Reference Guide. MassMutual s Regulatory Advisory Services FOR PLAN SPONSOR USE ONLY.

201 $XGLWRUV Reference Guide MassMutual s Regulatory Advisory Services FOR PLAN SPONSOR USE ONLY.

Table of Contents Introduction... 6 What s New?... 6 PART I: Important Information for Year End Reporting... 7 1-1 Required Year-End Reporting for Defined Contribution Plans... 7 1-2 What is the Distinction Between the Audit of Investments at the Plan Level and the Mutual Fund Level?... 8 1-3 What is Included in the Auditor s Package?... 9 Overview of Auditor s Package Reports... 11 PART II: Overview of MassMutual... 14 2-1 MassMutual... 14 2-2 Reliance Trust Company (RTC)... 14 2-3 Charles Schwab Corporate Services... 14 2-4 DST Systems, Inc. (DST)... 14 PART III: Reporting for Fixed Income Fund, Stable Value Funds, other Common Collective Trusts (CCTs) and Group Annuity Product Investment Vehicles... 15 Fixed Income Fund, Stable Value Funds or Other Common Collective Trusts (CCTs)... 15 3-1 Is a Trustee Certification Available for the Fixed Income Fund, Stable Value Funds or Other CCTs?... 15 3-2 Do the Fixed Income Fund, Stable Value Funds or Other CCTs Fall Under the Reporting and Disclosure Requirements of Standard Operating Procedure (SOP) 94-41?... 15 3-3 Are the Fixed Income Fund, Stable Value Funds or Other CCTs Reported Using Fair Value Measurements?... 15 3-4 What Fair Value Information Does MassMutual Provide?... 16 3-5 What Fair Value Information Does MassMutual Provide for the Fixed Income Fund, Stable Value Funds or Other CCTs?... 16 3-6 Are the Fixed Income Fund, Stable Value Funds or Other CCTs Reported at Contract Value on the Trust Report?... 16 3-7 What is the Impact of the Financial Accounting Standards Board (FASB) Staff Position (FSP) on Form 5500 Reporting for the Fixed Income Fund, Stable Value Funds or Other CCTs?... 17 3-8 How are the Fixed Income Fund, Stable Value Funds or Other CCTs Reported on Schedule D - DFE/Participating Plan Information (Schedule D)?... 17 Group Annuity Investment Product... 17 3-9 What is a Group Annuity Investment Product?... 17 3-10 How is a Group Annuity Investment Product Identified?... 17 3-11 What is the Difference Between a Fixed Income Fund and the Fixed Investment in a Group Annuity Investment Product?... 18 1

3-12 What Fair Value Information Does MassMutual Provide for the Fixed Investment in a Group Annuity Investment Product?... 18 Master Trust... 18 3-13 What is a Master Trust?... 18 3-14 What are the Filing Requirements for the Institution Sponsoring a Master Trust?... 19 Self-Directed Brokerage Account (SDBA)... 19 3-15 What is the SDBA Feature Offered for Certain MassMutual Institutional Retirement Plans... 19 Employer Stock Unitization... 20 3-16 What is the Unitization of Stock and how are the Units Valued?... 20 3-17 How Does MassMutual Report the Unitized Stock Fund as an Asset on Schedule H?... 21 PART IV: Trustee and Certification of Plan Assets, Audit Types, Statement on Standards for Attestation Engagements 16 (SSAE 16) Reports and Bonding Requirements... 21 Trustee and Certification of Plan Assets... 21 4-1 What is the Role of a Trustee or Custodian Certification in a Limited Scope Audit? 21 4-2 What Entities Associated With MassMutual may Issue a Trustee Certification in Accordance With ERISA Regulation Section 2520.103-5(c)?... 22 4-3 MassMutual is Unable to Provide a Trustee Certification Pursuant to ERISA Regulation Section 2520.103-5(c) for use in a Limited Scope Audit for Mutual Fund Product Plans and Does not act as a Holder of Plan Assets... 23 4-4 Why Will the Designated Directed Trustee Certify a Statement of Plan Assets as Recorded on the Summary Trust Report and not Certify Other Audit Reports?... 23 4-5 Can MassMutual Provide a Trustee Certification for Insurance Plans?... 24 Audit Types... 24 4-6 What is a Limited Scope Audit and When Does it Apply?... 24 4-7 What is a Full Scope Audit?... 24 4-8 Will the Presence of a Statement on Standards for Attestation Engagements 16 (SSAE 16) Report Influence the Plan s Decision to Pursue a Limited-Scope Audit? 25 4-9 Does the Limited Scope Audit Exemptions Apply if Reliance Trust Company (RTC) has Agreed to act as Directed Trustee or Custodian but the Plan Contains Certain Assets That are not Record Kept by MassMutual?... 25 4-10 Will the Limited Scope Audit Exemption Still Apply Where Reliance Trust Company (RTC) has not Agreed to Act as Directed Trustee for any Portion of the Plan s Assets?... 26 Statement on Standards for Attestation Engagements 16 (SSAE 16) Reports... 26 4-11 What is the SSAE 16 and What Beneficial Information is Contained in a SSAE 16 Report?... 26 4-12 Does MassMutual Have an SSAE 16 Service Organization Control 1 (SOC 1) Report?... 26 2

Bonding Requirements for Defined Contribution Plans... 27 4-13 Is the Organization s Qualified Retirement Plan Required to be Covered by a Fidelity Bond?... 27 4-14 What Type of Bonds are Permissible to Meet the Bonding Requirements?... 28 4-15 Is Fiduciary Liability Insurance Necessary?... 28 PART V: Late Contributions and the DOL s Voluntary Fiduciary Correction Program (VFCP)... 29 5-1 Under the DOL Plan Asset Rule, What Constitutes a Late Deposit of Participant Contributions and/or Loan Repayments?... 29 5-2 Are Contributions Deemed Late Considered Prohibited Transactions?... 29 5-3 Where can I Find Additional Information Concerning Late Contributions?... 30 5-4 What is the Employee Benefits Security Administration (EBSA) VFCP?... 30 5-5 How is the Correction Amount Calculated Under the VFCP for Late Contributions Made to Participant-Directed Plans?... 31 5-6 What if the Participant Contributions to the Plan Were Delinquent, but the Dollar Amount Needed to Correct is Very Small? Do I Have to Participate in the VFCP? 32 5-7 Is a Form 5330 (Return of Excise Taxes Related to Employee Benefit Plans) Filing Required to Report Late Contributions?... 32 5-8 What is the Filing due Date for Reporting Late Contributions on the Form 5330 (Return of Excise Taxes Related to Employee Benefit Plans?) What are the Penalties for Late Filing?... 32 5-9 What are the Form 5500 Reporting Requirements for Late Contributions?... 33 PART VI: MassMutual Plan Accounting and Systems Processing and Information for Plans Converting to MassMutual... 33 Plan Accounting and Systems Processing... 33 6-1 Does MassMutual Value Plan Assets on a Daily Basis?... 33 6-2 Is Historical Cost Utilized in Reporting and Should it be Used on the Form 5500?.. 34 6-3 Is the Trust Report Calculated on a Cash or Accrual Basis?... 34 6-4 Do the Reports From the MassMutual Recordkeeping System Segregate Realized and Unrealized Gains/Losses and how are Earnings Reported on the Form 5500?... 35 6-5 Why is the Trust Report Separated by Location?... 35 6-6 Why Don t Participants Mutual Fund Earnings Reconcile to the Annual Return Rate of the Mutual Fund as Published in Their Annual Report?... 35 6-7 Is the Plan s Forfeiture Account Activity Included in the MassMutual Reports?... 36 6-8 What Type of Expenses are Reported on the Trust Report?... 36 6-9 What are the Trustee Transfer In and Trustee Transfer Out Lines Found on the Trust Report?... 36 6-10 Why has MassMutual not Performed Year-End Compliance Testing?... 37 Information for Plans Converting to MassMutual... 37 6-11 How Does MassMutual Ensure Accurate Conversion of all Historical Data and What Conversion Audit Reporting is Provided?... 37 6-12 How are Investments Handled During the Conversion Process?... 37 3

PART VII: Filing Information for Form 5500, Related Schedules and Loan Reporting... 38 7-1 When is the Form 5500 Filing Deadline?... 38 7-2 What Should I do if I Miss the Filing Deadline?... 39 7-3 Are There Penalties for Failing to File Form 5500 and Related Schedules?... 39 7-4 Is a Plan Administrator Required to Provide Information From the Form 5500 to Participants and Beneficiaries?... 40 7-5 Where can I get Additional Information on the Form 5500 and all Related Schedules?... 40 7-6 What are the Eligibility Requirements for a Form 5500-SF?... 40 7-7 How Does an Employer Obtain a Three-Digit Plan Number in the Initial Plan Year? 41 7-8 What is the Definition of Participant for the Purpose of Form 5500?... 41 7-9 Why is the Participant Count Reported as of the Beginning of the Current Plan Year (Line 5 of Current Year s 5500) Different From the Participant Count Reported at the Closing of the Prior Plan Year (Line 6 of Prior Year s 5500)?... 42 7-10 What Circumstances Necessitate the Filing of a Schedule C Service Provider Information (Schedule C)?... 42 7-11 What is a 5% Reportable Transaction for Purposes of the Form 5500 Filing?... 43 7-12 What is Reported on the Schedule H Financial Information, line 4j Schedule of Reportable Transactions Attachment?... 44 7-13 What EIN Should be Reported for the Payor on Schedule R Retirement Plan Information (Schedule R), Part I, line 2?... 44 7-14 Could you Provide Sample Language for Notes to the Financial Statements That Incorporates the Changes under SOP 94-4-1?... 44 7-15 Could you Provide Sample Language for Notes to the Financial Statements That Reconciles the net Assets Available for Benefits on the Financials to Form 5500?. 45 Form 5500 Loan Reporting... 45 7-16 Where is Information About the Plan s Loan Program Available and What are Some of the General Requirements for Participant Loans?... 45 7-17 What are the tax Consequences to a Participant When the Plan Administrator Determines That a Participant Loan has Defaulted?... 45 7-18 Why Does the Amount of an Outstanding Participant Loan Balance on the Trust Report not Reconcile With the Plan Administrator s Records?... 47 7-19 What is the Loan Closeout Transaction Indicated on the Trust Report?... 47 7-20 How is the Loan Closeout Amount Accounted for on the Schedule H of the 5500 Filing?... 48 7-21 Should Participant Loan Defaults be Included on Schedule G Financial Transaction Schedules (Schedule G)?... 48 PART VIII: Group Annuity Investment Product Form 5500 and Related Schedules... 48 8-1 How is the Form 5500 Filing Different for Group Annuity Investment Product Plans?... 48 8-2 If the Plan has Selected a Group Annuity Investment Product, why are all of the Investments Offered in the Plan not Reported on Schedule A Insurance Information (Schedule A)?... 49 8-3 What Information is Different on Schedule A Aren t all Insurance Products Reported the Same way on This Schedule?... 49 4

8-4 Is the Schedule A, Part II Information Included in the Accountant s Examination for the Annual Plan Audit?... 49 8-5 Why Does MassMutual Self-Certify the Trust Report for the Group Annuity Investment Product?... 49 8-6 Where is the Documentation Located for the Financial Detail Reported in Schedule A?... 50 8-7 What Financial Information is Reported in Part II on Schedule A and why Does it not tie to the Financial Information Reported on Schedule H Financial Information?.. 50 8-8 Why is There a Small Difference in the Values Reported on Schedule A Lines 4 or 5 to the Values Reported on Schedule H?... 50 8-9 Why are Pooled Separate Account (PSA) Investments Reported to Mirror Their Underlying Investment and not Reported as a PSA in the Assets Section of Schedule H, Part I?... 50 8-10 Why are the Pooled Separate Account (PSA) Investments not a Direct Filing Entity (DFE)?... 51 8-11 In the Income Section of Schedule H, Part II, why are the Pooled Separate Account (PSA) Earnings Reported as PSA Earnings and not Reported to Mirror Their Underlying Investments?... 51 Appendix... 52 Appendix A: ASC 820 Suggested Fair Value Levels... 52 Appendix B: Form 5500, Schedules and Attachments Quick Reference Chart... 53 Appendix C: Form 5500 Schedules Overview... 55 Appendix D: Form 5500, Schedule A Illustrations for Group Annuity Investment Product... 57 Appendix E: Form 5500 Schedule D Illustrations... 66 Appendix F: Form 5500 Schedule H Illustrations... 67 Appendix G: Form 5500 Summary Annual Report Cross-Reference Chart... 74 Appendix H: Form 5500 and Form 8955-SSA Penalties Chart... 71 5

IRS Circular 230 Disclosure: This communication was written in connection with the potential promotion or marketing, to the extent permitted by applicable law, of the transaction(s) or matter(s) addressed herein. However, Massachusetts Mutual Life Insurance Company (MassMutual) and its affiliates do not provide legal or tax advice. Accordingly, to the extent this communication contains any discussion of tax matters, such communication is not intended or written to be used, and cannot be used, for the purpose of avoiding tax-related penalties. Any recipient of this communication should seek advice from an independent tax advisor based on the recipient's particular circumstances. Introduction What s New? MassMutual is pleased to provide plan sponsors and their auditors this Auditor s Guide which is intended to provide you with useful information regarding your reporting package for you and your auditors. Please use the Auditor s Guide as the first point of reference for the audit of the financial statements for the Form 5500 filing. Internal Revenue Service (IRS) Compliance Questions The IRS has decided not to require plan sponsors to enter the Preparer s information at the bottom of the first page of Form 5500 for the 2016 plan year and plan sponsors should skip these questions when completing the form. The IRS has decided not to require plan sponsors to complete questions on Schedules H and I, Lines 4o, and 6a through 6d, for the 2016 plan year and plan sponsors should skip these questions when completing the form. The IRS has decided not to require plan sponsors to complete questions on Schedules R, Part VII IRS Compliance Questions for 2016 plan year and plan sponsors should skip these questions when completing the form. The IRS has decided not to require plan sponsors to complete the compliance questions on the 2016 Form 5500-SF. Plan sponsors should skip the Preparer information (page 1 bottom), the questions on Part VIII-Trust Information and Part IX IRS Compliance questions when completing the form. The Auditor s Guide features several technical pieces and roadmap discussions relating to selected aspects of preparing and filing your plan s Form 5500 Annual Return/Report of Employee Benefit Plan (Form 5500); descriptions of certain MassMutual processes and systems and other general information on audit preparation. The Auditor s Guide also contains an overview of the Auditor s Package, a set of reports provided to plan sponsors and their auditors for use in the Form 5500 auditing process. As a non-discretionary, non-fiduciary directed service provider, MassMutual is providing this Auditors Guide for information purposes only. It does not and is not intended to offer plan sponsors or their auditors, legal or tax guidance. This Auditor s Guide is intended only to provide general summary information that may be helpful to auditors and plan sponsors in planning their audits and in their preparation of the Form 5500 and related schedules. 6

