1 Schwab Retirement Technologies Schwab RT User Group Meeting May 19, 2010 – Charlotte, NC May 24, 2010 – Phoenix, AZ © 2010 Charles Schwab & Co., Inc. All right reserved.

2 Agenda Product Update Compliance Management Automation Update eDelivery Design Session Questions?

3 Schwab RT Product Update Schwab RT User Group Meeting Ben Lee Director, Product Strategy Schwab Retirement Technologies (Schwab RT)

4 Schwab RT Product Update Agenda  Q1, Q2 accomplishments  Compliance Management Automation Overview  Q3, Q4 development plan  Preliminary project prioritization results

5 Schwab RT – Projects Completed, In Progress (as of May 2010) Q Payroll Trade Automation – feedback from pilot Transaction History download to Quicken (“My Money”) Customize Gadgets on Home page (“My Money”) Data Validation on SchARP (#6) Web Activity Reporting for Sponsors and Advisors Participant Gap Analysis technology integration (Perspective Partners) Q Compliance Management Automation* CMA Dashboard – event and test level progress bar, drill-down details (status, reports, results) Automation: data validation, data sharing, contribution returns, trades, internal user/sponsor notifications and approvals Payroll Funding Request & Notice of Deposit (CSTC)** (#1 Sept Regional; #10) eStatements Source Eligibility Online Enrollment Wizard (#7) vWise Enrollment & Advice integration = Completed, In Progress  = Analysis *Strategic **Schwab Custody/CSTC Integration ***Enhancement

6 Schwab RT – Development Plan Q  Compliance Management Automation*  Compensation by pay date  More Data Validation (#6) Payroll & Census Data Input CMA data correction  Advisor Portal*  IPM Performance Calculator*** (new)  eDelivery – Notifications & Confirms (#8)  On-Demand Sponsor Reports (#2) Q  Compliance Management Automation*  Publish Annual Questionnaire  eDelivery – Notifications & Confirms (#8)  Advisor Portal*  Plan Analytics*** Distribution Automation Outsourcing* (new)  Call Center Update  Audit Report Package (#5) = Completed, In Progress  = Analysis *Strategic **Schwab Custody/CSTC Integration ***Enhancement

7 Schwab RT – Prioritization 401k to Roth Conversion (new) Loan Administration/Online (#2 RK/SchARP; #1 Web) Distribution Administration/Online (#1 RK/SchARP; #6 Web) Replace / Mask SSN (#3 RK) Generic File Upload to SchARP (#7 RK)  Retirement Calculator Gadget (new)  Automatic Savings Increases  Transfer & Investment Election Wizard (#3 Web)  Prospectus–Transfers and Enrollments (#9 Web)  1099s online access** (#2 Web - Sept Regional)  Payroll Funding Request & Notice of Deposit (phase 2)  Schwab Custody ACH Request (new) Schwab Custody Payroll Cash Match Morningstar Advice* RK/ SchARP Web Other = Completed, In Progress  = Analysis *Strategic **Schwab Custody/CSTC Integration ***Enhancement

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9 Compliance Management Automation (CMA) Schwab RT User Group Meeting Ben Lee, Director, Schwab Retirement Technologies Cathy Whisonant, Senior Manager, Schwab Retirement Technologies © 2010 Charles Schwab & Co., Inc. All right reserved. The Compliance Management Automation (CMA) system is designed to provide compliance testing and tracking capabilities for Employee Benefit Plans based on plan criteria and information inputted by the user. Schwab does not provide tax, legal, regulatory or compliance advice or oversight to plan sponsors.

