Answering your questions about OnTarget SM

Transcription

1 Answering your questions about OnTarget SM Table of Contents How OnTarget works... 1 Making changes... 5 Cost of services... 6 Personalized, professional account management Your plan offers OnTarget, a professional account management service offered through John Hancock Retirement Plan Services and Morningstar Associates, LLC (an independent registered third-party investment advisor). This service, powered by Morningstar, gives you the opportunity to have your retirement savings account professionally managed. Participation in the OnTarget program does not guarantee a profit or protect against a loss. Morningstar Associates, LLC, a registered investment advisor and wholly owned subsidiary of Morningstar, Inc., serves as the independent financial expert for OnTarget and is not affiliated with John Hancock Retirement Plan Services. Securities distributed by NYLIFE Distributors LLC, 169 Lackawanna Avenue, Parsippany, NJ

2 How OnTarget works Q What information is used to develop my asset allocation strategy? A OnTarget develops a personalized strategy based upon your: Age Years to retirement Current balance Current savings and investment strategy Estimated Social Security benefits Target retirement income estimate Salary Outside assets You can even include additional retirement assets (held by you or your spouse) to help OnTarget provide you with a more personalized strategy. Q I have questions... is there someone I can call? A Yes. A John Hancock representative can help you personalize your OnTarget experience. Our representatives are available to work with you one-on-one to provide: Concierge-level support in understanding your plan s retirement savings tools and features so you can maximize the resources available to you Help assessing options available to you for the development of a personal retirement savings strategy Assistance navigating Morningstar Retirement Manager SM, enrolling in OnTarget, and reviewing your plan s investment options Call today to get started! Contact a representative at Representatives are available from 9 a.m. to 8 p.m. Eastern time (ET) on New York Stock Exchange business days. Q Can I contact John Hancock if I decide not to enroll in OnTarget? A Yes. Representatives are available to discuss all of the resources available to help you develop a strategy for your retirement plan. If you choose to enroll in OnTarget, a representative can assist you with the enrollment process. Q How does OnTarget allocate and manage my savings? A OnTarget calculates your target income goal and develops an optimal investment mix among stocks, bonds, and cash. Using a sophisticated fund-selection process, OnTarget selects the appropriate plan investment options to create a personalized asset allocation. OnTarget periodically reviews and rebalances your investments, as necessary, to maintain the intended investment mix. OnTarget also annually reallocates investments to adjust your risk exposure, helping you meet your target income goal as you near your anticipated retirement date. Asset allocation and diversification does not ensure a profit or protect against a loss in a declining market. There is no guarantee that any investment strategy will achieve its objectives. 1

3 Q Must I take any action to allocate my savings based upon the recommendations of OnTarget? A No. As an OnTarget participant, your investment decisions are managed for you. OnTarget s team of professionals develops an investment strategy and allocates retirement savings based upon your Plan s investment options. John Hancock implements OnTarget s asset allocation recommendations. If you want to learn more about your Plan s investment options, go to mylife.jhrps.com or call Q Does OnTarget utilize market timing strategies? A No. OnTarget will not attempt to time the market. Studies have shown that it is nearly impossible to time the market successfully. Investors may be better served through active, professional management that emphasizes a buy-and-hold approach.* Q Can OnTarget consider all of my assets or just those related to my retirement savings? A In order to provide the most appropriate asset allocation recommendation, OnTarget considers all retirement savings, including assets held outside of your employer s retirement savings plan and those held by your spouse. However, OnTarget will not make investment decisions for any assets outside of your retirement savings plan. Any additional financial information that you choose to provide will help OnTarget create a more personalized savings and investment strategy. Q Will my existing investment allocations change? Are there any exceptions? A Yes. When you sign up for OnTarget, you give John Hancock the authority to make investment transactions on your behalf. This means your existing funds or securities may be sold. Please note that if you have a portion of your plan in a self-directed brokerage account (SDBA) and wish to have that money managed under OnTarget, you must first liquidate the amount you want to have managed under OnTarget out of your SDBA and transfer it to other non-sdba investment options within the Plan. OnTarget will not manage your SDBA investments. Q Is OnTarget the same as a target date fund? A No. Rather than investing in a single portfolio like a target date fund, based on your age OnTarget creates a personalized investment strategy based on your overall financial situation and goals. This investment strategy is used to determine your asset mix across different types of investments. OnTarget considers your existing savings balance, contribution rate, current salary, and years remaining until retirement. It also factors in gender, to account for varying life expectancies. * Forget Market Timing, and Stick to a Balanced Fund, by Carl Richards, The New York Times, January 27, Q How will transactions like loans, qualified domestic relations orders (QDROs)*, 2

