DCP Investments

Introduction to investments

Outside of your contributions, investment performance is the primary cause of changes in your DCP account balance. DCP offers you two different approaches to investing and several different fund options. For all investments, past performance is no guarantee of future results. Investments are always tied to some form of risk.

DCP has a total of 20 investment options you can choose from. Each of these investments falls into one of two main approaches: Build and Monitor or One-Step investing. Before we look at the differences between these two approaches, let's look at a few standard investment principals.

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.

So now we've seen that with investments there is always some form of risk and that past performance is no guarantee of future results. But how do you choose an investment? As we said before, DCP has two types of investment approaches: Build and Monitor or One-Step investing.

To determine which approach

Build and Monitor or One-Step Investing — might be right for you, ask yourself these questions:

  • Do I have the desire to select my own mix of individual funds?
  • Am I comfortable deciding how much to invest in each fund?
  • Do I have the time to watch my investments and make changes as I approach retirement?

If you answered:

  • Yes: You might be interested in the Build and Monitor approach.
  • No: You might be interested in the One-Step Investing approach.

One-Step Investing

Your investments are automatically adjusted for you

The One-Step Investing approach is made up of 13 Retirement Strategy Funds, also called age-based or target date 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. 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.

Build and Monitor

You select, monitor and adjust your investments

  • Select your own mix of individual funds and decide how much to invest in each.
  • Choose from a menu of professionally managed funds listed in the chart on the right. The risk and potential returns of the funds range from low to high.
  • Monitor and make changes to investments on your own.

With the Build and Monitor approach to investing, you can diversify by allocating your contributions among the available funds. To help achieve long-term retirement security, 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 investment, 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. For information on individual investing and diversification, visit the U.S. Department of Labor website.



Many investment professionals suggest putting your entire account balance and all future contributions into one strategy fund. If your target date should change, you can always transfer your money to a Retirement Strategy Fund that more closely matches your revised date. The Retirement Maturity Strategy Fund is allocated for investors who have been retired for 15 years or more.

While DRS and the DCP record keeper can provide you with information about investments, we cannot offer investment advice. If you are still not sure which investment approach may be right for you, talk with your financial advisor. To find out more about each fund, visit the investment sections (Retirement Strategy Funds or Build and monitor funds) and see each investment's Fund Fact Sheet. 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.

DCP investment performance as of Dec. 31, 2018

Retirement Strategy Funds listed from lowest to highest risk Print version

Investment option Expenses 3 month 1 year 3 year 5 year 10 year/ since inception
Retirement Maturity Strategy Fund 0.1547% -3.50% -2.40% 3.80% 3.11% 6.41%
Maturity Composite Benchmark - -3.43% -2.72% 3.22% 2.73% 6.17%
2005 Retirement Strategy Fund 0.1532% -3.92% -2.68% 4.31% 3.39% 7.27%
2005 Composite Benchmark - -3.83% -3.00% 3.77% 3.05% 7.15%
2010 Retirement Strategy Fund 0.1496% -5.53% -3.97% 4.95% 3.72% 8.06%
2010 Composite Benchmark - -5.42% -4.21% 4.46% 3.43% 8.11%
2015 Retirement Strategy Fund 0.1468 -7.14% -5.20% 5.58% 4.07% 8.60%
2015 Composite Benchmark - -7.00% -5.42% 5.11% 3.78% 8.70%
2020 Retirement Strategy Fund 0.1484 -8.59% -6.26% 5.91% 4.21% 8.90%
2020 Composite Benchmark - -8.40% -6.50% 5.47% 3.95% 9.09%
2025 Retirement Strategy Fund 0.1575% -9.60% -6.98% 6.24% 4.35% 9.17%
2025 Composite Benchmark - -9.34% -7.20% 5.76% 4.09% 9.44%
2030 Retirement Strategy Fund 0.1651% -10.55% -7.62% 6.53% 4.49% 9.24%
2030 Composite Benchmark - -10.27% -7.88% 6.05% 4.22% 9.59%
2035 Retirement Strategy Fund 0.1661% -11.41% -8.29% 6.70% 4.51% 9.15%
2035 Composite Benchmark - -11.12% -8.52% 6.25% 4.26% 9.56%
2040 Retirement Strategy Fund 0.1557% -12.00% -8.78% 6.81% 4.54% 9.19%
2040 Composite Benchmark - -11.79% -9.06% 6.32% 4.28% 9.64%
2045 Retirement Strategy Fund 0.1463% -12.42% -9.21% 6.81% 4.55% 9.21%
2045 Composite Benchmark - -12.24% -9.46% 6.31% 4.28% 9.64%
2050 Retirement Strategy Fund 0.1463% -12.45% -9.19% 6.82% 4.55% 9.22%
2050 Composite Benchmark - -12.24% -9.46% 6.31% 4.28% 9.64%
2055 Retirement Strategy Fund 0.1463% -12.44% -9.17% 6.83% 4.56% 6.77%
2055 Composite Benchmark - -12.24% -9.46% 6.31% 4.28% 7.40%
2060 Retirement Strategy Fund 0.1463% -12.49% -9.24% 6.82 N/A 4.63%
2060 Composite Benchmark - -12.24% -9.46% 6.31 N/A 4.29%

