Children's Home Society of Florida 403(b) Plan

Transcription

1 Children's Home Society of Florida 403(b) Plan

2 Dear Plan Participant, Unpredictability it s the one thing about the future we can all agree on. But while it s true that none of us can see the future, we can take steps to prepare for it. Your employer-sponsored retirement Plan is a tool that can help you manage unpredictability. It can help you plan for a future that may be a long way away, but one which will be here sooner than you think. When it comes to retirement planning, you can t afford to say I ll cross that bridge when I come to it. What you do today affects how you ll live tomorrow. This guide will start you on the journey toward planning the retirement you want. It outlines the key steps you need to take to begin saving for retirement, which include:» Enrolling in Your Plan» Deciding How Much to Save» Selecting Your Investments But more than just identifying the steps, you ll learn why each one is important. And you ll also find out about some great resources that can help you along the way. As you ll see, getting started is easy, and we ll be with you through each step you make toward a successful retirement. Regards, Children's Home Society of FL. Tips to Help Improve Your Retirement Strategy Success Consolidate Your Assets Roll money from any prior employer retirement plans into your current plan to potentially make it easier to manage your retirement strategy through a single account. Save As Much As You Can The more you save now, the more you ll potentially have when you retire. Take Advantage of Catch-Up Contributions Use Catch-Up contributions to help close any gap in your retirement savings by contributing above the standard limits.

3 Children s Home Society of Florida 403(b) Plan Features and Highlights Read these highlights to learn more about your Plan. If there are any discrepancies between this document and the Plan Document the Plan Document will govern. About the 403(b) Tax-Deferred Retirement Plan A 403(b) plan is a retirement savings plan designed for employees of public schools and tax-exempt organizations. A 403(b) plan allows eligible employees to supplement any existing retirement and pension benefits by saving and investing before tax dollars through a voluntary salary contribution. Contribution and any earnings on contributions are tax-deferred until money is withdrawn. Eligibility Requirements You are eligible to enroll immediately following your date of hire. The following employees are not eligible to participate in the Plan: Leased employees Temporary employees Independent contractors Non resident alien employees Student employees of an educational institution Please see your Summary Plan Description for additional excluded employees Enrollment You may enroll by completing a Paycheck Contribution Election form and returning it to your Payroll Department Contribution Limits Combined maximum limit of 100% of your compensation or $16,500, whichever is less for all retirement contributions, or; Standard catch-up allows participants in the three calendar year prior to normal retirement age to contribute more (up to double the annual contribution limit $33,000). Participants turning age 50 or older in 2011 may contribute an additional $5,500. Please note that you may not use the "Standard" catch-up provision and the Age 50+ catch-up provision in the same year. Employer Contributions Your employer matches 100% of your contribution up to the first 3% of included compensation. Your employer contributes a tiered employer nonelective contribution. A uniform percentage of each tier of each eligible participant s applicable contribution is determined as follows: Years of Contribution Service Percentage 3 Years 1% 5 Years 2% 7 Years 3% 10 Years 4% 10 Years* 6% *(Attained before October 2007) To be eligible for the employer contributions employees must meet the following criteria: Age 21 Completed 6 consecutive months of service Vesting Schedule Vesting refers to the percentage of your account you are entitled to receive upon the occurrence of distributable events. Your contributions and any earnings are always 100% vested (including rollovers from previous employers). The value of employer matching and profit sharing contributions to the Plan, and any earnings they generate, are vested as follows: Years of Vested Percentage of Service Employer Contributions 0-2 years 0% 3 years 100% Investment Options 1 A wide array of core investment options is available through your Plan. Each option is explained in further detail in your Plan s fund sheets. Once you have enrolled, investment option information is also available through the Web site at or call KeyTalk toll free at (800) The Web site and KeyTalk are available to you 24 hours a day, 7 days a week 2. Transfers and Allocation Changes Use your Personal Identification Number (PIN) and Username to access the Web site or you can use your social security number and PIN to access KeyTalk. You can move all or a portion of your existing balances between investment options (subject to Plan rules) and change how your payroll contributions are invested. Rollovers Only Plan Administrator approved balances from an eligible governmental 457(b), 401(k), 403(b) or 401(a) 1

