Franklin Corefolio Allocation Fund Class C NCSR Certified annual shareholder report (management investment company)

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549

FORM N-CSR

CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT INVESTMENT
COMPANIES

Investment Company Act file number 811-07851

_Franklin Templeton Fund Allocator Series
(Exact name of registrant as specified in charter)

One Franklin Parkway, San Mateo, CA 94403-1906
(Address of principal executive offices)(Zip code)

Craig S. Tyle, One Franklin Parkway, San Mateo, CA 94403-1906
(Name and address of agent for service)

Registrant's telephone number, including area code: (650) 312-2000

Date of fiscal year end: 12/31

Date of reporting period: _12/31/13

Item 1. Reports to Stockholders.


	Contents


Shareholder Letter	1	Annual Report		Franklin Templeton		Report of Independent
				Growth Allocation Fund	25	Registered Public
		Economic and Market Overview	3			Accounting Firm	78

		Franklin Templeton		Financial Highlights and
		Conservative Allocation Fund	5	Statements of Investments	35	Tax Information	79

				Financial Statements	56	Board Members and Officers	82
		Franklin Templeton
		Moderate Allocation Fund	15	Notes to Financial Statements	61	Shareholder Information	87

| 1

Annual Report

Economic and Market Overview

The 12 months under review were characterized by reinvigorated policy support and an economic recovery in developed markets. However, differences in global economic trends corresponded with increasingly divergent monetary policies, and growth in emerging market economies tended to slow. The central banks of key developed markets generally reaffirmed their accommodative monetary stances while some emerging market counterparts tightened policy rates as they sought to control inflation and currency depreciation.

In the U.S., economic growth and employment trends generally exceeded expectations, underpinned by consumer and business spending and rising inventories. Historically low mortgage rates and improving sentiment aided the housing market recovery, evidenced by solid new and existing home sales, rising home prices, low inventories and multi-year lows in new foreclosures. The U.S. Federal Reserve Board (Fed) expanded its asset purchase program to $85 billion per month from $40 billion early in the year. After encouraging economic and employment reports, the Fed announced in December it would reduce its monthly bond purchases by $10 billion beginning in January 2014; however, the Fed committed to keeping interest rates low. In October, the federal government temporarily shut down after Congress failed to authorize routine federal funding amid a disagreement over a new health care law. However, Congress subsequently agreed to fund the government through early 2014 and later passed a two-year budget deal that could ease automatic spending cuts and lower the risk of another shutdown.

Outside the U.S., the eurozone emerged from its longest recession on record during the second half of 2013 and Japan’s growth moderated. The European Central Bank reduced its policy rate to a record low and pledged to maintain systemic support following political turmoil in Greece, Spain, Portugal and Italy. Germany’s re-election of Chancellor Angela Merkel was largely perceived as a vote of support for ongoing eurozone reform measures. In Asia, the Bank of Japan set an explicit inflation target and pledged to double bond purchases in an unprecedented wave of policy reform. The U.S. dollar fell versus the euro but rose versus the Japanese yen in 2013.

Growth in many emerging markets moderated based on lower domestic demand, falling exports and weakening commodity prices. Political turmoil in certain emerging markets, the Fed’s potential tapering of its asset purchase program and the Chinese central bank’s effort to tighten liquidity to curb real estate and credit speculation led to a sell-off in emerging market equities and

Annual Report | 3

a sharp depreciation in regional currencies against the U.S. dollar. Central banks in Brazil, India and Indonesia raised interest rates in the second half of 2013 as they sought to curb inflation.

The stock market rally in developed markets accelerated during 2013 amid redoubled central bank commitments, continued corporate earnings strength and increasing signs of economic progress. Emerging market stocks rebounded toward period-end, although Latin American stocks trailed their emerging market peers. Oil prices rallied in the third quarter and rose for the year mainly owing to supply concerns related to geopolitical turmoil, but gold posted its largest annual price decline in more than three decades. Increasingly divergent economic and political circumstances during the period resulted in declining market correlations, which many bottom-up investors perceived as more favorable.

The foregoing information reflects our analysis and opinions as of December 31, 2013. The information is not a complete analysis of every aspect of any market, country, industry, security or fund. Statements of fact are from sources considered reliable.

4 | Annual Report

Franklin Templeton Conservative Allocation Fund

Your Fund’s Goal and Main Investments: Franklin Templeton Conservative Allocation

Fund seeks the highest level of long-term total return consistent with a lower level of risk.¹

Performance data represent past performance, which does not guarantee future results. Investment return and principal value will fluctuate, and you may have a gain or loss when you sell your shares. Current performance may differ from figures shown. Please visit franklintempleton.com or call (800) 342-5236 for most recent month-end performance.

1. The risk/reward potential is based on the Fund’s goal and level of risk. It is not indicative of the Fund’s actual or
implied performance or portfolio composition, which may change on a continuous basis.

The dollar value, number of shares or principal amount, and names of all portfolio holdings are listed in the Fund’s
SOI, which begins on page 40.

Annual Report | 5


Top 10 Fund Holdings
Franklin Templeton
Conservative Allocation Fund
12/31/13
% of Total
Net Assets
Templeton Global Total Return Fund –
Class R6	17.3	%
Franklin U.S. Government Securities
Fund – Class R6	11.5	%
Franklin Low Duration Total Return
Fund – Class R6	9.8	%
Franklin Growth Fund – Class R6	9.5	%
Franklin Rising Dividends Fund –
Class R6	6.5	%
Franklin Strategic Income Fund –
Class R6	5.6	%
iShares Intermediate Credit Bond, ETF	4.8	%
Franklin DynaTech Fund – Class R6	4.2	%
Templeton Foreign Fund – Class R6	4.0	%
Mutual European Fund – Class R6	3.8	%

Australasia, Far East (EAFE) Index, which measures global stock performance for developed markets excluding the U.S. and Canada, produced total returns of +32.39% and +23.29%.²The Fund’s fixed income benchmark, the Barclays U.S. Aggregate Index, which tracks U.S. investment-grade bonds, had a -2.02% total return.²You can find the Fund’s long-term performance data in the Performance Summary beginning on page 8.

Investment Strategy

Whenever possible, we attempt to hold the same underlying Franklin Templeton funds and other fund investments (collectively, “fund investments”) in each Allocation Fund’s portfolio and will vary the allocation percentages of the fund investments based upon each Allocation Fund’s risk/return level. Maintaining similarity of the fund investments across the Conservative, Moderate and Growth Allocation Funds is intended to increase the consistency of their results relative to one another. We allocate the Fund’s assets among the broad asset classes, and when selecting equity funds, we consider the fund investments’ foreign and domestic exposure, market capitalization ranges and investment styles (growth versus value). When selecting fixed income funds, we focus primarily on maximizing income appropriate to the Fund’s risk profile.

Manager’s Discussion

The Fund’s performance can be attributed mainly to its allocation among equities and fixed income securities and to the actual performance of the fund investments.

At period-end, Franklin Templeton Conservative Allocation Fund allocated 51.9% of total net assets to fixed income and 44.2% of total net assets to equity. Domestic fixed income exposure was 60.9% of the total fixed income weighting, with the balance represented by foreign fixed income. Templeton Global Total Return Fund – Class R6, representing 17.3% of the Fund’s total net assets, was our largest fixed income fund weighting at period-end. On the equity side, domestic exposure was 68.6% of the Fund’s total equity weighting, with the balance represented by foreign equity. The portfolio was diversified across capitalization sizes and investment styles, and on December 31, 2013,

2. Source: © 2014 Morningstar. All Rights Reserved. The information contained herein: (1) is proprietary to Morningstar and/or its content providers; (2) may not be copied or distributed; and (3) is not warranted to be accurate, complete or timely. Neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of this information. The indexes are unmanaged and include reinvestment of any income or distributions. One cannot invest directly in an index, and an index is not representative of the Fund’s portfolio.

6 | Annual Report

we held shares in large-, mid- and small-capitalization equity funds, representing both growth and value styles. Franklin Growth Fund – Class R6 was our largest equity fund weighting at 9.5% of total net assets.

During the 12-month reporting period, our largest domestic growth fund holding, Franklin Growth Fund – Class R6, and our largest domestic value fund holding, Franklin Rising Dividends Fund – Class R6, underperformed the S&P 500. Our largest foreign equity fund holding, Templeton Foreign Fund – Class R6, outperformed the MSCI EAFE Index. On the fixed income side, Templeton Global Total Return Fund – Class R6 outperformed the Barclays U.S. Aggregate Index while Franklin U.S. Government Securities Fund – Class R6 performed better than the index.

Thank you for your continued participation in Franklin Templeton Conservative Allocation Fund. We look forward to serving your future investment needs.

CFA^®is a trademark owned by CFA Institute.

The foregoing information reflects our analysis, opinions and portfolio holdings as of December 31, 2013, the end of the reporting period. The way we implement our main investment strategies and the resulting portfolio holdings may change depending on factors such as market and economic conditions. These opinions may not be relied upon as investment advice or an offer for a particular security. The information is not a complete analysis of every aspect of any market, country, industry, security or the Fund. Statements of fact are from sources considered reliable, but the investment manager makes no representation or warranty as to their completeness or accuracy. Although historical performance is no guarantee of future results, these insights may help you understand our investment management philosophy.

Annual Report | 7

Performance Summary as of 12/31/13

Franklin Templeton Conservative Allocation Fund

Your dividend income will vary depending on dividends or interest paid by securities in the Fund’s portfolio, adjusted for operating expenses of each class. Capital gain distributions are net profits realized from the sale of portfolio securities. The performance table and graphs do not reflect any taxes that a shareholder would pay on Fund dividends, capital gain distributions, if any, or any realized gains on the sale of Fund shares. Total return reflects reinvestment of the Fund’s dividends and capital gain distributions, if any, and any unrealized gains or losses.


Price and Distribution Information
Class A (Symbol: FTCIX)				Change		12/31/13		12/31/12
Net Asset Value (NAV)			+$	0.59	$	14.65	$	14.06
Distributions (1/1/13–12/31/13)
Dividend Income	$	0.3235
Long-Term Capital Gain	$	0.5190
Total	$	0.8425
Class C (Symbol: FTCCX)				Change		12/31/13		12/31/12
Net Asset Value (NAV)			+$	0.57	$	14.40	$	13.83
Distributions (1/1/13–12/31/13)
Dividend Income	$	0.2186
Long-Term Capital Gain	$	0.5190
Total	$	0.7376
Class R (Symbol: FTCRX)				Change		12/31/13		12/31/12
Net Asset Value (NAV)			+$	0.59	$	14.60	$	14.01
Distributions (1/1/13–12/31/13)
Dividend Income	$	0.2857
Long-Term Capital Gain	$	0.5190
Total	$	0.8047
Class R6 (Symbol: n/a)				Change		12/31/13	��	5/1/13
Net Asset Value (NAV)			+$	0.01	$	14.63	$	14.62
Distributions (5/1/13–12/31/13)
Dividend Income	$	0.3288
Long-Term Capital Gain	$	0.5190
Total	$	0.8478
Advisor Class (Symbol: FTCZX)				Change		12/31/13		12/31/12
Net Asset Value (NAV)			+$	0.59	$	14.64	$	14.05
Distributions (1/1/13–12/31/13)
Dividend Income	$	0.3598
Long-Term Capital Gain	$	0.5190
Total	$	0.8788

8 | Annual Report

Performance Summary (continued)

Performance¹

Cumulative total return excludes sales charges. Aggregate and average annual total returns and value of $10,000 investment include maximum sales charges. Class A: 5.75% maximum initial sales charge; Class C: 1% contingent deferred sales charge in first year only; Class R/R6/Advisor Class: no sales charges.


Class A		1-Year			5-Year			10-Year
Cumulative Total Return²	+	10.39	%	+	55.80	%	+	77.35	%
Average Annual Total Return³	+	4.02	%	+	7.98	%	+	5.27	%
Value of $10,000 Investment⁴	$	10,402		$	14,679		$	16,711
Total Annual Operating Expenses⁵		1.14% (with waiver)			1.15% (without waiver)
Class C		1-Year			5-Year			10-Year
Cumulative Total Return²	+	9.61	%	+	50.12	%	+	64.57	%
Average Annual Total Return³	+	8.61	%	+	8.46	%	+	5.11	%
Value of $10,000 Investment⁴	$	10,861		$	15,012		$	16,457
Total Annual Operating Expenses⁵		1.89% (with waiver)			1.90% (without waiver)
Class R		1-Year			5-Year			10-Year
Cumulative Total Return²	+	10.14	%	+	53.93	%	+	73.03	%
Average Annual Total Return³	+	10.14	%	+	9.01	%	+	5.64	%
Value of $10,000 Investment⁴	$	11,014		$	15,393		$	17,303
Total Annual Operating Expenses⁵		1.39% (with waiver)			1.40% (without waiver)
Class R6								Inception (5/1/13)
Cumulative Total Return²							+	6.06	%
Aggregate Total Return⁶							+	6.06	%
Value of $10,000 Investment⁴							$	10,606
Total Annual Operating Expenses⁵		0.77% (with waiver)			0.78% (without waiver)
Advisor Class⁷		1-Year			5-Year			10-Year
Cumulative Total Return²	+	10.67	%	+	57.76	%	+	80.90	%
Average Annual Total Return³	+	10.67	%	+	9.55	%	+	6.11	%
Value of $10,000 Investment⁴	$	11,067		$	15,776		$	18,090
Total Annual Operating Expenses⁵		0.89% (with waiver)			0.90% (without waiver)

Performance data represent past performance, which does not guarantee future results. Investment return and principal value will fluctuate, and you may have a gain or loss when you sell your shares. Current performance may differ from figures shown. For most recent month-end performance, go to franklintempleton.com or call (800) 342-5236.

Annual Report | 9

Performance Summary (continued)

Total Return Index Comparison for a Hypothetical $10,000 Investment¹

Total return represents the change in value of an investment over the periods shown. It includes any applicable maximum sales charge, Fund expenses, account fees and reinvested distributions. The unmanaged indexes include reinvestment of any income or distributions. They differ from the Fund in composition and do not pay management fees or expenses. One cannot invest directly in an index.

10 | Annual Report

Annual Report | 11

While an asset allocation plan can be a valuable tool to help reduce overall volatility, all investments involve risks, including possible loss of principal. Because this Fund invests in underlying funds, which may engage in a variety of investment strategies involving certain risks, the Fund is subject to those same risks. Typically, the more aggressive the investment, or the greater the potential return, the more risk involved. Generally, investors should be comfortable with some fluctuation in the value of their investments, especially over the short term. Stock prices fluctuate, sometimes rapidly and dramatically, due to factors affecting individual companies, particular industries or sectors, or general market conditions. Bond prices generally move in the opposite direction of interest rates. Thus, as prices of bonds in a fund adjust to a rise in interest rates, that fund’s share price may decline. Foreign investing carries additional risks such as currency and market volatility and political or social instability, risks that are heightened in developing countries. These risks are described in the Fund’s prospectus. Investors should consult their financial advisors for help selecting the appropriate fund of funds, or fund combination, based on an evaluation of their investment objectives and risk tolerance. The Fund is actively managed but there is no guarantee that the manager’s investment decisions will produce the desired results.

Class C:

Class R:

These shares have higher annual fees and expenses than Class A shares.

Shares are available to certain eligible investors as described in the prospectus. These shares have higher annual fees and expenses than Class A shares.

Class R6: Advisor Class:

Shares are available to certain eligible investors as described in the prospectus. Shares are available to certain eligible investors as described in the prospectus.

2. Cumulative total return represents the change in value of an investment over the periods indicated.

3. Average annual total return represents the average annual change in value of an investment over the periods indicated. 4. These figures represent the value of a hypothetical $10,000 investment in the Fund over the periods indicated.

5. Figures are as stated in the Fund’s current prospectus. In periods of market volatility, assets may decline significantly, causing total annual Fund operating expenses to become higher than the figures shown.

6. Aggregate total return represents the change in value of an investment for the period indicated. Since Class R6 shares have existed for less than one year, average annual total return is not available.

7. Effective 12/1/05, the Fund began offering Advisor Class shares, which do not have sales charges or a Rule 12b-1 plan. Performance quotations for this class reflect the following methods of calculation: (a) For periods prior to 12/1/05, a restated figure is used based upon the Fund’s Class A performance, excluding the effect of Class A’s maximum initial sales charge, but reflecting the effect of the Class A Rule 12b-1 fees; and (b) for periods after 12/1/05, actual Advisor Class performance is used reflecting all charges and fees applicable to that class. Since 12/1/05 (commencement of sales), the cumulative and average annual total returns of Advisor Class shares were +61.21% and +6.09%.

8. Source: © 2014 Morningstar. The S&P 500 is a market capitalization-weighted index of 500 stocks designed to measure total U.S. equity market performance. The MSCI EAFE Index is a free float-adjusted, market capitalization-weighted index designed to measure equity market performance in global developed markets excluding the U.S. and Canada. The Barclays U.S. Aggregate Index is a market capitalization-weighted index representing the U.S. investment-grade, fixed-rate, taxable bond market with index components for government and corporate, mortgage pass-through and asset-backed securities. All issues included are SEC registered, taxable, dollar denominated and nonconvertible, must have at least one year to final maturity and must be rated investment grade (Baa3/BBB-/BBB- or higher) using the middle rating of Moody’s, Standard & Poor’s and Fitch, respectively.

12 | Annual Report

Your Fund’s Expenses

Franklin Templeton Conservative Allocation Fund

As a Fund shareholder, you can incur two types of costs:

Transaction costs, including sales charges (loads) on Fund purchases; and
Ongoing Fund costs, including management fees, distribution and service (12b-1) fees, and other Fund expenses. All mutual funds have ongoing costs, sometimes referred to as operating expenses.

The following table shows ongoing costs of investing in the Fund and can help you understand these costs and compare them with those of other mutual funds. The table assumes a $1,000 investment held for the six months indicated.

Actual Fund Expenses

The first line (Actual) for each share class listed in the table provides actual account values and expenses. The “Ending Account Value” is derived from the Fund’s actual return, which includes the effect of Fund expenses.

You can estimate the expenses you paid during the period by following these steps. Of course, your account value and expenses will differ from those in this illustration:

1.	Divide your account value by $1,000.
	If an account had an $8,600 value, then $8,600 ÷ $1,000 = 8.6.
2.	Multiply the result by the number under the heading “Expenses Paid During Period.”
	If Expenses Paid During Period were $7.50, then 8.6 x $7.50 = $64.50.

In this illustration, the estimated expenses paid this period are $64.50.

Hypothetical Example for Comparison with Other Funds

Information in the second line (Hypothetical) for each class in the table can help you compare ongoing costs of investing in the Fund with those of other mutual funds. This information may not be used to estimate the actual ending account balance or expenses you paid during the period. The hypothetical “Ending Account Value” is based on the actual expense ratio for each class and an assumed 5% annual rate of return before expenses, which does not represent the Fund’s actual return. The figure under the heading “Expenses Paid During Period” shows the hypothetical expenses your account would have incurred under this scenario. You can compare this figure with the 5% hypothetical examples that appear in shareholder reports of other funds.

Annual Report | 13

Your Fund’s Expenses (continued)

Please note that expenses shown in the table are meant to highlight ongoing costs and do not reflect any transaction costs, such as sales charges. Therefore, the second line for each class is useful in comparing ongoing costs only, and will not help you compare total costs of owning different funds. In addition, if transaction costs were included, your total costs would have been higher. Please refer to the Fund prospectus for additional information on operating expenses.


		Beginning		Ending		Expenses Paid		Expenses Paid
		Account Value		Account Value		During Period*		During Period**
Class A		7/1/13		12/31/13		7/1/13–12/31/13		7/1/13–12/31/13
Actual	$	1,000	$	1,084.10	$	3.31	$	6.36
Hypothetical (5% return before expenses)	$	1,000	$	1,022.03	$	3.21	$	6.16
Class C
Actual	$	1,000	$	1,080.00	$	7.23	$	10.28
Hypothetical (5% return before expenses)	$	1,000	$	1,018.25	$	7.02	$	9.96
Class R
Actual	$	1,000	$	1,083.00	$	4.62	$	7.67
Hypothetical (5% return before expenses)	$	1,000	$	1,020.77	$	4.48	$	7.43
Class R6
Actual	$	1,000	$	1,086.20	$	1.47	$	4.52
Hypothetical (5% return before expenses)	$	1,000	$	1,023.79	$	1.43	$	4.38
Advisor Class
Actual	$	1,000	$	1,085.50	$	2.00	$	5.05
Hypothetical (5% return before expenses)	$	1,000	$	1,023.29	$	1.94	$	4.89

14 | Annual Report

*Expenses are calculated using the most recent six-month expense ratio excluding expenses of the fund investments, net of expense waivers,
annualized for each class (A: 0.63%; C: 1.38%; R: 0.88%; R6: 0.28%; and Advisor: 0.38%), multiplied by the average account value over the
period, multiplied by 184/365 to reflect the one-half year period.
**Expenses are calculated using the most recent six-month expense ratio including expenses of the fund investments, net of expense waivers,
annualized for each class (A: 1.21%; C: 1.96%; R: 1.46%; R6: 0.86%; and Advisor: 0.96%), multiplied by the average account value over the
period, multiplied by 184/365 to reflect the one-half year period.

Franklin Templeton Moderate Allocation Fund

Your Fund’s Goal and Main Investments: Franklin Templeton Moderate Allocation Fund

seeks the highest level of long-term total return consistent with a moderate level of risk.¹

This annual report for Franklin Templeton Moderate Allocation Fund covers
the fiscal year ended December 31, 2013.

Performance Overview

Franklin Templeton Moderate Allocation Fund – Class A delivered a +14.35%
cumulative total return for the 12 months under review. By comparison, the
Fund’s equity benchmarks, the Standard & Poor’s 500 Index (S&P 500), a
broad measure of U.S. stock performance, and MSCI Europe, Australasia, Far
East (EAFE) Index, which measures global stock performance for developed
markets excluding the U.S. and Canada, produced total returns of +32.39%

1. The risk/reward potential is based on the Fund’s goal and level of risk. It is not indicative of the Fund’s actual or
implied performance or portfolio composition, which may change on a continuous basis.

The dollar value, number of shares or principal amount, and names of all portfolio holdings are listed in the Fund’s
SOI, which begins on page 47.

Annual Report | 15


Top 10 Fund Holdings
Franklin Templeton
Moderate Allocation Fund
12/31/13
	% of Total
	Net Assets
Franklin Growth Fund – Class R6	12.7	%
Templeton Global Total Return Fund –
Class R6	12.1	%
Franklin Rising Dividends Fund –
Class R6	8.4	%
Franklin U.S. Government Securities
Fund – Class R6	8.2	%
Franklin Low Duration Total Return
Fund – Class R6	7.2	%
Templeton Foreign Fund – Class R6	5.3	%
Franklin DynaTech Fund – Class R6	5.2	%
Mutual European Fund – Class R6	5.0	%
Franklin Strategic Income Fund –
Class R6	4.0	%
Franklin Utilities Fund – Class R6	3.7	%

and +23.29%.²The Fund’s fixed income benchmark, the Barclays U.S. Aggregate Index, which tracks U.S. investment-grade bonds, had a -2.02% total return.²You can find the Fund’s long-term performance data in the Performance Summary beginning on page 18.

Investment Strategy

Manager’s Discussion

The Fund’s performance can be attributed mainly to its allocation among equities and fixed income securities and to the actual performance of the fund investments.

At period-end, Franklin Templeton Moderate Allocation Fund allocated 59.7% of total net assets to equity and 37.2% to fixed income. Domestic equity exposure was 68.7% of the total equity weighting, with the balance represented by foreign equity. The portfolio was diversified across capitalization sizes and investment styles, and on December 31, 2013, we held shares in large-, mid-and small-capitalization equity funds, representing both growth and value styles. Franklin Growth Fund – Class R6, representing 12.7% of the Fund’s total net assets, was our largest equity fund weighting at period-end. On the fixed income side, domestic exposure was 61.6% of the Fund’s total income weighting, with the balance represented by foreign fixed income. Templeton Global Total Return Fund – Class R6 was our largest fixed income fund weighting at 12.1% of total net assets.

16 | Annual Report

Thank you for your continued participation in Franklin Templeton Moderate Allocation Fund. We look forward to serving your future investment needs.

Annual Report | 17

Performance Summary as of 12/31/13

Franklin Templeton Moderate Allocation Fund


Price and Distribution Information
Class A (Symbol: FMTIX)				Change		12/31/13		12/31/12
Net Asset Value (NAV)			+$	1.19	$	15.78	$	14.59
Distributions (1/1/13–12/31/13)
Dividend Income	$	0.2960
Short-Term Capital Gain	$	0.0034
Long-Term Capital Gain	$	0.5557
Total	$	0.8551
Class C (Symbol: FTMTX)				Change		12/31/13		12/31/12
Net Asset Value (NAV)			+$	1.14	$	15.42	$	14.28
Distributions (1/1/13–12/31/13)
Dividend Income	$	0.1853
Short-Term Capital Gain	$	0.0034
Long-Term Capital Gain	$	0.5557
Total	$	0.7444
Class R (Symbol: FTMRX)				Change		12/31/13		12/31/12
Net Asset Value (NAV)			+$	1.18	$	15.73	$	14.55
Distributions (1/1/13–12/31/13)
Dividend Income	$	0.2569
Short-Term Capital Gain	$	0.0034
Long-Term Capital Gain	$	0.5557
Total	$	0.8160
Class R6 (Symbol: n/a)				Change		12/31/13		5/1/13
Net Asset Value (NAV)			+$	0.46	$	15.79	$	15.33
Distributions (5/1/13–12/31/13)
Dividend Income	$	0.3101
Short-Term Capital Gain	$	0.0034
Long-Term Capital Gain	$	0.5557
Total	$	0.8692

18 | Annual Report


Performance Summary (continued)


Price and Distribution Information (continued)
Advisor Class (Symbol: FMTZX)		Change		12/31/13		12/31/12
Net Asset Value (NAV)	+$	1.19	$	15.79	$	14.60
Distributions (1/1/13–12/31/13)
Dividend Income	$	0.3347
Short-Term Capital Gain	$	0.0034
Long-Term Capital Gain	$	0.5557
Total	$	0.8938

Performance¹


Class A		1-Year			5-Year			10-Year
Cumulative Total Return²	+	14.35	%	+	71.96	%	+	92.06	%
Average Annual Total Return³	+	7.78	%	+	10.14	%	+	6.11	%
Value of $10,000 Investment⁴	$	10,778		$	16,208		$	18,097
Total Annual Operating Expenses⁵		1.20% (with waiver)			1.22% (without waiver)
Class C		1-Year			5-Year			10-Year
Cumulative Total Return²	+	13.41	%	+	65.63	%	+	78.09	%
Average Annual Total Return³	+	12.41	%	+	10.62	%	+	5.94	%
Value of $10,000 Investment⁴	$	11,241		$	16,563		$	17,809
Total Annual Operating Expenses⁵		1.95% (with waiver)			1.97% (without waiver)
Class R		1-Year			5-Year			10-Year
Cumulative Total Return²	+	13.97	%	+	69.82	%	+	87.24	%
Average Annual Total Return³	+	13.97	%	+	11.17	%	+	6.47	%
Value of $10,000 Investment⁴	$	11,397		$	16,982		$	18,724
Total Annual Operating Expenses⁵		1.45% (with waiver)			1.47% (without waiver)
Class R6								Inception (5/1/13)
Cumulative Total Return²							+	8.93	%
Aggregate Total Return⁶							+	8.93	%
Value of $10,000 Investment⁴							$	10,893
Total Annual Operating Expenses⁵		0.81% (with waiver)			0.83% (without waiver)
Advisor Class⁷		1-Year			5-Year			10-Year
Cumulative Total Return²	+	14.56	%	+	74.06	%	+	96.01	%
Average Annual Total Return³	+	14.56	%	+	11.72	%	+	6.96	%
Value of $10,000 Investment⁴	$	11,456		$	17,406		$	19,601
Total Annual Operating Expenses⁵		0.95% (with waiver)			0.97% (without waiver)

Annual Report | 19

Performance Summary (continued)

Total Return Index Comparison for a Hypothetical $10,000 Investment¹

20 | Annual Report

Annual Report | 21

Class C:

Class R:

These shares have higher annual fees and expenses than Class A shares.

Shares are available to certain eligible investors as described in the prospectus. These shares have higher annual fees and expenses than Class A shares.

Class R6: Advisor Class:

Shares are available to certain eligible investors as described in the prospectus. Shares are available to certain eligible investors as described in the prospectus.

2. Cumulative total return represents the change in value of an investment over the periods indicated.

5. Figures are as stated in the Fund’s current prospectus. In periods of market volatility, assets may decline significantly, causing total annual fund operating expenses to become higher than the figures shown.

22 | Annual Report

Your Fund’s Expenses

Franklin Templeton Moderate Allocation Fund

As a Fund shareholder, you can incur two types of costs:

Transaction costs, including sales charges (loads) on Fund purchases; and
Ongoing Fund costs, including management fees, distribution and service (12b-1) fees, and other Fund expenses. All mutual funds have ongoing costs, sometimes referred to as operating expenses.

Actual Fund Expenses

You can estimate the expenses you paid during the period by following these steps. Of course, your account value and expenses will differ from those in this illustration:

1.	Divide your account value by $1,000.
	If an account had an $8,600 value, then $8,600 ÷ $1,000 = 8.6.
2.	Multiply the result by the number under the heading “Expenses Paid During Period.”
	If Expenses Paid During Period were $7.50, then 8.6 x $7.50 = $64.50.

In this illustration, the estimated expenses paid this period are $64.50.

Hypothetical Example for Comparison with Other Funds

Annual Report | 23

Your Fund’s Expenses (continued)


		Beginning		Ending		Expenses Paid		Expenses Paid
		Account Value		Account Value		During Period*		During Period**
Class A		7/1/13		12/31/13		7/1/13–12/31/13		7/1/13–12/31/13
Actual	$	1,000	$	1,107.50	$	3.29	$	6.48
Hypothetical (5% return before expenses)	$	1,000	$	1,022.08	$	3.16	$	6.21
Class C
Actual	$	1,000	$	1,102.30	$	7.26	$	10.44
Hypothetical (5% return before expenses)	$	1,000	$	1,018.30	$	6.97	$	10.01
Class R
Actual	$	1,000	$	1,105.00	$	4.62	$	7.80
Hypothetical (5% return before expenses)	$	1,000	$	1,020.82	$	4.43	$	7.48
Class R6
Actual	$	1,000	$	1,108.90	$	1.38	$	4.57
Hypothetical (5% return before expenses)	$	1,000	$	1,023.89	$	1.33	$	4.38
Advisor Class
Actual	$	1,000	$	1,108.20	$	1.97	$	5.15
Hypothetical (5% return before expenses)	$	1,000	$	1,023.34	$	1.89	$	4.94

*Expenses are calculated using the most recent six-month expense ratio excluding expenses of the fund investments, net of expense waivers, annualized for each class (A: 0.62%; C: 1.37%; R: 0.87%; R6: 0.26%; and Advisor: 0.37%), multiplied by the average account value over the period, multiplied by 184/365 to reflect the one-half year period.

**Expenses are calculated using the most recent six-month expense ratio including expenses of the fund investments, net of expense waivers, annualized for each class (A: 1.22%; C: 1.97%; R: 1.47%; R6: 0.86%; and Advisor: 0.97%), multiplied by the average account value over the period, multiplied by 184/365 to reflect the one-half year period.

24 | Annual Report

Franklin Templeton Growth Allocation Fund

Your Fund’s Goal and Main Investments: Franklin Templeton Growth Allocation Fund seeks the highest level of long-term total return consistent with a higher level of risk.¹


Asset Allocation*
Franklin Templeton
Growth Allocation Fund
Based on Total Net Assets as of 12/31/13

Domestic Equity	56.9%

Foreign Equity	27.5%

Domestic Fixed Income	8.2%

Foreign Fixed Income	5.0%

Alternative Strategies	0.8%

Short-Term Investments & Other Net Assets	1.6%


*The asset allocation is based on the Statement of Investments (SOI), which classifies each underlying
fund and other fund investments into a broad asset class based on their predominant
investments under normal market conditions.

This annual report for Franklin Templeton Growth Allocation Fund covers the fiscal year ended December 31, 2013.

Performance Overview

Franklin Templeton Growth Allocation Fund – Class A delivered a +20.98% cumulative total return for the 12 months under review. By comparison, the Fund’s equity benchmarks, the Standard & Poor’s 500 Index (S&P 500), a broad measure of U.S. stock performance, and MSCI Europe, Australasia, Far East (EAFE) Index, which measures global stock performance for developed markets excluding the U.S. and Canada, produced total returns of +32.39% and +23.29%.²The Fund’s fixed income benchmark, the Barclays U.S. Aggregate Index, which tracks U.S. investment-grade bonds, had a -2.02% total return.²You can find the Fund’s long-term performance data in the Performance Summary beginning on page 28.

Investment Strategy

The dollar value, number of shares or principal amount, and names of all portfolio holdings are listed in the Fund’s SOI, which begins on page 54.

Annual Report | 25


Top 10 Fund Holdings
Franklin Templeton
Growth Allocation Fund
12/31/13
	% of Total
	Net Assets
Franklin Growth Fund – Class R6	16.9	%
Franklin Rising Dividends Fund –
Class R6	11.7	%
Templeton Foreign Fund – Class R6	7.6	%
Franklin DynaTech Fund – Class R6	7.4	%
Mutual European Fund – Class R6	7.0	%
Franklin International Small Cap Growth
Fund – Class R6	5.2	%
Franklin Utilities Fund – Class R6	4.9	%
Franklin Flex Cap Growth Fund –
Class R6	4.3	%
Templeton Global Total Return Fund –
Class R6	4.2	%
Templeton Frontier Markets Fund –
Class R6	3.6	%

when selecting equity funds, we consider the fund investments’ foreign and domestic exposure, market capitalization ranges and investment styles (growth versus value). When selecting fixed income funds, we focus primarily on maximizing income appropriate to the Fund’s risk profile.

Manager’s Discussion

The Fund’s performance can be attributed mainly to its allocation among equities and fixed income securities and to the actual performance of the fund investments.

At period-end, Franklin Templeton Growth Allocation Fund allocated 84.4% of total net assets to equity and 13.2% to fixed income. Domestic equity exposure was 67.4% of the total equity weighting, with the balance represented by foreign equity. The portfolio was diversified across capitalization sizes and investment styles, and on December 31, 2013, we held shares in large-, mid-and small-capitalization equity funds, representing both growth and value styles. Franklin Growth Fund – Class R6, representing 16.9% of the Fund’s total net assets, was our largest equity fund weighting at period-end. On the fixed income side, domestic exposure was 62.1% of the Fund’s total income weighting, with the balance represented by foreign fixed income. Templeton Global Total Return Fund – Class R6 was our largest fixed income fund weighting at 4.2% of total net assets.

26 | Annual Report

Thank you for your continued participation in Franklin Templeton Growth Allocation Fund. We look forward to serving your future investment needs.

Annual Report | 27

Performance Summary as of 12/31/13

Franklin Templeton Growth Allocation Fund


Price and Distribution Information
Class A (Symbol: FGTIX)				Change		12/31/13		12/31/12
Net Asset Value (NAV)			+$	2.59	$	18.40	$	15.81
Distributions (1/1/13–12/31/13)
Dividend Income	$	0.2473
Long-Term Capital Gain	$	0.4420
Total	$	0.6893
Class C (Symbol: FTGTX)				Change		12/31/13		12/31/12
Net Asset Value (NAV)			+$	2.50	$	18.00	$	15.50
Distributions (1/1/13–12/31/13)
Dividend Income	$	0.1289
Long-Term Capital Gain	$	0.4420
Total	$	0.5709
Class R (Symbol: FGTRX)				Change		12/31/13		12/31/12
Net Asset Value (NAV)			+$	2.55	$	18.18	$	15.63
Distributions (1/1/13–12/31/13)
Dividend Income	$	0.2021
Long-Term Capital Gain	$	0.4420
Total	$	0.6441
Class R6 (Symbol: n/a)				Change		12/31/13		5/1/13
Net Asset Value (NAV)			+$	1.56	$	18.44	$	16.88
Distributions (5/1/13–12/31/13)
Dividend Income	$	0.3040
Long-Term Capital Gain	$	0.4420
Total	$	0.7460
Advisor Class (Symbol: FGTZX)				Change		12/31/13		12/31/12
Net Asset Value (NAV)			+$	2.60	$	18.45	$	15.85
Distributions (1/1/13–12/31/13)
Dividend Income	$	0.2898
Long-Term Capital Gain	$	0.4420
Total	$	0.7318

28 | Annual Report

Performance Summary (continued)

Performance¹


Class A		1-Year			5-Year			10-Year
Cumulative Total Return²	+	20.98	%	+	94.04	%	+	104.29	%
Average Annual Total Return³	+	14.06	%	+	12.83	%	+	6.77	%
Value of $10,000 Investment⁴	$	11,406		$	18,287		$	19,249
Total Annual Operating Expenses⁵		1.25% (with waiver)			1.32% (without waiver)
Class C		1-Year			5-Year			10-Year
Cumulative Total Return²	+	20.04	%	+	86.89	%	+	89.49	%
Average Annual Total Return³	+	19.04	%	+	13.32	%	+	6.60	%
Value of $10,000 Investment⁴	$	11,904		$	18,689		$	18,949
Total Annual Operating Expenses⁵		2.00% (with waiver)			2.07% (without waiver)
Class R		1-Year			5-Year			10-Year
Cumulative Total Return²	+	20.67	%	+	91.73	%	+	99.31	%
Average Annual Total Return³	+	20.67	%	+	13.90	%	+	7.14	%
Value of $10,000 Investment⁴	$	12,067		$	19,173		$	19,931
Total Annual Operating Expenses⁵		1.50% (with waiver)			1.57% (without waiver)
Class R6								Inception (5/1/13)
Cumulative Total Return²							+	13.88	%
Aggregate Total Return⁶							+	13.88	%
Value of $10,000 Investment⁴							$	11,388
Total Annual Operating Expenses⁵		0.82% (with waiver)			0.89% (without waiver)
Advisor Class⁷		1-Year			5-Year			10-Year
Cumulative Total Return²	+	21.26	%	+	96.57	%	+	108.60	%
Average Annual Total Return³	+	21.26	%	+	14.47	%	+	7.63	%
Value of $10,000 Investment⁴	$	12,126		$	19,657		$	20,860
Total Annual Operating Expenses⁵		1.00% (with waiver)			1.07% (without waiver)

Annual Report | 29

Performance Summary (continued)

Total Return Index Comparison for a Hypothetical $10,000 Investment¹

30 | Annual Report

Annual Report | 31

2. Cumulative total return represents the change in value of an investment over the periods indicated.

32 | Annual Report

Your Fund’s Expenses

Franklin Templeton Growth Allocation Fund

As a Fund shareholder, you can incur two types of costs:

Transaction costs, including sales charges (loads) on Fund purchases; and
Ongoing Fund costs, including management fees, distribution and service (12b-1) fees, and other Fund expenses. All mutual funds have ongoing costs, sometimes referred to as operating expenses.

Actual Fund Expenses

You can estimate the expenses you paid during the period by following these steps. Of course, your account value and expenses will differ from those in this illustration:

1.	Divide your account value by $1,000.
	If an account had an $8,600 value, then $8,600 ÷ $1,000 = 8.6.
2.	Multiply the result by the number under the heading “Expenses Paid During Period.”
	If Expenses Paid During Period were $7.50, then 8.6 x $7.50 = $64.50.

In this illustration, the estimated expenses paid this period are $64.50.

Hypothetical Example for Comparison with Other Funds

Annual Report | 33

Your Fund’s Expenses (continued)


		Beginning		Ending		Expenses Paid		Expenses Paid
		Account Value		Account Value		During Period*		During Period**
Class A		7/1/13		12/31/13		7/1/13–12/31/13		7/1/13–12/31/13
Actual	$	1,000	$	1,146.00	$	3.35	$	6.76
Hypothetical (5% return before expenses)	$	1,000	$	1,022.08	$	3.16	$	6.36
Class C
Actual	$	1,000	$	1,141.50	$	7.39	$	10.80
Hypothetical (5% return before expenses)	$	1,000	$	1,018.30	$	6.97	$	10.16
Class R
Actual	$	1,000	$	1,144.50	$	4.70	$	8.11
Hypothetical (5% return before expenses)	$	1,000	$	1,020.82	$	4.43	$	7.63
Class R6
Actual	$	1,000	$	1,147.80	$	1.19	$	4.60
Hypothetical (5% return before expenses)	$	1,000	$	1,024.15	$	1.12	$	4.33
Advisor Class
Actual	$	1,000	$	1,147.40	$	2.00	$	5.41
Hypothetical (5% return before expenses)	$	1,000	$	1,023.34	$	1.89	$	5.09

*Expenses are calculated using the most recent six-month expense ratio excluding expenses of the fund investments, net of expense waivers, annualized for each class (A: 0.62%; C: 1.37%; R: 0.87%; R6: 0.22%; and Advisor: 0.37%), multiplied by the average account value over the period, multiplied by 184/365 to reflect the one-half year period.

**Expenses are calculated using the most recent six-month expense ratio including expenses of the fund investments, net of expense waivers, annualized for each class (A: 1.25%; C: 2.00%; R: 1.50%; R6: 0.85%; and Advisor: 1.00%), multiplied by the average account value over the period, multiplied by 184/365 to reflect the one-half year period.

34 | Annual Report

Franklin Templeton Fund Allocator Series

Financial Highlights


Franklin Templeton Conservative Allocation Fund
					Year Ended December 31,
Class A		2013			2012			2011			2010			2009
Per share operating performance
(for a share outstanding throughout the year)
Net asset value, beginning of year	$	14.06		$	13.33		$	13.74		$	12.72		$	10.92
Income from investment operations^a:
Net investment income^b,c		0.31			0.27			0.30			0.29			0.25
Net realized and unrealized gains (losses)		1.12			0.79			(0.40	)		0.97			1.87
Total from investment operations		1.43			1.06			(0.10	)		1.26			2.12
Less distributions from:			��
Net investment income		(0.32	)		(0.30	)		(0.31	)		(0.24	)		(0.24	)
Net realized gains		(0.52	)		(0.03	)		—			—			(0.08	)
Total distributions		(0.84	)		(0.33	)		(0.31	)		(0.24	)		(0.32	)
Net asset value, end of year	$	14.65		$	14.06		$	13.33		$	13.74		$	12.72

Total return^d		10.39	%		7.99	%		(0.71	)%		10.00	%		19.67	%

Ratios to average net assets
Expenses before waiver and payments by affiliates^e		0.60	%		0.53	%		0.52	%		0.52	%		0.56	%
Expenses net of waiver and payments by affiliates^e		0.59	%		0.50	%		0.50	%		0.50	%		0.50	%
Net investment income^c		2.11	%		1.98	%		2.17	%		2.25	%		2.15	%

Supplemental data
Net assets, end of year (000’s)	$	871,541		$	794,429		$	725,675		$	612,828		$	443,376
Portfolio turnover rate		57.59	%		25.82	%		18.67	%		10.51	%		11.48	%

^aThe amount shown for a share outstanding throughout the period may not correlate with the Statement of Operations for the period due to the timing of sales and repurchases of
the Fund shares in relation to income earned and/or fluctuating market value of the investments of the Fund.
^bBased on average daily shares outstanding.
^cRecognition of net investment income by the Fund is affected by the timing of declaration of dividends by the Underlying Funds and exchange traded funds in which the Fund invests.
^dTotal return does not reflect sales commissions or contingent deferred sales charges, if applicable.
^eDoes not include expenses of the Underlying Funds and exchange traded funds in which the Fund invests. The weighted average indirect expenses of the Underlying Funds and
exchange traded funds was 0.62% for the year ended December 31, 2013.

Annual Report | The accompanying notes are an integral part of these financial statements. | 35

Franklin Templeton Fund Allocator Series

Financial Highlights (continued)


Franklin Templeton Conservative Allocation Fund
					Year Ended December 31,
Class C		2013			2012			2011			2010			2009
Per share operating performance
(for a share outstanding throughout the year)
Net asset value, beginning of year	$	13.83		$	13.13		$	13.53		$	12.54		$	10.77
Income from investment operations^a:
Net investment income^b,c		0.20			0.17			0.19			0.19			0.16
Net realized and unrealized gains (losses)		1.11			0.76			(0.38	)		0.95			1.85
Total from investment operations		1.31			0.93			(0.19	)		1.14			2.01
Less distributions from:
Net investment income		(0.22	)		(0.20	)		(0.21	)		(0.15	)		(0.16	)
Net realized gains		(0.52	)		(0.03	)		—			—			(0.08	)
Total distributions		(0.74	)		(0.23	)		(0.21	)		(0.15	)		(0.24	)
Net asset value, end of year	$	14.40		$	13.83		$	13.13		$	13.53		$	12.54

Total return^d		9.61	%		7.09	%		(1.38	)%		9.12	%		18.84	%

Ratios to average net assets
Expenses before waiver and payments by affiliates^e		1.35	%		1.28	%		1.27	%		1.27	%		1.30	%
Expenses net of waiver and payments by affiliates^e		1.34	%		1.25	%		1.25	%		1.25	%		1.24	%
Net investment income^c		1.36	%		1.23	%		1.42	%		1.50	%		1.41	%

Supplemental data
Net assets, end of year (000’s)	$	524,756		$	452,211		$	426,775		$	366,892		$	253,622
Portfolio turnover rate		57.59	%		25.82	%		18.67	%		10.51	%		11.48	%

36 | The accompanying notes are an integral part of these financial statements. | Annual Report

Franklin Templeton Fund Allocator Series

Financial Highlights (continued)


Franklin Templeton Conservative Allocation Fund
					Year Ended December 31,
Class R		2013			2012			2011			2010			2009
Per share operating performance
(for a share outstanding throughout the year)
Net asset value, beginning of year	$	14.01		$	13.29		$	13.70		$	12.69		$	10.89
Income from investment operations^a:
Net investment income^b,c		0.26			0.24			0.27			0.27			0.23
Net realized and unrealized gains (losses)		1.14			0.78			(0.40	)		0.95			1.86
Total from investment operations		1.40			1.02			(0.13	)		1.22			2.09
Less distributions from:
Net investment income		(0.29	)		(0.27	)		(0.28	)		(0.21	)		(0.21	)
Net realized gains		(0.52	)		(0.03	)		—			—			(0.08	)
Total distributions		(0.81	)		(0.30	)		(0.28	)		(0.21	)		(0.29	)
Net asset value, end of year	$	14.60		$	14.01		$	13.29		$	13.70		$	12.69

Total return		10.14	%		7.68	%		(0.95	)%		9.69	%		19.45	%

Ratios to average net assets
Expenses before waiver and payments by affiliates^d		0.85	%		0.78	%		0.77	%		0.77	%		0.81	%
Expenses net of waiver and payments by affiliates^d		0.84	%		0.75	%		0.75	%		0.75	%		0.75	%
Net investment income^c		1.86	%		1.73	%		1.92	%		2.00	%		1.90	%

Supplemental data
Net assets, end of year (000’s)	$	166,927		$	178,520		$	149,761		$	109,077		$	59,184
Portfolio turnover rate		57.59	%		25.82	%		18.67	%		10.51	%		11.48	%

^aThe amount shown for a share outstanding throughout the period may not correlate with the Statement of Operations for the period due to the timing of sales and repurchases of
the Fund shares in relation to income earned and/or fluctuating market value of the investments of the Fund.
^bBased on average daily shares outstanding.
^cRecognition of net investment income by the Fund is affected by the timing of declaration of dividends by the Underlying Funds and exchange traded funds in which the Fund invests.
^dDoes not include expenses of the Underlying Funds and exchange traded funds in which the Fund invests. The weighted average indirect expenses of the Underlying Funds and
exchange traded funds was 0.62% for the year ended December 31, 2013.

Annual Report | The accompanying notes are an integral part of these financial statements. | 37

Franklin Templeton Fund Allocator Series

Financial Highlights (continued)


Franklin Templeton Conservative Allocation Fund
		Period Ended
		December 31,
Class R6		2013	^a
Per share operating performance
(for a share outstanding throughout the period)
Net asset value, beginning of period	$	14.62
Income from investment operations^b:
Net investment income^c,d		0.54
Net realized and unrealized gains (losses)		0.32
Total from investment operations		0.86
Less distributions from:
Net investment income		(0.33	)
Net realized gains		(0.52	)
Total distributions		(0.85	)
Net asset value, end of period	$	14.63

Total return^e		6.06	%

Ratios to average net assets^f
Expenses before waiver and payments by affiliates^g		1.06	%
Expenses net of waiver and payments by affiliates^g		0.28	%
Net investment income^d		2.44	%

Supplemental data
Net assets, end of period (000’s)	$	37
Portfolio turnover rate		57.59	%

^aFor the period May 1, 2013 (effective date) to December 31, 2013.
^bThe amount shown for a share outstanding throughout the period may not correlate with the Statement of Operations for the period due to the timing of sales and repurchases of
the Fund shares in relation to income earned and/or fluctuating market value of the investments of the Fund.
^cBased on average daily shares outstanding.
^dRecognition of net investment income by the Fund is affected by the timing of declaration of dividends by the Underlying Funds and exchange traded funds in which the Fund invests.
^eTotal return is not annualized for periods less than one year.
^fRatios are annualized for periods less than one year.
^gDoes not include expenses of the Underlying Funds and exchange traded funds in which the Fund invests. The weighted average indirect expenses of the Underlying Funds and
exchange traded funds was 0.62% for the year ended December 31, 2013.

38 | The accompanying notes are an integral part of these financial statements. | Annual Report

Franklin Templeton Fund Allocator Series

Financial Highlights (continued)


Franklin Templeton Conservative Allocation Fund
					Year Ended December 31,
Advisor Class		2013			2012			2011			2010			2009
Per share operating performance
(for a share outstanding throughout the year)
Net asset value, beginning of year	$	14.05		$	13.32		$	13.73		$	12.71		$	10.91
Income from investment operations^a:
Net investment income^b,c		0.35			0.31			0.43			0.32			0.30
Net realized and unrealized gains (losses)		1.12			0.79			(0.49	)		0.98			1.85
Total from investment operations		1.47			1.10			(0.06	)		1.30			2.15
Less distributions from:
Net investment income		(0.36	)		(0.34	)		(0.35	)		(0.28	)		(0.27	)
Net realized gains		(0.52	)		(0.03	)		—			—			(0.08	)
Total distributions		(0.88	)		(0.37	)		(0.35	)		(0.28	)		(0.35	)
Net asset value, end of year	$	14.64		$	14.05		$	13.32		$	13.73		$	12.71

Total return		10.67	%		8.27	%		(0.47	)%		10.27	%		19.97	%

Ratios to average net assets
Expenses before waiver and payments by affiliates^d		0.35	%		0.28	%		0.27	%		0.27	%		0.31	%
Expenses net of waiver and payments by affiliates^d		0.34	%		0.25	%		0.25	%		0.25	%		0.25	%
Net investment income^c		2.36	%		2.23	%		2.42	%		2.50	%		2.40	%

Supplemental data
Net assets, end of year (000’s)	$	105,657		$	85,662		$	80,690		$	14,391		$	10,627
Portfolio turnover rate		57.59	%		25.82	%		18.67	%		10.51	%		11.48	%

^aThe amount shown for a share outstanding throughout the period may not correlate with the Statement of Operations for the period due to the timing of sales and repurchases of
the Fund shares in relation to income earned and/or fluctuating market value of the investments of the Fund.
^bBased on average daily shares outstanding.
^cRecognition of net investment income by the Fund is affected by the timing of declaration of dividends by the Underlying Funds and exchange traded funds in which the Fund invests.
^dDoes not include expenses of the Underlying Funds and exchange traded funds in which the Fund invests. The weighted average indirect expenses of the Underlying Funds and
exchange traded funds was 0.62% for the year ended December 31, 2013.

Annual Report | The accompanying notes are an integral part of these financial statements. | 39

Franklin Templeton Fund Allocator Series

Statement of Investments, December 31, 2013


Franklin Templeton Conservative Allocation Fund	Shares/Units		Value
Investments in Underlying Funds and Exchange Traded Funds
Alternative Strategies 2.5%
^a,bFranklin Pelagos Commodities Strategy Fund	4,186,808	$	37,974,346
^a,bFranklin Pelagos Managed Futures Strategy Fund	413,012		3,333,006
			41,307,352
Domestic Equity 30.3%
^a,bFranklin Biotechnology Discovery Fund, Class R6	70,478		9,351,729
^a,bFranklin DynaTech Fund, Class R6	1,542,287		69,819,324
^a,bFranklin Flex Cap Growth Fund, Class R6	654,116		37,258,445
^bFranklin Growth Fund, Class R6	2,427,862		158,320,900
^a,bFranklin Growth Opportunities Fund, Class R6	832,154		25,763,502
^bFranklin MicroCap Value Fund, Class R6	281,183		11,365,422
^bFranklin Real Estate Securities Fund, Class R6	933,773		16,023,538
^bFranklin Rising Dividends Fund, Class R6	2,241,682		108,519,843
^a,bFranklin Small Cap Growth Fund, Class R6	333,547		6,520,837
^bFranklin Utilities Fund, Class R6	2,817,003		42,339,559
iShares Core S&P 500, ETF	116,670		21,659,786
			506,942,885
Domestic Fixed Income 31.6%
^bFranklin Low Duration Total Return Fund, Class R6	16,065,074		163,060,503
^bFranklin Strategic Income Fund, Class R6	8,896,562		93,147,003
^bFranklin U.S. Government Securities Fund, Class R6	29,684,395		192,058,036
iShares Intermediate Credit Bond, ETF	735,700		79,367,316
			527,632,858
Foreign Equity 13.9%
^bFranklin International Growth Fund, Class R6	411,292		4,664,049
^bFranklin International Small Cap Growth Fund, Class R6	1,903,062		42,971,131
^bMutual European Fund, Class R6	2,562,801		63,454,952
^bTempleton China World Fund, Class R6	384,726		13,803,953
^bTempleton Foreign Fund, Class R6	8,095,742		66,385,081
^bTempleton Frontier Markets Fund, Class R6	1,349,082		24,661,210
WisdomTree Japan Hedged Equity Fund, ETF (Japan)	327,600		16,655,184
			232,595,560
Foreign Fixed Income 20.3%
^bFranklin Templeton Emerging Market Debt Opportunities Fund	4,282,736		50,065,181
^bTempleton Global Total Return Fund, Class R6	21,390,143		288,553,023
			338,618,204
Total Investments in Underlying Funds and Exchange Traded Funds before
Short Term Investments (Cost $1,452,805,479) 98.6%			1,647,096,859

40 | Annual Report

Franklin Templeton Fund Allocator Series

Statement of Investments, December 31, 2013 (continued)


Franklin Templeton Conservative Allocation Fund	Shares/Units		Value
Short Term Investments (Cost $27,602,955) 1.7%
Money Market Funds 1.7%
^a,bInstitutional Fiduciary Trust Money Market Portfolio	27,602,955	$	27,602,955
Total Investments in Underlying Funds and Exchange Traded Funds
(Cost $1,480,408,434) 100.3%			1,674,699,814
Other Assets, less Liabilities (0.3)%			(5,782,256	)
Net Assets 100.0%		$	1,668,917,558


See Abbreviations on page 77.

^aNon-income producing.
^bSee Note 7 regarding investments in Underlying Funds.

Annual Report | The accompanying notes are an integral part of these financial statements. | 41

Franklin Templeton Fund Allocator Series

Financial Highlights


Franklin Templeton Moderate Allocation Fund
					Year Ended December 31,
Class A		2013			2012			2011			2010			2009
Per share operating performance
(for a share outstanding throughout the year)
Net asset value, beginning of year	$	14.59		$	13.69		$	14.21		$	12.93		$	10.67
Income from investment operations^a:
Net investment income^b,c		0.27			0.29			0.30			0.32			0.25
Net realized and unrealized gains (losses)		1.78			0.97			(0.50	)		1.22			2.35
Total from investment operations		2.05			1.26			(0.20	)		1.54			2.60
Less distributions from:
Net investment income		(0.30	)		(0.32	)		(0.32	)		(0.26	)		(0.24	)
Net realized gains		(0.56	)		(0.04	)		—			—			(0.10	)
Total distributions		(0.86	)		(0.36	)		(0.32	)		(0.26	)		(0.34	)
Net asset value, end of year	$	15.78		$	14.59		$	13.69		$	14.21		$	12.93

Total return^d		14.35	%		9.34	%		(1.49	)%		11.97	%		24.68	%

Ratios to average net assets
Expenses before waiver and payments by affiliates^e		0.61	%		0.53	%		0.53	%		0.53	%		0.57	%
Expenses net of waiver and payments by affiliates^e		0.59	%		0.50	%		0.50	%		0.50	%		0.50	%
Net investment income^c		1.74	%		2.00	%		2.15	%		2.42	%		2.19	%

Supplemental data
Net assets, end of year (000’s)	$	1,636,122		$	1,452,659		$	1,322,230		$	1,119,369		$	755,399
Portfolio turnover rate		46.14	%		25.36	%		19.76	%		13.94	%		13.71	%

42 | The accompanying notes are an integral part of these financial statements. | Annual Report

Franklin Templeton Fund Allocator Series

Financial Highlights (continued)


Franklin Templeton Moderate Allocation Fund
					Year Ended December 31,
Class C		2013			2012			2011			2010			2009
Per share operating performance
(for a share outstanding throughout the year)
Net asset value, beginning of year	$	14.28		$	13.40		$	13.92		$	12.68		$	10.47
Income from investment operations^a:
Net investment income^b,c		0.15			0.17			0.19			0.22			0.17
Net realized and unrealized gains (losses)		1.74			0.97			(0.49	)		1.18			2.30
Total from investment operations		1.89			1.14			(0.30	)		1.40			2.47
Less distributions from:
Net investment income		(0.19	)		(0.22	)		(0.22	)		(0.16	)		(0.16	)
Net realized gains		(0.56	)		(0.04	)		—			—			(0.10	)
Total distributions		(0.75	)		(0.26	)		(0.22	)		(0.16	)		(0.26	)
Net asset value, end of year	$	15.42		$	14.28		$	13.40		$	13.92		$	12.68

Total return^d		13.41	%		8.51	%		(2.17	)%		11.10	%		23.82	%

Ratios to average net assets
Expenses before waiver and payments by affiliates^e		1.36	%		1.28	%		1.28	%		1.28	%		1.32	%
Expenses net of waiver and payments by affiliates^e		1.34	%		1.25	%		1.25	%		1.25	%		1.25	%
Net investment income^c		0.99	%		1.25	%		1.40	%		1.67	%		1.44	%

Supplemental data
Net assets, end of year (000’s)	$	701,224		$	605,490		$	554,603		$	460,531		$	303,794
Portfolio turnover rate		46.14	%		25.36	%		19.76	%		13.94	%		13.71	%

Annual Report | The accompanying notes are an integral part of these financial statements. | 43

Franklin Templeton Fund Allocator Series

Financial Highlights (continued)


Franklin Templeton Moderate Allocation Fund
					Year Ended December 31,
Class R		2013			2012			2011			2010			2009
Per share operating performance
(for a share outstanding throughout the year)
Net asset value, beginning of year	$	14.55		$	13.64		$	14.17		$	12.89		$	10.64
Income from investment operations^a:
Net investment income^b,c		0.22			0.25			0.27			0.30			0.23
Net realized and unrealized gains (losses)		1.78			0.99			(0.51	)		1.21			2.34
Total from investment operations		2.00			1.24			(0.24	)		1.51			2.57
Less distributions from:
Net investment income		(0.26	)		(0.29	)		(0.29	)		(0.23	)		(0.22	)
Net realized gains		(0.56	)		(0.04	)		—			—			(0.10	)
Total distributions		(0.82	)		(0.33	)		(0.29	)		(0.23	)		(0.32	)
Net asset value, end of year	$	15.73		$	14.55		$	13.64		$	14.17		$	12.89

Total return		13.97	%		9.11	%		(1.73	)%		11.75	%		24.37	%

Ratios to average net assets
Expenses before waiver and payments by affiliates^d		0.86	%		0.78	%		0.78	%		0.78	%		0.82	%
Expenses net of waiver and payments by affiliates^d		0.84	%		0.75	%		0.75	%		0.75	%		0.75	%
Net investment income^c		1.49	%		1.75	%		1.90	%		2.17	%		1.94	%

Supplemental data
Net assets, end of year (000’s)	$	286,688		$	274,881		$	248,702		$	198,936		$	101,575
Portfolio turnover rate		46.14	%		25.36	%		19.76	%		13.94	%		13.71	%

^aThe amount shown for a share outstanding throughout the period may not correlate with the Statement of Operations for the period due to the timing of sales and repurchases of
the Fund shares in relation to income earned and/or fluctuating market value of the investments of the Fund.
^bBased on average daily shares outstanding.
^cRecognition of net investment income by the Fund is affected by the timing of declaration of dividends by the Underlying Funds and exchange traded funds in which the Fund invests.
^dDoes not include expenses of the Underlying Funds and exchange traded funds in which the Fund invests. The weighted average indirect expenses of the Underlying Funds and
exchange traded funds was 0.64% for the year ended December 31, 2013.

44 | The accompanying notes are an integral part of these financial statements. | Annual Report

Franklin Templeton Fund Allocator Series

Financial Highlights (continued)


Franklin Templeton Moderate Allocation Fund
		Period Ended
		December 31,
Class R6		2013	^a
Per share operating performance
(for a share outstanding throughout the period)
Net asset value, beginning of period	$	15.33
Income from investment operations^b:
Net investment income^c,d		0.77
Net realized and unrealized gains (losses)		0.56
Total from investment operations		1.33
Less distributions from:
Net investment income		(0.31	)
Net realized gains		(0.56	)
Total distributions		(0.87	)
Net asset value, end of period	$	15.79

Total return^e		8.93	%

Ratios to average net assets^f
Expenses before waiver and payments by affiliates^g		0.44	%
Expenses net of waiver and payments by affiliates^g		0.26	%
Net investment income^d		2.07	%

Supplemental data
Net assets, end of period (000’s)	$	253
Portfolio turnover rate		46.14	%

Annual Report | The accompanying notes are an integral part of these financial statements. | 45

Franklin Templeton Fund Allocator Series

Financial Highlights (continued)


Franklin Templeton Moderate Allocation Fund
					Year Ended December 31,
Advisor Class		2013			2012			2011			2010			2009
Per share operating performance
(for a share outstanding throughout the year)
Net asset value, beginning of year	$	14.60		$	13.69		$	14.22		$	12.93		$	10.67
Income from investment operations^a:
Net investment income^b,c		0.32			0.36			0.37			0.36			0.30
Net realized and unrealized gains (losses)		1.76			0.95			(0.55	)		1.22			2.33
Total from investment operations		2.08			1.31			(0.18	)		1.58			2.63
Less distributions from:
Net investment income		(0.33	)		(0.36	)		(0.35	)		(0.29	)		(0.27	)
Net realized gains		(0.56	)		(0.04	)		—			—			(0.10	)
Total distributions		(0.89	)		(0.40	)		(0.35	)		(0.29	)		(0.37	)
Net asset value, end of year	$	15.79		$	14.60		$	13.69		$	14.22		$	12.93

Total return		14.56	%		9.61	%		(1.24	)%		12.31	%		24.97	%

Ratios to average net assets
Expenses before waiver and payments by affiliates^d		0.36	%		0.28	%		0.28	%		0.28	%		0.32	%
Expenses net of waiver and payments by affiliates^d		0.34	%		0.25	%		0.25	%		0.25	%		0.25	%
Net investment income^c		1.99	%		2.25	%		2.40	%		2.67	%		2.44	%

Supplemental data
Net assets, end of year (000’s)	$	159,303		$	123,176		$	78,605		$	39,641		$	27,944
Portfolio turnover rate		46.14	%		25.36	%		19.76	%		13.94	%		13.71	%

^aThe amount shown for a share outstanding throughout the period may not correlate with the Statement of Operations for the period due to the timing of sales and repurchases of
the Fund shares in relation to income earned and/or fluctuating market value of the investments of the Fund.
^bBased on average daily shares outstanding.
^cRecognition of net investment income by the Fund is affected by the timing of declaration of dividends by the Underlying Funds and exchange traded funds in which the Fund invests.
^dDoes not include expenses of the Underlying Funds and exchange traded funds in which the Fund invests. The weighted average indirect expenses of the Underlying Funds and
exchange traded funds was 0.64% for the year ended December 31, 2013.

46 | The accompanying notes are an integral part of these financial statements. | Annual Report

Franklin Templeton Fund Allocator Series

Statement of Investments, December 31, 2013


Franklin Templeton Moderate Allocation Fund	Shares/Units		Value
Investments in Underlying Funds and Exchange Traded Funds
Alternative Strategies 1.9%
^a,bFranklin Pelagos Commodities Strategy Fund	5,209,062	$	47,246,194
^a,bFranklin Pelagos Managed Futures Strategy Fund	511,630		4,128,851
			51,375,045
Domestic Equity 41.0%
^a,bFranklin Biotechnology Discovery Fund, Class R6	162,161		21,517,179
^a,bFranklin DynaTech Fund, Class R6	3,173,969		143,685,571
^a,bFranklin Flex Cap Growth Fund, Class R6	1,559,426		88,824,923
^bFranklin Growth Fund, Class R6	5,437,223		354,561,290
^a,bFranklin Growth Opportunities Fund, Class R6	1,885,229		58,366,704
^bFranklin MicroCap Value Fund, Class R6	604,171		24,420,599
^bFranklin Real Estate Securities Fund, Class R6	2,199,870		37,749,773
^bFranklin Rising Dividends Fund, Class R6	4,856,020		235,079,920
^a,bFranklin Small Cap Growth Fund, Class R6	724,816		14,170,156
^bFranklin Utilities Fund, Class R6	6,924,389		104,073,567
iShares Core S&P 500, ETF	323,240		60,009,506
			1,142,459,188
Domestic Fixed Income 22.9%
^bFranklin Low Duration Total Return Fund, Class R6	19,675,358		199,704,888
^bFranklin Strategic Income Fund, Class R6	10,670,983		111,725,188
^bFranklin U.S. Government Securities Fund, Class R6	35,178,492		227,604,840
iShares Intermediate Credit Bond, ETF	917,700		99,001,476
			638,036,392
Foreign Equity 18.7%
^bFranklin International Growth Fund, Class R6	921,804		10,453,260
^bFranklin International Small Cap Growth Fund, Class R6	4,223,679		95,370,671
^bMutual European Fund, Class R6	5,648,509		139,857,073
^bTempleton China World Fund, Class R6	798,094		28,635,595
^bTempleton Foreign Fund, Class R6	18,004,006		147,632,853
^bTempleton Frontier Markets Fund, Class R6	3,315,755		60,611,999
WisdomTree Japan Hedged Equity Fund, ETF (Japan)	746,300		37,941,892
			520,503,343
Foreign Fixed Income 14.3%
^bFranklin Templeton Emerging Market Debt Opportunities Fund	5,193,280		60,709,438
^bTempleton Global Total Return Fund, Class R6	25,067,740		338,163,815
			398,873,253
Total Investments in Underlying Funds and Exchange Traded Funds before
Short Term Investments (Cost $2,303,492,181) 98.8%			2,751,247,221

Annual Report | 47

Franklin Templeton Fund Allocator Series

Statement of Investments, December 31, 2013 (continued)


Franklin Templeton Moderate Allocation Fund	Shares/Units		Value
Short Term Investments (Cost $41,441,411) 1.5%
Money Market Funds 1.5%
^a,bInstitutional Fiduciary Trust Money Market Portfolio	41,441,411	$	41,441,411
Total Investments in Underlying Funds and Exchange Traded Funds
(Cost $2,344,933,592) 100.3%			2,792,688,632
Other Assets, less Liabilities (0.3)%			(9,098,744	)
Net Assets 100.0%		$	2,783,589,888


See Abbreviations on page 77.

^aNon-income producing.
^bSee Note 7 regarding investments in Underlying Funds.

48 | The accompanying notes are an integral part of these financial statements. | Annual Report

Franklin Templeton Fund Allocator Series

Financial Highlights


Franklin Templeton Growth Allocation Fund
					Year Ended December 31,
Class A		2013			2012			2011			2010			2009
Per share operating performance
(for a share outstanding throughout the year)
Net asset value, beginning of year	$	15.81		$	14.53		$	15.25		$	13.51		$	10.48
Income from investment operations^a:
Net investment income^b,c		0.19			0.21			0.22			0.27			0.20
Net realized and unrealized gains (losses)		3.09			1.32			(0.70	)		1.66			3.04
Total from investment operations		3.28			1.53			(0.48	)		1.93			3.24
Less distributions from:
Net investment income and short term gains received from
Underlying Funds		(0.25	)		(0.25	)		(0.24	)		(0.19	)		(0.21	)
Net realized gains		(0.44	)		—			—			—			—^d
Total distributions		(0.69	)		(0.25	)		(0.24	)		(0.19	)		(0.21	)
Net asset value, end of year	$	18.40		$	15.81		$	14.53		$	15.25		$	13.51

Total return^e		20.98	%		10.52	%		(3.15	)%		14.31	%		31.08	%

Ratios to average net assets
Expenses before waiver and payments by affiliates^f		0.65	%		0.55	%		0.54	%		0.55	%		0.62	%
Expenses net of waiver and payments by affiliates^f		0.59	%		0.50	%		0.50	%		0.50	%		0.50	%
Net investment income^c		1.10	%		1.34	%		1.49	%		1.93	%		1.72	%

Supplemental data
Net assets, end of year (000’s)	$	814,901		$	655,585		$	568,998		$	498,511		$	398,288
Portfolio turnover rate		30.45	%		31.36	%		20.19	%		17.28	%		16.55	%

^aThe amount shown for a share outstanding throughout the period may not correlate with the Statement of Operations for the period due to the timing of sales and repurchases of
the Fund shares in relation to income earned and/or fluctuating market value of the investments of the Fund.
^bBased on average daily shares outstanding.
^cRecognition of net investment income by the Fund is affected by the timing of declaration of dividends by the Underlying Funds and exchange traded funds in which the Fund invests.
^dAmount rounds to less than $0.01 per share.
^eTotal return does not reflect sales commissions or contingent deferred sales charges, if applicable.
^fDoes not include expenses of the Underlying Funds and exchange traded funds in which the Fund invests. The weighted average indirect expenses of the Underlying Funds and
exchange traded funds was 0.68% for the year ended December 31, 2013.

