ABA Retirement Funds Program (the Program ) 408(b)(2) Service Provider Fee Disclosure

Transcription

1 ABA Retirement Funds Program (the Program ) 408(b)(2) Service Provider Fee Disclosure This report provides a summary of information about the investments, trustee, recordkeeping, administrative, and self-directed brokerage services provided by your plan s service providers, as detailed below, as well as the compensation paid for those services. TD Ameritrade, the provider of self-directed brokerage services, will send a supplement to this fee disclosure shortly. The supplement will reflect information that you have already received. This report and the TD Ameritrade supplement are intended to comply with the United States Department of Labor service provider fee disclosure regulations under Section 408(b)(2) of ERISA. For additional information refer to the ABA Retirement Funds Program Annual Disclosure Document for the American Bar Association Members/MTC Collective Trust (April 2017) (the Annual Disclosure Document ). Indirect Compensation and Investment Expenses The chart below shows the components of the investment expenses for the investment options available through the American Bar Association Members/MTC Collective Trust (the Collective Trust ), as well as the compensation paid to the Program s service providers, as disclosed in the Annual Disclosure Document. In addition to the compensation shown in the chart below, Voya and various affiliated companies earn float income on contribution amounts awaiting investment and on distributed funds awaiting payment. Generally, Voya earns a current money market rate on these funds. The compensation received by the providers is paid by the funds offered as investment options through the Collective Trust (the Funds ) and is not an additional expense above the Fund fees. Amounts shown below are based on charges in effect as of April 2017, as described in the Annual Disclosure Document, and are subject to change. Fund Voya 1 Mercer Trust Company ( MTC ) 2 ABA Retirement Funds 11 Investment Advisor Fees 3 Acquired Fund Fees & Expenses 4 Total Fund Operating Expenses 13 Tier I Pre-mixed Diversified Funds Lifetime Income Retirement Date Fund 0.44% 0.13% 0.04% 0.02% 0.03% 0.66% 2020 Retirement Date Fund 0.44% 0.13% 0.04% 0.02% 0.03% 0.66% 2030 Retirement Date Fund 0.44% 0.13% 0.04% 0.02% 0.03% 0.66% 2040 Retirement Date Fund 0.44% 0.13% 0.04% 0.02% 0.03% 0.66% 2050 Retirement Date Fund 0.44% 0.13% 0.04% 0.02% 0.03% 0.66% Conservative Risk Fund % 0.11% 0.04% 0.01% 0.16% 0.70% Moderate Risk Fund % 0.10% 0.04% 0.01% 0.21% 0.72% Aggressive Risk Fund % 0.09% 0.04% 0.01% 0.27% 0.74% Balanced Fund % 0.81% Tier II Portfolio Building Blocks Large Cap Equity Fund 0.44% 0.13% 0.04% 0.26% % Large Cap Index Equity Fund 0.44% 0.13% 0.04% 0.00% % % Mid Cap Index Equity Fund 0.44% 0.13% 0.04% 0.02% 0.01% 0.64% Small-Mid Cap Equity Fund 0.44% 0.13% 0.04% 0.32% 0.15% 1.08% Small Cap Index Equity Fund 0.44% 0.13% 0.04% 0.02% 0.01% 0.64% All Cap Index Equity Fund 0.44% 0.13% 0.04% 0.02% 0.01% 0.64% International All Cap Equity Fund 0.44% 0.13% 0.04% 0.28% 0.17% 1.06% International Index Equity Fund 0.44% 0.13% 0.04% 0.03% 0.05% 0.69% 1

