A Guide to UNDERSTANDINGTHE POTENTIAL COST SAVINGS

and BENEFITS OF ADOPTINGA MULTIPLE EMPLOYER PLAN

Retirement Planning Solutions

for Your Business

PAGE 1

Why Retirement Plans Are Important

Multiple Employer Plans

Benefits of Adopting a Multiple Employer Plan

PAGE 2Audit Costs

Document Preparation Costs

Compliance Testing Costs

PAGE 3

Form 5500 Filing Costs

Investment Underwriting

Plan Design Costs

PAGE 4

Administrative Offload

Fiduciary Responsibilities

PAGE 5

Ease of Adoption

Participant Education Support

About Transamerica Retirement Services

Complimentary Consultation

TABLE OF CONTENTS

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Why Retirement Plans Are ImportantEmployees value working for an employer with a retirement plan in place.

In fact, 47% of full-time employees said they’d prefer a job with excellentretirement benefits with minimum salary requirements vs. a higher salarywith poor retirement benefits.1

This statistic reveals an important point: Employees place a high value onretirement benefits and consider a retirement plan to be a vital part of theiroverall compensation package.

What is a Multiple Employer Plan?A Multiple Employer Plan, also referred to as an MEP, is a retirement plan forbusinesses that typically have a common interest, but that are not commonlyowned. These businesses are referred to as “Adopting Employers” when they electto join the MEP. These plans can be defined contribution (DC) or defined benefit(DB) plans.

What is a Multiple Employer Plan Sponsor?A Multiple Employer Plan Sponsor, also known as an MEP Sponsor, is theorganization that holds the MEP and master contract under which AdoptingEmployers may adopt a retirement plan. An example of organizations that maysponsor an MEP can be a Professional Employer Organization (PEO), or aprofessional association.

What Are the Benefits of Adopting an MEP?There are many benefits for your business to adopt a retirement plan throughan MEP including:

• Potential cost savings, again, compared to operatinga single employer plan on your own, outside of an MEP• Fiduciary Support• Plan Design Flexibility• Rewards for Top Performers• Access to more investment choices• Strong Participant Education Support• Business Tax Deductions*• Employee Retention and Recruitment*• And many more*These are also benefits of a retirement plan in general.

This Guide was developed to help both small and largebusinesses understand what a Multiple Employer Plan (MEP) is,the benefits of adopting an MEP, and the potential cost savingsthat can be realized by your business–when compared tooperating a single employer plan on your own.

ACCORDING TO THE 10TH

ANNUAL TRANSAMERICA

RETIREMENT SURVEY

CONDUCTED BETWEEN

DECEMBER 16, 2008 AND

JANUARY 13, 2009, 56%OF FULL-TIME EMPLOYEES

WHOSE EMPLOYER DOESN’TOFFER A RETIREMENT PLAN

SAID THEY WOULD LIKELY

LEAVE THEIR CURRENT JOB FOR

A NEARLY IDENTICAL POSITION

WITH A SIMILAR EMPLOYER

THAT OFFERED ONE.1

WHAT ARE THE POTENTIAL COST SAVINGS BENEFITS

OF ADOPTING AN MEP?

One of the most compelling benefits your business may realize by adopting an MEP is the costsavings. Let’s take a look at the savings when comparing the hard costs your business mayhave when operating a single employer plan on your own outside of a MEP. 1

Audit Costs:Large employers with single employer plans in particular may benefit from thiscost savings. The law requires that 401(k) retirement plans with more than 100participants be audited annually. An independent, qualified public accountantmust conduct an audit of the plan’s financial statements, including review of theplan’s Form 5500, schedules, internal control practices, and other information.This audit alone can potentially cost more than $5,000.00 each and every year.

Important Note for your Business: By adopting an MEP, your business may beable to avoid paying an accountant for this service, and the audit will typicallybe handled at the MEP Sponsor level.

Document Preparation Costs:When a business offers certain single employer retirement plans such as a cross-tested or new comparability plan, plan documents must be professionally drafted,typically by an attorney. For an individually drafted retirement plan, outside ofan MEP, your business must pay to have the plan drafted, then as laws andregulations change over the years, modifications to the original plan must bemade by restating the plan documents. This maintenance can be quite expensiveover time.

