January 2014
HELPLINE: 1-800-422-8463 TTY/TDD: 1-800-514-2447 WEB: nysdcp.com
Dear Plan Participants,
We may get our retirement planning advice from many sources.
Sometimes, it comes from a television advertisement. There’s
one where an adult is sitting with a group of children about
kindergarten age. He asks “Who thinks more is better than
less?” These kids are smart and all eagerly raise their hands.
“We want more,” one girl says enthusiastically. When it comes
to accumulating retirement assets, more is better than less.
Whoooo enhanced
the Plan’s website?
So, how do you have more instead of less? Most of the answers
sound like common sense. The first, and most obvious way, is
to put more into your Plan account. Even an additional percent
or two can make a meaningful difference. Already putting away
the legal maximum? Check with your tax advisor to see if you
can also contribute to a regular or Roth IRA or other savings
vehicle. Starting earlier is one of the easiest ways to have more.
Since you are already in the Plan, this is a great reminder for
you to “Tell-A-Friend” and encourage colleagues to join the
Plan. The earlier they start, the more years they will have for
their accounts to grow.
But why should you have to do all the work? Your Plan account
investments need to be properly allocated to help grow your
account value. Talk to your Account Executive for help to
determine the right investment mix for potential growth while
keeping within your risk tolerance. They are here to help.
Finally, keeping the money working for you is just as important
as putting it in. While the Plan’s loan and unforeseeable
emergency programs are important Plan features, they should
only be used when necessary. Good financial planning includes
setting aside money, when possible, to cover expected and
unexpected financial needs.
Turn the page and find out how we’ve
made NYSDCP.com even better!
Let us learn from the kids in the commercial and work toward
having more retirement security than less.
Sincerely,
The New York State
Deferred Compensation Board
Diana Jones Ritter
Edward M. Cupoli
Tell a Friend
Robert F. Mujica
You know why you like the Plan.
Please share! Tell a friend about the
New York State Deferred Compensation Plan.
Spread the word, the
Plan has gone mobile
Tell a Friend
Have you seen what
they’ve done to the Plan
website lately?
I have to wait until
I get to my PC back
at the nest.
Not anymore.
They’ve made
it so you
can use the
website on any device you have.
Yes! And, because
it’s automatically
formatted for your
device, the navigation
really flies!
Even my
smartphone?
Speaking of flying,
I’m outta here. I want
to try the new
website before a
anyone else finds
out about it.
Too late.
2
Spread the
word about the
New York
State Deferred
Compensation Plan
and its newly
enhanced website.
HELPLINE: 1-800-422-8463 • TTY/TDD: 1-800-514-2447 • WEB: nysdcp.com
How much more can you put
into your Plan account?
Perhaps a lot more than you may think.
If you earned $59,000 or less in 2013, you may qualify for an income tax credit of
up to half of the first $2,000 you contribute to your NYSDCP account. It’s called the
Saver’s Credit, and the amount you can claim depends on several factors. Consult
with your legal or tax advisor before you file your 2013 federal income tax return.
Then, plan ahead for next year’s tax season. The IRS has increased the maximum
Saver’s Credit limit for 2014. To learn more about it, go to the home page at
www.nysdcp.com and click on “2014 Saver’s Tax Credit Limits.”
Secondly, if you can afford to make higher contribution amounts, the 2014
maximum contribution limits remain at the same levels as in 2013, as
outlined in the following chart.
Paycheck Impact (Rounded down to the nearest dollar)
Under age 50
$17,500
Pay
Frequency
Age 50 or greater
$23,000
Special 457 Catch Up
$35,000
Maximum
Deferral
Paycheck
Impact
Maximum
Deferral
Paycheck
Impact
Maximum
Deferral
Paycheck
Impact
Biweekly
26
$673
$504
$884
$663
$1,307
$980
Semi-monthly
24
$729
$546
$958
$718
$1,458
$1,093
Of course, your personal maximum limit is the payroll deferral that matches your
budget and comfort level. To help you decide what that amount might be, try the
On Your Side Interactive Retirement PlannerSM on the Plan Web site. Then, consider
increasing contributions to that level. You can do it in seconds, while you’re logged
into your Plan account at www.nysdcp.com.
Federal law requires a deferral change request be made in the calendar month prior
to the month it would be effective.
Investing involves market risk, including possible loss of principal. While we cannot
offer investment, tax or legal advice, we’ll help you understand market risk and
strategies that may help you deal with it. If you wish to change your deferral
amount, please call the HELPLINE.
See what others see around New York
If you’re not regularly browsing through the photos sent to us by Plan
participants, you’re missing some really beautiful photography — and some
really great-looking scenery. Take a look for yourself. You’ll find them behind
the camera on the home page at nysdcp.com.
And if you have photos of favorite locations in New York State you’d
like to share, we’d love to see them. Submit your photos by email to
participantservice@nysdcp.com.
3
Asset Allocation
Understanding the
need to rebalance
your account.
We devote many of our newsletters to discussing asset
allocation and how important it is in your Plan account.
