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- Calculate Your Retirement Income Needs
- Types of Mutual Funds
- Selecting Funds
- Fund Share Classes
- Long-Term Appreciation
- Income-Generating Funds
- Choosing Investments
- Investing Style
- Investment Videos
- Rollovers and Transfers
- What is a Transfer
- Transfers Made Easy
- What is a Rollover
- Opening a Rollover IRA
- Cost Basis Reporting Changes
- Prospectuses & Reports
- Glossary
- FAQs
- Estate Planning
- Annuities
- Life Insurance
- Financial Tools & Resources
Mutual Fund FAQs
General
Why Buy a Mutual Fund?
Mutual funds offer you a diversified investment vehicle without requiring a great deal of money. Your investment and those of other investors with similar objectives are pooled to purchase securities.
A professional manager will closely monitor the securities held within a fund portfolio to determine if they're meeting the objective of that fund. Managers will buy and sell securities in an effort to get the best return for investors while maintaining that objective. There's usually a fee charged by fund companies for the manager's services. Those fees are normally a fraction of what it would cost you to make stock or bond purchases independently. See the prospectus for complete information regarding fees.
How Do I Select a Mutual Fund That is Right for Me?
First, determine your investment goal. Next, establish the amount of risk you're willing to assume to achieve this objective. A registered State Farm® agent can provide you with a risk-tolerance tool to help you in determining your tolerance to risk. From there, identify funds with investment objectives in line with your own and with investment strategies that appear suited to your risk-tolerance level. Your registered State Farm agent will work with you to determine the funds that fit your risk tolerance, or you can use our Fund Selection Tool.
How Do I Determine the Number of Funds That I Should Own?
The number of funds to own is a personal financial decision requiring a careful analysis of your specific needs and long-range investment plans. Your registered State Farm agent can be a valuable resource in helping you explore this objective.
Is There Risk in Owning Too Many Funds?
Yes, there is. While diversification may help, it doesn't assure a profit or protect against loss in a declining market; in addition, over-diversification can water down your investment results. That can hinder your progress toward achieving your goals. As a result, you need to find a balance between returns and risk with a select number of quality funds most appropriate for your personal financial needs. Your registered State Farm agent can provide important guidance and support in helping you explore this objective.
How Do I Get Started with a New Account?
Complete an application with your State Farm agent or contact a Mutual Funds representative to request a new account packet. You may also download a new account packet. The minimum initial investment for State Farm Mutual Funds® and The State Farm College Savings Plan is $250, with a $50 minimum for subsequent investments. If you wish to begin an automatic investment plan (AIP), the minimum amount required for both initial and subsequent investments is $50.
What Can I Do to Ease My Concerns Over the Recent Price Fluctuations of the Stock Markets?
During a volatile market period, it's important to remain focused on your long-term investment goals. There is market risk involved when investing, including possible loss of principal, but by working with your registered State Farm agent, you can understand the benefits of investing for the long term, the importance of diversifying your portfolio, and the value of making regular investments over a long period of time. Although such an investment program cannot ensure a profit, it can ease the uncertainty created by changes in the markets.
Can I Open a State Farm Mutual Fund Account Without the Assistance of an Agent?
Yes. However, every account opened with State Farm Mutual Funds must have a registered State Farm agent associated with it. If you open your account without the assistance of a registered State Farm agent, an agent in your local area will be assigned to your account.
Can I Invest Periodically Throughout the Year?
Yes. An easy way to do this is through an automatic investment plan. You can take advantage of an investment strategy known as "dollar-cost averaging".
What Else Should I Keep in Mind After Purchasing My Funds?
Investing is not a one-time event. As your needs and goals change over time, you may want to shift assets from one type of fund to another. For example, when you have many years to reach retirement, you may want to invest most of your assets in stock funds because you have time to ride out the market's ups and downs. But when you come within 10 years of retirement, you might want to invest a higher percentage of your assets in bond funds. An annual meeting with your registered State Farm agent is an excellent opportunity to keep your investments in line with your goals.
What is the Difference Between Class A and Class B Shares?
With Class A shares, a sales load of up to 5 percent will be added to the initial purchase price. Class B shares are subject to a contingent deferred sales charge, or "back-end load," that applies when you redeem your shares.
Some investors prefer to pay the sales charge when the initial purchase takes place and then pay lower 12b-1 fees, asset-based sales charges for marketing and distribution costs, over time. Others may purchase Class B shares with higher 12b-1 fees in order to have a higher percentage of their investment go to work on day one. We developed our cost structures with the intention of neutralizing as much as possible the difference in the overall costs between Class A and B shares over time. However, because the sales load applied to Class A shares is reduced based on the amount invested, neutralization may not always occur.
