LifeStage Investment Management
Options for Managing Retirement Investments
Wespath Benefits and Investments (Wespath) offers two options for managing your retirement accounts:
Self-manage the account(s) by selecting from Wespath’s eight investment funds or
Have the account(s) managed for you with the LifeStage Investment Management (LifeStage).
If you have an account balance in the Ministerial Pension Plan (MPP), an appropriate investment mix will automatically be determined by LifeStage. However, LifeStage is also a convenient option—offered at no charge—for managing Wespath-administered (non-MPP) defined contribution retirement account(s).1 LifeStage manages balances for more than 60% of participants in non-MPP plans.
Before choosing whether to self-manage your account or use LifeStage, consider:
Your personal investment style and preferences
Your readiness to make investment decisions
Amount of time and effort you’re willing to spend managing the account
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How LifeStage Works
LifeStage develops a customized target investment mix (also called a “target fund allocation”) based on key information about you, including your age, a risk tolerance that you specify and whether you will qualify to receive Social Security benefits. You can choose to personalize your LifeStage variables by completing your Personal Investment Profile. To attain your target mix, LifeStage allocates your account balances among six of Wespath’s investment funds: the Stable Value Fund (SVF), Inflation Protection Fund (IPF), Fixed Income Fund (FIF), Extended Term Fixed Income Fund (ETFIF), U.S. Equity Fund (USEF) and International Equity Fund (IEF).
If you have an MPP account balance, LifeStage will reduce your risk exposure as you approach the age at which you anticipate converting your MPP balance to a monthly benefit payment. This reduction in equities will lower the risk of a significant change in your account balance prior to receiving benefits. LifeStage allocates the portion of your MPP account balance that you must annuitize to lower risk investments compared to the non-annuitized portion.
LifeStage uses a different investment strategy for your (non-MPP) Defined Contribution Account. LifeStage manages these account balances with a longer time horizon, as it assumes you will gradually withdraw funds from your account during your retirement years. So that LifeStage can determine your best investment mix, it considers your age and your other retirement benefits administered by Wespath, as well as the current value of your future Social Security benefits, if applicable. For clergy, other Wespath-administered retirement income sources may include the Pre-82 Plan and the Clergy Retirement Security Program defined benefit component, as well as the value of your monthly MPP benefit (if you are eligible and receiving such benefits). Consideration of other sources of retirement income means that your Defined Contribution Account can be invested in assets that offer greater growth potential, as illustrated in the examples below.
Allocation of Total Retirement Support—Examples
LifeStage includes future Social Security benefits and the Defined Contribution Account in Total Retirement Support.
LifeStage assumes that the current value of a participant's future Social Security benefit is similar to holding fixed income instruments. As a result, LifeStage will invest a higher percentage of the lay participant’s Defined Contribution Account in equities.
LifeStage includes future Social Security benefits, other Wespath-administered retirement benefits, the Ministerial Pension Plan Account and the Defined Contribution Account in Total Retirement Support.
The percentage of a participant's MPP account invested in equities decreases as the participant approaches the age at which he or she anticipates beginning to receive MPP monthly benefit payments.
LifeStage can continue to invest a significant portion of the clergy participant’s Defined Contribution Account in equities since the participant has other sources of retirement income that are considered to be similar to holding fixed income investments.
These examples are illustrative for LifeStage allocations but may not be representative of the actual allocation created for you.
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Personal Investment Profile
Your Personal Investment Profile enables you to specify if you want LifeStage to manage your (non-MPP) Defined Contribution Account and to answer questions that will fine-tune your target fund allocation.
It asks the following questions:
Do you want LifeStage to manage the investment of your Defined Contribution Account?
What is the term that best describes your willingness to accept risk with your investments: Conservative, Moderate or Aggressive?
Do you expect to be eligible to receive Social Security retirement benefits?
For participants with an MPP balance, it asks the following additional questions:
At what age do you anticipate beginning to receive your lifetime MPP monthly benefit payments?
What is your intention for the non-annuitized portion of your MPP account balance at retirement? (Will you take it in one lump sum or roll over to UMPIP or another plan and take partial distributions or monthly installments?)
You can review and change your Personal Investment Profile at any time by selecting “LifeStage” from the Retirement Benefits category of “My Benefits.”
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Aligning Your Actual Investment Mix with Your Target
LifeStage allocates account balances among six of Wespath’s investment funds to create a customized target investment mix (i.e., the mix between equity and fixed income investments), which is based on your Personal Investment Profile.
There are two funds to which your account will not be invested by LifeStage: The Multiple Asset Fund (MAF) and Equity Social Values Plus Fund (ESVPF). These funds are diversified multiple asset class funds, or “pre-mixed” funds.
The LifeStage Investment Management Service invests in:
The two equity funds:
U.S. Equity Fund
International Equity Fund
and in four of the fixed income funds:
Stable Value Fund
Inflation Protection Fund
Fixed Income Fund
Extended Term Fixed Income Fund
Each quarter, LifeStage compares your target mix with your actual mix, which changes in real time due to market fluctuations. If there is a significant difference, LifeStage will automatically buy and sell units in Wespath investment funds to more closely align your investments with your target allocation. This realignment is called rebalancing. To further assure alignment of your target fund allocation with your actual investment fund mix, LifeStage may allocate new contributions to a single fund rather than to all six of the Wespath funds in which LifeStage invests. The fund selected will be the one in which the actual allocation is the furthest below the fund’s target allocation percentage.
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Is LifeStage Right for You?
LifeStage does all the work of determining your target fund allocation and rebalancing your allocations when appropriate. If you prefer to have investment decisions handled for you, LifeStage is an ideal way to manage your Wespath-administered retirement accounts sensibly and effortlessly.
However, LifeStage may not be appropriate for everyone. In particular, LifeStage may not be the best option if you:
have significant retirement resources outside of Wespath,
have a pension from a previous employer,
entered the work force relatively late in life,
have an illness that could shorten your life expectancy,
have some Social Security coverage but elected not to participate in Social Security as a clergyperson, or
do not plan to rely on your defined contribution account balances to provide you with lifetime income.
Some people prefer a more hands-on approach than LifeStage offers for managing their retirement account balance(s). A professional financial adviser can help you rebalance your investment allocations periodically to adjust to market fluctuations and changes in your circumstances. Eligible participants in Wespath-administered retirement plans can receive financial planning assistance at no charge from EY Financial Planning Services.1
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To elect the LifeStage Investment Management Service:
If you have questions, call Wespath at 1-800-851-2201. Representatives are available business days from 8:00 a.m. to 6:00 p.m., Central time.
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Changes to Your LifeStage Personal Investment Profile
Your election whether to have LifeStage manage the investment of your Defined Contribution Account is one factor in your Personal Investment Profile. You can review and change your Personal Investment Profile at any time by selecting “LifeStage” from the Retirement Benefits category of “My Benefits.”
If you decide to manage the investment of your Defined Contribution Account without using LifeStage, you can elect or re-elect LifeStage at any time, but you may be subject to a minimum 60-day waiting period before LifeStage resumes management of your account.
You may also be subject to the minimum 60-day waiting period if you elect LifeStage but you were previously actively managing your Defined Contribution Account.
Please note: If you have a Ministerial Pension Plan Account, LifeStage will automatically manage this account balance. You cannot opt out of LifeStage for your Ministerial Pension Plan Account.
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1 Costs for these services are included in Wespath’s administrative expenses that are paid for by the funds.