The Boston 401(k) king's capture of Amazon's recordkeeping account from rival Vanguard may be proof of concept of 'client experience' at a budget price.
Brooke's Note: Amazon.com is hiring nearly 500 employees a day and plans to do that into the foreseeable future. Those employees include some of the best, brightest and best paid, in addition to Whole Foods checkout people and warehouse managers. Fidelity now has the existing $5.7 billion in its recordkeeping and that unbelievable built-in growth of 2,000 new participants a week as it grows with Amazon. So often, financial firms are grappling to win a chunk of shrinking pies. Companies like Amazon are a big growing ones, and Fidelity is capitalizing on the opportunity through investment and innovation. The bad news is that winning recordkeeping means...you win recordkeeping in the brave new world, with no managed assets thrown in to pay for it all through kickbacks and other fun. The good news is that a firm like Amazon is more interested in having good service than scraping every penny -- though we don't know what kind of deal Amazon scored with Fidelity. Yet, this account win appears to be Fidelity competing at its big and effective best in a 401(k) business where it often gets called "king." It's a royal designation outmoded now that the kingdom is run by its queen, Abby Johnson.
Fidelity Investments wrested control of the dazzling Amazon.com 401(k) account from its big Malvern, Pa.-based rival -- but to Vanguard goes some very precious spoils.
Indeed, the Amazon-Fidelity-Vanguard deal is forcing a symbiosis driven by Amazon's power to create a judicious unbundling.
It serves as a proxy for what is happening more broadly in the 401(k) business -- increasingly divided between Vanguard, the 401(k) asset king, and Fidelity, the 401(k) recordkeeping king.
The Boston-based 401(k) giant won the recordkeeping account of the Seattle-based e-commerce giant, but in an unbundled world it is unclear what revenues Fidelity gets in the deal.
"Recordkeeping is the least profitable part of a 401(k) account," says Jason Roberts, CEO of Pension Resources Institute.
One source close to the Amazon-and-Fidelity deal says the assets of Amazon 401(k) participants are still invested in Vanguard mutual funds -- assuring that the manager continues to rake in fees, perhaps as long as the accounts are held by participants.
Though neither Vanguard nor Fidelity confirmed the change, Amazon revealed the switch on behalf of its 750,000 full and part-time workers to Pensions & Investments in November.
The Amazon deal was confirmed in the Seattle-based firm's 8-K filings. Amazon's $5.7 billion in 401(k) assets go live with Fidelity next week, following a transitional blackout period that began on Jan. 2.
Fidelity can take a victory lap, says David Blanchett, head of retirement research for Morningstar’s Investment Management group, via email.
"I think it’s still a big win," he says.
"While the funds aren’t necessarily going to change, this is going to give Fidelity an important touch point with participant, and they are likely going to be able to leverage these individual participant relationships to capture participant monies who end up rolling out of the Vanguard plan who might then end up investing in Fidelity funds."
Just how big a financial coup this is for Fidelity and its CEO Abby Johnson is hard to measure. It gains considerable bragging rights and it also gains a toehold in trying to wrangle assets away from Vanguard, Roberts says.
"Fidelity has a lever. It can discount recordkeeping fees based upon the level of Fidelity-owned funds in the plan. That happens all the time."
Roberts adds that the 'X factor' is whether Fidelity can command a substantial "infrastructure fee" from Amazon in exchange for supplying a better experience to its employees. "Can Fidelity charge that? Sure they can. They have the right (despite lawsuits trying to challenge that Fidelity assertion.)"
What sources agree on is that Fidelity's Amazon win validates its efforts to reinvent "recordkeeping" as a place of advice, education and digital interaction. It bundles all three under the broad umbrella of "financial wellness."
Known to RIAs is the hundreds of millions of dollars Fidelity invested to buy, revamp and infuse eMoney's financial planning software into its institutional systems. See: eMoney makes its first big enterprise sale as a Fidelity sub-unit by showing a few features and much salesmanship
Service vs price
For Amazon, it comes down to value provided by the service experience -- not necessarily getting it all at the cheapest price, the online retailer says.
"We continuously evaluate our benefit offerings to ensure the best possible experience for our employees," says an Amazon spokesperson, via email.
For Amazon broadly, the improvement of employee "experience" is a mission-critical strategic imperative as it undertakes to convert multiple industries from bricks-and-mortar to its website.
To execute that historic shift, Amazon is a on hiring binge unprecedented in commercial history at a time when the unemployment rate hovers at cyclical lows.
Its staff has expanded six-fold since 2013 to 647,000 (as of May) and it adds an average of a staggering 337 workers every day, Fast Company magazine says. The company now lists 750,000 workers.
It also operates in an environment where Facebook, Microsoft, Apple, Netflix and Google -- vie for the same A-level engineering talent.
(Observers speculate that financial advice may be on the Amazon to-do list of industry takeovers; notably its feelers toward investments to date have been in collaboration with Fidelity.)
Not that Vanguard put up much fight on the recordkeeping side of the equation, says an executive at one 401(k) vendor, speaking anonymously, via email.
"I wouldn’t be surprised to hear Vanguard refused to be flexible with its investment offering and administrative [processes]," the source states.
"It’s a known weakness for them, and they’re typically unapologetic."
Overall, Vanguard won't suffer from losing Amazon's business, says Alec Lucas, a Vanguard observer and senior analyst for manager research at Morningstar.
"[It's] not of major consequence to the firm overall."
"Vanguard is the largest DC plan asset manager in the U.S. at $1.4 trillion in assets," said spokesman Freddy Martino via email. "More than 5 million participants [use] its DC recordkeeping business."
But Fidelity is far-and-away the DC recordkeeping leader with $1.9 trillion, followed by TIAA , $605 billion, and Empower $540 billion, according to the 2019 PlanSponsor RecordKeeping Survey.
Fidelity's recordkeeping business has also been on a five-year growth tear, with net inflows of approximately 11% year-over-year, since 2014, when its record-kept assets stood at $1.19 trillion.