2 Tier II Portfolio Building Blocks (cont.) Fund Voya 1 Mercer Trust Company ( MTC ) 2 ABA Retirement Funds 11 Investment Advisor Fees 3 Acquired Fund Fees & Expenses 4 Total Fund Operating Expenses 13 Global All Cap Equity Fund % 0.98% Bond Core Plus Fund % 0.13% 0.04% 0.13% % Bond Index Fund 0.44% 0.13% 0.04% 0.01% 0.02% 0.63% Stable Asset Return Fund % 0.13% 0.04% 0.13% 0.00% % Real Asset Return Fund 0.44% 0.13% 0.04% 0.06% 0.21% 0.88% Alternative Alpha Fund % 0.13% 0.04% % 1.37% 1 TD Ameritrade makes payments on behalf of the Program in consideration of the Program s services rendered with respect to the Self-Directed Brokerage Accounts. These payments are applied against, and reduce, the Program Expense Fee shown under this heading that is otherwise payable to Voya. 2 Fees paid to Mercer Trust Company ( MTC ) acting as trustee to the Collective Trust. These fees include expenses paid for by the trust relating to recurring operational expenses such as printing, legal, consulting and auditing expenses. 3 For purposes of this table, the estimated amounts of Investment Advisor Fees are based on the rates of Investment Advisor Fees and target allocations to Investment Advisors as of April 1, Each Fund invests some of its assets through other commingled investment vehicles. Certain Funds also invest in other Funds in the Program. As a result, investors in the Funds indirectly bear expenses of those underlying commingled investment vehicles and Funds, which may include, among other things, audit, administration, and legal fees. For purposes of this table, the Acquired Fund Fees and Expenses are based on the ratios of operating expenses and target allocations to the underlying commingled investment vehicles or Funds as of April 1, The Conservative Risk Fund, the Moderate Risk Fund and the Aggressive Risk Fund invest a portion of their assets in other Funds in the Program. Only the Investment Advisor Fees, Program Expense Fees, Trust Management and Administration Fees borne directly by these Funds are included in the appropriate columns. Any fees and expenses borne indirectly through investment in other Funds in the Program are included as Acquired Fund Fees & Expenses. 6 The Balanced Fund is no longer open to new investments. It does not pay any Investment Advisor Fees, Program Expense Fees or Trust, Management and Administration Fees directly. These fees are borne indirectly through the investment in the Large Cap Equity Fund and Bond Core Plus Fund in which the Balanced Fund invests, and are included as the Acquired Fund Fees & Expenses. 7 The Global All Cap Fund does not pay any significant Investment Advisor fees, Program Expense Fees or Trust, Management and Administration Fee directly. These fees are borne indirectly through the investment in the Large Cap Equity Fund, Small-Mid Cap Equity Fund and International All Cap Equity Fund in which the Global All Cap Equity Fund invests, and are included as Acquired Fund Fees & Expenses. 8 From time to time, the Funds may hold investments in business development companies, or BDCs. BDCs are a specialized type of closed-end investment company that invest in, and often provide managerial advice and support to, smaller, developing, often privately-held companies. The Acquired Fund Fees & Expenses of the Fund s investments in BDCs, if any, are not included in the table above. Such fees and expenses, if they had been included in the table above, would have increased Total Annual Fund Operating Expenses of the Bond Core Plus Fund by 0.033% as of December 31, Total Fund Operating Expenses for the Stable Asset Return Fund do not include 0.19% (as of December 31, 2016) in wrap contract fees. The financial statements for the Fund do not include these wrap fees in the Total Operating Expenses for the Fund because the fees are charged against the crediting rate of the Fund. These wrap contract fees have always been reflected in the performance of the Fund. 10 The Alternative Alpha Fund pays no Investment Advisor fees directly (independent of the Trust, Management and Administration fee payable to MTC, which is shown under the MTC heading). The Investment Management fees and other fees and expenses payable by the commingled investment vehicles in which the Alternative Alpha Fund invests are included as Acquired Fund Fees & Expenses of the Fund. 2

