Introducing the New York State Voluntary
Defined Contribution Program
The new retirement plan option for New York State employees
Welcome
David M. Morrell
Director of University Benefits
The State University of New York (SUNY)
Stephen Sylvester
Relationship Manager, Institutional Relationships
TIAA-CREF
Alex Javier
Client Services Consultant, Program Sponsor Services
TIAA-CREF
For Institutional Investor Use Only. Not for Use With or Distribution to the Public.
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Today’s discussion
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What is the Voluntary Defined Contribution Program?
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Features
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Agency Benefits
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Role of TIAA-CREF
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Role of each Agency
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VDC Websites
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Next steps
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What’s on your mind Q & A
For Institutional Investor Use Only. Not for Use With or Distribution to the Public.
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About the Program
For Institutional Investor Use Only. Not for Use With or Distribution to the Public.
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New York State Voluntary Defined Contribution Program
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Signed into law on March 16, 2012
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This mandate became effective July 1, 2013
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All New York State agencies are required to offer the VDC program to
eligible employees
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The Plan Sponsor is The State University of New York (SUNY)
– Established in 1964, The SUNY ORP is one of the largest defined
contribution public retirement plans in the country.
– Over 50,000 participants
– More than $15 billion in assets under management.1
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Employees will be participating in SUNY Optional Retirement Plan
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Plan recordkeeper is TAA-CREF
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As of December 2014
For Institutional Investor Use Only. Not for Use With or Distribution to the Public.
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Who’s eligible?
• State employees who earn $75,000+
• Unrepresented by a union
• Hired on or after July 1, 2013
New York public agencies are required by law to communicate
this program to all employees who meet the above requirements
so they can make an informed decision.
For Institutional Investor Use Only. Not for Use With or Distribution to the Public.
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An alternative retirement plan choice
A new retirement plan option
• An alternative to the current Defined Benefit (DB) plan
• Must be offered to each eligible employee
• Employee must choose between the DB plan and the VDC
• Decision must be made within 30 days of hire date
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Employees have the option of selecting one or a combination of approved investment
providers
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TIAA-CREF
VOYA
VALIC
MetLife
Fidelity Investments
For Institutional Investor Use Only. Not for Use With or Distribution to the Public.
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What is the Voluntary Defined Contribution Program?
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Benefits may be derived from
• Employer contributions
• Employee contributions
• Any investment earnings
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Tax deferred
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Participant-directed investments
For Institutional Investor Use Only. Not for Use With or Distribution to the Public.
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What is the Voluntary Defined Contribution Program? (continued)
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Vesting
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Quicker
Employer contributions vest after 366 days
Vesting is immediate if employee has vested employer-funded retirement contracts
through approved vendors from previous employment
Participant not entitled to nonvested employer balances
Once vested, the agency adds 4% simple interest. Refer to Education Law Article
8-B section 392 for guidance on crediting interest rate
Determination of vesting status depends on history, validation
For Institutional Investor Use Only. Not for Use With or Distribution to the Public.
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What is the Voluntary Defined Contribution Program? (continued)
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It’s portable upon vesting
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Take it from job to job
Can accrue earnings even after worker leaves Program
Vested account belongs to the employee, not the state
For Institutional Investor Use Only. Not for Use With or Distribution to the Public.
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What is the Voluntary Defined Contribution Program? (continued)
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Control
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It lets your employees take an active role in their retirement
− Select investment options
− Allocate among approved investment providers
− Design payment stream
− Access to professional guidance and advice
− Design a retirement plan that can meet personal objectives
For Institutional Investor Use Only. Not for Use With or Distribution to the Public.
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What is the Voluntary Defined Contribution Program? (continued)
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Contributions
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The state contributes 8%
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Employee contribution rate is based on gross salary (wages):
Wages of $100,000.01
and greater
6%
Wages between
$75,000.01 and 100,000.00
5.75%
Wages of $75,000
4.5%
0
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These are subject to change by legislation passed by New York State
For Institutional Investor Use Only. Not for Use With or Distribution to the Public.
