Frequently Asked Questions (FAQs) Regarding 401k Vendor Change: Dow Corning Employees Capital Accumulation Plan (CAP)

Transcription

1 Frequently Asked Questions (FAQs) Regarding 401k Vendor Change: Dow Corning Employees Capital Accumulation Plan (CAP) Section 1: Introduction... 1 Section 2: What Happens When... 2 Section 3: Brokerage Accounts... 4 Section 4: Investments... 4 Section 5: Financial Engines... 6 Section 6: More Information... 6 Section 7: Miscellaneous Questions... 7 Section 1: Introduction 1.1 Why is Dow Corning switching vendors? Dow Corning regularly reviews the features and benefits of the CAP to ensure that it continues to meet your needs. By partnering with Vanguard, Dow Corning is confident that you will have access to improved investment education and financial planning tools and resources. As a reminder, there will be no change to the basic plan design and key features of the CAP. 1.2 What is not changing? Company Match: the Company Match will remain the same as listed below. o Old Plan Formula: 100% of the first 3 and 50% of the next 2 (5% = 4% match) o New Plan Formula: 100% of the first 3 and 50% of the next 4 (7% = 5% match) Plan Options: will remain the same; you still will be able to contribute to D-CAP, V-CAP, Roth (or a combination of all three) 1.3 What features are changing with this change from T. Rowe Price to Vanguard? PIMCO Total Return Fund Institutional Shares: will be removed from the investment lineup and replaced with Northern Trust Aggregate Bond Fund. Account Rebalance Feature: the account rebalance feature will no longer be an automatic scheduled event. You can elect to rebalance your account at your own discretion. Unscheduled loan payments: in addition to loan payments withheld from your paycheck, you will have the option to make unscheduled partial loan payments at any time, without paying off the entire loan. Loan Maintenance Fee: loans initiated after May 21 st, will be assessed an annual maintenance fee of $25. Terminated Employees (not retired): will be charged with an annual account maintenance fee of $58, which will be withheld from their account statement at the end of each quarter. 1.4 Are there any plans to have on-site meetings with Vanguard? No, there are no meetings planned at this time; however, Vanguard Specialists are available to answer your questions by calling (800)

2 1.5 Will my current beneficiary election be carried over to Vanguard? Yes, your current beneficiary with T. Rowe Price will be carried over to Vanguard after which time; you can make beneficiary changes via the Vanguard website at or by calling a Vanguard Specialist at (800) Will I still be able to see my pension value in my 401k account? Yes, you will still be able to see the value of your pension benefit within your CAP account upon transfer to Vanguard. 1.7 Is there anything I need to do? Yes and No. (YES) If you are invested in PIMCO, the funds and allocations will be transferred to the NT Aggregate Bond. If you don t want to have your funds invested in the NT Aggregate Bond fund, you should review the line-up and determine where you want the fund to go. (YES) If you have a brokerage account (Tradelink), it is recommended you open your Brokerage Account (VBO) with Vanguard no later than May 7 th. In the event you do not open a VBO by this date, you will not be able to trade any securities until a paper application is completed for Vanguard. (NO) If none of the above apply to you, no action is required. Section 2: What Happens When 2.1 What is the deadline for making investment changes, deferral changes or initiating a loan in my account BEFORE the transition to Vanguard occurs? You have until 4 p.m. EST on May 18 th, to change how your account balance and future contributions are invested. However, for brokerage accounts, any changes must be done prior to 4 p.m. EST on May 7 th. 2.2 If I have money in my PIMCO fund, do I have to take any action? You have until 4 p.m. EST on May 18 th to change your current money or allocation from PIMCO to another fund. To make this investment change, log into your CAP account at trps.troweprice.com. If you take no action, the money in the PIMCO fund and any future allocations, will be defaulted or moved to the Northern Trust Aggregate Bond Index Fund. 2.3 What is a blackout or restriction period? During this period of time, you will be unable to: Direct or manage investments in your individual accounts, Obtain a loan or a hardship withdrawal from the Plan, Obtain a distribution from the Plan, Change your deferral amount, or Any other transaction involving the CAP.

