1. Achieving Financial Success: Small Steps for a Bigger Retirement

2. A fee-only approach to retirement and investment services TCG Group of Companies

3. Region 10 RAMS Includes 292 plans across Texas with over 230,000 participants Investment Advisory Committee (IAC) 457(b) Tax-Deferred Savings Plan – Voluntary, pretax deferrals from paycheck – Closest governmental equivalent to 401(k) TERRP (Teacher/Employee Recruitment and Retention Program) – 401(a) plan 457 FICA Alternative Plan – Part-time or substitute 403(b) Third Party Administration

4. TRS PENSION & THE INCOME GAP

5. TRS Retirement vs. Corporate Retirement Income in retirement is very different for Texas teachers than it is for their spouses and neighbors (and financial advisors) Teacher Neighbor Source: Region 10 Education Service Center

6. TRS Vesting Vesting Schedule Yrs of Service Age 5 65 20 60 30 50 TRS Members after 9/1/2007 — Minimum age 60 to retire and receive unreduced benefits UPDATE: Current Members as of 8/31/2014 — If you are not Vested (5 years) — Minimum age 62 to retire and receive unreduced benefits

7. TRS Retirement Formula Years of Service (x) State Factor 2.3% (x) Average 3/5 Highest Years of Income Years of Service: 30 State Multiplier (2.3%): 69 % Average Income: $60,000 Maximum Benefit: $41,400

8. Sample TRS Form

9. Retirement Age: 60 Service: 30 Years Last Year / High 3 Yr. Salary: $60,000 (Full TRS benefit with 2.3 Multiplier with no survivor benefit ) $60,000 $41,400 31 Retire at Age 60 Gross Income TRS Retirement Formula

10. The Target Savings Amount Investment Needed to Replace Difference of $18,600 Annually (TRS Benefit vs. Pre-Retirement Income): $300,224* *Assumptions include a lump sum invested at 5% interest, with annual amount paid at beginning of each year for 30 years. This rate is assumed for illustration purposes only and is not guaranteed.

11. Taking Aim at the Target Assumes an 6% annual return after fees and expenses for illustration purposes only, not guaranteed. Years of Savings Monthly Contribution 40$150.01 30$297.39 20$646.55 10$1,822.87

12. Maximizing TRS Increase Salary — Good Luck! Increase Years of Service Credits – Work longer – Purchase Service Credits Types of Service Credits – Withdrawn, Out-of-State, Military, Unreported or Substitute, etc. Cost varies depending on type of service Contact TRS for cost estimate

13. Types of Service Credits Contact TRS for Actual Cost Withdrawn Service  Cost: Amount withdrawn plus 8% annual interest Unreported & Substitute Service  Cost: Actuarial cost Military Service  Purchase up to 5 years  Cost basis dependent on when military time was served (+) 8% annual interest Out-of-State Service  Cost: Actuarial cost

14. Out-of-State Service Purchase May purchase 1 year of service credit for each year earned under TRS — up to 15 years  If the service used will also be used for a pension in another retirement system, then the service purchase is limited to 5 years Estimated cost can be obtained by going to your MyTRS account

15. Inflation vs. State Retirement Income TRS does NOT have Cost of Living Adjustments (COLA) Inflation vs. TRS Income TRS @ 1.0% Growth Inflation @ 3.0% Growth Hypothetical illustration showing the potential growth of an employee’s TRS income at 1% as compared to the same income increased by an estimated 3% inflation growth.

