Faculty and Staff Retirement Programs Annual Report

Transcription

1 Faculty and Staff Retirement Programs Annual Report Fiscal Year Ending June 30, 2011

2 Table of Contents Executive Summary... 3 Key Accomplishments... 4 Demographic Analysis... 5 Financial Analysis... 5 Defined Benefit Plans... 5 Defined Contribution Plans... 6 Faculty Retirement Plan (FRP)... 6 Optional Retirement Plan (ORP)... 7 Section 457 Deferred Compensation Plan (457 Plan)... 8 Communications and Educational Resources... 9 Future Projects and Planning Appendix A Appendix B Appendix C Appendix D Appendix E Appendix F Appendix G P a g e

3 Retirement Plan and Program Analysis for the Fiscal Year Ending June 30, 2011 Executive Summary While much of the activity in retirement programs was limited to a few key projects in the fiscal year, those projects were substantial. On February 10, 2011, the Board of Regents approved the Retirement Incentive Option (RIO). Through this program, eligible employees could retire between February 15, 2011 and January 11, These eligible employees would receive a lump sum contribution to the Health Care Savings Plan, based on the University s subsidy amount for each coverage level (employee only, employee and spouse/domestic partner, employee and child/children, or employee and spouse/domestic partner and children), work location, and permanent residence as of the last day of employment. The window for program participation closed on May 15, 2011, with an acceptance rate of 7%, or approximately 400 faculty and staff. Those who accepted the window are prohibited from returning to benefits-eligible employment at the University and cannot return to any employment at the University for a minimum of three months following their retirement date. On June 9, 2011, the Board of Regents approved contribution rate changes to the University of Minnesota Faculty Retirement Plan (FRP). As of January 2, 2012, newly hired employees will contribute 5.5% with employer contributions at 10%. Employees currently in the FRP and/or waiting period as of December 31, 2011, will continue to contribute 2.5% and receive 13% in University contributions. While the initial cost avoidance provided by this change may be modest, it is anticipated to increase with increased turnover in the future. The change also places the FRP on more equal footing with the plans at its peer institutions, where higher contribution levels are the norm. Employee Benefits continues to work with the Retirement Subcommittee and its retirement vendors to enhance current plan offerings. During the year, several funds were added to the plans, and one vendor added personal rates of return an enhancement that ensures that regardless of the vendor selected, retirement plan participants all have access to this important plan feature. Benefits staff also issued a request for proposal (RFP) for disability programs in fiscal 2011, with a January 1, 2012, implementation date. Cigna was selected as the vendor of choice to provide administrative services for the self-insured Academic Disability Plan, as well as underwriting and claims processing for all of the insured disability products. The change in vendors from The Standard to Cigna is anticipated to save the University and its employees approximately 15% during the first two years and more than 20% in the next two years of the four-year contract. 3 P a g e

