Investment Options Guide for the Partners HealthCare Retirement Savings Plans
It s a great time to be involved in your Partners HealthCare Retirement Savings Plan. We encourage you to use this guide as a resource to help you make the best investment decisions for your future. Table of Contents Welcome to your retirement savings plan! 3 Retirement Savings Plan Overview 4 If You Have Questions 5 How to enroll 6 STEP 1: Choosing your contribution type and amount 6 Which type of contribution is right for you? How much should you contribute from each paycheck? Designating your contribution type and amount STEP 2: Choosing your investments 9 Tier 1: Easy Choice -- Vanguard Target Retirement Date Funds Tier 2: Guided Choice -- Mutual Funds Tier 3: Open Choice -- Fidelity BrokerageLink Account Tier 4: Annuity Choice TIAA Funds Making your investment fund elections in Fidelity NetBenefits STEP 3: Designating your beneficiaries 12 A note about fees 13 Frequently asked questions 14 Investment option descriptions 15 2
Welcome to Your Retirement Savings Plan! It is important to think about your total sources of income at retirement. Your income when you retire is a function of how long your time frame is for saving, as well as how much you save, in addition to other sources of income. Retirement income may come from three major areas: employer-sponsored plans from your entire working career, Social Security, and personal savings. While it is important to begin early to save for your own retirement, it is also just as important to know how to save. Studies indicate that proper asset allocations made early on are at least as important as when you start to save for retirement. It is with these thoughts in mind that the lineup design, utilizing the Vanguard Target Retirement Date Funds as the automatic fund selection, was selected for your retirement savings plan. These types of funds have become the industry standard across the retirement plans of the nation s leading employers. You will find the offerings in this investment lineup to be plentiful, but not overwhelming. They include selections from diverse funds, annuities, and the age-specific Vanguard Target Retirement Date Funds. If you enroll and do not select an investment fund option, the automatic selection of your Target Retirement Date Fund will ensure that you are enrolled in an appropriate asset allocation specific to your projected retirement date. We hope the guide will be a good tool to assist you in thinking about your financial security at retirement. 3
Retirement Savings Plans Overview Here are a few things you should know about the plans: The Partners HealthCare Retirement Savings Plans are Defined Contribution plans. A Defined Contribution plan is a plan where an employee can elect to make contributions from his or her paycheck to a retirement savings account set up by his or her employer. o o In most cases, your Defined Contribution Plan is a 403(b) plan, otherwise known as a Tax-Sheltered Annuity (TSA). These plans are offered by not-for-profit organizations such as hospitals. Some Partners HealthCare organizations offer a 401(k) Defined Contribution plan. While this differs slightly from a 403(b) plan, all of the information in this guide applies equally to your plan. Throughout this guide, we will refer to your plan as a retirement savings plan. This guide provides an overview of your retirement savings plan investment options. For more details on your employer-paid retirement plans, see your benefits website. Participation in your retirement savings plan is voluntary. It is your choice whether to contribute to your retirement savings plan. However, we strongly encourage you to take advantage of this effortless way to set aside the money you will need when you retire. If you choose to participate, the plan will automatically take contributions from each paycheck and direct them to the investments you have chosen. It is an easy way to save toward your future! Partners HealthCare offers a four-tier investment structure for your retirement savings. You can choose from Vanguard Retirement Date Funds that rebalance automatically as the target date in each fund s name approaches; best in class pre-screened mutual funds; a brokerage window with more than 350 investment companies participating; or TIAA annuities that offer you the assurance of a lifetime income in retirement. You pick whatever options work best for you, based on your desired level of involvement. Fidelity Investments provides administrative services for your retirement savings fund lineup. You can use Fidelity s NetBenefits online system to easily update your investment funds (other than TIAA annuities), and to name your retirement savings plan beneficiaries. Complete directions for enrolling in your retirement savings plan and investments are included in this guide. Please refer to the websites listed on page 12 to designate your beneficiaries. 4
If you have questions You can easily find answers through the following resources: Fidelity Investments Phone: To ask a question or schedule an individual session with a Fidelity Workplace Planning and Guidance Consultant, call the Partners HealthCare Savings Plan Service Center at Fidelity Investments at 1-855-999-1PHS (1747). Please bring your latest Fidelity statement (if you have one) to consultant appointments. Online: You can also schedule an appointment with a consultant, or view more information about your plan options, at http://www.netbenefits.com/partners. TIAA (annuities only) Phone: Call 1-800-842-2776 to ask a question. To schedule an on-site individual session with a TIAA representative, call 617-788-5906. Online: You can also find information about annuities or scheduling an appointment with TIAA at http://www.tiaa.org. The Partners Benefits Office As always, your Benefits Office is here to help with your retirement savings questions. Phone: 617-726-8133 Email: ibenefits@partners.org BWH Monthly-paid Professional Staff, Fellows, and Residents Please contact the BWH Professional Staff Benefits Office. Phone: 617-713-2259 Email: bwhprofstaffbene@partners.org BWPO Monthly-paid Professional Staff Please contact the BWPO Professional Staff Benefits Office. Phone: 617-582-1117 Email: BWPOprofstaff@partners.org MGH Monthly-paid Professional Staff, Fellows, and Residents Please contact the MGH Professional Staff Benefits Office. Last names A-G Last names H-O Last names P-Z Susan Frain Linda Gulla Virginia Rosales, CEBS 617-726-9264 617-726-9266 617-724-9356 sfrain@partners.org lgulla@partners.org vrosales@partners.org Partners Private Service Employees Please contact your local Human Resources office 5
