Plan 3 Investments

Introduction to investments

The employee-funded defined contribution part of Plan 3 has two investment programs to choose from: WSIB and Self-Directed. This section takes a closer look at investing with Plan 3 and compares these two programs. Outside of your contributions, investment performance is the primary cause of changes in your Plan 3 account balance. For all investments, past performance is no guarantee of future results. Investments are always tied to some form of risk.

Plan 3 investment programs chart

Two investment programs

The defined contribution part of Plan 3 offers you the choice between two investment programs: the Self-Directed Investment Program and the Washington State Investment Board Program (WSIB). Transfer funds between the two at any time, but you can only contribute to one program at a time.

If you choose the Self-Directed Investment Program, you can take two different approaches. One is the Build and Monitor approach, and the other is One-Step Investing.




One-Step Investing

In this Self-Directed Investment Program, your investments are automatically adjusted for you.

The One-Step Investing approach is made up of 13 Retirement Strategy Funds. Each one is diversified and automatically rebalances, adjusting your asset mix as you move toward a target date for retirement that meets your needs and lifestyle.

To select the Retirement Strategy Fund that’s right for you, take the year you were born and add it to the age you expect to retire or withdraw your funds. The sum is your target date.

Example: 1968 (birth year) + 65 (retirement age) = 2033 (target date) Pick the fund with the date closest to your target date. In this case, 2035 would be the Retirement Strategy Fund.


Retirement Strategy Funds
From lowest to highest risk
Maturity Strategy
2005 2010 2015
2020 2025 2030
2035 2040 2045
2050 2055 2060

The Retirement Maturity Strategy Fund is for investors who have been retired for 15 years or more.



Build and Monitor

In this Self-Directed Investment Program, you select, monitor and adjust your investments.

With Build and Monitor, you select your own mix of individual funds and decide how much to invest in each one. Choose from a menu of professionally managed funds listed in the chart below. You are responsible for monitoring your investments and making changes as you see fit for your circumstances.

The WSIB Investment Program

If you have your contributions directed to the Washington State Investment Board Program, WSIB will invest them in its Total Allocation Portfolio (TAP). A monthly valued fund, the TAP is a diversified mix of U.S. and international stocks, bonds, private equity and real estate investments.

Deciding on an investment program

The WSIB Investment Program

This program is also called the WSIB Total Allocation Portfolio or TAP, which is the name of the fund the program uses. The TAP is a fairly aggressive balanced fund that is intended for long term investing. The investment strategy is to create a portfolio mix designed to generate maximum return in the long term at a prudent level of risk. It includes some asset classes not available in the Self-Directed Investment Program, which increases the portfolio’s diversification but causes it to be a monthly valued portfolio.

Self-Directed Investment Program

Within the Self-Directed Program, you can choose one of two approaches—Build and Monitor or One-Step Investing. To determine which one might be right for you, ask yourself these questions:

  1. Do I want to select my own mix of individual funds?
  2. Am I comfortable deciding how much to invest in each fund?
  3. Do I have the time to keep an eye on my investments and make changes as I get closer to retirement?

If the answer to any of these questions is yes, you might be interested in the Build and Monitor approach to investing. If the answer to any of these questions is no, you might be interested in the One-Step Investing approach.

If you choose from the seven investment funds as part of the Build and Monitor approach to investing, you will be responsible for monitoring your account balances and periodically rebalancing if necessary to maintain your investment objectives.

The One-Step Investing approach is designed for those who answered no to any of the questions above. If you are not interested in selecting, monitoring or making changes to your investments, the Retirement Strategy Fund might be right for you.









Diversification

Diversification is a strategy that can be neatly summed up as "Don't put all your eggs in one basket." The strategy involves spreading your money among various investments in the hope that if one loses money, the others will make up for those losses. Dividing investments among different kinds of assets, such as stocks and bonds, with different risks and returns, can minimize the potential harm from any one asset. You can invest in any combination of the investment funds available through Plan 3.

With the One-Step Investing approach, your Retirement Strategy portfolio is already well diversified and will automatically adjust as you move closer to your target date. With the Build and Monitor approach to investing, you can allocate your contributions among the seven available funds to achieve diversification.

Your portfolio should include investments in several different objective categories.

Spreading your assets among different types of investments might help you achieve a favorable rate of return while minimizing your overall risk of losing money. Market or other economic conditions that can cause one category of assets, or one particular security, to perform very well can often cause another asset category, or another particular security, to perform poorly. Although diversification is not a guarantee against loss, it is an effective strategy to help you manage investment risk.