4 Key Accomplishments In the fiscal year ended June 30, 2011, several significant accomplishments were finalized in the retirement plan and program area. 1.) On February 10, 2011, the Board of Regents approved the Retirement Incentive Option (RIO). Through this program, eligible employees could retire between February 15, 2011 and January 11, These eligible employees would receive a lump sum contribution to the Health Care Savings Plan, based on the University s subsidy amount for each coverage level (employee only, employee and spouse/domestic partner, employee and child/children, or employee and spouse/domestic partner and children), work location, and permanent residence as of the last day of employment. The window for program participation closed on May 15, 2011, with an acceptance rate of 7%, or approximately 400 faculty and staff. 2.) On June 9, 2011, the Board of Regents approved a change in the contribution rate structure for the Faculty Retirement Plan. Eligible faculty and P&A employees who are hired on or after January 2, 2012 will contribute 5.5% of eligible compensation, and receive a University contribution of 10%, compared to the current 2.5% employee and 13% University contribution rates. This change was brought to the Board after a considerable amount of consultation across the faculty and P&A representative groups. 3.) Employee Benefits issued an RFP for disability programs, effective January 1, 2012, and Cigna was selected as the vendor of choice, replacing The Standard. Cigna will provide underwriting and administration for all insured disability plans as well as administrative only services for the self-insured first year of Academic Disability. 4.) In the spring of 2011, Securian added a personal rate of return to its website. All active investment providers (Fidelity, Scudder, Securian, and Vanguard) now offer a personalized rate of return feature, either on their websites or on their quarterly statements. This feature is an important part of the participant experience and vital information for a participant to have to ensure that his or her overall portfolio is performing as expected over time. 5.) On October 1, 2010, the Vanguard Emerging Markets Stock Index, the Vanguard International Explorer Fund were added as an international equity option in the Faculty Retirement Plan (FRP), Optional Retirement Plan (ORP), and the Section 457 Deferred Compensation Plan (457 Plan). 6.) The Vanguard Target Retirement 2055 Fund was added as an additional hybrid fund to utilize for diversification. 7.) Due to budgetary constraints, the Request for Proposal (RFP) for the Total Compensation Statement project has been put on hold indefinitely. 4 P a g e

5 Demographic Analysis During the fiscal year, 279 faculty and staff retired from the University of Minnesota. Retirement status at the University is based on one of three criteria: age 50 with a minimum of 15 years of service; age 55 or older with a minimum of 5 years of service; or a minimum of 30 years of service at any age. On average, 2011 retirees were 64 with 27 years of service. They earned approximately $74,752 annually. Retirement rates remained stable across employee groups. Additional retirement data on the various programs offered by the University is included below in Figure 1. Appendices A and B contain additional retirement demographic data for the past three fiscal years. Figure Retirement Data Retirements Non-incented Retirements 85 Phased Retirement 34 Terminal Agreement 2 Layoff Severance 23 Non Renewals 61 Retirement Incentive Option 74 Total 279 Financial Analysis The University of Minnesota sponsored or contributed to fourteen retirement plans and programs for its faculty and staff in the fiscal year ending June 30, 2011 (Appendix C). University contributions to these plans during the year exceeded $125 million, or more than 23 percent of the total fringe pool budget for the period. The University offers its faculty and staff a mix of defined contribution and defined benefit plans and programs, with substantially all full-time employees participating in one of several mandatory plans. Voluntary pre-tax savings plans are available to all employees paid on a regular basis. Defined Benefit Plans Defined benefit (DB) plans pay a certain monthly benefit at retirement, generally calculated using a percentage of compensation multiplied by years of service. For example, the Minnesota State Retirement System (MSRS) pays retirees a monthly benefit equal to 1.7% multiplied by the participant s average monthly compensation during his or her highest 5 years of service, multiplied by the participant s years of service. For a career employee with 35 years of service and a starting salary of $50,000, MSRS pays a monthly benefit of approximately 56% of the employee s final monthly salary. This percentage is commonly known as the plan s replacement ratio. Because a DB plan defines the benefit, not the funding level, risk is born by those entities responsible for funding the plan. As employers 5 P a g e

