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Swarthmore CollegeChanges to the 403(b) Retirement Plan

Past performance may not be indicative of future results. Different types of investments involve varying degrees of risk, and there can be no assurance that the future performance of any specific investment, investment strategy, or product (including the investments and/or investment strategies recommended or undertaken by Fiduciary Investment Advisors, LLC), or any non‐investment related content, made reference to directly or indirectly in this presentation will be profitable, equal any corresponding indicated historical performance level(s), be suitable for your portfolio or individual situation, or prove successful.

Due to various factors, including changing market conditions and/or applicable laws, the content may no longer be reflective of current opinions or positions. Moreover, you should not assume that any discussion or information contained in this presentation serves as the receipt of, or as a substitute for, personalized investment advice from Fiduciary Investment Advisors, LLC. To the extent that a reader has any questions regarding the applicability of any specific issue discussed above to his/her individual situation, he/she is encouraged to consult with the professional advisor of his/her choosing. A copy of the Fiduciary Investment Advisors, LLC’s current written disclosure statement discussing our advisory services and fees is available for review upon request.

This presentation is provided for informational purposes only.  It does not and is not intended to constitute legal advice.  You should consult your professional, legal, and/or tax advisers with specific questions about your individual situation.

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Background to Changes in the Retirement Plan

Steps Taken by Swarthmore College and the Fiduciary Committee

The Swarthmore College New Investment Menu

Changes to Consider & Things You Can Do Now

Important Dates to Remember

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Topics for Review

Swarthmore College

Why Are Changes Being Made?

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In recent years, Federal regulation over retirement plans has evolved and imposed a higher level of responsibility on 403(b) retirement plans, requiring them to operate more like 401(k) plans.  

Sponsors of 403(b) plans are subject to fiduciary responsibilities as guided by sections of The Employee Retirement Income Security Act of 1974 (“ERISA”).

The primary changes that Swarthmore College must adhere to include taking on fiduciary responsibility for: 

Selecting and monitoring plan investments; 

Assessing and monitoring the reasonableness of retirement plan fees;

Distributing annual fee disclosure notices to participants;

Providing an annual plan audit by a CPA.

Swarthmore College

Steps Taken to Comply with Regulations

The Board of Managers of Swarthmore College established the Fiduciary Committee which was charged with fulfilling the College’s responsibilities for the Retirement Plan.

The Committee retained Fiduciary Investment Advisors, LLC (FIA), a third party independent retirement plan consultant, to help the Committee assess the status of the current retirement plan and assist with changes. 

The Committee conducted a rigorous review of the 403(b) retirement plan and developed a strengthened and streamlined lineup of investment options.  

Investment options in the plan will continue to be monitored by the Fiduciary Committee with the assistance of FIA.

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Overview of Plan Changes

Vanguard, TIAA-CREF & Calvert serve as recordkeepers.

- TIAA-CREF,: 22 total investment options 10 annuities, 11 mutual fund options, and 1 suite of target-date funds

- Vanguard: > 60 mutual fund options and 1 suite of target date funds

- Calvert: 17 mutual fund options

Investment : proprietary at each institution (ie., TIAA-CREF, Vanguard, Calvert offerings respectively).

Participants have the ability to invest in: - TIAA Traditional, with its guaranteed rate of

return and income in retirement.

- CREF Stock, a competitive & popular option that provides broad equity market exposures.

Investments and other fees on each menu are competitive when compared to peers and industry benchmarks.

Vanguard and TIAA-CREF will serve as joint recordkeepers of the plan.

TIAA-CREF platform: 8 investment options:5 annuities2 index mutual funds 1 suite of target date funds

Vanguard platform: 18 investment options12 active mutual funds5 index mutual funds1 suite of target date funds

Investments: Diversified investment options from a broad selection of mutual fund managers.

Participants will continue to have the ability to invest in TIAA Traditional & CREF Stock, two popular options among participants. Participants will continue to have the ability to invest in several other annuity options from the former investment lineup as well.

Investments and other fees will continue to be competitive, and may be lower over time.

Current New

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Organization – The investment firm must be financially and structurally sound and have the financial,operational and personnel resources to carry out its strategy. There should be no legal or regulatoryproceedings surrounding the firm. The firm must have an appropriate compensation structure anddemonstrate a passion for investing.

Philosophy – The investment manager must have a clearly defined and disciplined investment philosophythat is based on sound investment theory, which is followed consistently and with conviction.