Performance

As we mentioned before, past investment performance is no guarantee of future results. So why do we share past performance if it can't predict future returns? Viewing past performance can provide you with insight into how a particular investment works and can help you determine what is "normal" behavior for an investment. To see current performance for each option, review the Investment performance section.

Risk

Let's talk about risk. The growth of investments is always tied to some form of risk. Earnings do not always increase. Higher risk investments are designed to have the potential for higher earnings (faster growth), but they also have a greater potential for a loss of principal. Lower risk investments minimize risk, but this also comes at the cost of potential for faster growth. This is generally why younger investors will have higher risk investments where investors closer to retirement age select lower risk investments. The level of risk you choose is a personal decision.

If I didn't make a choice, where am I invested?

If you joined the plan on or after July 22, 2011, the default investment in the plan is a Retirement Strategy Fund that assumes you want to retire at age 65. If you joined the plan before July 22, 2011, the default investment in the plan was the WSIB TAP Fund.

Can I contribute to both the WSIB Investment Program and the Self-Directed Investment Program?

Not automatically. Contributions from your paycheck must go into one investment program or the other. However, once the money has been deposited you can transfer any amount into the other investment program (or other funds) by calling the Plan 3 Investor Services team at 888-327-5596. It is possible to have auto-deposits into one fund and manually transfer some portion of that deposit into the other investment program.

Which fund is the best?

Choosing an investment program is a personal decision you should make after evaluating your risk tolerance and desired involvement level. You might decide you want to invest in only one asset category, or you might like the diversification in the WSIB TAP Fund. If you find you don't have the desire, comfort level or time to devote to your investments, you might prefer to be invested in the Retirement Strategy Funds. Detailed fund information is available in the Investments section.

Investment advice

While DRS and the Plan 3 record keeper can provide you with information about investments, we cannot offer investment advice. If you are still not sure which investment approach might be right for you, talk with your financial advisor. To find out more about each fund, see each investment's Fund Fact Sheet (linked here in the lists above or within each program's section). These fact sheets are prepared by the fund managers and contain information about performance, asset mixes and the goals of the fund.

Investment performance

The table in this section includes performance for the most recent quarter.

As with all investments, past performance is no guarantee of future results. So why do we share past performance if it can't predict future returns? Viewing past performance can provide you with insight into how a particular investment works and can help you determine what is "normal" behavior for an investment.

Plan 3 investment performance as of September 2017

Retirement Strategy Funds (from lowest to highest risk)

Investment option Expenses 3 month 1 year 3 year 5 year 10 year/ since inception
Retirement Maturity Strategy Fund 0.2692% 2.05% 5.28% 4.07% 4.70% 6.08%
Maturity Composite Benchmark - 1.92% 4.93% 3.82% 4.56% 5.70%
2005 Retirement Strategy Fund 0.2670% 2.33% 6.43% 4.48% 5.61% 6.79%
2005 Composite Benchmark - 2.19% 6.07% 4.27% 5.52% 6.46%
2010 Retirement Strategy Fund 0.2637% 2.84% 8.47% 5.23% 6.74% 7.50%
2010 Composite Benchmark - 2.73% 8.09% 5.06% 6.68% 7.32%
2015 Retirement Strategy Fund 0.2611% 3.39% 10.54% 5.99% 7.80% 8.04%
2015 Composite Benchmark - 3.26% 10.14% 5.83% 7.78% 7.91%
2020 Retirement Strategy Fund 0.2653% 3.78% 12.23% 6.51% 8.62% 8.32%
2020 Composite Benchmark - 3.69% 11.82% 6.39% 8.62% 8.26%
2025 Retirement Strategy Fund 0.2745% 4.11% 13.72% 6.92% 9.34% 8.55%
2025 Composite Benchmark - 4.01% 13.19% 6.80% 9.36% 8.56%
2030 Retirement Strategy Fund 0.2818% 4.44% 15.09% 7.30% 9.94% 8.64%
2030 Composite Benchmark - 4.32% 14.57% 7.19% 10.01% 8.76%
2035 Retirement Strategy Fund 0.2802% 4.74% 16.38% 7.54% 10.29% 8.54%
2035 Composite Benchmark - 4.62% 15.82% 7.44% 10.43% 8.77%
2040 Retirement Strategy Fund 0.2686% 5.01% 17.32% 7.70% 10.51% 8.64%
2040 Composite Benchmark - 4.88% 16.82% 7.62% 10.71% 8.90%
2045 Retirement Strategy Fund 0.2620% 5.13% 17.73% 7.82% 10.57% 8.70%
2045 Composite Benchmark - 5.00% 17.22% 7.71% 10.77% 8.93%
2050 Retirement Strategy Fund 0.2620% 5.13% 17.70% 7.83% 10.59% 8.72%
2050 Composite Benchmark - 5.00% 17.22% 7.71% 10.77% 8.93%
2055 Retirement Strategy Fund 0.2620% 5.12% 17.69% 7.83% 10.58% 8.04%
2055 Composite Benchmark - 5.00% 17.22% 7.71% 10.77% 9.30%
2060 Retirement Strategy Fund 0.2619% 5.10% 17.70% N/A N/A 8.33%
2060 Composite Benchmark - 5.00% 17.22% N/A N/A 8.14%