4 plan or an Individual Retirement Account (IRA) may be rolled over to the Plan. Distributions you receive prior to age 59 ½ may be subject to the 10% early withdrawal federal tax penalty. Withdrawals Qualifying distribution events are as follows: Retirement Permanent disability Financial hardship (as defined by the Internal Revenue Code and your Plan s provisions) Severance of employment (as defined by the Internal Revenue Code provisions) Attainment of age 59 ½ Death (your beneficiary receives your benefits) Traditional Accounts and Matching Contributions Ordinary income tax will apply to each distribution. Distributions received prior to age 59 ½ may also be assessed a 10% early withdrawal federal tax penalty. Refer to your Summary Plan Description for more information about distributions. Plan Fees Recordkeeping or Administrative Fees: Please see your employer for additional fees. Distribution Fees: There are no Plan distribution fees. Investment Option Fees: Each investment option has an investment management fee that varies by investment option. These fees are deducted by each investment option s management company before the daily price or performance is calculated. Fees pay for trading of securities within the investment options and other management expenses. There is a $50.00 origination fee for each loan, plus an ongoing annual $ fee. How Can I Get More Information? Visit the Web site at or call KeyTalk toll-free at (800) for more information. The Web site provides information regarding your Plan, as well as financial education information, financial calculators and other tools to help you manage your account. 1 All information contained on the Web site, in prospectuses and other investment option documents is offered in English. Please have this information translated for your understanding. 2 Access to KeyTalk and the Web site may be limited or unavailable during periods of peak demand, market volatility, systems upgrades and maintenance, or other reasons. The account owner is responsible for keeping the assigned PIN confidential. Please contact a client service representative immediately if you suspect any unauthorized use. Securities, when offered, are offered through GWFS Equities, Inc., and/or other broker dealers. GWFS Equities, Inc. is a wholly owned subsidiary of Great- West Life & Annuity Insurance Company and an affiliate of FASCore, LLC (FASCore Administrators LLC in California) and First Great-West Life & Annuity Insurance Company, White Plains, New York. Great-West Retirement Services refers to products and services provided by Great-West Life & Annuity Insurance Company, FASCore, LLC (FASCore Administrators LLC in California), First Great-West Life & Annuity Insurance Company, White Plains, New York and their subsidiaries and affiliates. Great- West Life & Annuity Insurance Company is not licensed to conduct business in New York. Insurance products and related services are sold in New York by its subsidiary, First Great-West Life & Annuity Insurance Company. Other products and services may be sold in New York by FASCore, LLC Great-West Life & Annuity Insurance Company. All rights reserved. Form# (08/12/2011) Custom FT There may be a recordkeeping or administrative fee for investing in certain investment options. Please contact your Great-West Retirement Services representative for more information about any potential investment option fees. Funds may impose redemption fees on certain transfers, redemptions or exchanges. There are additional quarterly fees and/or transaction fees to participate in the Self-Directed Brokerage Option. Please see your Plan s Web site for more information. Loans Your Plan allows you to borrow the lesser of $50,000 or 50% of your total vested account balance. The minimum loan amount is $1,000 and you have up to 5 years to repay your loan up to 15 years if the money is used to purchase your primary residence. 403(b) Tax-Deferred Retirement Plan 2

5 Children's Home Society of Florida 403(b) Plan Investment Performance as of 07/29/2011 Current performance may be lower or higher than performance data shown. Performance data quoted represents past performance and is not a guarantee or prediction of future results. For performance data current to the most recent month-end, please visit The investment return and principal value of an investment will fluctuate so that, when redeemed, shares/units may be worth more or less than their original cost. Please consider the investment objectives, risk, fees and expenses carefully before investing. For this and other important information, you may obtain mutual fund prospectuses for registered investment options and/or disclosure documents from your Registered Representative. Read them carefully before investing. An investment in a money market fund is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other governmental agency. Although the fund seeks to preserve the value of your investment at $1.00 per share, it is possible to lose money by investing in the fund. For fund objective and asset allocation information for your plan's investment options, please refer to the Fund Fact Sheet or Prospectus. INVESTMENT OPTION Asset Allocation Ticker Gross/Net Expense Ratio Inception Date Returns as of Month Ending 07/29/2011 Returns as of Quarter Ending 06/30/2011 Calendar Year Returns 1 Month YTD 1 Year 3 Year 5 Year 10 Year/ Since Inception 3 1 Month Year 3 Year 5 Year 10 Year/ Since Inception American Funds 2010 Target Date Fund R4 2 RDATX 0.83 / N/A N/A American Funds 2015 Target Date Fund R4 2 RDBTX 0.85 / N/A N/A American Funds 2020 Target Date Fund R4 2 RDCTX 0.87 / N/A N/A American Funds 2025 Target Date Fund R4 2 RDDTX 0.89 / N/A N/A American Funds 2030 Target Date Fund R4 2 RDETX 0.90 / N/A N/A American Funds 2035 Target Date Fund R4 2 RDFTX 0.91 / N/A N/A American Funds 2040 Target Date Fund R4 2 RDGTX 0.91 / N/A N/A American Funds 2045 Target Date Fund R4 2 RDHTX 0.92 / N/A N/A American Funds 2050 Target Date Fund R4 2 RDITX 0.92 / N/A N/A International Funds Mutual Global Discovery Fund - R 3,7,9 TEDRX 1.54 / Templeton Foreign Fund - R 3,7,9 TEFRX 1.44 / Templeton Growth Fund - R 3,7,8,9 TEGRX 1.35 / Specialty Nuveen Real Estate Securities A 3,9 FREAX 1.29 / Franklin Utilities Fund - R 3,9 FRURX 1.13 / Small Cap Funds Franklin MicroCap Value Fund - A 3,6,9 FRMCX 1.25 / Aug Investment Options at a Glance Page 1 of 3

