The URL can be used to link to this page

Home My WebLink AboutDeferred Compensation May 28, 2008 Elizabeth A. Neville Town Clerk 53095 Route 25 P.O. Box 1179 Southold, NY 11971-0959 ' I't l ~; H:v~~rrol~u ,~ r~~~~t~u~~~ ~„ v, r Re: Request for Proposal for the Town of Southold, NY's 457 Deferred Compensation Plan Dear Ms. Neville: Thank you for giving The Hartford the opportunity to submit a response to the Town of Southold, NY's Request for Proposal. We are excited about the opportunity to continue to provide a competitive, quality product to meet the needs of the Town and its employees. The Hartford has distinguished itself from its competitors by providing what we call "The Hartford Experience" to all of our customers and partners. We feel our extensive experience in the public-employer retirement plan marketplace in conjunction with our ability to be flexible and creative allows us to meet the needs of our clients. By providing access to some of the best-known money managers, informative customer communications, and local personalized attention to participants and plan sponsors, we will continue to bring "The Hartford Experience" to the Town. We have proposed a diverse selection of variable investment choices including a General (Declared Rate) Account yielding a competitive rate-of-return. Our educational model focuses on face-to face meetings with employees at both the group and individual level. Supporting this core service is our state-of-the-art interactive software that provides a level of functionality at the leading edge of our industry. In conclusion, we look forward to the opportunity to discuss the value The Hartford will continue to deliver with the strong local presence of Mark Gagea of the Roy Reeve Agency, and the ability to work with the Town to meet the needs of its participants. The attached Proposal demonstrates The Hartford's commitment to continue to perform all of the services outlined in the Town's Request for Proposal. if you have any questions pertaining to the enclosed material, please feel free to contact Jeff Morrow, Vice President, at (860) 843-6630 or via email at j effrey. morrow(i;.hart ford I i fe. com. Sincerely, _~~ ~~.~. .- Jamie Ohl Vice President, Product, Pricing and Retention Retirement Plans Group TI IF, HAKITORD ' "The Hartford" fs The Hartford Financial Services Ciroup, Ina and its subsidiaries, including the is's'uing company of I Iartford Life Insurance Company. SccunGcs orfcrcd through ^urt(ord Gyuity Sules' Company. Inc 200 Hopmeadow Strec~ Simsbury, C'r 06089 1-800-5?8-9009 Executive Summary Right now you are facing one of the most important decisions you will make for your employees. Choosing the right retirement benefits for the Town of Southold's employees can be difficult. With so much on the line, it's important to select a company like The Hartford with over 37 years experience providing full service retirement programs to organizations like the Town. The Hartford is fully experienced in deferred compensation plans in New York State and has been since 1985. The Hartford has grown to be a leading provider of New York State 457 programs, and currently provides full-service administration to aver 68 New York entities. Our average client relationship exceeds 16 years and includes some of the nation's largest public employers. The Hartford is a 12-time winner of The DALBAR Service Award. This Award symbolizes the M achievement of the highest tier of service to customers within the financial services industry. It is awarded only to those firms that exceed industry norms in key service areas. The winners of this award can confidently consider themselves service leaders within the financial services industry. Our average client relationship exceeds 16 years and includes some of the nation's largest employers. We provide services to an impressive number of clients. A short list of our clients includes: • County of San Joaquin, CA State of Maine • Hillsborough County, FL City of Pasadena, CA • State of California City of Oakland, CA • State of Nevada Contra Costa County, CA A partial listing of our New York clients includes: • Broome County Madison County • Cattaraugus County • City of Batavia • Onondaga County • Ontario County • City of Rochester • City of Syracuse • Otsego County • Rockland County • City of Chicago, IL • Chicago Public Schools, IL • City of Las Vegas, NV • City of Detroit, MI • Sanitary District #6 • Town of Clarkstown • Town of Easthampton • Town of Huntington • Town of Southampton • Incorporated Village of Sanitary District #2 Wayne County Port Jefferson "The Hart/ord" is The Hartford Financial Services Group. Inc. and ifs subsidiaries. including issuing company Hartfo~o • Life Insurance Company. 1 of 6 Value Competitive Pricing Our competitive proposal includes the following: Plan Administrative Fee The Hartford will offer a group variable annuity program to the Town that incorporates a wide array of investment choices, award-winning customer service, state-of- the-art technology, investment advisory services, plan oversight and a comprehensive education program for your participants all for an administrative fee of 0.25% (25 basis points)`. "Pricing assumes the transfer of Nationwide assets, has no termination fees, assets have no restrictions, and the electronic transmission ofparticipant contributions. Currently, the Town utilizes our DCPIus program which is funded by a group variable annuity contract and will address the needs of the Town's 457 Deferred Compensation program. No Contingent Deferred Sales Charges (CDSC) or Participant Account Charges The Hartford is confident you will be so impressed with our program that you will remain a customer indefinitely. The Hartford will continue to "earn" your business on the merits of the services we provide to the Town and its employees. If we do not meet our standards or deliver on our promises, you will be free to replace us at no charge. Total Value Proposition The Hartford's program contains no additional charges or fees, unless specifically noted. Services included in our proposal consist of education, enrollment, Trustee services, Interactive Voice Response system and Internet website with access to online investment guidance at no additional cost. 2 of6 Investments A Wide Array of Investment Choices Investment Option Flexibility Investment flexibility is a key feature of our product. The Hartford has long-standing, reputable relationships with over 80 fund family alliances representing over 800 investment options. We are able to offer an investment option lineup that is managed to stringent measurement criteria and is diverse across all asset classes and fund families. Our investment options are designed to meet the specific objectives of the plan sponsor and their participants. The Hartford is committed to retaining the current lineup, which includes grandfathering the Fidelity Contra Fund. General (Declared Rate) Account i The Hartford's General (Declared Rate) Account has historically provided very competitive returns to investors seeking a guarantee of principal and a declared rate of return. The interest rate for new deposits is 4.00% for the Town's plan and is guaranteed through September 30, 2008. In addition, for the life of the contract the General Account will not credit less than 4.00%. Investment Due Diligence One of the mast important decisions facing retirement plan fiduciaries is the selection and monitoring of the investment options that will be made available to participants. The Hartford recognizes the challenges facing plan fiduciaries, and helping them understand their obligations is one our top priorities. The Hartford's Investment Program due diligence process provides you with access to a diverse menu of investment options managed by some of the most well-known investment managers. We have developed a broad list of investment options for our platform, spanning a wide range of asset classes and investment styles, from which the plan fiduciary can easily construct a diversified investment lineup. f.._I 3of6 Service & Technology Access to Award-Winning Service d and Technology ~ .. ... _ The Hartford's Retirement Plans Website - ~, ~, The Hartford provides dynamic Internet services to our plan sponsors and their participants. Plan sponsors have the flexibility to customize their website by adding their logo and incorporating plan specific content to the website in areas that _ are available for custom messaging. ' For employees who have not yet participated in the plan, The Hartford provides informative articles regarding retirement plans and interactive retirement savings calculators. The simple 3-step "Plan- Invest-Act" system, available prior to login, offers educational content including these topics: Plan d • Why save for retirement? • Retirement plan basics ~ ~ • The cost of procrastination ~ " .__... - _ Invest • What kind of investor am I? _ __ __.-_ ~ • Types of investment options _-- - g • How much can I contribute? _-- - ` _: ~ ---- - • Importance of rebalancing account - - • Why increase contributions s, • Frequently asked questions Award-Winning Service • Internet access 24 hours-a-day, 7 days-a-week • Interactive Voice Response system access 24 hours-a-day, 7 days-a-week featuring Voice Recognition technology • Customer Service Representatives available Monday through Friday, 8:00 a.m. to 8:00 p.m., Eastern Time • Electronic Enrollment "E-enroll" access 24 hours-a-day, 7 days-a-week • Investment information through Morningstar Onlinea" • Momin9staA'Onlines^'isare9istered trademaM1Of MOmin9star lncoryorated. Investment advice isaservice Provitled loran adtlitional tee. 4of6 Education The Cornerstone of Every Successful Program Our years of experience and outstanding pertormance confirm that The Hartford's approach to participant education and customer service works. We know that while a successful retirement is a universal ideal, it's a very personal endeavor. The needs of an individual close to retirement are different from those of an individual early in his or her career. With that in mind, we have created the Plan for Life Series® seminars. Each seminar in the series focuses on a different stage in the career cycle: so whether you're just beginning your career or nearing retirement we have a way to assist you in preparing for your retirement. While each career stage in the Plan for Life Series® seminars touches on various topics and • investment concepts, you may choose to learn more by attending specialized workshops covering additional topics which include, Estate Conservation, Mutual Funds, and Investment Fundamentals just to name a few. In a time when many providers are reducing individualized service to employees and participants of defined contribution programs, The Hartford continues to embrace a "personalized" service model - it is the hallmark of our program. Our representative will continue to meet with your participants individually or in groups, gather feedback, and tailor an education program based on their needs. We recognize that some participants want options and appreciate the feeling of empowerment that today's technology affords them. Local Service Model Local Service Representative -Mark Gagen of the Roy Reeve Agency, is a trained and licensed investment professional. He will continue to meet with your participants individually to discuss the benefits of your program, and their individual retirement goals. Dedicated team from The Hartford, Amy Humphrey and Michael D. Snyder, will continue to work with their staff to provide personalized customer service to meet the needs of the Town. 5of6 Value, investments, service, education, and experience are just a few of the reasons that plan sponsors are selecting The Hartford to deliver the best retirement program in the financial services industry to their employees. It is the passion of our people and company to deliver on our promises, so that you can deliver on your Promise; a retirement program that helps your employees see the possibilities of life after work. We are excited about this opportunity to provide these world-class services • to the Town of Southold and its participants. We look forward to continue to put our nearly 200 years of experience to work for the Town. The cc Customer Solutions • Ease of Doing Business • Extraordinary Service • 6 of 6 A Retirement Plan Proposal for the Town of Southold, New York ^o`osovw<r~o~ oti~OQ~ Section I: Contractual Requ[remeats SECTION I. CONTRACTUAL REQUIREMENTS "Agee" or "Disaeree" must be indicated for each of the following specifications. The following specifications can be found in either the Regulations or the Model Plan, all of which should have been enclosed as attachments. Please include reasons for any rejection or disagreement of any specification and alternative options, if applicable. There should be neither elaboration nor qualification for "agree" unless otherwise requested. Specifications of the Regulations 1. Section 9000.2(b)(4) - As a Financial Organization authorized to do business (provide investment products) in New York State, you agree that your firm is one of the following: (a) a registered Investment Advisor, (b) a Bank or (c) an Insurance Company qualified under the laws of more than one state. If you are an Insurance Company acting through a subsidiary in New York State, then the Subsidiary Iusurance Company must certify that it (the Subsidiary Insurance Company) is qualified to do business under the laws of more than one state. Agree. 2. Section 9001.2(b) - We will be appointing a deferred compensation committee to act on our behalf and you agree to interface with this committee. Additionally, if the committee decides to be the grantor of our trust, per Section 9002.1, then you also agree to interface with the trust and trustee: all funding contracts, of whatever nature, will be "issued to, owned and retained by the trustee". Agree. 3. Section 9001.4(a) through (d) -You agree to abide by all four (4), especially not allowing annuity type payouts. Agree. 4. Section 9002.2(a)(5) -You will provide evidence that bonds and Iusurance have been secured by you pursuant to the Regulations. Agree. Lo`osur~oi.r~Gs ~9/b`~pf A Retirement Plan Proposal for the Town of Southold, New York Section I: Contractual Requirements 5. Section 9002.2(a)(6) -You will acknowledge in writing that you will act as a fiduciary under Section 457(g) of the Code and under Stale and common trust law principles with respect to all trusteeship, administrative or investment matters for which you assume responsibility. Additionally, you agree to indemnify our Plan as a result of any cause of action brought against it as a result of acts or omissions together with the reasonable costs of litigation arising therefrom. Agree. 6. Section 9003.3(a) -Your proposal shall be in writing and contain a representation that the proposal complies with all requirements of the Regulations and clearly indicates all direct fees, indirect fees and charges. Agree. Section 9003.5(a) - AI- contracts and/or agreements shall be in writing, shall be awarded on the basis of a competitive bid and shall not exceed five (5) years in duration, and shall impose no penalties or surrender charges for the transfer of any asset(s) or responsibilities on expiration of the contract or agreement. Agree. 8. Section 9003.5(b) -You will not permit any other trustee, administrative service agency, financial organization, independent consultant or person to provide services in respect to this Model Plan we have adopted. Agree. 9. Section 9003.7 -You will not permit an investment of any amount, in any annuity contract providing for a term which could exceed five (5) years or which is measured by one or more natural lives or any life insurance or other providing traditional death benefits. Agree. 10. Section 9004.1 -All information obtained by your position will remain confidential and you will neither solicit nor provide products other than deferred compensation. Agree. 11. Section 9005.3 -Statements to participants will be provided quarterly, even in situations where no contributions are being made, but funds are on deposit. You also agree to provide, at least annually, an additional statement to participants disclosing all fees and expenses paid out of, or charged against plan assets. Agree. I I ~iirr„ u A Retirement Plau Proposal for the Town of Southold, New York su~~oi y~ ^oS ~` oH6pJQOE Section L• Contractual Requirements 12. Section 9005.4 -Agree to satisfy the bonding and insurance requirements of this Section and provide evidence of such. Agree. 13. Section 9006.2 -You agree to include in your contracts and agreements a provision that the contracts and agreements are subject to the Regulations and the Mode[ Plan and that such Regulations and the Model Plan are made partthereaf Agree. • Tin.. ~ I I ~ i~ r r„iz u osuvw<r~ ^yp 3.s oy3p~~ A Retirement Plan Proposal for [he Town of Southold, New York + Section I: Contractual Requirements Specifications of the Model Plan 1. Section 3.2(a) -The Model Plan requires a minimum deferral amount to be $260 for any plan year. Your proposal will state [he minimum requirement wherever required. Agree. 2. Section 4.1 -You acknowledge [hat the amounts of compensation deferred by the participants will be invested, according to the participant's investment directions, no later than two (2) business days following receipt thereof, in the appropriate investment funds. Agree. 3. Section 4.7(a) -The entire value of each participant's account, including any annuities, will be set aside and held by the trustee, in trust, and that your contracts and agreements will recognize and reflect such. Agree. • 4 'fin I 1 ~i~ rrnizu A Retirement Plan Proposal for the Town of Southold, New York o°su~~o<.r~ 'py~l + Ja F Section IL• Trustee Services SECTION II. TRUSTEE SERVICES NOTE: You may s~ this section entirely if you are not a Financial Organization bidding to become Trustee. You do not need to copy any of the questions. Move to next applicable Section. Section 9002.1(a) of the Regulations states that assets must be held by ane or more trustees pursuant to one or more trust agreements. Such agreements must satisfy all the requirements of Section 9002.1(b). Section 9002.1(b) also indicates who may be trustee. We reserve the right to create our own trust as provided by this Section 9002.1(b) but desire to explore the alternative of a Financial Organization acting as trustee. Please respond to each of the following statements if you desire to be considered as trustee. If any statement does not apply, please indicate so by responding: "NotApplicuble". uested Information A. The name of your 6rm, address, name of primary contact person and telephone number. Trustee Services State Street Corporation State Street Financial Center One Lincoln Street Boston, MA 02111 Primary Contact Dorothy Hodgkins Senior Compliance Manager, Institutional Custody Telephone: (617) 937-6692 Fax: (617)937-3491 E-mail: dorothv.hodakins~ci;statestreet.com r 1 U ~•IIF. 1 R"I' F(~ li I ~ U A Retirement Plan Proposal for the Town of Southold, New Yark `osuFfoi+o gs O.yo(~OF. Section IL• Trustee Services B. C. D. Whether your firm has provided trust services to any New York State municipality for their Code Section 457(b) deferred compensation plan. List names of all such municipalities. Yes. The Hartford utilizes third party passive trustee services for over 68 New York State deferred compensation clients including, but not limited to, the following entities: Plan Names Cit of Dunkirk Oswe o Count Cattarau us Count Cit of S racuse Cit of Gloversville Wa ne Count Cit of Tonawanda Cit of Salamanca/Salamanca BPU Essex Count Oran e Count Broome Count Town of Queensbur Otse o County Cit of Rochester Town of Isli Communit Develo ment A enc Seneca Count Cit of Oswe o Western Re Tonal Off Track Bettin Town of Colonie Town of Newbur h W omin Count Town of Milton Rockland Coun Town of Isli Housin Authori Town of Pittsford Town of Huntin [on Town of Eas[ Ham ton Description of trust services you would provide acting as a Financial Organization rendering only trust services. Please specify all fees, expenses, charges and costs for the trustee services. Pease provide disclosure of any compensation structure. State Street Bank and Trust Company (State Street) dedicated public pension team will be servicing your account. This experienced group of professionals' service over I50 public pension plans and is responsive to the special regulations and reporting requirements of public pensions. A fee of $400 applies annually for the above third party passive trustee services. The Hartford will waive this fee for the Town. If you are selected as the Financial Organization acting as our trustee and desire to additionally respond to performing the duties of an Administrative Service Agency, as described in Sections 9000.2(b)(1) and 90021(b)(4) of the Regulations, please indicate your intention here. If you respond affirmatively, then it will be necessary for you to complete the questions in Sections III and IV addressed to the Administrative Service Agency bidder. However, in addition to stating your intention to bid, it is requested that you indicate here the effect this will have on any fees, expenses, charges and costs as distinguished from those previously stated in this Section. State Street Bank and Trust Company (State Street) and The Hartford have based this Proposal on providing a "bundled" approach to the Town. In addition to third parry passive trustee services, we will continue to provide all the necessary recordkeeping, administration, investments, education, and enrollment services for the Town's Plan. These additional services do not affect the cost of trust services referenced in "Question C" of this section. ' I'n r: I1 vtrrniau A Retirement Plan Proposal for the Town of Southold, New York ^o`osuiroiK~o~. aN*af~o~ M Section II: Trustee Services E. The trustee will also be requested to acknowledge in writing that it is a fiduciary with respect to all administrative or investment matters for which it has assumed responsibility as outlined in Section 9002.2(a)(6) and 9003.6 of the Regulations. State Street Bank and Trust Company (State Street) will acknowledge in writing that it is a tiduciary with respect to all administrative or investment matters for which it has assumed responsibility as outlined in Section 9002.2(a)(6) and 9003.6 of the Regulations. P. Referring to Section 9005.4 of the Regulations, describe the type of bond and its limits that you will be furnishing. Include "cost disclosure" if it is your intention for us to satisfy any part of this obligation. State Street Bank and Trust Company (State Street) will provide appropriate bonding specific for the Town's program in accordance with the New York State Deferred Compensation Rules and Regulations, Section 9005.4. This is our standard practice for all New York Plans. G. Do you intend to supply us with a sample trust agreement for our consideration? if so, do you attest that this agreement meets all of the requirements applicable to trusts as stated in Section 9002.1(6) of the Regulations and Section 457(8) of the Code. Yes. The trust agreement can be provided upon request. The agreement meets all the requirements of Section 9002.1(6) of the Regulations and Section 457(g) of the Internal Revenue Code. • 7 ~ I~nr I I ~i;~rr„i+n r1 A Retirement Plan Proposal for the Town of Southold, New York ^O ~,ifOf ke c„ O oy3pf~0E Section Ill: Administrative Service Agency/Financial Organization SECTION III. ADMINISTRATIVE SERVICE AGENCY/ FINANCIAL ORGANIZATION (Excluding Trustee) Please respond to each of the following statements if you desire to be considered as either the Administrative Service Agency and/or the Financial Organization. If you feel any statement does not apply, please indicate so by responding: "Not Applicable" and provide your reasoning. Company Back r C~ A. The name of your firm, home oft'ice address, New York State address (if any), and the name (including title), address and phone number of your primary contact person whom we may contact about your proposal. Home Office The Hartford 200 Hopmeadow Street Simsbury, CT 06089 The Hartford 1 North Broadway, Suite 716 White Plains, NY 10601 Primary Staff.• Contact: Thomas Howard, Vice President Telephone: (800) 282-5855, extension 3424 Facsimile: (770) 671-8503 E-mail: thomas.howardrdhartfordlifc.com Contact: Amy Humphrey, New York Senior Regional Manager Telephone: (866) 827-3666 Facsimile: (860) 392-3325 E-mail: amy.humphrevii;hartfordlile.com Contact: Michael D. Snyder, Regional Manager Telephone: (866) 394-3139 Facsimile: (866) 369-7702 E-mail: michaeLsnyderf~iihartfordlife.com I I i ~iii'rf ~r; i ~5UFi0tk~ 'p O~ oy~~~pE A Retirement Plan Proposal for the Town of Southold, New York • Section III: Administrative Service Agency/Financial Organization Roy Reeve Agency's New York Service Office Mark Gagen, Service Representative 13400 Main Road Mattituck, NY 1 1952 Telephone: (631)298-4700 E-mail: maeen(r~rovreeve.com B. Give a very brief description of your company and its history of participation in similar public employee Code Section 457(b) deferred compensation plans for state and local government employers. In New York State such plans Srst materialized in 1985, include your specific experience in similar plans in New York since that time. The Hartford Financial Services Group Inc., is a diversified insurance and financial services company. As of March 31, 2008, The Hartford has combined assets of over $424 billion. Hartford Fire Insurance Company, which traces its origins to 1810, is the oldest of The Hartford's subsidiaries. Hartford Financial Services Group, Inc. (The Hartford) is organized into two major operations: Life and Property & Casualty. Within these operations The Hartford conducts business principally in nine operating segments. Hartford Life is organized into four reportable operating segments: Investment Products, Individual Life, Group Benefits and Corporate Owned life Insurance. Life's business is conducted by the subsidiaries of Hartford Life, Inc. (HLI), a leading financial services and insurance organization which provides, primarily in the United States, pre- and post-retirement savings, mutual funds, estate planning and employee benefits products. Through Hartford Life, Inc., The Hartford provides investment products including annuities, mutual funds and retirement plan services. Hartford Life Insurance Company has been providing deferred compensation services since the early 1970's when regulations allowing for the establishment of these plans were introduced. Hartford Life, Inc. is a direct subsidiary of Hartford Accident and Indemnity Company (HA&I) and is ultimately a subsidiary of The Hartford Financial Services Group, Inc. (The Hartford). The Hartford is fully experienced in deferred compensation plans in New York State and has been since 1985. The first deferred compensation plan installed in New York State was the City of Rochester in November 1986. Since that time, The Hartford has grown to be a leading provider of New York State 457 programs, and currently provides full-service administration to over 68 New York entities. C. How many public employee elective deferral retirement plans and deferred compensation plans do you currently provide administrative services and/or investment products for? How many of these plans are New York plans? The Hartford currently funds and administers 1,841 deferred compensation plans with assets in excess of $9.5 billion*. The Hartford currently provides full service deferred compensation programs to 68 different employers in New York. *As of December 31. 2007. 9 ~ ' I't t t- I I ~itTruitt, • A Retirement Plan Proposal for the Town of Southold, New York ~SUFf~(k~ O~ oy~f { Ya0! Qf Section[][: AdministratLveServiceAgency/Financia[Organization D. In the past three (3) years has a~ public employee Code Section 457(b) deferred compensation plan/program, regardless of geographic location, terminated Pour (parent, subsidiary or affiliate) services either through the competitive bid process or for cause? If so, by whom and under what circumstances? The following plans have transitioned from The Hartford to a new provider in the past three years: • Cheat Name Termination Date Reaaoa for Termination San Diego Onified Port District Michelle Corbin 3165 Pacific highway 6/05 Formal bid process San Dicgq CA 92101 Tele hone: (858) 496-8017 Saratoga County Jack Kalinkewicz, Personnel Director 50 West High Street 8/OS Formal bid process Ballston Spa, NY 146!4 Tclc hone: 518 885-2225 County of Schenectady Dee Luttman, Personnel Administrator Schenectady County Office 8/OS Formal bid process 433 State Street Schenectady, NY 12305 Telephone: (518)386-2231 City of Portland Carol Carlson 1221 S W 4th Avcnuc, Room # 120 8/OS Formal bid process Portland, OR 97204 Tele hone: (503) 823-6140 City of Plano Sydney Covey 1520 Avenue K., Suite 130 1 I/OS Formal bid process Plano, TX 75074 Tele hone: 972 941-7437 Genesee Counh~ Scott German, Treasurer Genesee County 77easurer's Office 3/06 Formal bid process 15 Main Street Ratavia. NY 14020 Tele hone: (585) 344-2550 Monroe County Brayton Connard, HR Director 210 County Office Huilding 4/07 Formal bid process 39 West Main Street Rochester, NY 14614-1471 Tdc hone: (585 428-2400 Town of Islip Vincent Messina 655 Main Street 12/07 Formal bid process Islip, NY 11751 Tele hone: (631 224-5550 ~~ ~IIE \Rl'Pt tRlt oy~aQo~ A Retirement Plan Proposal for the Town of Southold, New York CJ • • Section LII: Administrative Service Agency/Financial Organization E. List ten (10) client Code Section 457(b) deferred compensation plan references for which your organization provides services and/or investment products similar to those requested in this proposal. It would be preferable if five (5) of the references could represent different size clients (based on assets) from New York State, if possible. Please include contact person name, title, address and telephone number, number of participants and approximate size of plan assets and the number of years you have been providing services. Spreadsheet format preferred. Crae Name P:rtiapaMS - .IUD uae Fanctians PerfS'med City of Detroit Participant recordkeeping, Intemet Donna Crumpler, Manager I Account Access, Account Access via City of Dctcoit Finance Department 6 180 11/75 Voicc-Response Unit Quarterly 2 Woodward Avenue, Room 1210 , Statements and Quarterly Reconciliation, Detroit, MI 48226 Marketing, Investment Education and Tele hone: (313) 224-7244 Plan Enrollment Services. Cih~ of Hartford Participant recordkeeping Intemet Kathleen Palm Account Access, Account Access via City of Hartford's Treasurer's Office 1 369 3/83 Voice-Response Unit, Quarterly 250 Constitution Plaza, 2°d Floor , Statements and Quarterly Reconciliation, Hartford. CT 06013 Marketing, Investment Education, Plan Tele honc: (860 757-9110 Enrollment Scwices and Transition. Rockland County Participant recordkeeping, Interne[ Larry O'1"Dole Account Access, Account Access via I S Ncw Hempstead Road 2 356 6/01 Voicc-Response Unit, Quarterly New City, NY 10956 , Statements and Quarterly Reconciliation, Telephone: (845) 638-5258 Marketing„ Investment Education and Plan Enrollment Services. Town of Ramapo Participant recordkeeping, Internet Linda Condon, Account Access, Account Access via Director of Personnel 285 7/05 Voice-Response Unit, Quarterly 237 Route 59 Statements and Quarterly Reconciliation, Suffern, NY 10901 Marketing, Investment Education, Plan Tele hone: (845) 357-5100, extension 222 Enrollment Services and Transition. County of Orange Participant recordkeeping, Internet Joel Kleiman, Account Access, Account Access via Department of Finance 1441 11/86 Voice-Response Unit, Quarterly County Government Center Statements and Quarterly Rewnciliation, Goshen, NY 10924 Marketing, Investment Education, Plan Tele honc: 914 291-2029 F.nrollmen[ Services and Transition. City of Rochester Participant recordkeeping, Internet Brian I,. Roulin, Director of Finance Account Access, Account Access via CiTy Hall - 30 Church Street 2 573 11/86 Voice-Response Unit, Quarterly Rochester, NY 14614 S[a[cmcn[s and Quarterly Reconcilialioq Telephone: (585) 428-7151 Marketing, Investment Hducation, Plan Enrollment Services and Transition. Town of Huntington Participant recordkeeping, Intemet Lisa M. Baisley, Personnel Offiecr Awount Access, Account Access via 100 Main Street 426 1/03 Voicc-Response Unit, Quarterly I luntingtoq NY 11743-6991 Statements and Quarterly Reconciliation, Telephone: (631) 351-3023 Marketing, Investment Educatiou, Plan Enrollment Services and Transition. III' Vli"I'Li 712D A Retirement Plan Proposal for the Town of Southold, New York Section III: Administrative Service Agency/Financial Organization *Assets are deemed proprietary and may not be disclosed at this time- F. What professional liability coverages are maintained by your company for errors and omissions or any other act? • The Hartford Financial Services Group carries at least $1,000,000 of Professional Liability Insurance Coverage (Errors & Omissions) on a per claim basis. This covers The Hartford and its subsidiaries as well as past, present and future officers, directors and employees. Coverage is for a Wrongful Act, which means any actual alleged breach or neglect of duty, error, misstatement, misleading statement, actor omission by the Hartford or Another Party for Whom the Hartford is responsible in the conduct of The Hartford's profession. G. Financial Organization's should provide appropriate "ratings" from the following: A.M. Best, Standard & Poor's, Moody's, and Fitch (formerly Duff & Phelps). Has your rating in any of these agencies fallen below "A--" in the last three (3) years. If yes, give complete details. If, as a Financial Organization, you have no ratings by any of these agencies, please explain. Year A.M. Best Standard & Poor's Moody's Fitch 2006 A+ AA- Aa3 AA 2005 A+ AA- Aa3 AA 2004 A+ AA- Aa3 AA .. GuName Parlicfpwta Ivan ov FvvetiovaPerforroed Town of Easthampton Participant recordkeeping. Internet Patricia IIreeq Director of Personnel Account Access, Account Access via 67A Main Street, Suite 2 12 11/01 Voice-Response Unit, Quarterly East Hampton, NY 11937 Statements and Quarterly Reconciliation, Telephone: (631) 329-9818 Marketing, Investment Education, flan 8nrollment Services and Transition. Otsego County Participant recordkeeping Internet Myrna Thayne, Treasurer Account Aeecss, Acwunt Access via 197 Main Street 254 2/02 Voice-Response Unit, Quarterly Cooperstown, NY 13326 Statements and Quarterly Reconciliation, Telephone: 607-547-4235 Marketing, Investment Education, Plan Pnrollmcn[ Services and Transition. .Madison County Participant recordkceping, Internet Mary Krause Aceount Access, Account Awcss via P.O. box 665 250 9/92 Voice-Response Unit, Quarterly W'ampsville, NY 13163 Statements and Quazterly Reconciliation, Telephone: (315) 366-2341 Marketing, Investment Education, Plan Enrollment Services and Transition. The Hartford's ratings have not fallen below "A-"in the last three years, for the rating agencies listed below: Provide any additional information that would distinguish your firm. H. As a company that has been in the deferred compensation marketplace for 37 years, we understand the needs of our customers and how they change over time. You will benefit from our commitment to this marketplace. We have built our reputation on stability, experience, integrity and fairness and have become a recognized ^o suiroik~oG aNaO`~o~ leader in this industry. 12 ' fn t: I I ua rrnitu Many recent accolades have validated The Hartford's commitment to provide our customers with excellent products and services, such as: Service • Winning the DALBAR Award for the 12'h consecutive year-recognizing outstanding variable annuity and mutual fund servicing; • The "Business of the Year Award" from the American Society on Aging~iting The Hartford's exemplary efforts in meeting the needs of the mature market and its pioneering work in creating a corporate culture that understands older adults; • Committed individuals who provide our customers with exceptional service and value; and, • Delivery of comprehensive education programs backed with state-of--the-art technology. Flexibility • Well known Money Managers; • Partnerships for creating exceptional value...as demonstrated by our alliances with Wellington Management, American Century Investments, MFS Investment Management, HL Investment Advisors, Inc., Franklin Templeton Investments, The Hartford Investment Management Co. • The Hartford has a strong reputation in the employee retirement plan market and is a leader in the retirement plan marketplace. We take our obligations seriously and have developed a conservative investment philosophy and approach in this market. A Retirement Plan Proposal for the Town of Southold, New York Section Ilk Administrative Service Agency/Financial Organization Stability • Membership in the Insurance Marketplace Standards Association (IMSA), an independent, voluntary association to promote high standards of ethical market conduct in advertising, sales and service for life insurance and annuity products; • Over 37 years experience in developing, implementing and servicing retirement plan solutions; • Financial stability. o suvvoiTr op o QF ~y3p~ { ,,0~'. We look forward to continue to put our nearly 200 years of experience to work for the Town and its participants. 13 ' I'i n' I I ut~r r~ n; u A Retirement Plau Proposal for the Town of Southold, New York ^0 5Ufi0(K~o=^ eyMOlQf Section IV.• Services SECTION IV. SERVICES Please respond to each of [he following statements if you desire to be considered as the Administrative Service Agency. If you feel any statement does not apply, please indicate so by responding: "Not Applicable" and provide your reasoning. Marketing and Enrollment Services 1. Briefly describe the marketing and employee communication strategy which will be used with our plan. Indicate the use and capabilities of laptop computers, if utilized. One of the primary goals of The Hartford and the Roy Reeve Agency is to communicate the value of your retirement benefits and help your employees utilize them to plan for a secure retirement. Considering the time, energy and resources you commit to administering your program, it is likely that you expect to see a high participation level for those eligible to participate in the 457 plan. The Hartford believes that participation levels are, in part, a direct result of the degree to which employees understand and value your program, and the benefits they derive from participation. The Hartford's program is designed to reach all eligible employees on a consistent basis to permit the employee to maximize their potential in the deferred compensation program and to achieve their retirement planning objectives. Personalized service is provided by full-time dedicated representative, Mark Gagen of the Roy Reeve Agency, who will continue to focus on the Town's program utilizing the latest in retirement planning software. Our program will continue to be extremely flexible and can be tailored specifically to the Town's requirements. 2. Briefly describe the types of marketing/promotional materials to be utilized. How will you work to develop a marketing program unique to our needs? The Hartford's participant-directed communications program is designed to help participants and eligible employees enhance their knowledge of investment concepts and options, to increase their exposure to market issues and performance, and expand their self-awareness as investors. As a result, your employees can have more confidence -both in the value of your plan, and in their own investment decisions. We utilize a number of resources and tools to accomplish this: • Product and Investment Option Brochures; • Demographically-targeted, scheduled mailings; • Articles for use in your newsletter; • A "Catch Up Provision" brochure and mailer; • Quarterly Newsletters highlighting timely market and investment issues; 14 I Liz i r~ Ali ~' ~5UR0(k~0 ~s oyMal~pf A Retirement Plan Proposal for [he Town of Southold, New York Section IV.• Services • Quarterly Statements of Account and Performance Reporting; • Benefit Illustrations; and, • Payroll Stuffers to highlight the benefits offered by the Town's retirement program. ePlan for Life The Hartford offers ePlan for Life, an employee education e-mail communication campaign. This feature gives plan sponsors the opportunity to reach their employees with targeted, professionally produced e-mail messages to promote their retirement program. The e-mail suite is divided into several topics from which the Town can choose: • Joining the Plan • Contribution Increase • Diversification • Rollovers The Town can add the specific company retirement plan contact information and send the e-mail to the appropriate employee group. Easy instructions for using ePlan for Life are located in the Sponsor Toolbox on Hartford's secure retirement website (retire.hartfordlife.com). Custom Participant Ac[ion Report (Deferral Illustrator) Mailings • The Hartford provides a custom deferral illustrator report which uses an employee s current age, income, and tax filing status, among other information, to create a personalized retirement snapshot that includes: • A comparison of take-home pay using different contribution rates • A hypothetical account balance over time at several different salary deferral percentages • The effect of waiting even one year to start contributing to their retirement account All of the marketing materials mentioned above will be submitted to the Town for approval prior to distribution if requested. All other materials are developed by The Hartford and will continue to be distributed to eligible participants by our representatives at meetings, through mailings directly to employees homes or through any other effective means acceptable to the Town at no additional cost. The Hartford's educational plan will continue to be discussed and reviewed during the Town's annual plan reviews. 3. Do you provide communications to participants on a regular basis, if so, please describe? Yes. In addition to our quarterly participant reporting, our quarterly "NetGains" newsletter is distributed to participants highlighting market and investment issues, as well as demographically targeted mailings sent directly to participants' homes. Sample communications are located in the "Collection of Program Communications" section of this Proposal, and can be viewed on the enclosed CD. • 15 I L~iii'' ^~o u~~a<.r~ oy3p` + 'aa ~y: A Retirement Plau Proposal for the Town of Southold, New York Section IV.• Services 4. Will these services and materials be prepared and distributed at your cost? Yes. There will be no additional cost to the Town for the preparation and distribution of these participant communication materials. 5. What educational materials will be provided to the Plan to maintain compliance? Our dedicated compliance staff will continue to ensure that The Hartford's policies, procedures and documents all comply with IRS 457 rules and regulations. The Hartford's Compliance Unit will use various means to assist you in keeping your program incompliance with regulation changes. Through our publication "Capitol Correspondent'", we will continue to provide information on major legislative issues which all had an affect on retirement programs. Such publications include: • Tax Reform Aetof 97 Small Business Job Protection Act of 1996 Economic Growth and Tax Relief Reconciliation Act of 2001 Katrina Emergency Tax Relief Act of 2005 The Pension Protection Act of 2006 In addition, The Hartford also provides full assistance and sample documents to facilitate New York State plan filings and our staff works closely with our systems personnel to update our recordkeeping systems, and the peripheral systems surrounding OmniPlus, with legislative and IRS regulation changes. The Hartford will continue to provide the Town with information relative to changes in the Internal Revenue Code and any regulations that may affect their program. 6. Briefly describe how you propose to conduct group enrollment meetings and ongoing educational sessions so that all interested employees have an opportunity to attend at a convenient time and location. How often are these type sessions proposed? Indicate the use and capabilities of laptop computers, if used. The Hartford and the Roy Reeve Agency will continue to work directly with the Town to design a program to reach all eligible employees on a consistent basis. This will permit employees to maximize their potential in the program and to achieve their retirement planning objectives. Your service representative, Mark Gagen of the Roy Reeve Agency, will continue to provide personalized service to you and your employees. Our program is flexible and can be tailored specifically to the Town's requirements. The needs of the Town are the basis from which we identify the communication methods and tools needed for the program. Each retirement plan brings with it a fiduciary obligation -ensuring that the employee's best interests are kept in mind. The Hartford helps to manage these fiduciary obligations by giving employees the education and the tools they need to make informed investment decisions. We have amulti-tier approach to employee education, including a financial education curriculum, informational seminars, and financial planning tools. We recognize that individuals learn information in different ways. Our educational platform allows for various ways of learning. Some employees may prefer individual one-on-one sessions with a Hartford Representative, while others may like to learn in a group seminar setting. Others still, may prefer to learn on LJ 16 ,I, }: Il~nrr~ntu ~5UFF0f k~ x.g0~p~ A Retirement Plan Proposal for the Town of Southold, New York f Section IV.• Services their own via written take home materials or the Internet. The Hartford's plan is to implement a financial education curriculum with these thoughts and ideas in mind. The following is an overview of our program: Curriculum Our educational platform will be divided into four distinct offerings -all of which will be available to any employee of the plan: 1. Plan Level Group Sessions 2. Plan for Life Series°c 3. Plan for Life Series Targeted Investment Concepts and Strategies Series 4. Individual Employee Education Sessions 1. Plan Level Group Sessions One of the most important decisions an employee can make is deciding to enroll in their employer's retirement program. Employees will be able to enroll in our program by either attending a group enrollment seminar or meeting individually with their local representative. These sessions will provide the employee with important information such as: • Overal I benefits of the plan -why they need to save for retirement. . • Program specific information such as investment options offering, investment performance history and applicable investment fees. • Plan Sponsor roles and responsibilities including information on items such as the plan's investment policy, plan documentation, website information and where to get important documents, forms and other information. • Legislative issues as they affect the plan. • Financial education offering and schedule. 2. Plan for Life Series° Seminars For 37 years, The Hartford has been helping people prepare for retirement. In that time, we've earned the trust and respect of our customers - one at a -'~' time. And that's exactly how we approach retirement planning-one person at a time. We know that while a successful retirement is a nearly r, H. t universal ideal, it's a very personal endeavor. The needs of an individual ~ v~a~: roe Carr- se~~es close to retirement are very different from those of an individual early in ~ his or her career. With that in mind, we have created a Plan for Life Series', focusing on each stage in a career cycle. ~.-.~r ~ Career Cvrle 1 -}'our Early Earning Years Audience: Those who are just starting to plan their financial future and are typically 20 or more years from retirement. They may have just started their first job or are early on in their career, and their financial concerns are likely to be basic and immediate. r-1 LJ 17 I L~izi r~~l:l' osuRO<.~ ~~ ~~ otiMO1~d A Retirement Plan Proposal for the Town of Southold, New York Section IV.• Services Summary: For those just beginning to think ahead to their future in retirement, getting started can be the hardest part. This seminar focuses on "the three D's (do's) to put these individuals in the driver's seat of their own financial futures -- Define Your Goals, Develop a Plan and Demonstrate Your Awareness (DO IT!). Covered Topics/Information: Benefits of Increasing Your Deferral, The Impact of Investment Return, Riding the Market, Diversification, The High Cost of Procrastination, What is Risk?, Dollar Cost Averaging, Retirement Savings Slide Ruler, Asset Allocation Planner. Those who are building their financial future and have a modest amount of money accumulated for future goals-typically 10 to 20 years from retirement. They are progressing in their career and might be considering their children's future educational needs. Retirement is the biggest goal most of us will have, but if you're like many Americans, you may fear that you are not saving enough for your retirement years. Later on, as your career becomes more established and your income changes, you may become more concerned with managing your tax situation and maximizing your after-tax income. This seminar focuses on how to stay ahead of both inflation and taxes, asset allocation strategies, and funding a child's education. Benefits of Increasing Your Deferral, The Impact of Investment Return, Riding the Market, Diversification, The High Cost of Procrastination, What is Risk?, Dollar Cost Averaging, Retirement Savings Slide Ruler, Asset Allocation Planner. Career Cycle 3 -Your Late-Earnings/Pre-Retirement 3 ears Audience: Those who are focused on building a secure source of retirement income and are typically less than 10 years from retirement. They may be concerned about having enough money to retire. They have adult children and may be caring for elder parents or facing health issues themselves. Summary: For those who have started to plan for retirement, they'll want to ensure that they have adequate savings to see them comfortably through their later years. Now likely in their peak earnings period, they may want to consider ramping up their retirement contributions to meet these long-term needs. With only a few working years left, they may be concerned with maximizing their retirement savings without adding unnecessary risks. Topics Covered/Inionuation: Benefits of Increasing Your Deferral, The Impact of Investment Return, Riding the Market, Catch-up Brochure, Diversification, The High Cost of Procrastination, What is Risk?, Dollar Cost Averaging, How Long will Your Money Last?, Asset Allocation Planner. Career Cycle 4 -Life in Retirement Audience: Retirees who are concerned with inflation reducing the value of their savings and may be considering methods of preserving and stretching their retirement income to enjoy more travel and recreational activities. They may be concerned about estate planning issues and may be faced with medical expenses. 18 'I'nI~ I L~i;,~rt~ni~ O`OSUffO[ICOS^ oy~O~F A Retirement Plan Proposal for the Town of Southold, New York + Section IV.• Services Summary: For those just beginning to experience "the American dream", they will learn what to expect from Social Security. This seminar focuses on useful strategies to offset the risks of inflation, taxes and the market on their retirement plan, including, asset allocation and systematic withdrawal programs. For those concerned about the cost of healthcare, this seminar touches on health care options, the details of Medicare & Medicaid and the option of long-term health care insurance. Estate planning issues are also addressed, including beneficiary options and how to provide the most for heirs. Inc/uded Materials/Informatiou: The Impact of Investment Return, Riding the Market, Diversification, What is Risk?, Dollar Cost Averaging, How Long will Your Money Last?, Asset Allocation Planner. 3. Plan for Life Series° -Targeted Investment Concept Presentations In addition to our comprehensive educational program we also offer informational workshops to ensure that education continues throughout an employee's savings career, The Hartford can provide many informational workshops, which are detailed below. These informational workshops will be made available to all of your employees whether or not they participate in The Hartford's program. The High Cost of Procrastination -reviews the "dangers" of not saving for retirement, provides employees with ahigh-level game plan to start, and shows how to initiate the first steps toward retirement financial security. Dollar Cost Averaging -explains systematic investing throughout fluctuating market cycles and illustrates how investment unit costs generally are lower than unit prices. The Impact on /nvestment Returns -shows employees how investment returns affect account balance over time and how they relate to the choices employees make for their retirement plan. The Benefits of Increasing Your Deferral Percentage -illustrates how even small contribution increases can add up over time, and encourages employees to increase their salary deferral percentage. Financial Management -this seminar will help individuals prioritize their resources to achieve their desired retirement goals. Investment Fundamentals-this seminar covers the instruments that can be used to achieve these financial goals. Retirement Income-this seminar discusses the four concerns of retired individuals: taxes, inflation, investment portfolio management, and outliving your retirement income. Saecial Proerams Coverine Other Financial Topics We will host special programs periodically if there is a demand for them. These may cover changes in the Internal Revenue Code, legislative updates, new investment options, etc. 19 I'n ~ I t pit rr~ nan .0 5ulwlt~=^ ~N.yQ~pf A Retirement Plan Proposal for the Town of Southold, New York Section IV.• Services The Hartford's educational seminars focus on the following subjects: • Turbulent Times • Investment Fundamentals • Asset Allocation • Retirement • Retirement Investment Strategies Proeram Specific Seminars Asset Allocation Planner -When The Hartford decided to offer Asset Allocation Models for our retirement programs, we chose to team up with an industry leader, Mesirow*. "Phis seminar discusses the topic of diversification and different Asset Allocation Models from aggressive to conservative and many in between. A brochure and worksheet are provided at this seminar. *Mesirow Financial lnvestment Strategres is a division of Mesirmv Financial lnvestment Management Inc., a SF_C Registered Investment Advisor. Retirement Income Cholces -This seminar provides employees who are close to retirement with the knowledge to make an informed decision about their retirement benefits available under your program. Participants will receive a brochure detailing the payout options available. . 4. Individual Employee Educational Sessions - In Person and Online In addition to our education program and informational seminars we also make tools available to local service representatives and your employees to use to identify retirement goals, learn about investing and obtain financial guidance. In a time when many providers are reducing individualized service to employees and participants of defined contribution programs, The Hartford continues to offer a personalized service model. Face-to-face contact has been the most effective way to communicate with participants and increase their investment knowledge. Local representatives who meet with your employees utilize our retirement website and Morningstar Onlines"" to help employees learn about the advantages their retirement program offers. Morningstar" Onlines"' For those employees who prefer to work independently we provide access to Morningstar' Onlines~~ available at no additional charge to all participants through our retirement website. Morningstar provides your plan participants access to an innovative online retirement education and planning program developed by a well respected and trusted mutual fund information provider. Morningstar uniquely combines four critical aspects of retirement planning, investment research, participant education, clear advice, and ongoing measurement -all in a lively, engaging, and self-directed environment. Using a six step personalized process participants identify their retirement objectives, assess their risk tolerance, and are provided with investment suggestions to help them reach their goals. u 20 ~lnc I L~irrrnnu ^oo ~rw«~ s a 9y3p~F A Retirement Plan Proposal for the Town of Southold, New York Section IV.• Services We have included an Enrollment booklet in the "Supplemental Folder" accompanying this Proposal. The Hartford's enrollment, education and communication materials are available to your program at no additional cost. Please describe, in detail, your one-on-one counseling sessions. Your response should emphasize how you plan to satisfy "the individual one-on-one on demand availability" of your enrollment specialist especially at times and locations convenient to our employees. In a time when many providers are reducing individualized service to employees and participants of defined contribution programs, The Hartford continues to believe in a personalized service model. Face-to-face contact is the most effective way to communicate with participants and increase their investment knowledge. Mark Gagen, your service representative of the Roy Reeve Agency, will continue to have access to software to help your employees learn about the advantages their deferred compensation program offers. Mark will also continue to conduct personal one-on-one sessions with your employees to assist them with goal setting, risk assessment, investment choice selection and more, as often as requested. Topics of discussion may include the benefits of participation in the plan, investment types, risk and reward, how the participant can make changes in their contribution amount, how to make investment transfers/allocations and distribution options. These sessions are arranged at a time and place convenient to the participant and agreeable to the plan sponsor. Marningstar~ Guidance Online'"' For those employees who prefer to work independently we provide access to Morningstar Guidance Onlines"' guidance available at no additional charge to all participants through The Hartford's retirement website. Morningstar ,available through our retirement website provides your plan participants access to an innovative online retirement education and planning program developed by a well respected and trusted mutual fund information provider. Morningstar' uniquely combines four critical aspects of retirement planning, investment research, participant education, clear advice, and ongoing measurement -all in a lively, engaging and self-directed environment. Using a six step personalized process participants identify their retirement objectives, assess their risk tolerance, and are provided with investment suggestions to help them reach their goals. 8. What educational services are provided for retirees? The Hartford believes that education for retirees should begin prior to their actual retirement. As such, our educational model supports both those participants who are nearing retirement as well as those who are already retired. A sampling of our services include: J 21 ,~ II~~~{;~„I2~' QS~ffO[tC0 ^O~~ oy•ol t iaa A Retirement Plan Proposal for the Town of Southold, New York Sectiou IV.• Services • Dedicated Locat Service Representative, Mark Gagen of the Roy Reeve Agency, will continue to meet with retirees, when requested, on an individual basis to discuss their personal situation. Additionally, he will be available to conduct presentations to retirees through group meetings. These presentations are further discussed below. • Dedicated Benefit Services Unit -The Hartford has a dedicated toll-free number that retirees can call to obtain counseling and information. The benefits distribution services unit will prepare personalized retirement illustrations, which display all distribution options and explain the applicable tax consequences of these options. • Ontine support- through the Morningstar Guidance Onlines"f guidance option, participants can obtain online access to innovative education and planning developed by awell-respected and trusted mutual fund information provider. Under this option, participants can use asix-step process to identify their retirement objectives, access investment articles and interactive tools through the Learning Station, and obtain additional information regarding each investment option at the Research Lab. • Group Presentations -Your Late-Earnings/Pre-Retirement Years- For those who have started to plan for retirement, they'll want to ensure that they have adequate savings to see them comfortably through their later years. Now likely in their peak earnings period, they may want to consider ramping up their retirement contributions to meet these long-term needs. With only a few working years left, they may be concerned with maximizing their retirement savings without adding unnecessary risks. Life in Retirement®-For those just beginning to experience "the American dream", they will learn what to expect from Social Security. This seminar focuses on useful strategies to offset the risks of inflation, taxes and the market on their retirement plan including asset allocation and systematic withdrawal programs. For those concerned about the cost of healthcare, this seminar touches on health care options, . the details of Medicare and Medicaid and the option of long-term health care insurance. Estate planning issues are also addressed, including beneficiary options and how to provide the most for heirs. 9. Describe your approach to asset allocation and diversification. The Hartford has a strategic approach for asset allocation and diversification: /ndividuatly through Morningstar" Guidance Ontine'"-Online Retirement Ptnnning, Education and Guidance Tools: Morningstar Guidance Onlines~", which is available through The Hartford's retirement website, provides your plan participants access to an innovative online retirement education and planning program developed by awell-respected and trusted mutual fund information provider. Morningstar Guidance Onlines"' uniquely combines the critical aspects of retirement planning decision- making, investment research, participant education, clear guidance and ongoing measurement -all in a lively, engaging self-directed environment. Using asix-step personalized process, participants identify their retirement objectives, assess their risk tolerance, and are provided with investment suggestions to help them reach their goals. /ndividuatty utilizing the automated asset rebalancing functionality: Participants will be able to submit automated asset rebalancing instructions through the Internet and our call center. • 22 ' I'i rt: I I cirri>urif • The Rartjord's Model My Coa[ss"" program: We offer an optional asset allocation program, The Hartford's Model My GoalssM program, to help address the needs of plan participants who want a simplified, one-stop approach to investing. A plan sponsor can choose one of the program designs, outlined briefly below; to help tailor the plan investment offerings to better meet employee needs. Standard Models -The Hartford's Model My Goalss" asset allocation program consists of five models that span the risk spectrum. Determined by Mesirow Financial Investment Strategies, Standard models each consist of up to six broad investment categories and associated model weightings. You select the investment options that comprise each investment category. Custom Models -Plan sponsors also have the option of designing custom asset allocation models to meet unique plan needs. If you elect to use custom models, you provide The Hartford with the number of models*, model names and a description of each model. Plan Sponsors will also determine the investment categories*, their percentage weightings and the investment options to populate each investment category. * Subject to The Hartford's system requirements and approval. Services Fees u Custom Models The program's Custom model is available at no additional cost. Contributions are subject to applicable investment management fees. We will continue to work with the Town to identify those employees who were not available to attend. Once these employees have been identified, Mark Gagen, your service representative of the Roy Reeve Agency, is always available to meet with them on a one-on-one basis and to conduct enrollment and educational seminars like those outlined in our responses above. These meetings are conducted at the convenience of both the participants and the Town. The Hartford believes in a personalized service model. Face-to-face contact is the most effective way to communicate with participants and increase their investment knowledge on an ongoing basis. A Retirement Plan Proposal for the Town of Southold, New York Standard Models The program's Standard model is available at no additional cost. Contributions are subject to applicable investment management fees. 10. How do you follow-up with or contact employees that did not have an opportunity to attend a group session or with an employee subsequently hired afrer that meeting date? Your comments on [he one-on-one availability of your enrollment specialists for this function are important. 11. Briefly describe your continuing education program, if any. sortm+pp~ o4Mp1QpE Section IV: Services Your local service representative, Mark Gagen of the Roy Reeve Agency, will continue to conduct personal one-on-one sessions with your employees to assist them with goal setting, risk assessment, investment choice \J 23 Il~rir~ • Section lV.• Services selection and more, as often as requested. During these meetings, both laptop presentations and software will be utilized to help participants determine the benefits of the deferred compensation program as a retirement savings tool. A Retirement Plan Proposal for the Town of Southold, New York Lo S~FFO(K~,=^ O oy~OfQp~ These sessions are arranged at times and in places convenient to the participant and agreeable to the Town and with the approval of the local supervisor. 12. Do you attest that these Enrollment Services are provided only by a properly licensed representative: licensed to meet both Federal and New York State requirements? Yes. All representatives, providing enrollment services to the Town, are properly licensed to meet both Federal and New York State licensing requirements. • • 24 I'i rn I I ~uTr~iui~ =o`p50fPolk~oGS. iMe~a A Retirement Plan Proposal for the Town of Southold, New York Section 7V.• Services Administrative Services A. Services offered to the Plun Sponsor Do you offer a dedicated toll-free Plan Sponsor -ine? Yes. We do offer a dedicated toll-free plan sponsor line (1-877-695-3706) that allows you to connect directly with your dedicated Plan Manager using his/her extension. 2. Haw does your organization provide assistance with revisions to the New York State Model Plan Document? The Hartford provides comprehensive assistance to our New York clients with respect to the New York State Model Plan Document. The Hartford works with the State to develop the necessary documents to comply with the Rules and Regulations. These documents are then forwarded to each of our clients for review. Once the documents are complete, The Hartford then forwards the information to the State for their acknowledgement. The Hartford provides this information each time the State requires changes to the Model Plan. 3. Does your company provide loans to participants? Yes. The Hartford currently provides comprehensive loan administration and servicing. Key features and terms of the loan program are: Requires completed Loan Application and Agreement (includes promissory note) Minimum loan - $7,000 Maximum loan -lesser of (1) $50,000 reduced by the highest outstanding loan balance during the preceding 12 months, or (2) 50% of the total vested account balance 1 outstanding loan at a time ~ Loan proceeds (amount borrowed) withdrawn from participant account against all investment options (except SDBA if applicable) on a pro-rata basis ~ Loan amortization schedule provided with issuance of loan proceeds General purpose loans amortized over 1-5 years ~ Primary residence loans amortized over 1-15 years Loan repayments through payroll deductions, made at least quarterly Loan repayments (principal and interest) credited to participant account and invested according to the then current investment allocation election ~ Rate of interest set at Prime +2% or a rate set and communicated to us by the Plan. Upon participant's retirement, death, termination of employment, or termination of Plan prior to the full repayment of the loan, the outstanding principal amount of the loan plus any accrued, but unpaid interest will be considered due 25 'I'nt: I I . it~r r~ f r, t. A Retirement Plan Proposal for the Town of Southold, New York +o soFfotr~s^ 0 ~4M~~p£ Section IV.• Services Loan Fees • A $50 fee is charged for the set up of the initial loan • A $12.50 per quarter loan maintenance fee is charged 4. Will your company withhold, remit and report income taxes deducted from distributions? Does this service include the production and distribution all income tax reports to all the necessary parties as required by federal and state laws? Yes. Our system does have the capability to compute and deduct all appropriate federal, state and local income taxes required by law. A detailed report including such withheld taxes will be forwarded to the applicable taxing commission, as well as a copy forwarded [o the Town. In addition, all participants receiving payments or benefits from the plan will be furnished with appropriate tax reporting forms as prescribed by law. 5. Specify all reports which will be issued to us, our participants and governmental agencies. The Hartford will continue to provide the following standard reports to the Town: C~ J Group Total Page A summary of all participants account values by investment option. These summaries are generated on a quarterly basis and provide the total contribution and withdrawal amounts for the quarter, as well as the totals since inception of the Plan. The group total page is mailed within ten business da s after the uarter end. Quarterly Confirmation Statement Includes all contributions and participant activity generated during the quarter as well as quarter end values. This is mailed within five business da s after the uarter end. Group Disbursement Repoli A monthly report, which shows the breakdown of the participants cash values surrendered, federal, state and/or city taxes withheld and the artici ants' net check amount. Ad Hoc Reporting In addition to the normal plan reports, The Hartford can provide ad hoc reports at the Town's request. These reports can be provided in various formats (i.e., paper, diskette, etc.) and are generally rovided within 24 hours. The reports available on our retirement website, will allow plan sponsors to obtain ad hoc participant level information in one consolidated file for each plan 24 hours-a-day, 7 days-a-week. The ad hoc reports that are available to you are as follows: Participant Status Report Activity Report Allocation Report SDBA Based Report Age Based Repoli Internet Activity Report Education Summary Report Loan Detail Report Participant plan status and account balance. Participant contribution information and account balance. Participant allocation of future contributions. Details participants who have a Self Directed Brokerage Account balance. Participants over age 40 who have an account balance. Details participants' use of our retirement website for any specified time frame you select. Details how participants are using the Education Module available through Morningstar'' Guidance Onlines~" Current detail of each individual loan by participant. ' I'n r I I:. i~~rrttr, I 26 A Retirement Plan Proposal for the Town of Southold, New York .~° soffa, TAG` 0 o4MOl~pE Section IV.• Services *This report is available through a link on our retirement website's Plan Sponsor toolbox. The Hartford will continue to provide the following standard reports to the Town's participants: Statement of Acconnt The Hartford will provide a quarterly Statement of Account, which are mailed directly to participants' homes, by the tenth business day after the quarter end. An individual statement is produced for each participant who has had financial activity during the period or has cash values in their account as of the end of the eriod. Transaction Confirmations The Hartford produces a confirmation for both financial and non- financial transactions processed on a participant's account. This document reports all the specific elements of the transaction, specific key inception to date financial information and current cash values by investment account. This report is mailed the business day following the processing date and is sent directly to artici ants. Tax Forms These forms are provided annually to any participants who have received a distribution Burin the tax ear. Samples of these reports are located in the "Collection of Program Communications" section of this Proposal, and can be viewed on the enclosed CD. We are also pleased to announce that participants may print a copy of their most recent, as well as past, Statement of Account from our Retirement website. 27 'I'ue I LvtTrrtan • Describe your voice response telephone system. Identify all available services including customer service options as well as "Voice Response Systems" or automated options. Include security features and voice options, if applicable. The Hartford offers access to a dedicated toll-free Interactive Voice Response (IVR) system available 24 hours-a-day, 7 days-a-week. Our IVR system is equipped with its user friendly Natural Voice Recognition technology. This technology allows participants to speak his/her reason for calling in their own words "naturally', while the systems knowledge identifies key words and routes the call appropriately. Through our IVR system participants are able to: • Obtain the General Account interest rate • Obtain account values • Obtain balances of all funds • Obtain fund allocations • Change fund allocations • Change Personal Identification Number (PIN) • Transfer money between accounts • Receive market commentaries u A participant can speak with a Customer Service Representative, or a Benefit Options Representative by speaking the word "Representative". Our call center hours are Monday through Friday, 8:00 a.m. to 8:00 p.m., Eastern Time. The number to reach our call center is (800) 528-9009. By speaking with one of these individuals, participants have the ability to obtain the above, plus: • Request changes to payroll deductions • Receive investment information • Request forms • Learn about plan rules • Obtain legislative information • Setup dollar cost averaging • Initiate loans and withdrawals • Process address changes • Change beneficiary information • Obtain a participant Statement of Account • Obtain tax forms A Retirement Plan Proposal for the Town of Southold, New York B. Services offered to Participants • Obtain forms • Obtain contact information • Opt out to speak to a Customer Service Representative. suiro<..~s^ 0 o~al~of. Section IV.• Services • Change Personal Identification Number (PIN) • Ask questions about their account or any financial transactions in process • Request fund performance • Request a distribution illustration • Discuss distribution options. • 28 'I'nr 11 ~i<-rrniau ^o~surror+rak. A Retirement Plan Proposal for the Town of Southold, New York 4 ' Section IV.• Services In addition, our IVR system is equipped to receive calls from hearing- and speech-impaired individuals through its Voice Browser Technology and Telecommunications Device for the Deaf (TDD) service. The Voice Browser technology allows participants to navigate our 1 VR system using voice commands; telephone key entry or a combination of both. Yes. The Hartford has several multi-lingual speaking service representatives. We also employ the AT&T language line, which affords us access to nearly 140 languages. Our new website includes the following: • Fresh, contemporary design • Simple three-step "Plan-Invest-Act" system • Comprehensive educational materials and retirement articles • New login under the Act section Our new features include: • Vested account balance listed by dollar, percentage and source • Total balance summarized by investment category Once logged in, you will be brought to [he comprehensive, interactive website you are accustomed to. The simple three-step "Plan-Invest-Act" system, available prior to login, offers new educational content including these topics: Plan 2. Can your customer service representatives assist non-English speaking participants? 3. Describe your Internet strategy. What features are currently available on your website? What services are you developing for the near future? What security safeguards are used? The Town is familiar with The Hartford's current retirement website, which provides dynamic Internet services as a core program feature to our plan sponsors and their participants. We are pleased to announce the beginning of some exciting changes to our retirement planning website which will begin on April 29, 2008. A preview of our new homepage is included below. ~~ lG:; vn:n:: Pi U ~.. ..,, ._._ ~ ~ o,„ ., ® ,,.. .~,~,. , m ~ • Why save for retirement? • Retirement plan basics • The cost of procrastination 29 'I'ii I l v<T rrn~ u u • A Retirement Plan Proposal for the Town of Southold, New York ,. osufw~K~o ,;° oy3p`QF Section IV.• Services 4. Invest • What kind of investor am 1? Self-assessment quiz • Types of investment options • How much can I contribute? Act • Importance of rebalancing account • Why increase contributions • Frequently asked questions Look for further enhancements, expected this summer, to include the new contemporary design throughout the entire website and additional educational content, resources, and tools. Internet Security Features The Hartford's retirement website utilizes a Firewall and a DMZ area for security. Access to the Internet is allowed only if the user has a valid ID and Password. Once the [D and Password are authenticated a Secure Socket Layer (SSL) connection is established to the participant's browser and only encrypted information is passed between our Internet site and the participant's browser. Please describe the settlement options available to each participant at retirement, voluntary termination and death. Please state your compliance to reflect the Board's continued prohibition on annuity distribution options (Section 9001.4 of the Regulations). The Hartford is able to provide for the full disbursements of benefits under your plan in accordance with the Internal Revenue Service and New York State Regulations. The Hartford provides for both Systematic Withdrawal Options and Lump Sum Distributions. Systematic Withdrawal Option (SWO) This option allows aterminating/retiring participant to select a specific level payment amount from his/her account. Their account balance continues to earn the annual rate of return of the General (Declared Rate) Account and/or participate in the current performance of the applicable variable account's portfolio. Minimum Pa ment Amount $100.00* Maximum Pa ment Amount None Payment Frequency Mon[hly, Quarterly, Semi- Annuall or Annuall *The frequency of payments may vary in order !o mee[ [he minimum pcryment amount. Lump Sum Payment An eligible participant may elect to take the value of their account in a single lump sum payment. 30 ' I'i rn Il irrrttiti~ 05UIf0(,f~O 40~~ A Retirement Plan Proposal for the Town of Southold, New York O~M~` + iaoF Section IV.• Services Note: In the event that the New York Regulations change and allow for annuily distribution options, we are able (o provide those at no additdonal cost to the Tawn. 5. In the event you are asked to administer our plan along side another provider(s), please describe your required process for assisting with participant requests to transfer plan assets from your program to one of the other carriers. Describe in detail the forms, signatures and overall process that you require. The Hartford utilizes aprovider-to-provider form to transfer plan assets between programs. Additionally, The Hartford honors other vendor's transfer forms. Upon receipt of a transfer form in good order, The Hartford processes the provider-to-provider transfer the same day that it is received and mails the check by the end of the next business day. All distributions and transfers are completed by the end of the next business day from the day of receipt. 31 ' I'n e I I ~irrrltiai~ • Recordkeeping S, s The Hartford licenses the SunGard Omni Plus recordkeeping software package. The SunGazd OmniPlus system is one of the most used and respected recordkeeping packages in the industry and is used by most of our competitors. The flexible design of the system allows each company to develop their own unique interfaces and peripheral applications. In addition to the OmniPlus recordkeeping system, we have licensed and implemented the Natural Voice Recognition technology, which is integrated with the core recordkeeping engine. A Retirement Plan Proposal for the Town of Southold, New York 1. Specify the basic recordkeeping system to be provided for our plan, with particular reference to the ability to receive, disburse, control and audit deductions, and to ensure timeliness, accuracy and confidentiality of records and describe the software used. We have developed an external money collection and reconciliation system, as well as new business and several customer service systems. We implement enhancements to the applications, which surround the OmniPlus core engine on a monthly basis. We implement core recordkeeping enhancements from the vendor on an as-needed basis, usually three times a year. All transaction history is maintained on the recordkeeping system and all transactions develop clear audit trails. Records are maintained in confidence with duplicate records, including microfilm copies, kept in off- premises storage for security purposes. Passwords are required to access the recordkeeping system. ^oo uvvo~rc% a oyao`~E Section IV.• Services Changes made through our Interactive Voice Response system are also maintained. Transfers among investment options received prior to 4:00 p.m. ET are processed using the price determined as of the close of business that day on a LIFO (last in, first out) basis. Contributions received prior to 4:00 p.m. ET on a valid business day are applied to accounts using the price determined as of the close of business that day. 32 'I'ii I I,izTr~,r.n • The staff that services The Hartford's 457 clients utilizes numerous checks and balances at various levels to guarantee the integrity and accuracy of the plan, including participant account data. Data and Cash Processing When a payment file is first received at The Hartford, character and position length is validated to ensure that the client file correlates to The Hartford's specification. Any errors outside of the specification are automatically and immediately moved to separate data files, applicable reports aze generated and the Plan Manager is promptly notified. In turn, the Plan Manager analyzes the error and contacts the plan sponsor for prompt resolution of the outstanding item(s), if necessary. After validating the aforementioned edits, a compazison of the participant detail received to the total financial amount received is performed. If both are in good order, the information is released to the recordkeeping system. • Transactional Processing In addition to using a recordkeeping system that has been tested and validated for all transactions, The Hartford's service center staff quality checks interfund transfers, allocation changes and contribution increases that are processed to ensure accuracy. All withdrawal requests are quality checked. Of course, in the event that a Hartford service representative makes an error on a participant's account, The Hartford will correct the error in full. Online copies of key production data tiles are made before and after critical batch processing. Complete system backups are made nightly to tape. Copies of tapes are stored onsite and with our disaster recovery provider. Periodic archive copies of files are made and stored For at least 10 years. A documented disaster recovery plan is in place to support this system's environment, which is tested at least annually. A Retirement Plan Proposal for the Town of Southold, New York Section IV.• Services 2. Briefly describe data processing operations, including the media by which your company can receive payroll deduction information, and its security provisions. Include a statement about your disaster recovery plan and its site location. Identify any subcontracting requirements for your primary administration responsibilities and comment on how this is possible in light of Section 9003.5(b) of the Regulations. Once the data has been released to the recordkeeping system for allocation posting, additional edits take place to verify that all participants on the remittance file are actually in the recordkeeping system (i.e., are they properly enrolled, are the contributions being allocated to the right plan, etc.). Any discrepancies are referred to the Plan Manager for prompt resolution, through discussion with the participant or plan sponsor as required. ^~`05Uff0[,,`0 oy~ofQF The Hartford utilizes alternate data centers for disaster recovery purposes. The process has been tested twice successfully in the last several years. The tests have included not only the recovery of the central recordkeeping system, but full utilization of all interfaces. 33 ' I'n i~: I ~ 1H"PFi1~iU A Retirement Plan Proposal for the Town of Southold, New York =oo ovvo<r~G 0 HMO~o~ Section IV.• Services 3. Indicate all interfacing: payroll deduction inputs, required certifications and any other transactions, specifying all direct and indirect costs. Specify how payroll deduction information is to be supplied. Indicate ability to interface with internal data processing systems. The Hartford offers several automated methods for your plan to remit participants' contributions. All three options are easy, secure and are available at no additional cost to you or your participants. E-remittance - An Internet service for participant contribution submission. Once your plan is active you will have the ability to access a template at our retirement website that includes all of your participants' names and Social Security Numbers. You can then input the contribution amounts for the selected pay period and send the information to The Hartford via our secured website. You will be able to modify this template for future payroll cycles. File Submit - An Internet service that allows you to send a data file containing participant contribution and loan information (if applicable). This option is recommended for plans with more than 100 participants. E-Payment -The Hartford has developed a new payment option that gives you an opportunity to submit contributions and loan repayments by requesting an ACH debit over our secure website. Our Automation Team is available to assist you in implementing any one of the above options. 34 'lair: I ~,vR"rIYIRI~ u Fund Offerings Information should be for [he mos! recent calendar quarter completed. Describe fully the various attributes of each investment option your company has to offer. For each option include an Investment Options Summary sheet which includes the funds objective, portfolio statistics, asset allocation, top 10 holdings, and industry diversi£cation. The Hartford will offer a program to the Town that incorporates a wide array of investment choices, award- winning customer service, state-of-the-art technology, investment advisory services, plan oversight and a comprehensive education program for your participants all for an administrative fee of 0.25% (25 basis points). C~ The interest rate for new deposits is 4.00% for the Town's program and is guaranteed through September 3Q 2008. In addition, for the life of the contract the General Account will not credit less than 4.00%. General (Declared Rate) Account A declared interest rate is established for contributions received in each calendar quarter. This declared interest rate is guaranteed to the end of the calendar year in which contributions are received. At the end of each calendar year, that year's contributions are combined with contributions from prior years, and a guaranteed rate is established for all of the "old" money for the upcoming year. The "old money" rate is set at the discretion of The Hartford and the company fully intends to continue this practice to ensure that the interest rate being credited is competitive within the industry. A Retirement Plan Proposal for the Towu of Southold, New York Section V: Lnvestments SECTION V. INVESTMENTS Please respond to each of the following statements if you desire to be considered as the Financial Organization. If you feel any statement does not apply, please indicate so by responding: "Nat Applicable" and provide your reasoning. Our "DCP[us" Deferred Compensation program is funded through an unregistered group variable annuity contract. This product offers unique benefits to both the plan sponsor and participants. All features that are described within this questionnaire are consistent with our product offering unless otherwise noted. Our investment options are designed to meet the specific objectives of the Town's participants. The Hartford is committed to retaining the current lineup, which includes grandfathering the Fidelity Contra Fund. We have also included in this Proposal additional options for consideration. Please refer to the Investmen! Performance Report and Fee Schedule located in the "Investment Exhibits" section of this Proposal. 2. Describe fully your "fixed" investment option. Include cone-page summary including applicable rates for the current calendar year, asset composition, and rating methodology. . owrfoe.,~o °` y„ ~raol~d The Hartford's General (Declared Rate) Account has historically provided very competitive returns to investors seeking a guarantee of principal and high current income. r1 L_J 35 'I1n I I ,irrrctizu jO`~SUROI,(~OG^ Z,N~`QOY A Retirement Plan Proposal for the Town of Southold, New York Section V.• Investments A one-page summary of our General (Declared Rate) Account has been included in the "Supplemental Folder" accompanying this Proposal. 3. Illustrate in spreadsheet format provided, (see Exhibit A) the "variable" values for each equity type investment. Please give annualized returns for `year-to-date', `one year', `three year', `five year' `tea year' and `since inception' values. Please refer to the Investment Performance Report located in the "Investment Exhibits" section of this Proposal. 4. Illustrate in spreadsheet format provided, (see Exhibit B) all charges including loading costs, policy fees, surrender charges, actuarial margins, asset fees, transfer charges, distribution charges, withdrawal fees, redemption fees, commission, termination/withdrawal of contract fees, etc., etc. Please refer to the Fee Schedule located in the "Investment Exhibits" section of this Proposal. C~ • 36 'Ins I L~ i;~rrna i =o~saivmT~oG` `3y,I,Ol~OF A Retirement Plan Proposal for the Town of Southold, New York • Section V.• Investments Investment Flexibility 1. Describe fully all matters related to the exchange/transfer limitations or conditions, termination/ withdrawal of contract provisions, any other restrictions or penalties, etc. Include any information on "unrestricted" and/or "free" transfers or plan transfer limitations. When a participant requests a change to their account, whether it is an investment allocation change or an inter-fund transfer, trade instructions must be received and confirmed in good order by The Hartford prior to 4:00 p.m., Eastern Time, or the close of the New York Stock Exchange (NYSE), whichever comes first. Any trade on a contract received after 4:00 p.m., Eastern Time, or the close of the market will be priced at the close of the next valuation day. A confirmation will be mailed to the participant's home the business day following the day the request was processed. On June 1, 2006, we implemented a new policy designed to restrict excessive sub-account transfers (fund exchanges). This policy has since been updated as of July 31, 2007, to reflect policy updates from the Securities and Exchange Commissions ("SEC") Rule 22c-2. • Under this policy, retirement plan participants may be permitted to transfer assets between the investment options (also referred to as "funds" or "sub-accounts") available to them. We want to share some important information regarding their rights to transfer among investment options, including when these transfers may be limited and/or restricted. Transfer requests may be made via U.S. Mail, Voice Response Unit (also referred to as Automated Voice System), Internet, telephone, and same day mail or courier service. A confirmation of each transfer will be sent to the participant when we process their order. The participant is responsible for verifying transfer confirmation and advising us of any errors within 30 days of receiving the confirmation. Those who plan to engage in "market timing" or any other activity designed to exploit inefficiencies in the pricing of an investment option or fund should not be a participant under this program. Even if they do not engage in market timing, certain restrictions may be imposed. The Hartford's policies are as follows: Each participant is allowed to make 20 investment option transfers each calendar year (the "Transfer Rule"): • After the 10`" transfer in one (I) calendar year has occurred, a letter will be sent to the participant as a reminder of the Transfer Rule. • After their 20`h transfer request has been made within the calendar year, our computer system will not allow them to request additional transfers via the Internet, Automated Voice System or telephone. They will be instructed to send their transfer requests by U.S. Mail or overnight delivery service. The Transfer Rule does not apply to transfers that occur automatically as par! of u company sponsored asset allocation or dollar cost averaging program. Reallocations made based on an underlying, fund merger or liquidation also do not count towards this transfer limit. 37 'I•nr IL~i;rr~nzi~ C~ 2. Transfer Policies in effect prior to July 1, 2007: The Hartford may provide, at a fund's request, tax identification numbers and other identifying information contained in our records to assist the fund in identifying a pattern or frequency of transfers that may violate their trading policy. Individual participants may be identified as violating the fund's trading policy. Based on this information, a plan sponsor may restrict, suspend or terminate a participant's investment option transfer privileges for a specified period of time or indefinitely. 3. Transfer Policies in effect as of July 1, 2007: The Hartford is obligated to provide, at a fund's request, tax identification numbers and other participant identifying information contained in our records to assist the fund in identifying any pattern or frequency of transfer activity that may violate their trading policy. The Hartford is obligated to follow each fund's instructions regarding enforcement of their trading policy. Penalties may include, among other things, temporarily or permanently limiting or banning transfers into a fund or other fund's within that fund complex. Each calendar year, we reset participant transfers to allow 20 new sub-account transfers by all approved methods. r1 LJ A Retirement Plan Proposal for the Town of Southold, New York Section V: Investments 2. Identify any other charges or limitations not described in the previous responses. o~surva<T~o`` ~„o~a There are no other charges or limitations not previously disclosed in this proposal. • 38 'Ins I i ~i{ rr„itu A Retirement Plan Proposal for the Town of Southold, New York 1O SYff~[TCOs ~y~~~0~ Section VI: Conversion Services SECTION VI. CONVERSION SERVICES NOTE: The following questions are to be answered on by an Administrative Service Agency bidding on an existing case that is administered by another provider: not on cases where you are the incumbent or on new cases that haven't had a prior plan. If these questions do no[ apply, you may sktg to the next section without copying the questions. This section is not applicable since The Hartford is the Town's current provider. Experience Provide a detailed description and complete history of Code Section 457(b) plans that you have been successful in taking over completely. Include entity name and date of takeover, the name of former provider, the asset size of the plan, the number of participants, transition time, staffing requirement and other detail you believe is significant. Not applicable. Process 1. Eull describe transition activities stating the time frame for a complete transition. Identify any cost to us or to our participants for each step or phase for the complete conversion. Not applicable. 2. What on-site support will be provided during the transition? Who will provide this service? Would the key individuals be willing to meet with the Plan? Not applicable. 3. What impact, if any, would there be on our plan if you were to be appointed the sale administrator? For example, would fees be reduced, would we qualify for additional services, etc. Not applicable. 4. Please provide references for three plans you recently transitioned. If possible, please provide [hose located within New York. Not applicable. 39 'I1n; Il~errrtrn A Retirement Plan Proposal for the Town of Southold, New York o soF~~tK~ ~~ o~g4~ 4 Yao ExhibkA Exhibit A Fund Offerines -Section V, question 3 Illustrate in spreadsheet format provided, the "variable" values for each equity type investment. Please give annualized returns for `year-to-date', `one year', `three year', `five year' and `since inception' values. Fund performance should be net o(all administrative charges, fund level expenses, and other fees or charges assessed. Investment Per ormance as o December 31, 2005 Please refer to the Investment Performance Report located in the "Investment Exhibits" section of this Proposal. 