Case study | plan design and lifetime income
How Gonzaga put participants on the path to a more secure retirement and increased online engagement by 50%
Higher education | Pacific Northwest | Gonzaga University
participants enrolled in the new default investment, which includes a lifetime income option
increase in advice sessions with participants
employees updated their accounts with beneficiaries
Data as of March 31, 2024.
Background
For Gonzaga, helping employees pursue a more secure retirement with guaranteed lifetime income was both the right thing to do and an opportunity.
In 2023, Gonzaga’s retirement committee began asking questions about the effectiveness of the university’s retirement program. Could it be strengthened? Were there opportunities to increase engagement with the plan? What should Gonzaga as an employer be doing next?
These questions spurred Gonzaga to reevaluate its retirement offering with an eye toward boosting engagement and broadening access to guaranteed lifetime income.
Challenge
For employees
Too many employees were not engaged with their retirement plans. One example: Hundreds of employees had not listed beneficiaries in their accounts, a signal they were not paying close attention.
For the plan sponsor
A major component of Gonzaga’s value proposition to current and potential employees was not breaking through. Too many employees did not understand the quality of their retirement plan, a trend that could make it harder to retain employees and attract new ones.
TIAA solutions
Adding TIAA Traditional* to the default
Gonzaga’s retirement committee and its independent financial consultant, CAPTRUST, chose to replace the default investment, Nuveen Lifecycle Funds, with
To reach all participants—not just new ones—the university decided to re-enroll everyone with the new default with a simple opt-out. In part, the re-enrollment decision was made so all participants could have the opportunity to benefit from the TIAA Loyalty BonusSM, a unique feature designed to potentially send more retirement income to retirees who have saved for retirement through TIAA Traditional2.
We wanted to take it a step further and really make sure we were doing everything we needed to do for our employees—who are trusting us to get them to a more secure retirement.
* TIAA Traditional is issued by Teachers Insurance and Annuity Association of America (TIAA)
Enhanced education strategy
To get the word out about the implementation, Gonzaga and TIAA collaborated to launch an extensive communications campaign to give employees many opportunities to get information and ask questions—online resources, newsletter articles, comprehensive benefits and transition guides, webinars, and education sessions with TIAA financial professionals. Nearly 250 people attended three webinars, and 132 people attended one-on-one meetings.
Gonzaga and TIAA conducted deep-dive educational workshops on annuities and the Gonzaga retirement plan at a 2023 benefits fair. During the transition period in 2024, some 70 people scheduled one-on-one sessions at the 2024 Total Rewards Fair. Additionally, TIAA’s national call center fielded nearly 200 calls from Gonzaga employees.
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Results
Unequivocal boost in employee engagement
Over three months, Gonzaga saw a 21% increase in participant retirement readiness as measured by a TIAA proprietary metric that evaluates how well participants are taking advantage of their retirement plan benefits. The measure calculates in-plan behaviors in three areas: contributions, asset allocation/diversification and investments in guaranteed asset classes. Gonzaga wanted to boost online engagement, and the effect was immediate. In three months, there was a 50% increase in account logins and an 81% reduction in the number of accounts missing a beneficiary—highlighting how the education efforts drove participants to look at their account health as a whole and take action.
“The retirement committee was very thoughtful throughout the entire investment review process,” said Emily Wrightson, Principal, Financial Advisor, CAPTRUST. “Gonzaga’s focus continues to be on its faculty and staff, who now have an elevated default investment inclusive of optional lifetime income that is customized to the university’s population as well as to each unique individual.”
increase in account logins
reduction in the number of accounts missing a beneficiary
increase in retirement readiness after three months
Data as of March 31, 2024.
Solution deep dive
TIAA RetirePlus®
Like a target date solution, TIAA RetirePlus uses models to reflect each plan’s distinct demographics and preferences. The models are diversified across several asset classes and are designed to adjust those allocations over time. The models can include a range of investments, such as mutual funds, CITs and annuities, including TIAA Traditional. Solutions can be QDIA-eligible and therefore allow employers to include lifetime income as part of a plan’s default investment. TIAA offers two versions of TIAA RetirePlus: TIAA RetirePlus Select®, which uses a predefined set of models, and TIAA RetirePlus Pro, which offers sponsors more customization options.
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The results experiences by Gonzaga University may not be typical of all plans. Individual plan results will vary. Investment products may be subject to market and other risk factors. See the applicable product literature or visit TIAA.org for details.
The testimonial was provided by a current client, and no direct or indirect compensation was given in return. No material conflicts of interest exist on the part of the entity giving the testimonial, resulting from their relationship with the adviser. Results experienced by Gonzaga University may not be representative of the experience of other clients, and there is no guarantee of future performance or success.
This case study includes uncompensated testimonials from a financial advisor who is an employee of CAPTRUST and the advisor to the plan sponsor client.
1 All guarantees are based on TIAA’s claims-paying ability. TIAA Traditional is a guaranteed insurance contract and not an investment for federal securities law purposes. Past performance is no guarantee of future results.
2 TIAA Traditional Annuity interest and income benefits include guaranteed amounts plus additional amounts as may be declared on a year-by-year basis by the TIAA Board of Trustees. The additional amounts, when declared, remain in effect through the “declaration year,” which begins each March 1 for accumulating annuities and January 1 for payout annuities. Additional amounts are not guaranteed beyond the period for which they are declared. Lifetime income payments from TIAA Traditional may include a TIAA Loyalty BonusSM which is discretionary and determined annually.
