Sample Participant Notice
Qualified Default Investment Alternative Notice
For plans without automatic enrollment
Instructions to Plan Sponsor: This notice should be sent on company letterhead. When you customize the letter, tailor
the content in brackets in the text below with the appropriate information for your plan or plan participants. Delete
all instructional headings as appropriate. This document is designed as a notification for 401(k) plans. If your plan is
another type (403(b), profit-sharing, or money purchase), further customization is required.
To help you prepare for retirement, [Company name] offers you a 401(k) plan. You can choose to invest the contributions
made to your account in a number of investment options. This notice describes the investment that will be used for
contributions allocated to your account in the event you fail to select an investment option.
Investing in the Plan
Unless you make an investment selection, your contributions will be invested in the default option for the Plan.
[For plans using a default investment other than American Funds Target Date Retirement Series® — Provide a description of
the default fund option(s) selected for the plan. Be sure to include: (1) a description of the circumstances under which assets
in the individual account of a participant or beneficiary may be invested on behalf of the participant and beneficiary in a
qualified default investment alternative; (2) a description of the qualified default investment alternative, including a
description of the investment objectives, risk-and-return characteristics (if applicable), and fees and expenses associated
with the investment alternative; (3) a description of the right of the participants and beneficiaries on whose behalf assets
are invested in a qualified default investment alternative to direct the investment of those assets to any other investment
alternative under the plan, without financial penalty; and (4) an explanation of where the participants and beneficiaries can
obtain investment information concerning the other investment alternatives available under the plan.]
[For plans using American Funds Target Date Retirement Series as the plan’s default investment option:]
The default option for our Plan is the American Funds Target Date Retirement Series. Designed to simplify your investment
decision-making, the Series is made up of 11 target date fund portfolios, each composed of a different mix of the American
Funds, with retirement dates ranging from 2010 through 2060 in five-year increments. Each target date fund serves as a single
diversified retirement portfolio — with an underlying investment approach aligned with its retirement date — so you only need
to select one. Each fund in the Series attempts to balance investors’ long-term needs for both return and conservation of
capital.
American Funds investment professionals actively manage each target date fund’s portfolio, moving it from a more growthoriented approach to a more income-oriented focus as the fund gets closer to its target date. Once the fund reaches its target
date, American Funds investment professionals continue to manage it for 30 years.
Although the target date funds are managed for investors on a projected retirement date time frame, the fund’s allocation
approach does not guarantee that investors’ retirement goals will be met. For investors who are close to, or in, retirement,
each fund’s equity exposure may result in investment volatility that could reduce an investor’s available retirement assets at
a time when the investor has a need to withdraw funds. For investors who are further from retirement, there is a risk that a
fund’s allocation may over-emphasize investments designed to preserve capital and provide current income, which may
prevent the investor from reaching his or her retirement goals. For quarterly updates of the underlying fund allocations, visit
myretirement.americanfunds.com.
In applying any particular asset allocation model to your own individual situation, you should also take into account your risk
tolerance as well as your other assets and any investments outside your plan, such as your home equity, IRAs and savings
accounts.
To determine which fund might be appropriate for you, find the date-specific fund in the following table that most closely
matches the year in which you expect to retire and possibly start withdrawing money. If you fail to make an investment
selection, your account contributions will be invested automatically in the fund whose target retirement date most closely
matches your anticipated retirement under the terms of our plan (see the table on the following page).
Name of fund
American Funds 2060 Target Date Retirement FundSM
American Funds 2055 Target Date Retirement Fund®
American Funds 2050 Target Date Retirement Fund®
American Funds 2045 Target Date Retirement Fund®
American Funds 2040 Target Date Retirement Fund®
American Funds 2035 Target Date Retirement Fund®
American Funds 2030 Target Date Retirement Fund®
American Funds 2025 Target Date Retirement Fund®
American Funds 2020 Target Date Retirement Fund®
American Funds 2015 Target Date Retirement Fund®
American Funds 2010 Target Date Retirement Fund®
Period of anticipated
retirement
2058 and later
2053 thru 2057
2048 thru 2052
2043 thru 2047
2038 thru 2042
2033 thru 2037
2028 thru 2032
2023 thru 2027
2018 thru 2022
2013 thru 2017
2012 and earlier
For example, if, under the terms of the plan, your anticipated retirement date is 2016, your account will be invested in the
2015 Fund; for retirement in 2039, in the 2040 Fund; and for retirement in 2051, in the 2050 Fund. The target date is the year
in which an investor is assumed to retire and begin taking withdrawals.
