Rolls-Royce

Introduction

With over two dozen investment options available, the Rolls-Royce Corporation Personal Savings Plan for Hourly-Rate Employees and the Rolls-Royce North America 401(k) Savings Plan 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 Rolls-Royce 401(k) savings.

For your reference, we have provided a fund table displaying style, risk, and past performance for many of the funds in these two plans. In addition, please visit our “Fund Commentary” section below for further information on specific funds and/or fund types within the Rolls-Royce 401(k) savings plans.

To the right you will find articles of interest as well as news and updates regarding Rolls-Royce employee and retiree benefits. Check this page for future updates to the Rolls-Royce 401(k) savings plans, as well as news that affects Rolls-Royce employees and retirees.

News and Updates

Rolls-Royce Fund Changes Announcement - May 9, 2011
Rolls-Royce has announced upcoming changes to the investment options in the Rolls-Royce Corporation Personal Savings Plan for Hourly-Rate Employees and the Rolls-Royce North America 401(k) Savings Plan. The new investment options will provide similar investment strategies and risks, but the overall expenses for the investment options will be lower. These changes will be effective as of the close of business on May 9, 2011. Mainstay Capital Management’s CEO, David Kudla, has spoken and is published on the subject of reducing fees (internal expense ratios) for investment options within 401(k) plans. For further insight read his article penned for Forbes, "Why Investment Choices In Your 401(k) Might Change".

Fund Commentary

Pyramis Active Lifecycle Funds
The Pyramis Active Lifecycle fund family (Pathway One) 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 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 roll in determining 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.

Fund Table - December 31, 2011

The Rolls-Royce fund table provides critical data on investment options within the plan.

  Rolls-Royce

If you have any questions concerning our website or your Rolls-Royce 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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