For plan sponsor use only. Not for distribution to the general public. (c) 2010, ING North America Insurance Corporation. C (08/10) Research in Action: Summary Articles / Text Graphics Talking Points Use this information in proposals, sales material, collateral, etc. Lift and Load text and graphics support sales and marketing initiatives. Compliance approval of this source document does not imply approval of other materials that use this information. Products and services offered through the ING family of companies C ingretirementresearch.com ING studies the economic outlook of todays government workforce Public Employees In Focus

Government workers: A new aspect of retirement research Traditional retirement research has focused somewhat narrowly on the employees of very large corporations, and their behavior and attitudes within 401(k) plans. Not studied – until now – in any degree of depth are the more than 8 million state and local government workers (U.S. Bureau of Labor Statistics, 2008) who have access to similar savings opportunities within the workplace, but whose own situations may be quite different in terms of demographic makeup, pension eligibility, and attitudes and personality. With Public Employees in Focus, ING breaks new ground in our Behavioral Finance understanding of these workers. 1,026 state and local government workers took part in a broad-based Study that looked at the inclinations, preferences, attitudes and personalities of these workers.

Who are government workers? The Government Workforce: Female, lower-paid and older Nearly two-fifths report household incomes of less than $50,000; more than half of less than $75,000 Most are age 35 and older; less than one-fifth are younger than 34 Slightly more are women than men Household IncomeGender Age

What are their personalities? Attitudes and Mindset: Conservative and pessimistic Government workers are personally and financially conservative; they are risk-averse in their personal lives and in their investment philosophy. Protecting their assets is more important to them than high investment growth. They are most concerned about employment / unemployment issues… but they are less pessimistic about our ability to resolve these than they are about other issues. They are generally pessimistic about most issue facing America today. Retirement security, while a top-three issue of highest importance, is also an issue of greatest relative concern, or pessimism. Relater: Good team player, prefer stability to risk, cares greatly about the feelings and needs of others, likeable, not a risk-taker Thinker: Self-controlled and considerate, prefer analysis to emotion Socializer: Outgoing, optimistic, enthusiastic, like to be in the center of things, loves to talk Director: Firm, forceful, confident, competitive, decisive, determined, risk-taker Personal risk takerSelf-assessed personality type

Conservative investment philosophy Aggressive – Willing to accept a high level of risk to possibly achieve high asset growth Moderate – Willing to accept a moderate level of risk to possibly have moderate investment growth Conservative – Want to protect savings and avoid any possible losses Investment Style I dont want to lose money!

Americas issues Top three issues: 1.Employment / unemployment 2.Cost of healthcare 3.Retirement security Most optimistic about 1.Employment / unemployment 2.Military efforts 3.Childhood obesity / American business Most pessimistic about 1.Poverty 2.War on drugs 3.Retirement security Total Optimistic More pessimistic than optimistic… on all issues!

Retirement: Consideration and planning Retirement, for Government employees, is a mixed bag of thinking, planning (or lack thereof), dreaming, and potentially unrealistic expectations. Most – 96% -- say they have given some thought to their retirement income… but almost a third (30%) have never calculated what they will need to retire and another 13% simply dont know. They think a lot about retirement… But they dont spend a lot of time calculating what theyll need….

Retirement: Pension income 71% expect they will receive pensions. Of those who do, they expect that pension to provide (mean) 54% of their retirement income, but many (a third) arent sure how that benefit is calculated. And only half are confident that their pension income will remain unchanged throughout their retirement. Expect a mean of 55% of income from pension A third dont understand calculation Only half are confident 51%

Retirement: Employer Sponsored Retirement Plans (ESRP) Two-thirds have access to an ESRP, and 74% of those are currently contributing… but only half of contributors are happy with the amount they are able to invest… half wish they could save more. 10% are not sure whether or not they are currently investing. Investing in ESRP (of those who have) Happy with investment amount?

Retirement: Choosing not to invest Employees who do not participate in their employer-sponsored savings plan offer a number of reasons (and some misconceptions) … but overall there are three main themes about the decision not to participate: 1.Lack of knowledge / understanding about the plan and its options (10%) 2.They prefer other types of investment / feel they can do better on their own (about a third) 3.Cannot afford to contribute (20%) It's not available to me yet Not offered I do not like the fees and fund choices. Funds are used for daily living costs Know I should - but can barely pay today's bills Prefer to do this on my own. Have personal plans Employer never stressed it I feel it is too risky, does not perform as indicated. I just don't trust someone else messing with my money. Don't know how it works CD's are better investment Right now debt reduction is my biggest concern I do not know what it is. I am new to my current employer. Have participated in the past for years. No matching funds Didn't know that we had it until recently. It's not available to me yet Not offered I do not like the fees and fund choices. Funds are used for daily living costs Know I should - but can barely pay today's bills Prefer to do this on my own. Have personal plans Employer never stressed it I feel it is too risky, does not perform as indicated. I just don't trust someone else messing with my money. Don't know how it works CD's are better investment Right now debt reduction is my biggest concern I do not know what it is. I am new to my current employer. Have participated in the past for years. No matching funds Didn't know that we had it until recently.

Trust: Personal relationships matter Trust is higher in personal relationships than in organizational relationships – even within the workplace, government employees trust their immediate supervisors more than they trust their employers overall (as entities). Not surprisingly, the most personal relationships enjoy the highest levels of trust. Trust in general is closely correlated to trust in matters relevant to the relationship.

Financial confidence: Living on the edge Less than half of government employees are confident that they can deal with an unexpected financial emergency (unsure filtered out)… and while most (56%) say they can save a little for retirement, only 39% think they are saving enough.

Financial confidence: Shaken for many The market decline has shaken these employees confidence in their financial situations. Of those who report that confidence in their ability to meet certain obligations has changed as a result of the decline, most admit that their confidence is lower now. Less than 10% admit higher confidence in any aspect.

Survey methodology 1,026 State and Local Government employees responded to the survey. Government Employees work for state or local government entities. This group EXCLUDES any K-12 educators. Employees included in this study are employed full-time and between the ages of 20 and 70. Quotas were set for Government Employees. Invitations were sent to a representative sample of full- time employees age All responders to the survey invitation, regardless of their study qualification status, were weighted to be representative of full-time employees age This resulted in a representative sample of those who actually qualified for the study and completed the interview. The study was conducted 5/27/10 – 6/1/10. Results are reported at +/-3% at the 95% confidence level. Survey conducted for the ING Institute for Retirement Research through Synnovate © ING North America Insurance Corporation

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Retirement - Insurance - Investments16 1,026 State and Local Government Employees responded to the survey. Government Employees work for state or local government entities. This group EXCLUDES any K-12 educators. Employees included in this study are employed full-time and between the ages of 20 and 70. Quotas were set for Government Employees. Invitations were sent to a representative sample of full- time employees age All responders to the survey invitation, regardless of their study qualification status, were weighted to be representative of full-time employees age This resulted in a representative sample of those who actually qualified for the study and completed the interview. The study was conducted 5/27/10 – 6/1/10. Results are reported at +/-3% at the 95% confidence level. Survey conducted for the ING Institute for Retirement Research through Synnovate © ING North America Insurance Corporation Survey Methodology