Your guide to the Houston Methodist Retirement Savings Plans

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2 Your guide to the Houston Methodist Retirement Savings Plans Table of Contents Retirement Savings Plans 2 Frequently asked questions about your plans 3 Step 1 Determine investments that are right for you 9 Investment Options 13 Level 1: Target Date Funds 13 Level 2: Core Investment Options 21 Level 3: Expanded Investment Options 29 Level 4: Sector and Foreign Investment Options 32 Step 2 Review and confirm your choices 34 Fidelity NetBenefits 35 Calendar of Events 40

3 Congratulations! Houston Methodist has made a generous contribution to your Defined Contribution Plan (DCP). Now it s your turn to make an investment election. Houston Methodist makes an annual contribution to your DCP each March, provided that you meet established criteria. The 2014 contribution was contributed to your account on March 19, Houston Methodist is committed to providing comprehensive and competitive benefits to Houston Methodist employees. Houston Methodist offers you two great ways to save and help you build a foundation for a solid retirement: the DCP and the 403(b) Tax-Sheltered Annuity Plan through Fidelity Investments. With these plans, you have access to a variety of investment choices and account management tools. Now more than ever, it s important to feel confident about your investment choices. When you re preoccupied with today s finances, it s sometimes hard to focus on your long term strategy. Your portfolio s asset mix the blend of stocks, bonds, and short-term investments can have a big impact on your long-term performance. For the information, tools, and support you need to create and manage your investment strategy, call or log on to Fidelity NetBenefits at netbenefits.com/methodist. This guide will help you learn more about the benefits offered through the Houston Methodist Plans, help you understand the investment options available, instruct you on how to change your contribution percentage and designate beneficiaries, and provide you with simple instructions on how to review and manage your accounts. If you ve never accessed your account, or don t know how to choose investments, don t worry we can help. Easy, quick instructions follow. To learn more about what your plans offer, see the retirement plans summary on page 2 and Frequently asked questions about your plans beginning on page 3. Act Now: Visit netbenefits.com/methodist to create a password, choose your investments, and designate your beneficiaries. Questions? Contact us: Fidelity Representatives: Monday through Friday, 7:30 a.m. to 11:00 p.m. Central time Houston Methodist Representatives: Monday through Friday, 7:30 a.m. to 5:00 p.m. Central time or hrbenefits@houstonmethodist.org 1

4 Houston Methodist Retirement Savings Plans It is important to be confident about what your life will be like in retirement. That is why the Houston Methodist Retirement Savings Plans are designed to help you reach your retirement savings goals when you reach the end of your journey at Houston Methodist. To do that, Methodist provides two competitive retirement plans: 2 403(B) TAX-SHELTERED ANNUITY DEFINED CONTRIBUTION PLAN (DCP) Eligibility You are eligible to participate on your first day of employment. New employees are members on their first day of employment. Enrollment Contributions Vesting Changes to Contributions Loans Investment Options Participation is voluntary. You may enroll by contacting Fidelity Investments either by phone at or via the Web at netbenefits.com/methodist. You may contribute 1% 60% of your allowed compensation, up to the IRS contribution limit of $18,000 for Flat dollar amounts are accepted, not to exceed 60% of your pay for that period. Allowed compensation includes base salary, overtime, shift differentials, and call pay. Your contribution will be matched at 50%, up to a maximum 2% match. For example: If you contribute The matching contribution will be 1.0% 0.5% 2.0% 1.0% 3.0% 1.5% 4.0% or more 2.0% If you will be age 50 or older by December 31, 2015, you may contribute an additional catch-up contribution up to the IRS catch-up contribution limit of $6,000 for 2015, but the contribution is not eligible for a match. If you average a 4% contribution over the entire year, a match true-up calculation will be completed subsequent to year-end to ensure that you received the full 50% match. Rollovers from other qualified plans are permitted. Employee contributions are 100% vested immediately. Employees hired prior to January 1, 2010, are 100% vested in the match. If you were hired on or after January 1, 2010, the employer match has a three-year cliff vesting schedule. Every calendar year you work 1,000 hours equals a year of vested service. After completing three years of working 1,000 hours per year, you will be 100% vested. You may increase, decrease, or stop your contributions at any time by contacting Fidelity Investments at or via the Web at netbenefits.com/methodist. Your enrollment is automatic on your first day of employment. A contribution is based on your base salary, and the eligible percentage is made to eligible employees annually. In order to receive the annual contribution, you must work 1,000 hours during the calendar year and be employed on the last day of the year. The contributions are calculated on years of service and base salary as follows: Years of Manage- Service Staff ment 0 9 3% 7% % 8% 20+ 5% 9% Rollovers from other qualified plans are permitted. The DCP plan has a three-year cliff vesting schedule. Every calendar year you work 1,000 hours equals a year of vested service. After completing three years of working 1,000 hours per year, you will be 100% vested. You are neither required nor allowed to make voluntary contributions to the plan. A loan is available from the vested portion of either your 403(b) or your DCP account. Only one loan is permitted at a time. Loan applications are available by contacting Fidelity Investments at You may choose from the Core funds or one of the more than 160 additional funds available from Fidelity. You can select a mix of investment options that best suits your goals, time horizon, and risk tolerance. The investment options available include conservative, moderately conservative, and aggressive funds. IMPORTANT NOTE: If you don t make an investment election, your contribution will be directed to the plan default (one of the Vanguard Target Retirement Funds Investor Shares), based on your date of birth and the assumption that you will retire at age 65.

5 Frequently asked questions about your plans Below is a summary of questions frequently asked regarding the Houston Methodist Retirement Savings Plans. For any questions that are not addressed in this guide, please contact Houston Methodist Benefits at hrbenefits@houstonmethodist.org or at You may also contact your local HR Department. 1. What are retirement plans? Retirement plans are benefit programs that allow contributions for your retirement to be made on a tax-deferred basis. You may contribute money out of your own paycheck, and Houston Methodist may also provide contributions on your behalf. All contributions to the retirement plans are held in accounts at Fidelity Investments. Contributions are not taxed until distribution. 2. What are the types of retirement plans that Houston Methodist provides? Two plans are provided: Defined Contribution Plan (DCP): Contributions are provided by Houston Methodist to all employees who are actively employed on the last day of the year and have worked at least 1,000 hours during the year. Your DCP contributions become fully vested after three years of service in which you worked at least 1,000 hours per year. The contribution percentage is determined by rank and tenure, as shown below: Years of Service Staff Management 0 9 3% 7% % 8% 20+ 5% 9% 403(b) Tax-Sheltered Annuity: Houston Methodist contributions are based on individual participation in the plan. You may contribute either a flat dollar amount or percentage of your compensation (all functional pay base, shift, call, and overtime). If choosing a percentage, you may elect from 1% to 60% of your eligible pay. If choosing a flat dollar amount, you may contribute up to $18,000 for If you are age 50 or older, you may contribute an additional $6,000. An employer match of 50% of your contributions up to 4% of your functional pay is provided. Employees hired prior to 2010 are 100% vested in the employer match at the time it is contributed. Employees hired after January 1, 2010, will have money vested based on a vesting schedule as outlined in Question What is meant by the term vesting? Why is it important to me? Vesting refers to your ownership of your retirement plan contributions. It is used by Fidelity to determine how your account balance will be paid when you leave Houston Methodist. DCP: You are 100% vested at three years, as outlined in the chart below. Vesting years include only calendar years when 1,000 hours are worked. Years of Service Vesting % 1 0% 2 0% 3 100% 403(b): Employee contributions are 100% vested immediately. Employer match contributions have a three-year cliff vesting schedule. For all employees hired on or after January 1, 2010, a vesting year is a year in which an employee works 1,000 hours. After completing three years of working 1,000 hours per year, you will be 100% vested. Years of Service Vesting % Less than 3 years 0% 3 years or more 100% 3

6 4. How do I enroll in the 403(b) Plan? Can I enroll at any time? How do I change my contribution percentage in the 403(b)? You can enroll at any time. Enrollment must be made through Fidelity Investments and is very simple. Call Fidelity at to speak with a Fidelity Representative. In addition, you can enroll online at netbenefits.com/methodist. A fair is being held at your location in either March or April; refer to the Calendar of Events on page 40, if you need assistance. To change your contribution election, simply call Fidelity at or log on to netbenefits.com/methodist. If a new deduction percentage or flat dollar amount is made by noon on the last Thursday of a pay period, it will be reflected in the next week s payroll check. 5. If I contribute 4% to get the maximum employer match, how much is that? The following sample table illustrates the dollar amount of both your biweekly contribution and Methodist s match. Annual Salary Biweekly Salary 4% Biweekly Deferral* 2% Biweekly Match $20,000 $ $30.76 $15.38 $30,000 $1, $46.15 $23.08 $40,000 $1, $61.54 $30.77 $50,000 $1, $76.92 $38.46 $60,000 $2, $92.31 $46.16 $70,000 $2, $ $53.85 $80,000 $3, $ $61.54 * The 403(b) deduction is not subject to federal income tax at the time of contribution. 6. What is a catch-up contribution? Am I eligible to make a catch-up contribution? If you have reached the age of 50 or will be age 50 by the end of the year, and are making the maximum plan or IRS pretax contribution, you may make an additional catch-up contribution each pay period (all functional pay base, shift, call, and overtime) up to $6,000. Follow the enrollment instructions explained in Question 4 to participate in catch-up contributions. You should elect a catch-up contribution only if you are contributing or will be contributing the maximum plan or IRS contribution of $18,000. Catch-up elections can be made as a flat dollar amount only. 7. What are the contribution criteria for the retirement plans? DCP: Actively employed on the last day of the year having completed 1,000 hours in the plan year. Exceptions are provided for those who: 1. Leave at age Leave at age 55 with five years of vesting service 3. Leave by reason of involuntary termination with 1,000 hours worked in the year (as defined in the Methodist Separation Plan) 4. Leave by reason of total and permanent disability or death 403(b): Eligible for an employer contribution with each employee contribution. Additionally, a true-up provision is allowed by the plan to ensure that, if you are an active employee at year-end, you receive the maximum match based on your contributions. 8. What is a true-up? How does it work? At the end of each year, your contributions are reviewed to ensure that your annual 403(b) deferrals received the maximum allowable match. If the match is not maximized, then additional funding is made to your account if you are employed on the last day of the year. The amount that is reported in your Summary of Retirement Plans reflects any true-up for What is the timing of employer funding for the plans? DCP: Funded in March following the plan year. For example, plan year 2014 is funded in March (b): Funded biweekly with payroll. Any true-up is made annually following the end of the plan year. 4