By spreading your money among different types of
investments, you potentially lessen the risk of losing
as much money as when you are invested in only one
investment. Remember, asset allocation can’t guarantee
returns or insulate you from potential losses, but it
can help you manage risk and keep you on the road
to retirement.
Suppose the strategy you set for your retirement assets
is to invest 60% in stocks and 40% in bonds. If the
stock market fares well for several years, as it has since
it bottomed out in 2009, you could end up with 70%
of assets in stocks and 30% in bonds. That might be a
riskier portfolio than you want.
That’s why you should consider rebalancing your Plan
account from time to time, though making that decision
isn’t always easy. After all, when a fund or asset class is
doing well, it’s natural to want to keep putting deferrals
into it. You may want to fight that urge. All asset classes
go through cycles. It may be smart to be prepared for
the upward ride to temporarily end, even if that means
reallocating deferrals and assets before the end arrives.
Rebalancing forces you to take profits from investments
that have run up, and put assets and deferrals into funds
that may have merit but haven’t yet been recognized.
By reallocating new deferrals, and not exchanging
current balances, you are usually taking the more
gradual approach to rebalancing. However, exchanges
may be necessary when you wish to make investment
option changes more rapidly.
Rebalancing is an important tool for controlling market
risk. Portfolios that are not rebalanced periodically
tend to drift toward higher-return, higher-risk assets,
exposing your assets to greater risk of loss than you
may have intended.
4
Rebalance regularly.
Just like musicians regularly tune their
instruments, investors should frequently
rebalance (or retune) their portfolio to
keep it in harmony with their goals.
Your Account Executive can help you assess your Plan
account and decide whether now might be a good time
to rebalance it. In addition, you can learn more about
funds that automatically rebalance by downloading our
Guide to Investment Options from www.nysdcp.com,
or by requesting it through the HELPLINE by calling
800-422-8463.
When considering a mutual fund, carefully consider
the fund’s investment objectives, risks, charges, and
expenses. This and other information can be found in
the fund prospectus, which is available by calling
800-422-8463. Read it carefully before you invest.
Neither the Plan nor its representatives may offer
investment, tax or legal advice. Account Executives are
here to help you understand the options and resources
available to you through participation in the New York
State Deferred Compensation Plan. Not investing enough
for retirement carries risks as well. Let’s talk about it. Call
the HELPLINE at 800-422-8463.
HELPLINE: 1-800-422-8463 • TTY/TDD: 1-800-514-2447 • WEB: nysdcp.com
How many retirement
plan accounts
do you have?
If you’re like many people, you worked for other
employers before taking your current job and may
have enrolled in those employers’ retirement plans. If so,
chances are you left assets in those plans. Most people
do, but is that your best choice? Maybe not. Here’s why.
Having your retirement assets in multiple accounts
may be working against your investment strategy. It is
harder to know if you are overly invested in one asset
class, causing you to accept more risk than you intend
or missing potential opportunities in other classes.
You may be paying unnecessary fees, including two
or more sets of custodial or administrative fees. As
one of the largest supplemental retirement programs
in the country, the Plan is in a strong position when
negotiating with firms that provide services to the Plan.
This also allows the Plan’s participants to benefit from
low-cost investment options. Compare the expense
ratios of the Plan’s investment options to similar
investment options in your other retirement accounts.
You may be killing trees unnecessarily. Each plan
prepares and mails statements that most participants
either discard or toss in a box. Chances are, you’re
ignoring a lot of these communications, so why not
go green — by consolidating accounts and eliminating
excess paper.
While most retirement plan types – 457(b), 403(b) and
401(k) plans and IRAs — are quite similar, each operates
under unique rules and regulations that define when
you can access funds and when a 10% tax penalty for
early withdrawals may apply.
Be sure you understand how these rules and regulations
may apply to you before deciding to roll assets over
from outside plans. An Account Executive can help
you understand the benefits of combining all your
retirement assets into your NYSDCP account. To talk
about it, please call your Account Executive or the
HELPLINE at 800-422-8463.
While Plan Account Executives are here to help you
understand the options and resources available to you
through participation in the New York State Deferred
Compensation Plan, they cannot offer investment, tax
or legal advice. You should consult your own legal or tax
advisor before making any decisions about retirement
plan participation.
Why is a beneficiary
designation so important?
Your beneficiary designation that is on file with the Plan
identifies who should receive your Plan account upon
your death. By clearly naming your beneficiaries, you
solve a number of problems in advance. This reduces
the chance of confusion and conflicts as to who your
beneficiary should be, avoids delays due to probate
and allows for tax-wise planning for your beneficiaries.
Participants may mistakenly think that their will controls
the disposition of their deferred compensation plan
account. This would be true only if the estate is named
as beneficiary but this should only be done after
consulting with your estate planning attorney.
Since your retirement account may be one of your
largest financial assets, it’s important to take time
to review and possibly update your beneficiary
designation form every few years. Consider doing
so as part of an annual account review with your
Plan Account Executive; a new year is a perfect time
to schedule it. To do so, please call the HELPLINE at
800-422-8463.
