Products October 17, 2011

Vanguard Announces Changes to Target Date Fund Series

October 17, 2011 (PLANSPONSOR.com) - Vanguard is planning to introduce a new fund to its Target Retirement Funds in early 2012 and merge two funds with similar asset allocations.
Reported by

The Vanguard Target Retirement 2005 Fund will merge with the Vanguard Target Retirement Income Fund as their asset allocations become nearly identical. The Target Retirement Funds are designed to reach an allocation of 65% bonds, 30% stocks, and 5% short-term reserves within seven years after their target date, according to a press release. The 2005 Fund will be closed to new investors, effective immediately.

Vanguard has also filed a registration statement with the U.S. Securities and Exchange Commission for the Vanguard Target Retirement 2060 Fund, which is aimed at investors who plan to retire and leave the workforce in or within a few years of 2060. At the time the fund is launched in early 2012, those investors will be 18 to 20 years old.  

The expense ratio of the 2060 Fund is expected to be 0.18%, similar to that of the other funds in the lineup. The expected initial allocation is 63% Vanguard Total Stock Market Index Fund; 10% Vanguard Total Bond Market II Index Fund; and 27% Vanguard Total International Stock Index Fund.  

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For more information, visit http://www.vanguard.com.
Products October 17, 2011

NE 529 Plan Launches FDIC-Insured Savings Option

October 17, 2011 (PLANSPONSOR.com) - First National Bank of Omaha (FNBO), the Nebraska Educational Savings Trust (NEST), and Nebraska State Treasurer Don Stenberg announced the launch of the Bank Savings Investment Option, Nebraska's FDIC-insured 529 savings option.   
Reported by

NEST is Nebraska’s 529 college savings plan (previously named College Savings Plan of Nebraska), of which the State Treasurer serves as the Trustee and First National Bank of Omaha serves as Program Manager.  

According to the announcement, the Bank Savings Individual Investment Option is a low-cost investment option that is not subject to stock market fluctuation. The savings option is FDIC-insured up to $250,000 when combined with any other account owner holdings at the First National Bank of Omaha.  

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The Bank Savings Individual Investment Option has no minimum contribution, balance, or holding period; no withdrawal fees; a 0.20% total annual asset based fee; and no adviser fees in the NEST Advisor Plan.  The new option also offers competitive interest rates with a current 0.80% APY. This rate will change over time and is compounded daily and credited on a monthly basis less the total annual asset based fee.

State Treasurer Stenberg said the new option provides a very conservative, safe investment choice for parents, particularly those whose children are nearing college age or are already in college, and for grandparents who are seeking secure investment opportunities for their grandchildren’s educational expenses. “This will be a much appreciated option to make sure funds for their children’s or grandchildren’s education are secure and federally insured,” he said, in the announcement.

For more information, visit www.NEST529.com or www.treasurer.org.  

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