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Investment Options GUIDE TO Investment Options nysdcp.com | 1-800-422-8463 Welcome to your investment options guide As a participant in the New York State Deferred Types of investment Compensation Plan (the Plan), you are investing to options offered supplement your retirement income and achieve a goal that may be decades away. through the Plan Investing for retirement differs from other strategies in a few ways. Mutual funds are diversified portfolios of stocks, bonds and other investments chosen by a fund manager to • Retirement investing is usually long-term achieve a stated objective. Each fund is assigned a five- • Distributions are usually made over a number letter ticker symbol that helps investors find information of years instead of in a single lump-sum via financial websites and publications. In addition, each fund publishes a prospectus: a formal legal document • Income earned and transactions are not taxed filed with the SEC that provides details about its until withdrawals are taken investment objective, fees, charges and expenses, Exception: After-tax Roth 457 contributions and any and related information. earnings from investments of those contributions are not subject to taxation, once certain criteria are met. Collective investment trusts (CITs) are similar to mutual funds, offering many of the same diversification Investing through the Plan offers and management services as mutual funds but generally benefits you may not find elsewhere. at a lower cost. Many CITs are designed specifically for • Wide selection of investment options suitable retirement plan investors. Therefore, specific information for retirement investors about a CIT may be available solely through the Plan • Board oversight and regular reviews of that offers it. Participants may request fact sheets about investment options CITs offered through the Plan by calling the HELPLINE, or they may download them from www.nysdcp.com. • Lower costs driven by the power of group buying • Account Executives who: Custom funds are diversified investments created for the exclusive use of Plan participants. A custom – Know the issues most retirement investors face fund may have several separate account investment – Can help you understand the options available management companies used together to create a fund through the Plan for the Plan. Because of their custom nature, information – Are motivated to help participants be successful about these funds is available only through the Plan. As through the Plan with CITs, participants may request fact sheets about each of the Plan’s custom funds from the HELPLINE or • Website offering account access 24/7/365, featuring: download them from www.nysdcp.com. – My Interactive Retirement Planner℠ to help you see how financial decisions, assets and planning Investing involves market risk, including possible loss of principal. No investment strategy — including asset allocation, diversification and dollar may affect your financial future cost averaging — can guarantee to make a profit or avoid loss. Actual – Investment tools/asset allocation tool results will vary depending on your investment and market experience. – Access to your quarterly statement Before you decide to direct investments under the Plan, carefully consider the fund’s investment objectives, investment methods, risks, charges and expenses. This and other information is contained in the – Learning Center to help you navigate through fund prospectus, which you should read carefully before investing. To unfamiliar territory get any prospectus, ask your Account Executive, call the HELPLINE at 1-800-422-8463 or access the website (www.nysdcp.com). There is no – Library of Plan documents, brochures, forms and prospectus for CITs and custom funds because these options are not newsletters mutual funds. You may obtain a fact sheet on each of these options from the HELPLINE or our website. Account Executives cannot offer investment, tax or legal advice. You should consult your own counsel before making retirement plan decisions. 2 | Guide to Investment Options, Fees and Exchange Provisions Three approaches to investing through the Plan DO IT FOR ME The Plan recognizes that participants may have This approach uses T. Rowe Price Retirement Date differing levels of comfort with investing. Therefore, Trusts, a series of collective investment trusts (CIT) we have created three approaches that are generally managed to provide diversified asset allocation across aligned with how comfortable or willing you are to many asset classes appropriate for Plan participants. A manage how your retirement assets are invested Retirement Date Trust may be a great way to get a well- through the Plan. diversified portfolio that you can “set and forget.” The further away the Trust’s target date (expressed as DO IT FOR ME a year in the Trust’s name) is, the more aggressively An approach that uses target date CITs its assets will be invested. The target date, offered in based on when you plan to retire or begin five-year increments, refers to the approximate year a taking withdrawals participant plans to begin taking withdrawals. T. Rowe Price uses a “glide path” to adjust the asset allocation to DO IT YOURSELF automatically become more conservative as the investor An approach to personally design and approaches the target date. monitor your asset allocation and investment options Because the Trust manager has already provided a well- diversified portfolio, investors typically select just one Retirement Date Trust. However, if you plan to retire SPECIALTY OPTIONS significantly earlier or later than age 65, you may want Options that represent special interests to consider carefully which Retirement Date CIT, if any, such as environmental, social and would be appropriate for your needs. governance factors or other specialty investment strategies Investing involves market risk, including possible loss of principal. No investment strategy — including asset allocation, diversification and dollar cost averaging — can guarantee to make a profit or avoid loss. Actual results will vary depending on your investment and market experience. The principal value of the TRP Retirement Date Trusts is not guaranteed at any time, including at or after the target date, which is the approximate year an investor plans to retire (assumed to be age 65) and likely stop making new investments in the Trust. If an investor plans to retire significantly earlier or later than age 65, the Trusts may not be an appropriate investment, even if the investor is retiring on or near the target date. The Trusts’ allocations among a broad range of underlying stock and bond funds will change over time. The Trusts emphasize potential capital appreciation during the early phases of retirement asset accumulation, balance the need for appreciation with the need for income as retirement approaches, and focus on supporting an income stream over a long-term post-retirement withdrawal horizon. The Trusts are not designed for a lump-sum redemption at the target date and do not guarantee a particular level of income. They maintain a substantial allocation to equities both prior to and after the target date, which can result in greater volatility over shorter time horizons. There is no prospectus for CITs or custom funds because these options are not mutual funds. You may obtain a fact sheet on each of these options from the HELPLINE at 1-800-422-8463 or our website at www.nysdcp.com. nysdcp.com | 3 DO IT YOURSELF If you feel that you have the time, expertise and desire personal time frame (the period between now and when to make your own investment decisions, our Do-It- you plan to retire) so that you can select an appropriate Yourself approach may be appropriate for you. You level of risk and asset allocation for your Plan account. should consider diversification, dollar cost averaging and the relationship between investment risk and reward. The investment options offered under the New York State Deferred Compensation Plan offer diversity and flexibility to Plan participants. Amounts that participants contribute to the Plan may be invested in one Diversification employs the popular saying, “Don’t or more of the above investment options. The asset classification and/or investment style of any investment option may change. The information put all your eggs in one basket.” Investing often goes concerning asset classification and investment style provided in this through cycles during which a particular type of guide was last updated in May 2017. investment or style of investing may do very well for a Investing involves market risk, including possible loss of principal. No period of time, while another may be temporarily out investment strategy — including asset allocation, diversification and dollar of favor. By having a thoughtfully considered mix of cost averaging — can guarantee to make a profit or avoid loss. Actual results will vary depending on your investment and market experience. investment styles and types, you may be able to reduce the effects of market volatility on your retirement Before you decide to direct investments under the Plan, carefully account and potentially increase your long-term returns. consider the option’s investment objectives, investment methods, risks, charges and expenses. This and other information is contained in the fund prospectus, which you should read carefully before investing. To Dollar cost averaging is a strategy through which an get any prospectus, ask your Account Executive, call the HELPLINE at 1-800-422-8463
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