Compliance Testing Costs:Most non-safe harbor 401(k) retirement plans must pass rigorousnondiscrimination tests annually to ensure that the plans are not discriminatory,and continue to qualify for tax advantaged status. Under a single employer plan,a plan sponsor must pay a recordkeeper or a third party administrator (TPA) tohandle this ongoing testing work. These costs can potentially be several thousanddollars per year.

Important Note for your Business: Under an MEP, testing is included for eachAdopting Employer and economies of scale are realized during testing processing.Nondiscrimination testing is streamlined and may be provided as an administrativefee instead of being charged a la carte. Additionally, the work and time associatedwith compliance testing, including preparing census data and providingdocumentation to the recordkeeper is handled by the MEP Sponsor.

Under a Multiple Employer Plan with Transamerica, mid-year testing is availableat no additional cost.

IMPORTANT NOTE FOR YOUR

BUSINESS: DOCUMENT

PREPARATION COSTS ARE

SIGNIFICANTLY REDUCED

FOR AN ADOPTING

EMPLOYER AND MOST

DOCUMENT PREPARATION IS

PROVIDED UNDER THE MEP.

2

Form 5500 Filing Costs:Each year, pension and welfare benefit plans are required to file an annual reportregarding their financial condition, investments, and operations. This annualreporting requirement is generally satisfied by filing the Form 5500. For a singleemployer plan, outside of an MEP, your business will need to pay to handle thisfiling. These costs can potentially be several hundred dollars or more per yearfor a plan sponsor.

Important Note for your Business: By becoming an Adopting Employer of an MEP,you will no longer need to complete Form 5500. Your MEP Sponsor files one Form5500 that captures all of its adopters. If your business is subject to an audit forForm 5500 purposes, it may have to bear only a fraction of the expense, if any at all.

Quarterly Participant Statement Costs:Beginning in 2007, participants in defined contribution plans who have the rightto direct their investments were required to be provided with quarterly benefitstatements. The plan sponsor of a single employer plan may need to pay anoutside service provider to produce and distribute these mandatory statements,and are charged for the printing, handling and postage costs for each participant.

Investment Underwriting:A Multiple Employer Plan’s pricing reflects the combined assets of all its AdoptingEmployers and, using that buying power, can generally obtain lower fees, moreservices, and a more diverse investment choice offering than a small singleemployer plan.

IMPORTANT NOTE FOR YOUR

BUSINESS: UNDER AN MEP,STATEMENT COSTS MAY BE

REDUCED SINCE THIS TASK

CAN BE COMPLETED BY

TRANSAMERICA AND AS

PART OF OUR SERVICE;STATEMENTS ARE MAILED

WITHIN 10 BUSINESS DAYS

OF EACH QUARTER’S END.2

3

PLAN DESIGN COSTS

Plan design can be complex and often requires an experienced professional to develop aplan design that will suit each company's employee demographics and meet their goal forestablishing the retirement plan.

Plan design includes analyzing demographics to determine the best options for employeeeligibility, vesting schedules, contribution types, (both for the employer and employee),nondiscrimination testing, benefit payments, loans, withdrawals, and payment of plan fees.

Furthermore, plan design alternatives must be considered based on the unique aspectsof your business. This includes in-depth analysis in determining which plan type best suitsyour business’ needs. Should you adopt a cross-tested or age-weighted plan, a profit sharingonly plan, a profit sharing with 401(k), a 401(k) with an automatic enrollment feature, a safeharbor plan, or some other type of plan?

Your business won’t lose any of these critical plan design alternatives–in fact, your MEPSponsor enables you to take advantage of the plan efficiency, without sacrificing the myriadof plan design alternatives available under a single employer plan.

Administrative OffloadA major consideration that is critical for your business is the amount ofadministration man hours that a retirement plan requires, and theadministrative relief that may occur as a result of adopting an MEP.

Underestimating the administration required to properly operate a 401(k) planis a common mistake. By adopting an MEP, Adopting Employers can avoid asignificant number of tasks including, but not limited to:

• Annual and mid-year nondiscrimination testing• Employee eligibility tracking• Contribution limit tracking• Contribution remittances• Payroll processing• Distribution processing• Distribution of participant statements• Investment reviews• Loan processing• Compliance and legislative supervision• Form 5500 filing• And many more

Consider the amount of time someone in your company might spend on thesetasks. Also consider the time that would be taken away from their normalresponsibilities. Most businesses find that adopting an MEP saves them notjust money but also time!