When it comes to recordkeeping for 401(k) assets only, Fidelity $1.6 trillion lead margin is even wider, followed by Empower. $400 billion, Alight Solutions $375 billion and Vanguard $374 billion, according to Plan Sponsor.
Vanguard is also only the sixth largest recordkeeping business in terms of defined contribution participants. Fidelity dominates; its 22.2 million participants gives it a nearly three-fold lead on second placed Empower with 8.6 million.
But Vanguard is still well-advised not to take cold comfort in holding assets based largely on its history of lower fees.
"Vanguard was once the low-fee leader in terms of mutual fund expense ratios, [but] everyone has low-cost products now. Differentiation comes from the other aspects," says Mike Alfred, the founder and former CEO of 401(k) data tracker, BrightScope. He now has a Denver, Colo. research firm aimed at crypto-currency.
Indeed, Fidelity has big upside despite Vanguard's elephantine presence in the relationship.
"Affording employees with a user experience that might encourage more interaction with their retirement plan accounts certainly has value." says Ari Sonneberg, an attorney and chief marketing officer at the Boston-based Wagner Law Group, via email.
"If you can combine that with some cost savings, even if marginal, then there is an even more compelling argument for making such a change," he adds.
"This is why companies like Fidelity are investing in the user-experience aspect of their products."
Fidelity also may have an ace in the hole that allows it to operate at lower margins in the 401(k) arena -- namely it makes up for it by how effective it is in getting those assets to migrate to its retail offering.
"[They're] rumored to capture around 40% of the participant rollovers, due to brand, product stickiness, etc.; their competitors are 10- to 20-points worse," says Alfred.
"This fundamental economic advantage means they can price plans at a loss knowing they'll make it up in the IRA business," he explains.
Fidelity seems more than willing to compete on price under CEO Abby Johnson, who has slashed fees on mutual funds and equities trading. See: One big casualty of Fidelity Investments' buckle on zero-fee commissions may be the zero-fee RIA custody tailwind of three decades duration
"The challenge in beating Vanguard is they have a structural advantage, because US open-end mutual funds own the firm, so the cost basis is much lower, [which] makes Vanguard very difficult to match," Lucas says.
"They continue to dominate, even with pretty significant competitive threats." See: Vanguard re-applies itself to active fixed-income funds.
Vanguard's edge is with its unique ability to reap high margins by pumping participant portfolios full of its proprietary products.
Fidelity is also pitching that it is morphing upmarket from being an investment manager to being a financial advisor. It's introducing a measure of light financial planning that it couches in the hard-to-define category of "financial wellness." Generally wellness is considered the life alpha derived from the planning process.
As of Aug. 2019, Fidelity introduced a simple planning tool to its services for plan participants. This provides a means to cross-sell plan participants savings and investment products beyond any retirement-linked services.
Fidelity is also currently in negotiations with several corporate clients about a 'total well-being' program for 401(k) plan participants, whereby investments could, in future, be tied to issues ranging from an employee’s mental health, to the trickiness of their commute, with a mooted 2020 launch.
It’s hard to say what will win new business, but what you offer beyond pricing and returns can make the difference, says Sonneberg.
"There is no objective gauge for measuring how some of these bells and whistles might be better than others, [but] most decision makers are end-users themselves and can bring their own appreciation [for whether they’re] in the best interest of plan participants."
Fidelity's success in wooing Amazon's 401(k) plan may also have been helped by its long-standing relationship with the company.
In 2006, Fidelity trialled a marketing agreement with Amazon that included sponsorship of a financial services "store" that provided Amazon customers with access to information about the full range of Fidelity's investment products.
Then in early 2019, Fidelity quietly partnered with Amazon’s software development platform, Sumerian, to test and develop virtual reality financial services software. See: Fidelity Investments takes another leap into the future, enlisting Amazon to turn advisors into virtual reality avatars, but some say it's pie-in-the-sky.
Certainly Fidelity's is widening its lead as the 401(k) recordkeeper of choice with three of the five FAANG firms ad Microsoft.
Effective, Jan. 12, the Boston-based investment giant's plan administration business will serve the 401(k) accounts of Facebook, Netflix, Amazon and Microsoft.
Vanguard still administers Google's $11.4 billion in 401(k) assets, and Denver-based Empower Retirement services Apple's $7.4 billion account. See: Empower wins Apple's $3.5-billion 401(k) account from Schwab
Fidelity remains tied for second for FAANG 401(k) assets, given the addition of the $1.29 billion Facebook plan, and the $366 million Netflix plan to the $5.7 billion Amazon plan recently onboarded, totals $7.4 billion -- the value of the Apple account.
While the value of FAANG 401(k) plans is likely to continue to grow, they remain dwarfed in scale by more legacy defined benefit plans.
For instance, the Federal Thrift Retirement Plan holds $579 billion, AT&T Corp. plan is valued at $65.5 billion, and Boeing at $64 billion, according to Pensions and Investments Data. There are now more than 100 million US DC accounts, with assets in excess of $7.5 trillion.
Bottom line the 401(k) kingship is now bifurcated, says Blanchett.
"Fidelity is the clear market leader in terms of recordkeeping and Vanguard is the market leader in terms of assets under management."
Amazon may be the clear winner in getting the best of both worlds for its employees.
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Getting The Most From Your Amazon Benefits
Amazon provides generous company benefits which can help employees build wealth, manage risk, and secure their future. It’s important to consider how to best integrate the additional compensation, retirement, and health benefits into your financial plan.
Your grants of Amazon restricted stock units (RSUs) can help you increase cash flow or meet long-term goals, such as saving for college or retirement. However you choose to use the proceeds, you will need to pay income taxes as your shares vest. Amazon will withhold 22% of the value of your shares before they post to your account with your selected broker (either Morgan Stanley or Fidelity). As your compensation increases, you may find yourself in a higher tax bracket, requiring greater withholding. If your income is growing, or if your vested share amount is increasing, see if you need to make estimated tax payments to avoid underpayment penalties.
