408b2 FEE DISCLOSURE By: Kathy K. Walker, VP Simpkins Associates

1. 408(b)(2) FEE DISCLOSURE By: Kathy K. Walker, VP Simpkins & Associates

2. DISCLOSURE������. The information provided in this presentation is based upon complex requirements of the IRS and Treasury Regulations. Although care has been taken to present the material accurately, S&A disclaims any implied or actual warranties as to the accuracy of any material herein or completeness and any liability with respect thereto. Neither S&A nor its representatives give legal, tax or financial advice. This PowerPoint is intended to be used as an executive summary or overview.

3. 408(b)(2)Fee Disclosure Proposed regs issued December 13, 2007 Why the delay Department of Labor published interim final rule � July 16, 2010 Effective July 16, 2011 An interim final rule is a binding rule Can be replaced by a final rule following the comment period

4. 408(b)(2)Fee Disclosure The interim rule applies to �covered plans� Which plans are �covered plans� Which plans are excluded Are welfare plans included or excluded

5. 408(b)(2)Fee Disclosure The interim rule will apply to all contracts between covered plans and covered service providers in effect on July 16, 2011

6. 408(b)(2)FEE DISCLOSURE Form 5500 � Schedule C Form 5500 � Schedule A

7. 408(b)(2)FEE DISCLOSURE Must be in writing and include a description of the following: Services to be provided Direct compensation Indirect compensation Any compensation that will be paid to the service provider Transaction basis Charged against the plan�s investment and reflected n the net value of the investment

8. 408(b)(2)FEE DISCLOSURE Must be in writing � cont�d Any compensation that will be paid with the termination of a contract The manner in which the compensation will be paid Any compensation that will be charged directly against the amount invested The annual operating expenses Any ongoing expenses in addition to the annual operating expenses

9. 408(b)(2)FEE DISCLOSURE Bundled Services Unbundling Fees

10. 408(b)(2)FEE DISCLOSURE Exemption for Plan Fiduciary Prohibited Transaction Failure to comply

11. 408(b)(2)FEE DISCLOSURE Fee Disclosure to plan participants

12. Participant Fee Disclosure Final Rule Overview Fiduciary Act Participant Directed Accounts Notices

13. Participant Fee Disclosure Plan Related Information General Circumstances under which participants and beneficiaries may give investment instructions Specific limitations on such instructions Plan provisions relating to the exercise of voting rights (and restrictions) Identification of designated investment alternatives offered Identification of any designated investment managers

14. Participant Fee Disclosure Plan Related Information General Description of any �brokerage windows� that allow participants and beneficiaries to select investments outside those designated by the plan. Administrative Expenses Fees and expenses not included in the total operating expenses of any designated investment alternative

15. Participant Fee Disclosure Plan Related Information Administrative Expenses How will it be allocated Revenue Sharing, 12(b)-1 fees, sub transfer agent fees, etc. Individual Expenses Explanation of any fees or expenses based on actions taken by the participant, such as loans and QDRO�s

16. Participant Fee Disclosure Investment Related Information Identifying Information The name of each designated investment alternative Type or category of the investment

17. Participant Fee Disclosure Investment Related Information Performance Data Investments without a fixed rate of return Average annual return for 1, 5 and 10 year calendar periods Includes money market mutual funds and stable value funds Investments with a fixed rate The fixed or stated rate of return and the term of the investment

18. Participant Fee Disclosure Investment Related Information Benchmarks Investments without a fixed rate of return Name and returns of an appropriate broad-based securities market index of the preceding 1,5 and 10 year calendar returns

19. Participant Fee Disclosure Investment Related Information Fee and Expense Information Amount and description of each shareholder-type fee (that are not included in the total operating expense of the investment) Description of any restriction or limitation to any purchase transfer or withdrawal Total operating expenses expressed as a percentage ( i.e. expense ration)

20. Participant Fee Disclosure Investment Related Information Fee and Expense Information Total annual operating expense of the investment for a one year period expressed as a dollar amount for a $1,000 investment A statement that fees and expenses are only one factor to consider when making an investment decision

21. Participant Fee Disclosure Investment Related Information Fee and Expense Information A statement that the cumulative effect of fees and expenses can substantially reduce the growth of accounts and that participants and beneficiaries can visit the DOL EBSA website for a demo of the long term effect of fees and expenses

22. Participant Fee Disclosure Investment Related Information Plans with a fixed rate of return The amount and description of any restriction or limitation that may be applicable to a purchase, transfer or withdrawal of the investment

23. Participant Fee Disclosure Investment Related Information Internet website Name of the alternative�s issuer Alternative�s objectives or goals Alternative�s principal strategies and principle risks Alternative�s portfolio turnover rate Alternative�s performance data (must be updated at least quarterly) Alternative�s fees and expenses

24. Participant Fee Disclosure Investment Related Information Disclosures on or before first investment Glossary Comparative format Chart to facilitate the comparison of the investment related information Must be designed to facilitate a comparison for each designated investment alternative available under the plan

25. Participant Fee Disclosure Investment Related Information Comparative Format Must prominently display the date and include: Name, address and telephone number of the plan administrator to contact Statement that additional investment related information may be available at the listed website Statement explaining how to request and obtain free paper copies of information provided on the website, special disclosures about annuities, and special disclosures relating to fixed return investments

26. Participant Fee Disclosure Investment Related Information Annuity Options Name of the contract, fund or product Option�s objectives or goals Benefits and factors that determine the price of the guaranteed income payments Any limitations on the ability of a participant or beneficiary to withdraw or transfer amounts allocated to the option and any fees or charges applicable to the withdrawal or transfer

27. Participant Fee Disclosure Investment Related Information Annuity Options Any fees that will reduce the value of the amounts allocated by participants or beneficiaries to the option (surrender charges, market value adjustments, administrative fees) Statement that guarantees of an insurance company are subject to its long-term financial strength and claims paying ability

28. Participant Fee Disclosure Investment Related Information Annuity Options Internet website address that is sufficiently specific to provide participants and beneficiaries access to the following: Name of the issuer and of the fund, contract or product Description of the option�s goals and objectives Description of the option�s distribution alternatives/guaranteed income payments, including any limitations on the right of a participant or beneficiary to receive such payment

29. Participant Fee Disclosure Investment Related Information A description of costs and/or factors taken into account in determining the price of benefits under an option�s distribution alternatives/guaranteed income payments Description of any limitations on the right of a participant or beneficiary to withdraw or transfer amounts allocated to the option and any fees or charges applicable to a withdrawal or transfer Description of any fees that will reduce the value of amounts allocated by participants or beneficiaries to the option

30. Participant Fee Disclosure Investment Related Information Specific rules for Fixed Return Investments Website must include the following: Name of the alternative�s issuer Alternative�s objectives or goals Alternative�s performance data (updated at least on a quarterly basis) Alternative�s fees and expense information Special rules for Target Date Funds The DOL has reserved this provision in anticipation of pending separate guidance on target-date type funds