40 "I'i n I I -~ irrr~~i~ u • A Retirement Plan Proposal for the Town of Southold, New York ^O 5UR0(,,~ ^ 0 'otiMOJQOE Exhibit B Exhibit B Fund Offerin¢s -Section V, question 4 Illustrate in spreadsheet forma[ provided, all charges, including loading costs, policy fees, surrender charges, actuarial margins, asset fees, transfer charges, distribution charges, withdrawal fees, redemption fees, commission, termination/withdrawal of contract fees, etc., etc. Fee Schedufe Admin. Fee Invest. Other Fund/Account Name Mort & Ea M Fee Fees 12b-1 Fees Total Fees Please refer to the Investment Options Fee Schedule located in the "Investment Exhibits" section of this Proposal. 41 'I~nr I I vt~rrnian Important Retirement Plan Proposal Information This proposal has been prepared in a manner that provides information about the products and related services we offer. It is not intended or designed to be the legal document governing the contractual relationship between your organization and The Hartford. Upon selection of The Hartford as a new program provider we will work with you to establish a contractual relationship that will reflect what we have outlined in our proposal and any subsequent negotiations. • This proposal represents a good faith estimate based on the information provided at the time of the Request for Proposal and is valid 120 days from the date referenced on the title page/cover letter. About Our Company The Hartford (a Delaware corporation) together with its consolidated subsidiaries is a leading financial services and insurance organization which provides, primarily in the United States, pre- and post-retirement savings, mutual funds, estate planning and employee benefits products. Hartford Life Insurance Company is a subsidiary of Hartford Holdings, Inc (a Delaware corporation) and is ultimately owned by The Hartford Financial Services Group, Inc. (The Hartford). The Hartford, which traces its origins to 1810 as The Hartford Fire Insurance Company, is one of the oldest and strongest insurers in the world. The Hartford is The Hartford Financial Services Group, Inc., and its subsidiaries, including issuing company Hartford Life Insurance Company. Proposal May 30, 2008 Investments • In response to your request for a sample investment menu we have included in the "Investment Exhibits" section of this Proposal. This sample menu is not and should not be construed as an individualized recommendation or investment advice regarding your plan's menu of investment options. In developing the sample menu, we have taken into account the revenue we receive with respect to the investment options, among a number of other factors. Included in the "Investment Exhibits" section of this Proposal, we have provided the complete list of investment options available under this product and the revenue we receive, including amounts we receive with respect to the investment options shown in the sample menu. Please note that Hartford Life neither offers investment advice to its retirement plan customers nor acts as a fiduciary with respect to the selection and monitoring of investment options. As plan fiduciary, you are responsible for the selection and monitoring of your plan's investment options. Because of the open architecture of our product, you are free to select any combination of investment options from those available under the product as the menu for your plan, subject to certain minimum revenue requirements. The Hartford's program offers participants the opportunity to contribute to investment options available under a Group Variable Annuity Contract. The investment options are sub-accounts that, in tum, invest in the underlying fund. You do not invest directly in any of the mutual funds. Any ticker symbols provided are pertinent to only the underlying mutual funds. Public information accessed using these symbols will not reflect any applicable charges at the sub- account level or charges under the Group Variable Annuity Contract. 42 fnr I ~ 1R"I'f~iRll Important Retirement Plan Proposal Information May 3Q 2008 All of the investment options outlined in our proposal were available to new programs/investors as of the date of our proposal, however, underlying mutual fund providers may discontinue investment offerings at any time. Such investment option closings are beyond our control. Compensation paid by Hartford Life Insurance Company Hartford Life Insurance Company compensates producers for the sale and service of our products. In most cases, producers are paid a commission, which may be fixed or based on a percentage of deposits or average net assets (or aged assets) of the Contracts attributable to a particular producer. The level of commission payable for the sale and service of our products is determined by Hartford Life Insurance Company and the producer at the time of the sale. This determination may have an effect on the level of fees and charges under the Contracts. In addition, producers may be eligible for various forms of incentive compensation, including cash and non-cash awards. Incentive compensation is based on a variety of factors that may include the level of average net assets (or aged assets) invested in the Contracts, retention and growth of assets, overall profitability, or other performance measures. For additional information regarding additional compensation paid by Hartford, please see the section below entitled "Additional Compensation". Additional Compensation Subject to FINRA Rules, Hattford Life or its affiliates pay significant additional compensation to some broker-dealers and other financial intermediaries ("Financial Intermediaries") (who may or may not be affiliates), in connection with • the promotion, sale and distribution of the Contracts. Additional Compensation is generally based on average net assets (or on aged assets) of the Contracts attributable to a particular Financial Intermediary; on sales of the Contracts attributable to a particular Financial Intermediary and/or on reimbursement of sales expenses. Additional Compensation may take the form of, among other things: Sponsorship of due diligence meetings to educate Financial Intermediaries about the Contracts, the underlying funds and other products and services; payments for providing training and information relating to our Contracts, the underlying funds and other products and services; expense allowances and reimbursements; override payments and bonuses; and/or personnel educational or training; marketing support fees (or allowances) for providing assistance in promoting the sale of the Contracts. Consistent with FINRA Rules, we may also provide cash and non-cash compensation in the form of: occasional meals and entertainment; occasional tickets to sporting events; nominal gifts; sponsorship of sales contests and/or promotions in which participants receive prizes such as travel awards and merchandise; sponsorship of training and educational events; and/or due diligence meetings. We want you to know that additional compensation creates a potential conflict of interest in the form of an additional financial incentive for a Financial Intermediary to recommend the selection of our Contracts over other contracts. Fees and Payments received by Hartford Life Insurance Company ("Hartford Life") from Fund Families u We want you to know that Hartford receives substantial fees and payments with respect to the underlying funds that are offered as Sub-Accounts to your Plan through the Contract. We consider these fees and payments, among a number of other factors, when deciding to include a fund to the menu of Funds that we offer through the Contract. These fees and payments are received by Hartford under agreements between Hartford and the principal underwriters, transfer agents, investment advisers and/or other entities related to the Funds in amounts up to 60% of assets invested in a Fund. These fees and payments may include asset based sales compensation and service fees under distribution and/or servicing plans adopted by funds pursuant to Rule 12b-1 under the Investment Company Act of 1940. They 43 ' I'n t: I1vt~rrnitn Important Retirement Plan Proposal Information May 30, 2008 may also include administrative service fees and additional payments, expense reimbursements and compensation sometimes referred to as "revenue sharing" payments. Hartford receives these fees and payments for its own account and expects to make a profit on the amount of the fees and payments that exceed Hartford's own expenses, including our expenses of paying compensation to broker-dealers, financial institutions and other persons for selling the Contracts. We also want you to understand that not all fund families pay the same amount of fees and compensation to us and not all funds pay according to the same formula. Because of this, the amount of the fees and payments received by Hartford varies by fund and Hartford may receive greater or less fees and payments depending on which variable investment options your Plan selects. For Example: As one of its selected investment options in its Group Variable Annuity Contract, the Any Company Retirement Plan maintains an average balance of $100,000 in an investment option investing in shares of a hypothetical mutual fund during the year. If the fund's principal underwriter pays Hartford a Rule 126-1 fee at a rate of 0.50% of assets annually, and the fund's transfer agent pays Hartford an administrative service fee at a rate of 0.25% of assets annually, Hartford would receive $500 in 12b-1 fees and $250 in administrative service fees, for a total of $750 for that year due to the Plan's investment in the fund. If the Plan maintained an average balance of $100,000 in an investment option investing in a different fund during the year where that fund's principal underwriter pays Hartford a Rule 12b-1 fee at a rate of 0.25% of as-sets annually, and the fund's transfer agent pays Hartford an administrative services fee at a rate of $12 per Plan Participant Account invested in the investment option investing in the fund, and there are 20 participants with an account balance invested in that investment option, Hartford would receive $250 in 126-1 fees and $240 in administrative service fees, for a total of $490 for that year due to the Plan's investment in the fund. You should also know that the principal underwriters of certain funds have chosen to offer for sale, and Hartford has selected, fund share classes with asset based sales charges and/or service fees that may or may not be higher than other available share classes of the same fund. As a result of any higher asset based fees and charges paid by investors in such share classes, the amount of fees and payments that might otherwise need to be paid by such fund principal underwriters or their affiliates to Hartford would decrease. Some of the Sub-Accounts available in the Contract invest in Funds that are part of our own affiliated family of funds. In addition to any fees and payments Hartford may receive with respect to those funds, one or more of our affiliates receives compensation from the funds, including among other things a management fee and 12b-1 fees from the funds. For information on which underlying funds pay Hartford such fees and at what level, please call 1-800-874-2502, Option 4. Written information will be provided upon request. Endorsement Fees Paid by Hartford Hartford Life pays fees to the organizations listed below in exchange for an endorsement of our program. As part of the endorsement, Hartford Life is invited to participate in various programs, conferences and meetings offered through these organizations in order to allow us to market our program. 44 I'n r I I vt~rr„r, n Important Retirement Plan Proposal Information May 30, 2008 Hartford Life also pays additional fees in order to sponsor certain programs offered through these organizations including the "Top Cop Awards' program and an annual "Pension and Benefits Seminar" offered to members of these organizations. For additional information on the amount of fees and payments made by Hartford, please call 1-800-874-2502, Option 4. Organizations Receiving Endorsement Fee Payments from Hartford Life 1. Peace Officers Research Association of California; 2. The National Association of Police Officers; 3. Florida Police Benevolent Association, Inc.; 4. Police Benevolent & Protective Association of Illinois; and 5. Combined Law Enforcement Association of Texas. Payments to Industry and Trade Organizations As an active member of the retirement industry, Hartford Life makes payments to various industry and trade organizations. These payments are made in connection with Hartford Life's membership, sponsorship or participation in events of these organizations. Hartford Life makes these payments in order to communicate its position on retirement industry issues and further its position as an industry leader. Frequent Trading Plan Participants may transfer amounts in their Participant Accounts between or among the Sub-Accounts available in your Plan, subject to our policies and procedures, and the policies and procedures of the underlying funds. Our Policies and Procedures: Currently, Hartford Life has a policy under which each Plan Participant is allowed to submit a total of 20 requests to transfer amounts between or among the Sub-Accounts each calendar year in their Participant Account by any of the following methods: U.S. mail, telephone (by calling the Retirement Plan Service Center or by using our Voice Response Unit), or via Internet. Once these 20 transfers have been requested, transfer requests by telephone (either through our Retirement Plan Service Center or Voice Response Unit), via the Intemet or sent by same day mail or courier service will not be accepted. The Participant may submit any additional transfer requests only in writing by U.S. Mail or overnight delivery service. Transfers as a result of Dollar Cost Averaging or Automatic Rebalancing programs (if applicable) do not count towards the 20 transfer limit. We may make changes to this policy at any time, or implement different policies and procedures for the purpose of discouraging frequent or excessive trading in fund shares. In addition, Plan and Participant requests to transfer amounts between or among the Sub-Accounts are subject to any additional restrictions of the underlying funds. Policies and Procedures of the Funds: We want you to know that all purchase payments allocated to, and any transfers among, Sub-Accounts available through the Participant's Accounts in Hartford Life's separate account are subject to the policies and procedures of the underlying funds that are set forth in the current prospectuses for the underlying fund regarding frequent or excessive trading in underlying fund shares. Hartford Life is not required to honor any instructions to purchase underlying fund shares with respect to any Plan or Participant Account in violation of an underlying fund's written policies and procedures regarding frequent or excessive trading in the underlying fund's shares. 45 ~ 'fin: I I ~ i{Tr~,r, i Important Retirement Plan Proposal Information May 30, 2008 Shareholder and Transaction Information Provided to the Funds: We also want you to know that Hartford Life will provide certain shareholder or Participant Account information, including, but not limited to, taxpayer information numbers, and the amount and dates of purchases, redemptions, transfers and exchanges of underlying fund shares, to the underlying funds pursuant to Rule 22c-2 under the Investment Company Act of 1940, as requested by the underlying funds. Hartford Life will execute instructions from the underlying funds to restrict or prohibit additional purchases of underlying fund shares by Plans or Plan Participants that violate the underlying fund's policies and procedures. You agree to the foregoing and acknowledge that the underlying funds are not intended as vehicles for short-term trading. Frequent or excessive transfer activity may interfere with fund portfolio management and may have an adverse effect on shareholders. The underlying funds expressly reserve the right to curtail such short-term trading activity. In addition to any policies or procedures Hartford Life may implement from time to time with respect to frequent or excessive trading in the Sub-Accounts, the underlying funds may implement their own policies and procedures designed to restrict or prohibit frequent or excessive trading. For additional information regarding Hartford Life's Sub-Account Transfer Policy, please visit our website at htp://retire.hartfordlife.com. Contractual Information Investment choices are available through group variable annuity contracts (HL-1581 I). All contracts are issued by Hartford Life Insurance Company (Simsbury, CT). This presentation must be preceded or accompanied by currently . effective disclosure documents. The investment options are sub-accounts that, in turn, invest in the underlying fund. You do not invest directly in any of the mutual funds. General (Declared Rate) Account Banded New Money Rate: Contributions shall be credited with interest at a rate declared for the calendar quarter in which they are received. The declared interest rate for any quarter shall be determined by Hartford Life and may be changed for any subsequent quarter at the discretion of Hartford Life. The declared interest rate applicable to any quarter will be guaranteed as set forth below. Any change in the interest rate will be declared before the start of the quarter. Banded Old Money: Contributions will be credited with interest at a rate guaranteed for the entire year (the "Guaranteed Interest Rate") which rate will never be less than the Minimum Guaranteed Rate. The Guaranteed Interest Rate for a calendar year will be determined at the end of the preceding calendar year. Hartford Life may, from time to time, credit interest rates in excess of the Guaranteed Interest Rate. The Hartford's program and administrative fees do not apply to assets held in The Hartford's General (Declared Rate) Account. 46 I'n t I I~it~~~-~ nan retirement Plans G~oup Markets ~ Data as of March 31, 2008 merican Funds: The Growth Fund of America 0.96 182,987.40 I ' ***** 9 36 13 8 3 idelityContrafund 0.90 71,506.11 ~ ***** 43 13 6 4 4 anus Twenty 0.88 11,860.64 ***** 3 1 1 1 5 Zmssr[! l ono G7-on~th Cider &P Jo0 i CitiGrnup Grouch Inder tornings(ar Qil: Large Gr<»i7h 1.41 artfordStockHLS 0.49 3,815.92 ~ *** 90 77 32 70 65 artfordCapitalAppreciationHLS 0.67 12,875.69 '~ ***** 84 6 1 2 1 ussel! 1000 Inder '&P 50o hider Lim-ningstar Cat: Large Blend 1.30 HartfordlndexHLS 0.34 1,424.19 ~ *** 46 47 48 51 56 S&P 500 bider Russel! /01)0 baler American Century Equity Income 0.97 5,353.71 ~ **** 4 22 42 63 3 Hartford Dividend and Growth HLS 0.67 6,578.49 ~ * * * * 10 5 6 14 19 Russell 1000 l'aLte lnder S& P 500 / ('i(iGroup L4th~e /ndP.1' tt ~Ul'B4n~~51G]'Cat. hor~F b'flbur ~. ~7 NOT FOR USE WITH PARTICIPANTS Page 1 of 5 retirement Plans Group Data as of March 31. 2008 Markets ~ ~~ Janus Enterprise Hartford Midcap HLS 0.94 0.68 1,933.08 2,619.78 N **** *,t,t,t* 13 13 11 37 6 13 9 12 41 2 Rucse(1 A1idCap Grouxh Inder S&P ;LlidCap 400 / Citi(Lrxq~ Grun4h Ltde.c ;Lforningstar C~u: Mid-Cnp Growth RiverSource Mid Cap Value 1.53 1.49 2,311.10 •= it * tc *,t 82 13 4 2 - Poissel! Midcap L-2due Inder S&P Midcap d00!CitiGrnup Vahie ladcc :tmr,i,nge~lar cat Mld-cap ~°an,e AIM Small Cap Growth liartfordSmallCompanyHLS r_ao 1.26 0.72 1,422.55 1,421.52 • i J. '~ 1c # * it ****# 38 50 30 25 24 3 58 2 18 21 Russell ?000 GrunYfi Inder S&P SmallCa[~ 600!Ci[iGroup GruuYh Liner Murrriags(ar Cat Small Growth Skyline Special Equities Portfolio L6? 1.39 352.31 .' ** 95 87 68 73 92 Russr!l _'000 Va6~e lnder S&P Sma/1Cap 600 /Ci7iGrnup Y'ulue lnde~ L9orningr(ar Cat:.S7nall Pah~e ISd NOT FOR USE WITH PARTICIPANTS Page 2 of 5 ~tetirement Plans G~oup Data as of March 31, 2008 Markets ~ Janus AdviserlnternationalGrowth 1.21 2,340.20 ~~~ ***** ]0 2 3 2 1 ~LISCI E~FE Growth Lvdec :Llorningstar Qit Foreign Large Gronvh f.60 HartfordlnternationalOppottuniticsHLS 0.75 2,093.94 '~ **** 87 1 6 12 18 ;IfSC! Ed FB hxlec blornings[nr Cat Foreign Large l3fen~! IS? ~ American Funds: Capital World Growth and Income 1.10 107,000.16 ~: * * * * * 24 11 9 13 5 4fSC1 IV'orld Gxler :Lloraings(ur Cat lV'or/c/ Stark LCl NOT FOR USE WITH PARTICIPANTS Page 3 of 5 retirement Plans G~oup Data as o March 3l 2008 Markets ~ alvert Social Balanced 0.82 469.70 ~ ** 30 67 79 75 78 artfordAdvisersHLS 0.64 6,440.08 I" ,t** 82 58 40 74 63 anus Balanced 0.79 2,70L62 '~ **,t** 3 3 2 31 5 ~0% SX P 500 40 o Lelunan :1gg lorningstar Cat :'lluderale .AIIncatiun 1.40 ~ arclays Global Investors LifePath 2040 1.11 462.89 * *,F 10 85 56 43 67 arclays Global Investors LifePath 2030 1.11 662.92 ~ ** 1 63 58 83 34 arclays Global Investors LifePath 2020 1.11 914.33 ~ ,t,t~t 14 51 46 56 40 arclays Global Investors LifePath 2010 1.10 461.11 ',', * * * * 21 44 27 25 50 arclays Global Investors LifePath Retirement 1.10 153.86 ~ ,t,t,t,t 12 34 43 33 36 tifon+iAciar Cat 7ru~gct-0are ?030 i 1?6 ~or'nings[ai-Cat 7~arge[-Da[e 7015-_'0?9 /14 Alnrningst~o~ Ccu: Tnrgel-0are 21100-?0/-0 L lX MFS Utilities 1.05 3,405.97 ~ * * * * * 24 4 2 5 7 S & P Glili(r bides 6lurnin,~star Cat Specialrn-Utilitie~e 7.39 NOT FOR USE WITH PARTICIPANTS Page 4 of 5 retirement Plans G~oup Data as of March 3l, 2008 Markets ~ Investment Option /Benchmark Name Expense Total Portfolio Assets Ratio (milt Equity Morningstar Srylc Rating ~%~ Rank 4& Rnnk °o Rank °~, Rank "% Rank I Quarter I ti'car 3 l~enr ~ Year 10 Ycar FIXED INCOME ~ Hi h Yi ld B d Box ~ g e on _ ., . - ~ a® ~ ~~ ~~~~~ hrtcrmcdiatr'I'crm bond NOT FOR USE WITH PARTICIPANTS Page 5 of 5 Retirement Plans Group M~rkets ~ Data as of March 31. 2008 merican Funds: The Growth Fund of America ideliry Contrafund Janns Twcnry (7.9'~ (1721) (5.99) 0.48 4.87 24.53 933 1L18 19.16 14.22 15.71 19.63 8.97 8.15 7.89 26.54 23.00 29.70 31.45 31.57 7339 4534 25.03 64.90 7.22 (6.80) (32.42) (12.50) (12.59) (29.20) (222 (9.63) (24.02) 32.32 27.96 2531 I L60 15.07 23.89 13.87 1623 9.42 10.62 17.52 1230 10.59 L9J8 35.94 Xuse'e[I 1000 Gron-rh /ndrr IlOJB/ (0.7.51 fi_33 'JA6 L'R 30.49 2,Y.?/ 33.16 r21. JZ/ 120.421 ZZ881 'IJ h.30 1,16 9.0? ll Xl S&P 100 ~Cin Group ('r on~llr L~der /9.9?/ U-601 4.9h 8.81 '. [1 36.53 42J6 28.2: C_'.ON/ Il_'.7.31 x'3.591 _'5.66 6. /3 J00 /LO/ 9.13 J{~r»]~~gstm C~it Large Grtnnh Hartford Stock HLS Hartford Capital Appreciation HLS 11 [.671 (12.02) Q 139) N?8) (7.78) 2.18 6. /N 631 12.74 70.31 9.98 19.87 1.6h 2.86 10.94 _'6.36 3138 2235 34. i5 3332 15.48 38.8' 19J7 37.46 /l.z_O51 (7.04) 1322 IP_.301 (1223) (6.94) /7?.641 (24.25) (19.70) 78.66 26.47 4238 ?.87 4.17 1936 6. ?1 9.62 15.55 ZOS 14.65 16.61 71.3. 5.90 16.83 Ru~ne0 (UOO InAee i9_J8i 11.401 IJ9 lL86 3. b'7 31.85 ?%.0_' '0.97 IZ79) 111.4J1 01.65/ 19.89 7[40 6." UA6 Sc@P S00 Lrcler ry.441 /J.Oh'1 S,Y? //. 77 350 33.36 '8.58 'l. (l4 /9.1111 UL89/ 22.101 '8.68 /O.HN 49/ /5.79 [4J 4G~rnir¢amr (2n. La{fir BG-nd Hartford Index HLS 19.%31 (9.51) 15.731 (532) 5.69 5.52 //. /S 10.92 3.60 3.09 2X.37 32.61 '1.39 28.06 '0./6 20.49 I6.3U (9.50) /1.1.50) (1231) C_'.Z51 (22.45) 77. UJ 28.14 10.01 1039 S.8'8 4.50 /4./? 15.46 6./6 5.20 S&P 100ludcr 19.441 ~SOB~ 5.85 11.37 310 73.36 28'58 27.04 ~9J Ib Il /.89/ /71JOJ 1x.68 [0_b'A' 491 /5.79 5,{y Russr(l IOOO Ltdcr American Century Equity Inwmc Hartford Dividend and Growth HLS lJA.1') (5.84) (7.16) 15.40/ (5.17) (0.71) 6J9 5.59 8.95 [LN6 1134 14.10 3.x3 823 624 i?.85 2826 31.89 7202 12.97 L6.42 20.9/ (0.18) 531 l%.791 2191 10.96 117.-151 1133 (4.04) 21,6?1 (5.00) (1423) _'I.N9 2425 26.80 [L40 12.53 12.42 61? 2.46 5.96 15.46 19.45 2036 i, 7; 1.79 826 2ussrll [000 Nuhie ln~li~r /8.'1) 19.991 6.07 /1.68 _+Sd 3S7H 75-63 ?35 ?, 01 /J.59/ (11521 30.03 /6.49 '_Oj _Z_'S irl.l ~r .Sfip 500 ~C'itiGr'uup l'o/ur /nd~-~ AYA41 ~H.361 6:6 /d89 45/ 29.9J' 1467 L'.: _' h.Uh' /[L?L /_'0.851 3L'9 /i_7/ i_e? 2080 /.99 L/nrnlrzgcter C'<0: [ur;He 6uhu~ 19.41/ NJ81 504 /_'. O,P 7. ib 26.6/ l'_UO 6J1 '..1? /199/ NV_69l _'RA4 7?9? .1.95 /8./~ L4_' NOT FOR USE WITH PARTICIPANTS Page 1 of 5 Re~rement Data as of March 3I. 2008 Plans Group M~rkets ~ Janus Enterprise Hartford Midcap HLS (9.74) (9.65) 5.01 (0.89) 12.50 11.05 17.84 1724 6.14 1439 10.82 - 33.75 26.58 121.90 51.81 (30.52) 25.42 (39.93) (3.62) (2828) (1422) 35.82 37.67 20.69 16.44 11.40 16.78 13.22 11.74 21.81 1530 RivnelLMidCap Gr0 uth lnd~=r (70.9.11 X4551 .. [S. JI 5.15 'Z54 7286 57?9 /11.751 ('0.151 13?.9U 91J1 /593 2NI lOb6 [1.43 SdP,YfidCop 400~CitiGrnup Grou'tL LtAer (9.OSr 13.151 Z4fi' 13.81 Rh'/ - 3486 7X.'4 9Jh 17,97 /l y.l7J 30.95 /40/ 1.3.51 S.RI [3.50 .Llorriinyaur Cut Mid-C iy~Gro~~~dr RiverSoume Mid Cap Value (lL6-'I (10.99) /_'+.4J/ (623) 7.34 9.69 /3.67 21.79 3.33 - 17.9X - 13J6 - 60.99 - I4 ?XI - Il99RJ - r-'"-'~1J - 35.96 47.69 /3.33 23.80 9. b'4 16.67 1,00 17.00 [3.04 10.06 Ruc,crlLL-IidQ<p 1'uLir G~drr (8.611 /14. C1 6i' /6.:1 .1'J6 i4_i% i_Ox /0.1U 79.18 '.3~ 14.6{~ 3X'.0? ?3J[ 12.65 7U?_' 1L47J S&P.IG~ICap 400 C1GGmup l'nlur /nder (N_61~ //L761 6.11 /h'3 9J1 - 16? _'. 23 1'. Nl '. [4 N010~ 90_LY /8.%i 77.18 14.62 1.65 ,t/ornin,gnmr Cnc Jlid-Cap laGre AIM Small Cap Growth Hartford Small Company HLS lXS4/ (12.94) (14.03) /lL6?/ (7.15) (6.17) S3/ 6.93 12.13 l{,jh' 12.66 19.15 1.60 7.58 728 _'S, iX 1623 1838 194 23.16 11.61 X.50 90.64 65.82 1X.15 (0.74) (13.12) 6.I? (13.79) (14.92) I/.125/ (28.01) (3023) 3~.Ni 39.12 55.87 /7.Yi 6.81 12.18 8.X'1 832 2LOl /S,X? 1424 14A2 0.83 1139 L423 Poia.vell ?000 Grou9h /nde~ Il~h'3 1891 S?4 N?! L'S 7_'95 /. _'.3 44,04 !_'7_L3/ r9?3/ 130_'6) 4X.54 U.3/ 9.15 /3,35 ZOS SdPSn¢dlCap 600'CitiGro~ip Gruvth lndec 1X.50 C.39/ S.NX [S.U 6.15 - 7.29 !J 5? 257 11.1X1 /l5.?6/ 41.3/ 31.00 9?2 /0.54 1.60 :Nm~rzni~smr Cut Small Grovrh Skyline Special Equities Portfolio (14.451 Q 1.11) 110.6X1 (21.01) 4.3/ 2.18 [3.03 L3.03 4.34 5.08 /Z9/ 35.43 51.1 (7.17) 69J7 (7329) /3351 2421 /R9U 13.92 l2 ?.XNI (729) 45.54 40.71 /IA! 16.61 5.02 10.89 /O.X/ 18.71 ?S9 (9.91) Pocc,adl 'OOOla/ue bv/er /6.531 I/h.X3~ 9.33 [5.91 %.46 3/. 1N /6d5/ 11.99/ "53 N.0' I//.4.i/ 16.03 __15 4?I 73.4X /4.1X/ .S&P SnudlCitp 600'CillGrnup RJue ledcr 15.46/ llJ, i>i 4.19 /6.09 Z77 - G_061 1.24 20_N6 /3J0 /79-911 40.24 _'3. _'i 6JX /9.5? 15.541 llnrningx¢n~Coc Sam//1'~duc 16901 Rl.9U i?X' N19 ']0 'Z 39 I6_I41 6.18 /X.69 15,47 //UJ1i 1]_iX 2/.N 6A0 76_'? /6.0,¢/ NOT FOR USE WITN PARTICIPANTS Page 2 of 5 Retirement Data as ofMarch 3l. 2008 Plans Group M~rkets ~ anus Adviser Incemational Growth (6.46) 1491 30.76 3220 12.93 - 16.86 8132 (13.04) (22.78) (25.62) 34.78 19.85 31.73 44.63 26.14 615Cl Fd FF Grznrdi bider Ix.U?I _'.1' 17.71 30?0 4.57 133 2277 29J1 114.401 (27.7U lISJ6/ 31.79 /fl7N 7.3.67 11.69 [6_N7 i fruwinge(w~CoC /~~reiyn Lor,~e Grmnh (9.51/ -'-~-' 75.70 ?OS9 5.80 b.65 14.17 49. ib 12/_04) (?7,051 IIIJ SI 33_H7 1flB 15.13 13.95 16.26 Hartford IutemaNonal Opportunities HLS (10.76) 10.63 17.97 22.89 7.02 034 12.76 39.86 (17.13) (18.73) (17.94) 33.10 18.08 14.62 24.46 27.40 LfSC7 FdFG [ndre /A:H-'/ 1_'.1'1 /3J9 1190 5. i6 _'. pb _'033 1?.30 /73. J6/ 27.171 Il i. bh/ 39./? _'U. RI 17.01 26.86 71.69 .Hureing~~n~ Cut: Rnrigrz Lmge B(rnd American Funds: Capital World Growth and Income /91,'1 (7.77) 11.10/ 5.51 [3?' 14.57 'OJ6 2133 l5/ 11.08 579 17.67 /2_i2 15.89 4018 26.96 (/6 471 1.11 27.6'1 (522) I/6.691 (7.47) 33. 5N 38.46 1739 18.90 /7J? 1428 24_?7 21.85 [?J/ 17.09 .L/SO It'nrld Lelur Id.9ii _. ,'?l 10.19 [6. i' t0_' [6.'3 _'1x(1 _'534 I/1.9_'I 116.5'1 /[9,±71 33JI l5'S [0.11_' ?Ob5 9. i,' ,Varrzin~~aur Cin' IL'or ld 57ocd /9.,52/ l'A61 /0.J? 1?. _'7 s.RU l1 '_' 19.7/ 7/.13 /9.141 /77.571 /74761 37.79 /S,P 11.6/ /9.7? ([?.Y NOT FOR USE WITH PARTICIPANTS Page 3 of 5 Retirement Data as of March 31. 2008 Plans Group M~rkets ~ alvert Social Balanced (5.47) (3.44) 4.01 7.88 3.17 20.23 16.53 12.11 (328) (6.80) (1220) 19.32 8.26 5.65 8.77 2.76 artford Advisers HLS (7.70) (2.73) 5.96 8.00 3.87 24.51 24.66 10.59 (0.75) (4.64) (L399) 18.49 3.74 724 10.70 6.64 anus Balanced (0.90) 7.44 9.74 10.15 7.48 21.87 3120 23.51 (2.16) (5.04) (6.56) 73.74 8.71 7.75 10.56 10.15 0°~, S'&P iUO dU"-;, Lehmnrz Igg - - - - - 13.63 20.9N /L94 1099/ I.7J2) /28_'1 /8.48 N.30 4.01 /[.ll fi14 lnrnirrgsmr ('at .Hodernlr .J/(nrmion //J41 1/.99/ ?.SH 9?'I 4.45 /y.63 /3. i] /OJ[ /. N2 I?.051 (2021 10.3? 8.8fi 5. l3 11.19 599 amlays Global Investors LifePath 2040 (738) (729) 629 11.66 3.66 26.54 2526 2L06 (9.93) (13.52) (18.58) 27.65 11.08 8.01 16.64 197 arclays Global Investors LifePath 2030 (6.04) (5.40) 623 10.77 3.95 24.19 22.41 16.56 (5.89) (10.53) (16.04) 23.48 IQ51 737 14.83 238 Barclays Global Investors LifePath 2020 (4.43) (3.12) 6.05 9.61 4.08 20.90 19.67 13.84 (3.98) (736) (13.01) 2037 8.63 628 12.77 3.06 Barclays Global Investors LifePath 2010 (226) (0.09) 5.74 8.14 4.50 16.31 1596 9.21 0.46 (L91) (8.57) 15.45 723 4.94 9.88 3.92 Barclays Global Investors LifePath Retirement (1.58) 0.90 530 7.61 4.78 10.44 1022 4.59 4.47 1.40 (4.98) 15.50 6.07 4.05 8.52 4.77 a(or n[g,nm~Cat Tar;~t4-0urc '1130' /8A01 U_277 6_°6 /Ld? 3J0 ?4.R6 _'1. 5d [9.J' ~>h,6/ I/2 /ll I7 i.681 =J. 3J 11.31 '?,v /J.J3 fiSJ ~Honnri,KVm-Cue Ruget-0atr 'Oh 2019 (6. ?3/ /3.11/ SJO 9.79 3.98 2/.04 /9.91 /S 53 /3.951 ifi9hl (IlJ4/ 20.'_7 9J.Y S. h'0 /2.45 6.0: ,Ylnrnirrgstar(ah larger-Umr 3000-J17J (3J6i !0.33r 4.8N Z00 4.JZ /435 /350 9.09 _'. ?U (O.SJ/ NJl/ 17.67 6_n^_ 3.68 B. iN 511 MFS Utilities (9.4L) 6.07 20.66 25.49 1027 31.55 17.79 31.79 7.06 (25.02) (2433) 35.96 29.88 16.81 37.55 27.58 SK-PCGIin'hx7rc /9.9fi ~Lfi3~ 7'.9? /2?5 h_0~ '465 I4J'4 /9JX/ 5'.19 /30.44/ X29.99/ -'h '6 _'J?F 16.89 20.99 /9.3N Horrzfnye9nr Cu1'Spedn6r-LTildies NO_l19r 0.35 /4,34 /9. ?3 '.l' 1h.13 /9J9 /S.N' 8.43 I?0.7d1 x'3.83/ ?4.6.5 '3Jh /3,59 26.03 _'U.39 NOT FOR USE WITH PARTICIPANTS Page 4 of 5 Retirement Data as ofMarch 31. 2008 Plans Group M~rkets ~ 1 ~ Putnam High Yield Advantage (2.75) (3.04) 5.84 930 3.53 1337 (9.53) 5.89 (9.04) 3.10 (0.58) 2720 1129 325 12.1] 3.44 l.ehnwn Brothers L'S Cnrporare /7/,¢h Yield Bond [ndc (_i03 /.i74 4.89 R.67 1.81 12.74 L8? 239 (i,86) i.,R I1.1 // 28.97 lLl_3 '_71 ILRS L~P7 Llorvrin~xtar Cm: Iligd Yirld Braid Hartford Total Return Band HLS (3.5hy 0.43 11.65 3.51 3.89 425 Z17 4.42 3.d4 5.91 /31? 1135 /8.131 8.15 ?.OS (2.02) /?. P_l 11.98 1.39 8.68 N.SL 10.08 2-I J4 7.85 999 4.62 _'.59 2.R5 !0. [4 4.R0 /A% 4.67 Lr/mnu~CS.iggn;,ntr BonA/nder l.G Z6? s.lh' 1.iN 6.01 46i 8.49 s0_A','/ IL13 8_Jl 781? 1J0 1.31 1.43 1.33 L9° ilurnni,~etnr C'ol: lmernmdi~ne°-7enn Bond 0.39 3'3 3_iYiY _,?5 i. U6 8_A7 "'96 U.?il 9.11 ".69 N. 01 iJ0 3.91 /. d'0 1.i5 dJU NOT FOR USE WITH PARTICIPANTS Page 5 of 5 PERFORMANCE The Hartford's DCPIus Pro ram Total Return Avg Annual Return Iacepdon ~ESTME~` CHD~CES Month M1 3 Mo. YTD 1 Yr. 3 Yr. 5 Yr. 10 Yr. Since Date Incept Undedying_ + Period landing March 31, 2008 Fria "Specialty" Investment Optioes MFS Utilities' -2.37 -9.47 -9.47 5.80 20.36 25.18 10.00 n/a 02/14/92 ;RNATIONAL/ GLOBAL an Funds: Capital World Growth and Income' -0.49 -7.83 -7.83 5.25 ord International Opportunities HLS -2.42 -10.82 -10.82 10.37 Adviser International Growth -3.08 -6.52 -6.52 14.42 LL CAP Small Cap Grow[hz -1.39 -12.99 -12.99 -7.38 ord Small Company HLSz -2.55 -14.08 -14.08 -6.40 ers AMG Skyline Special Pquitios Portfolio -2.38 -11.17 -11.17 -21.21 CAP ord MidCap HLS 0.15 -9.71 -9.71 -1.14 Enterprise -1.70 -9.80 -9.80 4.75 Source Mid Cap Value' -2.96 -11.05 -I 1.05 -6.46 GE CAP ~ican Century Equity Income 0.59 -5.90 -5.90 -5.41 can Funds The Growth Fund ofAmerica -1.39 -8.03 -8.03 0.23 ity Contrafund -L58 -1 L27 -11.27 4.61 ord Capital Appreciation HLS -3.86 -I 1.45 -I 1.45 1.93 ord Dividend and Growth HLS -0.60 -7.22 -7.22 -0.96 ord Index HLS° -0.48 -9.57 -9.57 -5.56 ord Stock HLS -2.10 -12.07 -12.07 -8.01 Twenty -0.26 -6.05 -6.05 24.22 'sT ALLOCATION /BALANCED art Social Balanced -0.40 -5.53 -5.53 -3.68 ord Advisers HLS -1.47 -7.76 -7.76 -2.97 Balanced 0.02 -0.97 -0.97 7.17 ays Globallnvestors LifePath 2040 -0.11 -7.44 -7.44 -7.52 ays Global Investors LifePath 2030 -0.16 -6.10 -6.10 -5.64 ays Global Investors LifePath 2020 -0.15 -4.49 -4.49 -3.36 ays Global Investors LifePath 2010 -0.21 -2.32 -2.32 -0.34 ys Glubal Investors- LifePath Retirement -0.20 - 1.64 -1.64 0.65 14.28 21.03 - 14.23 06/06/02 17.69 22.58 6.75 n/a 07/02/90 30.43 31.87 12.65 13.83 05/01/97 - - - -0.33 04/07/06 11.85 18.85 7.01 9.24 08/09/96 1.93 12.75 4.82 n/a 04/23/87 10.77 16.95 14.10 12.22 17.55 5.88 5.33 9.06 10.90 12.46 8.68 5.26 6.04 18.86 11.06 7.96 13.94 - 15.42 7.88 19.57 10.66 13.82 5.97 10.64 2.83 9.71 2.60 19.33 7.62 3.75 5.70 9.47 6.02 5.97 5.79 5.48 5.04 n/a 07/14/97 n/a 09/01/92 n/a 12/11/06 n/a 08/01/94 n/a 05/21/02 n/a 05/17/67 n/a 04/02/84 11.20 03/09/94 n/a 05/01/87 11.17 08/31/77 n/a 04/30/85 7.55 2.93 n/a 09/02/86 7.72 3.61 n/a 03/31/83 9.88 7.21 n/a 09/01/92 - - n/a 04/08/03 - - 9.87 04/08/03 9.34 - 4.55 03/07/02 7.81 - 4.28 03/07/02 - - 7.19 04/11/03 DCPIus 5/28/2008 Page not valid without the other(s) Page I of 2 r~;xrvxivlAl~L~: the r~arHOra~s li~rcus rrogram 'rbtsl3tetr~ AugAhnnal~etwv. ;_ ~ , ' ~ ,'NToi1tG ~,r ~ ~, p ~ , _, ~ 3130: 1"fD"':~1'r. 3Yr. 5Yr. 'lb'~'at. 'SY~ic~, ~g ~ ~ y '_~ ~~~~y( ~ ulW, Q~~~'y~~~~ Putnam High Yield Advantages -0.10 -2.81 -2.81 -3.28 5.58 9.03 3.27 n/a 03/25/86 Hartford Total Return Bond HLS -0.82 0.37 0.37 3.25 3.99 4.16 5.65 n/a 09/30/77 PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE RESUI: I'S. Iie[urns will vary from period to period as will principal values. An investor's units/shares, when redecmod, may be worth more, or less, than the original coal. l~he Hartford is The Hartford Financial Services Group, Inc- and its subs'idiancs, including issuing company Hartford Life Insurance Company. Variable investment options are available throw Separate Account 14 (inception date 8/19/05). DCP7us~"~ is funded by a group variable annuity conuact f IL-17402 (WA, PA, WI). All contracts are issued by I Iartford Life Insurance Company (Simsbury, CT). Total realm includes capital appreciation (depreciation), realized gain (loss), plus reinvested dividend or interest income. Results shown do no[ take into account personal income taxes or capital gains taxes. Performance is stated after deduction of total plan operating expenses, applicable sepamtc account charges, and all other applciabel contract fees. W i[h respect to performance displayed, where inception of the underlying fund precedes that of the scparace account, performance is given since the inception of the undorlying Cund (whereas the inception date for Separate Account 14 is 8/19/05). In such cases, the performance given is hypothetical and is based on the actual performance of the underlying fund. This presentation must be preceded or accompaniul by currently effective disclosure documents (including the Program Overview, Investment Options Objectives and Investment Options Fee Schedule). Read this infortna[ion carefully before you invest or send money. Questions should be directed to your local Hartford Representative, or call l-800-528-9009. 1 Investments in foreign saeurities may involve different and additional risks associated with foreign currencies, investment disclosure. awounung, securities regulatioq commissions, taxes, political or social instability, war or expropriation 2 Small Company stocks generally have higher risk and return chametcristics than large-company stocks. Mid Cap stocks generally have higher risk and return characteristics than large-tympany stocks. &P is an unmanaged index. "Slanda[d & Poor s°, "S&P", "Standard & Poor's 500" and "500" arc trademarks ofthe McGraw-Hill Companies, Inc- and have been licensed for use by Hartford Life Insurance Company and its affiliates. This investment option is no[ sponsored, endorsed, sold or promoted by Standard and Poor's ("S&P') and S&P makes no representafion regarding the advisability of investing in this invcslmcnl option. S&P is an unmanaged index not available for direct investing. 5 Russell 2000 Index consists of 2000 smallest stocks in Russell 3000 Index_ Russell 3000 Index is wmposed of the 3000 largest U-S-companies by market capifelization, representing approximately 98% of the 11.5. equity marker. 6 The S&P 400 is an unmanaged index measuring the pedormancc of the mid-size company s'egmenl of the U.S. market. Il does not represent the performance of this or any spccilic investment option. This index is not available for direct investment. 7 The State Street Global Advisers index funds are commingled trust investment vehicles for which State Street Global Advisers serves as trustuc. 8 Securities rated below invzstrnent grade, "6[3[3", arc wmmonly referred to as "high yield, high risk" secuntics or'junk bonds'. 9 The fund's invcsnncnts arc conccmmted in a specific industry or sector, and arc subjcat to gmaler risk than tmditioual diversified equity funds. THE HARTFORD DCPIus 5/28Q008 Pagc not valid without the other(s) Page 2 of 2 The Hartford's DCPIus Fee Schedule IA~L~SL~EBIZ Q~tjpp +PeriodE Marck31,2008 Mortality, Expense Risk & p`~ $e~t Underlying Fund Level Fees+ InvesUnent Management 12b-1 Fce Ex~ ses Fee p Total Fund ~~'ng Expensestt Total Fces Chazgos' SPECIALTY MFS Utilities' 0.25% 0.60% 0.25% 0.20% 1.05% 1.30% INTERNATIONAL. GLOBAL American Funds Capital World Growth and Inwmc~ 0.25% 0.37% 0.50% 0.23% 1.10% ].35% Hartford International Opportunities HLS ~ 0.25% 0.67% 0.00% 0.08% 0.75% L00% Janus Adviser International Growth 0.25% 0.64% 0.25% 0.32% ].21% 1.46% SMALL CAP AIM Small Cap Growth 0.25% 0.70% 0.25% 0.31% 1.26% 1.51% Hartford Small Company HLS 0.25% 0.68% 0.00% 0.04% 0.72% 0.97% Managers AMG Skyline Special 8quities Portfolio 0.25% 1.37% 0.00% 0.02% 1.39% 1.64% MID CAP Hartford MidCap HLS3 0.25% 0.66% 0.00% 0.02% 0.68% 0.93% 7anus Enterprise' 0.25% 0.64% 0.00% 0.30% 0.94% 1.19% RiverSource Mid Cap Value' 0.25% 0.71 % 0.25% 0.53% 1.49% 1.74% GE CAP American Century Equity Income 0.25% 0.97% 0.00% 0.00% 0.97% 1.22% American Funds: The Growth Fund of America 0.25% 0.27% 0.50% 0.19% 0.96% 1.21% Fidelity Contrafund 0.25% 0.71% 0.00% 0.19% 0.90% L15% Hartford Capital Appreciation HLS 0.25% 0.63% 0.00% 0.04% 0.67% 0.92% Hartford Dividend and Growth HLS 0.25% 0.64% 0.00% 0.03% 0.67% 0.92% Hartford Index HLS° 0.25% 0.30% 0.00% 0.04% 0.34% 0.59% Hartford Stock HLS 0.25% 0.46% 0.00% 0.03% 0.49% 0.74% Janus Twenty 0.25% 0.64% 0.00% 0.24% 0.88% 1.13% ASSET ALLOCATION /BALANCED Calvert Social Balanced 0.25% 0.70% 0.00% 0.21% 0.91% 1.16% Hartford Advisers HLS 0.25% 0.60% 0.00% 0.04% 0.64% 0.89% 7anus Balanced 0.25% 0.55% 0.00% 0.24% 0.79% 1.04% Barclays Global Investors LifePath 2040 0.25% 0.35% 0.25% 0.50% 1.10% 1.35% Barclays Global Investors LifePath 2030 0.25% 0.35% 0.25% 0.50% 1.10% 1.35% Barclays Global Investors LifePath 2020 0.25% 0.35% 0.25% 0.50% 1.10% 135% arclays Global Investors LifePath 2010 0.25% 0.35% 0.25% 0.50% I.10% 1.35% arclays Global Investors LifePath Retirement 0.25% 0.35% 0.25% 0.50% I.10% 1.35% DCPIus 5/28/2008 Page 1 of 2 The Hartford's DCPIus Fee Schedule I~fortality, Underlying Fund Level Fees+ l~~e~~ ~~{~~~( Expense Risk & Investment Total Fund Total Fees Administration Management 12b-1 Fee ~~ Operating C~~s +PeriodEndia March 3l 2008 ~~esst Fee Expenses Expetisestt High Yield Advantages 0.25% 0.66% 0.25% 0.14% 1.05% 130% I Total Return Bond HLS 0.25% 0.46% 0.00% 0.04% 0.50% 0.75% This table shows only the asset-based fees, charges and expenses associated with the investment choices of the group variable annuity contract. Please refer to the product prospectus or disclosure documents, as applicable, for information on other fees and charges that may apply to your plan's contract such as a contingent deferred sales charge, annual maintenance fee, and other fees or charges, if applicable. t This reflects the program and administrative charge deducted from the assets of the Separate Account on a daily basis at the annual rate shown above. For some contracts, the program and administrative charge is deducted on a quarterly basis instead of on a daily basis. Program and administrative expenses deducted quarterly from plan assets are not reflected here, but are shown on participant statements once deducted. If the program and administrative charge under a Contract is insufficient to cover actual costs incurred by us, we will bear the loss. If the program and administrative charge exceeds these costs, we will keep the excess as profit. We may use these profits, as well as fees and payments received from the fund families, for any proper corporate purpose, including, among other things, payment of sales expenses, including our expenses of paying compensation to broker-dealers, financial institutions and other persons for selling the Contracts. We expect to make a profit from the program and administrative charge. tt These are the Total Annual Fund Operating Expenses for each underlying fund as of its year-end. Total Annual Fund Operating Expenses are the expenses that are deducted from fund assets, including management fees, Rule 12b-1 distribution and/or service fees, and other expenses. Actual fees and expenses for the underlying funds vary daily. As a result, the fees and expenses for any given day may be greater or less than the Total Annual Fund Operating Expenses listed above in the table. More detail concerning each underlying fund's ~es and expenses is contained in the prospectus for each fund. Please refer to the reverse side of this document for important disclosure information. 1 Investments in foreign securities may involve difTercnt and additional risks associated with Coreign currencies, investment disclosure, acwunting, securities regulation, commissions, taxes, political or social instability, war or expropriation. 2 Small Company stocks generally have higher risk and return characteristics than large-company stocks. 3 Mid Cap stocks gencmlly have higher risk and return characteristics than large-company stocks. 4 5&P is an unmanaged index. "Standard & Poor's". "S&P". "Standard & I'oor's 500" and "500' arc trademarks of the Me(iraw-Hill Companies, Inc. and have been licensed for use by Hartford Life Insurance Company and its affiliates. This im~estment option is n 5 Securities rated below investment grade, "RRR". are commonly referred to as "high yield, high risk' securities or "junk bonds". 6 An investment in the Fund is no[ insured or guaranteed by [he Federal Deposit Insurance Corporation or any other government agency. Although the Fund seeks to preserve the value of your investment al $ L00 per share, it is possible to lose money by in 7 The fund's investments are concentrated in a specific industry or sector, and are subject to greater risk than traditional diversified equiTy funds. The I Iartford is "Che I lartford Financial Services Group, Inc. and its subsidiaries, including issuing company Hartford Life Insurance Company. DCPIusTV is funded by a group variable annuity contract HL-17402 (WA, PA, WI). All contracts are issued by Hartford Life Insurance Company (Simsbury, CT). his presentation must be preceded or accompanied by disclosure documents (including the Program Overview, Program Highlights and plicable Historical Investment Option Performance information), whichever ~s applicable. Read this material carefully before you invest or send money. DCPIus 5/28/2008 Page 2 oft ~ ~ . w~a~ s.a~, risk tolerance? ~•. 9h..i r.... t ~ ~ L l~ f ~i ~I/~' ..~ `; T 7 A What's your investment miH? , ~, -• ~~~,R,~.~,~„ :y~ .,--- ~~>} .~ ~ i ni~~ ~ ~ .., ... ,.~ .. •.~. _. l~hc Hartford Ilan for [.it~~ Srri~~s ~.;, ~ ~. `>r~,.~,,., ... ~~V I~.~O.It.il....n '~;~: ~~; 4~1 ,.. ~ ~h~~,,, '~`~nrx V.~4ICt V.F 111,~f~~.lr `~ .. ., ~'i .,,._..,....,~ `~ ~®® . ~, ~~ S ~~ a~ General (Declared Rate) Account Declared Rate of Interest Hartford Life Insurance Company (also referred to as "Hartford") offers competitive credited rates on current contributions, as well as on contributions made in prior years. The General (Declazed Rate) Account is not a mutual fund. It is an investment choice available through a group variable annuity contract or group variable funding agreement. The General (Declared Rate) Account investment choice is part of Hartford's General Account that includes our company assets. General Account rates are guaranteed by the claims paying ability of Hartford Life Insurance Company.' Hartford credits interest on contributions made to the General Account at a rate declared for the calendar quarter in which they are received This rate is guaranteed for the calendaz yeaz. Haz[ford may change the declared interest rate applicable to contributions made for any subsequent quarter at our discretion. Any change in the declared rate will be declared before the start of the quarter.Z Hartford Life Insurance Company Agency Ratings (as of 03/31/08) For each subsequent calendar year, Hartford Life Insurance Company will credit assets in the General (Declared Rate) Account at a rate guaranteed for the entire calendar year (the "Guaranteed Interest Rate"). The Guaranteed Interest Rate for a calendar year will be determined at the end of the preceding calendar year and will never be less than the minimum interest rate specified in the contract. Hartford may, from time to time, credit interest rates in excess of the Guaranteed Interest Rate. Guaranteed Interest Rate as of April 1,20082 Contribution Period 2Q2008 Rate 4.00° The following data shows how Hartford Life Insurance Company measures upto the financial strength criteria outlined. Further information is available upon requesT, the financial information presented below is on a statutory basis (as of 03/31/08) unless otherwise noted. These ratings apply to the company, not to any specific products. A.M. Best A+ 2nd highest of 15 A.M. Best categories Fitch AA 3rd highest of 24 Fitch categories Mo y s A t ig est o 1 0o y s categories tan ar Poor s AA- t ig est o 1 tan ar oor s categories r Neither Contract owners nor participants have priority claims on General Account assets. All assets of our General Account are available to meet the contractual guarantees and general obligations of Hartford Life Insurance Company. z Rates quoted are effective annual yields. New monies deposited in the General (Declared Rate) Account will earn the current quarterly rate through the end of the current calendar year. Contract values held in the General Account will be accounted for on anon-unitized basis. Retirement programs are funded by group variable annuity contracts or group variable funding agreements which are issued by Hartford Life Insurance Company. "The Hartford" is The Hartford Financial Services Group, Inc. and its subsidiaries, including issuing company Hartford Life Insurance Company. You should carefully consider the investment objectives, risks, and charges and expenses of the group variable annuity or group variable funding agreements and its underlying funds before investing. This and other information can be found in fhe disclosure documents and fhe prospectuses for the underlying funds, which can be obtained from your investment representative or by calling 1-800-8742502. Please read them carefully before you invest orsend money. THE HARTFORD ttt~c-SPN-2Q08 NOT FOR USE WITH PARTICIPANTS Page I o~2 General (Declared Rate) Account INVESTMENT GRADE DEBT INSTRliMENT ASSET COMPOSITION As of March 31,2008, 13.53% of the account consisted of direct obligations of the united States Government and its agencies (including mortgagesbacked securities). The balance is comprised of a diversified portfolio of corporate securities and short-term investments. General Account Investment Grade Debt Instrument Profile* (Dollars in thousands) 3/3]/08 Percentage Book Value* of Total Government Securities U.S. Government' 4,928,885,080 8.98% GNMA 64,744,108 0.12'% FHLMC 622,085,074 1.13% FNMA 1,038,805,573 1.89% CMO (Agency backed) 774,270,997 1.41% 7,428,790,832 13.53% Corporate Securities Asset-backed ~ 19,675,187,511 35.85% AAA 1,593,001,954 2.91% AA 2,824,805,773 5.15% A 9,858,071,313 17.96% BBB 9,729,049,210 17.73% BB 1,973,614,069 3.60% 45,653,729,830 83.20% Short Terms 1,803,218,202 3.29% TOTAL 54,885,738,864 100.02% * Asset composition is subject to change US Government includes municipals Asset Backed includes Commercial MBS Non-Agency This page is for informational purposes only, The information provided represents all assets in the General Account and is not specific to any Plan. Plan assets invested in the General Account receive a credited rate under the terms of the Contract. Neither Contract owners nor participants have priority claims on General Account assets. All assets of our General Account are available to meet the contractual guarantees and general obligations of Hartford Life Insurance Company. Rates quoted are effective annual yields. New monies deposited in the General (Declared Rate) Account will earn the current quarterly rate through the end of the current calendar year. Contract values held in the General Account will be accounted for on anon-unitized basis. Retirement programs are funded by group variable annuity contracts or group variable funding agreements which are issued by Hartford Life Insurance Company. "The Hartford" is The Hartford Financial Services Group, Inc. and its subsidiaries, Including issuing company Hartford Life Insurance Company, You should carefully consider the investment objectives, risks, and charges and expenses of the group variable annuity or group variable funding agreements and its underlying funds before investing. This and other information can be found in the disclosure documents and the prospectuses for the underlying funds, which can be obtained from your investment representative or by calling 1-800-8742502. Please read them carefully before you invest orsend money. THE kr~c-srN-zQox NOT FOR liSE WITH PARTICIPANTS HARTFORD Page 2 of 2 ,~ ~ . __ r ~~ ' ~~ ~ ~ • 1 I 1 ~ ~11 1 `~~ ...~.~......~~~,.~ ...............................................~~._.....~__._.._____...._._ __ -- - -- • ~I~Y~I_ :; ~, __ _ ,._..:_ ~, ~ ~~.. F4 Request For Proposal ~o~~S~FFOIR~oG ~ ti~ 0 W S OC ti~ol ~ ~~~ Nationwide Retirement Solutions On Your Side'" Nationwide Retirement Solutions • On Your Side" May 28, 2008 Elizabeth A Neville, "Town Clerk Town of Southold 53095 Route 25 PO Box 1179 Southold, NY 1 7 971-0959 Re: Town of Southold -Request for Proposal for Deferred Compensation Services Dear b4s. Neville: Nationwide Retirement Solutions is pleased to submit our response to the Town of Southold's Request fox Proposal As the "Town's current provider, we value the opportunity to serve your staff and plan participants, and we axe eager to continue our paxmership. We appreciate the opportunity to outhnc our ability and willingness to perform the services described in the RPP. Natiomvide confirms our commitment to perform the services outlined in our submitted proposal. Our proposal complies with all requirements of the Regulations and the Model Plan and clearly indicates all direct fees, indirect fees, and charges. Steve Angelis is authorized to commit Nationwide to perform the services outlined in this proposal. Why Nationwide Retirement Solutions? In the attached response, we have detailed Nationwide Retirement Solutions' offering to the 'Town of Southold. Fox your convenience, we have highlighted below Nationwide's experience and expertise, illustrating how we axe clearly the best choice to continue helping your employees prepare for a financially secure retirement. Experience: • Over 35 years of experience, founded in 1973 • Manage over $47 billion in plan assets • Exclusively endorsed by the National Association of Counties (NACo), the United States Conference of Mayors (USCIvI), the International Association of Fire Fighters (IAFF - FC) and the New York State Association of Counties (NYSAC). • Administer nearly 8,000 public sector programs, representing over 1.55 million plan participants • SYflll l'arkwuotl I'Wm Uuhlin. Uhin i3111fi Awriiics u1fttM ihnneh 6vuunwitlc Imcumcm SttvlOC Cni~po2iinn, McmFer NASU In Mi<hipnn only: Nalionwidc In.c,amcm Smx Co[poralion Nationwide Retirement Solutions • On Your Side` Education and Communication: • Local representation- David Satmiy Retirement Specialist Join it.; / - ~ ~ ~~ r ~ ; Live it.~- our global outreach program dedicated to educating all eligible employees throughout all phases of retirement planning ^ Wide varieh of deferred compensation and financial educational seminars available fox your employees Individual counseling, both on-site and via toll-free lines to our Direct Access Department ^ Anew service being offered through our llixect Access department, our Personal Retirement Consultants arc focused on buIlding lasting relationships with participants Morningstar° Online Guidances'" Tool: ^ Advanced online investment education, research, and asset allocation service for all levels ofinvestoxs accessible via our Web services Easy to use, industry-leading proprietary investment research tool at ^o additional charge to the participant or the Town Investment Options: • 42 investment choices representing over 20 different professional money managers • Vast majority axe non-proprietary funds Natiomvide Fixed Account currently crediting 3.85% as a portfolio rate for the second quarter of 2008. Account Information Access: Toll-free telephone customer service from 8:00 a.m. to 9:00 p.m. Eastern Standaxd'1'ime Monday through F'xidap ^ Award winning Web site capabilities • Automated Voice Response System • Account accessibility 24 hours a day, seven days a week, 365 days a year Cost: The value associated with a retirement program is reflected not only in the asset management charge, but also in the underlying investment expenses, performance of the investment options and the competitiveness of the guaranteed Fixed Account interest rates. Conclusion: Nationwide Retirement Solutions is uniquely qualified to continue searing the retirement plan needs of the Town and its employees and has the flexibility, pxo~ren experience, dedicated resources, and the latest technologies to lead the Town of Southold's plan into the 59011 PerkwooJ Ylnee. Uu~Gn.Ohlu 311116 AruriJec of2rW ~hrwgh Fmionwide Imvamenl StrNice GryomlluR MemAr NASU In Yli<M1igan only. Netionwi~c Inrcamrnl Sv,T. Cnrpumtiun ® Nationwide Retirement Solutions On Your Side" future. We look forward to the opportunity to engage in fuxthex discussions to determine how we can best meet the needs of your plan. ]'lease feel free to contact Emanuel Mahand at (877) 274-4869 or by email at mahande@nationwide.com, ox myself at (614) 854-4985 or by e-maIl at angeGs@nationwide.com, regarding any questions you may have. Sincerely, Stephen M. Angelis Vice President, Sales Nationwide Retirement Solutions Lc: Emanuel Mahand, Program Director I3exnie Keeney, Account Executive u • 5900 I'avkwnud Place Uuhlin. Uhlo JUil6 ticcm'i0ts uliYnl iM1inugM1 NatianwNC Invcclmcnt Savict. QvPomlinn. Mcmlxr NAtiU In MicM1iuun only: NnGunwidc Imtsvncni Arcs. Cotpo[alion Town Of Southold, NY 457 Deferred Compensation -Request for Proposal SECTION I. CONTRACTUAL REQUIREMENTS "Agree" or "Disagree" must be indicated for each of the following specifications. The following specifications can be found in either the Regulations or the Model Plan, all of which should have been enclosed as attachments. Please include reasons for any rejections or disagreement of any specification and alternative options, if applicable. There should be neither elaboration nor qualification for "agree" unless otherwise requested. Specifications of the Regulations 1. Section 9000.2 (b)(4) - As a Financial Organization authorized to do business (provide investment products) in New York State, you agree that your firm is one of the following: (a) a Registered Investment Advisor, (b) a Bank or (c) an Insurance Company qualified under the laws of more than one state. If you are an Insurance Company acting through a subsidiary in New York State, then the Subsidiary Insurance Company must certify that it (the Subsidiary Insurance Company) is qualified to do business under the laws of more than one state. . Agree. 2. Section 9001.2(b) - We have appointed a deferred compensation committee to act on our behalf and you agree to interface with this committee. Additionally, if the committee decides to be the grantor of our trust, per Section 9002.1, then you also agree to interface with the trust and trustee: aUfunding contracts, of whatever nature, will be "issued to, owned and retained by the trustee". Agree. 3. Section 9001.4 (a) through (d) -You agree to abide by all four (4), especially not allowing annuity type payouts. Agrcc. 4. Section 9002.2 (a)(5) -You will provide evidence that bonds and insurance have been secured by you pursuant to the Regulations. Agree. 5. Section 9002.2 (a)(6) -You will acknowledge in writing that you will act as a fiduciary under Section 457(8) of the Code and under State and common trust law principles with respect to all trusteeship, administrative or investment matters for which you assume • responsibility. Additionally, you agree to indemnify our Plan as a result ofany cause of Nationwide" Retirement Solutions o~ rewsde Town Of Southold, NY 457 Deferred Compensation -Request for Proposal action brought against it as a result ofacts or omissions together with the reasonable costs oflitigation arising therefrom. llisagree. Nationwide Retirement Solutions will serve the Town as a nondiscxetionary provider of bundled administrative, and xecoxdkeeping services and will not be exercising any discretionary control or authority over the plan or plan assets. We agree to perform all services to the Town as an expert in defined contribution/deferred compensation administxadon and agree to hold ourselves out as possessing greater knowledge and skill than the average person with respect to the Town's third-party administrator services. As a nondiscretionary- provider, we arc not a plan fiduciary, but will adhere to the prudent man standard of care. 6. Section 9003.3 (a) -Your proposal shall be in writing and contain a representation that the proposal complies with all requirements of the Regulations and clearly indicate all direct fees, indirect fees and charges. Agree. 7. Section 9003.5 (a) -All contracts and/or agreements shall be in writing, shall be awarded on the basis of a competitive bid, and shall not exceed five (5) years in duration, and shat/ impose no penalties or surrender charges for the transfer ofany asset(s) or responsibilities on expitauon ofthe contract or agreement. • Agree. Section 9003.5 (b) -You will not permit any other Trustee, Administrative Service Agency, Financial Organization, independent consultant or person to provide services in respect to the Model Plan we have adopted. Agree. Section 9003.'7 -You will not permit an investment of any amount, in any annuity contract providing for a term which could exceed five (5) years or which is measured by one or more natural lives or any life insurance or other providing traditional death benefits. Agree. 9. Section 9004.1-All information obtained by your position will remain confidential and you will neither solicit nor provide products other than deferred compensation. Agree. ~I ® Nationwide" Retirement Solutions a~rw,sb: Town Of Southold, NY 457 Deferred Compensation -Request for Proposal • Section 9005.3 -Statements to participants will be provided quarterly, even in situations where no contributions are being made but funds are on deposit. You also agree to provide, at least annually, an additional statement to participants disclosing all fees and expenses paid out of or charged against plan assets. Nationwide agrees to provide the administrative fee and fund expense ratio information for all investment options on quarterl~~ participant statements, in lieu of an annual disclosure statement. 10. Section 9005.4 -Agree to satisfy the bonding and insurance requirements of this Section and provide evidence of such. agree. Il. Section 9006.2 -You agree to include in your contracts and agreements a provision that the contracts and agreements are subject to the Regulations and the Model Plan, and that such Regulations and the Model Plan are made part thereof. Agree. CJ Nationwide' Retirement Solutions On YowSide' Town Of Southold, NY 457 Deferred Compensation -Request for Proposal Specifications of the Model Plan 1. Section 3.2 (a) -The Model Plan requires a minimum deferral amount to be $260 for any plan year. Your proposal will state this minimum requirement wherever requested :~gxee. 2. Section 4.1-You acknowledge that the amounts of compensation deferred by the participants will be invested, according to the participant's investment directions, no later than two (2) business days following receipt thereof, in the appropriate investment funds. Agrec. 3. Section 4.7 (a) -The entire value of each participant's account, including any annuities, will be set aside and held by the trustee, in trust, and that your contracts and agreements will recognize and reflect such. Agree. Nationwide' Retirement Solutions On YwrSde Town Of Southold, NY 457 Deferred Compensation -Request for Proposal SECTION II. TRUSTEE SERVICES NOTE: You may s~ this section entirely ifyou are not a Financial Organization bidding to become Trustee. You do not need to copy any ofthe questions. Move to next applicable Section. Section 9002.1 (a) of the Regulations states that assets must be held by one or more trustees pursuant to one or more trust agreements. Such agreements must satisfy all the requirements of Sections 9002.1(b). Section 9002.1(b) also indicates who may be trustee. We reserve the right to create our own trust as provided by this Section 9002.1 (b) but desire to explore the alternative of a Financial Organization acting as trustee. Please respond to each of the following statements if you desire to be considered as trustee. If any statement does not apply, please indicate so by responding: "Not Applicable". Requested Infotrnation A. The name of your firm, home office address, local address (if any), name of primary contact person and telephone. Nationwide Retirement Solutions 5900 Parkwood Place llublin, Ohio 43016 Primary Contact limanuel Mahand, Program Director - Ncw York Nationwide Retirement Solutions 180 Juniper Lane Swedesboro, NY 08085 (877) 274-4869 B. Whether your firm has provided trust services to any New York State municipality for their deferred compensation plan. List names of such municipalities. Yes. Through Nationwide Trust Company, Nationwide Retirement Solutions (Nationwide) has provided trust services to a number of New York State municipalities. Nationwide Retirement Solutions of New York has successfully been through the "acknowledgement" process with all of their New Yoxk Plans and will provide assistance with preparing all of the necessary documents required for a successful filing. Please refer to the New York Municipalities section of this response fox a list of the plans "acknowledged" fox use of the model plan. • Nationwide" Retirement Solutions o~YOwside- Town Of Southold, NY 457 Deferred Compensation -Request for Proposal C. Description of trust services you would provide acting as a Financial Organization rendering only trust services. Please specify all fees, expenses, charges and costs for the trustee services. Please provide disclosure of any compensation structure. Trust only services are not offered under this proposal. D. If you are selected as the Financial Organization acting as our trustee and desire to additionally respond to performing the duties of an Administrative Service Agency, as described in Sections 9002.2(b)(1) and 9002.1(b)(4), please indicate your intention here. It is our intention to continue performing the dunes of an Administrative Service Agency in order to keep the 't'own of Southold's Plan in compliance with the New York State Model plan. If you respond affirmatively, then it will be necessary for you to complete the questions in Sections III and IV addressed to the Administration Service Agency bidder. However, in addition to stating your intention to bid, it is requested that you indicate here the effect this will have on any fees, expenses, charges and costs as distinguished from those previously stated in this Section. The cost of Nationwide'1'rust Company's trust services has been incorporated in our overall fees. E. The trustee will also be requested to aclmowledge in writing that it is a fiduciary with respect to all administrative or investment matters for which it has assumed responsibility as outlined in Section 9002.2(a)(6) and 9003.6 of the Regulations. Nationwide Trust Company will acknowledge in writing that it is a fiduciary with respect to the terms outlined in the Trust Agreement and as applicable in Section 9002.2(a)(6) and 9003.6 of the Regulations. F. Referring to 9005.4 of the Regulations, describe the type of bond and its limits that you will be furnishing. Include "cost disclosure" if it is your intention for us to satisfy any part of this obligation. Nationwide offers a certificate of liability insurance. In accordance with Section 9005.4 (b) of the Rules and Regulations, the limit for this bond is the lesser of 1. 100% of the amount managed, administered, or held under the plan; ox 2. $25 million The certificate of liability insurance is provided at no cost or expense to the employer, the Plan, or participants fox the Nationwide administered assets only. • ® Nationwide" Retirement Solutions On Yaw Lde' Town Of Southold, NY 457 Deferred Compensation -Request for Proposal • G. Do you intend to supply us with a sample trust agreement for our consideration? If so, do you attest that this agreement meets all of the requirements applicable to trusts as stated in Section 9002.1(b) of the Regulations and Section 457(8) of the Code. Please refer to the Trust Agreement section of this response for a copy of oux trust agreement. We attest this trust agreement meets of the requirements in Section 9002.1 (b) of the Regulations and Section 457(8) of the Code. \J • Nationwide Retirement Solutions On Your Side' Town Of Southold, NY 457 Deferred Compensation -Request for Proposal • SECTION III. ADMINISTRATIVE SERVICE AGENCY/ FINANCIAL ORGANIZATION Please respond to each of the following statements if you desire to be considered as either the Administrative Service Agency and/or the Financial Organization. If you feel any statement does not apply, please indicate so by responding: "Not Applicable" and provide your reasoning. Company Background A. The name of your firm, home office address, New York State address (if any), and the name (including title), address and phone number of your primary New York State contact person whom we may contact about your proposal. Home Office Nationwide Retirement Solutions, Inc. 5900 Parkwood Place Dublin, OH 43016 • New York Primary Contact Emanuel Mahand, Program Director -New Yoxk Nationwide Retirement Solutions 180 Juniper lane Swcdesboro, NY 08085 (877) 274-4869 B. Give a very brief description of your company and its history of participation in similar public employee deferred compensation plans. In New York State such plans first materialized in 1985, include your specific experience in similar plans in New York since that time. Nationwide Retirement Solutions (Nationwide), founded in 1973, is dedicated to providing investments, education and administrative service solutions for public sector clients only, representing nearly 8,000 retirement plans, over 1.51 million participants and $46.2 billion in assets. We have administered 457 deferred compensation plans, according to the Regulations and the Model Plan, in New York since their inception in 1985. O^ a national level, Nationwide works together with the United States Conference of Mayors (USCM) to provide cities and their employees with a competitive deferred compensation program. As part of this Sponsorship, Nationwide pats a fee to USCM in exchange fox USCM's exclusive sponsorship, marketing support, and program oversight of Nationwide products made available under the program. 1~'or more information, including fees paid, Nationwide encourages you to visit www.nrsfoxu.com. Nationwide' Retirement Solutions o,. rowside- Town Of Southold, NY 457 Deferred Compensation -Request for Proposal • C. How many public employee deferred compensation plans do you currently provide administrative services and/or investment products? How many of these plans are New York plans? Nationwide Retirement Solutions provides investment, education, and administrative service solutions forneaxly 8,000 IRC Section 457(6) deferred compensation plans and over 400 401(a), 401 (k) and 403(6) plans. Of our 8,000 public sector plans, over 135 of those are New York cases. D. In the last three (3) years has any public employee Code 457(6) deferred compensation plan, regardless of geographic locations, terminated your (parent, subsidiary, or affiliate) services either through the competitive bid process or for cause? If so, by whom and under what circumstances. No clients have left Nationwide other than through the competitive bid process. E. List ten (10) client deferred compensation plan references for which your organization provides services and/or investment products similar to those requested in this proposal. It would be preferable if five (5) of the references could represent different size clients (based on assets) from New York State, if possible. Please include contact person name, title, address and phone number, number of participants and approximate size of plan assets. Sullivan County, NY 807 $1G.1 Million 21 Years Daniel Briggs, Commissioner of Personnel 100 North Street PO Box 5012 IVlonticello, NY 12701 845 794-3000 Town of DeWitt, NY 1G4 $4.4 Million 22 Years ohn Curulla, Comptroller 5400 Butternut Drive East Syracuse, NY 13057 315) 446-3392 • Nationwide" Retirement Solutions a, m~,~s~ U • Town Of Southold, NY 457 Deferred Compensation -Request for Proposal Nationwide Retirement Solutions maintains bonding coverage with a $24 million single loss limit. We maintain errors & omissions coverage with a $20 million per claim limit of coverage. • Oux Broker Dealer, Nationwide Investment Services Corporation, maintains errors & omissions Nationwide Retirement Solutions 10 On YOw Side' F. What professional liability coverage is maintained by your company for errors and omissions or any other act? Town Of Southold, NY 457 Deferred Compensation -Request for Proposal coverage fox the registered representatives with a coverage limit of $1 million per claim and a $15 million policy aggregate. G. Financial Organization's should provide appropriate "ratings" from the following: Standard & Poor's, Moody's, Duff & Phelps, A.M. Best and Weiss. If, as a Financial Organization, you have no ratings by any of these agencies, please explain. As a subsidiary of Nationwide Financial, Natiomvide Retirement Solutions is not an insurance company or issuer of debt and therefore, is not rated by these companies. However, ratings fox our product provider, Nationwide life Insurance Company, axe listed below: A.M. Best: A+ Standard & Pooxs: i~1- Moody's: Aa3 Fitch (formerly Duff & Phelps): AA- Nationwide Life Insurance Company's rating has not fallen below A- during the last five years. H. Provide any additional information that would distinguish your firm? Given today's market, competitors axe able to keep up with advancements in technology and • provide readily available information to participants. We believe the most effective way to fully benefit the participants is through in-person education and consultations which is what separates Nationwide Retirement Solutions from the rest of the competition. We believe this in-person education is successful as a direct result of our people. Nationwide Retirement Specialists axe dedicated, professional, deferred compensation experts who axe focused on delivering undeniable service not only to the participants, but the plan sponsor as well. 1'he Town's retirement specialist, Dave Sarmir, has been with Nationwide since 1993. Mr. Sarmir, who currently resides in Flemington, New Jersey, will continue to serve as the local point of contact fox all of the'I'own's education and communication needs. Mr. Sarmir hold his FIND, Financial Industry Regulatory Authority, Series 6, 63, and 65 licenses and all appropriate state health and life insurances licenses and he is a Certified Retirement Counselor (CRC). Dave is currently working on obtaining the Chartered Financial Consultant (ChFC) designation. He earned his bachelor in Management from Wright State University in Dayton, OH with a minor in Finance. • Nationwide' Retirement Solutions 11 On row Side.. Town Of Southold, NY 457 Deferred Compensation -Request for Proposal • SECTION IV. SERVICES Please respond to each of the following statements if you desire to be considered as the Administrative Service Agency. If you feel any statement does not apply, please indicate so by responding: "Not Applicable" and provide your reasoning. Marketing and Enrollment Services: 1. Briefly describe the marketing and employee communication strategy which will be used with our plan. Indicate the use of laptop computers, if utilized. Nationwide provides a comprehensive communication and education program that guides participants from enrollment through their retirement years. The program is distributed through a combination of written materials, education workshops, Web-based learning tools and individual consultations. This truly gives the Town's employees the opportunity to receive retirement plan education and service anytime, anywhere and by any method they choose. Individual Consultations • To maximize the impact of our education efforts, we strongly encourage all participants to meet with Dave Sarmir, the Town's assigned Retirement Specialist, annually. During these meetings Mx. Sarmir will be avaIlable to provide aone-on-one consultation tailored to the participant. All of our Retirement Specialists axe equipped with laptop computers, wireless Internet and printers to assist in their educational duties. Laptop software capabilities provide immediate answers, assistance, transaction capability and account documentation to the Town's employees. From our national headquarters to our local Retirement Specialists, from our home office mainframe to our Retirement Specialists' laptop computers -customers axe able to access on-the-spot assistance. Education Workshons In addition to the individual consultations Dave Sarmir will continue to provide educational workshops on-site for the Town. In addition, for those employees who would like to receive the same information online, we make a wide variety of interactive workshops available on the Web. Nationwide offers a global outreach education program geared to encompass each and every customer participating in our plans. Hy segmenting the workforce into three phases of retirement savings we are able to maximize the effectiveness of education materials. We call this initiative `Join 7t ; Learn /1; Live It!" and its main goals axe to: • Keinforee 457 Deferred Compensation Plan as a participant's primary retirement investment vehicle (this is the Join /P aspect of the program). ^ Provide education on account management throughout a participant's contributing years (this is the aspect of the program). • ^ Show participants the rewards of fulfilling their retirement goals (this is the Live IP. aspect of the program). Nationwide" Retirement Solutions 12 On YOw Stle' Town Of Southold, NY 457 Deferred Compensation -Request for Proposal The following is a sample of subjects in our workshop sessions: /oin h!Workshops Invest in Youx Future with Deferred Compensation* A Deferred Compensation I?nrollxnent Woxkshop* • Enroll and Im~est • Digging Up Dollars: How to Reduce Debt Learn /r/Workshops • Axe You Saving Hnough? How to Close Youx Retirement Gap* • How to Use Asset Allocation* ^ How to Manage Your Investment Risk* Investment Options Basics* • Morningstar: Get a Clear Vision fox Youx Retirement Future Digging up Dollars: How to Create a Spending Plan* • Advanced Asset Allocation Women and Retirement • Live It! Workshops Approaching Retirement: How to Make an Informed Distribution Decision, Part A & B* • Countdown to Retirement • Three Steps to Plan Your Retirement Income * These workshops are available in interactive eWorkshop format on our Web site. The eWorkshops include the same content as the onsite workshops performed by the Retirement Specialist. The eWarkshops provide participants with a virtual instructor who will lead them through a series of exercises, including interactive questions and answers, designed to help them learn about investing in their future. While participating in the self-paced, interactive eWorkshop the participants create an Action Plan. "I'he Action Plan allows the participants to relate the material discussed in the eWorkshop to their own personal financial situation and it gives them a better understanding of the steps they will need to take to help secure their retirement. Not only is this curriculum provided to Youx plan participants, but every new Nationwide Retirement Solutions associate is required to attend the entire series of workshops and become certified in the `;/oin Id, Learn lrr, Live h!" initiative. This fosters a consistency in the messages that participants receive, regardless of the medium. • Youx Retirement Specialist, Dave Sarmix, will work with the Town to determine mutually agreed upon dates to encourage maximum participation. During regular on-site visits, Mx. Sarmir will Nationwide" Retirement Solutions 13 On YWfSide' Town Of Southold, NY 457 Deferred Compensation -Request for Proposal • conduct educational workshops and will be available fox one-on-one consultation sessions with participants. Town of Southold Participant Results As of December 31, 2007 Dave Sarmir's commitment to service and education produced a very positive participant response. In the last year Mr. Sarmix: Provided over 50 consultations for participants Held 4 on-site visits in the Town, visiting 3 different locations on each visit Plan assets increased from $962,300 on 12/31 /OG to $1.27 million on 12/31 /07 These results have been obtained through our local service and targeted education efforts. In addition, these results reflect the commitment to delivering the `On Your Side'pxomise. Direct Access Retirement Specialists 11n extension of the services offered through your local Retirement Specialist Dave Sarmir, our Direct Access department is available via toll-free telephone lines to help participants address retirement questions and concerns. Direct Access Retirement Specialists and Personal Retirement Consultants working with your participants arc fully licensed with the appropriate FINRA, formerly the NASD, licenses as well as being non-resident Life and Health licensed in your state. Unlike any service offered in the industry, our Direct Access department is able to amplify the services received on-site, by providing retirement expertise over toll-free telephone lines at times convenient to your employees. Within this department, our associates are regionalized into teams allowing our representatives the oppormnin~ to focus on and become intimately familiar with specific clients and plans. Within the teams, there are functional groups focused on various aspects of participation - txansfers in, general retirement plan services, asset retention, and fmancial analysis. The Direct Access Retirement Specialists utilize the same software, and can provide the same services via toll-free telephone lines as Mr. Saxmir. Also, these individuals carry the same licensing requirements, FINItA Series 6, Series 63, Series 65, and State Life and Health. Personal Retirement Consultants Personal Retirement Consultants offer a new service through our Direct Access department focusing on relationships with key participants. Indi~riduals on this team axe required to have the FINRA Series 65 ox G6 licenses (in addition to the FINRr1 Series 6 or 7 and Series 63) and axe strongly encouraged to pursue the Certified Financial Planner or other professional designations. Similar to the Retirement Specialists, this team is organized by region with multiple Personal Retirement Consultants designated to each. We place tremendous focus on the development of lasting relationships throughout a participant's lifetime. The Personal Retirement Consultant team is tasked with continuing the Nationwide Retirement Solutions 14 o~ roWs~ Town Of Southold, NY 457 Deferred Compensation -Request For Proposal • relationships created by the local and home office Retirement Specialists in order to provide continuity of education and service even after the participant retires. "These associates will help participants understand the distinct benefits of remaining in the 457 plan and provide the education that allows the participant to evaluate the compering option - be it an IRA, money market account, or other investment vehicle. In addition to an unparalleled educational curriculum, Personal Retirement Consultants can provide access to additional financial analysis tools at no additional cost. By completing a simple questionnaire, a Personal Retirement Consultant can provide a retirement analysis that illustrates distribution strategics, inflation-adjusted accumulation projections, potential funding gaps, and cash flow analysis. On-going, the participant can consult with the Personal Retirement Consultant to receive annual updates to the analysis based on any life changes that may have occurred. Please refer to the Retirement Planning Analysis section of our proposal to see the added value delivered by this group. Additional Bene£ts In addition to the personal education and services, Nationwide also provides comprehensive education materials and tools to further aid participants with retirement planning. • Written Materials • Enrollment Kits -self-guided, comprehensive kit that can be easily completed by the employee to enroll in the plan. Assistance is available through our llixcct Access department via toll-free telephone lines. ^ Payroll scoffers -marketing tools to inform participants Newsletters -that offer current industry information Informational brochures Strategically placed posters Plan Wcb Site In addition to the interactive Web-based workshops, Nationwide offers many educational programs, tools and information on our Web site. "These products fall under the categories of investment basics, investment concepts and investing for retirement Market news and fund performances axe also available to participants. Our Web site offers the following tools to help participants with their specific investment decisions as well: Future Value Calculator -Shows how your retirement im estments could grow and demonstrates the importance of investing tax-deferred dollars. ^ Retirement Savings Calculator -Helps you determine how much you could be investing now to meet your retirement income goals. • • Paycheck Impact Calculator - Helps y ou see how reducing your paycheck will increase your contribution to your employer-sponsored plan. Nationwide Retirement Solutions 15 a, ro~,.s~ Town Of Southold, NY 457 Deferred Compensation -Request for Proposal • Roth IRA vs. Employer Savings Calculator -This tool shows how you may want to lower your taxable income now ox take advantage of Roth tax-free payments later. • College Savings Calculator - L se this tool to obtain an idea of how much income to set aside fox future tuition costs. Sec tuition costs at many U.S. universities and get an idea of what tuition will be when your children are ready to attend college. • Morningstar Guidance Onlines"' - i1 personalized, online investment education and guidance tool, Morningstar', leads participants through six easy steps (usually in less than 20 minutes). Based on the participant's time horizon, risk tolerance and financial goals, Morningstar, provides an analysis of the participant's overall financial picture and recommends asset allocation models. 2. Briefly describe the types of marketing/promotional materials to be utilized. Will you work to develop a marketing program unique to our needs? Our goal is to present plan and investment information as clearly as possible in an unbiased fashion to the Town's employees. To that end, we produce a broad spectrum of targeted communication materials to support our education program; all of which are based on the needs of plans similar to the Town. Nationwide goes to great lengths to ensure all communication materials fox the Town axe created solely fox the public sector 457(6) defexxed compensation market. Below axe examples of materials we will continue to offer fox use in marketing and promoting the plan and its benefits to your employees. • 1~:nxollment workbooks ^ Orientation kits ^ Payroll stuffers ^ Morningstar kits ^ Investment performance reports Please refer to the Participant Communications section of this proposal for examples of the aforementioned materials. 3. Do you provide communications to participants on a regular basis, if so, please describe? Yes. Nationwide will continue to pxoaide a complete communication program fox the Town and its employees focused on educating the participants and the benefits of their defexxed compensation plan. We have a variety of ways to keep the plan participant informed. Special mailings arc distributed when changes in the program axe significant and warrant such attention. We currently generate the following participant communications fox the Town: ^ Payroll Stuffers - communicate a wide variety of topics on an as needed basis. ^ Welcome Letter -acknowledges the new participant's account status and provides important account start-up information. ^ Participant Statements -The "Enhanced Statement" is published quarterly and Nationwide has met the internal timeliness Service Level ilgxeement (SLA) of five days, and the 30 day contractual agreement, fox this client over the past four quarters. Nationwide' Retirement Solutions 1G a, rW~s~ Town Of Southold, NY 457 Deferred Compensation -Request for Proposal • Participant Confirmations mailed to participants each time the}' initiate a transfer; these computer-generated reports confirm that the requested transaction has been completed. 4. Will these services and materials be prepared and distributed at your cost? Yes. Nationwide provides all of the above services at no additional cost. 5. What education materials will be provided to the plan to maintain compliance? A significant advantage of retaining Nationwide Retirement Solutions as your plan provider is the comprehensive nature of the deferred compensation program. You benefit from the resources dedicated to maintaining and updating the plans of thousands of plan sponsors across the United States. Nationwide educates not only plan participants but plan sponsors as well. The majority of our education efforts fox plan sponsors are focused around legislation that wID affect the public sector defined contribution market. Legislative changes and proposed legislation that is relevant to the defined contribution business, the 457(6) business in particular axe reported through written communications such as: • ^ Legislative Updates-emails to plan sponsors notifying them of legislative changes. • Employer Web Site message-allow fox our team to post important messages directly on the Plan Sponsor home page • Plan Sponsor Voice this newsletter discusses proposed and new 457(6) legislation, detaIls upcoming plan level enhancements and highlights service in place at Nationwide to aid the plan sponsor. ^ Fiduciary Handbook-developed by Natiomvide Retirement Solutions, this guide is designed to assist the Town and its staff who serves as fiduciary in the retirement plan arena and addresses subjects ranging from plan types to investment responsibilities and includes a comprehensive FAQ section • 457 Guidebook-tool to help plan sponsors understand 457 plans and how the}' work. Staffed by an expert team of specialists, attorneys, paralegals, and technical writers, our in-house Compliance General Counsel and Legislative Affairs departments provide the following legal support to our clients: • IIpdates on legislative changes that impact the Plan • Assistance with standard product compliance questions • Document drafting services and consulting services to ensure the Plan remain in compliance with Federal tas laws Our communication package is designed to keep employers informed and updated on both plan level and global developments. Additionally, we conduct special mailings when changes in the • program are significant and warrant such attention. Nationwide Retirement Solutions 17 On Yaur Side' Town Of Southold, NY 457 Deferred Compensation -Request for Proposal We provide these comprehensive compliance services at no additional charge to the Town ox its participants. Please refer to the Plan Sponsor Communications section of our proposal for some examples of the above-mentioned communications. 6. Briefly describe how you propose to conduct group meetings so that all interested employees have an opportunity to attend a meeting at a convenient time and location. Dave Sarmir will continue to visit the'1'own on mutually agreed upon dates and locations in order to conduct workshops and hold one-on-one consultations. Hnrollrnent workshops will be aligned with the Join It!phase of the education curriculum. Its main goal is to reinforce the Town's 457 Deferred Compensation Plan as the participant's primary retirement investment vehicle. "1'he following is a sampling of workshop subjects in the Jom Itrphase: ^ Invest in your future with Deferred Compensation • Enrolling in Deferred Compensation • How to reduce debt and manage your cash How to budget to finance retirement In addition, we utilize every possible means of communicating our message to employees, • including, on-site group workshops and one-on-one consultations, statements, newsletters, mailings, flyers and posters. We employ our own marketing and education experts who create materials in-house. In addition, fox smaller-scale education and communication pieces, our Retirement Specialists have access to the Nadomvide PCprintDirect database. PCprintDixect is a Web-based tool that was created to give our Retirement Specialists the ability to print or email customized Eliexs. "the database prompts the associate fox specific information and creates a customized communication piece based on the customer's needs. Upon completion, the piece can be printed ox even emailed to employers fox internal distribution to employees. WhIle we create a number of our marketing and communication pieces within our corporate office education and marketing department, PCprintllirect provides Ketirement Specialists with the flexibility to create on-demand fliers that axe customized for their clients. In addition to on-site enrollment, Nationwide also offers bvo additional methods through which employees can enroll in the plan: via the Internet, and via our Direct Access Representatives (over the phone). Internet eWoxkshops provide participants with a ~nrtual instructor who will lead them through a series of exercises, including interactive questions and answers, designed to help them learn about investing in their future and related topics. While participating in the self-paced, interactive eWorkshop the participants create an Action Plan. The Action Plan allows the participants to • relate the material discussed in the eWorkshop to their own personal finances and gives them a better understanding of the steps to take to secure their retirement The following axe examples Nationwide Retirement Solutions 18 On YW(Side' Town Of Southold, NY 457 Deferred Compensation -Request for Proposal • of eWorkshops available on-line. /nin it!Woxkshops • Digging Up Dollars: How to Reduce llebt l.r;rm ir!Workshops • Are You Saving Enough? How to (dose Your Retirement Gap ^ How to Use Asset Allocation • How to Manage Your Investment Risk • Investment Options Basics • Digging up Dollars: How to Create a Spending Plan Live it! Workshops • Approaching Retirement: How to Make an Informed Distribution Decision -Parts :1 and B Direct Access Participants can enroll at by calling a Direct Access Retirement Specialist at 1-877-677-3678. 7. Please describe, in detail, your one-on-one counseling sessions. Your response should emphasize how you plan to satisfy "the individual one-on-one demand avai/abilit~' of • your enrollment specialist especially at times and locations convenient to employees. David Sarmir is available, as needed, to conduct one-on-counseling sessions with individual participants. He will work with the Town to set up mutually agreed upon times and dates in order to maximize participant involvement. However, should the need arise between these scheduled visits, Mr. Sarmir will work to schedule times to meet with participants. 'these consultations allow Mx. Sarmir to aid participants in determining their goals, investment horizon and risk tolerance for investing. Prom that discussion, he will provide educational assistance in the development of an individual retirement plan including asset allocation and ongoing strategies necessary to meet each participant's retirement goals. Direct Access Retirement Specialists arc also available via toll-free phone lines to meet individual counseling needs of participants. "Phis value-added service is available between 8:30 a.m. and 5 p.m. ET, Monday through Friday. We have licensed and trained individuals available to receive calls from your participants during these hours of operation. This unique benefit allows your participants the convenience of having individual one-on-one consultations conducted on- demand, without hawing to worry about scheduling conflicts. Participants may- consult with a Direct Access Retirement Specialist whether they need help with enrollment, educational assistance with their retirement planning, ox simple investrnent education. It also permits those participants who prefer to perform their retirement planning over the phone and in the convenience of their own home, a means to do so. Nationwide Retirement Solutions 19 On YOw.Side' Town Of Southold, NY 457 Deferred Compensation -Request for Proposal • 8. What educational services are provided for retirees? Retirees are provided access to the same educational sen~ices as active employees, including assistance from on-site and home office Retirement Specialists, Web services and print material. Nationwide Retirement Solutions recognizes the importance of providing these comprehensive services for retirees and, with that understanding has also created focused education and several interactive solutions fox this segment of your workforce. 'I'bis phase of a participant's life is what we refer to as Lrve It! the third stage in a participant's life cycle. Nationwide Retirement Solutions fully understands the importance of making sound investment and retirement benefit decisions during the Live Itrstage of our education program. After all, we have helped employees prepare for the moment, so making a smooth and economically wise transition into retirement is of utmost importance. Live IN. Workshops Approaching Retirement. How to Make Your Assets Last* Countdown to Retirement • Three Steps to Plan Youx Retirement Income *This workshop is now available in interactive eWorkshop format on our Web site. • "I'he Live It!stage curriculum emphasizes educating participants about distribution rules and payment methods, and the importance of making proper retirement and investment decisions. C;reat care is given to pxoaide detail on how each payment method works and the potential benefits and drawbacks to the participant-including tax ramifications. In our continued effort to assist all participants who axe nearing ox axe in retirement, Nationwide created two new workshops that are part of the Live Idcuxriculum: • Countdown to Retirement • "1'hxee Steps to Plan Your Retirement Income Countdown to Retirement focuses on the four steps to maximize your final (more than one but less than 10) y ears of savings. The workshop is designed to accelerate retirement planning during the last working }-ears by encouraging nonparticipating employees to enroll, distinguishing the importance of maximizing contributions and using the catch-up provision available to deferred compensation plan participants. Three Steps to Plan Your Retirement Income targets participants who have one year or less until retirement. The workshop is designed to answer major questions that soon-to-be retirees may have concerning distribution choices, the importance of making their retirement last, and an explanation of required minimum distribution. • Nationwide Retirement Solutions 20 On row Side' Town Of Southold, NY 457 Deferred Compensation -Request for Proposal • L'ach of the new workshops places great emphasis on the benefits of staying with the plan, including the free, personal assistance we can provide through our team of Retirement Specialists as well as continued access to the retirement planning tools available on the Web site. We, with input from our clients, have developed the proper tools, and programs to expertly deliver educational assistance in making these complex retirement decisions. As discussed earlier Nationwide Retirement Solutions' Personal Retirement Consultants axe also available. These Consultants are focused on building lasting relationships with key participants. Individuals on this team are required to have the FINRA Registered Investment 1ldvisor (Series 65)ox GG licenses (in addition to the PINRA Series 6 or 7 and Series G3) and arc strongly encouraged to pursue the Certified Financial Planner or other professional designations. The Personal Retirement Consultant team is tasked with continuing the relationships created by the local and home office Retirement Specialists in order to provide continuity of education and service even after the participant retires. Our experience has taught us that as participants retire, interaction with the local Retirement Speciahst greatly decreases and our Personal Retirement Consultant team is in place to maintain the relationship and the lines of communication between the participant and Nationwide Retirement Solutions. 