Our IAP affords plan participants a choice in how their contributions are invested. Participants can allow their money to grow in default index funds known as target date funds or can grow their money in other investment vehicles of their choosing if they prefer to take a more active role in how their IAP contributions are invested.
Deciding whether to take a more active role in investing your IAP contributions is a personal decision based on your tolerance for risk and your knowledge of the investment markets. If being more involved in investment decisions interests you, know that as a Plan participant you have access to investment professionals through Fidelity to help answer questions and guide investment decisions.
If leaving your IAP savings up to the investment decisions of professionals is more your style, the default target date funds carefully curated by Fidelity, our IAP investment consultant, might be right for you. Target date funds are created with a general retirement date in mind, meaning they adjust their investments to bear more risk or less risk depending on how long your money has to grow before you will need it for retirement. In our IAP, the target date funds are called Fidelity Freedom Funds and they are designed to mirror the overall investment markets and take the guesswork out of investing based on the year in which you plan to access your investment for retirement. For example, a 2060 Freedom Fund is designed for those who wish to retire around 2060. Currently there are 2030, 2040, 2050, 2060 and 2070 Freedom Funds. The further out the fund date is, the more risk that fund bears because of the length of time it has to grow before it is needed for retirement income. Conversely, a 2030 fund, for example, would be extremely conservative since that fund no longer has the time to weather financial risks as it will soon be needed for retirement income.
When it comes to the IAP, the bottom line is that our Plan participants have a choice to be involved in investment decisions or leave it up to the professionals. There is no right or wrong choice, just the choice that’s right for you!
For questions, visit a Fidelity location or contact Fidelity at 866-84-UNION (6466) Monday through Friday 8 a.m. to midnight EST to speak to a live representative. The NetBenefits website, www.netbenefits.fidelity.com, is also an excellent resource for information.