Montgomery County Public Schools Hendershot/Lincoln Investment Plan Transition to Fidelity

Transcription

1 Montgomery County Public Schools Hendershot/Lincoln Investment Plan Transition to Fidelity At Montgomery County Public Schools, we re committed to offering you resources to help you map out your retirement goals and along with Fidelity, we re here to help you at every step in your journey. Important notice concerning your rights under the Montgomery County Public Schools 403(b) Retirement Savings Plan: This notice is to inform you that the Montgomery County Public Schools 403(b) Plan administered by Hendershot/Lincoln Investment will be transitioning to Fidelity. Certain Plan services may be temporarily unavailable in order to implement this change.

2 Table of contents Your retirement savings plan is an important benefit, so you need the right information, resources, and support to help you make decisions with confidence. With more than 70 years of financial services experience, Fidelity can help you put a plan in place that balances the needs of your life today with your retirement vision for tomorrow. Announcing changes ahead 3 Blackout period 3 What should I do? 4 Calendar 5 Investment options 6 Tools and resources 9 Use this guide as a resource to help you take an active role in your retirement planning. 2 Questions? Please call Fidelity at or go to

3 Announcing changes ahead Montgomery County Public Schools mailed an announcement letter to your home address in August regarding certain assets in your Hendershot/Lincoln Investment Plan account transferring to Fidelity Investments. Some of the reasons for the change to Fidelity include increased transparency, lower fees, investment advice that is not tied to the sale of specific products, and improved oversight. A copy of the announcement letter can also be viewed on Effective November 1, 2017, certain 403(b) assets from your Hendershot/Lincoln Investment Plan will be moving to a Montgomery County Public Schools 403(b) Plan at Fidelity Investments. Account balances posted after January 1, 2011, in the Hendershot/Lincoln Investment Plan will move over to Fidelity Investments effective November 1, Any balances prior to January 1, 2011, will remain at Hendershot/Lincoln Investment until you request a transfer. MCPS and Fidelity Investments are working closely with Hendershot/Lincoln Investment to enable a smooth transition. For any questions about this transition, please call Fidelity Investments at , Monday through Friday, from 8 a.m. to midnight Eastern time. Blackout period To ensure that all information is transferred accurately from your current Plan account at Hendershot/ Lincoln Investment to your new Plan account at Fidelity, there will be a period of time when you will be unable to direct or diversify investments in your individual accounts, 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 is expected to begin on October 16, 2017, and end during the week of November 13, During these weeks, you can get updates on the blackout period by calling Fidelity at or going to Questions? Please call Fidelity at or go to 3

4 What should I do? Before the blackout period begins on October 16, 2017: Make any changes to your Hendershot/Lincoln Investment Plan. Gather your statements and determine your financial needs for the remainder of the year. Visit to familiarize yourself with the MCPS 403(b) Plan at Fidelity. After the blackout period ends, expected to be the week of November 13, 2017, log on to NetBenefits at if you still need to: Register your username and password to access your account if you don t already have a Fidelity account. Add your preferred address and elect edelivery by visiting the Profile section of NetBenefits. Enter or update your beneficiary information. Beneficiary information will not transfer to Fidelity. Please visit click Profile, then Beneficiaries. Review your contribution amount and/or change your investment elections. Verify your investment election on file on NetBenefits at The election on file is how your balances will be transferred from Hendershot/Lincoln Investment to Fidelity. If you have an existing automatic withdrawal payment: Withdrawal information will not transfer from Hendershot/Lincoln Investment to Fidelity. You will need to call Fidelity after the transition is complete to set up your payment instructions. If you have an outstanding loan: Loans will transfer from Hendershot/Lincoln Investment to Fidelity. You will need to set up electronic bank information with Fidelity to continue loan repayment. You will receive detailed instructions to complete this step in November. Go mobile. Download the NetBenefits mobile app. 4 Questions? Please call Fidelity at or go to