10 Objectives Manage data between Schwab RT and ASC accurately and efficiently Provide oversight and insight for all your plans throughout the compliance testing process Centralize all testing related activities Compliance Management Automation (CMA) – SchARP

11 CMA Steps  Schedule CMA Business Activities  Data Validation – Validates participant data and reports corrections required prior to CMA testing  Share Data - Once data is validated and corrections are approved, data is automatically shared with ASC. Includes the following:  Plan Settings  Participant Census  Participant Financial  Compliance testing performed on ASC (or another software)  Test Results – SchARP updates participant data with test results  Contribution Returns - If violations exist, SchARP processes Contribution Returns  Trades Sent – Orders for violation amounts are created and ready to be exported Report and Publish Recordkeeping Setup - System and Plan CMA Dashboard – Review of all SchARP CMA data

12 CMA User Experience “Automated” Approach 1.Plan Setup – Approval options OFF 2.Start CMA events from CMA Dashboard CMA launches Data Validation and Data Share 3. Run compliance tests in ASC 4. Copy final results to Share location CMA launches Contribution Returns and Generate Trade “Controlled” Approach 1.Plan Setup – Approval options ON 2.Start CMA events from CMA Dashboard CMA launches Data Validation and Data Share 3. CMA User may need to correct and accept Data 4. CMA User approves Data 5. Run compliance tests in ASC 6. Copy final results to Share location 7. CMA User approves test results, per test CMA launches Contribution Returns 8. CMA User approves Returns for each test CMA launches Generate Trades In both approaches, the business activities “Create CMA events” and “CMA File Search” are run daily

13 Compliance Management Automation (CMA) – SchARP

14 CMA Dashboard Status and Progress columns give a clear visual of CMA Event activities Event Name Represent a plan that has selected “Use SchARP for Compliance Management Automation” in Plan Maintenance ID associated with CMA event Test Name Represent each test to track for an event Test ID associated with each test

15 CMA Event and Test Progress Bars For a plan, the CMA event and compliance tests are monitored with two distinct progress bars Event Progress is an overview of the plan’s compliance progress Testing Progress monitors each test separately Testing Progress is represented at the Event Progress level For example, if a test requires CMA User approval, the Event Progress displays “Pending Approval” status

16 Compliance Testing on ASC Once data is shared, the plan is available for compliance testing in ASC Final compliance reports must be saved, using the default file name, in a predetermined location Final compliance test results must be moved to the same location SchARP displays compliance reports and results with the appropriate CMA event and tests for the plan

17 CMA Dashboard – Test Details Test results are tracked for the ADP/ACP, Top Heavy and HCE tests ADP/ACP and HCE update participant data Test refunds are tracked for the ADP/ACP, 402g, and Annual Additions tests and update participant data CMA Contribution Returns step is launched to process refunds for participants Reports, results and refund information are available on SchARP CMA Dashboard Compliance Test Reports Contribution Returns / Batch Summary Results/Return test files

18 Compliance Management Automation (CMA) - Key Benefits New SchARP CMA Dashboard to monitor plan progress during compliance testing Eases the use of a third party compliance test vendor, specifically ASC Allows TPA to set up approvals at various steps in the CMA process Automated data validation helps ensure correct test data is shared and used in compliance testing Automated Contribution Returns processes participant violations after each test or all at once, based on plan setup Test reports and result files are available on the SchARP CMA Dashboard

19 Upcoming Additions to CMA Final Payroll Determination to launch CMA Event Questionnaire – Generate and publish annually Pre-populate with responses from last year Sponsor can change or accept with no change Enhanced Plan Sponsor Web Notification and Approval of Data and Test Results Publish Compliance Reports Data Correction and Submission Compensation Tracking per Payroll Ability to capture and report compensation for each participant per payroll Report total annual compensation for plan year and compensation for pre-entry period for testing and allocations

20 eDelivery Notifications & Confirms Schwab RT User Group Meeting Lisa Adams Director, Schwab Retirement Technologies

21 Why eDelivery? Recent Projects: Plan Sponsor eNotifications: Document Publishing Payroll Monitoring and notifications Compliance Management Automation Participant eNotifications: eStatements

22 Questions? The Charles Schwab Corporation provides services to retirement plans and participants through its subsidiaries: Charles Schwab & Co., Inc. (Member SIPC), Charles Schwab Trust Company, a division of Charles Schwab Bank, Schwab Retirement Plan Services, Inc., Schwab Retirement Plan Services Company and Schwab Retirement Technologies, Inc.® (Schwab RT). Schwab RT is engaged in developing and licensing proprietary retirement plan recordkeeping systems to independent Third Party Administrators. ©2010 Schwab Retirement Technologies, Inc. All rights reserved.