How to Enroll To participate in the Partners HealthCare retirement savings plan: 1. Choose your contribution type and amount in PeopleSoft Self Service, where available, or through your local Human Resources Office. 2. Choose your investments in Fidelity NetBenefits. 3. Designate your retirement savings plan beneficiaries through Fidelity s or TIAA s websites. The following sections explain how to complete these steps. Step One: Choosing Your Contribution Type and Amount You will need to indicate the type of contribution you want to make from each paycheck, and the amount, in the PeopleSoft online system. Before you log on to PeopleSoft to make your selections, consider: 1. What type of contribution do you want to make? Partners HealthCare offers two types of contributions for your retirement savings plan: traditional (pre-tax) and Roth (after-tax). They differ by whether your contributions are taken from each paycheck before taxes are deducted, or afterward: Traditional (pre-tax) contributions are deducted from each paycheck before taxes are deducted. Because you use pre-tax dollars to fund your investments, you reduce the amount of federal and state income taxes you pay now. Balances and their investment earnings grow on a tax-deferred basis, and are taxable later when you take distributions. Roth contributions are deducted from the after-tax dollars in your paycheck -- so your weekly take-home pay will be less than with traditional contributions if you choose this option. However, while you pay income taxes now, which reduces your net pay, you will pay no taxes later when you receive qualified distributions from your retirements savings plan. You can select traditional (pre-tax) contributions, Roth (after-tax) contributions, or both, and may change your contribution type at any time. Which type of contribution is right for you? In general. If you expect to be in a lower tax bracket in retirement than now, a traditional (pre-tax) contribution may be the better choice. If you expect to be in the same tax bracket in retirement as now, a traditional (pre-tax) contribution and a Roth (after-tax) contribution are about the same from a tax perspective. If you expect to be in a higher tax bracket in retirement than now, a Roth contribution may make more sense, as you will not pay taxes on qualified distributions of earnings. 6
Comparing your retirement savings plan contribution options Who is eligible? Are contributions taxable when made? Are contributions taxable when distributed? Are investment earnings taxable when distributed? Are there limits to how much I can contribute? How do I contribute funds? When can I take a distribution from my account? When does the IRS 10% Penalty Tax apply? Can I get a loan? Can I roll over my 403(b)/401(k) plan account funds? Traditional (pre-tax) Contribution No Yes Yes All employees can participate. Yes No Roth (after-tax)contribution No, if a qualified distribution is made at least five years after your first contributions, AND attainment of age 59 1/2, disability, or death. Federal regulations limit the amount you can contribute to retirement savings plans each year. These cost-of-living dollar limits are adjusted annually and are communicated each year during Open Enrollment following their release by the IRS. Through payroll deduction, either a % of pay or specified $ amount. Attainment of age 59 1/2, disability, death, separation from service. Applies to all distributions prior to age 59 1/2, except for death, disability, or retirement after age 55. Applies to distributions of investment earnings only if prior to age 59 1/2, except for death, disability, or retirement after age 55. Yes. Please contact your retirement savings plan provider (Fidelity or TIAA) for more information. Yes, you can rollover to another Traditional 401(k) or 403(b) retirement savings plan, Traditional IRA, or Roth IRA. Yes, you can rollover to another Roth 401(k) or 403(b) savings plan or Roth IRA only. 2. How much should you contribute from each paycheck? You may contribute a flat amount to your retirement savings plan from each paycheck (for example, $50 each pay period) or a percentage of each paycheck (for example, 10% of your pay each pay period). If you choose to contribute a percentage of each paycheck, as your salary increases, your contribution will also increase automatically. 7
Designating Your Contribution Type and Amount Once you have decided on a contribution type and amount, you will need to enroll in your retirement savings plan: 1. Visit PeopleSoft Self-Service at https://ibridge.partners.org. Log on to PeopleSoft with your Partners username and password. Note: if you work for a Partners HealthCare organization that does not have PeopleSoft, please contact your local Human Resources Office to enroll. 2. Go to: HRMS Production > Main Menu > Self Service > ebenefits > Savings Summary 3. On the Savings Summary screen, click to select your contribution type (traditional and/or Roth). 4. Indicate whether you wish to contribute a percentage or flat amount from each paycheck, and how much you want to contribute per paycheck. 5. Make sure to click Submit when you are done. You are now ready to move on to Step 2, selecting your investment funds, which you will do in Fidelity s NetBenefits online system. Note: Your contributions will be directed to an age appropriate Tier 1 Vanguard Target Retirement Date Fund unless you choose a different investment option in Fidelity NetBenefits. 8
Step 2: Choosing Your Investments Your savings plan has a four-tier investment structure that lets you manage risk by creating a diverse investment portfolio to meet your goals. You simply select the tier, or tiers, of investments you want, based on the level of involvement that feels most comfortable for you. The four investment tiers, along with some details, are listed below. To review additional information, including performance, on the available investment options, please visit http://www.netbenefits.com/partners. Tier 1 Tier 2 Tier 3 Tier 4 Easy Choice Guided Choice Open Choice Annuity Choice Vanguard Target Retirement Date Funds TIER 1: Easy Choice It's automatic! 5 best-in-class mutual funds Fidelity BrokerageLink TIAA Annuities Tier 1 Easy Choice funds may be a good choice if you want a diversified, low-cost retirement portfolio that utilizes the expertise of professional investment managers. The Easy Choice option contains Target Retirement Date Funds managed by Vanguard. Each fund corresponds to a range of target retirement years, as shown in the table below, and automatically rebalances between stocks and bonds to become more conservative as the target date in each fund s name approaches. Many employees may find that this option works best for them. Tier 1 Vanguard Funds serve as the default investment funds for Partners HealthCare s retirement savings plan. If you enroll in the retirement savings plan, but do not select an investment tier or tiers in Fidelity NetBenefits, your future contributions will be invested in the Tier 1: Vanguard Target Retirement Date Fund closest to your retirement date, based on your date of birth and assuming a retirement age of 65 (see table below). You can change to a Vanguard fund for a different retirement year or switch to an entirely different investment tier at any time. INSTITUTIONAL SHARE CLASS FUND TICKER SYMBOL DATE OF BIRTH TARGET RETIREMENT DATE Vanguard Target Retirement Income Fund VITRX Before 1943 Retired before 2008 Vanguard Target Retirement 2010 Fund VIRTX 1/1/1943-12/31/1947 2008 2012 Vanguard Target Retirement 2015 Fund VITVX 1/1/1948-12/31/1952 2013 2017 Vanguard Target Retirement 2020 Fund VITWX 1/1/1953-12/31/1957 2018 2022 Vanguard Target Retirement 2025 Fund VRIVX 1/1/1958-12/31/1962 2023 2027 Vanguard Target Retirement 2030 Fund VTTWX 1/1/1963-12/31/1967 2028 2032 Vanguard Target Retirement 2035 Fund VITFX 1/1/1968-12/31/1972 2033 2037 Vanguard Target Retirement 2040 Fund VIRSX 1/1/1973-12/31/1977 2038-2042 Vanguard Target Retirement 2045 Fund VITLX 1/1/1978-12/31/1982 2043-2047 Vanguard Target Retirement 2050 Fund VTRLX 1/1/1983-12/31/1987 2048-2052 Vanguard Target Retirement 2055 Fund VIVLX 1/1/1988-12/31/1992 2053-2057 Vanguard Target Retirement 2060 Fund VILVX 1993 and later 2058 and later Investments defaulted to a Vanguard Target Retirement Date Fund are based on the participant s current age and the assumption that the participant will retire at age 65, as indicated in the chart above. 9
