Download State of Connecticut Stable Value Fund

State of Connecticut Stable Value Fund
Category
Stability of Principal
The Connecticut Stable Value Fund is an
investment option available under the State
of Connecticut Deferred Compensation 457
Plan, 403(b) Plan, and Alternate Retirement
Program. It invests in several separate
account group annuity investment contracts
issued by ING Life Insurance and Annuity
Company (ILIAC), each of which provides
for a periodically declared rate and a
guaranteed minimum rate. The interest rate
guarantees under the contracts are based
on the claims-paying ability of ILIAC.
ILIAC is a leading provider of stable value
products and services and a member of
the ING family of companies.
What is a Stable Value Option?
The stable value investment option of
your defined contribution plan seeks to
preserve participant account balances and
to return steady growth over time without
daily fluctuations.
What does it invest in?
The Connecticut Stable Value Fund is
allocated to four individually managed
separate accounts. All separate accounts
are invested in actively managed portfolios
containing a unique complementary
diversified mix of fixed income investments.
The investment results of the four
underlying separate accounts are blended
to provide the basis for the crediting rate
available to participants in the Fund. The
underlying separate accounts are managed
by ING investment Management, PIMCO
Investment Advisors and Prudential Fixed
Income Management.
The underlying assets for all of the separate
accounts are “insulated” from claims
arising out of any business conducted by
ILIAC and can be used only for the benefit
of plan participants.
• Portfolio A – managed by ING Investment
Management and benchmarked to the
Barclays Capital U.S. Intermediate
Aggregate Index*. The strategy invests
in securities with maturities up to 10
years and includes publicly traded,
high quality, fixed income instruments.
• Portfolio B – managed by PIMCO
Investment Advisors and benchmarked
to the Barclays Capital U.S. Aggregate
Bond Index** which invests in securities
with maturities up to 30 years and
includes publicly traded, high quality,
fixed income instruments.
• Portfolio C – managed by Prudential
Fixed Income and benchmarked to the
Barclays Capital U.S. Aggregate Bond
Index** which invests in securities
with maturities up to 30 years and
includes publicly traded, high quality,
fixed income instruments.
• Portfolio D – managed by ING Investment
Management and benchmarked to the
Barclays Capital U.S. Aggregate Bond
Index** which invests in securities
with maturities up to 30 years and
includes publicly traded, high quality,
fixed income instruments.
* The Barclays Capital U.S. Intermediate Aggregate
Index is an unmanaged index of intermediate
duration fixed-income securities. The index reflects
reinvestment of all distributions and changes in
market prices. Investors cannot invest directly in
an index.
** The Barclays Capital U.S. Aggregate Bond Index is
an unmanaged, market-value-weighted index of
taxable investment-grade fixed-rate debt issues,
including government, corporate, asset-backed,
and mortgage backed securities, with maturities
of one year or more.
What is the objective?
Stability of principal is the primary objective
of this investment option. Connecticut
Stable Value Fund invests in instruments
that guarantee an annual 3% minimum net
rate of interest for the life of the contract
and that may credit a higher interest rate
from period to period. The current interest
rate is subject to change, up or down but
will never fall below the guaranteed
minimum. Once the rate is credited, the
interest becomes part of the principal
and increases through compounding.
Guarantees are based on the
claims-paying ability of ING Life
Insurance and Annuity Company.
Potential Risks
Under some scenarios it is possible for
participants to lose money even in a stable
value option. Those situations are unlikely
and rarely occur, but they can happen. It’s
important for investors to be aware of
these potential risks. Withdrawals resulting
from large employer-initiated events, such
as withdrawals following mass layoffs,
employer bankruptcy or full or partial plan
termination are not always covered by
the guarantees and may be restricted or
subject to adjustment. Your stable value
account balance is not guaranteed by
the Federal Deposit Insurance Corporation
(FDIC), by any other government agency
or by your plan. This portfolio is not a
registered investment under the 1940 Act
and has not been registered with the
Securities and Exchange Commission.
