Advisory Committee Agenda May 9, 2012 PERS Headquarters ... · May 9, 2012 PERS Headquarters...

Advisory Committee Agenda

May 9, 2012 PERS Headquarters

Tigard, OR 9:30 a.m.

ITEM # ITEM PRESENTER I.

Introduction

Peter Farrelly, Chair

II.

Approval of Minutes


III.

Old Business

IV. Administrative Report A. Q1 2012 Service Review, Field Activities,

and update on Roth 457 Communications. B. Q1 2012 Performance Report

C. Update on Roth 457 and Financial Engines

product. Vacancy on Advisory Committee. D. State Q1 2012 Status E. Local Government Q1 2012 Status F. Q1 2012 Plan Statistics

Carol Cann, Marcy Loomis, and Justin Naegle, ING Mike Viteri and Ben Mahon, Treasury Jake O’Shaughnessy, Arnerich Massena Gay Lynn Bath, OSGP Karen Blanton, OSGP Jack Schafroth, OSGP Kathy Gannon, OSGP

V. New Business


VI. Audience Participation Peter Farrelly, Chair

VII. Adjournment The next meeting is scheduled for August 8, 2012, in Salem.


On-line versions of the materials are made available to the committee and to the public at

www.oregon.gov/pers/osgp one week prior to the meeting. Hard copies are available at the meetings.

If you have a disability that requires any special material, services or assistance please call (503) 378-8979 at least 48 hours before the meeting.

• Peter Farrelly, Chair • John Lattimer, Vice Chair • Bob Swank • Priyanka Shukla • Keith Baldwin • Sharlyn Rayment • Brian Burleigh

DRAFT

Oregon Savings Growth Plan Page 1 Advisory Committee Meeting Minutes February 8, 2012

ADVISORY COMMITTEE MEETING MINUTES

February 8, 2012 Archives Conference Room, PERS Salem Center

SALEM OREGON

COMMITTEE MEMBERS PRESENT STAFF MEMBERS PRESENT Peter Farrelly, Chair Jon DuFrene, PERS John Lattimer, Vice Chair Gay Lynn Bath, Manager Keith Baldwin, Committee Member Jack Schafroth, Local Government Representative Brian Burleigh, Committee Member Denise Helms, Assistant to Manager Sharlyn Rayment, Committee Member Karen Blanton, Educational Representative Bob Swank, Committee Member Kathy Gannon, Program Coordinator

I. INTRODUCTION: Call to order by Chair Farrelly at 9:30 a.m. Chair Farrelly asked for introductions.

II. APPROVAL OF MINUTES: Chair Farrelly asked for any changes to the minutes from the November 3, 2011 meeting as presented. He then asked for a motion to approve the minutes. Bob Swank made a motion to approve the minutes. Keith Baldwin seconded the motion, and it carried unanimously.

III. OLD BUSINESS:

None

IV. ADMINISTRATIVE REPORT:

A. Q4 2011 Service Review: Brian Merrick, Justin Naegle and Jay Young with ING presented the service review. Merrick introduced Young as a Charter Investment Analyst for Investment Services who works with some of ING’s largest plan sponsors.

Young discussed investment trends. About 5 years ago people starting adding TIPS funds to their plans. Young explained they do not cover all types of inflation and are usually very hard to understand. Young explained fixed income, index products, global exposure and the demand for guaranteed income products. Gay Lynn Bath

DRAFT


asked about congressional bills regarding the trend to get rid of pension plans and look at defined contribution plans to fill the gap.

Young talked about the Stable Value funds and wrap pricing increases. Young noted that the Stable Value is the most popular choice for participants; he explained book value and market value. He also said that some banks are looking to get out of the wrap business.

Justin Naegle shared in the last quarter he has had 55 educational group meetings with an attendance of 701 participants. Naegle had 292 one-on-one consultations with plan participants. Naegle introduced online recordings. One of the first to be recorded was “Investing in Turbulent Markets”; 17 percent of OSGP members indicated the WEB seminars are the preferred way to receive educational information. Naegle indicated that his evaluation surveys have had great responses. He collects a great deal of positive information from them; how they would prefer to be contacted, contribution information, age and their preferable way to receive education. Naegle noted that three percent of the participants who took this survey were 30 and under. The largest age range for OSGP falls in the 51-60 years. Naegle said we need to target the younger folks. The average age of a state employee starting is 32. Brian Merrick presented the executive summary noting the plan assets were $1.169 billion as of December 30, 2011. Merrick explained rolling quarter reporting and showed how much investment earnings impact the overall assets in the plan. Merrick noted how important it was to keep dollars coming into the plan. Merrick shared the results of OSGP transition counseling calls year to date. Oregon was one of ING’s first government plans to adopt the program. There have been 129 calls from spring until the end of the year; of those 67 decided to leave their money in the plan 8 selected another carrier, and 1 selected an ING IRA. Eleven participants decided to take cash distribution. They are working on other ways to determine what people are doing with their money through direct mail, phone calls and possibly a one-time outreach. ING is trying to be more proactive in this area. Merrick explained the newest plan enhancements. When participants access their account from a different computer they will be asked to answer security questions. The mobile device App is ready. Upcoming enhancements are the addition of the Roth 457, addition of the Life Path 2055 Fund, Sponsor Connect New Dashboards and Plan Investment Charts.

DRAFT


B. Financial Engines Advice Provision: Michael Doto, ING and Gay Lynn Bath

presented information on adding financial advice. Bath reminded the Committee about the surveys, web casts and other ways they have reached out for participant input. The survey indicated that 60 percent said they would like to receive an annual Retirement Evaluation; 90 percent said they would like Online Advice because they wanted an expert opinion, and 58.9 percent said they planned to retire in the next 15 years. Overall, the majority of respondents said they would like to have this service.

Doto noted three things; first, the desire to make the best use of the program, the second is retirement income awareness through planning, and the last is retaining assets in the plan. The Advice program accomplishes these things. Bath explained the plan would pay for this service for 1-2 years with a review after a year. The price is roughly $138,000 per year, managed accounts would be at the participants own expense. Bath said she would write up the metrics and goals and send them to the Committee. Bath explained the reserve account. Bob Swank moved to adopt the program, and Keith Baldwin seconded the motion.

C. Q4 2011 Performance Report: Mike Viteri and Ben Mahon from Treasury, and Jake O’Shaughnessy, Arnerich Massena, presented the fourth quarter performance report. Viteri introduced Ben Mahon as the new face of Treasury. Mahon joined Treasury four years ago and most recently worked on the Oregon 529 plan.

Viteri discussed the announcement that Dwight, the Stable Value asset manager, was sold to Gold Sachs. Dwight holds approximately $200 million, and roughly 17 percent of the Plan assets are in the Stable Value. He explained they will be retaining the key people but over the next 60-90 days 50 percent of the staff will be let go. Any organizational changes will automatically place them on a watch list. Viteri noted they would be going out in the next couple weeks to visit with Dwight. They will look over the staff/ management changes and also reach out to other providers. Jake O’Shaughnessy shared he worked for three states; Oregon, Nevada and Kansas. He discussed Stable Value provider information and their roles. He noted we have great resources with Treasury and Gay Lynn with NADGCA. O’Shaughnessy explained the shift in Stable Value, and talked about why Dwight was sold. He noted that Treasury and Arnerich would be going to visit with Dwight to complete their due diligence on the Stable Value. O’Shaughnessy noted how important deferred compensation is becoming with the changes to pensions. The 457 plans originally were the topping on the pensions’; but that is changing due to the

DRAFT


diminishing defined benefit portion. O’Shaughnessy explained fee transparency. Bath noted that OSGP currently discloses the plan fees. The first quarter of 2011 started out great and markets took off, in the second quarter Europe caused problems, and then the third quarter was very bad. The fourth quarter has been moving in the right direction. O’Shaughnessy and Viteri talked about wrap contracts and insurance. Viteri and Bath explained whose responsibility it is to make decisions on investments.

D. Update on Survey for Auto Enrollment, Committee Terms, Plan Update, and Schwab Report: Gay Lynn Bath gave an update on the survey on auto enrollment, noting there were 4500 responses. Over all 60 percent support making OSGP and opt out program, 37 percent would not. People are fearful this would it easier to make the deferred compensation plan their only retirement plan. Bath explained state law would have to be changed before Oregon could offer auto-enrollment to state employees. However, unions could choose to participate in auto-enrollment through collective bargaining.

Bath shared highlights of the Plan Update noting the importance of updating beneficiary information in life-changing events. Bath reminded the Committee of terms she will be sending members their timelines.

E. State Q4 2011 Status: Karen Blanton gave the fourth quarter state status. The brown bag presentations have been successful. The monthly deferrals were up, higher education had a goal 55 and we hit 61. NetLinks have been a positive resource, Blanton has two new workshops. Rollovers were up from last year. Blanton thanked Director Cleary for letting PERS employees attend OSGP workshops on company time. Blanton will start inviting local governments to her workshops if there are some in her areas. Blanton also has a new contact with OLCC and will be attending some regional meetings with HR.

F. Local Government Q4 2011 Status: Jack Schafroth reported that local government’s assets have passed the $100 million mark. The growth has been slow but steady. There are two new adoptions this quarter; Blue Mountain Community College and Lane County ESD. Currently there are 11 new adoptions in process. Schafroth stated the local government has high demographics of younger people and that education is very important.

G. Q4 2011 Plan Statistics: Kathy Gannon gave the highlights of the fourth quarter’s

statistics. Gannon said the dollar amount is up and the rollovers in are up, but unfortunately rollovers out are also up. There have been 68 trustee to trustee

DRAFT


transfers for the purpose of purchasing PERS service credits. Special programs, such as final paycheck deferrals went form 69 to 118; this is the result of HR people who are letting employees know they can defer a larger amount into this program.

NEW BUSINESS Bath asked the Committee about moving to semiannual statements.

AUDIENCE PARTICIPATION:

None

ADJOURNMENT: The next meeting is May 9, 2012 in Tigard.

There being no further business, Chair Farrelly adjourned the meeting.

Respectfully submitted,

Denise A Helms Assistant to the Deferred Compensation Manager

1

First Quarter 2012Service Review

Presented by:

Carol CannMarcy Loomis

Kenje MallotJustin Naegle

Tigard, ORMay 9, 2012

2

Agenda

• Local Office Update

• Executive Summary

• Communications Update

• Appendix A: Service Review– Participation Analysis– Asset Analysis– Participant Services

Local Office Update

4

On-site Education & Support

• Meetings Held– 49 educational group meetings with an attendance of 422

participants– 264 one-on-one consultations with plan participants

• Online Recording– Through Pweb access to online recordings of popular seminars– “Investing In Turbulent Times” is first recording– Viewed 82 times by participants in Q1 2012

January, 2012 – March 31, 2012

5

1. How did you find out about the seminar?

2. If you took any action in your account as a result of education in the seminar, what was it?

3. If not currently participating in OSGP, will you begin saving in OSGP after attending the seminar?

On-site Education & Support

Human Resources/Employer 58%Mailing 16%E-mail 12%Poster/Flyer at Worksite 7%Co-worker 2%Other (website, etc.) 6%

Increased contributions 19%Reviewed my investments 26%No action taken 50%Other, please specify 22%

Yes 71%No 29%

4. What is your age range?

5. What is your preferred way to receive education?

Age Range PercentageLess than 30 4%30 to 40 17%41 to 50 28%51 to 60 37%61 to 70 13%71 to 80 1%More than 80 0%

On-site seminars 79%Individual consultations 12%Mailings 2%Web seminars/recordings 7%

Executive Summary

7

Executive Summary

Assets and Plan Composition• $1.255 billion as of March 31, 2012• Plan composition:

– LifePath Option represents 26% of Plan assets– Stable Value Option represents 15% of Plan assets– Small Mid Size Option represents 14% of Plan assets– The loan fund equals $7.38 million, representing less than 1% of the total

Plan assets• 1,333 loans have been issued since the loan program was added in

July 2007• 6% of participants with a balance have a loan

Cash Flow• The net cash flow is a positive $3,990,475

8

Executive Summary

Plan Enhancements Q1 2012• Addition of the Life Path

2055 Fund

• Website New Account Summary Page

• Transition Counseling Targeted Mailing

Upcoming Plan Enhancements 2012

• Addition of Roth 457

Communications Update

10

2012 Communication

A Focus on New Media• Mobile – Wireless phone technology with a particular focus on phones with data plans

commonly referred to as smartphones. • e-Media – The ability to take immediate action make it more powerful than traditional

media. • Social media – A relationship media that continues to gain presence.

10

40% of those 20 to 39 are very knowledgeable on how to use an iPod; only 15% say the same about saving for retirement.

– DividedWeFail/American Savings Education Council and AARPPreparing for Their Future, March 2008

11

E-book/flipbook• Actionable• Self-navigation – personalizes experience• Immediate• Short on copy• Relevant examples

– Focus less on age and more on years– Incorporate savings– Interactive tools/calculators

E-Media

The medium is the message. How can we strengthen educational resources and help drive participant behavior change?

Check it out!http://www.ingdelivers.com/directvguide

12

E-Media

GURL or PURL• Addresses participation, deferrals, non-

qualified plan enrollment• Standardized or personalized format• Demonstrates potential reward for change in

behavior• Guidance – options but not too many• Immediate Check it out!

http://samsample.ingpurldemo.com

Case Studies Audience % Who Went to PURL Response Rate

Client A: Mailed PURL Information 7,033 12%5% of total

40% of visitors

Client B: e-mail with PURL Link 2,826 49%9% of total

20% of visitors

13

Virtual / Online Workshops• Have a concept that is not a talking head• Make it fun – drive repeat access• Make it accessible anytime/anywhere

– Microsite– YouTube

Targeted Communications• Leveraging communication programs from the

ING Education Library– WorthKnowing flyers, customized with Plan

logo and branding– Video and iChart electronic links– Pweb guide and new features/tools– Tags

E-Media

QR code read quickly by smartphone

14

E-Media

Flash and HTMLs• Interactive and engaging• Post online or e-mail (microsite, social networking sites)• Share with friends to encourage them to save

Appendix A: Service Review

Service ReviewParticipation Analysis

17

Participant Status Summary

Participant Status Number of Participants

Active, Contributing 13,689

Active, Not Contributing 4,379

Suspended 109

Terminated, Receiving Installments 984

Terminated with a Balance 4,294

Total: 23,276

As of December 31, 2011

Participant Status Number of Participants

Active, Contributing 13,851

Active, Not Contributing 4,158

Suspended 123

Terminated, Receiving Installments 968

Terminated with a Balance 4,243

Total: 23,343

As of March 31, 2012

18

Average Monthly Contribution by Age

As of December 31, 2011 As of March 31, 2012

Age Group Before-tax Average $

<21 0.00

21-30 86.79

31-40 128.62

41-50 192.61

51-60 331.78

61 + 423.43

Age Group Before-tax Average $

<21 0.00

21-30 93.08

31-40 127.88

41-50 194.84

51-60 337.92

61 + 418.02

19

Average Contribution Amount by Location


Def

erra

l Am

ount

20

Higher Ed

OSPS

Misc. Agencies

Plan

Local Gov’t

Plan ParticipationMarch 31, 2012

21

Participants with Balances by Number of Investments


22

Participants with Balances/Single Investmentp

a r t

i c

i p a

t i o

n

a n

a l y

s i

s


Service ReviewAsset Analysis

24

$(200,000,000)

$-

$200,000,000

$400,000,000

$600,000,000

$800,000,000

$1,000,000,000

$1,200,000,000

$1,400,000,000

$3,6

64,7

93

$8,5

76,8

08

$8,3

21,0

25

$3,9

90,5

05

$4,0

67,1

59

$(121,254,036)

$69,

425,

374

$89,

763,

614

$1,204,292,586 $1,091,615,358

$1,169,361,756 $1,263,115,875

Net Cash Flow

Investment Earnings

Ending Balance

2Q 2011 3Q 2011 4Q 2011 1Q 2012 Last 12 Months

Beginning Balance $ 1,196,560,633 $ 1,204,292,586 $ 1,091,615,358 $ 1,169,361,756 $ 1,196,560,633Net Cash Flow $ 3,664,793 $ 8,576,808 $ 8,321,025 $ 3,990,475 $ 24,553,101

Investment Earnings $ 4,067,159 $ (121,254,036) $ 69,425,374 $ 89,763,614 $ 42,002,111 Ending Balance $ 1,204,292,586 $ 1,091,615,358 $ 1,169,361,756 $ 1,263,115,875 $ 1,263,115,875

Plan Profile 1Q 2012 and Rolling Quarters

25

Plan Profile By Month for 1Q 2012 and Rolling Quarters

$1,205,477,620 $1,239,164,391 $1,263,115,875$1,150,000,000$1,200,000,000$1,250,000,000$1,300,000,000

Jan-12 Feb-12 Mar-12

$1,204,292,585 $1,091,615,357 $1,169,361,756 $1,263,115,875 $0

$500,000,000$1,000,000,000$1,500,000,000

2Q 2011 3Q 2011 4Q 2011 1Q 2012

1Q 2012

Last 4 Quarters

Ass

ets

Ass

ets

26

Assets by Fund Objectives As of March 31, 2012

Total Plan Assets as of 03/31/12: $1,263,115,875

27

Assets by Funds Q1 2012

03/31/201212/30/2011

28

Balances by InvestmentAs of March 31, 2012

InvestmentInvestment

BalanceNumber of

ParticipantsAverage Participant

BalancePercentage of Plan

Assets

SHORT TERM FIXED OPTION $52,773,314.47 4015 $13,144.04 4.20%

STABLE VALUE OPTION $193,223,420.50 8128 $23,772.57 15.39%

LIFEPATH RETIREMENT FUND $93,161,849.90 2446 $38,087.43 7.42%

LIFEPATH 2015 FUND $82,039,153.74 2618 $31,336.58 6.53%

LIFEPATH 2020 FUND $62,256,713.60 2776 $22,426.77 4.96%

LIFEPATH 2025 FUND $31,618,195.14 2136 $14,802.53 2.52%

LIFEPATH 2030 FUND $21,512,373.44 1857 $11,584.48 1.71%

LIFEPATH 2035 FUND $14,194,702.47 1602 $8,860.61 1.13%

LIFEPATH 2040 FUND $7,331,830.44 1217 $6,024.51 0.58%

LIFEPATH 2045 FUND $3,163,751.72 621 $5,094.61 0.25%

LIFEPATH 2050 FUND $6,182,033.86 757 $8,166.49 0.49%

INTERMEDIATE BOND OPTION $105,278,725.96 7474 $14,085.99 8.38%

LARGE COMP VALUE STOCK OPTION $95,996,183.73 9415 $10,196.09 7.64%

STOCK INDEX OPTION $119,662,168.61 8763 $13,655.39 9.53%

LARGE COMP GROWTH STOCK OPTION $103,073,672.13 9882 $10,430.45 8.21%

INTERNATIONAL STK OPTION $90,840,529.58 10420 $8,717.90 7.23%

SM/MID SIZE CO STK OPTION $171,331,168.19 11555 $14,827.45 13.64%

SCHWAB PCRA $2,143,159.26 39 $54,952.80 0.17%

Total Investment Balance: $1,263,115,875

29

Balances by Participant StatusAs of March 31, 2012

a s

s e

t a

n a

l y

s i s

As of December 31, 2011 As of March 31, 2012

Participant Status Participant Balance

Active, Contributing $725,157,313

Active, Not Contributing $158,675,180

Suspended $3,213,383

Terminated, Receiving Installments $71,403,613

Terminated with a Balance $304,666,386

Total: $1,263,115,875

Participant Status Participant Balance

Active, Contributing $571,357,542

Active, Not Contributing $170,711,048

Suspended $2,434,203

Terminated, Receiving Installments $65,872,849

Terminated with a Balance $281,200,556

Total: $1,091,576,198

30

Participant Transfer Analysis Q1 2012

31

Transfer Activity by InvestmentQ2 2012

Investment Name Transfers In Transfers Out Net

SHORT TERM FIXED OPTION $3,460,916.05 $-4,992,854.40 $-1,531,938.35

STABLE VALUE OPTION $6,397,213.07 $-7,192,370.96 $-795,157.89

LIFEPATH RETIREMENT FUND $4,653,437.77 $-1,703,113.75 $2,950,324.02

LIFEPATH 2015 FUND $1,889,494.79 $-1,357,800.15 $531,694.64

LIFEPATH 2020 FUND $1,920,739.81 $-763,631.59 $1,157,108.22

LIFEPATH 2025 FUND $999,625.51 $-440,687.28 $558,938.23

LIFEPATH 2030 FUND $620,465.09 $-147,450.10 $473,014.99

LIFEPATH 2035 FUND $344,121.22 $-128,566.34 $215,554.88

LIFEPATH 2040 FUND $285,072.80 $-36,379.76 $248,693.04

LIFEPATH 2045 FUND $79,286.47 $-17,277.33 $62,009.14

LIFEPATH 2050 FUND $377,487.91 $-775,567.49 $-398,079.58

INTERMEDIATE BOND OPTION $6,660,402.34 $-5,376,494.77 $1,283,907.57

LARGE COMP VALUE STOCK OPTION $2,166,209.73 $-3,021,891.88 $-855,682.15

STOCK INDEX OPTION $2,454,169.41 $-2,741,387.04 $-287,217.63

LARGE COMP GROWTH STOCK OPTION $3,369,410.20 $-3,592,161.36 $-222,751.16

INTERNATIONAL STK OPTION $1,079,842.77 $-3,340,280.01 $-2,260,437.24

SM/MID SIZE CO STK OPTION $5,017,140.04 $-6,227,265.10 $-1,210,125.06

SCHWAB PCRA $757,049.74 $-198,891.71 $558,158.03

32

1.8

7.1

4

2.93.5

1.1

2.4 2.3 2.13

3.6 3.4

2.3 2.4

1.3 1.4

2.6 2.4 2.8

1.3

2.51.7

2.6 2.6

0102030405060708090100

$0 M$1 M$2 M$3 M$4 M$5 M$6 M$7 M$8 M

Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar

$ Out$ In# Out# In

Rollovers in: $7.0M Rollovers in: 245Net rollovers: -$2.9MRollovers out: -$9.9MRollovers out: 121