DCP investment performance as of Dec. 31, 2018

Build and Monitor Funds listed from lowest to highest risk Print version

Investment option Expenses 3 month 1 year 3 year 5 year 10 year/ since inception
Savings Pool 0.0010% 0.61% 2.27% 1.80% 1.30% 2.05%
Washington State Bond Fund 0.0090% 1.02% 0.28% 3.30% 2.98% 5.38%
Barclays Capital Intermediate Credit Idx - 0.75% 0.01% 2.44% 2.47% 4.84%
Socially Responsible Balanced Fund 0.3400% -7.53% -2.63% 6.97% 5.69% 8.72%
55 S&P 500/45 BC US Aggregate Index - -7.53% -3.95% 5.54% 4.95% 8.55%
US Large Cap Equity Index Fund 0.0030% -13.49% -4.34% 9.30% 8.54% 13.22%
S&P 500 Index - -13.52% -4.38% 9.26% 8.49% 13.12%
Global Equity Index Fund 0.0556% -13.18% -9.64% 7.11% 4.65% 9.68%
MSCI ACWI Inv Mkt Idx - -13.28% -10.08% 6.49% 4.17% 9.17%
US Small Cap Value Equity Index Fund 0.0225% -18.65% -12.69% 7.61% 3.86% 10.47%
Russel 2000 Value Index - -18.67% -12.86% 7.37% 3.61% 10.40%
Emerging Market Equity Index Fund 0.1200% -7.42% -15.04% 8.63% 1.48% 4.03%
MSCI Emerging Markets Inv Mkt Idx - -7.44% -15.05% 8.51% 1.56% 4.19%

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 DCP documents or check out your paper statement if you've opted for mail.

Investment performance PDF: Updated monthly, this is a list of all funds and their performance out to 10 years


What is investment performance?

Investment performance is the return on an investment fund and is measured over a specific period. DRS uses investment tables to help you compare the performance of all available investments at one time.

Below each investment name, you will see an additional row that is labeled benchmark or index (indented slightly). While they have different labels, these benchmark or index rows serve the same purpose—to help you compare an investment’s performance to the expectations set for it.

DRS offers two ways for you to build your investment portfolio: Retirement Strategy Funds and Build and Monitor funds.

Build and Monitor funds: Available funds include a bond fund, a short-term investment fund, a socially responsible fund and a series of index funds. Index funds are based on publically traded funds. For example, the US Large Cap Equity Index Fund performance can be measured against the Standard and Poor 500 Index numbers because their investment mixes mirror each other.

Retirement Strategy Funds: Also called age-based or target date funds, the risk-level of these funds is adjusted as you approach retirement age (reduced as you age). Retirement Strategy Funds are easy to spot because they have a year attached to the name, such as 2030 or 2055. This fund performance is measured using benchmarks. Unlike index funds, which have corresponding market index performance, Retirement Strategy Funds can be made up of multiple index measurements depending on the proportions of fund-types invested. Each benchmark is unique to the fund it mirrors.

While benchmarks and indexes are as close a comparison as you can have to your actual investment, the measurement tools do not include any fees associated with the funds. However, fees are calculated into the investment performance numbers you receive. You cannot invest directly in a benchmark or index.



Why is investment performance important?

Now you may be wondering: What do people actually do with this information? Why is investment performance a helpful tool? Three reasons: Past, present and future.

Past: 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.

Present: How are your investments doing? Are they meeting their benchmark goals? How do they compare to other funds? Use the tables to look at how your funds perform over time.

