Subject: Enhancements to your University of North Texas System Tax-Sheltered Annuity 403(b) and Texas ORP 403(b) Retirement Plans.

Transcription

1 VALIC Retirement Services Company P.O. Box Amarillo, T VALIC.com August 28, 2018 Subject: Enhancements to your University of North Texas System Tax-Sheltered Annuity 403(b) and Texas ORP 403(b) Retirement Plans. Dear University of North Texas System Retirement Plan Participant: University of North Texas System is committed to offering a variety of quality investment options in the University of North Texas System 403(b) and Texas ORP 403(b) Retirement Plans. The decision to provide this enhancement was determined after an extensive review of the current investment options by the UNTS Retirement Project Steering Committee, as well as CAPTRUST, a leading independent and objective investment advisory firm contracted by UNTS to help guide this process. After assessing multiple factors including, but not limited to, fees, expenses, platform flexibility and performance orientation, it was recommended to make the following enhancements to your retirement Plan(s). Effective October 1, 2018, the following changes will be made to the investments in the Plans: Enhancing the investment line-up by adding low cost share class mutual fund investments in the Plans (see the New Investment Options in the table below). Leveling the administrative fees to participants. New Investment Options Effective 09/28/2018, the new investment options will be added to the investment lineup and available for investment in your UNTS retirement plan. The new investment options are listed below: Asset Class New Investment Options Intermediate-Term Bond Vanguard Total Bond Market Index I VBTI Target-Date 2015 Vanguard Instl Trgt Retire 2015 Instl VITV Target-Date 2020 Vanguard Instl Trgt Retire 2020 Instl VITW Target-Date 2025 Vanguard Instl Trgt Retire 2025 Instl VRIV Target-Date 2030 Vanguard Instl Trgt Retire 2030 Instl VTTW Target-Date 2035 Vanguard Instl Trgt Retire 2035 Instl VITF TL501V17 VALIC is The Variable Annuity Life Insurance Company. VALIC Retirement Services Company is a wholly owned subsidiary o f VALIC. Securities and investment advisory services offered through VALIC Financial Advisors, Inc. ( VFA ), member FINRA, SIPC and an SEC-registered investment advisor. VFA registered representatives offer securities and other products under retirement plans and IRAs, and to clients outside of such arrangements. Annuities issued by The Variable Annuity Life Insurance Company ( VALIC ). Variable annuities distributed by its affiliate, AIG Capital Services, Inc. ( ACS ), member FINRA. VALIC, VFA and ACS are members of American International Group, Inc. ( AIG ). Page 1 of 4

2 Target-Date 2040 Vanguard Instl Trgt Retire 2040 Instl VIRS Target-Date 2045 Vanguard Instl Trgt Retire 2045 Instl VITL Target-Date 2050 Vanguard Instl Trgt Retire 2050 Instl VTRL Target-Date 2055 Vanguard Instl Trgt Retire 2055 Instl VIVL Target-Date Vanguard Instl Trgt Retire 2060 Instl VILV Target-Date Vanguard Instl Trgt Retire 2065 Instl VSF Target-Date Retirement Vanguard Instl Trgt Retire Instl VITR Moderate Allocation Vanguard Wellington VWEN Large Blend Vanguard Institutional Index I VINI Mid-Cap Blend Vanguard Extended Market Index Instl VIEI Foreign Large Blend Vanguard Total Intl Stock Index I VTSN Money Market Vanguard Federal Money Market Investor VMF Intermediate-Term Bond Prudential Total Return Bond Q PTRQ Large Value MFS Value R6 MEIK Large Growth T. Rowe Price Blue Chip Growth I TBCI Mid-Cap Value JPMorgan Mid Cap Value R6 JMVY Mid-Cap Growth MFS Mid Cap Growth R6 OTCK Foreign Large Growth American Funds Europacific Growth R6 Small Value GSSU Goldman Sachs Small Cap Value R6 GSSU Small Growth Goldman Sachs Small Cap Growth R6 GINU Real Estate Principal Real Estate Securities R6 PFRS Socially Responsible Fund Vanguard FTSE Social Index I VFTN The funds listed above are all zero-revenue funds, meaning these are mutual funds with share classes that do not pay service fees, 12b-1 fees, sub-transfer agency fees, or other revenue to the plan s service providers, making the expense ratios of such funds generally lower. By adding these funds to your UNTS lineup, expense ratios become more transparent to you and you have the ability to self-select from any number of these funds starting 09/28/2018. Example: Current Mutual Fund Total Expense Ratio Revenue Sharing Net Expense ratio to Participant T. Rowe Price New Income R RRNI 1.15% 0.65% 0.50% New Mutual Fund Total Expense Ratio Revenue Sharing Net Expense ratio to Participant Prudential Total Return Bond Q PTRQ 0.41% 0.00% 0.41% Revenue sharing costs are added to mutual funds to help offset the administrative cost of a retirement plan. By adding funds with no revenue sharing arrangements, the expense ratios and administrative fees become more transparent and easier to understand. Change to Administrative Fee Effective October 1, 2018, in an additional effort to make the administrative cost of the Plans more transparent, University of North Texas System will implement the following retirement plan fee arrangement with VALIC: The total administrative fee will be reduced to 0.30% annually or 0.075% quarterly on retirement fund assets. Page 2 of 4

