cmtapre14a.htm
SCHEDULE 14A
INFORMATION
Proxy Statement
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THE CASH MANAGEMENT
TRUST OF AMERICA
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FORM OF LETTER TO
RETIREMENT PLAN SPONSORS
[Subject]
News
that may affect your retirement plan
[body]
Dear plan
sponsor:
We’re reaching out
to provide you with updates related to our money market funds and how these
changes may affect your retirement plan.
Introduction
of American Funds Money Market FundSM
Effective May 1,
2009, American Funds will introduce American Funds Money Market Fund (MMF). The
investment objective of MMF is to provide income while preserving capital and
maintaining liquidity. It seeks to preserve the value of an investment at $1.00
per share.
Although MMF will
have a 12b-1 plan, given the current market environment, it will not initially
pay any 12b-1 service fees to advisers until interest rates rise to more
reasonable levels. Please note that further reductions in short-term yields may
require us to also suspend recordkeeping support payments made by
MMF.
Given that the new
fund combines the investment strategies of our existing taxable money market
funds — The Cash Management Trust of America® (CMTA)
and The U.S. Treasury Money Fund of AmericaSM (CTRS) —
the boards of both CMTA and CTRS have decided to seek shareholder approval to
merge those funds into MMF.
How
could this affect your plan?
Assuming approval
of the merger, plan investments in CMTA and CTRS will be automatically moved
into MMF on the date of the merger. This includes the use of
CMTA/CTRS:
|
n
|
as an
investment option available to plan
participants
|
|
n
|
as the plan’s
default investment, and/or
|
|
n
|
as the plan’s
forfeiture account investment.
|
In
addition, plans will likely see a reduction in the plan credit that offsets
gross recordkeeping fees if they offer MMF. Note that plans currently offering
CMTA or CTRS will also see a reduction in their plan credit amount after the
anticipated merger of those funds into MMF.
As
a reminder, the credit that offsets gross recordkeeping fees is derived from
recordkeeping support payments and a portion of 12b-1 fees generated by a plan’s
investment options. The initial suspension of 12b-1 fee payments in MMF will
result in a lower credit rate for plan assets invested in that fund. The
resulting impact on a plan’s net recordkeeping fees will depend on several
factors, in particular the portion of plan assets invested in MMF.
For your reference,
we’ve attached a document titled “Annual Credit and Compensation Rates,” which
reflects the updates for MMF described above. The current version of this
document is available on the Plan Service Center website (go to the Forms & Documents tab,
then, using the left-hand navigation, select Annual credit rate disclosure
under the Plan Documents
heading).
Finally, please be
aware that CMTA will no longer be used as a vehicle for automatic IRA rollovers
as of May 1, 2009. At that time, MMF will become the investment vehicle for
automatic rollovers. New Automatic Rollover IRA Employer Agreements will be
available on the plan sponsor website in early May.
Communicating
with your plan’s participants
We
encourage you to consider communicating information related to the anticipated
merger to your plan’s participants. To maintain fiduciary protection, you should
notify your plan participants at least 30 days before the merger that, absent an
affirmative election to move their CMTA or CTRS investments to another option
under the plan, their CMTA or CTRS investments will automatically be moved into
MMF on the date of the merger. A sample notice for this purpose can be found by
clicking on the link below:
[INSERT
LINK]
While it appears
that the merger may be approved sometime during the summer, we will reach out to
you as soon as we know the actual date.
Contact
us with questions
Please contact your
American Funds Retirement Plan Coordinator with questions about the changes to
our money market offering and how your plan may be affected.
Thank you for your
continued support of American Funds. We look forward to servicing your company’s
retirement plan needs for years to come.
This
document is not an offer to sell and is not soliciting an offer to buy any
securities of the funds. Shareholders of each fund are encouraged to read the
proxy statement when it becomes available as it contains important information
regarding the proposed transactions. Shareholders will be mailed a proxy
statement and proxy ballot and may obtain the proxy statement, as well as other
relevant documents, for free on the SEC’s website at sec.gov. For The Cash
Management Trust of America and The U.S. Treasury Money Fund of America, the
proxy statement and other information may be found under the filings for
American Funds Money Market Fund. You may also request a complimentary copy of
the proxy statement by calling American Funds Service Company at 800/421-0180 or
by writing to the secretary of the funds at 333 South Hope Street, Los Angeles,
California 90071.