VantageTrust Fund Fees and Expenses

Transcription

1 VantageTrust Fees and Expenses R1 B July 1, 2013 Your Employer has entered into an Administrative Services Agreement with ICMA-RC that establishes the services to be provided to your Plan(s) and the fees to be paid to ICMA-RC for these services. Your Plan currently receives Class R1 Shares of the s. Your Employer may make investment options available through your Plan that are subject to different fees, terms and conditions than the VT s. There are fees assessed in connection with each Model Portfolio and Milestone for both the fund itself, and also, indirectly, a portion of the fees and expenses of each of the Model Portfolio s or Milestone s underlying funds. A significant portion of these fees are paid to ICMA-RC subsidiaries for services provided to the VT s and Vantagepoint s. It is important to remember that all fees and expenses, including those of underlying mutual funds, are subject to change. Please note that the estimated total expenses we provide below were estimated as of July 1, 2013, and do not reflect waivers or expense reimbursements, if any, with the exception of the 2050 Milestone. Actual expenses may be different. These estimated expenses include plan administration fees and service fees applicable to your Plan, as well as the fees incurred by the underlying mutual funds such as investment management fees, and transfer agency and custodial fees. For more current information on fees, log in to ICMA-RC s Account Access at or contact ICMA-RC by calling Estimated Name Total Expenses CASH MANAGEMENT FUND VT Cash Management 1.31% STABLE VALUE FUND VT PLUS 1.37% BOND FUNDS Core Bond Index 1.01% Low Duration Bond 1.19% VT PIMCO Total Return 1.41% Inflation Protected Securities 1.19% VT PIMCO High Yield 1.50% ASSET ALLOCATION FUNDS TARGET DATE FUNDS Milestone Retirement Income 1.39% Milestone % Milestone % Milestone % Milestone % Milestone % Milestone % Milestone % Milestone % Milestone 2050 (1) 1.66% ASSET ALLOCATION FUNDS TARGET RISK FUNDS Model Portfolio Conservative Growth 1.40% Model Portfolio Traditional Growth 1.42% Model Portfolio Long-Term Growth 1.45% Model Portfolio All-Equity Growth 1.53% U.S. STOCK FUNDS Equity Income 1.38% VT Eaton Vance Large Cap Value 1.69% VT AllianzGI NFJ Dividend Value 1.66% VT Columbia Diversified Equity Income 1.63% VT Invesco Diversified Dividend 1.37% 500 Stock Index 1.02% Growth & Income 1.34% Estimated Name Total Expenses U.S. STOCK FUNDS (continued) Broad Market Index 1.03% VT Oppenheimer Main Street 1.24% Growth 1.35% VT Calvert Equity Portfolio 1.92% VT T. Rowe Price Growth Stock 1.63% VT Fidelity Contrafund 1.44% Select Value 1.55% VT Columbia Mid Cap Value 1.64% VT Goldman Sachs Mid Cap Value 1.85% Mid/Small Company Index 1.03% VT CRM Small/Mid Cap Value 1.79% Aggressive Opportunities 1.41% VT Rainier Small/Mid Cap Equity 1.96% VT TimesSquare Mid Cap Growth 1.97% VT Harbor Mid Cap Growth 1.80% VT Royce Premier 2.03% VT Columbia Small Cap Value I 1.80% VT AllianzGI NFJ Small-Cap Value 1.82% Discovery 1.53% VT T. Rowe Price Small-Cap Value 1.94% VT Oppenheimer Discovery 1.60% VT Royce Value Plus 2.16% INTERNATIONAL FUNDS VT Harbor International 1.73% Overseas Equity Index 1.13% International 1.54% VT Fidelity Diversified International 1.71% BALANCED FUND VT Fidelity Puritan 1.29% SPECIALTY FUNDS VT Nuveen Real Estate Securities 1.73% VT Invesco Global Real Estate 1.93% (1) The Milestone 2050 ( VT 2050 ) estimated total expense is shown net of fee waivers and expense reimbursements. The investment adviser to the underlying fund, the Vantagepoint Milestone 2050 ( 2050 ), has agreed to waive fees or reimburse expenses (other than extraordinary expenses) until April 30, 2014 to limit the 2050 s total annual operating expenses to 0.85% for TM Shares, the class held by the VT After that date, this arrangement can be terminated by the investment adviser upon notice to the 2050 s Board of Directors. Without these waivers or reimbursements the gross expense ratio for the VT 2050 would be 11.26%.

2 VT Retirement IncomeAdvantage Fees and Expenses The following fund fees are deducted from the s assets. Total Annual Operating Fees and Expenses Fee Guarantee Fee Fee paid to Prudential in exchange for providing downside income protection and lifetime income guarantees. Amount 1.00% Services Fee Fee paid to ICMA-RC in exchange for providing recordkeeping, administrative, and other services related to the Separate Account. 0.45% Investment Management Fee Fee paid to ICMA-RC in exchange for providing investment management services for the Separate Account. 0.05% Plan Administration Fee 0.55% Trust Expenses Trust Expenses charged to cover VantageTrust operating expenses. 0.01% Other Separate Account Fees and Expenses Fees associated with the registered funds and collective trust fund held by the Separate Account. 0.07%* Gross Fees and Expenses 2.13% Net Fees and Expenses 2.13% * Other Separate Account Fees and Expenses are based on estimates for the current year of 0.06% for the underlying funds. Other Separate Account Fees and Expenses also include an accounting fee for the Separate Account of $16,800 per year. ICMA-RC has agreed to temporarily pay a portion of the accounting fee so as to limit that fee to approximately 0.01% of fund assets. ICMA-RC may discontinue these payments at any time. Please refer to the Retirement Investment Guide Additional Information for more information about the VantageTrust Retirement IncomeAdvantage. FLY B

