Do you know if your 401k plan fees are reasonable?

Transcription

1 Presents Do you know if your 401k plan fees are reasonable? Securities offered through Raymond James Financial Services, Inc. Member FINRA/SIPC Wealth Management - Retirement Plan Consulting - Investments

2 Mee#ng Your Fiduciary Responsibili#es Offering a re*rement plan can be one of the most challenging, yet rewarding, decisions an employer can make. The employees par*cipa*ng in the plan, their beneficiaries, and the employer benefit when a re*rement plan is in place. Administering a plan and managing its assets, however, require certain ac*ons and involve specific responsibili*es. To meet their responsibili*es as plan sponsors, employers need to understand some basic rules, specifically the Employee Re*rement Income Security Act (ERISA). ERISA sets standards of conduct for those who manage an employee benefit plan and its assets (called fiduciaries). Mee#ng Your Fiduciary Responsibili#es provides an overview of the basic fiduciary responsibili*es applicable to re*rement plans under the law. This booklet addresses the scope of ERISA's protec*ons for private- sector re*rement plans (public- sector plans and plans sponsored by churches are not covered by ERISA). It provides a simplified explana*on of the law and regula*ons. It is not a legal interpreta*on of ERISA, nor is it intended to be a subs*tute for the advice of a re*rement plan professional. Also, the booklet does not cover those provisions of the Federal tax law related to re*rement plans.

3 Who is a Fiduciary? PLAN SPONSORS Using discre'on in administering and managing a plan or controlling the plan s assets makes that person a fiduciary to the extent of that discre*on or control A plan must have at least one fiduciary (a person or en*ty) named in the wri4en plan as the Named Fiduciary (for some plans, it may be an administra*ve commioee or a company s board of directors) Source: 3

4 Who is a Fiduciary? PLAN SPONSORS Source: A plan s fiduciaries will ordinarily include the trustee, investment advisers, all individuals exercising discre'on in the administra'on of the plan, all members of a plan s administra*ve commioee (if it has such a commioee), and those who select commioee officials. AOorneys, accountants, and actuaries generally are not fiduciaries when ac'ng solely in their professional capaci'es. 4

5 What are the du*es of a Fiduciary? Fiduciaries have important responsibili*es and are subject to standards of conduct because they act on behalf of par*cipants in a re*rement plan and their beneficiaries. These responsibili*es include: Ac*ng solely in the interest of plan par*cipants and their beneficiaries and with the exclusive purpose of providing benefits to them; Carrying out their du*es prudently; Following the plan documents (unless inconsistent with ERISA); Diversifying plan investments; and Paying only reasonable plan expenses. Source: 5

6 Understanding Re#rement Plan Fees And Expenses As the sponsor of a re*rement plan, you are helping your employees achieve a secure financial future. Sponsoring a plan, however, also means that you, or someone you appoint, will be responsible for making important decisions about the plan s management. Your decision making will include selec*ng plan investments or investment op*ons and plan service providers. Many of your decisions will require you to understand and evaluate the costs to the plan. The Federal law governing private- sector re*rement plans, the Employee Re*rement Income Security Act (ERISA), requires that those responsible for managing re*rement plans - - referred to as fiduciaries - - carry out their responsibili*es prudently and solely in the interest of the plan s par*cipants and beneficiaries. Among other du*es, fiduciaries have a responsibility to ensure that the services provided to their plan are necessary and that the cost of those services is reasonable. This booklet will help you beoer understand and evaluate your plan s fees and expenses. While the focus is on fees and expenses involved with 401(k) plans, many of the principles discussed in the booklet also will have applica*on to all types of re*rement plans. Remember, however, that this booklet provides a simplified explana*on of plan and investment fees. It is not a legal interpreta*on of ERISA or other laws, nor is it intended to be a subs*tute for the advice of a re*rement plan or investment professional.

7 The Regula*ons Emphasize the Legisla*on Regula#on n Form 5500 Schedule C changes n 408(b)(2) regula*ons for plan sponsor disclosure n 404(a)(5) regula*ons for par*cipant disclosure 7