The contingent deferred sales charge will be reduced during the period Class B shares are held. Class B shares held for seven years or longer will not be subject to the contingent deferred sales charge and will convert to Class A shares after eight years. No sales charge is applied when this conversion takes place.
No sales load is applied to reinvested dividends or distributions and Class A shares of the State Farm Money Market Fund are not subject to an up-front load. Exchanges from the State Farm Money Market Fund to any of the other State Farm Mutual Funds will be subject to an up-front load.
Who can buy Class A, Class B, Legacy Class A, and Legacy Class B shares?
Grandfathered shareholders may purchase Legacy Class A and Legacy Class B shares, whereas shareholders who are not grandfathered may purchase Class A or Class B shares.
You are a grandfathered shareholder if you satisfy one or more the following criteria:
- Your account holding Legacy Class A or Legacy Class B shares was established before May 1, 2006.
- Your account holding Legacy Class A or Legacy Class B shares is established after April 30, 2006, as a result of the death or divorce of one or more individual shareholder(s) who had a grandfathered account.
- Your account holding Legacy Class A or Legacy Class B shares is established after April 30, 2006, as a result of a conversion or re-characterization of a grandfathered IRA account.
- You are a trustee that obtained Legacy Class A or Legacy Class B shares from another grandfathered account.
Are There Any Costs or Penalties for Withdrawing Funds?
There are no charges for redeeming Class A shares. If you redeem Class B shares, you may be assessed a contingent deferred sales charge based on the length of time you've held the shares. Shares held for seven years or longer will not be subject to the contingent deferred sales charge. Any time shares are redeemed, you may be taxed on any realized gains associated with those shares.
Funds that are held in traditional or Roth IRAs may be subject to a 10 percent tax penalty if a withdrawal is made prior to participant reaching age 59 1/2. Traditional IRA withdrawals may be made prior to age 59 1/2 without incurring the 10 percent tax penalty if certain criteria are met. For funds in a Roth IRA, qualified distributions are not subject to the 10 percent tax penalty. There is no 10 percent tax penalty for withdrawals from a Coverdell Education Savings Account if the money is used for qualified education expenses (including grades K-12). In a 529 College Savings Plan, withdrawals must be used for qualified higher education expenses in order for the earnings to be received free of federal income tax. The availability of such tax or other benefits may be conditioned on meeting certain requirements.
A tax advisor should be consulted for more in depth information concerning the taxation and tax penalties associated with redeeming mutual fund shares.
Low Balance Policy Requirements — How Can I Avoid Having This Fee Assessed to My Account?
If the balance in any of your accounts falls below $5,000 at the close of business on the 2nd business day of March, June, September, or December each account that is below this threshold will be assessed a quarterly $10.00 account fee or will possibly be closed out. This policy does not apply to SEP, SIMPLE, Archer MSA, 403(b)(7) or any other accounts held under employer-sponsored retirement plans.
No account fee will be assessed on an account that has been open for less than 12 months as of the 2nd business day in March, June, September, or December when the quarterly account fee is assessed. For example, if an account was opened on July 1, it would not be subject to the quarterly account fee until the 2nd business day of September the following calendar year.
If the balance in any accounts (other than a Traditional IRA, Roth IRA, Coverdell Education Savings Account, Archer MSA, SEP IRA, SIMPLE IRA, 403(b)(7), or any other accounts held under employer-sponsored retirement plans) falls below $250.00 at the close of business on the 2nd business day in November, the fund may redeem the shares in that account, close the account, and send the proceeds to your address of record. No account that has been open for less than 12 months as of the 2nd business day in November will be closed.
Your registered State Farm agent can assist you in determining if the account fee would be assessed, and what steps you can take to avoid it.
Retirement and Rollovers
What is the Annual Deadline for Contributing to My Traditional or Roth IRA?
You can make annual contributions to a traditional or Roth IRA from January 1 through the tax-filing deadline (excluding extensions) for the contribution year, generally April 15. For example, year 2013 contributions can be made from January 1, 2013 through April 15, 2014.
I Haven't Saved Much for Retirement. What Can I Do to Improve My Chances of Retiring Comfortably?
If you can be disciplined about investing for retirement, you'll have the opportunity to accumulate money over time and be better prepared for your retirement years. Develop a mindset of paying yourself in addition to paying your bills. By doing so, you should have a steady flow of money going to work for you.
How Do I Change My IRA Beneficiary?
