SCHLUMBERGER R E T I R E M E N T A N D S AV I N G S P R O G R A M

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1 SCHLUMBERGER R E T I R E M E N T A N D S AV I N G S P RO G R A M

2 WHO TO CONTACT Sun Life Financial Customer Care Centre: Universal Toll-Free Number (UTFN): (+1) (Any business day: 6:00 a.m. to 6:00 p.m. MT) Call collect: (Monday to Friday 6:00 a.m. to 6:00 p.m. MT) Your Retirement and Savings Program website: CONTENTS Section 1: Take Action!... page0 2 Section 2: Learn... page0 6 Section 3: Invest... page0 10 Section 4: Act... page022 Section 5: What happens... page 024 Please note: The Company retains the right to amend, modify or terminate the Schlumberger Retirement and Savings Program at any time. However, no amendment will reduce any employee s entitlements which had accrued prior to the date of the amendment, modification or termination.

3 WELCOME TO YOUR Planning for your retirement is an important responsibility. For you and Schlumberger, it s a shared obligation. That s why Schlumberger offers you a retirement program that gives you choice over both the types of plans you can use for your long-term savings as well as control over your investment decisions. To make sound decisions, it s important that you set aside time to learn about the different plans and investment options within the Schlumberger Retirement and Savings Program. You need to truly explore your choices to discover your full retirement savings potential. Now, it s your move it s your money and your future. Saving at work makes it even easier to attain your goals whether you are just starting your career, midway through it or close to retirement. This guide has everything you need practical information to help you enrol and save in the Schlumberger Retirement and Savings Program with lots of additional information at mysunlife.ca/schlumberger. So take some time to focus on the financial side of life, and review the information that follows. Investing a little time now can start you on the path to achieving your short- and long-term savings goals. A representative from Sun Life Financial will give you a welcome call to help get you started and guide you through enrolment. This includes help with understanding your investment options. SCHLUMBERGER New Hire Guide 1

4 SECTION 1: TAKE ACTION! The checklist below tells you what you need to do to start participating in the Program. If you have any questions, contact the Sun Life Financial Customer Care Centre at Use your tablet, smartphone or computer to visit the Schlumberger mobile companion for anytime access to plan enrolment information. Go to sunlife.ca/welcometoschlumberger today! Watch the mail for your welcome letter from Sun Life Financial that includes your account number; you will need this to register for your online access ID and password to sign in to mysunlife.ca/ Schlumberger. Register on mysunlife.ca/schlumberger, using the account number in your welcome letter. Go to mysunlife.ca/schlumberger>register now. Then, follow the steps provided. Once you have registered, you will have your personal access ID and password, which will enable you to manage your plans online on an ongoing basis. Enrol. Once you have signed into mysunlife.ca/schlumberger, select my financial centre>requests> Enrol>Let s get started. At the bottom of the screen, you will see a box that says Add a plan. Select the plan you want to join, e.g., DCPP, and select Save and continue. Then follow the prompts to complete your enrolment. Also, complete your profile information ( address and phone number). This will allow Sun Life to keep you up to date with your plan. Reach out to a team of experts for one-on-one personal advice on the funds in your Program at Make investment selections for all of your accounts. You will need to set up investment direction for both your contributions (all accounts that you have) and Schlumberger s contributions (DCPP and DPSP only). Sign in to mysunlife.ca/schlumberger>my financial centre>requests>change investments. If you do not make an active selection for your mandatory accounts (DCPP and DPSP), your account balances and future contributions will be automatically invested in the Sun Life Financial Granite Target Date Segregated Fund that is closest to, but not exceeding, your 65th birthday. This is the Schlumberger default fund. Complete and submit your beneficiary forms. You will need a separate one for each of your accounts. Beneficiary forms are available on mysunlife.ca/schlumberger>my financial centre>quick Links> Beneficiary info or at the back of this brochure. Return all beneficiary forms to the address shown on the form. Shortly before your automatic enrolment in the plan, Sun Life Financial will give you a call to make sure all of your questions are answered, help you with any parts of the enrolment process that remain outstanding, and make sure you understand the tools and resources available to help you manage your account. 2 S C H L U M B E RG E R New Hire Guide

5 ENROL NOW IT S EASY! Schlumberger offers you different ways to save for your retirement: Defined Contribution Pension Plan (DCPP) Both you and Schlumberger contribute to the DCPP. You will be automatically enrolled in the DCPP at a 3% contribution rate. On January 1 of the year following one year of participation, your contribution rate will be automatically increased to 4%. The following January 1, your contribution rate will be automatically increased to 5% (this is the contribution rate limit so there will be no further automatic increases). Deferred Profit Sharing Plan (DPSP) Schlumberger makes contributions to your DPSP account each year, based on the Company s profitability. Remember: you can make changes to your contribution percentages at any time. Visit mysunlife. ca/schlumberger>my financial centre>requests>contribute>payroll deduction Registered Retirement Savings Plan (RRSP) Voluntary, non-matched account. There are no Company contributions. Tax-free Savings Account (TFSA) Voluntary, non-matched account. There are no Company contributions. Non-registered Account (NREG) a non-registered plan that functions as a savings account. You will have an NREG account only for DCPP and DPSP contributions in excess of the annual Canada Revenue Agency (CRA) limits. Whether you re just starting your career, building a family, getting back on track or planning your retirement, Sun Life Financial is with you for the long term and can show you how to take advantage of everything your plan has to offer. For questions, call to access Sun Life Financial s automated telephone system 24 hours a day, seven days a week, or talk to a Customer Care Centre representative any business day from 6 a.m. to 6 p.m. MT. Service is available in more than 190 languages. SCHLUMBERGER New Hire Guide 3

