Ford SSIP and TESPHE Plans  
 

Introduction

With over 24 investment options available, the Savings Stock Investment Plan (SSIP) for salaried employees and Tax Efficient Savings Plan For Hourly Employees (TESPHE) are among the best in the country. This large number of funds provides ample opportunity to build a well-diversified portfolio for your 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 SSIP and TESPHE plans. In addition, please visit our “Fund Commentary” section below for further information on specific funds and/or fund types within the SSIP and TESPHE accounts.

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

News and Updates

Ford SSIP & TESPHE Fund Change Announcement – March 1, 2010

Ford has announced upcoming investment option changes for the SSIP and TESPHE 401(k) plans that will take effect this spring. More than a third of the existing investment options will be eliminated and new options will be added to the plan. Account balances and new monies invested (contributions/loan repayments) in the options being removed from the plans will be transferred either to other existing investment options or to the new investment options. It is important to analyze this new investment menu, prior to the transferring of assets out of current investment options, to determine appropriate changes for your SSIP or TESPHE account.

Affiliated Computer Services Replaced Fidelity – January 5, 2010

Effective January 5, 2010, Affiliated Computer Services (ACS) has taken over administration of the Ford SSIP, FRP, DCP and BEP for salaried employees, as well as the TESPHE for hourly employees, from Fidelity Investments. The investment options that are currently available in these plans are not expected to change initially, but may change over time as part of the regular monitoring process. There is a new website for SSIP and TESPHE participants to view and make changes to their plan effective January 5, 2010. For more details, read the article on the right “New Ford 401(k) Plan Administrator”.

Fund Commentary

BlackRock LifePath Index Funds

The BlackRock LifePath Index Fund family is designed for those participants who wish to base their asset allocation decision on a specific target year. The account is typically aligned with the LifePath fund that most closely matches the year you anticipate that you might begin to withdraw your savings for your retirement.

Nine of these funds are included in the Ford plan, with 5-year incremental targets from 2015 to 2050, along with a fund targeted as a Retirement Fund. The way the LifePath 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.

LifePath 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. LifePath 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 the investment strategy and asset allocation. Additionally, they leave no room for the fund manager to tactically adjust the allocation 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 LifePath funds, or similar 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 LifePath funds offer a simple one-stop-solution, we continue to advise participants to avoid these 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.

Company Stock

As a general rule of diversification, no single stock should represent more than 10% of your total investment portfolio. We believe this is a good guideline for ownership of company stock in your 401(k). Most individual stocks are much more volatile than mutual funds. To the extent you invest more in your company 's stock, your overall portfolio will exhibit more volatility (risk), and retirement investing is not about hitting home runs, but about consistently hitting singles and doubles.

That being said, many corporations often match a portion of employee retirement plan contributions with company stock, offer employees attractive incentives to purchase company stock either within or outside of retirement accounts, or include stock or stock options as part of employee compensation. We recommend that employees take full advantage of these opportunities, but remember to keep their total company stockholdings within reasonable levels.

Fund Table - June 30, 2010

The Ford SSIP and TESPHE fund table provides critical data on investment options within the plan.

  Ford SSIP and TESPHE - Fund Table                                                                         

If you have any questions concerning our website or your Ford 401(k) account contact us using the following e-mail link: Mainstay@mainstaycapital.com or call us toll-free 1-866-444-6246.

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