March 2012

1. March 2012 New Ideas About The Distribution Phase Mark Fortier Head, Product & Partner Strategy—DC Investments This presentation is provided by AllianceBernstein L.P. This presentation booklet has been provided to you for use in a private and confidential meeting to discuss a potential or existing investment advisory relationship. This presentation is not an advertisement and is not intended for public use or distribution beyond our private meeting.

2. Offer employees a highly attractive participant-paid benefit Potential tool to attract and retain talent Help simplify worker investment and retirement income planning Help motivate and encourage savings Help provide the security—and confidence—employees need to retire Why Offer an In-Plan Lifetime Income Strategy? Key Employer Benefits

3. Low cost distribution Lower behavioral and anti-selection risks from default investors Lower capacity risks from a multi-insurer structure An customer that values risk management An customer that values the security and confidence needed to retire Why Offer an In-Plan Lifetime Income Strategy? Key Insurer Benefits

4. Most Important Investment Features: Control and Certainty “Active Investors” (43%) “Accidental Investors” (57%)  I want a steady income stream in retirement Actives: 66%/Accidentals: 68%  I want the ability to withdraw all or part of my money with no fees/penalties (51%)  I want protection of principal (46%)  I want a well-diversified mix of investments (48%)  I want the ability to withdraw all or part of my money with no fees/penalties (48%) Source: AllianceBernstein Research Survey, March 2011

5. Concerns that products are too new; can’t take advantage of upgrades Extended responsibility, including insurer selection and monitoring Cost of insurance versus investments How to add it to the investment menu; How will participants understand it? Concerns that participants can’t leave plan and preserve benefit, or that sponsor is “locked into” a package What’s the benefit to the employer? DC Sponsors May Have Concerns Over Adding In-Plan Income Solutions Issue Product Fiduciary Expense Communication Portability Rationale As of December 31, 2011 Source: AllianceBernstein

6. Our Approach to Addressing Key Sponsor Concerns Issue Lifetime Income Strategy Approach Product Concerns that products are too new; can’t take advantage of upgrades Combines age-based investing and GLWBs, neither of which are new, in an open and extensible architecture Fiduciary Extended responsibility, including insurer selection and monitoring Designed to serve as a QDIA; independent fiduciaries can perform insurer selection and monitoring Expense Cost of insurance versus investments Insurance and investments cost structures are different; insurance in-plan can be a fraction of retail costs Communication How to add it to the investment menu; How will participants understand it? Single investment option with a singular focus: secure income Portability Concerns that participants can’t leave plan and preserve benefit, or that sponsor is “locked into” a pack Built to support provider, plan and participant portability Rationale What’s the benefit to the employer? Improved workforce management through a participant-paid benefit As of December 31, 2011 Source: AllianceBernstein

7. Plan Menu Tomorrow? QDIA: Target-Date Funds • 10+ target-date funds • “Pick-a-Date” complexity • Accumulation focused • Not personalized QDIA: Lifetime Income Strategy • Single investment • Completely simple for participants • Accumulation + retirement income • Personalized Lifetime Income Strategy Asset Class Funds Target-Date Funds Asset Class Funds Target-Date Funds Fixed Income Fixed Income Money Market Money Market US Stock US Stock 2045 2045 2050 2050 2000 2000 . . . . . . . . . . . . Target-Date Funds Can Be Good QDIAs, But What’s Next? Illustrative Example of Large DC Plan Menus Plan Menu Today