Upcoming Enhancements to NU Retirement Program

As part of our goal to be an employer of choice, the University of Nebraska is committed to providing you with a competitive retirement program that helps you plan and invest for your future.

For the past eight months, a university-wide committee has been carefully reviewing our retirement program to identify improvements to help you achieve your retirement planning goals.

Our team has recommended – and 30-plus leading finance faculty from UNL, UNO and UNK have expressed support for – the following changes to our program, in line with best practices being adopted by universities across the country.

Please note that the university's contribution amounts to your retirement plan are NOT changing, and funds will continue to be fully vested right away. No action is necessary on your part at this time.

First, beginning November 1, 2022, we will move to a more streamlined, lower-cost investment menu for participants in our retirement plan. Our proposed menu will be composed of a single best-in-class mutual fund for each broad asset class, as well as "Target Date Funds."

With this simpler, more straightforward approach, your retirement investments will be allocated to target-date funds according to industry standards based on the year in which you turn 65. The target-date funds are invested for potential growth in your early years, then gradually transition to more conservative investments as you get older. The target-date funds on the new investment platform will be Vanguard Target Retirement Funds.

If you desire a different investment allocation there will be an opportunity in September and October to redirect the investment allocation of your funds. Our new core investment lineup will consist of:

  • Vanguard Total U.S. Stock Market Index fund
  • Vanguard Total International Stock Market Index fund
  • Vanguard Total U.S. Bond Market Index fund
  • Vanguard Federal Money Market fund
  • TIAA Traditional Annuity (TIAA only)

With this simpler, more straightforward menu, less experienced investors won't have to navigate a complex menu of options, and the change will also lower your fees.

More experienced investors who desire additional investment options beyond our proposed menu 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. This feature provides significantly more options than the 200 currently available to our plan participants.

Second, following a comprehensive review and competitive bidding process, we have decided to transition to a simple and transparent fixed-dollar recordkeeping fee. Recordkeeping fees are charged by TIAA and Fidelity for managing and assisting your participation in your retirement plan. The move to a fixed fee will provide significant savings in recordkeeping fees for the majority of our plan participants, and will ensure continued excellent service for our faculty and staff.

If you are enrolled in Fidelity, your recordkeeping fee will be $29 per year. If you are a TIAA participant, your recordkeeping fee will be $38 per year. If you have investment balances with both TIAA and Fidelity, you will be charged $67 per year for recordkeeping expenses ($29 Fidelity plus $38 TIAA).

Lastly, the TIAA Traditional annuity investment option will be transitioning to a new contract beginning November 1. The new TIAA Traditional annuity investment has improved liquidity and recently has produced better crediting rates. A comparison of the old and new TIAA Traditional annuity can be found here.

In total, we project the changes above will yield about $11 million in savings each year for university employees and retirees. This money goes directly back to you, our plan participants, not to the university.

Again, you do not need to take any action at this time. We plan to implement these improvements to our retirement program later this year. This fall, we'll send additional communication on how to customize your investments if you so choose. If you choose the streamlined targeted date retirement funds, we will transition your retirement funds to the new menu automatically. Thus, most plan participants will not need to take any action as part of these changes.

In the meantime, we invite you to participate in one of two Zoom forums to learn more and ask questions of our finance and benefits experts and faculty who have been engaged in this process. Details on the sessions are as follows:

Both sessions will be recorded and posted at Nebraska.edu/RetirementEnhancements for your convenience. Additionally, more detailed information and an FAQ are available.

Please feel free to email benefits@nebraska.edu with questions, or leave your feedback at Nebraska.edu/RetirementEnhancements.

Bruce A. Currin
Associate Vice President for Human Resources
University of Nebraska System

Brian Schlichting
Assistant Vice President for Business and Finance/Director of Benefits
University of Nebraska System