J. McGarvey Construction Company, Inc. 401(k) Salary Reduction Plan PARTICIPANT NOTICE REGARDING DEFAULT INVESTMENTS This notice provides information on what happens to your retirement funds in your company’s defined contribution plan if you fail to make elections for the investment of your funds. As a participant in your employer’s Plan, you have the right to decide how your salary deferrals and any company contributions allocated to you are invested. In the situations where you fail to provide investment directions, your funds will be invested in your Plan’s “default investment.” If you do not provide investment directions to Mutual of Omaha for these contributions within at least 30 days after this notice, your funds will be invested in a “default investment” selected by your employer. Your Plan’s default investment is the target maturity fund series known as the Vanguard Target Retirement funds. The default investment is intended to qualify as a “qualified default investment alternative” or “QDIA” under Department of Labor regulations. The QDIA is described in more detail below in the paragraph titled “Description of the QDIA.”
RPD947
You can transfer your funds out of the default investment and into another investment alternative available under your Plan at any time without financial penalty, by contacting the Mutual of Omaha Participant Call Center at 888-917-7191 or via www.GetRetirementRight.com. You can find information about the Plan’s other investment alternatives by visiting your Plan provider’s Web site at www.GetRetirementRight.com. Description of the QDIA – The QDIA selected by your employer as the Plan’s default investment is the target maturity fund series known as the Vanguard Target Retirement funds. The funds are issued in five year intervals, beginning with 2015 and ending with 2060, with each fund targeting a specific retirement date. For example, the Vanguard Target Retirement 2035 Fund is designed for those participants who plan to retire within five years of the year 2035. The default investment for a participant will be the fund with the target maturity date nearest the date the participant attains age . Each Vanguard Target Retirement fund invests in other funds that provide a diversified mix of asset classes and investment styles, including fixed income investments and domestic and foreign equity investments. The mix will gradually become more conservative as the target retirement date nears. Each Fund seeks to provide capital appreciation and current income consistent with its current asset allocation. The investment fee charged by each fund will vary based on the fees charged by the underlying funds. Please refer to the additional information for the fees associated with these funds.
Information Regarding Your Retirement Account J. McGarvey Construction Company, Inc. 401(k) Salary Reduction Plan 01/03/2018 The information in this document is designed to provide you important information about your company’s retirement plan and help you make decisions regarding the features and investments that are available. This information will be updated at least annually and more frequently if certain information changes. You are encouraged to review this information – along with any additional materials provided – in order to make the best possible decisions regarding the management of your retirement account.
General Plan Information This section describes any limitations or restrictions on how you can manage your account along with information on the plan’s investment options and any voting rights that may apply to them. If your plan offers a brokerage account option, information regarding this account can also be found in this section.
Administrative Expenses The information in this section provides detail on expenses associated with the administration and recordkeeping of the plan and, if deducted from your account, how these expenses will be calculated. Please note that administrative expenses may not be deducted from your account and instead be paid by your employer. Whether or not these expenses are deducted from your account may also vary from year to year.
Individual Expenses In this section you will find a listing of services available to help you manage your retirement account and the cost for each service. These services are optional and you will only be charged if they are used.
Investment Options The charts in this section are designed to provide detailed information on the investments available through your company’s plan. This section is broken out by investment type and includes such information as investment returns, performance of comparative benchmarks and where to obtain additional information on each investment.
General Plan Information Investment Instructions Upon meeting the eligibility requirements of your company’s plan and completing all required enrollment documents, you are responsible for choosing how to invest the assets in your account. Your investment decisions are subject to any limitations or restrictions described in the table below. Investment Limitations or Restrictions The portion(s) of your account that you can invest How often you can change your investment elections How often you can transfer assets between investment options Additional rules that apply to selecting investments
Your Entire Account Daily Daily - subject to restrictions shown in Table 3 See Table 3—Fees and Expenses for investment restrictions.
Exercise of Voting and Other Rights Certain voting rights may apply to an investment option that you have CHOSEN for your account. If the investment option is not a mutual fund, the voting rights will be exercised by the investment manager(s) of the investment option. United of Omaha Life Insurance Company will exercise any voting rights for investment options that are mutual funds.
Designated Investments For a list of investment options offered through the plan, please review the Variable Return Investment Table in Part 1 of this document.