3 VALIC Retirement Services Company P.O. Box Amarillo, T VALIC.com By providing the enhancement to the mutual fund share classes available in the Plans and implementing leveling of fees, the total cost associated with participating in the Plan has been reduced, is more transparent, and equitable across all participants. Fund Mapping Effective 09/28/2018 Effective 09/28/2018 the following fund will be mapped accordingly: University of North Texas System Expense Ratio Current Fund Name & Share Class Current New New Fund Name & Share Class RERC American Funds EuroPacific Growth R3 1.14% 0.50% American Funds EuroPacific Growth R6 Fund Mapping Effective 01/1/2018 The effective date of fund mapping of the existing fund line-up to the New Investment Options listed above will become effective 01/1/2019. For your reference, we have enclosed an investment performance chart listing the new funds in the plan as well as a full mapping schedule. The default funds for the Plans will be the Vanguard target retirement date funds listed above. These are a professionally managed suite of investment options that automatically become more conservative as the targeted retirement date approaches. This gives participants the ability to select one investment in the suite for their retirement plan contributions and allows them the ability to select a target retirement date fund that aligns closest with their targeted retirement year. Participants who would like to make changes to their investment elections prior to these changes being implemented may do so by phone by calling VALIC toll free at , Monday through Friday, between 8 a.m. and 9 p.m. (ET) to speak with a Customer Service Representative, with our on-site VALIC advisor, or online at Sincerely, Contact Center Enclosures: Mapping Schedule TL501V17 VALIC is The Variable Annuity Life Insurance Company. VALIC Retirement Services Company is a wholly owned subsidiary o f VALIC. Securities and investment advisory services offered through VALIC Financial Advisors, Inc. ( VFA ), member FINRA, SIPC and an SEC-registered investment advisor. VFA registered representatives offer securities and other products under retirement plans and IRAs, and to clients outside of such arrangements. Annuities issued by The Variable Annuity Life Insurance Company ( VALIC ). Variable annuities distributed by its affiliate, AIG Capital Services, Inc. ( ACS ), member FINRA. VALIC, VFA and ACS are members of American International Group, Inc. ( AIG ). Page 3 of 4

4 Investors should carefully consider the investment objectives, risks, fees, charges, and expenses before investing. This and other important information is contained in the prospectus, which can be obtained from your financial professional or visit Sign in and select your plan. Click on the Fund information tab. You can vie w the Fund performance for each available fund in the plan. You can also request a copy of a prospectus by calling Read the prospectuses carefully before investing. Page 4 of 4