bond to cover the non-qualifying plan assets. An enhanced bond is a bond that must be equal to 100% of the value of the nonqualifying plan assets, not just the amount in excess of 5%. PART I: Important Information for Year End Reporting For purposes of this question, qualifying plan assets includes: 1-1 Required Year-End Reporting for Defined Contribution Plans 1. Any assets held by certain regulated financial institutions, including an insurance company qualified to do business under the laws of a state (e.g., MassMutual), a bank or similar financial institution as defined in ERISA regulation section 2550.408b-4(c), or an organization registered as a broker-dealer under the Securities Exchange Act of 1934; Defined contribution plans subject to ERISA must file Form 5500 Annual Return/Report of Employee Benefit Plan (Form 5500) under the Employee Retirement Income Security Act of 1974 (ERISA) and relevant law. Plans considered to be large plan filers must include audited financial statements and the opinion of an independent qualified public accountant (IQPA) for the filing to be considered complete. Plans with fewer than 100 participants at the beginning of the plan year ( small plans ) may be eligible for a waiver from this requirement. 2. Shares issued by an investment company registered under the Investment Company Act of 1940 (e.g., mutual funds); 3. Investment and annuity contracts issued by any insurance company qualified to do business under the laws of a state; Waiver of IQPA Examination Requirement Small pension plans may claim a waiver of the annual examination and report of an IQPA if they meet the conditions of ERISA regulation section 2520.104-46 summarized below. For more information regarding these requirements, see the Employee Benefits Security Administration s (EBSA) Frequently Asked Questions on the Audit Waiver Requirement for Small Pension Plans and ERISA regulation section 2520.104-46, both of which are available at www.dol.gov/ebsa or call the EFAST Help Line at 1-866-463-3278 (toll-free). 4. In the case of an individual account plan, any assets in the individual account over which the participant or beneficiary has the opportunity to exercise control and with respect to which the participant or beneficiary is furnished, at least annually, a statement from a regulated financial institution(s) describing the assets held by the institution and the amount of such assets; 5. Qualifying employer securities; and 6. Participant loans meeting the requirement of ERISA section 408(b)(1). Condition 1: At least 95 percent of plan assets are qualifying plan assets as of the end of the preceding plan year; or, any person who handles assets of the plan that do not constitute qualifying plan assets is bonded in accordance with the fidelity bond rules of ERISA section 412. Condition 2: The plan administrator must include the following information in the Summary Annual Report (SAR) furnished to participants and beneficiaries of DC plans in accordance with ERISA regulation section 2520.104b-10: If your plan has more than 5% of its assets in non-qualifying plan assets your plan may still be eligible for the small pension plan audit waiver if your plan obtained an enhanced 7 1. The name of each regulated financial institution holding or issuing qualifying plan assets and the amount of such assets

reported by the institution as of the end of the plan year (this SAR disclosure requirement does not apply to qualifying employer securities, participant loans and individual account assets as described in 4, 5 and 6 above); 2. The name of the surety company issuing the fidelity bond, if the plan has more than 5% of its assets in non-qualifying plan assets; 3. A notice that participants and beneficiaries may, upon request and without charge, examine or receive from the plan evidence of the required bond and copies of statements from the regulated financial institutions describing the qualifying plan assets; and 4. A notice that participants and beneficiaries should contact the EBSA Regional Office if they are unable to examine or obtain copies of the regulated financial institution statements or evidence of the required bond, if applicable. Condition 3: Upon request, the plan administrator, without charge to the participant or beneficiary, must make available for examination copies of each regulated financial statement (e.g., MassMutual certified Statement of Assets and Liabilities) and evidence of the required bond. If all of the small pension plan assets are invested with MassMutual, the plan administrator may claim a waiver from this auditing requirement. However, should the plan administrator choose to not claim a waiver and decide to engage an auditor to prepare audited financial statements, please contact your MassMutual Service Representative to have line 4k changed to No. In addition, be sure to attach the required audited financial statements. Note: For small plans that check No, the audited financial reports must make the appropriate disclosures about delinquent deposits of employee contributions if the information reported on line 4a is not 8 presented in accordance with regulatory requirements. 1-2 What is the Distinction Between the Audit of Investments at the Plan Level and the Mutual Fund Level? Status of mutual fund shares as plan assets in an employee benefit plan ERISA section 401(b)(1) provides that a plan that invests in any security issued by an investment company registered by the Investment Company Act of 1940 (which includes all mutual funds, (also known as open-ended companies), closed-end funds (also known as closed-end companies), and UITs (also known as unit investment trusts.) will include such security as an asset, but will not, solely by reason of the plan s purchase of such a security, be deemed to include any of the underlying assets of the investment company. The Department of Labor s (DOL) plan asset regulations, ERISA regulation section 2510.3-101(a)(2) similarly excludes the underlying assets of a mutual fund company from being plan assets. Responsibility of mutual fund auditor The responsibility for the audit of the investment portfolio of the mutual fund, including confirmation of the existence of securities, valuation and the testing of transactions, rests with the mutual fund auditor. Such auditor is also responsible for the evaluation of controls in effect for the mutual fund and each of its agents. Responsibility of retirement plan auditor: Full Scope Audit The plan auditor is responsible solely for the audit of the investments of a retirement plan in a full scope audit. This includes an evaluation of the plan s controls, the confirmation (with MassMutual) of the plan s ownership interest in various mutual funds, the valuation of such funds and the testing of investment transactions in as much as such activity relates to the authorization for the purchase and

redemption of mutual fund shares and the testing of investment income and gains as summarized on the mutual fund statements. confirmation of securities owned as of November 30, by correspondence with the custodian and others. We believe that our audits provide a reasonable basis for our opinion. The scope of the plan auditors work does not extend down to the level of the portfolio transactions of the mutual funds (nor to the controls of the fund or its custodian agents) because such activity and controls are subject to audit and evaluation at the fund level by the mutual fund auditor pursuant to the Securities and Exchange Commission (SEC) requirements stated above You may obtain a copy of any Annual Report for the funds owned by the plan by going directly to the fund s websites. Since this information, together with the Confirmation of Assets for the plan, should be sufficient for your auditing procedures, it is not necessary to receive an independent confirmation from a fund custodian. The plan auditor may rely upon the Independent Auditor s Report included in the annual report for each mutual fund to prove that the underlying securities in the funds owned by the plan exist. Language similar to the following example can be found in the specific Annual Report for each underlying investment: With a limited scope audit there are no audit procedures performed on the investments and related activity that is prepared and certified to by the ERISA Certification. For information on Limited Scope Audit, please refer to page 23. We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. We were not engaged to perform an audit of the Fund s internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Fund s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements and financial highlights, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. Our procedures included 1-3 What is Included in the Auditor s Package? The Auditor s Package provides information regarding plan assets that MassMutual recordkept during the plan year. It is designed to assist with the preparation and review of Form 5500 and related schedules. MassMutual audit and Form 5500 reports and supporting materials are available to download and, if needed, can be reordered from the Plan Access website. Please contact the plan sponsor to have them arrange for your access to the site during the plan audit. Six weeks following the plan year end, the audit and the plan s Form 5500 reports and supporting materials are automatically saved to the Plan Access website. The reports are in portable document format (.pdf) and can be saved to your local drive or printed. Reports with greater than 20,000 lines of text will be saved to Plan Access by the MassMutual Representative assigned to the plan. 9

Reports can be re-run from the Plan Access site. The completed report will be automatically uploaded to the site the following business day, if less than 20,000 lines. Please contact the MassMutual Representative assigned to the plan and request a manual upload of any re-run reports which are not available on the site the following business day. The following Overview of Reports identifies the individual reports provided and a brief description of the information contained in the reports. Note on Reporting Formatting: The layouts on some reports have been compressed to present the information on one page. Each column of the compressed reports contains two stacked headings corresponding to the two sets of entries in each row. 10

Overview of Auditor s Package Reports Report Name Participant Count Detail Report for Plan Year Loan Status Detail Report Trust Report Daily Distribution Report Annual Activity Report Modified Accrual Contribution Received Report Current Year Receivable Contribution Report Prior Year Receivable Contribution Report Distribution Receivable Report Chronological Loan Repayment Report Loans Established in Plan Year Report Distributed Loan Report Mistake Of Fact Distributions CDSC/Fee Report Produce Automatically May be Re-run by Auditor Yes No Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Upload Manually Excess Deferral Report Yes No, upon request to MassMutual Representative No, upon request to MassMutual Representative Reports greater than 20,000 lines need to be uploaded to Plan Access by the MassMutual Representative 11

Report Name Description of Report Provides various listings of participants, based on the participant s plan status, from MassMutual s recordkeeping system. The report lists the participant s Date of Birth, Date of Hire, Status Date, and Account Balance (Vested). This information determines the participants reported in each category for lines 5 and 6 on the Form 5500 or Form 5500-SF. Participant Count Detail Report for Plan Year Details participant loan information to verify and monitor loan activity. The report provides loan status information, amounts, dates, payment frequency, number of days past due and the number of loans by aging categories. Loan Status Detail Report The Trust Report is generated on a confirm date basis. It summarizes the transaction history by money type and investment vehicle for each participant, company location and in total. This report includes investment activity at the participant and plan level for the plan year. The information includes beginning and ending investment balances, contributions, dividends, gain/losses, exchanges, forfeitures, distributions and loan activity. This report includes all fund level activity for the plan year. Please note this is the report that is certified by Reliance Trust Company (RTC) o r MassMutual, including, in certain circumstances, by MassMutual in its capacity as administrative services provider for contracts issued by the Hartford Life Insurance Company. Trust Report Daily Distribution Report * Details the confirmed distributions processed for each participant within the plan year. The distribution information that is displayed details deductions such as tax withholding, contingent deferred sales charge (CDSC), close out dividends, fees and forfeitures by trade date and confirmation date. This report should be used to identify the distribution sample population. Annual Activity Report** Lists all fund level transactions by fund price and number of shares for the plan year. The report will reconcile to the individual funds closing balances on the Trust Report. Modified Accrual Contribution Receivable Report Current Year Receivable Report Prior Year Receivable Report These reports provide the information required to assist auditors in reconciling the Trust Report contribution information which is reported on a confirm basis to the contributions reported on the Form 5500. This report should not be used to determine the observable date of funding separated from the general assets of the employer or to determine if funds were deposited into an interim account. Please note that the draft copy of the Form 5500 is completed on a cash basis. Distribution Receivable Report 12

Chronological Loan Repayment Report Lists all loan payments split by principal and interest for a loan in which a participant has made payments. The total principal and interest payments will reconcile to the Transfer Out Amount of the Loan Fund on the Trust Report. Loans Established in the Plan Year Report * All loans that have a loan start date or conversion date within the plan year. The report will reconcile to the Transfer In Amount and the Conversion Value of the Loan Fund on the Trust Report. This report should be used to identify the loans established sample population. Distributed Loan Report Includes all loans that have been distributed (deemed loans, offset loans, transfer loans, and rollover loans) for the plan year. Mistake of Fact Distribution Report Includes Mistake of Fact transactions for the plan year prepared by money type. Also reports the Mistake of Fact Amount, Requested Distributed Amount, and Gain/Loss. The Mistake of Fact may include earnings if the earnings were calculated by MassMutual and were not forfeited. The Mistake of Fact Total Amount reconciles to the Mistake of Fact Amount on the Trust Report. CDSC/Fee Report Lists any direct fees withheld from participant s accounts during the plan year or frequent trading fees incurred. Report will be provided upon request. Excess Deferral Report Details excess elective deferrals refunded by participant request. Fixed Income Fund or Stable Value Fund Annual Report and certification, if applicable If your plan offers a Stable Value or other vehicle organized as a Common Collective Trust (CCT), Annual Reports, as well as certifications and other ancillary reporting will be posted to Plan Access under Reporting/Audit Package/Documents by year. * Distribution and Loans Established Report: No participant request documentation will be available if the plan permits phone or web-based transactions. Distributions made using a systematic withdrawal plan will not have documentation if the withdrawal plan was established in a prior plan year. There will not be a check copy for loans or distributions funded using ACH or wire. ** Annual Activity Report: Any transactions that do not impact share position will not be reflected because this is a share-based report. An example of an individual account activity transaction that would not appear on the report is a cash dividend processed to a participant s account. This activity will appear on the trust report detail, but will not list as a transaction item on the Annual Activity Report. The Trust Report and Annual Activity Report, however, will always be in balance. 13

PART II: Overview of MassMutual 2-3 Charles Schwab Corporate Services Charles Schwab Corporate Services (Schwab) is a provider of brokerage services to some MassMutual retirement plan clients and their participants pursuant to an agreement between the Employer, MassMutual and Schwab. Schwab offers on-line trading, account statements, and other services for Self Directed Brokerage Accounts (SDBAs). Participants can invest in a wide variety of stocks, bonds, government securities, and other investments. 2-1 MassMutual MassMutual provides all administrative services to support the insurance contracts issued by Hartford Life Insurance Company (HLIC). MassMutual, in its capacity as recordkeeper and directed services provider, does not hold plan assets or initiate transaction processing. Most transactions are initiated by the plan sponsor or plan participants; the remaining transactions are investment originating transactions such as the reinvestment of dividends. Transactions are processed on TRAC, a computer application supported by DST Systems, Inc. (DST). TRAC is a recordkeeping system for defined contribution plans. 2-4 DST Systems, Inc. (DST) DST is a registered transfer agent with the SEC, providing shareowner servicing functions to the mutual fund industry. The mutual fund recordkeeping and shareholder servicing system (TRAC) was designed to provide full-service processing or to provide services to clients on a remote basis. Fullservice clients use virtually all available services offered by DST including input, transaction processing and output control. Remote clients use the DST system, wherein all transaction input, output and review is performed at the clients locations. MassMutual uses DST s TA2000 and TRAC-2000 systems for processing transactions on participant and/or plan accounts. MassMutual also uses DST Output for printing participant statements. A SSAE 16 Report prepared on a fiscal year basis is available for DST and a gap period letter is provided. The 2016 MassMutual SSAE 16 SOC 1 Type 2 Reports for the period 10/01/2015 9/30/2016 which pertains to the TRAC platform issued by our auditor, covers all processes and controls related to the participant recordkeeping and participant transaction processing functions performed by MassMutual during the 2016 plan year. 2-2 Reliance Trust Company (RTC) RTC, a Georgia based trust company not affiliated with MassMutual, provides trust and custodial services to corporations and individuals. RTC serves as directed trustee for certain electing qualified plans. RTC does not generally perform participant recordkeeping functions for qualified employee benefit or retirement plans. A SSAE16 Report prepared on a fiscal year basis is available for RTC, upon request. 14

PART III: Reporting for Fixed Income Fund, Stable Value Funds, other Common Collective Trusts (CCTs) and Group Annuity Product Investment Vehicles Fixed Income Fund, Stable Value Funds or Other Common Collective Trusts (CCTs) 3-1 Is a Trustee Certification Available for the Fixed Income Fund, Stable Value Funds or Other CCTs? For plans that utilize RTC as a directed Trustee or appointed custodian, the Trustee Certification issued by RTC covers all funds reported on the Trust Report including the Fixed Income Fund, Stable Value Funds and CCTs. 3-2 Do the Fixed Income Fund, Stable Value Funds or Other CCTs Fall Under the Reporting and Disclosure Requirements of Standard Operating Procedure (SOP) 94-4- 1? The Financial Accounting Standards Board (FASB) Staff Position (FSP) provides guidelines for the proper valuation and reporting for financial accounting purposes of fully benefit responsive investment contracts. All investment contracts held in the Fixed Income Fund, Stable Value Funds or other CCTs are fully benefit responsive within the meaning of SOP 94-4-1. Withdrawals from these contracts may be made at contract value for the qualified benefit payments, including participant-directed transfers. 3-3 Are the Fixed Income Fund, Stable Value Funds or Other CCTs Reported Using Fair Value Measurements? Statement of Financial Accounting Standards (SFAS) ASC 820 defines fair value, establishes a fair value hierarchy and specifies that a valuation technique used to measure fair value shall maximize the use of observable inputs and minimize the use of unobservable inputs. As required by SFAS ASC 820, the Fixed Income Fund, Stable Value Funds or other CCT investments are classified within the level of the lowest significant input considered in determining fair value. 15

3-4 What Fair Value Information Does MassMutual Provide? For employee benefit plans which prepare annual financial statements in accordance with Generally Accepted Accounting Principles (GAAP), plan sponsors are generally required to classify their plans investment options into one of three levels. Classifying plan investment options is the responsibility of the plan sponsor. The following is a definition of the three levels as described in the applicable Financial Accounting Standard (FAS): Level 1: Fair value is based on inputs that are observable/quoted prices (unadjusted) in active markets for identical assets and liabilities that the reporting entity has the ability to access at measurement date. An active market is a market in which transactions for the asset occur with sufficient frequency and volume to provide pricing information on an ongoing basis. Level 2: Fair value is based on inputs that are observable, either directly or indirectly, but that are not quoted prices included within Level 1. Level 3: Fair value is based on inputs that are unobservable for the asset. Unobservable inputs shall be used to measure fair value to the extent that observable inputs are not available, thereby allowing for situations in which there is little, if any, market activity for the asset at the measurement date. Refer to Appendix A ASC 820 Suggested Fair Value Levels chart for the various types of investments offered through MassMutual s administrative platforms. This chart has been posted to the plan sponsor website and provides guidance about the valuation sources and methodology, measurement frequency and MassMutual's basis for the suggested levels. This information is being provided as a 16 service to plan sponsors and is based on MassMutual's interpretation of fair value accounting standards applicable to retirement plans. Such information and the methodologies utilized to generate the information does not constitute an endorsement by MassMutual that such methodologies are appropriate to be reported on the plan's annual financial statement. The plan sponsor and the plan auditor must determine whether the information MassMutual has provided is applicable given the particular contract and their interpretation of applicable regulations. 3-5 What Fair Value Information Does MassMutual Provide for the Fixed Income Fund, Stable Value Funds or Other CCTs? The Fair Value Information can be found in the individual Fund Company Annual Reports. 3-6 Are the Fixed Income Fund, Stable Value Funds or Other CCTs Reported at Contract Value on the Trust Report? The Fixed Income Fund and Stable Value Funds have always been reported on the Trust Report at contract value. All CCTs that hold fully benefit responsive investment contracts are reported at contract value.

