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Dear Participant in the Tax Sheltered Annuity 403(b) Program:
We are writing to let you know of some upcoming enhancements to the Tax Sheltered Annuity (TSA) 403(b) Program.
As a result, the Arizona University System will be moving to three providers for TSA services this fall. The selected providers are AIG Retirement, Fidelity Investments and TIAA-CREF. Effective later this fall (exact date has not been determined yet), salary deferrals will only be directed to these three providers.
If your payroll deferral is currently with one of these three companies, no action will be required.
Participants with funds on deposit with other TSA vendors will NOT be required to move their accounts to one of the three approved investment companies, but may do so.
WHY THE CHANGE?
As you may know, the Internal Revenue Service has implemented new administrative rules for TSA plans. Recognizing the need to evaluate our current vendors' ability to comply with new IRS requirements, the Arizona University System took the opportunity to conduct a more comprehensive review of investment company offerings and administration to develop the best possible program for our participants.
To accomplish this, a TSA review team of faculty and benefits managers from each university was convened and an independent outside consultant was selected. Next, an open competitive Request for Proposal for investment companies was issued and many, but not all, of our current investment companies submitted proposals.
In evaluating the proposals submitted, the review team analyzed overall fees, client service, communication and education, investment flexibility, investment management services, quality assurance, record keeping/administration, and the ability to comply with new IRS requirements.
The review group has completed its evaluation and selected AIG Retirement, Fidelity Investments and TIAA-CREF to provide TSA investments and services to participants.
The new TSA Tier 1 investment line-up will be highly competitive investment products for a broad range of investment classes very similar to the line-up in the current Optional Retirement Plan (ORP).
The new TSA Tier 2 investments will include a large selection of mutual funds and annuity products offered by AIG Retirement, Fidelity Investments and TIAA-CREF.
More information on changes to the TSA program will be distributed to participants this fall and will be posted on each University's website.
Arizona State University
Northern Arizona University
The University of Arizona
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