Top 4 Receiving Institutions:Edward Jones 15%ING 7%Vanguard 6% Schawb 5%

Rollovers (Includes Local Governments)April 2011 – March 2012

33

Loan Issuances 2Q 2011 through 1Q 2012

Rolling Quarters

Num

ber o

f Lo

ans

Issu

ed

Num

ber o

f Lo

ans

Issu

ed

34

Cash Flow SummaryJanuary 1, 2012 – March 31, 2012

Cash In

Pre-tax Contributions $16,668,304

Plan Transfers/Rollover Ins 7,016,795

Loan Repayments 786,714

QDROs/Death Transfers 1,301,990

Total Cash In $25,773,803

Cash Out

Withdrawals $1,096,309

Distributions 8,544,500

Plan Transfers/Rollovers Out 9,915,450

Loans Issued 917,354

Fees 7,725

QDROs/Death Transfers 1,301,990

Total Cash Out ($21,783,328)

Net Cash Flow $3,990,475

Service ReviewParticipant Services

36

Participant Contact Summary

January 1, 2012 – March 31, 2012

37

Paperless Transaction Summary

January 1, 2012 – March 31, 2012

38

Interactive Voice Response (IVR) Activity

Date Total IVR CallsIVR Calls During

CSA HoursIVR Calls Outside

of CSA HoursIVR Calls

Transferred to CSA Percent of IVR Calls Transferred to CSA

Jan - 2011 5,502 3,740 1,762 1,994 53.32

Feb - 2011 5,174 3,327 1,847 1,766 53.08

Mar - 2011 5,430 3,707 1,723 1,904 51.36

January 1, 2012 – March 31, 2012

39

Customer Service Associate (CSA) Activity

Reporting Period CSA Call VolumeAverage Speed of

Answer (Seconds)Average Call

Length (Minutes)

Jan-2012 1,766 152 4.47

Feb-2012 1,705 46 4.02

Mar-2012 1,867 39 3.65

January 1, 2012 – March 31, 2012

40

Customer Service Associate (CSA) Activity

April 2011 – March 2012

Reporting Period PSR Call Volumes Number of Abandoned Calls Percent of Abandoned Calls

Apr-2011 922 41 4.23%

May-2011 723 11 1.50%

Jun-2011 619 11 1.75%

Jul-2011 785 27 3.33%

Aug-2011 1066 49 4.38%

Sep-2011 839 9 1.06%

Oct-2011 1240 86 6.47%

Nov-2011 1101 45 3.92%

Dec-2011 1294 58 4.27%

Jan-2012 1766 224 11.23%

Feb-2012 1705 56 3.17%

Mar-2012 1867 35 1.84%

41

Internet Visits by Month

January 1, 2012 – March 31, 2012

42

Paperless Transactions by Channel

January 1, 2012 – March 31, 2012

43

Paperless Transaction Summary (IVR/CSA/Web Combined)

Transaction Description Transaction Volume

Contribution Rate Change 1,115

Document/Package Requests 194

Fund to Fund Transfers 1,531

Investment Election Changes 734

Investment Rebalance Elections 99

New Loans Issued 99

Total Paperless Transactions 3,772

January 1, 2012 – March 31, 2012

44

Transaction Description Transaction Volume

Contributions 46,931

Rebalance Transfers 305

Fee Deduction 116

Installment Distributions 2,574

Required Minimum Distributions 68

Total: 49,454

Processing Summary

January 1, 2012 – March 31, 2012

45

Thank you!

Oregon Savings Growth PlanPerformance Results

as of January 31, 2012Updated on 2/6/2012

OPTION 1 Month 3 Months Year to Date From Inception Since 1 Year 2 Years 3 Years 5 Years 10 YearsBENCHMARKS (for comparison) 10/31/96 10/31/01Short-Term Fixed Option -0.01% -0.04% -0.01% 2.77% 1.74% -0.13% -0.11% -0.07% 1.24% 1.74%91-Day T-Bill 0.00% 0.00% 0.00% 3.03% 1.94% 0.09% 0.11% 0.15% 1.40% 1.94%Stable Value Option 0.11% 0.35% 0.11% 4.16% 3.47% 1.53% 1.67% 1.71% 2.76% 3.44%91-Day T-Bill 0.00% 0.00% 0.00% 3.03% 1.94% 0.09% 0.11% 0.15% 1.40% 1.94%Rolling Average 5 Year CMT** 0.20% 0.62% 0.20% 4.68% 4.01% 2.78% 3.08% 3.29% 3.53% 3.97%Intermediate-Bond Option 1.28% 2.26% 1.28% 6.03% 5.73% 8.45% 7.42% 10.31% 6.81% 5.93%BC Aggregate 0.88% 1.90% 0.88% 6.33% 5.51% 8.66% 6.85% 7.40% 6.70% 5.78%Large Company Value Stock Option 4.40% 5.29% 4.40% 6.07% 4.87% 0.65% 9.80% 17.32% -2.34% 4.24%Russell 1000 Value 3.78% 5.33% 3.78% 6.81% 4.99% 1.88% 11.28% 17.63% -2.16% 4.36%Stock Index Option 5.03% 5.60% 5.03% 6.06% 4.62% 3.70% 13.30% 20.10% 0.48% 3.96%Russell 3000 5.05% 5.62% 5.05% 6.31% 4.82% 3.86% 13.46% 20.24% 0.60% 4.16%Large Company Growth Stock Option 5.85% 5.23% 5.85% 4.59% 3.76% 5.21% 14.53% 21.94% 1.94% 3.24%Russell 1000 Growth 5.97% 5.62% 5.97% 5.14% 4.02% 6.07% 15.21% 22.31% 3.17% 3.38%International Stock Option 6.87% 1.67% 6.87% 5.47% 6.61% -9.28% 3.26% 15.29% -3.00% 6.36%MSCI EAFE 5.33% -0.73% 5.33% 3.87% 5.51% -9.59% 2.13% 13.37% -3.85% 5.79%Small/Mid-Size Company Stock Option 7.46% 7.01% 7.46% 9.76% 9.13% 3.10% 16.78% 25.22% 3.23% 8.09%Russell 2500 6.65% 6.52% 6.65% 8.57% 8.47% 2.60% 16.75% 24.84% 2.01% 7.40%LifePath® Retirement 2.70% 2.67% 2.70% 5.58% 8.80% 12.53%LifePath® 2015 3.04% 2.73% 3.04% 4.63% 9.25% 14.16%LifePath® 2020 3.53% 2.90% 3.53% 3.46% 9.50% 15.28%LifePath® 2025 3.92% 3.18% 3.92% 2.65% 9.77% 16.26%LifePath® 2030 4.23% 3.16% 4.23% 1.80% 9.92% 17.05%LifePath® 2035 4.66% 3.44% 4.66% 1.13% 10.12% 17.79%LifePath® 2040 4.87% 3.41% 4.87% 0.44% 10.31% 18.54%LifePath® 2045 5.20% 3.59% 5.20% -0.17% 10.41% 19.21%LifePath® 2050 5.35% 3.62% 5.35% -0.79% 10.56% 19.88%**5 Year Rolling Average of the 5 Year Constant Maturing Treasury Yield.

Performance figures are net all fees including management, recordkeeping and other administrative fees. The results shown represent past performance and should not be considered a representation of performance of the options in the future. Investment returns and principal are not guaranteed.

Annualized

Monthly performance results are published on the PERS web page at www.pers.state.or.usTo access current account information 24 hours a day call our Customer Service Center at 1-800-365-8494.

Oregon Savings Growth PlanPerformance Results

as of February 29, 2012Updated on 3/6/2012

OPTION 1 Month 3 Months Year to Date From Inception Since 1 Year 2 Years 3 Years 5 Years 10 YearsBENCHMARKS (for comparison) 10/31/96 10/31/01Short-Term Fixed Option -0.01% -0.04% -0.03% 2.75% 1.73% -0.15% -0.11% -0.08% 1.16% 1.72%91-Day T-Bill 0.00% 0.00% 0.00% 3.02% 1.93% 0.08% 0.11% 0.14% 1.32% 1.92%Stable Value Option 0.11% 0.34% 0.22% 4.15% 3.46% 1.51% 1.64% 1.68% 2.71% 3.41%91-Day T-Bill 0.00% 0.00% 0.00% 3.02% 1.93% 0.08% 0.11% 0.14% 1.32% 1.92%Rolling Average 5 Year CMT** 0.20% 0.61% 0.40% 4.67% 4.00% 2.73% 3.03% 3.25% 3.50% 3.95%Intermediate-Bond Option 0.28% 2.74% 1.56% 6.02% 5.72% 8.21% 7.32% 10.60% 6.55% 5.87%BC Aggregate -0.02% 1.96% 0.85% 6.30% 5.47% 8.37% 6.63% 7.52% 6.37% 5.68%Large Company Value Stock Option 4.40% 10.63% 9.00% 6.33% 5.27% 1.37% 10.65% 24.69% -1.20% 4.67%Russell 1000 Value 3.99% 10.09% 7.92% 7.04% 5.35% 2.18% 11.72% 25.01% -1.08% 4.75%Stock Index Option 4.20% 10.31% 9.44% 6.32% 5.00% 4.28% 13.75% 26.35% 1.65% 4.61%Russell 3000 4.23% 10.39% 9.49% 6.57% 5.21% 4.45% 13.92% 26.49% 1.77% 4.81%Large Company Growth Stock Option 5.56% 11.26% 11.74% 4.94% 4.28% 7.32% 15.64% 27.18% 3.54% 4.19%Russell 1000 Growth 4.78% 10.68% 11.04% 5.43% 4.46% 7.62% 15.96% 27.51% 4.53% 4.30%International Stock Option 6.05% 10.77% 13.34% 5.85% 7.17% -6.48% 6.49% 21.38% -1.86% 6.86%MSCI EAFE 5.74% 10.32% 11.38% 4.23% 6.04% -7.45% 5.39% 19.74% -2.93% 6.31%Small/Mid-Size Company Stock Option 3.41% 11.22% 11.13% 9.95% 9.42% 1.65% 16.10% 31.28% 3.91% 8.65%Russell 2500 3.71% 10.85% 10.60% 8.78% 8.79% 1.45% 16.05% 31.27% 2.79% 7.98%LifePath® Retirement 1.60% 4.69% 4.34% 5.76% 9.07% 14.79%LifePath® 2015 1.96% 5.34% 5.07% 4.72% 9.63% 17.21%LifePath® 2020 2.48% 6.28% 6.09% 3.85% 10.00% 18.95%LifePath® 2025 2.73% 6.95% 6.76% 3.15% 10.26% 20.40%LifePath® 2030 3.09% 7.54% 7.45% 2.42% 10.58% 21.71%LifePath® 2035 3.36% 8.16% 8.17% 1.87% 10.77% 22.90%LifePath® 2040 3.63% 8.67% 8.68% 1.31% 11.01% 24.03%LifePath® 2045 3.81% 8.95% 9.21% 0.72% 11.18% 25.04%LifePath® 2050 4.14% 9.46% 9.72% 0.12% 11.35% 25.99%**5 Year Rolling Average of the 5 Year Constant Maturing Treasury Yield.Performance figures are net all fees including management, recordkeeping and other administrative fees. The results shown represent past performance and should not be considered a representation of performance of the options in the future. Investment returns and principal are not guaranteed.

Annualized


Oregon Savings Growth PlanPerformance Resultsas of March 31, 2012

Updated on 4/5/2012

OPTION 1 Month 3 Months Year to Date From Inception Since 1 Year 2 Years 3 Years 5 Years 10 YearsBENCHMARKS (for comparison) 10/31/96 10/31/01Short-Term Fixed Option -0.01% -0.04% -0.04% 2.74% 1.71% -0.15% -0.11% -0.09% 1.07% 1.71%91-Day T-Bill 0.01% 0.01% 0.01% 3.00% 1.91% 0.06% 0.11% 0.13% 1.23% 1.91%Stable Value Option 0.11% 0.34% 0.34% 4.13% 3.44% 1.49% 1.62% 1.66% 2.66% 3.38%91-Day T-Bill 0.01% 0.01% 0.01% 3.00% 1.91% 0.06% 0.11% 0.13% 1.23% 1.91%Rolling Average 5 Year CMT** 0.19% 0.59% 0.59% 4.66% 3.99% 2.67% 2.98% 3.21% 3.48% 3.92%Intermediate-Bond Option -0.34% 1.21% 1.21% 5.96% 5.63% 7.76% 7.00% 9.84% 6.48% 5.99%BC Aggregate -0.55% 0.30% 0.30% 6.22% 5.37% 7.71% 6.41% 6.83% 6.25% 5.80%Large Company Value Stock Option 3.00% 12.27% 12.27% 6.50% 5.53% 3.97% 8.98% 22.36% -0.91% 4.54%Russell 1000 Value 2.96% 11.12% 11.12% 7.21% 5.60% 4.79% 9.85% 22.82% -0.81% 4.57%Stock Index Option 3.08% 12.81% 12.81% 6.49% 5.26% 7.02% 12.00% 24.09% 2.05% 4.48%Russell 3000 3.08% 12.87% 12.87% 6.74% 5.47% 7.18% 12.18% 24.26% 2.18% 4.67%Large Company Growth Stock Option 3.29% 15.41% 15.41% 5.13% 4.57% 10.80% 14.16% 24.74% 4.01% 4.10%Russell 1000 Growth 3.29% 14.69% 14.69% 5.62% 4.75% 11.02% 14.58% 25.28% 5.10% 4.28%International Stock Option 0.01% 13.36% 13.36% 5.82% 7.11% -4.83% 3.08% 18.40% -2.48% 6.21%MSCI EAFE -0.46% 10.86% 10.86% 4.17% 5.94% -5.77% 2.00% 17.13% -3.51% 5.70%Small/Mid-Size Company Stock Option 2.29% 13.68% 13.68% 10.05% 9.57% 1.92% 13.10% 28.46% 4.18% 8.16%Russell 2500 2.15% 12.99% 12.99% 8.88% 8.93% 1.33% 13.05% 28.42% 3.03% 7.49%LifePath® Retirement 0.07% 4.42% 4.42% 5.47% 7.83% 13.12%LifePath® 2015 0.25% 5.33% 5.33% 4.80% 8.01% 15.27%LifePath® 2020 0.44% 6.56% 6.56% 4.12% 8.20% 16.80%LifePath® 2025 0.72% 7.53% 7.53% 3.71% 8.32% 18.14%LifePath® 2030 0.93% 8.45% 8.45% 3.19% 8.50% 19.31%LifePath® 2035 1.04% 9.30% 9.30% 2.75% 8.50% 20.38%LifePath® 2040 1.06% 9.83% 9.83% 2.29% 8.50% 21.29%LifePath® 2045 1.28% 10.60% 10.60% 1.92% 8.59% 22.31%LifePath® 2050 1.38% 11.23% 11.23% 1.52% 8.68% 23.06%**5 Year Rolling Average of the 5 Year Constant Maturing Treasury Yield.Performance figures are net all fees including management, recordkeeping and other administrative fees. The results shown represent past performance and should not be considered a representation of performance of the option in the future. Investment returns and principal are not guaranteed.

Annualized


Oregon Savings Growth Plan 457

Performance Review

March 31, 2012

2045 NE Martin Luther King Jr. Blvd

Portland, Oregon 97212

503-239-0475

Fax: 503-239-0369

E-mail: [email protected]

Investment Advisor: Jake O'Shaughnessy

[email protected]

Investment Analyst: Bryan Shipley

[email protected]

Performance Measurement Analyst: Tyler Bernstein

[email protected]


Section 1 Portfolio Summary

Manager Diversification

Asset Allocation

Evaluation Notes

Performance Results

Section 2 Research

Performance Attributions

Section 3 Market Overviews

DC Solutions

Economic Overview

Analytics News

Fixed Income Markets Overview

US Equity Markets Overview

International Markets Overview

Annual Equity Asset Class and Style Returns

Table of Contents - March 31, 2012


Market Value Actual

Loans $7,382,285 0.6%

Loan Fund $7,382,285 0.6%

Money Market $52,773,314 4.2%

Short Term Fixed Option $52,773,314 4.2%

Stable Value $193,223,420 15.3%

Stable Value Option - OSGP $193,223,420 15.3%

Fixed $105,278,726 8.3%

Intermediate Bond Option - OSGP $105,278,726 8.3%

Balanced $321,460,604 25.5%

BR LP 2015 Index Q $82,039,154 6.5%

BR LP 2020 Index Q $62,256,714 4.9%

BR LP 2025 Index Q $31,618,195 2.5%

BR LP 2030 Index Q $21,512,373 1.7%

BR LP 2035 Index Q $14,194,702 1.1%

BR LP 2040 Index Q $7,331,830 0.6%

BR LP 2045 Index Q $3,163,752 0.3%

BR LP 2050 Index Q $6,182,034 0.5%

BR LP Ret Indx Q $93,161,850 7.4%

Large Cap $318,732,024 25.2%

Large Company Growth Stock Option - OSGP $103,073,672 8.2%

Large Company Value Stock Option - OSGP $95,996,184 7.6%

Total Market Equity Index Option - OSGP $119,662,169 9.5%

Small-Mid Cap $171,331,168 13.6%

Small-Mid Size Company Stock Option - OSGP $171,331,168 13.6%

International $90,840,530 7.2%

International Stock Option - OSGP $90,840,530 7.2%

Market Value Actual

Self Directed $2,143,159 0.2%

Self-Directed Option $2,143,159 0.2%

Oregon Savings Growth Plan $1,263,165,232 100.0%

Manager Diversification as of March 31, 2012

1


0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.1 0.2

9.6 9.7 9.3 8.2 8.8 8.8 8.5 8.4 7.3 6.9 7.2

12.0 12.2 13.0 12.7 12.9 14.1 14.8 14.6 12.3 12.9 13.6

23.6 24.2 24.7 23.2 23.7 24.5 25.4 25.0 23.0 24.0 25.2

20.5 21.3 21.9 22.6 22.7 23.3 23.9 24.6 25.5 25.3 25.4

7.5 7.6 7.7 8.5 8.7 7.9 7.2 7.3 8.6 8.7 8.3

19.4 18.1 17.2 18.2 17.1 15.8 15.1 15.0 17.4 16.7 15.3

6.9 6.2 5.7 5.9 5.4 4.9 4.5 4.4 5.1 4.7 4.2

0.5 0.6 0.6 0.7 0.6 0.6 0.6 0.6 0.7 0.6 0.6

3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q

09 09 10 10 10 10 11 11 11 11 12

Total Assets (Millions $) 964.8 999.5 1,044 984.9 1,071 1,146 1,197 1,204 1,092 1,169 1,263

Total Assets: $1,263,165,232Historical Asset Allocation as of March 31, 2012

3


Product Name Report Short Name TickerLoan Fund Loan Fund N/A

Short Term Fixed Option - OSGP Short Term Fixed Option N/A

Stable Value Option - OSGP Stable Value Option - OSGP N/A

Intermediate Bond Option - OSGP Intermediate Bond Option - OSGP N/A

BlackRock LP 2015 Index Q BR LP 2015 Index Q N/A








BlackRock LP Retirement Index Q BR LP Ret Indx Q N/A

Large Company Growth Stock Option - OSGP Large Company Growth Stock Option - OSGP N/A

Large Company Value Stock Option - OSGP Large Company Value Stock Option - OSGP N/A

Total Market Equity Index Option - OSGP Total Market Equity Index Option - OSGP N/A

Small-Mid Size Company Stock Option - OSGP Small-Mid Size Company Stock Option - OSGP N/A

International Stock Option - OSGP International Stock Option - OSGP N/A

Self-Directed Option Self-Directed Option N/A

Fund Manager Review Key

Symbol Perf RankingStyle/Cap Consist Expense Ratio

Manager Tenure

25th Percentile

and BetterConsistent

0.1% or more

below averagegreater than 36 months

26th to 50th

PercentileN/A

.01% to .09%

below average25 - 36 months

51st to 75th

PercentileNot Consistent

.01% to .09%

above average13 - 24 months

76th Percentile

and BelowN/A

0.1% or more

above average12 months or less

Performance Reporting Notes:

There are no performance notes at this time.

Performance Measurement Notes as of March 31, 2012

4


Performance Rankings Style/Cap Expense Avg. Mgmt

Qtr. End 1 Yr. 3 Yrs. 5 Yrs. 10 Yrs. Consist. Ratio Tenure

Fixed

Intermediate Bond Option - OSGP N/A 1Q12 N/A

N/A

N/A

4Q11

Balanced

BR LP 2015 Index Q N/A 1Q12 N/A N/A N/A

N/A

N/A

4Q11 N/A N/A


N/A

N/A

4Q11 N/A N/A


N/A

N/A

4Q11 N/A N/A


N/A

N/A

4Q11 N/A N/A


N/A

N/A

4Q11 N/A N/A


N/A

N/A

4Q11 N/A N/A


N/A

N/A

4Q11 N/A N/A


N/A

N/A

4Q11 N/A N/A

BR LP Ret Indx Q N/A 1Q12 N/A N/A N/A

N/A

N/A

4Q11 N/A N/A

n Performance results are net of investment advisory fees and/or expense ratio.

n Percentile rankings are based on the applicable Morningstar peer group universe assigned.

Fund Manager Review Summary as of March 31, 2012

5


Performance Rankings Style/Cap Expense Avg. Mgmt

Qtr. End 1 Yr. 3 Yrs. 5 Yrs. 10 Yrs. Consist. Ratio Tenure

Large Cap

Large Company Growth Stock Option - OSGP N/A 1Q12 N/A

N/A

N/A

4Q11

Large Company Value Stock Option - OSGP N/A 1Q12 N/A

N/A

N/A

4Q11

Total Market Equity Index Option - OSGP N/A 1Q12 N/A

N/A

N/A

4Q11

Small-Mid Cap

Small-Mid Size Company Stock Option - OSGP N/A 1Q12 N/A

N/A

N/A

4Q11

International

International Stock Option - OSGP N/A 1Q12 N/A

N/A

N/A

4Q11

n Performance results are net of investment advisory fees and/or expense ratio.


