Trustee 401(k) program. Designed for employee success with additional fiduciary protection

Transcription

1 Trustee 401(k) program Designed for employee success with additional fiduciary protection

2 Fulfill your commitment to help employees attain a secure retirement. It s easier than you might think. Your employees are the lifeblood of your organization. As a fiduciary responsible for your 401(k) plan, you face many obligations. CUNA Mutual Group s Trustee 401(k) program makes it possible for even small employers to deliver the benefits of a premier retirement plan with less work and greater peace of mind. 2 CUNA Mutual Group - Trustee 401(k) program

3 The Board of Trustees Does the Heavy Lifting. To make your load a little lighter. Through our years of experience, we ve found that some employers favor a retirement program where all investment options are carefully selected for them. That s where the Board of Trustees comes in. This team of financial professionals selects and oversees all investments on behalf of participating plan sponsors. This process simplifies plan administration and employee investment decisions, while providing greater fiduciary protection for you. The Board of Trustees: Develops the program-level investment policy statement Uses state-of-the art statistical screens to determine quality and suitability, maintaining the integrity of investment selections relative to peers Meets three times per year with an independent, third-party investment adviser to select and monitor investment options and professionally arrange portfolios Monitors investment results Selects and oversees investment managers Reviews annual financial statements prepared by external auditors Adjusts investment strategy as necessary to avoid unwarranted risk and enhance overall investment performance TRUSTEE 401(k) PROGRAM HIGHLIGHTS Streamlines plan administration and affords greater protection because the Board of Trustees accepts co-fiduciary responsibility for investment selection and monitoring Provides access to broad-based, lowcost institutional investments often unavailable to individual investors and retirement plans with assets less than $150 million Simplifies investment choices and helps employees invest appropriately for their future via Target Retirement Date and Target Allocation (Lifestyle) funds Features employee education and communication resources Guides employees to informed decisions about their retirement investment strategies via online, interactive tools Offers full website support Includes comprehensive financial reports and complete Board of Trustee meeting minutes, recommendations, strategies and decisions for the plan Enables due diligence files to be easily updated TRUSTEE 401(k) PROGRAM DESIGN OPTIONS Roth and traditional options Automatic enrollment Automatic increase option 3

4 PLAN MANAGEMENT Online plan management allows employees to: Guide Employees to Smart Retirement Strategies. Simple and sophisticated do go together. With CUNA Mutual Group, choosing an easy-to-administer 401(k) retirement plan doesn t mean skimping on the bells and whistles. Quickly change retirement plan contributions and investment elections Easily transfer money between accounts Complete retirement plan loan applications online RetireOnTarget As a guidance solution that enables employees to build a successful plan and achieve their investment goals, RetireOnTarget features: An easy-to-use website employees use to create and monitor their retirement savings plan A Put Me on Target button to easily implement plan recommendations Guidance that is automatically updated over time Retirement & Investment Solutions Center This team of retirement planning specialists* helps your employees develop retirement savings goals, income plans, investment strategies and more. ADDITIONAL SUPPORT In addition to RetireOnTarget, a variety of resources are available: Webinars Customized participant communications Personalized education Quarterly statements via mail or Financial Resource Center The Financial Resource Center is a secure website that contains tools, calculators, videos and educational materials to help employees actively manage their retirement benefits. Representatives are registered, securities are sold, and investment advisory services offered through CUNA Brokerage Services, Inc. (CBSI), member FINRA/ SIPC, a registered broker/dealer and investment advisor, 2000 Heritage Way, Waverly, Iowa 50677, toll-free Non-deposit investment and insurance products are not federally insured, involve investment risk, may lose value, and are not obligations of or guaranteed by the financial institution. Retirement and Investment Solutions Center team members offer retirement education and do not provide investment, legal or tax advice. Participants are encouraged to consult their own advisors. The retirement plan is likely the most important retirement savings vehicle for your employees. We work hard to help make their possibilities possible. 4 CUNA Mutual Group - Trustee 401(k) program

5 Outcome-based Retirement Planning. We target objectives across risk, return and time. Target Retirement Date Accounts are investment portfolios designed to provide an optimal mix of investments based on a targeted retirement date, upon which investors plan to start withdrawing their money. The principal value of the investment account is not guaranteed at any time, including at the target date. As the chart below demonstrates, the investment mix will gradually change over time, migrating from a higher-risk profile with higher anticipated returns to a more conservative profile as the target retirement date approaches and is passed. HOW THE TARGET DATE ALLOCATION MIX CHANGES AS YOU NEAR RETIREMENT 100% 80% Fixed Income 60% Equities 40% 20% 0% Source: BlackRock, 2012, 1st Quarter Years to Retirement > At Retirement < After Retirement With a variety of broad-based institutional investments, the Trustee 401(k) program features investments that cover the risk/return spectrum. 5