Vesting schedules vary, but are often over a four-year period and may be weighted more heavily to the last half of the vesting period. If you are subject to trading windows, a 10b5-1 trading plan can automatically sell shares upon vest, simplifying the process and ensuring you comply with insider trading guidelines. Note that any unvested Amazon RSUs are terminated and forfeited upon voluntary or involuntary termination of your employment for any reason (including as a result of death or disability).
Your 401(k) plan allows you to choose either pre-tax contributions, which are taxed at withdrawal, or Roth contributions, which are funded with after-tax dollars and then withdrawn tax-free. You can also contribute an additional 10% of your salary each year to the after-tax 401(k) and then convert that amount to a Roth inside the 401(k) plan with little to no tax impact where it will grow tax-free.
Each option offers financial benefits that impact your current and expected future tax situation in different ways. The Roth option reduces your taxes at withdrawal, while the traditional 401(k) reduces your current taxable income. In general, if you expect your tax rate to be higher in retirement, it may be best to choose the Roth now, or fund both types of 401(k) plans to provide tax diversification. Whichever plan (or combination) that you choose, we recommend that you make the maximum annual contribution of $19,500.
Amazon matches up to 4% of your eligible pay at the rate of 50%. Think of this as a 2% annual raise. (Based on typical salaries and other eligible compensation, most Amazon employees can receive an annual match of about $3,200). Employer matching contributions become 100% vested after three years of service. Employees over age 50 can also make annual catch-up contributions to their retirement accounts (up to $6,500 of additional contributions). If you are a highly-compensated employee, your contributions to the plan may be limited.
The Amazon 401(k) plan is administered by Fidelity, which provides a selection of investments with low fees, as well as self-directed investment options. The default investment is the Vanguard Target Retirement Fund nearest the year you would reach age 65. You may want to select a different target date fund depending on your goals and risk tolerance.
You may choose from five comprehensive plans, including a Shared Deductible Plan, Standard Plan, Health Savings Account (HSA), HMO, and In-Network Only Plan. These options include a variety of deductibles, out-of-pocket maximum costs, and prescription costs. The HSA has the highest deductible, but it features a medical savings account, which you can fund with pre-tax income plus contributions from Amazon. For 2021 you can contribute up to $3,600 for yourself and $7,200 for a family. The annual limit is inclusive of the employer contribution made on your behalf, which is currently $500 for employee-only health coverage, $1,000 for employee plus spouse/domestic partner or employee plus children, and $1,500 for an employee plus spouse/domestic partner with children. HSA funds grow tax-free, and withdrawals to pay for qualified expenses are also tax-free. The money is yours to keep, even if you leave Amazon. Given their unique tax treatment, and the option to invest contributions, HSAs can also be used to supplement your retirement savings.
Flexible Spending Account (FSA)
An FSA allows you to save for health and dependent care costs using pre-tax income. If you do not have an HSA, you may contribute up to $2,750 per year to a general-purpose Health Care FSA in 2021. You may also contribute up to $5,000 a year to a Dependent Care FSA (subject to income limitations), which can be used for certain childcare expenses or to care for senior citizens who live with you and are claimed as a dependent on your federal tax return. Unlike an HSA, FSA funds must be spent by March 31st for the Dependent Care FSA or May 31st for the Healthcare FSA following the calendar year in which you contributed to the plan to avoid forfeiting any of the savings. You may submit claims for reimbursement until June 30th. An FSA is best used for large pre-planned medical or dental expenses, such as orthodontics.
Amazon offers a life insurance benefit of twice an employee’s annual base salary at no cost up to $500k. Another $500k of AD&D coverage applies for death or injuries resulting from a covered accident. Employees may purchase additional coverage for up to 10 times their salary, with a maximum of $2 million. Premiums are age-based. Typically, health exams are not required for basic coverage, but the insurance company may require an exam for higher benefit levels. The policy is not portable, so you might consider buying separate life insurance if you think you may leave the company. Additional coverage is available for purchase for spouses (up to $250k) and children (up to $20k).
Amazon provides coverage for 60% of an employee’s salary (up to certain limits) in the event of a disability. Short-term benefits have a seven-day waiting period and cover the first 26 weeks. After this, long-term benefits begin.
Disability insurance paid under this plan are considered taxable income to the employee. Benefits may be paid up until age 65 (possibly longer if the disability occurs after age 60). Note that the disability plan covers salary, but not RSUs and bonus payments. Employees might consider purchasing a supplemental disability policy to cover a higher percentage of their income.
Reviewing Your Amazon Benefits
As you can see, Amazon provides a wide range of financial benefits, including some which require careful consideration. If you have questions about which options are right for you, or how they best fit with your tax and financial planning, your Paracle advisor can help.
Paracle Personal Financial Management is an independent financial planning firm founded in 2004 with an honest desire to help people optimize their finances by providing unbiased financial planning and investment advice that puts their clients first. Paracle specializes in delivering expert, comprehensive wealth management services to busy families. Their expertise integrates financial planning with investment management to ensure their clients experience confidence in every aspect of their plan so they can focus on what matters most. To learn more about Paracle, connect with them on LinkedIn.
DISCLAIMER: THIS ARTICLE HAS BEEN PROVIDED FOR INFORMATIONAL PURPOSES ONLY AND SHOULD NOT BE CONSIDERED AS INVESTMENT ADVICE OR AS A RECOMMENDATION. THIS MATERIAL PROVIDES GENERAL INFORMATION ONLY. PARACLE ADVISORS DOES NOT OFFER LEGAL OR TAX ADVICE. ONLY PRIVATE LEGAL COUNSEL MAY RECOMMEND THE APPLICATION OF THIS GENERAL INFORMATION TO ANY PARTICULAR SITUATION OR PREPARE AN INSTRUMENT CHOSEN TO IMPLEMENT THE DESIGN DISCUSSED HEREIN. CIRCULAR 230 NOTICE: TO ENSURE COMPLIANCE WITH REQUIREMENTS IMPOSED BY THE IRS, THIS NOTICE IS TO INFORM YOU THAT ANY TAX ADVICE INCLUDED IN THIS COMMUNICATION, INCLUDING ANY ATTACHMENTS, IS NOT INTENDED OR WRITTEN TO BE USED, AND CANNOT BE USED, FOR THE PURPOSE OF AVOIDING ANY FEDERAL TAX PENALTY OR PROMOTING, MARKETING, OR RECOMMENDING TO ANOTHER PARTY ANY TRANSACTION OR MATTER.