5 Calendar Please review this calendar to understand how your account may be affected during the transition period. KEY DATES* October 16, 2017, at 4 p.m. Eastern time October 31, 2017, 4 p.m. Eastern time November 1, 2017 Week of November 13, 2017 January 2018 PLAN ACTIVITY/ACTION STEPS BLACKOUT PERIOD BEGINS This is the last date to: Request a distribution. Check your account balances. Request an exchange between investment options. Return all necessary paperwork to process a distribution before the blackout period begins. Please allow enough time to request, receive, complete, and return the paperwork to Hendershot/Lincoln Investment before this deadline. Your account balances are valued at the close of the market. Your account balances are scheduled to transfer to Fidelity. Review the Investment Options section of this guide to learn how your balance will transfer to the 403(b) Plan at Fidelity. BLACKOUT PERIOD ENDS The blackout period is expected to end, and the Fidelity service center and NetBenefits website will open for all Plan services. Log on to NetBenefits at to set up your username and password if you have not already done so. On NetBenefits, you can: Review your account balances. Enroll in the Plan. Request changes to your account. Review your contribution amount, and/or change your investment elections. Access investment option descriptions. Research investment performance. Request a loan or distribution. Call to speak with a Fidelity representative who can answer questions and walk you through any transaction you want to make in your account. Choose your beneficiaries. Your beneficiary designation will not transfer from your Hendershot/Lincoln Investment Plan to Fidelity. Call or go online to to assign beneficiaries to your account. If you have an existing automatic withdrawal payment, withdrawal information will not transfer to Fidelity. You will need to call Fidelity after the transition is complete to set up your payment instructions. QUARTERLY STATEMENT IS AVAILABLE ONLINE FROM FIDELITY Compare Fidelity s statement with your final account statement from Hendershot/Lincoln Investment. Please call Fidelity at with any questions. Account statements for the Plan are available online in NetBenefits at A quarterly paper statement will not be mailed to your home. To change your mail preferences and request that quarterly statements be mailed to your home address, call Fidelity at or log on to NetBenefits at Simply click Profile, then Mail Communications. * The timing of the plan changes and transition period, including any asset reallocations, described within this brochure depends on a variety of factors, which may include the timing and accuracy of the transfer of data, receipt of instructions, and receipt of assets. Changes in any of these factors may result in changes to the timing of the delivery of services, the transition period, and/or the dates on which, and thus the prices at which, assets in your account are sold and/or reinvested. Questions? Please call Fidelity at or go to 5

6 Investment options Before investing in any investment option, consider the investment objectives, risks, charges, and expenses. Contact Fidelity by going to or calling for a mutual fund prospectus or, if available, a summary prospectus. Read them carefully. Overview The Plan gives you a choice of investment options that allow you the flexibility to build your own strategy to meet your needs both long and short term. How these investments were chosen The Board of Education created the Defined Contribution Investment Committee (DCIC). This committee is tasked with developing and maintaining the investment menu and acts solely in the best interest of the participants in the Plan. The streamlined investment menu is intended to reduce confusion and assist participants with making their fund selections. What you need to do Now is a good time to look at your situation and decide whether changes might be appropriate to better align your investment approach with your retirement goals. Investment option tiers How to choose your investments Before making your investment decisions, it is important that you become familiar with the various options in the Plan. Additional information regarding each investment option s risk, as well as its strategy and objective, including a prospectus, can be obtained by going to Please consider all investment information before selecting your investments. For an explanation of your rights to direct investments, any Plan restrictions, and a description of the types of fees and expenses associated with your Plan account, refer to the MCPS Fee Disclosure Notice posted to under the Tools & Resources tab, then Hendershot/Lincoln Transition. To simplify your choices, the DCIC has created the following tiers of investments: How your assets will transfer from Hendershot/ Lincoln Investment If you have made investment choices to an existing MCPS 403(b) account at Fidelity, your current account balances and future contributions will continue to be invested according to that prior direction at Fidelity. Any balance transferred from Hendershot/Lincoln Investment to Fidelity will be invested based on your current investment elections on file at Fidelity. If you have not made investment choices at Fidelity, your account balances and future contributions will be invested in the target date fund that has a target retirement date closest to the year you might retire, assuming a retirement age of 65. The target retirement date timeline and retirement age were selected by MCPS. You may also make changes to your investment elections after the blackout period is over the week of November 13, Tier 1: Simplified Investing This category is composed of the Target Retirement Date Funds. Target date funds are mutual funds that automatically reset the asset mix of stocks, bonds, and cash equivalents in their portfolios based on an anticipated retirement date. Their returns are not guaranteed, but depend on how the market performs. Tier 3: Active Investing Active managers attempt to construct a portfolio that will outperform a market index, and rely on analytical research, forecasts, and their own judgment and experience in making investment decisions on what securities to buy, hold, and sell. Tier 2: Passive Investing The funds in this category are mostly index funds. An index fund is a type of mutual fund with a portfolio constructed to match or track the components of a market index. An index mutual fund is expected to provide broad market exposure, low operating expenses, and low portfolio turnover. Tier 4: Self-Directed Brokerage The options available in a self-directed brokerage account provide you with an opportunity to invest in a broad range of investment options beyond those offered directly through the Plan. See the enclosed Investment Options Guide for more details. Indexes are unmanaged. It is not possible to invest directly in an index. 6 Questions? Please call Fidelity at or go to