Tier 2: Guided Choice Five Pre-Screened, Best-in-Class Mutual Funds If you know your investment objectives and want to build a more diversified portfolio, Tier 2 Guided Choice mutual funds may be the best choice for you. Tier 2 funds offer the flexibility to design a diverse portfolio without having to sort through an overwhelming array of fund choices. The funds have been specifically selected for Tier 2 Guided Choice by a Partners Investment Committee, in conjunction with investment consultants, for use by participants who wish to manage their own asset allocations. The funds are professionally managed and monitored on a quarterly basis. Generally, the fund managers select investments with broad mandates, looking for opportunities that may be potentially rewarding. FUND NAME Vanguard Federal Money Market Fund Investor Class PIMCO Global Advantage Strategy Bond Fund Institutional Shares TICKER SYMBOL ASSET CLASS FUND TYPE VMFXX Money Market Short Term PSAIX World Blend Bond GMO Global Asset Allocation Fund R6 GATRX* World Allocation Blended JP Morgan Diversified Real Return Fund R5 JRLRX Inflation Sensitive Blended MFS Global Equity Fund Class R5 MWEMX World Equity Stock *With an inception date of July 31, 2012, GATRX has a fairly short track record. You may want to check out the performance of GMO Global Asset Allocation Fund III (GMWAX) instead, since it s simply a different share class of GATRX, but has a performance track record dating back to June 28, 1996. Participants looking for a specific asset allocation, or looking to complement their total portfolio of investments may be best suited for Tier 2. Refer to the full fund descriptions in the back of this guide for more information. TIER 3: Open Choice Fidelity BrokerageLink Fidelity BrokerageLink combines the convenience of your workplace retirement savings plan with the additional flexibility of a brokerage account. BrokerageLink gives you the widest range of investment choices with hundreds of available mutual funds, and provides you with the opportunity to manage your funds. The plan fiduciary neither evaluates nor monitors the investments available through BrokerageLink. It is your responsibility to ensure that the investments you select are suitable for your situation, including your goals, time horizon, and risk tolerance. Fidelity BrokerageLink provides access to both transaction fee and no transaction fee mutual funds, meaning you may incur additional costs when investing in this tier. An example of this is a $75 trading fee when using transaction fee funds. Please review the Fidelity BrokerageLink Commission Schedule, available online at http://www.netbenefits.com/partners for complete details before choosing this tier. Also refer to the full description in the back of this guide for more information. 10
TIER 4: Annuity Choice TIAA Traditional Annuity CREF Stock Account Variable Annuity TIAA Real Estate Account Variable Annuity An annuity is an amount of money paid to someone yearly, or at another regular interval. Ensuring adequate lifetime income is a primary reason you save for retirement. In fact, the goal of saving for retirement isn t just to build wealth it s to replace the income you were earning when you were working. A low-cost annuity can be a valuable component of a well-diversified retirement portfolio, both before and during retirement. And unlike mutual funds, an annuity offers the opportunity to receive the assurance of a lifetime income in retirement. You have access to three annuity accounts the TIAA Traditional Annuity, the CREF Stock Account and the TIAA Real Estate Account. The Traditional Annuity is a guaranteed annuity that offers a fixed rate of return, while the Stock Account is a variable annuity account whose rate of return will fluctuate with the market and the Real Estate Account is a variable annuity whose rate of return will fluctuate with its underlying real estate investments. Refer to the full fund descriptions in the back of this guide for more information. If you choose to contribute to Tier 4, you will first need to select TIAA as a Retirement Provider through Fidelity NetBenefits by clicking the "Contributions" tab and then "Retirement Providers. Then, you can provide TIAA with your allocation between the three annuity choices, and designate your beneficiary information. Call TIAA at 1-800-842-2776 or go online to http://www.tiaa.org. Making Your Investment Elections in Fidelity NetBenefits If you want to contribute to the Tier 1 Easy Choice Vanguard Target Retirement Date fund that is closest to when you will turn age 65: Do nothing. Your future contributions will be directed to the Tier 1: Easy Choice Vanguard Target Retirement Date Fund closest to when you will turn age 65. Keep in mind: You can change your investment fund choices at any time in the future. Even if you do not take any action with your investment fund choices, please make sure you have current beneficiary information on file with Fidelity. You can do this online through Fidelity NetBenefits. Please see page 12 for instructions on naming your beneficiaries. If you want to contribute to a Vanguard Target Retirement Date fund for a year other than when you will turn age 65, or Tiers 2, 3, and/or 4: You will need to select your investment fund choices in Fidelity NetBenefits. Please see the instructions on page 12. Otherwise, your future contributions will be directed to Tier 1. You can choose to allocate your contributions across tiers and across options within those tiers. If you do, please make sure to carefully review the investment option descriptions found in this guide. 11
To make your investment fund elections: 1. Visit http://www.netbenefits.com/partners, click on the Register link at the top of the page and follow the steps to access your account information. If you have previously registered with Fidelity, use your existing Username and Password to login. 2. Once you are logged into Fidelity NetBenefits, click your plan s name on the Home page. 3. To select your investment options, click the "Investments" tab and then "Change Investments". This will allow you to choose a Tier One: Easy Choice or Tier Two: Guided Choice Option. 4. If you would like to use Tier Three: Open Choice (Fidelity BrokerageLink ): Select BrokerageLink under the "Investments" tab. Follow the steps to review information on the option and open a BrokerageLink account if you would like. 5. If you would like to invest in Tier Four: Annuity Choice, you should select the "Contributions" tab and then "Retirement Providers". Follow the steps to direct some or all of your contributions to TIAA. After reviewing and confirming your vendor elections, you should contact TIAA at 1-800-842-2776 or http://www.tiaa.org to choose among the three annuities offered. You have now completed the enrollment and investment fund selection process for your retirement savings plan! Step 3: Designating Your Beneficiaries Regardless of which funds you choose, it is important to name one or more beneficiaries to receive your account in the event that you should die. To name beneficiaries for your Fidelity Tier 1, 2, or 3 funds: Log in to your account at http://www.netbenefits.com/partners. Click Profile at the top of the screen, then click Beneficiaries and follow the instructions. To name beneficiaries for your Tier 4 TIAA Annuity Choice funds: Visit http://www.tiaa.org to designate beneficiaries for your annuities. 12