You can change your beneficiary by completing a Designation of Beneficiary Form [PDF-112.7KB].
Without a beneficiary, your State Farm® IRA assets will generally pass to your estate upon your death. The assets could then be subject to the potential delays and expenses associated with settling an estate, and the distribution options allowed by federal income tax law may be limited.
Choose your beneficiary carefully. Contact your State Farm agent if you need assistance in selecting a beneficiary or have any questions regarding your investment options.
What's the Difference Between a Transfer and a Rollover?
A transfer is a movement of funds between like-type plans (IRA to IRA, SEP to SEP, Roth to Roth). A rollover is generally a movement of funds from one type of plan (e.g., 401k) to another type of plan (e.g., IRA).
What is Distribution Paperwork?
Distribution paperwork is the paperwork that must be submitted to initiate a rollover to State Farm. The paperwork may be referred to as a distribution election form, direct rollover form, or distribution authorization form. The paperwork may be part of a termination packet received by a participant who is eligible to receive a distribution from a plan.
Why Do I Need to Call the Custodian in the Case of a Direct Rollover?
Most custodians require the participant to call to request distribution paperwork. Some custodians may process rollover requests through Internet forms or phone calls.
Should I Send the Paperwork to State Farm or the Custodian Directly?
It would be best to send originals to the custodian and a copy to State Farm. If originals are sent to State Farm, we will forward them to the custodian.
Can I Put Both Transfers and Rollovers on the Same Form?
As a rule, direct rollovers require distribution paperwork from the surrendering custodian or plan administrator. The IRA/TSA Transfer Request Form [PDF-1.9MB] is used only for transfers between plans of the same type (e.g., Roth to Roth).
Saving for College
What is a 529 Plan?
Section 529 College Savings Plans are higher education savings plan trusts. Through these plans, individuals may make investments for the purpose of accumulating savings for qualifying higher education costs of beneficiaries. The plans include interests in pooled investment funds under trusts established by states or local governmental entities, as well as higher education savings plan trusts established by states.
What's the Difference Between a 529 Savings Plan and 529 Prepaid Plan?
A College Savings Plan is a program that allows participants to invest in a special account designated for qualified higher education expenses. In general, College Savings Plans offer a rate of return that depends on the performance of the plan's investments. As such, the value of a College Savings Plan account may increase or decrease over time.
With a prepaid tuition plan, parents, grandparents, and others essentially lock in today's tuition rates, and the program will pay out future college tuition at any of the state's eligible colleges or universities (or make a payment to private and out-of-state institutions).
How Does a 529 Savings Plan Work?
You will need to complete an account application and make an initial contribution to establish an account for a named beneficiary. Contributions to your account will be invested in shares of the portfolio or portfolios you choose after deducting any sales charges that may be applicable. When your beneficiary incurs higher education costs, shares may be redeemed from your account to pay for those expenses.
What Happens to an Account if the Beneficiary Dies, Becomes Disabled, or Does Not Attend College?
If the beneficiary of an account dies or becomes disabled, you'll be entitled to receive the balance in your account. Investment earnings will be taxed at your ordinary income rate, but no federal penalty tax will be assessed, and the trust will not assess a contingent deferred sales charge. You may also transfer the balance tax free to an account for another beneficiary who is a qualified member of the family.
If your beneficiary elects not to pursue post-secondary education, you may either transfer the account balance to an account for another beneficiary who is a qualified member of the family or withdraw the principal and investment earnings in a nonqualified withdrawal.
What Happens to Contributions Over the Maximum Limit?
The servicing agent will not knowingly accept contributions in excess of the applicable limit. If, however, it's determined that contributions are made in excess of the applicable limit, the excess and any earnings (or less any loss) attributable to such excess will be promptly refunded and will be treated as a non-qualified withdrawal that may be subject to a 10% federal penalty tax, but no contingent deferred sales charge will be assessed by the servicing agent.
How Are My Plan Contributions Invested?
Contributions will be invested in the selected portfolio(s) and designated allocations that you choose.
The plan consists of nine investment portfolios — four static portfolios and five enrollment-based portfolios. The portfolios each invest all of their assets in OppenheimerFunds®. The Oppenheimer investment portfolios invest their assets in other mutual funds managed by OFI Private Investments Inc. (OFIPI), a subsidiary of OppenheimerFunds, Inc. Each portfolio seeks to meet its investment objective by building a portfolio of investments that meet a target investment allocation between equity and fixed-income investments. Each portfolio's performance depends on the investment performance of the underlying funds in which it invests. Therefore, the risks of investing in the portfolios are the same as the risks associated with an investment in the underlying investments.
