(Closed to new investments effective April 1, 2006)
The portfolio is designed so that it may produce average returns that are higher than the assumed 4% annual investment return. This option is not open to new annuitants.
This Annuity is closed to new investments. Members who annuitized prior to April 1, 2006, chose the Balanced Benefit Annuity and did not convert to the Basic and/or Participating Annuity, remained in the Balanced Benefit Annuity.
The Balanced Benefit Annuity is a portfolio comprising both stocks and bonds This Annuity is invested with a target allocation of roughly 55% to stocks and 45% to bonds.
For the equity portion, The Fund invests primarily in a broadly diversified portfolio of domestic and international equity securities further diversified by market capitalization, sector and style.
For the Bond portion, permissible investments include Treasury securities, government agency bonds, corporate bonds, mortgage-backed and asset-backed securities, U.S. dollar-denominated foreign bonds and cash equivalents. The Fund may also invest in senior secured bank loans, high yield bonds, non-investment grade and emerging market debt securities denominated in U.S. dollar or any other currency within established limits. An average maturity of 5 to 10 years is normally maintained in this Fund. Predominantly fixed income based alternative assets may be approved by the Investment Committee.
Alternative assets are permitted investments within limits, subject to approval by the Investment Committee. Alternatives may include private equity (buyouts, venture capital, distressed), real assets (real estate, timber and other natural resource based assets) and hedge fund strategies such as arbitrage, relative value , directional and event-driven strategies.
Annuity Payments reflect the performance of our Balanced Fund, with a three-month lag, minus the 4% growth assumption that is built into the level of a member's initial Annuity payment.