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Investment Committee
Investments
Fees and Expenses
Transitioning
Services
For a printable copy of the FAQ's, click here.
What is the role of the Retirement Plan Investment Committee?
The Retirement Plan Investment Committee works with an investment/fiduciary advisory firm to establish Smith’s internal governance procedures and to select and monitor investment choices. The key objectives of the committee are to:
- Ensure that decisions about the retirement plan are in the best interests of the plan participants (employees)
- Select mutual fund investment offerings
- Monitor the retirement vendors and the funds offered using measures and benchmarks in various areas affecting plan assets, including investment performance, fees, and expenses
How will the work of the committee affect my investment choices? Will they be more limited?
Currently at Smith, investment options are limited to funds offered by three firms, TIAA-CREF, Fidelity and American Century. In the future, the college’s Retirement Plan Investment Committee may select mutual funds from any investment firm that offers 403b-eligible funds. In addition, the committee approved a “brokerage window” option that enables employees to opt out of the core offerings selected by the committee to choose other 403b-qualified funds.
Why is Smith College selecting a single record keeper?
The Retirement Plan Investment Committee made the decision to retain one retirement vendor as a single record keeper for our Retirement Plan in response to increased regulatory and compliance obligations. Currently, the college works with three retirement vendors. Having a single record keeper streamlines administrative, transactional, and reporting efforts associated with the increased regulatory requirements.
What issues must the college address to comply with regulations?
First and foremost, we need to demonstrate that we operate the retirement plan in the best interests of employee participants. Best practices include documenting a process that supports careful selection and monitoring of investment options and plan-related expenses; selecting core investment choices for future contributions; and monitoring fund performance and fees over time.
How was the decision made to change to a new retirement vendor?
Assisted by Baystate Fiduciary Advisors, the investment committee initiated a Request for Proposal (RFP). Five firms were invited to present proposals to the investment committee. After reviewing account fees, customer service, technology and financial education offered, the Committee invited the top three retirement vendors to visit our campus for in-depth interviews.
Why was ING selected?
The Committee selected ING because representatives clearly demonstrated their company’s ability to meet the needs of the college and employees as the sole record keeper. ING offers state of the art technology solutions and comprehensive education programs for all employees. Lastly, another important consideration was ING’s considerable experience in record keeping retirement plans for many higher education institutions and consolidating multiple service provider accounts into a sole record keeper arrangement.
Where can I learn more about ING?
An overview of ING, including the company’s US history and frequently asked questions about the company can be found on its web site http://ing.us/about-ing.
What relationship, if any, does ING have with Baystate Fiduciary Advisors?
ING and Baystate Fiduciary Advisors are separate entities and are contracted and hired by Smith College independently. This separation is a key element to the college’s fiduciary responsibility and oversight of the Defined Contribution Retirement Plan.
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When will the new features/investments be available in the Retirement Plan?
- Access to your new Plan account with ING is available November 9, 2011.
- Contributions will be directed to your new account beginning in January.
How can I receive investment and performance information?
Beginning November 9, you can access this information in a variety of ways:
- Through the website at ingretirementplans.com.
- By calling ING’s toll-free at (800) 584-6001.
- Through your quarterly participant statements.
What are my investment choices?
You will have a menu of 32 investment options, including “target date” funds. The menu also includes a credited fixed interest account option offered under a group fixed annuity. This booklet includes a fund fact sheet for each option. The fund fact sheet includes information on investment objectives and strategy, risks, and top holdings.
You should consider the investment objectives, risks, charges and expenses of the mutual funds offered through a retirement plan carefully before investing. Fund prospectuses, containing this and other information, can be obtained by contacting the ING Customer Contact Center at (800) 584-6001. Fund fact sheets and an ING Retirement Choice II Information Booklet (Information Booklet) are also included in this mailing. Please read all information carefully before investing.
What criteria were used to evaluate the investment options?
Investment options were evaluated based on the following criteria:
- Performance (net of fees) in variable time periods.
- Risk adjusted performance (Alpha and Sharpe Ratio*).
- Fees.
- Portfolio characteristics.
- Consistency of investment style.
- Portfolio manager tenure.
* The Alpha is a measure of the difference between a portfolio's actual returns and its expected performance, given its level of risk. A positive alpha figure indicates the portfolio has performed better than its beta would predict (beta is a measure of a portfolio's sensitivity to market movements). A negative alpha indicates the portfolio has under-performed, given the expectations established by its beta. The Sharpe Ratio is calculated by using standard deviation and excess return to determine reward per unit of risk. The higher the Sharpe Ratio, the better the fund’s historical risk-adjusted performance. The Geometric Sharpe Ratio is calculated for the past three-year period by dividing a fund’s annualized excess returns by its annualized standard deviation.
