As Filed with the Securities and Exchange Commission on October 26, 2015
Securities Act File No. 333-203938
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_________________
FORM N-14
REGISTRATION
STATEMENT
UNDER
THE SECURITIES ACT OF 1933 [X]
Pre-Effective
Amendment No. ___ [_]
Post-Effective Amendment No. 1 [X]
DEUTSCHE asset allocation trust
(formerly DEUTSCHE TARGET DATE SERIES)
(Exact Name of Registrant as Specified in Charter)
345 Park Avenue
New York, NY 10154
(Address of Principal Executive Offices) (Zip Code)
617-295-1000
(Registrant’s Area Code and Telephone Number)
John Millette, Secretary
One Beacon Street
Boston, Massachusetts 02108
(Name and Address of Agent for Service)
With copies to:
|
David A. Sturms, Esq. Vedder Price P.C. 222 North LaSalle Street Chicago, IL 60601
|
No filing fee is required because an indefinite number of shares of the Registrant have previously been registered pursuant to Section 24(f) of the Investment Company Act of 1940, as amended.
This Post-Effective Amendment No. 1 will become effective immediately upon filing pursuant to Rule 462(d) under the Securities Act of 1933, as amended.
This amendment to the Registration Statement on Form N-14 filed with the Commission on June 18, 2015 (Accession No. 0000088053-15-000646, 1933 Act Registration Number 333-203938), is being filed solely in order to add, as Exhibit 12 to the Registration Statement, the Opinion of Vedder Price P.C. as to Tax Matters. The prospectus/proxy statement and statement of additional information included in the Registration Statement are incorporated herein by reference.
PART C. OTHER INFORMATION
Item 15. Indemnification
Article IV of the Registrant’s Amended and Restated Declaration of Trust (“Declaration of Trust”) (Exhibit (a)(1) hereto, which is incorporated herein by reference) provides in effect that the Registrant will indemnify its officers and trustees under certain circumstances. However, in accordance with Section 17(h) and 17(i) of the Investment Company Act of 1940 and its own terms, said Declaration of Trust does not protect any person against any liability to the Registrant or its shareholders to which such Trustee would otherwise be subject by reason of willful misfeasance, bad faith, gross negligence, or reckless disregard of the duties involved in the conduct of his or her office.
The Registrant has purchased insurance policies insuring its officers and trustees against certain liabilities which such officers and trustees may incur while acting in such capacities and providing reimbursement to the Registrant for sums which it may be permitted or required to pay to its officers and trustees by way of indemnification against such liabilities, subject to certain deductibles.
On April 5, 2002, Zurich Scudder Investments, Inc. (“Scudder”), the investment advisor, now known as Deutsche Investment Management Americas Inc. (hereafter, “DIMA”), was acquired by Deutsche Bank AG, not including certain U.K. Operations (the “Transaction”). In connection with the Trustees’ evaluation of the Transaction, Deutsche Bank agreed to indemnify, defend and hold harmless Registrant and the trustees who were not “interested persons” of Scudder, Deutsche Bank or Registrant (the “Independent Trustees”) for and against any liability and claims and expenses based upon or arising from, whether in whole or in part, or directly or indirectly, any untrue statement or alleged untrue statement of a material fact made to the Independent Trustees by Deutsche Bank in connection with the Independent Trustees’ consideration of the Transaction, or any omission or alleged omission of a material fact necessary in order to make statements made, in light of the circumstances under which they were made, not misleading.
DIMA, the investment advisor, has agreed, subject to applicable law and regulation, to indemnify and hold harmless the Registrant against any loss, damage, liability and expense, including, without limitation, the advancement and payment, as incurred, of reasonable fees and expenses of counsel (including counsel to the Registrant and counsel to the Independent Trustees) and consultants, whether retained by the Registrant or the Independent Trustees, and other customary costs and expenses incurred by the Registrant in connection with any litigation or regulatory action related to possible improper market timing or other improper trading activity or possible improper marketing and sales activity in the Registrant (“Private Litigation and Enforcement Actions”). In the event that this indemnification is unavailable to the Registrant for any reason, then DIMA has agreed to contribute to the amount paid or payable by the Registrant as a result of any loss, damage, liability or expense in such proportion as is appropriate to reflect the relative fault of DIMA and the Registrant with respect to the matters which resulted in such loss, damage, liability or expense, as well as any other relevant equitable considerations; provided, that if no final determination is made in such action or proceeding as to the relative fault of DIMA and the Registrant, then DIMA shall pay the entire amount of such loss, damage, liability or expense.
