ADDENDUM: 2007 CFO 401(k) PROVIDERS SURVEY Companies M Z

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1 ADDENDUM: 2007 CFO 401(k) PROVIDERS SURVEY Companies M Z Marshall & Ilsley Trust Co. Electronic statements Personal rate-of-return calculations available on participant Website Interactive, plan-specific, Web-based enrollment and education meetings Customized print-on-demand participant-enrollment and -education materials Expanded menu of targeted communication materials (such as technical, Spanish-speaking, etc.) Electronic prospectus delivery Link to summary plan description on participant Website Online access to pension-benefit payments Access to all management and operation reports via the plan-sponsor Website Ability to customize all management and operation reports 5. Does your company plan to increase its advisory-services business as a result of the new exemption to the Employee Retirement Income Security Act s prohibited transaction rules for advice under the Pension Protection Act of 2006? Yes If yes, in what way? This year M&I will offer independent investment advice via phone, Internet, and one-on-one meetings. The program is based on the company s three years of experience delivering one-on-one consultations to participants combined with Mastery Point s AdvicePlus product. Under this new service, MasteryPoint will provide written acknowledgement that it will provide investment advice as a fiduciary, subject to the fiduciary duties imposed by ERISA. Mercer HR Services 2. Has your company or affiliated persons been involved in any market-timing investigations? Yes Between 2003 and 2005, Putnam Investments, a sister company of Mercer HR Services, was involved in wellpublicized government investigations and enforcement actions related to market timing. In connection with the investigation, Putnam reached a settlement and agreed to pay restitution and penalties for fund losses attributable to excessive short-term trading, and to take other remedial actions. We believe that Putnam now has in place the strongest possible governance and compliance standards and procedures for the protection of plan participants against activities such as late trading and market timing. Addendum: 2007 CFO 401(k) Providers Survey, M Z Page 1 of 11

2 Mercer HR Services,, cont. 3. Is your company involved in litigation regarding fees, fee disclosures, or revenue sharing? No Does your company intend to change its policies regarding these issues? Yes Mercer HR Services currently has well-developed procedures for disclosure of the compensation it receives. It plans to enhance these communications in the near future, as well as take any steps necessary to comply with any newly introduced regulatory requirements in this area. 4. Has your company been investigated or are you being investigated for any issues by any outside agencies? No In late 2004, Marsh & McLennan Cos. and its subsidiaries and affiliates, including Marsh Inc., were the subject of a highly publicized complaint filed by the New York Attorney General concerning alleged improper placement practices involving contingent commissions. In January 2005, MMC reached an agreement with the New York State Attorney General and the Superintendent of the New York State Insurance Department that resolved all issues related to the allegations. Under the terms of the agreement, Marsh Inc. agreed to establish a fund of $850 million to compensate certain clients, and to undertake a series of business reforms, which have been successfully implemented. The complaint did not involve the services or activities of Mercer HR Services. Merrill Lynch Retirement Group In early 2007, The Retirement Group at Merrill Lynch implemented Roth 401(k) functionality. This offering includes: Ability to easily establish or change Roth contributions and pretax savings rates through Benefits OnLine. The Website also contains modeling tools and calculators to help participants determine whether Roth 401(k) or pretax contributions, or some combination of both, are appropriate for them. Inclusion of Roth 401(k) accounts in savings-rate recommendations through the Merrill Lynch Advice Access service A prototype plan document that allows for Roth 401(k) contributions as an election in the adoption agreement 1. Please describe any and all late-day-trading investigations, both past and present, which your company is either influenced by or is a part of. We are not aware of any current or pending litigation regarding our trading practices. In 2006, a Merrill Lynch analyst was terminated for being involved with insider-trading activities during 2004 and Addendum: 2007 CFO 401(k) Providers Survey, M Z Page 2 of 11

