Financial advisor John Hennessey,
right, and plan sponsor client Paul Centenari
of Atlas Container Corporation.
For more information, call us at (800) 421-9900.
Work smarter, not harder, with the right service and support. Help improve participant outcomes with support and service from American Funds.
†Check with your home office for availability.
— Cogent Research,
Retirement Plan Advisor Trends™, 2014
With American Funds as the primary investment manager, plan sponsors also gain access to a wide variety of funds from other respected investment managers.
At American Funds, we believe our success in the retirement plan industry is based on a history of superior long-term results, while striving to keep management fees low so that operating expenses remain competitive. Our pricing structure was developed with plan participants’, plan sponsors’ and advisors’ interests in mind.
Your clients will know exactly how much they’re paying and what they’re paying for through flat fees that are easy to understand. Multiple pricing options are available to fit specific plan needs. Recordkeeping fees are based on the number of participants, not the number of eligible employees or plan assets, so recordkeeping costs will not increase as plan assets grow.*
At American Funds, plan assets generate credits, which can be used to offset plan expenses. Over time, net plan costs, as a percent of assets, will decrease as plan assets grow.‡
Below is a hypothetical illustration that provides a high-level view of plan expenses and credits, and explains how each fits into the total plan cost. Remember that plan cost is just one factor to consider when making decisions about plan providers, investment managers, and investment and financial professionals.
To help the plan remain competitively priced, the plan credit is automatically re-calculated every quarter, which may result in a larger plan credit as the number of participants and plan assets grow.**
The plan costs are based on information entered or provided by the financial professional. If actual fees, expenses and other figures vary, plan costs may be affected. First-year plan cost does not include one-time fees.
Cost Comparison Tool Example
℠ or certain stable value funds are included in the plan’s funds. For some share classes, American Funds U.S. Government Money Market Fund has a lower credit rate because 12b-1 service fees are currently being suspended in this low-interest-rate environment. Certain stable value funds may not generate plan credits.
Determine the compensation option that’s appropriate for each plan’s service needs.
For additional compensation flexibility, RecordkeeperDirect-Multifund offers a set of options with a higher upfront payout in the first year.
Retirement Planning Tools
See how you and your clients can benefit from our solutions’ compensation and pricing.
Show plan sponsors how you can save them money with an illustration from the Plan Cost Comparison Tool.
Determine which retirement plan may be a good option for your clients’ needs.
While many asset managers in the industry offer target date funds, not all funds are created equal. American Funds Target Date Retirement Series features a “glide path within a glide path” that helps mitigate market and longevity risk to deliver tangible lifetime value for participants. The Series has a proven record of delivering risk-adjusted, superior lifetime results through intelligent allocation.* Highlighted below are five key factors that distinguish our Series from its peers.
In response to the growing popularity of target date funds, the U.S. Department of Labor (DOL) issued guidelines in 2013 stating that plan sponsors should engage in an objective process of evaluating and selecting a target date fund family. Learn about essential considerations like participant needs at each stage, cost versus value and other factors in our white paper (PDF).
American Funds Target Date Retirement Series’ objective-based fund construction is crafted to address participants' lifetime investment goals of appreciation, income and preservation.
Our unique glide path within a glide path gradually shifts the type of equities held in the funds, moving from growth-oriented equities to income-oriented equities. This approach seeks to mitigate market risk while simultaneously addressing longevity risk.
Our underlying funds have beaten their respective Lipper indexes in 92% of rolling 10-year periods.*
Highly ranked equity funds have helped power the Series. Here you can see how the individual underlying equity funds have fared in their Morningstar peer categories over various rolling time periods from 1980 to 2014. You'll note that the majority of funds are in the top two quartiles for every time period.
Low costs are crucial to positive investor outcomes and can help plan sponsors demonstrate that they have participants' best interests in mind. We offer a range of share classes designed to meet the needs of plan sponsors and participants. The different share classes incorporate varying levels of advisor compensation and service provider payments. The funds in our Series have lower expenses than the Morningstar Retirement, Medium fee level group.
Our target date funds are managed by a team of veteran investment professionals with diverse experience and knowledge. According to Morningstar, our managers have "formidable experience."
– Morningstar Target-Date Fund Series Report, December 31, 2014
Figures shown are past results and are not predictive of results in future periods. Current and future results may be lower or higher than those shown. Share prices and returns will vary, so investors may lose money. Investing for short periods makes losses more likely.
View fund expense ratios and returns.
Investments are not FDIC-insured, nor are they deposits of or guaranteed by a bank or any other entity, so they may lose value.
This material is intended for use by financial professionals or in conjunction with the advice of a financial professional.
Investors should carefully consider investment objectives, risks, charges and expenses. This and other important information is contained in the fund prospectuses and summary prospectuses, which can be obtained from a financial professional and should be read carefully before investing.
Investing outside the United States involves risks, such as currency fluctuations, periods of illiquidity and price volatility, as more fully described in the prospectus. These risks may be heightened in connection with investments in developing countries. Small-company stocks entail additional risks, and they can fluctuate in price more than larger company stocks.
The return of principal for bond funds and for funds with significant underlying bond holdings is not guaranteed. Fund shares are subject to the same interest rate, inflation and credit risks associated with the underlying bond holdings. Lower rated bonds are subject to greater fluctuations in value and risk of loss of income and principal than higher rated bonds. Investments in mortgage-related securities involve additional risks, such as prepayment risk, as more fully described in the prospectus. While not directly correlated to changes in interest rates, the values of inflation linked bonds generally fluctuate in response to changes in real interest rates and may experience greater losses than other debt securities with similar durations.
Each target date fund is composed of a mix of American Funds and is subject to the risks and returns of the underlying funds. Underlying funds may be added or removed during the year. Although the target date funds are managed for investors on a projected retirement date time frame, the fund's allocation strategy does not guarantee that investors' retirement goals will be met. The target date is the year in which an investor is assumed to retire and begin taking withdrawals. American Funds investment professionals actively manage the target date fund's portfolio, moving it from a more growth-oriented strategy to a more income-oriented focus as the fund gets closer to its target date. Investment professionals continue to manage each fund for 30 years after it reaches its target date.
RecordkeeperDirect-Multifund investments are offered through a group fixed and variable deferred annuity (“group annuity”) issued by Great-West Life & Annuity Insurance Company, Corporate Headquarters: Greenwood Village, CO; or, in New York, by Great-West Life & Annuity Insurance Company of New York, Home Office: White Plains, NY.