In recognition of its undertaking to indemnify the Registrant, and in light of the rebuttable presumption generally afforded to non-interested board members of an investment company that they have not engaged in disabling conduct, DIMA has also agreed, subject to applicable law and regulation, to indemnify and hold harmless each of the Independent Trustees against any and all loss, damage, liability and expense, including without limitation the advancement and payment as incurred of reasonable fees and expenses of counsel and consultants, and other customary costs and expenses incurred by the Independent Trustees, arising from the matters alleged in any Private Litigation and Enforcement Actions or matters arising from or similar in subject matter to the matters alleged in the Private Litigation and Enforcement Actions (collectively, “Covered Matters”), including without limitation:
1. all reasonable legal and other expenses incurred by the Independent Trustees in connection with the Private Litigation and Enforcement Actions, and any actions that may be threatened or commenced in the future by any person (including any governmental authority), arising from or similar to the matters alleged in the Private Litigation and Enforcement Actions, including without limitation expenses related to the defense of, service as a witness in, or monitoring of such proceedings or actions;
2. all liabilities and reasonable legal and other expenses incurred by any Independent Trustee in connection with any judgment resulting from, or settlement of, any such proceeding, action or matter;
3. any loss or reasonable legal and other expenses incurred by any Independent Trustee as a result of the denial of, or dispute about, any insurance claim under, or actual or purported rescission or termination of, any policy of insurance arranged by DIMA (or by a representative of DIMA acting as such, acting as a representative of the Registrant or of the Independent Trustees or acting otherwise) for the benefit of the Independent Trustee, to the extent that such denial, dispute or rescission is based in whole or in part upon any alleged misrepresentation made in the application for such policy or any other alleged improper conduct on the part of DIMA, any of its corporate affiliates, or any of their directors, officers or employees;
4. any loss or reasonable legal and other expenses incurred by any Independent Trustee, whether or not such loss or expense is incurred with respect to a Covered Matter, which is otherwise covered under the terms of any specified policy of insurance, but for which the Independent Trustee is unable to obtain advancement of expenses or indemnification under that policy of insurance, due to the exhaustion of policy limits which is due in whole or in part to DIMA or any affiliate thereof having received advancement of expenses or indemnification under that policy for or with respect to any Covered Matter; provided, that the total amount that DIMA will be obligated to pay under this provision for all loss or expense shall not exceed the amount that DIMA and any of its affiliates actually receive under that policy of insurance for or with respect to any and all Covered Matters; and
5. all liabilities and reasonable legal and other expenses incurred by any Independent Trustee in connection with any proceeding or action to enforce his or her rights under the agreement, unless DIMA prevails on the merits of any such dispute in a final, nonappealable court order.
DIMA is not required to pay costs or expenses or provide indemnification to or for any individual Independent Trustee (i) with respect to any particular proceeding or action as to which the Board of the Registrant has determined that such Independent Trustee ultimately would not be entitled to indemnification with respect thereto, or (ii) for any liability of the Independent Trustee to the Registrant or its shareholders to which such Independent Trustee would otherwise be subject by reason of willful misfeasance, bad faith, gross negligence, or reckless disregard of the Independent Trustee’s duties as a Trustee of the Registrant as determined in a final adjudication in such proceeding or action. In addition, to the extent that DIMA has paid costs or expenses under the agreement to any individual Independent Trustee with respect to a particular proceeding or action, and there is a final adjudication in such proceeding or action of the Independent Trustee’s liability to the Registrant or its shareholders by reason of willful misfeasance, bad faith, gross negligence, or reckless disregard of the Independent Trustee’s duties as a Trustee of the Registrant, such Independent Trustee has undertaken to repay such costs or expenses to DIMA.
