1. 2015 BAW Conference Defined Contribution Programs: Overview and Update Reneè Dash Nancy Ornduff

2. Overview of plans 2

3. Primary retirement plans or 3 SCRSState ORP

4. Primary retirement plans South Carolina Retirement System (SCRS) Provides a monthly retirement income benefit for life based on a statutory formula Benefit amount not subject to investment risk Benefit options at separation from service: Request a refund of member account (employee contributions plus accrued interest) Rollover member account Leave funds in plan and, if eligible, draw a monthly benefit at retirement 4

5. Primary retirement plans South Carolina Optional Retirement Program (State ORP) Retirement benefit consists solely of contributions and any related investment gains or losses Entire employee contribution and employer contribution to the employee’s ORP account are fully vested immediately (i.e., belong to the employee) Employee is responsible for drawing down assets to create retirement income Employee bears investment risk Five years to change to South Carolina Retirement System Vendors are MassMutual, MetLife, TIAA-CREF and VALIC 5

6. Supplemental retirement plans South Carolina Deferred Compensation Program (SCDCP) A voluntary, supplemental defined contribution program to help employees save additional money for retirement Consists of a 401(k) plan and a 457(b) plan Recordkeeper is Empower Retirement 6

7. 401(k) plan highlights 2015 employee contribution limit of $18,000 (excludes available catch-up contributions) Distributions upon severance of employment (10 percent early withdrawal tax may apply) In-service distributions upon attainment of age 59 ½ Accepts incoming rollovers from 401(a), 401(k), 403(b) and other eligible plans In-service transfers allowed to purchase defined benefit service credit Allows for loans and financial hardship withdrawals 7

8. 457(b) plan highlights 2015 contribution limit of $18,000 (excludes available catch-up contributions) Distributions upon severance of employment (no applicable early withdrawal tax) In-service distributions upon attainment of age 70 ½ Accepts incoming rollovers from other 457 plans In-service transfers allowed to purchase defined benefit service credit Allows for loans and unforeseeable emergency withdrawals 8

9. Defined contribution updates 9

10. South Carolina Optional Retirement Program Online enrollment and open enrollment changes via Electronic Employer Services (EES) Vendor contract changes (effective January 1, 2016) Comprehensive investment menu changes Transparent vendor fees Addition of managed account service MassMutual – Service model changes 10

11. Defined contribution updates South Carolina Deferred Compensation Program Elimination of the 84-month certificate option Participant loan policy changes Available loans reduced from two to one Payroll deduction required for all new loans Addition of in-plan Roth conversion option Business Transformation Project (effective January 1, 2017) 11

12. Food for thought… What is retirement readiness? How can I determine if I’m on track to reach my financial retirement goals? How do I translate my defined contribution balance into a stream of income during retirement? How can I increase my financial IQ? 12

13. Questions 12

14. Business Transformation Project Benefits at Work August 31 – September 3, 2015

15. What is the Business Transformation Project? Collaboration with Public Employee Benefit Authority (PEBA) and its Deferred Compensation Program (Program) Streamline reporting processes and improve efficiencies PEBA contracts with Empower Retirement (Empower) Recordkeeping Administration Communication services 15

16. Business Transformation Project goals Standardize the Program experience for all participants and their employers Maximize the Program’s capabilities Drive positive retirement outcomes for Program participants 16

17. Participating employer requirements Effective January 1, 2017, participating employers will be required to provide: All features of the Program; pretax and post-tax (Roth) 401(K) and 457(b) plans Payroll deduction for loan repayments as of January 1, 2015 Secure, electronic remittance of contributions Comprehensive, electronic reporting of participant data through Guided Payroll or Payroll Data Interchange (PDI) 17

18. Employer and participant benefits Demographic Information ensures Empower’s records are up-to-date and helps safeguard participant data Providing termination dates results in faster processing of withdrawal requests Providing salary information helps ensure retirement readiness Electronic remittance is the fastest and safest way for Empower to receive and invest participant contributions 18

19. Payroll Data Interchange (PDI) Required for employers with more than 25 employees Comprehensive file of employee information – Updated in conjunction with your payroll Employers already gather the required data for payroll administration – Eliminates the need for duplicate data entry 19

20. Information included in the PDI Demographic information - Social Security number (SSN), name, complete address, birthdate, gender, marital status, salary, state of residency Employment information - hire date, termination date, rehire date Contribution information - employee contribution, employer contribution, loan repayment, Roth contributions 20

21. Step-by-step guide Step 1: Complete the payroll data form Step 2: Gain access to the Plan Service Center Step 3: Set up electronic banking Step 4: Set up your payroll processing Step 5: Review deferral and loan files 21

22. How do I implement PDI? Your Empower Retirement account manager and Plan Technical Support will be with your every step of the way! Review data requirements for your file Prepare your test file to upload through the PSC website Assist with the mapping process Contact you when Empower is ready to process your first file and work to resolve any issues 22

23. Empower resources Plan Technical Support - 800.695.4952 – 8:30 a.m. to 8 p.m., Monday - Friday Caryn Davis 303.737.3036 caryn.davis@empower-retirement.com caryn.davis@empower-retirement.com Sheila Perkins 303.737.6562 sheila.perkins@empower-retirement.com sheila.perkins@empower-retirement.com Monthly Plan Service Center webinars and online demonstrations of the PSC 23

24. Additional employer resources 24

25. Employer webpage www.southcarolinadcp.com Click on “Employers” tab – Enrollment kits order form – Annual Leave worksheet – 401(k) Plan document – 457 Plan document – Plan Service Center webinar 25

26. Program procedures New enrollments Employer transfers Contribution changes Annual Leave payout TERI payout 26

27. 2015 contribution limits The 401(k) Plan and 457(b) Plan have separate contribution limits (i.e. contributions to one plan do not count toward the limit of the other plan). 401(k) Plan – $18,000 for under age 50 – $24,000 for age 50 and older (with age 50+ Catch-Up of $6,000) 457(b) Plan – $18,000 for under 50 – $24,000 for age 50 and older (with age 50+ Catch-Up of $6,000) – Up to $36,000 with Special 457(b) Catch-Up 27

28. Local support There are six Retirement Plan counselors and one Retiree Specialist available for: New employee orientations Program seminars Employer training on Plan rules Individual account reviews for participants Lunch and Learn sessions Retirement seminars and individual counseling Webinars 28

29. Your local retirement plan counselors 29

30. Your local office Address: 200 Arbor Lake Drive, Suite 115 Columbia, SC 29223 Phone: 803.754.7997 Email: SCDCP-GW@empower-retirement.com Fax: 803.754.7661 30

31. Questions? 31

32. Disclaimer This presentation does not constitute a comprehensive or binding representation regarding the employee benefits offered by the South Carolina Public Employee Benefit Authority (PEBA). The terms and conditions of the retirement and insurance benefit plans offered by PEBA are set out in the applicable statutes and plan documents and are subject to change. Please contact PEBA for the most current information. The language used in this presentation does not create any contractual rights or entitlements for any person. 32