Schwab Retirement Technologies User Forum May 18, 2011 Denver, Colorado

2 Agenda Welcome & Introductions Schwab RT Product Update Participant Experience & Communication Levers Online User Community Closing Remarks

3 Schwab RT Product Update Schwab RT User Forum Benjamin Lee Schwab Retirement Technologies

4 Agenda 2010 Highlights 2011 Priorities Other projects in priority order

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6 Schwab RT 2011 Priorities Q Loan Report – FASB regulatory modifications Report unpaid accrued interest Compliance Management Automation (CMA) – feedback from pilot (ASC Compliance integration) Ability to process corrective contributions vs. returns New Web-based Call Center Migrate from client application to web-based application Online Tax Forms (1099s) for Participants (CSTC) (#2 Regional) Distribution Education and Support Services Newkirk Source/Investment Expansion Q eDelivery – Notifications & Confirms (#8) SchARP Fee enhancements – new indicators to charge for generating statements (2010 Regional) Simplified Transaction History View on Schwab RT Web planAnalytics (dailyVest) on Schwab RT Web Compliance Management Automation Compensation & Hours Tracking - Payroll, Allocations, Compliance, Eligibility, Vesting Safari & other Browser Support Participant Web (May) Sponsor/Advisor/SchARP (June) SchARP Payroll – default payroll date on NOD screen (Chicago Nov 2010 Regional) = Completed/In Progress  = Analysis

7 Schwab RT 2011 Priorities Q Retirement Readiness - Participant Gap Analysis and Online Advice Integration with Klein Decisions/KD Advisors K4 Plan Goals  SchARP Payroll  Generic File Upload to SchARP (#7)  Validate data upload  Calculate or Validate Match  Notify and approve – submit Payroll Funding Request and Notice of Deposit (NOD / ACH request)  Schwab RT Admin Tool  Security and set up usability enhancements Q  Money Market Fund Transactions – SEC amendments governing money market funds (10/31/11)  Ability to process money fund transactions at a price other than $1.00 per share  Remediate systems to handle new files  Resolve operational issues related to accounts with cash sweep  404 (a) Participant Fee Disclosure (11/1/11)  Annual Fee Disclosure to all eligible participants (printed, online – tbd)  Change Notice – 30 days prior  Show fees taken from participant account on statements  Include fee detail on data extracts for Newkirk and SCICOM  Loan Administration/Online (#1 Web) ( ASAP)  Application process and documents online  Sponsor approval  Loan and check status online  Automate notification of payroll deductions for loan payments = Completed/In Progress  = Analysis Architecture priorities:  Error Reporting Handling Enhancements  Strong Mail – eStatement & eDelivery bounce-backs

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9 Other projects in priority order Next - High Priority:  Loan Administration (#2 RK)  Address recordkeeping issues: deviant loan payments, loan reamortization  Distribution Administration/Online (#1 RK, # 6 Web) Discretionary:  Eligibility  Rehires & other inclusions/exclusions  Regulatory/Compliance Disclosure Solution  Identify which participants need what disclosure based on plan provisions (i.e. safe harbor, QDIA, Fees etc)  On-Demand Sponsor Allocation Report  Allow user to generate a CP20 Crystal based allocation report on the Web for any time period  Automate CSTC Revenue Share Allocations  Flexible allocation methodology (plan level)  Cycle-based, allocated back in same proportion to those that generated the revenue share  Other (TBD): net fees, pro-rata allocation  Automatic Contribution Arrangement  Admin/audit controls  Audit Report Package  Online Prospectus & Fund Fact Sheets (#9 Web)  Plan Sponsor Usability Enhancements  Replace/Mask SSN  Mask SSN (first 3 or last 4) on ALL reports  ETFs – End of Day Trading  Automatic Savings Increase Strategic:  My Money Mobile Transaction Capabilities  Transfers  Advisor Online Rebalance Portal  IPM Performance Calculation  SchARP Dashboard on Mobile 2011 Deferred Projects:  Payroll & Census Data Interface  Compliance Management Automation  Data Correction interface  Annual Questionnaire – generate and publish

10 eDelivery Notifications & Confirmations Schwab RT User Forum Betty Lutchmaya Schwab Retirement Technologies

11 eDelivery – Notifications & Confirms Overview eDelivery offers the following features and benefits: Automatic delivery of notifications and confirmations in real time via or text Suppression of PIN and Password changes in notifications Ability to capture and update eDelivery preferences and contact information during and after the enrollment process Allows Participants to immediately validate their when it is changed on the Web Automatic generation of paper confirmation letters via SchARP workflow Customizable content for , text, and paper notifications and confirms