'T'hese associates will help participants understand the distinct benefits of remaining in the 457 plan and position your plan against the competing option - be it an IRA, money market account, or other investment vehicle. The trust our Personal Retirement Consultants are able [o develop with the individuals throughout their • active participation allows them, as retirees, to know their best interests axe at the heart of everything we do. Nationwide Retirement Solutions provides access to fret financial planning assistance through this team of Personal Retirement Consultants. By completing a simple questionnaire, with which we can help, a Personal Retirement Consultant can provide a retirement planning analysis that suggests proper distribution strategies, inflation-adjusted accumulation projections, potential funding gaps, and cash flow analysis. On-going, the participant can consult with the Personal Retirement Consultant to receive annual updates to the analysis based on any Gfe changes that may have occurred. Please refer to the Retirement Planning Analysis section of our proposal to see a sample participant retirement analysis. Distribution Kit As part of our education initiative to this segment of your participant population, we also provide a comprehensive packet of written information to help retirees understand their retirement options and make a decision as to which distribution type is most appropriate to meet their retirement income needs. Our distribution kit includes the IRC Special Tas Notice Regarding Plan Payments, federal tax withholding instruction form, an automatic deposit form should the participant wish to have the funds directly deposited in a bank account, and a brief • description of each distribution type accompanies the payout election form. Participants interested in starting a distribution can request a Payout Reyuest form via the toll-free customer sen-ice line ox the Web site. Nationwide" Retirement Solutions 21 o,. rowside- Town Of Southold, NY 457 Deferred Compensation -Request for Proposal • 9. Describe your approach to asset allocation and diversification. In determining an appropriate model portfolio for asset allocation and diversification, we have designed the following to assist the participant with a varict)~ of educational options: • 1~:ducation Workshops and individual consultations delivered by the'I'own's on-site Retirement Specialist, David Sarmir, are specifically designed to address proper asset allocation. ^ Asset allocation worksheets as part of the education workbooks. ^ Web-based Morningstae Online Guidance"' tool, which includes asset allocation recommendations. ^ Oux Investor Destination Funds, which are investment offerings that adhere to a specific asset allocation model (predetermined percentages in stocks, bonds, and cash), with five models ranging from aggressive to conservative. 10. How do you follow-up with or contact employees that did not have an opportunity to attend a group session or with an employee subsequently hired after that meeting date? Your comments on the one-on-one availability of your enrollment specialists for this function are important. There are several ways fox employees who were unable to attend the group session or for newly hired employees to Learn about the plan. Those employees who are not available to attend meeting can set up an appointment to meet with Mr. Sarmir or can contact their Direct Access representative via toll frce phone lines. Natiomvide will work with the Town's human resource department to develop a list of new employees and those who were unable to attend the workshop in order to follow up directly with those individuals ensuring then receive the retirement education they need. Licensed llirect Access retirement specialists are available in our home office Monday through 1^'riday from 8:30 a.m. to 5:00 p.m. 1~~.1'. fox information or to aid in the enrollment process as well. Just as your local retirement specialist could, the Direct Access representative can, in a one-on-one environment, help the employee enroll in the plan and provide educational assistance in selecting an appropriate asset allocation and investment options. "I'he Web site also provides a wide array of educational information fox the participant's use. Participants can develop asset allocation models based on their risk tolerance levels and time frames, project accumulation levels, "what if' scenarios, eWorkshops and evaluate historical performance fox specific investment options. 11. Briefly describe your continuing education program, if any. Nationwide Retirement Solutions will continue to provide a complete communication program for the Town and its employees focused on educating the participants and the benefits of their • deferred compensation plan. We have a variety of ways to keep the plan participant informed. Nationwide' Retirement Solutions 22 On Ibur side- Town Of Southold, NY 457 Deferred Compensation -Request for Proposal • Special mailings arc distributed when changes in the program are significant and warrant such attention. We currently generate the following participant communications for the Town: • Payroll staffers - communicate a wide variety of topics on an as needed basis. • Welcome letter -acknowledges the new participant's account status and provides important account start-up information. ^ Participant statements -1'he "Enhanced Statement " is published quarterly and typically issued within five business daps following the end of the reporting period. • Participant confirmations - maIled to participants each time they initia[e a transfer; these computer-generated reports confirm that the requested transaction has been completed. 12. Do you attest that these Enrollment Services are provided only by a properly licensed representative: licensed to meet both Federal and New York State requirements? Yes. Our retirement specialists axe licensed and registered with FINRA. 'they are required to complete all necessan~ licensing fox their texxitor}~ as well as FINRA Series 6, Series 63, and Life and Health. Designated managers must also have PINR.1 Series 26 Registered Principal designations for supervisory responsibilities. llepending on other state requirements and the degree of financial background, our retirement specialists may also maintain h7NRA Series 7 and/ox Registered Investment 1ldvisox (Series 65). • Administrative Services Services ofl`ered to the Plan Sponsor 1. Do you offer a dedicated toll-free Plan Sponsor line? Yes. The toll-free number is 1-800-769-4457. 2. How does your organization provide assistance with revisions to the New York State Model Plan Document? Natiomvide Retirement Solutions commits to administering the program in accordance with current federal law, the Model Plan, and your Plan Document. We have the corporate resources and backing of our parent company, Nationwide, including the office of General Counsel This dedicated staff of attorne}'s will review changes to federal law, will assist with any necessary review and/ox revision of the Plan Document, and can provide legal, compliance, legrislative, and/or tas consultation fox any issues that may arise. 3. Does your company provide loans to participants? We can provide loans to participants if the "Town elects. We can provide loan models, amoxdzation schedules, and all required loan paperwork. Loan repayments arc done via ACH directly from the participant's bank account, or through payroll deduction. • Nationwide Retirement Solutions 23 o~ roo, xae Town Of Southold, NY 457 Deferred Compensation -Request for Proposal • Each participant that elects to receive a loan is subject to a loan application fee of 550.00, which is deducted from the participant's account. Additionally, the participant will be charged an annual fee of $50.00 until the loan is paid in full. Before the loan is issued, the participant must sign a loan agreement provided by Natiomwide Retirement Solutions. "1'he participant will be responsible for repayment of the loan as agreed upon by the loan amortization schedule. 1'he maximum loan amount is the lesser of: • 50% of the participant's vested account balance (not including life insurance or deemed IRA account) less any outstanding balances under the plan, or • S50,000 Icss the highest outstanding loan balance during the preceding one-year period. • The minimum loan amount is $1,000.00. We currently administer loan provisions for over 200 Section-457 plan sponsors and close to 11,000 participants are currently utilizing this provision. 'Though regulations for loans have only recently been available to 457 plan sponsors, we also have provided loan sen~ices to our 401(a) clients for several years and have the necessary experience to administer this provision effectively. Nationwide Retirement Solutions will assist }'ou with the administration of the loans program should the Town desire to make loans available to participants. In addition, we will continually monitor and update the loans program as needed to reflect new federal participant loan requirements. • 4. Will your company withhold, remit and report income taxes deducted from distributions? Does this service include the production and distribution all income tax reports to all the necessary parties as required by federal and state laws? Yes. Nationwide Retirement Solutions will withhold and remit taxes on behalf of the Town to the proper federal and state agencies pursuant to the Internal Revenue Scrvicc requirements. Our system automatically calculates all withholdings on distributions, and generates required federal and state tax reporting. Copies of Form 1099 are automatically sent to the IRS and participants no later than~anuary 31 of the year following the distribution. Each quarter payou[ records arc audited for accuracy and our administration and accounting departments conduct an extensive audit before any tas form (such as a 1099R) is generated. Administration edits fox the following items: • That the amount of the distributions processed in the participant's records equals the total of the checks issued • The most current federal and state tax tables arc included in the system • 1'he benefit event codes axe updating the proper distribution type code so the taxes axe reported on the correct tax form • The gross amount minus any taxes equals the net amount of the payments. • The tax checklist must be attached to the reports showing all editing has been completed. Nationwide Retirement Solutions 24 OnYOwside- Town Of Southold, NY 457 Deferred Compensation -Request for Proposal • 5. Specify all reports which will be issued to us, our participants and governmental agencies. Oux administrative system produces a complete package of reports, which provide comprehensive accounting of all financial transactions for participants under the Plan. The following reports will be provided on either a quarterly or annual basis: Participant Statement -This report summarizes participant financial activities fox the current period and from inception-to-date. Participants axe provided this comprehensive quarterly report of their account within 30 days of the end of the report period. Financial Activity Confirmation Statement -'t'his report shows deferrals received by pay period and effective date, purchase adjustments and withdrawals. It also details administrative charges assessed against each fund by effective date; exchanges by dollar amount and a summary page. This report also contains unit values by fund, number of units and account balances fox the previous and current statement periods. ^ Surrender Audit Report - "Phis report shows by social security number, surrender amounts and dates of surrender. Thcsc types of withdrawals axe indicated by a two-digi[ code, which represents activities such as annuity payments, employment termination and • financial hardships. • Employer Statement of Account - "Phis report is produced in conjunction with participant statements and provides a summary of all participant activity that transpired during the reporting period. ^ Report 941-E -Nationwide Retirement Solutions releases this report to the Internal Revenue Service on a quarterly basis to report tax withholding from participant disbursements. Governmental Accounting Standards Board (GASB) #32 -This report shows the assets of the plan, along with a corresponding liability. Tax Reporting - 1'ax forms are prepared fox all participants who received distributions from Nationwide Life Insurance Company or Metropolitan Life Insurance Company under the Plan during the calendar year. 1099R forms axe issued within 31 days of the close of the calendar in year that the distribution was made. Information reported on 1099R forms is taxable subject ro applicable federal, state ox local laws. Distributions made to beneficiaries axe also reported on Form 1099R. "Phe following reports axe available on the Web site: • fund Balance & Participation by Fund Summaries ~~ge Demographic Nationwide Retirement Solutions 25 a. ro~,s~ • • • Town Of Southold, NY 457 Deferred Compensation -Request for Proposal Contribution Rate Report automated Telephone Contribution Change Report Transactions Web .ycticity We contractually commit to prepare and distribute quarterly employee account statements within 30 business days of the end of each quarter. For the last four quarters 100% of all statements were issued within the plan-specific contracted timeframes. Nor the past four reporting periods 100'% of statements were mailed to participants in the Town of Southold within five business days of the end of each quarter. Sample employer reports arc included in the Plan Sponsor Communications section. Nationwide' Retirement Solutions 26 a. ro~.s:ee Town Of Southold, NY 457 Deferred Compensation -Request for Proposal • Administrative Services Services offered to Participants 1. Describe your voice response telephone system. Identify all available services including customer service options as well as "Voice Response Systems" or automated options. Include security features and voice options, if applicable. Ycs. Nationwide offers atoll-free voice response system, VRU. "the VRU is avaIlable 24 hours a dav, 365 days a year. The 800 number to reach the VRG is 1-800-7G9-4457. The Voice Response System provides the following services: Account balances ^ Check fox available investment options • Check account balance of a specific option ^ Review current contribution allocation • Inquire about unit values • Rcvicw allocations • Nxchange funds Change future allocations Change PINS ^ Review fixed interest rates Review fund pexfarmance • Speak with a Customer Service Representative Once connected to the Voice Response System employee will hear a greeting welcoming them to Nationwide Retirement Solutions. The system will then offer a menu of options. Immediately following the greeting the employee will be prompted to enter their social secuxiry number in order to expedite their service. Additionally they may opt out of the VRL' at anv time by hitting * zero. At which point they will be immediately directed to a licensed customer service representative. The caller must initially provide the plan participant's social security number and then an individual PIN number established by the plan participant. Not even the customer service representative knows the participants PIN. Should the participant forget their PIN, the customer service representative can clear the existing one and direct the participant back to the VRl` to establish their ^cw PiN. 2. Can your customer service representatives assist non-English speaking participants? Yes. Nationwide subscribes to Language Line Services, a company that provides us with access to translators fox a wide variety of languages. Please refer to the Language Line Service section of this proposal for a complete list of languages offered through Language Line Sen-ices. J Nationwide Retirement Solutions 27 On tour SiCe' Town Of Southold, NY 457 Deferred Compensation -Request for Proposal • 3. Describe your Internet strategy. What features are currently available on your website? What services are you developing for the near future? What security safeguards are used? Nationwide Retirement Solutions' experience and expertise in technology is unsurpassed in the industry particularly in detertruning suitabilit}', offering flexibility and possessing the capability to build and education-based Web site, Gaged on your need. Experience has taught us it is vital to study the unique needs of a plan and the plan's goals and objectives to determine the most appropriate and effective on-line tools to offer participants. Nationwide Retirement Solutions' technology philosophy is to offer user friendly, comprehensive retirement planning education and tools which will provide participants with a constant resource without the confusion of complex procedures or unnecessary services. After an initial analysis of your stated objectives and current Web based technology, we recommend the following on-line tools and service be made available to Town participants to enhance retirement education and retirement planning: Morningstar° Guidance Onlines"`: All participants cuxrentl}' have free access to the power of iVlorningstar° through Morningstar Guidance Online`"'. This personalized online, investment education and guidance tool leads participants through six easy steps (in approximately 20 minutes) to provide an analysis of the participant's overall financial picture. Morningstar Guidance Online"' combines this information along with the participant's time horizon, risk tolerance and financial goals and provides an asset allocation investment model using the familiar Morningstar investment style categories. • RetirAbility Checks"': 'T'his innovative retirement preparedness resource allows individuals to electronically measure their financial progress toward retirement readiness. Phis interactive, virtual, financial planning tool is the only program in the industry based nn the National Retirement Risk Index (NRRI), which tells us 43 percent of all U.S. households are not on track for retirement - a figure which increases to almost two-thirds if the habits of today's average consumers continue. RetirAbility Checks"' will help participants find out how ready they are fox retirement and how to increase retirement readiness through: ^ Providing a personal retirement readiness score after answering a quick on-line questionnaire (approximately eight minutes with the assistance of the virtual consultant). Comparing the retirement readiness scare to other American in similar financial situations. Providing useful information on how to improve the retirement readiness score. eWorkshops: "These eWorkshops provide participants with a virtual instructor who will lead them through a series of exercises, including interactive questions and answers, designed to help them learn about investing in their future and related topics. While participating in the self- paced, interactive eWorkshop the participants create an Action Plan. "phe Action Plan allow the participants to relate the material discussed in the eWorkshop to their own personal finances and gives them a better understanding of the steps to take to secure their retirement. The following axe example of the eWorkshops available on-line. • ® Nationwide 28 Retirement Solutions o~mws~ Town Of Southold, NY 457 Deferred Compensation -Request for Proposal • .Join ;t! Workshops • Digging up Dollars: How to Kcduce Ucbt Workshops ^ Axe You Saving Enough? How to Close Your Retirement Uap How to Use Asset Allocation How to Manage Youx Investment Risk ^ Investment Options liasics • Digging up Dollars: How to Create a Spending Plan Live n! Workshops ^ Approaching Retirement How to Blake an Informed Distribution llecision -Parts A and H l~ddidonal Website service capabilities include: Transactional 1 ~ unctionalih° • On-line enrollment • Deferral amount changes ^ Fund exchange and deferral allocation changes Secure access to participant account balance information Account maintenance, such as an address change View statements Educational Content ^ Future Value Calculator -Shows how your retirement investments could grow and demonstrates the importance of investing tax-deferred dollars. Retirement Savings Calculator -Helps you determine how much you should be investing now to meet your retirement income goals. Paycheck Impact Calculator -Helps you see how reducing your paycheck will increase your contribution to your employer-sponsored plan. Roth IRA vs. Employer Savings Plan Calculator -'this tool shows how you may want to lower your taxable income now or take advantage of Roth tas-free payments latex. College Savings Calculator -Use this tool to obtain an idea of how much income to set aside for future tuition costs. See tuition cost at many U.S. universities and get an idea of what tuition will be when your children are ready to attend college. Nationwide Retirement Solutions has also created a general Spanish Education Web site. 'Phis is the first Spanish Web site in the deferred compensation market, and by listening to our clients' needs, we were able to create an implement this unique site. It is available to all participants at unvw.nxsespanol.com and provides the same education content as our English site does. • Nationwide" Retirement Solutions 29 On Yarr Side' Town Of Southold, NY 457 Deferred Compensation -Request for Proposal • Plan Sponsor Ser~cices The Town has access to plan and participant information, on-line plan sponsor specific administrative material and legislative information via our Web site. "1'he plan sponsor staff also has access to investment performance information, on-line report such as participant account balances b~~ fund, and plan information via our Web site, including: ^ Employer Statement of account ^ Month-end Financial Actiaitj Confirmation Report ^ Investment performance information ^ On-line xepoxts ^ Plan-specific information Market news Monthly legislative and regulatory reports and alerts ^ Research xepoxts an studies from the Natiomvide Retirement Education Institute ^ Plan provisions Plan sponsors have immediate accessibility to real-time plan information. The Town's staff has access to a complete menu of Web-based reports. These reports include: ^ Summary by Investment -'t'his report provides plan assets in both dollars and shares. It is always updated as of the most recent Market closing date. ^ Web Activity -This report provides you with information on how often your participants arc using the Web site. Not onl}' do you learn how often, but also fox what purposes your participants use the site. Report can be based on current month's activity or on activity during any of the previous 15 months. • Automated Telephone Transactions Report -The Automated Telephone 'Transactions report provides }you with information on the number and types of transactions completed through the automated Voice Response System. The report includes number of calls completed in Spanish and English, account inquiries, fund inquiries, exchanges, allocation changes, and transfers to the Customer Service Center. Plan Demographic Report -This report breaks down participants by age group based on account balances and contribution amount. • Fund Balance and Participation by Age Report - Is a repart that provides fund balances by dollars and percents, as well as the number and percents of participants in the fund by defined age groups within the plan. 4. Please describe the settlement options available to each participant at retirement, voluntary termination and death. Please state your compliance to reflect the Board's continued prohibition on annuity distribution options (Section 9001.4 of the Regulations). The New York State Deferred Compensation Board has determined to eliminate the prior prohibition of distribution options "over a period measured by one or more namxal lives." Please consult the March 2003 Rules and Regulations. Nationwide" Retirement Solutions 30 a.rW.sde Town Of Southold, NY 457 Deferred Compensation -Request for Proposal Nationwide Retirement Solutions will inform participants of their available transfer options, provide benefit settlement options, and provide amounts due participants or beneficiaries who leave the plan by reason of retirement, termination of employment or death. 1'he following disbursement options arc available to participants • Receive a lump sum payment • Elect a sS~stematic withdrawal plan • Request periodic payments manually • Defer withdrawals until a later date and keep account invested in the plan Lump sum payments -distributions are processed with in three business days of receipt of a payout request found to be in good order. Systematic withdrawal - the participant's account remains active and continues to realize fund investment performance throughout the payout period. Nationwide Retitement Solutions offers two types of systematic withdrawal: • Installment payments of a designated amount -equal monthly installments are made until the balance of the account is exhausted. • Installment payment of a designated period equal amounts axe paid over the number of months chosen by the participant. Periodic Payments -participants simply need to complete a distribution form anytime they desire a payment. Requests can be made at any time and for any amount and are processed within three business days of receipt of a distribution form found to be in good order. Defer Until a Later Date - If a participant wishes, they may defer withdrawals until a latex date and keep their account invested in the plan. However, participants must begin taking Internal Revenue Sers~ice mandated minimum required distributions at age 70 'h. 5. In the event your are asked to administer our plan along side another provider(s), please describe your required process for assisting with participant requests to transfer plan assets from your program to one of the other carriers. Describe in detail the forms, signatures, and overall process that you require. Upon notification, Nationwide will provide the participant with the appropriate form to transfer assets to the other carrier. Upon receipt of the form in good order we will process the transfer. ® Nationwide Retirement Solutions 31 a. ro~~ v~ Town Of Southold, NY 457 Deferred Compensation -Request for Proposal • Record Keeping S, s 1. Specify the basic recordkeeping system to be provided for our plan, with particular reference to the ability to receive, disburse, and audit deductions, and to ensure timeliness, accuracy and confidentiality of records and describe the software used. Nationwide Retirement Solutions' computer software system is an in-house system that provides a single record keeping function. We maintain individual participant records and consolidated plan records, including current transaction data and cumulative history for all deferrals, disbursements, and daily balances. Oux system maintains a computer-generated financial reporting system, which records and produces all management information regarding the general scope of Plan activities, including cash flow detail and aggregate investment detail. This information is maintained daily and is used to provide a quarterly and cumulative review of the plan. Proprietary Technology Our system offers employers and employees several unique benefits, including: • 'Timely money movement • Fast deposit and transaction-processing • Same-day transfers of investment funds within the variable annuity ^ Instant account balance access • Ready reconciliation We also provide dap-to-day account calculation, processing and documentation, and audit response tosegulatory and accounting agencies. Audits and Controls We use a systematic method of reviewing our internal accounting controls to ensure our assets are properly protected and accounting records contain reliable fmancial data. "Phis method, known as Complete Internal Accounting Controls Process (CIACP), was designed to safeguard assets and ensure the reliabilit}' of financial records. Timeliness Nationwide's flexible system prepares output reports used for daily balancing and financial updates and periodic reports such as participant statements, surrender audit, and financial activity confirmation statements. We have effective procedures in place to assure that reports go out on a timely basis. Accuracy Stringent quality control procedures throughout all phases of the processing cycle ensure accuracy and xegulaton~ compliance. As an example, our network-integrated workstations generate a series of validations during data input process, minimum and maximum deferral • monitoring at account set-up and during exchange and allocation percent validation. Periodically, we audit a sampling of financial transactions to ensure they comply with IRS, SEC and state Nationwide" Retirement Solutions 32 On YWfSide' Town Of Southold, NY 457 Deferred Compensation -Request for Proposal regulations. Controls axe integrated throughout the processing cycle to ensure we meet our contractual obhgations and ensure contributions axe invested correctly and timely. Confidentiality We have implemented strict controls to safeguard the security and confidentiality of participant information. Strict procedures are followed to ensure that all participating employee information is the sole property of the employer, that it will remain confidential and that it will not be used inappropriately. Over the last year, we have received various awards and recognitions fox its commitment to technology, including a top ten ranking for privacy. Online Data Oux personnel have limited access to the on-line database, with access to information granted o^ a need-to-know basis. Customer service representatives gain access to the system through passwords, which axe changed periodically to maintain a high level of security. Participants must enter their social security number and PIN to gain access to their accounts. Participants ma}' change their PINS as frequently as they deem necessary to maintain account security. Participant Files Nationwide utilizes imaging services fox all our retirement plan clients. This effort limits the Flow of hard copy forms and other physical communications to our satellite offices. Instead nearly all hard copy communications are received at a central Natiomvide location. Upon receipt, the document is scanned into our imaging database and routed to the appropriate • processing department. "1'he physical form is then sent to our off-site data storage facihty (described later in this communication) for permanent storage. 1'hexe axe multiple controls around the access to our imaging database: one fox our field partners and home office personnel, and another fox personnel necessary to perform processing in the workflow process. Authentication via username and unique password is required to access any non-public information at Nationwide. 2. Briefly describe data processing operations, including the media by which your company can receive payroll deduction information, and its security provisions. Include a statement about your disaster recover plan and it site location. Identify any subcontracting requirements for your primary administration responsibilities and comment on how this is possible in light of Section 9003.5(b) of the Regulations. Security Provisions Natiomvide firmly believes in the value of pre-planning fox business interruptions. In an effort to serve both our internal and external customers by providing on-going service operations, Nationwide has developed business continuity plans to address the possibility of a silmificant business disruption. Plans axe reviewed, updated and exercised on a regular basis. Should an event occur that hinders our ability to conduct normal business operations, Natiomvide has secured remote locations to resume critical business operations within a reasonable period of time. Should business functions be interrupted by the loss of a primary bustness facility, associates and/or "work" would be relocated to an alternate site. In the event of a systems facility loss, applications would be redirected to their primary recovery location, Nationwide" Retirement Solutions 33 On YOw SMe Town Of Southold, NY 457 Deferred Compensation -Request for Proposal which could be an alternate Nationwide facility or a remote recovery service peovider. 1'he hierarchical structure of the Nationwidc's recovery plans includes the abilifi to address incidents that are department, facility, town, state or regional in nature. It is Nationwide's intent to transact business during an interruption whenever possible. Depending on the nature and severity of the interruption, recovery timeframes may vary. To help mitigate risk, redundant networks and alternate remote systems recovery sites are included in our xccoaery strategy. Nadonwide's Continuity Management (CM) Policy requires that recovery plans be reviewed and exercised on a regular basis. The frequency of reviews and exercises arc stated in the CM Policy and axe based on the exidcaliry of business processes and their supporting systems. Recovery plans for critical applications arc reviewed and call tree exercises preformed annually. 'tabletop walkthrough ox recovery validation exercises arc required annually on a rotating basis. The Nationwide administrative processing systems utilize automated filing systems fox storing all participant records, and have a comprehensive backup system of all plan data. 'T'his automated system has numerous advantages over manual hardcopy files including increased file security, since passwords axe required to access participant files. Backup tapes of all files are made nightly and are maintained fox 45 days. On a predetexxnined day each month the databases are downloaded to sequential files, and are retained according to business requirements. Back-up tapes and files axe maintained in secure, off-site locations. Nationwide has made tremendous progress this year toward safeguarding our business from the event of disaster, onsite, a few miles away or half way around the world. On August 17, 2004, Natiomvide executed our Business Recovery Plan. Nationwide conducted an exercise geared to help us safeguard our ability to serve customers within hours of a business interruption by ensuring that the Business Recovery Plan works as designed. 1'he specific purpose of this exercise was to begin executing critical business functions from a remote location within hours of a disaster outage affecting our building. Secondarily, our purpose was identifying gaps in the Business Recovery Plan that could impair our ability to be successful in the event of a disaster. Here's what we did On August 17, 2004, a simulation was conducted which prompted execution of our System (VRli system) and Business Recovery Plans. By the end of day, a remote location was equipped with network connectivity, laptop PC's, monitors, network printers, phones, and supplies. On August 18, 2004, eighteen Nationwide associates successfully processed approximately 440 participant transactions covering distributions, new business, payroll, and loan functions and answered approximately 115 incoming participant calls. • What were the ultimate goals? • To ensure that we have the resources necessary to uphold our service commitments to our customers. Nationwide 34 Retirement Solutions On Yaur SMe' Town Of Southold, NY 457 Deferred Compensation -Request for Proposal • To provide our employees with a comfortable and safe work environment in the event the facility is not available, because the work we do everyday is critical to our customer's retirement goals. • To build confidence from our customers and business partners that Natiomvide Retirement Solutions has the abilitr° to successfully execute our Business Recovery Plan in the event of a real emergency. What did we learn? Nationwide learned about our preparedness and uncovered potential roadblocks to navigate if a disaster ever occurs. 'this is valuable knowledge that we're still studying and we intend to use this information in future exercises. We gained documented information that if a disaster affects Natiomvide; we are prepared to meet the challenges of recovering our business capabilities quickly, efficiendy and effectively. On-site, Physical Securirv Natiomvide Retirement Solutions' home office features on-site, 24-hour security personnel that monitor entry to our facilities. Doors remain locked at all times, even during normal business hours. access to our facility is via key-card or through the main entrance upon being granted entry by a security guard. As employees enter the locked doors by swiping a key card, the monitor attains the employee's picture file. Cameras mounted at each entrance allow the security guards to match the entrant with the picture on fde. All employees wear picture • identification badges with magnetic data strips that restrict access to sensitive areas within the buIlding. We do not subcontract any service for our record keeping, data processing, or clerical support. Nationwide's Commitment to TechnoloQv Nationwide has along-standing tradition of investing in privacy protection and our investment has paid off Ovex the last year, we have received various awards and recognitions for its commitment to technology, including a top ten ranking foe privacy. A summary of our recent awards and recognitions are listed below: • Most'1'rustcd Company for Privacy: As of March 2007, Nationwide was listed as the most trusted insurance company to protect customer information. The ranking comes from a study conducted by the Ponemon Institute, a leading privacy and information management organization, and TRUSTe, a privacy watchdog. And we're one of the top 10 most trusted companies overall on their 2007 Most Trusted Companies for Privacy list. • Nationwide L ecutivef oins Homeland Security Committee: Nationwide Mutual Insurance Compani's Chief Privacy Officer has been appointed to the Data Pricacv and Integrity rldvisorv Committee at the Department of Homeland Security. • Natiomvide has long devoted resources to technology and you can depend on Nationwide to continue investing in technology. That investment will help you and your participants by Nationwide Retirement Solutions 35 On YOUr Side' Town Of Southold, NY 457 Deferred Compensation -Request for Proposal providing access to better information, faster processing times, improved service, innovative products, individual attention and confidence that your personal information is safe. 3. Indicate all interfacing: payroll deduction inputs, required certifications and any other transactions, specifying all direct and indirect costs. Specify how payroll deduction information is to be supplied. Indicate ability to interface with internal data processing systems. Our system and process is fle~cible and can accommodate the current operating system the Town of Southold uses. I3y remaining with Nationwide, there is no need for you to switch to a different format ~'ou can continue sending your payroll detail via C-Paq and wiring your payroll contribution dollars. If the'1'own is interested in changing the payroll medium, our Payroll ~utomanon Specialists will work with the'1'own to discuss submission options. • • Nationwide Retirement Solutions 36 On Your SMe' Town Of Southold, NY 457 Deferred Compensation -Request for Proposal • SECTION V. INVESTMENTS Please respond to each of the following statements if you desire to be considered as the Financial Organization. If you fee any statement does not apply, please indicate so by responding: "Not Applicable" and provide your reasoning. Fund Offetin~s Information should be for the most recent calendar quarter completed. 1. Describe fully the various attributes of each investment option your company has to offer. For each option include an Investment Options Summary sheet which include the funds objective, portfolio statistics, asset allocation, top 10 holdings, and industry diversification. For your convenience we have included blorningstax Investment Information sheets for each of the funds we currently provide for the Town. Please refer to the Fund Offering section of this proposal for the Morningstar sheets. • 2. Describe fully your "fixed" investment option. Include cone-page summary including applicable rates for the current calendar year, asset composition, and rating methodology. Please refer to the Fund Offering section of this proposal fox an Lscel spreadsheet containing the requested information. 3. Illustrate in spreadsheet format provided, (see Exhibit A) the "variable: vales for each equity type investment. Please give annualized returns for `year-to-date", `one year', `three year' `ten year' and `since inception' values. Please refer to the Fund Offering section of this proposal fox the requested performance information. 4. Illustrate in spreadsheet formatprovided, (see Exhibit B) all charr:+es including loading costs, policy fees, surrender charges, actuarial margins, asset fees, transfer charges, distribution charges, withdrawal fees, redemption fees, commission, termination/withdrawal of contract fees, etc., etc. Plcasc refer to the Fund Offering section of this proposal fox the requested performance information. • Nationwide Retirement Solutions 37 a. rewsne Town Of Southold, NY 457 Deferred Compensation -Request for Proposal • Investment Flexibility Describe fully all matters related to the exchange/transfer limitations or conditions, termination/withdrawal of contract provisions, any other restrictions or penalties, etc., etc. Include any information on "unrestricted" an/or "free" transfers or plan transfer limitations. Nationwide Uroup Fixed Fund Retirement Contract • blinunum deferral amount of at least $260.00 annually (1>etwecn fixed and flexible investments), as required by the Model Plan Document Section 3.2(a). • Increases, decreases and stopping payments are permitted at any time. • Transfers from the Nationwide Fired Fund Retirement Contract to other investment options provided under the plan axe permitted free of charge, subject to the following limitations: Participants may transfer from the Fixed Fund Retirement Contract up to a total of 20% of their account value per year-less any previous transfers made from the Fixed Fund Contract during the calendar year. One transfer per quarter is permitted. Note: Once the Nationwide Fixed Fund balance has been established at the end of the calendar year, the employer will have the option of selecting an entity level 12% aggregate • exchange/transfer provision. Should the employer elect the 12% aggregate pxo~nsion, it will replace the current exchange/transfer limit of 20°/~ per year per participant. Once elected, participants may exchange or transfer up to 100% of their Nationwide Fixed Fund Account balances annually with no limit on the number of exchanges/transfers until the total of all such participant exchanges/transfers reach 12% of the aggregate Fixed Fund 1lccount balance. Should the total of all participant exchanges/transfers reach the 12% limit within a calendar year, no further participant exchanges ox transfers will be accepted for the remainder of that calendar year. Should the employer not select the 12% exchange/transfer provision, the 20% per year per participant exchange/transfer provision will remain in effect. "The 12% aggregate limit fox the following calendar year is determined on an annual basis, based upon the Fixed Fund balance as of December 31 of the previous calendar year. (here axe no administrative charges. iylaxket Value Adjustment If the Town terminates the fixed annuity contract, prior to the end of the 5 year contract, and withdraws its assets in a lump sum, a Market Value Adjustment (MVA) may apply. The MVA is the amount that Nationwide Life determines would be the net capital loss, if any, resulting to Nationwide Life if investments were liquidated to satisfy the lump sum withdrawal. The MVi~ would be calculated using Nationwide Life's current procedures applicable to all contracts of this type and class at the time of withdrawal If the employer withdraws its assets over a 60-month • period (5 years) instead of in a lump sum, the MVA would not apply. There are no fees associated with early withdrawal at the participant level. Nationwide Retirement Solutions 38 o~ mws~ Town Of Southold, NY 457 Deferred Compensation -Request for Proposal • Natiomvide Group Flexible fund Retirement Contract • Minimum deferral amount of at least $260.00 annually (between fixed and flexible investments), as required by the Model Plan Document Section 3.2(a). ^ Increases, decreases and stopping payments axe permitted at any time. • No sales charge on purchase payments. • Unlimited transfers among the mutual funds of the Variable Account. • "1'ransfexs from Variable to Fixed Fund Account axe unlimited. 1?xcessive Trading and Market 'l`iming As an intermediary for mutual funds in deferred compensation programs, Nationwide is in the position of managing excessive trading activity without consistent guidance from the funds themselves, regulators, ox legislators. We believe it is important to have measures in place designed to limit excessive trading activity. As a general practice, we are monitoring activity in all international funds and in any domestic fund that has contacted us and requested inclusion in the monitoring process. Nationwide recognized the need to act before all the recent publicity began and has been acting on market timing issues since early in 2003. After identifying excessive trading activity invok=ing international style and any other identified funds, we contacted fund managers and began • monitoring this participant activity. Today, we regularly evaluate the trading activity of all participants and are in the process of phasing in a new trade monitoring policy. 'this new policy encompasses the following guidelines: If six ox more trade events occur in one calendar quarter, we notify the participant by lLS. Mail that they have been identified as engaging in potentially harmful trading practices. Subsequent to this notification, if more than 11 events occur in hvo consecutive calendar quarters, we will require all future trade requests fox the remainder of the calendar year to be submitted in paper form via regular U.S. Mail. If more than 20 trade events occur in a calendar year, we will require all future trade requests fox the remainder of the calendar year to be submitted in paper form e=ia regular U.S. ~-fail. A "trade event" is defined as any trade or combination of trades occurring on a given valuation day, including an asset rebalancing transaction. In addition, a trade event includes any and all funds available within a participant's plan. The policies and procedures identified above axe designed fox helping to deter the harmful effects frequent or short-term trades may have on all investors in a fund. It is also important to note that we will make further changes as industry, fund management, regulatory= and legislative responses develop. In addition, we may be required to implement more restrictive or different Nationwide Retirement Solutions 39 o~ rwr s~ Town Of Southold, NY 457 Deferred Compensation -Request for Proposal • • • procedures immediately and without notice in order to protect the interests of all plan participants. There are no fees associated with early withdrawal at the participant level. 2. Identify any other charges or limitations not described in the previous responses. Nationwide Retirement Solutions does not charge loading costs, policy fees, surrender charges, actuarial margins, asset fees, transfer charges, distribution charges, withdrawal fees, commissions, or termination/withdrawal of contract fees. Our comprehensive marketing, enrollment, education, and administration services axe included in our bundled offer to the Town. The costs associated with these services axe included in an asset management charge assessed to the participant's account. There are no additional fees or expenses incurred by the participant or the 'Town. Asset Management Charge: For current Side-by-Side Arrangement Nationwide Fixed Contract: 0.00% Investor Destination Series: 0.70% Select Spectrum Series: 0.80% Passage Series 0.95% Asset Management Charge: For Exclusive Arrangement Nationwide Fixed Contract: 0.00% Investor Destination Series: 0.55% Select Spectrum Series: 0.55% Passage Series 0.70% Nationwide Retirement Solutions has no other Eees or charges associated with the participation than have already been disclosed. However, individual fund management fees and charges do apply and axe assessed prior to the calculation of a fund's Net Asset Value. Nationwide Retirement Solutions 40 o~ rowsae :.. fTlltt111 . . - . . . - . . :. , I . . - . ~~r Deferred compensation questions and answers SAMPLE: Date goes here SAMLPLE: Time goes here SAMPLE: Location goes here for more information, contact rep name at rep number ore-mail email@nationwide.com Contact name to schedule an appointment at number ~~~ N t d Merv I r' J: ~I F[ ~d O J n Plr i I L JH 4. N t /v ~ V:ior ref wnark a~~ -1 .mac J9 ~®' NiM 9.~A~ 'N~'~ m. errs ANa v ,M i !h= rqy. Securities offered through Nationwide Investment Serves Corporation: Member NASD In MI only, NBtlG11 Wldpi® Nationwide Investment Svcs. Corporation On Your Side _- r ~ ..- . --. •~rr. - . u. ~ifm ~•~ -u-~; ~i~fll . - - .. Talk to me about deferred compensation. I'm <repName>, your Nationwide Retirement Specialist. I'll be visiting <place> at <time>. Let me know what you'd like to discuss. Return this form to <RSVPname> or fax it to <faxNumber> and I'll give you a call. r 200i N4' deN t me oWCO I-c All gft z 10 _N t de Blvd olumr H43S5 N t ~wl~e.Or ~~,s „n Nto~wd [ra~ema~a=fe, ~~yey„tr,ea, ra~,o~nar ~eM,a~~~,~ ~mPam Nationwide M1RM<t55AC !I /7d Securities offered through Nationwide Investment Services Corporation: Member NASD. On VDUr [~~de In MI only, Nationwide Investment Svcs. Corporation I J PLAN SPONSOR NAME Plan Logo c 0 N d io c w d t C .~ C r a E Y c d c 0 U Y 0 0 3 L J d m Y N T d l0 3 >S N L Y 3 0 t w O c O R Y c d N d >_ 4. to r_ to r_ d C d to N N ~/I ~I N N L H JOHN K SMITH 3334 OAK STREET PARKWOOD CITY, OH 43016 Please review your statement carefully. Corrections may not be accepted more than 45 days after the closing date of the statement. Welcome to your new statement! ^ Nationwide Retirement Solutions Retirement Education for LIFEam October 1 -December 31, 2005 w -.. Questions? Contact Usl Customer Service: (877) 677-3678 Espanol: (800)649-9494 TTD: (800) 848-0833 Webslte: WWW.NRSFORU.COM Write us at: NATIONWIDE RETIREMENT SOLUTIONS P.O. BOX 182797 COLUMBUS, OH 43218-2797 Secudtlee oaered tlirough the NatbnvriCe InveaMenl Senrkea Coryoratlon, member NASD. In Mltlilgen only: NatlonvAde Investment Svcs. Coryoretlon. Life Comes At You FastSM and we want you to be ready. Your quarterly retirement account statement has been redesigned to become an educational tool. This new statement will give you the tools and knowledge to understand your needs for retirement and the steps you can take to meet those needs. These might include helping you find the money to increase the amount you are currently contributing or understanding the benefits of a well- allocated retirement account. What if you are already at retirement? In each issue of this enhanced quarterly statement you'll find information to help you make the most of the wealth you have already accumulated. (see `Welcome' on page 2) Baby Boomers' Retiremel A recent study' shows there is a signfirant gap between what indi- viduals are saving and what they volt need to fund their retirement. Study parGcipanfs antidpated needing W Amount ~~ approximately $30,000 ~ Amount savor per year in retirement. However, a look at their retirement savings indicates they're not prepared. Want to team mae7 Visit the Web sRe above. ' AX $ra(e Firwlcrel RelierreM Caeca Survey W 1. az RpoReC m ABA Bavbng Jeumal Juy a]02.p 61 457(bl Plan 401 (kl TOTAL Balance as of 9J0-05 $17,438.22 $25,566.86 $43,005.08 Contdbutionsfrransfersln` $1,173.90 $0.00 $1,173.90 Loans Unpaid Principal -$399.79 $0.00 - $399.79 Gain (Loss) & Interest $49.49 $102.77 $152.26 Withdrawals/rransfers Out $0.00 $0.00 $0.00 Charges/Fees $0.00 $0.00 $0.00 Balance as of 12-31-05 $18,261.82 825,669.63 $43,931.45 Self Directed Option balance $10,000.00 See your loan information inside! `Includes employee and employer contributions, and transfers into the plan Plan Entry Total Gain/(Loss) Plan Tvoe Date Since Joining 457(b) 6/15/87 $1,202.11 401(k) 11/11/99 $2,411.05 If applicable, "Total Gain/Loss Since Joining' includes asset fees charged against core accounts and/or asset fees associated with Self Directed Option (SDO). For information about asset fees, contact your customer service center. Inside Your Statement Achieving Your Goals ........................................ 2 About Your Money ............................................. 3 Statement Details and Performance Results .... 4 Plan Updates ..................................................... 8 SAMPLE • • W@~CO171e (continued from page 1) How can a statement do all this? It's simple. Each quarter we'll provide the information you'll need to get you where you want to go. We'll also include an article on the first page with a colorful graph showing how you compare to other participants with money invested in local, county and state retirement plans. Let's get started! How Your Statement Works On the front page of this quarterly statement is included a 'snap-shot' of your account called `Quarterly Activity at a Glance'. On page 2 (where you are right now) you'll see articles that have been specifically chosen for you. These articles will educate you about retirement, get you familiar with key terms, help you set goals for your retirement then give you specific steps to take to reach those goals. While page one showed ahigh-level look at your account balance, starting on page three you'll see more detailed information that continues to drill down until you get to your Transaction Detail. You'll be familiar with how most of this information is presented. The last page is your Plan Sponsor Message that contains timely information that is important for you to read. Make sure to check this our each quarter! Even little increases can add up! ?~ Most importantly, each and every page has information about how you can contact us if you have questions. You can also see an electronic copy of this statement on the web site listed in the `Contact Us' box on page one. Sign into your online account, click on your 457 account, then select the 'Statements' option from the list on the left side of the screen. We want ~ to be prepared to make the most of your retirement and with he right tools and knowledge, you can do it! Think contribution a little more to your plan won't make much difference? Don't forget to take the power of time i nto account! For example, if you make $30,000 a year, and are currently deferring 5% of your annual take-home pay to your 457 deferred compensation plan, your estimated account value in 15 years will be $525,000. But take a look at the difference if you commit to save just 2°~ More! By increasing your contribution to 7%, your take -home pay will only be reduced by $44.00 per paycheck. However, you stand to gain over $225,000 morel The chart on the right shows just how big of difference that is This is a hypothetical compounding example and is not intended to predictor project the investment results of any speafx: investment. Investment return rs not guaranteed and will vary depending upon your investments and mantel experience. The impaa of federal andlor state taxes are not shown. Taxes will be taken upon withdrawal, which will lower the totals shown. 2 Quarterly Report for John K Smith Increase your contribution today! Contdbutlon of 7% $750,000 $800,000 Current $700 000 Contrlbutlon , of 5% $600,000 $525,000 $500,000 $400,000 $300,000 $200,000 $100,000 0 IlWStretbn assumes 8'% rate of return over a period of 15 years SAMPLE About Your Money • Contributions Summary -October 1, 2005 to December 31, 2005 457 (b) Plan 401(k) This This Contributions Period Period Contributions' $1,173.90 $0.00 Since Since Joining Joining $17,059.71 $23,258.58 ` InGudes employee and employer contributions, and transfers in Your Asset Allocation -October 1, 2005 to December 31, 2005 To the right is your Account Allocation. Your Account Allocation is how the money in your Your Account Allocation account is actually divided among the investment options you have selected. Investment Tvoe ~ 54°k Large Cap Stock ^ 16% Mid Cap Stock For more information on contribution and account ^ 14°k Balanced allocation, log on to www.nrsforu.com 12% Fixed Account/Cash 3% Small Cap Stocks ^ 1% Bonds Percentages and totals may not be exact due to rounding Investment Option Summary -October 1, 2005 to December 31, 2005 Ending price is as of 12/31/05 457(b) Plan Percent Investment Option Deposited Ending Price Units Fid Contrafund 50.00% $3.0322 180.5619 Drey Prem MdCapStk Cls A 50.00% $2.5307 216.3433 Total Percent 100% 401(k) Plan Percent Investment Option Deposited Ending Price Units Fid OTC Port 50.00% $1.0003 51.3695 Franklin BalSheet Inv Fd A 50.00% $2.1540 23.8556 Total Percent 100% • SAMPLE www.nrsforu.com Questions? Call us! (877) 677-3678 Statement Details ur Account Values by Investment Option -October 1, 2005 to December 31, 2005 Beginning Deferrals/ Withdrawals/ Charges/ Gain/(Loss) Ending 457(b) Plan (0099) Balance Transfers In Exchanges Transfers Out Credits/Fees Interest Balance Fid Contrafund $6,728.20 $547.50 $0.00 $0.00 $0.00 $27.29 $7,302.99 Unpaid Loan Principal $6,224.55 - $399.79 $0.00 $0.00 $0.00 $0.00 $5,824.76 Drey Prem MdCapStk Cls A $4,465.47 $547.50 $0.00 $0.00 $0.00 $22.20 $5,055.17 TOTAL $17,438.22 5695.21 $0.00 $0.00 50.00 $49.49 518,182.92 Beginning Deferrals! Withdrawals/ Charges) Gain/(Loss) Ending 401(k) Plan Balance Transfers In Exchanges Transfers Out Credits/Fees Interest Balance Fid OTC Port $10,226.74 $0.00 $0.00 $0.00 $0.00 $41.11 $10,267.85 Franklin BalSheet Inv Fd A $15,340.12 $0.00 $0.00 $0.00 $0.00 $61.66 $15,401.78 TOTAL $25,566.86 50.00 50.00 50.00 $0.00 $102.77 $25,669.63 Transaction Details -October 1, 2005 to December 31, 2005 Amount Pay Period Effective Total Trensac0on Per End Date Date Amount Tvoe Investment Option Pdce Units Fund 10/01/2005 $140.00 Loan Repayment Fid Contrafund $3.0350 23.0643 $70.00 457 (b) Drey Prem MdCapStk Cis A $2.5897 27.0301 $70.00 10/01/2005 10/08/2005 $195.65 • 10/15/2005 10/22/2005 $195.65 Deferral Fid Contrafund 457 (b) Drey Prem MdCapStk Cls A Universalife Plus Plan 1 $3.0285 30.1304 $91.25 $2.5602 35.6417 $91.25 $13.15 Deferral Fid Contrafund 457 (b) Drey Prem MdCapStk Cls A Universalife Plus Plan 1 11/01/2005 $140.00 Loan Repayment Fid Contrafund 457 (b) Drey Prem MdCapStk Cls A 10/29/2005 11/5/2005 $195.65 Deferral Fid Contrafund 457 (b) Drey Prem MdCapStk CIS A Universalife Plus Plan 1 11/12/2005 11/19/2005 $195.65 Deferral Fid Contrafund 457 (b) Drey Prem MdCapStk Cls A Universalife Plus Plan 1 12/01/2005 $140.00 Loan Repayment Fid Contmfund 457 (b) Drey Prem MdCapStk CIS A 11/26/2005 12/3/2005 $195.65 Deferral Fid Contrafund 457 (b) Drey Prem MdCapStk Cls A Universalife Plus Plan 1 12/1012005 12/17/2005 $195.65 Deferral Fid Contrafund • 457 (b) Drey Prem MdCapStk Cls A Universalife Plus Plan 1 SAMPLE $2.9711 30.7125 $91.25 $2.4434 37.3455 $91.25 $13.15 $3.0327 23.0817 $70.00 $2.5421 27.5362 $70.00 $2.8670 31.8276 $91.25 $2.4434 37.3455 $91.25 $13.15 $2.9854 30.5654 $91.25 $2.4502 37.2418 $91.25 $13.15 $3.0123 23.2380 $70.00 $2.4868 28.1486 $70.00 $2.9960 30.4572 $91.25 $2.4412 37.3791 $91.25 $13.15 $3.0322 30.0936 $91.25 $2.5307 36.0572 $91.25 $13.15 4 Quarterly Report for John K Smith Statement Details Loan Principal Information -October 1, 2005 to December 31, 2005 Principal Principal New Loan Principal Balance as Balance Principal Paid of 12/31/2005 457(b) Plan $6,224.55 $0,000.00 $399.79 $5,824.76 Your Life Insurance Information -October 1, 2005 to December 31, 2005 Policy Premium Report Period Account Surrender Death LHe Option Number Per Pav Premiums Value Value Ben fi Plan I (Universal Life) ABC12345676 $13.15 $92.05 $75,000.00 $500.00 $350,000.00 The account value amount that is reported on your statement does not refiecl any potential surrender charges that may occur on termination of your life insurance policy during the early contract years. In addition, defercals in transit are not inGuded in this amount. Your Personalized Rate of Return -October 1, 2005 to December 31, 2005 457(b) plan 401(k) plan Last 12 months 5.72% 5.30% This return measures the performance of your investment options, based on deferrals and withdrawals, for the past 12 months or the life of your account, hichever is shorter. It differs from the returns on the enGosed performance report. Visit the FAOs on your plan's website for more information. Past ~rtormance is no guarantee of future results. Self-Directed Brokerage Account (SDO) Your Self-Directed Brokerage account value as of 12/31/05 is $10,000.00 For more information regarding your Self-Directed Brokerege Account, please contact NarrisDlred at 1-xxx-xxx-xxxx. • www.nrsforu.com SAMPLE Questions? Call us! (877) 677-3678 PERFORMANCE RESULTS •nvestment Performance Information -October 1, 2005 to December 31, 2005 The results shown represent past performance and do not represent expected future performance or experience. Past performance does not guarantee future results. Investment return and principal value of an investment will fluctuate so that an investor's units or shares, when redeemed, maybe worth more or less that their original cost. Current performance maybe lower or higher than the data quoted. Performance data current to the most recent month-end maybe obtained by visiting: www.nrsforu.com. Please consider the fund's investment objectives, risks, and charges and expenses carefully before Investing. Both the underlying fund prospectuses and informational brochure contain this and other information about the investment company. Prospectuses are available by calling 1-877-677-3678. Read carefully before investing. Please see other important disclosures at the end of this report. Fund names whir ~ symbol indicate a fund in which you were invested as of 12/31/2005 Current Current Year Fixed Investment ODtion Quarter Yield Guaranteed Minimum Yield 123 Nationwide Fixed Option 4.55% 4.00% Sinee Inceptlonl VRU Morningstar Average Annual Return Inception Adoption # Variable Investment Options Cateaorv YTD 1 Year Ye r 1 Year Adoption Date Asset Allocation 624 Gartmore InvDes Aggr SC (+) N/A 3.60% 22.74°~ N/A N/A -3.16% 03/30/00 623 Gartmore InvDes ModAggr SC (+) N/A 2.87 % 18.53% N/A N/A -1.71 % 03/30/00 622 Gartmore InvDes Mod SC (+) N/A 2.13% 13.26% N/A N/A 0.05% 03/30/00 621 Gartmore InvDes ModCons SC (+) N/A 1.20% 8.29 % N/A N/A 1.43% 03/30/00 620 Gartmore InvDes Cons SC (+) NIA 0.71% 4.15 % N/A N/A 2.53% 03/30/00 International Stocks 538 Am Cent Int'I Disc IC (a)(#) Foreign Stock 4.61 % 37.18% 7.09% 12.55% 13.03% 04/04/94 592 Janus Adv Intl Grth I Shs (a)(#) Foreign Stock -0.76°h 25.87% 1.35°k N/A 5.76% 04/30/97 456 Putnam Intnatl Equity Fd A (a) (#) Foreign Stock 0.57% 20.90% 1.56% 8.17% 8.70% 02/28/91 529 Temp Foreign Fnd Cls A (#) Foreign Stock 2.27% 24.48% 3.51% 6.56% 12.29°h 10/05/82 ~07 Small-Cap Stocks Gartmore Small Cap Inst Srv (a) (+) N/A 9.42% 37.45% 8.24% N/A 9.88% 10/30/98 94 Gartmore Small Cap Index A (#) N/A 6.15% 31.39% 5.01°k N/A 7.73°~ 04/09/97 130 Brwn Cap Mgmt Sml Co Fd IC Small Growth -2.76% 18.02% 6.35°k 13.55% 11.27°h 12/31/92 284 Invesco Sm Com Grth Fnd IC (a) (#) Small Growth 2.97% 21.51% -0.03°k 8.44 10.17% 12/27/91 ~ 214 Franklin BalSheet Inv Fd A (#) Small Value 8.60% 29.76% 11.05°h 12.77% 13.00°~ 04/02/90 Mid-Cap Stocks ~ 158 Drey Prem MdCapStk Cls A (#) Mid-Cap Blend 2.81 % 20.49% 4.68% 12.40°~ 11.42°h 04/06/94 278 AIM Dyn Fnd IC (#) Mid-Cap Blend 3.24% 22.48°h -0.70% 9.45% 8.22% 09/01/67 632 One Group MidCap Grth Fd A (#) Mid-Cap Blend 5.14% 19.49°/ 2.82°h 12.96% 12.92% 03/02/89 536 Am Cent Value IC (#) Mid-Cap Blend 5.86% 24.39°h 6.20% 12.91% 12.08% 09/01/93 630 1 Grp MidCapVal Fnd Cls A (#) Mid-Cap Blend 5.94% 28.16% 8.84% 12.52% 10.88% 03/02/89 613 Gartmore Midpp Mkt Indx A (#) Mid-Cap Blend 5.35% 26.01 % N/A N/A 7.12% 12/29/99 314 JPM MidCap Value A (#) Mid-Cap Blend 7.04% 23.74% 15.07% N/A 17.44% 11/13/97 Large-Cap Stooks 149 Drey Appreciation Fnd Inc (#) Large Blend 1.74 % 12.87% -1.67% 11.59°k 12.15°h 01/18/84 ~ 181 Fid Contratund (') Large Blend 5.73% 23.10% 1.39% 12.32% 12.19% 05/17/67 367 Gartmore Nationwide Fund D (#) Large Blend 1.81°k 14.94% -3.64% 10.25% 9.34% 05/11/33 539 Am Cent Growth Fnd IC (a) (') Large Growth 2.11 °h 14.90% -5.34% 7.36% 14.18% 06/30/71 543 Am Cent Ultra IC (') Large Growth 4.75 % 16.66% -3.50% 9.60% 12.84% 11/02181 ~ 195 Fid OTC Port (') Large Growth 3.17 % 24.16% -3.50 % 10.33% 13.63% 12/31/84 Balanced 199 Fid Puritan Fnd (') Moderate Allocation 2.03°~ 14.12% 2.92% 8.87 % 10.81% 04/16/47 277 Incur Fnd of America, Inc. (a) (') Conservative Allocation 11.85% 11.85% 8.38% 11.04% N/A 01/04/71 Bonds 355 MFS High Incur Fnd Cls A (') High veld Bond 12.09% 16.29% 0.78% 4.91 °h 7.45 % 06/17/91 323 MS IFT Fixed Incur Port IC Intrmediate-Trm Bnd 3.63% 3.63°h 6.57% 6.91% 8.26°h 11/14/84 428 PIMCO TtlRetm Fnd Cls A (#) Intrmediate-Trm Bnd 3.80% 3.80% 7.09% 7.18% 7.50% 05/11/87 611 Gartmore Bond Index Fund A (#) N/A 2.90% 2.90% 6.12% N/A 5.92% 04/03/97 642 W&R Advisor High Income Y (#) N/A 8.00% 8.00% 4.42% N/A 5.69°h 01/04/96 Cash 107 AIM STIC Trees Port IC -current yield .08% N/A O.t3% 0.45% 3.06% 3.57% 3.46% 07/01/92 ~73 Gartmore Money Mkt Fd PS -current yield.20% N/A -0.04% 0.10% 2.76% 3.28% 3.19% 06/17/91 s SAMPLE Q uarterly Report for John K Smith PERFORMANCE RESULTS Investment Performance Information -January 1, 2005 to March 31, 2005 C O .y d K C t.. d t Y C .~ >T c m O T m E V C Y C O U ~L O O r~II ~l E rb Y Y N T d r R 7 is N_ ~+ 3 O L O C O w tt5 C d N m a d t0 d c d >T m E t0 N N r RISK DISCLOSURES Money market funds: Investment in the fund is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other federal govemment agency. Although the fund seeks to preserve the value of your investment at $1.00 per share, it is possible to lose money by investing in the fund. Internationallemerging markets funds: Investing internationally involves risks not associated with investing solely in the U.S., such as currency fluctuation, political risk, differences in accounting and the limited availability of information. Small company funds: Stocks of small or emerging companies may have less liquidity than those of larger, established companies and may be subject to greater price volitatility and dsk than the overall stock market. High yield bond Tunds: Portfolios that invest in high-yield securities are subject to greater credit risk and price fluctuations than portfolios that invest in higher-quality secudties. Non-dlverslfied funds: Funds that concentrate in a specific sector or focus on a relatively small number of securities may be subject to greater volatility than a more diversified investment. Government bond funds: While the fund invests in the securities of the U.S. government and its agencies, the funds' value is not guaranteed by these agencies. Real estate funds: Real estate investing entails the risks of real estate business generally, including sensitivity to economic and business cycles, changing demographic patterns and govemment actions. FOOTNOTES a) These funds are not open to new participants b) The Gartmore Investor Destinations Funds are designed to provide diversification and asset allocation across several types of investments and asset classes, primarily by investing in undedying tunds. Therefore, in addition to the expenses of the Investor Destination Funds, you are indirectly paying a proportionate share of the applicable fees and expenses of the underlying funds. c) The money market current yield is the annualized historical yield for the 7~day period ending on the last day of the calendar quarter. Yield quotation more closely reflects the current earnings of the money market fund than the total return quotation. d) This fund may not be available in all plans. This option is offered outside the group variable annuity contract. The funds initial investrnents will be in units of Morley Financial's Stable Value Fund. Return history pertains to the Stable Value Fund managed by the same fund manager since inception in December 1993. FEE DISCLOSURES The Standardized illustration represents performance based on a $1,000 hypothetical investment, and reflects the deduction of the following fees: denotes a Fee of 0.90% # denotes a Fee of 0.70% + denotes a Fee of 0.60% In addition to fees noted above, an annual administration fee of $50 is also reflected. Some mutual funds may impose a short term trade fee. Please read the underlying prospectuses carefully IMPORTANT DISCLOSURES Investing may involve market risk, including the possible loss of principal. Certain underlying funds discussed here are only available as investment options in group vadable annuity contracts issued by life insurance companies. They are not offered or made available directly to the general public. These portfolios contain different investments than similarty named mutual funds offered by the money manager and investment returns may be higher or lower. Inception Date is the date the underlying fund was established. Non-Standardized performance for UIOs includes hypothetical performance for periods before the UIO was available in the group annuity, where applicable, applying contract charges to actual fund NAVs to determine the performance the UIO would have achieved inside the separate account. For Standardized pertormance Adoption Date is the date the underlying fund was included in the separate account. Performance numbers in the YTD (Year To Date) column are not annualized returns and represent the total percentage change in share value from the beginning of the year to the date of this repoR. Fund category data provided by Momingstar®. ©2003 Morningstar, Inc. All Rights Reserved. The Morningstar information contained herein: (1) is proprietary to Momingstar and/or its content providers; (2) may not be copied or distdbuted; and (3) is not warranted to be accurate, complete or timely. Neither Momingstar nor its content providers are responsible for any damages or losses adsing from any use of this information. Although data is gathered from reliable souroes, data accuracy and completeness cennot be guaranteed. Securities offered through Nationwide Investment Services Corporation, member NASD. In Michigan only: Nationwide Investment Svcs. Corporation. Group vadable and fxed annuities are issued by Nationwide Life Insurance Company, Columbus, OH. Contract #s: TSP-556; TSPS57; APO-2355; APO-2424 ©2006, Nationwide Retirement Solutions, Inc. All Rights Reserved. Nationwide and the Nationwide framemark are federally registered service marks of Nationwide Mutual Insurance Company. On Your Side is a service mark of Nationwide Mutual Insurance Company. Retirement Education for LIFE is a service mark of Nationwide Life Insurance Company. Life Comes At You Fast is a service mark of Nationwide Mutual Insurance Company. www.nrsforu.com SAMPLE Questions? Call us! (877) 677-3678 ~ Plan Sponsor Message New year, new opportunities • I can invest more tax-deferred in 2005? Yes, you can! As of January 1, 2005, you can invest the lesser of $14,000 or 100% of includible compensation in your retirement account. If you were born in or before 1955, chances are you can contribute as much as $18,000 through the Age 50+ Catch-up Limit. The chart nearby shows how. I can't afford to maximize! "Doing the max" is not about investing at what the law allows. It's about investing as much as you can afford. And, chances are, that's more than you think. 1. Set up a budget. Be honest. List all your expenses, even those mid-afternoon snacks. 2. Decide what you're willing to cut. Be fair. Let yourself splurge, but maybe less frequently or not as much. 3. Total what you'll save per payday. 4. Increase your contributions by that amount. Looking for more ideas on how to do more for retirement? Come to the Plan Web site at www.nrsforu.com. ^ <Age 50 ^ 50-Plus ^ Special 457 $25.000 s2o.ooo r st5.ooo $io.ooo ss,ooo so CUU4 1UUS 1006 Limit information is based on the Economic Growth and Tax Relief Reconciliation Act of 2001, as implemented by final regulations implemented by the Internal Revenue Service in 2003. NOTE: You cannot use both the 457 Special Catch-Up provision and the EGTRRA 50+ Catch-Up provision. Chart assumes you qualify for the maximum deferral limit; ask aRep-on-Call for details. Keep in mind that investing involves market risk, including the possibility that you may lose not only your earnings but also what you contribute. Your Nationwide Retirement Specialist can help you identify ways to manage market risk. The information you receive is for educational purposes only and is not intended as investment advice. Retiree's corner Why do taxes on my distributions change? If you're required to take distributions from your retirement account under the required minimum distribution Hiles of the Internal Revenue Code, you may see the amount withheld for federal taxes change over the year. That's because federal law imposes a mandatory 20% federal income tax withholding on periodic payments for less than 10 years and certain other types of payments. The mandatory 20% federal income tax withholding doesn't begin until you have received your entire required minimum distribution amount for that calendar year. The same process then is repeated for each subsequent year. One other thing. Your required minimum distribution amount ma}' change each year, depending on how well your investments fared and other factors. And, if the amount changes, the amount of tax you owe may change too. Still not sure? That's OK. Laws covering distributions can be tricky. Your Nationwide Retirement Specialist can help you sort it out. Or contact a "Rep-on-Call" toll-free at 1-877-677-3678. Information provided by retirement specialists is for educational purposes only and is not intended as investment advice. SAMPLE Quarterly Report for John K Smith NRM-3282A0.1 r'~ :...--- t Nationwide On Your Side • • Retiring within the next year? Attend the"3 Steps to Plan Your Retirement Income" workshop and learn: 1) Haw much income you'll need in retirement ' 2) How to make your retirement savings last 3) How to pick a payout option for your : deferred compensation dollars SAMPLE ; fall me today to sign up for this important workshop. SAMPLE ' _= P. S. - I look forward to helping you plan • for your retirement! Call me. '2006, NaGOnwide Re[iremen[SOWlion; Inc NaGOnwlde, the Naflonwlde ; lramewo~k and On YOGI Side are federallyregistereAserNCe masks of Natlonwrde Mumallnmmnw Company NRM-3AR9A0 r~ P Nationwide On Your Side Retiring within the ~ next 10 years? Attend the"Countdown to Retirement"workshop and I'll show you four steps to maximize your final years of investing: 1) Determine how much income you'll need in retirement 2) Close your income gap 3) Learn how to reduce the risks of investing 4) Keep your retirement planning simple SAMPLE Call me today to sign up for this important workshop. SAMPLE P. S. - I look forward to helping you plan • for your retirement! Call me. ®20W, Nationwide Retliement5olutlons lnc Nationwide the Natlonwlde /mmework andOn YourSldeare ledemllyreyisterPdsermce marks of Natlonwlde MUNallnswanre Company, NRM-3889M7 Retirement Planning Analysis Bill Sample Retirement Prepared for: Bill and Judy Sample March 3, 2008 Prepared by: Mitch Williams Personal Retirement Consultant Nationwide 5900 Parkwood Pl., PW-03-04 Dublin, OH, 43016 614-854-8181 • I Retirement Plan Assam tions Prepared for Bill and Judy Sample March 3, 2008 Age Assumptions Bill ,L dy Date of birth 11/01/1958 12/16/1959 Retirement date 11/2013 11/2013 Retirement age 55 53 Life expectancy 90 90 General Assumptions Inflation (C.P.I) 3.5%o Federal tax rate Automatic Tax Status Married filing jointly State and local tax rate 5.0% Investments used to fund retirement Principal and interest This caletdator uses the tax rates shown for dve pre-retirement years of the plan; there is na rate increase included due to t/te JCTRRA sunset. Once retirement begins we will automtlticalfy recalculate tax liability for yon each year and sunset provisions will be taken into nccmmt. Annual Retirement Expenses Amount in Bill's Age Annual Description Current Dollars From Throueh Increase While Bill and Judy both are in retirement $ 75,000 55 90 3.5% While Judy is in retirement $ 60,000 90 91 3.5% Annual increase in expenses, pre-retirement 3.5% Expenses are in after-tax dollars. Prepared by Mitch Williams, Personal Retirement Consultant, Nationwide This analysis is based on information thm you provided. The asswnptiom and projections in this plan are evtimnles and are meant to serve solely as a guideline. If any of the assumptions used in this plan are not realized, then the projections will be inaccurate. This plan dots not offer legal or tax advice and should he reviewed by your legal and tax adviaora before any action is taken. Past investment performance is not indicmive of future investmem resWts. Page 1 n I..J • Retirement Plan Assum tions -Continued Prepared for Bill and Judy Sample March 3, 2008 Investment Assets Bill Additional Annual Cost Current Annual Contribution Investment Tyae Basis Value Contribution Increase Taxable $ 0 $ 0 0.0% Appreciable Securities $ 0 $ 0 $ 0 0.0% Tax-free $ 0 $ 0 0.0°l0 Annuities $ 0 $ 0 $ 0 0.0°l0 Roth IRA $ 0 $ 0 $ 0 0.0% Tax-deferred $ 0 $ 145,000 $ 15,500 0.0% Judy Additional Annual Cost Current Annual Contribution Investment Tvpe Basis Value Contribution Increase Taxable $ 0 $ 0 0.0% Appreciable Securities $ 0 $ 0 $ 0 0.0% Tax-free $ 0 $ 0 0.0% Annuities $ 0 $ 0 $ 0 0.0% Roth IRA $ 0 $ 0 $ 0 0.0% Tax-deferred $ 0 $ 35,000 $ 5,000 0.0% Joint Additional Annual Cost Current Annual Contribution Investment Tvae Basis Value Contribution Increase Taxable $ 40,000 $ 0 0.0% Appreciable Securities $ 0 $ 50,000 $ 0 0.0% Tax-free $ 0 $ 0 0.0% Prepared by Mitch Williams, Personal Retirement Consultant, Nationwide This analysis is based on information ghat you provided. The asnump~iona and projections in this plan are eatimatcs and are meant to serve solely ar a guideline. If any of the assumptions used in this plan are nog realized, then the pmjutions will be inaccurate. This plan does not offer Icgnl or tax advice and should be reviewed by youe legal and wx adviso[s before any action is taken. Past investment performance iz nog indicative of Pomre inveavnem [esW~s. Page 2 L~ r1 ~J Retirement Plan Assum tions - Continued Prepared for Bill and Judy Sample March 3, 2008 Rates of Return Tax-Status Bill Judy oint In Retirement Taxable _5.0% 5.0% 5.0% 5.0% Appr. Securities, Overall - 7.0°l0 7.0% 7.0% 6.0% Dividends - 2.0% 2.0% 2.0°l0 2.0% Appreciation - 5.0% 5.0% 5.0% 4.0% Tax-free 7.0% 7.0% 7.0% 6.0% Annuities 7.0°l0 7.0%a 6.0% Roth IRA 7.0% 7.0°l0 6.0%a Tax-deferred 7.0% 7.0% 6.0% Social Security Bill ,Ldy Age to start receiving benefit 65 65 Current Income $ 0 $ 0 Estimated social security benefit $ 4,000 $ 14,000 Annual benefit increase Pre-retirement 3.0°l0 In retirement 3.0% Percent of social security benefit taxed 85.0% Prepared by Mitch Williams, Personal Retirement Consultant, Nationwide This analysis is based on infomtation that you pmvidad. The assumptions and projections in this plan arc estimates and are mean) to serve solely as a guideline. If any of the assumptions used in this plan me not realized, then the projections will be inaecurnte. This plan does not offer legal or tax advice and should be reviewed by your legal and tax advisors before any action is taken. Past investmem performance s not indicative of furore investment results. Page 3 • i • Retirement Plan Assam tions - Continued Prepared for Bill and Judy Sample March 3, 2008 Annual Pension Income Gov'U Stop Annual Increase % Payable Pension Military Start Age Pre In to spouse Source Recipient Amount Yes/No ~ 999=Life Ret. Ret. at death City Pension Bill $ 90,000 No 55 999 2.0% 3.0% 100.0% Projected Lump Sum Benefit Lump sum Age Source Recipient Amount Received Description Prepared by Mitch Williams, Personal Retirement Consultant, Nationwide This analysis iv bared on information [hat you provided. The assumptions and projections in phis plan are estimates and are meant to serve solely as a guideline. If any of the assumptions used in this plan are not realized, then the projection will be inaccurate. This plan does no[ offer legal or tax advice and should he reviewed by your legal and izx advisor before any action is taken. Past investment performance is not indicative of future investment results. Page 4 Retirement Plan Summar Prepared for Bill and Judy Sample March 3, 2008 Age Assumptions Bill ,Ldy Date of birth 11 /01 / 1958 12/16/ 1959 Retirement date ] 1/2013 11/2013 Income Projections Average annual retirement income desired: $ 74,585 Average annual income from the following sources: Social Security $ 8,951 Pension $ 61,032 Other $ 0 Taxable investments $ 3,350 Appreciable Securities $ 1,252 Tax-free investments $ 0 Annuities $ 0 Roth IRA $ 0 Tax-deferred investments $ 0 Total $ 74,585 Average annual deficit: $ 0 Projected Value of Investments at the end of retirement $ 2,202,763 In today's dollars, this is equivalent to $ 537,544 Prepared by Mitch Williams, Personal Retirement Consultant, Nationwide This analysis is based on infomin~ion lhn~ you pmvidcd. The as'aumptions and projcctiona in phis plan are extimates and are mcam to serve solely as n guideline. If any of the assumptions used in this plan are nod realized. then the projections will be inaccurate. This plan does not offer legal or tax advice and should be reviewed by your legal and tax advisor before any action a taken. Past mvesunent performance ~s not indicawe of furore mvesVnem results. Page 5 - - _ _ - - I Sources of Retirement Income for Bill and Judy Sample Social Security 12% 82% Pension 2°lo Appr. Securities 4% Taxable 7nvst. Based on the information provided, The Retirement Planner projections indicate that you will be able to meet your retirement income goal. You should look into appropriate estate planning techniques to maximize the amount that is left to your heirs. 1'repnred on Merch 3, 3008 by 61air C.Ilill, Peoonal Retirement CanmlWnt. Nationwide The alnve chop is base) on informofion Nm you have provided, which ix a<mmcd to be acwram anJ complete. Paa perfomwnce iz nor indicmive oC fuwre remlu- Por illu.araGve purry~sex only. __ __ Sources of Retirement Income for Bill and Judy Sample After taxes Income $400,000 $300,000 $200,000 $100,000 $0 Bill's Age Social Security ~ Pension `Other ~ Taxable Invst. ~ Appr. Securities J Tax-free Invst. Annuities ~ Roth IRA ~ Tax-deferred Invst. ~ Deficit Prepared on March 3.?WN by Mitch Williams Ihnonel Retirement (itnmllanl. NaGOnwide_ ' 'Ihc slave char ie bared on inlomution Thal ynu have pmvided, which ix acvutned lobe accvmle end complete. Pvat pcrfomwm;e i.u not indicative of fmure resnh.- Por illuaraove purpavcs only. 55 60 65 70 75 80 85 90 i • ~ Sources of Retirement Income After taxes Prepared for Bill and Judy Sample March 3, 2008 Surplus[ Bill's Social Taxable Appreciable Tax-free Ruth Tax•def. Income Reinvested Value of Aee Security Pension Other Investments Securities Investmeuts Annuities IRA Investmeuts Total Needed Shortfall Investments 55 0 11,013 0 2.932 901 0 0 0 0 14 ,846 14.846 0 524,418 56 0 84,045 0 6,992 1,157 0 0 0 0 92 ,194 92.194 0 546.402 57 0 86,684 0 7,532 1,205 0 0 0 11 95 ,421 95,421 0 569.179 58 0 89,409 0 8,096 1,255 0 0 0 0 98 ,761 98,761 0 592,783 59 0 92,225 0 8.685 1,307 0 0 0 0 102 ,217 1(Y1,217 0 617,249 60 0 95,134 0 9,300 1,361 0 0 0 0 105 795 105.795 0 642,612 61 0 98,139 0 9,941 1,418 0 0 0 0 109 .498 109,498 0 668.914 62 0 101,090 0 230 12,010 0 0 0 0 113 ,330 113,330 0 692,478 63 0 104243 0 0 13.054 0 0 0 0 117 ,297 117,297 0 716,219 64 0 107.500 0 0 13,902 0 0 0 0 121. 402 121,402 0 740,168 65 888 110.742 0 0 14.021 0 0 0 0 125, 651 125.651 0 765336 66 7.053 113,393 0 0 9,603 0 0 0 0 130 A49 130.049 0 798,067 67 24,959 114,828 0 0 365 0 0 0 0 140, 153 134.601 5,552 851.052 68 25,719 118,333 0 213 385 0 0 0 0 144, 650 139312 5,338 906,665 69 26.502 121,949 0 416 406 0 0 0 0 149, 273 144,188 5,(185 965,034 70 27310 125,678 0 609 428 0 0 0 0 154, 024 149,234 4,790 1.026,299 71 27,656 126,799 0 773 441 0 0 0 23.156 17R, 825 154.457 24,367 1.079,657 72 28,359 129.893 0 1,717 463 0 0 0 30,879 191, 311 159.863 3L448 1,131,308 73 29,192 133.692 0 2,943 487 0 0 0 32,576 198, 890 165,458 33,432 1,183,840 74 30,050 137,602 11 4,244 513 0 0 0 34,362 206, 771 171,250 35,521 1,237,172 75 30,933 141,627 0 5,625 540 0 0 0 36,239 214, 965 177,243 37,722 1,291,209 76 31,843 145,771 0 7,090 569 0 0 0 38,213 223, 484 183,447 40.038 1,345,844 Prepared by Mitch Williams, Personal Retirement Consultant, Nationwide Thic anatysie ie based on information Ihat you provided. The assumptions and projections in Ihis plan arc estimalen and are meant to nerve solely as a guideline. If any of the assumptions used in thin plan are not realized, then the projections will be inaccurate. This plan does not offer legal or tax advice and should be reviewed by your legal and tax advisors before any action is taken. Pas[ investment performance is not indicative of future investment results. Page 8 s • • Sources of Retirement Income After taxes Prepared for Bill and Judy Sample March 3, 2008 Surplus/ Bill's Social Taxable Appreciable 'l'ax-free Roth Tax-def. Income Reinvested Value of Aee Security Pension Other Investments Securities Investments Annuities IRA Investments Total Needed Shortfall Investments 77 32781 150,049 0 8,643 599 0 0 0 40,140 232,212 189,867 42,345 1.401,028 78 33,745 154,444 0 10,284 630 0 0 0 42,269 241,373 196,513 44.861 1,456.587 79 34,740 158,980 0 12,022 664 0 0 0 44370 250.776 203391 47385 1.512.438 80 35.766 163,656 0 13,856 699 0 0 0 46.507 260,484 210,509 49,975 1,568.462 81 36,822 168,472 0 15789 736 0 0 0 48724 270,544 217.877 52.667 1,624,506 62 37,910 173,433 0 17.824 775 0 0 0 51,022 280,965 225.503 55.462 1,680,400 83 39.031 178,544 0 19,967 817 0 0 0 53399 291.756 233395 58361 1,735,964 84 40,186 183.809 0 22219 860 0 0 0 55,852 302,925 241.564 61361 1,790,997 R5 41380 189257 0 2A,590 906 0 0 0 58,076 314209 250.019 64,190 1,845.434 86 42,611 194.881 0 27,070 954 0 0 0 602A8 325,764 258,770 66,995 1.899.121 87 43,881 200.680 0 29,658 1,005 0 0 0 62,433 337,658 267,827 69.831 1.951,857 8R 45,191 206,661 0 32,355 1.059 0 0 0 64,621 349.887 277200 72.686 2,003,433 89 46,541 212,829 0 35,164 1,116 0 0 0 66,797 362.446 286,902 75,543 2.053,628 90 47,940 219230 0 38,090 1.175 0 0 0 68,479 ?74,913 296.944 77.969 2,102.441 91 38,540 226,779 0 41283 1244 0 0 0 67342 375,187 245,870 129318 2202,763 Prepared by Mitch Williams, Personal Retirement Consultant, Nationwide This analysis is based on information that you provided. The assumptions end projections in Ibis plan are estimates and are mcam to serve solely as a guideline. If any of the assumptions used in this plan are nog realized, then the projections will be inaccurate. This plan does not offer legal or lax advice and should be reviewed by your legal and [ax advisors before any action is taken. Past investment performance is not indicative of future investment results. Page 9 i Dollars $2,500,000 $2,000,000 $1,500,000 $],000,000 $500,000 $0 2008 ~ ~ Value of Investments for Bill and Judy Sample From now through retirement, at year end Year Taxable Invst. ~ Appr. Securities Tax-free Invst. ~ Annuities ~ Roth IRA ~ Tax-deferred Invst. Prepared on Mach 3.3008 hyMllch Wfllfams, Pemnal ReHrcmea Coavulram. Nationwide The nlwve then is braved on inPormvoon lhet you have provlde4 which is acxumedmhe vccvraa mdcompleee. Pant pedomun¢ie no~indfcaGve of fuWre result. Por illuz¢a[ive purposex only- 2014 2020 2026 2032 2038 2044 • Value of Investments From now through retirement, at year end Prepared for Bil] and Judy Sample March 3, 2008 Bi1Ps Taxable Appreciable Tax-free Roth Tax-def. Awe Investments Securities Investments Annuities IRA Investments Total 50 41,091 52,730 0 0 0 206,707 300,527 51 42,457 56,210 0 0 0 243,111 341,778 52 43,869 59,920 0 0 0 282,064 385,853 53 45,327 63,713 0 0 0 323,744 432,784 54 46,834 67,746 0 0 0 368,341 482,921 55 45,412 70,456 0 0 0 408,549 524,418 56 40,065 73,274 0 0 0 433,062 546,402 57 33,928 76,205 0 0 0 459,046 569,179 58 26,941 79,253 0 0 0 486,589 592,783 59 19,041 82,423 0 0 0 515,784 617,249 60 10,161 85,720 0 0 0 546,731 642,612 61 230 89,149 0 0 0 579,535 668,914 62 0 78,170 0 0 0 614,307 692,478 63 0 65,054 0 0 0 651,166 716,219 64 0 49,933 0 0 0 690,235 740,168 65 0 33,686 0 0 0 731,650 765,336 66 0 22,518 0 0 0 775,549 798,067 67 5,244 23,727 0 0 0 822,081 851,052 68 ]0,258 25,001 0 0 0 871,406 906,665 69 15,001 26,343 0 0 0 923,691 965,034 70 19,430 27,757 0 0 0 979,112 1,026,299 71 43,418 29,247 0 0 0 1,006,992 1,079,657 72 74,466 30,817 0 0 0 1,026,025 1,131,308 73 107,476 32,471 0 0 0 1,043,893 1,183,840 74 142,553 34,214 0 0 0 1,060,405 1,237,172 75 179,807 36,051 0 0 0 1,075,352 1,291,209 76 219,351 37,986 0 0 0 1,088,507 1,345,844 77 261,176 40,025 0 0 0 1,099,827 1,401,028 78 305,490 42,173 0 0 0 1,108,924 1,456,587 Prepared by Mitch Williams, Personal Retirement Consultant, Nationwide This analysis is based on information that you provided. The assumptions and projections in this plan are estimates and ure meant to serve solely m a guideline. If any of the assumptions used in this plan are not realized, then the projections will be inaccurate. This plan doe,. not offer legal or tax advice and should be reviewed by your legal and tax advisor+ before any action is' mken. Past i nvestment performance is not indicative of future investment rewl[s. Page 1 I Value of Investments From now through retirement, at year end Prepared for Bill and Judy Sample March 3, 2008 Bill's Taxable Appreciable Tax-free Roth Tax-def. Awe Investments Securities Investments Annuities IRA Investments Total 79 352,298 44,437 0 0 0 1,115,703 1,512,438 80 401,665 46,823 0 0 0 1,119,975 1,568,462 81 453,691 49,336 0 0 0 1,121,478 1,62A,506 82 508,479 51,985 0 0 0 1,119,937 1,680,400 83 566,129 54,775 0 0 0 1,115,060 1,735,964 84 626,740 57,715 0 0 0 1,106,541 1,790,997 85 690,141 60,814 0 0 0 1,094,480 1,845,434 86 756,303 64,078 0 0 0 1,078,740 1,899,]21 87 825,258 67,518 0 0 0 1,059,082 1,951,857 88 897,020 71,142 0 0 0 1,035,270 2,003,433 89 971,590 74,961 0 0 0 1,007,076 2,053,628 90 1,048,534 78,985 0 0 0 974,922 2,102,441 91 1,176,771 83,225 0 0 0 942,767 2,202,763 Prepared by Mitch Williams, Personal Retirement Consultant, Nationwide This analysis is bascA nn information that you provided. The assumptions and projections in this plan are estimates and are meant Io serve solely as a guideline. If any of the assumptionu used in this plan are not realized, then the projections will be inaccurate. This plan does not offer legal or tax advice and should be reviewed by your legal and tax advisor before any xenon is taken. Past i nvestment performance is not indicative of furore invesnnent results. Page 12 ! • Cash Flow Analysis From now through retirement Prepared for Bill and Judy Sample March 3, 2008 Sources of Income (Bill's Aae) 50 5] 52 53 54 55 56 57 Social Security 0 0 0 0 0 0 0 0 Pension 0 0 0 0 0 16,56] 102,348 105,419 Other Income 0 0 0 0 0 0 0 0 Mandatory IRA distribution 0 0 0 0 0 0 0 0 Taxable investments -interest 1,640 2,055 2,123 2,793 2,266 2,271 2,003 1,696 Taxable investments -principal 0 0 0 0 0 1,422 5,347 6,137 Appr. Securities -dividends 850 I,O55 1,124 1,198 1,274 1,355 1,409 1,465 Appr. Securities -appreciation 0 0 0 0 0 0 0 0 Appr. Securities -principal 0 0 0 0 0 0 0 0 Tax-free investments 0 0 0 0 0 0 0 0 Annuities 0 0 0 0 0 0 0 0 Roth IRA 0 0 0 0 0 0 0 0 Tax-deferred investments 0 0 0 0 0 0 0 0 Total income before taxes 2,490 3,109 3,247 3,392 3,541 21,609 111,108 114,7]8 Federal taxes -ordinary income 467 586 605 967 7,009 5,753 14,615 14,892 Federal taxes -capital gains 128 158 169 0 0 0 0 0 State and local taxes 125 155 162 170 177 1,009 4,298 4,405 Total income after taxes 1,771 2,210 2,311 2,256 2,355 14,84fi 92,]94 95,421 After tax income needed 0 0 0 0 0 14,846 92,194 95,421 Extraordinary income needed 0 0 0 0 0 0 0 0 Surplus/(Shortfall) 1,771 2,210 2,311 2,256 2,355 0 0 0 Value of investments (at year end) 300,527 341,778 385,853 432,784 482,921 524,4] 8 546,402 569,179 Prepared by Mitch Williams, Personal Retirement Consultant, Nationwide This analysis is based on information that you provided. The xcsumptions and projections in this plan are ec~imates and are meant to serve solely as a guideline. If any of the assmnplions uccd in this plan are not realized, then the projections will be inaccurate. This plan does not offer Icgal or fax advice and should be reviewul by your legal and tax advisoLC before any action is taken Pact investment performance is not indicative oC Curare imeslment results. Page 13 i • • Cash Flow Analysis From now through retirement Prepared for Bill and Judy Sample March 3, 2008 Sources of Income (Bill's Aee) 58 59 60 61 62 63 64 65 Social Security 0 0 0 0 0 0 0 1,039 Pension 108,581 111,839 ]]5,194 118,650 122,209 125,875 129,652 133,541 Other Income 0 0 0 0 0 0 0 0 Mandatory IRA distribution 0 0 0 0 0 0 0 0 Taxable investments -interest 1,347 952 508 11 0 0 0 0 Taxable investments -principal 6,987 7,900 8,880 9,931 230 0 0 0 Appr. Securities -dividends 1,524 1,585 1,648 1,714 1,503 1,251 960 648 Appr. Securities -appreciation 0 0 0 0 13,347 14,934 16,322 16,831 Appr. Securities -principal 0 0 0 0 638 685 719 712 Tax-free investments 0 0 0 0 0 0 0 0 Annuities 0 0 0 0 0 0 0 0 Roth IRA 0 0 0 0 0 0 0 0 Tax-deferred investments 0 0 0 0 0 0 0 0 Total income before taxes 118,440 122,276 12fi,231 130,307 137,927 142,745 147,653 152,770 Federal taxes -ordinary income 15,166 15,437 15,704 15,966 16,291 16,618 16,943 17,507 Federal taxes -capital gains 0 0 0 0 2,669 2,987 3,264 3,366 State and local taxes 4,512 4,622 4,732 4,843 5,636 5,844 6,044 6,246 Total income after taxes 98,761 102,217 105,795 109,498 113,330 117,297 121,402 125,651 After tax income needed 98,761 102,217 105,795 109,498 113,330 117,297 121,402 125,651 Extraordinary income needed 0 0 0 0 0 0 0 0 Surplus/(Shortfall) 0 0 0 0 0 0 0 0 Value of investments (at year end) 592,783 617,249 642,612 668,914 692,478 716,219 740,168 765,336 Prepared by Mitch Williams, Personal Retirement Consultant, Nationwide This analysis is based on information that you provided. The assumptions and projections' in this plan are estimates and are meant m serve solely as a guideline. If any of the assumptions used in ihi. plan are not realized, then the projections will be inaccurate. This plan does not offer legal or tax advice and should be reviewed by your legal and tax advisors before any action is taken. Past inves'nnem performance is not indicative of rutnre imesbnent results. Page ] 4 Cash Flow Analysis From now through retirement Prepared for Bill and Judy Sample March 3, 2008 Sources of Income (Bill's A¢e) 66 67 68 fig 70 71 72 73 Social Security 8,291 29,751 30,644 31,563 32,510 33,485 34,490 35,525 Pension 137,548 141,674 145,924 150,302 154,81 I 159,455 164,239 169, 166 Other Income 0 0 0 0 0 0 0 0 Mandatory IRA distribution 0 0 0 0 0 29,120 39,044 41,220 Taxable investments -interest 0 0 262 513 750 972 2,171 3,723 Taxable investments -principal 0 0 0 0 0 0 0 0 Appr. Securities -dividends 433 450 475 500 527 555 585 616 Appr. Securities -appreciation 11,565 0 0 0 0 0 0 0 Appr. Securities -principal 469 0 0 0 0 0 0 0 Tax-free investments 0 0 0 0 0 0 0 0 Annuities 0 0 0 0 0 0 0 0 Roth IRA 0 0 0 0 0 0 0 0 Tax-deferred investments 0 0 0 0 0 0 0 0 Total income before taxes 158,305 171,876 177,305 152,878 188,598 223,587 240,528 250,250 Federal taxes -ordinary income 19,510 24,797 25,515 26,246 26,990 35,492 39,166 40,890 Federal taxes -capital gains 2,313 0 0 0 0 0 0 0 State and local taxes 6,434 6,926 7,140 7,359 7,584 9,270 IQ052 IQ470 Total income after taxes 130,049 140,153 144,650 149,273 154,024 178,825 191,311 198,890 After tax income needed 130,049 134,601 139,312 144,188 149,234 154,457 159,863 165,458 Extraordinary income needed 0 0 0 0 0 0 0 0 Surplus/(Shortfall) 0 5,552 5,335 5,085 4,790 24,367 31,448 33,432 Value of investments (at year end) 798,067 851,052 906,665 965,034 1,026,299 1,079,657 1,131,308 1,183,840 Prepared by Mitch Williams, Personal Retirement Consultant, Nationwide This analysis is bated on information that you provided. The aswmptions and projections in this plan are estima[cv and are mean to serve mlely as a guideline. If any of the assumptions used in this plan are not realized, then the projections will be inaccurate. This plan does not offer legal or tax advice and should be reviewed by your legal and tax advis'on before any action is taken. Past investment performance is not indicative of ru[ure investment rewlLS. Page 15 Cash Flow Analysis From now through retirement Prepared for Bill and Judy Sample March 3, 2008 Sources of Iucome (Bill's Aee) 74 75 76 77 78 79 80 81 Social Security 36,590 37,688 38,819 39,983 41,183 42,418 43,691 45,001 Pension 174,241 179,468 184,852 190,398 196,110 201,993 208,053 214,294 Other Income 0 0 0 0 0 0 0 0 Mandatory IRA distribution 43,511 45,922 48,458 50,934 53,673 56,374 59,123 61,976 Taxable investments -interest 5,374 7,128 8,990 10,968 13,059 15,274 17,615 20,083 Taxable investments -principal 0 0 0 0 0 0 0 0 Appr. Securities -dividends 649 684 721 760 800 843 889 936 Appr. Securities -appreciation 0 0 0 0 0 0 0 0 Appr. Securities -principal 0 0 0 0 0 0 0 0 Tax-free investments 0 0 0 0 0 0 0 0 Annuities 0 0 0 0 0 0 0 0 Roth IRA 0 0 0 0 0 0 0 0 Tax-deferred investments 0 0 0 0 0 0 0 0 Total income before taxes 2fi0,366 270,890 281,840 293,043 304,824 316,903 329,370 342,292 Federal taxes -ordinary income 42,689 44,566 46,524 48,516 50,628 52,783 55,005 57,310 Federal taxes -capital gains 0 0 0 0 0 0 0 0 State and local taxes 10,906 1 ],359 11,832 12,314 12,823 13,344 13,881 14,438 Total income after taxes 206,771 214,965 223,484 232,212 241,373 250,776 260,484 270,544 After tax income needed 171,250 177,243 183,447 189,867 196,513 203,391 210,509 217,877 Extraordinary income needed 0 0 0 0 0 0 0 0 Surplus/(Shortfall) 35,521 37,722 40,038 42,345 44,861 47,385 49,975 52,6fi7 Value of investments (at year end) 1,237,172 1,291,209 1,345,844 1,401,028 1,456,587 1,512,438 1,568,462 1,624,506 Prepared by Mitch Williams, Personal Retirement Consultant, Nationwide This analysis is bated on information that you provided. The as,wmp[ions and projections in this plan arc estimates and are meant to serve solely as a guideline. If any of the assumptions useA in this plan are not realized, then the projections will he inaccurate. This plan does not offer legal or tax advice and should be reviewed by your legal and tax adviwrs before any action is taken. Pact investment performance is not indicative o((umre investment results. Page 16 • Cash Flow Analysis From now through retirement Prepared for Bill and Judy Sample March 3, 2008 Sources of Income (Bill's Aee) 82 83 84 85 86 87 88 89 Social Security 46,351 47,742 49,174 50,649 52,169 53,734 55,346 57,006 Pension 220,723 227,345 234,165 241,190 248,426 255,879 263,555 271,462 Other Income 0 0 0 0 0 0 0 0 Mandatory IRA distribution 64,934 67,994 71,153 74,013 76,801 79,606 82,412 85,198 Taxable investments -interest 22,685 25,424 28.306 31,337 34,507 