Investment Choices
When you are automatically enrolled in the Boston University Retirement Plan your contributions are invested in the Vanguard Target Date Retirement Fund closest to the year in which you will turn age 65. However, you make changes to the investment allocation through Fidelity Investments. Boston University assumes no responsibility for your choice of investments. Since you choose the investment options for your account, you are responsible for the financial results. The plan is intended to be a participant-directed plan as described in Section 404(c) of the Employee Retirement Income Security Act of 1974 as amended (ERISA) and Department of Labor regulations governing Section 404(c) plans. This means that fiduciaries of the plan are relieved of liability for any losses that are the result of investment instructions given by a participant or beneficiary under the participant-directed investment feature of the plan.
Before choosing an investment option, you should consult a professional financial advisor for investment advice and financial planning assistance. Further information on investment options available under the plan may be obtained directly from Fidelity. You should read the prospectus or other plan information carefully before investing.
The investment lineup is based on four tiers of investment options, with a focus on passively managed index funds. You can choose funds in as many or as few tiers as you wish.
| Tier One | Target Date Funds |
| Tier Two | Passively Managed Equities |
| Tier Three | Capital Preservation and Income |
| Tier Four | Self-Directed Brokerage |
TIER 1: TARGET DATE FUNDS
Investing Style: Diversified portfolio within a single fund that shifts its emphasis to more conservative investments as the year of retirement nears.
Target-date funds are designed for participants who prefer a single-fund solution that includes a mix of stocks, bonds, and short-term assets. Each of the funds creates a diversified portfolio within one fund, based on your expected retirement year (the “target date” of the fund), or year in which you turn age 65. These funds automatically rebalance between stocks and bonds to become more conservative as you approach retirement, and are also the plan’s Designated Default Investment.
TIER 2: PASSIVELY MANAGED EQUITIES
Investing Style: A broad selection of equity index funds designed to mirror a market index or benchmark.
Passively managed funds—commonly known as “index funds”—seek to approximate their benchmark’s performance, rather than beat their benchmarks. A benchmark is what the investment’s returns are compared to in order to measure performance. Because the objective is to simply mirror the holdings and return of an index, less research is needed, transactions occur less frequently, and expenses tend to be lower than those of actively managed funds.
Ultimately, index funds are designed to provide exposure to a broad selection of securities at a relatively low cost. While these funds typically perform very similarly to the index they track, you should be aware that index funds cannot be expected to meet or beat the index’s performance.
TIER 3: CAPITAL PRESERVATION AND INCOME FUNDS
Investing Style: A broad selection of funds that seek to preserve savings and generate income or produce returns that exceed the inflation rate.
Tier three funds include the New York Life Guaranteed Fixed Interest Account, which is a guaranteed fixed-return annuity is designed to provide you with a high level of principal stability. In addition, it lets you convert your balance to a guaranteed stream of income when you retire (Any guarantees are subject to the claims paying ability of the issuer).
The remaining funds in Tier 3 focus on income generation and inflation protection for investors who want to produce a growing income distribution while leaving the principal alone or returns that exceed the inflation rate so investors can build future purchasing power and wealth.
TIER 4: SELF-DIRECTED BROKERAGE
Investing Style: For investors who want additional choice and investment flexibility.
Fidelity BrokerageLink® is a self-directed brokerage option, that combines the convenience of the BU Retirement Savings Program with the additional flexibility of an individual brokerage account. If you are a more engaged investor looking for additional investment selection and flexibility, a self-directed brokerage account gives you opportunities to invest in a wide range of mutual funds outside of the Plans’ investment lineup.
To obtain a detailed description of the funds offered through Fidelity, you should contact Human Resources.