7 10. Once Houston Methodist directs these contributions to my retirement plans, can I change the funds in which they are invested? If so, how do I do that? You may choose from the Core funds, which are reviewed quarterly by Houston Methodist s investment consultants. The Core lineup consists of 12 fund choices that include Fidelity and non- Fidelity funds. In addition to core funds, there are approximately 160 additional Fidelity funds available. If no investment election is made, assets are defaulted into a Vanguard Target Retirement Fund Investor Shares, based on your date of birth and the assumption that you will retire at age 65. Simply find your date of birth range in the chart on page 13 to determine the Vanguard Target Retirement Fund Investor Shares where your contributions will be directed. If no date of birth or an invalid date of birth is on file, your contributions may be invested in the Vanguard Target Retirement Income Fund Investor Shares. Changes to your fund elections can be made either by phone at or online at netbenefits.com/methodist. 11. What if I want to delegate the management of my account to professional investment managers? As important as saving for retirement is, many of us just don t have the time, let alone the experience, to actively manage our own workplace savings plans. Fidelity Portfolio Advisory Service at Work provides you with the opportunity to have investment professionals actively manage your portfolio. That means they monitor and rebalance your portfolio for you, as needed, and that can be reassuring. Here s how it works: We get to know you, then find the model portfolio that works for you based on your unique situation and goals. We then look for opportunities that offer a comfortable balance between risk and reward, because being too conservative can be just as harmful as being too aggressive. Because any big changes in the market or in your life may mean you need a change in your investment approach, we ll adjust your portfolio accordingly. A team of dedicated guidance professionals is just a phone call away. They are available to answer any questions you may have. Call to look further into having Fidelity manage your portfolio. Or visit fidelity.com/activelymanaged for detailed information. Fidelity Portfolio Advisory Service at Work is a service of Strategic Advisers, Inc., a registered investment adviser and a Fidelity Investments company. This service provides discretionary money management for a fee. 12. Is there a way to get help rebalancing my investment mix? Yes. Automatic Rebalance, available through your account online at netbenefits.com/methodist, is a service that annually rebalances your account to stay consistent with the investment strategy you ve chosen. You simply identify an initial investment combination, adjust your account to that mix, and let the service do the rest. In addition, you can sign up for Rebalance Notification and receive an alert by any time your account s investment mix strays from your original specification. You decide whether to rebalance, and you can take action immediately by clicking a link delivered with the message. For more information, log on to netbenefits.com/methodist. Click Change Investments, then select Rebalance. Fidelity also offers a wide variety of retirement planning tools conveniently available at your desk. Once logged on to NetBenefits, click Tools. 5

8 6 13. Can I take a loan from my retirement plan accounts? Yes, one plan loan is allowed from either plan from your vested account balance. Generally, you may borrow up to 50% of your vested account balance but not more than $50,000. The minimum amount you may borrow is $1,000. Loan repayment periods range from one to five years. All repayments to loans must be made through payroll deductions. Once a loan has been repaid, you must wait 90 days before another loan may be taken out. You are not allowed to have more than one loan at a time. Please call Fidelity at or check NetBenefits to see how much you have available to you in your account. The cost to initiate a loan is $50. The initiation fees will be deducted directly from your account. The interest rate on loans is the prime rate plus 1%. All loans are handled exclusively by Fidelity and must be requested via phone at If you leave Houston Methodist, you can continue to make loan payments directly to Fidelity through an automatic bank draft. If you fail to repay your loan (based on the original terms of the loan), it will be considered in default and treated as a distribution, making it subject to income tax and possibly to a 10% early withdrawal penalty. Defaulted loans may also impact your eligibility to request additional loans. Be sure you understand the plan guidelines before you initiate a loan from your plan account. To learn more about or to request a loan, log on to netbenefits.com/methodist or call Fidelity Investments at Can I take a withdrawal from the plans while still employed by Houston Methodist? While actively employed, you may take an inservice distribution from the 403(b) Plan if you are at least age 59½. You may take an in-service distribution from the DCP if you are at least age 59½ and have completed 60 months of employment. Keep in mind that withdrawals are subject to income taxes. 15. Can I take a hardship distribution? If you are experiencing financial difficulty, we encourage you to contact the Employee Assistance Program (EAP) at to seek financial counseling. If, after talking with an EAP counselor, you want to proceed with a financial hardship distribution, you must have a loan on your retirement account. It is not in your best interest to take a hardship distribution from your retirement plan due to the tax implications. Hardships are only available from your contributions to the 403(b) Tax-Sheltered Annuity Plan. Your contributions will be stopped for a six-month period, so you will not be eligible for the match, which decreases the amount in your retirement account. If you meet the IRS-specific criteria for taking a hardship distribution, you are eligible to receive the amount that you prove qualifies for the distribution. You must claim the distribution amount as income and pay taxes on it, subject to a 10% penalty tax according to IRS regulations if you are under age 59½. 16. How do the plans affect my taxes? 403(b): Your deferral (contribution) reduces your annual federal taxable income by the amount of your deferral. The 403(b) match and investment earnings are tax deferred along with your contribution until distribution. DCP: The DCP contributions and any investment earnings are both tax deferred until distribution. 17. What happens to my retirement plans when I leave or retire from Houston Methodist? a. Maintaining accounts at Fidelity If your vested (owned) account balance in either plan is greater than $1,000, you are allowed to leave the balance in the plan. If your vested account balance is less than $1,000, you will be required to roll it over or take a distribution within 12 months of leaving. You will be notified by Fidelity when an automated distribution on your account will occur. b. Rollover You may also elect to roll over your account to another employer s plan, if allowed, or to an IRA. Contact Fidelity directly at to initiate a rollover. c. Distribution Your accounts are not taxed until distributions are taken, but please be aware that if you are younger than age 59½ at the time of distribution, you may be subject to an additional 10% penalty tax.

9 18. What happens to my nonvested money when I leave or retire from Houston Methodist? Nonvested money will be forfeited upon a full distribution being made from your account. If you return to Houston Methodist, the forfeited money will be reinstated to your account only if you pay back the money that was distributed. If 100% of your money is forfeited, it will be reinstated when you are rehired. If you have a partial amount forfeited, you will need to pay back any distributed amount for the forfeiture to be reinstated. 19. What if I want more information on my retirement options? In March or April, Houston Methodist Benefits will host a fair at the main hospital locations. A schedule of the dates and times can be found at the end of this guide. 20. How do I designate a beneficiary for my retirement accounts? If you have not already selected your beneficiary, or if you have experienced a life-changing event, such as marriage, divorce, the birth of a child, or a death in the family, it s time to consider your beneficiary designations. Fidelity s Online Beneficiaries Service, available through Fidelity NetBenefits, offers a straightforward, convenient process that takes just minutes to complete. Simply log on to netbenefits.com/methodist and click Beneficiaries in the About You section under the Your Profile tab. If you do not have access to the Internet or prefer to complete your beneficiary information by paper form, please contact Fidelity at Keep in mind that, if you are married, your spouse must be your primary beneficiary (100%) unless your spouse signs off in the presence of a notary public or plan administrator. Additionally, it s important to list contingent beneficiaries should you and your spouse die at the same time. 21. What can I access online with Fidelity at netbenefits.com/methodist? Besides reviewing your account balance and investment elections, you can change your 403(b) deduction and contribution elections. You can also request fund exchanges on existing account balances and obtain a complete history of fund performance. In addition, you can designate your beneficiary online, and transfer/rollover forms can be printed directly from the Web site. You can access and manage your workplace savings account from virtually anywhere, any time, via your wireless device. You can also read Fidelity Viewpoints articles on the markets, get insight on an array of personal finance topics, and discover new investing strategies via Facebook and Twitter. Like or Follow Fidelity Investments at Facebook.com/fidelityinvestments and Twitter.com/fidelity. 22. Can I roll over my balance in my previous employer s plan to the Houston Methodist plans? You may roll over your vested account balance from your previous employer s retirement plan, provided that the plan is a qualified plan. To obtain a transfer/rollover form, you can either contact Fidelity Investments at or print one directly from the Fidelity Investments Web site at netbenefits.com/methodist. This completed form, plus documentation supporting the qualified status of the previous plan and the pretax status of the monies to be rolled over, must be returned to Fidelity for processing. Once the balance has been rolled over into the plan, it cannot be withdrawn while you are employed; however, loans are allowed. 7

10 23. Does Houston Methodist provide a retirement bonus and reception for retiring employees? What are the criteria for eligibility? Retiring employees are eligible for a bonus and luncheon/reception if they are at least age 55, have 10 years of vesting service (1,000 hours worked per year), and intend to retire from active work. The retirement bonus allows an employee to receive a minimum of $250, with an additional $25 for each year of service over 10 years. The maximum retirement bonus is $1,000, which is equal to 40 years of service. An employee meeting the requirements listed above is also eligible for a luncheon/reception held at Houston Methodist facilities. Expense allowances for retirement receptions and luncheons must be approved by the appropriate executive. Food and beverage expenses must not exceed $8 per person or a total of $1,000, whichever is less. Also, visual communications cannot exceed $100 and incidental expenses cannot exceed $50. For more information regarding the retirement bonus and reception policy, please view Policy HR85, located on the Houston Methodist intranet under Policy Tech. 24. Can I talk to someone in a Fidelity Investor Center in Houston about my retirement accounts? Fidelity Investor Centers are retail services outlets, providing Houston Methodist employees with convenient local access to Fidelity Representatives during normal business hours. While we encourage you to take advantage of their services, please remember that the Investor Centers focus on providing services beyond your retirement plan, rather than the servicing of your Houston Methodist retirement plan accounts. Representatives are available to help provide financial insight and personal attention. After working with you to complete a retirement review, they can help you meet your goals and assist with the following: Analyzing your options. Get help to make sure you re taking full advantage of your workplace savings plan. Then, look at other opportunities that may also be worth considering. Creating a plan that meets your needs that factors in all your retirement resources and your broader financial priorities. Inspiring confidence in meeting your financial goals. Get the proactive guidance you need to stay on track, including access to specialists in estate planning and charitable giving. In-depth portfolio reviews Developing investment strategies for a variety of financial goals Complimentary investment seminars and workshops College savings programs In-depth portfolio reviews are provided by Fidelity Representatives through the use of Fidelity s suite of guidance tools. Although consultations are one on one, guidance provided by Fidelity is educational in nature, is not individualized, and is not intended to serve as the primary or sole basis for your investment or taxplanning decisions. Assistance with your Houston Methodist retirement plans is available from Fidelity at Monday through Friday, 7:30 a.m. to 11:00 p.m. Central time. You can also access your accounts online, virtually 24 hours a day, 7 days a week, by visiting netbenefits.com/methodist. This summary does not replace the official plan documents. In the event that the information in this summary differs from the information in the plan documents, the information in the plan documents will prevail. 8

11 Step1 Determine investments that are right for you What kind of investor are you? The answer to this question will determine which plan investments may be right for you. The Houston Methodist Retirement Savings Plans offer a range of investments, so you can build your portfolio your way. Just follow the simple process described here. Finding the right mix How four hypothetical target asset mixes align with different approaches to investing Aggressive Growth Growth Balanced Conservative 25% 15% 60% 5% 25% 21% 49% 40% 10% 35% 15% 50% 14% 6% 30% May be appropriate for investors: May be appropriate for investors: May be appropriate for investors: May be appropriate for investors: Comfortable with wide fluctuation Comfortable with significant fluctuation Comfortable with moderate fluctuation Looking to minimize fluctuation >10 years until retirement goal >5 years until retirement goal <5 years until retirement goal <5 years until retirement goal Domestic Stock Foreign Stock Short-term Investments Bond For illustrative purposes only. The purpose of the hypothetical target asset mixes is to show how target asset mixes may be created with different risk and return characteristics to help meet a participant s goals. You should choose your own investments based on your particular objectives and situation. Remember, you may change how your account is invested. Be sure to review your decisions periodically to make sure they are still consistent with your goals. You should also consider any investments you may have outside the plan when making your investment choices. These target asset mixes were developed by Strategic Advisers, Inc., a registered investment adviser and a Fidelity Investments company, based on the needs of a typical retirement plan participant. 9