A Note about Fees Participants in Partners retirement savings plans are subject to a quarterly administration fee. The fee is in place to cover typical administrative expenses and participants having the option of investing in the default, Vanguard Target Retirement Funds, which are lower-cost funds. Once you have completed twelve months of employment, the administrative fee of $11.50 will be deducted from your account balance following the end of each calendar quarter (total of $46 each year). Additionally, participants who require special transaction support may be assessed a flat fee for each transaction. Please refer to the chart below for information on individual fees for specific transactions. Individual Fees and Expenses New Loan Administration Fee - $50 per loan for setup, and $0 per loan, per year, for ongoing administrative services. In-service Withdrawals by Phone/Fidelity NetBenefits Fee - $25 for each in-service, non-hardship withdrawal. For investments held on Fidelity recordkeeping platform only. Minimum Required Distribution (MRD) Service Fee - $25 per Minimum Required Distribution. Fidelity will monitor qualifying participants who have reached age 70 ½, helping to calculate their required distribution, and mail checks to the participants on an annual basis. For investments held on Fidelity recordkeeping platform only. 13
Frequently Asked Questions Here are some common retirement savings questions the Partners Benefits Office receives from employees. Am I locked into the choices I make? No. You may change the amount you contribute to your retirement savings account, as well as the funds you invest in, at any time throughout the year. Log on to PeopleSoft at https://ibridge.partners.org to change your contribution type or amount. Log on to Fidelity NetBenefits at http://netbenefits.com/partners to change your investment fund lineup choices. Can I invest in more than one of the tiers? Absolutely. We encourage employees who want to take an active role in designing their retirement portfolio to utilize any of the tiers to design the retirement investment portfolio that's right for them. I don't know anything about investing and don't want to be bothered with rebalancing my retirement portfolio, but I know I should be contributing to a retirement savings plan. What's the best choice for someone like me? The best choice for someone in your situation is often Tier 1, Easy Choice - which is made up of the Vanguard Target Retirement Date Funds. You never have to rebalance your portfolio; the funds automatically rebalance and become more conservative as the target date in each fund s name approaches. Can I choose a Vanguard Target Retirement Date Fund other than the one closest to when I turn age 65? Yes. You can choose any of the target date funds that are appropriate for your particular situation. For example, you may not be planning to retire until age 70, so you may want to select the fund closest to the date when you will turn 70. Regardless of which fund year you select, your funds will be available on the date when you actually retire. Tier 4 is called the Annuity Choice option. What's the difference between an annuity and a mutual fund? An annuity offers you the option of converting your balance at retirement to a monthly lifetime income. You don't have to select that option, but it is available with an annuity. You can do the same thing with a mutual fund, but you would need to purchase an annuity - it's not an option that's built in to the product. The TIAA Traditional Annuity is available in Tier 4 (Annuity Choice) and provides a guaranteed minimum interest rate of 3%. Most financial planners would recommend that you don't invest 100% of your retirement portfolio in a fixed account, like the TIAA Traditional Annuity, since it doesn't provide growth over the long term. Many TIAA participants pair the TIAA Traditional Annuity with the CREF Stock Account for an excellent combination of stability (Traditional Annuity) and growth (CREF Stock). I m a new employee. How do I roll over funds from a previous employer? Call the Partners HealthCare Savings Plan Service Center at Fidelity Investments at 1-855-999-1PHS (1747) for details on how to roll over your funds. Please note: You might also be required to fill out forms from your previous employer in order to roll over the money; contact your previous employer to check. 14
Investment Option Descriptions TIER 1: Easy Choice Vanguard Institutional Target Retirement Income Fund Institutional Shares Objective: The investment seeks to provide current income and some capital appreciation. currently in retirement. As of September 30, 2015, the fund's asset allocation among the underlying funds was as follows: Vanguard Total Bond Market II Index Fund 37.2%; Vanguard Total Stock Market Index Fund 18.1%; Vanguard Short-Term Inflation-Protected Securities Index Fund 16.8%; Vanguard Total International Bond Index Fund 15.9%; Vanguard Total International Stock Index Fund 12.0%. 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 available. 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. Someone who is seeking a diversified mix of stocks, bonds, and short-term investments in one investment option and looking primarily for the potential for income and, secondarily, for share-price appreciation. Vanguard Institutional Target Retirement 2010 Fund Institutional Shares Objective: The investment seeks to provide capital appreciation and current income consistent with its current asset allocation. planning to retire and leave the workforce in or within a few years of 2010. As of September 30, 2015, its asset allocation among the underlying funds was as follows: Vanguard Total Bond Market II Index Fund 35.5%; Vanguard Total Stock Market Index Fund 20.7%; Vanguard Total International Stock Index Fund 13.7%; Vanguard Total International Bond Index Fund 15.2%; Vanguard Short-Term Inflation-Protected Securities Index Fund 14.9%. Risk: The target date funds are designed for investors expecting to retire around the year indicated in each fund's name. The funds are managed to gradually become more conservative over time as they approach their target date. The investment risk of each target date fund changes over time as its asset allocation changes. They are subject to the volatility of the financial markets, including that of equity and fixed income investments in the U.S. and abroad, and may be subject to risks associated with investing in high-yield, small-cap, and foreign securities. Principal invested is not guaranteed at any time, including at or after their target dates. Additional risk information for this product may be found in the prospectus or other product materials, if available. 