3 Merrill Lynch Retirement Group,, cont. Merrill Lynch & Co. Inc. and certain of its subsidiaries, including Merrill Lynch, Pierce, Fenner & Smith Inc., have been named as defendants in civil actions and have been involved in various regulatory inquiries arising out of their respective business activities. Merrill Lynch reports all material litigation in our annual Form 10-K report, filed with the Securities and Exchange Commission. In addition, Merrill Lynch, Pierce, Fenner & Smith Inc. reports all material regulatory matters on Schedule D of Form B D filed with the SEC. Company Profile, Services Provided Call-center service: How well have the centers performed? The Merrill Lynch Retirement Contact Center has received the following recognition: Highlighted for outstanding employee satisfaction, staffing, and training by Call Center magazine (2003) Certified as a Call Center of Excellence (2003 and 2004) by Purdue University and Benchmark Portal Certified by J.D. Power and Associates for providing an Outstanding Customer Service Experience in 2005, 2006, and 2007 Awarded Best in Class Honors by Plan Sponsor magazine for Participant Call Center Large Market (2005 DC Survey) The Merrill Lynch Retirement Contact Centers concluded 2006 with an overall satisfaction rate of 92 percent. Newport Group Roth 401(k) interactive financial-planning platform that enables participants to plan for retirement and preretirement goals, as well as analyze their investment mix/portfolio and receive personalized asset-allocation and investment guidance LifeWorks self-service employee-assistance program that helps participants deal with financial, family, personal, and workplace-related issues Fully automated rollover capabilities New defined-benefit/pension product line that covers qualified defined-contribution, qualified definedbenefit, and nonqualified deferred-compensation plans, as well as investment advisory services. New York Life Investment Management 5. Does your company plan to increase its advisory-services business as a result of the new exemption to the Employee Retirement Income Security Act s prohibited transaction rules for advice under the Pension Protection Act of 2006? Yes Addendum: 2007 CFO 401(k) Providers Survey, M Z Page 3 of 11

4 New York Life Investment Management,, cont. If yes, in what way? Each client is assigned a dedicated Employee Retirement Income Security Act consultant who is proficient in the new regulations brought about by the Pension Protection Act of We will assist each client in meeting the new requirements and fulfilling its duties as plan sponsor for its retirement plans, including the new exemption to ERISA s prohibited transaction rules for advice. Our ERISA Consulting department has already prepared the appropriate communication materials and begun consulting with its clients regarding the specifics of the PPA, how it affects them, and the steps necessary to complete any required actions. 2. Has your company or affiliated persons been involved in any market-timing investigations? No NYLIM has received requests for information from various government authorities and regulatory bodies regarding market timing and late trading, operations, expenses, and other matters in its mutual funds. We have no reason to believe that NYLIM or any of its affiliates has been targeted in connection with these inquiries as the subject of any governmental or regulatory enforcement action. Princeton Retirement Group We upgraded to OmniPlus (v5.5) in November New features include automated debits from withholding and automatic eligibility functionality, as well as enhancements such as 800 fund control records and rate-ofreturn calculators. As of April 1, we have added Roth 401(k) as an optional feature for our clients. 2. Has your company or affiliated persons been involved in any market-timing investigations? No In an effort to combat excessive trading, the SEC adopted Rule 22c-2, which requires (1) fund companies to consider imposing redemption fees on frequent traders, (2) transparency of participant-level trade activity, and (3) written agreements with intermediaries (such as Princeton Retirement Group) to provide transaction information. In anticipation of these changes, we developed technology to enable us to administer both redemption fees and trade blocks as directed by a mutual fund. Our goal, which has been accomplished successfully, was to build a robust system capable of meeting the expected myriad of measures to combat excessive trading available to the fund companies. We have also worked diligently with fund companies to ensure that that we have appropriate written agreements in place when Rule 22c-2 becomes effective. Addendum: 2007 CFO 401(k) Providers Survey, M Z Page 4 of 11