16. Comparison: 403(b) & 457(b) Plans Feature403(b)457(b) Individual vs. Group PlanMost have higher fees, pay commission/sales loads. Limited number of no commission options Low fees relative to most 403(b) plans; no commissions, full disclosure of fees Penalty to withdraw fund (+ income tax) 10% (goes away at age 59½ or age 55 and retired) None Investment OptionsFixed/Variable Interest Annuities or Mutual Funds/Custodial Accounts Fixed Annuity or Self-Directed Mutual Funds Access to FundsTermination of Employment, Death, Disability, Retirement, Age 59½ (even if still employed), Hardship or Loans Termination of Employment, Death, Disability, Retirement, Unforeseeable Emergency (no access at age 59½ ) or Loans Investment Committee/Advisor Oversight NoYes Contribution Limits (can contribute to both plans) 2016: $18,000; $24,000 age 50+ Roth AccountsAvailable

17. What Are These??? 403(b), 457, 401(k), IRA... Sections of the Internal Revenue Code that created different kinds of retirement plans They are like a Shield to protect your Investments from Taxes Don’t confuse the Shield with the Investments Important Note: There is no total escape from taxes. No matter which plan you use, you will eventually pay some taxes. However, the impact of taxes is usually much less with a tax deferred plan. Remember that all investing involves risk.

18. Preparing for the Gap Example of Investing $1,000 After-Tax Account 403(b)/457(b) Earnings $1,333.00$1,333.00 Taxes (25%) ($333.00) $0.00 Actual Investment $1,000.00$1,333.00 6% Interest* $60.00 $80.00 Taxes (25%) ($15.00) $0.00 TOTAL$1,045.00 VS.$1,413.00 TOTAL$1,045.00 VS.$1,413.00 That is an extra $368.00 working for you *Hypothetical assumed earnings rate. Your actual earnings rate will depend on your investments. All investing involves risk. Taxes will be due on the 403(b)/457(b) plan when withdrawn.

19. Market Movements — Good or Bad? Investing $200/mo Month $/Share # Shares Jan1020.0 Feb10.519.05 Mar1118.18 Apr11.517.39 May1216.67 Jun12.516.0 Jul1315.38 Aug13.514.81 Sep1414.29 Oct14.513.79 Nov1513.33 Total Shares Owned 178.90Total Account Value $2,683.48 Remember that all investing involves risk.

20. Market Movements — Good or Bad? Investing $200/mo Month $/Share # Shares Jan1020.00 Feb922.22 Mar825.00 Apr728.57 May633.33 Jun540.00 Jul633.33 Aug728.57 Sep825.00 Oct922.22 Nov1020.00 Total Shares Owned 298.25 Total Account Value $2,982.54 11.14% Increase in Account Value Remember that all investing involves risk.

21. YOUR DISTRICT’S RETIREMENT SAVINGS PLANS

22. RAMS Investment Advisory Committee Meets every quarter to review investments and all matters of the plan Made up of representatives from participating districts TCG Advisors does research for and gives suggestions to the IAC The IAC has authority to replace underperforming investments

23. Region 10 ESC — 457(b) Retirement Savings Plan Providers selected through a competitive process High quality no-load and load-waived mutual funds Education provided by a financial advisor Full disclosure of fees No surrender charges or other penalties to transfer funds Fiduciary protection Managed portfolio or self-directed investment options Remember that all investing involves risk.

24. RAMS Plan Investments 15+ Mutual Funds: Choose own allocation – High Quality, No-Load and Load-Waived – Low Cost Funds 6 Model Portfolios — No Additional Fees – Signature Portfolio – Preservation – Conservative – Moderately Conservative – Growth – Aggressive Growth Remember that all investing involves risk.

25. Portfolio Options Remember that all investing involves risk.

26. 403(b) Tax-Deferred Savings Plan Voluntary, pretax deferrals from paycheck Governmental equivalent to 401(k) Big Changes 1/1/2009 – New IRS Regulations – Require District to: Administer Plan according to a Written Plan (Document) – All Rules must be in Written Plan Oversee all Plan transactions – Distributions, Loans, Transfers, etc. District has contracted with ESC Region 10 to provide administration

27. 403(b) Tax-Deferred Savings Plan Third Party Administrator is TCG Administrators (formerly known as JEM Resource Partners) Can conduct all business (enroll, make changes, obtain approval for distributions): www.region10rams.org Call (800) 943-9179 or email 403b@region10rams.org403b@region10rams.org Choose from Vendors that meet 2 criteria – On TRS Approved List; and – Meet District Rules Must agree to terms of 403(b) Written Plan Must provide data to TPA electronically

28. 4 Easy Steps to Start Saving 1. Decide how much to save from each paycheck 2. Determine your risk tolerance 3. Decide which retirement savings plan (403(b), 457, or both) will help meet your retirement goals 4. Enroll in a plan a) Go to www.region10rams.orgwww.region10rams.org b) Contact a JEM representative for help Remember that all investing involves risk.