Plan 3 investment performance as of September 2017

Build and Monitor Funds (from lowest to highest risk)

Investment option Expenses 3 month 1 year 3 year 5 year 10 year/ since inception
Short-Term Investment Fund 0.1935% 0.33% 1.03% 0.55% 0.41% 0.66%
Washington State Bond Fund 0.1218% 1.08% 1.54% 3.19% 2.74% 5.36%
Barclays Capital Intermediate Credit Idx - 0.99% 1.58% 2.98% 2.60% 4.76%
Socially Responsible Balanced Fund 0.4528% 2.30% 10.93% 7.68% 8.74% 6.73%
55 S&P 500/45 BC US Aggregate Index - 3.19% 10.87% 6.69% 8.36% 6.14%
US Large Cap Equity Index Fund 0.1158% 4.46% 18.52% 10.74% 14.14% 7.43%
S&P 500 Index - 4.48% 18.61% 10.81% 14.22% 7.44%
Global Equity Index Fund 0.1684% 5.37% 19.20% 8.13% 10.81% 12.52%
MSCI ACWI Inv Mkt Idx - 5.32% 18.73% 7.72% 10.42% 12.12%
US Small Cap Value Equity Index Fund 0.1353% 5.13% 20.75% 12.28% 13.40% 7.09%
Russel 2000 Value Index - 5.11% 20.55% 12.12% 13.27% 7.14%
Emerging Market Equity Index Fund 0.2328% 7.56% 21.20% 4.47% 3.82% 6.34%
MSCI Emerging Markets Inv Mkt Idx - 7.59% 21.43% 4.66% 4.05% 6.65%

Plan 3 investment performance as of June 2017

WSIB Investment Program performance

Investment option Expenses 3 month 1 year 3 year 5 year 10 year/ since inception
Total Allocation Portfolio (TAP) 0.3918% 4.01% 13.44% 6.91% 9.95% 5.47%
Composite Benchmark - 3.45% 13.38% 4.56% 8.54% 4.61%
Plan 3 When I leave service, will my investments continue to gain or lose value?
Yes, your investments will continue to rise or fall based on the performance of your funds. You can always adjust how conservatively or aggressively your money is invested. Log in to your account or call the Plan 3 investor services team at 888-327-5596.

More ways to view performance information

Online account: View the latest performance for all funds through your online account. This shows performance to the most recent month-end. Here you can also change investments quickly and easily (pretty convenient).

Quarterly statement: Includes performance for the funds you currently invest in. Access this online in your plan documents or check out your paper statement if you've opted for mail.

Self-Directed Investment performance PDF: Updated monthly, this is a list of all funds and their performance out to 10 years. The list includes Retirement Strategy and Build and Monitor Funds.

WSIB Program Investment performance PDF: Updated monthly, this table includes the Total Allocation Portfolio (TAP) fund and its performance out to 10 years.

Benchmarking

Benchmarking is the performance objective standard represented by a model portfolio used to define the return against which another portfolio is to be evaluated. Benchmarks do not include calculated user fees.

Plan 3 investments: Retirement Strategy Funds

Funds managed for you. One-Step investing with age-based Retirement Strategy funds.

The One-Step Investing approach is made up of 13 Retirement Strategy Funds. Each one is diversified and automatically rebalances, adjusting your asset mix as you move toward a target date (the date you intend to begin making withdrawals) that meets your needs and lifestyle.

The Retirement Strategy Funds are managed by AllianceBernstein.

Funds within the Self-Directed Investment Program are valued daily. Daily valuation means the fund values are adjusted daily to reflect the most current investment performance. This valuation enables you to have ready access to your funds. You can manage your investments and receive statements and payments more quickly than the monthly valued WSIB Investment Program.

To select the Retirement Strategy Fund that’s right for you, take the year you were born and add it to the age you expect to retire or withdraw your funds. The sum is your target date.

___________ + _____________ = ___________ Birth year Retirement age Target date (Example: 1968 + 65 = 2033) Pick the fund with the date closest to your target date (in the previous example, 2035 would be the closest target date fund). However, if you’d rather, you can choose any of the Retirement Strategy Funds to invest in.