6 The following pages describe the investment objective and strategy, underlying funds, allocation percentages and expense ratios for each investment in the Trustee 401(k) program. For further information on each investment, fund fact sheets and prospectuses are available. BlackRock LifePath Index Retirement Portfolio (K) Utilizes the BlackRock LifePath Retire (LIRKX). The allocation strategy is designed for those currently retired or within a few years of retirement % Equities 1.72% Cash 0.11 Other 60.92% Fixed Income BlackRock LifePath Retire-LIRKX Top Holdings Bond Index Master Portfolio 52.39% Blk Russell 1000 Index Master 21.68% Blk Acwi Ex-US Index Lp Mf 11.15% ishares Barclays TIPS Bond 9.07% Master Small Cap Index Qmst 4.16% ishares MSCI EAFE Small Cap Index 0.94% ishares FTSE EPRA/NAREIT Dev RE ex-us 0.23% ishares Cohen & Steers Realty Majors 0.18% Total 99.80% BlackRock LifePath Index 2020 Portfolio (K) Utilizes the BlackRock LifePath Index 2020 (LIMKX). The allocation strategy is designed for investors planning to retire in or within a few years of % Cash 52.87% Equities 0.19% Other 45.02% Fixed Income BlackRock LifePath Index 2020-LIMKX Top Holdings Bond Index Master Portfolio 39.19% Blk Russell 1000 Index Master 30.97% Blk Acwi Ex-US Index Lp Mf 15.20% ishares Barclays TIPS Bond 6.22% Master Small Cap Index Qmst 3.53% ishares FTSE EPRA/NAREIT Dev RE ex-us 1.88% ishares Cohen & Steers Realty Majors 1.47% ishares MSCI EAFE Small Cap Index 1.33% Total 99.79% BlackRock LifePath Index 2030 Portfolio (K) Utilizes the BlackRock LifePath Index 2030 (LINKX). The allocation strategy is designed for investors planning to retire in or within a few years of % Other 68.11% Equities 2.12% Cash 29.50% Fixed Income BlackRock LifePath Index 2030-LINKX Top 10 Holdings Blk Russell 1000 Index Master 40.09% Bond Index Master Portfolio 26.05% Blk Acwi Ex-US Index Lp Mf 19.21% ishares Barclays TIPS Bond 3.71% ishares FTSE EPRA/NAREIT Dev RE ex-us 3.40% Master Small Cap Index Qmst 2.95% ishares Cohen & Steers Realty Majors 2.75% ishares MSCI EAFE Small Cap Index 1.64% Total 99.80% 6 CUNA Mutual Group - Trustee 401(k) program

7 BlackRock LifePath Index 2040 Portfolio (K) Utilizes the BlackRock LifePath Index 2040 (LIKKX). The allocation strategy is designed for investors planning to retire in or within a few years of % Other 80.62% Equities 2.28% Cash 16.78% Fixed Income BlackRock LifePath Index 2040-LIKKX Top 10 Holdings Blk Russell 1000 Index Master 47.69% Blk Acwi Ex-US Index Lp Mf 22.36% Bond Index Master Portfolio 15.49% ishares FTSE EPRA/NAREIT Dev RE ex-us 4.70% ishares Cohen & Steers Realty Majors 3.74% Master Small Cap Index Qmst 2.44% ishares MSCI EAFE Small Cap Index 1.94% ishares Barclays TIPS Bond 1.43% Total 99.79% BlackRock LifePath Index 2050 Portfolio (K) Utilizes the BlackRock LifePath Index 2050 (LIPKX). The allocation strategy is designed for investors planning to retire in or within a few years of % Cash 90.96% Equities 0.36% Other 6.28% Fixed Income BlackRock LifePath Index 2050-LIPKX Top Holdings Blk Russell 1000 Index Master 53.84% Blk Acwi Ex-US Index Lp Mf 25.01% Bond Index Master Portfolio 6.33% ishares FTSE EPRA/NAREIT Dev RE ex-us 5.79% ishares Cohen & Steers Realty Majors 4.74% Master Small Cap Index Qmst 2.08% ishares MSCI EAFE Small Cap Index 2.04% Total 99.83% CUNA Mutual Lifestyle Income Fund Seeks to provide current income with modest capital growth by investing primarily in a professionally managed portfolio. The Fund may invest between 16%-24% of its portfolio in equity securities % Cash 0.15% Other 19.15% Equities 69.59% Fixed Income CUNA Mutual Lifestyle Income Fund Top Holdings Vanguard Total Bond Market Index Fund; Inst Plus 55.91% Vanguard Inflation-Protected Securities Fund; Inv 16.03% Vanguard Developed Markets Index Fund; Inst 6.09% Vanguard Institutional Index Fund; Inst 4.04% Vanguard Dividend Appreciation Index Fund; Inv 3.03% Vanguard Growth Index Fund; Inst 2.02% DFA US Small Cap Portfolio; Inst 1.02% DFA Emerging Markets Portfolio; Inst 1.01% Vanguard Mid-Cap Index Fund; Inst 1.01% Vanguard Energy Fund; Admiral 1.01% Total 91.17% 7

