Important Notice Concerning Your Transition to the Frontier Communications 401(k) Savings Plan

Transcription

1 Important Notice Concerning Your Transition to the Frontier Communications 401(k) Savings Plan This notice is to inform you that you will become a participant in the Frontier Communications 401(k) Savings Plan and that your account(s) under the AT&T Savings and Security Plan and/or the AT&T Retirement Savings Plan will transfer to the Frontier Communications 401(k) Savings Plan September 30, 2014 Dear Future Frontier Employee: Frontier Communications ( Frontier ) is pleased to announce that you will become a participant under the Frontier Communications 401(k) Savings Plan (the Savings Plan ) following the closing date of Frontier s acquisition of AT&T's wireline residential and business services in Connecticut (the Closing Date ), provided you remain actively employed (or on an authorized leave of absence other than short-term disability or a disability leave of absence) through the Closing Date. Your transition to the Savings Plan will happen without any action by you. If you are already contributing to the AT&T Savings and Security Plan (the ASSP ) and/or the AT&T Retirement Savings Plan (the ARSP ), your current contributions will automatically continue to your new Savings Plan account for paychecks after the Closing Date. To the extent your first paycheck after the Closing Date includes contributions that relate to your pay on or before the Closing Date, these contributions will be contributed to the ASSP or ARSP on your behalf and will transfer to the Savings Plan at the Account Transfer Date (as defined in the next paragraph). Your account(s) under the ASSP and/or the ARSP will transfer to the Savings Plan following the close of the New York Stock Exchange (generally 4:00 p.m. Eastern time) on the second Friday after the Closing Date (the Account Transfer Date ), unless you are on short-term disability or a disability leave of absence on the Closing Date. For example, if the Closing Date is October 24, 2014, the Account Transfer Date would be November 7, Fidelity Investments will continue to provide recordkeeping, and, following the Account Transfer Date, trustee services with respect to your ASSP and ARSP plan account(s) under the Savings Plan. This notice provides you with the following important information that will help you prepare for the transition: How your investment elections will transfer Answers to frequently asked questions Descriptions of the investment options offered by the Savings Plan If you do not remain actively employed with AT&T (and you are not on an approved leave of absence other than short-term disability or a disability leave of absence) through the Closing Date, this notice does not apply to you. If you will be on short-term disability or a disability leave of absence on the Closing Date, you will be provided information regarding your transition to the Savings Plan following your return to active work after the Closing Date.

2 If you are not currently participating in the ASSP or ARSP, and are eligible to participate in the Savings Plan, you can enroll on or after the Closing Date by logging on to Fidelity NetBenefits at or by calling the Fidelity Retirement Benefits Line at If you have any questions regarding your transition to the Savings Plan please call the Fidelity Retirement Benefits Line at and speak with a Fidelity Service Center Representative. Fidelity Representatives are available weekdays (excluding New York Stock Exchange holidays) from 8:30 a.m. to midnight, Eastern time. HOW YOUR INVESTMENT ELECTIONS WILL TRANSFER Your future contributions and your account balance(s) under the ASSP or ARSP will continue to be invested as you have designated through the close of the New York Stock Exchange on the Account Transfer Date and will transfer to the Savings Plan as follows: Your investment elections for future contributions under the various funds offered under the ASSP and/or ARSP, are scheduled to transfer to the Savings Plan s investment options on the Account Transfer Date. Your account balance(s), as invested under the various funds offered under the ASSP and/or ARSP, are scheduled to transfer to the Savings Plan s investment options on the Account Transfer Date. The following table shows how your investment elections for future contributions and your account balance(s) under the ASSP or ARSP will transfer to the Savings Plan. For further information comparing these investment options, please see the enclosed Investment Options Table applicable to the ASSP or ASRP. ASSP s Investment Options AT&T Shares Fund Savings Plan s Investment Options The Plan Designated Default Fund (see enclosed Default Fund Notification) for future contributions after the Closing Date AT&T Shares Fund 3 for ASSP and/or ARSP account(s) after the Account Transfer Date Bond Fund Spartan U.S. Bond Index Fund - Institutional Class Global Equity Fund 75% - Vanguard Institutional Index Fund Institutional Shares 25% - Spartan International Index Fund - Institutional Class 4 Interest Income Fund Managed Income Portfolio II - Class 4 International Stock Fund Spartan International Index Fund - Institutional Class 4 Large Cap Stock Fund Vanguard Institutional Index Fund Institutional Shares Mid and Small Cap Stock Fund Vanguard Mid-Cap Index Fund Institutional Shares ASRP s Investment Options Savings Plan s Investment Options AT&T Age-Based Asset Allocation Fund 2005 Fidelity Freedom K 2005 Fund AT&T Age-Based Asset Allocation Fund 2010 Fidelity Freedom K 2010 Fund AT&T Age-Based Asset Allocation Fund 2015 Fidelity Freedom K 2015 Fund AT&T Age-Based Asset Allocation Fund 2020 Fidelity Freedom K 2020 Fund AT&T Age-Based Asset Allocation Fund 2025 Fidelity Freedom K 2025 Fund 2

