Year-End Compliance Workshop Fall 2007

1. Year-End Compliance Workshop Fall 2007

2. Resource Information Compliance Call Center • 1-877-872-3244, Option 3 Plan Technical Support • 1-877-872-3244, Option 1

3. Agenda • Plan compliance services overview • Plan compliance services timeline • Team reporting structure and escalation procedures • 2008 Focus and initiatives • Plan Service Center (PSC) demo • Legislative changes

4. Plan Compliance Core Services Plan Year-End Non-Discrimination Testing: • On-line data collection tool • HCE/Key determination • Top heavy determination • Eligibility calculation • Coverage testing • Plan deferral limits (HCE and NHCE) • 402(g) monitoring • Age 50 catch-up • Annual additions • Employer/forfeiture allocations • ADP/ACP Non-discrimination testing • E-mail notification of testing results summary • On-line results delivery and storage • Auditor support (i.e. coverage testing, etc.)

5. Plan Compliance Core Services Signature Ready IRS Form 5500 Preparation: • Reconcile conversion assets • IRS Form 5558 extension filing • IRS Form 5330 excise tax reporting for refunds made after deadline • E-mail notification of completed IRS Form 5500 packet • On-line delivery and storage • Respond to DOL inquiries • Auditor support Other Compliance Services: • Mid-year ADP/ACP testing • Assist with self correction methods (SCP,VCP filings) • Assist with late IRS Form 5500 filings (DFVC filings)

6. Plan Compliance Non-Core Services • Multiple scenario allocations/illustrations • Cash to accrual financial reporting • Revised testing due to census revisions by client • Benefits, Rights, and Features testing under IRC §401(a)(4)

7. Plan Compliance Services Timeline Census data request packet December 3, 2007 Confirmation e-mail December 14, 2007 Confirmation phone call December 21, 2007 First follow-up e-mail January 15, 2008 Census data deadline January, 31, 2008 Excess ADP/ACP refund deadline March 14, 2008 IRC §402(g) letter (failures only) March 24, 2008 Second follow-up e-mail April 15, 2008 IRS Form 5500 (if data rec’d by 5/1/08) July 1, 2008 IRS Form 5558 extension letter July 15, 2008 IRS Form 5500 partial - deadline letter July 15, 2008 IRS Form 5500 deadline July 31, 2008 IRS Form 5500 deadline w/extension October 15, 2008 Non-responsive client letter November 3, 2008 For plan years ending 12/31/07

8. Plan Compliance Team • Tricia Day, APA • 11+ years Financial Industry experience • M.S. Management and Organizational Development, University of Colorado • B.A. Business Administration, California State University • Denver Location • Brendon Walkenhorst • 9+ years Financial Industry experience • B.S. Finance, Fort Lewis College • Denver Location • Krissy Ptacek • 1+ year Financial Industry experience • Denver Location • Kris Conley • 6+ years Financial Industry experience • B.S. Finance, University of Colorado • Denver Location

9. Plan Compliance Team • Jeri Steen • 18+ years Financial Industry experience • B.A. Business Administration, Colorado State University • M.B.A., University of Phoenix • Denver Location • Michael Schleelein • M.B.A. Masters of Business Administration, National University • Denver Location • Anthony Reed • 3+ years Financial Industry experience • Denver Location • Ryan Strankowski • 3+ years Financial Industry experience • B.S. in Economics, University of Wisconsin • Milwaukee Location

10. Plan Compliance Team • Dawn Benavides • 12+ years Financial Industry experience • University of Wisconsin and UWWC • Milwaukee Location • Tim Zabinski • 10+ years Financial Industry experience • M.B.A. Masters of Business Administration, Marquette University • Milwaukee Location • Shelley Stefaniak • 10+ years Financial Industry experience • B.A. in History, University of Milwaukee • Milwaukee Location • Yana Parfenovich • B.S. Finance, University of Wisconsin • Milwaukee Location • Kevin Pomazal • 2 years Financial Industry experience • Milwaukee Location

11. Plan Compliance Management Team • Colleen Wolfe, Assistant Manager • 9+ years Financial Industry experience • B.S. University of Wisconsin • Milwaukee Location • Kris Mullihan QPA, QKA, Associate Manager • 27+ years Financial Industry experience • B.A. Business Administration, University of Wisconsin • Milwaukee Location • Kelli Hasken, Associate Manager • 16+ years Financial Industry experience (5+ years with GWRS) • B.A. Business Administration, University of Iowa • Held Series 6 • Denver Location • Tracy Nimmer APA, Associate Manager • 12+ years Financial Industry experience (10+ years with GWRS) • B.A. English/History, University of Missouri • Denver Location • Frank Porter APA, QKA, QPA, AVP • 16+ years Financial Industry experience (13+ years with GWRS) • Member of the American Society of Pension Professionals and Actuaries Government Affairs 401(k) Sub-committee • Author of various articles published by the Society and added to the compendium of reading materials for the Certified Pension Consultant exams

12. Plan Compliance Escalation Procedures • FASCore compliance analyst will respond to/answer inquires as follows: • Respond same day on calls received in the morning (mountain time) • Respond in the morning the following day, if calls received in the afternoon • If the compliance analyst has not provided a resolution within three business days, please forward the request to Colleen Wolfe, Kelli Hasken, Tracy Nimmer or Kris Mullihan • If you do not receive a resolution within one business day, the request should be forwarded to Frank Porter