Annual Report | The accompanying notes are an integral part of these financial statements. | 49

Franklin Templeton Fund Allocator Series

Financial Highlights (continued)


Franklin Templeton Growth Allocation Fund
					Year Ended December 31,
Class C		2013			2012			2011			2010			2009
Per share operating performance
(for a share outstanding throughout the year)
Net asset value, beginning of year	$	15.50		$	14.25		$	14.97		$	13.28		$	10.31
Income from investment operations^a:
Net investment income^b,c		0.06			0.09			0.11			0.16			0.11
Net realized and unrealized gains (losses)		3.01			1.29			(0.69	)		1.62			2.99
Total from investment operations		3.07			1.38			(0.58	)		1.78			3.10
Less distributions from:
Net investment income and short term gains received from
Underlying Funds		(0.13	)		(0.13	)		(0.14	)		(0.09	)		(0.13	)
Net realized gains		(0.44	)		—			—			—			—^d
Total distributions		(0.57	)		(0.13	)		(0.14	)		(0.09	)		(0.13	)
Net asset value, end of year	$	18.00		$	15.50		$	14.25		$	14.97		$	13.28

Total return^e		20.04	%		9.71	%		(3.91	)%		13.44	%		30.19	%

Ratios to average net assets
Expenses before waiver and payments by affiliates^f		1.40	%		1.30	%		1.29	%		1.30	%		1.37	%
Expenses net of waiver and payments by affiliates^f		1.34	%		1.25	%		1.25	%		1.25	%		1.25	%
Net investment income^c		0.35	%		0.59	%		0.74	%		1.18	%		0.97	%

Supplemental data
Net assets, end of year (000’s)	$	309,869		$	241,787		$	218,071		$	192,597		$	153,267
Portfolio turnover rate		30.45	%		31.36	%		20.19	%		17.28	%		16.55	%

^aThe amount shown for a share outstanding throughout the period may not correlate with the Statement of Operations for the period due to the timing of sales and repurchases of
the Fund shares in relation to income earned and/or fluctuating market value of the investments of the Fund.
^bBased on average daily shares outstanding.
^cRecognition of net investment income by the Fund is affected by the timing of declaration of dividends by the Underlying Funds and exchange traded funds in which the Fund invests.
^dAmount rounds to less than $0.01 per share.
^eTotal return does not reflect sales commissions or contingent deferred sales charges, if applicable.
^fDoes not include expenses of the Underlying Funds and exchange traded funds in which the Fund invests. The weighted average indirect expenses of the Underlying Funds and
exchange traded funds was 0.68% for the year ended December 31, 2013.

50 | The accompanying notes are an integral part of these financial statements. | Annual Report

Franklin Templeton Fund Allocator Series

Financial Highlights (continued)


Franklin Templeton Growth Allocation Fund
					Year Ended December 31,
Class R		2013			2012			2011			2010			2009
Per share operating performance
(for a share outstanding throughout the year)
Net asset value, beginning of year	$	15.63		$	14.37		$	15.09		$	13.38		$	10.38
Income from investment operations^a:
Net investment income^b,c		0.14			0.16			0.19			0.25			0.19
Net realized and unrealized gains (losses)		3.05			1.31			(0.70	)		1.63			3.00
Total from investment operations		3.19			1.47			(0.51	)		1.88			3.19
Less distributions from:
Net investment income and short term gains received from
Underlying Funds		(0.20	)		(0.21	)		(0.21	)		(0.17	)		(0.19	)
Net realized gains		(0.44	)		—			—			—			—^d
Total distributions		(0.64	)		(0.21	)		(0.21	)		(0.17	)		(0.19	)
Net asset value, end of year	$	18.18		$	15.63		$	14.37		$	15.09		$	13.38

Total return		20.67	%		10.22	%		(3.40	)%		14.02	%		30.87	%

Ratios to average net assets
Expenses before waiver and payments by affiliates^e		0.90	%		0.80	%		0.79	%		0.80	%		0.87	%
Expenses net of waiver and payments by affiliates^e		0.84	%		0.75	%		0.75	%		0.75	%		0.75	%
Net investment income^c		0.85	%		1.09	%		1.24	%		1.68	%		1.47	%

Supplemental data
Net assets, end of year (000’s)	$	192,361		$	169,873		$	147,126		$	120,070		$	68,599
Portfolio turnover rate		30.45	%		31.36	%		20.19	%		17.28	%		16.55	%

^aThe amount shown for a share outstanding throughout the period may not correlate with the Statement of Operations for the period due to the timing of sales and repurchases of
the Fund shares in relation to income earned and/or fluctuating market value of the investments of the Fund.
^bBased on average daily shares outstanding.
^cRecognition of net investment income by the Fund is affected by the timing of declaration of dividends by the Underlying Funds and exchange traded funds in which the Fund invests.
^dAmount rounds to less than $0.01 per share.
^eDoes not include expenses of the Underlying Funds and exchange traded funds in which the Fund invests. The weighted average indirect expenses of the Underlying Funds and
exchange traded funds was 0.68% for the year ended December 31, 2013.

Annual Report | The accompanying notes are an integral part of these financial statements. | 51

Franklin Templeton Fund Allocator Series

Financial Highlights (continued)


Franklin Templeton Growth Allocation Fund
		Period Ended
		December 31,
Class R6		2013	^a
Per share operating performance
(for a share outstanding throughout the period)
Net asset value, beginning of period	$	16.88
Income from investment operations^b:
Net investment income^c,d		0.62
Net realized and unrealized gains (losses)		1.68
Total from investment operations		2.30
Less distributions from:
Net investment income and short term gains received from Underlying Funds		(0.30	)
Net realized gains		(0.44	)
Total distributions		(0.74	)
Net asset value, end of period	$	18.44

Total return^e		13.88	%

Ratios to average net assets^f
Expenses before waiver and payments by affiliates^g		0.95	%
Expenses net of waiver and payments by affiliates^g		0.22	%
Net investment income^d		1.47	%

Supplemental data
Net assets, end of period (000’s)	$	42
Portfolio turnover rate		30.45	%

52 | The accompanying notes are an integral part of these financial statements. | Annual Report

Franklin Templeton Fund Allocator Series

Financial Highlights (continued)


Franklin Templeton Growth Allocation Fund
					Year Ended December 31,
Advisor Class		2013			2012			2011			2010			2009
Per share operating performance
(for a share outstanding throughout the year)
Net asset value, beginning of year	$	15.85		$	14.56		$	15.28		$	13.53		$	10.49
Income from investment operations^a:
Net investment income^b,c		0.24			0.25			0.32			0.30			0.24
Net realized and unrealized gains (losses)		3.09			1.32			(0.76	)		1.68			3.04
Total from investment operations		3.33			1.57			(0.44	)		1.98			3.28
Less distributions from:
Net investment income and short term gains received from
Underlying Funds		(0.29	)		(0.28	)		(0.28	)		(0.23	)		(0.24	)
Net realized gains		(0.44	)		—			—			—			—^d
Total distributions		(0.73	)		(0.28	)		(0.28	)		(0.23	)		(0.24	)
Net asset value, end of year	$	18.45		$	15.85		$	14.56		$	15.28		$	13.53

Total return		21.26	%		10.84	%		(2.90	)%		14.61	%		31.43	%

Ratios to average net assets
Expenses before waiver and payments by affiliates^e		0.40	%		0.30	%		0.29	%		0.30	%		0.37	%
Expenses net of waiver and payments by affiliates^e		0.34	%		0.25	%		0.25	%		0.25	%		0.25	%
Net investment income^c		1.35	%		1.59	%		1.74	%		2.18	%		1.97	%

Supplemental data
Net assets, end of year (000’s)	$	74,808		$	55,810		$	48,957		$	23,313		$	18,994
Portfolio turnover rate		30.45	%		31.36	%		20.19	%		17.28	%		16.55	%

^aThe amount shown for a share outstanding throughout the period may not correlate with the Statement of Operations for the period due to the timing of sales and repurchases of
the Fund shares in relation to income earned and/or fluctuating market value of the investments of the Fund.
^bBased on average daily shares outstanding.
^cRecognition of net investment income by the Fund is affected by the timing of declaration of dividends by the Underlying Funds and exchange traded funds in which the Fund invests.
^dAmount rounds to less than $0.01 per share.
^eDoes not include expenses of the Underlying Funds and exchange traded funds in which the Fund invests. The weighted average indirect expenses of the Underlying Funds and
exchange traded funds was 0.68% for the year ended December 31, 2013.

Annual Report | The accompanying notes are an integral part of these financial statements. | 53

Franklin Templeton Fund Allocator Series

Statement of Investments, December 31, 2013


Franklin Templeton Growth Allocation Fund	Shares/Units		Value
Investments in Underlying Funds and Exchange Traded Funds
Alternative Strategies 0.8%
^a,bFranklin Pelagos Commodities Strategy Fund	1,170,588	$	10,617,231
^a,bFranklin Pelagos Managed Futures Strategy Fund	109,997		887,677
			11,504,908
Domestic Equity 56.9%
^a,bFranklin Biotechnology Discovery Fund, Class R6	108,957		14,457,542
^a,bFranklin DynaTech Fund, Class R6	2,288,810		103,614,426
^a,bFranklin Flex Cap Growth Fund, Class R6	1,052,942		59,975,601
^bFranklin Growth Fund, Class R6	3,598,914		234,685,152
^a,bFranklin Growth Opportunities Fund, Class R6	1,441,104		44,616,569
^bFranklin MicroCap Value Fund, Class R6	454,665		18,377,570
^bFranklin Real Estate Securities Fund, Class R6	1,597,431		27,411,911
^bFranklin Rising Dividends Fund, Class R6	3,367,599		163,025,467
^a,bFranklin Small Cap Growth Fund, Class R6	481,030		9,404,141
^bFranklin Utilities Fund, Class R6	4,542,020		68,266,557
iShares Core S&P 500, ETF	262,625		48,756,331
			792,591,267
Domestic Fixed Income 8.2%
^bFranklin Low Duration Total Return Fund, Class R6	3,219,778		32,680,746
^bFranklin Strategic Income Fund, Class R6	1,848,131		19,349,935
^bFranklin U.S. Government Securities Fund, Class R6	6,182,355		39,999,836
iShares Intermediate Credit Bond, ETF	203,200		21,921,216
			113,951,733
Foreign Equity 27.5%
^bFranklin International Growth Fund, Class R6	679,931		7,710,422
^bFranklin International Small Cap Growth Fund, Class R6	3,218,100		72,664,701
^bMutual European Fund, Class R6	3,932,230		97,362,019
^bTempleton China World Fund, Class R6	612,750		21,985,482
^bTempleton Foreign Fund, Class R6	12,945,242		106,150,982
^bTempleton Frontier Markets Fund, Class R6	2,712,642		49,587,097
WisdomTree Japan Hedged Equity Fund, ETF (Japan)	523,600		26,619,824
			382,080,527
Foreign Fixed Income 5.0%
^bFranklin Templeton Emerging Market Debt Opportunities Fund	865,398		10,116,502
^bTempleton Global Total Return Fund, Class R6	4,358,937		58,802,065
			68,918,567
Total Investments in Underlying Funds and Exchange Traded Funds before
Short Term Investments (Cost $1,049,175,591) 98.4%			1,369,047,002

54 | Annual Report

Franklin Templeton Fund Allocator Series

Statement of Investments, December 31, 2013 (continued)


Franklin Templeton Growth Allocation Fund	Shares/Units		Value
Short Term Investments (Cost $27,092,338) 1.9%
Money Market Funds 1.9%
^a,bInstitutional Fiduciary Trust Money Market Portfolio	27,092,338	$	27,092,338
Total Investments in Underlying Funds and Exchange Traded Funds
(Cost $1,076,267,929) 100.3%			1,396,139,340
Other Assets, less Liabilities (0.3)%			(4,157,845	)
Net Assets 100.0%		$	1,391,981,495


See Abbreviations on page 77.

^aNon-income producing.
^bSee Note 7 regarding investments in Underlying Funds.

Annual Report | The accompanying notes are an integral part of these financial statements. | 55

Franklin Templeton Fund Allocator Series

Financial Statements

Statements of Assets and Liabilities
December 31, 2013


		Franklin		Franklin		Franklin
		Templeton		Templeton		Templeton
		Conservative		Moderate		Growth
		Allocation Fund		Allocation Fund		Allocation Fund
Assets:
Cost - Underlying Funds (Note 7)	$	1,367,942,788	$	2,167,783,528	$	992,829,969
Cost - Exchange traded funds		112,465,646		177,150,064		83,437,960
Total cost of investments	$	1,480,408,434	$	2,344,933,592	$	1,076,267,929
Value - Underlying Funds (Note 7)	$	1,557,017,528	$	2,595,735,758	$	1,298,841,969
Value - Exchange traded funds		117,682,286		196,952,874		97,297,371
Total value of investments		1,674,699,814		2,792,688,632		1,396,139,340
Receivables:
Capital shares sold		3,773,252		5,418,046		3,289,035
Dividends		170,748		212,988		47,160
Other assets		37		57		25
Total assets		1,678,643,851		2,798,319,723		1,399,475,560
Liabilities:
Payables:
Capital shares redeemed		7,504,257		11,294,613		5,795,808
Asset allocation fees		348,554		580,192		217,564
Distribution fees		1,362,362		2,062,325		993,032
Transfer agent fees		419,355		645,429		406,052
Funds advanced by custodian		—		172		—
Accrued expenses and other liabilities		91,765		147,104		81,609
Total liabilities		9,726,293		14,729,835		7,494,065
Net assets, at value	$	1,668,917,558	$	2,783,589,888	$	1,391,981,495
Net assets consist of:
Paid-in capital	$	1,461,211,212	$	2,302,609,063	$	1,048,508,944
Undistributed net investment income		509,099		289,882		458,782
Net unrealized appreciation (depreciation)		194,291,380		447,755,040		319,871,411
Accumulated net realized gain (loss)		12,905,867		32,935,903		23,142,358
Net assets, at value	$	1,668,917,558	$	2,783,589,888	$	1,391,981,495

56 | The accompanying notes are an integral part of these financial statements. | Annual Report

Franklin Templeton Fund Allocator Series

Financial Statements (continued)

Statements of Assets and Liabilities (continued)
December 31, 2013


			Franklin			Franklin			Franklin
			Templeton			Templeton			Templeton
			Conservative			Moderate			Growth
			Allocation Fund			Allocation Fund			Allocation Fund
Class A:
Net assets, at value	$		871,540,632	$		1,636,122,052	$		814,901,394
Shares outstanding			59,492,744			103,651,979			44,297,153
Net asset value per share^a		$	14.65		$	15.78		$	18.40
Maximum offering price per share (net asset value
per share ÷ 94.25%)		$	15.54		$	16.74		$	19.52
Class C:
Net assets, at value	$		524,755,528	$		701,224,201	$		309,869,164
Shares outstanding			36,442,423			45,479,057			17,210,740
Net asset value and maximum offering price per share^a		$	14.40		$	15.42		$	18.00
Class R:
Net assets, at value	$		166,926,706	$		286,687,537	$		192,360,738
Shares outstanding			11,435,958			18,225,076			10,580,982
Net asset value and maximum offering price per share		$	14.60		$	15.73		$	18.18
Class R6
Net assets, at value	$		37,488	$		252,944	$		42,429
Shares outstanding			2,562			16,024			2,301
Net asset value and maximum offering price per share		$	14.63		$	15.79		$	18.44
Advisor Class:
Net assets, at value	$		105,657,204	$		159,303,154	$		74,807,770
Shares outstanding			7,217,501			10,089,497			4,055,444
Net asset value and maximum offering price per share		$	14.64		$	15.79		$	18.45


^aRedemption price is equal to net asset value less contingent deferred sales charges, if applicable.

Annual Report | The accompanying notes are an integral part of these financial statements. | 57

Franklin Templeton Fund Allocator Series

Financial Statements (continued)

Statements of Operations
for the year ended December 31, 2013


		Franklin			Franklin			Franklin
		Templeton			Templeton			Templeton
		Conservative			Moderate			Growth
		Allocation Fund			Allocation Fund			Allocation Fund
Investment income:
Dividends:
Underlying Funds (Note 7)	$	39,499,589		$	55,635,900		$	19,085,220
Exchange traded funds		3,182,972			4,828,422			1,994,128
Total investment income		42,682,561			60,464,322			21,079,348
Expenses:
Asset allocation fees (Note 3a)		3,887,238			6,425,841			3,094,528
Distribution fees: (Note 3c)
Class A		2,072,386			3,818,797			1,819,729
Class B		943			1,768			599
Class C		4,828,645			6,474,651			2,728,459
Class R		852,836			1,407,684			907,426
Transfer agent fees: (Note 3e)
Class A		987,531			2,010,120			1,218,721
Class B		121			246			109
Class C		574,212			851,421			456,618
Class R		204,260			371,583			305,001
Class R6		56			53			54
Advisor Class		109,031			180,586			109,694
Custodian fees (Note 4)		1,185			1,725			835
Reports to shareholders		120,789			242,124			144,109
Registration and filing fees		127,447			136,096			116,717
Professional fees		40,900			48,911			37,471
Trustees’ fees and expenses		11,304			18,521			8,718
Other		24,695			27,731			19,908
Expenses borne by Underlying Funds (Note 8)		(567,390	)		(1,046,530	)		(596,817	)
Total expenses		13,276,189			20,971,328			10,371,879
Expenses waived/paid by affiliates (Note 3f)		(126,245	)		(536,001	)		(731,820	)
Net expenses		13,149,944			20,435,327			9,640,059
Net investment income		29,532,617			40,028,995			11,439,289
Realized and unrealized gains (losses):
Net realized gain (loss) from:
Sale of investments:
Underlying Funds (Note 7)		32,924,417			52,861,877			15,627,081
Exchange traded funds		5,915,166			5,866,153			2,668,108
Realized gain distributions:
Underlying Funds (Note 7)		17,754,032			38,704,130			26,631,064
Exchange traded funds		203,639			463,908			325,475
Net realized gain (loss)		56,797,254			97,896,068			45,251,728
Net change in unrealized appreciation (depreciation) on investments		66,495,988			205,334,754			179,089,166
Net realized and unrealized gain (loss)		123,293,242			303,230,822			224,340,894
Net increase (decrease) in net assets resulting from operations	$	152,825,859		$	343,259,817		$	235,780,183

58 | The accompanying notes are an integral part of these financial statements. | Annual Report

Franklin Templeton Fund Allocator Series

Financial Statements (continued)


Statements of Changes in Net Assets



		Franklin Templeton							Franklin Templeton
		Conservative Allocation Fund							Moderate Allocation Fund
		Year Ended December 31,							Year Ended December 31,
		2013			2012				2013				2012
Increase (decrease) in net assets:
Operations:
Net investment income	$	29,532,617		$	25,740,307			$	40,028,995		$	43,249,674
Net realized gain (loss) from Underlying Funds
and Exchange traded funds		56,797,254			31,831,797				97,896,068			66,463,206
Net change in unrealized appreciation
(depreciation) on investments		66,495,988			50,689,377				205,334,754			95,717,335
Net increase (decrease) in net assets
resulting from operations		152,825,859			108,261,481				343,259,817			205,430,215
Distributions to shareholders from:
Net investment income:
Class A		(18,555,162	)		(16,902,240		)		(29,637,604	)		(32,136,506		)
Class B		—				(16,144	)		—				(30,222	)
Class C		(7,621,157	)		(6,523,335		)		(8,164,625	)			(9,224,627	)
Class R		(3,249,730	)		(3,412,606		)		(4,633,673	)			(5,505,201	)
Class R6		(531	)			—			(3,234	)			—
Advisor Class		(2,354,598	)		(2,045,502		)		(3,157,309	)			(2,662,305	)
Net realized gains:
Class A		(29,718,910	)		(1,499,241		)		(55,661,234	)			(3,759,993	)
Class B		—				(1,681	)		—				(4,170	)
Class C		(17,962,378	)			(869,630	)		(24,264,814	)			(1,599,514	)
Class R		(5,876,783	)			(342,581	)		(10,097,511	)			(724,273	)
Class R6		(871	)			—			(4,773	)			—
Advisor Class		(3,430,085	)			(161,726	)		(5,236,475	)			(317,817	)
Total distributions to shareholders		(88,770,205	)		(31,774,686		)		(140,861,252	)		(55,964,628		)
Capital share transactions: (Note 2)
Class A		43,179,624			28,619,249				63,691,660			40,977,549
Class B		(904,216	)		(4,299,894		)		(1,651,045	)			(8,696,685	)
Class C		53,442,005			2,477,331				45,811,134			14,125,634
Class R		(18,951,319	)		20,071,437				(10,367,488	)			9,048,172
Class R6		38,095				—			255,599				—
Advisor Class		16,347,438				473,630			25,631,305			38,942,303
Total capital share transactions		93,151,627			47,341,753				123,371,165			94,396,973
Net increase (decrease) in net assets		157,207,281			123,828,548				325,769,730			243,862,560
Net assets:
Beginning of year		1,511,710,277			1,387,881,729				2,457,820,158			2,213,957,598
End of year	$	1,668,917,558		$	1,511,710,277			$	2,783,589,888		$	2,457,820,158
Undistributed net investment income included in
net assets:
End of year	$	509,099			$	—		$	289,882			$	—

Annual Report | The accompanying notes are an integral part of these financial statements. | 59

Franklin Templeton Fund Allocator Series

Financial Statements (continued)


Statements of Changes in Net Assets (continued)


		Franklin Templeton
		Growth Allocation Fund
		Year Ended December 31,
		2013			2012
Increase (decrease) in net assets:
Operations:
Net investment income	$	11,439,289		$	12,576,392
Net realized gain (loss) from Underlying Funds and Exchange traded funds		45,251,728			42,563,990
Net change in unrealized appreciation (depreciation) on investments		179,089,166			49,590,409
Net increase (decrease) in net assets resulting from operations		235,780,183			104,730,791
Distributions to shareholders from:
Net investment income and short term gains received from Underlying Funds:
Class A		(10,678,620	)		(10,062,401	)
Class B		—			(11,110	)
Class C		(2,162,450	)		(2,049,994	)
Class R		(2,126,044	)		(2,258,982	)
Class R6		(679	)		—
Advisor Class		(1,145,252	)		(980,582	)
Net realized gains:
Class A		(18,869,198	)		—
Class B		—			—
Class C		(7,282,401	)		—
Class R		(4,676,994	)		—
Class R6		(551	)		—
Advisor Class		(1,735,561	)		—
Total distributions to shareholders		(48,677,750	)		(15,363,069	)
Capital share transactions: (Note 2)
Class A		49,959,476			35,287,382
Class B		(652,170	)		(4,195,799	)
Class C		27,297,861			4,440,651
Class R		(4,719,075	)		8,788,135
Class R6		41,939			—
Advisor Class		9,263,274			2,274,206
Total capital share transactions		81,191,305			46,594,575
Net increase (decrease) in net assets		268,293,738			135,962,297
Net assets:
Beginning of year		1,123,687,757			987,725,460
End of year	$	1,391,981,495		$	1,123,687,757
Undistributed net investment income included in net assets:
End of year	$	458,782		$	1,004,265

60 | The accompanying notes are an integral part of these financial statements. | Annual Report

Franklin Templeton Fund Allocator Series

Notes to Financial Statements

1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES

Franklin Templeton Fund Allocator Series (Trust) is registered under the Investment Company Act of 1940, as amended, (1940 Act) as an open-end investment company, consisting of fourteen separate funds, three of which are included in this report (Funds). The financial statements of the remaining funds in the Trust are presented separately. The Funds invest primarily in Franklin Templeton mutual funds (Underlying Funds). The Funds offer five classes of shares: Class A, Class C, Class R, Class R6, and Advisor Class. Effective May 1, 2013, the Funds began offering a new class of shares, Class R6. Effective March 1, 2013, all Class B shares were converted to Class A. Each class of shares differs by its initial sales load, contingent deferred sales charges, voting rights on matters affecting a single class, its exchange privilege and fees primarily due to differing arrangements for distribution and transfer agent fees.

The accounting policies of the Underlying Funds are outlined in their respective shareholder reports. A copy of the Underlying Funds’ shareholder reports, in which each fund invests, is available on the U.S. Securities and Exchange Commission (SEC) website at sec.gov or at the SEC’s Public Reference Room in Washington, D.C. The Underlying Funds’ shareholder reports are not covered by this report.

The following summarizes the Funds’ significant accounting policies.

a. Financial Instrument Valuation

The Funds’ investments in financial instruments are carried at fair value daily. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants on the measurement date. The Funds calculate the net asset value (NAV) per share at the close of the New York Stock Exchange (NYSE), generally at 4 p.m. Eastern time (NYSE close) on each day the NYSE is open for trading. Under procedures approved by the Trust’s Board of Trustees (the Board), the Funds’ administrator, investment manager and other affiliates have formed the Valuation and Liquidity Oversight Committee (VLOC). The VLOC provides administration and oversight of the Funds’ valuation policies and procedures, which are approved annually by the Board. Investments in the Underlying Funds are valued at their closing net asset value each trading day. Exchange traded funds (ETFs) listed on an exchange or on the NASDAQ National Market System are valued at the last quoted sale price or the official closing price of the day, respectively.

b. Income Taxes

It is each fund’s policy to qualify as a regulated investment company under the Internal Revenue Code. Each fund intends to distribute to shareholders substantially all of its taxable income and net realized gains to relieve it from federal income and excise taxes. As a result, no provision for U.S. federal income taxes is required.

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Notes to Financial Statements (continued)

1.	ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES (continued)
b.	Income Taxes (continued)

determined that no liability for unrecognized tax benefits is required in each fund’s financial statements related to uncertain tax positions taken on a tax return (or expected to be taken on future tax returns). Open tax years are those that remain subject to examination and are based on each tax jurisdiction statute of limitation.

c. Security Transactions, Investment Income, Expenses and Distributions

Security transactions are accounted for on trade date. Realized gains and losses on security transactions are determined on a specific identification basis. Estimated expenses are accrued daily. Dividend income and realized gain distributions by Underlying Funds and ETFs are recorded on the ex-dividend date. Distributions to shareholders are recorded on the ex-dividend date and are determined according to income tax regulations (tax basis). Distributable earnings determined on a tax basis may differ from earnings recorded in accordance with accounting principles generally accepted in the United States of America. These differences may be permanent or temporary. Permanent differences are reclassified among capital accounts to reflect their tax character. These reclassifications have no impact on net assets or the results of operations. Temporary differences are not reclassified, as they may reverse in subsequent periods.

Common expenses incurred by the Trust are allocated among the funds based on the ratio of net assets of each fund to the combined net assets of the Trust. Fund specific expenses are charged directly to the fund that incurred the expense.

The Funds indirectly bear their proportionate share of expenses from the Underlying Funds and ETFs. Since the Underlying Funds and ETFs have varied expense levels and the Funds may own different proportions of the Underlying Funds and ETFs at different times, the amount of expenses incurred indirectly by the Funds will vary.

Realized and unrealized gains and losses and net investment income, not including class specific expenses, are allocated daily to each class of shares based upon the relative proportion of net assets of each class. Differences in per share distributions, by class, are generally due to differences in class specific expenses.

d. Accounting Estimates

The preparation of financial statements in accordance with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the amounts of income and expenses during the reporting period. Actual results could differ from those estimates.

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Notes to Financial Statements (continued)

1.	ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES (continued)
e.	Guarantees and Indemnifications

Under the Trust’s organizational documents, its officers and trustees are indemnified by the Trust against certain liabilities arising out of the performance of their duties to the Trust. Additionally, in the normal course of business, the Trust, on behalf of the Funds, enters into contracts with service providers that contain general indemnification clauses. The Trust’s maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Trust that have not yet occurred. Currently, the Trust expects the risk of loss to be remote.

2. SHARES OF BENEFICIAL INTEREST

At December 31, 2013, there were an unlimited number of shares authorized (without par value). Transactions in the Funds’ shares were as follows:


	Franklin Templeton						Franklin Templeton
	Conservative Allocation Fund						Moderate Allocation Fund
	Shares				Amount		Shares				Amount
Class A Shares:
Year ended December 31, 2013
Shares sold	16,648,117		$	241,733,382			23,365,779		$	357,653,902
Shares issued in reinvestment of
distributions	3,237,446				46,660,415		5,438,812				83,418,945
Shares redeemed	(16,899,845	)			(245,214,173	)	(24,694,524	)			(377,381,187	)
Net increase (decrease)	2,985,718			$	43,179,624		4,110,067			$	63,691,660
Year ended December 31, 2012
Shares sold	16,160,456		$	223,700,018			25,983,423		$	372,196,415
Shares issued in reinvestment of
distributions	1,268,562				17,646,709		2,424,428				34,953,729
Shares redeemed	(15,345,153	)			(212,727,478	)	(25,484,461	)			(366,172,595	)
Net increase (decrease)	2,083,865			$	28,619,249		2,923,390			$	40,977,549
Class B Shares:
Year ended December 31, 2013^a
Shares redeemed	(63,132	)		$	(904,216	)	(110,413	)		$	(1,651,045	)
Net increase (decrease)	(63,132	)		$	(904,216	)	(110,413	)		$	(1,651,045	)
Year ended December 31, 2012
Shares sold	5,982			$	82,344		36,373			$	521,496
Shares issued in reinvestment of
distributions	1,114				15,472		2,093				30,222
Shares redeemed	(318,452	)			(4,397,710	)	(647,569	)			(9,248,403	)
Net increase (decrease)	(311,356	)		$	(4,299,894	)	(609,103	)		$	(8,696,685	)

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Notes to Financial Statements (continued)


2. SHARES OF BENEFICIAL INTEREST (continued)

	Franklin Templeton						Franklin Templeton
	Conservative Allocation Fund						Moderate Allocation Fund
	Shares				Amount		Shares				Amount
Class C Shares:
Year ended December 31, 2013
Shares sold	10,404,962		$	148,391,933			9,545,102		$	142,928,615
Shares issued in reinvestment of
distributions	1,710,659				24,249,619		2,064,905				30,964,427
Shares redeemed	(8,359,797	)			(119,199,547	)	(8,545,817	)			(128,081,908	)
Net increase (decrease)	3,755,824			$	53,442,005		3,064,190			$	45,811,134
Year ended December 31, 2012
Shares sold	7,111,935			$	96,802,198		9,337,192		$	130,576,558
Shares issued in reinvestment of
distributions	503,707				6,908,819		721,400				10,196,369
Shares redeemed	(7,439,133	)			(101,233,686	)	(9,044,554	)			(126,647,293	)
Net increase (decrease)	176,509			$	2,477,331		1,014,038			$	14,125,634
Class R Shares:
Year ended December 31, 2013
Shares sold	2,549,498			$	36,820,589		3,346,085			$	51,038,389
Shares issued in reinvestment of
distributions	617,855				8,869,826		936,657				14,306,271
Shares redeemed	(4,473,929	)			(64,641,734	)	(4,956,052	)			(75,712,148	)
Net increase (decrease)	(1,306,576	)		$	(18,951,319	)	(673,310	)		$	(10,367,488	)
Year ended December 31, 2012
Shares sold	4,392,390			$	60,445,700		5,967,428			$	84,831,929
Shares issued in reinvestment of
distributions	262,159				3,635,818		421,989				6,066,941
Shares redeemed	(3,180,910	)			(44,010,081	)	(5,722,387	)			(81,850,698	)
Net increase (decrease)	1,473,639			$	20,071,437		667,030			$	9,048,172
Class R6 Shares:
Year ended December 31, 2013^b
Shares sold	2,487			$	36,994		16,103			$	256,949
Shares issued on reinvestment of
distributions	76				1,113		490				7,723
Shares redeemed	(1	)			(12	)	(569	)			(9,073	)
Net increase (decrease)	2,562			$	38,095		16,024			$	255,599
Advisor Class Shares:
Year ended December 31, 2013
Shares sold	2,194,831			$	31,959,893		3,813,226			$	58,650,719
Shares issued in reinvestment of
distributions	388,262				5,596,792		532,699				8,178,878
Shares redeemed	(1,462,820	)			(21,209,247	)	(2,694,741	)			(41,198,292	)
Net increase (decrease)	1,120,273			$	16,347,438		1,651,184			$	25,631,305
Year ended December 31, 2012
Shares sold	1,348,239			$	18,667,747		4,556,914			$	65,724,093
Shares issued in reinvestment of
distributions	153,878				2,138,266		201,251				2,903,150
Shares redeemed	(1,460,687	)			(20,332,383	)	(2,062,589	)			(29,684,940	)
Net increase (decrease)	41,430			$	473,630		2,695,576			$	38,942,303

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Notes to Financial Statements (continued)


2. SHARES OF BENEFICIAL INTEREST (continued)

	Franklin Templeton
	Growth Allocation Fund
	Shares				Amount
Class A Shares:
Year ended December 31, 2013
Shares sold	10,809,201		$	185,467,878
Shares issued in reinvestment of distributions	1,638,582				28,875,048
Shares redeemed	(9,615,479	)			(164,383,450	)
Net increase (decrease)	2,832,304			$	49,959,476
Year ended December 31, 2012
Shares sold	11,182,793		$	171,827,261
Shares issued in reinvestment of distributions	625,859				9,793,870
Shares redeemed	(9,506,199	)			(146,333,749	)
Net increase (decrease)	2,302,453			$	35,287,382
Class B Shares:
Year ended December 31, 2013^a
Shares redeemed	(40,287	)			(652,170	)
Net increase (decrease)	(40,287	)		$	(652,170	)
Year ended December 31, 2012
Shares sold	6,729			$	100,871
Shares issued in reinvestment of distributions	675				10,436
Shares redeemed	(286,344	)			(4,307,106	)
Net increase (decrease)	(278,940	)		$	(4,195,799	)
Class C Shares:
Year ended December 31, 2013
Shares sold	3,998,222			$	66,960,234
Shares issued in reinvestment of distributions	532,128				9,100,139
Shares redeemed	(2,915,582	)			(48,762,512	)
Net increase (decrease)	1,614,768			$	27,297,861
Year ended December 31, 2012
Shares sold	3,564,030			$	53,559,955
Shares issued in reinvestment of distributions	126,835				1,946,906
Shares redeemed	(3,394,737	)			(51,066,210	)
Net increase (decrease)	296,128			$	4,440,651
Class R Shares:
Year ended December 31, 2013
Shares sold	2,061,293			$	35,052,772
Shares issued in reinvestment of distributions	380,554				6,597,953
Shares redeemed	(2,726,900	)			(46,369,800	)
Net increase (decrease)	(285,053	)		$	(4,719,075	)
Year ended December 31, 2012
Shares sold	3,813,222			$	57,301,873
Shares issued in reinvestment of distributions	141,537				2,190,774
Shares redeemed	(3,327,823	)			(50,704,512	)
Net increase (decrease)	626,936			$	8,788,135

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Notes to Financial Statements (continued)


2. SHARES OF BENEFICIAL INTEREST (continued)

	Franklin Templeton
	Growth Allocation Fund
	Shares			Amount
Class R6 Shares:
Year ended December 31, 2013^b
Shares sold	2,563		$	46,761
Shares issued on reinvestment of distributions	55			1,008
Shares redeemed	(317	)		(5,830	)
Net increase (decrease)	2,301		$	41,939
Advisor Class Shares:
Year ended December 31, 2013
Shares sold	1,592,462		$	27,354,738
Shares issued in reinvestment of distributions	161,096			2,853,350
Shares redeemed	(1,219,870	)		(20,944,814	)
Net increase (decrease)	533,688		$	9,263,274
Year ended December 31, 2012
Shares sold	1,180,265		$	18,209,087
Shares issued in reinvestment of distributions	61,822			969,906
Shares redeemed	(1,082,490	)		(16,904,787	)
Net increase (decrease)	159,597		$	2,274,206
^aEffective March 1, 2013, all Class B shares were converted to Class A.
^bFor the period May 1, 2013 (effective date) to December 31, 2013.

3. TRANSACTIONS WITH AFFILIATES

Franklin Resources, Inc. is the holding company for various subsidiaries that together are referred to as Franklin Templeton Investments. Certain officers and trustees of the Funds are also officers and/or directors/trustees of certain of the Underlying Funds and of the following subsidiaries:


Subsidiary	Affiliation
Franklin Advisers, Inc. (Advisers)	Investment manager
Franklin Templeton Services, LLC (FT Services)	Administrative manager
Franklin Templeton Distributors, Inc. (Distributors)	Principal underwriter
Franklin Templeton Investor Services, LLC (Investor Services)	Transfer agent

a. Asset Allocation Fees

The Funds pay an asset allocation fee to Advisers of 0.25% per year of the average daily net assets of each of the Funds for investment advisory services, consisting principally of determining the allocation of assets of the Funds among the designated Underlying Funds and ETFs.

b. Administrative Fees

FT Services, under terms of an agreement, provides administrative services to the Funds and is not paid by the Funds for the services.

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Notes to Financial Statements (continued)

3.	TRANSACTIONS WITH AFFILIATES (continued)
c.	Distribution Fees

The Board has adopted distribution plans for each share class, with the exception of Class R6 and Advisor Class shares, pursuant to Rule 12b-1 under the 1940 Act. Distribution fees are not charged on shares held by affiliates. Under the Funds’ Class A reimbursement distribution plans, the Funds reimburse Distributors for costs incurred in connection with the servicing, sale and distribution of each fund’s shares up to the maximum annual plan rate. Under the Class A reimbursement distribution plans, costs exceeding the maximum for the current plan year cannot be reimbursed in subsequent periods. In addition, under the Funds’ Class B, C and R compensation distribution plans, the Funds pay Distributors for costs incurred in connection with the servicing, sale and distribution of each fund’s shares up to the maximum annual plan rate for each class. The plan year, for purposes of monitoring compliance with the maximum annual plan rates, is February 1 through January 31 for each fund.

The maximum annual plan rates, based on the average daily net assets, for each class, are as follows:


Class A	0.25	%
Class B	1.00	%
Class C	1.00	%
Class R	0.50	%

d. Sales Charges/Underwriting Agreements

Front-end sales charges and contingent deferred sales charges (CDSC) do not represent expenses of the Funds. These charges are deducted from the proceeds of sales of fund shares prior to investment or from redemption proceeds prior to remittance, as applicable. Distributors has advised the Funds of the following commission transactions related to the sales and redemptions of the Funds’ shares for the year:


		Franklin		Franklin		Franklin
		Templeton		Templeton		Templeton
		Conservative		Moderate		Growth
		Allocation Fund		Allocation Fund		Allocation Fund
Sales charges retained net of commissions paid to
unaffiliated broker/dealers	$	552,947	$	1,149,465	$	685,911
CDSC retained	$	51,268	$	60,636	$	33,080

e. Transfer Agent Fees

Each class of shares, except for Class R6, pays transfer agent fees to Investor Services for its performance of shareholder servicing obligations and reimburses Investor Services for out of pocket expenses incurred, including shareholding servicing fees paid to third parties. These fees are allocated daily based upon their relative proportion of such classes’ aggregate net assets. Class R6 pays Investor Services transfer agent fees specific to that class.

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Notes to Financial Statements (continued)

3.	TRANSACTIONS WITH AFFILIATES (continued)
e.	Transfer Agent Fees (continued)

For the year ended December 31, 2013, the Funds paid transfer agent fees as noted in the Statements of Operations of which the following amounts were retained by Investor Services:


		Franklin		Franklin		Franklin
		Templeton		Templeton		Templeton
		Conservative		Moderate		Growth
		Allocation Fund		Allocation Fund		Allocation Fund
Transfer agent fees	$	727,051	$	1,438,575	$	956,913

f. Waiver and Expense Reimbursements

Effective May 1, 2013, Advisers has contractually agreed in advance to waive or limit its fees and to assume as its own expense certain expenses otherwise payable by the Funds so that the expenses (excluding distribution fees, and acquired fund fees and expenses) for each class of the Funds do not exceed the following (other than certain non-routine expenses or costs, including those relating to litigation, indemnification, reorganizations, and liquidations) until April 30, 2014:


	Franklin		Franklin		Franklin
	Templeton		Templeton		Templeton
	Conservative		Moderate		Growth
	Allocation Fund		Allocation Fund		Allocation Fund
Class A, Class C, Class R & Advisor Class	0.40	%	0.40	%	0.40	%
Class R6	0.28	%	0.26	%	0.22	%

Prior to May 1, 2013, expenses were limited to 0.25%.

4. EXPENSE OFFSET ARRANGEMENT

The Funds have entered into an arrangement with their custodian whereby credits realized as a result of uninvested cash balances are used to reduce a portion of the Funds’ custodian expenses. During the year ended December 31, 2013, there were no credits earned.

5. INCOME TAXES

For tax purposes, the Funds may elect to defer any portion of a post-October capital loss to the first day of the following fiscal year. At December 31, 2013, the Franklin Templeton Moderate Allocation Fund deferred post-October capital losses of $1,659,545.

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Notes to Financial Statements (continued)

5. INCOME TAXES (continued)

The tax character of distributions paid during the years ended December 31, 2013 and 2012, was as follows:


		Franklin Templeton				Franklin Templeton
		Conservative Allocation Fund				Moderate Allocation Fund
		2013		2012		2013		2012
Distributions paid from:
Ordinary income	$	31,781,178	$	28,623,123	$	46,183,237	$	48,970,690
Long term capital gain		56,989,027		3,151,563		94,678,015		6,993,938
	$	88,770,205	$	31,774,686	$	140,861,252	$	55,964,628

		Franklin Templeton
		Growth Allocation Fund
		2013		2012
Distributions paid from:
Ordinary income	$	16,113,045	$	15,363,069
Long term capital gain		32,564,705		—
	$	48,677,750	$	15,363,069

At December 31, 2013, the cost of investments, net unrealized appreciation (depreciation), undistributed ordinary income and undistributed long term capital gains for income tax purposes were as follows:


		Franklin			Franklin			Franklin
		Templeton			Templeton			Templeton
		Conservative			Moderate			Growth
		Allocation Fund			Allocation Fund			Allocation Fund
Cost of investments	$	1,484,437,615		$	2,348,651,919		$	1,077,002,014

Unrealized appreciation	$	208,086,876		$	467,439,879		$	323,007,540
Unrealized depreciation		(17,824,677	)		(23,403,166	)		(3,870,214	)
Net unrealized appreciation (depreciation)	$	190,262,199		$	444,036,713		$	319,137,326

Undistributed ordinary income	$	510,717		$	289,882		$	458,782
Undistributed long term capital gains		16,935,047			38,313,768			23,876,443
Distributable earnings	$	17,445,764		$	38,603,650		$	24,335,225

Differences between income and/or capital gains as determined on a book basis and a tax basis are primarily due to differing treatments of short term capital gains distributions from Underlying Funds and ETFs and wash sales.

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Notes to Financial Statements (continued)

6. INVESTMENT TRANSACTIONS

Purchases and sales of Underlying Funds and ETFs (excluding short term securities) for the year ended December 31, 2013, were as follows:


		Franklin		Franklin		Franklin
		Templeton		Templeton		Templeton
		Conservative		Moderate		Growth
		Allocation Fund		Allocation Fund		Allocation Fund
Purchases	$	1,187,743,953	$	1,393,897,392	$	455,261,787
Sales	$	871,789,332	$	1,165,214,525	$	371,049,487

7. INVESTMENTS IN UNDERLYING FUNDS

The Funds invest primarily in the Underlying Funds which are managed by Advisers (or by an affiliate of Advisers). The Funds do not invest in the Underlying Funds for the purpose of exercising a controlling influence over the management or policies. Asset allocation fees paid by the Funds are reduced on assets invested in the Institutional Fiduciary Trust Money Market Portfolio (Sweep Money Fund) in an amount not to exceed the management and administrative fees paid by the Sweep Money Fund.

Investments in Underlying Funds for the year ended December 31, 2013, were as follows:


												% of
												Underlying
	Number of			Number of								Fund Shares
	Shares Held			Shares		Value at				Realized		Outstanding
	at Beginning	Gross	Gross	Held at End		End of		Investment		Capital		Held at End
Underlying Funds	of Year^a	Additions	Reductions	of Year		Year		Income		Gain (Loss)		of Year
Franklin Templeton Conservative
Allocation Fund
Franklin Biotechnology Discovery Fund,
Class R6	—	72,057	1,579	70,478	$	9,351,729	$	—	$	587,652		0.76	%
Franklin DynaTech Fund,
Class R6	1,271,884	333,079	62,676	1,542,287		69,819,324		—		2,798,765	^b	3.42	%
Franklin Flex Cap Growth Fund,
Class R6	612,618	96,236	54,738	654,116		37,258,445		—		5,484,773	^b	1.06	%
Franklin Gold and Precious Metals
Fund, Advisor Class	403,260	—	403,260	—		—^c		—		2,322,379	^b	—
Franklin Growth Fund, Class R6	2,785,302	53,032	410,472	2,427,862		158,320,900		1,389,200		2,163,076		1.63	%
Franklin Growth Opportunities
Fund, Class R6	761,790	105,927	35,563	832,154		25,763,502		—		629,858	^b	2.90	%
Franklin High Income Fund,
Advisor Class	11,820,613	2,051,950	13,872,563	—		—^c		289,264		1,851,480	^b	—
Franklin International Growth
Fund, Class R6	—	491,628	80,336	411,292		4,664,049		20,551		13,164	^b	1.60	%
Franklin International Small Cap
Growth Fund, Class R6	2,033,171	258,856	388,965	1,903,062		42,971,131		363,353		887,057		2.43	%

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Notes to Financial Statements (continued)


7. INVESTMENTS IN UNDERLYING FUNDS (continued)

												% of
												Underlying
	Number of			Number of								Fund Shares
	Shares Held			Shares		Value at				Realized		Outstanding
	at Beginning	Gross	Gross	Held at End		End of		Investment		Capital		Held at End
Underlying Funds	of Year^a	Additions	Reductions	of Year		Year		Income		Gain (Loss)		of Year
Franklin Templeton Conservative
Allocation Fund (continued)
Franklin Limited Maturity U.S.
Government Securities Fund,
Class R6	—	3,221,723	3,221,723	—	$	—^c	$	519,329	$	(503,761	)	—
Franklin Low Duration Total
Return Fund, Class R6	—	16,065,074	—	16,065,074		163,060,503		748,350		—		—^d
Franklin MicroCap Value Fund,
Class R6	540,877	21,156	280,850	281,183		11,365,422		46,642		2,091,648	^b	1.99	%
Franklin Pelagos Commodities
Strategy Fund	2,355,547	1,831,261	—	4,186,808		37,974,346		—		—		37.48	%
Franklin Pelagos Managed
Futures Strategy Fund	210,781	202,231	—	413,012		3,333,006		—		—		28.14	%
Franklin Real Estate Securities
Fund, Class R6	944,532	30,150	40,909	933,773		16,023,538		312,055		(4,939	)^b	3.71	%
Franklin Rising Dividends Fund,
Class R6	2,280,514	55,182	94,014	2,241,682		108,519,843		1,279,897		542,100		0.72	%
Franklin Small Cap Growth Fund,
Class R6	—	348,347	14,800	333,547		6,520,837		—		234,132	^b	0.49	%
Franklin Strategic Income Fund,
Class R6	—	8,896,562	—	8,896,562		93,147,003		1,855,189		843,869	^b	1.10	%
Franklin Templeton Emerging
Market Debt Opportunities
Fund	3,548,095	785,347	50,706	4,282,736		50,065,181		2,338,783		128,129	^b	8.39	%
Franklin Total Return Fund,
Class R6	11,915,656	5,764,024	17,679,680	—		—^c		4,547,931		(442,523	)	—
Franklin U.S. Government
Securities Fund, Class R6	25,096,056	13,389,255	8,800,916	29,684,395		192,058,036		8,157,951		(2,493,965	)^b	2.58	%
Franklin Utilities Fund,
Class R6	2,793,829	142,639	119,465	2,817,003		42,339,559		1,454,388		132,671	^b	0.85	%
Institutional Fiduciary Trust
Money Market Portfolio	292,053,115	197,665,123	462,115,283	27,602,955		27,602,955		—		—		0.14	%
Mutual European Fund,
Class R6	2,114,849	856,175	408,223	2,562,801		63,454,952		1,171,747		4,276,652		2.28	%
Templeton China World Fund,
Class R6	427,738	29,082	72,094	384,726		13,803,953		259,912		1,005,652		1.58	%
Templeton Foreign Fund,
Class R6	9,868,178	529,881	2,302,317	8,095,742		66,385,081		1,134,237		3,652,692		0.91	%
Templeton Frontier Markets Fund,
Class R6	1,569,088	56,406	276,412	1,349,082		24,661,210		493,560		682,460	^b	1.63	%
Templeton Global Bond Fund,
Advisor Class	13,069,762	7,999,140	21,068,902	—		—^c		1,669,489		24,039,195		—
Templeton Global Total Return
Fund, Class R6	—	21,651,045	260,902	21,390,143		288,553,023		11,447,761		(243,767	)	3.49	%
Total					$	1,557,017,528	$	39,499,589	$	50,678,449

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Notes to Financial Statements (continued)


7. INVESTMENTS IN UNDERLYING FUNDS (continued)

												% of
												Underlying
	Number of			Number of								Fund Shares
	Shares Held			Shares		Value at				Realized		Outstanding
	at Beginning	Gross	Gross	Held at End		End of		Investment		Capital		Held at End
Underlying Funds	of Year^a	Additions	Reductions	of Year		Year		Income		Gain (Loss)		of Year
Franklin Templeton Moderate
Allocation Fund
Franklin Biotechnology Discovery
Fund, Class R6	—	163,236	1,075	162,161	$	21,517,179	$	—	$	1,344,441	^b	1.75	%
Franklin DynaTech Fund,
Class R6	2,594,971	643,226	64,228	3,173,969		143,685,571		—		5,612,062	^b	7.05	%
Franklin Flex Cap Growth Fund,
Class R6	1,448,594	211,855	101,023	1,559,426		88,824,923		—		12,769,272	^b	2.52	%
Franklin Gold and Precious Metals
Fund, Advisor Class	868,205	—	868,205	—		—^c		—		5,200,427		—
Franklin Growth Fund, Class R6	6,162,727	49,077	774,581	5,437,223		354,561,290		3,111,127		4,265,133		3.66	%
Franklin Growth Opportunities
Fund, Class R6	1,709,119	215,243	39,133	1,885,229		58,366,704		—		1,377,637	^b	6.57	%
Franklin High Income Fund,
Advisor Class	17,572,561	205,260	17,777,821	—		—^c		430,022		2,764,514		—
Franklin International Growth
Fund, Class R6	—	1,037,451	115,647	921,804		10,453,260		46,060		16,616		3.59	%
Franklin International Small Cap
Growth Fund, Class R6	4,302,421	500,818	579,560	4,223,679		95,370,671		806,429		1,456,166	^b	5.40	%
Franklin Limited Maturity U.S.
Government Securities Fund,
Class R6	—	4,019,890	4,019,890	—		—^c		653,642		(632,225	)	—
Franklin Low Duration Total
Return Fund, Class R6	—	19,675,358	—	19,675,358		199,704,888		916,530		—		9.79	%
Franklin MicroCap Value Fund,
Class R6	1,152,605	37,642	586,076	604,171		24,420,599		100,219		4,438,427	^b	4.27	%
Franklin Pelagos Commodities
Strategy Fund	4,872,521	377,729	41,188	5,209,062		47,246,194		—		(27,184	)	46.64	%
Franklin Pelagos Managed
Futures Strategy Fund	439,387	72,243	—	511,630		4,128,851		—		—		34.86	%
Franklin Real Estate Securities
Fund, Class R6	2,204,890	41,717	46,737	2,199,870		37,749,773		730,837		10,855		8.75	%
Franklin Rising Dividends Fund,
Class R6	4,898,880	58,381	101,241	4,856,020		235,079,920		2,772,562		660,050		1.55	%
Franklin Small Cap Growth Fund,
Class R6	—	734,276	9,460	724,816		14,170,156		—		482,037	^b	1.06	%
Franklin Strategic Income Fund,
Class R6	—	10,670,983	—	10,670,983		111,725,188		2,225,208		1,012,180	^b	1.32	%
Franklin Templeton Emerging
Market Debt Opportunities
Fund	5,320,004	634,410	761,134	5,193,280		60,709,438		2,836,026		34,362	^b	10.17	%
Franklin Total Return Fund,
Class R6	16,701,571	4,522,999	21,224,570	—		—^c		5,543,923		281,148		—
Franklin U.S. Government
Securities Fund, Class R6	36,475,547	9,046,234	10,343,289	35,178,492		227,604,840		9,655,361		(2,504,201	)	3.06	%

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Notes to Financial Statements (continued)


7. INVESTMENTS IN UNDERLYING FUNDS (continued)

												% of
												Underlying
	Number of			Number of								Fund Shares
	Shares Held			Shares		Value at				Realized		Outstanding
	at Beginning	Gross	Gross	Held at End		End of		Investment		Capital		Held at End
Underlying Funds	of Year^a	Additions	Reductions	of Year		Year		Income		Gain (Loss)		of Year
Franklin Templeton Moderate
Allocation Fund (continued)
Franklin Utilities Fund,
Class R6	6,808,619	259,944	144,174	6,924,389	$	104,073,567	$	3,553,920	$	321,600	^b	2.10	%
Institutional Fiduciary Trust
Money Market Portfolio	212,902,609	291,285,085	462,746,283	41,441,411		41,441,411		—		—		0.22	%
Mutual European Fund,
Class R6	4,858,140	1,486,536	696,167	5,648,509		139,857,073		2,592,378		8,833,920	^b	5.03	%
Templeton China World Fund,
Class R6	849,325	49,968	101,199	798,094		28,635,595		539,175		2,067,774	^b	3.27	%
Templeton Foreign Fund,
Class R6	20,986,465	960,663	3,943,122	18,004,006		147,632,853		2,522,415		6,429,683	^b	2.02	%
Templeton Frontier Markets Fund,
Class R6	3,671,761	95,512	451,518	3,315,755		60,611,999		1,213,066		1,306,583	^b	4.00	%
Templeton Global Bond Fund,
Advisor Class	19,641,605	5,681,187	25,322,792	—		—^c		2,002,299		34,044,730		—
Templeton Global Total Return
Fund, Class R6	—	25,067,740	—	25,067,740		338,163,815		13,384,701		—		4.09	%
Total					$	2,595,735,758	$	55,635,900	$	91,566,007
Franklin Templeton Growth
Allocation Fund
Franklin Biotechnology Discovery
Fund, Class R6	—	109,355	398	108,957	$	14,457,542	$	—	$	896,776	^b	1.17	%
Franklin DynaTech Fund,
Class R6	1,798,014	517,487	26,691	2,288,810		103,614,426		—		3,982,609	^b	5.08	%
Franklin Flex Cap Growth Fund,
Class R6	946,428	165,562	59,048	1,052,942		59,975,601		—		8,265,015	^b	1.70	%
Franklin Gold and Precious
Metals Fund, Advisor Class	553,693	—	553,693	—		—^c		—		6,628,908		—
Franklin Growth Fund, Class R6	3,947,614	146,362	495,062	3,598,914		234,685,152		2,059,263		2,086,358		2.42	%
Franklin Growth Opportunities
Fund, Class R6	1,254,464	203,492	16,852	1,441,104		44,616,569		—		1,029,040	^b	5.02	%
Franklin High Income Fund,
Advisor Class	2,682,171	31,330	2,713,501	—		—^c		65,636		409,821		—
Franklin International Growth
Fund, Class R6	—	688,877	8,946	679,931		7,710,422		33,974		(4,723	)	2.65	%
Franklin International Small Cap
Growth Fund, Class R6	2,820,910	436,292	39,102	3,218,100		72,664,701		614,433		639,734	^b	4.11	%
Franklin Limited Maturity U.S.
Government Securities Fund,
Class R6	—	607,233	607,233	—		—^c		89,581		(85,735	)	—
Franklin Low Duration Total
Return Fund, Class R6	—	3,219,778	—	3,219,778		32,680,746		149,986		—		1.60	%
Franklin MicroCap Value Fund,
Class R6	832,697	41,841	419,873	454,665		18,377,570		75,419		2,291,183	^b	3.21	%

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Notes to Financial Statements (continued)


7. INVESTMENTS IN UNDERLYING FUNDS (continued)

												% of
												Underlying
	Number of			Number of								Fund Shares
	Shares Held			Shares		Value at				Realized		Outstanding
	at Beginning	Gross	Gross	Held at End		End of		Investment		Capital		Held at End
Underlying Funds	of Year^a	Additions	Reductions	of Year		Year		Income		Gain (Loss)		of Year
Franklin Templeton Growth
Allocation Fund (continued)
Franklin Pelagos Commodities
Strategy Fund	3,453,477	54,700	2,337,589	1,170,588	$	10,617,231	$	—	$	(3,349,069	)	10.48	%
Franklin Pelagos Managed
Futures Strategy Fund	307,611	—	197,614	109,997		887,677		—		(381,136	)	7.50	%
Franklin Real Estate Securities
Fund, Class R6	1,536,830	80,084	19,483	1,597,431		27,411,911		522,945		(26,730	)	6.35	%
Franklin Rising Dividends Fund,
Class R6	3,262,908	145,482	40,791	3,367,599		163,025,467		1,922,743		85,736		1.08	%
Franklin Small Cap Growth Fund,
Class R6	—	486,484	5,454	481,030		9,404,141		—		312,242	^b	0.71	%
Franklin Strategic Income Fund,
Class R6	—	1,848,131	—	1,848,131		19,349,935		382,502		175,302	^b	0.23	%
Franklin Templeton Emerging
Market Debt Opportunities
Fund	1,276,536	106,882	518,020	865,398		10,116,502		472,590		(11,645	)^b	1.70	%
Franklin Total Return Fund,
Class R6	2,827,257	1,117,580	3,944,837	—		—^c		957,338		645,912		—
Franklin U.S. Government
Securities Fund, Class R6	6,674,053	2,408,359	2,900,057	6,182,355		39,999,836		1,712,863		(573,823	)	0.54	%
Franklin Utilities Fund,
Class R6	4,284,413	311,961	54,354	4,542,020		68,266,557		2,283,233		129,355	^b	1.38	%
Institutional Fiduciary Trust
Money Market Portfolio	41,941,349	220,732,626	235,581,637	27,092,338		27,092,338		—		—		0.14	%
Mutual European Fund,
Class R6	3,110,714	922,865	101,349	3,932,230		97,362,019		1,808,540		5,549,822	^b	3.50	%
Templeton China World Fund,
Class R6	563,919	56,128	7,297	612,750		21,985,482		413,961		908,837	^b	2.51	%
Templeton Foreign Fund,
Class R6	13,001,656	1,070,051	1,126,465	12,945,242		106,150,982		1,813,667		3,458,878	^b	1.46	%
Templeton Frontier Markets Fund,
Class R6	2,584,415	161,720	33,493	2,712,642		49,587,097		992,417		378,576	^b	3.27	%
Templeton Global Bond Fund,
Advisor Class	3,491,297	1,959,071	5,450,368	—		—^c		387,058		8,878,594		—
Templeton Global Total Return
Fund, Class R6	—	4,770,218	411,281	4,358,937		58,802,065		2,327,071		(61,692	)	0.71	%
Total					$	1,298,841,969	$	19,085,220	$	42,258,145

^aEffective May 1, 2013, the Underlying Fund’s shares were exchanged from Advisor Class to Class R6, if applicable. ^bIncludes realized gain distributions received. ^cAs of December 31, 2013, no longer held by the fund. ^dRounds to less than 0.01%.

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Notes to Financial Statements (continued)

8. SPECIAL SERVICING AGREEMENT

The Funds participated in a Special Servicing Agreement (SSA) with the Underlying Funds and certain service providers of the Funds and of the Underlying Funds. Under the SSA, each Underlying Fund may pay a portion of the Funds’ expenses (other than any asset allocation and distribution fees) to the extent such payments are less than the amount of the benefits realized or expected to be realized by the Underlying Fund (e.g., due to reduced costs associated with servicing accounts) from the investment in the Underlying Fund by the Funds. The amount of expenses borne by the Underlying Funds during the year ended December 31, 2013 is noted in the Statements of Operations. Effective May 1, 2013, the SSA was discontinued until further notice and approval by the Board.

9. CREDIT FACILITY

The Funds, together with other U.S. registered and foreign investment funds (collectively, Borrowers), managed by Franklin Templeton Investments, are borrowers in a joint syndicated senior unsecured credit facility totaling $1.5 billion (Global Credit Facility) which, after an extension of the original terms, matured on February 14, 2014. This Global Credit Facility provides a source of funds to the Borrowers for temporary and emergency purposes, including the ability to meet future unanticipated or unusually large redemption requests. Effective February 14, 2014, the Borrowers renewed the Global Credit Facility which matures on February 13, 2015.

Under the terms of the Global Credit Facility, the Funds shall, in addition to interest charged on any borrowings made by the Funds and other costs incurred by the Funds, pay their share of fees and expenses incurred in connection with the implementation and maintenance of the Global Credit Facility, based upon their relative share of the aggregate net assets of all of the Borrowers, including an annual commitment fee of 0.07% based upon the unused portion of the Global Credit Facility. These fees are reflected in other expenses on the Statements of Operations. During the year ended December 31, 2013, the Funds did not use the Global Credit Facility.

10. FAIR VALUE MEASUREMENTS

The Funds follow a fair value hierarchy that distinguishes between market data obtained from independent sources (observable inputs) and the Funds’ own market assumptions (unobservable inputs). These inputs are used in determining the value of the Funds’ financial instruments and are summarized in the following fair value hierarchy:

Level 1 – quoted prices in active markets for identical financial instruments
Level 2 – other significant observable inputs (including quoted prices for similar financial instruments, interest rates, prepayment speed, credit risk, etc.)
Level 3 – significant unobservable inputs (including the Funds’ own assumptions in determining the fair value of financial instruments)

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Notes to Financial Statements (continued)

10. FAIR VALUE MEASUREMENTS (continued)

The input levels are not necessarily an indication of the risk or liquidity associated with financial instruments at that level.

For movements between the levels within the fair value hierarchy, the Funds have adopted a policy of recognizing the transfers as of the date of the underlying event which caused the movement.

A summary of inputs used as of December 31, 2013, in valuing the Funds’ assets carried at fair value, is as follows:


		Level 1		Level 2		Level 3		Total
Franklin Templeton Conservative
Allocation Fund
Assets:
Investments in Securities:
Investments in Underlying Funds and
Exchange Traded Funds^a	$	1,605,789,507	$	41,307,352	$	—	$	1,647,096,859
Short Term Investments		27,602,955		—		—		27,602,955
Total Investments in Securities	$	1,633,392,462	$	41,307,352	$	—	$	1,674,699,814
Franklin Templeton Moderate
Allocation Fund
Assets:
Investments in Securities:
Investments in Underlying Funds and
Exchange Traded Funds^a	$	2,699,872,176	$	51,375,045	$	—	$	2,751,247,221
Short Term Investments		41,441,411		—		—		41,441,411
Total Investments in Securities	$	2,741,313,587	$	51,375,045	$	—	$	2,792,688,632
Franklin Templeton Growth
Allocation Fund
Assets:
Investments in Securities:
Investments in Underlying Funds and
Exchange Traded Funds^a	$	1,357,542,094	$	11,504,908	$	—	$	1,369,047,002
Short Term Investments		27,092,338		—		—		27,092,338
Total Investments in Securities	$	1,384,634,432	$	11,504,908	$	—	$	1,396,139,340

^aFor detailed Underlying Fund and ETF categories, see the accompanying Statements of Investments.

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Notes to Financial Statements (continued)

11. NEW ACCOUNTING PRONOUNCEMENTS

In June 2013, the Financial Accounting Standards Board issued Accounting Standards Update (ASU) No. 2013-08, Investment Companies (Topic 946): Amendments to the Scope, Measurement, and Disclosure Requirements. The ASU modifies the criteria used in defining an investment company under U.S. Generally Accepted Accounting Principles and also sets forth certain measurement and disclosure requirements. Under the ASU, an entity that is registered under the 1940 Act automatically qualifies as an investment company. The ASU is effective for interim and annual reporting periods beginning after December 15, 2013. Management has reviewed the requirements and believes the adoption of this ASU will not have a material impact on the financial statements.

12. SUBSEQUENT EVENTS

The Funds have evaluated subsequent events through the issuance of the financial statements and determined that no events have occurred that require disclosure other than those already disclosed in the financial statements.

ABBREVIATIONS

Selected Portfolio

ETF - Exchange Traded Fund

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Report of Independent Registered Public Accounting Firm

To the Board of Trustees and Shareholders of Franklin Templeton Fund Allocator Series

In our opinion, the accompanying statement of assets and liabilities, including the statement of investments, and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of Franklin Templeton Conservative Allocation Fund, Franklin Templeton Moderate Allocation Fund and Franklin Templeton Growth Allocation Fund (separate portfolios of Franklin Templeton Fund Allocator Series, hereafter referred to as the “Funds”) at December 31, 2013, the results of each of their operations for the year then ended, the changes in each of their net assets for each of the two years in the period then ended and the financial highlights for each of the periods presented, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as “financial statements”) are the responsibility of the Fund’s management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of securities at December 31, 2013 by correspondence with the custodian and transfer agent, provide a reasonable basis for our opinion.

PricewaterhouseCoopers LLP

San Francisco, California
February 14, 2014

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Tax Information (unaudited)

Under Section 852(b)(3)(C) of the Internal Revenue Code (Code), the Funds hereby report the maximum amount allowable but no less than the following amounts as long term capital gain dividends for the fiscal year ended December 31, 2013:


	Franklin		Franklin		Franklin
	Templeton		Templeton		Templeton
	Conservative		Moderate		Growth
	Allocation Fund		Allocation Fund		Allocation Fund
$	56,989,027	$	94,678,015	$	32,564,705

Under Section 871(k)(2)(C) of the Code, the Franklin Templeton Moderate Target Fund hereby reports the maximum amount allowable but no less than $469,264 as a short term capital gain dividend for purposes of the tax imposed under Section 871(a)(1)(A) of the Code for the fiscal year ended December 31, 2013.

Under Section 854(b)(1)(A) of the Code, the Funds hereby report the following percentage amounts of the ordinary income dividends as income qualifying for the dividends received deduction for the fiscal year ended December 31, 2013:


Franklin		Franklin		Franklin
Templeton		Templeton		Templeton
Conservative		Moderate		Growth
Allocation Fund		Allocation Fund		Allocation Fund
13.32	%	20.96	%	39.98	%

Under Section 854(b)(1)(B) of the Code, the Funds hereby report the maximum amount allowable but no less than the following amounts as qualified dividends for purposes of the maximum rate under Section 1(h)(11) of the Code for the fiscal year ended December 31, 2013:


	Franklin		Franklin		Franklin
	Templeton		Templeton		Templeton
	Conservative		Moderate		Growth
	Allocation Fund		Allocation Fund		Allocation Fund
$	8,710,328	$	19,783,301	$	13,757,374

Distributions, including qualified dividend income, paid during calendar year 2013 will be reported to shareholders on Form 1099-DIV by mid-February 2014. Shareholders are advised to check with their tax advisors for information on the treatment of these amounts on their individual income tax returns.

During the fiscal year ended December 31, 2013, the Funds, a qualified fund of funds under Section 852(g)(2) of Code, received an allocation of foreign taxes paid from one or more of its underlying funds. As shown in the table below, the Fund hereby reports to shareholders the foreign source income and foreign taxes paid by underlying funds, pursuant to Section 853 of the Code. This written statement will allow shareholders of record on December 27, 2013, to treat their proportionate share of foreign taxes paid by the underlying funds as having been paid directly by them. The shareholder shall consider these amounts as foreign taxes paid in the tax year in which they receive the Fund distribution.

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Tax Information (unaudited) (continued)

The following table provides a detailed analysis of foreign tax paid, foreign source income, and foreign qualified dividends as reported by the Funds, to Class A, Class C, Class R, Class R6 and Advisor Class shareholders of record.


		Foreign Tax		Foreign Source		Foreign Qualified
Class		Paid Per Share		Income Per Share		Dividends Per Share
Franklin Templeton Conservative Allocation Fund
Class A	$	0.0041	$	0.1369	$	0.0232
Class C	$	0.0041	$	0.1369	$	0.0232
Class R	$	0.0041	$	0.1369	$	0.0232
Class R6	$	0.0041	$	0.1369	$	0.0232
Advisor Class	$	0.0041	$	0.1369	$	0.0232
Franklin Templeton Moderate Allocation Fund
Class A	$	0.0051	$	0.1258	$	0.0331
Class C	$	0.0051	$	0.1258	$	0.0331
Class R	$	0.0051	$	0.1258	$	0.0331
Class R6	$	0.0051	$	0.1258	$	0.0331
Advisor Class	$	0.0051	$	0.1258	$	0.0331
Franklin Templeton Growth Allocation Fund
Class A	$	0.0075	$	0.1089	$	0.0550
Class C	$	0.0075	$	0.1089	$	0.0550
Class R	$	0.0075	$	0.1089	$	0.0550
Class R6	$	0.0075	$	0.1089	$	0.0550
Advisor Class	$	0.0075	$	0.1089	$	0.0550

Foreign Tax Paid Per Share (Column 1) is the amount per share available to you, as a tax credit (assuming you held your shares in the Fund for a minimum of 16 days during the 31-day period beginning 15 days before the ex-dividend date of the Funds’ distribution to which the foreign taxes relate), or, as a tax deduction.