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Filed Under: Company Benefits, Financial PlanningSours: https://paracle.com/2021/02/getting-amazon-benefits/
The Best Fidelity Funds for 401(k) Retirement Savers
Fidelity is all about good stock picking. The firm's culture centers on it, and it's why so many Fidelity funds remain popular among retirement savers.
It stems from the company's early days, when firm founder Ned Johnson would tell his fund managers, "Here's your rope. Go ahead and hang yourself with it." It gave Fidelity's portfolio managers and analysts the freedom to choose good stocks, whatever their approach. And it worked. The firm is home to some of the industry's best fund managers ever, past and present, including Peter Lynch and Will Danoff, as well as some of the most popular funds in 401(k) plans across the country.
In this year's survey of popular 401(k) funds, which comes courtesy of financial data firm BrightScope, 17 funds from Fidelity rank among the top 100. Four are index funds: Fidelity 500 Index (FXAIX), Extended Market Index (FSMAX), International Index (FSPSX) and US Bond Index (FXNAX). But the remaining 13, seven of which are from the firm's Freedom target-date series, are actively managed.
Read on as we look at some of the best Fidelity funds for your 401(k) plan (and weed out some of the lesser options). We'll review all of the actively managed funds, including Fidelity's target-date series, and rate them Buy, Sell or Hold.
Returns and data are as of Oct. 20, unless otherwise noted, and are gathered for the share class with the lowest required minimum initial investment – typically the investor share class or A share class. The share class available in your 401(k) plan may be different.
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Fidelity Balanced: BUY
- Symbol: FBALX
- Expense ratio: 0.52%
- One-year return: 20.0%
- Three-year annualized return: 11.0%
- Five-year annualized return: 10.9%
- 10-year annualized return: 10.3%
- Rank among the top 401(k) funds: #50
- Best for: Moderate investors who want a stock-bond combination fund and are willing to put up with some volatility
Compared with its peers, Fidelity Balanced is an excellent choice for investors looking for a one-stop fund that holds stocks and bonds. Over the past five and 10 years, Balanced fund's annualized returns outpace at least 95% of all other so-called balanced funds, which hold roughly 60% of assets in stocks and 40% in bonds.
But investors should be prepared for some added volatility. FBALX is more stock-heavy than its typical peer. At last report, Balanced had 67% of its assets in equities; the typical balanced fund, on the other hand, held an average of 58% of assets in stocks. That adds to the fund's volatility. Over the past five and 10 years, Fidelity Balanced has had above-average volatility compared with its peers, according to Morningstar.
FBALX has an unconventional setup. Robert Stansky is its lead manager, and he makes the big-picture decisions of how much to put in stocks and how much to put in bonds. He also oversees the fund's eight stock pickers, who are essentially sector specialists, and four bond pickers. The bond side holds mostly investment-grade bonds and some high-yield corporate debt.
Learn more about FBALX at the Fidelity provider site.
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Fidelity Blue Chip Growth: BUY
- Symbol: FBGRX
- Expense ratio: 0.79%
- One-year return: 60.9%
- Three-year annualized return: 26.5%
- Five-year annualized return: 22.4%
- 10-year annualized return: 19.1%
- Rank among the top 401(k) funds: #65
- Best for: Aggressively minded investors with long-term time horizons
Fidelity is chock full of good funds that invest in growing companies, and Fidelity Blue Chip Growth is one of its best. Manager Sonu Kalra has run the fund since mid-2009. Over the past 10 years, FBGRX beats 95% of its peers – funds that invest in large, growing companies – with a 19.1% annualized return. It beats the 13.4% annualized gain in the S&P 500, too.
Kalra focuses on companies with above-average earnings growth potential that the market doesn't recognize. In particular, he looks for events that might kick the business into a higher gear, such as a new product launch, a change in executives at the top or a turnaround strategy.
The fund's 60.9% gain over the past 12 months is a chart-topping return. Tesla (TSLA), which has soared 721% over that period, was a top contributor by a wide margin thanks to record sales in China and four consecutive profitable quarters.
The fund is peppered, too, with newly issued stocks that have done well of late. Shares in Peloton Interactive (PTON), which went public in September 2019, climbed 461% over the past 12 months. CrowdStrike Holdings (CRWD), a cybersecurity tech company stock that launched in June 2019, has climbed 203% over the past year.
Learn more about FBGRX at the Fidelity provider site.
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Fidelity Contrafund: BUY
- Symbol: FCNTX
- Expense ratio: 0.85%
- One-year return: 37.0%
- Three-year annualized return: 18.1%
- Five-year annualized return: 17.2%
- 10-year annualized return: 15.5%
- Rank among the top 401(k) funds: #5
- Best for: Moderate investors looking for a tamer growth fund
Fidelity Contrafund has been a solid performer for so long that it seems many people don't pay attention anymore. But manager Will Danoff still delivers market-beating returns. Over the past 12 months, the fund's 37.0% return trounces the 17.5% gain in the S&P 500.
Tech and communications services stocks helped fuel the fund's rise, particularly software and services companies such as Adobe (ADBE), Shopify (SHOP), PayPal (PYPL) and Salesforce.com (CRM). Amazon.com (AMZN), FCNTX's top holding, helped, too.
Danoff, who has managed Contrafund for more than 30 years, has been successful in part because he's adapted his approach as his fund has aged and grown. (Contrafund, with $131 billion in assets, is one of the biggest actively managed stock funds in the country.)
