Pension Risk Transfer Index rises for first time since September. Despite low interest rate environment, risk transfer opportunities exist for sponsors with specific circumstances. The Dietrich™ Pension Risk Transfer Index, which tracks relative attractiveness of annuitizing pension liabilities, rose two points from its prior month’s level of 85.51 and currently sits at 87.52 as of December 1, 2011. The increase was driven mainly by higher annuity discount rates (currently 3.48%) against nearly flat pension funding and interest rate spread levels. According to Jay Dinunzio, Senior Consultant at Dietrich & Associates, “While the current index level is still below the one hundred plus point threshold where annuitization becomes generally more attractive, specific plan sponsor circumstances may provide opportunities for annuities to deliver real value in the current environment”. Specific examples of some of these plan sponsor circumstances are as follows: • Moving to terminate the plan • Plan is well funded • Tactical view of prolonged and low equity returns and/or interest rates • Unconcerned with cash and accounting costs of settling liabilities • Committed to reducing pension plan size and ongoing expense • Willing to finance fully funding pension debt • Plan has large proportion of retiree benefits, creating potentially significant cash flow mismatch issues The Dietrich™ Pension Risk Transfer Index can be found at https://www.dietrichassociates.com

1. PENSION RISK TRANSFER INDEX ™
December 1, 2011 PRT Index Level
What is the Dietrich Pension Risk Transfer (PRT) Index ™ ?
The Dietrich Pension Risk Transfer Index ™ has been designed to create a monthly 87.52
benchmark that tracks the relative attractiveness of annuitizing accrued pension
obligations by considering three key underlying financial ratios 80 95 105 120
 Funded Status Level (50% Index Weight) Annuitization Attractiveness
 Current /Historical Annuity Rates (30% Index Weight) Plan/Monitor Opportunistic Settlement Attractive
 Annuity Rates vs. Treasury and Corporate Bonds (20% Index Weight) Sept 2010: Jan 2009:
PRT Index =82.7 PRT Index =121.4
Annual PRT Index PRT Index PRT INDEX
Monthly PRT Index
140
108.00
130
120 110.6 121.4 103.00
110 98.00
100 93.00
90 88.00
80 91.5 90.0
83.00
70 78.00
Jan-08 Jan-09 Jan-10 Jan-11
Effective 12/1/2011
Commentary: Modestly higher annuity rates drove an increase in the index value, against near flat pension funding and interest rate spreads.
Current annuity discount rate proxy sits @ 3.48%.
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