Under federal tax law, once a portfolio selection has been made, an account owner may only change how previous contributions (and any earnings thereon) have been allocated among the available portfolio options for all accounts for the same designated beneficiary once per calendar year or upon a change of the designated beneficiary.
What Are Considered Institutions of Higher Education?
Institutions of higher education generally include accredited, post-secondary educational institutions offering credit toward a bachelor's degree, an associate's degree, a graduate level or professional degree, or another recognized post-secondary credential, including certain post-secondary vocational institutions. The institution must be eligible to participate in U.S. Department of Education student aid programs.
What Types of Costs May Be Paid with Withdrawn Funds?
Withdrawals from an account may be used to pay higher education costs for a designated beneficiary. These include tuition, fees, books, supplies, and equipment required for enrollment or attendance at an eligible institution of higher education. They also include the reasonable costs of room and board for a designated beneficiary who is at least a half-time student. The cost of room and board qualifies only to the extent that it is not more than the greater of the following two amounts:
- The allowance for room and board, as determined by the eligible education institution, that was included in the cost of attendance (for federal financial aid purposes) for a particular academic period and living arrangement of the student.
- The actual amount charged if the student is residing in housing owned or operated by the eligible educational institution.
How Do I Make Qualified Withdrawals?
You may request a qualified withdrawal at any time and elect any of the following distribution options:
- The distribution may be deposited directly to your bank account.
- The distribution may be made in the form of a check payable to:
- The account owner,
- The designated beneficiary, or
- An eligible institution of higher education for the benefit of the designated beneficiary.
- The account owner,
To request a qualified withdrawal from your account, the account owner must complete a Withdrawal Request Form [PDF-561.2KB] and submit it to a State Farm representative or Oppenheimer Funds at P.O. Box 173865, Denver, CO 80217-3865 or by calling The State Farm College Savings Plan at 800-321-7520.
When Must Withdrawals Begin?
There is no set date or age by which you must begin making withdrawals from your account.
May I Make Withdrawals for Other Purposes?
Yes, but any such withdrawal will be a non-qualified withdrawal unless it is:
- A withdrawal by reason of the death (if paid to the designated beneficiary's estate) or disability (within the meaning of Section 72(m)(7) of the Code) of the designated beneficiary of the account;
- A withdrawal by reason of the designated beneficiary's receipt of a qualified scholarship (to the extent of the scholarship amount);
- A qualified rollover distribution.
The earnings portion of a non-qualified withdrawal is treated as income to the distributee and is subject to federal and applicable state income tax as well as an additional 10 percent federal tax on earnings. In addition, any applicable contingent deferred sales charges will be assessed by the servicing agent.
How Will Investments in the Plan Affect My Beneficiary's Chances of Receiving Financial Aid?
The eligibility of the beneficiary for financial aid may depend upon the circumstances of the beneficiary's family at the time the beneficiary enrolls in an institution of higher education, as well as on the policies of the governmental agencies, school, or private organizations to which the beneficiary and/or the beneficiary's family applies for financial assistance. These policies vary at different institutions and can change over time. Therefore, no person or entity can say with certainty how the federal or state aid programs, or the school to which the beneficiary applies, will treat your account. However, financial aid programs administered by agencies of the state of Nebraska won't take your account balance into consideration, except as may be otherwise provided by federal law.
No person or entity can say with certainty how the federal or state aid programs, or the school to which the beneficiary applies, will treat your account.
How Do Scholarships and Other Financial Aid Affect My Account?
If the beneficiary of your account receives a scholarship or other financial aid, the beneficiary may no longer require all of the funds in the account. In that case, IRS Publication 970 indicates that you may withdraw funds from your account up to the amount of such scholarship or other financial aid. The earnings portion of the withdrawal will be included in your ordinary income, but no federal penalty tax will be assessed. The trust will not assess a contingent deferred sales charge if the aid is a scholarship, allowance, or payment described in section 25A(g)(2) of the Internal Revenue Code.
You may also transfer the amount withdrawn in a qualified rollover distribution, in which case no amount of the withdrawal will be included in your income.
What is a Coverdell Education Savings Account (ESA)?
The Coverdell ESA is a trust or custodial account that provides individuals a tax-advantaged method to save up to $2,000 per year for a child's education — both elementary/secondary education (kindergarten through grade 12) and post-secondary education (college, graduate school, vocational school, etc.) — and may be established for any child under age 18.
When Can I Make Contributions?