3 11 For the period from May 1, 2017 through April 30, 2018, the ABA Retirement Funds have contractually agreed to waive a total of $940,000 of the Program Expense Fee, which equates to approximately 0.020% of Total Annual Fund Operating Expenses, otherwise payable to the ABA Retirement Funds. This waiver will be applied against, and reduce, the ABA Retirement Funds expenses shown under this heading that is otherwise payable to the ABA Retirement Funds. 12 Nominal expenses are paid, but not shown due to rounding. 13 Totals may not sum due to rounding. Mercer Trust Company: Trust, Management, and Administration Mercer Trust Company provides fiduciary and investment services to retirement plans and pooled products, as well as other incidental activities. For the Program, Mercer Trust Company, as trustee, is responsible for selecting and monitoring the Investment Advisors, and as custodian, is responsible for the custody of assets it maintains under the Collective Trust. Mercer Trust Company acts as a fiduciary in the provision of its services. Voya Financial: Recordkeeping and Administration Services Voya, the Program recordkeeper, has been providing recordkeeping and administrative services to defined contribution plans for more than 40 years. Voya brings that experience to the Program by helping Administrators manage their firm s plan through dedicated resources to support plan needs and provide support to help navigate today s regulatory landscape, and communications to help educate, guide and motivate plan participants to take full advantage of the benefits of the Program. Voya s recordkeeping services include the services listed below, and may include additional plan administrative support. Voya does not act in a fiduciary or investment advisory capacity in the provision of these services reporting on participant distributions 401k Prototype Plan Document support Annual plan review and support for DOL plan audits Certified Annual Trust Statement Annual Top Heavy test Annual 415 limitation test Establishment and maintenance of participant accounts Receiving and processing periodic contributions, fund transfers and allocation changes Plan Sponsor campaign library for participant campaigns On-Demand reporting capabilities Personal rate of return Dedicated Plan Participant website Plan Administrator Line (800) Plan Administrator Bulletin Retirement Plan Library for Plan Administrators Online Plan Administrator s Guide (e-pag) and webinars Communications to help educate, guide and motivate your participants to take full advantage of the benefits of your plan including education webinars Onsite Participant education Perspectives Newsletter for Participants Participant benchmarking tools and calculators Facilitating beneficiary changes Local and electronic enrollment support Daily account valuations and reconciliations Monitoring annual 402(g) deferral limit Disbursement of funds as directed by authorized plan representatives Support to help navigate today s regulatory landscape Semi-annual Actual Deferral/Contribution Percentage (ADP/ACP) tests Sponsor/participant account statements Dedicated Plan Sponsor website Toll-free telephone access (interactive voice response or live representatives) Multiple distribution options Hardship suspension and reinstatement Maintaining participant vesting and loan records Annual Program Report for Plan Sponsors Client relationship management Automatic enrollment capabilities Support for multiple contribution sources QDRO/QDRO account maintenance Support for IRS Form 5500 filings Contribution calculation services Estimated monthly income in retirement projections ABA Retirement Funds: Provider Selection, Monitoring and Oversight The Program is sponsored by the ABA Retirement Funds, an Illinois not-for-profit corporation formed by the American Bar Association. The ABA RF selects the Program s service providers and monitors Program operations, as carried out by the Program s service providers. The ABA Retirement Funds acts as a fiduciary in the provision of these services. 3

4 Investment Advisors: Investment Management The Investment Advisors selected by Mercer Trust Company assist Mercer Trust Company in the exercise of its investment responsibility with respect to the Funds by making decisions to buy and sell securities for the Funds subject to monitoring and review by Mercer Trust Company. Each Investment Advisor acts as a fiduciary in the provision of its services. Direct Fees Voya Retirement Advisors, LLC Voya Retirement Advisors, LLC offers independent in-plan advisory services to plan participants (as well as personalized advice regarding distributions following a participant s retirement date for those who use the Optional Professional Management Program). For purposes of the advisory services, it acts as a fiduciary as defined under ERISA 3(21) and as a registered investment adviser under the Investment Advisers Act of It is a wholly-owned subsidiary of Voya Institutional Plan Services, LLC. For participants that elect to use the one-on-one advice service (the Optional Professional Management Program) the fees are applied as detailed below: Balance Annually Monthly Amount per $10,000 First $100, % 0.042% $4.17 Next $150, % 0.033% $3.34 Over $250, % 0.021% $2.09 For purposes of the Optional Professional Management Program services, it acts as a fiduciary as defined under ERISA 3(38) and as a registered investment adviser under the Investment Advisers Act of Brokerage Services TD Ameritrade, Inc. Self-Directed Brokerage Services are provided by TD Ameritrade, Inc. Its fee schedule is attached. ABA Retirement Funds and TD Ameritrade, Inc., member FINRA/SIPC, are separate and unaffiliated companies and are not responsible for each other s services or policies. TD Ameritrade is a trademark jointly owned by TD Ameritrade IP Company, Inc. and The Toronto- Dominion Bank. For more information, see the Annual Disclosure Document sent to you in April 2017 or request a copy by contacting the Plan Administrator Line at (800) , Monday through Friday, 8 A.M. to 8 P.M. Eastern. inquiries may be directed to contactus@abaretirement.com. 4

