Download The Colorado PERA Investor Newsletter

In This Issue
The Benefits of Lower
PERAPlus Plan Fees
Reminder About Plan
Contribution Deferral Elections
F I R S T Q UA RT E R
2014
PERA Investor
Save More for Your Retirement
as Early as You Can
The Benefits of Lower PERAPlus Plan Fees
Lower fees help keep more of your retirement
savings in your PERAPlus 401(k) and 457
Plan accounts.
If you appreciate low expenses and the easy-to-understand
PERA is a large institutional investor, providing you with
from an IRA into your PERAPlus 401(k) or 457 Plan account, as
access to custom, diversified investments that are not
long as the entire balance is made up of pre-tax contributions
normally available to independent investors.
and earnings.
Investing in the PERAdvantage funds gives you the benefit
To move retirement assets into your PERAPlus 401(k) or
of economies of scale that reduce the trading costs per dollar
457 Plan account:
of investment.
PERAdvantage investment options, consider consolidating
your other retirement assets in one place. You can transfer
or roll over money from a former employer’s retirement plan or
•
request a direct rollover.
The following fees for PERAPlus Plan administration and
investments are lower than many other plans.
•
•
Contact your previous employer or IRA institution to
•
Depending on where you want the money to go, the rollover
A flat monthly fee of $1.00 for each Plan in which
check must be made out to Colorado PERAPlus 401(k) Plan or
you participate.
Colorado PERAPlus 457 Plan for the benefit of (your name).
An asset-based administrative fee of 0.14 percent built
•
Complete a Colorado PERA 401(k) Rollover Form or Colorado PERA
into each PERAdvantage fund’s total expense, which is
457 Plan Rollover Form. Forms can be downloaded from the Plan
deducted from the fund’s rate of return.
websites accessible through www.copera.org or by calling
1-800-759-7372 and selecting the PERAPlus/DC option.
•
No deferred sales charges or transaction fees for any
of the PERAdvantage investment options.
•
Send the form with the rollover check to the address on
the form.
A complete fee schedule is available on the Plan websites.
Retirees and inactive PERA members who were not previously
enrolled in the PERAPlus 401(k) Plan have the option to roll
money from a former employer’s 401(k) retirement plan or from
Reminder About
Plan Contribution
Deferral Elections
an IRA into the PERAPlus 401(k) Plan, as long as the entire
balance is made up of pre-tax contributions and earnings.
Contributions to the PERA DC Plan cannot be rolled into the
PERAPlus 401(k) Plan.
Fund fact sheets are available on the Plan websites accessible
Changes to the contribution deferral election
through www.copera.org or by calling 1-800-759-7372 and
in the PERAPlus 457 Plan must be received by
selecting the PERAPlus/DC option. You should review all fund
2:00 p.m. (Mountain time) on the 25th of the
information, including investment objectives, risks, and fees,
month (or the first business day after) to be
before making investing decisions.
effective for the following month or following
payroll period, whichever is later. If the 25th
of the month is a stock market holiday, the
next stock market operating date will be
the cutoff.
Plan Information Line: 1-800-759-7372
Plan Website: www.copera.org
Save More for Your Retirement as Early as You Can
Perhaps one of the best and simplest ways to save
for your retirement is to take full advantage of the
PERAPlus 401(k) and 457 Plans.
Contributing steadily to your PERAPlus Plan accounts puts the
power of compounding on your side. Compounding occurs when
interest is added to the principal amount of a contribution. Each
year’s gains may build on those of the past, potentially increasing
the value of an investment over time.
The process of compounding is often compared to the way a
snowball grows as it rolls downhill. The longer the hill, the larger
the snowball becomes. And thanks to the potential role of
compounding, increasing your contributions by even a small
amount each year could provide significant long-term benefits.
By contributing more as soon as you can to your PERAPlus 401(k)
Plan and/or 457 Plan account, your money has more time to grow.
If you contribute only a minimal amount or delay increasing your
contribution level, you lose out on the maximum benefit of
compounding. In fact, waiting 10 or 20 years could force you to
contribute much larger amounts to your PERAPlus Plan accounts
later on to try to reach your retirement income goal.
Of course, systematic investing does not ensure profit or
guarantee against loss in declining markets, and investments in
the markets fluctuate over time, which can result in gains as well
as losses. You should always consider your ability to consistently
invest in up and down markets.
Be sure to review your contribution level regularly to check
your progress toward saving enough for retirement. To change
your PERAPlus 401(k) Plan contribution amount, contact your
personnel office. You can change your PERAPlus 457 Plan
contribution amount by logging into your account online
through www.copera.org or by calling 1-800-759-7372 and
selecting the PERAPlus/DC option.
A 25-year-old who immediately begins saving and investing in a PERAPlus Plan
accumulates $7,212 more in account value than someone who waits until age 26
to begin. Delaying contributions by 10 or 20 years means giving up thousands of
dollars for retirement.
The Cost
of Waiting
$120,000
Whatever your age, it’s never too soon to contribute as much as
you can afford. The PERAPlus 401(k) and 457 Plans have separate
contribution limits, so you can contribute up to the IRS maximum
limit of $17,500 to each Plan in 2014, for a total of $35,000. If you
will be age 50 or older this year, you can take advantage of catch-up
contributions that allow you to save even more for retirement.
$115,018
Starting at age 25
Starting at age 26
Starting at age 35
Starting at age 45
This hypothetical example assumes $60 contributions
$107,806
made at the beginning of each month, a 6 percent
$100,000
$87,679
effective annual interest rate compounded monthly, no
withdrawals, and retirement at age 65. For illustrative
$80,000
purposes only to show how the number of years invested
in a PERAPlus Plan could affect participant account
$58,755
$60,000
values. Not intended as a guarantee of past or future
$56,262
performance of any security. Actual rate of return may
$40,000
be more or less than shown and will depend on a
$27,339
number of different factors, including a participant’s
$20,000
$7,212
choice of investment options. Any fees, expenses, or
charges that may be associated with a PERAPlus Plan
$0
Account Value
at Age 65
www.copera.org
•
Cost of Waiting
One Year
Cost of Waiting
10 Years
Cost of Waiting
20 Years
1-800-759-7372
Participant Services Representatives:
Available Monday–Friday, 6 a.m.–6 p.m. (Mountain time)
except on New York Stock Exchange holidays.
Information from registered Plan Service Representatives is for educational purposes only and
is not legal, tax or investment advice. Local Plan Service Representatives are registered
representatives of ING Investment Advisors, LLC (member SIPC).
The Colorado PERA Investor is meant only as background information for your consideration and is not
intended as investment advice. PERA recommends that you consult a CPA, attorney, or other professional
adviser for investment advice. Your rights, benefits, and obligations as a PERA member are governed
by Title 24, Article 51 of the Colorado Revised Statutes, and the Rules of the Colorado Public Employees’
Retirement Association, the PERA 401(k) and Defined Contribution Plan and Trust Document, and The Deferred
Compensation Plan document, which take precedence over any interpretations in this newsletter.
*
are not considered in this illustration. These charges
would reflect lower net returns.
Quarterly Calendar
Transactions made on these dates when
the New York Stock Exchange (NYSE) is
closed will be processed the following
business day that the NYSE is open.
• Friday, April 18, 2014
• Monday, May 26, 2014
• Friday, July 4, 2014
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