8 Final Regula#on Rela#ng to Service Provider Disclosures Under Sec#on 408(b)(2) U.S. Department of Labor Employee Benefits Security Administra#on February 2012 The Employee Re,rement Income Security Act (ERISA) requires plan fiduciaries, when selec,ng and monitoring service providers and plan investments, to act prudently and solely in the interest of the plan's par,cipants and beneficiaries. Responsible plan fiduciaries also must ensure that arrangements with their service providers are "reasonable" and that only "reasonable" compensa,on is paid for services. Fundamental to the ability of fiduciaries to discharge these obliga,ons is obtaining informa,on sufficient to enable them to make informed decisions about an employee benefit plan's services, the costs of such services, and the service providers. Background The Employee Benefits Security Administra*on (EBSA) is responsible for administering and enforcing the fiduciary, repor*ng, and disclosure provisions of Title I of ERISA. The agency oversees approximately 718,000 private pension plans, including 498,000 par*cipant- directed individual account plans, such as 401(k)- type plans. In recent years, arrangements for how services are provided to employee benefit plans and how services providers are compensated (e.g., through revenue- sharing and other arrangements) have become increasing complex. Many of these changes have improved efficiency and reduced the costs of administra*ve services and benefits for plans and their par*cipants. However, the complexity resul*ng from these changes has made it more difficult for many plan sponsors and fiduciaries to understand how, and how much, service providers are compensated. This final rule establishes, for the first *me, specific disclosure obliga*ons for plan service providers to ensure that responsible plan fiduciaries are provided the informa*on they need to make beoer decisions when selec*ng and monitoring service providers for their plans. EBSA published an interim final rule (IFR) on July 16, 2010, and thereaher received approximately 45 wrioen comments from plan sponsors, fiduciaries, service providers, financial ins*tu*ons, and various industry representa*ves of employee benefit plans and par*cipants. The final rule replaces the IFR with minor changes and revisions.

9 408(b)(2) regula*on: Actual Regula*on The Department believes that plan fiduciaries need this informa*on, when selec*ng and monitoring service providers, to sa'sfy their fiduciary obliga'ons under ERISA sec'on 404(a)(1) to act prudently and solely in the interest of the plan s par*cipants and beneficiaries and for the exclusive purpose of providing benefits and defraying reasonable expenses of administering the plan. Number of #mes Reasonableness or Reasonable is men#oned in the regula#on: 49 9

10 408(b)(2) regula*on: Actual Regula*on But all of this s'll leaves a very important ques'on unanswered: How do we know if the fees we are being charged are reasonable??????? 10

11 Benchmarks Report Fees, Plan Design and Participant Success Measures ABC Company 401(k) Plan Report Provided by: Jane Jones Acme Consulting Fiduciary Benchmarks, Inc. Independent Comprehensive Informa*ve Copyright 2009 Fiduciary Benchmarks, Incorporated All Rights Reserved.

12 Reader's Guide and Benchmark Group WHAT IS THIS REPORT? The Fiduciary Benchmarks Fees, Plan Design, and Participant Success Measures Report provides comprehensive "apples-toapples" comparisons of a plan's fees, design, and participant success measures to those of a Benchmark Group of 41 similar plans. Note: Your report does not include performance evaluations of the plan's investment options. This important information is beyond the scope of this report and will typically be provided by the plan's advisor/consultant or recordkeeper. WHY IS IT IMPORTANT? Department of Labor regulations under ERISA and, specifically, section 408(b)(2) require that plan sponsors obtain fee disclosures for their plan and that all such fees be "reasonable" for the services being provided. The information in this report and other FBi reports can help in working with service providers to meet these requirements and improve the plan. Note: The Department of Labor (DOL) has stated that fees aren't everything. In effect, it can be reasonable to pay higher fees if a plan is receiving more or higher quality services or is attaining higher participant success measures than similar plans. HOW WAS THIS REPORT BUILT? We used a four-step process to build the report: We identified 41 similar plans ("Benchmark Group") for comparison. We identified all fees being paid for this plan. We examined the plan's design and associated complexity. We examined 10 participant success measures that indicate how well plan participants are preparing for retirement. HOW WAS THE BENCHMARK GROUP DETERMINED? We considered up to 9 relevant sort factors to identify the 41 similar plans that comprise the Benchmark Group. Benchmark Group Sort Factors This Plan Benchmark Group Plan Assets $6,327,657 $3mm - $10mm Number of Participants to 1000 Last Year You Bid or Reviewed Your Plan 2008 Last 3 years Company Industry Primary Metal Manufacturing All Plan Type 401(k) Defined Contribution Uses Auto-Enrollment For New Hires 29% Has Employer Match Yes 80% % of Plan Assets in Index Funds 16% 0% to 25% % of Plan Assets in Managed Accounts 0% 0% to 15% THIS PLAN'S SERVICE PROVIDERS Service Providers Used Across the Benchmark Group Service Provider Type % of Benchmark Group Using Service Provider Type This Plan's Specific Service Providers Recordkeeper 100% Recordkeeper, Inc. Advisor / Consultant 100% Acme Consulting Third-Party Administrator 0% None Other Service Providers 2% None HOW IS THIS REPORT BEST USED? FBi Reports are a key element in an annual plan review process. Maximum value is achieved when the plan's sponsor, its advisor or consultant, recordkeeper and other plan service providers participate. 1

