Retirement and Investment Solutions Newsletter
May 2009 Issue
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Managing Inflation Risk for Target Date Funds
Seeking robust inflation protection.
We believe that adopting an “all-season” approach in portfolio construction is the important first step when devising appropriate solutions for inflation.
Anne Lester, Senior Portfolio Manager, Global Multi-Asset Group
We all know that the rate, direction and causes of inflation are challenging to predict. So investors who rely on just one asset or inflation-hedging strategy may be prepared for one type of inflationary environment, but will be ill-prepared for other scenarios. And that can be a problem for plan beneficiaries.
To protect investors from negative real returns in any scenario—throughout the life of the fund—target date sponsors must simultaneously consider three issues: growth, volatility and liquidity. In this regard:
Narrow solutions are inappropriate. They do not work consistently because they cannot account for all the variables in inflation, business cycle and asset class risks.
Diversified target date portfolios with some real assets may already be well-positioned for inflation protection.
The level of general diversification and volatility has a bigger impact on inflation shortfall than real assets.
During the last 10 years of the time horizon, when investors are most vulnerable, volatility reduction will provide the greatest degree of protection from negative real returns – particularly in low-inflation environments.
In the role of fiduciary, the plan sponsor must balance all competing needs and goals of its participants. It is not easy, and there will not be one optimal solution that suits every plan. We believe, however, that a thorough understanding of inflation risk, and a diversified approach to inflation protection are the best places to start.
To learn more about inflation protection and managing inflation risk for target date funds, read our latest white paper or contact your J.P. Morgan representative.
J.P. Morgan’s Participant Preference Model
In today’s economic environment with expense management on the minds of many plan sponsors, the goal of success in defined contribution plans remains the same: that employees can retire when they want and the way they want. Plan sponsors may be considering options such as lowering or removing the match, or implementing automatic enrollment or auto escalation. J.P. Morgan Retirement Plan Services has a research tool to assist plan sponsors with these decisions.
A value-add for you – the Participant Preference Model
Originally developed in 1993, more than 350 plan sponsors have taken advantage of the Participant Preference Model. We partnered with Harris Interactive to create the model’s current version, which focuses on the quality of participation and employee acceptance of key elements outlined in the Pension Protection Act of 2006. Harris Interactive specializes in quantitative and qualitative techniques, both of which help to assess participant perceptions, needs, expectations and behaviors.
To create the model, online interviews were conducted and data was gathered from 900 poll participants with a broad range of demographics that resemble the U.S. population. Using an interview process that involved a technique called discrete choice analysis, participant preferences were captured and regressed to create two simulation tools. The fund model measures participant reaction to changes in investments offered, and the plan model focuses on participation and deferral rates based on the features of a plan.
Examples of what we learned
The results of our data gathering highlighted that plan sponsors are doing a lot of things correctly.
- Not surprisingly, the most influential factors individuals consider as part of their plan participation decision are related to financial impact, which includes the match features and vesting schedule.
- Most participants reported contributing 6-10% of their salary and prefer having some type of auto enrollment and auto increase features available in their 401(k) plan.
Participants want planning for retirement to be simple.
- Virtually all participants surveyed would be willing to commit 10 minutes per year to help understand if they were on track for retirement, if that was all it took.
- Around 80% of surveyed participants would welcome assistance in pulling all sources of their retirement funds together to form a more holistic picture that is easy to understand.
- Fund breadth (number of options) ranked low on the priority of plan features, lending further support of keeping it simple.
As a plan sponsor, measures such as Sharpe ratio, standard deviation, style purity and fees are often due diligence criteria used when considering an investment for addition to the plan. However, when participants are deciding to invest in a fund, having a top-brand investment manager is a significant decision criteria. Perhaps there is comfort in name recognition? The Participant Preference Model points to the difference often between the plan sponsor- and participant-level decision, as brand ranked higher than risk among the factors for consideration. Therefore, while the tool may not help determine prudent investments for the plan, it can help gauge participant reaction to those investments the plan sponsor deems prudent.
Why use the Participant Preference Model?
The Participant Preference Model can help plan sponsors with limited time, resources and budget to gauge what features are most important to participants without raising employees’ expectations or incurring the cost of surveys or focus groups. Looking at the basic tenants of what drives decision making, this unique tool allows plan sponsors to view the plan from a participant’s perspective.