3 MAKING SOUND INVESTMENT DECISIONS A Retirement Investment Guide ( Guide ) JULY 1, 2013 INTRODUCTION ICMA Retirement Corporation ( ICMA-RC ) and VantageTrust Company, LLC ( Trust Company ) provide plan administration, education and communication services, and sponsor investment options for deferred compensation and qualified retirement plans maintained by state and local governments for their employees ( Plan(s) ). ICMA-RC is a non-profit organization dedicated to supporting the public sector, and the Trust Company is a wholly owned subsidiary of ICMA-RC. Purpose of VantageTrust VantageTrust (the Trust ) is a group trust established and maintained by the Trust Company and provides for the commingled investment of the assets of retirement and deferred compensation plans administered by ICMA-RC. The Trust facilitates efficient investment management of retirement accounts with similar investment objectives. Investment management and supervision of assets invested through the Trust are provided through an organization that is dedicated to serving the public sector. The VantageTrust s ( VT s ) are collective trust funds made available to you through the Trust. Important Considerations Before investing in a VT you should carefully consider: your investment goals, your tolerance for risk, your investment time horizon, and your personal financial circumstances; there is no guarantee that a VT will meet its investment objective; past fund performance does not indicate or guarantee future performance; you can lose money investing in the VT s; and the VT s are not guaranteed or insured by the Federal Deposit Insurance Corporation ( FDIC ), any other government agency, or ICMA-RC. TABLE OF CONTENTS Introduction...1 Purpose of VantageTrust...1 Important Considerations...1 VantageTrust Investment Options and Summary Descriptions...2 VantageTrust Fixed Income Investment Options...3 Additional Information About the VT PLUS...5 VantageTrust Asset Allocation Investment Options...7 Additional Information About Milestone and Model Portfolio s...9 VantageTrust U.S. Stock Investment Options...11 Large Cap U.S. Stock s...11 Mid-Cap U.S. Stock s...13 Small-Cap U.S. Stock s...15 International, Balanced, Specialty, and Other Investment Options...16 International s...16 Balanced...17 Specialty s...18 Other VantageTrust Investment Options...18 Guaranteed Income/Variable Annuity VT Retirement IncomeAdvantage...19 VT Certificate of Deposit Accounts...19 Investment Risks...21 Investor s Guide Important Note: A VantageTrust Fees and Expenses document must accompany this Guide, and you should review this document before you invest in the VT s. Please contact Investor Services by calling if you need to obtain the appropriate document for your Plan. The VT s, s, VT PLUS, and VT Retirement IncomeAdvantage are offered in different share classes. A description of these share classes can be found in the Retirement Investment Guide Additional Information, which you can obtain by calling Investor Services at the number above. 1

4 VANTAGETRUST INVESTMENT OPTIONS The table below lists each investment option as well as the page number where a summary describing that option can be found. Fixed Income s Asset Allocation s Stable Value/Cash Management VT Cash Management...3 VT PLUS...3 Asset Allocation/Target Date Milestone Retirement Income...7 Milestone Milestone Milestone Milestone Milestone Milestone Milestone Milestone Milestone Bond Core Bond Index... 3 Low Duration Bond... 4 VT PIMCO Total Return... 4 Inflation Protected Securities... 4 VT PIMCO High Yield... 5 Asset Allocation/Target Risk Model Portfolio Conservative Growth... 8 Model Portfolio Traditional Growth... 8 Model Portfolio Long-Term Growth... 8 Model Portfolio All-Equity Growth... 9 U.S. Stock s Value Blend Growth Large Cap Equity Income...11 VT Eaton Vance Large-Cap Value *...11 VT AllianzGI NFJ Dividend Value...11 VT Columbia Diversified Equity Income *...11 VT Invesco Diversified Dividend...11 Mid Cap Select Value...13 VT Columbia Mid Cap Value...13 VT Goldman Sachs Mid Cap Value...13 Small Cap VT Columbia Small Cap Value I*...15 VT AllianzGI NFJ Small-Cap Value *** Stock Index...12 Growth & Income...12 Broad Market Index...12 VT Oppenheimer Main Street...12 Mid/Small Company Index...14 VT CRM Small/Mid Cap Value...14 Discovery...15 VT T. Rowe Price Small-Cap Value **...16 Growth...12 VT Calvert Equity Portfolio...12 VT T. Rowe Price Growth Stock **...13 VT Fidelity Contrafund...13 Aggressive Opportunities...14 VT Rainier Small/Mid Cap Equity *...14 VT TimesSquare Mid Cap Growth...14 VT Harbor Mid Cap Growth...14 VT Royce Premier *...15 VT Oppenheimer Discovery...16 VT Royce Value Plus *...16 Other Investment Options International Balanced Specialty Other Investment Options VT Harbor International...16 Overseas Equity Index...16 International...17 VT Fidelity Diversified International...17 VT Fidelity Puritan...17 VT Nuveen Real Estate Securities...18 VT Invesco Global Real Estate *...18 VT Retirement IncomeAdvantage VT Certificate of Deposit Accounts * Not available to new Plans. ** T. Rowe Price is a registered trademark of T. Rowe Price Group, Inc. All rights reserved. *** Available to new Plans only if that Plan had a pre-existing balance in the underlying fund prior to transitioning to ICMA-RC and VantageTrust. 2

