Meritage Capital, LLC

Transcription

1 Meritage Capital, LLC Date: August 18, 2014 To: All Employees and Participants of the Meritage Capital, LLC 401(k) Profit Sharing Plan From: Meritage Capital, LLC NOTICE OF BLACKOUT PERIOD This Notice is to inform you that the Meritage Capital, LLC 401(k) Profit Sharing Plan (the Plan ) will be changing the Plan s Third Party Administrator, the Investment Advisor, and the Trustee, effective October 1, As a result of these changes, you temporarily will be unable to change contributions percentages in your account, direct or diversify investments in your individual accounts, obtain a loan from the plan, or obtain a distribution from the Plan. This period, during which you will be unable to exercise these rights otherwise available under the plan, is called a blackout period. Whether or not you are planning retirement in the near future, we encourage you to carefully consider how this blackout period may affect your retirement planning, as well as your overall financial plan. The blackout period for the Plan will begin on September 18, 2014 and end on October 6, Note that if there is any delay in JEM s receiving the transfer of records and investments from the current providers, the blackout period may need to be extended. During blackout period you will be unable to direct or diversify the assets held in your plan account. For this reason, it is very important that you review and consider the appropriateness of your current investments in light of your inability to direct or diversify those investments during the blackout period. For your long-term retirement security, you should give careful consideration to the importance of a well-balanced and diversified investment portfolio, taking into account all your assets, income and investments. This Notice of Blackout Period is being provided to you pursuant to Section 101(i) of the Employee Retirement Income Security Act of 1974 (ERISA).

2 Here are other important things you need to know about this Plan: 1. The new Third Party Administrator will be JEM Resource Partners ( JEM ), and the new Trustee holding the assets will be Wilmington Trust. JEM is headquartered in Austin and administers retirement plans and other types of benefit plans that cover over 250,000 employees. 2. The new Investment Advisor that will advise the Plan fiduciaries as to the investments to be offered in the Plan will be TCG Advisors, LP ( TCG ). TCG is an independent investment advisor registered directly with the Securities and Exchange Commission and is an affiliate of JEM. Both TCG and JEM are fee-based companies that do not earn commissions on the investments offered in the Plan. We have enclosed the list of new funds and portfolio options. 3. Your current investments in your account with the Plan will automatically be reinvested in, mapped, to the comparable investment with JEM and Wilmington Trust at the end of the blackout period. A chart showing how the funds will be mapped is enclosed. If you do not want your current investments mapped, you can go on the JEM website after September 10, 2014 and select a different allocation for your current assets and for your future contributions. 4. Your salary deferrals and loan repayments will continue during the Blackout Period. 5. After the Plan is active with JEM, you will be able to access your account on the JEM website at Your User Name will be your Social Security Number (SSN) and your initial Password will be the last four digits of your SSN. You can change these after you log onto the website for the first time. 6. An updated Summary Plan Description will be distributed during the blackout period. The SPD will also be available on the JEM website. You can access it by going to the JEM website, select Plan Information, and then clicking M from the navigation bar to select Meritage Capital, LLC. Under Plan Description, you can find the Summary Plan Description for the Plan. 7. You will receive a final statement from Paychex after the end of blackout period. You will receive your first statement from JEM at the end of the year. JEM and TCG will host an informational meeting at our office on September 10, 2014 at 10am to introduce themselves and do a website demonstration. Meritage Capital, LLC, JEM, TCG and Wilmington Trust want to assure you that your account balance and records are secure.

