Vice President for Human Resources Joan F. Rice has announced that Fidelity Investments has been chosen to provide record-keeping and investment services for the MIT Supplemental 401(k) Plan.
President Charles M. Vest has appointed members to the new MIT Supplemental 401(k) Plan Oversight Committee, established by the MIT Corporation's Executive Committee to help MIT meet its fiduciary responsibilities to plan participants as a result of the decision to outsource the operations of the Supplemental 401(k) Plan. The committee is responsible for the selection and monitoring of investment options.
As part of the review of the MIT Retirement Plan, five vendors were invited to offer proposals for Supplemental Plan services. Each firm was identified as a leader in the defined-contribution services market and either did business with the Institute or was headquartered locally. Each vendor was evaluated on the following criteria:
- Construction of funds to replicate current MIT Fixed and Variable Fund
- Nature and quality of additional investment options
- Commitment to and capacity for member communication and investment education
- Ability to perform certain burdensome administrative tasks currently performed by MIT
- Quality of annuity payment services
- Technology to support the administration of the plan
Two finalists were invited to present their proposals to an ad hoc committee of MIT vice presidents, deans, trustees of the MIT Retirement Plan and members of the Steering Committee for the Strategic Review of Benefits. It was the collective sentiment of the ad hoc committee that Fidelity Investments should be engaged to provide services to the Supplemental Plan. The selection process has also been reviewed by a pension-changes subcommittee of the Faculty Policy Committee chaired by Institute Professor Sheila E. Widnall.
The Supplemental 401(k) Plan Oversight Committee will work with Fidelity to ensure the smooth transition from the current management of the Fixed and Variable Funds to Fidelity management as of April 1, 1999.
The Fixed and Variable Funds will be available to participants who choose to take no action with respect to their investment choices.
For participants in the plan who would like alternative investment choice, the Oversight Committee will select a menu of mutual fund options that will cover the spectrum of investment options. These funds will be selected based on fund objectives and characteristics, performance and cost efficiency.
This core group of funds will be supported by educational information and tools provided by Fidelity for use by individuals and by the Benefits Office. Access to these tools will be available on the World Wide Web. In addition, seminars and one-on-one counseling will be provided by the Benefits Office in conjunction with representatives from Fidelity.
If an individual participant desires further choice, a selection of non-Fidelity mutual funds will be available, with no additional fees payable. A preliminary list of these funds can be found after December 21 at http://web.mit.edu/benefits/www/ or is available from the Benefits Offices on campus and at Lincoln Laboratory.
Glenn P. Strehle, vice president for finance and treasurer, will serve as chair of the committee through June 30, 1999 (he will be treasurer emeritus and advisor to the chairman and president on January 1, 1999). He is currently chair of the trustees of the MIT Retirement Plan. Other members of the committee appointed to two-year terms are James M. Poterba, Mitsui Professor of Economics and associate department head; Kenneth R. French, the Nan Yang Tech University Professor of Finance at the Sloan School; Ann J. Wolpert, director of MIT Libraries; Deborah L. Fairchild, special assistant to the dean for finance; and Carl E. Nielsen Jr., assistant director of Lincoln Laboratory.
Ms. Rice will serve in an ex officio voting capacity. Executive Vice President John R. Curry will serve as a guest member until July 1, 1999, at which time he will become chair of the committee.
A version of this article appeared in MIT Tech Talk on December 16, 1998.