Contributions to a Coverdell ESA can be made any time after the birth of a child and may continue until the child's 18th birthday. Contributions will not be accepted after the child reaches his or her 18th birthday, unless the child is a special-needs beneficiary (as defined by Treasury Department regulations).
Is There a Limit to How Many Coverdell ESAs Can Be Established?
There is no limit to the number of Coverdell ESAs that can be established designating a particular child as beneficiary; however, the total aggregate contributions to all accounts on behalf of a beneficiary in any year cannot exceed $2,000.
What Are the Eligibility Requirements for a Coverdell ESA?
You may contribute up to $2,000 annually to a child's Coverdell ESA if your modified adjusted gross income is less than $95,000 as a single tax filer (or married filing separate), or $190,000 as a married couple filing jointly in the tax year in which you contribute. The $2,000 maximum contribution limit is gradually reduced if your modified adjusted gross income exceeds these limits.
Anyone (including the child for whose benefit the account is established) may contribute to the Coverdell ESA, as long as his or her income falls within the income guidelines and the total of all contributions for one beneficiary does not exceed the $2,000 limit.
What Determines How Much I Can Contribute to a Coverdell ESA Each Year?
The annual amount you can contribute to a Coverdell ESA is dependent on your modified adjusted gross income as determined on your federal income tax return. The following table should help you determine whether or not your are eligible to contribute to a Coverdell ESA.
Contributions
| For Tax Year 2013 |
|
||
|---|---|---|---|
| Your Tax Filing Status | Full Contribution | Partial Contribution | Not Eligible |
|
Single/head of household or
married filing separate |
Up to $95,000 | $95,000 - $110,000 | Above $110,000 |
| Married Filing Jointly | Up to $190,000 | $190,000 - $220,000 | Above $220,000 |
LifePath® Funds
What is a LifePath Fund?
LifePath Funds are target-date portfolios that provide a diversified exposure to stocks, bonds, and/or cash for those investors who have a specific date in mind (in this case, years 2020, 2030, 2040, or 2050) for retirement or another goal. The target date is the approximate date when investors plan to start withdrawing assets. The investment objectives of each fund are adjusted over time to become more conservative as the target date approaches. The principal value of the fund(s) is not guaranteed at any time, including at the target date.
How Do LifePath Funds Change Over Time?
If you follow each LifePath Fund over time, the investment mix changes to reflect the changing risk tolerance for each stage of your life. For example, if a person invests in the LifePath 2040 Fund, with the intent of withdrawing from the account starting in 2040, the Fund will gradually be rebalanced to reflect the asset allocation composition similar to Funds with earlier target dates. In 2040, the final asset allocation composition will be the same as the LifePath Retirement Fund.
Who Manages LifePath Funds?
State Farm® Investment Management Corp. is the investment advisor to the State Farm LifePath Funds. Each State Farm LifePath Fund invests all of its assets in a separate mutual fund called a LifePath Master Portfolio that has a substantially identical investment objective as the corresponding State Farm LifePath Fund. The LifePath Master Portfolios are managed by a team of investment professionals at BlackRock Fund Advisors. This dedicated team of professionals has the skill, experience, and focus to address the daily investment challenges of managing an investment portfolio.
State Farm VP Management Corp. (SFVPMC) is the distributor of the State Farm LifePath Funds. BlackRock Fund Advisors (BFA) is the investment advisor to the LifePath Master Portfolios. Neither SFIMC or SFVPMC, or their affiliates, are affiliated with BFA or its affiliates.
Can I Get Out of the LifePath Funds at Any Time?
Yes, you can move in and out of the LifePath Funds at any time. The number on each fund represents the approximate target year when you are planning to begin withdrawing your money.
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Risk Disclosures
Investing involves risk, including potential for loss.
Target-date portfolios have investment objectives that are adjusted over time to be more conservative as the target date (date the investor plans to start withdrawing their funds) approaches. The principal value of the fund(s) is not guaranteed at any time, including at the target date.
Diversification does not assure a profit or protect against loss.
An investment in the Fund is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Although the Fund seeks to preserve the value of your investment at $1.00 per share, it is possible to lose money by investing in the Fund.
Mutual Funds and State Farm College Savings Plan (529) Disclosures
Before investing, consider the investment objectives, risks, fees and expenses of the funds. Contact State Farm VP Management Corp (800-447-4930) for a mutual fund prospectus, summary prospectus, or The State Farm College Savings Plan Enrollment Handbook and Participating Agreement containing this and other information. Read it carefully.
General
Automatic investment plans do not assure a profit or protect against loss.
Neither State Farm nor its agents provide investment, tax, or legal advice.
