American Funds Target Date Retirement Series®

Part B
Statement of Additional Information

January 1, 2019

This document is not a prospectus but should be read in conjunction with the current prospectus of American Funds Target Date Retirement Series (the “series”) dated January 1, 2019. Except where the context indicates otherwise, all references herein to the “fund” apply to each of the funds listed below. You may obtain a prospectus from your financial advisor, by calling American Funds Service Company® at (800) 421-4225 or by writing to the series at the following address:

American Funds Target Date Retirement Series
Attention: Secretary

333 South Hope Street
Los Angeles, California 90071

Certain privileges and/or services described below may not be available to all shareholders (including shareholders who purchase shares at net asset value through eligible retirement plans) depending on the shareholder’s investment dealer or retirement plan recordkeeper. Please see your financial advisor, investment dealer, plan recordkeeper or employer for more information.

               
  Class A Class C Class T Class F-1 Class F-2 Class F-3 Class R-1
American Funds 2060 Target Date Retirement Fund® AANTX CCKTX TDSSX FAWTX FBKTX FCKTX RANTX
American Funds 2055 Target Date Retirement Fund® AAMTX CCJTX TDFWX FAJTX FBJTX FCJTX RAMTX
American Funds 2050 Target Date Retirement Fund® AALTX CCITX TDFYX FAITX FBITX DITFX RAITX
American Funds 2045 Target Date Retirement Fund® AAHTX CCHTX TDFUX FATTX FBHTX FCHTX RAHTX
American Funds 2040 Target Date Retirement Fund® AAGTX CCGTX TDFOX FAUTX FBGTX FCGTX RAKTX
American Funds 2035 Target Date Retirement Fund® AAFTX CCFTX TDFHX FAQTX FBFTX FDFTX RAFTX
American Funds 2030 Target Date Retirement Fund® AAETX CCETX TDFMX FAETX FBETX FCETX RAETX
American Funds 2025 Target Date Retirement Fund® AADTX CCDTX TDLMX FAPTX FBDTX FDDTX RADTX
American Funds 2020 Target Date Retirement Fund® AACTX CCCTX TDAMX FAOTX FBCTX FCCTX RACTX
American Funds 2015 Target Date Retirement Fund® AABTX CCBTX TDQMX FAKTX FBBTX FDBTX RAJTX
American Funds 2010 Target Date Retirement Fund® AAATX CCATX TDMMX FAATX FBATX DJTFX RAATX
  Class R-2 Class R-2E Class R-3 Class R-4 Class R-5E Class R-5 Class R-6
American Funds 2060 Target Date Retirement Fund® RBNTX RBENX RCNTX RDKTX RHKTX REMTX RFUTX
American Funds 2055 Target Date Retirement Fund® RBMTX RBEMX RCMTX RDJTX RHJTX REKTX RFKTX
American Funds 2050 Target Date Retirement Fund® RBITX RBHEX RCITX RDITX RHITX REITX RFITX
American Funds 2045 Target Date Retirement Fund® RBHTX RBHHX RCHTX RDHTX RHHTX REHTX RFHTX
American Funds 2040 Target Date Retirement Fund® RBKTX RBEKX RCKTX RDGTX RHGTX REGTX RFGTX
American Funds 2035 Target Date Retirement Fund® RBFTX RBEFX RCFTX RDFTX RHFTX REFTX RFFTX
American Funds 2030 Target Date Retirement Fund® RBETX RBEEX RCETX RDETX RHETX REETX RFETX
American Funds 2025 Target Date Retirement Fund® RBDTX RBEDX RCDTX RDDTX RHDTX REDTX RFDTX
American Funds 2020 Target Date Retirement Fund® RBCTX RBEHX RCCTX RDCTX RHCTX RECTX RRCTX
American Funds 2015 Target Date Retirement Fund® RBJTX RBEJX RCJTX RDBTX RHBTX REJTX RFJTX
American Funds 2010 Target Date Retirement Fund® RBATX RBEAX RCATX RDATX RHATX REATX RFTTX

 

 

Table of Contents

 

Item Page no.
Description of certain securities, investment techniques and risks 2
Fund policies 30
Management of the series 32
Execution of portfolio transactions 84
Disclosure of portfolio holdings 85
Price of shares 87
Taxes and distributions 90
Purchase and exchange of shares 93
Sales charges 98
Sales charge reductions and waivers 101
Selling shares 106
Shareholder account services and privileges 107
General information 110
Appendix 122

Investment portfolio
Financial statements

American Funds Target Date Retirement Series — Page 1


 
 

 

 

Description of certain securities, investment techniques and risks

The descriptions below are intended to supplement the material in the prospectus under “Investment objectives, strategies and risks” and “Information regarding underlying funds,” which provide information about the series, the funds and the underlying funds.

The funds

The following descriptions of securities, investment techniques and risks apply to each of the funds.

Investment techniques relating to the funds in the series — In addition to its investments in the underlying funds, a portion of each fund’s assets, which will normally be less than 20%, may be held in cash or cash equivalents, including but not limited to obligations of banks, such as time deposits, or invested in high-quality taxable short-term securities of up to one year in maturity. Such investments may include: (a) obligations of the U.S. Treasury; (b) obligations of agencies and instrumentalities of the U.S. government; (c) money market instruments, such as certificates of deposit issued by domestic banks, corporate commercial paper, and bankers' acceptances and (d) repurchase agreements.

Each fund may take temporary defensive measures in response to adverse market, economic, political, or other conditions as determined by the adviser. Such measures could include, but are not limited to, investments in cash (including foreign currency) or cash equivalents, including, but not limited to, obligations of banks (including certificates of deposit, bankers’ acceptances, time deposits and repurchase agreements), commercial paper, short-term notes, U.S. Government Securities and related repurchase agreements. There is no limit on the extent to which each fund may take temporary defensive measures. In taking such measures, each fund may fail to achieve its investment objective.

Investment techniques relating to the underlying funds — Because the following is a combined summary of investment strategies of all of the underlying funds, certain matters described herein will only apply to your fund to the extent it is invested in an underlying fund that engages in such a strategy. Unless a strategy or policy described below is specifically prohibited by the investment restrictions explained in the fund’s prospectus or the “Fund policies” section of this SAI, or by applicable law, each fund in the series may invest in underlying funds which engage in each of the practices described below.

The underlying funds may experience difficulty liquidating certain portfolio securities during significant market declines or periods of heavy redemptions.

Cash and cash equivalents — In addition to its investments in the underlying funds, a portion of the fund’s assets may hold cash or invest in cash equivalents. Cash equivalents include, but are not limited to: (a) commercial paper; (b) short-term bank obligations (for example, certificates of deposit, bankers’ acceptances (time drafts on a commercial bank where the bank accepts an irrevocable obligation to pay at maturity)) or bank notes; (c) savings association and savings bank obligations (for example, bank notes and certificates of deposit issued by savings banks or savings associations); (d) securities of the U.S. government, its agencies or instrumentalities that mature, or that may be redeemed, in one year or less; (e) higher quality corporate bonds and notes that mature, or that may be redeemed, in one year or less; and (f) shares of money market funds. Cash and cash equivalents may be denominated in U.S. dollars, non-U.S. currencies or multinational currency units.

There is no limit on the extent to which the fund may take temporary defensive measures. In taking such measures, the fund may fail to achieve its investment objective.

Allocation – The funds consist of allocations of funds selected solely from proprietary funds managed by the investment adviser. No other funds or investments were considered in the construct of any fund.

American Funds Target Date Retirement Series — Page 2


 
 

 

 

The underlying funds

The following is a combined summary of investment strategies of all the underlying funds. Certain matters described below will only apply to a fund in the series to the extent such fund is invested in an underlying fund that engages in such a strategy. Unless a strategy or policy described below is specifically prohibited by the investment restrictions explained in a fund’s prospectus or the “Fund policies” section of this statement of additional information, or by applicable law, each fund in the series may invest in underlying funds, which engage in each of the practices described below. The value of the fund will fluctuate as the values of the underlying funds change.

Equity securities — An underlying fund may invest in equity securities. Equity securities represent an ownership position in a company. Equity securities held by an underlying fund typically consist of common stocks and may also include securities with equity conversion or purchase rights. The prices of equity securities fluctuate based on, among other things, events specific to their issuers and market, economic and other conditions. For example, prices of these securities can be affected by financial contracts held by the issuer or third parties (such as derivatives) relating to the security or other assets or indices. Holders of equity securities are not creditors of the issuer. If an issuer liquidates, holders of equity securities are entitled to their pro rata share of the issuer’s assets, if any, after creditors (including the holders of fixed-income securities and senior equity securities) are paid.

There may be little trading in the secondary market for particular equity securities, which may adversely affect an underlying fund’s ability to value accurately or dispose of such equity securities. Adverse publicity and investor perceptions, whether or not based on fundamental analysis, may decrease the value and/or liquidity of equity securities.

Debt instruments — An underlying fund may invest in debt securities. Debt securities, also known as “fixed-income securities,” are used by issuers to borrow money. Bonds, notes, debentures, asset-backed securities (including those backed by mortgages), and loan participations and assignments are common types of debt securities. Generally, issuers pay investors periodic interest and repay the amount borrowed either periodically during the life of the security and/or at maturity. Some debt securities, such as zero coupon bonds, do not pay current interest, but are purchased at a discount from their face values and their values accrete over time to face value at maturity. Some debt securities bear interest at rates that are not fixed, but that vary with changes in specified market rates or indices. The market prices of debt securities fluctuate depending on such factors as interest rates, credit quality and maturity. In general, market prices of debt securities decline when interest rates rise and increase when interest rates fall. These fluctuations will generally be greater for longer-term debt securities than for shorter-term debt securities. Prices of these securities can also be affected by financial contracts held by the issuer or third parties (such as derivatives) relating to the security or other assets or indices.

American Funds Target Date Retirement Series — Page 3


 
 

 

 

Credit ratings for debt securities provided by rating agencies reflect an evaluation of the safety of principal and interest payments, not market value risk. The rating of an issuer is a rating agency’s view of past and future potential developments related to the issuer and may not necessarily reflect actual outcomes. There can be a lag between the time of developments relating to an issuer and the time a rating is assigned and updated. The investment adviser considers these ratings of securities as one of many criteria in making its investment decisions.

Bond rating agencies may assign modifiers (such as +/–) to ratings categories to signify the relative position of a credit within the rating category. Investment policies that are based on ratings categories should be read to include any security within that category, without giving consideration to the modifier except where otherwise provided. See the Appendix to this statement of additional information for more information about credit ratings.

Securities with equity and debt characteristics — Certain securities have a combination of equity and debt characteristics. Such securities may at times behave more like equity than debt or vice versa.

Preferred stock — Preferred stock represents an equity interest in an issuer that generally entitles the holder to receive, in preference to common stockholders and the holders of certain other stocks, dividends and a fixed share of the proceeds resulting from a liquidation of the issuer. Preferred stocks may pay fixed or adjustable rates of return, and preferred stock dividends may be cumulative or non-cumulative and participating or non-participating. Cumulative dividend provisions require all or a portion of prior unpaid dividends to be paid before dividends can be paid to the issuer’s common stockholders, while prior unpaid dividends on non-cumulative preferred stock are forfeited. Participating preferred stock may be entitled to a dividend exceeding the issuer’s declared dividend in certain cases, while non-participating preferred stock is entitled only to the stipulated dividend. Preferred stock is subject to issuer-specific and market risks applicable generally to equity securities. As with debt securities, the prices and yields of preferred stocks often move with changes in interest rates and the issuer’s credit quality. Additionally, a company’s preferred stock typically pays dividends only after the company makes required payments to holders of its bonds and other debt. Accordingly, the price of preferred stock will usually react more strongly than bonds and other debt to actual or perceived changes in the issuing company’s financial condition or prospects. Preferred stock of smaller companies may be more vulnerable to adverse developments than preferred stock of larger companies.

Convertible securities — A convertible security is a debt obligation, preferred stock or other security that may be converted, within a specified period of time and at a stated conversion rate, into common stock or other equity securities of the same or a different issuer. The conversion may occur automatically upon the occurrence of a predetermined event or at the option of either the issuer or the security holder. Under certain circumstances, a convertible security may also be called for redemption or conversion by the issuer after a particular date and at predetermined price specified upon issue. If a convertible security held by an underlying fund is called for redemption or conversion, the fund could be required to tender the security for redemption, convert it into the underlying common stock, or sell it to a third party.

The holder of a convertible security is generally entitled to participate in the capital appreciation resulting from a market price increase in the issuer’s common stock and to receive interest paid or accrued until the convertible security matures or is redeemed, converted or exchanged. Before conversion, convertible securities have characteristics similar to non-convertible debt or preferred securities, as applicable. Convertible securities rank senior to common stock in an issuer’s capital structure and, therefore, normally entail less risk than the issuer’s common stock. However, convertible securities may also be subordinate to any senior debt obligations of the issuer, and, therefore, an issuer’s convertible securities may

American Funds Target Date Retirement Series — Page 4


 
 

 

entail more risk than such senior debt obligations. Convertible securities usually offer lower interest or dividend yields than non-convertible debt securities of similar credit quality because of the potential for capital appreciation. In addition, convertible securities are often lower-rated securities.

Because of the conversion feature, the price of a convertible security will normally fluctuate in some proportion to changes in the price of the underlying asset, and, accordingly, convertible securities are subject to risks relating to the activities of the issuer and/or general market and economic conditions. The income component of a convertible security may cushion the security against declines in the price of the underlying asset but may also cause the price of the security to fluctuate based upon changes in interest rates and the credit quality of the issuer. As with a straight fixed-income security, the price of a convertible security tends to increase when interest rates decline and decrease when interest rates rise. Like the price of a common stock, the price of a convertible security also tends to increase as the price of the underlying stock rises and to decrease as the price of the underlying stock declines.

Hybrid securities — A hybrid security is a type of security that also has equity and debt characteristics. Like equities, which have no final maturity, a hybrid security may be perpetual. On the other hand, like debt securities, a hybrid security may be callable at the option of the issuer on a date specified at issue. Additionally, like common equities, which may stop paying dividends at virtually any time without violating any contractual terms or conditions, hybrids typically allow for issuers to withhold payment of interest until a later date or to suspend coupon payments entirely without triggering an event of default. Hybrid securities are normally at the bottom of an issuer’s debt capital structure because holders of an issuer’s hybrid securities are structurally subordinated to the issuer’s senior creditors. In bankruptcy, hybrid security holders should only get paid after all senior creditors of the issuer have been paid but before any disbursements are made to the issuer’s equity holders. Accordingly, hybrid securities may be more sensitive to economic changes than more senior debt securities. Such securities may also be viewed as more equity-like by the market when the issuer or its parent company experiences financial difficulties.

Contingent convertible securities, which are also known as contingent capital securities, are a form of hybrid security that are intended to either convert into equity or have their principal written down upon the occurrence of certain trigger events. One type of contingent convertible security has characteristics designed to absorb losses, by providing that the liquidation value of the security may be adjusted downward to below the original par value or written off entirely under certain circumstances. For instance, if losses have eroded the issuer’s capital level below a specified threshold, the liquidation value of the security may be reduced in whole or in part. The write-down of the security’s par value may occur automatically and would not entitle holders to institute bankruptcy proceedings against the issuer. In addition, an automatic write-down could result in a reduced income rate if the dividend or interest payment associated with the security is based on the security’s par value. Such securities may, but are not required to, provide for circumstances under which the liquidation value of the security may be adjusted back up to par, such as an improvement in capitalization or earnings. Another type of contingent convertible security provides for mandatory conversion of the security into common shares of the issuer under certain circumstances. The mandatory conversion might relate, for example, to the issuer’s failure to maintain a capital minimum. Since the common stock of the issuer may not pay a dividend, investors in such instruments could experience reduced yields (or no yields at all) and conversion would deepen the subordination of the investor, effectively worsening the investor’s standing in the case of the issuer’s insolvency. An automatic write-down or conversion event with respect to a contingent convertible security will typically be triggered by a reduction in the issuer’s capital level, but may also be triggered by regulatory actions, such as a change in regulatory capital requirements, or by other factors.

American Funds Target Date Retirement Series — Page 5


 
 

 

 

Warrants and rights — Warrants and rights may be acquired by an underlying fund in connection with other securities or separately. Warrants generally entitle, but do not obligate, their holder to purchase other equity or fixed-income securities at a specified price at a later date. Rights are similar to warrants but typically have a shorter duration and are issued by a company to existing holders of its stock to provide those holders the right to purchase additional shares of stock at a later date. Warrants and rights do not carry with them the right to dividends or voting rights with respect to the securities that they entitle their holder to purchase, and they do not represent any rights in the assets of the issuing company. Additionally, a warrant or right ceases to have value if it is not exercised prior to its expiration date. As a result, warrants and rights may be considered more speculative than certain other types of investments. Changes in the value of a warrant or right do not necessarily correspond to changes in the value of its underlying security. The price of a warrant or right may be more volatile than the price of its underlying security, and they therefore present greater potential for capital appreciation and capital loss. The effective price paid for warrants or rights added to the subscription price of the related security may exceed the value of the subscribed security’s market price, such as when there is no movement in the price of the underlying security. The market for warrants or rights may be very limited and it may be difficult to sell them promptly at an acceptable price.

Investing in smaller capitalization stocks — An underlying fund may invest in the stocks of smaller capitalization companies. Investing in smaller capitalization stocks can involve greater risk than is customarily associated with investing in stocks of larger, more established companies. For example, smaller companies often have limited product lines, limited operating histories, limited markets or financial resources, may be dependent on one or a few key persons for management and can be more susceptible to losses. Also, their securities may be less liquid or illiquid (and therefore have to be sold at a discount from current prices or sold in small lots over an extended period of time), may be followed by fewer investment research analysts and may be subject to wider price swings, thus creating a greater chance of loss than securities of larger capitalization companies.

Investing in private companies — An underlying fund may invest in companies that have not publicly offered their securities. Investing in private companies can involve greater risks than those associated with investing in publicly traded companies. For example, the securities of a private company may be subject to the risk that market conditions, developments within the company, investor perception, or regulatory decisions may delay or prevent the company from ultimately offering its securities to the public. Furthermore, these investments are generally considered to be illiquid until a company’s public offering and are often subject to additional contractual restrictions on resale that would prevent an underlying fund from selling its company shares for a period of time following the public offering.

Investments in private companies can offer an underlying fund significant growth opportunities at attractive prices. However, these investments can pose greater risk, and, consequently, there is no guarantee that positive results can be achieved in the future.

Investing outside the U.S. — Securities of issuers domiciled outside the United States, or with significant operations or revenues outside the United States, may lose value because of adverse political, social, economic or market developments (including social instability, regional conflicts, terrorism and war) in the countries or regions in which the issuers are domiciled, operate or generate revenue. These issuers may also be more susceptible to actions of foreign governments such as the imposition of price controls or punitive taxes that could adversely impact the value of these securities. To the extent the fund invests in securities that are denominated in currencies other than the U.S. dollar, these securities may also lose value due to changes in foreign currency exchange rates against the U.S. dollar and/or currencies of other countries. Securities markets in certain countries may be more volatile or less liquid than those in the United States. Investments outside the United States may also be subject to different accounting practices and different regulatory, legal and reporting standards, and may be more difficult to value, than those in the United States. In addition, the value of investments outside the United States may be reduced by foreign taxes, including foreign withholding taxes on interest and dividends. Further, there may be increased risks of delayed settlement of securities purchased or sold by the

American Funds Target Date Retirement Series — Page 6


 
 

 

fund. The risks of investing outside the United States may be heightened in connection with investments in emerging markets.

Additional costs could be incurred in connection with an underlying fund’s investment activities outside the United States. Brokerage commissions may be higher outside the United States, and an underlying fund will bear certain expenses in connection with its currency transactions. Furthermore, increased custodian costs may be associated with maintaining assets in certain jurisdictions.

