Expanding access to private markets in DC plans

1. Source: According to the Financial Industry Regulatory Authority (FINRA), an institutional investor includes entities such as banks, insurance companies, registered investment companies, investment advisers, and certain employee benefit plans. These organizations typically manage large portfolios and possess the expertise to make informed investment decisions. Source: FINRA, https://www.finra.org/sites/default/files/AREF_RuleDefinition.pdf

2. Qualified Default Investment Alternatives (QDIAs) — Defined as the investment option a plan uses when a participant fails to direct their own investments, established by the DOL's final regulation at 29 CFR § 2550.404c-5 (published Oct. 24, 2007). The footnote now covers the ERISA § 404(c)(5) fiduciary-relief basis, the qualifying conditions (no employer securities, transferability, diversification, managed by a named fiduciary, notice/disclosure/fee limits), and all six QDIA categories under § 2550.404c-5(e)(4): target-date/life-cycle funds, balanced funds, managed accounts, capital-preservation products (120-day limit), grandfathered stable-value funds, and the pooled/annuity delivery clarification. Cites the final rule, DOL Field Assistance Bulletin 2008-03, and the DOL fact sheet.

3. Collective Investment Trusts (CITs) — Defined as bank-administered trusts that commingle fiduciary assets, governed by 12 CFR § 9.18 (OCC). The footnote now distinguishes the two fund types — § 9.18(a)(1) common trust funds and § 9.18(a)(2) tax-exempt retirement funds (the category relevant to qualified plans) — and details the operating requirements (written board-approved Plan, exclusive bank management). It also clarifies that CITs resemble mutual funds but are OCC-supervised rather than SEC-registered and are available only to eligible tax-exempt trusts, not the general public. Cites the CFR provision, the OCC Comptroller's Handbook, and FDIC guidance.

4. Fund Awards: Franklin Retirement Advantage 2035 Fund, Best Mixed Asset Target 2035 Fund Over 3 Years; Franklin Retirement Advantage 2035 Fund, Best Mixed Asset Target 2035 Fund Over 5 Years; Franklin Retirement Advantage 2040 Fund, Best Mixed Asset Target 2040 Fund Over 5 Years; Franklin Retirement Advantage 2045 Fund, Best Mixed Asset, Target 2045 Fund Over 3 Years; Franklin Retirement Advantage 2045 Fund, Best Mixed Asset, Target 2045 Fund Over 5 Years; Franklin Retirement Advantage 2050 Fund, Best Mixed Asset Target 2050 Fund Over 3 Years; Franklin Retirement Advantage 2050 Fund, Best Mixed Asset Target 2050 Fund Over 5 Years; Franklin Retirement Advantage 2055 Fund, Best Mixed Asset, Target 2055 Fund Over 3 Years; Franklin Retirement Advantage 2055 Fund, Best Mixed Asset, Target 2055 Fund Over 5 Years; Franklin Retirement Advantage 2060 Fund, Best Mixed Asset Target 2060 Fund Over 3 Years; Franklin Retirement Advantage 2060 Fund, Best Mixed Asset Target 2060 Fund Over 5 Years; Franklin Retirement Advantage 2065 Fund, Best Mixed Asset Target 2060+ Fund Over 3 Years. View all the awards methodology here.

The LSEG Lipper Fund Awards, granted annually, highlight funds and fund companies that have excelled in delivering consistently strong risk-adjusted performance relative to their peers.

The LSEG Lipper Fund Awards are based on the Lipper Leader for Consistent Return rating, which is a risk-adjusted performance measure calculated over 36, 60 and 120 months. The fund with the highest Lipper Leader for Consistent Return (Effective Return) value in each eligible classification wins the LSEG Lipper Fund Award. For more information, see lipperfundawards.com. Although LSEG makes reasonable efforts to ensure the accuracy and reliability of the data contained herein, their accuracy is not guaranteed by LSEG Lipper.

The Lipper Fund Awards Methodology: The merit of the winners is based on objective, quantitative criteria. The influential and prestigious LSEG Lipper Fund Awards are based on our Lipper Leaders Rating for Consistent Return. Individual classifications of three, five, and 10-year periods, as well as fund families with high average scores for the three-year period, are also recognized. The awards are based on LSEG Lipper’s proven proprietary methodology, which can be viewed here.

