Re: Changes to the Stanford Contributory Retirement Plan that Reduce Investor Fees

Transcription

1 June 2015 Re: Changes to the Stanford Contributory Retirement Plan that Reduce Investor Fees Dear Stanford University Contributory Retirement Plan Participant: Stanford University periodically reviews the Stanford Contributory Retirement Plan (SCRP) to help ensure your retirement and financial goals are met. These reviews assess the range of investment options available through the Plan, investment option performance and value, and whether the Plan gives you access to services that complement your account. As a result of a recent review, Stanford University has decided to replace the existing Vanguard Target Retirement Income Funds Investor Shares with the Institutional Shares. This change will result in lower fees and expenses associated with your investment choices because these Institutional Shares have a lower expense ratio than the prior share class. No action is required on your part to enjoy the reduced fees for the changes described on the the following pages. Certainly, if you are not satisfied with how your current investment elections will be modified, you will have the opportunity to make changes, as you can do at any time. Go to the What Do I Need to Do? Sections to learn more. Stanford University is committed to offering you a range of investment options, and now some of those options have lower fees. While selecting an appropriate mix of investments might seem challenging, you have access to resources that can help make it easier. Visit or call (888) to schedule a one-on-one consultation at your work location. Sincerely, Stanford Benefits 1

2 CHANGES TO THE SCRP Your New Investment Options Beginning July 31, 2015 the below funds will be added as new share classes to the Plan. Retirement 2010 Fund Retirement 2015 Fund Retirement 2020 Fund Retirement 2025 Fund Retirement 2030 Fund Retirement 2035 Fund Retirement 2040 Fund Retirement 2045 Fund Retirement 2050 Fund Retirement 2055 Fund Retirement 2060 Fund Retirement Income Fund What Do I Need to Do? You do not need to do anything. However, if you would like to request changes to your account, obtain additional information, or find answers to questions, log on to or call Stanford Benefits at (888) Share Class Changes When the market closes (generally 1 p.m. PT on July 31, 2015, the share class for the Vanguard Target Retirement Funds offered through the Plan will change from the Investor (share class type) to Institutional (share class type). As a result, the fund codes, ticker symbols, and expense ratios will change. The new share class will offer you the same investment strategy and risk, but the overall expenses will be lower. See the following chart for details. The transfer of balances will appear as an exchange on your account history and quarterly statement. You may also receive a prospectus as a result of this transaction. Old Share Class Vanguard Target Retirement 2010 Fund Investor Shares Fund Code: Ticker Symbol: VTENX Expense Ratio: 0.16% Vanguard Target Retirement 2015 Fund Investor Shares Fund Code: Ticker Symbol: VTXVX Expense Ratio: 0.16% New Share Class Retirement 2010 Fund Fund Code: Ticker Symbol: VIRTX Retirement 2015 Fund Fund Code:65223 Ticker Symbol: VITVX Vanguard Target Retirement 2020 Fund Investor Shares Fund Code: Ticker Symbol: VTWNX Expense Ratio: 0.16% Retirement 2020 Fund Fund Code: Ticker Symbol: VITWX 2

3 Vanguard Target Retirement 2025 Fund Investor Shares Fund Code: Ticker Symbol: VTTVX Expense Ratio: 0.17% Vanguard Target Retirement 2030 Fund Investor Shares Fund Code: Ticker Symbol: VTHRX Expense Ratio: 0.17% Vanguard Target Retirement 2035 Fund Investor Shares Fund Code: Ticker Symbol: VTTHX Expense Ratio: 0.18% Vanguard Target Retirement 2040 Fund Investor Shares Fund Code: Ticker Symbol: VFORX Expense Ratio: 0.18% Vanguard Target Retirement 2045 Fund Investor Shares Fund Code: Ticker Symbol: VTIVX Expense Ratio: 0.18% Vanguard Target Retirement 2050 Fund Investor Shares Fund Code: Ticker Symbol: VFIFX Expense Ratio: 0.18% Vanguard Target Retirement 2055 Fund Investor Shares Fund Code: Ticker Symbol: VFFVX Expense Ratio: 0.18% Vanguard Target Retirement 2060 Fund Investor Shares Fund Code: Ticker Symbol: VTTSX Expense Ratio: 0.18% Vanguard Target Retirement Income Fund Investor Shares Fund Code: Ticker Symbol: VTINX Expense Ratio: 0.16% Expense ratio as of June 1, Retirement 2025 Fund Fund Code: Ticker Symbol: VRIVX Retirement 2030 Fund Fund Code: Ticker Symbol: VTTWX Retirement 2035 Fund Fund Code: Ticker Symbol: VITFX Retirement 2040 Fund Fund Code: Ticker Symbol: VIRSX Retirement 2045 Fund Fund Code: Ticker Symbol: VITLX Retirement 2050 Fund Fund Code: Ticker Symbol: VTRLX Retirement 2055 Fund Fund Code: Ticker Symbol: VIVLX Retirement 2060 Fund Fund Code: Ticker Symbol: VIVLX Vanguard Target Retirement Income Fund Investor Shares Fund Code: Ticker Symbol: VITRX What Do I Need to Do? You do not need to do anything. However, if you would like to request changes to your account, obtain additional information, or find answers to questions, log on to or call contact Stanford Benefits at (888)

