Benefits Plans - Retirement Savings Plans: HOW is my account established?

The Benefits Office will send an enrollment notice to your chosen investment company to create your account once you have successfully finalized and submitted the online enrollment process through Self Service > Benefits on Wolverine Access. Notifications are sent to Fidelity Investments on a weekly basis. Notifications to TIAA-CREF are sent with your first contribution; this is the first business day of the month after your first deduction.

What should I do next?

  1. Designate Your Beneficiary
    The investment company you selected will send you a welcome packet with information on how to how to designate your beneficiary. See Beneficiary for more information on making beneficiary designations.

  2. Choose Your Investment Funds
    The investment fund will be an age-appropriate Lifecycle Index Fund if you select TIAA-CREF or a Freedom Index Fund if you select Fidelity. You may change this by contacting TIAA-CREF or Fidelity Investments directly at any time once your account has been created. For example, this can be done once you receive your welcome packet from the investment carrier. If you do not have a U.S. street mailing address or if you have a non-U.S. mailing address, the default investment designation for TIAA-CREF will be CREF Money Market. You may not select a TIAA-CREF mutual fund without a
    U.S. residential street mailing address.

IMPORTANT NOTE

You must designate your beneficiary and investment funds for each type of plan (Basic Retirement Plan, 457(b), SRA) in which you enroll and each time you enroll in a new plan.

Your beneficiary and investment fund designations for one type of retirement plan do not carry over to other plans. You will need to designate beneficiaries and fund choices separately for each type of plan.

Example #1

You enroll in the Basic Retirement Savings Plan and the SRA.

  • You will need to designate your beneficiary and choose your investment
    funds for each plan separately.

Example #2

You enroll in the Basic Retirement Savings Plan upon hire and enroll in the
SRA or 457(b) six months later.

  • Even though you previously designated your beneficiary and fund choices for
    the Basic Retirement Savings Plan, those choices do not apply to the SRA or
    457(b). You will need to make your designations for the SRA or 457(b).

What are the Lifecycle Index or Freedom Index Funds?

A TIAA-CREF Lifecycle Index Fund or Fidelity Freedom Index Fund is a mutual fund that is a diversified portfolio of other mutual funds offered by that company. This includes domestic and international stock funds, bond funds, and money market funds.

Each Lifecycle Index or Freedom Index Fund automatically selects the allocation of stock, bond, and money market funds that are appropriate for a target retirement date of approximately age 65.

The Lifecycle Index and Freedom Index Funds gradually adjusts over time to become more conservative by decreasing the underlying equity holdings and increasing the fixed income holdings as the fund’s target retirement date nears. The gradual shift into fixed income from equities provides the potential for growth while reduces volatility as the retirement date approaches.

TIAA-CREF Lifecycle Index and Fidelity Freedom Index Funds are actively managed, however, the underlying mutual funds within each portfolio are index mutual funds. An index fund is a passive investment strategy that aims to replicate the movements of a specific benchmark that are held constant, regardless of market conditions. Using underlying index funds are a lower cost option to meet your retirement savings goals.

Your date of birth will be included in the enrollment notice sent to your chosen investment company. This will determine the specific Lifecycle Index or Freedom Index Fund into which you will be enrolled.

Lifecycle Index and Freedom Index Funds provide a simple solution if you lack the time, confidence, or investment knowledge to create and manage a well-diversified portfolio. Each fund is professionally managed and provides you with a simple, single investment fund.

What are my other investment choices?

Both TIAA-CREF and Fidelity Investments offer a wide selection of stock, bond, money market, and real estate funds. A select number of Vanguard mutual funds are also available through TIAA-CREF and Fidelity Investments. If you do not want your investment fund to be a Lifecycle Index or Freedom Index Fund, contact TIAA-CREF or Fidelity to designate a different fund.

  • TIAA-CREF: 800-842-2776
  • Fidelity Investments: 800-343-0860

Why do I need to designate a beneficiary?

The beneficiary you designate will receive the accumulations in your account in the event of your death. Designating a beneficiary is critical to ensure that your retirement account is paid to the beneficiary of your wishes, and helps avoid legal disputes over your account.

It is important to keep your beneficiary designations up to date. Family status changes, such as marriage, divorce, birth, or adoption may affect your desired beneficiary intentions. It is recommended that you review and update your beneficiaries periodically to make sure they reflect your wishes as your circumstance change. Please note that updating your beneficiary for life insurance does not update it for your retirement savings plan or 457(b) plan. You must complete a separate beneficiary designation for each plan in which you are enrolled.

Doesn’t the enrollment process declare my beneficiary?

No. You must designate your beneficiary directly with TIAA-CREF and/or Fidelity Investments.

Isn’t my beneficiary automatically the one I listed for life insurance?

No. Life insurance and the retirement savings plan are two separate benefit programs. Designating or updating a beneficiary for one plan does not affect the other.

What happens in the event of my death if I don’t designate a beneficiary for the retirement savings plan?

For both TIAA-CREF and Fidelity the account will be paid according to person or persons surviving you in the following order:

a) spouse
b) children
c) parents
d) brothers or sisters
e) personal representative (executor or administrator)

Beneficiary Designation

You must complete a separate beneficiary designation for each plan in which you are enrolled. To designate or change your beneficiary for your TIAA-CREF and Fidelity Investments accounts, see Beneficiary.

Next: Online Enrollment Deadlines

Limitations
The University of Michigan in its sole discretion may modify, amend, or terminate the benefits provided with respect to any individual receiving benefits, including active employees, retirees, and their dependents. Although the university has elected to provide these benefits this year, no individual has a vested right to any of the benefits provided. Nothing in these materials gives any individual the right to continued benefits beyond the time the university modifies, amends, or terminates the benefit. Anyone seeking or accepting any of the benefits provided will be deemed to have accepted the terms of the benefits programs and the university's right to modify, amend or terminate them.