LCEC Retirement Plan Oversight and Performance Update

Retirement Plan Structure LCEC provides two types of retirement benefits under two separate plans: LCEC provides two types of retirement benefits under two separate plans: Defined Benefits Defined Benefits Traditional Plan Traditional Plan Cash Balance Plan Cash Balance Plan 401(k) 401(k) Retirement plan policies have been developed to ensure proper oversight is in place Retirement plan policies have been developed to ensure proper oversight is in place

Retirement Plan Oversight Investment Committee Investment Committee Designated Members of Executive Steering Committee Designated Members of Executive Steering Committee Board Counsel Board Counsel Internal Audit Internal Audit Human Resources Human Resources Responsibilities Responsibilities Establish and review investment objectives, policies, amendments, and guidelines Establish and review investment objectives, policies, amendments, and guidelines Review performance of plans and plan components Review performance of plans and plan components Periodically report results overview to Board of Trustees Periodically report results overview to Board of Trustees Investment Committee Investment Committee Meets quarterly Meets quarterly Has engaged the services of an investment consultant (w/ Morgan Stanley) to assist in fulfillment of responsibilities and to provide independent expertise and opinion on plan management (New York Life) and performance Has engaged the services of an investment consultant (w/ Morgan Stanley) to assist in fulfillment of responsibilities and to provide independent expertise and opinion on plan management (New York Life) and performance

Retirement Plan Performance Update Following slides are excerpts from the most recent quarterly report prepared for and reviewed by the Investment Committee Following slides are excerpts from the most recent quarterly report prepared for and reviewed by the Investment Committee Report based on 4Q 2014 results Report based on 4Q 2014 results

401(k) Fund Performance LCEC Fund 2014 LCEC Fund 1 Year Performance 2014 Benchmark 1- Year PerformanceBenchmark JP Morgan SmartRet Income I5.17%4.26%Morningstar Retirement Income JP Morgan SmartRet Income 2015 I5.85%4.46%Morningstar Target Date JP Morgan SmartRet Income 2020 I6.91%4.72%Morningstar Target Date JP Morgan SmartRet Income 2025 I7.44%5.06%Morningstar Target Date JP Morgan SmartRet Income 2030 I7.70%5.06%Morningstar Target Date JP Morgan SmartRet Income 2035 I7.78%5.20%Morningstar Target Date JP Morgan SmartRet Income 2040 I7.90%5.29%Morningstar Target Date JP Morgan SmartRet Income 2045 I7.83%5.34%Morningstar Target Date JP Morgan SmartRet Income 2050 I7.82%5.42%Morningstar Target Date JP Morgan SmartRet Income 2055 I7.90%5.52%Morningstar Target Date MainStay Large Cap Growth I10.54%13.05%Russell 1000 Growth MainStay ICAP Select Equity I8.65%13.45%Russell 1000 Value Columbia Large Cap Index Z13.45%13.69%S&P 500 T. Rowe Price Mid Cap Growth Adv12.87%11.90%Russell Mid Cap Growth Artesan Mid Cap Value Investor1.52%14.75%Russell Mid Cap Value ClearBridge Small Cap Growth A3.29%5.60%Russell 2000 Growth Perkins Small Cap Value S6.99%4.22%Russell 2000 Value Oppenheimer International Growth Y-6.99%-4.06%MSCI EAFE Growth Harbor International Inv-7.16%-4.48%MSCI EAFE Lazard Emerging Markets Equity Open-4.39%-1.82%MSCI EM (Emerging Markets) Oakmark International I-5.41%-4.92%MSCI EAFE Value Nuveen Real Estate Secs I31.28%30.14%FTSE Nareit Equity-Reits BlackRock Natural Resources Inst-13.34%-9.77% S&P North America Natural Resources Sector Index PIMCO Real Return Instl3.42%3.64%Barclays Capital U.S. Treasury - U.S. TIPS Vangard Short Term Bond Index1.16%0.79%Merrill Lynch Domestic Master, 1-3 yrs. Metropolitan West Total Return I5.99%5.97%Barclays Capital U.S. Aggregate PIMCO Money Market Admin0.02%0.03%CitiGroup 3-month Treasury Bill

Noted Items for 2014 Made contributions of $4,651,638 to Defined Benefit Plan Made contributions of $4,651,638 to Defined Benefit Plan Distributed assets of $2,706,319 from Defined Benefit Plan Distributed assets of $2,706,319 from Defined Benefit Plan First credit posted to Cash Balance Plan accounts on January 1, 2015 First credit posted to Cash Balance Plan accounts on January 1, 2015 Rebalanced to Target on Defined Benefit Plan in February, May, August, and November Rebalanced to Target on Defined Benefit Plan in February, May, August, and November Employee Total Compensation and Benefits Statements Employee Total Compensation and Benefits Statements Auto enrollment in 401(k) successful Auto enrollment in 401(k) successful Mortality tables extended life expectancy Mortality tables extended life expectancy Interest rate went down Interest rate went down MAP-21 – Pension Funding Stabilization Extended MAP-21 – Pension Funding Stabilization Extended

DB Plan Expense Projection New Projection

Noted Items for 2014 Defined Benefit ClassNew Defined Benefit FundsRemoved Defined Benefit Funds Hedge MainStay Marketfield I (MFLDX) Large CapVanguard Admiral 500 Index Defined Contribution (401k) Fund ClassNew Defined Contribution FundsRemoved Defined Contribution Funds Fixed IncomeMetropolitan West Total Return IPIMCO Total Return Admin

Current Issues Continue to watch funding levels of defined benefit plan in light of distributions and MAP Continue to watch funding levels of defined benefit plan in light of distributions and MAP Watch New York Life transition to John Hancock Watch New York Life transition to John Hancock Pension expense reduction Pension expense reduction Adding passive options to 401(k) in 2015 Adding passive options to 401(k) in 2015 Consider automatic employee contribution increase for 401(k) Consider automatic employee contribution increase for 401(k) New auditors New auditors Focus on employee education on saving for retirement Focus on employee education on saving for retirement