Retirement Strategy Funds are valued daily. Daily valuation means the fund values are adjusted daily to reflect the most current investment performance. This valuation enables you to have ready access to your funds. You can manage your investments and receive statements and payments more quickly than the monthly-valued investments.

These Retirement Strategy Funds each link to a fact sheet with more information about the fund. This information is prepared by AllianceBernstein L.P.

Retirement Strategy Funds
Listed from lowest risk to highest
Maturity Strategy
2005 2010 2015
2020 2025 2030
2035 2040 2045
2050 2055 2060

The Retirement Maturity Strategy Fund is for investors who have been retired for 15 years or more.


Defaulting into Retirement Strategy Funds

If you defaulted into Plan 3, or chose Plan 3 but did not select an investment, you were automatically placed into the Retirement Strategy Fund closest to the year you turn age 65. You can change your investment options at any time.

Retirement Strategy Funds

Investment type
Asset allocation funds
Investment objectives
Seeks to achieve the highest total return over time consistent with its asset mix.
Investment strategy
Diversified asset allocation portfolios designed for people who want to leave ongoing investment decisions to an experienced portfolio management team. The Retirement Strategy Fund is designed to correspond with the date closest to your expected target date for retirement. When you are far from your target date for retirement, most of the assets are invested in globally diversified equity portfolios. As you get closer to the target date for retirement, and continuing for 15 years beyond your target date, the management team gradually adjusts your fund to a more conservative asset mix. That means fewer stocks and more bonds and short-term investments. These assets can help generate income and protect your savings in retirement. The principal value of the fund(s) is not guaranteed at any time, including at the time of the target date or withdrawal.
Fund composition
Investments include U.S. stocks (small to large companies), international stocks, global real estate and bonds.
Investment manager
These funds are provided by the Washington State Investment Board (WSIB) and managed by AllianceBernstein L.P.
Who might want to invest
This could be an appropriate retirement investment if you find you don't have the desire, comfort level or time to select your own mix of funds, monitor them and make changes. Each Retirement Strategy Fund is a complete portfolio that automatically adjusts and rebalances as you move closer to your target date. Asset allocation and balanced investment options and models are subject to the risks of the underlying funds, which can be a mix of stocks/stock funds and bonds/bond funds.

Plan 3 investments: Build and Monitor funds

Funds you manage. With Build and Monitor, you select, monitor and adjust your own investments. Choose from a mix of individual funds and decide how much to invest in each.

Build and Monitor funds (from lowest to highest risk):

Fund fact sheet
Prepared by Morningstar, Inc.
Investment type

Stable value fund

This fund is used by the WSIB Total Allocation Portfolio (TAP), a monthly valued investment. When you make a contribution each month, your money goes to the Short-Term Contribution Interest Fund where it will earn interest for up to 30 days until the next TAP valuation. At that time, your contribution plus the interest earned in the Short-Term Contribution Interest Fund will be transferred to the TAP.