7 INVESTMENT OPTION Tier 1: Simplified Options Vanguard Institutional Target Retirement Income Fund Institutional Shares Vanguard Institutional Target Retirement 2015 Fund Institutional Shares Vanguard Institutional Target Retirement 2020 Fund Institutional Shares Vanguard Institutional Target Retirement 2025 Fund Institutional Shares Vanguard Institutional Target Retirement 2030 Fund Institutional Shares Vanguard Institutional Target Retirement 2035 Fund Institutional Shares Vanguard Institutional Target Retirement 2040 Fund Institutional Shares Vanguard Institutional Target Retirement 2045 Fund Institutional Shares Vanguard Institutional Target Retirement 2050 Fund Institutional Shares Vanguard Institutional Target Retirement 2055 Fund Institutional Shares Vanguard Institutional Target Retirement 2060 Fund Institutional Shares Vanguard Institutional Target Retirement 2065 Fund Institutional Shares TICKER SYMBOL VITRX VITVX VITWX VRIVX VTTWX VITFX VIRSX VITLX VTRLX VIVLX VILVX VSXFX Tier 2: Passive Investing Vanguard Institutional Index Fund Institutional Shares Vanguard Extended Market Index Fund Institutional Shares Vanguard Total International Stock Index Fund Institutional Shares Vanguard Total Stock Market Index Fund Institutional Shares Vanguard Total Bond Market Index Fund Institutional Shares VINIX VIEIX VTSNX VITSX VBTIX Tier 3: Active Investing Artisan International Fund Institutional Class* Baird Intermediate Bond Fund Class Institutional Loomis Sayles Core Plus Bond Fund Class N Parnassus Core Equity Fund Institutional Shares Prudential Jennison Small Company Fund Class Q Vanguard Federal Money Market Fund Investor Shares APHIX BIMIX NERNX PRILX PJSQX VMFXX Tier 4: Self-Directed Brokerage Investment Options Mix BrokerageLink N/A Short-term redemption fees may apply at your previous service vendor. * There is a short-term redemption fee of 2% for fee-eligible shares held less than 90 days. For descriptions of the funds available in each of the tiers, please see the enclosed Investment Options Guide. Questions? Please call Fidelity at or go to 7