5 University of North Texas - ORP & TSA GA & 1366 Fund Additions Effective 9/28/2018 New Fund Additions - No Assets Mapping Asset Class Recommended Investment Intermediate-Term Bond Vanguard Total Bond Market Index I VBTI Target-Date 2015 Vanguard Instl Trgt Retire 2015 Instl VITV Target-Date 2020 Vanguard Instl Trgt Retire 2020 Instl VITW Target-Date 2025 Vanguard Instl Trgt Retire 2025 Instl VRIV Target-Date 2030 Vanguard Instl Trgt Retire 2030 Instl VTTW Target-Date 2035 Vanguard Instl Trgt Retire 2035 Instl VITF Target-Date 2040 Vanguard Instl Trgt Retire 2040 Instl VIRS Target-Date 2045 Vanguard Instl Trgt Retire 2045 Instl VITL Target-Date 2050 Vanguard Instl Trgt Retire 2050 Instl VTRL Target-Date 2055 Vanguard Instl Trgt Retire 2055 Instl VIVL Target-Date Vanguard Instl Trgt Retire 2060 Instl VILV Target-Date Vanguard Instl Trgt Retire 2065 Instl VSF Target-Date Retirement Vanguard Instl Trgt Retire Instl VITR Moderate Allocation Vanguard Wellington VWEN Large Blend Vanguard Institutional Index I VINI Mid-Cap Blend Vanguard Extended Market Index Instl VIEI Foreign Large Blend Vanguard Total Intl Stock Index I VTSN Money Market Vanguard Federal Money Market Investor VMF Intermediate-Term Bond Prudential Total Return Bond Q PTRQ Large Value MFS Value R6 MEIK Large Growth T. Rowe Price Blue Chip Growth I TBCI Mid-Cap Value JPMorgan Mid Cap Value R6 JMVY Mid-Cap Growth MFS Mid Cap Growth R6 OTCK Foreign Large Growth American Funds Europacific Growth R6 Small Value GSSU Goldman Sachs Small Cap Value R6 GSSU Small Growth Goldman Sachs Small Cap Growth R6 GINU Real Estate Principal Real Estate Securities R6 PFRS Socially Responsible Fund Vanguard FTSE Social Index I VFTN

6 University of North Texas - ORP & TSA GA & 1366 Fund Mapping as of September 28, 2018 Current Fund Line-up Approved/Proposed Fund Line-up American Funds Europacific Growth R3 RERC American Funds Europacific Growth R6

7 University of North Texas - ORP Fund Mapping as of January 1, 2019 Current Fund Line-up Approved/Proposed Fund Line-up International / Global Equity International / Global Equity Templeton Foreign R TEFR American Funds Europacific Growth R6 BlackRock Advantage International R BGOR American Funds Europacific Growth R6 Janus Henderson Overseas S JIGR American Funds Europacific Growth R6 Lord Abbett International Equity R3 LICR American Funds Europacific Growth R6 MFS Research International R3 MRSH American Funds Europacific Growth R6 American Funds Europacific Growth R3 RERC American Funds Europacific Growth R6 MFS International New Discovery R3 MIDH Wells Fargo Emerging Markets Equity A EMGA Oppenheimer Developing Markets R ODVN American Funds Capital World Gr&Inc R3 RWIC Specialty Specialty Calvert Global Energy Solutions A CGAE BlackRock Natural Resources Inv A MDGR Wells Fargo Precious Metals A EKWA Virtus Duff & Phelps Real Estate Secs A PHRA Principal Real Estate Securities Fd R-6 PFRS Fidelity Advisor Real Estate M FHET Principal Real Estate Securities Fd R-6 PFRS Prudential Global Real Estate A PURA Small Cap Small Cap Columbia Select Smaller-Cap Value Adv CSPR Vanguard Extended Market Index Instl VIEI Invesco Small Cap Equity R SMER Vanguard Extended Market Index Instl VIEI Prudential Jennison Small Company A PGOA Goldman Sachs Small Cap Growth R6 GINU ClearBridge Small Cap Growth A SASM Goldman Sachs Small Cap Growth R6 GINU Mid Cap Mid Cap Heartland Select Value Investor HRSV JPMorgan Mid Cap Value R6 JMVY Janus Henderson Mid Cap Value S JMVI JPMorgan Mid Cap Value R6 JMVY Virtus Ceredex Mid-Cap Value Equity A SAMV JPMorgan Mid Cap Value R6 JMVY Invesco Mid Cap Core Equity R GTAR Vanguard Extended Market Index Instl VIEI ClearBridge Mid Cap R LMRE Vanguard Extended Market Index Instl VIEI Fidelity Advisor Leveraged Co Stk M FLST MFS Mid Cap Growth R6 OTCK