3-7 What is the Impact of the Financial Accounting Standards Board (FASB) Staff Position (FSP) on Form 5500 Reporting for the Fixed Income Fund, Stable Value Funds or Other CCTs? There have been no changes to the Form 5500 instructions, and the rules described in the FASB ASU No. 2015-12 do not change the information to report on the Form 5500. The American Institute of Certified Public Accountants (AICPA) Audit and Accounting Guide, Audits of Employee Benefit Plans (AICPA Guide) requires all investments (including derivative contracts) held by an investment company to be reported at fair value. Contract value, however, is the relevant measurement attribute for that portion of the net assets of an investment company attributable to fully benefit-responsive investment contracts. MassMutual considers contract value to be the relevant measurement attribute because that is the amount participants in the fund would receive if they were to initiate permitted transactions, such as withdrawals, under the terms of the underlying definedcontribution plan. However, as a result of FASB Accounting Standards Update (ASU) No. 2015-12, fully benefit-responsive contracts can be measured and presented in financial reports at contract value, rather than fair value. The contract value is generally the amount that participants would receive in a transaction, and so it is the most relevant value for participant and plan information purposes. This is effective for fiscal years beginning after December 15, 2015. 3-8 How are the Fixed Income Fund, Stable Value Funds or Other CCTs Reported on Schedule D - DFE/Participating Plan Information (Schedule D)? The Fixed Income Fund, Stable Value Funds or other CCTs are reported at contract value on Schedule D. This value is identical to the value reported on Schedule H - Financial Information (Schedule H). Group Annuity Investment Product 3-9 What is a Group Annuity Investment Product? Group variable annuity contracts or funding agreements are an investment vehicle for retirement plans. The contract is similar to a diversified mutual fund investment portfolio offered in a retirement plan, but it may also include investment options not available from mutual fund companies. Specific regulations permit the inclusion of fixed investment choices and other options available from insurance carriers in the contract that would not be permitted in a mutual fund investment portfolio. 3-10 How is a Group Annuity Investment Product Identified? 17 All audit reports produced by MassMutual have system header information listed at the top of each page. An Investment

Company Unit (ICU) Identification Number is listed on the left side of the header information. Group Annuity plans will have an ICU ID of 123123123. The ICU for the Mutual Fund Products is either 345345345 or 888888888. MassMutual determines fair value of its investments using the market approach. The use of quoted prices for identical assets and matrix pricing or other similar techniques are examples of market approaches. Liquidation value is based on an actuarial formula as defined under the terms of the contract. There are no unobservable inputs within this formula, therefore our determination is that this investment option meets the definition of Level 2. 3-11 What is the Difference Between a Fixed Income Fund and the Fixed Investment in a Group Annuity Investment Product? As a result of FASB Accounting Standards Update (ASU) No. 2015-12, fully benefitresponsive contracts can be measured and presented in financial reports at contract value, rather than fair value. The contract value is generally the amount that participants would receive in a transaction, and so it is the most relevant value for participant and plan information purposes. An investment choice specific to the Group Annuity Investment Product is the option to invest in the general fund of the insurance carrier offering the product. This investment option offers a guaranteed minimum rate of return for the period of time specified in the contract. If the sponsor has elected to offer this investment option in the plan, it is listed on the reports as simply Fixed. This is effective for fiscal years beginning after December 15, 2015. The rules described in the FSP do not change the information to report on the Form 5500. If the audit reports list a Fixed Income Fund, then it is invested in either a CCT or mutual fund. The Fixed Income Fund is not invested in the insurance carrier s general fund. Master Trust 3-13 What is a Master Trust? 3-12 What Fair Value Information Does MassMutual Provide for the Fixed Investment in a Group Annuity Investment Product? For Form 5500 reporting purposes, a Master Trust is a trust for which a regulated financial institution must serve as trustee or custodian (regardless of whether such institution exercises discretionary authority or control with respect to the management of assets held in the trust), and which assets of more than one plan sponsored by a single employer or by a group of employers under common control are held. MassMutual provides a Fair Value Disclosure Report for investments in the Fixed Account investment option. The Fair Value Disclosure Report provides the estimated fair value and the declared interest rate as of the end of the plan year and a certification by MassMutual for the data presented. 18 A regulated financial institution is defined as a bank, trust company, or similar financial institution that is regulated, supervised and subject to periodic examination by a state or federal agency. Common control is determined on the basis of all relevant facts

and circumstances, regardless of whether or not such employer is incorporated. activity and positions directly to participants. These statements show both account transactions and the market value of positions. The brokerage balances also appear on participant statements generated by MassMutual, and on the Trust Report. Individual transactions pertaining to participants brokerage accounts are not reflected on these participant statements or the Trust Report. In addition, plans that have brokerage accounts are furnished a Self Directed Brokerage Summary Report that aggregates the balances and transactions of all participants for each plan year. This report provides a market value of all the brokerage accounts as of the end of the plan year, a summary of cash receipts and disbursements, a summary of the investment positions held at the end of the plan year, and transactions such as dividend payments, purchases, sales, and transfers. 3-14 What are the Filing Requirements for the Institution Sponsoring a Master Trust? A Form 5500 and certain schedules should be filed for a Master Trust account. The plan administrator for each retirement plan that participates in the Master Trust arrangement must also file a Form 5500 and related schedules. Please review the Form 5500 Instructions for additional r e p o r t i n g requirements, as the assets for both the Master Trust and the underlying plans may require differing, supplemental or other customized reporting. Balances and income generated from the brokerage account assets are reported on the Form 5500, Schedule H line 1c(15), Other. Income associated with the SDBA investment is reported on line 2c, Other income, and expenses, if any, are reported on line 2i(1), Professional fees. The brokerage assets do not include loans, partnership interests, joint venture interests, real property, employer securities, or investments that could result in a loss in excess of the account balance (such investments could include certain types of options contracts). Investing in these types of assets is generally not allowed through the Schwab arrangement. Any such investments need to be separately reported in the asset and income sections of the Schedule H. Self-Directed Brokerage Account (SDBA) 3-15 What is the SDBA Feature Offered for Certain MassMutual Institutional Retirement Plans Plan sponsors may provide a SDBA for their participants through a special arrangement with Schwab. Eligible investments include mutual funds, stocks listed on the NYSE, NASDAQ, and AMEX, and corporate and government bonds. Employer stock, options, futures, commodities, tax exempt securities, precious metals, limited partnerships, and foreign currencies or securities are not eligible investments. Short selling and margin accounts are also not allowed. Schwab mails statements of brokerage 19 Schwab is the custodian of the assets in the SDBA. The Trustee, as referenced in the Schwab Agreement, will serve as directed trustee in connection with the SDBA established with Schwab. Schwab will designate the trustee as the holder of legal title to the assets of the SDBA, thus the certification from the trustee covers the SDBA assets. Refer to the account opening paperwork with Schwab to confirm the trustee of the plan.

stock unitization method, requests for withdrawals or loans made before 4:00 pm Eastern Standard Time on any business day will receive the value of the unit based upon the same day s closing stock price, and the redemption can be processed to produce a check the next business day. Unitization is a highly customized procedure and more detailed information about the pricing and redemption process for a particular stock unit fund will be provided, upon request, by our service teams. Note: Schwab does not provide a SOC 1/SSAE 16 report for the SDBA services. In order for the SDBA to be covered under a SOC-1 document, the SDBA would need to be held by a bank, trust company or insurance carrier. Charles Schwab is acting in the capacity of a broker dealer, not a bank, trust company or insurance carrier, as it relates to setting up and executing trades within SDBA s for MassMutual s retirement plans. Broker Dealers must comply with FINRA, MSRB and Securities Exchange Act (SEC) of 1934 Rules and Federal Security Laws. Schwab complies with these requirements and their external auditor (Deloitte & Touche LLP) issues an annual Examination Compliance Report to fulfill the requirement of Rule 17a-5(d)(1) and (3) under the SEC and as part of the audit of the consolidated financial statements. The purpose of the internal control letter is to report whether the internal controls and practices and procedures maintained at Schwab can be expected to achieve the SEC's objectives as stated in Rule 17a-5(d). Upon request Schwab will provide the internal control letter which addresses these controls. Generally, a unitized stock fund consists of a high percentage of employer stock (often 95% or more) and a small percentage of liquid, short-term assets. The value of the unit goes up and down with the market value of the underlying stock. Because the unit price includes a liquid portion, it fluctuates slightly less than the stock price. For dividend paying stocks, the dividends are usually reinvested in the unit, increasing the unit value of the fund. To compare the price of the underlying shares of stock with the unit s value, it is necessary to know the precise percentage of stock included in one unit. The current value of the unit is equal to the stock value in the unit plus the value of the liquid portion. Conversely, multiplying the current value of the fund by the percentage of the fund invested in stock, and dividing that number by the closing stock price, obtains the number of shares represented by a single unit. A valuation example of unitized stock pricing on the participant level will illustrate this computation: Employer Stock Unitization 3-16 What is the Unitization of Stock and how are the Units Valued? Unitization is a method of combining stock with short term money market funds or other liquid assets in such a way that distributions (including participant loans) can be processed daily. If the employer stock were not unitized, redemption transactions could often take several days to settle, and each redemption request would generate a separate selling transaction. In most cases, by using the Example: ABC Company offers unitized ABC Company Stock to their participants as a retirement plan investment in the form of a unitized stock fund. In the ABC Company Stock Unitized Fund, 95% of the total fund is invested in ABC Company Stock and 5% is invested in a money market fund. 20 Participant A knows from her retirement account statement that she owns 50 units of the ABC Company Stock Unitized

Fund, currently priced at $20 per unit. Thus, her retirement account holds the fund at a current value of $1000. Assuming the price of the underlying employer stock was $25 per share, Participant A s equivalent units of ABC Company Stock are determined by the following formula: PART IV: Trustee and Certification of Plan Assets, Audit Types, Statement on Standards for Attestation Engagements 16 (SSAE 16) Reports and Bonding Requirements (95% of $1000) / $25 = 38 shares of ABC Company Stock The actual percentage of the fund invested in company stock and liquid funds may vary from day-to-day, depending upon the number of distributions processed, dividends received, and the target ratio of stock to liquid funds. 3-17 How Does MassMutual Report the Unitized Stock Fund as an Asset on Schedule H? Trustee and Certification of Plan Assets For purposes of reporting the unitized employer stock on the Schedule H the cash component invested in a Money Market fund is segregated and reported on line item 1(c)1, Interest bearing cash and the employer stock portion is reported on line 1(c)(4), Corporate stocks (A) Preferred or (B) Common. 4-1 What is the Role of a Trustee or Custodian Certification in a Limited Scope Audit? ERISA regulation section 2520.103-8, Limitation on Scope of Accountant s Examination, gives the plan s auditors reliance that they do not have to examine, report or otherwise conduct any auditing procedures on any financial statement or investment information prepared and certified by a bank or similar institution, or by an insurance carrier that is regulated, supervised, and subject to periodic examination by a state or federal agency that acts as a custodian or trustee. Such trustee or custodian certification must be provided in accordance with ERISA regulation section 2520.103-5(c), as described in further detail below. This action, known as a limited scope audit, is available only if a trustee or custodian certifies to both the accuracy and the completeness of the plan asset information required for the audit engagement. 21

A limited scope audit is not available where one or more individuals is named trustee and the custodian for plan asset investment does not issue a limited scope certification. Furthermore, not all corporate trustees issue certifications enabling auditors to conduct a limited scope audit. If all the assets are held at MassMutual, and/or with/through an institution for which an ERISA certification is provided, the plan administrator may instruct the auditor to perform a limited scope audit pursuant to ERISA regulation section 2520.103-8. With a limited scope audit there are no audit procedures performed on the investments and related activity that is prepared and certified by the ERISA Certification. 4-2 What Entities Associated With MassMutual may Issue a Trustee Certification in Accordance With ERISA Regulation Section 2520.103-5(c)? Reliance Trust Company (RTC) as Directed Trustee or custodian where MassMutual provides recordkeeping services to the plan. RTC serves as directed trustee for electing plans under the RTC Trust Agreement. If the plan administrator (the sponsoring employer in most cases) did not appoint RTC to act as directed trustee, RTC is strictly limited to holding title to plan assets; RTC does not act in any fiduciary capacity towards the plan or its participants. The employer or other person (not affiliated either with RTC or MassMutual) serving as plan administrator retains primary responsibility for all discretionary activities under the plan. Governance of activities that are necessary for the operation of the Trust is the responsibility of the employer or plan 22 administrator, and RTC acts only pursuant to the employer or plan administrator direction with respect to these activities. For example, the plan administrator directs RTC to pay benefits and to make loans to participants, and the employer is responsible for determining the amount and timing of plan contributions. The employer and MassMutual have entered into a services agreement (the Services Agreement ) pursuant to which MassMutual provides certain recordkeeping and administrative support services with respect to the plan. In most circumstances plan sponsors of plans with non-group Annuity assets have appointed RTC as the custodian in order to facilitate transactions for the plan directly, through MassMutual, or through others. In other circumstances, the plan sponsor may serve as trustee and/or custodian. RTC shall have custody of the assets in the account and shall have the duty of safely keeping such assets. As a Trust Company which is regulated and supervised and subject to periodic examination by a state agency, RTC is an eligible institution that may, upon request, prepare a Trustee s Certification of the statement of account issued to plans with over 100 participants (or to plans with fewer participants that do not qualify for the waiver of the independent qualified public accountant s opinion). The Trustee Certification will assist the independent qualified public accountant in issuing an opinion with respect to the financial statements and schedules included with the Form 5500. RTC, as designated directed trustee or custodian, will issue such certification of plan assets pursuant to ERISA regulation section 2520.103-5(c). The certification is limited to the period that the designated directed trustee was appointed under a properly executed Trust Agreement. For example, if, during a plan conversion year, RTC received a properly executed RTC Trust Agreement effective on July 1, 2016, the certification period would begin on July 1, 2016. If the plan

administrator terminated services with MassMutual and transferred plan assets to another service provider on November 1, 2016, the certification period would end on November 1, 2016. Accordingly, the Confirm Date Trust Report certified by RTC will cover the period during which RTC acted as directed trustee (July 1, 2016 November 1, 2016 in this example). plan auditor for Mutual Fund product plans. Under the terms of a Services Agreement between MassMutual and the Employer sponsoring the plan, MassMutual does not handle plan assets. MassMutual acts at the direction of the named individual trustee(s) to provide limited recordkeeping and administrative services for certain plan assets that the trustee(s) have contributed to the trust. The named individual trustee(s) are solely responsible for collecting plan assets from the sponsoring Employer and remitting plan assets to the trust in a timely manner. 4-3 MassMutual is Unable to Provide a Trustee Certification Pursuant to ERISA Regulation Section 2520.103-5(c) for use in a Limited Scope Audit for Mutual Fund Product Plans and Does not act as a Holder of Plan Assets Upon request, MassMutual may provide a Confirmation of Assets Statement that confirms contribution amounts received on behalf of the individual plan trustee(s), disbursements authorized by the trustee(s) and plan and/or participant account balances as of a specific date (usually the plan year end date). This statement is not made pursuant to ERISA regulation section 2520.103-5(c) and likely will not satisfy the requirements for a limited scope audit under ERISA regulation section 2520.103-8. MassMutual is unable to issue a certification of assets for use in the limited scope audit of an employee benefit plan because MassMutual, acting in its sole capacities as a record keeper and directed services provider under a contract for services with the Employer sponsoring the plan: does not serve as a trustee or custodian for the plans for which it provides recordkeeping and/or administrative services; and furthermore is NOT an eligible institution (i.e., a regulated financial institution as described in questions 4-1 and 4-2) as required by ERISA section 103(a)(3)(C) and ERISA regulation section 2520.103-8 to issue a certification of assets. 4-4 Why Will the Designated Directed Trustee Certify a Statement of Plan Assets as Recorded on the Summary Trust Report and not Certify Other Audit Reports? The Confirm Date Trust Report reflects all plan asset and investment activity at the close of the plan year. It is not necessary for the designated directed trustee to certify any other audit reports because the Trust Report includes all activity related to participant accounts and total plan asset and investment activity for the period. Accordingly, MassMutual can NOT provide a certification of investments or investment activity as part of any limited scope audit undertaken by a retirement 23