5 VT Investment Options and Summary Descriptions Each VT, except for the VT PLUS (or PLUS ) and the VT Retirement IncomeAdvantage, invests substantially all of its assets in the single underlying mutual fund identified below either one of the Vantagepoint s (which are funds sponsored by ICMA-RC and managed by one of its subsidiaries) or a third-party mutual fund. Certain VT s, services or products described in this Guide may not be available through your Plan, and all are subject to change. The summaries below are not complete descriptions of the investment options or the VT s. More information about the investments available through VantageTrust is available at or you can call and ask that copies of the following documents be sent to you by mail or . The Retirement Investment Guide Additional Information, a companion document to this Guide that provides more information about the VT s that invest in underlying mutual funds, PLUS, VantageTrust Retirement IncomeAdvantage, VantageTrust Certificate of Deposit Accounts, and policies and procedures that may affect your investment. The VantageTrust Retirement IncomeAdvantage Important Considerations, which contains information about the fund that you should consider before investing. Underlying mutual fund prospectuses that describe in greater detail each fund s principal investment strategies, risks, and expenses. VANTAGETRUST FIXED INCOME INVESTMENT OPTIONS VantageTrust Name Underlying Registered Mutual Investment Objective Principal Investment Strategy Principal Risks CASH MANAGEMENT FUND VT Cash Management Dreyfus Cash Management As high a level of current income as is consistent with the preservation of capital and the maintenance of liquidity. The underlying mutual fund is a money market fund. It normally invests in a diversified portfolio of high quality, short-term, dollar-denominated debt securities, including at least 25% of its net assets in domestic or dollardenominated foreign bank obligations. Liquidity Banking and Financial Services Securities U.S. Government Agency Securities U.S. Treasury Securities Repurchase Agreement Counterparty STABLE VALUE FUND VT PLUS None A competitive level of income consistent with providing capital preservation and meeting liquidity needs. BOND FUNDS The PLUS is a collective fund of VantageTrust that seeks to maintain a stable net asset value. It invests primarily in a diversified portfolio of stable value investments including traditional guaranteed investment contracts (traditional GICs ), separate account GICs, synthetic GICs backed by fixed income securities or investments, and short-term investment funds, including money market mutual funds. Issuer Liquidity Reinvestment Fixed Income Securities Securities Lending Core Bond Index Vantagepoint Core Bond Index Current income by approximating the performance of the Barclays U.S. Aggregate Bond Index. The underlying mutual fund invests, under normal circumstances, at least 90% of its net assets in bonds and other fixed income securities included in the Barclays U.S. Aggregate Bond Index, selected and weighted to seek to result in investment characteristics comparable to those of that index and performance that correlates with the performance of that index. The follows an indexed or passively managed approach to investing. U.S. Government Agency Securities Mortgage-backed Securities Asset-backed Securities Indexing 3

6 VANTAGETRUST FIXED INCOME INVESTMENT OPTIONS VantageTrust Name Underlying Registered Mutual Investment Objective Principal Investment Strategy Principal Risks BOND FUNDS (CONTINUED) Low Duration Bond Vantagepoint Low Duration Bond Total return that is consistent with preservation of capital. The invests, under normal circumstances, at least 80% of its net assets in bonds and other fixed income securities of varying maturities, and normally invests at least 65% of its net assets in bonds and other fixed income securities with more than one year to maturity. The seeks to maintain a portfolio effective duration of no greater than three years. Effective duration is a measure of the expected change in value of a fixed income security for a given change in interest rates, and takes into account that expected cash flows will fluctuate as interest rates change. To provide return opportunities, the invests in fixed income securities that the s subadvisers believe offer attractive yields and are priced below fair market value relative to securities of similar credit quality and interest rate sensitivity. Asset-backed Securities Mortgage-Backed Securities Municipal Securities Call U.S. Government Agency Securities High Yield Securities Multi-Manager VT PIMCO Total Return PIMCO Total Return Maximum total return, consistent with preservation of capital and prudent investment management. The underlying mutual fund invests, under normal circumstances, at least 65% of its total assets in a diversified portfolio of fixed income instruments of varying maturities, which may be represented by forward contracts or derivative instruments such as options, futures, or swap agreements. Fixed income instruments include bond, debt securities, and other similar instruments issued by U.S. and non-u.s. public or private-sector entities. It invests primarily in investment grade debt securities, but also may invest up to 10% of its total assets in high-yield securities ( junk bonds ). The underlying fund may also invest in securities denominated in foreign currencies and in securities and instruments tied to emerging market countries. It may also invest in derivative instruments without limitation. Liquidity High Yield Securities Leverage Mortgage-backed Securities Asset-backed Securities Short Sales Emerging Markets Inflation Protected Securities Vantagepoint Inflation Protected Securities Current income. The underlying mutual fund invests, under normal circumstances, at least 80% of its net assets in inflation-adjusted U.S. and foreign fixed income securities and normally invests at least 50% of its net assets in U.S. Treasury inflation-protected securities ( TIPS ). The s subadvisers actively trade in the TIPs market to seek attractive return opportunities, and may also invest up to 20% of the s net assets in U.S. and foreign fixed income securities whose values are not linked to adjustments in reported inflation rates. Inflation-Adjusted Securities U.S. Government Agency Securities Call Mortgage-backed Securities Asset-backed Securities Municipal Securities Active Trading Multi-Manager 4