6 and employees share the funding requirements for MSRS, they similarly share the risk that contribution levels will need to increase in the future to cover benefits payable. The July 1, 2010, MSRS valuation indicates that the contributions, made as of that date, total 10.0%. This contribution rate represents the last of the currently scheduled rate increases. It should be noted that these increases do not increase benefits, but maintain them at existing levels. In addition, based on actuarial values, assets as of 7/1/10 are anticipated to fund approximately 87% of promised benefits on an actuarial basis. MSRS is the largest DB plan at the University, covering over 9,100 civil service and collectively bargained employees. The MSRS replacement ratio is identical to that of the defined benefit plans offered by the University s 5 benchmark public entities. Required contribution rates, however, are higher, as detailed below. As with MSRS, PERA contribution rates below represent the last of the scheduled rate increases from January 1, 2007 through January 1, Again, these contribution increases do not increase benefits, only maintain them. Figure 2 Defined Benefit Benchmarks Current Employee Contribution Current Employer Contribution Estimated Replacement Ratio Percentage of Pay University of Minnesota 1.7% 5.0% 5.0% 56% State of Minnesota 1.7% 5.0% 5.0% 56% Ramsey County 1.7% 6.25% 7.25% 56% Hennepin County 1.7% 6.25% 7.25% 56% City of Minneapolis 1.7% 6.25% 7.25% 56% City of St. Paul 1.7% 6.25% 7.25% 56% Defined Contribution Plans Defined contribution (DC) plans do not promise a benefit at retirement. Instead, DC plans promise a certain contribution level, which is generally invested according to the participant s direction. As a result, the participants, rather than the employer, bear the risk that their investments will not result in adequate retirement income. Faculty Retirement Plan (FRP) As of June 30, 2011, FRP assets totaled over $2.7 billion, with annual contributions of over $118 million. Employees contribute 2.5% of salary, with the University contributing an additional 13% of salary, which is deposited according to the employees investment instructions each pay period. These rates will change to employee contributions of 5.5% and University contributions of 10%, effective for those newly-hired on or after January 2, The plan offers 54 investment funds from Securian Retirement Services, TIAA-CREF, Fidelity, and Vanguard. Securian holds the majority of FRP funds, with 45% of total assets invested in Securian/Minnesota Life products. Vanguard follows with 35% of total assets. TIAA-CREF and Fidelity trail with 14% and 7%, respectively. The investment funds with the largest asset base as of June 30, 2011, are listed in Figure 3 on the following page. Details on the best- and worst-performing investment funds in the FRP are included in Appendix D. 6 P a g e

7 Figure 3 Top 3 FRP Funds by Assets Invested as of June 30, 2011 FRP Assets Invested 06/30/11 Minnesota Life General Account Limited* $834,861, Vanguard Institutional Index $252,816, Minnesota Life General Account* $222,645, *Additional information regarding the company credit ratings and fund size of the insurance company general accounts is included in Appendix E. The FRP, covering over 7,000 faculty and professional and administrative (P&A) staff, is the largest DC plan at the University of Minnesota. Most of the other Top 10 Public Research Universities have defined benefit plans, making comparisons difficult. The other defined contribution plans, however, generally have higher replacement ratios and higher contribution rates as shown in Figure 4, below. Figure 4 Defined Contribution Benchmarks Employee Contribution Employer Contribution Estimated Replacement Ratio University of Minnesota 2.5% 13.0% 60% University of Florida (DB Plan) N/A N/A N/A University of Illinois (DB Plan) N/A N/A N/A University of Michigan 5.0% 10.0% 59% Ohio State University (Choice - DC Plan) 10% 14% 90% (no SS) Penn State University (DB Plan) N/A N/A N/A University of Texas (DB Plan) N/A N/A N/A University of California Berkeley (DB Plan) N/A N/A N/A University of California Los Angeles (DB Plan) N/A N/A N/A University of Washington Seattle 5%-10% 5%-10% 78% max University of Wisconsin (DB Plan) N/A N/A N/A Optional Retirement Plan (ORP) As of June 30, 2011, ORP assets totaled over $886 million, with 4,300 full- and part-time employees contributing close to $40 million annually. Employees may contribute a minimum of $200 annually up to 100% of compensation. The maximum contribution for employees under age 50 in 2011 is $16,500. The maximum contribution for employees age 50 and over in 2011 is $22,000. The University may make discretionary contributions for select staff, based on employment contracts. Only 12 such contributions were made for the fiscal year. The plan offers over 300 investment funds from Securian Retirement, Fidelity, Scudder, and Vanguard. Some additional funds are invested at T Rowe Price, though T Rowe accounts have been closed to new contributions since the early 1990s. TIAA-CREF funds were closed to new contributions and transfers as of July 1, The investment providers and funds with the largest asset base as of June 30, 2011, are listed in Figures 5 and 6 on the following page. Details on the best- and worst-performing investment funds in the ORP are included in Appendix F. 7 P a g e