3 AT&T Age-Based Asset Allocation Fund 2030 Fidelity Freedom K 2030 Fund AT&T Age-Based Asset Allocation Fund 2035 Fidelity Freedom K 2035 Fund AT&T Age-Based Asset Allocation Fund 2040 Fidelity Freedom K 2040 Fund AT&T Age-Based Asset Allocation Fund 2045 Fidelity Freedom K 2045 Fund AT&T Age-Based Asset Allocation Fund 2050 Fidelity Freedom K 2050 Fund AT&T Age-Based Asset Allocation Fund 2055 Fidelity Freedom K 2055 Fund AT&T Age-Based Asset Allocation Retirement Fund Fidelity Freedom K Income Fund AT&T International Stock Fund 1 American Funds EuroPacific Growth Fund Class R-4 The Plan Designated Default Fund (see enclosed Default Fund Notification) for future contributions after the Closing Date AT&T Shares Fund 3 for ASSP and/or ARSP account(s) AT&T Shares Fund after the Account Transfer Date AT&T Stable Value Fund Managed Income Portfolio II - Class 4 AT&T Total Return Bond Fund PIMCO Total Return Fund Institutional Class AT&T U.S. Stock Fund Vanguard Institutional Index Fund Institutional Shares International Stock Index Fund 2 Spartan International Index Fund - Institutional Class 4 Large Cap U.S. Stock Index Fund Vanguard Institutional Index Fund Institutional Shares Small and Mid-Sized U.S. Stock Index Fund Vanguard Mid-Cap Index Fund Institutional Shares Total U.S. Stock Market Index Fund Vanguard Institutional Index Fund Institutional Shares 1 If you sell any of your shares of the AT&T International Stock Fund after holding them for less than 30 days, the fund will deduct a shortterm trading fee from your account equal to 1.5% of the value of the shares sold. However, this fee will not be charged when the fund s assets are transferred to the Savings Plan. 2 If you sell any of your shares of the International Stock Index Fund after holding them for less than 30 days, the fund will deduct a shortterm trading fee from your account equal to 1.5% of the value of the shares sold. However, this fee will not be charged when the fund s assets are transferred to the Savings Plan. 3 After the Exchange s close on the Closing Date, the AT&T Shares Fund will be frozen to new contributions, and after the Exchange s close on the Account Transfer Date, incoming exchanges. Only withdrawals from this Fund, such as outgoing exchanges, will be permitted under the Savings Plan. 4 If you sell any of your shares of the Spartan International Index Fund - Institutional Class after holding them for less than 90 days, the fund will deduct a short-term trading fee from your account equal to 1.0% of the value of the shares sold. You can change your investment elections for future contributions prior to the Account Transfer Date or initiate exchanges between investment funds prior to the Account Transfer Date so that your future contribution(s) to your account and your ASSP and/or ARSP plan account balance(s), are invested in the Savings Plan s investment funds in accordance with your preference. To request investment changes in your ASSP or ARSP plan account(s), log on to Fidelity NetBenefits at or call the Fidelity Service Center at You must do so no later than the Account Transfer Date with respect to your future contributions or 4:00 p.m. Eastern time on the Account Transfer Date to initiate exchanges between investment funds under the ASSP and/or ARSP. After the Account Transfer Date, to request investment changes to your future contributions or account under the Savings Plan and, on or after the Account Transfer Date, to access your account(s) under the ASSP and/or ARSP, log on to NetBenefits at or call the Fidelity Retirement Benefits Line at and speak with a Fidelity Service Center Representative. The AT&T Shares Fund The AT&T Shares Fund will be frozen to new contributions after the Closing Date and to incoming exchanges for your account(s) under the ASSP and/or ARSP after the New York Stock Exchange s close on the Account Transfer Date. Following the Account Transfer Date, only withdrawals from this Fund, such as outgoing exchanges, will be permitted. After the Closing Date, any investment elections directing your future contributions to the AT&T Shares Fund will be directed to the Plan Designated Default Fund. (See enclosed Default Fund Notification.) Dividends payable to you with respect to the 3