7 VANTAGETRUST FIXED INCOME INVESTMENT OPTIONS VantageTrust Name Underlying Registered Mutual Investment Objective Principal Investment Strategy Principal Risks BOND FUNDS (CONTINUED) VT PIMCO High Yield PIMCO High Yield Maximum total return consistent with preservation of capital and prudent investment management. The underlying mutual fund invests, under normal circumstances, at least 80% of its assets in a diversified portfolio of high-yield securities ( junk bonds ), which may be represented by forward contracts or derivatives such as options, futures, or swap agreements, rated below investment grade by Moody s, or equivalently rated by S&P or Fitch. It may also invest in derivative instruments without limitation. Liquidity High Yield Securities Leverage Mortgage-backed Securities Asset-backed Securities Short Sales Emerging Markets Additional Information About the PLUS The PLUS s investment objective is to seek to offer a competitive level of income consistent with providing capital preservation and meeting liquidity needs. Key goals are to seek to preserve capital, by limiting the risk of loss of principal and delivering stable returns, and to meet the liquidity needs of those who invest in the PLUS. The PLUS invests in certain stable value investment contracts, described below, to seek to achieve, over the long run, returns higher than those of money market mutual funds and short-term bank rates, and relatively stable returns compared to short-to-intermediate term fixed income mutual funds. The PLUS generally will not track shorter-term interest rates as closely as money market mutual funds due to its longer maturity, potential adverse market changes, and provisions in stable value contracts held by the PLUS. In addition, while the PLUS s returns are generally expected to follow interest rate trends over time, they typically would do so on a lagged basis. Investment Strategies ICMA-RC employs a structured, multi-product, multi-manager approach in managing the PLUS. The PLUS invests primarily in a diversified and tiered portfolio of stable value investment contracts and in fixed income securities, fixed income mutual funds, and fixed income commingled trust funds ( fixed income assets ) that back certain stable value investment contracts. In addition, the PLUS invests in money market mutual funds, as well as cash and cash equivalents. The PLUS s portfolio may include different types of investments with a variety of negotiated terms and maturities, and is diversified across sectors and issuers. The composition of the PLUS s portfolio and its allocations to various stable value investments and fixed income investment sectors, across the s multiple tiers, is determined based on prevailing economic and capital market conditions, relative value analysis, liquidity needs, and other factors. The PLUS primarily invests in stable value investment contracts that allow Plan participants who invest in the PLUS to make benefit withdrawals at book value, i.e., original book or contract value plus accrued interest, plus additional deposits less withdrawals, fees and expenses, and other adjustments. The types of stable value investment contracts in which the PLUS may invest are described below. Traditional Guaranteed Investment Contracts ( GICs ) contracts issued by insurance companies that guarantee (1) payments of interest at a fixed or floating rate and (2) repayments of principal. The amount invested by the PLUS in each Traditional GIC becomes part of the insurance company s general account assets, which are managed and invested as the insurance company deems appropriate. Payments of principal and interest under a GIC depend on the insurance company s creditworthiness and ability to meet its obligations when they come due. Separate Account GICs contracts issued by insurance companies that are backed by fixed income assets held in a separate account at the insurance company that is held separate from the insurance company general account assets for the benefit of the PLUS and any other contract holders in that separate account. The underlying fixed income assets are either managed by the insurance company, an affiliate of the insurance company, or a third-party manager. Synthetic GICs contracts issued by insurance companies, banks or other financial institutions (a Synthetic GIC issuer ) that are backed by fixed income assets owned by the PLUS. The Synthetic GIC issuer contract, which provides for participant withdrawals at book value under certain conditions, 5

8 is called a wrap contract, and the issuer may be referred to as a wrap provider or wrapper. The underlying fixed income assets are managed by fixed income managers retained by ICMA-RC or are invested in mutual funds or other pooled investment vehicles. Certain wrap providers require that they or an affiliate manage the portfolio that they wrap. Bank Investment Contracts ( BICs ) contracts that are similar but not identical to Traditional GICs, and are issued by a bank as a benefit responsive bank deposit. Investment Risks different risks are associated with the different types of stable value investment contracts in which the PLUS invests. Generally, stable value investment contracts are illiquid and may not be assigned, transferred or sold to someone else without the permission of the issuing insurance company or bank. These contracts often include non-standard negotiated terms and do not trade in a secondary market. Additional risks of investing in the PLUS include, but are not limited to: failure of the issuers of GICs, BICs, Separate Account GICs, or Synthetic GICs to meet their obligations to the PLUS ; failure of ICMA-RC to meet its objectives or obligations, as investment adviser for the PLUS ; default or downgrade of the fixed income assets that back Separate Account GICs and Synthetic GICs; failure of the third-party fixed income managers of the portfolios underlying the Separate Account GICs and Synthetic GICs to meet their investment objectives or their obligations to the PLUS ; loss of value or failure to redeem shares or allow withdrawals on a timely basis by one or more of the commingled investment vehicles in which the PLUS invests, which may include money market mutual funds or other mutual funds. Securities Lending The PLUS may engage in securities lending. The PLUS participates in a securities lending program under which its custodian is authorized to lend a limited amount of fixed income securities backing the Synthetic GICs. The fixed income securities that are on loan require cash or other forms of collateral at least equal to the market value of the securities loaned as provided for in a Securities Lending Agency Agreement with JP Morgan Chase Bank, N.A. The collateral received is reinvested into cash equivalents such as money market funds. As with other extensions of credit, there are risks of delay in recovery of the securities on loan. In the event of default or insolvency of the borrower, the PLUS will be indemnified by its custodian for the securities lending program conducted through the custodian if, at the time of a default by a borrower, some or all of the loaned securities have not been returned by the borrower. Crediting Rate Investors in the PLUS receive a daily accrual to their accounts that seeks to approximate the PLUS s expected yield. The crediting rate is set monthly, at the end of the prior month, and seeks to approximate what the PLUS s actual earnings will be for the current month, increased or decreased to adjust for differences between actual and credited earnings in prior periods. This crediting rate is estimated taking into account current yields on the PLUS s holdings in GICs and money market funds, and prior period performance of the securities underlying the Synthetic GICs held by the PLUS. The PLUS s monthly crediting rate may not move in the same direction as prevailing interest rates over certain time periods. The Trust Company reserves the right to change the PLUS s policies or fees at any time. Please refer to the Retirement Investment Guide Additional Information for more information about the PLUS s management, investments, and risks. Direct transfers from the PLUS to competing funds are restricted. These restrictions are described on the last page of this Guide. 6

