National Security Retirement Plan™

Small business owners not only run the company -- they are often responsible

for the day to day management and oversight of the company’s retirement plan.

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Most businesses in America are small and privately owned

Over the past few years, tightening regulations and ongoing market volatility have dramatically increased the complexity of managing a company’s retirement plan. Even though most plan sponsors

outsource the operational aspects of plan administration, the plan sponsor is still responsible for ensuring that the plan is operated in compliance with federal regulations.

Faced with mounting pressure to reduce costs and satisfy regulatory requirements, plan sponsors are finding their fiduciary role overwhelming.

According to a study of small retirement plans1 conducted by Briskin Consulting (July 2010), most plan sponsors feel that they are not getting the help they need in these critical areas.

Shifting Focus

A decade ago, passing nondiscrimination tests and offering top-performing funds were a plan sponsor’s main concern. With the passage of the Pension Protection Act of 2006, plan sponsors concerns have shifted to their fiduciary responsibilities -- with increased scrutiny on ways to reduce the cost for managing the plan. “I keep asking…how much we’re paying in investment fees…but I never get a straight answer.” 2

According to a survey by Hewitt Associates, 74% of employers are making efforts to reduce 401(k) plan expenses, up from 57% in 2007. Moreover, according to the study, 51% of employers are looking for lower-cost investment options.

The Briskin study also revealed that the major areas of dissatisfaction center around a lack of support and assistance in helping sponsors fulfill their fiduciary obligations and comply with Department of Labor (DOL) regulations.3 Nearly two-thirds do not feel that there is enough transparency around disclosure of investment fees and revenue-sharing arrangements. Over half find that managing plan-related activities to be difficult and time consuming.

Reducing Your Fiduciary Responsibility

Instead of trying to deal with these complex issues which distract you from running your business, the best solution may be to adopt a Multiple Employer Plan (MEP). Under IRC 413(c)4 a MEP is a qualified tax-deferred retirement plan which non-related employers may adopt in order to provide retirement benefits to their employees.

The multiple employers are treated as a single employer solely for the purpose of the operation and management of the MEP. Each company that joins the MEP is referred to as an Adopting Employer.

A MEP may be established and maintained by a third party who acts as the Principal Plan Sponsor and accepts the fiduciary responsibility for managing the plan. The operation for plan administration and management of plan assets are transferred to the Principal Plan Sponsor which alleviates the burdens of fiduciary responsibility from the employers who join the MEP.

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NATIONAL SECURITY RETIRMENT PLAN™

The National Security Retirement Plan (NSRP), a multiple employer plan, provides employers with an alternative. By joining the NSRP, employers transfer their administrative duties and fiduciary responsibility for managing the plan and hiring service providers to the Principal Plan Sponsor of the NSRP.

Through the NSRP, your employees will realize a dramatic cost reduction for plan services and the investments. Plan services are delivered at a total annual cost of 1.025% based on plan assets. The cost for the model portfolios range from 0.22% to 0.35% and depend on the model chosen.

Principal Plan Sponsor

National Security Retirement Plan, LLC (NSRP LLC) located in Portland, Ore., is the Principal Plan Sponsor of the National Security Retirement Plan™. Since 1982 the founder and managing member, Darwin Abrahamson, has worked with pension administrators and plan sponsors by assisting them in fulfilling their duties to plan participants.

Americans Workers Depend on 401(k) Plans

American workers depend on 401(k) and similar defined contribution plans for their retirement income. A study commissioned by the Transamerica Center for Retirement Studies® and conducted by Harris Interactive (April 2010), illustrates the importance of 401(k) employee-funded retirement plans and the effect such plans have on employee retirement savings.

American workers believe company-sponsored retirement benefits are important, rating employee-funded plans as second in importance only to health insurance.5

Workers who have retirement benefits offered to them are more involved with their retirement planning and start saving for retirement at an earlier age.6

About 71 percent of workers have access to an employee-funded plan [such as a 401(k) plan] and 77 percent contribute or have money invested in the plan.7

Despite the fact that the average contribution rate has steadily declined in recent years, workers with company sponsored retirement plans are more active savers compared to workers without a plan. 8

American workers’ confidence in a comfortable retirement continues to decline. Not having enough money to meet basic financial needs during retirement is a key fear -- with half of workers guessing at the amount of money they will actually need in retirement.9

More than 40 percent of Americans expect their employee-funded plans to be their main source of retirement income; however, more than two in three workers think they could work until age 65 and still not have saved enough for retirement.10

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Catherine Collinson, president Transamerica Center for

Retirement Studies, explains, “Our study of American

workers clarifies the broader influence workplace

retirement plans have on an employee’s overall

retirement preparedness and can significantly impact

savings.” 11

Unfortunately, American workers confidence in a

comfortable retirement is steadily declining. “Outliving

their money and not being able to meet basic financial

needs during retirement continue to be key fears

among workers. . .” 12

Two Glaring Mistakes

The Transamerica study revealed two glaring mistakes plans continue to make. A failure to adopt:

(a) automatic enrollment and (b) automatic employee contribution escalation.13

Less than one in four plans offer auto enrollment. Among plans that do offer auto enrollment, the median contribution rate is just 3 percent; a data point that has not budged over the past three years. Even assuming a generous company matching 401(k) contribution, employees are still saving at about half the rate that is needed.

