Understanding important upcoming changes to the County of Sacramento Deferred Compensation Plan

Transcription

1 Understanding important upcoming changes to the County of Sacramento Deferred Compensation Plan

2 Agenda What is changing and when? What is staying the same? What does the new fund lineup look like? What are some Frequently Asked Questions?

3 What is changing? Anew, simplified investment lineup is being introduced to the County of Sacramento 457(b) and 401(a) Plans. Effective November 1, 2017: New Vanguard Target Date options will be added. New Core options will be available, with a diverse mixture of funds designed to provide a diverse mixture of investment opportunity while reducing the number of investment options that participants need to review when evaluating their retirement investments.

4 What does the new fund lineup look like? The new default investment option is the Vanguard Target Date trust that has a retirement date closest to the year you might retire and assuming a retirement age of 65, at the direction of Sacramento County.

5 What does the new fund lineup look like? The Core investment options give you a choice of mutual funds that cover the major asset classes: stocks, bonds, and short term investments. These investment options give you the flexibility to build your own strategy to meet your needs. MORNINGSTAR CATEGORY NEW INVESTMENT OPTIONS TICKER SYMBOL Money Market Taxable Fidelity Investments Money Market Government Portfolio Class I FIGXX Stable Value Wells Fargo Stable Value Fund E N/A** Intermediate Term Bond Metropolitan West Total Return Bond Fund Plan Class Vanguard Total Bond Market Index Fund Institutional Shares MWTSX VBTIX Large Value JPMorgan Equity Income Fund Class R6 OIEJX Large Blend Parnassus Core Equity Fund Institutional Shares Vanguard Institutional Index Fund Institutional Shares PRILX VINIX Mid Cap Blend Vanguard Extended Market Index Fund Institutional Share VIEIX Small Blend JPMorgan Small Cap Equity Fund Class R VSENX Large Growth Fidelity Contrafund K FLCNX Foreign Large Blend Oakmark International Fund Class Institutional Vanguard Total International Stock Index Fund Institutional Shares OANIX VTSNX ** Wells Fargo Stable Value Fund E does not have a Ticker Symbol. Beginning on November 1, 2017, at the start of the Re Enrollment Election period, you will be able to research these investment options within or by calling

6 What is staying the same? Your contribution percentage on file remains the same, unless you choose to adjust it. If you are in PAS W, you will remain invested in the same model portfolio, with the same investment objective that you currently have. As part of this transition, the PAS W account models will be updated to use the new County of Sacramento investment lineup and your PAS W account balances will be reallocated accordingly. If you are in BrokerageLink or are a part time or seasonal employee, your investments will remain unchanged. If you are invested in the Managed Income Portfolio II Class 1 fund, when the put expires in March 2018, assets will be transferred to the Vanguard Target Date trust that has a retirement date closest to the year you might retire and assuming a retirement age of 65 (unless you make an affirmative investment election.) Fidelity Portfolio Advisory Service at Work is a service of Strategic Advisers, Inc., a registered investment adviser and a Fidelity Investments company. This service provides discretionary money management for a fee.

7 What are the key dates I need to be aware of? November Re Enrollment Election period opens During this Re Enrollment Election period you can: Choose your new investment elections for contributions beginning in January, These are also the investments into which your account assets will transfer as part of this transition to the new County of Sacramento Deferred Compensation investment lineup. Log on to Fidelity NetBenefits at or call the Fidelity Retirement Benefits Line at Review and/or update your beneficiaries at this time. You can do this online by logging on to Review and/or update your account statement delivery preference.

8 What are the key dates I need to be aware of? January p.m. PT (4 p.m. ET) Early Choice Election Window ends This is the last day to select investment options before the transition. If you do not select any investment options before 1 p.m. Pacific time (4 p.m. Eastern time) on January 4, 2018, your Sacramento County Deferred Compensation Plan assets and future contributions will be invested in the Vanguard Target Date trust with a retirement date closest to the year you might retire, based on your date of birth and assuming a retirement age of 65. To allow all transition activities to finish, your next opportunity to make an investment choice in your account will be after the transition to the new investment lineup is complete on January 16, 2018.