Investment objectives
The Short-Term Investment seeks as a high a level of current income as is consistent with liquidity and stability of principal.
Investment strategy
The Short-Term Investment Fund is a diversified portfolio of short-term debt securities such as variable amount notes, commercial paper, U.S. government securities, repurchase agreements, certificates of deposits of banks and savings institutions and other short-term obligations.
Fund composition
As an alternative to such short-term debt securities, the fund could enter into repurchase or reverse repurchase agreements or invest in shares of registered investment companies that invest in similar debt securities, provided that such companies' investments are valued at cost and any income earned by such investments is allocated and credited to shareholders daily. The fund's dollar-weighted average portfolio maturity will be 60 days or less and the weighted average life of the fund's portfolio will be no longer than 120 days. In addition, the fund will accrue on a straight-line basis the difference between the cost and anticipated principal receipt on maturity of any assets it holds, and hold assets until maturity under usual circumstances.
Investment manager
WSIB has retained BlackRock Institutional Trust Company (BTC) as the investment manager.
Who might want to invest
Might be an appropriate alternative for the more conservative investor or for those dollars you wish to protect against the market fluctuations that affect the other funds offered. Also, might be appropriate for the short-term investor. The Short-Term Investment Fund is not federally guaranteed and might lose value.
Fund fact sheet
Prepared by Washington State Investment Board
Investment type
Income fund
Investment objectives
The Washington State Bond Fund seeks to provide returns while controlling risk by investing in high-quality corporate bonds. The fund's performance objective is to match or exceed the return of the Barclays Capital Intermediate Credit Index.
Investment strategy
Normally invests in a diversified portfolio of intermediate investment grade corporate bonds.
Fund composition
The fund invests in corporate obligations with a rating of at least Baa by Moody's Investors Service, Inc. or BBB by Standard and Poor's. The ratings represent the opinions of the rating agencies regarding the financial strength of a company, and the ability to meet ongoing obligations to the stockholders/policyholders. The portfolio is expected to have an average life of approximately five years.
Investment manager
Washington State Bond Fund is provided and managed by the WSIB.
Who might want to invest
This could be an appropriate retirement investment if you are a conservative investor seeking to build capital gradually through moderate capital appreciation and through compounding of income. It might also be appropriate if you are a more aggressive investor and want to diversify your portfolio. A bond fund's yield, share price and total return change daily and are based on changes in interest rates, market conditions, economic and political news and the quality and maturity of its investments. In general, bond prices fall when interest rates rise and vice versa.
Fund fact sheet
Prepared by Walden Asset Management
Investment type
Social fund
Investment objectives
The Socially Responsible Balanced Fund seeks long-term capital growth through an actively managed portfolio of stocks, bonds and money market instruments.
Investment strategy
At least 30% of the fund's assets are invested in fixed income securities and at most 70% of the Fund's assets invested in foreign and domestic equity securities. Asset allocation will vary based on global economic conditions, current valuations within capital markets, balancing risk and reward, and the relative attractiveness of stocks versus bonds. Equity investments will focus on an opportunity set of domestic and international companies. Fixed income investments are restricted to investment grade securities.
Investment manager
This fund is provided by the WSIB and managed by Walden Asset Management, a division of the Boston Trust and Investment Management Company.
Who might want to invest
This could be an appropriate investment if you are an investor who seeks long-term growth of principal with a moderate level of risk while satisfying investment social criteria. Asset allocation and balanced investment options and models are subject to the risks of the underlying funds, which can be a mix of stocks/stock funds and bonds/bond funds.
Fund fact sheet
Prepared by Morningstar, Inc.
Investment type
Income fund
Investment objectives
This is an index fund that seeks to match the performance of the S&P 500 Index by investing in stocks that make up the index. The S&P 500® Index, considered a large-capitalization benchmark, comprises a sample of leading U.S. companies in leading industries, and accounts for more than 75% of the market value of all publicly traded stocks in the U.S.
Investment strategy
This fund uses a "passive" or indexing approach to achieve the fund's objective. Unlike many funds, this fund does not try to outperform the index; it seeks to track and does not seek temporary defensive positions when markets decline or appear overvalued.
Fund composition
Invests in a diversified sample of publicly traded common stocks throughout the U.S.
Investment manager
WSIB has retained BlackRock Institutional Trust Company (BTC) as the investment manager.
Who might want to invest
This fund is intended for long-term investors seeking to capture the earnings and growth potential of large U.S. companies. S&P 500® Index is a registered trademark of Standard & Poor's Financial Services LLC and is an unmanaged index considered indicative of the domestic Large-Cap equity market.
Fund fact sheet
Prepared by Morningstar, Inc.
Investment type
Index fund
Investment objectives
This is an index fund that seeks to match the performance of the MSCI ACWI Investable Market Index (ACWI IMI), which represents approximately 99% of the world's total market capitalization. Covering large-, mid- and small-capitalization securities across 45 developed and emerging market countries, the ACWI IMI provides broad global equity market exposure.
Investment strategy
Investing in foreign markets might offer additional diversification benefits to an investment portfolio. Diversification is not a guarantee against loss, it can be an effective strategy to help you manage investment risk.
Fund composition
Invests in a broadly diversified portfolio of small, medium and large companies in developed and emerging markets.
Investment manager
WSIB has retained BlackRock Institutional Trust Company (BTC) as the investment manager.
Who might want to invest
This fund is intended for long-term investors seeking to capture the earnings and growth potential of domestic and foreign companies in both developed and emerging markets. Foreign investments involve special risks, including currency fluctuations, taxation differences and political developments.
Fund fact sheet
Prepared by Morningstar, Inc.
Investment type
Index fund
Investment objectives
This is an index fund that seeks to match the return of the Russell 2000® Value Index by investing in a diversified sample of the stocks in the Index. The Index comprises small-cap U.S. companies that have high dividend yields and low prices relative to their earnings or book value. These stocks are a subset of the Russell 2000® Index, which measures the performance of the 2000 smallest companies in the Russell 3000® Index. The Russell 3000®Index represents 98% of the total U.S. equity market capitalization.
Investment strategy
Value investing focuses on long-term gains through a portfolio of stocks that experience lower volatility than higher growth stocks.
Fund composition
Invest in a diversified sample of publicly traded common stocks throughout the U.S. It is an index fund that invests in the 2000 smallest companies in the Russell 3000® Index from every sector and industry of the U.S. equity market.
Investment manager
WSIB has retained BlackRock Institutional Trust Company (BTC) as the investment manager.
Who might want to invest
This fund is intended for long-term investors seeking growth of capital. The risk level for this fund is high, as small capitalization stocks tend to exhibit more volatility than larger capitalization stocks. Equity securities of small and mid-sized companies can be more volatile than securities of larger, more established companies.
Fund fact sheet
Prepared by Morningstar, Inc.
Investment type
Index fund
Investment objectives
This is an index fund that seeks to match the performance of the MSCI Emerging Markets Investable Markets Index (IMI), comprising large-, mid- and small-capitalization securities in 26 emerging markets.
Investment strategy
This fund invests in a portfolio of international equity securities, depositary receipts, registered investment companies and derivatives with the objective of providing returns which approximate as closely as practicable the capitalization weighted total rates of return of the markets in certain countries for equity securities traded outside of the United States.
Fund composition
Invest in a broadly diversified portfolio of small-, medium- and large-sized companies in Emerging Markets.
Investment manager
WSIB has retained BlackRock Institutional Trust Company (BTC) as the investment manager.
Who might want to invest
This fund is intended for long-term investors seeking to capture the earnings and growth potential of foreign companies in emerging market countries. Equity securities of companies located in emerging markets involve greater risks than investing in more established markets, including currency fluctuations, political developments and share illiquidity.