Here's an example of how to use the tool:
In an effort to get back to basics, we believe it is important to know your participants and determine whether the majority would be better served by a simple core menu. Perhaps those more sophisticated investors could use a brokerage window to access more complex or specialty type investments. The Participant Preference Model allows you to model the addition of a brokerage window to help determine participant appetite for this feature.
If you are interested in running the Participant Preference Model for your plan, please contact your J.P. Morgan representative, 800-988-9084 or Retirement_Insights@JPMorgan.com.
This material has been prepared for informational and educational purposes only. It is not intended to provide, and should not be relied upon for investment, accounting, legal or tax advice.
Considering a pension plan freeze? Things you may want to consider
With all the talk about pension plans being frozen, the two primary freeze designs are often lumped together. Although talked about in the same breath, a design that freezes the plan to new entrants is very different from one that freezes all future accruals under the plan. The approach to take varies depending on the strategy, and the designs result in different requirements for a plan administrator.
Freeze plan to new entrants
Some organizations announce a pension freeze that is designed to continue building pension benefits for existing plan participants, but will allow no one further to join the plan. While this design may impact recruiting, new-hire orientation and/or employee relations, it has a minimal impact to pension administration. In this scenario, administrators can eliminate new-hire communication and may be able to stop tracking eligibility and participation dates, depending on the design specifics. However, there is no relief from the existing recordkeeping around tracking pay, service, employment status, transfers and all of the other details of pension recordkeeping. The work required to do calculations and make distributions is virtually unchanged.
This design approach can actually increase the workload for administrators who must create transition rules and update systems and procedures accordingly. In addition, administrators should expect a near-term spike in workload as the new design is announced and employees inquire about what the changes mean to them.
Freeze plan accruals for all
Under these scenarios, pension plan benefits are frozen as of a particular date with no further benefits building for any participant in a given plan. In these situations, the freeze may apply to all employees or just employees in certain pension plans sponsored by an employer (e.g., management or salaried plan). In these cases, the temptation is to think that the pension plan will no longer need attention because it ceases ongoing accruals. However, this is far from a practical conclusion.
In this design scenario, often referred to as a hard freeze, the human resources (H.R.) department has very little reduction in the workload required to administer the pension plan. While some of the tracking requirements are minimized on an ongoing basis (e.g., future pay), many data elements (e.g., employment status) must still be fed into the recordkeeping system for use in an estimate or a final calculation upon termination. Upon distribution eligibility (e.g., retirement, disability, termination), a final benefit must be calculated with optional forms of payment and any early retirement subsidies accurately applied. And just as with any other active pension plan, distributions must be managed until the last participant and beneficiary are no longer entitled to payment from the plan.
What should an employer do?
Given the requirement for deep knowledge of the complex plan formulas and administrative practices that surround a pension plan, employers must recognize the need for ongoing expert resources to manage even a frozen plan. Because the decision to freeze a plan is almost always a corollary to an overall cost-cutting campaign, these expert resources may be eliminated under the false notion that the frozen plan requires no substantial ongoing support. Employers who take this action are doing so at great peril if they don’t establish and execute a plan for maintaining institutional knowledge of the plan’s data, calculations and administrative procedures. For those who don’t keep such knowledge in-house, it is imperative that external resources be retained to manage the plan to its ultimate end point.
To mitigate much of the risk of retaining detailed capabilities either internally or externally, plan sponsors calculate and store normal form pension accruals for all plan participants as of the date of the plan freeze. In addition to a calculation program for establishing normal form calculations, this approach requires that all data be usable, typically meaning that records should be converted to an automated media. However, some pension plans have historical records that are missing data elements and require an expert to investigate and interpret the available history in order to apply the plan rules to an individual participant’s situation. Undertaking a one-time clean-up of missing or inaccurate records is achievable at or around the time of the plan freeze when long-time plan experts are available, as opposed to after they have retired or been laid off. While this seems like a significant task for some employers, the effort and expense is likely to pay off dramatically by reducing both ongoing administrative costs and future exposure to errors, litigation or bad publicity.
Overall, H.R. professionals know and accept that freezing pension plans is a strategic corporate decision that may be made with only minimal focus on the administrative considerations that surround it. However, this action has the potential to create substantial new work for H.R. and certainly creates a challenging resource need if the long-term plan management requirements aren’t identified, evaluated and effectively built into a plan for the future. As design decisions are made, administrators must find effective ways to raise this important consideration and ensure that the plan has the necessary management oversight that is required of all qualified retirement plans.