Investing in emerging markets — Investing in emerging markets may involve risks in addition to and greater than those generally associated with investing in the securities markets of developed countries. For instance, developing countries may have less developed legal and accounting systems than those in developed countries. The governments of these countries may be less stable and more likely to impose capital controls, nationalize a company or industry, place restrictions on foreign ownership and on withdrawing sale proceeds of securities from the country, and/or impose punitive taxes that could adversely affect the prices of securities. In addition, the economies of these countries may be dependent on relatively few industries that are more susceptible to local and global changes. Securities markets in these countries can also be relatively small and have substantially lower trading volumes. As a result, securities issued in these countries may be more volatile and less liquid, and may be more difficult to value, than securities issued in countries with more developed economies and/or markets. Additionally, there may be increased settlement risks for transactions in local securities.

Although there is no universally accepted definition, the investment adviser generally considers an emerging market to be a market that is in the earlier stages of its industrialization cycle with a low per capita gross domestic product (“GDP”) and a low market capitalization to GDP ratio relative to those in the United States and the European Union, and would include markets commonly referred to as “frontier markets.”

In determining the domicile of an issuer, the underlying fund’s investment adviser will consider the domicile determination of a leading provider of global indexes, such as Morgan Stanley Capital International, and may also take into account such factors as where the issuer’s securities are listed and where the issuer is legally organized, maintains principal corporate offices, conducts its principal operations and/or generates revenues.

Certain risk factors related to emerging markets

Currency fluctuations — Certain emerging markets’ currencies have experienced and in the future may experience significant declines against the U.S. dollar. For example, if the U.S. dollar appreciates against foreign currencies, the value of the underlying fund’s emerging markets securities holdings would generally depreciate and vice versa. Further, the fund may lose money due to losses and other expenses incurred in converting various currencies to purchase and sell securities valued in currencies other than the U.S. dollar, as well as from currency restrictions, exchange control regulation and currency devaluations.

Government regulation — Certain developing countries lack uniform accounting, auditing and financial reporting and disclosure standards, have less governmental supervision of financial markets than in the United States, and do not honor legal rights enjoyed in the United States. Certain governments may be more unstable and present greater risks of nationalization or restrictions on foreign ownership of local companies. Repatriation of investment income, capital and the proceeds of sales by foreign investors may require governmental registration and/or approval in some developing countries. While an underlying fund will only invest in markets where these restrictions are considered acceptable by the investment adviser, a country could impose new or additional repatriation restrictions after the underlying fund’s investment. If this happened, the underlying fund’s response might include, among other

American Funds Target Date Retirement Series — Page 7


 
 

 

things, applying to the appropriate authorities for a waiver of the restrictions or engaging in transactions in other markets designed to offset the risks of decline in that country. Such restrictions will be considered in relation to the underlying fund’s liquidity needs and other factors. Further, some attractive equity securities may not be available to the underlying fund if foreign shareholders already hold the maximum amount legally permissible.

While government involvement in the private sector varies in degree among developing countries, such involvement may in some cases include government ownership of companies in certain sectors, wage and price controls or imposition of trade barriers and other protectionist measures. With respect to any developing country, there is no guarantee that some future economic or political crisis will not lead to price controls, forced mergers of companies, expropriation, or creation of government monopolies to the possible detriment of the underlying fund’s investments.

Fluctuations in inflation rates — Rapid fluctuations in inflation rates may have negative impacts on the economies and securities markets of certain emerging market countries.

Less developed securities markets — Emerging markets may be less well-developed than other markets. These markets have lower trading volumes than the securities markets of more developed countries and may be unable to respond effectively to increases in trading volume. Consequently, these markets may be substantially less liquid than those of more developed countries, and the securities of issuers located in these markets may have limited marketability. These factors may make prompt liquidation of substantial portfolio holdings difficult or impossible at times.

Settlement risks — Settlement systems in developing countries are generally less well organized than those of developed markets. Supervisory authorities may also be unable to apply standards comparable to those in developed markets. Thus, there may be risks that settlement may be delayed and that cash or securities belonging to the underlying fund may be in jeopardy because of failures of or defects in the systems. In particular, market practice may require that payment be made before receipt of the security being purchased or that delivery of a security be made before payment is received. In such cases, default by a broker or bank (the “counterparty”) through whom the transaction is effected might cause the underlying fund to suffer a loss. An underlying fund will seek, where possible, to use counterparties whose financial status is such that this risk is reduced. However, there can be no certainty that the underlying fund will be successful in eliminating this risk, particularly as counterparties operating in developing countries frequently lack the standing or financial resources of those in developed countries. There may also be a danger that, because of uncertainties in the operation of settlement systems in individual markets, competing claims may arise with respect to securities held by or to be transferred to the underlying fund.

Insufficient market information — An underlying fund may encounter problems assessing investment opportunities in certain emerging markets in light of limitations on available information and different accounting, auditing and financial reporting standards. In such circumstances, the underlying fund’s investment adviser will seek alternative sources of information, and to the extent the investment adviser is not satisfied with the sufficiency of the information obtained with respect to a particular market or security, the underlying fund will not invest in such market or security.

Taxation — Taxation of dividends, interest and capital gains received by an underlying fund varies among developing countries and, in some cases, is comparatively high. In addition, developing countries typically have less well-defined tax laws and procedures and such laws may permit retroactive taxation so that an underlying fund could become subject in the future

American Funds Target Date Retirement Series — Page 8


 
 

 

to local tax liability that it had not reasonably anticipated in conducting its investment activities or valuing its assets.

Litigation — An underlying fund and its shareholders may encounter substantial difficulties in obtaining and enforcing judgments against individuals residing outside of the U.S. and companies domiciled outside of the U.S.

Fraudulent securities — Securities purchased by an underlying fund may subsequently be found to be fraudulent or counterfeit, resulting in a loss to the underlying fund.

Investing through Stock Connect — An underlying fund may invest in China A-shares of certain Chinese companies listed and traded on the Shanghai Stock Exchange and on the Shenzhen Stock Exchange (together, the “Exchanges”) through the Shanghai-Hong Kong Stock Connect Program and the Shenzhen-Hong Kong Stock Connect Program, respectively (together, “Stock Connect”). Stock Connect is a securities trading and clearing program developed by the Exchange of Hong Kong, the Exchanges and the China Securities Depository and Clearing Corporation Limited. Stock Connect facilitates foreign investment in the People’s Republic of China (“PRC”) via brokers in Hong Kong. Persons investing through Stock Connect are subject to PRC regulations and Exchange listing rules, among others. These could include limitations on or suspension of trading. These regulations are relatively new and subject to changes which could adversely impact an underlying fund’s rights with respect to the securities. As Stock Connect is relatively new, there are no assurances that the necessary systems to run the program will function properly. Stock Connect is subject to aggregate and daily quota limitations on purchases and an underlying fund may experience delays in transacting via Stock Connect. An underlying fund’s shares are held in an omnibus account and registered in nominee name. Please also see the sections on risks relating to investing outside the U.S. and investing in emerging markets.

Obligations backed by the “full faith and credit” of the U.S. government — U.S. government obligations include the following types of securities:

U.S. Treasury securities — U.S. Treasury securities include direct obligations of the U.S. Treasury, such as Treasury bills, notes and bonds. For these securities, the payment of principal and interest is unconditionally guaranteed by the U.S. government, and thus they are of high credit quality. Such securities are subject to variations in market value due to fluctuations in interest rates and in government policies, but, if held to maturity, are expected to be paid in full (either at maturity or thereafter).

Federal agency securities — The securities of certain U.S. government agencies and government-sponsored entities are guaranteed as to the timely payment of principal and interest by the full faith and credit of the U.S. government. Such agencies and entities include, but are not limited to, the Federal Financing Bank (“FFB”), the Government National Mortgage Association (“Ginnie Mae”), the Veterans Administration (“VA”), the Federal Housing Administration (“FHA”), the Export-Import Bank (“Exim Bank”), the Overseas Private Investment Corporation (“OPIC”), the Commodity Credit Corporation (“CCC”) and the Small Business Administration (“SBA”).

Other federal agency obligations — Additional federal agency securities are neither direct obligations of, nor guaranteed by, the U.S. government. These obligations include securities issued by certain U.S. government agencies and government-sponsored entities. However, they generally involve some form of federal sponsorship: some operate under a congressional charter; some are backed by collateral consisting of “full faith and credit” obligations as described above; some are supported by the issuer’s right to borrow from the Treasury; and others are supported only by the credit of the issuing government agency or entity. These agencies and entities include, but are not limited to: the Federal

American Funds Target Date Retirement Series — Page 9


 
 

 

Home Loan Banks, the Federal Home Loan Mortgage Corporation (“Freddie Mac”), the Federal National Mortgage Association (“Fannie Mae”), the Tennessee Valley Authority and the Federal Farm Credit Bank System.

In 2008, Freddie Mac and Fannie Mae were placed into conservatorship by their new regulator, the Federal Housing Finance Agency (“FHFA”). Simultaneously, the U.S. Treasury made a commitment of indefinite duration to maintain the positive net worth of both firms. As conservator, the FHFA has the authority to repudiate any contract either firm has entered into prior to the FHFA’s appointment as conservator (or receiver should either firm go into default) if the FHFA, in its sole discretion determines that performance of the contract is burdensome and repudiation would promote the orderly administration of Fannie Mae’s or Freddie Mac’s affairs. While the FHFA has indicated that it does not intend to repudiate the guaranty obligations of either entity, doing so could adversely affect holders of their mortgage-backed securities. For example, if a contract were repudiated, the liability for any direct compensatory damages would accrue to the entity’s conservatorship estate and could only be satisfied to the extent the estate had available assets. As a result, if interest payments on Fannie Mae or Freddie Mac mortgage-backed securities held by the fund were reduced because underlying borrowers failed to make payments or such payments were not advanced by a loan servicer, the fund’s only recourse might be against the conservatorship estate, which might not have sufficient assets to offset any shortfalls.

The FHFA, in its capacity as conservator, has the power to transfer or sell any asset or liability of Fannie Mae or Freddie Mac. The FHFA has indicated it has no current intention to do this; however, should it do so a holder of a Fannie Mae or Freddie Mac mortgage-backed security would have to rely on another party for satisfaction of the guaranty obligations and would be exposed to the credit risk of that party.

Certain rights provided to holders of mortgage-backed securities issued by Fannie Mae or Freddie Mac under their operative documents may not be enforceable against the FHFA, or enforcement may be delayed during the course of the conservatorship or any future receivership. For example, the operative documents may provide that upon the occurrence of an event of default by Fannie Mae or Freddie Mac, holders of a requisite percentage of the mortgage-backed security may replace the entity as trustee. However, under the Federal Housing Finance Regulatory Reform Act of 2008, holders may not enforce this right if the event of default arises solely because a conservator or receiver has been appointed.

American Funds Target Date Retirement Series — Page 10


 
 

 

 

Pass-through securities — An underlying fund may invest in various debt obligations backed by pools of mortgages or other assets including, but not limited to, loans on single family residences, home equity loans, mortgages on commercial buildings, credit card receivables and leases on airplanes or other equipment. Principal and interest payments made on the underlying asset pools backing these obligations are typically passed through to investors, net of any fees paid to any insurer or any guarantor of the securities. Pass-through securities may have either fixed or adjustable coupons. These securities include:

Mortgage-backed securities — These securities may be issued by U.S. government agencies and government-sponsored entities, such as Ginnie Mae, Fannie Mae and Freddie Mac, and by private entities. The payment of interest and principal on mortgage-backed obligations issued by U.S. government agencies may be guaranteed by the full faith and credit of the U.S. government (in the case of Ginnie Mae), or may be guaranteed by the issuer (in the case of Fannie Mae and Freddie Mac). However, these guarantees do not apply to the market prices and yields of these securities, which vary with changes in interest rates.

Mortgage-backed securities issued by private entities are structured similarly to those issued by U.S. government agencies. However, these securities and the underlying mortgages are not guaranteed by any government agencies and the underlying mortgages are not subject to the same underwriting requirements. These securities generally are structured with one or more types of credit enhancements such as insurance or letters of credit issued by private companies. Borrowers on the underlying mortgages are usually permitted to prepay their underlying mortgages. Prepayments can alter the effective maturity of these instruments. In addition, delinquencies, losses or defaults by borrowers can adversely affect the prices and volatility of these securities. Such delinquencies and losses can be exacerbated by declining or flattening housing and property values. This, along with other outside pressures, such as bankruptcies and financial difficulties experienced by mortgage loan originators, decreased investor demand for mortgage loans and mortgage-related securities and increased investor demand for yield, can adversely affect the value and liquidity of mortgage-backed securities.

Adjustable rate mortgage-backed securities — Adjustable rate mortgage-backed securities (“ARMS”) have interest rates that reset at periodic intervals. Acquiring ARMS permits the fund to participate in increases in prevailing current interest rates through periodic adjustments in the coupons of mortgages underlying the pool on which ARMS are based. Such ARMS generally have higher current yield and lower price fluctuations than is the case with more traditional fixed-income debt securities of comparable rating and maturity. In addition, when prepayments of principal are made on the underlying mortgages during periods of rising interest rates, the fund can reinvest the proceeds of such prepayments at rates higher than those at which they were previously invested. Mortgages underlying most ARMS, however, have limits on the allowable annual or lifetime increases that can be made in the interest rate that the mortgagor pays. Therefore, if current interest rates rise above such limits over the period of the limitation, the fund, when holding an ARMS, does not benefit from further increases in interest rates. Moreover, when interest rates are in excess of coupon rates (i.e., the rates being paid by mortgagors) of the mortgages, ARMS behave more like fixed-income securities and less like adjustable rate securities and are subject to the risks associated with fixed-income securities. In addition, during periods of rising interest rates, increases in the coupon rate of adjustable rate mortgages generally lag current market interest rates slightly, thereby creating the potential for capital depreciation on such securities.

Collateralized mortgage obligations (CMOs) — CMOs are also backed by a pool of mortgages or mortgage loans, which are divided into two or more separate bond issues. CMOs issued by U.S. government agencies are backed by agency mortgages, while privately issued CMOs may be backed by either government agency mortgages or private mortgages. Payments of principal and interest are passed through to each bond issue at varying schedules resulting in

American Funds Target Date Retirement Series — Page 11


 
 

 

bonds with different coupons, effective maturities and sensitivities to interest rates. Some CMOs may be structured in a way that when interest rates change, the impact of changing prepayment rates on the effective maturities of certain issues of these securities is magnified. CMOs may be less liquid or may exhibit greater price volatility than other types of mortgage or asset-backed securities.

Commercial mortgage-backed securities — These securities are backed by mortgages on commercial property, such as hotels, office buildings, retail stores, hospitals and other commercial buildings. These securities may have a lower prepayment uncertainty than other mortgage-related securities because commercial mortgage loans generally prohibit or impose penalties on prepayments of principal. In addition, commercial mortgage-related securities often are structured with some form of credit enhancement to protect against potential losses on the underlying mortgage loans. Many of the risks of investing in commercial mortgage-backed securities reflect the risks of investing in the real estate securing the underlying mortgage loans, including the effects of local and other economic conditions on real estate markets, the ability of tenants to make rental payments and the ability of a property to attract and retain tenants. Commercial mortgage-backed securities may be less liquid or exhibit greater price volatility than other types of mortgage or asset-backed securities and may be more difficult to value.

Asset-backed securities — These securities are backed by other assets such as credit card, automobile or consumer loan receivables, retail installment loans or participations in pools of leases. Credit support for these securities may be based on the underlying assets and/or provided through credit enhancements by a third party. The values of these securities are sensitive to changes in the credit quality of the underlying collateral, the credit strength of the credit enhancement, changes in interest rates and at times the financial condition of the issuer. Obligors of the underlying assets also may make prepayments that can change effective maturities of the asset-backed securities. These securities may be less liquid and more difficult to value than other securities.

“IOs” and “POs” are issued in portions or tranches with varying maturities and characteristics. Some tranches may only receive the interest paid on the underlying mortgages (IOs) and others may only receive the principal payments (POs). The values of IOs and POs are extremely sensitive to interest rate fluctuations and prepayment rates, and IOs are also subject to the risk of early repayment of the underlying mortgages that will substantially reduce or eliminate interest payments.

Municipal bonds — Municipal bonds are debt obligations generally issued to obtain funds for various public purposes, including the construction of public facilities. Opinions relating to the validity of municipal bonds, exclusion of municipal bond interest from an investor’s gross income for federal income tax purposes and, where applicable, state and local income tax, are rendered by bond counsel to the issuing authorities at the time of issuance.

The two principal classifications of municipal bonds are general obligation bonds and limited obligation or revenue bonds. General obligation bonds are secured by the issuer’s pledge of its full faith and credit including, if available, its taxing power for the payment of principal and interest. Issuers of general obligation bonds include states, counties, cities, towns and various regional or special districts. The proceeds of these obligations are used to fund a wide range of public facilities, such as the construction or improvement of schools, highways and roads, water and sewer systems and facilities for a variety of other public purposes. Lease revenue bonds or certificates of participation in leases are payable from annual lease rental payments from a state or locality. Annual rental payments are payable to the extent such rental payments are appropriated annually.

American Funds Target Date Retirement Series — Page 12


 
 

 

Typically, the only security for a limited obligation or revenue bond is the net revenue derived from a particular facility or class of facilities financed thereby or, in some cases, from the proceeds of a special tax or other special revenues. Revenue bonds have been issued to fund a wide variety of revenue-producing public capital projects including: electric, gas, water and sewer systems; highways, bridges and tunnels; port and airport facilities; colleges and universities; hospitals; and convention, recreational, tribal gaming and housing facilities. Although the security behind these bonds varies widely, many provide additional security in the form of a debt service reserve fund which may also be used to make principal and interest payments on the issuer's obligations. In addition, some revenue obligations (as well as general obligations) are insured by a bond insurance company or backed by a letter of credit issued by a banking institution.

Revenue bonds also include, for example, pollution control, health care and housing bonds, which, although nominally issued by municipal authorities, are generally not secured by the taxing power of the municipality but by the revenues of the authority derived from payments by the private entity which owns or operates the facility financed with the proceeds of the bonds. Obligations of housing finance authorities have a wide range of security features, including reserve funds and insured or subsidized mortgages, as well as the net revenues from housing or other public projects. Many of these bonds do not generally constitute the pledge of the credit of the issuer of such bonds. The credit quality of such revenue bonds is usually directly related to the credit standing of the user of the facility being financed or of an institution which provides a guarantee, letter of credit or other credit enhancement for the bond issue.

Municipal inflation-indexed bonds — An underlying fund may invest in inflation-indexed bonds issued by municipalities. Interest payments are made to bondholders semi-annually and are made up of two components: a fixed “real coupon” or spread, and a variable coupon linked to an inflation index. Accordingly, payments will increase or decrease each period as a result of changes in the inflation index. In a period of deflation payments may decrease to zero, but in any event will not be less than zero.

Insured municipal bonds — An underlying fund may invest in municipal bonds that are insured generally as to the timely payment of interest and principal. The insurance for such bonds may be purchased by the bond issuer, the fund or any other party, and is usually purchased from private, non-governmental insurance companies. Insurance that covers a municipal bond is expected to protect the fund against losses caused by a bond issuer’s failure to make interest or principal payments. However, insurance does not guarantee the market value of the bond or the prices of the fund’s shares. Also, the investment adviser cannot be certain that the insurance company will make payments it guarantees. When rating agencies lower or withdraw the credit rating of the insurer, the insurance may be providing little or no enhancement of credit or resale value to the municipal bond.

U.S. Territories and Commonwealth obligations — An underlying fund may invest in obligations of the territories and Commonwealths of the United States, such as Puerto Rico, the U.S. Virgin Islands, Guam and their agencies and authorities (“territories and Commonwealth”), to the extent such obligations are exempt from federal income taxes. Adverse political and economic conditions and developments affecting any territory or Commonwealth may, in turn, negatively affect the value of the funds’ holdings in such obligations. Territories and Commonwealths face significant fiscal challenges, including persistent government deficits, underfunded retirement systems, sizable debt service obligations and a high unemployment rate. A restructuring of some or all of the debt or a decline in market prices of the territories’ and Commonwealths’ debt obligations, may affect the funds’ investment in these

American Funds Target Date Retirement Series — Page 13


 
 

 

securities. If the economic situation in the territories and Commonwealths persists or worsens, the volatility, credit quality and performance of the fund could be adversely affected.

