• New money in the account is added to the Schwab Money Market Fund.   The current yield on this money market fund is 4.41% as of November 14th.

2. Can we transfer funds to another fund family without a charge?

• Within Schwab you have access to over 8000 mutual funds from several hundred different investment companies (fund families)  Of those over 3000 are available without transaction charges to purchase them.  A significant number of those "no transaction" funds though may not be appropriate to purchase (in our opinion), due to high internal expense ratios and/or high 12b-1 charges accessed against the performance returns, higher than average risk attributes, or below average performance.  We screen the fund choices down to a manageable 40 or 50 choices which meet our guidelines.  We provided a user friendly menu of 5 or 6 funds to your employees on the sheets we distributed at the meetings.  Employees who opt to use the self directed option can invest and diversify their accounts using this menu or can do their own research and select other funds or securites (such as stocks) from the thousands of choices available at Schwab.

• Beyond the select menu of 5 or 6 funds which does provide a good basic menu, we can customize individual accounts for employees in specific situations for specific risk tolerance and performance expectations.  This customization can include a stock portfolio if desired or could be confined to a screened menu of mutual funds which meet the guidelines we are looking for in relationship to the particulars of this employee.  This is the optional service we offer.  For CVS and PSM employees, we offer a discounted rate of .75% annual (.1875% quarterly) and waive our $100,000 minimum account size.  We will systematically invest available excess cash into the planned asset allocation strategy.  This one feature (investing the cash as it is available) would in many cases more than make up the fee many times over.

3. Can a new employee not yet eligible to enter the CVS/PSM profit sharing plan roll over his 401K from his former company?

• A new employee will have to wait until he is a participant to be able to roll the money over into the plan.  As an alternative, he can roll his money over into an IRA account and depending on the plan he currently has his money in - if it is over a certain dollar amount he can leave his money in that plan until he becomes a participant and then roll it over.  Most plans allow you to leave your money there after you leave unless the balance is under a certain dollar amount and then either it is paid out or rolled over into an IRA established for you unless you tell them otherwise.  Jerry Peabody’s group in Macomb can assist with setting up new IRA’s.

Other Documents:

Profit Sharing Plan Summary

 

 

 

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