Important Information About This Investment
The Interest Accumulation Portfolio directs all of its assets into Ohio Short-Term Reserves Account, through which the Portfolio owns funding agreements issued by one or more insurance companies, synthetic investment contracts (SICs), and/or shares of
Vanguard Federal Money Market Fund. Funding agreements and SICs are interest-bearing contracts that are structured to preserve principal and accumulate interest earnings over the life of the investment. Funding agreements generally pay interest at
a fixed interest rate and have fixed maturity dates that normally range from two to five years. SICs pay a variable interest rate and have an average duration range between two and five years. Investments in either new funding agreements or SICs are
based upon available liquidity in the Portfolio and the competitiveness of offered yields, based on market conditions and trends. The Ohio Short-Term Reserves Account may also invest as little as 2% to 25% of its assets in shares of Vanguard Federal
Money Market Fund, to meet normal liquidity needs, to as much as all or a large portion of its assets in this Fund if sufficient investments cannot be obtained from issuers meeting the minimum credit standards and contract terms.
Vanguard Federal Money Market Fund invests in high-quality, short-term money market instruments issued by the U.S. government and its agencies and instrumentalities. Although these securities are high-quality, most of the securities held by the Fund are
neither guaranteed by the U.S. Treasury nor supported by the full faith and credit of the U.S. government. To be considered high quality, a security must be determined by Vanguard to present minimal credit risk based in part on a consideration of
maturity, portfolio diversification, portfolio liquidity, and credit quality. The Fund maintains a dollar-weighted average maturity of 60 days or less and a dollar-weighted average life of 120 days or less. The performance of the Interest Accumulation
Portfolio will reflect the blended earnings of the funding agreements, SICs, and Vanguard Federal Money Market Fund shares held by the Portfolio, minus the Portfolio’s expenses, including the benefit responsive charge paid to the issuers of
SICs and separate account funding agreements. The benefit responsive charges range from 0.15% to 0.20%. The Portfolio’s target duration is expected to range between 1.5 and 3.5 years. The Portfolio has a longer average maturity than most money
market funds, which should result in higher yields when interest rates are stable or declining. However, because only a portion of the Portfolio’s investment matures each year, its yield will change more slowly than that of a money market fund.
As a result, when interest rates are rising, the Portfolio’s yield may fall below money market funds’ yields for an extended time period.
Note: Ohio Short-Term Reserves Account’s investment in Vanguard Federal Money Market Fund is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Although the Vanguard Federal Money Market Fund seeks
to preserve the value of the investment at $1 per share, it cannot guarantee that it will do so. It is possible that Ohio Short-Term Reserves Account may lose money by investing in the fund. The Vanguard Group, Inc., has no legal obligation to provide
financial support to the fund, and there should be no expectation that the sponsor will provide financial support to the fund at any time.
An Account Owner cannot transfer assets in an account directly from Interest Accumulation Portfolio to an investment option that is considered a competing Investment Option or other Option that would have investment objectives, such as capital preservation,
which are similar to a stable value fund. Thus, reallocations from the Interest Accumulation Portfolio cannot be directly reallocated to the Short-Term Inflation-Protected Securities Index Option, Fifth Third 529 Savings Account Option, or the Fifth
Third 529 Certificate of Deposit Option. Before an Account Owner may direct the transfer of assets in an account from the Interest Accumulation Portfolio to the Short-Term Inflation-Protected Securities Index Option, Fifth Third 529 Savings Account,
or the Fifth Third 529 CD, or any other competing investment option that may later be added to the Plan, the Account Owner must first direct the transfer to an investment option, other than a competing investment option, for at least 90 days. After
90 days, the Account Owner may then instruct the Plan to transfer the applicable amount to the Short-Term Inflation-Protected Securities Index Option, Fifth Third 529 Savings Account, or the Fifth Third 529 CD, or any other competing investment option.
Account Owners should note that moving allocations from the Interest Accumulation Portfolio to a noncompeting investment option for at least 90 days, and then to the desired competing investment option, will each count toward the limited number of
times an Account Owner is permitted to direct changes in investment options for an account within a calendar year. Additional investment options could be restricted in the future, if the Ohio Tuition Trust Authority (OTTA) Investment Board votes to
add additional competing investment options to the Direct Plan.