6 Children's Home Society of Florida 403(b) Plan (Continued) INVESTMENT OPTION Ticker Gross/Net Expense Ratio Inception Date Returns as of Month Ending 07/29/2011 Returns as of Quarter Ending 06/30/2011 Calendar Year Returns 1 Month YTD 1 Year 3 Year 5 Year 10 Year/ Since Inception 3 1 Month Year 3 Year 5 Year 10 Year/ Since Inception INVESCO Small Cap Equity A 3,6,9 SMEAX 1.38 / Pioneer Growth Opportunities R 3,6,9 PGRRX 1.55 / Mid Cap Funds Fidelity Advisor Leveraged Co Stock T 3,4,9 FLSTX 1.37 / Franklin Flex Cap Growth Fund - R 3,4,9 FRCGX 1.28 / Mutual Beacon Fund A 3,4,9 TEBIX 1.18 / Large Cap Funds American Funds Growth Fund of America R3 RGACX 0.97 / Franklin DynaTech Fund - A 3,9 FKDNX 1.03 / Franklin Growth Fund - R 3,9 FGSRX 1.21 / Franklin Large Cap Value R 3,9 FLCRX 1.65 / Balanced Franklin Income Fund - R 3,9 FISRX 1.00 / Franklin Templeton Conservative Alloc R 3,9 FTCRX 1.46 / Franklin Templeton Growth Allocation R 3,9 FGTRX 1.63 / Franklin Templeton Moderate Allocation R 3,9 FTMRX 1.52 / Bond Franklin Strategic Income Fund R 3,5,9 FKSRX 1.15 / Franklin US Government Securities Fund R 3,5,9 FUSRX 1.09 / Vanguard Total Bond Market Index Fund 3,5,9 VBMFX 0.22 / Money Market Federated Prime Obligations Fund Trust (7-day SEC yield: 0.01%) 1,3,9 POLXX 0.79 / These returns and fund operating expenses are expressed as percentages. 3, 5 and 10 Year/Since Inception returns shown are annualized. For 10 Year/Since Inception, if the fund was not in existence for 10 years, returns shown are since inception. If the fund is less than one year old, returns are not annualized. Funds may impose redemption fees, and/or transfer restrictions, on certain transfers, redemptions or exchanges if assets are held less than the period stated in the fund's prospectus or other disclosure documents. For more information, please refer to the fund's prospectus and/or disclosure documents. On occasion, the name and/or objective of an investment option may change. For specific information on whether the investment name has changed within the past year, or if the investment objective has changed in the last ten years, please contact your Service Representative for a current prospectus. Investment decisions should not be based solely on the performance data contained herein. Although data is gathered from reliable sources, the completeness or accuracy of the data cannot be guaranteed. Although they have higher return potential, high-yield bonds are also subject to greater risk, including the risk of default, compared to higher rated securities. Aug Investment Options at a Glance Page 2 of 3

7 Children's Home Society of Florida 403(b) Plan (Continued) Securities, when offered, are offered through GWFS Equities, Inc., and/or other broker dealers. GWFS Equities, Inc. is a wholly owned subsidiary of Great-West Life & Annuity Insurance Company. GWFS Equities, Inc., or one or more of its affiliates, may receive a fee from the investment option provider for providing certain recordkeeping, distribution, and administrative services. Great-West Retirement Services refers to products and services provided by Great-West Life & Annuity Insurance Company and its subsidiaries and affiliates. Not intended for use in New York. Expense ratios shown on participant and plan level statements are gross expense ratios and do not include any applicable fee waivers or expense reimbursements, as do net expense ratios. The expense ratios may be based on a prior reporting period than those shown on the Plan's investment performance report. For the most current expense ratios, including the net expense ratios, please visit and review the investment performance report. 1 The 7-day yield more closely reflects the current earnings of the money market fund than the annualized total return quotation. 2 Asset allocation funds may be subject to a fund operating expense at the fund level, as well as a prorated fund operating expense of each underlying fund in which they invest. For more information, please refer to the fund prospectus and/or other disclosure documents. 3 Mutual Fund Option. The inception date is that of the fund's original share class. Performance returns for mutual fund options in your Plan offering a different share class with a more current inception date have been adjusted to reflect the fees and charges associated with the actual share class. For more information on the actual share class offered through your Plan, please refer to the Fund Fact Sheets on the web site. 4 Equity securities of medium-sized companies may be more volatile than securities of larger, more established companies. 5 A bond fund's yield, share price, and total return change daily and are based on changes in interest rates, market conditions, economic and political news, and the quality and maturity of its investments. In general, bond prices fall when interest rates rise, and vice versa. Although they have higher return potential, high yield bonds are also subject to greater risk, including the risk of default, compared to higher-rated securities. 6 Equity securities of small-sized companies may be more volatile than securities of larger, more established companies. 7 Foreign funds involve special risks, including currency fluctuations and political developments. 8 This investment option is no longer available. From time to time an investment option under the Plan may be closed. Closed investment options are no longer available for new deposits or transfers. 9 The historic performance information quoted is provided by Morningstar, Inc Morningstar, Inc. All Rights Reserved. The information contained herein: (1) is proprietary to Morningstar and/or its content providers; (2) may not be copied or distributed; and (3) is not warranted to be accurate, complete or timely. Neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of this information. Past performance is no guarantee of future results. Aug Investment Options at a Glance Page 3 of 3