Retirement Advantage
All investments involve risks, including possible loss of principal. Investments in underlying funds are subject to the same risks as, and indirectly bear the fees and expenses of, the underlying funds. The allocation of assets among different strategies, asset classes and investments may not prove beneficial or produce the desired results. The investment style may become out of favor, which may have a negative impact on performance. Small- and mid-cap stocks involve greater risks and volatility than large-cap stocks. Fixed income securities involve interest rate, credit, inflation and reinvestment risks, and possible loss of principal. As interest rates rise, the value of fixed income securities falls. Low-rated, high-yield bonds are subject to greater price volatility, illiquidity and possibility of default. Asset-backed, mortgage-backed or mortgage-related securities are subject to prepayment and extension risks. International investments are subject to special risks, including currency fluctuations and social, economic and political uncertainties, which could increase volatility. These risks are magnified in emerging markets. Real estate investment trusts (REITs) are closely linked to the performance of the real estate markets. REITs are subject to illiquidity, credit and interest rate risks, and risks associated with small- and mid-cap investments. Convertible securities are subject to the risks of stocks when the underlying stock price is high relative to the conversion price and debt securities when the underlying stock price is low relative to the conversion price.

CPREX CIT:
The Fund is a collective investment fund maintained by Alta Trust Company and is designed to serve the investment needs of tax-qualified employer-sponsored retirement plans. The Fund is not a mutual fund registered under the Investment Company Act of 1940 ("1940 Act"), and unit holders are not entitled to the protections of the 1940 Act. The regulations applicable to a collective investment fund are different from those applicable to a mutual fund. The Fund's units are not securities registered under the Securities Act of 1933 and are not publicly traded on any exchange or over-the-counter market.

The unit values of the Fund will fluctuate and the value of the Fund will decrease or increase in accordance with market conditions. There is no guarantee that the Fund will achieve its investment objective. Units in the Fund are not deposits or obligations of, or endorsed or guaranteed by, Alta Trust or its affiliates, and are not insured by the FDIC or any other organization. The Fund is subject to investment risks, including possible loss of principal.

Limited History of Operations: The Fund is a new offering and there is a limited history of operations for investors to evaluate.

Market Risk: The market price of a security or instrument may decline, sometimes rapidly or unpredictably, due to general market conditions, real or perceived adverse economic or political conditions, changes in the outlook for corporate earnings, changes in interest or currency rates, or adverse investor sentiment.

Illiquidity Risk: Investments held within the Fund may have limited liquidity. Investors may not be able to sell their investment quickly, and there may be lock-up periods or restrictions on redemptions.

Valuation Risk: Alternative assets are often difficult to value and may not have transparent pricing. Valuations may be based on the most recent valuation, models, estimates, or assumptions, which can lead to discrepancies between reported and actual values.

Leverage Risk: Some alternative investments employ leverage, which can magnify both gains and losses.

Concentration Risk: Many alternative investments may focus on a single sector, asset class, or geographic region, increasing exposure to market downturns in that area.

Regulatory Risk:Alternative investments may be subject to less regulatory oversight than traditional investments, increasing risks associated with fraud, mismanagement, and lack of transparency. The CIT is not registered under the 1940 Act; investors will not receive the protections of the 1940 Act, and the Fund's offering documents are not reviewed or approved by federal or state regulators.

Private Investment Funds Risk: The Fund may invest in private investment funds (including Clarion Partners Real Estate Income Funds) that are not registered as investment companies. The Fund, as an investor in these funds, would not have the benefit of certain protections afforded to investors in registered investment companies. The Fund may not have the same amount of information about the identity, value, or performance of the private investment funds' investments. Investments in private investment funds generally will be illiquid and generally may not be transferred without the consent of the fund. The Fund may be unable to liquidate its investment in a private investment fund when desired and may incur losses as a result.

Lack of Control Over Private Investment Funds: Once the Fund has invested in a private investment fund, the Trustee generally will have no control over the investment decisions made by such fund. The Trustee may be constrained by the withdrawal limitations imposed by private investment funds, which may restrict the Fund's ability to terminate investments that are performing poorly.

Real Estate Risk (via underlying Clarion Partners funds): The Fund's exposure to real estate comes through underlying Clarion Partners Real Estate Income Funds. Real estate investments are subject to risks including fluctuations in lease occupancy rates and operating expenses, variations in rental schedules, local/state/national/international economic conditions, supply and demand for real estate properties, zoning laws, rent control laws, real property taxes, availability and costs of financing, environmental laws, and uninsured losses from catastrophic events.