In the mid-1990s, for instance, 700 stocks filled the fund. Today, it holds roughly 330.
But Danoff's investment methodology is the same as it was in the fund's early days: He focuses on "best-of-breed" firms with superior earnings growth, proven management teams and sustainable competitive advantages that seem overly beaten down or overlooked. In the first half of 2020, he purchased shares in asset manager BlackRock (BLK) at $420 a share, for only 13 times his estimates for earnings in 2021.
Learn more about FCNTX at the Fidelity provider site.
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Fidelity Diversified International: HOLD
- Symbol: FDIVX
- Expense ratio: 0.75%
- One-year return: 17.3%
- Three-year annualized return: 6.9%
- Five-year annualized return: 7.7%
- 10-year annualized return: 7.0%
- Rank among the top 401(k) funds: #56
- Best for: Foreign stock exposure
Investors have given foreign-stock funds short shrift lately because U.S. stocks have performed so much better in comparison over the past decade. But a well-diversified portfolio should have a stake in international shares.
The issue is finding a good fund.
It might not be Fidelity Diversified International. We want to be gung-ho about this mutual fund, in part because it is the only actively managed Fidelity foreign-stock fund among the top 100 401(k) funds. William Bower, who has run FDIVX since 2001, has decades of experience. He searches for companies in developed countries that have strong balance sheets, a high return on capital (a measure of profitability) and improving earnings-growth potential.
The problem is next to its peers, Diversified International is just average. It has outpaced funds that invest in growing large foreign companies in only five of the past 10 full calendar years beginning in 2010.
That said, this fund beats two major foreign-stock benchmarks. The fund's 7.0% annualized return over the past decade handily outpaces the MSCI EAFE index, as well as the MSCI ACWI ex USA benchmark, over the past 10 years.
All told, we're neutral on Diversified International, which explains the fund's Hold rating. If it's the only actively managed foreign-stock fund available to you in your 401(k) plan, it isn't a horrible choice. But you might consider other actively managed foreign-stock funds if any are available in your retirement-savings plan.
Learn more about FDIVX at the Fidelity provider site.
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Fidelity Growth Company: BUY
- Symbol: FDGRX
- Expense ratio: 0.83%
- One-year return: 70.0%
- Three-year annualized return: 27.5%
- Five-year annualized return: 24.6%
- 10-year annualized return: 20.5%
- Rank among the top 401(k) funds: #25
- Best for: Aggressive investors
Fidelity Growth Company is one of the best stock funds in the country. Unfortunately, it has been closed to new investors since 2006. But if your workplace retirement plan offers it, that restriction doesn't apply to you.
FDGRX's 15-year annualized return, 15.4%, beats all but five U.S. stock funds. It also beats the S&P 500 by an average of nearly 6 percentage points annually over that period.
Short-term returns are impressive, too. Over the past 12 months, the fund's whopping 74.5% gain, lifted in part by stakes in Shopify, Wayfair (W) and Moderna (MRNA), is one of the best returns of all diversified U.S. stock funds.
This is a high-risk, high-reward fund. Steven Wymer has run it for nearly a quarter century, looking for companies with resilient business models that will fuel rapid growth over a three-to five-year period, says Morningstar analyst Robby Greengold. That means in addition to established, giant-size firms, such as Nvidia (NVDA) and Netflix (NFLX), he also owns shares in small companies such as Penumbra (PEN), an $8 billion maker of medical instruments.
Some might find the resulting ride thrilling; others, gut-wrenching. FDGRX has been roughly 20% more volatile than the broad U.S. stock market over the past decade. But the rewards have been sublime. A $10,000 investment in the fund 10 years ago would be worth nearly $56,000 today. A similar investment in an S&P 500-stock index fund would amount to just over $36,000.
Learn more about FDGRX at the Fidelity provider site.
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Fidelity Low-Priced Stock: BUY
- Symbol: FLPSX
- Expense ratio: 0.78%
- One-year return: 5.8%
- Three-year annualized return: 4.3%
- Five-year annualized return: 6.7%
- 10-year annualized return: 10.0%
- Rank among the top 401(k) funds: #60
- Best for: Investors looking for a solid value-oriented fund
Critics say Fidelity Low-Priced Stock isn't what it was 20 years ago, but it's still impressive. Over the past decade, FLPSX's 10.0% annualized return beats 89% of its peers – funds that invest in midsize companies trading at a bargain. What works against it, in part, is that the fund used to be considered a small-company fund, and it still uses the Russell 2000 Index, which tracks small-company shares, as its benchmark.
But the fund has always been focused on companies of all sizes. Manager Joel Tillinghast launched the fund 30 years ago to invest in stocks trading at a discount whether they were small and fast growing, or big and underappreciated. The common link: cheap stocks with a share price below $15.
Today, with a bulging $24 billion in assets, FLPSX's low-price threshold is now $35 a share. And the fund is more international than it was a decades ago. More than 40% of the fund holds foreign stocks, such as Canadian grocer Metro, U.K. property developer Barratt Developments (BTDPY), and Taiwanese electronics contract manufacturer Hon Hai Precision Industry.
Tillinghast, a legend in the business, now manages 95% of the fund's assets. Five co-managers handle the rest. Some focus on specific sectors; others are generalists who invest across the market. Together they still apply Tillinghast's investing philosophy, focusing on companies with solid balance sheets, that are run by good, honest executives, have stable earnings growth and trade at a discount to their view of a fair price. The stocks that suit that approach generally have been out of favor in recent years. But the fund's 5.9% return over the past 12 months beats 95% of its peers.
Learn more about FLPSX at the Fidelity provider site
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Fidelity Puritan: HOLD
- Symbol: FPURX
- Expense ratio: 0.53%
- One-year return: 21.0%
- Three-year annualized return: 11.0%
- Five-year annualized return: 10.8%
- 10-year annualized return: 10.4%
- Rank among the top 401(k) funds: #74
- Best for: Moderate investors who want an all-in-one stock-and-bond fund
Fidelity has two balanced funds on the roster of top 401(k) funds: Fidelity Puritan and the aforementioned Fidelity Balanced. Both funds devote roughly 60% of assets to stocks and 40% to bonds, but the similarities end there.