It is not possible to invest directly in an index.
State Farm VP Management Corp. is a separate entity from those State Farm entities which provide banking and insurance products.
As of June 2, 2010, additional fees may apply to certain accounts with balances less than $5000.
Each State Farm LifePath Fund invests all of its assets in a corresponding LifePath Master Portfolio under a master/feeder structure. BlackRock Fund Advisors ("BFA") is the investment advisor to the LifePath Master Portfolio. State Farm Investment Management Corp. (SFIMC) is the investment advisor to the State Farm LifePath Funds. State Farm VP Management Corp. (SFVPMC) is the distributor of the State Farm LifePath Funds. Neither SFIMC nor SFVPMC are affiliated with BFA or its affiliates.
BlackRock Investors Services (BIS) provides marketing support to the LifePath Master Portfolios. BFA and BIS are wholly owned subsidiaries of BlackRock Institutional Trust Company, N.A. ("BTC"). Neither BTC nor its affiliates are affiliated with SFIMC or SFVPMC. BTC is located at 400 Howard Street, San Francisco, CA 94105.
BlackRock Fund Advisors ("BFA") is the investment sub-advisor to the S&P 500® Index Fund.
Ascensus provides recordkeeping and administrative services for retail 401(k) retirement plans offered by State Farm Investment Management Corp.
Net Asset Value (NAV) is calculated by adding all of the assets of a Fund, subtracting the Fund's liabilities, then dividing by the number of outstanding shares.
An investor should consider, before investing, whether the investor's or designated beneficiary's home state offers any state tax or other benefits that are only available for investments in such state's qualified tuition program.
Earnings must be used to pay for qualified higher education expenses to be federally tax free. The earnings portion of a non-qualified withdrawal will be subject to ordinary income tax at the recipient's marginal rate and subject to a 10% penalty. State Farm does not provide tax advice. Please consult your tax advisor for specific information about your tax situation, including any state tax consequences of an investment. The availability of such tax or other benefits may be conditioned on meeting certain requirements.
A $70,000 gift is viewed as an accelerated gift over five years. Any other gifts to the same beneficiary by the contributor in that tax year or in any of the succeeding four years may result in a federal gift-tax liability. If the contributor dies within the five-year period, a prorated portion of the contribution may be included in his or her taxable estate.
Contributions can be made until the value or total amount of contributions across all Nebraska program accounts for the beneficiary reaches $360,000. Accounts in excess of this limit can continue to grow through investment earnings realized by the plan, but no additional contributions can be accepted above that limit. This limit is set by the Nebraska State Treasurer and is subject to change.
The plan is intended to operate as a qualified tuition program, pursuant to section 529 of the U.S. Internal Revenue Code.
Participation in the plan does not guarantee that contributions and the investment earnings, if any, will be adequate to cover future tuition and other higher education expenses, or that a beneficiary will be admitted to or permitted to continue to attend an eligible educational institution.
This material is not an offer to sell or a solicitation of an offer to buy any securities. Any offer to sell shares within the plan may only be made by the Enrollment Handbook and Participation Agreement relating to the plan.
Neither the State of Nebraska, the Trust, the Nebraska State Treasurer, the Nebraska Investment Council, First National Bank of Omaha, Oppenheimer nor State Farm, nor any of their respective affiliates, directors, officers or agents shall have any debt or obligation to any contributor, any beneficiary or any other person as a result of the establishment of the plan, nor will these entities assume any risk or liability for mutual funds in which the plan invests.
The State Farm College Savings Plan is subject to enrollment, maintenance, administrative and management fees and expenses.
Investors in the plan do not hold shares of the underlying funds directly, but rather shares in a portfolio of the plan.
The State Farm College Savings Plan (the "plan") is sponsored by the State of Nebraska and administered by the Nebraska State Treasurer. The plan is established in cooperation with State Farm VP Management Corp. ("State Farm"), the State of Nebraska, and OFI Private Investments Inc. (OFIPI), a subsidiary of OppenheimerFunds, Inc, pursuant to which State Farm offers classes of shares in a series of accounts within the Nebraska Educational Savings Plan Trust (the "Trust" and plan issuer) that are distributed by OppenheimerFunds Distributor, Inc. (OFDI and together with OFIPI, "Oppenheimer"). The Trust offers other accounts that are not affiliated with the plan.
The Nebraska State Treasurer serves as trustee of the plan; OFIPI serves as the investment manager, with the oversight of the Nebraska Investment Council; and servicing agent: OFDI serves as the distributor: First National Bank of Omaha serves as the program manager.