30. Abuses in Educator Retirement Investments Excessive Hidden Fees Inappropriate Types of Investments Lack of Monitoring of Investments Remember that all investing involves risk.

31. Possible Schemes Life Insurance as an Investment Pension Maximization – Taking the Standard Annuity and buying life insurance with the “savings” – Insurance company may raise rates – Death benefit needed is usually much higher Annuity Riders Take Lump Sum, Invest, and Beat the State Retirement System

32. Partial Lump Sum Option (PLSO)  Possible Reasons to Do  Poor Health  Estate and Critical Need for Heirs (e.g., disabled child)  Other Estate Needs — Guarantees money to heirs instead of reversion to retirement system at death  No Savings Going into Retirement  High Debt  Reasons Not to Do  You will not be able to invest the money and beat the Retirement System Pay Actuarial Cost for funds; Usually have to earn minimum Net 11.00% if try to match State — Can you do this with no risk??  You have not planned for inflation and budget in retirement, so your income runs short later  You will be tempted (and give in) to spend the money you planned to save PLSO: TRS allows you to receive 1, 2 or 3 years of your pension up front. Then reduces your monthly annuity by 10% per year received for the rest of your life. Remember that all investing involves risk.

33. Shadow Marketing SEC Snoozed as “Shadow Marketers” Skimmed Billions From Retirement Plans – Forbes Magazine, Feb. 3 rd, 2011, Author: Edward Siedle Nationwide Financial Services and National Association of Counties – Nationwide disclosed on website it was paying NACo $7.3M in 2007 to push products – Exec Dir said relationship went back to early 1980s ING and NYSUT (teachers union) – Marketing to 50,000 teachers making payments up to $3M to union Nationwide Retirement Solutions (NRS) and Alabama state employees association – 2010 NRS entered into settlement of $16M – Paid association $11.8M in fees and commissions, including trips CGU Life Insurance – $8.1M 2002 settlement in a class action involving 14,000 Texas teachers

34. The Fee Effect Annual FeeBalance 1%$82,549.26 2%$73,599.44 3%$65,824.55 4%$59,057.63 5%$53,156.51 6%$48,000.00 Balance based on 6% earning net of fees with $200 monthly contributions for 20 years at the beginning of the month. Actual rate of return is not guaranteed and is for illustration purposes only. Remember that all investing involves risk.

35. Excessive Fees  12b-1 Fee  Generally allows distributors to compensate broker/dealers and representatives for selling their funds. It also can be a charge to cover marketing and distribution costs of the investment.  Withdrawal Charge (a.k.a. Surrender Charge)  A fee charged by some annuities and funds when an investor takes money out of his or her account.  Mortality and Expense Fee (M&E)  This applies to some types of annuities and covers insurance related costs.  Transfer Fee  This is an amount charged by a fund to transfer either within the fund family or to another company.

36. Excessive Fees  Expense Deductions  Charges for investment management, administration and distribution services.  Management Fee  Also called the investment advisory fee, this represents the company’s cost for managing the money in the fund.  Wrap Account Fee  Charged by some types of funds for fund management, this is an annual percentage of the investor’s assets in the account.  Custodial Fee  The charge for safekeeping or physically holding the securities in the fund.

