Details of the exit plan and its implementation will be reported via direct correspondence with participants, and on this web site, as a common resource for everyone.
The DHE and VALIC are targeting the first week of November during which we will close-out the business with VALIC. We are still working on the schedule that will generate the final date.
At that time, any participants who have not already transferred their ORP assets from VALIC to either Fidelity or TIAA will have their assets swept to a default Provider (Fidelity or TIAA) by the DHE. We have yet to identify the default Provider.
Both Fidelity and TIAA offer monthly Systematic Withdrawals (“SWP” for Fidelity, “SWAT” for TIAA), which is your current method of payment.
However, TIAA’s fixed interest fund, the TIAA Traditional Account, does not make payments via SWATs as VALIC’s Fixed Account Plus and Fixed Interest Option do.
The TIAA Traditional Account’s primary mode of payment is an annuity. Hence, it is very important that you review the information below about VALIC’s Fixed Account Plus and the TIAA Traditional Account “sweep”.
Fidelity does not offer a “fixed interest” fund.
So, this “fixed interest” asset class will not be available to pay your SWATs at either Fidelity or TIAA. TIAA can offer an annuity with fixed interest.
Other than this “fixed interest” fund issue, you will find both firms offer a variety of asset classes and investment funds with which to adequately diversify your assets AND pay your monthly SWATs.
On November 8, 2019, the DHE will “sweep” all ORP assets remaining at VALIC at the close of business on Monday, October 28, 2019, to TIAA.
Your ORP assets in VALIC’s Fixed Account Plus, under the Portfolio Director Annuity will be swept to TIAA’s Traditional Account.
As noted above, the Traditional Account does not make monthly Systematic Withdrawal payments, which is your current method of payment. The Traditional Account’s primary payment method is an annuity.
IF YOU DO NOT WANT your Fixed Account Plus and Fixed Interest Option assets swept to TIAA’s Traditional Account, then you MUST, transfer your ORP assets to either Fidelity or TIAA prior to October 28.
After learning about the services and investment funds available at Fidelity and TIAA, you should contact Erion Lamme here at the DHE to coordinate your transfer out of VALIC to your new Provider. Erion works closely with the Group Insurance Commission, and will ensure that your transition to a new Provider does not, in any way, jeopardize your continued Retiree Insurance coverages.
NOTE: Erion cannot help you select a new Provider, nor can he provide advice about investing your ORP assets.
617 994 6930
The Dept. of Higher Education (DHE), as the Plan’s Administrator, will not extend VALIC’s contract as a Provider under the Optional Retirement Program (ORP). While the termination is effective immediately, VALIC’s role under the ORP will be phased-out over the course of 2019.
The Plan will not accept any new ORP enrollments or retirements for VALIC.
However, all other aspects of VALIC’s role in the ORP will remain unchanged as we make our way through this process.
Participants may continue current contributions to their ORP account with VALIC.
The DHE’s decision to release VALIC from the ORP is the first major step in the Commonwealth’s efforts to gradually revise the ORP’s structure away from the “multi-Provider” approach of the 1980s and 1990s, to an efficient contemporary approach.