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. Someone who is seeking a diversified mix of stocks, bonds, and short-term investments in one investment option or who does not feel comfortable making asset allocation choices over time. Vanguard Institutional Target Retirement 2015 Fund Institutional Shares Objective: The investment seeks to provide capital appreciation and current income consistent with its current asset allocation. planning to retire and leave the workforce in or within a few years of 2015. As of September 30, 2015, its asset allocation among the underlying funds was as follows: Vanguard Total Stock Market Index Fund 29.3%; Vanguard Total Bond Market II Index Fund 29.8%; Vanguard Total International Stock Index Fund 19.5%; Vanguard Total International Bond Index Fund 12.8%; Vanguard Short-Term Inflation-Protected Securities Index Fund 8.6%. Risk: The target date funds are designed for investors expecting to retire around the year indicated in each fund's name. The funds are managed to gradually become more conservative over time as they approach their target date. The investment risk of each target date fund changes over time as its asset allocation changes. They are subject to the volatility of the financial markets, including that of equity and fixed income investments in the U.S. and abroad, and may be subject to risks associated with investing in high-yield, small-cap, and foreign securities. Principal invested is not guaranteed at any time, including at or after their target dates. Additional risk information for this product may be found in the prospectus or other product materials, if available. 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. Someone who is seeking a diversified mix of stocks, bonds, and short-term investments in one investment option or who does not feel comfortable making asset allocation choices over time. 15
Vanguard Institutional Target Retirement 2020 Fund Institutional Shares Objective: The investment seeks to provide capital appreciation and current income consistent with its current asset allocation. planning to retire and leave the workforce in or within a few years of 2020 (the target year). As of September 30, 2015, the fund's asset allocation among the underlying funds was as follows: Vanguard Total Stock Market Index Fund 35.5%; Vanguard Total Bond Market II Index Fund 28.1%; Vanguard Total International Stock Index Fund 23.6%; Vanguard Total International Bond Index Fund 12.0%. Risk: The target date funds are designed for investors expecting to retire around the year indicated in each fund's name. The funds are managed to gradually become more conservative over time as they approach their target date. The investment risk of each target date fund changes over time as its asset allocation changes. They are subject to the volatility of the financial markets, including that of equity and fixed income investments in the U.S. and abroad, and may be subject to risks associated with investing in high-yield, small-cap, and foreign securities. Principal invested is not guaranteed at any time, including at or after their target dates. Additional risk information for this product may be found in the prospectus or other product materials, if available. Someone who is seeking an investment option that gradually becomes more conservative over time and who is willing to accept the volatility of the markets. Someone who is seeking a diversified mix of stocks, bonds, and short-term investments in one investment option or who does not feel comfortable making asset allocation choices over time. Vanguard Institutional Target Retirement 2025 Fund Institutional Shares Category: Lifecycle Objective: The investment seeks to provide capital appreciation and current income consistent with its current asset allocation. planning to retire and leave the workforce in or within a few years of 2025 (the target year). As of September 30, 2015, the fund's asset allocation among the underlying funds was as follows: Vanguard Total Stock Market Index Fund 40.2%; Vanguard Total International Stock Index Fund 26.7%; Vanguard Total Bond Market II Index Fund 23.2%; Vanguard Total International Bond Index Fund 9.9%. Risk: The target date funds are designed for investors expecting to retire around the year indicated in each fund's name. The funds are managed to gradually become more conservative over time as they approach their target date. The investment risk of each target date fund changes over time as its asset allocation changes. They are subject to the volatility of the financial markets, including that of equity and fixed income investments in the U.S. and abroad, and may be subject to risks associated with investing in high-yield, small-cap, and foreign securities. Principal invested is not guaranteed at any time, including at or after their target dates. Additional risk information for this product may be found in the prospectus or other product materials, if available. Someone who is seeking an investment option that gradually becomes more conservative over time and who is willing to accept the volatility of the markets. Someone who is seeking a diversified mix of stocks, bonds, and short-term investments in one investment option or who does not feel comfortable making asset allocation choices over time. Vanguard Institutional Target Retirement 2030 Fund Institutional Shares Objective: The investment seeks to provide capital appreciation and current income consistent with its current asset allocation. planning to retire and leave the workforce in or within a few years of 2030 (the target year). As of September 30, 2015, the fund's asset allocation among the underlying funds was as follows: Vanguard Total Stock Market Index Fund 44.6%; Vanguard Total International Stock Index Fund 29.7%; Vanguard Total Bond Market II Index Fund 18.0%; Vanguard Total International Bond Index Fund 7.7%. Risk: The target date funds are designed for investors expecting to retire around the year indicated in each fund's name. The funds are managed to gradually become more conservative over time as they approach their target date. The investment risk of each target date fund changes over time as its asset allocation changes. They are subject to the volatility of the financial markets, including that of equity and fixed income investments in the U.S. and abroad, and may be subject to risks associated with investing in high-yield, small-cap, and foreign securities. Principal invested is not guaranteed at any time, including at or after their target dates. Additional risk information for this product may be found in the prospectus or other product materials, if available. Someone who is seeking an investment option that gradually becomes more conservative over time and who is willing to accept the volatility of the markets. Someone who is seeking a diversified mix of stocks, bonds, and short-term investments in one investment option or who does not feel comfortable making asset allocation choices over time. 16