The State Farm College Savings Plan is not insured or guaranteed by State Farm, Oppenheimer, First National Bank of Omaha, the Trust, the State of Nebraska, the Nebraska State Treasurer, the Nebraska Investment Council, any of their respective affiliates, directors, officers or agents or any other entity.
Indices
The Russell 2000® Index tracks the common stock performance of the 2,000 smallest U.S. companies in the Russell 3000 Index.
The Russell 2500 Index measures the performance of the 2,500 smallest securities in the Russell 3000 Index.
The Russell 1000 Index is a market-capitalization weighted index that tracks the largest 1,000 companies in the Russell 3000 Index.
The Russell Midcap Index measures the performance of the mid-cap segment of the U.S. equity market and is a subset of the Russell 1000 Index.
The Dow Jones Industrial Average is an unmanaged average of 30 actively traded stocks.
The NASDAQ Composite is an unmanaged market capitalization weighted index that is designed to represent the performance of the National Market System.
The S&P 500® Index tracks the common stock performance of 500 large U.S. companies.
The Barclays 1-5 Year U.S. Treasury Index measures the performance of short-term U.S. Treasury Securities maturing within one to five years.
The Barclays U.S. Aggregate Bond Index represents debt securities in the U.S. investment grade fixed rate taxable bond market.
The Barclays Municipal Bond Index is an unmanaged index representative of the tax-exempt bond market.
The Barclays High-Yield Bond Index covers the U.S. dollar-denominated, non-investment grade, fixed-rate, taxable corporate bond market.
The Barclays U.S. TIPS Index is an unmanaged index composed of inflation protected securities issued by the U.S. Treasury.
The Citigroup 3-Month Treasury Bill Index is an unmanaged index of three-month Treasury bills.
The FTSE EPRA/NAREIT Developed Real Estate ex-U.S. Index is designed to measure the stock performance of companies engaged in specific real estate activities of the real estate markets outside of the United States.
The FTSE EPRA/NAREIT Developed Real Estate Index is designed to measure the stock performance of companies engaged in specific real estate activities of the North American, European, and Asian real estate markets.
The Morgan Stanley Capital International Europe, Australasia and Far East Free (EAFE® Free) Index currently measures the performance of stock markets of Europe, Australia, New Zealand, and the Far East.
The MSCI All Country World Index (ACWI) is a free float-adjusted market capitalization weighted index that is designed to measure the equity market performance of developed and emerging markets.
The MSCI All Country World Index (ex-U.S.) (MSCI ACWI ex-U.S. Index) is a free float-adjusted market capitalization index that is designed to measure equity market performance in global developed and emerging markets, excluding the United States.
The MSCI Emerging Markets Index is a float-adjusted market capitalization index designed to measure equity market performance in global emerging markets.
The Credit Suisse High Yield Index is designed to mirror the investible universe of the U.S. dollar-denominated high yield debt market.
The New York Stock Exchange is considered the largest equities-based exchange in the world based on total market capitalization of its listed securities.
The Nikkei 225 Index is a price-weighted index comprised of Japan's top 225 blue-chip companies on the Tokyo Stock Exchange.
The Blended Benchmark for the Equity and Bond Fund is a combination of 60% of the S&P 500 Index and 40% of the Barclays U.S. Aggregate Bond Index, rebalanced monthly.
The Blended Benchmark for the LifePath Funds is a combination of the holdings in the Barclays U.S. Aggregate Bond Index, Russell 1000 Index, Russell 2000 Index, MSCI ACWI ex-U.S. IMI Index, Dow Jones-UBS Commodity Index, FTSE EPRA/NAREIT Developed Real Estate Index and Barclays U.S. TIPS Index. The weightings of the indices are adjusted quarterly to reflect the funds' changing asset allocations over time.
Customized Portfolio Performance Benchmarks
The benchmarks for the Portfolios represent customized composites of market indices for the available Underlying Investments weighted by the relative target asset allocation for such Portfolio.
Oppenheimer Capital Appreciation Fund Benchmark: The Russell 1000® Growth Index
The Russell 1000® Growth Index measures the performance of the large-cap growth segment of the U.S. equity universe. It includes those Russell 1000 companies with higher price-to-book ratios and higher forecasted growth values.
Oppenheimer Value Fund Benchmark: The Russell 1000® Value Index
The Russell 1000® Value Index measures the performance of the large-cap value segment of the U.S. equity universe. It includes those Russell 1000 companies with lower price-to-book ratios and lower expected growth values.
