Introducing Custom Default Options
A new retirement plan investment solution that can focus on what participants want – income in retirement. We offer you the ability to create models that are simple and income focused.
Targeting a better path for retirement
Options to help generate income
Help employees who don’t want to make their own selections with automatic enrollment in default options.
You can select default options that best suit your plan’s needs
These options can help you give employees what they want and need – income in retirement.
Solutions to help create income and manage risk
Target Date Plus
This model can substitute TIAA Traditional for bond funds helping combat the risk of rising rates and may provide guaranteed income.
Target Income Models
These models target replacing a portion of income in retirement and help manage income volatility over time.
Custom Default Solutions FAQs
A: Custom Default Solutions are model portfolios that allow, plan sponsors and their consultants to leverage the recordkeeping capabilities developed by TIAA as the program sponsor under the Custom Portfolios Model Service to build income focused portfolios specific to the demographics of their plan. The plan sponsor or their third-party fiduciary may choose to utilize a methodology different from the concepts described in this material.
A: The plan sponsor, their consultant or asset manager has the responsibility to build the models and recommend the underlying investment options, glidepaths, and to allocate the plan’s participants to the Models created for that plan. TIAA does not build the models or recommend underlying investment options that comprise the models.
A: Allows plan sponsors to work with a consultant or investment advisor to create income solutions on a plan level to meet the unique needs of a company’s workforce demographics
- Provides more control over investment choices and costs
- Can be used as a more targeted default for both disengaged and hands-on participants
A: Target Income Models and Target Date Plus both seek better participant outcomes and focus on retirement income.
The Target Income Models are based on the lifecycle concepts pioneered by Nobel laureate economist Robert C. Merton* and offers a defined benefit-type solution within a defined contribution plan. Its focus is on working toward an income goal, and managing the volatility of that income over time.
While Target Date Plus models offer the familiar structure of glidepath-based target-date portfolios with an annuity component that can offer lifetime income and help manage some of the risks participants may face saving for and being in retirement.
* Robert C. Merton provides consulting services to Dimensional Fund Advisors LP (“Dimensional”). DFA Securities LLC, a FINRA registered broker-dealer and an affiliate of Dimensional, is the licensor of the Dimensional Target Income Allocations, a series of asset allocations. Dimensional has also licensed to TIAA a plan assessment tool that helps to identify and sort categories of plan participants. Dimensional is not affiliated with TIAA.
Let’s work together to help employees pursue lifetime income
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1 Subject to the claims paying ability of the issuing company.
You should consider the investment objectives, principal strategies, principal risks, portfolio turnover rate, performance data, and fee and expense information of each underlying investment carefully before directing an investment based on the model. For a free copy of the program description and the prospectus or other offering documents for each of the underlying investments (containing this and other information), call TIAA at 877-518-9161. Please read the program description and the prospectuses or other offering documents for the underlying investments carefully before investing.The Model is an asset allocation recommendation developed by the Plan Sponsor in consultation with consultants and other investment advisors designated by the Plan Sponsor whereby assets are allocated to underlying mutual funds and annuities that are permissible investments under the plan. Model-based accounts will be managed on the basis of the plan participant’s personal financial situation and investment objectives.
Certain Models may have been developed by your Plan Sponsor and, if applicable, your Plan Advisor, using Dimensional Target Income Allocations, a series of allocations licensed to the Program Sponsor by DFA Securities LLC and authorized for use by your Plan Sponsor and, if applicable, your Plan Advisor. Neither TIAA, as the Program Sponsor, nor DFA Securities LLC plays a role in or is responsible for developing or selecting your Model. Additionally, your Plan Sponsor and, if applicable, your Plan Advisor may use a plan assessment tool to help identify and sort categories of plan participants. The Program Sponsor licenses the tool from Dimensional Fund Advisors LP and the tool is authorized for use by your Plan Sponsor and, if applicable, your Plan Advisor. Neither TIAA, as the Program Sponsor, nor Dimensional Fund Advisors LP plays a role in or is responsible for how your Plan Sponsor and/or your Plan Advisor identifies and groups plan participants. Neither DFA Securities LLC nor Dimensional Fund Advisors LP provides any investment, legal, accounting or tax advice in connection with the Program.As with all mutual funds, the principal value of a target date fund isn’t guaranteed and will fluctuate with market changes. The target date approximates when investors may plan to start making withdrawals. However, you are not required to withdraw the funds at that target date. After the target date has been reached, some of your money may be merged into a fund with a more stable asset allocation. Target date funds share the risks associated with the types of securities held by each of the underlying funds in which they invest. In addition to the fees and expenses associated with the target date funds, there is exposure to the fees and expenses associated with the underlying mutual funds.
The Plan Fiduciary and the Plan Advisor may determine that an Underlying Investment(s) is appropriate for a Model Portfolio, but not appropriate as a stand-alone investment for a Participant who is not participating in the Program. In such case, Participants who elect to unsubscribe from the Program while holding an Underlying Investment(s) in their Model-Based Account that has been deemed inappropriate as a stand-alone investment option by the Plan Fiduciary and/or the Plan Advisor will be prohibited from allocating future contributions to that investment option(s).
Established Restrictions: Each Plan Participant may, but need not, propose restrictions for his or her Model-Based Account, which will further customize such Plan Participant’s own portfolio of Underlying Investments. The Plan Fiduciary is responsible for considering any restrictions proposed by a Plan Participant, and for determining (together with Plan Advisor(s)) whether the proposed restriction is “reasonable” in each case.
No registration under the Investment Company Act, the Securities Act or state securities laws – The Model is not a mutual fund or other type of security and will not be registered with the Securities and Exchange Commission as an investment company under the Investment Company Act of 1940, as amended, and no units or shares of the Model will be registered under the Securities Act of 1933, as amended, nor will they be registered with any state securities regulator. Accordingly, the Model is not subject to compliance with the requirements of such acts, nor may plan participants investing in underlying investments based on the Model avail themselves of the protections thereunder, except to the extent that one or more underlying investments or interests therein are registered under such acts.
No guarantee – Investments based on the Model are not deposits of, or obligations of, or guaranteed or endorsed by TIAA, the Investment Advisor, The Plan or their affiliates, and are not insured by the Federal Deposit Insurance Corporation, or any other agency. An investment based on the Model is not guaranteed, and you may experience losses, including losses near, at, or after the target date. There is no guarantee that investments based on the Model will provide adequate income at and through your retirement. Investors should not allocate their retirement savings based on the Model unless they can readily bear the consequences of such loss.
The TIAA Custom Portfolio Program Model-Based Service is administered by Teachers Insurance and Annuity Association of America (“TIAA”) as plan record keeper.
TIAA-CREF Individual & Institutional Services, LLC, Teachers Personal Investors Services, Inc., and Nuveen Securities, LLC, Members FINRA and SIPC, distribute securities products. If offered under your plan, TIAA and CREF annuity contracts and certificates are issued by Teachers Insurance and Annuity Association of America (TIAA) and College Retirement Equities Fund (CREF), New York, NY, respectively. Each is solely responsible for its own financial condition and contractual obligations. Transactions in the underlying investments invested in based on the Model on behalf of the plan participants are executed through TIAA-CREF Individual & Institutional Services, LLC, member FINRA.