Fees and Expenses: The Fund is subject to substantial charges for management, performance, and other fees regardless of whether the Fund has a positive return. The total operating expense includes the fees and expenses of the CIT and the underlying funds. Indirect expenses of the underlying investment vehicles (including carried interest typically ranging from 10% to 20% of net profits, interest expense, and operating expenses typically from 0.50% to 2.00% annually) are excluded from the stated total operating expense but are reflected in the net asset value of those investments and ultimately of the CIT.

Limited Liquidity: The Fund invests in a semi-liquid portfolio. Redemptions may be suspended or deferred if cash and liquid assets are insufficient to meet demand. Underlying investments contain restrictions that may limit quarterly redemptions to 5%. Participating plans must be made aware of this limitation and that there is no guarantee that a redemption up to this amount will be available when requested.

Declaration of Trust: The Declaration of Trust for the Trust describes the procedures for admission to and withdrawal from the Fund and should be read in conjunction with this information statement.

Franklin BSP Lending Fund

INVESTMENT RISK: Past performance is no guarantee of future results. All investments involve risk, including loss of principal. Franklin BSP Lending Fund (the "Fund") is subject to a high degree of risk; specific risk considerations are listed below.

Concentration risk:An investment should be considered long-term within a multi-asset portfolio and should not be viewed individually as a complete investment program.

Liquidity risks: The Fund should be viewed as a long-term investment, as it is inherently illiquid and suitable only for investors who can bear the risks associated with the limited liquidity of the Fund. Limited liquidity is provided to shareholders only through the Fund's quarterly repurchase offers for at least 5% of the Fund's shares outstanding at net asset value. Although the Fund will conduct quarterly repurchase offers, there is no guarantee that a shareholder will be able to sell all of their shares in the Fund that the shareholder desires to sell or at a favorable price. Shares tendered within 12 months of the original issue date will be subject to an early withdrawal fee of 2.00%. Please see Fund prospectus for additional information.

Leverage risk: The use of leverage can increase the volatility of investment returns and subject a fund to magnified losses underlying investments decline in value. A fund with a higher leverage ratio will be more sensitive to volatility and more susceptible to losses due to declines in asset values, than a fund with a lower ratio.

Fund distributions: Distributions are not guaranteed and are subject to change.

Private market investment risks: The fund may be able to invest in private securities that are illiquid and thinly traded, which may limit the manager's ability to sell such securities at their fair market value or when necessary to meet the portfolio's liquidity needs. To the extent the fund invests in privately held companies they present certain challenges and involve incremental risks as opposed to investments in public companies, such as dealing with the lack of available information about these companies as well as their general lack of liquidity. There also can be no assurance that companies will list their securities on a securities exchange, as such, the lack of an established, liquid secondary market for some investments may have an adverse effect on the market value of those investments and on an investor's ability to dispose of them at a favorable time or price.

Derivatives risk: Derivative instruments can be illiquid, may disproportionately increase losses, and have a potentially large impact on performance.

This material is intended to be of general interest only and should not be construed as individual investment advice or a recommendation or solicitation to buy, sell or hold any security or to adopt any investment strategy. It does not constitute legal or tax advice. This material may not be reproduced, distributed or published without prior written permission from Franklin Templeton.

The views expressed are those of the investment manager and the comments, opinions and analyses are rendered as at publication date and may change without notice. The underlying assumptions and these views are subject to change based on market and other conditions and may differ from other portfolio managers or of the firm as a whole. The information provided in this material is not intended as a complete analysis of every material fact regarding any country, region or market. There is no assurance that any prediction, projection or forecast on the economy, stock market, bond market or the economic trends of the markets will be realized. The value of investments and the income from them can go down as well as up and you may not get back the full amount that you invested. Past performance is not necessarily indicative nor a guarantee of future performance. All investments involve risks, including possible loss of principal.

Franklin Templeton does not provide legal or tax advice. Retirement plans are complex, and the federal and state laws or regulations on which they are based vary for each type of plan and are subject to change. In addition, some products, investment vehicles, and services may not be available or appropriate in all workplace retirement plans. Plan sponsors and plan administrators should consult the advice of legal counsel or a tax professional to address their specific situations.

© Franklin Distributors, LLC. Member FINRA/SIPC. Clarion Partners, LLC, Benefit Street Partners and Franklin Templeton Fund Adviser, LLC are Franklin Templeton companies.