Download magna retirement savings plans stable value fund

Magna Retirement Savings Plans
Stable Value Fund
Overview
The Stable Value Fund is an investment that combines the Guaranteed Fund Contract (GFC) with the Principal Stable
Value Fund (PSVF). The strategy for this investment is for the PSVF to eventually replace the GFC. By combining
the two components, the plan currently benefits from the investment returns of the GFC holdings which have not
matured yet and will seek to provide higher performance yield on new contributions and additions than the existing
GFC investment option could credit. As the holdings within the existing GFC mature, they will be reinvested in the
PSVF so that the amount allocated to the PSVF increases over time. The GFC has assets that mature every December
31 through 2016. After 2016, all of the assets in the Stable Value Fund will be in the PSVF.
As of March 31, 2016, 25.53% of the Magna Retirement Savings Plans Stable Value Fund’s assets were in the
Guaranteed Fund Contract and 74.47% of the assets were in the Principal Stable Value Fund. Its turnover ratio in 2015
was 36.68%. The one-year return as of March 31, 2016, is 1.17%, and the return since its inception date is 1.16%.
Guaranteed Fund Contract Component
The Guaranteed Fund Contract is a general account-backed group annuity contract. This group annuity contract has
been issued by Principal Life Insurance Company (Principal Life) to the Trustees of the Magna Group of Companies
Retirement Savings Plans.
The Guaranteed Fund Contract can provide the conservative foundation for a retirement program. It offers plan
participants two important characteristics:
• Stability of principal – The value does not fluctuate daily with the stock and bond markets.
• A declared interest rate – Participants know in advance what interest will be earned.
Crediting Rate for the GFC Portion
A rate of interest contractually guaranteed by Principal Life is credited to participant account balances. This
crediting rate is a 1.15% effective annual rate until December 31, 2016.
Principal Stable Value Fund Component
The PSVF primarily consists of a diversified portfolio of Stable Value Investment Contracts issued by life insurance
companies, banks and other financial institutions. Its performance is predicated on the underlying fixed income
investments.
The past performance of the Principal Stable Value Fund Component as of March 31, 2016 is:
Month
3 Month
YTD
1 YR
3 YR
5 YR
10 YR
Gross
0.14%
0.42%
0.42%
1.63%
1.48%
1.69%
2.72%
Net
0.11%
0.31%
0.31%
1.18%
1.02%
1.23%
2.26%
Past performance is not a guarantee of future results. Performance returns assume the reinvestment of dividends
and other earnings. Returns for periods less than one year are not annualized. Gross returns are presented net of
Fund Level Expenses which include Stable Value Investment Contract Fees, Sub-Adviser Fees, Acquired Fund Fees
and Other Expenses. Net returns are presented net of 0.08% annualized Trustee/Adviser Fee and 0.37% annualized
Service Fee. Fees charged by varying share classes including the Service Fee may differ and as a result, investors in
other share classes may obtain higher or lower net returns if multiple share classes are available.
Performance information for share class options available after the original Fund inception date are based on the
performance of the Principal Stable Value Fund, adjusted to reflect estimated fees for the respective share class
option. The Fund’s inception date is January 1997.
Benefit payments
Benefit payments are made according to the market value of the fund at the time of distribution. The market value of
the fund is a blend between the performance and weighting of the GFC and PSVF Components.
Principal Risks
While stable value is generally considered a conservative investment option, stable value assets do carry potential
risks. The fund may lose value and be worth more or less than the original cost when redeemed, and there is no
assurance that the fund’s objective will be achieved. Risks include, but are not limited to: 1) Investment Contract
risk which includes the risk of maintaining Book Value Accounting standards and the risk that Investment Contract
issuers may default on their obligations under the contract; 2) interest rate risk which includes the potential that
an increase in market interest rates may decrease the value of fixed income securities (bonds); 3) credit risk which
reflects the potential that the issuer of fixed income securities will be unable to make the required payments of
interest and/or principal when due.
A surrender charge may apply on an immediate employer level withdrawal.
Guarantees for the GFC portion are based upon the claims-paying ability of the issuing insurance company.
Insurance products from the Principal Financial Group® are issued by Principal National Life Insurance Company (except in New
York) and Principal Life Insurance Company. Plan administrative services are provided by Principal Life Insurance Company.
Principal National and Principal Life are members of the Principal Financial Group® (The Principal®), Des Moines, IA, 50392.
The Guaranteed Fund Contract is the Group Annuity Contract — Guaranteed Fund Contract available through Principal Life
Insurance Company, a member of the Principal Financial Group®, Des Moines, Iowa, 50392.
The Principal Stable Value Fund (Fund) is a Collective Investment Trust (CIT) maintained by Union Bond and Trust Company
(UBT). UBT serves as the trustee and has retained Morley Capital Management (MCM) to serve as the investment adviser. Both
MCM and UBT are wholly owned subsidiaries of Morley Financial Services, which is a wholly owned subsidiary of the Principal
Financial Group. There is no assurance that the Fund will achieve its stated objective and an investment in the Fund involves risk,
including the possible loss of the principal amount invested. Before investing carefully consider the Fund’s investment objectives,
risks, and charges. Please contact Morley for additional information including disclosure documents, trust documents, fee
schedules, fund characteristics, and standardized performance data.
CP1605DDD-04 | © 2016 Principal Financial Services, Inc. | t1504290397 | 4/2016