Vanguard Institutional Target Retirement 2035 Fund Institutional Shares Objective: The investment seeks to provide capital appreciation and current income consistent with its current asset allocation. planning to retire and leave the workforce in or within a few years of 2035 (the target year). As of September 30, 2015, the fund's asset allocation among the underlying funds was as follows: Vanguard Total Stock Market Index Fund 49.2%; Vanguard Total International Stock Index Fund 32.7%; Vanguard Total Bond Market II Index Fund 12.7%; Vanguard Total International Bond Index Fund 5.4%. Risk: The target date funds are designed for investors expecting to retire around the year indicated in each fund's name. The funds are managed to gradually become more conservative over time as they approach their target date. The investment risk of each target date fund changes over time as its asset allocation changes. They are subject to the volatility of the financial markets, including that of equity and fixed income investments in the U.S. and abroad, and may be subject to risks associated with investing in high-yield, small-cap, and foreign securities. Principal invested is not guaranteed at any time, including at or after their target dates. Additional risk information for this product may be found in the prospectus or other product materials, if available. Someone who is seeking an investment option that gradually becomes more conservative over time and who is willing to accept the volatility of the markets. Someone who is seeking a diversified mix of stocks, bonds, and short-term investments in one investment option or who does not feel comfortable making asset allocation choices over time. Vanguard Institutional Target Retirement 2040 Fund Institutional Shares Objective: The investment seeks to provide capital appreciation and current income consistent with its current asset allocation. planning to retire and leave the workforce in or within a few years of 2040 (the target year). As of September 30, 2015, the fund's asset allocation among the underlying funds was as follows: Vanguard Total Stock Market Index Fund 53.6%; Vanguard Total International Stock Index Fund 35.7%; Vanguard Total Bond Market II Index Fund 7.5%; Vanguard Total International Bond Index Fund 3.2%. Risk: The target date funds are designed for investors expecting to retire around the year indicated in each fund's name. The funds are managed to gradually become more conservative over time as they approach their target date. The investment risk of each target date fund changes over time as its asset allocation changes. They are subject to the volatility of the financial markets, including that of equity and fixed income investments in the U.S. and abroad, and may be subject to risks associated with investing in high-yield, small-cap, and foreign securities. Principal invested is not guaranteed at any time, including at or after their target dates. Additional risk information for this product may be found in the prospectus or other product materials, if available. Someone who is seeking an investment option that gradually becomes more conservative over time and who is willing to accept the volatility of the markets. Someone who is seeking a diversified mix of stocks, bonds, and short-term investments in one investment option or who does not feel comfortable making asset allocation choices over time. Vanguard Institutional Target Retirement 2045 Fund Institutional Shares Objective: The investment seeks to provide capital appreciation and current income consistent with its current asset allocation. planning to retire and leave the workforce in or within a few years of 2045 (the target year). As of September 30, 2015, the fund's asset allocation among the underlying funds was as follows: Vanguard Total Stock Market Index Fund 54.0%; Vanguard Total International Stock Index Fund 36.0%; Vanguard Total Bond Market II Index Fund 7.0%; Vanguard Total International Bond Index Fund 3.0%. Risk: The target date funds are designed for investors expecting to retire around the year indicated in each fund's name. The funds are managed to gradually become more conservative over time as they approach their target date. The investment risk of each target date fund changes over time as its asset allocation changes. They are subject to the volatility of the financial markets, including that of equity and fixed income investments in the U.S. and abroad, and may be subject to risks associated with investing in high-yield, small-cap, and foreign securities. Principal invested is not guaranteed at any time, including at or after their target dates. Additional risk information for this product may be found in the prospectus or other product materials, if available. Someone who is seeking an investment option that gradually becomes more conservative over time and who is willing to accept the volatility of the markets. Someone who is seeking a diversified mix of stocks, bonds, and short-term investments in one investment option or who does not feel comfortable making asset allocation choices over time. 17
Vanguard Institutional Target Retirement 2050 Fund Institutional Shares Category: Lifecycle Objective: The investment seeks to provide capital appreciation and current income consistent with its current asset allocation. planning to retire and leave the workforce in or within a few years of 2050 (the target year). As of September 30, 2015, the fund's asset allocation among the underlying funds was as follows: Vanguard Total Stock Market Index Fund 54.0%; Vanguard Total International Stock Index Fund 36.0%; Vanguard Total Bond Market II Index Fund 7.0%; Vanguard Total International Bond Index Fund 3.0%. Risk: The target date funds are designed for investors expecting to retire around the year indicated in each fund's name. The funds are managed to gradually become more conservative over time as they approach their target date. The investment risk of each target date fund changes over time as its asset allocation changes. They are subject to the volatility of the financial markets, including that of equity and fixed income investments in the U.S. and abroad, and may be subject to risks associated with investing in high-yield, small-cap, and foreign securities. Principal invested is not guaranteed at any time, including at or after their target dates. Additional risk information for this product may be found in the prospectus or other product materials, if available. Someone who is seeking an investment option that gradually becomes more conservative over time and who is willing to accept the volatility of the markets. Someone who is seeking a diversified mix of stocks, bonds, and short-term investments in one investment option or who does not feel comfortable making asset allocation choices over time. Vanguard Institutional Target Retirement 2055 Fund Institutional Shares Objective: The investment seeks to provide capital appreciation and current income consistent with its current asset allocation. planning to retire and leave the workforce in or within