Investment Programs
The defined contribution part of Plan 3 offers you the choice between two investment programs: The Self-Directed Investment Program and the Washington State Investment Program.
The Self-Directed Investment Program
If you choose the Self-Directed Investment Program, there are two different approaches you can take. One is the Build and Monitor approach and the other is One-Step Investing.
Build and Monitor – You Select, Monitor and Adjust Your Investments
With Build and Monitor, you select your own mix of individual funds and decide how much to invest in each one. You choose from a menu of professionally-managed funds listed in the chart below. The risk and return profiles of the funds range from low to high. You are responsible for monitoring your investments and making changes as you get closer to retirement.
| Build and Monitor Funds |
|---|
| Money Market |
| Washington State Bond |
| Socially Responsible Balanced |
| U.S. Large Stock Index |
| U.S. Stock Market Index |
| U.S. Small Stock Index |
| International Stock Index |
One-Step Investing – Your Investments are Automatically Adjusted for You
The One-Step Investing approach is made up of 11 Retirement Strategy Funds. Each one is diversified and automatically rebalances, adjusting your asset mix as you move toward a target date that meets your needs and lifestyle.
To select the Retirement Strategy Fund that’s right for you, take the year you were born and add it to the age you expect to retire or withdraw your funds. The sum is your target date.
How It Works
1968 (birth year) + 65 (retirement age) = 2033 (target date)Pick the fund with the date closest to your target date (in our example above, 2035 would be the target date):
| Retirement Strategy Funds | |
|---|---|
| 2050 | 2020 |
| 2045 | 2015 |
| 2040 | 2010 |
| 2035 | 2005 |
| 2030 | 2000 |
| 2025 | |
Defaulting
You total investment allocations should equal 100 percent. If the total of the allocations you select on your Plan 3 Self-Directed Investment Allocation Form is greater than 100 percent, then the total will be invested in the Retirement Strategy Fund as if you are age 65 today. If the total of your allocations is less than 100 percent, the difference will be invested in the Retirement Strategy Fund as if you are age 65 today. Also, if you choose the Self-Directed Investment Program and do not set up an investment allocation, your contributions will be invested in the Retirement Strategy Fund as if you are age 65 today.
The WSIB Investment Program
If you choose to have your contributions directed to the Washington State Investment Board (WSIB) Investment Program, they will be invested in the WSIB’s Total Allocation Portfolio (TAP). A monthly valued fund, the TAP is a diversified portfolio of U.S. and international stocks, bonds, private equity and real estate investments.