Future: How close are you to retirement? 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.

When gathering information to make a decision, don’t rely on performance alone. Be sure to consider investment fees when deciding whether to move your investments. Some investments have higher fees. In addition to fees, consider the risk level for the investment. In DRS performance and fee tables, investments are listed in order from lowest to highest risk. For specific information about a fund’s risk levels, view the fund fact sheet for that investment.

While DRS and the 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.

DCP investments: Retirement Strategy Funds

Funds managed for you. Retirement Strategy Funds are also called target date, age-based and time horizon funds. Each of the 13 funds is designed to diversify and rebalance automatically, adjusting your asset mix as you age toward the target date you will begin withdrawing funds.

A Retirement Strategy Fund will gradually shift its emphasis from more aggressive investments to more conservative ones based on its target date.

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

Some DCP enrollment methods automatically default you into the Retirement Strategy Fund closest to the year you turn age 65. These situations include automatic enrollment, using the DCP Quick Enrollment form or leaving the investment selection blank in the longer DCP enrollment form.

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.

DCP investments: Build and monitor funds

Funds you manage yourself. With this approach to investing, you can diversify by allocating your contributions among the available funds.

Here is a brief summary of each fund along with a link to its corresponding fact sheet. Each fund has a fact sheet with detailed information about the fund. These fact sheets are prepared by the fund managers.

Build and monitor funds ranked from lowest to highest risk:

Fund fact sheet
Prepared by Washington State Investment Board
Investment type
Stable value fund
Investment objectives
Seeks to preserve principal while earning a rate of return in excess of the current yield of U.S. Treasury securities of similar maturities.
Investment strategy
A diversified portfolio with short-term cash funds and "guaranteed" investment contracts (known in the industry as GICs) that are issued and backed by insurance companies. Yields on insurance company investments, which have an average maturity between two and four years, are based on treasuries of similar maturities and will move up and down based on current market conditions. This fund is managed to facilitate liquidity and maintain stability of returns.
Fund composition
The fund invests in two to four year interest-bearing contracts of insurance companies rated Aa or higher by Moody's Investors Service, Inc., and with banks that are subject to the Washington Public Deposit Protection Act. 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. A further measure of preservation is achieved by buying contracts from a number of companies. While each contract within the Savings Pool pays a fixed rate, the yield to the participant fluctuates slightly from month-to-month as older contracts mature and new contracts are added to the Savings Pool.
Investment manager
The Savings Pool is provided and managed by the Washington State Investment Board (WSIB).
Who might want to invest
This 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. The Savings Pool is not federally guaranteed and could lose value. Stable Value funds have interest rate, inflation and credit risks that are associated with the underlying assets owned by the fund.
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.

How to change your investments

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 DCP account balance from one fund to another. The easiest way to do this is through your online account. You can also contact the DCP record keeper at 888-327-5596 for assistance.

Are there any limits to how many times I can transfer my funds?

Yes. Moving or transferring funds between investments is also called trading. See the following section for more information about trading restrictions.

Trading restrictions

To safeguard participants against the effects of excessive trading, DCP has established trading restrictions that regulate how frequently you can change investments.

Excessive trading (also referred to as "market timing") involves transferring significant amounts of money and/or making frequent trades between investment options. This practice requires more cash on hand to honor the frequent trades and transfers. Because the excess cash is used to cover potential transfers instead of being invested, long-term returns can be lowered for other participants. Excessive trading can also increase fund management costs.

If you transfer more than $1,000 out of a fund, you will be 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. This restriction will not affect your regular contribution or the ability to separate from state service and withdraw contributions and earnings from DCP. Transfers of $1,000 or less are not impacted by the trading restrictions.

DCP periodically reviews trade data to identify excessive trading. If DCP determines that existing restrictions are not sufficiently addressing excessive trade practices, DCP, at its discretion, might take additional action.

DCP reserves the right to establish additional or revise existing restrictions to comply with federal or state regulations or as circumstances indicate. In addition to the program's trading restrictions described above, DCP will also comply with restrictions put in place by our fund managers.

Fund fees and expenses

All investments include costs which take the form of 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.

