Frequently Asked Questions
If MCA is the "Single Source" Provider why does my employer offer other investment alternatives as well?
Prior to January 1, 2009, MRIC member employers had multiple (in some cases a very large number) of providers. These numbers dropped significantly as a result of federally-mandated requirements that went into effect January 1, 2009. While not required to offer any options other than the MCA "Single Source Provider", some MRIC member employers have chosen to offer a limited (a maximum of 8 is permitted by MRIC) of alternative investment providers as a way of accommodating those participants who wanted to have options other than those offered by the "Single Source Provider".
Why is MCA referred to the "Single Source" Provider and what does that mean to me?
The Michigan Retirement Investment Consortium ("MRIC") is a group of public sector employers (currently public education employers) that have banded together in a collaborative compliance effort to use their combined financial and other resources to research and determine what they believe are the best 403(b) plan solutions, as well as use their collective buying power to obtain these solutions at a cost that is favorable to participants. On July 21, 2008 MRIC released a Request for Proposal for what it called a "Single Source" Provider, that would be offered to participants as an investment option in addition to the very limited number (5-8) of existing 403(b) investment product and service providers that participating employers would be permitted to offer going forward. MCA was selected as the "Single Source" Provider after an extensive review and evaluation process.
MRIC’s stated intent for the Single 403(b) Investment Provider was to "offer participants a full array of investment options with choices among various risk and return characteristics and competitive fee arrangements so that a participant can invest his or her entire 403(b) account with the single investment provider" (MRIC July 21, 2008 Request for Proposal, page 1). In addition, MRIC’s vision, as stated in the RFP was that "participants see the advantage of the single 403(b) provider option and migrate to that option from the other choices which are currently available."
I have a 457 plan. Can I use one of the MCA Investment Options to help me manage it?
Yes, provided that the 457 plan documents permit it (check with your employer on this), all of the MCA investment options are available under a 457 plan arrangement and, at the same low price.
How much does it cost to use the MCA Investment Options?
It will cost you very little. All participants pay a small amount that is based on the total amount of assets in the accounts of all participants who select one of the MCA Investment Options. The rate per dollar invested goes down as the balances in the accounts go up. This means that the more dollars that are invested by all 403(b)/457(b) participants, the lower the costs will be for everyone. If you are an employee of a Michigan public education employer that has joined the Michigan Retirement Investment Consortium, the maximum amount you will pay on an annual basis is 0.38% and this drops to 0.18% as assets increase. Fee Schedule.
We say that this is the "maximum" because MCA credits certain amounts against fees otherwise payable. These include 12b-1 fees and other fees paid by mutual funds for the privilege of having their funds hosted on our custodian’s system. These credits could become substantial as the amount of assets invested in one of the MCA solutions increase. This could significantly reduce (and potentially even eliminate) fees that would otherwise be payable.
MCA fees are the same regardless of which investment option you choose or how often you change investment selections. Of course, as with all mutual fund investors, you will still pay management and other fees charged by the fund sponsor. You will also pay any plan-related fees charged by your employer.
The stock markets are down and I am afraid that the economy will continue to suffer. Should I continue to defer for retirement anyway?
No one can say for sure when markets will go up or down, by how much or for how long, just as the extent of any economic downturn cannot be predicted with certainty. The key is to have a plan and strategy that is appropriate for your particular circumstances. Once that plan is determined, we advise you to stick with it, even in times of worry and uncertainty. Don’t forget, for long-term investors, market downturns can represent a great buying opportunity, especially for those that invest regularly through salary deferrals. Failing to stick to a plan that is right for you could result in your being too risk-averse, and jeopardize your ability to meet your retirement goals. We discourage participants from making investment decisions based on fear, greed or any other emotion.
I have made my decision to invest my account in one of the MCA Investment Options. What do I do now?
It is very simple: All you need to do is go to www.2my403b.com and follow the prompts. The enrollment and investment selections processes are easy to follow and implement.
Can I roll my existing 403(b) plan account into one of the MCA Investment Options?
Generally, yes. Cash balances can be immediately rolled into one of the MCA Investment Options. The vast majority of non-cash investments such as mutual funds can also be transferred into the MCA Fund Universe option. Annuities must be analyzed on a case-by-case basis. MCA has a specific Account Rollover web page that will walk you through the decisions of if and how you can transfer your non-cash investments to MCA. You will need to sign a form that authorizes the transfer of your existing account to MCA. You can obtain a copy of this by calling us at 1-877-2my403b.