Fund Manager Review Summary as of March 31, 2012

6


Product Curr Qtr YTD 1 Year 3 Year 5 Year 7 Year 10 Year

Short Term Fixed Option - N/A 0.0 0.0 0.0 0.1 1.3 2.2 1.9

T-Bills 0.0 0.0 0.0 0.1 1.1 2.0 1.8

Money Market Taxable 0.0 0.0 0.0 0.0 1.2 2.0 1.6

Peer Group Rank 18 18 17 13 27 17 11

Stable Value Option - OSGP - N/A 0.4 0.4 1.7 1.9 2.9 3.3 3.6

T-Bills 0.0 0.0 0.0 0.1 1.1 2.0 1.8

eA Stable Value Median 0.7 0.7 2.8 3.2 3.8 4.0 4.3

Intermediate Bond Option - OSGP - N/A 1.3 1.3 8.1 10.1 6.6 6.1 6.2

BC Aggregate Bond Index 0.3 0.3 7.7 6.8 6.2 5.7 5.8

Intermediate-Term Bond 1.5 1.5 6.8 9.4 5.9 5.4 5.5

Peer Group Rank 60 60 14 42 27 22 21

BR LP 2015 Index Q - N/A 5.4 5.4 5.0 15.5 - - -

BlackRock 2015 Index 5.4 5.4 5.1 15.6 3.6 5.6 5.7

Target Date 2011-2015 7.0 7.0 3.4 16.5 2.1 4.7 -

Peer Group Rank 81 81 13 69 - - -

BR LP 2020 Index Q - N/A 6.6 6.6 4.3 17.0 - - -

BlackRock 2020 Index 6.6 6.6 4.5 17.1 3.1 5.5 5.6

Target Date 2016-2020 7.4 7.4 3.2 17.7 2.0 4.3 4.4

Peer Group Rank 77 77 29 59 - - -

n Performance results are NET of Management Fees and/or Expense Ratios and reflect the impact of dividends and earnings. Returns reflect generic fund performance as reported by the fund managers. Actual results

may vary due to cash flows and/or other account specific activity. Past performance is not indicative of future returns.


Trailing Period Performance and Relative Rank as of March 31, 2012

7



BR LP 2025 Index Q - N/A 7.6 7.6 3.9 18.4 - - -

BlackRock 2025 Index 7.6 7.6 3.9 18.5 2.6 5.3 5.5

Target Date 2021-2025 9.0 9.0 2.8 19.0 1.4 4.5 -

Peer Group Rank 87 87 24 63 - - -

BR LP 2030 Index Q - N/A 8.5 8.5 3.4 19.5 - - -

BlackRock 2030 Index 8.5 8.5 3.5 19.6 2.2 5.2 5.4

Target Date 2026-2030 9.8 9.8 2.5 19.7 1.0 3.9 4.4

Peer Group Rank 81 81 25 51 - - -

BR LP 2035 Index Q - N/A 9.3 9.3 2.9 20.6 - - -

BlackRock 2035 Index 9.2 9.2 3.0 20.7 1.7 5.1 5.3

Target Date 2031-2035 10.7 10.7 2.3 20.2 1.0 4.1 -

Peer Group Rank 88 88 30 40 - - -

BR LP 2040 Index Q - N/A 9.9 9.9 2.5 21.5 - - -

BlackRock 2040 Index 10.0 10.0 2.5 21.7 1.3 4.9 5.1

Target Date 2036-2040 11.3 11.3 2.1 20.6 0.7 3.8 4.3

Peer Group Rank 85 85 41 30 - - -

BR LP 2045 Index Q - N/A 10.6 10.6 2.1 22.5 - - -

BlackRock 2045 Index 10.6 10.6 2.1 22.6 0.9 4.8 5.0

Target Date 2041-2045 11.5 11.5 2.0 21.0 0.7 4.3 -

Peer Group Rank 81 81 48 9 - - -

BR LP 2050 Index Q - N/A 11.3 11.3 1.7 23.3 - - -

BlackRock 2050 Index 11.3 11.3 1.7 23.4 1.1 5.1 5.2

Target Date 2050+ 11.7 11.7 1.9 21.1 0.5 - -

Peer Group Rank 64 64 56 7 - - -





8



BR LP Ret Indx Q - N/A 4.5 4.5 5.6 13.3 - - -

BlackRock Retirement Index 4.5 4.5 5.9 13.5 4.8 5.8 6.0

Retirement Income 4.8 4.8 3.9 13.3 3.7 4.4 4.3

Peer Group Rank 59 59 20 50 - - -

Large Company Growth Stock Option - OSGP - N/A 15.4 15.4 10.8 24.8 4.0 5.7 4.0

S&P 500 Index 12.6 12.6 8.5 23.4 2.0 4.7 4.1

Russell 1000 Growth Index 14.7 14.7 11.0 25.3 5.1 6.5 4.3

Large Growth 15.8 15.8 7.2 22.7 3.4 5.3 4.0

Peer Group Rank 57 57 19 24 40 41 50

Large Company Value Stock Option - OSGP - N/A 12.3 12.3 4.1 22.5 (0.9) 3.4 4.5

S&P 500 Index 12.6 12.6 8.5 23.4 2.0 4.7 4.1

Russell 1000 Value Index 11.1 11.1 4.8 22.8 (0.8) 3.5 4.6

Large Value 11.2 11.2 4.1 21.1 (0.1) 3.5 4.2

Peer Group Rank 34 34 51 27 65 53 41

Total Market Equity Index Option - OSGP - N/A 12.8 12.8 7.2 24.3 2.2 5.1 4.6

S&P 500 Index 12.6 12.6 8.5 23.4 2.0 4.7 4.1

Russell 3000 Index 12.9 12.9 7.2 24.3 2.2 5.1 4.7

Large Blend 12.5 12.5 5.9 21.9 1.4 4.2 3.8

Peer Group Rank 40 40 40 12 25 22 25

Small-Mid Size Company Stock Option - OSGP - N/A 13.6 13.6 1.8 28.4 4.0 7.0 8.0

Russell 2500 Index 13.0 13.0 1.3 28.4 3.0 6.5 7.5

Small Blend 12.2 12.2 0.1 26.9 2.1 5.5 6.5

Peer Group Rank 22 22 31 36 16 22 21





9



International Stock Option - OSGP - N/A 13.3 13.3 (5.0) 18.3 (2.7) 4.1 6.1

MSCI ACWI ex-US 11.3 11.3 (6.7) 19.6 (1.1) 5.5 7.7

MSCI EAFE Index 11.0 11.0 (5.3) 17.7 (3.0) 3.7 6.2

Foreign Large Blend 11.9 11.9 (6.5) 17.0 (3.0) 3.4 5.4

Peer Group Rank 17 17 28 33 46 34 29





10

LifePath® Index 2015 Fund Q...........................................................................................................................................................................................................................................................................................................................................Benchmark

LifePath® Index 2015 CustomBenchmark

Morningstar Category

Target Date 2011-2015Overall Morningstar Rating™ Morningstar Return Morningstar Risk

QQQQ Above Average LowSee disclosure for details.

Investment InformationInvestment Strategy

By investing in a single LifePath® Index Fund you maycapture diversified investment opportunities without havingto worry about the day-to-day management of your money.Each fund's objective is to maximize total return with a risklevel that may be appropriate for the fund's particulartimeframe.

The LifePath® Index 2015 Fund is designed forparticipants who expect to retire between 2013 and 2017.The LifePath® Index 2015 Fund will reach its mostconservative risk level at the end of 2014, at which time itwill be blended into the LifePath® Index Retirement Fund,which is designed to provide those who are withdrawingmoney from their plan with an appropriate blend of incomeand inflation protection. It does this by holding a mix ofstocks (approximately 38%) and fixed income instruments.

Fees and Expenses as of 03-31-12

Investment Management Fee 0.10%Administrative Fee 0.02%

Operations and Management

Product Inception Date 01-02-08Strategy Inception Date 07-05-06Total Fund Assets ($mil) 608.01Investment Manager BlackRock Institutional Trust

Company NA

Volatility Analysis

Low Moderate High

Investment

Category

In the past, this investment has shown a relatively smallrange of price fluctuations relative to other investments.Based on this measure, currently more than two-thirds of allinvestments have shown higher levels of risk. Consequently,this investment may appeal to investors looking for aconservative investment strategy.

NotesThe fund's custom benchmark is a representation of theperformance of the underlying funds' benchmarks accordingto the LifePath® model weights. The index weightingsincluded in the custom benchmarks are adjusted quarterly toreflect the funds' asset allocation shifts over time. Thefollowing indices may be used in such calculation: S&P 500Index, The Dow Jones U.S. Completion Total Stock MarketIndex, MSCI ACWI ex-US IMI Index, Barclays Capital U.S.Aggregate Bond Index, Barclays Capital U.S. TIPS Index,FTSE EPRA/NAREIT Developed Index, Dow Jones-UBSCommodity Index, and the Citigroup 3 Month T-Bill Index.

Allocation of Stocks and BondsAllocation

BondsU.S. StocksNon-U.S. StocksOther

100%

0

80

60

40

20

Years Until Retirement45 40 30 20 10 0 -5

Portfolio AnalysisTop 10 Holdings as of 03-31-12 % Assets

US Debt Index Fund E 47.44Equity Index Fund E 21.77BlackRock MSCI ACWI ex-US IMI Index Fund E 11.88US TIPS Fund E 7.80Extended Equity Market Fd E 6.21...........................................................................................................DJ-UBS Commodity Daily Fd E 3.32Developed Real Estate Index Fd E 1.58

Morningstar Super Sectors as of 03-31-12 % Fund

� Cyclical 36.77

� Sensitive 40.95

� Defensive 22.28

Morningstar F-I Sectors as of 03-31-12 % Fund % Category

� Government 47.39 27.98� Corporate 16.63 22.11� Securitized 24.66 17.76� Municipal 0.72 0.57 Cash & Equivalents 10.60 22.70 Other 0.00 8.88

Performance

10

20

30

40

0

-10

-20

-30

Total Return%

as of 03-31-12InvestmentBenchmark

Average annual, if greaterthan 1 year

Since Inception 10 Year 5 Year 3 Year 1 Year YTD

5.15 . 3.56 15.50 4.99 5.38 Fund Return %. . 3.62 15.55 5.12 5.40 Benchmark Return %................................................................................................................................................................................................................. . QQQQQ QQQ . . Morningstar Rating™

The LifePath Index 2015 Fund Q returns are net of an annual management fee of 0.10%. The returns are net of the fund's

administrative costs, including, but not limited to accounting, custody, and audit fees, and capped at 0.02% per year to limit

the impact on fund performance.

The fund invests all of its assets in the respective LifePath Fund F series of the same year. Returns prior to 01/02/08 are

those of the LifePath Index 2015 Fund F (inception date of 07/05/06). The LifePath Index Fund F returns are gross of an

annual management fee. It holds units of the following underlying funds: Equity Index Fund E, MSCI ACWI ex-U.S. IMI

Index Fund E, Extended Equity Market Fund E, U.S. Debt Index Fund E, U.S. Treasury Inflation Protected Securities Fund E,

Developed Real Estate Index Fund E, Dow Jones-UBS Commodity Index Daily Fund E, and the Money Market Fund. All

income is reinvested in the portfolios. Past performance does not guarantee future results.

Growth of $10,000 as of 03-31-12 Investment $13,196 Benchmark $13,228

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 03 - 12

25

20

15

5

0

10K

Release Date: 03-31-2012

641005 ©2012 Morningstar, Inc., Morningstar Investment Profiles™ 312-696-6000. All rights reserved. The information contained herein: (1) is proprietary toMorningstar and/or its content providers; (2) may not be copied or distributed and (3) is not warranted to be accurate, complete or timely. NeitherMorningstar nor its content providers are responsible for any damages or losses arising from any use of information. Past performance is noguarantee of future performance. Visit our investment website at www.morningstar.com.

Page 1 of 4

11





QQQQ Above Average Below AverageSee disclosure for details.







Product Inception Date 01-02-08Strategy Inception Date 08-01-05Total Fund Assets ($mil) 1,037.60Investment Manager BlackRock Institutional Trust

Company NA

Volatility Analysis

Low Moderate High

Investment

Category





100%

0

80

60

40

20



US Debt Index Fund E 39.11Equity Index Fund E 26.41BlackRock MSCI ACWI ex-US IMI Index Fund E 14.69Extended Equity Market Fd E 7.03US TIPS Fund E 6.14...........................................................................................................DJ-UBS Commodity Daily Fd E 3.43Developed Real Estate Index Fd E 3.21


� Cyclical 38.28

� Sensitive 39.96

� Defensive 21.77



Performance

10

20

30

40

0

-10

-20

-30

Total Return%








The fund invests all of its assets in the respective LifePath Index Fund F series of the same year. Returns prior to

01/02/08 are those of the LifePath Index 2020 Fund F (inception date of 08/01/05). The LifePath Index Fund F returns are

gross of an annual management fee. It holds units of the following underlying funds: Equity Index Fund E, MSCI ACWI

ex-U.S. IMI Index Fund E, Extended Equity Market Fund E, U.S. Debt Index Fund E, U.S. Treasury Inflation Protected

Securities Fund E, Developed Real Estate Index Fund E, Dow Jones-UBS Commodity Index Daily Fund E, and the Money

Market Fund. All income is reinvested in the portfolios. Past performance does not guarantee future results.


2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 03 - 12

25

20

15

5

0

10K



Page 1 of 4

12





QQQQ Above Average LowSee disclosure for details.








Company NA

Volatility Analysis

Low Moderate High

Investment

Category

In the past, this investment has shown a relatively moderaterange of price fluctuations relative to other investments. Thisinvestment may experience larger or smaller price declinesor price increases depending on market conditions. Some ofthis risk may be offset by owning other investments withdifferent portfolio makeups or investment strategies.




100%

0

80

60

40

20



US Debt Index Fund E 32.18Equity Index Fund E 30.28BlackRock MSCI ACWI ex-US IMI Index Fund E 17.25Extended Equity Market Fd E 7.37US TIPS Fund E 4.73...........................................................................................................Developed Real Estate Index Fd E 4.42DJ-UBS Commodity Daily Fd E 3.77


� Cyclical 39.01

� Sensitive 39.44

� Defensive 21.54



Performance

10

20

30

40

0

-10

-20

-30

Total Return%















2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 03 - 12

25

20

15

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0

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Page 1 of 4

13





QQQQQ Above Average Below AverageSee disclosure for details.








Company NA

Volatility Analysis

Low Moderate High

Investment

Category





100%

0

80

60

40

20



Equity Index Fund E 33.71US Debt Index Fund E 26.11BlackRock MSCI ACWI ex-US IMI Index Fund E 19.29Extended Equity Market Fd E 7.82Developed Real Estate Index Fd E 5.72...........................................................................................................DJ-UBS Commodity Daily Fd E 3.76US TIPS Fund E 3.59


� Cyclical 39.70

� Sensitive 38.98

� Defensive 21.31



Performance

10

20

30

40

0

-10

-20

-30

Total Return%




4.73 . 2.17 19.55 3.37 8.49 Fund Return %. . 2.17 19.63 3.44 8.45 Benchmark Return %................................................................................................................................................................................................................. . QQQQQ QQQQ . . Morningstar Rating™











2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 03 - 12

25

20

15

5

0

10K



Page 1 of 4

14





QQQQ Average Below AverageSee disclosure for details.








Company NA

Volatility Analysis

Low Moderate High

Investment

Category





100%

0

80

60

40

20



Equity Index Fund E 36.77BlackRock MSCI ACWI ex-US IMI Index Fund E 21.27US Debt Index Fund E 20.69Extended Equity Market Fd E 8.23Developed Real Estate Index Fd E 6.78...........................................................................................................DJ-UBS Commodity Daily Fd E 3.53US TIPS Fund E 2.74


� Cyclical 40.14

� Sensitive 38.70

� Defensive 21.16



Performance

10

20

30

40

0

-10

-20

-30

Total Return%




3.95 . 1.74 20.62 2.93 9.35 Fund Return %. . 1.74 20.70 2.97 9.24 Benchmark Return %................................................................................................................................................................................................................. . QQQQ QQQQ . . Morningstar Rating™











2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 03 - 12

25

20

15

5

0

10K



Page 1 of 4

15





QQQ Average Below AverageSee disclosure for details.








Company NA

Volatility Analysis

Low Moderate High

Investment

Category





100%

0

80

60

40

20



Equity Index Fund E 39.60BlackRock MSCI ACWI ex-US IMI Index Fund E 23.02US Debt Index Fund E 15.81Extended Equity Market Fd E 8.65Developed Real Estate Index Fd E 7.72...........................................................................................................DJ-UBS Commodity Daily Fd E 3.76US TIPS Fund E 1.44


� Cyclical 40.44

� Sensitive 38.50

� Defensive 21.06



Performance

10

20

30

40

0

-10

-20

-30

Total Return%




4.34 . 1.33 21.53 2.48 9.88 Fund Return %. . 1.31 21.68 2.52 9.97 Benchmark Return %................................................................................................................................................................................................................. . QQQ QQQQ . . Morningstar Rating™











2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 03 - 12

25

20

15

5

0

10K



Page 1 of 4

16





QQQ Average AverageSee disclosure for details.








Company NA

Volatility Analysis

Low Moderate High

Investment

Category





100%

0

80

60

40

20



Equity Index Fund E 42.22BlackRock MSCI ACWI ex-US IMI Index Fund E 24.79US Debt Index Fund E 11.85Extended Equity Market Fd E 9.08Developed Real Estate Index Fd E 8.41...........................................................................................................DJ-UBS Commodity Daily Fd E 3.65


� Cyclical 40.56

� Sensitive 38.41

� Defensive 21.02



Performance

10

20

30

40

0

-10

-20

-30

Total Return%




3.37 . 0.96 22.56 2.11 10.65 Fund Return %. . 0.93 22.57 2.07 10.65 Benchmark Return %................................................................................................................................................................................................................. . QQQ QQQQ . . Morningstar Rating™











2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 03 - 12

25

20

15

5

0

10K



Page 1 of 4

17




Target Date 2050+Overall Morningstar Rating™ Morningstar Return Morningstar Risk

QQQQQ High Above AverageSee disclosure for details.








Company NA

Volatility Analysis

Low Moderate High

Investment

Category





100%

0

80

60

40

20



Equity Index Fund E 44.59BlackRock MSCI ACWI ex-US IMI Index Fund E 26.24Extended Equity Market Fd E 9.50Developed Real Estate Index Fd E 9.31US Debt Index Fund E 6.58...........................................................................................................DJ-UBS Commodity Daily Fd E 3.77


� Cyclical 40.85

� Sensitive 38.24

� Defensive 20.92



Performance

10

20

30

40

0

-10

-20

-30

Total Return%




-0.49 . . 23.30 1.70 11.28 Fund Return %. . . 23.42 1.67 11.29 Benchmark Return %................................................................................................................................................................................................................. . . QQQQQ . . Morningstar Rating™











2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 03 - 12

25

20

15

5

0

10K



Page 1 of 4

18

LifePath® Index Retirement Fund Q...........................................................................................................................................................................................................................................................................................................................................Benchmark

LifePath® Index RetirementCustom Benchmark



QQQQ Above Average Below AverageSee disclosure for details.


The LifePath® Index Retirement Fund is designed forparticipants who are close to, or already retired. Thisportfolio is designed to provide those who are withdrawingmoney from their plan with an appropriate blend of incomeand inflation protection.

By investing in a LifePath® Index Fund you may capturediversified investment opportunities without having to worryabout the day-to-day management of your money.

Rather than trying to mix and manage a collection ofdifferent funds, you only need to select one LifePath® IndexFund to access a well-diversified investment mix for aparticular target year allocation.





Company NA

Volatility Analysis

Low Moderate High

Investment

Category





100%

0

80

60

40

20



US Debt Index Fund E 53.13Equity Index Fund E 18.52BlackRock MSCI ACWI ex-US IMI Index Fund E 9.36US TIPS Fund E 9.11Extended Equity Market Fd E 5.76...........................................................................................................DJ-UBS Commodity Daily Fd E 3.77Developed Real Estate Index Fd E 0.35


� Cyclical 34.93

� Sensitive 42.17

� Defensive 22.89



Performance

5

10

15

20

0

-5

-10

-15

Total Return%




5.50 . 4.70 13.34 5.66 4.46 Fund Return %. . 4.75 13.46 5.89 4.50 Benchmark Return %................................................................................................................................................................................................................. . QQQQQ QQ . . Morningstar Rating™

The LifePath Index Retirement Fund Q returns are net of an annual management fee of 0.10%. The returns are net of the

fund's administrative costs, including, but not limited to accounting, custody, and audit fees, and capped at 0.02% per year

to limit the impact on fund performance.


01/02/08 are those of the LifePath Index Retirement Fund F (inception date of 08/01/05). The LifePath Index Fund F returns

are gross of an annual management fee. It holds units of the following underlying funds: Equity Index Fund E, MSCI ACWI





2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 03 - 12

25

20

15

5

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10K



Page 1 of 4

19

This report was prepared by Arnerich Massena, Inc. using some or all of the following resources: data from plan trustees and custodians and their statements; returns and product or account information as reported by mutual funds, investment managers, and by third party services; and returns and valuations from outside sources as directed by the client.

Portions of the report were also prepared using secondary data from Mellon Analytical Services LLC, and Morningstar, Inc. Arnerich Massena Inc., Morningstar Inc., and Mellon Analytical Services LLC do not assume responsibility for the accuracy of these valuations or return methodologies, though reasonable care has been taken to assure the accuracy of the information provided by the software application.

This report was produced for performance measurement and informational purposes only. Plan Sponsors and/or participants should refer to account statements for cost basis or tax related information. In certain cases, estimates may have been used dependent on the timeliness and availability of information from the underlying managers.

Care has been taken in the preparation of this report and review of the information provided. However, Arnerich Massena, Inc. makes no warranties regarding, and disclaims responsibility for, the accuracy or completeness of such information.