37,815 41,263 44,851 Taxable investments -principal 0 0 0 0 0 0 0 0 Appr. Securities -dividends 987 1,040 1,096 1,154 1,216 1,282 1,350 1,423 Appr. Securities -appreciation 0 0 0 0 0 0 0 0 Appr. Securities -principal 0 0 0 0 0 0 0 0 Tax-free investments 0 0 0 0 0 0 0 0 Annuities 0 0 0 0 0 0 0 0 Roth IRA 0 0 0 0 0 0 0 0 Tax-deferred investments 0 0 0 0 0 0 0 0 Total income before taxes 355,680 369,544 383,895 398,344 413,119 428,316 443,926 459,940 Federal taxes -ordinary income 59,699 62,174 64,737 67,287 69,868 72,520 75,234 78,005 Federal taxes -capital gains 0 0 0 0 0 0 0 0 State and local taxes 15,016 15,614 16,233 16,854 17,487 18,138 18 806 19 490 Total income after taxes 280,965 291,756 302,925 314,209 325,764 337,658 349,887 362,446 After tax income needed 225,503 233,395 241,564 250,019 258,770 267,827 277,200 286,902 Extraordinary income needed 0 0 0 0 0 0 0 0 Surplus/(Shortfall) 55,462 58,361 61,361 64,190 66,995 69,831 72,686 75,543 Value of investments (at year end) 1,680,400 1,735,964 ],790,997 1,845,434 1,899,121 1,951,857 2,003,433 2,053,628 Prepared by Mitch Williams, Personal Retirement Consultant, Nationwide This analysis is bated on information that you provideA. The assumptions and projections in phis plan are estimates and are meant ~o Serve solely as a guideline I(any oC the avsnmptions used in this plan ere not realized, then [he projections will be inaccurate. This plan does not offer legal or lax advice and should be reviewed by your legal and tax advisors before eny action is taken. Pam imevment perfomianee iv not indicative of furore investment rewlLs. Page 17 • • Cash Flow Analysis From now through retirement Prepared for Bill and Judy Sample March 3, 2008 Sources of Income (Bill's Adel 90 9] Social Security 58,717 47,039 Pension 279,606 287,994 Other Income 0 0 Mandatory IRA distribution 87,338 85,519 Taxable investments -interest 48,580 52,427 Taxable investments -principal 0 p Appr. Securities -dividends 1,499 1,580 Appr. Securities -appreciation 0 0 Appr. Securities -principal 0 0 Tax-free investments 0 0 Annuities 0 0 Roth IRA 0 0 Tax-deferred investments 0 0 Total income before taxes 475,739 474,558 Federal taxes -ordinary income 80,667 79,295 Federal taxes -capital gains 0 0 State and local taxes 20 159 20,076 Total income after taxes 374,913 375,187 After tax income needed 296,944 245,870 Extraordinary income needed 0 0 Surplus/(Shortfall) 77,969 129,318 Value of investments (at year end) 2,102,441 2,202,763 Prepared by Mitch Williams, Personal Retirement Consultant, Nationwide This analysis is based on information that you provided. The acsump~ions and prgec~ions' in this plan arc es'limatzs and are mean to sewc solely as a guideline. If any of the assumptions used in this plnn are not realized, then the projections will be inaccurate. This plan does not offer legal or tax advice and shoWd be reviewed by your legal and tax advisors before any action is taken. Past inve.Wmem performance is not indicative of furore invesunent resuhs. Page 18 • Re uired Minimum Distributions Prepared for Bill and Judy Sample March 3, 2008 IRA Required [RA Required Bill's Account Minimum IRA Judy's Account Minimum IRA Year Awe Value Distribution ~ Value Distribution 2029 71 771,668 29,120 70 207,444 0 2030 72 787,101 30,746 71 219,891 8,298 2031 73 801,736 32,459 72 224,289 8,761 2032 74 815,434 34,262 73 228,459 9,249 2033 75 828,042 36,159 74 232,363 9,763 2034 76 839,396 38,154 75 235,955 10,304 2035 77 849,316 40,062 76 239,191 10,872 2036 78 857,810 42,257 77 242,018 11,416 2037 79 864,486 44,333 78 244,438 12,041 2038 80 869,363 46,490 79 246,340 12,633 2039 81 872,245 48,729 80 247,730 13,248 2040 82 872,927 51,048 81 248,551 13,886 2041 83 871,192 53,447 82 248,746 14,547 2042 84 866,809 55,923 83 248,251 15,230 2043 85 859,539 58,077 84 247,002 15,936 2044 86 849,550 60,252 85 244,930 16,549 2045 87 836,656 62,437 86 242,084 17,169 2046 88 820,672 64,620 87 238,410 17,792 2047 89 801,415 66,785 88 233,855 18,414 2048 90 778,709 68,308 89 228,368 19,031 2049 90 974,922 85,519 Prepared by Mitch Williams, Personal Retirement Consultant, Nationwide This analysis is based on infonnntion that you provided. The assumptions and projections in thin plan are estimates and are meant to serve solely as a guideline. If any of the assumptions med in this plan are not realized, then the projections will be inaccurate. This plan does not offer legnl or tax advice and should be reviewed by your legal and mx ndvison before any action a taken. Pa+I invewmem performance is nol indicative of future investment results. Page 19 Nationwide Retirement Solutions On Your Side" • Fiduciary Fundamentals Executive Summary As a fiduciary, you understand the importance of safeguarding the retirement benefits of your employees. Fiduciary Fundamentals can be a refresher for you or a resource to teach members of your board or staff about these responsibilities. Oneofyourkey Inside Fiduciary Fundamentals responsibilities is to We begin with the basics. Who is a fiduciary? How do you know? monitorlegislativeand Can someone be a fiduciary without knowing it? Often, the regulatoryactions that answers boil down to who decides what within your plan. may impact how your defined contribution After helping you identify who may be fiduciary, we turn to five plonisgoverned. questions that outline the basic rules of their responsibilities: Nationwide makes 1. Act solely in the interest of plan participants and beneficiaries or the iteasy. We offer the duty ofloyalty. This means that fiduciaries may not engage in mostcurrent updates, "self-dealing" acts that serve personal or business interests. changes and revisions to regulations in 2. Maintain the plan and its assets for the exclusive purpose of monthly editions • ofthe Nationwide providing benefits, or the exclusive benefit rule. The only purpose Federal Legislative for the plan is to provide retirement benefits for participants and and Regulatory beneficiaries. Reports, found on our Web site, nrsforu.com, 3. Act with care, skill, prudence and diligence as a prudent person under the Legislative would in similar circumstances, often referred ro as the prudent /Regulatory tab. person orprudent expert rule. Investment decisions are often You haveother elevated to prudent "expert" rule when it would be considered Nationwide resources prudent to use an expert. as well, including Plan Sponsor Voice, our 4. Diversify the plan's assets ro minimize risk unless it is clearly prudent quarterlynewsletter, to do otherwise. The plan must provide suitable, diversified and your Nationwide representative, a investment choices and adequate investment education to professionalyou enable participants to make their own investment decisions to canrelyonas minimize risk. you seek to make informed decisions S. Actin accordance with the plan documents and governing aboutyourplan. instruments. Fiduciaries are responsible for ensuring the plan document and trust agreements are amended to comply with any changes in federal/state laws and applicable regulations. • Executive Summary: Nationwide Fiduciary Fundamentals for Public Sector Plan Sponsors • • What type of plan is best? In addition to Fiduciary How your defined contribution plan is structured and administered fundamentals, you can have an effect on your fiduciary role. Your decisions on may find Notionwides's how much of the administration, investments and services you 457 Guidebook retain or outsource determines the level and type of fiduciary tobeovaluable responsibilities you retain or delegate to plan providers. resource. Contact your Nationwide How do you decide what investments to offer? representative foracopy Your participants choose from a slate of investment options you make available to them. Therefore, your fiduciary role is to ensure participants have suitable choices to create along-term investment portfolio to meet their future retirement income needs. Private sector plans can potentially limit their liability for participants' investment decisions by following the requirements of ERISA 404(c). Although ERISA doesn't apply to public sector employers, 404(c) requirements offer a best practice model that may be followed, provided there are no conflicts with state laws or governing documents. You also need to provide eligible employees and participants "sufficient information" about their investment choices so they can make educated decisions about their long-term retirement portfolio. A key point to consider Although the results are important, it's the process that you follow to reach your decision that's essential in carrying out your fiduciary responsibilities. Therefore, documenting how you arrived at a conclusion or action is critical so that you can demonstrate that you had a reasonable expectation that your decision was made in the best interest of the plan and its participants at that time. This documentation can protect you against potential liability. kequestacopy o/the full Nationwide Fiduciary Fundamentals by contacting your Nationwide representative, or calling l-877-677-3678, ext. 43278. Nationwide's Web site offers a broad range of information about 457 plans and how they can benefit employers and employees. Visit it at n-sforu.com. You can request more information about how 457 plans can benefit you and your employees from your Nationwide Program Director, Account Executive or Plan Administrator. Or call 1-877-677-3678, *0 and ask to speak with a Nationwide account representative. Nationwide Retirement Solutions On Your Side' i HID6. All iigh6 iesei ved. Nationwide Reliiement SoW[lont Inc, One Nationwide Hlvd, Columbus, Oh141715. Nelionwide', On Yuw Side and the Nationwide Iramemark are federally regixeied sei vice masks of Nationwide MWUal lnauranrv Company. NNM-3II2A0 (04/06) Nationwide® Retirement Solutions On Your Side" ~ 457 Guidebook Executive Summary As a plan sponsor, one of your most important roles is to maintain the eligibility of your plan. The 457 Guidebook is a reference guide to help you clearly understand the rules that govern deferred compensation plans of public employers. Inside the 457 Guidebook We begin with 457 Plan Basics, which provides a basic overview of the requirements of eligible deferred compensation plans of government employers and the general governance structure of public sector plans. We cover what kind of employers may offer 457(b) plans, who may participate in these plans, and how the plans are governed. Nationwide prepared Federal regulations specify when and how much an eligible employee the4s7 Guidebook to can contribute to a 457(b) deferred compensation plan. The Guidebook provide plan sponsors devotes a section to the rules regarding contributions, as well as • with an easy-to-read flexibility plan sponsors are permitted when structuring their plans. We summaryofthe fully discuss maximum deferrals, coordination of deferrals with other rules and regulations thatgoverneligible qualified plans, and catch-up contributions. In addition, we explore governmental deferred the unique issues concerning employees active in or returning from compensation plans. military service, and how plans may accept sick, vacation or back pay You should consult your as contributions. Finally, the deferrals chapter reviews plan sponsor in[ernallegal counsel responsibilities concerning excess contributions and the prompt remittance and carefullyexamine yourplan document of deferral contributions to the trust or investment providers within when making a period that is reasonable for proper administration of the plan. decisions concerning the governance and Of course, Federal tax laws and regulations also dictate when participants operation ofyourplan. may receive distribution of some or all of their eligible deferred Afull-text copyofthe compensation plan account balances. This chapter of the Guidebook Section 457 regulations examines these rules and their applicability to the plan and its participants. may be found online We review when and how participants become eligible for distributions, and atwwwtreas.gov/ press/releases/reports/ the options available for those distributions. We also share information about td9075finalregs457doc. how plans may offer loans and rollovers to IRAs and other eligible retirement plans. And we discuss the rules that govern Required Minimum Distributions. • ® Executive Summary of the Nationwide 457 Guidebook • • As a result of the Small Business Job Protection Act of 1996, assets of eligible deferred compensation plans must now be held in trusts, custodial accounts or annuities for the exclusive benefit of participants and their beneficiaries. The 457 Guidebook discusses the rules that pertain to these funding options. What happens when an eligible plan is not administered in accordance with requirements? We answer that important question and outline ways plan sponsors can avoid that situation. Some topics just don't fall neatly into a category.That's where the chapter Miscellaneous Provisions of the Regulations comes in. These provisions are permissive, meaning the plan sponsor may choose to include these in their plan. However, the plan sponsor is not required to offer these to remain in compliance with federal laws as an eligible plan. They include plan-to-plan transfers, purchase of permissive service credits, qualified domestic relations orders, dollars rolled into a governmental 457(b) account, deemed IRAs, and plan terminations and frozen plans. Nationwide has incorporated additional information as exhibits in this booklet to clarify the final regulations that govern the eligible 457 deferred compensation plans of governmental employers. In addition, Nationwide offers the most current updates, changes and revisions to regulations in monthly editions of the Nationwide Federal Legislative and Regulatory Reports, found under the Legislative /Regulatory tab on our Web site, nrsforu.com. As always, plan sponsors are encouraged to closely review state and local laws that may pertain to their benefit plan and confer with their own internal legal counsel on any issues that need further clarification. Detailed information about fiduciary responsibilities regarding the 457 plan can be found in the booklet Fiduciary Fundamentals. Contact your Nationwide representative for a copy Requests copyof[he full Nationwide 467Guidebook by contacting your Nationwide represen[alive, orcalling l-877-677-3678, ext. 43178. C~ Nationwide's Web site offers a broad range of information about 4s7 plans and how they can benefit employers and employees. Visit it at nrsforu.com. You can request more information about how 457 plans can benefit you and your employees from your Nationwide Program Director, Account Executive or Plan Administrator. Or call 1-877-677-3678, *0 and ask to speak with a Nationwide account representative. Nationwide Retirement Solutions On Your Side' ~~2006. All righ6 reserved. Nationwide Retirement Solutions Inc., One Nationwide Blvd, Columbus OH 43215. Nationwide°, On Vour Side and the Nationwide framemark aie ledeially registered seNice marks of Natlonwlde Mutual Insurance Conipany_ NRM 3T IA0 (M/06) Why plan sponsors should retain participants through retirement ust a decade ago, few money managers were actively pursuing J participants' retirement assets, and rollovers from deferred compensafion plans weren't easy. Today, the inverse is true. There are plenty of product providers who'll gladly take those assets off your hands. Several tax law revisions since 2000 actually encourage rollovers out ofemployer-sponsored retirement plans. At Nationwide, we believe it is in your best interest to help your employees not only pursue asset accumulation with deferred compensation throughout their careers, but also to help them better understand how to manage their assets as they prepare for, ~nter and enjoy retirement. Getting plan participants to stay Sixty-eight percent of employer-respondents to a recent survey conducted by Ernst & Young say retaining key employees and maintaining intellectual capital were the human capital issues of most concern, yet 62%of respondents say refirements would cause a talent gap or brain drain! Public employers are not immune to this growing challenge. However, through programs encouraging pre-retirees to continue deferred compensation pa«icipation, you can open the door to other income solutions such as phased retirement, or post-retirement part-ome or seasonal work. These avenues may allow you to tap the knowledge and experience of your retirees, without adding "new employee" costs onto your budget. You can also earn employee goodwill. When you openly promote your plan's services as a way to help retiring employees prepare for the tran4tion, you show current employees tha[ they will remain valued through their careers and into retirement. Your employees need your help Today's workers are likely to live a long time in retirement At age 65, average life expectancy is 17 years for American men and 20 for women. Thirty percent of all women and almost 20% of men age 65 can expect to reach 90.E Unfortunately, medical costs for retirees over 65 not covered by Medicare may exceed 51 million for a couple over their lifetimes.' According to a recent report by The Commonwealth Fund, over the period 1980-2005 annual infla[ion in the U.S. for all items has ranged from 1.1%to 8.9%, and has averaged 33°k. For medical care, the annual average has been 6.4%.~ Yet, several targeted investments could improve the health and financial security of older adults The National Retirement Rizk Index E-. \ ~ "~` a calculation based on research ~ Y ~' conducted by the Center for v ~~' Retirement Research aT Boston ` College and underwritten by h' Nationwide, has shown that even _, If households work to age 65 and annuitize all their fnancial assets, 44 percent will be "at risk" of being unable to maintain their standard of living in retirement. And once health care is considered explicitly, the percentage of households that will be "at risk" rises from 44 percent to 61 percent.` All current workers need to invest now to overcome that risk -a major selling point for encouraging enrollment. All pre-refines need to recognize and account for that nsk as they develop their retirement- income plans. Your employees need to know you can help In its March 2006 report, the Nationwide Retirement Education Instltu[es^^ found data showing that few pre-retirees establish an income plan or are familiar with an income annuity, yet most recent retirees wish theyd had an income and distribution strategy' At the same time, they may feel besieged by enticements for rollovers or, potentially worse, more dubious op[ions for their asses. You, as plan sponsor, have already established a trusted role by providing retirement-planning services that are no[ motiva[ed by proft- You can help future retirees see how they benefit by staying in your deferred compensation plan after they leave your employment. (continued on page 3l ® Nationwide On Your Side FOR PLAN SPONSOR USE ONLY . Recent studies say workers continue to retire sooner but are working longer Employers need to prepare for shifting retirement trends If, in the next 18 months, you feel the earth move, it might not bean earthquake. Rather, it might be a stampede or, a[ least, the beginnings of one. The first wave of baby boomers are becoming eligible for early retirement benefits from the Social Security system, and if they continue the trends of the past half-century, they'll take it. Comptroller General David Walker recently told Congress that this nation's "culture of retirement" encourages people to stop working as early as possible. And once they claim retirement benefts, he said, they're discouraged from continuing to works Despite reports that the U.S. faces a shortage of millions of workers within the coming decade as baby boomers retire, The National Study of Business Strategy and Workforce Development conducted by the Boston College Center on Aging and Work found that many U.S. businesses are unprepared for changing workforce demographics? In fact, the Center for Retirement Research reported December 2006 that a recent survey found that employers believe one of four boomers won't retire because they can't.3 The March 31, 2008 edition of Newsweek says: Baby Boomers who'd expected to quit work by now discover they can't afford it 6 In a front-page above-the-fold a«icle published on April 1, 2008, The Wall StreeUournal reached similar conclusions.' The Center points out that when those workers walk out the door for the last time, they'll take with them years of experience, talent and • expertise and leave fewer new workers available to take their place. Generation X is only three-fourths as large as the boomer generation it follows. Most of the studies we've seen focus on the private sector, but the [rends do not appear to be confined to it. A recent presentation at the Marketing Meeting of the National Association of State Procurement Offcials makes clear that it expects state and local governments to do more and more with less and less as an aging workforce is retiring and not being replaced.^ So it's cleat that the evidence suggests more and more Social Security-eligible workers will retire. But will they? A recent Issue in Brief published by the Center for Retirement Research at Boston College points to a recent trend toward later retirement. The paper's author asserts that retirement ages have not only stabilized but have °apparently reversed; thanks in part to large increases in women working in late middle ages What is clear: There's a change coming Dive into the details of these studies and a couple of undercurrents become clear: 1. You may be able to stem the negative effects of a retirement exodus through creative worker programs. The Center on Aging and Work suggests that something as simple as flexible hours can make a big difference. 2. Whether they're planning [o or not, your older employees are likely to retire before they're financially ready for it. You can help them get ready by not only offering a comprehensive retirement-planning education and investment program but also strongly encourage them to participate in it. What Nationwide is doing Nationwide has developed a series of engaging, interactive retirement-education workshops that are designed [o get employees [o act on what they learn. Contact your Nationwide representative to learn how you can take advantage of [he Nationwide resources available to you and your employees. ~ Engaging ondRemining Older WOtkers, Highlighn ola GAOWmmlrom the0ffim ohheCamptroller6enerol, kbruary272007 h¢pl/www..gao.gov/newiterns/d07438sp-0df ~ US Businesses NotPreparedtorAging Worklorm, @nferforAging and Work atBosNn ColMge, March 73, 2007 httpd/agingandworkhceDu/daumenfs/NH04_NafionalSmdy_~3-07 001 pdf. ' Fmployer5urvey:lo/4Boomers WOn'l Faire Bxause they COn'C An luueln Brief, Center forRetlmmentReseorch,, Oerembef 1006,hftp.//wwwbcedu/mnrers/crrlssues/woh_6pdC Emerging lssuesin5tore GovernmenrVmmremen4 NASPO Marketlng Mcr6ng, Mazh 3-4,7007, www.amrms..mndssl/naspohxum/2007Markefing Presentatlons/finerging lqua.00r. s the Recent bend lawoNSlnrer Retlrement, An lssueln BriefCenter forRetlmmentResearrh, Mard~2007, hrrpJ/www,hcedu/maters/adissues/wo6_9.pdt c "Retlremen[Postponed,"Newsweekmversrory, Marzh JI, d00$ ht~.//www,newsweekcom/id/R8540 ~ AmeriransDelOyRetlrementAs Housing, Storks Swooq"IDe WOII Stree! lauma( April 1, 2008, htry://onlinewsl mm/arUrIe68120699498978778055 html. Three out of five households risk being financially unprepared for retirement rAW A dramatic increase in the number of working Americans who likely won't be financially prepared to retire is largely due to the escalating cost of health care, according to the most recent findings by the Center for Retirement Research (CRR) at Boston College. The National Retirement Risk Index, underwritten by Nationwide and released on Feb. 19, 2008 by the CRR, shows that 61 percent oftoday's workers are at risk for not being financially prepared to retire. The 17-point increase from the previous Index number of 44 percent demonstrates how the surging cost of health care is having a significant effect on retirement savings. Read more about Nationwide's response [o what the new Index means for plan sponsors and participants at our website, nrsforucom. 6o to www,bc.edu/centers/crd to read the CRR Issue in Brief on how [he health care costs affect the calculations supporting the National Retirement Risk Index. FOR PLAN SPONSOR USE • Does supplemental mean optional? Public employers generally consider def ned contribution programs [457, 401(k) or 403(b)I as supplemental benefits that are made available to employees to help them financially plan for their retirement future. Employers will typically have little involvement in promoting this benefit and often employees view this program as optional or nice to have but not really necessary. Although most state and local government employers provide attractive primary retirement benefits, is this really going to provide sufficient income for employees to live comfortably throughout their retirement years? The standard for how much income people will need in retirement continues to increase, with it going from 50%to 70% of working income to 80%to 100%or even more, to accommodate the changing lifestyles of retirees and the escalating cost of health care. The 2005 Retirement Confidence Surveys examined the expectations of today's workers compared to the actual needs of current retirees. This survey found that workers are expecting [o need much less income in retirement than what today's retirees state they use to support a comfortable lifestyle. . 41% of workers expect to need between 50%and 70% ofpre-retirement income in retirement, compared to only 17%of retirees who have current income needs at this level . only 13% of workers expect to need 85% to 105%or more ofpre-retirement income in retirement, while 54%...OVER HALF of retirees have income needs at this level The findings of this study demonstrate that today's employees are likely significantly underestimating their future income needs. Are employers and plan administrators really doing enough to change this misperception or are we compounding it? What Nationwide is doing • Nationwide has developed a series of engaging online resources that are designed to get employees to act on what they learn. In addition, our interactive workshops capture attention and encourage attendees to actively plan for retirement, using your deferred compensation plan. Contact your Nationwide representative to learn how you can take advantage of the Nationwide resources available to you and your employees. Together, we can help your employees discover that your "supplemental' retirement plan isn't designed to be °op[ional". r Ihe1005RetirementConfidenre5urvryis ronduaedby theEmployeeBenefirReseorzh Institute (EBRp and Mafhew Greenwald& Assaiare4lnr. andthe1005srudy wasunderwdtfen 6y Nationwide. Nationw~dehas Deen trakingtheotriNdes andbehoNOrs olAmeriran workersandrenreessime 1991. Why plan sponsors should retain participants through retirement arr~ ~r i-~~,r-<i r„->> nrrl, u You need to tell them But, as the Early Show financial adviser Ray Martin recently reported for CBS news, retiring employees need to know what advantages their employer's plan offers them, and what the trade-offs may be.e You need to tell them) As a leading provider of governmental supplemental retrement programs, Nationwide can help you with your participant retention. To get started, contact your Nationwide representative. Ali S. 4,~n9l Vvi dur vuri; Jn ~ ~$Yndn/ ~ / ~ ~w"„~[ i / ~ie~/v I ,(x/U it-tlOL r, t'iVgu ,~~~„~ ;^iUO~ r ~ i?"k( IV ,i SHi~.~,„vl .nr: Nei i. Bey 7epo, a ~';g OSII i( 7U)5 yne~riu rc i,, Aayi. ur r//f'se0r ~aRnrgr ulinlp~l s e~ap~h pr a rRiski W $pS iiUr~u~l ~~~r~e1e rn,y RePa ,uuJ ~gllSLre )mr 1L /SOtie nil res, Aaq~t ltlih VL an,ih~ eu~ [Ipal °redd.Mnr iW rns~h~ err `,..UAS Vl Slli~~ ddt T NMUII,h It i i u'(/I; iilhr 1 b ~~.,, ~ fLh IL'Nl ylll ~AJnf )r. V', i0?(ni i,J ~. and ), iNlr;,, ni[~~; Ping ~ ~°'.., ~e~~ b, vJpa ~ ~ss~Bu. ii i ~Sf9nsr4,. V7 r,i~r ~~^ h Iln ii aa. r i I ~ y~ i !'.it ~:nd ~i,m it r,s 4rlu VU , v; 11er va i;nr,'~ R~i~_ ~ ii~hti, ei t1, riM ,I~,yJ Irn I i(Ir~~~ h ))ft dr%{->>.~ ;.;Om , r. %~)', GnD 4 ~Rnu „g„ ,pik'yr 'rA tlN, d., or ,cl. /,niiResi ~°ns/18.Fiprl~ 'i'a0~ ~ c ~t( ~. ,,_. c 0 rtc SFP4 tlae Gi 4 ,ailn. Cnf Pia L , ~ vv~l4d, n, r ~ ', it i ,,;±<i ~ evs r ,.nb64 , ,.,, ~ r~ J~Gl°n, ,,,0 J,,ia Ti 'shupl FOR PLAN SPONSOR USE ONLY Do your workers really face a financial Nationwide~Retirementsolutions crisis in retirement? One Nationwide Plaza /' } ii !irn r ii iii ~nC ~ ~-~ , Jrb.;~-~ -~s .Irldrt r ic~~'r1~1in~~ PW-01-14 r I~ l; j i jl, 1 Columbus, Ohio 43215 You can hardly go a week without reading news that current workers in America have a big Neither Nationwide Retirement Solutions problem on [heir hands. They're way behind in investing for retirement and they're not doing nor any of its representatives may offer anything about it. legal or tax advice. Do the stats lead to the right conclusion? ®2008 Nationwide Retirement Solutions, A recent Wall SbeeUournal article suggests reports about personal savings rates may be less " Inc. All rights reserved. than reliable: The latest government figures show that Americans are socking away less for our futures than during any other sustained period since the Great Depression. However, a close look at how the government calculates personal saving suggests the number may be incomplete... Nationwide Retirement Solutions is the What doesn't get counted, though: the increased value of stocks or mutual funds in brokerage or public employee deferred compensation retirement accounts, or the rising value of your home"' subsidiary of Nationwide Financial Services, David Wray, president of the Profit Sharing/401k Council of America, goes even further: "We're Inc. (NYSE: NFS), the retirement savings putting away money for retirement big time, an esfimated 516.22 trillion last year (compared to and income operation of Nationwide, a 5591 trillion in 1994). What the savings figures don't easily reflect are the twin facts that more leading provider of diversified insurance and high-dollar assets are leaving the system-boomers are retiring in increasing numbers -and the financial services. effect of entry level pa«Icipa nts-a number that's growing but whose asset accumulations are just getfing started. It skews what the numbers are really telling us."r Nationwide, the Nationwide framemark, There are trends you can rely on and On Your Side® are federally registered Health care costs are rising much faster than the overall inflation rate. The biggest consumers service marks of Nationwide Mutual of health care services are seniors. The graduation of boomers to senior status means the law Insurance Company. of supply and demand is likely to heap price pressures on health care. Governments are being pressured to not only account for but also report the value of the non-pension liabilities they owe The Nationwide Retirement Education retirees. Meanwhile, recent headlines all across the country make It quite clear that taxpayers are Institute is a service mark of Nationwide • beginning to object to these costs. Mutual Insurance Company. A solution to the Social Security (and Medicare/Medicaid) crises is pending. Some combination of reduced benefits, raised age for benefits eligibility, and higher taxes on workers and retirees Contact Bob Beasley by e-mail at seems likely. BeasleR®nationwide.com with comments or ideas about this or future issues of The common thread: Future retirees are probably going to find that things cost more then than p/an Sponsor l/oice. they do now. An easy solution might be to invest more now to potentially have much more later. So, the best thing you can do is help your employees recognize that participation in deferred compensation is a more compelling solution than any other available to them. That is, be your Retirement Specialists are Registered plan's most visible, most vocal cheerleader. Representatives of Nationwide Investment Services Corporation, member FINRA. In MI Your workers might end up with too much only, Nationwide Investment Svcs. Corporation. Think about that for just a moment. If everything goes right-Social Security gets saved, pension and post-retiremen[ benefits remain well-funded, [he inflation rate slays relatively calm AND NRM-5021A0 (05/08) your employees invest more for refirementa likely outcome is they'll have more assets at their disposal when they refire than they may have expected. Yes, investing Involves risk Including possible loss of principal but that's true In every available scenario. Nationwide can offer solutions to overcome that deficit. Education programs and resources, and perhaps professional investment management services, to help your employees N8tIC11W~C~@' invest for the long-term more professionally. On Your Side What Nationwide is doing Through Nationwide-provided defined contribution plans, you can offer solutions your employees can use to invest for retirement, understand and overcome market risk, and prepare for retirement. Contact your Nationwide representative to learn how you can enhance your compensation package to help employees avoid a financial crisis in retirement. ' the Riyht Wayro Caunr Ya~r Pile o7Money the Wall Street laumal, Fehmary V,Z007 Paye Bl, wwwnrnme wsj mm/arrideiSBil/i6o9410R51169/MmL ' A0~(kiNneOmSRe~iiemem System, presvntarton to theVSCAMiAwesr NVyinnnl(anlvrenre March J$)007 Q FOR PLAN SPONSOR USE ONLY • The Nationwide Retirement Education Institute'°" • America's Retirement Voice • Nationwide® Retirement Solutions On Your Side About the Nationwide Retirement Education Institute Panel of Advisors Nationwide Retirement Solutions launched the Nationwide Retirement Education Institute (REI or the "Institute") to evaluate the degree of retirement readiness of public sector employees. The Institute's mission is to provide a credible, unbiased forum for thought leadership and research that improves the state of public secmr employees' retirement. Thank you to REI's Panel of Advisors. Their passion and support enhance the lives of both plan sponsors and public employees. The panel's collaborative energy and insight inspired this publication. Retirement Education Institute Panel of Advisors Eric Coleman, Commissioner, Oakland County CMD and 1st Vice President, National Association of Counties Cathie Eitelberg, Senior Vice President, The Segal Company Brian Graff, Executive Director, American Society of Pension Professionals and Actuaries (ASPPA) Mathew Greenwald, President, Greenwald & Associates Tricia Jakubiak, Treasurer, Orange County (CA) Fire Authority Ron Komers, Assistant County Executive Officer/Director of Human Resources, County of Riverside (CA) • Duane Meek, Senior Vice President, Nationwide Retirement Plans John Nelson, Retiremem Educator Doug Reber, Vice President, American Century Investments Julian Regan, Executive Director, New York State Deferred Compensation Board John Rekenthaler, President, Online Advice, Morningstar, Inc. Matt Riebel, President, Nationwide Retirement Solutions Catrie Tucker, Executive Director, IAFF Financial Corporation Alex Turner, Arizona Deferred Compensation Program and representative of National Association of Government Defined Contribution Administrators (NAGDCA) Robert Wagstaff, Chairman, Alabama State Employees Association Deferred Compensation Committee Mary Willett, President, Willett Consulting Strategic partners Lisa Cole, Director of Enterprise Services, National Association of Coumies Kathryn Kretschmer Weyland, Chief Operating Officer, United States Conference of Mayors Americds Retirement Voice does not reflect the views of individual REI panel members or their firms, but is a compilation of research and findings from viable industry organizations and • resources It is the hope of Nationwide and the REI that America's Retirement Voice is both comprehensive and provocative in its presentation of industry-wide research. Section 1. Executive summary Public sector overview Historically, public sector employees have counted on employer-funded benefits to provide most, if not all, of their retirement income. Today this mindset is changing as there is increasing awareness of employees' personal • responsibility for their financial needs, both now and in the future. As a result, there is a renewed effort to promote and enhance the supplemental retirement programs - 457, 403(6) and 401(k) plans - to help employees be financially ready for retirement. Personal savings is becoming even more important in the private sector since the number of defined benefit plans that are being closed and replaced with 401(k) plans is increasing. Today, pension benefits continue to play an important role in the benefits package provided to state and local government employees. But there is growing concern about their ability to be the single source of retirement income. Continuing budget pressures are causing some public entities to examine alternatives, including: • Establishing a hybrid or defined contribution plan as an option or alternative to the current defined benefit pension • Modifying the existing defined benefit plan structure by increasing the retirement age (for full benefit eligibility) or reducing benefit levels for new employees • America s Retirement Voice There are also uncertainties about public employers' ability to continue supporting retiree heahh care coverage. Employers face significant program • costs as well as new accounting rules that begin in 2007. The new rules will require disclosure of long-term retiree health care liabilities on financial statements. Reporting these liabilities could potentially raise entities' borrowing rates. As a result, more state and local government employers are exploring and/or implementing cost-saving measures such as increasing retirees' share of premiums, establishing caps on premiums paid by the employer and imposing additional limits on eligibility requirements. Due to increasing budget pressures of defined benefit plans and health care, state and local government employees will likely need to save more to meet their retiremen[ needs. This places greater emphasis on supplemental retirement plans in the public secror. As a result, employers are focusing on increasing employee plan participation by simplifying both the enrollment and investmem selection processes. An additional priority in both the public and private sectors is m help employees manage their assets and income streams throughout their retirements. © Executive summary n u • • 457 participant activity shows positive progress... Since the first America's Retirement Voice report was released in 2004, we have seen several positive trends within public sector supplememal retirement plans, s[arting with participation rates. In 2003, about 30% of employees, on average, had an account in their employer-sponsored 457 plan. In two years, this participation rate increased more than 4% to about 34% of employees. Other positive trends include: • Average account balances increased 12% and annual deferral, 8%. • The difference between the average public and private sector annual deferral is nauowing ($3>800 versus $3,956, respectively). • Improvements in diversification are dramatic as the percemage of participants investing in three or more asset classes has increased from 19% in 2000 to 39% in 2005. • Although public sector employees lean towards more conservative investments, the use of asset allocation funds is significantly increasing. This is particularly evident among younger participants (ages 18 to 35) since three in cen are choosing to invest in a lifestyle or lifecyde fund as their single investment choice, up from one in [en in 2003. ...Still work to be done While public employees are making progress with their savings, there are still concerns about their retirement readiness. While participation rates have increased over the last two years, more than 65% of employees are still not taking advantage of their 457 plans. Participants' conservative approach to asset allocation is also concerning, especially given the fact that the majority of participants have pensions that are conservatively invested. Overall, the lack of employee involvement in their deferred compensation plans suggests even greater simplification is needed, including "do-it-for-me" services such as managed accounts, asset allocation funds and automatic enrollment and increases. 1 Participants investing in three or more asset classes is up 20% from 2003 to 2005. America's Retirement Voice General attitudes and service preferences When creating education and service models to meet employees' needs, it's important to understand the attitudes and behaviors behind their financial decisions. Nationwide conducted a comprehensive consumer study of private and public senor employees that compared participants versus non-participants in their employer-sponsored retirement plans. The findings included: • Only one-quarter of all employees identified that saving for retirement is a priority goal, while four in ten participants (both public and private sector) identified retirement savings as a priority goal. • Almost half of public sector participants feel they are better prepared for retirement than most people their age, compared m four in ten private sector participants and about one-third of all employees who believe they are better prepared. More than half of all workers say they use the Internet for consumer purchases, but less than one in ten use the Internet to research or buy financial products or services. Employees who participate in ei[her a 457 or 401(k) plan are slightly more likely than non-participants to use the Internet m research financial products. The research on participant activity within the plans points to the consistent need for educational services to be provided through multiple mediums. Many participants prefer to make investment decisions face-to-face or by phone, but there is also increased use of plan web sites for both information and transactions. While participants prefer to use multiple mediums to manage their accounts, no single medium dominates (as evidenced by the statistics shared below from Figures 39, 40 and 41 of this report). For simple needs, such as changing an address, participants are more likely to contact a call center or use the plan's web site. For help with more complex questions, such as changing their account's asset allocation, face-to-face help or assistance by phone becomes more importam to participants. • Seven in ten participants prefer personal contact whether by phone or face-to-face. • Four in ten participants prefer face-ro-face contact when completing more complex service transactions, such as changing [heir account's asset allocation. Although Internet usage continues to increase each year, most online inquiries are often for informational purposes only (e.g., obtaining account balance information) and less frequently to execute transactions. • Eight in ten customer service contacts (e.g., obtaining account balance) are handled through the web. • Only three in ten participants use the web for more complex transactions (e.g., fund exchanges). Executive summary The payout phase: retirement income management For decades, the industry's focus has been on helping employees' accumulate assets. As baby boomers retire, employers and plan administrators are challenged with helping employees shift into the payout phase -managing their assets and generating income throughout [heir retirement. The traditional scenario -retiring at age 65 and collecting a pension and Social Security -isn't so simple anymore. Retirement is becoming more complex. Today's workers are planning a longer, more active lifestyle that often includes working into retirement years before entering full retirement. Potential changes to Social Security, Medicare and pension benefits also cause uncertainties. Providers servicing the public and private sector defined contribution markets are responding to this change with a variety of products and services geared to participants who are near, or in, their retiremem years. Retirement income management services are being developed m help participants understand their choices (e.g., to rollover or no[ to rollover) and how to invest and withdraw asses m ensure they last throughout their lifetime. In regard to products, immediate income annui[ies are being explored as . a desirable feature ofemployer-sponsored defined contribution plans to provide participants an option to establish a guaranteed level of income for life. Annuities outside of a retirement plan that guarantee principal, income, or both, are additional examples of solutions to help retirees receive adequate and reliable income. Products like these will continue to expand and evolve as the baby boomer generation moves inm retirement. Looking ahead Over the past few years, retirement has become the "hot topic" for policy makers, regulators and media. In Washington, lawmakers proposed several initiatives during 2005 to enhance employer-sponsored defined contribution plans and encourage workers to save for retirement. Retirement and investment issues are covered daily in magazines, newspapers and on TV, creating a new awareness among workers of the importance of adequately planning for their financial future. Although there are positive trends occurring within the 457 plans of state and local government employers, more work needs to be done ro ensure employees are prepared for their retirement years. The data and analyses within this report can be used by plan sponsors, policy makers and industry supporters to understand today's plans and participants and establish creative solutions to • improve public sector employees' retiremem readiness. America's Retirement Voice 1._~ For the latest plan sponsor information visit www.nrsforu.com The Nationwide Retirement Education InstitutesM Nationwide® Retirement Solutions On Your Side ]nsidc this issue • Washington Update ...............................................................................................................................................Below Status of Proposed Roth 457 ...........................................................................................................................Paoe 2 • IRS Sponsors First Governmental Plans Roundtable ........................................................................Paoe 5 Conclusions ................................................................................................................................................. Paae 8 • New QDIA Guidance Offers Technical Corrections and Interpretations ......................... Paae 9 • • DOL Issues FMLA Military Leave Poster ................................................................................................. Page 13 • GASB Adds Projects to 2008 Technical Plan ................................................................... .............Pape 14 • IRS Asks for Public Comment on Guidance Priority Lists ............................................. ...............Paae 15 TABLES: IRS Guidance issued and to be issued ......................................................... .............Page 16 • Tax Relief for Economic Stimulus Payments to Tax Favored Accounts .............. ............... Paae 17 1. Washin~am Upd:uc Congress continues to be focused on the economy. However, there has been some recent legislative activity chat could potential impact retirement plans. As to the outlook for any proposal to be enacted this year, it is likely that any major ]egislatiae activity will be concluded before the end of summer in consideration of a potential early recess to prepare for the November Genera] Election. Fee disclosure legrslarion On April 16, the House Education and labor Committee approved the 401(k1 Fair Disclosure for Retirement Sea~rip Act of 21107. This legislation, originally introduced in 2007 by Representative George Miller (D-CA), Chair of this Committee, passed on a straight parm-line vote with Democrats voting for and Republicans voting against this bill. This proposal only applies to private-sector defined contribution • plans subject to ERISA, not governmenta1457 plans or non-FRIBA 403(6) plans. Although this bill may NRM-5124A0 ~NNVfI•-Ri0 May 2008 Retirement Solutions rnx..sd Explanation that decisions should be based on several factors in addition to cost, such as investmcm strategics, risk, historical returns, etc. be taken up by the full House within the next few weeks, there is no similar activin~ current]}' in the Senate. The following are the three main topics covered by the 401(k) Fair Dirc%rHre for IZetirenrent Seczrnty AcC 1) Mandatory disclosures to fiduciaries ba service providers; 2) Mandatory disclosures to plan pardcipan[s; 3) Requirement to offer an index fund(s) to secure fiducian' safe harbor relief under ERISA Section 404(c). Service provider dirdocumr to fiduciarer. Service providers must make certain disclosures to plan sponsors at least ten days before a contract is entered into, which includes the following information: • Detail of services to be provided to the plan pursuant to the contract • Total annual charges for services itemized by a minimum of four categories: 1) plan administration and recordkecping costs; 2) transacrion-based charges; 3) investment management fees; 4) all other charges that are not included in #1 through #3 • Total costs as an aggregate amount for each category; if estimates are used they must be reasonable and based on the previous year's experience • All forms of direct or indirect revenue sharing arrangements with fund providers and/or an affiliated company and any other plan-related arrangements that benefit the service provider • Any personal, business or financial relationships with the plan sponsor, the plan and service providers that results in a material benefit to the senrice provider • Existence of different share classes of the plan's investment options and the basis for these differences (e.g, retail mutual funds are part of the plan, but if institutional class of shares are available, this must be disclosed to plan fiduciaries) • Prec or discounted services that are ultimately paid by participants (e.g., fee for recordkeeping is not being charged because retail mutual fund share class is used and cost included in expense ratio) Dirclorurer to jiarticipantc and Uenefcianer. Disclosures generally must be made to participants and bene£lciaries at least ten days prior to the initial investment decision and the effective date of anv change to the plan's investment options. The information must be provided in an cos}~ to understand manner (for the average participant) and include: • Description of the investment options, including name, objectives, risk, passive versus active management, explanation of diversification and where more information can be obtained. Read Bills Online To read the actual language of anp bill proposed in Congress, go to ~invw. thomas.loc >roe. Enter the bill number in the Search box. The 401 (k) Fair Disclosure Act is H.R. 3185. Plan fee comparison chart that identiEcs all fees/costs as a dollar amount or percentage of assets as follows: i Tip: Click on underlined words to go to the topic being discussed. Page 2 of 18 This information is of a general and informational nature and is NOT INTENDED TO CONSTITUTE LEGAL OR INVESTMENT ADVICE. Rather, it is provided as a means to inform you of current information about legislative, regulatory changes and other information of interest. Plan Sponsors are urged to consult their own counsel regarding this information. 1) plan administration and recordkccping costs in dollars; 2) transaction-based charges in dollars or percentage based; 3) inacstrncnt management fees in dollars; 4) all other charges that are not included in #1 through #3 (in a format to be determined by rcgr<rlation). • Plan fee comparison chart must also identify the historical return of each investment net of fees and expenses for the previous year, five years and ten years (or since inception). New fee disclosure information must also be provided on the quarterly benc9t statement provided to participants and beneficiaries. Fees must be itemized and expressed as a dollar amount or percentage (as specified for the fee comparison chart). If they are estimated, they must be based on the previous year's experience and identified as an estimate. The statement must also identif}' how to obtain the most recently updated plan fee comparison chart. Index option requirement. This legislative proposal also amends F.RISA §404(c) to require a plan that benefits from the fiduciary safe harbor rules to offer at least one index option -identified as an appropriate broad based securities market index fund sufficiently diversified to minimize risk that offers a combination of historical returns, risk and charges that is likely to meet retirement income needs at adequate levels of contribution. Ef~ectiwe date. The bill's proposed effective dart is one year after the date of enactment. Roth 457 As noted in prior reports, the farm Bill Extension Act of 2007 (H.R. 2419) included a provision [o permit Roth accounts in clig>iblc Section 457 plans. Earlier this month, the House and Senate passed an extension of last year's Farm bill that did not include the Roth 457 account langntagc, and its future is uncertain. However, because Roth 457 is aiewcd as a potential revenue generator, the provision likely will be added to other legislative proposals and potentially could be enacted yet this year or in 2009. DOL Regulatory Actn~itt~ For a more indepth discussion of the DOL's QDIA Guidance, go to a e 9. On April 29, the Employee Benefits Security Administration of the Department of Labor (DOL) released guidance and technical corrections pertaining to qualified default investment alternatives (QDIA). Picld Assistance Bulletin No. 2008-03 provides additional gtidance on the final regulations, issued in October 2007, in a questions and answers format to help employers understand and meet these new requirements. The field assistance bulletin can be found at stinvw.dol;gov/cbsa/rct>s/fa62008-3 html. The technical corrections amendment also affects three areas of the final rcgttladon on QD1As (found at ~ti>tvsv.dol.kov/cbsa/rclrs/fcdreg/notices/2008-09371 PI pd~. The corrections include changes clarifying the preamble example on "round-trip restrictions," expanding the scope of who can manage a QDIA to include a committee chat is a named fiduciary of the plan, and correcting the "grandfather" relief for stable value funds. The EBSA also released an updated pact Sheet to reflect the technical corrections. Tip: Click on underlined words to go to the topic being discussed. Page 3 of 18 This information is of a general and informational nature and is NOT INTENDED TO CONSTITUTE LEGAL OR INVESTMENT ADVICE. Rather, it is provided as a means to inform you of current information about legislative, regulatory changes and other informafion of interest. Plan Sponsors are urged to consult their own counsel regarding this information. • r ~ ~~ GRI,SA Adcisor)~ Couaci! The F:RISA Advison~ Council was formed by the Department of Labor to identify emerging health and retirement benefit issues and provide advice to the Sccretarv of Labor. Several papers have recently been released by the Advisory Council on the following topics: • Participant Benefits Statements can be found at ~~-ww.dol.gov/cbsa/publications/AC- ll 07chnnl • hiduciary Responsibilities and Revenue Sharing Practices can be found at vv><tiw.doLgoa/cbsa/publications/AG] 107b.html • Financial Literacy and the Role of Employers can be found at u~xw.dol~ov/cbsa/publications/AG7107a.html (back to beginning of this section) (backto[heTableofContents) Tip: Click on underlined words to go to the topic being discussed. Page 4 of 18 This information is of a general and informational nature and is NOT INTENDED TO CONSTITUTE LEGAL OR INVESTMENT ADVICE. Rather, it is provided as a means to inform you of current information about legislative, regulatory changes and other information of interest Plan Sponsors are urged to consult their own counsel regarding this information. • Nationwide® Federal Legislative and Regulatory Report May 2008 II. IRS Sputtsurs first Grn~crnntcutal Mans Rrntncltablc On April 22, 2008, representatives from state and local governmental retirement plans as well as the retirement plan industry attended the first Governmental Plans Roundtable, sponsored b}' the Internal Revenue Service. The IRS says the Roundtable is the first step in opening a dialogue hetween the Service and the government plans sector with the ultimate goal of creating a parmership between the IRS and the government plans communiq~. This partnership will be essential in helping the IRS develop guidance and vet compliance tools chat will ensure government plans are tax qualified and employees receive the retirement benefits they have been promised. Comp/iance Qtrestiomraire IRS representatives stressed that the Service will use a balanced approach of education and increased enforcement to promote transparency in compliance and plan governance. Later this year, the IRS will send a questionnaire to a small number of state and local government plans that will be used to learn more about government plans and how they operate and comply with federal tas laws. A more compre- hensive questionnaire will then be sent to a mix of both large and small government plans. The IRS warned that failnre to respond to an 1 RS questionnaire could result in a Conpliance Check or even a t~lsi! from the IRS. Several times, the IRS stressed the information a government plan provides on the yuestionnairc. • WiII not be used by the IRS as a Compliance Check or to target plans for future exams, and • Will not be publicly disclosed by the IRS. The information from the questionnaire will be evaluated and then used to develop education and compliance tools that will be available on the IRS website. Random Compliance Checks will then follora. Several governmental plan representatives expressed serious reservations about responding to the IRS questionnaire. They informed the IRS that answering the questionnaire could trigger public disclosure of sensitive information under ,State freedom ofiv/orrnation laws, even if the IRS does not disclose it. IRS Deterrninatiort Letters £or Govcrnmenttl Quali&ed Plans In addition to the questionnaire and enforcement topics, IRS representatives discussed the importance of its voluntary determination letter program for qualiEed retirement plans. Although qualified plans are not required to have an IRS Determination Letter, a determination letter has several advantages: 1. It assures the plan sponsor chat the plan's provisions meet the requirements of federal law. Determination letters are much like driver's licenses -they must be renewed to remain valid. To renew a prior determination letter, a plan must be resubmitted every five or six years for a new determination letter depending on whether the plan is on an individually designed document or is on an IRS pre-approved plan document, 2. It can be relied up even if plan contains an improper provision that is discovered after the determination letter is issued. 3. It permits plans to self-correct silmificant operational errors without going to the 1RS and paying a submission fee (up to $25,000) on top of the costs of correcting the compliance errors. A • Tip: Click on undedined words to go to the topic being discussed. Page 5 of 18 This information is of a general and informational nature and is NOT INTENDED TO CONSTITUTE LEGAL OR INVESTMENT ADVICE. Rather, it is provided as a means to inform you of current information about legislative, regulatory changes and other informafion of interest. Plan Sponsors are urged to consult their own counsel regarding this information. determination letter may also be required to correct non-operational errors under the EPCRS Voluntary Compliance Program (VCP). Determination Letter Sufirnissions Most governmental qualified plans are indiaidually dcsifined and may be voluntarily submitted for an IRS determination letter under Cycle C which began on February 1, 2008 and ends Januan' 31, 2009. C;ovcrnment plans on 1RS pre-approved volume subrnitter documents are on a sis-year cycle and may be submitted for a determination letter from May 1, 2008 -April 3Q, 2009. All qualified plans, including govemmental plans, must have a written plan document. A written plan document for IRS determination letter submissions: • Can be on a wonting plan document. However, a co/%etinn of state ttatr~ea acrd nnrentorandN~ur of underrtanding camtot Ge ruGmftted as a rvntten plan document. • Is no longer required to be a redlined version of current plan documents, al[hough redlined versions axe still preferred. • Mav include an attached list of the most recent amendments to the plan if the plan already has a recent determination letter. The attached amendments should include all amendments, including interim amendments made to the plan since the currcm letter was issued. Plans with longstanding document problems should be corrected under the IRS Emplo}'ec Plans Compliance Resolution System. (EPCRS). F.'PCRS EPCRS allows all plans including government plans to resolve 401 (a) qualification failures and avoid plan disqualification which could result in immecGate taxation to plan participants. EPCRS consists of three correction programs: 1. Self Correction Program (SCP) -allows plans to self correct certain insignificant and significant operational failures without going to the IRS and paving a fee to [RS. 2, l'olamtary Correction Program (VCP) - is more flexible than SCP and can be used to coxreet any qualification failure. A plan sponsor would submit qualification problems and proposed corrections in writing to IRS, pay the IRS a submission fee (up to X25,000 depending on number of employees). Plan sponsors often use VCP to request waivers from certain excise talcs such as the 50% excise tas applied to participants who do not timely receive their required minimum distributions from the plan. VCP cannot be used if the plan is under IRS audit. NO"1'P:: A list of the most common problems submitted by governmental plans under VCP may be found on the next page. 3. Audit ClocingAgreenrent Program (Audit CAP) - is the most expensive correction program under EPCRS. It resolves qualification failures found on an IRS audit and involves a closing agreement between the plan sponsor and IRS. The plan sponsor is also required to pay a negotiated sanction to the IRS. Tip: Click on underlined words to go to the topic being discussed. Page 6 of 18 This information is of a general and informational nature and is NOT INTENDED TO CONSTITUTE LEGAL OR INVESTMENT ADVICE. Rather, it is provided as a means to inform you of curtent information about legislative, regulatory changes and other information of interest. Plan Sponsors are urged to consult their awn counsel regarding this information. Fcedbacti from Rottnrltable Attendees Several governmental plan participants spoke favorably about their EPCRS experiences and its flexible approach in resolving their compliance problems. A number of participants reminded the 1RS that: There are ongoing conflicts between State and Federal laws. Fox example, benefits may have to be reduced under federal law or the plan will be disqualified even if state law forbids a reduction of benefits. All 50 states have Note impairment of contract protections that may not permit benefits to be diminished retroactively for current employees. Government plans axe caught in acatch-22. Most government plans do not have a determination letter and cannot use the SCP to correct significant compliance errors. EPCRS needs to find a wav to break this cycle. IRS representatives encouraged plans to go ahead and correct without a determination letter since correction with or without a determination letter is preferable to doing nothing. • EPCRS needs to have a different fee • schedule for government plans. Governments basically object to paying any kind of fee, regardless of amount, if these fees cannot be paid out of plan assets - which is not permitted under EPCRS. EPCRS corrections periods do not usually give government plans enough time to make needed corrections. Government plans need longer periods of time to bring their plans into compliance especially if plan amendments rcyuire lel,'slative action since there may be only a short timeframe to pass needed legislation. The IRS needs to provide more timely responses to private letter ruling (PLR) requests. Government plans, which represent thousand of employees and retirees, are large users of PLRs because many state laws require IRS approval before additions and changes can be implemented. • The most common problems submitted by governmemal plans under VCP include: • Failure to timely and correctly amend plans and adopt required interim amendments to reflect EGTTRA and IRS guidance; • Including ineligible employees or excluding eligible employees in the plan; • Failure to determine benefits in accordance with the terms of the plan; • Operating the plan as a 401(k) plan by permitting employees to make cash or elective deferrals; • Computing benefits using participant compensation in excess of required limits; • Failure of defined benefit plans to limit benefits as required under IRC 415(6); • Using defined contribution plan allocation formulas that are not definitely determinable; • Making premature distributions to participants who were not eligible for distributions; • Failure to make required minimum distributions, and • Using plan assets to fund retiree health insurance in a way that did not comply with IRC 401 (a) (2) or 401(h). Tip: Click on underlined words to go to the topic being discussed. Page 7 of 16 This information is of a general and informational nature and is NOT INTENDED TO CONSTITUTE LEGAL OR INVESTMENT ADVICE. Rather, it is provided as a means to inform you of current information about legislative, regulatory changes and other information of interest. Plan Sponsors are urged to consult their own counsel regarding this information, Conclusions The Roundtable concluded with sevecal government plan representatives strongly urging that Congress and federal regulators, including the IRS, w: • Stop comparing state and local government plans with private sector plans, and • Start treating them more like the federal retirement plans. • IRS presentation slides used during the Roundtable and additional information, including answers to qucsdons from the Roundtable, arc available on a special IRS web page devoted to government plans at www.irs.gov/retirement/artidc/(l id=18177) 00 html. F,mployers arc encouraged to visit this webpage regularly as the Service plans to update it with new information from time-to-time. (back to beginning of this section) (back to the Table of Contentsl Tip: Click on underlined words to go to the topic being discussed. Page 8 of 18 This information is of a general and informational nature and is NOT INTENDED TO CONSTITUTE LEGAL OR INVESTMENT ADVICE Rather, it is provided as a means to inform you of current information about legislative, regulatory changes and other information of interest. Plan Sponsors are urged to consult their own counsel regarding this information. • Nationwide® Federal Legislative and Regulatory Report May 2008 111. Ne~~ QDIA Guidance Ot~ters'1'echnical Corrections and Interpretations Las[ year, the Department of Labor (DOL) published a final regulation that limits an ERISA plan fiduciary's liabilit•° when investing participant contributions in qualified default investtnenc alternatives (QDIAs) for participants who have not provided investment instructions for their accounts. QDIAs are designed to encourage the investment of employee assets in investment vehicles appropriate for long- term retirement savings. The DOL recently issued additional technical corrections to the QDIA final regulation, interpretative guidance in I~icld Assistance Bulletin (hi~B, 201 08-03 and an updated QDIA fact Sheet. The technical corrections of the final QDIA regulation: Note Although ERISA does not apply to government plans, plan sponsors may want to review ERISA guidance when formulating their own investment policies. L Clarif}~ that "roundtrip restrictions" which restric[ed a participant or beneficiary from reinvesting in the QDIA within a certain timeframe would apply only if it affected a participant's or beneficiar}~'s ability to liquidate or transfer from the QDIA or invest in another im-estment alternatiae available under the plan. 2. F,xpand the scope of who can manage a QDIA to include a committee made up of primarily employees of the plan sponsor that is a named fiduciary of the plan. 3. Correct the "grandfather" relief for stable value funds, to ensure broad application of this relief. • Stable value funds are now defined as products or funds intended to preserve principal, provide a rate of return that is consistent with return earned on intermediate investment grade bonds. Stable value products or funds must be invested primarily in investment products that are backed by state or federally regulated financial institutions. These technical corrections to the final regulation apply on or after December 24, 2007. PAB 2008-3 is based on frequently asked questions about the final QDIA regulation. The following summarizes several topics addressed in the FAB. Scope oFRelie£ Relief from Fiduciary Liability If a plan sponsor that is a namedp/an fiduciary chooses to create and manage a QDIA itself, it map be relieved of liabiligr for decisions to invest all or part of a participant's or beneficiary's account in a QDIA. However, a plan sponsor would not be relieved of liability for the management of the QDIA or the prudent selection and monitoring of the QDIA. Relief Prior to the Effective Date of the QDIA Regulation The relief available under the QDIA regulation is not limited to assets invested in a QDIA on or after the effective dart of the regulation (December 24, 2007) provided the notice and other QDIA requirements are satisfied. However, relief is not available for fiduciary decisions made prior [o the effective date of the QDIA regulation, such as decisions by a fiduciary' to invest assets in a default investment. • Tip: Click on underlined words to go to the topic being discussed. Page 9 of 18 This information is of a general and informational nature and is NOT INTENDED TO CONSTITUTE LEGAL OR INVESTMENT ADVICE. Rather, it is provided as a means to inform you of current information about legislative, regulatory changes and other informaton of interest. Plan Sponsors are urged to consult their own counsel regarding this information, • Relief For Non-Elective Contributions, Litigation Proceeds And 403(b) Plan Contributions The fiduciag° relief under the QDIA regulation also applies to 403(b) plans that are subject to F.RISA and for non elective contributions, and litigation settlement provided the participant or beneficiary is given the opportunig~ to direct the investment of these contributions but fails to provide investment instructions. QDIA Notice regirirenrents Expense Information The QDIA notice should provide participants and beneficiaries with information describing: 1. T'he amount and description of any shareholder gees of fees such as sales load, sales charges, deferred sales charges, redemption fees, surrender charges, exchange fees, account fees, purchase fees, mortality and expense fees and 2. The total annual operating expenses of the investment where performance may vary, expressed as a percentage or expense ratio. The DOL is currently developing a proposed regulation that would establish disclosure requirements for participant directed plans which is expected to satisfy the QDIA expense disclosure requirements. Timing and Distribution of Notices Plan sponsors whose automatic enrollment programs are qualified automatic contribution arrangements (QACA) and/or eligible automane contribution arrangements (EACA) could, but axe not required to • combine the QDIA notice with the 1RS QACA and/or F.ACA notice(s) in a single stand-alone document. Both sets of notice could also be satisfied independently. The DOL and IRS have coordinated their efforts to provide a sample notice which may be used to help a plan sponsor satisfy these notice content requirements. QDIA notice may be delivered electronically using tither the DOL or IRS clectrortic notice roles. Currently other types of information cannot be provided electronically using either set rules. The DOL is working on a separate regulatory initiative for a broader application of electronic disclosure. Note Payment ofFees grid Expenses The final QDIA regulation provides that fora 90-day period following the first investment in a QDIA on behalf of a participant or beneficiary, any transfer or withdrawal of assets from the QDIA by a participant or beneficiary cannot be subject to any restrictions, fees, or expenses (including surrender charges, liquidation or exchange fees, redemption fees and similar expenses charged in connection with the liquidation of, or transfer from, the investment). A plan sponsor or service provider may pay these fees if they would have been assessed to withdrawals from You can download the DOL's Field Assistance Bulletin No. 2008-03 at u'tvw.dot.eov/ebsa[rees/fa62008-3.htm1 You can download the EBSA's Default Investment Alternatives Under Participant Directed Individual Account Plans at ~vwlv.dol.eov /cbsa / res_Ts / fedree/notices / 2008-09371 PLodf You can download the EBSA's Fact .S'heet from www dot gov/cbsa/newsroom/fsODIA. hcml. Tip: Click on undedined words to go to the topic being discussed. Page ig of 18 This information is of a general and informational nature and is NOT INTENDED TO CONSTITUTE LEGAL OR INVESTMENT ADVICE. Rather, it is provided as a means to inform you of current Information about legislative, regulatory changes and other information of interest Plan Sponsors are urged to consult their own counsel regarding this information. • participant or beneficiary's account during the 90-day period following the first investment in the QD1A. This FAB does not address how these payments would be treated for IRS purposes. Management tend Asset Allocation Investment Funds or Products with Zero Fixed Income as QDIAs Each of the QDIA categories requires that the investment fund product, model portfolio, or investment management service be "diversified so as to minimize the risk of large losses" and be designed to provide varying degrees of long-term appreciation and capital presen-anon through a mix of equity and fixed income exposures. Although an investment option with no fixed income component may be appropriate for certain individuals activel} directing their own investments, a QDIA should have some fixed income exposure. T,ikewise, a fund, product or service with no equity exposure cannot qualify as a QDIA. The QDIA regulation does not establish minimum fixed income or equity exposures necessary to satisfy the requirement for a mix within a QDIA. The DOL does not plan to provide further guidance on the appropriateness of a particular QDIA. More Than One QDIA within the Same Plan Nothing in the QDIA regulation limits the abiliq~ of plan sponsors to use more than one QDIEI, provided each QDIA satisfies al] reyuirements of the rcgnxlation. Plan sponsors may use two different QDIAs such as one for automatic enrollment contributions and another for rollover contributions. • 120-day Capital Preservation QDIA A plan sponsor is not required to use any of the Q da}' capital preservation QDIA. This hype of QDI the flexibility of using a capital preservation inves during the period of time when employees are mo 120-day Capital Preservation QDIA and EACA DIAs described in the regulation, including the 120- A was included in the regulation to give plan sponsors tment alternative for the investment of contributions st likely to op[ out of plan participation. The QDIA regulation permits investment in a capital preservation product fox a 120-day period following a participant's first elective contribution to an EACA. This QDIA is intended to provide administrative flexibility to plans that satisfy the EACA requirements and allow employees to make permissible withdrawals' of automatic enrollment contributions from EACAs. A plan fiduciary using the 120-day capital preservation QDIA fox the investment ofnon-EACA assets will not have fiduciary relief under the regulation. Fox example, use of [he 120-day capital preservation QDIA for a rollover from an IRA or other plan would not relieve a plan sponsor from liability under the QDIA regnilation unless the rollover was made during the 120-day period following a participant's first EACA contribution. Plan Sponsor Management of 120-day Capital Preservation QDIA Plan sponsors are not generally permitted to manage a 120-day capital preservation QDIA because the final regulation requires that the capital preservation investment fund or product must be offered by a State or federally regulated financial insrimfion. • Tip. Click on underlined words to go to the topic being discussed, Page 11 of 18 This information is of a general and informational nature and is NOT INTENDED TO CONSTITUTE LEGAL OR INVESTMENT ADVICE. Rather, it is provided as a means to inform you of current information about legislative, regulatory changes and other information of interest. Plan Sponsors are urged to consult their own counsel regarding this information. Relieflor Stab/e V afire Ftrrrds "Grandfather' Type Relief The QDIA regulation provides "grandfather"-type relief for assets invested in cettain stable value products or funds prior to the effective date of the regulation (December 24, 2007). To ensure broad application of this relief to stable ealue products and funds, the QDIA regulation has been amended to provide that relief is available for an investment product or fund designed to: • Prescn~e principal, • Provide a rate of return generally consistent with that earned on intermediate investment grade bonds, and Provide liquidity for withdrawals by participants and beneficiaries, including transfers to other investment alternatives. No fees or surrender charges can be imposed on participant or beneficiary withdrawals, and the product or fund must invest primarily in products that are issued directly or backed by State or federally regulated financial institutions. Principal and accrued interest on the product or fund may also be backed by contracts issued by such insdtudons. QDIA in£orrnation and resources Questions concerning the QDIA regulation or this guidance can be directed to the Division of Fiduciary lnterpretadons, Office of Regulations and Interpretations, at 202.693.8510. • Sample combined DOL QDLA/1RS EACA and QACA Notices www.irs.gov/pub/its-tege/sample nodce.pdf An updated QDIA fact sheer. sinvw.dol.~*ov /cbsa FAB 2008-3 www.dol.gov /cbsa / rcgs / fab2008-3. h tml Supplementary Information and Correcting Amendments to the Final QDIA Regulation wunv.dol~;ov /cbsa / regs / fedreg/notices / F;13-9371.htm (back to beginning of this section) (back to the Table of Contents) Tip'. Click on underlined words to go to the topic being discussed, Page 12 of 18 This information is of a general and informational nature and is NOT INTENDED TO CONSTITUTE LEGAL OR INVESTMENT ADVICE. Rather, it is provided as a means to inform you of current information about legislative, regulatory changes and other information of interest. Plan Sponsors are urged to consult Meir own counsel regarding this information. • Nationwide® Federal Legislative and Regulatory Report May 2008 IV. DOI. Issues FMI_.A Military Isaac Poster Every employer covered by the Family and Medical Leave Act (FMLA) is required to post and keep posted on its premises, a notice explaining the Act's provisions and providing information and procedures for filing complaints of violations of the FMLt1. The notice must be posted prominently where it can be easily seen b~ employees and job applicants. l_ I • The National Defense Authorization Act for FY 2008 (NDAA) became law earlier this year. NDAA amends the FMLA to permit a "spouse, son, daughter, parent, or next of kin" to take up to 26 workweeks of leave to care fora "member of the Armed Forces, including a member of the National Guard or Reserves, who is undergoing medical rreatment, recuperation, or therapy, is otherwise in outpatient status, or is otherwise on the temporary disability retired list, for a serious injury or illness." The DOL has prepared a workplace Military Lcavc poster which must be posted with other FMi~1 information. The Militate Leave Poster is available at www dol gov/esa/whd/fmla/NDAMmndmn[s.pdf. (back to the Table of Contents) Tip: Click on underlined words to go to the topic being discussed. Page 13 of 18 This information is of a general and informational nature and is NOT INTENDED TO CONSTITUTE LEGAL OR INVESTMENT ADVICE. Rather, it is provided as a means to inform you of current information about legislative, regulatory changes and other information of interest. Plan Sponsors are urged to consult their own counsel regarding this information. • Nationwide® Federal Legislative and Regulatory Report May 2008 • • The AICPA Omnibus project will incorporate accounting and financial reporting standards currently found in the AICPA Statements on Auditing Standards into the GASB's literature, including the GAAP hierarchy. V. GASt3 Adds Projects to 2008 Technical flan The Government Accounting Standards Board (GASH) has announced the addition of three projects to its 2008 Technical Plan: 1. Review of exirizngport enplayruentben~tr rtandardr. Under the Postcmployment Benefits Accounting and Financial Reporting project, the GASH will assess the effectiveness of its existing standards for accounting and financial reporting for postemployment benefits - focusing on a review of existing pension standards in GASH Statements No. 25, Financial Note The GASH is an independent, not-for- profit organization whose mission is to establish and improve financial accounting and reporting standards for state and local governments. IZef~ortingforD~neel Benefit Pennon Plans anel Nate Dirclorurer for D~ned ContriGution Plant, and No. 27, ll ccoun#ng for Pentionr Gy State ant! Local Governmental F.ntployesr -and consider whether improvements need to be made. 2. PuGk~c/Pnvate Partneerhpr. Through the Public/Private Partnerships project, the GASH Board will explore whether existing authoritative guidance is sufficient to address the accounting and financial reporting issues resulting from public/private partnership arrangements -such as contracting with private companies to operate or build toll roads or other major infrastructure assets - or if new standards are needed. 3. Reexamination of GASB Statement 14. The Reporting Unic Reexamination project has two main objectives. First, the GASH will consider developing generally accepted accounting principles (GAAP) for separately issued financial statements of reporting units that comprise less than a separate legal entity as defined in Statement 14. Second, the GASH will reexamine the requirements of Statement 14, as amended, to determine its effectiveness and to consider whether improvements are needed. The GASH will also address: The ARC Adjustment project will consider providing guidance that would allow the annual required contribution (ARC) adjustment to be based on actual amounts associated wi[h the amortization of past contribution deficiencies or excesses. • The Derivative Instruments Implementation Guide project will pro~'ide assistance to practitioners in applying the forthcoming derivative instruments standard. The GASB's revised 90-page 2008 Technical Plan is available at www.gasb.orl>/tech/techplan.pdf. (back to the Table of Contents) Tip: Click on undedined words toga to the topic being discussed. Page 14 of 18 This information is of a general and informational nature and is NOT INTENDED TO CONSTITUTE LEGAL OR INVESTMENT ADVICE. Rather, it is provided as a means to inform you of current information about legislative, regulatory changes and other information of interest. Plan Sponsors are urged to consult their own counsel regarding this information. Nationwide® Federal Legislative and Regulatory Report May 2008 V1. 1ftS Asks fi>r Public Culurneru on Guidance Priority lists IRS Nonce 2008-47 invites the public to comment on the items that should be included on the upcoming IRS 2008-2009 Guidance Priority List The i,ist establishes guidance the Treasury and IRS plans to issue between July 1, 2008 and June 30, 2009. In reviewing recommendations and selecting projects, the Treasury and IRS will consider whether the recommended guidance: 1. Resolves significant issues relevant to many taxpayers, 2. Promotes sound tax administration, 3. Can be drafted so that taxpayers can easily understand and apply it, 4. Can be administered by the IRS on a uniform basis, and 5. Reduces controversy and lessens the burden on taxpayers or the IRS. Although recommendations may be submitted anytime during the year, those suggested for inclusion on the original 2008-2009 Priority Guidance List should be submitted by May 37, 2008. Recommendations are not required to be submitted in any particular format but taxpayers should briefly describe the recommended guidance, why it is needed and if possible, an analysis of how the issue should be resolved. Taspaycrs suggesting multiple projects should prioritize them in terms of high, medium or low priority. Hotc to continent Written comments may be sent to: Internal Rcvcnue Service ATTN: CC:PA:LPD:PR (Notice 2008-47) Room 5203 P. O. Box 7604 Ben Franklin Station Washington, D.C 20044 Via a-mail: Notice.Commcnts(cD,irs.~ov, include Notice 2008-47 in the Subject line. (if you're reading this electronically, you may click on the link to open your e-mail software with the required address and Subject already entered.) Update o£Current Priority Guidance PI rn The Treasury and Internal Revenue Service recently updated their current Guidance Priority Plan to include additional guidance that is expected to be issued before July, 1, 2008. The following tables identify guidance that has already been issued, including the edition of this report that discusses this guidance and additional guidance projects that are expected to completed before the end of the current plan year. Tip: Click on underlined words to go to the topic being discussed. Page 15 of 18 This information is of a general and informational nature and is NOT INTENDED TO CONSTITUTE LEGAL OR INVESTMENT ADVICE. Rather, it is provided as a means to inform you of current information about legislative, regulatory changes and other information of interest. Plan Sponsors are urged to consult their own counsel regarding this information. r ~ ___ _ Guidance tha__t has been iss__ued _ Notice 2007-69 Provides transitional guidance on Normal Retirement Age. For more details, read the September 2007 edition of the Federal Legislative & Regulatory Rep_o_rt. Revenue Procedure 2007-71 Contains Mode1403(b) plan provisions for public school employees For more details, read th_e December. 2007 edition of the Federal Legislative & Regulatory Report. Proposed regulations addressing treatment of incidental health insurance benefits provided under a profit-sharing or stock bonus plan. For more details, read the Seotember. 2007 edition of the Federal Legislative & Regulatory Report. Notice 2007-62 Discusses the IRS intent to publish guidance under 457(f) For more details, read the August 2007 edition of the Federal Legislative & Regulatory Report. Notice 2007-99 Revises definition of insurance for 53000 exclusion from gross income for distributions used to pay health care premiums for public safety employees For more details, read the December. 2007 edition of the Federal Legislative & Regulatory Report. Notice 2007-67 Discusses treatment of Indian Tribal Government Plans as governmental plans For more details, read the September, 2007 edition of the Federal Legislative & Regulatory Report. Proposed regulations for on automatic enrollment -December, 2007 For more details, read the December. 2007 edition of the Federal Legislative & Regulatory Report. --- Notice 2007-89 Reporting and income tax withholding for non-qualified deferred compensation (NQDC) plans For more details, read the November. 2007 edition of the Federal Legislative & Regulatory Report. Guidance to be issued prior to July, 1, 2008 Special pay plans for governmental employees --- -- Update of EPCRS Update of model Notice 402(f) for rollover distributions Proposed regulations on required minimum distribution rules for governmental plans Proposed regulations under section 401(a)(9) on required minimum distribution rules for governmental plans, Additional Guidance on Health Savings Accounts (HSAS) The updated guidance priority list for 2007-2008 will be republished on the IRS website: wvuw.irs.)=ov~ /pub /irs-ud /2007-2008pf~,~df. (back to beginning ofthis section) (back to the Table of Contents) Tip: Click on undedined words to go to the topic being discussed. Page i6 of 18 This information is of a general and informational nature and is NOT INTENDED TO CONSTITUTE LEGAL OR INVESTMENT ADVICE, Rather, it is provided as a means to inform you of current information about legislative, regulatory changes and other information of interest. Plan Sponsors are urged to consult Neir own counsel regarding this information. Nationwide® Federal Legislative and Regulatory Report May 2008 V11. 7'ax Kclicf fitr l~:cufulmic Stimulus Payments to `l'ax-Favored Accounts Many taxpayers who had their 2007 Fedcra] income tax remrn directly deposited into a checking, saving or tax favored auount did not realize that their Economic Stimulus Payment will also directly deposited to that same account. Distributions from tax-favored accounts are subject to the taxes, rules and restrictions that apply to these accounts. IRS Announcement 2008-44 provides relief to taxpayers tvhosc Economic Stimulus Payments were directly deposited into a tax favored account such as an IRA, (individual retirement accoun[ or annuity), HSA (health savings account), Archer MSA (medical savings account), qualified coition program (or Section 529 program) or CESA (Coverdell Education Savings Account). To take advantage of this relief, a taxpayer must withdraw all or a portion of the Economic Stimulus Payment from these accounts no later than date for filing the taxpayer's 2008 Federal income tax return, plus extensions (or in the case of a CESA, the later of May 31, 2009 or the time for filing the taxpayer's 2008 income federal income tax return plus extensions). Economic Stimulus Payments that are timely withdrawn: Wil] be treated as if they had never been contributed or distributed from the tax-favored account and, Will not be subject to regular federal income tax nor w any additional tax or penalty under the Code. • Economic Stimulus Payments that are not withdrawn from tax-favored accounts will count towards the account's contribution limits and may be subject to taxes and penalties. A taxpayer who elected direct deposit for his 2007 refund into more than one account will be sent a check. Direct deposit will not be available. Because 5nancial institutions may not be able to distinguish Economic Stimulus Payment deposits and withdrawals from other deposits and withdrawals, they should report these transaction involving tax favoced accounts in the usual manner. The 1040 package fox 2008 federal income tax returns will instruct taxpayers who choose to withdraw their Economic Stimulus Payment from tas-favored accounts on how to report the withdrawal on their individual Federal income tax return and how to indicate that the amount withdrawn is not subject to taxes or penalties. (back to the Table of Contentsl Tip: Click on underlined words to go to the topic being discussed. Page 17 of 18 This information is o(a general and informational nature and is NOT INTENDED TO CONSTITUTE LEGAL OR INVESTMENT ADVICE. Rather, it is provided as a means to inform you of current information about legislative, regulatory changes and other information of interest. Plan Sponsors are urged to consult their own counsel regarding this information. Nationwide° Federal Legislative and Regulatory Report May 2008 V111. Kcci~itl~ v~atch You can ftnd the most recent information on issues affecting governmental defined contribution plans, plan sponsors and plan participants on the Employer page of our plan Web site, NRSfonx.com. In addition, we report guidance on legislative and regulatory activit}~ relevant to government sector defined contribution plans through: Plan SJionror ['nice newsletter, available online on the Hot Topics / Ncws page of NRSEoru.com. Federall zgulative and Regulatory Repnn-distributed monthly and posted on the Legislative / Regulator} tab on the Employer section of NRSEom.com. It's available online and for download. Plan SponrorAler7r published as needed to announce breaking news, and distributed by e-mail and posted in the Plan Sponsor Corner of NRSfom.com. Abfxu this rcptirt JoANN ALBRECHT, CPC, QPA, Plan Technical Consultant, our resident expert on Ics,>islative and regulatory issues, prepares this report As a leading member of the Natiomvide Legislative Task Force, she identifies how federal actions may affect your plan and its participants. Albrecht is a member of American Society of Pension Professionals and Actuaries (ASPPA), currently serving on its Government Affairs Committee, is immediate past chair of [he ASPPA Tax Exempt and Government Plans Subcomtnittee and is a member of the ASPPA Education and Examinations Committee. She is a member of the National Association of Governmental llcfincd Contribution Administrators. Albrecht was a contributor to the Aspen Publisher's 2007 edition of the "457 Answer Book." BoB BEASLEY, CRC, CIC, Communications Consultant, edits it. Beasley bangs 18 years of financial services communications experience to your plan. He helped prepare the 457 Guidebook and Fiduciary Funrlavirental, edi[ed countless newsletters and plan sponsor communications, and in 2001 authored "What }'ou should know about ehe Rconomic Growth and Tas Relief Reconciliation Act of 2001." Beasley serves on the Education and Communication Committee for the Profit Sharing / 401k Council of America and is a member of the National Association of Governmental Defined Contribution Administrators. ©2008, Nationwide Retrement Solufions, Inc. All Rights Reserved. Natlonwide Retirement Solutlons is a subsidiary of Nationwide Financial®, a publicly traded company that specializes in long-term savings and retirement products and services. Nationwide, the Nationvnde framemark, On Your Side and Nationwide Financial are federally registered service marks of Natlonwide Mutual Insurance Comoanv. This information is of a general and informational nature and is NOT INTENDED TO CONSTITUTE LEGAL OR INVESTMENT ADVICE. Rather, it is provided as a means to inform you of curent infornation abou[legislative, regulatory changes and other infornation of interest. Plan Sponsors are urged to consult ~heirown counsel regarding this information. NRM-5124A0 Nationwide® On Your Side Tip: Click on underlined words to go to the topic being discussed. Page 18 of 18 This information is of a general and informational nature and is NOT INTENDED TO CONSTITUTE LEGAL OR INVESTMENT ADVICE. Rather, it is provided as a means to inform you of current information about legislative, regulatory changes and other information of interest. Plan Sponsors are urged to consult their own counsel regarding this information. home ~ helD I D~Va~Y ® Nationwide' Retirement Solutions On /bur Side mployer~Employer~~tirement Plan Home Reports Education Sponsc Institute Voice Why O Change Role O Quick Balance ^> Online Profile r] Need Help ~ Log Off Press - -- Clarrat Acca~Bt IBfornlatioa View Printable Cony _ _ - Current accoaot balance as of: 8Q0/:006 d __ __ _ -Reports Investnneet 6prion T~ l~esf s of Uni[s •• uniu Value •• Balance > ACCOYnt $Y111mery AIY STIC TREAS PORT IC 0.02 2,850.338 51.57 54,4&5.^ AY CENr GROYVfH FND IC 0.59 18,584.185 57.28 5120,847.56 _ ~ ~ AY CENr INTL DISC IC 0.75 13,132.314 x.52 53E,285.97 AY CENT DLTRA IC 5.53 °A7,943.555 52 X09 51,1'A:087.91 :... AY CENr VALDE IC 2.07 229,107.'.A3 51.85 5424,015.85 ~- _ AY CENT VISTA FD IC 1.84 342p78.513 51.70 53P,396.25 BRWN CAP YGYi SYL CO -~~ - 7.71 154,545.274 SL48 5228,fiS?.18 FD IC ,, - DREY APPRECIATION FND 0.08 10 188.184 Sts^2 3124?A 21 iur , . ORANGE CDUNTY SHERIFF'S OFFICE PARTICIPATION 609117 8!412006 8111106 UNDER 26 ~ 4 26-35 192 1131 36-45 461 2781 4fi - 55 269 141 5fi - 65 150 50 OVER 65 35 1 Total 1,712 587 ASSETS FIXED INCOMEICASH S5,464,815.29 ( 26.43% VARIABLE I S15,214,939.71 73.57% Total ~ S20,fi79,755.00 ~ 100.00% FUND SUMMARIES • ~~ '.. GAR7'MORE INVDES AGGR SC 7118!2007 !65,368.23 037% 39 7.19% GARTMORE INVDES CONS SC 7118!2007 !48,676.04 0.23% 24 0.73% ASSET ALLOCATION FUNDS GARTMORE NiVDES MOD SC 7118!2007 558,077.13 0.28% 26 0.79% GARTMORE NiVDES MODAGGR SCI 7!182007 5270,593.87 1.01% 51 1.55% GAR7'MORE 67VDE5 MODCONS SC TM6I2001 517,43757 0.08% 20 0.61% AM CENT BiTL DISC K: 17174!7998 !38.873.79 0.19% 16 OA9% GARTMORE BFTL INDEX FUND A 51172007 !757,293.95 0.75% 77 0.52% INTERNATK)NAL STOCKS JPM ML EQUTTY FD SLCT SH 1f222oo4 1161,747.22 0.77% ~ i A6% ~I OPPGLOBALFNDCLSA 17!1417998 !397,55735 1.87% _ 84,_____ 258%! TEMP FOREIGN FND CLS A 1 6130/1994 f3aa,957A5 1.65% 69 210% BRWNCAPMGMTSMLCOFDK: 1 711!7999 f232,D28.79 1.71% 78 2.37%; DREYFUS PREM SM CAP VALU R 1!27!2005 5784,596.57 0.79% 30 0.91% SMALLtAPSTOCKS GART'MORESMALLCAPINDEXA ! 5117!2001 5768,903.94 0.87% 32 0.97%~'~, GVfT SMALL COMPANY I 1115!7998 550,436.72 0.24% 27 0.82% NEUBERGENESISFDTC 1 211412002 5528,58652 252%! 