| Item 16. | Exhibits | ||
| (1) | (a) | Amended and Restated Declaration of Trust dated June 2, 2008. (Incorporated by reference to Post-Effective Amendment No. 25 to the Registration Statement, as filed on November 25, 2008.) | |
| (b) | Amended and Restated Establishment and Designation of Series and Classes of Shares of Beneficial Interest, With $0.01 Par Value, dated January 22, 2009. (Incorporated by reference to Post-Effective Amendment No. 26 to the Registration Statement, as filed on October 2, 2009.) | ||
| (c) | Amendment Statement of Change of Principal Office and Resident Agent to Declaration of Trust, dated September 7, 2012. (Incorporated by reference to Post-Effective Amendment No. 32 to the Registration Statement, as filed on November 30, 2012.) | ||
| (d) | Amendment of Amended and Restated Declaration of Trust, dated July 9, 2014. (Incorporated by reference to Post-Effective Amendment No. 37 to the Registration Statement, as filed on November 26, 2014.) | ||
| (e) | Amended and Restated Establishment and Designation of Series and Classes of Shares of Beneficial Interest, With $0.01 Par Value, dated July 9, 2014. (Incorporated by reference to Post-Effective Amendment No. 37 to the Registration Statement, as filed on November 26, 2014.) | ||
| (f) | Amendment of Amended and Restated Declaration of Trust, dated September 11, 2015. (Incorporated by reference to Post-Effective Amendment No. 43 to the Registration Statement, as filed on October 16, 2015.) | ||
| (g) | Amended and Restated Establishment and Designation of Series and Classes of Shares of Beneficial Interest, With $0.01 Par Value, dated September 11, 2015. (Incorporated by reference to Post-Effective Amendment No. 43 to the Registration Statement, as filed on October 16, 2015.) | ||
| (2) | Amended and Restated Bylaws dated April 1, 2011. (Incorporated by reference to Post-Effective Amendment No. 30 to the Registration Statement, as filed on November 29, 2011.) | ||
| (3) | Not applicable. | ||
| (4) | Form of the Agreement and Plan of Reorganization. (Incorporated by reference to Appendix B to Part A of this Registration Statement on Form N-14 (File No. 333-203938) filed on May 7, 2015.) | ||
| (5) | Instruments defining the rights of shareholders, including the relevant portions of: The Amended and Restated Declaration of Trust, dated June 2, 2008, as amended through September 11, 2015 (see Section 5.2), and the Amended and Restated Bylaws, dated April 1, 2011 (see Article 9). (Incorporated by reference to exhibits (1)(a) to (1)(g) and (2) to this Registration Statement on Form N-14. | ||
| (6) | (a) | Amended and Restated Investment Management Agreement dated June 1, 2006, and amended as of November 15, 2007 and October 19, 2015 between the Registrant, on behalf of DWS LifeCompass 2015 Fund, (now known as Deutsche Multi-Asset Conservative Allocation Fund), DWS LifeCompass 2020 Fund (now known as Deutsche Multi-Asset Global Allocation Fund), and DWS LifeCompass 2030 Fund (now known as Deutsche Multi-Asset Moderate Allocation Fund). (Incorporated by reference to Post-Effective Amendment No. 43 to the Registration Statement, as filed on October 16, 2015.) | |
| (7) | (a) | Master Distribution Agreement between the Registrant and DWS Investments Distributors, Inc. (now known as DeAWM Distributors Inc.) dated January 13, 2010. (Incorporated by reference to Post-Effective Amendment No. 28 to the Registration Statement, as filed on October 1, 2010.) | |
| (b) | Appendix A, effective August 25, 2014, to Master Distribution Agreement dated January 13, 2010. (Incorporated by reference to Post-Effective Amendment No. 37 to the Registration Statement, as filed on November 26, 2014.) | ||
| (c) | Form of Selling Group Agreement. (Incorporated by reference to Post-Effective Amendment No. 37 to the Registration Statement, as filed on November 26, 2014.) | ||
| (8) | Bonus or Profit Sharing Contracts -- Not applicable. | ||
| (9) | (a) | Master Custodian Agreement between the Registrant and State Street Bank and Trust Company dated November 17, 2008. (Incorporated by reference to Post-Effective Amendment No. 26 to the Registration Statement, as filed on October 2, 2009.) | |
| (b) | Appendix A, effective August 11, 2014, to Master Custodian Agreement dated November 17, 2008. (Incorporated by reference to Post-Effective Amendment No. 37 to the Registration Statement, as filed on November 26, 2014.) | ||
| (10) | (a) | Rule 12b-1 Plans for Balanced Portfolio (now known as Deutsche Multi-Asset Conservative Allocation Fund) - Class A, B and C shares, dated December 29, 2000. (Incorporated by reference to Post-Effective Amendment No. 11 to the Registration Statement, as filed on December 29, 2000.) | |
