Investment changes coming to your retirement plan

Transcription

1 P.O. Box 2900 Valley Forge, PA Investment changes coming to your retirement plan This fall, the investment lineup of the Villanova University Retirement Savings Plans will change. Please review these frequently asked questions for information about the changes and how they will affect you. Frequently asked questions 1. Q. What is changing at Vanguard? A. The following changes will be made to the Vanguard investment lineup of the Villanova University Retirement Savings Plans: On October 15, 2012, the Vanguard Brokerage Option (VBO ) will be added to the plan. VBO gives you access to thousands of mutual funds both Vanguard and non-vanguard funds not available in your plan s main investment options. Keep in mind, the VBO has certain risk factors to consider. On November 15, 2012, the plan s investment lineup at Vanguard will be streamlined and 33 funds will be closed. You will no longer be able to keep money invested in or direct new contributions to the closed funds after this date. Forty-one Vanguard funds will continue to remain available as main investment options in the plan after November 15, Q. Are any changes going to be made at TIAA-CREF? A. Yes. TIAA-CREF Lifecycle funds will be added to the plan s main investment lineup at TIAA-CREF effective October 15, No investment options are being closed at TIAA-CREF at this time. 3. Q. Why are the changes being made? A. As part of its ongoing commitment to support Villanova University employees in meeting their retirement savings goals, the Villanova University Retirement Plans Investment Committee periodically reviews the plan s investment options. As a result of careful analysis and the recommendations of an experienced investment consultant, the committee decided to make these changes. The committee believes that streamlining your plan s investment lineup will remove funds with overlapping investment objectives and make it easier for you to choose funds for your portfolio. For more experienced investors, the Vanguard Brokerage Option can broaden the range of investment options in your retirement plan to include thousands of mutual funds from hundreds of fund families. Keep in mind, there are certain risk factors to consider when investing through the VBO. These changes will also help ensure that Villanova University continues to meet its fiduciary responsibility for offering investments that have reasonable fees and will improve its ability to monitor fund performance as required by federal law. 4. Q. How did the committee select the new fund lineup? A. The committee hired Wilshire Consulting, an independent investment consultant, to identify and recommend funds based on both qualitative and quantitative factors. The new fund lineup was constructed to offer participants a diversified portfolio at the most reasonable cost. Keep in mind that diversification does not ensure a profit or protect against a loss in a declining market.

2 5. Q. What is VBO? VBO is a new feature of your retirement plan that gives you access to thousands of mutual funds from hundreds of fund families not offered through your plan s main investment options. If you re an experienced investor looking for greater investment choice in your plan, you may want to consider opening a VBO account to supplement your retirement portfolio. If you wish and determine that it is best for you, you can establish a VBO account and exchange money into the account to purchase the funds that are being removed from your plan s main investment lineup. Keep in mind, however, that the risks associated with investing through a VBO account are substantially greater than investing in your plan s main investment options. The University has no responsibility to select, monitor, or evaluate VBO investments, performance, activity, or fees. You will be completely responsible for researching, monitoring, and deciding about VBO investments. Costs associated with investing through the VBO may be greater than costs associated with investing in the plan s main investment options. 6. Q. How do I open a VBO account? A. To open a VBO account, contact Vanguard at to request a Vanguard Brokerage Option application kit. Applications will also be available at town hall meetings that will be held at the Cinema in the Connelly Center on September 19, 2012, from 11 a.m. to 1 p.m., and September 27, 2012, from 1 p.m. to 3 p.m. 7. Q. What funds are closing in the plan? A. The following funds will be removed from your plan s main investment lineup effective November 15, 2012: Vanguard Admiral Treasury Money Market Fund Vanguard Federal Money Market Fund Vanguard Short-Term Bond Index Fund Vanguard Short-Term Federal Fund Vanguard Short-Term Treasury Fund Vanguard Intermediate-Term Bond Index Fund Vanguard Intermediate-Term Investment-Grade Fund Vanguard Intermediate-Term Treasury Fund Vanguard Long-Term Bond Index Fund Vanguard Long-Term Treasury Fund Vanguard LifeStrategy Income Fund Vanguard LifeStrategy Conservative Growth Fund Vanguard LifeStrategy Moderate Growth Fund Vanguard LifeStrategy Growth Fund Vanguard Balanced Index Fund Vanguard Capital Value Fund Vanguard Equity Income Fund Vanguard Growth Index Fund Vanguard Growth and Income Fund Vanguard Morgan Growth Fund Vanguard U.S. Value Fund Vanguard Value Index Fund Vanguard Windsor Fund Vanguard Growth Equity Fund Vanguard Mid-Cap Growth Fund Vanguard Mid-Cap Index Fund Vanguard Small-Cap Growth Index Fund Vanguard Small-Cap Index Fund Vanguard Small-Cap Value Index Fund Vanguard Strategic Equity Fund Vanguard Developed Markets Index Fund Vanguard European Stock Index Fund Vanguard Pacific Stock Index Fund