Investment Managers For the investment managers of the plan’s investment options, please see each investment’s website, prospectus or fact sheet. Fund profiles are available at www.getretirementright.com/funds/45. The fund name on the performance chart is a link to the fund profile. U
Administrative Expenses Expenses for administrative services provided to the plan may be charged to your account. These services include recordkeeping (e.g., valuing participant accounts, processing contributions and investment transactions and providing account statements), legal (e.g., design changes required by law and interpreting the plan document) and accounting (e.g., auditing the plan’s financial records). If administrative expenses are charged to plan participants, they will be shown on the quarterly account statement and charged either pro rata based on the amount of each participant’s account balance relative to total plan assets, or per capita based on the number of the participants in the plan. The payment method will be determined by the plan administrator at the time the expense is due.
Individual Expenses The expenses listed below for services provided to you may be charged to your account. If any of these expenses are charged to you, they will be deducted from check proceeds or from account assets. Expense Taking a loan Taking a distribution
$125.00 $50.00
Investment Options Whether you will have adequate savings at retirement will depend in large part on how much you choose to save and how you invest your savings. While the information below is important to making informed investment decisions, you should carefully review all available information about an investment option prior to making an investment decision. This document includes important information to help you compare the investment options under your retirement plan. If you want additional information about your investment options, you can go to the specific website address shown below or you can contact John S. McGarvey at 239-738-7800, 9260 Estero Park Commons Blvd., Suite 101 Estero, FL 33928 and request a free paper copy of the information available on the website(s).
Document Summary This document has three parts. Part I consists of performance information for plan investment options. This part shows you how well the investments have performed in the past. Part II shows you the fees and expenses you will pay if you invest in an option. Part III contains information about the annuity options (if applicable) under your retirement plan.
Part I – Performance Information
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Table 1 focuses on the performance of investment options that do not have a fixed or stated rate of return. Table 1 shows how these options have performed over time and allows you to compare them with an appropriate benchmark for the same time periods. Past performance does not guarantee how the investment option will perform in the future. Your investment in these options could lose money. Information about an option’s principal risks is available on the website(s). Additional information, including more current performance information, is also available at www.getretirementright.com/funds/45.
Table 1—Variable Return Investments Name/
Average Annual Total Return as of 11/30/2017 1y. 5yr. 10yr. Since Inception
Benchmark 1y.
5yr.
10yr.
Since Inception
7.07%
4.80%
N/A
Professional Investment Portfolio Vanguard Target Retirement 2015 Fund
10.87%
6.43%
4.25%
N/A
11.87%
Vanguard Target Retirement 2020 Fund
13.53%
7.70%
4.62%
N/A
S&P® Target Date 2015 TR USD 13.43% 8.04% N/A 5.98%
N/A
S&P® Target Date 2020 TR USD 15.26% 8.91% 5.32% N/A
Vanguard Target Retirement 2025 Fund
15.44%
8.56%
4.76%
Vanguard Target Retirement 2030 Fund
17.06%
9.36%
4.89%
N/A
S&P® Target Date 2025 TR USD 16.98% 9.75% N/A 6.47%
Vanguard Target Retirement 2035 Fund
18.66%
10.14%
5.12%
N/A
S&P® Target Date 2030 TR USD 18.64% 10.48% 5.65% N/A
N/A
S&P® Target Date 2035 TR USD 19.79% 10.99% N/A 6.81%
Vanguard Target Retirement 2040 Fund
20.38%
10.71%
5.42%
Vanguard Target Retirement 2045 Fund
21.02%
10.85%
5.48%
N/A
S&P® Target Date 2040 TR USD 20.53% 11.37% 5.81% N/A
Vanguard Target Retirement 2050 Fund
21.05%
10.86%
5.54%
N/A
S&P® Target Date 2045 TR USD 21.20% 11.72% N/A 6.99%
Vanguard Target Retirement 2055 Fund
20.96%
10.84%
N/A
11.23%
S&P® Target Date 2050 TR USD 21.54% 11.95% N/A 11.48%
10.49%
S&P® Target Date 2055 TR USD 21.54% 11.95% N/A 12.45%
N/A
S&P® Target Date 2055 TR USD 8.65% 4.84% 3.99% N/A
Vanguard Target Retirement 2060 Fund Vanguard Target Retirement Income Fund
21.00%
7.93%
10.82%
4.11%
N/A
4.01%
S&P® Target Date Retirement Income TR USD Stable Value/Bonds BlackRock High Yield Bond Portfolio
8.94%
5.55%
6.97%
N/A
9.16%
6.05%
8.10%
N/A
Bloomberg Barclays US Corporate High Yield TR USD
Table 1—Variable Return Investments Name/
Average Annual Total Return as of 11/30/2017 1y. 5yr. 10yr. Since Inception
Benchmark 1y.