4 AT&T Shares Fund after the Account Transfer Date will be invested according to your investment elections for your future contributions. Also the AT&T Shares Fund will convert from a unitized stock fund under the ASSP and ARSP to a real-time traded stock fund under the Savings Plan. Trading stock in a real-time environment means that trades are immediately sent to the market for execution. As a unitized fund, the AT&T Shares Fund under the ASSP and ARSP holds shares of AT&T stock ( AT&T Shares ) and an amount of short-term investments designed to allow participants to buy and sell without the usual trade settlement period for individual stock transactions. Upon the Account Transfer Date, your investments in the AT&T Shares Fund under the ASSP and/or ARSP will be converted to a whole number of AT&T Shares under the Savings Plan, with the amount of any cash or fractional shares invested in the Plan Designated Default Fund. Example: Assume your investments in the AT&T Shares Fund under the ASSP and/or ARSP are valued at $720 and the market price of AT&T Shares is $35 on the Account Transfer Date. Assume further that the total value of the AT&T Shares Fund is $75,000,000 (including AT&T Shares and cash reserves) and that it holds 2,000,000 AT&T Shares at this time. Your portion of the AT&T Shares held in the AT&T Shares Fund is 19.2 (2,000,000 AT&T Shares times 720/75,000,000). Accordingly, your investment in the AT&T Shares Fund under the ASSP and/or ARSP will be converted to 19 AT&T Shares under the Savings Plan s AT&T Shares Fund valued at $665 (19 AT&T Shares times $35 AT&T Shares market price). The remaining $55 difference between your original market value of $720 in the AT&T Shares Fund under the ASSP and/or ARSP and your $665 investment in the AT&T Shares Fund under the Savings Plan will be invested in the Plan Designated Default Fund. For more information, please see the enclosed notice entitled Understanding Real-Time Trading in Your Company Stock. Fidelity BrokerageLink Like the ARSP, the Savings Plan offers participants Fidelity BrokerageLink. BrokerageLink combines the convenience of your workplace savings plan with the additional flexibility of a brokerage account. As currently offered by the ARSP, the Savings Plan s BrokerageLink offers its participants expanded investment choices by providing the opportunity to invest in thousands of Fidelity and non-fidelity mutual funds available through Fidelity FundsNetwork and exchange traded funds ( ETFs ). However, unlike the ARSP, the Savings Plan does not permit its participants to buy and sell individual securities through BrokerageLink. Please note that your current investments in BrokerageLink, including any holdings in individual securities, will be maintained in the Savings Plan after the Account Transfer Date. However, you will not be permitted to purchase any additional individual securities after this date. ANSWERS TO FREQUENTLY ASKED QUESTIONS Q: Will my current contributions to the ASSP or ARSP continue to the Savings Plan after the plans merger? A. Yes. If you are already participating in the ASSP or ARSP, your current contributions will continue following the transition to the Savings Plan. If you are not currently participating in the Savings Plan, and are eligible to participate in the Savings Plan, you can enroll on or after the Closing Date by logging on to Fidelity NetBenefits at or by calling the Fidelity Retirement Benefits Line at

5 Note, unlike the ASSP or ARSP, the Savings Plan does not automatically enroll participants. If you receive a communication that states you will be enrolled or after the Closing Date, this automatic enrollment will not occur. You will need to enroll in the Savings Plan by logging on to Fidelity NetBenefits at or by calling the Fidelity Retirement Benefits Line at Q: How do I start using Fidelity NetBenefits? A: If you have never used Fidelity NetBenefits or fidelity.com, or have not established a password through a previous employer s 401(k) plan at Fidelity, you must set one up. Setting up your password is simple. Log on to Fidelity NetBenefits at and follow the prompts to create your password or by calling the Fidelity Retirement Benefits Line at Q: Do I need to establish a beneficiary for my new account in the Savings Plan? A: No. Any beneficiary designation you have made under the ASSP or ARSP will be transferred to the Savings Plan. After the Closing Date, to designate or update your Savings Plan s beneficiary election, access your account online through Fidelity NetBenefits at Once on the home page, click the YOUR PROFILE link on the top of the page and then select Beneficiaries in the About You section. If you do not have Internet access, call the Fidelity Retirement Benefits Line at to request a form. Q: If I am an active employee, can I choose to take a distribution/rollover instead of having my ASSP or ARSP account merge into the Savings Plan? A: No. If you are an active employee, your ASSP or ARSP Plan account(s) will automatically be transferred to the Savings Plan. Q: Will my participant loans transfer to the Savings Plan? A: Yes. Outstanding participant loans under the ASSP and/or ARSP will transfer to the Savings Plan without any changes to the loan terms on the Account Transfer Date. Your loan withholdings will continue to be withheld from your pay check following the Closing Date and will be deposited in the Savings Plan, where they will be credited as interest and principal against your outstanding loan balance. The Savings Plan does not allow for more than two outstanding loans at a time. If you have three outstanding loans under the ARSP as of the Account Transfer Date, these loans will continue under the Savings Plan. However, you will not be able to take out a loan under the Savings Plan if you already have two loans outstanding. You will not be permitted to take out a loan under the Savings Plan with respect to your account