6 SECTION 1: CONTINUED BETH One lesson my parents taught me was to split my income into three savings buckets. The first bucket of savings is to help me meet my day-to-day expenses, the second bucket is to provide funding for medium-term goals (like buying a car, or taking a special trip), and the third bucket is for long-term investing. It s been tempting to skip one or the other from time to time, especially when it comes to saving for something so far out in the future, but I m really glad I ve had the discipline to stick to my plan. Starting early is really going to pay off for me. Here s an example of what I am aiming for: If I invest $100 a month starting at age 25, until I reach age 60, I will save $135,172.43* If I wait until age 40, and start investing $200 a month until I reach age 60, I will save $90,149.46* * assuming a net rate of return of 5.75% Makes a lot more sense to me to start as soon as I can not only will I accumulate more money, but it will make it a lot easier for me when I get older! You ll be able to enrol in your Company-sponsored plans (DCPP and DPSP) approximately six weeks before you re eligible. This gives you the chance to make your investment selections ahead of time, and get ready for your first payroll contributions. If you don t enrol in the DCPP and DPSP ahead of your eligibility date, you ll be automatically enrolled once you become eligible. Unless you specifically request not to make contributions, you will be set up for deductions of 3% of your admissible compensation for the DCPP. On January 1 of the year following one year of participation, your contribution rate will be automatically increased to 4%. The following January 1, your contribution rate will be automatically increased to 5% (this is the contribution rate limit so there will be no further automatic increases). Remember: you can make changes to your contribution percentages at any time. Visit mysunlife. ca/schlumberger>my financial centre>requests>contribute>payroll deduction 4 S C H L U M B E RG E R New Hire Guide

7 You can also join the voluntary RRSP or TFSA. To enrol in any plan under your Schlumberger retirement and Savings Program, visit mysunlife.ca/ Schlumberger>my financial centre>requests>enrol and follow the prompts. MAKE THE PROGRAM WORK FOR YOU There are 3 steps to making the most of your Schlumberger Retirement and Savings Program: Step 1: Learn: Understand the plan components in your Program (DCPP, DPSP, RRSP, TFSA, NREG) Step 2: Invest: Understand the types of investments available to you and your individual approach to risk and return Step 3: Act: If you ve decided on a contribution rate and chosen your investments, you re well on your way. See page 2 at the front of this brochure for instructions on how to enrol. But enroling doesn t mean you re done. In fact, managing your retirement savings is an ongoing job. Make a plan to regularly check your account. mysunlife.ca/schlumberger is the online enrolment and information website for your Schlumberger Retirement and Savings Program. You can access this site from anywhere you have internet access. SCHLUMBERGER New Hire Guide 5

8 SECTION 2: LEARN ABOUT YOUR SCHLUMBERGER RETIREMENT AND SAVINGS PROGRAM The Defined Contribution Pension Plan The DCPP forms the foundation of your retirement savings. Both you and Schlumberger contribute to the plan: Schlumberger contributes 2% of your admissible compensation; You may contribute up to 5% of your admissible compensation; and Schlumberger will match your contributions dollar for dollar to a maximum of 3% of your admissible compensation. What this means is that with your 5% contribution plus Schlumberger s basic and matching contribution, you could be saving up to 10% of your pay in your DCPP, up to the limits set by the Canada Revenue Agency. What s more, you ll be deferring tax on your contributions and any investment gains until you receive it as retirement income. In addition to Company contributions, Schlumberger also pays all expenses related to your account. You choose how your contributions and Schlumberger s contributions are invested. You can learn more about your investment options in the INVEST section of this booklet, starting on page 10. What s admissible compensation? Admissible compensation includes base pay, overtime, bonuses, commissions and geographical coefficients. The Deferred Profit Sharing Plan Schlumberger s DPSP allows you to share in the Company s success and increase your retirement savings, all on a tax-deferred basis. Based on the profitability of the Company, Schlumberger will make an annual discretionary profit sharing contribution to your Deferred Profit Sharing Plan (DPSP) account. The profit sharing contribution is a percentage of your admissible compensation. You control the investment of Schlumberger s DPSP contributions visit mysunlife.ca/schlumberger to learn more about your investment options and making the right selection. Like the DCPP, Schlumberger pays all expenses related to your DPSP account. Registered Retirement Savings Plan An RRSP is a plan to which you can make voluntary contributions and which helps you save for retirement. All contributions made to your RRSP are tax-deductible and all investment earnings are tax-sheltered. 6 S C H L U M B E RG E R New Hire Guide

9 SUZANNE Through payroll deduction, I realize immediate tax savings by making additional contributions to the pension plan. Instead of waiting for my tax return, I have the ability to make my contributions through payroll deductions and they are made pre-tax, which means more bang for my buck. Through payroll deduction, I can make a $500 registered contribution every month, but it only costs me $300! The other advantage of making purchases over a regular period of time rather than in one lump sum is that I average the cost of my investments rather than running the risk of buying in bulk when the price is at its highest. This is called dollar-cost averaging and, over time, proves to be the best way of smoothing out costs. No payroll deduction Gross salary $6,000 $6,000 Voluntary pension contribution None $500 Taxable income $6,000 $5,500 Tax (assuming 40% tax rate) -2,400-2,200 After-tax pay $3,600 $3,300 Payroll deduction Tax-free Savings Account A TFSA is an account funded with after-tax dollars, providing the benefit of tax-free investment gains. Non-registered Account An NREG account is funded with after-tax dollars. You will only have an NREG account if your DCPP and DPSP contributions exceed the annual Canada Revenue Agency (CRA) limits. SCHLUMBERGER New Hire Guide 7