Zero coupon bonds — Municipalities may issue zero coupon securities which are debt obligations that do not entitle the holder to any periodic payments of interest prior to maturity or a specified date when the securities begin paying current interest. They are issued and traded at a discount from their face amount or par value, which discount varies depending on the time remaining until cash payments begin, prevailing interest rates, liquidity of the security, and the perceived credit quality of the issuer.

Pre-refunded bonds — From time to time, a municipality may refund a bond that it has already issued prior to the original bond’s call date by issuing a second bond, the proceeds of which are used to purchase U.S. government securities. The securities are placed in an escrow account pursuant to an agreement between the municipality and an independent escrow agent. The principal and interest payments on the securities are then used to pay off the original bondholders. The escrow account securities pledged to pay the principal and interest of the pre-refunded bond do not guarantee the price movement of the bond before maturity. Investment in pre-refunded bonds held by the fund may subject the fund to interest rate risk, market risk and credit risk. For purposes of diversification, pre-refunded bonds will be treated as governmental issues.

Derivatives — In pursuing its investment objective, the underlying fund may invest in derivative instruments. A derivative is a financial instrument, the value of which depends on, or is otherwise derived from, another underlying variable. Most often, the variable underlying a derivative is the price of a traded asset, such as a traditional cash security (e.g., a stock or bond), a currency or a commodity; however, the value of a derivative can be dependent on almost any variable, from the level of an index or a specified rate to the occurrence (or non-occurrence) of a credit event with respect to a specified reference asset. In addition to investing in forward currency contracts, as described below under “Currency transactions,” the underlying fund may take positions in futures contracts, interest rate swaps and credit default swap indices, each of which is a derivative instrument described in greater detail below.

Derivative instruments may be distinguished by the manner in which they trade: some are standardized instruments that trade on an organized exchange while others are individually negotiated and traded in the over-the-counter (OTC) market. Derivatives also range broadly in complexity, from simple derivatives to more complex instruments. As a general matter, however, all derivatives — regardless of the manner in which they trade or their relative complexities — entail certain risks, some of which are different from, and potentially greater than, the risks associated with investing directly in traditional cash securities.

As is the case with traditional cash securities, derivative instruments are generally subject to counterparty credit risk; however, in some cases, derivatives may pose counterparty risks greater than those posed by cash securities. The use of derivatives involves the risk that a loss may be sustained by the underlying fund as a result of the failure of the underlying fund’s counterparty to make required payments or otherwise to comply with its contractual obligations. For some derivatives, though, the value of — and, in effect, the return on — the instrument may be dependent on both the individual credit of the underlying fund’s counterparty and on the credit of one or more issuers of any underlying assets. If the underlying fund does not correctly evaluate the creditworthiness of its counterparty and, where applicable, of issuers of any underlying reference assets, the underlying fund’s investment in a derivative instrument may result in losses. Further, if an underlying fund’s counterparty were to default on its obligations, the underlying fund’s contractual remedies against such counterparty may be subject to applicable bankruptcy and insolvency laws, which could affect the underlying fund’s rights as a creditor and delay or impede the underlying fund’s ability to receive the net amount of payments that it is contractually entitled to receive.

American Funds Target Date Retirement Series — Page 14


 
 

 

The value of some derivative instruments in which the underlying fund invests may be particularly sensitive to changes in prevailing interest rates, currency exchange rates or other market conditions. Like the underlying fund’s other investments, the ability of the underlying fund to successfully utilize such derivative instruments may depend in part upon the ability of the underlying fund’s investment adviser to accurately forecast interest rates and other economic factors. The success of the underlying fund’s derivative investment strategy will also depend on the investment adviser’s ability to assess and predict the impact of market or economic developments on the derivative instruments in which the underlying fund invests, in some cases without having had the benefit of observing the performance of a derivative under all possible market conditions. If the investment adviser incorrectly forecasts such factors and has taken positions in derivative instruments contrary to prevailing market trends, or if the investment adviser incorrectly predicts the impact of developments on a derivative instrument, the underlying fund could be exposed to the risk of loss.

Certain derivatives may also be subject to liquidity and valuation risks. The potential lack of a liquid secondary market for a derivative (and, particularly, for an OTC derivative) may cause difficulty in valuing or selling the instrument. If a derivative transaction is particularly large or if the relevant market is illiquid, as is often the case with many privately-negotiated OTC derivatives, the underlying fund may not be able to initiate a transaction or to liquidate a position at an advantageous time or price. Particularly when there is no liquid secondary market for the underlying fund’s derivative positions, the underlying fund may encounter difficulty in valuing such illiquid positions. The value of a derivative instrument does not always correlate perfectly with its underlying asset, rate or index, and many derivatives, and OTC derivatives in particular, are complex and often valued subjectively. Improper valuations can result in increased cash payment requirements to counterparties or a loss of value to the underlying fund.

Because certain derivative instruments may obligate the underlying fund to make one or more potential future payments, which could significantly exceed the value of the underlying fund’s initial investments in such instruments, derivative instruments may also have a leveraging effect on the underlying fund’s portfolio. Certain derivatives have the potential for unlimited loss, irrespective of the size of the underlying fund’s investment in the instrument. When an underlying fund leverages its portfolio, investments in that underlying fund will tend to be more volatile, resulting in larger gains or losses in response to market changes. In accordance with applicable regulatory requirements, the underlying fund will generally segregate or earmark liquid assets, or enter into offsetting financial positions, to cover its obligations under derivative instruments, effectively limiting the risk of leveraging the underlying fund’s portfolio. Because the underlying fund is legally required to maintain asset coverage or offsetting positions in connection with leveraging derivative instruments, the underlying fund’s investments in such derivatives may also require the underlying fund to buy or sell portfolio securities at disadvantageous times or prices in order to comply with applicable requirements.

American Funds Target Date Retirement Series — Page 15


 
 

 

 

Futures — The underlying fund may enter into futures contracts to seek to manage the underlying fund’s interest rate sensitivity by increasing or decreasing the duration of the underlying fund or a portion of the underlying fund’s portfolio. A futures contract is an agreement to buy or sell a security or other financial instrument (the “reference asset”) for a set price on a future date. Futures contracts are standardized, exchange-traded contracts, and, when a futures contract is bought or sold, the underlying fund will incur brokerage fees and will be required to maintain margin deposits.

Unlike when the underlying fund purchases or sells a security, such as a stock or bond, no price is paid or received by the underlying fund upon the purchase or sale of a futures contract. When the underlying fund enters into a futures contract, the underlying fund is required to deposit with its futures broker, known as a futures commission merchant (FCM), a specified amount of liquid assets in a segregated account in the name of the FCM at the applicable derivatives clearinghouse or exchange. This amount, known as initial margin, is set by the futures exchange on which the contract is traded and may be significantly modified during the term of the contract. The initial margin is in the nature of a performance bond or good faith deposit on the futures contract, which is returned to the underlying fund upon termination of the contract, assuming all contractual obligations have been satisfied. Additionally, on a daily basis, the underlying fund pays or receives cash, or variation margin, equal to the daily change in value of the futures contract. Variation margin does not represent a borrowing or loan by the underlying fund but is instead a settlement between the underlying fund and the FCM of the amount one party would owe the other if the futures contract expired. In computing daily net asset value, the underlying fund will mark-to-market its open futures positions. In the event of the bankruptcy or insolvency of an FCM that holds margin on behalf of the underlying fund, the underlying fund may be entitled to return of margin owed to it only in proportion to the amount received by the FCM’s other customers, potentially resulting in losses to the underlying fund. An event of bankruptcy or insolvency at a clearinghouse or exchange holding initial margin could also result in losses for the underlying fund.

When the underlying fund invests in futures contracts and deposits margin with an FCM, the underlying fund becomes subject to so-called “fellow customer” risk – that is, the risk that one or more customers of the FCM will default on their obligations and that the resulting losses will be so great that the FCM will default on its obligations and margin posted by one customer, such as the underlying fund, will be used to cover a loss caused by a different defaulting customer. Applicable rules generally prohibit the use of one customer’s funds to meet the obligations of another customer and limit the ability of an FCM to use margin posed by non-defaulting customers to satisfy losses caused by defaulting customers. As a general matter, an FCM is required to use its own funds to meet a defaulting customer’s obligations. While a customer’s loss would likely need to be substantial before non-defaulting customers would be exposed to loss on account of fellow customer risk, applicable rules nevertheless permit the commingling of margin and do not limit the mutualization of customer losses from investment losses, custodial failures, fraud or other causes. If the loss is so great that, notwithstanding the application of an FCM’s own funds, there is a shortfall in the amount of customer funds required to be held in segregation, the FCM could default and be placed into bankruptcy. Under these circumstances, bankruptcy law provides that non-defaulting customers will share pro rata in any shortfall. A shortfall in customer segregated funds may also make the transfer of the accounts of non-defaulting customers to another FCM more difficult.

Although certain futures contracts, by their terms, require actual future delivery of and payment for the reference asset, in practice, most futures contracts are usually closed out before the delivery date by offsetting purchases or sales of matching futures contracts. Closing out an open futures contract purchase or sale is effected by entering into an offsetting futures contract sale or purchase, respectively, for the same aggregate amount of the identical reference asset and the same delivery date with the same FCM. If the offsetting purchase price

American Funds Target Date Retirement Series — Page 16


 
 

 

is less than the original sale price (in each case taking into account transaction costs, including brokerage fees), the underlying fund realizes a gain; if it is more, the underlying fund realizes a loss. Conversely, if the offsetting sale price is more than the original purchase price (in each case taking into account transaction costs, including brokerage fees), the underlying fund realizes a gain; if it is less, the underlying fund realizes a loss.

The underlying fund is generally required to segregate liquid assets equivalent to the underlying fund’s outstanding obligations under each futures contract. With respect to long positions in futures contracts that are not legally required to cash settle, the underlying fund will segregate or earmark liquid assets in an amount equal to the contract price the underlying fund will be required to pay on settlement less the amount of margin deposited with an FCM. For short positions in futures contracts that are not legally required to cash settle, the underlying fund will segregate or earmark liquid assets in an amount that, when added to the amounts deposited with an FCM as margin, equals the market value of the reference asset underlying the futures contract. With respect to futures contracts that are required to cash settle, however, the underlying fund is permitted to segregate or earmark liquid assets in an amount that, when added to the amounts deposited with an FCM as margin, equals the underlying fund’s daily marked-to-market (net) obligation under the contract (i.e., the daily market value of the contract itself), if any; in other words, the underlying fund may set aside its daily net liability, if any, rather than the notional value of the futures contract. By segregating or earmarking assets equal only to its net obligation under cash-settled futures, the underlying fund may be able to utilize these contracts to a greater extent than if the underlying fund were required to segregate or earmark assets equal to the full contract price or current market value of the futures contract. Such segregation of assets is intended to ensure that the underlying fund has assets available to satisfy its obligations with respect to futures contracts and to limit any potential leveraging of the underlying fund’s portfolio. However, segregation of liquid assets will not limit the underlying fund’s exposure to loss. To maintain a sufficient amount of segregated assets, the underlying fund may also have to sell less liquid portfolio securities at disadvantageous prices, and the earmarking of liquid assets will have the effect of limiting the underlying fund’s ability to otherwise invest those assets in other securities or instruments.

The value of a futures contract tends to increase and decrease in tandem with the value of its underlying reference asset. Purchasing futures contracts will, therefore, tend to increase the underlying fund’s exposure to positive and negative price fluctuations in the reference asset, much as if the underlying fund had purchased the reference asset directly. When the underlying fund sells a futures contract, by contrast, the value of its futures position will tend to move in a direction contrary to the market for the reference asset. Accordingly, selling futures contracts will tend to offset both positive and negative market price changes, much as if the reference asset had been sold.

There is no assurance that a liquid market will exist for any particular futures contract at any particular time. Futures exchanges may establish daily price fluctuation limits for futures contracts and may halt trading if a contract’s price moves upward or downward more than the limit in a given day. On volatile trading days, when the price fluctuation limit is reached and a trading halt is imposed, it may be impossible to enter into new positions or close out existing positions. If the market for a futures contract is not liquid because of price fluctuation limits or other market conditions, the underlying fund may be prevented from promptly liquidating unfavorable futures positions and the underlying fund could be required to continue to hold a position until delivery or expiration regardless of changes in its value, potentially subjecting the underlying fund to substantial losses. Additionally, the underlying fund may not be able to take other actions or enter into other transactions to limit or reduce its exposure to the position. Under such circumstances, the underlying fund would remain obligated to meet margin requirements until the position is cleared. As a result, the underlying fund’s access to other assets held to cover its futures positions could also be impaired.

American Funds Target Date Retirement Series — Page 17


 
 

 

Although futures exchanges generally operate similarly in the United States and abroad, foreign futures exchanges may follow trading, settlement and margin procedures that are different than those followed by futures exchanges in the United States. Futures contracts traded outside the United States may not involve a clearing mechanism or related guarantees and may involve greater risk of loss than U.S.-traded contracts, including potentially greater risk of losses due to insolvency of a futures broker, exchange member, or other party that may owe initial or variation margin to the underlying fund. Margin requirements on foreign futures exchanges may be different than those of futures exchanges in the United States, and, because initial and variation margin payments may be measured in foreign currency, a futures contract traded outside the United States may also involve the risk of foreign currency fluctuations.

Interest rate swaps — An underlying fund may enter into interest rate swaps to seek to manage the interest rate sensitivity of the underlying fund by increasing or decreasing the duration of the underlying fund or a portion of the underlying fund’s portfolio. An interest rate swap is an agreement between two parties to exchange or swap payments based on changes in an interest rate or rates. Typically, one interest rate is fixed and the other is based on a designated short-term interest rate such as the London Interbank Offered Rate (LIBOR), prime rate or other benchmark. Interest rate swaps generally do not involve the delivery of securities or other principal amounts. Rather, cash payments are exchanged by the parties based on the application of the designated interest rates to a notional amount, which is the predetermined dollar principal of the trade upon which payment obligations are computed. Accordingly, an underlying fund’s current obligation or right under the swap agreement is generally equal to the net amount to be paid or received under the swap agreement based on the relative value of the position held by each party. The underlying fund will generally segregate assets with a daily value at least equal to the excess, if any, of the underlying fund’s accrued obligations under the swap agreement over the accrued amount the underlying fund is entitled to receive under the agreement, less the value of any posted margin or collateral on deposit with respect to the position.

The use of interest rate swaps involves certain risks, including losses if interest rate changes are not correctly anticipated by the underlying fund’s investment adviser. To the extent an underlying fund enters into bilaterally negotiated swap transactions, the underlying fund will enter into swap agreements only with counterparties that meet certain credit standards; however, if the counterparty’s creditworthiness deteriorates rapidly and the counterparty defaults on its obligations under the swap agreement or declares bankruptcy, the underlying fund may lose any amount it expected to receive from the counterparty. Certain interest rate swap transactions are currently subject to mandatory central clearing or may be eligible for voluntary central clearing. Because clearing interposes a central clearinghouse as the ultimate counterparty to each participant’s swap, central clearing is intended to decrease (but not eliminate) counterparty risk relative to uncleared bilateral swaps. Additionally, the term of an interest rate swap can be days, months or years and, as a result, certain swaps may be less liquid than others.

Credit default swap indices — In order to assume exposure to a diversified portfolio of credits or to hedge against existing credit risks, an underlying fund may invest in credit default swap indices (“CDXs”). A CDX is based on a portfolio of credit default swaps with similar characteristics, such as credit default swaps on high-yield bonds. In a typical CDX transaction, one party — the protection buyer — is obligated to pay the other party — the protection seller — a stream of periodic payments over the term of the contract. If a credit event, such as a default or restructuring, occurs with respect to any of the underlying reference obligations, the protection seller must pay the protection buyer the loss on those credits.

An underlying fund may enter into a CDX transaction as either protection buyer or protection seller. If the underlying fund is a protection buyer, it would pay the counterparty a periodic

American Funds Target Date Retirement Series — Page 18


 
 

 

stream of payments over the term of the contract and would not recover any of those payments if no credit events were to occur with respect to any of the underlying reference obligations. However, if a credit event did occur, the underlying fund, as a protection buyer, would have the right to deliver the referenced debt obligations or a specified amount of cash, depending on the terms of the applicable agreement, and to receive the par value of such debt obligations from the counterparty protection seller. As a protection seller, the underlying fund would receive fixed payments throughout the term of the contract if no credit events were to occur with respect to any of the underlying reference obligations. If a credit event were to occur, however, the value of any deliverable obligation received by the underlying fund, coupled with the periodic payments previously received by the underlying fund, may be less than the full notional value that the underlying fund, as a protection seller, pays to the counterparty protection buyer, effectively resulting in a loss of value to the underlying fund. Furthermore, as a protection seller, the underlying fund would effectively add leverage to its portfolio because it would have investment exposure to the notional amount of the swap transaction.

The use of CDX, like all other swap agreements, is subject to certain risks, including the risk that an underlying fund’s counterparty will default on its obligations. If such a default were to occur, any contractual remedies that the underlying fund might have may be subject to applicable bankruptcy laws, which could delay or limit the underlying fund’s recovery. Thus, if an underlying fund’s counterparty to a CDX transaction defaults on its obligation to make payments thereunder, the underlying fund may lose such payments altogether or collect only a portion thereof, which collection could involve substantial costs or delays. Certain CDX transactions are subject to mandatory central clearing or may be eligible for voluntary central clearing. Because clearing interposes a central clearinghouse as the ultimate counterparty to each participant’s swap, central clearing is intended to decrease (but not eliminate) counterparty risk relative to uncleared bilateral swaps.

Additionally, when an underlying fund invests in a CDX as a protection seller, the underlying fund will be indirectly exposed to the creditworthiness of issuers of the underlying reference obligations in the index. If the investment adviser to the underlying fund does not correctly evaluate the creditworthiness of issuers of the underlying instruments on which the CDX is based, the investment could result in losses to the underlying fund.

Pursuant to regulations and published positions of the U.S. Securities and Exchange Commission, an underlying fund’s obligations under a CDX agreement will be accrued daily and, where applicable, offset against any amounts owing to the underlying fund. In connection with CDX transactions in which an underlying fund acts as protection buyer, the underlying fund will segregate liquid assets with a value at least equal to the underlying fund’s exposure (i.e., any accrued but unpaid net amounts owed by the underlying fund to any counterparty), on a marked-to-market basis, less the value of any posted margin. When an underlying fund acts as protection seller, the underlying fund will segregate liquid assets with a value at least equal to the full notional amount of the swap, less the value of any posted margin. Such segregation is intended to ensure that the underlying fund has assets available to satisfy its obligations with respect to CDX transactions and to limit any potential leveraging of the underlying fund’s portfolio. However, segregation of liquid assets will not limit an underlying fund’s exposure to loss. To maintain this required margin, an underlying fund may also have to sell portfolio securities at disadvantageous prices, and the earmarking of liquid assets will have the effect of limiting the underlying fund’s ability to otherwise invest those assets in other securities or instruments.

American Funds Target Date Retirement Series — Page 19


 
 

 

 

Currency transactions — An underlying fund may enter into currency transactions on a spot (i.e., cash) basis at the prevailing rate in the currency exchange market to provide for the purchase or sale of a currency needed to purchase a security denominated in that currency. In addition, an underlying fund may enter into forward currency contracts to protect against changes in currency exchange rates, to increase exposure to a particular foreign currency, to shift exposure to currency fluctuations from one currency to another or to seek to increase returns. A forward currency contract is an obligation to purchase or sell a specific currency at a future date, which may be any fixed number of days from the date of the contract agreed upon by the parties, at a price set at the time of the contract. Some forward currency contracts, called non-deliverable forwards or NDFs, do not call for physical delivery of the currency and are instead settled through cash payments. Forward currency contracts are typically privately negotiated and traded in the interbank market between large commercial banks (or other currency traders) and their customers. Although forward contracts entered into by the fund will typically involve the purchase or sale of a currency against the U.S. dollar, the fund also may purchase or sell a non-U.S. currency against another non-U.S. currency.