8 Prudential Jennison Mid-Cap Growth A PEEA MFS Mid Cap Growth R6 OTCK Columbia Mid Cap Growth A CBSA MFS Mid Cap Growth R6 OTCK Domestic Large Cap Domestic Large Cap Oppenheimer Value A CGRW MFS Value R6 MEIK BlackRock Basic Value Inv A MDBA MFS Value R6 MEIK American Funds American Mutual R3 RMFC MFS Value R6 MEIK Oppenheimer Rising Dividends R ONRD Vanguard Institutional Index I VINI MFS Massachusetts Investors Tr R3 MITH Vanguard Institutional Index I VINI Franklin Growth Opportunities R FKAR T. Rowe Price Blue Chip Growth I TBCI American Funds Growth Fund of Amer R3 RGAC T. Rowe Price Blue Chip Growth I TBCI American Funds New Economy R3 RNGC T. Rowe Price Blue Chip Growth I TBCI MFS Massachusetts Inv Gr Stk R3 MIGH T. Rowe Price Blue Chip Growth I TBCI Socially Responsible Socially Responsible Gabelli ESG AAA SRIG Vanguard FTSE Social Index I VFTN Alger Responsible Investing I AGIF T. Rowe Price Blue Chip Growth I TBCI Calvert Equity A CSIE T. Rowe Price Blue Chip Growth I TBCI Index Index Dreyfus S&P 500 Index PEOP Vanguard Institutional Index I VINI Lifestyle/Target Date * Lifestyle/Target Date * T. Rowe Price Retirement 2010 R RRTA Vanguard Instl Tgt Retire Inc Instl VITR T. Rowe Price Retirement 2020 R RRTB Vanguard Instl Tgt Retire 2020 Instl VITW T. Rowe Price Retirement 2030 R RRTC Vanguard Instl Tgt Retirement 2030 Instl VTTW T. Rowe Price Retirement 2040 R RRTD Vanguard Instl Tgt Retirement 2040 Instl VIRS Balanced Balanced Janus Henderson Balanced S JABR Vanguard Wellington Admiral VWEN Columbia Balanced A CBLA Vanguard Wellington Admiral VEWN MFS Total Return R3 MSFH Vanguard Wellington Admiral VEWN BlackRock Global Allocation Inv A MDLO Map by age to Vanguard inst Target Retirement Non-US Govt Bonds Dreyfus International Bond A DIBA Prudential Total Return Bond Q PTRQ Fidelity Advisor Emerging Mkts Income M FAEM Prudential Total Return Bond Q PTRQ Corporate Bonds Lord Abbett Total Return R3 LTRR Prudential Total Return Bond Q PTRQ PIMCO Total Return R PTRR Prudential Total Return Bond Q PTRQ T. Rowe Price New Income R RRNI Prudential Total Return Bond Q PTRQ Invesco High Yield A AMHY Prudential Total Return Bond Q PTRQ Franklin High Income R FHIR Prudential Total Return Bond Q PTRQ Government Bonds / Inflation- Protected American Century Government Bond A ABTA Prudential Total Return Bond Q PTRQ American Century Inflation Adjs Bond A AIAV Prudential Total Return Bond Q PTRQ

