Benefits September 21, 2010

Purdue Pares Down to One 403(b) Provider

September 21, 2010 (PLANSPONSOR.com) – Purdue University has retained Fidelity Investments as the sole recordkeeping and administrative service provider to Purdue’s 403(b) plan for faculty and administrative/professional staff and voluntary tax-deferred annuity program available to all Purdue employees, effective January 1, 2011.
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The decision was made based on recommendations of a Retirement Plan Review Task Force formed in the fall of 2008 and including representatives from all employee groups. The plans currently use five providers.  

A University FAQ about the review said the Task Force found improvements could be made to the University’s retirement plans to benefit all participants by: 

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  • Leveraging the value of Purdue’s combined retirement assets to lower administrative and investment management costs paid by plan participants; 
  • Simplifying the investment process and encouraging participation by offering an improved investment menu with a wide variety of competitively priced options; 
  • Providing independent investment guidance; and 
  • Simplifying the recordkeeping process to comply with Internal Revenue/Department of Labor requirements. 

 

According to the document, Fidelity’s proposal was unanimously ranked first by the Task Force because it has a state-of-the-art technology platform; the cost for administration, plan sponsor services, education, and investment guidance has been unbundled from the investment management costs, resulting in significant savings for plan participants; and Fidelity has agreed to establish an office in West Lafayette to service participants at all campuses. Fidelity will charge participants a flat annual fee for plan services, regardless of the number of funds a participant selects and the participant’s account balance. 

Fidelity will provide participants with advice, and the fund menu is not restricted to Fidelity funds. The investment platform will use a four-tiered structure: target-date funds; index funds; diversified, actively managed funds including fixed annuity/stable value; and a self-directed brokerage window.  

A Fidelity press release said the plans cover about 15,000 Purdue participants, representing approximately $2.3 billion in assets.

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