Retirement Investments and Fees - Human Resources at Ohio State
Investments and Fees
Understanding the investments available to you and the fees associated with your retirement account is an important step in your financial planning.
The university offers an array of retirement options, overseen by the Retirement Oversight Committee (ROC), to help you meet your financial goals. While OPERS and STRS manage investment offerings for the state retirement plans, the ROC makes recommendations to the chief human resources officer on administrative and investment decisions for university-sponsored plans.
The following information on investments and fees relates to the university-sponsored retirement plans.
On this page…
You have a range of investments available to you within the plans. The investment options are separated into three tiers to help you choose a strategy that works best for you.
The investments in Tiers 1 and 2 were carefully chosen by the ROC and are regularly monitored for their ongoing viability. Neither Ohio State nor the ROC monitors the investment options offered in Tier 3.
Things you should know:
- You can choose funds in as many or as few tiers as you wish.
- You could invest in a single target date fund or create your own diversified investment portfolio from the core investment options or through a self-directed brokerage account.
- You may change your investment elections/tiers at any time.
- Except for the fixed annuity options, the investment options available in Tiers 1 and 2 are the same across each of the providers and plans.
- You are responsible for selecting and monitoring your investments in Tier 3.
Investing made simple. Choose from professionally managed Target Date funds that align with your anticipated retirement year. The year in the fund name refers to the approximate year when an investor in the fund would retire at age 65. The investments automatically shift to a more conservative focus as you age.
|Tier 1 Lifecycle Funds*||Vehicle Type||Ticker|
|Vanguard Target Retirement Income Fund||Mutual Fund||VITRX|
|Vanguard Target Retirement 2020 Fund||Mutual Fund||VITWX|
|Vanguard Target Retirement 2025 Fund||Mutual Fund||VRIVX|
|Vanguard Target Retirement 2030 Fund||Mutual Fund||VTTWX|
|Vanguard Target Retirement 2035 Fund||Mutual Fund||VITFX|
|Vanguard Target Retirement 2040 Fund||Mutual Fund||VIRSX|
|Vanguard Target Retirement 2045 Fund||Mutual Fund||VITLX|
|Vanguard Target Retirement 2050 Fund||Mutual Fund||VTRLX|
|Vanguard Target Retirement 2055 Fund||Mutual Fund||VIVLX|
|Vanguard Target Retirement 2060 Fund||Mutual Fund||VILVX|
|Vanguard Target Retirement 2065 Fund||Mutual Fund||VSXFX|
|Vanguard Target Retirement 2070 Fund||Mutual Fund||VSVNX|
|*Investment options last updated 1/1/2022|
Create your own diversified portfolio and investment mix from options such as guaranteed fixed annuities, money market and index funds.
|Tier 2 Core Funds*||Vehicle Type||Ticker|
|Vanguard Federal Money Market Fund||Mutual Fund||VMFXX|
|AIG – Fixed Interest Option||Fixed Annuity||N/A|
|Fidelity – New York Life Guaranteed Interest Account||Fixed Annuity||N/A|
|TIAA – TIAA Traditional||Fixed Annuity||N/A|
|Voya – Voya Fixed Plus III||Fixed Annuity||N/A|
|Vanguard Total Bond Market Index Fund||Mutual Fund||VBTIX|
|Vanguard 500 Index Fund||Mutual Fund||VINIX|
|Vanguard Extended Market Index Fund||Mutual Fund||VEXAX|
|Vanguard Total International Stock Index Fund||Mutual Fund||VTSNX|
|*Investment options last updated 1/1/2022|
A self-directed brokerage account provides you with additional opportunities to invest in a wide range of mutual funds outside of the Plans’ investment lineup. Additional charges and higher investment management fees may apply.
A self-directed brokerage account offers expanded choice and flexibility, but it also comes with additional responsibility and risk. You may also incur additional fees, including an annual account maintenance fee or transaction fees for trades. Additionally, the expense ratios may be higher in some cases.
|Provider||Self-Directed Brokerage Account|
|AIG||Schwab Personal Choice Retirement Account (PCRA)|
Investment Performance Reports
When selecting investments, it is helpful to review and understand how the funds have performed historically.