For starters, Puritan has just one manager: Daniel Kelley, who started in July 2018. (Balanced, as we've mentioned, has specialists on the bond and stock sides of the fund, and a lead manager who makes the big-picture calls.)
Kelley is relatively new at Puritan, which is the main reason we have a Hold rating on the fund. Things look promising so far, though. Since he started in July 2018, the fund has returned 11.9% since he took over, better than the typical balanced fund annualized gain of 6.7%.
FPURX holds 65% of assets in stocks, a bigger equity stake than its peer, which holds 58%. Most of the roughly 200 stocks are in U.S. shares, primarily in tech and health care. Kelley favors a growth-at-a-reasonable price approach, focusing on stocks he thinks are attractive priced relative to their earnings-growth prospects. Microsoft (MSFT), Amazon.com and Apple (AAPL) are the fund's top holdings.
On the bond side, Kelley holds mostly investment-grade corporate bonds – primarily financials and industrials – and securities-backed debt and Treasuries. Those holdings helped the fund in 2020, but a 5% stake in high-yield funds were a modest drag on relative performance.
Learn more about FPURX at the Fidelity provider site
8 of 8
Fidelity Freedom Target-Date Series: BUY
- Rank among the top 401(k) funds: #29 (FFFDX, 2020); #28 (FFTWX, 2025); #23 (FFFEX, 2030); #36 (FFTHX, 2035); #34 (FFFFX, 2040); #54 (FFFGX, 2045); #61 (FFFHX, 2050)
- Best for: Investors who want help with their retirement investment plan
Choose a fund with the year closest to when you plan to retire. Stash all of your retirement savings in the fund and then let the experts do the investing work for you. They'll decide how much to hold in stock, bonds and cash and adjust the portfolio to a more conservative mix as you grow older.
Fidelity's Freedom funds are the firm's flagship target-date series. The fund company has a relatively newer index-based series, called Freedom Index. But the actively managed target-date funds are immensely popular, and many rank among the top half of BrightScope's roster of funds with the most 401(k) assets.
The series was retooled several years ago, including a tweak to the funds in the plan and the allocation of the glidepath – the way the blend of stocks and bonds changes over time. A Freedom fund geared to a 25-year-old saver just starting out would hold a portfolio comprised of 54% U.S. stocks, 36% foreign stocks and 10% bonds. The Freedom portfolio for a 60-year-old holds 36% in U.S. stocks, 23% in foreign shares, 37% in bonds and 4% in cash.
Learn more about Fidelity's Freedom target-date series at the provider site.
*The following benefits apply to Class F (40 hours/week), Class R (30-39 hours/week), and Class H (20-29 hours/week) excluding employees who work in the following states: Connecticut, Illinois, Indiana, Maryland, North Carolina, Pennsylvania, Utah, and Wisconsin. View the benefits overview for employees who work in CT, IL, IN, MD, NC, PA, UT, and WI.
Amazon’s benefits can vary by location, the number of regularly scheduled hours you work, length of employment, and job status such as seasonal or temporary employment.
The following benefits are effective from April 1, 2021 — December 31, 2021.
Plans include coverage for prescription drugs, emergency and hospital care, mental health, X-rays, lab work, etc. There are no pre-existing condition exclusions with any of Amazon’s medical plans. Employees have a choice of multiple plans. All plans cover preventive care 100%.
Shared Deductible Plan
Health Savings Plan
Network options: Aetna or Premera Blue Cross
Coinsurance: 90% covered in network
Comes with a company-funded Health Reimbursement Account that automatically covers the first 50% of your deductible.
Depending on who you cover, Amazon contributes the following amount toward your HRA:
Out-of-Pocket Maximum (Medical and Prescription):
After you've paid your deductible
Network options: Aetna or Premera Blue Cross
Coinsurance: 90% covered in network
Comes with a company-funded Health Savings Account (HSA) that you can also contribute to and save for health care expenses.
Depending on who you cover, Amazon contributes the following amount toward your HSA:
Out-of-Pocket Maximum (Medical and Prescription):
Prescription Drug (Retail):
After you've paid your deductible:
Network options: Aetna or Premera Blue Cross
Out-of-Pocket Maximum (Medical):
90-day Mail Order:
Out-of-Pocket Maximum (Prescription Drug):
Network options: Premera Blue Cross only
Out-of-Pocket Maximum (Medical):
Copays after deductible is met:
Copays for 30-day Retail:
Copays for 90-day Mail Order:
Out-of-Pocket Maximum (Prescription Drug):
|Kaiser Permanente HMO (CA, CO, HI, MD, VA, WA, Washington DC)|
Out-of-Pocket Maximum (Medical):
Prescription Drug (Retail):
After you've paid your deductible:
Dental (Delta Dental of Washington)
|Basic Dental Plan||Enhanced Dental Plan|
Plan Year Maximum: $1,500
Plan Year Maximum: $2,000
Vision (Vision Service Plan)
|Basic Vision Plan||Enhanced Vision Plan|
Plan pays 100% for an eye exam at an in-network provider once every calendar year.
Materials Copayment: $10
Lenses: Covered 100% in-network
Frames or Contacts (contacts are in lieu of glasses): 1 pair every calendar year up to $130 allowance in-network
Contact lens fitting and evaluation exam covered in full once every calendar year, after a maximum %60 copayment in-network only.
Plan pays 100% for an eye exam at an in-network provider once every calendar year.
Materials Copayment: $10
Lenses: Covered 100% in-network
Frames or Contacts: 2 pairs every calendar year up to $130 allowance for each pair in-network
Contact lens fitting and evaluation exam covered in full once every calendar year, after a maximum $60 copyament in-network only.