a few years of 2055 (the target year). As of September 30, 2015, the fund's asset allocation among the underlying funds was as follows: Vanguard Total Stock Market Index Fund 54.0%; Vanguard Total International Stock Index Fund 36.0%; Vanguard Total Bond Market II Index Fund 7.0%; Vanguard Total International Bond Index Fund 3.0%. Risk: The target date funds are designed for investors expecting to retire around the year indicated in each fund's name. The funds are managed to gradually become more conservative over time as they approach their target date. The investment risk of each target date fund changes over time as its asset allocation changes. They are subject to the volatility of the financial markets, including that of equity and fixed income investments in the U.S. and abroad, and may be subject to risks associated with investing in high-yield, small-cap, and foreign securities. Principal invested is not guaranteed at any time, including at or after their target dates. Additional risk information for this product may be found in the prospectus or other product materials, if available. Someone who is seeking an investment option that gradually becomes more conservative over time and who is willing to accept the volatility of the markets. Someone who is seeking a diversified mix of stocks, bonds, and short-term investments in one investment option or who does not feel comfortable making asset allocation choices over time. Vanguard Institutional Target Retirement 2060 Fund Institutional Shares Objective: The investment seeks to provide capital appreciation and current income consistent with its current asset allocation. planning to retire and leave the workforce in or within a few years of 2060 (the target year). As of September 30, 2015, the fund's asset allocation among the underlying funds was as follows: Vanguard Total Stock Market Index Fund 54.0%; Vanguard Total International Stock Index Fund 36.0%; Vanguard Total Bond Market II Index Fund 7.0%; Vanguard Total International Bond Index Fund 3.0%. Risk: The target date funds are designed for investors expecting to retire around the year indicated in each fund's name. The funds are managed to gradually become more conservative over time as they approach their target date. The investment risk of each target date fund changes over time as its asset allocation changes. They are subject to the volatility of the financial markets, including that of equity and fixed income investments in the U.S. and abroad, and may be subject to risks associated with investing in high-yield, small-cap, and foreign securities. Principal invested is not guaranteed at any time, including at or after their target dates. Additional risk information for this product may be found in the prospectus or other product materials, if available. Someone who is seeking an investment option that gradually becomes more conservative over time and who is willing to accept the volatility of the markets. Someone who is seeking a diversified mix of stocks, bonds, and short-term investments in one investment option or who does not feel comfortable making asset allocation choices over time. These descriptions are only intended to provide a brief overview of the mutual funds. Read the fund's prospectus for more detailed information about the fund. 18
TIER 2: Guided Choice GMO Global Asset Allocation Series Fund Class R6 Objective: The investment seeks total return greater than that of its benchmark, the GMO Global Asset Allocation Index, an internally maintained index computed by GMO, consisting of 65% MSCI ACWI and 35% Barclays U.S. Aggregate Index. Strategy: The fund invests substantially all of its assets in GMO Global Asset Allocation Fund ("GAAF"), a series of GMO Trust. Under normal circumstances, GMO intends to invest not more than 85% of the fund's assets in the GMO Equity Funds. Risk: Foreign securities are subject to interest-rate, currency-exchange-rate, economic, and political risks, all of which may be magnified in emerging markets. Stock markets are volatile and can decline significantly in response to adverse issuer, political, regulatory, market, economic or other developments. These risks may be magnified in foreign markets. In general the bond market is volatile, and fixed income securities carry interest rate risk. (As interest rates rise, bond prices usually fall, and vice versa. This effect is usually more pronounced for longer-term securities.) Fixed income securities also carry inflation risk and credit and default risks for both issuers and counterparties. Additional risk information for this product may be found in the prospectus or other product materials, if available. Someone who is seeking to invest in a fund that invests in both domestic and international stocks and bonds. Someone who is seeking the potential both for income and for long-term share-price appreciation and who is willing to accept the potentially greater volatility of the foreign bond and stock markets. Footnotes: A mutual fund registered under GMO Series Trust, and managed by Grantham, Mayo, Van Otterloo & Co., LLC. This description is only intended to provide a brief overview of the fund. Read the fund's prospectus for more detailed information about the fund. The GMO Global Asset Allocation Index is an internally maintained composite benchmark computed by the Manager, comprised of (i) 48.75% S&P 500 Index, 16.25% MSCI ACWI ex-u.s. Index (MSCI Standard Index Series), and 35% Barclays U.S. Aggregate Index from 6/30/2002 through 3/31/2007 and (ii) 65% MSCI ACWI (All Country World Index) Index (MSCI Standard Index Series) and 35% Barclays U.S. Aggregate Index thereafter. MSCI data may not be reproduced or used for any other purpose. MSCI provides no warranties, has not prepared or approved this report, and has no liability hereunder. The Barclays U.S. Aggregate Bond Index is an unmanaged market value-weighted index for U.S. dollar denominated investment-grade fixedrate debt issues, including government, corporate, asset-backed, and mortgage-backed securities with maturities of at least one year. The MSCI ACWI Index is a free float-adjusted market capitalization index that is designed to measure the equity market performance of developed and emerging markets. The MSCI ACWI consists of 45 country indices comprising 24 developed and 21 emerging market country indices. It is not possible to invest directly in the index. JPMorgan Diversified Real Return Fund Class R5 Objective: The investment seeks to maximize long-term real return. Strategy: The fund is a fund of funds that seeks real return by allocating its assets across a combination of inflation sensitive asset classes. "Real return" means the return in excess of the actual rate of inflation. It invests in other J.P. Morgan Funds and, to a lesser extent, in exchange traded funds (ETFs) (collectively with the J.P. Morgan Funds, the "underlying funds") and exchange traded notes (ETNs). Risk: In general the bond market is volatile, and fixed income securities carry interest rate risk. (As interest rates rise, bond prices usually fall, and vice versa. This effect is usually more pronounced for longer-term securities.) Fixed income securities also carry inflation risk and credit and default risks for both issuers and counterparties. Unlike individual bonds, most bond funds do not have a maturity date, so avoiding losses caused by price volatility by holding them until maturity is not possible. Stock markets are volatile and can decline significantly in response to adverse issuer, political, regulatory, market, economic or other developments. These risks may be magnified in foreign markets. Additional risk information for this product may be found in the prospectus or other product materials, if available. Someone who is seeking to invest in a fund that invests in both stocks and bonds. Someone who is seeking the potential both for income and for long-term share-price appreciation and who is willing to accept the volatility of the bond and stock markets. Footnotes: A mutual fund registered under JPMorgan Trust I, and managed by J.P. Morgan Investment Management Inc. This description is only intended to provide a brief overview of the fund. Read the fund's prospectus for more detailed information about the fund. 19