3 2.4 Will there be a blackout or restriction period? Yes. There will be two blackout/restriction periods as detailed below: Core Investments: Brokerage Accounts: 2.5 When can I access the Vanguard website? You can access Vanguard s website after the restrictions have ended during the week of May 24 th. When the CAP restrictions end you can register for your online access. You will need the following information to complete your registration: Social Security number Birth date Home zip code Plan number (094534)

4 Section 3: Brokerage Accounts 3.1 What is a brokerage account? Currently known as your TradeLink Account, your brokerage account is the self-directed account where you are able to see a diverse investment landscape--thousands of mutual funds are offered. This self directed brokerage account will be offered through Vanguard as the Vanguard Brokerage Option (VBO). 3.2 With the transition to Vanguard Brokerage Option, will I have to pay any transfer fees? No, you will not have to pay a transfer fee with this transition. 3.3 If I don t open a Vanguard Brokerage Option, will an account be established in my name? Yes, Vanguard will transfer your Tradelink brokerage account to the VBO; however, you will be unable to trade in your VBO account until you complete a paper application with Vanguard. 3.4 If I have restricted securities in my TradeLink account, where would these be funds be transferred upon transition to Vanguard? If you do not take action by 4 p.m. EST on May 7 th, the restricted securities that cannot be held at Vanguard will be sold automatically and transferred to Vanguard Prime Money Market Fund. Once the transition is complete, you can move your money to other investments in your account. 3.5 If I want to open a VBO account after conversion, can I open this online? If you are a participant that does not have a VBO account and would like one established after conversion, you can do so online through the VBO option and following the necessary steps. If you had an Tradelink account with TRP and did not open a brokerage account with Vanguard prior to May 7 th, a paper application is required. Please call Vanguard Participant Services at (800) for additional information. 3.6 If I have questions when I am opening my brokerage account, who do I contact? If you have any questions about your new VBO account at Vanguard, contact a Vanguard Participant Services associate at Associates are available Monday through Friday from 8:30 a.m. to 9 p.m., EST. 3.7 With Vanguard Brokerage Option (VBO), will I be offered additional mutual funds? Yes, with the transition to the VBO you will be offered approximately 6,000 fund families. Section 4: Investments 4.1 Will my current investment allocations and deferral options carry over? Yes, your current investment allocations and deferral options (D-CAP, V-CAP, and Roth) will carry over. The only exception to this are the changes due to the removal of the PIMCO fund. 4.2 Will my account balances be invested during the blackout period? Yes, your account balances will continue to be invested during the blackout period. Please note, however, that assets will be in transition during this period, so it is impossible to predict exactly when any affected balances will be moved.

5 4.3 What happens to my historical investment experience? Your historical investment experience will not carry over to Vanguard. Therefore, if you would like to retain this information, you will need to print a copy of your historical experience with T. Rowe Price no later than May 18 th. Dow Corning will not have access to your prior investment information after the transfer to Vanguard. 4.4 Why are the PIMCO Total Return Fund Institutional shares not available with Vanguard? As part of a separate review of the CAP investment lineup, Dow Corning has decided that PIMCO Total Return Fund does not meet the requirements for the CAP. Therefore, this fund will no longer be available after the move to Vanguard. 4.5 If I had outside retirement accounts linked to my account at T. Rowe Price, do I need to re-insert these with Vanguard? Yes, if you want to link these retirement accounts in your account with Vanguard, you will need to link them upon registering your account. 4.6 What is the frequent-trading policy? Because excessive transactions can disrupt the management of an investment and increase its transaction costs, limits are placed on exchanges and other transactions. If you move money out of an investment (other than money market funds, short-term bond funds, stable value investments, and employer securities), you cannot move money back into the same investment for 60 days. This policy applies regardless of the dollar amount. Please note that the 60-day clock restarts after every exchange out of the investment. The frequent-trading policy does not apply to the following: Exchange requests submitted by mail to Vanguard. (Exchange requests submitted by fax, if otherwise permitted, are not mail requests and are subject to the policy.) Exchanges of shares purchased with participant payroll or employer contributions or loan payments. Exchanges of shares purchased with reinvested dividend or capital gains distributions. Distributions, loans, and in-service withdrawals from a plan. Redemptions of shares as part of a plan termination or at the direction of the plan. Redemptions of shares to pay fund or account fees. Share or asset transfers or rollovers. Re-registrations of shares within the same fund. Conversions of shares from one share class to another in the same fund. Automated transactions executed during the first six months of a participant s enrollment in the Vanguard Managed Account Program. Note that your plan and the issuers of your plan s investments reserve the right to revise or terminate the exchange privilege (your ability to move money between funds), limit the amount of any exchange, or reject any exchange at any time, without notice.