13 Investment Lineup Summary This page provides a high-level comparison of the investment expenses for this plan versus the Benchmark Group. Investment expenses are typically the largest component of plan costs. These costs, however, should always be considered in conjunction with investment performance. Additional important investment fee data is available in the appendix and should be reviewed carefully as part of an investment review and monitoring process. HOW DOES THE PLAN'S TOTAL INVESTMENT EXPENSE COMPARE to the Benchmark Group? HOW DO THE TOTAL EXPENSE RATIOS FOR THE FUNDS COMPARE to the Benchmark Group? No funds are well below average cost 2 funds are below average cost No funds are average cost 5 funds are above average cost 6 funds are well above average cost the fees are 0.30% more than average Benchmark Plans with This Asset Category This Plan Disclosure of Total Expense in percent Benchmark Group Reasonableness of Total Expense of Benchmark Group in percent Fund Name Asset Category for This Fund Assets as of Sept - 09 Low Below Average Average Above Average High Core Options Stable Asset Fund Stable Value 78% $1,399, % 0.45% 0.60% 0.65% 1.16% 2.78% 0.49% Harbor Bond Instl 98% $407, % 0.28% 0.66% 0.90% 1.15% 1.74% 0.49% Intermediate-Term Bond Total Expense Ratio Difference from Average T. Rowe Price Equity Income Large Value 98% $386, % 0.45% 0.95% 0.98% 1.29% 1.68% 0.37% Vanguard 500 Index Signal Large Blend 100% $421, % 0.11% 0.35% 0.82% 1.22% 2.13% 0.06% T. Rowe Price Blue Chip Growth Large Growth 100% $485, % 0.65% 0.90% 1.10% 1.38% 1.66% 0.34% Vanguard PRIMECAP Large Growth 100% $188, % 0.65% 0.90% 1.10% 1.38% 1.66% 0.19% JPMorgan Mid Cap Value Instl Mid-Cap Value 83% $329, % 0.76% 0.90% 1.19% 1.41% 1.94% 0.25% Federated Mid-Cap Index Mid-Cap Blend 61% $567, % 0.25% 0.48% 0.90% 1.26% 1.93% 0.14% T. Rowe Price Mid-Cap Growth Mid-Cap Growth 88% $564, % 0.74% 1.17% 1.32% 1.55% 1.95% 0.15% Allianz NFJ Small Cap Value Instl Small Value 73% $263, % 0.63% 1.07% 1.26% 1.54% 2.69% 0.35% Vanguard Explorer Adm Small Growth 76% $346, % 0.69% 1.14% 1.34% 1.58% 2.97% -0.23% Harbor International Instl Foreign Large Blend 85% $575, % 0.82% 1.01% 1.14% 1.48% 2.24% 0.46% 5

14 Investment Lineup Summary Benchmark Plans with This Asset Category This Plan Disclosure of Total Expense in percent Benchmark Group Reasonableness of Total Expense of Benchmark Group in percent Fund Name Asset Category for This Fund Assets as of Sept - 09 Low Below Average Average Above Average High Automatically Diversified Options Vanguard Wellington Adm Moderate Allocation 59% $390, % 0.34% 0.79% 1.18% 1.53% 2.02% -0.16% Grand Totals $6,327, % 0.53% 0.72% 0.97% 1.25% 1.69% Total Investment Fees $80, Total Expense Ratio Difference from Average 6