Many plan sponsors say they don’t want to run the risk of annoying employees by adding auto enrollment and auto escalation to a 401(k) plan. Interestingly, the study reported that 90 percent of employees who were auto enrolled into a plan were fine with it which is a resounding approval rating indicating that employees are very accepting of any nudges which results in their saving more.

Pamela Hess, director of retirement research at Hewitt, mentioned that one plan sponsor increased the default contribution rate to 6 percent of salary and another set a default at a maximum of 8 percent. In both instances, employees didn’t storm HR. “There is typically a fear of how participants might react. But most sponsors hear very little noise,” says Hess.14

That’s in sync with a report by Bob Veres in his column for Financial Planning magazine. Laying out research from Harvard economics professor David Laibson, Veres reported that when the default contribution was 2% of salary, almost 100% of the workers made 2% contributions-even though the plan allowed up to 15%, with employer matches rising accordingly.15 When the default contribution went up, those higher contribution rates became the norm-until about 15% of salary. Even at the higher rates, employees didn’t react by opting-out of the plan altogether. Instead, the majority just dialed down their contribution rate.

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Principal Plan Sponsor

National Security Retirement Plan, LLC

National Security Retirement Plan, LLC (NSRP LLC) is the Principal Plan Sponsor of the National Security Retirement Plan™ (NSRP), a multiple employer plan (MEP). Companies that join the NSRP are referred to as an adopting employer.

With the passage of the Pension Protection Act of 2006, plan sponsors have a heighten awareness of their fiduciary duties and responsibilities; including, a mandate to reduce costs. By joining the NSRP‚ adopting employers transfer their administration duties and fiduciary responsibility for those duties to the Principal Plan Sponsor.

Service Providers - National Security Retirement Plan™

ERISA § 3(16) Plan Administrator

National Security Retirement Plan, LLC

The plan administrator is the fiduciary named by the plan sponsor and identified in the plan document that has the discretionary authority to manage the plan. National Security Retirement Plan LLC serves as the plan administrator for the National Security Retirement Plan (NSRP) and is responsible for selecting each service provider who independently provides services to the plan. Other duties include establishing a custodial account for holding plan assets and filing IRS Form 5500.

Annual fee: 0.40 percent based on a sliding scale as assets grow the plan administrator’s fee decreases

ERISA § 3(38) Investment Manager

MÊTIS Investment Strategies, LLC

MÊTIS Investment Strategies, LLC (MÊTIS) is an ERISA §3(38) investment manager.16 MÊTIS provides the National Security Retirement Plan™ with investment management services; including, fiduciary discretion to select the investment options17 used to construct model portfolios for plan participants. MÊTIS specializes in strategically managed Exchange Traded Fund (ETF) models.

MÊTIS constructs model portfolios by selecting asset classes appropriate for the models, monitoring the investments‚ and replacing investment options, as needed. The models are part of a broad range of investments designed as age-appropriate asset allocation models offered to participants as qualified default investment alternatives (QDIAs) in compliance with ERISA §404(c)(5).

Annual fee: 0.15 percent

Third Party Administrator

Retirement Solutions Advisors, LLC

Retirement Solutions Advisors, LLC (RSA) is a third party administrator. Administrative services provided by RSA include maintaining plan provisions within the INR Sponsor Portal, processing distribution requests, preparing signature-ready IRS Form 5500 and any other required IRS schedules. RSA does not charge a fee for processing distribution requests.

Annual fee: 0.05 percent

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Record Keeper

Invest n Retire, LLC

Invest n Retire‚ LLC (INR) provides record keeping and transaction processing services to the National Security Retirement Plan™. INR provides employees with a Participant WEB site which enables them to manage their investment account by providing online instructions.

Participants may view general financial and investment information online which follows the Department of Labor (DOL) guidelines (general investment concepts are not considered investment advice by the DOL), and includes concepts such as risk and return, dollar-cost averaging‚ compounding‚ diversification, and saving for retirement on a tax-deferred basis. Participants may perform what-if scenarios using INR’s retirement calculator which illustrates the effect of increasing or decreasing contributions. Participants may view plan notices (QACA, Safe-harbor, and QDIA) and the Summary Plan Description which includes general terms of the plan. The WEB site provides the participants with distribution request forms, beneficiary designation form, and a rollover form.

