1. THE ECONOMY AND THE MARKET TRSC 3413ECON-0511 © 2011 Transamerica Retirement Services Corporation. All rights reserved. FOR EDUCATIONAL USE ONLY

2. 1. The Economy and the Market 2. The 1st Quarter in Review 3. Investment Strategies for the Long Term

3. The Economy and the Marke t

4. Our Cyclical Economy Expansion Peak Trough Recession 4

5. Economic Indicators Economic cycles revolve around key measures including: Growth rate of gross domestic product (GDP) Consumer, business, and government spending Strength of the U.S. dollar Interest rates Jobless claims Unemployment 5

6. The “Fed” and the Economy During Expansion During Recession Increase borrowing costs to keep inflation in check Lower borrowing costs to encourage spending by businesses and individuals Intended Effects Increase interest rates to “tighten” money supply Lower interest rates to “loosen” money supply The Federal Reserve can Money Supply 6

7. Investments and the Economy Typically lose value as interest rates rise Typically increase in value as interest rates fall Bonds Typically increase in value as real or expected earnings improve “Bull Market” Typically lose value as earnings deflate “Bear Market” Stocks During ExpansionDuring Recession 7

8. The Market and the Economy Stock market historically moves in tandem with the economy A review of markets often begins with a look at the economy Difficult to explain market activities until after the fact Rallies and plunges can be fueled by investor emotion 8

9. What is the “Market”? Typically, the “market” means the U.S. stock market Common market gauges include: Dow Jones Industrial Average (DJIA) S&P 500 NASDAQ Composite Index Broad market gauges are not appropriate measures for specific market segments or most stock funds Dow Jones, Standard and Poor’s (“S&P”), and NASDAQ are registered trademarks. 9

10. Stocks and Stock Funds Generally categorized by: Market capitalization Large-Cap Mid-Cap Small-Cap Investment style Value Core Growth Investment Style Value CoreGrowth Market Capitalization Small-Cap Mid-CapLarge-Cap 10

11. Drivers of Investment Behavior Market capitalization and investment style help explain the investment behavior of stocks: S&P 500 IndexLarge Core MSCI World Ex-U.S. IndexInternational Russell 2000 IndexSmall Core Russell 1000 Growth Index Large Growth Russell 1000 Value IndexLarge Value Representative BenchmarkStyle More Conservative More Aggressive Please see slide 32 for additional disclosures. 11

12. Bonds and Bond Funds Several types of bond funds may be offered by your plan B.C. U.S. Govt./Credit Bond IndexBond – Int. Term B.C. Global Agg. Bond IndexInt’l/Global Bond Credit Suisse High Yield IndexHigh Yield Bond B.C. U.S. Aggregate Bond Index Bond – Long Term Bond – Short Term Representative BenchmarkStyle More Conservative More Aggressive Merrill Lynch 1-3 Yr Treasury Index 12 Please see slide 32 for additional disclosures.

13. Quarterly Review

14. Investment News and Market Updates Visit the Markets Hub under our Market Video News Feed link at www.TA-Retirement.com for the latest investment news and market information.

15. Investing Strategies for the Long Term

16. Focus on the Long Term Market ups and downs may be unsettling, but consider not reacting emotionally. Selling out of funds that have under-performed, may mean “locking in your losses.” Moving into funds that have outperformed may mean “buying high.” Instead, consider using this time to: Revisit your long-term asset allocation strategy Rebalance your portfolio to under-performing asset classes 16

17. It may be tempting, but it may not pay off: Move to Cash During a Crisis? Source Indices: S&P 500 Index, Barclays U.S. Aggregate Bond Index, Citigroup 3-Month T-Bill Index. Please see slide 35 for additional disclosures.

18. Earned less than -10% annually Earned between -10% and 0% annually 68% 13% Earned between 0% and 10% annually Earned more than 10% annually Risk of Stock Market Loss Over Time Source Indices: Stocks (S&P 500 Index). Please see slide 35 for additional disclosures.

19. Diversification Across Asset Classes Source Indices: Stocks (S&P 500 Index), Bonds (Barclays Long-Term Government Bond Index). Please see slide 35 for additional disclosures.

20. Investing Wisely Think about the long term Diversify Rebalance Be aware of risk Educate yourself 20

21. The Transamerica Difference Convenient services help you manage your account: Through the mail: Quarterly statements and newsletters On the Web: Transamerica Retirement Services Online – www.TA-Retirement.com Automated Services: TransDirect ® (800) 401-8726 21 One-on-one: Service Specialist (800) 401-8726, available 8 a.m. to 8 p.m., Monday through Friday, Eastern Time.

22. The Transamerica Difference Convenient services help you manage your account: Through the mail: Quarterly statements and newsletters On the Web: Transamerica Retirement Services Online – www.TA-Retirement.com Automated Services: TransDirect ® (888) 637-8726 22 One-on-one: Service Specialist (888) 637- 8726, available 8 a.m. to 8 p.m., Monday through Friday, Eastern Time.

