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Q3 2020 Plan Performance

By Jim Matheu, Retirement Services Manager

The word to describe this year would have to be “resilient.” It is fitting as applied to our country, our economy, and our stock market.

At the start of 2020, the stock market and the Vista 401(k) Plan were at or near record highs, and unemployment reached lows not seen in decades. Simply put, things were going well, and America was prospering. I think we all know where the story goes from there. The Coronavirus, at first not much more than a story of interest, exploded in March 2020. Businesses were closed. Many employees were asked to work from home, and others lost their jobs. Schools were shut down, and sports seasons at all levels were cancelled. As the cases and fatalities rose, people were told to stay home, and if they did venture out, they must wear masks. It was like nothing we have ever seen. Our economy sputtered and stalled, and our stock market experienced a decline that wiped out years of gains. The predictions were dire with many experts telling us we were headed for a great depression and unemployment above 20%. They informed us that it would be years before we recouped our loses in the stock market. That appeared to be the case in March and April.

In short order, however, something remarkable happened—the month of May brought about whispers of our resilience, and by August, those voices and the stock market were roaring. The stock market was strong in June and July and very strong in August. September did see an overall decline, but the Nasdaq and the S&P 500 are at or near record highs, and the Dow is moving in that direction.

As of this writing, October has started on a positive note, financially. Most retirement plan losses have been erased not in years, but months, and the September unemployment rate dropped to 7.9%. The Vista 401(k) Plan has shared in this resiliency, reaching its highest level ever in mid-October. Now, people are talking recovery not depression, and consumer confidence continues its upward trend.

As previously mentioned, September was a down month, as it tends to be, but the quarter was solid overall. Only three of the 28 Vista 401(k) funds were down year-to-date, through September 30, 2020. They are the Fidelity International Index Fund (-6.6%), the Vanguard Small Cap Index Fund (-6.3%), and the JPMorgan Equity Income Fund (-8.1%). It should be noted that these funds have performed well over their lifetimes and compare favorably to their competition.

The American Fund Target Date Funds continue to impress. They are solid performers with strong returns that continue to beat their benchmarks. Another strong performer year-to-date is the T.Rowe Price Blue Chip Growth Fund, which is a large cap fund. It has solid fundamentals and its year-to-date return is 24.3%. However, this Blue-Chip Growth Fund is not just a short-term performer—it has a 5-year return of 19.8%.

A mid-cap fund that has caught our eye is the Fidelity Growth Strategies Fund with a year-to-date return of 12.6% and a 5-year return of 13.3%. It has posted solid returns at the 1-year and 3-year marks as well.

The Vista 401(k) Plan offers three bond funds that have been solid performers. They are the American Century Government Bond Fund, an intermediate government bond fund, the American Century Inflation-Adjusted Bond Fund, an inflation-protected fund, and the Fidelity Advisor Total Bond Fund, an intermediate term fund. All three of these funds are strong options.

I have pointed out several strong performers above, but most of the twenty-eight Vista 401(k) Plan funds exceeded their benchmarks. Those that did not exceed their benchmarks ran parallel with their benchmarks, while only a few closely lagged their benchmarks.

Please note that the Vista 401(k) Plan started the year 2020 at $256 million in total assets. On October 12, 2020, the Plan reached its high-water mark of $276 million in total assets. This stock market, our economy, and our people have been tested, and we have proven ourselves to be RESILIENT!

To conclude, we encourage you to review your account to make sure that you are appropriately invested, and in the words of Michael Sheridan, do not forget to diversify, diversify, diversify!

September 2020 Fund Performance Chart

Annual Maintenance: Your Vista 401(k) Account

By Jim Matheu, Retirement Services Manager

We often remind you to invest in your Vista 401(k) account early in your career, never disrupt the flow of contributions, and do not withdraw funds until retirement. However, that does not mean that you can ignore your plan and expect things to run smoothly over its lifetime. Like your car or yourself, periodic maintenance of your Vista 401(k) account is essential to ensure that everything is running as expected. If there are issues, maintenance allows you to make the necessary adjustments so that you are properly prepared for retirement. On an annual basis, you should review the following maintenance items:

ARE YOU PROPERLY INVESTED?

To this point, 2020 has been a very challenging year. I cannot address its impact on the economy and financial markets until I take a moment to address the loss of life. In America over 200,000 people lost their lives because of COVID-19, and worldwide that number exceeds 1 million. It is a terrible tragedy, and our thoughts and prayers go out to everyone who lost loved ones.

Of secondary note, this disease has damaged our economy and impacted the stock market. Experts believed it would be years before investors recovered from this precipitous decline. Thankfully, that has not been the case. Markets rebounded in a matter of months and account values were, for the most part, restored.

We can and should use this financial and market volatility as a wake-up call. Many participants may not have looked at their fund allocation in some time. Participants who were nearing retirement may have been enrolled in investments that were riskier than they realized. The reason is they likely selected many of these investments years ago when they were younger and had a higher risk tolerance. By not reviewing their portfolio routinely, they placed their retirement assets in jeopardy. To avoid this in the future, participants should review their fund selections annually.

We have an excellent tool on the Vista 401(k) Website to aid participants in their annual fund review—it is called the Investment Risk Profile. The Risk Profile tool asks a series of questions, and based on your answers, reflects your likely risk tolerance. It will then present investments that best reflect that risk tolerance level. This review should be completed annually to be certain that your investment risk profile and actual investments are aligned.

CONSOLIDATE YOUR RETIREMENT ACCOUNTS

If your current job is not your only stop along your career path, you likely have other retirement plans with other organizations. This can become confusing as the years pass. You may lose track of prior accounts or find that they are not in sync with your current investment goals or risk tolerance.

Streamline your retirement strategy by consolidating your other retirement accounts into your Vista 401(k) account. The Vista 401(k) Plan is a low-cost option with a strong mutual fund lineup into which you can roll other 401(k), 403(b), 457, IRAs, and even DROP money. Housed under one roof, your retirement assets can be more effectively managed.

UPDATE YOUR HOME AND E-MAIL ADDRESS

This may fall under the umbrella of a housekeeping item, but it is, nonetheless, very important. Review your account to make sure your home address and e-mail address are up to date. We send a significant amount of educational material via e-mail throughout the year, including this newsletter. We also send updates about changes in laws and rules that impact your plan. Although we primarily communicate through e-mail, a significant amount of information is delivered by traditional mail as well. One very important item transmitted via U.S. mail is your quarterly statement. If you fail to update your e-mail and home address, this important information may never find you.

UPDATE YOUR BENEFICIARY DESIGNATION

Life changes over time. People get married, divorced, have children, adopt children. All these events could impact your Vista 401(k) Plan. You want to make sure your loved ones are cared for should something unforeseen happen. Keep your beneficiaries current and avoid any issues in the event of your death. These are not things your loved ones want to argue over while they are grieving their loss. The appropriate form can be found here: https://www.vista401k.com/401k-plan/forms/. It is called the Designation of Beneficiary Instructions and Form. Please use this form to make any necessary changes and call us at 866-325-1278 if you have any questions.

START OR INCREASE YOUR INVESTMENT

It is always the right time to start or increase your contribution to your Vista 401(k) account! You can open an account by contributing as little as $25 per pay period. If you already have a Vista 401(k) account, consider increasing your contribution. Once you are invested, it is important that you maintain your account. This can be accomplished with a yearly review of your portfolio utilizing tools like the aforementioned Investment Risk Profile.

If you have questions or wish to discuss any of these or other topics in greater detail, please call the Retirement Services Department at 866-325-1278 or e-mail us at 401k@vista401k.com.

“Nuts and Bolts”: How to Enroll in the Vista 401(k) Plan

By Jim Matheu, Retirement Services Manager

This newsletter routinely provides information geared toward why you should open a Vista 401(k) account or why you should increase your contribution to your Vista 401(k) account. The Retirement Services Department has decided to include a quarterly article that addresses basic but important aspects of the Vista 401(k) Plan—called “Nuts and Bolts.” Today’s installment will explore how to open a Vista 401(k) account.

Three Ways to Open a Vista 401(k) Account:

1. Vista 401(k) Website

Visit Vista 401(k) website, vista401k.com. Two different routes (select your preference):

a. Click "Open Account” and enroll online, OR

b. Download and Submit an Enrollment Form from the website menu, select “401(k) plan” and “forms”

  • Print and complete the Vista 401(k) Enrollment form
  • Fax or mail the completed and signed form to the Retirement Services Department.
  • Our fax number is (850) 425-8345 and our mailing address is FBMC Benefits Management P.O. Box 1878, Tallahassee, FL 32302-1878

2. Email

Scroll to the bottom of any of our e-mailed educational or marketing materials. There you will find an abbreviated, fillable Vista 401(k) application. E-mail us the completed form, at 401k@vista401k.com, and we will open your account.

3. Telephone

Call the Retirement Services Department at 1-866-325-1278 and ask us to e-mail or mail you an application. Once received follow the steps detailed under 1(b) above.

Congratulations! You have now opened your very own Vista 401(k) Account!

As always, if you have any questions please contact the Retirement Services Department at 1-866-325-1278.