Foreign Source Income Per Share (Column 2) is the amount per share of income dividends attributable to foreign securities held by the underlying funds, plus any foreign taxes withheld on these dividends. The amounts reported include foreign source qualified dividends that have not been adjusted for the rate differential applicable to such dividend income.¹

Foreign Qualified Dividends Per Share (Column 3) is the amount per share of foreign source qualified dividends, plus any foreign taxes withheld on these dividends. These amounts represent the portion of the Foreign Source Income reported to you in column 2 that were derived from qualified foreign securities held by the underlying funds.¹

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Franklin Templeton Fund Allocator Series

Tax Information (unaudited) (continued)

By mid-February 2014, shareholders will receive Form 1099-DIV which will include their share of taxes paid and foreign source income distributed during the calendar year 2013. The Foreign Source Income reported on Form 1099-DIV has not been adjusted for the rate differential on foreign source qualified dividend income. Shareholders are advised to check with their tax advisors for information on the treatment of these amounts on their 2013 individual income tax returns.

¹Qualified dividends are taxed at reduced long term capital gains tax rates. In determining the amount of foreign tax credit that may be applied against the U.S. tax liability of individuals receiving foreign source qualified dividends, adjustments may be required to the foreign tax credit limitation calculation to reflect the rate differential applicable to such dividend income. The rules however permit certain individuals to elect not to apply the rate differential adjustments for capital gains and/or dividends for any taxable year. Please consult your tax advisor and the instructions to Form 1116 for more information.

Annual Report | 81

Franklin Templeton Fund Allocator Series

Board Members and Officers

The name, year of birth and address of the officers and board members, as well as their affiliations, positions held with the Trust, principal occupations during at least the past five years and number of portfolios overseen in the Franklin Templeton Investments fund complex are shown below. Generally, each board member serves until that person’s successor is elected and qualified.


Independent Board Members

			Number of Portfolios in
Name, Year of Birth		Length of	Fund Complex Overseen	Other Directorships Held
and Address	Position	Time Served	by Board Member*	During at Least the Past 5 Years
Harris J. Ashton (1932)	Trustee	Since 1995	141	Bar-S Foods (meat packing company)
One Franklin Parkway				(1981-2010).
San Mateo, CA 94403-1906
Principal Occupation During at Least the Past 5 Years:
Director of various companies; and formerly, Director, RBC Holdings, Inc. (bank holding company) (until 2002); and President, Chief Executive
Officer and Chairman of the Board, General Host Corporation (nursery and craft centers) (until 1998).

Sam Ginn (1937)	Trustee	Since 2007	114	ICO Global Communications
One Franklin Parkway				(Holdings) Limited (satellite company)
San Mateo, CA 94403-1906				(2006-2010), Chevron Corporation
				(global energy company) (1989-2009),
				Hewlett-Packard Company (technology
				company) (1996-2002), Safeway, Inc.
				(grocery retailer) (1991-1998) and
				TransAmerica Corporation (insurance
				company) (1989-1999).
Principal Occupation During at Least the Past 5 Years:
Private investor; Chairman, First Responder Network Authority (FirstNet) (interoperable wireless broadband network) (2012); and formerly,
Chairman of the Board, Vodafone AirTouch, PLC (wireless company) (1999-2000); Chairman of the Board and Chief Executive Officer,
AirTouch Communications (cellular communications) (1993-1998) and Pacific Telesis Group (telephone holding company) (1988-1994).

Edith E. Holiday (1952)	Trustee	Since 1998	141	Hess Corporation (exploration and
One Franklin Parkway				refining of oil and gas), H.J. Heinz
San Mateo, CA 94403-1906				Company (processed foods and
				allied products) (1994-2013), RTI
				International Metals, Inc. (manu-
				facture and distribution of titanium),
				Canadian National Railway (railroad)
				and White Mountains Insurance
				Group, Ltd. (holding company).
Principal Occupation During at Least the Past 5 Years:
Director or Trustee of various companies and trusts; and formerly, Assistant to the President of the United States and Secretary of the Cabinet
(1990-1993); General Counsel to the United States Treasury Department (1989-1990); and Counselor to the Secretary and Assistant
Secretary for Public Affairs and Public Liaison – United States Treasury Department (1988-1989).

82 | Annual Report


			Number of Portfolios in
Name, Year of Birth		Length of	Fund Complex Overseen	Other Directorships Held
and Address	Position	Time Served	by Board Member*	During at Least the Past 5 Years
J. Michael Luttig (1954)	Trustee	Since 2009	141	Boeing Capital Corporation (aircraft
One Franklin Parkway				financing) (2006-2013).
San Mateo, CA 94403-1906
Principal Occupation During at Least the Past 5 Years:
Executive Vice President, General Counsel and member of Executive Council, The Boeing Company (aerospace company); and formerly,
Federal Appeals Court Judge, U.S. Court of Appeals for the Fourth Circuit (1991-2006).

Frank A. Olson (1932)	Trustee	Since 2007	141	Hess Corporation (exploration and
One Franklin Parkway				refining of oil and gas) (1998-2013).
San Mateo, CA 94403-1906
Principal Occupation During at Least the Past 5 Years:
Chairman Emeritus, The Hertz Corporation (car rental) (since 2000) (Chairman of the Board (1980-2000) and Chief Executive Officer
(1977-1999)); and formerly, Chairman of the Board, President and Chief Executive Officer, UAL Corporation (airlines) (until 1987).

Larry D. Thompson (1945)	Trustee	Since 2007	141	Cbeyond, Inc. (business communica-
One Franklin Parkway				tions provider) (2010-2012), The
San Mateo, CA 94403-1906				Southern Company (energy company)
				(2010-2012) and The Washington
				Post Company (education and media
				organization).
Principal Occupation During at Least the Past 5 Years:
Executive Vice President – Government Affairs, General Counsel and Corporate Secretary, PepsiCo, Inc. (consumer products) (July 2012); and
formerly, John A. Sibley Professor of Corporate and Business Law, University of Georgia School of Law (2011-2012); Senior Vice President –
Government Affairs, General Counsel and Secretary, PepsiCo, Inc. (2004-2011); Senior Fellow of The Brookings Institution (2003-2004);
Visiting Professor, University of Georgia School of Law (2004); and Deputy Attorney General, U.S. Department of Justice (2001-2003).

John B. Wilson (1959)	Lead	Trustee since	114	None
One Franklin Parkway	Independent	2006 and Lead
San Mateo, CA 94403-1906	Trustee	Independent
		Trustee since
		2008
Principal Occupation During at Least the Past 5 Years:
President, Staples Europe (office supplies) (2012); President and Founder, Hyannis Port Capital, Inc. (real estate and private equity
investing); serves on private and non-profit boards; and formerly, Chief Operating Officer and Executive Vice President, Gap, Inc. (retail)
(1996-2000); Chief Financial Officer and Executive Vice President – Finance and Strategy, Staples, Inc. (1992-1996); Senior Vice President –
Corporate Planning, Northwest Airlines, Inc. (airlines) (1990-1992); and Vice President and Partner, Bain & Company (consulting firm)
(1986-1990).

Annual Report | 83


Interested Board Members and Officers


			Number of Portfolios in
Name, Year of Birth		Length of	Fund Complex Overseen	Other Directorships Held
and Address	Position	Time Served	by Board Member*	During at Least the Past 5 Years

**Gregory E. Johnson (1961)	Trustee	Since 2007	152	None
One Franklin Parkway
San Mateo, CA 94403-1906
Principal Occupation During at Least the Past 5 Years:
Chairman of the Board, Member – Office of the Chairman, Director, President and Chief Executive Officer, Franklin Resources, Inc.; officer
and/or director or trustee, as the case may be, of some of the other subsidiaries of Franklin Resources, Inc. and of 44 of the investment
companies in Franklin Templeton Investments; and Chairman, Investment Company Institute.

**Rupert H. Johnson, Jr. (1940)	Chairman of	Chairman of the	141	None
One Franklin Parkway	the Board and	Board and Trustee
San Mateo, CA 94403-1906	Trustee	since June 2013
Principal Occupation During at Least the Past 5 Years:
Vice Chairman, Member – Office of the Chairman and Director, Franklin Resources, Inc.; Director, Franklin Advisers, Inc.; Senior Vice
President, Franklin Advisory Services, LLC; and officer and/or director or trustee, as the case may be, of some of the other subsidiaries of
Franklin Resources, Inc. and of 41 of the investment companies in Franklin Templeton Investments.

Alison E. Baur (1964)	Vice President	Since 2012	Not Applicable	Not Applicable
One Franklin Parkway
San Mateo, CA 94403-1906
Principal Occupation During at Least the Past 5 Years:
Deputy General Counsel, Franklin Templeton Investments; and officer of some of the other subsidiaries of Franklin Resources, Inc. and of 46
of the investment companies in Franklin Templeton Investments.

Laura F. Fergerson (1962)	Chief	Since 2009	Not Applicable	Not Applicable
One Franklin Parkway	Executive
San Mateo, CA 94403-1906	Officer –
	Finance and
	Administration
Principal Occupation During at Least the Past 5 Years:
Senior Vice President, Franklin Templeton Services, LLC; and officer of 46 of the investment companies in Franklin Templeton Investments.

Gaston Gardey (1967)	Treasurer,	Since 2009	Not Applicable	Not Applicable
One Franklin Parkway	Chief Financial
San Mateo, CA 94403-1906	Officer and
	Chief
	Accounting
	Officer
Principal Occupation During at Least the Past 5 Years:
Director, Fund Accounting, Franklin Templeton Investments; and officer of 27 of the investment companies in Franklin Templeton Investments.

84 | Annual Report


Name, Year of Birth		Length of	Fund Complex Overseen	Other Directorships Held
and Address	Position	Time Served	by Board Member*	During at Least the Past 5 Years
Aliya S. Gordon (1973)	Vice President	Since 2009	Not Applicable	Not Applicable
One Franklin Parkway
San Mateo, CA 94403-1906
Principal Occupation During at Least the Past 5 Years:
Senior Associate General Counsel, Franklin Templeton Investments; officer of 46 of the investment companies in Franklin Templeton
Investments; and formerly, Litigation Associate, Steefel, Levitt & Weiss, LLP (2000-2004).

Steven J. Gray (1955)	Vice President	Since 2009	Not Applicable	Not Applicable
One Franklin Parkway
San Mateo, CA 94403-1906
Principal Occupation During at Least the Past 5 Years:
Senior Associate General Counsel, Franklin Templeton Investments; Vice President, Franklin Templeton Distributors, Inc.; and officer of 46 of
the investment companies in Franklin Templeton Investments.

Selena L. Holmes (1965)	Vice President	Since 2012	Not Applicable	Not Applicable
100 Fountain Parkway	– AML
St. Petersburg, FL 33716-1205	Compliance
Principal Occupation During at Least the Past 5 Years:
Director, Global Compliance Monitoring; and officer of 46 of the investment companies in Franklin Templeton Investments.

Edward B. Jamieson (1948)	President and	Since 2010	Not Applicable	Not Applicable
One Franklin Parkway	Chief
San Mateo, CA 94403-1906	Executive
	Officer –
	Investment
	Management
Principal Occupation During at Least the Past 5 Years:
President, Chief Investment Officer and Director, Franklin Advisers, Inc.; Executive Vice President, Franklin Templeton Institutional, LLC;
and officer and/or trustee, as the case may be, of some of the other subsidiaries of Franklin Resources, Inc. and of 10 of the investment
companies in Franklin Templeton Investments.

Kimberly H. Novotny (1972)	Vice President	Since March 2013	Not Applicable	Not Applicable
300 S.E. 2nd Street
Fort Lauderdale, FL 33301-1923
Principal Occupation During at Least the Past 5 Years:
Associate General Counsel, Franklin Templeton Investments; Vice President and Secretary, Fiduciary Trust International of the South; Vice
President, Templeton Investment Counsel, LLC; Assistant Secretary, Franklin Resources, Inc.; and officer of 46 of the investment companies
in Franklin Templeton Investments.

Robert C. Rosselot (1960)	Chief	Since March 2013	Not Applicable	Not Applicable
300 S.E. 2nd Street	Compliance
Fort Lauderdale, FL 33301-1923	Officer
Principal Occupation During at Least the Past 5 Years:
Director, Global Compliance, Franklin Templeton Investments; officer of 46 of the investment companies in Franklin Templeton Investments;
and formerly, Senior Associate General Counsel, Franklin Templeton Investments (2007-2013); and Secretary and Vice President, Templeton
Group of Funds (2004-2013).

Annual Report | 85


			Number of Portfolios in
Name, Year of Birth		Length of	Fund Complex Overseen	Other Directorships Held
and Address	Position	Time Served	by Board Member*	During at Least the Past 5 Years
Karen L. Skidmore (1952)	Vice President	Since 2006	Not Applicable	Not Applicable
One Franklin Parkway	and Secretary
San Mateo, CA 94403-1906
Principal Occupation During at Least the Past 5 Years:
Senior Associate General Counsel, Franklin Templeton Investments; and officer of 46 of the investment companies in Franklin
Templeton Investments.

Craig S. Tyle (1960)	Vice President	Since 2005	Not Applicable	Not Applicable
One Franklin Parkway
San Mateo, CA 94403-1906
Principal Occupation During at Least the Past 5 Years:
General Counsel and Executive Vice President, Franklin Resources, Inc.; and officer of some of the other subsidiaries of Franklin Resources,
Inc. and of 46 of the investment companies in Franklin Templeton Investments.

Lori A. Weber (1964)	Vice President	Since 2011	Not Applicable	Not Applicable
300 S.E. 2nd Street
Fort Lauderdale, FL 33301-1923
Principal Occupation During at Least the Past 5 Years:
Senior Associate General Counsel, Franklin Templeton Investments; Assistant Secretary, Franklin Resources, Inc.; Vice President and
Secretary, Templeton Investment Counsel, LLC; Vice President, Fiduciary Trust International of the South; and officer of 46 of the investment
companies in Franklin Templeton Investments.

**Gregory E. Johnson is considered to be an interested person of the Fund under the federal securities laws due to his position as an officer and director of Franklin Resources, Inc. (Resources), which is the parent company of the Fund’s investment manager and distributor. Rupert H. Johnson, Jr. is considered to be an interested person of the Fund under the federal securities laws due to his position as officer and director and major shareholder of Resources.

Note 1: Rupert H. Johnson, Jr. is the uncle of Gregory E. Johnson.

Note 2: Officer information is current as of the date of this report. It is possible that after this date, information about officers may change. Note 3: Effective June 13, 2013, Charles B. Johnson ceased to be a trustee of the Fund.

The Sarbanes-Oxley Act of 2002 and Rules adopted by the Securities and Exchange Commission require the Fund to disclose whether the Fund’s Audit Committee includes least one member who is an audit committee financial expert within the meaning of such Act and Rules. The Fund’s Board has determined that there is at least one such financial expert on the Audit Committee and has designated John B. Wilson as its audit committee financial expert. The Board believes that Mr. Wilson qualifies as such an expert in view of his extensive business background and experience, including service as chief financial officer of Staples, Inc. from 1992 to 1996. Mr. Wilson has been a Member and Chairman of the Fund’s Audit Committee since 2006. As a result of such background and experience, the Board believes that Mr. Wilson has acquired an understanding of generally accepted accounting principles and financial statements, the general application of such principles in connection with the accounting estimates, accruals and reserves, and analyzing and evaluating financial statements that present a breadth and level of complexity of accounting issues generally comparable to those the Fund, as well as an understanding of internal controls and procedures for financial reporting and an understanding of audit committee functions. Mr. Wilson is an independent Board member as that term is defined under the relevant Securities and Exchange Commission Rules and Releases.

The Statement of Additional Information (SAI) includes additional information about the board members and is available, without charge, upon request. Shareholders may call (800) DIAL BEN/342-5236 to request the SAI.

86 | Annual Report

Franklin Templeton Fund Allocator Series

Shareholder Information

Proxy Voting Policies and Procedures

The Trust’s investment manager has established Proxy Voting Policies and Procedures (Policies) that the Trust uses to determine how to vote proxies relating to portfolio securities. Shareholders may view the Trust’s complete Policies online at franklintempleton.com. Alternatively, shareholders may request copies of the Policies free of charge by calling the Proxy Group collect at (954) 527-7678 or by sending a written request to: Franklin Templeton Companies, LLC, 300 S.E. 2nd Street, Fort Lauderdale, FL 33301, Attention: Proxy Group. Copies of the Trust’s proxy voting records are also made available online at franklintempleton.com and posted on the U.S. Securities and Exchange Commission’s website at sec.gov and reflect the most recent 12-month period ended June 30.

Quarterly Statement of Investments

The Trust files a complete statement of investments with the U.S. Securities and Exchange Commission for the first and third quarters for each fiscal year on Form N-Q. Shareholders may view the filed Form N-Q by visiting the Commission’s website at sec.gov. The filed form may also be viewed and copied at the Commission’s Public Reference Room in Washington, DC. Information regarding the operations of the Public Reference Room may be obtained by calling (800) SEC-0330.

Householding of Reports and Prospectuses

You will receive each Fund’s financial reports every six months as well as an annual updated summary prospectus (prospectus available upon request). To reduce Fund expenses, we try to identify related shareholders in a household and send only one copy of the financial reports and summary prospectus. This process, called “householding,” will continue indefinitely unless you instruct us otherwise. If you prefer not to have these documents householded, please call us at (800) 632-2301. At any time you may view current prospectuses/summary prospectuses and financial reports on our website. If you choose, you may receive these documents through electronic delivery.

Annual Report | 87

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	Contents


Shareholder Letter	1	Annual Report				Report of Independent
				Financial Highlights and		Registered Public
		Economic and Market Overview	3	Statements of Investments	23	Accounting Firm	47

		Franklin Templeton
		Corefolio Allocation Fund	5	Financial Statements	33	Tax Information	48

		Franklin Templeton Founding		Notes to
		Funds Allocation Fund	14	Financial Statements	37	Board Members and Officers	50

						Shareholder Information	55

| 1

Annual Report

Economic and Market Overview

Annual Report | 3

and a sharp depreciation in regional currencies against the U.S. dollar. Central banks in Brazil, India and Indonesia raised interest rates in the second half of 2013 as they sought to curb inflation.

4 | Annual Report

Franklin Templeton Corefolio Allocation Fund

Your Fund’s Goal and Main Investments: Franklin Templeton Corefolio Allocation Fund seeks capital appreciation through investments in a combination of Franklin Flex Cap Growth Fund, Franklin Growth Fund, Mutual Shares Fund and Templeton Growth Fund.

Performance Overview

Franklin Templeton Corefolio Allocation Fund – Class A delivered a +31.01% AAA cumulative total return for the 12 months under review. In comparison, its benchmarks, the Standard & Poor’s 500 Index (S&P 500^®), which is a broad measure of U.S. stock performance, generated a +32.39% total return, and the MSCI World Index, which tracks equity performance in global developed markets, produced a +27.36% total return.¹You can find the Fund’s long-term performance data in the Performance Summary beginning on page 7.

1. Source: © 2014 Morningstar. All Rights Reserved. The information contained herein: (1) is proprietary to Morningstar and/or its content providers; (2) may not be copied or distributed; and (3) is not warranted to be accurate, complete or timely. Neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of this information. The indexes are unmanaged and include reinvested distributions. One cannot invest directly in an index, and an index is not representative of the Fund’s portfolio.

The dollar value, number of shares or principal amount, and names of all portfolio holdings are listed in the Fund’s SOI, which begins on page 27.

Annual Report |

Investment Strategy

The Fund invests its assets allocated approximately 25% each in Franklin Flex Cap Growth Fund, Franklin Growth Fund, Mutual Shares Fund and Templeton Growth Fund. These underlying funds, in turn, invest primarily in U.S. and foreign equity securities and, to a lesser extent, fixed income and money market securities. As market conditions affect the underlying funds, we rebalance the Fund’s allocations to maintain the predetermined weightings in each underlying fund whenever the actual allocations exceed plus or minus 3% of the fixed allocation percentages.

Portfolio Review

The Fund’s performance can be attributed largely to maintaining a relatively static allocation among domestic and foreign equities, fixed income securities, and short-term investments and other net assets, and to the actual performance of the selected underlying funds.

During the period under review, Franklin Flex Cap Growth Fund – Class R6 outperformed the S&P 500, while Franklin Growth Fund – Class R6 and Mutual Shares Fund – Class R6 underperformed the index. Templeton Growth Fund – Class R6 outperformed the MSCI World Index.

Thank you for your continued participation in Franklin Templeton Corefolio Allocation Fund. We look forward to serving your future investment needs.

CFA^®is a trademark owned by CFA Institute.

6 | Annual Report

Performance Summary as of 12/31/13

Franklin Templeton Corefolio Allocation Fund


Price and Distribution Information
Class A (Symbol: FTCOX)				Change		12/31/13		12/31/12
Net Asset Value (NAV)			+$	4.04	$	17.61	$	13.57
Distributions (1/1/13–12/31/13)
Dividend Income	$	0.1629
Class C (Symbol: FTCLX)				Change		12/31/13		12/31/12
Net Asset Value (NAV)			+$	3.99	$	17.44	$	13.45
Distributions (1/1/13–12/31/13)
Dividend Income	$	0.0533
Class R (Symbol: n/a)				Change		12/31/13		12/31/12
Net Asset Value (NAV)			+$	4.04	$	17.60	$	13.56
Distributions (1/1/13–12/31/13)
Dividend Income	$	0.1258
Advisor Class (Symbol: FCAZX)				Change		12/31/13		12/31/12
Net Asset Value (NAV)			+$	4.05	$	17.64	$	13.59
Distributions (1/1/13–12/31/13)
Dividend Income	$	0.2096

Annual Report | 7

Performance Summary (continued)

Performance¹

Cumulative total return excludes sales charges. Average annual total return and value of $10,000 investment include maximum sales charges. Class A: 5.75% maximum initial sales charge; Class C: 1% contingent deferred sales charge in first year only; Class R/Advisor Class: no sales charges.


Class A				1-Year			5-Year			10-Year
Cumulative Total Return²			+	31.01	%	+	119.29	%	+	95.86	%
Average Annual Total Return³			+	23.46	%	+	15.62	%	+	6.32	%
Value of $10,000 Investment⁴			$	12,346		$	20,659		$	18,465
Total Annual Operating Expenses⁵	1.14	%
Class C				1-Year			5-Year			10-Year
Cumulative Total Return²			+	30.09	%	+	111.70	%	+	82.85	%
Average Annual Total Return³			+	29.09	%	+	16.18	%	+	6.22	%
Value of $10,000 Investment⁴			$	12,909		$	21,170		$	18,285
Total Annual Operating Expenses⁵	1.84	%
Class R				1-Year			5-Year			10-Year
Cumulative Total Return²			+	30.76	%	+	116.94	%	+	91.94	%
Average Annual Total Return³			+	30.76	%	+	16.75	%	+	6.74	%
Value of $10,000 Investment⁴			$	13,076		$	21,694		$	19,194
Total Annual Operating Expenses⁵	1.34	%
Advisor Class				1-Year			5-Year			10-Year
Cumulative Total Return²			+	31.38	%	+	122.32	%	+	101.71	%
Average Annual Total Return³			+	31.38	%	+	17.33	%	+	7.27	%
Value of $10,000 Investment⁴			$	13,138		$	22,232		$	20,171
Total Annual Operating Expenses⁵	0.84	%

8 | Annual Report

Performance Summary (continued)

Total Return Index Comparison for a Hypothetical $10,000 Investment¹

Annual Report | 9

10 | Annual Report

Performance Summary (continued)

Endnotes

All investments involve risks, including possible loss of principal. Because the Fund invests in underlying funds that may engage in a variety of investment strategies involving certain risks, this Fund of funds may be subject to those same risks. Stock prices fluctuate, sometimes rapidly and dramatically, due to factors affecting individual companies, particular industries or sectors, or general market conditions. Foreign investing carries additional risks such as currency and market volatility and political or social instability, risks that are heightened in developing countries. Smaller or relatively new or unseasoned companies can be particularly sensitive to changing economic conditions, and their prospects for growth are less certain than those of larger, more established companies. Value securities may not increase in price as anticipated or may decline further in value. These and other risks, including investments in specialized industry sectors such as the technology sector, which has been among the most volatile in the market, are discussed in the Fund’s prospectus.

Class C:

Class R:

These shares have higher annual fees and expenses than Class A shares.

Shares are available to certain eligible investors as described in the prospectus. These shares have higher annual fees and expenses than Class A shares.

Advisor Class:

Shares are available to certain eligible investors as described in the prospectus.

1. The Fund has a fee waiver associated with its investments in a Franklin Templeton money fund, contractually guaranteed through at least its current fiscal year end. Fund investment results reflect the fee waiver, to the extent applicable; without this reduction, the results would have been lower.

2. Cumulative total return represents the change in value of an investment over the periods indicated.

6. Source: © 2014 Morningstar. The S&P 500 is a market capitalization-weighted index of 500 stocks designed to measure total U.S. equity market performance. The MSCI World Index is a free float-adjusted, market capitalization-weighted index designed to measure equity market performance in global developed markets.

Annual Report | 11

Your Fund’s Expenses

Franklin Templeton Corefolio Allocation Fund

As a Fund shareholder, you can incur two types of costs:

Transaction costs, including sales charges (loads) on Fund purchases; and
Ongoing Fund costs, including management fees, distribution and service (12b-1) fees, and other Fund expenses. All mutual funds have ongoing costs, sometimes referred to as operating expenses.

Actual Fund Expenses

You can estimate the expenses you paid during the period by following these steps. Of course, your account value and expenses will differ from those in this illustration:

1.	Divide your account value by $1,000.
	If an account had an $8,600 value, then $8,600 ÷ $1,000 = 8.6.
2.	Multiply the result by the number under the heading “Expenses Paid During Period.”
	If Expenses Paid During Period were $7.50, then 8.6 x $7.50 = $64.50.

In this illustration, the estimated expenses paid this period are $64.50.

Hypothetical Example for Comparison with Other Funds

12 | Annual Report

Your Fund’s Expenses (continued)


		Beginning		Ending		Expenses Paid		Expenses Paid
		Account Value		Account Value		During Period*		During Period**
Class A		7/1/13		12/31/13		7/1/13 –12/31/13		7/1/13–12/31/13
Actual	$	1,000	$	1,187.40	$	2.59	$	5.84
Hypothetical (5% return before expenses)	$	1,000	$	1,022.84	$	2.40	$	5.40
Class C
Actual	$	1,000	$	1,182.90	$	6.55	$	9.79
Hypothetical (5% return before expenses)	$	1,000	$	1,019.21	$	6.06	$	9.05
Class R
Actual	$	1,000	$	1,185.80	$	3.80	$	7.05
Hypothetical (5% return before expenses)	$	1,000	$	1,021.73	$	3.52	$	6.51
Advisor Class
Actual	$	1,000	$	1,188.50	$	1.05	$	4.30
Hypothetical (5% return before expenses)	$	1,000	$	1,024.25	$	0.97	$	3.97

*Expenses are calculated using the most recent six-month expense ratio excluding expenses of the underlying funds, annualized for each class (A: 0.47%;
C: 1.19%; R: 0.69%; and Advisor: 0.19%), multiplied by the average account value over the period, multiplied by 184/365 to reflect the one-half year period.
**Expenses are calculated using the most recent six-month expense ratio including expenses of the underlying funds, annualized for each class (A: 1.06%;
C: 1.78%; R: 1.28%; and Advisor: 0.78%), multiplied by the average account value over the period, multiplied by 184/365 to reflect the one-half year period.

Annual Report | 13

Franklin Templeton

Founding Funds Allocation Fund

Your Fund’s Goals and Main Investments: Franklin Templeton Founding Funds Allocation Fund’s principal investment goal is capital appreciation, with a secondary goal of income. The Fund invests in an equally weighted combination of Franklin Income Fund, Mutual Shares Fund and Templeton Growth Fund.


Asset Allocation*
Franklin Templeton
Founding Funds Allocation Fund
Based on Total Net Assets as of 12/31/13

Domestic Equity	33.2%

Foreign Equity	33.2%

Domestic Hybrid	33.0%

Short-Term Investments & Other Net Assets	0.6%

*The asset allocation is based on the Statement of
Investments (SOI), which classifies each underlying
fund into a broad asset class.

This annual report for Franklin Templeton Founding Funds Allocation Fund covers the fiscal year ended December 31, 2013.

Performance Overview

Franklin Templeton Founding Funds Allocation Fund – Class A delivered a +23.64% cumulative total return for the 12 months under review. In comparison, its benchmarks, the Standard & Poor’s 500 Index (S&P 500), which is a broad measure of U.S. stock performance, generated a +32.39% total return, and the MSCI World Index, which tracks equity performance in global developed markets, produced a +27.36% total return.¹You can find the Fund’s long-term performance data in the Performance Summary beginning on page 16.

Investment Strategy

The Fund invests its assets in an equally weighted combination of Franklin Income Fund, Mutual Shares Fund and Templeton Growth Fund. These underlying funds, in turn, invest primarily in U.S. and foreign equity securities and, to a lesser extent, fixed income and money market securities. As market conditions affect the underlying funds, we rebalance the Fund’s allocations to maintain the predetermined equal weightings of approximately 33¹/₃% of total net assets in each underlying fund whenever the actual allocations exceed plus or minus 3% of the fixed allocation percentages.

The dollar value, number of shares or principal amount, and names of all portfolio holdings are listed in the Fund’s SOI, which begins on page 32.

14 | Annual Report

Portfolio Review

During the period under review, Franklin Income Fund – Class R6 and Mutual Shares Fund – Class R6 underperformed the S&P 500. Templeton Growth Fund – Class R6 outperformed the MSCI World Index.

Thank you for your continued participation in Franklin Templeton Founding Funds Allocation Fund. We look forward to serving your future investment needs.

Annual Report | 15

Performance Summary as of 12/31/13

Franklin Templeton Founding Funds Allocation Fund


Price and Distribution Information
Class A (Symbol: FFALX)				Change		12/31/13		12/31/12
Net Asset Value (NAV)			+$	2.23	$	13.37	$	11.14
Distributions (1/1/13–12/31/13)
Dividend Income	$	0.3808
Class C (Symbol: FFACX)				Change		12/31/13		12/31/12
Net Asset Value (NAV)			+$	2.19	$	13.18	$	10.99
Distributions (1/1/13–12/31/13)
Dividend Income	$	0.2880
Class R (Symbol: FFARX)				Change		12/31/13		12/31/12
Net Asset Value (NAV)			+$	2.23	$	13.39	$	11.16
Distributions (1/1/13–12/31/13)
Dividend Income	$	0.3481
Advisor Class (Symbol: FFAAX)				Change		12/31/13		12/31/12
Net Asset Value (NAV)			+$	2.24	$	13.44	$	11.20
Distributions (1/1/13–12/31/13)
Dividend Income	$	0.4142

16 | Annual Report

Performance Summary (continued)

Performance¹


Class A				1-Year			5-Year			10-Year
Cumulative Total Return²			+	23.64	%	+	105.20	%	+	90.08	%
Average Annual Total Return³			+	16.53	%	+	14.10	%	+	6.00	%
Value of $10,000 Investment⁴			$	11,653		$	19,335		$	17,908
Total Annual Operating Expenses⁵	1.05	%
Class C				1-Year			5-Year			10-Year
Cumulative Total Return²			+	22.69	%	+	97.53	%	+	77.24	%
Average Annual Total Return³			+	21.69	%	+	14.58	%	+	5.89	%
Value of $10,000 Investment⁴			$	12,169		$	19,753		$	17,724
Total Annual Operating Expenses⁵	1.80	%
Class R				1-Year			5-Year			10-Year
Cumulative Total Return²			+	23.28	%	+	102.59	%	+	86.10	%
Average Annual Total Return³			+	23.28	%	+	15.17	%	+	6.41	%
Value of $10,000 Investment⁴			$	12,328		$	20,259		$	18,610
Total Annual Operating Expenses⁵	1.30	%
Advisor Class				1-Year			5-Year			10-Year
Cumulative Total Return²			+	23.93	%	+	107.69	%	+	95.76	%
Average Annual Total Return³			+	23.93	%	+	15.74	%	+	6.95	%
Value of $10,000 Investment⁴			$	12,393		$	20,769		$	19,576
Total Annual Operating Expenses⁵	0.80	%

Annual Report | 17

Performance Summary (continued)

Total Return Index Comparison for a Hypothetical $10,000 Investment¹

18 | Annual Report

Annual Report | 19

Performance Summary (continued)

Endnotes

All investments involve risks, including possible loss of principal. Because the Fund invests in underlying funds that may engage in a variety of investment strategies involving certain risks, the Fund may be subject to these same risks. Stock prices fluctuate, sometimes rapidly and dramatically, due to factors affecting individual companies, particular industries or sectors, or general market conditions. Bonds are affected by changes in interest rates and the creditworthiness of their issuers. Bond prices generally move in the opposite direction of interest rates. Thus, as the prices of bonds adjust to a rise in interest rates, the Fund’s share price may decline. Higher yielding, lower rated corporate bonds entail a greater degree of credit risk compared to investment-grade securities. Foreign investing carries additional risks such as currency and market volatility and political or social instability, risks that are heightened in developing countries. Value securities may not increase in price as anticipated or may decline further in value. The Fund’s prospectus also includes a description of the main investment risks.

Class C:

Class R:

These shares have higher annual fees and expenses than Class A shares.

Shares are available to certain eligible investors as described in the prospectus. These shares have higher annual fees and expenses than Class A shares.

Advisor Class:

Shares are available to certain eligible investors as described in the prospectus.

2. Cumulative total return represents the change in value of an investment over the periods indicated.

20 | Annual Report

Your Fund’s Expenses

Franklin Templeton Founding Funds Allocation Fund

As a Fund shareholder, you can incur two types of costs:

Transaction costs, including sales charges (loads) on Fund purchases; and
Ongoing Fund costs, including management fees, distribution and service (12b-1) fees, and other Fund expenses. All mutual funds have ongoing costs, sometimes referred to as operating expenses.

Actual Fund Expenses

You can estimate the expenses you paid during the period by following these steps. Of course, your account value and expenses will differ from those in this illustration:

1.	Divide your account value by $1,000.
	If an account had an $8,600 value, then $8,600 ÷ $1,000 = 8.6.
2.	Multiply the result by the number under the heading “Expenses Paid During Period.”
	If Expenses Paid During Period were $7.50, then 8.6 x $7.50 = $64.50.

In this illustration, the estimated expenses paid this period are $64.50.

Hypothetical Example for Comparison with Other Funds

Annual Report | 21

Your Fund’s Expenses (continued)


		Beginning		Ending		Expenses Paid		Expenses Paid
		Account Value		Account Value		During Period*		During Period**
Class A		7/1/13		12/31/13		7/1/13 –12/31/13		7/1/13–12/31/13
Actual	$	1,000	$	1,141.10	$	2.21	$	5.40
Hypothetical (5% return before expenses)	$	1,000	$	1,023.14	$	2.09	$	5.09
Class C
Actual	$	1,000	$	1,137.20	$	6.25	$	9.43
Hypothetical (5% return before expenses)	$	1,000	$	1,019.36	$	5.90	$	8.89
Class R
Actual	$	1,000	$	1,139.40	$	3.56	$	6.74
Hypothetical (5% return before expenses)	$	1,000	$	1,021.88	$	3.36	$	6.36
Advisor Class
Actual	$	1,000	$	1,142.80	$	0.86	$	4.05
Hypothetical (5% return before expenses)	$	1,000	$	1,024.40	$	0.82	$	3.82

*Expenses are calculated using the most recent six-month expense ratio excluding expenses of the underlying funds, annualized for each class (A: 0.41%; C: 1.16%; R: 0.66%; and Advisor: 0.16%), multiplied by the average account value over the period, multiplied by 184/365 to reflect the one-half year period.

**Expenses are calculated using the most recent six-month expense ratio including expenses of the underlying funds, annualized for each class (A: 1.00%; C: 1.75%; R: 1.25%; and Advisor: 0.75%), multiplied by the average account value over the period, multiplied by 184/365 to reflect the one-half year period.

22 | Annual Report

Franklin Templeton Fund Allocator Series

Financial Highlights


Franklin Templeton Corefolio Allocation Fund
					Year Ended December 31,
Class A		2013			2012			2011			2010			2009
Per share operating performance
(for a share outstanding throughout the year)
Net asset value, beginning of year	$	13.57		$	11.93		$	12.41		$	11.08		$	8.46
Income from investment operations^a:
Net investment income^b,c		0.11			0.11			0.11			0.15			0.12
Net realized and unrealized gains (losses)		4.09			1.65			(0.47	)		1.30			2.64
Total from investment operations		4.20			1.76			(0.36	)		1.45			2.76
Less distributions from net investment income and short term gains
received from Underlying Funds		(0.16	)		(0.12	)		(0.12	)		(0.12	)		(0.14	)
Net asset value, end of year	$	17.61		$	13.57		$	11.93		$	12.41		$	11.08

Total return^d		31.01	%		14.80	%		(2.90	)%		13.13	%		32.74	%

Ratios to average net assets
Expenses before waiver and payments by affiliates^e		0.44	%		0.36	%		0.39	%		0.45	%		0.51	%
Expenses net of waiver and payments by affiliates^e		0.44	%		0.36	%		0.39	%		0.38	%		0.38	%
Net investment income^c		0.68	%		0.86	%		0.89	%		1.26	%		1.31	%

Supplemental data
Net assets, end of year (000’s)	$	558,124		$	449,252		$	418,444		$	479,773		$	319,688
Portfolio turnover rate		5.90	%		2.14	%		2.50	%		21.72	%		2.01	%

^aThe amount shown for a share outstanding throughout the period may not correlate with the Statement of Operations for the period due to the timing of sales and repurchases of
the Fund shares in relation to income earned and/or fluctuating market value of the investments of the Fund.
^bBased on average daily shares outstanding.
^cRecognition of net investment income by the Fund is affected by the timing of declaration of dividends by the Underlying Funds in which the Fund invests.
^dTotal return does not reflect sales commissions or contingent deferred sales charges, if applicable.
^eDoes not include expenses of the Underlying Funds in which the Fund invests. The weighted average indirect expenses of the Underlying Funds was 0.65% for the year ended
December 31, 2013.

Annual Report | The accompanying notes are an integral part of these financial statements. | 23

Franklin Templeton Fund Allocator Series

Financial Highlights (continued)


Franklin Templeton Corefolio Allocation Fund
					Year Ended December 31,
Class C		2013			2012			2011			2010			2009
Per share operating performance
(for a share outstanding throughout the year)
Net asset value, beginning of year	$	13.45		$	11.82		$	12.30		$	10.99		$	8.40
Income from investment operations^a:
Net investment income^b,c		(—)^d			0.02			0.02			0.06			0.05
Net realized and unrealized gains (losses)		4.04			1.64			(0.47	)		1.30			2.61
Total from investment operations		4.04			1.66			(0.45	)		1.36			2.66
Less distributions from net investment income and short term gains
received from Underlying Funds		(0.05	)		(0.03	)		(0.03	)		(0.05	)		(0.07	)
Net asset value, end of year	$	17.44		$	13.45		$	11.82		$	12.30		$	10.99

Total return^e		30.09	%		14.04	%		(3.67	)%		12.39	%		31.80	%

Ratios to average net assets
Expenses before waiver and payments by affiliates^f		1.15	%		1.07	%		1.10	%		1.17	%		1.23	%
Expenses net of waiver and payments by affiliates^f		1.15	%		1.07	%		1.10	%		1.10	%		1.10	%
Net investment income (loss)^c		(0.03	)%		0.15	%		0.18	%		0.54	%		0.59	%

Supplemental data
Net assets, end of year (000’s)	$	176,332		$	142,879		$	138,447		$	162,084		$	113,040
Portfolio turnover rate		5.90	%		2.14	%		2.50	%		21.72	%		2.01	%

^aThe amount shown for a share outstanding throughout the period may not correlate with the Statement of Operations for the period due to the timing of sales and repurchases of
the Fund shares in relation to income earned and/or fluctuating market value of the investments of the Fund.
^bBased on average daily shares outstanding.
^cRecognition of net investment income by the Fund is affected by the timing of declaration of dividends by the Underlying Funds in which the Fund invests.
^dAmount rounds to less than $0.01 per share.
^eTotal return does not reflect sales commissions or contingent deferred sales charges, if applicable.
^fDoes not include expenses of the Underlying Funds in which the Fund invests. The weighted average indirect expenses of the Underlying Funds was 0.65% for the year ended
December 31, 2013.

24 | The accompanying notes are an integral part of these financial statements. | Annual Report

Franklin Templeton Fund Allocator Series

Financial Highlights (continued)


Franklin Templeton Corefolio Allocation Fund
					Year Ended December 31,
Class R		2013			2012			2011			2010			2009
Per share operating performance
(for a share outstanding throughout the year)
Net asset value, beginning of year	$	13.56		$	11.93		$	12.41		$	11.08		$	8.46
Income from investment operations^a:
Net investment income^b,c		0.06			0.09			0.08			0.12			0.11
Net realized and unrealized gains (losses)		4.11			1.64			(0.47	)		1.31			2.63
Total from investment operations		4.17			1.73			(0.39	)		1.43			2.74
Less distributions from net investment income and short term gains
received from Underlying Funds		(0.13	)		(0.10	)		(0.09	)		(0.10	)		(0.12	)
Net asset value, end of year	$	17.60		$	13.56		$	11.93		$	12.41		$	11.08

Total return		30.76	%		14.49	%		(3.15	)%		12.93	%		32.49	%

Ratios to average net assets
Expenses before waiver and payments by affiliates^d		0.65	%		0.57	%		0.60	%		0.67	%		0.74	%
Expenses net of waiver and payments by affiliates^d		0.65	%		0.57	%		0.60	%		0.60	%		0.61	%
Net investment income^c		0.47	%		0.65	%		0.68	%		1.04	%		1.08	%

Supplemental data
Net assets, end of year (000’s)	$	1,903		$	1,856		$	1,686		$	2,188		$	1,365
Portfolio turnover rate		5.90	%		2.14	%		2.50	%		21.72	%		2.01	%

^aThe amount shown for a share outstanding throughout the period may not correlate with the Statement of Operations for the period due to the timing of sales and repurchases of
the Fund shares in relation to income earned and/or fluctuating market value of the investments of the Fund.
^bBased on average daily shares outstanding.
^cRecognition of net investment income by the Fund is affected by the timing of declaration of dividends by the Underlying Funds in which the Fund invests.
^dDoes not include expenses of the Underlying Funds in which the Fund invests. The weighted average indirect expenses of the Underlying Funds was 0.65% for the year ended
December 31, 2013.

Annual Report | The accompanying notes are an integral part of these financial statements. | 25

Franklin Templeton Fund Allocator Series

Financial Highlights (continued)


Franklin Templeton Corefolio Allocation Fund
					Year Ended December 31,
Advisor Class		2013			2012			2011			2010			2009
Per share operating performance
(for a share outstanding throughout the year)
Net asset value, beginning of year	$	13.59		$	11.95		$	12.44		$	11.09		$	8.47
Income from investment operations^a:
Net investment income^b,c		0.18			0.18			0.17			0.26			0.15
Net realized and unrealized gains (losses)		4.08			1.62			(0.50	)		1.24			2.64
Total from investment operations		4.26			1.80			(0.33	)		1.50			2.79
Less distributions from net investment income and short term gains
received from Underlying Funds		(0.21	)		(0.16	)		(0.16	)		(0.15	)		(0.17	)
Net asset value, end of year	$	17.64		$	13.59		$	11.95		$	12.44		$	11.09

Total return		31.38	%		15.11	%		(2.67	)%		13.56	%		33.01	%

Ratios to average net assets
Expenses before waiver and payments by affiliates^d		0.15	%		0.07	%		0.10	%		0.17	%		0.24	%
Expenses net of waiver and payments by affiliates^d		0.15	%		0.07	%		0.10	%		0.10	%		0.11	%
Net investment income^c		0.97	%		1.15	%		1.18	%		1.54	%		1.58	%

Supplemental data
Net assets, end of year (000’s)	$	15,495		$	10,245		$	7,815		$	7,357		$	1,915
Portfolio turnover rate		5.90	%		2.14	%		2.50	%		21.72	%		2.01	%

^aThe amount shown for a share outstanding throughout the period may not correlate with the Statement of Operations for the period due to the timing of sales and repurchases of
the Fund shares in relation to income earned and/or fluctuating market value of the investments of the Fund.
^bBased on average daily shares outstanding.
^cRecognition of net investment income by the Fund is affected by the timing of declaration of dividends by the Underlying Funds in which the Fund invests.
^dDoes not include expenses of the Underlying Funds in which the Fund invests. The weighted average indirect expenses of the Underlying Funds was 0.65% for the year ended
December 31, 2013.

26 | The accompanying notes are an integral part of these financial statements. | Annual Report

Franklin Templeton Fund Allocator Series

Statement of Investments, December 31, 2013


Franklin Templeton Corefolio Allocation Fund	Shares		Value
Investments in Underlying Funds^a
Domestic Equity 75.2%
^bFranklin Flex Cap Growth Fund, Class R6	3,338,423	$	190,156,597
Franklin Growth Fund, Class R6	2,905,310		189,455,278
Mutual Shares Fund, Class R6	6,575,955		186,296,813
			565,908,688
Foreign Equity 24.8%
Templeton Growth Fund Inc., Class R6	7,464,658		186,243,208
Total Investments in Underlying Funds before Short Term Investments
(Cost $547,752,850) 100.0%			752,151,896
Short Term Investments (Cost $686,704) 0.1%
Money Market Funds 0.1%
^a,bInstitutional Fiduciary Trust Money Market Portfolio	686,704		686,704
Total Investments in Underlying Funds (Cost $548,439,554) 100.1%			752,838,600
Other Assets, less Liabilities (0.1)%			(983,912	)
Net Assets 100.0%		$	751,854,688


^aSee Note 6 regarding investments in Underlying Funds.
^bNon-income producing.

Annual Report | The accompanying notes are an integral part of these financial statements. | 27

Franklin Templeton Fund Allocator Series

Financial Highlights


Franklin Templeton Founding Funds Allocation Fund
					Year Ended December 31,
Class A		2013			2012			2011			2010			2009
Per share operating performance
(for a share outstanding throughout the year)
Net asset value, beginning of year	$	11.14		$	9.88		$	10.46		$	9.82		$	7.83
Income from investment operations^a:
Net investment income^b,c		0.32			0.35			0.35			0.36			0.33
Net realized and unrealized gains (losses)		2.29			1.28			(0.55	)		0.66			2.06
Total from investment operations		2.61			1.63			(0.20	)		1.02			2.39
Less distributions from net investment income		(0.38	)		(0.37	)		(0.38	)		(0.38	)		(0.40	)
Net asset value, end of year	$	13.37		$	11.14		$	9.88		$	10.46		$	9.82

Total return^d		23.64	%		16.76	%		(1.95	)%		10.61	%		31.05	%

Ratios to average net assets
Expenses before waiver and payments by affiliates^e		0.39	%		0.33	%		0.34	%		0.41	%		0.44	%
Expenses net of waiver and payments by affiliates^e		0.39	%		0.33	%		0.34	%		0.35	%		0.37	%
Net investment income^c		2.63	%		3.24	%		3.36	%		3.61	%		3.94	%

Supplemental data
Net assets, end of year (000’s)	$	4,170,045		$	3,766,640		$	3,773,080		$	4,771,043		$	5,333,275
Portfolio turnover rate		3.04	%		3.59	%		3.69	%		3.99	%		4.32	%

^aThe amount shown for a share outstanding throughout the period may not correlate with the Statement of Operations for the period due to the timing of sales and repurchases of
the Fund shares in relation to income earned and/or fluctuating market value of the investments of the Fund.
^bBased on average daily shares outstanding.
^cRecognition of net investment income by the Fund is affected by the timing of declaration of dividends by the Underlying Funds in which the Fund invests.
^dTotal return does not reflect sales commissions or contingent deferred sales charges, if applicable.
^eDoes not include expenses of the Underlying Funds in which the Fund invests. The weighted average indirect expenses of the Underlying Funds was 0.63% for the year ended
December 31, 2013.

28 | The accompanying notes are an integral part of these financial statements. | Annual Report

Franklin Templeton Fund Allocator Series

Financial Highlights (continued)


Franklin Templeton Founding Funds Allocation Fund
					Year Ended December 31,
Class C		2013			2012			2011			2010			2009
Per share operating performance
(for a share outstanding throughout the year)
Net asset value, beginning of year	$	10.99		$	9.75		$	10.32		$	9.70		$	7.74
Income from investment operations^a:
Net investment income^b,c		0.23			0.26			0.27			0.28			0.27
Net realized and unrealized gains (losses)		2.25			1.27			(0.54	)		0.64			2.02
Total from investment operations		2.48			1.53			(0.27	)		0.92			2.29
Less distributions from net investment income		(0.29	)		(0.29	)		(0.30	)		(0.30	)		(0.33	)
Net asset value, end of year	$	13.18		$	10.99		$	9.75		$	10.32		$	9.70

Total return^d		22.69	%		15.87	%		(2.65	)%		9.69	%		30.11	%

Ratios to average net assets
Expenses before waiver and payments by affiliates^e		1.14	%		1.08	%		1.09	%		1.16	%		1.18	%
Expenses net of waiver and payments by affiliates^e		1.14	%		1.08	%		1.09	%		1.10	%		1.11	%
Net investment income^c		1.88	%		2.49	%		2.61	%		2.86	%		3.20	%

Supplemental data
Net assets, end of year (000’s)	$	1,829,111		$	1,657,087		$	1,743,292		$	2,252,033		$	2,573,664
Portfolio turnover rate		3.04	%		3.59	%		3.69	%		3.99	%		4.32	%

^aThe amount shown for a share outstanding throughout the period may not correlate with the Statement of Operations for the period due to the timing of sales and repurchases of
the Fund shares in relation to income earned and/or fluctuating market value of the investments of the Fund.
^bBased on average daily shares outstanding.
^cRecognition of net investment income by the Fund is affected by the timing of declaration of dividends by the Underlying Funds in which the Fund invests.
^dTotal return does not reflect sales commissions or contingent deferred sales charges, if applicable.
^eDoes not include expenses of the Underlying Funds in which the Fund invests. The weighted average indirect expenses of the Underlying Funds was 0.63% for the year ended
December 31, 2013.

Annual Report | The accompanying notes are an integral part of these financial statements. | 29

Franklin Templeton Fund Allocator Series

Financial Highlights (continued)


Franklin Templeton Founding Funds Allocation Fund
					Year Ended December 31,
Class R		2013			2012			2011			2010			2009
Per share operating performance
(for a share outstanding throughout the year)
Net asset value, beginning of year	$	11.16		$	9.89		$	10.48		$	9.84		$	7.84
Income from investment operations^a:
Net investment income^b,c		0.29			0.31			0.35			0.34			0.31
Net realized and unrealized gains (losses)		2.29			1.30			(0.58	)		0.65			2.07
Total from investment operations		2.58			1.61			(0.23	)		0.99			2.38
Less distributions from net investment income		(0.35	)		(0.34	)		(0.36	)		(0.35	)		(0.38	)
Net asset value, end of year	$	13.39		$	11.16		$	9.89		$	10.48		$	9.84

Total return		23.28	%		16.52	%		(2.27	)%		10.31	%		30.83	%

Ratios to average net assets
Expenses before waiver and payments by affiliates^d		0.64	%		0.58	%		0.59	%		0.66	%		0.68	%
Expenses net of waiver and payments by affiliates^d		0.64	%		0.58	%		0.59	%		0.60	%		0.61	%
Net investment income^c		2.38	%		2.99	%		3.11	%		3.36	%		3.70	%

Supplemental data
Net assets, end of year (000’s)	$	10,597		$	10,058		$	11,922		$	12,568		$	13,331
Portfolio turnover rate		3.04	%		3.59	%		3.69	%		3.99	%		4.32	%

^aThe amount shown for a share outstanding throughout the period may not correlate with the Statement of Operations for the period due to the timing of sales and repurchases of
the Fund shares in relation to income earned and/or fluctuating market value of the investments of the Fund.
^bBased on average daily shares outstanding.
^cRecognition of net investment income by the Fund is affected by the timing of declaration of dividends by the Underlying Funds in which the Fund invests.
^dDoes not include expenses of the Underlying Funds in which the Fund invests. The weighted average indirect expenses of the Underlying Funds was 0.63% for the year ended
December 31, 2013.

30 | The accompanying notes are an integral part of these financial statements. | Annual Report

Franklin Templeton Fund Allocator Series

Financial Highlights (continued)


Franklin Templeton Founding Funds Allocation Fund
					Year Ended December 31,
Advisor Class		2013			2012			2011			2010			2009
Per share operating performance
(for a share outstanding throughout the year)
Net asset value, beginning of year	$	11.20		$	9.93		$	10.52		$	9.87		$	7.87
Income from investment operations^a:
Net investment income^b,c		0.39			0.38			0.39			0.40			0.39
Net realized and unrealized gains (losses)		2.26			1.29			(0.57	)		0.66			2.03
Total from investment operations		2.65			1.67			(0.18	)		1.06			2.42
Less distributions from net investment income		(0.41	)		(0.40	)		(0.41	)		(0.41	)		(0.42	)
Net asset value, end of year	$	13.44		$	11.20		$	9.93		$	10.52		$	9.87

Total return		23.93	%		17.08	%		(1.78	)%		10.95	%		31.35	%

Ratios to average net assets
Expenses before waiver and payments by affiliates^d		0.14	%		0.08	%		0.09	%		0.16	%		0.18	%
Expenses net of waiver and payments by affiliates^d		0.14	%		0.08	%		0.09	%		0.10	%		0.11	%
Net investment income^c		2.88	%		3.49	%		3.61	%		3.86	%		4.20	%

Supplemental data
Net assets, end of year (000’s)	$	114,369		$	71,487		$	72,427		$	71,126		$	63,994
Portfolio turnover rate		3.04	%		3.59	%		3.69	%		3.99	%		4.32	%

^aThe amount shown for a share outstanding throughout the period may not correlate with the Statement of Operations for the period due to the timing of sales and repurchases of
the Fund shares in relation to income earned and/or fluctuating market value of the investments of the Fund.
^bBased on average daily shares outstanding.
^cRecognition of net investment income by the Fund is affected by the timing of declaration of dividends by the Underlying Funds in which the Fund invests.
^dDoes not include expenses of the Underlying Funds in which the Fund invests. The weighted average indirect expenses of the Underlying Funds was 0.63% for the year ended
December 31, 2013.

Annual Report | The accompanying notes are an integral part of these financial statements. | 31

Franklin Templeton Fund Allocator Series

Statement of Investments, December 31, 2013


Franklin Templeton Founding Funds Allocation Fund	Shares		Value
Investments in Underlying Funds^a
Domestic Equity 33.2%
Mutual Shares Fund, Class R6	71,806,661	$	2,034,282,703
Domestic Hybrid 33.0%
Franklin Income Fund, Class R6	838,143,077		2,019,924,816
Foreign Equity 33.2%
Templeton Growth Fund Inc., Class R6	81,555,713		2,034,815,040
Total Investments in Underlying Funds before Short Term Investments
(Cost $5,545,903,313) 99.4%			6,089,022,559
Short Term Investments (Cost $45,704,595) 0.7%
Money Market Funds 0.7%
^a,bInstitutional Fiduciary Trust Money Market Portfolio	45,704,595		45,704,595
Total Investments in Underlying Funds (Cost $5,591,607,908) 100.1%			6,134,727,154
Other Assets, less Liabilities (0.1)%			(10,605,069	)
Net Assets 100.0%		$	6,124,122,085


^aSee Note 6 regarding investments in Underlying Funds.
^bNon-income producing.

32 | The accompanying notes are an integral part of these financial statements. | Annual Report

Franklin Templeton Fund Allocator Series

Financial Statements

Statements of Assets and Liabilities
December 31, 2013


		Franklin			Franklin
		Templeton			Templeton
		Corefolio			Founding Funds
		Allocation Fund			Allocation Fund
Assets:
Investments in Underlying Funds: (Note 6)
Cost	$	548,439,554		$	5,591,607,908
Value	$	752,838,600		$	6,134,727,154
Receivables from capital shares sold		558,715			7,903,609
Other assets		16			130
Total assets		753,397,331			6,142,630,893
Liabilities:
Payables:
Capital shares redeemed		779,277			11,839,287
Administrative fees		18,712			152,207
Distribution fees		544,984			4,736,600
Transfer agent fees		144,496			1,503,606
Accrued expenses and other liabilities		55,174			277,108
Total liabilities		1,542,643			18,508,808
Net assets, at value	$	751,854,688		$	6,124,122,085
Net assets consist of:
Paid-in capital	$	554,012,010		$	8,225,084,495
Undistributed net investment income		186,306			1,934,226
Net unrealized appreciation (depreciation)		204,399,046			543,119,246
Accumulated net realized gain (loss)		(6,742,674	)		(2,646,015,882	)
Net assets, at value	$	751,854,688		$	6,124,122,085

Annual Report | The accompanying notes are an integral part of these financial statements. | 33

Franklin Templeton Fund Allocator Series

Financial Statements (continued)

Statements of Assets and Liabilities (continued)
December 31, 2013


			Franklin			Franklin
			Templeton			Templeton
			Corefolio			Founding Funds
			Allocation Fund			Allocation Fund
Class A:
Net assets, at value	$		558,123,862	$		4,170,044,846
Shares outstanding			31,690,160			311,934,894
Net asset value per share^a		$	17.61		$	13.37
Maximum offering price per share (net asset value per share ÷ 94.25%)		$	18.68		$	14.19
Class C:
Net assets, at value	$		176,332,248	$		1,829,111,214
Shares outstanding			10,112,176			138,748,436
Net asset value and maximum offering price per share^a		$	17.44		$	13.18
Class R:
Net assets, at value	$		1,903,117	$		10,597,014
Shares outstanding			108,104			791,156
Net asset value and maximum offering price per share		$	17.60		$	13.39
Advisor Class:
Net assets, at value	$		15,495,461	$		114,369,011
Shares outstanding			878,312			8,509,587
Net asset value and maximum offering price per share		$	17.64		$	13.44


^aRedemption price is equal to net asset value less contingent deferred sales charges, if applicable.

34 | The accompanying notes are an integral part of these financial statements. | Annual Report

Franklin Templeton Fund Allocator Series

Financial Statements (continued)

Statements of Operations
for the year ended December 31, 2013


		Franklin			Franklin
Templeton		Templeton			Templeton
		Corefolio			Founding Funds
		Allocation Fund			Allocation Fund
Investment income:
Dividends from Underlying Funds (Note 6)	$	7,573,560		$	175,430,636
Expenses:
Administrative fees (Note 3a)		201,513			1,733,951
Distribution fees: (Note 3b)
Class A		1,432,486			9,962,677
Class B		3,178			35,987
Class C		1,572,562			17,382,190
Class R		8,890			51,497
Transfer agent fees: (Note 3d)
Class A		773,416			5,223,340
Class B		554			5,016
Class C		241,964			2,268,106
Class R		2,750			13,457
Advisor Class		18,942			106,665
Reports to shareholders		66,811			538,298
Registration and filing fees		74,375			153,253
Professional fees		31,808			70,071
Trustees’ fees and expenses		4,688			41,612
Other		7,202			49,675
Expenses borne by Underlying Funds (Note 7)		(356,362	)		(2,263,748	)
Total expenses		4,084,777			35,372,047
Net investment income		3,488,783			140,058,589
Realized and unrealized gains (losses):
Net realized gain (loss) from:
Sale of investments in Underlying Funds (Note 6)		12,955,491			58,304,930
Realized gain distribution by Underlying Funds		24,974,709			—
Net realized gain (loss)		37,930,200			58,304,930
Net change in unrealized appreciation (depreciation) on investments in Underlying Funds		139,431,540			1,023,954,491
Net realized and unrealized gain (loss)		177,361,740			1,082,259,421
Net increase (decrease) in net assets resulting from operations	$	180,850,523		$	1,222,318,010

Annual Report | The accompanying notes are an integral part of these financial statements. | 35

Franklin Templeton Fund Allocator Series

Financial Statements (continued)


Statements of Changes in Net Assets


		Franklin Templeton						Franklin Templeton
		Corefolio Allocation Fund						Founding Funds Allocation Fund
		Year Ended December 31,						Year Ended December 31,
		2013			2012			2013			2012
Increase (decrease) in net assets:
Operations:
Net investment income	$	3,488,783		$	4,169,918		$	140,058,589		$	170,201,757
Net realized gain (loss) from Underlying Funds		37,930,200			21,012,932			58,304,930			(11,105,539	)
Net change in unrealized appreciation
(depreciation) on investments in Underlying
Funds		139,431,540			57,758,458			1,023,954,491			708,660,878
Net increase (decrease) in net assets
resulting from operations		180,850,523			82,941,308			1,222,318,010			867,757,096
Distributions to shareholders from:
Net investment income and short term gains
received from Underlying Funds:
Class A		(5,135,871	)		(4,029,814	)		(118,824,164	)		(127,242,038	)
Class B		—			(24,175	)		—			(1,344,544	)
Class C		(539,100	)		(304,941	)		(39,966,252	)		(44,880,709	)
Class R		(13,603	)		(12,993	)		(276,644	)		(315,322	)
Advisor Class		(179,676	)		(117,263	)		(3,156,020	)		(2,550,398	)
Total distributions to shareholders		(5,868,250	)		(4,489,186	)		(162,223,080	)		176,333,011
Capital share transactions: (Note 2)
Class A		(21,298,297	)		(25,871,568	)		(322,569,398	)		(464,323,347	)
Class B		(3,233,173	)		(21,587,349	)		(34,596,414	)		(178,686,934	)
Class C		(7,437,082	)		(13,935,555	)		(144,240,609	)		(293,143,365	)
Class R		(419,907	)		(53,130	)		(1,342,610	)		(3,219,844	)
Advisor Class		1,932,643			1,312,010			28,225,950			(9,692,136	)
Total capital share transactions		(30,455,816	)		(60,135,592	)		(474,523,081	)		(949,065,626	)
Net increase (decrease) in net assets		144,526,457			18,316,530			585,571,849			(257,641,541	)
Net assets:
Beginning of year		607,328,231			589,011,701			5,538,550,236			5,796,191,777
End of year	$	751,854,688		$	607,328,231		$	6,124,122,085		$	5,538,550,236
Undistributed net investment income included in
net assets:
End of year	$	186,306		$	965,622		$	1,934,226		$	24,098,717

36 | The accompanying notes are an integral part of these financial statements. | Annual Report

Franklin Templeton Fund Allocator Series

Notes to Financial Statements

1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES

Franklin Templeton Fund Allocator Series (Trust) is registered under the Investment Company Act of 1940, as amended, (1940 Act) as an open-end investment company, consisting of fourteen separate funds, two of which are included in this report (Funds). The financial statements of the remaining funds in the Trust are presented separately. The Funds invest primarily in Franklin Templeton mutual funds (Underlying Funds). The Funds offer four classes of shares: Class A, Class C, Class R, and Advisor Class. Effective March 1, 2013, all Class B shares were converted to Class A. Each class of shares differs by its initial sales load, contingent deferred sales charges, voting rights on matters affecting a single class, its exchange privilege and fees primarily due to differing arrangements for distribution and transfer agent fees.

The following summarizes the Funds’ significant accounting policies.

a. Financial Instrument Valuation

The Funds’ investments in financial instruments are carried at fair value daily. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants on the measurement date. The Funds calculate the net asset value (NAV) per share at the close of the New York Stock Exchange (NYSE), generally at 4p.m. Eastern time (NYSE close) on each day the NYSE is open for trading. Under procedures approved by the Trust’s Board of Trustees (the Board), the Funds’ administrator and other affiliates have formed the Valuation and Liquidity Oversight Committee (VLOC). The VLOC provides administration and oversight of the Funds’ valuation policies and procedures, which are approved annually by the Board. Investments in the Underlying Funds are valued at their closing net asset value each trading day.

b. Income Taxes

It is each fund’s policy to qualify as a regulated investment company under the Internal Revenue Code. Each fund intends to distribute to shareholders substantially all of its taxable income and net realized gains to relieve it from federal income and if applicable, excise taxes. As a result, no provision for U.S. federal income taxes is required

Each fund recognizes the tax benefits of uncertain tax positions only when the position is “more likely than not” to be sustained upon examination by the tax authorities based on the technical merits of the tax position. As of December 31, 2013, and for all open tax years, each fund has determined that no liability for unrecognized tax benefits is required in each fund’s financial statements related to uncertain tax positions taken on a tax return (or expected to be taken on future tax returns). Open tax years are those that remain subject to examination and are based on each tax jurisdiction statute of limitation.

Annual Report | 37

Franklin Templeton Fund Allocator Series

Notes to Financial Statements (continued)

1.	ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES (continued)
c.	Security Transactions, Investment Income, Expenses and Distributions

Security transactions are accounted for on trade date. Realized gains and losses on security transactions are determined on a specific identification basis. Estimated expenses are accrued daily. Dividend income is recorded on the ex-dividend date. Distributions to shareholders are recorded on the ex-dividend date and are determined according to income tax regulations (tax basis). Distributable earnings determined on a tax basis may differ from earnings recorded in accordance with accounting principles generally accepted in the United States of America. These differences may be permanent or temporary. Permanent differences are reclassified among capital accounts to reflect their tax character. These reclassifications have no impact on net assets or the results of operations. Temporary differences are not reclassified, as they may reverse in subsequent periods.

Common expenses incurred by the Trust are allocated among the Funds based on the ratio of net assets of each fund to the combined net assets of the Trust. Fund specific expenses are charged directly to the fund that incurred the expense.

The Funds indirectly bear their proportionate share of expenses from the Underlying Funds. Since the Underlying Funds have varied expense levels and the Funds may own different proportions of the Underlying Funds at different times, the amount of expenses incurred indirectly by the Funds will vary.

d. Accounting Estimates

e. Guarantees and Indemnifications

38 | Annual Report

Franklin Templeton Fund Allocator Series

Notes to Financial Statements (continued)

2. SHARES OF BENEFICIAL INTEREST

At December 31, 2013, there were an unlimited number of shares authorized (without par value). Transactions in the Funds’ shares were as follows:


	Franklin Templeton						Franklin Templeton
	Corefolio						Founding Funds
	Allocation Fund						Allocation Fund
	Shares				Amount		Shares				Amount
Class A Shares:
Year ended December 31, 2013
Shares sold	3,437,590		$	53,359,599			21,436,165		$	262,836,923
Shares issued in reinvestment of
distributions	291,186				4,981,840		8,950,226				113,502,952
Shares redeemed	(5,147,580	)			(79,639,736	)	(56,672,608	)			(698,909,273	)
Net increase (decrease)	(1,418,804	)	$	(21,298,297		)	(26,286,217	)	$	(322,569,398		)
Year ended December 31, 2012
Shares sold	4,073,109		$	52,936,968			30,806,626		$	327,349,893
Shares issued in reinvestment of
distributions	296,017				3,890,765		11,464,306				121,151,320
Shares redeemed	(6,340,093	)			(82,699,301	)	(86,057,147	)			(912,824,560	)
Net increase (decrease)	(1,970,967	)	$	(25,871,568		)	(43,786,215	)	$	(464,323,347		)
Class B Shares^a:
Year ended December 31, 2013
Shares sold	472			$	6,656		3,162			$	36,602
Shares redeemed	(229,346	)			(3,239,829	)	(2,957,857	)			(34,633,016	)
Net increase (decrease)	(228,874	)		$	(3,233,173	)	(2,954,695	)		$	(34,596,414	)
Year ended December 31, 2012
Shares sold	2,851			$	36,425		111,683			$	1,176,061
Shares issued in reinvestment of
distributions	1,798				22,155		109,357				1,125,900
Shares redeemed	(1,677,445	)			(21,645,929	)	(17,014,275	)			(180,988,895	)
Net increase (decrease)	(1,672,796	)	$	(21,587,349		)	(16,793,235	)	$	(178,686,934		)
Class C Shares:
Year ended December 31, 2013
Shares sold	1,222,480		$	19,033,146			9,397,146		$	114,668,476
Shares issued in reinvestment of
distributions	31,901				514,595		2,912,284				36,529,675
Shares redeemed	(1,767,529	)			(26,984,823	)	(24,375,919	)			(295,438,760	)
Net increase (decrease)	(513,148	)		$	(7,437,082	)	(12,066,489	)	$	(144,240,609		)
Year ended December 31, 2012
Shares sold	879,209		$	11,343,194			7,224,788			$	75,666,193
Shares issued in reinvestment of
distributions	23,529				287,996		3,889,276				40,585,902
Shares redeemed	(1,987,168	)			(25,566,745	)	(39,158,420	)			(409,395,460	)
Net increase (decrease)	(1,084,430	)	$	(13,935,555		)	(28,044,356	)	$	(293,143,365		)

Annual Report | 39

Franklin Templeton Fund Allocator Series

Notes to Financial Statements (continued)


2. SHARES OF BENEFICIAL INTEREST (continued)

	Franklin Templeton					Franklin Templeton
	Corefolio					Founding Funds
	Allocation Fund					Allocation Fund
	Shares			Amount		Shares			Amount
Class R Shares:
Year ended December 31, 2013
Shares sold	5,007		$	78,357		144,102		$	1,780,250
Shares issued in reinvestment of
distributions	801			13,603		21,682			275,563
Shares redeemed	(34,547	)		(511,867	)	(276,170	)		(3,398,423	)
Net increase (decrease)	(28,739	)	$	(419,907	)	(110,386	)	$	(1,342,610	)
Year ended December 31, 2012
Shares sold	5,830		$	76,583		131,805		$	1,395,887
Shares issued in reinvestment of
distributions	994			12,993		29,729			314,580
Shares redeemed	(11,336	)		(142,706	)	(465,313	)		(4,930,311	)
Net increase (decrease)	(4,512	)	$	(53,130	)	(303,779	)	$	(3,219,844	)
Advisor Class Shares:
Year ended December 31, 2013
Shares sold	240,034		$	3,782,420		3,668,813		$	47,263,232
Shares issued in reinvestment of
distributions	9,794			169,184		221,108			2,845,113
Shares redeemed	(125,315	)		(2,018,961	)	(1,765,654	)		(21,882,395	)
Net increase (decrease)	124,513		$	1,932,643		2,124,267		$	28,225,950
Year ended December 31, 2012
Shares sold	221,514		$	2,933,041		1,630,342		$	17,487,002
Shares issued in reinvestment of
distributions	8,300			110,020		211,726			2,250,979
Shares redeemed	(130,050	)		(1,731,051	)	(2,751,905	)		(29,430,117	)
Net increase (decrease)	99,764		$	1,312,010		(909,837	)	$	(9,692,136	)

^aEffective March 1, 2013, all the Class B Shares were converted to Class A.