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9 Federated Prime Obligations Fund Trust Fund Manager: Management Team Fund Operating Expenses: 0.70% POLXX_2 American Funds Growth Fund of America R3 Fund Manager: Team Managed Fund Operating Expenses: 0.97% RGACX_2 Fidelity Advisor Leveraged Co Stock T Fund Manager: Soviero Fund Operating Expenses: 1.37% FLSTX_2 American Funds 2010 Target Date Fund R4 Fund Manager: Team Managed Fund Operating Expenses: 0.73% RDATX_2 The investment seeks to maintain a stable NAV of $ 1.00 per share. The fund invests primarily in a portfolio of short-term, high-quality, fixed-income securities issued by banks, corporations and the U.S. government. It may also invest in government securities that are supported by the full faith and credit of the U.S. government, such as those issued by the Government National Mortgage Association. The fund may invest in a few government securities which are regarded as having implied support because the federal government sponsors their activities. Money market investments may be most appropriate for someone wanting to safeguard principal value or to balance a portfolio which contains more aggressive investments. The investor may be nearing retirement and requiring stability and asset liquidity. An investment in a money market investment is neither insured nor guaranteed by the U.S. government. Yields may vary. The investment seeks capital growth by investing in common stocks. The fund invests primarily in common stocks and seeks to invest in companies that appear to offer superior opportunities for growth of capital. It may invest a portion of its assets in securities of issuers domiciled outside the U.S. The fund may also hold cash or money market instruments. Large-cap investments may be most appropriate for someone willing to accept market fluctuations in return for long-term capital growth. Stock investments tend to be more volatile than bond or money market investments. The investment seeks capital appreciation. The fund normally invests at least 80% of assets in stocks. It normally invests its assets primarily in common stocks of leveraged companies defined as companies that issue lower-quality debt and other companies with leveraged capital structures. The fund may also invest the fund s assets in lower-quality debt securities. It may invest the fund s assets in securities of foreign issuers in addition to securities of domestic issuers. Mid-cap investments may be most appropriate for someone seeking higher potential returns over time and willing to weather market downturns. Equity securities of medium-sized companies may be more volatile than securities of larger, more established companies. The investment seeks growth, income and conservation of capital. The fund normally invests greater portion of assets in bond, equity-income and balanced funds as it approaches and passes its target date. It attempts to achieve its objectives by investing in a mix of American funds. This investment option may be most appropriate for someone whose highest priority is principal security and is willing to accept lower potential return. The investor may be approaching retirement, with a short time horizon, or may prefer to take less risk than other investors. Investors choosing this option want to invest in a mixture of diverse investments suiting their needs but do not have the time, desire, or knowledge to select and manage their own portfolios. Page 1 of 9