subject to periodic examination by a State or Federal agency, provided that the statements or information regarding assets so held are prepared and certified by the bank or insurance carrier in accordance with ERISA regulation section 2520.1035(c). 4-5 Can MassMutual Provide a Trustee Certification for Insurance Plans? Under ERISA regulation section 2520.1035(c) an insurance company that holds assets in their general fund and/or pooled separate accounts must certify the statements provided are complete and accurate. The Trustee Certification of Plan Assets section of the Auditors Guide contains additional information concerning the requirements for a trustee s certification of assets under ERISA regulation section 2520-103-5(c) including the circumstances under which certain entities providing services to MassMutual retirement plan clients will certify plan assets. If all the assets are held at MassMutual, and/or with/through an institution for which an ERISA certification is provided, the plan administrator may instruct the auditor to perform a limited scope audit pursuant to ERISA regulation section 2520.103-8. With a limited scope audit there are no audit procedures performed on the investments and related activity that is prepared and certified by the ERISA Certification. 4-7 What is a Full Scope Audit? In a full scope audit, the auditor performs auditing procedures with respect to investments which generally may include the following actions: confirms certain information directly with the holder of the plan assets (more than one entity may hold assets); tests year-end market values; tests interest, dividends, purchases and sales, and investment gains and losses. Audit Types 4-6 What is a Limited Scope Audit and When Does it Apply? As indicated in question 4-5, if all the assets are held at MassMutual, and/or with/through an institution for which an ERISA Certification is provided, the plan administrator may instruct the auditor to perform a limited scope audit pursuant to ERISA regulation section 2520.103-8. With a limited scope audit there are no audit procedures performed on the investments and related activity that is prepared and certified to by the ERISA Certification. Under ERISA section 101(b)(1), it is the obligation of the administrator of an employee benefit plan to file an annual report with the Department of Labor. ERISA section 103(a)(3)(A) also requires that the opinion of an independent qualified public accountant is included as part of the plan s annual report. ERISA regulation section 2520.103-8 (Limitation on Scope of Accountant s Examination) interprets and implements ERISA section 103(a)(3)(C). It states the examination and report of an independent qualified public accountant (the plan s auditor) need not address any statements or information regarding plan assets held by a bank, similar institution or insurance carrier, that is regulated, supervised and 24

not certify a statement of plan assets that are not record kept by MassMutual. Examples of such plan assets may include certain annuity products, managed accounts and/or insurance policies, among other assets. An RTC certification may allow the plan auditor to conduct a limited scope audit only with respect to the certified plan assets. 4-8 Will the Presence of a Statement on Standards for Attestation Engagements 16 (SSAE 16) Report Influence the Plan s Decision to Pursue a Limited-Scope Audit? If another regulated financial institution has not agreed to act as either a trustee or custodian of plan assets, the plan administrator will need to identify another entity willing to certify a statement of plan assets. If the plan administrator is unable to identify a non-massmutual affiliated party to certify the plan assets the limited-scope audit exemption will likely not apply and the plan auditor may need to conduct a full scope audit. If RTC does not act as directed trustee or custodian of the plan assets, but the plan s trustee (acting as either an active or directed trustee) is another regulated financial institution, the limited scope will still apply if the trustee is willing to provide the certification required under ERISA regulation section 2520.1035(c). The limited scope audit and the SSAE 16 Report are not related. In a limited scope audit, a bank or similar financial institution, that is regulated and subject to periodic examination by a state or federal agency, provides a certification of the plan s investments and related transactions. Therefore, the plan auditors need not perform certain tests pertaining to the certified information. The presence of a SSAE 16 Report does not limit the scope of the audit. It is a report the plan auditors can use to increase their understanding of the service provider s internal control environment, thereby reducing or eliminating the need for auditors to test the service provider s operations directly. The Securities and Exchange Commission (SEC) requires a full-scope audit if the plan includes employer securities. The plan sponsor may have to file SEC Form 11-K by the due date of June 30, 2017, if the plan is a holder of employer securities. See the Form 11-K instructions for more information on these requirements at http://www.sec.gov/about/forms/form11k.pdf 4-9 Does the Limited Scope Audit Exemptions Apply if Reliance Trust Company (RTC) has Agreed to act as Directed Trustee or Custodian but the Plan Contains Certain Assets That are not Record Kept by MassMutual? If RTC has agreed to act as directed trustee or custodian, it will certify a statement of plan assets (a Summary Trust Report) that are record kept by MassMutual. RTC will 25

4-10 Will the Limited Scope Audit Exemption Still Apply Where Reliance Trust Company (RTC) has not Agreed to Act as Directed Trustee for any Portion of the Plan s Assets? One of the most effective ways a service organization can communicate information about its controls is through a Service Auditor's Report. There are two types of Service Auditor's Reports: Type I and Type II. A Type I report describes the service organization's description of controls at a specific point in time. A Type II report not only includes the service organization's description of controls, but also includes detailed testing of the service organization's controls over a minimum six month period. If RTC has not agreed to act as a directed trustee or custodian (or if RTC has agreed to act as directed trustee for only a portion of the plan assets), another regulated financial institution (as discussed in questions 4-1 and 4-2) acting as trustee or custodian must certify the plan assets in accordance with ERISA regulation section 2520.103-5(c) in order for the plan auditor to conduct a limited scope audit. 4-12 Does MassMutual Have an SSAE 16 Service Organization Control 1 (SOC 1) Report? Yes, MassMutual has a SSAE 16 SOC 1 Type II Report. This report, also referred to as the SOC 1 Report, is an independent report on controls placed in operation and tests of operating effectiveness for the period of October 1st through September 30th issued by KPMG LLP. This report is available on the plan sponsor website. Statement on Standards for Attestation Engagements 16 (SSAE 16) Reports The SOC 1 Type II report is the most comprehensive available SSAE 16 Report and includes a written management assertion attesting to fair presentation, design and operating effectiveness of our controls. 4-11 What is the SSAE 16 and What Beneficial Information is Contained in a SSAE 16 Report? An SSAE 16 Report provides guidance to enable an independent auditor to issue an opinion on a service organization's description of controls through a Service Auditor's Report. An SSAE 16 Report is not a predetermined set of control objectives or control activities that service organizations must achieve. For more general information on SSAE 16 Report, see http://www.ssae16.com The SOC 1Type II SSAE 16 Report provides plan auditors with valuable information regarding MassMutual s controls and the effectiveness of those controls. This document will expedite the planning and execution of the plan s audit and may reduce associated costs. The 2016 SOC 1 report titled 2016SSAE16-TRAC describes MassMutual business process related control objectives for the TRAC Recordkeeping platform throughout the period of October 1, 2015 to September 30, 2016. A 12/31/16 Bridge Letter is also available. 26

The 2016 SOC 1 report titled 2016SSAE16-OMNI describes MassMutual business process related control objectives for the OMNI recordkeeping platform throughout the period of October 1, 2015 to September 30,2016. A 12/31/16 Bridge Letter is also available. Bonding Requirements for Defined Contribution Plans There are 2 additional SOC 1 reports and bridge letters that pertain to both the TRAC and OMNI platforms which are referenced in the business processing controls report noted above: 4-13 Is the Organization s Qualified Retirement Plan Required to be Covered by a Fidelity Bond? The General Information Technology Controls (GITC) SOC 1 titled 2016 MassMutual Retirement Services GITC SOC 1 communicates GITC controls applicable to services provided by MassMutual to its DB and DC clients that have plans supported on the Proprietary Recordkeeping System (PRS), Case Accounting System (CAS), and Participant Accounting System (PAS) and DC-only clients supported on the OMNIPlus and TRAC recordkeeping systems. The report describes certain information technology general controls and includes control objectives and controls related to Application Change Management System, Software Change Management, Physical Security and Environment Controls, Network Security and Monitoring, Logical Security, Job Processing and Data Transmissions. ERISA regulation section 2580.412 generally requires that every plan official of an employee benefit plan who handles funds or other property, must have a fidelity bond to cover each person within the company. Bonding is not intended to provide errors and omissions protection, rather, a bond addresses egregious acts of malfeasance such as embezzlement by fiduciaries and others handling plan funds. Handling of funds includes the power to exercise physical contact or control, the power to disburse and the power to make decisions regarding the plan funds. The amount of the bond must be equal to at least 10% of the amount of funds handled. The bond may not be in an amount less than $1,000 but need not be more than $500,000. The maximum bond amount is $1,000,000 for plans holding employer securities. The amount of the bond may differ among fiduciaries or classes of fiduciaries in accordance with the amount of funds handled. The amount of funds handled is generally determined with respect to funds contained in the plan during the preceding plan year. In addition, the bond should not have a deductible amount. The 2016 Investment Data and Trading (IDT) SOC 1 communicates controls applicable to the IDT platform used to record and reconcile investment trading activity and pricing data for certain products applicable to Defined Contribution Recordkeeping Operations. The SOC 1 Type II SSAE 16 Report does not extend to the controls of our service partners. Several of these service partners prepare specific SSAE 16 SOC 1 Reports to address their own internal controls. These service partners have made their SSAE 16 SOC 1 Reports and/or other similar reports available to MassMutual for distribution to auditors upon request. A company should contact their insurance agent or broker to obtain the required coverage, since MassMutual cannot provide this bond and no bond held by MassMutual 27

will provide the necessary ERISA bonding coverage for the company or its employees. Note: there is an exemption from the bond requirement for trustees that satisfy requirements under ERISA section 412. Furthermore, the Secretary of Labor may also provide special exemptions where other bonding arrangements exist or it can be demonstrated that the plan s overall financial condition adequately protects participants and beneficiaries 4-14 What Type of Bonds are Permissible to Meet the Bonding Requirements? Bonds must be of a form or type approved by the DOL. They may be individual, schedule, or blanket bonds. A more precise classification of such bonds includes: Individual Bond: A single bond covering a list of named persons, each bonded separately for a designated amount. Position Schedule Bond: A single bond providing coverage for any holder of one or more specified positions during its term, with each position bonded separately for a designated amount. 4-15 Is Fiduciary Liability Insurance Necessary? Under ERISA section 410(a), a plan is prohibited from containing any exculpatory provision that purports to relieve a fiduciary from any liability for breach of their fiduciary duties. ERISA section 410(b) contains three notable exceptions to the general rule found in ERISA section 410(a). ERISA section 410(b)(1) provides for a plan to purchase insurance for its fiduciaries or for itself to cover liability or losses occurring by reason of the act or omission of a fiduciary, so long as such insurance permits recourse by the insurer against the fiduciary in the case of a breach of a fiduciary obligation by such fiduciary. ERISA section 410(b)(2) permits a fiduciary to purchase insurance to cover liability from and for his or her own account. Finally, under ERISA section 410(b)(3), an employer or employee organization may purchase insurance to cover potential liability of one or more persons who serve in a fiduciary capacity with regard to an employee benefit plan. The purchase of these types of coverage is entirely voluntary. Blanket Bond: A single bond covering all of the insured s officers and employees, with all new officers and employees covered automatically. No list of employees is required. A bond must be obtained from an acceptable surety, defined as any corporate surety company holding a grant of authority from the Secretary of Treasury as an acceptable surety of federal bonds. A list of such sureties is published annually in the Federal Register, as are changes as they occur. The list is found in Department Circular #570 that can be found at: https://www.fiscal.treasury.gov/fsreports/ref/ suretybnd/c570.htm 28

repayments can reasonably be segregated from the employer s general assets. PART V: Late Contributions and the DOL s Voluntary Fiduciary Correction Program (VFCP) Failure to forward participant loan repayments in a timely fashion is also considered sufficiently similar to a late contribution that it is treated the same under the VFCP, according to DOL Advisory Opinion 2002-2A. In addition, the Prohibited Transaction Class Exemption (PTE 2002-51) explicitly refers to late loan payments and treats them as exempted under similar circumstances as late contributions. This exemption applies to the ability to have the excise tax waived in the event that a VFCP filing is successful. 5-1 Under the DOL Plan Asset Rule, What Constitutes a Late Deposit of Participant Contributions and/or Loan Repayments? 5-2 Are Contributions Deemed Late Considered Prohibited Transactions? The DOL regulations generally require that participant contributions be deposited as of the first date on which the employer reasonably could have segregated the contributions from its general assets. The date can never be later than the 15th business day of the month following the month in which the employer receives or withholds the participant contributions, but it will be earlier if the employer could reasonably have segregated the amounts earlier. According to the DOL s website, Thus, when contributions reasonably can be segregated from the employer s general assets in a shorter time period, delay in forwarding the contributions, even a delay that does not exceed the maximum time period under the regulation, may cause a breach of fiduciary duty under Title I of ERISA that may be corrected under the VFCP. As such, there is currently no implied safe harbor in the plan asset rule. Yes, when an employer delays the deposit of participant contributions, the DOL considers the employer to have used plan assets for its own benefit as if the employer had taken a loan from the plan in the amount of the late contributions. This deemed loan is a prohibited transaction subject to excise tax. Late contributions can be corrected using the DOL s VFCP, which is explained in a little more detail below. The employer must deposit the contributions into the plan with interest calculated from the date the contributions should have been deposited, and make a formal filing with the DOL in order to participate in the VFCP. There is a 7th business day safe harbor for plans with fewer than 100 participants at the beginning of the plan year. Any amount deposited not later than the 7th business day following the day on which such amount would have otherwise been payable to the participant in cash shall be deemed to be contributed (or repaid to the plan in the case of loan repayments) on the earliest date such participant contributions or participant loan Under ERISA section 409(a), any fiduciary who engages in a prohibited transaction has committed a breach of fiduciary duty. As such, the fiduciary is personally liable for any losses to the plan and must restore to the plan any profit made by the fiduciary through use of the plan s assets. Under ERISA section 502(l), a 20 percent civil penalty may be assessed at the discretion of the DOL for certain breaches of fiduciary 29