balance(s) transferring from the ASSP and/or ARSP until after the Account Transfer Date. Q. Will former participants of the ASSP or ARSP be able to continue to use Fidelity s spillover election feature after they transition to the Savings Plan? A. Yes. Participants of the ASSP or ARSP will be able to continue to use Fidelity s spillover election feature. However, your current spillover election will not be automatically established under the Savings Plan after the Closing Date. If you would like to use Fidelity s spillover election feature after the Closing Date you must establish your election by logging on to NetBenefits at or by calling the Fidelity Retirement Benefits Line at Q: When will I receive my final statement for my ASSP or ARSP Plan account? A: Your final ASSP or ARSP quarterly account statement, for the period October 1, 2014 to December 31, 2014, will be made available to you by Fidelity in mid January This statement will reflect your account balance that was merged into the Savings Plan and an ending account balance of zero. Keep in mind, after the Closing Date, you can access your Savings Plan account online or contact a Fidelity phone representative by logging on to NetBenefits at or by calling the Fidelity Retirement Benefits Line at

6 Q: Can I open a brokerage account in the Savings Plan? A: Yes. Fidelity BrokerageLink combines the convenience of your workplace savings plan with the additional flexibility of a brokerage account. It gives you expanded investment choices by providing the opportunity to invest in thousands of Fidelity mutual funds and non-fidelity mutual funds available through Fidelity FundsNetwork and ETFs. There is an initial minimum of $2,500 to open a BrokerageLink account and a $1,000 minimum for each subsequent transfer to BrokerageLink from a standard plan investment option. There is no minimum amount for direct payroll contributions to BrokerageLink. You can also direct up to 50% of your future contributions to BrokerageLink and can transfer up to 50% of your account balance to a BrokerageLink account. BrokerageLink assets cannot be invested in the same 31 standard investment options available through the Savings Fund or in individual equity or debt securities other than Fidelity and non-fidelity mutual funds available through Fidelity FundsNetwork and ETFs. For example, BrokerageLink assets cannot be invested in tax-exempt securities, employer securities, physical certificates, precious metal, limited partnerships, futures contracts, commodities, interest rate options, currencies and currency options, CAPS, options levels 3, 4 and 5, or in any other issue/security that may result in a prohibited transaction under the Savings Plan. A self-directed brokerage account is not for everyone. If you are an investor who is willing to take on the potential for more risk, and you are prepared to assume the responsibility of more closely monitoring this portion of your portfolio, BrokerageLink could be appropriate for you. However, if you do not feel comfortable actively managing a portfolio beyond those offered through your plan's standard investment options, then a self-directed brokerage account may not be appropriate for you. Additional fees may apply to a brokerage account. For a complete list of fees, please refer to the enclosed Fidelity BrokerageLink Commission Schedule. To obtain additional information about BrokerageLink, or to open an account, log on to Fidelity NetBenefits at or call the Fidelity Retirement Benefits Line at Remember, it is always your responsibility to ensure that the options you select are consistent with your particular situation, including your goals, time horizon and risk tolerance. Q. Does the Savings Plan offer a managed account service? Y. Fidelity Portfolio Advisory Service at Work is a managed account service from Fidelity that is offered to participants of the Savings Plan. This service provides active, professional investment management to your Savings Plan s account. That means Fidelity s team of investment professionals first gets to know you and your personal situation. Then they invest, monitor and rebalance your portfolio to reflect changes in the market or your life. For an advisory fee of no more than 1% of your managed portfolio*, you receive the reassurance of professional management. If you are interested in Fidelity Portfolio Advisory Service at Work, call a dedicated Fidelity Guidance Professional at Q: Who can I contact for more information? A: If you have any questions regarding your transition to the Savings Plan please call the Fidelity Retirement Benefits Line at and speak with a Fidelity Service Center Representative. Fidelity Representatives are available weekdays (excluding New York Stock Exchange holidays) from 8:30 a.m. to midnight, Eastern time. DESCRIPTIONS OF THE INVESTMENT OPTIONS OFFERRED BY THE SAVINGS PLAN The following are descriptions of the investment options offered by the Savings Plan. For additional information about the investment options available under the Savings Plan, as well as 6