13. Plan Compliance Services 2008 Focus • Compliance Call Center • Year testing questions (including census upload) • 5500 related questions • Employer allocation liaison • On-Demand Testing

14. On-Demand Testing • Client will have the ability to create and test on any period within the plan year • Link to video demonstration which highlights the process • Fully automated process • 5 day turnaround time • Questionable data report • Unlimited number of tests allowed • Online results delivery and storage • Contact compliance call center for support

15. 2007/2008 Limits for Qualified Plans 20072008 • 402(g) Limit for 401(k) and 403(b) deferrals1: $15,500 $15,500 • Catch-up Contribution Limit1: $5,000 $5,000 • Limit on Annual Additions 415(c): $45,000 $46,000 • Compensation Limit 401(a)(17): $225,000 $230,000 • Highly Compensated Employee 414(q): $100,000 $105,000 • Officer compensation 416(i)(1)(A)(i): $145,000 $150,000 • Taxable Wage Base: $97,500 $102,000 • 1Combined limit for 401k and Roth 401k contributions

16. Testing Process Milestones Step 3 Census packet mailed to client indicating data ready for review/submission Step 1 During Implementation data is mapped from HR/Payroll data file Step 4 Client reviews data via web site, makes corrections, and submits data for testing Step 2 Recordkeeping system stores data fromeach payroll file Recordkeeping system updates Step 8 Participant notified of applicable corrections Contribution/Distribution Processing Step 5 Analyst performs tests and submits results to web site Step 7 Client accesses results and follows steps for any applicable corrections Step 6 Analyst e-mails summary to client and directs client to web site

42. Pension Protection Act and Regulatory Updates

43. Automatic Enrollment • Eligible Automatic Contribution Arrangement “EACA”: • Annual notice requirement • ADP/ACP tests - 6 months to refund excess contributions • Provides for default investment • Qualified Automatic Contribution Arrangement “QACA” • Must meet EACA requirements • Automatic Increase • Safe Harbor contribution • Match of 100% of the first 1%, plus 50% of the next 5% (3.5% total) OR • Non-elective of 3% • No ADP/ACP testing • Not subject to Top Heavy if only safe harbor contributions • 2-year cliff vesting allowed

44. Notice and Consent Disclosure for Distributions • Effective for 2007 plan years • Plans required to provide applicable distribution notices no less than 30 or more than 180 days before distribution commences • Notice must include description of participant’s right to defer receipt of distribution and consequences of failure to defer • Applicable distributions notices include: • Rollover notice - IRC 402(f) • General consent notice - IRC 411(a)(11) • Qualified joint and survivor annuity notice - IRC 417 • Notice 2007-7 answers questions regarding deadlines • Can comply in “good faith” until IRS issues regulations

45. Rollovers by Non-Spouse Beneficiaries • Non-spouse beneficiaries will now be able to roll distributions from a qualified plan, 403(b) annuity or governmental 457(b) into an IRA • Notice 2007-7 allows plan to provide without amending plan. (Technical corrections will require all plans to provide provision) • Required minimum distribution rules available to inherited IRA • 5 year rule – must rollover within 5 years = must take distribution from IRA within 5 years • Life expectancy rule - distributions to begin by December 31 of the year following the year of the participant’s death

46. Quarterly Participant Statements • Effective for plan years after December 31, 2006, defined contribution plans must provide a benefit statement to participants with individually directed accounts every quarter and to all other participants and beneficiaries once per year • The benefit statement must include: • a valuation of the participant’s account, • a statement regarding the need to diversify investments, and • a description of any limitations or conditions on the participant’s ability to control his or her investments. • Link to DOL website for more information • DOL issued Field Assistance Bulletin 2006-3 to provide additional interim guidance

47. Field Assistance Bulletins • FAB 2006-3 • Allows for good-faith compliance until further guidance is issued • Clarifies dates for furnishing statements • Good-faith of 45 days following the end of quarter • Allows information to be provided from multiple sources • Contains sample diversification explanation • Provides acceptable guidelines for the use of electronic statements • FAB 2007-3 • Provides profit sharing plans earlier of 5500 filing date or due date of 5500 filing

48. Increased Bonding • Effective for plan years beginning on or after January 1, 2008 • Maximum bond for plans with employer securities is the lesser of • 10% of plan assets or • $1,000,000

49. EGTRRA Remedial Amendment Period Restatements • EGTRRA remedial amendment period for individually designed plans – extended to the end of the applicable 5-year remedial amendment cycle (Rev. Proc. 2005-66) • Rev. Proc. 2007-44 updates and supersedes Rev. Proc. 2005-66 • “on-cycle” review status for certain “off-cycle” determination letter filings • Clarifications on the 6-year cycle for pre-approved plans • Expanded guidance on the coordination between remedial amendment periods • Special rules for tax-exempt organizations and governmental entities • Rev. Proc. 2007-49 provided clarification of Rev. Proc. 2007-44 and provided EPCRS updates for streamlined VCP filings • Prototype document restatement scheduled for the 2nd quarter of 2008

50. Current Developments • Beyond the number of PPA provisions, new notices, and IRS/DOL guidance, we also received the following: • Final Code 415 regulations • Partial termination guidance • Final Roth 401(k) regulations • Final 403(b) regulations