Plan 3 investments: WSIB program

If you have your contributions directed to the Washington State Investment Board (WSIB) Investment Program, they will be invested in the WSIB’s Total Allocation Portfolio (TAP). The TAP is actively managed by the WSIB and is a diversified portfolio of U.S. and international stocks, bonds, private equity and real estate investments.

The TAP is a fairly aggressive balanced fund that is intended for long-term investing. The investment strategy is to create a portfolio mix designed to generate maximum return in the long term at a prudent level of risk. It includes some asset classes not available in the Self-Directed Investment Program, which increases the portfolio’s diversification and causes it to be a monthly valued portfolio.

How to change your investments

Collapse section preview text.

Can I change investments and when?
Yes, make changes to your investments at any time, even after retirement. Change your investments online or call 888-327-5596.
If I didn't make a choice, where am I invested?
If you joined Plan 3 on or after July 22, 2011, the default investment program is the Retirement Strategy Fund that assumes you want to retire at age 65. If you joined the plan before July 22, 2011, the default investment was the WSIB TAP Fund.
How do I move money between the WSIB and the Self-Directed funds?

To move funds to or from the TAP Fund, contact a Plan 3 Investor Services Representative at 888-327-5596 between 8 am and 5 pm (Pacific Time), Monday through Friday. The TAP Fund is valued only once a month and the transfer of funds can take up to 60 days to complete.

Your payroll department makes a deposit into Plan 3 based on instructions you have given them. If you want your contributions directed to the same funds as your current balance allocation, fill out a Change of Investment Program form and return it to your payroll/benefits department.

How do I move my account balance to another investment?
Let's say you'd like to move your retirement date (select a new Retirement Strategy Fund), or you want to select another fund. You can quickly and easily transfer part or all of your Plan 3 account balance from one fund to another. The easiest way to do this is through your online account. You can also contact the Plan 3 record keeper at 888-327-5596 for assistance.

Trading Restrictions

To safeguard members against the effects of excessive trading, Plan 3 has established trading restrictions.

Funds in the Self-Directed Investment Program are protected from the effects of excessive trading. If you are transferring more than $1,000 out of a fund, you are required to wait 30 calendar days before transferring money back into that same fund. The 30-day window is based on the last time you made a transfer out of the fund. The restriction will not affect your regular contribution or the ability to leave state service and withdraw contributions and earnings from Plan 3. DRS periodically reviews trade data to identify excessive trading. If existing restrictions are not sufficiently addressing excessive trade practices, DRS might take additional action. DRS reserves the right to establish or revise restrictions to comply with federal or state regulations, or as circumstances indicate.

Fund fees and expenses

At just a fraction of a percent, most investment fees seem pretty insignificant and many of us ignore them. But knowing the true cost of your investments is a critical part of retirement savings.