9 PIMCO Real Return R PRRR Prudential Total Return Bond Q PTRQ Money Market *** Money Market *** American Century US Government MMkt Inv TCR Vanguard Federal Money Market Investor VMF Fixed Account ** Fixed Account ** VALIC Fixed Interest Option - VALIC Fixed Interest Option - University of North Texas - TSA Fund Mapping as of January 1, 2019 Current Fund Line-up Approved/Proposed Fund Line-up International / Global Equity International / Global Equity BlackRock Advantage International R BGOR American Funds Europacific Growth R6 Janus Henderson Overseas S JIGR American Funds Europacific Growth R6 Lord Abbett International Equity R3 LICR American Funds Europacific Growth R6 MFS Research International R3 MRSH American Funds Europacific Growth R6 American Funds Europacific Growth R3 RERC American Funds Europacific Growth R6 MFS International New Discovery R3 MIDH Wells Fargo Emerging Markets Equity A EMGA Oppenheimer Developing Markets R ODVN American Funds Capital World Gr&Inc R3 RWIC Specialty Specialty Calvert Global Energy Solutions A CGAE BlackRock Natural Resources Inv A MDGR Wells Fargo Precious Metals A EKWA Virtus Duff & Phelps Real Estate Secs A PHRA Principal Real Estate Securities Fd R-6 PFRS Fidelity Advisor Real Estate M FHET Principal Real Estate Securities Fd R-6 PFRS Prudential Global Real Estate A PURA Small Cap Small Cap Heartland Value Investor HRTV Goldman Sachs Small Cap Value R6 GSSU Columbia Select Smaller-Cap Value Adv CSPR Vanguard Extended Market Index Instl VIEI Invesco Small Cap Equity R SMER Vanguard Extended Market Index Instl VIEI Prudential Jennison Small Company A PGOA Goldman Sachs Small Cap Growth R6 GINU ClearBridge Small Cap Growth A SASM Goldman Sachs Small Cap Growth R6 GINU

10 Mid Cap Mid Cap Heartland Select Value Investor HRSV JPMorgan Mid Cap Value R6 JMVY Janus Henderson Mid Cap Value S JMVI JPMorgan Mid Cap Value R6 JMVY Virtus Ceredex Mid-Cap Value Equity A SAMV JPMorgan Mid Cap Value R6 JMVY ClearBridge Mid Cap R LMRE Vanguard Extended Market Index Instl VIEI Fidelity Advisor Leveraged Co Stk M FLST MFS Mid Cap Growth R6 OTCK Prudential Jennison Mid-Cap Growth A PEEA MFS Mid Cap Growth R6 OTCK Columbia Mid Cap Growth A CBSA MFS Mid Cap Growth R6 OTCK Domestic Large Cap Domestic Large Cap Oppenheimer Value A CGRW MFS Value R6 MEIK BlackRock Basic Value Inv A MDBA MFS Value R6 MEIK American Funds American Mutual R3 RMFC MFS Value R6 MEIK Oppenheimer Rising Dividends R ONRD Vanguard Institutional Index I VINI MFS Massachusetts Investors Tr R3 MITH Vanguard Institutional Index I VINI Franklin Growth Opportunities R FKAR T. Rowe Price Blue Chip Growth I TBCI American Funds Growth Fund of Amer R3 RGAC T. Rowe Price Blue Chip Growth I TBCI American Funds New Economy R3 RNGC T. Rowe Price Blue Chip Growth I TBCI MFS Massachusetts Inv Gr Stk R3 MIGH T. Rowe Price Blue Chip Growth I TBCI Socially Responsible Socially Responsible Gabelli ESG AAA SRIG Vanguard FTSE Social Index I VFTN Index Index Dreyfus S&P 500 Index PEOP Vanguard Institutional Index I VINI Lifestyle/Target Date * Lifestyle/Target Date * T. Rowe Price Retirement 2010 R RRTA Vanguard Instl Tgt Retire Inc Instl VITR T. Rowe Price Retirement 2020 R RRTB Vanguard Instl Tgt Retire 2020 Instl VITW T. Rowe Price Retirement 2030 R RRTC Vanguard Instl Tgt Retirement 2030 Instl VTTW T. Rowe Price Retirement 2040 R RRTD Vanguard Instl Tgt Retirement 2040 Instl VIRS T. Rowe Price Retirement 2050 R RRTF Vanguard Instl Tgt Retire 2050 Instl VTRL Balanced Balanced Janus Henderson Balanced S JABR Vanguard Wellington Admiral VWEN Columbia Balanced A CBLA Vanguard Wellington Admiral VEWN MFS Total Return R3 MSFH Vanguard Wellington Admiral VEWN BlackRock Global Allocation Inv A MDLO Map by age to Vanguard inst Target Retirement Non-US Govt Bonds Dreyfus International Bond A DIBA Prudential Total Return Bond Q PTRQ Fidelity Advisor Emerging Mkts Income M FAEM Prudential Total Return Bond Q PTRQ Corporate Bonds Lord Abbett Total Return R3 LTRR Prudential Total Return Bond Q PTRQ PIMCO Total Return R PTRR Prudential Total Return Bond Q PTRQ T. Rowe Price New Income R RRNI Prudential Total Return Bond Q PTRQ Invesco High Yield A AMHY Prudential Total Return Bond Q PTRQ Franklin High Income R FHIR Prudential Total Return Bond Q PTRQ Government Bonds / Inflation- Protected American Century Government Bond A ABTA Prudential Total Return Bond Q PTRQ