37. SOCIAL SECURITY ISSUES

38. Remember your TRS Annuity is never reduced by Social Security!

39. Social Security Considerations 2 Regulations Government Pension Offset (GPO) – Applies to member’s SPOUSAL Social Security benefits – (SSA Pub No. 05-1007) Windfall Elimination Provision (WEP) – Applies to member’s OWN Social Security benefits – (SSA Pub No. 05-10045) www.ssa.gov – Periodically bills are filed to repeal GPO and WEP at Federal level — very costly to repeal

40. Government Pension Offset: SPOUSAL BENEFIT You are eligible for your spouse’s benefit if you retire from an SS-covered and TRS-covered position The “LOOP-HOLE” closed July 1, 2004 Old Law: You were employed by an SS-covered District on your last day of employment Current Law: You have to be employed by an SS- covered District for your last 60 months to be eligible This law uses a two-thirds offset rule Two-thirds of your TRS Annuity benefit will be subtracted from your spousal SS benefit

41. GPO Example: SPOUSAL BENEFIT  TRS Pension — $2,100  Spousal SS Benefit — $1,000  Subtract 2/3 of TRS benefit from eligible SS benefit SS Benefit $1,000 — (2/3 of $2,100) - $1,400 = - $ 400 TRS Member is not eligible for spousal benefit, but receives full TRS annuity  TRS Pension — $2,100  Spousal SS Benefit — $1,600  Subtract 2/3 of TRS benefit from eligible SS benefit SS Benefit $1,600 — (2/3 of $2,100) - $1,400 = $ 200 TRS Member is eligible for spousal benefit of $200 plus full TRS annuity

42. Remember your TRS Annuity is never reduced by Social Security!

43. Windfall Elimination Provision: YOUR BENEFIT Does NOT reduce TRS Pension Benefit Effects employees who are eligible for their OWN government/state pension and Social Security Uses a factor to calculate your SS benefit income based on ‘Years of Substantial Earnings’ Different than ‘Service Credits’ under SS

44. SS Service Credits vs. Years of Substantial Earnings Service Credits under Social Security – Eligible for 4 credits per year – Total of 40 credits to qualify for a benefit – For 2016, received 4 credits if earned $5,040 Year of Substantial Earnings – Higher income number May accumulate all Service Credits under SS without earning Years of Substantial Earnings

45. Your Estimated Benefits *Retirement:To get retirement benefits, you need 40 credits of work. Your record shows you have at least 22 credits at this time, including assumed credits for last year and this year if you continue to work. *Disability:To get benefits if you become disabled right now, you need 28 credits of work. Your record shows you have at least 22 credits at this time.

46. Windfall Elimination Provision: YOUR BENEFIT Year Substantial earnings 1968–1971 $1,950 1972 $2,250 1973 $2,700 1974 $3,300 1975 $3,525 1976 $3,825 1977 $4,125 1978 $4,425 1979 $4,725 1980 $5,100 1981 $5,550 1982 $6,075 1983 $6,675 1984 $7,050 1985 $7,425 1986 $7,875 1987 $8,175 1988 $8,400 1989 $8,925 1990 $9,525 1991 $9,900 1992 $10,350 1993 $10,725 1994 $11,250 1995 $11,325 1996 $11,625 1997 $12,150 1998 $12,675 1999 $13,425 2000 $14,175 2001 $14,925 2002 $15,750 2003 $16,125 2004 $16,275 2005 $16,725 2006 $17,475 2007 $18,150 2008 $18,975 2009 $19,800 2010 $19,800 2011 $19,800 2012 $20,475 2013 $21,075 2014 $21,750 2015 $22,050 Years of substantial earnings Percentage 30 or more 90 percent 29 - 85 percent 28 - 80 percent 27 - 75 percent 26 - 70 percent 25 - 65 percent 24 - 60 percent 23 - 55 percent 22 - 50 percent 21 - 45 percent 20 or less 40 percent* *Actual Reduction cannot be greater than 50% and maximum amount of reduction is $413 for 2015

47. Your Earnings Record

48. Remember your TRS Annuity is never reduced by Social Security!

49. IMPORTANT TRS RULES YOU NEED TO KNOW

50. Normal Retirement Age and COLIs All New Members on or after 9/1/2014  Minimum unreduced retirement age to 62 – Still have to meet Rule of 80 and at least 5 years of service – Early Retirement Reduction — 5% per year before age 62 All Vested Members (5 years of service) as of 8/31/2014 are exempt from this rule Cost of Living Increases (COLI) to Retirees  Lesser of 3% or $100 for retirees who retired on or before 8/31/2004  Only if TRS is actuarially sound

