© 2009 Transamerica Corporation. All rights reserved. Roth 401(k) Made Simple Roth 401(k) TRS For educational use only.

© 2009 Transamerica Corporation. All rights reserved. Your Plan’s Roth 401(k) feature All or part of your contributions can go in after taxes “Qualified” Distributions are free from federal tax No Income Restriction Transamerica Retirement Services and its representatives cannot give ERISA, tax or legal advice. This material is provided for informational purposes only based on our understanding of material provided and should not be construed as ERISA, tax or legal advice. Clients and other interested parties must consult and rely solely upon their own independent advisors regarding their particular situation and the concepts presented here. Although care has been taken in preparing this material and presenting it accurately, Transamerica Retirement Services disclaims any express or implied warranty as to the accuracy of any material contained herein and any liability with respect to it.

© 2009 Transamerica Corporation. All rights reserved. A “qualified” distribution for purposes of the Roth 401(k) account is one that: occurs five-taxable years after initial Roth 401(k) contribution AND the participant either: Attains the age of 59½ Dies Becomes Disabled Your Plan’s Roth 401(k) feature

© 2009 Transamerica Corporation. All rights reserved. The Roth 401(k) five-year rule Qualified distributions can only occur five-taxable years after the first Roth 401(k) contribution (assuming the participant either attains age 59 ½, becomes disabled, or dies). Your Plan’s Roth 401(k) feature

© 2009 Transamerica Corporation. All rights reserved. Traditional 401(k) vs. Roth 401(k) ItemTraditional 401(k)Roth 401(k) Employee Contributions Before-tax, reduces current income tax. Pay taxes later (at distribution). After-tax, Pay current income tax now. Qualified distributions1 federally tax-free. Employee Distributions Federally taxed as income.Free from federal taxes. 1 Employee Contribution Limit for 2009 $16,500 (Plus $5,500 if age 50 and older) in combined before-tax 401(k) and after-tax Roth 401(k) contributions 1 Roth 401(k) account “qualified” distributions are federally tax free if occurring five-taxable years after initial Roth 401(k) contribution and the participant either attains age 59½, dies, or becomes disabled.

© 2009 Transamerica Corporation. All rights reserved. Traditional 401(k) vs. Roth 401(k) ItemTraditional 401(k)Roth 401(k) DistributionsDistributions permitted: Attains age 59 ½ Dies Becomes disabled Hardship Plan or Employment termination Distributions permitted, however may not be qualified 1 : Attains age 59 ½ Dies Becomes disabled Hardship Plan or Employment termination Required Minimum Distributions Required. Some plans require distributions to begin at the later age of 70 ½ or separation from service, provided the participant is not a 5% owner. Required. However, before minimum distributions begin, the participant can rollover the entire balance to a Roth IRA, which does not require minimum distributions. The IRA accountholder can forgo taking distributions, allowing the IRA to continue to accumulate tax-free, and ultimately be passed to heirs free from federal taxes. 1 Roth 401(k) account “qualified” distributions are federally tax free if occurring five-taxable years after initial Roth 401(k) contribution and the participant either attains age 59½, dies, or becomes disabled.

© 2009 Transamerica Corporation. All rights reserved. Traditional 401(k) vs. Roth 401(k) ItemTraditional 401(k)Roth 401(k) Rollover OptionsMay be rolled over to another traditional 401(k) or to a regular IRA. May be rolled over to another Roth 401(k) or to a Roth IRA. If rolled to another Roth 401(k), five-year distribution rule counts from participant’s first Roth 401(k) contribution. If rolled to a Roth IRA, five-year distribution rule counts from date employee opened his/her first Roth IRA.

© 2009 Transamerica Corporation. All rights reserved. Traditional 401(k) vs. Roth 401(k) ItemTraditional 401(k)Roth 401(k) Employer MatchAllowed.Allowed, however, employer match of employee’s after-tax Roth 401(k) contribution is a before-tax contribution. RecordkeepingAll before-tax contributions are accounted for separately within the same plan. All after-tax contributions are accounted for separately within the same plan.