Currency exchange rates generally are determined by forces of supply and demand in the foreign exchange markets and the relative merits of investment in different countries as viewed from an international perspective. Currency exchange rates, as well as foreign currency transactions, can also be affected unpredictably by intervention by U.S. or foreign governments or central banks or by currency controls or political developments in the United States or abroad. Such intervention or other events could prevent the fund from entering into foreign currency transactions, force the fund to exit such transactions at an unfavorable time or price or result in penalties to the fund, any of which may result in losses to the fund.

Generally, an underlying fund will not attempt to protect against all potential changes in exchange rates and the use of forward contracts does not eliminate the risk of fluctuations in the prices of the underlying securities. If the value of the underlying securities declines or the amount of the fund’s commitment increases because of changes in exchange rates, the fund may need to provide additional cash or securities to satisfy its commitment under the forward contract. An underlying fund is also subject to the risk that it may be delayed or prevented from obtaining payments owed to it under the forward contract as a result of the insolvency or bankruptcy of the counterparty with which it entered into the forward contract or the failure of the counterparty to comply with the terms of the contract.

The realization of gains or losses on foreign currency transactions will usually be a function of the investment adviser’s ability to accurately estimate currency market movements. Entering into forward currency transactions may change the underlying fund’s exposure to currency exchange rates and could result in losses to the fund if currencies do not perform as expected by the fund’s investment adviser. For example, if the underlying fund’s investment adviser increases a fund’s exposure to a foreign currency using forward contracts and that foreign currency’s value declines, a fund may incur a loss. In addition, while entering into forward currency transactions could minimize the risk of loss due to a decline in the value of the hedged currency, it could also limit any potential gain that may result from an increase in the value of the currency. See also the “Derivatives” section under "Description of certain securities, investment techniques and risks" for a general description of investment techniques and risks relating to derivatives, including certain currency forwards.

Forward currency contracts may give rise to leverage, or exposure to potential gains and losses in excess of the initial amount invested. Leverage magnifies gains and losses and could cause a fund to be subject to more volatility than if it had not been leveraged, thereby resulting in a heightened risk of loss. The underlying fund will segregate liquid assets that will be marked to market daily to meet its forward contract commitments to the extent required by the U.S. Securities and Exchange Commission (“SEC”).

American Funds Target Date Retirement Series — Page 20


 
 

 

Forward currency transactions also may affect the character and timing of income, gain, or loss recognized by the underlying fund for U.S. tax purposes. The use of forward currency contracts could result in the application of the mark-to-market provisions of the Internal Revenue Code and may cause an increase (or decrease) in the amount of taxable dividends paid by an underlying fund.

Forward commitment, when issued and delayed delivery transactions — An underlying fund may enter into commitments to purchase or sell securities at a future date. When an underlying fund agrees to purchase such securities, it assumes the risk of any decline in value of the security from the date of the agreement. If the other party to such a transaction fails to deliver or pay for the securities, the underlying fund could miss a favorable price or yield opportunity, or could experience a loss.

Certain underlying funds may enter into roll transactions, such as a mortgage dollar roll where an underlying fund sells mortgage-backed securities for delivery in the current month and simultaneously contracts to repurchase substantially similar (same type, coupon, and maturity) securities on a specified future date, at a pre-determined price. During the period between the sale and repurchase (the “roll period”), an underlying fund forgoes principal and interest paid on the mortgage-backed securities. An underlying fund is compensated by the difference between the current sales price and the lower forward price for the future purchase (often referred to as the “drop”), if any, as well as by the interest earned on the cash proceeds of the initial sale. An underlying fund could suffer a loss if the contracting party fails to perform the future transaction and an underlying fund is therefore unable to buy back the mortgage-backed securities it initially sold. An underlying fund also takes the risk that the mortgage-backed securities that it repurchases at a later date will have less favorable market characteristics than the securities originally sold (e.g., greater prepayment risk). These transactions are accounted for as purchase and sale transactions, which may increase an underlying fund’s portfolio turnover rate.

With to be announced (TBA) transactions, the particular securities (i.e., specified mortgage pools) to be delivered or received are not identified at the trade date, but are “to be announced” at a later settlement date. However, securities to be delivered must meet specified criteria, including face value, coupon rate and maturity, and be within industry-accepted “good delivery” standards.

An underlying fund will not use these transactions for the purpose of leveraging and will segregate liquid assets that will be marked to market daily in an amount sufficient to meet its payment obligations in these transactions. Although these transactions will not be entered into for leveraging purposes, to the extent an underlying fund’s aggregate commitments in connection with these transactions exceed its segregated assets, the underlying fund temporarily could be in a leveraged position (because it may have an amount greater than its net assets subject to market risk). Should market values of the underlying fund’s portfolio securities decline while the underlying fund is in a leveraged position, greater depreciation of its net assets would likely occur than if it were not in such a position. An underlying fund will not borrow money to settle these transactions and, therefore, will liquidate other portfolio securities in advance of settlement if necessary to generate additional cash to meet its obligations. After a transaction is entered into, an underlying fund may still dispose of or renegotiate the transaction. Additionally, prior to receiving delivery of securities as part of a transaction, an underlying fund may sell such securities.

Repurchase agreements — An underlying fund may enter into repurchase agreements, or “repos”, under which the underlying fund buys a security and obtains a simultaneous commitment from the seller to repurchase the security at a specified time and price. Because the security purchased constitutes collateral for the repurchase obligation, a repo may be considered a loan by the fund that is collateralized by the security purchased. Repos permit an underlying fund to maintain liquidity and earn income over periods of time as short as overnight.

American Funds Target Date Retirement Series — Page 21


 
 

 

The seller must maintain with a custodian collateral equal to at least the repurchase price, including accrued interest. In tri-party repos, a third party custodian, called a clearing bank, facilitates repo clearing and settlement, including by providing collateral management services. However, as an alternative to tri-party repos, the fund could enter into bilateral repos, where the parties themselves are responsible for settling transactions.

An underlying fund will only enter into repos involving securities of the type in which it could otherwise invest. If the seller under the repo defaults, the underlying fund may incur a loss if the value of the collateral securing the repo has declined and may incur disposition costs and delays in connection with liquidating the collateral. If bankruptcy proceedings are commenced with respect to the seller, realization of the collateral by the underlying fund may be delayed or limited.

An underlying fund may also enter into “roll” transactions. A “roll” transaction involves the sale of mortgage-backed or other securities together with a commitment to purchase similar, but not identical, securities at a later date. An underlying fund assumes the risk of price and yield fluctuations during the time of the commitment. Such fund will segregate liquid assets that will be marked to market daily in an amount sufficient to meet its payment obligations under “roll” transactions with broker-dealers.

Inflation-linked bonds — An underlying fund may invest in inflation-linked bonds issued by governments, their agencies or instrumentalities and corporations.

The principal amount of an inflation-linked bond is adjusted in response to changes in the level of an inflation index, such as the Consumer Price Index for Urban Consumers (“CPURNSA”). If the index measuring inflation falls, the principal value or coupon of these securities will be adjusted downward. Consequently, the interest payable on these securities will be reduced. Also, if the principal value of these securities is adjusted according to the rate of inflation, the adjusted principal value repaid at maturity may be less than the original principal. In the case of U.S. Treasury Inflation-Protected Securities (“TIPS”), currently the only inflation-linked security that is issued by the U.S Treasury, the principal amounts are adjusted daily based upon changes in the rate of inflation (as currently represented by the non-seasonally adjusted CPURNSA, calculated with a three-month lag). TIPS may pay interest semi-annually, equal to a fixed percentage of the inflation-adjusted principal amount. The interest rate on these bonds is fixed at issuance, but over the life of the bond this interest may be paid on an increasing or decreasing principal amount that has been adjusted for inflation. The current market value of TIPS is not guaranteed and will fluctuate. However, the U.S. government guarantees that, at maturity, principal will be repaid at the higher of the original face value of the security (in the event of deflation) or the inflation adjusted value.

Other non-U.S. sovereign governments also issue inflation-linked securities that are tied to their own local consumer price indexes and that offer similar deflationary protection. In certain of these non-U.S. jurisdictions, the repayment of the original bond principal upon the maturity of an inflation-linked bond is not guaranteed, allowing for the amount of the bond repaid at maturity to be less than par. Corporations also periodically issue inflation-linked securities tied to CPURNSA or similar inflationary indexes. While TIPS and non-U.S. sovereign inflation-linked securities are currently the largest part of the inflation-linked market, an underlying fund may invest in corporate inflation-linked securities.

The value of inflation-linked securities is expected to change in response to the changes in real interest rates. Real interest rates, in turn, are tied to the relationship between nominal interest rates and the rate of inflation. If inflation were to rise at a faster rate than nominal interest rates, real interest rates would decline, leading to an increase in value of the inflation-linked securities. In contrast, if nominal interest rates were to increase at a faster rate than inflation, real interest rates might rise, leading to a decrease in value of inflation-linked securities. There can be no assurance, however, that the value of inflation-linked securities will be directly correlated to the changes in interest rates. If interest rates rise

American Funds Target Date Retirement Series — Page 22


 
 

 

due to reasons other than inflation, investors in these securities may not be protected to the extent that the increase is not reflected in the security’s inflation measure.

The interest rate for inflation-linked bonds is fixed at issuance as a percentage of this adjustable principal. Accordingly, the actual interest income may both rise and fall as the principal amount of the bonds adjusts in response to movements of the consumer price index. For example, typically interest income would rise during a period of inflation and fall during a period of deflation.

The market for inflation-linked securities may be less developed or liquid, and more volatile, than certain other securities markets. There is a limited number of inflation-linked securities currently available for an underlying fund to purchase, making the market less liquid and more volatile than the U.S. Treasury and agency markets.

Maturity — The maturity of a debt instrument is normally its ultimate maturity date unless it is likely that a maturity shortening device (such as a call, put, refunding or redemption provision) will cause the debt instrument to be repaid. The investment adviser seeks to anticipate movements in interest rates and may adjust the maturity distribution of an underlying fund’s portfolio accordingly. Keeping in mind the underlying fund’s objective, the investment adviser may increase the underlying fund’s exposure to price volatility when it appears likely to increase current income without undue risk of capital losses. The investment adviser will consider the impact on effective maturity of potential changes in the financial condition of issuers and in market interest rates in making investment selections for the underlying fund. Under normal market conditions, longer term securities yield more than shorter term securities, but are subject to greater price fluctuations.

Reinsurance related notes and bonds — An underlying fund may invest in reinsurance related notes and bonds. These instruments, which are typically issued by special purpose reinsurance companies, transfer an element of insurance risk to the note or bond holders. For example, such a note or bond could provide that the reinsurance company would not be required to repay all or a portion of the principal value of the note or bond if losses due to a catastrophic event under the policy (such as a major hurricane) exceed certain dollar thresholds. Consequently, an underlying fund may lose the entire amount of its investment in such bonds or notes if such an event occurs and losses exceed certain dollar thresholds. In this instance, investors would have no recourse against the insurance company. These instruments may be issued with fixed or variable interest rates and rated in a variety of credit quality categories by the rating agencies.

Variable and floating rate obligations — The interest rates payable on certain securities in which an underlying fund may invest may not be fixed but may fluctuate based upon changes in market rates or credit ratings. Variable and floating rate obligations bear coupon rates that are adjusted at designated intervals, based on the then current market rates of interest or credit ratings. The rate adjustment features tend to limit the extent to which the market value of the obligations will fluctuate. When the fund holds variable or floating rate securities, a decrease in market interest rates will adversely affect the income received from such securities and the net asset value of the fund’s shares.

Lower rated debt securities — Lower rated debt securities, rated Ba1/BB+ or below by Nationally Recognized Statistical Rating Organizations, are described by the rating agencies as speculative and involve greater risk of default or price changes due to changes in the issuer’s creditworthiness than higher rated debt securities, or they may already be in default. Such securities are sometimes referred to as “junk bonds” or high yield bonds. The market prices of these securities may fluctuate more than higher quality securities and may decline significantly in periods of general economic difficulty. It may be more difficult to dispose of, and to determine the value of, lower rated debt securities. Investment grade bonds in the ratings categories A or Baa/BBB also may be more susceptible to changes in market or economic conditions than bonds rated in the highest rating categories.

American Funds Target Date Retirement Series — Page 23


 
 

 

 

Certain additional risk factors relating to debt securities are discussed below:

Sensitivity to interest rate and economic changes — Debt securities may be sensitive to economic changes, political and corporate developments, and interest rate changes. In addition, during an economic downturn or a period of rising interest rates, issuers that are highly leveraged may experience increased financial stress that could adversely affect their ability to meet projected business goals, to obtain additional financing and to service their principal and interest payment obligations. Periods of economic change and uncertainty also can be expected to result in increased volatility of market prices and yields of certain debt securities and derivative instruments. For example, during the financial crisis of 2007-2009, the Federal Reserve implemented a number of economic policies that impacted, and may continue to impact, interest rates and the market. These policies, as well as potential actions by governmental entities both in and outside of the U.S., may expose fixed-income markets to heightened volatility and may reduce liquidity for certain investments, which could cause the value of an underlying fund’s portfolio to decline.

Payment expectations — Debt securities may contain redemption or call provisions. If an issuer exercises these provisions in a lower interest rate market, an underlying fund may have to replace the security with a lower yielding security, resulting in decreased income to investors. If the issuer of a debt security defaults on its obligations to pay interest or principal or is the subject of bankruptcy proceedings, an underlying fund may incur losses or expenses in seeking recovery of amounts owed to it.

Liquidity and valuation — There may be little trading in the secondary market for particular debt securities, which may affect adversely an underlying fund’s ability to value accurately or dispose of such debt securities. Adverse publicity and investor perceptions, whether or not based on fundamental analysis, may decrease the value and/or liquidity of debt securities.

The investment adviser attempts to reduce the risks described above through diversification of an underlying fund’s portfolio and by credit analysis of each issuer, as well as by monitoring broad economic trends and corporate and legislative developments, but there can be no assurance that it will be successful in doing so.

Depositary receipts — Depositary receipts are securities that evidence ownership interests in, and represent the right to receive, a security or a pool of securities that have been deposited with a bank or trust depository. An underlying fund may invest in American Depositary Receipts (“ADRs”), European Depositary Receipts (“EDRs”), Global Depositary Receipts (“GDRs”), and other similar securities. For ADRs, the depository is typically a U.S. financial institution and the underlying securities are issued by a non-U.S. entity. For other depositary receipts, the depository may be a non-U.S. or a U.S. entity, and the underlying securities may be issued by a non-U.S. or a U.S. entity. Depositary receipts will not necessarily be denominated in the same currency as their underlying securities. Generally, ADRs are issued in registered form, denominated in U.S. dollars, and designed for use in the U.S. securities markets. Other depositary receipts, such as EDRs and GDRs, may be issued in bearer form, may be denominated in either U.S. dollars or in non-U.S. currencies, and are primarily designed for use in securities markets outside the United States. ADRs, EDRs and GDRs can be sponsored by the issuing bank or trust company or the issuer of the underlying securities. Although the issuing bank or trust company may impose charges for the collection of dividends and the conversion of such securities into the underlying securities, generally no fees are imposed on the purchase or sale of these securities other than transaction fees ordinarily involved with trading stock. Such securities may be less liquid or may trade at a lower price than the underlying securities of the issuer. Additionally, the issuers of securities underlying depositary receipts may not be obligated to timely disclose information that is considered material under the securities laws of the United States. Therefore, less information may be available regarding these issuers than about the issuers of other securities and there may not be a correlation between such information and the market value of the depositary receipts.

American Funds Target Date Retirement Series — Page 24


 
 

 

Options on U.S. Treasury Securities – An underlying fund may purchase put and call options on U.S. Treasury securities (“Treasury securities”). A put (call) option gives the underlying fund as purchaser of the option the right (but not the obligation) to sell (buy) a specified amount of Treasury securities at the exercise price until the expiration of the option. The value of a put (call) option on Treasury securities generally increases (decreases) with an increase (decrease) in prevailing interest rates. Accordingly, the underlying fund would purchase puts (calls) in anticipation of, or to protect against, an increase in interest rates. These options are listed on an exchange or traded over-the-counter (“OTC options”). Exchange-traded options have standardized exercise prices and expiration dates; OTC options are two-party contracts with negotiated exercise prices and expiration dates. OTC options differ from exchange-traded options in that OTC options are transacted with dealers directly and not through a clearing corporation (which guarantees performance). Consequently, there is a risk of non-performance by the dealer. Since no exchange is involved, OTC options are valued on the basis of a quote provided by the dealer. In the case of OTC options, there can be no assurance that a liquid secondary market will exist for any particular option at any specific time.

Loan assignments and participations — An underlying fund may invest in loans or other forms of indebtedness that represent interests in amounts owed by corporations or other borrowers (collectively “borrowers”). The investment adviser defines debt securities to include investments in loans, such as loan assignments and participations. Loans may be originated by the borrower in order to address its working capital needs, as a result of a reorganization of the borrower’s assets and liabilities (recapitalizations), to merge with or acquire another company (mergers and acquisitions), to take control of another company (leveraged buy-outs), to provide temporary financing (bridge loans), or for other corporate purposes. Most corporate loans are variable or floating rate obligations.

Some loans may be secured in whole or in part by assets or other collateral. In other cases, loans may be unsecured or may become undersecured by declines in the value of assets or other collateral securing such loan. The greater the value of the assets securing the loan the more the lender is protected against loss in the case of nonpayment of principal or interest. Loans made to highly leveraged borrowers may be especially vulnerable to adverse changes in economic or market conditions and may involve a greater risk of default.

Some loans may represent revolving credit facilities or delayed funding loans, in which a lender agrees to make loans up to a maximum amount upon demand by the borrower during a specified term. These commitments may have the effect of requiring the underlying fund to increase its investment in a company at a time when it might not otherwise decide to do so (including at a time when the company’s financial condition makes it unlikely that such amounts will be repaid). To the extent that the underlying fund is committed to advance additional funds, the underlying fund will segregate assets determined to be liquid in an amount sufficient to meet such commitments.

Some loans may represent debtor-in-possession financings (commonly known as “DIP financings”). DIP financings are arranged when an entity seeks the protections of the bankruptcy court under Chapter 11 of the U.S. Bankruptcy Code. These financings allow the entity to continue its business operations while reorganizing under Chapter 11. Such financings constitute senior liens on unencumbered collateral (i.e., collateral not subject to other creditors’ claims). There is a risk that the entity will not emerge from Chapter 11 and will be forced to liquidate its assets under Chapter 7 of the U.S. Bankruptcy Code. In the event of liquidation, the underlying fund’s only recourse will be against the collateral securing the DIP financing.

The investment adviser generally makes investment decisions based on publicly available information, but may rely on non-public information if necessary. Borrowers may offer to provide lenders with material, non-public information regarding a specific loan or the borrower in general. The investment adviser generally chooses not to receive this information. As a result, the investment adviser may be at a disadvantage compared to other investors that may receive such information. The investment adviser’s decision not to receive material, non-public information may impact the investment adviser’s

American Funds Target Date Retirement Series — Page 25


 
 

 

ability to assess a borrower’s requests for amendments or waivers of provisions in the loan agreement. However, the investment adviser may on a case-by-case basis decide to receive such information when it deems prudent. In these situations the investment adviser may be restricted from trading the loan or buying or selling other debt and equity securities of the borrower while it is in possession of such material, non-public information, even if such loan or other security is declining in value.

An underlying fund normally acquires loan obligations through an assignment from another lender, but also may acquire loan obligations by purchasing participation interests from lenders or other holders of the interests. When the underlying fund purchases assignments, it acquires direct contractual rights against the borrower on the loan. An underlying fund acquires the right to receive principal and interest payments directly from the borrower and to enforce its rights as a lender directly against the borrower. However, because assignments are arranged through private negotiations between potential assignees and potential assignors, the rights and obligations acquired by an underlying fund as the purchaser of an assignment may differ from, and be more limited than, those held by the assigning lender. Loan assignments are often administered by a financial institution that acts as agent for the holders of the loan, and the underlying fund may be required to receive approval from the agent and/or borrower prior to the purchase of a loan. Risks may also arise due to the inability of the agent to meet its obligations under the loan agreement.