To revise your Plan beneficiary designation, please
go to the Support & Forms tab at nysdcp.com.
Account Executives cannot offer investment, tax or
legal advice. Please consult your own counsel before
making retirement plan decisions.
Common beneficiary designation mistakes
• Failing to review designations periodically
• Failing to name contingent beneficiary(ies)
• Not updating the designation form after
every applicable life event
• Naming an estate or trust as beneficiary
without guidance from an attorney
Reduce clutter.
Save trees. Go GREEN.
When you choose eDelivery from the Plan,
you’ll get an email to notify you when your
quarterly statement, newsletter and investment
performance report (IPR) are available.
To go GREEN, complete the Paperless Statement Agreement
available from the Support & Forms tab at nysdcp.com.
5
How James Reeves works with local employers
to bring retirement savings to their staff:
One of the most rewarding aspects of what I do is working with local employers
to adopt and offer the Plan to their employees. One of the biggest challenges that
employers face all over the state is to retain employees. Having a supplemental
plan like the New York State Deferred Compensation Plan gives the employer the
opportunity to offer a high quality retirement plan that their employees can utilize
throughout their career.
Most of my territory is a little off the beaten path. The employers and employees
I work with generally don’t have easy access to the same financial services they
would have in a metropolitan area. For this reason, the Plan provides an invaluable
service to the employees for both financial education and retirement savings.
In the long run, I like the idea that I played a part in bringing the opportunity for
easy, affordable, and valuable retirement savings to the municipal board and
educate employees in my territory. Everyday I have the opportunity to work with
the people who keep our towns and villages running, keep our communities
safe, and educate our children to help improve their lives through the benefits of
the Plan. One of my goals is to be here long enough to see some of the people I
helped sign up, retire better off, or early, because of their participation in the Plan.
James Reeves has been with the Plan since 2007. He is a graduate of SUNY
Fredonia. He holds his FINRA Series 6, 63, and NYS Life and Health licenses. He
provides service to participants and employers in Fulton, Montgomery, Hamilton
and Herkimer Counties and to NYS employees in the Capital District.
Current fund developments
Vanguard PRIMECAP Fund – Mitch J. Milias, co-founder and chairman, will
relinquish his portfolio management responsibilities for this and other Vanguard
funds at the end of 2013. He will remain in a management and client-relationship
role. The portions managed by Mr. Milias will be assumed by the fund’s
co-managers and a portion will be allocated to analysts in PRIMECAP’s
research department.
Davis NY Venture Fund - Ken Feinberg, co-manager of the fund, will be departing
at the end of 2013. Danton Goei, who has more than 15 years experience with
Davis, will replace him as co-manager effective January 1, 2014. Davis does not
expect any significant changes at this time in portfolio holdings or turnover rate
due to this change.
Welcome to New Participating Employers
4th Quarter 2013
Averill Park CSD
Patchogue Medford Library
Town of Bolton
Brentwood Fire District
Port Washington UFSD
Town of Root
Canton Housing Authority
Syosset Fire District
Town of Rosebloom
Cayuga-Onondaga BOCES
Syracuse City SD
Town of Sangerfield
Mohawk Valley Library
System
Syracuse Regional Airport
Authority
Village of Fultonville
Parishville Hopkinton CSD
Town of Blenheim
Village of Trumansburg
Village of Mayfield
This newsletter provides information
that is intended to help participants
understand what investment
alternatives are available to them
under the Plan. If you need tax
or legal advice, please ask your
accountant or lawyer. While we
are pleased to help keep you
up-to-date on your retirement
savings, nothing in this newsletter
can change the terms of the Plan
or any investment contract.
Participants in the New York State
Deferred Compensation Plan will
be charged administrative fees
for the Plan year beginning April
1, 2013 and ending March 31, 2014.
Each participant is charged a $20
annual fee, assessed in two $10
semi-annual installments in April
and October. In addition, an assetbased fee determined by the Board
will be assessed to participants with
a balance greater than $20,000.
The asset-based fee will not be
assessed on assets in excess of
$200,000. The semiannual assetbased fee assessed in October 2013
was 0.021%. It is anticipated that the
semi-annual asset-based fee to be
assessed in April 2014 will be 0.021%.
Each of the mutual funds offered by
the Plan has fund expenses that are
netted directly from the mutual fund’s
daily price. These will vary based
upon the investment fund selected.
Information provided by Account
Executives is for educational
purposes only and is not intended
as investment advice. Neither the
Administrative Service Agency
nor any of its representatives
offer legal or tax advice. For such
guidance, you should consult
your own legal or tax adviser.
Account Executives are
registered representatives of
Nationwide Investment Services
Corporation, Member FINRA.
New York State
Deferred Compensation Plan
Room 124
Empire State Plaza
P.O. Box 2103
Albany, NY 12220
©2014 All rights reserved.
Printed in the U.S.A.
Q-514-0713
NRM-2830NY-NY.39 (01/14)
HELPLINE: 1-800-422-8463 • TTY/TDD: 1-800-514-2447 • WEB: nysdcp.com