5 Prudential Retirement 5. Does your company plan to increase its advisory-services business as a result of the new exemption to the Employee Retirement Income Security Act s prohibited transaction rules for advice under the Pension Protection Act of 2006? Yes If yes, in what way? We continue to evaluate the PPA and the opportunity to both increase existing--and develop new--advisory services. We expect increased demand for our actuarial, plan compliance, and investment advisory services. 1. Please describe any and all late-day-trading investigations, both past and present, which your company is either influenced by or is a part of. On August 28, 2006, Prudential Equity Group LLC reached a settlement with the U.S. Attorney for the District of Massachusetts and other regulators and government authorities. The settlement resolved the investigations into market-timing-related activities involving the former retail broker-dealer business at Prudential Securities Inc. In 2003, Prudential Securities contributed that business to a joint venture controlled by Wachovia Corp. Prudential Equity Group retained liability for the activities at issue in the investigations. We no longer use the name Prudential Securities. Under the terms of the settlement, Prudential Equity Group paid $270 million into a Fair Fund administered by the SEC to compensate those harmed by the activities. In addition, $330 million has been paid as fines and penalties. The settlement resolved these investigations without further proceedings, provided the settlement terms are followed. Prudential Equity Group has sufficient previously reserved funds to cover these payments. Prudential cooperated with the authorities throughout the investigations. The activities addressed in the settlement did not affect Prudential Retirement s institutional sub-advised funds or stable-value products, nor recordkeeping or administrative services. Although certain mutual funds offered under plans administered by Prudential Retirement may be eligible for compensation as a result of the settlement, it does not relate to the operations of Prudential s retirement business or services the company provides to retirement plans. Prudential Financial and its operating subsidiaries are well capitalized to meet their obligations. The settlement will not affect our ability to meet our financial and other obligations associated with our products and services. 2. Has your company or affiliated persons been involved in any market-timing investigations? Please see our response to question #1, above. Prudential Retirement s Market-Timing/Excessive Trading policy monitors collective investment vehicles on its retirement platform to one uniform standard. Current monitoring criteria are: one or more trades into and out of (or out of and into) the same investment option within a rolling 30-day period when each trade is more than $25,000. Automatic or system-driven transactions do not constitute prohibited excessive trading and will not result in a warning or restriction. Upon identification of activity meeting the market-timing criteria, warning letters shall be sent to the participant (if a participant-directed plan) or to the plan fiduciary (if a trustee-directed plan). A copy of the letter and/or a trading-activity report will be sent to the plan fiduciary and sponsor. A second incidence of such activity within a six-calendar-month period, immediately following the first incidence, will trigger a trade restriction. Addendum: 2007 CFO 401(k) Providers Survey, M Z Page 5 of 11

6 Prudential Retirement,, cont. If a participant-directed plan has adopted the policy, or if specifically directed by the appropriate fiduciary of such a plan, Prudential Retirement will restrict a participant from trading through the Internet, phone, or fax. The participant or, if a trustee-directed plan, the appropriate plan fiduciary or its designee will be required to provide written directions via standard U.S. mail delivery for trades. A restriction will commence on the first business day of the calendar month following notification. The restriction will be for three calendar months, and may be extended incrementally if the behavior recurs during the six-calendar-month period immediately following the prior restriction. 4. Has your company been investigated or are you being investigated for any issues by any outside agencies? As a major financial institution, we and our affiliates are subject to governmental and regulatory reviews and inquiries and other legal proceedings in the normal course of our businesses, which in no manner restrict, limit, or affect our ability to provide services to retirement plans. In the last five years, there has been no material litigation arising from Prudential Retirement s definedcontribution business. As a public company, Prudential generally discloses material litigation concerning its businesses through filings with the SEC. For additional information on these matters, please see Prudential Financial s SEC filings at 5. Has your company been involved in or are you involved in any ethical investigations? Prudential, being a large financial-services organization, is frequently subject to regulatory exams by regulators and governmental authorities. As a public company, Prudential generally discloses material matters concerning its businesses through filings with the SEC. For additional information on these matters, please see Prudential Financial s SEC filings at Putnam Investments 1. Please describe any and all late-day-trading investigations, both past and present, which your company is either influenced by or is a part of. No allegations of late-day-trading have been made against Putnam in any investigation. Beginning in 2003, Putnam underwent one of the most comprehensive reviews ever conducted by a mutual-fund company. The review included the engagement of an outside expert to determine if any late trading had occurred in Putnam accounts. The review found no activity that suggested late trading. 2. Has your company or affiliated persons been involved in any market-timing investigations? Yes In 2003 and 2004, Putnam entered into settlement agreements with the Securities and Exchange Commission and a consent order with the Massachusetts Securities Division based on allegations of market timing. Under the settlement agreements, Putnam paid a total of $110 million ($25 million set aside for restitution) and agreed to pay full restitution to current and former Putnam shareholders. Putnam also agreed to a number of remedial actions, including new employee-trading restrictions, enhanced employee-trading compliance, the retention of an independent compliance consultant, the undertaking of periodic compliance reviews, and certification of compliance with the SEC. Addendum: 2007 CFO 401(k) Providers Survey, M Z Page 6 of 11