9 VANTAGETRUST ASSET ALLOCATION INVESTMENT OPTIONS VantageTrust Name Underlying Registered Mutual Investment Objective Principal Investment Strategy Principal Risks ASSET ALLOCATION FUNDS TARGET DATE FUNDS Milestone Retirement Income Vantagepoint Milestone Retirement Income Current income and opportunities for capital growth that have limited risk. The underlying fund invests in a combination of other Vantagepoint s and one or more third-party exchange-traded funds ( ETFs ) to seek to obtain exposure to approximately 55% fixed income investments, 25% equity investments, and 20% investments in asset classes and strategies that have historically exhibited a low correlation to traditional fixed income and equity investments through the Vantagepoint Diversifying Strategies, a multi-strategy fund. of s ETF Asset Allocation Mortgage-backed Securities Asset-backed Securities U.S. Government Agency Securities Large Investor Risk Milestone 2010 Vantagepoint Milestone 2010 High total return consistent with the s current asset allocation. The underlying fund invests in a combination of other Vantagepoint s and one or more third-party exchange-traded funds ( ETFs ) using an asset allocation strategy designed for investors who retired in or around the year 2010 and would like to make gradual withdrawals from the. The invests in a combination of equity investments, fixed income investments, and investments in asset classes and strategies that have historically exhibited a low correlation to traditional fixed income and equity investments (through the Vantagepoint Diversifying Strategies, a multi-strategy fund ) that the adviser believes to be appropriate. As time elapses, the s allocation to equity investments decreases and the s allocation to fixed income investments and the multi-strategy investment increases so that by June 30 of the year 2020 (10 years after the year indicated in the s name), the s net assets will be invested approximately 25% in equity s, 55% in fixed income funds, and 20% in the multi-strategy fund. of s ETF Asset Allocation Mortgage-backed Securities Asset-backed Securities U.S. Government Agency Securities Large Investor Risk Milestone s Vantagepoint Milestone 2015, 2020, 2025, 2030, 2035, 2040, 2045, 2050 s High total return consistent with a s current asset allocation. An underlying Vantagepoint Milestone invests in a combination of other Vantagepoint s and one or more third-party exchange-traded funds ( ETFs ) using an asset allocation strategy designed for investors who expect to begin making gradual withdrawals from the, typically at or after retirement (assumed to occur at age 60), in or around the year stated in the underlying mutual fund s name. The invests in a combination of equity investments, fixed income investments, and investments in asset classes and strategies that have historically exhibited a low correlation to traditional fixed income and equity investments (through the Vantagepoint Diversifying Strategies, a multi-strategy fund ) that the adviser believes to be appropriate. As time elapses, the s allocation to equity investments decreases and the s allocation to fixed income investments and the multi-strategy investment increases so that by June 30, 10 years after the year indicated in the underlying Vantagepoint s name, its net assets will be invested approximately 25% in equity funds, 55% in fixed income funds, and 20% in the multi-strategy fund. of s ETF Asset Allocation Mortgage-backed Securities Asset-backed Securities Large Investor Risk 7

10 VANTAGETRUST ASSET ALLOCATION INVESTMENT OPTIONS VantageTrust Name Underlying Registered Mutual Investment Objective Principal Investment Strategy Principal Risks ASSET ALLOCATION FUNDS TARGET RISK FUNDS Model Portfolio Conservative Growth Vantagepoint Model Portfolio Conservative Growth Reasonable current income and capital preservation, with modest potential for capital growth. The underlying fund invests in a combination of other Vantagepoint s and one or more third-party exchange-traded funds ( ETFs ) to seek to obtain exposure to approximately 41% fixed income investments, 40% equity investments, and 19% investments in asset classes and strategies that have historically exhibited a low correlation to traditional fixed income and equity investments through the Vantagepoint Diversifying Strategies, a multistrategy fund. of s ETF Asset Allocation Mortgage-backed Securities Asset-backed Securities Large Investor Risk Model Portfolio Traditional Growth Vantagepoint Model Portfolio Traditional Growth Moderate capital growth and reasonable current income. The underlying fund invests in a combination of other Vantagepoint s and one or more third-party exchange-traded funds ( ETFs ) to seek to obtain exposure to approximately 25% fixed income investments, 60% equity investments, and 15% investments in asset classes and strategies that have historically exhibited a low correlation to traditional fixed income and equity investments through the Vantagepoint Diversifying Strategies, a multi-strategy fund. of s ETF Asset Allocation Equity Income/Interest Rate Mortgage-backed Securities Asset-backed Securities Large Investor Risk Model Portfolio Long-Term Growth Vantagepoint Model Portfolio Long-Term Growth High long-term capital growth and modest current income. The underlying fund invests in a combination of other Vantagepoint s and one or more third-party exchange-traded funds ( ETFs ) to seek to obtain exposure to approximately 13% fixed income investments, 75% equity investments, and 12% investments in asset classes and strategies that have historically exhibited a low correlation to traditional fixed income and equity investments through the Vantagepoint Diversifying Strategies, a multi-strategy fund. of s ETF Asset Allocation Equity Income/Interest Rate Mortgage-backed Securities Asset-backed Securities Large Investor Risk 8