3. TRANSACTIONS WITH AFFILIATES

Franklin Resources, Inc. is the holding company for various subsidiaries that together are
referred to as Franklin Templeton Investments. Certain officers and trustees of the Funds are
also officers and/or directors/trustees of certain of the Underlying Funds and of the following
subsidiaries:


Subsidiary	Affiliation
Franklin Templeton Services, LLC (FT Services)	Administrative manager
Franklin Templeton Distributors, Inc. (Distributors)	Principal underwriter
Franklin Templeton Investor Services, LLC (Investor Services)	Transfer agent

40 | Annual Report

Franklin Templeton Fund Allocator Series

Notes to Financial Statements (continued)

3. TRANSACTIONS WITH AFFILIATES (continued) a. Administrative Fees

The Funds pay an administrative fee to FT Services of 0.03% per year of the average daily net assets of each of the Funds for administrative services including monitoring and rebalancing the percentage of each Fund’s investment in the Underlying Funds.

b. Distribution Fees

The Board has adopted distribution plans for each share class, with the exception of Advisor Class shares, pursuant to Rule 12b-1 under the 1940 Act. Distribution fees are not charged on shares held by affiliates. Under the Funds’ Class A reimbursement distribution plans, the Funds reimburse Distributors for costs incurred in connection with the servicing, sale and distribution of each Funds’ shares up to the maximum annual plan rate for each class. Under the Class A reimbursement distribution plans, costs exceeding the maximum for the current plan year cannot be reimbursed in subsequent periods. In addition, under the Funds’ Class B, C and R compensation distribution plans, the Funds pay Distributors for costs incurred in connection with the servicing, sale and distribution of each fund’s shares up to the maximum annual plan rate for each class. The plan year, for purposes of monitoring compliance with the maximum annual plan rates, is February 1 through January 31 for each fund.

The maximum annual plan rates, based on the average daily net assets, for each class, are as follows:


Class A	0.35	%
Class B	1.00	%
Class C	1.00	%
Class R	0.50	%

The Board has set the current rate at 0.30% per year for Class A shares for the Franklin Templeton Corefolio Allocation Fund and at 0.25% per year for Class A shares for the Franklin Founding Funds Allocation Fund until further notice and approval by the Board.

c. Sales Charges/Underwriting Agreements


		Franklin Templeton		Franklin Templeton
		Corefolio		Founding Funds
		Allocation Fund		Allocation Fund
Sales charges retained net of commissions paid to unaffiliated
broker/dealers	$	178,861	$	920,534
CDSC retained	$	6,650	$	50,734

Annual Report | 41

Franklin Templeton Fund Allocator Series

Notes to Financial Statements (continued)

3.	TRANSACTIONS WITH AFFILIATES (continued)
d.	Transfer Agent Fees

Each class of shares pays transfer agent fees to Investor Services for its performance of shareholder servicing obligations and reimburses Investor Services for out of pocket expenses incurred, including shareholding servicing fees paid to third parties. These fees are allocated daily based upon their relative proportion of such classes’ aggregate net assets.

For the year ended December 31, 2013, the Funds paid transfer agent fees as noted in the Statements of Operations of which the following amounts were retained by Investor Services:


		Franklin Templeton		Franklin Templeton
		Corefolio		Founding Funds
		Allocation Fund		Allocation Fund
Transfer agent fees	$	694,237	$	3,724,969

e. Waiver and Expense Reimbursements

FT Services has contractually agreed in advance to waive or limit its fees and to assume as its own expense certain expenses otherwise payable by the funds so that the expenses (excluding distribution fees, and acquired fund fees and expenses) for Class A, Class C, Class R and Advisor Class of the funds do not exceed 0.10% (other than certain non-routine expenses or costs, including those relating to litigation, indemnification, reorganizations, and liquidations) until April 30, 2013. Effective May 1, 2013, the contractual fee waiver was eliminated. There were no expenses waived during the year ended December 31, 2013.

4. INCOME TAXES

For tax purposes, capital losses may be carried over to offset future capital gains. Capital loss carryforwards with no expiration, if any, must be fully utilized before those losses with expiration dates.


At December 31, 2013, the capital loss carryforwards were as follows:

		Franklin Templeton				Franklin Templeton
		Corefolio				Founding Funds
		Allocation Fund				Allocation Fund
Capital loss carryforwards expiring in:
2016		$	—		$	666,677,037
2017			13,215,638	^a		1,091,470,427
2018			—			465,945,460
Long term capital loss carryforwards not subject to expiration			—			393,449,505
Total capital loss carryforwards	$	13,215,638			$	2,617,542,429

^aIncludes $13,215,638 from the merged Franklin Templeton Perspectives Allocation Fund, which may be carried over to offset future capital gains, subject to certain limitations.

42 | Annual Report

Franklin Templeton Fund Allocator Series

Notes to Financial Statements (continued)

4. INCOME TAXES (continued)

During the year ended December 31, 2013, the Franklin Templeton Corefolio Allocation Fund and Franklin Templeton Founding Funds Allocation Fund utilized $25,609,305 and $48,379,019, respectively, of capital loss carryforwards.

The tax character of distributions paid during the years ended December 31, 2013 and 2012, was as follows:


		Franklin Templeton				Franklin Templeton
		Corefolio Allocation Fund				Founding Funds Allocation Fund
		2013		2012		2013	2012
Distributions paid from ordinary
income	$	5,868,250	$	4,489,186	$	162,223,080		$176,333,011

At December 31, 2013, the cost of investments, net unrealized appreciation (depreciation), undistributed ordinary income, and undistributed long term capital gains for income tax purposes were as follows:


		Franklin		Franklin
		Templeton		Templeton
		Corefolio		Founding Funds
		Allocation Fund		Allocation Fund
Cost of investments	$	551,994,388	$	5,620,081,364

Unrealized appreciation	$	200,844,212	$	514,707,726
Unrealized depreciation		—		(61,936	)
Net unrealized appreciation (depreciation)	$	200,844,212	$	514,645,790

Undistributed ordinary income	$	186,306	$	1,934,226
Undistributed long term capital gains		10,027,800		—
Distributable earnings	$	10,214,106	$	1,934,226

Differences between income and/or capital gains as determined on a book basis and a tax basis are primarily due to differing treatment of short term capital gains distributions from Underlying Funds, foreign capital gains tax, and wash sales.

5. INVESTMENT TRANSACTIONS

Purchases and sales of Underlying Funds (excluding short term securities) for the year ended December 31, 2013, were as follows:


		Franklin Templeton		Franklin Templeton
		Corefolio		Founding Funds
		Allocation Fund		Allocation Fund
Purchases	$	39,548,269	$	175,430,636
Sales	$	47,500,000	$	681,000,000

Annual Report | 43

Franklin Templeton Fund Allocator Series

Notes to Financial Statements (continued)

6. INVESTMENTS IN UNDERLYING FUNDS

The Funds invest primarily in the Underlying Funds which are managed by Franklin Advisers, Inc. (Advisers), an affiliate of FT Services or an affiliate of Advisers. The Funds do not invest in the Underlying Funds for the purpose of exercising a controlling influence over the management or policies. Administrative fees paid by the Funds are reduced on assets invested in the Institutional Fiduciary Trust Money Market Portfolio (Sweep Money Fund) in an amount not to exceed the management and administrative fees paid by the Sweep Money Fund.

Investments in Underlying Funds for the year ended December 31, 2013, were as follows:


												% of
												Underlying
	Number of			Number of								Fund Shares
	Shares Held			Shares		Value				Realized		Outstanding
	at Beginning	Gross	Gross	Held at End		at End		Investment		Capital		Held at End
Underlying Funds	of Year^a	Additions	Reductions	of Year		of Year		Income		Gain (Loss)		of Year
Franklin Templeton Corefolio
Allocation Fund
Franklin Flex Cap Growth Fund,
Class R6	3,145,368	454,995	261,940	3,338,423	$	190,156,597	$	—	$	30,048,317	^b	5.39	%
Franklin Growth Fund,
Class R6	3,009,533	46,917	151,140	2,905,310		189,455,278		1,662,391		3,983,576		1.95	%
Institutional Fiduciary Trust
Money Market Portfolio	1,039,910	37,480,959	37,834,165	686,704		686,704		—		—		—^c
Mutual Shares Fund,
Class R6	6,769,027	212,035	405,107	6,575,955		186,296,813		3,071,646		1,571,229		1.15	%
Templeton Growth Fund Inc.,
Class R6	7,856,853	257,285	649,480	7,464,658		186,243,208		2,839,523		2,327,078		1.02	%
Total					$	752,838,600	$	7,573,560	$	37,930,200
Franklin Templeton Founding Funds
Allocation Fund
Franklin Income Fund,
Class R6	826,732,566	48,036,153	36,625,642	838,143,077	$	2,019,924,816	$	110,393,013	$	2,074,986		2.35	%
Institutional Fiduciary Trust
Money Market Portfolio	43,452,070	424,354,568	422,102,043	45,704,595		45,704,595		—		—		0.24	%
Mutual Shares Fund,
Class R6	81,205,536	1,231,761	10,630,636	71,806,661		2,034,282,703		33,855,517		40,649,532		12.55	%
Templeton Growth Fund Inc.,
Class R6	94,913,411	1,306,878	14,664,576	81,555,713		2,034,815,040		31,182,106		15,580,412		11.09	%
Total					$	6,134,727,154	$	175,430,636	$	58,304,930

^aEffective May 1, 2013, the Underlying Fund’s shares were exchanged from Advisor Class to Class R6, if applicable.
^bIncludes realized gain distributions received.
^cRounds to less than 0.01%.

44 | Annual Report

Franklin Templeton Fund Allocator Series

Notes to Financial Statements (continued)

7. SPECIAL SERVICING AGREEMENT

The Funds participated in a Special Servicing Agreement (SSA) with the Underlying Funds and certain service providers of the Funds and of the Underlying Funds. Under the SSA, each Underlying Fund may pay a portion of the Funds’ expenses (other than any administrative and distribution fees) to the extent such payments are less than the amount of the benefits realized or expected to be realized by the Underlying Fund (e.g., due to reduced costs associated with servicing accounts) from the investment in the Underlying Fund by the Funds. The amount of expenses borne by the Underlying Funds during the year ended December 31, 2013 is noted in the Statements of Operations. Effective May 1, 2013, the SSA was discontinued until further notice and approval by the Board.

8. CREDIT FACILITY

9. FAIR VALUE MEASUREMENTS

Level 1 – quoted prices in active markets for identical financial instruments
Level 2 – other significant observable inputs (including quoted prices for similar financial instruments, interest rates, prepayment speed, credit risk, etc.)
Level 3 – significant unobservable inputs (including the Funds’ own assumptions in determining the fair value of financial instruments)

Annual Report | 45

Franklin Templeton Fund Allocator Series

Notes to Financial Statements (continued)

9. FAIR VALUE MEASUREMENTS (continued)

The input levels are not necessarily an indication of the risk or liquidity associated with financial instruments at that level.

For movements between the levels within the fair value hierarchy, the Funds have adopted a policy of recognizing the transfers as of the date of the underlying event which caused the movement.

At December 31, 2013, all of the Funds’ investments in financial instruments carried at fair value were valued using Level 1 inputs. For detailed categories, see the accompanying Statements of Investments.

10. NEW ACCOUNTING PRONOUNCEMENTS

In June 2013, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2013-08, Investment Companies (Topic 946): Amendments to the Scope, Measurement, and Disclosure Requirements. The ASU modifies the criteria used in defining an investment company under U.S. Generally Accepted Accounting Principles and also sets forth certain measurement and disclosure requirements. Under the ASU, an entity that is registered under the 1940 Act automatically qualifies as an investment company. The ASU is effective for interim and annual reporting periods beginning after December 15, 2013. Management has reviewed the requirements and believes the adoption of this ASU will not have a material impact on their financial statements.

11. SUBSEQUENT EVENTS

The Funds have evaluated subsequent events through the issuance of the financial statements and determined that no events have occurred that require disclosure other than those already disclosed.

46 | Annual Report

Franklin Templeton Fund Allocator Series

Report of Independent Registered Public Accounting Firm

To the Board of Trustees and Shareholders of Franklin Templeton Fund Allocator Series

In our opinion, the accompanying statements of assets and liabilities, including the statements of investments, and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of Franklin Templeton Corefolio Allocation Fund and Franklin Templeton Founding Funds Allocation Fund (separate portfolios of Franklin Templeton Fund Allocator Series, hereafter referred to as the “Funds”) at December 31, 2013, the results of each of their operations for the year then ended, the changes in each of their net assets for each of the two years in the period then ended and the financial highlights for each of the five years in the period then ended, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as “financial statements”) are the responsibility of the Funds’ management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of securities at December 31, 2013 by correspondence with the transfer agent, provide a reasonable basis for our opinion.

PricewaterhouseCoopers LLP

San Francisco, California
February 14, 2014

Annual Report | 47

Franklin Templeton Fund Allocator Series

Tax Information (unaudited)

Under Section 854(b)(1)(A) of the Internal Revenue Code (Code), the Funds hereby report the following percentage amounts of the ordinary income dividends as income qualifying for the dividends received deduction for the fiscal year ended December 31, 2013:


Franklin Templeton		Franklin Templeton
Corefolio		Founding Funds
Allocation Fund		Allocation Fund
88.73	%	40.89	%

Under Section 854(b)(1)(B) of the Code, the Funds hereby report the maximum amount allow-

able but no less than the following amounts as qualified dividends for purposes of the maximum

rate under Section 1(h)(11) of the Code for the fiscal year ended December 31, 2013:


	Franklin Templeton		Franklin Templeton
	Corefolio		Founding Funds
	Allocation Fund		Allocation Fund
$	8,501,969	$	102,815,514

During the fiscal year ended December 31, 2013, the Funds, qualified fund of funds under Section 852(g)(2) of the Code, received an allocation of foreign taxes paid from one or more of its underlying funds. As shown in the table below, the Fund hereby reports to shareholders the foreign source income and foreign taxes paid by underlying funds, pursuant to Section 853 of the Code. This written statement will allow shareholders of record on December 27, 2013, to treat their proportionate share of foreign taxes paid by the underlying funds as having been paid directly by them. The shareholder shall consider these amounts as foreign taxes paid in the tax year in which they receive the Fund distribution.

The following table provides a detailed analysis of foreign tax paid, and foreign source income and foreign qualified dividends as reported by the Funds, to Class A, Class C, Class R, and Advisor Class shareholders of record.


		Foreign Tax		Foreign Source		Foreign Qualified
Class		Paid Per Share		Income Per Share		Dividends Per Share
Franklin Templeton Corefolio Allocation Fund
Class A	$	0.0059	$	0.0577	$	0.0470
Class C	$	0.0059	$	0.0577	$	0.0470
Class R	$	0.0059	$	0.0577	$	0.0470
Advisor Class	$	0.0059	$	0.0577	$	0.0470

48 | Annual Report

Franklin Templeton Fund Allocator Series

Tax Information (unaudited) (continued)


		Foreign Tax		Foreign Source		Foreign Qualified
Class		Paid Per Share		Income Per Share		Dividends Per Share
Franklin Templeton Founding Funds Allocation Fund
Class A	$	0.0061	$	0.0595	$	0.0484
Class C	$	0.0061	$	0.0595	$	0.0484
Class R	$	0.0061	$	0.0595	$	0.0484
Advisor Class	$	0.0061	$	0.0595	$	0.0484

Foreign Tax Paid Per Share (Column 1) is the amount per share available to you, as a tax credit (assuming you held your shares in the Fund for a minimum of 16 days during the 31-day period beginning 15 days before the ex-dividend date of the Fund’s distribution to which the foreign taxes relate), or, as a tax deduction.

¹Qualified dividends are taxed at reduced long term capital gains tax rates. In determining the amount of foreign tax credit that may be applied
against the U.S. tax liability of individuals receiving foreign source qualified dividends, adjustments may be required to the foreign tax credit
limitation calculation to reflect the rate differential applicable to such dividend income. The rules however permit certain individuals to elect not
to apply the rate differential adjustments for capital gains and/or dividends for any taxable year. Please consult your tax advisor and the instructions
to Form 1116 for more information.

Annual Report | 49

Franklin Templeton Fund Allocator Series

Board Members and Officers


Independent Board Members

			Number of Portfolios in
Name, Year of Birth		Length of	Fund Complex Overseen	Other Directorships Held
and Address	Position	Time Served	by Board Member*	During at Least the Past 5 Years
Harris J. Ashton (1932)	Trustee	Since 1995	141	Bar-S Foods (meat packing company)
One Franklin Parkway				(1981-2010).
San Mateo, CA 94403-1906
Principal Occupation During at Least the Past 5 Years:
Director of various companies; and formerly, Director, RBC Holdings, Inc. (bank holding company) (until 2002); and President, Chief Executive
Officer and Chairman of the Board, General Host Corporation (nursery and craft centers) (until 1998).

Sam Ginn (1937)	Trustee	Since 2007	114	ICO Global Communications
One Franklin Parkway				(Holdings) Limited (satellite company)
San Mateo, CA 94403-1906				(2006-2010), Chevron Corporation
				(global energy company) (1989-2009),
				Hewlett-Packard Company (technology
				company) (1996-2002), Safeway, Inc.
				(grocery retailer) (1991-1998) and
				TransAmerica Corporation (insurance
				company) (1989-1999).
Principal Occupation During at Least the Past 5 Years:
Private investor; Chairman, First Responder Network Authority (FirstNet) (interoperable wireless broadband network) (2012); and formerly,
Chairman of the Board, Vodafone AirTouch, PLC (wireless company) (1999-2000); Chairman of the Board and Chief Executive Officer,
AirTouch Communications (cellular communications) (1993-1998) and Pacific Telesis Group (telephone holding company) (1988-1994).

Edith E. Holiday (1952)	Trustee	Since 1998	141	Hess Corporation (exploration and
One Franklin Parkway				refining of oil and gas), H.J. Heinz
San Mateo, CA 94403-1906				Company (processed foods and
				allied products) (1994-2013), RTI
				International Metals, Inc. (manu-
				facture and distribution of titanium),
				Canadian National Railway (railroad)
				and White Mountains Insurance
				Group, Ltd. (holding company).
Principal Occupation During at Least the Past 5 Years:
Director or Trustee of various companies and trusts; and formerly, Assistant to the President of the United States and Secretary of the Cabinet
(1990-1993); General Counsel to the United States Treasury Department (1989-1990); and Counselor to the Secretary and Assistant
Secretary for Public Affairs and Public Liaison – United States Treasury Department (1988-1989).

50 | Annual Report


			Number of Portfolios in
Name, Year of Birth		Length of	Fund Complex Overseen	Other Directorships Held
and Address	Position	Time Served	by Board Member*	During at Least the Past 5 Years
J. Michael Luttig (1954)	Trustee	Since 2009	141	Boeing Capital Corporation (aircraft
One Franklin Parkway				financing) (2006-2013).
San Mateo, CA 94403-1906
Principal Occupation During at Least the Past 5 Years:
Executive Vice President, General Counsel and member of Executive Council, The Boeing Company (aerospace company); and formerly,
Federal Appeals Court Judge, U.S. Court of Appeals for the Fourth Circuit (1991-2006).

Frank A. Olson (1932)	Trustee	Since 2007	141	Hess Corporation (exploration and
One Franklin Parkway				refining of oil and gas) (1998-2013).
San Mateo, CA 94403-1906
Principal Occupation During at Least the Past 5 Years:
Chairman Emeritus, The Hertz Corporation (car rental) (since 2000) (Chairman of the Board (1980-2000) and Chief Executive Officer
(1977-1999)); and formerly, Chairman of the Board, President and Chief Executive Officer, UAL Corporation (airlines) (until 1987).

Larry D. Thompson (1945)	Trustee	Since 2007	141	Cbeyond, Inc. (business communica-
One Franklin Parkway				tions provider) (2010-2012), The
San Mateo, CA 94403-1906				Southern Company (energy company)
				(2010-2012) and The Washington
				Post Company (education and media
				organization).
Principal Occupation During at Least the Past 5 Years:
Executive Vice President – Government Affairs, General Counsel and Corporate Secretary, PepsiCo, Inc. (consumer products) (July 2012); and
formerly, John A. Sibley Professor of Corporate and Business Law, University of Georgia School of Law (2011-2012); Senior Vice President –
Government Affairs, General Counsel and Secretary, PepsiCo, Inc. (2004-2011); Senior Fellow of The Brookings Institution (2003-2004);
Visiting Professor, University of Georgia School of Law (2004); and Deputy Attorney General, U.S. Department of Justice (2001-2003).

John B. Wilson (1959)	Lead	Trustee since	114	None
One Franklin Parkway	Independent	2006 and Lead
San Mateo, CA 94403-1906	Trustee	Independent
		Trustee since
		2008
Principal Occupation During at Least the Past 5 Years:
President, Staples Europe (office supplies) (2012); President and Founder, Hyannis Port Capital, Inc. (real estate and private equity
investing); serves on private and non-profit boards; and formerly, Chief Operating Officer and Executive Vice President, Gap, Inc. (retail)
(1996-2000); Chief Financial Officer and Executive Vice President – Finance and Strategy, Staples, Inc. (1992-1996); Senior Vice President –
Corporate Planning, Northwest Airlines, Inc. (airlines) (1990-1992); and Vice President and Partner, Bain & Company (consulting firm)
(1986-1990).

Annual Report | 51


Interested Board Members and Officers


			Number of Portfolios in
Name, Year of Birth		Length of	Fund Complex Overseen	Other Directorships Held
and Address	Position	Time Served	by Board Member*	During at Least the Past 5 Years

**Gregory E. Johnson (1961)	Trustee	Since 2007	152	None
One Franklin Parkway
San Mateo, CA 94403-1906
Principal Occupation During at Least the Past 5 Years:
Chairman of the Board, Member – Office of the Chairman, Director, President and Chief Executive Officer, Franklin Resources, Inc.; officer
and/or director or trustee, as the case may be, of some of the other subsidiaries of Franklin Resources, Inc. and of 44 of the investment
companies in Franklin Templeton Investments; and Chairman, Investment Company Institute.

**Rupert H. Johnson, Jr. (1940)	Chairman of	Chairman of the	141	None
One Franklin Parkway	the Board and	Board and Trustee
San Mateo, CA 94403-1906	Trustee	since June 2013
Principal Occupation During at Least the Past 5 Years:
Vice Chairman, Member – Office of the Chairman and Director, Franklin Resources, Inc.; Director, Franklin Advisers, Inc.; Senior Vice
President, Franklin Advisory Services, LLC; and officer and/or director or trustee, as the case may be, of some of the other subsidiaries of
Franklin Resources, Inc. and of 41 of the investment companies in Franklin Templeton Investments.

Alison E. Baur (1964)	Vice President	Since 2012	Not Applicable	Not Applicable
One Franklin Parkway
San Mateo, CA 94403-1906
Principal Occupation During at Least the Past 5 Years:
Deputy General Counsel, Franklin Templeton Investments; and officer of some of the other subsidiaries of Franklin Resources, Inc. and of 46
of the investment companies in Franklin Templeton Investments.

Laura F. Fergerson (1962)	Chief	Since 2009	Not Applicable	Not Applicable
One Franklin Parkway	Executive
San Mateo, CA 94403-1906	Officer –
	Finance and
	Administration
Principal Occupation During at Least the Past 5 Years:
Senior Vice President, Franklin Templeton Services, LLC; and officer of 46 of the investment companies in Franklin Templeton Investments.

Gaston Gardey (1967)	Treasurer,	Since 2009	Not Applicable	Not Applicable
One Franklin Parkway	Chief Financial
San Mateo, CA 94403-1906	Officer and
	Chief
	Accounting
	Officer
Principal Occupation During at Least the Past 5 Years:
Director, Fund Accounting, Franklin Templeton Investments; and officer of 27 of the investment companies in Franklin Templeton Investments.

52 | Annual Report


			Number of Portfolios in
Name, Year of Birth		Length of	Fund Complex Overseen	Other Directorships Held
and Address	Position	Time Served	by Board Member*	During at Least the Past 5 Years
Aliya S. Gordon (1973)	Vice President	Since 2009	Not Applicable	Not Applicable
One Franklin Parkway
San Mateo, CA 94403-1906
Principal Occupation During at Least the Past 5 Years:
Senior Associate General Counsel, Franklin Templeton Investments; officer of 46 of the investment companies in Franklin Templeton
Investments; and formerly, Litigation Associate, Steefel, Levitt & Weiss, LLP (2000-2004).

Steven J. Gray (1955)	Vice President	Since 2009	Not Applicable	Not Applicable
One Franklin Parkway
San Mateo, CA 94403-1906
Principal Occupation During at Least the Past 5 Years:
Senior Associate General Counsel, Franklin Templeton Investments; Vice President, Franklin Templeton Distributors, Inc.; and officer of 46 of
the investment companies in Franklin Templeton Investments.

Selena L. Holmes (1965)	Vice President	Since 2012	Not Applicable	Not Applicable
100 Fountain Parkway	– AML
St. Petersburg, FL 33716-1205	Compliance
Principal Occupation During at Least the Past 5 Years:
Director, Global Compliance Monitoring; and officer of 46 of the investment companies in Franklin Templeton Investments.

Edward B. Jamieson (1948)	President and	Since 2010	Not Applicable	Not Applicable
One Franklin Parkway	Chief
San Mateo, CA 94403-1906	Executive
	Officer –
	Investment
	Management
Principal Occupation During at Least the Past 5 Years:
President, Chief Investment Officer and Director, Franklin Advisers, Inc.; Executive Vice President, Franklin Templeton Institutional, LLC;
and officer and/or trustee, as the case may be, of some of the other subsidiaries of Franklin Resources, Inc. and of 10 of the investment
companies in Franklin Templeton Investments.

Kimberly H. Novotny (1972)	Vice President	Since March 2013	Not Applicable	Not Applicable
300 S.E. 2nd Street
Fort Lauderdale, FL 33301-1923
Principal Occupation During at Least the Past 5 Years:
Associate General Counsel, Franklin Templeton Investments; Vice President and Secretary, Fiduciary Trust International of the South; Vice
President, Templeton Investment Counsel, LLC; Assistant Secretary, Franklin Resources, Inc.; and officer of 46 of the investment companies
in Franklin Templeton Investments.

Robert C. Rosselot (1960)	Chief	Since March 2013	Not Applicable	Not Applicable
300 S.E. 2nd Street	Compliance
Fort Lauderdale, FL 33301-1923	Officer
Principal Occupation During at Least the Past 5 Years:
Director, Global Compliance, Franklin Templeton Investments; officer of 46 of the investment companies in Franklin Templeton Investments;
and formerly, Senior Associate General Counsel, Franklin Templeton Investments (2007-2013); and Secretary and Vice President, Templeton
Group of Funds (2004-2013).

Annual Report | 53


			Number of Portfolios in
Name, Year of Birth		Length of	Fund Complex Overseen	Other Directorships Held
and Address	Position	Time Served	by Board Member*	During at Least the Past 5 Years
Karen L. Skidmore (1952)	Vice President	Since 2006	Not Applicable	Not Applicable
One Franklin Parkway	and Secretary
San Mateo, CA 94403-1906
Principal Occupation During at Least the Past 5 Years:
Senior Associate General Counsel, Franklin Templeton Investments; and officer of 46 of the investment companies in Franklin
Templeton Investments.

Craig S. Tyle (1960)	Vice President	Since 2005	Not Applicable	Not Applicable
One Franklin Parkway
San Mateo, CA 94403-1906
Principal Occupation During at Least the Past 5 Years:
General Counsel and Executive Vice President, Franklin Resources, Inc.; and officer of some of the other subsidiaries of Franklin Resources,
Inc. and of 46 of the investment companies in Franklin Templeton Investments.

Lori A. Weber (1964)	Vice President	Since 2011	Not Applicable	Not Applicable
300 S.E. 2nd Street
Fort Lauderdale, FL 33301-1923
Principal Occupation During at Least the Past 5 Years:
Senior Associate General Counsel, Franklin Templeton Investments; Assistant Secretary, Franklin Resources, Inc.; Vice President and
Secretary, Templeton Investment Counsel, LLC; Vice President, Fiduciary Trust International of the South; and officer of 46 of the investment
companies in Franklin Templeton Investments.

*We base the number of portfolios on each separate series of the U.S. registered investment companies within the Franklin Templeton Investments fund complex. These portfolios
have a common investment manager or affiliated investment managers.
**Gregory E. Johnson is considered to be an interested person of the Fund under the federal securities laws due to his position as an officer and director of Franklin Resources, Inc.
(Resources), which is the parent company of the Fund’s investment manager and distributor. Rupert H. Johnson, Jr. is considered to be an interested person of the Fund under the
federal securities laws due to his position as officer and director and major shareholder of Resources.
Note 1: Rupert H. Johnson, Jr. is the uncle of Gregory E. Johnson.
Note 2: Officer information is current as of the date of this report. It is possible that after this date, information about officers may change.
Note 3: Effective June 13, 2013, Charles B. Johnson ceased to be a trustee of the Fund.

The Sarbanes-Oxley Act of 2002 and Rules adopted by the Securities and Exchange Commission require the Fund to disclose whether the Fund’s Audit Committee includes
at least one member who is an audit committee financial expert within the meaning of such Act and Rules. The Fund’s Board has determined that there is at least one such
financial expert on the Audit Committee and has designated John B. Wilson as its audit committee financial expert. The Board believes that Mr. Wilson qualifies as such an
expert in view of his extensive business background and experience, including service as chief financial officer of Staples, Inc. from 1992 to 1996. Mr. Wilson has been a
Member and Chairman of the Fund’s Audit Committee since 2006. As a result of such background and experience, the Board believes that Mr. Wilson has acquired an under-
standing of generally accepted accounting principles and financial statements, the general application of such principles in connection with the accounting estimates,
accruals and reserves, and analyzing and evaluating financial statements that present a breadth and level of complexity of accounting issues generally comparable to those
of the Fund, as well as an understanding of internal controls and procedures for financial reporting and an understanding of audit committee functions. Mr. Wilson is an
independent Board member as that term is defined under the relevant Securities and Exchange Commission Rules and Releases.

The Statement of Additional Information (SAI) includes additional information about the board members and is available, without charge, upon request. Shareholders may
call (800) DIAL BEN/342-5236 to request the SAI.

54 | Annual Report

Franklin Templeton Fund Allocator Series

Shareholder Information

Proxy Voting Policies and Procedures

Quarterly Statement of Investments

Householding of Reports and Prospectuses

Annual Report | 55

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	Contents
Shareholder Letter	1	Annual Report		Franklin LifeSmart 2035		Financial Statements	137
		Economic and Market Overview	3	Retirement Target Fund	45	Notes to Financial Statements	149
		Franklin LifeSmart 2015		Franklin LifeSmart 2040		Report of Independent
		Retirement Target Fund	5	Retirement Target Fund	55	Registered Public
		Franklin LifeSmart 2020		Franklin LifeSmart 2045		Accounting Firm	175
		Retirement Target Fund	15	Retirement Target Fund	65	Tax Information	176
		Franklin LifeSmart 2025		Franklin LifeSmart 2050		Board Members and Officers	179
		Retirement Target Fund	25	Retirement Target Fund	75
						Shareholder Information	184
		Franklin LifeSmart 2030		Financial Highlights and
		Retirement Target Fund	35	Statements of Investments	85

| 1

Annual Report

Economic and Market Overview

Annual Report | 3

in Brazil, India and Indonesia raised interest rates in the second half of 2013 as they sought to curb inflation.

The foregoing information reflects our analysis and opinions as of December 31, 2013. The information is not a
complete analysis of every aspect of any market, country, industry, security or fund. Statements of fact are from
sources considered reliable.

4 | Annual Report

Franklin LifeSmart 2015 Retirement Target Fund

(formerly, Franklin Templeton 2015 Retirement Target Fund)

Your Fund’s Goal and Main Investments: Franklin LifeSmart 2015 Retirement Target Fund seeks the highest level of long-term total return, which consists of capital appreciation and income, consistent with the Fund’s asset allocation. The Fund allocates among the broad asset classes of equity and fixed income by investing in a distinctly weighted combination of underlying funds, predominantly other Franklin Templeton mutual funds, with an increasing emphasis on income as the target date of 2015 approaches.¹The target date is the approximate retirement year of the investor.

This annual report for Franklin LifeSmart 2015 Retirement Target Fund
covers the fiscal year ended December 31, 2013.

Performance Overview
Franklin LifeSmart 2015 Retirement Target Fund – Class A delivered a +12.27% cumulative total return for the year under review. By comparison, the Fund’s equity benchmarks, the Standard & Poor’s^®500 Index (S&P 500^®), a broad

1. Effective 7/1/13, the Fund implemented changes to its target allocations; short-term investment allocations were
combined into the fixed income fund target allocation. The Fund’s investment goal remained the same.

The dollar value, number of shares or principal amount, and names of all portfolio holdings are listed in the Fund’s
SOI, which begins on page 90.

Annual Report | 5


Top 10 Fund Holdings
Franklin LifeSmart 2015
Retirement Target Fund
12/31/13
% of Total
Investments
Templeton Global Total Return Fund –
Class R6	15.0	%
Franklin U.S. Government Securities
Fund – Class R6	11.2	%
Franklin Low Duration Total Return
Fund – Class R6	9.9	%
Franklin DynaTech Fund – Class R6	7.5	%
Franklin Rising Dividends Fund –
Class R6	6.9	%
Franklin International Small Cap Growth
Fund – Class R6	5.7	%
Franklin Strategic Income Fund –
Class R6	5.4	%
iShares Intermediate Credit Bond, ETF	4.5	%
Mutual European Fund – Class R6	4.1	%
Franklin Growth Fund – Class R6	3.0	%

measure of U.S. stock performance, and the MSCI Europe, Australasia, Far East (EAFE) Index, which measures global stock performance for developed markets excluding the U.S. and Canada, generated total returns of +32.39% and +23.29%.²The Fund’s fixed income benchmark, the Barclays U.S. Aggregate Index, which tracks U.S. investment-grade bonds, had a -2.02% total return.²You can find the Fund’s long-term performance data in the Performance Summary beginning on page 8.

Investment Strategy

When selecting equity funds, we consider the foreign and domestic exposure, market capitalization ranges, and investment style (growth vs. value) of the underlying Franklin Templeton funds and other fund investments (collectively, “fund investments”). When selecting fixed income funds, we focus primarily on maximizing income appropriate to the Fund’s specific risk profile. In evaluating the risk level of the fund investments, we analyze such factors as: (a) relative and absolute performance, including correlations with other fund investments as well as corresponding benchmarks, and (b) their volatility (the variability of returns from one period to the next). We attempt to invest the assets of each Target Fund in the same fund investments and will vary the fund investments’ allocation percentages based upon each Fund’s risk/return level. We change the Fund’s target asset allocation over time, and it becomes increasingly conservative as the stated target date draws near. At the “landing point” (reached at the target date), the Fund reaches its most conservative asset allocation and thereafter, such strategic asset allocation will generally become fixed.

Manager’s Discussion

The Fund’s performance can be attributed largely to its allocation among equities and fixed income securities and to the actual performance of the fund investments. This allocation shifts every year, in accordance with the retirement date associated with the portfolio.

At period-end, Franklin LifeSmart 2015 Retirement Target Fund allocated 47.6% of total investments to equity and 48.6% to fixed income. Domestic equity exposure was 66.0% of the total equity weighting, and foreign equity made up the balance. The portfolio was diversified across capitalization sizes and investment styles, and on December 31, 2013, we held shares in large-, mid- and small-capitalization equity funds, representing both growth and

2. Source: © 2014 Morningstar. All Rights Reserved. The information contained herein: (1) is proprietary to Morningstar
and/or its content providers; (2) may not be copied or distributed; and (3) is not warranted to be accurate, complete or
timely. Neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of
this information. The indexes are unmanaged and include reinvestment of any income or distributions. One cannot
invest directly in an index, and an index is not representative of the Fund’s portfolio.

6 | Annual Report

value styles. Franklin DynaTech Fund – Class R6, at 7.5% of the Fund’s total investments, was our largest equity fund weighting at period-end. On the fixed income side, domestic exposure was 63.2% of the Fund’s total fixed income weighting, with the balance in foreign fixed income. Templeton Global Total Return Fund – Class R6 was our largest fixed income fund weighting at 15.0% of total investments.

Our largest domestic growth fund holding, Franklin DynaTech Fund –Class R6, outperformed the S&P 500, while our largest domestic value fund holding, Franklin Rising Dividends Fund – Class R6, underperformed the index. Our largest foreign equity fund holding, Franklin International Small Cap Growth Fund – Class R6 outperformed the MSCI EAFE Index. On the fixed income side, Templeton Global Total Return Fund – Class R6 outperformed the Barclays U.S. Aggregate Index while Franklin U.S. Government Securities Fund – Class R6 performed better than the index.

Thank you for your continued participation in Franklin LifeSmart 2015 Retirement Target Fund. We look forward to serving your future investment needs.

CFA^®is a trademark owned by CFA Institute.

The foregoing information reflects our analysis, opinions and portfolio holdings as of December 31, 2013, the end

of the reporting period. The way we implement our main investment strategies and the resulting portfolio holdings

may change depending on factors such as market and economic conditions. These opinions may not be relied upon

as investment advice or an offer for a particular security. The information is not a complete analysis of every aspect

of any market, country, industry, security or the Fund. Statements of fact are from sources considered reliable,

but the investment manager makes no representation or warranty as to their completeness or accuracy. Although

historical performance is no guarantee of future results, these insights may help you understand our investment

management philosophy.

Annual Report | 7

Performance Summary as of 12/31/13

Franklin LifeSmart 2015 Retirement Target Fund


Price and Distribution Information
Class A (Symbol: FTRAX)				Change		12/31/13		12/31/12
Net Asset Value (NAV)			+$	0.61	$	12.28	$	11.67
Distributions (1/1/13–12/31/13)
Dividend Income	$	0.2725
Short-Term Capital Gain	$	0.0795
Long-Term Capital Gain	$	0.4471
Total	$	0.7991
Class C (Symbol: FRTCX)				Change		12/31/13		12/31/12
Net Asset Value (NAV)			+$	0.59	$	12.16	$	11.57
Distributions (1/1/13–12/31/13)
Dividend Income	$	0.1903
Short-Term Capital Gain	$	0.0795
Long-Term Capital Gain	$	0.4471
Total	$	0.7169
Class R (Symbol: n/a)				Change		12/31/13		12/31/12
Net Asset Value (NAV)			+$	0.61	$	12.25	$	11.64
Distributions (1/1/13–12/31/13)
Dividend Income	$	0.2434
Short-Term Capital Gain	$	0.0795
Long-Term Capital Gain	$	0.4471
Total	$	0.7700
Class R6 (Symbol: n/a)				Change		12/31/13		5/1/13
Net Asset Value (NAV)			+$	0.15	$	12.32	$	12.17
Distributions (5/1/13–12/31/13)
Dividend Income	$	0.2512
Short-Term Capital Gain	$	0.0795
Long-Term Capital Gain	$	0.4471
Total	$	0.7778

8 | Annual Report


Performance Summary (continued)


Price and Distribution Information (continued)
Advisor Class (Symbol: n/a)		Change		12/31/13		12/31/12
Net Asset Value (NAV)	+$	0.61	$	12.31	$	11.70
Distributions (1/1/13–12/31/13)
Dividend Income	$	0.3082
Short-Term Capital Gain	$	0.0795
Long-Term Capital Gain	$	0.4471
Total	$	0.8348

Performance¹

Cumulative total return excludes sales charges. Aggregate and average annual total returns and value of $10,000
investment include maximum sales charges. Class A: 5.75% maximum initial sales charge; Class C: 1% contingent
deferred sales charge in first year only; Class R/R6/Advisor Class: no sales charges.


Class A		1-Year			5-Year			Inception (8/1/06)
Cumulative Total Return²	+	12.27	%	+	76.18	%	+	56.44	%
Average Annual Total Return³	+	5.83	%	+	10.67	%	+	5.37	%
Value of $10,000 Investment⁴	$	10,583		$	16,599		$	14,744
Total Annual Operating Expenses⁵		0.89% (with waiver)						1.41% (without waiver)
Class C		1-Year			5-Year			Inception (8/1/06)
Cumulative Total Return²	+	11.46	%	+	70.18	%	+	48.50	%
Average Annual Total Return³	+	10.46	%	+	11.22	%	+	5.48	%
Value of $10,000 Investment⁴	$	11,046		$	17,018		$	14,850
Total Annual Operating Expenses⁵		1.59% (with waiver)						2.11% (without waiver)
Class R		1-Year			5-Year			Inception (8/1/06)
Cumulative Total Return²	+	12.04	%	+	74.39	%	+	54.03	%
Average Annual Total Return³	+	12.04	%	+	11.76	%	+	6.00	%
Value of $10,000 Investment⁴	$	11,204		$	17,439		$	15,403
Total Annual Operating Expenses⁵		1.09% (with waiver)						1.61% (without waiver)
Class R6								Inception (5/1/13)
Cumulative Total Return²							+	7.78	%
Aggregate Total Return⁶							+	7.78	%
Value of $10,000 Investment⁴							$	10,778
Total Annual Operating Expenses⁵		0.54% (with waiver)						0.99% (without waiver)
Advisor Class		1-Year			5-Year			Inception (8/1/06)
Cumulative Total Return²	+	12.55	%	+	78.87	%	+	59.96	%
Average Annual Total Return³	+	12.55	%	+	12.33	%	+	6.54	%
Value of $10,000 Investment⁴	$	11,255		$	17,887		$	15,996
Total Annual Operating Expenses⁵		0.59% (with waiver)						1.11% (without waiver)

Performance data represent past performance, which does not guarantee future results. Investment return and principal
value will fluctuate, and you may have a gain or loss when you sell your shares. Current performance may differ from
figures shown. For most recent month-end performance, go to franklintempleton.com or call (800) 342-5236.

Annual Report | 9

Performance Summary (continued)

Total Return Index Comparison for a Hypothetical $10,000 Investment¹

10 | Annual Report

Annual Report | 11

Endnotes

The Fund’s investment risk changes over time as its asset allocation changes. Since the Fund invests in underlying funds, which may engage
in a variety of investment strategies involving certain risks, the Fund is subject to those same risks. All investments involve risks, including
possible loss of principal. Principal invested is not guaranteed at any time, including at or after the Fund’s retirement target date, nor is there
any guarantee that the Fund will provide sufficient income at or through the investor’s retirement. Stock prices fluctuate, sometimes rapidly
and dramatically, due to factors affecting individual companies, particular industries or sectors, or general market conditions. Bond prices
generally move in the opposite direction of interest rates. Thus, as prices of bonds in the Fund adjust to a rise in interest rates, the Fund’s
share price may decline. Foreign investing carries additional risks such as currency and market volatility and political or social instability,
risks that are heightened in developing countries. These risks are described more fully in the Fund’s prospectus. Investors should consult their
financial advisors for help selecting the appropriate fund of funds, or fund combination, based on an evaluation of their investment objectives,
retirement time horizons and risk tolerance. The Fund is actively managed but there is no guarantee that the manager’s investment decisions
will produce the desired results.

Class C: These shares have higher annual fees and expenses than Class A shares.

Class R: Shares are available to certain eligible investors as described in the prospectus. These shares have higher annual fees and
expenses than Class A shares.

Class R6: Shares are available to certain eligible investors as described in the prospectus.

Advisor Class: Shares are available to certain eligible investors as described in the prospectus.

1. The Fund has an expense reduction contractually guaranteed through at least 4/30/14 and a fee waiver associated with its investments in a
Franklin Templeton money fund, contractually guaranteed through at least its current fiscal year end. Fund investment results reflect the expense
reduction and fee waiver, to the extent applicable; without these reductions, the results would have been lower. As of 7/1/13, the Fund changed its
target allocation, with short-term investments combined into the fixed income allocations. As of 5/1/11, the Fund’s glide path was modified, and
among other changes, reflects a lower starting allocation to equity funds. Such changes can impact performance.
2. Cumulative total return represents the change in value of an investment over the periods indicated.
3. Average annual total return represents the average annual change in value of an investment over the periods indicated.
4. These figures represent the value of a hypothetical $10,000 investment in the Fund over the periods indicated.
5. Figures are as stated in the Fund’s current prospectus. In periods of market volatility, assets may decline significantly, causing total annual Fund
operating expenses to become higher than the figures shown.
6. Aggregate total return represents the change in value of an investment for the period indicated. Since Class R6 shares have existed for less than
one year, average annual total return is not available.
7. Source: © 2014 Morningstar. The S&P 500 is a market capitalization-weighted index of 500 stocks designed to measure total U.S. equity market
performance. The MSCI EAFE Index is a free float-adjusted, market capitalization-weighted index designed to measure equity market performance in
global developed markets excluding the U.S. and Canada. The Barclays U.S. Aggregate Index is a market capitalization-weighted index representing
the U.S. investment-grade, fixed-rate, taxable bond market with index components for government and corporate, mortgage pass-through and asset-
backed securities. All issues included are SEC registered, taxable, dollar denominated and nonconvertible, must have at least one year to final maturity
and must be rated investment grade (Baa3/BBB-/BBB- or higher) using the middle rating of Moody’s, Standard & Poor’s and Fitch, respectively.

12 | Annual Report

Your Fund’s Expenses

Franklin LifeSmart 2015 Retirement Target Fund

As a Fund shareholder, you can incur two types of costs:

Transaction costs, including sales charges (loads) on Fund purchases; and
Ongoing Fund costs, including management fees, distribution and service (12b-1) fees, and other Fund expenses. All mutual funds have ongoing costs, sometimes referred to as operating expenses.

Actual Fund Expenses

You can estimate the expenses you paid during the period by following these steps. Of course, your account value and expenses will differ from those in this illustration:

1.	Divide your account value by $1,000.
	If an account had an $8,600 value, then $8,600 ÷ $1,000 = 8.6.
2.	Multiply the result by the number under the heading “Expenses Paid During Period.”
	If Expenses Paid During Period were $7.50, then 8.6 x $7.50 = $64.50.

In this illustration, the estimated expenses paid this period are $64.50.

Hypothetical Example for Comparison with Other Funds

Annual Report | 13

Your Fund’s Expenses (continued)


		Beginning		Ending		Expenses Paid		Expenses Paid
		Account Value		Account Value		During Period*		During Period**
Class A		7/1/13		12/31/13		7/1/13–12/31/13		7/1/13–12/31/13
Actual	$	1,000	$	1,094.70	$	1.85	$	4.96
Hypothetical (5% return before expenses)	$	1,000	$	1,023.44	$	1.79	$	4.79
Class C
Actual	$	1,000	$	1,090.10	$	5.53	$	8.64
Hypothetical (5% return before expenses)	$	1,000	$	1,019.91	$	5.35	$	8.34
Class R
Actual	$	1,000	$	1,093.80	$	2.90	$	6.02
Hypothetical (5% return before expenses)	$	1,000	$	1,022.43	$	2.80	$	5.80
Class R6
Actual	$	1,000	$	1,096.20	$	0.00	$	3.12
Hypothetical (5% return before expenses)	$	1,000	$	1,025.21	$	0.00	$	3.01
Advisor Class
Actual	$	1,000	$	1,095.90	$	0.26	$	3.38
Hypothetical (5% return before expenses)	$	1,000	$	1,024.95	$	0.26	$	3.26

*Expenses are calculated using the most recent six-month expense ratio excluding expenses of the underlying funds, net of expense waivers,
annualized for each class (A: 0.35%; C: 1.05%; R: 0.55%; R6: 0.00%; and Advisor: 0.05%), multiplied by the average account value over the
period, multiplied by 184/365 to reflect the one-half year period.
**Expenses are calculated using the most recent six-month expense ratio including expenses of the underlying funds, net of expense waivers,
annualized for each class (A: 0.94%; C: 1.64%; R: 1.14%; R6: 0.59%; and Advisor: 0.64%), multiplied by the average account value over the
period, multiplied by 184/365 to reflect the one-half year period.

14 | Annual Report

Franklin LifeSmart 2020 Retirement Target Fund

Your Fund’s Goal and Main Investments: Franklin LifeSmart 2020 Retirement Target Fund seeks the highest level of long-term total return, which consists of capital appreciation and income, consistent with the Fund’s asset allocation. The Fund allocates among the broad asset classes of equity and fixed income by investing in a distinctly weighted combination of underlying funds, predominantly other Franklin Templeton mutual funds, with an increasing emphasis on income as the target date of 2020 approaches. The target date is the approximate retirement year of the investor.

This inaugural annual report for Franklin LifeSmart 2020 Retirement Target
Fund covers the period since the Fund’s inception on July 1, 2013, through
December 31, 2013.

Performance Overview

Franklin LifeSmart 2020 Retirement Target Fund – Class A delivered a +10.69% cumulative total return for the period under review. By comparison, the Fund’s equity benchmarks, the Standard & Poor’s 500 Index (S&P 500), a broad measure of U.S. stock performance, and the MSCI Europe, Australasia, Far East (EAFE) Index, which measures global stock performance for developed markets excluding the U.S. and Canada, generated total returns of +16.31%

The dollar value, number of shares or principal amount, and names of all portfolio holdings are listed in the Fund’s
SOI, which begins on page 97.

Annual Report | 15


Top 10 Fund Holdings
Franklin LifeSmart 2020
Retirement Target Fund
12/31/13
% of Total
Investments
Franklin DynaTech Fund – Class R6	10.5	%
Templeton Global Total Return Fund –
Class R6	10.1	%
Franklin Rising Dividends Fund –
Class R6	9.4	%
Franklin International Small Cap Growth
Fund – Class R6	8.5	%
Franklin U.S. Government Securities
Fund – Class R6	7.7	%
Franklin Low Duration Total Return
Fund – Class R6	6.4	%
Franklin Growth Fund – Class R6	5.7	%
Mutual European Fund – Class R6	5.3	%
Franklin Utilities Fund – Class R6	4.0	%
Franklin Strategic Income Fund –
Class R6	3.8	%

and +16.80%.¹The Fund’s fixed income benchmark, the Barclays U.S. Aggregate Index, which tracks U.S. investment-grade bonds, posted a +0.37% total return.¹You can find more of the Fund’s performance data in the Performance Summary beginning on page 18.

Investment Strategy

Manager’s Discussion

At period-end, Franklin LifeSmart 2020 Retirement Target Fund allocated 65.9% of total investments to equity and 32.8% to fixed income. Domestic equity exposure was 66.2% of the total equity weighting, and foreign equity made up the balance. The portfolio was diversified across capitalization sizes and investment styles, and on December 31, 2013, we held shares in large-, mid- and small-capitalization equity funds, representing both growth and value styles. Franklin DynaTech Fund – Class R6, at 10.5% of the Fund’s total

1. Source: © 2014 Morningstar. All Rights Reserved. The information contained herein: (1) is proprietary to Morningstar
and/or its content providers; (2) may not be copied or distributed; and (3) is not warranted to be accurate, complete or
timely. Neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of
this information. The indexes are unmanaged and include reinvestment of any income or distributions. One cannot
invest directly in an index, and an index is not representative of the Fund’s portfolio.

16 | Annual Report

investments, was our largest equity fund weighting at period-end. On the fixed income side, domestic exposure was 64.0% of the Fund’s total fixed income weighting, with the balance in foreign fixed income. Templeton Global Total Return Bond Fund – Class R6 was our largest fixed income fund weighting at 10.1% of total investments.

Our largest domestic growth fund holding, Franklin DynaTech Fund – Class R6, outperformed the S&P 500, while our largest domestic value fund holding, Franklin Rising Dividends Fund – Class R6, underperformed the index. Our largest foreign equity fund holding, Franklin International Small Cap Growth Fund – Class R6 outperformed the MSCI EAFE Index. On the fixed income side, Templeton Global Total Return Fund – Class R6 and Franklin U.S. Government Securities Fund – Class R6 outperformed the Barclays U.S. Aggregate Index.

Thank you for your participation in Franklin LifeSmart 2020 Retirement Target Fund. We look forward to serving your future investment needs.

Annual Report | 17

Performance Summary as of 12/31/13

Franklin LifeSmart 2020 Retirement Target Fund


Price and Distribution Information
Class A (Symbol: n/a)				Change		12/31/13		7/1/13
Net Asset Value (NAV)			+$	0.94	$	10.94	$	10.00
Distributions (7/1/13–12/31/13)
Dividend Income	$	0.1255
Short-Term Capital Gain	$	0.0027
Total	$	0.1282
Class C (Symbol: n/a)				Change		12/31/13		7/1/13
Net Asset Value (NAV)			+$	0.90	$	10.90	$	10.00
Distributions (7/1/13–12/31/13)
Dividend Income	$	0.1130
Short-Term Capital Gain	$	0.0027
Total	$	0.1157
Class R (Symbol: n/a)				Change		12/31/13		7/1/13
Net Asset Value (NAV)			+$	0.93	$	10.93	$	10.00
Distributions (7/1/13–12/31/13)
Dividend Income	$	0.1149
Short-Term Capital Gain	$	0.0027
Total	$	0.1176
Class R6 (Symbol: n/a)				Change		12/31/13		7/1/13
Net Asset Value (NAV)			+$	0.95	$	10.95	$	10.00
Distributions (7/1/13–12/31/13)
Dividend Income	$	0.1308
Short-Term Capital Gain	$	0.0027
Total	$	0.1335
Advisor Class (Symbol: n/a)				Change		12/31/13		7/1/13
Net Asset Value (NAV)			+$	0.95	$	10.95	$	10.00
Distributions (7/1/13–12/31/13)
Dividend Income	$	0.1291
Short-Term Capital Gain	$	0.0027
Total	$	0.1318

18 | Annual Report

Performance Summary (continued)


Performance¹
Cumulative total return excludes sales charges. Aggregate total return and value of $10,000 investment include maximum
sales charges. Class A: 5.75% maximum initial sales charge; Class C: 1% contingent deferred sales charge in first year only;
Class R/R6/Advisor Class: no sales charges.
Class A			Inception (7/1/13)
Cumulative Total Return²		+	10.69	%
Aggregate Total Return³		+	4.33	%
Value of $10,000 Investment⁴		$	10,433
Total Annual Operating Expenses⁵	0.91% (with waiver)		2.77% (without waiver)
Class C			Inception (7/1/13)
Cumulative Total Return²		+	10.16	%
Aggregate Total Return³		+	9.16	%
Value of $10,000 Investment⁴		$	10,916
Total Annual Operating Expenses⁵	1.61% (with waiver)		3.47% (without waiver)
Class R			Inception (7/1/13)
Cumulative Total Return²		+	10.48	%
Aggregate Total Return³		+	10.48	%
Value of $10,000 Investment⁴		$	11,048
Total Annual Operating Expenses⁵	1.11% (with waiver)		2.97% (without waiver)
Class R6			Inception (7/1/13)
Cumulative Total Return²		+	10.84	%
Aggregate Total Return³		+	10.84	%
Value of $10,000 Investment⁴		$	11,084
Total Annual Operating Expenses⁵	0.56% (with waiver)		2.29% (without waiver)
Advisor Class			Inception (7/1/13)
Cumulative Total Return²		+	10.83	%
Aggregate Total Return³		+	10.83	%
Value of $10,000 Investment⁴		$	11,083
Total Annual Operating Expenses⁵	0.61% (with waiver)		2.47% (without waiver)

Annual Report | 19

Performance Summary (continued)

Total Return Index Comparison for a Hypothetical $10,000 Investment¹

20 | Annual Report

Annual Report | 21

Performance Summary (continued)

Endnotes

The Fund’s investment risk changes over time as its asset allocation changes. Since the Fund invests in underlying funds, which may engage
in a variety of investment strategies involving certain risks, the Fund is subject to those same risks. All investments involve risks, including
possible loss of principal. Principal invested is not guaranteed at any time, including at or after the Fund’s retirement target date, nor is there
any guarantee that the Fund will provide sufficient income at or through the investor’s retirement. Stock prices fluctuate, sometimes rapidly
and dramatically, due to factors affecting individual companies, particular industries or sectors, or general market conditions. Bond prices
generally move in the opposite direction of interest rates. Thus, as prices of bonds in the Fund adjust to a rise in interest rates, the Fund’s
share price may decline. Foreign investing carries additional risks such as currency and market volatility and political or social instability,
risks that are heightened in developing countries. These risks are described more fully in the Fund’s prospectus. Investors should consult their
financial advisors for help selecting the appropriate fund of funds, or fund combination, based on an evaluation of their investment objectives,
retirement time horizons and risk tolerance. The Fund is actively managed but there is no guarantee that the manager’s investment decisions
will produce the desired results.

Class C: These shares have higher annual fees and expenses than Class A shares.

Class R: Shares are available to certain eligible investors as described in the prospectus. These shares have higher annual fees and
expenses than Class A shares.

Class R6: Shares are available to certain eligible investors as described in the prospectus.

Advisor Class: Shares are available to certain eligible investors as described in the prospectus.

1. The Fund has an expense reduction contractually guaranteed through at least 12/31/14 and a fee waiver associated with its investments in a
Franklin Templeton money fund, contractually guaranteed through at least its current fiscal year end. Fund investment results reflect the expense
reduction and fee waiver, to the extent applicable; without these reductions, the results would have been lower.
2. Cumulative total return represents the average annual change in value of an investment over the period indicated.
3. Aggregate total return represents the change in value of an investment over the period indicated. Since the Fund has existed for less than one
year, average annual total returns are not available.
4. These figures represent the value of a hypothetical $10,000 investment in the Fund over the period indicated.
5. Figures are as stated in the Fund’s current prospectus. In periods of market volatility, assets may decline significantly, causing total annual Fund
operating expenses to become higher than the figures shown.
6. Source: © 2014 Morningstar. The S&P 500 is a market capitalization-weighted index of 500 stocks designed to measure total U.S. equity market
performance. The MSCI EAFE Index is a free float-adjusted, market capitalization-weighted index designed to measure equity market performance in
global developed markets excluding the U.S. and Canada. The Barclays U.S. Aggregate Index is a market capitalization-weighted index representing
the U.S. investment-grade, fixed-rate, taxable bond market with index components for government and corporate, mortgage pass-through and asset-
backed securities. All issues included are SEC registered, taxable, dollar denominated and nonconvertible, must have at least one year to final maturity
and must be rated investment grade (Baa3/BBB-/BBB- or higher) using the middle rating of Moody’s, Standard & Poor’s and Fitch, respectively.

22 | Annual Report

Your Fund’s Expenses

Franklin LifeSmart 2020 Retirement Target Fund

As a Fund shareholder, you can incur two types of costs:

Transaction costs, including sales charges (loads) on Fund purchases; and
Ongoing Fund costs, including management fees, distribution and service (12b-1) fees, and other Fund expenses. All mutual funds have ongoing costs, sometimes referred to as operating expenses.

Actual Fund Expenses

You can estimate the expenses you paid during the period by following these steps. Of course, your account value and expenses will differ from those in this illustration:

1.	Divide your account value by $1,000.
	If an account had an $8,600 value, then $8,600 ÷ $1,000 = 8.6.
2.	Multiply the result by the number under the heading “Expenses Paid During Period.”
	If Expenses Paid During Period were $7.50, then 8.6 x $7.50 = $64.50.

In this illustration, the estimated expenses paid this period are $64.50.

Hypothetical Example for Comparison with Other Funds

Annual Report | 23

Your Fund’s Expenses (continued)


		Beginning		Ending		Expenses Paid		Expenses Paid
		Account Value		Account Value		During Period*		During Period**
Class A		7/1/13		12/31/13		7/1/13–12/31/13		7/1/13–12/31/13
Actual	$	1,000	$	1,106.90	$	1.27	$	4.70
Hypothetical (5% return before expenses)	$	1,000	$	1,024.00	$	1.22	$	4.53
Class C
Actual	$	1,000	$	1,101.60	$	5.53	$	8.96
Hypothetical (5% return before expenses)	$	1,000	$	1,019.91	$	5.35	$	8.64
Class R
Actual	$	1,000	$	1,104.80	$	2.90	$	6.33
Hypothetical (5% return before expenses)	$	1,000	$	1,022.43	$	2.80	$	6.11
Class R6
Actual	$	1,000	$	1,108.40	$	0.00	$	3.44
Hypothetical (5% return before expenses)	$	1,000	$	1,024.95	$	0.00	$	3.31
Advisor Class
Actual	$	1,000	$	1,108.30	$	0.26	$	3.70
Hypothetical (5% return before expenses)	$	1,000	$	1,024.95	$	0.26	$	3.57

*Expenses are calculated using the most recent six-month expense ratio excluding expenses of the underlying funds, net of expense waivers,
annualized for each class (A: 0.24%; C: 1.05%; R: 0.55%; R6: 0.00%; and Advisor: 0.05%), multiplied by the average account value over the
period, multiplied by 184/365 to reflect the one-half year period. The multiplier is 183/365 for Actual expenses to reflect the number of days
since inception.
**Expenses are calculated using the most recent six-month expense ratio including expenses of the underlying funds, net of expense waivers,
annualized for each class (A: 0.89%; C: 1.70%; R: 1.20%; R6: 0.65%; and Advisor: 0.70%), multiplied by the average account value over the
period, multiplied by 184/365 to reflect the one-half year period. The multiplier is 183/365 for Actual expenses to reflect the number of days
since inception.

24 | Annual Report

Franklin LifeSmart 2025 Retirement Target Fund

(formerly, Franklin Templeton 2025 Retirement Target Fund)

Your Fund’s Goal and Main Investments: Franklin LifeSmart 2025 Retirement Target Fund seeks the highest level of long-term total return, which consists of capital appreciation and income, consistent with the Fund’s asset allocation. The Fund allocates among the broad asset classes of equity and fixed income by investing in a distinctly weighted combination of underlying funds, predominantly other Franklin Templeton mutual funds, with an increasing emphasis on income as the target date of 2025 approaches.¹The target date is the approximate retirement year of the investor.

This annual report for Franklin LifeSmart 2025 Retirement Target Fund Grade-0.1%
covers the fiscal year ended December 31, 2013.

Performance Overview

Franklin LifeSmart 2025 Retirement Target Fund – Class A delivered a
+20.18% cumulative total return for the year under review. By comparison,
the Fund’s equity benchmarks, the Standard & Poor’s 500 Index (S&P 500), a
broad measure of U.S. stock performance, and the MSCI Europe, Australasia,
Far East (EAFE) Index, which measures global stock performance for developed

1. Effective 7/1/13, the Fund implemented changes to its target allocations; short-term investment allocations were
combined into the fixed income fund target allocation. The Fund’s investment goal remained the same.

The dollar value, number of shares or principal amount, and names of all portfolio holdings are listed in the Fund’s
SOI, which begins on page 103.
Annual Report | 25


Top 10 Fund Holdings
Franklin LifeSmart 2025
Retirement Target Fund
12/31/13
% of Total
Investments
Franklin DynaTech Fund – Class R6	12.9	%
Franklin Rising Dividends Fund –
Class R6	11.7	%
Franklin International Small Cap Growth
Fund – Class R6	9.6	%
Templeton Global Total Return Fund –
Class R6	6.3	%
Mutual European Fund – Class R6	6.2	%
Franklin Growth Fund – Class R6	4.8	%
Franklin U.S. Government Securities
Fund – Class R6	4.8	%
Franklin Biotechnology Discovery
Fund – Class R6	4.5	%
Franklin Utilities Fund – Class R6	4.4	%
Franklin Low Duration Total Return
Fund – Class R6	3.7	%

markets excluding the U.S. and Canada, generated total returns of +32.39% and +23.29%.²The Fund’s fixed income benchmark, the Barclays U.S. Aggregate Index, which tracks U.S. investment-grade bonds, had a -2.02% total return.²You can find the Fund’s long-term performance data in the Performance Summary beginning on page 28.

Investment Strategy

Manager’s Discussion

At period-end, Franklin LifeSmart 2025 Retirement Target Fund allocated 77.0% of total investments to equity and 20.3% to fixed income. Domestic equity exposure was 67.1% of the total equity weighting, and foreign equity made up the balance. The portfolio was diversified across capitalization sizes and investment styles, and on December 31, 2013, we held shares in large-, mid- and small-capitalization equity funds, representing both growth and value styles. Franklin DynaTech Fund – Class R6, at 12.9% of the Fund’s total

2. Source: © 2014 Morningstar. All Rights Reserved. The information contained herein: (1) is proprietary to Morningstar
and/or its content providers; (2) may not be copied or distributed; and (3) is not warranted to be accurate, complete or
timely. Neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of
this information. The indexes are unmanaged and include reinvestment of any income or distributions. One cannot
invest directly in an index, and an index is not representative of the Fund’s portfolio.

26 | Annual Report

investments, was our largest equity fund weighting at period-end. On the fixed income side, domestic exposure was 63.1% of the Fund’s total fixed income weighting, with the balance in foreign fixed income. Templeton Global Total Return Fund – Class R6 was our largest fixed income fund weighting at 6.3% of total investments.

Our largest domestic growth fund holding, Franklin DynaTech Fund – Class R6, outperformed the S&P 500, while our largest domestic value fund holding, Franklin Rising Dividends Fund – Class R6, underperformed the index. Our largest foreign equity fund holding, Franklin International Small Cap Growth Fund – Class R6 outperformed the MSCI EAFE Index. On the fixed income side, Templeton Global Total Return Fund – Class R6 outperformed the Barclays U.S. Aggregate Index while Franklin U.S. Government Securities Fund –Class R6 performed better than the index.

Thank you for your continued participation in Franklin LifeSmart 2025 Retirement Target Fund. We look forward to serving your future investment needs.

The foregoing information reflects our analysis, opinions and portfolio holdings as of December 31, 2013, the end
of the reporting period. The way we implement our main investment strategies and the resulting portfolio holdings
may change depending on factors such as market and economic conditions. These opinions may not be relied upon
as investment advice or an offer for a particular security. The information is not a complete analysis of every aspect
of any market, country, industry, security or the Fund. Statements of fact are from sources considered reliable,
but the investment manager makes no representation or warranty as to their completeness or accuracy. Although
historical performance is no guarantee of future results, these insights may help you understand our investment
management philosophy.

Annual Report | 27

Performance Summary as of 12/31/13

Franklin LifeSmart 2025 Retirement Target Fund


Price and Distribution Information
Class A (Symbol: FTRTX)				Change		12/31/13		12/31/12
Net Asset Value (NAV)			+$	1.65	$	12.76	$	11.11
Distributions (1/1/13–12/31/13)
Dividend Income	$	0.1872
Short-Term Capital Gain	$	0.0873
Long-Term Capital Gain	$	0.2947
Total	$	0.5692
Class C (Symbol: FTTCX)				Change		12/31/13		12/31/12
Net Asset Value (NAV)			+$	1.63	$	12.60	$	10.97
Distributions (1/1/13–12/31/13)
Dividend Income	$	0.1098
Short-Term Capital Gain	$	0.0873
Long-Term Capital Gain	$	0.2947
Total	$	0.4918
Class R (Symbol: n/a)				Change		12/31/13		12/31/12
Net Asset Value (NAV)			+$	1.65	$	12.72	$	11.07
Distributions (1/1/13–12/31/13)
Dividend Income	$	0.1658
Short-Term Capital Gain	$	0.0873
Long-Term Capital Gain	$	0.2947
Total	$	0.5478
Class R6 (Symbol: n/a)				Change		12/31/13		5/1/13
Net Asset Value (NAV)			+$	1.05	$	12.79	$	11.74
Distributions (5/1/13–12/31/13)
Dividend Income	$	0.1823
Short-Term Capital Gain	$	0.0873
Long-Term Capital Gain	$	0.2947
Total	$	0.5643

28 | Annual Report


Performance Summary (continued)


Price and Distribution Information (continued)
Advisor Class (Symbol: n/a)		Change		12/31/13		12/31/12
Net Asset Value (NAV)	+$	1.67	$	12.79	$	11.12
Distributions (1/1/13–12/31/13)
Dividend Income	$	0.2212
Short-Term Capital Gain	$	0.0873
Long-Term Capital Gain	$	0.2947
Total	$	0.6032


Class A		1-Year			5-Year			Inception (8/1/06)
Cumulative Total Return²	+	20.18	%	+	93.02	%	+	58.84	%
Average Annual Total Return³	+	13.24	%	+	12.70	%	+	5.59	%
Value of $10,000 Investment⁴	$	11,324		$	18,182		$	14,971
Total Annual Operating Expenses⁵		0.93% (with waiver)						1.48% (without waiver)
Class C		1-Year			5-Year			Inception (8/1/06)
Cumulative Total Return²	+	19.52	%	+	86.23	%	+	50.96	%
Average Annual Total Return³	+	18.52	%	+	13.24	%	+	5.71	%
Value of $10,000 Investment⁴	$	11,852		$	18,623		$	15,096
Total Annual Operating Expenses⁵		1.63% (with waiver)						2.18% (without waiver)
Class R		1-Year			5-Year			Inception (8/1/06)
Cumulative Total Return²	+	20.05	%	+	90.99	%	+	56.55	%
Average Annual Total Return³	+	20.05	%	+	13.82	%	+	6.23	%
Value of $10,000 Investment⁴	$	12,005		$	19,099		$	15,655
Total Annual Operating Expenses⁵		1.13% (with waiver)						1.68% (without waiver)
Class R6								Inception (5/1/13)
Cumulative Total Return²							+	13.90	%
Aggregate Total Return⁶							+	13.90	%
Value of $10,000 Investment⁴							$	11,390
Total Annual Operating Expenses⁵		0.58% (with waiver)						1.01% (without waiver)
Advisor Class		1-Year			5-Year			Inception (8/1/06)
Cumulative Total Return²	+	20.66	%	+	95.81	%	+	62.36	%
Average Annual Total Return³	+	20.66	%	+	14.38	%	+	6.75	%
Value of $10,000 Investment⁴	$	12,066		$	19,581		$	16,236
Total Annual Operating Expenses⁵		0.63% (with waiver)						1.18% (without waiver)

Annual Report | 29

Performance Summary (continued)

Total Return Index Comparison for a Hypothetical $10,000 Investment¹

30 | Annual Report

Annual Report | 31

Your Fund’s Expenses

Franklin LifeSmart 2025 Retirement Target Fund

As a Fund shareholder, you can incur two types of costs:

Transaction costs, including sales charges (loads) on Fund purchases; and
Ongoing Fund costs, including management fees, distribution and service (12b-1) fees, and other Fund expenses. All mutual funds have ongoing costs, sometimes referred to as operating expenses.