12 First, start by finding your approach. Are you a conservative investor? An aggressive investor? Somewhere in between? The answer is a function of three things. The first is the length of time you have to invest in this case, the number of years until you expect to retire. The second is your comfort with risk. The third is your financial situation. If your time horizon is long, your risk tolerance is high, and your financial situation stable, you may be an aggressive investor. On the other hand, if you ll need your money soon, are uncomfortable with risk, and your financial situation is somewhat uncertain, you may need a more conservative approach. Many investors may be somewhere in between, taking a growth or balanced approach. To help determine your possible investment approach, consider these factors: The age at which you plan to retire Your comfort level with the stock market s ups and downs Whether you prefer stability or the potential for bigger returns, which entails greater risk Your short- and long-term financial needs Next, learn about the different kinds of investments. There are three basic investment types shortterm investments, bonds, and stocks. And they, like investors, fall along a range from conservative to aggressive. Short-term investments are the most conservative. Also known as cash investments, this investment type involves the least amount of risk, but also provides the lowest potential returns. Bonds are in the middle. Generally less risky than stocks, this investment type typically offers moderate returns and risk compared with stocks. Stocks are the most aggressive. Although past investment results do not guarantee future results, this investment type has historically provided the highest long-term returns and the greatest risk. Stock investments include large (large cap), medium-sized (mid-cap), and small (small cap) U.S. companies, as well as foreign companies. However, each of these types of stock investments has its own level of risk for example, small cap tends to be more risky than large cap. Then, select the right mix of investment types for your situation. Once you know how conservative or aggressive your approach is as an investor, and you understand the difference between investment types, you can figure out the mix of investment types that matches your approach. Finally, pick your investment options. The Houston Methodist Retirement Savings Plans offer a range of investment options across the three investment types. For descriptions, turn to the Investment Options section of this guide. You can also log on to NetBenefits at netbenefits.com/methodist to get up-todate performance information, other investment specifics, and educational material. Hands-on or hands-off? Do you want to make your own investment decisions? Are you comfortable building your own portfolio? 10 Do you have the time to actively manage your investments?

13 HANDS-OFF HANDS-ON Managed account Target date funds* Let us guide you Do-it-yourself Investment decisions and management of your portfolio are made by professionals on your behalf to help pursue your goals. These funds provide an automatic investment mix that becomes continually more conservative as time goes on. Just pick the fund with the year that s closest to the year you plan to retire. Use our investment guidance tool, Portfolio Review, to identify a target investment mix, receive a model portfolio suggestion, and easily implement your strategy. Access Fidelity s research resources, and utilize our fund selection tools to build your own portfolio. What are my investment options? To help you meet your investment goals, Houston Methodist offers you a range of options. You can select a mix of investment options that best suits your goals, time horizon, and risk tolerance. The investment options available include conservative, moderately conservative, and aggressive funds. A complete description of the investment options and their performance, as well as planning tools to help you choose an appropriate mix, is available online at Fidelity NetBenefits. Four investment levels are available. Level 1: Target Date Funds If you understand the importance of having a mix of investments but feel more comfortable having a professional portfolio manager manage it for you, you might consider selecting one of the Vanguard Target Retirement Fund Investor Shares offered in this level. These funds are designed for investors who want a simple approach to investing. Each fund s portfolio includes a target retirement date based mix of Vanguard funds to achieve a diversified allocation of stock, bond, and short-term investments. Consider choosing the fund that most closely matches your expected retirement date. Level 2: Core The Core lineup was developed to provide plan participants with access to what Houston Methodist and its consultants determine to be appropriate based on each fund s investment strategy, objectives, and overall diversity of the fund lineup. With this approach, you determine and manage the mix of investments in your plan account by choosing from a limited menu of choices. This level includes 11 Fidelity and non-fidelity mutual funds, plus the VOYA STABILIZER. These options represent primary asset classes (stocks, bonds, and stable value). You may want to consider these options if you are comfortable creating your own mix of investments. * Target date funds are designed for investors expecting to retire around the year indicated in each fund s name. The investment risk of each target date fund changes over time as the fund s asset allocation changes. Target date funds are subject to the volatility of the financial markets, including that of equity and fixed income investments in the U.S. and abroad, and may be subject to risks associated with investing in high-yield, small-cap, and foreign securities. Principal invested is not guaranteed at any time, including at or after the funds target dates. Portfolio Review is an educational tool. Guidance provided by Fidelity is educational in nature, is not individualized, and is not intended to serve as the primary or sole basis for your investment or tax-planning decisions. Neither diversification nor asset allocation ensures a profit or guarantees against loss. 11

14 Level 3: Expanded Investment Options This extensive list of mutual funds is for more experienced investors who have the ability to create and manage a portfolio through a substantially larger selection of investments. This option is for employees who know how to research, evaluate, and monitor a wide variety of funds with different risk and return characteristics. Level 4: Sector and Foreign Investment Options This list of sector and foreign funds is designed for more experienced investors comfortable creating and managing their own investments, and who may take a more active role in monitoring political, regulatory, market, or economic developments. Stock markets, especially foreign markets, are volatile and can decline significantly in response to adverse issuer, political, regulatory, market, or economic developments. Participants choosing to invest in this level of funds tend to be more comfortable with this type of market volatility and additional risk. Because of their narrow concentration in a specific industry, sector funds may be more volatile than funds that diversify across many sectors. Foreign securities are subject to interest-rate, currency-exchange-rate, economic, and political risks, all of which are magnified in emerging markets. These risks are particularly significant for funds that focus on a single country or region. Where can I find information about exchanges and other plan features? You can learn about exchanges, withdrawals, and more, online through Fidelity NetBenefits at netbenefits.com/methodist. In particular, you can access a withdrawal modeling tool, which shows the amount of federal income taxes and early withdrawal penalties you might pay, along with the amount of earnings you could potentially lose by taking a withdrawal. You can obtain additional information about exchanges, withdrawals, and other plan features by calling Fidelity Investments at to speak with a representative, Monday through Friday from 7 a.m. to 11 p.m. Central time, or to use the automated voice response system, virtually 24 hours a day, 7 days a week. How do I obtain additional investment options and account information? Houston Methodist has appointed Fidelity to provide additional information on the investment options available through the plans. Also, a statement of your account may be requested by phone at or reviewed online through Fidelity NetBenefits at netbenefits.com/methodist. Statements are mailed quarterly, unless you have requested to receive them electronically. Sector and foreign funds are less diversified and you may want to consider investing in these funds only to complement your core investment holdings. Would you prefer to have investment professionals actively manage your account? 12 Fidelity Portfolio Advisory Service at Work is available in your 403(b) Plans and gives you the opportunity to have investment professionals actively manage your portfolio. That means they monitor and rebalance your portfolio for you, as needed. Call to look further into having Fidelity manage your portfolio. Or visit fidelity.com/activelymanaged for detailed information. Fidelity Portfolio Advisory Service at Work is a service of Strategic Advisers, Inc., a registered investment adviser and a Fidelity Investments company. This service provides discretionary money management for a fee.

15 Investment Options The following is a list of investment options for the Houston Methodist Retirement Savings Plans, organized by category. For up-to-date performance information and other fund specifics, log on to NetBenefits at netbenefits.com/methodist. Level 1: Target Date Funds Investment options to the left have potentially more inflation risk and less investment risk Investment options to the right have potentially less inflation risk and more investment risk Risk Spectrum for Target Date Funds Vanguard Target Retirement Income Fund Investor Shares Vanguard Target Retirement 2010 Fund Investor Shares Vanguard Target Retirement 2015 Fund Investor Shares Vanguard Target Retirement 2020 Fund Investor Shares Vanguard Target Retirement 2025 Fund Investor Shares Vanguard Target Retirement 2030 Fund Investor Shares Vanguard Target Retirement 2035 Fund Investor Shares Vanguard Target Retirement 2040 Fund Investor Shares Vanguard Target Retirement 2045 Fund Investor Shares Vanguard Target Retirement 2050 Fund Investor Shares Vanguard Target Retirement 2055 Fund Investor Shares Vanguard Target Retirement 2060 Fund Investor Shares Target date investments are represented on a separate spectrum because they are generally designed for investors expecting to retire around the year indicated in each investment s name. The investments are managed to gradually become more conservative over time. The investment risk of each target date investment changes over time as the investment s asset allocation changes. The investments are subject to the volatility of the financial markets, including that of equity and fixed income investments in the U.S. and abroad, and may be subject to risks associated with investing in high-yield, small-cap, and foreign securities. Principal invested is not guaranteed at any time, including at or after the investments target dates. DATE OF BIRTH VANGUARD TARGET RETIREMENT FUND RETIREMENT DATE RANGE Before 1943 or missing/ invalid date of birth Vanguard Target Retirement Income Fund Investor Shares Retired before /1/ /31/1947 Vanguard Target Retirement 2010 Fund Investor Shares /1/ /31/1952 Vanguard Target Retirement 2015 Fund Investor Shares /1/ /31/1957 Vanguard Target Retirement 2020 Fund Investor Shares /1/ /31/1962 Vanguard Target Retirement 2025 Fund Investor Shares /1/ /31/1967 Vanguard Target Retirement 2030 Fund Investor Shares /1/ /31/1972 Vanguard Target Retirement 2035 Fund Investor Shares /1/ /31/1977 Vanguard Target Retirement 2040 Fund Investor Shares /1/ /31/1982 Vanguard Target Retirement 2045 Fund Investor Shares /1/ /31/1987 Vanguard Target Retirement 2050 Fund Investor Shares /1/ /31/1992 Vanguard Target Retirement 2055 Fund Investor Shares /1/1993 or later Vanguard Target Retirement 2060 Fund Investor Shares 2058 and later Dates selected by Plan Sponsor. 13

