TRANSITION UPDATE JANUARY 2018 STATE DEFINED CONTRIBUTION PLAN RETIRE WELL VERMONT INCLUDED IN THIS NEWSLETTER: Key Dates Reminder 2 Investment Details 3 On-site Guidance 4 Questions and Answers 5 Vermont Retirement Systems
GETTING READY FOR THE MOVE! As announced in November s newsletter, effective February 1, 2018, the State Defined Contribution Plan will transfer its recordkeeping services to a new provider, Prudential Retirement. We have carefully designed the transition process to minimize the impact on participants. Throughout this process, we will post all important updates and reminders on the website vermont.retirepru.com. WHAT IS A BLACKOUT PERIOD? The blackout period is the period of time during the transition when you will not have access to your account. This blackout period is necessary to allow time for the current provider, Fidelity, to prepare its records for the transition to Prudential and then for Prudential to reconcile these records and establish your account. KEY DATES REMINDER Below are deadlines for various transactions. Please note that, throughout the transition, your account balance will remain invested. Date January 24, 2018 4 p.m. ET After 4 p.m. ET, January 24, 2018 through February 12, 2018 February 1, 2018 On or about February 12, 2018 Activity This is the last day you can conduct the following activities with Fidelity: Request a distribution Make investment changes This is the blackout period. During this period, your account records will be reconciled and moved to Prudential, and your account will not be available. Your account balance will be transferred to Prudential. This is when the blackout period is scheduled to end and you will once again have full access to your account at Prudential. NEW! AUTOMATIC ASSET ALLOCATION TOOL COMING SOON. GoalMaker is an easy-to-use, optional asset allocation program that is available at no additional cost to participants. It is designed to help you find investments that fit your retirement goals. It uses two key pieces of information your investor style and your years to retirement to create a portfolio that may help you meet your retirement goals. Keep in mind that application of asset allocation and diversification concepts does not assure a profit or protect against loss in a declining market. You can lose money by investing in securities. 2
HOW YOUR ACCOUNT WILL MOVE Your contributions will continue uninterrupted throughout the transition period. As of February 1, 2018, contributions will be directed to your new account at Prudential. Prudential will then invest your assets in the same or like funds per your chosen asset allocation. This process is known as mapping. Your investment options will be mapped according to the chart below. Asset Class Current Investment Option Investment Option Beginning February 1, 2018 Stable Value Managed Income Portfolio* Vermont Stable Value Fund* Intermediate-Term Bond PIMCO Total Return ESG PIMCO Total Return ESG Intermediate-Term Bond PIMCO Total Return PIMCO Total Return Intermediate-Term Bond Vanguard Total Bond Market Index Vanguard Total Bond Market Index Balanced American Funds American Balanced American Funds American Balanced Balanced Fidelity Puritan Fidelity Puritan Balanced Vanguard Balanced Index Vanguard Balanced Index Large-Cap Blend Fidelity 500 Index Premium Fidelity 500 Index Premium Large-Cap Blend Domini Impact Equity Domini Impact Equity Large-Cap Blend Fidelity Dividend Growth Fidelity Advisor Dividend Growth Large-Cap Growth Fidelity Blue Chip Growth Fidelity Blue Chip Growth Large-Cap Value T. Rowe Price Equity Income SA/T. Rowe Price Equity Income* Mid-Cap Blend Fidelity Extended Market Index Premium Fidelity Extended Market Index Premium Mid-Cap Value Fidelity Low-Priced Stock Fidelity Low-Priced Stock Small-Cap Blend Fidelity Small Cap Discovery Fidelity Small Cap Discovery Small-Cap Growth Janus Triton Janus Henderson Triton Foreign Large-Cap Blend Vanguard Total International Stock Index Vanguard Total International Stock Index Foreign Large-Cap Growth Fidelity International Discovery Fidelity Advisor International Discovery Foreign Small/ Mid-Cap Growth Columbia Acorn International Columbia Acorn International World Small/Mid-Cap Stock Pax Global Environmental Markets Pax Global Environmental Markets Target Date Fidelity Freedom Income Fidelity Advisor Freedom Income Target Date Fidelity Freedom 2005 Fidelity Advisor Freedom 2005 Target Date Fidelity Freedom 2010 Fidelity Advisor Freedom 2010 Target Date Fidelity Freedom 2015 Fidelity Advisor Freedom 2015 Target Date Fidelity Freedom 2020 Fidelity Advisor Freedom 2020 Target Date Fidelity Freedom 2025 Fidelity Advisor Freedom 2025 Target Date