4 Stanford University Default Fund If you have not already made an investment election decision, we encourage you to review the investment options available to you. However, if no elections are made, Stanford has directed Fidelity/TIAA-CREF to invest your future contributions in a Retirement Fund based on your current age and assuming a retirement age of 65. Simply find your date of birth range in the following chart to determine which Retirement Fund your contributions will be directed to. Date of Birth 01/01/ /31/ /01/ /31/ /01/ /31/ /01/ /31/ /01/ /31/ /01/ /31/ /01/ /31/ /01/ /31/ /01/ /31/ /01/ /31/ /01/ /31/1992 Retirement Fund Retirement Income Fund Retirement 2010 Fund Retirement 2015 Fund Retirement 2020 Fund Retirement 2025 Fund Retirement 2030 Fund Retirement 2035 Fund Retirement 2040 Fund Retirement 2045 Fund Retirement 2050 Fund Retirement 2055 Fund Retirement Date Range Retired before /01/ /31/2099 Date of birth ranges were selected by your Plan Sponsor. Retirement 2060 Fund 2058 and later What Do I Need to Do? If you do not want future contributions to default into the investment options shown, or if you wish to change how your current balance(s) are invested, please log on to or call Stanford Benefits at (888) As a reminder, if you have already made an investment election for your contributions, the previous default schedule does not apply. We Are Here to Help Stanford University is committed to offering you a range of investment options. While selecting an appropriate mix of investments might seem challenging, you have access to resources that can help make it easier. Visit or call (888) to schedule a one-on-one consultation where you work. 4

5 Investment Option Descriptions Retirement 2010 Fund VRS Code: Ticker: VIRTX designed for investors planning to retire and leave the workforce in or within a few years of 2010 (the target year). Its asset allocation will become more conservative over time, meaning that the percentage of assets allocated to stocks will decrease while the percentage of assets allocated to bonds and other fixed income investments will increase. Risk: Target date funds are designed for investors expecting to retire around the year indicated in each 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. Retirement 2015 Fund VRS Code: Ticker: VITVX designed for investors planning to retire and leave the workforce in or within a few years of 2015 (the target 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. 5

6 Retirement 2020 Fund VRS Code: Ticker: VITWX designed for investors planning to retire and leave the workforce in or within a few years of 2020 (the target Retirement 2025 Fund VRS Code: Ticker: VRIVX designed for investors planning to retire and leave the workforce in or within a few years of 2025 (the target 6

7 Retirement 2030 Fund VRS Code: Ticker: VTTWX designed for investors planning to retire and leave the workforce in or within a few years of 2030 (the target Retirement 2035 Fund VRS Code: Ticker: VITFX designed for investors planning to retire and leave the workforce in or within a few years of 2035 (the target 7

8 Retirement 2040 Fund VRS Code: Ticker: VIRSX designed for investors planning to retire and leave the workforce in or within a few years of 2040 (the target Retirement 2045 Fund VRS Code: Ticker: VITLX designed for investors planning to retire and leave the workforce in or within a few years of 2045 (the target 8

9 Retirement 2050 Fund VRS Code: Ticker: VTRLX designed for investors planning to retire and leave the workforce in or within a few years of 2050 (the target Retirement 2055 Fund VRS Code: Ticker: VIVLX designed for investors planning to retire and leave the workforce in or within a few years of 2055 (the target 9

10 Retirement 2060 Fund VRS Code: Ticker: VILVX designed for investors planning to retire and leave the workforce in or within a few years of 2060 (the target Retirement Income Fund VRS Code: Ticker: VITRX Objective: The investment seeks to provide current income and some capital appreciation. designed for investors currently in retirement. Its indirect bond holdings are a diversified mix of short-, intermediate-, and long-term U.S. government, U.S. agency, and investment-grade U.S. corporate bonds; inflation-protected public obligations issued by the U.S. Treasury; mortgage-backed and asset-backed securities; and government, agency, corporate, and securitized investment-grade foreign bonds issued in currencies other than the U.S. dollar. Risk: The fund is subject to the volatility of the financial markets, including that of equity and fixed income investments. Fixed income investments carry 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 longer-term securities.) Principal invested is not guaranteed at any time, including at or after retirement. Additional risk information for this product may be found in the prospectus or other product materials, if 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. option and looking primarily for the potential for income and, secondarily, for share-price appreciation. Before investing in any investment option, consider the investment objectives, risks, charges, and 10

11 expenses. Contact Fidelity for a mutual fund or variable annuity prospectus or, if available, a summary prospectus. For information on fixed annuities, contact Fidelity to request a fact sheet. Read them carefully. Keep in mind that investing involves risk. The value of your investment will fluctuate over time and you may gain or lose money. For a mutual fund, the expense ratio is the total annual fund or class operating expenses (before waivers or reimbursements) paid by the fund and stated as a percentage of the fund's total net assets. Expense ratios change periodically and are drawn from the fund s prospectus. For more detailed fee information, see the fund prospectus or annual or semiannual reports. Guidance provided is educational. 11

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