When CTC employees begin to participate in "QPP" or "SPP", our Pension Plan contributions must be placed in an initial automatic "default" asset allocation or "default" portfolio. After those initial contributions, plan members can choose from a variety of other options. They can choose to stay in the "default" portfolio, if they wish, or they can transfer all (or a portion) of their pension funds into other investments. They can re-allocate their funds periodically, subject to published trading policies.
In the past, Pension Plan Trustees had to decide what the initial automatic "default" portfolio would be. The new Pension Protection Act ("PPA") of 2006 changed that. The Pension Protection Act and the Department of Labor now dictate what the automatic "default" portfolio should be. We must now use special mutual funds called "targeted retirement date funds" as our automatic "defaults". In our case, we use ten T. Rowe Price Targeted Retirement Date Funds.
These ten T. Rowe Price Targeted Retirement Date Funds are tailored to individuals, based on their estimated future retirement date. They consist of a diversified mix of stocks and bonds, which are automatically reallocated and rebalanced over time by the fund's managers. The funds become more conservative as the individual gets closer to the targeted retirement date. They assume a retirement age of 65 years old. The ten T. Rowe Price funds that are utilized as our new "default" portfolios are as follows:
|T. Rowe Price Retirement 2010 Fund||T. Rowe Price Retirement 2015 Fund|
|T. Rowe Price Retirement 2020 Fund||T. Rowe Price Retirement 2025 Fund|
|T. Rowe Price Retirement 2030 Fund||T. Rowe Price Retirement 2035 Fund|
|T. Rowe Price Retirement 2040 Fund||T. Rowe Price Retirement 2045 Fund|
|T. Rowe Price Retirement 2050 Fund||T. Rowe Price Retirement 2055 Fund|