4 and hardship withdrawals be processed? A All transactions, such as loans or hardship withdrawals, are processed the same regardless of whether you use OnTarget. In the event of a QDRO, any portion of your account assigned to your ex-spouse will not qualify for OnTarget. If you take a full payout from your account, you will no longer be enrolled in OnTarget. Q How often is my account reviewed and changed? A OnTarget is committed to continuously monitoring your portfolio. Return and risk performance is monitored daily Portfolio and manager style data is monitored monthly Portfolio changes are typically made quarterly or annually Your account is rebalanced annually according to your age OnTarget maintains a long-term investment perspective and strives to limit the frequency of reallocations. However, unusual market conditions or other circumstances may necessitate changes in a matter of days. We encourage you to notify John Hancock of any changes in your personal situation as soon as possible. Q How often does OnTarget increase contribution rates? A Each year, if your Plan allows, OnTarget will automatically increase your contribution rate. Typically, this increase is 1% annually, on the anniversary of your OnTarget enrollment date. Defaults are set by your employer and may be changed or cancelled at any time. Q What factors might prompt OnTarget to rebalance my account? A OnTarget may rebalance your account if it moves from its target asset allocation. Rebalancing generally occurs due to cash flow changes in your account, such as a withdrawal, loan, or market volatility. OnTarget also may reallocate the investments in your account as: Market or economic conditions change Your anticipated retirement date nears Changes in the plan s investment options occur Your personal financial situation changes Q What kind of allocation can I expect if I enroll in OnTarget? A OnTarget creates a personalized retirement strategy that reflects your financial goals, time horizon, tax situation, and future income needs in retirement. Q Am I required to put all of my plan assets into OnTarget? Does this include my self-directed brokerage account? A Yes. In general, all retirement assets held in your plan should be allocated to your OnTarget account. However, any plan assets held in a self-directed brokerage account, or shares of restricted company stock, will not be included in your OnTarget account. * A qualified domestic relations order (QDRO) is defined as division of pensions in divorce: the awarding by a court of a part of somebody s pension or other retirement benefit to a former spouse. Q If I enroll in OnTarget, will my contribution rate increase each year? 3

5 4 A Yes. If you are eligible, your contribution rate will automatically increase each year, until you reach the limit set by your Plan or the legal limit, whichever is less. For example, let s say you currently contribute 3%, your automatic increase each year is 2%, and your plan has a maximum limit of 15%, your contribution rate will be: Year 1 5% Year 2 7% Year 3 9% Year 4 11% Year 5 13% Year 6 and beyond 15% Q I m over 50 and eligible for catch-up contributions. I m also eligible for after-tax contributions. How does this work with OnTarget? A OnTarget will not assume future catch-up or after-tax contributions in its estimated projections. However, OnTarget will account for future Roth 401(k) contributions. If your Plan balance includes money from catch-up and/or after-tax contributions, those amounts will be reflected in your investment strategy. If your Plan permits catch-up and after-tax contributions, you may want to consider taking advantage of these additional savings opportunities. Q Are there any terms to enrollment in OnTarget? A Yes. Before enrolling in OnTarget, you will be required to review an investment advisory agreement and agree to its terms and conditions. The investment advisory agreement is a contract between you and New York Life Investment Management LLC. Q Tell me about John Hancock s privacy policy. A John Hancock takes your privacy seriously. We do not share personal information about our customers with third parties for use in marketing products or services. To view a current copy of the privacy policy, visit mylife. jhrps.com and click Privacy Policy. 4