9 What are the key dates I need to be aware of? January Transition Begins During this time: You can log in and view your existing Plan account, but you cannot change your future allocations. Future Contributions begin posting into the investment choices made within the Re Enrollment Election period. For participants who did not make an investment choice during the Re Enrollment Election period, contributions begin posting into a Vanguard Target Date trust. PAS W account models are updated to use the new County of Sacramento investment lineup and PAS W account balances are reallocated accordingly.

10 What are the key dates I need to be aware of? January Account investments are reallocated to reflect the new County of Sacramento investment lineup. Existing investments are reallocated according to the participant s investment choices made during the Re Enrollment Election period. For participants who did not make an investment choice during the Re Enrollment Election period, existing investments are allocated to a Vanguard Target Date trust. Please note: The Managed Income Portfolio II Class 1 will only be reallocated for participants who selected one or more investment options during the Re Enrollment Election period. Fidelity BrokerageLink accounts are excluded from reallocation. The dates shown are based on the timing and accuracy of a variety of factors, including the transfer of data, receipt of instructions, and receipt of assets. Changes in any of these factors may result in changes to the dates and timing, including the dates on which, and thus the prices at which, assets in your account are sold and/or reinvested.

11 What are the key dates I need to be aware of? January Transition is complete You may now update your future investment choices, or request exchanges among investment options by visiting The Retirement Plan Service Center and Fidelity NetBenefits website are open for all services. Log on to Fidelity NetBenefits at or call Remember that if you do not have any investment elections on file, your account balance will be invested in a Vanguard Target Date trust, based on your date of birth and an assumed retirement age of 65.

12 What are some frequently asked questions? Why is the County of Sacramento making these changes? The County has improved its ability to monitor and review the performance of the funds by decreasing the number of funds available. Research has shown that excessive choice in a retirement plan causes many participants to make adverse portfolio choices or postpone decision making regarding their investments. By consolidating contributions into fewer funds with less redundancy, the County can increase its purchasing power and obtain institutional pricing with lower overall expense ratios for the collective benefit of all participants.

13 What are some frequently asked questions? How will the new investment structure be beneficial to me? - The new investment structure is designed to provide you with a broad range of distinctive investment options, but not so many that, when faced with choices, you will have a difficult time structuring an investment portfolio. You will be able to select a path that is appropriate for you given your: Investment knowledge Time for managing your own investment portfolios Tolerance for risk

14 What are some frequently asked questions? Does the investment simplification mean there will be fewer investment choices? - The core investment menu is being streamlined but will still include twelve diversified investment options to choose from. This is in addition to the Vanguard Target Date trust funds. The self directed BrokerageLink account will give you access to a universe of thousands of mutual funds from hundreds of mutual fund companies. This feature will appeal to those participants who want the flexibility to invest outside of the core line up of funds.

15 What are some frequently asked questions? Will the Self Directed BrokerageLink account have extra costs? No annual account service fee. Some funds may have transaction fees or sales loads. You can search for funds that do not have these fees associated with them. You can avoid these charges by using funds in the core lineup, many of which will have low, institutional expense ratios.

16 What are some frequently asked questions? I m retired. How will my account be affected? Current retirees will be affected the same as all participants.

17 What are some frequently asked questions? Who do I call if I have questions? Fidelity Investments: Representatives are available Monday through Friday, from 8 a.m. to 9 p.m. Eastern time. You can also access your account as well as online tools and resources by visiting You can schedule an appointment to meet with a Fidelity Retirement Planner before, during or after these changes. To do so, call or visit

18 Before investing in any mutual fund, consider the investment objectives, risks, charges, and expenses. Contact Fidelity for a prospectus or, if available, a summary prospectus containing this information. Read it carefully. Investing involves risk, including risk of loss. BrokerageLink includes investments beyond those in your plan s lineup. The plan fiduciary neither evaluates nor monitors the investments available through BrokerageLink. It is your responsibility to ensure that the investments you select are suitable for your situation, including your goals, time horizon, and risk tolerance. See the fact sheet and commission schedule for applicable fees and risks. Fidelity Brokerage Services LLC, Member NYSE, SIPC, 900 Salem Street, Smithfield, RI FMR LLC. All rights reserved