11 VANTAGETRUST ASSET ALLOCATION INVESTMENT OPTIONS VantageTrust Name Underlying Registered Mutual Investment Objective Principal Investment Strategy Principal Risks ASSET ALLOCATION FUNDS TARGET RISK FUNDS (CONTINUED) Model Portfolio All-Equity Growth Vantagepoint Model Portfolio All-Equity Growth High long-term capital growth. The underlying fund invests, under normal circumstances, 100% of its net assets in equity s by investing in a combination of other Vantagepoint s and one or more third-party exchange-traded funds ( ETFs ) whose assets are invested, under normal circumstances, at least 80% in equity securities (common and preferred stock) or instruments that provide equity exposure. of s ETF Asset Allocation Equity Income/Interest Rate Large Investor Risk Additional Information about Milestone and Model Portfolio s The Milestone s are target date funds and the Model Portfolio s are target risk funds. Each invests substantially all of its assets in the single Vantagepoint Milestone ( Milestone ) or Vantagepoint Model Portfolio ( Model Portfolio ) that shares its name and investment objective. In turn, each underlying Milestone or Model Portfolio is a fund of funds that invests substantially all of its assets in other Vantagepoint s and one or more third-party ETFs, generally in amounts within the allocation ranges set out in this Guide. By investing in this way, each Milestone or Model Portfolio is exposed to the risks as well as the potential rewards of its underlying funds and of the portfolio holdings and strategies of those funds. Target Date s The targeted allocation of each Milestone s assets among other Vantagepoint s and the asset classes they represent is determined by Vantagepoint Investment Advisers, LLC ( VIA ), the investment adviser to The Vantagepoint s. Over time, VIA will adjust each dated Milestone s targeted allocations to its underlying funds, to gradually reduce the fund s exposure to equity investments as the fund s target date (the year in its name) approaches and continuing for about 10 years after that date. At that time, the fund will reach its landing point and its targeted allocations will be become constant. For example, 35 years before the year in the fund s name, its asset allocation mix is expected to be approximately 95% equity and 5% fixed income. At its landing point (10 years after its target date ), its targeted allocation is expected to be approximately 25% equity, 55% fixed income, and 20% multi-strategy. The goal of changing the asset allocation targets is to seek to reduce each dated Milestone s investment risk over time, as its investors move toward and into their retirement and begin making gradual withdrawals from the fund. However, there is no guarantee that this goal will be achieved and investors may lose money investing in the Milestone s. The sequence of asset allocation changes that the dated Milestone s are expected to follow is known as the glide path and is illustrated in the chart below. 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% All dated Milestone s expect to follow the same glide path, regardless of target year. 95% Equity 0% Multi-Strategy 5% Fixed Income Years until Retirement 47% Equity 17% Multi-Strategy 36% Fixed Income Target Date (Assumed Point of Retirement & When Withdrawals Begin) 25% Equity 20% Multi-Strategy 55% Fixed Income Fixed Income Multi-Strategy Equity Years after Retirement 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% 9

12 Vantagepoint Milestone s Allocation Ranges for Underlying Vantagepoint s 1 as of July 1, 2013 Retirement Income FIXED INCOME FUNDS Vantagepoint Low Duration Bond 26% 36% 12% 22% 7% 17% 3% 13% 0% 10% 0% 7% 0% 6% Vantagepoint Core Bond Index 4% 14% 2% 12% 3% 13% 7% 17% 9% 19% 6% 16% 2% 12% 0% 10% 0% 10% 0% 10% Vantagepoint Inflation Protected Securities 10% 20% 10% 20% 7% 17% 0% 10% EQUITY FUNDS Vantagepoint Equity Income 5% 15% 12% 22% 14% 24% 15% 25% 17% 27% 19% 29% 20% 30% 22% 32% 22% 32% 22% 32% Vantagepoint Growth & Income 5% 15% 6% 16% 6% 16% 6% 16% 7% 17% 9% 19% 10% 20% 10% 20% 11% 21% 11% 21% Vantagepoint Growth 1% 11% 3% 13% 3% 13% 4% 14% 5% 15% 6% 16% 7% 17% 8% 18% 8% 18% Vantagepoint Mid/Small Company Index 0% 8% 3% 13% 5% 15% 8% 18% 11% 21% 14% 24% 15% 25% 15% 25% Vantagepoint International 0% 9% 3% 13% 4% 14% 5% 15% 7% 17% 8% 18% 9% 19% 10% 20% 11% 21% 11% 21% Third-Party Emerging Markets ETF 0% 5% 0% 5% 0% 5% 0% 5% 0% 5% 0% 5% 0% 5% 0% 5% 0% 5% 0% 5% MULTI-STRATEGY FUND Vantagepoint Diversifying Strategies 15% 25% 13% 23% 12% 22% 11% 21% 9% 19% 7% 17% 3% 13% 0% 8% Target Risk s Each Model Portfolio seeks to obtain exposures to different asset classes and offer diversification, all in one fund, by allocating its assets among other Vantagepoint s and one or more third-party ETFs within the ranges listed below: Vantagepoint Model Portfolio s Allocation Ranges for Underlying Vantagepoint s 1 as of July 1, 2013 Conservative Growth Traditional Growth Long-Term Growth All-Equity Growth FIXED INCOME FUNDS Vantagepoint Low Duration Bond 14% 24% 3% 13% Vantagepoint Core Bond Index (Class I) 7% 17% 8% 18% 8% 18% Vantagepoint Inflation Protected Securities 5% 15% 0% 9% EQUITY FUNDS Vantagepoint Equity Income 6% 16% 7% 17% 8% 18% 13% 23% Vantagepoint Growth & Income 4% 14% 7% 17% 8% 18% 12% 22% Vantagepoint Growth 1% 11% 5% 15% 7% 17% 12% 22% Vantagepoint Select Value 0% 8% 1% 11% 4% 14% 5% 15% Vantagepoint Aggressive Opportunities 0% 8% 1% 11% 4% 14% 5% 15% Vantagepoint Discovery 0% 8% 0% 10% 4% 14% Vantagepoint International 2% 12% 6% 16% 9% 19% 12% 22% Third-Party Emerging Markets ETF 0% 5% 0% 5% 0% 5% 0% 5% MULTI-STRATEGY FUND Vantagepoint Diversifying Strategies 17% 21% 13% 17% 10% 14% 1 The Vantagepoint Fixed Income and Equity s that are underlying funds for certain VT s are described in this Guide. The Vantagepoint Diversifying Strategies is described on page

