NRECA Employee Benefits Weekly

401(k) Pension Plan Fund Changes

Posted on Posted in Retirement Benefits

During the week of October 16, 2017, NRECA is mailing a 401(k) Pension Plan Investment Change Notice to eligible 401(k) Pension Plan participants. This notice will be included in the annual 401(k) Plan fee disclosure notice mailing. This notice will provide participants with information on the following investment changes going into effect on December 1, 2017.

  • Growth and Income Stock Fund
    • The name of the fund will be changed to the Value Stock Fund, which more accurately describes the value investment strategy.
  • International Stock Fund
    • The principal investments will be comprised primarily of equity securities of non-U.S. issuers and securities whose principal markets are outside of the U.S., including emerging markets and Canada. This change reflects the growth and changes in the international equity markets since the fund’s inception.
    • Fund assets will be invested and managed by Capital Guardian, LSV Asset Management and State Street Global Advisors.
    • The fund’s new benchmark will be the Morgan Stanley Capital International (MSCI) All Country World (ACWI) ex US Index.
  • Money Market Fund
    • The name of the fund will be changed to the Stable Income Fund, which more accurately reflects the updated investment objective.
    • The investment objective of the fund will be amended. The Stable Income Fund is a low-risk investment option that over time seeks a stable income consistent with prevailing market and interest rate conditions while providing principal stability, capital preservation and liquidity.
    • Fund assets will be invested and managed by Pacific Investment Management Company, LLC (PIMCO).
    • The fund’s new benchmark will be the Citigroup 3-Month Treasury Bill Index.
  • 2060 Target Date Portfolio (2060 TDP) is being added to the fund 401(k) Plan’s investment line-up.

New and Current 401(k) Plan Participants’ Default Investments
While the 2060 TDP is geared to individuals retiring in (or near) the year 2060, any plan participant can invest in the fund. The 2060 TDP will be the default investment for:

  • Individuals born in 1993 or later who have not made an their own investment election will have 100% of their participant and co-op contributions directed to the 2060 TDP; and
  • Individuals born between 1988 and 1992 who have not made their own investment election will have 50% of their participant and co-op contributions directed to the 2060 TDP and the other 50% directed to the 2050 TDP.

Some Current 401(k) Plan Participants Will Have Money Moved Automatically
Participants who fall into one of the age groups described above, and who have not made other investment elections, will have their TDP balances moved automatically after market close on December 1, 2017. Future contributions will be directed as described above. Letters will go out later in October explaining the automatic transfer and providing information on how to opt out of the movement by making an investment election for either their existing account balance or future contributions. These participants have until market close at 4 pm, Eastern time (ET), on December 1, 2017, to make an investment election that will remove them from having the automatic transfer of all or a portion of their 2050 TDP balance into the 2060 TDP.

If you have questions about these notices, contact NRECA’s Member Contact Center at 866.673.2299 or contactcenter@nreca.coop. Cooperative employees with questions about their investment strategy should contact NRECA’s Personal Investment & Retirement Consulting team at 866.673.2299, option 6, or pirc@nreca.coop.

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