10 Nuveen Real Estate Securities Fund A Fund Manager: Sedlak/Wenker/Rosenberg Fund Operating Expenses: 1.29% FREAX_2 American Funds 2015 Target Date Fund R4 Fund Manager: Team Managed Fund Operating Expenses: 0.75% RDBTX_2 American Funds 2020 Target Date Fund R4 Fund Manager: Team Managed Fund Operating Expenses: 0.77% RDCTX_2 American Funds 2025 Target Date Fund R4 Fund Manager: Team Managed Fund Operating Expenses: 0.79% RDDTX_2 The investment seeks to provide above average current income and long-term capital appreciation. The fund normally invests at least 80% of net assets, plus the amount of any borrowings for investment purposes, in income-producing common stocks of publicly traded companies engaged in the real estate industry. It may also invest up to 25% of assets, collectively, in non-dollar denominated and dollar-denominated equity securities of foreign issuers that are either listed on a U.S. stock exchange or represented by depositary receipts that may or may not be sponsored by a domestic bank. The fund is non-diversified. Specialty investments may be most appropriate for someone looking for greater potential returns and willing to accept a higher degree of risk. Specialty funds that invest in a specific industry sector may be more volatile than funds with more diversified investments. The investment seeks growth, income and conservation of capital. The fund normally invests greater portion of assets in bond, equity-income and balanced funds as it approaches and passes its target date. It attempts to achieve its objectives by investing in a mix of American funds. This investment option may be most appropriate for someone whose highest priority is principal security and is willing to accept lower potential return. The investor may be approaching retirement, with a short time horizon, or may prefer to take less risk than other investors. Investors choosing this option want to invest in a mixture of diverse investments suiting their needs but do not have the time, desire, or knowledge to select and manage their own portfolios. The investment seeks growth, income and conservation of capital. The fund normally invests greater portion of assets in bond, equity-income and balanced funds as it approaches and passes its target date. It attempts to achieve its objectives by investing in a mix of American funds. This investment option may be most appropriate for someone willing to take some risk to achieve higher potential returns but with a preference for some principal security. The investor may be approaching retirement, with a short to medium time horizon, or may prefer to take less risk than other investors. Investors choosing this option want to invest in a mixture of diverse investments suiting their needs but do not have the time, desire, or knowledge to select and manage their own portfolios. The investment seeks growth, income and conservation of capital. The fund normally invests greater portion of assets in bond, equity-income and balanced funds as it approaches and passes its target date. It attempts to achieve its objectives by investing in a mix of American funds. This investment option may be most appropriate for someone willing to take some risk to achieve higher potential returns but with a preference for some principal security. The investor may be approaching retirement, with a short to medium time horizon, or may prefer to take less risk than other investors. Investors choosing this option want to invest in a mixture of diverse investments suiting their needs but do not have the time, desire, or knowledge to select and manage their own portfolios. Page 2 of 9

11 American Funds 2030 Target Date Fund R4 Fund Manager: Team Managed Fund Operating Expenses: 0.80% RDETX_2 American Funds 2035 Target Date Fund R4 Fund Manager: Team Managed Fund Operating Expenses: 0.81% RDFTX_2 American Funds 2040 Target Date Fund R4 Fund Manager: Team Managed Fund Operating Expenses: 0.81% RDGTX_2 American Funds 2045 Target Date Fund R4 Fund Manager: Team Managed Fund Operating Expenses: 0.82% RDHTX_2 The investment seeks growth, income and conservation of capital. The fund normally invests greater portion of assets in bond, equity-income and balanced funds as it approaches and passes its target date. It attempts to achieve its objectives by investing in a mix of American funds. This investment option may be most appropriate for someone willing to balance the risk of principal fluctuation with the potential for greater capital growth over time. The investor may have a short, medium, or long time horizon. Investors choosing this option want to invest in a mixture of diverse investments suiting their needs but do not have the time, desire, or knowledge to select and manage their own portfolios. The investment seeks growth, income and conservation of capital. The fund normally invests greater portion of assets in bond, equity-income and balanced funds as it approaches and passes its target date. It attempts to achieve its objectives by investing in a mix of American funds. This investment option may be most appropriate for someone willing to balance the risk of principal fluctuation with the potential for greater capital growth over time. The investor may have a short, medium, or long time horizon. Investors choosing this option want to invest in a mixture of diverse investments suiting their needs but do not have the time, desire, or knowledge to select and manage their own portfolios. The investment seeks growth, income and conservation of capital. The fund normally invests greater portion of assets in bond, equity-income and balanced funds as it approaches and passes its target date. It attempts to achieve its objectives by investing in a mix of American funds. This investment option may be most appropriate for someone with a high priority for capital growth and willing to accept a greater degree of risk. The investor is comfortable with the ups and downs of the market and has a medium to long investment horizon. Investors choosing this option want to invest in a mixture of diverse investments suiting their needs but do not have the time, desire, or knowledge to select and manage their own portfolios. The investment seeks growth, income and conservation of capital. The fund normally invests greater portion of assets in bond, equity-income and balanced funds as it approaches and passes its target date. It attempts to achieve its objectives by investing in a mix of American funds. This investment option may be most appropriate for someone with a high priority for capital growth and willing to accept a greater degree of risk. The investor is comfortable with the ups and downs of the market and has a medium to long investment horizon. Investors choosing this option want to invest in a mixture of diverse investments suiting their needs but do not have the time, desire, or knowledge to select and manage their own portfolios. Page 3 of 9