Loan participations are loans or other direct debt instruments that are interests in amounts owed by the borrower to another party. They may represent amounts owed to lenders or lending syndicates, to suppliers of goods or services, or to other parties. An underlying fund will have the right to receive payments of principal, interest and any fees to which it is entitled only from the lender selling the participation and only upon receipt by the lender of the payments from the borrower. In connection with purchasing participations, the underlying fund generally will have no right to enforce compliance by the borrower with the terms of the loan agreement relating to the loan, nor any rights of set-off against the borrower. In addition, the underlying fund may not directly benefit from any collateral supporting the loan in which it has purchased the participation and the underlying fund will have to rely on the agent bank or other financial intermediary to apply appropriate credit remedies. As a result, the underlying fund will be subject to the credit risk of both the borrower and the lender that is selling the participation. In the event of the insolvency of the lender selling a participation, an underlying fund may be treated as a general creditor of the lender and may not benefit from any set-off between the lender and the borrower.

Loan assignments and participations are generally subject to legal or contractual restrictions on resale and are not currently listed on any securities exchange or automatic quotation system. Risks may arise due to delayed settlements of loan assignments and participations. The investment adviser expects that most loan assignments and participations purchased for an underlying fund will trade on a secondary market. However, although secondary markets for investments in loans are growing among institutional investors, a limited number of investors may be interested in a specific loan. It is possible that loan participations, in particular, could be sold only to a limited number of institutional investors. If there is no active secondary market for a particular loan, it may be difficult for the investment adviser to sell the fund’s interest in such loan at a price that is acceptable to it and to obtain pricing information on such loan.

Investments in loan participations and assignments present the possibility that an underlying fund could be held liable as a co-lender under emerging legal theories of lender liability. In addition, if the loan is foreclosed, an underlying fund could be part owner of any collateral and could bear the costs and liabilities of owning and disposing of the collateral. In addition, some loan participations and assignments may not be rated by major rating agencies and may not be protected by securities laws.

Real estate investment trusts — Real estate investment trusts ("REITs"), which primarily invest in real estate or real estate-related loans, may issue equity or debt securities. Equity REITs own real estate properties, while mortgage REITs hold construction, development and/or long-term mortgage loans.

American Funds Target Date Retirement Series — Page 26


 
 

 

The values of REITs may be affected by changes in the value of the underlying property of the trusts, the creditworthiness of the issuer, property taxes, interest rates, tax laws and regulatory requirements, such as those relating to the environment. Both types of REITs are dependent upon management skill and the cash flows generated by their holdings, the real estate market in general and the possibility of failing to qualify for any applicable pass-through tax treatment or failing to maintain any applicable exemptive status afforded under relevant laws.

Cash and cash equivalents — An underlying fund may hold cash or invest in cash equivalents. Cash equivalents include, but are not limited to: (a) commercial paper; (b) short-term bank obligations (for example, certificates of deposit, bankers’ acceptances (time drafts on a commercial bank where the bank accepts an irrevocable obligation to pay at maturity)) or bank notes; (c) savings association and savings bank obligations (for example, bank notes and certificates of deposit issued by savings banks or savings associations); (d) securities of the U.S. government, its agencies or instrumentalities that mature, or that may be redeemed, in one year or less; (e) higher quality corporate bonds and notes that mature, or that may be redeemed, in one year or less; and (f) shares of money market funds. Cash and cash equivalents may be denominated in U.S. dollars, non-U.S. currencies or multinational currency units.

Commercial paper — An underlying fund may purchase commercial paper. Commercial paper refers to short-term promissory notes issued by a corporation to finance its current operations. Such securities normally have maturities of thirteen months or less and, though commercial paper is often unsecured, commercial paper may be supported by letters of credit, surety bonds or other forms of collateral. Maturing commercial paper issuances are usually repaid by the issuer from the proceeds of new commercial paper issuances. As a result, investment in commercial paper is subject to rollover risk, or the risk that the issuer cannot issue enough new commercial paper to satisfy its outstanding commercial paper. Like all fixed-income securities, commercial paper prices are susceptible to fluctuations in interest rates. If interest rates rise, commercial paper prices will decline and vice versa. However, the short-term nature of a commercial paper investment makes it less susceptible to volatility than many other fixed-income securities because interest rate risk typically increases as maturity lengths increase. Commercial paper tends to yield smaller returns than longer-term corporate debt because securities with shorter maturities typically have lower effective yields than those with longer maturities. As with all fixed-income securities, there is a chance that the issuer will default on its commercial paper obligations and commercial paper may become illiquid or suffer from reduced liquidity in these or other situations.

Commercial paper in which an underlying fund may invest includes commercial paper issued in reliance on the exemption from registration afforded by Section 4(a)(2) of the 1933 Act. Section 4(a)(2) commercial paper has substantially the same price and liquidity characteristics as commercial paper generally, except that the resale of Section 4(a)(2) commercial paper is limited to institutional investors who agree that they are purchasing the paper for investment purposes and not with a view to public distribution. Technically, such a restriction on resale renders Section 4(a)(2) commercial paper a restricted security under the 1933 Act. In practice, however, Section 4(a)(2) commercial paper typically can be resold as easily as any other unrestricted security held by the fund. Accordingly, Section 4(a)(2) commercial paper has been generally determined to be liquid under procedures adopted by the underlying fund’s board of trustees.

Restricted or illiquid securities — An underlying fund may purchase securities subject to restrictions on resale. Restricted securities may only be sold pursuant to an exemption from registration under the Securities Act of 1933, as amended (the “1933 Act”), or in a registered public offering. Where registration is required, the holder of a registered security may be obligated to pay all or part of the registration expense and a considerable period may elapse between the time it decides to seek registration and the time it may be permitted to sell a security under an effective registration statement. Difficulty in selling such securities may result in a loss to the underlying fund or cause it to incur additional administrative costs.

American Funds Target Date Retirement Series — Page 27


 
 

 

Some fund holdings (including some restricted securities) may be deemed illiquid if the fund expects that a reasonable portion of the holding cannot be sold in seven calendar days or less without the sale significantly changing the market value of the investment. The determination of whether a holding is considered illiquid is made by the underlying fund’s adviser under a liquidity risk management program adopted by the underlying fund’s board and administered by the underlying fund’s adviser. The fund may incur significant additional costs in disposing of illiquid securities.

Investments in registered open-end investment companies and unit investment trusts — An underlying fund may not acquire securities of open-end investment companies or investment unit trusts registered under the Investment Company Act of 1940 in reliance on Section 12(d)(1)(F) or 12(d)(1)(G) of the Investment Company Act.

Cybersecurity risks — With the increased use of technologies such as the Internet to conduct business, the fund and each of the underlying funds have become potentially more susceptible to operational and information security risks through breaches in cybersecurity. In general, a breach in cybersecurity can result from either a deliberate attack or an unintentional event. Cybersecurity breaches may involve, among other things, infection by computer viruses or other malicious software code or unauthorized access to a fund’s digital information systems, networks or devices through “hacking” or other means, in each case for the purpose of misappropriating assets or sensitive information (including, for example, personal shareholder information), corrupting data or causing operational disruption or failures in the physical infrastructure or operating systems that support the fund. Cybersecurity risks also include the risk of losses of service resulting from external attacks that do not require unauthorized access to a fund’s systems, networks or devices. For example, denial-of-service attacks on the investment adviser’s or an affiliate’s website could effectively render a fund’s network services unavailable to fund shareholders and other intended end-users. Any such cybersecurity breaches or losses of service may cause a fund to lose proprietary information, suffer data corruption or lose operational capacity, which, in turn, could cause the fund to incur regulatory penalties, reputational damage, additional compliance costs associated with corrective measures and/or financial loss. While the fund, each of the underlying funds and their investment adviser have established business continuity plans and risk management systems designed to prevent or reduce the impact of cybersecurity attacks, there are inherent limitations in such plans and systems due in part to the ever-changing nature of technology and cybersecurity attack tactics, and there is a possibility that certain risks have not been adequately identified or prepared for.

In addition, cybersecurity failures by or breaches of a fund’s or an underlying fund’s third-party service providers (including, but not limited to, a fund’s investment adviser, subadviser, transfer agent, custodian, administrators and other financial intermediaries, as applicable) may disrupt the business operations of the service providers and of the fund, potentially resulting in financial losses, the inability of fund shareholders to transact business with the fund and of the fund to process transactions, the inability of the fund to calculate its net asset value, violations of applicable privacy and other laws, rules and regulations, regulatory fines, penalties, reputational damage, reimbursement or other compensatory costs and/or additional compliance costs associated with implementation of any corrective measures. The fund, each underlying fund and their respective shareholders could be negatively impacted as a result of any such cybersecurity breaches, and there can be no assurance that a fund will not suffer losses relating to cybersecurity attacks or other informational security breaches affecting the fund’s third-party service providers in the future, particularly as a fund cannot control any cybersecurity plans or systems implemented by such service providers.

Cybersecurity risks may also impact issuers of securities in which the underlying funds invest, which may cause an underlying fund’s investments in such issuers to lose value.

* * * * * *

American Funds Target Date Retirement Series — Page 28


 
 

 

Portfolio turnover — Portfolio changes will be made without regard to the length of time particular investments may have been held. Short-term trading profits are not the fund’s objective, and changes in its investments are generally accomplished gradually, though short-term transactions may occasionally be made.

A fund’s portfolio turnover rate would equal 100% if each security in the fund’s portfolio were replaced once per year. See “Financial Highlights” in the prospectus for the fund’s annual portfolio turnover rate for each of the last five fiscal years where available.

     
  Fiscal year Portfolio turnover rate
American Funds 2060 Target Date Retirement Fund* 2018 3%
2017 4
American Funds 2055 Target Date Retirement Fund* 2018 0
2017 1
American Funds 2050 Target Date Retirement Fund 2018 0
2017 0
American Funds 2045 Target Date Retirement Fund 2018 0
2017 0
American Funds 2040 Target Date Retirement Fund 2018 0
2017 0
American Funds 2035 Target Date Retirement Fund 2018 0
2017 0
American Funds 2030 Target Date Retirement Fund 2018 0
2017 0
American Funds 2025 Target Date Retirement Fund 2018 0
2017 0
American Funds 2020 Target Date Retirement Fund* 2018 2
2017 1
American Funds 2015 Target Date Retirement Fund* 2018 7
2017 4
American Funds 2010 Target Date Retirement Fund* 2018 8
2017 5

*  The increase or decrease in turnover was due to increased or decreased trading activity during the period.

American Funds Target Date Retirement Series — Page 29


 
 

 

 

Fund policies

All percentage limitations in the following fund policies are considered at the time securities are purchased and are based on each fund’s net assets unless otherwise indicated. None of the following policies involving a maximum percentage of assets will be considered violated unless the excess occurs immediately after, and is caused by, an acquisition by the fund. In managing a fund, the fund’s investment adviser may apply more restrictive policies than those listed below.

Fundamental policies — The series has adopted the following policies with respect to each fund, which may not be changed without approval by holders of a majority of the fund’s outstanding shares. Such majority is currently defined in the Investment Company Act of 1940, as amended (the “1940 Act”), as the vote of the lesser of (a) 67% or more of the voting securities present at a shareholder meeting, if the holders of more than 50% of the outstanding voting securities are present in person or by proxy, or (b) more than 50% of the outstanding voting securities.

1. Except as permitted by (i) the 1940 Act and the rules and regulations thereunder, or other successor law governing the regulation of registered investment companies, or interpretations or modifications thereof by the U.S. Securities and Exchange Commission (“SEC”), SEC staff or other authority of competent jurisdiction, or (ii) exemptive or other relief or permission from the SEC, SEC staff or other authority of competent jurisdiction, a fund may not:

a. Borrow money;

b. Issue senior securities;

c. Underwrite the securities of other issuers;

d. Purchase or sell real estate or commodities;

e. Make loans; or

f. Purchase the securities of any issuer if, as a result of such purchase, such fund’s investments would be concentrated in any particular industry.

2. A fund may not invest in companies for the purpose of exercising control or management.

American Funds Target Date Retirement Series — Page 30


 
 

 

 

Additional information about each fund’s policies — The information below is not part of the funds’ fundamental or nonfundamental policies. This information is intended to provide a summary of what is currently required or permitted by the 1940 Act and the rules and regulations thereunder, or by the interpretive guidance thereof by the SEC or SEC staff, for particular fundamental policies of the funds. Information is also provided regarding the fund’s current intention with respect to certain investment practices permitted by the 1940 Act.

For purposes of fundamental policy 1a, each fund may borrow money in amounts of up to 33-1/3% of its total assets from banks for any purpose. Additionally, each fund may borrow up to 5% of its total assets from banks or other lenders for temporary purposes (a loan is presumed to be for temporary purposes if it is repaid within 60 days and is not extended or renewed). The percentage limitations in this policy are considered at the time of borrowing and thereafter.

For purposes of fundamental policy 1b, a senior security does not include any promissory note or evidence of indebtedness if such loan is for temporary purposes only and in an amount not exceeding 5% of the value of the total assets of a fund at the time the loan is made (a loan is presumed to be for temporary purposes if it is repaid within 60 days and is not extended or renewed). Further, to the extent a fund covers its commitments under certain types of agreements and transactions, including derivatives, mortgage-dollar-roll transactions, sale-buybacks, when-issued, delayed-delivery, or forward commitment transactions, and other similar trading practices, by segregating or earmarking liquid assets equal in value to the amount of such fund’s commitment, such agreement or transaction will not be considered a senior security by such fund.

For purposes of fundamental policy 1c, the policy will not apply to a fund to the extent such fund may be deemed an underwriter within the meaning of the 1933 Act in connection with the purchase and sale of fund portfolio securities in the ordinary course of pursuing its investment objectives and strategies.

For purposes of fundamental policy 1e, each fund may not lend more than 33-1/3% of its total assets, provided that this limitation shall not apply to the funds’ purchase of debt obligations.

For purposes of fundamental policy 1f, each fund may not invest more than 25% of its total assets in the securities of issuers in a particular industry. For purposes of calculating compliance with restrictions on industry concentrations, each fund will look through to the securities held by the underlying funds in which it invests. This policy does not apply to investments in securities of the U.S. Government, its agencies or government sponsored enterprises or repurchase agreements with respect thereto. Each fund may, however, invest substantially all of its assets in one or more investment companies managed by Capital Research and Management Company.

American Funds Target Date Retirement Series — Page 31


 
 

 

 

Management of the series

Board of trustees and officers

Independent trustees1

The series’ nominating and governance committee and board select independent trustees with a view toward constituting a board that, as a body, possesses the qualifications, skills, attributes and experience to appropriately oversee the actions of the series’ service providers, decide upon matters of general policy and represent the long-term interests of fund shareholders. In doing so, they consider the qualifications, skills, attributes and experience of the current board members, with a view toward maintaining a board that is diverse in viewpoint, experience, education and skills.

The series seeks independent trustees who have high ethical standards and the highest levels of integrity and commitment, who have inquiring and independent minds, mature judgment, good communication skills, and other complementary personal qualifications and skills that enable them to function effectively in the context of the series’ board and committee structure and who have the ability and willingness to dedicate sufficient time to effectively fulfill their duties and responsibilities.

Each independent trustee has a significant record of accomplishments in governance, business, not-for-profit organizations, government service, academia, law, accounting or other professions. Although no single list could identify all experience upon which the series’ independent trustees draw in connection with their service, the following table summarizes key experience for each independent trustee. These references to the qualifications, attributes and skills of the trustees are pursuant to the disclosure requirements of the SEC, and shall not be deemed to impose any greater responsibility or liability on any trustee or the board as a whole. Notwithstanding the accomplishments listed below, none of the independent trustees is considered an “expert” within the meaning of the federal securities laws with respect to information in the series’ registration statement.

American Funds Target Date Retirement Series — Page 32


 
 

 

 

         
Name, year of birth and position with series (year first elected as a trustee2) Principal occupation(s)
during the past five years
Number of
portfolios in fund complex
overseen
by
trustee
Other directorships3 held
by trustee during the past five years
Other relevant experience
William H. Baribault, 1945
Trustee (2009)
CEO and President, Richard Nixon Foundation; Chairman of the Board and CEO, Oakwood Enterprises (private investment and consulting) 81 General Finance Corporation

·  Service as chief executive officer for multiple companies

·  Corporate board experience

·  Service on advisory and trustee boards for charitable, educational and nonprofit organizations

James G. Ellis, 1947
Trustee (2010)
Dean and Professor of Marketing, Marshall School of Business, University of Southern California 91

Mercury General Corporation

Former director of Quiksilver, Inc. (until 2014)

·  Service as chief executive officer for multiple companies

·  Corporate board experience

·  Service on advisory and trustee boards for charitable, municipal and nonprofit organizations

·  MBA

Nariman Farvardin, 1956
Trustee (2018)
President, Stevens Institute of Technology 78 Former director of JPMorgan Value Opportunities Fund, Inc. (until 2014)

·  Senior management experience, educational institution

·  Corporate board experience

·  Professor, electrical and computer engineering

·  Service on advisory boards and councils for educational, non-profit and governmental organizations

·  MS, PhD, electrical engineering

American Funds Target Date Retirement Series — Page 33


 
 

 

         
Name, year of birth and position with series (year first elected as a trustee2) Principal occupation(s)
during the past five years
Number of
portfolios in fund complex
overseen
by
trustee
Other directorships3 held
by trustee during the past five years
Other relevant experience
Mary Davis Holt, 1950
Trustee (2015-2016; 2017)
Principal, Mary Davis Holt Enterprises, LLC (leadership development consulting); former Partner, Flynn Heath Holt Leadership, LLC (leadership consulting); former COO, Time Life Inc. (1993–2003) 78 None

·  Service as chief operations officer, global media company

·  Senior corporate management experience

·  Corporate board experience

·  Service on advisory and trustee boards for educational, business and non-profit organizations

·  MBA

R. Clark Hooper, 1946
Trustee (2010)
Private investor 81 Former director of JPMorgan Value Opportunities Fund, Inc. (until 2014); The Swiss Helvetia Fund, Inc. (until 2016)

·  Senior regulatory and management experience, National Association of Securities Dealers (now FINRA)

·  Service on trustee boards for charitable, educational and nonprofit organizations

Merit E. Janow, 1958
Trustee (2007)
Dean and Professor, Columbia University, School of International and Public Affairs 80

MasterCard Incorporated; Trimble Inc.

Former director of The NASDAQ Stock Market LLC (until 2016)

·  Service with Office of the U.S. Trade Representative and U.S. Department of Justice

·  Corporate board experience

·  Service on advisory and trustee boards for charitable, educational and nonprofit organizations

·  Experience as corporate lawyer

·  JD

American Funds Target Date Retirement Series — Page 34


 
 

 

         
Name, year of birth and position with series (year first elected as a trustee2) Principal occupation(s)
during the past five years
Number of
portfolios in fund complex
overseen
by
trustee
Other directorships3 held
by trustee during the past five years
Other relevant experience
Laurel B. Mitchell, PhD, 1955
Trustee (2010)
Chair, California Jump$tart Coalition for Personal Financial Literacy; Part-time faculty, Pomona College; Professor Emerita, University of Redlands; former Distinguished Professor of Accounting, University of Redlands; former Director, Accounting Program, University of Redlands 78 None

·  Professor at multiple universities

·  Service in the Office of Chief Accountant and Enforcement Division of the U.S. Securities and Exchange Commission

·  Experience in corporate management and public accounting

·  Service on advisory and trustee boards for charitable, educational and nonprofit organizations

·  PhD, accounting

·  Formerly licensed as CPA

Margaret Spellings, 1957
Chairman of the Board (Independent and Non-Executive) (2010)
President, The University of North Carolina; former President, George W. Bush Foundation 82 Former director of ClubCorp Holdings, Inc. (until 2017)

·  Former U.S. Secretary of Education, U.S. Department of Education

·  Former Assistant to the President for Domestic Policy, The White House

·  Former senior advisor to the Governor of Texas

·  Service on advisory and trustee boards for charitable and nonprofit organizations

Alexandra Trower, 1964
Trustee (2018)
Executive Vice President, Global Communications and Corporate Officer, The Estée Lauder Companies 77 None

·  Service on trustee boards for charitable and nonprofit organizations

·  Senior corporate management experience

·  Branding

American Funds Target Date Retirement Series — Page 35


 
 

 

 

Interested trustee(s)4,5

Interested trustees have similar qualifications, skills and attributes as the independent trustees. Interested trustees are senior executive officers and/or directors of Capital Research and Management Company or its affiliates. Such management roles with the series’ service providers also permit the interested trustees to make a significant contribution to the series’ board.

