American Century Capital Value Fund Investor Class (ACTIX)
Filed: 17 Feb 06, 12:00am
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A
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AMERICAN CENTURY MUTUAL FUNDS, INC.
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DATE OF INTENDED RELEASE TO SECURITYHOLDERS: February 17, 2006
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February 17, 2006
Dear Qualified Plan Sponsor:
As indicated in the letter enclosed, Dear Mason Street Fund Shareholder, we have
recently announced a change with respect to the Mason Street Family of Funds
(the "Reorganization"). Our records indicate that you are an existing client of
Northwestern Mutual Investment Services, LLC ("NMIS") under either the "Plan
Recordkeeper" or "Foundations Full Service" Programs for defined contribution
plans. These Programs provide your Plan with recordkeeping services from Boston
Financial Data Services, Inc. ("Boston Financial") and, in some cases, directed
trustee services from State Street Bank and Trust Company ("State Street Bank").
In connection with the Reorganization, NMIS' agreements with Boston Financial
and State Street Bank will terminate. Thus, the Reorganization and the
termination of Boston Financial and State Street Bank will affect you in several
ways:
YOUR INVESTMENT OPTIONS ARE CHANGING.
(a) The Stable Asset Fund Option - Under your existing Program, you have access
to the State Street Stable Asset Fund. This fund is offered to customers in the
turnkey 401(k) plan (qualified retirement plan) market in addition to certain
Mason Street Fund investments. (The Stable Asset Fund is also known as the
Turnkey 401(k) Plan Guaranteed Rate Fund (GRF).) Your designation of the Stable
Asset Fund as an investment option in your Plan serves as one of the required
"core" investments in order for you, as the Plan Sponsor and Fiduciary, to be
relieved of liability for the results of investment directions by the Plan
Participants. This is known as "section 404(c)" relief, which refers to the
Employee Retirement Income Security Act of 1974, as amended, ("ERISA") provision
that absolves you of liability for the investment decisions of your
Participants. The Stable Asset Fund will no longer be available as a "core"
investment option after March 31, 2006. You may wish to consider the American
Century Prime Money Market Fund as an alternative core fund for your Plan. See
the enclosed Prospectus for information concerning this Fund.
(b) Mason Street Index 400 Stock Fund - Additionally, after the Reorganization,
the Mason Street Index 400 Stock Fund ("i400 Fund") will no longer be available
as a Plan investment option and will be reorganized into an unrelated fund
family, the Federated Mid-Cap Index Fund managed by Federated Investors. As a
result of the timing of the various stages in the Reorganization, the i400 Fund
will no longer exist as of the close of business March 23, 2006. Unless your
Plan Participants affirmatively direct the reallocation of their assets out of
the i400 Fund before March 24, 2006, any remaining investments in the i400 Fund
will automatically be transferred to the Stable Asset Fund as of the close of
business on March 23, 2006. As mentioned above, the Stable Asset Fund is only
available until March 31, 2006, after which it will not be available.
AS A PLAN FIDUCIARY, YOU WILL NEED TO:
Amend your relevant Plan document and/or associated investment brochures,
etc., to eliminate the Stable Asset Fund and i400 Fund as investment
options under your Plan and to add any replacement investment options,
which could include the American Century Prime Money Market Fund. To the
extent that your Plan Participants do not transfer assets out of the i400
Fund, you will need to authorize Boston Financial, in writing, no later
than March 21st, 2006 to transfer any remaining i400 Fund assets to the
Stable Asset Fund for the time period between March 24th and March 31st and
to transfer any remaining Stable Asset Fund assets to the American Century
Prime Money Market Fund after March 31st. Enclosed is an Authorization Form
for the Transfer of Funds for this purpose.
Please be aware that designation of investment options is a fiduciary
function and neither NMIS, Boston Financial, State Street Bank nor American
Century is offering you investment or legal advice regarding your fiduciary
obligations to the Plan or Plan Participants. Please seek the assistance of
your own professional investment or legal advisor as you deem appropriate.
Communicate ahead of time (no later than February 21st) to your Plan
Participants that they should reallocate their investments in anticipation
of both the Stable Asset Fund and the i400 Fund being eliminated. If they
do nothing, their remaining accounts in the i400 Fund will be transferred
to the Stable Asset Fund as of the close of business on March 23rd as an
interim step and then to the American Century Prime Money Market Fund after
March 31st. (This is a necessary transition step because the American
Century Prime Money Market Fund will not become available until April 3,
2006.) Similarly, any assets in the Stable Asset Fund as of March 31st will
be transferred to the American Century Prime Money Market Fund on April
3rd.