15 Relative Plan Complexity Plan Complexity is an indicator of how the plan's design compares to other plan designs. Plan Complexity is neither good nor bad since every plan is designed to suit each employer's individual situation. What is important to know, however, is that a plan that is more complex can cost more to administer. Plan Provisions Eligibility - Service Requirement - Age Requirement - Automatic Enrollment Employee Contributions - Employee Pre-Tax - Automatic Increase - Employee Catch-up - Employee After-Tax - Employee Roth - Employee Rollover Employer Contributions - Employer Matching - Employer Matching Vesting Schedule - Employer Profit Sharing - Employer Profit Sharing Vesting Schedule - Employer Required Basic - Employer Required Basic Vesting Schedule Investments - Number of Investment Options - Auto Rebalancing - Risk-Based or Target Retirement Date Funds - Managed Account - Mutual Fund Window or Self-Directed Account - Company Stock Distributions - Loans Allowed - In-Service Withdrawals - Hardship Withdrawals - Installments - Lifetime Income Option - = plan provision not provided or not applicable This Plan's Provisions Percentage of Plans in Benchmark Group with a "Yes" for Plan Provision Maximum Cost Impact The Plan's Cost Impact Yes 24% 1 1 Yes 46% 1 1 For New Hires 29% new hires 4 2 Yes 100% 5 5 No 29% 1 0 Yes 93% 2 2 No 5% 3 0 No 15% 3 0 Yes 76% 1 1 Yes 80% 3 3 Graded 63% graded 2 2 Yes 56% 3 3 Graded 44% graded 2 2 No 7% 3 0-5% Avg: Yes 2% 1 1 Yes 98% 1 1 No 0% 3 0 No 12% 3 0 No 0% 4 0 Yes - up to 2 Avg: Yes 93% 2 2 Yes 83% 2 2 Yes 51% 2 2 No 24% 1 0 This Plan 35 HOW DOES FBi USE MAXIMUM COST IMPACT TO DETERMINE RELATIVE PLAN COMPLEXITY? Maximum cost impact expresses how much difficulty a certain plan provision adds to a plan's design. For example, multiple loans adds quite a bit of complexity to a plan versus an autoenrollment feature. In addition, for a provision like "Number of Investment Options," a plan with a high number of investment options compared to industry standards would receive 5 points. Alternatively, a plan with a low number of investment options would receive only 1 point. Relative Plan Complexity Score vs. the Benchmark Group HOW DOES THE PLAN COMPARE to the Benchmark Group with respect to PLAN COMPLEXITY? the maximum (most complex) score possible is 65 points the average plan's score was 25 this plan's score was 35 7

16 Participant Success Measures Participant Success Measures refers to 10 recognized industry statistics that measure how well a plan helps participants prepare for retirement. This page lists each of these 10 statistics and compares them to the Benchmark Group. Few areas are more central to reviewing fees from the perspective of "what you get for what you pay." Here, small changes can make big differences for participants. Participant Success Measures Plan's Current Participation Rate Average Deferral Percentage for Non-Highly Compensated Employees Average Deferral Percentage for Highly Compensated Employees % of Participants Maximizing Company Match % of Plan Assets in Automatically Diversified Options* % of Eligible Participants Making Catch-up Contributions % of Participants Using Auto-Rebalance Option % of Terminated Participants NOT "Cashing Out" % of Participants with a Personal Retirement Goal % of Participants On Track to Achieve That Goal This Plan's Participant Success Measures vs. The Benchmark Group Difference % of Plans Below Above from Measuring This Plan Low Average Average Average High Average 71% 5% 14% 49% 71% 90% 99% -66% 59% 4.4% 1.8% 3.8% 5.4% 7.1% 11.3% -1.0% 59% 6.7% 1.8% 5.0% 6.9% 7.8% 11.8% -0.1% 17% 27% 25% 27% 53% 79% 83% -26% 93% 6% 0.90% 7% 15% 25% 67% -9% 10% 4% 2% 3% 5% 18% 22% -1% 29% 50% 1% 2% 3% 14% 50% 48% 17% 39% 2% 3% 39% 61% 100% 0% 2% - 100% 100% 100% 100% 100% - 2% - 26% 26% 26% 26% 26% - * Includes balanced funds, risk or target-based retirement choices, model portfolios, and managed accounts. - = N/A or not available. # of Participant Success Measures Average or Better Percentage of Plans in Benchmark Group Average Plan 7 or more for 10 for 10 for 10 for 10 for 10 for 10 for 10 for 10 27% 22% 15% 20% 12% 2% 2% 0% HOW DOES THE PLAN COMPARE to the Benchmark Group with respect to these 10 important participant success measures? This plan ranks average or better in 1 out of 10 categories 27% of plans rank lower than this plan 51% of plans rank above this plan NO PLAN ranks average or better in more than 6 categories 8