Disclaimer of Warranties and Limitation of Liability

Symbol Performance Style Consistency Expense Ratio Tenure

Above Expectations25th Percentile and Better No change in last 36 months .01% or more below average Consistent

Meeting Expectations26th to 50th Percentile Change in last 25-36 months .01% to .09% below average N/A

Marginal51st to 75th Percentile Change in last 13-24 months .01% to .09% above average Not Consistent

Below Expectations76th Percentile and Below Change in last 12 months .01% or more above average N/A

Fund Manager Review Key

20

Since the advent of employer-sponsored retirement plans, a key measure of success has been the participation rate. Employers and providers alike have focused attention and effort on increasing participation and when that statistic improves, everyone feels a strong sense of satisfaction. However, as defined contribution plans become the primary source of retirement income for Americans, the industry is realizing that participation is not neces-sarily enough.

As Baby Boomers begin to retire on inadequate savings, the industry is waking up to the fact that not only do we need to encourage people to participate in their retirement savings plans, but that we also need to help them to save enough and develop a retirement income stream. The industry is shifting focus, and employers are begin-ning to ask, “Are my employees going to be able to retire securely?” We need to look at a new measure of success for retirement plans: retirement outcomes.

This shift requires that we take a broader perspective. In addi-tion to paying attention to participation rates, employers will need to gauge the state of deferral rates, company contribu-tions, and income solutions. Even the government is getting in on it, with a renewed focus on annuities and other retirement income options. Here are a few areas to begin exploring:

COMMUNICATIONSEnrollment meetings may no longer be enough. It’s time to let participants know how they are doing toward meeting their retirement income goals, and to focus on what they need to do to get there. Clear projections that plainly state their progress and, importantly, any gaps can help guide them in their planning. General financial planning education may also help participants better understand where retirement plan-ning fits into their overall budget.

RETIREMENT INCOME Plan sponsors are beginning to explore retirement income solutions, from annuity options to guaranteed minimum

The Department of Labor (DOL) may have delayed fee disclosure, but it still draws nigh. The good news is that the DOL may have simplified the process slightly by pro-viding guidance on electronic distribution.

Quarterly statements can adhere to old safe harbor rules that allow them to be provided via a secure website, provided that an annual notice of electronic avail-ability is distributed, which includes a statement letting participants know that

How Do You Measure Success?INDUSTRY TRENDS

Continued on page 4

Electronic Guidelines for Fee Disclosure

RULES AND REGULATIONS

INSIDE: FIDUCIARY AND INVESTMENT INSIGHT • RULES AND REGULATIONS

For plan sponsor use only.

Continued on page 4

DC Solutions™

Retirement Plan Resource

SPRING 2012

21


Employer matching contributions are making a comeback. After the financial crisis of 2008, 11.2 percent of plans suspended their company match, but only 2.1 percent of employers were continuing that suspension in 2010 (PSCA). Employers provide matching contributions for a variety of reasons, such as increasing participation or improving retirement outcomes, but one primary motivation for establishing a match is to attain safe harbor from ADP and ACP testing. These tests, the Actual Deferral Percentage (ADP) and Actual Contribution Percent-age (ACP), are required by the IRS for qualified plans annually to ensure that all employees are benefitting equally from the plan. In other words, they help make sure that the plan does not discriminate in favor of highly compensated employees.

In order for your match to provide safe harbor, however, you must follow specific rules about the structure and amount of the match.

How to Build a Safe Harbor Match

FIDUCIARY AND INVESTMENT INSIGHT

ADP Safe HarborIn order to attain safe harbor from ADP testing, you can either make a non-elective contribution equal to at least 3% of compensation to all eligible employees, or you can provide employer matching contributions that meet the following requirements:

• The safe harbor portion of any matching contributions must be immediately 100% vested and be ineligible for hardship distributions and in-service withdrawals prior to age 59 ½.

• A basic match must match 100% of employee salary deferral up to 3% of compensation AND 50% of employee deferral from 3% to 5% of compensation. Employers may use a different formula or provide a higher match, but it must be at least equal to the basic formula, and the rate cannot increase as an employee’s rate of elective deferrals increases (for instance, you could match 150% of elective deferrals up to 3%, but not 50% of deferrals up to 6% and 100% for elective deferrals greater than 6%).

ACP Safe HarborTo meet ACP safe harbor requirements, you must meet the following additional requirements:

• Matching contributions cannot be based on employee elective deferrals in excess of 6%.

• Other discretionary matching contributions cannot exceed 4% of an employee’s compensation.

To attain safe harbor for automatic enrollment, keep in mind that you must provide for automatic escalation of employee deferrals from a minimum of 3% in the first year to 4% in the second year, 5% in the third year, and 6% for all later years up to a maximum of 10% in any given year.

Now, more than 93 percent of companies make some sort of contribution to employees’ retirement savings, with nearly 40 percent using a matching formula. The benefits of matching contributions include improving participation rates, encouraging higher deferral rates, boosting employee satisfaction, decreasing employee turnover, and improving retirement outcomes. A match can be a valuable component of your plan, with or without the addition of safe harbor.

Sources:

Profit Sharing/401(k) Council of America (PSCA); “53rd Annual Survey Reflecting 2009 Plan Experience” 2010

Profit Sharing/401(k) Council of America (PSCA); “54th Annual Survey Reflecting 2010 Plan Experience” 2011

Lincoln Financial Group, “Detailed information on safe harbor contributions to 401(k) plans,” May, 2009

22

For plan sponsors who adopt target-date funds, one of the biggest decisions is whether to select an off-the-shelf fund family or to create custom target-date funds using the plan’s investment options as the underlying funds. There are advantages in either case, and plan sponsors should carefully consider their options before making a decision.


Custom vs. Off-the-Shelf Target-Date Funds

FIDUCIARY AND INVESTMENT INSIGHT

Custom target-date fundsOne of the greatest benefits of creating custom funds is the ability to use the plan’s existing underlying funds in the plan. It is rare for a fund family to sustain best-in-class funds across all asset classes, particularly as new asset classes are incorporated into target-date funds. Custom funds allow the Commit-tee greater freedom to select those funds they deem most appropriate to the plan. This freedom may also make it easier for plan sponsors to control the costs of the funds, using index funds where appropriate. The Committee is also able to adjust allocations to specifi-cally meet the needs of plan participants. However, there are some issues plan sponsors face that they should be aware of before taking this route:

Fiduciary responsibility: Who is fiduciarily respon-sible for creating and maintaining the glide paths of the funds? This is no small task, and committees should be prepared to either take responsibility or hire an advisor who can do so (although committees will never be able to fully relinquish their fiduciary responsibility, even when working with an advisor).

Administration: There are likely to be additional costs, such as unitization or valuation, to adminis-tering custom-created target-date funds.

Communication: Who is going to create the materi-als necessary to communicate to participants about the target-date funds? Not only will you want to be in compliance with the DOL regulations, but you’ll want to help participants understand their options and how best to use them.

Plan sponsors who are exploring custom target-date funds need to ensure that they can accommodate the increased fiduciary responsibility and potential additional costs.

Off-the-shelf target-date fundsOff-the-shelf target-date funds don’t offer the same range of options as custom funds, but they do provide ease of use. Fewer decisions need to be made. Plan sponsors can leverage the marketing collateral of the fund company rather than having to create custom educational materials. Keep in mind, though, that not all target-date funds are created equal. Because there is so much variability, plan sponsors will want to look closely at all of their options before selecting off-the-shelf target-date funds. With off-the-shelf target-date funds, plan sponsors should pay attention to:

Glide path: Are the glide path allocations appropriate for the way you intend your par-ticipants to use them? Are the equity allocations conservative/aggressive enough to fit your participants’ needs?

Fees: Are the fees reasonable?

Communication: Are communications straightforward and easy to understand? Are they adequate for your participants, and do they meet all regulatory requirements? Is there clarity regarding the purpose and construction of the funds?

Plan sponsors who have off-the-shelf target-date funds or are considering off-the-shelf target-date funds should make sure that they take the time to understand the fund family they select, and how it fits in terms of glide path, equity exposure, asset class diversification, and cost.

23

withdrawal benefit options. Even if you don’t choose to offer an income solution, there are other ways to draw attention to the ultimate goal of the plan. You can use retirement income projections and pre-retirement educational guid-ance to help participants understand how close (or far) they are from their goals.

EMPLOYER CONTRIBUTIONSA match not only adds to employee savings, but can also encourage or discourage employee deferrals. Consider the difference between a dollar-for-dollar match on the first 5% of salary saved versus a $0.50-per-dollar match on the first 10% of salary saved. With the first, participants will most likely defer 5% of their salary in order to earn the match. In the second scenario, partici-pants may not save the entire 10%, but at least they may use the 10% deferral rate as a goal.

PLAN REVIEW In evaluating the plan, employers may want to include retirement outcomes as a factor in addition to participation, asset allocation, average deferral, etc. There is no easy way to incorporate this, but projections can help provide an idea of participants’ progress toward a secure retirement.

A successful retirement plan is a plan that helps people retire successfully. Employers who make retirement outcomes their metric of measure-ment will be evaluating their plan against its real objective.

How Do You Measure Success? (continued)

© 2012 Arnerich Massena Education, Inc., 2045 NE Martin Luther King Jr. Blvd., Portland, OR 97212 • arnerichmassenaeducation.com All rights reserved. This newsletter is an educational tool; it does not advise or recommend specific investments or investment strategies. • Editor: Ximena Spicer • Contributors: Tony Arnerich, Kristina Barton, Sarah Beaubien, Liz Brown, Scott Dumbar, Vincent Galindo, Karl Hausafus, Jake O’Shaughnessy, Jillian Perkins, and Molly Thurston Parker

they can request a paper copy of their statement free of charge.

The initial fee disclosure communication (and annual notices), however, will likely be distrib-uted separately from quarterly statements and must adhere to different guidelines. The new guidelines state that electronic distribution is allowed under the following circumstances:

1. Distributions may be made electronically to participants who either have regular access to their employer’s electronic information system as a regular part of their job, or who have provided written consent to receiving information electronically;

2. Disclosures may be provided via a secure, continuous-access website if the follow-ing conditions are met:

Participants must provide an email address in response to an initial electronic notice that informs them of the upcom-ing electronic disclosures and how to access them. The notice must state that providing an email address is voluntary and will serve as permission to provide disclosures electronically, as well as let-ting participants know that they have the right to request, free of charge, disclosure information on paper. Additionally, it must provide the procedure for updating their email address.

For the full technical release (Technical Release 2011-03R), visit http://www.dol.gov/ebsa/newsroom/tr11-03r.html.

Electronic Guidelines (continued)


* OR *

24

Arnerich Massena, Inc. ~ Quarter Ending March 31, 2012

Federal Funds Rate (Interest Rates) CPI-U (Inflation)

-8.0%-6.0%-4.0%-2.0%0.0%2.0%4.0%6.0%8.0%

4Q

06

2Q

07

4Q

07

2Q

08

4Q

08

2Q

09

4Q

09

2Q

10

4Q

10

2Q

11

4Q

11

Real GDP- Seasonally

adjusted Trendline (least squares fit)

Commentary

QTR YTD 1 3 5 10

BC Aggregate Bond 0.3% 0.3% 7.7% 6.8% 6.2% 5.8%

BC 1-3 Yr Gov't/Cred 0.4% 0.4% 1.8% 2.7% 3.8% 3.7%

90 Day T-Bills 0.0% 0.0% 0.0% 0.1% 1.1% 1.8%

BC Global Aggregate 0.9% 0.9% 5.3% 7.5% 6.4% 7.3%

Trailing Return (years)Performance

QTR YTD 1 3 5 10

S&P 500 12.6% 12.6% 8.5% 23.4% 2.0% 4.1%

Russell Midcap 12.9% 12.9% 3.3% 29.1% 3.0% 7.9%

Russell 2000 12.4% 12.4% -0.2% 26.9% 2.1% 6.4%

NASDAQ Composite 19.0% 19.0% 12.3% 27.7% 6.0% 6.1%

DJ-UBS Commodity 0.9% 0.9% -16.3% 9.0% -2.8% 5.5%

GSCI Commodity 5.9% 5.9% -6.2% 13.2% -2.7% 4.8%


QTR YTD 1 3 5 10

MSCI ACWI 12.0% 12.0% -0.2% 21.4% 0.3% 5.9%

MSCI ACWI ex-US 11.3% 11.3% -6.7% 19.6% -1.1% 7.7%

MSCI Europe 10.8% 10.8% -6.9% 18.3% -3.4% 6.0%

MSCI Pacific 11.3% 11.3% -1.9% 16.7% -2.2% 6.7%

MSCI EMF 14.1% 14.1% -8.5% 25.4% 5.0% 14.5%

Trailing Return (years)PerformanceUSA

47% Canada

4%

Other

5% Europe

23%

Japan

8%

Emerging Markets

13%

-5.0%

0.0%

5.0%

A ugust-09 June-10 A pril-11 F ebruary-12

Information is current as of 3/31/12, drawn from third-party sources believed reliable but not independently verified/guaranteed by Arnerich Massena, for educational purposes only and may not be reproduced/republished/distributed

without our prior written consent. Investments/strategies discussed may not be suitable for all investors. Past performance is no guarantee of future returns. Questions/comments may be directed to your advisor.

Economic Overview

Fixed Income: Federal Funds Rate & CPI (Inflation) Fixed Income Indices

U.S. Equities: Gross Domestic Product U.S. Equity Indices

International: World Stock Market Capitalization International Indices

Despite mixed economic data and news headlines, investors continued to move assets

into equities, pushing the S&P 500 Index to a second consecutive quarter of double-digit

returns. The shift to riskier assets lowered the prices of 10-year Treasury bonds and

pushed yields from 1.89% to 2.23% at quarter-end. Within the U.S., the unemployment

rate has been improving along with consumer sentiment, prompting a rise in consumer spending — all positive signs. On the other hand, personal incomes are not

proportionately rising with spending, meaning people are saving less. Real GDP (gross

domestic product) increased at a 3.0% annual rate in the fourth quarter of 2011,

compared to 1.8% in the third quarter; greater consumer spending, private inventory

replenishment, and a reduction in spending cuts contributed to the rise, although growth

was partially offset by reduced government spending. In March, the Federal Reserve

reaffirmed its intention to keep short-term interest rates near zero through the end of

2014. They also indicated the possibility of taking on additional debt purchases if the

economic recovery remains modest and employment growth remains slow. Rising oil

prices, conflict in the Middle East, and the debt situation in Europe remain threats to

growth domestically. Another eurozone bailout of Greece and continued austerity

measures in the country are helping in the short term, although the sovereign debt

situation in Europe remains precarious — a number of eurozone countries had their

debt ratings downgraded early in the quarter. Emerging markets was another beneficiary

of the return to risk, with the MSCI Emerging Markets Index returning 14.1% for the

quarter. Real GDP in emerging markets has generally been trending toward moderating

over the past year, taking a breather following the past decade’s tremendous growth.

25


Client Projects and Analytics Update Investment Manager Update

In 1Q12, Arnerich Massena analysts attended 87 meetings and conference

calls with investment managers; roughly 46% of those meetings involved

funded products. Out of those 87 meetings, Arnerich Massena analysts

attended on-site due diligence meetings located in: Los Angeles, CA; San

Francisco, CA; Atlanta, GA; Birmingham, AL; Denver, CO; Dallas, TX; and

Portland, OR.

In 1Q12, Arnerich Massena analysts conducted:

• 12 asset allocation and portfolio development studies

• 39 manager search and document reviews, which included 19 specific

asset class searches

Six (6) new products were placed on Arnerich Massena’s Approved Manager

List by the Investment Committee.

Information is current as of 3/31/2012, drawn from third-party sources believed reliable but not independently verified/guaranteed by Arnerich Massena, for educational purposes only and may not be reproduced/republished/

distributed without our prior written consent. Investments/strategies discussed may not be suitable for all investors. Past performance is no guarantee of future returns. Questions/comments may be directed to your advisor.

Analytics News

The return of active management?

Just over three years have passed since the market collapse spurred by the financial crisis. Equity benchmarks reflect the return of investor optimism, with the S&P

500 Index posting an astonishing 23.4% three-year annualized return. Stock returns over the trailing five-year period, on the other hand, paint a much bleaker

picture. The S&P 500 Index earned a paltry 2.0% five-year annualized return; the period almost perfectly encapsulates the full market decline and ensuing rally that

the three-year return demonstrates so convincingly. Within this volatile period, something interesting has been occurring behind the scenes. The “risk on” and “risk

off” axioms that have been frequently used to describe market activity also illustrate a mindset of high correlation statistics — the measure of how stock prices move

in relation to one another. While volatility creates investment opportunities for active managers, high correlations across their investment universe challenge their

stock selection skills, because everything tends to move in lock-step in these environments. Correlations spiked well above historical norms over the past five years

as macro issues such as the financial crisis, government bailouts, and European debt-issues (just to name a few) have dictated market direction, as opposed to

underlying company fundamentals. These elevated correlation levels might also have been heightened due to the coinciding advent of exchange-traded funds (ETFs)

and broad market acceptance of passively-managed index strategies, which make rules-based investment decisions while neglecting underlying company

fundamentals.

Early indications in 2012 suggest this period of a macro-driven market may be coming to an end, as correlations among stocks collapsed during the first quarter. As a

result, first quarter performance reports likely reflect, to some extent, the return of active management premiums. This environment also favors improved

performance from hedge funds and active fixed income strategies, which have built up principled and contrarian positions over the past few years.

While the past five- and even ten-year periods have proven to be a challenging environment to navigate for plan sponsors and investment managers alike, those that

kept their focus and remained steadfast in their long-term asset allocation strategies likely weathered the storm with reasonable risk-adjusted, albeit low absolute,

returns for their constituents. This tumultuous period highlights the issues of behavioral finance, as those that capitulated during the market downturn were likely

left positioned with a dramatic underweight to equities during the market recovery. Considering the magnitude of the financial crisis, it will take time for a sense of

normalcy to return to the markets and overall economy. Given current interest rates, Arnerich Massena anticipates a continued low-return environment; however,

investment strategies that offer a unique skill set, offer differentiated market opinions, and are cognizant of inflationary pressures should aid investors in achieving

their stated goals without taking undue risk.

26


0.0

1.0

2.0

3.0

4.0

5.0

3mos 6mos 2yr 5yr 10yr 30yr

Fixed Income Markets Overview

Commentary

Short Term and Low Duration Indices

Intermediate and Long Duration Indices

Other Indices

Yield Curve

Barclays Capital 1-3 Yr Gov’t/Credit Index Sector Weights & Returns

Barclays Capital Aggregate Bond Index Sector Weights & Returns

Trailing 12-Month Quarter Weight

7.9%

6.3%

9.6%

5.3%

-1.1%

0.7%

2.0%

0.8%

40.6% Governments

33.3% Mortgages

25.8% Corporates

0.2% Asset Backed

Weight

03/31/11

03/31/12

Trailing 12-Month Quarter Duration QTR YTD 1 3 5 10

90 Day T-Bills 90 Days 0.0% 0.0% 0.0% 0.1% 1.1% 1.8%

BC 1-3 Yr Gov't/Credit 1.9 Years 0.4% 0.4% 1.8% 2.7% 3.8% 3.7%


Duration QTR YTD 1 3 5 10

BC High Yield Bond 4.2 Years 5.3% 5.3% 6.5% 23.9% 8.1% 9.2%

BC Mortgage 3.3 Years 0.6% 0.6% 6.2% 5.3% 6.3% 5.6%

BC Majors ex-US 7.4 Years -0.8% -0.8% 4.3% 7.4% 7.5% 8.6%


%

75.4% Governments

0.0% Mortgages

24.6% Corporates

0.0% Asset Backed

Information is current as of 3/31/12, drawn from third-party sources believed reliable but not independently verified/guaranteed by Arnerich Massena, for educational purposes only and may not be reproduced/republished/distributed


Fixed income markets experienced a change of pace from 2011 trends in the first quarter

of 2012. U.S. Treasuries posted their worst quarterly return since the fourth quarter of

2010; most other sectors posted modest gains as investors showed interest in the riskier

sectors of fixed income. A successful debt restructuring deal between Greece and its

lenders eased concerns of sovereign default in Europe and the accompanying risk of global

contagion. The Corporate and High Yield sectors both showed strong performance. With

recent gains in those sectors and the Federal Reserve indicating its intention to keep the

federal funds rate low through at least 2014, issuers took advantage of attractive rates

and issued $430 billion in new corporate debt, a record amount for one quarter.

Uncertainties remain, however, as minutes from the Federal Open Market Committee

released near the end of the quarter indicated that policymakers may not be ready to

implement additional measures of monetary stimulus as the economy gradually improves.

Additionally, Spain’s economic outlook and debt problems have taken center stage,

stirring renewed worry that Spain may become a greater problem than Greece has been.