The 2060 Fund was added to the Series on March 27, 2015. If you were added to the Plan’s recordkeeping system on or after
March 27, 2015, and your estimated retirement date is 2058 or later, you will be defaulted into the 2060 Fund. If you were
added to the Plan’s recordkeeping system before March 27, 2015, and your estimated retirement date is 2058 or later, only
your future contributions will be defaulted into the 2060 Fund; your current plan assets will remain in the 2055 Fund. To
determine which fund you’re currently invested in, refer to your most recent quarterly plan statement.
The target date funds are subject to the risks and returns of the underlying American Funds, which may be added or removed
during the year. Investing outside the United States involves risks such as currency fluctuations, periods of illiquidity and price
volatility, as more fully described in the funds’ prospectuses. These risks may be heightened in connection with investments
in developing countries. Small-company stocks entail additional risks, and they can fluctuate in price more than larger
company stocks.
Lower rated bonds are subject to greater fluctuations in value and risk of loss of income and principal than are higher rated
bonds. The return of principal in bond funds and funds with underlying bond holdings is not guaranteed. Fund shares are
subject to the same interest rate, inflation and credit risks associated with the underlying bond holdings. While not directly
correlated to changes in interest rates, the values of inflation-linked bonds generally fluctuate in response to changes in real
interest rates and may experience greater losses than other debt securities with similar durations. Investments in mortgagerelated securities involve additional risks, such as prepayment risk, as more fully described in the fund’s prospectus.
Investments in securities issued by U.S. governmental agencies or instrumentalities may not be guaranteed by the U.S.
government.
Investments are not FDIC-insured, nor are they deposits of or guaranteed by a bank or any other
entity, so they may lose value.
Investors should carefully consider investment objectives, risks, charges and expenses. This and other important
information is contained in the funds’ prospectus and summary prospectus, which can be obtained from a financial
professional and should be read carefully before investing.
Important note to plan sponsors: Select only ONE share class table from those on the following pages.
Delete all other tables and corresponding language that does not apply to the share class you have chosen for your plan.
However, do not delete any of the text above or below the table applicable to your plans. This is required language.
[Insert for Class A share plans:]
Figures shown are past results for Class A shares at net asset value and are not predictive of future results.
If the maximum sales charge (5.75% for target date funds) had been deducted, results would have been lower.
Current and future results may be lower or higher than those shown here. Share prices and returns will vary,
so you may lose money. Investing for short periods makes losses more likely. It’s important that you read the
prospectuses carefully before investing. You may want to consult with your personal tax advisor. For current
information and month-end results, visit americanfunds.com/retire.
The table below shows the funds’ expense ratios and average annual total returns as of September 30, 2015.
Class A share
Fund name
Gross/net
expense ratios
%
Lifetime
returns**
%
10-year
returns
%
5-year
returns
%
1-year
returns
%
2060 Target Date Fund*
1.12/0.78
-6.50
—
—
—
2055 Target Date Fund
0.89/0.79
9.66
—
9.41
–2.60
2050 Target Date Fund
0.87/0.77
4.94
—
9.42
–2.58
2045 Target Date Fund
0.86/0.76
4.94
—
9.43
–2.55
2040 Target Date Fund
0.86/0.76
4.94
—
9.41
–2.63
2035 Target Date Fund
0.86/0.76
4.90
—
9.33
–2.46
2030 Target Date Fund
0.85/0.75
4.93
—
9.35
–2.12
2025 Target Date Fund
0.83/0.73
4.65
—
8.95
–1.91
2020 Target Date Fund
0.81/0.71
4.18
—
7.83
–1.38
2015 Target Date Fund
0.81/0.71
4.02
—
7.00
–1.56
2010 Target Date Fund
0.81/0.71
3.78
—
6.33
–1.72
*American Funds 2060 Target Date Retirement Fund SM became available for purchase on March 27, 2015.
