Visteon VIP and 401(k) Savings Plan  
 

Introduction

With well over 30 investment options available, the Visteon Investment Plan (VIP) for salaried employees and 401(k) Savings Plan for hourly employees 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 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 VIP. In addition, please visit our “Fund Commentary” section below for further information on specific funds and/or fund types within the VIP account.
 
 To the right you will find articles of interest as well as news and updates to Visteon employee and retiree benefits. Check this page for future updates to the VIP, as well as news that affects Visteon employees and retirees.

News and Updates

Visteon’s Reorganization Plan Approved

Tuesday, August 31^st Visteon Corporation won confirmation of its Chapter 11 reorganization plan. Visteon first entered bankruptcy in March of 2009 and although there was speculation that Visteon would hand their pension plans over to the PBGC, they were able to structure a reorganization plan that would eliminate the need to do so. Although the details are not yet final, Visteon expects to exit bankruptcy by the end of September.

Visteon Savings Plan Changes

Visteon announced changes that affected the participants of the VIP, Visteon 401(k) Savings Plan and the Visteon Deferred Compensation Plan.

The following investment options were closed to new investments as of 4:00 P.M. on July 6, 2009:

Templeton Developing Markets Trust – Class A
Fidelity Real Estate Investment Portfolio
Fidelity Equity-Income Fund
Clipper Fund
Fidelity Dividend Growth Fund
Fidelity Growth & Income Portfolio
TCW Select Equities Fund – Class I
Templeton Foreign Fund – Class A
Templeton Foreign Smaller Companies Fund – Advisor Class

The following investment options were added for new investments as of July 7, 2009:

Allianz NFJ Small-Cap Value Fund – Administrative Class
Artisan Mid Cap Value Fund – Investor Class
Cohen & Steers Realty Shares, Inc.
Lazard Emerging Markets Equity Portfolio – Institutional Shares
Spartan Extended Market Index Fund – Investor Class

Your future contributions to the closed funds will automatically transfer according to the following list.

Fund Commentary

Note on Fidelity's Freedom Funds

The Fidelity Freedom Funds are designed for those participants who wish to base their asset allocation decision on a specific target year. The account is typically aligned with the Freedom Fund that most closely matches the year in which you anticipate beginning to withdraw your savings for your retirement.

Twelve of these funds are included in the Visteon plan, with 5-year incremental targets from 2000 to 2050, along with a fund targeted as Income Fund. The way the Freedom 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.

Freedom 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. Freedom 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 Freedom 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 Freedom 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.

Fund Table - June 30, 2010

The Visteon VIP and 401(k) Savings Plan fund table provides critical data on investment options within the plan.

  Visteon VIP and 401(k) Savings Plan - Fund Table                                                    

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

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