Section 70.08. Investment providers.

 

(1)  Investment providers offering an investment product through the primary plan or an alternate plan shall be selected by the board based on the investment product categories and criteria established under s. ETF 70.03 (8) and (9) . All contracts with investment providers of the primary plan or an alternate plan shall be approved by the board and signed by the board chair or designee.

(2)  Investment providers shall not be allowed to assess any direct or indirect costs to members.

(3)  Based on the board's review required under s. ETF 70.03 (10) , the board may determine that an investment product offered by the primary plan or an alternate plan is no longer acceptable for inclusion in the program. If the board decides to remove an investment product from the plan as a result of the product's failure to meet the criteria as established under s. ETF 70.03 (9) , the product shall be phased out of the primary or alternate plan in a 2-step process over a 12 month period that shall commence on the first business day of the sixth month following the board's decision, as follows:

(a) Phase 1 of the investment product termination process shall last for 6 months during which time current members and employees newly enrolling in the primary or alternate plan shall be informed in writing that the terminating investment product does not meet board's evaluation criteria and that this investment product is not open to new enrollments.

1. Any members already deferring to the terminating investment product shall be informed in writing that they need to redirect future deferrals from this product to an alternative investment product offered by the primary or alternate plan by notifying the administrator of their new investment choice.

2. At the end of the 6-month period, the board shall instruct the administrator to automatically redirect any member's deferrals that have not been redirected to an alternative investment product from the terminated product into a board designated alternative investment product offered by the primary or alternate plan.

3. Existing member account balances shall be allowed to remain in the terminating investment product during this period.

(b) Phase 2 of the investment product termination process immediately follows the first 6-month period and provides an additional 6-month period during which time members shall transfer existing balances from the terminating product to another investment product offered by the primary or alternate plan.

1. If at the end of the 6-month period, any member has failed to move a remaining account balance from the terminated fund, the board shall instruct the administrator to automatically move that member's account balance into a board designated alternative investment product offered by the primary or alternate plan.

2. During the phase out process and at any time prior to the end of the second phase, the board may re-examine the performance of the terminating investment product to determine if continued plan participation is justified.

History: Cr. Register, June, 1992, No. 438 , eff. 7-1-92; CR 08-016 : am. (3) (intro.) Register August 2008 No. 632 , eff. 9-1-08; correction in (1), (3), made under s. 13.92 (4) (b) 7. , Stats., Register July 2012 No. 679 , eff. 8-1-12.