17 Total Expense Ratio This Plan Benchmark Group Disclosure of Total Expense in percent Reasonableness of Total Expense in percent Credits to Credits Difference Assets as of Participants Advisor/ Investment to Total Below Above from Fund Name Sept - 09 Recordkeeper Consultant Manager ERISA Other Fee Low Average Average Average High Average Core Options Stable Asset Fund (1) $1,399, % 0.54% 0.25% 0.35% 0.00% 0.00% 1.14% 0.45% 0.60% 0.65% 1.16% 2.78% 0.49% Harbor Bond Instl $407, % 0.54% 0.25% 0.48% 0.00% 0.12% 1.39% 0.28% 0.66% 0.90% 1.15% 1.74% 0.49% T. Rowe Price Equity Income $386, % 0.54% 0.25% 0.56% 0.00% 0.00% 1.35% 0.45% 0.95% 0.98% 1.29% 1.68% 0.37% Vanguard 500 Index Signal $421, % 0.54% 0.25% 0.06% 0.00% 0.03% 0.88% 0.11% 0.35% 0.82% 1.22% 2.13% 0.06% T. Rowe Price Blue Chip Growth $485, % 0.54% 0.25% 0.61% 0.00% 0.04% 1.44% 0.65% 0.90% 1.10% 1.38% 1.66% 0.34% Vanguard PRIMECAP $188, % 0.54% 0.25% 0.47% 0.00% 0.03% 1.29% 0.65% 0.90% 1.10% 1.38% 1.66% 0.19% JPMorgan Mid Cap Value Instl $329, % 0.54% 0.25% 0.65% 0.00% 0.00% 1.44% 0.76% 0.90% 1.19% 1.41% 1.94% 0.25% Federated Mid-Cap Index $567, % 0.54% 0.25% 0.25% 0.00% 0.00% 1.04% 0.25% 0.48% 0.90% 1.26% 1.93% 0.14% T. Rowe Price Mid-Cap Growth $564, % 0.54% 0.25% 0.66% 0.00% 0.02% 1.47% 0.74% 1.17% 1.32% 1.55% 1.95% 0.15% Allianz NFJ Small Cap Value Instl $263, % 0.54% 0.25% 0.81% 0.00% 0.01% 1.61% 0.63% 1.07% 1.26% 1.54% 2.69% 0.35% Vanguard Explorer Adm $346, % 0.54% 0.25% 0.28% 0.00% 0.04% 1.11% 0.69% 1.14% 1.34% 1.58% 2.97% -0.23% Harbor International Instl $575, % 0.54% 0.25% 0.69% 0.00% 0.12% 1.60% 0.82% 1.01% 1.14% 1.48% 2.24% 0.46% Automatically Diversified Options Vanguard Wellington Adm (3) $390, % 0.54% 0.25% 0.20% 0.00% 0.03% 1.02% 0.34% 0.79% 1.18% 1.53% 2.02% -0.16% Grand Totals $6,327, % 0.25% 0.45% 0.00% 0.03% 1.27% 0.53% 0.72% 0.97% 1.25% 1.69% Total Expense Ratio in dollars $80, (1) (2) (3) (4) (5) This fund may be subject to a market value adjustment upon termination. If due to its structure, this investment does not report an explicit expense ratio and/or fee credit, a market based average will be applied. In addition, any applicable plan asset charges or wrap fees will also be applied. The resulting combined total expense ratio will be used for benchmarking. The characteristics and associated value of Guaranteed Rate investments varies based on such things as the current guaranteed rate, the minimum guaranteed rate, the terms and conditions of rate resets, the credit quality of the guarantor and other accruing benefits associated with investment. Accordingly, cost should always be considered in conjunction with an investment's overall value characteristics. A proprietary fund is defined as 'investments that are managed by the recordkeeper or its affiliates and includes choices where a sub-advisor has been hired.' The amount of assets or number of funds that are managed by the recordkeeper should not be the determining factor of the plan's final investment lineup. Ultimately, each option must be able to withstand the normal fiduciary due diligence of people, process, performance, cost, and other factors. This plan's allocation to proprietary choices is 0.00% of plan assets. The Benchmark Group average amount of assets in proprietary choices (where applicable) is 8%. Default option for the plan. This fund, referred to as an inactive choice, is no longer accepting new contributions. Average percentage of company stock in Benchmark Group when company stock exists is 0.00% with a range of 0.00% to 0.00%. A-2