Duration QTR YTD 1 3 5 10

BC Int Agg Bond 3.7 Years 0.7% 0.7% 6.2% 6.1% 5.9% 5.4%

BC Aggregate Bond 5.0 Years 0.3% 0.3% 7.7% 6.8% 6.2% 5.8%

BC Government Bond 5.3 Years -1.1% -1.1% 7.9% 4.0% 6.0% 5.5%

BC US TIPS 6.2 Years 0.9% 0.9% 12.2% 8.7% 7.6% 7.5%

BC Muni Bond Index 7.6 Years 1.7% 1.7% 12.1% 7.7% 5.4% 5.5%


1.5%

0.0%

1.6%

2.8%

27


U.S. Equity Markets Overview

Large Cap: S&P 500 Index Sector Weights and Returns

13.8% Consumer Discretionary

3.5% Consumer Staples

6.4% Energy

22.5% Financials

12.7% Health Care

15.8% Industrials

16.7% Information Technology

4.6% Materials

0.8% Telecommunication Services

3.2% Utilities



QTR YTD 1 3 5 10

S&P 500 12.6% 12.6% 8.5% 23.4% 2.0% 4.1%

Russell 1000 Value 11.1% 11.1% 4.8% 22.8% -0.8% 4.6%

Russell 1000 Growth 14.7% 14.7% 11.0% 25.3% 5.1% 4.3%


QTR YTD 1 3 5 10

Russell Midcap 12.9% 12.9% 3.3% 29.1% 3.0% 7.9%

Russell Midcap Value 11.4% 11.4% 2.3% 29.2% 1.3% 8.0%

Russell Midcap Growth 14.5% 14.5% 4.4% 29.2% 4.4% 6.9%


QTR YTD 1 3 5 10

Russell 2000 12.4% 12.4% -0.2% 26.9% 2.1% 6.4%

Russell 2000 Value 11.6% 11.6% -1.1% 25.4% 0.0% 6.6%

Russell 2000 Growth 13.3% 13.3% 0.7% 28.4% 4.2% 6.0%


10.9% Consumer Discretionary

10.8% Consumer Staples

11.2% Energy

14.9% Financials

11.4% Health Care

10.6% Industrials

20.5% Information Technology

3.5% Materials

2.8% Telecommunication Services

3.4% Utilities

16.0%

5.5%

3.9%

22.0%

9.1%

11.3%

21.5%

11.2%

2.1%

-1.6%

17.5%

17.3%

-6.9%

-1.8%

16.4%

1.8%

20.2%

-4.0%

3.5%

14.8%

Large Cap Indices

Mid Cap Indices

Small Cap Indices

Commentary

Small Cap: Russell 2000 Index Sector Weights and Returns

Information is current as of 3/31/12, drawn from third-party sources believed reliable but not independently verified/guaranteed by Arnerich Massena, for educational purposes only and may not be reproduced/ republished/ distributed


U.S. equities commenced 2012 with impressively strong gains. Stimulus from

the U.S. and European Central Banks continued to drive investors into riskier

assets in search of higher returns. The Dow Jones Industrial average had its

best quarter since 1998, returning 8.8%. The S&P 500 had a robust quarter as well, gaining 12.6% — its double-digit gains over the last two quarters reflect a

tilt toward optimism in the markets. The primary driver of returns has been

renewed consumer confidence; consumer spending and sentiment are up for

the quarter. The European debt crisis has faded from headlines – at least for

now – and the unemployment rate has been on a downward trend,

contributing to the positive sentiment. Technology and Financials led the way

for the S&P, although a significant portion of the contribution in Technology

can be attributed to Apple, which represents the largest weighting in the S&P

500 currently. Small cap stocks also fared well; the Russell 2000 posted 12.4%

for the quarter. Within the small cap sectors, Consumer Discretionary and

Health Care were sector leaders.

17.9%

8.5%

7.2%

11.7%

15.3%

11.3%

13.9%

13.0%

12.6%

-2.1%

6.3%

11.2%

-17.5%

3.7%

8.0%

-2.9%

-5.4%

-10.4%

2.7%

8.0%

28

International Markets Weights U.S. Dollar vs. Local Currency Returns

QTR. 1-YR. 3-YR. 5-YR.

11.3% -6.8% 19.7% -1.1%

11.0% -5.3% 17.7% -3.0%

Europe (MSCI Europe) 10.8% -6.9% 18.3% -3.4%

UK 7.6% 1.1% 22.4% -2.3%

Germany 21.1% -7.1% 19.7% -0.9%

France 12.3% -14.7% 13.1% -5.0%

Local % Change

Asia/Pacific (MSCI Pacific) 11.3% -1.9% 16.7% -2.2% Currency 12/31/2011 3/31/2012 To US$

Japan 11.4% 0.4% 12.1% -5.1%

Hong Kong 13.4% -4.4% 23.6% 5.2% Yen 77.400 82.270 -6.3%

Australia 9.0% -7.1% 25.8% 2.6% Euro 0.772 0.750 2.9%

Pound 0.647 0.625 3.3%

Canada 6.6% -13.2% 22.7% 4.3% Swiss Franc 0.940 0.903 3.9%

14.1% -8.5% 25.4% 5.0%

Latin America (MSCI EM Latin America) 14.7% -8.1% 27.5% 8.5%

Asia (MSCI EM Asia) 13.4% -7.6% 24.3% 5.4%

Eur/M.East/Africa (MSCI EM Europe/Middle East) 19.3% -18.1% 26.0% -1.6%

11.9% -6.0% 19.3% -0.5%

10.8% -7.6% 20.1% -1.8%

13.7% -7.0% 25.9% -1.7%

Other Countries and Weights

Developed WT. Emerging WT.

Austria 0.2% Brazil 3.2%

Belgium 0.7% Chile 0.4%

Denmark 0.8% China 4.2%

Finland 0.6% Colombia 0.3%

Greece 0.1% Czech Rep. 0.1%

Ireland 0.2% Hungary 0.1%

Israel 0.4% India 1.5%

Italy 1.6% Indonesia 0.7%

New Zealand 0.1% Korea 3.6%

Norway 0.7% Malaysia 0.8%

Netherlands 1.7% Mexico 1.2%

Portugal 0.1% Peru -

Singapore 1.2% Philippines 0.2%

Spain 2.0% Poland 0.3%

Sweden 2.2% Russia 1.6%

Switzerland 5.9% South Africa 1.9%

Taiwan 2.7%

Thailand 0.5%

Turkey 0.3%

International Markets Overview

World Small (MSCI World Small Cap ex-US)


Exchange Rate as of

Returns (in U.S. Dollars)

World ex-US (MSCI ACWI ex-US)

Developed Markets (MSCI EAFE)

Emerging Markets (MSCI EM)

Country/Region

World Growth (MSCI ACWI Growth ex-US)

Commentary

World Value (MSCI ACWI Value ex-US)

14.1

%

-8.5

%

25.4

%

5.0

%

10.8

%

-3.7

%

20.1

%

5.0

%

QTR. 3-YR. 5-YR.

11.0

%

-5.3

%

-3.0

%

10.3

%

-3.7

%

12.6

%

-4.9

%

QTR. 3-YR.

5-YR.

U.S.$ Local Currency

Emerging (MSCI EM)

Developed (MSCI EAFE)

*The graph above and the weights below are a representation of the world's capital markets as expressed by the MSCI ACWI ex-US, a market capitalization weighted index combining the world's developed and emerging markets, excluding the United States.

U.S.$ Local Currency

Developed Markets experienced strong gains in the first quarter of 2012 (+11%). European markets experienced a

relief rally, up 10.8%, driven by the European Central Bank’s passing of the 3-year LTRO plan, which will lend €529

billion to over 800 European banks to improve liquidity and avoid a disastrous tail event in the region. Notably,

Germany was up 21.1% for the quarter, followed by France (+12.3%) and the U.K. (+7.6%). The Asia Pacific region

also saw strong gains of 11.3%. Japan’s Nikkei index gained a whopping 19.3% during the quarter, its largest first-

quarter gain in 24 years. This gain resulted from signs of economic strength in the U.S. – a crucial trader partner for

Japan – and Bank of Japan’s announcement for additional future economic-easing.

While performance in the first two months of the year was robust (+18.1%), Emerging Market equities corrected

somewhat in March (-3.3%.) Concerns surrounding China’s impending leadership transition, potential for an

economic slowdown, and inflation led the decline. China traded down the most in March, H-shares (-10.0%) and A-

shares (-6.8%), and India, Russia and Brazil followed suit, albeit to a lesser extent. Despite a weak March, the MSCI

Emerging Markets Index ended the first quarter up 14.1%.

100.0%

76.5%

44.1%

14.5%

6.0%

6.4%

24.2%

15.0%

2.0%

5.8%

8.2%

23.5%

5.0%

14.2%

4.3%

Developed Markets

Emerging Markets

World ex-US

Europe

UK

Germany

France

Asia/Pacific

Japan

Hong Kong

Australia

Canada

Latin America

Asia

Europe/M. East/Africa

Information is current as of 3/31/12, drawn from third-party sources believed reliable but not independently verified/guaranteed by Arnerich Massena, for educational purposes only and may not be reproduced/republished/distributed without our prior written consent. Investments/strategies discussed may not be suitable for all investors. Past performance is no guarantee of future returns. Questions/comments may be directed to your advisor.

1-YR.

1-YR.

29

Annual Asset Class and Style Returns (1994 - Present)Indexes Ranked from Best to Worst Performance

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 YTD

Int'l Stock

Large Cap

Value

Large Cap

Growth

Large Cap

Value

Large Cap

Growth

Mid Cap

Growth

Small Cap

Value

Small Cap

Value

Fixed

Income

Small Cap

Growth

Mid Cap

Value Int'l Stock Int'l Stock Int'l Stock

Fixed

Income

Mid Cap

Growth

Small Cap

Growth

Fixed

Income

Large Cap

Growth

6.6% 38.4% 23.1% 35.2% 38.7% 51.3% 22.8% 14.0% 10.3% 48.5% 23.7% 17.1% 27.2% 17.1% 5.2% 46.3% 29.1% 7.8% 14.7%

Large Cap

Growth

Large Cap

Growth

Large Cap

Value

Mid Cap

Value

Mid Cap

Growth

Small Cap

Growth

Mid Cap

Value

Fixed

Income

Mid Cap

Value

Small Cap

Value

Small Cap

Value

Mid Cap

Value

Small Cap

Value

Large Cap

Growth

Small Cap

Value Int'l Stock

Mid Cap

Growth

Large Cap

Growth

Mid Cap

Growth

2.7% 37.2% 21.6% 34.4% 17.9% 43.1% 19.2% 8.4% -9.7% 46.0% 22.3% 12.7% 23.5% 11.8% -28.9% 42.1% 26.4% 2.6% 14.5%

Small Cap

Value

Mid Cap

Value

Small Cap

Value

Small Cap

Value

Large Cap

Value

Large Cap

Growth

Fixed

Income

Mid Cap

Value

Small Cap

Value

Mid Cap

Growth Int'l Stock

Mid Cap

Growth

Large Cap

Value

Mid Cap

Growth

Large Cap

Value

Large Cap

Growth

Mid Cap

Value

Large Cap

Value

Small Cap

Growth

-1.6% 34.9% 21.4% 31.8% 15.6% 33.2% 11.6% 2.3% -11.4% 42.7% 21.4% 12.1% 22.3% 11.4% -36.9% 37.2% 24.8% 0.4% 13.3%

Large Cap

Value

Mid Cap

Growth

Mid Cap

Value

Large Cap

Growth Int'l Stock Int'l Stock

Large Cap

Value

Large Cap

Value Int'l Stock Int'l Stock

Large Cap

Value

Large Cap

Value

Mid Cap

Value

Small Cap

Growth

Large Cap

Growth

Small Cap

Growth

Small Cap

Value

Mid Cap

Value

Small Cap

Value

-2.0% 34.0% 20.3% 30.5% 14.5% 30.9% 7.0% -5.6% -14.7% 41.4% 16.5% 7.1% 20.2% 7.1% -38.4% 34.5% 24.5% -1.4% 11.6%

Mid Cap

Value

Small Cap

Growth

Mid Cap

Growth

Mid Cap

Growth

Fixed

Income

Large Cap

Value

Mid Cap

Growth

Small Cap

Growth

Large Cap

Value

Mid Cap

Value

Mid Cap

Growth

Large Cap

Growth

Small Cap

Growth

Fixed

Income

Mid Cap

Value

Mid Cap

Value

Large Cap

Growth

Mid Cap

Growth

Mid Cap

Value

-2.1% 31.0% 17.5% 22.5% 8.7% 7.4% -11.8% -9.2% -15.5% 38.1% 15.5% 5.3% 13.4% 7.0% -38.4% 34.2% 16.7% -1.7% 11.4%

Mid Cap

Growth

Small Cap

Value

Small Cap

Growth

Small Cap

Growth

Mid Cap

Value

Mid Cap

Value Int'l Stock Int'l Stock

Mid Cap

Growth

Large Cap

Value

Small Cap

Growth

Small Cap

Value

Mid Cap

Growth

Large Cap

Value

Small Cap

Growth

Small Cap

Value

Large Cap

Value

Small Cap

Growth Int'l Stock

-2.2% 25.8% 11.3% 13.0% 5.1% -0.1% -15.1% -19.5% -27.4% 30.0% 14.3% 4.7% 10.7% -0.2% -38.5% 20.6% 15.5% -2.9% 11.3%

Small Cap

Growth

Fixed

Income Int'l Stock

Fixed

Income

Small Cap

Growth

Fixed

Income

Large Cap

Growth

Mid Cap

Growth

Large Cap

Growth

Large Cap

Growth

Large Cap

Growth

Small Cap

Growth

Large Cap

Growth

Mid Cap

Value

Mid Cap

Growth

Large Cap

Value Int'l Stock

Small Cap

Value

Large Cap

Value

-2.4% 18.5% 6.7% 9.7% 1.2% -0.8% -22.4% -20.2% -27.9% 29.8% 6.3% 4.2% 9.1% -1.4% -44.3% 19.7% 11.6% -5.5% 11.1%

Fixed

Income Int'l Stock

Fixed

Income Int'l Stock

Small Cap

Value

Small Cap

Value

Small Cap

Growth

Large Cap

Growth

Small Cap

Growth

Fixed

Income

Fixed

Income

Fixed

Income

Fixed

Income

Small Cap

Value Int'l Stock

Fixed

Income

Fixed

Income Int'l Stock

Fixed

Income

-2.9% 9.9% 3.6% 2.0% -6.5% -1.5% -22.4% -20.4% -30.3% 4.1% 4.3% 2.4% 4.3% -9.8% -45.2% 5.9% 6.5% -13.3% 0.3%

This chart is intended to demonstrate the importance of diversification

by showing that different asset classes and styles have come in and out of favor over time.

The demonstration reinforces the importance of managing risk through diversification.


Investment Representative Index Notes

Fixed Income BC Aggregate

Large Cap Value Russell 1000 Value

Large Cap Growth Russell 1000 Growth

Mid Cap Value Russell Mid Cap Value

Mid Cap Growth Russell Mid Cap Growth

Small Cap Value Russell 2000 Value

Small Cap Growth Russell 2000 Growth

International Stock MSCI ACWI ex-U.S. Developed and Developing Countries

Domestic equity style is a

function of market

capitalization, price-to-

book ratio and I/B/E/S

forecast long-term

growth mean.

31

Notice of Privacy Policy You are receiving this notice in compliance with the Gramm-Leach-Bliley Act of 1999, as amended. At Arnerich Massena, Inc., maintaining your privacy is a priority. We recognize that the privacy and security of your nonpublic personal information is important to you, and we maintain safeguards designed to protect against unauthorized access. We do not sell this information to anyone and only disclose such information with others as permitted by law for the purpose of serving your investment needs. Why We Collect Your Information The information that we collect is either required or necessary to provide personalized investment services to you. Any information provided is kept confidential and allows us to:

service your account; deliver products/services of interest to you; guard against unauthorized access to your account(s); improve customer service; or comply with legal and regulatory requirements.

The Information We Collect Depending upon your relationship with us, we collect nonpublic personal information (such as full name, address, social security/federal tax identification number, telephone number, and account numbers and balances) from you:

on applications and other forms; through transactions, correspondence, and other communications; or in connection with providing you a financial product/service.

The Information We Disclose We do not share the information we collect about our customers (or former customers) with any third-parties, except as required or permitted by law. We may disclose information we collect to our affiliates and companies who help us to maintain and service your account(s). For example, we may share information with a money manager or clearing broker to process your transactions and update your account. These companies are authorized to use this information only in connection with the services for which we have hired them; they are not permitted to use or share this information for any other purpose. We may also disclose nonpublic personal information to government agencies and regulatory organizations when permitted or required by law. Protection of Information For your protection, we restrict access to your nonpublic personal information to those individuals who need to know that information in order to provide products/services to you. We maintain physical, electronic, and procedural safeguards that are designed to comply with federal standards to maintain the confidentiality of your nonpublic personal information. Updating and Correcting Your Account Information The accuracy of your personal information is important to us. You can correct, update, or confirm your personal information at any time by contacting our firm at 503-239-0475 or 800-929-5179.

33

Form ADV Part 2 Offer

Important disclosures regarding our business are provided in Form ADV Part 2A and Part 2B. This document provides information about Arnerich Massena in general, the services we offer, the fees we charge and other significant details. Our disclosure document is updated promptly when there are material changes in our business or business practices, and periodically to capture routine changes. Securities and Exchange Commission Rule 204-3, or the “Brochure Rule”, requires that we make available to clients our Form ADV Part 2. Upon request, Arnerich Massena will furnish a current copy of this document at no charge. If you are interested in a copy, please contact our offices at 503-239-0475 or 800-929-5179.

34

State of Oregon

2010 Defined ContributionCEM Survey Results

Prepared October 12, 2011 by:

372 Bay Street, Suite 1000, Toronto, ON M5H 2W9Tel: (416) 369-0568 Fax: (416) 369-0879www.cembenchmarking.com

Copyright 2011 by CEM Benchmarking Inc. (CEM). Although the information in this report has been based upon and obtained from sources we believe to be reliable,CEM does not guarantee its accuracy or completeness. The information contained herein is proprietary and confidential and may not be disclosed to third parties withoutthe express written and mutual consent of CEM and State of Oregon.

In 2010, we provided independent, objective and actionable benchmarking information for:

• Defined Contribution Plans167 defined contribution plans in the U.S., with $980 billion in total assets

• Defined Benefit Plans331 defined benefit plans worldwide, with $4.8 trillion in total assets

Since 1992, CEM Benchmarking Inc. has been measuring and benchmarking the investment and administration performance of pension plans worldwide.

• Retirement Plan Benefit Administration 81 pension benefit administration systems worldwide, with over 30.5 million members

The 2010 CEM Benchmarking Defined Contribution Survey Results.

Survey Universe & Plan Description• 2010 Survey Universe 1• Average Account Balances 4

Diversification• Number and Type of Investment Options Offered 5• Your Plan's Average Asset Mix 6

Return Performance• Your Plan's Performance vs. the US Universe 7• Your Plan's Total Value Added vs. the US Universe 8• Your Return and Value Added Performances by Option 9

Costs• Your Plan's Total Cost 10• Who Pays for Specific Plan Costs 11• Your Total Plan Costs vs. US Universe 12• Your Plan's Benchmark Cost and Excess Cost 13

CEM has benchmarked the performance of Defined Contribution/ Profit Sharing/ 401(k) plans since 1997, providing the information you need to meet your fiduciary responsibilities. This includes measurements to help you ensure that the investment options you have chosen for your plan participants:

a) are well diversified, b) continue to be prudent choices for your plan, and c) have reasonable costs.

In this free report, our 'thank you' for completing our survey, we provide your plan's overall return and cost performance.

If you are looking for more detailed analysis that is targeted to your fund's specific characteristics, we offer a Defined Contribution Fiduciary Oversight report that helps you

Table of Contents

• Your Plan s Benchmark Cost and Excess Cost 13• Interpreting Your Plan's Benchmark Cost 14• Calculation of Your Benchmark Cost 15

Your Cost Effectiveness Position 16

Plan Features• Employer Contribution Methods 17

CEM's Defined Contribution Fiduciary Oversight Report• Description of Our Services 18• Your Potential Peer Group 19

Appendix A - Data Quality 20Appendix B - Your Data Summary (2010 & 2009) 21 - 26

© 2011 CEM Benchmarking Inc. Table of Contents

If you have any questions about your results or would like more information, contact Mike Heale by phone at: 416-369-0468 (direct) or 416-369-0568 (main number) or by email at [email protected].

y g p p ymonitor each of your investment options' return and cost performance. As fiduciaries, you are responsible for ensuring that each investment option continues to be a 'prudent' choice and is reasonable in cost. Our detailed report also provides other vital information such as the competitiveness of your plan features. See page 18 for more details.

The 2010 CEM Benchmarking U.S. DC survey universe was comprised of 167 plans with assets totaling $980 billion.

2010 was the 14th year of our defined contributiondatabase. Of the 167 total participating plans, 138 were corporate, 24 were public and 5 were classified as other.

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CEM Defined Contribution U.S. Universe: Total Participating Assets

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2010 1,145 279,889 5,359 2,306 922 24 5,871 980,454 1672009 999 243,576 4,622 2,169 794 14 5,141 889,393 1732008 813 205,030 3,601 1,522 618 13 4,085 735,287 1802007 1,040 229,806 4,474 1,960 975 12 5,039 957,390 1902006 959 200,555 4,514 1,954 763 9 5,185 622,172 1202005 828 166,284 5,116 2,289 967 5 5,602 515,370 922004 750 25,410 4,855 2,550 912 3 3,801 330,680 872003 655 22,541 4,142 1,597 544 9 3,329 299,619 902002 538 18,248 4,073 1,612 668 142 3,276 245,690 752001 20,688 3,670 1,867 877 47 3,136 269,679 862000 20,701 4,107 2,135 1,000 69 3,540 240,713 681999 27,108 4,269 2,332 1,010 66 3,989 259,255 651998 18,325 3,734 2,021 824 66 3,439 244,158 711997 14,065 2,827 1,287 647 72 2,435 148,549 61

The largest plan in the database was $279.9 billion, the smallest was $24 million; and the median plan size was $2.3 billion.

In 2010, the median plan had $2,306 million in assets; your plan had $1,145 million.


The plans that participated in our Number of participants or membersdatabase were a diverse group. Your Max 75th 50th 25th Min Avg TotalThe largest plan in the database had 2010 23,075 4,400,000 56,008 23,814 10,933 497 71,676

2009 22,964 4,300,000 50,500 23,412 11,715 438 68,5092008 23,001 4,000,000 48,940 23,988 13,139 488 65,4752007 22,273 3,850,000 47,691 23,840 12,381 491 61,7772006 21,174 3,701,000 58,339 28,704 13,168 235 77,1842005 20,532 3,566,000 75,215 39,299 16,588 800 91,8712004 19,304 223,795 78,141 36,648 16,285 600 50,8032003 18,853 247,436 63,245 30,730 10,455 115 46,3192002 19,127 255,317 72,673 30,264 14,360 3,537 52,6612001 368,398 79,334 30,158 15,509 1,252 54,2942000 259,436 78,404 30,561 15,002 3,092 54,9621999 268,193 58,650 23,290 13,052 3,194 46,1051998 208,000 49,727 25,000 11,400 3,729 40,6711997 203,378 37,827 23,262 11,480 2,806 37,147

In 2010, the median plan had 23,814 participants; your plan had 23,075 participants.

