Faculty Assembly updated on target date retirement fund, dependent care


Pitt Faculty Assembly’s inaugural meeting of the fall semester covered a multitude of both new and revisited topics, from post-pandemic approaches to meetings and class attendance to updates on dependent care benefits and the Tuition Exchange Policy.

The Sept. 7 meeting delved extensively into Pitt’s new target date-based retirement fund option. Announced last spring, the fund option allows investors to set a specific retirement target year for both TIAA and Vanguard investments. Those further from retirement will have more higher-risk investments offering potentially greater return, then the balance shifts to funds that provide potentially less — but steadier — income for the long haul of retirement.

“This is a type of investment fund that adjusts with the employee life cycle so that employees who opt to be in this fund do not have to actively adjust their risk tolerance and investment balance as they get closer to retirement age,” said Linda Tashbook, chair of the Benefits and Welfare Committee. “We want all of you to be informed about it because we are hoping that within your committees and your departments and your schools, you will serve individually as a calm and correct source of information about this new fund.”

Plan for the long run 

Tim Irvin, of CAPTRUST, which independently oversees TIAA and Vanguard funds for Pitt, said the appeal of the target-date approach is reducing the career investor’s responsibility as their financial capital increases while their working, or salary-generated, capital decreases with fewer on-the-payroll years remaining.

“You want to make sure that you’re de-risking as you move on in your career,” he said. “Why target dates are so popular is because this happens automatically. So rather than you having to adjust your allocation over time, Vanguard or TIAA does it for you.”

Despite the advantages, the approach — particularly with employees working and living longer than before — doesn’t guarantee a source of income throughout retirement.

“And so we essentially evaluated this and the whole target date review and we said ‘Well, what if we add components of both TIAA and Vanguard, picked the best of both worlds … and we add components that can help create a lifetime-income portion for that check that you can’t outlive,” Irvin said. “At the same time, by putting in this fixed account, which is a fixed annuity/guaranteed return product that cannot go negative, we’re also going to substantially reduce volatility.”

This target-date approach allows Pitt’s investment team to:

  • Decrease volatility for participants who have investments in a fixed-return product on which they cannot lose a cent, or “go negative.”

  • Reduce expenses compared to both TIAA and Vanguard because the new product is lower in expense than both existing options.

  • Provide the opportunity for those between 65 and 70 to annuitize a portion of their money that can’t be outlived to create lifetime income.

Responding to a faculty member’s question about whether the new approach is optional, Melissa Kluchurosky, director of benefits, explained, “It’s more of an enhancement, not necessarily a change. We would encourage the change. However, if you don’t want to make a change and you want to stay strictly with TIAA or strictly with Vanguard or keep up a certain fund that you want, you can do that.”

Kluchurosky’s office will send out more information about this new option to faculty and staff later this year. 

“We plan on providing a lot of information through a microsite we’re creating with TIAA as well as putting information on the HR website,” she said, adding that informational summary guides, postcards, webinars and an on-campus seminar with TIAA representatives are being planned. “We’re really excited about it. CAPTRUST and the Retirement Oversight Committee have been really working hard on the transition and implementation, so we’re really looking forward to this change and the positive influence it’s going to have on the funds and our faculty and staff.”

Dependent care

Faculty Assembly also heard an update from the Senate’s Ad Hoc Committee on Dependent Care, led by Anna Wang-Erickson, assistant professor in the Department of Pediatrics. Providing a list of committee members, she said it has “pretty good representation across multiple different types of units at the University” and thanked them for their time and effort so far.

The committee views access to dependent care as “central to the University’s mission, particularly in supporting training and education and scholarship,” Wang-Erickson said, calling it not only a diversity and equity issue, but one that’s “really essential to scholarly and research productivity as well.”

The trend in this direction has prompted funding agencies to increase financial support for dependent care. “And they do that because they’re recognizing that it’s essential to attracting and retaining people in research and academia,” she said, “especially in increasing diversity in the participation of women.”

The committee therefore seeks to encourage Pitt to leverage existing resources to align with “funder priorities” while doing groundwork initiatives for future dependent-care programs, “particularly those that are high impact but lower cost,” Wang-Erickson noted.

An initial committee priority was to revise Pitt’s reimbursement policy FN28 to reverse its prohibition to reimbursing dependent care, even if the money comes through a grant. Agencies such as the National Institutes of Health and National Science Foundation often allow grant funds to be used for additional child-care costs incurred when attending project-related conferences and meetings and categorized under travel costs.

