PHILADELPHIA GAS WORKS 457 and 401(a) Retirement Plans Recordkeeper RFP#30174 Questions & Answers December 7, 2015

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1 General Questions GENERAL QUESTIONS Q1 Please confirm the conversion date for these plans? Will it be 3/31/16, 4/1/16 or 6/30/16? A1 June 30, 2016 Q2 Please confirm that the selected provider would be the exclusive provider for the Philadelphia Gas Work s 457(b) and 401(a) plans. A2 Selected vendor will perform all services quoted in RFP. Selected vendor will integrate with existing Plan Advisor and other 3rd party vendors such as Financial Finesse. Plan Documents PLAN DOCUMENTS Q3 Can we get copies of the plan documents? A3 Attached are the Plan documents for the 457 and 401(a) Plans Q4 In regards to Auto Enrollment for the 457 Plan, what default deferral percentage rate are participants enrolled at and does the plan utilize an auto escalate feature? A4 Effective January 1, 2011 newly eligible participants are enrolled at a two (2) percent deferral rate into the 457 Plan. The plan does not utilize auto escalation. Page 1 of 10

2 PLAN DOCUMENTS Q5 Please provide a copy of the 457 plan document to better understand how the automatic enrollment feature is designed to work and what is meant by auto rollovers. A5 Automatic cash outs is a Plan feature for terminated participants with balances under $5,000. Q6 The RFP references an employer contribution, what is the amount and is there a vesting schedule? A6 The employer contribution in the 457 Plan is 10 cents on each dollar deferred up to a maximum of $500 a year. The employer contribution five and one-half percent (5.5%) of compensation of all eligible employees. Both plans utilize the 100% vesting on these monies. Recordkeeping Q7 How many eligible participants? A7 1,589 active employees are eligible to participate as of December Q8 How many non-active participants with a balance greater than $0? A8 As of plan Terminated/Retired Plan Terminated 22 Page 2 of 10

3 Q9 Q10 If possible, please provide a break down the participant counts into eligible, active, and term deferred for both plans. Is there any overlap between participants in the 457b and 401a plans? If so, how many participants are in both plans? What is the total number of unique participants? What is the number of unique participants (social security numbers) between the two Plans? A9 As of plan Terminated/Retired Plan Terminated 22 For additional clarification, please refer to A8, A10 and A11 A10 As of Participants have balances in both Plans (overlap). Q11 How many participants have accounts in both the 457 plan and the 401 plan? A11 As of b Plan 1,654 participants with a balance 401(a) Plan 365 participants with a balance Q12 Please provide the number of total new enrollments in the Plans for 2015, 2014 and A12 457b Plan New participants (as of 9/30/15) 401a Plan New participants Page 3 of 10

4 Q13 What was the total number of unforeseeable emergencies, QDROs and distributions processed in 2014 for each plan? A13 457b Plan UEWs 34 QDROs - 2 Distributions (a) Plan QDROs 0 Hardships - 3 Distributions 18 Q14 Q15 Q16 Please provide the number of actively contributing participants for each plan. How many employees are eligible to participate in each plan? How many new employees were hired in 2012, 2013 & 2014? A14 Newport A15 1,589 active employees are eligible to participate A16 New hires: 2012 =93, 2013 = 77 & 2014 = Page 4 of 10

5 Q17 How many participants were auto enrolled in 2012, 2013, & 2014? A17 PGW as well as Newport Group does not track autoenrolls. Q18 The RFP ask whether participants can auto-enroll via web, 800 call center, paper, etc. What enrollment method is currently used for auto-enrollment AND general enrollments? A18 Currently, the Plan utilizes only paper enrollment for auto enrollment and general enrollments. Q19 What is the auto-enrollment default contribution amount and default fund for the 457 Plan? A19 For participants hired on or after January 1, 2012 the default contribution in the 457 Plan is two (two) percent. Q20 Who calculates employer contributions? A20 PGW calculates the employer contributions in both plans The contributions are calculated on a weekly basis. Q21 What were the total contributions/distribution in 2012, 2013, 2014 and 2015 for each plan (net cash flow) A21 457b Plan Contributions / Distributions $5,081,550 / $5,515, $5,289,888 /$8,723, $6,091,597 / $7,577, $3,798,496/$14,087, (a) Plan Contributions / Distributions $162,205 /$3, $316,180 /$8, $623,257 /$60, $646,576/$74,181 Page 5 of 10

