Below are answers to the most frequently asked questions about the State of Illinois Deferred Compensation Program.
Do I pay "loads" or sales commissions?
The funds offered are all "no-load" funds or the load has been waived. This means there are no sales charges or redemption fees. Each fund charges an investment management fee which is explained in the prospectus. It is deducted from the fund's net assets before the return is calculated.
Is there a cost or commission to buy and sell (exchange) funds?
As of October, 2009 all general exchange fees have been eliminated and there are no costs to exchange one fund for another. Certain funds do, however, have restrictions to prevent excessive trading and can impose transaction fees. Contact T. Rowe Price or the fund in question for further information on such fees.
Are participants charged a fee by the plan?
By law the Plan must be self-sufficient and all expenses of maintaining and administering the Plan must be bourne by the participants. Towards this end a $7.50 fee is charged each quarter to all participants with account balances over $3,000. These fees are used solely to cover the expenses of the Deferred Compensation Plan.
What happens to the share price (NAV) of a mutual fund when a capital gain or dividend distribution is made?
As a general rule, the price per share will decrease by the amount of the distribution, plus or minus the fluctuation of the market.
How often are dividend and capital gain distributions made?
Capital gains can be distributed semi-annually or annually, usually at the end of the calendar year. Dividend distributions vary, depending on the fund. All money market and most income funds distribute dividends monthly and the price is unaffected. Some income funds have an annual distribution while some have quarterly or monthly distributions. Growth/income funds distribute dividends quarterly, while growth funds can distribute semi-annually or annually, usually when capital gains are distributed.
Is the money invested in mutual funds insured?
No. The mutual funds are not insured against market fluctuations. They are insured against fraud and embezzlement.
Is the Stable Return Fund a mutual fund and why doesn't it appear in the daily newspaper?
The Stable Return Fund is not a mutual fund. It is a proprietary fund managed by PRIMCO Capital Management for the Deferred Compensation Plan. Its share price (NAV) of $1 does not fluctuate from day-to-day.
Can I call the Deferred Compensation Office or the funds to get investment advice?
No. We cannot recommend one fund over another. We try to provide you with all the materials to make an informed decision. The ultimate decision lies with you as the investor. You may call the investment funds for fund performance and/or additional literature.
Is there a number I can call to get the balance of my account?
Yes. Participants should contact the plan record keeper, T. Rowe Price Services, (1-888-457-5770) to get their account balance.