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Hollis Lamon
President at Lamon & Stern, Inc.
Atlanta, Georgia (Greater Atlanta Area) | Investment Management

Hollis Lamon specializes in 401k growth retirement planning, maintaining and growing retirement income, 401k bench comparisons and corporate retirement advisement. With this knowledge, Lamon has assisted retirement professionals in making sound investments that has helped them prepare for their future.

As a registered municipal principal, options principal and investment advisor, Hollis Lamon has also worked side by side with third party marketers and administrative firms.

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Nationwide: Investment Basics

Investment basics :
Carefully consider the fund's investment
objectives, risks, charges and expenses

Investment Basics

Understanding how to invest in your plan may seem complicated, but once you learn a few terms and investing strategies, the choices can become clearer.

There are three major types of investments:

 1.  Cash equivalents
 2.  Bonds
 3.  Stocks

CASH EQUIVALENTS

Cash equivalents, which include certificates of deposit (CDs), U.S. Treasury bills and money market funds, can be turned into cash at any time.  While these are some of the less risky investment options, returns may not keep pace with inflation.

BONDS

Bonds are loans made to a government or corporation.  In return for borrowing our money, bonds may pay a fixed amount of interest.  Bonds are sensitive to interest rates – and can gain or lose value.

STOCKS

Stockholders own a part of the assets of the company they invest in and part of the stream of cash those assets generate.  As the company acquires more assets and the stream of cash it generates gets larger, the value of the business increases.  This increase is what drives up the value of its stock.

"I knew I needed to start contributing to my plan if I wanted to retire someday.  But there's so much information and so many choices, I wasn't sure what to do about selecting and managing the investments that would help me reach my goals.  I needed help.  And I got it."

WHAT IS A MUTUAL FUND?

A mutual fund is a mix of investments that may include stocks, bonds and cash equivalents.  The fund is managed by a professional money manager and has a stated objective or investment style.  The core investment options in your retirement plan are mutual funds rather than individual stocks or bonds. 

HOW MUCH RISK SHOULD YOU TAKE? 

Knowing your investment horizon time (or years until retirement) is important because it indicates the number of years your money will remain invested.  Generally speaking, the longer your time horizon, the more aggressive you can be with your investment. 

DIVERSIFICATION HELPS, TOO. 

Diversification is the process of spreading your money among different investment types.  By investing in stock, bond and cash mutual funds, down periods in one fund may be offset by gains in another.  Maintaining a diversified portfolio can help smooth the ups and downs of your investments – though diversification itself does not ensure profit nor protect against loss. 

YOU SHOULD KNOW. 

For more information about the funds available, including all charges and expenses, please consult a prospectus.  Fund prospectuses and additional information relating to your retirement plan can be obtained by contacting your pension representative.  Before investing, carefully consider the fund's investment objectives, risks, charges and expenses.  The fund prospectus contains this and other important information.  Read the prospectus carefully before investing.

Hollis Lamon
Lamon & Stern
Atlanta, Georgia

Contact Hollis Lamon of Lamon & Stern today for all your retirement planning needs! 770-951-8411

Thought Capital: New Participant Fee Disclosure Rules: What Plan Sponsors Need to Know

FROM: 
Thought Capital 

New Participant Fee Disclosure Rules: 

What Plan Sponsors Need to Know

TO:
The new participant disclosure rules are intended to help ensure that all participants and beneficiaries in participant-directed individual account plans have the information necessary to make informed decisions.

Compliance should not be terribly
burdensome for plan sponsors.

Effective date update:  On July 13, 2011, the Department of Labor (DOL) announced an extension of the deadline for the participant disclosure rules.

Initial disclosures must now be furnished no later than the later of:

      ·60 days after the plan's anniversary date that occurs on or after Nov. 1, 2011, or

    ·60 days after the effective date of the plan sponsor-level fee disclosure rule (April 1, 2012)

Please take this change into account as you proceed in reading.

Executive Summary

In October, the Department of Labor ("DOL") published final regulations that require plan administrators (typically the plan sponsor) to disclose certain fee and investment information to participants and beneficiaries in Employee Retirement Income Security Act of 1974 (ERISA) covered participant-directed individual account plans, which include the vast majority of 401(k) and private-sector 403(b) plans.  The final regulations will apply to plan years beginning on or after November 1, 2011.  Thus, for calendar-year plans, the regulations will become effective January 1, 2012.

The new participant disclosure rules are intended to help ensure that all participants and beneficiaries in participant-directed individual account plans have the information necessary to make informed decisions about plan participation and selection of investment choices for their accounts.  

Of course, record keeper and investment service providers to individual account plans have long helped plan sponsors make information about plan fees and investment-related expenses available to participants and beneficiaries, typically through a secure website.  The new regulations, however, require plans to affirmatively provide specified information to "participants," defined broadly to include all individuals eligible to participate in the plan (without regard to whether an individual has an account balance).

For the most part, the information required to be disclosed under the regulations is not dissimilar from the information that is typically made available to participants and beneficiaries today, although the new regulations require disclosure of investment-related performance and fee information in a comparative format, which may differ from current practice.The new rules also create more uniform fee and performance disclosure requirements for different types of investment options, which may help plan sponsors as well as participants effectively compare investment alternatives.

"The new rules also create more uniform fee and performance disclosure requirements for different types of investment options, which may help plan sponsors as well as participants effectively compare investment alternatives. "

Compliance should not be terribly burdensome for plan sponsors.  Plan administrators should work with their record keeper to see that the necessary information is gathered and the required disclosures developed.  Helpfully, plan sponsors are permitted to rely in good faith on information provided by their service providers, such as record keeper and investment providers, who will assist with providing the required information and developing the required disclosures.

The new rules may have broader repercussions.  It is possible that the new rules and their comparative format requirement will indirectly affect covered individual account plans by helping to inform the number and types of investment alternatives that plans offer to participants.  In addition, since the regulations highlight the manner in which plan administrative services are financed, they may influence plan sponsors' approach to financing plan costs.

By Davis and Harman LLP, for the Principal Financial Group*

Hollis Lamon
Lamon & Stern
Atlanta, Georgia

Contact Hollis Lamon of Lamon & Stern today for all your retirement planning needs! 770-951-8411