Multnomah County March 4, 2004 §457 Deferred Compensation Plan Overview

SST Benefits Consulting & Insurance Services, Inc. 457 Plan Committee Members Dave Boyer, Committee Chair Mindy Harris, Plan Administrator Kathleen Martinez, Deputy Sheriffs Association Representative Kathy Short, County Attorney’s Office Cal Smith, Local 88 Representative

SST Benefits Consulting & Insurance Services, Inc. 457 Plan Partners SST Benefits Consulting –Chuck Sklader Investment Providers –Hartford Life –ING Financial Advisers –PACE Credit Union

SST Benefits Consulting & Insurance Services, Inc. External Influences Small Business Job Protection Act of 1996 Economic Growth & Tax Relief Reconciliation Act or 2001 (EGTRAA) Portability of Retirement Accounts Employee Survey Increased Fiduciary Focus

SST Benefits Consulting & Insurance Services, Inc. Deferred Compensation Committee Goals Comply with Small Business Job Protection Act Exercise Due Diligence / Fiduciary Responsibility Eliminate Deferred Sales / Contingent Fees Reduce Overall Fees Improve Options / Fund Performance Evaluate Ongoing Fund Performance Enhance Service Improve Participation Improve Education

SST Benefits Consulting & Insurance Services, Inc. Request for Disclosure Current Asset Allocation Current Fund Data Current Fee Structure Contingent Deferred Sales Charges Request for Repricing

SST Benefits Consulting & Insurance Services, Inc. Current Landscape ING $ 67,676,800 Hartford $ 17,006,900 PACE $ 2,094,900 TOTAL $ 86,778,600

SST Benefits Consulting & Insurance Services, Inc. Combined Assets by Asset Class Stable Value is a guarantee of principal with a stated interest rate. Large Cap are equity mutual funds that invest in stocks of companies with over $8.7 billion in market capitalization Mid Cap same as large cap, but with a market cap of $1.5 – 8.7 b Stable Value $ 29,222,500 Large Cap $ 31,545,800 Mid Cap $ 4,088,300 Other $ 21,922,000 Total Assets $ 86,778,600

SST Benefits Consulting & Insurance Services, Inc. Fund Data Number of Funds Available ING –65 Total Funds –25 Large Cap Funds Hartford –52 Total Funds –13 Large Cap Funds PACE –1 Fund Total of 118 Fund Options

SST Benefits Consulting & Insurance Services, Inc. Fund Data Analysis & Ratings ING – 4 One Star Funds – 11 Two Star Fund 23% 1 or 2 Star Funds Hartford –3 One Star Funds –8 Two Star Funds 21% 1 or 2 Star Funds Morningstar Rating Legend 5 Star = Top 10% of mutual funds 4 Star = Next 22.5% 3 Star = Next 35% 2 Star = Next 22.5% 1 Star = Last 10%

SST Benefits Consulting & Insurance Services, Inc. Expense Ratios ING Fund Expense Average Was 1.41% Hartford Fund Expense Average Was 1.50%

SST Benefits Consulting & Insurance Services, Inc. Deferred Sales Charges / Fees ING –No Contingent Deferred Sales Charges (CDSC) –5 year Market Value Adjustment (MVA) Hartford –7 year declining CDSC –$130,000 CDSC –5 year MVA PACE –None

SST Benefits Consulting & Insurance Services, Inc. Fiduciary Education Stakeholder Education Established Investment Policy & Procedures Statement

SST Benefits Consulting & Insurance Services, Inc. Goals for Renegotiation Process Improved Investment Lineup Fee Reductions Improved Participant & Committee Education Service Enhancements Reimbursement of County Administrative Expenses Improved Employee Participation

SST Benefits Consulting & Insurance Services, Inc. Fund Analysis and Ratings Before & After ING – Total Funds = 65 –5 Star Funds = 6 ( 9%) –4 Star Funds = 10 (15%) Hartford – Total Funds =52 –5 Star Funds = 5 (10%) –4 Star Funds = 12 (23.5%) –Total Funds = in Current Portfolio –5 Star Funds = 11 (41%) –4 Star Funds = 10 (37%) –Total Funds = 28 7 in Current Portfolio –5 Star Funds = 10 (36%) –4 Star Funds = 14 (50%)

SST Benefits Consulting & Insurance Services, Inc. Significant Savings to Participants Elimination of ING.50% administration charge to zero Reduction of Hartford.50% administration charge to.15%, with future reduction to zero Elimination of Hartford Deferred Sales Charges

SST Benefits Consulting & Insurance Services, Inc. Significant Savings to Participants (cont.) Average Reduction in Participant Fees, Charges and Expenses of 28% Elimination of Participant Deferred Sales Charges of $130,000 Savings to Participants of $199,000 Annually Estimated $1.35 million savings to Participants over 5 Year Contract Period

SST Benefits Consulting & Insurance Services, Inc. Expense Ratios ING Fund Expense Average Reduced from 1.41% to 1.00% Hartford Fund Expense Average Reduced from 1.50% to 1.16%

SST Benefits Consulting & Insurance Services, Inc. Service Enhancements Free, comprehensive financial planning ($500 value) PERS retirement counseling & assistance with applications of retirement benefits Regularly scheduled availability of provider representatives at County locations Increased and expanded participant education Investment advice and guidance, online and in person Increased frequency of one-on-one meetings for new enrollees, current participants and retirees Portability of all retirement accounts

SST Benefits Consulting & Insurance Services, Inc. Multnomah County 457 Plan Enhancements Improved Investment Lineup Fewer Number of Investment Options Simplified Administration Increased Participant Communications Investment Advice Services Improved Education 5 Year Administrative Expense Reimbursement Agreement Retain PACE Adding Enrollment from Other Providers

SST Benefits Consulting & Insurance Services, Inc. Multnomah County 457 Plan Enhancements (cont.) Providers agree to Standards of Performance Due Diligence & Fiduciary Responsibility Significant Reductions of Fund Expense & Charges Plan Document Compliance