8 Figure 5 ORP Assets by Investment Provider as of June 30, 2011 Investment Provider ORP Assets Invested 06/30/11 Fidelity Investments 35% Securian Retirement 30% The Vanguard Group 22% TIAA-CREF 10% DWS Scudder Investments 3% T Rowe Price 0% Figure 6 Top 3 ORP Funds by Assets Invested as of June 30, 2011 ORP Assets Invested 06/30/11 Minnesota Life General Account Limited* $150,604, Fidelity Contrafund $49,989, Minnesota Life General Account* $47,772, *Additional information regarding the company credit ratings and fund size of the insurance company general accounts is included in Appendix E. Section 457 Deferred Compensation Plan (457 Plan) As of June 30, 2011, 457 Plan assets totaled over $95 million, with over 840 full- and part-time employees contributing over $11 million annually. This plan is significantly smaller than the ORP because it has only been available since Employees contribute any amount up to 100% of compensation annually. The maximum contribution for employees under age 62 or over age 64 in 2011 is $16,500. Additional contributions are available for those who are age 62, 63 or 64 in These contribution limits are in addition to those contributions permitted to the ORP. Contributions to the ORP and 457 plans are not mutually exclusive that is, an employee may contribute to both plans at the same time. The plan offers over 250 investment funds from Securian Retirement, Fidelity, and Vanguard. TIAA-CREF funds were closed to contributions and transfers as of July 1, Unlike the ORP, Scudder elected not to participate in the 457 Plan. In addition, the General Account and the TIAA Traditional Annuity (RA) are not available in the 457 Plan. The investment providers and funds with the largest asset base as of June 30, 2011, are listed in Figures 7 and 8 below. Details on the best- and worst-performing investment funds in the 457 Plan are included in Appendix G. Figure Plan Assets by Investment Provider as of June 30, 2011 Investment Provider 457 Plan Assets Invested 06/30/11 The Vanguard Group 46% Fidelity Investments 23% Securian Retirement 22% TIAA-CREF 9% 8 P a g e

9 Figure 8 Top Plan Funds by Assets Invested as of June 30, Plan Assets Invested 06/30/11 Minnesota Life General Account Limited* $12,373, Vanguard 500 Index $3, TIAA Traditional Annuity* $3,247, *Additional information regarding the company credit ratings and fund size of the insurance company general accounts is included in Appendix E. Communications and Educational Resources In the fiscal year, Employee Benefits staff offered 41 informational sessions on retirement topics to University faculty and staff. In addition to twelve New Employee Orientation sessions and three full days of Benefits Fairs in St. Paul, Minneapolis, and Duluth, 30 retirement-specific seminars were offered on campus, as shown below in Figure 9. Figure 9 Retirement Seminars Provided to Faculty and Staff Faculty Retirement Plan (FRP) Enrollment Seminars Voluntary Retirement Plan Seminars Number of Sessions Offered 12 (year-round) 8 (monthly, year-round) Pre-Retirement Seminars 3 (February/March 2011) Brown Bag Investing Seminars 3 (February 2011) Total 26 Target Audience Faculty and professional and administrative (P&A) staff newly eligible for the FRP Any faculty and staff interested in more information on the Optional Retirement Plan and Section 457 Deferred Compensation Plan Faculty and staff age 55 or over, including spouses and partners Any faculty and staff interested in the seminar topics presented by ORP investment managers The Pre-Retirement Seminars are popular offerings each spring, with approximately 669 attendees in (All active faculty and staff over the age of 55 are invited to these seminars, as well as spouses or partners.) Topics included not only specifics regarding the University s mandatory plan retirement benefits, but also sessions on Social Security and Medicare, retiree medical and dental insurance, and anticipated lifestyle changes in retirement. Optional Retirement Plan investment managers offer the Brown Bag Investing Seminars in the Donhowe Building over the lunch hour each spring. In February 2011, Vanguard, Securian Retirement, and Fidelity participated. Topics included: Investment Perspectives Webinar, A Perspective on Today s Economy and Portfolio Diversification, and Remaining Confident in a Volatile Market. These sessions, as all seminars, are offered free of charge 9 P a g e