duty. This discretionary penalty is reduced by any penalty tax imposed under Internal Revenue Code Section 4975. 5-3 Where can I Find Additional Information Concerning Late Contributions? General information on late contributions and/or late loan repayments is available on the Employee Benefits Security Administration (EBSA) agency s website at www.dol.gov/ebsa and www.dol.gov/ebsa/faqs/faq_vfcp.html. EBSA is an agency within the DOL generally responsible for plan administration issues. The website includes a link to the Federal Register Notice (Notice) outlining the VFCP and on-line calculator that the plan sponsor, Third Party Administrator or auditor can use to determine earnings calculations on late contributions when filing an application with the DOL under the VFCP. The site also contains tables of IRS underpayment rates that generally are used to determine earnings adjustments in accordance with the VFCP late contribution calculation methods. Please consult with your tax and/or legal advisor for assistance with determining whether or not to file a VFCP application. 5-4 What is the Employee Benefits Security Administration (EBSA) VFCP? Administered by the EBSA, an agency within the DOL, the VFCP is designed to assist plan administrators and other fiduciaries to make good to a plan for any losses caused by a breach of their responsibilities, obligation or duties, which may include late contributions. Importantly, the VFCP requires a formal submission. The Secretary of Labor has the authority to enforce the provisions of Title I of ERISA 30 through civil actions, including the assessment of civil penalties equal to 20 percent of the amount recovered under any settlement agreement with the Secretary or ordered by a court in an action initiated by the Secretary with respect to any breach of fiduciary responsibility, as explained in the Supplementary Information section of the Notice. The VFCP was created to encourage the full correction of certain breaches of fiduciary responsibility and the restoration to participants and beneficiaries of losses resulting from those breaches by relieving plan sponsors of the possibility of civil investigation, civil action and civil penalties if they voluntarily correct the breach in accordance with the procedures established under the VFCP. Fiduciaries must adhere to two crucial tenets of the program in order to receive the desired relief. First, the fiduciary must meet the qualifying criteria for the VFCP. Second, the fiduciary must precisely follow the program s procedures to avoid rejection of the application. If EBSA rejects an application, it may pursue the matter and assess applicable penalties. Eligible applicants that satisfy the conditions of the program receive a no action letter from EBSA and as a result are not liable for civil and monetary penalties. In the event that the late contributions are otherwise corrected in accordance with the computations described in the Notice through an earnings adjustment for the affected participants, there is potentially some relief even without a formal submission under the VFCP. As described in the Notice,...if a potentially liable party were to have corrected a transaction as specified in the Program and the transaction with the correction were later to be discovered on audit, any penalty assessed on an applicable recovery amount...would be limited to any additional amount that might be required...to be paid following an audit. Employers who are not considering a formal VFCP filing should discuss this approach with their tax and legal advisors. In most cases, there will be tax penalties

owed and IRS Form(s) 5330 will need to be filed with payment of an excise tax. 5-5 How is the Correction Amount Calculated Under the VFCP for Late Contributions Made to Participant-Directed Plans? The VFCP requires that fiduciaries base their calculation of the Correction Amount to be restored to the plan upon either 1) the losses to the plan resulting from a breach (called the Lost Earnings ), or 2) the profits gained from the improper use of plan assets (known as the Restoration of Profits ). The Notice describing the VFCP explains what is meant by the profit on the use of the plan assets appropriated by the Employer. Generally, the correction amount will be a combination of the Principle Amount involved in the transaction (which must always be returned to the plan), the Lost Earnings amount (the earnings that would have accrued on the Principle Amount for the period of the transaction) and any interest on Lost Earnings. In some cases, the Principal Amount will have been used for a specific purpose such that a profit on the use of the Principle Amount is determinable, the on-line calculator will also calculate interest on this profit. This is referred to as Restoration of Profits. A Restoration of Profits calculation will likely not be necessary in the vast majority of cases, since the Principal Amount is commonly commingled with the other general funds of a plan sponsor or a fiduciary and a profit from the use of the Principal Amount cannot be definitively determined. As a result, it will be likely that a majority of applicants will be using the Lost Earnings calculations discussed above. Only the plan sponsor, with the help of their financial and tax departments or legal and tax advisors, can determine the applicable earnings rate resulting from the inappropriate use of plan assets. 31 For delinquent participant contributions and loan repayments, there is a fairly simple procedure that can be followed for correction through the VFCP. That procedure involves the calculation of an earnings adjustment for the affected participants, communications to participants, and a formal filing with the DOL. Much more detailed information can be accessed directly from the DOL s website at the website address indicated above. The Employee Benefit Security Administration (EBSA) provides an on-line calculator on its website as a compliance assistance tool to facilitate accuracy, ensure consistency, and expedite review of VFCP applications. The correction amount is determined automatically by entering Principle Amount, Loss Date, Recovery Date and Final Payment Date into the calculator. The on-line calculator compares Lost Earnings to Restoration of Profits and provides the applicant with the greater amount, which must be paid to correct the plan. The calculator utilizes Internal Revenue Code (IRC) Section 6621(a)(2) and (c)(1) underpayment rates in effect during the time period and the corresponding factors from IRS Revenue Procedure 95-17 (IRS Factors), which reflect daily compounding. Under the VFCP special rules for transactions involving large losses or large restorations, the on-line calculator automatically re-computes the amount of Lost Earnings and Restoration of Profits using the applicable IRC Section 6621(c)(1) rates. Under the VFCP, use of the on-line calculator by applicants is recommended, but is not mandatory. The calculator is located at: https://www.dol.gov/agencies/ebsa/employ ers-and-advisers/plan-administration-andcompliance/correction-programs/vfcp. Alternatively, applicants may perform manual calculations in accordance with Section 5(b) of the VFCP, using the table of published Internal Revenue Code

underpayment rates and the applicable IRS Factors. The use of the on-line calculator to determine the lost earnings that are allocated to participant accounts is only available when the sponsor files a formal VFCP application. Also refer to the IRS s Employee Plans Compliance Resolution System to determine any appropriate correction and/or earnings methods. 5-6 What if the Participant Contributions to the Plan Were Delinquent, but the Dollar Amount Needed to Correct is Very Small? Do I Have to Participate in the VFCP? Participation under the VFCP is voluntary. Of course, you must take the appropriate action to correct the violation even if you don t submit an application. However, if you don t file an application, you may not be able to obtain the relief available under the VFCP. In addition, if the DOL discovers the violation during an investigation, and the correction was not complete, it is possible that a civil penalty may be assessed on any additional amount required to fully correct the violation. Remember, too, that you aren t eligible for the IRS excise tax relief unless you receive a no action letter from EBSA indicating that your application has been approved. If you do not correct under the VFCP, earnings must be calculated using the table of published Internal Revenue Code underpayment rates and the applicable IRS Factors. 32 5-7 Is a Form 5330 (Return of Excise Taxes Related to Employee Benefit Plans) Filing Required to Report Late Contributions? Yes, Form 5330 filed with the IRS is, generally, required. Filing under DOL s VFCP, a sponsor is not always required to file a Form 5330 with the IRS under certain conditions. See the plan sponsor website for our white papers and guides, as this is one of the topics MassMutual addresses. Please note, while 403(b) plans must report delinquent contributions on the Form 5500, 403(b) plans are not required to file an IRS Form 5330 for delinquent contributions. 5-8 What is the Filing due Date for Reporting Late Contributions on the Form 5330 (Return of Excise Taxes Related to Employee Benefit Plans?) What are the Penalties for Late Filing? For taxes due under IRC Section 4975, Form 5330 must be filed no later than the last day of the seventh month after the end of the employer s tax year. Interest is charged on taxes not paid by the due date. If the filing is not made by the due date, the IRS may assess a penalty equal to 5% of the unpaid tax for each month or part of a month that the return is late. A separate penalty may also be assessed for late payment of the tax, (see the Instructions for Form 5330 for more information about the due dates and penalties.) The IRS will contact you regarding additional interest or

penalties once it has received the Form 5330. Prohibited Transaction Exemption 2002-51, delinquent contributions do not need to be reported as part of the schedule of nonexempt (party-in-interest) transactions. At a minimum this requires a successful formal filing be made under the VFCP and that a no action letter be issued by the EBSA. In addition, several conditions and notice requirements described in the VFCP and in the Prohibited Transaction Exemption 2002 51 must be met. Auditors must familiarize themselves with these conditions and notice requirements to be able to make a determination as to the correct method of reporting delinquent contributions on the Form 5500. Furthermore, the Form 5330 must be filed for each and every tax year in which the prohibited transaction remains uncorrected. Generally, late contributions will not be considered corrected until the earnings adjustment is made to the accounts of the affected participants. Late contributions are not considered entirely corrected when the late contributions are deposited to the plan, but rather on the date on which the affected participants accounts have been credited with both the contributions and the earnings adjustment related to those contributions. 5-9 What are the Form 5500 Reporting Requirements for Late Contributions? PART VI: MassMutual Plan Accounting and Systems Processing and Information for Plans Converting to MassMutual Late contributions must be reported on the Schedule H (for a large plan), Schedule I (for a small pension plan) or Form 5500-SF (for a small pension plan.) According to the Form 5500 Instructions, delinquent participant contributions reported on line 4a should be treated as part of the separate schedules referenced in ERISA section 103(a)(3)(A) and 29 CFR 2520.103-1(b) and 2520.1032(b) for purposes of preparing the IQPA s opinion described on line 3 even though they are no longer required to be listed on Part III of the Schedule G. Plan auditors are encouraged to read this section of the instructions and report delinquent contributions in accordance with its references. Filers of the Form 5500-SF do not need to include the attachment required by Schedules H/I. Delinquent participant contributions should be reported for the year in which the contributions that were withheld from pay were delinquent and should be carried over and reported again for each subsequent year until the year after the violation has been fully corrected. Note that if delinquent contributions have been corrected in a way that satisfies the VFCP, as well as the conditions of the Plan Accounting and Systems Processing 6-1 Does MassMutual Value Plan Assets on a Daily Basis? MassMutual uses a daily valuation system for valuing plan investments. DST TRAC is designed so that each participant has her/his own individual account and contributions and investment earnings are allocated to participant accounts upon receipt. The value of plan assets is generally calculated daily using the Net Asset Value ( N A V ) for each investment option. Valuation may be less than daily for some non fund assets, such as certain life insurance contracts, guaranteed investment contracts (GICs), or other 33

assets held by the plan through special arrangements with outside recordkeepers or other third parties. In addition, assets held in SDBAs through Schwab are generally reported one day late on the DST TRAC system due to a one day delay in electronic transmission of market value updates. 6-3 Is the Trust Report Calculated on a Cash or Accrual Basis? The DOL and the IRS allow Form 5500 to be prepared on a cash, modified accrual or accrual basis of accounting as long as one method is used consistently. The accrual basis may be used for federal income tax purposes while the cash basis may be used for Form 5500 reporting. If the plan converted to MassMutual, MassMutual will typically not have access to participant account values, dividends or investment earnings (losses). Therefore, we will fund these newly converted accounts based upon an individual account valuation provided to us by the plan, prior recordkeeper or investment manager at the time of conversion. Due to the daily valuation environment of our recordkeeping system, MassMutual prepares the Trade Date Trust Report on a confirmation or true Cash Basis for 5500 reporting requirements. Accordingly, a difference between the financial statements and the Form 5500 may result and an accrual may be needed if participant and/or employer contributions are received by MassMutual after the plan s year end. All transactions received in good order prior to 4 p.m. Eastern Time are processed on the day of receipt. As such, there will not be receivable distributions in a daily valuation environment. 6-2 Is Historical Cost Utilized in Reporting and Should it be Used on the Form 5500? The Form 5500 is not required to be adjusted according to the specific instructions on the Schedule H. It may remain on a cash basis. However, an explanation of such differences should be noted in the notes to the auditor s financial statements. (See AICPA Guide.) Historical cost is tracked solely for mutual funds purchased while the plan is retained by MassMutual. Accurate cost information for mutual funds or other investments purchased before the plan s conversion to MassMutual will not be available on the Trust Report or other reports in the standard auditor package. Cost information for employer securities must be furnished by the employer if purchased prior to conversion. Changing the Cost Basis of Accounting Plan sponsors who use the accrual or modified accrual basis may change their accounting basis to the cash basis. To do so, a reconciliation should be performed starting with the prior year s ending balance as the beginning balance for this year, and finishing with our ending balance on the MassMutual Form 5500-related financial reports. Contributions, earnings, distributions, and expenses paid may need to be adjusted to avoid double reporting. If a change in accounting basis occurs, the auditor s report should mention this change. Historical cost information is not required for the Schedule H or the accompanying Schedule of Assets (Held At End of Year) or Schedule of Assets (Acquired and Disposed of Within Year) when reporting the investments of a participant or beneficiary directed individual-account plan. Use of Accrual Basis of Accounting If the plan sponsor uses the accrual basis of accounting, the Schedules H/I financial statements will need to be adjusted every 34

year. The participant count on line 6 will need to be adjusted to reflect the number of participants who terminated, retired or died during the plan year, but for whom a completed notice of termination of employment form, retirement or disability form, or death form was not sent to MassMutual until the following year. In addition, the plan administrator will need to update the SAR (which is distributed to participants) to reflect any Form 5500 changes to the accrual basis of accounting. proceeds are compared to the value of the assets as of the beginning of the plan year or, for assets purchased during the plan year, the value of the assets at the time they were purchased for the plan during the plan year. The difference in these values for the assets sold is reported as the Net gain (loss) on sale of assets. The increase or decrease in value of assets during the plan year that are still held in the plan at the end of the plan year is reported as unrealized appreciation or depreciation. 6-4 Do the Reports From the MassMutual Recordkeeping System Segregate Realized and Unrealized Gains/Losses and how are Earnings Reported on the Form 5500? 6-5 Why is the Trust Report Separated by Location? The recordkeeping system differentiates unrelated employers, multiemployer or multiple employers covered under the same plan by assigning a location code to each employer in the plan. In other cases, each unrelated employer might actually be set up under its own plan identification number. Related employers participating in the same plan may choose to differentiate themselves by using these codes to accommodate how a sponsoring employer(s) account for them on their payroll systems. The information for each location is stated separately, and is also aggregated, for purposes of the financial information available in the Trust Report. Realized gains and losses are not required to be reported for mutual fund (registered investment company) assets. The net investment gain (or loss) is equal to the difference between the plan year ending (market value) less the beginning value, plus amounts transferred out and less amounts transferred in during the plan year. 6-6 Why Don t Participants Mutual Fund Earnings Reconcile to the Annual Return Rate of the Mutual Fund as Published in Their Annual Report? The net gain or loss on registered investment companies, whether realized or unrealized, are reported on a single line on the Schedule H s Income and Expense statement. The gain or loss reported includes the net of all earnings, expenses, gains, losses, and unrealized appreciation or depreciation that occurred during the plan year. Net earnings or losses are similarly reported on Schedule H for common collective trusts, pooled separate accounts, Master Trust Investment Accounts, and 103-12 investment entities. For other assets such as employer stock or real estate, the Schedule H requires current value reporting. When these assets are sold during the plan year, the sale The total returns published for mutual funds are historical and include changes in the share price and the reinvestment of dividends and capital gains. A participant s annual return for a mutual fund is affected by the timing of contributions, exchanges, distributions and loans, all of which occur 35

throughout the year. As the participant s balance in the mutual fund changes continually during the year, there is not a consistent basis of comparison to the annual returns posted by the mutual fund. 6-9 What are the Trustee Transfer In and Trustee Transfer Out Lines Found on the Trust Report? A projected return could be calculated by performing a detailed analysis of all activity that occurred throughout the year and applying the annualized return on a rolling balance forward basis. Because the performance of all mutual funds varies throughout the year, this analysis would still only give an approximation of the annual return posted. The transfer in and out lines on the trust report are used to report certain intra-plan activities, such as the division of a participant s account. Often, participant accounts are segregated to establish an alternate payee account as a result of a Qualified Domestic Relation Order (QDRO) or for transfer of assets to a beneficiary account established within the plan. Such transfers should always net to zero. This field may also be used to fix an incorrect social security number (SSN) on the system. The incorrect SSN would reflect a Trans Out and the correct SSN would reflect a conversion transaction. These types of transfers will always result in a net zero effect. 6-7 Is the Plan s Forfeiture Account Activity Included in the MassMutual Reports? Since the forfeiture account is included as part of the plan assets, it is included in all plan level reports provided by MassMutual. The forfeiture account is generally invested in a mutual fund or fixed fund as directed by the plan sponsor. The forfeiture account itself is recordkept separately from the remainder of the trust. The transfer transaction can also be used to process inter-plan transfers of participant account balances between separate plans maintained by the same employer or to indicate the transfer of participant account balances of a related employer that is part of the same Master Trust. Similarly, deposits and redemptions from a plan reimbursement account are also recorded as transfers in and out as they are neither contributions nor taxable distributions. Additionally, when a plan engages a new recordkeeper, the movement of the plan assets to the new trustee and recordkeeper is processed as a transfer out. Transfers of this nature described in this paragraph will not net to zero. 6-8 What Type of Expenses are Reported on the Trust Report? The only expenses reported on the Trust Report are those paid from plan assets, directly from participant accounts. Any expenses paid directly by the employer are not reported. Some examples of expenses reported are: loan set-up or administration fees, auditor fees and recordkeeping fees. Fees paid from the forfeiture account are not included in the expense total. MassMutual provides a Transfer Analysis Report detailing all transfers processed during the year to assist with the analysis and reconciliation of plan transfers. If needed, please request the report from the plan s MassMutual Representative. 36