© 2009 Transamerica Corporation. All rights reserved. Traditional 401(k) vs. Roth 401(k) Traditional 401(k)Roth 401(k) RecordkeepingAll before-tax contributions are accounted for separately within the same plan. All after-tax contributions are accounted for separately within the same plan.

© 2009 Transamerica Corporation. All rights reserved. Roth 401(k) vs. Roth IRA ItemRoth 401(k)Roth IRA 2009 Individual Contribution Limit $16,500 (combined with traditional 401(k) limits) $5,000 Catch-up Limit if 50 or older $5,500$1,000 Minimum Distribution Requirements Applies Some plans provide for RMD to begin at the later of age 70½ or separation from service, provided participant is not a 5% owner. Does Not Apply First Time Home Buyer Exception Does Not ApplyApplies

© 2009 Transamerica Corporation. All rights reserved. Roth 401(k) vs. Roth IRA ItemRoth 401(k)Roth IRA Qualified Distribution Five-year Rule Clock starts in year of 1st contribution to 401(k) plan. If participant joins another employer plan, clock continues based on original contribution date if, and only if, the original Roth 401(k) account is rolled over into new employer plan. 1st year of 5-year-taxable period is the 1st contribution date to any Roth IRA. If participant rolls over Roth 401(k) to a Roth IRA, start year of the Roth 401(k) contribution is not considered. This means the 5-year-taxable period begins with the year of the rollover unless rolled over into a Roth IRA established before the rollover. Nonqualified Distribution Tax Treatment For partial distributions, taxed based on proportionate distribution of principal and interest considering the Roth 401(k) account only. Taxable based on 1st money in, 1st money out so tax-free principal is distributed first, then taxable interest. If Roth 401(k) account rolled over to Roth IRA, then Roth IRA rules apply to rollover. Transamerica Retirement Services and its representatives cannot give ERISA, tax or legal advice. This material is provided for informational purposes only based on our understanding of material provided and should not be construed as ERISA, tax or legal advice. Clients and other interested parties must consult and rely solely upon their own independent advisors regarding their particular situation and the concepts presented here. Although care has been taken in preparing this material and presenting it accurately, Transamerica Retirement Services disclaims any express or implied warranty as to the accuracy of any material contained herein and any liability with respect to it.

© 2009 Transamerica Corporation. All rights reserved. How do I choose? Your tax rate will be LOWER in retirement Choose Traditional 401(k) and defer taxes Your tax rate will be HIGHER in retirement Choose Roth 401(k) and pay taxes now Transamerica Retirement Services and its representatives cannot give ERISA, tax or legal advice. This material is provided for informational purposes only based on our understanding of material provided and should not be construed as ERISA, tax or legal advice. Clients and other interested parties must consult and rely solely upon their own independent advisors regarding their particular situation and the concepts presented here. Although care has been taken in preparing this material and presenting it accurately, Transamerica Retirement Services disclaims any express or implied warranty as to the accuracy of any material contained herein and any liability with respect to it.

© 2009 Transamerica Corporation. All rights reserved. How do I choose? Diversify your future tax risk. What if you don’t know whether you’ll pay higher taxes in retirement than you do today? You can diversify your tax risk by contributing both before- tax and after-tax today, allowing you to receive both taxable and tax-free distributions in retirement. Transamerica Retirement Services and its representatives cannot give ERISA, tax or legal advice. This material is provided for informational purposes only based on our understanding of material provided and should not be construed as ERISA, tax or legal advice. Clients and other interested parties must consult and rely solely upon their own independent advisors regarding their particular situation and the concepts presented here. Although care has been taken in preparing this material and presenting it accurately, Transamerica Retirement Services disclaims any express or implied warranty as to the accuracy of any material contained herein and any liability with respect to it.

