Streamlining the 401(k) investment menu for 2015

New investment line-up to be announced in January, with effective date set for July.


Last January, Human Resources reported that the MIT Benefits Office was organizing focus groups on campus and at the Lincoln Laboratory to obtain feedback on a proposal to streamline the core menu of 401(k) investment options. The proposal, developed by the 401(k) Plan Investment Oversight Committee, was to:

  • Reduce the number of core fund options (those monitored by MIT) from more than 300 to about 30
  • Retain the retail brokerage window, with close to 5,000 fund options, for participants who desire more choice

The proposal was driven by a changing legal environment and a desire to simplify the fund-selection process for 401(k) plan participants. In addition, consolidating plan assets into fewer funds will offer the opportunity for lower investment fees and improved overall value for participants. A streamlined menu will be consistent with prevailing practice among large employers and many of MIT's peer universities.

The MIT community feedback process was completed in the spring. The Committee has worked over the summer and into the fall to refine its proposal in light of the valuable feedback received from focus group participants and others who contributed ideas. An announcement of the new investment line-up and transition plan is expected this coming January, with a planned effective date of July 2015.

Between January and July of next year, 401(k) participants will receive a variety of communications that will explain what is changing and actions they may want to consider. In particular, each participant will receive a personalized statement summarizing his or her current investment allocations and identifying similar funds available in the new line-up. In addition, the MIT Benefits Office is planning information sessions, workshops, and one-on-one counseling sessions by appointment.

Comments can be sent to 401kfeedback@mit.edu. Although the MIT Benefits Office may not be able to respond to each comment, all comments will be read, recorded, and considered through the transition process.


Topics: Human Resources, Community, Faculty, Staff

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