TIAA Traditional is a fixed annuity product issued through these contracts by Teachers Insurance and Annuity Association of America (TIAA), 730 Third Avenue, New York, NY, 10017: form series 1000.24; G-1000.4 or G-1000.5/G1000.6 or G1000.7; 1200.8; G1250.1; IGRS-01-84-ACC and IGRS-02-ACC; IGRS-CERT2-84-ACC and IGRS-CERT3-ACC; IGRSP-01-84-ACC and IGRSP-02-ACC; IGRSP-CERT2-84-ACC and IGRSP-CERT3-ACC; 6008.8 and 6008.9-ACC; 1000.24-ATRA; 1280.2, 1280.4, or 1280.3 or 1280.5, or G1350. Not all contracts are available in all states or currently issued.
Annuity contracts contain exclusions, limitations and reductions of benefits and may contain terms for keeping them in force. We can provide you with costs and complete details.
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.
This material is for informational, educational or non-fiduciary sales opportunities and/or activities only and does not constitute investment advice (e.g., fiduciary advice under ERISA or otherwise), a securities recommendation under all securities laws, or an insurance product recommendation under state insurance laws or regulations to invest through a model or to purchase any security or advice about investing or managing retirement savings. It does not take into account any specific objectives or circumstances of any particular customer, or suggest any specific course of action.
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 – Neither the models nor any investment made pursuant to the models are deposits of, or obligations of, or guaranteed or endorsed by TIAA or their affiliates (except with respect to certain annuities sponsored by TIAA or its affiliates), or insured by the Federal Deposit Insurance Corporation, or any other agency. There is no guarantee that the underlying investments will provide adequate income at and through retirement and participants may experience losses. Participants should not allocate their retirement savings to the underlying investments unless they can readily bear the consequences of such loss.
Assets allocated to the underlying investments based on the model will be invested in underlying mutual funds and annuities that are permissible investments under the plan. Some or all of the underlying investments included in the model may be sponsored or managed by TIAA or its affiliates and pay fees to TIAA and its affiliates. In general, the value of a model-based account will fluctuate based on the performance of the underlying investments in which the account invests. For a detailed discussion of the risks applicable to an underlying investment, please see the prospectus or disclosure document for such underlying investment.
TIAA RetirePlus SelectSM and TIAA RetirePlus Pro® are administered by Teachers Insurance and Annuity Association of America (“TIAA”) as plan recordkeeper. TIAA-CREF Individual & Institutional Services, Member FINRA distributes securities products. 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 models on behalf of the plan participants are executed through TIAA-CREF Individual & Institutional Services, LLC, member FINRA.
TIAA RetirePlus Select
TIAA RetirePlus Select is an asset allocation program that includes asset allocation models that a plan participant may choose to guide the investment of his or her account into underlying investment options selected by the plan sponsor (the “underlying investments”). The plan sponsor selects the specific underlying investments available under its plan to represent the various asset classes in the models. An independent third-party advisor engaged by Teachers Insurance and Annuity Association of America (“TIAA”) developed the target asset class ratios for the models and the TIAA RetirePlus Select is administered by TIAA as plan recordkeeper. In making TIAA RetirePlus Select available to plans, TIAA is not providing investment advice to the plans or plan participants.
The target asset class ratios for a plan participant’s model-based account will become more conservative over time as the plan participant’s years to retirement decreases. For information regarding the changes to the target allocations please contact TIAA. An account’s actual allocation percentage to an underlying investment may vary from the target allocations due to the performance of the underlying investments or other factors. Accounts invested in accordance with the models will be rebalanced to the applicable target allocations periodically. The underlying investments included in a model are subject to change and may not be representative of the current or future underlying investments for the model. Some or all of the underlying investments included in a model may be sponsored or managed by TIAA or its affiliates and pay fees to TIAA and its affiliates.
Mesirow is not affiliated with TIAA. Mesirow Financial refers to Mesirow Financial Holdings, Inc. and its divisions, subsidiaries and affiliates. The Mesirow Financial name and logo are registered service marks of Mesirow Financial Holdings, Inc. ©2019, Mesirow Financial Holdings, Inc. All rights reserved. Advisory services offered through Mesirow Financial Investment Management, Inc. an SEC registered investment advisor.
TIAA RetirePlus Pro
TIAA RetirePlus Pro, a model-based service, is administered by Teachers Insurance and Annuity Association of America (“TIAA”) as plan recordkeeper. The TIAA RetirePlus Pro Models are asset allocation recommendations developed in one of three ways, depending on your plan structure: i) by your plan sponsor, ii) by your plan sponsor in consultation with consultants and other investment advisors designated by the plan sponsor, or iii) exclusively by consultants and other investment advisors selected by your 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 (for example, taking into account factors such as participant age and risk capacity as determined by a risk tolerance questionnaire). 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 TIAA RetirePlus Pro. In such case, participants who elect to unsubscribe from the service 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 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.
TIAA RetirePlus SelectSM is a service mark and TIAA RetirePlus® and TIAA RetirePlus Pro® are registered trademarks of Teachers Insurance and Annuity Association of America.