4. How did we get to 408(b)(2)?

8. The Fee Transparency Timeline Form 5500 Effective 1/1/09 408(b)(2) Interim Final 7/10/10 404(a)(5) Final Reg 10/20/10 408(b)(2) Takes Affect 4/1/12 404(a)(5) Takes Affect 6/1/12 ERISA §408(b)(2) is designed to increase fee transparency

9. What is Regulation 408(b)(2)?

12. Let’s Run An Analysis for the Broker-Dealer “Free” Plan

14. SITUATION ANALYSIS Current Plan’s Fee Schedule of Services COMPANY: XYZ & Son Manufacturing, Inc. Annual Administration: No Charge Annual Recordkeeping Per Participant: No Charge Broker Fee: Paid from 12b-1 Fee Mutual Fund Expense: See schedule

15. SITUATION ANALYSIS Current Plan – Example Fund From Portfolio American Balanced Fund (% as of 6/30/11) Cash: 8.60% U.S. Stocks: 57.90% Non-U.S. Stocks: 6.40% Bonds: 27.00% Other: 0.10% 100.00%

16. SITUATION ANALYSIS Current Plan – Share Class Selected American Balanced Fund Share Class / Target Ticker Expense Ratio R-1 RLBAX 1.40% R-2 RLBBX 1.40% R-3 RLBCX 0.94% R-4 RLBEX 0.65% R-5 RLBFX 0.35% R-6 RLBGX 0.30%

17. SITUATION ANALYSIS What are the fees and expenses hidden inside the fund and in this particular share class?

18. SITUATION ANALYSIS Current Plan – Share Class Selected American Balanced Fund Included in Expense Ratio Share Class / Target Ticker Expense Ratio Mngmnt Fee 12b-1 Fee Sub-TA Fee R-1 RLBAX 1.40% 0.24% 0.99% 0.10% R-2 RLBBX 1.40% 0.24% 0.75% 0.25% R-3 RLBCX 0.94% 0.24% 0.50% 0.15% R-4 RLBEX 0.65% 0.24% 0.25% 0.10% R-5 RLBFX 0.35% 0.24% none none R-6 RLBGX 0.30% 0.24% none none

19. SITUATION ANALYSIS Let’s Reveal The Hidden Costs of the Fund American Balanced Fund Included in Expense Ratio Share Class / Target Ticker Expense Ratio Mngmnt Fee 12b-1 Fee Sub-TA Fee R-3 RLBCX 0.94% 0.24% 0.50% 0.15% Plan Costs under Broker-Dealer Scenario Costs % of Plan Assets Administration & Recordkeeping $0 0.00% Investment $94,000 0.94% Total $94,000 0.94%

20. SITUATION ANALYSIS Let’s Reveal The Hidden Costs of the Fund American Balanced Fund Included in Expense Ratio Share Class / Target Ticker Expense Ratio Mngmnt Fee 12b-1 Fee Sub-TA Fee R-3 RLBCX 0.94% 0.24% 0.50% 0.15% Share Class Ticker Fund Expense Mngmnt Fee 12b-1 Fee Sub-TA Fee R-3 RLBCX $94,000.00 $24,000.00 $50,000.00 $15,000.00

21. SITUATION ANALYSIS Let’s Reveal The Hidden Costs of the Fund American Balanced Fund Total Cost: $94,000 or $470 per participant Included in Expense Ratio Share Class / Target Ticker Expense Ratio Mngmnt Fee 12b-1 Fee Sub-TA Fee R-3 RLBCX 0.94% 0.24% 0.50% 0.15% Share Class Ticker Fund Expense Mngmnt Fee 12b-1 Fee Sub-TA Fee R-3 RLBCX $94,000.00 $24,000.00 $50,000.00 $15,000.00