5yr.
10yr.
Since Inception
Stable Value/Bonds Guaranteed Account
0.67%
0.58%
N/A
0.58%
Metropolitan West Total Return Bond Fund
2.40%
1.76%
4.81%
N/A
0.79% 0.24% 0.33% N/A USTREAS T-Bill Sec Mkt 3 Mon 3.22% 1.98% 3.99% N/A Bloomberg Barclays US Agg Bond TR USD
International Stock Funds Harbor International Fund International Stock Index Fund Wells Fargo Emerging Markets Equity Fund
20.73%
4.72%
0.97%
N/A
27.27%
27.05%
7.67%
0.94%
N/A
27.27%
8.21% 1.54% MSCI® EAFE NR USD 8.21% 1.54%
33.30%
MSCI® EAFE NR USD 4.98% 1.69%
27.39%
3.80%
1.87%
N/A
N/A N/A
N/A
MSCI® EM NR USD Domestic Stock Funds ClearBridge Small Cap Growth Fund Lord Abbett Value Opportunities Fund Prudential QMA Small-Cap Value Fund
25.23%
13.48%
8.81%
N/A
23.69%
9.95%
13.08%
8.37%
N/A
Russell® 2000 Growth TR USD 13.06% 13.89% N/A 8.29%
N/A
Russell® 2500 Value TR USD 13.37% 14.16% 8.19% N/A
11.27%
13.61%
8.57%
Small Cap Stock Index Fund
17.45%
14.09%
7.97%
N/A
Small Company Fund
21.66%
16.70%
10.61%
N/A
Stock Market Index Fund
21.85%
14.86%
7.53%
N/A
T. Rowe Price Growth Stock Fund
33.66%
17.26%
9.29%
N/A
15.84%
9.24%
Russell® 2000 Value TR USD 18.34% 15.02% 8.75% Russell® 2000 TR USD 18.34% 15.02% 8.75% Russell® 2000 TR USD 22.88% 15.74% 8.30% S&P® 500 TR 30.81% 17.14% 9.87%
N/A
N/A N/A N/A N/A
Vanguard Windsor II Fund
15.49%
12.43%
5.92%
N/A
Russell® 1000 Growth TR USD 14.83% 14.17% 6.85% N/A Russell® 1000 Value TR USD
Specialty Funds Cohen & Steers Institutional Realty Shares Fund
11.09%
10.07%
6.75%
N/A
8.03%
8.69%
5.36%
S&P® US REIT TR USD
N/A
Table 1—Variable Return Investments Name/
Average Annual Total Return as of 11/30/2017 1y. 5yr. 10yr. Since Inception
Benchmark 1y.
5yr.
10yr.
Since Inception
Specialty Funds Franklin Growth Fund
26.85%
15.49%
8.56%
N/A
22.27%
15.63% 8.43% Russell® 3000 TR USD
N/A
Table 2 focuses on the performance of investment options that have a fixed or stated rate of return. Table 2 shows the annual rate of return of each option, the term or length of time that you will earn this rate of return and other information relevant to performance. Your Plan does not have any fixed return investments. Table 2—Fixed Return Investments Name/Type of Option
Return
Term
Other The rate of return on the Guaranteed Account varies each month so it is not a fixed return investment.
