What is changing in the Delphi SRSP and PSP 401(k) Plans?

Effective March 23, 2011, 4 pm (EST), the Promark Income Fund investment option will be terminated and all existing balances in and all future contributions allocated to the Promark Income Fund will be placed into the new PIMCO Interest Income Fund.

Why is the Promark Income Fund being eliminated as an option in the Delphi Plan investment menu?

For Delphi Plan participants, the Promark Income Fund is being managed by General Motors Asset Management (GMAM). As of November 2010, with the change in investment consultant from GMAM to NEPC, LLC, the Delphi Plan became a “non-affiliated” client of GMAM. GMAM has now determined that it will no longer offer the Promark Income Fund to non-affiliated plan sponsors and their plan participants.

What is the replacement fund and what is the expected return as compared to the Promark Income Fund?

The Promark Income Fund is being replaced with the PIMCO Interest Income Fund. The two funds have a different investment focus. Promark Income Fund is a type of investment known as a stable value fund, investing in a variety of fixed income investments with a duration of approximately 2.7 years, combined with certain types of insurance contracts, plus a specified rate of return. Due to the financial market downturn, the establishment of these types of stable value funds has been severely restricted. The PIMCO Interest Income Fund is different from the stable value fund strategy in that it invests in shorter term securities that normally generate lower returns in exchange for lower risk. It is expected to provide liquidity, low price volatility, and current income. The result will be a daily yield which is expected to provide current income in excess of money market returns but to a lesser degree than an investment option with a focus on longer maturity assets, such as the Promark Income Fund.

What can I do if I do not want my existing investments or my future contributions placed into the PIMCO Interest Income Fund?

You can request an exchange or modify your investment elections up until 4 pm (EST), March 23, 2011 to other fund options with your SRSP or PSP. If you need assistance in making an exchange, modifying your investment election, or have any questions regarding the other fund options in your Delphi 401(k), contact Mainstay Capital Management toll-free at (866)444-6246. We are always happy to assist.

Are there any penalties or fees to exchange into or out of the PIMCO Interest Income Fund?

No. There are no penalties or fees to transfer balances or new contributions to or from the PIMCO Interest Income Fund.

Where can I get additional information relating to the other investment options available in the Delphi SRSP or PSP and where can I go for assistance with a change in my asset allocation?

Contact Mainstay Capital Management toll-free at (866)444-6246 for assistance or any additional information regarding the other investment options in the Delphi SRSP or PSP.

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Mainstay Capital Management, LLC is an investment advisor registered with the Securities and Exchange Commission. Due to various state regulations and filing requirements, Mainstay and its representatives may only provide investment advisory services in those states in which it is first appropriately registered or otherwise exempt or excluded from registration requirements. The purpose of this website is to provide the public with general information about the services offered by our investment management firm. Mainstay does not render personalized investment advice or services or effect, or attempt to effect any securities transactions, on this website. Our firm continuously monitors its filing requirements in all states, and will provide individualized advisory services only in accordance with various state regulations. Mainstay does not make any representations or warranties as to the accuracy, completeness, or relevance of any information prepared by any unaffiliated third party provider, whether linked to Mainstay's website or incorporated herein. All such information is provided solely for convenience purposes only and all users thereof should be guided accordingly.

 

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Barron's Magazine - Top 100 Independent Financial Advisors

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