11 American Century Inflation Adjs Bond A AIAV Prudential Total Return Bond Q PTRQ PIMCO Real Return R PRRR Prudential Total Return Bond Q PTRQ Money Market *** Money Market *** American Century US Government MMkt Inv TCR Vanguard Federal Money Market Investor VMF Fixed Account ** Fixed Account ** VALIC Fixed Interest Option - VALIC Fixed Interest Option - You could lose money by investing in the Fund. Although the Fund seeks to preserve the value of your investment at $1.00 per share, it cannot guarantee it w ill do so. An investment in the Fund is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. The Fund's sponsor has no legal obligation to provide financial support to the Fund, and you should not ex pect that the sponsor will provide financial support to the Fund at any time. * The principal value of an investment in a target date fund is not guaranteed at any time including at or after the target maturity date. The target date is the approximate date w hen investors plan to start w ithdrawing money. The fund w ill gradually shift its emphasis from more aggressive investments to more conservative ones based on its target date. Some target date funds maintain a substantial allocation to equities both prior to and after the target date, w hich can result in greater volatility over shorter time periods. If an investor plans to retire significantly earlier or later than age 65, the funds may not be an appropriate investment even if the investor is retiring on or near the target date. Read the prospectus carefully before investing. Generally, higher potential returns involve greater risk and short-term volatility. For example, small-cap, mid-cap, sector and emerging funds can experience significant price fluctuation due to business risks and adverse political developments. International and global f unds can experience price fluctuation due to changing market conditions, currency values, and economic and political climates. High-yield bond funds, which invest in bonds that have low er ratings, typically experience price fluctuation and a greater risk of loss of principal and income than w hen investing directly in U.S. government securities such as U.S. Treasury bonds and bills, w hich are guaranteed by the government for repayment of principal and inter est if held to maturity. Fund shares are not insured and are not backed by the U.S. government, and their value and yield w ill vary w ith market conditions. Interest rates and bond prices typically move inversely to each other; therefore, as with any bond fund, the value of an investment in this fund may go up if interest rates fall, and vice versa. Mortgage-related funds' underlying mortgages are more likely to be prepaid during periods of declining interest rates, w hich could hur t the fund's share price or yield and may be prepaid more slow ly during periods of rapidly rising interest rates, which might lengthen the fund's expected maturity. Investors should carefully assess the risks associated with an investment in the fund. Investors should carefully consider the investment objectives, risks, fees, charges and expenses before investing. This and other important information is contained in the prospectus, which can be obtained from your financial professional or at Enter your Group ID in the Login field and click Continue. You can also request a copy by calling Read the prospectuses carefully before investing. Investing involves risk, including the possible loss of principal. Investment values w ill fluctuate and there is no assurance that the objective of any fund w ill be achieved. Mutual fund shares are redeemable at the then-current net asset value, w hich may be more or less than their original cost. Annuities issued by The Variable Annuity Life Insurance Company. Variable annuities distributed by its affiliate, AIG Capital Services, Inc., member FINRA. VALIC represents The Variable Annuity Life Insurance Company and its subsidiaries, VALIC Financial Advisors, Inc. and VALIC Retirement Services Company. ** Policy Form GFUA-398, GFUA-12, GFUA-315 or GFA-504, a group fixed annuity issued by The Variable Annuity Life Insurance Company. Securities and investment advisory services offered through VALIC Financial Advisors, Inc. ( VFA ), member FINRA, SIPC and an SEC-registered investment advisor. VFA registered representatives offer securities and other products under retirement plans and IRAs, and to clients outside of such arrangements.