Will I lose the benefit of compound interest if I am starting a new account with ING?
No. The same tax-deferred benefit of compound interest will continue to apply as is true for all of your current retirement plan contributions.
What is a brokerage account?
The Plan includes the ability to take advantage of a Brokerage Account Option through TD Ameritrade that provides access to over 13,000 open-end mutual funds, including more than 1,300 No Transaction Fee funds. (No Transaction Fee (NTF) mutual funds are no-load mutual funds for which TD Ameritrade does not charge a transaction fee. NTF funds have other fees and expenses that apply to a continued investment in the fund and are described in the prospectus. Funds held 90 days or less may be subject to a Short-Term Redemption Fee. This fee is in addition to any applicable transaction fees or fees addressed in the fund’s prospectus.)
This new Brokerage Account Option provides access to a broad choice of investment options, world class research, dedicated Investor Services Representatives and multiple ways to personally manage your account. This option is designed for the experienced investor who wants to independently and actively manage an even greater choice of investment options and is willing to pay additional fees and accept full responsibility for researching, selecting, monitoring and managing their investments. An annual $50 fee is assessed by ING for participants who select the Brokerage Account. Additional fees and charges will apply per transaction.
More detailed information, including an explanation of trading expenses, is available by contacting Mary Ellen Gordon, CRPC, CEBS, CFS, Smith College’s ING Representative (Registered Representative of ING Financial Partners, member SIPC). Please call her directly at (860) 580-1624 or contact ING at (877) 645-5206 to arrange an appointment.
Brokerage services provided by TD Ameritrade, Division of TD Ameritrade, Inc., member FINRA/SIPC/NFA. TD Ameritrade is a trademark jointly owned by TD Ameritrade IP Company, Inc. and The Toronto-Dominion Bank.
© 2010 TD Ameritrade IP Company, Inc. All rights reserved. Used with permission. TD Ameritrade is an independent entity and not a corporate affiliate of ING Financial Advisers, LLC (Member SIPC).
What are target date funds?
The 12 target date funds, called T. Rowe Price Retirement Funds are a family of funds that consist of an underlying portfolio of investment options that track to a certain date. They can simplify the investment decision-making process. You can select the T. Rowe Price Retirement Fund with the target date closest to the year you expect to retire and begin to receive your benefits. These portfolios are rebalanced periodically and, over time, migrate to a more conservative investment mix so you won’t have to rebalance your account.
The principal value of the T. Rowe Price Retirement Funds is not guaranteed at any time, including at or after the target date, which is the approximate date when investors turn age 65. The funds invest in a broad range of underlying mutual funds that include stocks, bonds, and short-term investments and are subject to risks of different areas of the market. The funds maintain a substantial allocation to equities both prior to and after the target date, which can result in greater volatility.
What credited fixed interest account option is available?
The credited fixed interest account option available under the new fund menu is the ING Fixed Plus Account III. This is offered under a group fixed annuity contract. The current credited interest rate is 3.10%, expressed as an annual effective yield, and is guaranteed not to drop below 2.80% through 12/31/2011. This booklet includes a one page fund fact sheet containing more information on this option. It is intended to be a long-term investment for participants seeking stability of principal. Guarantees are based on the claims-paying ability of ING Life Insurance and Annuity Company. Unlike the ING Fixed Plus Account III, the investment return or principal value of the mutual funds under the Plan are not guaranteed.
The ING Fixed Plus Account III is a stability of principal option (annuity). It allows you to keep a portion of your assets in an investment option that offers the stability of account balances that grow steadily without the daily fluctuations other investments may experience. The contributions you make to this stability of principal option (annuity) are credited with a stated rate of interest that is announced periodically and may vary from period to period.
How do I sign up for the new Roth 403(b) contribution option?
If you are interested in making Roth 403(b) after-tax contributions to the Plan, you must complete a new salary reduction agreement in January. Roth 403(b) contributions are available for payroll deductions beginning in January.
The Roth 403(b) after-tax option is only available for salary deducted contributions to the Plan. Employer Contributions are not eligible for the Roth 403(b).