Actual Fund Expenses

You can estimate the expenses you paid during the period by following these steps. Of course, your account value and expenses will differ from those in this illustration:

1.	Divide your account value by $1,000.
	If an account had an $8,600 value, then $8,600 ÷ $1,000 = 8.6.
2.	Multiply the result by the number under the heading “Expenses Paid During Period.”
	If Expenses Paid During Period were $7.50, then 8.6 x $7.50 = $64.50.

In this illustration, the estimated expenses paid this period are $64.50.

Hypothetical Example for Comparison with Other Funds

Annual Report | 33

Your Fund’s Expenses (continued)


		Beginning		Ending		Expenses Paid		Expenses Paid
		Account Value		Account Value		During Period*		During Period**
Class A		7/1/13		12/31/13		7/1/13–12/31/13		7/1/13–12/31/13
Actual	$	1,000	$	1,144.90	$	1.89	$	5.30
Hypothetical (5% return before expenses)	$	1,000	$	1,023.44	$	1.79	$	4.99
Class C
Actual	$	1,000	$	1,141.80	$	5.67	$	9.07
Hypothetical (5% return before expenses)	$	1,000	$	1,019.91	$	5.35	$	8.54
Class R
Actual	$	1,000	$	1,144.00	$	2.97	$	6.38
Hypothetical (5% return before expenses)	$	1,000	$	1,022.43	$	2.80	$	6.01
Class R6
Actual	$	1,000	$	1,147.20	$	0.00	$	3.41
Hypothetical (5% return before expenses)	$	1,000	$	1,025.21	$	0.00	$	3.21
Advisor Class
Actual	$	1,000	$	1,146.80	$	0.27	$	3.68
Hypothetical (5% return before expenses)	$	1,000	$	1,024.95	$	0.26	$	3.47

*Expenses are calculated using the most recent six-month expense ratio excluding expenses of the underlying funds, net of expense waivers,
annualized for each class (A: 0.35%; C: 1.05%; R: 0.55%; R6: 0.00%; and Advisor: 0.05%), multiplied by the average account value over the
period, multiplied by 184/365 to reflect the one-half year period.
**Expenses are calculated using the most recent six-month expense ratio including expenses of the underlying funds, net of expense waivers,
annualized for each class (A: 0.98%; C: 1.68%; R: 1.18%; R6: 0.63%; and Advisor: 0.68%), multiplied by the average account value over the
period, multiplied by 184/365 to reflect the one-half year period.

34 | Annual Report

Franklin LifeSmart 2030 Retirement Target Fund

Your Fund’s Goal and Main Investments: Franklin LifeSmart 2030 Retirement Target Fund seeks the highest level of long-term total return, which consists of capital appreciation and income, consistent with the Fund’s asset allocation. The Fund allocates among the broad asset classes of equity and fixed income by investing in a distinctly weighted combination of underlying funds, predominantly other Franklin Templeton mutual funds, with an increasing emphasis on income as the target date of 2030 approaches. The target date is the approximate retirement year of the investor.


Asset Allocation*
Franklin LifeSmart 2030
Retirement Target Fund
Based on Total Net Assets as of 12/31/13

Domestic Equity	52.2%
Foreign Equity	26.0%
Domestic Fixed Income	10.8%
Foreign Fixed Income	6.6%
Alternative Strategies	0.9%
Short-Term Investments & Other Net Assets	3.5%

*The asset allocation is based on the Statement of
Investments (SOI), which classifies each underlying
fund and other fund investments into a broad asset
class based on their predominant investments under
normal market conditions.

This inaugural annual report for Franklin LifeSmart 2030 Retirement Target Fund covers the period since the Fund’s inception on July 1, 2013, through December 31, 2013.

Performance Overview

Franklin LifeSmart 2030 Retirement Target Fund – Class A delivered a +12.19% cumulative total return for the period under review. By comparison, the Fund’s equity benchmarks, the Standard & Poor’s 500 Index (S&P 500), a broad measure of U.S. stock performance, and the MSCI Europe, Australasia, Far East (EAFE) Index, which measures global stock performance for developed markets excluding the U.S. and Canada, generated total returns of +16.31% and +16.80%.¹The Fund’s fixed income benchmark, the Barclays U.S. Aggregate Index, which tracks U.S. investment-grade bonds, posted a +0.37% total return.¹You can find more of the Fund’s performance data in the Performance Summary beginning on page 38.

Investment Strategy

1. Source: © 2014 Morningstar. All Rights Reserved. The information contained herein: (1) is proprietary to Morningstar and/or its content providers; (2) may not be copied or distributed; and (3) is not warranted to be accurate, complete or timely. Neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of this information. The indexes are unmanaged and include reinvestment of any income or distributions. One cannot invest directly in an index, and an index is not representative of the Fund’s portfolio.

The dollar value, number of shares or principal amount, and names of all portfolio holdings are listed in the Fund’s SOI, which begins on page 110.

Annual Report | 35


Top 10 Fund Holdings
Franklin LifeSmart 2030
Retirement Target Fund
12/31/13
% of Total
Net Assets
Franklin DynaTech Fund – Class R6	12.9	%
Franklin Rising Dividends Fund –
Class R6	11.2	%
Franklin International Small Cap Growth
Fund – Class R6	9.8	%
Mutual European Fund – Class R6	6.1	%
Franklin Growth Fund – Class R6	6.1	%
Templeton Global Total Return Fund –
Class R6	5.6	%
Franklin Utilities Fund – Class R6	4.5	%
Franklin U.S. Government Securities
Fund – Class R6	3.8	%
Franklin Biotechnology Discovery Fund –
Class R6	3.7	%
Franklin Low Duration Total Return
Fund – Class R6	3.3	%

the risk level of the fund investments, we analyze such factors as: (a) relative and absolute performance, including correlations with other fund investments as well as corresponding benchmarks, and (b) their volatility (the variability of returns from one period to the next). We attempt to invest the assets of each Target Fund in the same fund investments and will vary the fund investments’ allocation percentages based upon each Fund’s risk/return level. We change the Fund’s target asset allocation over time, and it becomes increasingly conservative as the stated target date draws near. At the “landing point” (reached at the target date), the Fund reaches its most conservative asset allocation and thereafter, such strategic asset allocation will generally become fixed.

Manager’s Discussion

At period-end, Franklin LifeSmart 2030 Retirement Target Fund allocated 78.2% of total net assets to equity and 17.4% to fixed income. Domestic equity exposure was 66.8% of the total equity weighting, and foreign equity made up the balance. The portfolio was diversified across capitalization sizes and investment styles, and on December 31, 2013, we held shares in large-, mid- and small-capitalization equity funds, representing both growth and value styles. Franklin DynaTech Fund – Class R6, at 12.9% of the Fund’s total net assets, was our largest equity fund weighting at period-end. On the fixed income side, domestic exposure was 62.1% of the Fund’s total fixed income weighting, with the balance in foreign fixed income. Templeton Global Total Return Fund – Class R6 was our largest fixed income fund weighting at 5.6% of total net assets.

Our largest domestic growth fund holding, Franklin DynaTech Fund – Class R6, outperformed the S&P 500, while our largest domestic value fund holding, Franklin Rising Dividends Fund – Class R6, underperformed the index. Our largest foreign equity fund holding, Franklin International Small Cap Growth Fund – Class R6 outperformed the MSCI EAFE Index. On the fixed income side, Templeton Global Total Return Fund – Class R6 and Franklin U.S. Government Securities Fund – Class R6 outperformed the Barclays U.S. Aggregate Index.

36 | Annual Report

Thank you for your participation in Franklin LifeSmart 2030 Retirement Target Fund. We look forward to serving your future investment needs.

Annual Report | 37

Performance Summary as of 12/31/13

Franklin LifeSmart 2030 Retirement Target Fund


Price and Distribution Information
Class A (Symbol: n/a)				Change		12/31/13		7/1/13
Net Asset Value (NAV)			+$	1.11	$	11.11	$	10.00
Distributions (7/1/13–12/31/13)
Dividend Income	$	0.1068
Short-Term Capital Gain	$	0.0018
Total	$	0.1086
Class C (Symbol: n/a)				Change		12/31/13		7/1/13
Net Asset Value (NAV)			+$	1.09	$	11.09	$	10.00
Distributions (7/1/13–12/31/13
Dividend Income	$	0.0906
Short-Term Capital Gain	$	0.0018
Total	$	0.0924
Class R (Symbol: n/a)				Change		12/31/13		7/1/13
Net Asset Value (NAV)			+$	1.10	$	11.10	$	10.00
Distributions (7/1/13–12/31/13)
Dividend Income	$	0.0959
Short-Term Capital Gain	$	0.0018
Total	$	0.0977
Class R6 (Symbol: n/a)				Change		12/31/13		7/1/13
Net Asset Value (NAV)			+$	1.12	$	11.12	$	10.00
Distributions (7/1/13–12/31/13)
Dividend Income	$	0.1110
Short-Term Capital Gain	$	0.0018
Total	$	0.1128
Advisor Class (Symbol: n/a)				Change		12/31/13		7/1/13
Net Asset Value (NAV)			+$	1.12	$	11.12	$	10.00
Distributions (7/1/13–12/31/13)
Dividend Income	$	0.1091
Short-Term Capital Gain	$	0.0018
Total	$	0.1109

38 | Annual Report

Performance Summary (continued)

Performance¹

Cumulative total return excludes sales charges. Aggregate total return and value of $10,000 investment include maximum sales charges. Class A: 5.75% maximum initial sales charge; Class C: 1% contingent deferred sales charge in first year only;

Class R/R6/Advisor Class: no sales charges.


Class A			Inception (7/1/13)
Cumulative Total Return²		+	12.19	%
Aggregate Total Return³		+	5.74	%
Value of $10,000 Investment⁴		$	10,574
Total Annual Operating Expenses⁵	0.94% (with waiver)		2.88% (without waiver)
Class C			Inception (7/1/13)
Cumulative Total Return²		+	11.73	%
Aggregate Total Return³		+	10.73	%
Value of $10,000 Investment⁴		$	11,073
Total Annual Operating Expenses⁵	1.64% (with waiver)		3.58% (without waiver)
Class R			Inception (7/1/13)
Cumulative Total Return²		+	11.98	%
Aggregate Total Return³		+	11.98	%
Value of $10,000 Investment⁴		$	11,198
Total Annual Operating Expenses⁵	1.14% (with waiver)		3.08% (without waiver)
Class R6			Inception (7/1/13)
Cumulative Total Return²		+	12.34	%
Aggregate Total Return³		+	12.34	%
Value of $10,000 Investment⁴		$	11,234
Total Annual Operating Expenses⁵	0.59% (with waiver)		2.32% (without waiver)
Advisor Class			Inception (7/1/13)
Cumulative Total Return²		+	12.32	%
Aggregate Total Return³		+	12.32	%
Value of $10,000 Investment⁴		$	11,232
Total Annual Operating Expenses⁵	0.64% (with waiver)		2.58% (without waiver)

Annual Report | 39

Performance Summary (continued)

Total Return Index Comparison for a Hypothetical $10,000 Investment¹

40 | Annual Report

Annual Report | 41

Performance Summary (continued)

Endnotes

The Fund’s investment risk changes over time as its asset allocation changes. Since the Fund invests in underlying funds, which may engage in a variety of investment strategies involving certain risks, the Fund is subject to those same risks. All investments involve risks, including possible loss of principal. Principal invested is not guaranteed at any time, including at or after the Fund’s retirement target date, nor is there any guarantee that the Fund will provide sufficient income at or through the investor’s retirement. Stock prices fluctuate, sometimes rapidly and dramatically, due to factors affecting individual companies, particular industries or sectors, or general market conditions. Bond prices generally move in the opposite direction of interest rates. Thus, as prices of bonds in the Fund adjust to a rise in interest rates, the Fund’s share price may decline. Foreign investing carries additional risks such as currency and market volatility and political or social instability, risks that are heightened in developing countries. These risks are described more fully in the Fund’s prospectus. Investors should consult their financial advisors for help selecting the appropriate fund of funds, or fund combination, based on an evaluation of their investment objectives, retirement time horizons and risk tolerance. The Fund is actively managed but there is no guarantee that the manager’s investment decisions will produce the desired results.

1. The Fund has an expense reduction contractually guaranteed through at least 12/31/14 and a fee waiver associated with its investments in a
Franklin Templeton money fund, contractually guaranteed through at least its current fiscal year end. Fund investment results reflect the expense
reduction and fee waiver, to the extent applicable; without these reductions, the results would have been lower.
2. Cumulative total return represents the average annual change in value of an investment over the period indicated.
3. Aggregate total return represents the change in value of an investment over the period indicated. Since the Fund has existed for less than one
year, average annual total returns are not available.
4. These figures represent the value of a hypothetical $10,000 investment in the Fund over the period indicated.
5. Figures are as stated in the Fund’s current prospectus. In periods of market volatility, assets may decline significantly, causing total annual Fund
operating expenses to become higher than the figures shown.
6. Source: © 2014 Morningstar. The S&P 500 is a market capitalization-weighted index of 500 stocks designed to measure total U.S. equity market
performance. The MSCI EAFE Index is a free float-adjusted, market capitalization-weighted index designed to measure equity market performance in
global developed markets excluding the U.S. and Canada. The Barclays U.S. Aggregate Index is a market capitalization-weighted index representing
the U.S. investment-grade, fixed-rate, taxable bond market with index components for government and corporate, mortgage pass-through and asset-
backed securities. All issues included are SEC registered, taxable, dollar denominated and nonconvertible, must have at least one year to final maturity
and must be rated investment grade (Baa3/BBB-/BBB- or higher) using the middle rating of Moody’s, Standard & Poor’s and Fitch, respectively.

42 | Annual Report

Your Fund’s Expenses

Franklin LifeSmart 2030 Retirement Target Fund

As a Fund shareholder, you can incur two types of costs:

Transaction costs, including sales charges (loads) on Fund purchases; and
Ongoing Fund costs, including management fees, distribution and service (12b-1) fees, and other Fund expenses. All mutual funds have ongoing costs, sometimes referred to as operating expenses.

Actual Fund Expenses

You can estimate the expenses you paid during the period by following these steps. Of course, your account value and expenses will differ from those in this illustration:

1.	Divide your account value by $1,000.
	If an account had an $8,600 value, then $8,600 ÷ $1,000 = 8.6.
2.	Multiply the result by the number under the heading “Expenses Paid During Period.”
	If Expenses Paid During Period were $7.50, then 8.6 x $7.50 = $64.50.

In this illustration, the estimated expenses paid this period are $64.50.

Hypothetical Example for Comparison with Other Funds

Annual Report | 43

Your Fund’s Expenses (continued)


		Beginning		Ending		Expenses Paid		Expenses Paid
		Account Value		Account Value		During Period*		During Period**
Class A		7/1/13		12/31/13		7/1/13–12/31/13		7/1/13–12/31/13
Actual	$	1,000	$	1,121.90	$	1.22	$	4.79
Hypothetical (5% return before expenses)	$	1,000	$	1,024.05	$	1.17	$	4.58
Class C
Actual	$	1,000	$	1,117.30	$	5.57	$	9.13
Hypothetical (5% return before expenses)	$	1,000	$	1,019.91	$	5.35	$	8.74
Class R
Actual	$	1,000	$	1,119.80	$	2.92	$	6.48
Hypothetical (5% return before expenses)	$	1,000	$	1,022.43	$	2.80	$	6.21
Class R6
Actual	$	1,000	$	1,123.40	$	0.00	$	3.57
Hypothetical (5% return before expenses)	$	1,000	$	1,025.21	$	0.00	$	3.41
Advisor Class
Actual	$	1,000	$	1,123.20	$	0.27	$	3.83
Hypothetical (5% return before expenses)	$	1,000	$	1,024.95	$	0.26	$	3.67

*Expenses are calculated using the most recent six-month expense ratio excluding expenses of the underlying funds, net of expense waivers,
annualized for each class (A: 0.23%; C: 1.05%; R: 0.55%; R6: 0.00%; and Advisor: 0.05%), multiplied by the average account value over the
period, multiplied by 184/365 to reflect the one-half year period. The multiplier is 183/365 for Actual expenses to reflect the number of days
since inception.
**Expenses are calculated using the most recent six-month expense ratio including expenses of the underlying funds, net of expense waivers,
annualized for each class (A: 0.90%; C: 1.72%; R: 1.22%; R6: 0.67%; and Advisor: 0.72%), multiplied by the average account value over the
period, multiplied by 184/365 to reflect the one-half year period. The multiplier is 183/365 for Actual expenses to reflect the number of days
since inception.

44 | Annual Report

Franklin LifeSmart 2035 Retirement Target Fund

(formerly, Franklin Templeton 2035 Retirement Target Fund)

Your Fund’s Goal and Main Investments: Franklin LifeSmart 2035 Retirement Target Fund seeks the highest level of long-term total return, which consists of capital appreciation and income, consistent with the Fund’s asset allocation. The Fund allocates among the broad asset classes of equity and fixed income by investing in a distinctly weighted combination of underlying funds, predominantly other Franklin Templeton mutual funds, with an increasing emphasis on income as the target date of 2035 approaches.¹The target date is the approximate retirement year of the investor.


Asset Allocation*
Franklin LifeSmart 2035
Retirement Target Fund
Based on Total Investments as of 12/31/13

Domestic Equity	57.0%
Foreign Equity	27.3%
Domestic Fixed Income	8.5%
Foreign Fixed Income	5.0%
Alternative Strategies	0.8%
Short-Term Investments	1.4%

*The asset allocation is based on the Statement of
Investments (SOI), which classifies each underlying
fund and other fund investments into a broad asset
class based on their predominant investments under
normal market conditions.

This annual report for Franklin LifeSmart 2035 Retirement Target Fund covers the fiscal year ended December 31, 2013.

Performance Overview

Franklin LifeSmart 2035 Retirement Target Fund – Class A delivered a +22.06% cumulative total return for the year under year. By comparison, the Fund’s equity benchmarks, the Standard & Poor’s 500 Index (S&P 500), a broad measure of U.S. stock performance, and the MSCI Europe, Australasia, Far East (EAFE) Index, which measures global stock performance for developed markets excluding the U.S. and Canada, generated total returns of +32.39% and +23.29%.²The Fund’s fixed income benchmark, the Barclays U.S. Aggregate Index, which tracks U.S. investment-grade bonds, had a -2.02% total return.²You can find the Fund’s long-term performance data in the Performance Summary beginning on page 48.

Investment Strategy

The dollar value, number of shares or principal amount, and names of all portfolio holdings are listed in the Fund’s SOI, which begins on page 116.

Annual Report | 45


Top 10 Fund Holdings
Franklin LifeSmart 2035
Retirement Target Fund
12/31/13
% of Total
Investments
Franklin DynaTech Fund – Class R6	14.1	%
Franklin Rising Dividends Fund –
Class R6	12.7	%
Franklin International Small Cap Growth
Fund – Class R6	10.1	%
Mutual European Fund – Class R6	6.6	%
Franklin Growth Fund – Class R6	5.8	%
Franklin Biotechnology Discovery Fund –
Class R6	5.3	%
Franklin Utilities Fund – Class R6	5.1	%
Templeton Global Total Return Fund –
Class R6	4.1	%
iShares Core S&P 500, ETF	3.4	%
Templeton Foreign Fund – Class R6	3.3	%

Manager’s Discussion

At period-end, Franklin LifeSmart 2035 Retirement Target Fund allocated 84.3% of total investments to equity and 13.5% to fixed income. Domestic equity exposure was 67.6% of the total equity weighting, and foreign equity made up the balance. The portfolio was diversified across capitalization sizes and investment styles, and on December 31, 2013, we held shares in large-, mid- and small-capitalization equity funds, representing both growth and value styles. Franklin DynaTech Fund – Class R6, at 14.1% of the Fund’s total investments, was our largest equity fund weighting at period-end. On the fixed income side, domestic exposure was 63.0% of the Fund’s total fixed income weighting, with the balance in foreign fixed income. Templeton Global Total Return Fund – Class R6 was our largest fixed income fund weighting at 4.1% of total investments.

Our largest domestic growth fund holding, Franklin DynaTech Fund – Class R6, outperformed the S&P 500, while our largest domestic value fund holding, Franklin Rising Dividends Fund – Class R6, underperformed the index. Our largest foreign equity fund holding, Franklin International Small Cap Growth Fund – Class R6 outperformed the MSCI EAFE Index. On the fixed income side, Templeton Global Total Return Fund – Class R6 outperformed the Barclays U.S. Aggregate Index.

46 | Annual Report

Thank you for your continued participation in Franklin LifeSmart 2035 Retirement Target Fund. We look forward to serving your future investment needs.

The foregoing information reflects our analysis, opinions and portfolio holdings as of December 31, 2013, the end

of the reporting period. The way we implement our main investment strategies and the resulting portfolio holdings

may change depending on factors such as market and economic conditions. These opinions may not be relied upon

as investment advice or an offer for a particular security. The information is not a complete analysis of every aspect

of any market, country, industry, security or the Fund. Statements of fact are from sources considered reliable,

but the investment manager makes no representation or warranty as to their completeness or accuracy. Although

historical performance is no guarantee of future results, these insights may help you understand our investment

management philosophy.

Annual Report | 47

Performance Summary as of 12/31/13

Franklin LifeSmart 2035 Retirement Target Fund


Price and Distribution Information
Class A (Symbol: FRTAX)				Change		12/31/13		12/31/12
Net Asset Value (NAV)			+$	1.84	$	12.85	$	11.01
Distributions (1/1/13–12/31/13)
Dividend Income	$	0.1539
Short-Term Capital Gain	$	0.0817
Long-Term Capital Gain	$	0.3280
Total	$	0.5636
Class C (Symbol: FTRCX)				Change		12/31/13		12/31/12
Net Asset Value (NAV)			+$	1.78	$	12.63	$	10.85
Distributions (1/1/13–12/31/13)
Dividend Income	$	0.0824
Short-Term Capital Gain	$	0.0817
Long-Term Capital Gain	$	0.3280
Total	$	0.4921
Class R (Symbol: n/a)				Change		12/31/13		12/31/12
Net Asset Value (NAV)			+$	1.83	$	12.84	$	11.01
Distributions (1/1/13–12/31/13)
Dividend Income	$	0.1317
Short-Term Capital Gain	$	0.0817
Long-Term Capital Gain	$	0.3280
Total	$	0.5414
Class R6 (Symbol: n/a)				Change		12/31/13		5/1/13
Net Asset Value (NAV)			+$	1.15	$	12.92	$	11.77
Distributions (5/1/13–12/31/13)
Dividend Income	$	0.1905
Short-Term Capital Gain	$	0.0817
Long-Term Capital Gain	$	0.3280
Total	$	0.6002

48 | Annual Report


Performance Summary (continued)


Price and Distribution Information (continued)
Advisor Class (Symbol: n/a)		Change		12/31/13		12/31/12
Net Asset Value (NAV)	+$	1.86	$	12.93	$	11.07
Distributions (1/1/13–12/31/13)
Dividend Income	$	0.1872
Short-Term Capital Gain	$	0.0817
Long-Term Capital Gain	$	0.3280
Total	$	0.5969


Class A		1-Year			5-Year			Inception (8/1/06)
Cumulative Total Return²	+	22.06	%	+	102.56	%	+	59.05	%
Average Annual Total Return³	+	15.06	%	+	13.82	%	+	5.61	%
Value of $10,000 Investment⁴	$	11,506		$	19,102		$	14,991
Total Annual Operating Expenses⁵		0.95% (with waiver)						1.63% (without waiver)
Class C		1-Year			5-Year			Inception (8/1/06)
Cumulative Total Return²	+	21.17	%	+	95.62	%	+	51.04	%
Average Annual Total Return³	+	20.17	%	+	14.36	%	+	5.72	%
Value of $10,000 Investment⁴	$	12,017		$	19,562		$	15,104
Total Annual Operating Expenses⁵		1.65% (with waiver)						2.33% (without waiver)
Class R		1-Year			5-Year			Inception (8/1/06)
Cumulative Total Return²	+	21.77	%	+	100.60	%	+	56.86	%
Average Annual Total Return³	+	21.77	%	+	14.94	%	+	6.26	%
Value of $10,000 Investment⁴	$	12,177		$	20,060		$	15,686
Total Annual Operating Expenses⁵		1.15% (with waiver)						1.83% (without waiver)
Class R6								Inception (5/1/13)
Cumulative Total Return²							+	15.09	%
Aggregate Total Return⁶							+	15.09	%
Value of $10,000 Investment⁴							$	11,509
Total Annual Operating Expenses⁵		0.60% (with waiver)						1.10% (without waiver)
Advisor Class		1-Year			5-Year			Inception (8/1/06)
Cumulative Total Return²	+	22.43	%	+	105.73	%	+	62.85	%
Average Annual Total Return³	+	22.43	%	+	15.52	%	+	6.80	%
Value of $10,000 Investment⁴	$	12,243		$	20,573		$	16,285
Total Annual Operating Expenses⁵		0.65% (with waiver)						1.33% (without waiver)

Annual Report | 49

Performance Summary (continued)

Total Return Index Comparison for a Hypothetical $10,000 Investment¹

50 | Annual Report

Annual Report | 51

Endnotes

The Fund’s investment risk changes over time as its asset allocation changes. Since the Fund invests in underlying Funds, which may engage in a variety of investment strategies involving certain risks, the Fund is subject to those same risks. All investments involve risks, including possible loss of principal. Principal invested is not guaranteed at any time, including at or after the Fund’s retirement target date, nor is there any guarantee that the Fund will provide sufficient income at or through the investor’s retirement. Stock prices fluctuate, sometimes rapidly and dramatically, due to factors affecting individual companies, particular industries or sectors, or general market conditions. Bond prices generally move in the opposite direction of interest rates. Thus, as prices of bonds in the Fund adjust to a rise in interest rates, the Fund’s share price may decline. Foreign investing carries additional risks such as currency and market volatility and political or social instability, risks that are heightened in developing countries. These risks are described more fully in the Fund’s prospectus. Investors should consult their financial advisors for help selecting the appropriate fund of funds, or fund combination, based on an evaluation of their investment objectives, retirement time horizons and risk tolerance. The Fund is actively managed but there is no guarantee that the manager’s investment decisions will produce the desired results.

Class C: These shares have higher annual fees and expenses than Class A shares.

Class R: Shares are available to certain eligible investors as described in the prospectus. These shares have higher annual fees and
expenses than Class A shares.

Class R6: Shares are available to certain eligible investors as described in the prospectus.

Advisor Class: Shares are available to certain eligible investors as described in the prospectus.

1. The Fund has an expense reduction contractually guaranteed through at least 4/30/14 and a fee waiver associated with its investments in a
Franklin Templeton money fund, contractually guaranteed through at least its current fiscal year end. Fund investment results reflect the expense
reduction and fee waiver, to the extent applicable; without these reductions, the results would have been lower. As of 7/1/13, the Fund changed its
target allocation, with short-term investments combined into the fixed income allocations. As of 5/1/11, the Fund’s glide path was modified, and
among other changes, reflects a lower starting allocation to equity funds. Such changes can impact performance.
2. Cumulative total return represents the change in value of an investment over the periods indicated.
3. Average annual total return represents the average annual change in value of an investment over the periods indicated.
4. These figures represent the value of a hypothetical $10,000 investment in the Fund over the periods indicated.
5. Figures are as stated in the Fund’s current prospectus. In periods of market volatility, assets may decline significantly, causing total annual Fund
operating expenses to become higher than the figures shown.
6. Aggregate total return represents the change in value of an investment for the period indicated. Since Class R6 shares have existed for less than
one year, average annual total return is not available.
7. Source: © 2014 Morningstar. The S&P 500 is a market capitalization-weighted index of 500 stocks designed to measure total U.S. equity market
performance. The MSCI EAFE Index is a free float-adjusted, market capitalization-weighted index designed to measure equity market performance in
global developed markets excluding the U.S. and Canada. The Barclays U.S. Aggregate Index is a market capitalization-weighted index representing
the U.S. investment-grade, fixed-rate, taxable bond market with index components for government and corporate, mortgage pass-through and asset-
backed securities. All issues included are SEC registered, taxable, dollar denominated and nonconvertible, must have at least one year to final maturity
and must be rated investment grade (Baa3/BBB-/BBB- or higher) using the middle rating of Moody’s, Standard & Poor’s and Fitch, respectively.

52 | Annual Report

Your Fund’s Expenses

Franklin LifeSmart 2035 Retirement Target Fund

As a Fund shareholder, you can incur two types of costs:

Transaction costs, including sales charges (loads) on Fund purchases; and
Ongoing Fund costs, including management fees, distribution and service (12b-1) fees, and other Fund expenses. All mutual funds have ongoing costs, sometimes referred to as operating expenses.

Actual Fund Expenses

You can estimate the expenses you paid during the period by following these steps. Of course, your account value and expenses will differ from those in this illustration:

1.	Divide your account value by $1,000.
	If an account had an $8,600 value, then $8,600 ÷ $1,000 = 8.6.
2.	Multiply the result by the number under the heading “Expenses Paid During Period.”
	If Expenses Paid During Period were $7.50, then 8.6 x $7.50 = $64.50.

In this illustration, the estimated expenses paid this period are $64.50.

Hypothetical Example for Comparison with Other Funds

Annual Report | 53

Your Fund’s Expenses (continued)


		Beginning		Ending		Expenses Paid		Expenses Paid
		Account Value		Account Value		During Period*		During Period**
Class A		7/1/13		12/31/13		7/1/13–12/31/13		7/1/13–12/31/13
Actual	$	1,000	$	1,154.30	$	1.90	$	5.38
Hypothetical (5% return before expenses)	$	1,000	$	1,023.44	$	1.79	$	5.04
Class C
Actual	$	1,000	$	1,150.90	$	5.69	$	9.16
Hypothetical (5% return before expenses)	$	1,000	$	1,019.91	$	5.35	$	8.59
Class R
Actual	$	1,000	$	1,153.50	$	2.99	$	6.46
Hypothetical (5% return before expenses)	$	1,000	$	1,022.43	$	2.80	$	6.06
Class R6
Actual	$	1,000	$	1,156.60	$	0.00	$	3.48
Hypothetical (5% return before expenses)	$	1,000	$	1,025.21	$	0.00	$	3.26
Advisor Class
Actual	$	1,000	$	1,157.10	$	0.27	$	3.75
Hypothetical (5% return before expenses)	$	1,000	$	1,024.95	$	0.26	$	3.52

*Expenses are calculated using the most recent six-month expense ratio excluding expenses of the underlying funds, net of expense waivers,
annualized for each class (A: 0.35%; C: 1.05%; R: 0.55%; R6: 0.00%; and Advisor: 0.05%), multiplied by the average account value over the
period, multiplied by 184/365 to reflect the one-half year period.
**Expenses are calculated using the most recent six-month expense ratio including expenses of the underlying funds, net of expense waivers,
annualized for each class (A: 0.99%; C: 1.69%; R: 1.19%; R6: 0.64%; and Advisor: 0.69%), multiplied by the average account value over the
period, multiplied by 184/365 to reflect the one-half year period.

54 | Annual Report

Franklin LifeSmart 2040 Retirement Target Fund

Your Fund’s Goal and Main Investments: Franklin LifeSmart 2040 Retirement Target Fund seeks the highest level of long-term total return, which consists of capital appreciation and income, consistent with the Fund’s asset allocation. The Fund allocates among the broad asset classes of equity and fixed income by investing in a distinctly weighted combination of underlying funds, predominantly other Franklin Templeton mutual funds, with an increasing emphasis on income as the target date of 2040 approaches. The target date is the approximate retirement year of the investor.


Asset Allocation*
Franklin LifeSmart 2040
Retirement Target Fund
Based on Total Net Assets as of 12/31/13

Domestic Equity	54.1%
Foreign Equity	26.3%
Domestic Fixed Income	7.4%
Foreign Fixed Income	4.4%
Alternative Strategies	0.7%
Other Net Assets	7.1%

*The asset allocation is based on the Statement of
Investments (SOI), which classifies each underlying
fund and other fund investments into a broad asset
class based on their predominant investments under
normal market conditions.

This inaugural annual report for Franklin LifeSmart 2040 Retirement Target Fund covers the period since the Fund’s inception on July 1, 2013, through December 31, 2013.

Performance Overview

Franklin LifeSmart 2040 Retirement Target Fund – Class A delivered a +12.91% cumulative total return for the period under review. By comparison, the Fund’s equity benchmarks, the Standard & Poor’s 500 Index (S&P 500), a broad measure of U.S. stock performance, and the MSCI Europe, Australasia, Far East (EAFE) Index, which measures global stock performance for developed markets excluding the U.S. and Canada, generated total returns of +16.31% and +16.80%.¹The Fund’s fixed income benchmark, the Barclays U.S. Aggregate Index, which tracks U.S. investment-grade bonds, posted a +0.37% total return. You can find more of the Fund’s performance data in the Performance Summary beginning on page 58.

Investment Strategy

1. Source: © 2014 Morningstar. All Rights Reserved. The information contained herein: (1) is proprietary to Morningstar
and/or its content providers; (2) may not be copied or distributed; and (3) is not warranted to be accurate, complete or
timely. Neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of
this information. The indexes are unmanaged and include reinvestment of any income or distributions. One cannot
invest directly in an index, and an index is not representative of the Fund’s portfolio.

The dollar value, number of shares or principal amount, and names of all portfolio holdings are listed in the Fund’s
SOI, which begins on page 123.

Annual Report | 55

Manager’s Discussion

At period-end, Franklin LifeSmart 2040 Retirement Target Fund allocated 80.4% of total net assets to equity and 11.8% to fixed income. Domestic equity exposure was 67.3% of the total equity weighting, and foreign equity made up the balance. The portfolio was diversified across capitalization sizes and investment styles, and on December 31, 2013, we held shares in large-, mid- and small-capitalization equity funds, representing both growth and value styles. Franklin DynaTech Fund – Class R6, at 13.5% of the Fund’s total net assets, was our largest equity fund weighting at period-end. On the fixed income side, domestic exposure was 62.5% of the Fund’s total fixed income weighting, with the balance in foreign fixed income. Templeton Global Total Return Fund – Class R6 was our largest fixed income fund weighting at 3.7% of total net assets.

Our largest domestic growth fund holding, Franklin DynaTech Fund – Class R6, outperformed the S&P 500, while our largest domestic value fund holding, Franklin Rising Dividends Fund – Class R6, underperformed the index. Our largest foreign equity fund holding, Mutual European Fund – Class R6 outperformed the MSCI EAFE Index. On the fixed income side, Templeton Global Total Return Fund – Class R6 outperformed the Barclays U.S. Aggregate Index.

56 | Annual Report

Thank you for your participation in Franklin LifeSmart 2040 Retirement Target Fund. We look forward to serving your future investment needs.

Annual Report | 57

Performance Summary as of 12/31/13

Franklin LifeSmart 2040 Retirement Target Fund


Price and Distribution Information
Class A (Symbol: n/a)				Change		12/31/13		7/1/13
Net Asset Value (NAV)			+$	1.19	$	11.19	$	10.00
Distributions (7/1/13–12/31/13)
Dividend Income	$	0.0970
Short-Term Capital Gain	$	0.0038
Total	$	0.1008
Class C (Symbol: n/a)				Change		12/31/13		7/1/13
Net Asset Value (NAV)			+$	1.15	$	11.15	$	10.00
Distributions (7/1/13–12/31/13)
Dividend Income	$	0.0921
Short-Term Capital Gain	$	0.0038
Total	$	0.0959
Class R (Symbol: n/a)				Change		12/31/13		7/1/13
Net Asset Value (NAV)			+$	1.19	$	11.19	$	10.00
Distributions (7/1/13–12/31/13)
Dividend Income	$	0.0863
Short-Term Capital Gain	$	0.0038
Total	$	0.0901
Class R6 (Symbol: n/a)				Change		12/31/13		7/1/13
Net Asset Value (NAV)			+$	1.20	$	11.20	$	10.00
Distributions (7/1/13–12/31/13)
Dividend Income	$	0.1025
Short-Term Capital Gain	$	0.0038
Total	$	0.1063
Advisor Class (Symbol: n/a)				Change		12/31/13		7/1/13
Net Asset Value (NAV)			+$	1.20	$	11.20	$	10.00
Distributions (7/1/13–12/31/13)
Dividend Income	$	0.1001
Short-Term Capital Gain	$	0.0038
Total	$	0.1039

58 | Annual Report

Performance Summary (continued)

Performance¹

Cumulative total return excludes sales charges. Aggregate total return and value of $10,000 investment include maximum
sales charges. Class A: 5.75% maximum initial sales charge; Class C: 1% contingent deferred sales charge in first year only;
Class R/R6/Advisor Class: no sales charges.


Class A			Inception (7/1/13)
Cumulative Total Return²		+	12.91	%
Aggregate Total Return³		+	6.42	%
Value of $10,000 Investment⁴		$	10,642
Total Annual Operating Expenses⁵	0.95% (with waiver)		2.95% (without waiver)
Class C			Inception (7/1/13)
Cumulative Total Return²		+	12.46	%
Aggregate Total Return³		+	11.46	%
Value of $10,000 Investment⁴		$	11,146
Total Annual Operating Expenses⁵	1.65% (with waiver)		3.65% (without waiver)
Class R			Inception (7/1/13)
Cumulative Total Return²		+	12.81	%
Aggregate Total Return³		+	12.81	%
Value of $10,000 Investment⁴		$	11,281
Total Annual Operating Expenses⁵	1.15% (with waiver)		3.15% (without waiver)
Class R6			Inception (7/1/13)
Cumulative Total Return²		+	13.07	%
Aggregate Total Return³		+	13.07	%
Value of $10,000 Investment⁴		$	11,307
Total Annual Operating Expenses⁵	0.60% (with waiver)		2.33% (without waiver)
Advisor Class			Inception (7/1/13)
Cumulative Total Return²		+	13.04	%
Aggregate Total Return³		+	13.04	%
Value of $10,000 Investment⁴		$	11,304
Total Annual Operating Expenses⁵	0.65% (with waiver)		2.65% (without waiver)

Annual Report | 59

Performance Summary (continued)

Total Return Index Comparison for a Hypothetical $10,000 Investment¹

60 | Annual Report

Annual Report | 61

Performance Summary (continued)

Endnotes

Your Fund’s Expenses

Franklin LifeSmart 2040 Retirement Target Fund

As a Fund shareholder, you can incur two types of costs:

Transaction costs, including sales charges (loads) on Fund purchases; and
Ongoing Fund costs, including management fees, distribution and service (12b-1) fees, and other Fund expenses. All mutual funds have ongoing costs, sometimes referred to as operating expenses.

Actual Fund Expenses

You can estimate the expenses you paid during the period by following these steps. Of course, your account value and expenses will differ from those in this illustration:

1.	Divide your account value by $1,000.
	If an account had an $8,600 value, then $8,600 ÷ $1,000 = 8.6.
2.	Multiply the result by the number under the heading “Expenses Paid During Period.”
	If Expenses Paid During Period were $7.50, then 8.6 x $7.50 = $64.50.

In this illustration, the estimated expenses paid this period are $64.50.

Hypothetical Example for Comparison with Other Funds

Annual Report | 63

Your Fund’s Expenses (continued)


		Beginning		Ending		Expenses Paid		Expenses Paid
		Account Value		Account Value		During Period*		During Period**
Class A		7/1/13		12/31/13		7/1/13–12/31/13		7/1/13–12/31/13
Actual	$	1,000	$	1,129.10	$	1.33	$	4.86
Hypothetical (5% return before expenses)	$	1,000	$	1,023.95	$	1.28	$	4.63
Class C
Actual	$	1,000	$	1,124.60	$	5.59	$	9.11
Hypothetical (5% return before expenses)	$	1,000	$	1,019.91	$	5.35	$	8.69
Class R
Actual	$	1,000	$	1,128.10	$	2.93	$	6.46
Hypothetical (5% return before expenses)	$	1,000	$	1,022.43	$	2.80	$	6.16
Class R6
Actual	$	1,000	$	1,130.70	$	0.00	$	3.53
Hypothetical (5% return before expenses)	$	1,000	$	1,025.21	$	0.00	$	3.36
Advisor Class
Actual	$	1,000	$	1,130.40	$	0.27	$	3.79
Hypothetical (5% return before expenses)	$	1,000	$	1,024.95	$	0.26	$	3.62

*Expenses are calculated using the most recent six-month expense ratio excluding expenses of the underlying funds, net of expense waivers,
annualized for each class (A: 0.25%; C: 1.05%; R: 0.55%; R6: 0.00%; and Advisor: 0.05%), multiplied by the average account value over the
period, multiplied by 184/365 to reflect the one-half year period. The multiplier is 183/365 for Actual expenses to reflect the number of days
since inception.
**Expenses are calculated using the most recent six-month expense ratio including expenses of the underlying funds, net of expense waivers,
annualized for each class (A: 0.91%; C: 1.71%; R: 1.21%; R6: 0.66%; and Advisor: 0.71%), multiplied by the average account value over the
period, multiplied by 184/365 to reflect the one-half year period. The multiplier is 183/365 for Actual expenses to reflect the number of days
since inception.

64 | Annual Report

Franklin LifeSmart 2045 Retirement Target Fund

(formerly, Franklin Templeton 2045 Retirement Target Fund)

Your Fund’s Goal and Main Investments: Franklin LifeSmart 2045 Retirement Target Fund seeks the highest level of long-term total return, which consists of capital appreciation and income, consistent with the Fund’s asset allocation. The Fund allocates among the broad asset classes of equity and fixed income by investing in a distinctly weighted combination of underlying funds, predominantly other Franklin Templeton mutual funds, with an increasing emphasis on income as the target date of 2045 approaches.¹The target date is the approximate retirement year of the investor.


Asset Allocation*
Franklin LifeSmart 2045
Retirement Target Fund
Based on Total Investments as of 12/31/13

Domestic Equity	59.2%
Foreign Equity	29.4%
Domestic Fixed Income	6.4%
Foreign Fixed Income	3.6%
Alternative Strategies	0.7%
Short-Term Investments	0.7%

*The asset allocation is based on the Statement of
Investments (SOI), which classifies each underlying
fund and other fund investments into a broad asset
class based on their predominant investments under
normal market conditions.

This annual report for Franklin LifeSmart 2045 Retirement Target Fund covers the fiscal year ended December 31, 2013.

Performance Overview

Franklin Templeton 2045 Retirement Target Fund – Class A delivered a +23.07% cumulative total return for the year under review. By comparison, the Fund’s equity benchmarks, the Standard & Poor’s 500 Index (S&P 500), a broad measure of U.S. stock performance, and the MSCI Europe, Australasia, Far East (EAFE) Index, which measures global stock performance for developed markets excluding the U.S. and Canada, generated total returns of +32.39% and +23.29%.²The Fund’s fixed income benchmark, the Barclays U.S. Aggregate Index, which tracks U.S. investment-grade bonds, had a -2.02% total return.²You can find the Fund’s long-term performance data in the Performance Summary beginning on page 68.

Investment Strategy

The dollar value, number of shares or principal amount, and names of all portfolio holdings are listed in the Fund’s SOI, which begins on page 129.

Annual Report | 65


Top 10 Fund Holdings
Franklin LifeSmart 2045
Retirement Target Fund
12/31/13
% of Total
Investments
Franklin DynaTech Fund – Class R6	15.1	%
Franklin Rising Dividends Fund –
Class R6	14.0	%
Franklin International Small Cap Growth
Fund – Class R6	10.7	%
Mutual European Fund – Class R6	6.8	%
Franklin Growth Fund – Class R6	6.3	%
Franklin Utilities Fund – Class R6	5.4	%
Franklin Biotechnology Discovery Fund –
Class R6	5.2	%
Templeton Foreign Fund – Class R6	4.2	%
iShares Core S&P 500, ETF	3.6	%
Templeton Frontier Markets Fund –
Class R6	3.1	%

Manager’s Discussion

At period-end, Franklin LifeSmart 2045 Retirement Target Fund allocated 88.6% of total investments to equity and 10.0% to fixed income. Domestic equity exposure was 66.8% of the total equity weighting, and foreign equity made up the balance. The portfolio was diversified across capitalization sizes and investment styles, and on December 31, 2013, we held shares in large-, mid- and small-capitalization equity funds, representing both growth and value styles. Franklin DynaTech Fund – Class R6, at 15.1% of the Fund’s total investments, was our largest equity fund weighting at period-end. On the fixed income side, domestic exposure was 64.0% of the Fund’s total fixed income weighting, with the balance in foreign fixed income. Templeton Global Total Return Fund – Class R6 was our largest fixed income fund weighting at 3.0% of total investments.

Our largest domestic growth fund holding, Franklin DynaTech Fund – Class R6, outperformed the S&P 500, while our largest domestic value fund holding, Franklin Rising Dividends Fund – Class R6, underperformed the index. Our largest foreign equity fund holding, Franklin International Small Cap Growth Fund – Class R6 outperformed the MSCI EAFE Index. On the fixed income side, Templeton Global Total Return Fund – Class R6 outperformed the Barclays U.S. Aggregate Index.

66 | Annual Report

Thank you for your continued participation in Franklin LifeSmart 2045 Retirement Target Fund. We look forward to serving your future investment needs.

Annual Report | 67

Performance Summary as of 12/31/13

Franklin LifeSmart 2045 Retirement Target Fund


Price and Distribution Information
Class A (Symbol: FTTAX)				Change		12/31/13		12/31/12
Net Asset Value (NAV)			+$	1.96	$	12.88	$	10.92
Distributions (1/1/13–12/31/13)
Dividend Income	$	0.1480
Short-Term Capital Gain	$	0.0728
Long-Term Capital Gain	$	0.3103
Total	$	0.5311
Class C (Symbol: n/a)				Change		12/31/13		12/31/12
Net Asset Value (NAV)			+$	1.90	$	12.63	$	10.73
Distributions (1/1/13–12/31/13)
Dividend Income	$	0.0717
Short-Term Capital Gain	$	0.0728
Long-Term Capital Gain	$	0.3103
Total	$	0.4548
Class R (Symbol: n/a)				Change		12/31/13		12/31/12
Net Asset Value (NAV)			+$	1.94	$	12.82	$	10.88
Distributions (1/1/13–12/31/13)
Dividend Income	$	0.1261
Short-Term Capital Gain	$	0.0728
Long-Term Capital Gain	$	0.3103
Total	$	0.5092
Class R6 (Symbol: n/a)				Change		12/31/13		5/1/13
Net Asset Value (NAV)			+$	1.28	$	12.95	$	11.67
Distributions (5/1/13–12/31/13)
Dividend Income	$	0.1846
Short-Term Capital Gain	$	0.0728
Long-Term Capital Gain	$	0.3103
Total	$	0.5677

68 | Annual Report


Performance Summary (continued)


Price and Distribution Information (continued)
Advisor Class (Symbol: n/a)		Change		12/31/13		12/31/12
Net Asset Value (NAV)	+$	1.98	$	12.94	$	10.96
Distributions (1/1/13–12/31/13)
Dividend Income	$	0.1816
Short-Term Capital Gain	$	0.0728
Long-Term Capital Gain	$	0.3103
Total	$	0.5647

Performance¹


Class A		1-Year			5-Year			Inception (8/1/06)
Cumulative Total Return²	+	23.07	%	+	109.39	%	+	61.17	%
Average Annual Total Return³	+	15.96	%	+	14.56	%	+	5.80	%
Value of $10,000 Investment⁴	$	11,596		$	19,736		$	15,190
Total Annual Operating Expenses⁵		0.95% (with waiver)						1.88% (without waiver)
Class C		1-Year			5-Year			Inception (8/1/06)
Cumulative Total Return²	+	22.20	%	+	102.40	%	+	53.06	%
Average Annual Total Return³	+	21.20	%	+	15.14	%	+	5.91	%
Value of $10,000 Investment⁴	$	12,120		$	20,240		$	15,306
Total Annual Operating Expenses⁵		1.65% (with waiver)						2.58% (without waiver)
Class R		1-Year			5-Year			Inception (8/1/06)
Cumulative Total Return²	+	22.76	%	+	107.37	%	+	58.72	%
Average Annual Total Return³	+	22.76	%	+	15.70	%	+	6.43	%
Value of $10,000 Investment⁴	$	12,276		$	20,737		$	15,872
Total Annual Operating Expenses⁵		1.15% (with waiver)						2.08% (without waiver)
Class R6								Inception (5/1/13)
Cumulative Total Return²							+	16.08	%
Aggregate Total Return⁶							+	16.08	%
Value of $10,000 Investment⁴							$	11,608
Total Annual Operating Expenses⁵		0.60% (with waiver)						1.22% (without waiver)
Advisor Class		1-Year			5-Year			Inception (8/1/06)
Cumulative Total Return²	+	23.48	%	+	112.90	%	+	64.78	%
Average Annual Total Return³	+	23.48	%	+	16.31	%	+	6.97	%
Value of $10,000 Investment⁴	$	12,348		$	21,290		$	16,478
Total Annual Operating Expenses⁵		0.65% (with waiver)						1.58% (without waiver)

Annual Report | 69

Performance Summary (continued)

Total Return Index Comparison for a Hypothetical $10,000 Investment¹

70 | Annual Report

Annual Report | 71

Endnotes

1. The Fund has an expense reduction contractually guaranteed through at least 4/30/14 and a fee waiver associated with its investments in a
Franklin Templeton money fund, contractually guaranteed through at least its current fiscal year end. Fund investment results reflect the expense
reduction and fee waiver, to the extent applicable; without these reductions, the results would have been lower. As of 7/1/13, the Fund changed its
target allocation, with short-term investments combined into the fixed income allocations. As of 5/1/11, the Fund’s glide path was modified, and
among other changes, reflects a lower starting allocation to equity funds. Such changes can impact performance.
2. Cumulative total return represents the change in value of an investment over the periods indicated.
3. Average annual total return represents the average annual change in value of an investment over the periods indicated.
4. These figures represent the value of a hypothetical $10,000 investment in the Fund over the periods indicated.
5. Figures are as stated in the Fund’s current prospectus. In periods of market volatility, assets may decline significantly, causing total annual Fund
operating expenses to become higher than the figures shown.
6. Aggregate total return represents the change in value of an investment for the period indicated. Since Class R6 shares have existed for less than
one year, average annual total return is not available.
7. Source: © 2014 Morningstar. The S&P 500 is a market capitalization-weighted index of 500 stocks designed to measure total U.S. equity market
performance. The MSCI EAFE Index is a free float-adjusted, market capitalization-weighted index designed to measure equity market performance in
global developed markets excluding the U.S. and Canada. The Barclays U.S. Aggregate Index is a market capitalization-weighted index representing
the U.S. investment-grade, fixed-rate, taxable bond market with index components for government and corporate, mortgage pass-through and asset-
backed securities. All issues included are SEC registered, taxable, dollar denominated and nonconvertible, must have at least one year to final maturity
and must be rated investment grade (Baa3/BBB-/BBB- or higher) using the middle rating of Moody’s, Standard & Poor’s and Fitch, respectively.

72 | Annual Report

Your Fund’s Expenses

Franklin LifeSmart 2045 Retirement Target Fund

As a Fund shareholder, you can incur two types of costs:

Transaction costs, including sales charges (loads) on Fund purchases; and
Ongoing Fund costs, including management fees, distribution and service (12b-1) fees, and other Fund expenses. All mutual funds have ongoing costs, sometimes referred to as operating expenses.

Actual Fund Expenses

You can estimate the expenses you paid during the period by following these steps. Of course, your account value and expenses will differ from those in this illustration:

1.	Divide your account value by $1,000.
	If an account had an $8,600 value, then $8,600 ÷ $1,000 = 8.6.
2.	Multiply the result by the number under the heading “Expenses Paid During Period.”
	If Expenses Paid During Period were $7.50, then 8.6 x $7.50 = $64.50.

In this illustration, the estimated expenses paid this period are $64.50.

Hypothetical Example for Comparison with Other Funds

Annual Report | 73

Your Fund’s Expenses (continued)


		Beginning		Ending		Expenses Paid		Expenses Paid
		Account Value		Account Value		During Period*		During Period**
Class A		7/1/13		12/31/13		7/1/13–12/31/13		7/1/13–12/31/13
Actual	$	1,000	$	1,162.70	$	1.91	$	5.45
Hypothetical (5% return before expenses)	$	1,000	$	1,023.44	$	1.79	$	5.09
Class C
Actual	$	1,000	$	1,159.40	$	5.72	$	9.25
Hypothetical (5% return before expenses)	$	1,000	$	1,019.91	$	5.35	$	8.64
Class R
Actual	$	1,000	$	1,161.60	$	3.00	$	6.54
Hypothetical (5% return before expenses)	$	1,000	$	1,022.43	$	2.80	$	6.11
Class R6
Actual	$	1,000	$	1,165.90	$	0.00	$	3.55
Hypothetical (5% return before expenses)	$	1,000	$	1,025.21	$	0.00	$	3.31
Advisor Class
Actual	$	1,000	$	1,164.80	$	0.27	$	3.82
Hypothetical (5% return before expenses)	$	1,000	$	1,024.95	$	0.26	$	3.57

**Expenses are calculated using the most recent six-month expense ratio including expenses of the underlying funds, net of expense waivers, annualized for each class (A: 1.00%; C: 1.70%; R: 1.20%; R6: 0.65%; and Advisor: 0.70%), multiplied by the average account value over the period, multiplied by 184/365 to reflect the one-half year period.

74 | Annual Report

Franklin LifeSmart 2050 Retirement Target Fund

Your Fund’s Goal and Main Investments: Franklin LifeSmart 2050 Retirement Target Fund seeks the highest level of long-term total return, which consists of capital appreciation and income, consistent with the Fund’s asset allocation. The Fund allocates among the broad asset classes of equity and fixed income by investing in a distinctly weighted combination of underlying funds, predominantly other Franklin Templeton mutual funds, with an increasing emphasis on income as the target date of 2050 approaches. The target date is the approximate retirement year of the investor.

This inaugural annual report for Franklin LifeSmart 2050 Retirement Target Fund covers the period since the Fund’s inception on July 1, 2013, through December 31, 2013.

Performance Overview

Franklin LifeSmart 2050 Retirement Target Fund – Class A delivered a +13.14% cumulative total return for the period under review. By comparison, the Fund’s equity benchmarks, the Standard & Poor’s 500 Index (S&P 500), a broad measure of U.S. stock performance, and the MSCI Europe, Australasia, Far East (EAFE) Index, which measures global stock performance for developed markets excluding the U.S. and Canada, generated total returns of +16.31% and +16.80%.¹The Fund’s fixed income benchmark, the Barclays U.S. Aggregate Index, which tracks U.S. investment-grade bonds, posted a +0.37% total return. You can find more of the Fund’s long-term performance data in the Performance Summary beginning on page 78.


Asset Allocation*
Franklin LifeSmart 2050
Retirement Target Fund
Based on Total Net Assets as of 12/31/13

Domestic Equity	50.3%
Foreign Equity	25.6%
Domestic Fixed Income	5.9%
Foreign Fixed Income	3.1%
Alternative Strategies	0.6%
Other Net Assets	14.5%

*The asset allocation is based on the Statement of
Investments (SOI), which classifies each underlying
fund and other fund investments into a broad asset
class based on their predominant investments under
normal market conditions.

Investment Strategy

1. Source: © 2014 Morningstar. All Rights Reserved. The information contained herein: (1) is proprietary to Morningstar
and/or its content providers; (2) may not be copied or distributed; and (3) is not warranted to be accurate, complete or
timely. Neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of
this information. The indexes are unmanaged and include reinvestment of any income or distributions. One cannot
invest directly in an index, and an index is not representative of the Fund’s portfolio.

The dollar value, number of shares or principal amount, and names of all portfolio holdings are listed in the Fund’s
SOI, which begins on page 136.

Annual Report | 75


Top 10 Fund Holdings
Franklin LifeSmart 2050
Retirement Target Fund
12/31/13
	% of Total
	Net Assets
Franklin DynaTech Fund – Class R6	12.6	%
Franklin Rising Dividends Fund –
Class R6	11.2	%
Franklin International Small Cap Growth
Fund – Class R6	9.0	%
Franklin Growth Fund – Class R6	6.9	%
Mutual European Fund – Class R6	5.9	%
Franklin Utilities Fund – Class R6	4.6	%
Templeton Foreign Fund – Class R6	3.7	%
Franklin Biotechnology Discovery Fund –
Class R6	3.5	%
iShares Core S&P 500, ETF	3.4	%
Templeton Frontier Markets Fund –
Class R6	2.6	%

maximizing income appropriate to the Fund’s specific risk profile. In evaluating the risk level of the fund investments, we analyze such factors as: (a) relative and absolute performance, including correlations with other fund investments as well as corresponding benchmarks, and (b) their volatility (the variability of returns from one period to the next). We attempt to invest the assets of each Target Fund in the same fund investments and will vary the fund investments’ allocation percentages based upon each Fund’s risk/return level. We change the Fund’s target asset allocation over time, and it becomes increasingly conservative as the stated target date draws near. At the “landing point” (reached at the target date), the Fund reaches its most conservative asset allocation and thereafter, such strategic asset allocation will generally become fixed.

Manager’s Discussion

At period-end, Franklin LifeSmart 2050 Retirement Target Fund allocated 75.9% of total net assets to equity and 9.0% to fixed income. Domestic equity exposure was 66.3% of the total equity weighting, and foreign equity made up the balance. The portfolio was diversified across capitalization sizes and investment styles, and on December 31, 2013, we held shares in large-, mid-and small-capitalization equity funds, representing both growth and value styles. Franklin DynaTech Fund – Class R6, at 12.6% of the Fund’s total net assets, was our largest equity fund weighting at period-end. On the fixed income side, domestic exposure was 65.6% of the Fund’s total fixed income weighting, with the balance in foreign fixed income. Templeton Global Total Return Fund – Class R6 was our largest fixed income fund weighting at 2.6% of total net assets.

Our largest domestic growth fund holding, Franklin DynaTech Fund – Class R6, outperformed the S&P 500, while our largest domestic value fund holding, Franklin Rising Dividends Fund – Class R6, underperformed the index. Our largest foreign equity fund holding, Franklin International Small Cap Growth Fund – Class R6 outperformed the MSCI EAFE Index. On the fixed income side, Templeton Global Total Return Fund – Class R6 outperformed the Barclays U.S. Aggregate Index.

76 | Annual Report

Thank you for your participation in Franklin LifeSmart 2050 Retirement Target Fund. We look forward to serving your future investment needs.

Annual Report | 77

Performance Summary as of 12/31/13

Franklin LifeSmart 2050 Retirement Target Fund


Price and Distribution Information
Class A (Symbol: n/a)				Change		12/31/13		7/1/13
Net Asset Value (NAV)			+$	1.21	$	11.21	$	10.00
Distributions (7/1/13–12/31/13)
Dividend Income	$	0.1031
Class C (Symbol: n/a)				Change		12/31/13		7/1/13
Net Asset Value (NAV)			+$	1.18	$	11.18	$	10.00
Distributions (7/1/13–12/31/13)
Dividend Income	$	0.0918
Class R (Symbol: n/a)				Change		12/31/13		7/1/13
Net Asset Value (NAV)			+$	1.21	$	11.21	$	10.00
Distributions (7/1/13–12/31/13)
Dividend Income	$	0.0915
Class R6 (Symbol: n/a)				Change		12/31/13		7/1/13
Net Asset Value (NAV)			+$	1.23	$	11.23	$	10.00
Distributions (7/1/13–12/31/13)
Dividend Income	$	0.1079
Advisor Class (Symbol: n/a)				Change		12/31/13		7/1/13
Net Asset Value (NAV)			+$	1.22	$	11.22	$	10.00
Distributions (7/1/13–12/31/13)
Dividend Income	$	0.1057

78 | Annual Report

Performance Summary (continued)


Class A			Inception (7/1/13)
Cumulative Total Return²		+	13.14	%
Aggregate Total Return³		+	6.63	%
Value of $10,000 Investment⁴		$	10,663
Total Annual Operating Expenses⁵	0.95% (with waiver)		3.01% (without waiver)
Class C			Inception (7/1/13)
Cumulative Total Return²		+	12.82	%
Aggregate Total Return³		+	11.82	%
Value of $10,000 Investment⁴		$	11,182
Total Annual Operating Expenses⁵	1.65% (with waiver)		3.71% (without waiver)
Class R			Inception (7/1/13)
Cumulative Total Return²		+	13.02	%
Aggregate Total Return³		+	13.02	%
Value of $10,000 Investment⁴		$	11,302
Total Annual Operating Expenses⁵	1.15% (with waiver)		3.21% (without waiver)
Class R6			Inception (7/1/13)
Cumulative Total Return²		+	13.39	%
Aggregate Total Return³		+	13.39	%
Value of $10,000 Investment⁴		$	11,339
Total Annual Operating Expenses⁵	0.60% (with waiver)		2.33% (without waiver)
Advisor Class			Inception (7/1/13)
Cumulative Total Return²		+	13.26	%
Aggregate Total Return³		+	13.26	%
Value of $10,000 Investment⁴		$	11,326
Total Annual Operating Expenses⁵	0.65% (with waiver)		2.71% (without waiver)

Annual Report | 79

Performance Summary (continued)

Total Return Index Comparison for a Hypothetical $10,000 Investment¹

80 | Annual Report

Annual Report | 81

Performance Summary (continued)

Endnotes

Your Fund’s Expenses

Franklin LifeSmart 2050 Retirement Target Fund

As a Fund shareholder, you can incur two types of costs:

Transaction costs, including sales charges (loads) on Fund purchases; and
Ongoing Fund costs, including management fees, distribution and service (12b-1) fees, and other Fund expenses. All mutual funds have ongoing costs, sometimes referred to as operating expenses.

Actual Fund Expenses

You can estimate the expenses you paid during the period by following these steps. Of course, your account value and expenses will differ from those in this illustration:

1.	Divide your account value by $1,000.
	If an account had an $8,600 value, then $8,600 ÷ $1,000 = 8.6.
2.	Multiply the result by the number under the heading “Expenses Paid During Period.”
	If Expenses Paid During Period were $7.50, then 8.6 x $7.50 = $64.50.

In this illustration, the estimated expenses paid this period are $64.50.

Hypothetical Example for Comparison with Other Funds

Annual Report | 83

Your Fund’s Expenses (continued)


		Beginning		Ending		Expenses Paid		Expenses Paid
		Account Value		Account Value		During Period*		During Period**
Class A		7/1/13		12/31/13		7/1/13–12/31/13		7/1/13–12/31/13
Actual	$	1,000	$	1,131.40	$	1.23	$	4.76
Hypothetical (5% return before expenses)	$	1,000	$	1,024.05	$	1.17	$	4.53
Class C
Actual	$	1,000	$	1,128.20	$	5.60	$	9.12
Hypothetical (5% return before expenses)	$	1,000	$	1,019.91	$	5.35	$	8.69
Class R
Actual	$	1,000	$	1,130.20	$	2.94	$	6.46
Hypothetical (5% return before expenses)	$	1,000	$	1,022.43	$	2.80	$	6.16
Class R6
Actual	$	1,000	$	1,133.90	$	0.00	$	3.53
Hypothetical (5% return before expenses)	$	1,000	$	1,025.21	$	0.00	$	3.36
Advisor Class
Actual	$	1,000	$	1,132.60	$	0.27	$	3.80
Hypothetical (5% return before expenses)	$	1,000	$	1,024.95	$	0.26	$	3.62

**Expenses are calculated using the most recent six-month expense ratio including expenses of the underlying funds, net of expense waivers, annualized for each class (A: 0.89%; C: 1.71%; R: 1.21%; R6: 0.66%; and Advisor: 0.71%), multiplied by the average account value over the period, multiplied by 184/365 to reflect the one-half year period. The multiplier is 183/365 for Actual expenses to reflect the number of days since inception.

84 | Annual Report

Franklin Templeton Fund Allocator Series

Financial Highlights


Franklin LifeSmart 2015 Retirement Target Fund
					Year Ended December 31,
Class A		2013			2012			2011			2010			2009
Per share operating performance
(for a share outstanding throughout the year)
Net asset value, beginning of year	$	11.67		$	10.92		$	11.25		$	10.17		$	8.14
Income from investment operations^a:
Net investment income^b,c		0.25			0.24			0.24			0.24			0.19
Net realized and unrealized gains (losses)		1.16			0.76			(0.33	)		1.05			2.09
Total from investment operations		1.41			1.00			(0.09	)		1.29			2.28
Less distributions from:
Net investment income		(0.27	)		(0.25	)		(0.24	)		(0.21	)		(0.20	)
Net realized gains		(0.53	)		—			—			—			(0.05	)
Total distributions		(0.80	)		(0.25	)		(0.24	)		(0.21	)		(0.25	)
Net asset value, end of year	$	12.28		$	11.67		$	10.92		$	11.25		$	10.17

Total return^d		12.27	%		9.20	%		(0.82	)%		12.77	%		28.50	%

Ratios to average net assets
Expenses before waiver and payments by affiliates^e		0.83	%		0.71	%		0.80	%		0.80	%		1.00	%
Expenses net of waiver and payments by affiliates^e		0.38	%		0.45	%		0.45	%		0.45	%		0.46	%
Net investment income^c		2.04	%		2.13	%		2.09	%		2.30	%		2.11	%

Supplemental data
Net assets, end of year (000’s)	$	44,347		$	37,507		$	31,073		$	27,230		$	17,108
Portfolio turnover rate		73.66	%		25.12	%		31.55	%		17.27	%		12.19	%

Annual Report | The accompanying notes are an integral part of these financial statements. | 85

Franklin Templeton Fund Allocator Series

Financial Highlights (continued)


Franklin LifeSmart 2015 Retirement Target Fund
					Year Ended December 31,
Class C		2013			2012			2011			2010			2009
Per share operating performance
(for a share outstanding throughout the year)
Net asset value, beginning of year	$	11.57		$	10.83		$	11.16		$	10.10		$	8.08
Income from investment operations^a:
Net investment income^b,c		0.16			0.16			0.16			0.16			0.13
Net realized and unrealized gains (losses)		1.15			0.75			(0.33	)		1.04			2.09
Total from investment operations		1.31			0.91			(0.17	)		1.20			2.22
Less distributions from:
Net investment income		(0.19	)		(0.17	)		(0.16	)		(0.14	)		(0.15	)
Net realized gains		(0.53	)		—			—			—			(0.05	)
Total distributions		(0.72	)		(0.17	)		(0.16	)		(0.14	)		(0.20	)
Net asset value, end of year	$	12.16		$	11.57		$	10.83		$	11.16		$	10.10

Total return^d		11.46	%		8.44	%		(1.51	)%		11.91	%		27.75	%

Ratios to average net assets
Expenses before waiver and payments by affiliates^e		1.53	%		1.41	%		1.50	%		1.50	%		1.70	%
Expenses net of waiver and payments by affiliates^e		1.08	%		1.15	%		1.15	%		1.15	%		1.16	%
Net investment income^c		1.34	%		1.43	%		1.39	%		1.60	%		1.41	%

Supplemental data
Net assets, end of year (000’s)	$	20,395		$	16,912		$	14,217		$	12,133		$	8,357
Portfolio turnover rate		73.66	%		25.12	%		31.55	%		17.27	%		12.19	%

86 | The accompanying notes are an integral part of these financial statements. | Annual Report

Franklin Templeton Fund Allocator Series

Financial Highlights (continued)


Franklin LifeSmart 2015 Retirement Target Fund
					Year Ended December 31,
Class R		2013			2012			2011			2010			2009
Per share operating performance
(for a share outstanding throughout the year)
Net asset value, beginning of year	$	11.64		$	10.89		$	11.22		$	10.15		$	8.12
Income from investment operations^a:
Net investment income^b,c		0.22			0.22			0.21			0.20			0.16
Net realized and unrealized gains (losses)		1.16			0.75			(0.32	)		1.06			2.11
Total from investment operations		1.38			0.97			(0.11	)		1.26			2.27
Less distributions from:
Net investment income		(0.24	)		(0.22	)		(0.22	)		(0.19	)		(0.19	)
Net realized gains		(0.53	)		—			—			—			(0.05	)
Total distributions		(0.77	)		(0.22	)		(0.22	)		(0.19	)		(0.24	)
Net asset value, end of year	$	12.25		$	11.64		$	10.89		$	11.22		$	10.15

Total return		12.04	%		8.96	%		(1.02	)%		12.46	%		28.32	%

Ratios to average net assets
Expenses before waiver and payments by affiliates^d		1.03	%		0.91	%		1.00	%		1.00	%		1.20	%
Expenses net of waiver and payments by affiliates^d		0.58	%		0.65	%		0.65	%		0.65	%		0.66	%
Net investment income^c		1.84	%		1.93	%		1.89	%		2.10	%		1.91	%

Supplemental data
Net assets, end of year (000’s)	$	2,279		$	1,862		$	1,815		$	1,401		$	1,365
Portfolio turnover rate		73.66	%		25.12	%		31.55	%		17.27	%		12.19	%

^aThe amount shown for a share outstanding throughout the period may not correlate with the Statement of Operations for the period due to the timing of sales and repurchases of
the Fund shares in relation to income earned and/or fluctuating market value of the investments of the Fund.
^bBased on average daily shares outstanding.
^cRecognition of net investment income by the Fund is affected by the timing of declaration of dividends by the Underlying Funds and exchange traded funds in which the Fund invests.
^dDoes not include expenses of the Underlying Funds and exchange traded funds in which the Fund invests. The weighted average indirect expenses of the Underlying Funds and
exchange traded funds was 0.62% for the year ended December 31, 2013.

