Improvements to the UC Retirement Savings Program Fund Menu

YOU MAY WANT TO TAKE ACTION

Learn about the fund menu.
It’s a great time to take a fresh look at all of your investment options and the funds available on the updated menu.

You can find descriptions, including fees, of the funds on the main menu on pages 7-11 of the Fund Improvements Are on the Way brochure.

Review your investments.
These changes are effective after 1:00 p.m. PT on October 2, 2017. If you prefer, you can have your account transfer differently than described under Changes at a Glance (left).

Just request any investment changes before 1:00 p.m. PT on Monday, October 2, 2017. You can request investment changes online or by phone at 1-866-682-7787.

 

On October 2, UC is making changes to the fund menu for the UC Retirement Savings Program—the 403(b), 457(b), and DC Plans.

UC is updating the fund menu for the UC Retirement Savings Program—the 403(b), 457(b), and DC Plans. These changes are designed to make it easier for you to build a diversified, lower cost investment mix based on your time horizon and risk tolerance.

The changes are scheduled to take place after 1:00 p.m. PT on October 2, 2017, and can be viewed in your account on October 3, 2017.

CHANGES AT A GLANCE

 1. Three funds are being renamed

Three funds will have a new name but will keep the same investment manager, strategy, and holdings. Investment management fees (the “expense ratio”) will not change.

Effective October 2, 2017:

  • The Vanguard REIT Index Fund’s name will change to the UC Real Estate Fund.

  • The Vanguard Social Index Fund’s name will change to the UC Social Equity Fund.

  • The Vanguard Small Cap Fund’s name will change to the UC Domestic Small Cap Equity Fund.

Reasons for the change:

The new names make understanding how each fund invests more intuitive and are consistent with the names of our other UC funds. The investment manager, objectives, strategy, and holdings of these three funds will remain the same. Only the names and the fund codes used on NetBenefits® will change. There is no impact on investment fees (the “expense ratio”).

2. Three funds are being restructured

Three funds will have a new name and investment structure but will keep the same investment manager and strategy. All three funds will have lower investment management fees.

Effective October 2, 2017:

  • The DFA Emerging Markets Fund will change to the UC Emerging Markets Equity Fund.
  • The Fidelity Growth Company Fund will change to the UC Growth Company Fund.
  • The Fidelity Diversified International Fund will change to the UC Diversified International Fund.

Reasons for the change:

UC’s primary goal is to provide you with high-quality, lower fee investment choices. We are switching these three funds from publicly available mutual funds to funds managed specifically for UC’s 403(b), 457(b), and DC Plans. One will be a separately managed account with Dimensional Fund Advisors (DFA); two will be collective trusts with Fidelity Investments®. The result: These funds will have a new name but keep the same investment manager and strategy. All three funds will have lower fees because they will have lower marketing and overhead-related costs than similar, publicly traded mutual funds. And when you pay lower fees, more of your money can go to work for your future.

Note that the Fidelity funds that currently provide a revenue credit to help offset plan expenses will no longer provide that credit due to the restructuring.

3. Two funds are being removed

The UC Balanced Growth Fund and the UC Global Equity Fund will be removed from the menu. Balances in and future contributions to these funds will transfer as follows, unless you select different funds.

Effective October 2, 2017:

  • Investments in the UC Balanced Growth Fund will transfer 100% to a UC Pathway Fund1 based on your date of birth.
  • Investments in the UC Global Equity Fund will transfer 85% to the UC Domestic Equity Index Fund and 15% to the UC International Equity Index Fund.

Reasons for the change:

These two funds are similar to other funds on the menu, so removing them eliminates duplication.

  • The UC Balanced Growth Fund is similar to the UC Pathway Funds in that it invests in multiple underlying funds. Unlike the UC Pathway Funds, however, the UC Balanced Growth Fund does not adjust its asset mix to grow more conservative over time. But as retirement grows closer, taking a more conservative approach can help safeguard your savings.
  • The UC Global Equity Fund is mainly a combination of two underlying funds. The fund invests roughly 80–85% of its assets in the UC Domestic Equity Index Fund and 15–20% in the UC International Equity Index Fund. Many Plan participants invested in the UC Global Equity Fund may not be aware that they hold a large position in U.S. stocks, and as a result, may not have a clear picture of their overall risk.

 If you need help evaluating your decisions, you can talk one-on-one with a Retirement Planner by calling 1-800-558-9182.

1With the exception of the UC Pathway Income Fund, the asset allocation of each UC Pathway Fund will change over time. The UC Pathway Funds are subject to the volatility of the financial markets, including that of equity and fixed income investments in the U.S. and abroad, and may be subject to risks associated with investing in high-yield, small-cap, and foreign securities. Principal invested is not guaranteed at any time, including at or after the funds’ target dates.

The University of California intends to continue the benefits described here indefinitely; however, the benefits of all employees, retirees, and plan beneficiaries are subject to change or termination at the time of contract renewal or at any other time by the University or other governing authorities. If you belong to an exclusively represented bargaining unit, some of your benefits may differ from the ones described here.

Keep in mind that investing involves risk. The value of your investment will fluctuate over time, and you may gain or lose money.

Fidelity Brokerage Services LLC, member NYSE, SIPC, 900 Salem Street, Smithfield, RI 02917

© 2017 FMR LLC. All rights reserved.

809830.2.1