8 CUNA Mutual Lifestyle Conservative Fund Seeks to provide current income with modest capital growth by investing primarily in a professionally managed portfolio. The Fund may invest between 32%-40% of its portfolio in equity securities 37.84% Equities 0.24% Other 9.20% Cash 52.71% Fixed Income CUNA Mutual Lifestyle Conservative Fund Top Holdings as of 12/31/2012 Vanguard Total Bond Market Index Fund; Inst Plus 41.43% Vanguard Developed Markets Index Fund; Inst 12.04% Vanguard Inflation-Protected Securities Fund; Inv 11.87% Vanguard Institutional Index Fund; Inst 7.98% Vanguard Dividend Appreciation Index Fund; Inv 6.99% Vanguard Growth Index Fund; Inst 4.00% DFA Emerging Markets Portfolio; Inst 2.00% Vanguard Mid-Cap Index Fund; Inst 2.00% Vanguard Energy Fund; Admiral 1.99% PIMCO All Asset 1.98% Total 92.28% CUNA Mutual Lifestyle Moderate Fund Seeks to provide capital growth with modest current income by investing primarily in a professionally managed portfolio. The Fund may invest between 54%-66% of its portfolio in equity securities. 0.45% Other 56.26% Equities 5.37% Cash 37.93% Fixed Income CUNA Mutual Lifestyle Moderate Fund Top Holdings Vanguard Total Bond Market Index Fund; Inst Plus 27.86% Vanguard Developed Markets Index Fund; Inst 15.18% Vanguard Institutional Index Fund; Inst 12.08% Vanguard Dividend Appreciation Index Fund; Inv 10.07% Vanguard Inflation-Protected Securities Fund; Inv 7.98% Vanguard Growth Index Fund; Inst 7.06% DFA Emerging Markets Portfolio; Inst 4.03% PIMCO All Asset Fund; Inst 3.99% Vanguard Mid-Cap Index Fund; Inst 3.02% Vanguard Energy Fund; Admiral 3.01% Total 94.28% Lifestyle Aggressive Seeks to provide capital growth with modest current income by investing primarily in a professionally managed portfolio. The Fund may invest between 72%-88% of its portfolio in equity securities % Equities 0.54% Other 2.61% Cash 21.71% Fixed Income CUNA Mutual Lifestyle Aggressive Fund Top Holdings Vanguard Developed Markets Index Fund; Inst 21.19% Vanguard Institutional Index Fund; Inst 16.06% Vanguard Total Bond Market Index Fund; Inst Plus 13.89% Vanguard Dividend Appreciation Index Fund; Inv 13.06% Vanguard Growth Index Fund; Inst 9.04% DFA Emerging Markets Portfolio; Inst 5.02% PIMCO All Asset Fund; Inst 4.98% Vanguard Mid-Cap Index Fund; Inst 4.02% Vanguard Energy Fund; Admiral 4.01% Vanguard Inflation-Protected Securities Fund; Inv 3.98% Total 95.25% 8 CUNA Mutual Group - Trustee 401(k) program