confirmed the accuracy of the report, MassMutual processes the conversion assets, known as the Final Valuation, into the participants accounts. A final valuation report is provided for the client s records when the final valuation is completed. The trust report notes the deposit of the conversion assets into the participant accounts on the line titled conversion. In the summary plan detail at the end of the confirm date Trust Report, the accrual at the individual investment vehicle-level is also detailed on the conversion line. The conversion line will include only the amounts converted, it will not include earnings. Any earnings accrued during the conversion process are posted as such and accrue in the gain/loss or dividend lines as appropriate. 6-10 Why has MassMutual not Performed Year-End Compliance Testing? MassMutual defers annual compliance testing for plans that do not meet the submission deadlines for their census and/or compensation data and the completed Compliance and Form 5500 Workbook. These deadlines are necessary to ensure MassMutual can process corrective distributions by the IRS- imposed excise tax penalty deadline of 2½ months following the end of the plan year, if refunds are required. Upon receipt of all required data (in good order) subsequent to 2½ months following the end of the plan year, MassMutual will perform compliance testing as time permits. If plans have not completed compliance testing by 2½ months following the end of the plan year, the latest date for processing refunds to correct a failed test is the end of the subsequent plan year. During the conversion process, MassMutual requests current loan information from the prior recordkeeper and/or the client. The outstanding participant loans are then established on the system using the current amortization schedule as provided by the prior record keeper and/or the client. Payments, duration of loan, and interest rate will remain the same. Information for Plans Converting to MassMutual 6-12 How are Investments Handled During the Conversion Process? 6-11 How Does MassMutual Ensure Accurate Conversion of all Historical Data and What Conversion Audit Reporting is Provided? Prior to the investment of the conversion assets to participants accounts, the New Business Client Service Team runs a Test Valuation Report of the impending final conversion. The Test Valuation Report provides a detailed breakdown of the proposed conversion into each participant s account. After the client has reviewed and 37 Once participant accounts have been established, ongoing contributions can be received without interruption during the conversion or merger process. At the same time, the mapping process will begin on the assets converted to MassMutual. Assets will be mapped to a similar asset class, known as a like funds conversion, in accordance with the plan sponsor s directions. In this instance, the balances in the prior funds would be sold on the conversion date, and the proceeds sent to the new funds for investment. The breakdown of the balances in the new funds is tied to the prior trust totals. When the individual participant account balances are available from the prior

recordkeeper, the new asset purchases are reflected in each participant s account and reconciled to the totals. 3. A copy of the employer s federal income tax extension is kept with the plan s copy of the Form 5500. PART VII: Filing Information for Form 5500, Related Schedules and Loan Reporting 7-1 When is the Form 5500 Filing Deadline? The Form 5500 must be e-filed with the DOL by the last day of the seventh month following the last day of the plan year. For example, a calendar year plan with a December 31 st plan year end date would need to file the Form 5500 by July 31 st. A one-time extension of time to file a Form 5500 is available if a Form 5558, Application for Extension of Time to File Certain Employee Plan Returns (Form 5558) is filed with the IRS before the normal due date. This will extend the filing due date 2½ months from the primary due date. For example, the filing deadline for a calendar year plan with a December 31 st plan year end date would be extended from July 31 st to October 15 th. An automatic extension of time to file the Form 5500 until the employer s federal income tax return date is available if the following conditions are met: 1. The plan year and the employer s tax year are the same; 2. The employer has been granted an extension to file its federal tax return to a date later than the normal due date for filing the Form 5500; and, 38 An extension of time granted by using this automatic extension procedure cannot be further extended by filing an IRS Form 5558 nor can it be extended beyond a total of 9½ months after the close of the plan year. For example, the filing due date for a corporate tax return is the 15 th day of the third month following the close of the corporate year (for calendar year corporations, March 15 th.) Filing an extension will give the corporation an additional six months (for calendar year corporations, September 15 th.) If relying on the corporate extension, a plan will have an automatic extension to September 15 th to file their Form 5500. Please contact your tax advisor to determine if this automatic extension is available. Note for ERISA 403(b) Plans: Form 990 is the tax return for non-profit organizations. The Form 990 filing deadline is the 15 th day of the 5 th month following the end of the organization s accounting period. For example, if the accounting period is the calendar year, the deadline is May 15 th. Filing Form 8868 (Application for Extension of Time to File an Exempt Organization Return) will give the organization an automatic extension of three months. In addition, the organization can file Form 8868 to apply for an additional 3-month extension if the original 3-month extension is not enough time. However, for Form 5500 filing purposes, if a plan is using the extension of time to file their federal income tax return as the deadline for filing their Form 5500, the Form 5500 instructions have very explicit requirements that must be met. The deadline for filing the Form 5500 cannot be extended beyond the 15 th day of the 10 th month (or, 9½ months) after the close of the plan year. The IRS, DOL, and Pension Benefit Guaranty Corporation may announce special

extensions of time under certain circumstances, such as extensions for Presidentially-declared disasters or for service in, or in support of, the Armed Forces of the United States in a combat zone. See www.irs.gov, www.efast.dol.gov, and/or www.pbgc.gov/practioners for announcements regarding such special extensions. If you are relying on one of these announced special extensions, the appropriate box on Form 5500, Part I D will need to be checked and a description of the special extension will need to be entered. If the filing due date falls on a Saturday, Sunday or Federal holiday, the return/report must be filed on the next business day. 7-2 What Should I do if I Miss the Filing Deadline? The DOL s Delinquent Filer Voluntary Compliance Program (DFVCP) facilitates voluntary compliance by plan administrators who are delinquent in filing the Form 5500- SF/Form 5500 by permitting eligible plan administrators to pay reduced civil penalties for voluntarily complying with their DOL annual reporting obligations. Plan administrators are eligible for the DFVCP if the required filings are made prior to the date on which the plan administrator is notified in writing by the DOL of the failure to file a timely Form 5500. An IRS late filer letter will not disqualify a plan from participation in the DFVCP. A DOL Notice of Intent to Assess a Penalty will always disqualify a plan from participation in the DFVCP. See www.dol.gov/ebsa for information concerning the submission of penalty payments to the DFVCP processing center. If the Form 5500-SF/Form 5500 is being filed under the DFVCP, check Form 5500- SF, Part I C or Form 5500, Part I D to indicate that the Form is being filed under the DFVCP. Participation in the DFVCP is a two-part process. First, electronically file a complete Form 5500-SF/Form 5500, including all required schedules and attachments, with EBSA for each year relief is requested. Second, pay the applicable penalty amount, with the preferred method being electronically. You may also make your payment by check (payable to the DOL) by printing out and mailing a paper copy of the electronically completed and filed Form 5500 or Form 5500-SF, without schedules or attachments. Amounts paid under the DFVCP cannot be paid from plan assets as this is a reduced civil penalty that will be paid. The plan administrator is personally liable for the payment of civil penalties. The DOL understands that the IRS may provide relief from late-filing penalties under the IRC for a delinquent Form 5500-SF/Form 5500 if: (i) all applicable conditions of the DFVCP have been satisfied, and (ii) any information required concerning separated deferred vested participants (Form 8955-SSA) for the applicable plan year has been filed directly with the IRS. Plan administrators can use the online calculator at www.dol.gov/ebsa/calculator/dfvcpmain.html to compute the penalties under this program. This can be done even if submitting the penalty check by mail. 7-3 Are There Penalties for Failing to File Form 5500 and Related Schedules? Various administrative penalties due to a failure to file, late filing, or submission of incomplete information are assessed by the Secretary of Labor and/or The Internal Revenue Service. For additional information, please refer to Appendix H Form 5500 and Form 8955-SSA Related Penalties. 39

d. Upon request, the participant must be furnished a paper version of the electronic document. The employer may impose a reasonable charge. e The document may be sent electronically only to those participants who have the ability to effectively access the electronic document in the workplace as part of their normal work duties and, f The electronic media would need to comply with record maintenance or retention requirements under ERISA regulation sections 107 and 209. 7-4 Is a Plan Administrator Required to Provide Information From the Form 5500 to Participants and Beneficiaries? Under ERISA section 104, a plan administrator must provide a Summary Annual Report (SAR) to each participant or beneficiary within two months of the Form 5500 filing due date, including approved extensions. The SAR presents a summary of the plan activity that occurred over the course of the plan year. Most of the information on the SAR is obtained from the plan s annual Form 5500. Refer to the Appendix G Form 5500 Summary Annual Report CrossReference Chart to assist you in understanding what information comes from specific line items on the Form 5500 Schedule H, Schedule I or the Form 5500-SF. 7-5 Where can I get Additional Information on the Form 5500 and all Related Schedules? To fulfill this obligation, the plan administrator must use a delivery method that is reasonably calculated to ensure receipt. The following methods are acceptable: Refer to Appendix B Form 5500, Schedules and Attachments Quick Reference Chart and Appendix C Form 5500 Schedules Overview for additional information. An informational copy of the Form 5500 and all related schedules with instructions can also be found at http://www.dol.gov/ebsa/5500main.html on the DOL website. In-hand delivery at the workplace Insert in a periodical distributed to employees (e.g., union newspaper or company publication) Mailing by first class delivery (second or third class delivery is acceptable only if return and forwarding postage is guaranteed and address correction is requested) or, Via electronic media if all of the following steps are met: a b c 7-6 What are the Eligibility Requirements for a Form 5500-SF? The Form 5500-SF is a simplified annual reporting form for use by certain small pension and welfare benefit plans. To be eligible to use Form 5500-SF the plan must meet all the eligibility conditions listed below: Plan administrator must ensure the actual receipt of the document The document must still comply with the style, format and content requirements under ERISA regulation section 2520.104b1(c)(1)(ii) The participant must be provided an electronic or paper notice that describes the individual s right to request and obtain a paper version 40 Covered fewer than 100 participants at the beginning of the plan year, or was eligible to and filed as a small plan in the previous year and did not cover more

than 120 participants at the beginning of the current plan year; Did not hold any employer securities at any time during the plan year; At all times during the plan year, the plan was 100% invested in certain secure, easy to value assets that meet the definition of eligible plan assets, such as mutual fund shares, investment contracts with insurance companies and banks valued at least annually, publicly traded securities held by a registered broker dealer, cash and cash equivalents, and plan loans to participants; The plan is eligible for the waiver of the annual examination and report of an independent qualified public accountant (IQPA) (but not by reason of enhanced bonding); which requirement includes the required audit waiver disclosures in the SAR furnished to participants and beneficiaries; and, Is not a multiemployer plan; and, The plan is not required to file a Form M1, Report for Multiple-Employer Welfare Arrangements (MEWAs) and Certain Entities Claiming Exception (ECEs) during the plan year. 7-7 How Does an Employer Obtain a Three-Digit Plan Number in the Initial Plan Year? The plan administrator determines the threedigit plan number. This number must be a unique number different from other plan numbers the company may have. Do not reuse a three-digit plan number from a terminated plan; that number may never be reused. For plans utilizing Prototype Plan Documents, the three digit plan number may be referenced in the Adoption Agreement and found in the plan s Summary Plan Description. Based on the Form 5500 Instructions, plans providing pension benefits should generally begin with plan number 001; subsequent plans should be numbered 002, 003, etc. Do not assign any plan number 888 or 999. Do not use any number in the 500 series, as these are reserved for health and welfare plans. Please see the Form 5500 Instructions for additional information on three-digit plan numbers. Please note that the employer or the Trust Tax ID and their three-digit plan number creates an unique filing identifier for the plan sponsor. The Form 5500-SF is a two-page form with no additional schedules or attachments with the following exceptions: Single-employer defined benefit (DB) pension plans using the Form 5500-SF must file the Schedule SB Actuarial Information for Single-Employer Plans (Schedule SB); or Money Purchase Pension (MPP) plans amortizing a funding waiver must file the Schedule MB Multiemployer DB Plans and Certain Money Purchase Plan Actuarial Information (Schedule MB). 7-8 What is the Definition of Participant for the Purpose of Form 5500? The definition of participant includes: MassMutual completes the Form 5500-SF, based on the information in our recordkeeping system. 41 Active participants who are eligible to participate in the plan, whether or not they actually participate. For example, if a plan has a 401(k) option, any employee who is eligible to make a salary deferral contribution is considered a participant and must be counted as a participant, whether or not the employee elects to defer. Retired or terminated participants receiving benefits or entitled to future benefits.

count of the prior plan year. Deceased participants who had one or more beneficiaries who are receiving or entitled to receive benefits under the plan. Multiple beneficiaries attributable to only one participant are counted as one beneficiary. Example: Calendar Year plans with a January 1st entry date would likely report an increased participant count for the beginning of the current plan year (January 1) over the participant count reported at the end of the prior plan year (December 31st), due to additional employees becoming eligible to enter the plan on January 1st. Note: Accounts segmented or created due to alternate payees entitled to benefits under a Qualified Domestic Relations Order (QDRO) are not counted as a participant and should not be included in any of the participant counts. Note: Line 6a(1) of the Form 5500 is similar to line 5, except line 6a(1) is looking only for the active participants who were eligible on the first day of the plan year. 7-9 Why is the Participant Count Reported as of the Beginning of the Current Plan Year (Line 5 of Current Year s 5500) Different From the Participant Count Reported at the Closing of the Prior Plan Year (Line 6 of Prior Year s 5500)? 7-10 What Circumstances Necessitate the Filing of a Schedule C Service Provider Information (Schedule C)? The Schedule C is required for large plan filers (generally, plans with 100 or more participants at the beginning of the plan year) if any individual service provider has received $5,000 or more, directly or indirectly, for services rendered to the plan or the plan has terminated an accountant or enrolled actuary. Certain types of indirect compensation are deemed to meet the $5,000 threshold. In line 5 of Form 5500 Total number of participants at the beginning of the plan year, the IRS is looking for a count of all participants who were eligible on the first day of the plan year, as well as any participants who separated service (Terminated, Died, Disabled or Retired) in a prior year with an account balance on the first day of the plan year. Providers who have been paid direct or indirect compensation of $5,000 or more during the plan year are reported on line 2. Fees paid from participant accounts (i.e. annual loan maintenance fees, quarterly recordkeeping fees or withdrawal fees) are listed on the trust report fee line and detailed on the CDSC/Fee Report. Plan fees paid using funds from the forfeiture account or ERISA Reimbursement account are also reported on line 2 since they are direct fees, but will not be reported on line 3. Since the participant count must be completed for two different reporting periods, the beginning and ending of the plan year, the resulting participant count for the beginning of the current plan year is a case specific inquiry and may not always match the count at the end of the prior plan year. Depending on the individual plan s specific enrollment periods, the participant count reported for the beginning of the current plan year may be different from the ending Line 3 will be completed if a person identified on line 2 is a fiduciary to the plan or provides one or more of the following services to the plan contract administrator, 42