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What is the Voluntary Defined Contribution Program? (continued)
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Plan distribution options 1
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Loans
Survivor benefit options benefits
Single and joint lifetime retirement income
Systematic and/or lump-sum withdrawals
Minimum distribution payments
Interest payments
Rollovers
Employees are not required to make a distribution decision upon separation of
service, they may leave funds on deposit to continue to accrue earnings
1For
more information on the plan rules and vendor options, visit vdc.ny.gov.
For Institutional Investor Use Only. Not for Use With or Distribution to the Public.
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Program Benefits to Agencies
What makes the VDC Program a good alternative choice?
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It’s the Law
It’s flexible
May help attract, retain employees with alternative choice
Help better manage plan cost
Employees take an active role in managing their
retirement plan
For Institutional Investor Use Only. Not for Use With or Distribution to the Public.
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Program costs
The VDC program costs significantly less from the agency’s perspective
than DB plans. For example, if an agency employee with an annual salary
rate of pay of $100,000 has a VDC plan, your agency could potentially save
$140,000 over 10 years.
Defined Benefit Plan
VDC Program
Agency Contribution
Rate
22%*
8%
Cost After 1 Year
$22,000
$8,000
Cost After 10 Years
$220,000
$80,000
AGENCY 10-YEAR
SAVINGS
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$140,000
*Average agency contribution rate based on information obtained in the 2013-14 New York State Executive Budget
For Institutional Investor Use Only. Not for Use With or Distribution to the Public.
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Role of TIAA-CREF
Facts about TIAA-CREF
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With SUNY for 50 years
Headquartered in New York City
A Fortune 100 financial services company
$851 billion in combined assets under management*
Serving 3.7 million participants
15,000 institutions
For its stability, claims-paying ability and overall financial strength, TIAA is one of
only three insurance groups in the United States to currently hold the highest
possible rating from three of the four leading insurance company rating1
Dedicated to serving the academic, medical, cultural, governmental and research
fields
* As of December 31, 2014
1For
its stability, claims-paying ability and overall financial strength, TIAA is one of only three insurance groups in the United States to
currently hold the highest possible rating from three of the four leading insurance company rating agencies: A.M. Best (A++ as of 9/14),
Fitch (AAA as of 10/14) and Standard & Poor's (AA+ as of 10/14). It currently holds the second highest possible rating from
Moody’s Investors Service (Aa1 as of 10/14). Per S&P criteria, the downgrade of U.S. long-term government debt limits the highest
rating of U.S. insurers to AA+ (the second-highest rating available). There is no guarantee that current ratings will be maintained.
Ratings represent a company’s ability to meet policyholders’ obligations and do not apply to variable annuities, mutual funds or any other
product or service not fully backed by TIAA’s claims-paying ability.
For Institutional Investor Use Only. Not for Use With or Distribution to the Public.
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Role of TIAA-CREF
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Recordkeeper and service provider
Central point of contact
Operate the recordkeeping system
Day-to-day operations contact
Coordinate data transition and transmissions (including to all investment
providers)
Manage the employee enrollment
Provide information and guidance to employees to help them enroll and
understand the program
For Institutional Investor Use Only. Not for Use With or Distribution to the Public.
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Role of each New York State Public Agency
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Certify your Agency to offer the Program
Step 1:
Request access to the VDC Program administrator website called PlanFocus®
to manage the Program for your employees including enrolling and reporting
contributions. Complete the Administrator web center access form to request
authorization and sign-on credentials.
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Forms are located in the brochure containing this presentation
Complete and send to TIAA-CREF
Step 2:
Log in to PlanFocus after receiving your credentials from TIAA-CREF to review
and update (if needed) your agency’s profile information and authorized users.
Step 3:
Add the VDC Program as one of the available retirement plan options on your
HR Benefits website.
For Institutional Investor Use Only. Not for Use With or Distribution to the Public.
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Provide the Enrollment Guide to qualifying employee
Share the plan details and the Enrollment Guide with eligible employees. The
employee can elect the VDC Program online as instructed in the Enrollment Guide.
Enrollment Guide is available in soft copy or hard copy
For Institutional Investor Use Only. Not for Use With or Distribution to the Public.
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Manage the Program as part of your overall benefits program?
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Determine eligibility
Enroll new employees
Approve or decline participation in the program
Manage contributions
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Once the payroll or human resources manager receive notice of a VDC selection,
they will input the employee's VDC Program contributions in PlanFocus using the
easy self-service tool call Online Contribution List.
Determine vesting
Update terminations
Answer payroll-related questions
Manage and process escrow monies (unless centrally managed by OPA or
OSC)
For Institutional Investor Use Only. Not for Use With or Distribution to the Public.
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Call the telephone center for help if needed
A dedicated New York State Voluntary Defined
Contribution Program Telephone Center for Program
Administrators of NY Public Agencies
If you have any questions, please call 888 984-0010.
Hours of operation: 8 a.m.–6 p.m. (ET) Monday–Friday
For Institutional Investor Use Only. Not for Use With or Distribution to the Public.
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The VDC Custom Website
VDC.NY.GOV
For Institutional Investor Use Only. Not for Use With or Distribution to the Public.
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Program benefits
For Institutional Investor Use Only. Not for Use With or Distribution to the Public.
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Eligibility
For Institutional Investor Use Only. Not for Use With or Distribution to the Public.
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Agency information
For Institutional Investor Use Only. Not for Use With or Distribution to the Public.
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Educating your employees
For Institutional Investor Use Only. Not for Use With or Distribution to the Public.
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Contact
For Institutional Investor Use Only. Not for Use With or Distribution to the Public.
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Employee Website
The flexible retirement savings plan
For Institutional Investor Use Only. Not for Use With or Distribution to the Public.
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Program benefits
For Institutional Investor Use Only. Not for Use With or Distribution to the Public.
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DB vs. DC Plan comparison
For Institutional Investor Use Only. Not for Use With or Distribution to the Public.
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Eligibility
For Institutional Investor Use Only. Not for Use With or Distribution to the Public.
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Investment options
For Institutional Investor Use Only. Not for Use With or Distribution to the Public.
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How to enroll
For Institutional Investor Use Only. Not for Use With or Distribution to the Public.
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Enrollment guide
For Institutional Investor Use Only. Not for Use With or Distribution to the Public.
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Enrollment system
For Institutional Investor Use Only. Not for Use With or Distribution to the Public.
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Your next steps
The get-started checklist
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Complete the program administrator website access form
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Provide TIAA-CREF with your payroll schedule profile
3.
Establish Federal Wire (Fedwire)/Automated Clearing House (ACH)
instructions with your financial institutions to remit funds to investment
providers
4.
Prepare to communicate to eligible new employees
For Institutional Investor Use Only. Not for Use With or Distribution to the Public.
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What’s on your mind Q&A
For Institutional Investor Use Only. Not for Use With or Distribution to the Public.
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Thank you for viewing this webinar
You should consider the investment objectives, risks, charges and expenses
carefully before investing. Go to www.tiaa-cref.org/nystate for product and fund
prospectuses that contain this and other information. Please read the
prospectuses carefully before investing.
TIAA-CREF Individual & Institutional Services, LLC, Teachers Personal Investors Services,
Inc., and Nuveen Securities, LLC, Members FINRA and SIPC, distribute securities products.
Annuity contracts and certificates are issued by Teachers Insurance and Annuity Association of
America (TIAA) and College Retirement Equities Fund (CREF), New York, NY.
© 2015 Teachers Insurance and Annuity Association of America - College Retirement Equities
Fund (TIAA-CREF), 730 Third Avenue, New York, NY, 10017.
.
C22579
For Institutional Investor Use Only. Not for Use With or Distribution to the Public.
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