22. SITUATION ANALYSIS The Broker-Dealer has NO FIDUCIARY LIABILITY OR RESPONSIBILITY .

23. Let’s Run An Analysis When An Registered Investment Adviser (As A Fiduciary)

24. SITUATION ANALYSIS RIA’s Fee Schedule of Services COMPANY: XYZ & Son Manufacturing, Inc. Annual Administration: $3,000 Annual Recordkeeping Per Participant: $50/per RIA Flat Fee: $25,000 Mutual Fund Expense: See schedule

25. SITUATION ANALYSIS RIA Plan– Proper Share Class Selected American Balanced Fund Included in Expense Ratio Share Class / Target Ticker Expense Ratio Mngmnt Fee 12b-1 Fee Sub-TA Fee R-1 RLBAX 1.40% 0.24% 0.99% 0.10% R-2 RLBBX 1.40% 0.24% 0.75% 0.25% R-3 RLBCX 0.94% 0.24% 0.50% 0.15% R-4 RLBEX 0.65% 0.24% 0.25% 0.10% R-5 RLBFX 0.35% 0.24% none none R-6 RLBGX 0.30% 0.24% none none

26. SITUATION ANALYSIS RIA Plan– Proper Share Class Selected American Balanced Fund Included in Expense Ratio Share Class / Target Ticker Expense Ratio Mngmnt Fee 12b-1 Fee Sub-TA Fee R-1 RLBAX 1.40% 0.24% 0.99% 0.10% R-2 RLBBX 1.40% 0.24% 0.75% 0.25% R-3 RLBCX 0.94% 0.24% 0.50% 0.15% R-4 RLBEX 0.65% 0.24% 0.25% 0.10% R-5 RLBFX 0.35% 0.24% none none R-6 RLBGX 0.30% 0.24% none none

27. SITUATION ANALYSIS Current Plan – Share Class Selected American Balanced Fund No Hidden Fees Plus Lower Costs for Shares. Included in Expense Ratio Share Class / Target Ticker Expense Ratio Mngmnt Fee 12b-1 Fee Sub-TA Fee R-1 RLBAX 1.40% 0.24% 0.99% 0.10% R-2 RLBBX 1.40% 0.24% 0.75% 0.25% R-3 RLBCX 0.94% 0.24% 0.50% 0.15% R-4 RLBEX 0.65% 0.24% 0.25% 0.10% R-5 RLBFX 0.35% 0.24% none none R-6 RLBGX 0.30% 0.24% none none

28. SITUATION ANALYSIS Let’s View the Overall Fees with the RIA American Balanced Fund Plan Costs under RIA Scenario Costs % of Plan Assets Administration $3,000 0.03% Recordkeeping ($50 x 200) $10,000 Recapture Fee used to offset Recordkeeping ($10,000) 0.00% RIA Fee $25,000 Recapture Fee used to offset RIA Fee ($25,000) Investment $65,000 0.65% Total $68,000 0.68%

29. SITUATION ANALYSIS Let’s View the Overall Fees with the RIA American Balanced Fund Share Class Ticker Fund Expense Mngmnt Fee 12b-1 Fee Sub-TA Fee R-4 RLBEX $65,000.00 $24,000.00 $25,000.00 $10,000.00

30. SITUATION ANALYSIS Let’s Reveal The Hidden Costs of the Fund American Balanced Fund Total Cost: $68,000 or $340 per participant Included in Expense Ratio Share Class / Target Ticker Expense Ratio Mngmnt Fee 12b-1 Fee Sub-TA Fee R-3 RLBCX 0.94% 0.24% 0.50% 0.15% Share Class Ticker Fund Expense Mngmnt Fee 12b-1 Fee Sub-TA Fee R-3 RLBCX $94,000.00 $24,000.00 $50,000.00 $15,000.00

31. What difference does this make for me and my participants?

33. How fees impact overall retirement earnings for a participant.

34. How fees impact overall retirement earnings for a participant Lost Retirement Savings: $50,750 or 7.81%