Investment Process – The methods and procedures an investment manager uses to apply his philosophyconstitutes the investment process. It is important that the manager’s techniques for selecting and sellingsecurities be sound, consistent and research intensive.

Style Consistency – The investment manager is expected to adhere to his particular investment style,despite prevailing market sentiment.

Personnel – The investment firm’s professionals need to be skilled, experienced, properly credentialed andknowledgeable.

Quality of Research – The investment firm’s research team must have the capacity and resources toevaluate and track the full universe of investment opportunities defined by its investment philosophy. Thestaff must possess extensive knowledge of the companies and particular securities being researched.

Performance – The investment manager must successfully demonstrate an ability to identify investmentopportunities (their “edge”). The manager should demonstrate competitive long term performance ascompared to a relevant benchmark and peer group.

Risk Controls ‐ Strong consideration is given to risk‐adjusted performance. The investment manager mustimplement appropriate risk controls, commensurate with their philosophy and process.

Operations – A system of operational policies, procedures, and risk controls must be in place. The firmshould have contingency plans to control organizational risks, such as a physical disaster recovery plan.

Investment Evaluation and On‐Going Review

Swarthmore College

The investment lineup can be organized across a two tier framework that provides options among a range of investment styles. Participants will be able to invest in any or all of the following:

Participant Type

Tier Type

Investment Tiers: Which Describes You?

# of InvestmentOptions

Tier 1

Target Retirement Funds

Funds based on participant age, 

expected retirement, and a glide path that changes allocation 

relative to retirement age

Participants who want a higher 

level of  professional guidance

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Annuity Options

Fixed and variableannuity options that  provide diversified

market exposuresand annuity features

Participants who want the benefits 

that annuity options provide

Tier 2

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Active Mutual Funds

Actively‐managedinvestment options that span a diverse 

array of asset class categories

Participants who want to assume greater control of their investments

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IndexMutual Funds

A streamlined selection of low‐cost 

passively managed index funds in 5 asset classes

Participants who want broad market coverage options at 

a low cost

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Swarthmore College

Vanguard/TIAA‐CREF: New Menus

International             OtherMoney Mkt / SV      Fixed Income            Balanced

Vanguard Total Bond 

Index

Dodge & Cox Income

Vanguard Inflation 

Protected Secs

Templeton Global Bond

Vanguard Prime Money 

Market

Vanguard InternationalStock Index

Vanguard International

Growth

Artisan Int’l Value

Schroder Emerging Market Eq

Columbia  Acorn International

Suite of  Vanguard Retirement 

Funds

Large Value Large Blend

CREF Stock

Large Growth

Sm/Mid   Value

Sm/Mid Blend

Sm/Mid Growth

TIAA Traditional

CREF Money Mkt

Green: Annuity Investments

Blue: Mutual Fund Investments

CREF Social Choice

TIAA

‐CRE

FVA

NGUA

RD

Domestic Equity

Large Value

Vanguard Windsor II

Large Blend

Vanguard 500 Index 

NeubergerBerman Socially 

Responsible

Large Grwth

Vanguard Primecap

Sm/Mid Value

Diamond Hill Small‐Mid Cap

Sm/Mid Blend

Vanguard ExtendedMarket Index

Sm/Mid Growth

T. Rowe Price New Horizons

TIAA Real Estate

TIAA‐CREF Bond Index

TIAA‐CREF International

Equity IndexSuite of 

TIAA‐CREFLifecycleFunds

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Swarthmore College

Investing in Annuities & Mutual Funds

Annuities Mutual FundsTypes Fixed & Variable Index & Active

Objective Fixed: Guarantees principal and a specified interest rate and may offer dividends.

Variable:  Are designed to provide market‐like returns in their respective asset categories and can therefore fluctuate in value.

Index: Seeks to replicate the returns of a specific index.

Active: Seeks to outperform the returns of a specific index. 

Features The unique feature that annuities offer is the ability to convert balances into annual streamsof income in retirement.

Allows investors to have access to professionally managed and diversified portfolios. A mutual fund is constructed based on certain investment objectives.

