Retirement investment educator Eric Roberts will showcase how high-expense funds not only drive unnecessary expense to your participants, but actually slow their ability to retire on time.

4. Fee Transparency Is Coming

5. The Fee Transparency Timeline Form 5500 Effective 1/1/09 408(b)(2) Interim Final 7/10/10 404(a)(5) Final Reg 10/20/10 408(b)(2) Takes Affect 4/1/12 404(a)(5) Takes Affect 6/1/12 ERISA §408(b)(2) is designed to increase fee transparency

6. What is 408(b)(2)?

7. What is 404(a)(5)

8. How do funds create revenue? Fees are built into the fund’s structure.

10. How Funds Generate Revenue Share classes feature varying fee structures Example: American Balanced Fund Share Class Ticker Expense Ratio R-1 RLBAX 1.40% R-2 RLBBX 1.40% R-3 RLBCX 0.94% R-4 RLBEX 0.65% R-5 RLBFX 0.35% R-6 RLBGX 0.30%

11. SITUATION ANALYSIS Current Plan – Share Class Selected American Balanced Fund Included in Expense Ratio Share Class Ticker Expense Ratio Mgmnt Fee 12b-1 Fee Sub-TA Fee R-1 RLBAX 1.40% 0.24% 0.99% 0.10% R-2 RLBBX 1.40% 0.24% 0.75% 0.25% R-3 RLBCX 0.94% 0.24% 0.50% 0.15% R-4 RLBEX 0.65% 0.24% 0.25% 0.10% R-5 RLBFX 0.35% 0.24% none none R-6 RLBGX 0.30% 0.24% none none

12. SITUATION ANALYSIS Actual cost to plan participants American Balanced Fund Included in Expense Ratio Share Class Ticker Expense Ratio Mgmnt Fee 12b-1 Fee Sub-TA Fee R-3 RLBCX 0.94% 0.24% 0.50% 0.15% Costs % of Plan Assets Total $94,000 0.94% Where does the money go? Admin. & Recordkeeping: TPA TAKES A $1K HAIRCUT. ($12,000) (0.12%) Custody: ($3,000) (0.03%) Investment Related ( Broker ): THIS IS NOT AN APPROPRIATE FEE!! ($50,000) (0.50%) Mutual Fund Investment Management: ($24,000) (0.24%) Retained by the mutual fund family: ($5,000) (0.05%) Overage / Shortfall to appropriate fees for services rendered: $29,000

13. SITUATION ANALYSIS Let’s Reveal The Hidden Costs of the Fund American Balanced Fund Total Cost: $94,000 or $470 per participant Included in Expense Ratio Share Class / Target Ticker Expense Ratio Mngmnt Fee 12b-1 Fee Sub-TA Fee R-3 RLBCX 0.94% 0.24% 0.50% 0.15% Share Class Ticker Fund Expense Mngmnt Fee 12b-1 Fee Sub-TA Fee R-3 RLBCX $94,000.00 $24,000.00 $50,000.00 $15,000.00

14. What happens if we change the share class to an option with lower expenses.

15. SITUATION ANALYSIS Revised Plan – Proper Share Class Selected American Balanced Fund Included in Expense Ratio Share Class Ticker Expense Ratio Mgmnt Fee 12b-1 Fee Sub-TA Fee R-1 RLBAX 1.40% 0.24% 0.99% 0.10% R-2 RLBBX 1.40% 0.24% 0.75% 0.25% R-3 RLBCX 0.94% 0.24% 0.50% 0.15% R-4 RLBEX 0.65% 0.24% 0.25% 0.10% R-5 RLBFX 0.35% 0.24% none none R-6 RLBGX 0.30% 0.24% none none

16. SITUATION ANALYSIS Revised cost to plan participants American Balanced Fund Included in Expense Ratio Share Class Ticker Expense Ratio Mgmnt Fee 12b-1 Fee Sub-TA Fee R-4 RLBEX 0.65% 0.24% 0.25% 0.10% Costs % of Plan Assets Total $65,000 0.65% Where does the money go? Administration and Recordkeeping: $6K SHORTFALL. ($7,000) (0.07%) Custody: ($3,000) (0.03%) Investment Related ( Adviser ): ($25,000) (0.25%) Mutual Fund Investment Management: ($24,000) (0.24%) Retained by the mutual fund family: ($6,000) (0.06%) Overage / Shortfall to appropriate fees for services rendered: $6,000

17. SITUATION ANALYSIS Let’s Reveal The Hidden Costs of the Fund American Balanced Fund Total Cost: $71,000 or $355 per participant Included in Expense Ratio Share Class / Target Ticker Expense Ratio Mngmnt Fee 12b-1 Fee Sub-TA Fee R-3 RLBCX 0.94% 0.24% 0.50% 0.15% Share Class Ticker Fund Expense Mngmnt Fee 12b-1 Fee Sub-TA Fee R-3 RLBCX $94,000.00 $24,000.00 $50,000.00 $15,000.00

18. What happens if we change to an INDEX option with even lower expenses.

19. SITUATION ANALYSIS Revised cost to plan participants Vanguard Balanced Index Fund Included in Expense Ratio Share Class Ticker Expense Ratio Mgmnt Fee 12b-1 Fee Sub-TA Fee Admiral Shares VBIAX 0.12% 0.10% 0.00% 0.00% Costs % of Plan Assets Total $12,000 0.12% Where does the money go? Administration and Recordkeeping: $13K SHORTFALL Custody: $3K SHORTFALL Investment Related ( Adviser ): $25K SHORTFALL Mutual Fund Investment Management: ($10,000) (0.10%) Retained by the mutual fund family: ($2,000) (0.02%) Overage / Shortfall to appropriate fees for services rendered: $41,000

20. SITUATION ANALYSIS Let’s Reveal The Hidden Costs of the Fund American Balanced Fund Total Cost: $53,000 or $265 per participant Included in Expense Ratio Share Class / Target Ticker Expense Ratio Mngmnt Fee 12b-1 Fee Sub-TA Fee R-3 RLBCX 0.94% 0.24% 0.50% 0.15% Share Class Ticker Fund Expense Mngmnt Fee 12b-1 Fee Sub-TA Fee R-3 RLBCX $94,000.00 $24,000.00 $50,000.00 $15,000.00

21. What difference does this make for me and my participants?

23. How fees impact overall retirement earnings for a participant.

24. Impact of Fees Time AF Balanced R3 AF Balanced R4 Diff. Vanguard Balanced Diff. 5 $187,569.86 $189,809.42 1.19% $191,578.25 2.14% 10 $298,842.50 $305,104.64 2.10% $310,094.40 3.77% 15 $460,925.18 $474,631.43 2.97% $485,647.47 5.36% 20 $695,360.21 $722,151.61 3.85% $743,869.33 6.98% 25 $1,032,588.09 $1,081,588.96 4.75% $1,121,649.75 8.63% 28 $1,301,482.20 $1,370,333.61 5.29% $1,426,911.41 9.64%

25. American Funds R3 vs. American Funds R4: $68,851.41 or 5.29% American Funds R3 vs. Vanguard: $125,429.21 or 9.64% Lost Retirement Savings: