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Q2 2021 Plan Performance

By Constantine Mulligan, Director of Investments, Cerity Partners LLC

Vista 401(k) Plan Fund Performance

Over the long-term (10 years), all investments in the plan have performed in line with expectations. The majority of the funds in the plan have provided returns that fall in the top half of their respective peer groups, and none of the funds’ returns have fallen into the bottom quartile of their respective peer groups.

In the short-term (1 year) several of the funds with a “growth bias” (i.e., funds that invest in companies that are forecasted to grow quickly) underperformed their respective peers. This is partially attributable to rising interest rates, which can have an adverse effect on higher growth-oriented equities.

We continue to monitor the short-term performance of these funds, and we maintain confidence in the long-term prospects of all funds in the plan.

For our clients who wish to take a deeper dive, we have provided the following economic and market commentary. This will provide an explanation of the overall macro and micro economic factors influencing the markets and, in turn, your Vista 401(k) account. If you have any questions or wish to discuss these matters in greater detail, please contact us at 866-325-1278 or e-mail us at 401k@vista401k.com.

Q2 2021 Economic and Market Recap

High vaccination rates, broad economic reopenings, and the subsequent release of pent-up demand led to economic growth in the quarter that will be close to 10% when ultimately reported at the end of July. Historic fiscal and monetary stimulus combined to offset any negative impact of supply chain and labor shortages. Businesses, who became even more confident of ongoing economic expansion, increased spending on capital projects, particularly the spend on productivity enhancing technology investments. Consumer spending was boosted by strong jobs gains, increased wages in many industries, and very high savings rates coming into the quarter.

Overseas economies have largely experienced a slower, more delayed recovery as relatively low vaccination rates allowed the second and third COVID-19 waves to spread more widely and lethally. Renewed shutdowns and delayed reopenings caused double dip recessions in Europe, Japan, and Latin America with growth turning positive in these regions only near the end of the quarter. China was an exception as their recovery preceded that of the other developed market economies with the country now clearly in expansion moving into the second half of the year.

Financial markets produced strong returns around most of the globe. Continued loose monetary policy and another round of fiscal stimulus together helped drive equity prices higher in the U.S. The shift down and flattening of the treasury yield curve produced positive performance in the investment grade fixed income market.

The threat of excessive monetary and fiscal stimulus ultimately unleashing an inflationary cycle has climbed to the top of the list of market risks now that the severity of the pandemic appears to be largely under control. A pickup in the April and May inflation indicators was expected as 2021 prices are compared to those at the depths of last year’s recession. But the magnitude of price increases exceeded expectations as powerful reopening demand was met by the remnants of pandemic induced supply constraints in both product manufacturing and labor.

Labor shortages are another inflation pain point as potential employers are increasingly citing their biggest limitation being the inability to attract qualified job applicants. Mitigating factors such as the end of enhanced unemployment benefits, fewer childcare issues as children return to the classroom, and dissipating virus concerns could relieve some of the pressure. There may, however, be more permanent labor supply issues due to limited immigration, earlier baby boomer retirements, and labor skills mismatches. Any sustained wage pressure caused by these shortages could manifest itself in higher inflation and/or lower profit margins unless employee productivity increases as well.

The market, and more importantly the Federal Reserve, so far views the recent increase in the inflation rate as transitory, or a temporary phenomenon that should not necessarily lead to a more immediate tightening of monetary policy. Messaging coming from the Fed governors has been somewhat mixed and is leading to concern over another taper tantrum as the bond market reacts negatively to the first signs of monetary tightening.

The Fed and other global central banks appear to be heeding lessons learned over the last 20 years that inherent disinflationary forces in the global economy should change the approach to monetary policymaking (which had previously dominated since the last inflationary cycle in the 1970s). Central banks appear to be taking a more reactive than proactive approach to burgeoning inflation rates as they are more confident in their ability to eradicate systemic inflation as opposed to their effectiveness in a more nefarious deflationary environment. This monetary policy approach has allowed more inflation in asset prices as opposed to the prices of most goods and services.