7 Putnam Investments,, cont. In March 2005, an independent assessment consultant (as required by the settlement agreements) concluded that $108.5 million is the total amount of restitution to be paid by Putnam. The independent assessment consultant's proposed distribution plan is currently being reviewed by the staffs of the SEC and the Massachusetts Securities Division. 3. Is your company involved in litigation regarding fees, fee disclosures, or revenue sharing? Yes Does your company intend to change its policies regarding these issues? Not at this time. Putnam is a defendant in a federal court action alleging receipt of excessive advisory and distribution fees. 4. Has your company been investigated or are you being investigated for any issues by any outside agencies? Yes. Putnam has been investigated by outside agencies for the following: (1) Putnam's procedure for issuing notices to its shareholders pursuant to Section 19a of the Investment Company Act of 1940; (2) Putnam s role as the directed trustee of a former client s retirement accounts prior to 2002; (3) Putnam's alleged failure to fully and effectively disclose certain brokerage allocation practices that existed prior to 2004; (4) the structure of the Putnam Research Fund's investment management fee; (5) Putnam's payment of certain meal expenses at various Putnam-sponsored educational sales programs prior to June 2004; (6) the correction of certain operational errors by Putnam Fiduciary Trust Co. in connection with the January 2001 transfer and investment of assets on behalf of a 401(k) defined-contribution plan, as well as the source and use of funds paid to a third-party vendor by PFTC in exchange for information consulting services; and (7) the market-timing issues discussed above. In addition, Putnam has and continues to receive inquiries (including requests for documents and information) in the course of its business from various state and federal regulators about certain policies and procedures. Each of these matters is handled in the ordinary course of business. Putnam fully responds to these requests and fully cooperates with all regulatory inquiries. Company Profile, Services Provided Call-center service: How well have the centers performed? Putnam has won the Dalbar Triple Crown Award for Service Excellence 8 out of the last 10 years. We have also won the Dalbar Mutual Fund Service Award 15 out of the last 16 years. Putnam exceeded industry standards to win the Mutual Fund Service Award for service to shareholders, the Annuity Service Award for exceptional service to annuity contract holders, and the Financial Intermediary Service Award for quality service to brokers. Putnam also received top honors in all three categories of the Financial Intermediary Service Award for excellent postsale and presale service. SunLife Retirement Services Open-architecture investing, offering more than 80 fund families and 1,000 funds Addendum: 2007 CFO 401(k) Providers Survey, M Z Page 7 of 11

8 SunLife Retirement Services,, cont. Expanded Investment Management Services Group assists plan sponsors with investment choices and provides information on investment menu changes. Analysts help identify and monitor funds based on style consistency, portfolio management, performance, and industry ranking. Equalized and single-source commissions on actively managed funds 4. Have there been other significant changes in your company s ability to serve 401(k) plans? Yes If yes, what were they? Sun Life Financial, our parent company, has substantially increased its financial investment in the retirementplan market, enabling us to enhance the range of products and services we offer. During the past 18 months, we have introduced a number of enhancements (see question #2, above). We have also tripled our sales force and doubled onsite enrollment and education services to better meet the needs of our clients and their plan participants. 2. Has your company or affiliated persons been involved in any market-timing investigations? Sun Life Retirement Services has not been directly involved in any market-timing investigations. SLRSI's former parent company, MFS Investment Management, reached agreement in 2004 with the SEC, the New York Attorney General, and the Bureau of Securities Regulation of the State of New Hampshire to settle administrative proceedings alleging false and misleading information in certain MFS fund prospectuses regarding market timing and related matters. We must adhere to each mutual-fund company s trading policies and procedures. Please refer to the appropriate mutual-fund company s Website for more information. Symetra Financial Implemented new administrative system to streamline processing and recordkeeping Contracted with State Street Bank and Trust Co. to provide custody and directed-trustee services Added more than 100 new investment options Contracted with Mesirow Financial Investment Management Inc. to perform independent investment selection and monitoring Introduced the President s Fiduciary Responsibility Guarantee to provide co-fiduciary protection for plan sponsors Addendum: 2007 CFO 401(k) Providers Survey, M Z Page 8 of 11