Source: TIAA‐CREF

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TIAA Traditional

1 Up‐to‐date crediting rates can be found at www.tiaa‐cref.org/public/tcfpi/InvestResearch

Source: TIAA‐CREF

Current Interest Rates(as of 9/12/13)

RA/GRA:  3.75%SRA/GSRA:  3.00%  

MinimumCrediting Rate During Accumulation Phase

3%

Participant Initiated Withdrawals

RA/GRA:  10 installments over 9 years and a day

SRA/GSRA: Fully liquid

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Vanguard Target Retirement Funds 

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Underlying Funds Utilized

Vanguard Total Stock Market Index

Vanguard Total International Stock Market Index

Vanguard Total Bond Market II Index

Vanguard Total International Bond Index

Vanguard Short Term Inflation Protected Securities

Target Date Suite

Vanguard Target Retirement IncomeVanguard Target Retirement 2010Vanguard Target Retirement 2015Vanguard Target Retirement 2020Vanguard Target Retirement 2025Vanguard Target Retirement 2030Vanguard Target Retirement 2035Vanguard Target Retirement 2040Vanguard Target Retirement 2045Vanguard Target Retirement 2050Vanguard Target Retirement 2055Vanguard Target Retirement 2060

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Source: Vanguard

TIAA‐CREF Lifecycle Funds 

Target Date Suite

TIAA-CREF Lifecycle Rtrmnt IncomeTIAA-CREF Lifecycle 2010TIAA-CREF Lifecycle 2015TIAA-CREF Lifecycle 2020TIAA-CREF Lifecycle 2025TIAA-CREF Lifecycle 2030TIAA-CREF Lifecycle 2035TIAA-CREF Lifecycle 2040TIAA-CREF Lifecycle 2045TIAA-CREF Lifecycle 2050TIAA-CREF Lifecycle 2055

Swarthmore College

Underlying Funds Utilized

Large Cap Growth Mid Cap Growth Global Natural Resources

Large Cap Value Mid Cap Value Bond

Enhanced Large‐Cap Growth Index Small Cap Equity Bond Plus

Enhanced Large‐Cap Value Index International Equity High Yield

Growth & Income Enhanced International Equity Money Market

Mid Cap Growth Emerging Markets Equity Index International Opportunities

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Source: TIAA‐CREF

Considerations for the New Funds1

Future Contributions New Investments

Current

Investment BalancesNew Investments

You can select a new allocation for your contributions.  If you do not, any contributions to investments being closed will be directed into the Target Date Funds.

You can transfer balances to the new investment options1.  If you do not:

‐ Balances in mutual funds that are closed will transfer into the Target Date Funds.

‐ Balances in Annuities that are closed will remain there.

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1 Please review the Transition Guide for detail on the investments, transition timing, and recordkeeper requirements.  Some investments may have unique characteristics that can influence the transfer of assets.  Please review your holdings and consult an adviser at TIAA‐CREF and/or Vanguard for more detail.

• Review your Quarterly Statement;

• Review the Transition Guide which was sent to you;

• Refer to the College Website for more information about the changes; 

• Visit the Vanguard and TIAA‐CREF websites to learn more about your investment choices;

• Evaluate your current investment portfolio & make changes if desired.  You can make changes to your investments during this process or at anytime thereafter.

Swarthmore College

What Should You Do Now?

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Swarthmore College

Important Dates to Remember in OctoberOn‐Campus Group Sessions

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Sessions will be led by Vanguard and TIAA‐CREF and will highlight the resources and tools available to you.

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Consider making an appointment with a Vanguard or TIAA‐CREF adviser to discuss your investment options in more detail. Additional sessions will be made available in the future as well.   Phone and web support are also available.

Important Dates to Remember in OctoberIndividual Participant Sessions (Oct.)

QUESTIONS ?

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Disclaimer

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Please remember that different types of investments involve varying degrees of risk, and there can be no assurance that the future performance of any specific investment, investment strategy, or product (including the investments and/or investment strategies recommended or undertaken by Fiduciary Investment Advisors), or any non‐investment related content, made reference to directly or indirectly above, will be profitable, equal any corresponding indicated historical performance level(s), be suitable for your portfolio or prove successful. Due to various factors, including changing market conditions and/or applicable laws, the content may no longer be reflective of current opinions or positions. Fiduciary Investment Advisors is neither a law firm nor a certified public accounting firm and no portion of the content should be construed as legal or accounting advice. Please remember to contact Fiduciary Investment Advisors, in writing, if there are any changes in your personal/financial situation or investment objectives for the purpose of reviewing/evaluating/revising our previous recommendations and/or services. A copy of Fiduciary Investment Advisors' current written disclosure statement discussing our advisory services and fees is available for review upon request.

Swarthmore College