Redemption Fees and Trading Policies
04-01-2010
Given the degree of volatility recently experienced in the financial markets, we believe it is important to remind PCA Retirement Plan participants that market timing is strongly discouraged within the PCA Retirement Plan. Market timing refers to the practice of short-term buying and selling of financial instruments to presumably exploit inefficiencies in pricing. It is extremely important for participants to know that market timing of mutual funds may result in a very expensive penalty imposed by the mutual fund called a Redemption Fee. Short term buying and selling of mutual funds may harm other investors by diluting gains or increasing costs for the fund. To discourage this behavior most of our Core Mutual Fund Managers have imposed either a redemption fee policy or a trading restriction policy.
Redemption fees and trading restriction policies are required by our mutual fund companies under guidance from the U.S. Securities and Exchange Commission (SEC). By law (i.e. SEC Rule 22c-2), RBI is required to enforce the stated trading policies of our mutual funds within the PCA Retirement Plan. Given the improved capabilities of RBI’s new recordkeeper, RBI will strictly enforce the SEC Rule by either remitting the appropriate fee to the mutual fund companies for the benefit of remaining participants, or by imposing a restriction on all trades that are not in compliance.
Listed below are the descriptions of our Core Mutual Fund Redemption Fees and Trading Restrictions. To find out more information about these policies, please refer to the fund’s prospectus. Also keep in mind, our mutual fund managers can change or modify their policies at any time.
Redemption Fees
Conservative Bond Fund: 2% of trade for any trades made within 90 days of purchase
Trading Restrictions
S & P 500 Stock Index Fund – Trades into the fund are prohibited if you have sold out of the fund within 60 days
International Fund (only one, Artio, of the two managers has a restriction) - Trades into the fund are prohibited if you have sold more than $5,000 out of the fund within 30 days
Small Cap Fund - Trades into the fund are prohibited if you have sold out of the fund within 30 days