Frozen Pension Plan Administration Tasks
What are some steps employers should consider in order to effectively support a frozen pension plan? Below is a checklist that plan sponsors can use to evaluate their preparedness to manage these plans for today and for the years ahead.
Establish a communication plan for employees
Prepare effective announcement of changes.
Respond promptly to inquiries from individuals.
Provide participant-specific impact of the freeze (i.e., what happens to me?).
Clarify ongoing services to be provided to those with plan benefits.
Evaluate data management needs
Review overall data sources to determine whether they are complete and accurate enough to support batch calculations.
If data is not sufficiently accurate to support administration needs, determine whether a data clean-up project can be completed to avoid the need for ongoing interpretation expertise.
If data clean-up is not possible, establish written procedures and document interpretation rules to ensure appropriate use of accurate and complete data required for on-demand calculations.
Whenever possible, calculate all accrued benefits (normal form) at date-of-freeze and document procedures and interpretation rules for use in applying early retirement subsidies and optional form factors.
If it is not practical to complete a one-time batch calculation of normal form benefits, establish written procedures, robust and varied calculation examples and documented interpretation rules regarding how to apply plan provisions and administrative practices to on-demand calculations.
Anticipate necessary staffing levels for ongoing administration
Evaluate cost-benefit of self-service capabilities vs. retained staff (internal or external) that can provide higher touch services.
Ensure that the necessary resources are retained (internally or externally) so that reporting, disclosure and government filing requirements are met as required for ongoing plan compliance.
Determine the level of ongoing data management that will be required based on strategy for data interpretation/automation and calculation support.
Establish strong oversight and controls over plan distributions.
Timely Statistics on Participant Behavior
As the economic turbulence continued throughout first quarter 2009, J.P. Morgan Retirement Plan Services saw participants remain steadfast in their attitudes toward retirement savings. Overall, the overwhelming majority of our participants maintained a long-term view to investing, which can be an important defense against hasty action during times of market volatility. Their investment choices continued a conservative trend to lower-risk vehicles such as cash, bonds and capital preservation instruments. Finally, although we witnessed fewer participants requesting hardship withdrawals, the average withdrawal increased by 18.3% for the quarter.
One in 10 participants (149,113) changed their deferrals during the quarter.
The overwhelming majority of our 1.54 million participants did not alter their contribution levels.
Of those participants who changed their deferral amounts: 49% increased contributions, 26% decreased and 25% opted out of contributing.
The number of participant deferrals increased 13% between Q1 2009 and Q4 2008 (149,133 vs. 132,409); 15% from the previous year (149,133 vs. 130,180).
- Participants remain cautious regarding their investments.
- Participants moved their money to cash, bonds and capital preservation instruments ($1,194,014,824 net increase) from stocks and asset allocation funds ($1,193,350,821 net decrease).
- There were more than 27,000 transfers into the JPMorgan Stable Value Fund, for a net gain of $312,372,376.
- The number of participant requests for hardship withdrawals declined, yet the average withdrawal increased by 18.3% for the quarter.
The number of requests for hardship withdrawals decreased 26% for the first part of 2009 (5,339 in Q1 2009 vs. 7,220 in Q4 2008).
The total amount of hardship withdrawals decreased more than $3 million from the previous quarter ($21.7 million in Q1 2009 vs. $24.8 million in Q4 2008), falling more in line with the previous year ($21.6 million in Q1 2008).
While the average hardship withdrawal amount rose in 1Q 2009 compared to the previous quarter ($4,078 average hardship withdrawal amount in Q1 2009 vs. $3,446 in Q4 2008), the loan average was less than the same timeframe last year ($4,078 in Q1 2009 vs. $4,788 Q1 2008).
The current economic storm has left many participants wondering how they can rebuild their savings. To help them get back on track, J.P. Morgan Retirement Plan Services has launched The Way Forward, an informational series to assist participants in navigating the waters during this unprecedented time. The series highlights what participants can do to stay on track for retirement given today’s challenging market environment. Using a multi-media approach to deliver information, our goal with The Way Forward is to provide up-to-date information to help address the unique issues participants face today.