Fidelity Freedom 2030 Fidelity Advisor Freedom 2030 Target Date Fidelity Freedom 2035 Fidelity Advisor Freedom 2035 Target Date Fidelity Freedom 2040 Fidelity Advisor Freedom 2040 Target Date Fidelity Freedom 2045 Fidelity Advisor Freedom 2045 Target Date Fidelity Freedom 2050 Fidelity Advisor Freedom 2050 *All investments, except the stable value fund and the SA/T. Rowe Price Equity Income Fund, are registered mutual funds. The target date is the approximate date when investors plan to retire and may begin withdrawing their money. The asset allocation of the target date funds will become more conservative as the target date approaches by lessening the equity exposure and increasing the exposure in fixed income type investments. The principal value of an investment in a target date fund is not guaranteed at any time, including the target date. There is no guarantee that the fund will provide adequate retirement income. A target date fund should not be selected based solely on age or retirement date. Participants should carefully consider the investment objectives, risks, charges and expenses of any Fund before investing. Funds are not guaranteed investments and the stated asset allocation may be subject to change. It is possible to lose money by investing in securities, including losses near and following retirement. 3
IMPORTANT INFORMATION ABOUT THE MANAGED INCOME PORTFOLIO Your ongoing contributions into this fund will be invested into the Vermont Stable Value Fund upon the transition to Prudential. However, your existing balance in the Managed Income Portfolio will not move into the Vermont Stable Value Fund until approximately the first quarter of 2019. This is due to contractual obligations with Fidelity. Although no new contributions will be accepted into the Managed Income Portfolio, you will still have the ability to move your existing balances from the Managed Income Portfolio into most of the other funds that are offered in the plan whenever you like. The exception will be the Vermont Stable Value Fund. Since both the Managed Income Portfolio and the Vermont Stable Value Fund are stable value investments, a competing funds scenario will exist while they are both part of the Plan, making them subject to a 90-day equity wash provision. This provision prohibits direct transfers between competing funds for 90 days. Therefore, transfers directly out of the Managed Income Portfolio into the Vermont Stable Value Fund are not permitted. If you want to transfer these assets, they would first have to be directed to another noncompeting fund option available in your Plan for 90 days before they could be transferred to the Vermont Stable Value Fund. ON-SITE RETIREMENT PLANNING ASSISTANCE UPCOMING MEETING OPPORTUNITY Beginning at the end of January, a team of Prudential retirement counselors will be available in Vermont to address your questions regarding the transition and provide information on the enhanced tools and services that will be available. Mark your calendars. Day/Date Time Location Tuesday, January 30, 2018 7:30 a.m. 4:30 p.m. Montpelier Pavilion Building Auditorium 109 State Street Wednesday, January 31, 2018 8:30 a.m. 4:30 p.m. Waterbury WSOC Fox Conference Center, Cherry A 280 State Drive Thursday, February 1, 2018 8:00 a.m. 4:30 p.m. Rutland Asa Bloomer Building 266 State Conference Room, 2nd Floor 88 Merchants Row Thursday, February 8, 2018 7:45 a.m. 4:30 p.m. Burlington Vermont Department of Health (Zampieri Building) 108 Chery Street, Room 2B If you plan to attend, please be sure to bring a photo ID, as it may be required to enter some meeting locations. 4
WELCOMING OUR NEW RETIREMENT COUNSELOR TEAM Beginning in February, a local, Vermont-dedicated Prudential team of retirement counselors will be available on an ongoing basis for meetings, personal consultations, phone calls and questions related to your retirement account. Look for more information soon regarding the retirement counselor who will be assigned to your area. QUESTIONS & ANSWERS 1. Is the plan website address changing? Yes. A newly developed website, vermont.retirepru.com, will provide 24/7 access from your computer or mobile device with enhanced tools and resources. To log in to your account on or after February 12, 2018, go to vermont.retirepru.com, click Account Access and then click Register Now, or call 877-RET-VERM (877-738-8376) and follow the instructions to create a username and password. 