7 tools and calculators to help you determine an investment strategy that may be right for you, log on to NetBenefits at You may also call the Fidelity Retirement Benefits Line at To help you evaluate the Savings Plan s investment options, included with this notice is a Disclosure Comparative Chart. This document provides the investment options historical rates of return, fees and expenses, and any restrictions. Also enclosed is a Default Fund Notification. It details the Savings Plan s designated default option, namely the Fidelity Freedom K Funds. As described, any contributions for which you do not provide investment direction will be invested in the designated default option. AT&T Shares Fund Fund Code: Ticker: N/A Objective: Seeks to increase the value of your investment over the long term by investing in the stock of AT&T or its affiliate. Strategy: Invests in the stock of AT&T. Performance is directly tied to the performance of the company, as well as to that of the stock market as a whole. When you exchange out of this stock, your transaction is generally processed on a real-time basis. Other sale requests such as distributions or other transactions, are aggregated and stock orders are typically sent to market on the following business day. These transactions, which may take multiple days to complete in some circumstances, are based on the volume-weighted average trade price. Industry-standard settlement periods apply to sales of stock. Commissions and other transaction fees will apply to transactions involving this investment. Risk: If you invest a significant portion of your retirement savings in any one company or industry, your savings may not be properly diversified. Although diversification is not a guarantee against loss, it can be an effective strategy to help you manage investment risk. This is neither a mutual fund nor a diversified or managed investment option. Investing in a non-diversified, unmanaged single stock inherently involves more investment risk than investing in a diversified fund. As with any stock, the value of your investment may go up or down depending on how the company's stock performs in the market. Share price and return will vary. Someone who wants to own part of the company they may work for and share in the gains or losses of its stock. Someone whose investment portfolio can withstand the higher risk of investment in a single stock. This investment option is a real-time traded company stock fund. This description is only intended to provide a brief overview of the fund. To help achieve long-term retirement security, you should give careful consideration to the benefits of a well-balanced and diversified investment portfolio. Spreading your assets among different types of investments can help you achieve a favorable rate of return, while minimizing your overall risk of losing money. This is because market or other economic conditions that cause one category of assets, or one particular security, to perform very well often cause another asset category, or other particular security to perform poorly. If you invest more than 20% of your retirement savings in any one company or industry, your savings may not be properly diversified. Although diversification is not a guarantee against loss, it is an effective strategy to help manage your investment risk. You have the right to direct Fidelity Management Trust Company ("The Trustee") concerning shareholder rights, such as the right to vote or tender, for all shares of AT&T Shares credited to your account. The Trustee will hold your decision with respect to the exercise of shareholder rights in confidence, except to the extent required by law. In addition, Frontier Communications will not review information concerning any individual participant's purchase, holding or sale of AT&T Shares Fund, unless required to fulfill its fiduciary obligations, or by applicable law. The plan fiduciary responsible for monitoring compliance with the confidentiality procedures is: Frontier Communications, 3 High Ridge Park, Stamford, CT 06905, Telephone: This investment option is not a mutual fund. After the Exchange s close on the Closing Date, the AT&T Shares Fund will be frozen to new contributions, and after the Exchange s close on the Account Transfer Date, incoming exchanges. Only withdrawals from this Fund, such as outgoing exchanges, will be permitted under the Savings Plan. American Funds EuroPacific Growth Fund Class R-4 Fund Code: Ticker: REREX Objective: The investment seeks long-term growth of capital. Strategy: The fund invests primarily in common stocks of issuers in Europe and the Pacific Basin that the investment adviser believes have the potential for growth. Growth stocks are stocks that the investment adviser believes have the potential for above-average capital appreciation. It normally invests at least 80% of net assets in securities of issuers in Europe and the Pacific Basin. The fund may invest a portion of its assets in common stocks and other securities of companies in countries with developing economies and/or markets. 7