16 Investment Options Descriptions Before investing in any investment option, consider the investment objectives, risks, charges, and expenses. Contact Fidelity for a mutual fund or variable annuity prospectus or, if available, a summary prospectus. For information on fixed annuities, contact Fidelity to request a fact sheet. Read them carefully. Level 1: Target Date Funds Vanguard Target Retirement Income Fund Investor Shares VRS Code: Ticker: VTINX Objective: The investment seeks to provide current income and some capital appreciation. Strategy: The fund invests in other Vanguard mutual funds according to an asset allocation strategy designed for investors currently in retirement. Its indirect bond holdings are a diversified mix of short-, intermediate-, and long-term U.S. government, U.S. agency, and investment-grade U.S. corporate bonds; inflation-protected public obligations issued by the U.S. Treasury; mortgage-backed and asset-backed securities; and government, agency, corporate, and securitized investment-grade foreign bonds issued in currencies other than the U.S. dollar. Risk: The fund is subject to the volatility of the financial markets, including that of equity and fixed income investments. Fixed income investments carry issuer default and credit risk, inflation risk, and interest rate risk. (As interest rates rise, bond prices usually fall, and vice versa. This effect is usually more pronounced for longer-term securities.) Principal invested is not guaranteed at any time, including at or after retirement. Additional risk information for this product may be found in the prospectus or other product materials, if available. Short-term Redemption Fee Note: None Someone who is seeking an investment option intended for people in retirement and who is willing to accept the volatility of diversified investments in the market. Someone who is seeking a diversified mix of stocks, bonds, and short-term investments in one investment option and looking primarily for the potential for income and, secondarily, for share-price appreciation. A mutual fund registered under Vanguard Chester Funds, and managed by Vanguard Group, Inc. This description is only intended to provide a brief overview of the fund. Read the fund s prospectus for more detailed information about the fund. 14

17 Vanguard Target Retirement 2010 Fund Investor Shares VRS Code: Ticker: VTENX Objective: The investment seeks to provide capital appreciation and current income consistent with its current asset allocation. Strategy: The fund invests in other Vanguard mutual funds according to an asset allocation strategy designed for investors planning to retire and leave the workforce in or within a few years of 2010 (the target year). Its asset allocation will become more conservative over time, meaning that the percentage of assets allocated to stocks will decrease while the percentage of assets allocated to bonds and other fixed income investments will increase. Risk: Target date funds are designed for investors expecting to retire around the year indicated in each fund s name. The funds are managed to gradually become more conservative over time as they approach their target date. The investment risk of each target date fund changes over time as its asset allocation changes. The funds are subject to the volatility of the financial markets, including that of equity and fixed income investments in the U.S. and abroad, and may be subject to risks associated with investing in high-yield, small-cap, and foreign securities. Principal invested is not guaranteed at any time, including at or after the funds target dates. Additional risk information for this product may be found in the prospectus or other product materials, if available. Short-term Redemption Fee Note: None Someone who is seeking an investment option intended for people in or very near retirement and who is willing to accept the volatility of diversified investments in the market. Someone who is seeking a diversified mix of stocks, bonds, and short-term investments in one investment option or who does not feel comfortable making asset allocation choices over time. A mutual fund registered under Vanguard Chester Funds, and managed by Vanguard Group, Inc. This description is only intended to provide a brief overview of the fund. Read the fund s prospectus for more detailed information about the fund. Vanguard Target Retirement 2015 Fund Investor Shares VRS Code: Ticker: VTXVX Objective: The investment seeks to provide capital appreciation and current income consistent with its current asset allocation. Strategy: The fund invests in other Vanguard mutual funds according to an asset allocation strategy designed for investors planning to retire and leave the workforce in or within a few years of 2015 (the target year). The fund s asset allocation will become more conservative over time, meaning that the percentage of assets allocated to stocks will decrease while the percentage of assets allocated to bonds and other fixed income investments will increase. Risk: Target date funds are designed for investors expecting to retire around the year indicated in each fund s name. The funds are managed to gradually become more conservative over time as they approach their target date. The investment risk of each target date fund changes over time as its asset allocation changes. The funds are subject to the volatility of the financial markets, including that of equity and fixed income investments in the U.S. and abroad, and may be subject to risks associated with investing in high-yield, small-cap, and foreign securities. Principal invested is not guaranteed at any time, including at or after the funds target dates. Additional risk information for this product may be found in the prospectus or other product materials, if available. Short-term Redemption Fee Note: None Someone who is seeking an investment option intended for people in or very near retirement and who is willing to accept the volatility of diversified investments in the market. Someone who is seeking a diversified mix of stocks, bonds, and short-term investments in one investment option or who does not feel comfortable making asset allocation choices over time. A mutual fund registered under Vanguard Chester Funds, and managed by Vanguard Group, Inc. This description is only intended to provide a brief overview of the fund. Read the fund s prospectus for more detailed information about the fund. 15

18 Vanguard Target Retirement 2020 Fund Investor Shares VRS Code: Ticker: VTWNX Objective: The investment seeks to provide capital appreciation and current income consistent with its current asset allocation. Strategy: The fund invests in other Vanguard mutual funds according to an asset allocation strategy designed for investors planning to retire and leave the workforce in or within a few years of 2020 (the target year). The fund s asset allocation will become more conservative over time, meaning that the percentage of assets allocated to stocks will decrease while the percentage of assets allocated to bonds and other fixed income investments will increase. Risk: Target date funds are designed for investors expecting to retire around the year indicated in each fund s name. The funds are managed to gradually become more conservative over time as they approach their target date. The investment risk of each target date fund changes over time as its asset allocation changes. The funds are subject to the volatility of the financial markets, including that of equity and fixed income investments in the U.S. and abroad, and may be subject to risks associated with investing in high-yield, small-cap, and foreign securities. Principal invested is not guaranteed at any time, including at or after the funds target dates. Additional risk information for this product may be found in the prospectus or other product materials, if available. Short-term Redemption Fee Note: None Someone who is seeking an investment option that gradually becomes more conservative over time and who is willing to accept the volatility of the markets. Someone who is seeking a diversified mix of stocks, bonds, and short-term investments in one investment option or who does not feel comfortable making asset allocation choices over time. A mutual fund registered under Vanguard Chester Funds, and managed by Vanguard Group, Inc. This description is only intended to provide a brief overview of the fund. Read the fund s prospectus for more detailed information about the fund. Vanguard Target Retirement 2025 Fund Investor Shares VRS Code: Ticker: VTTVX Objective: The investment seeks to provide capital appreciation and current income consistent with its current asset allocation. Strategy: The fund invests in other Vanguard mutual funds according to an asset allocation strategy designed for investors planning to retire and leave the workforce in or within a few years of 2025 (the target year). The fund s asset allocation will become more conservative over time, meaning that the percentage of assets allocated to stocks will decrease while the percentage of assets allocated to bonds and other fixed income investments will increase. Risk: Target date funds are designed for investors expecting to retire around the year indicated in each fund s name. The funds are managed to gradually become more conservative over time as they approach their target date. The investment risk of each target date fund changes over time as its asset allocation changes. The funds are subject to the volatility of the financial markets, including that of equity and fixed income investments in the U.S. and abroad, and may be subject to risks associated with investing in high-yield, small-cap, and foreign securities. Principal invested is not guaranteed at any time, including at or after the funds target dates. Additional risk information for this product may be found in the prospectus or other product materials, if available. Short-term Redemption Fee Note: None Someone who is seeking an investment option that gradually becomes more conservative over time and who is willing to accept the volatility of the markets. Someone who is seeking a diversified mix of stocks, bonds, and short-term investments in one investment option or who does not feel comfortable making asset allocation choices over time. A mutual fund registered under Vanguard Chester Funds, and managed by Vanguard Group, Inc. This description is only intended to provide a brief overview of the fund. Read the fund s prospectus for more detailed information about the fund. 16

19 Vanguard Target Retirement 2030 Fund Investor Shares VRS Code: Ticker: VTHRX Objective: The investment seeks to provide capital appreciation and current income consistent with its current asset allocation. Strategy: The fund invests in other Vanguard mutual funds according to an asset allocation strategy designed for investors planning to retire and leave the workforce in or within a few years of 2030 (the target year). The fund s asset allocation will become more conservative over time, meaning that the percentage of assets allocated to stocks will decrease while the percentage of assets allocated to bonds and other fixed income investments will increase. Risk: Target date funds are designed for investors expecting to retire around the year indicated in each fund s name. The funds are managed to gradually become more conservative over time as they approach their target date. The investment risk of each target date fund changes over time as its asset allocation changes. The funds are subject to the volatility of the financial markets, including that of equity and fixed income investments in the U.S. and abroad, and may be subject to risks associated with investing in high-yield, small-cap, and foreign securities. Principal invested is not guaranteed at any time, including at or after the funds target dates. Additional risk information for this product may be found in the prospectus or other product materials, if available. Short-term Redemption Fee Note: None Someone who is seeking an investment option that gradually becomes more conservative over time and who is willing to accept the volatility of the markets. Someone who is seeking a diversified mix of stocks, bonds, and short-term investments in one investment option or who does not feel comfortable making asset allocation choices over time. A mutual fund registered under Vanguard Chester Funds, and managed by Vanguard Group, Inc. This description is only intended to provide a brief overview of the fund. Read the fund s prospectus for more detailed information about the fund. Vanguard Target Retirement 2035 Fund Investor Shares VRS Code: Ticker: VTTHX Objective: The investment seeks to provide capital appreciation and current income consistent with its current asset allocation. Strategy: The fund invests in other Vanguard mutual funds according to an asset allocation strategy designed for investors planning to retire and leave the workforce in or within a few years of 2035 (the target year). The fund s asset allocation will become more conservative over time, meaning that the percentage of assets allocated to stocks will decrease while the percentage of assets allocated to bonds and other fixed income investments will increase. Risk: Target date funds are designed for investors expecting to retire around the year indicated in each fund s name. The funds are managed to gradually become more conservative over time as they approach their target date. The investment risk of each target date fund changes over time as its asset allocation changes. The funds are subject to the volatility of the financial markets, including that of equity and fixed income investments in the U.S. and abroad, and may be subject to risks associated with investing in high-yield, small-cap, and foreign securities. Principal invested is not guaranteed at any time, including at or after the funds target dates. Additional risk information for this product may be found in the prospectus or other product materials, if available. Short-term Redemption Fee Note: None Someone who is seeking an investment option that gradually becomes more conservative over time and who is willing to accept the volatility of the markets. Someone who is seeking a diversified mix of stocks, bonds, and short-term investments in one investment option or who does not feel comfortable making asset allocation choices over time. A mutual fund registered under Vanguard Chester Funds, and managed by Vanguard Group, Inc. This description is only intended to provide a brief overview of the fund. Read the fund s prospectus for more detailed information about the fund. 17

