed FAQ are also available at that website. Plan participants are also invited to contact benefits@nebraska.edu with questions, or to leave questions and comments online.