10 to faculty and staff. In addition to formal presentations, Benefits Counselors were available throughout the year for individual meetings and retirement planning sessions. In addition to seminar and individual meeting efforts throughout the year, Employee Benefits provides significant information via both printed materials and the Employee Benefits website. The website includes not only plan information and links to the investment provider websites, but also investment return reporting and fund listings, which are updated each quarter. The website, at continues to be the best resource for quick information on University retirement plans and programs. Future Projects and Planning Employee Benefits, in conjunction with various administrative and employee groups, has the following projects proposed for upcoming years: 1.) Though the window for RIO has closed, the final retirement date for those accepting the program will not be until January 11, 2012, so much work is yet to be done to retire these individuals and ensure that their payments are remitted to the State s HCSP properly. 2.) Changes to the FRP contribution rate structure will be implemented as of January 2, Ongoing work will be necessary to ensure that employees are contributing at the appropriate levels, given that those in the waiting period will enter the plan after January 2, 2012, but at the pre-2012 contribution rates. 3.) A significant amount of work is in process to implement Cigna as the new disability vendor as of January 1, In addition, the change to a new vendor means that Employee Benefits may be working with up to three different disability providers, depending on the date of the claim: Minnesota Life, The Standard, or Cigna are all possible providers and will complicate ongoing administration. 4.) Administration continues to review the Retirement Subcommittee s request to add the Roth 403(b) option in the Optional Retirement Plan. While there is general agreement that this option may be beneficial to certain participants in the plan, current budget constraints prohibit its implementation at this time, due to the cost of PeopleSoft programming and modifications required. Employee Benefits will continue to monitor the budget situation, and if funds become available, reevaluate the feasibility of the project in future years. 5.) The Retirement Subcommittee continues to review investment options for the Faculty Retirement Plan, Optional Retirement Plan, and the Section 457 Deferred Compensation Plan. It is anticipated that the work scheduled or underway will continue to maintain and enhance the attractiveness of the University of Minnesota s retirement programs. Any questions on this report should be referred to the Employee Benefits department at or (option 2). 10 P a g e

11 Appendix A Total Retirement by Program Non-Incented Retirement Phased Retirement Terminal Agreement Layoff Severance* Non Renewal* Retirement Incentive Option Total Retirees as a % of Active 6/30/11 Population Average Age at Retirement (in years) Average Salary at Retirement $73,944 $69,485 $77,594 $74,752 Average Service at Retirement (in years) Males Females Retirement by Employee Group Faculty % Average Age at Retirement (in years) Average Salary at Retirement $102,838 $99,457 $107,157 $101,900 Average Service at Retirement (in years) Professional and Administrative % Average Age at Retirement (in years) Average Salary at Retirement $85,907 $80,130 $89,367 $88,224 Average Service at Retirement (in years) Civil Service % Average Age at Retirement (in years) Average Salary at Retirement $60,134 $57,868 $60,166 $62,368 Average Service at Retirement (in years) Collectively Bargained % Average Age at Retirement (in years) Average Salary at Retirement $45,280 $40,487 $48,838 $46,516 Average Service at Retirement (in years) *Though the layoff severance and non-renewal programs are not retirement programs, 498 individuals who qualified for University retirement left under these programs from July 1, 2002 through June 30, P a g e