13 VANTAGETRUST U.S. STOCK INVESTMENT OPTIONS VantageTrust Name Underlying Registered Mutual Investment Objective Principal Investment Strategy Principal Risks LARGE CAP U.S. STOCK FUNDS Equity Income Vantagepoint Equity Income Long-term capital growth with consistency derived from dividend yield. The underlying mutual fund invests, under normal circumstances, at least 80% of its net assets in equity securities (common and preferred stock). The seeks to invest primarily in the common stocks of U.S. companies that the s subadvisers believe will pay dividends at above-market levels. As a result of the s income focus, certain sectors or industries may be emphasized. The may exhibit greater sensitivity to certain economic factors (e.g., changing interest rates) than will the general stock market. The may invest across companies of all sizes but generally focuses on larger capitalization companies, which tend to have stable long-term earnings and dividend-paying records. Equity Income/Interest Rate Multi-Manager VT Eaton Vance Large-Cap Value * Eaton Vance Large-Cap Value Total return. The underlying mutual fund invests its assets in a master fund, the Large-Cap Value Portfolio. Under normal market conditions, this master fund invests in value stocks of large-cap companies. The master fund invests at least 80% of its net assets in equity securities of large-cap companies. It also may invest in convertible debt securities of any credit quality (including securities rated below investment grade (so-called junk bonds )), and may invest up to 25% of its total assets in foreign securities, some of which may be located in emerging market countries. It may invest up to 10% of its net assets in real estate investment trusts ( REITs ) and may lend its securities. Emerging Markets REITs Securities Lending VT AllianzGI NFJ Dividend Value AllianzGI NFJ Dividend Value Long-term growth of capital and income. The underlying mutual fund normally invests at least 80% of its net assets (plus borrowings made for investment purposes) in common stocks and other equity securities of companies that pay or are expected to pay dividends. Under normal circumstances the underlying fund will invest primarily in common stocks of companies with market capitalizations greater than $3.5 billion. The underlying mutual fund s portfolio managers use a value investing style. It may also invest in REITs, foreign securities, and the securities of issuers located in emerging market countries. Emerging Markets REITs Active Trading VT Columbia Diversified Equity Income * Columbia Diversified Equity Income High level of current income and, as a secondary objective, steady growth of capital. The underlying mutual fund s assets are invested primarily in equity securities. Under normal market conditions, it will invest at least 80% of its net assets in dividend-paying common and preferred stocks. It also may invest in foreign securities. The underlying fund can invest in any economic sector and, at times, it may emphasize one or more particular sectors. VT Invesco Diversified Dividend Invesco Diversified Dividend Long-term growth of capital and, secondarily, current income. The underlying mutual fund invests primarily in dividend-paying equity securities. The principal type of equity security in which it invests is common stock. The underlying mutual fund invests in securities that its portfolio managers believe are undervalued based on various valuation measures. It may invest up to 25% of its net assets in securities of foreign issuers, and may also invest up to 20% of its net assets in investment-grade debt securities of U.S. issuers. In selecting investments, the portfolio managers seek to identify dividend-paying issuers with strong profitability, solid balance sheets and capital allocation policies that support sustained or increasing dividends and share repurchases. Call Risk Risk *Not available to new Plans. 11

14 VANTAGETRUST U.S. STOCK INVESTMENT OPTIONS VantageTrust Name Underlying Registered Mutual Investment Objective Principal Investment Strategy Principal Risks LARGE CAP U.S. STOCK FUNDS (CONTINUED) 500 Stock Index Vantagepoint 500 Stock Index Long-term capital growth by approximating the performance of the S&P 500 Index. The underlying mutual fund invests, under normal circumstances, at least 90% of its net assets in stocks included in the S&P 500 Index, weighted to seek to replicate the investment characteristics of the S&P 500 Index and performance that correlates with that of the index. The follows an indexed or passively managed approach to investing. Indexing Growth & Income Vantagepoint Growth & Income Long-term capital growth and current income. The underlying mutual fund invests, under normal circumstances, primarily in U.S. common stocks that the s subadvisers believe offer the potential for capital appreciation, that may provide current income by paying dividends. Strategies used by the s subadvisers include: 1) focusing on largecapitalization U.S. companies whose common stocks are believed to offer potential for price appreciation because of undervaluation, earnings growth, or both; and 2) emphasizing U.S. stocks that may pay dividends. Equity Income/Interest Rate Multi-Manager Broad Market Index Vantagepoint Broad Market Index Long-term capital growth by approximating the performance of the Russell 3000 Index. The underlying mutual fund invests, under normal circumstances, at least 90% of its net assets in equity issuers included in the Russell 3000 Index, selected and weighted to seek to result in investment characteristics comparable to those of that index and performance that correlates with the performance of that index. The follows an indexed or passively managed approach to investing. Indexing VT Oppenheimer Main Street Oppenheimer Main Street High total return. The underlying mutual fund mainly invests in common stocks of U.S. companies of different capitalization ranges. Its portfolio manager currently focuses on larger capitalization issuers, which are considered to be companies with market capitalizations equal to the companies in the Russell 1000 Index and its portfolio consists of both growth and value stocks. Growth Vantagepoint Growth Long-term capital growth. The underlying mutual fund invests, under normal circumstances, primarily in U.S. common stocks that are considered by the s subadvisers to have above-average potential for growth. The subadvisers emphasize stocks of seasoned medium- and large-capitalization firms. Multi-Manager VT Calvert Equity Portfolio Calvert Equity Portfolio Growth of capital through investment in stocks of issuers in industries believed to offer opportunities for potential capital appreciation and which meet the underlying mutual fund s investment criteria, including financial, sustainability, and social responsibility factors. Under normal circumstances, the underlying mutual fund will invest at least 80% of its net assets (including borrowings for investment purposes) in equity securities (common stock). It invests primarily in the common stocks of U.S. large-cap companies, defined as those whose market capitalization falls within the range of the S&P 500 Index. The underlying fund also invests in mid-cap stocks and may invest up to 25% of its net assets in foreign stocks. 12