12 American Funds 2050 Target Date Fund R4 Fund Manager: Team Managed Fund Operating Expenses: 0.82% RDITX_2 Franklin Utilities Fund - R Fund Manager: Schmicker/Kohli Fund Operating Expenses: 1.13% FRURX_2 Franklin Flex Cap Growth R Fund Manager: Moberg/Herrmann Fund Operating Expenses: 1.27% FRCGX_2 Franklin Income Fund R Fund Manager: Perks/Johnson Fund Operating Expenses: 1.00% FISRX_2 The investment seeks growth, income and conservation of capital. The fund normally invests greater portion of assets in bond, equity-income and balanced funds as it approaches and passes its target date. It attempts to achieve its objectives by investing in a mix of American funds. This investment option is most appropriate for someone willing to weather market fluctuations in exchange for potentially higher long-term returns. The investor has a long investment horizon with at least fifteen years until retirement. Investors choosing this option want to invest in a mixture of diverse investments suiting their needs but do not have the time, desire, or knowledge to select and manage their own portfolios. The investment seeks capital appreciation and current income. The fund normally invests at least 80% of net assets in the securities of public utilities companies. These are companies that provide electricity, natural gas, water, and communications services to the public and companies that provide services to public utilities companies. It concentrates (invests more than 25% of total assets) in companies operating in the utilities industry. The fund invests primarily in equity securities, which consist mainly of common stocks. Specialty investments may be most appropriate for someone looking for greater potential returns and willing to accept a higher degree of risk. Specialty funds that invest in a specific industry sector may be more volatile than funds with more diversified investments. The investment seeks capital appreciation. The fund normally invests predominantly in equity securities of companies that the manager believes have the potential for capital appreciation. It has the flexibility to invest in companies located, headquartered, or operating inside and outside the United States and across the entire market capitalization spectrum from small, emerging growth companies to well-established, large-cap companies. The fund may invest a substantial portion of assets in smaller and mid-size companies. Large-cap investments may be most appropriate for someone willing to accept market fluctuations in return for long-term capital growth. Stock investments tend to be more volatile than bond or money market investments. The investment seeks to maximize income while maintaining prospects for capital appreciation. The fund normally invests in a diversified portfolio of debt and equity securities. It may invest up to 100% of total assets in debt securities that are rated below investment grade, including a portion in defaulted securities. The fund maintains the flexibility to invest in securities of companies from a variety of sectors, but from time to time, it may have significant investments in particular sectors. The fund may also invest up to 25% of assets in foreign securities and invest up to 10% of net assets in equity-linked notes. This investment option may be most appropriate for someone willing to take some risk to achieve higher potential returns but with a preference for some principal security. The investor may be approaching retirement, with a short to medium time horizon, or may prefer to take less risk than other investors. Investors choosing this option want to invest in a mixture of diverse investments suiting their needs but do not have the time, desire, or knowledge to select and manage their own portfolios. Page 4 of 9

13 Franklin Templeton Conservative Alloc R Fund Manager: Coffey Fund Operating Expenses: 1.40% FTCRX_2 Franklin Templeton Growth Allocation R Fund Manager: Coffey Fund Operating Expenses: 1.57% FGTRX_2 Franklin MicroCap Value Fund - A Fund Manager: Team Managed Fund Operating Expenses: 1.23% FRMCX_2 Franklin Templeton Moderate Allocation R Fund Manager: Coffey Fund Operating Expenses: 1.47% FTMRX_2 The investment seeks the highest level of long-term total return. The fund invests primarily in other mutual funds, predominately other Franklin Templeton mutual funds (underlying funds). The investment manager uses the following as a general guide in allocating the fund s assets among the broad asset classes. These percentages may be changed from time to time by the fund s manager without the approval of shareholders, and may vary up to 5% from the stated allocations: 20% short-term investments; 40% equity funds; and 40% fixed-income funds. This investment option may be most appropriate for someone willing to take some risk to achieve higher potential returns but with a preference for some principal security. The investor may be approaching retirement, with a short to medium time horizon, or may prefer to take less risk than other investors. Investors choosing this option want to invest in a mixture of diverse investments suiting their needs but do not have the time, desire, or knowledge to select and manage their own portfolios. The investment seeks the highest level of long-term total return. The fund invests its assets in other mutual funds, predominately other Franklin Templeton mutual funds (underlying funds). The investment manager uses the following as a general guide in allocating the fund s assets among the broad asset classes. These percentages may be changed from time to time by the fund s investment manager without the approval of shareholders, and may vary up to 5% from the stated allocations: 5% short-term investments; 80% equity funds; and 15% fixed-income funds. This investment option may be most appropriate for someone with a high priority for capital growth and willing to accept a greater degree of risk. The investor is comfortable with the ups and downs of the market and has a medium to long investment horizon. Investors choosing this option want to invest in a mixture of diverse investments suiting their needs but do not have the time, desire, or knowledge to select and manage their own portfolios. The investment seeks high total return, of which capital appreciation and income are components. The fund normally invests at least 80% of net assets in investments of micro-cap companies which are those with market capitalizations under $400 million at the time of purchase. It generally invests in equity securities of companies that the manager believes are currently undervalued and have the potential for capital appreciation. The fund may invest up to 25% of total assets in foreign securities. Small-cap investments may be most appropriate for someone with a longer investment horizon, seeking long-term capital growth, and willing to accept larger market fluctuations. Equity securities of small-sized companies may be more volatile than securities of larger, more established companies. The investment seeks the highest level of long-term total return. The fund invests primarily its assets in other mutual funds, predominately other Franklin Templeton mutual funds (underlying funds). The investment manager uses the following as a general guide in allocating the fund s assets among the broad asset classes. These percentages may be changed from time to time by the fund s investment manager without the approval of shareholders, and may vary up to 5% from the stated allocations: 10% short-term investments; 55% equity funds; and 35% fixed-income funds. This investment option may be most appropriate for someone willing to balance the risk of principal fluctuation with the potential for greater capital growth over time. The investor may have a short, medium, or long time horizon. Investors choosing this option want to invest in a mixture of diverse investments suiting their needs but do not have the time, desire, or knowledge to select and manage their own portfolios. Page 5 of 9