12 Appendix B Retirements by Campus, College or Administrative Unit 07/01/10 06/30/11 Phased Retirement Terminal Agreement Layoff Non- Renewal Normal Retirement Retirement Incentive Option Campuses Crookston Campus Duluth Campus Morris Campus Academic Health Center Units Academic Health Center - Shared Twin Cities Colleges Carlson School of Management College of Biological Sciences College of Continuing Education College of Design College of Ed and Human Development College of Food, Ag/Nat Resource Sciences College of Liberal Arts College of Pharmacy College of Veterinary Medicine Graduate School Institute of Technology Law School Medical School School of Dentistry School of Nursing School of Public Health Other Athletics Auxiliary Services Board of Regents Boynton Health Service Capital Planning/Project Mgmt Controller's Office Extension Service Facilities Management General Counsel Information Technology International Programs Office of Human Resources Office of University Relations Office of Public Safety Research Undergraduate Education University Libraries University Services VP/V Provost Equity and Diversity Total Total Retirements P a g e

13 Appendix C Retirement Plans and Programs at the University of Minnesota Plan/Program Type* Employee Group Participation University of Minnesota Faculty Retirement Plan University of Minnesota Optional Retirement Plan University of Minnesota Section 457 Deferred Compensation Plan Minnesota State Retirement System General Plan Public Employees Retirement Association Civil Service Retirement System Civil Service Retirement System Offset Retirement Minnesota Health Care Savings Plan Federal Employees Retirement System University of Minnesota 415(m) Retirement Plan Special Retirement Plan of the Board of Regents of the University of Minnesota Terminal Agreement Programs Phased Retirement Program University of Minnesota Supplemental Benefits Plan DC DC DC Faculty and Professional and Administrative Staff Substantially all Faculty and Staff Substantially all Faculty and Staff Eligible Active Employees on June 30, 2011 FY Employee Contributions (millions) FY University Contributions (millions) 7,000 $19.1 $ ,000+ $39.3 $0.4 20,000+ $11.3 N/A DB Civil Service and Represented Bargaining Unit Staff 9,100 $21.3 $21.3 DB Law Enforcement Staff 62 $0.5 $0.7 DB Certain Federal Staff 95 $0.4 $0.3 DB Certain Federal Staff 10 $0.01 $0.03 DC Civil Service, LELS 218 $.04 $1.1 Teamsters, RIO DB Certain Federal Staff 233 $0.1 $1.0 DC Select administrators 12 N/A $0.7 DB Former employee only no current participation DC (Policy) DC (Policy) DB (Policy) Tenured Faculty and Continuous Appointment Academic Professionals Tenured Faculty and Continuous Appointment Academic Professionals Pre-1963 FRP participants and pre-1982 female FRP annuitants *DC Defined Contribution Plan, DB Defined Benefit Plan 0 N/A N/A N/A N/A N/A N/A N/A N/A 218 N/A $.4 13 P a g e

14 Appendix D Faculty Retirement Plan Fund Performance as of June 30, 2011 Highest-Performing FRP Funds (Excluding Money Market Funds) Annualized Investment Return 1-year Return Fidelity OTC Portfolio Fund 41.21% Vanguard Extended Market Index Fund 39.47% Vanguard Small-Cap Index Fund 39.44% 5-year Return Vanguard Emerging Markets Stock Index Fund 10.94% Fidelity OTC Portfolio Fund 10.42% Fidelity Strategic Income Fund 8.49% 10-year Return Vanguard Emerging Markets Stock Index Fund 15.52% Vanguard International Explorer Fund 9.76% Fidelity Strategic Income Fund 8.71% Lowest-Performing FRP Funds (Excluding Money Market Funds) Annualized Investment Return 1-year Return Minnesota Life General Account Fund 3.00% Minnesota Life General Account Limited Fund 3.83% Vanguard Long Term Investment Grade Fund 4.87% 5-year Return Vanguard Windsor II Fund 2.01% Vanguard Global Equity Fund 2.06% Vanguard International Index Fund 2.12% 10-year Return Vanguard Institutional Index Fund 2.69% Vanguard Growth Index Fund 3.44% Vanguard Total Stock Market Index Fund 3.67% 14 P a g e

