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Vanguard Small-Cap Index Fund
Vanguard offers lower-fee share classes to investors with larger investment balances. The Ohio Deferred Compensation Program currently offers the Admiral-Class shares of the Small- Cap Index fund, which has an annual expense ratio of 0.13%. When the Program has a combined $5 million balance in this fund, these investments can be moved to the Institutional-Class shares (ticker symbol of VSCIX), which have an annual expense ratio of 0.08%. The underlying investments of these two funds are identical; only the fees are different. The expense ratio is subtracted from a fund's earnings before they are posted to a participant's account. This savings of 0.05% will be small to the individual investor, but, in total, Program participants will save $250,000 annually.
Program management expects that the $5 million balance requirement will be achieved during the next few months. When this occurs, all Vanguard Small-Cap investors will be automatically exchanged into the Institutional-Class shares. All investors will be mailed a written confirmation of their exchange. In addition, a notice will be placed on the Program's web site when this transition occurs. Lower fees means more money is left in your account for your retirement.