The Deferred Compensation Plan/NYCE IRA offers different strategies for investing your money: investing in one of the Pre-Arranged Portfolios or creating your own portfolio using a combination of the core investment funds. It is recommended that participants choose to invest in either one of the pre-arranged portfolios or create their own portfolio from the core investment funds offered.
Selection of investment options depends on many factors and should be considered carefully. It is advisable that participants consult an independent professional financial planner and/or investment advisor before making investment decisions.
1. Pre-Arranged Portfolios Read More
Advantages of Pre-Arranged Portfolios
For convenience and simplicity, the Deferred Compensation Plan offers pre-arranged portfolios which are made up of varying percentages of the Plan’s core investment options. The pre-arranged portfolios help answer the question: Where should I invest my money? They offer a mix of diversified investments and help participants if they are not comfortable with creating their own portfolio or if they are looking to invest in a professionally managed portfolio.
The benefits of the Pre-Arranged Portfolios include:
Portfolio Diversification - Studies show that most participants' portfolios are under diversified. Pre-Arranged Portfolios are appropriately diversified based on your target retirement date, and offer the simplicity of a single investment vehicle with the benefit of exposure to different asset classes and efficient allocations.
Risk Management - The pre-arranged portfolios are designed to balance the risk participants face between not saving enough money for retirement and ongoing market risk. Given the longer time horizon younger participants have to save, a more aggressive allocation is implemented. As participants age, the asset allocation implemented becomes more conservative.
Portfolio Rebalancing - The Pre-Arranged Portfolios are automatically rebalanced to their target allocations quarterly.
How do the Pre-Arranged Portfolios work?On a quarterly basis, the asset allocation of each pre-arranged portfolio will be adjusted, shifting to a slightly more conservative mix. This increases the likelihood that a participants account will last longer so that it can serve them throughout their retirement years. When a portfolio reaches its horizon, it will roll into the Static Allocation Fund, where it will remain for the duration of the participants payout.
View the Portfolio Fact Sheet (PDF) for information about the investment allocation of each portfolio and their expenses.Pre-Arranged Portfolio Investment Profiles (PDF)
2. Creating Your Own Portfolio from our Core Investment Options Read More
The core investment funds include stable value and variable funds which vary in terms of risk and the potential for return and include several different asset classes. The core funds include the Stable Income Fund, Bond Fund, Equity Index Fund, Global Socially Responsible Index Fund, Mid-Cap Equity Index Fund, International Equity Fund, and Small Cap Equity Fund.
3. Self-Directed Brokerage Option Read More
The Deferred Compensation Plan also offers a Self-Directed Brokerage (SDB) Option for those participants who are knowledgeable about investments and understand the associated risks. You may invest up to 20% of the balance of your account balance in the SDB Option.
For more information on the SDB Option, please call (212) 306-7760, or 888-DCP-3113, if outside NYC. Mutual Funds available through the Self-Directed Brokerage Account are offered by Schwab. Additional information can be obtained by calling Schwab at 1-888-393-7272.
Please consider the investment objectives, risks, fees and expenses carefully before investing. In addition to the investment fund profiles available on this Web site, you may obtain prospectuses on funds available through the Self-Directed Brokerage Option by contacting Schwab at 1-888-393-7272. Read them carefully before investing.
Note: Effective March 13, 2009, transfers out of any Plan investment option will be assessed a 2% redemption fee on the amounts transferred into that option within the previous thirty-two (32) calendar days. Any amounts held longer than thirty-two days (32) consecutive calendar days will not be assessed the redemption fee. This is meant to strongly discourage frequent trading in the Plan. The fees collected will be re-invested back into the option in order to offset the decrease in fund value associated with the trades.