9 Symetra Financial,, cont. 4. Have there been other significant changes in your company s ability to serve 401(k) plans? Yes If yes, what were they? Launched plan-sponsor and TPA on-line access for our annuity 401(k) product in addition to the existing mutual-fund program. Utilized vendor to manage prospectus mailings and customized participant-enrollment forms. Installed front-end scanning system to facilitate paperless processing and automatic document retention. We launched online access for plan sponsors and TPAs, and we introduced customized, on-demand participantenrollment materials, including Spanish-language materials. Transamerica Retirement Services 4. Have there been other significant changes in your company s ability to serve 401(k) plans? Yes If yes, what were they? We enhanced the impact statements for participants and nonparticipants, and the annual sponsor-level reporting on plan effectiveness and capabilities. We also created two new educational seminars, Roth 401(k) and Women and Investing. Union Bank of California 1. Please describe any and all late-day-trading investigations, both past and present, which your company is either influenced by or is a part of. Union Bank of California and HighMark Capital Management are subsidiaries of UnionBanCalCorp (UNBC). In connection with recent investigations into mutual-fund-trading practices, UNBC was served with a federal grand jury subpoena. Issued at the request of the United States Attorney for Northern District of California, the subpoena requested documents relating to HighMark Funds s policies regarding shareholder trading and other practices. We have been advised by the assistant U.S. Attorney handling the investigation that, despite the service of the subpoena, none of UNBC, HighMark Capital Management, nor the Funds, nor any of their respective employees are targets of an investigation. Wachovia Retirement Services In 2006, we continued to expand our technology platform and implemented the following upgrades: Addendum: 2007 CFO 401(k) Providers Survey, M Z Page 9 of 11

10 Wachovia Retirement Services,, cont. Enhanced mapping at conversion: Plan sponsors may choose to map assets into age-based investing options and AdviceTrack, our personalized target-maturity option. Managed account default option: Plan sponsors may default employees into AdviceTrack. Automatic deferral increases: Plans may provide automatic deferral increases on an opt in or opt out basis. Plan sponsors choose the frequency available to participants. We now support IRC 402A (as added by EGTRRA), which permits Roth contributions. 2. Has your company or affiliated persons been involved in any market-timing investigations? Yes WRS conducted an internal review regarding market timing and after-hours trading. We determined that current procedures and controls are adequate and that the findings are not material to the operation of Wachovia s business. Evergreen Investments also conducted an internal review of its policies, procedures, and practices relating to market timing and late-day trading. Based on this review and on the ongoing regulatory focus on market timing and late-day trading, Evergreen has taken several actions. These include revising Evergreen s Code of Ethics and imposing a short-term redemption fee with respect to certain mutual funds. In addition, Evergreen has enhanced its market-timing monitoring procedures. 4. Has your company been investigated or are you being investigated for any issues by any outside agencies? Occasionally Wachovia and its affiliates are subject to litigation and/or inquiries from government agencies and self-regulatory organizations. None of these matters are or will be material to the operation of the company s business. 5. Has your company been involved in or are you involved in any ethical investigations? Occasionally Wachovia and its affiliates are subject to litigation and/or inquiries from government agencies and self-regulatory organizations. None of these matters are or will be material to the operation of the company s business. Wells Fargo Institutional Trust Services 2. Has your company or affiliated persons been involved in any market-timing investigations? No Wells Fargo Funds Management LLC has in place a rigorous screening and monitoring process to identify market timers and has personnel dedicated to reviewing shareholder activity across all of the Wells Fargo Funds on a daily basis. These market-timing procedures include a daily review of shareholder trading activity. If market-timing activity is suspected, the history of these trades is researched to determine whether there is timing activity occurring in contravention of the Funds s policies. If so, the implicated accounts are typically prevented from purchasing additional shares or making further exchanges. Once these accounts have redeemed their interests, they are typically closed. Addendum: 2007 CFO 401(k) Providers Survey, M Z Page 10 of 11

11 Wells Fargo Institutional Trust Services,, cont. The board of directors, on behalf of the Wells Fargo Funds that hold foreign securities, recently approved the engagement of a fair-valuation vendor to implement, in appropriate circumstances, fair-value prices for foreign security closing prices. Making fair-value determinations is particularly important for Funds that invest in securities that trade in non-u.s. markets, because these Funds are more susceptible to being targeted by markettimers seeking to take advantage of "stale" prices of underlying securities. The use of a vendor to assist in the fair valuation of foreign securities reduces the profit potential for market timers and the opportunity for arbitrage, thus discouraging market timers from investing in the Funds. 5. Has your company been involved in or are you involved in any ethical investigations? Wells Fargo Bank N.A. receives complaints and lawsuits that contain allegations made by private or governmental litigants. None of the current complaints or lawsuits would materially affect the ability of Wells Fargo to conduct its business or meet its obligations. Addendum: 2007 CFO 401(k) Providers Survey, M Z Page 11 of 11