The Standard

Winter 2009

Keep Participant Accounts Balanced,
Without the Effort

Suppose your participants listened to our advice when they enrolled. They took the Investor Profile Quiz. They diversified their investments. They chose an allocation that meets their investment objectives, time horizon until retirement and risk tolerance.

Now, they have just one problem: Their portfolio allocations have changed and their retirement accounts no longer match their investment directives.

Volatile markets, such as those affected by our nation’s current economic downturn, or simply the passage of time, can change the proportion of funds in participant portfolios. Rebalancing moves these portfolios back to their desired investment mixes.

For example, let’s say a portfolio of 50 percent stocks and 50 percent bonds shifted to 35 percent stocks and 65 percent bonds because of poor stock returns. By transferring bond assets to stocks, a participant can rebalance this portfolio back to its original 50/50 allocation. In effect, this “rebalance” would purchase stocks while they were priced lower and sell bonds while they were priced higher – a sound investment strategy.

For participants using the Automatic Rebalancer tool, rebalancing a portfolio doesn’t need to take time or effort.

How the Automatic Rebalancer Works

The Automatic Rebalancer regularly transfers assets in participant accounts to keep their portfolios aligned with their investment directives. Participants who are not enrolled in the optional Mainspring Managed service can turn on the Automatic Rebalancer and have their accounts rebalanced automatically every quarter, semiannually or annually.

According to the frequency chosen, The Standard will automatically transfer the assets in the portfolio to make its allocation consistent with the participant’s current investment directives. As long as the investment directives match the participant’s goals, the Automatic Rebalancer ensures the portfolio matches those goals as well, regardless of how the markets performed.

The Standard will send participants a confirmation when they set an Automatic Rebalancer frequency and will notify them whenever a rebalance is about to occur. Participants can later view detailed records of the transfers using the Account Activity screen on Personal Savings Center.

How Participants Activate the Automatic Rebalancer

If you plan offers the Automatic Reblancer, participants can activate the service easily online by following these steps:

Login to Personal Savings Center from retirement.standard.com
From the Update Account menu, select Automatic Rebalancer
Click the radio button next to the desired rebalancing frequency and click Submit

Alternatively, participants can perform a one-time rebalance at any time using the Transfer Assets screen on Personal Savings Center.

Adding the Automatic Rebalancer to Your Plan

Adding the optional Automatic Rebalancer service to your plan is simple. Talk to the client service consultant at your local office to add the service to your plan or to learn more.