23. The Transamerica Difference Convenient services help you manage your account: Through the mail: Quarterly statements and newsletters On the Web: Transamerica Retirement Services Online – www.TA-Retirement.com Automated Services: TransDirect ® (877) 234-9293 23 One-on-one: Service Specialist (877) 234-9293 available 8 a.m. to 9 p.m., Monday through Friday, Eastern Time.

24. Your Successful Retirement is our Mutual Goal 1. As of December 31, 2010. Transamerica or Transamerica Retirement Services refers to Transamerica Retirement Services Corp., which is headquartered in Los Angeles, CA. 24 Experience – Over 70 years 1 helping participants with retirement planning Sole focus on retirement plans Tools and guidance for all life stages Servicing billions of dollars in retirement plan assets

25. Disclosures Transamerica or Transamerica Retirement Services refers to Transamerica Retirement Services Corp., which is headquartered in Los Angeles, CA. Transamerica Retirement Services and its representatives do not 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. Asset allocation and diversification do not assure or guarantee better performance and cannot eliminate the risk of investment losses. Transamerica Retirement Services does not provide investment advice. Clients and other interested parties must consult and rely solely upon their own independent advisors regarding their particular situation. Transamerica Retirement Services does not act as a fiduciary. Transamerica Retirement Services Corporation is an affiliate of Diversified Investors Securities Corp. (DISC). Securities are offered by DISC, 440 Mamaroneck Avenue, Harrison, NY 10528. 25

26. Disclosures Slide 11: Drivers of Investment Behavior Russell Investments’ Russell 1000 ® Value Index is comprised of the 500 most value-oriented stock companies in the Russell 1000 ® Index. The Russell 1000 ® Growth Index is comprised of the 500 most growth-oriented stock companies in the Russell 1000 ® Index, and the Russell 2000 ® Index is comprised of 2,000 small company stocks. Standard & Poor’s S&P 500 stock market index is comprised of 500 leading companies in leading industries of the U.S. economy. The Morgan Stanley Capital International (MSCI) World Ex-U.S. Index is a free float-adjusted, market capitalization index that is designed to measure international market equity performance. Transamerica Retirement Services is not affiliated with Russell Investments, Standard & Poor's, or Morgan Stanley Capital International. An index is unmanaged and does not take into account the fees and expenses associated with an actively managed fund, so performance may differ. It is not possible to invest directly in an index. There is no guarantee that any asset class will achieve a certain rate of return or outperform another asset class. Slide 12: Bonds and Bond Funds The Merrill Lynch 1-3 Year Treasury Index is comprised of Treasury notes and bonds with maturities of 1-3 years. The Barclays Capital U.S. Government/Credit Bond Index measures performance of U.S. dollar denominated U.S. Treasuries, government-related, and investment grade U.S. corporate securities that have a remaining maturity of greater than or equal to 1 year. In addition, the securities have $250 million or more of outstanding face value, and must be fixed rate and non-convertible. The Barclays Capital U.S. Aggregate Bond Index is an unmanaged, market-value-weighted index of taxable investment-grade fixed-rate debt issues, including government, corporate, asset-backed, and mortgage backed securities, with maturities of one year or more. The Credit Suisse First Boston Global High Yield Index is comprised of issues rated BB and below by S&P or Moody’s with par amounts greater than $75 million. The Barclays Capital Global Aggregate Bond Index measures a wide spectrum of global government, government-related agencies, corporate and securitized fixed-income investments, all with maturities greater than one year. Transamerica Retirement Services is not affiliated with Merrill Lynch, Barclays Capital, or Credit Suisse First Boston. An index is unmanaged and does not take into account the fees and expenses associated with an actively managed fund, so performance may differ. It is not possible to invest directly in an index. There is no guarantee that any asset class will achieve a certain rate of return or outperform another asset class. 26

27. Disclosures Slide 17: Stock Index Returns Source: Morningstar Direct. Data as of March 31, 2011. Indices used to represent each investment style: Large Cap, S&P 500 Index; Mid Cap, Russell Mid Cap Index; Small Cap, Russell 2000 Index; International, MSCI World Ex USA Index. economy. The Russell Midcap Index is a weighted index representing the smallest 800 companies in the Russell 1000 Index. The average Russell Mid Cap Index member has a market cap of $8 billion to $10 billion, with a median value of $4 billion to $5 billion. The Russell 2000® Index is comprised of 2,000 small company stocks. The Morgan Stanley Capital International (MSCI) World Ex-U.S. Index is a free float-adjusted, market capitalization index that is designed to measure international market equity performance. Transamerica Retirement Services is not affiliated with Morningstar Direct, Standard and Poor's, Russell Investments, or Morgan Stanley Capital International. An index is unmanaged and does not take into account the fees and expenses associated with an actively managed fund, so performance may differ. It is not possible to invest directly in an index. There is no guarantee that any asset class will achieve a certain rate of return or outperform another asset class. Slide 18: Annual Stock Returns vs. Long-Term Average Source: Morningstar Direct. Data as of December 31, 2010. The long-term performance quoted for stocks is based on the 20-year average annual return of the S&P 500 Index from 1990-2010. The annual stock market returns shown are represented by the S&P 500 Index and are for the 20-year period from 1989-2009. Standard & Poor’s S&P 500 stock market index is comprised of 500 leading companies in leading industries of the U.S. economy. Transamerica Retirement Services is not affiliated with Morningstar Direct, or Standard & Poor’s. An index is unmanaged and does not take into account the fees and expenses associated with an actively managed fund, so performance may differ. It is not possible to invest directly in an index. There is no guarantee that any asset class will achieve a certain rate of return or outperform another asset class. 27