MFS Global Equity Fund Class R5 Objective: The investment seeks capital appreciation. Strategy: The fund normally invests at least 80% of its net assets in equity securities. Equity securities include common stocks, preferred stocks, securities convertible into stocks, equity interests in real estate investment trusts (REITs), and depositary receipts for such securities. It may invest its assets in the stocks of companies it believes to have above average earnings growth potential compared to other companies (growth companies), in the stocks of companies it believes are undervalued compared to their perceived worth (value companies), or in a combination of growth and value companies. Risk: Foreign securities are subject to interest-rate, currency-exchange-rate, economic, and political risks, all of which may be magnified in emerging markets. Stock markets are volatile and can decline significantly in response to adverse issuer, political, regulatory, market, economic or other developments. Additional risk information for this product may be found in the prospectus or other product materials, if available. Someone who is seeking an investment that invests in both domestic and international markets. Someone who is willing to accept the volatility of the markets and the generally higher degree of risk associated with international investments. Footnotes: A mutual fund registered under MFS Series Trust VI, and managed by Massachusetts Financial Services Co. This description is only intended to provide a brief overview of the fund. Read the fund's prospectus for more detailed information about the fund. PIMCO Global Advantage Strategy Bond Fund Institutional Class Objective: The investment seeks total return which exceeds that of its benchmarks, consistent with prudent investment management. Strategy: The fund invests at least 80% of its assets in Fixed Income Instruments that are economically tied to at least three countries (one of which may be the United States), which may be represented by forwards or derivatives such as options, futures contracts, or swap agreements. It may invest up to 10% of its total assets in preferred stocks. The fund may also invest in derivative instruments, such as options, futures contracts or swap agreements, or in mortgage- or asset-backed securities. Risk: Foreign securities are subject to interest-rate, currency-exchange-rate, economic, and political risks, all of which may be magnified in emerging markets. The fund may invest in lower-quality debt securities that involve greater risk of default or price changes due to potential changes in the credit quality of the issuer. In general the bond market is volatile, and fixed income securities carry interest rate risk. (As interest rates rise, bond prices usually fall, and vice versa. This effect is usually more pronounced for longer-term securities.) Fixed income securities also carry inflation risk and credit and default risks for both issuers and counterparties. Unlike individual bonds, most bond funds do not have a maturity date, so avoiding losses caused by price volatility by holding them until maturity is not possible. Additional risk information for this product may be found in the prospectus or other product materials, if available. Someone who is seeking potential returns primarily in the form of interest dividends rather than through an increase in share price. Someone who is seeking to complement his or her core bond holdings with international bond investments and who can tolerate the greater risks associated with foreign investments. Footnotes: A mutual fund registered under PIMCO Funds, and managed by Pacific Investment Management Co LLC. This description is only intended to provide a brief overview of the fund. Read the fund's prospectus for more detailed information about the fund. The Fund measures its performance against two benchmarks. The Fund's primary benchmark is the Barclays Capital U.S. Aggregate Index. The Barclays Capital U.S. Aggregate Index is an unmanaged market value-weighted index for U.S. dollar denominated investment-grade fixed-rate debt issues, including government, corporate, asset-backed, and mortgage-backed securities with maturities of at least one year. The Fund's secondary benchmark is the PIMCO Global Advantage Bond Index ("GLADI") (NY Close),. The PIMCO Global Advantage Bond Index ("GLADI") (NY Close), is a diversified bond index intended to provide a better representation of the fixed income universe through its wide coverage of fixed income instruments and sectors-from developed to emerging markets, nominal to real assets, and cash to derivative instruments. Vanguard Federal Money Market Fund Investor Class Objective: The investment seeks to provide current income while maintaining liquidity and a stable share price of $1. Strategy: The fund invests primarily in high-quality, short-term money market instruments issued by the U.S. government and its agencies and instrumentalities. Although these securities are high-quality, most of the securities held by the fund are neither guaranteed by the U.S. Treasury nor supported by the full faith and credit of the U.S. government. Risk: An investment in a money market fund is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Although the fund seeks to preserve the value of your investment at $1.00 per share, it is possible to lose money by investing in the fund. Additional risk information for this product may be found in the prospectus or other product materials, if available. Someone who has a low tolerance for investment risk and who wishes to keep the value of his or her investment relatively stable. Someone who is seeking to complement his or her bond and stock fund holdings in order to reach a particular asset allocation. Footnotes: A mutual fund registered under Vanguard Money Market Reserves, and managed by Vanguard Group, Inc. This description is only intended to provide a brief overview of the fund. Read the fund's prospectus for more detailed information about the fund. These descriptions are only intended to provide a brief overview of the mutual funds. Read the fund's prospectus for more detailed information about the fund. 20