101 _ 3.07% AM CENT VISTA FD K: 71272005 5374,973.72 1.79% 175 3.50% MKIIJ~P STOCKS GARTMORE MBxAP MKi NDX A 1 51172001 ~ f148,204A9 0.70% 37 1.13% JPM MIDCAP VALUE A 1!111004 5365,147.67 1.74% ~ 2.34% • FUND BALANCES BY AGE GROUP GARTMORE NUDES AGGR SC 71162001 ~ 122,222.30 528,496.36 53,195.13 570,282.10 ~~~NNDES MODAGGR SC 711812001 52,317521 525,001.94 597,574.96 552,598.54 529,862.27i~ ASSET ALLOCATION FUNDS GARTMORENVDESMODSC 7M8f2001 13A43.30 542,105A8 5534.27 570,368.73 GARTMORENVDES MODCONS SC 7/782007 ~ 12,511.911 572,890.90 f261.50 11A67.72I~ GARTMORE NUDES CONS SC 71782007 '; 52,507.62 523,06269 (7,827.70 f20,762.78 AM CENT OiT'L qSC K: 11114/1998 ~ 578238 528,16052 59,421.70 II TEMP FOREIGN FND CLSA 8131N1994 I 510,702A8 f103,774.57 5771,404.57 556,799.97 _~ INTERNATIONAL OPP GLOBAL fND CLSA 71H417998 579.83 y16,456.99 5170,695.62 5780,887.97 , 520,247.09 STOCKS GARTMORE 8RL INDEX FUND A 51772001 ~~~ ~ 516,755.06 520,330.03 576,587.25 JPM 84TL EQUITY FD SECT SH 12211004 (18'63 ~ 52,581.93 525,578.35 f96,099.76 536,392.72 J GVIT SMALL COMPANYI 7N5f1998 517.87 52,806.64 522,159.70 573,532.34 571,512.09 BRWN CAP MGMT 561E CO FD 711N999 ~ f19,718.74 596,320.30 f97,776A0 520,666.03 SMALLCAP STOCKS GARTMORE SMALL CAP INDEX A 5117!21107 ~ 18,945.34 575,052.26 556,324.74 527,291.62 NEU BER GENESIS FD TC 1 217412002 578.79 543,563.63 5199,016.99 5222,409.74 557,840.24 • ®Nationwide" Retirement Solutions Un Your Sim ~nployer~Employer~Retirement Plan Home Reports Education Sponsc Institute Voice Why Press ~ Change Role O Quick Balance O Online Profile O Need Help ~ Log Off Reports Avaiable Ad-Hoc Employee Research Tool -Reports > Pertlcipetion Reports > Requert Curtomaad Reports Surrender Audit Report Contribution Rate Report Contribution Change Report Web Activity Report Automated Telephone Transactions (VRU) Report 4; ~ _i Web Activity Report Criteria selected: Previous Activity June , 2006 • iM.Tiolq NartltltrTOfal YsrLODsEeTOW Enrollment End 0 D Account Balance lnpuiry 215 1.91 Allocation Completetl _. _. 1 Establish Cust Profile 1 S 'Exchange Completetl 2 10 '.Deferral Increase 0 6 (Deferral Decrease 0 1 ~~Deferral Maximum 0 0 '~.Prospedus Opened D - - - _. - _ - _. _ _ 0 PrasDedus CD D - p Prospedus Paper D 0 Total Transadions 219 1dt9 Voice Response Activity Report Criteria selected: Previous Activity YYElIY~ Total Account Balance Account Balance Inpuiry Account Balance by Funtl _ __.... Current Allocation Allocation Completetl Prices - Irrvestetl Prices-Available Prices by Fund. - ---. :Establish PIN Exchange Completetl Transfer to CSR Total Transactions July , 2006 Trial , _ TerbDe~LSTalal i60 i; 0 I t 0 0 0 1 42 420 ,f ,I u Town of Southold Exhibit A Fund Offerings-Sec[ion V~uestion 3 AmCent Growth Inv 1.02 -9.55 -9.55 6.80 8.26 11.22 13.28 6/30/1971 AmCent Intl Disc Inv -3.30 -10.50 -10.50 4.09 24.63 28.39 16.06 4/4/1994 AmCent Value Inv 0.63 -6.20 -6.20 -11.56 3.75 11.55 10.73 9/1/1993 AmCent Vistalnv -1.20 -16.32 -1fi.32 8.81 11.11 17.88 10.68 11/25/1983 Amer Funds Grth Fund A LW -1.35 -7.88 -7.88 0.80 9.68 14.60 15.33 11/30/1973 Amer Funds Inc Fund A LW 0.03 -6.73 -6.73 -5.24 6.87 11.49 10.70 12/31/1970 Brown Cap Small Co Instl -1.68 -11.48 -11.48 -1.33 12.75 14.13 11.27 7/23/1992 Dreyfus Appreciation 0.74 -7.03 -7.03 0.19 626 9.75 11.81 1/18/1984 Dreyfus Prem Sm Cap Vall -0.24 -8.67 -8.67 -19.11 0.57 14.40 fi.74 4/1/1998 Dreyfus S8P 5001ndex -0.48 -9.56 -9.56 -5.51 5.3fi 10.80 9.18 1/2/1990 Federated US 2-5 Instl 0.43 4.13 4.13 11.87 6.19 4.03 7.20 2/18/1983 Fidelity Contrafund -1.56 -11.21 -11.21 4.87 11.18 15.72 13.06 5/17/1967 Fidelity Equity-Inc -1.10 -9.70 -9.70 -9.40 5.73 12.35 12.53 5/16/1966 Janus -2.13 -10.42 -10.42 0.09 6.87 10.77 13.37 2/5/1970 JPMorgan Intl Eq Idx Sel 0.41 -8.71 -8.71 -0.27 15.12 23.13 9.14 10/28/1992 JPMorgan Mid Cap Val A LW -0.99 -8.49 -8.49 -9.35 5.45 13.54 10.58 4/27/2001 Morgan Stan Ins CorFl I -3.83 -4.76 -4.76 -1.53 2.90 3.55 8.49 11/14/1984 Nationwid Inv Mod Agg Svc -0.19 -7.09 -7.09 -3.64 7.01 1Z2fi 2.78 3/31/2000 Nationwide Bond Index A LW 0.19 1.94 1.94 6.9fi 4.85 3.93 5.87 12/29/1999 Nationwide D -0.36 -9.94 -9.94 -4.13 6.09 11.40 9.95 5/31/1933 Nationwide Intl Idx A LW 0.12 -8.64 -8.64 -3.55 12.96 20.70 3.15 12/29/1999 Nationwide Inv Aggr Svc -0.29 -8.71 -8.71 -5.73 7.46 14.03 2.18 3/31/2000 Nationwide Inv Cons Svc 0.18 -0.70 -0.70 3.15 4.77 5.33 3.85 3/31/2000 Nationwide Inv Mod Cn Svc -0.07 -2.82 -2.82 0.98 5.47 7.50 3.67 3/31/2000 Nationwide Inv Mod Svc -0.11 -4.96 -4.96 -1.48 6.02 9.63 3.22 3/31/2000 Nationwide MidMkt Idx A LW -1.13 -9.03 -9.03 -7.64 6.34 14.25 6.89 12/29/1999 Nationwide S8P 500 Idx IS -0.48 -9.55 -9.55 -5.60 5.35 10.79 3.01 11/2/1998 Nationwide Sm Cp Idx A LW 0.41 -10.03 -10.03 -13.80 4.32 14.05 4.21 12/29/1999 Neuberger Ber Genesis Tr -0 46 -4.08 -4.08 11.33 12.34 18.70 14.fi4 8/26/1993 Neuberger Ber Soc Aes In -2.13 -8.64 -B.fi4 -2.82 7.17 12.64 9.82 3/16/1994 Oppenheimer Glob A LW -0 40 -10.32 -10.32 -5.93 9.55 18.54 12.47 12/22/1969 PIMCO Total Ret A LW -0.20 3.20 3.20 10.29 6.05 5.07 6.78 1/13/1997 T. Rowe Price Gr Stk Adv -L62 -12.46 -12.46 -4.27 6-98 11.32 4.18 12/31/2001 Templeton Foreign A LW -2.66 -12.30 -12.30 0.76 11.00 18.32 13.04 10/5/1982 Van Kampen Growth BIncA LW -1.74 -9.65 -9.65 -7.37 5.74 12.56 9.76 8/1/1946 Waddell&Reed Adv Hi-IncY 0 49 -2.11 -2.11 -1.56 4.64 6.86 5.81 1/4/199fi NVIT Small Co Fund I -0.25 -9.32 -9.32 -10.92 5.50 15.21 11.65 10/23/1995 Nationwide Large Growth Portfolio - -10.61 -10.fi1 -3.10` - - -3.10 4/27/2007 Nationwide Monev Mkt Prime 0.22 0.8 0.80 4.45 4.15 2.82 5.92 3/3/1980 "Rctume @om 3/?7/Ip thnxi},h i/31 /1IR • Illustrate in spreadsheet format provided, the "variable" values foi each equity type investment. PLeas'e give annualized rentrns for'yeac-to-da[e,'one vca~,'rheee yeac','6ve ceu', and 'since inception' values. Nxud~mniau<e.rhorJd be stet o(ol/admiuiatrnliue d~myra frmA leoe(e~~ieiuet Hari olGer %ee,r or charger arae~.red. Town of Southold • Exhibit B Fund Offerings-Section V,~uestion 4 Illustrate in spreadsheet format provided, u0charver includnrg loading costs, policl- fees,_succender chages, actuarial margins, asset fees, transfer charges, distribution charges, withdrawal fees, redemption fecs, commission, termination/withdrawal of contract fees-, etc., etc. Am Cent Intl Disc Inv 0.80 1.36 0.00 2.16 Am Cent Value Inv 0.80 0.99 - 0.00 1.79 AmCent Vista Inv 0.80 1.00 - 0.00 1.80 Amer Funds Grth Fund A LW 0.95 0.36 0.25 1.56 Amer Funds Inc Fund A LW 0.95 0.32 0.24 1.51 Brown Cap Small Co Instl 0.80 1.20 0.00 2.00 Dreyfus Appreciation 0.80 0.95 - 0.00 1.75 Dreyfus Prem Sm Cap Vall 0.80 1.25 0.00 2.05 Dreyfus S8P 500 Index 0.95 0.50 - 0.00 1.45 Federated US 2-5 Instl 0.95 0.59 0.00 1.54 Fidelity Contrafund 0.95 0.89 - 0.00 1.84 • Fidelity Equity-Inc 0.95 0.68 - 0.00 1.63 Janus 0.80 0.88 0.00 1.68 JPMorgan Intl Eq Idx Sel 0.80 0.93 - 0.00 1.73 JPMorgan Mid Cap Val A LW 0.80 1.01 - 0.25 2.06 Morgan Stan Ins CorFl I 0.95 0.45 - 0.00 1.40 Natianwid Inv Mod Agg Svc 0.70 0.61 - 0.25 1.56 Nationwide Bond Index A LW 0.80 0.47 - 0.25 1.52 Nationwide D 0.80 0.76 0.00 1.56 Nationwide Intl Idx A LW 0.80 0.54 0.25 1.59 Nationwide Inv Aggr Svc 0.70 0.64 0.25 1.59 Nationwide Inv Cons Svc 0.70 0.65 - 0.25 1.60 Nationwide Inv Mod Cn Svc 0.70 0.64 - 0.25 1.59 Nationwide Inv Mod Svc 0.70 0.61 - 0.25 1.56 Nationwide MidMkt Idx A LW 0.80 0.49 0.25 1.54 Nationwide S8P 5001dx IS 0.80 0.48 0.00 L28 Nationwide Sm Cp Idx A LW 0.80 0.46 - 0.25 1.51 Neuberger Ber Genesis Tr 0.80 1.12 - 0.00 1.92 Neuberger Ber Soc Res In 0.80 0.91 - 0.00 1.71 Oppenheimer Glob A LW 0.80 0.81 - 0.24 1.85 PIMCO Total Ret A LW 0.80 0.65 - 0.25 1.70 T. Rowe Price Gr Stk Adv 0.80 0.67 - 0.25 1.72 Templeton Foreign A LW 0.80 0.91 - 0.25 1.96 Van Kampen Growth 81ncA LW 0.80 0.52 - 0.25 1.57 Wadde118Reed Adv Hi-IncY 0.80 0.80 - 0.00 1.60 NVIT Small Co Fund I 0.80 1.19 0.00 1.99 Nationwide Large Growth Portfolio 0.80 0.95 0.00 1.75 Nationwide Money Mkt Prime 0.80 0.58 0.00 1.38 • "Nationwide Asset Management Fee These languages represent approximately 98.6% of all customer requests from the 6,912 languages spoken in the world today. We monitor our language requests continuously, adding or deleting languages based upon customer needs. • • Language Line sere ces Acholi Afrikaans Akan Albanian American Sign Language Amharic Arabic Armenian Assyrian Azerbaijani Azeri Bajuni Bambara Basque Behdini Belorussian Bengali Berber Bosnian Bravanese Bulgarian Burmese Cantonese Catalan Chaldean Chaochow Chamorro Chavacano Cherokee Chuukese Croatian Czech Dako[a Danish Dari Dinka Dutch Estonian Ewe Farsi Fijian Hindi Finnish Flemish French French Canadian Fukienese Fula Fulani Fuzhou Gaddang Gaelic Georgian German Gorani Greek Gujarati Haitian Creole Hakka Hakka -China Hausa Hebrew Hindi Hmong Hungarian Ibanag I bo Icelandic Igbo I locano Indonesian Italian Jakartanese Japanese Javanese Karen Kashmiri Khmer (Cambodian) Kinyarwanda Kirundi Korean Kosovan Krio Kurdish Kurmanji Lakota ©2007 Language Line Services - 11.07.07.V1 Laotian Latvian Lingala Lithuanian Luganda Lusoga Luxembourgeois Maay Macedonian Malagasy Malay Malayalam Maltese Mandarin Mandingo Mandinka Mankon Marathi Marshallese Mien Mina Mirpuri Mixteco Moldovan Mongolian Navajo Neapolitan Nepali Nigerian Pidgin English Norwegian Nuer Oromo Pahari Pampangan Pangasinan Papiamento Pashto Patois Pidgin English Polish Portuguese Portuguese Creole Punjabi Romanian Russian Samoan Serbian Shanghainese Shona Sicilian Sinhalese Sindhi Slovak Slovenian Somali Sorani Spanish Sudanese Arabic Swahili Swedish Sylhetti Szechwan Tagalog Taiwanese Tajik Tamil Telugu Thai Tibetan Tigre Tigrinya Toishanese Tongan Tshiluba Turkish Twi Ukrainian Urdu Vietnamese Visayan Welsh Wolof Yiddish Yoruba Yupik SAMPLE • Nationwide Trust Company, FSB Trust Agreement (The "Agreement") This Agreement including Exhibit A attached is made and entered into by and between ("Sponsor") and Nationwide Trust Company, FSB a division of Nationwide Bank as Trustee ("Nationwide") pursuant to the ("Plan") to establish the ("Account'). • By signing below, signatories on behalf of the Sponsor and the Plan acknowledge that they have received the Agreement, inclusive of all Schedules listed above, and agree to all terms. Further, they represent that they have the authority to enter into, on behalf of the Sponsor and the Plan, a contractual relationship with Nationwide with respect to these documents and will be subject to all rights and obligations contained therein. Printed Sponsor Name Sponsor Signature Date Acceptance Date Title Printed Name Signature Date Title Printed Name Signature Date By signing below, Nationwide has agreed to and accepted all rights and obligations contained herein. Nationwide Title • NRS (07/2007) 1of11- SAMPLE ARTICLE I -PURPOSE • The Sponsor adopts this Agreement on behalf of the Plan and represents and warrants that the Plan is intended to meet the requirements of an eligible deferred compensation plan under Section 457(b) of the Internal Revenue Code of 1986, as amended ("Code") and intends to keep such Plan in compliance with the then applicable requirements of the Code. Further, the Sponsor represents and warrants that the Employer of all individuals eligible to participate in the Plan is a state, political subdivision of a state, or an agency or instrumentality of either. ARTICLE II -DEFINITIONS Account-The trust account established herein by which Nationwide will hold the assets of the Plan or any portion thereof as agreed upon by Sponsor and Nationwide. Business Day - A day on which Nationwide and the New York Stack Exchange are both open for business. Effective Date -The date on which the Account is created by Nationwide's acceptance of cash or other assets on behalf of the Sponsor. Prior to the Effective Date, Nationwide shall have no responsibility hereunder. Employer(s)-The employer(s) of the Participants in the Plan Funding Vehicle(s) - As permitted by applicable law, may include one or more (i) Group Annuity Contracts, (ii) mutual funds, collective investment funds or other securities made available under the Agreement, (iii) securities held in self-directed brokerage accounts made • available by Nationwide, or (iv) any other investment vehicle(s) mutually acceptable to Nationwide and Sponsor via an amendment to this Agreement or separate schedule. Group Annuity Contract -Any group annuity contract issued by Nationwide Life Insurance Company, if applicable. Original Signature - An authentic, hardcopy, non-reproduced signature of the Sponsor or its designee. Participant - A person for whom benefits are provided under this Agreement, in accordance with the Plan. Plan -The Plan identified on the front page of this Agreement, including any written plan document and trust provisions. Required Format-Acceptable format for submitting information to Nationwide as prescribed by Nationwide and on transaction forms prescribed by Nationwide. Signature -Either the Original Signature or an Original Signature that has been replicated by photocopy, electronic means, or fax. Successor -The trustee or custodian appointed by the Sponsor who succeeds Nationwide Written Instruction(s) -Any notices, instructions or other instruments required to be in writing with Signature (or Original Signature, where so indicated) from Nationwide, Sponsor, or its designee. Written Instructions may take the form of a letter, electronic communication through an on-line communication system mutually agreeable to the parties; or a facsimile transmission. CJ NRS (07/2007) -2 of 11- SAMPLE • ARTICLE III-THE ACCOUNT The Sponsor advises Nationwide that the Account shall be funded as described herein. The Sponsor hereby authorizes Nationwide to take any action required to establish and maintain any Funding Vehicle(s) designated by the Sponsor under this Agreement. Nationwide has entered into arrangements with a number of providers to make available certain Funding Vehicles for possible inclusion in the Account. The assets of the Account shall consist of the Funding Vehicle(s) and any outstanding loans made under the terms of the Plan. The Account and any funds invested pursuant to this Agreement are not insured by the Federal Deposit Insurance Corporation ("FDIC"), are not deposits or other obligations of Nationwide and are not guaranteed by Nationwide. The value of the Account is subject to investment risks, including possible loss of principal. Nationwide agrees to hold and administer the Account in accordance with this Agreement. To the extent permitted by the Plan, Nationwide, at the direction of the Sponsor or its designee, shall accept an eligible rollover distribution and/or eligible direct rollover under the then applicable sections of the Code. Nationwide shall not be under any duty to require payment of any contributions to the Account, if any, or to see that any payment made to it is computed in accordance with the provisions of the Plan. Nationwide shall continue to administer the Account in accordance with this Agreement until its obligations are discharged and satisfied. No person entitled to any benefits under the Account shall have any right to assign or encumber his or her interest in any such benefits and those benefits shall not in any way be subject to the claims of his or her creditors or liable to attachment, execution, or other process of law except to the extent required by applicable law or as specifically provided for by the Plan. • The Sponsor authorizes Nationwide to commingle Plan assets, as applicable, in a master custodial account for purposes of facilitating the omnibus trading of various plan assets. ARTICLE IV-GENERAL ADMINISTRATIVE RESPONSIBILITIES OF NATIONWIDE Nationwide is authorized to take any action set forth below with respect to the Account: Accept instructions in the Required Format from the Sponsor or its designee regarding the allocation, distribution or other disposition of the assets of the Account and all matters relating thereto; Cause any portion or all of the Account to be issued, held, or registered in the individual name of Nationwide, in the name of its nominee, in an affiliated securities depository, or in such other form as may be required or permitted under applicable law (however, the records of Nationwide shall indicate the true ownership of such property); Employ such agents and counsel, including legal counsel, as Nationwide determines to be reasonably necessary to manage and protect the assets held in the Account, to handle controversies that may arise under this Agreement, or to defend itself successfully against allegations of a fiduciary breach, and to pay such agents and counsel their compensation from the Account unless such compensation is otherwise paid by the Sponsor; Commence, maintain, or defend any litigation necessary in connection with the administration of the Account, except that Nationwide shall not be obligated to do so unless it is to be indemnified to its satisfaction against all expenses and liabilities sustained or anticipated by reason thereof; Hold part or all of the Account uninvested as may be necessary or appropriate; • NRS (07/2007) -3 of 11- SAMPLE • Withhold the appropriate taxes from any distribution, remit such taxes with the relevant government authorities, and report such payments on the informational returns prescribed by such authorities, identifying itself as the payor of such distributions; Forward to the Sponsor, for exercise, all proxies solicited in regards to mutual funds and collective investment funds, if applicable; vote, on behalf of the Plan and in accordance with the instructions provided by the Sponsor, all proxies that are returned by the Sponsor; and abstain from voting proxies that are not returned by the Sponsor; and Take all other acts necessary for the proper administration of the Account. ARTICLE V -INVESTMENT RESPONSIBILITY Nationwide shall have no investment management responsibility or liability with respect to the Account or any other assets held under the Plan. Plan contributions or other assets received by Nationwide shall be allocated in accordance with Written Instructions. Nationwide does not warrant or guarantee the performance of any Funding Vehicle(s) selected by the Sponsor or Participants. The Sponsor, or other party designated under the Plan, shall have full responsibility for the selection of the Funding Vehicle(s) and the management, disposition, and investment of assets of the Account. Nationwide shall comply with Written Instructions concerning those assets, subject to restrictions, if any, imposed by the Funding Vehicle(s) and the operation of any securities markets. Except to the extent required by applicable law or otherwise provided in this Agreement, Nationwide shall have no duty to review, initiate action, or make recommendations regarding the Account or its investments. • The Sponsor is responsible for reading any and all prospectuses, specimen and final contracts, proposals and/or other materials which disclose information pertaining to applicable charges, interest rates, terms and conditions of any contract between the Plan or Account and any party, including contracts related to the Funding Vehicle(s). Nationwide shall transmit such communications to the Sponsor. Nationwide shall have no duty to respond to communications related to securities or other property held in the Account (including, but not limited to, tender offers and class action communications). Nationwide shall not be liable for any loss which results from the exercise of investment control by a Sponsor, Participant or beneficiary, or designated investment manager. If a Participant who has investment authority under the terms of the Plan fails to provide investment direction, the Sponsor shall direct the investment of the Participant's account. No one providing investment advice to the Plan, Sponsor, Participant or other party is acting as an agent of Nationwide. ARTICLE VI -LOANS To the extent permitted under the Plan and applicable law, Nationwide will forward loan disbursements as directed by the Sponsor or its designee via Written Instructions. The Sponsor, or other fiduciary of the Plan or their designee, shall be responsible for the approval and administration of any such loans. The Sponsor acknowledges that all loan obligations should be made payable to the Plan and the Plan retains all lending responsibility. Nationwide will have no responsibility for executing and holding any notes or security agreements which are held as part of the Account, providing any disclosures required by any truth-in-lending laws, or enforcing any security interest in any asset other than the Participant's account under the Account. • NRS (07/2007) -4 of 11- SAMPLE • ARTICLE VII-CONTRIBUTIONS NOT RECOVERABLE Except as described in the Purpose section of this Agreement and to the extent permitted by the Plan and applicable law, under no circumstances shall any part of the Account be recoverable by the Sponsor or be used other than for the exclusive purposes of providing benefits to Participants and their beneficiaries and paying reasonable expenses of the Plan prior to the satisfaction of all liabilities to Participants and their beneficiaries; provided, however, a contribution by a Sponsor or a Participant made as a result of a mistake of fact that is discovered within one (1) year after the contribution is made shall be returned to the Sponsor or Participant as soon as administratively feasible, if the Sponsor so requests and the Funding Vehicle(s) permits. ARTICLE VIII -ACCOUNT RECORDS AND REPORTS Nationwide shall maintain accurate records and detailed accounts of all investments, receipts, disbursements, earnings, and other transactions related to the Account, and those records shall be available at all reasonable times to the Sponsor. ARTICLE IX-FIDUCIARY RESPONSIBILITIES AND LIABILITIES Nationwide may rely upon any information provided by the Sponsor or its designee. Nationwide, the Sponsor, and all other fiduciaries under the Plan and this Agreement intend that each party shall be solely responsible for those specific duties and powers assigned to it. Each party may rely upon any direction, information, or action of another party as being proper under the Plan and this Agreement. Nationwide shall not be required by the Sponsor or its designee to engage in any action, or make any investment which constitutes a prohibited transaction or is otherwise contrary to the provisions of applicable law, the Code, or the terms of the Plan, if any, or this Agreement. • Nationwide shall be responsible only for those functions which have been assigned to it under this Agreement and shall have no responsibility to perform any duty of the Sponsor, or other fiduciary, required by the Plan or applicable law. Nationwide shall have no duty to determine the rights or benefits of any person having or claiming an interest under the Plan or this Agreement. Except as otherwise provided in the Agreement, including any schedules thereto, any action to be taken by Nationwide under the Agreement shall be taken upon Written Instruction from the Sponsor or its designee. Nationwide shall comply with such instructions and shall incur no liability for any loss which may result from any action or failure of action on its part due to its compliance with such Written Instructions. ARTICLE X-LIMITATION OF LIABILITY To the extent permitted by applicable law, Nationwide shall not be liable for any failure or delay in the performance of its obligations under this Agreement arising out of or caused, directly or indirectly, by circumstances beyond its reasonable control, including, without limitation, acts of God; earthquakes; fires; floods; wars; civil or military disturbances; sabotage; epidemics; riots; interruptions, loss or malfunction of utilities, computer (hardware or software) or communications services; accidents; labor disputes; acts of civil or military authority or government actions. ARTICLE XI -RELIANCE ON COUNSEL AND INDEMNIFICATION Nationwide may consult with, and act upon the advice of counsel (who may be counsel for the Sponsor), regarding its responsibilities under this Agreement. To the extent permitted under applicable law, the Sponsor shall indemnify and hold harmless Nationwide, its officers, employees, and agents from and against all liabilities, losses, expenses, and claims (including • reasonable attorneys' fees and costs of defense) arising as a result of: NRS (07/2007) -5 of 11- SAMPLE Acts or omissions to act with respect to the Plan or Account by persons unrelated to Nationwide; • Nationwide's action or inaction with respect to the Plan or Account resulting from reliance on the action or inaction of unrelated persons; Any violation by any unrelated person of the provisions of the Code or applicable laws, unless Nationwide commits a breach of its duties by reason of its gross negligence or willful misconduct; Any decision by the Sponsor, any Participant or any other fiduciary to acquire, retain, or dispose of any security or other property of the Account; Any violation or breach by a fiduciary or other person associated with the Plan which occurred prior to the Effective Date; or Nationwide's acts, omissions and conduct, and those of its agents, in their official capacity, except to the extent that such documented loss or expense results from negligence directly and solely attributable to Nationwide or its agents, or from an intentional violation by them of any provision of this Agreement. Such obligation to indemnify shall extend to any liability or expense that arises as a result of the inaccuracy of any representation made, any action taken or failure to act, or any violation of this Agreement, the terms of the Plan by the Sponsor, its designee, any fiduciary of the Plan, and their agents, employees and officers under this Agreement or otherwise related to the administration of the Account. Nationwide shall not be required to give any bond or other security for the faithful performance of its duties under this Agreement except to the extent required by applicable law. ARTICLE XII- NATIONWIDE'S USE OF AFFILIATED COMPANIES • Nationwide may enter into agreements and share information with its affiliates in performing responsibilities under this Agreement and any other applicable agreement. Investments made in accordance with the Agreement, may include mutual funds or other investments advised by affiliates of Nationwide. The investment advisers of such investments may be affiliates of Nationwide and may derive investment management and other fees for services provided. ARTICLE XIII- NATIONWIDE'S COMPENSATION AND EXPENSES Nationwide will be compensated for services at mutually agreed upon rates. Nationwide will receive additional reasonable compensation for any extraordinary services or computations required as agreed upon by the Sponsor and Nationwide in advance. Nationwide may withdraw amounts from the Account for its compensation, and for any expenses as described herein, unless such amounts are paid by the Sponsor within sixty (60) days after mailing of a written billing by Nationwide. Nationwide shall be entitled to receive, as compensation for services provided hereunder, any credit, interest or other earnings on aggregate cash balances held on deposit with respect to funds awaiting investment or reinvestment or with respect to funds pending distribution to offset expenses of associated activities. ARTICLE XIV -TAXES Until advised to the contrary by the Sponsor, Nationwide shall assume that the Account is exempt from federal, state, local and foreign income taxes. Nationwide shall not be responsible for filing any federal, state, local or foreign tax and informational returns relating to the Plan or Account. • Nationwide shall notify the Sponsor of any taxes levied upon or assessed against the Account. If Nationwide does not receive Written Instructions within thirty (30) days of such notification, NRS (07/2007) -6 of 11- SAMPLE Nationwide will pay the tax from the Account. If the Sponsor wishes to contest the tax • assessment, it must give appropriate Written Instructions to Nationwide within thirty (30) days of notification. Nationwide shall not be required to bring any legal actions or proceedings to contest the validity of any tax assessments unless Nationwide is to be indemnified to its satisfaction against loss or expense related to such actions or proceedings, including reasonable attorneys' fees. ARTICLE XV -AMENDMENT Notwithstanding any other provision of the Agreement, Nationwide may amend the Agreement at any time by providing written notice to the Sponsor not less than thirty (30) days prior to the effective date of such change, or at any time in the event Nationwide determines that such amendment is necessary to comply with any applicable legal or regulatory requirements. No person except for an authorized officer has the legal capacity to change this Agreement otherwise, or to bind Nationwide to other commitments not covered within this Agreement. ARTICLE XVI-RESIGNATION. REMOVAL AND TERMINATION Nationwide may resign at any time after providing at least thirty (30) days notice via Written Instructions to the Sponsor. The Sponsor may remove Nationwide by delivery of Written Instructions, to take effect at a date specified therein, which shall not be less than thirty (30) days after the delivery of such Written Instructions with Original Signature to Nationwide, unless Funding Vehicle provisions specify otherwise. Notwithstanding the foregoing, Nationwide may retain responsibilities per the terms of this Agreement over assets remaining at Nationwide beyond the thirty (30) day timeframe, concurrent with Funding Vehicle provisions. • The Agreement will be terminated at such time as the Account is terminated, the Funding Vehicle(s) are redeemed in full, upon the resignation or removal of Nationwide as custodian, as applicable, of the Account, or upon the termination by Sponsor of any separate agreement with Nationwide or its affiliate(s) that relates to the services provided by Nationwide under this Agreement. The discontinuance of contributions to the Account shall not, by itself, terminate the Account. Nationwide is authorized to reserve such sum of money as it may deem advisable for payment of its fees and expenses in connection with the settlement of the Account, and any balance of such reserve remaining after the payment of such fees and expenses shall be paid to the Successor by Nationwide. ARTICLE XVII-SUCCESSOR Upon resignation or removal of Nationwide, the Sponsor shall appoint a Successor and the Sponsor shall notify Nationwide of such appointment by Written Instructions with Signature. Nationwide shall transfer the assets of the Account, subject to any applicable fees as described in the Agreement to such Successor. If either party has given notice of termination and upon the expiration of the advance notice period no party has accepted an appointment as Successor, Nationwide will have the right to commence an action in the nature of an interpleader (or other appropriate action) and seek to deposit the assets of the Account in a court of competent jurisdiction in Franklin County, Ohio, for administration until a Successor may be appointed and accepts the transfer of the assets. The Sponsor will be responsible for any costs incurred as a result of such action and/or transfer, as well as any expenses of Nationwide which are incurred in carrying out its duties under this • Agreement in such a situation. NRS (07/2007) -7 of 11- SAMPLE ARTICLE XVIII-GOVERNING LAW • The Account will be administered in the State of Ohio, and its validity, construction, and all rights hereunder shall be governed by the Home Owners' Loan Act of 1933 and, to the extent not pre- empted, by the laws of Ohio. All contributions to the Account shall be deemed to occur in Ohio. ARTICLE XIX-IDENTITY VERIFICATION NOTICE To help the government fight the funding of terrorism and money laundering activities, Federal law requires all financial institutions to obtain, verify, and record information that identifies certain persons or entities that open an account. When an account is opened, Nationwide may ask far the name, address and other information that will allow Nationwide to identify the entity or person that sponsors the Plan. Nationwide may also ask for a copy of identifying documents, such as a driver's license, government-issued business license, or other documents. ARTICLE XX-RULES OF CONSTRUCTION The Agreement, together with all attached schedules and the Group Annuity Contracts, if applicable, shall constitute the entire Agreement. The Plan and this Agreement shall be read and construed together. By signing this Agreement, the Sponsor represents to Nationwide that the Plan conforms to and are consistent with the provisions of this Agreement. Should the Plan need to be amended to conform to the provisions of this Agreement, the Sponsor is responsible for such amendments. The terms of this Agreement shall prevail over terms of the Plan in cases of conflict. ARTICLE XXI-WAIVER • Failure of either party to insist upon strict compliance with any of the conditions of the Agreement shall not be construed as a waiver of any of such conditions, but the same shall remain in full force and effect. No waiver of any provision of the Agreement shall be deemed, or shall constitute, a waiver of any other provision, whether or not similar, nor shall any waiver constitute a continuing waiver. ARTICLE XXII-REFERENCES Unless the context clearly indicates to the contrary, a reference to a statute, regulation, document, or provision shall be construed as referring to any subsequently enacted, adopted, or re-designated statute or regulation or executed counterpart. ARTICLE XXIII - SEVERABILITY If any provision of the Agreement shall be held by a court of competent jurisdiction to be invalid, illegal, or unenforceable, the remaining provisions shall continue to be effective. • NRS (07/2007) -8 of 11- SAMPLE • Exhibit A Mutual Fund Disclosure Nationwide Retirement Solutions, Inc., offers a variety of unregistered group variable annuity contracts and mutual fund platforms (collectively referred to as "retirement products"). Those retirement products are sold exclusively in the public sector retirement markets through NRS's life insurance and trust company affiliates (collectively referred to as the "Nationwide companies") The variable accounts, trust accounts, or custodial accounts (the "Accounts") that accompany the retirement products offer investment options, and purchase and sell shares of certain mutual funds in the aggregate each day so that the performance of the investment options corresponds to the performance of those mutual funds. When the Accounts aggregate these transactions, the mutual fund does not incur the expense of processing individual transactions that it would incur if it sold its shares to the public directly. This expense is instead incurred by the Nationwide companies. The Nationwide companies also incur the distribution costs associated with selling the retirement products, which benefits the mutual funds by providing contract owners and participants with investment options that correspond to the underlying mutual funds. An investment adviser or subadviser of a mutual fund or its affiliates may provide the Nationwide companies with wholesaling services that assist in the distribution of the retirement products and may pay to participate in educational and/or marketing activities. These activities may provide the adviser or subadviser (or their affiliates) with increased exposure to persons involved in the distribution of the retirement products. • Types of Payments the Nationwide Companies Receive In light of the above, certain mutual funds or their affiliates make payments to the Nationwide companies (the "payments"). The amount of these payments is typically based on an agreed upon percentage times the amount of assets that the Accounts invest in the mutual funds. These payments may be used for any corporate purpose, which includes reducing the price of the retirement products, paying expenses that the Nationwide companies incur in promoting, marketing, and administering the retirement products, and achieving a profit. The Nationwide companies receive the following types of payments: • Mutual fund 12b-1 fees, which are deducted from mutual fund assets; • Sub-transfer agent fees or fees pursuant to administrative service plans adopted by the mutual fund, which may be deducted from mutual fund assets; and • Payments by a mutual fund's adviser or subadviser (or its affiliates). Such payments may be derived, in whole or in part, from the advisory fee that is deducted from mutual fund assets and reflected in the mutual fund charges. Furthermore, the Nationwide companies benefit when assets are invested in Nationwide's affiliated mutual funds (i.e., Nationwide Variable Insurance Trust and/or Nationwide Mutual Funds) because their affiliates also receive compensation from the mutual funds for investment advisory, administrative, transfer agency, distribution, and/or other services. Thus, the Nationwide companies may receive more revenue with respect to affiliated mutual funds than unaffiliated mutual funds. • The Nationwide companies took these anticipated payments into consideration in determining the charges they impose under the retirement products (apart from fees and expenses imposed by the NRS (07/2007) -9 of 11- SAMPLE • mutual funds). Without these payments, the Nationwide companies would have imposed higher charges on their retirement products. Amount of Payments the Nationwide Companies Receive For the year ended December 31, 2006, for public sector retirement products, the maximum payments that the Nationwide companies received from the mutual funds and their affiliates (as a percentage of the average daily net assets of the mutual funds attributable to the retirement products) and weighted average payments were: Public sector retirement 0.60% 'Excludes select public sector retirement plan assets where the Nationwide companies either do not have agreements to receive any payments from the mutual funds or do not retain payments from the mutual funds. "Weighted averages are the product of actual payments the Nationwide companies earned divided by annual average mutual fund assets (using quarter-end balances). All mutual funds available in a line of business are included when determining average mutual fund assets, regardless of whether the mutual funds or their affiliates actually made any payments to the Nationwide companies during the year, subject to the exclusion noted above. Most mutual funds or their affiliates have agreed to make payments to the Nationwide companies, • although the amount of the payment may vary from mutual fund to mutual fund. Some mutual funds may not make any payments at all. The amount of the actual payments the Nationwide companies receive is based on an agreed upon percentage times the amount of assets invested by the Accounts in the mutual funds. As such, the Nationwide companies may receive higher payments from mutual funds that pay a lower percentage than from mutual funds that pay a higher percentage because of the level of assets invested by the Accounts. Opportunities to participate in educational and/or marketing activities offered by investment advisers or subadvisers of the mutual funds or their affiliates to employees of the Nationwide companies are not taken into account in determining the amount of payments received. Identification of Mutual Funds Offered in Our Retirement Products The Nationwide companies identify a menu of potential mutual funds that correspond to the investment options for their retirement products. They may consider several criteria when identifying those mutual funds, including some or all of the following: investment objectives, investment process, investment pertormance, risk characteristics, investment capabilities, experience and resources, investment consistency, and fund expenses. In some cases, the Nationwide companies identify mutual funds based on requests and recommendations made by retirement plan sponsors and/or their advisors. Another factor the Nationwide companies consider during this process is whether the mutual fund's adviser or subadvisor is one of their affiliates or whether the mutual fund, its adviser, its subadviser(s), or an affiliate will make payments such as those described above. • You should consider all of the fees and charges of a retirement product in relation to the features and benefits of that product when making your decision to invest. The fees of the mutual funds being offered NRS (07/2007) -t0 of t t- SAMPLE as part of the overall retirement product should also be considered in your decision. Please note that • higher product and mutual fund fees and charges have a direct effect on the investment performance of your retirement savings. C~ NRS (07/2007) -tt of 11- • • _916anv Counri~ _\u oxt _luthoxity ... Dewitt Fixe District ". Lock ort, Citv of Seneca Falls, Villa e of Albion, Villa e of Dewitt, Town of Louisville, Town of Seneca, Coun - of Altamont, Villa e of Duanesbux ,Town of Lyons, Villa e of Seneca, Town of Amityville, Villa e of Dunkirk, City of Lysander, Town of Skaneateles, Town of Ashland, Town of East S ~racuse, Villa e of .Manlius, Town of Southam ton, Town of Attica, Town of Elmita, 'Down of Manlius, Villa e of Southold, Town of Auburn, City of Erin, Town of blaxion, 't'own of South ort, Town of _Avon, Villa e of Esser, County of \tinoa, Villa e of Stockbrid e EHP Babylon, Villa e of Fayetteville, Villa e of ~tondcellq V"ilia e of Stock oxt, Town of Ballston S a, Villa c of Finc, 't'own of Newbux h, Town of Sm}R•esan[, Town of Batavia Housin Auth, Cin~ of Fishers Island Ferry District Nia ra, Towv of Suffern, Villa e of Batavia, Town of Forestbuc h, Town of Niskawna Fire Dist #1 Sullivan, County of Beacon, Citv of Gallatin, Town of Nox[h Hem stead EHP Thom son,'1'own of Bethlehem, Town of Genesee/Pin er Lakes Re .Plan NP assoc. of Counties Tio a, County of S Flats, Town of Geneseo, A"ilia e of O densbur Brid e & Porc .Authority Union, Town of Bin hamton, City of Geneva Ilousin Authority Oneida, Counri~ of Utica Housin Authoxih' EHP Bxi hton Fixe District Geneva, City of Oneida-Herkimer Solid \l'aste Parick, Town of Bristol, Town of Getman Flatts, Town of Onovda a C ~ \C'ater Auth. Walworth, 1`own of Brock ory Villa e of Ghent, Tovm of Ononda a, County of W'ashin ton, Counri' of Broome Community Colle e Goxham,'1'own of Ontario, 't'own of \ti'aterloo, Town of Busti, Town of Green ott, Town of Orleans, County of Waterloo, Villa e of Butternuts, Town of Henrietta Fire District Owe o, Town of \Y'atervliet Ilousin Authority Camillus, Town of Henrietta, Town of Palmyra, Town of \Y'atervliet, Cin~ of Canandai a, Town of f lonco -c Falls Pavilion, lbwn of \\'aw•arsut ,Town of Canton, Town of Hoosick Falls, Villa e of Pembroke, Town of \Y~'avne, Coun ° of Ca v a, Coun ~ of Ho ewell, Town of Pendleton, Town of \Y~'ellsbur , \"ilia e of Cicero, Town of Hudson, City of Pioneer Libra ~ System \Pest Bloomfield, Towv of City of Dunkirk Housin Authorip~ Incor. Villa e of Belle Texxe Pittsford Fixe District \Y~'illiamson, "Town of Cin• of Lock ort Ilousin Authority Incor. Villa of Sands Point Pittsford, Town of Williamsville Central Schools EHP Clay, Town of Incor Villa e of Garden City Rensselaer, Counp~ of \x'ilmin ton, Town of Cohoes Housin Authori - Ithaca, Town of Salamanca, Cih of Wilton Water & Sewer _\uthoriro Columbia, Counev of Larchmont, Villa e of Salina, 'Town of Wilton, Town of Cortland, County of Liberty, Town of Schenectady, Ciri- of Pates, Coun ~ of Ctv of \Ionxoe Industrial Dev. A enc ~ Livin ston, County of Scotia, Villa e of Delaware, County of Livonia,'t'own of Seneca C ~ Soil & \C'atex Cons Dist BCG Benefit Consultants Group ~e ~a BENEFIT CONSULTANTS GROUP REQUEST FOR PROPOSAL Gcns°1t~D~ c3~ ,~ ~,. ~~ d5~ REQUESTED BY: Town of Southold DATE OF SUBMISSION: 05/30/08 BCG Benefit Consultants Group lJ May 30, 2008 Ms. Elizabeth A. Neville Town Clerk Town of Southold 53095 Route 25 Southold, New York 11971-0959 Dear Ms. Neville: The attached response to Request for Proposal is submitted for your consideration. This response is submitted as requested by Financial Advisor, Rudy Bruer, of Moore & • Cabot Financial Advisors. Also, Mr. Rudy Bruer has been assisted by William Schories of Oppenheimer Funds. In submitting this response, BCG is committed to provide Recordkeeping Services For the Town of Southold. This response is in compliance with the pertinent Regulations and the Model Plan. Please feel free to contact me for any clazification and assistance. Respectfully submitted, 2z ~~ Mitchell A. Kleinman, CPP Senior Implementation Specialist Phone - 856-368-7210 Email- mklci~maminc~ghrnclt~ ci~m MAK:dc • PO Box 405 • Riverton. N,1 '8i'7l~ ;~~5 • £3S4>-368-2000 • Fax 856-824-1890 • www.bcghF;nefits com Town of Southold ~~Request far Proposal" Section 457 Deferred. Compensation Plan Apri130, 2008 C~ Response to Request for Proposal Deferred Compensation Enclosed Prepared by: Benefit Consultants Group osizaizoos A Deferred Compensation Proposal for the Town of Southold TABLE pF CQNTENTS Submission ofProposals -Procedures..... DUE DATE FORM AND SUBSTANCE > EVALUATTON CRITERIA SELECTION PROCESS TERM OF CONTRACT SECTIONI - Cantraetual Reauirements ...................................................... SPECIFICATIONS OF THE REGULATIONS SPECIFICATIONS OF THE MODEL PLAN SECTION II -Trustee Services .................................................................. REQUESTED INFORMATION SECTION III -Administrative Service AQency/Financial Organization ................. • > COMPANY BACKGROUND SECTION IV -Services ......................................................................... . MARKETING AND ENROLLMENT SERVICES > ADMINISTRATNE SERVICES RECORDKEEPING SYSTEM SECTION V-Investments ......................................................................... > FUND OFFERINGS INVESTMENT FLEXIBILITY SECTION VI -Conversion Services ........................................................... EXPERIENCE PROCESS Exhibits ...............................................................................EXHIBIT A INVESTMENT PERFORMANCE EXHIBIT B FEE SCHEDULE • 05/28/2008 2 A Deferred Compensation Proposal for [he Town ofSoutho[d • Procedures Governing Submission of Proposals The purpose of the proposed deferred compensation plan will be to provide eligible employees with a convenient way to provide for along-term retirement program and to encourage broad-based participation of employees in the plan. We do not want to imply that any specified amount of contributions will be made, but we do want to assure that this additional benefit is recognized by all employees, that they have the opportunity to receive one-on-one counseling and voluntarily participate. The plan is intended to qualify as an "eligible deferred compensation plan" under Section 457 ("Section 457") of the Internal Revenue Code of 1986 ("Code"), as now in effect or hereinafter amended. To become an "eligible deferred compensation plan" in the State of New York, you must meet the requirements of the "Rules and Regulafions" [Parts 9000 to 9006 of Subtitle II of Title 9 NYCRR ("Subtitle IP')] (the "Regulations") promulgated by the New York State Deferred Compensation Board (the "Board") pursuant to the authority granted by the State Finance Law, Article 2, Section 5. This document constitutes a request from qualified Administrative Service Agencies and/or Financial Organizations relating to (1) trust service, (2) administration and/or (3) funding of an "eligible deferred compensation plan". If you are "qualified" according to the Regulations to administer, maintain records and accounts of plans and/or if you have appropriate trust services and~or products available for use as funding media anti are interested in making those services and/or products available, you are requested • to complete this invitation for proposal. Due Date To receive consideration, all proposals: - Must submit seven 7 copies of the proposal by first-class or overnight delivery service to arrive no later than 4:00 a.m., on Fridav. May 30, 2008. Send to: Elizabeth A. Neville. Town Clerk Town of Southold 53095 Route 25 PO Box 1179 Southold NY 11971-0959 - Must display the following identification on the outside lower left-hand comer: RESPONSE TO REQUEST FOR PROPOSAL DEFERRED COMPENSATION ENCLOSED • 05/28/2008 A Deferred Compensation Proposal for the Town of Southold • Form and Substance Attached you will find: the "Rules and Regulations" (effective June 21, 2006), hereafter referred to as the "Regulations", and the Model Plan (including amendments through December 7, 2007) promulgated by the Board for which you are to rely on for responding to this invitation for proposal. Failure to conform to or satisfy any requirement of these documents will result in the immediate rejection of the proposal. - Must include a fully completed questionnaire, restating each statement or question in Section I through Section V inclusive, and by recording your response directly below each statement or question. - Must respond to all questions in the "Contractual Requirements" section (Section I) and must conform to the specifications set forth in this Request For Proposal ("RFP"). If recordkeeping services are provided by a "person" (defined by Regulations) that is neither the parent nor subsidiary company of the Financial Organization, then separate and complete responses must be received by each company. - Must include a transmittal letter on the Company's official letterhead signed by an official of the Company who is authorized to commit the organization to perform the services outlined in the submitted proposal: you must indicate such commitment. The transmittal letter must contain a representation that the proposal complies with all requirements of the Regulations and the Model Plan. • It is each bidder's responsibility to assure that proposals are shipped in a timely fashion so as to be received by the designated party on or before the due date. Proposals received after the specified date will not be considered. We accept no responsibility for lost and/or late delivery of proposals. By submitting a proposal, each bidder agrees not to make any claims for or have any right to damages because of any misunderstanding or misrepresentation of specifications, because of any misinformation or lack of information or because such bidder is not selected to provide the services proposed. Submission also indicates acceptance of the conditions contained in the Request For Proposal, unless clearly and specifically noted otherwise in the response. All costs for developing proposals are entirely the responsibility of the bidder. • 05/28/2008 A Deferred Compe~uation Pra~osal for the Town of.Southold • Evaluation Criteria In selecting, we will use criteria which comply with the requirements of the Regulations, including Section 9003.3(x)(1 through 7) of the Regulations. All qualified proposals, sought in conjunction with the requirements of Section 9003.2 of the Regulations, will be evaluated and awards made to the bidder or bidders whose bid is determined to be in the best interest of the plan participants. Selection Process Section 9001.2(b) of the Regulations, recognizes that we have appointed a committee to act on our behalf, to the extent permitted or required by the Regulations and by the Model Plan. Secfion 9003.3(c): before any contract or agreement entered into by the committee may become effective, the committee must submit in writing, to the President of the New York State Civil Service Commission ("the President"), the name of such selected bidder(s) and a "certification' signed by the chief executive officer and chief legal officer stating that such bidder(s) has been duly selected to provide services in accordance with provisions of the Regulations. Contracts or agreements cannot be awarded before the expiration of ninety (90) days from date of our announcement publication in the State Register and local paper. • Invitations may be made for oral presentations. Any award of a contract or agreement as a result of this invitation will be made by written notification. We reserve the right to reject any or all proposals or parts thereof. We reserve the right to establish a deferred compensation plan by any of the methods prescribed by Section 9001.2(x) of the Regulations. Term. of Contract Pursuant to Section 9003.5(a) of the Regulations, we expect to enter into a written contractual arrangement(s) of up to five (5J years in duration. All contracts and agreements entered into shall impose no penalties or surrender charges for the transfer of assets or responsibilifies on expiration of the contract or agreement. Upon the expiration or termination of any contract(s) or agreement(s), the committee shall follow procedures set forth in the Regulations in Part 9003 for awarding new contracts and entering into new agreements. • 05/28/2008 A Deferred Compensation ProDOSaI for the Town of Southold SECTION I. CONTRACTUAL REQUIREMENTS 'i "Agee" or "Disarree"must be indicated for each of the following specifications. The following specifications can be found in either the Regulations or the Model Plan, all of which should have been enclosed as attachments. Please include reasons for any rejection or disagreement of any specification and alternative options, if applicable. There should be neither elaboration nor qualification for "agree" unless otherwise requested. Specifications of the Rel;ulations 1. Section 9000.2(6)(4)- As a Financial Organization authorized to do business (provide investment products) in New York State, you agree that your firm is one of the following: (a) a Registered Investment Advisor, (b) a Bank or (c) an Insurance Company qualified under the laws of mare than one state. We are not a Financial Organization. If you are an Insurance Company acting through a subsidiary in New York State, then the Subsidiary Insurance Company must certify that it (the Subsidiary Insurance Company) is qualified to do business under the laws of more than one state. • 2. Sectiou 9001.2(6) - We have appointed a deferred compensation committee to act on our behalf and you agree to interface with this committee. Additionally, we may decide to be the grantor of our own trust, then you also agree to interface with the trust and trustee: all funding contracts, ojwhateve~ nature, will be "issued to, owned and retained by the trustee". BCG agrees to Question 1. 3. Section 9001.4(a) through (d) -You agree to abide by all four (4) provisions, especially not allowing annuity type payouts. BCG agrecs to Question 3. 4. Section 9002.2(a)(5) -You will provide evidence that bonds and insurance Gave been secured by you pursuant to the Regulations. BCG agrees to Question I. S. Section 9002.2(a)(ti) -You will acknowledge in writing that you wiU ad as a fuiuciary under Section 457(8) of the Code and under State and common trust law principles with respect to all trusteeship, administrative, or investment matters for which you assume responsibility. Additionally, you agree M indemnify our Plan as a result ojany cause ojochon brought against it as a result ojacts or omissions together with the reasonable costs ojlitigation arising therefrom • BCG agrees to Question S. 05/28/2008 A Deferred Compensation Proposal for the Town ofSoutho[d • 6. Section 90033(a) -Your proposal shall be in writing and contain a rearesentation that the proposal complies with all requirements of the Regulations and clearty indicate all direct fees, indirect fees and charges. BCG agrees to Question 6. 7, Section 9003.5(c) -All contracts and/or agreements shall be in writing, shall be awarded on the basis of a competitive bid, and shall not ezceed five (5) years in duration, and shall impose no penallies or surrender charges for the transfer ojany asset(s) or responsibilities on expiration ojthe contract or agreement BCG agrees to Question 7. 8. Section 9003.5(b) -You will not permit any other Trustee, Administrative Service Agency, Financial Organization, independent consultant or person to provide services in respect to the Model Plan we Gave adopted. Disagrees BCG will permit other organizations to provide services with your prior approval 9. Section 9003.7 -You will not permit an investment of any amount, in any annuity contract providing for a term which could ezceed five (~ years or which is measured by one ar more natural lives or any • life insurance or other contract providing traditional death benefits. BCG agrees to Question 9. 10. Section 9004.1 - A-1 information obtained by your position will remain rnnfidential and you will neither solicit nor provide products other than deferred compensation. BCG agrecs to Question 10. 11. Section 90053 -Statements to participants will be provided at least quarterly, even in situations where no contributions are being made but funds are on deposit. You also agree to provide, at least annually, an additional statement to participants disclosing all fees and expenses paid out of or charged against plan assets. BCG agrees to Question Il, 12. Section 9005.4 -Agree to satisfy the bonding and insurance requirements of this Section and provide evidence of such. BCG agrees to Qucstion l2 13. Section 9006.2 -You agree to include in vour contracts and agreements a provision that the rnnrracts and agreements arc subject to the Regulations and the Model Plan and tkat sueh Reputations and the Model • Plan are made Hart thereof. BCG agrees to Question l3. 05/28/2008 A Deferred Compensation Proposal for the Town of Southold • S ecifications ofthe Model Plan 1. Section 3.2(a) -The Model Plan requires a minimum deferral amount to be $260 for any plan year. Your proposal will state this minimum requirement wherever requested. BCG agrees to Question 1. 2. Section 4.1 -You acknowledge that the amounts of compensation deferred by the participants will be invested, according to the participant's investment directions, no later than two (2) business days following receipt thereof, in the appropriate investment funds. BCG agrees to Question 2. 3. Section 4.7(a) -The entire value of each participant's account, including any annuities will be set aside and held by the trustee, in trust, and that your wntracts and agreements will recognize and reflect such. BCG agrees to Question 3. • • 05/28/2008 A Deferred Compensation Proooral Ior the Town o Southold C~ SECTION II TRiISTEE SERVICES NOTE: You may skin this section entirely if you are not a Financial Organization bidding to become Trustee. You do not need to rnpy any of the questions. Move to next applicable Section. Section 9002.1(a) of the Regulations states that assets must be held by one or more trustees pursuant to one or more trust agreements. Such agreements must satisfy all the requirements of Section 9002.1(6). Section 9002.1(6) also indicates who may be trustee. We reserve the right to create our own trust as provided by this Section 9002. I (b) but desire to explore the alternative of a Financial Organization acting as tntstee. Please respond to each of the following statements if you desire to be considered as trnstee. If any statement does not apply, please indicate so by responding: "Not Applicable ". We have skipped this Section as we are a Third Party Administrator and not a Finaneia! Organization bidding. Re ueq sted Information A. The name of your firm, address, name of primary contact person and telephone number. B. Whether your firm has provided trust services to any New York State municipality for their Code Section 457(6) deferred compensation plan. List names of all such municipalities. • C. Description of trust services you would provide acting as a Financial Organization rendering only trust services. Please specify all fees, expenses, charges and rnsts for the trustee services. Please provide disclosure of any compensation structure. D. If you are selected as the Financial Organization acting as our trustee and desire to additionally respond to performing the duties of an Administrative Service Agency, as described in Sections 9000.2(6)(1) and 9002.1(6)(4) of the Regulations, please indicate your intention here. If you respond affirmatively, then it will be necessary for you to complete the questions in Sections III and IV addressed to the Administrative Service Agency bidder. However, in addition to stating your intention to bid, it is requested that you indicate here the effect this will have on any fees, expenses, charges and costs as distinguished from those previously stated in this Section. E. The trustee will also be requested to acknowledge in writing that it is a fiduciary with respect to all administrative or investment matters for which it has assumed responsibility as outlined in Section 9002.2(a)(6) and 9003.6 of the Regulations. F. Referring to Section 9005.4 of the Regulations, describe the type of bond and its limits that you will be furnishing. Include "cost disclosure" if it is your intention for us to satisfy any part of this obligation. G. Do you intend to supply us with a sample trust agreement for our consideration? If so, do you attest that this agreement meets all of the requirements applicable to trusts as stated is Section 9002.1(6) of the Regulations and Section 457(8) of the Code. C 1 05/28/2008 A Deferred Compensation Prooosal for the Town of Southold SECTION III. ADMINISTRATIVE SERVICE AGENCY'/ FINANCIAL ORGII~TIZATION (Excluding Trustee) Please respond to each of the following statements if you desire to be considered as either the Administrative Service Agency and/or the Financial Organization. If you feel any statement does not apply, please indicate so by responding: "Not Applicable" and provide your reasoning. Company Background. A. The name oCyour firm, home office address, New York State address (if any), and the name (including tiUe), address and phone number of your primary contact person whom we may rnntact about your proposal. Beneftt Consultants Group 600 Delran Parkway, Suite B Debar, NJ 08075 • Contact: Mitchell Kleinman, Senior Implementation Specialist 856-368-7210 mk/einmanCrDbcobenefits. com B. Give a verv brief description of your company and its history of participation in similar public employee Code Section 457(b) deferred compensation plans for state and local government employes. In New York State such plans first materialized in 1985, include your specific experience in similar plans in New York since that time. Founded in 1958, Benefit Consultants Group has provided plan sponsors creative solutions to meet their specifu needs. Throughout the decades, Benefit Consultants Group, has met the challenges ojan ever-changing retirement plan environment and has provided its clients with the highest degree of service, cueing edge communication systems and inspired design. Our management team is constantly searching for new ways to improve speed and accuracy while keeping costs reasonable. It is our goal to provide a quality product, responsive performance and a user friendly system using advanced technology. BenefU Consultants Group is a recognized leader in the industry. R'e provide record keeping and administrative services for over 2000 organizations nationally. We do have local representation for service in New York. • 05/28/2008 10 A Deferred Compensation Proposal for the Town of Southold C. How many public employee elective deferral retirement plans and deferred compensation plans do • you currently provide administrative services and/or investment products for? How many of these plans are New York plans? BCG administers SS public employee elective deferral retirement plans -1 ojwhich is located in New York. Note: BCG has 100 professionals handling ouer 2,000 retirement plans. D. In the past three (3) years has a~ public employee Code Section 457(6) deferred compensation plan/program, regardless of geographic location, terminated vour (parent, subsidiary or affiliate) services either through the competitive bid process or for cause? If so, by whom and under what circumstances? No. E. List ten (10) client Code Section 457(6) deferred compensation plan references for which your organization provides services and/or investment products similar to those requested in this proposal. It would be preferable if five (5) of the references could represent different size clients (based on assets) from New York State, if possible. Please include contact person name, title, address and telephone number, number of participants and approzimate size of plan assets and the number of years you have been providing services. Spreadsheet format preferred. C J • Plan Name Contact Phoue # Address Glen Avenue Public Library 457 Plan Richard Klendel 516-676-2130 Glen Cove Public Library 4 Glen Cove Avenue Glen Cove, NY 11542 Hartford Parking Authority d57 Plan John Michalik 860.527-7275 Hartford Parking Authority 155 Morgan Street Hartford, CT 06103 Plainfield Municipal Utilities Authori 457 Plan Herbert E. Wcekes 908-226-2518 HE 203 Park Avenue Plainfield, NJ 07060 Lower Southampton Township 457 Plan Ken Wallace 215-357-7300 Lower Southamptou Towuship 1500 Desire Aveuue Feasterville, PA 19053 Montgomery Township 457(6) Deferred Compensation Plan Ann Shade 215-393-6900 Montgomery Township 1001 Stump Road Mon me 'lle, PA 18936 Borough of Bristol Employees 457 Plan Angie Incollingo 215-7883828 Borough of Bristol 250 Pond Street Bristol, PA 19007 Fire Protection District of Palos 457 Plan Steven Carr 708-448-0369 Palos Fire Protection District 8815 W.12rd Street Palos Park, H. 60464 Orlando Oran a Coun Nita Crowder 407-690-5000 Orlando Oran a Coun 05/28/2008 11 A Deferred Compensation Proposal for the Town of Southold • Expressway Authority 457 Plan Expressway P.O. Boz 140396 Orlando, FL 32814 Patoka Lake Regional Water & Joe DeKemper 812-678-5781 Patoka Lake Regional Water & Sewer District 457 Plan Sewer District 2647 N. State Road 545 Dubois IN 47527 Soledad Housing Authority Julia Cuellar 831-678-3686 Soledad Housing Authority 121 Alder Street Soledad, CA 93960 F. What professional liability coverages are maintained by your company for errors and omissions or any other act? BCG has Errors and Omissions liability coverage in the aggregate amount ojS5,000,000. CJ • 05/28/2008 12 A Deferred Compensation Proposal for the Town ofSouthold • G. Fiuaucial Organization's should provide appropriate "ratings" from the following: A.M. Best, Standard & Poor's, Moody's, and Fitch (formerly Duff & Phelps). Has your rating iu any of these agencies fallen below'°A--" in the last three (3) years. If yes, give complete details. If, as a Financial Organization, you Gave no ratings by any of these agencies, please explain. Not Applicable. H. Provide any additional information that would distinguish your firm. BCG is one of, ijnot the only, ISO 9001 certified Third Party Administrator frrms in the country. The International Standards Organization (ISO) is a quality assurance program that includes companies jrom around the world ISO compliant companies are deemed to have wrinen processes and procedures jar all work tasks and those processes are audited by internal stafjon a quarterly basis and by external auditors on an annual basis. By doing business with an ISO certified company, vendors and partners have assurance that the services and operations are first class, consistent, and constantly monitored and improved upon. We are very proud to be an ISO compliant TPA firm and I am confident that it will allow us to exceed your client's service requirements. Through our Quality Assurance Department, our Quality Policy (which is signed by every employee at BCG), we are committed to providing service excellence and continually improving our performance. The experience and expertise that BCG maintains allows us to customize our services for third party • relationships. We can work with our clients to determine exactly what type ojproduct and features they wish to use with BCG, and design the administration and customer service specifically for the client With our automated workflow system, we know that our overall quality service level will remain outstanding. Another competitive advantage that BCG maintains is our commtment to employee education and training. In 1996 we established BCG University as the foundation for our employee training programs. Today, we maintain two dedicated BCG University classrooms at our Delran, NJ headquarters. A[l employees are required to obtain a certain level ojcredits each year through internal course offerings or off-site seminars in order to advance their career or to receive an increase in salary. Our commitment to education and training is unwavering and allows our stajjto always be current with the ever-changing rules and regulations, and to provide consistent quality service. BCG is SAS 70 cert fed and is recognized as one ojthe top S benefit providers in the Philadelphia and South Jersey area. BCG's staff holds many designations jrom the American Society ojProjessional Pension Administrators (ASPPA). • 05/28/2008 13 A Deferred Compensation Proposal for the Town of Southold SECTION IV. SERVICES Please respond to each of the following statements if you desire to be considered as the Administrative Service Agency. If you feel any statement does not apply, please indicate so by responding: 'Not Applicable"and provide your reasoning. Iylarketing and Enrollment Services I. Briefly describe the marketing and employee communication strategy which will be used with our plan. Indicate the use and capabilities of laptop computers, if utilized. Since 1958, BCG has worked through partnership alliances with Financial Advisors and Investment Companies to provide quality marketing and communication program to public groups and employer groups. Specificailly for the Town of Southold, we will partner with Rudy Bruer, of Moors and Cabot Financial Advisers, and William Schories, of Oppenheimer Funds, to ensure the goals ojthe Town ojSouthold are met 2. Briefly describe the types of marketing/promotional materials to be utilized. How will you work to develop a marketing program unique to our needs? Benefit Consultants Group compliments the efforts ojyour financial advisor and investment provider • through wrinen communications as well as web-based retirement planning tools. Some ojthe web- based tools include the following: 1. Retirement Planner 2. Retirement Income Calculator 3. 401 (k) Savings Calculator 4. Retirement Shortfall 5. Asset Al[ocator 6. Amortizing Loan Calculator 7. Retirement Pension Planner 8. Required Minimum Distributions 9. College Savings l0. Social Security Caculator 3. Do you provide rnmmunications to participants on a regular basis, if so, please describe? BCG provides employee statements on a quarterly basis. 4. Will these services and materials be prepared and distributed at your cost? BCG will provide tommunieation /enrollment information at our rnsl plus rnst ojFinancia/Advisor and Oppenheimer. • 05/28/2008 14 A Deferred Conmensation ProDOSal for the Town ofSouthold • 5. What educational materials will be provided to the Plan to maintain compliance? Quarterly statements will detail compliance information. Also, eompliance information is provided and available on our website. 6. Briefly describe how you propose to conduct group enrollment meetings and ongoing educational sessions so that all interested employees have an opportunity to attend at a convenient time and location. How often are these type sessions proposed? Indicate the use and capabilities of laptop computers, if used. The success ojyour retirement program will have a direct correlation to the emphasis placed on communication and education. This process must begin with the enrollment process and proceed continuously through the duration ojeach employee's plan participation in the plan. Enrollment Your Financial Advisor will conduct on-site enrollment meetings. The focus ojthese meetings will include the following: I. Describe the plan 2. Discuss investment options in the plan 3. Review investment allocation principles 4. Educate Participants on the necessity ojplanning for retirement S. Review benefits ojtax-advantaged savings • Ongoing Communication An on-going communication campaign is an essential part of your successful retirement plan. Your Financial Advisor will work with you to put a plan into action that works for your organization. Benefit Consultants Group, along with your investment providers will offer resources to make your education and communication programs a success. 7. Please describe, in detail, your one-on-one rnunseling sessions. Your response should emphasize how you plan to satisfy "the individual one-on-one on demand availability" of your enrollment specialist especially at times and locations convenient to our employees BCG will dedicate a full enrollment team Jo provide meetings and one-on-one sessions. 8. What educational services are provided for retirees? The Financial Adviser has a wealth ojresources to assist retirees on a one-on-one basic. 9. Describe your approach to asset allocation and diversification. All materials will be provided by the Financial Adviser /Investment Company and BCG promotes proper diversification and asset allocation. • 05/28/2008 IS A Deferred Compensation Proposal for the Town of Southold • 10. How do you follow-up with or contact employees that did not have an opportunity to attend a group session or with an employee subsequently hired after that meeting date? Your comments on the one-on-one availability of your enrollment specialists for this function are important The Financial Adviser wiU schedule aU jollox~up activities with participants. 11. Briefly describe your continuing education program, if any. This program will be developed by our Team, but directed by the Financial Adviser. 12. Do you attest that these Enrollment Services are provided only by a properly licensed representative: licensed to meet both Federal and New York State requirementsY Enrollment services will be provided by licensed representatives that meet both Federal and New York State requirements. • • 05/28/2008 16 A Deferred Conrnensation Proposal for the Town ofSouthold • Administrative. Services A. Services ollered to the Plan Sponsor 1. Do you offer a dedicated toll-free Plan Sponsor line? BCG provides a 1-800 number -1-800-524-4015. 2. How does your organization provide assistance with revisions to the New York State Model Plan Document? One ojour ERISA Attorneys will provide advice for amendments and restatement ojdocuments. 3. Does your company provide loans to participants? Yes. 4. Will your company withhold, remit and report income taxes deducted from distributions? Does this service include the production and distribution all income tax reports to all the necessary parties as required by federal and state laws? Yes /Yes • 5. Specify all reporLc which will be issued to us, our participants and governmental agencies. Participant account information can be accessed through our Voice Response Unit (VRU). It is designed to answer questions or address issues raised by participants. The VRU system has the following junctionalities: • Total account balance • Balance by source • Balance by fund • Total vested balance • Participant investment election percentages • Transaction History • Loan modeling • Outstanding loan balance • Transfer request • PIN change Our system has two levels ojbuilt-in call security, including a social security number and a personal identification number. The system provides three attempts at each security point On the fourth unsuccessful attempt' the system will exit the caller. Al[ VRUgenerated transaction data is stored electronically for audit verification. • 05/28/2008 17 A Deferred Conmensation Proposal for the Town o Southold B. Services offered to Panicioants • 1. Describe your voice response telephone system. Identify all available services including customer service options as well as "Voice Response Systems" or automated options. Iaclude security features and voice options, if applicable. Our VRU menu is extremely user friendly and easy to navigate. The participant will have the following options to choose from: • Account detail and summary • Investment Information • Transfer funds • Loan Modeling • Change PIN • Speak to a Call Service Center Representative • End the call 2. Can your customer service representatives assist non-English speaking participants? Yes. We have English and Spanish speaking Participant Service Representatives available, • 3. Describe your Internet strategy, What features are currently available on your website? What services are you developing for the near future? What security safeguards are used? Employers, employees, financial representatives and partners may access plan information via our secure website. Our website will provide plan level or participant level information maintained by our recordkeeping system in a secured environment Both internal operations and external customers can view real time information and conduct transactions specific to individual needs. The services provided to the participant, employer or financial representative include: • Participant balance information • Participant census information • Total account balance • Source balances • Total vested balance • Participant investment election percentages • Existing loan information • Outstanding loan balance Loan modeling • • Transfer request • PIN change 05/28/2008 18 A Deferred Comneruation ProDOSal for the Town of Southold • 4. Please describe the settlement options available to each participant at retirement, voluntary termination and death. Please state your compliance to reflect the Board's continued prohibition on annuity distribution options (Section 9001.4 of the Regulations), BCG will provide all settlement options provided in Model Plan Document i..e, lump sum installments, etc. In operation, BCG will comply with stated regulations. 5. In the event you are asked to administer our plan along side another provider(s), please describe your required procesc for assisting with participant requests to transfer plan assets from your program to one of the other carriers. Describe in detail the forms, signatures and overall process that you require. BCG is available to work with other providers to develop a program and insure all pertinent information is available to said provider. L LJ 05/28/2008 19 A Deferred Conmensarion ProDOSaI for [he Town ofSourhold • Recordkeenin~ System 1. Specify the basic recordkeeping system to be provided for our plan, with particular reference to the ability to receive, disburse, control and audit deductions, and to ensure timeliness, accuracy and wnfidentially of records and describe the software used. Client satisjaction Benefit Consultants Group commitment to client satisjaction is evident in our Excellence First Program. We provide our clients with a client satisjaction survey to be measurer[ There are goals set around the satisfaction ratings ojthese surveys. We take pride in being flexible to accommodate our clients' needs. In addition, as plans move through the installation process, each client is surveyed at various stages of the process. These results are used to improve the service we offer. Participant satisjaction Our procedure for monitoring participant satisjaction is completed through surveys. Participants are randomly surveyed throughout the year on the service and material we provide. The results are used to enhance customer service and materials for the participants. C~ C J 05/28/2008 20 A Deferred Comperuation Proposal for the Town of Southold C J • • We provide service standards on all recordkeeping junctions. Our standards are as follows: Ck'ent Se>vice.r Service Standazds Phone Calls 24 hours E-mail Messa s 24 hours Quarterl Re orts 15 business da s Marketing/Financial Consultant Communication/Education Quarterl Com trance P/.MCP Testin 1lnnuall SSOOs Pnor to filin date Partici ant Statements 15 business da s To Hea ,ltmuall Pro ected Tests 1,mtuall Processing Pa oll Posted 2 business da s Loan Pa ents a roll 2 business da s with ood data Rollovers 2 business da s with od data Enrollments manual 48 hours from recei t Ben tt Procunn Distributions manual 5 business da s afrer recei t of correct data Fund Transfers ront End 1 business da Terminations anual 5 business da s afrer recei t of correct data Hazdshi s 5 business da s after recei t of correct data Loan Withdrawals 5 business days after recei t of coaect data QDROs 5 business da s afrer recei t of coaect data Service Standards New Business Funds Additions/Chan es 5 business da s Conversions New plan - 2 weeks (with good data) Takeover lan - 4 weeks with ood data Deconversions 5 business da s from recei t of ood data All departments have a quality assurance unit that reviews data to ensure accuracy. system includes controls to eliminate entry errors. Reports and valuations are ru reconciliation ojdata. Our database keeps an audit trail ojall recordkeeping junctions. 05/28/2008 In addition, our n daily to verb 21 A Deferred Conenensation Proposal for the Town n Southold • 2. Briefly describe data processing operations, including the media by which your company can receive payroll deduction information, and its security provisions. Include a statement about your disaster recovery plan and its site location. Identify any subcontracting requirements for your primary administration responsibilities and comment on how this is possible in light of Section 9003.5(b) of the Regulations. HARDWARE BCG has six main components to its operating systems: I) A 100 user Novel[ IntraNetware main server, which connects all client computers throughout the company. 2) A Windows 2000 server, which runs the Oracle Database, where all ojthe Relius data is held 3) A Windows 2000 server, which runs Microsojt Back Office jor a-mail, fazing and Internet access. 4) A Windows 2000 server, which runs the Relius website, providing client account viewing. S) A Windows NT server, which runs the Relius VRU, providing client account phone access. 6) A Windows NT server, which runs the BCG/Relius Plan Legal Document system. * Al[ servers are equipped with RAID Smulti-disk fault tolerant subsystems for enhanced data integrity. • SOFTWARE All client computers within Benefit Consullants Group utilize the Windows operating systems. This provides a standard platform jor Relius, a-mail and all other software programs. Auxiliary company junctions are handled by the Microsojt Office software suit ojprograms; currently Office 2003. These include: Word, Excel, Access and Outlook. Al[ client computer data is held an the central (Novell) server, the Windows 2000 Back Office server and shared across the network. Client Web access controlled by a proprietary web site, using Secure Socket Layer (128-bit) data encryption jor information security. Voice Response operation is controlled by the Ed fy Workforce automated anendant software product Data for the customer phone requests are retrieved from the Relius database server, as needed, via the Edify system. Alllnternet access is controlled via a proxy server located behind a SonicWall hardware fuewall unit No direct Internet connections are allowed, or supported, to client computers within BCG. A comprehensive disaster recovery plan addresses contingencies jor specific system failures as well as a general disaster causing business interruption. Benefit Consultants Group has access to an independent power source in the case ojour primary power supply being interrupted In addition, Benefit Consultants Group supports a complete duplication of its operating system in an off site location on a different power grid Should the need arise, Benefit Consultants Group, along with all of its employees can be fully functional in a separate location within 24 hours. Testing is done • semi-annually. 05/28/2008 22 A Deferred Compensation Proposal for the Town of Southold 3. Indicate all interfacing: payroll deduction inputs, required certifications and any other • transactions, specifying all direct and indirect costs. Specify how payroll deduction information is to be supplied. Indicate ability to interface with internal data processing systems. Contributiox payrol/ injormaUon will need to be "uploaded" onto our website jor processing. Onee contribution is uploaded BCG wiUACH eontribution totals from payroll bank account • • 05/28/2008 23 A Deferred Compensation Proposal for the Town of Southold SECTION V. INVESTMENTS Please respond to each of the following statements if you desire to be considered as the Financial Organization. If you feel any statement does not apply, please indicate so by responding: "Not Applicable"and provide your reasoning. Fund Offerings Information should be for the most recent calendar quarter completed. 1. Describe fully the various attributes of each investment option your company has to offer. For each option include an Investment Options Summary sheet which includes the funds objective, portfolio statistics, asset allocation, top 10 holdings, and industry diversification. There are severs! hundred investments options from which to create a menu for the Employees of the Town of Southold A sample menu that achieves superior long term performance, and offers a high level of diversification is attached on the PDFjor your review The Sample menu has a Summary sheet for each investment option. The Stable Value summary sheet is attached separately. • 2. Describe fully your "fiaed" investment option. Include aone-page summary including applicable rates for the current calendar year, asset composition, and rating methodology. The Oppenheimer Stable Value Fund summary sheet contains all related information requested. 3. Illustrate in spreadsheet format provided, (see Exhibit A) the "variable" values for each equity type investment. Please give annualized returns for `year-to-date','one year', `three year', `five year' `ten year' and `since inception' values. See Attached Exhibit A 4. Illustrate in spreadsbeet format provided, (see Exhibit B) all cbarees including loading costs, policy fees, surrender charges, actuarial margins, asset fees, transfer charges, distribution charges, withdrawal fees, redemption fees, commission, termination/withdrawal of contract fees, etc., etc. See Attached Exhibit B C J 05/28/2008 24 A Deferred Compensation Proposal Ior the Tpwn of Southold Investment Flexibility 1. Describe fully all matters related to the exchange/transfer limitations or conditions, termination/withdrawal of contract provisions, any other restrictions or penalties, etc., etc. Include any information on "unrestricted" and/or "free" transfers or plan transfer limitations. Market timing policies of all mutual funds will be in elI'ect as per each fund's prospectus. 2. Identify any other charges or limitations not described in the previous responses. • • 05/28/2008 25 A Deferred Compensation Prnoasal for the Town of.Southold • SEGTIQN VI. CONVERSION SERVICES NOTE: The following questions are to be answered only by an Administrative Service Agency bidding on an existing case that is administered by another provider: not on cases where you are the incumbent or on new cases that haven't had a prior plan. Ijthese questions do not aanly. you may s~ to the next section without copying the questions. Experience I. Provide a detailed description and complete history of Code Section 457(b) plans tbat you have been successful in taking over completely. Include entity name and date of takeover, the name of the former provider, the asset size of the plan, the number of participants, transition time, staffing requirement and other detail you believe is significant. Process 1. Fully describe transition activities stating the time frame for a complete transition. Identify any • cost to us or to our participants for each step or phase: for the complete conversion. We have a separate Implementation Department responsible jor plan ins[a[lations. A Plan Implementation Specialist will work with the employer through all phases of the installation process to ensure a successful transition. Upon receipt of Benefit Consultants Group's Installation Kit the following will occur: • Benefit Consultants Group will forward investment applications 1o the appropriate fund families and establish accounts jor trading • The employer and financial advisor prepare jor enrollment meetings within the first 2 weeks of the installation process • Legal documents will be prepared, and census/account information will be entered on our recordkeeping system week 3 thru 4 • Voice response system and web access is activated by week 4 Through all phases of the installation process the client is informed of the progress via the Implementation Tracking System. The employer is notified in writing and with a welcome call that the plan is ready to go live. Benefu Consultants Group's standard time jar the installation process is 4 weeks. A dedicated Plan Administrator will be assigned to the Plan near the end ojthe installation process to oversee the transition into the ongoing administration. In addition, Benefit Consultants Group's CaU Service Center is available for telephone inquires from the client' financial advisor and participants once the plan has gone live. • 05/28/2008 26 A Deferred Compensation Proposal for the Town ofSouthald • After we receive a completed Installation Kit, the blackout period begins as we proceed with the review of legal documentation, reconciliation of account, establishing new accounts and census verification. During the blackout period, no investment changes, disbursements, loans and/or any other activity requiring money movement will occur (with the exception of ongoing contribution deposits). The blackout period is necessary in order to convert injormation to our recordkeeping system. We require the employer provide prior plan injormation. The injormation required includes: • Authorization & Signature Agreement jot recordkeeping services • Employer investment application for fund selections • Employee census worksheet • Employee enrollment forms • Plan documentation • Prior documentation • Copy ojthe most recent Summary Plan Description • Copy ojthe Loan Program • Copy ojthe most recent Plan Valuation u Our Relius Recordkeeping System can read most known electronic formats and convert into our recordkeeping system. This eliminates the need for manual translation of data and ensures accurate installations. Investments can be handled either through fund mapping or money market transfer. Ijparticipant accounts are available, we will move the dollars directly into each participant's elected funds. Ij accounts are not available, the dollars go into a money market fund, until current elections are available. Our Implementation Department must receive the loan document, the amortization schedule and account balance. Once this injormation is received the loan can continue to be processed 2. What on-site support will be provided during the transition? Who will provide this service? Would the key individuals be willing to meet with the Plan? BCG representatives as well as representatives from Moore & Cabot and Oppenheimer Funds will be on site. 3. What impact, if any, would there be ou our plan if you were to be appointed the sole administrator? For example, would fees be reduced, would we qualify for additional services, • etc., etc. We assume we will be sole administrator if appointed. OSY28/2008 27 A Deferred Compensation Proposal for the Town of Southold • 4. Please provide references for three plans you recently transitioned. If possible, please provide those located within New York. LowerSoulhampton Township 457P1an Xen Wallace LowerSoulhampton Township IS00 Desire Avenue Feastervi[Iq PA 19053 215-357-7300 Montgomery Township 457(6) Dejerred Compensation Plan Ann Shade Montgomery Township 1001 Stump Road Montgomeryville, PA 18936 215-393-6900 Fire Protection District ojPalos 457 Plan Steven Carr Palos Fire Protection District 881 S W. 123id Street Palos Park, IL 60461 708-448-0369 • • 05/28/2008 28 A Deferred Conepensation Proposaljor the Town of Southold • Exhibit A Fund Offerings -Section V, auestian 3 Illustrate in spreadsheet format provided, the "variable" values for each equity type investment. Please give annualized returns for `year-to-date', `one year', `three year', `five year' and `since inception' values. Fund performance should be net of all administrative charres. Lund level expenses, and other tees or charees assessed. • • Investment Performance -As of 04/30/2008 Investment Choices YTD 1 Year 3 Year S Year 10 Year Since Inception Ince lion Date Oppenheimer Stable 1.17% 3.55% 3.32% 3.14% 4.03%" ]Oyr 4.03%" l0yr 04/30/98" Value 10yr Goldman Sachs Govt 1.40% 6.55% 4.37% 3.86% 5.37% 5.96% 02/10/93 Pimco Total Return 3.59% 10.52% 5.66% 4.92% 6.41% 6.77% 01!13/97 Oppenheimer Strategic 2.46% 7.02% 7.96% 8.87% 6.69% 8.53% 10/16/89 Income ppenheimer 5.58% 14.04% 10.76% 12.76% 10.28% 10.66% 06/15/95 International Bond O nheimer Value -3.93% -6.94% 8.80% 13.65% 4.69% 11.32% 09/16/85 Black Rock Equity -2.52% 3.64% 14.11% 16.10% 8.04% 12.22% 10/21/94 Dividend BlackROCk S&P 500 -5.23% -5.17% 7.64% 10.03% 3.29% 6.80% 04/03/97 Oppenheimer Rising -3.41% -0,65% 11.07% 13.24% 4.59% 14.28% 04/30(80 Dividends American Funds -3.28%% 1.66%% 12.11% 13.56% 9.26% 15.46% 11/30(73 Growth Fund of Amer Oppenheimer Small &c -6.21% -7.91% 12.67% 19.69% 9.25% 12.01% 01/03/89 Mid Ca Value Oppenheimer Main -6.24% -13.95% 8.25% 14.30% N/A 12.18% 08/02/99 Street Small Black Rock Global 0.40% 11.53% 14.77% 17.06% 10.83% 12.13% 10/21(94 Allocation American Funds -3.70% 5.39% 17.04% 20.52% 11.48% 14.31% 0386/93 Ca ital World G&I Aim Euro can Growth -6.40% -4.04% 19.57% 25.11% 13.88% 16.61% 11/30/97 Oppenheimer Int'1 -6.06% -2.50% N/A N!A N/A 13.94% 09.27/05 Diversified Portfolio Series 0.64% 2.58% 6.59% N/A N/A 6.36% 04/05/05 Conservative Portfolio Series -0.70% 0.68% 7.72% N/A N(A 7.19% 04/05!05 Moderate Portfolio Series Active -3.11% -3.29% 8.87% N/A N/A 7.91% 04/05/05 Portfolio Series E ui -5.23% -4.14% 10.12% N/A N/A 9.02% 04/05/05 05/28/2008 29 A Deferred Compensation Proposal for the Town ofSoutho[d • Exhibit B Fund Offerines -Section V. question 4 Illustrate in spreadsheet format provided, all charnes, including loading costs, policy fees, surrender charges, actuarial margins, asset fees, transfer charges, distribution charges, withdrawal fees, redemption fees, commission, termination/withdrawal of contract fees, etc., etc. • • Carrier Fees Mutua! Fund Level Char es Fund/Account Name Admin. Fee Mort & Exp Invst. Mgt, Fee Other Fees 12b-1 Fees Total Fees O nheimer Stable Value 0 0.35 0.33 0.25 0.93 Goldman Sachs Govt 0 0.54 0.13 0.25 0.92 Pimco Total Return 0 0.25 0.40 0.25 0.90 O enheimer Strate is Income 0 0.52 0.12 0.25 0.89 penheimer Int'I Bond 0 0.52 0.16 0.25 0.93 O nheimer Value 0 0.47 0.17 0.25 0.89 Black Rock Equi Dividend 0 0.60 0.18 0.25 1.03 B1ackRock S&P 500 Index 0 0.25 0.10 0.25 0.60 Op enheimer Risin Dividends 0 0.67 0.21 0.25 1.13 American Funds Growth Fund of Amer 0 0.27 0.16 0.50 0.93 Oppenheimer Small & Mid Cap Value 0 0.62 0.21 0.25 1.08 O enheimer Main Street Small 0 0.62 0.25 0.25 ] .12 Black Rock Global Allocation 0 0.75 0.03 0.25 1.03 American Funds Capital World G&I 0 0.38 0.19 0.50 1.07 Aim Euro can Growth 0 0.89 0.33 0.25 1.47 O enheimer Int'1 Diversified 0 0.74 0.18 0.25 1.17 Portfolio Series Conservative 0 0.60 0.13 0.25 0.98 Portfolio Series Moderate 0 0.61 0.15 0.25 1.01 Portfolio Series Active 0 0.75 0.16 0.25 1.16 Portfolio Series E ui 0 0.65 0.25 0,25 1.1 S * BCG's Fee Schedule for Administrative Services is illustrated on the following page. 05/28/2008 30 BENEFIT CONSULTANTS GROUP SINGLE FUND FAMILY RECORDKEEPING FEE SCHEDULE EFFECTIVE ]ANUARY 1, 2008 \J ONE-TIME PLAN SET-UP FEES: Conversion Plans $1,500 ANNUAL PLAN ADMINISTRATION FEATURES AND FEES: Annual Plan Administratlon Features Include: o Daily Valuation of Participant Aaounts O Quartedy Particpant Statements with Newsletter 0 24 Hour Toll Free Voice Response Unit * may be mailed to parOdpants home at no charge * English or Spanish o Up [0 15 Funds o Partiapant Account Internet Access o Year End Compliance o Toll Free client Service Center o * English or Spanish o Quartedy Employer Reports o Web-based Finandal Planning Software O Prototype Plan Doament and SPD O ACH for Plan Fees o IRS Fonn 1099/945 ReporOng 457 Mnual Administration Fees: Based on BCG Administration of Entire 457 Plan, we will waive Basic Fees. However, BCG will access an Annual Fee for extra Insurance considerations(estimated at later date). • OPTIONAL FEATURES Custom Enrollment Booklets $60 per order plus $7.00 per booklet Outside Trustee Servi[es $500 annually plus $12 per distribution charged to parb[ipant Review Domestic Relations Order Outside Asset Agreement ADDITIONAL EXPENSES Distributions $250 (minimum charge) $1200.00 annually $66 Installment Payments for Distributions Loan Fee $5 per check $3 per ACH (electronic fund transfer) $165 /employee charge For additional iMormation and installation kits please contact 8CG Plan Implementation at 1-600-524-401K extension 7210 Mitch Kleinman Feb are Mf pmrdb far Shalt plan years Fees far servims oulSiAe M ar 9argarC atlmin5tratlon services may appty • fxsAMRa06(es\llu,gftt.>rIS Prepared for: Town of Southold Prepared by: Oppenheimer Funds OppenheimerFunds' The Right 1Nay to Invest Release Ease 0/-30-2008 FINRA Memoers: For imernal use a client reporting purposes oNy. Page 2 of 60 Hypothetical Portfolio Illustration 04-30-1998 to 04-30-2008 aa~ Portolb SBP 500 TR - ---- Value. $000) ~ooaa8 Aswnaprioru ---- - -- --- sao FederallncomeTaxRa[e 0% Capital Gain Tax Rate 0% -..... -. 4so Stale Tax Rate 0% -v - ~ Tax Paid Out of Pocket --. ... --_.. _.. _..... - 40o Rebalance No .. _ .... _. -... .. ...... - .. 350 Pertmnance _ ~ .; _, , a. , Net US Dollars Invested $190,000 _- - - - -- -.- • ~.:;: _ » __.. -. 3m ~~FinalMarke[Value-~~-~~ $382,391 Average Annualized Return 8.64°~ -- -- --- - -....... --.. -.- - 2w Cumulative Return 129.06% zao 150 - -.... _.. -_ --.- -.. -..- - 100 - _-- - -.. ---.-.. _....- _.-. 50 104-98 04-99 04-00 04-Oi 04-02 ~ 04-03 ~ Dd-O4 ~ 04-OS ~ 04-06 ~ 04-07 • X~ taaaa'Qa'fP'~2F _ f~.m.YYF' S +. e 5 .~t -,1F. ~''$' ~. nm. F~ure'"+~ye°°"5 ' ~4Eat.- *~a -k6"x~- ktili 1c~i {~R~M?v~'a^ki- %e ~ I ' PerioE Begimmg 8alame Naw ImesrmpE Distriau0ara14NE1Wr1 Total Reuman:st CMrges i Fees . Tares Oaae Maher VaWe „ Tohl Rerun ~% Totals 0.00 190,000 0 107,272 0 0 382,391 8,64 April-December 1998 0 130,000 0 7,151 0 0 131,136 0.87 January-December 1999 131,136 10,000 0 8,266 0 0 164,606 17,38 January-December 2000 164,606 0 0 8,112 0 0 173,530 5.42 January-December 2001 173,530 0 0 4,968 0 0 169,608 -2.26 January-December 2002 169,608 0 0 3,995 0 0 157,929 -6.89 January-December 2003 157,929 0 0 4,881 0 0 202,908 28.48 January-December 2004 202,906 0 0 9,483 0 0 234,395 15,52 January-December 2005 234,395 50,000 0 15,352 0 0 308,369 9.01 January-December 2006 308,369 0 0 16,657 0 0 356,515 15.fi1 January-December 2007 356,515 0 0 26,992 0 0 392,OD0 9.95 January-April 2008 392,000 0 0 1,417 0 0 382,391 -2.45 L I a)2leB Mwnngla~. NI Ri91ds Resareelhe Inlwmaem. earn. maiysesaN opnmm conuimtl hwwn Ill hnWe tle cweemtial me propiMay Mamation ce Mwnnystar. (1) maynm hecopxs d ieeistriMrtm. (37 tlomt cmwwe iwresmiex aer~ MaN M Momrgstn~. (al areprwpee solely Iw nlamational pwpos¢ aM nrtrelae ae m[ an Ma b pvya sell a sscuiry. ane (51 ae nor wartamee ro hecmvct complete w avuae. OPpa+arimNwik• Eacquazceheiw~~equ~ee Dy law,MOmin¢ta~Nal not pe respomale la am•vaeeg OCCiwm, eamages a~We'lossen ~esuling hwn, or rela~lta. this iMwmaem.eaM. anaysuwopinmswtlrer use. ibis report is sµple~ ~~wrwm~s mmMl sales iire~ahre. n ~porzele h mart ce prmmm a acco~aaee eya wmw Yaz. a eQUr+aim, am elsnrtmm vnemem Release tlate 04302008 FINRA Members-. For internal use a client reporting purposes only. Page 3 of 60 Hypothetical Portfolio Illustration Continued 04-30-1998 to 04-30-2008 • • C J Imestmrat Name AIM European Growth A LW __.