12 eDelivery – Administration You can select the options to display to participants (Paper, , Text) from the following Categories and Activity Types: Can select what options participant sees on the eDelivery preference page Can select different default for each categories

13 eDelivery – Process Flow

14 eDelivery – Participant Experience

15 eDelivery – Participant Experience A consent will appear when an electronic Selection has been made

16 eDelivery – Participant Experience The confirmation page will display a shorted confirmation number Shorted Confirmation Number

17 eDelivery – Participant Experience Web Pending Activity

18 eDelivery – Participant Experience Participant who selected to receive confirms via , will be prompted to validate their address Received Confirmation of Validation The validation date in participant inquiry will automatically update

19 eDelivery – Participant Experience Confirmation

20 eDelivery – Participant Experience Under Participant Summary, Clients can change , phone number, statement preference and delivery preference Date of Consent will appear next to each electronic selections

21 eDelivery – SchARP Dashboard Create eDelivery Paper Confirms

22 eDelivery – Paper Confirmations & Sample Content

23 eDelivery – Text Confirmations & Sample Content

24 eDelivery – Call Center There will be an option to flag paper confirms for reprints

25 Participant Fee Disclosure Schwab RT User Forum Cathy Whisonant Schwab Retirement Technologies

26 404(a) Participant Fee Disclosure Agenda 404(a) Participant Fee Disclosure What is it Who receives it Timing Annual Participant Fee Disclosure – Delivery Annual Participant Fee Disclosure – Details Change Letter Notifications – Details and Delivery Participant Statements – Details and Delivery Timeline Examples

27 404(a) Participant Fee Disclosure Overview – What is it? Annual Participant Fee Disclosure includes the following information: Investment performance and restrictions Plan fees and restrictions Participant fees Change Letter Notifications that clarify to the participant any upcoming changes to information reported in the annual disclosure Participant Statements reporting all fees paid from a participant’s account, within the statement period, broken out by plan administrative fees and participant fees

28 404(a) Participant Fee Disclosure Overview – Who receives it? Participant Fee Disclosure Annually Eligible participants with a balance (excluding Management Accounts and Expunged participants) Eligible participants without a balance Delivery of annual disclosure is required for plan years starting after November 1, 2011 and thereafter Upcoming Entry Dates Sent to enrollees based on future Participation/Eligibility Date before investment selections are allowed Change Letter Notification All participants who receive participant fee disclosure Fees reported on Participant Statements Participants that receive quarterly statements (including Newkirk and SCICOM)

29 404(a) Participant Fee Disclosure Overview – Timing Participant Fee Disclosure All eligible participants - within 60 days of the initial plan year, then annually for years thereafter New Enrollees – prior to when investment selections are allowed, then annually for years thereafter Online Enrollment – (TBD) include an option to acknowledge during online process if new enrollee has not received paper version of Annual Disclosure, then annually for years thereafter Change Letter Notification At least 30 days before the change becomes active for the plan Statement Quarterly

30 Annual Participant Fee Disclosure - Delivery SchARP Creates two PDF files for the plan sponsor Personal Cover Letter – one PDF file including all participant letters (only for those who should receive the disclosure) Annual Participant Fee Disclosure – one PDF for the report Sends notification to Plan Sponsor, including link to the both FDF files Updates participant records with Disclosure Effective Date (per year) to track which participants are included in the Personal Cover Letter PDF file Sponsor sends files to printing company, where report is mailed to participants eDelivery option (TBD : for discussion) Uses new participant preference setting to receive DOL regulatory notices If participant elects eDelivery, an is sent to the participant with a link to annual disclosure Participant is not included in the Personal Cover Letter PDF file MyMoney WEB Investment Performance chart, including website links, are available Participant Fee Disclosures are archived and available to participant

31 Annual Participant Fee Disclosure - Details The annual disclosure may include the following sections, based on plan setup: Investment level fees and restrictions Self Directed Brokerage Account information Available Portfolios Company Stock Plan level fee and restrictions Participant level fees Glossary and websites Each section includes the following, based on plan setup: Option to suppress section on the annual disclosure Note fields for general or required information that is not available on the Recordkeeping system If applicable to the section, an additional Note field for the required DOL wording

32 Annual Participant Fee Disclosure - Details Section 1 – Investment information displayed in a chart Investment Name and Index grouped by Investment Category Fee and Restriction Information Redemption Fees Transfer, election, competing fund blocks Transfer and election caps Note fields available per investment Morningstar Information (always from 12/31 feed) Inception Date Annual Total Returns (1, 5,10 years and from Inception) Gross Operating Expense ( percentage and per $1000) Benchmarking Note fields available