8 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. 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 Europacific Growth Fund, and managed by Capital Research and Management Company. This description is only intended to Columbia Acorn Fund Class Z Fund Code: Ticker: ACRNX Objective: The investment seeks long-term capital appreciation. Strategy: Under normal circumstances, the fund invests a majority of its net assets in the common stock of small- and mid-sized companies with market capitalizations under $5 billion at the time of initial investment. It invests the majority of its assets in U.S. companies, but also may invest up to 33% of its total assets in foreign companies in developed markets (for example, Japan, Canada and the United Kingdom) and in emerging markets (for example, China, India and Brazil). 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. 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 growthoriented stocks and with smaller companies. A mutual fund registered under Columbia Acorn Trust, and managed by Columbia Wanger Asset Management LLC. This description is only intended to Fidelity BrokerageLink Fund Code: Ticker: N/A Objective: To provide a broad range of mutual funds that allow you expanded choices in managing your retirement savings more actively. Strategy: BrokerageLink is a brokerage account within your retirement plan. You alone decide how to invest the assets in your Fidelity BrokerageLink account. You can invest in a vast array of mutual funds from either Fidelity, or from Fidelity and other mutual fund companies through BrokerageLink. Brokerage services are provided through Fidelity Brokerage Services LLC, a member of the New York Stock Exchange and Securities Investor Protection Corporation. Risk: A self-directed brokerage account is not for everyone. If you are an investor who is willing to take on the potential for more risk and you are prepared to assume the responsibility of more closely monitoring this portion of your portfolio, it could be appropriate for you. However, if you do not feel comfortable actively managing a portfolio beyond those offered through your plan's standard investment options, then a self-directed brokerage account may not be appropriate for you. Additional fees apply to a brokerage account, please refer to the fact sheet and commission schedule for a complete listing of brokerage fees. Remember, it is always your responsibility to ensure that the options you select are consistent with your particular situation including your goals, time horizon, and risk tolerance. This account is neither a mutual fund nor is it managed by any of the Fidelity Investments group of companies. Someone who is comfortable with evaluating and researching a broad universe of mutual funds, and who wants to invest part of his or her retirement savings in mutual funds through a brokerage account. 8

9 Someone who wants the highest degree of variety in selecting mutual funds investments for his or her retirement savings, and who is familiar with how a brokerage account operates. Fidelity Freedom K Income Fund Fund Code: Ticker: FFKAX Objective: Seeks high current income and, as a secondary objective, capital appreciation. bond funds, and short-term funds. Allocating assets among underlying Fidelity funds according to a stable target asset allocation of approximately 17% in domestic equity funds, 7% in international equity funds, 46% in bond funds, and 30% in short-term funds. Risk: The fund is subject to the volatility of the financial markets, including that of equity and fixed income investments. Fixed income investments entail 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 longerterm securities. Principal invested is not guaranteed at any time, including at or after retirement. 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. Fidelity Freedom K 2005 Fund Fund Code: Ticker: FFKVX Objective: Seeks high total return until its target retirement date. Thereafter, the fund's objective will be to seek high current income and, as a secondary objective, capital appreciation. bond funds, and short-term funds. Allocating assets among underlying Fidelity funds according to an asset allocation strategy that becomes increasingly conservative until it reaches approximately 17% in domestic equity funds, 7% in international equity funds, 46% in bond funds, and 30% in short-term funds (approximately 10 to 19 years after the target year). Ultimately, the fund will merge with Fidelity Freedom K Income Fund. Strategic Advisers may continue to seek high total return for several years beyond the fund's target retirement date in an effort to achieve the fund's overall investment objective. Risk: The investment risk of each Fidelity Freedom K 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, smallcap, commodity-linked, and foreign securities. Principal invested is not guaranteed at any time, including at or after the funds' target dates. 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. Fidelity Freedom K 2010 Fund Fund Code: Ticker: FFKCX Objective: Seeks high total return until its target retirement date. Thereafter, the fund's objective will be to seek high current income and, as a secondary objective, capital appreciation. bond funds, and short-term funds. Allocating assets among underlying Fidelity funds according to an asset allocation strategy that becomes increasingly conservative until it reaches approximately 17% in domestic equity funds, 7% in international equity funds, 46% in bond funds, and 30% in short-term funds (approximately 10 to 19 9

