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September 29, 2005
LONG GROVE, ILL. – September 29, 2005 –
Good news! Kemper Insurance has selected The Vanguard Group to be
the new recordkeeper and fund manager for the Kemper Employees’
401(k) Plan. Your account will transfer to Vanguard in December.
Here are some frequently asked questions and answers
to provide you with more information about the move to Vanguard
and help you prepare. You will receive additional details about
the transition in newsletters and other communications to be delivered
over the coming weeks and months.
Q. Why is the Kemper Employees’ 401(k)
Plan moving to The Vanguard Group?
A. The recordkeeping contract with Hewitt Associates expires on
December 31, 2005. After a review of the top 401(k) providers, Kemper
selected Vanguard because of their reputation for integrity, excellent
service, and low costs.
Q. What is The Vanguard Group?
A. Vanguard is one of the largest and most respected mutual fund
companies in the world, managing 18 million shareholder accounts—for
individual investors as well as retirement plan participants—and
more than $880 billion in assets. Vanguard has a well-established
reputation as a leader in the investment management industry and
is well known for delivering excellent customer service and ongoing
financial education.
Q. Will I have the same investment options
I now have?
A. In most cases, no. But new funds have been selected from the
Vanguard® family of funds to replicate the asset classes currently
available. There will be a mix of index and actively managed funds.
In addition, Vanguard Target Retirement Funds will be available.
Target Retirement Funds, such as the Target Retirement 2025 Fund,
provide a diversified portfolio, which is automatically rebalanced
as you move closer to your target retirement date. You will be receiving
much more detailed information regarding investment options in the
coming weeks.
Q. Will the stable value option still be
available?
A. Yes. Vanguard’s stable value fund is called Vanguard Retirement
Savings Trust. Account balances in the Kemper Stable Value Fund
will automatically transfer to Vanguard Retirement Savings Trust.
Q. How were the funds selected?
A. Your new funds were selected with the objective of ensuring that
you have the opportunity to choose from a broad selection of funds
across various market sectors. Kemper considered investment management
style, diversification of portfolio, fund expenses, and performance
relative to benchmarks in determining the most suitable funds for
the plan and existing participant accounts.
Q. What will happen to my account balance?
A. During the transition to Vanguard, the assets in your account
will transfer to Vanguard funds that are similar to the funds you
currently hold in your account. If you want your account balance
to be transferred to different funds, you can change your current
allocation before the transition begins in mid-December. After the
transition, you will be able to make exchanges (transfers) to different
Vanguard funds in the plan, if you wish.
Q. When will this change occur?
A. We are working on the details of the transition. We hope to make
the transition to Vanguard in mid-December. The plan will become
effective shortly thereafter. You will be notified if this information
changes.
Q. Will I have to take any action in preparation
for the transition?
A. Not specifically. Your assets will automatically transfer to
Vanguard. However, you may want to perform some account maintenance,
such as changing your current allocation, if it suits your goals.
You will be notified of the “mapping” of existing fund
options to the new funds at Vanguard in a newsletter to be mailed
to your home.
Q. Will I have access to my account during
the transition?
A. Account access will be limited during the transition. To ensure
that account balances are transferred properly and accurately, the
plan will experience a short blackout period, or “freeze,”
during which some transactions will be restricted. During the freeze
you will not be able to make changes to your investment options.
If you are particularly concerned about market volatility during
the freeze, you may want to move your balance or a portion of your
balance into other funds in the plan, such as the stable value fund,
before the transition begins. After the transition ends, you can
exchange your money between the different Vanguard funds in the
plan, if you wish.
You will receive more detailed information about the freeze in
future communications.
Q. Will my account’s beneficiary
transfer to Vanguard?
A. No. Kemper will request that you update your beneficiary information
after the transition. By law, a spouse is the default beneficiary.
If you elect a beneficiary other than your spouse, a spousal waiver
will be requested.
Q. Who can I speak with about my account
before the transition?
A. Before the transition you can discuss your account and make any
necessary changes by calling Hewitt at 1-888-989-7283.
Q. Will I still be able to speak with someone
about my account after the transition?
A. Yes. Once the transition to Vanguard is complete, you can speak
with a Vanguard Participant Services associate Monday through Friday
from 7:30 a.m. to 8 p.m., Central time. In addition, Vanguard’s
automated VOICE® Network is available 24 hours a day. You will
receive a personal identification number (PIN) in your home mail
that you must use to access VOICE. You will receive instructions
on how to contact Vanguard in future communications.
Q. Will I be able to access my account
online?
A. Yes. You will have online access to your account, after the conversion,
through Vanguard’s website at www.vanguard.com. This is a
secure website that requires online registration. You will be notified
when the site is available.
For more information about any fund, including
investment objectives, risks, charges, and expenses, call The Vanguard
Group at 800-523-1188 to obtain a prospectus. The prospectus contains
this and other important information about the fund. Read and consider
the prospectus information carefully before you invest. You can
also download Vanguard fund prospectuses at www.vanguard.com.
For more information about Kemper, visit its website
at www.kemperinsurance.com
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