| (b) | Rule 12b-1 Plans for Growth Portfolio (now known as Deutsche Multi-Asset Global Allocation Fund) - Class A, B and C shares, dated December 29, 2000. (Incorporated by reference to Post-Effective Amendment No. 11 to the Registration Statement, as filed on December 29, 2000.) | ||
| (c) | Rule 12b-1 Plans for Scudder Growth Plus Portfolio (now known as Deutsche Multi-Asset Moderate Allocation Fund) - Class A, B and C shares, dated November 1, 2004. (Incorporated by reference to Post-Effective Amendment No. 20 to the Registration Statement, as filed on December 12, 2005.) | ||
| (d) | Amended and Restated Multi-Distribution System Plan, pursuant to Rule 18f-3, dated March 11, 2009. (Incorporated by reference to Post-Effective Amendment No. 26 to the Registration Statement, as filed on October 2, 2009.) | ||
| (11) | Opinion of Vedder Price P.C. (Incorporated by reference to Pre-Effective Amendment No. 1 to this Registration Statement on Form N-14 (File No. 333-203938) filed on June 18, 2015.) | ||
| (12) | Opinion of Vedder Price P.C. as to Tax Matters. (Filed herein.) | ||
| (13) | (a) | Shareholder Services Agreement for Class A, Class B and Class C Shares, between the Registrant and Scudder Distributors, Inc. (now known as DeAWM Distributors, Inc.), dated April 5, 2002. (Incorporated by reference to Post-Effective Amendment No. 14 to the Registration Statement, as filed on December 31, 2002.) | |
| (b) | Letter of Indemnity to The Scudder Funds (Boston Board) dated October 13, 2004. (Incorporated by reference to Post-Effective Amendment No. 20 to the Registration Statement, as filed on December 12, 2005.) | ||
| (c) | Letter of Indemnification for Service as an Independent Trustee of a Liquidating Fund dated October 13, 2004. (Incorporated by reference to Post Effective Amendment No. 20 to the Registration Statement, as filed on December 12, 2005.) | ||
| (d) | Letters of Indemnity to The Scudder Funds (Boston Board) dated October 13, 2004. (Incorporated by reference to Post-Effective Amendment No. 20 to the Registration Statement, as filed on December 12, 2005.) | ||
| (e) | Agency Agreement between the Registrant and DWS Scudder Investments Service Company (now known as DeAWM Service Company) dated April 1, 2007. (Incorporated by reference to Post-Effective Amendment No. 23 to the Registration Statement, as filed on August 31, 2007.) | ||
| (f) | Form of Mutual Fund Rule 22c-2 Information Sharing Agreement between Registrant and DeAWM Distributors, Inc. and certain financial intermediaries. (Incorporated by reference to Post-Effective Amendment No. 43 to the Registration Statement, as filed on October 16, 2015.) | ||
| (g) | Expense Limitation Agreement, dated October 1, 2015, between the Registrant and Deutsche Investment Management Americas Inc. (Incorporated by reference to Post-Effective Amendment No. 43 to the Registration Statement, as filed on October 16, 2015.) | ||
| (h) | Amended and Restated Administrative Services Agreement, between the Registrant and Deutsche Investment Management Americas Inc. dated October 1, 2008. (Incorporated by reference to Post-Effective Amendment No. 26 to the Registration Statement, as filed on October 2, 2009.) | ||
| (14) | Consent of Independent Registered Public Accounting Firm. (Incorporated by reference to Pre-Effective Amendment No. 1 to this Registration Statement on Form N-14 (File No. 333-203938) filed on June 18, 2015.) | ||
| (15) | Not applicable. | ||
| (16) | Power of Attorney (Incorporated by reference to the Registrant’s registration statement on Form N-14 (File No. 333-203938) filed on May 7, 2015.) | ||
| (17) | Not applicable. |
Item 17. Undertakings
| (1) | The undersigned registrant agrees that prior to any public reoffering of the securities registered through the use of a prospectus which is a part of this registration statement by any person or party who is deemed to be an underwriter within the meaning of Rule 145(c) of the Securities Act [17 CFR 230.145c], the reoffering prospectus will contain the information called for by the applicable registration form for the reofferings by persons who may be deemed underwriters, in addition to the information called for by the other items of the applicable form. |
| (2) | The undersigned registrant agrees that every prospectus that is filed under paragraph (1) above will be filed as a part of an amendment to the registration statement and will not be used until the amendment |
is effective, and that, in determining any liability under the 1933 Act, each post-effective amendment shall be deemed to be a new registration statement for the securities offered therein, and the offering of the securities at that time shall be deemed to be the initial bona fide offering of them.
