With the introduction of the fund changes to the Amherst College Defined Contribution Plan (the Plan) last year, questions were asked about how the newly formed Plan Investment Committee would function, how it would report information to Plan participants, and how new funds might be evaluated for inclusion in the fund options available for contributions. This communication is intended to provide some feedback on the process.
The Plan Investment Committee has a number of responsibilities as outlined in the Plan Investment Committee charter which is posted on the HR website. One of its primary duties is to select and monitor the investment options and fund managers under the Plan.
The Committee will meet quarterly to review the performance of each fund. The process is outlined in the Plan Investment Policy Statement which is posted on the HR website. During the meeting, funds that may not be performing well relative to their peers are noted, with discussion about the reasons for such underperformance. Based on the investment policy thresholds and the monitoring process in place, the Committee can change investment options if it decides that an investment offering should be dropped and replaced by another investment option. Generally, the investment objectives of the replacement fund will be the same as those of the fund being replaced. Any fund changes will be communicated in advance, typically 30 to 60 days before the effective date of the change. Generally, any assets remaining in the fund being replaced would be transferred to the successor fund. If the participant does not want the assets to be transferred to the successor fund, then he/she could transfer the assets to one of the other funds offered which is open for contributions.
The Plan Investment Committee intends to provide participants with an annual report of the review process, probably after the performance data for the end of the second calendar quarter has been reviewed.
The Committee will continuously evaluate the asset classes and sub-asset classes included in the plan, striking a balance of providing employees an efficient/effective opportunity to structure a diversified portfolio while considering the overall number of funds offered in the plan. Participants may submit requests to the Committee to have funds considered for addition to the fund lineup. Following review, a reply explaining the Committee’s decision will be sent to the individual who submitted the request.
The Members of the Plan Investment Committee are:
Peter Shea, Chair
Ernest Le Blanc