Fidelity Promark funds

[sooner]

I have been trying to decide if I should rollover my 401k to an IRA. It is inn a Fidelity (General Motors) run 401k and would stay in a Fidelity IRA. There are alot of Fidelity funds I can't get into with the 401k. But I recently read about Promark funds, part of the 401k plan. The prblem is I can't figure out how good these funds are. Morningstar doesn't rate them. Does anyone have recamendations or otherwise on these Promark funds?

 

[ats5g]

I have been trying to decide if I should rollover my 401k to an IRA. It is inn a Fidelity (General Motors) run 401k and would stay in a Fidelity IRA. There are alot of Fidelity funds I can't get into with the 401k. But I recently read about Promark funds, part of the 401k plan. The prblem is I can't figure out how good these funds are. Morningstar doesn't rate them. Does anyone have recamendations or otherwise on these Promark funds?

Paul Merriman provided a summary of the funds available in the GM 401(k) plan here. Looks like a whole lot of Fidelity funds plus the instituational Promark Funds, run by GM Asset Management. You'll probably have to contact GMAM, or likely your HR dept for the contact number, for the prospectuses and fact sheets. My guess would be since the Promark Funds are institutional funds, their expense ratios are going to be much lower than similar Fidelity funds. Also, the prospectuses will usually compare the returns of the fund to an appropriate benchmark, and have pertinant info like turnover rates, etc.

- Alec

 

[jazz4cash]

I have been trying to decide if I should rollover my 401k to an IRA. It is inn a Fidelity (General Motors) run 401k and would stay in a Fidelity IRA. There are alot of Fidelity funds I can't get into with the 401k.

I haved done exactly what you are thinking of doing, pretty much for the same reasons, PLUS. I can withdraw IRA funds for college expenses with no penalty.  I rolled a sizable portion from the 401k to similar Fidelity Funds approx 3 yrs ago.  The Promark Income fund is an EXCELLENT fixed income product and Fidelity has nothing comparable, in my opinion.  At this point, I am pretty disappointed with returns on the Fidelity Funds in general, so I am very close to moving most of the equity mutual fund money to Promark Index funds since they have low cost.  Then the IRA will only have a few individual stocks and minimal amount in the Fidelity moneymarket.  I would keep the 401k "alive" just for potential needing to withdraw funds w/o penalty if I leave GM once I am over 55.

I use www.netbenefits.com to access performance data on the Promark funds...don't you have user account for the 401k?  Very interested in what you decide..........

 

[sooner]

I am 55 and just retired from GM Aug. 1st. Thought about rolling 401k to IRA with Vanguard and was talked into staying with the 401k of Fidelity. I know about the rule of 55, so withdrawals are not a problem. Just not sure at all which way to go 401k, IRA, Vanguard, mix of Fid. funds and Promark or what. That Promark fixed fund sounds interesting.

 

[jazz4cash]

Congratulations on the retirement!
I will do everything I can to keep your pension checks comming .
Were you hourly or salaried? I am in the salaried plan and we have access at either www.fidelity.com or www.netbenefits.com. If you log onto fidelity, there is a link to the netbenefits site. They are similar, but only netbenefits has the Morningstar style performance for the individual Promark Funds. The logon is the same for both.

Fidelity LOVES it when you roll over out of the 401K into thier funds, but they dont impress me too much. I really prefer Vanguard or Index funds. You may want to consider leaving at least your fixed income allocation and maybe some Lg Cap Index with the 401k (so you could xfer if necessary?)

Here is the performance data for Promark Income fund:
Average Annual Total Returns 1 (%)
as of 06/30/2006

1 Year 5.22
3 Year 4.96
5 Year 5.34
Life 5.59

Life is as of inception date 12/31/1998.


Here is the Fund Overview:
Goal
seeks to provide income consistent with the preservation of capital

What it invests in
This fund invests primarily in contracts issued by highly rated insurance companies or banks and in various fixed income securities to which certain of these contracts relates. This fund also invests in high quality, short-term fixed income securities to provide liquidity. (Previously known as the Income Fund) Unit price and return will vary.

