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Rebuilding

IIS Conference, 8 June 2010

Larry Zimpleman, Chairman, President,

and Chief Executive Officer

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Impact of the Recession

on World Economies

2

Freezing Up of world economies in late 2008/early 2009

Re-Build of World Economies is happening at differentrates

Asia leads the way China,Australia, India, ASEAN

Latin America continues tomove forward Chile, Brazil

USA is having slow butsteady recovery

Europe and Japan arelagging

IMF, World Bank, CIA Factbook, 2009 and 2010 estimates

Real GDP Growth (Annual Percent Change)

-10

-5

0

5

10

15

2007 2008 2009 2010

Australia and New Zealand

Brazil

China, People's Republic of

Germany

India

Japan

Mexico

Spain

Thailand

United Kingdom

United States

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Impact of the Recession in the U.S.Workers with less than $10,000 in Savings

36%

43%

39%

33%

37%

41%

45%

2009 2008 2007

3

Closer to Retirement butwith depleted savings

Average deferral rates are

6-7% but need to behigher

Asset Allocation mismatch 27% of participants aged 56-65 have at least 90% ofportfolio in Equities

Employee Benefit Research Institute, Profit Sharing Council of America, Bloomberg

% of Portfolio Exposed to Equities for Participants

Aged 56-65

27%

11%

10%

52%

> 90% 90-80% 70-80% < 60%

27% of participants aged 56-65 have at least 90% of their portfolio in Equities

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Impact of the Recession in the U.S.

4

Baby Boomers are getting back to even

2007 401(k) Account Balances: Tabulations from EBRI/ICI Participant-Directed Retirement Plan Data Collection

Project; 2008 and 2009 Account Balances: EBRI estimates. The analysis is based on all participants with accountbalances at the end of 2007 and contribution information for that year.

Change in Average Account Balances (by Age and Tenure)

From Jan 2008 to Dec 2009

-10%

10%

30%

50%

70%

90%

110%

1 to 4 100.9% 72.6% 54.9% 46.7%

5 to 9 53.9% 22.0% 15.1% 13.8%

10 to 19 10.8% 3.1% 2.2%20 to 29 -1.8% -2.9%

25-34 35-44 45-54 55-64

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Impact of the Recession in the U.S.

5

Average person has$70,970 balance in 2009,compared to $79,570 in2007

Cant rely on equity

markets alone

Return to S&P 500 in2009 was 23%

Will be difficult to repeatin slow growthenvironment

Profit Sharing Council of America, Bloomberg, Hewitt

Average 401(k) balance

$70,970

$79,570

$68,000

$72,000

$76,000

$80,000

2009 2007

Average Social Security payment around $1,000/month

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Growth ofmiddleclasses inlarge core

emergingmarkets

Top 7Nationsshifting tomiddleincome

Goldman Sachs, UN World Report, CIA FactBook, IBGE, Deutsche Bank, McKinsey, ADB, Chulalongkorn Univ, Central Bureau of Statistics and estimates

Middle Class Population Growth

612 583

135122 84

0

100200

300

400

500

600

700

China India SE Asia Brazil Mexico

SE As ia includes Indonesia, Malaysia, and Thailand

populationinmillions

2008

2025

How do we address the Retirement Shortfall?

6

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Most customers simply want professional

help - Do It For Me

7

Can get theeducation how theywant it

Blended portfoliosappropriate to ageor risk tolerance

Focus on adequate

levels of savings,NOT 6-7%

Hewitt indicates 15.7x salary needed: 4.7x from SocialSecurity, 13.3x from savings and 401k, gap of 2.4x

Hewitt, May 2010

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Help Me Do It Myself for a smaller portion ofcustomer base

8

Allow customersto pick theirallocation, let itage with them,

rebalance, staystatic or anycombination

Use third partyadvisor forinvestmentadvice

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Simple, Understandable Message

9

Focus on customers need for help

Message from customers - Do NOT start with Products

Awareness, Education, Guidance, Solutions

41%

10%

36%

13%

24%

18%

28%30%

0%

10%

20%

30%

40%

50%

Neither work

longer nor save

more

Save more only Work longer only Save more and

work longer

Initial response to downturn Response to downturn after receiving advice

Center for Retirement Research at BC, Feb 2010, Sass, Monk, Haverstick

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Client Focus

10

Bundled Packaged Solutions

Target Date or Target Risk Solutions

Transparent, Simple Design

Addresses clients lack of deep financial sophistication

Invest in Knowledge Transfer to Distribution

Make the financial advisor the expert

Center for Retirement Research at BC, Feb 2010, Sass, Monk, Haverstick

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Rebuilding Message works around the World

11

Makes us recognize the importance of a global strategy

No markets were spared

Although some performed better than others

Concept of Rebuilding financial assets is appropriateeverywhere

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Rebuilding Message Resonates

12

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Thank you!

13

http://www.youtube.com/watch?v=zrC8DC1vl-s

http://www.youtube.com/watch?v=zrC8DC1vl-shttp://www.youtube.com/watch?v=zrC8DC1vl-shttp://www.youtube.com/watch?v=zrC8DC1vl-shttp://www.youtube.com/watch?v=zrC8DC1vl-s