Annual Report | The accompanying notes are an integral part of these financial statements. | 87

Franklin Templeton Fund Allocator Series

Financial Highlights (continued)


Franklin LifeSmart 2015 Retirement Target Fund
		Period Ended
		December 31,
Class R6		2013	^a
Per share operating performance
(for a share outstanding throughout the period)
Net asset value, beginning of period	$	12.17
Income from investment operations^b:
Net investment income^c,d		0.49
Net realized and unrealized gains (losses)		0.44
Total from investment operations		0.93
Less distributions from:
Net investment income		(0.25	)
Net realized gains		(0.53	)
Total distributions		(0.78	)
Net asset value, end of period	$	12.32

Total return^e		7.78	%

Ratios to average net assets^f
Expenses before waiver and payments by affiliates^g		0.60	%
Expenses net of waiver and payments by affiliates^g		0.00	%
Net investment income^d		2.42	%

Supplemental data
Net assets, end of period (000’s)	$	763
Portfolio turnover rate		73.66	%

88 | The accompanying notes are an integral part of these financial statements. | Annual Report

Franklin Templeton Fund Allocator Series

Financial Highlights (continued)


Franklin LifeSmart 2015 Retirement Target Fund
					Year Ended December 31,
Advisor Class		2013			2012			2011			2010			2009
Per share operating performance
(for a share outstanding throughout the year)
Net asset value, beginning of year	$	11.70		$	10.94		$	11.28		$	10.19		$	8.15
Income from investment operations^a:
Net investment income^b,c		0.29			0.28			0.26			0.39			0.20
Net realized and unrealized gains (losses)		1.16			0.76			(0.33	)		0.94			2.12
Total from investment operations		1.45			1.04			(0.07	)		1.33			2.32
Less distributions from:
Net investment income		(0.31	)		(0.28	)		(0.27	)		(0.24	)		(0.23	)
Net realized gains		(0.53	)		—			—			—			(0.05	)
Total distributions		(0.84	)		(0.28	)		(0.27	)		(0.24	)		(0.28	)
Net asset value, end of year	$	12.31		$	11.70		$	10.94		$	11.28		$	10.19

Total return		12.55	%		9.59	%		(0.61	)%		13.16	%		28.94	%

Ratios to average net assets
Expenses before waiver and payments by affiliates^d		0.53	%		0.41	%		0.50	%		0.50	%		0.70	%
Expenses net of waiver and payments by affiliates^d		0.08	%		0.15	%		0.15	%		0.15	%		0.16	%
Net investment income^c		2.34	%		2.43	%		2.39	%		2.60	%		2.41	%

Supplemental data
Net assets, end of year (000’s)	$	2,494		$	1,840		$	1,501		$	1,571		$	199
Portfolio turnover rate		73.66	%		25.12	%		31.55	%		17.27	%		12.19	%

^aThe amount shown for a share outstanding throughout the period may not correlate with the Statement of Operations for the period due to the timing of sales and repurchases of
the Fund shares in relation to income earned and/or fluctuating market value of the investments of the Fund.
^bBased on average daily shares outstanding.
^cRecognition of net investment income by the Fund is affected by the timing of declaration of dividends by the Underlying Funds and exchange traded funds in which the Fund invests.
^dDoes not include expenses of the Underlying Funds and exchange traded funds in which the Fund invests. The weighted average indirect expenses of the Underlying Funds and
exchange traded funds was 0.62% for the year ended December 31, 2013.

Annual Report | The accompanying notes are an integral part of these financial statements. | 89

Franklin Templeton Fund Allocator Series

Statement of Investments, December 31, 2013


Franklin LifeSmart 2015 Retirement Target Fund	Shares/Units		Value
Investments in Underlying Funds and Exchange Traded Funds
Alternative Strategies 2.4%
^a,bFranklin Pelagos Commodities Strategy Fund	171,060	$	1,551,517
^a,bFranklin Pelagos Managed Futures Strategy Fund	16,782		135,427
			1,686,944
Domestic Equity 32.0%
^a,bFranklin Biotechnology Discovery Fund, Class R6	15,954		2,116,911
^a,bFranklin DynaTech Fund, Class R6	118,840		5,379,875
^a,bFranklin Flex Cap Growth Fund, Class R6	15,558		886,190
^bFranklin Growth Fund, Class R6	33,117		2,159,552
^a,bFranklin Growth Opportunities Fund, Class R6	37,269		1,153,833
^bFranklin MicroCap Value Fund, Class R6	24,211		978,624
^bFranklin Real Estate Securities Fund, Class R6	43,096		739,523
^bFranklin Rising Dividends Fund, Class R6	101,772		4,926,788
^a,bFranklin Small Cap Growth Fund, Class R6	55,765		1,090,197
^bFranklin Utilities Fund, Class R6	133,081		2,000,209
iShares Core S&P 500, ETF	5,585		1,036,855
			22,468,557
Domestic Fixed Income 31.3%
^bFranklin Low Duration Total Return Fund, Class R6	680,307		6,905,116
^bFranklin Strategic Income Fund, Class R6	369,572		3,869,414
^bFranklin U.S. Government Securities Fund, Class R6	1,235,250		7,992,068
iShares Intermediate Credit Bond, ETF	30,000		3,236,400
			22,002,998
Foreign Equity 16.5%
^bFranklin International Growth Fund, Class R6	18,644		211,425
^bFranklin International Small Cap Growth Fund, Class R6	181,386		4,095,700
^bMutual European Fund, Class R6	117,920		2,919,708
^bTempleton China World Fund, Class R6	19,897		713,891
^bTempleton Foreign Fund, Class R6	182,545		1,496,870
^bTempleton Frontier Markets Fund, Class R6	74,546		1,362,704
WisdomTree Japan Hedged Equity Fund, ETF (Japan)	15,700		798,188
			11,598,486
Foreign Fixed Income 18.2%
^bFranklin Templeton Emerging Market Debt Opportunities Fund	173,466		2,027,815
^bTempleton Global Total Return Fund, Class R6	797,598		10,759,601
			12,787,416
Total Investments in Underlying Funds and Exchange Traded Funds before
Short Term Investments (Cost $62,878,034) 100.4%			70,544,401

90 | Annual Report

Franklin Templeton Fund Allocator Series

Statement of Investments, December 31, 2013 (continued)


Franklin LifeSmart 2015 Retirement Target Fund	Shares/Units		Value
Short Term Investments (Cost $1,003,530) 1.4%
Money Market Funds 1.4%
^a,bInstitutional Fiduciary Trust Money Market Portfolio	1,003,530	$	1,003,530
Total Investments in Underlying Funds and Exchange Traded Funds
(Cost $63,881,564) 101.8%			71,547,931
Other Assets, less Liabilities (1.8)%			(1,269,538	)
Net Assets 100.0%		$	70,278,393


See Abbreviations on page 174.

^aNon-income producing.
^bSee Note 7 regarding investments in Underlying Funds.

Annual Report | The accompanying notes are an integral part of these financial statements. | 91

Franklin Templeton Fund Allocator Series

Financial Highlights


Franklin LifeSmart 2020 Retirement Target Fund
	Period Ended
	December 31,
Class A	2013	^a
Per share operating performance
(for a share outstanding throughout the period)
Net asset value, beginning of period	$10.00
Income from investment operations^b:
Net investment income^c,d	0.16
Net realized and unrealized gains (losses)	0.91
Total from investment operations	1.07
Less distributions from:
Net investment income	(0.13	)
Net realized gains	(—)^e
Total distributions	(0.13	)
Net asset value, end of period	$10.94

Total return^f	10.69	%

Ratios to average net assets^g
Expenses before waiver and payments by affiliates^h	11.14	%
Expenses net of waiver and payments by affiliates^h	0.24	%
Net investment income^d	3.12	%

Supplemental data
Net assets, end of period (000’s)	$2,189
Portfolio turnover rate	33.36	%

^aFor the period July 1, 2013 (commencement of operations) to December 31, 2013.
^bThe amount shown for a share outstanding throughout the period may not correlate with the Statement of Operations for the period due to the timing of sales and repurchases of
the Fund shares in relation to income earned and/or fluctuating market value of the investments of the Fund.
^cBased on average daily shares outstanding.
^dRecognition of net investment income by the Fund is affected by the timing of declaration of dividends by the Underlying Funds and exchange traded funds in which the Fund invests.
^eAmount rounds to less than $0.01 per share.
^fTotal return does not reflect sales commissions or contingent deferred sales charges, if applicable, and is not annualized for periods less than one year.
^gRatios are annualized for periods less than one year.
^hDoes not include expenses of the Underlying Funds and exchange traded funds in which the Fund invests. The weighted average indirect expenses of the Underlying Funds and
exchange traded funds was 0.65% for the period ended December 31, 2013.

92 | The accompanying notes are an integral part of these financial statements. | Annual Report

Franklin Templeton Fund Allocator Series

Financial Highlights (continued)


Franklin LifeSmart 2020 Retirement Target Fund
	Period Ended
	December 31,
Class C	2013	^a
Per share operating performance
(for a share outstanding throughout the period)
Net asset value, beginning of period	$10.00
Income from investment operations^b:
Net investment income^c,d	0.18
Net realized and unrealized gains (losses)	0.83
Total from investment operations	1.01
Less distributions from:
Net investment income	(0.11	)
Net realized gains	(—)^e
Total distributions	(0.11	)
Net asset value, end of period	$10.90

Total return^f	10.16	%

Ratios to average net assets^g
Expenses before waiver and payments by affiliates^h	11.95	%
Expenses net of waiver and payments by affiliates^h	1.05	%
Net investment income^d	2.31	%

Supplemental data
Net assets, end of period (000’s)	$250
Portfolio turnover rate	33.36	%

Annual Report | The accompanying notes are an integral part of these financial statements. | 93

Franklin Templeton Fund Allocator Series

Financial Highlights (continued)


Franklin LifeSmart 2020 Retirement Target Fund
	Period Ended
	December 31,
Class R	2013	^a
Per share operating performance
(for a share outstanding throughout the period)
Net asset value, beginning of period	$10.00
Income from investment operations^b:
Net investment income^c,d	0.11
Net realized and unrealized gains (losses)	0.93
Total from investment operations	1.04
Less distributions from:
Net investment income	(0.11	)
Net realized gains	(—)^e
Total distributions	(0.11	)
Net asset value, end of period	$10.93

Total return^f	10.48	%

Ratios to average net assets^g
Expenses before waiver and payments by affiliates^h	11.45	%
Expenses net of waiver and payments by affiliates^h	0.55	%
Net investment income^d	2.81	%

Supplemental data
Net assets, end of period (000’s)	$11
Portfolio turnover rate	33.36	%

^aFor the period July 1, 2013 (commencement of operations) to December 31, 2013.
^bThe amount shown for a share outstanding throughout the period may not correlate with the Statement of Operations for the period due to the timing of sales and repurchases of
the Fund shares in relation to income earned and/or fluctuating market value of the investments of the Fund.
^cBased on average daily shares outstanding.
^dRecognition of net investment income by the Fund is affected by the timing of declaration of dividends by the Underlying Funds and exchange traded funds in which the Fund invests.
^eAmount rounds to less than $0.01 per share.
^fTotal return is not annualized for periods less than one year.
^gRatios are annualized for periods less than one year.
^hDoes not include expenses of the Underlying Funds and exchange traded funds in which the Fund invests. The weighted average indirect expenses of the Underlying Funds and
exchange traded funds was 0.65% for the period ended December 31, 2013.

94 | The accompanying notes are an integral part of these financial statements. | Annual Report

Franklin Templeton Fund Allocator Series

Financial Highlights (continued)


Franklin LifeSmart 2020 Retirement Target Fund
	Period Ended
	December 31,
Class R6	2013	^a
Per share operating performance
(for a share outstanding throughout the period)
Net asset value, beginning of period	$10.00
Income from investment operations^b:
Net investment income^c,d	0.14
Net realized and unrealized gains (losses)	0.94
Total from investment operations	1.08
Less distributions from:
Net investment income	(0.13	)
Net realized gains	(—)^e
Total distributions	(0.13	)
Net asset value, end of period	$10.95

Total return^f	10.84	%

Ratios to average net assets^g
Expenses before waiver and payments by affiliates^h	11.51	%
Expenses net of waiver and payments by affiliates^h	0.00	%
Net investment income^d	3.36	%

Supplemental data
Net assets, end of period (000’s)	$11
Portfolio turnover rate	33.36	%

^aFor the period July 1, 2013 (commencement of operations) to December 31, 2013.
^bThe amount shown for a share outstanding throughout the period may not correlate with the Statement of Operations for the period due to the timing of sales and repurchases of
the Fund shares in relation to income earned and/or fluctuating market value of the investments of the Fund.
^cBased on average daily shares outstanding.
^dRecognition of net investment income by the Fund is affected by the timing of declaration of dividends by the Underlying Funds and exchange traded funds in which the Fund invests.
^eAmount rounds to less than $0.01 per share.
^fTotal return is not annualized for periods less than one year.
^gRatios are annualized for periods less than one year.
^hDoes not include expenses of the Underlying Funds and exchange traded funds in which the Fund invests. The weighted average indirect expenses of the Underlying Funds and
exchange traded funds was 0.65% for the period ended December 31, 2013.

Annual Report | The accompanying notes are an integral part of these financial statements. | 95

Franklin Templeton Fund Allocator Series

Financial Highlights (continued)


Franklin LifeSmart 2020 Retirement Target Fund
	Period Ended
	December 31,
Advisor Class	2013	^a
Per share operating performance
(for a share outstanding throughout the period)
Net asset value, beginning of period	$10.00
Income from investment operations^b:
Net investment income^c,d	0.17
Net realized and unrealized gains (losses)	0.91
Total from investment operations	1.08
Less distributions from:
Net investment income	(0.13	)
Net realized gains	(—)^e
Total distributions	(0.13	)
Net asset value, end of period	$10.95

Total return^f	10.83	%

Ratios to average net assets^g
Expenses before waiver and payments by affiliates^h	10.95	%
Expenses net of waiver and payments by affiliates^h	0.05	%
Net investment income^d	3.31	%

Supplemental data
Net assets, end of period (000’s)	$44
Portfolio turnover rate	33.36	%

^aFor the period July 1, 2013 (commencement of operations) to December 31, 2013.
^bThe amount shown for a share outstanding throughout the period may not correlate with the Statement of Operations for the period due to the timing of sales and repurchases of
the Fund shares in relation to income earned and/or fluctuating market value of the investments of the Fund.
^cBased on average daily shares outstanding.
^dRecognition of net investment income by the Fund is affected by the timing of declaration of dividends by the Underlying Funds and exchange traded funds in which the Fund invests.
^eAmount rounds to less than $0.01 per share.
^fTotal return is not annualized for periods less than one year.
^gRatios are annualized for periods less than one year.
^hDoes not include expenses of the Underlying Funds and exchange traded funds in which the Fund invests. The weighted average indirect expenses of the Underlying Funds and
exchange traded funds was 0.65% for the period ended December 31, 2013.

96 | The accompanying notes are an integral part of these financial statements. | Annual Report

Franklin Templeton Fund Allocator Series

Statement of Investments, December 31, 2013


Franklin LifeSmart 2020 Retirement Target Fund	Shares/Units		Value
Investments in Underlying Funds and Exchange Traded Funds
Alternative Strategies 1.3%
^a,bFranklin Pelagos Commodities Strategy Fund	3,415	$	30,978
^a,bFranklin Pelagos Managed Futures Strategy Fund	320		2,582
			33,560
Domestic Equity 43.7%
^a,bFranklin Biotechnology Discovery Fund, Class R6	549		72,886
^a,bFranklin DynaTech Fund, Class R6	5,830		263,911
^a,bFranklin Flex Cap Growth Fund, Class R6	794		45,225
^bFranklin Growth Fund, Class R6	2,185		142,507
^a,bFranklin Growth Opportunities Fund, Class R6	1,717		53,163
^bFranklin MicroCap Value Fund, Class R6	968		39,128
^bFranklin Real Estate Securities Fund, Class R6	2,037		34,953
^bFranklin Rising Dividends Fund, Class R6	4,876		236,033
^a,bFranklin Small Cap Growth Fund, Class R6	2,349		45,922
^bFranklin Utilities Fund, Class R6	6,669		100,228
iShares Core S&P 500, ETF	328		60,893
			1,094,849
Domestic Fixed Income 21.1%
^bFranklin Low Duration Total Return Fund, Class R6	15,784		160,203
^bFranklin Strategic Income Fund, Class R6	9,021		94,455
^bFranklin U.S. Government Securities Fund, Class R6	30,072		194,567
iShares Intermediate Credit Bond, ETF	730		78,752
			527,977
Foreign Equity 22.4%
^bFranklin International Growth Fund, Class R6	872		9,885
^bFranklin International Small Cap Growth Fund, Class R6	9,508		214,680
^bMutual European Fund, Class R6	5,428		134,403
^bTempleton China World Fund, Class R6	879		31,546
^bTempleton Foreign Fund, Class R6	8,832		72,420
^bTempleton Frontier Markets Fund, Class R6	3,369		61,592
WisdomTree Japan Hedged Equity Fund, ETF (Japan)	716		36,401
			560,927
Foreign Fixed Income 11.8%
^bFranklin Templeton Emerging Market Debt Opportunities Fund	3,702		43,271
^bTempleton Global Total Return Fund, Class R6	18,709		252,391
			295,662
Total Investments in Underlying Funds and Exchange Traded Funds
(Cost $2,415,261) 100.3%			2,512,975
Other Assets, less Liabilities (0.3)%			(8,137	)
Net Assets 100.0%		$	2,504,838

See Abbreviations on page 174.

^aNon-income producing.
^bSee Note 7 regarding investments in Underlying Funds.

Annual Report | The accompanying notes are an integral part of these financial statements. | 97

Franklin Templeton Fund Allocator Series

Financial Highlights


Franklin LifeSmart 2025 Retirement Target Fund
					Year Ended December 31,
Class A		2013			2012			2011			2010			2009
Per share operating performance
(for a share outstanding throughout the year)
Net asset value, beginning of year	$	11.11		$	10.22		$	10.70		$	9.54		$	7.47
Income from investment operations^a:
Net investment income^b,c		0.16			0.17			0.17			0.22			0.16
Net realized and unrealized gains (losses)		2.06			0.88			(0.48	)		1.13			2.15
Total from investment operations		2.22			1.05			(0.31	)		1.35			2.31
Less distributions from:
Net investment income and short term gains received from
Underlying Funds		(0.19	)		(0.16	)		(0.17	)		(0.19	)		(0.14	)
Net realized gains		(0.38	)		—			—			—			(0.10	)
Total distributions		(0.57	)		(0.16	)		(0.17	)		(0.19	)		(0.24	)
Net asset value, end of year	$	12.76		$	11.11		$	10.22		$	10.70		$	9.54

Total return^d		20.18	%		10.30	%		(2.86	)%		14.14	%		31.34	%

Ratios to average net assets
Expenses before waiver and payments by affiliates^e		0.84	%		0.71	%		0.80	%		0.85	%		1.09	%
Expenses net of waiver and payments by affiliates^e		0.38	%		0.45	%		0.45	%		0.45	%		0.46	%
Net investment income^c		1.31	%		1.55	%		1.64	%		2.25	%		1.88	%

Supplemental data
Net assets, end of year (000’s)	$	58,811		$	45,299		$	36,506		$	30,983		$	19,725
Portfolio turnover rate		47.39	%		25.67	%		20.06	%		19.11	%		13.43	%

98 | The accompanying notes are an integral part of these financial statements. | Annual Report

Franklin Templeton Fund Allocator Series

Financial Highlights (continued)


Franklin LifeSmart 2025 Retirement Target Fund
			Year Ended December 31,
Class C	2013		2012		2011		2010		2009
Per share operating performance
(for a share outstanding throughout the year)
Net asset value, beginning of year	$10.97		$10.11		$10.59		$9.45		$7.43
Income from investment operations^a:
Net investment income^b,c	0.07		0.09		0.10		0.16		0.10
Net realized and unrealized gains (losses)	2.05		0.86		(0.48	)	1.11		2.12
Total from investment operations	2.12		0.95		(0.38	)	1.27		2.22
Less distributions from:
Net investment income and short term gains received from
Underlying Funds	(0.11	)	(0.09	)	(0.10	)	(0.13	)	(0.10	)
Net realized gains	(0.38	)	—		—		—		(0.10	)
Total distributions	(0.49	)	(0.09	)	(0.10	)	(0.13	)	(0.20	)
Net asset value, end of year	$12.60		$10.97		$10.11		$10.59		$9.45

Total return^d	19.52	%	9.42	%	(3.54	)%	13.41	%	30.18	%

Ratios to average net assets
Expenses before waiver and payments by affiliates^e	1.54	%	1.41	%	1.50	%	1.55	%	1.79	%
Expenses net of waiver and payments by affiliates^e	1.08	%	1.15	%	1.15	%	1.15	%	1.16	%
Net investment income^c	0.61	%	0.85	%	0.94	%	1.55	%	1.18	%

Supplemental data
Net assets, end of year (000’s)	$25,248		$18,312		$14,309		$11,194		$6,308
Portfolio turnover rate	47.39	%	25.67	%	20.06	%	19.11	%	13.43	%

Annual Report | The accompanying notes are an integral part of these financial statements. | 99

Franklin Templeton Fund Allocator Series

Financial Highlights (continued)


Franklin LifeSmart 2025 Retirement Target Fund
			Year Ended December 31,
Class R	2013		2012		2011		2010		2009
Per share operating performance
(for a share outstanding throughout the year)
Net asset value, beginning of year	$11.07		$10.19		$10.68		$9.53		$7.47
Income from investment operations^a:
Net investment income^b,c	0.13		0.15		0.16		0.22		0.17
Net realized and unrealized gains (losses)	2.07		0.87		(0.50	)	1.10		2.12
Total from investment operations	2.20		1.02		(0.34	)	1.32		2.29
Less distributions from:
Net investment income and short term gains received from
Underlying Funds	(0.17	)	(0.14	)	(0.15	)	(0.17	)	(0.13	)
Net realized gains	(0.38	)	—		—		—		(0.10	)
Total distributions	(0.55	)	(0.14	)	(0.15	)	(0.17	)	(0.23	)
Net asset value, end of year	$12.72		$11.07		$10.19		$10.68		$9.53

Total return	20.05	%	10.05	%	(3.14	)%	13.92	%	31.03	%

Ratios to average net assets
Expenses before waiver and payments by affiliates^d	1.04	%	0.91	%	1.00	%	1.05	%	1.29	%
Expenses net of waiver and payments by affiliates^d	0.58	%	0.65	%	0.65	%	0.65	%	0.66	%
Net investment income^c	1.11	%	1.35	%	1.44	%	2.05	%	1.68	%

Supplemental data
Net assets, end of year (000’s)	$4,835		$3,442		$1,780		$995		$460
Portfolio turnover rate	47.39	%	25.67	%	20.06	%	19.11	%	13.43	%

^aThe amount shown for a share outstanding throughout the period may not correlate with the Statement of Operations for the period due to the timing of sales and repurchases of
the Fund shares in relation to income earned and/or fluctuating market value of the investments of the Fund.
^bBased on average daily shares outstanding.
^cRecognition of net investment income by the Fund is affected by the timing of declaration of dividends by the Underlying Funds and exchange traded funds in which the Fund invests.
^dDoes not include expenses of the Underlying Funds and exchange traded funds in which the Fund invests. The weighted average indirect expenses of the Underlying Funds and
exchange traded funds was 0.67% for the year ended December 31, 2013.

100 | The accompanying notes are an integral part of these financial statements. | Annual Report

Franklin Templeton Fund Allocator Series

Financial Highlights (continued)


Franklin LifeSmart 2025 Retirement Target Fund
	Period Ended
	December 31,
Class R6	2013	^a
Per share operating performance
(for a share outstanding throughout the period)
Net asset value, beginning of period	$11.74
Income from investment operations^b:
Net investment income^c,d	0.55
Net realized and unrealized gains (losses)	1.06
Total from investment operations	1.61
Less distributions from:
Net investment income and short term gains received from Underlying Funds	(0.18	)
Net realized gains	(0.38	)
Total distributions	(0.56	)
Net asset value, end of period	$12.79

Total return^e	13.90	%

Ratios to average net assets^f
Expenses before waiver and payments by affiliates^g	0.45	%
Expenses net of waiver and payments by affiliates^g	0.00	%
Net investment income^d	1.69	%

Supplemental data
Net assets, end of period (000’s)	$2,339
Portfolio turnover rate	47.39	%

Annual Report | The accompanying notes are an integral part of these financial statements. | 101

Franklin Templeton Fund Allocator Series

Financial Highlights (continued)


Franklin LifeSmart 2025 Retirement Target Fund
			Year Ended December 31,
Advisor Class	2013		2012		2011		2010		2009
Per share operating performance
(for a share outstanding throughout the year)
Net asset value, beginning of year	$11.12		$10.23		$10.72		$9.55		$7.48
Income from investment operations^a:
Net investment income^b,c	0.19		0.20		0.21		0.31		0.17
Net realized and unrealized gains (losses)	2.08		0.88		(0.50	)	1.07		2.17
Total from investment operations	2.27		1.08		(0.29	)	1.38		2.34
Less distributions from:
Net investment income and short term gains received from
Underlying Funds	(0.22	)	(0.19	)	(0.20	)	(0.21	)	(0.17	)
Net realized gains	(0.38	)	—		—		—		(0.10	)
Total distributions	(0.60	)	(0.19	)	(0.20	)	(0.21	)	(0.27	)
Net asset value, end of year	$12.79		$11.12		$10.23		$10.72		$9.55

Total return	20.66	%	10.59	%	(2.65	)%	14.53	%	31.61	%

Ratios to average net assets
Expenses before waiver and payments by affiliates^d	0.54	%	0.41	%	0.50	%	0.55	%	0.79	%
Expenses net of waiver and payments by affiliates^d	0.08	%	0.15	%	0.15	%	0.15	%	0.16	%
Net investment income^c	1.61	%	1.85	%	1.94	%	2.55	%	2.18	%

Supplemental data
Net assets, end of year (000’s)	$2,487		$1,873		$1,847		$1,530		$463
Portfolio turnover rate	47.39	%	25.67	%	20.06	%	19.11	%	13.43	%

^aThe amount shown for a share outstanding throughout the period may not correlate with the Statement of Operations for the period due to the timing of sales and repurchases of
the Fund shares in relation to income earned and/or fluctuating market value of the investments of the Fund.
^bBased on average daily shares outstanding.
^cRecognition of net investment income by the Fund is affected by the timing of declaration of dividends by the Underlying Funds and exchange traded funds in which the Fund invests.
^dDoes not include expenses of the Underlying Funds and exchange traded funds in which the Fund invests. The weighted average indirect expenses of the Underlying Funds and
exchange traded funds was 0.67% for the year ended December 31, 2013.

102 | The accompanying notes are an integral part of these financial statements. | Annual Report

Franklin Templeton Fund Allocator Series

Statement of Investments, December 31, 2013


Franklin LifeSmart 2025 Retirement Target Fund	Shares/Units	Value
Investments in Underlying Funds and Exchange Traded Funds
Alternative Strategies 1.2%
^a,bFranklin Pelagos Commodities Strategy Fund	114,106	$1,034,943
^a,bFranklin Pelagos Managed Futures Strategy Fund	11,101	89,585
		1,124,528
Domestic Equity 53.9%
^a,bFranklin Biotechnology Discovery Fund, Class R6	33,215	4,407,289
^a,bFranklin DynaTech Fund, Class R6	279,098	12,634,785
^a,bFranklin Flex Cap Growth Fund, Class R6	31,387	1,787,789
^bFranklin Growth Fund, Class R6	71,775	4,680,445
^a,bFranklin Growth Opportunities Fund, Class R6	72,393	2,241,292
^bFranklin MicroCap Value Fund, Class R6	43,077	1,741,187
^bFranklin Real Estate Securities Fund, Class R6	85,602	1,468,939
^bFranklin Rising Dividends Fund, Class R6	236,182	11,433,574
^a,bFranklin Small Cap Growth Fund, Class R6	147,850	2,890,469
^bFranklin Utilities Fund, Class R6	286,140	4,300,681
iShares Core S&P 500, ETF	15,830	2,938,839
		50,525,289
Domestic Fixed Income 13.4%
^bFranklin Low Duration Total Return Fund, Class R6	354,640	3,599,595
^bFranklin Strategic Income Fund, Class R6	204,580	2,141,958
^bFranklin U.S. Government Securities Fund, Class R6	719,975	4,658,239
iShares Intermediate Credit Bond, ETF	19,900	2,146,812
		12,546,604
Foreign Equity 26.4%
^bFranklin International Growth Fund, Class R6	48,404	548,901
^bFranklin International Small Cap Growth Fund, Class R6	415,470	9,381,314
^bMutual European Fund, Class R6	243,881	6,038,499
^bTempleton China World Fund, Class R6	44,153	1,584,224
^bTempleton Foreign Fund, Class R6	341,118	2,797,164
^bTempleton Frontier Markets Fund, Class R6	147,872	2,703,099
WisdomTree Japan Hedged Equity Fund, ETF (Japan)	33,100	1,682,804
		24,736,005
Foreign Fixed Income 7.8%
^bFranklin Templeton Emerging Market Debt Opportunities Fund	97,394	1,138,535
^bTempleton Global Total Return Fund, Class R6	455,148	6,139,951
		7,278,486
Total Investments in Underlying Funds and Exchange Traded Funds before
Short Term Investments (Cost $80,267,336) 102.7%		96,210,912

Annual Report | 103

Franklin Templeton Fund Allocator Series

Statement of Investments, December 31, 2013 (continued)


Franklin LifeSmart 2025 Retirement Target Fund	Shares/Units		Value
Short Term Investments (Cost $1,468,315) 1.5%
Money Market Funds 1.5%
^a,bInstitutional Fiduciary Trust Money Market Portfolio	1,468,315	$	1,468,315
Total Investments in Underlying Funds and Exchange Traded Funds
(Cost $81,735,651) 104.2%			97,679,227
Other Assets, less Liabilities (4.2)%			(3,958,685	)
Net Assets 100.0%		$	93,720,542


See Abbreviations on page 174.

^aNon-income producing.
^bSee Note 7 regarding investments in Underlying Funds.

104 | The accompanying notes are an integral part of these financial statements. | Annual Report

Franklin Templeton Fund Allocator Series

Financial Highlights


Franklin LifeSmart 2030 Retirement Target Fund
	Period Ended
	December 31,
Class A	2013	^a
Per share operating performance
(for a share outstanding throughout the period)
Net asset value, beginning of period	$10.00
Income from investment operations^b:
Net investment income^c,d	0.15
Net realized and unrealized gains (losses)	1.07
Total from investment operations	1.22
Less distributions from:
Net investment income and short term gains received from Underlying Funds	(0.11	)
Net realized gains	(—)^e
Total distributions	(0.11	)
Net asset value, end of period	$11.11

Total return^f	12.19	%

Ratios to average net assets^g
Expenses before waiver and payments by affiliates^h	20.77	%
Expenses net of waiver and payments by affiliates^h	0.23	%
Net investment income^d	2.72	%

Supplemental data
Net assets, end of period (000’s)	$1,260
Portfolio turnover rate	12.08	%

Annual Report | The accompanying notes are an integral part of these financial statements. | 105

Franklin Templeton Fund Allocator Series

Financial Highlights (continued)


Franklin LifeSmart 2030 Retirement Target Fund
	Period Ended
	December 31,
Class C	2013	^a
Per share operating performance
(for a share outstanding throughout the period)
Net asset value, beginning of period	$10.00
Income from investment operations^b:
Net investment income^c,d	0.13
Net realized and unrealized gains (losses)	1.05
Total from investment operations	1.18
Less distributions from:
Net investment income and short term gains received from Underlying Funds	(0.09	)
Net realized gains	(—)^e
Total distributions	(0.09	)
Net asset value, end of period	$11.09

Total return^f	11.73	%

Ratios to average net assets^g
Expenses before waiver and payments by affiliates^h	21.59	%
Expenses net of waiver and payments by affiliates^h	1.05	%
Net investment income^d	1.90	%

Supplemental data
Net assets, end of period (000’s)	$132
Portfolio turnover rate	12.08	%

106 | The accompanying notes are an integral part of these financial statements. | Annual Report

Franklin Templeton Fund Allocator Series

Financial Highlights (continued)


Franklin LifeSmart 2030 Retirement Target Fund
	Period Ended
	December 31,
Class R	2013	^a
Per share operating performance
(for a share outstanding throughout the period)
Net asset value, beginning of period	$10.00
Income from investment operations^b:
Net investment income^c,d	0.13
Net realized and unrealized gains (losses)	1.07
Total from investment operations	1.20
Less distributions from:
Net investment income and short term gains received from Underlying Funds	(0.10	)
Net realized gains	(—)^e
Total distributions	(0.10	)
Net asset value, end of period	$11.10

Total return^f	11.98	%

Ratios to average net assets^g
Expenses before waiver and payments by affiliates^h	21.09	%
Expenses net of waiver and payments by affiliates^h	0.55	%
Net investment income^d	2.40	%

Supplemental data
Net assets, end of period (000’s)	$47
Portfolio turnover rate	12.08	%

^aFor the period July 1, 2013 (commencement of operations) to December 31, 2013.
^bThe amount shown for a share outstanding throughout the period may not correlate with the Statement of Operations for the period due to the timing of sales and repurchases of
the Fund shares in relation to income earned and/or fluctuating market value of the investments of the Fund.
^cBased on average daily shares outstanding.
^dRecognition of net investment income by the Fund is affected by the timing of declaration of dividends by the Underlying Funds and exchange traded funds in which the Fund invests.
^eAmount rounds to less than $0.01 per share.
^fTotal return is not annualized for periods less than one year.
^gRatios are annualized for periods less than one year.
^hDoes not include expenses of the Underlying Funds and exchange traded funds in which the Fund invests. The weighted average indirect expenses of the Underlying Funds and
exchange traded funds was 0.67% for the period ended December 31, 2013.

Annual Report | The accompanying notes are an integral part of these financial statements. | 107

Franklin Templeton Fund Allocator Series

Financial Highlights (continued)


Franklin LifeSmart 2030 Retirement Target Fund
	Period Ended
	December 31,
Class R6	2013	^a
Per share operating performance
(for a share outstanding throughout the period)
Net asset value, beginning of period	$10.00
Income from investment operations^b:
Net investment income^c,d	0.11
Net realized and unrealized gains (losses)	1.12
Total from investment operations	1.23
Less distributions from:
Net investment income and short term gains received from Underlying Funds	(0.11	)
Net realized gains	(—)^e
Total distributions	(0.11	)
Net asset value, end of period	$11.12

Total return^f	12.34	%

Ratios to average net assets^g
Expenses before waiver and payments by affiliates^h	21.00	%
Expenses net of waiver and payments by affiliates^h	0.00	%
Net investment income^d	2.95	%

Supplemental data
Net assets, end of period (000’s)	$11
Portfolio turnover rate	12.08	%

^aFor the period July 1, 2013 (commencement of operations) to December 31, 2013.
^bThe amount shown for a share outstanding throughout the period may not correlate with the Statement of Operations for the period due to the timing of sales and repurchases of
the Fund shares in relation to income earned and/or fluctuating market value of the investments of the Fund.
^cBased on average daily shares outstanding.
^dRecognition of net investment income by the Fund is affected by the timing of declaration of dividends by the Underlying Funds and exchange traded funds in which the Fund invests.
^eAmount rounds to less than $0.01 per share.
^fTotal return is not annualized for periods less than one year.
^gRatios are annualized for periods less than one year.
^hDoes not include expenses of the Underlying Funds and exchange traded funds in which the Fund invests. The weighted average indirect expenses of the Underlying Funds and
exchange traded funds was 0.67% for the period ended December 31, 2013.

108 | The accompanying notes are an integral part of these financial statements. | Annual Report

Franklin Templeton Fund Allocator Series

Financial Highlights (continued)


Franklin LifeSmart 2030 Retirement Target Fund
	Period Ended
	December 31,
Advisor Class	2013	^a
Per share operating performance
(for a share outstanding throughout the period)
Net asset value, beginning of period	$10.00
Income from investment operations^b:
Net investment income^c,d	0.13
Net realized and unrealized gains (losses)	1.10
Total from investment operations	1.23
Less distributions from:
Net investment income and short term gains received from Underlying Funds	(0.11	)
Net realized gains	(—)^e
Total distributions	(0.11	)
Net asset value, end of period	$11.12

Total return^f	12.32	%

Ratios to average net assets^g
Expenses before waiver and payments by affiliates^h	20.59	%
Expenses net of waiver and payments by affiliates^h	0.05	%
Net investment income^d	2.90	%

Supplemental data
Net assets, end of period (000’s)	$82
Portfolio turnover rate	12.08	%

^aFor the period July 1, 2013 (commencement of operations) to December 31, 2013.
^bThe amount shown for a share outstanding throughout the period may not correlate with the Statement of Operations for the period due to the timing of sales and repurchases of
the Fund shares in relation to income earned and/or fluctuating market value of the investments of the Fund.
^cBased on average daily shares outstanding.
^dRecognition of net investment income by the Fund is affected by the timing of declaration of dividends by the Underlying Funds and exchange traded funds in which the Fund invests.
^eAmount rounds to less than $0.01 per share.
^fTotal return is not annualized for periods less than one year.
^gRatios are annualized for periods less than one year.
^hDoes not include expenses of the Underlying Funds and exchange traded funds in which the Fund invests. The weighted average indirect expenses of the Underlying Funds and
exchange traded funds was 0.67% for the period ended December 31, 2013.

Annual Report | The accompanying notes are an integral part of these financial statements. | 109

Franklin Templeton Fund Allocator Series

Statement of Investments, December 31, 2013


Franklin LifeSmart 2030 Retirement Target Fund	Shares/Units		Value
Investments in Underlying Funds and Exchange Traded Funds
Alternative Strategies 0.9%
^a,bFranklin Pelagos Commodities Strategy Fund	1,389		$12,595
^a,bFranklin Pelagos Managed Futures Strategy Fund	134		1,079
			13,674
Domestic Equity 52.2%
^a,bFranklin Biotechnology Discovery Fund, Class R6	429		56,857
^a,bFranklin DynaTech Fund, Class R6	4,368		197,720
^a,bFranklin Flex Cap Growth Fund, Class R6	521		29,693
^bFranklin Growth Fund, Class R6	1,443		94,099
^a,bFranklin Growth Opportunities Fund, Class R6	1,111		34,385
^bFranklin MicroCap Value Fund, Class R6	735		29,689
^bFranklin Real Estate Securities Fund, Class R6	1,462		25,096
^bFranklin Rising Dividends Fund, Class R6	3,552		171,975
^a,bFranklin Small Cap Growth Fund, Class R6	2,301		44,990
^bFranklin Utilities Fund, Class R6	4,590		68,991
iShares Core S&P 500, ETF	248		46,041
			799,536
Domestic Fixed Income 10.8%
^bFranklin Low Duration Total Return Fund, Class R6	5,018		50,937
^bFranklin Strategic Income Fund, Class R6	2,848		29,818
^bFranklin U.S. Government Securities Fund, Class R6	9,112		58,957
iShares Intermediate Credit Bond, ETF	240		25,891
			165,603
Foreign Equity 26.0%
^bFranklin International Growth Fund, Class R6	772		8,755
^bFranklin International Small Cap Growth Fund, Class R6	6,671		150,634
^bMutual European Fund, Class R6	3,807		94,253
^bTempleton China World Fund, Class R6	737		26,446
^bTempleton Foreign Fund, Class R6	5,682		46,597
^bTempleton Frontier Markets Fund, Class R6	2,498		45,664
WisdomTree Japan Hedged Equity Fund, ETF (Japan)	513		26,081
			398,430
Foreign Fixed Income 6.6%
^bFranklin Templeton Emerging Market Debt Opportunities Fund	1,395		16,309
^bTempleton Global Total Return Fund, Class R6	6,325		85,329
			101,638
Total Investments in Underlying Funds and Exchange Traded Funds
(Cost $1,425,006) 96.5%			1,478,881
Other Assets, less Liabilities 3.5%			54,075
Net Assets 100.0%		$	1,532,956

See Abbreviations on page 174.

^aNon-income producing.
^bSee Note 7 regarding investments in Underlying Funds.

110 | The accompanying notes are an integral part of these financial statements. | Annual Report

Franklin Templeton Fund Allocator Series

Financial Highlights


Franklin LifeSmart 2035 Retirement Target Fund
			Year Ended December 31,
Class A	2013		2012		2011		2010		2009
Per share operating performance
(for a share outstanding throughout the year)
Net asset value, beginning of year	$ 11.01		$ 10.13		$ 10.59		$ 9.36		$ 7.12
Income from investment operations^a:
Net investment income^b,c	0.14		0.15		0.15		0.20		0.13
Net realized and unrealized gains (losses)	2.26		0.89		(0.46	)	1.18		2.34
Total from investment operations	2.40		1.04		(0.31	)	1.38		2.47
Less distributions from:
Net investment income and short term gains received from
Underlying Funds	(0.15	)	(0.16	)	(0.15	)	(0.15	)	(0.13	)
Net realized gains	(0.41	)	(—)^d		—		—		(0.10	)
Total distributions	(0.56	)	(0.16	)	(0.15	)	(0.15	)	(0.23	)
Net asset value, end of year	$ 12.85		$ 11.01		$ 10.13		$ 10.59		$ 9.36

Total return^e	22.06	%	10.33	%	(2.97	)%	14.78	%	35.04	%

Ratios to average net assets
Expenses before waiver and payments by affiliates^f	0.94	%	0.83	%	0.97	%	1.12	%	1.51	%
Expenses net of waiver and payments by affiliates^f	0.38	%	0.45	%	0.45	%	0.45	%	0.45	%
Net investment income^c	1.17	%	1.45	%	1.44	%	2.06	%	1.65	%

Supplemental data
Net assets, end of year (000’s)	$ 42,510		$ 32,095		$ 24,328		$ 19,677		$ 10,391
Portfolio turnover rate	49.84	%	27.30	%	29.19	%	23.28	%	19.76	%

^aThe amount shown for a share outstanding throughout the period may not correlate with the Statement of Operations for the period due to the timing of sales and repurchases of
the Fund shares in relation to income earned and/or fluctuating market value of the investments of the Fund.
^bBased on average daily shares outstanding.
^cRecognition of net investment income by the Fund is affected by the timing of declaration of dividends by the Underlying Funds and exchange traded funds in which the Fund invests.
^dAmount rounds to less than $0.01 per share.
^eTotal return does not reflect sales commissions or contingent deferred sales charges, if applicable.
^fDoes not include expenses of the Underlying Funds and exchange traded funds in which the Fund invests. The weighted average indirect expenses of the Underlying Funds and
exchange traded funds was 0.69% for the year ended December 31, 2013.

Annual Report | The accompanying notes are an integral part of these financial statements. | 111

Franklin Templeton Fund Allocator Series

Financial Highlights (continued)


Franklin LifeSmart 2035 Retirement Target Fund
			Year Ended December 31,
Class C	2013		2012		2011		2010		2009
Per share operating performance
(for a share outstanding throughout the year)
Net asset value, beginning of year	$ 10.85		$ 9.98		$ 10.45		$ 9.25		$ 7.06
Income from investment operations^a:
Net investment income^b,c	0.06		0.08		0.08		0.12		0.09
Net realized and unrealized gains (losses)	2.21		0.89		(0.47	)	1.18		2.28
Total from investment operations	2.27		0.97		(0.39	)	1.30		2.37
Less distributions from:
Net investment income and short term gains received from
Underlying Funds	(0.08	)	(0.10	)	(0.08	)	(0.10	)	(0.08	)
Net realized gains	(0.41	)	(—)^d		—		—		(0.10	)
Total distributions	(0.49	)	(0.10	)	(0.08	)	(0.10	)	(0.18	)
Net asset value, end of year	$ 12.63		$ 10.85		$ 9.98		$ 10.45		$ 9.25

Total return^e	21.17	%	9.72	%	(3.70	)%	14.04	%	34.00	%

Ratios to average net assets
Expenses before waiver and payments by affiliates^f	1.64	%	1.53	%	1.67	%	1.82	%	2.21	%
Expenses net of waiver and payments by affiliates^f	1.08	%	1.15	%	1.15	%	1.15	%	1.15	%
Net investment income^c	0.47	%	0.75	%	0.74	%	1.36	%	0.95	%

Supplemental data
Net assets, end of year (000’s)	$ 16,873		$ 11,124		$ 8,300		$ 6,669		$ 3,980
Portfolio turnover rate	49.84	%	27.30	%	29.19	%	23.28	%	19.76	%

^aThe amount shown for a share outstanding throughout the period may not correlate with the Statement of Operations for the period due to the timing of sales and repurchases of
the Fund shares in relation to income earned and/or fluctuating market value of the investments of the Fund.
^bBased on average daily shares outstanding.
^cRecognition of net investment income by the Fund is affected by the timing of declaration of dividends by the Underlying Funds and exchange traded funds in which the Fund invests.
^dAmount rounds to less than $0.01 per share.
^eTotal return does not reflect sales commissions or contingent deferred sales charges, if applicable.
^fDoes not include expenses of the Underlying Funds and exchange traded funds in which the Fund invests. The weighted average indirect expenses of the Underlying Funds and
exchange traded funds was 0.69% for the year ended December 31, 2013.

112 | The accompanying notes are an integral part of these financial statements. | Annual Report

Franklin Templeton Fund Allocator Series

Financial Highlights (continued)


Franklin LifeSmart 2035 Retirement Target Fund
			Year Ended December 31,
Class R	2013		2012		2011		2010		2009
Per share operating performance
(for a share outstanding throughout the year)
Net asset value, beginning of year	$ 11.01		$ 10.12		$ 10.59		$ 9.37		$ 7.13
Income from investment operations^a:
Net investment income^b,c	0.11		0.14		0.14		0.21		0.12
Net realized and unrealized gains (losses)	2.26		0.89		(0.48	)	1.15		2.33
Total from investment operations	2.37		1.03		(0.34	)	1.36		2.45
Less distributions from:
Net investment income and short term gains received from
Underlying Funds	(0.13	)	(0.14	)	(0.13	)	(0.14	)	(0.11	)
Net realized gains	(0.41	)	(—)^d		—		—		(0.10	)
Total distributions	(0.54	)	(0.14	)	(0.13	)	(0.14	)	(0.21	)
Net asset value, end of year	$ 12.84		$ 11.01		$ 10.12		$ 10.59		$ 9.37

Total return	21.77	%	10.24	%	(3.21	)%	14.55	%	34.79	%

Ratios to average net assets
Expenses before waiver and payments by affiliates^e	1.14	%	1.03	%	1.17	%	1.32	%	1.71	%
Expenses net of waiver and payments by affiliates^e	0.58	%	0.65	%	0.65	%	0.65	%	0.65	%
Net investment income^c	0.97	%	1.25	%	1.24	%	1.86	%	1.45	%

Supplemental data
Net assets, end of year (000’s)	$ 4,093		$ 3,035		$ 1,724		$ 1,038		$ 368
Portfolio turnover rate	49.84	%	27.30	%	29.19	%	23.28	%	19.76	%

^aThe amount shown for a share outstanding throughout the period may not correlate with the Statement of Operations for the period due to the timing of sales and repurchases of
the Fund shares in relation to income earned and/or fluctuating market value of the investments of the Fund.
^bBased on average daily shares outstanding.
^cRecognition of net investment income by the Fund is affected by the timing of declaration of dividends by the Underlying Funds and exchange traded funds in which the Fund invests.
^dAmount rounds to less than $0.01 per share.
^eDoes not include expenses of the Underlying Funds and exchange traded funds in which the Fund invests. The weighted average indirect expenses of the Underlying Funds and
exchange traded funds was 0.69% for the year ended December 31, 2013.

Annual Report | The accompanying notes are an integral part of these financial statements. | 113

Franklin Templeton Fund Allocator Series

Financial Highlights (continued)


Franklin LifeSmart 2035 Retirement Target Fund
	Period Ended
	December 31,
Class R6	2013	^a
Per share operating performance
(for a share outstanding throughout the period)
Net asset value, beginning of period	$ 11.77
Income from investment operations^b:
Net investment income^c,d	0.58
Net realized and unrealized gains (losses)	1.17
Total from investment operations	1.75
Less distributions from:
Net investment income and short term gains received from Underlying Funds	(0.19	)
Net realized gains	(0.41	)
Total distributions	(0.60	)
Net asset value, end of period	$ 12.92

Total return^e	15.09	%

Ratios to average net assets^f
Expenses before waiver and payments by affiliates^g	0.49	%
Expenses net of waiver and payments by affiliates^g	0.00	%
Net investment income^d	1.55	%

Supplemental data
Net assets, end of period (000’s)	$ 2,532
Portfolio turnover rate	49.84	%

^aFor the period May 1, 2013 (effective date) to December 31, 2013.
^bThe amount shown for a share outstanding throughout the period may not correlate with the Statement of Operations for the period due to the timing of sales and repurchases of
the Fund shares in relation to income earned and/or fluctuating market value of the investments of the Fund.
^cBased on average daily shares outstanding.
^dRecognition of net investment income by the Fund is affected by the timing of declaration of dividends by the Underlying Funds and exchange traded funds in which the Fund
invests.
^eTotal return is not annualized for periods less than one year.
^fRatios are annualized for periods less than one year.
^gDoes not include expenses of the Underlying Funds and exchange traded funds in which the Fund invests. The weighted average indirect expenses of the Underlying Funds and
exchange traded funds was 0.69% for the year ended December 31, 2013.

114 | The accompanying notes are an integral part of these financial statements. | Annual Report

Franklin Templeton Fund Allocator Series

Financial Highlights (continued)


Franklin LifeSmart 2035 Retirement Target Fund
			Year Ended December 31,
Advisor Class	2013		2012		2011		2010		2009
Per share operating performance
(for a share outstanding throughout the year)
Net asset value, beginning of year	$ 11.07		$ 10.17		$ 10.63		$ 9.39		$ 7.14
Income from investment operations^a:
Net investment income^b,c	0.18		0.18		0.17		0.23		0.16
Net realized and unrealized gains (losses)	2.28		0.91		(0.46	)	1.19		2.34
Total from investment operations	2.46		1.09		(0.29	)	1.42		2.50
Less distributions from:
Net investment income and short term gains received from
Underlying Funds	(0.19	)	(0.19	)	(0.17	)	(0.18	)	(0.15	)
Net realized gains	(0.41	)	(—)^d		—		—		(0.10	)
Total distributions	(0.60	)	(0.19	)	(0.17	)	(0.18	)	(0.25	)
Net asset value, end of year	$ 12.93		$ 11.07		$ 10.17		$ 10.63		$ 9.39

Total return	22.43	%	10.79	%	(2.69	)%	15.09	%	35.42	%

Ratios to average net assets
Expenses before waiver and payments by affiliates^e	0.64	%	0.53	%	0.67	%	0.82	%	1.21	%
Expenses net of waiver and payments by affiliates^e	0.08	%	0.15	%	0.15	%	0.15	%	0.15	%
Net investment income^c	1.47	%	1.75	%	1.74	%	2.36	%	1.95	%

Supplemental data
Net assets, end of year (000’s)	$ 1,815		$ 1,077		$ 817		$ 840		$ 493
Portfolio turnover rate	49.84	%	27.30	%	29.19	%	23.28	%	19.76	%

^aThe amount shown for a share outstanding throughout the period may not correlate with the Statement of Operations for the period due to the timing of sales and repurchases of
the Fund shares in relation to income earned and/or fluctuating market value of the investments of the Fund.
^bBased on average daily shares outstanding.
^cRecognition of net investment income by the Fund is affected by the timing of declaration of dividends by the Underlying Funds and exchange traded funds in which the Fund invests.
^dAmount rounds to less than $0.01 per share.
^eDoes not include expenses of the Underlying Funds and exchange traded funds in which the Fund invests. The weighted average indirect expenses of the Underlying Funds and
exchange traded funds was 0.69% for the year ended December 31, 2013.

Annual Report | The accompanying notes are an integral part of these financial statements. | 115

Franklin Templeton Fund Allocator Series

Statement of Investments, December 31, 2013


Franklin LifeSmart 2035 Retirement Target Fund	Shares/Units	Value
Investments in Underlying Funds and Exchange Traded Funds
Alternative Strategies 0.9%
^a,bFranklin Pelagos Commodities Strategy Fund	60,010	$ 544,293
^a,bFranklin Pelagos Managed Futures Strategy Fund	5,589	45,101
		589,394
Domestic Equity 59.5%
^a,bFranklin Biotechnology Discovery Fund, Class R6	28,135	3,733,213
^a,bFranklin DynaTech Fund, Class R6	219,610	9,941,746
^a,bFranklin Flex Cap Growth Fund, Class R6	27,074	1,542,154
^bFranklin Growth Fund, Class R6	62,752	4,092,049
^a,bFranklin Growth Opportunities Fund, Class R6	49,762	1,540,640
^bFranklin MicroCap Value Fund, Class R6	31,204	1,261,283
^bFranklin Real Estate Securities Fund, Class R6	67,993	1,166,758
^bFranklin Rising Dividends Fund, Class R6	186,033	9,005,834
^a,bFranklin Small Cap Growth Fund, Class R6	104,302	2,039,104
^bFranklin Utilities Fund, Class R6	239,377	3,597,836
iShares Core S&P 500, ETF	13,110	2,433,871
		40,354,488
Domestic Fixed Income 8.8%
^bFranklin Low Duration Total Return Fund, Class R6	174,229	1,768,424
^bFranklin Strategic Income Fund, Class R6	97,149	1,017,149
^bFranklin U.S. Government Securities Fund, Class R6	323,629	2,093,881
iShares Intermediate Credit Bond, ETF	10,200	1,100,376
		5,979,830
Foreign Equity 28.5%
^bFranklin International Growth Fund, Class R6	35,428	401,756
^bFranklin International Small Cap Growth Fund, Class R6	315,372	7,121,088
^bMutual European Fund, Class R6	188,555	4,668,633
^bTempleton China World Fund, Class R6	35,578	1,276,521
^bTempleton Foreign Fund, Class R6	286,395	2,348,437
^bTempleton Frontier Markets Fund, Class R6	119,184	2,178,690
WisdomTree Japan Hedged Equity Fund, ETF (Japan)	26,600	1,352,344
		19,347,469
Foreign Fixed Income 5.2%
^bFranklin Templeton Emerging Market Debt Opportunities Fund	49,365	577,079
^bTempleton Global Total Return Fund, Class R6	217,058	2,928,103
		3,505,182
Total Investments in Underlying Funds and Exchange Traded Funds before
Short Term Investments (Cost $57,694,206) 102.9%		69,776,363

116 | Annual Report

Franklin Templeton Fund Allocator Series

Statement of Investments, December 31, 2013 (continued)


Franklin LifeSmart 2035 Retirement Target Fund	Shares/Units		Value
Short Term Investments (Cost $962,275) 1.4%
Money Market Funds 1.4%
^a,bInstitutional Fiduciary Trust Money Market Portfolio	962,275	$	962,275
Total Investments in Underlying Funds and Exchange Traded Funds
(Cost $58,656,481) 104.3%			70,738,638
Other Assets, less Liabilities (4.3)%			(2,915,421	)
Net Assets 100.0%		$	67,823,217


See Abbreviations on page 174.

^aNon-income producing.
^bSee Note 7 regarding investments in Underlying Funds.

Annual Report | The accompanying notes are an integral part of these financial statements. | 117

Franklin Templeton Fund Allocator Series

Financial Highlights


Franklin LifeSmart 2040 Retirement Target Fund
	Period Ended
	December 31,
Class A	2013	^a
Per share operating performance
(for a share outstanding throughout the period)
Net asset value, beginning of period	$ 10.00
Income from investment operations^b:
Net investment income^c,d	0.11
Net realized and unrealized gains (losses)	1.18
Total from investment operations	1.29
Less distributions from:
Net investment income and short term gains received from Underlying Funds	(0.10	)
Net realized gains	(—)^e
Total distributions	(0.10	)
Net asset value, end of period	$ 11.19

Total return^f	12.91	%

Ratios to average net assets^g
Expenses before waiver and payments by affiliates^h	33.48	%
Expenses net of waiver and payments by affiliates^h	0.25	%
Net investment income^d	1.98	%

Supplemental data
Net assets, end of period (000’s)	$ 672
Portfolio turnover rate	16.27	%

^aFor the period July 1, 2013 (commencement of operations) to December 31, 2013.
^bThe amount shown for a share outstanding throughout the period may not correlate with the Statement of Operations for the period due to the timing of sales and repurchases of
the Fund shares in relation to income earned and/or fluctuating market value of the investments of the Fund.
^cBased on average daily shares outstanding.
^dRecognition of net investment income by the Fund is affected by the timing of declaration of dividends by the Underlying Funds and exchange traded funds in which the Fund invests.
^eAmount rounds to less than $0.01 per share.
^fTotal return does not reflect sales commissions or contingent deferred sales charges, if applicable, and is not annualized for the period less than one year.
^gRatios are annualized for periods less than one year.
^hDoes not include expenses of the Underlying Funds and exchange traded funds in which the Fund invests. The weighted average indirect expenses of the Underlying Funds and
exchange traded funds was 0.66% for the period ended December 31, 2013.

118 | The accompanying notes are an integral part of these financial statements. | Annual Report

Franklin Templeton Fund Allocator Series

Financial Highlights (continued)


Franklin LifeSmart 2040 Retirement Target Fund
	Period Ended
	December 31,
Class C	2013	^a
Per share operating performance
(for a share outstanding throughout the period)
Net asset value, beginning of period	$ 10.00
Income from investment operations^b:
Net investment income^c,d	0.08
Net realized and unrealized gains (losses)	1.16
Total from investment operations	1.24
Less distributions from:
Net investment income and short term gains received from Underlying Funds	(0.09	)
Net realized gains	(—)^e
Total distributions	(0.09	)
Net asset value, end of period	$ 11.15

Total return^f	12.46	%

Ratios to average net assets^g
Expenses before waiver and payments by affiliates^h	34.28	%
Expenses net of waiver and payments by affiliates^h	1.05	%
Net investment income^d	1.18	%

Supplemental data
Net assets, end of period (000’s)	$ 60
Portfolio turnover rate	16.27	%

^aFor the period July 1, 2013 (commencement of operations) to December 31, 2013.
^bThe amount shown for a share outstanding throughout the period may not correlate with the Statement of Operations for the period due to the timing of sales and repurchases of
the Fund shares in relation to income earned and/or fluctuating market value of the investments of the Fund.
^cBased on average daily shares outstanding.
^dRecognition of net investment income by the Fund is affected by the timing of declaration of dividends by the Underlying Funds and exchange traded funds in which the Fund invests.
^eAmount rounds to less than $0.01 per share.
^fTotal return does not reflect sales commissions or contingent deferred sales charges, if applicable, and is not annualized for the period less than one year.
^gRatios are annualized for periods less than one year.
^hDoes not include expenses of the Underlying Funds and exchange traded funds in which the Fund invests. The weighted average indirect expenses of the Underlying Funds and
exchange traded funds was 0.66% for the period ended December 31, 2013.

Annual Report | The accompanying notes are an integral part of these financial statements. | 119

Franklin Templeton Fund Allocator Series

Financial Highlights (continued)


Franklin LifeSmart 2040 Retirement Target Fund
	Period Ended
	December 31,
Class R	2013	^a
Per share operating performance
(for a share outstanding throughout the period)
Net asset value, beginning of period	$ 10.00
Income from investment operations^b:
Net investment income^c,d	0.07
Net realized and unrealized gains (losses)	1.21
Total from investment operations	1.28
Less distributions from:
Net investment income and short term gains received from Underlying Funds	(0.09	)
Net realized gains	(—)^e
Total distributions	(0.09	)
Net asset value, end of period	$ 11.19

Total return^f	12.81	%

Ratios to average net assets^g
Expenses before waiver and payments by affiliates^h	33.78	%
Expenses net of waiver and payments by affiliates^h	0.55	%
Net investment income^d	1.68	%

Supplemental data
Net assets, end of period (000’s)	$ 11
Portfolio turnover rate	16.27	%

^aFor the period July 1, 2013 (commencement of operations) to December 31, 2013.
^bThe amount shown for a share outstanding throughout the period may not correlate with the Statement of Operations for the period due to the timing of sales and repurchases of
the Fund shares in relation to income earned and/or fluctuating market value of the investments of the Fund.
^cBased on average daily shares outstanding.
^dRecognition of net investment income by the Fund is affected by the timing of declaration of dividends by the Underlying Funds and exchange traded funds in which the Fund invests.
^eAmount rounds to less than $0.01 per share.
^fTotal return is not annualized for periods less than one year.
^gRatios are annualized for periods less than one year.
^hDoes not include expenses of the Underlying Funds and exchange traded funds in which the Fund invests. The weighted average indirect expenses of the Underlying Funds and
exchange traded funds was 0.66% for the period ended December 31, 2013.

120 | The accompanying notes are an integral part of these financial statements. | Annual Report

Franklin Templeton Fund Allocator Series

Financial Highlights (continued)


Franklin LifeSmart 2040 Retirement Target Fund
	Period Ended
	December 31,
Class R6	2013	^a
Per share operating performance
(for a share outstanding throughout the period)
Net asset value, beginning of period	$ 10.00
Income from investment operations^b:
Net investment income^c,d	0.10
Net realized and unrealized gains (losses)	1.20
Total from investment operations	1.30
Less distributions from:
Net investment income and short term gains received from Underlying Funds	(0.10	)
Net realized gains	(—)^e
Total distributions	(0.10	)
Net asset value, end of period	$ 11.20

Total return^f	13.07	%

Ratios to average net assets^g
Expenses before waiver and payments by affiliates^h	33.68	%
Expenses net of waiver and payments by affiliates^h	0.00	%
Net investment income^d	2.23	%

Supplemental data
Net assets, end of period (000’s)	$ 11
Portfolio turnover rate	16.27	%

^aFor the period July 1, 2013 (commencement of operations) to December 31, 2013.
^bThe amount shown for a share outstanding throughout the period may not correlate with the Statement of Operations for the period due to the timing of sales and repurchases of
the Fund shares in relation to income earned and/or fluctuating market value of the investments of the Fund.
^cBased on average daily shares outstanding.
^dRecognition of net investment income by the Fund is affected by the timing of declaration of dividends by the Underlying Funds and exchange traded funds in which the Fund invests.
^eAmount rounds to less than $0.01 per share.
^fTotal return is not annualized for periods less than one year.
^gRatios are annualized for periods less than one year.
^hDoes not include expenses of the Underlying Funds and exchange traded funds in which the Fund invests.The weighted average indirect expenses of the Underlying Funds and
exchange traded funds was 0.66% for the period ended December 31, 2013.

Annual Report | The accompanying notes are an integral part of these financial statements. | 121

Franklin Templeton Fund Allocator Series

Financial Highlights (continued)


Franklin LifeSmart 2040 Retirement Target Fund
	Period Ended
	December 31,
Advisor Class	2013	^a
Per share operating performance
(for a share outstanding throughout the period)
Net asset value, beginning of period	$ 10.00
Income from investment operations^b:
Net investment income^c,d	0.10
Net realized and unrealized gains (losses)	1.20
Total from investment operations	1.30
Less distributions from:
Net investment income and short term gains received from Underlying Funds	(0.10	)
Net realized gains	(—)^e
Total distributions	(0.10	)
Net asset value, end of period	$ 11.20

Total return^f	13.04	%

Ratios to average net assets^g
Expenses before waiver and payments by affiliates^h	33.28	%
Expenses net of waiver and payments by affiliates^h	0.05	%
Net investment income^d	2.18	%

Supplemental data
Net assets, end of period (000’s)	$ 23
Portfolio turnover rate	16.27	%

^aFor the period July 1, 2013 (commencement of operations) to December 31, 2013.
^bThe amount shown for a share outstanding throughout the period may not correlate with the Statement of Operations for the period due to the timing of sales and repurchases of
the Fund shares in relation to income earned and/or fluctuating market value of the investments of the Fund.
^cBased on average daily shares outstanding.
^dRecognition of net investment income by the Fund is affected by the timing of declaration of dividends by the Underlying Funds and exchange traded funds in which the Fund invests.
^eAmount rounds to less than $0.01 per share.
^fTotal return is not annualized for periods less than one year.
^gRatios are annualized for periods less than one year.
^hDoes not include expenses of the Underlying Funds and exchange traded funds in which the Fund invests. The weighted average indirect expenses of the Underlying Funds and
exchange traded funds was 0.66% for the period ended December 31, 2013.

122 | The accompanying notes are an integral part of these financial statements. | Annual Report

Franklin Templeton Fund Allocator Series

Statement of Investments, December 31, 2013


Franklin LifeSmart 2040 Retirement Target Fund	Shares/Units	Value
Investments in Underlying Funds and Exchange Traded Funds
Alternative Strategies 0.7%
^a,bFranklin Pelagos Commodities Strategy Fund	550	$ 4,991
^a,bFranklin Pelagos Managed Futures Strategy Fund	51	414
		5,405
Domestic Equity 54.1%
^a,bFranklin Biotechnology Discovery Fund, Class R6	236	31,371
^a,bFranklin DynaTech Fund, Class R6	2,321	105,060
^a,bFranklin Flex Cap Growth Fund, Class R6	284	16,182
^bFranklin Growth Fund, Class R6	822	53,593
^a,bFranklin Growth Opportunities Fund, Class R6	533	16,491
^bFranklin MicroCap Value Fund, Class R6	311	12,557
^bFranklin Real Estate Securities Fund, Class R6	721	12,380
^bFranklin Rising Dividends Fund, Class R6	1,849	89,526
^a,bFranklin Small Cap Growth Fund, Class R6	1,050	20,533
^bFranklin Utilities Fund, Class R6	2,473	37,169
iShares Core S&P 500, ETF	139	25,805
		420,667
Domestic Fixed Income 7.4%
^bFranklin Low Duration Total Return Fund, Class R6	1,711	17,365
^bFranklin Strategic Income Fund, Class R6	973	10,183
^bFranklin U.S. Government Securities Fund, Class R6	3,081	19,937
iShares Intermediate Credit Bond, ETF	93	10,033
		57,518
Foreign Equity 26.3%
^bFranklin International Growth Fund, Class R6	391	4,435
^bFranklin International Small Cap Growth Fund, Class R6	3,365	75,975
^bMutual European Fund, Class R6	1,922	47,599
^bTempleton China World Fund, Class R6	386	13,860
^bTempleton Foreign Fund, Class R6	2,945	24,148
^bTempleton Frontier Markets Fund, Class R6	1,281	23,412
WisdomTree Japan Hedged Equity Fund, ETF (Japan)	293	14,896
		204,325
Foreign Fixed Income 4.4%
^bFranklin Templeton Emerging Market Debt Opportunities Fund	468	5,471
^bTempleton Global Total Return Fund, Class R6	2,158	29,116
		34,587
Total Investments in Underlying Funds and Exchange Traded Funds
(Cost $685,441) 92.9%		722,502
Other Assets, less Liabilities 7.1%		55,074
Net Assets 100.0%		$777,576

Franklin Templeton Fund Allocator Series

Financial Highlights


Franklin LifeSmart 2045 Retirement Target Fund
				Year Ended December 31,
Class A	2013			2012		2011		2010		2009
Per share operating performance
(for a share outstanding throughout the year)
Net asset value, beginning of year	$ 10.92		$	$ 10.01		$ 10.44		$ 9.13		$ 6.89
Income from investment operations^a:
Net investment income^b,c	0.13			0.15		0.15		0.16		0.12
Net realized and unrealized gains (losses)	2.36			0.91		(0.44	)	1.29		2.36
Total from investment operations	2.49			1.06		(0.29	)	1.45		2.48
Less distributions from:
Net investment income and short term gains received from
Underlying Funds	(0.15	)		(0.15	)	(0.14	)	(0.14	)	(0.10	)
Net realized gains	(0.38	)		—		—		—		(0.14	)
Total distributions	(0.53	)		(0.15	)	(0.14	)	(0.14	)	(0.24	)
Net asset value, end of year	$ 12.88			$ 10.92		$ 10.01		$ 10.44		$ 9.13

Total return^d	23.07	%		10.61	%	(2.81	)%	15.92	%	36.53	%

Ratios to average net assets
Expenses before waiver and payments by affiliates^e	1.16	%		1.05	%	1.30	%	1.56	%	2.03	%
Expenses net of waiver and payments by affiliates^e	0.38	%		0.45	%	0.45	%	0.45	%	0.45	%
Net investment income^c	1.08	%		1.41	%	1.43	%	1.80	%	1.53	%

Supplemental data
Net assets, end of year (000’s)	$ 27,991			$ 20,765		$ 14,762		$ 10,090		$ 6,943
Portfolio turnover rate	44.44	%		32.47	%	34.66	%	25.05	%	14.30	%

124 | The accompanying notes are an integral part of these financial statements. | Annual Report

Franklin Templeton Fund Allocator Series

Financial Highlights (continued)


Franklin LifeSmart 2045 Retirement Target Fund
			Year Ended December 31,
Class C	2013		2012		2011		2010		2009
Per share operating performance
(for a share outstanding throughout the year)
Net asset value, beginning of year	$ 10.73		$ 9.84		$ 10.28		$ 9.01		$ 6.81
Income from investment operations^a:
Net investment income^b,c	0.04		0.07		0.07		0.11		0.07
Net realized and unrealized gains (losses)	2.31		0.90		(0.43	)	1.25		2.33
Total from investment operations	2.35		0.97		(0.36	)	1.36		2.40
Less distributions from:
Net investment income and short term gains received from
Underlying Funds	(0.07	)	(0.08	)	(0.08	)	(0.09	)	(0.06	)
Net realized gains	(0.38	)	—		—		—		(0.14	)
Total distributions	(0.45	)	(0.08	)	(0.08	)	(0.09	)	(0.20	)
Net asset value, end of year	$ 12.63		$ 10.73		$ 9.84		$ 10.28		$ 9.01

Total return^d	22.20	%	9.85	%	(3.54	)%	15.13	%	35.77	%

Ratios to average net assets
Expenses before waiver and payments by affiliates^e	1.86	%	1.74	%	2.00	%	2.26	%	2.73	%
Expenses net of waiver and payments by affiliates^e	1.08	%	1.14	%	1.15	%	1.15	%	1.15	%
Net investment income^c	0.38	%	0.72	%	0.73	%	1.10	%	0.83	%

Supplemental data
Net assets, end of year (000’s)	$ 9,484		$ 6,680		$ 5,869		$ 4,157		$ 2,264
Portfolio turnover rate	44.44	%	32.47	%	34.66	%	25.05	%	14.30	%

Annual Report | The accompanying notes are an integral part of these financial statements. | 125

Franklin Templeton Fund Allocator Series

Financial Highlights (continued)


Franklin LifeSmart 2045 Retirement Target Fund
			Year Ended December 31,
Class R	2013		2012		2011		2010		2009
Per share operating performance
(for a share outstanding throughout the year)
Net asset value, beginning of year	$ 10.88		$ 9.99		$ 10.42		$ 9.12		$ 6.88
Income from investment operations^a:
Net investment income^b,c	0.10		0.16		0.12		0.16		0.12
Net realized and unrealized gains (losses)	2.35		0.87		(0.43	)	1.27		2.35
Total from investment operations	2.45		1.03		(0.31	)	1.43		2.47
Less distributions from:
Net investment income and short term gains received from
Underlying Funds	(0.13	)	(0.14	)	(0.12	)	(0.13	)	(0.09	)
Net realized gains	(0.38	)	—		—		—		(0.14	)
Total distributions	(0.51	)	(0.14	)	(0.12	)	(0.13	)	(0.23	)
Net asset value, end of year	$ 12.82		$ 10.88		$ 9.99		$ 10.42		$ 9.12

Total return	22.76	%	10.35	%	(3.01	)%	15.66	%	36.45	%

Ratios to average net assets
Expenses before waiver and payments by affiliates^d	1.36	%	1.25	%	1.50	%	1.76	%	2.23	%
Expenses net of waiver and payments by affiliates^d	0.58	%	0.65	%	0.65	%	0.65	%	0.65	%
Net investment income^c	0.88	%	1.21	%	1.23	%	1.60	%	1.33	%

Supplemental data
Net assets, end of year (000’s)	$ 4,564		$ 3,336		$ 860		$ 663		$ 394
Portfolio turnover rate	44.44	%	32.47	%	34.66	%	25.05	%	14.30	%

^aThe amount shown for a share outstanding throughout the period may not correlate with the Statement of Operations for the period due to the timing of sales and repurchases of
the Fund shares in relation to income earned and/or fluctuating market value of the investments of the Fund.
^bBased on average daily shares outstanding.
^cRecognition of net investment income by the Fund is affected by the timing of declaration of dividends by the Underlying Funds and exchange traded funds in which the Fund invests.
^dDoes not include expenses of the Underlying Funds and exchange traded funds in which the Fund invests. The weighted average indirect expenses of the Underlying Funds and
exchange traded funds was 0.69% for the year ended December 31, 2013.