20 Vanguard Target Retirement 2040 Fund Investor Shares VRS Code: Ticker: VFORX Objective: The investment seeks to provide capital appreciation and current income consistent with its current asset allocation. Strategy: The fund invests in other Vanguard mutual funds according to an asset allocation strategy designed for investors planning to retire and leave the workforce in or within a few years of 2040 (the target year). The fund s asset allocation will become more conservative over time, meaning that the percentage of assets allocated to stocks will decrease while the percentage of assets allocated to bonds and other fixed income investments will increase. Risk: Target date funds are designed for investors expecting to retire around the year indicated in each fund s name. The funds are managed to gradually become more conservative over time as they approach their target date. The investment risk of each target date fund changes over time as its asset allocation changes. The funds are subject to the volatility of the financial markets, including that of equity and fixed income investments in the U.S. and abroad, and may be subject to risks associated with investing in high-yield, small-cap, and foreign securities. Principal invested is not guaranteed at any time, including at or after the funds target dates. Additional risk information for this product may be found in the prospectus or other product materials, if available. Short-term Redemption Fee Note: None Someone who is seeking an investment option that gradually becomes more conservative over time and who is willing to accept the volatility of the markets. Someone who is seeking a diversified mix of stocks, bonds, and short-term investments in one investment option or who does not feel comfortable making asset allocation choices over time. A mutual fund registered under Vanguard Chester Funds, and managed by Vanguard Group, Inc. This description is only intended to provide a brief overview of the fund. Read the fund s prospectus for more detailed information about the fund. Vanguard Target Retirement 2045 Fund Investor Shares VRS Code: Ticker: VTIVX Objective: The investment seeks to provide capital appreciation and current income consistent with its current asset allocation. Strategy: The fund invests in other Vanguard mutual funds according to an asset allocation strategy designed for investors planning to retire and leave the workforce in or within a few years of 2045 (the target year). The fund s asset allocation will become more conservative over time, meaning that the percentage of assets allocated to stocks will decrease while the percentage of assets allocated to bonds and other fixed income investments will increase. Risk: Target date funds are designed for investors expecting to retire around the year indicated in each fund s name. The funds are managed to gradually become more conservative over time as they approach their target date. The investment risk of each target date fund changes over time as its asset allocation changes. The funds are subject to the volatility of the financial markets, including that of equity and fixed income investments in the U.S. and abroad, and may be subject to risks associated with investing in high-yield, small-cap, and foreign securities. Principal invested is not guaranteed at any time, including at or after the funds target dates. Additional risk information for this product may be found in the prospectus or other product materials, if available. Short-term Redemption Fee Note: None Someone who is seeking an investment option that gradually becomes more conservative over time and who is willing to accept the volatility of the markets. Someone who is seeking a diversified mix of stocks, bonds, and short-term investments in one investment option or who does not feel comfortable making asset allocation choices over time. A mutual fund registered under Vanguard Chester Funds, and managed by Vanguard Group, Inc. This description is only intended to provide a brief overview of the fund. Read the fund s prospectus for more detailed information about the fund. 18

21 Vanguard Target Retirement 2050 Fund Investor Shares VRS Code: Ticker: VFIFX Objective: The investment seeks to provide capital appreciation and current income consistent with its current asset allocation. Strategy: The fund invests in other Vanguard mutual funds according to an asset allocation strategy designed for investors planning to retire and leave the workforce in or within a few years of 2050 (the target year). The fund s asset allocation will become more conservative over time, meaning that the percentage of assets allocated to stocks will decrease while the percentage of assets allocated to bonds and other fixed income investments will increase. Risk: Target date funds are designed for investors expecting to retire around the year indicated in each fund s name. The funds are managed to gradually become more conservative over time as they approach their target date. The investment risk of each target date fund changes over time as its asset allocation changes. The funds are subject to the volatility of the financial markets, including that of equity and fixed income investments in the U.S. and abroad, and may be subject to risks associated with investing in high-yield, small-cap, and foreign securities. Principal invested is not guaranteed at any time, including at or after the funds target dates. Additional risk information for this product may be found in the prospectus or other product materials, if available. Short-term Redemption Fee Note: None Someone who is seeking an investment option that gradually becomes more conservative over time and who is willing to accept the volatility of the markets. Someone who is seeking a diversified mix of stocks, bonds, and short-term investments in one investment option or who does not feel comfortable making asset allocation choices over time. A mutual fund registered under Vanguard Chester Funds, and managed by Vanguard Group, Inc. This description is only intended to provide a brief overview of the fund. Read the fund s prospectus for more detailed information about the fund. Vanguard Target Retirement 2055 Fund Investor Shares VRS Code: Ticker: VFFVX Objective: The investment seeks to provide capital appreciation and current income consistent with its current asset allocation. Strategy: The fund invests in other Vanguard mutual funds according to an asset allocation strategy designed for investors planning to retire and leave the workforce in or within a few years of 2055 (the target year). The fund s asset allocation will become more conservative over time, meaning that the percentage of assets allocated to stocks will decrease while the percentage of assets allocated to bonds and other fixed income investments will increase. Risk: Target date funds are designed for investors expecting to retire around the year indicated in each fund s name. The funds are managed to gradually become more conservative over time as they approach their target date. The investment risk of each target date fund changes over time as its asset allocation changes. The funds are subject to the volatility of the financial markets, including that of equity and fixed income investments in the U.S. and abroad, and may be subject to risks associated with investing in high-yield, small-cap, and foreign securities. Principal invested is not guaranteed at any time, including at or after the funds target dates. Additional risk information for this product may be found in the prospectus or other product materials, if available. Short-term Redemption Fee Note: None Someone who is seeking an investment option that gradually becomes more conservative over time and who is willing to accept the volatility of the markets. Someone who is seeking a diversified mix of stocks, bonds, and short-term investments in one investment option or who does not feel comfortable making asset allocation choices over time. A mutual fund registered under Vanguard Chester Funds, and managed by Vanguard Group, Inc. This description is only intended to provide a brief overview of the fund. Read the fund s prospectus for more detailed information about the fund. 19

22 Vanguard Target Retirement 2060 Fund Investor Shares VRS Code: Ticker: VTTSX Objective: The investment seeks to provide capital appreciation and current income consistent with its current asset allocation. Strategy: The fund invests in other Vanguard mutual funds according to an asset allocation strategy designed for investors planning to retire and leave the workforce in or within a few years of 2060 (the target year). The fund s asset allocation will become more conservative over time, meaning that the percentage of assets allocated to stocks will decrease while the percentage of assets allocated to bonds and other fixed income investments will increase. Risk: Target date funds are designed for investors expecting to retire around the year indicated in each fund s name. The funds are managed to gradually become more conservative over time as they approach their target date. The investment risk of each target date fund changes over time as its asset allocation changes. The funds are subject to the volatility of the financial markets, including that of equity and fixed income investments in the U.S. and abroad, and may be subject to risks associated with investing in high-yield, small-cap, and foreign securities. Principal invested is not guaranteed at any time, including at or after the funds target dates. Additional risk information for this product may be found in the prospectus or other product materials, if available. Short-term Redemption Fee Note: None Someone who is seeking an investment option that gradually becomes more conservative over time and who is willing to accept the volatility of the markets. Someone who is seeking a diversified mix of stocks, bonds, and short-term investments in one investment option or who does not feel comfortable making asset allocation choices over time. A mutual fund registered under Vanguard Chester Funds, and managed by Vanguard Group, Inc. This description is only intended to provide a brief overview of the fund. Read the fund s prospectus for more detailed information about the fund. 20

23 Level 2: Core Investment Options Investment options to the left have potentially more inflation risk and less investment risk Investment options to the right have potentially less inflation risk and more investment risk CONSERVATIVE AGGRESSIVE BONDS STOCKS AND BONDS STOCKS STABLE VALUE BOND BALANCED/ HYBRID DOMESTIC EQUITY INTERNATIONAL/ GLOBAL EQUITY VOYA STABILIZER Dodge & Cox Income Fund Oakmark Equity and Income Fund Class I Large Value AllianzGI NFJ Dividend Value Fund Institutional Class Mid Value Fidelity Low- Priced Stock Fund Class K Large Blend Spartan 500 Index Fund Institutional Class Large Growth Fidelity Contrafund Class K Mid Growth Artisan Mid Cap Fund Institutional Class Dodge & Cox International Stock Fund Fidelity Diversified International Fund Class K Small Blend Cambiar Small Cap Institutional Class Small Growth LKCM Small Capital Equity Fund Class Institutional This spectrum, with the exception of the Domestic Equity category, is based on Fidelity s analysis of the characteristics of the general investment categories and not on the actual investment options and their holdings, which can change frequently. Investment options in the Domestic Equity category are based on the options Morningstar categories as of 01/31/2015. Morningstar categories are based on a fund s style as measured by its underlying portfolio holdings over the past three years and may change at any time. These style calculations do not represent the investment options objectives and do not predict the investment options future styles. Investment options are listed in alphabetical order within each investment category. Risk associated with the investment options can vary significantly within each particular investment category and the relative risk of categories may change under certain economic conditions. For a more complete discussion of risk associated with the mutual fund options, please read the prospectuses before making your investment decisions. The spectrum does not represent actual or implied performance. 21

24 Level 2: Core Investment Options AllianzGI NFJ Dividend Value Fund Institutional Class VRS Code: Ticker: NFJEX Objective: The investment seeks long-term growth of capital and income. Strategy: The fund seeks to achieve its investment objective by normally investing 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 conditions, the fund will invest primarily in common stocks of companies with market capitalizations greater than $3.5 billion. Risk: Value stocks can perform differently than other types of stocks and can continue to be undervalued by the market for long periods of time. Stock markets are volatile and can decline significantly in response to adverse issuer, political, regulatory, market, economic or other developments. These risks may be magnified in foreign markets. Additional risk information for this product may be found in the prospectus or other product materials, if available. Short-term Redemption Fee Note: None Someone who is seeking the potential for long-term share-price appreciation and, secondarily, dividend income. Someone who is comfortable with the volatility of large-cap stocks and value-style investments. A mutual fund registered under Allianz Funds, and managed by Allianz Global Investors Fund Management LLC. This description is only intended to provide a brief overview of the fund. Read the fund s prospectus for more detailed information about the fund. Artisan Mid Cap Fund Institutional Class 22 VRS Code: Ticker: APHMX Objective: The investment seeks maximum long-term capital growth. Strategy: The fund normally invests no less than 80% of its net assets in the common stocks of medium-sized companies. It defines a medium-sized company as one with a market capitalization greater than the market capitalization of the smallest company in the Russell Midcap Index and less than three times the weighted average market capitalization of companies in the index. The fund maintains a weighted average market capitalization of not more than 1.5 times the weighted average market capitalization of the companies included in the Russell Midcap Index. Risk: Growth stocks can perform differently from the market as a whole and can be more volatile than other types of stocks. The securities of smaller, less well-known companies can be more volatile than those of larger companies. Stock markets are volatile and can decline significantly in response to adverse issuer, political, regulatory, market, economic or other developments. These risks may be magnified in foreign markets. Additional risk information for this product may be found in the prospectus or other product materials, if available. Short-term Redemption Fee Note: None Someone who is seeking the potential for long-term share-price appreciation. Someone who is willing to accept the generally greater price volatility associated both with growth-oriented stocks and with smaller companies. A mutual fund registered under Artisan Partners Funds, Inc., and managed by Artisan Partners Limited Partnership. This description is only intended to provide a brief overview of the fund. Read the fund s prospectus for more detailed information about the fund. The Russell Midcap Index is an unmanaged market capitalization-weighted index of 800 medium-capitalization stocks. The stocks are also members of the Russell 1000 index. Except for Life of Fund returns, the analysis on these pages may be based, in part, on adjusted historical returns for periods prior to the class s actual inception of 07/03/2000. These calculated returns reflect the historical performance of the oldest share class of the fund, with an inception date of 06/27/1997, adjusted to reflect the fees and expenses of this share class (when this share class s fees and expenses are higher). Please refer to a fund s prospectus for information regarding fees and expenses. These adjusted historical returns are not actual returns. Calculation methodologies utilized by Morningstar may differ from those applied by other entities, including the fund itself.