15 VANTAGETRUST U.S. STOCK INVESTMENT OPTIONS VantageTrust Name Underlying Registered Mutual Investment Objective Principal Investment Strategy Principal Risks LARGE CAP U.S. STOCK FUNDS (CONTINUED) VT T. Rowe Price Growth Stock T. Rowe Price Growth Stock Long-term capital growth and, secondarily, increasing dividend income through investments in the common stocks of well-established growth companies. The underlying mutual fund will normally invest at least 80% of its net assets in the common stocks of a diversified group of growth companies. While most of its assets will typically be invested in U.S. common stocks, the underlying mutual fund may invest in foreign stocks in keeping with its objectives. VT Fidelity Contrafund Fidelity Contrafund Capital appreciation. The underlying mutual fund normally invests in common stocks of domestic and foreign issuers and also may invest in convertible securities and preferred stocks. Its assets are invested in securities of companies whose value its portfolio managers believe are not fully recognized by the public. The types of companies in which it may invest include companies experiencing positive fundamental changes that should lead to improved pricing. At any given time, it may be invested in growth stocks or value stocks or a combination of both types. MID-CAP U.S. STOCK FUNDS Select Value Vantagepoint Select Value Long-term growth from dividend income and capital appreciation. The underlying mutual fund invests, under normal circumstances, primarily in common stocks of mid-capitalization U.S. companies that the s subadvisers believe present attractive investment opportunities at favorable prices in relation to the intrinsic worth of the issuer and may offer the possibility for growth through reinvestment of dividends. The generally seeks to invest in common stocks of companies with market capitalizations that fall within the range of companies in the Russell Midcap Value Index. The may invest up to 10% of its net assets in REITs. Equity Income/Interest Rate REITs Multi-Manager VT Columbia Mid Cap Value Columbia Mid Cap Value Long-term capital appreciation. Under normal circumstances, the underlying mutual fund invests at least 80% of its net assets in equity securities of companies that have market capitalizations in the range of the companies in the Russell Midcap Value Index at the time of purchase, that its manager believes to be undervalued and to have the potential for long-term growth. It also may invest in foreign securities and REITs. REITs VT Goldman Sachs Mid Cap Value Goldman Sachs Mid Cap Value Long-term capital appreciation. The underlying mutual fund invests, under normal circumstances, at least 80% of its net assets in a diversified portfolio of equity investments of mid-cap issuers with public stock market capitalizations within the range of the market capitalization of companies constituting the Russell Midcap Value Index. Although the underlying fund will invest primarily in publicly traded U.S. securities, it may invest in foreign securities, including emerging market countries and securities quoted in foreign currencies. Emerging Markets 13

16 VANTAGETRUST U.S. STOCK INVESTMENT OPTIONS VantageTrust Name Underlying Registered Mutual Investment Objective Principal Investment Strategy Principal Risks MID-CAP U.S. STOCK FUNDS (CONTINUED) Mid/ Small Company Index Vantagepoint Mid/ Small Company Index Long-term capital growth by approximating the performance of the Russell 2500 Index. The underlying mutual fund invests, under normal circumstances, at least 90% of its net assets in equity issuers included in the Russell 2500 Index, selected and weighted to seek to replicate the investment characteristics of the Russell 2500 Index and performance that correlates with the performance of that index. The follows an indexed or passively managed approach to investing. REITs Indexing VT CRM Small/Mid Cap Value CRM Small/Mid Cap Value Long-term capital appreciation. Under normal circumstances, the underlying mutual fund invests at least 80% of its assets in a diversified portfolio of equity and equity-related securities of U.S. and non-u.s. companies with market capitalizations, at the time of initial purchase, within the range of to those in the Russell 2500 Value Index or in the S&P Mid Cap 400/Citigroup Value Index that are publicly traded on a U.S. securities market and pursues a value strategy. Equity and equity-related securities include: common stock, preferred stock, securities convertible into common stock, and warrants. Aggressive Opportunities Vantagepoint Aggressive Opportunities High long-term capital appreciation. The underlying mutual fund invests, under normal circumstances, primarily in common stocks of small- to mid-capitalization U.S. and foreign companies. One or more of the s subadvisers employing an actively-managed strategy seeks to select common stocks it believes offer the opportunity for high capital appreciation. In addition, a portion of the invests in (or obtains exposure to) stocks included in a custom version of the Russell Midcap Growth Index, following an indexed or passively managed approach to investing. The range of stocks in which the generally invests is expected to be that of the Russell Midcap Index. Indexing Multi-Manager VT Rainier Small/Mid Cap Equity * Rainier Small/Mid Cap Equity Portfolio Long-term capital appreciation. The underlying mutual fund invests at least 80% of its assets in the common stock of small- and mid-capitalization companies traded in the U.S. Although the underlying mutual fund does not expect to maintain significant positions in such securities on a normal basis, it may invest up to 25% of its assets in foreign securities. These include U.S. dollar denominated securities of foreign issuers and securities of foreign issuers that are listed and traded on a domestic national securities exchange, such as ADRs. VT TimesSquare Mid Cap Growth TimesSquare Mid Cap Growth Long-term capital appreciation. Under normal circumstances, the underlying mutual fund invests at least 80% of its net assets, plus the amount of any borrowings for investment purposes, in common and preferred stocks of U.S. mid-capitalization companies. Its portfolio managers considers the term mid-capitalization companies to refer to companies that, at the time of purchase, are within the range of capitalizations of companies in the Russell Midcap Growth Index. VT Harbor Mid Cap Growth Harbor Mid Cap Growth Long-term growth of capital. The underlying mutual fund invests, primarily in equity securities, principally common and preferred stocks of mid-cap companies (defined as those that fall within the range of the Russell Midcap Growth Index). Under normal market conditions, it invests at least 80% of its net assets, plus borrowings for investment purposes, in a diversified portfolio of equity securities of midcap companies. The underlying mutual fund may invest up to 25% of its total assets in the securities of foreign issuers, including issuers located or doing business in emerging markets. Emerging Markets 14