INDEX OF EXHIBITS
EXHIBIT
| NUMBER | EXHIBIT TITLE |
| (12) | Opinion of Vedder Price P.C. as to Tax Matters. |
SIGNATURES
As required by the Securities Act of 1933, this Registration Statement has been signed on behalf of the registrant, in the City of New York and the State of New York, on the 22nd day of October 2015.
DEUTSCHE ASSET ALLOCATION TRUST
By: /s/Brian E. Binder
Brian E. Binder
President
As required by the Securities Act of 1933, this Registration Statement has been signed below by the following persons in the capacities indicated on October 22, 2015:
| SIGNATURE | TITLE | DATE | |||
| /s/Brian E. Binder | |||||
| Brian E. Binder | President | October 22, 2015 | |||
| /s/Paul H. Schubert | |||||
| Paul H. Schubert | Chief Financial Officer and Treasurer | October 22, 2015 | |||
| /s/John W. Ballantine | |||||
| John W. Ballantine* | Trustee | October 22, 2015 | |||
| /s/Henry P. Becton, Jr. | |||||
| Henry P. Becton, Jr.* | Trustee | October 22, 2015 | |||
| /s/Dawn-Marie Driscoll | |||||
| Dawn-Marie Driscoll* | Trustee | October 22, 2015 | |||
| /s/Keith R. Fox | |||||
| Keith R. Fox* | Trustee | October 22, 2015 | |||
| /s/Kenneth C. Froewiss | |||||
| Kenneth C. Froewiss* | Chairperson and Trustee | October 22, 2015 | |||
| /s/William McClayton | |||||
| William McClayton* | Vice Chairperson and Trustee | October 22, 2015 | |||
| /s/Rebecca W. Rimel | |||||
| Rebecca W. Rimel* | Trustee | October 22, 2015 | |||
| /s/Jean Gleason Stromberg | |||||
| Jean Gleason Stromberg* | Trustee | October 22, 2015 | |||
*By:
/s/Caroline Pearson
Caroline Pearson**
Chief Legal Officer
| ** | Attorney-in-fact pursuant to the power of attorney contained in and filed as an exhibit to Registrant’s Registration Statement on Form N-14 (File No. 333-203938) on May 7, 2015, and is incorporated herein by reference. |
Exhibit (12)
October 19, 2015
|
Deutsche LifeCompass Retirement Fund 345 Park Avenue New York, New York 10154 |
Deutsche LifeCompass 2015 Fund (now known as Deutsche Multi-Asset Conservative Allocation Fund) 345 Park Avenue New York, New York 10154 |
| Re: | Reorganization of Deutsche LifeCompass Retirement Fund into Deutsche LifeCompass 2015 Fund (now known as Deutsche Multi-Asset Conservative Allocation Fund) |
Ladies and Gentlemen:
You have requested our opinion regarding certain U.S. federal income tax consequences of the reorganization (the “Reorganization”) of Deutsche LifeCompass Retirement Fund (the “Target Fund”), a series of Deutsche Target Date Series (now known as Deutsche Asset Allocation Trust), a Massachusetts business trust (the “Company”), and Deutsche LifeCompass 2015 Fund (now known as Deutsche Multi-Asset Conservative Allocation Fund) (the “Acquiring Fund”), a series of the Company. The Target Fund and the Acquiring Fund are each referred to herein as a “Fund.”