8 Default investment option The Defined Contribution Investment Committee chose the Vanguard Target Retirement Funds as the default option in the Plan. Please use the guidelines in the table below, as provided by MCPS, to determine in which Vanguard Target Retirement Fund your current account balances and future contributions will be invested. DATE OF BIRTH FUND NAME TARGET RETIREMENT YEARS Before 1948 Vanguard Target Retirement Income Fund Institutional Shares Retired before /1/ /31/1952 Vanguard Target Retirement 2015 Fund Institutional Shares /1/ /31/1957 Vanguard Target Retirement 2020 Fund Institutional Shares /1/ /31/1962 Vanguard Target Retirement 2025 Fund Institutional Shares /1/ /31/1967 Vanguard Target Retirement 2030 Fund Institutional Shares /1/ /31/1972 Vanguard Target Retirement 2035 Fund Institutional Shares /1/ /31/1977 Vanguard Target Retirement 2040 Fund Institutional Shares /1/ /31/1982 Vanguard Target Retirement 2045 Fund Institutional Shares /1/ /31/1987 Vanguard Target Retirement 2050 Fund Institutional Shares /1/ /31/1992 Vanguard Target Retirement 2055 Fund Institutional Shares /1/ /31/1997 Vanguard Target Retirement 2060 Fund Institutional Shares /1/1998 and later Vanguard Target Retirement 2065 Fund Institutional Shares 2063 and beyond The Vanguard target retirement date funds are designed for investors expecting to retire around the year indicated in each fund s name. The funds are managed to gradually become more conservative over time as they approach the target date. The investment risk of each Vanguard target retirement date fund changes over time as the fund s portfolio s asset allocation changes. The funds are subject to the volatility of the financial markets, including that of equity and fixed-income investments in the U.S. and abroad, and may be subject to risks associated with investing in high-yield, small-cap, and foreign securities. Principal invested is not guaranteed at any time, including at or after the funds target dates. 8 Questions? Please call Fidelity at or go to

9 Tools and resources It all starts on NetBenefits at Fidelity s website is designed so you can quickly and easily set up, monitor, and manage your retirement savings account. If you have a username and password for other accounts at Fidelity, you can use that information to access your retirement account. If you do not have a Fidelity username and password, log on to NetBenefits at click Register, and follow the step-by-step instructions to set up your account. Online resources to help you succeed Once your account is set up, it s time to make sure your investment strategy is on track. From practical education to easy-to-use tools, you now have access to Fidelity s innovative resources and insights to help you make informed decisions. Log on to Fidelity NetBenefits at and visit the Library / then Calculators & Tools. IF YOU WANT TO: Learn about financial education resources Create a plan for saving and managing your debt TAKE THESE STEPS: View articles, infographics, videos, and more to suit your interests and skill level. Decide which financial goal you should save for first. Create a budget and determine your monthly surplus or deficit. USE THIS ONLINE RESOURCE: Library Get an overview of your Fidelity and non-fidelity accounts. Full View Determine where and how much to save Make sure you re saving enough for retirement Select investments for your retirement savings plan See how increasing your contributions may help your money grow over time. See how your pretax contributions might affect your take-home pay. See how your savings translate into monthly income in retirement, and get practical next steps to help improve your outlook. Figure out how much money you may need to save to meet your retirement goals. Stay on track by creating an investment strategy that s aligned with your goals. Contribution Calculator Take-Home Pay Calculator Continued on the next page. Questions? Please call Fidelity at or go to 9

10 Online resources continued IF YOU WANT TO: Select investments for your retirement savings plan Plan for your savings goals TAKE THESE STEPS: Stay on track by creating an investment strategy that s aligned with your goals. Create an income plan to help ensure that you don t outlive your savings. Build a portfolio for your retirement income. USE THIS ONLINE RESOURCE: Fidelity Income Strategy Evaluator The projections or other information generated by the and Fidelity Income Strategy Evaluator regarding the likelihood of various investment outcomes are hypothetical in nature, do not reflect actual investment results, and are not guarantees of future results. Your results may vary with each use and over time. 10 Questions? Please call Fidelity at or go to

11 Notes Questions? Please call Fidelity at or go to 11

12 Investing involves risk, including risk of loss. This document provides only a summary of the main features of the Montgomery County Public Schools 403(b) Retirement Savings Plan and the Plan documents will govern in the event of any discrepancies. Fidelity Brokerage Services LLC, Member NYSE, SIPC 900 Salem Street, Smithfield, RI FMR LLC. All rights reserved