51. Member Contributions State — 6.8%  Must stay at 6.8% or District and Member rates drop Members  7.2% 9/1/2015  7.7% 9/1/2016  +.65% TRS Care Districts —1.5%

52. TRS Computation Year & PLSO 9/1 – 8/31 for All Districts and All Positions Year of Service = 90 Work Days in a School Year  Exception in Year of Retirement — 1 Semester in School Year Partial Lump Sum (PLSO) Eligibility  5 Year Average — Rule of 90  3 Year Average — Rule of 80

53. Return to Work After Retirement Return to Work in TRS Covered Position with No Penalty  If Retire and Out of TRS Covered Work for 12 Consecutive Months from Retirement Date  Surcharge for Hiring Retirees Still Must be Paid Can also return to work and not lose annuity if work ½ time  But will result in your having to re-start the 12 month waiting period to qualify for the permanent 12 month exception

54. Return to Work Old Exceptions No Longer Apply – One-half time or less – Substitute – Substitutes + One-half time – 6 Month Exception – Acute Shortage Area – Principal or Assistant Principal – Bus Driver

55. Compensation in Last Year of Employment New Rule 2016 In the year you retire, if you are on a July 1 contract year, you may be able to get the greater of – Your compensation from July 1 – June 30; or – Your compensation from September 1 – August 31 – Thus, you may be able to retire June 30 without “truncating” your final year of compensation Rule is complex and requires some analysis or contact TRS See New TRS Handbook as of 1/1/2016 page 24

56. Is TRS Stable and Safe? Is it the Best Way to Provide Retirement for Educators?  Yes  System is over 80.2% funded  System is actuarially sound and can pay benefits through 2075 with no additional funding  System is mandated and governed by the Texas Constitution  TRS is also the most efficient system for providing pension benefits Source: TRS Comprehensive Annual Reports August 31, 2013 and 2014, TRS Pension Benefit Design Study 9/1/2012, and TRS publication “A Great Value for All Texans”

57. WHAT CAN I DO TO PREPARE?

58. TRS Annuity Options  Standard Annuity  Maximum benefit for retiree’s life only  Option 1: 100% Joint Survivor  Reduced annuity, payable for retiree’s life with continuous payments for beneficiary’s life. If beneficiary pre-deceases, retiree’s annuity is increased to standard annuity amount  Most common, typically 8-13% reduction from Standard Annuity  Option 2: 50% Joint Survivor  Reductions range from 4-8% based on same age beneficiary  Option 3: 60 Month Period Certain  Reduced annuity, payable for retiree’s life with annuity payments guaranteed for a minimum of 60 months  If retiree dies before 60 th payment, beneficiary will receive the remaining payments  Typically 1-2% reduction from Standard Annuity  Option 4: 120 Month Period Certain  Typically 1-4% reduction from Standard Annuity  Option 5: 75% Joint Survivor  Reductions range from 6-12% based on same age beneficiary

59. Longevity Risk How long will I need retirement income? Source: Murray, Nick. “The Exponent of Life Expectancy “Financial Advisor magazine, Mar. 2007:p43.

60. Retirement Checklist Become educated – Consult handbook, online tools & videos or visit counselor Contact TRS 6 months prior to retirement date to submit a request for an estimate and packet – TRS Form 18 – Verify & complete any service purchase options Complete documents and submit copies of birth records for you and beneficiary – TRS Form 30 Retirement Date Payment Options Beneficiary Designation

61. Retirement Checklist Evaluate TRS-Care Options Terminate employment by effective date Collect Pension – 1 st payment is due the 1 st business day of the month following first calendar month of retirement – Example: May 31 st retirement, June wait, July 1 st (or first business day) check arrives.

62. Steps to Success Know your goals! – How much will I need? – Who do I need to provide for? Spouse, Children, Parents, Charities, etc. – Any other quantifiable goals? Choose portfolio allocation designed to achieve investment return needed – Only take the risk you need to meet the goal Monitor your investments — are they performing? Choose investments to meet goals! Retirement planning is a process not an event! Remember that all investing involves risk.