DCP investment fees as of July 2018

Build and Monitor Funds listed from lowest to highest risk

DCP Funds Manager fee Manager administrative fee WSIB fee Record keeping fee DRS fee Total
Retirement Maturity Strategy Fund 0.1546% 0.0000% 0.0205% 0.0625% 0.0453% 0.2829%
2005 Retirement Strategy Fund 0.1531% 0.0000% 0.0205% 0.0625% 0.0453% 0.2814%
2010 Retirement Strategy Fund 0.1497% 0.0000% 0.0205% 0.0625% 0.0453% 0.2780%
2015 Retirement Strategy Fund 0.1469% 0.0000% 0.0205% 0.0625% 0.0453% 0.2752%
2020 Retirement Strategy Fund 0.1492% 0.0000% 0.0205% 0.0625% 0.0453% 0.2775%
2025 Retirement Strategy Fund 0.1583% 0.0000% 0.0205% 0.0625% 0.0453% 0.2866%
2030 Retirement Strategy Fund 0.1658% 0.0000% 0.0205% 0.0625% 0.0453% 0.2941%
2035 Retirement Strategy Fund 0.1661% 0.0000% 0.0205% 0.0625% 0.0453% 0.2944%
2040 Retirement Strategy Fund 0.1554% 0.0000% 0.0205% 0.0625% 0.0453% 0.2827%
2045 Retirement Strategy Fund 0.1468% 0.0000% 0.0205% 0.0625% 0.0453% 0.2751%
2050 Retirement Strategy Fund 0.1468% 0.0000% 0.0205% 0.0625% 0.0453% 0.2751%
2055 Retirement Strategy Fund 0.1468% 0.0000% 0.0205% 0.0625% 0.0453% 0.2751%
2060 Retirement Strategy Fund 0.1468% 0.0000% 0.0205% 0.0625% 0.0453% 0.2751%

DCP investment fees as of July 2018

Build and Monitor Funds listed from lowest to highest risk

DCP Funds Manager fee Manager administrative fee WSIB fee Record keeping fee DRS fee Total
Savings Pool Fund 0.0000% 0.0011% 0.0205% 0.0625% 0.0453% 0.1294%
Washington State Bond Fund 0.0000% 0.0086% 0.0205% 0.0625% 0.0453% 0.1369%
Socially Responsible Balanced Fund 0.3200% 0.0200% 0.0205% 0.0625% 0.0453% 0.4683%
U.S. Large Cap Equity Index Fund 0.0000% 0.0030% 0.0205% 0.0625% 0.0453% 0.1313%
Global Equity Index Fund 0.0400% 0.0156% 0.0205% 0.0625% 0.0453% 0.1839%
U.S. Small Cap Value Equity Index Fund 0.0100% 0.0125% 0.0205% 0.0625% 0.0453% 0.1508%
Emerging Market Equity Index Fund 0.1000% 0.0200% 0.0205% 0.0625% 0.0453% 0.2483%

More about DCP costs

All investments include costs which take the form of 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 costs. DCP has two different types of costs: Administrative and management.

Administrative costs: These cover investment services provided by the Washington State Investment Board (WSIB), recordkeeping, communications and customer service. For DCP these fees are listed on your quarterly statement under "Expenses." Administrative costs apply to all customers, are based on the administrative costs of the program and are determined annually. Changes, if any, usually go into effect in July.

Because DRS only recovers the cost of administering DCP, we keep the fees low. The DCP administrative costs include WSIB, recordkeeping and the DRS administrative cost. As of July 2018, the administrative fee for DCP is 0.1283%, which is very low for voluntary retirement savings. For this reason, many DCP participants choose to have savings plans from other employers rolled into their DCP savings-to consolidate and simplify retirement funds and to save costs. To see if this option is right for you, be sure to consider any potential costs and investment limitations.

Management costs: These make up the bulk of fund expenses. Why? The funds are managed by teams of investment professionals. The costs vary with each investment option. Management costs are included in the price of shares and won't be visible on your statement. See the DCP fees table to view actual management fees for each fund.

Now this 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.

Example of fees applied to a $10,000 balance

For DCP, the annual administrative fee is 0.1283%. Let's move the decimal over two places to convert the percentage to a decimal, that gives us a 0.001283.

$10,000 x 0.001283 = $12.83 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 0.1661% annually.

$10,000 x 0.001661 = $16.61 annual management fee

The total annual fees for the $10,000 balance would be $29.44

Glossary

The following investment terms are used frequently in DCP 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.
Asset mix:
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, to 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 program participant.

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 DCP 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.

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