What this Means for Investors

Strong economic growth and accommodative central banks create a favorable environment for risk assets (i.e., equities) relative to less risky assets (i.e., bonds). However, despite the low interest rate environment, bonds continue to provide a ballast to a portfolio, and as always a diversified portfolio designed to meet one’s specific time horizon and risk profile (i.e., a target date or balanced fund) continues to be an all-weather solution.

June 2021 Fund Performance Chart

“Nuts and Bolts”: Consolidate Retirement Plans

By Jim Matheu, Retirement Services Manager

If you have worked for one organization your entire career this does not apply. However, if you are like the majority of people and have worked for several different organizations, you have likely accumulated several retirement plans along the way. To properly monitor these plans and make certain each plan meets your objectives, you may want to consider consolidating all retirement assets into your Vista 401(k) Plan.

This can be accomplished by visiting our website at vista401k.com. Once there, simply select “401(k) Plan” and choose “Forms”. Here you will find the “Vista 401(k) Rollover Request Form.” Complete this form and follow the directions for submission.

As noted on the Rollover Request Form referenced above, the following qualified plans can be rolled into your Vista 401(k) Plan:

  • 401(k)
  • 401(a)
  • 403(b)
  • Traditional IRAs
  • 457
  • Pension Plans

If you do not have a Vista 401(k) account, you will first need to complete a Vista 401(k) enrollment form or enroll online at www.vista401k.com.

If you have any questions, please contact the Retirement Services Department at (866) 325-1278 or via email at 401k@vista401k.com.

This Way to Retirement

By Jim Matheu, Retirement Services Manager

SIGN UP TODAY

In our years of helping people plan for retirement, we have never met an investor who lamented the fact that they started funding their retirement plan too early. Too often, the opposite scenario presents itself and our clients are forced to either work longer than they wish or reduce their standard of living. Fear not, it is never too late to start saving for retirement, and the Vista 401(k) Plan is here to help.

OPENING AN ACCOUNT

Opening a Vista 401(k) account is a simple process: Go to Vista401k.com and open an account online. Another option is to visit the website, select 401(k) Plan, then Forms, and download the Vista 401(k) Enrollment Form. Fax the completed form to (850) 425-8345 or mail it to: FBMC Benefits Management, P.O. Box 1878 Tallahassee, Florida 32302-1878

If you have any questions or prefer the personal touch, contact our Retirement Services Department at (866) 325-1278 and someone will walk you through the process.

CHOOSING YOUR CONTRIBUTION AND INVESTMENTS

The Vista 401(k) offers you the flexibility to determine how much you wish to contribute to your Plan per paycheck, and you have the flexibility to increase or decrease your contribution throughout the year.

Once you have determined how much you wish to contribute, it is time to choose your investment(s). The Vista 401(k) Plan offers 28 mutual funds for you to choose. The investments offer you the flexibility to move from fund to fund throughout the year as well. These funds are from well-known fund families and offer options that appeal to conservative investors, aggressive investors, and everyone in between.

The Vista 401(k) Plan also offers a series of Target Date Funds which are designed to be appropriate for an average investor who is similar to you in age. The Target Date Funds utilize what is called a “glide path,” which automatically adjusts your account to become more conservative as you approach retirement age.

If you need assistance selecting funds, please call our Retirement Services Department at (866) 325-1278 to set up a one-on-one meeting with a registered investment advisor at Cerity Partners, LLP, a Registered Investment Advisory Firm. This financial coach will help you understand your Vista 401(k) investment options, answer your questions, and help you to make sound decisions about your retirement account. This service is provided at no additional charge to the participant.

REMAIN STEADY

Like many things in life, consistency is important in creating a successful retirement plan. That is, do not stop contributing to the plan and avoid making premature withdrawals of funds. If you receive a raise, consider increasing your contribution to your Vista 401(k) account. If the market performs poorly, your steady investment every pay period will allow you to purchase more shares of your selected funds at a discounted price. When the market recovers, you will reap the reward of having purchased those funds at a lesser value.