- Amer Funds CapWrldGl R3 ~ Amer Funds Grth Fund R3 • BlackRock Equity Div A LW • BlackRock Global Alloc A LW • BlackRock S&P 5001ndex A • Goldman Sachs Govlnc A LW • Oppenheimer Active AIIOCA LW • Oppenheimer Conserv Inv A LW • Oppenheimer Equity Inv A LW Oppenheimer Intl Bond A LW _-= Oppenheimer Intl Div A LW ~: Oppenheimer Main St Sm A LW • Oppenheimer Mod Inv A LW Oppenheimer Rising Div A LW • Oppenheimer Sm Mid Val A LW • Oppenheimer Sv Income A LW • Oppenheimer Value A LW • PIMCO Total Ret A LW Initial SWsatnmm Reinvest ligtd- Ra- HoWig PerioO ImesOaaant ImresUWAMetl Distrau0ens dam Oalance fAUrges entl ices Mamet Value Start End Anwua Amourrt Freq Income Cap % Front Anneal Oefenetl Loatl Periotl EMf Gains Loatl Fee% Amoua%Montns 04-98 04-08 10,000 0 - Y Y N - 0.00% 0.00 0.00-0.00 0 36,695 04-98 04-08 10,000 0 - Y Y N - 0.00% 0.00 0.00-0.00 0 29,635 04-98 04-08 10,000 0 - Y Y N - 0.00% 0.00 0.00-0.00 0 24,234 04-98 04-08 10,000 0 - Y Y N - 0.00% 0.00 0.00-0.00 0 21,668 04-98 04-08 10,000 0 - Y Y N - 0.00% 0.00 0.00-0.00 0 27,972 04-98 04-08 10,000 0 - Y Y N - 0.00% 0.00 0.00-0.00 0 13,816 04-98 04-OB 10,000 0 - Y Y N - 0.00% 0.00 0.00-0.00 0 16,870 04-OS 04-OB 10,D00 0 - Y Y N - 0.00% 0.00 0.00-0.00 0 12,633 04-OS 04-08 10,000 0 - Y Y N - 0.00% 0.00 0.00-0.00 0 12,085 04-OS 04-OS 10,000 0 - Y Y N - 0.00% 0.00 0,00-0.00 0 13,034 D4-98 04-OS 10,000 0 - Y Y N - 0.00% 0.00 0.00-0.00 0 26,596 09-OS 04-08 10,000 0 - Y Y N - 0.00% 0.00 0.00-0.00 0 14,022 OB-99 04-OS 10,000 0 - Y Y N - 0.00% 0.00 0.00-0.00 0 27,325 04-05 04-08 10,000 0 - Y Y N - 0.00% 0.00 0.00-O.DO 0 12,374 04-96 04-OS 10,000 0 - Y Y N - 0.00% 0.00 0.00-0.00 0 15,666 04-96 04-08 10,OD0 0 - Y Y N - O.DO% 0.00 O.DO-0.00 0 24,219 04-96 04-OS 10,000 0 - Y Y N - 0.00% 0.00 0.00-0.00 0 19,125 04-98 04-08 10,000 0 - Y Y N - 0.00% 0.00 0.00-0.00 0 15,811 04-96 04-08 10,000 0 - Y Y N - 0.00% 0.00 0.00-O.DO 0 18,613 ®2a8 Manl,gsut. All Rlgns Ro'ev E. iM mfumanm. earn. malyres aM cpinmw comairee I,enn n) ncWe Ve rmfieemlal me pgrtleury iMammm of Manngsw, l2) mayro[ ~e copreA a ~ lisudnat, 13)eonotcm94u[e lmesMmt aeace onaetlq MOmmgstnr.lllarepwbel sd9y la nlwmanmal WROSg aW rte,ekre are notanalfabbry or sellassw4y,aM I5l ae rd wenamM mcecmect com0lxeaarvrcate. (IagenheianaKSnde' Gc~tazmMwlse teyulree tylaw. Maningu Aal not cerespons0lebatry vaemg eeclsons. eamagesm Wn WZSes resultng nan.nrehaeto. iM1S immmaum.eaa. anelysezmcgieaas or Mar i¢e. iais ~onusygle. a-.y.xs.e... mmtnl ales IeenNell tpRliGLle n must cepae]el a acevmpamee Uya prospenm. a eluialai. atl tl,scbsure w[emenl. 04-98 04-99 04-DD 04 m 04-02 W-03 I Od-04 04-05 04-Ofi (0407 Release tlak 94308098 ~ FINRA Members Fw internal use or diem reporting purposes Doty. Page 4 of 60 Town of Southold • Portfolio Snapshot PoMOlio Value llenehnurk $382,390.88 $5P 5fX1 TR "•• ~ s :. 2 tr Asset Allocation Portolio Portfolio Pomolb Bmark Maningsbr Equity style Bos % Morningstar Fuel Irreune 5ryk 9os % Long % BhM % Ne[ % Ne[ % w total stuck Hdeings 3 total eoro Mdtlings j ! ; Cash 38.77 29.92 8.86 0.00 Yd 3zta 8 'g n9so ,,,, , US Stocks 41.25 0.32 40.93 100.00 '~~; '_ ~~ s ~NOtclassi0a]% -4i r s Nor aass9ei% Non-US Stocks 24.99 0.01 24.98 0.00 fh a n 'PFa ~ ° o ~ ' A $ 0 ' ~ Bonds 27.44 4.14 23.30 0.00 ~.~' e .,. ~ : £ Other 2.47 0.54 1 93 0.00 ~ r: ~ ~:.: „:.;, 0 ~ 0 '' 0 , j. ............._..,...... _,............ ........_ .. .. -too so o so too Total 134.93 34.93 100.00 100.00 °a0e tae c*"M^ - srorc I^ree^ ins ~. wo~~to-zs zs-so >so o-to la zs zsso >so Stod"crsr~, 3hs~6-'14tl~ar<ei A S _ v. r a n~ _ c r r[ y r PePfOntwgoe 4IY JY'LNW: I „ ... ..m ....:. m A ...- tld ie c v v .... v_.2 i$[ Stock $CLIIXS Stock Regime Irrvestnren[ Aetisrty Graph _ PoMOIio Initial Mk[ Val: 8130,000 Final Mkt Val: 3382,391 • Benchmark Greater Asia Americas Greater Europe St,WO 9c Portdio 4509 3a00 310.0 ~~~ ~ ~, 6 ~'~'" 210.0 Y F eF ~ 11a0 Irfarmadm _...,:.:.... ~ 100.0 we o-to tozo zo-s9 so9o >9a% %of Stocks Portfolio% Bmark% %of Stocks Portdio% Brrerk% Trailing Returns 3Mo tYr 3Yr SYr tOYr `~' IMmnnkn M.to 29.t7 Americas 65.W 100.00 Pre-Tax Portfolio Return 2.16 0.49 11.23 13.50 8.64 ~ Software 3.99 3.76 North America 64.47 100.00 Benchmark Return 1.03 -4.68 8.19 10.09 4.07 • Hardware 8.55 9.99 Latin America 1.41 0.00 +l- Benchmark Return 1.14 5.16 3.04 3.41 4.57 Media 2.49 2.99 ... ............._. .... _... GeaLLr Europe 27.15 9.90 Telecom 5.07 3.43 Lme Periotl 0.ewm Best% Worst% Un¢ed Kingdom 5.64 0.00 ,,,,,,,,,,,,,,,,,, ,,,,., Serrke Eeammy 3895 49.43 Europe-Developed 20.64 0.00 3 Months 12.76 (04-03/06-03) -10.62 (06-98/08-98) 0 HeaRhcare 8.95 11.44 Europe-Emerging 0.84 0.00 1 Year 36.15 (03-03/02-04) -11.52 (10-00/09-01) ® Consumer Srvcs 6.12 7.24 Africa/Middle Eas[ 0.34 0.00 3 Years 20.07 (04-03/03-06) -3.fi8 (04-00/03-03) '-' Business Srvcs 6.71 4.69 ~ py~ - ~ ................ 8 W ......... 0 90 ® Financial Srvcs 17.08 17.06 p Ja an . 1.97 . 0.00 PoMOIio Yield Yieltl % ,,,t~ ,,,,,,,, ,,,,,,,,,,,,,,,,,,,,,,,,,,,,,, Australa i 1 10 0 00 Trailing l2 Month 2.59 Lf Mfg Eammy 40.99 39.3z s a . . ® Consumer Goods 10.12 8.30 Asia-Developed 2.11 0.00 • © Intlustrial Mtrls 16 54 13.20 Asia-Emer in 9 9 1.46 0.00 ~`ryO1"'aure 0isdosure . r 21 14 E 10 26 .. The performance data qutxed represems pastperfonnance end does notguarantee gy ne . . Not Classified 0.04 0.00 hdure results. The investment reNm and principal value of an investment will ® Utilities 4.13 3.56 11ucNate thus an investor's shares, when redeemed, maybe worth more or less than Not Classified 0.06 0.08 their original cost. Cunent performance maybe lower or higher than reNm data quoted herein. Forperformance data current ro the mast recent month-end, please visit data http:lladvisocmomingstaccomlfamil yinfo.asp. See Disclosure Pape /or Standardized Rrmrms. ~y ~~{{ ryry HOtdnyz JW yYi.:: Y y{'F tl:i :. , . ': .4Ah .:.~. :: tl 2 .... s- -, vr.ttl: m@ W! uoi.6 iY v., un.._ .._ ..... __..u Y ...... .. ..... w _ _....-.., u:xaat,_v,._..:a< ... v, ro "IV:enu v~x_ ': » Top 10 Mldigs mt of 19 Ticker Type Hddirg Value S %0.ssets AIM European Growth A Load Waivetl AEDAX.LW MF 36,694.50 9.60 Amedran funds Capital Worltl GII R3 RWICX MF 29,634.51 7.75 BlarkRak Global Allocation A LW MDLOX.LW MF 27,971.74 7.31 Oppenheimer Main St Small Cap A LW OPMSXLW MF 27.324.55 7.15 Oppenheimer International BorldALW OIBAX.LW MF 26,595.70 6.96 American Funds Grth fund of Amer R3 RGACX MF 24,233.95 6.34 • Oppenheimer Small & Mid Cap Value A LW BlackRak Equdy DividerM A Load Waived OVSCX.LW MF 24,219.21 6.33 MDDVR.LW MF 21,668.18 5.67 Oppenheimer Strat Income A Loatl Waived OPSIX.LW MF 19,125.13 5.00 PIMCO Total Return A Load Waived PTTAX.LW MF 18,612.91 4.87 ozone Mdnegsra no sync kewm. rre imdmam, eau. mayseaam aprvds cmmrea nden m muwame mmicemiai wa popittary ~tldmmd,aMdda~mr, fzl maroon m cwxa dreavn'bisee. (3l eo mr msnuee .xw5vmvaA+re alaetl by Mwnngswr. pl are pdneee mkly ld nlam3bmal pupm¢aM tlerade are not an dMWbuyd zeua searteY. ana ls)~re rin wa+anlea NEecmeeL Cdrgxed acoaae ®9pper4einerNVda' Eu~tmdlreiwise rdlutree ray law,Mamngsrnr snalna ne respanzTle nor arryhatlug aaivdu. eamagesdane losses revlrng hdn, or retiree to. Nls mndmaum.ama.aml/su or opnved NCr tee. ims rgim is vgpe- .•.wmm.m mmGl iaM In¢ra4telf aplicabk it muA bepe[e0 H d acmrpamea by a yraperlui ¢ epixalaR. aN arv]osur e 4aRneM1. Rekau Bate 0/308008 ~ FINRA Members: For internal use or client reporting purposes only. Page 5 of U Town of Southold • Portfolio Snapshot Po"'elkvakre e"""ma"` E382.390.88 S6P 500 TR Btslc Atul ylSl S ~~{1D B ~ ; r ~ m ' k . .., .. ... . ....., ,, e. W _. ..._ : ~,.,... ~ .., s ~... ,.,r ~. ' r _. _.~..,.>r..: ~ .~~_ ., ....,..w , ._, . ~_ .... ~[ RisklB ewar tl Sca nerplot ®Po rtolio O Holtl irg ^B mark 3 Year Mean Pert wmarce History Graph ^Port olio quarterl y returns .1-Benc hmark in % ..... ..... ...... ..._,..... ..... ..... ..... ..... ..... .,... . .. . ._ 22.00 120 ..... ..... ...... ... .... ..... ..... ..... ..... ..... ..... _.. .... ~.., .,.,. 20.00 ..... ..... ...... . _..., .... ._.. _... ..... .... ..... ..., ...., __ ..... ..... 18.00 ...., }. ..,,. ..... ..... ..... .... .... ..... 16.00 60 ~ ~. ... 1400 ..... ..... ..... .. _.;~..... ..... ._.. ._.. .... ..0. ..... ..... ..... ..,.. ..... 1100 - . t amarl .._ ..... ..... _..~..... .. ..... ..... ..... ..... ..... .,,.. .. ..... ._.. ..... 10.00 • • 8.00 .... ..... .... .... ~... ..... ..... ..... ..... ..... ..,.. .,.. .,.,. ._.. ..,_ 6.00 .6.0 .... ..1@ .... ..... ..... ..... ..... ..... .._. ..... ..... ..... ..... ...,. ..... d.00 .... 10 ... 19 ..... 2,1 ....... 3.fi 45 ..... 53 .... 6.2 7.1 ..... 7.9 ..... 80 ..... 91 ..... 10.5 ..... 11.4 _,. 12.3 ..,., 200 13.1 95 - -120 3 Year Stantlartl Devia[im Risk aM ReWm Statistics 3 Year 5 Vear l0 Year MPT Statistcs Portfolio Bmark Portfolio Bmark Portolio Bmark Stantlartl Deviation 7.23 8.91 7.36 8.75 9.91 14.75 Alpha Mean 11.23 8.19 13.50 10.09 8.64 4.07 Beta Sharpe Ratio 0.94 0.46 1.38 0.84 0.52 0.09 R-squared 3Yr Portolio SYr Portohe 10Yr Portfolio 3,75 0.73 82 MarkM MaWrdy Ge°mevie Avg Capital'vativn (SMiQ Vakation Mult~ks Portfolio Bmark %or Stocks Portfolio Bmark Portolio 18,677.35 PricelEarnings 15.47 16.36 • Developed Markets 96.17 100.00 Benchmark 51,899.36 PriceBook 2.63 2.55 Emerging Markets 3.82 000 Price/Sales 1.26 1.43 Not Available 0.01 0.00 Price/Cash flow 10.19 10.23 Type Weightkgs Nofitafitlky %ot US Stocks ~. Portfolio J Bmark %of US Saks Portolio ® High Yield 4.05 2.70 2007 © Distressetl 1.05 0.44 Net Margin 12.63 ® Hard Asset 12.74 15.49 ROE 19.64 © Cyclical 19.53 18.22 ROA 7.65 © Slow Growth 10.81 10.79 De6VCapital 34.56 © Classk Gr°w[h 28.88 37.07 © Aggressive Growth 14.59 13.64 Futl SmOSties ®Specutative Growth 4.51 1.46 Potential Cap Gains Exposure Nat Available 3.84 0.19 Avg Net Expense Ratio Avg Gross Expense Ratio % o s to is z0 zs 30 35 40 45 so 18.52 1.06 1.07 4.59 4.32 0.77 0.60 83 BO Geda 0ualrty Govt. AAA AA A BBB BB B Below B NR/NA %of Bontls 0.00 SB.D6 7.30 10.92 3.38 6.72 3.82 0.92 8.88 IrAeresl Rate Risk Portolio Maturity 4.97 Duration (total portfolio) 4.04 Avg Cred¢ Duality AA Bmark 2007 12.73 20.75 8.46 35.31 °200a Mpniyyar. NI agnls Raeve4. i6e mmrmaim. Gala, a,alyses am opinlom cvnpnee aaen f11 ircJWe ale cmllemual stl proprietary iM«maeon NMVnnysra, RI may Nl ce capiea ° reaiAMixm, 137 eo nm crosOlueimesenee aaece ollaea ay Maniywr. 141 ere prditletl wieiy lw nl°maumai pupnw_s ana tlrerel«e are rp an Meta 4ry or sells.seuriry.mia(s aremwamanlmmee cmxl. cmrgae or acwrate. ®~M.' [.trot ° amewise r«µree q aw. ramsrgsm nau not ce resp«rsak b a^Y vmmg eenvom, eamages a un° mssa resuiey from. «reiarea lo. ws iNmruam, data, amiyaes or apiniom «mnr uce alas report is sygie- mn°ivies dlaawe nyporaeu n muss ce precMm «acmrroamee eya P~p«.w:. «eyr+aie~l. am aucrosure slalemem. Relrsse dare 00.30.2008 FINRA Members'. For internal use or client reportirg purposes only. Town of Southold • Portfolio Snapshot The performance data quoted represents past perfon fiance and does not guarantee luture results. The investment return and p ~ ncipal value of an investment will fluctuate; thus, an investors shares, v,~hen redeemed, maybe worth more or less than their original cost. Cunenf pt Hormance may be lower or higher than return data quoted herein. Far performam~ data current to the most recent month-end please visit http://advisocmorning:~accom/familyinfo.asp An investment in amoney-market vehicle is not insuF:li or guaranteed by the FDIC or any other government agency The current yield quotation reNects the current earnings of the money market more closely than the total return quotation. Although money markets seek to preserve the value of your inveslrnent ai $1.00 per share, d is possible to lose money by investing in them. Standardized Returns assume reinvestment of dividends and capital gains. They depict performance without adjusting for the effects of taxation, but are adjusted to reflect sales charges and ongoing fund expenses. If adjusted for taxation, the performance quoted would be significantly reduced. For variable Page fi of fiL Pardelio VaWe Benchmark 8392,39089 5&P 590 TR annuities, additional expenses will be taken in account, including M&E dsk charges, fund-level expenses such as management fees and operating tees, anc convact-level adminisVation fees, charges such as surrender, conVact and sales charges. After-tax returns are calculated using the highest individual federal marginal income tax rates, and do not reflect the impact of state and local [axes. Actual after-tax returns depend on the investor's tax situation and may differ from those shown. The after-tax returns shown are not relevant to investors who hold their fund shares through tax-deferred arrangements such as 401(k) plans or an IRA. After-taz returns exclude the effects of either the alternative minimum taz or phase-out of certain tax credits. Any taxes due are as of [he time the distributions are made, and the taxable amount and tax character of each disVibution are as specified by the fund on the dividend declaration date, Due to foreign tax credits or realized capital losses, after-tax returns may be greater than before-[az returns. After-tax remms for exchange-Vaded funds are based on net asset value. Amriulizletl rewms 0331.2009 SMrMardved RaumS (%) - 7Eay 1Yr SYr 1 OYr Sirxe Inception Max Fran Max Back Net Exp Gross Fnp Yield Inception Dale Load % Load % Ratio % Ratio % AIM European Growth A LW -- -1.70 26.49 14.28 16,48 11-03-1997 NA NA 1.48 1A8 Amer Funds CapWrldGl R3 -- 10.17 22.39 -- 15.37 06-06-2002 NA NA - 1.13 • Amer Funds Grth Funtl R3 BlackROCk Equity Div A LW -- 5.59 2.55 15.36 16.23 -- 7.48 9.03 11.89 OS-21-2002 10-21-1994 NA NA NA NA - 1.03 0.96 1.03 BlackRak Glohal Alla A LW 12.35 18.37 10.60 12.03 10-21-1994 NA NA 1.18 BlackRock 5&P 500 Index A -- -5.57 10.74 2.91 6A0 04-03-1997 NA NA 0.62 Goldman Sachs Govinc A LW -- 6.86 3.95 5.40 5.99 02-10.1993 NA NA - 1.00 Oppenheimer Active AIbcA LW -- -5.37 -- -- 6.25 04-05-2005 NA NA 1.16 1.16 Oppenheimer Conserv Inv A LW -- -0.29 -- - 5.00 04-05-2005 NA NA 0.99 0.98 Oppenheimer Equity Inv A LW -- -6.22 -- -- 7.11D 04-OS-2005 NA NA 1.15 1.15 Oppenheimer Intl Bond A LW -- 18.55 14 04 10.62 10.86 06-15-1995 NA NA 0.95 0.95 Oppenheimer Intl Div A LW - -1.76 -- -- 12.89 09-27-2005 NA NA 1.17 1.17 Oppenheimer Main St SmALW - -15.48 15.06 -- 11.67 OB-02-1999 t4A NA 1.12 1.12 Oppenheimer Mod Im A LW -- -2.06 -- -- 5.55 04-D5-2005 NA NA 1.01 1.01 Oppenheimer Rising Div A LW -- 0.03 14.09 4.27 14.15 04-30-1980 NA NA 1.13 1.13 Oppenheimer Sm Mid Val A LW -- -9.16 19.86 8.45 11.73 01-03-1989 NA NA 1.08 1.09 Oppenheimer Str Income A LW -- 7.97 9.45 6.63 8.52 10-16-1989 NA NA - 0.91 Oppenheimer Value A LW -- -9.45 13.38 3.95 10.98 D9-16-1985 NA NA 0.89 0.99 PIMCO Total Ret A LW -- 1029 5.07 fi.41 6.76 Ot-13-1997 NA NA 0.90 0.90 Standard & Poor's 500 TR - -5.08 11.32 3.50 - - Letman Bro's Agg Bond Index - 7.67 4.58 6.04 - - MSCI EAFE Index Ndtr_D - -2.70 21.40 6.18 - - 3 Month T-Bill - 3.99 3.17 3.63 - - Realms aha Taxes (%) On Oistributlon On Disuibution and Saks of shares 1Yr SYr 19Yr Since Inception 1Yr SYr 10Yr Since Irxeprion Date Incepton AIM European Growth A LW -3.22 25.51 13.84 16.05 11-03-1997 0.53 23.53 12.85 14.97 Amer Funds CapWrldGl R3 3.56 19.76 -- 13.09 06-06-2002 5.19 18.30 -- 12.16 Amer Funds Grth Fund R3 -0.67 13.71 -- 7.69 OS-21-2002 1.61 12.41 - fi.99 BlackRock Equity Div A LW 1.76 15.49 5.94 9.59 10-21-1994 1.97 13.89 5.65 9.18 BlackRock Glohal Alloc A LW 10.48 16.61 8.20 9.26 10-21-1994 8.80 15.31 7.84 8.92 • BlackRock 5&P 500 Index A -6.05 10.25 2.39 5.77 04-03-1997 -3.59 9.08 2.21 5.25 Goldman Sachs Govlnc A LW 5.37 2.63 3.53 3.83 D2-10-1993 4.42 2.61 3.47 3.78 C2IX@ Manrguar. All kgMS Resav¢E. Pre mkrmatm, ata aaly.:ea as gtinp5 [mIXVZG heen m lmwe the cmlkartal r¢ prmrnray Imm~aum d Munalgwr. R) may mrM1e mpl 1 w realvnMel. (3 aomtcmtiwenxesunaa atlviW dMeO q'Mwndlgswr. (4 aeprai¢ea wkly tar alumatulal pupma as tllaHae are mr an Mamdly asellaseNlry.an¢(57ae rXN wartmMtp ¢ecrost cunp kre oramnare pppe ryrinnfaids' flcgrl as dMMlSelelulrN~'IdW.MminySld~NdllnIX ar P5Wr6Gk 10r aly 1ra11rq MYISIdIS, Jamey250r Wer lp46 r¢sYllYy (rpm. a~reldl¢E IO. Mis nlUmatMl, Gdla.dNlyxSw Wn iw6a Nea lEE. i111s IWmrsSygle- ^W"w.'^~^ melral iel¢slRerdNe.IrgpliVLeit mint Ce praeemwaec prmanea M1yep ye¢UO.weW nala,C aM Elscbvae Yarenpnl. Release tlate 0430-2008 FINRA Memoers: far in[erwl use a client repoNrg proposes only. Page 7 of fi0 Town of Southold • Portfolio Snapshot "°"`°'°"°`~ ~°'~°~ 8382,39088 S&P 500 TR Realms after Taxes (%) On Distribution On Distribution an0 Sales of Shares Oppenheimer Active AIIocA LW Oppenheimer Conserv Inv A LW Oppenheimer Equity Inv A LW Oppenheimer Intl Bond A LW Oppenheimer Intl DN A LW Oppenheimer Main St Sm A LW Oppenheimer Mod Inv A LW Oppenheimer Rising Div A LW Oppenheimer Sm Mid Val A LW Oppenheimer Str Income A LW Oppenheimer Value A LW PIMCO Total Ret A LW • • 1Yr 8Yr 1DYr 'Since Inception In~;,ption Dale -6.74 -- -- 55.22 04-05-2005 -1.75 -- -- '?3.90 04-OS-2005 -7.24 -- -- ~~fi.25 04-OS-2005 15.70 11.fi2 Z66 -i'7.58 116-15-1995 -3.00 -- -- 11.62 09.27-2005 -1 fi.94 13.74 -- 10.65 08-02-1999 -3.50 -- -- 4.53 04-OS-2005 -4.36 11.63 2.60 12.08 04-30.1980 -10.96 17.81 7.26 10.22 01-03-1989 5.55 7.11 3.67 5.10 10-16-1989 -11.07 12.41 2,93 8.90 09-16-1985 8.27 3.45 4.19 4.47 01-13-1997 lYr SYr tOYr Since Inception -3.18 -- - 4.82 -0.09 -- - 3.66 -3.64 -- -- 5.65 12.00 10.72 7.26 7.25 -0.92 -- -- 10.38 -8.45 13.06 -- 10.09 -1.15 -- -- 4.20 2.26 11.49 3.03 11.93 -4.58 16.66 6.87 9.81 5.14 6.74 3.76 5.15 -5.06 11.39 2.95 8.66 6.62 3.41 4.14 4.41 ®p[g Momingsar. All Ayhu Raevee.lle eMmaim. aatn, analyses m0 ryirnora wntairetlhnen n ImWee Me cmAegRlal mtl gWrkMry Inlamaem aMOmmgstar. l2) may rM Le cWied m rmistedrtm. (l)eomtcrosetulem¢Vnart aerie dlereaty MOmirgvar.(dlge gwleee Wtly bf rilo-mMimal gaWSn eM rMNo-e ae rot an dlerbbuymseeasemlry.aM(5)ae rot wmmteomae crosl complCe or aquae. oppmhrimerNOW' EaeprazoVelwiserequree ey law, MOmmgstar shall notes respor¢ele lo- any VaThg eeclvms. damages or oNa losses revNy han. or relates M. Mis irRo-matim,e°a, anaysesmopirvmsu Mal ise iM1isr~crf is slgge- w~m•.. mmral sales lireraerell ~pliwek n ml5r ee geceeetl m acmmpaniee bya gaspectl¢, ° eglrvaWlt. antl elaclomre stareman Release tlate 0430-2008 FINRA Members. For internal use a client reporting purposes only. Page 8 of 60 Town of Southold • Portfolio Snapshot "°~°"°"a`~ ~°^~'^""` E382,390.88 5&P 500 TR To(a119 hdtlirgs as o(M-30.2008 Type Holtlilgs %of Holding 7-tlay lYr Y 3Yr SYr tOYr Max Front Max Back Date Assets Value 8 Yieltl Re[ % j Ret % Ret % Ret % LoaO % Loatl % AIM European Growth A Load Waived - AEDAX.LW MF 03-2008 9,60 36,694 - -4.04 :09.57 25.11 13.88 NA NA American Funds Capital World G/I R3 - RWICX MF 12-2007 7.75 29,634 - 5.39 ;17.04 20.52 11.48 NA NA BlackRack Global Allocation A LW - MDLOXLW MF 01-2008 7.31 27,971 - 11.53 14.77 17.06 10.83 NA NA Oppenheimer Main St Small Cap A LW - OPMSX.LW MF 12-2007 7.15 27,324 - -13.95 f 8.25 14.30 - NA NA Oppenheimer International Bond A LW - OIBAX.LW MF 12-2007 6.96 26,595 - 14.04 r ~~A 0.76 12.76 10.28 NA NA American Funds Grth Fund of Amer R3 - RGACX MF Oppenheimer Small & Mid Cap Value A LW - OVSCX.LWv1F BlackRock Equity Dividend A Load Waive- MDDVX.LW MF Oppenheimer Svat Income A Load Waived - OPSIX.LW MF PIMCO Total Return A Load Waived - PTTAX.LW MF 12-2007 01-2008 01-2008 12-2007 12-2007 6.34 6.33 5.67 5.00 4.87 24,233 24,219 21,668 19,125 18,612 - 1.66 - -7.91 - 3.64 - 7.02 - 10.52 12.11 12.67 14.11 7.96 5.66 13.56 19.69 16.10 8.87 4.92 9.26 9.25 8.04 6.69 6.41 NA NA NA NA NA NA NA NA NA NA Goldman Sachs Government Income A LW - GSGOX.LVUv1F 01-2008 4.41 1fi,869 - 6.55 4.37 3.86 5.37 NA NA Oppenheimer ValueALoad Waived-CGRWX.LW MF 01-2008 4.13 15,810 - -6.94 8.80 13.fi5 4.69 NA NA Oppenheimer Rising Dividends A LW - OARDX.LW MF Ot-2008 4.10 15,666 - -0.65 11.07 13.24 4.59 NA NA Oppenheimer International Diversif A -OIDAX.LW MF Ot-2008 3.67 14,021 - -2.50 - NA NA BlackRock S&P SOO Index A - MDSRX MF 03-2008 3.61 13,815 - -5.17 7.64 10.03 3.29 NA NA Oppenheimer Port Series Equity Inv A L - OAAIXLW MF 01-2008 3.41 13,034 - -4.14 10.12 - - NA NA Oppenheimer Port Series Active Allo A - OAAAX.LW MF 01-2006 3.30 12.632 - -3.29 8.87 - - NA NA Oppenheimer Port Series Moderate lnA -OAMIX.LW MF 01-2008 3.24 12,374 - 0.68 772 - - NA NA • Oppenheimer Port Series Conserv Inv A - OACIX.LW MF 01-2008 3.16 12,084 - 2.58 6.59 - - NA NA Performance Disclosure • The performance data quoted represents past performance and does not guarantee future results. The investment return and principal value of an investment will flucNate thus an investor's shares, when redeemed, may be worth more or less than ffieir original cost Cunent performance may be lower or higher than return data quoted herein. For performance data current to the most recent month-end, please visit http://advisor.momingstar.com/familyinfo.asp. See Disclosure Page for Standardized Returns. OteoB Menirgsur. NI Riglb n¢mee. me mm~nmxn, earn. analyses atl opimor¢ cmmine0 neon n) ncM1de Va mReeniai ma propiemry nlamaUOn m Momingsbr. 121 mryrot oe copal m rmisuuwnm, nl eo mccmvrtum imeslmeit aeris oaeee by Mevxgsur.ll ae povNetl mklylw nlama4mal puposesaM VnNee are roc an onemdy ar sellasewily.am ls)are rot waRarrtetlmtecmect canpkveearmrare. ®o~PP~~rb~a+r~fivda' FxcRn as alreiw~ze regmree q ia++. Momngsmr snai m ce resporrsmie r° aryvaeng esrswrrs, eamagee dlie mssa reswug aen, w reialm m. tuts mlemaom.eau. ameses or opm~ms ar me~r use. ma rgwn rsw{ple~ mmmi saes umraore.ll ~pormeemuslcepsmmeacmrrpaneegayospem¢.eeluvaicx.am eiseosore smtenem. Morningstar RatingTM' Disclosure for Load-Waived A Shares 9 of 60 • This disclosure page is being presented because the following report reflects Sometimes investors do not have to pay the front load. For example, the A share a Load Waived A Share. Not all investment reports will include this disclosure. class is often used in definedtontribubon retirement plans, such as 401(k)s, The A Share class Morningstar Rating is provided on this page as a side-by- and fund companies generally waive the front load for plan participants. Fund side comparison to the Load Waived A Share class security, companies also reduce or waive the front load for individual investors who com- mit to invest above a certain amount. • • Ratings and other statistics for load-waived versions of the class A shares of mutual funds reflex the investor experience for those individuals who do not pay the funds' front-end sales load, such as retirement-plan participants. The load- waived rating supplements the Momingstar Rating for the original A share class, where all load-adjusted measures reflect the maximum front load. Background Most mutual-fund companies offer multiple share classes of funds for different types of investors. The industry convention is to label these share classes with letters and to structure them with different fees. Typically, A shares have front-end sales loads and lower ongoing expense ratios (compared to other share classes of the same fund). Additional Details 1 i Load-waived A shares are displayed and treated like a separate s' re class, and most data is the same between the original A share and the I~atl-waived share. The statistics that are different include load-adjusted mear~lres, such as the Morningstar Rating, rating-related scores and returns, tax-.;~Ijusted returns, and any percentile ranks based on these measures. To b~religible (or load-waived ratings and retums, the fund must be an A share cla.;s, must have a front load and must be domiciled in the United States. Morningstar does not calculate load-waived ratings for B or C share classes because fund companies rarely waive the loads on these funds. .Risk and RMranAofile 09-30-2tg6 . AIM European Growth A Load Waived 3Vr SYr 10 Yr tm funds 90 funds 39 funds Morningstar Rating'" 3* 4* 4* Morningstar Risk Avg Avg +Avg Morningstar Return Avg +Avg +Avg AIM European Growth A 3Yr SYr tOYr 1m funds 9n funds 39 funds Morningstar Rating'" 3* 3* 4* Morningstar Risk Avg Avg +Avg Morningstar Retum Avg Avg +Avg Momingstar Rating Disclosure The Overall Morningstar Rating is based on riskadjusted returns, derived from a weighted average of the three-, five-, and 10-year ~d applicable) Morningstar metrics. ®zooa rnommgsur. au aigMS aesareo. me mmrma<ce. aaN. mayrcs ab m~mmrs rmuirce na-a~a (rl ncaoe Me mr[amua! me prmrletnry Immmaum a[ Mdrvngpr. fzl may m[ce cmlm m reels[eetnm. (s)meo[crosutue lmxMxn aerKe ortaeaq MOmiysur,(a(aregwieea SOlHy tw aemmanmal P^poam am Maetue are m[an onermlrryu uoaseorlry.aw(5l aremwarran[mmcecmmt mmplmaw acmrne ®Ia~rrauraP farm[ u IXlrerxlse requreebr lau. Mtmngffir gull nm ae resmr¢ale to arrytraeing eecisias, aamages w mte' IoS56 revltirg from. ar relates ro. Nis vamma[m, eau, magus m mmiam or Mar me. Th'rs report Is smple- mmUl ssles la¢a[uell applie4n'e rt mW ae pe[mM a accormanietl Ey a rymp2Ri5, u emrvalett, aM ei5cbsure 518[emerM1. Release date 0430.2009 ~ FINRA Members For internal use or client reporting purposes only. Page 10 of 60 AIM Euro can Growth A Load Waived Damali Memirysmr Rlg' Imxpt Type Temi Asaels Mamingsm Gt P **** 17-0397 MF _ Europe Stock 1W ""~~ 101 Europe Stock Inresbwat srkle t'~Trba' .'~,_`~., ~+~c'rSGu~eP `'akT ® ® ® ® ® ® ® ® ® ® ® ® FWItY Duatey Returre 1st Oa 2b Qtr 3b Dv 4N OV iotal% _ gD g0 90 98 94 97 92 96 92 95 _ 5[ock% 2006 14.36 2.52 3.41 14.9fi 39.37 2007 6.14 6.13 2.15 0.77 14.19 2008 -8.63 -640 Bailing Remms 1 Yr 3Yr SVr 10 Yr Irrept Sttl MOnWy -4.04 - 25.11 13.88 16.61 S[d Ouartedy -1.70 _ 2649 14.28 1fi.48 Total Return -4.04 19.57 25.11 13.88 1fi.61 +/~ MSCI Eafe -2.2fi 3.32 4.69 7.22 _ +/-MSCI Eur -2.41 200 4.18 7.04 %Rank Cat . _ ........................ 60 .............. 28 .............. 23 ............... 7 ............... ............ No. in Cat 115 101 90 39 7-0ay Yieltl - Rrlarmnxa Ouebmn The Overall Momingsrer fla[ing k based on risk-adjurted reNmS, derived fiom a weighredaremge of the three-, lrve-, and 70-year (d appl&abkJ Morningstar mebics. The per/ormarrce data quoredrepresents past peAotmance and does rro[guaranree /uNre results. The investmera return andpdnripal value of an invesbnent will fluctuate thus en irn2stolsshares, when sold, maybe worth more orkss than mein orginal cost Ga°MN of 510,000 ~ AIM European Gro.Wl 551,105 Gt Avg Egope Sw S20g2 - Intlele MSCI Eare NE 522.230 ® ® 1075 14.26 23.76 22.98 17.30 15,62 22.36 2969 31.27 40.86 42.63 39.90 NAV _ 4062 Efi 61 -3.28 -24.71 -9.71 43.19 32.93 13.05 39.37 14.19 -6.40 Total Return % _ 2069 39.58 10.88 3.27 6.23 4.fi1 12.69 -0.48 1303 3.03 -244 +/-MSCI EafeN 12.12 5068 5.72 -482 8.6fi 4.65 12.05 3.61 5.66 033 -1.92 +/-MSCI Eur Ntl 4 4 17 67 26 22 17 39 16 35 73 %Rank Cat _ 76 112 139 148 151 133 131 717 118 109 115 No of Funtls in Cat Cunmtpedomrence maybe bwer mhigher than reNm ~~% tmg% Snon% Net% Share flg Share JJ Tmal Stales % data quotedherein. For per/omlance data currerrc to the most Cash 7 7 0 0 7 7 since Amoum 0 Toul Fuvtlarrame Assert 12200] 28%Turmser Elate rererrt nronN-end, please ca/1 8 00. 959-024fiar visd U.S. Sfa9.e 0.0 0.0 DO ® 56 mil Aim Treasurers Ser Tr 3.82 wwwinvescoaimcan Non-U.S. S[ceks 923 00 92.3 ® 56 'I AIM STITG tlAS I Saks CRarym • Prenlfntl Loatl % Deletred Loatl % Management Fees % 12b1 Expense % Prospacros Goss Eayansa Ratio % 3Yr 101 NMs Morningstar Rating"" 3* Morningstar Risk Avg Morningstar Return Avg 3 Yr Standard Deviation 12.50 Mean 19.57 Sharpe Ratb 1 17 MPT StausN¢ Srardartl IMex MSCI Fate Ntlt Alpha 2.48 Beta 105 R~Squaretl 8544 12-Month Yield - 30day SEC Yreltl - Potendal Cap Gains Exp - Family: AIM Imestmmts MaregecClas Olsson Tenure: 10.5 Years Bontls 0 0 0 0 O D ml qu eets r5t 3.02 . . . ® 198,D80 Porsche Automobll Holding SE 248 .~; r m >59~ist~; I _Gs Older ........ ... . a0 ................. .. 0.0 0.0 ........................ 2 mil InValo[ Z.35 : > Total 1000 0.0 100.0 180,409 Ronne Holtling Lttl 2.32 NA E S 9mY ~ Pordolp Pon Rel Rel .. ® ....... .............. . 67,724 Nestle . ............... 2.31 NA Vwe elme faowm ia<ge Sta[stics Avg Inge: ca[ 185 000 Deutsche Bcerse 2 03 P/E Ratio TTM 12.5 1,00 095 8 9fi 264 Syngen[a 193 M° P/C Ratlo TTM 8.4 7,05 094 316586 InBev 1.91 0 89 smaa P/B RaDO TTM 3.3 1.41 1 12 72 448 Puma AG Rutlott Dassler Sport 1.90 0.25 Geo Avg Mkt 13199 0.38 035 .... 8 ...... ........_..... ............_ 1 mll Konirlklfke BAM Grcep ...._ .... 1.85 1 ~ Cap Smil 869,606 Vimpel-Communications ADR 1.77 ~ r..atmom fiyle 2 mil WPP Grp 1.7fi - ,s,, - ~o ,_-,F ~~ _` 301,929 Bayer 1.68 , ., , _ ~ ~ Ira ~ wgn Avg EO Duration - 520,261 Imperial Tobacw Gry 1.63 SYr torn Avg Efi Maturity _ 90 NMS 39 NMS kx4 Avg Credit Duality _ 4* 4* t Avg Wtd Coupon $edm Wi~ranga Stales % Nel MSCI Ea(e Avg +Avg aw Avg W[tl Price _ - '~' Information Ecomm~y 99 097 `Avg +Avg m Software 0.7 7.35 ^~ SVr 10 Yr Cmdtamk/az BwW% ' Hartlware 1.9 O.W AAA ® Metlia 2.0 7.43 1243 20.18 - 25.11 13 BB ~ - ® Telecommunication 5 3 0.92 t.62 0.57 A ........... ... ................. .... .............. d _,. Service Ernmmy N.0 1.01 BBB - ® Healthcare Services 92 147 Best Fit lrgex BB _ © Clxlsumer Services 6 8 1 43 MSCI Faro NDTR D B ............ ... ................. . ......._...._- ~ B i S i . 79 7 . 2 80 1.28 BelowB us ness erv ces . . 1 ~ NR/NA © Firlmtlal Services 14.0 0.52 9102 d MarlutaeNrig Economy ~fiA 1A7 ® Comumer Goads 18.4 1.42 Reywul Expew e Stacks % Rtl MSCI Fate ~ IrltlusVial6ootls 20.0 1.08 Americas 0.0 0 r E 6 1 0 73 Greater Europe 100,0 144 gy ne . . Greater Asia 0.0 0.00 0 Utilities 1 S 0.27 OgecBve'. Europe Stack Min mum IRA Purchase: 5250 Ticker: AEDARLW Mirvmum Intltlal Purchase: Y1,000 Min Aura Irrvestmen[ Plan: E50 Purch ase Cces[mints'. 02W9 Mwnimarsly. Nl RigHS R~.rvee ile mfumatim.Mla. aiNyxz oral Cpna¢wiGiretl been Ol lee°m tlce coMgaiealantl prcgcerary irearmaum NMVningstar Rl may m[LecWlm mr~uViplrta. tit )I11\II,YYI(11® 131 ep rat rmsuarte lmeshnmtaavlm Mace ay Mpmlrgsur,(Il are gvncell solerylor nlumaumM pupos¢aM err9ue me not an dfa rp Gry pr xllesewiry.aM(Sl ae rot wartanlm to he carctcmpixe or acmrae. m` )nn nouf Euepl as rtMrwix reiuirM Ey law. Mmnng9a Ysll nN M rt5gnsMe Ip any Vaamg att2au. aamageza~ MM1n lotus realing hdn, pr relatM [a NI5 allama4m.llala. analyses pr cpmipls p Mnr I6e. iM1S e~nt iz sµple- mmtal zvles li[era0rte II ypLCaOk II mu0. aegam N a acmmpanreG Uy a gaspema, a eWnak [. atl IFlsclovre 4aRmmt. ReWse date 04342008 ~ FINRA Members: For in[errml use w client reportirp purposes only. Pace 11 of 60 American Funds Capital World G/I R3 Ovmll Momingatar Rig' iarR,r Type Total Assets Morningstar Gt ***** OGO6-02 MF 87,904.5 mil Worltl Stock 463 Worltl Stock Ouartey Rewrns 1st W 2rW W 3rd Ov 4N W total % 2006 5.99 0.34 5.07 9.05 21.84 2007 2.35 8.76 5.07 0.18 1700 2008 7.77 -3.70 Trailly Rewns 1Yr 3Vr 5Yr lOYr Irirep[ S[d Mvahly 5.39 - 2052 - 15.14 Std Quartetly 5.51 _ 21.33 _ 14.51 Total Return 5.39 1704 20.52 71.48 15.14 +/~ MSCI Eafe 7.17 0.79 0.10 4.82 _ +/-MSCI Vdtl 7.Bfi 468 5.34 646 %Ranh Cat 15 15 11 5 No in Cat 583 .. ,., 463 390.,. .. 201 ... .,., 7-tlay Yield _ FeAoawaece 0uduvue the Overall Morningstar flatirg rs based on riskadjrrmd refumy derived iron a weighted average o/me three-, frve-, and 10.year (d applicable] Morningstar mebics. The pedonnar¢e data quoted representspastperlonnance and tlces rrotguaran(ee firnrre result[ The investmen return antl pdncipel value oleo investment will flurnrete thus an invesrofs shares, when sold, maybe worth more orkss Man Meir original cost Cunentpedormencemay be borer w highwthan return data quotedherein. Fwperlomsnce data Curren to the nrost recen moniriend, please ca11800-411-0180 or visd wvrw. emericanlunds. corn. • • Sks durges FradFM Laatl % NA DelemW Loatl % NA Frud Esgmrses Maregement Fees % 0.38 12b1 Expense % 0.50 ProspecWS Gross Eaperne Ratio % 1.13 3Yr 5Yr 10 Yr 163 NMS 390 fuMS 1m lulls Morningstar Ratirg"" 4* 5* 5* Morningstar Risk -Avg -Avg -Avg Morningstar Return +Avg High Pogb 3Yr 5Yr 10 Yr 5GtY3artl Deviation 9.fi8 9.57 12.80 Mean 17.04 2052 11.48 Sharpe Rata 1.25 7.68 064 Mm $vasucs S,nMare lydex Bes[FitlMea MSCI Eafe Not MSCI EASEA Ntl0 Alpha 3 39 2.4fi Beta o7s Dn R-Squared 73.45 77.99 12-Month Yield 2.14% 30-tlay SEC Yreltl 2 73 Potential Cap Gains Exp 18.39% Assets Family: American FunOs Manager. Stephen E. Bepler Tewre'. 15.2 Years ® ® ® ® ® ® ® ® ® ® ® ® lmesmrmt Eryk h 04 I9 09 19 02 ]9 01 03 9] 90 83 kock% _........ ............ ............ ...... ............ .... ........... ...... ......._-.....leek .......... ......._. ....._... .. ........... . ............ ....... ................ mk GowM Ol S/0,a0a ... ............... .... ............. ... .............. ..... ........... .. ., ............ ..... .................fipy Amer Fallds LapWrlaG 539.650 Lat Avg. Wula Sta 522,)]7 . . ............. .... .............. . _........... .............. ... . ............. Zia. - IrNex: MSLI ENe Ne 522,430 ®I®I®1®I®L®I®L®I®I®1®L®4k _ _ _ _ _ 11.11 2980 33.78 36.44 41.76 4441 42.59 NAV 1765 1587 2694 1.09 -521 -747 3845 7890 14.27 21.84 17.08 3.10 Total Return% 16.88 -0.e6 -(789 1525 16.22 847 -0,13 134 0.74 -4.50 592 026 +/-MSCI EafeN 7.89 -844 2.00 7426 11.60 1141 5.35 4.18 4.79 1.7B 805 0,58 +/-MSCI WItl Nd 24 17 30 29 17 22 %Rank Cat _ - - - - - 403 399 438 491 581 629 No. of Furls m Cat ~Mt101~: ~' ,~r~4 . . ~eer~ ~:~ gym. ``~ a,'~,"~; ice':?-- Fanrposum % Lwg % Short % Net % Slere Clg Slare 335 Tpb15tacks % Cash 14 6 0 0 14 6 vrce Amouv 96 Tpvl Fuetl-Ininme Assert U $. Stocks . . 17.2 0.0 . 17.2 Osa007 30%TVrorer Ratio ® 13 mil EON 2.42 Nan-U.S. Stocks 65.5 0.0 fi5.5 ® 16 me RWE 1.91 Bontls 2.0 0.0 2.0 ® 100 mil Banco SantaMer 188 Other 0.8 D.0 0.8 ................. .................. ............. .......... 21 mB Bays 1.66 Total tOD 0 0.0 700.0 ~ ® 48 mB Microsoft Cw atgn 1.51 Earriry Style POmd10 Port Rel Rel ........._. ............ ................. © 24 mil Nwo-NONisk A 5 _...._.._. ......_ ....._.. 1.38 vaue alma Gown large Statenks Avg Irdex Ca[ O 74 mil Oageo 7.38 P/E RaUO TTM 15.6 1.25 0.98 B 82 mil Koninklgke KPN 7.29 Md P/C Ratio TTM 9.7 1.21 093 ® B mil Roche Holding L[tl 7.20 smaa P/8 Ratb TTM 3.0 1.26 106 8 26 mil VMentli 1.02 Geo Avg Mkt 52fi14 1.51 1 92 """"' """"""" 8 28 mil ATBT, Inc ~~~~~~~~~~~~ """"""' L01 Cap 8mil O fib mil HSBC Hldgs 0.99 Fved4rcmre Sryla ® 301 mil Vodafone Gry 0.98 ® 28 mil FrarrR Tekwm 0.87 soon lire Eorg N w^ Avg ER Duration ® 25 mil General Ekttdc Cwnparry 0.82 Avg ER Maturity _ Mm Avg Credit Quality - ww Avg W[tl Coupon - ~°Wegrbgt Sracls% ReIMSLI FnIe Avg W[tl Price _ 'Q' Irdormaripn Ernnvn7 19.5 1.71 m Software 22 4.15 Ged[M.yYS aoM% ~ Hardware 3.7 1.02 AAA - ® Media 1.9 1.31 AA - ® Telaommurradon 11.8 2.02 A ............ .................. ............... . .......... .............. ................. O Service Eemonty ............. 37.8 _....._ 099 BBB - ® Heatthrare Services 7.1 1.13 BB e - 8 Consumer Services 4.0 084 .......'.. Below B .......... ............ .....- 0 Business Services 3.0 0.59 NR/NA _ © Finandal Services 23.8 D.BB d MavdacWreg Ecorromy /27 .... 091 Consumer GOOtls 10.5 081 Repioml Exposure Stxks%ReI MSCI Eafe ~i Intlustrial Goods 13.5 0.72 Americas 26.3 _ e 0 E 103 1 24 Greater Europe 53.6 0.77 n rgy . Greater Asia 20.0 0.65 ~ Odlitks 8.3 1.52 Objective'. World Stock Minmum IRA Purrlase: _ licks: RWIC% Minmum lrrcdial Purchase', SO Min Aum lmeshnen[ Plan. - Purchase Constrains: N ONOfi Manima~r. An Ryan Res~ea. Tne rerwn,azim.aala. araiyses am opm~con,a~eiwe~„~mwe ore cmnae,riaima Paprieary iMamaaanNMVn~r~arar a, may rot5e cw~m orrwiareNxee, MC~RNIN6~fMm pl ao mr cmumrte maunun aeece oneree M Momrytmr.l41 areprvvv3ea spicy rw nlamazimai puryosg em a~eeree ore rim ac one m iuy a seu a semmr. me is) ore wr.vartmnm m 6e [maze cwrpxve or amnare E¢rac m unerwsereluree q law. Monmgsra~ man mr v rspomoie 1u any o-aemg eecis~ms. aama9es a are. posses ~gunm9 Ram. w reNrea[v, mu iivemarmn. aaa. amiyes a opmva w mar use mss report mswpie- msrcni salts Inmmure. n appril'aole a ml6r ee pramm m az[oirynmea q a vosPaC116. G vurvalair. one olsciovre Ldrerr;m. ReNax Este 04302009 FINRA Memhers: Far internal use a client repoNng purposes only. Page 12 of 60 American Funds Grth Fund of Amer R3 ~~Ii MemingfWRtg~ IKept T,pe Total Asxts Morningstar Gat ***** OS-21-02 MF 513.866.5 mil Large Growth . ~a~w 1458 large Growth • ~IIC4.~IVwas'a R -'r~-~aa< ~'..T~~ ® ® ® ® ® ® ® ® ® ® ® ® EWirrs~esm.m EMe puaRnly Rewrrs 1st W 2nd W 3b Otr dth W Toral % 83 BB B6 82 81 a2 88 89 BB 09 a] Sm[k % 163 1.37 6.37 1062 .....,. ...... ......... ....... ......-..,.toot 2006 4.30 """' 2007 1.29 764 4.32 -2.77 70.58 .. ........ ........ ....... ........ ........ ............. mll P+°wN Of ft0.999 .... .......... ........_......~ ~ Amer Funds GN Fun 2008 7.97 - - - 328 ...,....... .............. .......... ......_ 535.078 ................ ............. ...... ....... ........... ... ............. ...... ................ dpi Trailing Rewrrs lYr Sri SYr 10 Vr Ircept S19AOvg'. forge Grow Std Marrthly 166 - 13.56 8.90 .......................... ....... ... .............................. ..... ................ m - IMee SfP 500 TR Std Duartetly 0.48 _ 14.22 _ 8.11 522.488 Total Return 1.66 12.11 13.56 9.26 8.90 +/-SGP SOOT 6.34 386 294 5.37 _ +4 Rus 10006 1.89 3.25 404 7 60 %Rank Cat 41 17 10 3 ............. .............. ................. ............... ................ ........................ p No in Ca[ 1738,...,.7458 1205..,,., 566 ....,,., ® ® ® ® ® ® ® ® ® ® ® ® (~nagmlEle _... 7-day Ykld - ~Y' t~ .,~..~ m ya,*M.- .~ u ..a.-, ..~ .zy ~~wyL :~i_+:,.ey ~ '`-........ 6.. ' __._ I k.~ ~ !.u yz :..:. ,~a:sr} :Y :v~~. iaale..anu oisrJ^sma _ _ _ _ _ 1841 24.34 27.ID 30.50 32.45 33.52 32.42 NAV The Overall MOmingstarRating is based on risk-adjusted 26.53 3L45 4533 717 -12.49 -22.26 32.31 11.59 1386 1062 1058 -328 Total Re[urn% reroms,derived (come weighed aasrage of the three-, -6.83 2.88 24.29 7631 -061 016 3.63 0.71 895 -517 503 1.75 +458P 500 TR five-. and 70-y>•ar ldapplicabkl Morningstar mebics -395 -725 11.18 29.63 793 561 2.57 5.29 B6O 1.55 -1.23 2.18 +4 Rus 1000Gro The performance date 4uoted represents past peAormence .. ................ ...'..... ................ ._........... .............. ................ .. 21 18 9 19 fib 9 %Rank Cat and tlces notguarentee future resukc The inveSfineM ..........-. ... ........-. ............_ ... ........... ................. ...... .. .. ................ mNm andpdncipal value o/an investmentwill /luctuate - - - 1311 1400 1495 1642 1748 1062 No. of Fulls In Cat thus an invesror's shares, when sold, may be worth more orkss Man dreir original cost °!_ffY~{a~0.`~• ~~.4_W '' .~~'~~'~" I rl" ;,;... ,,, ,}lee ~ . Current pedormaace maybe Mwerarhigher than reNm WrryosieonX Lag% Shdt% Net% Share Clg Share 2B0 TotnlEmcks _ ~% date glrotedherein. For r/omrence data cadets ro the most Cash 14.0 0.0 14 0 sirvx Anlourrt 47 Total Fivealncpme Assns Pe 09 2007 26% Turrover Ratio rerentmonUcnd, please ca11808-421-0780 or visit U.S. Stocks 65.5 0.0 65.5 e 7mil Google, Ina 250 wwwamerxaMunds.com. Non-U.S. SIMJ6 17.7 O.D 17.7 ® 129 mil Miaosof[ Capaation 2.37 Bonds 28 O.D 2.8 ® 170 mR OraUe Coporatbn 1.98 ;~{-..-rte..,. ~~w~vvax* aq,~ - s r Other DD ,,. o:D.,..,..,,-,o:D O 38 mil Schumberger, Lttl. 1.94 ^."Y.!®... a~a~4m''RiWM~hbArtl'^u: ~~kyal~t ............ ................ Total 1000 D.0 100.0 O 20 mil Roche Holdl Lttl 10] Eal65 URl'e6 .......... Eglry Style Pdddio Pdt Rel Rel ___...._. ............... ............... Front-End LoaO % NR O 115 mil Cisco Systems Inc. 160 • Va4e ale4 Gewtn Smuui[s Aay IMea Wt DelerreE LaaE % NF larye Fi 73 mll General Elec[nc Comparry 140 P/E Ratio TTM 19.3 1.18 D 97 O 77000 gerkshlre Hathaway Inc A 1.24 Flatl F.apeaes Me P/C Rado TTM 12 4 L22 D 91 ® 57 mll Fannle Mae 1.17 Management Fees % 0.27 Smau P/B Ratio 7Th 3.1 1.23 0 B6 6 45 mil Target Corporation 1.15 72b1E se% 0.50 Geo Avg Mkt 47715 0.92 1.42 """'""' """ """""' """' ' ~ Ca Emil 96 mil Lowe s Companks Inc. 1.12 Praspecws Gross Expense Ratio % 0.96 P 29 mil Altria Group Inc. 1.11 FieaWrewre Style 8 164 mil Spdnt Nex[el Corporation 1,11 _~--~ '_=~ ~~ ~r: shm hs tmg A EO Duration ® 18 mil Sullca Energy, Irc. 1 03 3 v s v 10 Yr Blgn Avg EH Maturity - ® 51 mil Nokia Corporation ADR 1. W 1.458 NMS 1,205 tuMS 566 /uMS Mel Ayg CretlR Duality _ Morningstar RatingTM 4* 5* Siz ~, Avg VJttl Coupon _ ~°M'rglriags Starxs% ReI5fP 5001 Morningstar Risk Avg Avg Avg Avg VJttl Price - '~' hdarallstion Eearran7 25.9 129 Morningstar Return +Avg +Avg High m Software 6.D 1.6D 3Yr SYr 10 Yr eAea't A"'~95 Bdre% ~ Hartlware 13.7 1.37 Stantlartl Deviation 9.40 9.53 1737 AAA - ® Media 39 1.29 Mean 12.11 13.56 9.16 ~` 8 Telecommudcation 24 0.70 Sharye Ratio 082 106 0.40 A ................. ....._. ................ - d Sersdce Ecalanry 39.3 0.95 BBB - ® HeaMrzre Services 12.9 1 13 Mm Stavui¢ SratlaO hdex Best FitlMea BB - $fP 50o tR Mdrmgstar 6m G g ® Consumer Services 9.5 1.31 Alpha 414 4.49 Below B ............. .................. ..........._....- 0 Business Selvkes fi.7 142 Beta 0.87 0.54 NR/NA ©.Flnarlclal Sevices .93 ,055 R-Squared 6709 76.57 d Matlldae°lrsg Eeenan7 35.7 091 ® Coreumer Goats 7.1 0.86 Regwul Enppsue StorM% Rn SfP SOOT ~ llduaVidGaatls 130 0.98 12-MOnm YiUtl - /vnericas 85.3 0.85 30-day SEC Yield - Greater Europe 10.3 _ ~ Energy 15.5 1.09 Potential Cap Gann Exp 1 A.81% Assets Greater Asia 4.3 - Q Utllities 0.1 0.04 OperaOpts Family: American FalMls Objecfive: Growm Minimum IRA Purchase: 5250 MaragerJames E. @astlo Ticket RGACX Minimum Intitial Purchase: 2250 Terere~. 22.5 Years Min Auto lrnestment Plan: 5250 Purchase Cmsvain¢: N • Oa(pa Mahmgvar. All Ggms Pssar~.IM inNmdim, data. analysesaM WinM5 fLlMinea ndcn (11 F[IUOe Ne wnri0misl eM poprceury nlamarm W MpmingzMr. 521 may mr ce cgrea a redvnMel. IIr\IIIIIII~GIWIO (•]14o mlcm4iWeim6Nwnt atlhre MaeJ by MOmrcJftar, lllare Frwitletl solelylm nlema4ma pupWez atl rMrNde are mt vi dlab0y'ar sellase[a~ry. arp l5 ae nd wartweB]N~dllSl. mmple[ew arlvtYe. ~~~~ ))nn IEOU' Ettepl a rlMrnu rryume0 Uy W. MenmgsGr gull nrt ~ respcrt[4k la aty Va]Irg Je[uima, Wmaps v Mid bse reSUILrg hdn. or relare0 [o, Nis inlamal~. Jna. aralt'ts m Wmlw¢ uMet i¢e. iM1¢ reyut ¢v{pe mtlrtal sa16111eaN¢ X alQlifdM1le h m.61 [¢ F~ 1M a acmrryanletl Ly a raVSPedYS, a eWwalpM1. aN OixloSFe SlalerRrtt. Morningstar Rating'TM Disclosure for Load-Waived A Shares 73 of 6n • This disclosure page is being presented because the following report reFlects Sometimes investors do not have to pay the front load. For example, the A share a Load Waived A Share. Not all investment reports will include this disclosure. class is often used in defned-conVibution retirement plans, such as 401(k)s, The A Share class Morningstar Rating is provided on [his page as a side-by- and fund companies generally waive [he front load for plan participants. Fund side comparison to the Load Waived A Share class security. companies also reduce or waive the front load for individual investors who com- mit toinvest above a certain amount. `J • Ratings and other statistics for load-waived versions of the class A shares of i mutual funds reflect the investor experience for those individuals who do no[ pay the funds' front-end sales load, such as retirement-plan participants. The load- ' waived rating supplements the Morningstar Rating for the original A share class, where all load-adjusted measures reflect the maximum front load. i - Background Most mutual-fund companies offer multiple share classes o(funds for different types of investors. The industry convention is to label these share classes with letters and to structure [hem with different fees. Typically, A shares have front-end sales loads and lower ongoing expense ratios (compared to other share classes of the same fund). Risk and Retun Protrla 04-30.2W6 Additional Details Load-waived A shares are displayed and Vea[ed like a separate share class, and most data is the same between [he original A share and the load-waived share. The statistics [hat are different include load-adjusted measures, such as [he Morningstar Rating, rating-related scores and returns, tax-adjusted returns, and any percentile ranks based on these measures. To be eligible for load-waived ratings and returns, the fund must be an A share class, must have a front load and must be domiciled in the United States. Morningstar does not calculate load-waived ratings for B or C share classes because fund companies rarely waive the loads on these funds. BlackRock Equity Dividend A Load Waived BlackRock Equity Dividend A 3Yr SYr 10 Yr 3Yr SYr 10 Yr 1183 funds 932 funds 436 tMtls 1183 tMtlS 932 funds 436 fulls Morningstar Rating'" 5* 5* 5* Morningstar Rating" 5* 5* 5* Morningstar Risk Avg Avg Low Morningstar Risk Avg Avg Low Morningstar Return High High High Morningstar Return High High High Morningstar Rating r7isc/osure The Overall Morningstar Rating is based on risk-adjusted returns, derived from a weighted average of ffie three-, five-, and 70-year ~d applicablel Morningstar metrics oxae Mommgvr au nlgln agmm. me Imnmaz~m. aam, malyses ana worms wnmalee nem nl maws nc mmmmlal one ywnemry imvmaeai MMOnngaW, RI may mr ae cwlee a rmisueuea. n do cot rmmrme maamalraMlce MaeJ by Mmnirgwr.(a)are pwleee coleybmlpmahgml NOmaS mM tlerelae are mtan dle'mhlrymsella seorhy.and(5are nor wammeo eo becmece. cdrplete oramrtare ®aPPaaJrafinerrurda Excgxxuhe,wiserwwrm by law. Mammgsta Shall nq pereswmmle la anytraung ettlsldtt. namagezw nne losses revlug hdn. or relalee m.m¢NUmarvs.eaza. arayses ar winid¢wmeir ree ih,srwvt ¢sµgle- wwrm+a malul sales amraurell awlrc8ale it mIW pe pecm 1 a acmrtpanaze by a peWanui a ewrvalev. xtl eisclosure vammmr. Release tlate 0430-2008 FINRA Members: Fa internal use a Bien[ repOrtinO purposes only. Poe 14 f fi0 BlackRock Equity Dividend A Load Waived °~'I Memingstar R[g- Ircepf Type Tmal Assets Morningstar Cat ***** 10-2194 MF _ Large Value 11831arge Value • .pMtO[I/'Y'L2~~' ~~'-~ ~ ~=;-_°_' ® ® ® ® ® ® ® ® ® ® ® ® Imesmrrart Style OuartulyR ream ls[W 2rdW 3rdW 4NW iotal% E41tY 94 a/ 89 BS W 02 94 92 89 92 91 Stmk% 2006 5.97 2.82 1.81 7.25 18.97 ................ ... .............. ................ ..... ............. ............... ... .......,-.....loot 2007 3.59 7.15 4.20 -1.02 1447 .......... ... ........._.. ... .............. ... ........... ............... ......................eat frown aft0.000 2008 -7.20 - - - ~25Z .............. ......... ...... ..... ............. ................. ~ BIaCkRttkE Oi ..................fipr 9uay f30.672 ...... .................~ Lot Av irailllg Rennm lYr 3Yr 5Yr 10 Yr Incept ~fz 9499 Loge Valu S[d Mmthly 3.64 - `6.10 8.04 1212 ............... . .............~ -lrcler. 56R SOOm 8[d Quarterly 2.55 _ ifl23 7.48 11.89 f22.4ae Total Return 3.64 14 11 .610 B W 12.22 ...._....... ..........,_ { .......... ..._.,. ............. .......................10 +/-5&P SOOT 8.32 588 548 4.15 _ +/- Rus 1000V 12.61 5 75 °3.25 2.07 %Rank Cat 2 1 ; 3 6 ...._. ......_ ~ .._... ...... .......... .... ...... ... .. ....... ...... .................u No In Cat 1448 1183 , 932 436 • ......... ® ® ® ® ® ® ® ® ® ® ® ® Iwitninmrvrxs Ousrale 7-tlay Yieltl - , „u p,m Pr~O~'"~0ia0lOSO11 14.67 13.67 73.10 •12.79 1158 10.12 12.58 14.27 15.75 p18.12 20,14 19.55 NAV The Overall ManingstarRatirg is based on risk-adjusted 28.20 14.30 2.60 11.63 -4.32 -11.50 25.92 14.92 12.37 78.97 14.47 -2.52 Total ReMn % reNmydenied lroma weighkd average of Ne ffiree-, -5.16 -14.27 -08.44 20.73 7.56 10.60 2.76 4.04 7.40 3,78 8.98 2.51 +/-S3P 500 TR fnz-, and IO-year (dapplicabk) Morningstar mebics -6.98 -0.32 -4.74 4.62 1.26 4,02 -4.11 1.57 5.26 -3.27 14.64 175 +/-Rus 1000Va1 The pedamance data 4wtedrepresents pastpeAOrmance . .............. ... ......_..... ............... .... .............. .................. ... ............. .. ........... .................. and does notguamntee NNre results. The imestmem 39 34 fib .30 43 .5 fie , 24 4 40 1 11 % Rank Cat mtum andpdncipal valve o/an invesbnem will fluctuate 428 518 638 809 892 961 1050 1220 1296 1371 1432 1524 No. of Funtls In Ca[ thus an invesmrs shares, when sold, maybe wodA more or less than their on inalcn2 "_.-_ '~ ".•""~'"">~;"''S".sm_ M-tl .! '' -1iGh `~'== i?`v'T= by 9 PaMHO~ ~' - .. - ._.7g,.ffi.n:..~aSreauaa ' ~' - ~~ '£us. ~.x.'F=. - 3c®#d?..-®s'~.. CuventpeAOrmdnCe maybe bwerahigher than reNm CongosiamX Long% Shat% Net% Share Clg Snare R6 iomI SLAGS % data gwfea heroin. Forpedormance data cunem to the most Cash 13.4 2.9 10.4 sirce Ampum o coral Fueblmare Assets 162007 9% iumwr Ratio recentmonmcnd, please call8p7-441-7761 or visit U.S. Stocks 73.2 0.0 73.2 ® 300 mil Menill Lyr¢h Liquitldy 5er 13.13 www.blackmckcom. Non-US. Stocks 166 D.0 7fi9 ® ggB,fi00 EseonMobilCaporauon 3.40 Bortls 00 0.0 0.0 ® 2mil Ai&T, Irc. 293 ~w~rxs tsn• -:~ ; '.: ~ ~ rrvrMt: Other O 1 0.3 -0.2 #!~~5, _a~'r'ai ~tiit:;«3ra...§Y eT~ ......_.'.. .................. ...............~..... ® 2mil BHP Billiton Lttl 2.39 Sales du Total 103.2 3.2 1000 ® 639,438 Chevron Corporatlm 2.36 Eaytiy Styx PoNOIb Port RJ Rel ......._._ .............. ............_ ......_.......... FraNFatl loa0 % NA ® 442 570 Rw Tinto Lttl ~ 2.18 • VaYe ewtl Gowal StatrsOCS Avg Irdex Cat De/erred Lwtl % NA Large ® 1 roll Gerlerol Electric Company 2.11 P/E Rabo TI'M 14.3 0.87 1 03 ® 1 roll J.P. Mogan Chase 6 Co. 2.10 Fwtl Fapwrus Ma P/C Ra00 TTM 10.1 0.98 1 12 ® 1 mtl Bdra of Amenca Coryaatron 2.04 Managemera Fees % (1.617 finial( P/B Rauh TTM 2.4 0.96 1.18 ® 592 000 Total SA ADR 1 8g 12b1 Expense% 0.25 Geo Avg Mk[ d9442 095 120 ...........~. .._........ ......~.......~. ..._.... Prospeeaas Grass Enpense Ratio% 1.03 Cep Emil 8 479400 Deere6 Company ~~~~~~~~~~~~~ 1.84 ® 613,400 Raytheon Company 174 ._ - Fwdlrewrre Style ~ 884,900 Venzon Commur4cations Inc. 1.50 `•••- ~ "' - ~ _ ^^ ~ . '•'' "' Srert m twg w Avg ER Duration ~ 420,000 ConocoPhillips 1.47 3 Y 5Yr 10 Yr ~ Avg EO Maturay - ® 1 mil Chigroup. Irc. 1.38 ,M 1183 Nnds 932 fuah 436 Nrds Mel Avg GEOif Duality MomirgsGr ReOry 5* 5* 5* lav Avg W[tl Coupon - Sego WeigNdrga BmGS% Rel sap SOOT Momirlgsror Risk Avg Avg Law Avg Wttl Price - 'Q' IMOrmation Ewnomy 10.8 OS3 Maningsror Raum High High High m SaRware 0.5 014 IYr eVr to Yr Ca°wl Arwlyws mna% 0 HdrdWare 2.4 0.24 Stardartl Deviatpn 8.96 8.94 11.79 AAA - ® Media 0.9 0.31 Mean 14.11 1fi.10 8.04 ~ - ~ Telecanmunicatlon 6,9 2.01 A ........_ .. .................. .............. ................. ................ Sharpe Rata 1 Ofi 1.37 042 .................. ........_....... ........... l7r Servtoe Eearomy 21.7 O.fia BBB - ® Healthcare Services 37 032 MPi 6mOStics Smnaara lMex Bg[Fa lrtle: BB _ 56P 500 i11 MSCIWrcla NO1R_D B ~ Consumer Services 1.5 021 Alpha 5.93 2.42 Below B .~. ~...... .................. .................- 0 Business Services 0.3 0.07 BeG 0.86 0.88 NR/NA © Finantial Services 16.1 0.94 uaretl 72.30 87.44 d Martufaehaag Eeatany ~ fi7.fi ~ ~~~ ~ ~ 1.72 Consumer Gootls 9.5 1.14 72-Monty Yleltl - Regraral Eaposue Snicks%ReI SaP SOOT ~. Intlusbial Goods 27.4 207 Americas 86.4 0.86 30-day SEC Yield - Greater Farope 6.3 _ ~ Energy 20.6 144 Potential Cap Gains &D - Greater Asia 7.3 0 UOleies 10.1 2.84 OpefaOms Family: BlackROCk Objective: Equity-Inwme Midmum lRA Purchase', E7,000 Manager. Robert M. Shearer Ticker: MDDVX.LW Mirimum Incitlal Purchase: E7,000 Terure: 6.5 Years Min AUto lrwe4men[Plan: E1,000 PurchaseCmsVain[s: • OXaB Mlmingsrar. wl Rlgem Resenallhemlormatim. sera. myysuaM OpAlwm rmmimtl haen(1)mcWeme mmiaauial mtl popnttary mlamatan otMUniagsmr, (2)may rat he crgn9mrMisaihmei. u^nul,f~lyf~p (3f ao mrcrosmue lmestmmr atlnm oaaetlq Mwnlrgsmr(1)areprweetl wlely fm nlamamm~ papmes ma eer9ae are ratan dlerm Mry or ssllasmnay. m(s)aemwmameo m6e cmttt completes acware. n'( )Mn J' Exert az W¢wke reyrea by law, Mwnm¢Ur 91NI ntt La res~Mmle lu airy VMny asisv6, tlamagu or Wls losut revttirig hdn, or relarea W. Vns nlmnaam. tleta. aralyxsa cplnme m Mnr use. ibis rryprr Is srgtle~ mmgl sales Ilraawe amplicaak it must nepmelea a acmrreaniee bye prrryertm. a equrvalev, ae tlisclmure mammwrt 16 of 60 CJ • • Morningstar RatingTM' Disclosure for Load-Waived A Shares This disclosure page is being presented because the following report reflects a Loatl Waived A Share. Not all investment reports will include this disclosure. The A Share class Morningstar Rating is provided on [his page as aside-by- side comparison to the Load Waived A Share class security. Ratings and other statistics for load-waived versions of the class A shares of mutual funds reFlect the investor experience for those individu GIs who do not pay the funds' front-end sales load, such as retirement-plan partic~~an[s, The load- waived rating supplements the Morningstar Rating for [he oric!nal A share class, where all load-adjusted measures reFlect the maximum~ront load. Background Most mutual-fund companies offer multiple share classes of fords for different types of investors. The industry convention is [o label these share classes with letters and to structure them with different fees. Typically, A shares have front-end sales loads and lower ongoing expense ratios (compared to other share classes of the same fund). Sometimes investors do no[ have [o pay the front load. For example, the A share class is often used in defined-contribution retlremen[ plans, such as 401(k)s, and fund companies generally waive [he front load for plan participants. Fund companies also reduce or waive the front load for individual investors who com- mit toinvest above a certain amount. Additional Details Load-waived A shares are displayed and treated like a separate share class, and most data is the same between [he original A share and the load-waived share. The statistics that are different include load-adjusted measures, such as the Morningstar Rating, rating-related scores and returns, tax-adjusted returns, and any percentile ranks based on these measures. To be eligible for load-waived ratings and returns, the fund must be an A share class, must have a front load and must be domiciled in the United States. Morningstar does not calculate load-waived ratings for B or C share classes because fund companies rarely waive the loads on these funds. tusk and Retian 1kMde 04342006 BlackRock Global Allocation A LW 3Yr 5Yr le Yr 99 raaas 79 furtls 43 FunOs Morningstar Rating"" 4,t 4• 4+ Morningstar Risk -Avg -Avg Avg Morningstar Return +Avg +Avg +Avg BlackRock Global Allocation A 3Yr SYr 16 Yr 99 funtls 78 funds 43 funtls Morningstar Ratlng° 4+ 4,r 4+ Morningstar Risk -Avg -Avg Avg Morningstar Return +Avg Avg +Avg Morningstar Rating Disclosure The Overall Morningstar Rating is based on risk-adjusted returns, derived from a weighted average of the three-, five-, and 70-year (d applicable) Morningstar metrics. ezaoe Mwnnps«r. ail ayms aesmm. me InmrmM~m, aau, malyses am m~nav cmmiree n«m (rl .ewe de mmwaoal a,e propremry Im«mar~ar a m«nmgsrar, fz) may nor oe copies a rmissnnxm, (s~ eormr cmmrme .waumr satire alwea q Mamirgaar. (d) arepwmetl mlelylw nlammional papmes am rrermore are nor an ofl« m dry «sell a seonrty, aM (s(ae ru wertamee m ce rmat compMe«awrme. OppmhimerrwG' ~eepr a. anewvse requiresgwv, rnommquar tau naceraponsare i«ary vmng aeris~s. eamages or an«mssu ewnmq o-om.wrew«aa.u:s imwmaaw,.mra.arelysesw opnuecwmea u:e. Th¢rywr is srpple- ^•r«w.... mortal sales lnnanee If ~pllr dlenmat ~e preceNG«e«nmpanieagapwipeais.w~quna~erM1,ap alsaosure starer~t Rakase date 04-30-2088 FINRA Members'. For internal use a client reporting pur poses only. Pace 16 of 60 BlackRock Global Allocation A LW Overall Marugstar Rtg• Inttp[ Type TwlAssels Mamingstu Cat **** 7f1-21-94 MF _ Worltl Allocatlon 99 WOrltl Allocatial } y~ • ~ - m~ N;+~'^i-.vvti Eu:i R :~~ ® ® ® ® ® ® ® ® ® ® ® ® EeYIaMM[51)4e puatery Rewrn 1st W 2rld W 3rd Do- 4N W total % 3fi /B 5/ 50 50 19 62 65 61 55 /3 Strck % 2006 6.16 0.45 266 5.92 15.94 ............... .............. .................. .. ........... .................. .........-... . 100k 2007 2.04 5.72 5.55 2.50 16.70 ............... ................. .................. ......... _....... ...................... . sole Gowen of fl0.aaa 2WB -1 77 040 ......... ............ .............. ............ .. ............... ........ ................ .~ ~ BladJtmk Glo6aiA . - - - 573.699 Uaiirg Rewrra 1Yr 3Yr 5Yr 1p Yr Incept ............... ....._... ........_.. .......... .................. ....................... .Ia fat Avg:Wald Alb 5[d MonWy 11.53 17.06 10.83 12.13 526.984 - Sttl quarterly 12.35 _ 18.37 10.6p 12.03 .. ............... ............. .......... ~................. .... ............... tOk - IMex. pow Jones Mo Total ReNrn 11.53 14.77 17.06 10.83 12.13 .F 623,548 _ +/-Dore Jones 9.75 529 4.87 380 ............... .............. ................. ....... ........... ................. ............... a .1re +/-MSCI WId 14.W 2.41 1.88 5.81 %Rank Cat 12 17 19 22 ................. .... ............. _.... .~ ................ ............... .................... Ile No in Lat 147 99 78 43 ® ® ® ® ® ~ ® ® ® ® ® ® Orwrole ~ ...,..,,. 7aay Yleltl ~ _ ~ (welvn ra taJay - ~~ryya~ __ :t. 1'~ .. ' : >vuer71r1 t,•ah4` rt _ ..L:".A'~• .:~+.~'.':.v °.`;°Y...:. P1rtiiminee OQdOfw1 14.13 12.60 14.01 73.10 12.83 11.41 14.97 1647 16.89 18.16 79.78 19.86 NAV The Prerall MomingstarRating isbased on risk-adjusted 11 11 0.37 27.42 8.56 1.88 -7 96 35.97 14.27 10.32 15.94 16.70 0 40 Total Return % reNms, derzred fiomaweghtedaverage of the Mree-, p.30 40.08 9.43 10.77 4.39 -091 8.80 113 3.07 4.04 B.fiB 1.82 +/-DOw JOnesM (rve, end 74year (Aapplicable) Morningstar metrics -4.65 -23 94 2.18 21.73 18.70 11 92 2.87 -045 p.84 -4.12 7.67 4.68 +/- MSCI Wltl Ntl The Performance date 9uofed2Presentspastpedormanre .............. ..... ............. ..._........ .. .......... .................. ..... .......... .............. .,............. 53 B7 22 16 31 70 10 61 12 53 14 27 %Rank Ca[ and does rwtguaranroe future resu/6. The imestmerrc , , . reNm andprincipalvalue o/an invesbnent will /luctwte 41 44 50 52 47 43 66 64 fi4 108 133 170 No. of Fulls m Cat thus an investors shares, when sold, maybe worth more or less than their original cost ,_..._.a:-sn - 2,- R?'~'s'=r -. s'~ "ra4~'^*~~ :~a1a, t;m .,. _ "~{,~f.3(1~.,,,i ,,;v ~.r,'y~,_ : qti ~_~ u.y: .:'sawt„..,~--._ a~.~'„~~,,.. -_.._r.;vU,.>~.~,~... Currerrtpadanndnce maybe lower or higher than reNm Canaposiaon% lorg% $hr[% Net% Share Crg Share 548 3aMl Stocks % daro quotedherein. Forper(ormance data currero ro Me roost Cash g sirce Amoum 73 iopl Fuel-Inmrtle 5 g 33 3 23 Assns recentmonNend, please call BL07-441-7762 or vkrt U.S. Stocks . . . t0~i0p1 10% immva Ratio 271 4 4 22.8 # 157 dl Fx Contract -Sell Ustl -14.58 wwwblackrockcom. Non-ILS. Storks 32.8 00 32.8 # 160 d1 Fx Corrtrec[-Buy Jpy 6.24 BOMS 29 0 0.0 29.0 # 833 mil Fx Comract-Buy Eur 5.13 -, ,,..r>r I m' a~"-.: {~„ -a w- r = ~ J > Other ............... . 8 3 2 B 5.6 .. .. ............. ........................... # ldl Fx Conva<t-Buy ChF 4.68 ~~ _. .; .. „a .,...>z S Total 130.7 30.7 100.0 # 517 mll Fx Cadratt Sell Gbp -4 26 ~~ pm9a ............. ..._....... _..._... ..... . ............. ........ FrmOlnd l.oad% NA FaMky ftyk PaNdio Pon Rn Rn # 11 m11 iShares Russe1120001ntlez 3.31 De1mrW lead % NA vaue ewa Govnn urya Skatistio Asy Irgea Carte 2.233 S6P 500 Mar OB 3.19 • P/E Ratio TTM 16.1 098 559 m11 US Treasu Note ry 2.61 Fur4 Expemes Mu P/C Ratlo TTM 9.9 _ 0.93 545 mll US Treasury Note 2.375% 2.53 Maregemerrc Fees % 0.75 smao P/B Ratio TTM 2.3 - 0.76 5 mll s[ree[TRACKS Gdtl Shares 1.90 12b1 Expense% 0.25 Geo Avg Mk[ 30353 - 103 "'""""'~ 395 rtx1 ~~~~~US Treasury Note 2.5% ~~~~~~~~~~~~ ~~1.88 Ptospeetirs Gross Experkse Ratio % 1.18 Lap $mil 310 ml US Treasury Note 4.625% 1.38 ~` `~ nom ~ Flxa:dlrrwrwf ~ 276 mil US Treasury Note 4.875% 1.23 '~ ~Rt ~`~ ii ni 260 mil US Treasury Note 0.875% 7.21 , . ... a:> -3- wart Im Long R h Avg ER Ouratim 1.41 3 Yr 5 Vr 10Yr 9 # 143 mil Uk Conv Gip Avg ER Maturity 4.p1 1.17 99 Nrds 7B lulls 43 funtls M~ Avg Credit Quality BBB nor Morningstar Ratirg 4* 4* 4* ~, Avg Wttl Coupon 343 SasaerW~beBs S[ocks% RelDwv lau Morningstar Posk -Avg -Avg Avg Avg Wttl Price 116.68 '0' INOrmation Eeonany 17.8 - Maningsmr Return +Avg +Avg +Avg m Software 2.8 - 3rr svr tour cAe°"A"%Ysz olat mm BoM% ~ Hartlware 5.4 Stantlartl Deviation 574 6 82 10 77 AAA 351p ® Media 1.7 - . . Mean 14.77 17.06 10.83 ~ 1 ~ ~ Telecommunication 7.9 Sharpe Ratio 1.71 1.88 p.fiB ............ ................ ................. O Serlrce E eamzmy 36.8 _ BBB O.OO ® HealNrare Servirxs 10.7 MPT $tadsGes SlaMard lll~ BeSL FI[IIYJaM BB 1.170 _ Dow Jorxs Mlxl MSCI Em (Emag Mkrs B 09 ® LAf511rl1a Services 0 2.8 _ Alpha 5.45 2.69 Below B ................ . .............._.. ....................0 00 © Busiress Services 7.8 _ Beta 0.86 016 ryIUNA . 60.90 © Financial Services 15.4 R~Squaretl 77.75 83.20 d MamdaenaaaB Economy ~~~48.4 _ 0 ConsumerGabs 11.4 - Raquel Expovae Storks %Rel Dwv lures ©. Intllntrial Gootls 18 4 12-Month Yieltl - Americas 57.2 _ 0 E - . 12 2 30.tlay SEC Yreld - Greater Europe rergy 15.5 _ . Potentul Cap Gair¢ Exp - Greater Asia 27.2 0 Utilities 3 4 - Operatiarrs Family. BWCkRock Otyectlve'. Mutti~Asset Global Minmum lRA Purchase: E100 Marraga: Dennis W. Stattman Ticker: MOEOXLW Minimum Inutlal Purchase: $1,000 ieaare'. 19.3 Years Min Auto Iores[ment Plan: $1,000 Purchase Constraints: ®kepa MenirrJelar. All Ggnte P¢me4 the mlwmanm.Bata. malyses all apiniora mnaime lxrein(1l mcWetlre cpdgmrmlme PppriNary imumarim plMOninggr. Rl maymt ee copier areei4ridvee. /-~ (1~~pm (al eo mrcmvnure rngtmmr genre onaeeq MOmmgsar.(Il ore prw~eea agcy le mlamatimal plnposesam mernae are mran dlaao dry or vuasemmy.am(s(ore nm wanmrm tone cmmc cmgne oramrae Ml 1RNIN6111W1 cagn as mneMrsere9uree q law Menmgstar snap rent oe mspuumie rm arry vaevg eecisdaa. eamagesm one losses resurcmg van. a relaree m. rds imamaem. ono. araysesa opnwa a voa use ms roan rs swpe~ nwn~i vies oremwe nyperaele n mwr m PaMai a am~mea hya po<peva, a equnalmr, one eivomre aannerv Release tlate 04362009 I FINRA Membea. For internal use a client reporting purposes only. P q 17 f 60 BlackRock S&P 500 Index A ~aO MOmxystar Rlg- Itxxpt Type Tgtal ASaats Mranigslar OM *M 04-03-97 MF 8974.6 mil large &end 1695 Large Blend t G5'3~E' . ,err f d ., t~, ei. D artery Rewms 1stW zmW are DU INOU i°ral% 21706 4,13 -0.57 5.53 6.50 15.17 2007 O.SB fi.01 1.88 -3.42 4.96 2008 9.52 -5.23 Trailing ReWrm 1Yr 3Yr 5Yr 10Yr Incept Sttl MontNy -5.17 - 10.03 3.29 6.80 Sttl quartedy -5.57 _ 10.74 2.91 640 Total Return -5.17 7.64 1003 3.29 6.80 +/-SBP SOOT -049 0.59 -0.59 -0.60 _ +F Rus 100D -0.55 -0.99 -1.20 -0.95 %Rank Cat 58 58 57 63 No. in Cat 2104 1695 1316 630 7~tlay Yreltl - Por1°rmwa puebauae The Overall MomingsfarRating u based on risk-adjusted reroms, derived from a weighted arerege o/Me aYree~, five-, and 10-year ldapphcabkl Momingstarmehirs. The performance data quoted representspastpedormance and does notguamntee firnrre resuhs The investment return andprirmipal value of an imesarrent will //actuate thus an invesrofs shares, when sold, maybe worth more orkss Man dreir original cost. Cunentperlonnancemaybe bwer ahigher Man rerom dal quoted herein For performance data current ro roe most recentmordhcnd, please ca11800-447-7762 w vuR wwwblackrock.can. sd.a p.rpes • Frprt{M l4aatl % Degemetl Laatl % NH MA Fad Faparses Maragemerrc fees % 0.01 12b7 Expense % 0.25 Raspeekus Gross Expense Ratio % 0.62 3Yr 5Yr tOYr 1.695 NeAS 1,316 NMS 6301urds Momirgstar Rating"" 3* 3* 3* Momirgstar Risk -Avg -Avg Avg Morningstar Re[um Avg Avg Avg IYr 5Yr 10 Yr Smntlard Deviation 8.88 8.70 14.73 Mean 7.64 7003 3.29 Sharpe Ra[b 0.40 0.78 0.05 MPI Stadsdcs Stardatl Irdea Ben Fit IMe~ S6P 500 TR SEP 500 TR Alpha -0.53 -0.53 Bern 100 1.00 R-Sgwretl 99.98 99.98 72-Monty Yieltl - 30-tlay SEC Yield - PorentialCap Gains Exp 78.28% Assets • Family: BlackRock Manager. Debm L Jelilian Tercare'. 21 Years ® ® ® ® ® ® ® ® ® ® ® ® EWkYmrmr 9ryk 97 98 99 98 96 9B 99 99 9a gg Sark % ® ® ® ® ® ® ® ®I ® ®,'® tllF arKrw fi011 ~ BlackROCk S8P 5001 E19,3B6 ~d' ~ fat Avgaxge Blen E187B4 tar - Irdex. SaP 500 TR sz9,667 to R 1254 15.28 18.00 16.16 14.05 10.75 13.62 14.81 15.26 17,36 17.96 17.02 NAV _ 27.95 20.18 9.64 -7248 2262 28.01 10.21 4.38 15.77 4.96 -5.23 Total Re[urn% _ -062 -0.86 -0.54 -060 -0.52 067 -0.67 -0.53 -0.62 -0.53 -0.20 +/-5&P 500 TR 0.93 -0.73 -1.Bfi -0.04 -0.97 -1.88 -1 19 -7.88 -0.29 -081 -0.34 +/- Rus 1000 26 49 6fi 49 54 37 49 68 36 60 52 %Rank Cat 804 989 1089 1345 1468 1526 1611 1743 7980 2090 2207 No. of Furls in Ca[ ~_ ____.,_. -' _13~ ,E~»,-~°-mas°~zL;ui~.,er~:;;sr.~~- a `~v.:r ~ ~. ~b3~ ~~ 4 ° GrlrposiemX Lag% SMR% Net% Shore Chg Shea . . 502 iotnl5arks . . ,,. . % Cash 04 7 3 p 0 since Amwd 1 Total Fi L-Irxme Aswrs , . 12~z007 4% ilrrnsa Ratio U.S. S[odcs 99.5 0.0 99.5 A 2 il E M dl C Non-U.S. Stocks 0 0 0 0 0 0 m xzm o grporation 3.91 Bonds 0.0 . . 0,0 0 0 8 3 mil General Electric Canpany 3.19 Other 04 . OA 11 4 ® 2 mil ATBT, Inc. 1.99 ~ ~ ~~~~~~~~~ . ~~~~~~ 8 2mil Microsoft Cwpwatron 1.96 Total 100.3 0.3 100.0 ® 887,994 Procter&Gamble Comparry 1.86 Equity 3ryle PlMdio Port Rel Rel .. .......... O ._,..,... 815,537 ..................,..............._........... Jlttmsgn6Johnson .......,.........,_....._............... 1 58 vale alatl CmwN urge $IMR[ICS Avg IMea fat ® 599 929 Chevrqn Cnryaaam . 1.53 P/E Ratio TTM 15.6 0.95 100 9 1 mll Bank of Arnenca Corporation 1.45 Ma P/C Rato TTM 9.9 0.96 095 8 398591 In[ematpwl Business Machln 1.37 small P/B Ratio TTM 24 0.96 096 ® g77 gpq J.P. Morgan Chase & Co. 1.26 Geo Avg Mkt 49537 095 130 """"""' O " l Z """"""' ' Ci S I Cap Smil ml sco ystems nc. 1.24 ® 2 mil Pfizer Inc. 1.22 8ur:almmre Style ® 253,003 Apple, Inc 1.08 sln^ mr km9 Avg Eff Duration 6 680,309 W~ Mart Stores, Inc. 1 07 Hyn - Corpaatwn 1.05 Mm Avg Eff Matudry Avy Cretli[ quality _ uw Avg Wttl Coupon - Avg Wttl Price _ Crerkt Anyds Bwd % AAA - AA A BBB _ BB _ B Below B - NR/NA Reyaul Expomre Storks % Re158P 50O T Amerkas 1000 1.00 Greater Europe 0.0 - GreataAsia 0.0 - E'enu w:grnn9s Srocks% Rel saP SOOT 'Q' IMarmrtian Erotlpn7 2113 1.01 m Software 3.9 1.02 Q Hardware 99 0.99 ® Metlia 3.1 1.04 © Telecommunication 3.5 1,01 O Sernee Econwny ~ 10.2 1.00 ® HealNCare Services 11.8 1.03 ® Cwsuma Services 7.3 1.00 Q Business Services 4.4 0.94 © Piwnaal Services 1fi.7 0;98 d Martufarpurarg Economy 39.4 . 1.00 Corturner Gootls 8.8 7.07 Q Intlusmal Gootls 13.fi 1.03 0 Energy 13.4 0.94 0 Utilities 3.5 0.99 Objective: Growth and Income Ticker, MDSR% Min lwmlrrvestment Plan: Y1,000 Minimum lRA Purchase: E1.000 Minimum lntrtial Purcnase: E1,000 Purchase Cmstrairrcs: oxpa Men'mgear. All Rigds RaesN.iMmformaum.Ban. analyws are rpinom mnumeeM1aen 1171rLltlerte mlmeanelam proprieNryiMpmarkndM°dngsar, 117 may wrtrc'ogetl or reainelnrm. /'~ I`alrApCN (3l eo mrcmwwre imesrmelt aence onaeaq MUnirgnar. 141 ore Pms'nea slay for nfemaumd pupaes antl aerelae are Man one Nhry or sellassmiy.aea(s(are rice waeadeamcecme¢cmmpletereacarxe. Ml /~NINSYINI Fsxept a oaelwlse requoee Bylaw. Mamingsta shau nd be resporaD,le Im arty Vaavlg eensmra. eamzges m Mea lossn revlrmg han. v relxea ror. Nis iMmmaom. aara, sulyses or ogrvds or Ner uzelnis rqm rs aygle~ mental sales literewell glpliraple it mlN tie pece0ea aacmmenee 6yaprospec[us,wequrvalen.aM arulowre date M 18 of 60 • • Morningstar RatingTM' Disclosure for Load-Waived A Shares This disclosure page is being presented because the following report reFlects a Load Waived A Share, Not all investment reports will include this disclosure. The A Share class Momingstar Rating is provided on this page as a side-by- sidecomparison to [he Load Waived A Share class security. Ratings and other statistics for load-waived versions of the class A shares of mutual funds reflect the investor experience for those individuals who do not pay the funds' front-end sales load, such as retirement-plan participants. The load- waived rating supplements the Morningstar Rating for the original A share class, where all load-adjusted measures reflect the maximum front load. Background Most mutual-fund companies offer multiple share classes of funds for different types ofinvestors. The industry convention is to label these share classes with letters and [o stmcture them with different fees. Typically, A shares have front-end sales loads and lower ongoing expense ratios (compared to other share classes of the same fund). Risk andReuen Profile [14.30.2006 Goldman Sachs Government Income A LW Goldman Sachs Government Income A 3Yr 6Yr 10 Yr 3Yr SYr 10 Yr 3fi6 furltls 341 [ands 224 funds 365 rands 341 funM 224 furltls Morningstar Rating"' 3* 4* 4* Morningstar Rating° 2* 3* 3* Morningstar Risk Avg Avg Avg Morningstar Risk Avg Avg Avg Morningstar Return Avg +Avg +Avg Morningstar Return -Avg Avg Avg Momingstar Raring Oisc/osure The Overall Momingstar Rating is based on risk-adjusted retums, derived 6om a weighted average of the three-, five, and 10-year (if applicable) Morningstar metrics Sometimes investors do not have to pay the front load. For example, the A share class is often used in defined-contribution retirement plans, such as 401(k)s, and fund companies generally waive [he front load for plan participants. Fund companies also reduce or waive the front load for individual investors who com- mit toinvest above a certain amount. Additional Details ! r Load-waived A shares are displayed and treated like a separate share clan and most data is [he same between the original A share and [he load-waiv~tl share. The statistics that are different include load-adjusted measures, suc as the Morningstar Rating, rating-related scores and returns, tax-adjusted returns, and any percentile ranks based on these measures. To be eligible 'qr load-waived ratings and retums, the fund must be an A share class, must ,;ave a front load and must be domiciled in the United States. Morningstar does no[ calculate load-waived ratings for B or C share classes because fund companies rarely waive the loads on these funds. ®zore Mpniyslar a: xiglas aim rre Immmx~. n tlomt crostiLLfe imrestmen aWlre cflaeJ ~y Mmmin. Excglt aS afMllNSe [eluted ~y law. MUninytdr Hall na mortal sales Iltgaure II ~, litaak LL mLSt ce pecMe4 0 a equvalml. am Oixlovre yaletrait. Tl may mtbe rmim or rmimenm. are mwartanlmmcecmect comDlnea acmrale ~w p~eaJ~r'rn~vrsvW' aralnesarynwtSd MCr uselau r¢pl is wrrae~ Rekaze Oa[e 0430.2008 I FINRA Members: For internal use a client reportire pu ryoses only. P o 19 f 60 Goldman Sachs Government Income A LW OveraO Morningstar Rtg' Irtrept Type Total Assets Mamigstm Cat **** 02-1093 MF - Intermetliate Government 3fi51ntermetliate Government • „~ P ;W 1008- v..... k' x. _ ~ r.. ® ® ® ® ® ® ® ® ® ® ® ® SMa OuartertY ReNms 1stW 2na pa 3b pu /[h p0 iotal% Fu' am I~e 79 90 79 73 R 64 89 ]5 ]8 8I 97 BoM% 2006 -043 -0.03 3.19 1.04 3.78 .............. ... .,.......... . .......,...... ...... .,. ....... ............... ..,.... ........-.....tmx 2007 1 40 -0.49 2.74 3.12 6.90 .................. ............. ..... ......... ........ _............. ....,................... ~ Grewor o<510.000 2008 1.3fi 1 40 ................ ................. ........... .......... ........ ................ ...................... ay ~ Conman Saons Gohn . s1e,a37 TraPirg Kearns lYr 3Vr SYr ip Yr Ircept _ .................... ~Ut Avganrermeda S[d Manthty 6.55 - 3.86 5.37 5.96 fnRd Sttl Quarterly 6.86 - 3.95 540 5.99 ............... .. ............ . .............. ... .... ... ......... ., ............ ... ......... ..........,.za -Index. ul Agg Tonal Return fi.55 4.37 386 5.37 5.96 E19.W1 +/-LB Agg 0.32 056 0.57 059 _ .-......... ................. . .............. ....... ,....... ......... ................... t0. +/- LB Gvt -2.79 1.01 -0.45 -0.62 %Rank Ca[ 40 37 25 22 .............. ........_..... ... _.............. ax No. in Cat 389 365 341 224 ® ® ® ® ® ® ® ® ® ® ® ® Oueru. 7-day Yieltl - w. ,_ - (whmn~~aY ~ r.r ~ u xWiam y,~ ,,µµ,~~.. .m ~ . u 3 r ~~.. rme "e~ ~ xw ~ ~ ~~ wi . *~Ra41 "i ~ v ~ ~ PO~a"p ~a~b° , 74.56 14.44 - .. 13.50 14.24 14.34 . w 14.99 14.84 1 ...« i. .a 4.76 14.64 14.62 75.01 15 03 v v.3 i: NAV The Overall MomingstarRedrg is based on irsk-adjusted g 31 7.64 -1.14 12.04 7.36 9.45 3.11 . 3.70 2 OS 3.78 6.90 1 40 Total Reurn % reNms, deirvetl fiom a weighted arerage of Me Mree-, five, and ig-year (Aepplicable) Momingrtar mimics. -0.34 ~1.D4 -0.32 0 42 -1.08 -0.80 -0.99 -0.63 -0.37 -0.55 -0.06 -0.55 +/- LB A g9 -0.27 d.21 1.09 -1.20 0.13 -2.04 0.76 023 -0.60 0.31 -1.75 -1 19 +/- lB Gv[ The perfi7rmarrce data 4wredrePresents pastpedom7ance .............. .... ............ ... ............... ... . ,....... .............. ........ .......... .. ................ .............. anddces notguerentee fi7nrre resn7ks. The invesmrerrt 20 45 48 .75 26 37 7 .22 43 33 27 .64 %Rank Ca[ remm endpdncipal valve 0/an investmem will BuRUate 271 298 299 310 322 323 352 351 351 37p 396 396 No. of Furtls In Cat thus an investols shares, when sold, may be wortA more orkss Man Meir orr final cOtt. g ` .n"" ` °~"~` ~" C -' - 'm'4"C"'"" ~. ` " ~ ..u ~-' '7e ~' °'4 -.,: ' 8e.~i ~' ~:g tcy;~ _ xr. :t:u~. ~:.. ,. tt5..,.Sv_.s",:iaLas. p ~..t _,°.~cuad`a. Curtentpedormance maybe bwer or hgher than rerom Carpasiuan% mrg% 6mrc% Net% Share cng Snare p Total6rorxs % data rroted herein. For rlormance date cuiiem ro Me most 9 Pe Cash 20.3 sirce Anawd 52e Total Fixetl4nrome 3 5 16 8 Assds recentmonMend, pkese caI1800-621-1550 or visit U.S. Stocks 0 0 . . 10.200] 766% Tumostt Redo 0 0 0 0 . . . ® 73 mil US Treasury Note (Fat) 6.68 wwwgscan Non-U.S. Storks 0.0 00 00 ~ 71 mil US Treasury Note'FpI) 6 30 BonOS 166 5 83.2 83.2 . .-~+ n ~ «. ry ~ ..~ ~~~1pC ~ i l ~ Other ............. 27 ~ 2,1 -O.D Sy 63 mil Gr0053071rs Usd P F 4.SOW0 il G 59 004493 I -4.98 _...; a,: ; i ; .r"a',:a yys peryc Total ................ 188.9 ..............-..... 88.9 100.0 tY ....... m r ns U50 R F 5.00000 63 mil Gr0053071rs Ustl R V 03minbor ...... .................. 4.88 4,79 FraMEsM loatl % Nq Eraity Style PoNdio Po rt Rel Rel Xt ............ 60 mll FNMA 5 5% q 7g • De/ene0 Loaf % Np value alma Grw.m twee Star6ua Avg Inaex ~t ~ 59 mil GN04493 Ins Usd P V 03mllbor . -460 P/E Rabo TTM - - _ ~ 56 mA Gh[047181rs Usd R F 450000 454 FraM Fipanes mu P/C Ratlo TTM _ _ y3 56 mll Gr0047181rs Usd P V 03mhba -4.37 Marlagemem Fees % 0.54 Small P/B Ratp TIM - _ y3 53 mil Gr004121 Ins Usd R F 4.50000 4.30 12b1 Expense % 0.25 Geo Avg Mkt _ _ "" ® ......... . """' """ 51 mll FNMA 7% ~ ~~ ~ ~~~~~~~~~~~~ 4 22 Prospectus Gross Expetase Ratio % 1.00 Cap Emil 53 mil Ir1023431rs Ustl P F 128200 . -4.15 FixMlrcame 5 ~ 53 mil GN04721 Ins Usd P V 03mlibor d.15 -..~°' t&~~ °ma ^ 53 mll Ir1023431rs Ustl R V 03mlibor 3 84 - ` - - 5mrt tut twrl Ri9n Avg EO Duration 3.51 '~ . 3Yr SYr tp Yr Avg EH Maturity 4fi mil FNMA 6S% 3.76 365 Nah 311 Nnds 2241urtls 'w raea Avg Credit Oualiry - AAA Maningstar RaOng 3* q* 4* law Avg Wtd Coupon Sxaaly W 4A5 vipr~ kocks% Rel tB Agg Morningstar Risk Avg Avg Avg Avg Wttl Pace ~ 101.01 Irr(ormation Economy Morningstar Return Avg +Avg .Avg m - - Software _ 3Vr 5Vr 10 Yr Grbr Aruysrs 013120rn BoM% 0 Hdrtlwffie _ _ - $IarMdltl Deviation 2.56 3.26 3.32 AAA 9400 ® Metlia - - Mean 4.37 386 5.37 ~ 0.40 0 Telecommunication Sharpe Rado 0.04 0.22 0.53 A ................. ....,........ ~ ~ O Servtee Eemgmy _ - BBB O.W ® Healthare Services MPT Stsadi¢ Bragare Intlex Best Fh Irtlex BB 0.00 - - LB lyg lB Aggegate BarA g p W ~ Caasumer Services - Alpha -0.48 -0.48 Below B ~~~~~~~~~~ ................p pp 0 Business Services _ - BeG 0.89 0.89 NR/NA , p,pp © Financial Senvices R~Squaretl 93.36 93.3fi d E m Mamrfaeturng e aary _ - ® GoMllmer G00tls I Es ~ ° p0~e Bmcks % Rel lB Agg ©i IntlusUial Cords _ 12-MOnM Yield - s - - 3Oday SEC Yieltl - Greater Europe _ 0 Enor9Y _ - Potential Cap Gains Exp - Greater Asia _ 0 Uolitles u Family: Goltlman Sachs Marnger.James B. Clark ierere' 13 4 Years Wjecove'. Gwanmen[ Bond -General Minimum IRA Purchase: E250 Ticker: GSGO%.LW Mirvmum Imitial Purchase: f1,000 Min Auto Iwesdnenl Plan: E250 Purchase CmsOaims: .aaama~yYaaaea,ammm~giree~raaplwc~aeememahemra~~aq~~aryalmmata~orMm„ag.aralma,m,rcc~~wr~~Ba~ Nk~RNIN6SfM0 ydw. l4) are gwmee soiay nor nmrmmwnai p.pvs¢ am nerao-e are orr an die m euy o- sea a aecviry, one 1s ore m wanarrtm [a ce cmxc ramPk9ea acmrxe. a ce rapo-nale to my oaeng eenvaas, damages m anw msses rMUhnq nom, a reoteam, mis mivmttpn, axn, aaaiy5es a min~ww w men ise. ms repon a sype- w acmnpemN b) a gnspeni5. u eyurvalait aM elscNwre staremeR 20 or so • C J Morningstar RatingTM' Disclosure for Load-Waived A Shares This disclosure page is being presented because the following report reFlects a Load Waived A Share. Not all investment reports will include this disclosure. The A Share class Morningstar Rating is provided on this page as a side-by- side comparison to the Load Waived A Share class security. Ratings and other statistics for load-waived versions of the class A shares of mutual funds reFlect the investor experience for those individuals who do not pay the funds' front-end sales load, such as retirement-plan participants. The load- waived rating supplements the Morningstar Rating for the original A share class, where all load-adjusted measures reFlect the maximum front load. Background Most mutual-fund companies offer multiple share classes of funds for different types of investors. The indusuy convention is to label these share classes with letters and [o structure them with different fees. Typically, A shares have front-end sales loads and lower ongoing expense ratios (compared to other share classes of the same fund). Sometimes investors do not have to pay the front load. For example, the A share class is often used in defned-conbibution retirement plans, such as 401(k)s, and fund companies generally waive the front load for plan participants. Fund companies also reduce or waive the front load for individual investors who com- mit to invest above a certain amount. Additional Details Load-waived A shares are displayed and treated like a separate share class, and most data is the same between the original A share and the load-waived share. The statistics that are different include load-adjusted measures, such as the Morningstar Rating, rating-related scores and returns, tax-adjusted retums, and any percentile ranks based on these measures. To be eligible for load-waived ratings and returns, the fund must be an A share class, must have a front load and must be domiciled in the United Slates. Morningstar does not calculate load-waived ratings for B or C share classes because fund companies rarely waive the loads on these funds. Rrsk and Ream Prattle 09.30.2fb8 Oppenheimer Port Series Active Allo A LW Oppenheimer Port Series Active Alloc A 3Yr SVr 10 Vr 3Yr SYr 10 Yr 937 funds 717 furltls 422 funds 937 funds 717 FUntls 422 funds Morningstar Rating"' 4+ Morningstar Rating° 3,t Morningstar Risk High Morningstar Risk High _ _ Morningstar Return +Avg _ _ Morningstar Return Avg _ Morningstar Rating Disclosure The Overall Morningstar Rating is based on risk-adjusted retums, derived from a weighted average of the three-, five-, and 10-year (it applicable) Morningstar metrics m20oB Mommgsmr. Ali Rigms Reserm. iM Mmmerim. Deb. avlrsesaM Wnvn ~umee neem 111 uelWe tln con6tlsrtal a,a prepeebry iNmneem m MvnngsMr, (2) may mr be rapM w rMimbRea. (sl aoreecmvrtbe imesunen aewce meeegMbmgzur.(e7 are prowea soiegmr ntamaumm p.pmes am mermree are mr ac ongmeuym ssoasewiry.am(s(are mr wauammmnecmea compime or acwrxe. orvenndrrmrrrurda' r.c~r as ottniwiser~breagtaw, MOmigsur mat mx ee repmsek rm acy aaaeq aec~ore. aamayes or omulossm resumrg nom,ureureo m. rms MUmaum.eaM.anayses ar opimus ar mer use. rms repon is swge~ a..e-... metal sales llmraorell appliaele it mustbwsaleiaacconpanietlgapospecun.o-egrirvalsn.am mslavae vmenem. ' Release dale 0430-2008 FINRA Members For'memal use a then[ r poN n p p my p 9e 21 F ~ Oppenheimer Port Series Active Allo A LW Overall Momislgstar Rtg` Incept Type Total Assets Mamingstar Oat **** 0405-05 MF - Motl erate Allonti0n 937 MOtlerate AllOraoon • ~ ,A,. ~' ~.~ ~ -t~~`' ® ® ® ® ® ® ® ® ® ® ® ® Inresanart Style Q.wtey Realms 1stW 2MOfr 3r0QV 4th Drr ltal% 200fi 5.74 -2.22 400 5.9fi 13.93 .......-. .. .........-. . ..........- .. . .. 59 II ]5 .......- ... ........... ......._-.....talk SLOG% 2007 245 4.54 2.68 -0.10 546 .. ............... ... ............. ~... ~............. .... . ......... ...... __............~ WewNW310.W0 2008 8.08 .3.11 ........ .. .. ............ ... .............. ..... .. .......... ...~ ~ Oppaveimer l¢tue - - - E12,904 Tracing Rewrrs lYr 3rr SYr lOYr Ir¢ept ~ ~~ ~~~~~~~~~~~~~ ~~~~~~-~~~~ ....... ................ x~ ~UtAVg. MOderateA Sttl Monthty -3.29 - - - 7.91 SII.]BB Sttl Ouartetly -5.37 _ 6.25 .............. ... ............. .... ......._..... ..... ... ......... ................,. ... ................ pk -IMex. 65T9 Janes Mo _ _ Total Reurn -3.29 13.87 7.97 Eta u2 ./-Dow Jones 5.07 067 _. - ............. ............ ............ ...... ... ......... ........... .....................toe +/~ Oow Jones -1.51 1.46 - - %RankCat 71 18 No. in Cat 1137 937 717_,. .. 422 ................ ._........ ............... ® ® ® ® ® ® ® ® ® ® ® ® ~~ 7~ay VielO - ~ ~in~ ~ X897 hM R.__ '~ - . ! ~ z. :a ~': ' _ t '~ ~ ,°_°'y ~'2L R' Porlvtnanvv Rvrbnn _ . . . .. .._ _».. . , v 70.63 1183 11 88 11 51 S ^, NAV The Overall Mwningrtar Hating is haled on rule-adjustetl _ - - - - _ _ _ . . reNms. derived froma weightedaverage of the Mree-, - - - - - - - 73,93 5.46 3.11 - - Total Return % five-. and 70.year (Aapplicebk) Momingrtar mevics - - - - - - - - - 2.03 -2.Sfi -0.69 ./-Dow Jones M The per/armance data quotetlrep2sentsPartperlormance ~ ......._-.. ~ .......-.. .. . .....-. .. ,..,.,..374 060 -1.03 .....-. ..... ......... / Oow JOrresU ................ ............... antl does nOtguaranRe luree msWS. The investmem ..-... ........-.. .. ........-. . 13 58 90 ....-. ..... %Rank Cat .............. ............... reNm endprincipal value Man investment will fluctuate - - - - - - - - - 7041 1103 1240 No. of Funtls in Cat thus en invesroh shags, when sold, maybe worth more arkss than their original tort. .~U~~ '-.'„s=?~~S'4'-°'~n ~=="'.~L`a ,a:,ea ~.~ i~ Jw l~ *T ?:J ~'~~ a~µ J'~ ~' . Cunentpedormanre may be bwermhigher than reNm Longostim% lixg% Smn% Net% . -. r Save Crg Share 0 coral Snicks :. ~ . r ~ % date grrotedherein. ForpeAormance data currem N the mast Cash 4 1 0 0 4 1 since Arrourrt 4 coral Fi.ed-Irrome Assets recemmonMcM, pkaze ca11800.125-5677 or visit US. Stocks 56 3 00 56 3 10.3007 40% ivrowr Ram www oppenheimeduntls.com. . Non-OS. Stocks 170 . 0 0 17 0 ® 16 mil Oppenheimer ValueY 1461 Bontls 22 6 . , D 3 22 3 ® 7mil Oppenheimer Cap¢al Appretiat 13.57 ~.~. q.J _ ~`'* X i°~"~" p Other 07 . 04 0.3 ® pg mil Oppenheimer Core Boll Y 11.17 F . -.,,,. , --._rr:atuxU~s v i „"-'~~'.e6z .............. ......-.. ..... ® 7 mil Oppenheimer Main SVeet Y 9 48 yles Olrasess total 100 7 0 7 100.0 ® 4 mil Oppenheimer Global Y . 9.36 • FraeFM Loatl % ryp Defnra0loa0% NA EavaB' Style PoNdio Putt Vale Bbd GowID SIa4s46 A19 karge Ref Rd rAex Cdt B Ft) 11 and OppeMelmer Maln St Oppown 5mll Oppenheimer Global Oppowm 5.47 543 P/E Ratio TTM 17.3 - 1 71 ® 16 mil Oppenheimer Champion Income Y 5.33 Fuae Eapsrses Md P/C Ratio TTM 11.9 - 1 15 B 7 mil Oppenhnmer Main St Small Cap 5.05 Management Fees % 0.00 Emak P/B Ratb T7M 2.B - 1 10 8 7 mA Oppenhemer Real Estate Y q.79 12b1 Expense % 0.25 Geo Avg Mkt 21568 - 0 70 "" ® """" "" """""" "" ' 1 tl ~~~~ ~ Prospectus Ones Expanse Ratio % 7.16 Cap Smil 8 m OppeMelmer International Bon 4 53 O 11 and Oppekrelmer U.S. Govemmem Y 4.18 e ~sUF ~ 'tvs & ~ y~~ y„, ® tk 1 m0 OppeMeimer Small & Mid Cap V 2 il O h i MidC Y 1.52 „, ,.. _ ~ ~ y~ yn t a5 A EO DuraUOn R y 4.23 m ppen e mer ap 1.49 ] rr 5 Yr t0 rr Nn Av g ER Mamriry ® 23 mil Oppenheimer InsU Money Mk[ D 86 9J7 Nab 717IwMS 413TUnds ' Mm Avg Credi[OualUy AA Manirysur Rating 4* - _ tow Avg W[d Coupon 5.99 Secnr W^a1tines Sicks % Rd Dow Jones Mlxnirgstar Risk High _ Avg W[tl Price 83.85 "~' Iraarknation Eeondny 27.3 ManingsGr Return .Avg - - m - SofMare 5.3 avr sYr 10 yr Ln6tlWysismd1d0p8 Bad% ~ Hartlware _ 75p Stallard Oeviatlon 8.52 AAA 63.74 ® Media 3.3 - _ Mean 8.67 AA 3.21 ® Telecommurlica6m 3.7 Sharpe Ratio 0.55 - - ,_,,, .. 682 ............... ti Sarnce Eeaamy ~3.E _ BBB 4.91 ® Healthcare Services 9 9 MPT StadsO¢ Scantlare IMex Bert Fit Imes BB 8.56 . - DowJOresMotl Dow lures MOtlera[e B 907 ® Consumer Services 6.3 - Alpha -2.34 -2.34 Below B .................. ............... ......,.....2 fi3 ~ Business Services 4.3 - Beta 1.39 1.39 NpMA 1 07 © FinarirJal Services 22.5 R~Squared 91.38 91.38 . .... rJ .._.... ......... ......... Marakfapu E ray caiuuy ............. 28.6 ® Conumer Gootls - 7.5 12-Month Yie10 _ eeg°r°t E>p°aae Sarks % Rel OV.v Jones ©i Intlusoial Gootls _ 12 3 30-tla SEC Y ltl Americas 79.5 _ 0 E ' . - y re - Greater Europe 15.8 ^m91 7.8 - Po[enUalCap Gains Fxp - Greater Asia 4.7 _ 0 UOIiOes 2.1 Opentim Famiy: Oppenheimerfunds Objective: Grow4h Min mum IRA Purchase. ESOD Mawger. RUOi Sliiatlt Tiler: OAAAX.LW Min mum lntitial Purchase: 51,000 Tenure: 3.1 Years Min Auto Investment Plan $500 Puc hase Cmstraims: • ozaoe MOmvgsur. al wgha R¢evm Lire mrwmnim.earn. anayses me opaor5 cmtareonom lt)xlWerte wradexlai me amrierary mamavmmMVnmgsrar.IZl mar rot ne=w~m or reoisrrwim, 1 (1T~pe lal eo mrrmvrtue meummi aedce mereeMMwhngsrar.(q are podeea wbytar mamaional p,.posg ad rrereae ae nor an orcamary or noasecuny-am(sl are rm waraaeo io oecmea compiaeaacarae. MC /RNIN6UIW1 kxcePi as weiwiserewo-ee Oy law. Managstar dau roc to r¢pmsale b arty vaexg eecbon. eamagesa aver iozses revltiy nom. a retiree a. tMS iMamatim. eaa. anyses or opnia¢ or nett tee. ims nvr'a mennl sales IiRraaxe. rcaglinale rz mnt ee Pxeeetl a acrnnQaniee ay a pospem¢. o- eyrrslax, ad eisuomre statement afP'e- Morningstar RatingTM' Disclosure for Load-Waived A Shares zz or so • This disclosure page is being presented because the following report reflects Sometimes investors tlo not have to pay the front load. For example, the A share a Load Waived A Share. Not all investment reports will include this disclosure. class is often used in defned-contribution retirement plans, such as 401(k)s, The A Share class Morningstar Rating is provided on this page as a side-by- and fund companies generally waive [he front load for plan participants. Fund side comparison to [he Load Waived A Share class security. companies also reduce or waive the front load for individual investors who com- mit to invest above a certain amount. • • Ratir gs and other statistics for load-waived versions of the class A shares of muR ~I funds reflect [he investor experience for those individuals who do not pay the f i<lds' front-end sales load, such as retirement-plan participants. The load- waiv 'd rating supplements the Morningstar Rating for the original A share class where all load-adjusted measures reflect the maximum front load. i Bac ground Mos. mutual-funii companies offer multiple share classes of funds for different types of investors. The industry convention is to label these share classes with letters and to structure them with different fees. Typically, A shares have from-end sales loads and lower ongoing expense ratios (compared to other share classes of the same fund). Additional Details Load-waived A shares are displayed and Veated Tike a separate share class, and most data is the same between the original A share and the load-waived share. The statistics [ha[ are different include load-adjusted measures, such as the Morningstar Rating, rating-related scores and returns, tax-adjusted retums, and any percentile ranks based on these measures. To be eligible for load-waived ratings and returns, the fund must be an A share class, must have a front load and must be domiciled in the United States. Morningstar does not calculate load-waived ratings for B or C share classes because fund companies rarely waive the loads on these funds. Rise and Retun Pr~k 09.30-2U08 Oppenheimer Port Series Conserv Inv A LW 3Yr SYr 10 Yr 435 funds 270 funds 129 funds Morningstar RatlngTM 4* Morningstar Risk +Avg Morningstar Return +Avg Oppenheimer Port Series Conserv Inv A 3Yr 5Yr le Yr 435 funM 270 funds 129 funds Morningstar Rating'" 2* Morningstar Risk +Avg Morningstar Return Avg Morningsbr Forting Disclosure The Overall Morningstar Rating is based on risk-adjusted retums, derived 5om a weighted average of the three, five-, and 10-year ~d applicable/ Morningstar metrics. ozaoe Mum„qua. au agms asset a *ne mmrma<~m. aorta. masses a~a opnmc ~mu~ree nnem n(.~rwe ue mm~omaai am pogreaary niamaum m rnm.~grm. (z) mayr~m oe coprea w rm~ssrmurm. nl ao mrcmmrure lmesrmmr aev¢e Waea ty Mwnmgstar,(d7 are yrmiee0 soalylw nlamanmal gapzesaM VrerNUe are mrmdlre Nbrymsellasemrty.aM(5l ore rm wananteampe correct comninewamnRe ®OpperJrimerlavrdf cxceprmwnerwise reganeagiaw. MOmngstar snap nu ee crosoie iw aryrraeing es~sms. eamagesw rarer losses remuiig rcwn, or relates m. mss imormaem.ama. aaaysesaop~wmsw arm me. mss repon is vype- ra+~••-. mrmi sales inerawe. n ~pomoie a mast m yeceeea a acmapamee ny a pmpawm. w eµinmmr, me e~owre varemmr. Release tlate 0430.2009 I FINRA Members: For internal use a client rep0rtirp purposes only. P qe 23 f 60 Oppenheimer Port Series Conserv Inv A LW Overall Morningstar Rtg` Incept Type Total Assets Morningstar Cat **** 04-05-05 MF _ Conservatve Allocation 435 Conservative Allocation _~ puartery Remns 1st Op 1M pp 3d0u 4ttl Do- iotal% 1a 28 30 $tpck% 2006 2.32 -0.57 2.95 319 BOB ...- ... ........c. ....- ...... ........- ................. ...... ........-.....1Wk 2007 2.13 1.18 2.95 -0.64 569 ... .... ............. .._... ....... .......... ............... ..... ...........,... ogle GrovM ME10.000 2000 -366 0.64 _..... ............. ............... ...... ................. ......,..........~ ~ OPPerNdmer cvraav - - - ft2,109 ........ ................ypk fat Av Trailing Repxns 1Vr 3Yr 5Yr TVr Incept ~~~~~ ~~~~~~~~~~~ ~ 9'. COreevai S[d Monthly 2.58 - 6.36 Ett)tp - f- ........... ............ ................ ........... ......_... ......,.........._ ~ ~ INen'. pow JOmS Ma Std Quarterly -0.29 _ ~ 5.00 Eta ua Total Return 2.50 6 59 6.36 ...._.._. ..._.._........ ..._-...... S ..._.. _... ................. ................. ........,.................. _.......... tnr +/-Dow Jones p.00 -2.89 _ _ _ +/-Dow Janes 1.39 0.36 %Rank Ca[ 19 22 4 No. in Ca[ .627 435 270 ~9 ........ ...._ ® ® ® ® ® ® ® ® ®......® ®.. .. ®.... ale (erlomtsnQ Ouamla 7-tlay Yieltl - ~~. o ~~: ?. ` :~1Y~= fit ?w .. ~ i =_~ .,.., ~ z._ ? '~ ,,5.._Y,s! ~ ._::.' Paaromava Duehtan _ _ _ _ _ _ 1033 10.02 10.94 11.01 NAV IDe Overall Morningstar Ratiry is bared on risk-adjutted - - _ _ _ _ _ _ _ 8.08 5.69 0.64 Total Return % reroms, derived Irom a weighRdavemge of the three-, - - -3.02 -2.33 2.Ofi +/~ Dow Jones M live-, and 10-year (d applicable) Momingstarmetdcs. - - - - - - - - - .,..,063 0.46,,. ....L30 +/-Dow JonesU The pedormanre data quoredrepmserrtspa#per(ormance ........°.. ... ........-.. ....'....-. .... ........° .. ~ ...........- .... ................ 46 33 ,11 %Rank Ca[ and does notguaranke fuNm resuDS. The invrslmerrt .......-.. ......_-.. .... ......-. ... . .......- ...._.... .................. ........ reNrn andprincipal value of an investment will fluctuate - - - - - - - - - 558 fiO9 709 No. of Funtls in Ca[ thus an invesro~s shares when sold, maybe worth more ar less than Meri odgirwl cost. ~y9~-~,~~I ~~;_~",r.';3 ,'.,".r ___n"~„ -=~:, y li,~W yfa- Currerttparlomrance may be btnerarbigher than return Carposipon% Lorg% Shprt% Ne[% Orwe Crg Shae 0 Tpta15mcks % tlere grrotedberein. FarperlomMnce dal currem ro the matt Cash 7.2 0.0 7.1 since MLUM 0 Tmal Oxen-Income 0.ssea 1U7007 5% Tummer Rata recentmonD.end, please cell8170.125-5677 or visit U.S. Saks 20.5 0.0 205 ® 13 mil Oppenheimer Core Brxrtl Y 33 75 wTVwoppenheimedunds.cam. NorvUS. Stocks 70 00 7.0 ® 7mil OppenheimerUmitetl-Term Gove 17.54 Boras fi56 0.4 65.2 +:r r=~ r o.,m_ g-, ;, ~. Other 10 0,8 p.2 ~ Smil OppeMeimer Champion lncomeY 10.89 F4ke9;, ~~'t;-+=_.;_> .~.._: vi. ................. .................. ........~............. ® 4 mB Oppenheimer Intema[ianal Bon fi.72 S.ks ~~ -- Total 101.3 7.3 100.0 ® 3 mil Oppenheimer Commotlity Sba[ T 5.83 Eeurty Sryk PnxROlip Port RrJ Rd ............ _......_...... ._.._....._. • FrtnbFM Load % NA ® 429 520 Oppenhnmer Capital Appreaat 5.36 Delerted Land % NA Vale avm ruO,Mn ur a sratstics Avg Intlex fat ® 586 268 0 g ppeMelmer Main SVeet Y 5.22 P/E Ratio TTM 17.9 - 117 ® 299159 Oppenheimer GlobalY 5.16 Frata Expenses Mn P/C Ratio TTM 12.3 - 1.24 © 815 881 Oppenheimer Value Y 5.12 Maregennea Fees % O.OO smnu P/B Ratio TTM 2.8 - 1 17 ® g39 455 Oppenhelma Real Estate Y 4.67 12h1E e% 0.25 Goo Avg Mk[ 28651 - 0.98 ............. ...._._... ... ....,._. ......_.. ....... '~ tk 1 mil OppeMelmer Instl Money Mkt 0.28 ProspecWS Gross Eapertse Ratio % 0.98 Cap Smil ,;, ;----,° j=' ~.' pvehlncane Styx ___ ~ x~u~,;,,_t t ~s,..i. smn Inv tmg 0~ Avg Eft Duration 3.45 3Yr 5 yr t0 Yr qvg Ett Matutl[y _ 135 Nrtls 170 /uMS IT9 /wds Mm pyg Cretli[Quality AA Momirgstar Radng"' 4* tow Avg Wttl Coupon 5.86 Sector Weipkan~ Raks% Rel DOw )Ores Morningstar Risk +Avg _ _ ,p, Morningstar Return +Avg Avg W[d Price 97.85 IMametion Econany 2l9 _ - - m Software 4.6 _ 3Yr SYr 10Yr CretlM1Anlysis 0l-313009 apre% ~ Hartlvsr¢ 13.0 - Stanaaro Devaeon 4.67 _ _ ~` 72.fi6 ® Metlia 3.5 - Mean 6.59 _ M` 1.76 Q Telecommunication 3.8 Sharpe Rato 0.49 _ _ A ................ ........... .............4 95 O Serviee Eeaaomy /9.9..._ BBB 4.1p ® HeaMfare Services 7.5 _ MPT SrapsLrs stamab Irgex cesn Fh Inpex BB 6.83 ® Consumer Services 5.7 Dmv Jaes MOtl Opw Jmes MOEerate g 6.77 - Alpha .1.25 .1.25 BelawB .............. ......... ..................1.95 ~ Business Senvkes 24 _ Beta 0.70 0.70 NR/NA p.gg © Finanda15eMces 342 R~Squaretl 76.32 76.32 d MaMadurig Eeannny ~~~~~~~~~~ 262~~~~ _ Consumer Grwtls 7.0 _ 12-Month Yieltl _ Regnaul Eapozrne Stp ks%Rel Oaw Jones Americas 80 g ©' Industrial Cnotls 8.9 - 30.tlay SEC Yield - Greater Europe 15.7 _ ~ Ena9y 7.2 - Potential Cap Gaire &p - Greater Asia 3.5 0 U[ildies 2.1 Operatiats Family. OppemreirrlerFuMS OLyective: Inrgme Minimum lRA Purrmase: 1500 Manager: RutliSMatl[ Ticker OACIX.LW Minimum lntltial Purchase: E1,pO0 Tenure. 3.1 Years Min Auto investment Plan $500 PurchaseCms[rairrcs: • ®2008 MornirgNr. NI RIgM ROervM.iM nlmmaum, para. malyses aM apimwa cmmiree pxem(tIrclWente mMiemtial me poprrtraiy nbmatiand Morningstar. (p may tun pe cogetl or repiurtlxrtm MC~HNIN6SfM® (31 nO mnrmswne ineswmraa~m Onnee Oy MOmiigsar(al are pwieee mldy rm nramaimallwrppses am merdne are em as anam ay Or seuasemriry. b(sl ae rot wanamepmcecmea cpmpne or acwme F~cepn as aneixise r~uiree bflaw, Marongsrar Shall na ~ resrvr¢ale ru arry trMng eecisiorrs. eamages m W'ie mss resulnvg rcdn. or relatee ro. tM1S iNmnabm, ea[a, analyses or ¢irtms or Nor use. Tms repxt ¢v{ple- mmtal.cakslinnanuell~IimpeRm lpe paelelrcacwiryanea pya proSpetSy,peWrvalmt,aM Jisclo5ure starer Morningstar RatingT"" Disclosure for Load-Waived A Shares 60 • This disclosure page is being presented because the following report reflects Sometimes investors do not have to pay the from load. for example, the A share a Load Waived A Share. Not all investment reports will include this disclosure. class is often used in defned-contribution retirement plans, such as 401(k)s, The A Share class Morningstar Rating is provided on this page as a side-by- and fund companies generally waive the front load for plan participants, fund side comparison to the Load Waived A Share class security. companies also reduce or waive the from load for individual investors who com- mi[ to invest above a certain amoum. • • Ratings and other statistics for load-waived versions of the class A she es of mutual funds reflect the investor experience for those individuals who c ~ not pay the funds' front-end sales load, such as retirement-plan participants. Th; load- waived rating supplements the Morningstar Rating for the original A sh. ~e class, where all load-adjusted measures reflect the maximum front load ' Background , Most mutual-fund companies offer multiple share classes of funds for afferent types of investors. The industry convemion is to label these share classes with letters and to structure them with different fees, Typically, A shares have front-end sales loads and lower ongoing expense ratios (compared to other share classes of the same fund). Additional Details Load-waived A shares are displayed and treated like a separate share class, and most data is the same between the original A share and the load-waived share. The statistics that are different include load-adjusted measures, such as the Morningstar Rating, rating-related scores and returns, tax-adjusted returns, and any percentile ranks based on these measures. To be eligible for load-waived ratings and returns, the fund must be an A share class, must have a front load and must be domiciled in the United States. Morningstar does not calculate load-waived ratings for B or C share classes because fund companies rarely waive the loads on these funds. Risk and Retum Profile 0430.2008 Oppenheimer Port Series Equity Inv A LW 3Vr 5Yr IDYr 1695 funds 131 fi funds 630 funds Morningstar Rating'" 4c Morningstar Risk +Avg Morningstar Return +Avg Oppenheimer Port Series Equity Inv A 3Yr 5Yr 10 Yr 1 fi95 funds 1316 Funds fi30 funds Morningstar Rating° 3* _ Morningstar Risk +Avg _ _ Morningstar Return Avg _ _ Morningstar Rating Disclosure The Overall Morningstar Rating isbased onrisk-adjusted returns, derived 6om a weighted average o/ihe three-, five, and 10-year (if applicable/ Morningstar metrics. CzllcB MomingsGr. All wgms FxseneE. ire nlwmatim, Bata. anayses aq rylmor¢ clartanN nscn ni Imwe Ve cmritlnrtia: mib preprlAaryiMUmatim d Mpnmgtar.IZl may nor ce cmie0 or ~etlisrourm. (3~rtomrcmrtlWe m¢vrattanNre drnebMMwnngstar(1 xepwiGeb sMHy lm nrnmarimalpvpmx and Nrelrte are ~d an oM1nm Wy PSella seoalry.aml(5)areMwanameE mbecmect. complHewacrume. ®Oppenhnmerfloada' Eac~ImcNerwiserequrep by W,MVn,ngsrar Nall nq to resra"blple lv any tra1ng tlenuom. rtamagesp grte bis¢resul[Itg lrom.ttrelarertto. Mis inlpmabm.Jara. dialyses or grintva or Mea use.lbls rtygt lsvryle- ,..~ male/ sale IrteraWe M applicable tt mus pe prx~~ a acrnmpamert by a prospema. v eWxalart. an0 rtisclosure varement. Rebase dale 0430.2009 ~ FINRA Members: For itrternal use a client reporting W rposes only. Pap 25 f fi0 Oppenheimer Port Series Equity Inv A LW wara9 MOmingsfar Rtg- lnrxpt Type retal AsaeK Momvgshr at **** 04-0505 MF - large Blend 1695 large Blend • ~E1~fid1100~-~. ~ ~ ri rr ~ra:..:= „„.,nvyt.,_i ® ® ® Investment Styln Ouatvy Rewrm 1stW 2mW xtlW 4m 0o- ToWI% Ep'iy 21p6 660 -3.48 3.69 Z07 14.23 . ........-.. ......-. .......