Cornell continues to monitor retirement funds and fees

The issue of retirement funds and the fees charged to plan participants has been in the news recently. In mid-July, for the fifth year, faculty and staff eligible for Cornell’s retirement plans received an email that linked them to the annual “Plan and Investment Notice” for Cornell University’s retirement plans. This document includes information on Cornell’s retirement plans’ services and costs, and the performance and expense information of all available investment funds to help guide investment decisions.

“The fees listed for funds that Cornell monitors are those that the university, using its leverage as a major employer, has negotiated with TIAA, Fidelity and for Weill Cornell Medicine employees, Vanguard,” said Paul Bursic, senior director of Benefit Services. “These are the lowest fees possible, often at rates significantly below retail.”

Cornell and Weill Cornell Medicine monitor their retirement plans through the Retirement Plan Oversight Committee (RPOC). In 2011, with assistance from an independent advisory firm, CAPTRUST, the RPOC formally adopted an Investment Policy Statement to guide investment selections made for the university’s retirement plans and reviewed all of Cornell’s retirement plan offerings. Based on CAPTRUST’s feedback, Cornell and Weill Cornell Medicine in 2014 instituted a four-tiered structure for the retirement plans offered through TIAA, Vanguard and Fidelity, providing two tiers (tier one, lifestyle funds, and tier two, core funds) that RPOC monitors along with CAPTRUST. Fees for these funds are negotiated on a regular basis.

The RPOC committee is chaired by Mary Opperman, chief human resources officer, and includes faculty members, representatives from the finance division at the Ithaca and Weill Cornell Medicine campuses, business officers, the university treasurer and a representative from the Employee Assembly and the benefits staff.

“The committee meets quarterly and looks carefully at how the tier one and two funds are performing as well as at their costs. We exercise an extraordinary level of fiduciary responsibility and strive to meet all regulatory requirements,” Bursic said.

This ongoing monitoring benefits all Cornell employees including those who work at Weill Cornell Medicine. “Weill Cornell Medicine remains committed to providing retirement plans for our employees with robust, well-performing investment options and with negotiated, competitive administrative fees,” said Patrick Gallagher, managing director for human resources at the medical college and a member of the committee.

Periodically, employees who have invested in tier one or two funds receive notices that cost-savings from the negotiated fees have been folded back into their respective investment accounts.

Investors who want greater choice among funds can choose from tier three, non-core funds, and tier four, self-directed funds. Cornell and Weill Cornell Medicine do not monitor these funds for performance and expenses, nor are these funds’ fees negotiated.

Employees who access the Cornell benefits retirement web pages or those of the Weill Cornell Medicine retirement benefits site can find more information on the tiered retirement funds and fee structure. “We strongly encourage faculty and staff members to talk with a retirement vendor representative of your choice when assessing your investments or making any investment changes,” Bursic said. “They can help you to structure your retirement portfolio so that it is appropriate for how you would like to manage your retirement investments and is correctly diversified and balanced.”

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John Carberry