How is the rate of interest stated?
Participant balances are credited interest
daily. The interest rate on the Connecticut
Stable Value Fund is declared at least
quarterly and is listed on participant quarterly
statements. The rate announced is net of
management fees, expenses, and risk charges,
but a 0.10% administrative fee applies.
All funds in the Connecticut Stable Value
Fund, not just the latest contributions,
receive the same credited rate. This is
known as a portfolio method of interest
rate crediting.
Effective February 1, 2012, the interest rate
for the Connecticut Stable Value Fund is
3.15%, expressed as an annual effective
yield. The net credited interest rate after
the deduction of the 0.10% administration
fee will be 3.05%. The current credited
interest rate is subject to change and
will be reviewed periodically.
STATE OF CONNECTICUT STABLE VALUE FUND
How does it benefit me?
The Stable Value option is intended to
help insulate your investment against the
daily fluctuations in market value. Many
participants find this stability an attractive
feature. An announced rate of interest is
another feature of stable value investment
options that many participants like.
Are there any limitations on
contributions, withdrawals, or transfers
from my Plan’s Stable Value option?
Generally, ING has no limitations on
participant contributions, transfers, or
withdrawals as a result of retirement,
death, disability, unforeseen hardship,
or separation from service.
What are the fees?
As of February 1, 2012, the fund’s management
expenses total 0.67% which is netted from
the quarterly declared rate. In addition, an
annual administration fee of 0.10% is
deducted each month from the Connecticut
Stable Value Fund and from all other
investment options in which a participant
has assets invested.
State of Connecticut Stable Value Portfolios – As of December 31, 2011
STATISTICAL DATA
Portfolio – Separate Account
Portfolio Duration (years)
Yield to Maturity
Portfolio A
3.06
1.97%
Portfolio B
4.44
1.80%
Portfolio C
4.54
2.84%
Portfolio D
4.58
3.08%
SECTOR WEIGHTS
Mortgage Backed Securities
Corporate Securities
US Treasury / Short Term / Cash / Other
Government Related
Commercial Mortgage Backed Securities
Derivatives
Asset Backed Securities
Emerging Markets
Municipal Bonds
Private Placements
Bank Loans
34.7%
22.3%
32.6%
3.6%
7.2%
-0.3%
0.0%
0.0%
0.0%
0.0%
0.0%
27.4%
10.3%
52.1%
0.0%
5.0%
0.0%
0.0%
0.0%
5.1%
0.1%
0.0%
16.0%
22.1%
30.2%
0.0%
14.1%
0.0%
5.3%
6.1%
0.7%
4.5%
1.0%
31.8%
30.5%
20.9%
7.7%
8.8%
-0.3%
0.5%
0.1%
0.0%
0.0%
0.0%
CREDIT QUALITY *
AAA
AA
A
BBB
<BBB
Not Rated
75.8%
3.5%
10.2%
10.4%
0.0%
0.0%
86.0%
5.0%
4.0%
5.0%
0.0%
0.0%
65.8%
2.7%
10.2%
14.1%
7.2%
0.1%
57.7%
5.2%
9.4%
17.9%
9.8%
0.0%
* Rating as of December 31, 2011. Ratings are subject to change. The credit quality of the securities in the portfolio is calculated by a national rating organization. The credit
quality of the investment in the portfolio does not apply to the stability or safety of the Fund.
www.CTdcp.com
Third-party administration provided by ING Life Insurance and Annuity company (ILIAC), One Orange Way, Windsor, CT 06095-4774. Securities distributed by ING Financial
Advisers, LLC (Member SIPC). These companies are wholly owned, indirect subsidiaries of ING Groep, N.V
© 2011 ING North America Insurance Corporation.
158592 3014782.G.P-9 (1/12) C12-0127-045R (1/12)