33 Annual Participant Fee Disclosure – Details Section 2 – PCRA Note field that includes details about account fees and contact Information Section 3 – Portfolios and Investment Program Information Displays portfolio and IPMs in a chart format Underlying Investments displaying investment election percentages equaling 100% Section 4 – Plan Restrictions Note field that includes contact Information and additional plan restrictions not stored on the RK system Type of restrictions listed in chart form Transfer and Elections allowed Transfer and Elections frequency information Transfer and Elections minimum and maximum limits Competing fund restriction

34 Annual Participant Fee Disclosure - Details Section 5 – Company Stock Note field including required DOL wording Note fields including additional information (NPI, Voting Rights, etc) Section 6 – Plan Level Fees Note field including required DOL wording SchARP Fees reported in this section Fee template date range is active Fee Option is “Allocate” type Fee is paid by the participant, not invoiced Types of Plan fees are Recordkeeping, Annual, Administration Fee information reported in chart format includes the following Fee Description Basis Setting (Avg Daily, Beginning or End of Cycle, current balance, no balance)

35 Annual Participant Fee Disclosure - Details Section 7 – Participant Level Fees Recordkeeping Fees included in this section Loan Setup Fee (plan setup) Distributions (plan setup) In-service Withdrawals (template) SchARP Fees reported in this section Fee template date range is active Fee Option is “Calculate” type Fee is paid by the participant, not invoiced Types of Participant fees are Head Count, Balance, Charge by Number (Loan, SDBA, Distribution, statements) Fee information listed in chart form Fee Category Fee Description Fee Amount (Dollar or Percentage) Section 8 – Glossary and websites Note fields including website of standard glossary and additional information

36 Change Letter Notification – Details and Delivery Determine which information on the annual disclosure will require a Change Letter Notification in the event that a change occurs. Types of actions that cause a change notification to occur Change to investment such as Name, Class, added/removed from plan line-up Restriction change at an investments or plan level Fee amount changed, added or removed Types of actions that do not cause a change notification Changing verbiage in Note fields OER changes Track when change occurs with an effective date, so a Change Letter Notification is created and sent to participants in advance One PDF file is created that includes all participant Change Letters Only participants who previously received the annual disclosure will receive a change letter Information on the Change Letter includes the following: Details of the “From/To” change Effective Date of the change Sends notification to Plan Sponsor including link to the PDF file to be printed

37 Participant Statement – Details and Delivery Two fee amounts are included on quarterly statements Plan Administrative Fee Total Individual Fee Total Report only fees paid from participant’s account Totals are determined based on tax code selection (Plan vs Participant) and transactions that occurred during the cycle Tax Codes selection allow revenue share covered fees to be included (if applicable) Plan level “Note Fields” are customizable to explain fee totals Newkirk and SCICOM included in scope File layouts will include fee totals Plan level information – TBD Follows the current delivery method for statements

38 Example 1 – Fee Disclosure with Change Notification

39 Example 2 – New Enrollee with Online Enrollment

40 Participant Experience & Communication Levers Schwab RT User Forum Benjamin Lee Schwab Retirement Technologies

41 Agenda Panel Introduction – Ben Lee, Schwab RT Tony Mingo, President/CEO – vWise Inc. Bob Padgette, CEO & President - Klein Decisions, Inc. Pete McNellis, SVP, Director & Co-Founder – dailyVest, Inc. What are you – Analog or Digital? Participant Retirement Readiness Success Predictors Participant Experience & Communication Levers

42 What Are You?

43 What Are You? Analog or Digital

44 What Are You? Analog or Digital

45 Participant Retirement Readiness Success Predictors What are the top 2 predictors? 1.How much you save 2.Maximizing employer match 3.Having an appropriate asset allocation 4.Having a diversified portfolio and rebalancing 5.Low investment and plan administration fees 6.Using catch up 7.Using auto escalate 8.Not cashing out

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47 Online User Community Schwab RT User Forum Jarrod Facchino Schwab Retirement Technologies

48 Building on the Self-Service Portal

49 Ideas & Answers – User Community

50 Ideas – Product Collaboration

51 Answers – Ask the Community

52 Answers – Ask the Community

53 Next Phase - Solutions

54 Next Steps

55 Disclosures The Charles Schwab Corporation provides services to retirement plans and participants through its subsidiaries: Charles Schwab & Co., Inc., Charles Schwab Bank, Schwab Retirement Plan Services, Inc., Schwab Retirement Plan Services Company and Schwab Retirement Technologies, Inc.® (Schwab RT). Schwab RT is engaged in developing and licensing proprietary retirement plan recordkeeping systems to independent recordkeepers. © 2011 Schwab Retirement Technologies, Inc. All rights reserved.( )

Thank you.