3 8. Q. What do I need to do if I invest in one or more of the closing funds? A. You are not required to do anything. If you have a balance in or direct contributions to one or more of the closing funds, your money will move automatically as shown in the chart on the following page unless you move your money or redirect your contributions to other funds in your plan s lineup by 4 p.m., Eastern time, on Thursday, November 15, If you would like to move funds and/or redirect contributions to any other investment option offered by your plan, you may do so at any time prior to November 15, 2012, by making a new investment election. You can move current balances and future contributions from the closing funds into any of the remaining main Vanguard funds or TIAA-CREF investment options. You can also contact Vanguard to request a VBO application starting October 15, Once the account is established, you can direct contributions or exchange assets into your VBO account. Note that minimum investment requirements will apply to VBO. Keep in mind that all investing is subject to risk, including possible loss of principal. Each Target Retirement Fund invests in several broadly diversified funds and is subject to the risks of those underlying funds. The year in the fund name refers to the approximate year (the target date) when an investor in the fund would retire and leave the workforce. The fund will gradually shift its emphasis from more aggressive investments (stocks) to more conservative ones (bonds and short-term reserves) based on its target date. An investment in a Target Retirement is not guaranteed at any time, including on or after the target date. Bond funds are subject to the risk that an issuer will fail to make payments on time, and that bond prices will decline because of rising interest rates or negative perceptions of an issuer's ability to make payments. Investments in stocks or bonds issued by non-u.s. companies are subject to risks including country/regional risk and currency risk. If you make no election by November 15, 2012, your money will move from here Vanguard Admiral Treasury Money Market Fund Vanguard Federal Money Market Fund Vanguard Short-Term Bond Index Fund Vanguard Short-Term Federal Fund Vanguard Short-Term Treasury Fund Vanguard Intermediate-Term Bond Index Fund Vanguard Intermediate-Term Investment-Grade Fund Vanguard Intermediate-Term Treasury Fund Vanguard Long-Term Bond Index Fund Vanguard Long-Term Treasury Fund Vanguard LifeStrategy Income Fund Vanguard LifeStrategy Conservative Growth Fund Vanguard LifeStrategy Moderate Growth Fund Vanguard LifeStrategy Growth Fund Vanguard Balanced Index Fund Vanguard Growth Index Fund Vanguard Growth and Income Fund Vanguard Value Index Fund Vanguard Capital Value Fund Vanguard Equity Income Fund Vanguard U.S. Value Fund Vanguard Windsor Fund Vanguard Morgan Growth Fund Vanguard Growth Equity Fund Vanguard Mid-Cap Growth Fund Vanguard Mid-Cap Index Fund Vanguard Small-Cap Growth Index Fund Vanguard Small-Cap Index Fund Vanguard Small-Cap Value Index Fund Vanguard Strategic Equity Fund Vanguard Developed Markets Index Fund Vanguard European Stock Index Fund Vanguard Pacific Stock Index Fund To here on November 15, 2012 Vanguard Prime Money Market Fund Vanguard Short-Term Investment-Grade Fund Vanguard Total Bond Market Index Fund Vanguard Long-Term Investment-Grade Fund The date-specific Vanguard Target Retirement Fund with the target date closest to the year you will reach age 65 Vanguard 500 Index Fund Vanguard Windsor II Fund Vanguard U.S. Growth Fund Vanguard Explorer Fund Vanguard Extended Market Index Fund Vanguard Total International Stock Index Fund