Note: Each contribution is made on a pretax basis. This serves to reduce your taxable income, which results in a lower tax burden.

MONITOR YOUR INVESTMENTS

It is important that your portfolio reflect your risk tolerance. Each participant approaches risk differently. For most investors, the younger you are, the more aggressive you may want to invest because you have time on your side. Historically, the market has outperformed more conservative investments over long periods of time. As you accumulate more assets in your plan and are approaching retirement, most investors become more conservative as they have less time to make up for short term market corrections. Additionally, they have larger nest eggs which are more affected by day-to-day market volatility. Unfortunately, too often participants invest aggressively and fail to revisit their portfolio over the years. That is why you must periodically revisit your investment choices and ensure they accurately reflect your risk tolerance.

As discussed earlier, you may want to consider investing in a Target Date which will tailor your risk to that of an average investor based on your age and make adjustments over time to manage your risk.

Invest today. Select and monitor your investment choices over the years. Remain steady and do not stop investing or withdraw from your Vista 401(k) account until retirement. If you follow this straightforward approach to investing, come retirement you will reap the rewards of your diligence!

Remember, Vista 401(k) is focused, flexible and here for you. Please feel free to contact our Retirement Services Department at (866) 325-1278 for any help.

Are Your Affairs in Order?

By Ronald Vargas, Retirement Plan Specialist

Update Your Beneficiaries

Most people name their beneficiaries when they enroll in a product or open an account. Often, this is the only time they do so. Participants must remember that beneficiaries may change over the course of one’s lifetime. Failure to make necessary changes will only cause confusion in the event of your passing. If you have not updated your named beneficiaries since your 401(k) enrollment or if your personal circumstances have changed, you may need to revisit your beneficiary designations to ensure they are not out of date.

Prepare For The Worst

Updating beneficiaries is probably one of the nicest parting gifts one can leave behind. Should you pass away unexpectedly, your grief-stricken family members will, undoubtedly, find it overwhelming to deal with your death and the process of finalizing your affairs. If your affairs are not in order, it is time to fix that. You do not want to leave this to your loved ones and have your account possibly wind up in probate court – a process that can take time and leave your hard-earned savings in limbo.

Verify Today

If the above sounds like too much to put your loved ones through, now is the time to verify or update your beneficiaries. A standard rule is, if you do not remember who your beneficiaries are, it is time to review this aspect of your account. You can update your beneficiaries on our Web site at www.vista401k.com. Once you are logged in, select the beneficiary tab to access and update this information. All beneficiary elections require the beneficiary’s Social Security number and that the beneficiary designations equal 100 percent. Remember, in the state of Florida, if you wish to designate someone other than your spouse as a primary beneficiary, there is a waiver that must be signed by your spouse granting approval.

We strongly encourage you to check your beneficiaries across all your monetary accounts and create a list to keep in a safe place. This information should be reviewed at least every five years.

¿Están tus asuntos en orden?

Actualice A Sus Beneficiarios

Lamentablemente, la mayoría de las personas solo completan su lista de beneficiarios cuando se inscriben en un producto o abren una cuenta, si es que lo hacen. Si no ha actualizado su lista de bene fi ciarios desde su inscripción al 401 (k), existe la posibilidad de que sus designaciones de beneficiarios estén desactualizadas. Ahora es el momento de actualizarlos antes de que termine el verano.

Preparate Para Lo Peor

Actualizar a los beneficiarios es probablemente uno de los mejores obsequios de despedida que uno puede dejar. Si usted falleciera inesperadamente, los miembros de su familia afligidos sin duda encontrarán abrumador lidiar con su muerte y el proceso de finalizar sus asuntos. Si sus asuntos no están en orden, es posible que tengan que rastrear información y posiblemente ir a la corte testamentaria, un proceso que puede llevar meses o incluso años para arreglar sus bienes y obtener los beneficios para sus herederos/benefactores.