The Reorganization contemplates the transfer of all the assets of the Target Fund to the Acquiring Fund solely in exchange for voting shares of beneficial interest, $0.01 par value per share, of the Acquiring Fund (“Acquiring Fund Shares”) and the assumption by the Acquiring Fund of all the liabilities of the Target Fund. As part of the Reorganization, the Target Fund will immediately thereafter distribute pro rata, by class, to its shareholders of record all the Acquiring Fund Shares so received in complete liquidation of the Target Fund, and the Target Fund as soon as practicable thereafter will be terminated under applicable state law. The foregoing will be accomplished pursuant to an Agreement and Plan of Reorganization, dated as of April 30, 2015 and amended August 17, 2015, entered into by the Company, on behalf of the Funds, and for purposes of section 10.2 thereof only, Deutsche Investment Management Americas Inc., the investment adviser for the Funds (the “Plan”).
In rendering this opinion, we have examined the Plan and have reviewed and relied upon representations made to us by duly authorized officers of the Company, on behalf of the Funds, in letters dated October 19, 2015. We have also examined such other agreements, documents
VEDDER PRICE
Deutsche LifeCompass Retirement Fund
Deutsche LifeCompass 2015 Fund
October 19, 2015
Page 2
and corporate records that have been made available to us and such other materials as we have deemed relevant for purposes of this opinion. In such review and examination, we have assumed the genuineness of all signatures, the authenticity of all documents submitted to us as originals, the conformity to originals of all documents submitted to us as copies and the authenticity of the originals of such latter documents.
Our opinion is based, in part, on the assumption that the Reorganization described herein will occur in accordance with the terms of the Plan (without the waiver or modification of any terms or conditions thereof and without taking into account any amendment thereof that we have not approved) and the facts and representations set forth or referred to in this opinion letter, and that such facts and representations, as well as the facts and representations set forth in the Plan, are accurate as of the date hereof and will be accurate as of the date and time of the Closing (as defined in the Plan) (the “Effective Time”). You have not requested that we undertake, and we have not undertaken, any independent investigation of the accuracy of the facts, representations and assumptions set forth or referred to herein.
For the purposes indicated above, and based upon the facts, assumptions and representations set forth or referred to herein, it is our opinion that for U.S. federal income tax purposes:
1. The transfer by the Target Fund of all its assets to the Acquiring Fund solely in exchange for Acquiring Fund Shares and the assumption by the Acquiring Fund of all the liabilities of the Target Fund, immediately followed by the pro rata, by class, distribution of all the Acquiring Fund Shares so received by the Target Fund to the Target Fund’s shareholders of record in complete liquidation of the Target Fund will constitute a “reorganization” within the meaning of section 368(a)(1) of the Internal Revenue Code of 1986, as amended (the “Code”), and the Acquiring Fund and the Target Fund will each be a “party to a reorganization,” within the meaning of section 368(b) of the Code, with respect to the Reorganization.
2. No gain or loss will be recognized by the Acquiring Fund upon the receipt of all the assets of the Target Fund solely in exchange for Acquiring Fund Shares and the assumption by the Acquiring Fund of all the liabilities of the Target Fund. (Section 1032(a) of the Code).
3. No gain or loss will be recognized by the Target Fund upon the transfer of all its assets to the Acquiring Fund solely in exchange for Acquiring Fund Shares and the assumption by the Acquiring Fund of all the liabilities of the Target Fund or upon the distribution (whether actual or constructive) of the Acquiring Fund Shares so received to the Target Fund’s shareholders solely in exchange for such shareholders’ shares of the Target Fund in complete liquidation of the Target Fund. (Sections 361(a) and (c) and 357(a) of the Code).
VEDDER PRICE
Deutsche LifeCompass Retirement Fund
Deutsche LifeCompass 2015 Fund
October 19, 2015
Page 3
4. No gain or loss will be recognized by the Target Fund’s shareholders upon the exchange, pursuant to the Reorganization, of all their shares of the Target Fund solely for Acquiring Fund Shares. (Section 354(a) of the Code).