63. THANK YOU 900 South Capital of Texas Highway, Suite #350 Austin, Texas 78746 (512) 306-9939 www.TCGgroupholdings.com advisors@tcginvestments.com Mike Cochran Chris Jamail, CFP ® Blake Rhodes, CFP ®, AIF ® Tyler Webster

64. IMPORTANT DISCLOSURES TCG Advisors, LP is a registered investment advisor regulated by the U.S. Securities and Exchange Commission (SEC), subject to the Rules and Regulations of the Investment Advisor Act of 1940. Registration does not imply a certain level of skill or training. TCG Advisors, LP is a part of TCG Group Holdings, LLP. TCG Group Holdings, LLP, owns and operates several other entities which provide various services to employers across the U.S. Those affiliates (wholly ‐ owned subsidiaries of TCG Group Holdings, LLP) sometimes provide services to TCG Advisors’ Clients. These affiliates are Total Compensation Group Consulting, LP; TCG Administrators, LP (f/k/a JEM Resource Partners, LP); TCG Benefits (f/k/a The Paragon Group, LP; Paragon National, LP; and Paragon Benefits, LP, collectively). The business activities of these companies are discussed in its ADV Part IIA. TCG Advisors is located in Austin, Texas, and a copy of its Form ADV Part II is available upon request. This presentation is not authorized for use as an offer of sale or a solicitation of an offer to purchase investments in any of the plans discussed or an affiliated entity. An investment in the plans carries the potential for loss. This presentation is for informational purposes only and does not constitute an offer to sell, a solicitation to buy, or a recommendation for any security, or as an offer to provide advisory or other services in any jurisdiction in which such offer, solicitation, purchase or sale would be unlawful under the securities laws of such jurisdiction. Past performance may not be indicative of any future results. No current or prospective client should assume that the future performance of any investment or investment strategy referenced directly or indirectly in this report will perform in the same manner in the future. Different types of investments and investment strategies involve varying degrees of risk—all investing involves risk—and may experience positive or negative growth. Nothing in this presentation should be construed as guaranteeing any investment performance.

65. IMPORTANT DISCLOSURES CONT. An investment in the plans discussed will involve a significant degree of risk, and there can be no assurance that the investment objectives will be achieved or that an investment therein will be profitable. The hypothetical performance presented herein reflects the reinvestment of dividends and other earnings, the deduction of all management fees, performance-based allocations, brokerage fees and other expenses applicable to the Fund. Investors will experience individual returns that vary materially from those illustrated in this presentation depending on various factors, including but not limited to, the timing of their investment, the level of fees, and the effects of additions and withdrawals from their capital accounts. Certain of the performance information presented herein are unaudited estimates based upon the information available to the Firm as of the date hereof, and are subject to subsequent revision as a result of the Fund’s audit. Past performance is not necessarily indicative of the future performance or the profitability of an investment in a plan. An investment in a plan will be subject to a wide variety of risks and considerations as detailed in the offering documents. The information set forth herein will be qualified in its entirety by the information set forth in the offering documents. This presentation includes forward-looking statements. All statements that are not historical facts are forward-looking statements, including any statements that relate to future market conditions, results, operations, strategies or other future conditions or developments and any statements regarding objectives, opportunities, positioning or prospects. Forward-looking statements are necessarily based upon speculation, expectations, estimates and assumptions that are inherently unreliable and subject to significant business, economic and competitive uncertainties and contingencies. Forward-looking statements are not a promise or guaranty about future events.

66. IMPORTANT DISCLOSURES CONT. The projections or other information generated herein regarding the likelihood of various investment outcomes are hypothetical in nature, do not reflect actual investment results and are not guarantees of future results. Hypothetical performance results have many inherent limitations. No representation is being made that any account will or is likely to achieve profits or losses similar to those shown. There are frequently substantial differences between hypothetical performance results and the actual results subsequently achieved by any particular trading program.