consulting, custodial, investment advisory (plan or participants), investment management, broker, or recordkeeping services and (1) the amount of the indirect compensation received was $1,000 or more, or (2) the plan was given a formula or other description of the method used to determine the indirect compensation rather than an amount or estimated amount of the indirect compensation. Based on the service provided, either MassMutual or MassMutual Life Insurance Company (MMLIC) will be reported on line 3 of Schedule C. Examples of indirect fees paid would include, but are not limited to, financial advisor or broker commissions, investment management fees and other Fiduciary advisory services. The services are generally part of MassMutual/ MMLIC s bundled service package, but are provided by a third party. should be included as an attachment to the Schedule C when filing the Form 5500. 7-11 What is a 5% Reportable Transaction for Purposes of the Form 5500 Filing? In ERISA regulation section 2520.1036(c)(1), the DOL describes 5% Reportable Transactions as follows: Service Providers reported on the Schedule C must be identified by their Employer Identification Number (EIN) or mailing address, if the EIN is not available. Direct Fees paid by the plan can be tested as part of the audit; however, indirect fees are based on contractual agreements between MassMutual and the vendor and as such are beyond the scope of a benefit plan audit. For further information regarding direct and indirect compensation arrangements in connection with the services provided by MassMutual to the plan, please refer to the plan s ERISA 408(b)(2) Disclosure Statement, as amended and updated. The source of the indirect compensation to MassMutual is the mutual fund companies. The calculation for the revenue sharing is made prior to the fund company s calculation of the investment vehicle s daily Net Asset Value (NAV) calculation. A transaction within the plan year with respect to any plan assets involving an amount in excess of 5% of the current value of the plan assets; Any series of transactions (other than transactions with respect to securities) within the plan year with or in conjunction with the same person that, when aggregated, regardless of the category of asset and the gain or loss on any transaction, involves an amount in excess of 5% of the current value of plan assets; A transaction within the plan year involving securities of the same issue, if within the plan year any series of transactions with respect to such securities, when aggregated, involves an amount in excess of 5% of the current value of plan assets; Any transaction within the plan year with respect to securities with or in conjunction with a person, if any prior or subsequent single transaction within the plan year with such person with respect to securities exceeds 5% of the current value of plan assets. The 5% figure is determined by comparing the current value of the transaction at the transaction date with the current value of the plan assets at the beginning of the plan year. If this is the initial plan year, the value of plan assets at the end of the year is used to set the 5% threshold. MassMutual provides the plan sponsor a Fee and Compensation Disclosure Report which details the direct and indirect fees paid by the plan for the reporting year. If applicable to the plan, the report details the Float Compensation, compensation paid with respect to investment funds and the amount paid to third party service providers. The Fee and Compensation Disclosure Report Fortunately, ERISA regulation section 2520.103-6(d)(2) permits transactions within 43

the same investment option identified in (c) above to be grouped or aggregated for purposes of the 5% reportable transaction requirement if the following information for each security is reported: 7-13 What EIN Should be Reported for the Payor on Schedule R Retirement Plan Information (Schedule R), Part I, line 2? The total number of purchases of such securities made by the plan within the plan year The total number of sales of such securities made by the plan within the plan year The total dollar value of such purchases The total dollar value of such sales The net gain or loss as a result of these transactions. The Schedule R reports distributions and funding information for defined contribution plans, including Money Purchase Pension (MPP) plans and for retirement plans that had benefits distributed during the plan year. If MassMutual was the payor who paid benefits reportable on Form 1099-R, Distributions From Pensions, Annuities, Retirement or Profit-Sharing Plans, IRAs, Insurance Contracts, etc. (Form 1099-R) in the plan year, we report MassMutual s EIN in Part 1. If the plan has reportable transactions which exceed 5% of plan assets as of the beginning of the plan year, Yes should be entered on the Schedule H line 4j. A Yes response requires the Schedule H, line 4j - Schedule of Reportable Transactions attachment. The employer s EIN should not be used since the employer is not a payor who paid benefits from the plan. Since Schedule R on ly allo ws two payor EINs to be reported, if more than two payors made payments during the year, the EINs (as they appear on Form 1099-R) of the two payors who paid the greatest dollar amounts during the year should be reported. 7-12 What is Reported on the Schedule H Financial Information, line 4j Schedule of Reportable Transactions Attachment? If MassMutual was the payor, its EIN of 041590850 is entered on line 2. If the plan converted to MassMutual in the previous plan year, the previous payor should be reported. This generally will be the payor EIN reported on the prior year Form 5500 Schedule R. The Schedule H, l i n e 4 j S c h e d u l e o f Reportable Transactions attachment includes the beginning of the year assets, receipts, disbursements and end of year assets for each fund. Transactions under an individual - account plan which a participant or beneficiary directed with respect to investments allocated to his or her own account are NOT treated as reportable transactions. This means that for most plans with participant directed accounts, there is no requirement for reporting 5% transactions. Transactions in employer directed accounts, however, are treated as non-participant directed transactions and must be reported on the attachment. 7-14 Could you Provide Sample Language for Notes to the Financial Statements That Incorporates the Changes under SOP 94-4-1? Please refer to the AICPA Guide for sample language. 44

years (except in the case of a principal residence loan that may provide for an extended repayment period); 2. An amortization schedule providing for level repayments made at least quarterly; 3. Made in conjunction with an enforceable agreement; 4. Not for an amount exceeding the maximum permissible loan amount available for the participant (usually 50% of the participant s vested balance up to $50,000 if the participant did not have another loan in the prior 12-month period, or if the participant had another plan loan in the prior 12-month period, the available loan amount will be decreased by the highest outstanding loan balance over the preceding 12month period). 7-15 Could you Provide Sample Language for Notes to the Financial Statements That Reconciles the net Assets Available for Benefits on the Financials to Form 5500? Please refer to the AICPA Guide for sample language. Form 5500 Loan Reporting If any of the above conditions are not met, the loan may violate IRC Section 72(p) and/or the supporting regulations and as a result may constitute an impermissible plan distribution with attendant tax penalties for the participant and the employer sponsoring the plan. The plan document s loan provisions will outline the plan s specific requirements. 7-16 Where is Information About the Plan s Loan Program Available and What are Some of the General Requirements for Participant Loans? A plan that provides for loans must specify the procedures for applying for a loan and the repayment terms for the loan. Loans are not taxable plan distributions unless they fail to satisfy the plan loan rules or the regulations with respect to amount, duration and repayment terms, as described below. In addition, a loan that is not paid back according to the repayment terms is treated as a distribution from the plan and is taxable as such. (Internal Revenue Code (IRC) Section 72(p); Treasury regulation section 1.72(p)-1, Q&A-1) 7-17 What are the tax Consequences to a Participant When the Plan Administrator Determines That a Participant Loan has Defaulted? A participant loan will, generally, default if repayments have not been made in accordance with the terms of the amortization schedule and other loan documentation. The plan loan documentation describes the specific circumstances under which a participant loan defaults for failure to comply with Some of the requirements for a plan loan include: 1. A repayment term not exceeding 5 45

the terms of the loan agreement. In most cases, when a participant does not repay a plan loan in accordance with its terms, the balance of the loan (and accrued interest on the loan) becomes taxable to the participant and is either distributed from his account ( offset ) or is deemed distributed. remains a continuing obligation of the participant. It is removed from the participant s balance on the Trust Report because it is not reported as outstanding for purposes of the Form 5500. Any amounts repaid after the loan has been deemed distributed are accounted for on an after tax basis (because the deemed distributed loan has already been taxed). This means that in a subsequent distribution to the participant, these repayments will reduce the taxable distribution. The deemed loan is considered a reportable and taxable distribution from a recordkeeping perspective, even if the participant continues to make repayments. The loan is offset (an actual distribution ) when the plan administrator removes the security balance of the defaulted participant loan from the participant s account (and it is no longer considered a plan asset.). The plan s loan documentation determines when a defaulted loan may be offset. Generally, an offset may occur only when the participant would otherwise be eligible to receive all or part of the loan as a plan distribution, for example, a distributable event such as a termination of employment due to retirement, disability or death. A typical loan offset scenario occurs when a participant with an outstanding loan, terminates employment, defaults on the loan and takes a distribution. The distribution is an eligible rollover and is subject to the standard tax provisions for plan distributions. If a defaulted loan cannot be offset, it may still be deemed distributed. An offset of a loan that has already been deemed distributed has no tax consequences because the loan was already taxed when it was deemed distributed. Alternatively, a defaulted loan may be treated as an actual distribution, a deemed distribution or a combination of the two. The latter scenario may occur when a participant loan is defaulted and the participant is eligible for a distribution on only part of the outstanding loan amount. A deemed distribution occurs when a participant loan is defaulted and the participant is NOT eligible for a plan distribution. This occurs primarily with active participants. A deemed distribution causes the value of the outstanding loan to be taxable to the participant while the loan remains an asset in the participant s account. For that reason, if the participant requests a subsequent loan, the deemed loan will be taken into consideration in the calculation of the maximum account balance available for the loan. In addition, if the plan restricts the number of outstanding loans allowed at any one time, the deemed distributed loan will continue to be considered outstanding and thus may bar the participant from qualifying for a subsequent loan. The plan administrator (usually the sponsoring employer) needs to be familiar with the plan s loan program to determine when the distribution of the loan should occur. In general, a participant loan repayment may not be made later than the cure period specified in the plan s loan program. Under IRS regulations, the cure period may not extend beyond the last day of the calendar quarter following the calendar quarter in which the payment was originally due. Plan administrators may wish to review the IRS s EPCRS correction program for more information on resolving plan loan compliance issues. When a loan is deemed distributed, it 46 Note on Tax Reporting: The distribution is reported to the participant and the IRS on Form 1099-R, Distributions From Pensions, Annuities, Retirement or ProfitSharing Plans, IRAs, Insurance Contract, etc. (Form 1099-R) after the end of the

calendar year if the loan is deemed distributed in the current year. If the deemed distribution is authorized to occur in a prior calendar year, a Form 1099-R will be produced reflecting the appropriate taxable amount for the year requested. As a result, the participant may need to amend the applicable prior year individual tax filing. The amount reported on Form 1099-R is the outstanding principal and accrued interest on the date the loan is deemed distributed and should not include interest after that date. If the participant is under the age of 59½, the participant will also be liable for the 10% excise tax penalty on premature distributions. balance for that year. 7-18 Why Does the Amount of an Outstanding Participant Loan Balance on the Trust Report not Reconcile With the Plan Administrator s Records? The reason for any differences between the Trust Report balance and the plan administrator s records may be due to the following circumstances: Reporting a Defaulted Participant Loan on Form 5500: Deemed distributions are reported on line 2g of Schedule H or I. The amount of the deemed distribution must also be subtracted from the plan s end of year balance on line 1c(8)(b) (Schedule H) or line 1a(b) (Schedule I). 1. Loan payments have been paid by the participant on time via payroll withholding, but the plan administrator is late in remitting the payments to the plan (so that the affected loan payments are credited to the participant s account later than the scheduled installment date, thus increasing the amount of outstanding accrued interest on the loan); or 2. In a loan payoff situation, excess interest will accrue on the remaining loan balance during the time in which a participant is quoted a pay-off figure until the time that payment is received and processed, if that time window exceeds a short grace period. If the plan is not able to offset the defaulted loan (usually because the participant has not experienced a distributable event) a discrepancy may exist between the plan records and the Form 5500 financial statement. Plan administrators and their auditors should be aware that this discrepancy is NOT an issue. Defaulted participant loans that are not able to be offset at the time of the default (and as a result treated as deemed distributions) will later be offset when a distributable event does occur. When the defaulted loan is offset, it will not be reportable as a distribution on the Form 5500 nor on the Form 1099-R; the loan will instead be offset against the participant s account balance. This type of loan offset may not be rolled over since there is no reportable distribution. Note: If a participant recommences payment on a defaulted loan previously treated as a deemed distribution, a reversal of the reporting of the loan on the Form 5500 is required. The loan must be reported as a negative amount on line 2g (Schedule H or I) and added to the end of the year 7-19 What is the Loan Closeout Transaction Indicated on the Trust Report? The loan closeout transaction indicated on the Trust Summary Report is similar to a distribution and effectively eliminates the outstanding balance of the loan. The loan closeout transaction was not designed (and is not used) in any case where the opening 47

balance of a participant loan was overstated due to a client error (e.g., when a plan administrator originally approved a beginning balance allocation while the plan was in its conversion phase, but later recognizes and acknowledges the error), or other administrative oversight. the plan s loan interest. The loan interest amount is disclosed on the Schedule H on line 2b(1)(E). 7-21 Should Participant Loan Defaults be Included on Schedule G Financial Transaction Schedules (Schedule G)? The intention behind the creation of the loan closeout transaction was to provide an efficient way to reduce a loan balance, by a modest amount, in order to bring it into conformance with the loan balance that the plan sponsor determined to be correct. It is a substitute for a loan adjustment (which requires strict identification of dates and errors, earnings and interest statements, and a much longer operational process). But unlike a loan adjustment, the loan closeout transaction is generally used only at the end of the loan amortization period to reduce the loan balance, at the time or just before the final loan payment is made. Participant loans under an individual account plan made accordance with ERISA regulation section 2550.408b-1 and that are secured solely by a portion of the participant s vested accrued benefit should not be reported in Part I of Schedule G. PART VIII: Group Annuity Investment Product Form 5500 and Related Schedules The recordkeeping system s participant loan functionality calculates interest on a daily basis on the participant s unpaid principal balance until the next expected loan installment (or loan payoff amount) is received in accordance with the loan amortization schedule generated by the system. Loan functionality calculates accrued interest on participant loans after the end of the plan s grace period (more formally, cure period as defined in the loan regulations). This provides greater conformity between the loan s original amortization schedule and the payment experience recorded on the recordkeeping system and has resulted in a significant curtailment in the use of the loan closeout transaction. 8-1 How is the Form 5500 Filing Different for Group Annuity Investment Product Plans? A group annuity investment product plan s Form 5500 generally uses the same schedules; however, the information reported in the Schedules A, D and H will differ from the non-group annuity products. 7-20 How is the Loan Closeout Amount Accounted for on the Schedule H of the 5500 Filing? The loan closeout amount is used to offset 48

8-2 If the Plan has Selected a Group Annuity Investment Product, why are all of the Investments Offered in the Plan not Reported on Schedule A Insurance Information (Schedule A)? As previously noted in Part III, the Group Annuity Investment Product offers different underlying investments based on the contract and the state in which the sponsor is based: mutual funds, common collective trusts, pooled separate accounts (PSAs) and an option to invest in the general account of the insurance carrier offering the Group Annuity. Of these options, only an investment in the insurance carrier s general account is reported in detail on Schedule A. 8-3 What Information is Different on Schedule A Aren t all Insurance Products Reported the Same way on This Schedule? The Group Annuity is an insurance product, yet the information is not reported on Schedule A in the same way as Life Insurance policies since they are different investment vehicles. Life insurance contracts and deferred annuity contracts are allocated funding arrangements. Contracts are not allocated unless the insurance company or organization that issued the contract has unconditionally guaranteed, upon receipt of the required premium or consideration, to provide a retirement benefit of a specified amount to each covered participant without adjustment for fluctuations in the market value of the 49 underlying assets of the company or organization, and each participant has a legal right to such benefits which is legally enforceable directly against the insurance company or organization. Group Annuity Contracts are unallocated contracts. Unallocated funding arrangements provide for money to be held and invested in the general account until it is needed to pay benefits or purchase annuities. 8-4 Is the Schedule A, Part II Information Included in the Accountant s Examination for the Annual Plan Audit? Under a limited scope audit, the information reported on Schedule A is not examined when the reports are certified under the authority of ERISA section 103(a)(3)(C). ERISA section 103(a)(3)(c) or ERISA regulation section 2520.103-8 allows the plan administrator to instruct the auditor not to perform any auditing procedures with respect to investment information prepared and certified by a bank or similar institution or by an insurance carrier that is regulated, supervised, and subject to periodic examination by a state or federal agency who acts as trustee or custodian. The election is available, however, only if the trustee or custodian certifies both the accuracy and completeness of the information submitted. 8-5 Why Does MassMutual Self-Certify the Trust Report for the Group Annuity Investment Product? Under ERISA regulation section 2520-103- 5(c), an insurance company that holds

assets in their general fund and/or pooled separate accounts must certify the statements provided are complete and accurate. 8-8 Why is There a Small Difference in the Values Reported on Schedule A Lines 4 or 5 to the Values Reported on Schedule H? 8-6 Where is the Documentation Located for the Financial Detail Reported in Schedule A? The difference is due to rounding for the financial activity reported in Schedule A and the values in Schedule A should not be changed in order to tie to the values reported on Schedule H. The financial detail reported in Schedule A i s derived from the Trust Report included in the audit report package. Refer to Appendix D Form 5500, Schedule A Illustrations for Group Annuity Investment Product for an illustration of the financial transactions accrued in each line of the activity reported on Schedule A. 8-9 Why are Pooled Separate Account (PSA) Investments Reported to Mirror Their Underlying Investment and not Reported as a PSA in the Assets Section of Schedule H, Part I? 8-7 What Financial Information is Reported in Part II on Schedule A and why Does it not tie to the Financial Information Reported on Schedule H Financial Information? When the provider of the Group Annuity contract is not a Direct Filing Entity (DFE), the assets held in the PSA are reported as their underlying asset. However, please note, the combined net investment gain or loss from all PSAs should be reported as such regardless of whether a DFE Form 5500 is filed for the PSA. See D OL Form 5500 Instructions for Schedule H, lines 1c(10) and 2b(7) at https://www.dol.gov/agencies/ebsa/employe rs-and-advisers/plan-administration-andcompliance/reporting-and-filing/form-5500. The financial detail for the Fixed Account annual financial activity is reported on Schedule A, Part II. The financials on Schedule H report all of the plan s assets, including the Fixed Account. For an illustration of how to record plan activity for an annuity contract that does not file as a DFE refer to Appendix F: Form 5500 Schedule H Illustrations. 50