- _. ........- ~.... ......_91 sB . ,.......-.....1~ 5wck% 2007 2,01 7.27 3.02 -4.64 7.50 . ............... ..~....~.. .. ............. _........ ........ ... ..~.............. em CaoeemtaSlo,aoo 2008 -17.01 -5.23 .. ............... ............. ... .......,..... ...... ........... ..... ............ ...... .................~ ~ Oppennwmer E9uity - - 513,355 Trailing Rewrm 1Yr 3Yr SYr 10 Vr Ircept ~ ~ ~~~~~~~~~ ~~~~~~~~~~-~-<Ok ~Gt Avg.lxge Blen Std MonU6y -4.14 - 902 ~ 512,617 - - $[tl Quart¢dy -6.22 700 .............. .............. ............. ~ ............ .... ............ ...... .................. 20k - IMes: 56P 500 iR TOGI Return 4 14 1012 9 02 ( E12.fi78 .,._,...,,. . , . ............. f +/- 5SP 500 T 0 54 1.89 - - - t .._.... .. . ..,. to +/- Rus 1000 0.48 1.49 %RankCat 42 19 4 ..... ...._ ...._. _..... No in Ca[ 2104 1695 137fi 630 ... ® ............... ® ® .. ......... ® ® .............. ® a_ 1 ~1 ......... ... ® . ® .... ........ ® ® ............. ,, ~® ~ I 7 tlay Ykld vnNin~ory~ - .. ~~ - Perlarmmw dbnbaun 71.06 1241 12.81 12.14 NAV The Prera/I Mormingstar flatirg is based on risk-adjusted - - - - - _ _ _ returns. derived hOma weightetl average Of the three-, - - - _ _ _ _ _ 14.23 7.50 -5.23 Total Return % five-, and 10-year (d applicabkJ MOmingstar meMcs. - - - - - _ _ _ _ -0.56 2D1 -0.20 +/~S6P 500 TR -1,23 1.73 -0.34 +/- Ras 7000 the Peformance data quoted mpreser4sPastpedOrmance ......-... .......-.. ........-. ... .......-. ..~....~..~ . ..... ........... . and does not guarantee luNre 2sul(s. The investment -. 52 32 52 %Rank Cat reNm endprilu:ipel value o/an invesbnent wdl /luctuate - - - - - - 1980 2090 2207 No. of Funtls in Cat f/IU5 dlll/IVaStOrS Shalay WhC/1 SOId may be WOrtll mot orkss Man Meir Original cncG ~v..}L'T5`i' ; , ~ . ~. " ~ /~m'.m""~9.1~ ~~ ~ 1fi~: "i~ ~ ~~~~ i . ~ ~' ~ C «, l'af wf .Y ~~m Yi 6anr..u~viz '? .m„v...~h4psn`nv:4a sx_ratu!".u . ktiRti~' k ".•^.•- „da .•_ v_i_: ~G:li ' ~v.w 'C -.a[ »- Cunentperformance maybe lOwerahigher than mNm tattptsiaon% Lag% Slm% Net% Snare Clg Snare O IoWI SWCtr % data quoted herald FOrper7ormance data current to the mart Cash 1 1 0 0 1 sirce 1 Amoum o ToW1 FueaJaare Assets mrentrnOnthend, please ca11800-775-5677 or visit U.S. Stocks . . 72 2 D 0 . 1D20]1 72 2 2% Tlanover Ratio wWav OppenheimeAundstom. Non-U.S. Stocks . . Z6.6 0 0 . ® 26 6 2mil OppeNleimer Capual Appreuat 2060 Bads . 0 0 0 D . ® 00 2mil Oppenheimer GlobalV 19.75 ~,~~ r ~' " ~' ~ ~' ® '~ 2 mil 3 il Oppenheimer Main Sveet Y O h i 15.00 . . . ,O;dO -~c-.::.-?, FL ! y~ pmryn __....... Total .............. .................... 7000 00 1000 ® m 4 tuff ...._.. ppen e mer ValueY Oppenheimer Main S[ Opportune . 14.69 9.91 • Frma{xM Load % NA Defemetl load % NA Eaidl SMn Value Bbd GaMn las Portolio Pat RH Stateacs Avg IMes e RN O fat ~ 2 mA 680 733 ~~ ...._.... P Imer Main S[ Small Ca Oppenheimer Developing Market ............... ..._......... 9.77 5.91 P/E I2860 TTM 17.3 1.06 110 ® 806974 Oppenheimer Global OppOrtuM 4.90 Fvd Fapnse. Ma P/C Ratio TTM 12.1 1.18 1 17 p 1 44,934 Oppenheimer InsU Money Mk[ 0.02 Maregemem Fees % 0.00 small P/B Raba TTM 29 1.15 1.15 12b1 Expense % 025 Geo Aug Mkt 26814 0.52 0.70 Prosperws Gmss Expense Ratio % 7.75 Lap Emil tt 1, ,~. ,. Fve64ttcum Style -- ~` 'a'~f~° ~n iv Iw9 a~ Avg ER Duration - 3 Yr 5 Yr t9 Yr Avg ER Maturity _ 1.6951uMS 1,3[6 /uMS 630/ands Mm qyg CreOi[Gudli[y _ Morningstar Ratirg"" 4* - - inw qvg Wtd Coupon _ Morningstar Risk +Avg - - Avg Wttl Ptice Morningstar Retum +Avg - - 3Yr SVr toYr OeBt Ansyvs Bwxl% SlaMartl Deviation 1062 AqA - Mean 10.12 -_ -_ ~ - Sharpe Ratio 0.57 A BBB _ MPi Smtisti¢ B[afdNe lMex Best Fa lMe~ BB _ 56P 500 TR Mahmgswr US Mkt 8 Alpha 1.32 0.61 ............ ......._... ....................- Below B _ Beta 1.14 1.11 NR/NA R~Squaretl 91.64 94.19 RegivtW Erpoaxe StvY.s% ReI5EP SOOT 12-March Viet - Americas 76.7 0.77 30-tlay SEC Yreltl - Greater Europe 16.1 _ Potential Cap Gains Exp - Greater Asia 6 B _ • Fatuity. OppeMeimerFuntls Otgectlve'. Growth Manager: Rutli Schaal Tiler: OAAIXLW Tenure'. 3.1 Years Min Auto Imestmetrc Plan'. 55170 Sacmr Weglaings Stotts % Re156P SUO T "~" IMamation Cwnomy 30A 157 m Software 6.1 163 Q Haroware 1fi.3 163 ® Metlld 3.5 1.16 ® Telecommuturavon 4.5 1.30 O Semce Ecmonry 19.5 0.95 ® Heatthrare Services 10.0 0.87 ® LOnWmef $eNlCes 7 ~ B 9] 0 Business Services 4.7 1,00 © Fnanda15ervices 16.8 0.99 [7 MarNaoWmgEemnmy 31.0 0.79 ® Consumer Gaatls B.5 1.03 ©n IOdasVlal GOOtlS 12.7 0.96 Energy 8.4 0.59 0 Utilities 1.4 0.40 Minimum lRA PurcUase: $500 Minmum Inti[ial PurUase: 51,000 Purchase Consvaims: ozone MwninyVa. ail Rigors Besavcd. TheinNrmattm,aaW. marysesaM Opnans VllMime naevt(U kexne an mrcieenai atePwretayimwmmiond Manngsvr. (z)mayiwt eecrvree or reolsuldn~ u^n~I111tFFryPt® (3l on mtcrosolmc ~mestmvn aowa oaaeeq Mwnngslar(1)are vaima svleyrw nlwmetmai wxpcaa ala ntererwe me mtmoaaweuy or seuaseovrty.aN(sl ore nor wareavee wee correct. completewacwaa. IN( )Il IEOI~If~ Swept a oatenvce requltee q law. Momingswr Aall not ce tgpmsOk Iw any vaevg ecrstom. aama3ac w olta Mses revag nom. w relatee m, tMS iNwmaum, eats. amyses d optnms or mar use ials rgtot is sµpe- mmtal sales I¢ennre.Il appltraele rt mat cepecetlee w acm~mametl q a pmpecua, w eaurvalae, aM elscmwre vtenme. Morningstar RatingTM' Disclosure for Load-Waived A Shares 26 or 60 • This disclosure page is being presented because the following report reFlects Sometimes investors do not have to pay the front load. For example, [he A share a Load Waived A Share. Not all investment reports will include this disclosure. class is often used in defned-conmibution retirement plans, such as 401(k)s, The A Share class Morningstar Rating is provided on [his page as a side-by- and fund companies generally waive the front load for plan participants. Fund side comparison to the Load Waived A Share class security. companies also reduce or waive the front load for individual investors who com- mit to invest above a certain amount. • C Ratings and other statistics for load-waived versions of the class A shares of mutual funds reFlect the investor experience for those individuals who do not pay the funds' front-end sales load, such as retirement-plan participants. The load- waived rating supplements [he Morningstar Rating for the original A share class, where all load-adjusted measures reFlect the maximum front load. Background Most mutual-fund companies offer multiple share classes of funds for different Types of investors. The industry convention is to label these share classes with letters and to structure them with different fees. Typically, A shares have front-end salesloads and lower ongoing expense ratios (compared to other share classes of [he same fund). tusk arW ReumProfik M•30.21108 Additional Details i Load-waived A shares aredisplayed and treated lik-ea separate share class, and most data is the same between the original A °'~are and the load-waived share. The statistics that are different include load-Sdjusted measures, such as the Morningstar Rating, rating-related scores an ;returns, tax-adjusted returns, and any percentile ranks based on these measures. To be eligible for load-waived ratings and returns, [he fund must be „n A share class, must have a front load and must be domiciled in the United States. Morningstar does not calculate load-waived ratings for B or C share classes because fund companies rarely waive the loads on these funds. Oppenheimer International Bond A LW Oppenheimer International Bond A 3Yr SYr 10 Yr 3Yr SYr IDYr 184 Funds 155 funds 110 funds 164 funds 155 funds 11 n fulls Morningstar Ra[ing° 5# 5# 5# Manings[ar Ra[ing'x 5# 5# 5# Morningstar Risk +Avg +Avg High Morningstar Risk Avg +Avg +Avg Morningstar Return High High High Morningstar Return High High High Morningstar Rating Disclosure The Overall Morningstar Rating is based on risk-adjusted returns, derived horn a weighted average of the three-, five-, and 10-year lif applicable) Morningstar metrics v<Vn momvgsar. PII xgnts xeswrxe. Ine Imwmaum. NU. malyses am opiniwrs cmumN nerem m mcWe th mnrieemlal eie yaprlaary imwmatim or Mwmngsrw, (2) may rot ee wpiw~ w relmnhnee. (li eo mtcm4lwe mesmem aence Wwee by Mwningsut.(a(arepwicee solely tw ntwmatimal puposes ant tlxrelwe are ratanonermagwselia xurxy.ane(S~ae nd wartametl Wbe cmect mmplerewacmwe Oppen(ainmrawdx' Gwglm plienViserepuiree ey law. MOmin¢tar shell not be respa¢ple fd any vaLng es2ms. tlama¢s or o[In lossg resuluy bwn.wreWletl to. Nis nlwmatrcn. data. aralyxs or Wlnwaw NCr use ltlrs rryox lss~le- ~+V^wm... mortal uks IBeraNelt appemde rt mrst berrmeeee w acmtrysmetl bya pm(ewi6. w equrvalaiC ant tli5clowe staterteit. R¢Wu tlate 0430.2009 FINRA Members: For internal use or c8en[ reportin0 W rpose5 Doty. Page Z7 of 60 Oppenheimer International Bond A LW 0"~Il Marnindstar Rtg' Inept Type Totul Assets Momingstur Ca[ ***** 061595 MF Wotld BoM 184 Wodtl Bono • ~a13¢e -~a.~,,~~~z ~ -. v~~~'>,,,.._a ;~.:®: ® ® ® ® ® ® ® ® ® ® ® ® `¢ea Ilerr~en~' 3"'e Ouartedy Rewrm lst ar 2rdW are Oa dN brr iotal% 69 SB 90 88 95 06 80 )6 )fi 6] fifi Bavf% 2006 2.49 d.70 3.78 4.98 8.64 - ...... .... .... ..... ""-""'1mw 2007 2.fi5 199 4.80 3.53 13.58 .. ......... ....... .'.. .... ------I%h Grewmdito,ootl 2008 7.14 5.58 ........... ..... ............ .. ....... ...., ..... ..............60. _ S2WaMdmer lmlce .................. .,...,..... .................. ............ ................. ..............,....... Ia iraYirg Reoem lYr 3Vr 5Yr 10 Vr IlxepL f1941{wald Bad S[tl Mmthly 14.04 - 12.76 10.28 10.66 _._- .. ..... ............ ......... ..... ......... .,.. ......_... pk .IMU. LB Aqg Std quartetly 18.55 _ 14.04 10.62 t0.8fi Et9,9n TOGI Return 1404 10.7fi 12.7fi 10.213 10.66 /~ LB Agg 7 17 5 83 8.39 4.32 ......... ............. ...... ._.....,. ...................... +/~ CiUNOn-3 -2.43 5.16 4.86 3.54 %Rank Ca[ 23 2 1 1 .................. ..... ............. ................. ..... .,._...... ................. ..... ................Ik No in Ca[ 218 ~,,.. 184 155.,..,, 710 ..,..,. ® ® ® ® ® ® ® ® ® ® ® ® ~In ra[~erpyUrur9k 7day Yreltl _ -..« s^ f, `^` °f .. E rTM :.. Zs`a"au"""` u.i ~., . ;1##M _ a '. r~aDS; , . iii 4r.. _ +' c,; Arhmanm Okdean 5.17 4.43 4.35 4,27 4.08 ~~4.69 5.54 5.98 5.76 6.02 6.36 663 NAV IDe Overall MomingstarRating is based on risk-adjumd 2.46 -4.34 11.06 6.87 215 20.82 25.88 75.55 3.29. 8.64 13.58 5.58 Total Return % reNms, derived fiomeweighrod average of the three-, -g.19 -73.02 11.88 -a.75 -629 10.57 27.18 71.22 0.07 1.31 fi.62 3.63 +/-lB Agg five, and l0.year (dapplicableJ Momingstar medics. 6.72 -22.12 16.13 9.50 S.fiB -1.17 7.37 342 1249 1.70 2.13 -1.37 +/-CiuNon-EW ThepeAormance data gwted representspastpedomranre 60...........98 2 ~~~~28 42 .......15 .2 ... ..........1 20 ........_8 3.... 31 %Rank Cat and does rrotguemntee Ntum results The invesfinerrt ............ ..... ............ .............. ..... ........-.. .................. .... ........... ..... ....... retum andpdncipal value o/an invesbnent will fluctwte 138 139 152 145 13d 144 1 fit 167 170 197 218 254 No. of Funtls In Cat Mus an investors shares, when sold, maybe vrorM ~ _ vnix ~. m ~ r~«Y-+.w«- ,~ ,. more or kss than their original cost ~OE~93q ~_ _ ~s ,,'J~r~~,~ill?,, ., , .,,Y .,c!,~ _~,,_,. ~ -,,~.;y„y.„®®.,. ~y;~?. ,.=-,r-°.,~ a.-~_v; Curremperlormanre may be bwer or higher than return Caposidan% Larrg% Ehorr% Ne[% 6rare Ctg Shwe o iotalSmcks % data quoted herein Forpedormanre data cunerrtrothe most Cash 24.1 0.2 239 sine Amoum 161 total F'«etl~lrcome Assets 09200) 68% Tumowr Ratio recem rtwn0end, please call BCq-215-5677 or msrt U.B. Stocks 0.0 0 0 OD ® 952 mil OppeNreimer InsU Money Mkt 9.10 wwwoppenheimerlundscom. Non-U S. Stocks 00 0.0 -00 ® 342 mil GALY (REPUBLIC Oq 5.14 Borx]s 674 04 67.0 ® 35 bit Japan(GOV[Oq 0.8% 3.15 m~ --~,,:w.uT; 77,, s,yY;_ . „~. rpq; .y. Other ,,,,,,,,,,,,,,,, ,.,,,,, ,,,,, 9 9 .0.9.,..,.. 9.7 p 345 mil NEW 5011TH WALES TREASURY 3.01 ... 1°!'s'".'`.`~ "`~`.: Total 1015 1.5 100.0 5a~ ~~ Q 139 mll Unaetl Ibrgtlom (Govemmerrc 01 2.89 E ~ S Pwadio Port Rd Rel .. .............. ...._... • Front&rtl lnatl % NA '~ ~ ® 185 and ~Germarry (Fetleral Repualc Oq 2.51 VdLe BkM GowN SIaIkLiCS Avg M¢M 68[ Deferred Loatl % NA Large ® 179 mtl Repualque Francaise 2.47 P/E Ratlo TTM - _ NJ g8 mll Unhetl IGngtlom (Govemmerrt Of 2.13 Erartl Expeves roe P/C Raba TTM - - _ ® 147 mA Bk IN $mtlaM 4 375% 2.11 Managemem Fees % 0.52 small P/B Ratlo TTM - - - ® 23 NI Japan(Gon Op 2 3% 209 12b1 E ense % 0.25 Gen Avg Mkt - ......... ........ ........... ..._..._ ...... xp - - B 153 mtl France(Govt Of) 4% 205 Prospectus Gress Expense Ratio % 0.95 Cap Emil ~ 121 mil Royaume De Belgique 1.77 FuerHmurc Style 'SY 170 mil Canatla Gov[ 3.75% 1.15 y~~,~ "'"" "" `~ ~ ~: =.g 1 q[ 167 mil Canatla Gov[ 4.25% 1.74 ?~Rdl.le e",r mm z=.m,,~,m , a > snonlm Lwg A EODuratlon 5.74 3Yr 5 yr ID Yr R'p' ~ ® 109 mil Greece(Rep 01) 4.6% 1.fi5 18/Noes 155 Nra6 ttONMS Avg EO Maturity _ Mee Avg Cretli[ quality AA Morningstar Rebrg"" 5* 5* 5* Lam, Avg Wttl Coupon 4.92 Sean w.ywnpa $tacks% Rel Lg Agg Morningstar Risk +Avg +Avg High Avg VJtd pace 102 26 '0' IMwmation Eeandny - _ Moningstar Retum High Hign High m Software - _ 3Vr 5Yr 10 Yr eretir Meyws l2-31200) 9oM% 0 Hartlware - - StaMardDeviatlon fi.07 7.55 806 AAA 40.85 ® Metlia Mean tD.7fi 12.76 10.28 ~ 2070 ®.TelecommumcaUm Sharpe Rob 1 D2 1.21 0.81 A ................. ............ ......_.... 23 62 d Service Ecawmr _ BBB 4.14 ® Healthcare Services - - MPiSUasti¢ 6raMwe lr¢ed Bert FtlMex BB 800 1B Agg L9 Mortgage-9ackee B 1 45 8 Consumer Services - - ............... - Blrsiress Services Alpha 5.54 4.68 BelowB .~.... 0.00 - - Beta 7.Ofi 1.39 Finanaal Servces NR/NA 125 ............... _-.. R-Squared 2328 30.51 d Manrrtadurig Economy - _ 0 Consumer Goads - - NegiuelExposue Strcks% Rd L9 Agg ©. InduSViaGWtl$ - - 12-Month Yield - Americas - - Q Energy 30-Day SEC Yield - Greater Europe _ - - - Potential Cap Gains ExD - Greater Asia - - 0 UUlides - - Family: OppeMeimerfurrds Ogectlre: Wodtlwide Band Minimum IRA Purchase: _ Manages Arthur P. Steinmetz Ticker. OIBA%.LW Minimum lnti[ial Purchase: 31,000 Tenure'. 4.1 Veers Min AUm lrrvesbnen[Plan'. 8500 Purchase Constraints'. • ®zom lA«mryva. au Righs Raw.ee ll~mwmaum, eara.a,aysesam apmwm cmrdlree n«ert lt7lrclwe me cwrcmam¢I doe propa¢dry ~dwmaommLnam¢gsrar. rzl may aocmewa'6 wrmrsm6vrea. Ea/'~FlLlllll!(IfllD® 1al ao mrcmumrte iw.esennr ama onweegr4omlrywar, 111 are prw~ce4svlcy rm mwmaimal p.po:n am eerdwe are rwrae onwwwy«seodserulry,am l8 ae em walranm NcemrxL Cwnpletc«acwmte. IIA /111111U171W1 Fye~r as wlermse r«laretl by law, Mwnngrar gall nm Ce responsale I« arty o-aemg exlsler¢, 4amages w ae91p4ea resulting hom. w relaretl to. M¢ idwmeacn. earn. analyses or rginiw5 or tlwr use. lee repm ¢ sleple- mxRnl uks IIr«aNe Ir ~plivLe it mIW GepecMM «acrarydnlee ay a pcSpeNU, «erunl«IL ak tlWOVre yelemenL of fia • • Morningstar RatingTM' Disclosure for Load-Waived A Shares This disclosure page is being presented because the following report reFlects a Load Waived A Share. Not all investment reports will include this disclosure. The A Share class Morningstar Rating is provided on this page as a side-by- side comparison to the Load Waived A Share class security. Ratings and other statistics (or load-waived versions of the class A shares of mutual funds reflect the investor ezperience for those individuals who do not pay the funds' front-end sales load, such as retirement-plan participants. The load- waived rating supplements the Morningstar Rating for the original A share class, where all load-adjusted measures reflect the maximum front load. Background Most mutual-fund companies offer multiple share classes of funds for different types of investors. The industry convention is to label these share classes with letters and to soucture them with different fees. Typically, A shares have front-end sales loads and lower ongoing expense ratios (compared to other share classes of the same fund). Sometimes investors do not have to pay the front load. For ezample, [he A share class is often used in defned-contribution retirement plans, such as 401(k)s, and fund companies generally waive the front load for plan participants. Fund companies also reduce or waive the front load for individual investors who com- mit to invest above a certain amount. Additional Details Load-waived A shares are displayed and treated like a separate share class. and most data is the same between the original A share and the load-waived share. The statistics that are different include load-adjusted measures, such as the Morningstar Rating, rating-related scores and returns, taz-adjusted returns, and any percentile ranks based on these measures. To be eligible for load-waived ratings and returns, the fund must be an A share class, must have a front load and must be domiciled in the United States. Morningstar does not calculate load-waived ratings for B or C share classes because fund companies rarely waive the loads on these funds. Kist arM Ream Rofile 04-30-20DH Oppenheimer International Diversif A LW 3Yr SYr 10 Yr 211 funds 174 funds 86 funds Oppenheimer International Diversified A 3Yr SYr la Yr 211 funtl5 174 fuMS 99 (uMs Morningstar Rating° Morningstar Rating"' Manings[ar Risk Morningstar Risk _ Momingstar Return _ _ _ Morningstar Retum _ _ _ Momingstar Rating Disclosure The Overall Morningstar Hating is based on nsk-adjusted returns, derived 6om a weighted average o/the three, five-, and 10-year (rf applicable) Momingstar metrics ®zlxlB Mpnirgstar au Rigms Pgeamlro mlwmatim, mta. mralyses am opnms cmMinetl tweet (» ileWe tla coraieeuial nepaprleary IrAamatim rt Mwningsrar. R) may tutee rnpim w rearsvldnee, 131 ao ro1cm5tiWelmesmwn aeaee dlereaq MkxnmgPar.lalare pronaetl solely rw nlo-rnahmal pupases ana Uerelue are net an oee to o-rya calla wariry.ane(slae nu wananreemcecmM COmperewacnane. ®OppMeilrerurW' frceptxoNerwlse releoetl Ey law.Mmungur NNl net ee resporaNela arrytratllrg axieons. aama¢smotlle bssa rewllmq hwn.mrelateaN.tNS INgmaum.aata. anaFysesa W~wlz urtert us¢.1NS rgtm ¢sgpb °d"'Mm^^' malGl sales IReraNre It;pliteele it must he Vtt~ea a aeenmpanee ~y a pcspe tin. a eWwalglt, aM alulowre slatemarM1. Release tlate 01-30.2909 FINRA Memlrers'. For internal use a client reporting puryoses only. Page 29 of 60 Oppenheimer International Diversifi A LW a'erall Momings4ar Rtg' Incept Type TwlAsseLS Marniguar Cat 0927-OS MF Foreign large Value 111 Foregn large Value • r....,,"__ 3 '° ~ .a'' ® ® ® ® ® ® ® ® ® ® ® ® Earinonm[9ryk PFti~tii44wlk9p ~ l.a s, :..-it Cuartdq Peauns 15tW 2MW 3tl9u ~1[hW iotal% 92 99 afi Stuck% 2006 9.59 265 4.18 13.21 25ffi -- - "- "'- ""' -'"-""'tale 2007 3.96 903 2.64 -3.32 12.37 _.. ...... ".. .... ....... ............ ea GowtltM310.990 2008 920 _ - - -6.06 ..... ....... ...... ..... ........ .................. aq ~ Et3~Birrar lnUp ................ ............ ................. ....... ........... ................. .. .._......,..a~ IIaiirg Reruns 1Yr 3Yr 5Yr 10 Vr Incept Cat ASy:Faegn la Std Monthly 250 13.94 413.559 _ _ - ._ ........ .................. ............,. ........ ................ ....................... dOk . IrHex: MSCI Effie NE Sttl quartetly -0.76 - - _ 12.89 414.039 TOGi Return d.50 13.94 +/- MSCI Eafe 0 72 ............ ................. .....-_. ........... ......... .......................tole +/- MSCI Wltl d.16 %Rank Ca[ 46 ........... ............ .............. _...... ._,_.....,...... .._............. ale NO. in Ca[ 294.,,,., 211 174,_,,,, 88 ..,..,. ® ® ® ® ® ® ® ® ® ® ® ® IPmvlMharmcerr t~c~Unsrde 7day Yeld - !~],'yyM1~r~a~a~'.a' {y~'~ ayya~, `y~ry ~'1~1;. .__ n°`^'.„~' ._ ~e/rY..:JMM. ~ ..awl 'IY~ N „ti.,w ~, :1.°.+.'.`^im.,1~i'U.«='1:i ,.. ,u ~ ...... .......i, ......,. Psxloawmee 9isdosnn _ _ _ _ _ _ _ _ 10.31 12.69 1369 12.9fi NAV The Overall Morningstar Rating rs basetl on risk-adjurted _ _ _ _ _ 25.92 12.37 -fi.06 Total Return % reroms, deiwed from a weghted average olMe three-, - - - - -0.52 1.21 -2.10 +/- MSCI Eafe N five-, and l0. year /dapplicabkJ MOmirgsferrcefics - - - - - - - - - 0.12 -007 -2.45 +/-MSCI WN ex The pedormarrce data 4uotedrePresentspastpedortnance ...........-. ......-. ............' ...... ........- ................ ..........- .....-....... Sfi 20 ~ ~92 %Rank Ca[ and does notguarantee NNre results. The investmerrt ---_- - -----~ -_ ~---- ~------ ' - -- ~--- reNm andpdncipal value o1 an investment will flucNate - - - - - - - 215 280 307 No. of FuMS in Cat thus an invesrols shares, when sold, may beworth - more orkss Man their original cost °PaHfaBW SLeslry_s „fl ,.,.,, (! r's.,'~t„i w~0~=,-zr- _g~-4,;x~. :*.:: ;a,,~ ,,,„W;;;~'~tg, Currentperfomrance maybe bwerwhigher Man return Cdryosiuon% torg% Yfion% Net% Share Crg Srwe 0 iotalSwks % data uotedherein. Fw Aomwnce doh cwrerrt ro Me most Cash 5.4 0.0 5 4 since Arrwurrc 0 Total Fixetl-home Assets 4 Pe 10.100] t% late~ar Rxio recentmonM-errd, please ca11800-215-5677or visit U.S. Stocks 0.4 0 0 0.4 ® 21 mil OppeMeuner International Gro 32.99 www opP~heimeAunds.com Non-LLS. Storks BSD 0.0 95.0 ® 24 mil OppeMeimer quest ln[emation 25.48 Bonds 7.5 0.0 15 ® 12 mil OppeMeimer Intemauonal Sma 14.92 -~_ y~ r~er ~vn r == Other 19 0.3 1.1 _it11~d~1!?I`mw_ ..'®'~~ ;E ..-.....-., ................. ...................,.__. ® Smil OppeMeimer Developing Market 11.68 Total 100.3 0.3 100 0 ® 31 mil Oppertltetmer International Bm 11.14 Seka tlxtgas • Fron4intl lnatl % NA L9PnY 9ryk Pomdn Port Rel Rm e d mil Oppenheimer Inlema[ional Val 3.80 Defemetl Load % NA vaue aiwie frwrtn ~ 9e Stntrsacs Avg Inaex cat 8 3 mil Oppenheimer InsU Money Mk[ 0.1fi P/E Ratio TTM 14.3 1.11 119 Futl Expaeas MM P/C Ratio TTM 10.fi 1.33 144 Managemem Fees% 000 small P/B Ratlo TTM 2.8 1.18 1.33 12h1 Expense% 0.25 Ciro Avg Mkt 9058 0.26 0.29 ............. ........ ... _.. ................. .................. ProsprxYUS Gross Eaperrse Ratio % 1.'17 Cap $mil Raed4rcane 9tyk .'F ___ r.~. ,.,,~.i~a...h r~:..u smn lire Im9 x~~ Avg Eff Ouraoon - 3Yr 5Yr la Yr Avg EH MBNd[y 21I hn6s t7d lwMs 8B laMS Mm Avg Credit qudliry _ Maningshr Ratlrg"" - _ - ~, Avg W[d Coupon Srxtor Weigrring Storks % Rd MSCI Fare Marangsmr Risk - - - Avg W[0 Price _ '~' Irdormation Eawrmmy 15.9 1.35 Maningsmr Return _ - m Software 3.3 6.33 3Yr 5Yr tOYr Cretil Atulrys Bord% ~ Hdrdwar¢ 4.7 1.26 Stantlartl Deviation AAA _ ® Media 3.0 2.13 Mean - - - AA ®.Telecanmunication 4.5 .078 Sharpe Ratio A ...__-.,. ................. ......._ - O Sernee Ecawmy ~L3 0.99 - - - BBB - ® Healthcare Seraces 8.0 1.27 Mm Ymosacs YtnMae lMex Best Fl[Irtlu BB _ MSCI Eafe Net g 8 Consumer Services 7 6 1.61 AIPha - - Below B - Business Servkes 8.9 1.77 Beta NR/NA © Firtartdal Services 17.8 066 R~Sgwretl - _ d MarWlaewr'sg Eronnny 422 0.93 0 Cwksurrrer Goods 14,9 114 Neywul Bepasue 5mds % Rel MSCI Fate ©i IOduSVia GOOtls 17 2 0.92 12-Month Yied - Americas 11.9 _ 30-day SEC Yield - Greater Europe 54.2 0.7B ~ Energy 9.5 1.13 Potential Cap Gains Exp - Greater Asia 33.9 110 0 Utilities OR 0.14 Family: OppenheimerFwds Objective', GmwN and Income Minimum IRA Purchase'. _ Manager: George Evans Ticket OIDARLW Minimum lntitial Purchase: 87,000 Terwre' 2.7 Years Min Auto Investment Plan'. 4500 Purchase Constraints: • mtWfi Mwnugslnr NI wgnrs ResavM rte nlwmdim. Bata. aialysss one o?iniwa mnairae fiertin It irclWe tie cwdieemmi aria Proprietary iMrxmaem m Mmimysur 121 may mr ce copes w rMismbw~. m (al eo mtcmvaue nrvesamert aence nnwee try MOmirgstai.la)are prwaee solely tar mrwmdimalpwFm~ara mnerwe are mrmdlwmbirywselia se NM. and lsl ae mt waaammmcecmect mmpldew acwxde. 19R )RNIN WI Except m dnerwiu r~uire0 by Nw, MwningsGr shall rim ce responsele In any ammg eecismias. eamages w Dale' bssg revrl0rg fiwn. ar retiree to. mss iMamabon, 4ata, amlyaes w Winiom or Meir uselfits repm is stpple- mmwi oaks irsraNelrappLUble it trust be precMd wacrnmpadee nya pw.penia. o epurvalnn. aM tli.~closure 3demeM. 30 of en CJ C~ J Morningstar RatingTM' Disclosure for Load-Waived A Shares This disclosure page is being presented because the following report reFlects a Load Waived A Share. Not all investment reports will include this disclosure. The A Share class Morningstar Rating is provided on [his page as a side-by- sitle comparison to the Load Waived A Share class security. Ratings and other statistics for load-waived versions of the class A shares of mutual funds reflect the investor experience for those individuals who do not pay the funds' front-end sales load, such as retirement-plan participants. The load- waived rating supplements [he Morningstar Rating for the original A share class, where all load-adjusted measures reflect the maximum front load. Background Most mutual-fund companies offer multiple share classes of funds for different types of investors. The industry convention is to label these share classes with letters and to structure them with different fees. Typically, A shares have front-end sales loads and lower ongoing expense ratios (compared to other share classes of the same fund). Sometimes investors do not have to pay the front load, For example, the A share class is often used in defined-contribution retirement plans, such as 401(k)s, and fund companies generally waive the front load for plan participants. Fund companies also reduce or waive [he front load for individual investors who com- mit toinvest above a certain amount. Additional Details Load-waived A shares are displayed and treated like a separate share class, and most data is the same between the original A share and the load-waived share. The statistics that are different include load-adjusted measures, such as the Morningstar Rating, rating-related scores and returns, tax-adjusted returns, and any percentile ranks based on these measures. To be eligible for load-waived ratings and retums, the fund must be an A share class, must have a front load and must be domiciled in the United States. Morningstar does not calculate load-waived ratings for B or C share classes because fund companies rarely waive the loads on these funds. Risk and RMUm Profile 04.30.2008 Oppenheimer Main St Small Cap A LW 3Yr SYr le Yr 541 Ponds 421 funds 179 funds Morningstar Rating'" 3+ 3+ _ Mornirgs[ar Risk Avg Avg Morningstar Return Avg +Avg _ Oppenheimer Main St Small Cap A 3Yr SYr la Yr 541 funds 421 Ponds 179 fins Morningstar Rating° 3+ 3+ _ Morningstar Risk Avg Avg Morningstar Return -Avg Avg Morningstar Rating Oisc/osare The Overall Morningstar Rating isbased onrisk-adjusted retums, derived from a weighted average ofthe three-, five-, and 10-year (if applicable) Morningstar metrics. 0201N Momngstar. All Riglm RgrneO Pn IMOlmatlm, JaG, analyses altl oplnwrs rmtall tl Ilaen n) nclutle tte wlM1tlmtial mtl poplielary iNdmeum of Mvnmgsue. (2~ may rot Lecopietl or retliSpiMe1. (31 COMCmARlne meslmenl a4viu dlweO by MOmi~gzNC(al are gwi4M wlelybr nlwmaLmM pwpos¢a~M Nelelae are not an MerN Wyw wllaseculry.an0(5l ae ml waxantee NhPCMM.cwnplneaavurale. ®(IppeNleinrrruMi E6e{ttuWIPIWiaPl yulle4Uy law.MOmingstal NallnIX[¢re5y1601e IV am lrbl~Jttxlorn, 0amayPSOrpll9 bss6 rewlralg hwn, or rela@alo, Nis iMIXmd40n, Eald. aM1llySeSOllymivlSOr Neu one 111¢leport'ISwFPk- °~"w/~^ mBtGI5aIC5111tteWe II dr/pIiGMP II mYSI CP p'PPe~ R aefDll[~dni¢4 by d pl6petlu5, IX Pryxd19M1. eM JiYJOwR ffi[artEN. Rebase tlate 0430-2008 FINRA Members: For internal use a client reponinq puryoses only. Paqe 31 of fi0 Oppenheimer Main St Small Cap A LW Osrerall Mamiragstar Ry` Incept Type Total Asxis Mamurgstar cat *** OB-D2-99 MF Small Blend 541 Small Blentl puanmty R mns 1rt W 2ntl lA 3rd lA d[h pu Total % 99 g5 9] 99 99 98 99 99 Stack % 2006 12.15 -4.26 d02 8.39 14.64 - - ""' '-"' ---"toox 2007 403 5.43 5.03 5.48 -1.54 ....... .-..... ....... ._ ..,.... ...,. _. Bn 0mwmaEt0,00a ....... ..... .... ~ ~ Oppenheimer Main St 21%18 -10.70 -6.24 .............. ........ ...... ........ ......... E2].Im ................. .. .............. .................. ... ............. .................. ..-............aa iraiiy Return 1Vr 3tt SYr 10 Yr Incept fat ASg: Smdl Bkn EiL503 S[tl MOnNly - 3.95 - 14,30 _ 72.18 , ............. ._ _............ ................. ............. ......._... ilk . Irrkx. 56P 500 TR Std Quartetly `x.48 _ 15.Ofi _ 11.67 y12.106 Total Return `}.95 825 74.30 12.18 ./-S&P SOOT t27 002 3.68 ............. .......,...... .............. .,_.-..........- ...,..,... _,......1qx ./- Rus 2000 3.99 -0.37 0.54 - %RankCa[ ; 66 40 31 .. 4x No In Ca[ ~6fi1.,..... 541 421.,,..,.178 ,_,~,,,, ® ® ® ® ® ® ® ® ® ® ® ® ~aw~utrr~c~gmrrik _. 7-tla Yield _ .. - ,, p,o ~MnL~n ~~~yx .999E 7999:' ~.. ~.+Y»..wi ~ _. M..... °:_~..: '~ ~..26073i iSacvLt1 }~. lu~_F+==.~W hAsemeaee Duebwn _ _ 12.84 13.36 15.08 12.67 18.56 20,08 2063 22.11 1972 1849 NAV The Overall Momingrtar Ne00g is based on risk-adjrrsted 10.15 12.92 15 98 46 48 19.17 10.00 14.61 -1.54 -6.24 Total Remrn % nhrns, derived Irom a wei9h2d avenge of Me three-, - - -_ 19.25 24.80 6.12 17.80 8.29 509 1.15 -7.03 1.21 .4 SGP 500 TR /rve, and 10.yaar (d applicable) Momingrtar mebics. - 13.11 10.44 4.50 -0.77 0.85 5.45 3.72 0. W -0.12 .4 Rus 2000 The pedormance data 9uoted 2presenes pest pedormance ........._-.. ............. ................ .... ............. ................ .... .-......_ .,.............. .,.......... and does rmt guarantee future results. The invesfinerd 79 6 ,54 28 47 27 53 47 58 %Rank Cat Tatum end principal value a/an investment will /luttuate - - _ 277 313 382 446 521 563 608 645 690 No. of FUNS in Cat thus an invesrofs shares, when sold, may be worth :- more or kss Nan their original cast f0F8fg1~ljlj5a .. _. ,,~ ~'',.',..., .x...,x~.9+.;r}=-!a`',re „yam _,:F "' '°~ Currentpedormance maybe lowerahigh¢r Nan reNm 0^aV^~^aX Lorg% $IVt% Net% Saare Ctg Share 1116 Totalfimcks~- % data rroted herein. For er/ormance data cunem ro Ne matt Cash 1.3 0.0 1 3 sines Amoum D total Fuea-Ircame Assets q P 09--200] 111% summa Adio recent mwN~end, please w11800-125-5677 or visit U.S. Storks 912 0 0 97.2 ® 73 mil Oppenheimer Instl Money Mk[ 1.28 www.oppenheimedunds.com Non-U.S. Socks 14 0.0 1.4 ® 879800 RofmSiaar Technologies, Inc 0.40 BONS 0.0 0.0 0.0 565,100 MGI Pharma,lrc. 040 r-,ems=.s*--a- -: Other O1 0.0 0.1 "":;jpy -mn~+Rl uru ..~ ~ .................. ................ .................. .... ® 318,801 Wootlwartl Govema Company D38 #~'~__ =~„~9 .,.,~-~:,,w~aru~m Total loco D.D IoD.D S.En ~~ ® 325 200 Varian Inc 0.38 • Frant43rtl Lwtl % NA Egr4ry Stile Paddio Port Rel Ref 641 800 Alpha Natural Resources Inc 0.37 vaue else raowor Sntrsacs Avg INex Gt O 616 500 Tu rware Brarxls Cor anon 0,35 lMlerrM Laatl % NA taa pile Pm P/E Ratio TTM 77.7 1 OB 112 O 1 m11 GraRech Imernatialal. Inc 034 Fum upenses Ma P/C Ratio TTM 9.5 11.93 1 07 ® 4 mil Tenet Healthcare Corporation 0.34 Maregement Fees % O.fi2 Smau P/B Rata T1M 2.4 0.93 1 22 p 544 200 Massey Energy Company 034 Geo Av Mkt 1669 0.03 133 ......_.._ .............. ......_..... ............_... 12b1 Experrse% 0.25 9 739050 Aeroposnle lrc. 0.33 Prospeews Gross Eaperrse Ratio % 7,12 Cap Emil ® 397,900 OSI Pharmaceutirals.loc. 0.33 Fued4rcame 5 ® 368,600 Foundatlon Coal Holdings. Inc 0 33 ""S" '"" ya'~-~' ~ ® 158,600 Unitetl States Steel Caporati 0 33 --' -, _ ' i~'4-`3x[. .' soon nr tsn A EH Duratbn 3Yr SYr tD Vr B'gh ~ - 8 333,500 Comtetlr ielecanmirations Corp 0.32 541 hrltls d21 hMS 1l8 hods Avg EH Meturrcy _ Mm Avg Crede Quality _ Momirysnr Ranrg"" 3* 3* - lw~ Avg W[O Coupon Sea>weipMinps Srocl¢% Re156P 500T Maningsnr Risk Avg Avg - Avg W[d Price _ '~' Irtlormatian Ecormmy 27./ 1.36 Momingsnr Return Avg +Avg - m Software 9.6 2.55 3Yr SYr la Vr Qedt NUlyas BoM% ~ Hardware 13! 1.35 Snrltlard Deviation 13.06 13.88 _ ~ - ® Metlia 1 2 0.41 Mean 8.25 14.30 ~ - ®..,. TelecommuNCatim ., .3:1 ..... ........092 _ A ............. ............ Sharpe Rano 0.35 0.80 _ ............. ............. .....................- a Serviee Ermraorrry 42d tA5 BBB - ~ HeaHhwre Services 10,8 0.94 MPi Stausti¢ Srareertl lrmea Best Fitlbex BB - 56P5001R DJ Wihhire 45W B ~ Consumer Services 8.2 113 Alpha -0.63 -3.25 Belmv B ................. .........,... ......................_- Business Services 14.6 3.12 Ben 1.26 1.11 NWNA ©..... Fnanclal Semres .,.., B;B..,. ,,,.,..,0:52 _.... R-Squaretl 73.86 95.82 d Marrufaetorig Ecatwny 30.7 0.77 Q Consumer Goods 6.7 0.81 Regisml Expsaae Stocks%Rd 56P SOOT ©i nduaVia EAodE 18.8 1.42 12-Manm Yieltl - Americas 99.4 0.99 30-day SEC YieM - Greater Europe 0,0 0 Energy 3.7 0.26 Potential Cap Gains Exp - Greater Asia 0.6 - 0 IJtilitles 1 0 0.27 Operrtiars Family OppeMreimerFuntls Objecfive'. Growth Minimum lRA Purchase: E500 Marrager:Mark Zavarlelli Ticket OPMSX.LW Mirimum lntitial Purchase: E1,000 Tenure: fl8 Vears Min Auto Irrvestmen[ Plao. 8500 Purchase Lonsnaints'. • ®2oce Momirrjsrar. All Rghts ResmM ire mfmndlm,aata. malysu anO Wnnxrs cmMlrlLnaen(1)mdWede wdiaenlialme paprletary ldmmaGOnd MmnugsMr. 2)maynm de capiN mralistehMad. u^n'II1I~1(I~~Eil la7 eorlm crosmue mvestmmr aence onseaq MUningstar.(q are Prwiaea svlehru nrmruumal Pr~asei aw ucrerse are ratan ores ro wymaaaa sem4y. mefsl ae mtwmaneam to cmea cvmvlete ar acwrxe. ml /nn nou' fic~t as dterwix ralurea by ties. Momingzmr wa nm ce responstle la arryvaelrg emislom, eamages or uM bsses rewlr.y horn. or relatee m. ores ldmmaum. data, amlyses or ~rxms m mar use this repm Is sygle. menial sales IRmaNe. II appliaM1k lr mot M1e preceded a acmrrpamea by a prm'pectus, a eq~rvalmt aM aixbsure 9aremerA. 60 C~ L J Morningstar RatingTM' Disclosure for Load-Waived A Shares This disclosure page is being presented because the following report reflects a Load Waived A Share. Not all investment reports will include this disclosure. The A Share class Morningstar Rating is provided on [his page as a side-by- side comparison to the Load Waived A Share class security. Ratings and other statistics for load-waived ver. ions of the class A shares of mutual funds reflect the investor experience for ;hose individuals who do not pay the funds' front-end sales load, such as retirem~ ~t-plan participants. The load- waived rating supplements the Morningstar Rat ~g for the original A share class, where all load-adjusted measures reflect fhe maximum front load. r Background .. Most mutual-fund companies offer multiple shave classes of funds for different types of investors. The industry convention is to label these share classes with letters and to structure them with different fees. Typically, A shares have front-end sales loads and lower ongoing expense ratios (compared to other share classes of the same fund). Sometimes investors do not have to pay the from load. For example, the A share class is often used in defned-convibution refirement plans, such as 401(k)s, and fund companies generally waive the front load for plan participants. Fund companies also reduce or waive the front load for individual investors who com- mit to invest above a certain amount. Additional Details Load-waived A shares are displayed and Vea[ed like a separate share class, and most data is the same between the original A share and the load-waived share. The statistics that are different include load-adjusted measures, such as the Morningstar Rating, rating-related scores and returns, tax-adjusted returns, and any percentile ranks based on these measures. To be eligible for load-waived ratings and returns, the fund must be an A share class, must have a front load and must be domiciled in the United States. Morningstar does not calculate load-waived ratings for B or C share classes because fund companies rarely waive the loads on these funds. Risk aM Relum Profile 09.30.211Ott' Oppenheimer Port Series Moderate In A LW 3Yr SVr 10 Yr 937 funds 717 funds 422 funds Morningstar Rating'" 3* Morningstar Risk Avg Morningstar Return Avg Oppenheimer Port Series Moderate Inv A 3Yr SYr le Yr 937 funds 777 fuMS 422 funds Momingstar Rating° 2+ Morningstar Risk Avg Morningstar Return -Avg _ _ Momingstar Rating Disclosure The Overall Morningstar Rating is based on risk-adjusted returns, derived from a weighted average of the three-, five-, and 10-year (rf applicable) Morningstar metrics. ®2(p9 MommgNer. NI RigMS RFSev~. iM nlmnaum. Gam, malyses aM Whims mnmu~,tl Rhein n) n[IWe tlR cmriemrial me prtplftary iMnmaOOn d Manir55W. r1) ~y mr ce eryvel m r~imMal. (ll aorw cmRaute RnesrmeraMim dfaetlq MmmiysMr,l<)are Prwiaetl soleNmr mrumdimaipuposu aM tlerdrxe are mtm onem Wyusellaeerutty. are 151 ae na wartadmmceemect canplded armnam. ~nppeNrinrniwds. Evcapr as Mixwise reluiree glow. Maningsra sullndcerespmsale ld egvaeug eensiwu. eamagezd dRa loS5P5 remIrMYJ M1Om.arelame m. Nis iNmnaum.Rma. aral)ses ar rgiRmram Neir use. iRS rgartR SWPie- wrw-^~+ mmral vies limarue II apperaRle R mat Reprec lee d acconpanetl Ry a prospecRa, a eq~nalaM1. aN eiscmvse slammed Release tlate 11/342099 FINRA Members: For internal use a client reportirl4 puryoses onry. Pa4e 33 of 60 Oppenheimer Port Series Moderate In A LW OverallMwningsm Rtg` Incept Type Total Assets Momingsw Cat *** 04-05-05 MF Moderate Allocation 937 Moderate Alteration • -LLB `: '~,p ~ ':'®. ® ® ® ® ® ® ® ® ® ® ® ® [w mm~n sgra Ouartay Redms 15tfA 2M qV 3rtl pv 1[h Otr Total% 19 so sz SNU% 2W6 3.33 -0.01 3.17 4.30 10.Ofi- '- "-- ""' "-"'10a1i su 20p7 2.13 2.87 313 -2.10 6.07 ~~ ""' -' "" '-' -~- GvwM ataf0,a00 ..... ..... .... .. ...~ ~ Oppenhemer MOe lm 2008 -5.70 - - - -0.70 ~~~~ -~~~- - ~~ -~~~~~~ ~ 512,499 ............ .... .............. ...,..,...... .. .... ............ ................ ... .................1a Traillrg Reuura tYr 3Yr SVr 10 Yr Incept Cat Avg. MObrateA 512,338 $Itl MonWy 0.68 - 7,19 ...-x ............. .. .. ............ .................. ....... ..............._~ -Irdex: DOw Joss Mo Sttl Ouarterty ZO6 _ - 5.55 1 513.122 Total Return 0.68 1 72 - 7.19 , ................. ... _.. .. ............ ... ............ ... .. ................la +/-Dow Jones 1 10 1 76 _ +/-Dow Jones 2.46 0.31 - - %RankCat 24 39 ; _ - ............ ..._....: .... .................. ............ .. e ................... No in Cat 1137.,,..,. 937 717 ~,,. 422 ,,., ® ® ® ~', ® ® ® ® ® ® ® ® Panam.asz qu.rue _.. 7-day Yield a ... walun ~0ry ;~_. > Yom` 1n .''~ 24YtE X102 ~ `, . _ 6 r ,- _ .. kfrs~.;= .^... _ . sex PeAmreaav 0kNovm _ _ _ _ _ _ _ _ 7050 11.Zfi 11.40 71.32 NAV The OverallManingstarFatirg is based on ruk-adjutted 70.06 6.07 0.70 Total Return% reNmt, derived fiom a weighted average olthe mree-, - - - - - - - - - .1.84 -1.95 0.72 +/-Dow Jones M five-, and 14ysar (d applicable) Morningstar mebics. - - - - - - - - - -0.13 7.21 1.38 +/- Dow Jorws U the peAonnance data 4wted rePresentspartperlonnanro .........-.. .._-.. .........- .........- ............. ...... .._....... ........... ._.... 50 8 %Rank Cat and does rwtguaranroe future resul6. The investment - .........-. .._.~- .... ........- ............- ....... .......... reNm endprincipal value o1 an investment will Nuauate - - - - - - - - - - 1103 124p No. of Funds in Cat thus an invesrols shares, when sold, maybe wortA rjC-v_~ more or less than their original cost. POrSf01 s1'!m7~~~A tm~.-`- '~Y ~ 1U+'+ u'" ' ._._ _ q . _ ..,x .....:ex,a~.rmart ..a E .,ua.,rs+wa"55;-.'-. m.w......«.~.u.. :,ra:r Currentperloranance maybe lower or higher than reNm Grr4os%^^% long% Sren% Ne[% Share Clg Eaare Oloul Smcas % data noted herein For Aormance data cunem ro the most Cash 5.9 0.0 5.9 sirxz Amoun o Toral FlxeeJrxare Assets 9 ce 10.2007 4% Tumoxer Patio rerom monrocnd, please ca11800-225-5677 or visd 0.5. Stocks 38.1 0.0 38.1 ® 2p mil Oppenheimer Core Bontl Y 20.86 wsrw oppenheimeAunds.rom. NonllS. Stocks 11D 0.0 iLp ® IDmil Oppenheimer Lllfllfetl-Term Gove 10.53 Bonds 45.0 0,3 44.7 ® 2 mil Oppenheirner Capital Appreria[ 9.94 xw asppyrv P, ga;;-fa ,: Other 0 9 0.6 0.3 p 3 mil 0 nheimer Main Street V 9.67 Total 101 0 1.0 100 0 ® 11 mil Oppenherrner Champion Income Y 9.61 Saks Claaryes • Fra4EtM l.oatl % NA E910t15ryk romdio Port Pet RN 9.. ..... l roll Oppenheimer Glcbal Y 9.55 VaYe &em GawN Statsnks Asg Ineea fat DelerrM loatl % NA large O 4 mil Oppenheimer Ualue Y 9 47 P/E Rado TTM 17.0 - 709 p 8 mil Oppenheimer International Btu 5.71 Fred Expmxs Mi° P/C Ratlo TTM 12.1 - 1 17 p 7 mil Oppenheimer Commodity Strat T 5 43 Marlagemem Fees % 0.00 5mao P/B Rano TTM 2 B _ 1 11 p q roll Oppenheimer Main St Opportun 4.79 12b1 Ex arise % 0.25 Geo Avg Mk[ 35427 _ 1.15 """""' " """""' " """""" P O 2 mil Oppenheimer Real Estate Y 4.24 Prospectus Gross Experrse Ratio % 1A7 Cap Smil ® i mil OppeMeimer IraO Money Mk[ 0.14 ,~~ ~-° ~ F'uealrcarc 5ryk s_ a.l ° rJ---~ ~ ~F slArt Id Lmq P~ Avg Eff Duratlon 3.57 3Y SY 10 Yr Avg Eff MdNriry _ 937 runtls nJ hinds 4TTWrMs Mce Avg Credi[Dualiry AA Maningstar Ratirg^' 3* - - tw Avg Wtd Coupon 5.95 5xm Wxaymnps Stales % Pet r3v„ tares Maningstar Risk Avg - _ Avg Wttl Price 97.90 'P Intatmalian Economy 27.9 - Mamingstar Return Avg _ - m Software 5.3 - 3Vr SVr 10 Yr pabt Aarayvs Ot-312000 Batl% ~ Hartlware 148 - StaMartlDeviatim 6.33 PHA 6763 ® Metlis 3.8 - Mean 7.72 -_ -_ ~` 2.23 ®...., Telecommuricatien .....40... A ........... ................ .....,. 5 62 ti Serrice E 11.t _ Sharpe Ratio 0.54 _ _ eonomy.. ......_...... .....- BBB 4,56 ® Healthcare Services 8.7 - MPl Statistts StaMara IMU Best Fit Irtlex BB 7.89 Duw Jaes Mal Dow Jmes MOeaaze B 8.56 ® Consumer Services 61 - Alpha -1.67 -167 Below B ................ ~~~~~~~ .............2.50 Q Business Services 2.9 - Beta 1.01 1.01 Hnandal5erxces 26.5 NR/NA 1.02 ©,,,,,,,, , . ........... R-S uaretl 87.38 87.38 .............. ................ ........... 9 d Manaafaeuarag Eemany 27.9 - Consumer GOOde 74 _ Regiorul Eaposue Staffs %Rel pow Jwes 12-Month Yieltl - Americas 81.7 ~ Intlusnial Goods 10.3 _ 3atlay SEC Yieltl - Greater Europe 14.7 _ ~ 6lergy 8.3 _ Potentlal Cap Gains Exp - Greater Asia 3.5 _ 0 Utilities 1.9 - Opentiam Family: Oppenheimerfunds Objectlve'. Growth and Income Miimum IRA Purchase: E60D Mareger. Rutli Schatlt sicker OAMI%.LW Minimum Intitial Purchase: 51,000 Tenure: 3.1 Years Min Auto Investment %an', 5500 Purchase Cmstraims: • oboe MOmugstar Ali gyms R¢are]. Ne idormaim.earn. malysesaM apidom mmnreenercn fll n«mae ere GFleaaaei ma prepielary imamaum or MOmmgstar. (21 maY mtkcopie0 or reaittndrtm. a^nul1'~1(I~~paz (a)eo mrcmmwemaurmraama aaneaq ManagsW.(<)are prewea wiry na momviwwl wp~em maazwe are mr an onamdyaseilaseoery.aM(5)are rm warraaea rocecanea cwnvlae or acarme. m` /nn nou'Hfl Exc~tazoavwiscraquirea glow, MOmingnr saallrimceresp oie la arryaaang aensxim, damages or wa.. ipS56 rewniy amm.a reielMto, errs eramahm, aara,awiysesarpir.msaucirusemssreprorssrpple- ~ral sales meawe n mporaeie it rout heaaeeea a acmnPamm by a pmspata, a ~valmt ma a~scrosae vare~rwd 34 of 60 C~ • • Morningstar Rating'"d Disclosure for Load-Waived A Shares This disclosure page is being presented because the following report regects a Load Waived A Share. Not all investment reports will include this disclosure. The A Share class Morningstar Rating is provided on [his page as aside-by- sidecomparison to the Loatl Waived A Share class security. Ratings and other statistics for load-waived versions of the class A shares of mutual funds refect the investor experience for those individuals who do not pay the funds' front-end sales load, such as retirement-plan participants. The load- waived rating supplements the Momingstar Rating for the original A share class, where all load-adjusted measures reflect the maximum front load. Background Most mutual-fund companies offer multiple share classes of funds for different types of investors. The industry convention is to label these share classes with letters and to structure them with different fees. Typically, A shares have front-end sales loads and lower ongoing expense ratios (compared to other share classes of the same Fund). Sometimes investors do not have to pay the front load. For example, the A share class is often used in defined-contribution retirement plans, such as 401(k)s, and fund companies generally waive the front load for plan participants. Fund companies also reduce or waive the front load for individual investors who com- mit to invest above a certaii amourn. Additional Details j Load-waived A shares are tl splayed and treated like a separate share class, and most data is the same t_rtween the original A share and the load-waived share. The statistics that art different include load-adjusted measures, such as the Momingstar Rating, ruing-related scores and returns, tax-adjusted retums, and any percentile 9nks based on these measures. To be eligible for load-waived ratings and re[.:rns, the fund must be an A share class, must have a front load and must be domiciled in the United States. Morningstar does not calculate load-waived ratings for B or C share classes because fund companies rarely waive the loads on these funds. Risk and Ream PiofOe 0430.2008. Oppenheimer Rising Dividends A LW 3Yr SYr la Yr 1695 Funds 1316 funds 630 funds Morningstar Rating" St 5* 4tr Morningstar Risk -Avg -Avg -Avg Morningstar Return +Avg +Avg +Avg Oppenheimer Rising Dividends A 3Yr 6Yr 10 Vr 1695 funds 1316 funds 630 funds Morningstar Rating'" 41r 41r 3tr Morningstar Risk -Avg -Avg -Avg Morningstar Return +Avg +Avg Avg Momingstar Rating Disclosure The Overall Morningstar Rating is based on risk-adjusted returns, derived from a weighted average of the three-, five-, and 70-year lif applicablel Morningstar metrics. ®zooe Munngsur. no wgnu heseeb the iNOrm,al~m. aorta. awryses am whmM ~uineD neem n(xwpae n. mrcamuai me gaprieury utlnmaum m Mmvrgstar.lz) may mtce cW~m w reaa'a.m. (3l do no[crostiwmiwestmmt aence ofleeDty Mpmiystar.lq are gwibetl w4yror nlumarima gapousaM Mertlve are mr an pHnmhuy a.~lla.moriry, aq f5l ore mr wanmteeuee arrzt complxeu ararate. ®OypntleimvluMC Eaept as uMnviser~uueD by law, Mpmingsur 4ull notceresrartsUle la arryvaeag Decwwu, Damages pr uba lDssss remlrng horn, areurstl M. Mis iNDmaum.earn, arulysesw lpnumzw Meer use. ibisrgmis sµpk- ^•~"^'m^^ menu) vies litenwe. II applicaNe it mxt Le gxa'leD a acwmpanee by a prspetne. a eynalan. aM eiscbsue AatermM1. Release Este 0430-2009 FINRA Members: For in[emal use a client reportirw purposes only. Page 35 of fi0 0 enheimer Risin Dividends A LW Overall Marnigsrar Rtg` Irreepl Type Total QaaeLt pp ~ Mamingsur Cat ***** D4-30-90 MF - largeNad 1695 large Blend q rtwy Remns lnqu 2Mgv 3tlgv /IhW iolal% BO B5 99 94 88 95 92 93 59 W 97 Aork% 10 -0.63 fi.W 6.79 15.9fi 2006 3 """' ""' _ """"' """" "-' 1WM . ...... ..... ..". ........ ........ .......... ear. cmwurn510,000 2007 4.28 9.40 1.20 1.46 12.73 ~~ ~~~~ ........ ... ~ ~ Oppen6dmer R¢Irg 2008 -7.47 -3.41 fZ3.37/ .. .............. ........ ..........,. .. .. ............ ................. ... ................ 4R ~Cac Avg. Mrge Blm bailing Revnns tYr 3Yr SVr 10Yr Ircept (19895 S[tl Mmmly -0.65 - 13.24 4.59 14.28 .............................. ............ .. ....._.... .. ..,........,... ........... 2h rlntles: SBP SOO7R Std Quarterty 0.03 - 14.09 4.27 14.15 1 (21,488 total Return -0.65 11 07 13.24 4 59 14.28 _...,...... ......._ ....... ................. ....._.... ................. tale +F S6P 500 T 4 03 284 2.62 0.70 +/- Rus 1000 3.97 2.44 2 01 0.35 - %RankCa[ 79 12 11 27 ............. ........... ................. .. ............ .. ............. ... ................. µ ~ 1695 1316 fi30 No in Ca[ 2104 ® ® ® ® ® ® ® ® ® ® PMamunce OrMrrie ,.,,., ,__,_ .,..,, _.... ® ® uxn rategay 7-0ay Yied - .. 799i® ....q. ~. >-i~i ,v ~ >rrm= ' .~'~ ' :, ~ a.`ci~,.raG aigus hrlomance Oucbmn 20.39 21.33 18.73 20.69 18.64 15.72 19.15 21.38 19.37 19.17 17.79 17.11 NAV TAe Overall Momingslar Rating is based on dsk-adjured 26.49 946 0.04 12.96 1.88 -18.88 27.01 1267 596 1596 12.73 -3.41 Total Return% mNms, derived hom a weighted average olNe three-, -6.87 -1911 -21.08 22.06 4.017 3.22 -0.67 1.79 1 OS 0.17 7.24 1.62 +F 50P 500 TR five-, and 10-year (Aapplicabkl Momirystarme0ics. -6.3fi -17.56 -20.95 20.74 4.56 2.77 ~2 88 1.27 -0.30 0.50 6.96 1.48 +b Rus 1000 The Pedonnance data 4wtedrepreserdspastperlormanre ............. ............ .................. . 24 67 52 57 54 fie 76 ... ........... .. ................ .... .......... 53 45 77 9 15 ............. ................ %Rank Cat enddoes not guarantee Mure resulrs The investment , ........... ....._.~ .. .. . ... ........... .... ...... .......... ............. .._..... reNm endprincipal value oleo investment will fluctuate 674 804 989 1 C69 1345 1468 1526 1611 1743 1980 2090 2207 No. of Funtls In Ca[ thus an invesrofs shares, when sold, maY be worth more or less Nan their original cluT s __. y .,. 2'E""r I ~ 'Yx tR~£~i~~'-2 -y S ~: ~a..v"~s^ s3'~x stx &%t' }Y-0tHq~lk.~>~¢~6.„„~fa7~3A9yaat,a„:-;.;ai'- 'i~:. '= „s ~xravu.=~,:.«.. :T'~=' "ate ,a,.:,.s:au-v ~'`m Cunnntpedonnance may be bsver or higherthan reNm Cnnposiaon% lorg% 9hat% Net% 9Mre Lrg Scare 69 total Scales % data noted herein. For edormenre data cuner0 ro Ne mo# 4 v Cash 1.7 0.0 1.7 u"~ Amoud a anal Fiam~lrcane 1o-zOg7 1ae%wmwa Ratio risers recerrt month-end, please call 800-525-7048 or visit U.S. Stacks 88.2 0.0 88 2 ypq q00 General Elec[rk Company 2.72 wasv oppenheimerlunds can. Non-U.S. Stocks 8.3 0.0 8.3 ~ 537,100 1.P. Morgan Chase&Co. 2J7 Bads 0.0 0 0 0.0 ® 295.408 AOda Group Irc. 2.38 :- ._~ s u .r as s.u v Yr ~ e:u ~4~ :'. ONer 17 00 1.7 ............ ............... ....~_.................. ~J 412.600 Emerson Electric Compaq 2.23 ...._ . ,. . - Total 1ao.D o.e 106.D 639 900 Microchip Techrl0logy, lnc 2.17 ~~ ~~ ...,..,..., Front-Ertl lnatl% NR F9"'h Sryle Pomdio Port Rel Rel O 261900 Colgate Palmdive Canpaq 2.14 • Defertetl LwE % NA VaWe 61ea UnMa 5rsastl¢ Avg rvlea Cat longs 228 735 ExxonMObll Corporation 210 P/E RaOO TTM 15.4 0.94 0 98 564 632 Wells Fargo Compaq 2.04 Frnd Eaperses Ma P/C Ratio TTM 11.0 1.08 1 O6 p 226 800 Chevron Corporation 2.03 MarMgemerrc Fees % 0 67 small P/B Ratio TTM 2.9 1 13 1 73 258 921 W6etl Techrrologies 2.02 72b1 Egrense% 0.24 Geo Avg Mkt 58224 1.12 153 6........ 280800~~~~~ProcrerBGamble Company ~~~~~~~~~~~~~~~ 1.9fi Prospll:cWS Gross Eaperrse Ratio % L77 Cap Emil 410,731 BaNe of America Corporation 1 93 8 548,530 Microsoh COrpaation 790 - P "' .""' ~... ~= fumlrrcmesl7le 8 457,300 AT3T, Inc. 1.87 S ti. ~=~ :. srur Ira twq xlyn Avg EH Duratbn - 450,511 Wachovia Corporation 1 86 3Yr 5Yr lOYr Avg ER Maturity _ 1.695 funtls 1,]16 Nrtls 630 NMS Mm Ayg CretlO DualOy _ Mornilgstar Rating"' S* 5* 4* l , Avg Wttl Loupm s"~+°%''°9r°aes Smcrs% Rd 56P 5roi Mommgstar Risk -Avg Avg -Avg am _ Avg Wt0 Pdre - '0' lrEOrmatian Economy 1fi.0 0.79 Morningstar Re[um +Avq +Avg .Avg m Sot[ware 29 0.52 P'ndr aa.ysrs 9pM% 0 Hartlware 9.3 093 3Yr SYr to yr ~` ® Media 1.0 0.35 Stallard Deviatlon 8.66 BS4 13.70 - Mean 11.W 13.24 4.59 ~ ® Telecommuacation 3.6 1.06 Sharpe Ratio 0.78 1.13 0.14 A ................ ..._.._. ........................- d' ServiceErnwmy 36.5 0.80 BBB - ® NeaOhcare Services 9.1 0.79 MPi Satisa¢ $IaNatl IMea Best FL Ibex BB - ® Lprlsumer SQNIe¢5 5.2 0.72 64P 50018 56P Se01R B ............... _......... ...............,.......- i S i = B 3 9 0 83 Alpha 303 3.03 Below B ness erv ces us . . Beta 0.69 0.89 NR/NA ©.,.., Finannal Services .,.,,.18.4 1.~ R-Squared 8415 84.15 d MaMaoav9rg Eeonamy E7A 727 ® Corssurner Goads 13.2 1S9 RepiaMl Eapoaae Stocks % Rd 56P 500 i ©i Intllafdal Grads 17.9 1.35 12~MOnth Yield - Americas 92.5 0.93 30-tlay SEC Yieltl - Greater Europe 7.5 - 0 ~9y 11.7 0.82 Potential Cap Gains Esp - Greater Asia 0.0 - 0 UtBi[ks 4.7 1.31 Operaums Family. OppenheimerFuntls Objecfive'. Growth Minimum lRA Purchase: _ Maruger Joseph Higgins Titlter. OARD%.LW Minmum ln[i[ial Puchase: E1,000 Tenure: 0.8 Year Min AUro lrrvestment Plao. Y500 Purchase CmsVaints. • D200e MOmalgnar. PII Pg6¢R¢ave0. the irJwmxian.Lana, mdysesam ognaw wnMimtl 6wem(11ialWe tln coneJertal and propleMrynlamaum of Mnningsar. 121 may not 0e croim mrMlnrMa~, I ® (3l tlo mlcrosnWS mvarmmt aLNce dle'eL try MOmiySUr.(41 are Drwipetl mklylol nlmnanmalryryosa aN tlcerelue are rare MwmMrymsellareority. aN lSl aem[wanantetl mLecmecL Cwnplae or acNrxe Illk /III' IIYYrIar n~ ,nn n0u'm Gcglr a dMlwise rcquretl Ly Nw. Muningslai Nall not ce respars6le la arty Vatlug tlamorts. Lamages ar We' losses resuNy fipn. w rehreL ro, Mis Mnmalim, LMa. analyses or grmms or Nelr use Plls rgnal ¢ syele- mmMl sal¢ILeraprelr aFpliraLle rt naR Ce [`ecetleL m awo~netl py a prmpeGlw. a eW Valera. atl Llsdosure 4arerlm[ 36 of 60 ~~ • Morningstar RatingTM' Disclosure for Load-Waived A Shares This disclosure page is being presented because the following report reFlec[s a Load Waived A Share. Not all investment reports will include this disclosure. The A Share class Morningstar Rating is provided on this page as a side-by- side comparison to the Load Waived A Share class security. Ratings and other statistics for load-waived versions of the class A shares of mutual funds reflect the investor experience for those individuals who do not pay the funds' front-end sales load, such as retirement-plan participants. The load- waived rating supplements the Morningstar Rating for the original A share class, where all load-adjusted measures reflect [he maximum front load. Background Most mutual-fund companies offer multiple share classes of funds for differem types of investors. The industry convention is to label these share classes with letters and [o sVUCture them with different fees. Typically, A shares have front-end sales loads and lower ongoing expense ratios (compared to other share classes of the same fund). Sometimes investors do not have to pay the front load. For example, the A share class is often used in defined-contribution retirement plans, such as 401(k)s, and fund companies generally waive the front load for plan participants. Fund companies also reduce or waive the front load for individual investors who com- mit toinvest above a certain amount. Additional Details Load-waived A shares are displayed and treated like a separate share class, and most data is the same between the original A share and the load-waived share. The statistics that are different include load-adjusted measures, such as the Morningstar Rating, rating-related scores and returns, taz-adjusted returns, and any percentile ranks based on these measures. To be eligible for load-waived ratings and returns, the fund must be an A share class, must have a front load and must be domiciled in the United States. Morningstar does not calculate load-waived ratings for B or C share classes because fund companies rarely waive the loads on these funds. Riskarld Rltun Pr~k 0430.2006 Oppenheimer Small & Mid Cap Value A LW 3Yr 5Yr 1o Yr 429 furbs 341 funds 15a funds Morningstar Rating"' 4# 5# 4# Morningstar Risk +Avg +Avg Morningstar Return +Avg High Oppenheimer Small & Mid Cap Value A 3vr svr lovr 429 funds 341 funds 15a funds Morningstar Rating'" 3# 5# 3# Morningstar Risk +Avg +Avg Avg Morningstar Return Avg High Avg Morningstar Forting Disclosure The Overall Morningstar Rating is haled on riskadjusted returns, derived from a weighted average of [he three-, (ve-, and 10-year (it applicahle~ Morningstar metrics. Avg +Avg m2o0B Manirgslar ao wgnrs Resa.ee. lne inlommtim, Baca. analyses are opiniara cMlamM naem 117 oluwe Ne mrmeemai ano popnaary nlamaum of Manmrprm, (21 may rot le copim a rmntridRm. nlaomtcrosNUremvestmanaencemeeatyrwmnagmr.lalxepwRleesdNylanlamttlmaipaPOaaamNnelaeareretanmamtyassoasealryam(5lorerimwananrmmeecarxtmltpneoraavrne ®t)PPamhrinwfavda' Eaceplm aMrwlu requveC Oy law. MOmngsrnr srallnmreruporawe for alry o-aelrg tlecivms. tlamagez or tiler losses revrrcug M1Om.areNNtl to, Nis mlamaam.earn. anatysesaopmmmsa Nar use. iMS rgert ¢slgplz- wwm~.. melUl ales lRereWell tynLULe R mi¢L Leprec~ee a acwrryametl py a pn5p¢cY¢, a ryurvalail mE RISdOSUre Ldremmt. Release date 04362009 FINRA Members'. For in[errel use or client repmlirq purposes only. P 0 37 f 60 Oppenheimer Small & Mid Cap Value A LW ~* ommgsbr R[g` IOrkeept9 Mypa Total Assets MMunigBsw Cat 429 Mid-Cap Blend ...~ _ ~_. .; s rr ar, +g .9~tCr ~u.i a ,. .. a::. Ouartery Reruns 1s[Oh 2rd 0/ 3ra Orr 4NW ihtal% 2006 6.93 -1.95 1.62 10.75 17.98 2007 6.36 8.52 -1.38 -4.13 9.13 2008 -17.46 ~fi.21 IIaiirg Remms 1R 3Vr SVr 10 Yr Ircept S[tl Mon[hty 7.91 _ 1969 9.25 7201 S[d Quartetly ~9.1fi _ 19.86 8.45 1173 Total Return 7.91 12.67 19.69 9.25 12.01 +/- $LP 500 T -3.23 4.44 9 07 5.36 _ +4 SSPMid400 -5.15 1.47 4.49 -0.39 %Rank Cat 56 13 6 20 No. in Cat 503 429 341 158 7-day Yieltl - Poalomeace R6ebvm The Overall MpmingstarRatirg is based on risk-adjusted 2Nnu, derived ham a weighted average Wlhe Nree-, five-, and 10.yaar ld applicable) Morningstar meairs. The performance data quotedrepresents pasfperfomnance and does mtguarentee hrbrre results. The imrstment reNm andprirkipal value ofan invesanerrc wrv11 /luctuate thus an invesrors share; when sold, maybe worth more orkss man Neir orginal cast Currentpedomnance maybe bwer mhgher tAan return data quotedherein. For peApmrence date current to the most recerrtraontAcnd, please ca11800-225-5677 or visit www.oppenheimerhmdscom. S+aa porRs Frpa-Ennd Load % NR • Deiersed Load % NR Fred Eepensn Managemem Fees % 0.62 12D7 Expense % 0.24 RospecWS Goss Eapernse Ratio % 1.09 3Yr 5Yr tOYr 4291uMS 311 NMS 1581uMs Mlroingsmr Ratlngt" 4* 5* 4* Morningstar Risk +Avg +Aug Avg Morningstar Return +Avg High +Avg 3Vr 5Yr lOVr Standard Deviation 1223 12.61 17.35 Mean 1267 19.69 9.23 Sharye Ratio 0.70 1.24 0.39 MPT Statistics Standard IMU Bas[ BI Ibex 54P 5Ip iR Mmnirgstar Mid Cap Alpha 3.56 1.29 Beta 1.20 lOfi R~Squaretl 7fi.53 94.06 l2-Monm Vield - 30-day SEC Yieltl - Poten[ial Cap Gains Exp - ® ® ® ® ® ® ® ® ® ® ® ® NvesmrmtStyk an 91 91 9B 90 92 9fi 99 58 95 98 Smck % .......... .... ............. ... ............. ..,.. .... ........... ....-..... loOF ......... .. ............. .... ............. ....._ .... ........... .............IXF frokvtlr Of Etd,apB .. .............. .. ............. ........... _ ............ ........... .... .................~ ~Oppv4vrm Sm Mitl 532.581 - . ............. .. ............ ..... ............. ...... ......._. .. .... ........... . ................. 49k Ca[AVg: MkYfap Bl QB,2BO .......... ............... ..... ............. ................ .............. ............... pi -IMex. 54P500 TR ~1 ~ E22.4BB ® ® ® ® ® ® ® ® ® ® ® ® Purlar~ Yp.ra0e a. ,,... ^~^e: ~~]_ mm~E r ''!, ~1. 2WP_, _~%i3 ,'.~~ ',3000 3c , ,~.,:.,~k~t^S!!6~i..~xbf::». 20.46 77.83 17.58 19.39 21.68 1940 27.00 3L2fi 3305 36.95 3673 3445 NAV 24.37 -0007 -1.39 16.44 12.19 -10.51 4605 28.29 71.73 17.98 9.73 -6.21 Total Return% 9.05 38.64 -22.43 25.54 24.07 11.59 17.37 17 41 6.82 2.19 3.64 -1.18 +/- S&P 500 TR 7.93 -29.18 -16.11 -1.06 12.80 401 10.44 11.81 -082 7.67 1.16 -4.38 +/-5&PMid400 61 85 89 33 31 19 32 3 14 17 22 75 %Rank Cat 204 252 294 277 329 367 421 426 459 464 494 529 No. of Funds In Cat ~(~~ ~;,~~~! yr 'z:-sx~ ~~`~ ~. m- ~i!a!.=J°r9^~1._ ~.v..:3~Lti e~.waa.r.~..~L.:Fr•<-.. m:~.::::.~..:t~:.lww.uv'sE"3..-::.m.i2:~ Congosiarn% Lorg% $hon% Net% Share LM1g Share 91 Toul Stocks % Cash 3.2 D.0 3.2 sirce Amount 0 coral FhetlJrrume Assets 102007 136% Ivmwr Ratio U.S. Stocks 94.4 0.0 94.4 ® 138 mil Oppenheimer InsU Money Mk[ 3.20 NomU.S. Stocks 24 0.0 24 ® 2mil Navistar lmematbnal 2.01 Bonds 0.0 0.0 0.0 ® 850,000 Everest Re Group, Lttl. 2.07 Other 0 0 0 0 0;0 ® 2 mil National Financial Partners C 1.84 Total 100.0 0,0 1000 Smil CMS Energy Corporation 1.82 L9td%9tyk Pomolb Pon Rrl Rd ® 2 mil HeaIN Net, Inc. 7.78 VaYe Bluq Guam $tatatics Avg Irxkx Cat Large # 2 mll Grarv[e Cwlstrucuon Inc. 1.77 P/E Rabo TTM 16.3 1.00 103 p 3mll Goodyear Trea Rubber 175 Ma P/C RaUO TTM 10.7 1 OS 1.17 p fi mll NewAlllanre Bancshares Im 1.71 Small P/B Ratio TTM 1.9 0.73 0.87 ~ 2 mll PmtecWe Ufe Corpoaton 1.fi6 Geo Avg Mk[ 3871 0.07 0.70 .. ......_ .. .. ............... ...._._._...... ® 2 mll MPAfee Inc 1.64 Cap Smil ® 3 mil CoMgra Foods, Inc. 1.61 Pier:tl.incane Style ® 2 mil Hospira. Inc. 1.fi0 slnn lm t ® lmil ARliatetl Computer Services 1.58 m9 wqn Avg ER DaraB00 - ® i mil Caryenter Techndogy Caporal 1.43 A ERM Mm tow ug amnry _ Avg Credit Quality _ Avg Wttl Coupon - Avg Wttl Price - CreGt Arayvs Bond % AAA _ AA _ A BBB _ BB _ B Bebw B _ NR/NA Regmul Eapestve StorJ¢% Re156P 5001 Americas 98.5 0.99 Greater Europe LS _ Greater Asia 0.0 _ S'+xmr WaarMgk Stocks % AN SSP 500 i "~' Irdarmation Ecawmy 19.9 0.99 m Software 7.2 1.91 Q Hardware 8.1 9.B1 ® Media 2.7 0.90 Telecommudcatim 2.0 0.57 O $ernee Etanom) d0.9 1.00 ® HealMrare Services 7.9 0.69 ® Crx¢umer Servces 9.2 1.13 0 Busiress Services 5.6 1.19 © FirMndal Services 1fl.9 111 d MarnWaeWrag Eeaaamry 39.5 1.00 ® Consumer Caoods 5.7 0.69 Qa Industrial Goods 1fi.4 1.24 0 Errergy 9.4 0.66 0 U[iNies 8.0 224 Openums Family Oppedteimerfuntls Manager: John Damian Tenure'. 6.6 Years • ObjeNve'. Small Cpmpanry Minimum IRA Purchase'. 5500 Ticker'. QVSGX.LW Minimum Initial Purchase: Sl,(XXI Min Aum Inrvestment Plan: 5500 Purchase Constraints: CI 020oa Mpnirgsrar. All wgnrs Resmee ire nf«marim,Bata. analyzesaM[pnuu cmuimehaem(1)hclWetle[paitlerrtwl and prupierary m(amahm WMVnmgsrv, 2l may iw[he chlue]or reaisnpRel. LL/`~F11' rItIYA(araB 131 ao mtcrosatueurvestmert aarxe rflttee try MOmmgYar, 111 are prwiaea wlely lm nldmalmal puposa aN rMNUe are mr an MamLiym ssllasecuiry.aM(5 nerd wartarrtea tubecmect complete or acrurme. ~I` JnnINSY1lY1 E.c~t m otta;rwise re9ueea by Uw. Mvnmgsmr shall m M resporable fa arrytratling Oeclsdrs. eama9es or Otte bwg rewl0y hun, or related [u. mis InlamaGm. aaa. amlyses or uplmora m Heir uselnls r yor[ Is srppe~ mmGl ssles literarue.ll aFplvaale n mmr be qm~~ m acconpanietl bra Ixospec[us, a erurvalmt. aN aiwas,.e slatemerM1. • • Morningstar RatingTM' Disclosure for Load-Waived A Shares This disclosure page is being presented because the following report reFlects a Load Waived A Share. Not all investment reports will include this disclosure. The A Share class Morningstar Rating is provided on this page as a side-by- sidecomparison to the Load Waived A Share class security. Ratings and other s[aUsbcs for load-waived versions of the class A shares of mutual funds reFlect the investor experience for [hose individuals who do not pay the funds' front-end sales load, such as retirement-plan participants. The load- waived rating supplements the Morningstar Rating for the original A share class, where all load-adjusted measures reFlect the maximum front load. Background Most mutual-fund companies offer multiple share classes of funds for different types of investors. The industry convention is to label these share classes with letters and to structure them with different fees. Typically, A shares have front-end sales loads and lower ongoing expense ratios (compared to other share classes of the same fund). Rist aM Reunr Profile 41.30-20Q11 -.. Oppenheimer Strat Income A Load Waived 3Yr 6Vr 10 Yr 165 funds 130 funds 98 funds Morningstar Rating" 4+ 4+ 4+ Morningstar Risk +Avg +Avg Avg Mornitgstar Re[um +Avg +Avg +Avg 39 of fin Sometimes investors do not have to pay the front load. For example, the A share class is often used in defned-contribution retirement plans,.such as 401(k)s, and fund companies generally waive [he front load for plan participants. Fund companies also reduce or waive the front load for individual investors who com- mit to invest above a certain amount. Additional Details Load-waived A shares are displayed and treated like a separate share class, and most data is [he same between the original A share and the load-waived share. The statistics that are different include load-adjusted measures, such as [he Morningstar Rating, rating-related scores and returns, tax-adjusted returns, and any percentile ranks based on these measures. To be eligible for load-waived ratings and returns, [he fund must be an A share class, must have a front load and must be domiciled in the United States. Morningstar does not calculate load-waived ratings for B or C share classes because fund companies rarely waive the loads on these funds. Oppenheimer Strat Income A 3Yr fiYr 10 Yr lfi6 funUS 130 furMS 98 Nnds Morningstar Rating'" 3+ 4+ 4+ Morningstar Risk +Avg +Avg Avg Morningstar Return Avg +Avg +Avg Morningstar Rating Disclosure the Overall Morningstar Rating is based on dsk-adjusted returns, derived from a weighted average of the three, five-, and 10-year (d applicable) Morningstar metrics. ®20oB Momugstnr. All aignrs aazavee. iM1e mtamalm, earn analyses am opimm~s cmUiree naem (1) aelWe me mrfnmuai ate VoPrnm~Y mlam9l~ NMOrnnauar. (2) may mr0e copies p retlSVNU[m. n)eo ratcrosememestmml atlnu dlaee try MOmlrgva.(A7 are awitlee mklymr nlvmaimal paptrses ariatMtlve am ratan afle merry or zellasen~~y,aN(5)ae iu wartantM meacmrct. complve or acmrae OppenhaintarhvW' E¢eytaz Mermserequmetl ey law, Maning;mr rime nacerespwaae laairytratliyesivas, eamagesadaerlmees resuttmg han, or relates m.tNS lMVmaum.eats. erayYS Or opmmsamer i¢e ten rgatissupge- wr~....e m¢iGl tales leeraturelt $pecaek rt mu9 tleprselee v acmnpanree Ly a prospecuq v eyvrvalmt atl tli5tlowe 4atement Release Ease 04342009 FINRA Members'. For irttemal use a client repoRinp purposes only. P q 39 of 60 Oppenheimer Strat Income A Load Waived Overall Mamugsmr Rtg' **** 165 Muhisector Bontl Incept Type Total Assets 1P16~89 MF - Mamingsim Ca[ Mulfisector Bontl ..-O. ,w„ ~ 4a4W.'fYw t "~ ~nfi v~` Nuartafy Returns 1n W 2M W are W 4m Dv 3°tal % 2006 1.52 -1.fi2 3.75 401 7.67 2007 2.72 1.53 2.54 2.20 9.22 2009 1.54 - _ - 2.46 Irailirg Rewms 1Yr 3Yr SYr tOVr Inrepr Sttl MontNy 7 02 - 8.87 6.69 9.53 Sttl gLarterly 7.97 _ 9.45 6.63 9.52 Total Return 7.02 7 96 9.97 6.69 9.53 5 ........_ ~ ._._ ._ .. ........... »G LB Agg 015 3.03 4.50 0.73 - +/- LB US BrM 0.97 2.66 4.14 0.67 t %Rank Ca[ 8 9 17 20 No. in Cat 194 765 130 98 7day Yiele _ Ierlvrmmca Oiaebmn The Overall Morningstar flafing u based on 1kk-adjusted reNms, derived from a weighmd average olthe more-. lrve, and 74year (d applicable) MomingstarmeVics. the perlolmarrce tlaro quoted represent/ past peAormanre and does notguarantee hzalre results. The invenmem rerom andprincipel value o/an imesbnent will Buctwte thus an investofs shares, when mlq maybe worth mac or less than their original Inst. Culrentperlpzmanremaybe bwer ahigherthan reNm tlab grrotedherein. Farperlormance data currem ro roe most zerentmontltend, p/ease call BOO-215-5677 or visE wt/: w oppenheimedunds. corn frs -+ ~; -~ _u'~uu#., ~L.:.w., ,.,dim' Saks Clurges FrrvE~EM Loatl % NA • Deferred Loatl % NA FuE Eaparses Managemerrc Fees % 0.52 12b7 Espense % 0.25 Praspeetus Gmsz Exparsse Ratio % 0.91 3Vr SYr 10Yr tfi61°MS 130 tunes 98 furgs Morningstar RaOng"' 4* 4* 4* Morningstar Risk +Avg +Avg Avg Morningstar Return +Avg +Avg +qvg 3Vr SYr 10Vr Brantlartl Deviation 3.48 4.09 4.98 Mean 7.96 8.87 669 Sharpe Ratio 104 1.37 0.64 MPi Sradsecs Stargaze lNes Bes[DtIMv LB Agg IB US UNVe'sal Bon Alpha 3.22 2.98 Beta O6fi 0.82 R-Square0 2706 3700 12-Month Yiekl 30-tlay SEC Yieltl P°tential Cap Gains Exp ® ® ® ® ® ® ® ® ® ® ® ® S~ Fu' ed lromre 96 a7 B6 99 96 93 96 77 )fi 83 7a BoM % ................ ............ .......... .... ............. _......... .... .......-.....ten . ................ ......... .........,.. ..... ............. . .............. .. .................are rNWl11W510,000 . .............. _........... .. .............. .. .........,.. ... .............. . ............,_..~ ~ Oppenheimer So- lrm 521.142 . ................yre fat Avg: MWrse«o S18PB ...... ... ... .............. .. .. ............. ...,..._.. ............2re - IMex: LB Agg 119,971 __ ...._... ............... ... ......... .,............ lOk .............4 ® ® ® ® ® ® ® ® ® ® ® ® P•rtie P W n~ory ( ~;, .«,.~3_ ~g~..` ~ ~ ~ ,~ f .. . ~+'S'.N'. r -.. ~ ~...3 i'Si_'!~3 »'.:Attih 4.90 4.58 4.36 4.04 3.8U 3.74 4.22 4.33 4.19 4.29 4.39 4,42 NAV 9.36 1.67 4.OB 2.23 3.54 6.96 19.59 9.61 4.15 7.67 9.22 2.46 Total Return % -0.29 -7.07 4.90 9.39 -4.90 -3.39 15.49 5.2B 1 73 3.34 2.26 0.51 +/- LB Agg 1.41 -5.63 3.92 -8.59 -4.55 -297 13.71 4.65 1.44 2.70 2 72 0.70 +/- LB US Brd-U 64 fit 34 43 64 48 27 25 12 28 4 B %Rank Cat 99 127 132 160 170 7 B9 170 762 167 173 183 210 No. of Furgs m Cat y .._ _...~~~~.1:`JMY~,..,F e -'dbTBi -. ~ "'~ r-a'b'a~Le5_Y'~ a-.`-nT`,~"*TV~..n M""i . ~.. '.'Sm~ :sF~:z. .,H..::rs _.,,.,.a,. txvs.v:~k ::a4irac Cmpasiavn% L«g% Srm% Ner% BNare Chg Share 14 ipMl Snicks % Cdsh 11 2 2 %°C° 0 0 11 Aagum 1000 coral Fuellrepre Asses . . . 09--2001 72% iurroser Ratio U.S. Stocks D.6 0.0 D.6 E3 458 mil OppeMeimer Instl Money Mk[ 5 14 Non47.S. Stocks 1.0 0.0 0.9 . Bonds 79 8 ~ 9 79 0 9 36 mil Ofi Master Loan - 230 4.00 Other . 97 . . ® 1.3 84 95 mil DALV (REPUBLIC OF) 1.40 ® 95 mil FNMA S% 0 93 Total 102.2 22 1000 ~ gbil Japan(Govt OU 0.8% . 0.89 Equity Sryk PaNWg P«t Rel ReI ........_._ ® ...... 92 mA ._._ . Turkey Govt Bond 0 87 vahe elea Gavnn mrg Stnrsecs pry e Irene. Oat B 90 mll NEW SOUTH WALES TREASURY 0 86 P/E Ratlc TTM - ~ 36 mtl United IOngtlom (Govemmerrc a . 0.83 Ma P/C RaGO TTM - +,~ 70 m11 FNMA FRN 079 sme ll P!B Racio TiM - - 63 mll FHLMC 4 625% 073 Geo Avg Mkt 22609 _ D B3 ._._ ....... ~ .... 48 l ............ ................ G F Cap Emil ml ormany ( ederal Republic OU 0.71 ® 45 mil Bk Of Scotland 4.375% 0.70 ikea4ncarre Style tX 60 mil FNMA 4.75% O.fi9 ~^ Ire yuq Av EH Duration g 5.28 ® 67 mil FNMA 55% 0.68 xyh Avg ER Maturity tk fi0 mil FNMA 3.875% 0.67 Mm Avg Cretlrt Duality A yea Avg W[tl Coupon 6.15 Sector mergM1a"ps Stpcl¢% ReI IB Agg Avg W[tl Price 140.85 '0' IrEammtion Ermrwrny 17.1 - Cretit Arrly»12~31~2001 Bontl% AAA 42.78 AA 6.27 A 18.39 BBB fi.22 BB l4 43 B 8 76 Below B 213 NR/NA 1.02 m Software 0.0 - 0 Hartlware 0.0 _ ® Metlia 22.8 _ TelecommurliraUm 24.3 O Service Ecmmmy 199 - ® Healmrzre Services 00 - Coreumer Services 00 - 0 Busirress Services 00 _ © Finandal Services 10,8 d ManEacanag Economy ;/,1 _ 0 Consumer Goatls 6.2 IntllnVial Goods _ 0.0 _ Q Ene;gy 0.0 _ 0 UUlrties 27.9 ARmencas app Greater Europe Greater Asia Sorbs % 89.1 108 0.0 ReI tB Pgg uperamms Family: OpperlheimerFUntls Objective: MulUSector Bontl Minimum IRA Purchase: _ Manages Arthur P. Steinmetz Ticker. OPSIX.LW Minimum lnUOal Pu¢hase: 51,000 Terwre: 19.6 Years Min Aum Investment Plan $500 Purchase Cmslraints' • . ®2m3 MOmagsnit All Rlgms ReseraeliM im«mazim.eau.sayses aiq opiniws mnametl htten(1fIrclWetlceccnhtlaRal aztl pnprmvary nl«mafion of MOmngsmr. (2 maynorkcepim or reOSpgMM, u^1111I11r5rrlarap (3f ao mtcmvane irwesvnan aa.~oneaeq M«nn,gzar(aiarepw~aea agcy f«ef«mauowl pmposa am srerel«e are rer an one mwy or seuasemiry.am(s7 ore mr wanammmhecmm.camgrew acrar«e. nK 'nn nYMY\IIIIYNt Eecryt as wn«waserequiree by law. Momingsur mall n« k resporsgle f« dry aalrg Oecumr¢. damages ar dM losses resulting M1om. or relmee m. Nis IMamatim, tlam, sayses or apmlora ar enact use. mrs report ¢ supple- mmGl isles la«apaerapplicade a nxm begxM 1 «acrarroanietl °y a prmpxne. a eW rvalatl. «d tllscgsure Srarenmt Morningstar RatingTM' Disclosure for Load-Waived A Shares offin • This disclosure page is being presented because the following report reflects Sometimes investors do no[ have to pay the front load. for example, the A share a Load Waived A Share. Not all investment reports will include this disclosure. class is often used in defned-contribution retrement plans, such as 401(k)s, The A Share class Morningstar Rating is provided on this page as a side-by- and fund companies generally waive [he front load for plan participants. fund side comparison to the Load Waived A Share class security. companies also reduce or waive the front load for individual investors who com- mit to invest above a certain amount. • `J Ratings and other staUs'~ ics for load-waived versions of the class A shares of mutual funds reflect [he investor experience for those individuals who do not pay the funds' front-end sale load, such as retirement-plan participants. The load- waived rating suppleme lts the Morningstar Rating for the original A share class, where all load-ad i sted measures reflect the maximum front load. Background , Mast mutual-fund com;anies offer multiple share classes of funds for different types of investors. The industry convention is to label these share classes with letters and to structure them with different fees, Typically, A shares have front-end sales loads and lower ongoing expense ratios (compared to other share classes of the same fund). Risk and IteaxaPr~le 0430.2408 Additional Details Load-waived A shares are displayed and treated like a separate share class, and most data is the same between the original A share and the load-waived share. The statistics that are different include load-adjusted measures, such as the Morningstar Rating, rating-related scores and returns, tax-adjusted retums, and any percentile ranks based on these measures. To be eligible for load-waived ratings and returns, the fund must be an A share class, must have a front load and must be domiciled in the United States. Morningstar does not calculate load-waived ratings for B or C share classes because fund companies rarely waive the loads on these funds. Oppenheimer Value A Load Waived Oppenheimer Value A 3Yr SYr 10 Yr 3Yr SYr 10 Yr 1183 funds 932 FUnds 436 funds 1783 /ands 932 funds 436 funds Morningstar Rating'" 4* 4* 3* Morningstar Rating'" 3* 3* 2* Morningstar Risk +Avg +Avg +Avg Morningstar Risk +Avg +Avg +Avg Morningstar Retum +Avg +Avg Avg Morningstar Return Avg +Avg -Avg Morningstar Rating Disclosure the Overall Morningstar Rating is based on risk-adjusted returns, derived from a weighted average of the three-, five-, and 10-year ~d applicable) Morningstar metrics a+zwe Mwomgsur. ai wgnw aesa 1.llre imprmmlw.ears. anaiyse<ane opnons mluolee naw~nl maws me mrcamuai ane pppriewry ~mwmaew NMwningwr. Rl mayrmmcppm w,movilxaee, nl eo m[crosriMe mveStmmr aeexe dlaee Ly MwnugLar,(a)are ppncee mlely(or nlumarimal pwposeSaM Nrrtlde are ratan Wle'to drywsella iemrey,aM 157 are rpl wanam[e rocecmzt cwnpkYed acortwe Opparrlra{rreriymEa' Earyt as wrawyserequPee Uy law. Mwningstw YallnwberesmrwOk la arrytraeing eecryms. eamagasw N¢'IO55¢reSUNrg horn.wrelaree m. Mrs mlwmauon.ewa. araiyxsw oplrvwn or Neir sse iers reyoe is sygk~ ®r+ww.w. mortal sales IewaWe Ii ~plirade it mlm aepeceleE w acmrrpanree ey a pospem¢. w wryrvakm. atl tlisclpvme suremew. Release tlate 0130.2009 I FINRA Members For'rtternal use a cl' m por['rq o ly Paq 47 f 60 Oppenheimer Value A Load Waived b'aall Morningstar R[g` Incept Type Tetal Assets Mpmkgsrar Cat **** 09-16-85 MF _ Large Value 11831arge Value ~~.~rv 1}H,_ __ ,rs. S ~ ~ ~„* y F Imestmml Style 0 anay Remms 1stW 2rA Q/ 3rtl 0u 4N Otr Tmal% 9J 96 95 a5 BB 89 9a 95 95 95 97 Strcx% 2006 3.OB -0.58 5.98 6fi7 15.79 ................ ......_.. .. ...._.......... .. ............ ............ .. .......-.....lrck 2007 4.35 8.35 099 -6.99 6.31 ..............._ .,....... .................. ... ............ ............. ....................~ GmwN x4fm.Wa 2008 -11.12 -3.93 ............ ... ........... ............. ....,.... .......... .... .................~ ~OPpeMeimx VaueA - - - 521,698 &aiily Remra 1Vr 3Yr SVr 10ri Incep[ ~~~~~~~~~~~~ ~~~~~~~ ~~~ .................<h ~Gt Avgaarge Valu Std Mmthly -6.94 - 13b5 4.69 11.32 E21.948 ............... ........... ................ ..............,.. .,.............. ........ .......... Pa - Index: SbP 500 TR Sttl Duartehy -9.45 13.38 3 95 10.98 ' E22,d8B Total Return 6 94 880 13.65 4 69 11.32 i ........ . .............. ............... .....__. .......... _....................1% +/- S6P 500 T 2 26 0 57 3.03 0.80 _ +/- Rus 1000V 2.03 0 44 0.80 -1.29 %Rank Ca[ 35 27 13 $5 a c _... ............. ........... ......................µ No in Cat 1448 1183 932 43fi ,,.. ~~ ® ® ® ® ® ® ® ® ® ® ® (~in~~uy0lomle 7eay Yiel0 _ _, Boa ,°Y vr~ .y~ ~~,'`'~ 4993 1 ~ ma y~~.~ `z. 44a, ` __ 99¢; ~~ _ ~,:..~~, w ~ .L+4S?5" ;~9!2! ~i`KY.r' -_a~ wv.'m°-" ]l~irvf~ M!$°4 _`. Peafirmaxce 0scbxara 2113 21.89 1766 1720= 1770 15.36 2026 23.04 2334 25.95 2545 2445 NAV The Overall Morningstar Rating ¢ based on rkk-adjusted 23.99 8.53 -4.70 -1.53 2.98 -13.02 32.27 15.24 6.45 15.79 6.31 -3.93 Total Return % reNms, derived Ir¢m a weightedaverege olMe Mree, .9 37 20.04 45.74 7.57 14.86 9 OB 3.53 4.36 1.59 0.00 0.82 1.10 +l- S&P WO TR (rve-, and 70.year (d applicable) Morningstar mebiCS. .11 19 -7.09 -1204 -8.54 8.5fi 2.50 2.18 -1.25 -0.60 -6.45 6.48 0.34 +/~ Rus 1000Va1 Theper/onnarrce data gwkd representspastper/om~enre ....... ... ............. .................. ............ ................. .. .... _......... ....... .............. and does rrotgueranree faNre resuhs. The investmem 76 ..., 74,.. 92,._,_.86 11 _..,,., _„9, 1B ,.,..,. 21 39 .,...,.80 18,.,..,..,25 %Rank Cat reNm andpdncfpal value o/an investment will Nuctuate 428 518 638 809 892 961 1050 1220 1296 1371 1432 1521 No. of FOMS m Cat thus an invesrofs shares, when sold, maybe worth more or less than their original cost ~ds"- rv"' ~~'ggyy_^' ~, 'U^~"""~. 0' s rte" ~ . r "~em`°: '¢" "^ ~~ ' _ ..®..... Y»Y2~i~ czamCevdC..:m-.~ahii :m. .::::.t'.ce"' •"'A.C ^MdM.L®aT+.....:~Ei^s Currenfped0onanC¢maybe bwerwhigher than mNm LompositimX Lorg% Shwt% Nm% Shore Clg Share 43 igUl Slacks % data quoted herein Fpr pedormanre data current ro the mort Cash 2.3 0 0 23 silxc Nmam 0 Tplal Fixm-Income Assea 10~2W1 130% TMnpwr Rath mcentmomherM, please ca11800-115-5677 or visit U.S. Socks 78.6 0.0 78.6 ® 5 mil ATbi. Irc. 5.2fi www oppenheimedwds.com. Non-U.S. Stocks 191 D.0 19.1 BOntls 0.0 00 0.0 ® 3 mil Cretli[ Suisse Group ADR $24 tY 6mil Ciu rou Irc. ~'-T*° + ;~~ ._p -~ +;, Other 00 O.D 0.0 9 R~ 5.23 ""`'"T `"' Total ~~~~~~~~~ ~~~~~~~~7000 0.0 ~~~~100.0 ® 2mil ExxonMobil Loryo2tion 5.10 Ab puryvs O 1 mB Siemere AC ADR 4.82 • FrdwFM Loatl% NA ~'3~° ~'o Pan RM Rel ® 4mll UBS q,8<3 V9LP BI9tl GrovM SIM5II6 AVg IbeM Cd[ Defertetl Laatl % NA mrge ® 2 mll Exelon Corporaton q.q7 P/E Ratio TTM 13.4 0.82 097 8 2mll Firs[Errergy Corporation ;]q Fultl Expemes Mm P/C Ratio TTM 10.1 099 112 Marlagemem Fees % 0 47 small P/B Raba TTM 2.3 0.92 1 14 2 mll Johnson b Johnson 3.65 9 ......_... ...... 12b1 &perrse % 0.25 Geo Av Mkt 39653 0.76 096 2 mll Altria Group Inc. 3.44 ® 3 mtl liberty Gbbal, Irc. ... . _..._.......... 3.27 RospxWS Gross Expelee Ratio % 0.89 Cap Emll ® 2 mll Bank of America Corpwa0an 3.15 Fnea4rcur 5gM ® lmil Murphy Oil Corporoum 3.12 ry ® 2 mIi Navatar Intemalionel 3.05 _.. - ~~~.~~-~ .B+r.~.=~ _~.'~.:.' ' smn Im twN A EB Duration aYr 5Yr t6 Yr NIA Avg ER ~~~, - t1 2mil Amenran Express Compalry 2.96 1.1B]furds 932 bntls dJ6lulxh Med qvg Cretli[Quality _ Morningstar RatirxJ1e 4* 4* 3* tmv qyg Wrttl Coupm _ ~W®!•'tl"9a Strcks% Re156P 500T Morningstar Risk +Avg +Avg +Avg Avg Wttl Price _ '0' laalwmation EeonomT 26.7 1.33 Morningstar Return +Avg +Aug Avg m Software 1.7 0.45 3Yr svr ton 0ndl A"'y93 Bmtl%^~~ Hartlware 140 1.40 Stantlartl Deviation 10.35 10.19 15.20 AAA - ® Metlia 5.3 1,77 Mean 8.80 1365 4.69 ~` - ® Teleclammunicatim 5.8 1.69 A ..........._ ................ _............... ................ .............. Sharpe Rati0 0.4fi 100 0.14 .,.._.. ......... .......... lJ Serves Ecrxlomy 35.9 0.89 BBB - ® Healthcare Services 6.9 O.fi0 MPI SMOSV¢ Smrdartl IMex Bess Fit Ildex BB _ SRP 50018 Russrll1000 Value 6 ® Cor¢umer Services 31 0.46 Alpha 0.38 0.26 BelowB .......... ................. .........,...,.._„ ~ Business Services 0.0 000 Beta 107 1.06 NR/NA © Financial5ervices 25.7 1.51 R-Squaretl 84.36 8554 .. ........ ............. _........... ......... [7 MaMacWmgEcalany 37.3 0.96 0 Consumer Glmtls 6.8 0.82 Regain Exprlwle 6taks%ReI S6P SOOT ©. Intlustrial Goods 1D.B 0.92 12-Mlmm Yleltl - Americas 80.5 D.BO 30.tlay SEC Yield - Greater Europe 19.5 _ 0 ErcrgY 11.2 0 79 Potential Cap Gairrs Exp - Greater Asia 0.0 0 Utilities 8.4 2.3fi Opentims Fatuity: OppenheimerFurlds Objecbve'. Growth Minimum lRA Purchase: 5500 Manager: Christopher Leary Tickec CGRWX.LW Minimum Initial PurNase. $1,000 • Tenure: ZS Years Min Auto lrrvestment Plan 5500 Purchase Cwstraims: 02gg ManogsMr All RipMa Reservallre nlmmmim.data. matyses aN rganmslmtametl haeln(1)ircJWetle cmh0altlal stl prcp'ie[ary uikrma[IImIXMdnrgzrar. (I(may mtEe cgielaralstaaDCl. 1'„ /11{'I~aarRaaaM (37mml rAlstttale Yrvesureaatlns MereD br Mmnmgur Nl are pmvgm soeyrar nrummlmalpWmes am Ve'elne are cotan onerto dry or Sella sewity.antl (57 ore ml waaametlmcecmect mmpleteuav,vane 1'/ 'N''Nl IYaY\I111YNE Eacepr a mMiwise requmetl Ly lax. Munmgstar elan riq [¢ rrpolrsible fv arry Vatlirg Jttitiore, Damages w We losses resoling horn, d rela@tl lo. N¢ nlvrnaum, mM. aiulyses or rpnilms or Meu ine.lMS reydr rsswpk~ melral ssks Ilrxawe.ll~pllr Ale It must Le peceOeD Ix azcorryanetl bya prrapecvn. a eW^'akD, antl dwlosure varement. Morningstar RatingTM' Disclosure for Load-Waived A Shares 42 of fin • This disclosure page is being presented because the following report reflects Sometimes investors do not have to pay the front load. For example, the A share a Load Waived A Share. Not all investment reports will include this disclosure. class is often used in defined-contribution retirement plans, such as 401(k)s, The A Share class Morningstar Rating is provided on this page as a side-by- and fund companies generally waive the front load for plan participants. Fund side comparison to the Load Waived A Share class security, companies also reduce or waive the front load for individual investors who com- mit ~. o invest above a certain amount. • • Ratings and other statistics for load-waived versions of [he class A shares of mutual funds re0ec[ the investor experience for those individuals who do not pay the funds' front-end sales load, such as retirement-plan participants. The load- waived rating supplements [he Morningstar Rating for the original A share class, where all load-adjusted measures reflect the maximum front load. Background Most mutual-fund companies offer multiple share classes of funds for different types of investors. The industry convention is to label these share classes with letters and to structure them with different fees. Typically, A shares have front-end sales loads and lower ongoing expense ratios (compared to other share classes of the same fund). Risk and RetunProfile 09-30-2008 Addtional Details - LoarFwaived Ashares are displayed and treated like a separate share class, and host data is the same between the original A share and the load-waived sha(~: The statistics that are different include load-adjusted measures, such as L~ Morningstar Rating, rating-related scores and returns, tax-adjusted retu~; hs, and any percentile ranks based on these measures. To be eligible for loac waived ratings and returns, the fund must be an A share class, must have a front load and must be domiciled in the United Stales. Morningstar tlces not calculate load-waived ratings for B or C share classes because fund companies rarely waive the loads on these funds. PIMCO Total Return A Load Waived PIMCO Total Return A 3Yr SYr 10 Vr 3Yr SYr to Yr 984 funds 832 Funds 439 NMS 984 funds 632 Nntls 439 funds Morningstar Rating° 5+ 5w 5# Morningstar Rating"' 3+ q~ 5+ Manings[ar Risk High +Avg +Avg Morningstar Risk High +Avg +Avg Morningstar Return High High High Morningstar Return +Avg +Avg High Morningstar Rating Oisc/osure the Overall Morningstar Rating isbased onrisk-adjusted returns, derived from a weighted average of the three-, five-, and 1 D-year lif applicable) Morningstar metrics ®2GIA Manmgya~. All Rlgars Resavea. Pn IMmm%im. Dada, salysez aM opmnm cmuioetl Caen 11~ ncWee tlw wn<itlaslal ma nl as re~ cros~DNe imresvnen aa.~ oaazeD q Mom~~q:ta~.lal areaw~eee aw'mr is mo-manmal pugne am me~erue aye nm fagtt as otlrervnse rttplaM py lew. MgningaM~ sM1all np ae resyrttQtle fu amy YMng eenslaa, Eamagas w otle bsses iezuN~g f maRSl vles IaemWle. D;ylVa~k rt m t ae ptteUel u azeonrpmetl Oy a ptwpe Tu, a eryrvaleil, aM Oistlosu251slenen[ a Maningsla. R)may mtRe capiel ur~utnRUM. -- cvlry, ane 151 ae nd wwramee m Ee cmett cwnplne or acmme. OppeaJrimerlaviaa' namaom,aau.arelyse:mrpwuuwmnr u:e. mss ~mnu sygle- ~ wpm.. Release tlam W-30-2008 FINRA Members. For in[emal use or client re0ortirq purposes only P 0 43 of 60 PIMCO Total Return A Load Waived °~°~IIFAemir~s~r Rt,. 'nom Tya TNtal Aasets Memingstar Dat ***** pt-1397 MF _ Intermetlia[e-Tenn Bond 9841ntermetliate--Term Bond • ~M1~,..-. ~,_~~ ? ~~ --m ~ ® ® ® ® ® ® ® ® ® ® ® ® Invesmrm[Styr Ouartery Rewrlrs Tst Ou 2MW 3apt. Im OV ioNl% 84 ]9 12 ~ 10 Faeallrnme 200fi -0.64 -0.40 3 76 0 81 3 50 .......... . ........... .. ......._15 5z.. ......._/O Id..........._]t 13 - ~ ~~ ~ .......... 9Ntl% . . 2007 1.59 -0.44 447 3.80 B.Sfi .......... ... ............. ...........IDce ._........... _.......... .................. ..... ........._.... en Grown ar S10,9W 2008 3.20 3.59 ........_ .. ............. ............. .... ............ .................. .............. ~ ~ PIMCO TceaI Re[AL - - - 520793 Trauirg Rewrra 1 Yr 3 Vr 5 Yr 10 R Ircept .. .............. ................. ............... ......................... ~¢ ~ Cat Avg. Iraerrrctla Std Mon[Ny 70.52 - 4.92 641 6.77 E1],901 Sttl Quartetly 10.29 - 5 07 6.41 6 78 ............... ...... .......... ... .............. ................. ........ , .. .. ............ pl . Inaez: LB Agg TOGI Return 10.52 5.fi6 4.92 6.41 6 77 519.911 +/-IB Agg 3.fi5 073 0.55 045 _ ............. .................. ............ ..... ............ _ ~_ .. .............-ta +/-LB 590Yr 288 0.65 0.26 -0.10 a %Rank Cat 2 4 8 4 No in Cat 1116.,,,,. 984 832.,,,,, 439 ..,..... .......... ® ® ® ® ® ....... ...... .... ® ® ® ® ~~ ® ®~~~ 0urux 7 tlay Ykltl _ IwNVn~eq°y ,!~89t5 ~,. .; . ~~" ~_ 9 _ ~°a [af mrsv~ sad , y eeir0~ieea 06dO°11 71160 10.54 99D 10.39 1046 10.fi7 10.71 10.67 1DSON 10.38 1069 10 91 NAV the Overall MomingstarNanng u based on dsk-adjusted g 67 9 25 -0 7d 11 56 8 98 . 9 68 5 07 4 65 2 40 3 50 8 56 reNm; derived lmm a weighted arerage o1 the drree-, . . . . . . . . . 3.59 Total Return % five-, and 10. year (AapplrcabkJ Morningstar metrics. 0 02 0.57 0.08 -0.06 0.54 -0.57 0.97 0.32 -0.02 -0.83 1.60 164 +/- LB A 99 024 -0.88 214 -0.87 017 -3.35 0 90 -0.65 0 58 -0.30 1 Ol 1.23 +/~ LB 5-10Yr G The performance data grmted represents pastpeAormance ............... .............. ........... ............ ........... .... .......... ............. ................. anddces not guarantee dm]re results. The investment .........._6._ 31.......14.. 15. ........21 36_,,.,..,.22 18,,,........76 2.,,. .,..,.,,3 %Rank Cat rerom andpdncipal value o/an investment will fluctuate - 495 561 614 706 784 952 1035 1043 7092 1097 1174 No. of FuMS in Cat thus an invesror's shares, when sold, maybe worth mot or less Irian tlreir original cost .». ,,.n<. ~, a. ^sr--.z.. ~;r av me - '~O~n01~.d _ '~¢~, a ,r. ~.*'~ ' ._. ....r.,~ :a.rr r.w~: ' a,~,,„ --aa ~ ~ .,d~.:a. '...~?suti..3 '".a v''Yw Currentperfomwnca maybe bwer orhigher than return Cwrq°sawr% Lorq% SFarc% Net% Share Crg 91ere 0 Torel Stales % data quoted herein FOrperlormance date curmntro the most Cash 584.1 5 8 since Amoum 1fi140 coral F'aetl-Irxnrtle 72 3 11 Assets recentmm~Mend. please ca11806426-0107 or visd U.S. SlrwkS 0.0 . . 09--2001 251% Turmwr Fetid 0 0 0 0 wm¢allianzinvertors.com Non-0.5. Stocks 0.0 . . ~ 209 bit Fin Fut Eurof Cme 12/15/OBCur OD 0 0 163.80 Bolls 908 . ~ 169 bit Fin Fut Eurof Cme NINOBCun 76 fl32 132.06 ;. ~. -~~uu*,3i . r„ ~;ym„ym ~' ~ OtMr 5 7 ~~ ~ 0 7 5 0~ 124 bit Fin Fut EuroB Cme 9/75/OBCun ~ 97.34 -~ :,.. ,._.'T:a ` ~`~'"s"o '"' ~ ~~~~~~~~ ~~~~~~~-~~ SS NI Fin FUt Eurof Cme 3/16/09Cun 5~~~~~ 4293 Saks Chrpn Total 6805 580 1000 tk 27 bit Fin Fut Uk 90 Day Uf 6/18/08 41.94 Frantfsltl Laatl % NA F9urcy Styr Padaio Pon Rel Rel ,ry 17 bll Fin Fu[ Uk 90day of 3/19NBC 25 2fi • Defermtl laW X NA VaYe BkrJ GawN Sr&s[i¢ Avg la,ga IMex Cat aY 16 DII Fin Fu[ Uk 900ay l0 9/17/08C . 24 08 P/E Rato TTM (4 14 dl Fin fu[ Uk 90tla L8 3/18/09C y . 21.69 Fratl Faprarses Mtl P/C Ratio TTM `~ B DII Fin Fut Uk 90tlay U(12/17/OB 12.31 Marla ement Fees % 0.25 Small R/B Rand TTM ''~ 5 dl Fin Fut Uk 90tlay of 06/17/09 8.2fi 12b1 Experrse % 0.25 Gm A Mk[ v9 ._..__._ .._...... .. ~ Prospacros Grass Es~errse Ratio % 0.90 Cap Emil 8 nl US ireawry (Fu[) -723 f7[ 4 bit FHLMC 5.5% 3.00 ,ry F'v~~ ~ {t 5 mil BRAZIL NTN-F 2O6 =a-, ~_.,.,- ~ 's-`j~,g:. - '' ° 5ron Im L n5 Avg E8 Duration Y.t 2 bit US Treasury (FU[) 5.39 1.62 3Vr 5 Yr m yr B ig, Avg ER Maturity fi.41 ~ 2 bit FNMA S% 1.61 9B/ bINS B32 Nrds 439 funds TM Mm Avg Credit Oualhy AA Morningsar Ranrg 5* 5* 5* ~, qvg W[tl Coupon 569 Sego Wtl9l'^"9s S[oc6% Rol l9 Agg Moningstar Risk High +Avg +Avg Avg Wttl Price 1695.90 '~' Irdamatian Emnanr Moningstar Rehm High High High _ _ m Software 3 Vr s yr 10 Yr Crttir AruFjsis tz-31-200] Bwtl % ~ Hartlvsre _ _ _ - $GMertl Oeviatlon 3.56 4.01 3.87 AAA 65.00 ® Media _ - Mean 5.66 492 6.47 a` 15.W ® Telecommurlicatim Sharpe Rand 0.38 0.44 0.77 A .............. .................. ...........,8 W d.....5rtnce .................. ............ Eeppmr ..._........... __._ BBB 4.OD ® Healthcare Servk:es MP/Sdoslics Snmae lrgex Best Fielbex BB 7.00 - - LBAgg lB MargageBacketl g 1 ~ ® Cm¢umer Services Npha D.58 -019 Below 8 ..-........ ............ ... 00 ~ Business Services ...............0 _ - Beta 1'21 1 40 NR/NA . pp © Finandal Services p R-Squaretl 86.98 88.18 , ............... .............. d Merarlaqurag Economy .....-...... _...- - - ® Cortsumer Gootls 12-Month Yieltl - Reydwl Eapoaurt Stocks % Rel IB Agg a © Intlushial Caotls _ _ 30-tla SEC Yieltl lvnericas 0 E - - y - Greater Europe _ nergy - - Potemal Cap Gains Exp - Greater Asia 0 Utilities OperaOms Fam6y. PIMGD Funtls Objective'. Corporate Boll -General Minimum IRA Purchase: 52500 Manager: William H. Gross icker: PTTAX.LW Minmum In[rtial Purchase: fS,OW • Tenure'. 21.0 Vears Min Auto Irnes[ment %an. 42500 Purchase Cmstraints'. N 472NB Mnnirgstar. All FNNS Fe'e'vm Tie nrama0m. eara.a,ays¢am opmi (3l d e ulu a k n w6 cmNlree nano 111lalWe Ne ~eaiial ma propleNry nl°mauon of MOmingsur, 111 mayrmt ee conm ar retllNaAnaf. ~~^rr ,1lk m t m cm ne mvesrmalr a v e o neeq MmnngAar. l4l are Prwieea solely rn rrmma~mal p.pm'ez ell Nna°e are nor an MnN W y or seoasmnlry.am ls)ae mt x-marrtmmeecmect comolereoe accurne ~I ~~ ~ )n nb ftteyt as Werw¢e reluvee bJ law. Mvnngsrar Nat na M resrensale la any o- aing &crslm5. eemayes w We losses resultig rcpn, or relarea N. mis imumaom. aara, arulyses arpinima or Nor use. rots rgpR Is eyple- rlrwtalsales leemwre. a aPplraBa n muv ee praeam ° ummaammora mospe vrs, a ewnalnn. aru alvosure saNrrmr. C J CI Hypothetical Report Disclosure Statement General This is an illusVation of a simulated investment and assumes the portfolio holding(s) were purchased on the first day of the period indicated. Sales and tax charges, including those required in the event of Vansfers between assets, are taken into account at the rates shown and may be higher or lower than what an investor would have actually paid had the investments been purchased then or now. The performance data represents past performance and is not indicauve of future results. Principal value and investment returns will Fluctuate, and an investor's shares/units when redeemed may be worth more or less than the original investment. The underlying holdings of the portfolio are not federally or FDIC-insured and are not deposits or obligations of, or guaranteed by, any financial institution. Investment in securities involve investment risks including possible loss of principal and fluctuation in value. The investment retums do not reflect active Vading and do not necessarily reflect the results [ha[ might have been achieved by active management of the account. The investment returns of other clients of the adviser may differ materially from the investment porVayed. The infortna[ion contained in this report is from [he most recent information available to Morningstar as of the release date, and may or may not be an accurate reflection of the current composition of the securities included in the portfolio. There is no assurance that [he weightings, composition and ratios will remain [he same. Preinception Returns The analysis in this report may be based, in part, on adjusted historical returns for periods prior to [he funds actual inception. These calculated returns reflect the historical performance of the oldest share class of [he fund, adjusted to reflect the fees and expenses of this share class. These fees and expenses are referenced in the reports Charges and Fees section. When pre-inception data are presented in the report, the header at the top of the report will indicate [his. While the inclusion of pre-inception data provides valuable insight into the probable long-term behavior of newer share classes of a fund, investors should be aware that an adjusted historical return can only provide an approzima[ion of that behavior. For example, [he fee sVUCtures between a retail share class will vary Vom that of an institutional share class, as retail shares tend to have higher operating expenses and sales charges. These adjusted historical returns are not actual retums, Calculatlon methodologies utilized by Morningstar may differ from those applied by other endues, including the fund 'itself. The investment retums do not necessarily reflect the deduction of all investment advisory fees. Cliem investment returns maybe reduced if additional fees are incurred. Performance for closed-end and ezchange-Vaded funds is calculated based on the fund's end of [he day market pdces as reported by [he New York Stock Exchange. Separate account performance is based on the mean experience of an investor in the account. This illustrauon may reflect the results of systematic investments and/or withdrawals. Systematic investment does not ensure a profit, nor does i[ protect [he investor against a loss in a declining market. Also, systematic investing will not keep an investor from losing money it shares are sold when the market is down. 44 of a0 Investment Summary Graph The investment summary graph plots the approximate market value of the security or portfolio over the investing horizon. It may also include [he total investment assumed in [he illustration and/or a benchmark. Total investment includes dollar inflows and outflows, including inflows representng noted taxes and annual fees paid out of pocket. If a benchmark index is included of - a graph, it assumes a similar pattern of investmenUwithdrawal as for the secu(ty or portfolio. Taxes and Vansaction costs are no[ applied to the benchmar'. index. Note that direct investment in an index is not possible. Indexes are un aanaged portfolios representing different asset classes, with varying levels of aaociated risk. The benchmark index included in the graph may or may not repre ant an appropriate or accurate comparison with the security or portfolio illusC'ated. Standardized Returns For ETFs, the standardized retums reflect performance, both at market price and NAV price, without adjusting for the effects of taxation or brokers commissions. These retums are adjusted to reflect all ongoing ETF expenses and assume reinvestment of dividends and capital gains. ff adjusted, the effects of taxation would reduce the performance quoted. For money market mutual funds, standardized return is total return adjusted for sales charges and reflects all ongoing fund expenses. Current 7-day yield more closely reflects [he current earnings of the money market fund than the total return quotation. For mutual funds, standardized return is total return adjusted for sales charges and reflects all ongoing fund expenses. Following this disclosure statement, standardized retums for each portfolio holding are shown. For VA subaccounts, standardized return is total return based on its inception date within the separate account and is adjusted [o reflect recurring and non- recurring charges such as surrender fees, conVact charges, maximum Vont-end load, maximum deferred load, maximum M&E risk charge, adminisVa[ion fees, and actual ongoing fund-level ezpenses. Definitions of Report Terms Annual Fee Paid: Your advisor was able to specify whether annual fees, if any, should be assumed paid out of pocket or Vom selling shares of securities held in the illusVauon. Average Annualized Return: Average annualized money-weighted return (internal rate of return). In illusvations with time periods less than one year, this fgure is not annualized. Capital Gains (Individual Report): Percentage of the total market value of [he holding that is a[Vibutable to the reinvestment of capital gains distributions. Charges & Fees (Investment Detail): The sum of fees charged [o the investor during the period, including Vont- or deferred loads, VA charges, and annual fees. Cumulative Return: The total money-weighted return of the investment over the enure ume period of the illusVation. Disldfwtion/Wdhdd: The sum of distributions not reinvested, plus any cash withdrawals during the period. Income (Individual ReponJ: The percentage of the total market value of the holding that is atVibutable [o the reinvestment of income or dividend disVibuuons. omm rnanuguar Au Rigors P~avetl ine mlamaum. gym. aidysss me opina¢ rmunee nAe.