J.P. Morgan remains vigilant in our commitment to deliver communication strategies designed to help participants make choices during these challenging days.
Ongoing Participant Dialogue
The medium is the message - Marshall McLuhan (1911-1980)
Marshall McLuhan’s famous quote from the 1960s is even more relevant today. In the not-too-distant past, retirement communications could be measured by the pound. Big box enrollment kits, lengthy videos and “enroll today” messages were common practices. Participants and eligible nonparticipants received the same messages with very little evidence of their current situation. State-of-the-art communications in the past was a one-way push of information; media offered little opportunity for feedback, and messages were generic rather than targeted.
Today, however, we’re migrating communications from a passive experience into an active, participatory dialogue. Gone are the days of mountains of paper (undoubtedly affected by environmental awareness as well). They’ve been replaced by media choices available around the clock as well as the expectation that messages are personal and relevant. Consider the available media today:
And, the advent of social media has turned communications into a constant conversation. Anyone with Internet access can be a reporter, whether they’re writing about a hobby or passion or their employer or their benefits.
Consider the rapid growth of Facebook, the popular social networking site. Facebook reached 150 million users in January 2009, a mere five years since its launch (for comparison, it took 38 years for television sets to reach that number). Facebook’s original target group, 18- to 24-year-olds, comprises less than 25% of its users. In fact, the fastest growing demographic on Facebook is women age 55 and older with a 175% increase since September 2008. The new world order brings the opportunity for rapid fire dialogue and a constant exchange of information, perspective and opinion.
So what does it mean for retirement communications? The landscape has evolved, and the medium is the message. Organizations with effective communication strategies employ multiple tactics to reach their goals. Successful programs include targeted messages – adhering to strong guiding principles – delivered in the medium of choice. And don’t underestimate the power of the grapevine; it’s less literal today, but it grows more quickly.
Marrying data and messages together is a critical component of effective communications. Rather than disseminating information en masse, our experience shows that smaller, targeted messages have the greatest impact on actually changing behavior. The next step involves J.P. Morgan’s Audience of One® philosophy which has long focused on individual messages. The Audience of One tenets are even more important today in navigating the new environment of media and message. Consider these principles as you communicate:
Make it simple. Break information down into smaller pieces or “to do's.” Keep reading levels at eighth grade or lower for the easiest and most efficient comprehension.
Make it personal. With participant data readily available, why should participants receive information about the importance of saving? They’re already contributing! Talk to each individual where he or she is in the process of saving.
Connect the money to the emotion. Keep messages focused on the goal of savings. Turbulent economic times are particularly emotional experiences. Maintaining the overall picture is even more important.
Do the right thing. As you make decisions about your retirement program, communicate your intentions and process to your employees. They’ll recognize – and appreciate – the perspective.
Cultivate a long-term relationship. Saving for the future is not a single event or decision. Effective communications involve multiple messages in multiple media versus a one-time immersion.
Over time, however, the industry has become much more sophisticated with respect to using participant data and even more specific in measuring desired outcomes. More importantly, our collective participants and employees have come to expect a more personalized experience.
If you’d like to learn more about how you can take advantage of a more personalized communication program, contact your J.P. Morgan representative.
*All Facebook data from Fortune, March 2, 2009.
Breach of Fiduciary Duty
So far in our series dealing with fiduciary issues, we covered the definition of a fiduciary and the standards of conduct that fiduciaries must follow. ERISA set the bar high in developing fiduciary standards designed to protect plan participants and beneficiaries. This month, we briefly examine the potential consequences a fiduciary may face when a breach of his or her duties occurs.
The consequences of failing to follow the fiduciary standards of conduct can be severe. ERISA holds a fiduciary personally liable for a breach of fiduciary duty that he or she directly commits, either by act or omission. Bad intent or an actual loss to the plan does not need to occur for there to be a fiduciary violation and a penalty imposed.
The fiduciary must restore any loss to the plan resulting from the violation and must disgorge any profits he or she realizes. Fiduciaries can be hit with civil suits in federal court filed by the U.S. Department of Labor (DOL), by plan participants and beneficiaries, or by another fiduciary. A civil penalty of 20% of the amount payable pursuant to a court order or settlement agreement for breach of fiduciary duty can be imposed [ERISA 502(l)]. In extreme cases, fiduciaries have been sentenced to prison or other criminal penalties.