       
Name, year of birth
and position with series
(year first elected
as a trustee/officer2)
Principal occupation(s)
during the
past five years
and positions
held with affiliated
entities or the
Principal Underwriter
of the series
Number of
portfolios in fund complex
overseen
by trustee
Other
directorships3
held by trustee
during the
past five years
Bradley J. Vogt, 1965
President and Trustee (2012)
Partner – Capital Research Global Investors, Capital Research and Management Company; Director, The Capital Group Companies, Inc.* 29 None
Michael C. Gitlin, 1970
Trustee (2019)
Partner – Capital Fixed Income Investors, Capital Research and Management Company; Director, The Capital Group Companies, Inc.*; served as Head of Fixed Income at a large investment management firm prior to joining Capital Research and Management Company in 2015 77 None

Other officers5

   
Name, year of birth
and position with series
(year first elected
as an officer2)
Principal occupation(s) during the past five years
and positions held with affiliated entities
or the Principal Underwriter of the series
Walter L. Burkley, 1966
Executive Vice President (2018)
Senior Vice President and Senior Counsel – Fund Business Management Group, Capital Research and Management Company; Director, Capital Research Company*
Alan N. Berro, 1960
Senior Vice President (2007)
Partner – Capital World Investors, Capital Research and Management Company; Director, Capital Research and Management Company
Joanna F. Jonsson, 1963
Senior Vice President (2014)
Partner – Capital World Investors, Capital Research and Management Company; Partner – Capital World Investors, Capital Bank and Trust Company*; Director, Capital Research and Management Company; Director, The Capital Group Companies, Inc.*
James B. Lovelace, 1956
Senior Vice President (2007)
Partner – Capital Research Global Investors, Capital Research and Management Company; Director, Capital Research and Management Company
Wesley Phoa, 1966
Senior Vice President (2012)
Partner – Capital Fixed Income Investors, Capital Research and Management Company; Partner – Capital Fixed Income Investors, Capital Bank and Trust Company*
John Smet, 1956
Senior Vice President (20)
Partner – Capital Fixed Income Investors, Capital Research and Management Company; Director, Capital Research and Management Company
 

American Funds Target Date Retirement Series — Page 36


 
 

 

   
Name, year of birth
and position with series
(year first elected
as an officer2)
Principal occupation(s) during the past five years
and positions held with affiliated entities
or the Principal Underwriter of the series
Andrew B. Suzman, 1967
Senior Vice President (2012)
Partner – Capital World Investors, Capital Research and Management Company
Richard M. Lang, 1969
Vice President (2015)
Senior Vice President, American Funds Distributors, Inc.*
Maria Manotok, 1974
Vice President (2010)
Senior Vice President and Senior Counsel – Fund Business Management Group, Capital Research and Management Company; Director, Capital Guardian Trust Company*
Steven I. Koszalka, 1964
Secretary (2006)
Vice President – Fund Business Management Group, Capital Research and Management Company
Gregory F. Niland, 1971
Treasurer (2007)
Vice President - Investment Operations, Capital Research and Management Company
Susan K. Countess, 1966
Assistant Secretary (2014)
Associate – Fund Business Management Group, Capital Research and Management Company
Brian C. Janssen, 1972
Assistant Treasurer (2015)
Vice President – Investment Operations, Capital Research and Management Company
Dori Laskin, 1951
Assistant Treasurer (2010)
Vice President – Investment Operations, Capital Research and Management Company

* Company affiliated with Capital Research and Management Company.

1 The term independent trustee refers to a trustee who is not an “interested person” of the series within the meaning of the 1940 Act.

Trustees and officers of the series serve until their resignation, removal or retirement.

3 This includes all directorships/trusteeships (other than those in the American Funds or other funds managed by Capital Research and Management Company or its affiliates) that are held by each trustee as a director/trustee of a public company or a registered investment company. Unless otherwise noted, all directorships/trusteeships are current.

4 The term interested trustee refers to a trustee who is an “interested person” of the series within the meaning of the 1940 Act, on the basis of his or her affiliation with the series’ investment adviser, Capital Research and Management Company, or affiliated entities (including the series’ principal underwriter).

5  All of the trustees and/or officers listed, with the exception of Richard M. Lang, are officers and/or directors/trustees of one or more of the other funds for which Capital Research and Management Company serves as investment adviser.

The address for all trustees and officers of the series is 333 South Hope Street, 55th Floor, Los Angeles, California 90071, Attention: Secretary.

American Funds Target Date Retirement Series — Page 37


 
 

 

 

Fund shares owned by trustees as of December 31, 2017:

         
Name Dollar range1,2
of fund
shares owned
in series
Aggregate
dollar range1
of shares
owned in
all funds
in the
American Funds
family overseen
by trustee
Dollar
range1,2 of
independent
trustees
deferred compensation3 allocated
to fund
Aggregate
dollar
range1,2 of
independent
trustees
deferred
compensation3 allocated to
all funds
within
American Funds
family overseen
by trustee
Independent trustees
William H. Baribault $50,001 – $100,0004 Over $100,000 $50,001 – $100,000 $50,001 – $100,000
James G. Ellis None4 Over $100,000 N/A N/A
Nariman Farvardin5 $50,001 – $100,0004 Over $100,000 N/A Over $100,000
Mary Davis Holt None4 Over $100,000 N/A N/A
R. Clark Hooper $50,001 – $100,0004 Over $100,000 N/A Over $100,000
Merit E. Janow $1 – $10,0004 Over $100,000 N/A N/A
Laurel B. Mitchell $50,001 – $100,0004 Over $100,000 $10,001 – $50,000 Over $100,000
Margaret Spellings None4 Over $100,000 N/A Over $100,000
Alexandra Trower5 N/A4 $10,001 – $50,000 N/A N/A

American Funds Target Date Retirement Series — Page 38


 
 

 

     
 
Name Dollar range1,2
of fund
shares owned
in series
Aggregate
dollar range1
of shares
owned in
all funds
in the
American Funds
family overseen
by trustee
Interested trustees
Bradley J. Vogt Over $100,000 Over $100,000
Michael C. Gitlin6 Over $100,0007 Over $100,000
 

1 Ownership disclosure is made using the following ranges: None; $1 – $10,000; $10,001 – $50,000; $50,001 – $100,000; and Over $100,000. The amounts listed for interested trustees include shares owned through The Capital Group Companies, Inc. retirement plan and 401(k) plan.

2  N/A indicates that the listed individual, as of December 31, 2017, was not a trustee of a particular fund, did not allocate deferred compensation to the fund or did not participate in the deferred compensation plan.

3 Eligible trustees may defer their compensation under a nonqualified deferred compensation plan. Amounts deferred by the trustee accumulate at an earnings rate determined by the total return of one or more American Funds as designated by the trustee.

4 Shares of the funds in the series are only available through tax-favored retirement plans and IRAs. The role these funds would play in a trustee’s investment portfolio will vary and depend on a number of factors including tax, retirement plan coverage and plan terms, and other retirement planning considerations. A trustee may have exposure to the funds in the series through an allocation of some or all of his or her nonqualified deferred compensation account.

5  Ms. Trower and Dr. Farvardin were elected to the board effective January 1, 2018.

6  Mr. Gitlin was elected to the board effective January 1, 2019.

7  Information is as of June 30, 2018.

Trustee compensation — No compensation is paid by the series to any officer or trustee who is a director, officer or employee of the investment adviser or its affiliates. Except for the independent trustees listed in the “Board of trustees and officers — Independent trustees” table under the “Management of the series” section in this statement of additional information, all other officers and trustees of the series are directors, officers or employees of the investment adviser or its affiliates. The boards of the series and other funds advised by the investment adviser typically meet either individually or jointly with the boards of one or more other such funds with substantially overlapping board membership (in each case referred to as a “board cluster”). The series typically pays each independent trustee an annual fee, which ranges from $16,060 to $35,091, based primarily on the total number of board clusters on which that independent trustee serves.

In addition, the series generally pays independent trustees attendance and other fees for meetings of the board and its committees. Board and committee chairs receive additional fees for their services.

Independent trustees also receive attendance fees for certain special joint meetings and information sessions with directors and trustees of other groupings of funds advised by the investment adviser. The series and the other funds served by each independent trustee each pay an equal portion of these attendance fees.

No pension or retirement benefits are accrued as part of series expenses. Independent trustees may elect, on a voluntary basis, to defer all or a portion of their fees through a deferred compensation plan in effect for the series. The series also reimburses certain expenses of the independent trustees.

American Funds Target Date Retirement Series — Page 39


 
 

 

 

Trustee compensation earned during the fiscal year ended October 31, 2018:

       
Name Aggregate compensation
(including voluntarily
deferred compensation1)
from the series
Total compensation (including
voluntarily deferred
compensation1)
from all funds managed by
Capital Research and
Management
Company or its affiliates
William H. Baribault2 $39,728 $389,625
James G. Ellis 39,579 396,125
Nariman Farvardin2
(service began January 1, 2018)
30,085 296,775
Leonard R. Fuller2
(retired December 31, 2018)
38,643 384,250
Mary Davis Holt 39,212 332,775
R. Clark Hooper2 45,435 466,331
Merit E. Janow 38,394 366,250
Laurel B. Mitchell2 51,553 302,750
Frank M. Sanchez
(retired December 31, 2018)
49,907 291,750
Margaret Spellings2 33,457 440,781
Alexandra Trower2
(service began January 1, 2018)
39,509 218,625

Amounts may be deferred by eligible trustees under a nonqualified deferred compensation plan adopted by the series in 2007. Deferred amounts accumulate at an earnings rate determined by the total return of one or more American Funds as designated by the trustees. Compensation shown in this table for the fiscal year ended October 31, 2018 does not include earnings on amounts deferred in previous fiscal years. See footnote 2 to this table for more information.

2  Since the deferred compensation plan’s adoption, the total amount of deferred compensation accrued by the series (plus earnings thereon) through the end of the 2018 fiscal year for participating trustees is as follows: William H. Baribault ($3,029), Nariman Farvardin ($28,602), Leonard R. Fuller ($41,421), R. Clark Hooper ($18,313), Laurel B. Mitchell ($22,617), Margaret Spellings ($39,310) and Alexandra Trower ($37,366). Amounts deferred and accumulated earnings thereon are not funded and are general unsecured liabilities of the series until paid to the trustees.

Series organization and the board of trustees — The series, an open-end, diversified management investment company, was organized as a Maryland corporation on November 6, 2006, and reorganized as a Delaware statutory trust on January 1, 2011. All series operations are supervised by the series’ board of trustees which meets periodically and performs duties required by applicable state and federal laws.

Delaware law charges trustees with the duty of managing the business affairs of the trust. Trustees are considered to be fiduciaries of the trust and owe duties of care and loyalty to the trust and its shareholders.

Independent board members are paid certain fees for services rendered to the series as described above. They may elect to defer all or a portion of these fees through a deferred compensation plan in effect for the series.

The series currently consists of separate funds which have separate assets and liabilities, and invest in separate investment portfolios. The board of trustees may create additional funds in the future. Income, direct liabilities and direct operating expenses of a fund will be allocated directly to that fund

American Funds Target Date Retirement Series — Page 40


 
 

 

and general liabilities and expenses of the series will be allocated among the funds in proportion to the total net assets of each fund.

Each fund has several different classes of shares. Shares of each class represent an interest in the same investment portfolio. Each class has pro rata rights as to voting, redemption, dividends and liquidation, except that each class bears different distribution expenses and may bear different transfer agent fees and other expenses properly attributable to the particular class as approved by the board of trustees and set forth in the series’ rule 18f-3 Plan. Each class’ shareholders have exclusive voting rights with respect to the respective class’ rule 12b-1 plans adopted in connection with the distribution of shares and on other matters in which the interests of one class are different from interests in another class. Shares of all funds and classes of the series vote together on matters that affect all funds and share classes in substantially the same manner. Each fund or share class votes separately on matters that affect that fund or class alone. In addition, the trustees have the authority to establish new funds and classes of shares, and to split or combine outstanding shares into a greater or lesser number, without shareholder approval.

The series does not hold annual meetings of shareholders. However, significant matters that require shareholder approval, such as certain elections of board members or a change in a fundamental investment policy, will be presented to shareholders at a meeting called for such purpose. Shareholders have one vote per share owned.

The series’ declaration of trust and by-laws, as well as separate indemnification agreements with independent trustees, provide in effect that, subject to certain conditions, the series will indemnify its officers and trustees against liabilities or expenses actually and reasonably incurred by them relating to their service to the series. However, trustees are not protected from liability by reason of their willful misfeasance, bad faith, gross negligence or reckless disregard of the duties involved in the conduct of their office.

Certain trustees and officers of the series may also serve in similar positions with some of the underlying funds. Thus, if the interests of one of the funds in the series and the underlying funds were ever to diverge, it is possible that an issue could arise and affect how the trustees and officers fulfill their fiduciary duties to that fund. The series has been structured to minimize these concerns. However, conceivably, a situation could occur where proper action for one of the funds in the series could be adverse to the interests of an underlying fund, or the reverse. If such a possibility arises, the trustees and officers of the affected funds and Capital Research and Management Company will carefully analyze the situation and take all steps they believe reasonable to minimize and, where possible, eliminate the potential issue.

Removal of trustees by shareholders — At any meeting of shareholders, duly called and at which a quorum is present, shareholders may, by the affirmative vote of the holders of two-thirds of the votes entitled to be cast, remove any trustee from office and may elect a successor or successors to fill any resulting vacancies for the unexpired terms of removed trustees. In addition, the trustees of the series will promptly call a meeting of shareholders for the purpose of voting upon the removal of any trustees when requested in writing to do so by the record holders of at least 10% of the outstanding shares.

Leadership structure — The board’s chair is currently an independent trustee who is not an “interested person” of the series within the meaning of the 1940 Act. The board has determined that an independent chair facilitates oversight and enhances the effectiveness of the board. The independent chair’s duties include, without limitation, generally presiding at meetings of the board, approving board meeting schedules and agendas, leading meetings of the independent trustees in executive session, facilitating communication with committee chairs, and serving as the principal independent trustee contact for series management and counsel to the independent trustees and the series.

American Funds Target Date Retirement Series — Page 41


 
 

 

Risk oversight — Day-to-day management of the series, including risk management, is the responsibility of the series’ contractual service providers, including the series’ investment adviser, principal underwriter/distributor and transfer agent. Each of these entities is responsible for specific portions of the series’ operations, including the processes and associated risks relating to the series’ investments, integrity of cash movements, financial reporting, operations and compliance. The board of trustees oversees the service providers’ discharge of their responsibilities, including the processes they use to manage relevant risks. In that regard, the board receives reports regarding the operations of the series’ service providers, including risks. For example, the board receives reports from investment professionals regarding risks related to the series’ investments and trading. The board also receives compliance reports from the series’ and the investment adviser’s chief compliance officers addressing certain areas of risk.

Committees of the series’ board, which are comprised of independent board members, none of whom is an “interested person” of the fund within the meaning of the 1940 Act, as well as joint committees of independent board members of funds managed by Capital Research and Management Company, also explore risk management procedures in particular areas and then report back to the full board. For example, the series’ audit committee oversees the processes and certain attendant risks relating to financial reporting, valuation of fund assets, and related controls. Similarly, a joint review and advisory committee oversees certain risk controls relating to the fund’s transfer agency services.

Not all risks that may affect the series can be identified or processes and controls developed to eliminate or mitigate their effect. Moreover, it is necessary to bear certain risks (such as investment-related risks) to achieve the fund’s objectives. As a result of the foregoing and other factors, the ability of the series’ service providers to eliminate or mitigate risks is subject to limitations.

Committees of the board of trustees — The series has an audit committee comprised of William H. Baribault, Mary Davis Holt, Laurel B. Mitchell and Alexandra Trower. The committee provides oversight regarding the series’ accounting and financial reporting policies and practices, its internal controls and the internal controls of the series’ principal service providers. The committee acts as a liaison between the series’ independent registered public accounting firm and the full board of trustees. The audit committee held five meetings during the 2018 fiscal year.

The series has a contracts committee comprised of all of its independent board members. The committee’s principal function is to request, review and consider the information deemed necessary to evaluate the terms of certain agreements between the series and its investment adviser or the investment adviser’s affiliates, such as the Investment Advisory and Service Agreement, Principal Underwriting Agreement, Administrative Services Agreement and Plans of Distribution adopted pursuant to rule 12b-1 under the 1940 Act, that the series may enter into, renew or continue, and to make its recommendations to the full board of trustees on these matters. The contracts committee held one meeting during the 2018 fiscal year.

The series has a nominating and governance committee comprised of James G. Ellis, Nariman Farvardin, R. Clark Hooper, Merit E. Janow and Margaret Spellings. The committee periodically reviews such issues as the board’s composition, responsibilities, committees, compensation and other relevant issues, and recommends any appropriate changes to the full board of trustees. The committee also evaluates, selects and nominates independent trustee candidates to the full board of trustees. While the committee normally is able to identify from its own and other resources an ample number of qualified candidates, it will consider shareholder suggestions of persons to be considered as nominees to fill future vacancies on the board. Such suggestions must be sent in writing to the nominating and governance committee of the series, addressed to the series’ secretary, and must be accompanied by complete biographical and occupational data on the prospective nominee, along with a written consent of the prospective nominee for consideration of his or her name by the committee. The nominating and governance committee held three meetings during the 2018 fiscal year.

American Funds Target Date Retirement Series — Page 42


 
 

 

The independent board members of the series have oversight responsibility for the series and certain other funds managed by the investment adviser. As part of their oversight responsibility for these funds, each independent board member sits on one of three fund review committees comprised solely of independent board members. The three committees are divided by portfolio type. Each committee functions independently and is not a decision making body. The purpose of the committees is to assist the board of each series in the oversight of the investment management services provided by the investment adviser. In addition to regularly monitoring and reviewing investment results, investment activities and strategies used to manage the fund’s assets, the committees also receive reports from the investment adviser’s Principal Investment Officers for the funds, portfolio managers and other investment personnel concerning efforts to achieve the fund’s investment objectives. Each committee reports to the full board of the series.

Proxy voting procedures and principles — The series’ investment adviser, in consultation with the series’ board, has adopted Proxy Voting Procedures and Principles for American Funds Target Date Retirement Series (the “Principles”) with respect to voting proxies of securities held by the funds. The American Funds Target Date Retirement Series and its investment adviser, Capital Research and Management Company, are committed to acting in the best interests of the shareholders of each fund in the series. Each fund in the series will principally invest in other American Funds. If an underlying fund has a shareholder meeting, a fund will vote its shares in the underlying fund in the same proportion as the votes of the other shareholders of the underlying fund. In the unlikely event that a fund should have to vote a proxy that is not a proxy of an underlying fund, the fund will vote in accordance with the Principles adopted by the underlying funds. For information on the proxy voting procedures and Principles for each of the underlying funds, please see the statement of additional information for each underlying fund.

Information regarding how the series and each underlying fund voted proxies relating to portfolio securities during the 12-month period ended June 30 of each year will be available on or about September 1 of such year (a) without charge, upon request by calling American Funds Service Company at (800) 421-4225, (b) on the American Funds website at americanfunds.com and (c) on the SEC’s website at sec.gov. A copy of the full Principles is available upon request, free of charge, by calling American Funds Service Company or visiting the American Funds website.

