Beneficiary – The beneficiary is the person designated through the participant's retirement plan to receive the assets in case of the participant's death. The SecureFoundation account will be affected differently depending on which phase the participant is in at the time of his or her death, whether the beneficiary is the participant's legal spouse or not, and (if the participant is in the Guaranteed Annual Withdrawal or Settlement phases) whether the participant has elected a single or joint life distribution. A beneficiary who is the legal spouse may have the option of continuing the SecureFoundation account or establishing his or her own account. See the SecureFoundation disclosure documentation for specific information.
Benefit Base – The Benefit Base is used to calculate guaranteed lifetime retirement income payments, has no monetary value, and is different from the Covered Fund Value. The Benefit Base is established with the first investment in a Great-West SecureFoundation fund during the Accumulation Phase. Each Great-West SecureFoundation fund has its own Benefit Base. The Benefit Base cannot be transferred among Great-West SecureFoundation funds.
Contributions – These are account owner-directed investments into the Great-West SecureFoundation fund(s), including rollovers and transfers. Contributions are accepted into Great-West SecureFoundation fund(s) during the Accumulation Phase only. All contributions increase the Benefit Base dollar-for-dollar at the time of investment. A 90-day transfer-in restriction applies after any transfer out. Reinvested dividends, capital gains and settlements arising from the Great-West SecureFoundation fund(s) are not considered contributions for the purpose of calculating the Benefit Base but will affect the Covered Fund Value.
Excess Withdrawal – An amount either distributed or transferred from the Covered Fund(s) during the Accumulation Phase or any amount combined with all other amounts that exceed the annual Guaranteed Annual Withdrawal during the Guaranteed Annual Withdrawal Phase. The Excess Withdrawal reduces the Benefit Base as described in the Accumulation Phase and the Guaranteed Annual Withdrawal Phase. Excess Withdrawals or transfers out reduce the participant's Covered Fund Value and the Benefit Base proportionately and may affect the potential guaranteed income benefit.
Covered Fund Value – This is the value of each of the Great-West SecureFoundation fund(s). It will fluctuate with market conditions, dividends, capital gains, contributions and withdrawals.
Guarantee Benefit Fee – This is the amount GWL&A charges for the guarantee of retirement income for life. The current Guarantee Benefit Fee is 0.9% of the Covered Fund Value. GWL&A has the right to change this fee at any time with a 30-day written notice. The amount of the Guarantee Benefit Fee will not be higher than 1.5% or lower than 0.7% of the Covered Fund Value. The dollar amount of this fee will fluctuate depending upon your Covered Fund Value and is paid through redemption of Great-West SecureFoundation fund(s) shares. When the participant enters the Settlement Phase, this fee will not apply. The Guarantee Benefit Fee is not treated as a distribution or an Excess Withdrawal. SecureFoundation's guaranteed income benefit is contingent, and thus the participant may never need its guaranteed income and he or she may not recoup the Guaranteed Benefit Fee paid. For more information, please see the SecureFoundation disclosure documents and/or consult with a financial advisor.
Guarantee Trigger Date – The SecureFoundation guarantee begins on this date. As noted under Investment Options (below), with the Great-West SecureFoundation Balanced Fund and Great-West SecureFoundation Lifetime 2015 and 2020 Funds, the Guarantee Trigger Date occurs immediately upon investment. With the other Great-West SecureFoundation Lifetime Funds, the Guarantee Trigger Date is 10 years before the portfolio's targeted maturity.
Guaranteed Annual Withdrawal – This is the annualized withdrawal amount that's guaranteed for the participant's lifetime, or for the lifetime of the participant and his or her spouse if he or she elects a joint withdrawal. At first, withdrawals are funded from the Great-West SecureFoundation Fund Value. If the Covered Fund Value (see Settlement Phase) is exhausted, SecureFoundation continues to provide the participant with Guaranteed Annual Withdrawals in the same amount for life. The Guaranteed Annual Withdrawal is based on a percentage of the Benefit Base according to the following schedule and is locked in based on the participant's age (or if the participant elects joint withdrawals, the age of the younger of the participant or his or her spouse) when he or she takes his or her first withdrawal.
|4% for life at ages 55-64||3.50% for youngest joint life at 55-64|
|5% for life at ages 65-69||4.50% for youngest joint life at 65-69|
|6% for life at ages 70-79||5.50% for youngest joint life at 70-79|
|7% for life at ages 80+||6.50% for youngest joint life at 80+|
Investment Options – Each of the Great-West SecureFoundation funds includes the purchase and acceptance of the SecureFoundation guarantee.