~ (11 n<wee ae rmrieaiuai ma pnprreury mlamauon d snan'.ngsur, 117 mayrroc ee copim or rmivwrtm, n)eo mrcrosuwe mresrmm aadce oneeaq Mannguar.l<)nre pmuieea m4ytor niomaemai p.poses one acraae ac mtac ono ro dym. uiauonry.em ls)>e rm wanamee moecmecc mmWneaacmrne. ®ppp~rrMmerrmds• E.cew as annwme reaurea oy yaw. MOmrgsar mai wr oe rapa¢eie la amtrae~ng eecn,ors, damages or and mssaresunirg non. areiarea ro. ma mamaom.earn. arayse:acpaauamen u:e. mis report is sippie- _... manai sales Ingacue a aoo~imme.t muss ee psmm a xcompammq a pospeum, a ewr+aier, as aiwawre ssarerrsrt Hypothetical Report Disclosure Statement (Continued crowtn {13} Capital Appreciation • Liquidate: Indicates whether the advisor chose to liquidate the holding on Discovery {11, 14} Dividend Growth {5} the end date. Emerging Growth {11, 12, 14} Median (Comparison Report): The total money-weighted return (internal Enterprise {11, 15} Growth rate of return) of the median security in [he illustration for the calendar year MidCap {76} indicated. Rising Dividends {31 } 45 of 60 New investment: Any new cash invested during the period. Core Pdncipal (Individual RepartsJ: The percentage of the total market value of Equity Fund {4, 11 } Main Street fund the holding that is atVibu[able to new investment. Main Seeet Opportunity {74, 15} Rebalance (PlanningAssumplionsJ: Indicates whether rebalancing is used, Main Seeet Small Cap {11, 14} and its frequency. "No" indicates no rebalancing. Options for rebalancing Value {77} frequency are monthly, quarterly, semi-annually, and annually. Equity Income {32} Rebalance (Invesnnent Assumptions): Percentage of total asset allocation to Value Select Value {14} be maintained in this holding through rebalancing. Small- & Mid- Cap Value {3, 14, 16, 33} Securities Remms (Comparison Report): The total money-weighted return Hyhrid (internal rate of return) for [he holding in the calendar year indicated, taking Balanced {11, 17, 20} into account cash Flows, charges, and fees. Baring China {2, 34, 35} Subsequent Invest/Wdhdwl: The amount, type, and frequency of Subsequem Baring Japan {2, 34, 36} Capital Income Fund {20, 21 } investments or vthdrawals from the holding. Withdrawals are represented portfolio Series: Active Allocation by a negative number. Systematic investments and withdrawals may be made ' portfolio Series: Equity Investor monthly, quarterly, semi-annually, or annually. If Custom," a custom schedule portfolio Series: Conservative Investor of investments or withdrawals was used. Portfolio Series: Moderate Investor • Taxes Due: The total amount of taxes due from the investor, determined by Quest Balanced {6,11,17, 20, 21 } Quest Opportunity Value {3, 11,17, 29} applying specified tax rates to disVibutions and sale of shares during each calendar year. Specialty Taxes Paid: Your advisor was able to specify whether taxes, if any, should Convertible Securities {7, 21 } Emerging Technologies {11, 15, 18} be assumed paid out of pocket or from selling shares of securities held in the Gold & Special Minerals {71, 18} illustration. Principal Protected Main Seeet Fund {5, 23} Net Dollars Invested: The total out-of-pocket expense (or the invests. Principal Protected Main Seeet Fund II {5, 23} principal Protected Main Seeet Fund III {5, 23} Includes new investment, annual fees paid to advisor, and taxes due. This fgure is Commodity Strategy Total Return {11, 19 T1 } net of withdrawals, including liquidation. , Real Estate {5, 14, 18, 37} Total Reinvest: The sum of disVibutions reinvested during the period. Taxable Bond {20} Total Return %: The total money-weighted return (internal rate of return) Champion Income {21} Core Bond {3, 5, 8, 21 } on investments for the period. International Bond {11, 12, 21 } Oppenheimer Funds: Limited-Term Government {3, 5, 22} Global {71} Senior Floating Rate {5, 27} Developing Markets {1, 12} SVategic Income {11, 21} Global U.S. Government Trust {5} Global Opportunities {21 } Muniapal {20, 24, 25} International Diversified AMT-Free Municipals {21 } International Growth Imernational Small Company {14, 30} AMT-Free New York Municipals {9, 21, 26} International Value {17} California Municipal {9, 21, 26} Quest International Value {3, 17} Limited-Term California Municipal {5, 9, 26} Limi[etl Term Municipal Fund Limited Term New York Municipal Fund {10, 26} • New Jersey Municipal {g, 21, 26} Pennsylvania Municipal {9, 21, 26} Rochester Fund Municipals {10, 21 } Rochester National Municipals {21 } ONOB Mdnngvr. All Pgn¢ Resev 1. iM inlumanm, aafa. malyses aM opmims cmulrea Ilneul n) Yca>1e the cmriUarcal ma poprierary nlumafmn N Mmnmgsrer. (2) mayrwc Le copletl m rMktnMea, (lf ao mlem5li[Ne mSlm4,l aahS dgea pj MOmlr1]51ar,(9f Me(UUIC¢aS"I¢Iy lu nldmmmal nuddi6 aM pCHde dre ml an 4flE'Odryd SelldSeNllly.dM(S~Se rlOi walaMN to te[mM [mgkle or a[INd[P ~ry ( d{ ® Eacgrt as mrelwlserequiretloy law.Mmungslar snal nm tie respweble fd any lra111g asislds. damages armM fosse resulting M1Om mmml vles Indmure.ll appllraMe it ml¢f ce pdeam w azmlryanea bya pospecns. d eq~lrvalmt. aM tllsclovxe suremelK. . mR am .mreblM m. the lrlfmnatim,tlam,amgsecd upnmsor Neu me. in¢rgwrt¢sygle~ r+4mnrml+s • • u Hypothetical Report Disclosure Statement (Continue Rochester Arizona Municipal {2} Rochester Maryland Municipal {2} Rochester Massachusetts Municipal {2} Rochester Michigan Municipal {2} Rochester Minnesota Municipal {2} Rochester North Carolina Municipal {2} Rochester Ohio Municipal {2} Rochester Virginia Municipal {2} Cash Reserves {28} Money Market fund {28} 1. The minimum investment is $50,000. 2. This is a new Fund with limited operating history. 3. The Fund had different advisor/subadvisor prior to date shown: Limited-Term Government (4/7/90); Core Bond (7/11/95); Small- & Mid- Cap Value (4/28/00); Quest International Value (1/1/05); Quest Opportunity Value (1/1/05); and Quest Value (1/1/05). 4, Life performance is calculated since OppenheimerFunds took over the Fund on 9/30/75. 5. The investment manager is currently assuming a portion of the expenses (which may be mod~ed at any time) without which performance would have been less. 6. The Funds subadvisor as of 1/1/05 is Oppenheimer Capital LLP, parent to the Funds subadvisor. OppenheimerFunds, Inc. became the Funds advisor on 11/22/95. OpCap Advisors was [he funds advisor prior to 11/22/95. 7. Prior to 3/11/96, [he Funds Class A shares had no initial sales charge, so actual performance would have been better. 8. The Funds investment objective changed from current income to total return on 1/21/05. 9. Available to investors only in certain states. 10. Maximum Class A sales charges were changed from 2% to 3.50% (Limited Term New Yak Municipal on 5/1/97) and 4% to 4.75% (Rochester Fund Municipals on 3/1/97) 11. Investing in foreign securities involves additional expenses and special risks, such as currency Fluctuations, foreign taxes and political and economic factors. 12. Investments in emerging and developing markets are subject to greater volatility and risks. 13. Growth stocks may be more volatile Nan other securitles 14. Smalltap investments are more volatile than stocks oflarger, more established companies. 15. Technology stocks may be especially volatile 16. Mid-cap stocks tend to be more sensitive to changes in earnings expectations, and tend to have lower trading volumes than large-cap securities, and therefore they may experience more abrupt and erratic price movements. 17. With value funds, the market may not recognize Nat [he securities are undervalued and they may no[ appreciate as anticipated. 18. This is a non-divers~ed fund, so investments may be concentrated into fewer securities or sectors, which increases volatility. 19. The Fund invests in derivative instruments and uses leverage which entails potentially higher volatility and risk of loss than traditional stock or bond investments. The Fund may, from time to Ume, have substantial exposure [o energy-related natural resources, which may also entail greater volatility. Page 46 of 6o 20. Fixed income investing entails credit risks and interest rate risks. When interest rates rise, bond prices generally fall, and [he Funds share prices can fall. 21. Lower rated (junk) bonds are more at risk of default. 22. The Fund can invest up to 20% of its assets innon-U.S. Government securities that have a greater risk of default. 23. This is a closed fund. Shares maybe exchanged or redeemed at any Ume. However, if you redeem shares prior to the end of the seven-year warranty period, you will receive the then-current NAV per share, which may be higher or lower than the Warranty Amount. In the even[ of reallocation of 100% of the Funds assets to U.S. Government securities, Ne Fund will not be permitted to allocate its assets to equity securities for the remainder of the Warranty Period, which will eliminate the Funds ability to participate in any upward equity market movement. While the fixed income securities that the Fund invests in dont pay income the Vadi[ional way, an income calculation is made for tax purposes based on the purchase price and [he Ume until [he security reaches par value. Like traditional interest payments, this amount is reported as income for tax purposes, The zero coupon bonds the Fund invest in do not pay interest income until maturity. However, the Fund is required to accrue and declare a dividend on such phantom income, so you will have taxable income. Distributions from the Fund are taxable whether or not you invest them in additional shares of the Fund. Stocks and S&P Futures Fluctuate in price and their volatility a[ times may be great. If the issuer of an S&P Future does not pay the amount due, the Fund can lose money on [he investment. While principal and interest payments on U.S. Treasury securities are guaranteed by the U.S. Government, the price of such securities will Fluctuate with the changes in prevailing interest rates. Zero-coupon U.S. Government securities are subject to greater fluctuations in price from interest rate changes than typical debt securities [hat pay interest on a regular basis. 24. With the exception of AMT-Free Municipals and AMT-Free NY Municipals, a portion of the Funds distributions may be subject to tax and may increase taxes for investors subject to Alternative Minimum Tax. Capital gains distributions are taxable as capital gains. Tax Vestment of the fund's distribution and capital gains may vary by state. Investors should consult a tax advisor to determine whether this fund is appropriate for them. 25. The Fund can have a relatively high portion of its portfolio holdings in particular segments o(the municipal securities market and therefore will be vulnerable to economic or legislative events that affect issuers in particular segments of the municipal securities market. The Fund's substantial investments in Tobacco bonds are vulnerable to economic and other factors in that industry. 26. The value of Ne Fund's portolio investments is highly sensitive to events affecting the fiscal stability of the particular state and its municipalities, authorities and other instrumentalities that issue securities. 27. Senior loans are typically lower rated (more at risk of default) as well as illiquid investments (which may not have a ready market). The Fund may invest up to 100% in lower-rated bonds. Not all of the Funds investment are collateralized. The Funds shares are no[ listed on any stock exchange or national quotation service. The Funds shares are not redeemable for cash daily but Ne Fund seeks to provide a degree of liquidity [o shareholders by making quarterly offers to repurchase a portion of the Funds shares. However, there can be no assurance that the fund will be able to repurchase all shares tendered in a particular repurchase offer. 28. An investment in the Pond is neRher insured nor guararrceed by Ne Federal Deposit Insurance Corporation or any other government agency. Although Ne Fund seeks to preserve the value of your investment at $1.00 per share, it is possible [o lose money by investing in the Fund. o11gB Mwningsa. ul GgMS Resesel ila mrmmatim. tlala, salyses vM ognun rmul,reJ nnnn (1) IncFtle the ~tlaRial so poprletary irdumation d Mvnmgtar. (2) mey rot Ee coplel m rmisNM0.eC, (3)JOnm cmmtlrte lmgtn¢rteMi[e olleetl b)Mtvnmgsu,.(a)are prwiJeJ wlelyfor nlamrtmalWWS~aM tMtNme are,ot an onerto drywsella seunry.aM(S~aemwartatrtellm M1ecmxt compkve tvam,ale pppnlrleimvrands' E¢~1 aSdMw¢etqunetltry law, MUmngnar Shall nq peteSpTlsBk k,alry[,a]mg tleeizd¢. tlamayes or dFa lozses msullmg hun.drelatetlto, Ihrs klamatim.0ala. aiulyus of ryvmorS Or Nep use. this repro is sygk- +Y~Mm~s mmMl sales owawe. n apparaek rz mw tie Pxeeee a acmmpamea Iry a prespenm, a epanalmt. am mxlosure sG@neM. Hypothetical Report Disclosure Statement (Continue • 29. Short selling seeks [o proft from declines in the price of securities and may result in losses i(the values of securities do not fall as anticipated. 30. As of 7/20/07, [he Fund is closed to new investors. 31. The Fund's name changed from Quest Value Fund and its investment objective changed to'seeks total re[urn'on 8/1/07. 32. The Fund's name changed from Quest Capital Value Fund and its investment objective changed to'seeks total return' on 8/1/07. 33. As of 5/31/07, the Fund is closed [o new investors. 34, The Fund's subadvisor is Baring Asset Management, Inc. The portfolio manager is employed by the subadvisor. 35. The Fund's performance will be influenced by political, social and economic factors affecting companies located in China. These risks include currency fluctuation, less liquidity, sub-custody risk, expropriation, confiscatory taxation, nationalization, exchange condol regulations (including currency blockage), lack of adequate company information, differing auditing and legal standards, political instability and less diverse and mature economic structures. In addition, investments in Taiwan could be adversely affected by its political and economic relationship with China. 36. The Fund's concentration in Japanese issuers will expose it to the risk of adverse social, political and economic events which occur in Japan or affect the Japanese markets. 37. The Fund's subadvisor is Cornerstone Real Estate Advisers LLC. The portfolio manager is employed by the subadvisor. • For Load~Waived Shares (LW) the Load-Waived star rating should only be considered by investors who are not subject to the front-end sales load. The source of [he data in [his report is Morningstar, Inc an independent mutual fund monitoring service. Results provided by Morningstar may differ from the information provided by Oppenheimerfundsdue to difference in calculation methodology, rounding and terminology. The information is not intended as an asset allocatlon recommendation or investment advice. Because each investor has different goals, financial needs and risk tolerance, you should consult a fnancial advisor to determine if any of these funds are appropriate for your portfolio. Before investing in any of [he Oppenheimer funds, investors should carefully consider a funds investment objectives, risks, charges and expenses. Prospectuses contain this and other information about the funds and maybe obtained by asking your fnancial advisor, calling us at 1,800.525.7048 or vis¢ing our website at www.oppenheimerfunds.com. Please read prospectus carefully before investing. Shares of Oppenheimer funds are not deposits or obligations of any bank, are not guaranteed by any bank, are not insured by the FDIC or any other agency, and involve investment risks, including the possible loss of the principal amount invested. Oppenheimer funds are disVibuted by OppenheimerFunds Distributor, Inc, Two World Financial Center, 225 Liberty SVeet, New York, NY 10281-1D08. • Page 47 of 60 ozoce Manmgwl. an wgnn nesevm. me imamapon, eau. analy.~s ane ~mmlu cmulnetl naem Itl name are mreeemel an proaieury mlamalan d Manmgsul. Izl may NI pe mplm a rm~mmMm. 13)tloml cmvalne ~mresonan aerie onaeaq Manmgsur.(alare prwltlee saeryra mamapmal e.poses ane meretae are ml an onamaryassuasearlry,am(s7 ae ml warrammmpe coned.cmlgaemaaumle. Gegn asdMvnsercqu,eJ py Uw, MVmmgsG, NNIM4resrertsNelu arly Vaelry ettivm5, tlamaynIXdMloiuS mvlling hem.IXreldNtllo. Nls ltianap9n.tlNa. alalyxsm Wlniar6ptlrepl¢e. iMS rgM¢surpk- ^~W1~ manal zaks IIIaaWe Ilyplvabe rt rtun [e peeMM u aewlrytniM py a poslecils. u [qurvalml aM 05cbswe sla@mmt. • Portfolio Snapshot Report Disclosure Statement I ;eneral ,vvestment portfolios illustrated in this report can be scheduled or inscheduled. With an unscheduled portfolio, the user inputs only the iortfolio holdings and their cameo[ allocations. Morningstar calculates -eturns using the given allocations assuming monthly rebalancing. Taxes, Dads, and sales charges are not taken into account With'scheduled' portfolios, users input the date and amount for all investments into and withdrawals from each holding, as well as [ax rates, loads, and other factors that would have affected portfolio performance. A hypothetical illustration is one type of scheduled portfolio. Both scheduled and unscheduled portfolios are theoretical for illustrative purposes only, and are not reFlective of an investors actual experience. For both scheduled and unscheduled portfolios, the performance data given represents past performance and should not be considered indicative of future results. Principal value and investment return of stocks, mutual funds, and variable annuity/life products will fluctuate, and an investors shares/units when redeemed will be worth more or less than [he original investment. Stocks, mutual funds, and variable annuity/life products are not FDIC-insured, may lose value, and are not guaranteed by a bank or other financial institution. Portfolio statistics change over time. Used as supplemental sales IiteraNre, the Portfolio Snapshot report must be preceded or accompanied by the fund/policy's current prospectus or equivalent. In all cases, this disclosure statement should accompany [he Portolio Snapshot report. Morningstar is not itself a FINRA-member limn. The underlying holdings of the portfolio are not federally or FDIC-insured and are not deposits or obligations of, or guaranteed by, any fnancial institution. Investment in securities irnolve investment risks including possible loss of principal and Fluctuation in value. The information contained in this report is from the most recent information available to Morningstar as of the release date, and may or may not be an accurate reFlection of the cunen[ composition of the securities included in the portfolio. There is no assurance that the weightings, composition and ratios will remain the same. Items to Note Regarding Certain Underlying Securities A closed-end fund is an investment comparry, which typically makes one public offering of a fixed number of shares. Thereafter, shares are traded on a secondary market such as the New York Stock Exchange. As a resuh, the secondary market price may be higher or lower than the closed-end fund's net asset value (NAVJ. If these shares Vade at a price above [heir NAV, they are said [o be trading at a premium. Conversely, if they are trading at a price below their NAV, [hey are said to be trading at a discount. An exchange-traded fund (ETFJ is an investment company that typically has an investment objective o(stdving to achieve a similar return as a particular market index. The ETF will invest in either all or a representative sample of • the securities included in the index i[ is seeking [o imitate. Like closed-end funds, ETFs can be Vaded on a secondary market and thus have a market pdce that may be higher or lower than its net asset value. If these shares Vade at a price above their NAV, [hey are said to be trading at a premium. Conversely, if they are trading at a price below their NAV, they are said to be trading at a discount. A money market fund is an investment company that invests in commercial paper, banker's acceptances, repurchase agreements, government securities, certificates of deposit and other highly liquid securities, and pays money market rates of interest. Money markets are no[FDIC-insured, may lose money, and are not guaranteed by a bank or other financial institution. Ahhough the money market seeks to preserve a stable per share value (i.e. $1.00 per share), rt is possible [o lose money by irnestment in the fund. Variable annuities are tax-deferred investments structured to convert a sum of money into a series of payments over time. Variable annuity policies have limitations and are not viewed as short-term liquid investments. An insurance company's fulfilment of a commitment to pay a minimum death beneft a schedule of payments, a fxed investment account guaranteed by [he insurance company, or another form of guarantee depends on the claims-paying ability of the issuing insurance company. Any such guarantee does not affect or apply to the investment return or principal value of the separate account and its subaccount. The financial ratings quoted for an insurance company do not apply to [he separate account and its subaccount. If the variable annuity subaccount is invested in amoney-market fund, although it seeks to preserve a stable per share value (i.e. $1.00 per share), it is possible to lose money by investment in [he fund. Pre-inception Returns The analysis in this report may be based, in part, on adjusted historical returns for periods prior to the fund's actual inception. These calculated returns reFlect the historical performance of [he oldest share class of [he fund, adjusted [o reFlect the fees and expenses of [his share class. These fees and expenses are referenced in the report's list of holdings and again on the standardized returns page. When pre-inception data are presented in the report, the header at the top of the report will indicate this and the affected data elements will be displayed in italics. While the inclusion of pre-inception data provides valuable insight into the probable long-term behavior of newer share classes of a fund, investors should be aware that an adjusted historical return can only provide an approximation of that behavior. for example, the fee structures between a retail share class will vary from that of an institutional share class, as retail shares tend to have higher operating expenses and sales charges. These adjusted historical returns are not actual returns. Calculation methodologies utilized by Morningstar may differ from those applied by other entl[ies, including the fund hself. Scheduled Portfolio Trailing Returns Scheduled Portfolios are customized by the user to account for loads, taxes, cash Flows, and specific investmem dates. Scheduled portolios use [he portfolio's investment history to calculate foal market values and returns, For scheduled portolios,both individual holding and portfolio returns are internal-rate-of-return calculations that reFlect the timing and dollar size of all purchases and sales. For stocks and mutual funds, sales charges and tax rates are taken into account as specified by the user (except in the pre-tax returns, which reFlect the impact of sales charges but not taxes). Nate that in some scheduled portfolio illustrations, dividends and capital gains distributions, if applicable, are reinvested at the end of the month in which they are made at the month-end closing price. This can cause discrepancies between calculated returns and actual investor experience, Scheduled Portolio Realms-Based Perfomwnce Data For scheduled portfolios, [he monthly realms used to calculate alphas, betas, R-squareds, standard deviations, Sharpe ratios; and best/worstttme-period data are internal rates of return. Important VA Disclosure for Scheduled Portfolios For variable annuity products, policy level charges (other than front-end loads, Onpg MOmiilgva,. Nl Rights Rmmum. me nfmmatim.Bata. malyses arts opMlm¢cmMimtllaeln n)nr".~tlIPCWNm[0l one proprietary lMmmaOm of MVnngsM,. R maym[De copieaaretl,vbulal. n)ao MCmsMlte mres[mml aavire meeaMMmni,gsN,.(9)arepwleee solely lm nlpnuhmal papcSm art a'erelneve na en ofin to puyusNlaseurny.art(5)ore nw wanantmretlecmect. wmple[ewararate ®OppeNleimvFolai frzgnmoaemise,equvea by law,Mmn,gsan 9WlnM1 ee respmaMelp mylrmi19 amwms. damages a, elan lozsg,esulYy hwn.mrelaleem, mis lnlormalm.aan. aralyees or opinim¢mtlretr use. tors repro is surge- a++ mortal ales ele'aurell apgirzLle it mW ee pecefe] a smmparvetl lty a gazpecll¢. v egurvalmt me als'low,e stau;nmt. • 1/ 11 u • Portfolio Snapshot Report Disclosure Statement (continued) if input by the advisor) are not factored into returns. When withdrawals and liquidations are made, increases in value over the purchase price are taxed at the capital gains rate that cun;ntly is in effect. This is not reflective of the actual tax Vestment for [hes~+ products, which requires [he entire with- drawal [o be taxed a[ the incomt ~nax rate. If adjusted (or sales charges and the effects of taxation, the subaccou rt returns would be reduced. Scheduled Portfolio Investment Activity Graph The historic portfolio values that 're graphed are those used to track the portfolio when calculating return •i Unscheduled Portfolio Realms Monthly total retums for unscheduled portfolios are calculated by applying the ending period holding weightings supplied by the user to an individual holding's monthly returns. When monthly returns are unavailable for a holding fie. Due to it not being in existence during the historical period being reported), the remaining portfolio holdings are re-weighted to maintain consistent proportions. Inception dates are listed in the Disclosure for Standardized and Tax Adjusted Returns. Trailing returns are calculated by geometrically linking these weighted-average monthly returns. Unscheduled portolio returns thus assume monthly rebalancing. Returns for individual holdings are simple time-weighted trailing returns. Neither portolio returns nor holding retums are adjusted for loads or [axes, and if adjusted for, would reduce the returns stated. The returns stated assume [he reinvestment of dividends and capital gains. Mutual fund returns include all ongoing fund expenses. VANL returns reFlect subaccount level fund expenses, including M&E expenses, adminisVabon fees, and actual ongoing fund level expenses. Unscheduled Portfolio Investment Activity Graph The histodc performance data graphed is extrapolated from the ending port- folio value based on the monthly retums. Benchmark Retums Benchmark returns may or may not be adjusted [o reflect ongoing expenses such as sales charges. An investment's portfolio may differ signifcantly from the securities in the benchmark. Returns for custom benchmarks are calculated by applying user-supplied weightings to each benchmark's returns every month. Trailing returns are calculated by geomeVically linking these weighted-average monthly returns. Custom benchmark returns thus assume monthly rebalancing. Standardized Retums For mutual funds, standardized return is total return adjusted for sales charges, and reflects all ongoing fund expenses. Following this disclosure statement, standardized returns for each portfolio holding are shown. For money market mutual funds, standardized return is total return adjusted for sales charges and reflects all ongoing fund expenses. Cunem 7-day yield more closely reflects the curtent earnings of the money market fund than the total return quotation. For VA subaccounts, standardized return is total return based on its inception date within the separate account and is adjusted to reFlect retuning and non-recuring charges such as surrender fees, contract charges, maximum front-end load,maximum deferred load, maximum M&E risk charge, atlminisVaUon fees, and actual ongoing fund-level expenses. For ETFs, the standardized returns reFlect performance, both at market price and NAV price, without adjusting for the effects of taxation or brokers commissions. These returns are adjusted to reFlect all ongoing ETF expenses and assume reinvestment of dividends and capital gains. If adjusted, the effects of taxation would reduce the performance quoted. The charges and expenses used in [he standardized returns are obtained born the most recent prospectus and/or shareholder report available to Morningstar. For mutual funds and VAS, all dividends and capital gains are assumed to be reinvested. For stocks, stock acquired via divestitures is assumed [o be liquidated and reinvested in the original holding. Non•Standardized Returns For mutual funds, total return is not adjusted for sales charges and reflects all ongoing fund expenses for various time periods. These retums assume reinvestment of dividends and capital gains. If adjusted for sales charges and the effects of taxation, the mutual fund returns would be reduced. Please note these retums can include pre-inception data and if included, this data will be represented in italics. For money market funds, total return is not adjusted for sales charges and reflects all ongoing fund expenses for various time periods. These returns assume reinvestment of dividends and capital gains. If adjusted for sales charges and [he effects of taxation, the money market retums would be reduced. For VA and VL subaccounts, non-standardized retums illustrate performance that is adjusted to reflect retuning and non-retuning charges such as surrender fees, contract charges, maximum front-end load, maximum deferred load, maximum M&E risk charge, administrative fees and underlying fund-level expenses for various time periods. Non-Standardized performance returns assume reinvestment of dividends and capital gains. ff adjusted for the effects of taxation, the subaccount returns would be significantly reduced. Please note these returns can include pre-inception data and if included, this data will be represented in italics. Investment Advisory Fees The investment(s) returns do not necessarily reFlect the deduction of all investment advisory fees. Client investment returns will be reduced if addi- tional advisory fees are incurred such as deferred loads, redemption fees, wrap fees, or other account charges. Asset Alkrcation The weighting of [he portfolio in various asset classes, including 'Other," is shown in this graph and table. 'Other' includes security Types that are not neatly classifed in [he other asset classes, such as convertible bonds and preferred stocks. "Not classified' represents the portion of the portolio that Morningstar could not classify a[ all, due to missing data. In the graph and table, allocation to the classes is shown for long positions, short positions, and net (long positions net of short) positions. These new portfolio statistics help investors look "under the hood" of a portfolio. These statistics summarize what the managers are buying and how they are positioning the portfolio, When short positions are captured in these portfolio statistics, investors get a more robust description of [he funds exposure and risk. Most managed product portfolios hold fairly conventional securities, such as long positions in stocks and bonds. Other portfolios use other investment strategies or securities, such as short positions or derivatives, to reduce transaction costs, enhance returns, or reduce risk. Some of these securities and sVategies behave like conventional securities, while others have unique return and risk characteristics. Most portfolios take long positions in securities. Long positions involve ®2008 Mwnllgsur. All RigMa Reswv tl iM mfwmaum. dare. malysu aN Wimora mnrarce M1aem n) vtlWe tlIe mdlomtlal ma qq (3) eo mr Immure Imresrmmt aelnce Meretl M Mwnngstar, (4) are prwieetl sddy Iw mlvmatimal pupwe aM mwdwe are nw an o Encglt as dMrwise reauiree ty law. Munm¢Ur MINI rKK ~ re5pens0le kr ary paing eecisimi, tlarrc5e5 w We losses reul4ng hmm. meRd191e51rteraMe. l1 gplil'aLk rt musr M1e pselei w a[mnpanIee Ly a gpKtttlS. u eW rvalmt. eN alslo5ure Ha@meM1. N~mdMmalgsrm, 2l war mt hecogmwrmlxndhee, se~nrzy.a-efsla'era wananeamcecros~compldewavuraM. opperrhainrerauay~ rM1is iMpmaYm. data. aiwlyus or ryvnid¢or Nnr iSe iM1is r[pyl rs v¢pk- +nvm,..~ • • • Portfolio Snapshot Report Disclosure Statement (continue buying the security outright and then selling it later, with the hope that [he security price rises over time. In convast short positions are taken to benef[ from anticipated price declines. In this type of vansaction, :he investor bovows the security from another investor, sells it and re :gives cash, and then is obligated to buy rt back at some point in the fate e, If the price falls after [he short sale, the investor will have sold high and -_an now buy low to close the short position and lock in a profit. However, it the price o(the security increases after the short sale, the investor will expt hence losses by buying it at a higher price than the sale price. i the svategy of selling securities short is prevalent in specialized ~. portfolios, such as long-short, market-neutral, bear-market, and hedge funds. Most conventional portfolios do no[ typically short securities, although they may reserve the right to do so under special circumstances. Funds may also short derivatives, and this is sometmes more efficient than shorting individual securities. Short positions produce negative exposure to [he security that is being shorted. This means that when [he security rises in value, the short position will fall in value and vice versa. Morningstars portfolio statistics will capture this negative exposure. For example, if a fund has many short stock positions, the percent of assets in stocks in the asset allocation breakdown may be negative. Funds must provide their broker with cash collateral for the short position, so funds [hat short often have a large cash position, sometimes even exceeding 100% cash. Ivsestment Style The Morningstar Style Box combines [he various funds investment svategies. For the equity style box, the vertical axis shows the market capitalization of the stocks owned and the horizontal axis shows investment style (value, blend, or growth). For the fixed-income style box, [he vertical axis shows the average credit quality of the bonds owned and the horizontal axis shows interest rate sensitivity as measured by a bond's duration (short, intermediate, or long). Style box data is presented only for the long positions in the portolio. Stock Sectors This section provides a comparison of exposure to various industry sectors between the long stock positions in the portfolio and a benchmark. Stock Regions This section provides the allocation of the portfolios long stock positions to the world regions, in comparison with a benchmark. Risk and Rewm Standard deviation is a statistical measure of the volatility of a portfolio's returns around its mean. Mean represents the annualized geometric return for the period shown. Sharpe ratio uses a portolio's standard deviation and total return to determine reward per unit of risk. Alpha measures the difference between a portfolio's actual returns and'Rs expected performance, given Rs beta and the actual returns of the benchmark index. Alpha is often seen as a measurement of the value added or subvacted by a portfolio's manager. Beta is a measure of the degree of change in value one can expect in a portfolio given a change in value in a benchmark index. A portfolio with a beta greater than one is generally more volatile than its benchmark index, and a portfolio with a beta of less than one is generally less volatile than its benchmark index. R-squared regects the percentage of a portfolio's movements [hat are explained by movements in its benchmark index, showing the degree of conelation between the portolio and a benchmark. This figure is also helpful in assessing how likely it is that alpha and beta are statistically significant. PoMolio Yield The dividend yield produced for the most recent 12 momhs is presented Fundamental Analysis The below referenced data elements are a weighted average o(the long equity holdings in the portfolio. The median market capitalization of a subaccount's equity portfolio gives you a measure of the size o(the companies in which the subaccount invests. The Price/Cash Flow ratio is a weighted average of the price/cash-Flow ratios of the stocks in a subaccounts portfolio. Price/cash-Flow shows the ability of a business to generate cash and acts as a gauge of liquidity and solvency. The Price/Book ratio is a weighted average of the price/book ratios of all [he stocks in the underlying fund's portfolio. The P/B ratio o(a company is calculated by dividing the market pdce of its stock by the company's per-share book value. Stocks with negative book values are excluded from this calculation. The Price/Earnings ratio is a weighted average of the price/earnings ratios of the stocks in the underlying fund's portfolio. The P/E ratio of a stock is calculated by dividing the currem price of the stock by Rs Vailing 12 months' earnings per share. In computing the average, Morningstar weights each portfolio holding by [he percentage of equity assets it represents. The Price/Sales ratio is a weighted average of the price/sales ratios of the stocks in the underlying fund's portfolio. The P/S ratio of a stock is calculated by dividing the curtent price of the stock by its trailing 12 months' revenues per share. In computing the average, Morningstar weights each portfolio holding by the percentage of equity assets it represents. The return on assets (RDA) is the percentage a company earns on its assets in a given year. The calculation is net income divided by end-of-year total assets, multiplied by 100. The Return on Equity (ROE) is the percentage a company earns on its shareholders' equity in a given year. The calculation is net income divided by end-of-year net worth, multiplied by 100. Market Maturity shows the percentage of a holding's long common stocks that are domiciled in developed and emerging markets. The below referenced data elements listed below are a weighted average of the long fixed income holdings in the portfolio The average credit quality is derived by taking the weighted average of [he credit rating for each bond in the portolio. Average maturity is used for holdings in the taxable fixed-income category, this is a weighted average of all the maturities of the bonds in a portfolio, computed by weighting each maturity date by the market value of the security. Credit quality breakdowns are shown for corporate-bond holdings and depicts the quality of bonds in the underlying portfolio. The analysis reveals [he percentage of fixed-income securities that fall within each credit-quality rating as assigned by Standard & Poors or Moodys. debt). This figure is not provided for financial companies. Debt as a percentage of capital is calculated by dividing long-term debt by total capitalization (the sum of common equity plus presened equity plus long-term ®20[8 MLmxgstar. All Rg1AS Raavetll4e nrdmetim. tlau, mMyses aN Wlmora lmtamN M1eeFl n) vrlWe tle wtRi~ttlal mJ goprietary iMdmsum of Mdnmgsur, (2) meY ^Lt Oecopiai ar rNisuiWai. n JOm[cmrtlWe m6lmsA atlxce dlsetlMMwnltgva,(17 ate prwloetl sddy br nfwmatlmal pup [aM NetNUe aye rol an offs t4 drywseilaseurlry.aN(57aem wanant~m4ecmecl completed avurate ~OppsaJieitneeNpW' EicWtaz P.M1dmsetryurtM Ly Nw, Mpnngsta s4allnol[etcSpmsLleMary Lmng hnslda. tlamaWsw War loss rewl4y fiwn,urelatetlto. Nrs mldma4an,Eata.atalrsesatpiniar¢d Neir irse l4rs rgidl n v{gle ^+ IrglGl wiles IaHaWell aWtYS4k it mi6t M1e pK i¢tl u aCWttyan V LY a lXryectlR. n <WxalpR, atltl EiYbSrte 9atwMlM1. Portfolio Snapshot Report Disclosure Statement (continued) • deb[). This figure is not provided for fnancial companies. Duration is a time measure of a bonds interest-rate sensitivity. Net Margin is a measure of profnability. II is equal [o annual net income divided by revenues from [he same period for the past fve fiscal years, multlplied by 100. Type Weightings divide the stocks in a given holding's portfolio into eight type designations each of which defines a broad category of investment characteristics. Not all stocks in a given holding's portfolio are assigned a type. These stocks are grouped under NA. The below referenced data elemems listed below are a weighted average of the total holdings in the portolio. The average expense ratio is the percentage of assets deducted each year fa operating expenses, management fees, and all other asset-based costs incurred by the fund, excluding brokerage fees. Please note for mutual funds, variable annuities/life, ETF and closed-end funds we use the gross prospectus ratio as provided in the prospectus. For separate accounts and stocks we pull the audited expense ratio from the annual report. Potential capital gains exposure is the percentage of a holdings total assets that represent capital appreciation. • Oppenheimer Funds: Global {11} Developing Markets {1,12} Global Global Opportunities {21} Intemational Diversifed International Growth International Small Company {14, 30} International Value {77} Quest International Value {3, 17} Growth {73} Capital Appreciation Discovery {11, 14} Dividend Growth {5} Emerging Growth {11, 12, 14} Enteryrise {11, 15} Growth MidCap {16} Rising Dividends {31} Core Equity Fund {4, 11 } Main Street Fund Main Street Opportunity {14, 15} Main Street Small Cap {11, 14} Value {77} Equity Income {32} Value • Select Value {14} Small- & Mid- Cap Value {3, 14, 16, 33} Hybrid Balanced {11, 17, 20} Baring China {2, 34, 35} Baring Japan {2, 34, 36} Capital Income Fund {20, 21 } Portfolio Series: Active Allocation Portfolio Series: Equity Investor Portfolio Series: Conservative Investor Portfolio Sedr s: Moderate Investor Quest Balanc +d {6,11,17, 20, 21 } Quest Opport inity Value {3, 11,17, 29} Specialty ' Convertible S lcudties {7, 21 } Emerging Tet ~nologies {11, 15, 18} Gold d Speci/j Minerals {11, 18} Principal Pro[ acted Main Street Fund {5, 23} Principal Protected Main Seeet Fund II {5, 23} Principal Protected Main Seeet Fund III {5, 23} Commodity Strategy Total Retum {11, 19, 21 } Real Estate {5, 14, 18, 37} Taxable Bond {20} Champion Income {21} Core Bond {3, 5, 8, 21} International Bond {11, 12, 21 } Limited-Tenn Government {3, 5, 22} Senior Floating Rate {5, 27} SVa[egic Income {11, 21} U.S. Government Trust {5} Municipal {20, 24, 25} ' AMT-Free Municipals {21 } AMT-Free New York Municipals {9, 21, 26} Califomia Municipal {9, 21, 26} Limited-Term California Municipal {5, 9, 2fi} Limited Term Municipal Fund Limited Term New York Municipal Fund {10, 26} New Jersey Municipal {9, 21, 26} Pennsylvania Municipal {9, 21, 26} Rochester Fund Municipals {10, 21 } Rochester Nadonal Municipals {21 } Rochester Arizona Municipal {2} Rochester Maryland Municipal {2} Rochester Massachusetts Municipal {2} Rochester Michigan Municipal {2} Rochester Minnesota Municipal {2} Rochester North Carolina Municipal {2} Rochester Ohio Municipal {2} Rochester Virginia Municipal {2} Cash Reserves {28} Money Market Fund {28} s arao The minimum investment is 850,000. This is a new Fund with limited operating history. The Fund had different advisor/subadvisor prior to date shown: Limited-Term Government (4/7/90); Core Bond (7/11/95): Small- & Mid- Cap Value (4/28/00); Quest International Value (1/1/05); Quest Opportunity Value (1/1/05); and Quest Value (1/1/OS). Life pertormance is calculated since Oppenheimerfunds took over the Fund on 9/30/75. The investment manager is currently assuming a portion of the expenses (which may be modified a[ any time) without which performance would have been less. odbB rnomagsur. Ali Pgnn Pczrvai me iMOrmatwn. aara. w,nysez am apnwrs mnraimtl n~in ([) a,cwe ere emrWmriai one prgxiecary,mamaum m wlanmgur. Izl may mr ere cgrim w rm~ceree, n(aom[cmvnum w•esrcrenaehre maeegmamingsur, I1~me prw,eee soielyrm mumaema puposg am avMUe ere roan Drier ro[xryw seoaseuriry. erne 157 are m[wanammmcecrost canpiemwacorate Oppnaaeimerfuads' Evep[asmmwrse re~uaeegiaw, anommg;rer snau rimcere:pmsakmany rcaa„y asmms. aamages o, dnn imses remiorg rcom,wreiaree m, mis mamaum. aara.anayses or opm~oaamev me. mrs repm ¢s,npie- v^+.•w• Frei sales mera[ue. rcgproae a nun ce eecmee a arm•eaarea q a prnspevus•, u equvakn, am a~omre vm,mn • • • Portfolio Snapshot Report Disclosure Statement (continue 6. The Funds subadvisor as of 1/1/05 is Oppenheimer Capital LLP, parent to the Funds subadvisor. OppenheimerFunds, Inc. became the Funds advisor on 11/22/95. OpCap Advisors was the Funds advisor prior to 11/22/95. 7. Prior to 3/11/96, the Funds Class A shares had no initial sales charge, so actual performance would have been better. 8. The Funds investment objective changed from current income to total return on 1/21/05. 9. Available to investors only in certain states. 10. Maximum Class A sales charges were changed from 2% to 3.50°~ (Limited Term New York Municipal on 5/1/97) and 4%to 4.75% (Rochester Fund Municipals on 3/1/97) 11. Investing in foreign securities involves additional ezpenses and special risks, such as currency Fluctuations, foreign taxes and political and economic factors. 12. Investments in emerging and developing markets are subject to greater volatility and risks. 13. Growth stocks may be more volatile than other securities. 14. Small-cap investments are more volatile than stocks of larger, more established companies. 15. Technology stocks may be especially volatile 16. Mid-cap stocks tend ro be more sensitve [o changes in earnings expectations, and tend to have lower Vading volumes than large-cap securities, and therefore they may experience more abrupt and erratic price movements. 17. With value funds, the market may not recognize that the securities are undervalued and they may not appreciate as anticipated. 18. This is anon-diversified fund, so investments may be concenVated into fewer securities or sectors, which increases volatility. 19. The Fund invests in derivative insVUments and uses leverage which entails potentially higher volatility and dsk of loss than Vaditional stock or bond investments. The Fund may, from time to time, have substantial exposure [o energy-related natural resources, which may also entail greater volatility. 20. Fixed income investing entails credit risks and interest rate risks. When interest rates rise, bond prices generally fall, and the Funds share prices can fall. 21. Lower rated (junk) bonds are more at risk of default. 22 The Fund can invest up to 20% of its assets in non-U.S. Government securities that have a greater risk of default. 23. This is a closed fund. Shares may be exchanged or redeemed at any time. However, if you redeem shares prior to the end of the seven-year warranty period, you will receive the then-current NAV per share, which may be higher or lower than the Warranty Amount. In the event of reallocation of 100%of the Funds assets to U.S. Government secudbes, the Fund will not be permitted to allocate its assets to equity securities for the remainder of the Warranty Period, which will eliminate the Funds ability to participate in any upward equity market movement. While the fixed income securities that [he Fund invests in dont pay income the Vaditional way, an income calculation is made for tax purposes based on the purchase price and [he time untl the security reaches par value. Like traditional interest payments, this amount is reported as income for tax purposes. The zero coupon bonds the Funtl invest in do no[ pay interest income until maturity. However, the Fund is required to accrue and declare a dividend on such phantom income, so you will have taxable income. DisVibutions from the Fund are taxable whether or no[ you invest them in additional shares of [he Fund. Stocks and S&P Futures fluctuate in price and their volatility at times may be great. 60 If the issuer of an 5&P Future does not pay [he amount due, the Fund can lose money on the investment. While principal and interest payments on U.S. Treasury securities are guaranteed by the U.S. Government, the price of such securities will Fluctuate with [he changes in prevailing interest rates. Zero-coupon U.S. Government securities are subject to greater fluctuations in price from interest rate changes than typical debt securities that pay interest on a regular basis. 24. With the exception of AMT-Free Municipals and AMT-Free NY Municipals, a portion o(the Funds disVibutions may be subject to taz and may increase taxes for investors subject [o Alternative Minimum Taz. Capital gains disVibu[ions are taxable as c hital gains. Tax Vestment of the fund's disVibu[ion and capital gains r iay vary by state. Investors should consult a tax advisor to determine v'hether this fund is appropriate for [hem. 25. The Fund can have a relatively high portion ~f its portfolio holdings in particular segments of the municipal secui :ies market and therefore will be vulnerable to economic or legislative ev~ants that affect issuers in particular segments of the municipal securities market. The Fund's substantial investments in Tobacco bonds are vulnerable to economic and other factors in that industry. 26. The value of the Fund's portolio investments is highly sensitive to events affecting the fscal stability of the particular state and its municipalities, authorities and other insVUmentalities [hat issue securities. 27. Senior loans are typically lower rated (more at risk of default) as well as illiquid investments (which may not have a ready market). The Fund may invest up [0 100% in lower-rated bonds. No[ all of the Funds investment are collateralized. The Funds shares are not listed on any stock exchange or national quotation service. The Funds shares are not redeemable for cash daily but the Fund seeks to provide a degree of liquidity to shareholders by making quarterly offers to repurchase a portion of the Funds shares. However, [here can be no assurance that the Fund will be able to repurchase all shares tendered in a particular repurchase offer. 28. An investment in the Fund is neither insured nor guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Although the fund seeks [o preserve [he value of your investment at $1.00 per share, it is possible to lose money by investing in the Fund. 29. Short selling seeks [o profit from declines in the price of securities and may result in losses if the value of the securities do not fall as anticipated. 30, As of 7/20/07, the Fund is closed to new investors. 31. The Fund's name changed from Quest Value Fund and its investment objective changed to 'seeks total return' on 8/1/07. 32. The Fund's name changed from Quest Capital Value Fund and its investment objective changed to 'seeks total return' on 8/1/07. 33. As of 5/31/07, the Fund is closed to new investors. 34. The Fund's subadvisor is Baring Asset Management, Inc. The portfolio manager is employed by the subadvisor. 35. The Fund's performance will be influenced by political, social and economic factors affecting companies located in China. These risks include currency fluctuation, less liquidity, sub-custody risk, expropriation, con5scatory taxation, nationalization, exchange control regulations (including currency blockage), lack of adequate company information, differing auditing and legal standards, political instability and less diverse and mature economic sVUCtures. In add¢ion, investments in Taiwan could be adversely affected by its political and economic relationship with China. 36. The Fund's concentration in Japanese issuers wgl expose it to the risk of adverse social, political and economic events which occur in Japan or affect the Japanese markets. 37. The Fund's subadvisor is Cornerstone Real Estate Advisers LLC. The portfolio manager is employed by the subadvisor. For Load Waived shares (LW) the load-waived star rating should only be 02008 MwnmgLa. All Ggnu PeserreE. The nlwma°m, eau. sa75es wtl,giniwn mRav¢f fiwen 111 ncabe Ve mNtlm°al mJ propiaay nlamapm N Munmgsur, (21 maY mtbec°pietl a rmrstnDUt~. (3~ tl°,M cmrtiwe mmsunml atrice Weed M Mwniyua,. 11) mepwNetl mlely kr'nformmiwal pupmes atl 8e,tlwe ae mt m filer m pcry w ssll a secviry. aN (51 ae mt wamm~etl m °e cmect c°mpitte w amuse. Oppenhaimerfavdi EaM aunew~u repul,e0glaw,M°mingsu, 91811nm D¢resp°mele iw my owing Oecisiom. pamagesa Wxa losses remlug fi°n.mrele~N to. NS Mwmsun.aau,amYysesw opinims or Ner me. ifiu ry°trss~gple- ~ w.w,m~.+ mei0l vlez hLLraWe.If;gliraLkn m~l°epr¢cwM aacmmpanietl °yepazpec°S.weWmalett,aME lovre vtemmt. Portfolio Snapshot Report Disclosure Statement (continue • considered by investors who are not subject to the front-end sales load. The source of the data in this report is Morningstar, Inc. an independent mutual fund monitoring service. Results provided by Momingstar may differ from the information provided by Oppenheimerfunds due to difference in calculation methodology, rounding and terminology. The information is not intended as an asset allocation recommendation or investment advice. Because each investor has different goals, financial needs and risk tolerance, you should consult a fnancial advisor to determine if any of these funds are appropriate for your portfolio. Before investing in any of the Oppenheimer funds, investors should carefully consider a funds investment objectives, risks, charges and expenses. Prospectuses contain this and other information about the funds and maybe obtained by asking your financial advisor, calling us at 1.800.525.7048 or visiting our website at www.oppenheimer(unds.com Please read prospectus carefully before investing. Shares of Oppenheimer funds are not deposits or obligations of any bank, are no[ guaranteed by any bank, are not insured by the FDIC or any other agency, and involve investment risks, including the possible loss of the principal amount invested. Oppenheimer funds are distributed by OppenheimerFunds Distributor, Inc. Two Wodd Financial Center, 225 Liberty Street, New York, NY 10281-1008. • • 021pB Mmnbgwl. FII Rign¢ Resare].1M bMnraeon. GaG, maly5es aM Wbwl¢ miubee Been Il) iUWe Ne o»ROeRaI aiC pecgreMry nlemalm mMmmlgslm, (21 uuY NI be cupid or retll9rou[M. n)oo mccmvrc~re xxesammlaehre meeaq MOm.yzu~.(a)me pwiaee splay ml ntmmaamal pmpmes am menme as mlmmemey a~seonseuiry.eb(5lare mt waRammmoecmea cm~lae or a(Nmle. ®m~aplds• ficept as misiwlse I[gm1eC q law. MvningsUt Nall nIX Le IesrmaNe le My Iraivg Aeccum¢, Wmjpes m W¢ bssa resulmg Ilvn, m rebl~ [o. NIS Irtvmatim. Jala. alalyses of cgbms m NGe use. iM1S ~~t is v{ple mmul sales olemare. n appicade rt mwc m pramm o acmmpaem q a pm:pemm. m eWrvalea. am a~scbmae wlmem. • • • Mutual Fund Detail Report Disclosure Statement The Mutual Fund Detail Report is to be used as supplemental sales literature, and therefore must be preceded or accompanied by the fund's curent prospec- tusand adisclosure statement. Please read [he prospectus carefully. In all cases, [his disclosure statement should accompany [he Mutual Fund Detail Report. Morningstar is no[ itself a FINRA-member firm. Portfolio information is based on the most recent information available [o Morningstar. Pre-inception Realms The analysis in this report may be based, in part, on adjusted historical returns for periods prior to the fund's actual inception. These calculated returns reflect the historical pertormance of the oldest share class of the fund, adjusted [o reFlect the fees and expenses of this share class. These fees and expenses are referenced in [he report's Pertormance section. When pre-inception data are presented in the report, the header at the top of the report will indicate this. In addition, the pre-inception data included in the report will appear in italics. While [he inclusion of pre-inception data provides valuable insight into the probable long-term behavior of newer share classes of a fund, investors should be aware that an adjusted historical return can only provide an approximation of that behavior. For example, the fee structures between a retail share class will vary from that of an institutional share class, as retail shares tend to have higher operating expenses and sales charges. These adjusted historical returns are no[ actual returns. Calculation methodologies utilized by Morningstar may differ from those applied by other entities, including [he fund itself. Pertormance The performance data given representr past performance and should no[ be considered indicative of future results. Principal value and investment return will fluctuate, so that an investor's shares when redeemed may be worth more or less than the original investment. Fund portolio stadsdcs change over time. The fund is not FDIC-insured, may lose value and is not guaranteed by a bank or other fnancial inst¢u[ion. Total return reflects performance without adjustng for sales charges or the effects of taxation, but is adjusted to reFlect all actual ongoing fund expenses and assumes reinvestment of dividends and capital gains. If adjusted for sales charges and the effects of taxation, [he performance quoted would be reduced. Standardized Total Return is reflected as of month- and quarter-end time periods. It depicts pertormance without adjusting for the effects of taxation, but is adjusted for sales charges, all ongoing fund expenses, and assumes reinvestment of dividends and capital gains. If adjusted for the effects of taxation, the pertormance quoted would be reduced. The sales charge used in the calculation was obtained from the fund's most recent prospectus and/or shareholder report available to Morningstar. standardized retums never include pre-inception history. Morningstar % Rank within Morningstar Category does not account fa a fund's sales charge (if applicable). Rankings will no[ be provided for pedotls less than one year. ol6m crowd, er aio,ooo The graph compares the growth of $10,000 in a fund with that of an index and with [ha[ of the average for all funds in its Morningstar category. The total returns are not adjusted to reFlect sales charges a [he effects of taza[ion, but are adjusted to reflect actual ongoing fund expenses, and assume reinvestment of dividends and capital gains. If adjusted, sales charges would reduce the pertormance quoted. The index is an unmanaged portolio of specified securities and cannot be invested in directly. The index and the category average do not reflect any initial or ongoing expenses. A fund's portfolio may differ significantly from the securities in the index. The index is chosen by Morningstar. If pre-inception data is included in the analysis, I[ will be graphed. Risk and Rewm The Morningstar Rating is calculated for funds with at least a three-year history. I[ is calculated based on a Morningstar Risk-Adjusted Return measure that accounts for variation in a fund's monthly pertormance, placing more emphasis on downward variations and rewarding consistent performance. The top 10%of funds in each category receive 5 stars, the next 22.5% receive 4 stars, the nez[ 35%receive 3 stars, the next 22.5% receive 2 stars and the bottom 10%receive 1 star. The Overall Morningstar Rating for a mutual fund is derived from a weighed average of the performance figures associated with itsthree-,fve-and 10-year (if applicable) Morningstar Rating meVics. Please note that some Morningstar proprietary calculations, including [he Morningstar Rating, maybe calculated based on adjusted historical retums (pre-inception retums). If the extended performance ratng is in effect, the "stars' are represented as unshaded stars. For each mutualfund with at least a three-year history, Morningstar calculates a Morningstar Rating based on a Morningstar Risk-Adjusted Return measure that accounts for variation in a fund's adjusted monthly performance, placing more emphasis on downward variations and rewarding consistent performance. The top 10% of funds in each category receive 5 stars, the next 225% receive 4 stars, the next 35%receive 3 stars, the next 22.5% receive 2 stars and the bottom 10%receive 1 star. This investment's independem Morningstar Rating mevic is then compared against the open-end mutual fund universe's actual performance breakpoints [o determine its extended pertormance rating. The Overall Morningstar Rating for a mutual fund is derived from a weighted average of the actual performance figures associated with its three-, hve- and 10-year (if applicable) Morningstar Rating meVics. Morningstar Return rates a mutual fund's performance relative [o other funds in its Morningstar Category. It is an assessmem of a fund's excess return over arisk-free rate (the return of the 90-tlay Treasury Bill), after adjusting for all applicable loads and sales charges, in comparison with the mutual funds in its Morningstar Category. In each Morningstar Category, the top 10% of funds earn a High Morningstar Return (HIGH), the next 22.5%Above Average (+AVG), the middle 35%Average (AVG), the next 22.5%Below Average (-AVG), and the bottom 10% Low (LOVr~. Morningstar Return is measured for up to three time periods (three-, five-, and 10 years). These separate measures are [hen weighted and averaged to produce an overall measure fa the mutual fund. Funds with less than three years of performance history are not rated. Morningstar Risk evaluates a mutual fund's downside volatility relative to that of other funds in its Morningstar Category. It is an assessment of the variations in a fund's monthly returns, with an emphasis on downside variations, in comparison with the mutual funds in its Morningstar Category. In each Morningstar Category, the 10% of funds with [he lowest measured risk are described as Low Risk (LOW), the next 22.5% Below Average (-AVG), the middle 35%Average (AVG), the neM 22.5% Above Average (+AVG), and the top 10% High (HIGH). Morningstar Risk is measured for up to three time periods O2(gg Mwnsgssn. All k9hs Pesrr~iM iMmnatvl.Mta mLySas aM Opnimscmlai Vhnsn(1 mcIWe Um ~tleMal arA popreury Ndmatwn of MOmingstal. 117 maY mlcecopiM 0r reGlrtnd[M. u^p~'11t1rrtxrl® Pl4o mlcmamme imBVllml atlhce ohaetl hyMmmiyslae.lq(are pai4tl mlely lm nlamnmal pupases aM tle~9ve aye mtm Ma bdrymsellasemlry.aN(Sl ore rat warametl to Le caic[.cmplHe or ara~ale. I1R ,In1 In1UbY\~l11~N~ Earyt az dMwlse ~®uiretl Uy law. Mmpngslat shall nM1 M rEyq¢bk M any Va1iy tls,vms, tlama¢s w dMf lois¢ RSUIUg hcm, or reNl 110. Nis iMUmaGm. Gala. a~nlyms m cplnnrts m Mea I¢e ilas lout u ygpp- mmtal sales II@taWell applVahle q mist Ge Precal 1 a acmmmrvetl Ey a paspeclm. m eWUalen. aM Gxlovxe ssalemM. (three-, five-, and 10 years). These separate measures are then weighted and • averaged to produce an overall measure for the mutual fund. Funds with less than three years of performance history are no[ rated. If pre-inception returns are included in this analysis, the risk and return profile data calculated on the hosts of these returns will appear in italics. Risk Measures The risk measures below are calculated for funds with at least athree- yearhistory. Standard deviation is a statistical measure of the volatility of the fund's returns. Mean represents the annualized geometric return for the period shown. The Sharpe ratio uses standard deviation and excess return to determine reward per unit of risk. Alpha measures the difference between a fund's actual returns and its expected performance, given its level of risk (as measured 6y beta). Alpha is often seen as a measure of the value added or subtracted by a portfolio manager. Beta is a measure of a fund's sensitivity to market movements. A portfolio with a beta greater than 1 is more volatile than the market, and a portfolio with a beta less than 1 is less volatile than the market. R-squared reflects the percentage of a fund's movements that are explained by movements in its benchmark index, showing [he degree of corelation • between the fund and the benchmark. This figure is also helpful in assessing how likely it is that alpha and beta are statistically signifcant. Best frt index: Alpha, beta, and R-squared statistics are presented for a broad market index and a "Best fit" index. The Best-Fit index idendfed in this report was determined by Morningstar by calculating R-squared for the fund against approximately 100 indexes Vacked by Morningstar. The index representing [he highest R-squared is identifed as the best-fit index. The best-ft index may not be the fund's benchmark, nor does h necessarily contain the types of securities that may be held by the fund. Risk measures calculated using pre-inception data, if included in the analysis, will be presented in italics. Asset Allocation The weighting of the portfolio in vadous asset classes, including 'Other," is shown in this table. "Other" includes security types that are not neatly classified in the other asset classes, such as convertible bonds and preferred stocks. In the table, allocaton to the classes is shown for long positions, short positions, and net (long positions net of short) positions. These statistics summarize what the managers are buying and how they are positioning the portfolio. When short positions are captured in these portfolio statistics, investors get a more robust description of [he funds' exposure and risk. Most managed product portfolios hold fairly conventional securities, such as long positions in stocks and bonds. Other portfolios use other investment • strategies or securities, such as short positions or derivatives, [o reduce transaction costs, enhance returns, or reduce risk. Some of these securities and svategies behave like conventional securities, while others have unique return and risk characteristics. Most portfolios take long positions in securities. Long positions involve buying the security outright and then selling R later, with the hope [hat [he security price rises over tlme. In contrast, short positions are taken to benef[ from anticipated price declines In this type of transaction, the investor borows the security from another investor, sells i[ and receives cash, and then is obligated to buy i[ back at some point in the future. ff [he price falls after the short sale, [he investor will have sold high and can now buy low to close the short position and lock in a profit. However, if the price of the security increases after the short sale, the investor will experience losses by buying it at a higher price than the sale price, The strategy of selling securities short is prevalent in specialized portfolios, such as long-short, market-neutral, bear-market, and hedge funds. Most conventional portfolios do not typically short securities, although they may reserve the dght [o do so under special circumstances. Funds may also short derivatives, and this is sometimes more efficient than shorting individual securities. Short positions produce negative exposure to the security that is being shorted. This means [hat when the security rises in value, the short position will fall in value and vice versa. Momingstar's portfolio s[atisdcs will capture this negative exposure. For example, if a fund has many short stock positions, the percent of assets in stocks in the asset allocation breakdown may be negative. Funds must provide their broker with cash collateral for the short position, so funds [ha[ short often have a large cash position, sometimes even exceeding 100% cash. Note that all other portolio statistics presented in [his report are based on the long holdings of the fund only. Style Analysis The Morningstar Style Box reveals a fund's investment strategy. For equity funds the vertical axis shows the market capitalization of the long stocks owned and the horizontal axis shows investment style (value, blend or growth). For fixed-income funds the vertical axis shows the average credit quality of the bonds owned, and the horizontal axis shows interest rate sensitivity as measured by a bond's duration (short, intermediate or long). Equity Portfolio Statistics The referenced data elements below are a weighted average of the long equity holdings in the portfolio. The Price/Earnings rado is a weighted average of the price/earnings ratios of the stocks in the underlying fund's portfolio. The P/E ratio of a stock is calculated by dividing the current price of the stock by hs trailing 12-months' earnings per share. In computing the average, Morningstar weigMS each portfolio holding by the percentage of equity assets it represents. The Price/Cash Flow ratio is a weighted average of the price/cash-flow ratios of the stocks in a fund's portfolio. Price/cash-Flow shows the ability of a business to generate cash and acts as a gauge of liquidity and solvency. The Price/Book ratio is a weighted average of [he price/book ratios of all the stocks in the underlying fund's portolio. The P/B ralSo of a company is calculated by dividing the market price of its stock by the company's per-share book value. Stocks with negative book values are excluded from this calculation. m2r[B Mwnmgvm FII Wghu ResavM. the nlamahm, eau. aulysss aM ww~am rmulree hnan n mclWe tlre,mheORal ono pmpleury IMVmahm d Mmenysu,. UI mar rol he cups or realvwnm, p ~~~~,em=v,Me,ma=am~aewee~reee~Mwna~sM,,,,aream~~e~I~y~IXn,IXmIXiIXalp~abmme~,eamro,aM1~tr~~m~110=e~.lry~mis»e~wanan~em~~p~~eompl~eIXamm~ MC~NNIN6~fM Frtgtt x dYerwiSe regwee py yw. Mmenysut shall m0 pe,apa¢Ole la any trdLy tlttiw,n.Oama~s a Ma bsses rewl0,g horn, a,eWlee [o, Nrs nlartalpn, actin, malpses w cpniau or Ner use. this ry 2 rs v{pk- mnGl uks IIIetOUlef;plleaMe M1 mu4 Le p,S N~ IX aewnrwhlftl by a po5p¢Ctui o 9yrvalett, aM e~scbvre 9atem4n[. • Global {71} The geometric average market capitalization of a fund's equity portfolio Developing Markets {1, 12} offers a measure of [he size of the companies in which the mutual fund Global Global Opportunities {21 } invests. Internatonal Diversified Fixed•Income Portfolio Statistics International Growth The referenced data elements below are a weighted average of [he long fxed International Small Company {14, 30} income holdings in the portfolio. International Value {17} Quest International Value {3, 17} Duration is a time measure of a bond's interest rate sensitivity. Growth {73} Average effective duration is a weighted average of the duration of the Capital Appreciation underlying fxed income securities within the portfolio. Discovery {11, 14} Average effective maturity is a weighted average of all the matudtles Dividend Growth {5} Emerging Growth {11, 12, 14} of the bonds in a portfolio, computed by weighting each maturity date by Enterprise {11, 15} [he market value of the security. Growth Average credit quality is calculated by taking the weighted average of MidCap {16} Rising Dividends {31 } [he credit rating for each bond in the portolio. Average weighted coupon is generated from the fund's portfolio by Core Equity Fund {4, 11 } weighting the coupon of each bond by its relative size in the portfolio. Main Street Fund Coupons are fxed percentages paid out on afxed-income security on an Main Street Opportunity {14, 15} annual hasis. Main Seeet Small Cap {11, 14} Average weighted price is generated from the fund's portfolio by weighting Value {77} the price of each bond by its relative size in [he portfolio. This number Equity Income {32} reveals if the fund favors bonds selling at prices above or below face value Value (premium or discount securities, respectively). A higher number indicates a Select Value {14} bias toward premiums. This statistic is expressed as a percentage of par Small- and Mid- Cap Value {3, 14, 16, 33} (face) value. Turnover Ratlo is a decent proxy for how frequently a manager trades his or her portfolio. The inverse of a fund's turnover ratio is the average holding period for a security in the fund. As turnover increases, a fund's brokerage costs typically rise as well. Operations Purchase constraints denote if a mutual fund has any of the following qualities: Qualifed Access (A), Institutional m, Closed [o New Investments, (C) or Closed to All Investments (L). Because these qualites can all act as resbic6ons and/or requirements for investment they are grouped together. Hybrid Balanced {11, 17, 20} Baring China {2, 34, 35} Baring Japan {2, 34, 36} Capital Income Fund {20, 21 } Portfolio Series: Active Allocation Portfolio Series: Equity Investor Portfolio Series: Conservative Investor Portolio Series: Moderate Investor Quest Balanced {6, 11, 17, 20, 21 } Quest Opportunity Value {3, 11, 17, 29} Potential capital gains exposure is the percentage of a mutual fund's total assets that represent capital appreciation. Fees arM Expenses Prospectus Gross Expense Ratio reflects the annual percentage of a fund's assets paid out in expenses. Expenses include managemem, 12B-1, transfer agent and all other asset-based fees associated with the fund's daily operations and disVibubon, with the exception of brokerage commissions. It does not reFlect expenses that have been reimbursed by the investment advisor, reductions from brokerage service arrangements or other expense offset arrangements. Prospectus Net Expense Ratio reflects actual expenses paid by the fund as well as any voluntary waivers, reductions from brokerage service arrangements and any other expense offset arrangements. • Oppenheimer Funds: Speciahy Convertible Securities {7, 21 } Emerging Technologies {11, 15,16} Gold and Special Minerals {11, 18} Principal Protected Main Street Fund {5, 23} Principal Protected Main Street Fund II {5, 23} Principal Protected Main Street Fund III {5, 23} Commodity Svategy Total Return {11,19, 21 } Real Estate {5, 14, 18, 37} Taxable Bond {20} Champion Income {21 } Core Bond {3, 5, 8, 21} 0z0~e Mwni,gna,. Ni lLgn6 RaevrG iM nl«mazim.gals. naysezaM wlmo,¢tmta~he'en 111 mcllde tle rmoeanbl me poprinary inlmnaYOnd MOmmgsu,, 121 may mcMCwmo, ralimiNaeE. /alt (1t~pO pl oomtcmwtue lM6Mml aerice one,eogMOm~wwl, Hl are pmeee saely l«In«mazionai pnposes am NeM«e are ml tie oncmoly«rena uunny, me 157 tie ml wanammmcecwecl. c«wl«e«eminm. M1 /I1NIN6UIW1 fyc¢f az WhaxiserequreU py law. Mmingsul Nal not Le respx¢Ole b «ry VaEng eenziw¢. damages or pIM Ike revlmg hom, «relalee m. Nis mlpmalim, aMa, aiulyies or wnlm¢w Nar me Rus,wpl rs slgple mmlal sales uNmwc. nmptiraeie a,mm ce pamm «acrnnpamee eya puw¢m, «ewnalmc. am eisnosue vatene«. International Bond {11, 12, 21 } • Limited-Term Government {3, 5, 22} Senior Floating Rate {5, 27} SVategic Income {11, 21} U.S. Government Trust {5} • • Municiprl {20, 24, 25} AMT-Fret Municipals {21} AMT-free~Jew York Municipals {9, 21, 26} California Aunicipal {9, 21, 26} Limited-TI`m California Municipal {5, 9, 26} Limited Lim Municipal Fund Limited Tr ~m New York Municipal Fund {10, 26} NewJertly Municipal {9, 21, 26} Pennsylvt pia Municipal {9, 21, 26} Rochester Fund Municipals {10, 21 } Rochester National Municipals {21 } Rochester Arizona Municipal {2} Rochester Maryland Municipal {2} Rochester Massachusetts Municipal {2} Rochester Michigan Municipal {2} Rochester Minnesota Municipal {2} Rochester North Carolina Municipal {2} Rochester Ohio Municipal {2} Rochester Virginia Municipal {2} Cash Reserves {28} Money Market Fund {28} 1. The minimum investment is $50,000. 2. This is a new Fund with limited operating history. 3. The Fund had different advisor/subadvisor prior to date shown: Limited-Term Government (4/7/90); Core Bond (7/11/95); Small- and Mid- Cap Value (4/28/00); Quest International Value (1/1/05); Quest Opportunity Value (1/1/05); and Quest Value (1/1/05). 4. 'Life' performance is calculated since OppenheimerFundsfook over the Fund on 9/30/75. 5. The investment manager is currently assuming a pprtion of the expenses (which may be modified at any time) without which performance would have been less. 6. The Fund's subadvisor as of 1/1/05 is Oppenheimer Capital LLP, parent to the Fund's subadvisor. OppenheimerFunds, Inc. became the Fund's advisor on 11/22/95. OpCap Advisors was the Fund's advisor prior [o 11 /22/95. 7. Prior to 3/11/96, the Fund's Class A shares had no initial sales charge, so actual performance would have been better. 8. The Fund's investment objective changed from cunent income to total return on 1!21/05, 9, Available to investors only in certain states. 10. Mazimum Class A sales charges were changed from 2% to 3.50% (Limited Term New York Municipal on 5/1/97) and 4% to 4.75% (Rochester Fund Municipals on 3/1/97). 11. Investing in foreign securities involves additional expenses and special risks, such as curency fluctuations, foreign taxes and political and economic factors. 12. Investments in emerging and developing markets are subject [o greater volatility and risks. 13. Growth stocks may be more volatile than other securities. 14. Small-cap investments are more volatile than stocks of larger, more established companies. 15, Technology stocks may be especially volatile. 16. Mid-cap stocks tend to be more sensitive to changes in earnings expectations, and tend to have lower Vading volumes than large-cap securities, and therefore they may experience more abrupt and erratic price movements. 17. With value funds, the market may not recognize that the securities are undervalued and they may not appreciate as anticipated. 18. This is a non-diversifed fund, so investments may be concenVa[ed into fewer securities or sectors, which increases volatility. 19. The Fund invests in derivative insVUments and uses leverage which entails potentially higher volatliy and risk of loss than Vaditional stock or bond investments. The fund may, from time to time, have subs[antlal exposure to energy-related natural resources, which may also entail greater volatility. 20. Fixed income investing entails credit risks and interest rate risks. When interest rates rise, bond prices generally fall, and the Fund's share prices can fall. 21. Lower rated (dunk') bonds are more at risk of default. 22. The Fund can invest up to 20% of its assets innon-LLS. Governmem securities that have a greater risk of default. 23. This is a closed fund. Shares maybe exchanged or redeemed at any time. However, if you redeem shares prior to the end of the seven-year warranty period, you will receive [he then-cunent NAV per share, which may be higher or lower than the Waranty Amount. In the even[ of reallocation of 100% o(the Fund's assets to U.S. Government securities, the fund will not be permitted to allocate its assets to equity securities for the remainder of the Warranty Period, which will eliminate the Fund's ability [o participate in any upward equity market movement. While the fxed income securities that the Fund invests in don't pay income the Vaditional way, an income calculation is made for tax purposes based on the purchase price and the time until the security reaches par value. Like traditional interest payments, this amount is reported as income fa tax purposes. The zero coupon bonds the fund invest in do not pay interest income until maturity. However, the Fund is required to accrue and declare a dividend on such phantom income, so you will have taxable income. Distdbutions from the Fund are taxable whether or not you invest [hem in additional shares of the Fund. Stocks and S and P Futures Fluctuate in price and their volatility at times may be great. If the issuer of an S and P Future does not pay the amoum due, the Fund can lose money on the investment. While principal and interest payments on U.S. Treasury securities are guarameed by the U.S. Government, [he price of such securities will Fluctuate with [he changes in prevailing imerest rates. Zero-coupon U.S. Government securities are subject to greater fluctuations in price from interest rate changes than typical debt secuddes that pay interest on a regular basis. 24. With the ezcep[ion of AMT-Free Municipals and AMT-Free NY Municipals, a portion of the Fund's distributlons may be subject to tax and may increase fazes for investors subect to Alternative Minimum Tax. Capital gains Bank loan/senior debt funds: Funds that contain bank loans and senior !oars are impacted by risks associated with fxed income in general, including interest rate risk and default risk. Because [hey often invest in non-investment grade issues, the dsk of defauh is high. These securities are also relatively illiquid. Funds that invest in bank loans/senior debt are often highly leveraged, producing a high level of volatility. Short Positions: The investor should note that when a short position moves in an unfavorable way, the losses are theoretically unlimited. The broker will demand more collateral and the manager might have [o close out that short position at an inopportune time to limit any further losses. onxur MOmalgSpr. no wgnrs aesareo. ine mr«mxim,aau. aaiysezaM wamsrmuiree ne~lrl ~ecieee me rnaiesnui ono pwrietary ~n«maom of M«nm~ui. (2l may ml oe cgwm or rmisuminm. u^nulNn~~neil 0l oo mr c«rsueva ~rresemert aorrrs mxae ay MOmegslar,(r)are lrw~em soimyr«m«rexi«iaipmoses am ur«er«e are wlao onemdy«seuase«.rty.am lsl ore me waaannwee coney comylera«ac~ace. III( )1111 U WI rugn m oncmiu requirm ey m.. M«nmgslar swl n« ce respmsale m airyo-aelr5 eensars. eamages «nna mssg resNUnq r«n. «relaree m. mu imorrnanm. eam. analyses «wmorn or meo use. ma rewn ~s sygie- m~,tal sales IReraNell wplraele rt rrurt eepaelee u armrrpanlee ey a pospecu¢. v e¢rval«n, aM eisclosure srakrrem. • • • Long-Short Funds: Due to the strategies used by long-short funds, which may include but are no[ limited to leverage, short selling, short-term trading, and investing in derivatives, these funds may have greater risk, volatility, and expenses than those focusing on vaditional investment strategies. distdbutions are taxable as capital gains. Tax Vestment of the fund's distributions and capital gains may vary by state. Investors should consult a tax advisor to determine whether this fund is appropriate for them. 25. The Fund can have a relatively high portion of its portolio holdings in particular segments of the municipal securites market and therefore will be vulnerable to economic or legislative Events that affect issuers in particular segments of the municipal securities market. The Fund's substantial investments in Tobacco bor'~s are vulnerable to economic and other factors in that industry. 26. The value of [he Fund's portolio invest) rents is highly sensitive to events affecting the fiscal stability of [he particular state and its municipalities, authorities and other instrumentalities [hat issue securities. 27. Senior loans are typically lower rated (more at risk of default) as well as illiquid investments (which may not have a ready market). The Fund may invest up to 100% in lower-rated bonds. Not all of the Fund's investment are collateralized. The Fund's shares are not listed on any stock exchange or national quotation service. The Fund's shares are not redeemable for cash daily but the Fund seeks [o provide a degree of liquidity [o shareholders by making quarterly offers to repurchase a potion of the Fund's shares. However, there can be no assurance [hat the Fund will be able to repurchase all shares tendered in a particular repurchase offer. 28. An investment in the Fund is neither insured nor guaranteed by the Federal Deposit Insurance Coryora[ion or any other government agency. Although the Fund seeks to preserve the value of your investment at $1.00 per share, R is possible to lose money by irnes[ing in the Fund. 29. Short selling seeks to proft from declines in the price of securities and may result in losses if the value of [he securities do not fall as anticipated. 30, As of 7/20/07, the Fund is closed to new investors. 31. The fund's name changed from Quest Value Fund and its investment objective changed to'seeks total return' on 8/1/07. 32. The Fund's name changed from Quest Capital Value Fund and its investment objective changed to'seeks total rewm' on 8/1 /07. 33. As of 5/31 /07, [he Fund is closed to new investors. 34. The Fund's subadvisor is Bating Asset Management, Inc. The portolio manager is employed by the subadvisor. 35. The Fund's pertormance will be inFluenced by political, social and economic factors affecting companies located in China. These dsks include currency 8uc[uatlon, less liquidity, sub-custody risk, expropriation, confiscatory taxation, nationalization, exchange control regulations (including currency blockage), lack of adequate company information, differing auditing and legal standards, political instability and less diverse and mature economic structures. In addition, investments in Taiwan could be adversely affected by its political and economic relationship with China. 36. The Fund's concentration in Japanese issuers will expose it to the risk of adverse social, political and economic events which occur in Japan or affect the Japanese markets. 37. The Fund's subadvisor is Cornerstone Real Es[a[e Advisers LLC. The portfolio manager is employed by the subadvisor. For load-waived shares (LWJ, the load-waived star rating should only be considered by investors who are not subject to the front-end sales load. The source of the data in [his report is Morningstar, Inc. an independent mutual fund monitoring service. Results provided by Morningstar may differ from the information provided by OppenheimerFunds due to difference in calculation methodology, rounding and terminology. The information is no[ intended as an asset allocation recommendation or investment advice. Because each investor has different goals, financial needs and risk tolerance, you should consult a financial advisor to determine if any of these funds are appropriate for your portfolio. Before investing in any of the Oppenheimer funds, investors should carefully consider a fund's investment objectives, risks, charges and expenses. Prospectuses contain this and other information about [he funds and maybe obtained by asking your financial advisor, calling us at 1.800.525.7048 or visiting our website at www.oppenheimerfunds.com. Read prospectus carefully before investing. Shares of Oppenheimer funds are not deposits or obligations of any bank, are not guaranteed by any bank, are not insured by the FDIC w any other agency, and involve investment risks, including the possible loss of the principal amount invested. Oppenheimer funds are distributed by OppenheimerFunds Distdbutor, Inc. Two Wodd Financial Center, 225 Liberty Sveet, New York, NY 10281-1008. ozom Managuar au agms aeaerem the inMmstim. Bata. analyses am wimms cmrnirea nano Itl irciwe tle cmbenrcial ane popiuary Mumaeon a Manngiwr. Izl may robe coplm w rmwewnee, eb nlmrotcmrtiwreNrrau maerremamgMOmmgssar.nlarepraioeesolcymrniummro-aiprpmeaNnrereiaearemramm~mbywswia.YOniry.anels)xemtwanameembecmxecomplremavuru MC~RNIN6~fM rrcep as aNevnse requvetl by law. MVningstar shall mr berespuraBk Many Vatlirg tlttmwa, tlamageswmra lossesrewlUrg horn, ar relnetl w. Mrs nlamatmn,tlaw, alaly.~esurpmom or Neir irse. iAisrryorl rs supple- mmtalvies IirbaWe Ilapplimble rt mrst ce pecetlr9 n accompanies sy a pospwus, a epurvalem, ane eiscrovre nawnnM1. • • Benchmark Disclosure 3 Month T-Bill Three-month T-bills are government-backed short-term investments considered to be risk-free and as good as cash because the maturity is only three months. Morningstar collects yields on the T-bill on a weekly basis from [he Wall Street Journal. Citigroup Non-USD WGBI USD A market-capitalization weighted index consisting of the government bond markets of the following coumdes: Australia, Austria, Belgium, Canada, ~. Denmark, Finland, France, Germany, Italy, Japan, Nethedands, Spain, Swetl~ h. Switzerland, and United Kingdom. Counby eligibility is determined based up,in market capitalization and inves[ability criteria. The index includes all fxed-rate bonds with a remaining maturity of one year or longer and with amounts outstanding of at least the equivalent of US825 million. Government securities typically exclude Floating or variable rate bonds. DJ Wilshire 4500 This index consists of the U.S. equities in the Wilshire 5000 minus the 500 stocks that make up the S&P 500 Index. Dow Jones Moderate Portfolio This risk-based index consists of stocks, bonds, and cash and is intended to represent 60% of the risk and return o(the 1 DO% Global Portfolio Index. Dow Jones U.S. Moderate Portfolio A benchmark designed for asset allocation strategists (Portolio Builders) who are willing [o take 60%of the dsk of the U.S. Securities market. It is a total returns index that is atime-varying weighted average of stocks, bonds and cash. The DJ60%USPI is the efficient allocation of stocks, bonds and cash in a portolio whose semideviation is 60% of the annualized 36 month historic semideviation of the Dow Jones. Dow Jones U.S. Moderately Conservative Designed for asset allocation strategists (portfolio builders) who are willing to take 40%of [he risk of the U.S. securities market It is a total returns index that is atime-varying weighted average of stocks, bonds, and cash. It is the efficient allocation of stocks, bonds, and cash in a portfolio whose semideviation is 60%of [he annualized 36 month historic semideviation of the Dow Jones 100% Index. Lehman Brothers 6.10 Yr GovUCredi[ Bond Represents a combinatlon of the Government and Coporate Bond indices for bonds with maturities between 5 and 10 years. Includes both corporate (publicly-issued, fxed-rate, nonconvertible, investment grade, dollar-denominated, SEC-registered, corporate dept.) and government (Treasury Bond index, Agency Bond index, and Government index) indices. The returns we publish for the index are total returns, which include reinvestment of dividends. Lehman Brothers Aggregate Bond This index is composed of the Lehman Brothers GovernmentlCredit Index, the Mortgage-Backed Securities Index, and the Asset-Backed Securities Index. The returns we publish for the index are total returns, which include reinvestment of dividends. of fio Lehman Brothers Government Bond Tracks the returns of U.S. Treasuries, agency bands, and one- to three-year U.S. government obligations. Lehman Brothers Mortgage-Backed Bond Includes 15-and 30-year fxed-rate securities backed by mortgage pools of the Government National Mortgage Association (GNMA). Lehman Brothers U.S. Universal Boml Lehman Brothers U.S. Universal Bond Index: The U.S. Universal Index mirrors the increasingly popular °Core Plus" choice set used by many U.S.-dollar investors. I[ is the union of the U.S. Aggregate Index, the U.S. High Yield Corporate Index, the 144A Index, [he Eurodollar Index, the Emerging Markets Index, the non-ERISA portion of the CMBS Index, and the CMBS High Yield Index. Municipal debt, private placements, and non-dollar- denominated issues are excluded from the Universal Index. MSCI EAFE NDTR_D This Europe, Australasia, and Far East index is a market-capitalization-weighted index of 21 non-U.S., industrialized country indexes. MSCI EASEA (EAFE ex JAPAN) NDTR_D The EASEA is a 20-country index of developed nations. I[ resembles the MSCI EAFE in all regards except that Japan is excluded. MSCI Europe Ndv_D A free float-adjusted market capitalization index that is designed to measure developed market equity performance in Europe. As of September 2002, the MSCI Europe Index consisted o(the following 16 developed market country indices: Austia, Belgium, Denmark, Finland, France, Germany, Greece, Ireland, Italy, [he Netherlands, Norway, Portugal, Spain, Sweden, Switzedand and the United Kingdom. MSCI World NDTR_D Includes all 23 MSCI developed market counthes. MSCI World ex US NDTR_D This index measures the performance of the stock market in 21 non-U.S. industrialized countries. Morningstar Mid Cap Tracks the performance of mid cap stocks--stocks that represent the next 20 percent capitalization following the top 70 percent capitalization in the investable universe. Morningstar Small Growth Measures the performance of the small capitalization stocks that are growing taster than the rest of the market. Morningstar U.S. Market A rule-based, float-weighed index that tracks the performance of US stock market. The Index targets 97% capitalization of the investable universe. OZppq Mnni,gsM,. NI kyles k5evad iM nfama4m. mm, malyses am ePeao,e, mnMirea M1aen nl rclWe tln cmfieembl me pop,iaary mrameum of Mann~m,.IZ) may rot 4 coq a,ePStMmdl. (3~&rotcroslmA¢inaMm~adnm Meree by Manvguar,~l7 aie povieetl soklylor nlamarimal pnposes aN maela¢am mean olle'm M1Vya sellaserutty.aM lS)ae ae wartmmemoe caned canplHe oraad,xe. ®(IPPaalieimeaFmda' Eacall asMmsYSe,equ,M M1y law. ManingU, zM1all nd M,Yap[au0le k,artJtra]I,g ettlsms. eamageS O, IXIn Y.tsses rev101'g M1Om,o, reldl~[o,eMS mlamaGm,eam.vulyseswopmmsdmeir use iM1U,epm o vggk. opwimw mmml sales Irtemwe. n apiraole rz muse ee atteam a acmnpaeietl q a paspenuz. aegnalmi. am e~sk:ure dacemem. Page 60 of 60 Russell 1000 Consists o(the 10001arges[ companies within the Russell 3000 index, which • represents approximately 98% of the investable US equity market. Also known as [he Market-Oriented Index, because it represents the group of stocks from which most active money managers choose. Russe111000 Growth Tracks the companies within [he Russell 1000 with higher price-to-book ratios and higher forecasted growth values. Russell 1000 Value t Tracks the companies within the Russell 1000 with lower price-to-book ratios ' and lower forecasted growth values. ' 3 Russell 2000 , Consists of the 2000 smallest companies in the Russell 30001ndex. Standard & Pours 500 TR A market capitalization-weighted index of 500 widely held stocks often used as a proxy for the stock market. TR (Total Return) indexes include daily reinvestment of dividends. Standard & Poors Midcap 400 This index is comprised of stocks in the middle-capitalization range, and includes approximately 10% of the capitalization of U.S. equity securities. TR (Total Return) indexes include daily reinvestment of dividends. • • oltpa Mwnngstar. Ali RIgMS Pgavpa. iM inlormRgn. tlaG, anayses mtl oprvms WnG~ M1aen n~ ntlWe tlce rnrfiactlal se poprittary inrumarwn N Momingsrnr, (Z) may mtae caplet n ralsrhNee. (3~eo ml caw urte xnrsunmrawvs onaea Dy Manirgeui. ill are pwpea sdNy la mlvmatimal pupos¢am tlrer0ne are not an ofinrobry or sellessanry.am ls)serce wanmlaibbe correct co-rgere oiamrxe. mvrmadi Eaceptxorlerwrse repuiree by qw. MpningsGr 9allno[cer ynrrslak ro- any Vamng tlenvw¢aamagccmmM losses remn.g horn. o-relmetlw.rais nmrmatim,aau. arulysesa opmlarsd Nor uze. This repoM1¢sipge- r^~n•-- mmGl aks Irterame II apDlicade it roan Ge preceaea o- ecmmparuea bj a przrspenus. v eW~aiaR, aM arsclosure svrerrert. As of March 31, 2008 For Limited Distribution Only Description Fund Profile OFI Stable Value Trust (the "Fund") is a collective investment crust which is currently ~,;;,, invested in units of Morley Stable Value Fund' ("MSVF"). MSVF consists of a diversi- gssets 53t,93t,z46 fled portfolio of high quality stable value investment contracts issued by life insurance companies, banks and other financial institutions. The principal value of these assets Contract Issuers 10 remains stable regardless of stock and bond market fluctuations. The return is a blend Investments 253 of all the rates of the various investments purchased by the Fund. OFI Trust Company Avg. Quality AA+/flat is the trustee and manager of [he Fund OppenheimerFunds, Inc. is che investment Avg. Maturity 3.z6 years adviser and Morley Capital Management, Inc.' is [he investment Sub-Adviser. Avg. Duration 2.92 yeah Investment Objective Curren[ Yield 4.77% (Gross of Fees) CUSIPs CIaztA 67o85L1oo The objective of che Fund is to provide a low risk, moderate-yield investment for par- Class Cz 670851209 [icipants of eligible employee defined contribution plans. The Fund is managed [o earn Class N2 67085L308 a high level of return, consistent with and providing for, preservation of apical, high credit quality, liquidity to pay plan benefits and reasonable tracking of interest rates. Class Y 67085L4o7 Average duration is a fixed income - --- measuremen[of [he interest rate Average Annual Total Returns (Gross of Fees) sensitivity ofan investment. The credit quality ratings above represent _ 1-Month 3-Month YTD 1-Yr' 3-Yr' S-Yr" 10-Yr' ~ Che average credit quality of multiple Fund 0.39% 1.16% 1.16% 4 71% 4 47% 4 31% 5 22% Pools of searities collateralizing book • . . . . value wrap contracts.The individual iMoneyNet All Taxable 0.21 0.78 0.78 4.27 4.01 2.73 3.29 securities themselves may have a lower Lehman Bros. 1-3 Year Gov't 0.30 2.97 2.97 8.76 5.41 3.65 4.99 credit quality rating. "Annualized Th iM N All T bl M M k F d Cn'dlt QUdllty ($&P Ratings) e oney et axa e oney ar et un Index measures the equally weighted re[ums of over 1,600 of the largest taxable money market funds.The Lehman Brothers 1-3 Year Government Bond - ~ -~~ Index measures the returns of investmerit grade, Axed rare dollar denominated bonds publidyissued by theU.S.Government,withamamri[yofoveroneyearandlesschanthreeyears.lndicescannot AAA 71.35% be purchased directly by investors. Index performance is forillustraLive purposes only and does not AA+ _._ ___...___...__.__.._..7.71 predict or depictthe performance of [he OFl Stable Value Trust. qq_ ____, _,_... _,_ _ ,,., ,,,,,.,. 5.89 Average Annual Total Returns (Net of Fees) A+ _. ._ _ ____ __ _ __ 4so AA _.__._ .__._..._.......4.29 'a; 1-Month 3-Month YTD 1-Yr' 3-Yr" 5-Yr' 10-Yr" A _._____.. _____ ._..__ 3.92 Fee ClazsA 0.30% 0.88% 0.88% 3.54% 3.30% 3.14% 4.05% BBB-.._._. _..._________.._.__.0.51 Fee Clazs C2 0.28 0.82 0.82 3.29 3.05 2.89 3.79 BBB+.._._...____.._......_.......0.01 Fee Class N2 0.30 0.88 0.88 3.54 3.30 3.14 4.05 NR. ..._.....__._._____.._.._._2.02 Fee Class Y 0.34 0.99 0.99 4.00 3.76 3.60 4.51 NR: assets not rated by SB:P are rated "Annualized by Moody's. The performance shown above approximares the net return investors would have earned if they had been invested in the fee class for the time periods shown above. Total returns are based on the MSVF's return, adjusted ro reflect the estimated fees for each class of the OFI Stable Value Trust.The net return actually earned by participating trusts maybe different. Fund fees are paid to OFI Trust Company (or services including trustee, investment advisory and other fund expenses.The fees are 0.93%,1.18%, 0.93%and 0.48% for Class A, C2, N2 and Y un its, respectively, and reflect expense assumptions and management fee waivers which maybe withdrawn at any [ime.Total returns also reflect the deduction ofa 0.20%managemen[ fee paid ro Union Bond Trust Company.'These fees are estimated and may vary over time. • The performance data quoted represents past performance, which does not ~ OFI Trust Com an p Y guarantee future results. Performance returns assume che reinvestment of dividends and other earnings. Returns for periods less than one year are not annualized. • • Top 10 Holdings ., r Issuer/Wrap Product S&P Rating %of Fund JPMorgan Chase Wrap-Multi Arse[ AAA 15.5% Rabobank Wrap-Multi Asset AAA 15.5 NATIXIS Wrap-Multi Asset AA+ 15.4 State Street-Multi Asset AAA 15.3 UBS Wrap-Multi Asset AA+ 14.5 AIG Wrap-Multi Asset AA+ 11.3 AIG Wrap-UBT Attively Managed Fund AA+ 5.8 Hartford life Insurance Co. AA- 1.G Principal Life Insurance Co. AA 1.3 Genworth Life and Annuity AA- 1.2 Fund Composition ~i, Incemally Managed Externally Managed Investment Contract Cash Equivalent Maturity ;~,~ Duration % of Fund 87.5% 0-1 year 6.5 19.4% 1-2 years 20.4 4.6 2-3 years 1.4 17.1 3-4 yeah 14.9 4+ years 28.2 Excludes ash, pooled funds and contracts with no estimated payment streams. Sector Diversification Mortgage-backed Securities..... _.... .37.4% Commercialized Morcgaged-backed Securities._.. _. _._ _._..._._..__._.. 21.7 Corporate . _. _.. _...._____ _ ... 16.8 Asset-backed Securities _..... _....... 11.0 Attively Managed Funds ... _. _. _. . 6.5 GICs... _... ___.. _. _...__ . 4.6 Cash.... _....... _..__...._.. _ . 1.4 Government __.._. _.__.. _... _. _ 0.G Data is current as of 3/31108, is subject m change without notice and does not constitute a recommendation for any of [he securities mentioned All nonperformance dau is reflective of [he MSVF. 1. Formerly known as Gartmore Stable Value Fund 2. Formerly known as Gartmore Morley Capiral Management, Inc 3. Formerly known as Gartmore Trust Company. Units of the Fund are not deposiu or obligations of any bank are not guaranteed by any bank, are not insured by the FDIC or arty other agenry, and involve investment risks, including the possible loss ofthe principal amount invested. OFI Stable Value Trust is not a mutual fund and is no[ registered with or regulated by the Securities and Exchange Commission.lt is a collective investment trust of OFI Trust Company, a New York State chartered, limited purpose crust company, selectively offered to eligible retirement plans and is not distributed by OppenheimerFunds Distributor, Inc. Units of participation in the Trust are exempt from registration under the Investment Company Att of 1940 and the Securities Att of 1933. Due to regulatory restrictions, the Trust does not have a ticker symbol and the price is not published in daily periodicals.There are certain restrictions on investments and withdrawals from the Trust.lnvestors should read the Declaration ofTrust and Summary Information Booklet carefully before investing and should carefully consider the Trust's investment objectives, risks, charges, expenses and withdrawal restrittions. For Limited Distribution On1y.This brochure is for informational purposes only, for limited distribution to and use with eligible employee defined contribution plans. ®Copyrigh[ 2008 OFI Trust Company. All rights reserved OFI Trust Company' RE0001.218.0408 Apri118, 2008