As part of the Plan’s ongoing due diligence process, in December, the Plan will transition its allocation models to allocation funds. Similar to the models that offer a diversified investment strategy tailored to a specific risk-return profile, allocation funds achieve the same objective but within a single fund rather than constructing a model with multiple funds. Since the models were added to the Plan years ago, allocation funds have proliferated, and there is now a wide variety of funds to choose from in each category. We believe this change will offer similar investment returns and reduce Plan expenses. Below is how the models will be mapped to the new funds:
DC Conservative Model to the BlackRock Managed Income K Fund
DC Conservative Growth Model to the American Funds Conservative Growth & Income R6 Fund
DC Moderate Model to the T. Rowe Price Capital Appreciation I Fund
DC Growth Model to the American Funds Growth & Income Portfolio R6 Fund
DC Aggressive Growth Model to the JP Morgan Investor Growth R6 Fund
There will be no changes to the Plan’s Tactical Models - the DC Tactical Conservative Model, DC Tactical Moderate Model, and DC Tactical Growth Model. Compared to other dynamic allocation funds the models are performing well and have a favorable cost structure.
The Plan will also be:
Transitioning two existing funds to lower expense ratio share classes;
Remove the 2010 through 2020 American Funds Target Date Retirement Funds, which have no money invested in them (the Target Date Retirement Funds will now start with 2025 instead of 2010); and
Updating the allocations in the DC Tactical Models.
Below is a link to notice of change in investment options.