Many current and former employees of Idaho’s two and four-year postsecondary institutions will lose access to some of their retirement savings for a 30-day period starting Nov. 22. The temporary blackout period is part of a transition from investment companies TIAA and Corebridge Financial to Fidelity Investments.
The change affects 13,175 current or former employees, and about $1.9 billion in assets held in the "optional retirement plan" according to the Idaho State Board of Education. That plan is how non-PERSI eligible employees invest to receive matching employer contributions. The state board has been sending mailers to program participants and holding seminars to let investors know of the coming change.
“Our biggest concern is those who may not be totally engaged in seeing this transition, and they're taken by surprise after the transition successfully completes,” said SBOE Chief FInancial Officer Patrick Coulson.
He said Fidelity required a 30-day blackout to ensure its transition process is accurate and complete. But that means program participants won’t be able to make changes to their accounts between Nov. 22 and Dec. 22, even though their money will remain invested and continue to move with the market. A partial blackout period for some Corebridge account-holders begins Nov. 15.
Annuity investments currently held at TIAA are not being transferred as part of the change to Fidelity, and will continue to be managed through TIAA. Not every current or former employee has those type of investments. Participants will need to update beneficiary designations after the blackout period, as that information is not included in the transfer.
The state board also advises participants 72 or older to double check accounts after Dec. 22 to ensure any outstanding required minimum distributions get completed before the end of the year.
Scheduled withdrawals will continue through the blackout period, Coulson said, but he’s talked to around two dozen participants with concerns about the blackout period and losing access to manage their accounts.
For most people, just riding it out is the best move, according to financial advisor Jason Floyd, who teaches financial planning at the University of Utah.
“It’s not a great idea to get scared and to try to figure out the best alternatives, It's best to wait it out,” he said.
Floyd notes that even if an average investor is trying to time investment moves to beat market reaction, professional traders work so fast that any potential advantage disappears quickly.
“You should always have a long-term perspective on the stock market, and over the long term it’s going to do alright - at least historically,” Floyd said.
He said investors should always work with a trustworthy financial professional who understands their unique situation.
The State Board of Education approved the change last year, stating then that they wanted to fully bid out the service. The change to Fidelity will result in a better user experience and lower investment fees for participants, according to the board.
Editor's Note: Current and former Boise State Public Radio employees are among those affected by the transition.