Before August, when Pitt’s chief financial officer updated guidance on the policy, Pitt employees weren’t able to use any grant money for child-care reimbursement. “So that is a positive change, because that’s potentially a lot of funding for people,” Wang-Erickson said.

Pitt’s Office of Policy has convened a committee to discuss all of the reimbursement policy. “It’s not just going to be about dependent care, but about the whole policy in general, but our dependent care is one of the items in the charter,” Wang-Erickson explained. “So that was one of our first priorities to really try to make it (so) there was a financial policy and infrastructure so any future program that might involve reimbursements would be able to be administered efficiently here.”

Wang-Erickson highlighted other developments including:

  • Through Care.com, Pitt provides 10 backup (temporary/emergency) care days, including an option to reimburse dependent care expenses or use both without exceeding actual expenses. Visit the Dependent Care Account website for more information.

  • Graduate students and postdocs funded through NIH fellowships (T32 and F31 training grants) are eligible to receive $2,500 per year for child care expenses.

“This is fairly new within the last year,” she said. “If they’re on an institutional training grant, these fellows … are automatically allocated this money every year. You don’t have to apply for it. It’s just automatically there.” There is paperwork if you’re on an individual training grant, “but it’s an administrative process. It’s not a competitive application.”

Wang-Erickson addressed a question from Abbe De Vallejo, associate professor in the Department of Pediatrics, about whether departmental budgets around campus are adequate to cover faculty and staff reimbursements for dependent care.

“You talk about the graduate students, which is terrific,” De Vallejo said. “But then you also have all the staff, right, who may encounter the same types of issues. And funding is always an issue … Is there a mechanism right now that they can follow, because I have a couple of staff who are looking into this, and it’s very difficult for them to navigate what’s available there through HR.”

“We are definitely thinking very much about staff,” Wang-Erickson said. “That’s why I had mentioned that, first, we need to have the ability to reimburse them using internal funding, because not all staff have access to external funds. … The work that we’ve been doing has been to understand how fringe benefits work, how it’s decided whether or not to add in your fringe benefit, and how those fringe benefits are funded.”

Wang-Erickson encouraged those at Pitt with dependent care funding needs to use care.com, “because we have no better way to estimate what the demand might be. It is very difficult to model how many people would actually need travel funding. We can’t just take the number of faculty who have children under 12 because you might have other arrangements and you might not ever need travel funding for dependent care. And so that’s why it is crucial that we have better data.”

Other Faculty Assembly business

  • No chat: This fall’s Faculty Assembly and Senate Council meetings will continue to be offered on a hybrid basis (in person and online/virtual) but — in an effort to encourage more in-person attendance — the “chat” feature where virtual attendees can post questions, comments and links, will be disabled.

  • Class attendance: Part of an overall effort to get back to in-person teaching and learning, Pitt’s attendance rules are reverting to pre-pandemic standards. Students will be required to make up any work from missed classroom time. Zoom or virtual classroom options are not required. “But I think we all need patience and compassion as we continue to calibrate what that means,” said Senate President Robin Kear. “If someone does need to be out a little longer with COVID, just please make clear to students how to make up work and what those expectations are.”

  • Tuition Exchange Policy: Faculty Assembly approved a reorganized version of the policy draft it had OK’d in June regarding the program, which provides an opportunity for dependent children of eligible Pitt faculty and staff to apply for Tuition Exchange Scholarships at other participating institutions. Sybil Streeter, of the Student Admissions, Aid and Affairs committee, said this version clarifies “that this is not a guaranteed benefit, but rather a scholarship opportunity that (requires) an application process. The value in the number of these scholarships is determined by the senior vice chancellor and will vary each year according to budget constraints. Secondly, it clarifies that the Office of Admissions and Financial Aid has the authority to administer Pitt’s participation in this tuition exchange program,” Streeter said. “And it also has details of this program clearly posted on the overall website.”

  • Access to services for part-time and renewing faculty: A long complaint of part-time faculty and those with pending contracts is the lack of access over the summer to email, libraries and other campus services requiring ID, Kear said. Pitt IT is working on a grace period of 155 days to give these faculty a bridge until their contracts are renewed. They also are working on a technical fix for those with new contracts to get an ID from Panther Central. The estimated project completion date is April 30, 2023.

Shannon O. Wells is a writer for the University Times. Reach him at shannonw@pitt.edu.


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