28. Disclosures Slide 19: Bond Index Returns Source: Morningstar Direct. Data as of March 31, 2011. Indices used to represent each investment style are as follows: Total Bond, BC Aggregate Bond Index; Governments, BC Government; Corporates, BC Corporates; High Yield, Bank of America/ML U.S. High Yield Master II Index. Barclays Capital Aggregate Bond Index is comprised of securities from Barclays Capital Government/Corporate Bond Index, Mortgage-Backed Securities Index, and the Asset-Backed Securities Index. The Barclays Capital Intermediate Government Bond Index is comprised of all bonds covered by the Barclays Capital Government Bond Index with maturities between one and 9.99 years. The Barclays Capital 1-5 Year Credit Index is an unmanaged index of dollar-denominated, non-convertible U.S. corporate fixed income securities. The Merrill Lynch U.S. High Yield Master II Index is a broad-based index consisting of all U.S. dollar-denominated high-yield bonds with a minimum outstanding amount of $100 and maturing over one year. Transamerica Retirement Services is not affiliated with Morningstar Direct, Barclays Capital, and Merrill Lynch. An index is unmanaged and does not take into account the fees and expenses associated with an actively managed fund, so performance may differ. It is not possible to invest directly in an index. There is no guarantee that any asset class will achieve a certain rate of return or outperform another asset class. Slide 20: Annual Bond Index Returns vs. Long-Term Average Source: Morningstar Direct. Data as of December 31, 2010. The long-term performance quoted for bonds is based on the 20-year average annual return of the Barclays Capital Aggregate Bond Index from 1990-2010. The annual bond market returns shown are represented by the Barclays Capital Aggregate Bond Index and are for the 20-year period from 1990- 2010. Barclays Capital Aggregate Bond Index is comprised of securities from Barclays Capital Government/Corporate Bond Index, Mortgage-Backed Securities Index, and the Asset-Backed Securities Index. Transamerica Retirement Services is not affiliated with Morningstar Direct or Barclays Capital. An index is unmanaged and does not take into account the fees and expenses associated with an actively managed fund, so performance may differ. It is not possible to invest directly in an index. Past performance does not guarantee future results. 28

29. Disclosures Slide 23: Move to Cash During a Crisis? Source: Morningstar Direct, January 1, 1980 to December 31, 2010. Domestic stocks are represented by the total returns of S&P 500 Index. Bonds are represented by the total returns of the Barclays U.S. Aggregate Bond index. Cash is represented by the Citigroup 3-Month T-Bill Index. Note that prior to November 2008, the Barclays indexes were calculated by Lehman Brothers. Past performance is not a guarantee of future results. An index is unmanaged and does not take into account the fees and expenses associated with an actively managed fund, so performance may differ. It is not possible to invest directly in an index. There is no guarantee that any asset class will achieve a certain rate of return or outperform another asset class. Slide 24: Risk of Stock Market Loss Over Time Source: Morningstar Direct, December 31, 1926 to December 31, 2010. Stocks are represented by the S&P 500. An index is unmanaged and does not take into account the fees and expenses associated with an actively managed fund, so performance may differ. It is not possible to invest directly in an index. There is no guarantee that any asset class will achieve a certain rate of return or outperform another asset class. Slide 25: Diversification Across Asset Classes Source: Morningstar Direct. Data as of December 31, 2010. Domestic stocks are represented by the total returns of Standard & Poor’s Composite Index of 500 stocks. Bonds are represented by a composite of the total returns of long-term U.S. Government bonds from yield published by the Federal Reserve and the Barclays Long-Term Government Bond Index. Transamerica Retirement Services is not affiliated with Morningstar Direct, Standard & Poor’s, and Barclays Capital. An index is unmanaged and does not take into account the fees and expenses associated with an actively managed fund so performance may differ. It is not possible to invest directly in an index. There is no guarantee that any asset class will achieve a certain rate or return or outperform another asset class. Diversification does not guarantee a profit or prevent a loss. 29

30. THE ECONOMY AND THE MARKET © 2011 Transamerica Corporation. All rights reserved. FOR EDUCATIONAL PURPOSES ONLY TRSC 3413ECON-0511