10 SECTION 2: CONTINUED HERE S AN OVERVIEW OF YOUR PLAN FEATURES: Eligibility Defined Contribution Pension Plan Automatic participation on the first day of the month, after three months of service as a permanent employee. Deferred Profit Sharing Plan Automatic participation on the first day of the month, after one year of service as a permanent employee. A participant must be employed in Active Service on December 31 st of a calendar year to be eligible to receive a DPSP contribution in respect of that calendar year. Fees paid by Schlumberger? Yes Yes Type of contributions (employer/employee) Your contributions Schlumberger s contributions Employee and employer You can contribute from 0% to 5% of your admissible compensation. Basic contribution equal to 2% of your admissible compensation, and a matching contribution up to 3% of any contributions you make. Employer only N/A Discretionary, annual contribution. Are contributions tax-deferred?* Yes Yes Are savings subject to tax on capital gains or investment income earned while in the plan? Are there taxes to be paid on withdrawal? No Yes No Yes Withdrawals while in the plan? No No Contribution limits for 2015 NOTE: Contribution limits change annually $25,370 $12,685 NOTE: DPSP awards in excess of this amount are subject to tax. The applicable tax will be withheld from the excess amount and the net remainder will be deposited in the Non-registered account. *The term tax-deferred means that you don t pay tax on the income used to fund the contributions to your DCPP or DPSP when the money is deducted from your You ll need a beneficiary just in case You need to name a beneficiary for each plan (DCPP, DPSP, RRSP, TFSA) to receive benefits in the event of your death. You may change or alter your beneficiary designation at any time through Sun Life Financial, the plan s record keeper, online at mysunlife.ca/schlumberger. Sign in, select my financial centre>quick Links>Beneficiary info, or by phone. For your DCPP, your beneficiary will automatically be your spouse, regardless of any other beneficiary you have named, unless your spouse signs a waiver. If you do not have a spouse or another beneficiary when you die, benefits will be paid to your estate. 8 S C H L U M B E RG E R New Hire Guide

11 Registered Retirement Savings Plan Voluntary participation on the first day of the month, after three months of service as a permanent employee. Tax-free Savings Account Voluntary participation on the first day of the month, after three months of service as a permanent employee. Non-registered Account Automatic participation with contributions in excess of the annual CRA limits. No No Yes Employee only Employee only Employee and employer You may make voluntary contributions, up to your RRSP contribution limit. You may make voluntary contributions, up to your TFSA contribution limit. In excess of annual CRA limits for the DCPP and DPSP. N/A N/A Employee and employer Yes No No No No Yes Yes No No Yes Yes No Check your Notice of Assessment from CRA $5,500 A TFSA lets you carry forward unused contribution room, and amounts you withdraw can be added back to the available contribution room the following year. See the FAQ on Enrollment Central to understand how to find out your contribution room. None DPSP awards in excess of the CRA limit are subject to tax. The applicable tax will be withheld from the excess amount and the net remainder will be deposited in the Non-registered account. paycheque but you do pay tax when you withdraw the money. If you do not have a beneficiary for your DPSP, benefits from that plan will be paid to your estate, even if you have a spouse. The definition of spouse varies by province. DID YOU KNOW? Saving two dollars a day one less coffee can add up to $3,700 in five years. (This assumes a 4.5 per cent annual rate of return.) SCHLUMBERGER New Hire Guide 9

12 SECTION 3: INVEST Now that you know how the Schlumberger Retirement and Savings Program works, it s time to think about making some decisions. While saving your money is the first step, investing your savings is important to make your money grow. Invested money can earn interest and dividend income, and can generate capital growth, like the growth in the value of a home. These earnings are needed to keep your savings a step ahead of inflation and to ensure you have enough money for your future. Here are your three key steps: Set your financial goals Decide on your contribution rate Choose your investment approach SET YOUR FINANCIAL GOALS Think carefully about what you really want to do when you retire. Set a target. Think about your retirement lifestyle. Do you plan to stay close to home and spend time with family? Or are you planning to do a lot of travelling? What about hobbies or leisure activities? We ve used examples to illustrate important concepts. These illustrations are based on historical information and are not intended to predict future results. The assumed rates of return do not represent the performance of any particular investment. Investment returns will fluctuate over time. The information in this booklet is for educational purposes only and should not be interpreted as investment advice. 10 S C H L U M B E RG E R New Hire Guide