Great-West SecureFoundation Balanced Fund1,2 – This fund includes a mix of investments in underlying funds with approximately 60% equity funds and 40% bond funds and cash equivalents. With the first contribution into the fund, 100% of the account holder’s Covered Fund Value establishes the Benefit Base. This portfolio will charge an annual Guarantee Benefit Fee (currently 0.9%) on the Covered Fund Value. Additionally, the Great-West SecureFoundation Balanced Fund is subject to a fund operating expense at the fund level, as well as a prorated fund operating expense of each underlying fund in which it invests. For more information, please refer to the Great-West SecureFoundation Balanced Fund’s prospectus and the SecureFoundation disclosure documents.
Great-West SecureFoundation Lifetime Funds1,2 – These target date funds are a mix of investments in underlying funds that are designed to meet certain investment goals based on an investor’s investment horizon (such as projected retirement date and personal objectives). Depending on its proximity to the year designated in the name of the Great-West SecureFoundation Lifetime Fund, each fund employs a different combination of investments among the underlying funds in order to emphasize, as appropriate, growth, income and/or preservation of capital, gradually shifting its emphasis from more aggressive investments to more conservative ones based on its target date. The date in the Great-West SecureFoundation Lifetime Funds represents the approximate date when the investor would expect to start taking withdrawals. The Covered Fund Value is not guaranteed at any time, including the target date; however, the Benefit Base is guaranteed.
Ten years before the date named in the fund (Guarantee Trigger Date), the SecureFoundation guaranteed income benefit and Benefit Base begin. At that time, the mix of investments shifts to an appropriate allocation of approximately 60% equity funds and 40% bond funds and cash equivalents. This portfolio will charge an annual Guarantee Benefit Fee (currently 0.9%) on the Covered Fund Value. Additionally, this fund is subject to an investment management fee in addition to underlying fund expenses. The Great-West SecureFoundation Lifetime Funds are subject to a fund operating expense at the fund level, as well as a prorated fund operating expense of each underlying fund in which they invest. For more information, please refer to the Great-West SecureFoundation Lifetime Fund prospectus and the SecureFoundation disclosure documents.
Ratchet – This is an increase in the Benefit Base that occurs if the Covered Fund Value in the Fund exceeds the current Benefit Base on the annual Ratchet Date.
Ratchet Date – On the Ratchet Date, the participant’s Benefit Base will increase, or "ratchet up," if the Covered Fund Value exceeds the current Benefit Base in order to capture positive market performance. On the other hand, the Benefit Base won’t decrease if the Covered Fund Value is less than the Benefit Base on the Ratchet Date.
During the Accumulation Phase, the Ratchet Date is the anniversary of the date the Benefit Base was established and each anniversary thereafter.During the Guaranteed Annual Withdrawal Phase, the Ratchet Date is the date of the first Guaranteed Annual Withdrawal and each anniversary thereafter.
If an anniversary during either of these phases isn't on a business day, the Ratchet Date will be the preceding business day.
Termination/Cancellation – A full withdrawal of the Great-West SecureFoundation Fund Value other than the Guaranteed Annual Withdrawal will result in an automatic cancellation of the SecureFoundation guaranteed income benefit. Please note that the plan sponsor may cancel the contract, remove the covered funds, or select a new record keeper that may not be able to record-keep the benefit. If that were to happen, participants with distributable events who live in states where SecureFoundation has been approved in the IRA may be able to roll their assets into approved funds in Great-West Lifetime Advantage IRA® solution and maintain their benefit. Otherwise, participants may lose their benefit.
Please consider the investment objectives, risks, fees and expenses carefully before investing. For this and other important information, please refer to the fund’s prospectus and the SecureFoundation Summary Disclosure Statement or prospectus for 403(b) clients. These documents can be obtained from your registered representative or your Plan’s website. Read them carefully before investing.