Amazon partners with Progyny, the leading infertility benefits provider, to provide our employees with infertility treatment coveage. When enrolled in one of Amazon's medical plans, employees have access to Progyny's premier infertility treatment specialists and receive personalized support from a patient care advocate. Ask your recruiter if you'd like more information about this program.
Amazon 401(k) Plan
For every $1 of employee contribution you make (up to 4% of your eligible pay), Amazon will contribute $0.50 to your account in the form of matching contributions. You can get up to a 2% match. Note: Catch-up contributions are not matched.
You become vested in matching contributions after you are credited with three years of vesting services. A year of vesting service is defined as a calendar year in which you complete 1,000 hours of service.
You can contribute from 1% to 90% of your eligible pay on a pre-tax basis, a Roth after-tax basis, or both, subject up to the annual IRS limits. For calendar year 2021, the IRS limit is $19,500 (If you turn 50 or older in 2021, you may contribute an additional $6,500 in catch-up contributions in 2021).
- All Amazon employees age 18 or older are eligible to join the plan immediately upon their date of hire. To learn more about the Amazon 401(k) Plan, watch a video here.
Employee Restricted Stock Units
At Amazon, most employees have the ability to become owners of the company through the granting and vesting of Restricted Stock Units (RSUs). Depending on your job level and if you are scheduled to work 30+ hours per week, you are eligible to:
- Receive a grant of RSUs that vest over time, in accordance with plan documents.
- Have opportunities for additional RSU grants.
Amazon is continually evaluating new ways to provide other types of ownership opportunities for all employees.
Flexible Spending Accounts
Flexible Spending Accounts (FSAs) provide a convenient way to pay for certain eligible health care and/or dependent care expenses with pre-tax dollars. If you contribute money to an FSA, you lower your taxable income, which reduces your federal income and Social Security taxes.
- Health Care FSA can be used to pay for health insurance copays, deductibles and other eligible services and supplies not covered by your medical, dental or vision plans. The Health Care FSA has a minimum contribution of $120 and a maximum of $2,750 per plan year to use for eligible health care expenses. If you enroll in the Health Savings Plan with a Health Saving Account (HSA), you are not eligible to enroll in the Health Care FSA.
- The Dependent Care FSA can only be used to pay expenses for dependent care, such as child or elder care while you are working. The Dependent Care FSA has a minimum contribution of $120 and a maximum of $5,000 per plan year.
Available to employees working 30+ hours. Amazon provides both short-term and long-term disability coverage at no cost to you. Both plans provide partial income (60% of eligible salary up to certain limits) if you become medically disabled.
- There is a 7-day waiting period for short-term disability (STD) benefits; benefits are then paid for up to 26 weeks. For STD benefits related to pregnancy, there is still a 7-day waiting period, but pay is retroactive to the first day of disability.
- Short-term pregnancy disability coverage is available for birth mothers and is equal to 100% of basic earnings for up to 4 weeks pre-partum and 10 weeks post-partum.
- There is a 180-day waiting period for long-term disability (LTD) benefits; benefits are then paid for an extended period depending on the severity of the disability and other factors. The LTD plan has a pre-existing condition exclusion provision.
Life and Accidental Death and Dismemberment Insurance
- Amazon currently provides two times your annual base salary for Basic Life and AD&D Insurance at no cost to you.
- You can buy supplemental life insurance coverage for yourself, payable to your designated beneficiaries if you die. You can buy coverage in amounts of 1x to 10x your base annual earnings, up to $2,000,000.
- You can buy life insurance to cover your spouse/domestic partner in amounts of $25,000 or ½ to 5x your base annual salary, up to $250,000 not to exceed 100% of your total amount of life insurance (basic and supplemental).
- You can buy life insurance to cover your children in certain amounts up to $20,000.
- An accelerated death benefit is available in certain situations involving a terminal illness.
- You can buy supplemental AD&D insurance to cover just yourself, or yourself and your eligible dependents, of 1x to 10x your basic annual earnings, up to $2,000,000.
Critical Illness & Personal Accident Insurance
Get discounted rates on Critical Illness and Personal Accident Insurance through MetLife.
- Critical Illness Insurance can help fill the gaps in your health or disability plan by paying a lump-sum benefit if you are diagnosed with a serious medical condition like a heart attack, cancer or stroke. It helps cover things like your deductible and coinsurance, transportation and lodging.
- Personal Accident Insurance can help protect against unexpected costs related to accidents by paying a specific dollar amount for covered events, including dislocations, burns, emergency room visits and more.
Homeowners, Renters, Auto, and Pet Insurance
Take advantage of discounted rates and compare homeowners, renters, auto, and pet insurance carriers on one platform. You can also save up to 20% when you enroll with ASPCA Pet Health Insurance. You can enroll in or change these benefits at any time during the year, not just during Open Enrollment.
With MetLife, receive discounted rates on legal advice and fully covered legal services for a wide range of personal legal matters including wills and estate planning, real estate matters, family law, and more.
Mental health care and daily living assistance
- Free counseling services and referrals are available 24/7 for any Amazon employee or household member.
- You can receive up to three freecounseling sessions- virtual or in person-per issue, per year.
- Referrals are available for legal and financial issues and for personal convenience and care needs (child care, elder care, relocating, and other personal needs).
Child, Elder and Pet Care Referral Services
Receive free membership to Sittercity and Years Ahead, a portal to locate qualified child care or elder care. You pay for the actual care you need. The site provides access to background checks, references and reviews from other users.
- Amazon.com Discount Code for 10% discount off Amazon merchandise
- Employee discount program for a variety of goods and services such as travel, event tickets, cell phone services, restaurants, entertainment, sports, and more.
Leave of Absence
In general, leaves of absence are available to eligible employees for time off due to a qualifying medical condition, or to care for a qualified family member experiencing a medical condition. Other types of leave may include: the birth, adoption, or placement of a new child, pregnancy, personal reasons, the death of a member of your immediate family, jury/witness duty, military reasons, or other reasons provided under various laws. Most leaves are unpaid, except some pregnancy and parental leaves, and some portions of jury/witness, military, and bereavement leaves. All leaves have various length limits, and some leave types may require certification or the approval of your manager or Human Resources.