6 Q22 How many new loans were issued in 2012, 2013 and 2014? How many outstanding loans were there in 2012, 2013 and 2014? A22 457b Plan new loans (a) Plan new loans b Plan outstanding loans (a) Plan outstanding loans Q23 Please provide the current payroll file layouts, as well as definitions for the files. A23 Attached is the titles/headers of the file feed.. Q24 Please provide the current Service/Administrative agreement A24 We are not providing the current service agreement for the plans at this time. Page 6 of 10

7 Q25 What are the current administrative and recordkeeping fees today? A25 We are not disclosing the current administrative and recordkeeping fees at this time. Investments Q26 Q27 INVESTMENTS What is the current credit rating and GMIR for the Morley Stable Value Fund? Are there any transfer restrictions beyond the 12 month notice requirement? For the risk-based profiled models in the lineup currently, can we map these assets to proprietary riskbased fund of fund models? A26 Attached is the Morley Stable Value Fund fact sheet for the period ending A27 No, as stated in the RFP the existing fund menu must be maintained Q28 What is the QDIAs for the plans? A28 MFS Moderate Allocation Fund Q29 Q30 Is there a wrap on the unitized Vanguard Primecap Fund? If so, does it pay for plan expenses? What was the rationale for adding one unitized fund to the investment lineup? The fund line up indicates that the Vanguard Prime Cap Fund is unitized. What is the (wrap) fee on the A29 Yes there is a wrap fee to somewhat equalize revenue sharing. All plan revenue sharing payments offset plan related administrative and advisory expenses through an ERISA account A30 Admiral share class has a 9 bps wrap fee. Page 7 of 10

8 INVESTMENTS Q31 Q32 Q33 Q34 Q35 investment option? Is PGW anticipating a review and adjustments to the fund line up after the award of this RFP? Page 30 Exhibit E. How much is the additional fee currently being assessed on the VPMAX Fund? What, if any, additional fee is being assessed on the Morley Stable Value Fund (CUSIP )? Are there any contract restrictions if the sponsor were to terminate their current contracts Is there any contingent deferred sales charge (CDSC)? If so what percentage and dollar amount (or schedule)? Are there any restrictions on the transition of the Stable Value/Fixed Account assets: CDSC - % and/or $ Spread payout option termination payments over a period of time (example, 5 payments over 5 years)? Market Value Adjustment contractual formula or market value payout? If so, what is the current market value adjustment % and/or $? A31 No, as stated in the RFP the existing fund menu must be maintained A32 9 bps on Vanguard Prime Cap. No additional fee is assessed to Morley Stable Value Fund A33 The intention is not to change any underlying investment options in the Plan. A34 Please refer to Question A33 A35 Please refer to Question A33 Page 8 of 10

9 INVESTMENTS 12-month Put or other delay of distribution of book value of participant assets Communication & Education Q36 Q37 COMMUNICATION AND EDUCATION Does PGW prefer that the vendor provide on-site education services or will it be a third party? How many education days, for year one and ongoing, would PGW like included in initial pricing? Does PGW have any specific needs in terms of customized communication programs? Is the current plan provider/recordkeeper assuming any of this responsibility currently? Is it the expectation that the current level of on-site education and number of days on-site is sufficient or is there a desire to increase it? A36 It is expected that vendors responding to the RFP should provide fees for Participant education as outlined in the RFP. A37 As outlined in the RFP, your fee quote should include annual on-site educational meetings at all eight (8) separate locations. All locations are in the Philadelphia area. Generally, two locations are done per day. The current plan provider/recordkeeper does assume the educational responsibilities. Currently, the level of meetings described are sufficient. Q38 Regarding page 24, Question 3 on Communications A38 PGW utilizes the services available through Financial Page 9 of 10

10 Q39 COMMUNICATION AND EDUCATION and Education, please outline the current existing relationship with Financial Finesse, to include services provided, educational channels, and integration (to include data transmissions) with the current provider. Can you provide more specific detail about how you would like for the selected vendor to integrate with Financial Finesse? Finesse which include on line learning and educational tools as well as personal financial wellness assessments. A39 On a monthly basis, provide an automated and customized participant account file to Financial Finesse/GRP Participant Services Q40 ADVISORY SERVICES & MANAGED ACCTS Are participant advisory services and managed accounts currently offered? If so, what are the total participants and total assets in that service? If not, is PGW interested in this type of service? A40 No No Page 10 of 10