18 Investment Fees Paid to Recordkeeper This Plan Disclosure of Recordkeeper Fee in percent * Note: Fees are inclusive of amounts referred to as revenue sharing, payments from insurance companies, and subsidiaries from investment managers. Credits to ERISA Credits to Payments Participants to Advisor Total Fee for Recordkeeper Benchmark Group Reasonableness of Recordkeeper Fee in percent (when it is being paid) Difference from Average Percentage of Plans Paying Fee to Recordkeeper Assets as of Fees from Wrap Below Above Fund Name Sept - 09 Investments* Fee Low Average Average Average High Core Options Stable Asset Fund $1,399, % 0.54% 0.00% 0.00% 0.25% 0.54% 0.12% 0.30% 0.48% 0.60% 2.50% 0.06% 68% Harbor Bond Instl $407, % 0.79% 0.00% 0.00% 0.25% 0.54% 0.08% 0.19% 0.31% 0.58% 1.01% 0.23% 88% T. Rowe Price Equity Income $386, % 0.64% 0.00% 0.00% 0.25% 0.54% 0.10% 0.22% 0.35% 0.60% 0.86% 0.19% 90% Vanguard 500 Index Signal $421, % 0.79% 0.00% 0.00% 0.25% 0.54% 0.06% 0.24% 0.39% 0.54% 1.86% 0.15% 90% T. Rowe Price Blue Chip Growth $485, % 0.64% 0.00% 0.00% 0.25% 0.54% 0.10% 0.21% 0.35% 0.52% 0.72% 0.19% 90% Vanguard PRIMECAP $188, % 0.79% 0.00% 0.00% 0.25% 0.54% 0.10% 0.21% 0.35% 0.52% 0.72% 0.19% 90% JPMorgan Mid Cap Value Instl $329, % 0.69% 0.00% 0.00% 0.25% 0.54% 0.18% 0.25% 0.31% 0.50% 1.31% 0.23% 76% Federated Mid-Cap Index $567, % 0.49% 0.00% 0.00% 0.25% 0.54% 0.08% 0.28% 0.43% 0.62% 0.86% 0.11% 54% T. Rowe Price Mid-Cap Growth $564, % 0.64% 0.00% 0.00% 0.25% 0.54% 0.12% 0.25% 0.40% 0.55% 0.70% 0.14% 80% Allianz NFJ Small Cap Value Instl $263, % 0.79% 0.00% 0.00% 0.25% 0.54% 0.10% 0.22% 0.32% 0.55% 2.02% 0.22% 63% Vanguard Explorer Adm $346, % 0.79% 0.00% 0.00% 0.25% 0.54% 0.12% 0.25% 0.43% 0.62% 2.00% 0.11% 68% Harbor International Instl $575, % 0.79% 0.00% 0.00% 0.25% 0.54% 0.12% 0.37% 0.52% 0.67% 2.22% 0.02% 63% Automatically Diversified Options Vanguard Wellington Adm $390, % 0.79% 0.00% 0.00% 0.25% 0.54% 0.14% 0.25% 0.40% 0.60% 0.88% 0.14% 56% Grand Totals $6,327, % 0.67% 0.00% 0.00% 0.25% 0.54% 0.17% 0.24% 0.30% 0.55% 1.00% Total Recordkeeper Fee in dollars $34, A-3

19 Investment Fees Paid to Advisor/Consultant This Plan Disclosure of Advisor/ Consultant Fee in percent Fee for Advisor/ Consultant Benchmark Group Reasonableness of Advisor/Consultant Fee in percent (when it is being paid) Difference from Average Percentage of Plans Paying Fee to Advisor/ Consultant Fund Name Assets as of Sept - 09 Other Payments* Low Below Average Average Above Average High Core Options Stable Asset Fund $1,399, % 0.10% 0.20% 0.25% 0.28% 0.52% 0.00% 66% Harbor Bond Instl $407, % 0.10% 0.20% 0.25% 0.25% 0.50% 0.00% 76% T. Rowe Price Equity Income $386, % 0.10% 0.20% 0.25% 0.30% 0.50% 0.00% 80% Vanguard 500 Index Signal $421, % 0.10% 0.20% 0.25% 0.25% 0.45% 0.00% 80% T. Rowe Price Blue Chip Growth $485, % 0.11% 0.24% 0.25% 0.29% 0.50% 0.00% 80% Vanguard PRIMECAP $188, % 0.11% 0.24% 0.25% 0.29% 0.50% 0.00% 80% JPMorgan Mid Cap Value Instl $329, % 0.10% 0.21% 0.25% 0.30% 0.55% 0.00% 63% Federated Mid-Cap Index $567, % 0.10% 0.17% 0.25% 0.30% 0.48% 0.00% 49% T. Rowe Price Mid-Cap Growth $564, % 0.10% 0.25% 0.25% 0.30% 0.53% 0.00% 66% Allianz NFJ Small Cap Value Instl $263, % 0.11% 0.25% 0.25% 0.26% 0.41% 0.00% 59% Vanguard Explorer Adm $346, % 0.14% 0.20% 0.25% 0.30% 0.58% 0.00% 59% Harbor International Instl $575, % 0.10% 0.20% 0.25% 0.30% 0.55% 0.00% 68% Automatically Diversified Options Vanguard Wellington Adm $390, % 0.13% 0.25% 0.25% 0.27% 0.56% 0.00% 49% Grand Totals $6,327, % 0.10% 0.20% 0.25% 0.25% 0.50% Total Advisor/Consultant Fee in dollars $15, * FF = Finders' Fee applies to this fund; C = Commissions apply to this fund; Calculated on New Contributions into the plan. A-4

