Purdue’s Retirement Plan Committee works for you
With the 2011 implementation of the retirement plan investment platform administered by Fidelity, the Retirement Plan Committee was formed. The committee is made up of the assistant treasurer, the vice president for human resources, representatives from the Purdue Research Foundation (PRF), the University’s chief investment officer, a regional campus vice chancellor, and representatives from the Faculty Senate, APSAC, CSSAC and the Purdue University Retirees Association.
The committee’s goals include looking for opportunities to reduce costs, leveraging the purchasing power of the invested funds, having a best-in-class investment fund manager, ensuring a technology-enabled process for plan participants and separating investment guidance from the plan administration.
The committee has worked diligently on your behalf. Some of the group’s main achievements save you money because of their focus on fees, which generally fall into three major categories:
- Administrative fees are sometimes called “recordkeeping fees” because they relate to the systems, processes, communication and reporting. The initial fee that each participant pays for Fidelity’s administration was $87 annually; this year, that administrative fee was reduced to $76 annually.
- Investment management fees are based on the size of your accumulation in a particular fund and support the expenses associated with overseeing that fund. Funds vary in how much they charge, and one key goal of the committee has been to watch expense ratios carefully. Some funds offer a lower management fee when a plan like Purdue’s reaches a higher dollar accumulation and becomes eligible for a lower cost share class. The committee has adjusted the platform of funds available to Purdue investors to take advantage of institutional share class rates to save Purdue faculty and staff money. For example, the move this spring to the Vanguard Target Date institutional share class was estimated to save approximately $500,000 per year.
- Individual service fees may apply for some specific transactions. While the recordkeeping fees cover most activities associated with your account, there are nominal expenses passed along to participants initiating more specialized transactions such as a loan or a qualified domestic relations order.
“Implementing the vision of the Retirement Task Force in 2011 was an important milestone for the University, but our work did not end there,” said Jim Almond, senior vice president and assistant treasurer. “The Retirement Plan Committee meets regularly to review operating opportunities, investment performance analysis, market trends and reports of fund manager activity, as well as participant educational efforts underway at Purdue. With the assistance of the PRF Office of Investments, we take the responsibility of reviewing and adjusting our fund lineup and other aspects of managing our program seriously.”
Almond also noted that Human Resources will make the committee’s meeting minutes available on the retirement website in the near future. If you have questions about the work of the Retirement Plan Committee or about the lineup of funds offered as part of the Purdue’s defined contribution programs, email RetirementPlanCommittee@purdue.edu.