1. 1 PRESENTERS Nevin Adams Editor, PLANSPONSOR Steve Anderson Senior Vice President, Schwab Retirement Plan Services Kevin Henderson Partner, Bradley Arant Boult Cummings LLP

2. 2 EMPLOYER VIEWS ON THE 401(K) AND FINANCIAL EDUCATION IN THE WORKPLACE Nevin Adams Editor, PLANSPONSOR Steve Anderson Senior Vice President, Schwab Retirement Plan Services Kevin Henderson Partner, Bradley Arant Boult Cummings LLP

3. 3 New study reveals HR and Finance executives’ views on impact of market downturn on their 401(k) plans and participants* *“Getting Retirement Savings Back on Track: Employer views on the 401(k) and Financial Education in the Workplace” is a report prepared by CFO Research in collaboration with Charles Schwab, © 2009 CFO Publishing Corp. Reviewing your 401(k) plan? You’re not alone. WHEN: April-May, 2009 AUDIENCE: 219 HR and Finance executives GOALS: Explore best practice management of today’s 401(k)

4. 4 Plan sponsors shared: E lements of 401(k) plans that are vital to success How to add value and limit costs How the system can be improved

5. 5 Research findings: Five themes Employers stay the course on 401(k) plans, but look to improve Employers agree employees need more support and a broader financial education 1 2 3 4 5 Concern with 401(k) stem from market, not system Impact on employee productivity Taking another look at costs How the system can improve

6. 6 The system is largely working, with some improvements needed Financial markets, not the system, are the issue 1 56% ”B”grade 32% ”C”grade 9% ”A”grade 3% ”D or F”grade

7. 7 Market downturn is creating a more difficult work environment Employers see impact on employee productivity say employee concerns over personal finances are creating a more difficult work environment 63% view employees within five years of retirement as “very concerned” about adequacy of planning 88% 2 Movement to more conservative investments and increase in loans Overall - not widespread flight, most employees are staying the course

8. 8 Employers agree: Employees need more support say that employee requests for 401(k) advice have increased since September 2008 57% view advice as important to provide with the plan 87% are very satisfied with their ability to provide advice 36% 3

9. 9 62% 5-10% 10% Schwab Advice Stats of plan sponsors with 401(k) plans are making advice available of participants use advice increase in participants’ savings rates out of pay, (nearly double) with advice Participants who receive advice are less likely to make impulsive changes based on the market 1 Charles Schwab advice stats, 2008 1

10. 10 An emerging need for broader financial education 3 39% 66% 5% have seen employee requests for advice beyond the 401(k) increase since September 2008 believe that offering broader financial advice is more important than a year ago of employers currently offer broader financial education – but many employers view employee requests + productivity impact as reason to do more Employers can play an important role in building financial literacy

11. 11 Schwab’s Rethinking Retirement research reveals : Americans see their workplace as a trusted source of financial guidance 7 out of 10 American workers would like their employer to provide broader financial advice 2 Age Wave and Schwab, Rethinking Retirement Study, 2008 2

12. 12 1/4 of respondents have either suspended their match or are considering doing so Taking another look at costs 4 Some employers suspend match – but many more view this negatively But 96% report that the matching contribution is the most important feature of the retirement plan

13. 13 Other cost-saving techniques 26% 25% 19% 15% 4% of respondents limit automatic enrollment to certain employees offer more individualized 401(k) advice, as opposed to broader education campaigns, brochures and group meetings increase the availability of automated services, such as e-statements decrease employer matching contributions change to funds with lower operating expense ratios, including index funds

14. 14 How the system can improve 5 WHAT’S NEEDED: Improved plan flexibility and greater participant resources 86% of respondents said to raise the ceiling on maximum contributions 76% agreed to make 401(k) advice more available 50% agreed to halt mandatory withdrawals for 70+ employees or they prefer to modify the rule 54% agreed to allow loans, up to limit without penalty, but cautioned the long term affect on savings

15. 15 WHAT’S NOT NEEDED: Greater government involvement. Employers are concerned with administrative inefficiency and less control over needs of their own plan. 58% were opposed to creating a government run plan, citing this as the most negative impact for employees 70% say that a government run system would have a negative impact on employers

16. 16 IN SUMMARY: Employers take a long term view of 401(k) plans and employee support Both employers and employees still believe in the 401(k) system At the same time, employees are making adjustments to portfolios and increasingly seeking advice Employers continue to seek ways to balance plan costs Employers are seeing an emerging need and value in providing broader financial guidance for employees

17. 17 Employees Want More Support of respondents say that employee concerns over personal finances are affecting morale and productivity in the workplace. 63% 87% of respondents agree that providing investment advice is critical of respondents believe that offering broader advice is more important now than a year ago. 66% 17

18. 18 Questions For a full report and other research from Schwab, visit www.scrs.schwab.com

19. 19 Disclosures The Charles Schwab Corporation (Charles Schwab) provides services to retirement and other benefit plans and participants as well as equity compensation plan services and other financial and retirement services to corporations and executives through its separate but affiliated companies and subsidiaries, Schwab Retirement Plan Services, Inc.; Schwab Retirement Plan Services Company; Charles Schwab Trust Company, a division of the Charles Schwab Bank; and Charles Schwab & Co., Inc. Brokerage products and services are offered by Charles Schwab & Co., Inc. (Member SIPC). ©2009 Charles Schwab and/or its affiliates. All rights reserved. LAR (XX-XXXX) XXXXXX (08/09) “Getting Retirement Savings Back on Track: Employer views on the 401(k) and Financial Education in the Workplace” is a report prepared by CFO Research in collaboration with Charles Schwab, © 2009 CFO Publishing Corp. 1 Charles Schwab advice stats, 2008 2 Age Wave and Schwab, Rethinking Retirement Study, 2008