15 Appendix E Insurance Company General Account Supplemental Information Insurance company general accounts (Minnesota Life General Account, Minnesota Life General Account Limited and TIAA Traditional Annuity) pay a rate of interest determined from time to time by the respective company. They are less subject to market risk but more subject to inflation and interest-rate risks. They historically provide investment returns lower than more volatile investment options. While these accounts promise a minimum 3% return on principal, they are backed with respect to both principal and interest solely by each company s financial strength and credit. Additional information regarding the insurance companies financial soundness may be obtained directly from them. Company Credit Ratings (as of August 5, 2011) Credit Rating Agency Minnesota Life TIAA-CREF Standard & Poor s A+ AA+ Moody s Aa3 Aaa A. M. Best A+ A++ Fitch A+ AAA University of Minnesota Retirement Plan Holdings as of June 30, 2011 (in millions) Minnesota Life TIAA-CREF Faculty Retirement Plan $1,207.9 $135.7 Optional Retirement Plan $200.1 $34.7 Section 457 Deferred Comp Plan $12.4 $3.2 Total $1,420.4 $173.6 Total Fund Assets $12,100 $200, P a g e

16 Appendix F Optional Retirement Plan Fund Performance as of June 30, 2011 Highest-Performing ORP Funds (Excluding Money Market Funds) Annualized Investment Return 1-year Return Fidelity Select Energy Service Fund 68.08% Fidelity Select Chemicals Fund 66.10% Fidelity Select Energy Fund 55.42% 5-year Return Fidelity Select Chemicals Fund 14.54% Fidelity Select Gold Fund 13.10% Fidelity Latin American Fund 13.08% 10-year Return Vanguard FTSE All-World ex-us Small-Cap Index Fund 36.97% Fidelity Global Commodity Stock Fund 28.16% DWS Gold & Precious Metals Fund 21.25% Lowest-Performing ORP Funds (Excluding Money Market Funds) Annualized Investment Return 1-year Return Vanguard Long Term Treasury Fund (1.67%) Fidelity Spartan Long Term Treasury Bond Fund (1.49%) Advantus Money Market Fund (0.15%) 5-year Return Fidelity Select Home Finance Fund (20.17%) Fidelity Select Financial Services Fund (8.92%) Fidelity Select Banking Fund (8.19%) 10-year Return Fidelity Select Home Finance Fund (7.54%) Fidelity 130/30 Large Cap Fund (6.92%) Fidelity Total International Equity Fund (5.27%) 16 P a g e

17 Appendix G Section 457 Deferred Compensation Plan Fund Performance as of June 30, 2011 Highest-Performing 457 Plan Funds (Excluding Money Market Funds) Annualized Investment Return 1-year Return Fidelity Select Energy Service Fund 68.08% Fidelity Select Chemicals Fund 66.10% Fidelity Select Energy Fund 55.42% 5-year Return Fidelity Select Chemicals Fund 14.54% Fidelity Select Gold Fund 13.10% Fidelity Latin American Fund 13.08% 10-year Return Vanguard FTSE All-World ex-us Small-Cap Index Fund 36.97% Fidelity Global Commodity Stock Fund 28.16% Fidelity Select Gold Fund 20.20% Lowest-Performing 457 Funds (Excluding Money Market Funds) Annualized Investment Return 1-year Return Vanguard Long Term Treasury Fund (1.67%) Fidelity Spartan Long Term Treasury Bond Fund (1.49%) Advantus Money Market Fund (0.15%) 5-year Return Fidelity Select Home Finance Fund (20.17%) Fidelity Select Financial Services Fund (8.92%) Fidelity Select Banking Fund (8.19%) 10-year Return Fidelity Select Home Finance Fund (7.54%) Fidelity 130/30 Large Cap Fund (6.92%) Fidelity Total International Equity Fund (5.27%) 17 P a g e