3 If you have any questions concerning this notice, you should contact Tina Badciong at or (512) , or JEM Resource Partners by at by calling (800) , or locally (Austin) at (512)

4 I. LIST OF NEW FUNDS AND MODEL PORTFOLIOS Participants will be able to choose to manage their own investment allocation by selecting any of the following individual investment options in whatever combination they wish. Information about each of these options will be available on the JEM website. If you would like a one page summary of the Separately Managed Accounts or Mutual Funds listed below before you have access to the JEM website, you can obtain a copy of the summary by sending an to Scott Hauptmann at JEM at shauptmann@jemtpa.com. Information regarding the Portfolio and Target Retirement Date Models are described below. Peer Group Investment Type Name Ticker Large Blend Mid-Cap Blend Small Growth Small Value Separately Managed Account Separately Managed Account Separately Managed Account Separately Managed Account BlackRock Equity Index Fund 6 BlackRock Mid Cap Equity Index Fund 6 BlackRock Russell 2000 Growth Index Fd 6 BlackRock Russell 2000 Value Index Fd 6 Diversified Emerging Mkts Mutual Fund DFA Emerging Markets I DFEMX World Bond Mutual Fund DFA Five-Year Global Fixed-Income I DFGBX Global Real Estate Mutual Fund DFA Global Real Estate Securities I DFGEX Inflation-Protected Bond Mutual Fund DFA Inflation-Protected Securities I DIPSX Foreign Large Value Mutual Fund DFA International Core Equity I DFIEX Foreign Small/Mid Blend Mutual Fund DFA International Small Company I DFISX Intermediate-Term Bond Mutual Fund DFA Investment Grade I DFAPX Foreign Large Blend Mutual Fund DFA Large Cap International I DFALX Ultrashort Bond Mutual Fund DFA One-Year Fixed-Income I DFIHX World Bond Mutual Fund DFA Two-Year Global Fixed-Income I DFGFX Large Value Mutual Fund DFA US Large Cap Value I DFLVX Large Blend Mutual Fund DFA US Large Company I DFUSX

5 Small Blend Mutual Fund DFA US Small Cap I DFSTX Model 401K - Preservation ( TCGP ) Model 401K - Conservative ( TCGC ) Portfolio Models Model 401K - Balanced ( TCGB ) Model 401K - Growth ( TCGG ) Model 401K - Aggressive Growth ( TCGAG ) Model 401k TD 2015 ( TCG2015 ) Target Retirement Date Models Model 401K TD 2020 ( TCG2020 ) Model 401K TD 2025 ( TCG2025 ) Model 401K TD 2030 ( TCG2030 ) Model 401K TD 2040 ( TCG2040 )

6 II. MODEL PORTFOLIOS These model portfolios are managed by TCG Advisors based on the market risk level selected by the participant. A brief description of each portfolio, the expected expense, and the investment allocation is listed below. 1. Preservation Portfolio The Portfolio seeks to preserve the principal amount from potential losses due to financial risks while providing preservation of principal with a reasonable return. Volatility expectations for this portfolio are very low. Weighted Expense Ratio 00.19% Funds in Portfolio Target Percentage DFA Inflation-Protected Securities I 10.00% DFA Investment Grade Instl 50.00% DFA One-Year Fixed-Income I 20.00% DFA Two-Year Global Fixed-Income 20.00% 2. Conservative Portfolio The Portfolio seeks to preserve the principal amount from potential losses due to financial risks while providing a conservative return. Volatility expectations for this portfolio are low. Weighted Expense Ratio 0.24% Funds in Portfolio Target Percentage DFA US Large Company 10.00% DFA US Small Cap I 05.00% DFA Large Cap International I 05.00% DFA Emerging Markets I 05.00% DFA Global Real Estate Securities 05.00% DFA Inflation-Protected Securities 10.00% DFA Investment Grade Instl 40.00% DFA One-Year Fixed-Income I 10.00% DFA Five-Year Global Fixed-Income 10.00%