13 The amount of retirement income you ll need relates directly to the lifestyle you envision. To give you a starting point, many experts suggest that the average Canadian will need between 60% and 80% of pre-retirement income to maintain his or her current standard of living into retirement. But knowing exactly how much you ll need is harder to figure out. Many things come into play: Will you have paid off your mortgage or downsized to a smaller home? What about your medical costs? Do you expect them to increase? Will you still be paying for children s education? Your Schlumberger Retirement and Savings Program is designed specifically to help you save for these costs in retirement. But this will likely not be your only source of retirement income. Government programs and personal savings are also important components of your retirement plan, and don t forget about any pension benefits earned with previous employers. We want you to maximize your retirement income That s why Schlumberger sets a default employee contribution rate of 3% of your admissible compensation for those who don t actively enrol in the plan. A 3% employee contribution means that you automatically receive the maximum 5% from Schlumberger. Your contribution rate will automatically increase on January 1 each year following one year of participation. See page 3 of this guide for more details. DECIDE ON YOUR CONTRIBUTION RATE The Schlumberger Retirement and Savings Program makes it easy to save. You can save as little as 3% of your admissible compensation to receive the maximum Schlumberger contributions but why not save 2% more and maximize your savings? You ll defer tax and you ll be putting aside 10% of your income towards your retirement, but, with the tax savings, you ll be contributing less than half of that amount. How long till you retire? Knowing your time horizon will help you set a strategy for meeting your financial goals. How far away from retirement are you? For example, let s say you re retiring in five years. Your investment strategy will be quite different from someone who has 30 years before retirement. Keeping your investment time horizon in mind will be important when it comes to thinking about your investment options. It s worth completing the Retirement planner tool on mysunlife.ca/schlumberger. SCHLUMBERGER New Hire Guide 11

14 SECTION 3: CONTINUED CHOOSE YOUR INVESTMENT APPROACH The Schlumberger plan offers a variety of investments to choose from, with two distinct investment approaches: Built FOR Me and Built BY Me. BUILT FOR ME The Built FOR Me approach is made up of target date funds structured to coincide with a key life event such as retirement. Target date funds have asset mixes that adjust automatically as you get closer to your target date (the date when you expect to need your money). All you have to do is select the date when you will need your money; for example, your planned retirement year or the year you reach age 65, and then choose the target date fund closest to, but not exceeding, this date. Example: If you are aged 36 in 2015, you would select a target date fund with a maturity date closest to but not exceeding 2044, i.e. the year you turn 65. This would be the Granite 2040 fund. Target date funds available in your plan Fund Category Target date Fund Name Sun Life Financial Granite 2020 Segregated Fund Sun Life Financial Granite 2025 Segregated Fund Sun Life Financial Granite 2030 Segregated Fund Sun Life Financial Granite 2035 Segregated Fund Sun Life Financial Granite 2040 Segregated Fund Sun Life Financial Granite 2045 Segregated Fund Sun Life Financial Granite 2050 Segregated Fund Sun Life Financial Granite Retirement Segregated Fund FMFs* 0.40% 0.45% 0.51% 0.51% 0.51% 0.51% 0.51% 0.35% *Fund Management Fees (FMFs) are applicable to the TFSA and RRSP only. FMFs as of October 31, The FMFs displayed in this document do not include the applicable sales tax. However, these taxes are charged to your account. FMFs include, but are not limited to, fund operating expenses and investment management fees. Look for more information on target date funds on the Schlumberger mobile companion at sunlife.ca/ welcometoschlumberger or online at mysunlife.ca/schlumberger>my financial future>quick Links>Investment performance. On the right hand side of the screen select my fund performance>morningstar. 12 S C H L U M B E RG E R New Hire Guide

15 Bill is in his mid-twenties; he s busy starting his career, planning a wedding, and buying a house. Between upgrading his skills and managing his personal life, he doesn t have much time to think about investing. Bill just wants to put some money away for his future but he doesn t want to spend too much time managing a portfolio. Since Bill plans on retiring when he s 65, he chooses the 2045 target date fund. TIME in 2015 in 2025 in 2035 in 2045 ASSET MIX EVOLUTION Fixed income/cash Equities RISK LEVEL EVOLUTION higher risk lower risk Beth is a single parent who just started a new job, Beth, 42, is busy balancing work with the demands of her family. With so much on her plate, she wants to save as much as she can and not think about it. Beth hopes to retire at 65 (even though she may have to work longer), so she selects the 2035 target date fund. TIME in 2015 in 2025 in 2035 ASSET MIX EVOLUTION Fixed income/cash Equities RISK LEVEL EVOLUTION higher risk lower risk Carol is so close to retirement that she is actively planning her future. At 55, she has 10 or less years of work left. She wants to make sure she has a diversified portfolio that s moving to a more conservative asset mix as she approaches retirement. To achieve this investment objective, she invests her money in the 2020 target date fund. TIME in 2015 in 2020 ASSET MIX EVOLUTION Fixed income/cash Equities RISK LEVEL EVOLUTION higher risk lower risk SCHLUMBERGER New Hire Guide 13

16 SECTION 3: CONTINUED If you would like to build your own portfolio, you should know that there are different types of risk that can impact your investments. Before you use the Built BY Me approach, you should understand the different types of risk and how to manage risk. All investments carry some level of risk as well as the potential for reward. The table below describes some different types of risk. TYPES OF RISK Market risk This is the likelihood that the value of your investment will go up or down over time. Market risk is really the volatility of the investment. Typically, volatility is higher in the short term but decreases over time. Equities are most often associated with market risk because of the ups and downs in the stock market; however, bonds can also be volatile since their values fluctuate with interest rate changes. Inflation risk This is the likelihood that the value of your investment will not keep pace with inflation over the long term. Inflation risk is low in the short term but increases over time. Fixed-income investments typically have a higher level of inflation risk. DID YOU KNOW? The investments in your Schlumberger Program are held in segregated funds. Your workplace savings are held in a separate account and are segregated from Sun Life Financial s other assets. The value of your segregated fund assets and their rates of return are not guaranteed. Your risk comfort level You can get an idea of your risk comfort level by completing the Asset allocation tool (also known as the Investment Risk Profiler) on mysunlife.ca/schlumberger. A paper version is included here. Once you ve understood the different types of risk, you need to know how to manage risk. 14 S C H L U M B E RG E R New Hire Guide