9 Stable Value The contract is a fixed, deferred group annuity available to qualified retirement plans. It provides guaranteed protection of principal with a set rate of return. The guarantee in this contract is backed by CMFG Life Insurance Company and supported by its general account. Participants in the contract do not participate in the performance of the general account, but the investment performance of that portfolio supports the contract s minimum guaranteed interest rate, any additional amounts and payout obligations. Deposit Administration Group Annuity Contract 1 NA Bond Utilizes the Vanguard Total Bond Market Index Fund Instl Plus Shares (VBMPX). Seeks to track the performance of the Barclays Capital U.S. Aggregate Float Adjusted Bond Index. This Index represents a wide spectrum of public, investmentgrade, taxable, fixed income securities in the United States including government, corporate and international dollar-denominated bonds, as well as mortgage-backed and asset-backed securities all with maturities of more than 1 year. Vanguard Total Bond Market Index Fund; Inst Plus-VBMPX Sector Analysis as of 9/30/ % Corporate Bond 7.62% Government Related 5.82% Cash & Equivalents 1.35% Commercial Mortgage-Backed 1.88% Other 23.95% Agency Mortgage-Backed 38.27% Government Value Stock Utilizes the Vanguard Value Index Fund (VIVIX). Seeks to track the performance of a benchmark index that measures the investment return of large-capitalization value stock and employs a passive management or indexing investment approach designed to track the performance of the MSCI U.S. Prime Market Value Index, a broadly diversified index predominantly made up of value stocks of large U.S. companies. Vanguard Value Index Fund; Inst-VIVIX Sector Analysis as of 9/30/ % Consumer Cyclical 3.43% Real Estate 20.78% Financial Services 5.90% Communication Services 6.52% Technology 6.72% Utilities 15.48% Energy 12.94% Health Care 9.90% Industrials 10.10% Consumer Defensive 9

10 S&P 500 Index Fund Utilizes the Vanguard Institutional Index Fund (VINIX). Seeks to track the performance of a benchmark index that measures the investment return of large-capitalization stocks and employs a passive management - or indexing - investment approach designed to track the performance of the Standard & Poor s 500 Index, a widely recognized benchmark of the U.S. stock market performance that is dominated by the stocks of large U.S. companies. Vanguard Institutional Index Fund; Inst-VINIX Sector Analysis as of 9/30/ % Utilities 2.91% Basic Materials 4.53% Communications Services 9.65% Consumer Cyclical 10.84% Industrials 18.57% Technology 11.26% Energy 11.41% Consumer Defensive 13.44% Financials 11.81% Health Care Growth Stock Utilizes the Vanguard Growth Index Fund (VIGIX). Seeks to track the performance of a benchmark index that measures the investment return of large-capitalization growth stocks. The fund employs a passive management or indexing investment approach designed to track the performance of the MSCI U.S. Prime Market Growth Index, a broadly diversified index predominantly made up of growth stocks of large U.S. companies. Vanguard Growth Index Fund; Inst-VIGIX % Energy 4.66% Financial Services 3.36% Basic Materials 3.27% Communication Services Sector Analysis as of 9/30/ % Technology 10.06% Healthcare 11.93% Consumer Defensive 12.27% Industrials 15.51% Consumer Cyclical Medium/Small Company Stock Utilizes the Vanguard Extended Market Index Fund (VIEIX). Seeks to track the investment performance of a benchmark index that measures the investment return of small- and mid-capitalization stocks, employing a passive management or indexing investment approach designed to track the performance of the Standard & Poor s Completion Index, a broadly diversified index of stocks of small and medium-sized U.S. companies. Vanguard Extended Market Index Fund; Inst-VIEIX Sector Analysis as of 9/30/ % Consumer Defensive 3.84% Utilities 16.54% Industrials 15.57% Consumer Cyclical 13.06% Technology 5.56% Basic Materials 5.68% Energy 8.30% Real Estate 10.55% Healthcare 12.35% Financial Services 10 CUNA Mutual Group - Trustee 401(k) program

11 Diversified Equity Seeks to provide capital growth with minimal current income by investing primarily in a professionally managed portfolio. The Fund may invest between 96%-100% of its portfolio in equity securities. 0.62% Other 5.02% Cash 5.28% Fixed Income 89.08% Equity CUNA Mutual Diversified Equity Fund Top Holdings Vanguard Developed Markets Index Fund; Inst 24.82% Vanguard Institutional Index Fund; Inst 18.99% Vanguard Dividend Appreciation Index Fund; Inv 16.16% Vanguard Growth Index Fund; Inst 10.46% DFA Emerging Markets Portfolio; Inst 6.65% PIMCO All Asset Fund; Inst 5.65% Vanguard Mid-Cap Index Fund; Inst 4.75% Vanguard Energy Fund; Admiral 4.74% DFA US Small Cap Portfolio; Inst 2.86% Total 95.08% International Utilizes the Vanguard FTSE All-World ex-us Index Fund (VFWSX). Seeks to track the performance of a benchmark index that measures the investment return of stocks of companies located in developed and emerging markets around the world. The fund is designed to track the performance of the FTSE All-World ex U.S. Index, an index that includes approximately 2,200 stocks of companies located in 46 countries, including both developed and emerging markets. Vanguard FTSE All-World ex-us Index Fund Institutional Shares-VFQSX Top Regions by Percent as of 9/30/ % Japan 7.34% Canada 14.30% United Kingdom 6.97% Australia & New Zealand 5.27% Latin America 19.51% Asia 2.30% Africa Ex-Japan 0.45% Mideast 0.09% United States 30.95% Europe For retirement plans designed for employee success and additional fiduciary protection, call CUNA Mutual Group today at Or visit for more information. 11