A fiduciary breach can also result in a prohibited transaction by the plan. These are acts that generally involve self-dealing between the plan and certain individuals defined by ERISA as “parties-in-interest” (fiduciaries, service providers, the employer, etc.). Unless there is a special exemption, prohibited transactions are subject to penalties until corrected.
Successor and co-fiduciaries
A successor fiduciary, under ERISA §409(b), is not liable for a breach of duty if the breach occurred prior to the successor becoming a fiduciary. However, if the successor does not take prudent steps to remedy the breach, once discovered, he or she may be liable for the continuing breach. So, newly appointed fiduciaries should not assume a false sense of security merely because they correctly execute their appointed fiduciary duties.
Likewise, under ERISA §405, a fiduciary may be held liable for a breach committed by a co-fiduciary in three scenarios:
The fiduciary knowingly participates or conceals the breach.
The fiduciary, by not following his or her duties under ERISA, enables another fiduciary to commit a breach.
The fiduciary has knowledge of the breach and does not take any steps to remedy it.
The responsibilities of a fiduciary are important, and failure to act properly can have serious consequences. Next month, we will discuss the DOL’s program to correct certain fiduciary violations.
Save the Date
- SmartRetirement Target Date Fund Webcast - Please save the date for our SmartRetirement Mutual Fund Quarterly Review Webcast on Tuesday, May 12th at 11 a.m. Eastern time, where we will review the past quarter and look at investment opportunities and positioning in the future. More to come!
Legislative and Regulatory Update
The recent economic crisis has put possible pension and saving legislation in the spotlight. Although there have been several hearings and a great deal of press about this, Congress is also addressing many other issues. There are two recent legislative proposals related to retirement savings that have been introduced. Even though these bills are only in the early stages of the legislative process, here are summaries:
Retirement Savings Contribution Credit
Representative Earl Pomeroy (D-ND) has introduced the Savings for American Families’ Future Act (H.R. 1961) to expand the Retirement Savings Contribution Credit, or more commonly known as the Saver’s Credit. Currently, the Saver’s Credit is a non-refundable tax credit equal to a percentage of the first $2,000 ($4,000 for joint filers) contributed to a qualified retirement plan, a 403(b) annuity, a 457(b) deferred compensation plan sponsored by a government entity and certain other retirement arrangements. The current credit is 10%, 20% or 50% of eligible contributions, depending on the taxpayer’s adjusted gross income. (For 2009, single filers earning $27,750 or more and joint filers earning $55,500 or more do not qualify for the credit.)
H.R. 1961, which would implement President Obama’s fiscal year 2010 budget blueprint proposal, would:
- make the credit refundable (meaning that even taxpayers not paying any federal income tax could receive the credit)
- make the maximum credit equal to $1,000 for a couple and $500 for an individual
- Credits would increase by $200 and $100 respectively each year until 2020, and subject to cost of living adjustments thereafter.
- increase the adjusted gross income limits of individuals available for the credit
- $65,000 for couples
- $32,500 for individuals
- A credit phase-out would apply to individuals earning slightly above these income limits.
- include a provision for depositing the credit into the taxpayer’s retirement account
- This provides some interesting administrative issues.
We will provide additional updates as this bill progresses through the Ways and Means Committee and the House.
Republicans propose retirement bill
House Republicans announce a blueprint of the Savings Recovery Act, which would include both defined benefit and defined contribution provisions. Whether or not such a bill would even be considered by the House committees of jurisdiction is questionable. As proposed, the bill would:
raise the defined contribution and IRA contribution and catch-up limits
- extend through 2012 the suspension of required minimum distributions
- increase the amount retirees can earn before Social Security benefits are reduced
- provide relief for defined benefit funding, including an asset smoothing corridor of 20% (up from the current 10% corridor)
- require only interest payments on 2008 defined benefit losses for two years and allow amortization of those losses over nine years
- extend the existing Saver’s Credit to include contributions to section 529 college savings accounts
Defined benefit developments
The Pension Protection Act of 2006 (PPA) was generally designed to improve the funded status of defined benefit plans. That alone would have put additional pressure on some plan sponsors to increase contributions to their plans, but then along came the current economic crisis. With significant decreases in pension plan assets and stresses on company cash and capital in this economy, the situation has grown worse for pension plan funding.