Plan 3 investment fees as of September 2017

Retirement Strategy Funds (from lowest to highest risk)

Plan 3 Funds Manager fee Manager administrative fee WSIB fee Record keeping fee Total
Retirement Maturity Strategy Fund 0.1569% 0.0000% 0.0203% 0.0925% 0.2697%
2005 Retirement Strategy Fund 0.1547% 0.0000% 0.0203% 0.0925% 0.2675%
2010 Retirement Strategy Fund 0.1514% 0.0000% 0.0203% 0.0925% 0.2642%
2015 Retirement Strategy Fund 0.1488% 0.0000% 0.0203% 0.0925% 0.2616%
2020 Retirement Strategy Fund 0.1533% 0.0000% 0.0203% 0.0925% 0.2661%
2025 Retirement Strategy Fund 0.1625% 0.0000% 0.0203% 0.0925% 0.2753%
2030 Retirement Strategy Fund 0.1696% 0.0000% 0.0203% 0.0925% 0.2824%
2035 Retirement Strategy Fund 0.1677% 0.0000% 0.0203% 0.0925% 0.2805%
2040 Retirement Strategy Fund 0.1588% 0.0000% 0.0203% 0.0925% 0.2716%
2045 Retirement Strategy Fund 0.1496% 0.0000% 0.0203% 0.0925% 0.2624%
2050 Retirement Strategy Fund 0.1495% 0.0000% 0.0203% 0.0925% 0.2623%
2055 Retirement Strategy Fund 0.1495% 0.0000% 0.0203% 0.0925% 0.2623%
2060 Retirement Strategy Fund 0.1495% 0.0000% 0.0203% 0.0925% 0.2623%

Plan 3 investment fees as of September 2017

Build and Monitor Funds (from lowest to highest risk)

Plan 3 Funds Manager fee Manager administrative fee WSIB fee Record keeping fee Total
Short-Term Investment Fund 0.0800% 0.0007% 0.0203% 0.0925% 0.1935%
Washington State Bond Fund 0.0000% 0.0090% 0.0203% 0.0925% 0.1218%
Socially Responsible Balanced Fund 0.3200% 0.0200% 0.0203% 0.0925% 0.4528%
U.S. Large Cap Equity Index Fund 0.0000% 0.0030% 0.0203% 0.0925% 0.1158%
Global Equity Index Fund 0.0400% 0.0156% 0.0203% 0.0925% 0.1684%
U.S. Small Cap Value Equity Index Fund 0.0100% 0.0125% 0.0203% 0.0925% 0.1353%
Emerging Market Equity Index Fund 0.1000% 0.0200% 0.0203% 0.0925% 0.2328%

WSIB Investment Program fees as of September 2017

Plan 3 Funds Manager fee Manager administrative fee WSIB fee Record keeping fee Total
Total Allocation Portfolio (TAP) 0.3856% 0.0127% 0.0000% 0.0000% 0.3983%

More about Plan 3 fees

At just a fraction of a percent, most investment fees seem pretty insignificant and many of us ignore them. But knowing the true cost of your investments is a critical part of retirement savings. Let's take a closer look at investment fees. Plan 3 has two different types of fees: Administrative and management.

Administrative fees: These cover investment services provided by the Washington State Investment Board (WSIB), recordkeeping, communications and customer service. Plan 3 administrative fees are included in the price of shares and won't be visible on your statement. Administrative fees apply to all customers. This fee is based on the administrative costs of the program and is determined annually. Changes to the fee, if any, usually go into effect in July.

Because Plan 3 is profit–neutral, we are able to keep the fees low. The Plan 3 administrative fee includes WSIB and recordkeeping fees. These total 0.1128%.

Management fees: Management fees usually make up the bulk of fund expenses. Why? The funds are managed by teams of investment professionals. The fees vary with each investment option. Management fees are included in the price of shares and won't be visible on your statement. See the Plan 3 fund fees table to view actual management fees for each fund. WSIB works with fund managers under contract to keep fees low. You always have the option to change your investment selection for Plan 3. When selecting any investment, it is beneficial to review the management fees.

Example of fees applied to a $10,000 balance

This example is simplified because normally your investments would vary each quarter depending on your contributions and the performance of the market. So every quarter would be calculated based on the exact account balance and performance at the time.

For Plan 3, the annual administrative fee is 0.1128%. Let's move the decimal over two places to convert the percentage to a decimal, that gives us a 0.001128.

$10,000 x 0.001128 = $11.28 annual administrative fee



The management fee varies by fund. For example, let’s use the 2035 Retirement Strategy Fund. This fund has a management fee of 0.1667% annually.

$10,000 x 0.001667 = $16.77 annual management fee

The total annual fees for the $10,000 balance would be $28.05

Are there any fees for moving my money among different funds in Plan 3?
No, there are no transaction fees for switching funds. Each fund has its own management fee so your total fees will either increase or decrease depending on the management fee of the fund that you switched to.
Does Plan 3 charge withdrawal fees for taking money out of my account?
No, Plan 3 does not charge redemption, withdrawal, check or account maintenance fees.
Are the Plan 3 fees expensive compared to other plans or options?
The Plan 3 fees have been negotiated for your benefit. They are some of the lowest in the industry.
How are the fees for the investments paid?
The fees for your investments are paid as part of the reconciliation of your funds. In other words, the balance you see in your account is after fees. When the balance is calculated, the fee is included in any gain or loss your account experiences. You do not receive a bill or an annual deduction from your account. The balance you see is your actual account balance.