17 INVESTMENT RISK PROFILER A quiz that matches your personality to your money While growing your money is important, it s equally important that you re able to sleep at night. This tool will help you determine your tolerance for investment risk, and, in turn, help you select the investment options that are right for you. Answer each of the following questions, keeping your objective in mind.answer each of the following questions, keeping your objective in mind. 1. Which statement best describes your comfort level with fluctuations in the value of your investments? a. I d be very upset if my investments dropped in value over any period of time. 1 point b. I m willing to accept a lower, more predictable rate of return as long as fluctuations in the value of my investments are small. 10 points c. I m willing to accept some fluctuations in the value of my investments as I m seeking a higher rate of return. 20 points d. I want the highest rate of return possible, and understand the value of my investments can fluctuate significantly. 30 points 2. How long will you leave this money invested before you ll need a significant portion of it for your stated objective? a. Less than 5 years. 1 point b years. 10 points c years. 20 points d. More than 20 years. 30 points 3. How likely is it that you ll need access to a large portion of this money earlier than expected? (E.g. taking early retirement)* a. Very likely. 1 point b. Somewhat likely. 10 points c. Unlikely. 20 points d. I won t need access to any of the money in this plan early. 30 points * Early retirement is defined by pension legislation and can vary by jurisdiction. 4. Which of the following pattern of returns would you be most comfortable with? Assume an initial amount of $5,000 invested for 10 years. a. Your investment grows without losses to $8,100. However, in one of the years the value of your portfolio does not increase. 1 point b. Your investment grows to $10,100 in year 10, but slightly declines in value in two of the years. 10 points c. Your investment grows to $12,400, but significantly declines in value in three of the years and was worth only $3,500 after the first year. 20 points 5. With the four results below, how would you invest $10,000? a. A guaranteed return of $ point b. The potential of earning $800 but the risk of earning only $ points c. The potential of earning $1,200 but the risk of earning nothing. 20 points d. The potential of earning $2,500 but the risk of losing $1, points 6. If your investment dropped in value by 20% in one month, how would you react? a. I d cash in my investment immediately. 1 point b. I d make no changes until the value recovers and then re-evaluate. 10 points c. I d do nothing. I understand my investments will fluctuate from day to day, but believe they will grow over the long term. 20 points d. I d invest more while the prices are low. 30 points 7. How would you describe your investing personality? a. I don t like risk and can only tolerate moderate losses. 1 point b. I m willing to take some risk and can tolerate one year of poor returns. 10 points c. I can tolerate more than one year of poor returns. 20 points 8. Which of the following statements best describes your investment knowledge? a. I m a novice investor. 1 point b. I have some knowledge. 10 points c. I have good working knowledge. 20 points d. I consider myself an investment pro. 30 points Add up your points for your total score: My total score is SCHLUMBERGER New Hire Guide 15

18 YOUR RISK PROFILE Match your total score from the Investment risk profiler to one of the risk profiles below. A score of 35 points or less Conservative You have a need for a predictable flow of income or have a relatively short investment horizon. Your tolerance for volatility is low and your primary goal is capital preservation. A score of 36 to 85 points Moderate You seek a regular flow of income and stability, while generating some capital growth over time. Your tolerance for volatility is moderate and your primary goal is capital preservation with some income. A score of 86 to 145 points Balanced You re looking for long-term capital growth and a stream of regular income. You re seeking relatively stable returns, but will accept some volatility. You understand that you can t achieve capital growth without some element of risk. A score of 146 to 190 points Growth You can tolerate relatively high volatility. You realize that, over time, equity markets usually outperform other investments. However, you re not comfortable having all your investments in equities. You re looking for long-term capital growth with some income. Cash equivalents* Bonds (fixed income) Canadian equity U.S. equity International equity *Bonds (fixed income) is the lowest-risk asset class available under the Schlumberger Retirement and Savings Program. A score of 191 points or more Aggressive You can tolerate volatility and significant fluctuations in the value of your investment because you realize that, historically, equities perform better than other types of investments. You re looking for long-term capital growth and are less concerned with shorter-term volatility. Once you enrol, you can access the Investment risk profiler on mysunlife.ca. Simply sign in using your access ID and password then select my financial centre>my money tools>continue. 16 S C H L U M B E RG E R New Hire Guide