20 Investment Fees Paid to Investment Managers This Plan Disclosure of Investment Manager Fee in percent Net Fee for Investment Manager Benchmark Group Reasonableness of Investment Manager Fee in percent Difference from Average Fund Name Assets as of Sept - 09 Low Below Average Average Above Average High Core Options Stable Asset Fund $1,399, % 0.04% 0.13% 0.35% 0.38% 0.54% 0.00% Harbor Bond Instl $407, % 0.19% 0.26% 0.43% 0.50% 0.64% 0.05% T. Rowe Price Equity Income $386, % 0.24% 0.36% 0.46% 0.62% 0.72% 0.10% Vanguard 500 Index Signal $421, % 0.05% 0.07% 0.27% 0.45% 0.96% -0.21% T. Rowe Price Blue Chip Growth $485, % 0.24% 0.27% 0.53% 0.64% 1.01% 0.08% Vanguard PRIMECAP $188, % 0.24% 0.27% 0.53% 0.64% 1.01% -0.06% JPMorgan Mid Cap Value Instl $329, % 0.39% 0.45% 0.66% 0.74% 0.92% -0.01% Federated Mid-Cap Index $567, % 0.05% 0.06% 0.28% 0.50% 0.91% -0.03% T. Rowe Price Mid-Cap Growth $564, % 0.44% 0.64% 0.72% 0.75% 1.11% -0.06% Allianz NFJ Small Cap Value Instl $263, % 0.23% 0.70% 0.75% 0.81% 0.93% 0.06% Vanguard Explorer Adm $346, % 0.27% 0.50% 0.78% 0.95% 1.03% -0.50% Harbor International Instl $575, % 0.39% 0.43% 0.53% 0.69% 0.80% 0.16% Automatically Diversified Options Vanguard Wellington Adm $390, % 0.19% 0.26% 0.34% 0.88% 0.95% -0.14% Grand Totals $6,327, % 0.23% 0.37% 0.42% 0.49% 0.59% Net Investment Mgr Fee in dollars $28, A-5

21 Investment Fees Paid to Others This Plan Disclosure in percent Benchmark Group Reasonableness of Other Fee in percent (when it is being paid) Difference from Average Percentage of Plans Paying Fee to "Others" Fund Name Assets as of Sept - 09 Other Fee* Low Below Average Average Above Average High Core Options Stable Asset Fund $1,399, % 0.00% 0.00% 0.00% 0.00% 0.55% 0.00% 76% Harbor Bond Instl $407, % 0.00% 0.00% 0.00% 0.03% 0.12% 0.12% 95% T. Rowe Price Equity Income $386, % 0.00% 0.00% 0.00% 0.02% 0.36% 0.00% 98% Vanguard 500 Index Signal $421, % 0.00% 0.00% 0.00% 0.03% 0.03% 0.03% 98% T. Rowe Price Blue Chip Growth $485, % 0.00% 0.00% 0.04% 0.05% 0.12% 0.00% 98% Vanguard PRIMECAP $188, % 0.00% 0.00% 0.04% 0.05% 0.12% -0.01% 98% JPMorgan Mid Cap Value Instl $329, % 0.00% 0.00% 0.00% 0.02% 0.12% 0.00% 83% Federated Mid-Cap Index $567, % 0.00% 0.00% 0.00% 0.04% 0.18% 0.00% 61% T. Rowe Price Mid-Cap Growth $564, % 0.00% 0.00% 0.00% 0.02% 0.27% 0.02% 88% Allianz NFJ Small Cap Value Instl $263, % 0.00% 0.00% 0.01% 0.05% 0.22% 0.00% 68% Vanguard Explorer Adm $346, % 0.00% 0.00% 0.00% 0.03% 0.08% 0.04% 71% Harbor International Instl $575, % 0.00% 0.00% 0.05% 0.11% 0.68% 0.07% 85% Automatically Diversified Options Vanguard Wellington Adm $390, % 0.00% 0.00% 0.00% 0.03% 0.07% 0.03% 59% Grand Totals $6,327, % 0.00% 0.00% 0.00% 0.03% 0.07% Total Other Fee in dollars $1, * The fees on this page represent the portion of total expense ratio for each investment choice paid out for custodial, legal, accounting, transfer agent, insurance and annuity, and other administrative expenses. A-6

