Retirement Plan Advisory Committee
May 14, 2012
A meeting of the Retirement Plan Advisory Committee (RPAC) was held on May 14, 2012 via video conference among the Reno System Administration Offices, the Las Vegas System Administration Office and Western Nevada College.
Present: Michelle Kelley, Chair, Benefits Manager BCN; Kent Ervin, UNR Faculty Representative; Pat LaPutt, Benefits Manager BCS; Carla Henson, Retiree Representative; Robb Bay, CSN Representative; Jim Labuda, outgoing NSC Faculty Representative; Spencer Stewart, incoming NSC Faculty Representative; Nasser Daneshvary, UNLV Faculty Representative; Steven Streeper, TMCC Faculty Representative; Mike Hardie, WNC Faculty Representative, Patricia Hughes, DRI Representative
Also Present: George Dombroski and Cynthia Hunt (NSHE); Dan Pawlisch (Hewitt EnnisKnupp)
The meeting was called to order at 1:00 pm.
Dan Pawlisch presented an overview of the capital markets for the first quarter of 2012. He reported Fidelity and TIAA-CREF had strong quarters but VALIC struggled.
Kent Ervin presented a report on the Investment Management Subcommittee meeting that took place in the morning.
There was a conversation about the relevancy of the Preservation Clause in the RPA that prohibits (unless the benefits are annuitized) access to the employer portion of accounts for former employees with at least 5 years of service but under age 55. Michelle Kelley explained that recently UNLV had requested an exception to the rule on behalf of a former employee under age 55 who has terminal cancer. It was further explained that NSHE had been advised by legal counsel against making a one-off exception to the plan document as this would jeopardize the qualified nature of the Plan. This incident begged a broader question about the relevancy of the Preservation Clause. For purposes of stimulating discussion Michelle Kelley and Pat LaPutt staged a mock debate on the pros and cons of the provision. No clear consensus emerged on keeping or removing the clause from the plan. However, there was a convergence of interest around an amendment to the plan allowing for an exception for terminally ill individuals.
MOTION: Pat LaPutt moved to modify Section 7.2(c) of the Retirement Plan Alternative Plan Document to allow for the compassionate release of funds in the case where a terminated employee with more than 5 years of service who is under 55 years of age has a terminal diagnoses and requests withdrawal of the Institutional Plan Contributions. The administration of such compassionate release will be done by the service providers, including defining the process, and any fees or charges associated with the administration of such compassionate release would be borne by the participant.
Michelle Kelley informed the Committee that pursuant to the RPAC action on February 23, 2012, she and Hank Stone had informed VALIC that they should immediately suspend offerings of Guided Portfolio Services (GPS) to participants in the Medical Resident/Postdoctoral Scholar Plan. VALIC was further advised that the Committee desired to see a modification to the GPS enrollment process for all NSHE plans to satisfy the Committee that it is truly an “opt in” rather than an “opt out” enrollment process. She shared with the Committee an enrollment modification process proposed by VALIC. With some minor modifications, the Committee approved the proposed process with the stipulation that VALIC is to provide data on enrollment trends so the Committee can evaluate whether the change alters enrollment patterns.
Michelle Kelley gave an update on the discussions regarding the process of enhancing the administration and investment offerings in the plans. She said that meetings with the Council of Presidents and Faculty Senate Chairs had gone well. A meeting with the Business Officers is slated for late May. The Committee asked that the Power Point slides used at these meetings be shared with the Committee. Because there are some new members, the Committee asked that the presentation on best practices that was made to the Committee on March 27 be refreshed and re-presented at the August meeting.
Michelle Kelley invited RPAC members to become active participants in either the development of the upcoming RFP for recordkeeping services or the selection of the appropriate funds to populate the investment tiers.
Dan Pawlisch made an informational presentation on stable value funds in the marketplace. Many NSHE employees participate in the stable value products available through TIAA-CREF and VALIC and it is important that Committee members understand how the stable value funds work as we look to enhance the investment line-up.
Dan Pawlisch explained new fee disclosure requirements of plan providers and plan sponsors that take effect in 2012. He explained that although the new requirements apply to ERISA plans and NSHE’s are not ERISA plans, many non-ERISA plans tend to follow ERISA as a best practice. He informed the Committee that NSHE’s providers will be asked for their fee disclosures and these will be reviewed at the August meeting.
The meeting was adjourned at 3:50 pm.
Prepared by: George Dombroski, Retirement Plan Alternative Manager