25 Cambiar Small Cap Institutional Class VRS Code: Ticker: CAMZX Objective: The investment seeks long-term capital appreciation. Strategy: Under normal circumstances, the fund invests at least 80% of its net assets, plus any borrowings for investment purposes, in common stocks of small cap companies. The Adviser s approach focuses first on individual stocks and then on industries or sectors. It does not attempt to time the market. Risk: The securities of smaller, less well-known companies can be more volatile than those of larger companies. Value and growth stocks can perform differently from other types of stocks. Growth stocks can be more volatile. Value stocks can continue to be undervalued by the market for long periods of time. Stock markets are volatile and can decline significantly in response to adverse issuer, political, regulatory, market, economic or other developments. These risks may be magnified in foreign markets. Additional risk information for this product may be found in the prospectus or other product materials, if available. Short-term Redemption Fee Note: None Someone who is seeking the potential for long-term share-price appreciation and, secondarily, dividend income. Someone who is seeking both growth- and value-style investments and who is willing to accept the generally greater volatility of investments in smaller companies. A mutual fund registered under Advisors Inner Circle (Cambiar), and managed by Cambiar Investors LLC. This description is only intended to provide a brief overview of the fund. Read the fund s prospectus for more detailed information about the fund. The Russell 2000 Index is an unmanaged market capitalization-weighted index of 2,000 small company stocks of U.S. domiciled companies. Except for Life of Fund returns, the analysis on these pages may be based, in part, on adjusted historical returns for periods prior to the class s actual inception of 10/31/2008. These calculated returns reflect the historical performance of the oldest share class of the fund, with an inception date of 08/31/2004, adjusted to reflect the fees and expenses of this share class (when this share class s fees and expenses are higher). Please refer to a fund s prospectus for information regarding fees and expenses. These adjusted historical returns are not actual returns. Calculation methodologies utilized by Morningstar may differ from those applied by other entities, including the fund itself. Dodge & Cox Income Fund VRS Code: Objective: The investment seeks a high and stable rate of current income, consistent with long-term preservation of capital. Strategy: The fund invests in a diversified portfolio of high-quality bonds and other debt securities. Normally, the fund will invest at least 80% of its total assets in the following categories: debt obligations issued or guaranteed by the U.S. government, its agencies or GSEs; investment-grade debt securities; unrated securities if deemed to be of investmentgrade quality by Dodge & Cox; and bankers acceptances, bank certificates of deposit, repurchase agreements, and commercial paper. Risk: In general the bond market is volatile, and fixed income securities carry interest rate risk. (As interest rates rise, bond prices usually fall, and vice versa. This effect is usually more pronounced for longer-term securities.) Fixed income securities also carry inflation risk and credit and default risks for both issuers and counterparties. Unlike individual bonds, most bond funds do not have a maturity date, so avoiding losses caused by price volatility by holding them until maturity is not possible. Additional risk information for this product may be found in the prospectus or other product materials, if available. Short-term Redemption Fee Note: None Someone who is seeking potential returns primarily in the form of interest dividends rather than through an increase in share price. Someone who is seeking to diversify an equity portfolio with a more conservative investment option. A mutual fund registered under Dodge & Cox Funds, and managed by Dodge & Cox. This description is only intended to provide a brief overview of the fund. Read the fund s prospectus for more detailed information about the fund. 23

26 Dodge & Cox International Stock Fund VRS Code: Ticker: DODFX Objective: The investment seeks long-term growth of principal and income. Strategy: The fund invests primarily in a diversified portfolio of equity securities issued by non-u.s. companies from at least three different countries, including emerging market countries. It will invest at least 80% of its total assets in common stocks, preferred stocks, securities convertible into common stocks, and securities that carry the right to buy common stocks of non-u.s. companies. The fund invests primarily in medium-to-large well established companies based on standards of the applicable market. It may also invest directly or indirectly in restricted securities of U.S. and non- U.S. companies. Risk: Foreign securities are subject to interest-rate, currency-exchange-rate, economic, and political risks, all of which may be magnified in emerging markets. Value and growth stocks can perform differently from other types of stocks. Growth stocks can be more volatile. Value stocks can continue to be undervalued by the market for long periods of time. Stock markets are volatile and can decline significantly in response to adverse issuer, political, regulatory, market, economic or other developments. Additional risk information for this product may be found in the prospectus or other product materials, if available. Short-term Redemption Fee Note: None Someone who is seeking to complement a portfolio of domestic investments with international investments, which can behave differently. Someone who is willing to accept the higher degree of risk associated with investing overseas. A mutual fund registered under Dodge & Cox Funds, and managed by Dodge & Cox. This description is only intended to provide a brief overview of the fund. Read the fund s prospectus for more detailed information about the fund. Fidelity Contrafund Class K VRS Code: Ticker: FCNKX Objective: Seeks capital appreciation. Strategy: Investing in securities of companies whose value FMR believes is not fully recognized by the public. Investing in either growth stocks or value stocks or both. Normally investing primarily in common stocks. Risk: The value of the fund s domestic and foreign investments will vary from day to day in response to many factors. Stock values fluctuate in response to the activities of individual companies, and general market and economic conditions. Investments in foreign securities involve greater risk than U.S. investments. You may have a gain or loss when you sell your shares. Short-term Redemption Fee Note: None Someone who is seeking the potential for long-term share-price appreciation. Someone who is willing to accept the generally greater price volatility associated with growth-oriented stocks. A mutual fund registered under Fidelity Contrafund, and managed by Fidelity Management & Research Company. This description is only intended to provide a brief overview of the fund. Read the fund s prospectus for more detailed information about the fund. On May 9, 2008, an initial offering of the retirement (K) class took place. Returns and expenses prior to that date are those of the non-k, non-advisor class. Had K class expenses been reflected in the returns shown, total returns would have been higher. 24

27 Fidelity Diversified International Fund Class K VRS Code: Ticker: FDIKX Objective: Seeks capital growth. Strategy: Normally investing primarily in non-u.s. securities. Normally investing primarily in common stocks. Risk: Stock markets, especially foreign markets, are volatile and can decline significantly in response to adverse issuer, political, regulatory, market, or economic developments. Foreign securities are subject to interest rate, currency exchange rate, economic, and political risks, all of which are magnified in emerging markets. Short-term Redemption Fee Note: This fund has a short-term redemption fee of 1.00% for fee-eligible shares held less than 30 days. Someone who is seeking to complement a portfolio of domestic investments with international investments, which can behave differently. Someone who is willing to accept the higher degree of risk associated with investing overseas. A mutual fund registered under Fidelity Investment Trust, and managed by Fidelity Management & Research Company. This description is only intended to provide a brief overview of the fund. Read the fund s prospectus for more detailed information about the fund. On May 9, 2008, an initial offering of the retirement (K) class took place. Returns and expenses prior to that date are those of the non-k, non-advisor class. Had K class expenses been reflected in the returns shown, total returns would have been higher. Fidelity Low-Priced Stock Fund Class K VRS Code: Ticker: FLPKX Objective: Seeks capital appreciation. Strategy: Normally invests primarily in common stocks. Normally investing at least 80% of assets in low-priced stocks (those priced at or below $35 per share), which can lead to investments in small and medium-sized companies. Potentially investing in stocks not considered low-priced. Investing in domestic and foreign issuers. Investing in either growth or value stocks or both. Risk: Stock values fluctuate in response to the activities of individual companies, and general market and economic conditions. Foreign markets can be more volatile than the U.S. market due to increased risks of adverse issuer, political, regulatory, market, or economic developments and can perform differently from the U.S. market. You may have a gain or loss when you sell your shares. The securities of small, less well-known companies may be more volatile than those of larger companies. Investments in foreign securities involve risks in addition to those of U.S. investments, including increased political and economic risk, as well as exposure to currency fluctuations. Short-term Redemption Fee Note: This fund has a short-term redemption fee of 1.50% for fee-eligible shares held less than 90 days. Someone who is seeking the potential for long-term share-price appreciation and, secondarily, dividend income. Someone who is comfortable with value-style investments and the potentially greater volatility of investments in smaller companies. A mutual fund registered under Fidelity Puritan Trust, and managed by Fidelity Management & Research Company. This description is only intended to provide a brief overview of the fund. Read the fund s prospectus for more detailed information about the fund. On May 9, 2008, an initial offering of the retirement (K) class took place. Returns and expenses prior to that date are those of the non-k, non-advisor class. Had K class expenses been reflected in the returns shown, total returns would have been higher. 25

28 LKCM Small Capital Equity Fund Class Institutional VRS Code: Ticker: LKSCX Objective: The investment seeks to maximize long-term capital appreciation. Strategy: The fund seeks to achieve its investment objective by investing under normal circumstances at least 80% of its net assets (plus any borrowings for investment purposes) in equity securities of smaller companies. The fund primarily chooses investments that Luther King Capital Management Corporation ( Adviser ) believes are likely to have aboveaverage growth in revenue and/or earnings and potential for above-average capital appreciation. Smaller companies are those with market capitalizations at the time of investment between $600 million and $4.5 billion. Risk: The securities of smaller, less well-known companies can be more volatile than those of larger companies. Growth stocks can perform differently from the market as a whole and can be more volatile than other types of stocks. Stock markets are volatile and can decline significantly in response to adverse issuer, political, regulatory, market, economic or other developments. These risks may be magnified in foreign markets. Additional risk information for this product may be found in the prospectus or other product materials, if available. Short-term Redemption Fee Note: None Someone who is seeking the potential for long-term share-price appreciation. Someone who is willing to accept the generally greater price volatility associated both with growth-oriented stocks and with smaller companies. A mutual fund registered under LKCM Funds, and managed by Luther King Capital Management Corp. This description is only intended to provide a brief overview of the fund. Read the fund s prospectus for more detailed information about the fund. Oakmark Equity and Income Fund Class I VRS Code: Ticker: OAKBX Objective: The investment seeks income and preservation and growth of capital. Strategy: The fund invests primarily in a diversified portfolio of U.S. equity and debt securities (although the fund may invest up to 35% of its total assets in equity and debt securities of non-u.s. issuers). It is intended to present a balanced investment program between growth and income by investing approximately 40%-75% of its total assets in common stock, including securities convertible into common stock, and up to 60% of its assets in U.S. government securities and debt securities, including inflation-indexed securities, rated at time of purchase within the two highest grades. Risk: Stock markets are volatile and can decline significantly in response to adverse issuer, political, regulatory, market, economic or other developments. These risks may be magnified in foreign markets. In general the bond market is volatile, and fixed income securities carry interest rate risk. (As interest rates rise, bond prices usually fall, and vice versa. This effect is usually more pronounced for longer-term securities.) Fixed income securities also carry inflation risk and credit and default risks for both issuers and counterparties. Additional risk information for this product may be found in the prospectus or other product materials, if available. Short-term Redemption Fee Note: None Someone who is seeking to invest in a fund that invests in both stocks and bonds. Someone who is seeking the potential both for income and for long-term share-price appreciation and who is willing to accept the volatility of the bond and stock markets. A mutual fund registered under Harris Associates Investment Trust, and managed by Harris Associates L.P. This description is only intended to provide a brief overview of the fund. Read the fund s prospectus for more detailed information about the fund. 26