© 2009 Transamerica Corporation. All rights reserved. Pay federal income tax now, not later. Have more control over your retirement savings distributions. Why contribute after-tax to a Roth 401(k) account? Transamerica Retirement Services and its representatives cannot give ERISA, tax or legal advice. This material is provided for informational purposes only based on our understanding of material provided and should not be construed as ERISA, tax or legal advice. Clients and other interested parties must consult and rely solely upon their own independent advisors regarding their particular situation and the concepts presented here. Although care has been taken in preparing this material and presenting it accurately, Transamerica Retirement Services disclaims any express or implied warranty as to the accuracy of any material contained herein and any liability with respect to it.

© 2009 Transamerica Corporation. All rights reserved. Why contribute before-tax (but not after-tax)? You expect to pay lower federal income taxes in retirement than you do today. Transamerica Retirement Services and its representatives cannot give ERISA, tax or legal advice. This material is provided for informational purposes only based on our understanding of material provided and should not be construed as ERISA, tax or legal advice. Clients and other interested parties must consult and rely solely upon their own independent advisors regarding their particular situation and the concepts presented here. Although care has been taken in preparing this material and presenting it accurately, Transamerica Retirement Services disclaims any express or implied warranty as to the accuracy of any material contained herein and any liability with respect to it.

© 2009 Transamerica Corporation. All rights reserved. How will before-tax and Roth 401(k) contributions affect my paycheck? Assumptions: Gross weekly pay: $1, Contribution rate: 5% Federal tax rate: 28% Traditional Before-Tax 401(k) Roth After-Tax 401(k) Gross weekly pay $1,000 Less before-tax contribution $ (50) Taxable amount of pay $ 950$1,000 Less federal tax $ (266)$ (280) Less Roth contribution $ (50) Net weekly pay $ 684$ 670 Transamerica Retirement Services does not offer tax advice. Please consult a tax professional. This chart is for illustration purposes only. Your circumstances may differ from this example.

© 2009 Transamerica Corporation. All rights reserved. Frequently Asked Questions Can I contribute $16,500 (plus $5,500 if age 50 or older) to a before-tax 401(k) account and the same amount to a Roth 401(k) account? No. Your combined before-tax and after-tax contributions cannot exceed $16,500 (additional $5,500 if you are age 50 and older).

© 2009 Transamerica Corporation. All rights reserved. Frequently Asked Questions Can I contribute to both a before-tax and after-tax 401(k) account within these total contribution limits? Yes. As long as you don’t exceed the combined contribution limits of the plan.

© 2009 Transamerica Corporation. All rights reserved. Frequently Asked Questions If I contribute to the Roth account in my employer’s 401(k) plan, can I still contribute to a Roth IRA? Yes. Roth IRA contributions can be made regardless of your 401(k) choices. In 2009, you can contribute $5,000 ($6,000 if you are age 50 or more) to a Roth IRA if your income is less than $120,000 if single, or $179,000 if married.

© 2009 Transamerica Corporation. All rights reserved. Frequently Asked Questions Can I roll over my Roth IRA into my Roth 401(k) account? No. This is not permitted. However, you can choose to roll your Roth 401(k) account into a Roth IRA after separation from service.

© 2009 Transamerica Corporation. All rights reserved. Frequently Asked Questions My employer matches before-tax contributions; will I receive a match on Roth 401(k) contributions? Most likely yes, subject to your plan’s limits. Check with your plan administrator.

© 2009 Transamerica Corporation. All rights reserved. Frequently Asked Questions Will I receive the same employer match on Roth 401(k) contributions as on before-tax contributions? This is an allowable action. If you contribute the same amount to the Roth 401(k) option as you do to the before-tax 401(k) option, you receive the same match, up to the plan’s match limit. Please check with your plan administrator for complete details.

