Retirement Services University Welcome! The Ritz-Carlton, San Francisco, California May 14-16, 2003

Retirement Services University Opening Remarks Ken Cochrane, Senior Vice President Sales and Marketing The Ritz-Carlton, San Francisco, California May 14-16, 2003

Retirement Services University 3 San Francisco RSU May 2003 RSU Background and Objective RSU Agenda State of the Defined Contribution Industry Transamerica Retirement Services

Retirement Services University 4 Background and Objective 6th RSU Over 260 producers have attended 3 RSUs in 2003 Las Vegas San Francisco Bachelor Gulch, CO

Retirement Services University 5 Objective Provide producers with an idea-sharing forum evolving around the retirement business Provide a way for producers to become better acquainted with TRS and its management Share ways to increase your retirement plan business

Retirement Services University 6 Objective, continued Provide a comprehensive understanding of TRS’ products and services, including producer programs Gather your input to further develop and refine our offerings Develop a strategic plan for you to increase your retirement plan business

Retirement Services University 7 Agenda Transamerica Retirement Services 5 Pillars of Distinction: High Quality Investments Innovative Plan Design Tailored Services Participant Education Program Advisor Services and Development

Retirement Services University 8 Agenda - daily Wednesday: 5 Speakers –Ken Cochrane –Tom Schlossberg, AEGON –Toby Cromwell, Transamerica Investment Management –Chris Bonavico, Transamerica Investment Management –Peter Sullivan, RVP Eastern Region Retirement Plans Overview

Retirement Services University 9 Agenda - daily Thursday 3 Breakout Sessions: 401(k) Testing Review: David Hiss, RVP Central Region Fiduciary Issues: Peter Welsh, SVP Advanced Plan Design: Peter Sullivan, RVP Eastern Region (Innovative Plan Design) TRS Products and Services: Stig Nybo, RVP West Region –(Tailored Services, Participant Education, Advisor Services and Development) TRS Commitment to the Business : Kent Callahan, President Building Your Retirement Business Strategy: Brian Lowery, Outsell –(Advisor Services and Development)

Retirement Services University 10 Agenda - daily Friday Building Your Retirement Business Strategy – cont. Brian Lowery, Outsell –(Advisor Services and Development) Departures

Retirement Services University 11 San Francisco RSU May 2003 RSU Background and Objective RSU Agenda State of the Defined Contribution Industry Transamerica Retirement Services

Retirement Services University 12 The Defined Contribution Industry Expenses Revenues Margins

Retirement Services University 13 Relative Composition of Defined Contribution Operational Costs, 2002

Retirement Services University (k) Service Enhancements First 401(k) Plan Daily Valuation Plan Loans VRU Access to Plan Information Multi-Fund/Mutual Fund Windows Self-Directed Accounts Web Access to Plan Information On Line Transactions/ Loans PDA Access to Plan Info Online Investment Advice          

Retirement Services University 15 Total Expenditures per Participant, 2002(E) R 2 = ,157 1,578 1,894 Number of Participants, Indexed

Retirement Services University 16 Client Service Expenditures per Participant, 2002(E) R 2 = ,157 1,578 1,894 Number of Participants, Indexed

Retirement Services University 17 Participant Education Expenditures per Participant, 2002(E) R 2 = ,157 1,578 Number of Participants, Indexed

Retirement Services University 18 Average Total Defined Contribution Plan Fees by Plan Size 1995 Versus 2002 Basis Points (12%) (8%) (12%)

Retirement Services University 19 14% 82% Investment Management Fees as Percentage of Total Plan Fees, 1995 Versus % 8% 1%3% 

Retirement Services University 20 Changes in Defined Contribution Assets Under Management, Billions of U.S. Dollars

Retirement Services University 21 Defined Contribution Outflows per Dollar of Inflows, Rollovers and distributions are growing at a faster rate than new contributions

Retirement Services University 22 Pretax Profit Margins, Typical Bundled Provider, End of Year % Margin 97% Expenses

Retirement Services University 23 7 Pretax Profit Margin, Typical Bundled Provider, Year-End

Retirement Services University 24 Conclusions: Revenue Trends are more severe than cost issues Providers must manage DC as a business not a distribution channel for acquiring assets (Oppenheimer, MFS, Putnam, etc.) For most firms, revenue trends are more severe than cost issues: price pressure, changing revenue compositions and open architecture

Retirement Services University 25 Conclusions - cont. Revenue Solutions Discipline in pricing and sales process Focus on Plan Retention Develop products and platform capabilities flexible enough to provide new avenues for growth Strong Proprietary Fund Performance

Retirement Services University 26 San Francisco RSU May 2003 RSU Background and Objective RSU Agenda State of the Defined Contribution Industry Transamerica Retirement Services

Retirement Services University 27 Transamerica Retirement Services: The Retirement Answer 2002: $1,018,000,000 in sales 50% over : 43% ahead of 2002 Profitable in 2002 and 2003 Q1

Retirement Services University 28 Transamerica Retirement Services: The retirement answer!

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