Deferred Compensation P lan
DEFERRED COMPENSATION PLAN City of Baltimore IM DCP RE CIT B A LT O Y OF DEFERRED COMPENSATION PLAN Deferred Compensation P lan Managed Account Service Opt-Out Process Frequently Asked Questions What is the Managed Account Service optout process? What if I’m already in enrolled the Managed Account service? The Managed Account service on your account automatically will be activated based on the information and assumptions provided by your plan sponsor (such as your birthdate, annual income, desired retirement age and state of residence). If you opt out of the Managed Account service, you are responsible for managing your own account. If you are already enrolled in the Managed Account service, nothing will change, but we recommend that you take time to personalize your financial profile if you have not done so already. Why is the City of Baltimore making this change? The City of Baltimore works with an outside consultant to evaluate how participants are using the Deferred Compensation Plan (DCP) and if participants are accumulating enough savings to provide sufficient supplemental retirement income. After a thorough review of the DCP, the City, working with the outside consultant, determined that many DCP participants were not accumulating sufficient savings to provide necessary supplemental retirement income. The City is making this change so that DCP participants will better be able to plan for addressing their retirement goals. Is everyone enrolled in the Managed Account service? There are certain exclusions that are not part of the Managed Account service’s enrollment process. Some of the excluded groups include deceased participants, participants over age 70½, participants who are invested in two or fewer target date funds, terminated participants with less than $100, and participants enrolled in the Great-West SecureFoundation® investment option. Other exclusions may apply. How do I personalize my financial profile? You may personalize and update your financial profile using the Retirement Income Control Panel (RICP), brought to you by AAG.1 What is RICP? RICP is a tool on the website that measures retirement readiness. RICP calculates a projected retirement income based on your unique factors, creates a gap analysis chart to estimate monthly income necessary to maintain your current lifestyle in retirement, and provides specific information for addressing your retirement readiness.1 How do I add my outside assets so they are included in my Managed Account analysis? • In the Retirement Income Control Panel, select “Update My Profile.” • Select “View my Strategy.” • You will then see the “Information” section on the left-hand side of the page; select “Accounts.” • In this section, you will see your City of Baltimore Deferred Compensation Plan account. Below your account, select the “Add New Account” link. • This will allow you to select whom the account belongs to (you or a spouse) and what type of account it is (401(k), Roth IRA, taxable account, etc.); then select ”Next.” • You will then be allowed to name the account, determine if you would like contribution and asset allocation guidance, and stat your current contribution amount. Select ”Next.” Who is Advised Assets Group, LLC (AAG)? Why were they chosen to manage my account? AAG is a registered investment adviser that specializes in providing tailored investing consulting and advisory services to plan participants. With a dedicated education call center, AAG is dedicated to helping make you retirement ready. City of Baltimore Deferred Compensation P lan • Enter the specific investment and dollar amount for each investment within the account ; then select “Save to Investments.” • Once you are back to the Information section, select “Get Advice.” This will rerun the simulation and include the account you created. • You may do this as many times as necessary to include all of the accounts you wish to include in your calculation. Will a savings recommendation be included in my account management? Yes, along with its Managed Accounts service, AAG offers a whole suite of Advisory Services offerings that consider savings rates. The Managed Account service will make a savings recommendation for you on a perpaycheck basis. You can view this recommendation by going to your participant website, by calling Advisory Services at (844) 302-2448, or by reviewing your Welcome and Annual kits. The recommended savings rate is more than I can afford right now. Can I still use the Managed Account service? Yes! You can still use the service. The savings rate is only a recommendation; you can determine the amount you wish to contribute as part of your personalized strategy. Will Social Security income be considered in my retirement income calculations and account management? Yes, Advisory Services will consider your potential Social Security income when calculating your retirement income and account management. It’s important to review the estimated Social Security income and determine if it’s correct for you and based on your target retirement date. You have the ability to customize the estimate based on your goals and situation. Are there any fees for the Advisory Services? Yes, some fees apply. Advisory Services consists of three levels of services. These services and fees include: • Online Investment Guidance – This tool is designed for you if you’re simply seeking help in designing your own portfolio’s asset allocation. Managed Account Opt-Out Process Frequently Asked Questions The Guidance tool provides asset allocation assistance and allows you to choose from the plan’s investment options. There is no fee for this service. • Online Investment Advice – This tool is geared toward you if you’re wishing to manage your own retirement account but value the assistance of online tools and advice. You create a personal profile that outlines your financial situation and retirement goals. The Advice tool provides tailored, fund-specific recommendations from the