© 2009 Transamerica Corporation. All rights reserved. Frequently Asked Questions If my employer matches my Roth 401(k) contributions, is the employer match amount distributed tax-free? No. The employer match is considered a before-tax contribution. Before-tax contributions will be taxed as income to you when distributed from the plan.

© 2009 Transamerica Corporation. All rights reserved. Frequently Asked Questions Are minimum distributions required from Roth 401(k) accounts? Yes. However, prior to receiving your required distributions, you may be able to roll over your Roth 401(k) account into a Roth IRA which does not require minimum distributions.

© 2009 Transamerica Corporation. All rights reserved. Frequently Asked Questions If I roll over a Roth 401(k) account into a Roth IRA, do I need to wait 5 years before distributions are tax-free? Yes. A new 5-year clock begins when the Roth 401(k) account is rolled over into a Roth IRA account. However, if before the rollover, you had an existing Roth IRA account that satisfied the 5-year requirement, then distributions from the rollover Roth IRA are immediately available on a tax-free basis assuming you are age 59½, disabled, or deceased. This is because the 5-year period for Roth IRAs begins on the date the participants open their first Roth IRAs.

© 2009 Transamerica Corporation. All rights reserved. Frequently Asked Questions Are the plan’s investment choices different for Roth 401(k)? No. The investment choices are the same.

© 2009 Transamerica Corporation. All rights reserved. Frequently Asked Questions What is a Roth 401(k) qualified distribution? A distribution from a Roth 401(k) account is qualified, and therefore tax-free, if it occurs after the end of the five-taxable-year period that begins in the year of your first Roth 401(k) contribution to the plan, and the distribution is attributable to either your: 1) attainment of age 59½, 2) disability, or 3) death.

© 2009 Transamerica Corporation. All rights reserved. Frequently Asked Questions If I start making Roth 401(k) contributions at the beginning of the year and later change my mind and want them treated as before-tax 401(k) contributions, can they be re-characterized and transferred from the Roth 401(k) account to the traditional before-tax 401(k) account? No. Once contributions are designated as Roth 401(k) contributions, they cannot later be changed to before-tax 401(k) contributions. However, a participant may change, suspend or revoke a Roth 401(k) election for future contributions.

© 2009 Transamerica Corporation. All rights reserved. Frequently Asked Questions Since the Roth 401(k) contributions are made after tax, can I withdraw from my Roth 401(k) account at any time without paying taxes? No. The 401(k) plan’s restrictions on withdrawals that apply to before-tax 401(k) accounts also apply to Roth 401(k) accounts.

© 2009 Transamerica Corporation. All rights reserved. Transamerica. Master Retirement. ® POWER CHOICE FREEDOM Our experience will helpyou on your journey! Provider of retirement plans and investment products for more than 70 years 1 More than $13.2 billion 2 in assets under management More than 15,000 2 retirement plans in place More than 675,000 2 retirement plan participants ¹ Transamerica Retirement Services (“Transamerica”), a marketing unit of Transamerica Financial Life Insurance Company (“TFLIC”), 4 Manhattanville Road, Purchase, New York 10577, and Transamerica Life Insurance Company (“TLIC”), 4333 Edgewood Road NE, Cedar Rapids, Iowa 52499, and other TFLIC and TLIC affiliates, specializes in the promotion of retirement plan products and services. TFLIC is not authorized and does not do business in the following jurisdictions: Guam, Puerto Rico, and the U.S. Virgin Islands. TLIC is not an authorized insurer in New York and does not do business in New York. The Transamerica Advisor Series II plan administration services are provided by Diversified Investment Advisors and funds are distributed by Diversified Investors Securities Corporation. Investors should consider the investment objectives, risks, and charges and expenses of the fund carefully before investing. The prospectus for each fund contains this and other information about that fund. For copies of any prospectuses, please call (800) Read each prospectus carefully before investing. 2 As of December 31, 2008.

© 2009 Transamerica Corporation. All rights reserved. Roth 401(k) Made Simple Roth 401(k)