Fiduciary ResponsibilitiesWhat does the term fiduciary responsibility mean?Fiduciary responsibility can be thought of as a relationship imposed by law wheresomeone has voluntarily agreed to act in the capacity of a "caretaker" of another'srights, benefits, and retirement plan assets.

The fiduciary has a legal obligation to carry out its plan responsibilities with thehighest degree of prudence, good faith, honesty, integrity, service and undividedloyalty to the beneficiaries’ interests. In this case, retirement plan participants.This good faith has been interpreted to impose an obligation to act reasonably inorder to avoid negligent handling of the participants’ interests as well as the dutynot to favor anyone else's interest (including the trustees own interest) over thatof the participant.

By adopting an MEP you will receive substantial fiduciary support. For example,the fiduciary responsibility to select and monitor your plan’s investments ismanaged by your MEP Sponsor.

Transamerica provides MEP Sponsors with tools to help handle the requiredtracking, documenting, and monitoring of this important task, including:

• A Fiduciary Management ProgramSM along with a Fiduciary Warranty,3 and• A proprietary, due diligence process for selecting and monitoring theinvestment choices known as the Transamerica Investment Monitor4 (TIM)process. TIM and quarterly Investment Scorecards5 help you fulfill this part ofyour fiduciary responsibility, and are provided as resources.

Many small- to mid-size companies may not have the resources to manage aretirement plan from a fiduciary standpoint. MEP Sponsors assume a fair amountof fiduciary responsibility on behalf of Adopting Employers.4

Ease of AdoptionBy joining an MEP with Transamerica, you may adopt your retirement plan onlinewith just a few simple key strokes, and trained professionals are available to assistyou with questions during the adoption process. Paper adoption is also available.

Participant Education SupportBy joining an MEP with Transamerica, you will also have access to an arsenal ofaward-winning6 tools and resources to enroll and educate your employees andparticipants.

Transamerica offers:Pre-Enrollment Materials such as:

• Educational payroll stuffers• Enrollment workshop posters, and• Educational posters

Enrollment Tools such as:• Transamerica’s award-winning enrollment kits6

• Enrollment workshops• Enrollment videos• Enrollment workshop conference calls• Online enrollment workshops, and• Online enrollment

Investment Education & Planning Tools are available such as:• Employee educational seminars• An award-winning participant Web site6

• Retirement Planning Assessments7

• Investment Fact Sheets• Participant newsletters• E-Tips and more.

Many more tools are at your disposal, and several are available in both Englishand Spanish.

About Transamerica Retirement ServicesTransamerica Retirement Services8 (“Transamerica”) is a top retirement plan provider9

with more than 15,000 retirement plans, totaling more than $13.2 billion in assets.10

Specifically, Transamerica has nearly a decade of experience in servicing MultipleEmployer Plan Sponsors,11 and retains thousands of Adopting Employers.11

Are you Ready to Learn More?As you can see the advantages of adopting an MEP are tremendous. If you would like tolearn more or receive a complimentary consultation, please do one of the following:

1. Contact your Multiple Employer Plan Sponsor2. Contact Transamerica’s Special Markets

at (866) 393-8967 24 hours a day3. Send an e-mail to SpecialMarkets@transamerica.com

5

TRS 5376-0709

Footnotes:Transamerica Financial Life Insurance Company is an affiliate of Diversified Investors Securities Corp.

All cost savings mentioned are estimates and may vary depending on TPA, advisor, or attorney fees.

Transamerica Retirement Services and its representatives cannot give ERISA, tax or legal advice. This material is provided for informational purposesonly based on our understanding of material provided and should not be construed as ERISA, tax or legal advice. Clients and other interested partiesmust consult and rely solely upon their own independent advisors regarding their particular situation and the concepts presented here. Although care hasbeen taken in preparing this material and presenting it accurately, Transamerica Retirement Services disclaims any express or implied warranty as to theaccuracy of any material contained herein and any liability with respect to it.1 This survey was conducted online within the United States by Harris Interactive on behalf of Transamerica Center for Retirement Studies betweenDecember 16, 2008 and January 13, 2009 among 3,466 full-time and part-time workers. Potential respondents were targeted based on job title andfull-time and part-time status. Respondents met the following criteria: All U.S. residents, age 18 or older, full-time workers or part-time workers in for-profit companies, and employer size of 10 or more. Results were weighted as needed for the number of employees at companies in each employee sizerange. No estimates of theoretical sampling error can be calculated; a full methodology is available. About Harris Interactive® Harris Interactive is aglobal leader in custom market research. With a long and rich history in multimodal research that is powered by our science and technology, we assistclients in achieving business results. Harris Interactive serves clients globally through our North American, European and Asian offices and a networkof independent market research firms. For more information, please visit www.harrisinteractive.com.