5 TD Ameritrade Commissions and Service Fees The following lists the fees charged to those individuals with a Self-Directed Brokerage Account ( SDBA ): Commissions: Stocks & ETFs Trade Unlimited Shares (market, limit and stop orders) Price No Commission Commission-Free ETFs Internet orders $6.95 Interactive Voice Response (IVR) phone system orders $14.99 Broker-assisted orders $24.99 Orders executed in multiple lots on the same trading day will be charged a single commission. When an order is partially executed over multiple trading days, the order is subject to a separate commission charge for each trading day. Covered Call Options Options involve risks and are not suitable for all investors. Options trading privileges for SDBA investors require additional approval. To apply for options trading privileges, please complete the TD Ameritrade Plan Participant Account Upgrade Form, which is available on the TD Ameritrade website. Options-approved accounts are required to receive monthly statements either electronically or by U.S. mail. Covered Call Options Price Options $ $0.75 fee per contract Option Exercises and assignments will incur a $10.00 commission. Bonds All buy orders for bonds are subject to a five-bond ($5,000 par value) minimum. Online CD buy orders are subject to a two-cd ($2,000 par value) minimum. TD Ameritrade may act as principal on any fixed-income transaction. When acting as principal, TD Ameritrade will add a markup to any purchase, and subtract a markdown from every sale. This markup or markdown will be included in the price quoted to you. Mutual Funds Fund Type Price No Load $25 Load No Fee* NTF No Fee No-Transaction-Fee (NTF) mutual funds are no-load mutual funds for which TD Ameritrade does not charge a transaction fee. NTFs, as well as other funds, have other continuing fees and expenses described in the fund s prospectus. TD Ameritrade receives remuneration from fund companies participating in its no-load, no-transaction-fee program for recordkeeping and shareholder services and other administrative services. The amount of remuneration for these services is based in part on the amount of investments in such funds by TD Ameritrade clients. Almost all funds held 90 days or less will be subject to a short term redemption fee of $ This fee is in addition to any applicable transaction fees or fees described in the fund s prospectus. *The fund family will charge fees as detailed in the applicable fund s prospectus. 5

6 TD Ameritrade Commissions and Service Fees Fee Schedule 1 : TD Ameritrade offers low commissions, but some services require additional charges. Reorganization Fees Deposit 2 $25 Mandatory 3 $20 Non-mandatory and tender offers 4 $30 Withdrawal from tender offer 5 $10 Duplicate Statements and Confirmations Research Fee 6 Alternative Investments Fees 7 $5 per copy (no charge for electronic documents) $60 per hour $100 per transaction, Custody Holding Fee: $250 per year per asset Fees charged may vary by program, location or arrangements. Fees are subject to change upon 30 days notice to you. All prices shown are in U.S. dollars. 1. All service fees subject to change. TD Ameritrade reserves the right to pass-through regulatory fees, foreign transaction taxes, and other fees to client accounts, which may be assessed under various U.S. regulations or imposed by foreign governments. Fees may include any of the following: a sales fee on certain sell transactions (assessed at a rate consistent with Section 31 of the Securities and Exchange Act of 1934), the options regulatory fee (applicable to options transactions), and foreign transaction taxes and fees, among other charges. For a current fee rate, visit or contact a Client Services representative at (866) Applies when a security has gone through a mandatory reorganization before the certificate is deposited into an account. 3. Applies when a security has gone through a mandatory reorganization for all shares held in an account, including those pending trade settlements, on the effective date of the reorganization. 4. Applies when a client chooses to participate in a non-mandatory reorganization offer. 5. Applies when a client chooses to withdraw from a non-mandatory reorganization offer. 6. Research is conducted subsequent to specific and usually disputed account activities. 7. TD Ameritrade, may, at its discretion, allow Alternative Investments to be received into the account, subject to applicable fees, Such assets will be held for liquidation purposes only. Investments made through the Self-Directed Brokerage Account are not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency and may lose value. TD Ameritrade, Inc. and ABA Retirement Funds are separate and unaffiliated companies and are not responsible for each other s services or policies. Brokerage services provided by TD Ameritrade, Inc., member FINRA/SIPC. TD Ameritrade is a trademark jointly owned by TD Ameritrade IP Company and Toronto Dominion Bank. 6