**The target date funds show lifetime returns, rather than 10-year returns, because their lifetime is less than 10 years.
Investment results assume all distributions are reinvested and reflect applicable fees and expenses. The funds’ investment
adviser is currently waiving its management fee of 0.10%. After December 31, 2015, the adviser may modify or terminate the
waiver, but only with fund board approval. In addition, the investment adviser has in the past reimbursed certain expenses for
all share classes. Investment results and net expense ratios reflect the waiver and reimbursements, without which the results
would have been lower and the expenses would have been higher. The expense ratios are as of each underlying fund’s
prospectus available at the time of publication and include the weighted average expenses of the underlying funds. The
expense ratios for the 2060 Target Date Fund are estimated.
[Insert for Class R-2 share plans:]
Figures shown are past results for Class R-2 shares at net asset value and are not predictive of future results.
Class R-2 shares were first offered on May 15, 2002. Class R-2 share results prior to the date of first sale are
hypothetical based on Class A share results without a sales charge, adjusted for typical estimated additional expenses.
Current and future results may be lower or higher than those shown here. Share prices and returns will vary, so you may
lose money. Investing for short periods makes losses more likely. It’s important that you read the prospectuses carefully
before investing. You may want to consult with your personal tax advisor. For current information and month-end
results, visit americanfunds.com/retire.
The table below shows the funds’ expense ratios and average annual total returns as of September 30, 2015.
(There is no sales charge for purchasing Class R shares.)
Class R-2 share
Fund name
Gross/net
expense ratios
%
Lifetime
returns**
%
10-year
returns
%
5-year
returns
%
1-year
returns
%
2060 Target Date Fund*
1.86/1.52
–6.80
—
—
—
2055 Target Date Fund
1.64/1.54
8.86
—
8.61
–3.30
2050 Target Date Fund
1.59/1.49
4.17
—
8.64
–3.28
2045 Target Date Fund
1.59/1.49
4.17
—
8.64
–3.26
2040 Target Date Fund
1.58/1.48
4.18
—
8.65
–3.18
2035 Target Date Fund
1.58/1.48
4.13
—
8.55
–3.09
2030 Target Date Fund
1.57/1.47
4.17
—
8.60
–2.83
2025 Target Date Fund
1.55/1.45
3.89
—
8.20
–2.53
2020 Target Date Fund
1.52/1.42
3.44
—
7.09
–2.08
2015 Target Date Fund
1.50/1.40
3.30
—
6.27
–2.29
2010 Target Date Fund
1.51/1.41
3.06
—
5.60
–2.34
*American Funds 2060 Target Date Retirement Fund SM became available for purchase on March 27, 2015.
**The target date funds show lifetime returns, rather than 10-year returns, because their lifetime is less than 10 years.
Investment results assume all distributions are reinvested and reflect applicable fees and expenses. The funds’ investment
adviser is currently waiving its management fee of 0.10%. After December 31, 2015, the adviser may modify or terminate the
waiver, but only with fund board approval. In addition, the investment adviser has in the past reimbursed certain expenses for
all share classes. Investment results and net expense ratios reflect the waiver and reimbursements, without which the results
would have been lower and the expenses would have been higher. The expense ratios are as of each underlying fund’s
prospectus available at the time of publication and include the weighted average expenses of the underlying funds. The
expense ratios for the 2060 Target Date Fund are estimated.
[Insert for Class R-3 share plans:]
Figures shown are past results for Class R-3 shares at net asset value and are not predictive of future results.
Class R-3 shares were first offered on May 15, 2002. Class R-3 share results prior to the date of first sale are
hypothetical based on Class A share results without a sales charge, adjusted for typical estimated additional expenses.