Part II – Fee and Expense Information Table 3 shows fee and expense information for the investment options listed in Table 1 and Table 2. Table 3 shows the total annual operating expenses of the options in Table 1. Total annual operating expenses are expenses that reduce the rate of return of the investment option. Table 3 also shows shareholder-type fees. These fees are in addition to total annual operating expenses. Table 3—Fees and Expenses as of 11/30/2017
Name / Type of Option
Fund Category
Gross Total Annual Operating Expenses As %
Per $1000
Net Total Annual Operating Expenses As %
Trading Restrictions
Per $1000
Professional Investment Portfolio Vanguard Target Retirement 2015 Fund Professional Investment Portfolios
Time-based portfolio
Vanguard Target Retirement 2020 Fund Professional Investment Portfolios
Time-based portfolio
Vanguard Target Retirement 2025 Fund Professional Investment Portfolios
Time-based portfolio
Vanguard Target Retirement 2030 Fund Professional Investment Portfolios
Time-based portfolio
Vanguard Target Retirement 2035 Fund Professional Investment Portfolios
Time-based portfolio
Vanguard Target Retirement 2040 Fund Professional Investment Portfolios
Time-based portfolio
Vanguard Target Retirement 2045 Fund Professional Investment Portfolios
Time-based portfolio
Vanguard Target Retirement 2050 Fund Professional Investment Portfolios
Time-based portfolio
Vanguard Target Retirement 2055 Fund Professional Investment Portfolios
Time-based portfolio
Vanguard Target Retirement 2060 Fund Professional Investment Portfolios
Time-based portfolio
0.94%
$9.40
0.94%
$9.40
**YES
0.94%
$9.40
0.94%
$9.40
**YES
0.94%
$9.40
0.94%
$9.40
**YES
0.95%
$9.50
0.95%
$9.50
**YES
0.95%
$9.50
0.95%
$9.50
**YES
0.96%
$9.60
0.96%
$9.60
**YES
0.96%
$9.60
0.96%
$9.60
**YES
0.96%
$9.60
0.96%
$9.60
**YES
0.96%
$9.60
0.96%
$9.60
**YES
0.96%
$9.60
0.96%
$9.60
**YES
Table 3—Fees and Expenses as of 11/30/2017
Name / Type of Option
Fund Category
Gross Total Annual Operating Expenses As %
Per $1000
Net Total Annual Operating Expenses As %
Trading Restrictions
Per $1000
Professional Investment Portfolio Vanguard Target Retirement Income Fund Professional Investment Portfolios
Time-based portfolio 0.93%
$9.30
0.93%
$9.30
**YES
1.34%
$13.40
1.33%
$13.30
*YES
0.45%
$4.50
0.45%
$4.50
*YES
1.15%
$11.50
1.15%
$11.50
1.60%
$16.00
1.59%
$15.90
0.87%
$8.70
0.87%
$8.70
1.93%
$19.30
1.85%
$18.50
1.58%
$15.80
1.58%
$15.80
1.59%
$15.90
1.59%
$15.90
1.54%
$15.40
1.53%
$15.30
0.85%
$8.50
0.85%
$8.50
1.43%
$14.30
1.43%
$14.30
0.83%
$8.30
0.83%
$8.30
1.33%
$13.30
1.33%
$13.30
Stable Value/Bonds BlackRock High Yield Bond Portfolio Fixed Income/Bonds
High Yield Bond
Guaranteed Account Fixed Income/Bonds
Short-Term Fixed Income
Metropolitan West Total Return Bond Fund Fixed Income/Bonds
Intermediate Term Bond
International Stock Funds Harbor International Fund International Stock Funds
Foreign Large-Cap Blend
International Stock Index Fund International Stock Funds
Large-Cap Core International
Wells Fargo Emerging Markets Equity Fund International Stock Funds
Diversified Emerging Markets
Domestic Stock Funds ClearBridge Small Cap Growth Fund U.S. Stock Funds
Small Cap Growth
Lord Abbett Value Opportunities Fund U.S. Stock Funds
Mid Cap Core
Prudential QMA Small-Cap Value Fund U.S. Stock Funds
Small-Cap Value
Small Cap Stock Index Fund U.S. Stock Funds
Small-Cap Core
Small Company Fund U.S. Stock Funds
Small-Cap Core
Stock Market Index Fund U.S. Stock Funds
Large-Cap Core
T. Rowe Price Growth Stock Fund U.S. Stock Funds
Large-Cap Growth
Table 3—Fees and Expenses as of 11/30/2017
Name / Type of Option
Fund Category
Gross Total Annual Operating Expenses As %
Per $1000
Net Total Annual Operating Expenses As %
Trading Restrictions
Per $1000
Domestic Stock Funds Vanguard Windsor II Fund U.S. Stock Funds
Large-Cap Value
1.05%
$10.50
1.05%
$10.50
1.47%
$14.70
1.46%
$14.60
1.30%
$13.00
1.28%
$12.80
**YES
Specialty Funds Cohen & Steers Institutional Realty Shares Fund Specialty Funds
Real Estate
Franklin Growth Fund Specialty Funds
Unconstrained
* RESTRICTION: participants who redeem, transfer or exchange any amount out of this investment option must wait 60 calendar days before transferring or exchanging any amount back into this investment option. U
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** RESTRICTION: participants who redeem, transfer or exchange any amount out of this investment option must wait 30 calendar days before transferring or exchanging any amount back into this investment option. U
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There are no redemption fees or Maximum & Deferred Sales charges applicable to the funds listed above. However, in the event of an employer-directed withdrawal (as defined by the plan's annuity contract), a market value adjustment may be applicable to the Guaranteed Account. Any market value adjustment will be calculated in accordance with the terms of the plan's annuity contract. The Total Annual Operating Expense ratio is the percentage of fund assets paid for operating expenses and management fees. This ratio typically includes the following types of fees and expenses: accounting, administrator, advisor, auditor, board of directors, custodial, distribution, legal, organizational, professional, registration, shareholder reporting, subadvisor and transfer agency. This ratio does not reflect the fund’s brokerage costs. This ratio may be reduced by fee waivers or reimbursements from investment managers. The Net Total Annual Operating Expense ratio reflects the ratio after investment manager fee waivers or reimbursements. This is the expense ratio that currently applies to the investment. The Gross Total Annual Operating Expense does not include any investment manager fee waivers or reimbursements and is the maximum expense ratio that could apply to the investment. Note: For Exchange Trade Funds (“ETFs”), the following transaction costs are factored into the average share price: trading commissions (estimated at $0.02 per share) and securities transaction fees (estimated at $19.20 per $1,000,000 of sales proceeds).