The Smith College Defined Contribution Retirement Plan is a 403(b) plan. A 403(b) plan consists of tax-deferred retirement products in which employees of educational institutions and certain non-profit organizations invest. IRS rules permit plan participants to invest in 403(b)(7) custodial accounts (which invest in shares of mutual funds) and in annuity contracts.
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What are the ongoing annual administrative expenses under the Plan?
For assets in the new investment options, there is an asset-based fee deducted quarterly from your account by ING at an annual rate of 0.20% of balances held in all investment options except the ING Fixed Plus Account III. This asset-based fee is retained by ING as compensation for the services provided. Existing assets in your Plan account with TIAA-CREF, Fidelity or American Century are not subject to this ING administrative expense.
In addition, ING may receive payments from the funds or the funds’ affiliates with respect to the Plan’s holdings. ING does not retain these fund-related payments. Instead, these payments are set aside to defray payment for Plan expenses at the instruction of Smith College. Any amount not used to pay for Plan expenses will be allocated to participant accounts annually. For additional details regarding this compensation, please refer to the Fund Revenue Sharing and Expense Disclosure section in the enclosed Additional Disclosure Supplement of the ING Retirement Choice II Information Booklet.
Please refer to the individual fund prospectuses as well as the enclosed fund fact sheets for the expenses associated with each option. These fund fact sheets are updated on a quarterly basis. Your actual expenses will depend on the specific funds you select.
Fund prospectuses can also be obtained by contacting the ING Customer Contact Center at (800) 584-6001. Expenses charged by the specific funds offered under the Plan will be reflected in the performance information for that fund option.
The performance of each option, including that shown on the fund performance report, is net of all fund expenses. These performance data do not reflect ING’s annual administrative expense of 0.20%. If such fees had been reflected, the performance data shown for each option would have been lower.
Note: A $50.00 fee is assessed annually by ING if you elect to utilize the new Brokerage Account Option. Additional fees and charges will apply per transaction.
Are there any transfer restrictions or fees for transfers between the investment options?
The ING Fixed Plus Account III does not impose an annual restriction on participant transfers. However, you cannot transfer directly from the ING Fixed Plus Account III to the FidelityÒ Money Market Trust Retirement Money Market Portfolio* or the Brokerage Account Option (competing funds). You can transfer from the ING Fixed Plus Account III to any other fund in the menu of investment options (non-competing funds). Once you transfer assets from the ING Fixed Plus Account III to a non-competing fund, you may not transfer to the FidelityÒ Money Market Trust Retirement Money Market Portfolio* or the Brokerage Account Option (competing funds) for 90 days. If you make a transfer from a non-competing fund to the FidelityÒ Money Market Trust Retirement Money Market Portfolio* or the Brokerage Account Option (competing funds), you may not make a transfer out of ING Fixed Plus Account III for 90 days. All transfers are also subject to ING’s Excessive Trading Policy. Refer to your Information Booklet for additional information regarding these provisions.
Please note: One new investment option, the VanguardÒ Total International Stock Index Fund -Signal Shares (Fund Number 2474), imposes a 2% redemption fee. Any transfers into the fund that are subsequently transferred out within 60 days are subject to the redemption fee. There are no fees or charges for other fund transfers.
*An investment in a money market fund is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Although the fund seeks to preserve the value of your investment at $1.00 per share, there is no assurance it will be able to do so. While the fund’s objective includes the preservation of capital, it is possible to lose money by investing in the fund.
Will I be charged any fees with the establishment of my new Plan account with ING?
No. You will not be charged any fees by ING as a result of the transition activity.
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When are the informational meetings for these changes?
Meetings will be held throughout November and December. Mary Ellen Gordon, your Smith College ING representative, will be present at these meetings to provide you with additional information about the new investment options and services. A meeting schedule with dates and times is included in this booklet.
In addition to these initial informational meetings, Mary Ellen Gordon will provide retirement and financial education seminars, as well as education materials to keep you informed about the Plan and other topics relevant to your investment and retirement objectives.
What if I cannot attend one of the scheduled meetings?
Mary Ellen Gordon is available to meet with you at your convenience. Please contact her directly at (860) 580-1624 or call ING at (877) 645-5206 to arrange an appointment.
Am I required to do anything?
Yes. Although a new Plan account with a designated investment option will be automatically established for you, you should:
- Decide if a different investment allocation is more suitable for your retirement goals and risk tolerance.
- Designate a beneficiary for your new Plan account with ING.
- Review your voluntary Plan contribution amount to ensure you are on track with your retirement objectives.