plan’s investment lineup that meet your goals and objectives. There is a $6.25 quarterly fee. • Managed Account – A financial expert professionally manages your account and provides periodic updates regarding progress toward your retirement goals. The Managed Account service utilizes your personal profile to generate an asset allocation model, implements the model using the plan’s investment options, reviews and updates your portfolio quarterly, and provides you with an Annual Portfolio Review that updates you on your retirement readiness. A quarterly asset-based fee is assessed based on account balance (as the chart below illustrates). There is no guarantee that participation in any of the advisory services will result in a profit or that the account will outperform a self-managed portfolio. Participant Account Balance First $100,000 of account balance Next $150,000, up to $250,000 account balance Next $150,000, up to $400,000 account balance Amounts in excess of $400,000 Annual Managed Account Fee 0.40% 0.30% 0.20% 0.10% Important reminder: You can take advantage of the Managed Account service with a free-look period ending 90 days after your enrollment date. If you remain in the Managed Account service beyond the free-look end date, the appropriate fees listed below will be assessed to your account for the entire period, including the free-look period. City of Baltimore Deferred Compensation P lan How is the fee charged? The annual fee is assessed on a quarterly basis. For example, if your account balance is $50,000, the annual Managed Account fee is: $50,000 X 0.0004 = $200 You are charged $50 each quarter. If your account balance is $500,000: The first $100,000 is subject to a maximum annual fee of 0.40% ($400); the next $150,000 is subject to a maximum annual fee of 0.30% ($450); the next $150,000 is subject to a maximum annual fee of 0.20% ($300); and any amounts over $400,000 (in this case, $100,000) are subject to a maximum annual fee of 0.10% ($100). The total annual fee of a $500,000 account is $400+$450+$300+$100 = $1,250 Each quarter, your account is assessed $1,250/4 = $312.50 There is a free-look period for 90 days from the day you enroll in the Managed Account service. If you remain in the Managed Account service beyond the free-look end date, the appropriate fees listed above will be assessed to your account for the entire period, including the freelook period. After the free-look period is over, you will be charged each quarter for the service. I received a letter about the Managed Account service. Do I need to do anything? Three different letters are sent to ensure that you are given ample time to make an informed decision. The first letter is sent at the start of the process and at the beginning of the special enrollment period. Everyone (except participants who were excluded) receives the first letter. If you choose not to participate, you will need to call the AAG service center or initiate a qualifying financial transaction (e.g., make your own fund allocation decision) to opt out of the enrollment process. You will not receive any more letters. A second letter is sent 35 days after the first letter to remind you that you need to take action if you do Managed Account Opt-Out Process Frequently Asked Questions not want to be enrolled in the Managed Account service. Again, if you either make a qualifying financial transaction or opt out of the enrollment process, you will not receive any more letters. The third letter is sent at the end of the process to congratulate you on your enrollment into the Managed Account service. I decided that I want to opt out of the Managed Account service. What do I need to do? You may contact AAG by calling (844) 302-2448 and asking to speak to an AAG Investment Adviser Representative. What if I change my mind and want to re-enroll in the Managed Account service? You may contact AAG by calling (844) 302-2448 and asking to speak to an AAG Investment Adviser Representative. I still have some questions. Whom do I call about my account? You may contact AAG by calling (844) 302-2448 and asking to speak to an AAG Investment Adviser Representative. You may also contact your local representative at (877) 223-2748 or email Retirement.Plans@ BaltimoreCity.Gov.2,3 1 The Retirement Income Control Panel and the Projected Retirement Income are educational tools that provide hypothetical information for illustrative purposes only. They are not intended to provide financial planning or investment advice. Both Retirement Income Control Panel and Projected Retirement Income are brought to you by Advised Assets Group, LLC, a registered investment adviser. All rights reserved. 2 Representatives of GWFS Equities, Inc. are not registered investment advisors and cannot offer financial, legal or tax advice. Please consult with your financial planner, attorney and/or tax advisor as needed. 3 Access to the voice response system may be limited or unavailable during periods of peak demand, market volatility, systems upgrades/maintenance or other reasons. Core securities, when offered, are offered through GWFS Equities, Inc. and/or other broker dealers. GWFS Equities, Inc., Member FINRA/SIPC, is a wholly owned subsidiary of GreatWest Life & Annuity Insurance Company. GWFS Equities, Inc., or one or more of its affiliates, may receive a fee from the investment option provider for providing certain recordkeeping, distribution and administrative services. Managed Account, Guidance and Advice services are offered by Advised Assets Group, LLC (AAG), a federally registered investment adviser and wholly owned subsidiary of Great-West Life & Annuity Insurance Company. More information can be found at www.adviserinfo.sec.gov. All trademarks, logos, service marks, and design elements used are owned by their respective owners and are used by permission. ©2015 Great-West Life & Annuity Insurance Company. All rights reserved. Form# CB1114OOFAQ (4/2015) PT225709
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