29 Spartan 500 Index Fund Institutional Class VRS Code: Ticker: FXSIX Objective: Seeks to provide investment results that correspond to the total return (i.e., the combination of capital changes and income) performance of common stocks publicly traded in the United States. Strategy: Normally investing at least 80% of assets in common stocks included in the S&P 500 Index, which broadly represents the performance of common stocks publicly traded in the United States. Risk: Stock markets, especially foreign markets, are volatile and can decline significantly in response to adverse issuer, political, regulatory, market, or economic developments. Short-term Redemption Fee Note: None Someone who is seeking the potential for long-term share-price appreciation and, secondarily, dividend income. Someone who is seeking both growth- and value-style investments and who is willing to accept the volatility associated with investing in the stock market. A mutual fund registered under Fidelity Concord Street Trust, and managed by Fidelity Management & Research Company. This description is only intended to provide a brief overview of the fund. Read the fund s prospectus for more detailed information about the fund. The S&P 500 Index is a registered service mark of The McGraw-Hill Companies, Inc., and has been licensed for use by Fidelity Distributors Corporation and its affiliates. It is an unmanaged index of the common stock prices of 500 widely held U.S. stocks that includes the reinvestment of dividends. Initial offering of the Institutional Share Class took place on May 4, Returns prior to that date are those of the Fidelity Advantage Class and reflect the Fidelity Advantage Class expense ratio. Had the Institutional Class expense ratio been reflected, total returns would have been higher. Fidelity is voluntarily reimbursing a portion of the fund s expenses. If Fidelity had not, the returns would have been lower. 27

30 VOYA STABILIZER VRS Code: Ticker: N/A Objective: To provide a high quality investment option, earnings stability and liquidity, while offering a guarantee of principal and interest. Strategy: The VOYA Stable Value Account is invested in a separate account of VIAC. This diversified separate account portfolio consists of publicly traded, high quality, fixed income instruments, including mortgage pass-through securities, and commercial mortgage backed securities. Generally, high quality fixed-income instruments have low risk, but they are still subject to some risks, including such things as the financial health of the issuer, changing interest rates, and the supply and demand for a particular security in the marketplace. The VOYA Stable Value Account guarantees principal and a minimum guaranteed interest rate for the life of the contract. The rate used to credit interest to your account will vary over time and can be adjusted, based on market conditions, approximately every 3 months. Account balances are backed by the underlying assets of the contract s separate account and the claims paying ratings of VIAC. Interest rates are subject to market risk. Returns will vary. No restrictions or additional fees, including surrender charges, will apply to the amount you withdraw as a result of retirement, death, disability, unforeseen hardship, separation from service, or attainment of age 65. Risk: The fund is invested in a separate account, which is a diversified portfolio of fixed-income assets. Guarantees are subject to the claims paying ability of the issuer. Restrictions or fees may apply to exchanges or withdrawals. The Contracts provide for the payment of certain withdrawals and exchanges at book value during the terms of the Contracts. In order to maintain the Contract issuers promise to pay such withdrawals and exchanges at book value, the Contracts subject the fund and its participants to certain restrictions. For example, withdrawals prompted by certain events (e.g., layoffs, early retirement windows, spin-offs, sale of a division, facility closings, plan terminations, partial plan terminations, changes in laws or regulations) may be paid at the market value of the fund s securities, which may be less than your book value balance or may restrict withdrawals in these events. Certain investment options offered by your plan (e.g., money market funds, short term bond funds, certain asset allocation/lifecycle funds and brokerage window) may be deemed by the Contract issuers to compete with this fund. The terms of the Contracts prohibit you from making a direct exchange from this fund to such competing funds. Instead, you must first exchange to a non-competing fund for 90 days. While these requirements may seem restrictive, they are imposed by the Contract issuers as a condition for the issuer s promise to pay certain withdrawals and exchanges at book value. Short-term Redemption Fee Note: None Someone who seeks a slightly higher yield over the long term than is offered by money market funds, but who is willing to accept slightly more investment risk. Someone who is interested in balancing an aggressive portfolio with an investment that seeks to provide a declared crediting rate that is reset on a periodic basis. The investment option is an annuity. The fund is managed by VOYA Retirement Insurance and Annuity Company (VIAC). This description is only intended to provide a brief overview of the fund. The VOYA Stable Value Account is not a mutual fund and is underwritten and offered by VIAC, which guarantees your principal and interest. Information furnished on the VOYA Stable Value Account was furnished by VOYA. This investment option is not a mutual fund. As of September 1, 2014, this fund changed its name from ING STABILIZER. 28

31 Level 3: Expanded Investment Options Investment options to the left have potentially more inflation risk and less investment risk Investment options to the right have potentially less inflation risk and more investment risk CONSERVATIVE AGGRESSIVE BONDS STOCKS AND BONDS STOCKS Stable Value Bond Balanced/Hybrid Domestic Equity International/ Global Equity Large Value Large Blend Large Growth Mid Value Mid Blend Mid Growth Small Blend Small Growth This spectrum, with the exception of the Domestic Equity category, is based on Fidelity s analysis of the characteristics of the general investment categories of the investment options and not on the actual security holdings, which can change frequently. Investment options in the Domestic Equity category are based on the options Morningstar categories as of 01/31/2015. Morningstar categories are based on a fund s style as measured by its underlying portfolio holdings over the past three years and may change at any time. These style calculations do not represent the investment options objectives and do not predict the investment options future styles. Investment options are listed in alphabetical order within each investment category. Risk associated with the investment options can vary significantly within each particular investment category, and the relative risk of categories may change under certain economic conditions. For a more complete discussion of risk associated with the mutual fund options, please read the prospectuses before making your investment decision. The spectrum does not represent actual or implied performance. Fidelity Asset Manager Funds Investment options to the left have potentially more inflation risk and less investment risk Investment options to the right have potentially less inflation risk and more investment risk CONSERVATIVE AGGRESSIVE Fidelity Asset Manager 20% Fidelity Asset Manager 30% Fidelity Asset Manager 40% Fidelity Asset Manager 50% Fidelity Asset Manager 60% Fidelity Asset Manager 70% Fidelity Asset Manager 85% The portfolio manager of the Fidelity Asset Manager funds has the flexibility to periodically shift investments among the three asset classes (stock, bond, short-term investments), depending on the current outlook for the various markets. The risk levels of the Fidelity Asset Manager funds cannot be portrayed as a single point on the standard objective spectrum along with the other investment options because they can change periodically according to how the assets are invested. Placement of each Fidelity Asset Manager fund on this spectrum is in relation to the other Fidelity Asset Manager funds, which have different investment strategies. 29

32 Level 3: Expanded Investment Options For descriptions of Houston Methodist Plans Level 3: Expanded Investment Options, please log on to Fidelity NetBenefits at netbenefits.com/methodist, or call a Fidelity Representative at and request a copy of the individual prospectuses. 30 Asset Allocation Code Investment Option Name Fidelity Asset Manager 20% Fidelity Asset Manager 30% Fidelity Asset Manager 40% Fidelity Asset Manager 50% Fidelity Asset Manager 60% Fidelity Asset Manager 70% Fidelity Asset Manager 85% Money Market/Short Term Code Investment Option Name Fidelity Cash Reserves Fidelity Money Market Fund Fidelity Money Market Trust Retirement Government Money Market Portfolio Fidelity Money Market Trust Retirement Money Market Portfolio Fidelity Select Money Market Portfolio Fidelity Treasury Only Money Market Fund Fidelity U.S. Government Reserves Bond GOVERNMENT Code Investment Option Name Fidelity GNMA Fund Fidelity Government Income Fund Fidelity Intermediate Government Income Fund Fidelity Limited Term Government Fund Spartan Intermediate Treasury Bond Index Fund Fidelity Advantage Class Spartan Long-Term Treasury Bond Index Fund Fidelity Advantage Class Spartan Short-Term Treasury Bond Index Fund Fidelity Advantage Class DIVERSIFIED Fidelity Conservative Income Bond Fund Fidelity Corporate Bond Fund Fidelity Intermediate Bond Fund Fidelity Investment Grade Bond Fund Fidelity Mortgage Securities Fund Fidelity Short-Term Bond Fund Fidelity Strategic Income Fund Fidelity Total Bond Fund Spartan U.S. Bond Index Fund Fidelity Advantage Class Strategic Advisers Core Income Multi-Manager Fund INFLATION-PROTECTED Code Investment Option Name Fidelity Inflation-Protected Bond Fund Spartan Inflation-Protected Bond Index Fund Fidelity Advantage Class HIGH YIELD Fidelity Capital & Income Fund Fidelity Floating Rate High Income Fund Fidelity Focused High Income Fund Fidelity Global High Income Fund Fidelity High Income Fund Strategic Advisers Income Opportunities Fund of Funds INTERNATIONAL/GLOBAL Fidelity New Markets Income Fund Balanced/Hybrid Code Investment Option Name Fidelity Balanced Fund Class K Fidelity Four-in-One Index Fund Fidelity Puritan Fund Class K Fidelity Strategic Dividend & Income Fund Fidelity Strategic Real Return Fund CONVERTIBLES Fidelity Convertible Securities Fund INTERNATIONAL/GLOBAL Fidelity Global Balanced Fund Fidelity Global Strategies Fund Domestic Equities LARGE VALUE Code Investment Option Name Fidelity Blue Chip Value Fund Fidelity Equity Dividend Income Fund Class K Fidelity Equity-Income Fund Class K Fidelity Large Cap Value Enhanced Index Fund Fidelity Stock Selector Large Cap Value Fund Fidelity Value Discovery Fund Class K Strategic Advisers Value Multi-Manager Fund Shareholders may be subject to certain short-term trading fees. Please consult the prospectus for further information.