14 INVESCO Small Cap Equity A Fund Manager: Hartsfield/Ellis Fund Operating Expenses: 1.38% SMEAX_2 Mutual Global Discovery Fund - R Fund Manager: Rankin/Langerman/Brugere-Trelat Fund Operating Expenses: 1.54% TEDRX_2 Franklin DynaTech Fund - A Fund Manager: Moberg/Johnson, Jr. Fund Operating Expenses: 1.03% FKDNX_2 Pioneer Growth Opportunities R Fund Manager: Stack Fund Operating Expenses: 1.55% PGRRX_2 The investment seeks long-term growth of capital. The fund normally invests at least at least 80% of net assets (plus borrowings for investment purposes) in equity securities of smallcapitalization issuers. The adviser considers a company to be a small-capitalization issuer if it has a market capitalization, at the time of purchase, no larger than the largest capitalized issuer included in the Russell 2000 Index. It may also invest up to 25% of total assets in foreign securities. Small-cap investments may be most appropriate for someone with a longer investment horizon, seeking long-term capital growth, and willing to accept larger market fluctuations. Equity securities of small-sized companies may be more volatile than securities of larger, more established companies. The investment seeks capital appreciation. The fund invests in equity securities (including securities convertible into, or that the investment manager expects to be exchanged for, common or preferred stock) of U.S. and foreign companies that the investment manager believes are available at market prices less than their value based on certain recognized or objective criteria. It also invests in merger arbitrage securities and distressed companies. The fund expects to invest substantially and may invest up to 100% of its assets in foreign securities, which may include sovereign debt and participations in foreign government debt. International investments may be most appropriate for someone looking for greater potential returns and willing to accept a higher degree of risk. International investment may provide diversification for a domestic portfolio. Foreign funds involve special risks, including currency fluctuations and political developments. The investment seeks capital appreciation. The fund invests primarily in equity securities of companies that management believes are leaders in innovation, take advantage of new technologies, have superior management, and benefit from new industry conditions in the dynamically changing global economy. It invests primarily in common stock. The fund may invest in any economic sector, market capitalization and may invest in companies both inside and outside of the United States. Large-cap investments may be most appropriate for someone willing to accept market fluctuations in return for long-term capital growth. Stock investments tend to be more volatile than bond or money market investments. The investment seeks growth of capital. The fund invests primarily in equity securities of companies that the fund s investment adviser considers to be reasonably priced or undervalued, with above average growth potential. It may invest in securities of any market capitalization, although the fund may invest a significant portion of its assets in equity securities of small companies. It may invest up to 20% of total assets in debt securities of U.S. issuers. The fund may invest up to 20% of total assets in securities of non-u.s. issuers, including up to 5% of its total assets in securities of emerging markets issuers. Small-cap investments may be most appropriate for someone with a longer investment horizon, seeking long-term capital growth, and willing to accept larger market fluctuations. Equity securities of small-sized companies may be more volatile than securities of larger, more established companies. Page 6 of 9