5. The aggregate basis of the Acquiring Fund Shares received by each Target Fund shareholder pursuant to the Reorganization will be the same as the aggregate basis of the Target Fund shares exchanged therefor by such shareholder. (Section 358(a)(1) of the Code).
6. The holding period of the Acquiring Fund Shares received by each Target Fund shareholder in the Reorganization will include the period during which the shares of the Target Fund exchanged therefor were held by such shareholder, provided such Target Fund shares were held as capital assets at the Effective Time. (Section 1223(1) of the Code).
7. The basis of the assets of the Target Fund received by the Acquiring Fund will be the same as the basis of such assets in the hands of the Target Fund immediately before the Effective Time. (Section 362(b) of the Code).
8. The holding period of the assets of the Target Fund received by the Acquiring Fund will include the period during which such assets were held by the Target Fund. (Section 1223(2) of the Code).
Notwithstanding anything to the contrary herein, we express no opinion as to the effect of the Reorganization on the Target Fund, the Acquiring Fund or any Target Fund shareholder with respect to any asset (including without limitation any stock held in a passive foreign investment company as defined in section 1297(a) of the Code) as to which any unrealized gain or loss is required to be recognized under federal income tax principles (i) at the end of a taxable year or upon the termination thereof, or (ii) upon the transfer of such asset regardless of whether such transfer would otherwise be a non-taxable transaction under the Code.
Facts
Our opinion is based upon the facts, representations and assumptions set forth or referred to above and the following facts and assumptions, any alteration of which could adversely affect our conclusions.
The Company has been registered and operated, since it commenced operations, as an open-end management investment company under the Investment Company Act of 1940, as amended. Each Fund is a separate series of the Company that is treated for federal income tax purposes as a separate corporation pursuant to section 851(g) of the Code. Each Fund has elected to be taxed as a regulated investment company under section 851 of the Code for all its taxable years, including without limitation the taxable year in which the Reorganization occurs,
VEDDER PRICE
Deutsche LifeCompass Retirement Fund
Deutsche LifeCompass 2015 Fund
October 19, 2015
Page 4
and has qualified and will continue to qualify for the tax treatment afforded regulated investment companies under the Code for each of its taxable years, including without limitation the taxable year in which the Reorganization occurs.
Upon satisfaction of certain terms and conditions set forth in the Plan on or before the Effective Time, the Acquiring Fund will acquire all the assets of the Target Fund solely in exchange for Acquiring Fund Shares and the assumption by the Acquiring Fund of all the liabilities of the Target Fund. Immediately thereafter, the Target Fund will distribute pro rata, by class, to its shareholders of record all the Acquiring Fund Shares so received in complete liquidation of the Target Fund, and as soon as practicable thereafter, the Target Fund will be terminated under applicable state law. The assets of the Target Fund to be acquired by the Acquiring Fund will consist of all assets, including, without limitation, all cash, cash equivalents, securities, commodities and futures contracts, and dividends or interest or other receivables owned by the Target Fund and any deferred or prepaid expenses shown as an asset on the books of the Target Fund as of the effective time of the Closing. In the Reorganization, the Acquiring Fund will acquire at least ninety percent (90%) of the fair market value of the Target Fund’s net assets and at least seventy percent (70%) of the fair market value of the Target Fund’s gross assets held immediately prior to the Reorganization.
Following the Reorganization, the Acquiring Fund will continue the Target Fund’s historic business or use a significant portion of the Target Fund’s historic business assets in its business. At the Effective Time, at least thirty-four percent (34%) of the total fair market value of the Target Fund’s portfolio assets will meet (i) the investment objectives, strategies, policies, risks and restrictions of the Acquiring Fund before its restructuring from a fund-of-funds to a fund that may also make direct investments in individual securities and derivatives (the “Restructuring”) and (ii) the investment objectives, strategies, policies, risks and restrictions of the Acquiring Fund following the Restructuring (collectively, the “34% Test”). The Target Fund did not, and will not, alter its portfolio in connection with the Reorganization to meet the 34% Test. Neither the Acquiring Fund nor the Target Fund modified any of its investment objectives, strategies, policies, risks or restrictions in connection with the Reorganization. Except for the Restructuring, the Acquiring Fund has no plan or intention to change any of its investment objectives, strategies, policies, risks and restrictions after the Reorganization. The Restructuring was undertaken for reasons independent of, and unrelated to, the Reorganization.