 

[sooner]

I was a diemaker for GM for 38 years. Might have worked a few more but they are closing my plant and didn't see going elsewhere as an option. It's working out for the best because it helped to make the decision to go easier.
As far as investing I do use the netbenefits site to move things. Had the idea to rollover to all Vanguard IRA but didm
n't like how they said they would mail me a check in the Vanguard name and I would have to send it to Vanguard. Then I thought it would be the same just to keep it in Fidelity 401k. Started to look at more Fidelity funds and found out the ones I wanted weren't available in my 401k. I'm 70/30 and heavy in Contra fund. Seem to be making this more complicated than it should be.

 

[jazz4cash]

We went thru the same thing with my wife. It was not a big deal forwarding the check to Vanguard. If you wanna keep things simple AND you are satisfied with the Fidelity mutual funds, I guess you can just do it all over the phone. I think that's how I did it , but it was awhile ago

 

[sooner]

I still am confused by the "rule of 55". I now hear that money in an IRA doesn't apply, that you can't take it out without penalty before 59 1/2. Thinking of paying off mortgage over the next five to six years from the 401k or whatever. It is hard to figure if it's better or not. Paying it down, get rid of debt,or leaving it invested, gain interest. With mortgage at 5.625 should do better invested but no debt sounds good too.

 

[astromeria]

Money in an IRA can be taken out early (before age 59 1/2) WITHOUT PENALTY only if you set up SEPP (substantially equal periodic payments). I know several people who have implemented SEPP and found it to be no problem--I believe their brokers helped them set it up (Vanguard, Fidelity, and Merrill Lynch). There are a few rules and limitations.

Here's a good description that includes links to IRS publications:
http://www.retireearlyhomepage.com/wdraw59.html

EDIT Added "WITHOUT PENALTY"--you can always take the money out early and pay the penalty!

 

[jazz4cash]

I still am confused by the "rule of 55". I now hear that money in an IRA doesn't apply, that you can't take it out without penalty before 59 1/2. Thinking of paying off mortgage over the next five to six years from the 401k or whatever. It is hard to figure if it's better or not. Paying it down, get rid of debt,or  leaving it invested, gain interest. With mortgage at 5.625 should do better invested but no debt sounds good too.

Sooner
If you look back to my earlier post, I said " I would keep the 401k "alive" just for potential of needing to withdraw funds w/o penalty if I leave GM once I am over 55."

Once you roll it over to an IRA, the rules change. The SEPP (Seperate Equal Payment Plan) is the loophole strategy required to get funds from the IRA before 59.5, as Astro said. I also agree the SEPP is not a big deal, but it IS GOD AWFUL intimidating. I do know that Vanguard has very good info on SEPP plans and I believe they would make it easy for you. There is an excellent site that explains SEPP (which are also called 72t plans) at www.72t.net.

I think the easy thing for you to do is:
1. pick out the Fidelity (or Vanguard) fund you like that are not available within the 401k
2. Roll over whatever amount you want into those funds, leaving behind at least
enough to meet whatever "early" withdrawal needs you may have.
For example, you like Fidelity Contrafund, so there is no point in rolling funds out of the 401k Contrafund into an IRA Contrafund. The only difference is you could withdraw from the 401k at 55 without penalty, but you have to be age 59.5 or have a SEPP to withdraw from the IRA w/o penalty.

Its all part of a gov't plot to keep us confused..........

 

[jazz4cash]

One more thing..............

The way I interpret the SEPP is that it annuitizes a pot of money into a stream of annual or monthly payments, so it may not be the best way to payoff a mortgage, unless you just want to let the SEPP make the monthly payments.

 

[sooner]

Thanks, ats5g for the link to GM assett management. Didn't understand what instituational run fund meant. The Promark seem to be lower cost than comperable Fidelity funds.
Thanks too, jazz4cash for the Promark info.
Now that I am getting the reallocating finished I can start thinking if I really want to be totally retired or get a part time job.
Thanks again.