126 | The accompanying notes are an integral part of these financial statements. | Annual Report

Franklin Templeton Fund Allocator Series

Financial Highlights (continued)


Franklin LifeSmart 2045 Retirement Target Fund
	Period Ended
	December 31,
Class R6	2013	^a
Per share operating performance
(for a share outstanding throughout the period)
Net asset value, beginning of period	$ 11.67
Income from investment operations^b:
Net investment income^c,d	0.60
Net realized and unrealized gains (losses)	1.24
Total from investment operations	1.84
Less distributions from:
Net investment income and short term gains received from Underlying Funds	(0.18	)
Net realized gains	(0.38	)
Total distributions	(0.56	)
Net asset value, end of period	$ 12.95

Total return^e	16.08	%

Ratios to average net assets^f
Expenses before waiver and payments by affiliates^g	0.60	%
Expenses net of waiver and payments by affiliates^g	0.00	%
Net investment income^d	1.46	%

Supplemental data
Net assets, end of period (000’s)	$ 1,718
Portfolio turnover rate	44.44	%

Annual Report | The accompanying notes are an integral part of these financial statements. | 127

Franklin Templeton Fund Allocator Series

Financial Highlights (continued)


Franklin LifeSmart 2045 Retirement Target Fund
			Year Ended December 31,
Advisor Class	2013		2012		2011		2010		2009
Per share operating performance
(for a share outstanding throughout the year)
Net asset value, beginning of year	$ 10.96		$ 10.05		$ 10.48		$ 9.16		$ 6.89
Income from investment operations^a:
Net investment income^b,c	0.17		0.16		0.17		0.25		0.14
Net realized and unrealized gains (losses)	2.37		0.93		(0.44	)	1.24		2.39
Total from investment operations	2.54		1.09		(0.27	)	1.49		2.53
Less distributions from:
Net investment income and short term gains received from
Underlying Funds	(0.18	)	(0.18	)	(0.16	)	(0.17	)	(0.12	)
Net realized gains	(0.38	)	—		—		—		(0.14	)
Total distributions	(0.56	)	(0.18	)	(0.16	)	(0.17	)	(0.26	)
Net asset value, end of year	$ 12.94		$ 10.96		$ 10.05		$ 10.48		$ 9.16

Total return	23.48	%	10.86	%	(2.55	)%	16.26	%	37.27	%

Ratios to average net assets
Expenses before waiver and payments by affiliates^d	0.86	%	0.75	%	1.00	%	1.26	%	1.73	%
Expenses net of waiver and payments by affiliates^d	0.08	%	0.15	%	0.15	%	0.15	%	0.15	%
Net investment income^c	1.38	%	1.71	%	1.73	%	2.10	%	1.83	%

Supplemental data
Net assets, end of year (000’s)	$ 1,188		$ 709		$ 642		$ 499		$ 205
Portfolio turnover rate	44.44	%	32.47	%	34.66	%	25.05	%	14.30	%

^aThe amount shown for a share outstanding throughout the period may not correlate with the Statement of Operations for the period due to the timing of sales and repurchases of
the Fund shares in relation to income earned and/or fluctuating market value of the investments of the Fund.
^bBased on average daily shares outstanding.
^cRecognition of net investment income by the Fund is affected by the timing of declaration of dividends by the Underlying Funds and exchange traded funds in which the Fund invests.
^dDoes not include expenses of the Underlying Funds and exchange traded funds in which the Fund invests. The weighted average indirect expenses of the Underlying Funds and
exchange traded funds was 0.69% for the year ended December 31, 2013.

128 | The accompanying notes are an integral part of these financial statements. | Annual Report

Franklin Templeton Fund Allocator Series

Statement of Investments, December 31, 2013


Franklin LifeSmart 2045 Retirement Target Fund	Shares/Units	Value
Investments in Underlying Funds and Exchange Traded Funds
Alternative Strategies 0.7%
^a,bFranklin Pelagos Commodities Strategy Fund	34,055	$ 308,880
^a,bFranklin Pelagos Managed Futures Strategy Fund	3,159	25,491
		334,371

Domestic Equity 61.7%
^a,bFranklin Biotechnology Discovery Fund, Class R6	18,169	2,410,819
^a,bFranklin DynaTech Fund, Class R6	156,359	7,078,388
^a,bFranklin Flex Cap Growth Fund, Class R6	15,327	873,022
^bFranklin Growth Fund, Class R6	45,518	2,968,235
^a,bFranklin Growth Opportunities Fund, Class R6	27,492	851,159
^bFranklin MicroCap Value Fund, Class R6	17,771	718,299
^bFranklin Real Estate Securities Fund, Class R6	38,542	661,384
^bFranklin Rising Dividends Fund, Class R6	135,441	6,556,708
^a,bFranklin Small Cap Growth Fund, Class R6	70,051	1,369,488
^bFranklin Utilities Fund, Class R6	169,143	2,542,225
iShares Core S&P 500, ETF	9,085	1,686,630
		27,716,357
Domestic Fixed Income 6.7%
^bFranklin Low Duration Total Return Fund, Class R6	89,366	907,062
^bFranklin Strategic Income Fund, Class R6	45,777	479,280
^bFranklin U.S. Government Securities Fund, Class R6	153,136	990,789
iShares Intermediate Credit Bond, ETF	5,700	614,916
		2,992,047
Foreign Equity 30.6%
^bFranklin International Growth Fund, Class R6	24,601	278,978
^bFranklin International Small Cap Growth Fund, Class R6	221,280	4,996,503
^bMutual European Fund, Class R6	128,117	3,172,169
^bTempleton China World Fund, Class R6	26,217	940,658
^bTempleton Foreign Fund, Class R6	239,512	1,964,002
^bTempleton Frontier Markets Fund, Class R6	80,335	1,468,525
WisdomTree Japan Hedged Equity Fund, ETF (Japan)	18,300	930,371
		13,751,206
Foreign Fixed Income 3.7%
^bFranklin Templeton Emerging Market Debt Opportunities Fund	23,016	269,058
^bTempleton Global Total Return Fund, Class R6	104,863	1,414,597
		1,683,655
Total Investments in Underlying Funds and Exchange Traded Funds before
Short Term Investments (Cost $38,102,369) 103.4%		46,477,636

Annual Report | 129

Franklin Templeton Fund Allocator Series

Statement of Investments, December 31, 2013 (continued)


Franklin LifeSmart 2045 Retirement Target Fund	Shares/Units		Value
Short Term Investments (Cost $329,483) 0.7%
Money Market Funds 0.7%
^a,bInstitutional Fiduciary Trust Money Market Portfolio	329,483	$	329,483
Total Investments in Underlying Funds and Exchange Traded Funds
(Cost $38,431,852) 104.1%			46,807,119
Other Assets, less Liabilities (4.1)%			(1,862,593)
Net Assets 100.0%		$	44,944,526


See Abbreviations on page 174.

^aNon-income producing.
^bSee Note 7 regarding investments in Underlying Funds.

130 | The accompanying notes are an integral part of these financial statements. | Annual Report

Franklin Templeton Fund Allocator Series

Financial Highlights


Franklin LifeSmart 2050 Retirement Target Fund
	Period Ended
	December 31,
Class A	2013	^a
Per share operating performance
(for a share outstanding throughout the period)
Net asset value, beginning of period	$ 10.00
Income from investment operations^b:
Net investment income^c,d	0.10
Net realized and unrealized gains (losses)	1.21
Total from investment operations	1.31
Less distributions from net investment income and short term gains received from Underlying Funds	(0.10	)
Net asset value, end of period	$ 11.21

Total return^e	13.14	%

Ratios to average net assets^f
Expenses before waiver and payments by affiliates^g	34.22	%
Expenses net of waiver and payments by affiliates^g	0.23	%
Net investment income^d	1.88	%

Supplemental data
Net assets, end of period (000’s)	$ 512
Portfolio turnover rate	20.66	%

^aFor the period July 1, 2013 (commencement of operations) to December 31, 2013.
^bThe amount shown for a share outstanding throughout the period may not correlate with the Statement of Operations for the period due to the timing of sales and repurchases of
the Fund shares in relation to income earned and/or fluctuating market value of the investments of the Fund.
^cBased on average daily shares outstanding.
^dRecognition of net investment income by the Fund is affected by the timing of declaration of dividends by the Underlying Funds and exchange traded funds in which the Fund invests.
^eTotal return does not reflect sales commissions or contingent deferred sales charges, if applicable, and is not annualized for periods less than one year.
^fRatios are annualized for periods less than one year.
^gDoes not include expenses of the Underlying Funds and exchange traded funds in which the Fund invests. The weighted average indirect expenses of the Underlying Funds and
exchange traded funds was 0.66% for the period ended December 31, 2013.

Annual Report | The accompanying notes are an integral part of these financial statements. | 131

Franklin Templeton Fund Allocator Series

Financial Highlights (continued)


Franklin LifeSmart 2050 Retirement Target Fund
	Period Ended
	December 31,
Class C	2013	^a
Per share operating performance
(for a share outstanding throughout the period)
Net asset value, beginning of period	$ 10.00
Income from investment operations^b:
Net investment income^c,d	0.09
Net realized and unrealized gains (losses)	1.18
Total from investment operations	1.27
Less distributions from net investment income and short term gains received from Underlying Funds	(0.09	)
Net asset value, end of period	$ 11.18

Total return^e	12.82	%

Ratios to average net assets^f
Expenses before waiver and payments by affiliates^g	35.04	%
Expenses net of waiver and payments by affiliates^g	1.05	%
Net investment income^d	1.06	%

Supplemental data
Net assets, end of period (000’s)	$ 82
Portfolio turnover rate	20.66	%

^aFor the period July 1, 2013 (commencement of operations) to December 31, 2013.
^bThe amount shown for a share outstanding throughout the period may not correlate with the Statement of Operations for the period due to the timing of sales and repurchases of
the Fund shares in relation to income earned and/or fluctuating market value of the investments of the Fund.
^cBased on average daily shares outstanding.
^dRecognition of net investment income by the Fund is affected by the timing of declaration of dividends by the Underlying Funds and exchange traded funds in which the Fund invests.
^eTotal return does not reflect sales commissions or contingent deferred sales charges, if applicable, and is not annualized for periods less than one year.
^fRatios are annualized for periods less than one year.
^gDoes not include expenses of the Underlying Funds and exchange traded funds in which the Fund invests. The weighted average indirect expenses of the Underlying Funds and
exchange traded funds was 0.66% for the period ended December 31, 2013.

132 | The accompanying notes are an integral part of these financial statements. | Annual Report

Franklin Templeton Fund Allocator Series

Financial Highlights (continued)


Franklin LifeSmart 2050 Retirement Target Fund
	Period Ended
	December 31,
Class R	2013	^a
Per share operating performance
(for a share outstanding throughout the period)
Net asset value, beginning of period	$ 10.00
Income from investment operations^b:
Net investment income^c,d	0.06
Net realized and unrealized gains (losses)	1.24
Total from investment operations	1.30
Less distributions from net investment income and short term gains received from Underlying Funds	(0.09	)
Net asset value, end of period	$ 11.21

Total return^e	13.02	%

Ratios to average net assets^f
Expenses before waiver and payments by affiliates^g	34.54	%
Expenses net of waiver and payments by affiliates^g	0.55	%
Net investment income^d	1.56	%

Supplemental data
Net assets, end of period (000’s)	$ 11
Portfolio turnover rate	20.66	%

^aFor the period July 1, 2013 (commencement of operations) to December 31, 2013.
^bThe amount shown for a share outstanding throughout the period may not correlate with the Statement of Operations for the period due to the timing of sales and repurchases of
the Fund shares in relation to income earned and/or fluctuating market value of the investments of the Fund.
^cBased on average daily shares outstanding.
^dRecognition of net investment income by the Fund is affected by the timing of declaration of dividends by the Underlying Funds and exchange traded funds in which the Fund invests.
^eTotal return is not annualized for periods less than one year.
^fRatios are annualized for periods less than one year.
^gDoes not include expenses of the Underlying Funds and exchange traded funds in which the Fund invests. The weighted average indirect expenses of the Underlying Funds and
exchange traded funds was 0.66% for the period ended December 31, 2013.

Annual Report | The accompanying notes are an integral part of these financial statements. | 133

Franklin Templeton Fund Allocator Series

Financial Highlights (continued)


Franklin LifeSmart 2050 Retirement Target Fund
	Period Ended
	December 31,
Class R6	2013	^a
Per share operating performance
(for a share outstanding throughout the period)
Net asset value, beginning of period	$ 10.00
Income from investment operations^b:
Net investment income^c,d	0.09
Net realized and unrealized gains (losses)	1.25
Total from investment operations	1.34
Less distributions from net investment income and short term gains received from Underlying Funds	(0.11	)
Net asset value, end of period	$ 11.23

Total return^e	13.39	%

Ratios to average net assets^f
Expenses before waiver and payments by affiliates^g	34.36	%
Expenses net of waiver and payments by affiliates^g	0.00	%
Net investment income^d	2.11	%

Supplemental data
Net assets, end of period (000’s)	$ 11
Portfolio turnover rate	20.66	%

^aFor the period July 1, 2013 (commencement of operations) to December 31, 2013.
^bThe amount shown for a share outstanding throughout the period may not correlate with the Statement of Operations for the period due to the timing of sales and repurchases of
the Fund shares in relation to income earned and/or fluctuating market value of the investments of the Fund.
^cBased on average daily shares outstanding.
^dRecognition of net investment income by the Fund is affected by the timing of declaration of dividends by the Underlying Funds and exchange traded funds in which the Fund invests.
^eTotal return is not annualized for periods less than one year.
^fRatios are annualized for periods less than one year.
^gDoes not include expenses of the Underlying Funds and exchange traded funds in which the Fund invests. The weighted average indirect expenses of the Underlying Funds and
exchange traded funds was 0.66% for the period ended December 31, 2013.

134 | The accompanying notes are an integral part of these financial statements. | Annual Report

Franklin Templeton Fund Allocator Series

Financial Highlights (continued)


Franklin LifeSmart 2050 Retirement Target Fund
	Period Ended
	December 31,
Advisor Class	2013	^a
Per share operating performance
(for a share outstanding throughout the period)
Net asset value, beginning of period	$ 10.00
Income from investment operations^b:
Net investment income^c,d	0.10
Net realized and unrealized gains (losses)	1.23
Total from investment operations	1.33
Less distributions from net investment income and short term gains received from Underlying Funds	(0.11	)
Net asset value, end of period	$ 11.22

Total return^e	13.26	%

Ratios to average net assets^f
Expenses before waiver and payments by affiliates^g	34.04	%
Expenses net of waiver and payments by affiliates^g	0.05	%
Net investment income^d	2.06	%

Supplemental data
Net assets, end of period (000’s)	$ 75
Portfolio turnover rate	20.66	%

^aFor the period July 1, 2013 (commencement of operations) to December 31, 2013.
^bThe amount shown for a share outstanding throughout the period may not correlate with the Statement of Operations for the period due to the timing of sales and repurchases of
the Fund shares in relation to income earned and/or fluctuating market value of the investments of the Fund.
^cBased on average daily shares outstanding.
^dRecognition of net investment income by the Fund is affected by the timing of declaration of dividends by the Underlying Funds and exchange traded funds in which the Fund invests.
^eTotal return is not annualized for periods less than one year.
^fRatios are annualized for periods less than one year.
^gDoes not include expenses of the Underlying Funds and exchange traded funds in which the Fund invests. The weighted average indirect expenses of the Underlying Funds and
exchange traded funds was 0.66% for the period ended December 31, 2013.

Annual Report | The accompanying notes are an integral part of these financial statements. | 135

Franklin Templeton Fund Allocator Series

Statement of Investments, December 31, 2013


Franklin LifeSmart 2050 Retirement Target Fund	Shares/Units		Value
Investments in Underlying Funds and Exchange Traded Funds
Alternative Strategies 0.6%
^a,bFranklin Pelagos Commodities Strategy Fund	451	$	4,088
^a,bFranklin Pelagos Managed Futures Strategy Fund	44		351
			4,439
Domestic Equity 50.3%
^a,bFranklin Biotechnology Discovery Fund, Class R6	182		24,157
^a,bFranklin DynaTech Fund, Class R6	1,922		87,014
^a,bFranklin Flex Cap Growth Fund, Class R6	192		10,948
^bFranklin Growth Fund, Class R6	731		47,687
^a,bFranklin Growth Opportunities Fund, Class R6	359		11,108
^bFranklin MicroCap Value Fund, Class R6	204		8,256
^bFranklin Real Estate Securities Fund, Class R6	509		8,736
^bFranklin Rising Dividends Fund, Class R6	1,608		77,837
^a,bFranklin Small Cap Growth Fund, Class R6	868		16,977
^bFranklin Utilities Fund, Class R6	2,113		31,758
iShares Core S&P 500, ETF	127		23,578
			348,056
Domestic Fixed Income 5.9%
^bFranklin Low Duration Total Return Fund, Class R6	1,238		12,562
^bFranklin Strategic Income Fund, Class R6	701		7,344
^bFranklin U.S. Government Securities Fund, Class R6	2,050		13,264
iShares Intermediate Credit Bond, ETF	73		7,875
			41,045
Foreign Equity 25.6%
^bFranklin International Growth Fund, Class R6	358		4,065
^bFranklin International Small Cap Growth Fund, Class R6	2,773		62,620
^bMutual European Fund, Class R6	1,640		40,608
^bTempleton China World Fund, Class R6	337		12,080
^bTempleton Foreign Fund, Class R6	3,115		25,543
^bTempleton Frontier Markets Fund, Class R6	997		18,224
WisdomTree Japan Hedged Equity Fund, ETF (Japan)	271		13,778
			176,918
Foreign Fixed Income 3.1%
^bFranklin Templeton Emerging Market Debt Opportunities Fund	315		3,688
^bTempleton Global Total Return Fund, Class R6	1,317		17,760
			21,448
Total Investments in Underlying Funds and Exchange Traded Funds
(Cost $553,140) 85.5%			591,906
Other Assets, less Liabilities 14.5%			100,544
Net Assets 100.0%		$	692,450

See Abbreviations on page 174.

^aNon-income producing.
^bSee Note 7 regarding investments in Underlying Funds.

136 | The accompanying notes are an integral part of these financial statements. | Annual Report

Franklin Templeton Fund Allocator Series

Financial Statements

Statements of Assets and Liabilities
December 31, 2013


		Franklin LifeSmart		Franklin LifeSmart		Franklin LifeSmart		Franklin LifeSmart
		2015 Retirement		2020 Retirement		2025 Retirement		2030 Retirement
		Target Fund		Target Fund		Target Fund		Target Fund
Assets:
Cost - Underlying Funds (Note 7)	$	59,045,910	$	2,246,122	$	75,790,467	$	1,331,685
Cost - Exchange traded funds		4,835,654		169,139		5,945,184		93,321
Total cost of investments	$	63,881,564	$	2,415,261	$	81,735,651	$	1,425,006
Value - Underlying Funds (Note 7)	$	66,476,488	$	2,336,929	$	90,910,772	$	1,380,868
Value - Exchange traded funds		5,071,443		176,046		6,768,455		98,013
Total value of investments		71,547,931		2,512,975		97,679,227		1,478,881
Cash		—		—		—		14,460
Receivables:
Capital shares sold		253,301		18,320		253,734		27,114
Dividends		6,963		169		4,619		56
Affiliates		7,423		—		21,233		—
Offering costs		—		47,173		—		47,173
Total assets		71,815,618		2,578,637		97,958,813		1,567,684
Liabilities:
Payables:
Capital shares redeemed		1,431,498		462		4,100,750		—
Asset allocation fees		—		507		—		283
Distribution fees		58,009		842		74,283		459
Transfer agent fees		14,675		369		27,567		373
Reports to shareholders		6,566		5,207		9,035		5,207
Professional fees		26,328		19,228		26,426		19,228
Affiliates		—		9,152		—		9,175
Funds advanced by custodian		—		38,019		—		—
Accrued expenses and other liabilities		149		13		210		3
Total liabilities		1,537,225		73,799		4,238,271		34,728
Net assets, at value	$	70,278,393	$	2,504,838	$	93,720,542	$	1,532,956
Net assets consist of:
Paid-in capital	$	62,028,455	$	2,379,887	$	76,457,889	$	1,458,968
Undistributed net investment income		22,676		629		27,710		239
Net unrealized appreciation (depreciation)		7,666,367		97,714		15,943,576		53,875
Accumulated net realized gain (loss)		560,895		26,608		1,291,367		19,874
Net assets, at value	$	70,278,393	$	2,504,838	$	93,720,542	$	1,532,956

Annual Report | The accompanying notes are an integral part of these financial statements. | 137

Franklin Templeton Fund Allocator Series

Financial Statements (continued)


Statements of Assets and Liabilities (continued)
December 31, 2013

	Franklin LifeSmart	Franklin LifeSmart	Franklin LifeSmart	Franklin LifeSmart
	2015 Retirement	2020 Retirement	2025 Retirement	2030 Retirement
	Target Fund	Target Fund	Target Fund	Target Fund
Class A:
Net assets, at value	$ 44,346,862	$ 2,188,966	$ 58,811,426	$ 1,260,046
Shares outstanding	3,612,124	200,100	4,607,373	113,366
Net asset value per share^a	$ 12.28	$ 10.94	$ 12.76	$ 11.11
Maximum offering price per share (net asset
value per share ÷ 94.25%)	$ 13.03	$ 11.61	$ 13.54	$ 11.79
Class C:
Net assets, at value	$ 20,394,643	$ 250,333	$ 25,248,072	$ 132,135
Shares outstanding	1,676,870	22,957	2,004,597	11,920
Net asset value and maximum offering price
per share^a	$ 12.16	$ 10.90	$ 12.60	$ 11.09
Class R:
Net assets, at value	$ 2,279,362	$ 10,934	$ 4,835,454	$ 47,271
Shares outstanding	186,073	1,000	380,155	4,257
Net asset value and maximum offering price
per share	$ 12.25	$ 10.93	$ 12.72	$ 11.10
Class R6:
Net assets, at value	$ 763,427	$ 10,948	$ 2,338,977	$ 11,122
Shares outstanding	61,989	1,000	182,861	1,000
Net asset value and maximum offering price
per share	$ 12.32	$ 10.95	$ 12.79	$ 11.12
Advisor Class:
Net assets, at value	$ 2,494,099	$ 43,657	$ 2,486,613	$ 82,382
Shares outstanding	202,536	3,987	194,479	7,410
Net asset value and maximum offering price
per share	$ 12.31	$ 10.95	$ 12.79	$ 11.12


^aRedemption price is equal to net asset value less contingent deferred sales charges, if applicable.

138 | The accompanying notes are an integral part of these financial statements. | Annual Report

Franklin Templeton Fund Allocator Series

Financial Statements (continued)

Statements of Assets and Liabilities (continued)
December 31, 2013


		Franklin LifeSmart		Franklin LifeSmart		Franklin LifeSmart		Franklin LifeSmart
		2035 Retirement		2040 Retirement		2045 Retirement		2050 Retirement
		Target Fund		Target Fund		Target Fund		Target Fund
Assets:
Cost - Underlying Funds (Note 7)	$	54,406,018	$	637,863	$	35,631,225	$	511,105
Cost - Exchange traded funds		4,250,463		47,578		2,800,627		42,035
Total cost of investments	$	58,656,481	$	685,441	$	38,431,852	$	553,140
Value - Underlying Funds (Note 7)	$	65,852,047	$	671,768	$	43,575,202	$	546,675
Value - Exchange traded funds		4,886,591		50,734		3,231,917		45,231
Total value of investments		70,738,638		722,502		46,807,119		591,906
Cash		—		42,519		—		63,855
Receivables:
Capital shares sold		308,277		62		172,040		24,551
Dividends		2,367		22		1,323		17
Affiliates		9,688		—		12,014		—
Offering costs		—		47,177		—		46,836
Total assets		71,058,970		812,282		46,992,496		727,165
Liabilities:
Payables:
Capital shares redeemed		3,130,907		—		1,964,516		—
Asset allocation fees		—		146		—		133
Distribution fees		52,209		196		33,206		209
Transfer agent fees		18,464		373		16,893		369
Reports to shareholders		7,845		5,207		7,101		5,207
Professional fees		26,217		19,228		26,169		19,228
Affiliates		—		9,547		—		9,565
Accrued expenses and other liabilities		111		9		85		4
Total liabilities		3,235,753		34,706		2,047,970		34,715
Net assets, at value	$	67,823,217	$	777,576	$	44,944,526	$	692,450
Net assets consist of:
Paid-in capital	$	54,746,863	$	730,992	$	36,001,962	$	645,342
Undistributed net investment income		19,239		131		12,964		75
Net unrealized appreciation (depreciation)		12,082,157		37,061		8,375,267		38,766
Accumulated net realized gain (loss)		974,958		9,392		554,333		8,267
Net assets, at value	$	67,823,217	$	777,576	$	44,944,526	$	692,450

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Franklin Templeton Fund Allocator Series

Financial Statements (continued)

Statements of Assets and Liabilities (continued)
December 31, 2013


	Franklin LifeSmart	Franklin LifeSmart	Franklin LifeSmart	Franklin LifeSmart
	2035 Retirement	2040 Retirement	2045 Retirement	2050 Retirement
	Target Fund	Target Fund	Target Fund	Target Fund
Class A:
Net assets, at value	$ 42,510,184	$ 672,120	$ 27,990,782	$ 512,466
Shares outstanding	3,307,138	60,044	2,173,303	45,721
Net asset value per share^a	$ 12.85	$ 11.19	$ 12.88	$ 11.21
Maximum offering price per share (net asset
value per share ÷ 94.25%)	$ 13.63	$ 11.87	$ 13.67	$ 11.89
Class C:
Net assets, at value	$ 16,873,157	$ 59,984	$ 9,483,966	$ 82,074
Shares outstanding	1,335,842	5,378	751,145	7,338
Net asset value and maximum offering price
per share^a	$ 12.63	$ 11.15	$ 12.63	$ 11.18
Class R:
Net assets, at value	$ 4,092,909	$ 11,190	$ 4,563,977	$ 11,212
Shares outstanding	318,742	1,000	355,878	1,000
Net asset value and maximum offering price
per share	$ 12.84	$ 11.19	$ 12.82	$ 11.21
Class R6:
Net assets, at value	$ 2,531,928	$ 11,202	$ 1,717,676	$ 11,226
Shares outstanding	195,921	1,000	132,685	1,000
Net asset value and maximum offering price
per share	$ 12.92	$ 11.20	$ 12.95	$ 11.23
Advisor Class:
Net assets, at value	$ 1,815,039	$ 23,080	$ 1,188,125	$ 75,472
Shares outstanding	140,392	2,060	91,829	6,724
Net asset value and maximum offering price
per share	$ 12.93	$ 11.20	$ 12.94	$ 11.22


^aRedemption price is equal to net asset value less contingent deferred sales charges, if applicable.

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Franklin Templeton Fund Allocator Series

Financial Statements (continued)

Statements of Operations
for the year ended December 31, 2013


		Franklin LifeSmart			Franklin LifeSmart			Franklin LifeSmart			Franklin LifeSmart
		2015 Retirement			2020 Retirement			2025 Retirement			2030 Retirement
		Target Fund			Target Fund^a			Target Fund			Target Fund^a
Investment income:
Dividends:
Underlying Funds (Note 7)	$	1,450,275		$	23,663		$	1,236,894		$	10,813
Exchange traded funds		117,892			1,243			128,713			629
Interest		1,204			—			—			—
Total investment income		1,569,371			24,906			1,365,607			11,442
Expenses:
Asset allocation fees (Note 3a)		162,260			1,846			201,271			967
Distribution fees: (Note 3c)
Class A		123,377			1,270			159,306			553
Class C		187,264			479			210,614			288
Class R		11,174			26			20,070			67
Transfer agent fees: (Note 3e)
Class A		51,483			1,362			89,874			1,058
Class C		23,271			96			35,617			98
Class R		2,790			11			6,787			46
Class R6		66			41			64			41
Advisor Class		2,724			29			3,858			110
Custodian fees (Note 4)		86			—			50			—
Reports to shareholders		17,238			5,913			23,313			5,913
Registration and filing fees		77,193			1,847			75,772			1,708
Professional fees		26,542			19,273			27,857			19,273
Trustees’ fees and expenses		451			—			545			—
Amortization of offering costs (Note 1d)		—			50,447			—			50,447
Other		4,285			9			4,376			8
Expenses borne by Underlying Funds
(Note 8)		(19,611	)		—			(32,920	)		—
Total expenses		670,593			82,649			826,454			80,577
Expenses waived/paid by affiliates
(Note 3f)		(296,522	)		(80,496	)		(372,345	)		(79,475	)
Net expenses		374,071			2,153			454,109			1,102
Net investment income		1,195,300			22,753			911,498			10,340

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Financial Statements (continued)

Statements of Operations (continued)
for the year ended December 31, 2013


		Franklin LifeSmart		Franklin LifeSmart			Franklin LifeSmart		Franklin LifeSmart
		2015 Retirement		2020 Retirement			2025 Retirement		2030 Retirement
		Target Fund		Target Fund^a			Target Fund		Target Fund^a
Realized and unrealized gains (losses):
Net realized gain (loss) from:
Sale of investments:
Underlying Funds (Note 7)	$	1,991,844	$	(4,687	)	$	2,162,837	$	(84	)
Exchange traded funds		267,142		467			129,969		48
Realized gain distributions:
Underlying Funds (Note 7)		908,671		36,133			1,828,547		23,037
Exchange traded funds		9,759		445			20,575		319
Net realized gain (loss)		3,177,416		32,358			4,141,928		23,320
Net change in unrealized appreciation
(depreciation) on investments		3,033,258		97,714			9,871,133		53,875
Net realized and unrealized gain (loss)		6,210,674		130,072			14,013,061		77,195
Net increase (decrease) in net assets
resulting from operations	$	7,405,974	$	152,825		$	14,924,559	$	87,535



^aFor the period July 1, 2013 (commencement of operations) to December 31, 2013.

142 | The accompanying notes are an integral part of these financial statements. | Annual Report

Franklin Templeton Fund Allocator Series

Financial Statements (continued)

Statements of Operations (continued)
for the year ended December 31, 2013


		Franklin LifeSmart			Franklin LifeSmart			Franklin LifeSmart			Franklin LifeSmart
		2035 Retirement			2040 Retirement			2045 Retirement			2050 Retirement
		Target Fund			Target Fund^a			Target Fund			Target Fund^a
Investment income:
Dividends:
Underlying Funds (Note 7)	$	792,181		$	4,919		$	497,160		$	4,521
Exchange traded funds		88,384			372			58,700			363
Total investment income		880,565			5,291			555,860			4,884
Expenses:
Asset allocation fees (Note 3a)		141,833			592			94,948			580
Distribution fees: (Note 3c)
Class A		114,197			418			75,344			316
Class C		136,384			77			80,273			147
Class R		17,162			27			19,169			27
Transfer agent fees: (Note 3e)
Class A		80,125			745			83,788			768
Class C		28,600			27			26,871			63
Class R		7,229			19			12,784			24
Class R6		65			41			64			41
Advisor Class		3,207			37			3,057			137
Custodian fees (Note 4)		36			—			24			—
Reports to shareholders		20,474			5,913			18,998			5,913
Registration and filing fees		75,441			1,707			74,021			1,707
Professional fees		26,908			19,273			27,303			19,272
Trustees’ fees and expenses		277			—			—			—
Amortization of offering costs (Note 1d)		—			50,447			—			50,447
Other		4,180			8			4,026			7
Expenses borne by Underlying Funds
(Note 8)		(24,166	)		—			(19,636	)		—
Total expenses		631,952			79,331			501,034			79,449
Expenses waived/paid by affiliates
(Note 3f)		(319,359	)		(78,692	)		(296,212	)		(78,845	)
Net expenses		312,593			639			204,822			604
Net investment income		567,972			4,652			351,038			4,280

Annual Report | The accompanying notes are an integral part of these financial statements. | 143

Franklin Templeton Fund Allocator Series

Financial Statements (continued)

Statements of Operations (continued)
for the year ended December 31, 2013


		Franklin LifeSmart		Franklin LifeSmart			Franklin LifeSmart		Franklin LifeSmart
		2035 Retirement		2040 Retirement			2045 Retirement		2050 Retirement
		Target Fund		Target Fund^a			Target Fund		Target Fund^a
Realized and unrealized gains (losses):
Net realized gain (loss) from:
Sale of investments:
Underlying Funds (Note 7)	$	1,392,743	$	(174	)	$	789,716	$	(469	)
Exchange traded funds		88,463		(7	)		68,571		10
Realized gain distributions:
Underlying Funds (Note 7)		1,432,314		11,238			949,388		10,070
Exchange traded funds		16,535		182			11,375		168
Net realized gain (loss)		2,930,055		11,239			1,819,050		9,779
Net change in unrealized appreciation
(depreciation) on investments		7,908,157		37,061			5,771,935		38,766
Net realized and unrealized gain (loss)		10,838,212		48,300			7,590,985		48,545
Net increase (decrease) in net assets
resulting from operations	$	11,406,184	$	52,952		$	7,942,023	$	52,825



^aFor the period July 1, 2013 (commencement of operations) to December 31, 2013.

144 | The accompanying notes are an integral part of these financial statements. | Annual Report

Franklin Templeton Fund Allocator Series

Financial Statements (continued)


Statements of Changes in Net Assets


		Franklin LifeSmart 2015						Franklin LifeSmart 2020
		Retirement Target Fund						Retirement Target Fund
		Year Ended December 31,						Period Ended December 31,
		2013			2012			2013	^a
Increase (decrease) in net assets:
Operations:
Net investment income	$	1,195,300		$	1,056,241		$	22,753
Net realized gain (loss) from Underlying Funds and exchange
traded funds		3,177,416			1,352,802			32,358
Net change in unrealized appreciation (depreciation) on
investments		3,033,258			2,169,621			97,714
Net increase (decrease) in net assets resulting from
operations		7,405,974			4,578,664			152,825
Distributions to shareholders from:
Net investment income:
Class A		(949,775	)		(776,737	)		(24,272	)
Class C		(303,187	)		(246,119	)		(2,828	)
Class R		(42,834	)		(38,107	)		(115	)
Class R6		(9,691	)		—			(131	)
Advisor Class		(58,208	)		(43,748	)		(511	)
Net realized gains:
Class A		(1,868,226	)		—			(531	)
Class C		(839,329	)		—			(74	)
Class R		(97,222	)		—			(3	)
Class R6		(22,736	)		—			(3	)
Advisor Class		(101,550	)		—			(11	)
Total distributions to shareholders		(4,292,758	)		(1,104,711	)		(28,479	)
Capital share transactions: (Note 2)
Class A		4,812,095			4,253,720			2,075,340
Class C		2,581,227			1,644,241			243,739
Class R		319,645			(84,604	)		10,000
Class R6		782,456			—			10,000
Advisor Class		549,120			228,119			41,413
Total capital share transactions		9,044,543			6,041,476			2,380,492
Net increase (decrease) in net assets		12,157,759			9,515,429			2,504,838
Net assets:
Beginning of year		58,120,634			48,605,205			—
End of year	$	70,278,393		$	58,120,634		$	2,504,838
Undistributed net investment income included in net assets:
End of year	$	22,676		$	72,149		$	629



^aFor the period July 1, 2013 (commencement of operations) to December 31, 2013.

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Franklin Templeton Fund Allocator Series

Financial Statements (continued)


Statements of Changes in Net Assets (continued)


		Franklin LifeSmart 2025						Franklin LifeSmart 2030
		Retirement Target Fund						Retirement Target Fund
		Year Ended December 31,						Period Ended December 31,
		2013			2012			2013^a
Increase (decrease) in net assets:
Operations:
Net investment income	$	911,498		$	855,814		$	10,340
Net realized gain (loss) from Underlying Funds and exchange
traded funds		4,141,928			1,569,750			23,320
Net change in unrealized appreciation (depreciation) on
investments		9,871,133			3,355,752			53,875
Net increase (decrease) in net assets resulting from
operations		14,924,559			5,781,316			87,535
Distributions to shareholders from:
Net investment income and short term gains received from
Underlying Funds:
Class A		(871,930	)		(642,992	)		(11,335	)
Class C		(209,139	)		(149,407	)		(1,005	)
Class R		(59,888	)		(43,450	)		(381	)
Class R6		(32,182	)		—			(111	)
Advisor Class		(41,493	)		(31,514	)		(802	)
Net realized gains:
Class A		(1,782,321	)		—			(198	)
Class C		(721,153	)		—			(21	)
Class R		(136,382	)		—			(8	)
Class R6		(48,820	)		—			(2	)
Advisor Class		(71,758	)		—			(13	)
Total distributions to shareholders		(3,975,066	)		(867,363	)		(13,876	)
Capital share transactions: (Note 2)
Class A		6,266,755			5,509,087			1,201,089
Class C		4,065,933			2,710,878			127,101
Class R		854,675			1,469,187			44,214
Class R6		2,357,526			—			10,000
Advisor Class		299,945			(119,195	)		76,893
Total capital share transactions		13,844,834			9,569,957			1,459,297
Net increase (decrease) in net assets		24,794,327			14,483,910			1,532,956
Net assets:
Beginning of year		68,926,215			54,442,305			—
End of year	$	93,720,542		$	68,926,215		$	1,532,956
Undistributed net investment income included in net assets:
End of year	$	27,710		$	91,414		$	239



^aFor the period July 1, 2013 (commencement of operations) to December 31, 2013.

146 | The accompanying notes are an integral part of these financial statements. | Annual Report

Franklin Templeton Fund Allocator Series

Financial Statements (continued)


Statements of Changes in Net Assets (continued)


		Franklin LifeSmart 2035						Franklin LifeSmart 2040
		Retirement Target Fund						Retirement Target Fund
		Year Ended December 31,						Period Ended December 31,
		2013			2012			2013^a
Increase (decrease) in net assets:
Operations:
Net investment income	$	567,972		$	542,745		$	4,652
Net realized gain (loss) from Underlying Funds and exchange
traded funds		2,930,055			1,226,691			11,239
Net change in unrealized appreciation (depreciation) on
investments		7,908,157			2,178,026			37,061
Net increase (decrease) in net assets resulting from
operations		11,406,184			3,947,462			52,952
Distributions to shareholders from:
Net investment income and short term gains received from
Underlying Funds:
Class A		(527,275	)		(460,557	)		(5,500	)
Class C		(106,851	)		(95,736	)		(463	)
Class R		(40,571	)		(38,346	)		(86	)
Class R6		(36,070	)		—			(103	)
Advisor Class		(25,395	)		(18,270	)		(205	)
Net realized gains:
Class A		(1,360,230	)		(8,325	)		(220	)
Class C		(504,539	)		(2,946	)		(20	)
Class R		(121,054	)		(788	)		(4	)
Class R6		(48,953	)		—			(4	)
Advisor Class		(54,723	)		(276	)		(8	)
Total distributions to shareholders		(2,825,661	)		(625,244	)		(6,613	)
Capital share transactions: (Note 2)
Class A		4,638,237			5,467,708			631,703
Class C		3,687,561			2,051,813			58,573
Class R		534,079			1,140,735			10,000
Class R6		2,543,841			—			10,000
Advisor Class		507,603			180,901			20,961
Total capital share transactions		11,911,321			8,841,157			731,237
Net increase (decrease) in net assets		20,491,844			12,163,375			777,576
Net assets:
Beginning of year		47,331,373			35,167,998			—
End of year	$	67,823,217		$	47,331,373		$	777,576
Undistributed net investment income included in net assets:
End of year	$	19,239		$	2,589		$	131



^aFor the period July 1, 2013 (commencement of operations) to December 31, 2013.

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Franklin Templeton Fund Allocator Series

Financial Statements (continued)


Statements of Changes in Net Assets (continued)


		Franklin LifeSmart 2045						Franklin LifeSmart 2050
		Retirement Target Fund						Retirement Target Fund
		Year Ended December 31,						Period Ended December 31,
		2013			2012			2013^a
Increase (decrease) in net assets:
Operations:
Net investment income	$	351,038		$	340,670		$	4,280
Net realized gain (loss) from Underlying Funds and exchange
traded funds		1,819,050			713,283			9,779
Net change in unrealized appreciation (depreciation) on
investments		5,771,935			1,479,660			38,766
Net increase (decrease) in net assets resulting from
operations		7,942,023			2,533,613			52,825
Distributions to shareholders from:
Net investment income and short term gains received from
Underlying Funds:
Class A		(333,295	)		(278,948	)		(4,422	)
Class C		(52,405	)		(48,340	)		(633	)
Class R		(43,659	)		(41,987	)		(92	)
Class R6		(23,741	)		—			(108	)
Advisor Class		(16,140	)		(11,453	)		(705	)
Net realized gains:
Class A		(837,141	)		—			—
Class C		(273,377	)		—			—
Class R		(128,736	)		—			—
Class R6		(29,120	)		—			—
Advisor Class		(31,888	)		—			—
Total distributions to shareholders		(1,769,502	)		(380,728	)		(5,960	)
Capital share transactions: (Note 2)
Class A		3,128,951			4,535,889			476,308
Class C		1,499,244			292,321			79,396
Class R		605,398			2,373,540			10,000
Class R6		1,718,837			—			10,000
Advisor Class		329,576			1,805			69,881
Total capital share transactions		7,282,006			7,203,555			645,585
Net increase (decrease) in net assets		13,454,527			9,356,440			692,450
Net assets:
Beginning of year		31,489,999			22,133,559			—
End of year	$	44,944,526		$	31,489,999		$	692,450
Undistributed net investment income included in net assets:
End of year	$	12,964		$	1,938		$	75



^aFor the period July 1, 2013 (commencement of operations) to December 31, 2013.

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Franklin Templeton Fund Allocator Series

Notes to Financial Statements

1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES

Franklin Templeton Fund Allocator Series (Trust) is registered under the Investment Company Act of 1940, as amended, (1940 Act) as an open-end investment company, consisting of fourteen separate funds, eight of which are included in this report (Funds). The financial statements of the remaining funds in the Trust are presented separately. The Funds invest primarily in Franklin Templeton mutual funds (Underlying Funds). The Funds offer five classes of shares: Class A, Class C, Class R, Class R6, and Advisor Class. Effective May 1, 2013, the Franklin LifeSmart 2015 Retirement Target Fund, Franklin LifeSmart 2025 Retirement Target Fund, Franklin LifeSmart 2035 Retirement Target Fund, and Franklin LifeSmart 2045 Retirement Target Fund began offering a new class of shares, Class R6. Each class of shares differs by its initial sales load, contingent deferred sales charges, voting rights on matters affecting a single class, its exchange privilege and fees primarily due to differing arrangements for distribution and transfer agent fees.


Effective May 1, 2013, the following name changes occurred:

Former Name	New Name
Franklin Templeton 2015 Retirement Target Fund	Franklin LifeSmart 2015 Retirement Target Fund
Franklin Templeton 2025 Retirement Target Fund	Franklin LifeSmart 2025 Retirement Target Fund
Franklin Templeton 2035 Retirement Target Fund	Franklin LifeSmart 2035 Retirement Target Fund
Franklin Templeton 2045 Retirement Target Fund	Franklin LifeSmart 2045 Retirement Target Fund

Effective July 1, 2013, the Trust began offering shares of the following funds.

Fund Name
Franklin LifeSmart 2020 Retirement Target Fund
Franklin LifeSmart 2030 Retirement Target Fund
Franklin LifeSmart 2040 Retirement Target Fund
Franklin LifeSmart 2050 Retirement Target Fund

The accounting policies of the Underlying Funds are outlined in their respective shareholder reports. A copy of the Underlying Funds’ shareholder reports in which each fund invests is available on the U.S. Securities and Exchange Commission (SEC) website at sec.gov or at the SEC’s Public Reference Room in Washington, D.C. The Underlying Funds’ shareholder reports are not covered by this report.

The following summarizes the Funds’ significant accounting policies.

a. Financial Instrument Valuation

Annual Report | 149

Franklin Templeton Fund Allocator Series

Notes to Financial Statements (continued)

1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES (continued)

a. Financial Instrument Valuation (continued)

provides administration and oversight of the Funds’ valuation policies and procedures, which are approved annually by the Board. Investments in the Underlying Funds are valued at their closing net asset value each trading day. Exchange traded funds (ETFs) listed on an exchange or on the NASDAQ National Market System are valued at the last quoted sale price or the official closing price of the day, respectively.

b. Income Taxes

c. Security Transactions, Investment Income, Expenses and Distributions

Realized and unrealized gains and losses and net investment income, not including class specific expenses, are allocated daily to each class of shares based upon the relative proportion of net

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Notes to Financial Statements (continued)

1.	ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES (continued)
c.	Security Transactions, Investment Income, Expenses and Distributions (continued)

assets of each class. Differences in per share distributions, by class, are generally due to differences in class specific expenses.

d. Offering Costs

Offering costs are amortized on a straightline basis over twelve months.

e. Accounting Estimates

f. Guarantees and Indemnifications

Under the Trust’s organizational documents, its officers and trustees are indemnified by the Trust against certain liabilities arising out of the performance of their duties to the Trust. Additionally, in the normal course of business, the Trust, on behalf of the Funds enters into contracts with service providers that contain general indemnification clauses. The Trust’s maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Trust that have not yet occurred. Currently, the Trust expects the risk of loss to be remote.

2. SHARES OF BENEFICIAL INTEREST

At December 31, 2013, there were an unlimited number of shares authorized (without par value).

Transactions in the Fund’s shares were as follows:


	Franklin LifeSmart					Franklin LifeSmart
	2015 Retirement					2020 Retirement
	Target Fund^a					Target Fund^b
	Shares			Amount		Shares			Amount
Class A Shares:
Year ended December 31, 2013
Shares sold	1,308,882		$	15,890,281		224,502		$	2,330,311
Shares issued in reinvestment of
distributions	227,640			2,764,653		2,029			22,110
Shares redeemed	(1,138,122	)		(13,842,839	)	(26,431	)		(277,081	)
Net increase (decrease)	398,400		$	4,812,095		200,100		$	2,075,340
Year ended December 31, 2012
Shares sold	969,314		$	11,089,653
Shares issued in reinvestment of
distributions	66,616			766,694
Shares redeemed	(668,631	)		(7,602,627	)
Net increase (decrease)	367,299		$	4,253,720

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Notes to Financial Statements (continued)


2. SHARES OF BENEFICIAL INTEREST (continued)

	Franklin LifeSmart					Franklin LifeSmart
	2015 Retirement					2020 Retirement
	Target Fund^a					Target Fund^b
	Shares			Amount		Shares			Amount
Class C Shares:
Year ended December 31, 2013
Shares sold	460,937		$	5,565,468		27,481		$	292,945
Shares issued in reinvestment of
distributions	81,653			981,251		256			2,786
Shares redeemed	(327,076	)		(3,965,492	)	(4,780	)		(51,992	)
Net increase (decrease)	215,514		$	2,581,227		22,957		$	243,739
Year ended December 31, 2012
Shares sold	462,895		$	5,217,258
Shares issued in reinvestment of
distributions	18,585			212,526
Shares redeemed	(332,874	)		(3,785,543	)
Net increase (decrease)	148,606		$	1,644,241
Class R Shares:
Year ended December 31, 2013
Shares sold	126,413		$	1,528,317		1,001		$	10,011
Shares issued in reinvestment of
distributions	10,359			125,208		—			—
Shares redeemed	(110,588	)		(1,333,880	)	(1	)		(11	)
Net increase (decrease)	26,184		$	319,645		1,000		$	10,000
Year ended December 31, 2012
Shares sold	106,024		$	1,215,770
Shares issued in reinvestment of
distributions	3,045			34,911
Shares redeemed	(115,833	)		(1,335,285	)
Net increase (decrease)	(6,764	)	$	(84,604	)
Class R6 Shares:
Year ended December 31, 2013
Shares sold	59,379		$	750,348		1,001		$	10,010
Shares issued on reinvestment of
distributions	2,610			32,108		—			—
Shares redeemed	—			—		(1	)		(10	)
Net increase (decrease)	61,989		$	782,456		1,000		$	10,000

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Notes to Financial Statements (continued)


2. SHARES OF BENEFICIAL INTEREST (continued)

	Franklin LifeSmart					Franklin LifeSmart
	2015 Retirement					2020 Retirement
	Target Fund^a					Target Fund^b
	Shares			Amount		Shares			Amount
Advisor Class Shares:
Year ended December 31, 2013
Shares sold	42,196		$	511,810		3,952		$	41,034
Shares issued in reinvestment of
distributions	12,801			156,058		36			389
Shares redeemed	(9,672	)		(118,748	)	(1	)		(10	)
Net increase (decrease)	45,325		$	549,120		3,987		$	41,413
Year ended December 31, 2012
Shares sold	37,163		$	424,132
Shares issued in reinvestment of
distributions	3,739			43,102
Shares redeemed	(20,814	)		(239,115	)
Net increase (decrease)	20,088		$	228,119

^aFor the period May 1, 2013 (effective date) to December 31, 2013 for Class R6.
^bFor the period July 1, 2013 (commencement of operations) to December 31, 2013.


	Franklin LifeSmart						Franklin LifeSmart
	2025 Retirement						2030 Retirement
	Target Fund^a						Target Fund^b
	Shares				Amount		Shares				Amount
Class A Shares:
Year ended December 31, 2013
Shares sold	1,456,494		$	17,514,233			112,584		$	1,192,416
Shares issued in reinvestment of
distributions	211,824				2,630,432		835				9,253
Shares redeemed	(1,139,693	)		(13,877,910		)	(53	)			(580	)
Net increase (decrease)	528,625			$	6,266,755		113,366		$	1,201,089
Year ended December 31, 2012
Shares sold	1,271,041		$	13,714,708
Shares issued in reinvestment of
distributions	57,842				636,260
Shares redeemed	(821,845	)			(8,841,881	)
Net increase (decrease)	507,038			$	5,509,087
Class C Shares:
Year ended December 31, 2013
Shares sold	694,242			$	8,279,189		12,087			$	128,932
Shares issued in reinvestment of
distributions	67,197				823,491		85				934
Shares redeemed	(425,455	)			(5,036,747	)	(252	)			(2,765	)
Net increase (decrease)	335,984			$	4,065,933		11,920			$	127,101
Year ended December 31, 2012
Shares sold	540,872			$	5,775,168
Shares issued in reinvestment of
distributions	12,080				131,301
Shares redeemed	(299,941	)			(3,195,591	)
Net increase (decrease)	253,011			$	2,710,878

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Notes to Financial Statements (continued)


2. SHARES OF BENEFICIAL INTEREST (continued)

	Franklin LifeSmart					Franklin LifeSmart
	2025 Retirement					2030 Retirement
	Target Fund^a					Target Fund^b
	Shares			Amount		Shares			Amount
Class R Shares:
Year ended December 31, 2013
Shares sold	198,623		$	2,365,500		4,233		$	43,941
Shares issued in reinvestment of
distributions	12,439			153,876		26			291
Shares redeemed	(141,744	)		(1,664,701	)	(2	)		(18	)
Net increase (decrease)	69,318		$	854,675		4,257		$	44,214
Year ended December 31, 2012
Shares sold	195,078		$	2,113,064
Shares issued in reinvestment of
distributions	3,250			35,619
Shares redeemed	(62,141	)		(679,496	)
Net increase (decrease)	136,187		$	1,469,187
Class R6 Shares:
Year ended December 31, 2013
Shares sold	176,532		$	2,276,764		1,001		$	10,010
Shares issued on reinvestment of
distributions	6,329			80,762		—			—
Shares redeemed	—			—		(1	)		(10	)
Net increase (decrease)	182,861		$	2,357,526		1,000		$	10,000
Advisor Class Shares:
Year ended December 31, 2013
Shares sold	43,011		$	510,282		7,347		$	76,199
Shares issued in reinvestment of
distributions	8,650			107,432		64			704
Shares redeemed	(25,638	)		(317,769	)	(1	)		(10	)
Net increase (decrease)	26,023		$	299,945		7,410		$	76,893
Year ended December 31, 2012
Shares sold	43,287		$	467,259
Shares issued in reinvestment of
distributions	2,701			29,743
Shares redeemed	(58,092	)		(616,197	)
Net increase (decrease)	(12,104	)	$	(119,195	)

^aFor the period May 1, 2013 (effective date) to December 31, 2013 for Class R6.
^bFor the period July 1, 2013 (commencement of operations) to December 31, 2013.

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Notes to Financial Statements (continued)


2. SHARES OF BENEFICIAL INTEREST (continued)

	Franklin LifeSmart						Franklin LifeSmart
	2035 Retirement						2040 Retirement
	Target Fund^a						Target Fund^b
	Shares				Amount		Shares				Amount
Class A Shares:
Year ended December 31, 2013
Shares sold	987,304		$	11,906,664			59,764		$	628,581
Shares issued in reinvestment of distributions	150,718				1,873,931		323				3,602
Shares redeemed	(745,082	)			(9,142,358	)	(43	)			(480	)
Net increase (decrease)	392,940			$	4,638,237		60,044		$	631,703
Year ended December 31, 2012
Shares sold	915,145			$	9,802,361
Shares issued in reinvestment of distributions	42,782				466,426
Shares redeemed	(446,223	)			(4,801,079	)
Net increase (decrease)	511,704			$	5,467,708
Class C Shares:
Year ended December 31, 2013
Shares sold	474,238			$	5,598,631		5,355			$	58,311
Shares issued in reinvestment of distributions	43,059				524,390		35				388
Shares redeemed	(206,995	)			(2,435,460	)	(12	)			(126	)
Net increase (decrease)	310,302			$	3,687,561		5,378			$	58,573
Year ended December 31, 2012
Shares sold	324,592			$	3,418,634
Shares issued in reinvestment of distributions	7,821				83,955
Shares redeemed	(138,121	)			(1,450,776	)
Net increase (decrease)	194,292			$	2,051,813
Class R Shares:
Year ended December 31, 2013
Shares sold	94,627			$	1,133,064		1,001			$	10,011
Shares issued in reinvestment of distributions	8,728				108,350		—				—
Shares redeemed	(60,404	)			(707,335	)	(1	)			(11	)
Net increase (decrease)	42,951			$	534,079		1,000			$	10,000
Year ended December 31, 2012
Shares sold	189,898			$	2,044,258
Shares issued in reinvestment of distributions	2,390				26,036
Shares redeemed	(86,795	)			(929,559	)
Net increase (decrease)	105,493			$	1,140,735
Class R6 Shares:
Year ended December 31, 2013
Shares sold	189,345			$	2,459,073		1,001			$	10,010
Shares issued on reinvestment of distributions	6,576				84,768		—				—
Shares redeemed	—				—		(1	)			(10	)
Net increase (decrease)	195,921			$	2,543,841		1,000			$	10,000

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Notes to Financial Statements (continued)


2. SHARES OF BENEFICIAL INTEREST (continued)

	Franklin LifeSmart					Franklin LifeSmart
	2035 Retirement					2040 Retirement
	Target Fund^a					Target Fund^b
	Shares			Amount		Shares			Amount
Advisor Class Shares:
Year ended December 31, 2013
Shares sold	46,997		$	552,040		2,051		$	20,862
Shares issued in reinvestment of distributions	6,402			80,118		10			109
Shares redeemed	(10,258	)		(124,555	)	(1	)		(10	)
Net increase (decrease)	43,141		$	507,603		2,060		$	20,961
Year ended December 31, 2012
Shares sold	31,436		$	339,280
Shares issued in reinvestment of distributions	1,693			18,546
Shares redeemed	(16,215	)		(176,925	)
Net increase (decrease)	16,914		$	180,901

^aFor the period May 1, 2013 (effective date) to December 31, 2013 for Class R6.
^bFor the period July 1, 2013 (commencement of operations) to December 31, 2013.


	Franklin LifeSmart					Franklin LifeSmart
	2045 Retirement					2050 Retirement
	Target Fund^a					Target Fund^b
	Shares			Amount		Shares				Amount
Class A Shares:
Year ended December 31, 2013
Shares sold	747,089		$	8,876,144		45,783		$	476,936
Shares issued in reinvestment of distributions	92,952			1,149,783		202				2,257
Shares redeemed	(568,099	)		(6,896,976	)	(264	)			(2,885	)
Net increase (decrease)	271,942		$	3,128,951		45,721		$	476,308
Year ended December 31, 2012
Shares sold	729,972		$	7,736,453
Shares issued in reinvestment of distributions	25,592			276,441
Shares redeemed	(328,318	)		(3,477,005	)
Net increase (decrease)	427,246		$	4,535,889
Class C Shares:
Year ended December 31, 2013
Shares sold	287,349		$	3,358,448		7,339			$	79,409
Shares issued in reinvestment of distributions	22,204			267,425		49				541
Shares redeemed	(181,124	)		(2,126,629	)	(50	)			(554	)
Net increase (decrease)	128,429		$	1,499,244		7,338			$	79,396
Year ended December 31, 2012
Shares sold	248,172		$	2,572,583
Shares issued in reinvestment of distributions	3,729			39,577
Shares redeemed	(225,513	)		(2,319,839	)
Net increase (decrease)	26,388		$	292,321

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Notes to Financial Statements (continued)


2. SHARES OF BENEFICIAL INTEREST (continued)

	Franklin LifeSmart						Franklin LifeSmart
	2045 Retirement						2050 Retirement
	Target Fund^a						Target Fund^b
	Shares				Amount		Shares			Amount
Class R Shares:
Year ended December 31, 2013
Shares sold	111,053		$	1,317,814			1,001		$	10,011
Shares issued in reinvestment of distributions	12,108				149,021		—			—
Shares redeemed	(73,906	)			(861,437	)	(1	)		(11	)
Net increase (decrease)	49,255			$	605,398		1,000		$	10,000
Year ended December 31, 2012
Shares sold	256,693		$	2,753,768
Shares issued in reinvestment of distributions	3,247				34,940
Shares redeemed	(39,444	)			(415,168	)
Net increase (decrease)	220,496		$	2,373,540
Class R6 Shares:
Year ended December 31, 2013
Shares sold	128,609		$	1,666,219			1,001		$	10,010
Shares issued on reinvestment of distributions	4,076				52,618		—			—
Shares redeemed	—				—		(1	)		(10	)
Net increase (decrease)	132,685		$	1,718,837			1,000		$	10,000
Advisor Class Shares:
Year ended December 31, 2013
Shares sold	33,641			$	404,555		6,699		$	69,591
Shares issued in reinvestment of distributions	3,845				48,028		54			600
Shares redeemed	(10,292	)			(123,007	)	(29	)		(310	)
Net increase (decrease)	27,194			$	329,576		6,724		$	69,881
Year ended December 31, 2012
Shares sold	23,620			$	250,400
Shares issued in reinvestment of distributions	1,055				11,453
Shares redeemed	(23,964	)			(260,048	)
Net increase (decrease)	711			$	1,805

^aFor the period May 1, 2013 (effective date) to December 31, 2013 for Class R6.
^bFor the period July 1, 2013 (commencement of operations) to December 31, 2013.


3. TRANSACTIONS WITH AFFILIATES

Franklin Resources, Inc. is the holding company for various subsidiaries that together are referred
to as Franklin Templeton Investments. Certain officers and trustees of the Funds are also officers
and/or directors/trustees of certain of the Underlying Funds and of the following subsidiaries:

Subsidiary	Affiliation
Franklin Advisers, Inc. (Advisers)	Investment manager
Franklin Templeton Services, LLC (FT Services)	Administrative manager
Franklin Templeton Distributors, Inc. (Distributors)	Principal underwriter
Franklin Templeton Investor Services, LLC (Investor Services)	Transfer agent

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Notes to Financial Statements (continued)

3.	TRANSACTIONS WITH AFFILIATES (continued)
a.	Asset Allocation Fees

b. Administrative Fees

FT Services, under terms of an agreement, provides administrative services to the Funds and is not paid by the Funds for the services.

c. Distribution Fees

The Board has adopted distribution plans for each share class, with the exception of Class R6 and Advisor Class shares, pursuant to Rule 12b-1 under the 1940 Act. Distribution fees are not charged on shares held by affiliates. Under the Funds’ Class A reimbursement distribution plans, the Funds reimburse Distributors for costs incurred in connection with the servicing, sale and distribution of each Funds’ shares up to the maximum annual plan rate for each class. Under the Class A reimbursement distribution plans, costs exceeding the maximum for the current plan year cannot be reimbursed in subsequent periods. In addition, under the Funds’ Class C and R compensation distribution plans, the Funds pay Distributors for costs incurred in connection with the servicing, sale and distribution of each fund’s shares up to the maximum annual plan rate for each class. The plan year, for purposes of monitoring compliance with the maximum annual plan rates, is February 1 through January 31 for each fund.

The maximum annual plan rates, based on the average daily net assets, for each class, are as follows:


Class A	0.35	%
Class C	1.00	%
Class R	0.50	%

The Board has set the current rate at 0.30% per year for Class A shares until further notice and approval by the Board.

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Notes to Financial Statements (continued)

3.	TRANSACTIONS WITH AFFILIATES (continued)
d.	Sales Charges/Underwriting Agreements


		Franklin		Franklin		Franklin		Franklin
		LifeSmart		LifeSmart		LifeSmart		LifeSmart
		2015		2020		2025		2030
		Retirement		Retirement		Retirement		Retirement
		Target Fund		Target Fund		Target Fund		Target Fund
Sales charges retained net of commissions paid to
unaffiliated broker/dealers	$	36,302	$	3,013	$	60,171	$	3,950
CDSC retained	$	1,982	$	—	$	2,235	$	24

		Franklin		Franklin		Franklin		Franklin
		LifeSmart		LifeSmart		LifeSmart		LifeSmart
		2035		2040		2045		2050
		Retirement		Retirement		Retirement		Retirement
		Target Fund		Target Fund		Target Fund		Target Fund
Sales charges retained net of commissions paid to
unaffiliated broker/dealers	$	55,761	$	2,361	$	41,937	$	1,195
CDSC retained	$	1,240	$	—	$	1,653	$	3

e. Transfer Agent Fees

For the year ended December 31, 2013, the Funds paid transfer agent fees as noted in the Statements of Operations of which the following amounts were retained by Investor Services:


		Franklin		Franklin		Franklin		Franklin
		LifeSmart		LifeSmart		LifeSmart		LifeSmart
		2015		2020		2025		2030
		Retirement		Retirement		Retirement		Retirement
		Target Fund		Target Fund		Target Fund		Target Fund
Transfer agent fees	$	41,292	$	1,248	$	72,970	$	1,041

		Franklin		Franklin		Franklin		Franklin
		LifeSmart		LifeSmart		LifeSmart		LifeSmart
		2035		2040		2045		2050
		Retirement		Retirement		Retirement		Retirement
		Target Fund		Target Fund		Target Fund		Target Fund
Transfer agent fees	$	70,226	$	539	$	81,173	$	742

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Notes to Financial Statements (continued)

3.	TRANSACTIONS WITH AFFILIATES (continued)
f.	Waiver and Expense Reimbursements

Effective May 1, 2013, Advisers and Investor Services have contractually agreed in advance to waive or limit their respective fees and to assume as their own expense certain expenses otherwise payable by the funds so that the expenses (excluding distribution fees, and acquired fund fees and expenses) for Class A, Class C, Class R and Advisor Class of the funds do not exceed 0.05%, and Class R6 does not exceed 0.00% (other than certain non-routine expenses or costs, including those relating to litigation, indemnification, reorganizations, and liquidations) until April 30, 2014. Prior to May 1, 2013, the expenses for Class A, Class C, Class R and Advisor Class were limited to 0.15% for the Franklin LifeSmart 2015 Retirement Target Fund, Franklin LifeSmart 2025 Retirement Target Fund, Franklin LifeSmart 2035 Retirement Target Fund and Franklin LifeSmart 2045 Retirement Target Fund.

4. EXPENSE OFFSET ARRANGEMENT

5. INCOME TAXES

For tax purposes, the Funds may elect to defer any portion of a post-October capital loss to the first day of the following fiscal year. At December 31, 2013, the deferred post-October capital losses were as follows:


		Franklin		Franklin		Franklin		Franklin		Franklin
		LifeSmart		LifeSmart		LifeSmart		LifeSmart		LifeSmart
		2015		2025		2035		2040		2045
		Retirement		Retirement		Retirement		Retirement		Retirement
		Target Fund		Target Fund		Target Fund		Target Fund		Target Fund
Realized capital losses	$	33,402	$	28,766	$	9,495	$	15	$	5,093


The tax character of distributions paid during the years ended December 31, 2013 and 2012,
was as follows:

		Franklin LifeSmart				Franklin LifeSmart
		2015 Retirement				2020 Retirement
		Target Fund				Target Fund
		2013		2012		2013		2012
Distributions paid from:
Ordinary income	$	1,809,218	$	1,104,711	$	28,479	$	—
Long term capital gain		2,483,540		—		—		—
	$	4,292,758	$	1,104,711	$	28,479	$	—

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Notes to Financial Statements (continued)


5. INCOME TAXES (continued)

		Franklin LifeSmart				Franklin LifeSmart
		2025 Retirement				2030 Retirement
		Target Fund				Target Fund
		2013		2012		2013	2012
Distributions paid from:
Ordinary income	$	1,863,962	$	867,363	$	13,876	$	—
Long term capital gain		2,111,104		—		—		—
	$	3,975,066	$	867,363	$	13,876	$	—

		Franklin LifeSmart				Franklin LifeSmart
		2035 Retirement				2040 Retirement
		Target Fund				Target Fund
		2013		2012		2013	2012
Distributions paid from:
Ordinary income	$	1,174,006	$	612,909	$	6,613	$	—
Long term capital gain		1,651,655		12,335		—		—
	$	2,825,661	$	625,244	$	6,613	$	—

		Franklin LifeSmart				Franklin LifeSmart
		2045 Retirement				2050 Retirement
		Target Fund				Target Fund
		2013		2012		2013	2012
Distributions paid from:
Ordinary income	$	727,573	$	380,728	$	5,960	$	—
Long term capital gain		1,041,929		—		—		—
	$	1,769,502	$	380,728	$	5,960	$	—


		Franklin			Franklin			Franklin			Franklin
		LifeSmart			LifeSmart			LifeSmart			LifeSmart
		2015			2020			2025			2030
		Retirement			Retirement			Retirement			Retirement
		Target Fund			Target Fund			Target Fund			Target Fund
Cost of investments	$	64,130,619		$	2,421,245		$	82,076,476		$	1,425,414

Unrealized appreciation	$	8,061,677		$	95,579		$	16,026,224		$	56,165
Unrealized depreciation		(644,365	)		(3,849	)		(423,473	)		(2,698	)
Net unrealized appreciation
(depreciation)	$	7,417,312		$	91,730		$	15,602,751		$	53,467

Undistributed ordinary income	$	22,676		$	1,775		$	27,710		$	368
Undistributed long term capital gains		843,336			31,450			1,660,945			20,152
Distributable earnings	$	866,012		$	33,225		$	1,688,655		$	20,520

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Notes to Financial Statements (continued)


5. INCOME TAXES (continued)

			Franklin			Franklin				Franklin			Franklin
			LifeSmart			LifeSmart				LifeSmart		LifeSmart
			2035			2040				2045			2050
			Retirement		Retirement					Retirement		Retirement
		Target Fund			Target Fund				Target Fund			Target Fund
Cost of investments	$	58,927,770			$	685,860		$	38,684,029			$	553,560

Unrealized appreciation	$	12,029,250			$	37,598			$	8,241,164		$	39,014
Unrealized depreciation			(218,382	)		(956	)			(118,074	)		(668	)
Net unrealized appreciation
(depreciation)	$	11,810,868			$	36,642			$	8,123,090		$	38,346

Undistributed ordinary income		$	19,239		$	131			$	12,964		$	75
Undistributed long term capital gains			1,255,741			9,827				811,604			8,687
Distributable earnings		$	1,274,980		$	9,958			$	824,568		$	8,762

Differences between income and/or capital gains as determined on a book basis and a tax
basis are primarily due to differing treatments of short term capital gains distributions from
Underlying Funds and ETFs and wash sales.