8-10 Why are the Pooled Separate Account (PSA) Investments not a Direct Filing Entity (DFE)? Banks, insurance companies, trust companies or other financial institutions can file Form 5500, as a DFE, as a way to provide participants and beneficiaries with information required by ERISA. Hartford Life Insurance Company does not file as a DFE for its PSAs. 8-11 In the Income Section of Schedule H, Part II, why are the Pooled Separate Account (PSA) Earnings Reported as PSA Earnings and not Reported to Mirror Their Underlying Investments? DOL Form 5500 Instructions for Schedule H, line 2b(7) state that earnings for the PSAs for which a DFE has not been filed be reported based on the appropriate actual funding entity, which is a PSA. See DOL Form 5500 Instructions for Schedule H 2b(7) at https://www.dol.gov/agencies/ebsa/employ ers-and-advisers/plan-administration-andcompliance/reporting-and-filing/form-5500. Please see Appendix F: Form 5500 Schedule H Illustrations for additional details IRS Circular 230 Disclosure: This communication was written in connection with the potential promotion or marketing, to the extent permitted by applicable law, of the transaction(s) or matter(s) addressed herein. However, MassMutual and its affiliates do not provide legal or tax advice. Accordingly, to the extent this communication contains any discussion of tax matters, such communication is not intended or written to be used, and cannot be used, for the purpose of avoiding tax-related penalties. Any recipient of this communication should seek advice from an independent tax advisor based on the recipient's particular circumstances. 51

Appendix A: ASC 820 Suggested Fair Value Information SUGGESTED FAIR VALUE INFORMATION FINANCIAL ACCOUNTING STANDARDS ASC 820 ("FAS 157") MassMutual Retirement Services (MMRS) Suggested Fair Value Disclosure Information For Plan Sponsor Use Investment Type Measurement Frequency Valuation Methodology * Suggested Fair Value Hierarchy Pooled Separate Account with underlying mutual fund investment Daily Unit Value Level 2 Pooled Separate Account with underlying common collective trust investment Basis for Suggested Hierarchy Unit value calculated based on the observable NAV of the underlying investment. Unit value calculated based on the price of the underlying investment received from the fund manager. Daily Unit Value Level 2 Daily Liquidation value Level 2 Liquidation value based on actuarial formula as defined under the terms of the contract. No unobservable inputs. Mutual Funds Daily Net Asset Value Level 1 NAV available in an observable market. Common Collective Trust Equity Daily Net Asset Value Level 2 NAV calculated by the fund manager based on the underlying investments. Common Collective Trust Stable Value Daily Net Asset Value Level 2 NAV calculated by the fund manager based on the underlying investments. Self Directed Brokerage Account Daily Unit Value Level 2 Unitized Employer Stock Daily Unit Value Level 2 Unit value calculated based on the observable net asset values of the underlying i t t Unit value calculated based on the market value of the stock plus the shortterm investment fund (STIF). Fixed Income Account / General Account investment option (GIA) *The valuation methodology is widely recognized as the "exit" or selling price as required by Generally Accepted Accounting Principals / National Securities Clearing Corporation. General Disclosure Information presented above is provided as a service to our clients and is based on MassMutual's interpretation of Generally Accepted Accounting Principals as applicable to retirement plans. Such information and the methodologies utilized to generate the information shown above does not constitute an endorsement by MassMutual that such methodologies are appropriate to be reported on the plan's annual financial statement. The plan sponsor and the plan's auditor must solely determine whether the information MassMutual has provided is applicable given the particular contract and their interpretation of applicable regulations. This document is not intended to be an in-depth description of the investment options held within retirement plans. Plan sponsors should consult with their Certified Public Accountant regarding the appropriateness of the financial statement presentation. MassMutual Retirement Services (MMRS) is a division of Massachusetts Mutual Life Insurance Company (MassMutual) and its affiliate companies and sales representatives. 52

Quick Reference Chart of Form 5500, Schedules, and Attachments (Not Applicable for Form 5500-SF Filers) 1 Large Pension Plan Small Pension Plan 2 Large Welfare Plan Small Welfare Plan 2 Form 5500 Must complete. Must complete. Must complete. 3 Must complete. 3 Must complete. DFE Schedule A (Insurance Information) Must complete if plan has insurance contracts. Must complete if plan has insurance contracts. 4 Must complete if plan has insurance contracts. Must complete if plan has insurance contracts. 4 Must complete if MTIA, 103-12 IE, or GIA has insurance contracts. Schedule C (Service Provider Information) Must complete Part I if service provider was paid $5,000 or more, Part II if a service provider failed to provide information necessary for the completion of Part I, and Part III if an accountant or actuary was terminated. Not required. Must complete Part I if service provider was paid $5,000 or more, Part II if a service provider failed to provide information necessary for the completion of Part I, and Part III if an accountant or actuary was terminated. Not required. MTIAs, GIAs, and 103-12 IEs must complete Part I if service provider paid $5,000 or more, and Part II if a service provider failed to provide information necessary for the completion of Part I. GIAs and 103-12 IEs must complete Part III if accountant was terminated. Schedule D (DFE/Participating Plan Information) Must complete Part I if plan participated in a CCT, PSA, MTIA, or 103-12 IE. Must complete Part I if plan participated in a CCT, PSA, MTIA, or 103-12 IE. 4 Must complete Part I if plan participated in a CCT, PSA, MTIA, or 103-12 IE. Must complete Part I if plan participated in a CCT, PSA, MTIA, or 103-12 IE. 4 All DFEs must complete Part II, and DFEs that invest in a CCT, PSA, or 103-12 IE must also complete Part I. Schedule G (Financial Schedules) Must complete if Schedule H, lines 4b, 4c, or 4d are Yes. Not required. Must complete if Schedule H, lines 4b, 4c, or 4d are Yes. 3 Not required 3. Must complete if Schedule H, lines 4b, 4c, or 4d for a GIA, MTIA, or 103-12 IE are Yes. Schedule H (Financial Information) Schedule I (Financial Information) Schedule MB (Actuarial Information) Schedule R (Pension Plan Information) Schedule SB (Actuarial Information) Must complete. 5 Not required. Must complete. 3, 5 Not required. All DFEs must complete Parts I, II, and III. MTIAs, 103-12 IEs, and GIAs must also complete Part IV. 5 Not required. Must complete. 4 Not required. Must complete. 4 Not required. Must complete if multiemployer defined benefit plan or money purchase plan subject to minimum funding standards. 6 Must complete if multiemployer defined benefit plan or money purchase plan subject to minimum funding standards. 6 Not required. Not required. Not required. Must complete. 7 Must complete. 4, 7 Not required. Not required. Not required. Must complete if single-employer or multiple-employer defined benefit plan, including an eligible combined plan and subject to minimum funding standards. Must complete if single-employer or multiple-employer defined benefit plan, including an eligible combined plan and subject to minimum funding standards. Not required. Not required. Not required. General Instructions to Form 5500

Large Pension Plan Small Pension Plan 2 Large Welfare Plan Small Welfare Plan 2 DFE Accountant s Report Must attach. Not required unless Schedule I, line 4k, is checked No. Must attach. 3 Not required. Must attach for a GIA or 103-12 IE. 1 This chart provides only general guidance. Not all rules and requirements are reflected. Refer to specific Form 5500 instructions for complete information on filing requirements (e.g., Who Must File and What To File). For example, a pension plan is exempt from filing any schedules if the plan uses Code section 408 individual retirement accounts as the sole funding vehicle for providing benefits. See Limited Pension Plan Reporting. 2 Pension plans and welfare plans with fewer than 100 participants at the beginning of the plan year that are not exempt from filing an annual return/report may be eligible to file the Form 5500-SF, a simplified report. In addition to the limitation on the number of participants, a Form 5500-SF may only be filed for a plan that is exempt from the requirement that the plan s books and records be audited by an independent qualified public accountant (but not by reason of enhanced bonding), has 100 percent of its assets invested in certain secure investments with a readily determinable fair market value, holds no employer securities, and is not a multiemployer plan. See Who Must File. 3 Unfunded, fully insured, or combination unfunded/fully insured welfare plans covering fewer than 100 participants at the beginning of the plan year that meet the requirements of 29 CFR 2520.104-20 are exempt from filing an annual report. See Who Must File. Such a plan with 100 or more participants must file an annual report, but is exempt under 29 CFR 2520.104-44 from the accountant s report requirement and completing Schedule H, but MUST complete Schedule G, Part III, to report any nonexempt transactions. See What To File. All Plans required to file Form M-1 (Report for Multiple-Employer Welfare Arrangements (MEWAs) and Certain Entities Claiming Exception (ECEs)) must file a Form 5500 regardless of plan size or type of funding. 4 Do not complete if filing the Form 5500-SF instead of the Form 5500. 5 Schedules of assets and reportable (5%) transactions also must be filed with the Form 5500 if Schedule H, line 4i or 4j is Yes. 6 Money purchase defined contribution plans that are amortizing a funding waiver are required to complete lines 3, 9, and 10 of the Schedule MB in accordance with the instructions. Also see instructions for line 5 of Schedule R and line 12a of Form 5500-SF. 7 Schedule R should not be completed when the Form 5500 annual return/report is filed for a pension plan that uses, as the sole funding vehicle for providing benefits, individual retirement accounts or annuities (as described in Code section 408). See the Form 5500 instructions for Limited Pension Plan Reporting for more information. General Instructions to Form 5500

Appendix C: Form 5500 Schedules Overview Form 5500 Schedule A C Type of Required Information Information on Contracts with Insurance Companies and certain DFEs Information on Service Providers (Large Plans) Description of Form 5500 Schedule The Schedule A is required if any benefits under an employee benefit plan are provided by an insurance company, insurance service or other similar organization. This includes investment contracts with insurance companies, such as guaranteed investment contracts (GIC) and Pooled Separate Accounts (PSAs). When applicable it must be filed for defined benefit pension plans, defined contribution pension plans and welfare benefit plans. The Schedule C is required for a large pension welfare benefit plan, MTIA, 103-12 IE, or GIA if (1) any service provider received $5,000 or more in compensation, directly or indirectly, from the plan or DFE, or (2) an accountant and/or enrolled actuary has been terminated. D Information on Participation in Certain Pooled Investment/ Insurance Arrangements (CCT, PSA, MTIA, 103-12 IE and GIA) Schedule D is required for any employee benefit plan that participated or invested in one or more common collective trusts (CCT), pooled separate accounts (PSA), Master Trust investment accounts (MTIA), or 103-12 Investment Entities (103-12 IE) at any time during the plan year. G H Information on Nonexempt Transactions* and Loans, Leases and Fixed Income Investments in Default/Uncollectibles for Large Plans Financial Statements and Related Information for Large Plans and DFEs Schedule G is required for a large plan, MTIA, 103-12 IE, or GIA to report loans or fixed income obligations in default or determined to be uncollectible as of the end of the plan year. Also included are leases in default or classified as uncollectible and nonexempt transactions. Defaulted participant loans that are secured exclusively by a participant s account are not to be included. Schedule H is required for a pension benefit plan or a welfare benefit plan that covered 100 or more participants as of the beginning of the plan year or is filing a Form 5500 for a MTIA, CCT, PSA, 103-12IE, or GIA as a DFE. I Financial Statements and Related Information for Small Plans Schedule I is required for pension benefit or welfare benefit plan that covered fewer than 100 participants as of the beginning of the plan year. 55

Form 5500 Schedule Type of Required Information Description of Form 5500 Schedule MB Multiemployer Defined Benefit Plan and Certain Money Purchase Plan Actuarial Information Schedule MB is required for most multiemployer defined benefit plans and for defined contribution pension plans that are currently amortizing a funding waiver. R Information on Pension Plans including Plan Distributions and Funding Requirements Schedule R is required for a pension benefit plan that is a defined benefit plan or is otherwise subject to Code Section 412 or ERISA section 302. It reports certain information on plan distributions, funding, and the adoption of amendments increasing the value of benefits in a defined benefit pension plan and results of Coverage testing. SB Single-Employer Defined Benefit Plan Actuarial Information Schedule SB is required for most single-employer and multiple employer defined benefit plan that is subject to the minimum funding standards. * Nonexempt transactions include late deposits of employee deferral contributions, discriminatory granting of participant loans and prohibited transactions between fund assets and parties-in-interest. If your plan had a nonexempt transaction during the year, consult your ERISA attorney or accountant to determine if it is necessary to file Form 5330, Return of Excise Taxes Related to Employee Benefit Plans. 56

Appendix D: Form 5500, Schedule A Illustrations for Group Annuity Investment Product 57

Both Line 4 and Line 7f on the Schedule A, come from the Trust Reports, adding the closing balances for the Fixed Investment and the Employer Forfeiture Account together. 58

Line 7c(1) comes from the Trust Report, Fixed Investment, Contrib 59

Line 7c(3) is determined by adding the Gain (Loss) from the Trust Report from the Fixed Investment and the Employer Forfeiture account. 60

Line 7c(4), comes from the Trust Statement, Fixed Investment, Exchange and the Employer Forfeiture Account, Redemptions. 61

Line 7c(5), Other, generally comes form the Trust Report, Fixed Investment, Loan Transfer In. 62

Disbursed from fund to pay benefits or purchase annuities during the year and year and Administration charge made by carrier Lines 7e(1) and 7e(2) come from the Trust Report, Fixed Investment, Distrib. (w/wh) for 7e(1) and CDSC/COMM/STTR/FEES for 7e(2) 63

Line 7e(3) comes from the Trust Report, Employer Forfeiture Account, Redemptions. 64

Line 7e(4) comes from the Trust Statement, Fixed Investment, generally Forf and Loan Transfer Out. 65

Appendix E: Form 5500 Schedule D Illustrations Line e of the Schedule D is the sum of Lines 1c(9) thru 1c(13) of the Schedule H. An entry for each MTIA, CCT, PSA, or 103-12IE should be included on the Schedule D. 66

Appendix F: Form 5500 Schedule H Illustrations Line 1c(8) comes from the Trust Report, Loan column, Closing Balance. 67

Line 1c(14) comes from the Trust Report, under the Fixed Investment, Closing Balance. If there are other assets identified on lines 1c(9) thru 1c(12), find the investment on the Trust Report and enter the ending balance in the appropriate line item. 68

Line 1l, Net Assets, come from the Trust Report, Total, Closing Balance. 69

Line 2a(1)(A) thru Line 2a(1)(C), Income: Contributions, come from the Trust Report, Total, identified by contribution type. Line 2b(1)(E), Earnings on Investments: Participant Loans, Total, Loan Interest. 70

Line 2b(1)(F) comes from the Trust Report, Fixed Investment, Gain (Loss) plus Employer Forfeiture Account, Gain (Loss). 71

Benefit Payments, directly to participants or beneficiaries, including direct rollovers and Administrative expenses, Other. Line 2e(1) comes from the Trust Report, Total, Distrib. (w/wh) and Line 2I(4), Total, CDSC/COMM/STTR/FEES. 72

Line 2b(7) is determined by the following: Total column, Divs plus/minus Gain (Loss), less Forf s, less the amount determined previously for Line 2b(1)(F), other earned interest on investments. For Example: 358,266.80 Divs - 129,081.66 Loss 13,624.81 Forf 7,106.46 Line 2b(1)(F) -------------208,453.87 rounded to 208,454 + 1 (rounding) 73