Current and future results may be lower or higher than those shown here. Share prices and returns will vary, so you may
lose money. Investing for short periods makes losses more likely. It’s important that you read the prospectuses carefully
before investing. You may want to consult with your personal tax advisor. For current information and month-end
results, visit americanfunds.com/retire.
The table below shows the funds’ expense ratios and average annual total returns as of September 30, 2015.
(There is no sales charge for purchasing Class R shares.)
Class R-3 share
Fund name
Gross/net
expense ratios
%
Lifetime
returns**
%
10-year
returns
%
5-year
returns
%
1-year
returns
%
2060 Target Date Fund*
1.49/1.15
–6.60
—
—
—
2055 Target Date Fund
1.26/1.16
9.27
—
9.03
–2.97
2050 Target Date Fund
1.21/1.11
4.58
—
9.04
–2.90
2045 Target Date Fund
1.21/1.11
4.58
—
9.05
–2.90
2040 Target Date Fund
1.20/1.10
4.57
—
9.03
–2.96
2035 Target Date Fund
1.20/1.10
4.54
—
8.96
–2.70
2030 Target Date Fund
1.19/1.09
4.58
—
9.00
–2.45
2025 Target Date Fund
1.17/1.07
4.30
—
8.60
–2.22
2020 Target Date Fund
1.15/1.05
3.84
—
7.50
–1.70
2015 Target Date Fund
1.13/1.03
3.69
—
6.67
–1.88
2010 Target Date Fund
1.13/1.03
3.46
—
6.00
–1.94
*American Funds 2060 Target Date Retirement Fund SM became available for purchase on March 27, 2015.
**The target date funds show lifetime returns, rather than 10-year returns, because their lifetime is less than 10 years.
Investment results assume all distributions are reinvested and reflect applicable fees and expenses. The funds’ investment
adviser is currently waiving its management fee of 0.10%. After December 31, 2015, the adviser may modify or terminate the
waiver, but only with fund board approval. In addition, the investment adviser has in the past reimbursed certain expenses for
all share classes. Investment results and net expense ratios reflect the waiver and reimbursements, without which the results
would have been lower and the expenses would have been higher. The expense ratios are as of each underlying fund’s
prospectus available at the time of publication and include the weighted average expenses of the underlying funds. The
expense ratios for the 2060 Target Date Fund are estimated.
[Insert for Class R-4 share plans:]
Figures shown are past results for Class R-4 shares at net asset value and are not predictive of future results.
Class R-4 shares were first offered on May 15, 2002. Class R-4 share results prior to the date of first sale are
hypothetical based on Class A share results without a sales charge, adjusted for typical estimated additional expenses.
Current and future results may be lower or higher than those shown here. Share prices and returns will vary, so you may
lose money. Investing for short periods makes losses more likely. It’s important that you read the prospectuses carefully
before investing. You may want to consult with your personal tax advisor. For current information and month-end
results, visit americanfunds.com/retire.
The table below shows the funds’ expense ratios and average annual total returns as of September 30, 2015.
(There is no sales charge for purchasing Class R shares.)
Class R-4 share
Fund name
Gross/net
expense ratios
%
Lifetime
returns**
%
10-year
returns
%
5-year
returns
%
1-year
returns
%
2060 Target Date Fund*
1.17/0.83
–6.50
—
—
—
2055 Target Date Fund
0.94/0.84
9.61
—
9.36
–2.69
2050 Target Date Fund
0.89/0.79
4.92
—
9.39
–2.59
2045 Target Date Fund
0.89/0.79
4.93
—
9.40
–2.56
2040 Target Date Fund
0.88/0.78
4.92
—
9.38
–2.62
2035 Target Date Fund
0.88/0.78
4.88
—
9.31
–2.45
2030 Target Date Fund
0.87/0.77
4.91
—
9.33
–2.19
2025 Target Date Fund
0.85/0.75
4.63
—
8.95
–1.90
2020 Target Date Fund
0.83/0.73
4.18
—
7.82
–1.45
2015 Target Date Fund
0.81/0.71
4.03
—
7.00
–1.62
2010 Target Date Fund
0.81/0.71
3.80
—
6.35
–1.60
*American Funds 2060 Target Date Retirement Fund SM became available for purchase on March 27, 2015.