7 3. Balanced Portfolio The Portfolio seeks to preserve the principal amount from potential losses due to financial risks while providing a moderately conservative return. Volatility expectations for this portfolio are moderate. Weighted Expense Ratio 0.25% Funds in Portfolio Target Percentage DFA US Large Company 20.00% DFA US Large Cap Value I 05.00% DFA US Small Cap I 05.00% DFA Large Cap International 07.50% DFA International Core Equity I 05.00% DFA Emerging Markets I 07.50% DFA Global Real Estate Securities 05.00% DFA Inflation-Protected Securities I 05.00% DFA Investment Grade Instl 30.00% DFA Five-Year Global Fixed-Income I 05.00% DFA Two-Year Global Fixed-Income I 05.00% 4. Growth Portfolio The Portfolio seeks to preserve the principal amount from potential losses due to financial risks while providing growth. Volatility expectations for this portfolio are high. Weighted Expense Ratio 0.29% Funds in Portfolio Target Percentage DFA US Large Company 25.00% DFA US Large Cap Value I 07.50% DFA US Small Cap I 07.50% DFA Large Cap International I 10.00% DFA International Core Equity I 05.00% DFA International Small Company I 05.00% DFA Emerging Markets I 10.00% DFA Global Real Estate Securities 05.00% DFA Investment Grade Instl 20.00% DFA Five-Year Global Fixed-Income I 05.00%

8 5. Aggressive Growth Portfolio The Portfolio seeks to preserve the principal amount from potential losses due to financial risks while providing aggressive growth. Volatility expectations for this portfolio are very high. Weighted Expense Ratio 0.33% Funds in Portfolio Target Percentage DFA US Large Company 30.00% DFA US Large Cap Value I 10.00% DFA US Small Cap I 10.00% DFA Large Cap International I 10.00% DFA International Core Equity I 05.00% DFA International Small Company I 05.00% DFA Emerging Markets I 20.00% DFA Global Real Estate Securities 05.00% DFA Five-Year Global Fixed Income I 05.00% III. TARGET RETIREMENT DATE MODELS These model portfolios are managed by TCG Advisors based on the targeted retirement date selected by the participant. The following Target Dates will be available initially in the Plan: IV. FUND MAPPING

9 If you are currently invested in this fund: Fidelity Advisor government Income T Fidelity Advisor Intermediate Bond T Fidelity Advisor Strategic Income T Fidelity Advisor Total Bond T Your account balance & future contributions will be moved to this investment: DFA Inflation-Protected Securities I DFA Two-Year Global Fixed-Income I DFA Five-Year Global Fixed-Income I DFA Investment Grade I Fidelity Advisor Balanced T 401K - Growth ( TCGG ) Fidelity Advisor Dividend Growth T BlackRock Equity Index Fund 6 Fidelity Advisor Equity Growth T BlackRock Equity Index Fund 6 Fidelity Advisor Equity Income T DFA US Large Cap Value I Fidelity Advisor Freedom 2005 T Fidelity Advisor Freedom 2010 T 401k TD 2015 ( TCG2015 ) Fidelity Advisor Freedom 2015 T Fidelity Advisor Freedom 2020 T 401K TD 2020 ( TCG2020 ) Fidelity Advisor Freedom 2025 T 401K TD 2025 ( TCG2025 ) Fidelity Advisor Freedom 2030 T 401K TD 2030 ( TCG2030 ) Fidelity Advisor Freedom 2035 T Fidelity Advisor Freedom 2040 T Fidelity Advisor Freedom 2045 T 401K TD 2040 ( TCG2040 ) Fidelity Advisor Freedom 2050 T Fidelity Advisor Freedom Income T 401K - Balanced ( TCGB ) Fidelity Advisor Growth Opportunities T BlackRock Equity Index Fund 6

10 Fidelity Advisor Mid Cap li T BlackRock Mid Cap Equity Index Fund 6 Fidelity Advisor Overseas T Fidelity Advisor Small Cap T Fidelity Advisor Strategic Dividend & Income T Fidelity Prime Fund; Daily Money Class DFA International Core Equity I DFA US Small Cap I DFA US Large Cap Value I DFA One-Year Fixed-Income I