The Transamerica Center for Retirement Studies® (“The Center”) is a non-profit corporation and private foundation. The Center is funded bycontributions from Transamerica Life Insurance Company and its affiliates or other unaffiliated third-parties. For more information about TheTransamerica Center, please refer to www.transamericacenter.org.

2 Transamerica will achieve the following guaranteed turnaround times, or we will waive your administrative service fee for that service: (1) Participanttransactions received via Interactive Voice Response System or participant Web site prior to 4 p.m. Eastern Time will be processed the same businessday. (Transactions received after 4 p.m. will be processed the next business day.) (2) Employee enrollment kits will be mailed within 5 business daysof receipt of the request. (3) Participant statements will be mailed within 10 business days of quarter-end. (4) Contributions will be allocated and ACHrequested within 1 business day of receipt of data in good order via the payroll validator. (5) Participant distributions and loans will be processed within3 business days of receipt of complete and accurate request. (6) Takeover contributions will be allocated within 10 business days of receipt oftransferred assets and complete, accurate (reconciled) participant records.

3 Transamerica Retirement Services reserves the right to eliminate or change the terms of this Fiduciary Warranty prospectively at any time. See FiduciaryWarranty for terms, limitations and requirements.

4 The Transamerica Investment Monitor Methodology is Transamerica Retirement Services’ (“Transamerica”) proprietary rating methodology. Transamericareserves the right to modify, eliminate, or add criteria at any time.

5 The Investment Scorecard is the result of the Transamerica Investment Monitor’s due diligence process for each of Transamerica Retirement Services’investment choices. All ratings are based on Transamerica Retirement Services’ (“Transamerica”) proprietary rating methodology. Ratings do notguarantee a profit and it is still possible to lose money from that investment choice. Transamerica reserves the right to modify, eliminate, or add criteriaat any time.

6 Transamerica Retirement Services' communication materials have received awards from various organizations, including the Awards for PublicationsExcellence (APEX) in 2007-2008; Communicator Awards 2005-2007; DALBAR, Inc. in 2005-2007; Hermes Creative Award in 2007 and 2008; andthe Insurance and Financial Communicators Association (“IFCA”) in 2008. For more information please refer to the Web site www.TA-Retirement.com.

7 The Retirement Planning Assessment is an employee impact statement, and is an optional feature that may depend on the Multiple Employer Plan’s assets.8 Transamerica Retirement Services (“Transamerica”), a marketing unit of Transamerica Financial Life Insurance Company (“TFLIC”), 4 ManhattanvilleRoad, Purchase, New York 10577, and other of its affiliates, specializes in the promotion of retirement plan products and services. This product isavailable from Transamerica Retirement Services under contract form number TA-AP-2001-CONT, a group variable annuity contract underwritten byTFLIC. TFLIC is not authorized and does not do business in the following jurisdictions: Guam, Puerto Rico, and the U.S. Virgin Islands. Fees and chargesmay apply. For complete information, contact your Transamerica representative.

9 Transamerica Retirement Services received 40 “Best in Class” cups for sponsor and participant services in PLANSPONSOR® Magazine’s annual DefinedContribution Survey of retirement plans. The 40 “Best in Class” designations—21 in the micro (<$5 million) and 19 in the small ($5 million to $50million) markets—rank Transamerica Retirement Services among the top cup recipients of the 47 providers evaluated in the micro- and small-planmarkets. The results of the Defined Contribution Survey were announced in the November 2008 issue of PLANSPONSOR® Magazine. The survey pollednearly 6,000 clients of 52 defined contribution plan providers. “Best in Class” cups are awarded to plan providers who score in the top quartile of aspecific category. See the November 2008 issue of PLANSPONSOR® Magazine for complete results.

10As of December 31, 2008.11Transamerica Retirement Services has more than 70 years of experience in the retirement services business and is the top provider of retirement plans,including eight years serving Multiple Employer Plans (MEPs). Transamerica retains over 5,000 Adopting Employers as of December 31, 2008.