All benefit eligible faculty and staff will participate in the College's Retirement Plan after completing one year of employment. This waiting period is waived, however, if the faculty or staff member currently owns an annuity contract under a 403(b) plan or a custodial account under a 403(b) (7) plan from his or her previous employer. Generally, a 403(b) plan is offered to employees of an academic institutions, hospitals, or other non-profit organizations.
Participation in the Swarthmore plan is mandatory, and contributions to the plan continue as long as the employee is actively employed by the College. Employees are 100 percent vested in their accounts on the date participation begins. Contributions to this basic portion of the Retirement Plan are calculated according to the following schedule:
|College Contribution||Employee Contribution|
|First $20,000 of salary||10%||0%|
|Salary in excess of $20,000||10%||5.5%|
The following information is meant to serve as a preliminary guide to upcoming changes in the College's retirement investment options. More detailed information will be forthcoming.
Why is the College changing the retirement fund options?
Swarthmore College manages its retirement plan in accordance with federal regulations. Over time, these regulations change, new interpretations are issued, and employers develop best practices. Years ago, the College established a fiduciary committee to manage the College's responsibilities for the retirement plan and to monitor the investment options offered. This committee includes representatives from human resources and the finance/investment/business offices. It is co-chaired by the vice president of human resources and the vice president for finance. The committee, in consultation with an independent retirement plan adviser, recently completed a comprehensive review of the plan and its investment fund options in light of changing standards and to further promote prudent participant investment decision making.
What principles guided the College in making decisions about the upcoming changes?
Swarthmore College seeks to have a sound process for selecting and monitoring investment options offered to staff, faculty, other participants, and beneficiaries of the retirement plan. The College aims to select financially strong, high-quality investment funds and to monitor and adjust those offerings on a regular basis. The College also wants to assist participants in selecting from a diverse investment fund lineup to help you plan for your retirement.
Fiduciary Investment Advisors, the College's retirement plan consultant, was asked to evaluate the College's current investment fund lineup and make recommendations to the fiduciary committee. The new lineup offers a diversified set of fund options, streamlines the number of options, and reduces redundancy, thus helping facilitate participant investment decision making. The criteria used to select the funds in this new lineup included competitive performance and fees, stable management teams, and sound investment philosophy and processes. The new investment lineup will offer 26 funds as compared with the 110 funds now offered.
What benefit do these changes bring about?
Swarthmore College aims to help you pursue your retirement savings goals. The upcoming changes will offer a full range of high-quality investment funds. The College will continue to partner with TIAA-CREF and the Vanguard Group. On the TIAA-CREF platform, there will be a selection of TIAA-CREF investment options, including an annuity option. On the Vanguard platform, there will be Vanguard and non-Vanguard mutual funds. The Calvert funds will not be offered, because Calvert no longer provides comprehensive retirement investment services to sponsors such as Swarthmore.
When will the changes take place?
New retirement funds will become available in October, in conjunction with the College's Open Enrollment period. At that time, during a period of a few weeks, you will be asked to move existing balances and direct new contributions to the new fund options. At the end of that period, some funds, including Calvert funds, will be closed, and no new contributions to them will be possible. Specific dates will be provided soon.
When will I receive more information about next steps?
In late August/early September, you will receive further details on the changes and timing of the new retirement fund options.
Will there be information sessions where I can learn more about these changes? Will there be services offered to help me choose appropriate allocations during the transition period?
Yes, several investment planning seminars will be held on campus and led by TIAA-CREF and Vanguard representatives.
In addition, TIAA-CREF and Vanguard will provide one-on-one sessions to help you select funds. During those sessions, you may bring recent investment statements and information regarding investments outside of the College retirement plan.
Retirees will be invited to attend these events. Partners/spouses are also welcome to attend.
What are some recommended steps I should take in preparation for this transition?
Carefully review the information you receive about the new retirement fund options. Also, please plan to attend one or more of the following sessions that will take place on campus this fall:
- Investment Planning Seminar
- Retirement Planning Seminar
- A one-on-one investment counseling session with a TIAA-CREF or Vanguard financial consultant.
Sessions will be scheduled at varying times to provide multiple opportunities for you to attend.
Why will the College no longer offer Calvert investments?
As mentioned above, Calvert is no longer providing comprehensive retirement investment services to sponsors such as Swarthmore. While they will no longer be available through our retirement plan, Calvert funds will continue to be offered in the open marketplace.
Will there be a socially responsible investment option on the TIAA-CREF and/or Vanguard platforms?
Yes, CREF Social Choice will remain an option on the TIAA-CREF platform. In addition, Vanguard will provide a new option, the Neuberger Berman Socially Responsible Fund.
Will I be able to move my current assets and direct new contributions to another platform than the one I am invested in today?
Yes, you will be able to transfer your current investment balances and/or direct new contributions to either the TIAA-CREF or Vanguard platforms. Some additional new funds will be available from Templeton, Columbia, and T. Rowe Price, among other fund families.
If you currently participate on the TIAA-CREF or Vanguard platforms, you may remain on those platforms, but your fund options will change.
Communications from Vanguard and TIAA-CREF will soon follow that will provide details on your investments, the new fund choices, and other issues you may wish to consider when the new retirement funds are made available. The Human Resources team will be available to help you through this process.
How do I put more money into my retirement plan?
You need to complete a Salary Reduction Agreement. Please note that you can make a change to your Salary Reduction Agreement once a quarter. When you complete the new Agreement, you must include the total of additional and/or supplemental contributions you wish to make as each agreement replaces the one on file.
If you have additional questions/concerns, contact John Cline at x8652.
Additional Basic Contributions
Employees are not limited to the above percentage levels. They may contribute additional sums on a voluntary basis up to a legally allowed maximum. However, the College will not make any further contributions on their behalf. Like basic contributions, additional contributions will be withheld from the employee's pay on a before-tax basis.
Supplemental Retirement Plan
A benefits eligible employee of Swarthmore College may also elect to have a portion of his or her salary, up to a legally allowed maximum, placed each year in a supplemental retirement account. Like contributions to the basic Retirement Plan, supplemental contributions are not subject to federal taxation until such time as it is received as income.