Plan participants designate a percentage of total contributions to be placed in one or more of seven accounts of the Minnesota Supplemental Investment Fund. This investment fund is administered by the Minnesota State Board of Investment and includes actively and passively managed stock, bond, and balanced accounts, a money market fund, and a fixed interest account.
The investment goals of these accounts and the returns the accounts have actually achieved are described in the annual Supplemental Investment Fund Prospectus published by the Minnesota State Board of Investment.
Share Values of Investment Accounts
The Minnesota State Board of Investment maintains monthly share values going back to 1967 on their website, including monthly interest for the Money Market.
Rates of Return for Investment Accounts
Investment goals and past performance for the accounts are reported in the Minnesota Supplemental Investment Fund annual prospectus published by the Minnesota State Board of Investment.
Changing Investment Selections
You are encouraged to contact PERA if you want to change your investment selections in the Defined Contribution Plan (DCP). PERA representatives will provide you with a DCP Investment Selection Form and a prospectus explaining the seven accounts available in the DCP. As a participant in the Defined Contribution Plan, you are entitled to invest in any one or more of the accounts offered.
Choosing the Right Investment
As you might expect, people have different levels of comfort when it comes to investing their money. Some are very comfortable with investing in risky ventures while others are uneasy unless their money is in the safest places possible. PERA recognizes these differences among investors and believes that individual investors are the best judges of how risky or secure their investments ought to be. Consequently, PERA’s counselors do not offer recommendations to DCP participants about where to invest their funds.
There are no risk-free or insured accounts in the Supplemental Investment Fund. There are, however, certain accounts that pose less risk than others. You should expect that these lower risk accounts will also provide lower returns over the long run. The best source of information about the accounts in the Supplemental Investment Fund annual prospectus from the SBI. Participants who need additional investment counseling may wish to obtain advice from a financial planning professional.
Transferring Shares from an Account
Total Withdrawal – To withdraw all your shares from an account, you need to complete Part II of the DCP Investment Selection Form. There are three steps you must follow:
- Step 1. In column A of Part II, write 100% in the box corresponding to each account in which you wish to sell all shares you currently own. This tells PERA to sell 100 percent of the shares in the account or accounts so indicated.
- Step 2. Designate new investment selections in column B. Indicate what percentage of the proceeds of the sale of shares in Column A should be invested in the accounts listed.
- Step 3. Check how your current contributions are being invested. If the account you want to abandon appears as an investment selection for future contributions, you must designate new investment selections for payroll contributions, unless you want shares of this account purchased in the future. To select new investments for payroll contributions, you must complete Part I of the DCP Investment Selection Form. In Part I, indicate the percentage of new and incoming payroll contributions you want invested in the accounts listed.
Partial Withdrawal – To pull out some, but not all, of your funds invested in a particular account, you need to complete Part II of the DCP Investment Selection Form. There are two steps to follow:
- Step 1. In column A of Part II, write in the percentage of the account value you wish to withdraw in the box corresponding to the account in which you wish to sell some shares. Since you wish to withdraw only part of the value of your account, the percentage you will write in here will be less than 100 percent for each account you wish to reduce.
- Step 2. You must designate new investment selections in column B. When completing column B, indicate the percentage of the proceeds of the sale of shares in column A you wish invested in the accounts listed.
Special Rules Regarding the Fixed Interest Account
You may transfer funds from any of the Supplemental Investment Fund accounts to the Stable Value Fund at any time during the year. Although there is considerable flexibility in depositing lump sums into the account, transferring money out of the account may be restricted, depending on the accounts to which you transfer funds. Funds may be transferred directly from the Stable Value Fund into equity-related accounts without restriction. Equity-related accounts include the U.S. Stock index and active funds, the International Stock Fund, and the Balanced Fund.
There are special withdrawal restrictions that apply only to the Stable Value Fund. All or a portion of the amounts deposited in the fund may be transferred to the Balanced Fund, U.S. Stock Actively Managed Fund, U.S. Stock Index Fund, Bond Fund or Broad International Stock Fund within the supplemental Investment Fund. You may not re-transfer these amounts to the Money market Fund for at least 90 days.