6 Section 5: Financial Engines 5.1 What is Financial Engines? Financial Engines provided the service Personal Asset Manager through T. Rowe Price. They will continue to provide this service but it will be known as Vanguard Managed Account Program (VMAP). This program provides ongoing professional management for your investments in the plan. An independent advisor will select your funds, invest your money, and periodically make changes to your asset mix to suit your goals. The advisor can also consider money you ve saved outside of your retirement plan when developing your personalized investment strategy. The annual fee for this program is based on a percentage of the value of your assets. While Financial Engines will continue to develop the advice, it will now be provided through Vanguard at a lower cost than you are paying today. 5.2 With the transition, how will this affect my current Financial Engines elections? Financial Engines will now be known as Vanguard Managed Account Program (VMAP). Your current elections will map over to Vanguard and no action is required by you. 5.3 With this transition, will I still have to pay managed account fees for Financial Engines? Yes, however, the fees for the managed account services will be at a lower cost. They are: Vanguard Managed Account Program (VMAP ) fee If you enroll in VMAP, your account will be charged an annual management fee, calculated as follows: 0.35% of your balance per year for the first $100,000 in your account. 0.25% of your balance per year for the next $150,000 in your account. 0.15% of your balance per year for the next $250,000 in your account. 0.10% of your balance per year for amounts of more than $500,000 in your account. The minimum annual management fee is $60. Section 6: More Information 6.1 If I want to make any type of transaction prior to the transition to Vanguard, who do I contact? T. Rowe Price representatives are available to answer your questions or offer personal assistance. Representatives can be reached Monday through Friday, 7 a.m. to 10 p.m. EST at You will need to do this prior to the restriction periods (May 18 th for the Core Investments and May 7 th for Brokerage Accounts).

7 Section 7: Miscellaneous Questions 7.1 Retiree Question: If I have a monthly, quarterly, semi-annual or annual installment set up with T. Rowe Price, will these transfer over? Yes, all installments will carry over to Vanguard. 7.2 Retiree Question: If I am supposed to take a Required Minimum Distribution (RMD) in 2015; how will that be processed? If you are required to take a RMD, Vanguard will process these for You will receive a communication in October with additional information. 7.3 If I have the auto increase feature with T. Rowe Price, will this transfer automatically to Vanguard? Yes, your current auto-increase feature with T. Rowe Price will transfer to Vanguard. You will have an option with Vanguard to enroll for, change or discontinue the auto increase feature. 7.4 How can I access the Vanguard website? The website is: After the blackout period, you can also access Vanguard through Horizons, Dow Corning & Me Manage My Compensation & Benefits Access My Cap Account. 7.5 How do I contact Vanguard? You can contact Vanguard and speak with a representative by calling (800) , Monday through Friday 8:30 am to 9 pm EST. 7.6 Will all links on the intranet be updated to Vanguard? Yes, after the blackout period begins, all intranet links will be updated to be connected with Vanguard. 7.7 If I am a Multibase employee, will I experience any change or restriction period? No, your benefits will remain the same and your account balance will remain at Vanguard.