BMO Adds Retirement Class Shares to Mutual Funds

BMO Global Asset Management is now offering retirement share classes for four BMO Funds.

The new R6 and R3 share classes will be available through defined contribution plans. These additional share classes provide clients, including plan sponsors, retirement plan platforms and the advisers that serve them, with greater flexibility with respect to pricing structures and include a lower cost option that meets the growing demand for transparency.

“BMO Global Asset Management and our recordkeeper, BMO Retirement Services, have long advocated for increased transparency of fees and expenses and worked to help our clients meet their fiduciary responsibilities,” says Phil Enochs, head of Relationship Management, BMO Global Asset Management, based in Chicago. “Adding these share classes to several of our most attractive BMO Funds will allow us to do just that.”

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The BMO Funds now offered with the new retirement share classes include the BMO Mid-Cap Growth Fund, BMO Mid-Cap Value Fund, BMO Pyrford International Fund and BMO Small-Cap Value Fund.

The BMO family of funds also added A class shares to 26 existing funds to enhance further pricing flexibility for clients. These funds include BMO Dividend Income, Global Low Volatility Equity, Global Natural Resources, Intermediate Tax-Free, Large-Cap Growth, Large-Cap Value, Lloyd George Emerging Markets Equity, Low Volatility Equity, Micro-Cap, Mid-Cap Growth, Mid-Cap Value, Monegy High Yield Bond, Mortgage Income, Multi-Asset Income, Pyrford Global Equity, Pyrford Global Strategic Return, Pyrford International Stock, Short Term Tax-Free, Short-Term Income, Small-Cap Core, Small-Cap Value, BMO TCH Core Plus Bond, TCH Corporate Income, TCH Emerging Markets Bond, TCH Intermediate Income and Ultra Short Tax-Free Funds.

BMO Global Asset Management also offers six new open-end mutual funds. The funds are the result of the conversion of the BMO Managed Asset Allocation Program risk-based collective investment trusts into traditional mutual funds, effective May 30.

Along the lines of the BMO family of 10 target-date funds, the newly re-characterized risk-based asset allocations funds are designed to streamline the decision process with a comprehensive approach to investing. The new funds are available in the share classes of Class Y, Class I, Class R-3 and Class R-6, and include:

  • BMO Diversified Income Fund;
  • BMO Moderate Balanced Fund;
  • BMO Growth Balanced Fund;
  • BMO Aggressive Allocation Fund;
  • BMO Diversified Stock Fund; and
  • BMO Aggressive Stock Funds.

For more information about BMO Global Asset Management, visit http://www.bmogamus.com.

For more information about BMO Funds, visit http://www.bmofundsus.com.

Information on the investment objectives, risks, charges and expenses of the BMO Funds can be obtained by calling 800-580-3863 and requesting a prospectus.

BMO Global Asset Management is the brand name for various affiliated entities of BMO Financial Group that provide investment management, retirement, and trust and custody services. BMO Financial Group is a service mark of Bank of Montreal (BMO).

DOL Again Seeks Comments on TDFs

Target-date funds (TDFs) are again put in the Department of Labor (DOL) spotlight for comments. Widely held in retirement accounts, TDFs may not be fully understood by investors.

 

The Employee Benefits Security Administration (EBSA), a DOL division, is reopening the period for public comment on proposed regulatory amendments on disclosures for target date or similar investments, originally proposed in 2010. The proposal contained an asset-allocation glide path illustration requirement. (See “EBSA Unveils Target-Date Disclosure Proposal.”)  

The proposal includes more specific disclosure requirements for target date or similar funds (TDFs), based on evidence that plan participants and beneficiaries would benefit from more information about these investments.

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Specifically, the DOL outlined the need for an explanation of the TDF’s asset allocation, how the asset allocation will change over time (the glide path of the TDF), and the point in time when the TDF will reach its most conservative asset allocation. A chart, table, or other graphical representation that illustrates such change in asset allocation were among the suggestions for additional support. The proposal would also require information about the relevance of the TDF’s “target date;” any assumptions about participants’ and beneficiaries’ contribution and withdrawal intentions following the target date; and a statement that TDFs do not guarantee adequate retirement income and that participants and beneficiaries may lose money by investing in them, which can include losses in or near retirement.

In 2013, the Securities and Exchange Commission’s Investor Advisory Committee recommended that the Commission develop a glide path illustration for target date funds based on a standardized measure of fund risk as a replacement for, or supplement to, an asset-allocation glide path illustration. (See “SEC Reconsiders TDF Glide Path Illustrations.”)

Comments identified by RIN 1210–AB38 can be submitted online, or by email (e-ORI@dol.gov) or in writing (Office of Regulations and Interpretations, Employee Benefits Security Administration, Room N–5655, U.S. Department of Labor, 200 Constitution Avenue NW, Washington, DC 20210, Attention: RIN 1210–AB38; Target Date Disclosure).

The comment period reopens June 3 and runs through July 3. 

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