Principal fund shareholders — The following table identifies those investors who own of record, or are known by each fund to own beneficially, 5% or more of any class of its shares as of the opening of business on December 1, 2018. Unless otherwise indicated, the ownership percentages below represent ownership of record rather than beneficial ownership.

American Funds Target Date Retirement Series — Page 43


 
 

 

American Funds 2060 Target Date Retirement Fund

       
NAME AND ADDRESS OWNERSHIP OWNERSHIP PERCENTAGE
PERSHING LLC
OMNIBUS ACCOUNT
JERSEY CITY NJ
RECORD CLASS A 12.85%
  CLASS F-2 7.96
     
       
EDWARD D JONES & CO
FOR THE BENEFIT OF CUSTOMERS
OMNIBUS ACCOUNT
SAINT LOUIS MO
RECORD CLASS A 8.59
     
     
     
       
WELLS FARGO CLEARING SERVICES LLC
SPECIAL CUSTODY ACCT FOR THE
EXCLUSIVE BENEFIT OF CUSTOMER
SAINT LOUIS MO
RECORD CLASS C 10.49
  CLASS F-2 11.12
     
     
       
NATIONAL FINANCIAL SERVICES LLC
FOR EXCLUSIVE BEN OF OUR CUSTOMERS
OMNIBUS ACCOUNT
JERSEY CITY NJ
RECORD CLASS C 5.82
  CLASS F-1 29.92
  CLASS F-2 11.66
     
       
LPL FINANCIAL
--OMNIBUS CUSTOMER ACCOUNT--
SAN DIEGO CA
RECORD CLASS C 5.39
  CLASS F-1 5.95
     
       
CHARLES SCHWAB & CO INC
SPECIAL CUSTODY ACCT FOR EXCLUSIVE
BENEFIT OF CUSTOMERS - RIA ACCT
SAN FRANCISCO CA
RECORD CLASS F-1 33.74
     
     
     
       
TD AMERITRADE INC FOR THE
EXCLUSIVE BENEFIT OF OUR CLIENTS
OMNIBUS ACCOUNT
OMAHA NE
RECORD CLASS F-1 16.73
     
     
     
       
CHARLES SCHWAB & CO INC
SPECIAL CUSTODY ACCT FBO CUSTOMERS
SAN FRANCISCO CA
RECORD CLASS F-1 5.75
     
     
       
RAYMOND JAMES
OMNIBUS FOR MUTUAL FUNDS
HOUSE ACCOUNT
ST PETERSBURG FL
RECORD CLASS F-2 5.25
     
     
     
       
J P MORGAN SECURITIES LLC
FOR THE BENEFIT OF OUR CUSTOMERS
OMNIBUS ACCOUNT
BROOKLYN NY
RECORD CLASS F-3 93.48
     
     
     

American Funds Target Date Retirement Series — Page 44


 
 

 

       
NAME AND ADDRESS OWNERSHIP OWNERSHIP PERCENTAGE
       
ISSAQUAH SCH DIST #411 WA
RETIREMENT PLAN
DENVER CO
RECORD
BENEFICIAL
CLASS R-1 15.19
   
     
       
LA SURTIDORA CASH & CARRY INC
RETIREMENT PLAN
FONTANA CA
RECORD
BENEFICIAL
CLASS R-1 12.00
     
       
BELLEVUE SCHOOL DISTRICT (WA)
RETIREMENT PLAN
DENVER CO
RECORD
BENEFICIAL
CLASS R-1 9.53
   
     
       
SEATTLE SCHOOL DISTRICT (WA)
RETIREMENT PLAN
DENVER CO
RECORD
BENEFICIAL
CLASS R-1 9.33
   
     
       
ROCHESTER CITY SCHOOL DISTRICT (NY)
RETIREMENT PLAN
DENVER CO
RECORD
BENEFICIAL
CLASS R-1 6.53
   
     
       
DR SCHNEIDER AUTOMOTIVE SYSTEM
401K PLAN
PITTSBURGH PA
RECORD
BENEFICIAL
CLASS R-1 5.38
   
     
       
ST CLAIR PULMONARY & CRITICAL CARE
RETIREMENT PLAN
GREENWOOD VLG CO
RECORD
BENEFICIAL
CLASS R-2E 9.81
     
     
       
MASSACHUSETTS MUTUAL LIFE
INSURANCE COMPANY 401K
SPRINGFIELD MA
RECORD
BENEFICIAL
CLASS R-2E 7.83
   
     
       
GREAT-WEST TRUST CO AS TRUSTEE FBO
RECORDKEEPING FOR LARGE BENEFIT PL
ACCOUNT #1
GREENWOOD VLG CO
RECORD CLASS R-2E 6.82
     
     
     
       
ADP ACCESS PRODUCT
RETIREMENT PLAN
BOSTON MA
RECORD
BENEFICIAL
CLASS R-2E 6.35
   
     
       
NATIONAL FINANCIAL SERVICES LLC
401K PLAN
JERSEY CITY NJ
RECORD CLASS R-2E 5.96
     
     
       

American Funds Target Date Retirement Series — Page 45


 
 

 

       
NAME AND ADDRESS OWNERSHIP OWNERSHIP PERCENTAGE
HARTFORD
401K PLAN
HARTFORD CT
RECORD CLASS R-2E 5.35
     
     
       
EQUITY-LEAGUE
401(K) PLAN
WESTWOOD MA
RECORD
BENEFICIAL
CLASS R-3 6.95
     
     
       
INSPERITY
401K PLAN
ATLANTA GA
RECORD
BENEFICIAL
CLASS R-4 12.91
   
     
       
MASSMUTUAL REGISTERED PRODUCT
ATLANTA GA
RECORD CLASS R-4 7.19
     
       
NATIONAL FINANCIAL SERVICES LLC
401K PLAN
JERSEY CITY NJ
RECORD
BENEFICIAL
CLASS R-4 6.89
CLASS R-5 18.73
  CLASS R-6 15.87
       
SHEET METAL WORKERS LOCAL NO 28
RETIREMENT PLAN
WESTWOOD MA
RECORD
BENEFICIAL
CLASS R-5E 6.08
     
       
JOHN HANCOCK LIFE INS CO USA
ACCOUNT
BOSTON MA
RECORD CLASS R-6 11.37
     
     
       
CHARLES SCHWAB & CO INC
SPECIAL CUSTODY ACCT FOR EXCLUSIVE
BENEFIT OF CUSTOMERS - REINVEST AC
SAN FRANCISCO CA
RECORD CLASS R-6 5.73
     
     
     
       
GREAT-WEST TRUST CO LLC TTEE FBO
EMPLOYEE BENEFITS CLIENTS 401K #2
GREENWOOD VLG CO
RECORD
BENEFICIAL
CLASS R-6 5.40
   
       

American Funds 2055 Target Date Retirement Fund

       
NAME AND ADDRESS OWNERSHIP OWNERSHIP PERCENTAGE
PERSHING LLC
OMNIBUS ACCOUNT
JERSEY CITY NJ
RECORD CLASS A 11.53%
  CLASS F-2 6.83
     
       

American Funds Target Date Retirement Series — Page 46


 
 

 

       
NAME AND ADDRESS OWNERSHIP OWNERSHIP PERCENTAGE
WELLS FARGO CLEARING SERVICES LLC
SPECIAL CUSTODY ACCT FOR THE
EXCLUSIVE BENEFIT OF CUSTOMER
SAINT LOUIS MO
RECORD CLASS C 9.99
     
     
     
       
NATIONAL FINANCIAL SERVICES LLC
FOR BENEFIT OF OUR CUSTOMERS
OMNIBUS ACCOUNT
JERSEY CITY NJ
RECORD CLASS F-1 42.34
  CLASS F-2 11.66
     
     
       
CHARLES SCHWAB & CO INC
SPECIAL CUSTODY ACCT FOR EXCLUSIVE
BENEFIT OF CUSTOMERS - RIA ACCT
SAN FRANCISCO CA
RECORD CLASS F-1 35.37
     
     
     
       
TD AMERITRADE INC FOR THE
EXCLUSIVE BENEFIT OF OUR CLIENTS
OMNIBUS ACCOUNT
OMAHA NE
RECORD CLASS F-1 7.05
     
     
     
       
LPL FINANCIAL
--OMNIBUS CUSTOMER ACCOUNT--
SAN DIEGO CA
RECORD CLASS F-1 6.00
     
     
       
CAPITAL GROUP PRIVATE CLIENT SERVICES
ACCOUNT
QUINCY MA
RECORD CLASS F-3 69.79
     
     
       
CHARLES SCHWAB & CO INC
SPECIAL CUSTODY ACCT FBO CUSTOMERS
SAN FRANCISCO CA
RECORD CLASS F-3 21.63
     
     
       
CHARLES SCHWAB & CO INC
OMNIBUS ACCOUNT
SAN FRANCISCO CA
RECORD CLASS F-3 6.41
     
     
       
ARISTOTLE CORPORATION
401K PLAN
WESTWOOD MA
RECORD
BENEFICIAL
CLASS R-1 8.16
     
     
       
RALSTON INDUSTRIES INC
401K PLAN
PITTSBURGH PA
RECORD
BENEFICIAL
CLASS R-1 6.40
   
     
       
ROCHESTER CITY SCHOOL DISTRICT (NY)
RETIREMENT PLAN
DENVER CO
RECORD
BENEFICIAL
CLASS R-1 5.19
   
     
       

American Funds Target Date Retirement Series — Page 47


 
 

 

       
NAME AND ADDRESS OWNERSHIP OWNERSHIP PERCENTAGE
ADP ACCESS PRODUCT
RETIREMENT PLAN
BOSTON MA
RECORD
BENEFICIAL
CLASS R-2E 11.20
   
     
       
MASSACHUSETTS MUTUAL LIFE
INSURANCE COMPANY 401K
SPRINGFIELD MA
RECORD
BENEFICIAL
CLASS R-2E 10.27
   
     
       
GREAT-WEST TRUST CO AS TRUSTEE FBO
RECORDKEEPING FOR LARGE BENEFIT PL
ACCOUNT
GREENWOOD VLG CO
RECORD CLASS R-2E 9.87
     
     
     
       
NATIONAL FINANCIAL SERVICES LLC
401K PLAN
JERSEY CITY NJ
RECORD
BENEFICIAL
CLASS R-2E 9.45
     
     
       
HARTFORD
401K PLAN
HARTFORD CT
RECORD
BENEFICIAL
CLASS R-2E 5.03
     
       
INSPERITY
401K PLAN
ATLANTA GA
RECORD
BENEFICIAL
CLASS R-4 14.55
   
     
       
NATIONAL FINANCIAL SERVICES LLC
401K PLAN
JERSEY CITY NJ
RECORD
BENEFICIAL
CLASS R-4 10.77
  CLASS R-6 21.16
       
VOYA INSTITUTIONAL TRUST COMPANY
401K PLAN
WINDSOR CT
RECORD
BENEFICIAL
CLASS R-4 5.55
   
     
       
MASSMUTUAL REGISTERED PRODUCT
ATLANTA GA
RECORD CLASS R-5 6.48
     
       
JOHN HANCOCK LIFE INS CO USA
ACCOUNT
BOSTON MA
RECORD CLASS R-6 7.16
     
     
       
GREAT-WEST TRUST CO LLC TTEE FBO
EMPLOYEE BENEFITS CLIENTS 401K
GREENWOOD VLG CO
RECORD
BENEFICIAL
CLASS R-6 6.29
   
       

American Funds Target Date Retirement Series — Page 48


 
 

 

American Funds 2050 Target Date Retirement Fund

       
NAME AND ADDRESS OWNERSHIP OWNERSHIP PERCENTAGE
PERSHING LLC
OMNIBUS ACCOUNT
JERSEY CITY NJ
RECORD CLASS A 12.57%
  CLASS C 5.46
  CLASS F-2 12.11
  CLASS R-1 5.98
       
WELLS FARGO CLEARING SERVICES LLC
SPECIAL CUSTODY ACCT FOR THE
EXCLUSIVE BENEFIT OF CUSTOMER
SAINT LOUIS MO
RECORD CLASS C 9.25
     
     
     
       
RAYMOND JAMES
OMNIBUS FOR MUTUAL FUNDS
HOUSE ACCOUNT
ST PETERSBURG FL
RECORD CLASS C 5.84
  CLASS F-2 10.43
     
     
       
NATIONAL FINANCIAL SERVICES LLC
FOR BENEFIT OF OUR CUSTOMERS
OMNIBUS ACCOUNT
JERSEY CITY NJ
RECORD CLASS C 5.17
  CLASS F-1 60.77
  CLASS F-2 13.53
     
       
CHARLES SCHWAB & CO INC
SPECIAL CUSTODY ACCT FOR EXCLUSIVE
BENEFIT OF CUSTOMERS - RIA ACCT
SAN FRANCISCO CA
RECORD CLASS F-1 25.99
     
     
     
       
CHARLES SCHWAB & CO INC
OMNIBUS ACCOUNT
SAN FRANCISCO CA
RECORD CLASS F-3 59.96
     
     
       
CHARLES SCHWAB & CO INC
SPECIAL CUSTODY ACCT FBO CUSTOMERS
SAN FRANCISCO CA
RECORD CLASS F-3 15.91
     
     
       
CAPITAL GROUP PRIVATE CLIENT SERVICES
ACCOUNT
QUINCY MA
RECORD CLASS F-3 15.78
     
     
       
PERSONAL PHYSICIAN GROUP LLP 40
401K PLAN
PITTSBURGH PA
RECORD
BENEFICIAL
CLASS R-1 12.12
   
     
       
HEALTHFIRST BLUEGRASS INC
401K PLAN
PITTSBURGH PA
RECORD
BENEFICIAL
CLASS R-1 6.78
   
     
       

American Funds Target Date Retirement Series — Page 49


 
 

 

       
NAME AND ADDRESS OWNERSHIP OWNERSHIP PERCENTAGE
TRIVECTOR SERVICES INC
401K PLAN
PITTSBURGH PA
RECORD
BENEFICIAL
CLASS R-1 5.35
   
     
       
GREAT-WEST TRUST CO AS TRUSTEE FBO
RECORDKEEPING FOR LARGE BENEFIT PL
ACCOUNT
GREENWOOD VLG CO
RECORD CLASS R-2E 10.73
     
     
     
       
ADP ACCESS PRODUCT
RETIREMENT PLAN
BOSTON MA
RECORD
BENEFICIAL
CLASS R-2E 9.76
   
     
       
MASSACHUSETTS MUTUAL LIFE
INSURANCE COMPANY 401K
SPRINGFIELD MA
RECORD
BENEFICIAL
CLASS R-2E 8.53
   
     
       
HARTFORD
401K PLAN
HARTFORD CT
RECORD
BENEFICIAL
CLASS R-2E 7.53
     
     
       
EQUITY LEAGUE
401K PLAN
WESTWOOD MA
RECORD
BENEFICIAL
CLASS R-3 9.21
     
     
       
INSPERITY
401K PLAN
ATLANTA GA
RECORD
BENEFICIAL
CLASS R-4 14.70
   
     
       
NATIONAL FINANCIAL SERVICES LLC
401K PLAN
JERSEY CITY NJ
RECORD
BENEFICIAL
CLASS R-4 9.70
CLASS R-5 28.72
  CLASS R-5E 52.05
  CLASS R-6 19.91
       
MASSMUTUAL REGISTERED PRODUCT
ATLANTA GA
RECORD CLASS R-4 5.72
     
       
JOHN HANCOCK LIFE INS CO USA
ACCOUNT
BOSTON MA
RECORD CLASS R-6 5.83
     
     
       
CHARLES SCHWAB & CO INC
SPECIAL CUSTODY ACCT FOR EXCLUSIVE
BENEFIT OF CUSTOMERS - REINVEST AC
SAN FRANCISCO CA
RECORD CLASS R-6 5.60
     
     
     
       

American Funds Target Date Retirement Series — Page 50


 
 

 

       
NAME AND ADDRESS OWNERSHIP OWNERSHIP PERCENTAGE
GREAT-WEST TRUST CO LLC TTEE FBO
EMPLOYEE BENEFITS CLIENTS 401K
GREENWOOD VLG CO
RECORD
BENEFICIAL
CLASS R-6 5.38
   
     
       

American Funds 2045 Target Date Retirement Fund

       
NAME AND ADDRESS OWNERSHIP OWNERSHIP PERCENTAGE
PERSHING LLC
OMNIBUS ACCOUNT
JERSEY CITY NJ
RECORD CLASS A 12.39%
  CLASS C 5.45
  CLASS F-3 10.06
       
EDWARD D JONES & CO
FOR THE BENEFIT OF CUSTOMERS
OMNIBUS ACCOUNT
SAINT LOUIS MO
RECORD CLASS A 5.17
     
     
     
       
WELLS FARGO CLEARING SERVICES LLC
SPECIAL CUSTODY ACCT FOR THE
EXCLUSIVE BENEFIT OF CUSTOMER
SAINT LOUIS MO
RECORD CLASS C 8.53
     
     
     
       
NATIONAL FINANCIAL SERVICES LLC
FOR BENEFIT OF OUR CUSTOMERS
OMNIBUS ACCOUNT
JERSEY CITY NJ
RECORD CLASS F-1 49.84
  CLASS F-2 15.02
     
     
       
CHARLES SCHWAB & CO INC
SPECIAL CUSTODY ACCT FOR EXCLUSIVE
BENEFIT OF CUSTOMERS - RIA ACCT
SAN FRANCISCO CA
RECORD CLASS F-1 25.59
     
     
     
       
TD AMERITRADE INC FOR THE
EXCLUSIVE BENEFIT OF OUR CLIENTS
OMNIBUS ACCOUNT
OMAHA NE
RECORD CLASS F-1 8.91
     
     
     
       
CHARLES SCHWAB & CO INC
SPECIAL CUSTODY ACCT FBO CUSTOMERS
SAN FRANCISCO CA
RECORD CLASS F-1 6.66
  CLASS F-3 45.19
     
       
CHARLES SCHWAB & CO INC
OMNIBUS ACCOUNT
SAN FRANCISCO CA
RECORD CLASS F-3 26.06
     
     
       

American Funds Target Date Retirement Series — Page 51


 
 

 

       
NAME AND ADDRESS OWNERSHIP OWNERSHIP PERCENTAGE
J P MORGAN SECURITIES LLC
FOR THE BENEFIT OF OUR CUSTOMERS
OMNIBUS ACCOUNT
BROOKLYN NY
RECORD CLASS F-3 9.35
     
     
     
       
JEFFERSON BULLDOGS INC
401K PLAN
DENVER CO
RECORD
BENEFICIAL
CLASS R-1 5.66
   
     
       
NATIONAL FINANCIAL SERVICES LLC
401K PLAN
JERSEY CITY NJ
RECORD
BENEFICIAL
CLASS R-2E 27.86
     
     
       
GREAT-WEST TRUST CO AS TRUSTEE FBO
RECORDKEEPING FOR LARGE BENEFIT PL
ACCOUNT1
GREENWOOD VLG CO
RECORD CLASS R-2E 8.45
     
     
     
       
ADP ACCESS PRODUCT
RETIREMENT PLAN
BOSTON MA
RECORD
BENEFICIAL
CLASS R-2E 6.63
   
     
       
MASSACHUSETTS MUTUAL LIFE
INSURANCE COMPANY 401K
SPRINGFIELD MA
RECORD
BENEFICIAL
CLASS R-2E 5.65
   
     
       
INSPERITY
401K PLAN
ATLANTA GA
RECORD
BENEFICIAL
CLASS R-4 16.35
   
     
       
NATIONAL FINANCIAL SERVICES LLC
401K PLAN
JERSEY CITY NJ
RECORD
BENEFICIAL
CLASS R-4 8.81
CLASS R-5 32.54
  CLASS R-5E 51.55
  CLASS R-6 19.14
       
VOYA INSTITUTIONAL TRUST COMPANY
401K PLAN
WINDSOR CT
RECORD
BENEFICIAL
CLASS R-4 7.71
   
     
       
