Lower management fees accompany switch to BlackRock proprietary funds
By Michael Pramik, Ohio Public Employees Retirement System
Feb. 17, 2022 – OPERS is transitioning the bulk of investment options in its Defined Contribution program to a portfolio of proprietary funds managed by global investment company BlackRock.
OPERS’ Defined Contribution portfolio, available to participants in our Member-Directed and Combined plans, includes 10 target date funds and six standalone (formerly core) funds. BlackRock currently oversees all but one of the funds, and the asset allocations within the target date funds were created by OPERS Board of Trustees consultant NEPC. Beginning March 14, the target date funds will be converted to a set of BlackRock LifePath target date funds, while five of the six standalone funds will be invested in the same BlackRock funds as they are currently, but in a different share class.
The other standalone fund, the OPERS Stable Value Fund, will continue to be managed by Invesco and will be rebranded.
OPERS determined we could lower investment fund management fees and increase the flexibility of our investments by making these changes.
All participants will be impacted as the funds they hold will be transitioned to the new funds when the change occurs over the weekend of March 12-13. The OPERS website contains profiles of the funds that will be changing.
Participants in the OPERS Member-Directed and Combined plans direct at least a portion of their investments by choosing from a number of the Defined Contribution investment options.
Target-date funds are a one-stop investment that consider a specific retirement date for the individual investor. As the target date of your retirement approaches, the investments become more conservative. This approach helps to reduce the impact regular market fluctuations have on individual accounts.
OPERS also offers six standalone investment funds ranging from lower-risk, income-oriented options to higher-risk, growth-oriented choices. The five standalone index funds, managed by BlackRock, will be the same options as currently offered. They’ll have new names, reflecting a different BlackRock share class with lower management fees.
Another investment option is the Self-Directed Brokerage Account, available to Member-Directed and Combined plan participants who have a minimum $5,000 balance. It allows them to invest a portion of their portfolio in thousands of mutual funds available through Charles Schwab. As a result of a recent internal program review, we are increasing the amount members can invest in the self-directed account from the current 50 percent of the individual account balance to 90 percent.
Again, these program enhancements will result in the change of all investment options available on the OPERS Defined Contribution platform. Fund balances will be transferred to the corresponding new investment options automatically, so members will not have to take any action.
All members can visit the OPERS website for additional information, including a video about target date funds.
|Current fund name||Future fund name|
|OPERS Stock Index Fund||BlackRock Russell 3000 Index Fund J|
|OPERS Large Cap Index Fund||BlackRock Russell 1000 Index Fund J|
|OPERS Small Cap Index Fund||BlackRock Russell 2000 Index Fund J|
|OPERS Non-U.S. Stock Index Fund||BlackRock MSCI ACWI ex-US Index Fund J|
|OPERS Bond Index Fund||BlackRock U.S. Debt Index Fund M|
|OPERS Stable Value Fund||Invesco Stable Value Trust, Class B1|
|OPERS Target Payout Fund||BlackRock LifePath Index Retirement Fund N|
|OPERS Target 2025 Fund||BlackRock LifePath Index 2025 Fund N|
|OPERS Target 2030 Fund||BlackRock LifePath Index 2030 Fund N|
|OPERS Target 2035 Fund||BlackRock LifePath Index 2035 Fund N|
|OPERS Target 2040 Fund||BlackRock LifePath Index 2040 Fund N|
|OPERS Target 2045 Fund||BlackRock LifePath Index 2045 Fund N|
|OPERS Target 2050 Fund||BlackRock LifePath Index 2050 Fund N|
|OPERS Target 2055 Fund||BlackRock LifePath Index 2055 Fund N|
|OPERS Target 2060 Fund||BlackRock LifePath Index 2060 Fund N|
|OPERS Target 2065 Fund||BlackRock LifePath Index 2065 Fund N|