Pregnancy & Parental Leave
All blue badge employees who are considered full time (40 hours per week) or reduced time (30-39 hours per week) are eligible for leaves as summarized below. Your health care, life insurance, 401(k), and vacation benefits under Amazon’s plans will continue during the following.
Pregnancy Leave (runs concurrently with state and federal leaves, as applicable)
- Amazon provides pregnant employees with the following:
- Pre-Partum: Up to four weeks of paid leave, conditional on medical recommendation
- Post-Partum: 10 weeks of paid leave
- Short-term disability benefits during leave
- Restricted Stock Units (RSUs) will continue to vest according to your current vesting schedule.
- Sign-on bonus payments (if included in your job offer) continue per original schedule.
Parental Leave (must also have one continuous year of employment at time of birth or adoption to be eligible)
- Six weeks of paid leave following the birth or adoption of a child.
- Parental Leave can be taken in one consecutive six-week period or split into two increments, and must be used within twelve months of birth or adoption.
- You do not need approval from your manager to take Parental Leave. You should discuss your leave plan with your manager, but how and when you utilize your leave is at your discretion.
- RSU vesting will suspend after 14 days cumulative after leave and resume upon return to work with an adjusted vest schedule. Your updated vesting schedule may take up to four weeks to appear in your Morgan Stanley account.
Leave Share Program
- The pay benefit of any unused portion of the Parental Leave can be shared if your spouse or domestic partner does not have access to a paid parental leave through his/her employer
- You will be asked to affirm that your spouse or domestic partner does not have paid parental leave benefits through his/her employer.
- You’ll receive your base pay for the unused portion of the Parental Leave in your next available paycheck along with your regular base pay.
Ramp Back Program
- Birth parents and primary caregivers can gradually return to work on a reduced schedule over an eight-week period immediately following a Pregnancy or Parental Leave.
- You can select one of three reduced-hour options: 50% for eight weeks, 50% for four weeks/75% for four weeks, or 75% for eight weeks.
- Your base pay, sign-on bonus payments and RSU vesting will be proportional to the option you select.
- A new RSU vesting schedule will be established upon return to full-time work. Your updated vesting schedule may take up to four weeks to appear in your Morgan Stanley account.
- You do not need manager approval for Ramp Back. You should discuss your leave plan with your manager, but how you utilize Ramp Back is at your discretion.
- Amazon reimburses qualified adoption expenses up to $5,000 for a single-child adoption or $10,000 combined maximum for a sibling-group adoption.
- Generally, the child must be under the age of 18.
- Limit of one single or group adoption reimbursed per calendar year.
Paid Time Off
For information about paid time off, please refer to the separate PTO webpage shared by your recruiter.
View the paycheck contributions for Medical, Dental, and Vision coverage for you and any eligible dependents, effective April 1, 2021, to December 31, 2021.
This page is a summary of benefits only. It is not a legally binding document. If there is a discrepancy between this information and the plan or policy documents, the plan or policy documents will govern in all cases. Participation in Amazon benefits does not signify a contract of employment. Amazon reserves the right to modify or terminate any portion of the Amazon benefits program and/or any of its policies at any time with or without notice.
If you are not part of the group that this document applies and, as a result, have received this document in error, please contact your recruiter or human resources to receive the documents applicable to you.
Fidelity 401k amazon
This is an incredible benefit that can be better understood through a hypothetical example of an Amazon employee who is under 50, earning a base salary of $160,000 per year. As mentioned, in this scenario you can max out your regular 401(k) with a contribution of $19,500. Amazon will match 50% of your 401(k) contribution, up to 4% of salary, which in this example is $3,200 (2% of your base salary).
Typically, employees are limited in terms of how much that they can save into retirement accounts. Each year, if you’re under 50, you can set aside $19,500 into a 401(k), and another $6,000 into either a Roth or traditional IRA; if you’re over 50, you can save an additional $6,500 into your 401(k). Many people do not realize that the Federal limit for total 401(k) contributions is $58,000 (if you’re under 50) and $64,500 (if you’re over 50). The Amazon Mega Backdoor Roth 401(k) allows you to fill a portion of the gap between your regular contributions and the Federal limit using after-tax dollars. Employees can contribute up to 10% of their base salary each year and immediately convert those dollars into a Roth account within your 401(k).
The Federal limit for total dollars going into a 401(k) in 2021 is $58,000. Using the Mega Backdoor Roth benefit, Amazon will let you contribute up to 10% of your base salary to the after-tax portion of your 401(k) and subsequently convert it to a Roth. So with our hypothetical $160,000 base salary that means Amazon would let you contribute (if you start in January) $16,000 to the after tax part of the 401(k) over the course of the year. Those dollars can then be immediately converted to Roth.
These after-tax contributions are limited to 10% of each respective paycheck, so you can’t just put 10% of your salary in in a lump sum. So, for Amazon employees looking to take advantage of this benefit, the sooner that you make the after-tax election, the more that you will be able to save.
Another brand-new feature for 2021 is that Fidelity now allows for the automatic conversion of these after-tax dollars to Roth. You will want to make sure that within the contribution section of your 401(k) under Roth in-plan conversion, you select ‘Convert after tax to Roth’. That way any growth within the account will essentially never be taxed.
Caressed them one after the other: I'll try eat !!. my fingers glistened with the juice of passion collected in the fields of lust: and now they disappeared into the charming mouths of my. Friends: from the beginning with reluctance, and then with increasing zeal, women's tongues were collected, licked this tart honey: fingers entwined with slippery snakes - tongues, ready to bite at any moment - I was seriously turned on by this picture, I felt how lust and lust clouded my brains and were ready to explode from the inside: That's enough !!.
I dont want. My not a little friend fought, wriggled in the narrow space of the female womb: and she squeezed her vagina to.
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