MASSMUTUAL REGISTERED PRODUCT
ATLANTA GA
RECORD CLASS R-4 5.94
     
       
SHEET METAL WORKERS LOCAL NO 28
RETIREMENT PLAN
WESTWOOD MA
RECORD
BENEFICIAL
CLASS R-5E 5.23
     
       
JOHN HANCOCK LIFE INS CO USA
ACCOUNT
BOSTON MA
RECORD CLASS R-6 8.47
     

American Funds Target Date Retirement Series — Page 52


 
 

 

       
NAME AND ADDRESS OWNERSHIP OWNERSHIP PERCENTAGE
       
CHARLES SCHWAB & CO INC
SPECIAL CUSTODY ACCT FOR EXCLUSIVE
BENEFIT OF CUSTOMERS - REINVEST AC
SAN FRANCISCO CA
RECORD CLASS R-6 7.02
     
     
       
GREAT-WEST TRUST CO LLC TTEE FBO
EMPLOYEE BENEFITS CLIENTS 401K
GREENWOOD VLG CO
RECORD
BENEFICIAL
CLASS R-6 6.46
   
       

American Funds 2040 Target Date Retirement Fund

       
NAME AND ADDRESS OWNERSHIP OWNERSHIP PERCENTAGE
PERSHING LLC
OMNIBUS ACCOUNT
JERSEY CITY NJ
RECORD CLASS A 10.16%
  CLASS C 6.85
  CLASS F-3 16.87
       
EDWARD D JONES & CO
FOR THE BENEFIT OF CUSTOMERS
OMNIBUS ACCOUNT
SAINT LOUIS MO
RECORD CLASS A 6.01
     
     
     
       
WELLS FARGO CLEARING SERVICES LLC
SPECIAL CUSTODY ACCT FOR THE
EXCLUSIVE BENEFIT OF CUSTOMER
SAINT LOUIS MO
RECORD CLASS C 10.76
     
     
     
       
NATIONAL FINANCIAL SERVICES LLC
FOR BENEFIT OF OUR CUSTOMERS
OMNIBUS ACCOUNT
JERSEY CITY NJ
RECORD CLASS F-1 56.60
  CLASS F-2 16.14
  CLASS F-3 5.57
     
       
CHARLES SCHWAB & CO INC
SPECIAL CUSTODY ACCT FOR EXCLUSIVE
BENEFIT OF CUSTOMERS - RIA ACCT
SAN FRANCISCO CA
RECORD CLASS F-1 26.02
     
     
     
       
TD AMERITRADE INC FOR THE
EXCLUSIVE BENEFIT OF OUR CLIENTS
OMNIBUS ACCOUNT
OMAHA NE
RECORD CLASS F-1 5.16
  CLASS F-3 7.01
     
     
       
MORGAN STANLEY SMITH BARNEY LLC
FOR THE BENEFIT OF ITS CUSTOMERS
OMNIBUS ACCOUNT
NEW YORK NY
RECORD CLASS F-2 7.08
     
     
     
       

American Funds Target Date Retirement Series — Page 53


 
 

 

       
NAME AND ADDRESS OWNERSHIP OWNERSHIP PERCENTAGE
CHARLES SCHWAB & CO INC
OMNIBUS ACCOUNT
SAN FRANCISCO CA
RECORD CLASS F-3 26.71
     
     
       
CHARLES SCHWAB & CO INC
SPECIAL CUSTODY ACCT FBO CUSTOMERS
SAN FRANCISCO CA
RECORD CLASS F-3 24.64
     
     
       
CAPITAL GROUP PRIVATE CLIENT SERVICES
ACCOUNT
QUINCY MA
RECORD CLASS F-3 12.62
     
     
       
PRIOR LAKE-SAVAGE ISD # 719
RETIREMENT PLAN
DENVER CO
RECORD
BENEFICIAL
CLASS R-1 6.29
   
     
       
GREAT-WEST TRUST CO AS TRUSTEE FBO
RECORDKEEPING FOR LARGE BENEFIT PL
ACCOUNT
GREENWOOD VLG CO
RECORD CLASS R-2E 10.72
     
     
     
       
HARTFORD
401K PLAN
HARTFORD CT
RECORD
BENEFICIAL
CLASS R-2E 9.20
     
       
ADP ACCESS PRODUCT
RETIREMENT PLAN
BOSTON MA
RECORD
BENEFICIAL
CLASS R-2E 8.09
   
     
       
MASSACHUSETTS MUTUAL LIFE
INSURANCE COMPANY 401K
SPRINGFIELD MA
RECORD
BENEFICIAL
CLASS R-2E 6.91
   
     
       
INSPERITY
401K PLAN
ATLANTA GA
RECORD
BENEFICIAL
CLASS R-4 13.01
   
     
       
NATIONAL FINANCIAL SERVICES LLC
401K PLAN
JERSEY CITY NJ
RECORD
BENEFICIAL
CLASS R-4 8.20
CLASS R-5 28.34
  CLASS R-5E 54.70
  CLASS R-6 18.92
       
MASSMUTUAL REGISTERED PRODUCT
ATLANTA GA
RECORD CLASS R-4 5.16
     
       
CHARLES SCHWAB & CO INC
SPECIAL CUSTODY ACCT FOR EXCLUSIVE
BENEFIT OF CUSTOMERS - REINVEST AC
SAN FRANCISCO CA
RECORD CLASS R-6 9.40
     
     
     

American Funds Target Date Retirement Series — Page 54


 
 

 

       
NAME AND ADDRESS OWNERSHIP OWNERSHIP PERCENTAGE
       
JOHN HANCOCK LIFE INS CO USA
ACCOUNT
BOSTON MA
RECORD CLASS R-6 6.00
     
     
       
GREAT-WEST TRUST CO LLC TTEE FBO
EMPLOYEE BENEFITS CLIENTS 401K
GREENWOOD VLG CO
RECORD
BENEFICIAL
CLASS R-6 5.07
   
       

American Funds 2035 Target Date Retirement Fund

       
NAME AND ADDRESS OWNERSHIP OWNERSHIP PERCENTAGE
PERSHING LLC
OMNIBUS ACCOUNT
JERSEY CITY NJ
RECORD CLASS A 9.47%
  CLASS C 5.03
  CLASS F-3 5.81
       
EDWARD D JONES & CO
FOR THE BENEFIT OF CUSTOMERS
OMNIBUS ACCOUNT
SAINT LOUIS MO
RECORD CLASS A 6.48
     
     
     
       
WELLS FARGO CLEARING SERVICES LLC
SPECIAL CUSTODY ACCT FOR THE
EXCLUSIVE BENEFIT OF CUSTOMER
SAINT LOUIS MO
RECORD CLASS C 12.91
     
     
     
       
RAYMOND JAMES
OMNIBUS FOR MUTUAL FUNDS
HOUSE ACCOUNT
ST PETERSBURG FL
RECORD CLASS C 6.23
  CLASS F-2 5.70
     
     
       
NATIONAL FINANCIAL SERVICES LLC
FOR EXCLUSIVE BENEFIT OF OUR CUSTOMERS
OMNIBUS ACCOUNT
JERSEY CITY NJ
RECORD CLASS F-1 52.31
  CLASS F-2 10.39
     
     
       
CHARLES SCHWAB & CO INC
SPECIAL CUSTODY ACCT FOR EXCLUSIVE
BENEFIT OF CUSTOMERS - RIA ACCT
SAN FRANCISCO CA
RECORD CLASS F-1 28.81
     
     
     
       
TD AMERITRADE INC FOR THE
EXCLUSIVE BENEFIT OF OUR CLIENTS
OMNIBUS ACCOUNT
OMAHA NE
RECORD CLASS F-1 7.29
     
     
       

American Funds Target Date Retirement Series — Page 55


 
 

 

       
NAME AND ADDRESS OWNERSHIP OWNERSHIP PERCENTAGE
TRUST ACCOUNT
PLANO TX
BENEFICIAL CLASS F-2 8.06
     
       
CAPITAL GROUP PRIVATE CLIENT SERVICES
ACCOUNT
QUINCY MA
RECORD CLASS F-3 71.33
     
       
CHARLES SCHWAB & CO INC
SPECIAL CUSTODY ACCT FBO CUSTOMERS
SAN FRANCISCO CA
RECORD CLASS F-3 14.89
     
     
       
CHARLES SCHWAB & CO INC
OMNIBUS ACCOUNT
SAN FRANCISCO CA
RECORD CLASS F-3 5.70
     
     
       
NATIONAL FINANCIAL SERVICES LLC
401K PLAN #1
JERSEY CITY NJ
RECORD
BENEFICIAL
CLASS R-2E 13.46
     
     
       
GREAT-WEST TRUST CO AS TRUSTEE FBO
RECORDKEEPING FOR LARGE BENEFIT PL
ACCOUNT
GREENWOOD VLG CO
RECORD CLASS R-2E 9.38
     
     
     
       
MASSACHUSETTS MUTUAL LIFE
INSURANCE COMPANY 401K
SPRINGFIELD MA
RECORD
BENEFICIAL
CLASS R-2E 6.03
   
     
       
ADP ACCESS PRODUCT
RETIREMENT PLAN
BOSTON MA
RECORD
BENEFICIAL
CLASS R-2E 5.84
   
     
       
INSPERITY
401K PLAN
ATLANTA GA
RECORD
BENEFICIAL
CLASS R-4 13.48
   
     
       
NATIONAL FINANCIAL SERVICES LLC
401K PLAN #2
JERSEY CITY NJ
RECORD
BENEFICIAL
CLASS R-4 8.30
CLASS R-5 23.09
  CLASS R-5E 57.92
  CLASS R-6 17.91
       
VOYA INSTITUTIONAL TRUST COMPANY
401K PLAN
WINDSOR CT
RECORD
BENEFICIAL
CLASS R-4 6.12
   
     
       
MASSMUTUAL REGISTERED PRODUCT
ATLANTA GA
RECORD CLASS R-4 5.93
     
       

American Funds Target Date Retirement Series — Page 56


 
 

 

       
NAME AND ADDRESS OWNERSHIP OWNERSHIP PERCENTAGE
MASSMUTUAL
OMNIBUS ACCOUNT
ATLANTA GA
RECORD CLASS R-5E 6.31
   
     
       
CHARLES SCHWAB & CO INC
SPECIAL CUSTODY ACCT FOR EXCLUSIVE
BENEFIT OF CUSTOMERS - REINVEST AC
SAN FRANCISCO CA
RECORD CLASS R-6 9.52
     
     
     
       
JOHN HANCOCK LIFE INS CO USA
ACCOUNT
BOSTON MA
RECORD CLASS R-6 7.60
     
     
       
GREAT-WEST TRUST CO LLC TTEE FBO
EMPLOYEE BENEFITS CLIENTS 401K
GREENWOOD VLG CO
RECORD
BENEFICIAL
CLASS R-6 6.39
   
       

American Funds 2030 Target Date Retirement Fund

       
NAME AND ADDRESS OWNERSHIP OWNERSHIP PERCENTAGE
EDWARD D JONES & CO
FOR THE BENEFIT OF CUSTOMERS
OMNIBUS ACCOUNT
SAINT LOUIS MO
RECORD CLASS A 8.71%
     
     
     
       
PERSHING LLC
OMNIBUS ACCOUNT
JERSEY CITY NJ
RECORD CLASS A 8.42
  CLASS C 6.52
  CLASS F-2 7.70
  CLASS F-3 20.23
       
WELLS FARGO CLEARING SERVICES LLC
SPECIAL CUSTODY ACCT FOR THE
EXCLUSIVE BENEFIT OF CUSTOMER
SAINT LOUIS MO
RECORD CLASS C 13.08
     
     
     
       
MORGAN STANLEY SMITH BARNEY LLC
FOR THE BENEFIT OF ITS CUSTOMERS
OMNIBUS ACCOUNT
NEW YORK NY
RECORD CLASS C 5.91
  CLASS F-2 5.26
     
     
       
NATIONAL FINANCIAL SERVICES LLC
FOR EXCLUSIVE BENEFIT OF OUR CUSTOMERS
OMNIBUS ACCOUNT
JERSEY CITY NJ
RECORD CLASS F-1 48.27
  CLASS F-2 16.27
     
     
       

American Funds Target Date Retirement Series — Page 57


 
 

 

       
NAME AND ADDRESS OWNERSHIP OWNERSHIP PERCENTAGE
CHARLES SCHWAB & CO INC
SPECIAL CUSTODY ACCT FOR EXCLUSIVE
BENEFIT OF CUSTOMERS - RIA ACCT
SAN FRANCISCO CA
RECORD CLASS F-1 23.53
     
     
     
       
CHARLES SCHWAB & CO INC
SPECIAL CUSTODY ACCT FBO CUSTOMERS
SAN FRANCISCO CA
RECORD CLASS F-1 5.80
  CLASS F-3 17.87
     
       
RAYMOND JAMES
OMNIBUS FOR MUTUAL FUNDS
HOUSE ACCOUNT
ST PETERSBURG FL
RECORD CLASS F-2 7.39
     
     
     
       
MLPF&S FOR THE SOLE BENEFIT OF
ITS CUSTOMERS
OMNIBUS ACCOUNT
JACKSONVILLE FL
RECORD CLASS F-2 5.35
     
     
     
       
CAPITAL GROUP PRIVATE CLIENT SERVICES
ACCOUNT
QUINCY MA
RECORD CLASS F-3 45.30
     
     
       
CHARLES SCHWAB & CO INC
OMNIBUS ACCOUNT
SAN FRANCISCO CA
RECORD CLASS F-3 12.75
     
     
       
GREAT-WEST TRUST CO AS TRUSTEE FBO
RECORDKEEPING FOR LARGE BENEFIT PL
ACCOUNT #1
GREENWOOD VLG CO
RECORD CLASS R-2E 7.62
     
     
     
       
HARTFORD
401K PLAN
HARTFORD CT
RECORD
BENEFICIAL
CLASS R-2E 7.17
     
     
       
MASSACHUSETTS MUTUAL LIFE
INSURANCE COMPANY 401K
SPRINGFIELD MA
RECORD
BENEFICIAL
CLASS R-2E 6.82
   
     
       
INSPERITY
401K PLAN
ATLANTA GA
RECORD
BENEFICIAL
CLASS R-4 10.51
   
     
       
NATIONAL FINANCIAL SERVICES LLC
401K PLAN
JERSEY CITY NJ
RECORD
BENEFICIAL
CLASS R-4 6.33
CLASS R-5 22.92
  CLASS R-6 18.52
       

American Funds Target Date Retirement Series — Page 58


 
 

 

       
NAME AND ADDRESS OWNERSHIP OWNERSHIP PERCENTAGE
MASSMUTUAL REGISTERED PRODUCT
ATLANTA GA
RECORD CLASS R-4 5.12
     
     
     
       
CHARLES SCHWAB & CO INC
SPECIAL CUSTODY ACCT FOR EXCLUSIVE
BENEFIT OF CUSTOMERS - REINVEST AC
SAN FRANCISCO CA
RECORD CLASS R-6 9.11
     
     
     
       
JOHN HANCOCK LIFE INS CO USA
ACCOUNT
BOSTON MA
RECORD CLASS R-6 6.64
     
     
       
GREAT-WEST TRUST CO LLC TTEE FBO
EMPLOYEE BENEFITS CLIENTS 401K #2
GREENWOOD VLG CO
RECORD
BENEFICIAL
CLASS R-6 5.19
   
       

American Funds 2025 Target Date Retirement Fund

       
NAME AND ADDRESS OWNERSHIP OWNERSHIP PERCENTAGE
EDWARD D JONES & CO
FOR THE BENEFIT OF CUSTOMERS
OMNIBUS ACCOUNT
SAINT LOUIS MO
RECORD CLASS A 9.59%
     
     
     
       
PERSHING LLC
OMNIBUS ACCOUNT
JERSEY CITY NJ
RECORD CLASS A 8.16
  CLASS C 6.94
  CLASS F-1 7.90
  CLASS F-2 6.89
  CLASS F-3 11.31
       
WELLS FARGO CLEARING SERVICES LLC
SPECIAL CUSTODY ACCT FOR THE
EXCLUSIVE BENEFIT OF CUSTOMER
SAINT LOUIS MO
RECORD CLASS C 15.93
     
     
     
       
MORGAN STANLEY SMITH BARNEY LLC
FOR THE BENEFIT OF ITS CUSTOMERS
OMNIBUS ACCOUNT
NEW YORK NY
RECORD CLASS C 5.96
  CLASS F-2 6.42
     
     
       
NATIONAL FINANCIAL SERVICES LLC
FOR EXCLUSIVE BENEFIT OF OUR CUSTOMERS
OMNIBUS ACCOUNT
JERSEY CITY NJ
RECORD CLASS F-1 47.14
  CLASS F-2 11.09
     
     

American Funds Target Date Retirement Series — Page 59


 
 

 

       
NAME AND ADDRESS OWNERSHIP OWNERSHIP PERCENTAGE
       
CHARLES SCHWAB & CO INC
SPECIAL CUSTODY ACCT FOR EXCLUSIVE
BENEFIT OF CUSTOMERS - RIA ACCT
SAN FRANCISCO CA
RECORD CLASS F-1 19.77
     
     
     
       
TD AMERITRADE INC FOR THE
EXCLUSIVE BENEFIT OF OUR CLIENTS
OMNIBUS ACCOUNT
OMAHA NE
RECORD CLASS F-1 5.90
  CLASS F-2 9.87
     
       
CHARLES SCHWAB & CO INC
SPECIAL CUSTODY ACCT FBO CUSTOMERS
SAN FRANCISCO CA
RECORD CLASS F-2 5.37
     
     
       
CAPITAL GROUP PRIVATE CLIENT SERVICES
ACCOUNT
QUINCY MA
RECORD CLASS F-3 51.18
     
     
       
CHARLES SCHWAB & CO INC
OMNIBUS ACCOUNT
SAN FRANCISCO CA
RECORD CLASS F-3 12.93
     
     
       
STEPHENS INC
RETIREMENT PLAN
RUSSELLVILLE AR
RECORD
BENEFICIAL
CLASS F-3 5.18
   
     
       
PAI TRUST COMPANY INC
401K PLAN
DE PERE WI
RECORD
BENEFICIAL
CLASS R-1 5.42
   
     
       
NATIONAL FINANCIAL SERVICES LLC
401K PLAN #1
JERSEY CITY NJ
RECORD
BENEFICIAL
CLASS R-2E 18.27
     
       
GREAT-WEST TRUST CO AS TRUSTEE FBO
RECORDKEEPING FOR LARGE BENEFIT PL
ACCOUNT
GREENWOOD VLG CO
RECORD CLASS R-2E 6.06
     
     
     
       
INSPERITY
401K PLAN
ATLANTA GA
RECORD
BENEFICIAL
CLASS R-4 10.93
   
     
       
NATIONAL FINANCIAL SERVICES LLC
401K PLAN #2
JERSEY CITY NJ
RECORD
BENEFICIAL
CLASS R-4 6.62
CLASS R-5 20.50
  CLASS R-6 18.88
       

American Funds Target Date Retirement Series — Page 60


 
 

 

       
NAME AND ADDRESS OWNERSHIP OWNERSHIP PERCENTAGE
MASSMUTUAL REGISTERED PRODUCT
ATLANTA GA
RECORD CLASS R-4 5.00
     
       
JOHN HANCOCK LIFE INS CO USA
ACCOUNT
BOSTON MA
RECORD CLASS R-6 7.03
     
     
       
CHARLES SCHWAB & CO INC
SPECIAL CUSTODY ACCT FOR EXCLUSIVE
BENEFIT OF CUSTOMERS - REINVEST AC
SAN FRANCISCO CA
RECORD CLASS R-6 6.71
     
     
     
       
GREAT-WEST TRUST CO LLC TTEE FBO
EMPLOYEE BENEFITS CLIENTS 401K
GREENWOOD VLG CO
RECORD
BENEFICIAL
CLASS R-6 6.14
   
       

American Funds 2020 Target Date Retirement Fund