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Texas A&M University Faculty Senate April 14, 2008. Presented by: Kevin P. McGinnis Director, Risk Management and Employee Benefits The Texas A&M University System. ORP/TDA Perspective. 5,791 ORP participants and 3,459 TDA participants 78% of accounts are with current active vendors
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Texas A&M UniversityFaculty SenateApril 14, 2008 Presented by: Kevin P. McGinnis Director, Risk Management and Employee Benefits The Texas A&M University System
ORP/TDA Perspective • 5,791 ORP participants and 3,459 TDA participants • 78% of accounts are with current active vendors • 22% of accounts are with inactive • 14% with American and Van Kampen Funds • Remaining 8% with approximately 60 inactive vendors • ORP vendors in the Big 12 and Ivy League Schools • Big 12 schools average between 3 and 4 vendors • Most Ivy League schools offer 3 or fewer vendors
Impetus for Change • Internal Revenue Service is increasing regulations on 403(b) plans, requiring: • Information sharing • Increased plan documentation requirements • Employer monitoring requirements will be limited to IRS requirements and access limited to positions approved by legal and audit • A&M System is increasing retirement education across the employee spectrum
Impact on Existing Employee ORP or TDA Accounts • For active or inactive vendors which sign the information sharing agreement there will be no change in current employee accounts • Account vendors who do not sign the information sharing agreement will be non-compliant vendors and ineligible for new contributions after December 31, 2008; existing balances will not be affected • American Funds and Van Kampen have stated they will not comply with the information sharing requirement and are now non-compliant vendors
Impact on New Employee ORP or TDA Accounts • ORP and TDA vendors were selected through a recertification process from the certified vendors participating in the plan • Vendors on the active vendor list effective 9/1/08 are: Fidelity TIAA-CREF AIG Retirement ING RS Group Metlife Resources Lincoln Financial • Current vendors becoming inactive on 9/01/08: USAA Security Benefit Merrill Lynch Vendors have agreed to information sharing and will still be eligible to receive contributions on existing accounts.
Vendor Definitions • Active Vendor: Can accept contributions on existing accounts and open new accounts for existing and future employees • Inactive Vendor: Vendor can accept contributions to existing accounts but may not open new accounts for existing or future employees • Non-Compliant Vendor: Vendor elects not to comply with IRS rules. • May maintain the employee account balances as of December 31, 2008. • All contributions past that date must be moved to active vendors
