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The Problem With Target-Date Funds

New Inteva Salaried Savings and Retirement Plan Administrator

Funding Health Care costs After Age 65

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With over 30 investment options available, the Inteva Products 401(k) is among the best plans in the country. There are certainly enough funds in this plan to build a well-diversified portfolio for your Inteva Products 401k savings.

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

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

News and Updates

Inteva Products Fund Change Announcement - January 2014

Inteva Products has announced changes that will impact certain mutual fund investment options in the Inteva Products, LLC Salaried Employees’ Savings and Retirement Plan ("the Plan").

The pending changes will include closing several of the mutual funds currently offered in Plan, as well as offering several new options. All changes impacting the Plan will take effect on April 1, 2014.

To discuss these important changes to the Inteva 401(k) plan and how to allocate your portfolio in light of the new investment menu, do not hesitate to contact Mainstay toll-free at 1-866-444-6246.

Principal Financial Group to replace Fidelity as 401(k) plan administrator

Effective January 1, 2011, Principal Financial Group will replace Fidelity as the administrator for the Inteva Products Savings and Retirement Plans for Salaried and Hourly Employees. With Principal Financial Group, Inteva Products employees will continue to have online access to their account and plan provisions such as eligibility, waiting periods, and benefit structure will not change. As with any plan transfer there will be a short “black out period” where employees will not have access to accounts and some fund changes are to be expected. Employees will be made aware of the timing of the “black out period” and any fund changes prior to the transfer.

Reinstatement of savings plan match for Inteva Products Salaried Employees – October 2010

Beginning January 1, 2011, Inteva Products will reinstate the savings plan match for employees with at least six months of service. Inteva will match 50% of Before-Tax Contributions up to 5% of base pay, excluding Catch Up Contributions. Mainstay recommends that all Inteva salaried employees are contributing at least 5% in order to take advantage of the company match.

Special Note for Inteva Products Employees

With the transition from Delphi to Inteva Products, employees have various options for the disposition of assets in their Delphi 401(k) account. The available options are:

  • Roll-over your account balance into the Inteva Products Savings Plan
  • Roll-over your account balance into an IRA
  • Leave your account balance in the Delphi 401(k)

Important - Any Delphi 401(k) assets rolled into the Inteva plan will be locked in that plan, and you will not be able to roll these assets to an IRA until age 59 1/2 or separation of service from Inteva.

Please contact us to discuss these very important 401(k) plan decisions and any retirement planning questions by calling toll-free 1-866-444-6246.

Fund Commentary

Principal Trust Target Date Funds

The Principal Trust Target Date 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.

Twelve of these funds are included in the plan, with 5-year incremental targets from 2010 to 2060, along with a fund targeted as an Income Fund. The way the target retirement 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.

These 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. Target date 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 target date 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 target date funds offer a simple one-stop-solution, we continue to advise participants to avoid target date 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 - March 31, 2015

The Inteva Products 401(k) fund table provides critical data on investment options within the plan.

  Inteva Products 401(k) - Fund Table                                                                     

If you have any questions concerning our website or your Inteva Products 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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