12 Investors should consider the objectives, risks, charges and expenses of each investment option carefully before investing. The investment return and principal value of an investment in a mutual fund/variable account will fluctuate, and an investor s share, when redeemed may be worth more or less than their original cost. For more information or to receive a copy of the prospectus/disclosure statements, call toll-free Read it carefully before investing. 1 The Stable Value account is a fixed, group annuity contract issued by CMFG Life Insurance Company. After any guaranteed interest period, interest is set quarterly and applied on an annual basis. Any stated interest rate may not have been adjusted to reflect plan administration, transaction or contract fees. Certain contract fees are currently waived. All guarantees are subject to the ability of CMFG Life Insurance Company to honor such guarantees. This contract is subject to a market value adjustment if the plan terminates the contract and elects a lump sum distribution, which may result in a payout of less than 100% of principal and interested credited. Non-deposit financial products are not federally insured and are not obligations of or guaranteed by the financial institution. 2 Large holdings in a specific sector, such as real estate, may be subject to greater volatility and the investment may be more subject to the unique risks associated with that sector than a more diversified investment strategy. 3 Non-domestic securities may have additional risks, including exchange rate changes, political and economic unrest, relative low market liquidity and the potential difference in financial and accounting controls and standards. These risks may be magnified in emerging markets. 4 Investing in small, mid-size companies involves greater risks not associated with investing in more established companies, such as business risk, significant stock price fluctuations and illiquidity. 5 Investing in the bond market is subject to certain risks including market, interest-rate, issuer, credit, and inflation risk. Mortgage and asset-backed securities may be sensitive to changes in interest rates, subject to early repayment risk, and their value may fluctuate in response to the market s perception of issuer creditworthiness; while generally supported by some form of government or private guarantee there is no assurance that private guarantors will meet their obligations. High-yield, lower-rated, securities involve greater risk than higher-rated securities. Derivatives may involve certain costs and risks such as liquidity, interest rate, market, credit, management and the risk that a position could not be closed when most advantageous. Investing in derivatives could lose more than the amount invested. 6 Portfolio holdings as of the date indicated are provided. Holdings are subject to change without notice. 7 A fund that invests in other funds is subject to the risks the underlying funds investments and may be subject to higher fees than a fund that invests directly in the ultimate securities. Each fund is subject to equity, bond and foreign securities risks in proportion to its allocation to those asset categories. There is no assurance that the recommended asset allocation will either maximize returns or minimize risk or be the appropriate allocation in all circumstances for every investor with a particular time horizon. CUNA Mutual Group is a leading provider of financial services to credit unions, their members, and valued customers worldwide. With more than 75 years of market commitment, CUNA Mutual Group s vision is unwavering: to be a trusted business partner that delivers service excellence with customer-focused products and market-driven innovation. Visit or call for more information. 8 A redemption fee of 2.00% is charged on shares of the fund held less than 60 days. Trustee is the marketing name for the Trustee-directed investments including Collective Trust Investment funds and institutionally priced mutual funds. CUNA Mutual Group is the marketing name for CMFG Life Insurance Company and its affiliates and subsidiaries. Product availability and features may vary by jurisdiction and are subject to actual policy language. Corporate headquarters are located in Madison, Wisconsin. Distributed by CUNA Brokerage Services, Inc., member FINRA/SIPC, a registered broker/dealer and investment advisor, 2000 Heritage Way, Waverly, Iowa 50677, toll-free Non-deposit investment products are not federally insured, involve investment risk, may lose value. P.O. Box Mineral Point Road Madison, WI CUNA Mutual Group, 2013 All Rights Reserved. Common Purpose. Uncommon Commitment.