Want to Take Your RMD in 2020? Tell Us!

By Robert Pumphrey, Retirement Services Specialist

2020 Required Minimum Distributions are Optional – Your Input Required

In response to the CARES Act, the Vista 401(k) Plan will not process any 2020 Required Minimum Distributions unless directed to do so by the eligible participant—you!

Call us by November 15, 2020 if you want to receive your 2020 RMD.

Call Now: 1-866-325-1278

As a reminder, the CARES Act allows any individual with an RMD due in 2020 to skip this year’s distribution. This includes anyone who turned age 70 ½ in 2019 and was prepared to take their initial RMD by April 1, 2020. If you skip this year’s RMD, you do not have to take an additional distribution next year—you simply waive this year’s distribution.

ADDITIONAL CARES ACT RESOURCES

For more information regarding the CARES Act and RMDs, refer to our 2nd quarter 2020 newsletter articles entitled:

NOTE FROM THE AUTHOR

On a personal note, this November, I, Robert Pumphrey, will be 65 years young, and I have decided to retire from my position in the Retirement Services Department at FBMC Benefits Management, Inc. For the last seven years, it has been an interesting opportunity for me to get to know so many of the participants of the Vista 401(k) Plan. It has been a rewarding experience to learn and grow with FBMC and a pleasure to interact and share that knowledge.

During my time in the Retirement Services Department, the stock market and your Vista 401(k) Plan have, for the most part, experienced a high degree of success. The market has certainly experienced more peaks than valleys over that time. However, when confronted with valleys, the market along with the Vista 401(k) Plan have always shown an incredible ability to rebound. Most recently, the Coronavirus nearly derailed the market and the economy. Although both experienced pain in March through May, they have picked up steam since. Indeed, the Nasdaq and the S&P 500 attained record highs on several occasions, and both currently sit at or near those highs. Meanwhile, the Vista 401(k) Plan reached a record high of $276 million in assets on October 12, 2020!

As I transition to a new beginning from employee to retiree, I wish everyone the best of health and continued financial success.

Saving for Retirement during a Pandemic

By Toni Milton, Sr. Retirement Plan Specialist

SAVINGS

Saving for retirement during a pandemic differs depending on the individual. A pandemic like the one we have experienced with COVID-19 may have completely altered your financial strategies and goals. As if it wasn’t already challenging enough to save for retirement, the pandemic has put a halt on saving for some. Contributing to your employer-sponsored retirement plan will always be a good idea, but during the pandemic money might be a little tight. It is perfectly okay to contribute the minimum amount to your 401(k) account until you feel more financially stable. If you do not have a 401(k) account, the minimum contribution amount is only $25 per pay period. Now might be a good time to enroll. Building retirement savings can be beneficial and get you on track for your long-term goals.

EMERGENCY FUNDS

If you did not have an emergency fund in place before the pandemic, you probably wish you did. The pandemic clearly caught all of us off guard, with many losing some or all income sources while also facing additional medical expenses. A good strategy to ensure you have available money at your disposal is to establish an emergency fund. An emergency fund is created for those unexpected expenses or loss of income. Aim to add enough money to cover three to six months of your living expenses. These funds are crucial in these uncertain times.

In addition to creating an emergency fund, consider opening a Summer Savings account. An example of this type of account is offered by the South Florida Educational Federal Credit Union, which serves Miami-Dade County Public Schools. This a great, no-fee alternative for those who are used to tapping into their Vista 401(k) accounts to get them through the summer months. The Summer Savings account is designed for 10-month school board employees who do not get paid during the summer. They can start regular bi-weekly deposits into an account at any time during the year.

COVID-19 RELATED WITHDRAWALS

The COVID-19 pandemic may have impacted you particularly hard—not just reducing your income (and ability to save) but also imposing additional financial costs. Pursuant to the CARES Act, the Vista 401(k) Plan permits eligible participants to take Coronavirus-related distributions (CRD). While this is an option, it’s wise to not withdraw from your 401(k) account unless necessary. Indeed, the rule was established to address true emergencies. Further, while the 10% penalty is waived, a CRD is still an early withdrawal subject to taxation and will require you to save more in the future to replenish your retirement. Speak with one of our 401(k) representatives and discuss your options before taking a withdrawal from your account.

DELAY RETIREMENT

If the current pandemic has cut into your retirement savings and made it difficult for you to continue contributions, think about retiring a little later than you originally planned. Working a while longer will allow you to resume contributions to your account and save more for when you finally do decide to retire. Remember, your 401(k) account is not just a savings account—it is invested and allows you the opportunity for potential growth.