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Ray_CSU

Csu - Fidelity Memo Re Tsa Options For 2009

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Fidelity is one of our options under the new California State University plan for 2009. The choice of funds is now limited to 19 (counting the Freedom Funds as one fund), down from about 150 funds previously offered. Of the 19, only 8 are actual Fidelity funds; the others are funds managed by other companies availabel through Fidelity.

 

I previously was investing in 5 funds: Fidelity Low-Priced Stock Fund, Fidelity US Bond Index, Spartan International Index and Spartan Total Market Index. The only one still available is the Low-Priced Stock Fund. I am thinking that I'll transfer my current balance from the Low-Priced Stock Fund into the others, and then start contributing to the Low-Priced Stock Fund all over again. I'll also likely choose one of their Freedom funds.

 

I would consider some of the offerings Fidelity has from Pimco and Vanguard, but I think I'd end up paying higher fees if I went that way.

 

Here is the first part of the 8 page memo from Fidelity. The rest mostly lists the fund options that are going away. Note that they say that if you do not specify which of the new funds you want going forward that your new contributions will go to one of the Freedom Funds, based upon your age and expected retirement date.

 

Memo from Fidelity-

December 5, 2008

Re: Important Information Regarding Your California State University Tax Sheltered Annuity Program

 

Dear California State University TSA Participant:

Effective on January 1, 2009, the California State University (CSU) Tax Sheltered Annuity (TSA) Program investment lineup will include new investment options and will be streamlined to a core investment lineup. As a CSU TSA participant, you may have completed the initial enrollment process via Retirement Manager by directing a portion of your salary to the CSU TSA Program at Fidelity beginning January 1, 2009. The following information provided will assist you in selecting investment options available in the new CSU core lineup offered through Fidelity. Please note because January 1 is a holiday, January 2 is the first business day to make investment choices.

 

• Please review your current investments and compare to the new CSU core investment lineup listed below. You may currently be investing in one or more of these funds that will continue to be part of the CSU core lineup effective January 1, 2009. If you are satisfied with your choices and they are part of the CSU core lineup, no further action is required.

 

• If you are currently investing in a fund(s) not available in the new CSU core lineup (see frozen funds chart on page 2), you will need to redirect future contributions to investments in the new CSU core lineup by the close of the market (generally 1:00 p.m. Pacific time) on January 2, 2009, or future contributions will default to one of the Fidelity Freedom Funds® (see the default fund chart on page 4). If you miss the January 2, 2009 date, you have the option of designating future contributions to a fund within the new CSU core lineup and making an exchange of funds from the default fund at a future date.

 

• You have the option of maintaining your existing account balance(s) in frozen funds or you may make an exchange to an investment in the new CSU core lineup on or after January 2, 2009.

 

• Effective as of the close of the market (generally 1:00 p.m. Pacific time) on December 31, 2008, no exchanges will be permitted into a frozen fund.

 

CSU core investment lineup

 

Allianz NFJ Dividend Value Fund - Administrative Class*

Allianz NFJ Small-Cap Value Fund - Administrative Class*

American Century Real Estate Fund - Investor Class*

Fidelity Balanced Fund

Fidelity Freedom Funds®

Fidelity Fund

Fidelity Growth Company Fund

Fidelity International Discovery Fund

Fidelity Low-Priced Stock Fund

Fidelity Retirement Money Market Portfolio

Fidelity Small Cap Stock Fund

ING Stable Value Account*

Janus Mid Cap Value Fund - Investor Class*

Morgan Stanley Institutional Fund Trust Mid Cap Growth Portfolio - Class P Shares*

PIMCO Real Return Fund - Administrative Class*

PIMCO Total Return Fund - Administrative Class*

Spartan® U.S. Equity Index Fund - Investor Class

The Hartford Small Company Fund - Class Y*

Vanguard Long-Term Bond Index Fund - Investor Shares*

 

*New investment option available 1/2/2009.

Please see the investment option descriptions in the About Your New Investment Options section of this letter for the new funds being added. You can also view an electronic version of this document by logging onto Fidelity NetBenefits® and navigating to Plan Information and Documents. 511917.1.0 Page 1 of 8 You can also view an electronic version of this document by logging onto Fidelity NetBenefits® and navigating to Plan Information and Documents. 511917.1.0 Page 2 of 8

 

Now may be a good time to review your current investment options to make sure the current investment objectives are meeting your goals. Please review this guide to learn how these changes may impact your future contributions and existing account balances. We encourage you to contact Fidelity by the close of the market (generally 1:00 p.m. Pacific time) on January 2, 2009, to direct how you want your future CSU TSA contributions invested; otherwise, if your current investment allocations are not directed to a core investment option, your future contributions will be defaulted to the Plan's default fund. Please call Fidelity at 1-800-343-0860 or log on to Fidelity NetBenefits® to direct your future contributions to the CSU new investment lineup.

 

 

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Ray,

 

CSU faculty members have been hosed by this plan. Here you were going along your merry little way with those fantastic Spartan funds and -- bam! -- those are no longer available.

 

Consider the Freedom Funds. You will pay 6x what you were paying for Spartan, but they are nicely diversified.

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