Verificar Hoy

Si lo anterior parece demasiado para sus seres queridos, ahora es el momento de verificar o actualizar a sus beneficiarios. Una regla estándar es que si no recuerda quiénes son sus beneficiarios, lo mejor es actualizarlos. Puede actualizar a sus beneficiarios en nuestra página de web www.vista401k.com. Una vez que haya iniciado sesión, haga clic en el botón de beneficiarios para acceder y actualizar esta información. Todas las elecciones de beneficiarios requieren el número de Seguro Social del beneficiario y todas las designaciones deben ser iguales al 100 por ciento. Recuerde que en el estado de Florida, si desea designar a alguien que no sea su cónyuge como beneficiario principal, el cónyuge debe firmar la renuncia.

Le recomendamos encarecidamente que consulte a sus beneficiarios en todas sus cuentas monetarias y cree una lista para guardarla en un lugar seguro (no olvide decirle a alguien dónde se encuentra). Esta información debe revisarse al menos cada cinco años.

¡Hablo Espanol!

Retirement Shortfall Recovery

By Toni Milton, Sr. Retirement Plan Specialist

Retirement Concerns

It is a challenging time to contemplate retirement. Many of us have been fortunate enough to not have to touch our retirement funds during the pandemic and were rewarded by a roaring stock market. However, others were not in the same position. Perhaps you experienced a decrease in hours or were placed on leave. It may be that your career was not impacted in any way, but your spouse lost their job. Over the course of the pandemic, many families had to deal with a variety of unexpected expenses, causing some families to withdraw money from their 401(k) account, reduce the amount they were saving, or stop contributing altogether. The pandemic caused a financial strain on many families who are still dealing with those ramifications.

Getting Back On Track

Steady, uninterrupted contributions to your retirement account is an essential part of planning for retirement. However, sometimes life gets in the way of our plans. During this pandemic, you may have been forced to withdraw money from your account. It may have been necessary to meet basic needs. However, as we move toward recovery, getting back on financial track is essential to reaching your financial goals.

Maximize Your Contributions

Increasing contributions to your 401(k) account is an excellent way to make up for the short fall the pandemic may has caused. The Vista 401(k) Plan allows you to contribute a maximum amount of $19,500 for any participants under the age of 50 and $26,000 for participants age 50 and older. Steady increases in retirement savings will greatly benefit our retirement plans, and the Vista 401(k) offers you the flexibility to make changes throughout the year.

Analyze your spending and determine whether additional funds can be contributed to your retirement account. For example, you may purchase gourmet coffee daily, or perhaps you go out to lunch and dinner every day. To recoup lost funds during the pandemic, you may consider fewer trips to Starbucks or eating at home more often. Redirecting the savings to your 401(k) account is the perfect way to make up for that shortfall and enhance your retirement future.

Tailor Your Investments to Meet Your Needs

Increasing your 401(k) contribution is beneficial, but you should ensure your investment strategy meets your current retirement needs. We have partnered with Cerity Partners, an independent Registered Investment Advisory firm, to provide you 1-on-1 investment advice. They will analyze your retirement portfolio and make investment recommendations based on your unique set of circumstances. Your increased contributions with an appropriately designed investment strategy should expedite your financial recovery and put you in a better position to retire when that time comes. Remember, Vista 401(k) is focused, flexible and here for you. Please feel free contact our Retirement Services Department at (866) 325-1278 for any help.

Helpful Links

The articles and opinions in this newsletter are those of FBMC Benefits Management, Inc. The articles and opinions are for general information only and are not intended to provide specific advice or recommendations for any individual. Nothing in this publication shall be construed as providing investment counseling or directing employees to participate in any investment program in any way. Please consult your financial professional for further assistance with regard to your individual situation.This material is intended to provide general financial education and is not written or intended as tax or legal advice and may not be relied upon for purposes of avoiding any Federal tax penalties. Individuals are encouraged to seek advice from their own tax or legal counsel. Individuals involved in the estate planning process should work with an estate planning team, including their own personal legal or tax counsel.