19 How to manage risk There are two key investment strategies to help you reduce your exposure to risk, especially market risk: diversifying your investments (not putting all your eggs in one basket) and dollar-cost averaging (putting your eggs in the basket one at a time rather than all at once). Diversification This is simply spreading your savings among several different types of investments. By doing so, you ll have a better chance of avoiding the steep ups and downs in any one type of investment. Instead, if some investments drop in value, others could gain or hold their value to offset the decrease. There are two ways to take advantage of diversification in the Schlumberger program: o o you can choose your own diversified investment mix (this is known as the Built BY Me approach); or you can choose the default fund, which uses a diversified investment approach to manage risk (this is known as the Built FOR Me approach. Your Schlumberger default fund is a target date fund the Sun Life Financial Granite Target Date Segregated Fund closest to, but not exceeding, your 65th birthday. Dollar-cost averaging The idea behind dollar-cost averaging is to invest the same each month which you do automatically with the Schlumberger DCPP. By doing so, more fund units are purchased when prices are low and fewer units are purchased when prices are high. The point of this is to lower the total average cost per unit of the investment. This allows you to take advantage of changes in the price of the units you re buying and selling. Assuming you invest an equal amount each time, it has been observed that over the long term: o o you ll likely buy more units at lower prices; and you ll likely buy fewer units at higher prices. To take advantage of these strategies, you need to understand the risk levels in the different types of investments in your Program. For advice on the investments available in the Schlumberger Retirement and Savings Program, use my investment advice, a service available through the Sun Life Financial Customer Care Centre at A specialized professional will help you understand more about your investments. SCHLUMBERGER New Hire Guide 17

20 SECTION 3: CONTINUED Risk levels in different types of investments Bond (fixed income) funds: These invest in bonds issued by governments and corporations. They are generally riskier when interest rates change. Bond fund values go down as interest rates go up, and vice versa. Equity funds: These invest mainly in stocks. When you buy a stock, you are buying an equity ownership share in a company. Equities tend to be more volatile than other types of investment funds, but have historically provided the best returns over long periods. Equity funds will often specialize in different parts of the world, different geographic areas or different economic sectors, or use a particular investment strategy, all of which affect their risk level. Understanding risk versus return Low Return High Bond Equities Low Risk High Now that you know a little more about risk and return, you are ready to look at the Built BY Me approach to investing. 18 S C H L U M B E RG E R New Hire Guide

21 Built BY Me funds available in your plan BUILT BY ME The Built BY Me approach allows you to create your own portfolio from a list of specially selected funds (see chart below) and is best suited to individuals who want to actively choose and monitor their investments. If this is your preferred approach, it is advisable to complete the online Asset allocation tool, which will help you understand your personal risk tolerance. Go to mysunlife.ca/schlumberger>my financial centre>quick Links>my money tools and follow the steps. Based on your risk profile results, you can choose from the funds shown in the table below to create a portfolio that matches the asset mix recommended by your risk profile. Look for more information on Built BY Me funds on the Schlumberger mobile companion at sunlife.ca/welcometoschlumberger. Fund Category Fixed income / Bond Canadian equity U.S. equity International equity Global equity PH&N Bond Segregated Fund Fund Name Templeton Global Bond Segregated Fund CC&L Group Canadian Equity Segregated Fund BlackRock US Equity Index Segregated Fund (Registered) this investment is available for your DCPP, DPSP and RRSP BlackRock US Equity Index Segregated Fund (Non-registered) this investment is available for your TFSA and NREG MFS International Equity Segregated Fund MFS Global Equity Segregated Fund FMFs* 0.35% 0.75% 0.30% 0.14% 0.14% 0.59% 0.55% * Fund Management Fees (FMFs) are applicable to the TFSA and RRSP only. FMFs as of October 31, The FMFs displayed in this document do not include the applicable sales tax. However, these taxes are charged to your account. FMFs include, but are not limited to, fund operating expenses and investment management fees. Look for more information on Built BY Me funds on the Schlumberger mobile companion at sunlife.ca/welcometoschlumberger. SCHLUMBERGER New Hire Guide 19

22 SECTION 3: CONTINUED BUILT FOR ME OR BUILT BY ME... WHICH APPROACH IS RIGHT FOR YOU? Use the following chart as a guide, along with the results of the Asset allocation tool. Based on what is important to you, the suggested investment approach is check-marked. Built FOR Me vs Built BY Me Choose what is important for you from the following statements Built FOR Me Built BY Me I am looking for professional expertise in fund selection. I am looking for an approach that is 100% maintenance-free. I want asset allocation and rebalancing issues taken care of. I am interested in selecting my own funds. I will take the time to read the fund pages and understand the risks involved. IT S I want an approach that fits my personal risk profile and I will re-balance my account as necessary. IMPORTANT! Remember whether you choose the Built FOR Me or Built BY Me approach, you need to make investment selections. Choose a target date fund for the Built FOR Me approach, or individual investments for the Built BY Me approach. To learn more about individual investment funds in your Retirement and Savings Program, you can use Morningstar, a leading provider of investment news and analysis, available through mysunlife.ca/schlumberger. Select my financial future>quick Links> Investment performance. On the right hand side of the screen, select my fund performance>morningstar. To change your investments at any time, visit mysunlife.ca/schlumberger>my financial centre> Requests>Change investments. You can also update your account by calling Sun Life Financial s Customer Care Centre at any business day from 6 a.m. to 6 p.m. MT. 20 S C H L U M B E RG E R New Hire Guide

23 Possible charges for interfund transfers There are no charges for transfers; however, a two per cent fee will be charged when you move money into a fund followed by a move out of the same fund within 30 days. This is known as short-term trading. Monitor your investments Regardless of which investment approach you take, you should monitor your investments on at least an annual basis. As a participant in a retirement program it s your responsibility to: Understand your plan Keep your personal information and beneficiaries up-to-date with Sun Life Financial Choose how much to contribute Understand the available investment options Understand your individual risk profile Choose your investments for both your contributions and Schlumberger s contributions, and monitor your account Seek independent financial advice from a qualified professional if that makes sense for you Remember your investment decisions will impact the amount you accumulate in the Program. Who manages the managers? With the assistance of investment consultants, Schlumberger has selected the investment managers for their investment expertise, management styles, experience and investment track record. Schlumberger s Treasury Department is responsible for reviewing the investment managers performance on a regular basis. SCHLUMBERGER New Hire Guide 21