Glossary

The following investment terms are used frequently in Plan 3 materials. If you find a term that is unfamiliar to you, this section might help.

Asset:
Any tangible or intangible item that has value in an exchange. A bank account, a home or shares of stock are all examples of assets.
Asset allocation:
Asset allocation involves dividing your investments among different categories, such as stocks, bonds and cash.
Asset classes:
Investments that have similar characteristics. The three main asset classes are stocks, bonds and cash.
  • Stock: An instrument that signifies an ownership position (called equity) in a corporation, and a claim on its proportional share in the corporation's assets and profits. Most stock also provides voting rights, which give shareholders a proportional vote in certain corporate decisions, such as the election of corporate directors.
  • Bond: A debt security, similar to an IOU. When you buy a bond, you are lending money to an issuer. In return for the loan, the issuer promises to pay you a specified rate of interest during the life of the bond and to repay the principal when it "matures," or comes due.
  • Cash equivalents: Short-term investments that are readily convertible into cash, such as money market holdings, short-term government bonds or Treasury bills, marketable securities and commercial paper.
Benchmark (or benchmarking):
The performance objective standard represented by a model portfolio used to define the return against which another portfolio is to be evaluated.
Diversification:
Diversification is a strategy that can be neatly summed up as "Don't put all your eggs in one basket." The strategy involves spreading your money among various investments in the hope that if one loses money, the others will make up for those losses. Dividing investments among different kinds of assets, such as stocks and bonds, with different risks and returns, can minimize the potential harm from any one asset.
Equity:
Net ownership of an asset. Since stocks represent ownership of a company, stocks are called equity investments and the stockholder is said to have equity in the company.
Index fund:
A type of investment fund whose investment objective typically is to achieve approximately the same return as a particular market index, such as the Standard & Poor's 500 Index, the FTSE Russell 2000 Index or the Wilshire 5000 Total Market Index.
Institutional investor:
An organization whose primary purpose is to invest its assets or those held in trust by it for others. Includes pension funds, investment companies, universities and banks.
Portfolio:
The combined holdings of stock, bond, commodity, real estate and other investments by an individual or institutional investor.
Rebalancing:
Bringing a portfolio back to its original asset allocation mix. This is necessary because over time, some investments will grow faster than others, and holdings might become out of alignment with investment goals.
Risk:
The degree of uncertainty about the rate of return on an asset and the potential harm that could arise when financial returns are not what the investor expected. In general, as investment risks rise, investors seek higher returns to compensate them for taking on such risks.
Retirement Strategy Fund:
A diversified mutual fund that automatically shifts toward a more conservative mix of investments as it approaches a particular year in the future, known as its target date. A Retirement Strategy Fund investor picks a fund with the right target date based on his or her particular investment goal. The managers of the fund then make all decisions about asset allocation, diversification and rebalancing. Retirement Strategy Funds are also known as lifecycle funds.
Time horizon:
The number of months, years or decades you need to invest to achieve your financial goal.

Resources

These resources include organizations outside of the Department of Retirement Systems. Here you'll find additional information on investing as well as your rights as a plan member.

Financial Literacy and Education Commission
888-MyMoney - mymoney.gov
MyMoney.gov is an online point of access to financial information from the 21 federal agencies, departments and bureaus that make up the Financial Literacy & Education Commission. Find information about how to plan for a host of life events that have financial implications, such as birth or adoption of a child, home ownership or retirement.

U.S. Securities and Exchange Commission (SEC)
888-SEC-6585 - sec.gov
The mission of the U.S. Securities and Exchange Commission is to protect investors, maintain fair, orderly and efficient markets and facilitate capital formation.

Washington State Department of Financial Institutions (DFI)
877-746-4334 - TTY: 360-664-8126 - dfi.wa.gov
DFI provides regulatory oversight for our state's financial service providers.

Washington State Investment Board (WSIB)
360-956-4600 - sib.wa.gov
WSIB closely monitors the performance of all Plan 3 investment options. Safeguarding and maximizing your retirement dollars is one of the investment board's highest priorities. Trustees of the WSIB have fiduciary responsibility to act only for the benefit of the participants.

Contact

For more information about Plan 3, or assistance with your account, contact us:

Plan 3 defined contribution (the account you contribute to)

   888-327-5596

   Email savewithwa@empower-retirement.com


Plan 3 defined benefit (the account your employer contributes to)

Contact DRS