10 years after the target year). Ultimately, the fund will merge with Fidelity Freedom K Income Fund. Strategic Advisers may continue to seek high total return for several years beyond the fund's target retirement date in an effort to achieve the fund's overall investment objective. Risk: The investment risk of each Fidelity Freedom K 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, smallcap, commodity-linked, and foreign securities. Principal invested is not guaranteed at any time, including at or after the funds' target dates. 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. Fidelity Freedom K 2015 Fund Fund Code: Ticker: FKVFX Objective: Seeks high total return until its target retirement date. Thereafter, the fund's objective will be to seek high current income and, as a secondary objective, capital appreciation. bond funds, and short-term funds. Allocating assets among underlying Fidelity funds according to an asset allocation strategy that becomes increasingly conservative until it reaches approximately 17% in domestic equity funds, 7% in international equity funds, 46% in bond funds, and 30% in short-term funds (approximately 10 to 19 years after the target year). Ultimately, the fund will merge with Fidelity Freedom K Income Fund. Strategic Advisers may continue to seek high total return for several years beyond the fund's target retirement date in an effort to achieve the fund's overall investment objective. Risk: The investment risk of each Fidelity Freedom K 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, smallcap, commodity-linked, and foreign securities. Principal invested is not guaranteed at any time, including at or after the funds' target dates. 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. Fidelity Freedom K 2020 Fund Fund Code: Ticker: FFKDX Objective: Seeks high total return until its target retirement date. Thereafter, the fund's objective will be to seek high current income and, as a secondary objective, capital appreciation. bond funds, and short-term funds. Allocating assets among underlying Fidelity funds according to an asset allocation strategy that becomes increasingly conservative until it reaches approximately 17% in domestic equity funds, 7% in international equity funds, 46% in bond funds, and 30% in short-term funds (approximately 10 to 19 years after the target year). Ultimately, the fund will merge with Fidelity Freedom K Income Fund. Strategic Advisers may continue to seek high total return for several years beyond the fund's target retirement date in an effort to achieve the fund's overall investment objective. Risk: The investment risk of each Fidelity Freedom K 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, smallcap, commodity-linked, and foreign securities. Principal invested is not guaranteed at any time, including at or after the funds' target dates. 10

11 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. Fidelity Freedom K 2025 Fund Fund Code: Ticker: FKTWX Objective: Seeks high total return until its target retirement date. Thereafter, the fund's objective will be to seek high current income and, as a secondary objective, capital appreciation. bond funds, and short-term funds. Allocating assets among underlying Fidelity funds according to an asset allocation strategy that becomes increasingly conservative until it reaches approximately 17% in domestic equity funds, 7% in international equity funds, 46% in bond funds, and 30% in short-term funds (approximately 10 to 19 years after the target year). Ultimately, the fund will merge with Fidelity Freedom K Income Fund. Strategic Advisers may continue to seek high total return for several years beyond the fund's target retirement date in an effort to achieve the fund's overall investment objective. Risk: The investment risk of each Fidelity Freedom K 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, smallcap, commodity-linked, and foreign securities. Principal invested is not guaranteed at any time, including at or after the funds' target dates. 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. Fidelity Freedom K 2030 Fund Fund Code: Ticker: FFKEX Objective: Seeks high total return until its target retirement date. Thereafter, the fund's objective will be to seek high current income and, as a secondary objective, capital appreciation. bond funds, and short-term funds. Allocating assets among underlying Fidelity funds according to an asset allocation strategy that becomes increasingly conservative until it reaches approximately 17% in domestic equity funds, 7% in international equity funds, 46% in bond funds, and 30% in short-term funds (approximately 10 to 19 years after the target year). Ultimately, the fund will merge with Fidelity Freedom K Income Fund. Strategic Advisers may continue to seek high total return for several years beyond the fund's target retirement date in an effort to achieve the fund's overall investment objective. Risk: The investment risk of each Fidelity Freedom K 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, smallcap, commodity-linked, and foreign securities. Principal invested is not guaranteed at any time, including at or after the funds' target dates. 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. 11