24 SECTION 4: ACT IT S If you haven t already, make sure you enrol! Follow the enrolment instructions on page 2 at the front of this brochure. IMPORTANT! For your DCPP and DPSP, you will automatically be set up in the plan to ensure that you benefit from Schlumberger s contributions. Your contribution rate will initially be set to 3% of your admissible compensation, the contribution level that maximizes the Company matching contribution This rate will increase automatically until you reach 5% (the contribution rate limit). See page 3 of this guide for more details.. If you do not select investments for your DCPP and DPSP, your contributions will be automatically invested in the default fund this will be the Granite Target Date Segregated Fund closest to, but not exceeding your 65th birthday. If you do not submit a completed and signed beneficiary form to Sun Life Financial, your beneficiary will default to your estate. Remember you can go online at any time to choose or change your contribution rate, investment mix and beneficiary designation. YOU RE NOT QUITE DONE YET Now that you ve made your investment choices, it s a good idea to set some time aside at least once or twice a year to review your retirement plan. Monitoring your personal account There are two ways to access up-to-date investment information and monitor your personal account: Either visit mysunlife.ca/schlumberger or call the Sun Life Financial Customer Care Centre at You can also access information on the Schlumberger mobile companion at sunlife.ca/welcometoschlumberger. 22 S C H L U M B E RG E R New Hire Guide

25 Reviewing and changing your payroll deductions If you have selected investments and later decide that you would like to change the amounts you are contributing, you can sign in to mysunlife.ca/schlumberger and select my financial centre>requests>contribute>payroll deduction and allocate your contributions by completing the payroll deduction instructions. Learning more about your investments through Morningstar Sign into mysunlife.ca/schlumberger. Select my financial future>quick Links>Investment performance. You will see a section entitled My fund performance on the right hand side of the screen. Under this, select Morningstar. Using the asset allocation tool Sign into mysunlife.ca/schlumberger. Select my financial future>quick Links>my money tools. You will be directed to the Asset allocation page. Select Continue and follow the prompts. Reviewing and changing fund allocations If you have made investment selections and later decide that you would like to change these, visit mysunlife.ca/ Schlumberger, sign in, select my financial centre>requests>change investments. Accessing beneficiary forms Visit mysunlife.ca/schlumberger, sign in, select my financial centre>quick Links>Beneficiary info. Accessing your statements Visit mysunlife.ca/schlumberger, sign in, select my financial centre>quick Links>Statements. SCHLUMBERGER New Hire Guide 23

26 SECTION 5: WHAT HAPPENS... It s important to understand what happens when things change in your life. The situations below are common situations that will impact your account balances. This section tells you what happens. when you retire Defined Contribution Pension Plan You are entitled to the full balance of your DCPP and, if you are vested, your DPSP account. You must be a member of the DPSP for at least two years before you are entitled to the balance in your account. When you retire, you may choose to use the value of your entire DCPP account to purchase a life annuity. A life annuity provides you with an income. You will pay tax on the income as it s received. The income amount is based on the amount used to purchase the annuity, your age, interest rates at the time of purchase and how long the income is to be paid. Note that annuity rates at the time you retire have a significant effect on the income from your annuity. If interest rates are low at the time you retire, your annuity value will be low too. If they are high, your annuity value will be high. Depending on your province of employment, you may instead transfer the balances of your accounts to: A Locked-In Retirement Account (LIRA) Your account balance can continue to earn tax-deferred investment income until you are ready to start receiving a retirement income. A Locked-in Retirement Income Fund (LRIF) You can receive an income while earning tax-deferred investment income within the fund. A Life Income Fund (LIF) This works the same way as a LRIF; however, once you reach age 90, you must use the remaining balance to purchase a life annuity. Any other plan permitted by applicable legislation Depending on your province, there may be other plans available to you. Deferred Profit Sharing Plan You have similar retirement income options for your DPSP account; however, the balance does not have to be directed to a locked-in investment. For example, you can: Receive a lump sum cash payment; however, it will be taxed as income. Use it to purchase an annuity from an insurance company you will pay tax on the income as it s received. Transfer an amount to an RRSP. Canada Revenue Agency gives you 90 days from your last day at Schlumberger to transfer the amount. If you don t, you will receive the balance of your account in cash and it will be taxed. Any combination of the above. Registered Retirement Savings Plan Your RRSP must be converted to a retirement income vehicle by the end 24 S C H L U M B E RG E R New Hire Guide