11,969,92911,852,06911,785,415

4 million members and the smallest plan had 497 participants.

3,686,2404,343,543

2,154,4982,806,282

11,737,6229,262,0838,360,2494,267,4533,890,773

2,858,4823,572,545


Your participants' average account balance in 2010 was $49,600.The U.S. universe average was $104,200.

For the 167 plans in the U.S. universe the averageaccount balance ranged from a low of $7,200 to ahigh of $449,600.

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Maximum $449.675th $130.6Median $91.325th $59.6Minimum $7.2

Average $104.2

Your Plan $49.6Your % Rank 20%

State of Oregon

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Your plan offered 9 investment options in 2010. The U.S. universe average was 16.5 investment options.

As fiduciaries, you have a duty to provide your Comparisons of the Type and Number of Investment Optionsparticipants with diversified investment options Asset Class Your 2010 2010offering distinctly different risk and return Plan Average Mediancharacteristics. Company Stock Discretionary 0 0.6 1.0

Domestic Stock 4 7.2 6.0You offered more than the required 3 options for International/Global Stock 1 2.2 2.0the Department of Labor's Section 404(c) 'safe Fixed Income/Bond 1 2.2 2.0harbor' provision. Balanced/Lifestyle 0 1.4 1.0

Target Date (Families) 1 0.7 1.0Offering more investment options to participants is GICs/Stable Value 1 0.8 1.0not necessarily better. When there are too many Cash/Money Market 1 0.5 0.0choices, the process can be overwhelming to many Mutual Fund Window 0 0.2 0.0participants. In addition, you have a fiduciary duty Self-directed Brokerage 0 0.3 0.0to monitor each of the investment options that you Other 0 0.4 0.0offer participants to ensure that they continue to be Total (excluding mandated Co. Stock) 9 16.5 15.0prudent choices.

Target Date families are counted as one option in the above table.


This graph compares your participants' average asset mix tothe U.S. universe. We have categorized your investmentoptions into 5 major asset classes*.

It is important to monitor your participants' asset mix relative toother plans and over time, to ensure your participants havereasonably diversified portfolios on average. Of particularconcern are higher holdings of:

• Cash, because it is expected to have the lowest long-term return• Company stock, because of its lack of diversification

In our detailed Defined Contribution Fiduciary Oversight report, we also do an analysis on total assets excluding

Your participants' average asset mix in 2010 consisted of: 0% company stock, 61% stocks, 18% bonds, 16% stable value and 5% cash.

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we also do an analysis on total assets excluding company stock. These are the assets completelywithin the participants' control. Looking at total assets excludingmandated company stock helps you gauge the effectiveness ofyour communication and education efforts.

*Stock includes domestic stocks, international stocks and stocks invested underbalanced/target date mandates. Bonds include fixed income invested underbalanced/target date mandates but excludes short bonds, which are included in cash. For stocks and bonds in balanced/target date funds a default split of 60:40 was used iftheir weights were not provided.

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Your Plan U.S. UniverseCompany Stock 0% 11%Stock 61% 54%Bonds 18% 14%Stable Value 16% 19%Cash & Equivalents 5% 2%


Differences in average total return reflect:

• Differences in average plan asset mix (see page 6), whichin turn largely depends on:

• The investment options offered,• Default investment options (i.e. cash versus a balanced

fund),• Matching policy (i.e., cash versus company stock) andmandating (i e requiring that company stock be held) and

Your participants' average total return for 2010 was 12.0%. This was close to the U.S. median of 11.8%.

Average total return measures the change in the average participant's account balance as a result of the investment returns earned by their investment options weighted by their holdings. The calculation is shown on page 9.

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2010 Average Total Return vs. U.S. Universe

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mandating (i.e., requiring that company stock be held), and member education.

• Differences in value added performance vis-à-vis passivelyindexed alternatives (see page 8). Average Total

The highest and lowest average total returns almost always Total GR Allbelong to plans with a high percentage of company stock.When their company stock performs exceptionally well it often Maximum 37.7% results in a relatively high average total return, and vice versa. 75th 13.8% Not surprisingly, the relative performance of plans with a high Median 11.8% proportion of company stock can be extremely volatile. 25th 10.4%

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Your Plan 12.0% State of Oregon

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Average total value added is a useful measure of how wellyour investment options have performed overall. Specifically, itis an aggregate measure of the contribution from activemanagement. It measures whether your investment options,in aggregate, are beating their respective passive/indexedalternatives.

The graph to the right shows a one-year snapshot. TheDefined Contribution Fiduciary Oversight report compareseach of your investment option's costs, return & riskperformance to similar investment options.

The calculation of your plan's total value added is shown on9

In 2010 your total value added was 0.7%. In other words, your investment options beat their passive/indexed alternatives by 0.7%. This was above the U.S. median of 0.4%.

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Average Value

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Average Value Added


Your Investment Options % Beginning Gross Benchmark Value Holdings1 Return2 % Return % Added3 %

9.3% 17.1 16.9 0.2 7.6% 16.5 16.7 (0.2)

• Positive total average return means that your participants' 7.5% 14.3 15.5 (1.2) account balances grew, even without further contribution. 12.3% 27.4 26.7 0.7

• Negative total average return means that your participants' 9.8% 10.0 7.8 2.2 account balances were lower, even without withdrawals. 7.6% 8.3 6.5 1.8

18.2% 2.2 0.3 2.0 6.3% 0.3 0.1 0.2

Total value added is a single measure of the average 6.9% 11.1 11.0 0.1 contribution or loss to your participants' average total return 5.7% 12.0 11.9 0.1 that resulted from active management. It is the value 2.1% 13.6 13.7 (0.1) produced over what could have been earned passively. It 4.1% 13.0 12.9 0.1 equals the gross return minus the benchmark return. 0.2% 16.3 16.3 0.0

0.1% 15.9 15.8 0.1 • Positive total value added means that your options 0.3% 15.5 15.4 0.1

performed better, before considering costs, than an 0.7% 14.8 14.9 (0.1) indexed/passive alternative. 1.2% 14.5 14.3 0.2

• Negative total value added implies that your options - - - did not perform as well as an indexed/passivealternative.

Avg Total Return (sum of % beginning holdings X gross return) 12.0%Weighted Total Benchmark Return (sum of % beginning holdings X benchmark return) 11.2%Total Value Added (Average total return less benchmark return) 0.7%

Balanced: LifePath Index Retirement Fund Q

Dom Stk: Large Cap ValueDom Stk: Small/Mid CapInt'l: International Equity OptionFixed Inc: Intermediate Fixed IncomeGIC/Stable: Stable ValueShort-term fixed

Calculation of your average total return and value added are shown below. Your participants earned an average total return of 12.0% in 2010, of which active management contributed 0.7%.

Balanced: LifePath Index 2015 Fund QBalanced: LifePath Index 2025 Fund QBalanced: LifePath Index 2020 Fund QBalanced: LifePath Index 2050 Fund QBalanced: LifePath Index 2045 Fund Q

Average total return measures the average change in your participants' account balances as a result of the returns earned by the investment options.

Other: Loan

Balanced: LifePath Index 2040 Fund QBalanced: LifePath Index 2035 Fund QBalanced: LifePath Index 2030 Fund Q

Dom Stk: Stock Index OptionDom Stk: Large Cap Growth

Footnotes:1. Holdings in self-directed brokerage accounts and mutual fundwindows are excluded because the investment option returns areunavailable for these holdings. Loans are excluded because not allplans track loans.2. Net returns are grossed up by netted costs.3. Value added = gross return - benchmark returnValue Added from company stock is neutralized by setting its benchmark return equal to its actual return. It is neutralized in this report so we can show the value added from diversified plan options.


Your Plan's Costs in bp1 in $000s2

Investment OptionsDom Stk: BlackRockStock Index Option 4 bp 35Dom Stk: Multi-Mgr Large Cap Growth 38 bp 310Dom Stk: Multi-Mgr Large Cap Value 37 bp 299Dom Stk: Multi-Mgr Small/Mid Cap 50 bp 711Int'l: Multi-Mgr International Equity Option 58 bp 574Fixed Inc: Multi-Mgr Intermediate Fixed Income 10 bp 83GIC/Stable: Dwight Asset Management Stable Value 17 bp 313SSgA Short-term fixed 5 bp 30Balanced: BlackRock LifePath Index Retirement Fund Q 10 bp 76Balanced: BlackRock LifePath Index 2015 Fund Q 10 bp 64Balanced: BlackRock LifePath Index 2025 Fund Q 10 bp 23Balanced: BlackRock LifePath Index 2020 Fund Q 10 bp 46Balanced: BlackRock LifePath Index 2050 Fund Q 10 bp 4Balanced: BlackRock LifePath Index 2045 Fund Q 10 bp 2Balanced: BlackRock LifePath Index 2040 Fund Q 10 bp 4Balanced: BlackRock LifePath Index 2035 Fund Q 10 bp 9Balanced: BlackRock LifePath Index 2030 Fund Q 10 bp 14Other: Loan Loan 0 bp 0Total Investment Option Costs/Fees 24 bp $2,593

Footnotes:1. bp = basis points. 1 bp = 1/100th of 1% (e.g., 48 bps = 0.48%). Administrative & Fiduciary2. Costs in dollars were estimated by multiplying the basis point cost Recordkeeping3 $1,472

you provided by the average holdings [average holdings = (beginning Oversight $769of year + end of year)/2]. If beginning of year holdings were not Communication/Education $67available, because you did not participate last year, then we estimated Custodial $175beginning of year holdings = [end of year holdings/ (1 + return on Audit $0holdings)]. Managed Account Fees $0

3. If you were unable to provide a detailed breakdown of your Other $27administrative and fiduciary costs, your total administrative and less Rebates that reduce recordkeeping and administrative ($0)fiduciary cost was placed in recordkeeping, as this generally Total Administrative & Fiduciary Costs 23 bp $2,510represents the bulk of these costs.

Total Plan Costs 48 bp $5,104

Your plan's total 2010 operating costs were 48 basis points (as a percentage of total assets) or $5.1 million.


As fiduciaries, you must ensure that your plan costs are reasonable. This is particularly important because all of your plan's costs were paid by participants.

In 2010, your participants paid 100% of your plan's costs*Costs as a

% of Total Costs Costs Paid ByInvestment Management Fees/Costs 50.8% ParticipantsRecordkeeping - External 28.8% ParticipantsFiduciary/Oversight - Internal 13.8% ParticipantsFiduciary/Oversight - External 1.3% ParticipantsCommunication/Education 1.3% ParticipantsCustodial 3.4% ParticipantsAudit 0.0% ParticipantsOther 0.5% ParticipantsManaged Accounts 0.0%less Total Rebates that affect Administrative costs 0.0%Total Costs 100.0%

How plan costs are paid

U.S. UniversePlan Costs Your Plan Participants Sponsor BothInvestment Management Fees/Costs Participants 97% 1% 2%Recordkeeping Participants 71% 19% 10%Fiduciary/Oversight - Internal Participants 47% 51% 2%Fiduciary/Oversight - External Participants 56% 41% 3%Communication/Education Participants 68% 24% 7%Custodial Participants 73% 23% 4%Audit Participants 54% 44% 2%Managed Accounts 70% 21% 9%Other Participants 66% 25% 9%

*Costs that were shared by both the sponsor and participants were given a 50% weight. Rebates reduce Total Costs.


Your plan's total cost was 48 basis points in 2010. The average U.S. cost was 44 basis points.

However, comparisons of total costs are not meaningful becauseour research has shown costs are impacted by many variablesincluding the following:

• The size of your plan assets

A plan with $10 billion in assets will pay much lower unit or basispoint costs than a $1 billion plan because management fees areusually charged on a declining asset base schedule.

• The type of investment options you offer

For example, international equity options are generally higher costthan domestic equity options. Similarly, an active investmentoption is higher cost than an indexed/passive investment option.

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For a more meaningful analysis of your total plan costs, pleaserefer to the following discussion regarding your benchmark cost,on pages 13 through 15.

Total CostBps

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Your Plan 48 bpYour % Rank 61%

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Your 2010 Excess Cost CalculationYour plan's total cost 48 bp

less Your benchmark cost 57 bpequals Your excess cost

Your plan's benchmark cost was 57 bp in 2010. Your actual total cost of 48 bp was less than your benchmark cost. This suggests that your plan was low cost.

Your benchmark cost is your predicted total plan cost given your unique plan size and asset mix. Both of these factors impact costs and are not directly within your control. The calculation of your benchmark cost is shown on page 15.

Being low or high cost is neither good nor bad by itself. What matters is the value you get in return for what you pay (see page 16).

Key reasons plans are high versus low cost are discussed on the following page.

-9 bp


After adjusting for size and asset mix, key reasonsfor variation in cost status are:

• Differences in fees paid for similar investment options.

These differences often result from:- Negotiation,- Differences in providers,- The proportion of assets invested in 'retail'

f

Interpreting your benchmark cost

Your benchmark cost is a very good indicator of whether your plan costs should be high or low in aggregate after adjusting for size and asset mix. The benchmark cost is calculated using a regression analysis on our entire U.S. database. The R² of the regression is 60% which means that 60% of differences in costs between plans are explained by size and asset mix differences.

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High cost plans are on this side of the 45º line.

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versus 'institutional' mutual funds; our research shows thatretail funds cost more,

- The number of investment options offered;often, with fewer managers, you can achieve costeconomies.

• Differences in administrative and fiduciary costs.• Differences in the proportion of assets invested in

passive/indexed options which are much lower cost thanactive mandates.

To quantify the impact all of the above factors we recommend our in-depth "Fiduciary Oversight Report" (see pages 18 & 19).

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Calculation of your benchmark cost

Step 1 -

Your Your ValueValue Coefficient x Coeff.

Starting cost estimate 119.4 119.4 bp

Adjust for:• Total plan assets with explicit fees. As assets with Plan assets with explicit fees1 in $mils (log 10) 3.06 -19.4 -59.2 bp

explicit fees increase, costs decrease due to Assets with explicit fees per account2 in $000, (log 10) 1.69 -15.8 -26.8 bpeconomies of scale. % Stock3 61.7% 39.0 24.1 bp

• Assets with explicit fees per account. As the average Your Benchmark Cost as a % in bp4 of plan assets with explicit fees 57.4 bpaccount size increases, administrative costs peraccount decrease.

Step 2 - Calculate your Benchmark Cost as a % of total plan assets• % Stock - Stock options have higher fees than fixed start with: Your Benchmark Cost as a % of assets with explicit fees 57.4 bp

income and cash options Includes the stock multiply by: Plan assets with explicit fees1 in $000s $1 137 900

Step 1) We use regression analysis on our entire database to predict the cost for your Plan Assets with Explicit Fees1. The regression equation adjusts for differences in:

Your benchmark cost is calculated in 2 steps. Use regression analysis to calculate your Benchmark Cost as a % of plan assets with explicit fees and costs1


income and cash options. Includes the stock multiply by: Plan assets with explicit fees1 in $000scomponent of balanced options. equals: Your Benchmark Cost in $000s

divide by: Your total plan assets in $000sStep 2) The predicted cost determined in the first step equals: Your Benchmark Cost as a % in bp4 of total plan assets 57 bpis then spread over your total plan assets includingyour hidden low cost assets (i.e., traditional GICs, Footnotescompany stock and self-directed accounts). This stepadjusts for differences in hidden & low cost assets; asthey increase, your costs decrease.

1. Your plan assets with explicit fees were $1,138 million which equals your total plan assets at end of 2010 of $1,145 million minus your hidden and low cost assets of $7 million. Hidden and low cost assets are traditional GICs, company stock, loans and self-directed accounts. Log 10 of your plan assets with explicit fees in millions was 3.06.2. Your assets with explicit fees per account were $49,313 which equals your plan assets with explicit fees of $1,138 million divided by your 23,075 member accounts. Log 10 of your assets with explicit fees per account in 000s was 1.69.3. % Stock is the proportion of assets invested in stocks as a % of plan assets with explicit fees.4. bp = basis points. 1 bp = 1/100th of 1% (e.g., 57 bp = 0.57%).

$1,144,900

$1,137,900$6,537


In 2010, your plan ranked in the high value added, low cost quadrant.

In an ideal world, the more you pay (i.e., the larger yourexcess cost) the more you get (i.e., the higher yourvalue added). If this were true, you would see an upwardsloping relationship in this graph. Clearly, this is not the case. CEM's research has shown consistently that there is norelationship between what plans spend and what theyreceived.

In this report, we have measured your plan's overall costeffectiveness ranking.You placed in the high value added, low costquadrant. As plan sponsors, you should also know the costeffectiveness of each of your investment options. Thisdetailed option analysis is available in our DefinedContribution Fiduciary Oversight Report. See pages 18 &19 for more details.

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High Value Added & Low Cost

High Value Added & High Cost

© 2011 CEM Benchmarking Inc. ` Page - 16

Your participants are primarily interested in the performanceof the investment options they have chosen. This reportprovides a one-year snapshot of your plan's relativeperformance. It is more useful to compare yourperformance over a longer time period because relativeannual performance can be very volatile. The DC FiduciaryOversight Report also provides a longer time frameanalysis. -3%

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Low Value Added & Low Cost

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© 2011 CEM Benchmarking Inc. ` Page - 16

Most plan sponsors contribute to DC plans by matching participants' contributions, even when the DC plan is the Primary plan.

How are plan sponsors contributing to DC plans?In this report, plans that offer DC plans tomembers that already participate in anongoing DB plan are classified as supplementary DC Plans. DC plans that You U.S. You U.S.are not supplementary to an ongoing DB planare considered separately and called primaryplans. This distinction allows better Fixed Contribution - Employer No 14% 37%comparison of plan benefits for the twodifferent groups. Fixed Contribution - Employee Yes 6% 6%

Match Contributions No 79% 86%

Profit Sharing component No 11% 25%

Primary DC PlansSupplementary DC Plans

2010 2010

© 2011 CEM Benchmarking Inc. Page - 17© 2011 CEM Benchmarking Inc. Page - 17

CEM offers a Defined Contribution Fiduciary Oversight Report.

This report addresses vital issues that concern DC plan fiduciaries including:

Monitoring Your Investment Options

• Are your investment options delivering reasonable returns, risks and rewards?• Are your investment option costs reasonable?

Diversification Issues

• Do your investment options provide an adequate spectrum of risks and rewards?• Does the number and variety of investment options you offer differ from other plans?• Are your plan participants adequately diversified?

Plan Costs

• What is the total cost of the plan? Is it reasonable, high or low?• Why are your costs high or low taking into account the amounts invested in active versus passive options, retail versus

institutionally priced options, your average account size, etc.?• Is your plan cost-effective?

Our unique database of primarily large DC plans also provides insight into current 'best practices' such as:

Competitiveness of Plan Features

• Does your plan provide the same features as other leading plans?• Are your plan's participation and contribution rates increasing?• Is your matching policy competitive compared to other plans?


CEM's Fiduciary Oversight Report is customized for your plan. Itcompares you to a custom peer group of similar sized plans. Yourpeer group is most valuable for cost comparisons since size impactscosts.

• The following 17 peers were chosen as your custom peer group.• Median size of $1,145M compared to your $1,145M.

Ashland-HerculesBlack & VeatchDow Corning CorporationEnergy Futures Holdings Corp.FDICMarshall & Ilsley CorporationMichelin North America Inc.NCR CorporationNorfolk Southern CorporationPentegraPPL CorpPrincipal Life Insurance Co.Sony Electronics, Inc.State of OregonTexas Health ResourcesUnited States Steel and Carnegie Pension PlanWellington Management Company

• Your peers were selected based on total plan size and • The report costs $25,000, which includes a presentation of youraverage account size since our research shows that this is results in person to your board or management team.the primary driver of costs. • For more information, give us a call:• By comparing each of your investment options to your Mr. Michael Healepeers with similar investment options, we provide you with the Tel: 416-369-0468information you need to adequately monitor each of your E-mail: [email protected] options' return, reward, risk & cost performance. website: www.cembenchmarking.com

Possible Custom Peer Group forState of Oregon


Appendix A - Data Quality Appendix B - Your Data

We recognize that the value of the information contained in these reports Your data is summarized on the following 6 pages. As discussed withis only as good as the quality of the data we receive. Therefore, we work you (or the person who provided your plan's data) during the datavery hard at getting good data. Our procedures for checking and improving confirmation process, your original survey responses may have changedthe data include: for the following reasons:

• Improved Survey Clarity - 14 years of feedback from survey participants 1. Gross versus Net Returns - We permit participants to report returnshas led to improved definitions and survey clarity. on either a net or gross basis. In order to ensure 'apples-to-apples'

comparisons, we grossed up net returns as follows:• Customer Confirmation - A six page summary of each respondent'sdata as it appears in our database was sent to all survey participants for Gross return = Net return + Netted costs /Avg Holdings. confirmation prior to preparing this report. Your data is summarized inAppendix B (which begins on the following page). 2. Returns not available - We requested that you indicate 'n/a' if full year

returns were unavailable for an investment option. The default for an • Computer and Analyst Verification - We compare responses to norms unavailable return is to set it equal to your investment option's benchmark for the survey universe and to each sponsor's prior year data when return.available. This typically results in questions that we send to eachsurvey respondent and follow-up by phone and/or email. 3. Costs not provided - One of our key themes is that you must know your

costs if you want to manage your plan effectively. We recognize, however,In addition, the quality of our data continues to improve because of: that some costs such as Fiduciary Oversight costs can be difficult to

obtain. Therefore, if you were unable to provide us with your costs, or your• Learning Curve - This is our 14th year of gathering this data and best estimate of these costs, we imputed a figure using industry data.experience is teaching us and the participants how to do a better job.

4. Your benchmark was ineligible - To ensure apples-to-apples• Growing Universe - As our universe of respondents continues to comparisons we insist that benchmark returns reflect an investableincrease in size, so does our confidence in the results as unbiased errors universe for an annual period. If your benchmarks include premiums suchtend to average themselves out. As a result of the above, data quality has as the S&P500 + 1% we have used the base as your benchmark andimproved dramatically over the fourteen year period we have been ignored the premium. Similarly, if you have indicated a non-investablebenchmarking. We feel there will always be room for improvement and benchmark such as 'Lipper Averages', we have substituted our defaultwe welcome any suggestions on how to further improve data quality. benchmark portfolios in its place.