Oppenheimer Main Street Small- & Mid-Cap Fund® Benchmark: The Russell 2500® Index
The Russell 2500® Index measures the performance of the small- to mid-cap segment of the U.S. equity universe, commonly referred to as "smid" cap. The Russell 2500 is a subset of the Russell 3000 Index. It includes approximately 2,500 of the smallest securities based on a combination of their market cap and current index membership.
Oppenheimer International Growth Fund Benchmark: The MSCI AC World ex-U.S. Index
The MSCI AC World ex-U.S. Index is designed to measure the equity market performance of developed and emerging markets and excludes the U.S.
Oppenheimer Developing Markets Fund Benchmark: The MSCI Emerging Markets Index
The MSCI Emerging Markets Index is designed to measure equity market performance of emerging markets.
State Farm Bond Fund and Oppenheimer Global Strategic Income Fund Benchmark: The Barclay's US Aggregate Bond Index
The Barclays U.S. Aggregate Bond Index is an index of U.S. dollar denominated, investment-grade U.S. corporate government and mortgage-backed securities.
Federated US Government Securities Fund 1-3 yrs Benchmark: The Merrill Lynch U.S. Treasuries 1-3 Year Index
The Merrill Lynch 1-3 Year U.S. Treasury & Agency Index is a subset of The Bank of America Merrill Lynch U.S. Treasury & Agency Index, an unmanaged fixed income index that includes U.S. Treasury fixed income securities (direct sovereign debt of the U.S. Government) in the maturity range equal to one year and less than three years.
Oppenheimer Institutional Money Market Fund Benchmark: iMoney Net First Tier Institutional Index
The iMoneyNet First Tier Institutional Index (Also known as the MFR First Tier Institutional Index) is a subset of the Money Fund Reports (MFR) All-Taxable universe consisting of funds managed to a "first-tier" standard and which are offered to institutions only. Portfolio Holdings of first-tier funds include U.S. Treasury, U.S. Other, Repos, Time Deposits, Domestic Bank Obligations, Foreign Bank Obligations, First Tier CP, Floating Rate Notes, and AssetBacked Commercial Paper. The Money Fund Report AveragesTM are published by iMoneyNet, Inc. (formerly IBC Financial Data), and reflect yields net of fees and expenses.
Investors cannot directly invest either in individual benchmark indices or combinations thereof.
Trademarks
iShares, LifePath and LifePath followed by 2020, 2030, 2040 and 2050 are all registered trademarks of BlackRock Institutional Trust Company, N.A.
"S&P 500®" is a trademark of The McGraw-Hill Companies, Inc. and has been licensed for use by the State Farm Mutual Fund Trust. The State Farm S&P 500 Index Fund (the "Fund") is not sponsored, endorsed, sold or promoted by Standard & Poor's, and Standard & Poor's makes no representation regarding the advisability of investing in the Fund.
Russell Investment Group ("Russell") is the source and owner of the trademarks, service marks and copyrights related to the Russell 2000 Index. Russell® is a trademark of Russell. The State Farm Small Cap Index Fund (the "Fund") is not sponsored, endorsed, sold or promoted by, nor in any way affiliated with Russell. Russell is not responsible for and has not reviewed the Fund nor any associated literature or publications and Russell makes no representation or warranty, express or implied, as to their accuracy, or completeness, or otherwise.
The EAFE® Free Index is a trademark, service mark and the exclusive property of Morgan Stanley Capital International, Inc. ("MSCI") and its affiliates and has been licensed for use by the State Farm Mutual Fund Trust (the "Trust"). The State Farm International Index Fund (the "Fund"), based on the EAFE® Free Index, has not been passed on by MSCI as to its legality or suitability, and is not issued, sponsored, endorsed, sold or promoted by MSCI. MSCI makes no warranties and bears no liability with respect to the Fund. MSCI has no responsibility for and does not participate in the management of the Fund assets or sale of the Fund shares. The Trust's Statement of Additional Information contains a more detailed description of the limited relationship MSCI has with the Trust and the Fund.
Non-US Residents
Each of the investment products and services referred to on the State Farm Mutual Funds web site is intended to be made available to customers or prospective customers residing in the United States. The customer's U.S. permanent residence address must be a street address. This web site shall not be considered a solicitation or offering for any investment product or service to any person in any jurisdiction where such solicitation or offer would be unlawful.
Business Continuity Plan
State Farm VP Management Corp. has developed a Business Continuity Plan on how we will respond to events that significantly disrupt our business. Since the timing and impact of disasters and disruptions is unpredictable, we will have to be flexible in responding to actual events as they occur. With that in mind, download this information on our business continuity plan [PDF-19.5KB].
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