27 of the year in which you reach age 71. Tax-free Savings Account There is no withdrawal requirement based on age there is no need to convert it to another type of account at any age. Non-registered Account There is no withdrawal requirement based on age there is no need to convert it to another type of account at any age. if you are disabled What is vesting? Vesting refers to your ownership of employer contributions in your plan account. If you are disabled and receiving Schlumberger Short-term Disability benefits, you will continue to be a member of the DCPP and Schlumberger will continue to make contributions to the plan on your behalf. As your pay remains in place while receiving Short-Term Disability benefits, your employee and Company matching contributions remain as well. When the DPSP award is made for the year, it will be based on all admissible compensation, including your admissible compensation earned while you are on STD salary continuance benefits. If you continue on to receive Long-Term Disability benefits, all contributions to the DCPP and the DPSP will be suspended until your return to work. if you leave Schlumberger If you leave Schlumberger, you may take the balance in your DCPP and transfer it to: A Locked-In Retirement Account (LIRA) Your account balance can continue to earn tax-deferred investment income until you are ready to start receiving a retirement income. A Locked-in Retirement Income Fund (LRIF) You can receive an income while earning tax-deferred investment income within the fund. A Life Income Fund (LIF) This works the same way as a LRIF; however, once you reach age 90, you must use the remaining balance to purchase a life annuity. Any other plan permitted by applicable legislation Depending on your province, there may be other plans available to you. Use it to purchase an annuity from an insurance company you will pay tax on the income as it s received. SCHLUMBERGER New Hire Guide 25

28 SECTION 5: WHAT HAPPENS... You have similar options for your DPSP Account; however, the balance does not have to be directed to a locked-in investment. For example, you can: Receive a lump sum cash payment; however, it will be taxed as income. Use it to purchase an annuity from an insurance company you will pay tax on the income as it s received. Transfer an amount to an RRSP but you must transfer the amount within 90 days of your last day at Schlumberger. If you don t, you will receive the balance of your account in cash and it will be taxed. Any combination of the above. You can also elect to receive a lump sum cash payment of your DPSP account (taxed as income). Note that you must make a decision about the disposition of your DPSP account within 90 days of your last day of employment at Schlumberger. If Sun Life Financial does not receive your payment option within this period, you will automatically receive a lump sum cash payment of your DPSP balance. There is no similar deadline for selecting a settlement option under the DCPP. if your marriage breaks down If your marriage ends, a court order or separation agreement may require that your benefits be shared with your ex-spouse. For assistance and information regarding your assets in the event of a marriage breakdown, please contact the Sun Life Financial Customer Care Centre at if you die prior to retirement If you die before your DCPP has been transferred to a LIRA or annuity account, your spouse* or beneficiary will receive the total value of your account. If your spouse is your beneficiary, your spouse may choose to receive the death benefit as: A transfer to their registered pension plan, if permitted by that plan. A transfer to a life insurance company to purchase an immediate or deferred life annuity. A transfer to a Locked-In Retirement Account (LIRA) or RRSP. A lump sum cash payment (less applicable withholding taxes). If you do not have a spouse on your date of death, the death benefit will be paid as a lump sum cash payment to your beneficiary. 26 S C H L U M B E RG E R New Hire Guide

29 *Spouse PENSION JURISDICTION Alberta DEFINITION OF SPOUSE Effective June 1, 2003, the term spouse is replaced with the term pension partner. Pension plans can continue to use the term spouse if they so choose. However, the actual definition of pension partner must apply effective June 1, 2003, even if the plan has not been amended. The definition of pension partner is as follows: pension partner means, in relation to another person, (a) a person who, at the relevant time, was married to that other person and had not been living separate and apart from that other person for a consecutive period longer than 3 years, or (b) if there is no person to whom subclause (a) applies, a person who, immediately preceding the relevant time, had lived with that other person in a marriage-like relationship (i) for a continuous period of at least 3 years, or (ii) of some permanence, if there is a child of the relationship by birth or adoption British Columbia Spouse means, in relation to another person, (a) a person who at the relevant time was married to that other person, and who, if living separate and apart from that other person at the relevant time, did not live separate and apart from that other person for longer than the 2 year period immediately preceding the relevant time, or (b) if paragraph (a) does not apply, a person who was living with that other person in a marriage-like relationship for a period of at least 2 years immediately preceding the relevant time. On retirement and pre-retirement death, member not considered to have a spouse if matrimonial property order is filed prior to pension commencement or death Manitoba New Brunswick Spouse, where used to refer to the spouse of a member or former member, means the person to whom the member or former member is married. Common-law partner, where used to refer to a common-law partner of a member or former member, means a) a person who, with the member or former member, registered a common-law relationship under section 13.1 of The Vital Statistics Act, or b) a person who, not being married to the member or former member, cohabited with him or her in a conjugal relationship i) for a period of at least three years, if either of them is married, or ii) for a period of at least one year, if neither of them is married. Spouse*, in relation to a member or former member, means two persons who, (a) are married to each other, (b) are married to each other by a marriage that is voidable and has not been annulled by a declaration of nullity, or (c) have gone through a form of marriage with each other in good faith, that is void, and have cohabited within the preceding year. Common-law partner* means: (a) in the case of the death of a member or former member, a person who, not being married to the member or former member, was cohabiting in a conjugal relationship with the member or former member at the time of the death of the member or former member and was cohabiting in a conjugal relationship with the member or former member for a continuous period of at least two years immediately before the death of the member or former member, (b) in the case of the breakdown of a common-law partnership, a person who, not being married to the member or former member, was cohabiting in a conjugal relationship with the member or former member for a continuous period of at least two years immediately before the date of the breakdown of the common-law partnership, or (c) in any other case, a person who, not being married to a member or former member at the particular time under consideration, is cohabiting in a conjugal relationship with the member or former member at that time and who has so cohabited for a continuous period of at least two years immediately before that time; *if a spouse and a common-law partner both make a claim, the eligible spouse is entitled to the benefit unless there is a valid domestic contract or a decree, order or judgement of a competent tribunal that bars the spouse s claim.