In approving the Reorganization, the Board of Trustees of the Company (the “Board”) determined that the Plan and the transactions contemplated thereunder are in the best interests of each Fund and that the interests of the shareholders of each Fund will not be diluted as a result of the Reorganization. In making such determination, the Board considered, among other things, each Fund’s current expense ratio as compared to the anticipated effect of the Reorganization on the Acquiring Fund’s expense ratio following the Reorganization.
VEDDER PRICE
Deutsche LifeCompass Retirement Fund
Deutsche LifeCompass 2015 Fund
October 19, 2015
Page 5
Conclusion
Based on the foregoing, it is our opinion that the transfer of all the assets of the Target Fund, pursuant to the Plan, to the Acquiring Fund solely in exchange for Acquiring Fund Shares and the assumption by the Acquiring Fund of all the liabilities of the Target Fund followed by the complete liquidation of the Target Fund immediately thereafter and the termination of the Target Fund as soon as practicable thereafter will qualify as a reorganization under section 368(a)(1) of the Code.
The opinions set forth above (subject to the limitations set forth above) with respect to (i) the nonrecognition of gain or loss by the Target Fund and the Acquiring Fund, (ii) the basis and holding period of the assets received by the Acquiring Fund, (iii) the nonrecognition of gain or loss by the Target Fund’s shareholders upon the receipt of Acquiring Fund Shares and (iv) the basis and holding period of the Acquiring Fund Shares received by the Target Fund’s shareholders follow as a matter of law from the opinion that the transfers under the Plan will qualify as a reorganization under section 368(a)(1) of the Code.
The opinions expressed in this letter are based on the Code, the Income Tax Regulations promulgated by the Treasury Department thereunder and judicial authority reported as of the date hereof. We have also considered the positions of the Internal Revenue Service (the “Service”) reflected in published and private rulings. Although we are not aware of any pending changes to these authorities that would alter our opinions, there can be no assurances that future legislative or administrative changes, court decisions or Service interpretations will not significantly modify the statements or opinions expressed herein. We do not undertake to make any continuing analysis of the facts or relevant law following the date of this letter or to notify you of any changes to such facts or law.
Our opinion is limited to those U.S. federal income tax issues specifically considered herein. We do not express any opinion as to any other federal tax issues, or any state, local or foreign tax law issues, arising from or related to the transactions contemplated by the Plan. Although the discussion herein is based upon our best interpretation of existing sources of law and expresses what we believe a court would properly conclude if presented with these issues, no assurance can be given that such interpretations would be followed if they were to become the subject of judicial or administrative proceedings.
This opinion is furnished to each Fund solely for its benefit in connection with the Reorganization and is not to be relied upon, quoted, circulated, published, or otherwise referred to for any other purpose, in whole or in part, without our express prior written consent. This opinion may be disclosed to shareholders of each Fund and they may rely on it, it being
VEDDER PRICE
Deutsche LifeCompass Retirement Fund
Deutsche LifeCompass 2015 Fund
October 19, 2015
Page 6
understood that we are not establishing any attorney-client relationship with any shareholder of either of the Funds. This letter is not to be relied upon for the benefit of any other person.
We hereby consent to the filing of a form of this opinion as an exhibit to the Registration Statement on Form N-14 (File No. 333-203938) containing the Prospectus/Proxy Statement dated June 19, 2015 relating to the Reorganization filed by the Company with the Securities and Exchange Commission (the “Registration Statement”), to the discussion of this opinion in the Prospectus/Proxy Statement included in the Registration Statement and to the use of our name and to any reference to our firm in the Registration Statement. In giving such consent, we do not thereby admit that we are within the category of persons whose consent is required under Section 7 of the Securities Act of 1933, as amended, or the rules and regulations of the Securities and Exchange Commission thereunder.
Very truly yours,
/s/ Vedder Price P.C.
VEDDER PRICE P.C.