12 Fidelity Freedom K 2035 Fund Fund Code: Ticker: FKTHX Objective: Seeks high total return until its target retirement date. Thereafter, the fund's objective will be to seek high current income and, as a secondary objective, capital appreciation. bond funds, and short-term funds. Allocating assets among underlying Fidelity funds according to an asset allocation strategy that becomes increasingly conservative until it reaches approximately 17% in domestic equity funds, 7% in international equity funds, 46% in bond funds, and 30% in short-term funds (approximately 10 to 19 years after the target year). Ultimately, the fund will merge with Fidelity Freedom K Income Fund. Strategic Advisers may continue to seek high total return for several years beyond the fund's target retirement date in an effort to achieve the fund's overall investment objective. Risk: The investment risk of each Fidelity Freedom K 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, smallcap, commodity-linked, and foreign securities. Principal invested is not guaranteed at any time, including at or after the funds' target dates. 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. Fidelity Freedom K 2040 Fund Fund Code: Ticker: FFKFX Objective: Seeks high total return until its target retirement date. Thereafter, the fund's objective will be to seek high current income and, as a secondary objective, capital appreciation. bond funds, and short-term funds. Allocating assets among underlying Fidelity funds according to an asset allocation strategy that becomes increasingly conservative until it reaches approximately 17% in domestic equity funds, 7% in international equity funds, 46% in bond funds, and 30% in short-term funds (approximately 10 to 19 years after the target year). Ultimately, the fund will merge with Fidelity Freedom K Income Fund. Strategic Advisers may continue to seek high total return for several years beyond the fund's target retirement date in an effort to achieve the fund's overall investment objective. Risk: The investment risk of each Fidelity Freedom K 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, smallcap, commodity-linked, and foreign securities. Principal invested is not guaranteed at any time, including at or after the funds' target dates. 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. Fidelity Freedom K 2045 Fund Fund Code: Ticker: FFKGX Objective: Seeks high total return until its target retirement date. Thereafter, the fund's objective will be to seek high current income and, as a secondary objective, capital appreciation. bond funds, and short-term funds. Allocating assets among underlying Fidelity funds according to an asset 12

13 allocation strategy that becomes increasingly conservative until it reaches approximately 17% in domestic equity funds, 7% in international equity funds, 46% in bond funds, and 30% in short-term funds (approximately 10 to 19 years after the target year). Ultimately, the fund will merge with Fidelity Freedom K Income Fund. Strategic Advisers may continue to seek high total return for several years beyond the fund's target retirement date in an effort to achieve the fund's overall investment objective. Risk: The investment risk of each Fidelity Freedom K 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, smallcap, commodity-linked, and foreign securities. Principal invested is not guaranteed at any time, including at or after the funds' target dates. 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. Fidelity Freedom K 2050 Fund Fund Code: Ticker: FFKHX Objective: Seeks high total return until its target retirement date. Thereafter, the fund's objective will be to seek high current income and, as a secondary objective, capital appreciation. bond funds, and short-term funds. Allocating assets among underlying Fidelity funds according to an asset allocation strategy that becomes increasingly conservative until it reaches approximately 17% in domestic equity funds, 7% in international equity funds, 46% in bond funds, and 30% in short-term funds (approximately 10 to 19 years after the target year). Ultimately, the fund will merge with Fidelity Freedom Income Fund. Strategic Advisers may continue to seek high total return for several years beyond the fund's target retirement date in an effort to achieve the fund's overall investment objective. Risk: The investment risk of each Fidelity Freedom K 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, smallcap, commodity-linked, and foreign securities. Principal invested is not guaranteed at any time, including at or after the funds' target dates. 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. Fidelity Freedom K 2055 Fund Fund Code: Ticker: FDENX Objective: Seeks high total return until its target retirement date. Thereafter the fund's objective will be to seek high current income and, as a secondary objective, capital appreciation. bond funds, and short-term funds. Allocating assets among underlying Fidelity funds according to an asset allocation strategy that becomes increasingly conservative until it reaches approximately 17% in domestic equity funds, 7% in international equity funds, 46% in bond funds, and 30% in short-term funds (approximately 10 to 19 years after the target year). Ultimately, the fund will merge with Fidelity Freedom Income Fund. Strategic Advisers may continue to seek high total return for several years beyond the fund's target retirement date in an effort to achieve the fund's overall investment objective. Risk: The investment risks of each Fidelity Freedom K 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- 13