Southern Territorial HR Conference

Pension Plan Administration

Pension Plan Perspectives

Army, Territory and Division

East Central South

Pension Section

Pension Section

Pension Section

Pension Operations Committee

Pension Council

Pension Council

Pension Council

Pension Trustees

ERISA…IRS…DOL…EEOC…SEC…State Laws…Other

Organization & Governance

Assets increased from $249 million to $270 million

$99 East 37%$77 Central 29%$94 South 34%

Contributions were $29 million

$ 9.9 East 34%$ 8.8 Central 30%$10.3 South 36%

Dollars

Distributions were $24.2 million to 2,034 participants

$ 6.9 East 28%$ 6.8 Central 28%$10.5 South 44%

727 East 36%614 Central 30%673 South 34%

Dollars Volume

Participant

Participants totaled 24,335 including 2,014 terminations and 5,133 new enrollees

East 6,920 28% 727 36% 1,810 35%Central 6,846 28% 614 30% 1,374 27%South 10,498 44% 673 34% 1,949 38%

Total 24,335 100% 2,014 100% 5,133 100%

Participants Terminations New Enrollees

Participant

Vesting

East 2,374 4,196 Central 2,141 3,974 South 4,185 6,750

Total 8,700 14,920

100% 0 – 90%

Age 65+

East 806 26%Central 815 26%South 1,513 48%

Total 3,134 100%

Participant

Beneficiary Designations

East 1,039 Central 1,104 South 928 Total 3,074

Prudential Contacts

Phone 544 1,661 369 1,278 3,852Website 12,935 14,833 12,487 12,966 53,221

Total 13,479 16,494 12,856 14,244 57,073

Q1 Q2 Q3 Q4 Total

Forfeitures

• Forfeiture Defined: Non-Vested Account Balance• Cash Impact: Offsets Division’s Quarterly Contribution

Example:

• Participant terminates employment with $10k• 50% vested• $5,000 paid to participant• $5,000 offset the following quarter

Forfeitures

Forfeitures were $2.3 million or 22% of the $10.3 million contribution

Contribution Forfeitures Savings THQ $ 625,036 $ 87,778 14% EBC $ 98,201 $ 6,796 7% ALM $ 756,683 $ 161,046 21% AOK $ 485,010 $ 157,401 32% FL $ 1,768,191 $ 298,719 17% GA $ 619,428 $ 151,196 24% KT $ 625,043 $ 156,506 25% MWV $ 270,918 $ 42,008 16% NCV $ 681,715 $ 205,388 30% NSC $ 1,187,175 $ 211,313 18% TX $ 1,437,427 $ 434,463 30% ARC $ 1,753,308 $ 375,651 21%

Total $ 10,308,134 $ 2,288,265 22%

Participant

10,498 Participants with account balances -6,741 Participants 4thQ 2013 contribution 3,757 Fictional participants

Fictional Participants

Other Territories •Same issue….but only 100 or so in each Territory

Progress So Far •5,850 in 4thQ 2011•Plan in place•Requires major time commitment

Best Practice

• Refer all former employees directly to us or Prudential

• Call, email, question…do not guess

• Report problems immediately

• Get Quarterly Data Right the First Time

• Don’t Sign or Date Any Distribution Forms

• Include Your Phone Number in Your Email Signature Line

• Subject = Last Name, First Name

• Welcome Letter & Booklet Status

Top 5 Challenges

1.Data Integrity: Clean up the 3,757 fictional participants

2.Legal: Implement “Cash-Out” plan

3.Beneficiary Designations: All participants complete a form

4._______________________________________________

5._______________________________________________

Top 5 Challenges

1.Data Integrity: Clean up the 3,757 fictional participants

2.Legal: Implement “Cash-Out” plan

3.Beneficiary Designations: All complete new form

4.Annuity Purchases: For those 65+

5.20 Hour Requirement: Consistent administration