2. What number do I call to access my account after the transition? Once the transition is complete, call the new toll-free Vermont Supplemental Plan phone line at Prudential: 877-RET-VERM (877-738-8376). This automated line is available 24/7. Participant service representatives are available Monday through Friday, from 8 a.m. to 9 p.m. ET. 3. How do I designate or update my beneficiary(ies)? Beginning February 12, 2018, update this information through your account at vermont.retirepru.com in the Personal Information section on your account home page. Click the View Details link. Then click Personal Information in the Other Links section. 4. What asset allocation tool will be available? GoalMaker is an easy-to-use, optional asset allocation tool that will be added to your plan. GoalMaker uses your investor style (comfort level with market risk) and years to retirement (the number of years until you begin withdrawing your retirement savings) to provide you with a portfolio of investments. It matches this information to one of 12 model portfolios made up of investment options from the Plan. It also helps you stay on track through automatic quarterly rebalancing, which ensures your asset allocation stays in line with your original investment allocation. GoalMaker also has an optional Age Adjustment feature that, when selected, will automatically shift your allocation to be invested more conservatively as you get closer to retirement which helps you plan for capital preservation as you approach retirement. 5
5. Will Prudential offer any account management or investment advice service to help manage my account? Yes. You will have the opportunity to create a personalized retirement strategy through Morningstar Retirement Manager SM, an optional service available in your plan. Depending on the level of assistance you need, the Morningstar Retirement Manager service can offer advice and recommendations, or it can retain complete oversight and management of your account for an annual fee of 0.35% of your total balance. 6. I am retired and currently receiving distributions from Fidelity. How will the transition affect those payments? To avoid disruption for those currently receiving plan payouts, Fidelity will be sending out payments that would otherwise be made during the blackout period the week of January 18, 2018. Thereafter, ongoing payments will be made by Prudential on your scheduled dates. 7. I currently have account auto rebalancing. Will this feature be available at Prudential? Yes. You may elect account auto rebalancing at Prudential. Please be aware that any rebalancing election you chose with Fidelity will not automatically carry over to Prudential. If you elect this feature at Prudential, your account will rebalance on a quarterly basis, starting in March. 8. What if I have more questions? For additional information about the transition, call Prudential at 877-RET-VERM (877-738-8376). 6
ACCESSING YOUR ACCOUNT IN FEBRUARY Information about your account at Prudential is at your fingertips, or just a call away! NEW PLAN WEBSITE vermont.retirepru.com Review your account balance, research your investment options, perform transactions and learn more about planning for retirement all through a redesigned, easy-to-navigate website. It will have information designed for you to learn the fundamentals of saving and investing for retirement. Also available is an interactive Retirement Income Calculator that illustrates if you re saving enough for retirement, what to do if you re not and how to stay on track if you are. The vermont.retirepru.com website is optimized for viewing on all mobile devices, so you can access your account information wherever you are. PRUDENTIAL RETIREMENT VERMONT SUPPLEMENTAL RETIREMENT PLAN TOLL-FREE PHONE LINE: 877-RET-VERM (877-738-8376) Get account information or perform transactions through the automated phone system, 24/7. If you have questions or need assistance, representatives are available Monday through Friday, from 8 a.m. to 9 p.m. ET. Questions? Please call Prudential at 877-RET-VERM (877-738-8376). 7
For informational or educational purposes only. This material is not intended as advice or recommendation about investing or managing your retirement savings. By sharing it, Prudential Retirement is not acting as your fiduciary as defined by the Department of Labor s Fiduciary rule or otherwise. If you need investment advice, please consult with a qualified professional. Investors should consider the fund s investment objectives, risks, charges and expenses before investing. The prospectus, and if available the summary prospectus, contain complete information about the investment options available through your plan. Please call 1 877-738-8376 for a free prospectus and if available, a summary prospectus that contain this and other information about our mutual funds. You should read the prospectus and the summary prospectus, if available carefully before