6 Making changes Q Can I opt out of OnTarget at any time? If I enroll and then change my mind later, what happens to my investments? A Yes. At any time, you may choose to stop participating in OnTarget by visiting mylife.jhrps.com/ontarget (Log on and click the OnTarget logo; please follow the instructions.) Or, you can call If you opt out of OnTarget, you will be responsible for deciding how much to save for retirement. You can maintain the same investment strategy developed by OnTarget, but you will need to make future decisions about how to invest your savings. If you opt out, your account will no longer be automatically rebalanced or reallocated. While enrolled in OnTarget, short-term trading fees will not apply. However, if you opt out of OnTarget and change your investment allocation, fees may apply. Q Can I override the investment allocations made by OnTarget? A No. When you enroll in this professional account management service, you agree to allow OnTarget to manage your account. However, if at any time you decide to manage your own account, you may discontinue the OnTarget service. Q Will I be able to impose any restrictions on the management of my account or change any assumptions? A Yes. You may request certain investment restrictions. To change the assumptions used to manage your portfolio, visit mylife.jhrps.com/ontarget, or call PFS at However, in order to adequately diversify your account, OnTarget must allocate your assets across different types of investments. If your restriction request is too limiting, you will be asked to withdraw the request. If you do not want to withdraw the request, you will not be able to enroll in OnTarget. If your situation changes at a later date and you can adjust your restrictions, you may restart the OnTarget enrollment process. Q Can I roll over assets from a prior employer s plan into my plan to take advantage of OnTarget? A You may be able to roll over a qualified plan balance from another employer s plan into your OnTarget account. Call for more details. Representatives are available from 9 a.m. to 8 p.m. ET on New York Stock Exchange business days. Q If I leave my current employer, can I continue to participate in OnTarget? Will I still pay fees? A Yes. If you leave your employer, OnTarget will continue to monitor and rebalance your account, and fees will continue to be assessed. However, since you will no longer be eligible to make plan contributions, there will be no future contribution rate increases. Q What if I want to increase my contribution rate by more than the automatic increase set by my employer? A OnTarget allows you to increase your contribution rate by any percentage you want, up to the maximum amount allowed by the Plan, or by applicable law, whichever is less. If you would like to increase or reduce your current contribution rate, visit the Contribution Rate Change page on mylife.jhrps.com or call Q Can I cancel the automatic contribution rate increase feature? A Yes. You may opt out of the automatic increases at any time. However, keep in mind that the more you contribute to your Plan, the greater the impact on your potential retirement savings. To cancel the automatic contribution rate increase feature, visit the My Contributions page on mylife.jhrps.com or call For your protection, all calls to representatives are recorded. 5

7 Cost of services Q What is the cost of services for the OnTarget program? A The OnTarget service fee is based on the value of your account assets under management. Your account balance will be shown net of fees, on your quarterly statement. Fees are withdrawn from OnTarget accounts on a monthly basis and are calculated based on the following fee schedule: Account Balance Annual Rate On the first $50, On the next $50, On the next $150, On amounts over $250, For example, a participant with a $36,000 account balance will pay a fee based on of the first $50,000 of the account. The total annual fee for this participant would be $180 ($36,000 x ), or $15 per month. Keep in mind, fees are only charged to amounts invested in the OnTarget service. Assets held in company stock, restricted funds, and brokerage accounts, will not be included in the monthly fee calculation. John Hancock will provide each participant with at least 30 days notice if there are any changes made to the fee schedule listed. 6

8 Call the today to get started! Or visit mylife.jhrps.com/ontarget and click Launch the OnTarget enrollment wizard * For your protection, all calls to representatives are recorded. The content of this document is for general information only and is believed to be accurate and reliable as of posting date but may be subject to change. John Hancock does not provide investment, tax, or legal advice. Please consult your own independent advisor as to any investment, tax, or legal statements made herein. John Hancock Retirement Plan Services LLC is also referred to as John Hancock. John Hancock Retirement Plan Services, LLC offers service programs for retirement plans through which a sponsor or administrator of a plan may invest in mutual funds, ETFs, guaranteed products and collective investment trusts on behalf of plan participants. John Hancock Trust Company, LLC provides trust and custodial services to such plans. Investment advisory services may be provided by New York Life Investment Management LLC. Plan administrative services may be provided by John Hancock Retirement Plan Services, LLC or a plan consultant selected by the Plan. John Hancock Distributors, LLC, member FINRA/SIPC. NOT FDIC INSURED MAY LOSE VALUE NOT BANK GUARANTEED NOT INSURED BY ANY GOVERNMENT AGENCY 2015 All rights reserved. S-P26133-GE 04/ RS