Changes Coming to LifePath Target-Date Portfolios

Changes Coming to LifePath Target-Date Portfolios


In 2003, the Program introduced the Barclays LifePath options as a strategy that provides participants with an easy-to-use investment choice, that can be used from the first day in the Program all the way through retirement. Each LifePath option holds a diversified mix of asset classes, and the LifePath portfolio managers slowly adjust the asset mix over time to reflect the typical investor's changing tolerance for risk and return, as they approach retirement age.

Since LifePath was introduced, the Program has used an actively managed version that allows the investment manager to attempt to produce above-average returns in some asset classes. However, during the past three years, this active management has not added as much value as originally anticipated. Based upon a search by our independent investment consultant to identify the most appropriate target-date options for our participants, the Program's Board made the decision to move LifePath investors to the index version of Barclays LifePath on August 28, 2009. The indexed version of LifePath attempts to replicate the markets and has lower fees. The annual expense ratios will decrease from 0.45% to 0.25%, which is a 45% reduction.

In addition to moving from the actively managed to the indexed version, there are two other LifePath changes. First, instead of offering ten-year LifePath increments (2020, 2030, etc.), the Program will be offering five-year increments (2020, 2025, 2030, 2035, etc). These extra options will provide greater selection, making it easier to pick the most appropriate fund. Second, LifePath 2010 investors will be moved into the LifePath Retirement option on August 28.

Before investing, carefully consider the option's investment objectives, risks, charges, and expenses. The fund profile contains this and other important information. If you have questions about investing in LifePath options or would like a fund profile, please contact a Program Account Executive.

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