Allison SERSP and HERSP Plans

Introduction

With close to 40 investment options available, the Salaried Employee Retirement Savings Plan (SERSP) and Hourly Employee Savings Plan (HERSP) are among the best in the country. With this large number of funds, there is ample opportunity to build a well-diversified portfolio for your Allison Transmission 401(k) savings.

For your reference, we have provided a fund table displaying style, risk, and past performance for many of the funds in the SERSP and HERSP plans. In addition, please visit our “Fund Commentary” section below for further information on specific funds and/or fund types within the SERSP and HERSP accounts.

To the right you will find articles of interest as well as news and updates to Allison employee and retiree benefits. Check this page for future updates to the SERSP and HERSP plans, as well as news that affects Allison employees and retirees.

Request Mainstay Capital Management’s, “Allison Transmission 401(k) Investment Guide.”

News and Updates

Allison Fund Change Announcement - July 2012

Allison Transmission has announced fund changes that impact the Allison Transmission Salaried Employee Retirement Savings Plan and Allison Transmission Hourly Employee Savings Plan (“the plans”). Beginning July 11, 2012 Templeton Institutional Foreign Smaller Companies Series Advisor was added to the fund lineup.

Effective July 11, 2012 Royce Value Plus Fund Institutional Class was removed from the plans and all existing balances in, and future contributions and loan repayments allocated to this fund were transferred to the Loomis Sayles Small Capital Value Fund Institutional Class, unless otherwise directed.

Also, effective July 11, 2012 Fidelity Stock Selector Small Cap Fund was frozen and closed to new investments. As of the market close on October 10, 2012 all remaining investments in the Stock Selector Small Cap Fund will be transferred to the Loomis Sayles Small Capital Value Fund Institutional Class unless otherwise directed. The Stock Selector Small Capital Fund will then be removed from the fund lineup.

Allison Savings Plan Changes - August 2009

Allison announced changes that will affect the participants of the Allison Transmission Salary Employee Retirement Savings Plan and the Allison Transmission Hourly Employee Retirement Savings Plan.

The following investment options are closed to new investments as of 4:00 PM on August 3, 2009:

Fidelity Value Fund
Fidelity Mid Cap Stock Fund
Fidelity Real Estate Investment Portfolio

The following investment options are added as of August 3, 2009:

Artisan Mid Cap Value Fund - Investor Class
Jennison Mid Cap Growth Fund - A

Anyone that was making contributions to the funds that will be closing, will have needed to redirect them by 4:00 PM on August 3, 2009. If no change was made, future contributions to the closed funds would have been redirected automatically according to the following table.

Roth 401(k) Option

The Roth feature within a 401(k) plan allows employees to “tax diversify” their income sources for retirement. Employees have the flexibility to direct contributions between both types of 401(k) accounts as their current and future tax situation dictates. Additionally, for those Allison employees who are ineligible for a Roth IRA, a Roth 401(k) provides an opportunity to build a tax-free retirement income source.

We applaud Allison Transmission for taking advantage of this provision in the Economic Growth and Tax Relief Reconciliation Act of 2001 (EGTRRA).

Request a free copy of Mainstay Capital Management’s “Roth 401(k) Investment Guide”.

Roth 401(k)s - Frequently Asked Questions

Fund Commentary

Pyramis Active Lifecycle Funds

The Pyramis Active Lifecycle fund family is designed for those participants who wish to base their asset allocation decision on a specific target date, typically aligning the account with the fund that most closely matches their projected retirement date.Eleven of these funds are included in the new plan, with 5-year incremental targets from 2000 to 2050. The way the Lifecycle funds are designed, the further away the target date, the more aggressive the asset allocation, conversely, the closer the date, the greater the emphasis on preservation of capital in the asset allocation.

Lifecycle funds hold some appeal in that they are simple to explain and administer. While this approach is unique, we believe the asset allocation decisions provided by these funds are crude at best. Lifecycle funds attempt to make decisions about asset allocation based solely on a target date. An investor’s tolerance for risk and financial goals are other key factors that should largely play a role in determining the investment strategy and asset allocation. Additionally, they leave no room for the fund manager to tactically adjust the strategy based on specific opportunities within the financial markets or in response to prevailing market conditions.

The returns realized in these commingled vehicles are diluted by a rigid adherence to mechanical allocation parameters. These parameters may prove to be shortsighted and inappropriate for everyone participating in the pool. The real world changes every day, yet proponents of lifecycle funds expect someone to stick to a single game plan for as much as 40 years, whether interest rates are rising or falling, or whether the economy is in expansion or recession. While lifecycle funds offer a simple one-stop-solution, we continue to advise participants to avoid lifecycle funds and retain the flexibility to proactively adjust their portfolios as needed.

Please reference "Target-Date Funds Face Regulation", published in The Wall Street Journal.

Fund Table - December, 31 2012

The Allison Transmission SERSP and HERSP fund table provides critical data on investment options within the plan.

  Allison Transmission SERSP and HERSP - Fund Table

If you have any questions concerning our website or your Allison Transmission 401(k) account, please feel free to contact us using the following email link: Mainstay@mainstaycapital.com 
or call us toll-free at 1-866-444-6246.

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