IMPORTANT: WE WILL ACCEPT CORRECTIONS TO YOUR DATAAT ANYTIME.


Appendix B - Your Survey Data (1 of 6)

General Information 2010 2009 2008 2007 2006

Contact Matthew Rickard Matthew Rickard Matthew Rickard Matthew Rickard Gay Lynn Bath

Data provided by:

Plan sponsor type (Corporate, Public, Other) Public Public Public Public Public

Industry category GOV GOV GOV GOV GOV

Type of plan: 457 Deferred 457 Deferred 457 Deferred 457 Deferred 457 Deferred

Total market value of plan assets ($ millions) $1,144.9 $999.3 $813.0 $1,040.1 $959.0

Total number of participants in plan 23,075 22,964 23,001 22,273 21,174

Option returns are:Net of management

and admin feesNet of management




and admin fees

Investment management fees are paid by: Participants Participants Participants Participants Participants

Do you have a default investment option? no no no yes yes

If yes, which option? 0

Are some of your DC participants also covered by a defined benefit (DB) plan ?

All All All All All

Survey cleaning notes:

Important: If you find any errors, please let us know. We want to make sure your results and our research are based on the best available data.our research are based on the best available data.

Oregon Savings Growth PlanState of Oregon

© 2011 CEM Benchmarking Inc. Appendix B - 21

Appendix B - Your Survey Data (2 of 6)Administrative & Fiduciary Costs 2010 2009 2008 2007 2006Do you use a "bundled provider"? No No No No NoRecordkeeping* Cost ($000s) 1,471.8 1,265.9 1,343.8 1,487.0 1,313.0

Paid by Participants Participants Participants Participants ParticipantsBundled? No No

Fiduciary oversight-internal Cost ($000s) 703.9 589.8 646.1 712.0 620.0Paid by Participants Participants Participants Participants Participants

Bundled? No No

Fiduciary oversight-external Cost ($000s) 65.0Paid by Participants Participants Participants Participants

Bundled? No

Communication/education Cost ($000s) 67.4 67.2 66.8 61.8 61.0Paid by Participants Participants Participants Participants Participants

Bundled? No No

Custodial & trustee Cost ($000s) 175.0 175.0 175.0 175.0 175.0Paid by Participants Participants Participants Participants Participants

Bundled? No No

Audit Cost ($000s)Paid by Participants Participants Participants

Bundled?

Other:

Description Includes fees for processing QDROs and loan admin fees.

Cost ($000s) 27.0Paid by Participants

Bundled NoTotal Administrative & Fiduciary Costs 2,510.1 2,097.9 2,231.7 2,435.8 2,169.0less Rebates (if applicable from below)Total A&F Costs less Rebates 2,510.1 2,097.9 2,231.7 2,435.8 2,169.0* If you were unable to provide a breakdown of your administrative & fiduciary costs, we have placed the cost in recordkeeping.

Rebates and Plan Expense Reimbursement 2010 2009 2008 2007 2006Do you participate in any funds that provide rebates or plan expense reimbursements? Yes Yes Yes Yes YesIf Yes: 1) Are they distributed back to

participants by reducing the management fee on options? Yes Yes Yes Yes Yes

or 2) Do they reducerecordkeeping costs?

If Yes - $ value of rebates (000s)?or 3) Do they reduce

administrative or fiduciary costs?If Yes $ value of rebates (000s)?


Appendix B - Your Survey Data (3 of 6)Plan Design - DC is a supplementary plan to a DB plan

2010 2009 2008 2007 2006

Does the plan have automatic enrolment? no no no no no If yes,

1) What is the initial automatic contribution rate? (as a % of salary)

2) What (if any) is the automatic annual increase in the contribution rate?

(as a % of salary)

3) What is the maximum rate achieved via automatic increases? (as a % of salary)

no no no no noIf yes, what is the amount? (as a % of salary)

yes yes yes yes noIf yes, what is the amount? (as a % of salary)

Is there a profit-sharing component? no no no no no

If yes, describe the terms:

Contribution or Match FeaturesDo you match employee contributions? No No No No No

What are the terms? 2010 a) b)

2009 a) b)

Does the EMPLOYEE have a non-elective fixed contribution?

Does the EMPLOYER have a non-elective fixed contribution?

Other:

Other:


Appendix B - Your Survey Data (4 of 6)Plan Design - DC is primary retirement plan

2010 2009 2008 2007 2006

Does the plan have automatic enrolment?If yes,

1) What is the initial automatic contribution rate? (as a % of salary)

2) What (if any) is the automatic annual increase in the contribution rate?

(as a % of salary)

3) What is the maximum rate achieved via automatic increases? (as a % of salary)

If yes, what is the amount? (as a % of salary)

If yes, what is the amount? (as a % of salary)

Is there a profit-sharing component?

If yes, describe the terms:

Contribution or Match FeaturesDo you match employee contributions? No No No No No

What are the terms? 2010 a) b)

2009 a) b)

Other:

Other:

Does the EMPLOYEE have a non-elective fixed contribution?

Does the EMPLOYER have a non-elective fixed contribution?



Other Plan Characteristics

Service, Communication and Education 2010 2009 2008 2007 2006Access to investment advice No No No No No

If yes, via 1) 1-on-1 counseling? Yes/NoCosts Paid by

2) Independent modeling software? Yes/ NoCosts Paid by

3) Phone counseling? Yes/NoCosts Paid by

Loan FeaturesDoes your plan permit loans? yes yes yes yes noIf yes:

• How many loans are outstanding in total? 1,322 728 529 211• What is the average loan balance, in $ ? 9,046 7,784 7,215 8,782• Are administration costs charged to participants for loans? yes yes yes yes no

Managed Accounts

No NoIf Yes: 1) How many participants have managed accounts? 2) Total market value of assets in managed accounts? (in $ millions)

3) What is cost of managing these accounts? (in $ 000s)

Does the plan offer a managed account service to participants?


Asset Class Provider Option Holdings AnnualReturns

PercentPassive

Mgmt Costs

($ mils) (%) (%) Description Return (bps)

Domestic Stock BlackRock Stock Index Option (LC Passive) - Inst Priced Retail 106.4 16.9% 100% Russell 3000 16.9% 4 bpDomestic Stock Multi-Mgr Large Cap Growth (LC Growth) - Inst Priced Retail 87.5 15.9% 40% Russell 1000 Growth 16.7% 38 bpDomestic Stock Multi-Mgr Large Cap Value (LC Value) - Inst Priced Retail 86.7 13.7% 40% Russell 1000 Value 15.5% 37 bpDomestic Stock Multi-Mgr Small/Mid Cap - Inst Priced Retail 161.9 26.7% 25% Russell 2500 26.7% 50 bpInternational/Global Multi-Mgr International Equity Option (Equity ) - Inst' 100.6 9.2% 40% MSCI EAFE net 7.8% 58 bpFixed Income/Bond Multi-Mgr Intermediate Fixed Income (Broad ) - Inst'l 90.3 8.0% 33% Barclays US Aggregate 6.5% 10 bpGICs/Stable Value Dwight Asset Management Stable Value - Inst'l 181.3 1.8% 0% 5-year Constant Maturing Treasury (CMT) 0.3% 17 bpCash/Money Market Fund SSgA Short-term fixed - Inst'l 56.3 0.0% 0% Merrill Lynch 90-day T-bill 0.1% 5 bpBalanced/Lifestyle BlackRock LifePath Index Retirement Fund Q (Short/Cons ) - Inst Priced Retail 82.1 10.7% 100% LifePath® Index Retirement Fund Q custom benchmark 11.0% 10 bpBalanced/Lifestyle BlackRock LifePath Index 2015 Fund Q (Intermed/Mod ) - Inst Priced Retail 70.6 11.7% 100% LifePath® Index 2015 Fund Q custom benchmark 11.9% 10 bpBalanced/Lifestyle BlackRock LifePath Index 2025 Fund Q (Long/Aggr ) - Inst Priced Retail 25.6 13.3% 100% LifePath® Index 2025 Fund Q custom benchmark 13.7% 10 bpBalanced/Lifestyle BlackRock LifePath Index 2020 Fund Q (Long/Aggr ) - Inst Priced Retail 50.9 12.7% 100% LifePath® Index 2020 Fund Q custom benchmark 12.9% 10 bpBalanced/Lifestyle BlackRock LifePath Index 2050 Fund Q - Inst Priced Retail 4.9 16.0% 100% LifePath® Index 2050 Fund Q custom benchmark 16.3% 10 bpBalanced/Lifestyle BlackRock LifePath Index 2045 Fund Q - Inst Priced Retail 2.1 15.6% 100% LifePath® Index 2045 Fund Q custom benchmark 15.8% 10 bpBalanced/Lifestyle BlackRock LifePath Index 2040 Fund Q - Inst Priced Retail 4.7 15.2% 100% LifePath® Index 2040 Fund Q custom benchmark 15.4% 10 bpBalanced/Lifestyle BlackRock LifePath Index 2035 Fund Q - Inst Priced Retail 10.3 14.5% 100% LifePath® Index 2035 Fund Q custom benchmark 14.9% 10 bpBalanced/Lifestyle BlackRock LifePath Index 2030 Fund Q - Inst Priced Retail 15.7 14.2% 100% LifePath® Index 2030 Fund Q custom benchmark 14.3% 10 bpOther Loan Loan - 7.0 0.0% 0% n/a (default) 0 bpTotal 1,144.9 Total 24 bp

Benchmarks


Investment Options - Holdings and Returns Benchmarks & Direct Investment Costs


1

Oregon Savings Growth Plan Annual Review April 25, 2012

Purpose To provide an annual update of the Oregon Savings Growth Plan (OSGP) structure and performance, with recommended action by the OIC. Background The Oregon Savings Growth Plan (Plan or OSGP) is the State of Oregon’s 457 Deferred Compensation plan. It is a voluntary supplemental retirement plan that provides eligible state and local government employees the opportunity to defer a portion of their current salary on a pre‐tax basis. These deferrals are invested in various Investment Options until they are drawn upon by the employee, typically at the time of retirement. More than 23,000 employees participate in the Plan, which has assets totaling more than $1.17 billion (as of December 31, 2011). Oversight of the Plan’s administrative operation is the responsibility of the Oregon Public Employees Retirement Fund Board (OPERF Board), with support from the OSGP manager. Additional oversight is provided by a seven member Deferred Compensation Advisory Committee established under ORS 243.505. The Deferred Compensation Advisory Committee studies and advises the PERS Board on various activities regarding the Plan, such as:

• State and federal legislative issues related to the administration of a deferred compensation plan; • The administration of the catch‐up and the financial hardship provisions in Section 457 of the IRS Code; • The OSGP administrative operations fees and procedures and plan participant actuarial statistics; • Ways and means to inform and educate eligible employees about the Plan; • The expressed desires of participating employees.

Oversight of the Plan’s investment program is the responsibility of the Oregon Investment Council and is supported by Treasury staff. The Plan offers an array of eight core investment options (Short‐Term Fixed, Stable Value, Intermediate Bond, Large Company Value Stock, Stock Index, Large Company Growth Stock, International Stock, and Small/Mid‐Size Company Stock) and ten target retirement date funds (the multiple target date funds are considered to be “one” option). Plan participants may individually direct their salary deferrals to any of these options. OSGP Structure The Plan’s investment options employ a mix of passive and active management using both institutional commingled trust funds and mutual funds, within each option. OSGP uses several managers currently retained for OPERF. The benefits of this structure include: 1) lower overall investment management fees; 2) more effective monitoring of funds/managers by staff; 3) account holders focus on the asset class decision, not active manager selection; 4) diversified and complementary portfolio management styles allow reduced volatility (as measure by tracking error) within each option; and 5) efficient management of participant directed cash flows between options. The Plan’s target retirement date funds are institutional commingled trusts managed by BlackRock (formerly BGI), that are indexed implementations of ten unique strategic asset allocation plans, which are designed for participants according to their anticipated year of retirement. The following table shows the underlying mandates, and associated management fees, contained within each OSGP option. CEM Benchmarking studies (State of Oregon 2010 CEM Survey Results attached) for previous calendar years show progressively lower year over year OSGP Investment Option costs. From calendar year

2

2007 to 2010, total investment costs dropped from 35 basis points to 24 basis points. The cost reductions occurred as a result of: 1) dropping the Balanced Fund Option in favor of target date Funds, lowering costs from 26 bps to 10 bps in 2008; 2) increased participant driven allocations to target date funds from 19.6 percent to 24.3 percent; and 3) negotiating a lower fee for the SSgA GSTIF fund from 10 bps to 5 bps in 2009, lowering the fees of the MFS Value fund from 73 bps to 44 bps in 2011, and lowering the fees of the T Rowe Price fund from 73 bps to 65 bps in 2011,

ENDING FUND MARKET VALUE

% OF OPTION MKT VALUE NET FEE WEIGHTED

AVERAGE SHORT TERM FIXED OPTION SSgA GSTIF 54,934,008 100.0% 5.0 5.0

Option Total 54,934,008 100.0% 5.0STABLE VALUE OPTION Dwight Asset Management 194,849,308 100.0% 24.0 24.0

Option Total 194,849,308 100.0% 24.0INTERMEDIATE FIXED INCOME OPTION BlackRock US Debt 35,195,678 34.5% 4.0 1.4Fidelity Broad Market Duration 33,505,376 32.8% 15.0 4.9Wellington Capital Bond Core Plus 33,404,514 32.7% 10.0 3.3

Option Total 102,105,568 100.0% 9.6LARGE CAP VALUE EQUITY OPTION BlackRock Russell 1000 Value 34,525,486 40.3% 3.2 1.3Dodge and Cox (DODGX) 17,064,364 19.9% 42.0 8.4MFS Value I 17,003,938 19.8% 44.0 8.7LSV Value (LSVEX) 17,166,019 20.0% 64.0 12.8

Option Total 85,759,806 100.0% 31.2TOTAL MARKET EQUITY INDEX OPTION BlackRock Russell 3000 Fund 105,934,644 100.0% 3.5 3.5

Option Total 105,934,644 100.0% 3.5LARGE CAP GROWTH EQUITY OPTION BlackRock Russell 1000 Growth 35,771,998 40.2% 3.2 1.3American Funds AMCAP A (AMCPX) 17,781,702 20.0% 43.0 8.6Wells Fargo Adv. Endeavor Sel. I (WFCIX) 17,424,575 19.6% 80.0 15.7Delaware US Growth Instl (DEUIX) 18,021,180 20.2% 60.0 12.1

Option Total 88,999,455 100.0% 37.7INTERNATIONAL EQUITY OPTION Artisan International (ARTIX) 8,207,339 10.1% 87.0 8.8BlackRock EAFE Fund F 27,967,966 34.5% 8.0 2.8DFA Emerging Markets Core I (DFCEX) 12,159,405 15.0% 67.0 10.0GMO Foreign III (GMOFX) 12,264,641 15.1% 75.0 11.3Oakmark International I (OAKIX) 12,377,398 15.3% 71.0 10.8Marsico International (MIOFX) 8,098,359 10.0% 131.0 13.1

Option Total 81,075,108 100.0% 56.9SMALL/MID CAP EQUITY OPTION BlackRock Russell 2000 37,298,819 24.6% 3.5 0.9American Beacon SCV Instl (AVFIX) 34,688,354 22.9% 82.0 18.8Callan Small Cap Equity Fund 22,926,690 15.1% 75.0 11.4Columbia Acorn Z (ACRNX) 33,828,833 22.4% 41.0 9.2T Rowe Price Midcap Growth Instl (PMEGX) 22,597,684 14.9% 55.0 8.2

Option Total 151,340,380 100.0% 48.4

3

ENDING FUNDMARKET VALUE

% OF OPTION MKT VALUE NET FEE WEIGHTED

AVERAGE BLACKROCK LIFEPATH 2015 77,611,066 26.3% 10.02020 56,546,628 19.1% 10.02025 28,170,384 9.5% 10.02030 18,620,018 6.3% 10.02035 12,201,147 4.1% 10.02040 6,089,027 2.1% 10.02045 2,666,977 0.9% 10.02050 5,801,128 2.0% 10.02055 0.0% 10.0In Retirement 87,875,645 29.7%

Option Total 295,582,022 100.0% 10.0SELF‐DIRECTED BROKERAGE ACCOUNT Charles Schwab 1,588,119 100.0%

Option Total 1,588,119 100% N/A

Although not under OIC oversight, OSGP administrative costs were lowered from 22 basis points to 18 basis, points in 2011. The costs are comprised of a 10 basis point recordkeeping fee, and an 8 basis point administrative fee, which includes: OSGP staffing and consultant costs, custodial bank costs, and participant education/communication costs. The CEM Benchmarking study for calendar year 2010 shows that the total plan cost of 48 basis points was below the benchmark cost (CEM’s customized predicted total plan cost of OSGP) of 57 bps. Discussion on Recent Enhancements At the February 23, 2011, OIC meeting, staff and Arnerich Massena recommended, and the board approved, three changes to the OSGP lineup. Those changes were: 1) the addition of a self‐directed brokerage window managed by Charles Schwab; 2) the addition of the Callan Small Cap Equity fund to the Small/Mid Cap Equity option; and, 3) the addition of the DFA Emerging Markets Equity fund to the International Equity option. While the following section discusses those changes in more detail, all recommendations were implemented as planned, and each enhancement has been meeting its objective. Self‐Directed Broker Option (SDBO) The SDBO is designed to complement the core OSGP investment options by allowing participants to invest in a wider selection of investments than provided within the plan. As opposed to a traditional brokerage account, the SBDO can only be used to invest in mutual funds offered at Schwab (currently 4,700 mutual funds, including 2,700 available with no loads and no transaction fees). In order to utilize the option, a participant must have a balance of at least $20,000, and only 50% of the account balance can be invested in the option. As of December 31, 2011, 0.1 percent of plan assets are invested in the option. Callan Small Cap Equity fund The Callan Small Cap Equity fund was funded in September 2011 at a target weight of 15 percent of the Small/Mid Cap Equity option. The fund is multi‐managed, with 40 sub‐advisors managing the underlying securities. The two fundamental beliefs underpinning the strategy are: 1) the “average” small cap manager outperforms a capitalization‐weighted benchmark; and 2) small, less capacity‐constrained products have an advantage over larger products employing a similar strategy. The rationale for the addition was to address a style imbalance and to improve the overall risk and return characteristics of the option.

4

DFA Emerging Markets Equity Fund The DFA Emerging Markets Equity fund was funded in September 2011 at a target weight of 15 percent of the International Equity option. The fund is focused on emerging markets and is highly diversified, holding over 3,300 stocks. The rationale for this addition was to increase the diversification within the option by including a dedicated emerging markets manager. Discussion on Stable Value Provider Dwight Asset Management, a Vermont‐based stable value money manager is the OSGP Stable Value Option provider. On February 7, 2012, Goldman Sachs Asset Management (GSAM) announced that it would acquire Dwight Asset Management (Dwight), in a deal slated to close in May 2012. Staff has been closely monitoring the acquisition and the impact it is expected to have on Dwight Asset Management. Staff and the OSGP consultant have had numerous discussions with various stable value providers, since the GSAM announcement. Staff may be returning to an upcoming OIC meeting with potential changes to the Stable Value Option within OSGP. OSGP Consultant Contract At the February 2009 OIC meeting, staff recommended the retention of Arnerich Massena to provide consulting services to the OSGP. This consulting contract became effective August 31, 2009. The original term of the contract is three years and can be extended for two additional two‐year periods. Treasury Staff and the OSGP administrator have been very satisfied with the level of service and the consulting services provided by Arnerich Massena and recommend that that the OIC extend the contract for an additional two‐year period. Recommendations Approve the extension of the Arnerich Massena Investment Consulting Contract for OSGP for the period starting August 31, 2012 through August 31, 2014.

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T H E O R E G O N S A V I N G S G R O W T H P L A N P R E S E N T S

Measures to determine success of using Financial Engines:

1. How many participants are accessing the product on the website? What percentage do we want to see? Industry average is less than 10%.

2. How many participants are using one‐on‐one advice? 3. What kind of changes to investment strategies are we seeing? 4. Are participants contributing more money? 5. Have roll‐outs decreased? 6. Survey participants using Financial Engines during the first year to see if they would be willing to

pay for future use.

Things to consider:

1. Inability to import PERS information ‐ or a participant's estimated pension income. Participants will be able to enter estimates on their own.