The Worker, Retiree, and Employer Recovery Act of 2008, passed by Congress late last year, provided some relief, but for many plans this may not be enough. In the March 2009 IRS newsletter, the Employee Plan News, a favorable method of valuing plan liabilities was announced. This method may provide some temporary help, but plan sponsors and industry groups are asking Congress for more assistance.
For a more detailed discussion of the issues, please read the Current Pension Legislative Outlook article written by J.P. Morgan Compensation and Benefits Strategies.
401(k) Safe-harbor plans
As the recession deepens, many companies are looking for ways to reduce costs. Some have taken steps to reduce or eliminate matching and other company contributions in their thrift and 401(k) savings plans. However, if a plan is designed as a safe-harbor plan to avoid nondiscrimination testing, this may create special considerations. Safe-harbor plans require a certain level of matching or non-elective contributions. Eliminating or reducing safe-harbor matching contributions requires specific procedures and is currently not possible for safe-harbor non-elective contributions.
In a recent Technical Bulletin we discussed essential requirements if you are considering a change to your safe-harbor company contributions. Due to the extraordinary economic conditions, appeals are being made by industry groups to the Treasury Department to provide relief for safe-harbor plans utilizing non-elective contributions. We will keep you posted on the progress of these developments.
J.P. Morgan In the News
Despite financial results that reflect the terrible market conditions… "this year may have been one of our finest," wrote Jamie Dimon, chief executive officer of JPMorgan Chase & Co., in his letter to shareholders in the 2008 Annual Report.
The 29-page letter talks about the unprecedented challenges that JPMorgan Chase, the financial industry and the United States have faced during the last year (there were many), and the role that various government actions had in addressing the current economy. It also focuses on some of the actions both the government and the financial industry may need to consider going forward. The final sections reinforces the firm’s commitment to doing its part to help bring stability to the communities in which JPMorgan Chase operates and to the financial system overall.
You can view the entire letter on the JPMorgan Chase web site.
To learn more about Total Retirement SolutionsSM, email or call J.P. Morgan at 800-988-9804.
For questions about a personal retirement plan account, email or call J.P. Morgan at 800-345-2345. If your retirement plan is not with J.P. Morgan, contact your employer for that provider's phone number and website.
IRS Circular 230 Disclosure: This communication was written in connection with the potential promotion or marketing, to the extent permitted by applicable law, of the transaction(s) or matter(s) addressed herein by persons unaffiliated with JPMorgan Chase & Co. However, JPMorgan Chase & Co. and its affiliates do not provide tax advice. Accordingly, to the extent this communication contains any discussion of tax matters, such communication is not intended or written to be used, and cannot be used, for the purpose of avoiding tax-related penalties. Any recipient of this communication should seek advice from an independent tax advisor based on the recipient's particular circumstances.
Availability of products and services featured in Insights vary by plan. For details, contact your J.P. Morgan representative.
This material has been prepared for informational and educational purposes only. It is not intended to provide, and should not be relied upon for investment, accounting, legal or tax advice.
Publications referenced in this material are presented for general educational purposes only. JPMorgan and its affiliates did not receive any compensation or consideration for referencing these titles. The opinions and information presented in these titles do not necessarily reflect the opinions of JPMorgan Chase & Co. and its affiliates.
Recordkeeping and administrative services are provided by J.P. Morgan Retirement Plan Services LLC (JPMRPS); securities transactions for the plan may be introduced by J.P. Morgan Institutional Investments Inc. (JPMII). Member FINRA/SIPC. JPMRPS and JPMII are affiliates of JPMorgan Chase & Co.
JPMorgan funds are distributed by JPMorgan Distribution Services, Inc., which is an affiliate of J.P. Morgan Retirement Plan Services LLC and JPMorgan Chase & Co. Affiliates of JPMorgan Chase & Co. receive fees for providing various services to JPMorgan funds, including fees for investment management, shareholder servicing, administration, distribution, custody, fund accounting, securities lending and other services.
IRS Circular 230 Disclosure: JPMorgan Chase & Co. and its affiliates do not provide tax advice. Accordingly, any discussion of U.S. tax matters contained herein (including any attachments) is not intended or written to be used, and cannot be used, in connection with the promotion, marketing or recommendation by anyone unaffiliated with JPMorgan Chase & Co. of any of the matters addressed herein or for the purpose of avoiding U.S. tax-related penalties.