Cameron University
Fringe Benefits Committee Meeting Minutes
Date: 10 – 19 – 11
Meeting Facilitator: Lynda Robinson
Guest Speaker: V. P. Glen Pinkston
Time: 11 AM
Meeting Note Taker: Lynda Robinson
In Attendance: , John Geiger, Paul Crandon, Edna McMillan, Lynda Robinson
Absent: Phil Adrian
Item I: Changes to voluntary retirement contributions
Discussion:
Some background – Cameron does not make employer contributions to
retirement. Cameron does make contributions to its retirement plan; a defined benefit
plan with Oklahoma Teachers’ Retirement System. Federal legislation in 2008 required
more oversight of retirement plans than previously so Cameron adopted a 403(b) plan
only allowing contributions to American Fidelity and OTRS. Prior to establishing a
403(b) plan with American Fidelity, there doesn’t seem to have been a formal 403(b)
plan with any of the vendors for which Cameron accepted payroll deductions. Because
of the legislation, Cameron decided to use American Fidelity as our plan administrator
and record keeper. Since more people had voluntary retirement contributions through
American Fidelity than through other companies, we also chose them as the only
investment vehicle for payroll deductions for the 403(b) plan.
In 2009, University of Oklahoma created a committee to begin looking at ways to
make retirement benefits more valuable. To this end, they also hired R. V. Kuhns, an
independent investment advisory firm. Since we are under the same Board of Regents,
Cameron University (Glen Pinkston) and Rogers State University were allowed to “sit in”
on their committee meetings as non-voting members. This provided Cameron with the
benefits of an in-depth, comprehensive review of retirement plan options at no cost to
Cameron. Kuhns assisted OU in selecting companies with sound investment strategies
and historically good returns. OU’s Retirement Plan Management Committee, assisted
by R V Kuhns reviews the performance of each retirement plan investment option
quarterly. Fidelity Investment was selected to provide record keeping and master
administrator services. This was done via an RFP and American Fidelity did not submit a
proposal. Cameron has the opportunity to take advantage of what University of
Oklahoma has done so that more investment opportunities can be offered to Cameron
employees. Cameron will pay a $78.00 per year per employee administrative fee for each
participant making voluntary retirement contributions. The administrative fee is charged
by Fidelity Investment for record keeping and plan administration services. Through
Fidelity Investment, Cameron employees will have a choice of several different
investment tiers. Each employee will receive a quarterly statement which lists all their
investments. However, depending on where an employee’s other retirement assets are,
they may not be able to receive a combined retirement investment statement. There is no
charge for investing in the mutual funds offered in Tiers I, II and III. Some funds that are
only available through Tier IV, the brokerage window, will have a transaction fee and
some funds can be purchased with no transaction fee. It should be noted that all mutual
funds, not just those in the four tiers of the new investment platform, charge expenses
(this is known as the “expense ratio”).
Also, an employee who chooses to make retirement contributions outside of
Cameron’s 403(b) plan could be investing “after-tax” funds. So it appears that there are
many benefits to the proposed voluntary retirement plan.
This new plan would not prevent employees from keeping previous voluntary
contributions with the companies they designated to receive those contributions. If the
proposed retirement plan changes are made, Cameron’s existing 403(b) plan with
American Fidelity would be “frozen.” That means that an employee’s voluntary
contribution could remain, but the employee would not be able to keep making
contributions through payroll deductions. The employee may be able to enter into an
agreement with their current program to make contributions outside of Cameron’s 403(b)
plan. The employee could also make arrangements to move existing retirement accounts
into the new 403(b) plan investment platform. However, each employee should discuss
with a representative of the company where retirement funds are deposited if there are
any charges for transferring funds out of their existing retirement accounts.
Committee members asked why this is happening now. Glen explained that we
couldn’t go forward until University of Oklahoma’s plan had been approved through the
Board of Regents. And now that it has been approved, Fidelity Investment is busy
working with those employees. The tentative plan is for Fidelity Investment to work with
Cameron people in December if the proposed change is submitted to the Board of
Regents, and if the Board of Regents approve the change at the November 30 Board
meeting.
Conclusion: Committee agreed that proposed changes are beneficial to Cameron
employees.
Item II: Education Plan to inform faculty/staff of proposed changes
Discussion:
Meetings are planned with everyone who now makes a voluntary retirement
contribution through payroll deduction (October 25) and for all faculty and staff
(November 8 & 9). Glen met with faculty senate on October 14 to provide an overview
since rumors had been going around campus. He will also meet with faculty senate on
November 11 (the next meeting) to get (hopefully) a consensus of faculty support to take
to the board meeting.
Committee members noted that most people would want to take a “fact sheet’ of
some kind home to discuss with “significant others.” Members suggested a power point
with a handout with room for taking notes and/or handouts listing benefits to the new
plan and the major points to the new plan.
Conclusion: If faculty/staff seem supportive, the proposal will be presented to the Board
of Regents at the November 30 meeting. It is expected that the board would be
supportive as they had previously approved similar changes to OU’s various retirement
plans and have approved a contract for recordkeeping and plan administrator services
from Fidelity Investment. If the proposal passes at the board meeting, Fidelity
Investments will be on campus during the month of December meeting with interested
individuals.
Adjournment: Meeting adjourned at 12:30 PM.
Respectfully submitted,
Lynda Robinson