2. Will need DOJ opinion 3. Will have to be approved by PERS board.

2011-13 Deferred Compensation Section - FSD - Budget ExecutionSummary Budget AnalysisFor the Month of: March 2012

Biennial Summary

Actual Exp. Projected TotalCategory To Date Expenditures Est. Expend. 2011-13 LAB VariancePersonal Services 472,305 798,001 1,270,306 1,279,192 8,886Services & Supplies 33,637 61,921 95,558 99,146 3,588Capital Outlay 0 0 0 0 0

Total 505,942 859,922 1,365,864 1,378,338 12,474

Monthly Summary

Category Actual Exp. Projections VariancePersonal Services 51,426 51,599 173Services & Supplies 5,734 2,500 (3,234)Capital Outlay 0 0 0

Total 57,159 54,099 (3,061)

48000

50000

52000

54000

56000

58000

60000

62000

JUL SEP NOV JAN MAR MAY JUL SEP NOV JAN MAR MAY

2011-13 Actuals vs. Projections Projections

Actuals

0.00930.009050068

0

0.005

0.01

0.015

0.02

0.025

Previous Current

Biennial Variance Tracker

% of LAB Target

53200.04653 52478.33

2500 3737.4755560 0

0

10000

20000

30000

40000

50000

60000

Avg Future Projections Avg Actuals

Average Future Projections vs. Average Actuals

Personal Services

Services & Supplies

Capital Outlay

5/1/201212:03 PM

DEFERRED COMP

FUND 766 SFMA/TREASURY RECONCILIATION

FOR December 2011

ACCOUNT 4590011000

BEGINNING rev exp ENDING

BALANCE DEBITS CREDITS BALANCE

PER SFMS 89 Screen 12/31/2011 1,113,763.37 82,498.49 83,478.06 1,112,783.80

11/11 Excess Interest 586.23 -586.23 0.00

12/11 Excess Interest 813.69 813.69

Adjusted Treasury balance 1,114,349.60 82,725.95 83,478.06 1,113,597.49

rev exp

INTEREST CHECKS

BEGINNING & & ENDING

BALANCE CREDITS DEBITS BALANCE

PER TREASURY STATEMENT 12/31/2011 1,188,684.31 75,982.83 787,070.39 477,596.75

Outstanding 11/11 Cost Allocation:

CA111130 -73,734.71 -73,734.71 0.00

-600.00 -600.00 0.00


CA111232 74,299.26 -74,299.26

BT112245 -710,000.00 710,000.00

BTV01584 300.00 300.00


Difference 0.00 (0.00)

G:\DEFCOMPF\DCADMIN\ASSET REPORTS\2011\766 2011 Dec.xls

Prepared by: _________

Date:_______________

Reviewed by:_________

Date:______________

5/1/2012 12:03 PM

5/1/201212:03 PM

DEFERRED COMP

FUND 766 SFMA/TREASURY RECONCILIATION

FOR December 2011

ACCOUNT 4590011000

BEGINNING rev exp ENDING

BALANCE DEBITS CREDITS BALANCE

PER SFMS 89 Screen 12/31/2011 1,113,763.37 82,498.49 83,478.06 1,112,783.80

11/11 Excess Interest 586.23 -586.23 0.00

12/11 Excess Interest 813.69 813.69


rev exp

INTEREST CHECKS

BEGINNING & & ENDING

BALANCE CREDITS DEBITS BALANCE

PER TREASURY STATEMENT 12/31/2011 1,188,684.31 75,982.83 787,070.39 477,596.75


CA111130 -73,734.71 -73,734.71 0.00

-600.00 -600.00 0.00


CA111232 74,299.26 -74,299.26

BT112245 -710,000.00 710,000.00

BTV01584 300.00 300.00


Difference 0.00 (0.00)

G:\DEFCOMPF\DCADMIN\ASSET REPORTS\2011\766 2011 Dec.xls

Prepared by: _________

Date:_______________

Reviewed by:_________

Date:______________

5/1/2012 12:03 PM

Upcoming Advisory Committee MeetingMay 9, 2012 • 9:30 a.m.

PERS Headquarters

11410 SW 68th Parkway • Tigard

FIRST QUARTER

2012

Plan Information Line: (800) 365-8494 Plan website: http://osgp.ingplans.com

In this issuePlan account security changes

BlackRock LifePath® 2055 Fund

Roth 457 coming soon

Access your Plan account on your mobile device

A mobile game to boost your financial brain power

Sending in OSGP forms

Statements change coming

Plan account security changesA security enhancement in effect since December 2011 requires OSGP participants

to establish five security questions for their account. The purpose is to help

guard your online identity and prevent someone else from accessing your online

account information.

After you select the security questions, you will be asked to review your account’s

Mail Delivery Preferences. You can choose whether to have account statements and

other correspondence delivered by mail or electronically to your account mailbox.

You will also have the option to provide your email address and mobile phone

number to reflect your information delivery preferences.

In the future, if you forget your password, you will be asked a set of security

questions that, if answered correctly, will allow you to access your account.

To save time during future logins, you can register the computer you use most

often to access your account. If you log in from a different computer, you will

input your username and password and answer three of your five security

questions. Then you can select the checkbox to register that computer so you

will not be prompted to answer the security questions for future logins.

BlackRock LifePath® 2055 FundOSGP has added the BlackRock LifePath 2055 Fund to the investment lineup.

This target date retirement fund is managed for investors who plan to retire

or begin taking withdrawals around the year 2055. The Fund invests in a

combination of equity, bond and money market funds, resulting in a widely

diversified holding all in one fund. BlackRock LifePath Funds adjust the asset

allocations so participants don’t have to worry about changing funds as they

age. You should carefully review all fund information before making an investment

decision. For the fund fact sheet, go to www.oregon.gov/pers/osgp or call the

Plan Information Line at (800) 365-8494.

Roth 457 coming soon OSGP will implement the Roth 457 later this year. A Roth 457 will allow participants

to contribute to OSGP on an after-tax basis. The annual contribution limits for the

Roth 457 and the pre-tax 457 Plan are the same. Anything contributed to the Roth

would be invested in the same options currently available in OSGP.

The conversion provision will allow participants to convert any pre-tax amounts

from OSGP that are eligible for rollover (e.g., at the time of termination of

employment or retirement) or rollover funds participants have in OSGP from a

401(k) plan, 403(b) plan, or pre-tax IRAs into a Roth. The amount rolled over must

qualify as an eligible rollover distribution and the participant must be eligible for

a distribution under the Plan.

advisory cornerLearn and serve Advisory Committee vacancy

Oregon state law provides for an OSGP

deferred compensation advisory committee.

The committee has seven members selected

by the PERS Board to reflect a cross-section

of participant groups. The key role of the

advisory committee can best be described

as participant representation. Additionally, it

gives information and advice to OSGP and the

Public Employees Retirement System Board,

provides a forum for feedback, and offers an

opportunity for interaction. This committee

meets in Salem or Tigard four times per year.

There is one vacancy on this seven-member

body. This position is open to any OSGP

participant employed by a local government

or school district. The position becomes

effective July 1, 2012, and the first meeting

will be held August 8 in Salem. It is very

important that the member is available to

attend all meetings. Mileage reimbursement

is provided.

We invite employees interested in filling

this vacancy to send a letter of interest

along with a brief résumé to Gay Lynn Bath,

Deferred Compensation Manager.

Email: [email protected]

Phone: (503) 378-6425

Mail to her attention at:

800 Summer St. NE, Suite 200

Salem, OR 97301

Applications will be accepted until May 1, 2012.

SKU#OR1Q12

OSGP website:http://osgp.ingplans.com

OSGP Information Line:(800) 365-8494

PERS/OSGP website:www.oregon.gov/PERS/OSGP

Editorial contributions: Gay Lynn Bath, OSGPDavid Crosley, PERSMarcy Loomis, ING

This newsletter is not intended to provide legal, tax, or investmentadvice. For such advice, participants should contact their legal, tax,or investment advisers.

© 2012 ING. All Rights Reserved.

SAVINGS GROWTH PLAN

quarterly calendarTransactions made on these dates when theNew York Stock Exchange is closed will beprocessed the following business day.

• Monday, May 28, 2012• Wednesday, July 4, 2012

*

A new mobile account application is available for

owners of iPhone®, iPod touch®, and Android™

devices. The ING Retirement Plan Account mobile

application can be downloaded onto your mobile

device so you can quickly check your balance and

much more. Here are some of the account details

you’ll be able to view on the go:

• Current balances

• Balance history

• Balances by asset class and fund

• Personal rate of return

• Fund performance

To help you manage your account, the mobile

application also allows you to:

• Change your contributions

• Transfer money among funds

• Reallocate your account balance

• Change how future contributions

will be invested

You must sign in to your online account at least

once before you access ING’s new mobile app.

Use your smartphone to download the app

directly from the App StoreSM or through the

Android Market (keywords: ING Retire). For more information, visit mobile.ingplans.com.

Access your Plan account on your mobile device

iPhone, iPod touch are trademarks of Apple Inc., registered in the U.S. and other countries. App Store is aservice mark of Apple Inc. Android is a trademark of Google Inc.

A mobile game to boost your financial brain powerSTRUCT is a game of fast-paced

action for iPhone®, iPod touch®,

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Sending in OSGP forms All OSGP forms should be sent or faxed to the Salem

office. No forms should be mailed or faxed directly

to ING. If you have any questions, please call us

at (503) 378-3730.

Statements change comingPaper account statements are mailed every quarter.

OSGP is considering mailing paper account statements

twice a year instead of four times beginning in 2013.

Current account information is accessible in the

My Account section of the Plan website. You can access

and print account statements by logging into your

account at http://osgp.ingplans.com or by calling

(800) 365-8494 to request a statement.

1

DEFERRED COMPENSATION GOALS FOR 2012

The program will focus on two main goals in 2012. These goals and their associated strategies will allow for the expected growth of the program, improve administrative efficiency, lower administrative fees, and increased staff skills to support the program and provide excellent customer service to participants. Goal 1: Increase participation in the plan. Status Strategy Due date Responsible leader Q1 Status Increase EE Workshop attendance by 5% over 2011 2011: 2075 2012 Goal: 2178 1st Quarter: 634 2nd Quarter: 3rd Quarter: 4th Quarter:

• Update workshop mailer/flyer

• Utilize new enrollment process by sending email reminder, invitation to invite a friend.

• Create payroll stuffers for paychecks and direct deposits

• Advertise workshops and seminars on ilearnoregon.

• Pre-call state agencies two weeks before workshops are scheduled

Ongoing Ongoing

Karen Blanton

Keep new enrollments from “OSGP Highlights” workshop attendees above 65% 1st Quarter: 67% 2nd Quarter: 3rd Quarter: 4th Quarter:

• Hold “enrollment workshop” at 11:00a on day of open workshops.

• Postcard/email attendees that haven’t enrolled.

Ongoing Ongoing

Karen Blanton Enrollment workshop is held after the wealth builder’s workshop.

2


Goal 1: Increase participation in the plan. Deliverable Strategy Due date Responsible leader Q1 Status Increase the number of worksite/Brown Bag presentations hold at status quo 2011. 2012: 160 1st Quarter: 43 2nd Quarter: 3rd Quarter: 4th Quarter:

• Promote these presentations in Perspective, the Plan Update, on websites and in the workshops.

• Direct mail all agencies under 50 employees with list of “Brown Bag” workshops.

Ongoing

Karen Blanton Developed new e mail flyer to increase participation and e mailed to agencies 2 weeks prior to brown bag sessions. Contacted prior agencies to schedule follow up sessions. .

Increase Participation for state agencies by 2% 2012: 29.3% 1st Quarter: 28.91% 2nd Quarter: 3rd Quarter: 4th Quarter:

• Review each agency/commission participation quarterly and look for opportunities to do new employee orientation/training with HR.

• Develop targeted mailings for those agencies with low participation. (new hire, under 30, age 40 – 50, etc.)

• Use pay stub messages to draw attention to OSGP

Ongoing

Karen Blanton

Fostered opportunities to speak at annual training requirement events such as DOC, Forestry Dept and Revenue.

Enhance Plan Communications forms/flyers/documents

Mail “Communication packet” to all commissions and agency addresses outside of Salem and Portland

Karen Blanton Flyers and announcements sent through PERS mailing system.

3

DEFERRED COMPENSATION GOALS FOR 2012 Goal 2: Increase the assets in the plan. Deliverable Strategy Due date Responsible leader Q1 Status Increase average monthly deferrals from OSPS by 5% 2011: $396 2012 Goal: $416 1st Quarter: $362 2nd Quarter: 3rd Quarter: 4th Quarter:

• Target mailings to age 50 plus individuals highlighting tax-deferred saving

• Educate on Pay stub flyer-Give examples of savings potential-give examples of where dollars can be found.

• At workshops, advise participants to use a percent of pay rather than a dollar amount.

• Develop new DHS training seminar on the maintaining your account on line

Ongoing

Karen Blanton

Increase enrollments from Higher Education by 30% over 2011. 2011: 61 2012 goal: 79 1st Quarter: 9 2nd Quarter: 3rd Quarter: 4th Quarter:

• Have a booth a OSU benefit fairs.(these will be held in March)

• Marketing campaign with OSU, targeting employees max out 403(b).

• Hold workshops on all campuses

• Direct Mail Participants-schedule One on One

Ongoing Ongoing

Karen Blanton Scheduled one on ones, in OSU and on the PSU campus, referred to Justin.

4


Goal 2: Increase the assets in the plan. Deliverable Strategy Due date Responsible leader Q1 Status Increase rollovers into the plan by 10% 2011: 645. 2012 Goal: 710 1st Quarter: 184 2nd Quarter: 3rd Quarter: 4th Quarter:

• Q2 article on IAP Account-Rollover in Form

• Target Mailer all new state employees with letter and Rollover in form

• Q3 article in Perspective on “benefits of consolidation”

Ongoing

Karen Blanton/Kathy Gannon/ Gay Lynn Bath/ING Karen Blanton Karen Blanton

Q1 article submitted on the “value of time when investing”.

Reduce Rollouts by 5% from 2011 numbers 2011: 462 2012 Goal: 485 1st Quarter: 101 2nd Quarter: 3rd Quarter: 4th Quarter:

• Q2 article on selecting an investment manager

• Direct Mail participants who submit retirement papers explaining options, invite to workshop

Ongoing

Karen Blanton Enhanced the retirement workshop power point to include the value of low fees, and flexibility in OSGP program.

Employer groups participating: Q1 2008 Q1 2009 Q1 2010 Q1 2011 Q1 2012

Counties 8 9 8 8 9Cities 41 44 45 49 51Special districts 62 69 71 79 83School districts 66 69 73 76 85

Total employers participating: 177 191 197 212 228

Total employees participating: 2708 3000 3088 3294 3474

Total eligible employees: 45,675 47,234 45,743 47,463 49,555Percent participating: 6.0% 6.3% 6.7% 6.9% 7.0%

Average monthly deferrals made: $818,692 $802,022 $798,768 $854,101 $874,708

Total local government assets: $59,059,781 $51,892,765 $78,081,541 $99,692,192 $114,802,868

Local Government Program Status

Page 1


OREGON SAVINGS GROWTH PLAN

0

50

100

150

200

250

2008 2009 2010 2011 2012

Total Employers Participating:

0500

1000150020002500300035004000

2008 2009 2010 2011 2012

Total Employees Participating:

43,00044,00045,00046,00047,00048,00049,00050,000

2008 2009 2010 2011 2012

Total Eligible Employees :

Page 2

OREGON SAVINGS GROWTH PLAN


$760,000$780,000$800,000$820,000$840,000$860,000$880,000$900,000

2008 2009 2010 2011 2012

Total Monthly Deferrals Made:

$0$20,000,000$40,000,000$60,000,000$80,000,000

$100,000,000$120,000,000$140,000,000

2008 2009 2010 2011 2012

Total Local Government Assets:

Page 3

New Employer Adoption:

CITY OF RACKAWAY BEACHCITY OF FLORENCECLATSKAINE PUD

ODELL SANITARY DISTRICTCITY OF KIEZERCITY OF LEBANONTILLAMOOK SCHOOL DISTRICTCITY OF AUMSVILLECANBY CHARTER SCHOOLMYRTLE CREEK SCHOOL DISTRICT

Professional Organization Attendance as VendorsSDAO CONFERENCE

Educational OutreachSUMMARY OF EMPLOYER / EMPLOYEE CONTACTS

WORKSHOP 1 20WORKSHOP 2 4RETIREMENT WKSP 0

23BENEFITS FAIR 2SITE VISIT 62VENDOR FAIR 1EMPLOYER VISITS 10

122

Local Government Report 2012 - First Quarter Review

Adoptions in Progress:

BROWN BAGS

TOTAL CONTACTS

Page 4

2012 1st Quarter Over All Program StatsMONTH JAN FEB MARCH Quarter Total

1st Quarter Total 2011

Percentage Difference

Monthly Contribution Totals (Month of deposit to participant account)

OSPS $4,115,359.16 $4,123,193.03 $4,123,456.25 $12,362,008.44 $12,623,366.06 -2.1%Higher Ed $344,601.31 $419,109.08 $431,413.31 $1,195,123.70 $1,186,403.86 0.7%Misc. Agencies $160,252.98 $160,817.99 $165,973.53 $487,044.50 $419,711.97 16.0%Local Governments $731,070.74 $902,110.83 $990,946.61 $2,624,128.18 $2,562,304.89 2.4%Total Monthly Contributions $5,351,284.19 $5,605,230.93 $5,711,789.70 $16,668,304.82 $16,791,786.78 -0.7%

New Enrollments (Month of deposit to participant account)

New Participants - OSPS 94 69 76 239 168 42.3%New Participants - Higher Ed 5 0 4 9 19 -52.6%New Participants - Misc. Agencies 1 0 1 2 3 -33.3%New Participants - Local Governments 31 17 30 78 86 -9.3%Total New Participants 131 86 111 328 276 18.8%

Eligible Employees Mar-11OSPS 38,156 37,651 37,765 39,300 -3.9%Higher Ed 14,664 15,016 15,051 14,600 3.1%Misc. Agencies 583 583 583 571 2.1%Local Governments 46,971 49,497 49,555 47,463 4.4%Total Eigible Employees 100,374 102,747 102,954 101,934 1.0%

Total Participants (anyone with an account balance employed

or terminated) Mar-11OSPS 18,291 18,296 18,312 18,271 0.2%Higher Ed 878 871 870 865 0.6%Misc. Agencies 380 380 379 361 5.0%Local Governments 3,429 3,438 3,474 3,131 11.0%No payroll locations(benef/alternates/sub accounts) 311 309 308 490 -37.1%Total Participating Employees 23,289 23,294 23,343 23,118 1.0%

2012 1st Quarter Over All Program StatsMONTH JAN FEB MARCH

Total Active Employees (Contributing/Non-Contributing)

percentage of eligible

employees (March 2012) Mar-11


OSPS 13,699 13,715 13,719 36.33% 13,808 -0.6%Higher Ed 748 743 743 4.94% 733 1.4%Misc. Agencies 290 288 290 49.74% 264 9.8%Local Governments 3,186 3,194 3,230 6.52% 3,294 -1.9%Total 17,923 17,940 17,982 17.47% 18,099 -0.6%

Total Active Contributing Employees (as of month posted to account)

percentage of eligible

employees (March 2012) Mar-11

OSPS 10,869 10,900 10,920 28.92% 12,213 -10.6%Higher Ed 460 484 484 3.22% 506 -4.3%Misc. Agencies 238 239 242 41.51% 239 1.3%Local Governments 1,762 2,097 2,205 4.45% 2,325 -5.2%Total Participating Employees 13,329 13,720 13,851 13.45% 15,283 -9.4%

Special Programs (as of month posted to account)


Max Plus 16 7 13 36 15 140.0%Catch-Up 50+ 32 14 7 53 37 43.2%Catch-Up 3 YR 5 1 0 6 10 -40.0%Final Paycheck Deferral 3 3 7 13 26 -50.0%Temporary Employees 4 2 0 6 19 -68.4%

2




Number of New Loan Issued (as of month loan requested)

OSPS 29 38 23 90 88 2.3%Higher Ed 2 0 0 2 0Misc. Agencies 1 1 1 3 1 200.0%Local Governments 0 0 1 1 5 -80.0%Total 32 39 25 96 94 2.1%

New Loans Issued Total Dollars (as of month of loan request)

OSPS $187,615.07 $398,801.94 $220,612.17 $807,029.18 $728,306.90 10.8%Higher Ed $22,325.06 $0.00 $0.00 $22,325.06 $0.00Misc. Agencies $12,000.00 $50,000.00 $25,000.00 $87,000.00 $50,000.00 74.0%Local Governments $0.00 $0.00 $1,000.00 $1,000.00 $55,500.00 -98.2%Total $221,940.13 $448,801.94 $246,612.17 $917,354.24 $833,806.90 10.0%

Loan Program Total Payments (as of month posted to account)

OSPS $223,540.01 $224,725.00 $224,706.42 $672,971.43 $586,932.71Higher Ed $1,856.20 $1,770.90 $2,242.73 $5,869.83 $5,691.57Misc. Agencies $6,546.63 $6,254.89 $7,156.84 $19,958.36 $17,046.60Local Governments $3,614.02 $4,884.14 $5,098.27 $13,596.43 $9,458.17Loan Pay Off $33,857.87 $32,187.42 $8,273.60 $74,318.89 $75,285.63Total $269,414.73 $269,822.35 $247,477.86 $786,714.94 $694,414.68

Unforeseeable Emergency WithdrawalsRequests 8 11 8 27 21 28.6%Approved 6 10 7 23 19 21.1%Denied 1 0 0 1 1 0.0%Request Withdrawn 1 1 1 3 1 200.0%With loans 5 7 3 15 9 66.7%Without loans 3 4 5 12 12 0.0%Dollars Withdrawn $11,685.00 $42,332.00 $90,749.00 $144,766.00 $116,772.95 24.0%

3




Number Rollover/TransfersState Rollover/Transfers In 40 69 75 184 138 33.3%Local Government Rollover/Transfers In 19 17 25 61 57 7.0%Total Rollover/Transfer In 59 86 100 245 195 25.6%

State Rollover/Transfers Out 42 34 25 101 114 -11.4%Local Government Rollover/Transfers Out 3 6 11 20 19 5.3%Total Rollover/Transfer Out 45 40 36 121 133 -9.0%

Prior Service Time Purchase Transfer Out 2 6 15 23Rollover/Transfers Dollars

State Rollover/Transfers In $957,758.95 $2,174,307.84 $1,992,800.77 $5,124,867.56 $5,094,589.06 0.6%Local Government Rollover/Transfers In $778,764.18 $470,043.88 $643,098.89 $1,891,906.95 $999,695.86 89.2%Total Rollover/Transfer In $1,736,525.13 $2,644,357.72 $2,635,914.66 $7,016,797.51 $6,094,284.92 15.1%

State Rollover/Transfers Out $2,825,268.50 $3,038,670.86 $2,840,481.56 $8,704,420.92 $8,502,024.82 2.4%Local Government Rollover/Transfers Out $128,765.41 $516,769.95 $565,493.97 $1,211,029.33 $383,898.59 215.5%Total Rollover/Transfer Out $2,954,033.91 $3,555,440.81 $3,405,975.53 $9,915,450.25 $8,885,923.41 11.6%

Prior Service Time Purchase Transfer Out $10,009.91 $86,843.72 $351,100.66 $447,954.29Terminated Participants

(from citistreet data base)56 38 42 136 47

Settlement Agreements Processed70 54 64 188 125

4

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