4 Also keep in mind that if your funds move automatically on November 15, 2012, you can always make an election after this date to move the funds or redirect contributions to any other investment option available under your plan. 9. Q. How can I make changes to my account? A. You can access your account, research funds, or make changes online by logging on to your account at vanguard.com. If you haven t yet registered for secure online account access, do so today at vanguard.com/register. You ll need your plan number: You can also call Vanguard at to access Vanguard s 24-hour interactive VOICE Network or to speak with a Vanguard Participant Services Associate. Associates are available Monday through Friday from 8:30 a.m. to 9 p.m., Eastern time. To use VOICE, you will need a personal identification number (PIN). To create a PIN, follow the prompts. 10. Q. Can I get help choosing funds for my retirement plan? A. Yes. Vanguard offers a free, online tool, called Participant Fund Recommendations, which provides plan-specific investment suggestions tailored to your risk tolerance, how long you have until retirement, and your investment experience. The guidance you will receive is determined by your answers to the easy-to-complete online Investor questionnaire. Simply answer 11 questions and instantly receive a suggested mix of funds to own from your plan s fund lineup. To access Participant Fund Recommendations, log on to your account at vanguard.com, scroll over Plan Summary, and click Asset Mix. Then, click Take the Investor Questionnaire. (Note: If you have multiple accounts with Vanguard, you may need to select Employer plans after you log on.) You must be a registered user of vanguard.com to use Participant Fund Recommendations. Not yet registered? Go to vanguard.com/register. You will need your plan number: Q. Where can I get more information about the changes? A. Keep an eye out for additional information about the changes from Raymond Duffy, Director of Benefits & Wellness. Refer to the fund change newsletter you received from Vanguard for more detailed information about the investment changes at Vanguard. For information about the new TIAA-CREF Lifecycle funds, please call TIAA-CREF at You are also invited to attend a town hall meeting on September 19 or September 27 to learn more about the changes and how they will affect you. A representative from Vanguard will be on campus to explain the changes and answer your questions. Choose a date that is convenient for you. You will also be able to meet privately with a Vanguard representative to discuss your situation if you wish. Town hall meetings Dates Times Location Wednesday, September 19, a.m. to 1 p.m. Cinema, Connelly Center Thursday, September 27, p.m. to 3 p.m. Cinema, Connelly Center If you are unable to attend a town hall meeting in person, a recorded presentation will be available online. To view this presentation, see the 2012 Retirement Plan Enhancements page on the Human Resources website. You can also schedule an appointment with a Vanguard representative on campus or over the telephone. To schedule an appointment, go to meetvanguard.com. Vanguard representatives are salaried and receive no bonus or incentive for their services.

5 12. Q. Whom can I contact if I have additional questions? A. Contact a Vanguard Participant Services associate at Monday through Friday from 8:30 a.m. to 9 p.m., Eastern time. You may also contact the University's Human Resources Department at for additional information. For more information, visit vanguard.com, or call for Vanguard funds and for non-vanguard funds offered through Vanguard Brokerage Services, to obtain a prospectus. Investment objectives, risks, charges, expenses, and other important information are contained in the prospectus; read and consider it carefully before investing. An investment in a money market fund is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Although a money market fund seeks to preserve the value of your investment at $1 per share, it is possible to lose money by investing in such a fund. Advisory services are provided by Vanguard Advisers, Inc., a federally registered investment advisor and an affiliate of The Vanguard Group, Inc. Vanguard Brokerage Services is a division of Vanguard Marketing Corporation, Member FINRA The Vanguard Group, Inc. All rights reserved. Vanguard Marketing Corporation, Distributor of the Vanguard Funds. BBBBFMQR