- View the recent Tier 1 and 2 investment performance reports
- Learn how to read an investment performance report
You may also want to review the benchmark descriptions which describe what the investment returns are compared to in order to measure performance.
Please contact your provider for information on the performance of the investment options available through Tier 3.
Understanding your fees can help you monitor and control your costs. This is important as the fees you pay play an important part in how your account may look at retirement. To learn more on how fees can impact your account growth, review the SEC article How Fees and Expenses Affect Your Investment Portfolio.
Participants in the plans have two categories of plan-related charges:
- Record-keeping fees
- Investment management fees
Note: Additional fees may apply for specific transactions.
The annual record-keeping fee covers numerous services that are necessary for the day-to-day operation of the plans by your provider. This includes provider administrative duties, participant advice, quarterly statements, participant communications and customer service.
The plans’ record-keeping fees vary by plan and provider and will be deducted from your account(s) automatically. The annual fee will be deducted on a quarterly basis.
Things you should know:
- These record-keeping fees are in addition to investment management fees described in the next section
- You will be assessed a record-keeping fee for each account where you have a balance. For example, if you have a 403(b) balance with two providers, a record-keeping fee will be deducted by each provider. To avoid multiple fees, consider consolidating your accounts.
The table below illustrates the annual record-keeping fees assessed by each provider based upon the plan in which you participate.
|ODC||–||–||see ODC website||–||–|
*Voya and AIG participants also have asset-based fees assessed on account balances contributed prior to January 2021. We recommend you contact your provider to discuss any fees on your legacy account.
Investment Management Fees
Every investment has a cost. Investment management fees are determined using an “expense ratio,” which is the percentage of assets an investment manager charges each year to cover the fund’s annual operating expenses.
The expense ratio covers operational costs such as investment management fees, compliance, distributions, marketing, shareholder services and other expenses associated with the fund management. The expense ratio is deducted from investment returns before given to investors. Your total return is net of these expenses. The higher the expense ratio, the more the fund needs to perform in order to overcome these costs.
An expense ratio is expressed in basis points. One basis point is equal to .01%. Therefore, an expense ratio of 0.09% means that for every $10,000 you have invested, the fund will collect $9 annually from your account to cover its costs.
Each of the investment options within the plans has an expense ratio. The expense ratios are different for each investment option.
Portfolio Value from Investing $100,000 over 20 years
The line graph above shows that in 20 years, a 0.5% expense ratio reduces the portfolio value by $10,000 (dashed gray line) compared to a portfolio with a 0.25% expense ratio (solid black line). In 20 years, a 1.0% expense ratio reduces the portfolio value by nearly $30,000 (dotted red line) compared to a portfolio with a 0.25% expense ratio (black line).
Investment costs might not seem like a big deal, but they add up, compounding along with your investment returns. In other words, you don’t just lose the tiny amount of fees you pay, you also lose all the growth that money might have had for years into the future.
Note: If you invest in Tier 3 through the self-directed brokerage window there will likely be higher investment management fees or other additional charges.
The expense ratios for Tier 1 and Tier 2 investments can be found in this investment analysis report. Please contact your provider for the expense ratios for the investment options available through Tier 3.
These fees are charged when a participant engages in a specific action. Transaction fees vary by provider.
The chart below illustrates the transaction fees assessed by the plans’ current providers:
|Provider||Loan Initiation||Loan Maintenance||In-Service non hardship withdrawals||Hardship withdrawals||Brokerage account maintenance fee|
|TIAA||$75 for general;
$125 for principal residence
Use the NetBenefits portal to:
- Enroll in 403(b) and/or 457(b) plan(s)
- Change voluntary 403(b) and 457(b) contribution amounts
- Choose and/or change plan providers(s) for all plans
- Access tools and resources for planning
For Ohio Deferred Compensation elections, visit ohio457.org.