Your recordkeeping services are changing. Boston Financial will no longer
provide recordkeeping services under the "Plan RecordKeeper" or "Foundations
Full Service" Programs. Your Participant accounts will be transferred to
American Century.
NOTE: If you are a Foundations Full Service client, please be aware that
American Century does NOT perform legal compliance functions such as
nondiscrimination testing, preparing Forms 5500, etc. Accordingly, you will need
to contract with a third party administrator (TPA) to replace those services.
In addition, in order to facilitate the Reorganization, the Mason Street Funds
will no longer accept new purchases, including exchanges and automatic
purchases, as of the close of business on March 23, 2006. In addition, for
recordkeeping purposes, no redemptions will be able to be processed, i.e.,
hardships, loans, distributions or Qualified Domestic Relations Orders (QDROs).
This freeze on transactions will result in a so-called "blackout" period while
the necessary processing occurs at the Fund level and while Boston Financial
transfers data to American Century. The blackout period is anticipated to end no
later than April 3, 2006; please contact Boston Financial at 800-401-2331 for
details specific to your Plan.
AS A PLAN FIDUCIARY, YOU WILL NEED TO:
Notify your employees who participate in the Plan on or before February
21st that there will be a blackout period and that the last day that they
may initiate transactions will be March 23rd. Under ERISA, you have certain
duties to properly notify employees. Enclosed is a sample "blackout" notice
intended to comply with applicable Department of Labor (DOL) regulations.
However, please be aware that neither NMIS, Boston Financial, State Street
Bank nor American Century is offering you legal advice regarding your
obligations. Please seek the assistance of your own professional legal
advisor as you deem appropriate. If you are a client of the Foundations
Full-Service Program with, Boston Financial, you also need to find a
replacement TPA to provide the legal compliance functions that are not
offered by American Century, e.g., nondiscrimination testing, filing of
Forms 5500, etc.
Your Plan Document is changing (and, if applicable, your Trustee). In
connection with the Reorganization, your Retirement Plan will also cease to
be eligible for participation in The Northwestern Mutual Life Insurance
Company ("1M") Prototype Plan Program and the Boston Financial Prototype
Plan Program. In addition, State Street Bank will resign as a directed
Trustee on all Money Purchase Pension Plans and 401(k)/Profit Sharing Plans
no later than March 31, 2006.
AS A PLAN FIDUCIARY, YOU WILL NEED TO:
If You Are a Plan Sponsor with A Self-Trusteed - Prototype Plan using an NM
Prototype. You must adopt a new amended and restated prototype plan
document or have an attorney draft a document specifically for your Plan.
American Century has a prototype plan you may wish to consider. Your
Financial Representative is also ready to assist you to make this process
as seamless as possible.
If You are a Plan Sponsor with a State Street Bank Trusteed - Prototype
Plan. In addition to adopting a newly amended and restated prototype plan
document (as described above), you must also: (i) appoint a successor
trustee to replace State Street Bank, (ii) open a new NMIS account
(including any individual participant accounts) and transfer all Plan
assets into the new NMIS account(s). Depending upon your state's law, the
successor trustee may be either an individual trustee (e.g., an owner or
officer of the company) or a corporate trustee (bank or similar financial
institution). State Street Bank cannot serve as the successor trustee for
your Plan.
In either situation, unless your Plan covers only a sole proprietor or
partners, ERISA requires distribution of a Summary Plan Description (SPD)
to Plan Participants and beneficiaries receiving benefits within 120 days
of the amended Plan's effective date. The SPD will explain the terms of the
new Plan to Participants and indicate the new trustee(s), if applicable.
Your registered representative will contact you shortly to help you transition
your Plan from its existing service arrangement to the American Century program.
If you have questions please contact the Plan Liaison Team at 800-401-2231.
Sincerely,
Northwestern Mutual Investment Services, LLC
Enclosures:
Dear Mason Street Fund Shareholder letter
American Century Prime Money Market Fund Prospectus
Authorization Form for Transfer of Funds
Sample Blackout Notice
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