**The target date funds show lifetime returns, rather than 10-year returns, because their lifetime is less than 10 years.
Investment results assume all distributions are reinvested and reflect applicable fees and expenses. The funds’ investment
adviser is currently waiving its management fee of 0.10%. After December 31, 2015, the adviser may modify or terminate the
waiver, but only with fund board approval. In addition, the investment adviser has in the past reimbursed certain expenses for
all share classes. Investment results and net expense ratios reflect the waiver and reimbursements, without which the results
would have been lower and the expenses would have been higher. The expense ratios are as of each underlying fund’s
prospectus available at the time of publication and include the weighted average expenses of the underlying funds. The
expense ratios for the 2060 Target Date Fund are estimated.
[Insert for Class R-5 share plans:]
Figures shown are past results for Class R-5 shares at net asset value and are not predictive of future results.
Class R-5 shares were first offered on May 15, 2002. Class R-5 share results prior to the date of first sale are
hypothetical based on Class A share results without a sales charge, adjusted for typical estimated expenses.
Current and future results may be lower or higher than those shown here. Share prices and returns will vary,
so you may lose money. Investing for short periods makes losses more likely. It’s important that you read the
prospectuses carefully before investing. You may want to consult with your personal tax advisor. For current
information and month-end results, visit americanfunds.com/retire.
The table below shows the funds’ expense ratios and average annual total returns as of September 30, 2015.
(There is no sales charge for purchasing Class R shares.)
Class R-5 share
Fund name
Gross/net
expense ratios
%
Lifetime
returns**
%
10-year
returns
%
5-year
returns
%
1-year
returns
%
2060 Target Date Fund*
0.86/0.52
–6.40
—
—
—
2055 Target Date Fund
0.64/0.54
9.95
—
9.70
–2.31
2050 Target Date Fund
0.59/0.49
5.23
—
9.71
–2.38
2045 Target Date Fund
0.58/0.48
5.23
—
9.73
–2.29
2040 Target Date Fund
0.58/0.48
5.24
—
9.73
–2.27
2035 Target Date Fund
0.58/0.48
5.20
—
9.64
–2.10
2030 Target Date Fund
0.56/0.46
5.23
—
9.67
–1.84
2025 Target Date Fund
0.54/0.44
4.95
—
9.28
–1.63
2020 Target Date Fund
0.52/0.42
4.49
—
8.17
–1.10
2015 Target Date Fund
0.50/0.40
4.34
—
7.32
–1.26
2010 Target Date Fund
0.51/0.41
4.10
—
6.66
–1.40
*American Funds 2060 Target Date Retirement Fund SM became available for purchase on March 27, 2015.
**The target date funds show lifetime returns, rather than 10-year returns, because their lifetime is less than 10 years.
Investment results assume all distributions are reinvested and reflect applicable fees and expenses. The funds’ investment
adviser is currently waiving its management fee of 0.10%. After December 31, 2015, the adviser may modify or terminate the
waiver, but only with fund board approval. In addition, the investment adviser has in the past reimbursed certain expenses for
all share classes. Investment results and net expense ratios reflect the waiver and reimbursements, without which the results
would have been lower and the expenses would have been higher. The expense ratios are as of each underlying fund’s
prospectus available at the time of publication and include the weighted average expenses of the underlying funds. The
expense ratios for the 2060 Target Date Fund are estimated.
What if I do not want my contributions invested in the default fund?
To avoid having your contributions initially invested in the default fund, take the following actions by [insert date that is at
least 30 days after the date notice is given]:
•
Obtain an enrollment/change form from [name/department].
•
Make your investment selection on the enrollment/change form.
•
Return the completed enrollment/change form to [name/department].
•
You can change the way your future contributions are invested at any time, or you can make an exchange from the default
investment into any other investment available for your plan by going to the website americanfunds.com/retire, or by calling
the toll-free number at (800) 421-6019. There is no transaction fee for making an exchange into one of the other investment
options available in your plan.
For more information, contact [name/department], or log on to americanfunds.com/retire.