33 Domestic Equities, continued LARGE BLEND Code Investment Option Name Fidelity Disciplined Equity Fund Class K Fidelity Dividend Growth Fund Class K Fidelity Growth & Income Portfolio Class K Fidelity Large Cap Core Enhanced Index Fund Fidelity Large Cap Stock Fund Fidelity Mega Cap Stock Fund Spartan Total Market Index Fund Fidelity Advantage Class Strategic Advisers Core Multi-Manager Fund LARGE GROWTH Fidelity Fifty Fidelity Blue Chip Growth Fund Class K Fidelity Capital Appreciation Fund Class K Fidelity Export and Multinational Fund Class K Fidelity Focused Stock Fund Fidelity Fund Class K Fidelity Growth Company Fund Class K Fidelity Growth Discovery Fund Class K Fidelity Independence Fund Class K Fidelity Large Cap Growth Enhanced Index Fund Fidelity Nasdaq Composite Index Fund Fidelity New Millennium Fund Fidelity OTC Portfolio Class K Fidelity Stock Selector All Cap Fund Class K Fidelity Trend Fund Strategic Advisers Growth Multi-Manager Fund MID VALUE Fidelity Leveraged Company Stock Fund Class K Fidelity Mid Cap Value Fund Fidelity Value Fund Class K Fidelity Value Strategies Fund Class K MID BLEND Fidelity Mid Cap Enhanced Index Fund Spartan Extended Market Index Fund Fidelity Advantage Class Spartan Mid Cap Index Fund Fidelity Advantage Class MID GROWTH Fidelity Growth Strategies Fund Class K Fidelity Mid-Cap Stock Fund Class K Fidelity Stock Selector Mid Cap Fund SMALL VALUE Fidelity Small Cap Value Fund SMALL BLEND Code Investment Option Name Fidelity Small Cap Discovery Fund Fidelity Small Cap Enhanced Index Fund Fidelity Small Cap Stock Fund Fidelity Stock Selector Small Cap Fund Spartan Small Cap Index Fund Fidelity Advantage Class Strategic Advisers Small-Mid Cap Multi-Manager Fund SMALL GROWTH Fidelity Small Cap Growth Fund International/Global Code Investment Option Name Fidelity Global Bond Fund Fidelity International Bond Fund DIVERSIFIED Fidelity Global Equity Income Fund Fidelity International Capital Appreciation Fund Fidelity International Discovery Fund Class K Fidelity International Enhanced Index Fund Fidelity International Growth Fund Fidelity International Small Cap Fund Fidelity International Small Cap Opportunities Fund Fidelity International Value Fund Fidelity Overseas Fund Class K Fidelity Worldwide Fund Spartan Global ex U.S. Index Fund Fidelity Advantage Class Spartan International Index Fund Fidelity Advantage Class Strategic Advisers International Multi-Manager Fund EMERGING MARKETS Fidelity Emerging Europe, Middle East, Africa (EMEA) Fund Fidelity Emerging Markets Discovery Fund Fidelity Emerging Markets Fund Class K Fidelity Total Emerging Markets Fund Spartan Emerging Markets Index Fund Fidelity Advantage Class Strategic Advisers Emerging Markets Fund of Funds Specialty Code Investment Option Name Spartan Real Estate Index Fund Fidelity Advantage Class 31 Shareholders may be subject to certain short-term trading fees. Please consult the prospectus for further information.

34 Level 4: Sector and Foreign Investment Options Investment options to the left have potentially more inflation risk and less investment risk Investment options to the right have potentially less inflation risk and more investment risk CONSERVATIVE AGGRESSIVE BONDS STOCKS AND BONDS STOCKS Stable Value Bond Balanced/Hybrid Domestic Equity International/ Global Equity Specialty Company Stock This spectrum, with the exception of the Domestic Equity category, is based on Fidelity s analysis of the characteristics of the general investment categories of the investment options and not on the actual security holdings, which can change frequently. Investment options in the Domestic Equity category are based on the options Morningstar categories as of 01/31/2015. Morningstar categories are based on a fund s style as measured by its underlying portfolio holdings over the past three years and may change at any time. These style calculations do not represent the investment options objectives and do not predict the investment options future styles. Investment options are listed in alphabetical order within each investment category. Risk associated with the investment options can vary significantly within each particular investment category, and the relative risk of categories may change under certain economic conditions. For a more complete discussion of risk associated with the mutual fund options, please read the prospectuses before making your investment decision. The spectrum does not represent actual or implied performance. 32

35 Level 4: Sector and Foreign Investment Options For descriptions of Houston Methodist Plans Level 4: Sector and Foreign Investment Options, please log on to Fidelity NetBenefits at netbenefits.com/methodist, or call a Fidelity Representative at and request copies of the individual prospectuses. International/Global DIVERSIFIED Code Investment Option Name Fidelity Total International Equity Fund REGIONAL Fidelity Canada Fund Fidelity China Region Fund Fidelity Emerging Asia Fund Fidelity Europe Fund Fidelity Japan Fund Fidelity Japan Smaller Companies Fund Fidelity Latin America Fund Fidelity Nordic Fund Fidelity Pacific Basin Fund SPECIALTY Fidelity International Real Estate Fund Specialty Code Investment Option Name Fidelity Global Commodity Stock Fund Fidelity Real Estate Income Fund Fidelity Real Estate Investment Portfolio Fidelity Select Air Transportation Portfolio Fidelity Select Automotive Portfolio Fidelity Select Banking Portfolio Fidelity Select Biotechnology Portfolio Fidelity Select Brokerage and Investment Management Portfolio Fidelity Select Chemicals Portfolio Fidelity Select Communications Equipment Portfolio Fidelity Select Computers Portfolio Fidelity Select Construction and Housing Portfolio Fidelity Select Consumer Discretionary Portfolio Fidelity Select Consumer Finance Portfolio Fidelity Select Consumer Staples Portfolio Fidelity Select Defense and Aerospace Portfolio Fidelity Select Electronics Portfolio Fidelity Select Energy Portfolio Fidelity Select Energy Service Portfolio Fidelity Select Environment and Alternative Energy Portfolio Code Investment Option Name Fidelity Select Financial Services Portfolio Fidelity Select Gold Portfolio Fidelity Select Health Care Portfolio Fidelity Select Industrial Equipment Portfolio Fidelity Select Industrials Portfolio Fidelity Select Insurance Portfolio Fidelity Select IT Services Portfolio Fidelity Select Leisure Portfolio Fidelity Select Materials Portfolio Fidelity Select Medical Delivery Portfolio Fidelity Select Medical Equipment and Systems Portfolio Fidelity Select Multimedia Portfolio Fidelity Select Natural Gas Portfolio Fidelity Select Natural Resources Portfolio Fidelity Select Pharmaceuticals Portfolio Fidelity Select Retailing Portfolio Fidelity Select Software and Computer Services Portfolio Fidelity Select Technology Portfolio Fidelity Select Telecommunications Portfolio Fidelity Select Transportation Portfolio Fidelity Select Utilities Portfolio Fidelity Select Wireless Portfolio Fidelity Telecom and Utilities Fund 33 Shareholders may be subject to certain short-term trading fees. Please consult the prospectus for further information.

36 2 Step Review and confirm your choices The more involved you are with your plan and your account, the greater your possibilities. Reviewing and confirming your choices is a great place to start. Here s all you need to do: First, go to Fidelity NetBenefits at netbenefits.com/methodist or call , between 7 a.m. and 11 p.m. Central time, Monday through Friday. Next, set up a password. If you re already a Fidelity customer, you can use your existing password. Finally, click the link to the Houston Methodist Plans to access your plan and make changes. Or access your account information through the automated voice response system or a representative. Use the following NetBenefits screenshots to help you log on to your account, set up your password, select your investment allocations, and designate your beneficiaries. Remember, we re here to help. If you need any help along the way, log on to Fidelity NetBenefits at netbenefits.com/methodist or call

37 Fidelity NetBenefits Choose your investments today! The quickest way to set up your investment mix is to visit your account online. Step-by-step instructions are included here. Or call and have a Fidelity Representative assist you. In addition, planning materials and a dedicated voice response system (VRS) in Spanish are available. The VRS provides account balances, password authentication, mutual fund quotes, and some transactions in Spanish. When participants request to speak with a Fidelity Representative from the Spanish VRS, they will automatically be transferred to a Spanish-speaking representative with whom they can request printed materials and discuss their retirement account. Step 1: Go to netbenefits.com/methodist and click Register. (If you have already registered, enter your username and password to log in and skip to step 3.) For illustrative purposes only. Step 2: Set up a password for security purposes. Follow the directions provided to register and log in. For illustrative purposes only. 35

38 Step 3: Click either the HM 403(b) Plan or the HM DCP link. Please note: The steps to follow are the same for reviewing and managing the 403(b) Plan and the DCP Plan. From Quick Links, select the Change Investments link. For illustrative purposes only. Step 4: Changing Investments You will have a choice to change your future contributions or exchange an existing balance. If you want to change or view how your future contributions are invested, click Change Investment Elections. For illustrative purposes only. If you want to make an exchange to your existing balance, select the Exchange ONE Investment or Exchange MULTIPLE Investments link. Please note: Before investing, you ll want to view a mutual fund prospectus online or request a hard copy for each mutual fund in which you want to invest through your plan. Step 5: Request an exchange If you wish to modify how the March 19, 2015, DCP contribution is invested, or make an exchange for your 403(b) Plan investments, you will first need to choose the investment you wish to sell, and then one to buy. For illustrative purposes only. 36

39 Step 6: Choose your funds for the exchange To exchange out of an investment option, you will need to choose the investments to sell. For your convenience, you can view performance information or a prospectus online. For illustrative purposes only. Once you have selected the investments to sell, you will need to select the investments you want to buy (or exchange into). For illustrative purposes only. Step 7: Confirming your exchange You will then be able to preview your selections on the pre-confirm screen. To confirm, click the Process this Exchange button. For illustrative purposes only. You will receive a confirmation number for the exchange. For illustrative purposes only. 37

40 For 403(b) Plan only Step 8: Choose Contribution Amount or Learn More on the welcome page If you click Contribution Amount, you will be able to determine how much you would like to contribute to the 403(b) plan. If you click Manage your Contribution Amount, then Learn, you ll be able to access more detailed information about retirement savings plans, contribution limits, and tax advantages. For illustrative purposes only. Step 9: Review and submit information Once complete, you ll receive an immediate online confirmation. It s that easy. For illustrative purposes only. Be sure to check out the Planning and Library tabs. Within the Planning tab, you can plan for multiple goals while taking advantage of Fidelity s calculators and tools. These help you take the guesswork out of saving for retirement and assist you in building an income strategy to meet your needs. 38 Within the Library, Fidelity s checklists, tools, and videos can help you make smarter choices about your benefits and your money. Learn the basics. Hone your skills. Above all, get the most out of everything we have to offer.

41 Step 10: Change your future investment elections In order to also have next year s DCP contribution invested in funds of your choosing, repeat this process. At Step 4, click Investment Elections instead of Exchanges and follow the prompts to update how your future contributions are invested. For illustrative purposes only. Step 11: Designate or update your beneficiaries Click Your Profile and select Beneficiaries in the About You section. For illustrative purposes only. Step 12: Name your beneficiaries Be sure to have information about each of your beneficiaries and follow the steps. When complete, you will receive an instant online confirmation. For illustrative purposes only. The plans are intended to be participant-directed plans as described in Section 404(c) of ERISA, which means that fiduciaries of the plans are ordinarily relieved of liability for any losses that are the direct and necessary result of investment instructions given by a participant or beneficiary. Third-party trademarks and service marks appearing herein are the property of their respective owners. All other trademarks and service marks are the property of FMR LLC. An annuity is a contract issued by an insurance company and purchased by a consumer for long-term investing. An annuity is not a mutual fund. There are various fees and expenses associated with annuities and, in certain situations, withdrawal penalties may be applicable. This document provides only a summary of the main features of the Houston Methodist Retirement Savings Plans and the Plan Document will govern in the event of discrepancies. Investor Center products and services are offered beyond your employer-sponsored retirement plan FMR LLC. All rights reserved. 39