LCEC Retirement Plan Oversight and Performance Update. March 17, 2016

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1 LCEC Retirement Plan Oversight and Performance Update March 17, 2016

2 Retirement Plan Structure LCEC provides two types of retirement benefits under two separate plans: Defined Benefits Traditional Plan Cash Balance Plan 401(k) Retirement plan policies have been developed to ensure proper oversight is in place

3 Retirement Plan Oversight Investment Committee Designated members of Executive Steering Committee, Board counsel, Internal Audit, Human Resources Meets quarterly Has engaged the services of an investment consultant (w/ Morgan Stanley) to assist in fulfillment of responsibilities and to provide independent expertise and opinion on plan management (John Hancock Retirement Plan Services) and performance Responsibilities Establish and review investment objectives, policies, amendments, and guidelines Review performance of plans and plan components Periodically report results overview to Board of Trustees

4 Retirement Plan Performance Update Following slides are excerpts from the most recent quarterly report prepared for and reviewed by the Investment Committee Report based on 4Q 2015 results

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15 401(k) Fund Performance LCEC Fund 2015 LCEC Fund 1-Year Performance 2015 Benchmark 1-Year Performance Benchmark JP Morgan SmartRet Income I -1.01% -1.75% Morningstar Retirement Income JP Morgan SmartRet Income 2015 I -0.91% -1.39% Morningstar Target Date JP Morgan SmartRet Income 2020 I -0.76% -1.60% Morningstar Target Date JP Morgan SmartRet Income 2025 I -0.94% -1.59% Morningstar Target Date JP Morgan SmartRet Income 2030 I -1.31% -1.81% Morningstar Target Date JP Morgan SmartRet Income 2035 I -1.50% -1.74% Morningstar Target Date JP Morgan SmartRet Income 2040 I -1.65% -1.98% Morningstar Target Date JP Morgan SmartRet Income 2045 I -1.55% -1.81% Morningstar Target Date JP Morgan SmartRet Income 2050 I -1.56% -1.97% Morningstar Target Date JP Morgan SmartRet Income 2055 I -1.61% -1.62% Morningstar Target Date MainStay Large Cap Growth I 6.17% 5.67% Russell 1000 Growth MainStay ICAP Select Equity I -3.98% -3.83% Russell 1000 Value Columbia Large Cap Index Z 1.23% 1.38% S&P 500 T. Rowe Price Mid Cap Growth Adv 6.28% -0.20% Russell Mid Cap Growth Vanguard Extended Market Index -3.27% -3.35% S&P Completion Index Artesan Mid Cap Value Investor -9.68% -4.78% Russell Mid Cap Value ClearBridge Small Cap Growth A -4.50% -1.38% Russell 2000 Growth Perkins Small Cap Value S -2.86% -7.47% Russell 2000 Value Oppenheimer International Growth Y 3.44% 4.47% MSCI EAFE Growth Harbor International Inv -3.82% -0.39% MSCI EAFE Lazard Emerging Markets Equity Open % % MSCI EM (Emerging Markets) Oakmark International I -3.83% -5.22% MSCI EAFE Value Vanguard Total International Stock I ndex -4.26% -4.03% FTSE Globall All Cap Ex US Index Nuveen Real Estate Secs I 3.48% 2.83% FTSE Nareit Equity-Reits BlackRock Natural Resources Inst % % S&P North America Natural Resources Sect Index PIMCO Real Return Instl -2.75% -1.44% Barclays Capital U.S. Treasury - U.S. TIPS Vangard Short Term Bond Index -0.92% -0.97% Merrill Lynch Domestic Master, 1-3 yrs. Metropolitan West Total Return I -0.29% -0.55% Barclays Capital U.S. Aggregate PIMCO Money Market Admin 0.02% 0.03% CitiGroup 3-month Treasury Bill

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19 Noted Items for 2015 Made contributions of $8,533,944 to Defined Benefit Plan Distributed assets of $1,195,385 from Defined Benefit Plan Rebalanced to Target on Defined Benefit Plan in February, May, and July New York Life sell to John Hancock Retirement Plan Services completed in June Distributed Employee Total Compensation and Benefits Statements Auto enrollment in 401(k) continues to be successful

20 Noted Items for 2015 Defined Benefit Class New Defined Benefit Funds Removed Defined Benefit Funds International Equity HEDGE/ALT/World Alloc. REITS Vanguard Developed Markets IDX Admiral (VTMGX) Harbor International Investor (HIINX) PIMCO All Asset All Authority (PAUIX) Voya Global Real Estate A (IGLAX) Defined Contribution 401(k) Fund Class Mid-Cap Equity International Equity Emerging Market Equity Small Cap Equity Fixed Income New Defined Contribution Funds Artisan Mid Cap Value (Investor Shares - ARTQX) Harbor International Fund (Investor Class - HIINX) Lazard Emerging Markets Equity Portfolio ( Open Shares - LZOEX) ClearBridge Small Cap Growth Fund (Class A - SASMX) Vanguard Short-Term Bond Index Fund (Investor Shares - VBISX) Removed Defined Contribution Funds Artisan Mid Cap Value Fund (Institutional Class - APHQX) Harbor International fund (Institutional Class - HAINX) Lazard Emerging Markets Equity Portfolio (Institutional Shares - LZEMX) ClearBridge Small Cap Growth Fund (Class I - SBPYX) Vanguard Short-Term Bond Index Fund (Admiral Shares - VBIRX)

21 Current Issues Monitor interest rates Continue to watch funding levels of defined benefit plan in light of distributions and MAP Consider automatic employee contribution increase for 401(k) Focus on employee education on saving for retirement

22 Questions