6. INVESTMENT TRANSACTIONS

Purchases and sales of Underlying Funds and ETFs (excluding short term securities) for the year
ended December 31, 2013, were as follows:

		Franklin			Franklin		Franklin			Franklin
		LifeSmart			LifeSmart		LifeSmart			LifeSmart
		2015			2020		2025			2030
		Retirement		Retirement			Retirement		Retirement
		Target Fund		Target Fund			Target Fund		Target Fund
Purchases	$	57,556,040	$	2,930,345		$	56,697,803	$	1,521,854
Sales	$	43,828,567		$	510,863	$	36,439,687		$	96,812

		Franklin			Franklin		Franklin			Franklin
		LifeSmart			LifeSmart		LifeSmart		LifeSmart
		2035			2040		2045			2050
		Retirement		Retirement			Retirement		Retirement
		Target Fund		Target Fund			Target Fund		Target Fund
Purchases	$	41,067,615		$	759,588	$	26,371,974		$	640,858
Sales	$	27,209,207		$	73,937	$	16,315,373		$	87,258

7. INVESTMENTS IN UNDERLYING FUNDS

The Funds invest primarily in the Underlying Funds which are managed by Advisers (or an affiliate of Advisers). The Funds do not invest in the Underlying Funds for the purpose of exercising a controlling influence over the management or policies. Asset allocation fees paid by the

162 | Annual Report

Franklin Templeton Fund Allocator Series

Notes to Financial Statements (continued)

7. INVESTMENTS IN UNDERLYING FUNDS (continued)

Funds are reduced on assets invested in the Institutional Fiduciary Trust Money Market Portfolio (Sweep Money Fund) in an amount not to exceed the management and administrative fees paid by the Sweep Money Fund.

Investments in Underlying Funds for the year ended December 31, 2013, were as follows:


												% of
												Underlying
	Number of			Number of								Fund Shares
	Shares Held			Shares		Value at				Realized		Outstanding
	at Beginning	Gross	Gross	Held at End		End of		Investment		Capital		Held at End
Underlying Funds	of Year^a	Additions	Reductions	of Year		Year		Income		Gain (Loss)		of Year
Franklin LifeSmart 2015 Retirement
Target Fund
Franklin Biotechnology Discovery Fund,
Class R6	—	16,424	470	15,954	$	2,116,911	$	—	$	135,521	^b	0.17	%
Franklin DynaTech Fund, Class R6	55,475	76,296	12,931	118,840		5,379,875		—		215,499	^b	0.26	%
Franklin Flex Cap Growth Fund, Class R6	29,223	4,374	18,039	15,558		886,190		—		482,667	^b	0.03	%
Franklin Gold and Precious Metals Fund,
Advisor Class	16,743	—	16,743	—		—^c		—		9,883		—
Franklin Growth Fund, Class R6	130,472	7,288	104,643	33,117		2,159,552		18,681		764,643		0.02	%
Franklin Growth Opportunities Fund,
Class R6	35,960	7,694	6,385	37,269		1,153,833		—		59,488	^b	0.13	%
Franklin High Income Fund, Advisor Class	420,672	69,573	490,245	—		—^c		11,078		62,098		—
Franklin International Growth Fund,
Class R6	—	19,651	1,007	18,644		211,425		932		295		0.07	%
Franklin International Small Cap Growth
Fund, Class R6	89,796	132,228	40,638	181,386		4,095,700		34,632		83,355	^b	0.23	%
Franklin Limited Maturity U.S. Government
Securities Fund, Class R6	—	148,542	148,542	—		—^c		21,066		(19,179	)	—
Franklin Low Duration Total Return Fund,
Class R6	—	680,307	—	680,307		6,905,116		31,612		—		0.34	%
Franklin MicroCap Value Fund, Class R6	23,978	14,533	14,300	24,211		978,624		4,016		134,537	^b	0.17	%
Franklin Pelagos Commodities Strategy
Fund	110,951	71,465	11,356	171,060		1,551,517		—		(8,662	)	1.53	%
Franklin Pelagos Managed Futures Strategy
Fund	9,602	13,502	6,322	16,782		135,427		—		(9,225	)	1.14	%
Franklin Real Estate Securities Fund,
Class R6	46,359	5,133	8,396	43,096		739,523		14,091		3,159		0.17	%
Franklin Rising Dividends Fund, Class R6	102,988	17,065	18,281	101,772		4,926,788		57,283		35,153		0.03	%
Franklin Small Cap Growth Fund,
Class R6	—	58,625	2,860	55,765		1,090,197		—		38,783	^b	0.08	%
Franklin Strategic Income Fund, Class R6	—	369,572	—	369,572		3,869,414		75,845		35,055	^b	0.05	%
Franklin Templeton Emerging Market Debt
Opportunities Fund	134,082	82,867	43,483	173,466		2,027,815		94,729		(5,494	)^b	0.34	%
Franklin Total Return Fund, Class R6	469,595	307,691	777,286	—		—^c		163,603		(54,862	)	—
Franklin U.S. Government Securities Fund,
Class R6	913,633	667,232	345,615	1,235,250		7,992,068		296,727		(99,676	)	0.11	%
Franklin Utilities Fund, Class R6	127,058	29,150	23,127	133,081		2,000,209		64,939		7,487	^b	0.04	%

Annual Report | 163

Franklin Templeton Fund Allocator Series

Notes to Financial Statements (continued)


7. INVESTMENTS IN UNDERLYING FUNDS (continued)

												% of
												Underlying
	Number of			Number of								Fund Shares
	Shares Held			Shares		Value at				Realized		Outstanding
	at Beginning	Gross	Gross	Held at End		End of		Investment		Capital		Held at End
Underlying Funds	of Year^a	Additions	Reductions	of Year		Year		Income		Gain (Loss)		of Year
Franklin LifeSmart 2015 Retirement
Target Fund (continued)
Institutional Fiduciary Trust Money Market
Portfolio	5,697,024	10,193,849	14,887,343	1,003,530	$	1,003,530	$	—	$	—		0.01	%
Mutual European Fund, Class R6	106,105	45,856	34,041	117,920		2,919,708		53,874		186,887	^b	0.11	%
Templeton China World Fund, Class R6	20,353	3,107	3,563	19,897		713,891		13,442		43,324	^b	0.08	%
Templeton Foreign Fund, Class R6	462,042	39,744	319,241	182,545		1,496,870		25,575		369,866	^b	0.02	%
Templeton Frontier Markets Fund,
Class R6	78,745	9,544	13,743	74,546		1,362,704		27,273		21,959	^b	0.09	%
Templeton Global Bond Fund,
Advisor Class	493,636	170,900	664,536	—		—^c		47,844		426,467		—
Templeton Global Total Return Fund,
Class R6	—	819,718	22,120	797,598		10,759,601		393,033		(18,513	)	0.13	%
Total					$	66,476,488	$	1,450,275	$	2,900,515

Franklin LifeSmart 2020 Retirement
Target Fund
Franklin Biotechnology Discovery Fund,
Class R6	—	621	72	549	$	72,886	$	—	$	3,000	^b	0.01	%
Franklin DynaTech Fund, Class R6	—	6,553	723	5,830		263,911		—		7,434	^b	0.01	%
Franklin Flex Cap Growth Fund, Class R6	—	1,032	238	794		45,225		—		4,909	^b	—^d
Franklin Growth Fund, Class R6	—	2,496	311	2,185		142,507		1,063		(334	)	—^d
Franklin Growth Opportunities Fund,
Class R6	—	1,935	218	1,717		53,163		—		856	^b	0.01	%
Franklin International Growth Fund,
Class R6	—	985	113	872		9,885		39		(25	)	—^d
Franklin International Small Cap Growth
Fund, Class R6	—	10,931	1,423	9,508		214,680		1,623		1,391	^b	0.01	%
Franklin Limited Maturity U.S. Government
Securities Fund, Class R6	—	2,903	2,903	—		—^c		140		(1	)	—
Franklin Low Duration Total Return Fund,
Class R6	—	15,784	—	15,784		160,203		691		—		0.01	%
Franklin MicroCap Value Fund, Class R6	—	1,085	117	968		39,128		143		1,891	^b	0.01	%
Franklin Pelagos Commodities Strategy
Fund	—	4,131	716	3,415		30,978		—		(34	)	0.03	%
Franklin Pelagos Managed Futures Strategy
Fund	—	363	43	320		2,582		—		(7	)	0.02	%
Franklin Real Estate Securities Fund,
Class R6	—	2,297	260	2,037		34,953		325		(258	)	0.01	%
Franklin Rising Dividends Fund, Class R6	—	5,491	615	4,876		236,033		2,366		(689	)	—^d
Franklin Small Cap Growth Fund,
Class R6	—	2,642	293	2,349		45,922		—		1,159	^b	—^d
Franklin Strategic Income Fund, Class R6	—	10,115	1,094	9,021		94,455		1,346		802	^b	—^d
Franklin Templeton Emerging Market Debt
Opportunities Fund	—	4,155	453	3,702		43,271		1,794		129	^b	0.01	%

164 | Annual Report

Franklin Templeton Fund Allocator Series

Notes to Financial Statements (continued)


7. INVESTMENTS IN UNDERLYING FUNDS (continued)

												% of
												Underlying
	Number of			Number of								Fund Shares
	Shares Held			Shares		Value at				Realized		Outstanding
	at Beginning	Gross	Gross	Held at End		End of		Investment		Capital		Held at End
Underlying Funds	of Year^a	Additions	Reductions	of Year		Year		Income		Gain (Loss)		of Year
Franklin LifeSmart 2020 Retirement
Target Fund (continued)
Franklin Total Return Fund, Class R6	—	12,918	12,918	—	$	—^c	$	983	$	1,171		—
Franklin U.S. Government Securities Fund,
Class R6	—	39,089	9,017	30,072		194,567		2,410		(257	)	—^d
Franklin Utilities Fund, Class R6	—	7,531	862	6,669		100,228		1,130		(488	)^b	—^d
Mutual European Fund, Class R6	—	6,070	642	5,428		134,403		2,280		6,947	^b	—^d
Templeton China World Fund, Class R6	—	986	107	879		31,546		551		1,264	^b	—^d
Templeton Foreign Fund, Class R6	—	9,908	1,076	8,832		72,420		1,147		2,204	^b	—^d
Templeton Frontier Markets Fund,
Class R6	—	3,791	422	3,369		61,592		1,094		472	^b	—^d
Templeton Global Total Return Fund,
Class R6	—	21,065	2,356	18,709		252,391		4,538		(90	)	—^d
Total					$	2,336,929	$	23,663	$	31,446

Franklin LifeSmart 2025 Retirement
Target Fund
Franklin Biotechnology Discovery Fund,
Class R6	—	33,215	—	33,215	$	4,407,289	$	—	$	263,929	^b	0.36	%
Franklin DynaTech Fund, Class R6	102,976	176,122	—	279,098		12,634,785		—		467,908	^b	0.62	%
Franklin Flex Cap Growth Fund, Class R6	48,954	7,830	25,397	31,387		1,787,789		—		761,816	^b	0.05	%
Franklin Gold and Precious Metals Fund,
Advisor Class	34,561	1,226	35,787	—		—^c		—		(217,505	)	—
Franklin Growth Fund, Class R6	226,351	19,160	173,736	71,775		4,680,445		39,697		1,182,502		0.05	%
Franklin Growth Opportunities Fund,
Class R6	55,512	16,881	—	72,393		2,241,292		—		49,710	^b	0.25	%
Franklin High Income Fund, Advisor Class	225,968	2,640	228,608	—		—^c		5,530		34,841		—
Franklin International Growth Fund,
Class R6	—	48,404	—	48,404		548,901		2,339		—		0.19	%
Franklin International Small Cap Growth
Fund, Class R6	161,226	295,108	40,864	415,470		9,381,314		76,916		137,497	^b	0.53	%
Franklin Limited Maturity U.S. Government
Securities Fund, Class R6	—	67,607	67,607	—		—^c		9,765		(9,048	)	—
Franklin Low Duration Total Return Fund,
Class R6	—	354,640	—	354,640		3,599,595		16,088		—		0.18	%
Franklin MicroCap Value Fund, Class R6	36,120	25,060	18,103	43,077		1,741,187		6,904		189,522	^b	0.30	%
Franklin Pelagos Commodities Strategy
Fund	193,321	26,025	105,240	114,106		1,034,943		—		(150,493	)	1.02	%
Franklin Pelagos Managed Futures Strategy
Fund	15,664	1,137	5,700	11,101		89,585		—		(11,001	)	0.76	%
Franklin Real Estate Securities Fund,
Class R6	72,550	13,052	—	85,602		1,468,939		26,406		—		0.34	%
Franklin Rising Dividends Fund, Class R6	185,989	50,193	—	236,182		11,433,574		130,339		—		0.08	%
Franklin Small Cap Growth Fund,
Class R6	—	147,850	—	147,850		2,890,469		—		90,727	^b	0.22	%

Annual Report | 165

Franklin Templeton Fund Allocator Series

Notes to Financial Statements (continued)


7. INVESTMENTS IN UNDERLYING FUNDS (continued)

												% of
												Underlying
	Number of			Number of								Fund Shares
	Shares Held			Shares		Value at				Realized		Outstanding
	at Beginning	Gross	Gross	Held at End		End of		Investment		Capital		Held at End
Underlying Funds	of Year^a	Additions	Reductions	of Year		Year		Income		Gain (Loss)		of Year
Franklin LifeSmart 2025 Retirement
Target Fund (continued)
Franklin Strategic Income Fund,
Class R6	—	204,580	—	204,580	$	2,141,958	$	39,544	$	19,405	^b	0.03	%
Franklin Templeton Emerging Market Debt
Opportunities Fund	80,454	37,102	20,162	97,394		1,138,535		49,457		203	^b	0.19	%
Franklin Total Return Fund, Class R6	242,174	109,300	351,474	—		—^c		80,142		(7,418	)	—
Franklin U.S. Government Securities Fund,
Class R6	545,845	369,077	194,947	719,975		4,658,239		152,389		(44,152	)	0.06	%
Franklin Utilities Fund, Class R6	216,256	69,884	—	286,140		4,300,681		131,518		9,936	^b	0.09	%
Institutional Fiduciary Trust Money Market
Portfolio	5,126,685	22,394,933	26,053,303	1,468,315		1,468,315		—		—		0.01	%
Mutual European Fund, Class R6	191,211	85,303	32,633	243,881		6,038,499		110,661		326,483	^b	0.22	%
Templeton China World Fund, Class R6	35,729	8,424	—	44,153		1,584,224		29,541		66,988	^b	0.18	%
Templeton Foreign Fund, Class R6	768,491	77,586	504,959	341,118		2,797,164		47,329		504,470	^b	0.04	%
Templeton Frontier Markets Fund,
Class R6	124,051	23,821	—	147,872		2,703,099		52,287		20,293	^b	0.18	%
Templeton Global Bond Fund,
Advisor Class	256,730	45,239	301,969	—		—^c		23,177		304,771		—
Templeton Global Total Return Fund,
Class R6	—	455,148	—	455,148		6,139,951		206,865		—		0.07	%
Total					$	90,910,772	$	1,236,894	$	3,991,384

Franklin LifeSmart 2030 Retirement
Target Fund
Franklin Biotechnology Discovery Fund,
Class R6	—	436	7	429	$	56,857	$	—	$	2,648	^b	—^d
Franklin DynaTech Fund, Class R6	—	4,461	93	4,368		197,720		—		5,696	^b	0.01	%
Franklin Flex Cap Growth Fund, Class R6	—	644	123	521		29,693		—		2,895	^b	—^d
Franklin Growth Fund, Class R6	—	1,516	73	1,443		94,099		622		2		—^d
Franklin Growth Opportunities Fund,
Class R6	—	1,146	35	1,111		34,385		—		588	^b	—^d
Franklin International Growth Fund,
Class R6	—	772	—	772		8,755		29		—		—^d
Franklin International Small Cap Growth
Fund, Class R6	—	7,014	343	6,671		150,634		987		1,005	^b	0.01	%
Franklin Limited Maturity U.S. Government
Securities Fund, Class R6	—	604	604	—		—^c		16		(6	)	—
Franklin Low Duration Total Return Fund,
Class R6	—	5,018	—	5,018		50,937		216		—		—^d
Franklin MicroCap Value Fund, Class R6	—	735	—	735		29,689		92		1,265	^b	0.01	%
Franklin Pelagos Commodities Strategy
Fund	—	2,056	667	1,389		12,595		—		69		0.01	%
Franklin Pelagos Managed Futures Strategy
Fund	—	194	60	134		1,079		—		(5	)	0.01	%

166 | Annual Report

Franklin Templeton Fund Allocator Series

Notes to Financial Statements (continued)


7. INVESTMENTS IN UNDERLYING FUNDS (continued)

												% of
												Underlying
	Number of			Number of								Fund Shares
	Shares Held			Shares		Value at				Realized		Outstanding
	at Beginning	Gross	Gross	Held at End		End of		Investment		Capital		Held at End
Underlying Funds	of Year^a	Additions	Reductions	of Year		Year		Income		Gain (Loss)		of Year
Franklin LifeSmart 2030 Retirement
Target Fund (continued)
Franklin Real Estate Securities Fund,
Class R6	—	1,462	—	1,462	$	25,096	$	170	$	—		0.01	%
Franklin Rising Dividends Fund, Class R6	—	3,640	88	3,552		171,975		1,527		(65	)	—^d
Franklin Small Cap Growth Fund,
Class R6	—	2,356	55	2,301		44,990		—		1,097	^b	—^d
Franklin Strategic Income Fund, Class R6	—	2,848	—	2,848		29,818		375		270	^b	—^d
Franklin Templeton Emerging Market Debt
Opportunities Fund	—	1,395	—	1,395		16,309		574		41	^b	—^d
Franklin Total Return Fund, Class R6	—	3,155	3,155	—		—^c		266		143		—
Franklin U.S. Government Securities Fund,
Class R6	—	9,895	783	9,112		58,957		664		(45	)	—^d
Franklin Utilities Fund, Class R6	—	4,727	137	4,590		68,991		688		3	^b	—^d
Mutual European Fund, Class R6	—	3,887	80	3,807		94,253		1,493		4,677	^b	—^d
Templeton China World Fund, Class R6	—	737	—	737		26,446		437		990	^b	—^d
Templeton Foreign Fund, Class R6	—	5,804	122	5,682		46,597		698		1,425	^b	—^d
Templeton Frontier Markets Fund,
Class R6	—	2,555	57	2,498		45,664		688		274	^b	—^d
Templeton Global Total Return Fund,
Class R6	—	6,475	150	6,325		85,329		1,271		(14	)	—^d
Total					$	1,380,868	$	10,813	$	22,953

Franklin LifeSmart 2035 Retirement
Target Fund
Franklin Biotechnology Discovery Fund,
Class R6	—	28,135	—	28,135	$	3,733,213	$	—	$	220,747	^b	0.30	%
Franklin DynaTech Fund, Class R6	76,836	144,781	2,007	219,610		9,941,746		—		362,330	^b	0.49	%
Franklin Flex Cap Growth Fund, Class R6	39,715	8,738	21,379	27,074		1,542,154		—		616,548	^b	0.04	%
Franklin Gold and Precious Metals Fund,
Advisor Class	23,566	1,335	24,901	—		—^c		—		(123,493	)	—
Franklin Growth Fund, Class R6	171,818	25,631	134,697	62,752		4,092,049		34,260		835,721		0.04	%
Franklin Growth Opportunities Fund,
Class R6	36,021	14,593	852	49,762		1,540,640		—		33,389	^b	0.17	%
Franklin High Income Fund, Advisor Class	100,301	1,171	101,472	—		—^c		2,455		16,177		—
Franklin International Growth Fund,
Class R6	—	35,428	—	35,428		401,756		1,690		—		0.14	%
Franklin International Small Cap Growth
Fund, Class R6	117,835	230,303	32,766	315,372		7,121,088		57,708		102,379	^b	0.40	%
Franklin Limited Maturity U.S. Government
Securities Fund, Class R6	—	31,606	31,606	—		—^c		1,666		(3,885	)	—
Franklin Low Duration Total Return Fund,
Class R6	—	174,229	—	174,229		1,768,424		7,962		—		0.09	%
Franklin MicroCap Value Fund, Class R6	24,393	19,104	12,293	31,204		1,261,283		4,940		139,975	^b	0.22	%

Annual Report | 167

Franklin Templeton Fund Allocator Series

Notes to Financial Statements (continued)


7. INVESTMENTS IN UNDERLYING FUNDS (continued)

												% of
												Underlying
	Number of			Number of								Fund Shares
	Shares Held			Shares		Value at				Realized		Outstanding
	at Beginning	Gross	Gross	Held at End		End of		Investment		Capital		Held at End
Underlying Funds	of Year^a	Additions	Reductions	of Year		Year		Income		Gain (Loss)		of Year
Franklin LifeSmart 2035 Retirement
Target Fund (continued)
Franklin Pelagos Commodities Strategy
Fund	147,619	22,693	110,302	60,010	$	544,293	$	—	$	(155,095	)	0.54	%
Franklin Pelagos Managed Futures Strategy
Fund	10,974	2,917	8,302	5,589		45,101		—		(16,024	)	0.38	%
Franklin Real Estate Securities Fund,
Class R6	53,600	15,560	1,167	67,993		1,166,758		20,218		123		0.27	%
Franklin Rising Dividends Fund, Class R6	148,537	48,232	10,736	186,033		9,005,834		101,350		21,435		0.06	%
Franklin Small Cap Growth Fund,
Class R6	—	104,302	—	104,302		2,039,104		—		63,175	^b	0.15	%
Franklin Strategic Income Fund, Class R6	—	97,149	—	97,149		1,017,149		19,040		9,215	^b	0.01	%
Franklin Templeton Emerging Market Debt
Opportunities Fund	48,611	20,722	19,968	49,365		577,079		25,733		(3,429	)^b	0.10	%
Franklin Total Return Fund, Class R6	145,354	62,898	208,252	—		—^c		42,032		(36,749	)	—
Franklin U.S. Government Securities Fund,
Class R6	222,170	177,494	76,035	323,629		2,093,881		67,304		(20,051	)	0.03	%
Franklin Utilities Fund, Class R6	168,241	74,767	3,631	239,377		3,597,836		106,057		9,292	^b	0.07	%
Institutional Fiduciary Trust Money Market
Portfolio	2,234,051	18,485,227	19,757,003	962,275		962,275		—		—		0.01	%
Mutual European Fund, Class R6	141,275	74,702	27,422	188,555		4,668,633		85,168		272,400	^b	0.17	%
Templeton China World Fund, Class R6	26,860	9,293	575	35,578		1,276,521		23,716		52,670	^b	0.15	%
Templeton Foreign Fund, Class R6	567,456	102,537	383,598	286,395		2,348,437		39,590		355,890	^b	0.03	%
Templeton Frontier Markets Fund,
Class R6	93,041	28,149	2,006	119,184		2,178,690		41,609		16,229	^b	0.14	%
Templeton Global Bond Fund,
Advisor Class	132,342	22,895	155,237	—		—^c		11,305		56,383		—
Templeton Global Total Return Fund,
Class R6	—	219,743	2,685	217,058		2,928,103		98,378		(295	)	0.04	%
Total					$	65,852,047	$	792,181	$	2,825,057

Franklin LifeSmart 2040 Retirement
Target Fund
Franklin Biotechnology Discovery Fund,
Class R6	—	254	18	236	$	31,371	$	—	$	1,494	^b	—^d
Franklin DynaTech Fund, Class R6	—	2,403	82	2,321		105,060		—		2,705	^b	0.01	%
Franklin Flex Cap Growth Fund, Class R6	—	413	129	284		16,182		—		1,728	^b	—^d
Franklin Growth Fund, Class R6	—	898	76	822		53,593		317		(8	)	—^d
Franklin Growth Opportunities Fund,
Class R6	—	559	26	533		16,491		—		289	^b	—^d
Franklin International Growth Fund,
Class R6	—	391	—	391		4,435		15		—		—^d
Franklin International Small Cap Growth
Fund, Class R6	—	3,674	309	3,365		75,975		505		597	^b	—^d

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Notes to Financial Statements (continued)


7. INVESTMENTS IN UNDERLYING FUNDS (continued)

												% of
												Underlying
	Number of			Number of								Fund Shares
	Shares Held			Shares		Value at				Realized		Outstanding
	at Beginning	Gross	Gross	Held at End		End of		Investment		Capital		Held at End
Underlying Funds	of Year^a	Additions	Reductions	of Year		Year		Income		Gain (Loss)		of Year
Franklin LifeSmart 2040 Retirement
Target Fund (continued)
Franklin Limited Maturity U.S. Government
Securities Fund, Class R6	—	207	207	—	$	—^c	$	14	$	(6	)	—
Franklin Low Duration Total Return Fund,
Class R6	—	1,711	—	1,711		17,365		70		—		—^d
Franklin MicroCap Value Fund, Class R6	—	330	19	311		12,557		40		541	^b	—^d
Franklin Pelagos Commodities Strategy
Fund	—	1,212	662	550		4,991		—		42		—^d
Franklin Pelagos Managed Futures Strategy
Fund	—	109	58	51		414		—		(5	)	—^d
Franklin Real Estate Securities Fund,
Class R6	—	764	43	721		12,380		89		(70	)	—^d
Franklin Rising Dividends Fund, Class R6	—	1,926	77	1,849		89,526		711		(53	)	—^d
Franklin Small Cap Growth Fund,
Class R6	—	1,132	82	1,050		20,533		—		511	^b	—^d
Franklin Strategic Income Fund, Class R6	—	1,045	72	973		10,183		138		78	^b	—^d
Franklin Templeton Emerging Market Debt
Opportunities Fund	—	468	—	468		5,471		198		14	^b	—^d
Franklin Total Return Fund, Class R6	—	1,260	1,260	—		—^c		116		(8	)	—
Franklin U.S. Government Securities Fund,
Class R6	—	3,674	593	3,081		19,937		256		(27	)	—^d
Franklin Utilities Fund, Class R6	—	2,644	171	2,473		37,169		399		(94	)^b	—^d
Mutual European Fund, Class R6	—	2,023	101	1,922		47,599		674		2,082	^b	—^d
Templeton China World Fund, Class R6	—	406	20	386		13,860		202		463	^b	—^d
Templeton Foreign Fund, Class R6	—	3,128	183	2,945		24,148		320		656	^b	—^d
Templeton Frontier Markets Fund,
Class R6	—	1,366	85	1,281		23,412		363		154	^b	—^d
Templeton Global Total Return Fund,
Class R6	—	2,270	112	2,158		29,116		492		(19	)	—^d
Total					$	671,768	$	4,919	$	11,064

Franklin LifeSmart 2045 Retirement
Target Fund
Franklin Biotechnology Discovery Fund,
Class R6	—	18,169	—	18,169	$	2,410,819	$	—	$	142,379	^b	0.20	%
Franklin DynaTech Fund, Class R6	59,554	102,472	5,667	156,359		7,078,388		—		257,581	^b	0.35	%
Franklin Flex Cap Growth Fund, Class R6	22,208	5,059	11,940	15,327		873,022		—		342,176	^b	0.02	%
Franklin Gold and Precious Metals Fund,
Advisor Class	16,009	1,427	17,436	—		—^c		—		(91,355	)	—
Franklin Growth Fund, Class R6	120,100	19,043	93,625	45,518		2,968,235		24,272		553,922		0.03	%
Franklin Growth Opportunities Fund,
Class R6	19,286	8,206	—	27,492		851,159		—		18,629	^b	0.10	%
Franklin High Income Fund, Advisor Class	64,500	754	65,254	—		—^c		1,579		10,187		—

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Notes to Financial Statements (continued)


7. INVESTMENTS IN UNDERLYING FUNDS (continued)

												% of
												Underlying
	Number of			Number of								Fund Shares
	Shares Held			Shares		Value at				Realized		Outstanding
	at Beginning	Gross	Gross	Held at End		End of		Investment		Capital		Held at End
Underlying Funds	of Year^a	Additions	Reductions	of Year		Year		Income		Gain (Loss)		of Year
Franklin LifeSmart 2045 Retirement
Target Fund (continued)
Franklin International Growth Fund,
Class R6	—	24,601	—	24,601	$	278,978	$	1,171	$	—		0.10	%
Franklin International Small Cap Growth
Fund, Class R6	79,541	163,301	21,562	221,280		4,996,503		40,382		72,973	^b	0.28	%
Franklin Limited Maturity U.S. Government
Securities Fund, Class R6	—	19,891	19,891	—		—^c		2,647		(2,421	)	—
Franklin Low Duration Total Return Fund,
Class R6	—	89,366	—	89,366		907,062		4,062		—		—^d
Franklin MicroCap Value Fund, Class R6	14,172	10,783	7,184	17,771		718,299		2,810		86,585	^b	0.13	%
Franklin Pelagos Commodities Strategy
Fund	104,527	18,720	89,192	34,055		308,880		—		(127,725	)	0.30	%
Franklin Pelagos Managed Futures Strategy
Fund	7,355	3,487	7,683	3,159		25,491		—		(14,335	)	0.22	%
Franklin Real Estate Securities Fund,
Class R6	29,133	9,409	—	38,542		661,384		11,585		—		0.15	%
Franklin Rising Dividends Fund, Class R6	103,292	36,240	4,091	135,441		6,556,708		72,055		7,663		0.04	%
Franklin Small Cap Growth Fund,
Class R6	—	70,051	—	70,051		1,369,488		—		42,396	^b	0.10	%
Franklin Strategic Income Fund, Class R6	—	45,777	—	45,777		479,280		8,737		4,250	^b	0.01	%
Franklin Templeton Emerging Market Debt
Opportunities Fund	28,073	8,046	13,103	23,016		269,058		11,975		(2,289	)^b	0.05	%
Franklin Total Return Fund, Class R6	75,717	19,025	94,742	—		—^c		19,655		(28,788	)	—
Franklin U.S. Government Securities Fund,
Class R6	115,502	67,896	30,262	153,136		990,789		32,309		(8,303	)	0.01	%
Franklin Utilities Fund, Class R6	114,258	54,885	—	169,143		2,542,225		74,871		5,664	^b	0.05	%
Institutional Fiduciary Trust Money Market
Portfolio	1,599,483	12,373,729	13,643,729	329,483		329,483		—		—		—^d
Mutual European Fund, Class R6	93,112	52,115	17,110	128,117		3,172,169		57,498		187,871	^b	0.11	%
Templeton China World Fund, Class R6	19,020	7,197	—	26,217		940,658		17,337		39,315	^b	0.11	%
Templeton Foreign Fund, Class R6	410,113	91,677	262,278	239,512		1,964,002		32,851		228,591	^b	0.03	%
Templeton Frontier Markets Fund,
Class R6	60,461	19,874	—	80,335		1,468,525		28,037		10,882	^b	0.10	%
Templeton Global Bond Fund,
Advisor Class	67,366	11,990	79,356	—		—^c		5,936		3,256		—
Templeton Global Total Return Fund,
Class R6	—	104,863	—	104,863		1,414,597		47,391		—		—^d
Total					$	43,575,202	$	497,160	$	1,739,104

Franklin LifeSmart 2050 Retirement
Target Fund
Franklin Biotechnology Discovery Fund,
Class R6	—	198	16	182	$	24,157	$	—	$	1,293	^b	—^d
Franklin DynaTech Fund, Class R6	—	2109	187	1922		87,014		—		2,456	^b	—^d
Franklin Flex Cap Growth Fund, Class R6	—	313	121	192		10,948		—		1,256	^b	—^d
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Notes to Financial Statements (continued)


7. INVESTMENTS IN UNDERLYING FUNDS (continued)

												% of
												Underlying
	Number of			Number of								Fund Shares
	Shares Held			Shares		Value at				Realized		Outstanding
	at Beginning	Gross	Gross	Held at End		End of		Investment		Capital		Held at End
Underlying Funds	of Year^a	Additions	Reductions	of Year		Year		Income		Gain (Loss)		of Year
Franklin LifeSmart 2050 Retirement
Target Fund (continued)
Franklin Growth Fund, Class R6	—	826	95	731	$	47,687	$	312	$	(64	)	—^d
Franklin Growth Opportunities Fund,
Class R6	—	384	25	359		11,108		—		216	^b	—^d
Franklin International Growth Fund,
Class R6	—	358	—	358		4,065		16		—		—^d
Franklin International Small Cap Growth
Fund, Class R6	—	3248	475	2773		62,620		465		491	^b	—^d
Franklin Limited Maturity U.S. Government
Securities Fund, Class R6	—	209	209	—		—^c		—		(6	)	—
Franklin Low Duration Total Return Fund,
Class R6	—	1238	—	1238		12,562		56		—		—^d
Franklin MicroCap Value Fund, Class R6	—	223	19	204		8,256		29		402	^b	—^d
Franklin Pelagos Commodities Strategy
Fund	—	1287	836	451		4,088		—		94		—^d
Franklin Pelagos Managed Futures Strategy
Fund	—	108	64	44		351		—		(5	)	—^d
Franklin Real Estate Securities Fund,
Class R6	—	552	43	509		8,736		77		(53	)	—^d
Franklin Rising Dividends Fund, Class R6	—	1763	155	1608		77,837		684		(188	)	—^d
Franklin Small Cap Growth Fund,
Class R6	—	923	55	868		16,977		—		469	^b	—^d
Franklin Strategic Income Fund, Class R6	—	701	—	701		7,344		111		66	^b	—^d
Franklin Templeton Emerging Market Debt
Opportunities Fund	—	315	—	315		3,688		149		11	^b	—^d
Franklin Total Return Fund, Class R6	—	1008	1008	—		—^c		110		11		—
Franklin U.S. Government Securities Fund,
Class R6	—	2828	778	2050		13,264		199		(27	)	—^d
Franklin Utilities Fund, Class R6	—	2319	206	2113		31,758		409		(119	)^b	—^d
Mutual European Fund, Class R6	—	1762	122	1640		40,608		646		1,978	^b	—^d
Templeton China World Fund, Class R6	—	362	25	337		12,080		197		448	^b	—^d
Templeton Foreign Fund, Class R6	—	3359	244	3115		25,543		379		759	^b	—^d
Templeton Frontier Markets Fund,
Class R6	—	1110	113	997		18,224		315		135	^b	—^d
Templeton Global Total Return Fund,
Class R6	—	1467	150	1317		17,760		367		(22	)	—^d
Total					$	546,675	$	4,521	$	9,601

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Notes to Financial Statements (continued)

8. SPECIAL SERVICING AGREEMENT

The Franklin LifeSmart 2015 Retirement Target Fund, Franklin LifeSmart 2025 Retirement Target Fund, Franklin LifeSmart 2035 Retirement Target Fund, and Franklin LifeSmart 2045 Retirement Target Fund participated in a Special Servicing Agreement (SSA) with the Underlying Funds and certain service providers of the Funds and of the Underlying Funds. Under the SSA, each Underlying Fund may pay a portion of the Funds’ expenses (other than any asset allocation and distribution fees) to the extent such payments are less than the amount of the benefits realized or expected to be realized by the Underlying Fund (e.g., due to reduced costs associated with servicing accounts) from the investment in the Underlying Fund by the Funds. The amount of expenses borne by the Underlying Funds during the year ended December 31, 2013 is noted in the Statements of Operations. Effective May 1, 2013, the SSA was discontinued until further notice and approval by the Board.

9. CREDIT FACILITY

The Franklin LifeSmart 2015 Retirement Target Fund, Franklin LifeSmart 2025 Retirement Target Fund, Franklin LifeSmart 2035 Retirement Target Fund, and Franklin LifeSmart 2045 Retirement Target Fund, together with other U.S. registered and foreign investment funds (collectively, Borrowers), managed by Franklin Templeton Investments, are borrowers in a joint syndicated senior unsecured credit facility totaling $1.5 billion (Global Credit Facility) which, after an extension of the original terms, matured on February 14, 2014. This Global Credit Facility provides a source of funds to the Borrowers for temporary and emergency purposes, including the ability to meet future unanticipated or unusually large redemption requests. Effective February 14, 2014, the Borrowers renewed the Global Credit Facility which matures on February 13, 2015. The Franklin LifeSmart 2020 Retirement Target Fund, Franklin LifeSmart 2030 Retirement Target Fund, Franklin LifeSmart 2040 Retirement Target Fund, and Franklin LifeSmart 2050 Retirement Target Fund began participating in the Global Credit Facility on February 14, 2014.

10. FAIR VALUE MEASUREMENTS

The Funds follow a fair value hierarchy that distinguishes between market data obtained from independent sources (observable inputs) and the Funds’ own market assumptions (unobservable

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Notes to Financial Statements (continued)

10. FAIR VALUE MEASUREMENTS (continued)

inputs). These inputs are used in determining the value of the Funds’ financial instruments and are summarized in the following fair value hierarchy:

Level 1 – quoted prices in active markets for identical financial instruments
Level 2 – other significant observable inputs (including quoted prices for similar financial instruments, interest rates, prepayment speed, credit risk, etc.)
Level 3 – significant unobservable inputs (including the Funds’ own assumptions in determining the fair value of financial instruments)

The input levels are not necessarily an indication of the risk or liquidity associated with financial instruments at that level.

For movements between the levels within the fair value hierarchy, the Funds have adopted a policy of recognizing the transfers as of the date of the underlying event which caused the movement.

A summary of inputs used as of December 31, 2013, in valuing the Funds’ assets carried at fair value, is as follows:


		Level 1		Level 2		Level 3		Total
Franklin LifeSmart 2015 Retirement Target Fund
Assets:
Investments in Securities:
Investments in Underlying Funds and
Exchange Traded Funds^a	$	68,857,457	$	1,686,944	$	—	$	70,544,401
Short Term Investments		1,003,530		—		—		1,003,530
Total Investments in Securities	$	69,860,987	$	1,686,944	$	—	$	71,547,931
Franklin LifeSmart 2020 Retirement Target Fund
Assets:
Investments in Securities:
Investments in Underlying Funds and
Exchange Traded Funds^a	$	2,479,415	$	33,560	$	—	$	2,512,975
Franklin LifeSmart 2025 Retirement Target Fund
Assets:
Investments in Securities:
Investments in Underlying Funds and
Exchange Traded Funds^a	$	95,086,384	$	1,124,528	$	—	$	96,210,912
Short Term Investments		1,468,315		—		—		1,468,315
Total Investments in Securities	$	96,554,699	$	1,124,528	$	—	$	97,679,227
Franklin LifeSmart 2030 Retirement Target Fund
Assets:
Investments in Securities:
Investments in Underlying Funds and
Exchange Traded Funds^a	$	1,465,207	$	13,674	$	—	$	1,478,881
Franklin LifeSmart 2035 Retirement Target Fund
Assets:
Investments in Securities:
Investments in Underlying Funds and
Exchange Traded Funds^a	$	69,186,969	$	589,394	$	—	$	69,776,363
Short Term Investments		962,275		—		—		962,275
Total Investments in Securities	$	70,149,244	$	589,394	$	—	$	70,738,638

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Notes to Financial Statements (continued)


10. FAIR VALUE MEASUREMENTS (continued)

		Level 1		Level 2		Level 3		Total
Franklin LifeSmart 2040 Retirement Target Fund
Assets:
Investments in Securities
Investments in Underlying Funds and
Exchange Traded Funds^a	$	717,097	$	5,405	$	—	$	722,502
Franklin LifeSmart 2045 Retirement Target Fund
Assets:
Investments in Securities:
Investments in Underlying Funds and
Exchange Traded Funds^a	$	46,143,265	$	334,371	$	—	$	46,477,636
Short Term Investments		329,483		—		—		329,483
Total Investments in Securities	$	46,472,748	$	334,371	$	—	$	46,807,119
Franklin LifeSmart 2050 Retirement Target Fund
Assets:
Investments in Securities:
Investments in Underlying Funds and
Exchange Traded Funds^a	$	587,467	$	4,439	$	—	$	591,906

^aFor detailed Underlying Fund and ETF categories, see the accompanying Statements of Investments.

11. NEW ACCOUNTING PRONOUNCEMENTS

12. SUBSEQUENT EVENTS

ABBREVIATIONS

Selected Portfolio

ETF - Exchange Traded Fund

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Report of Independent Registered Public Accounting Firm

To the Board of Trustees and Shareholders of Franklin Templeton Fund Allocator Series

In our opinion, the accompanying statements of assets and liabilities, including the statements of investments, and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of Franklin LifeSmart 2015 Retirement Target Fund, Franklin LifeSmart 2020 Retirement Target Fund, Franklin LifeSmart 2025 Retirement Target Fund, Franklin LifeSmart 2030 Retirement Target Fund, Franklin LifeSmart 2035 Retirement Target Fund, Franklin LifeSmart 2040 Retirement Target Fund, Franklin LifeSmart 2045 Retirement Target Fund, and Franklin LifeSmart 2050 Retirement Target Fund (separate portfolios of Franklin Templeton Fund Allocator Series, hereafter referred to as the “Funds”) at December 31, 2013, the results of each of their operations for the year then ended, the changes in each of their net assets for each of the two years in the period then ended and the financial highlights for each of the five years in the period then ended, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as “financial statements”) are the responsibility of the Funds’ management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of securities at December 31, 2013 by correspondence with the custodian, transfer agent and brokers, provide a reasonable basis for our opinion.

PricewaterhouseCoopers LLP

San Francisco, California
February 14, 2014

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Tax Information (unaudited)

Under Section 852(b)(3)(C) of the Internal Revenue Code (Code), the Funds report the maximum amount allowable but no less than the following amounts as long term capital gain dividends for the fiscal year ended December 31, 2013:


	Franklin LifeSmart		Franklin LifeSmart		Franklin LifeSmart		Franklin LifeSmart
	2015 Retirement		2025 Retirement		2035 Retirement		2045 Retirement
	Target Fund		Target Fund		Target Fund		Target Fund
$	2,483,540	$	2,111,105	$	1,651,655	$	1,041,929

Section 871(k)(2)(C) of the Code, the Funds hereby report the maximum amount no less than the following amounts as short term capital gain dividends for purposes imposed under Section 871(a)(1)(A) of the Code for the fiscal year ended December 31,


	Franklin LifeSmart		Franklin LifeSmart				Franklin LifeSmart				Franklin LifeSmart
	2015 Retirement		2020 Retirement				2025 Retirement				2030 Retirement
	Target Fund		Target Fund				Target Fund				Target Fund
$	434,332	$	621			$	638,285			$	242

	Franklin LifeSmart				Franklin LifeSmart				Franklin LifeSmart
	2035 Retirement				2040 Retirement				2045 Retirement
	Target Fund				Target Fund				Target Fund
$	425,675			$	253			$	250,795


Franklin LifeSmart		Franklin LifeSmart		Franklin LifeSmart		Franklin LifeSmart
2015 Retirement		2020 Retirement		2025 Retirement		2030 Retirement
Target Fund		Target Fund		Target Fund		Target Fund
8.05	%	16.63	%	16.63	%	21.23	%

Franklin LifeSmart		Franklin LifeSmart		Franklin LifeSmart		Franklin LifeSmart
2035 Retirement		2040 Retirement		2045 Retirement		2050 Retirement
Target Fund		Target Fund		Target Fund		Target Fund
20.52	%	22.33	%	24.12	%	24.32	%


Franklin LifeSmart	Franklin LifeSmart	Franklin LifeSmart	Franklin LifeSmart
2015 Retirement	2020 Retirement	2025 Retirement	2030 Retirement
Target Fund	Target Fund	Target Fund	Target Fund
342,067	12,559	717,361	7,965

Franklin LifeSmart	Franklin LifeSmart	Franklin LifeSmart	Franklin LifeSmart
2035 Retirement	2040 Retirement	2045 Retirement	2050 Retirement
Target Fund	Target Fund	Target Fund	Target Fund
559,731	3,926	400,448	3,843

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Tax Information (unaudited) (continued)

During the fiscal year ended December 31, 2013, the Funds, a qualified fund of funds under Section 852(g)(2) of Code, received an allocation of foreign taxes paid from one or more of their underlying funds. As shown in the table below, the Funds hereby report to shareholders the foreign source income and foreign taxes paid by underlying funds, pursuant to Section 853 of the Code. This written statement will allow shareholders of record on December 27, 2013, to treat their proportionate share of foreign taxes paid by the underlying funds as having been paid directly by them. The shareholder shall consider these amounts as foreign taxes paid in the tax year in which they receive the Fund distribution.

The following tables provide a detailed analysis of foreign tax paid, foreign source income, and foreign qualified dividends as reported by the Funds, to Class A, Class C, Class R, Class R6, and Advisor Class shareholders of record.


		Foreign Tax		Foreign Source		Foreign Qualified
Class		Paid Per Share		Income Per Share		Dividends Per Share

Franklin LifeSmart 2015 Retirement Target Fund
Class A	$	0.0033	$	0.1049	$	0.0191
Class C	$	0.0033	$	0.1049	$	0.0191
Class R	$	0.0033	$	0.1049	$	0.0191
Class R6	$	0.0033	$	0.1049	$	0.0191
Advisor Class	$	0.0033	$	0.1049	$	0.0191
Franklin LifeSmart 2020 Retirement Target Fund
Class A	$	0.0028	$	0.0483	$	0.0205
Class C	$	0.0028	$	0.0483	$	0.0205
Class R	$	0.0028	$	0.0483	$	0.0205
Class R6	$	0.0028	$	0.0483	$	0.0205
Advisor Class	$	0.0028	$	0.0483	$	0.0205
Franklin LifeSmart 2025 Retirement Target Fund
Class A	$	0.0043	$	0.0736	$	0.0295
Class C	$	0.0043	$	0.0736	$	0.0295
Class R	$	0.0043	$	0.0736	$	0.0295
Class R6	$	0.0043	$	0.0736	$	0.0295
Advisor Class	$	0.0043	$	0.0736	$	0.0295
Franklin LifeSmart 2030 Retirement Target Fund
Class A	$	0.0030	$	0.0438	$	0.0222
Class C	$	0.0030	$	0.0438	$	0.0222
Class R	$	0.0030	$	0.0438	$	0.0222
Class R6	$	0.0030	$	0.0438	$	0.0222
Advisor Class	$	0.0030	$	0.0438	$	0.0222
Franklin LifeSmart 2035 Retirement Target Fund
Class A	$	0.0046	$	0.0677	$	0.0319
Class C	$	0.0046	$	0.0677	$	0.0319
Class R	$	0.0046	$	0.0677	$	0.0319
Class R6	$	0.0046	$	0.0677	$	0.0319
Advisor Class	$	0.0046	$	0.0677	$	0.0319

Annual Report | 177

Franklin Templeton Fund Allocator Series

Tax Information (unaudited) (continued)


		Foreign Tax		Foreign Source		Foreign Qualified
Class		Paid Per Share		Income Per Share		Dividends Per Share

Franklin LifeSmart 2040 Retirement Target Fund
Class A	$	0.0029	$	0.0412	$	0.0210
Class C	$	0.0029	$	0.0412	$	0.0210
Class R	$	0.0029	$	0.0412	$	0.0210
Class R6	$	0.0029	$	0.0412	$	0.0210
Advisor Class	$	0.0029	$	0.0412	$	0.0210
Franklin LifeSmart 2045 Retirement Target Fund
Class A	$	0.0048	$	0.0647	$	0.0346
Class C	$	0.0048	$	0.0647	$	0.0346
Class R	$	0.0048	$	0.0647	$	0.0346
Class R6	$	0.0048	$	0.0647	$	0.0346
Advisor Class	$	0.0048	$	0.0647	$	0.0346
Franklin LifeSmart 2050 Retirement Target Fund
Class A	$	0.0033	$	0.0440	$	0.0235
Class C	$	0.0033	$	0.0440	$	0.0235
Class R	$	0.0033	$	0.0440	$	0.0235
Class R6	$	0.0033	$	0.0440	$	0.0235
Advisor Class	$	0.0033	$	0.0440	$	0.0235

¹Qualified dividends are taxed at reduced long term capital gains tax rates. In determining the amount of foreign tax credit that may be applied
against the U.S. tax liability of individuals receiving foreign source qualified dividends, adjustments may be required to the foreign tax credit limita-
tion calculation to reflect the rate differential applicable to such dividend income. The rules however permit certain individuals to elect not to apply
the rate differential adjustments for capital gains and/or dividends for any taxable year. Please consult your tax advisor and the instructions to
Form 1116 for more information.

178 | Annual Report

Franklin Templeton Fund Allocator Series

Board Members and Officers


Independent Board Members

			Number of Portfolios in
Name, Year of Birth		Length of	Fund Complex Overseen	Other Directorships Held
and Address	Position	Time Served	by Board Member*	During at Least the Past 5 Years
Harris J. Ashton (1932)	Trustee	Since 1995	141	Bar-S Foods (meat packing company)
One Franklin Parkway				(1981-2010).
San Mateo, CA 94403-1906
Principal Occupation During at Least the Past 5 Years:
Director of various companies; and formerly, Director, RBC Holdings, Inc. (bank holding company) (until 2002); and President, Chief Executive
Officer and Chairman of the Board, General Host Corporation (nursery and craft centers) (until 1998).

Sam Ginn (1937)	Trustee	Since 2007	114	ICO Global Communications
One Franklin Parkway				(Holdings) Limited (satellite company)
San Mateo, CA 94403-1906				(2006-2010), Chevron Corporation
				(global energy company) (1989-2009),
				Hewlett-Packard Company (technology
				company) (1996-2002), Safeway, Inc.
				(grocery retailer) (1991-1998) and
				TransAmerica Corporation (insurance
				company) (1989-1999).
Principal Occupation During at Least the Past 5 Years:
Private investor; Chairman, First Responder Network Authority (FirstNet) (interoperable wireless broadband network) (2012); and formerly,
Chairman of the Board, Vodafone AirTouch, PLC (wireless company) (1999-2000); Chairman of the Board and Chief Executive Officer,
AirTouch Communications (cellular communications) (1993-1998) and Pacific Telesis Group (telephone holding company) (1988-1994).

Edith E. Holiday (1952)	Trustee	Since 1998	141	Hess Corporation (exploration and
One Franklin Parkway				refining of oil and gas), H.J. Heinz
San Mateo, CA 94403-1906				Company (processed foods and
				allied products) (1994-2013), RTI
				International Metals, Inc. (manu-
				facture and distribution of titanium),
				Canadian National Railway (railroad)
				and White Mountains Insurance
				Group, Ltd. (holding company).
Principal Occupation During at Least the Past 5 Years:
Director or Trustee of various companies and trusts; and formerly, Assistant to the President of the United States and Secretary of the Cabinet
(1990-1993); General Counsel to the United States Treasury Department (1989-1990); and Counselor to the Secretary and Assistant
Secretary for Public Affairs and Public Liaison – United States Treasury Department (1988-1989).

Annual Report | 179


			Number of Portfolios in
Name, Year of Birth		Length of	Fund Complex Overseen	Other Directorships Held
and Address	Position	Time Served	by Board Member*	During at Least the Past 5 Years
J. Michael Luttig (1954)	Trustee	Since 2009	141	Boeing Capital Corporation (aircraft
One Franklin Parkway				financing) (2006-2013).
San Mateo, CA 94403-1906
Principal Occupation During at Least the Past 5 Years:
Executive Vice President, General Counsel and member of Executive Council, The Boeing Company (aerospace company); and formerly,
Federal Appeals Court Judge, U.S. Court of Appeals for the Fourth Circuit (1991-2006).

Frank A. Olson (1932)	Trustee	Since 2007	141	Hess Corporation (exploration and
One Franklin Parkway				refining of oil and gas) (1998-2013).
San Mateo, CA 94403-1906
Principal Occupation During at Least the Past 5 Years:
Chairman Emeritus, The Hertz Corporation (car rental) (since 2000) (Chairman of the Board (1980-2000) and Chief Executive Officer
(1977-1999)); and formerly, Chairman of the Board, President and Chief Executive Officer, UAL Corporation (airlines) (until 1987).

Larry D. Thompson (1945)	Trustee	Since 2007	141	Cbeyond, Inc. (business communica-
One Franklin Parkway				tions provider) (2010-2012), The
San Mateo, CA 94403-1906				Southern Company (energy company)
				(2010-2012) and The Washington
				Post Company (education and media
				organization).
Principal Occupation During at Least the Past 5 Years:
Executive Vice President – Government Affairs, General Counsel and Corporate Secretary, PepsiCo, Inc. (consumer products) (July 2012); and
formerly, John A. Sibley Professor of Corporate and Business Law, University of Georgia School of Law (2011-2012); Senior Vice President –
Government Affairs, General Counsel and Secretary, PepsiCo, Inc. (2004-2011); Senior Fellow of The Brookings Institution (2003-2004);
Visiting Professor, University of Georgia School of Law (2004); and Deputy Attorney General, U.S. Department of Justice (2001-2003).

John B. Wilson (1959)	Lead	Trustee since	114	None
One Franklin Parkway	Independent	2006 and Lead
San Mateo, CA 94403-1906	Trustee	Independent
		Trustee since
		2008
Principal Occupation During at Least the Past 5 Years:
President, Staples Europe (office supplies) (2012); President and Founder, Hyannis Port Capital, Inc. (real estate and private equity
investing); serves on private and non-profit boards; and formerly, Chief Operating Officer and Executive Vice President, Gap, Inc. (retail)
(1996-2000); Chief Financial Officer and Executive Vice President – Finance and Strategy, Staples, Inc. (1992-1996); Senior Vice President –
Corporate Planning, Northwest Airlines, Inc. (airlines) (1990-1992); and Vice President and Partner, Bain & Company (consulting firm)
(1986-1990).

180 | Annual Report


Interested Board Members and Officers


			Number of Portfolios in
Name, Year of Birth		Length of	Fund Complex Overseen	Other Directorships Held
and Address	Position	Time Served	by Board Member*	During at Least the Past 5 Years

**Gregory E. Johnson (1961)	Trustee	Since 2007	152	None
One Franklin Parkway
San Mateo, CA 94403-1906
Principal Occupation During at Least the Past 5 Years:
Chairman of the Board, Member – Office of the Chairman, Director, President and Chief Executive Officer, Franklin Resources, Inc.; officer
and/or director or trustee, as the case may be, of some of the other subsidiaries of Franklin Resources, Inc. and of 44 of the investment
companies in Franklin Templeton Investments; and Chairman, Investment Company Institute.

**Rupert H. Johnson, Jr. (1940)	Chairman of	Chairman of the	141	None
One Franklin Parkway	the Board and	Board and Trustee
San Mateo, CA 94403-1906	Trustee	since June 2013
Principal Occupation During at Least the Past 5 Years:
Vice Chairman, Member – Office of the Chairman and Director, Franklin Resources, Inc.; Director, Franklin Advisers, Inc.; Senior Vice
President, Franklin Advisory Services, LLC; and officer and/or director or trustee, as the case may be, of some of the other subsidiaries of
Franklin Resources, Inc. and of 41 of the investment companies in Franklin Templeton Investments.

Alison E. Baur (1964)	Vice President	Since 2012	Not Applicable	Not Applicable
One Franklin Parkway
San Mateo, CA 94403-1906
Principal Occupation During at Least the Past 5 Years:
Deputy General Counsel, Franklin Templeton Investments; and officer of some of the other subsidiaries of Franklin Resources, Inc. and of 46
of the investment companies in Franklin Templeton Investments.

Laura F. Fergerson (1962)	Chief	Since 2009	Not Applicable	Not Applicable
One Franklin Parkway	Executive
San Mateo, CA 94403-1906	Officer –
	Finance and
	Administration
Principal Occupation During at Least the Past 5 Years:
Senior Vice President, Franklin Templeton Services, LLC; and officer of 46 of the investment companies in Franklin Templeton Investments.

Gaston Gardey (1967)	Treasurer,	Since 2009	Not Applicable	Not Applicable
One Franklin Parkway	Chief Financial
San Mateo, CA 94403-1906	Officer and
	Chief
	Accounting
	Officer
Principal Occupation During at Least the Past 5 Years:
Director, Fund Accounting, Franklin Templeton Investments; and officer of 27 of the investment companies in Franklin Templeton Investments.

Annual Report | 181


			Number of Portfolios in
Name, Year of Birth		Length of	Fund Complex Overseen	Other Directorships Held
and Address	Position	Time Served	by Board Member*	During at Least the Past 5 Years
Aliya S. Gordon (1973)	Vice President	Since 2009	Not Applicable	Not Applicable
One Franklin Parkway
San Mateo, CA 94403-1906
Principal Occupation During at Least the Past 5 Years:
Senior Associate General Counsel, Franklin Templeton Investments; officer of 46 of the investment companies in Franklin Templeton
Investments; and formerly, Litigation Associate, Steefel, Levitt & Weiss, LLP (2000-2004).

Steven J. Gray (1955)	Vice President	Since 2009	Not Applicable	Not Applicable
One Franklin Parkway
San Mateo, CA 94403-1906
Principal Occupation During at Least the Past 5 Years:
Senior Associate General Counsel, Franklin Templeton Investments; Vice President, Franklin Templeton Distributors, Inc.; and officer of 46 of
the investment companies in Franklin Templeton Investments.

Selena L. Holmes (1965)	Vice President	Since 2012	Not Applicable	Not Applicable
100 Fountain Parkway	– AML
St. Petersburg, FL 33716-1205	Compliance
Principal Occupation During at Least the Past 5 Years:
Director, Global Compliance Monitoring; and officer of 46 of the investment companies in Franklin Templeton Investments.

Edward B. Jamieson (1948)	President and	Since 2010	Not Applicable	Not Applicable
One Franklin Parkway	Chief
San Mateo, CA 94403-1906	Executive
	Officer –
	Investment
	Management
Principal Occupation During at Least the Past 5 Years:
President, Chief Investment Officer and Director, Franklin Advisers, Inc.; Executive Vice President, Franklin Templeton Institutional, LLC;
and officer and/or trustee, as the case may be, of some of the other subsidiaries of Franklin Resources, Inc. and of 10 of the investment
companies in Franklin Templeton Investments.

Kimberly H. Novotny (1972)	Vice President	Since March 2013	Not Applicable	Not Applicable
300 S.E. 2nd Street
Fort Lauderdale, FL 33301-1923
Principal Occupation During at Least the Past 5 Years:
Associate General Counsel, Franklin Templeton Investments; Vice President and Secretary, Fiduciary Trust International of the South; Vice
President, Templeton Investment Counsel, LLC; Assistant Secretary, Franklin Resources, Inc.; and officer of 46 of the investment companies
in Franklin Templeton Investments.

Robert C. Rosselot (1960)	Chief	Since March 2013	Not Applicable	Not Applicable
300 S.E. 2nd Street	Compliance
Fort Lauderdale, FL 33301-1923	Officer
Principal Occupation During at Least the Past 5 Years:
Director, Global Compliance, Franklin Templeton Investments; officer of 46 of the investment companies in Franklin Templeton Investments;
and formerly, Senior Associate General Counsel, Franklin Templeton Investments (2007-2013); and Secretary and Vice President, Templeton
Group of Funds (2004-2013).

182 | Annual Report


			Number of Portfolios in
Name, Year of Birth		Length of	Fund Complex Overseen	Other Directorships Held
and Address	Position	Time Served	by Board Member*	During at Least the Past 5 Years
Karen L. Skidmore (1952)	Vice President	Since 2006	Not Applicable	Not Applicable
One Franklin Parkway	and Secretary
San Mateo, CA 94403-1906
Principal Occupation During at Least the Past 5 Years:
Senior Associate General Counsel, Franklin Templeton Investments; and officer of 46 of the investment companies in Franklin
Templeton Investments.

Craig S. Tyle (1960)	Vice President	Since 2005	Not Applicable	Not Applicable
One Franklin Parkway
San Mateo, CA 94403-1906
Principal Occupation During at Least the Past 5 Years:
General Counsel and Executive Vice President, Franklin Resources, Inc.; and officer of some of the other subsidiaries of Franklin Resources,
Inc. and of 46 of the investment companies in Franklin Templeton Investments.

Lori A. Weber (1964)	Vice President	Since 2011	Not Applicable	Not Applicable
300 S.E. 2nd Street
Fort Lauderdale, FL 33301-1923
Principal Occupation During at Least the Past 5 Years:
Senior Associate General Counsel, Franklin Templeton Investments; Assistant Secretary, Franklin Resources, Inc.; Vice President and
Secretary, Templeton Investment Counsel, LLC; Vice President, Fiduciary Trust International of the South; and officer of 46 of the investment
companies in Franklin Templeton Investments.

Annual Report | 183

Franklin Templeton Fund Allocator Series

Shareholder Information

Proxy Voting Policies and Procedures

Quarterly Statement of Investments

Householding of Reports and Prospectuses

184 | Annual Report

Item 2. Code of Ethics.

(a) The Registrant has adopted a code of ethics that applies to its principal executive officers and principal financial and accounting officer.

(c)	N/A
(d)	N/A
(f)	Pursuant to Item 12(a)(1), the Registrant is attaching as an

exhibit a copy of its code of ethics that applies to its principal executive officers and principal financial and accounting officer.

Item 3. Audit Committee Financial Expert.

(a)(1) The Registrant has an audit committee financial expert serving on its audit committee.

(2) The audit committee financial expert is John B. Wilson and he is "independent" as defined under the relevant Securities and Exchange Commission Rules and Releases.

Item 4. Principal Accountant Fees and Services.

(a) Audit Fees

The aggregate fees paid to the principal accountant for professional services rendered by the principal accountant for the audit of the registrant’s annual financial statements or for services that are normally provided by the principal accountant in connection with statutory and regulatory filings or engagements were $335,156 for the fiscal year ended December 31, 2013 and $267,252 for the fiscal year ended December 31, 2012.

(b) Audit-Related Fees

There were no fees paid to the principal accountant for assurance and related services rendered by the principal accountant to the registrant that are reasonably related to the performance of the audit of the registrant's financial statements and are not reported under paragraph (a) of Item 4.

There were no fees paid to the principal accountant for assurance and related services rendered by the principal accountant to the registrant's investment adviser and any entity controlling, controlled by or under common control with the investment adviser that provides ongoing services to the registrant that are reasonably related to the performance of the audit of their financial statements.

There were no fees paid to the principal accountant for professional services rendered by the principal accountant to the registrant for tax compliance, tax advice and tax planning.

The aggregate fees paid to the principal accountant for professional services rendered by the principal accountant to the registrant’s investment adviser and any entity controlling, controlled by or under common control with the investment adviser that provides ongoing services to the registrant for tax compliance, tax advice and tax planning were $6,930 for the fiscal year ended December 31, 2013 and $4,600 for the fiscal year ended December 31, 2012. The services for which these fees were paid included technical tax consultation for capital gain tax reporting to foreign governments and requirements on local country’s self certification forms.

(d) All Other Fees

The aggregate fees paid to the principal accountant for products and services rendered by the principal accountant to the registrant not reported in paragraphs (a)-(c) of Item 4 were $0 for the fiscal year ended December 31, 2013 and $4,122 for the fiscal year ended December 31, 2012. The services for which these fees were paid include review of materials provided to the fund Board in connection with the investment management contract renewal process.

The aggregate fees paid to the principal accountant for products and services rendered by the principal accountant to the registrant’s investment adviser and any entity controlling, controlled by or under common control with the investment adviser that provides ongoing services to the registrant other than services reported in paragraphs (a)-(c) of Item 4 were $39,194 for the fiscal year ended December 31, 2013 and $148,328 for the fiscal year ended December 31, 2012. The services for which these fees were paid included preparation and review of materials provided to the fund Board in connection with the investment management contract renewal process.

(e) (1) The registrant’s audit committee is directly responsible for approving the services to be provided by the auditors, including:

(i)	pre-approval of all audit and audit related services;
(ii)	pre-approval of all non-audit related services to be provided to the Fund by the auditors;

(iii) pre-approval of all non-audit related services to be provided to the registrant by the auditors to the registrant’s investment adviser or to any entity that controls, is controlled by or is under common control with the registrant’s investment adviser and that provides ongoing services to the registrant where the non-audit services relate directly to the operations or financial reporting of the registrant; and

(iv) establishment by the audit committee, if deemed necessary or appropriate, as an alternative to committee pre-approval of services to be provided by the auditors, as required by paragraphs (ii) and (iii) above, of policies and procedures to permit such services to be pre-approved by other means, such as through establishment of guidelines or by action of a designated member or members of the committee; provided the policies and procedures are detailed as to the particular service and the committee is informed of each service and such policies and procedures do not include delegation of audit

committee responsibilities, as contemplated under the Securities Exchange Act of 1934, to management; subject, in the case of (ii) through (iv), to any waivers, exceptions or exemptions that may be available under applicable law or rules.

(e)(2) None of the services provided to the registrant described in paragraphs (b)-(d) of Item 4 were approved by the audit committee pursuant to paragraph (c)(7)(i)(C) of Rule 2-01 of regulation S-X.

(f)

No disclosures are required by this Item 4(f).

(g)

The aggregate non-audit fees paid to the principal accountant for services rendered by the principal accountant to the registrant and the registrant’s investment adviser and any entity controlling, controlled by or under common control with the investment adviser that provides ongoing services to the registrant were $46,124 for the fiscal year ended December 31, 2013 and $157,050 for the fiscal year ended December 31, 2012.

(h) The registrant’s audit committee of the board has considered whether the provision of non-audit services that were rendered to the registrant’s investment adviser (not including any sub-adviser whose role is primarily portfolio management and is subcontracted with or overseen by another investment adviser), and any entity controlling, controlled by, or under common control with the investment adviser that provides ongoing services to the registrant that were not pre-approved pursuant to paragraph (c)(7)(ii) of Rule 2-01 of Regulation S-X is compatible with maintaining the principal accountant’s independence.

Item 5. Audit Committee of Listed Registrants.

Item 6. Schedule of Investments.

N/A

Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies. N/A


Item 8. Portfolio Managers of Closed-End Management Investment Companies. N/A

Item 9. Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers. N/A

Item 10. Submission of Matters to a Vote of Security Holders.

There have been no changes to the procedures by which shareholders may recommend nominees to the Registrant's Board of Trustees that would require disclosure herein.

Item 11. Controls and Procedures.

(a) Evaluation of Disclosure Controls and Procedures. The Registrant maintains disclosure controls and procedures that are designed to ensure that information required to be disclosed in the Registrant’s filings under the Securities Exchange Act of 1934 and the Investment Company Act of 1940 is recorded, processed, summarized and reported within the periods specified in the rules and forms of the Securities and Exchange Commission. Such information is accumulated and communicated to the Registrant’s management, including its principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosure. The Registrant’s management, including the principal executive officer and the principal financial officer, recognizes that any set of controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives.

Within 90 days prior to the filing date of this Shareholder Report on Form N-CSR, the Registrant had carried out an evaluation, under the supervision and with the participation of the Registrant’s management, including the Registrant’s principal executive officer and the Registrant’s principal financial officer, of the effectiveness of the design and operation of the Registrant’s disclosure controls and procedures. Based on such evaluation, the Registrant’s principal executive officer and principal financial officer concluded that the Registrant’s disclosure controls and procedures are effective.

(b) Changes in Internal Controls.

There have been no changes in the

Registrant’s internal controls or in other factors that could materially affect the internal controls over financial reporting subsequent to the date of their evaluation in connection with the preparation of this Shareholder Report on Form N-CSR.

Item 12. Exhibits.

(a)(1) Code of Ethics

(a)(2) Certifications pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 of Laura F. Fergerson, Chief Executive Officer - Finance and Administration, and Gaston Gardey, Chief Financial Officer and Chief Accounting Officer

(b) Certifications pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 of Laura F. Fergerson, Chief Executive Officer - Finance and Administration, and Gaston Gardey, Chief Financial Officer and Chief Accounting Officer

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

FRANKLIN TEMPLETON FUND ALLOCATOR SERIES

By /s/ LAURA F. FERGERSON
Laura F. Fergerson
Chief Executive Officer - Finance and Administration
Date February 27, 2014

Pursuant to the requirements of the Securities Exchange Act of 1934 and
the Investment Company Act of 1940, this report has been signed below
by the following persons on behalf of the registrant and in the
capacities and on the dates indicated.

By /s/ LAURA F. FERGERSON
Laura F. Fergerson
Chief Executive Officer - Finance and Administration
Date February 27, 2014

By /s/ GASTON GARDEY
Gaston Gardey
Chief Financial Officer and Chief Accounting Officer
Date February 27, 2014

Franklin Corefolio Allocation Fund Class C (FTCLX) N-CSRCertified annual shareholder report (management investment company)