We encourage you to attend one of the upcoming meetings scheduled throughout November and December to learn about these steps and how they impact you.
Will the money in my current investments exchange (“transfer”) to ING?
No, the retirement assets held in your existing Plan account with TIAA-CREF, Fidelity or American Century are not transferring automatically to the new investments.
Am I able to move my current investments to ING?
Yes, in January of 2012, you will be able to exchange (“transfer”) funds to ING. For instructions and information about the exchange (“transfer”) process, you can speak with one of our dedicated specialists at (866) 865-2660. Assistance is available 8:00 a.m. – 9:00 p.m., Monday – Thursday, and 8:00 a.m. – 5:00 p.m. on Friday.
Is there a charge to transfer my assets to ING?
No, there is no charge to transfer your assets to ING. However, your prior retirement vendor(s) may have fees and/or withdrawal restrictions on existing contracts. We encourage you to talk with an ING representative to discuss your specific account to determine the best course of action for your situation.
How will my ongoing contributions be deposited with ING?
You can select any combination of the new investment options for your contributions.
If you take no action to select specific investments, your future contributions will automatically transfer to a designated investment option (one of the T. Rowe Price Retirement Funds) according to your date of birth. These funds and corresponding birth date ranges are described in the introductory letter of this booklet.
What happens if I do not want my contributions deposited to the designated fund?
On or after November 9, you can change your investment allocation to any combination of the new investment options prior to the first contribution in January. You can make changes by calling (800) 584-6001, or you can access your account at ingretirementplans.com.
Can I continue to have my ongoing contributions directed to my current provider?
Beginning with the first pay date in January, all contributions will be directed to ING.
You may have access to your current provider through the brokerage window. Please see the question regarding the brokerage account.
Will retirees who have current investments be permitted to access ING and the new fund line-up?
Yes, retirees will be permitted to take advantage of the new fund offerings record kept by ING.
When can I make changes to my new account?
Your new account will be available to access on November 9.
Will I receive confirmation that a new Plan account has been established?
Yes. If you change the designated investment, you will receive a confirmation of your transaction activity within 5 to 7 business days of submitting your request. This activity will also be reflected in your account online.
If you do not make investment changes to your account, you will automatically receive an enrollment statement from ING confirming the designated investment option for your future Plan contributions. You can expect to receive this confirmation statement in mid-December. Remember that you can access your account and make investment changes at any time before or after the first contribution is deposited in January.
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Do I need a password to register for the website or access my personal account on the telephone?
For the automated voice response phone line, you need a personal identification number (PIN). Your PIN is the month and year of your birth (MMYY) and is effective beginning November 9. We encourage you to change your PIN to one of your own preference at your earliest convenience. PINs can be changed by using our automated telephone line. Customer Service Associates cannot change your PIN.
For the website, you can sign up for online access by completing the following four steps:
- Go to ingretirementplans.com and under the Not Registered Yet? Section click on “Sign Me Up”.
- Enter your Profile Information - Social Security Number, PIN (month & year of birth, MMYY), and e-mail address.
- Create your Login Information - User ID and Password.
- Choose a Security question and answer it.
How do I designate a beneficiary for my account with ING?
Beginning November 9, beneficiary designations can be submitted online at ingretirementplans.com or by phone with an ING Customer Service Associate at (800) 584-6001.
Note: If you are married and designate someone other than your spouse as your beneficiary, you are required to provide a signed spousal consent form. ING will provide a form to assist you with this requirement.
When will I receive my first quarterly statement reflecting the Plan changes?
The first quarterly statement reflecting the Plan changes will be for the first quarter of 2012. You can expect to receive this statement in early April 2012. You can also view detailed quarterly statements by accessing your account online at ingretirementplans.com.
Is there an alternative method available for receiving quarterly statements?
Yes. If you prefer to receive your quarterly statements electronically rather than by mail, you can choose the e-Delivery option that suits your needs by accessing your account online at ingretirementplans.com.
Will I still receive statements from the other retirement vendors?
Yes, your current retirement vendors will continue to provide you with the customer service and statements you are accustomed to receiving. In addition, you will receive a regular quarterly statement for your account with ING reflecting all account accumulations beginning with the first contribution in January, 2012.
Will representatives from current vendors still be available to me for consultation on my existing assets?
Yes, Human Resources will still facilitate on campus visits from TIAA-CREF and Fidelity representatives. Existing phone and web-based services will remain available to you from the current retirement vendors.
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