Virginia Defined Contribution Plans

You decide how to invest employer contributions made on your behalf using the investment options offered through the Plan. For more information on the options refer to the mutual fund prospectuses, fund fact sheets and disclosure documents via the Web site at www.varetire.org. Select Optional Retirement Plan for Political Appointees from the Defined Contribution Plans tab. Or, you can contact an ING registered representative. You should consider the investment objectives, risk, fees and expenses carefully before investing.

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What are my investment option choices?

The Plan offers a variety of investment options across different asset classes. You may be eligible to participate in the Self-Directed Brokerage Account option for an additional fee. Only public-traded mutual funds are offered through the brokerage option.

For more information about the Plan’s investment options, go to www.varetire.org and select Optional Retirement Plan for Political Appointees from the Defined Contribution Plans tab. Information on Plan Investments is on the top navigation bar. You may also call the Plan Information Line at 1-VRS-DC-PLAN1 (1-877-327-5261).

Please consider the investment objectives, risks, fees and expenses carefully before investing. Read the fund fact sheet and fund prospectus carefully before investing.

For information about the Self-Directed Brokerage, contact TD Ameritrade at 1-866-766-4015. Read the fund information carefully before investing.

The investment options for the ORPPA Plan are the same investment options available to you under the 457 Deferred Compensation and Cash Match Plans. You have a choice of a broad and diverse array of investment options.

VRS is responsible for selecting and monitoring the core investments offered in the VRS defined contribution plans. There is a range of investments that can help you build an investment strategy that’s right for you. The investment options are organized into four distinct tiers representing different overall investment approaches. Depending upon your own preferences, you can mix and match investment options within each tier to help you meet your investment return objectives within your individual risk tolerance and overall investing style.

Tier I: Pre-Mixed Asset Allocation Funds
Tier II: Passive Managed Funds
Tier III: Actively Managed Funds
Tier IV: Self-Directed Brokerage Account Option

Remember that by investing in different Tiers, you are not automatically diversifying your investment portfolio. Please refer to the fund fact sheets to ensure you are getting the diversification you desire by reviewing the top holdings of each fund.

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Tier I: Pre-Mixed Asset Allocation Funds

The VRS Defined Contribution Plans offer three distinct passively managed asset allocation funds in this Tier, each representing a different potential risk versus return profile designed to track their respective market indices. Investment professionals maintain a pre-mixed weighting of specific asset classes (for example, U.S. bonds, U.S. stocks and foreign stocks) to create an asset allocation fund in each investment option. These professionals monitor performance on an ongoing basis and make adjustments as needed to maintain the pre-mixed weightings of these specific asset classes. These asset allocation funds may be most appropriate for those investors who may want to simplify the asset allocation process.

Tier II: Passively Managed Funds

Investors seeking to track the total return performance of the various market indices may want to consider choosing from among the investment options in this tier.

Tier III: Actively Managed Funds:

Investors seeking to exceed the total return performance of the various market indices may want to consider choosing from among the investment options in this tier.

Tier IV: Self-Directed Brokerage Account Option

For an additional fee the Self-Directed Brokerage Account (SDBA) option allows you to select from thousands of publicly traded mutual funds in addition to your VRS Plans’ core investment options. The SDBA option is for knowledgeable and experienced investors who acknowledge and understand the risks and costs associated with the funds available through this option.

Your contributions buy into the investment options along with other participants who choose the same investments. You also will receive an Investment Options Performance (IOP) Report with your account statement each quarter to help you keep up to date on the performance of the investment options in your Plan. A monthly IOP is posted each month on the Plan’s Web site. You also can get your account statement by logging into your account at www.varetire.org. Select the Defined Contribution Plans tab and then Account Log In. You will need your password number to log into your account.

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How do I keep track of my account?

ING, the Plan record keeper, will mail you a quarterly account statement showing your account balance and activity for your Plan. You also can check your account balance online by logging into your account at www.varetire.org. Select Account Log-in from the Defined Contribution Plans drop-down menu. You will need your PIN number to access your account information. Or, you can call the Plan Information Line at toll-free 1-VRS-DC-PLAN1 (1-877-327-5261).

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What happens if I don't give directions as to how my money is to be invested?

If you fail to specify how you want your money invested, your contributions will be placed in the Plan's default investment option until you select your investments. The default option may not be the choice you would want so you should make sure that you specify your own investment options. The default investment option for your Plan is the Balanced Growth Fund.

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Can I split my employer contributions among the different investment options?

Yes. You may allocate your employer contributions in any whole percentages among the core investment options.

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How can I transfer or reallocate amounts from one investment option to another?

Use your password and Social Security number to access your account by selecting Account Log In from the Defined Contribution Plans tab on the Plan Web site at www.varetire.org or call the toll-free Plan Information Line at 1-VRS-DC-PLAN1 (1-877-327-5261).

You can:

Move all or a portion of our existing balances between investment options (subject to Plan rules).
Change how your future contributions are invested.

As you manage your retirement account, please remember that the investment options in your Plan are intended for long-term investment. Nevertheless, you should regularly review your account to be sure you are on the path to achieving your financial goals and make changes as necessary. Please keep in mind that most funds have implemented trading restrictions in an effort to stop market timing and/or excessive trading.

What is market timing and excessive trading

In general, the Securities and Exchange Commission's rules define "market timing" activity to be the frequent buying and selling of fund shares in order to take advantage of the fact that there may be a lag between a change in the value of a fund's respective securities and the reflection of that change in the fund's share price.

"Excessive trading" is generally defined as purchase and sale transactions by a participant that occurs with such frequency and/or such size as to materially affect the fund's ability to meet its investment objective, in the judgment of the fund.

If a fund determines that your trading activity constitutes market timing or excessive trading (according to that fund's definition of market timing or excessive trading), the fund will restrict your ability to trade in its fund. Such restrictions may include, but are not limited to:

limiting you to one trade per certain number of days (e.g. one trade per 30 days, 60 days or 90 days, as determined by each fund company)
requiring that your trades be mailed to ING through U.S. mail, or
closing the fund to new contributions and transfers in.

All decisions regarding whether you are market timing or excessively trading are made by the funds. ING acts only at the direction of the funds available in your ORPPA Plan and your Plan Administrator. As a participant in the ORPPA Plan, it is your responsibility to review the prospectus and/or other disclosure documents for any investment option that you invest in and to understand and adhere to the trading policy and related restrictions set by the fund in its prospectus, as amended from time to time.

Please refer to the Web site at www.varetire.org for more information on market timing or excessive trading.

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