The University of Michigan provides comprehensive retirement planning services through TIAA and Fidelity Investments to help you manage your retirement savings plans and engage in thoughtful, long-term planning. Faculty and staff will, at times, receive unauthorized and sometimes misleading financial advisor solicitations.

These emails and invitations mailed to your home may offer a meeting to assist with your retirement account(s). Some are inaccurate and may imply that U-M is endorsing their services, or that they have an affiliation with U-M. Some actually originate outside of Michigan. 

If you do not have an established working relationship with a financial advisor who is offering to meet with you, proceed with caution. It's easy to confuse these unauthorized solicitors with university-authorized Fidelity and TIAA financial planning reps. Fidelity and TIAA have dedicated teams of extremely knowledgeable representatives well versed in the details of U-M's retirement plans.  

Below are examples of solicitations that should be considered with caution: 

• They say they serve “university employees” but do not name U-M.
• Solicitation may say that you are eligible for a free consultation each year as a U-M employee as part of your employer’s retirement plan. 
• Solicitation may refer to your pension or a pension plan review, even though U-M does not have a pension. These often are meant for individuals who have a pension through a public school system or university. These firms may have limited knowledge of the U-M retirement savings plans.
• Some firms will use the block M logo in their digital messages or on their letterhead, which gives the impression that they are a U-M partner.
• Others set up in buildings or outdoor areas on U-M campuses to offer their services. Be cautious. If it’s not Fidelity or TIAA, it’s not an approved U-M partner.

Most of these external vendors aren’t scammers; they’re simply looking for opportunities to increase their business or sell you products outside the U-M plans. You are not limited to working only with Fidelity and TIAA regarding your U-M retirement investments; however, do your homework before entrusting an unfamiliar business with your funds. 

Where to Find Help

It’s important to do your research. Always ask for and carefully read the advisor’s “Form ADV,” which registered investment advisors (RIA) must complete to register and file with the Securities and Exchange Commission (SEC) and/or state securities regulators. It is possible that you may not have been contacted by an RIA, but by an insurance agent or salesperson.

The Form ADV reports each RIA’s professional background, including business, ownership, clients, employees, business practices, affiliations, current registrations, employment history, and disclosures about certain disciplinary events involving the individual. You can view an advisor's most recent Form ADV online by visiting Investment Adviser Public Disclosure (IAPD), an official U.S. Government site.

If an individual is offering to sell you investments, find out whether the person is registered with the Federal Industry Regulatory Authority (FINRA) or the SEC. Use FINRA BrokerCheck or call the FINRA Hotline at (800) 289-9999. If the person is registered, be sure to check for any red flags raised by employment or disciplinary history.

Be Cautious of…

• Seminars that offer a “free lunch” or those that charge a fee. Even if these events take place in a U-M campus building, they are not authorized by the University.
• You are encouraged to open an IRA to buy investment products. These require careful due diligence and research. You may be pressured to buy products that have substantial risk, carry very high fees and commissions (such as certain insurance products), or have surrender periods during which you cannot get your money out of the product you purchase.
• You are encouraged to rollover to an IRA. There is no requirement that you rollover your assets out of the U-M plans when you leave the University or retire. However, there are some very significant advantages to having assets in the U-M plans that you will lose if you rollover to an IRA. Here are some important matters to keep in mind:
   

  1. Loss of Exemption to Age 59½ Early Withdrawal Penalty

  If you terminate employment or retire from U-M during or after the calendar year in which you reach age 55, the 10 percent Internal Revenue Service (IRS) penalty for early withdrawals taken prior to age 59½ does not apply. This exemption to the penalty does not apply to an IRA. If you rollover your U-M retirement assets to an IRA and then take a distribution from the IRA prior to age 59½, this exemption to the penalty is no longer available to you.

  In addition, the 10 percent penalty does not apply to distributions taken if: 1) you have deductible medical expenses that exceed 7.5 percent of your adjusted gross income, whether or not you itemize your deductions for the year; or 2) distributions are made to an alternate payee under a qualified domestic relations order; or 3) distributions are taken as a reservist while serving on active duty for at least 180 days. 

  These exceptions to the IRS penalty for withdrawals taken before age 59½ are lost if you rollover assets to an IRA.

  2. Loss of Waiver Fees

  Many fees are waived when you participate in an employer retirement plan. These include recordkeeping and account maintenance fees and minimum balance requirements to invest. When you elect an IRA rollover, you often become subject to many of these fees that were waived through the U-M Retirement Savings Plans.

  3. Loss of Low-Cost Share Class

  All TIAA mutual funds, TIAA variable annuities, and several Fidelity mutual funds are offered at the lowest cost share class through the U-M Basic Retirement Plan. These funds are not available to you through an IRA, and you will have a much higher fee to access these funds through an IRA.

  4. No Access to Closed Funds

  Some investment funds are open only to investors through an employer retirement plan. Your access to some TIAA and Fidelity funds may be closed when you elect an IRA rollover.

  Before you entrust the retirement assets you have worked so hard to build to someone, make sure your best interests (and not theirs) are being served.