investing. It is possible to lose money when investing in securities. For variable insurance products, please read carefully both the contract prospectus and underlying fund prospectus before investing. Shares of the registered mutual funds are offered through Prudential Investment Management Services LLC (PIMS), Newark, NJ, a Prudential Financial company. Prudential Retirement is a Prudential Financial Business. Retirement Manager is an investment advisory service provided by Morningstar Investment Management, LLC who is an independent registered investment advisor. The Morningstar name and trademarks are used, under license, from Morningstar Investment Management, LLC. Morningstar Investment Management, LLC is a registered investment advisor and a wholly owned subsidiary of Morningstar, Inc. Morningstar Investment Management, LLC is not an affiliate of Prudential. The managed Account service has an additional fee charged to assets and is paid quarterly. Please read the investment advisory agreement carefully before participating. The Morningstar Investment Management division is a division of Morningstar and includes Morningstar Associates, Ibbotson Associates, and Morningstar Investment Services, which are registered investment advisors and wholly owned subsidiaries of Morningstar, Inc. All investment advisory services described herein are provided by one or more of the U.S. registered investment advisor subsidiaries. The Morningstar name and logo are registered marks of Morningstar. 2018 Morningstar Investment Management, LLC. All rights reserved. Morningstar Retirement Manager SM is offered by and the property of Morningstar Investment Management, LLC, a registered investment advisor and wholly owned subsidiary of Morningstar, Inc., and is intended for use by citizens and legal residents of the United States and its territories. Investment advice generated by Morningstar Retirement Manager is based on information provided and limited to the investment options available in the Plan. Projections and other information regarding the likelihood of various retirement income and/or investment outcomes are hypothetical in nature, do not reflect actual results, are not guarantees of future results and may vary with each use and over time. Morningstar Investment Management, LLC is not affiliated with Prudential Financial or any of its affiliates. Participants using the Retirement Income Calculator should consider other assets, income and investments (e.g. equity in a home, Social Security benefits, individual retirement plan investments, etc.) when assessing the adequacy of the estimated income stream as provided by this tool. The Retirement Income Calculator is hypothetical and for illustrative purposes only and is not intended to represent performance of any specific investment, which may fluctuate. There is no assurance that retirement income objectives will be met. You can lose money by investing in securities. Neither Prudential Financial nor any of its affiliates provide tax or legal advice for which you should consult your qualified professional. Retirement counselors are registered representatives of Prudential Investment Management Services LLC (PIMS), Newark, NJ, a Prudential Financial company. GoalMaker s model allocations are based on generally accepted financial theories that take into account the historic returns of different asset classes. But of course, past performance of any investment does not guarantee future results. Participants should consider their other assets, income and investments (e.g. equity in a home, Social Security benefits, individual retirement plan investments, etc.), in addition to their interest in the plan, to the extent those items are not taken into account in the model. Participants should also periodically reassess their GoalMaker investments to make sure their model portfolio continues to correspond to their changing attitudes and retirement time horizon. Retirement products and services are provided by Prudential Retirement Insurance and Annuity Company (PRIAC), Hartford, CT or its affiliates. PRIAC is a Prudential Financial company. Prudential Retirement is a Prudential Financial business. Prudential Retirement s separate accounts are available under group variable annuity contracts issued by Prudential Retirement Insurance and Annuity Company (PRIAC), Hartford, CT. PRIAC is a Prudential Financial company. 2018 Prudential Financial, Inc. and its related entities. Prudential, the Prudential logo, the Rock symbol and Bring Your Challenges are service marks of Prudential Financial, Inc. and its related entities, registered in many jurisdictions worldwide. 0314645-00001-00 STV002NLRE5 02/2018