22 Participant Fees This page provides a detailed list of the other fees being paid by participants. Participant Paid Fees - Annual per participant advice charge - Loan origination fee (per occurrence) - Loan maintenance fee (annual) - Hardship approval fee (per occurrence) - QDRO approval fee (per occurrence) - QDRO processing fee (per occurrence) - Periodic payment processing fee (per occurrence) - Non-Periodic payment processing fee (per occurrence) Benchmark Group Unit Cost % of Plans Difference Paying This Plan's Below Above from This Fee Unit Cost Low Average Average Average High Average 0% % $125 $40 $40 $75 $125 $138 $50 39% - $8 $8 $8 $21 $50-2% $100 $100 $100 $100 $100 $100-7% $100 $100 $100 $100 $250 $250-7% - $50 $50 $300 $300 $300-12% $50 $2 $2 $2 $38 $50 $48 22% $50 $20 $28 $50 $50 $100 - * "-" indicates that no participant-paid fee was identified for this service A-9

23 Other Fees This page provides a detailed list of the other fees being paid by the plan or the plan sponsor. Sevice Provider Description Fee Type Unit Other Fee Total How Fee is Paid Recordkeeper - Base plan charge $ amount $2,000 $2,000 By Sponsor Recordkeeper - Per participant charge $ amount $2,736 $2,736 By Participants Total Other Fees $4,736 Amounts identified as paid through an ERISA Account may exceed credited plan revenue or the assigned credit amount. When this occurs, the balance of listed fees are billed directly to the plan sponsor or against participant accounts. A-10

24 Service Providers' Fee Disclosure This page summarizes the fees paid to the plan's primary service providers. It's important to consider plan services when assessing fees reasonableness. Services are summarized in FBi's "Sponsor and Advisor Provided Services Report" and "Plan and Participant Services Report." Disclosure of Recordkeeper Fees Investment Fees Managed Account Fees Other Fees ERISA Spending Account Credit Total Fees RECORDKEEPER Plan Fee in Dollars % of Total Fee $34,169 88% $0 0% $4,736 12% - - $38, % Disclosure of Advisor/Consultant Fees Investment Fees Commissions Finders' Fees Other Fees Total Fees ADVISOR/CONSULTANT Plan Fee in Dollars % of Total Fee $15, % $0 0% $0 0% $0 0% $15, % Recordkeeper's Fees vs. Benchmark Group in percent Advisor/Consultant's Fees vs. Benchmark Group in percent HOW DO THE PLAN FEES COMPARE to the average in the Benchmark Group? HOW DO THE PLAN FEES COMPARE to the average in the Benchmark Group? this plan's recordkeeper fees are approximately 0.61% per year this is 0.20% more per year this is equal to $12,962 more per year this is $114 more per participant per year this plan's advisor/consultant fees are approximately 0.25% per year this is 0.00% less per year this is equal to $0 less per year this is $0 less per participant per year 3

25 Service Providers' Fee Disclosure This page summarizes the fees paid to the plan's primary service providers. It's important to consider plan services when assessing fees reasonableness. Services are summarized in FBi's "Sponsor and Advisor Provided Services Report" and "Plan and Participant Services Report." INVESTMENT MANAGERS Disclosure of Investment Manager Fees Investment Fees Total Fees Plan Fee in Dollars % of Total Fee $28, % $28, % Investment Manager's Fees vs. Benchmark Group in percent HOW DO THE PLAN FEES COMPARE to the average in the Benchmark Group? this plan's investment manager fees are approximately 0.45% per year this is 0.03% more per year this is equal to $1,842 more per year this is $16 more per participant per year 4

26 Plan Fees Summary This page provides an overall summary of the plan's fees, with comparisons to the Benchmark Group. It's important to consider plan services when assessing fees reasonableness. Services are summarized in FBi's "Sponsor and Advisor Provided Services Report" and "Plan and Participant Services Report." FEES Distribution of Total Plan Fees by Source Plan Fee in Dollars % of Total Fee Investment Fees $80,206 94% Commissions - 0% Finders' Fees - 0% Managed Account Fees - 0% Other Fees $4,736 6% ERISA Spending Account Credit - - Grand Total $84, % Distribution of Total Plan Fees by Service Provider Plan Fee in Dollars % of Total Fee Recordkeeper $38,905 46% Advisor/Consultant $15,819 19% Investment Managers $28,265 33% Managed Accounts Provider - 0% Other Service Providers & Fees $1,952 2% Grand Total $84, % Total Plan Fees vs. Benchmark Group in percent HOW DO THE PLAN FEES COMPARE to the average in the Benchmark Group? this plan's fees are approximately 1.34% per year this is 0.18% more per year this is equal to $11,541 more per year this is $101 more per participant per year 2

27 Questions? Securities offered through Raymond James Financial Services, Inc. Member FINRA/SIPC Retirement Plan Consulting - Investments - Individual Retirement Planning