15 Franklin Growth R Fund Manager: Palmieri/Vinton/Herrmann Fund Operating Expenses: 1.20% FGSRX_2 The investment seeks capital appreciation. The fund invests substantially in the equity securities of companies that are leaders in their industries. In selecting securities, the investment manager considers many factors, including historical and potential growth in revenues and earnings, assessment of strength and quality of management, and determination of a company s strategic positioning in its industry. It may invest in companies in new and emerging industries where growth is expected to be above average and may invest up to 40% of assets in smaller companies. The fund may invest up to 40% of assets in foreign securities. Large-cap investments may be most appropriate for someone willing to accept market fluctuations in return for long-term capital growth. Stock investments tend to be more volatile than bond or money market investments. Investment Objective Franklin Large The investment seeks long-term capital appreciation. The fund normally invests at least 80% Cap Value R Fund Manager: Team Managed Fund Operating Expenses: 1.64% FLCRX_2 of net assets in investments of large-capitalization companies. Large-capitalization companies are those with market capitalizations (share price times the number of common stock shares outstanding) that are similar in size to those in the Russell 1000 Index at the time of purchase. It generally invests in equity securities the fund s investment manager believes are undervalued and have the potential for capital appreciation. The fund invests primarily in common stocks. It may invest up to 25% of total assets in foreign securities. Large-cap investments may be most appropriate for someone willing to accept market fluctuations in return for long-term capital growth. Stock investments tend to be more volatile than bond or money market investments. Franklin Strategic Income Fund R Fund Manager: Molumphy/Takaha Fund Operating Expenses: 1.14% FKSRX_2 Franklin US Govt Secs R Fund Manager: Bayston/Varunok Fund Operating Expenses: 1.09% FUSRX_2 The investment seeks high current income; capital appreciation is a secondary consideration. The fund normally invests at least 65% of assets in U.S. and foreign debt securities, including those in emerging markets. It may invest up to 100% of assets in high-yield, lower-quality debt securities. The fund may invest in many different securities issued or guaranteed by the U.S. government or its agencies or instrumentalities. It may invest a portion of assets in bank loans and loan participations. Bond investments may be most appropriate for someone seeking higher potential income than with a money market or stable value investment. The investor may desire to balance more aggressive investments with one providing potentially steady income. A bond fund s yield, share price and total return change daily and are based on changes in interest rates, market conditions, economic and political news and the quality and maturity of its investments. In general, bond prices fall when interest rates rise and vice versa. The investment seeks income. The fund normally invests at least 80% of net assets in U.S. government securities. It presently invests substantially all of its assets in Government National Mortgage Association obligations (Ginnie Maes). Ginnie Maes represent an ownership interest in mortgage loans pooled together for sale to investors to finance purchases of homes. The mortgage loans may have either fixed or adjustable interest rates. As the underlying mortgage loans are paid off, Ginnie Maes provide investors with monthly payments of interest and principal as well as any unscheduled prepayments on the underlying mortgage loans. Bond investments may be most appropriate for someone seeking higher potential income than with a money market or stable value investment. The investor may desire to balance more aggressive investments with one providing potentially steady income. A bond fund s yield, share price and total return change daily and are based on changes in interest rates, market conditions, economic and political news and the quality and maturity of its investments. In general, bond prices fall when interest rates rise and vice versa. Page 7 of 9

16 Mutual Beacon Fund A Fund Manager: Correa/Hormozi Fund Operating Expenses: 1.18% FR-MBF_2 Templeton Foreign Fund - R Fund Manager: Team Managed Fund Operating Expenses: 1.44% TEFRX_2 Vanguard Total Bond Market Index Fund Fund Manager: Volpert/Davis Fund Operating Expenses: 0.22% VG-TBM_2 The investment seeks capital appreciation; income is a secondary consideration. The fund normally invests primarily in equity securities of U.S. and foreign companies that the manager believes are available at market prices less than their value based on certain recognized or objective criteria (intrinsic value). It invests the equity portion of their portfolio predominantly in mid- and large-cap companies, with the remaining portion in smaller companies. The fund expects to invest a significant portion (up to 35%) of assets in foreign securities. Large-cap investments may be most appropriate for someone willing to accept market fluctuations in return for long-term capital growth. Stock investments tend to be more volatile than bond or money market investments. The investment seeks long-term capital growth. The fund invests at least 80% of net assets in foreign securities, which may include emerging markets. It normally invests in the equity securities of such foreign companies located outside the U.S. The equity securities in which the fund invests are primarily common stock. The fund may have significant positions in particular countries or sectors although the investment manager normally searches for investment across a large number of countries and sectors from time to time, based on economic conditions. International investments may be most appropriate for someone looking for greater potential returns and willing to accept a higher degree of risk. International investment may provide diversification for a domestic portfolio. Foreign funds involve special risks, including currency fluctuations and political developments. The investment seeks to track the performance of a broad, market-weighted bond index. The fund employs a passive management, or indexing investment approach designed to track the performance of the Barclays Capital U.S. Aggregate Float Adjusted Index. It invests by sampling the index, meaning that it holds a broadly diversified collection of securities that, in the aggregate, approximates the full index in terms of key risk factors and other characteristics. The fund invests at least 80% of assets in bonds held in the index. It maintains a dollar-weighted average maturity consistent with that of the index, ranging between 5 and 10 years. The BarCap US Agg Float Adjusted Index is a sub-index of the BarCap Aggregate Bond Index that excludes Treasuries, agencies, and Mortgage-Backed Securities held in Federal Reserve Accounts. The Barcalys Capital Aggregate Bond Index is an unmanaged index considered indicative of the domestic fixed income market. Bond investments may be most appropriate for someone seeking higher potential income than with a money market or stable value investment. The investor may desire to balance more aggressive investments with one providing potentially steady income. A bond fund s yield, share price and total return change daily and are based on changes in interest rates, market conditions, economic and political news and the quality and maturity of its investments. In general, bond prices fall when interest rates rise and vice versa. Page 8 of 9