The cumulative effect of fees and expenses can substantially reduce the growth of your retirement savings. Visit the Department of Labor’s website for an example showing the long-term effect of fees and expenses at http://www.dol.gov/ebsa/publications/401k_employee.html. Fees and expenses are only one of many factors to consider when you decide to invest in an option. You may also want to think about whether an investment in a particular option, along with your other investments, will help you achieve your financial goals. You should consult your own financial or tax advisor when making investment decisions.
Part III – Annuity Information Table 4 focuses on the annuity options under the plan. Annuities are insurance contracts that allow you to receive a guaranteed stream of payments at regular intervals, usually beginning when you retire and lasting for your entire life. Annuities are issued by insurance companies. Guarantees of an insurance company are subject to its long-term financial strength and claims-paying ability. Table 4—Annuity Options Name N/A
Objectives / Goals N/A
Pricing Factors N/A
Restrictions / Fees N/A
Please visit http://www.getretirementright.com/glossary for a glossary of investment terms relevant to the investment options under this plan. This glossary is intended to help you better understand your options. U
More current information about your plan’s investment options, including fees and expenses and performance updates, may be available at the listed website addresses.
Compliance with Section 404(c) of the Employee Retirement Income Security Your employer intends to satisfy the requirements of Section 404(c) of the Employee Retirement Income Security Act (ERISA) and corresponding Department of Labor regulations. This means that your employer is providing you with the opportunity to decide how to invest the assets in your account, enabling you to choose investments that fit your personal needs. Your employer and certain individuals in charge of the plan (known as fiduciaries) will not be responsible for the investment performance of your account that results from your investment instructions. For additional information, please contact John S. McGarvey at 239-738-7800, 9260 Estero Park Commons Blvd., Suite 101 Estero, FL 33928 who monitors compliance with these procedures.
Disclaimers Investment options are offered through a group variable annuity contract (Forms 902-GAQC-09, 902-GAQC-09(OR), 903GAQC-14, 903-GAQC-14 FL, 903-GAQC-14 MN, 903-GAQC-14 OR, 903-GAQC-14 TX, or state equivalent) underwritten by United of Omaha Life Insurance Company for contracts issued in all states except New York. United of Omaha Life Insurance Company, Omaha, NE 68175 is licensed nationwide except in New York. Companion Life Insurance Company, Hauppauge, NY 11788 is licensed in New York and underwrites the group variable annuity (Form 900-GAQC-07(NY) or 903-GAQC-14 NY). Each company accepts full responsibility for each of their respective contractual obligations under the contract but does not guarantee any contributions or investment returns except as to the Guaranteed Account and the Lifetime Guaranteed Income Account as provided under the contract. Specific features of the Lifetime Guaranteed Income Account vary by state. Restrictions apply. The Lifetime Guaranteed Income Account is not available in Nevada or New York. Neither United of Omaha Life Insurance Company, Companion Life Insurance Company, nor their representatives or affiliates offers investment advice in connection with the contract. Group variable annuities are long-term investment vehicles designed to accumulate money on a tax-deferred basis for retirement purposes. Distributions may be subject to ordinary income tax and, if taken prior to age 59½, a 10 percent federal tax penalty may apply. Investing in a group variable annuity involves risk, including possible loss of principal.