INR conducts Webinars for the employees of each adopting employer to provide them with an overview of the INR Participant WEB site. INR may instruct the employees in logging into the WEB site, changing their password, changing their deferral contribution, changing their asset allocation model (if desired), using the retirement calculator, directing employees to plan notices and forms, and answer basic questions about the site.

Annual fee: 0.40 percent based on a sliding scale as assets grow the record keeping fee decreases

Custodian

Huntington National Bank

Plan assets are held in custody at Huntington National Bank.

Annual fee: 0.025 percent

PAYMENT FOR PLAN SERVICES

Fees charged for plan services are paid from participant accounts and deducted from plan assets. The total annual fee for plan services is 1.025% based on plan assets and the cost for the model portfolios range from 0.22% to 0.35% and depends on the model chosen.

PAYROLL SERVICES

Ceridian offers bi-directional payroll integration processing through an automatic secure FTP transmission of payroll information; including, employee online contribution changes. Working with Ceridian assists in maintaining efficiency in processing payroll files by minimizing errors.

Each adopting employer pays for payroll services provided to the company. Each payroll company will

provide you with a fee quote.

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Ceridian offers Bi-Directional Payroll Integration

Ceridian, a leading provider of managed human resource‚ employee benefits administration‚ and payroll outsourcing solutions, provides bi-directional payroll integration for the National Security Retirement Plan™. Bi-directional payroll integration removes the manual tasks and responsibilities that a company (adopting employer) usually has to perform when managing a 401(k) plan.

Bi-directional integration allows for efficiency in managing the plan, lowers over-all costs, and relieves the employer from having to perform numerous tasks involved in managing a plan. Through bi-directional integration the record keeper and payroll provider share information by secure FTP transmission without manual intervention with the added benefit of minimizing errors.

1. Automatic enrollment: After the employee satisfies the eligibility requirements for joining the NSRP, the default contribution election of 3.00% is sent to Ceridian by FTP transmission which imports the employee’s contribution election within Ceridian’s payroll system.

2. Participants may make contribution election changes through the Participant Web site which is sent to Ceridian by FTP transmission at the end of each day (12:00 midnight).

3. Company match is set-up within the payroll system and auto calculates the employer’s matching contribution each pay period.

4. Age: An asset allocation model designed by the investment manager as a qualified default investment alternative (QDIA) is assigned to the employee based on the employee’s age.

5. Payroll deposits are automatically processed by ACH for the employees’ salary deferrals and employer matching contributions by pulling the amounts from the company’s payroll bank account and deposited into the NSRP custodial account for the benefit of the employees.

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Plan Features - National Security Retirement Plan™

Plan features include safe-harbor provisions which eliminate testing requirements.

1. Elective deferral contributions include: Pre-tax, ROTH, and Catch-up

2. Eligibility service requirements for employee elective and employer matching contributions:

age 21 and three (3) months of service (plan entry date is the first day of the month

following the date the employee satisfies the eligibility requirements).

3. Automatic Enrollment: Eligible employees will automatically be enrolled in the plan at an

initial deferral contribution rate of three percent (3%). The deferral rate will be subject to

automatic escalation under a Qualified Automatic Contribution Arrangement (QACA),

unless the employee makes an affirmative election to change his or her contribution rate.

4. If an employee is already contributing to an adopting employer’s plan, at a rate higher than

zero percent (0%), the employee’s contribution rate will not change and the employee will

not be subject to automatic contribution escalation under the QACA.

5. Qualified Automatic Contribution Arrangement (QACA) - the initial deferral contribution

rate is 3% with 1% escalation each plan year up to a maximum deferral rate of 6%.

6. Eligible Automatic Contribution Arrangement (EACA) allows employees who are

automatically enrolled to opt-out within a 90-day period and receive a refund of any

deferral contributions made on behalf of the employee - without paying a 10% penalty.

7. QACA Matching Contribution is 100% of first 1% deferred and 50% of next 5% deferred for a

total minimum QACA safe-harbor match of 3.5%.

Example: Mary earns $30,000 in compensation during calendar year 2010. Mary contributes

6% of her compensation and her employer makes a matching contribution equal to $1,050.

Match: $300 + $750 = $1,050 Math: (($30,000 x 1%) + ($30,000 x 5% x 50%)) = $1,050

8. QACA Matching contributions are subject to a two-year Cliff vesting schedule.

9. Qualified Default Investment Alternatives (QDIA) are asset allocation models (AAM)

designed by the investment manager. Each employee will be defaulted into an age-based

QDIA model.18 Once an employee logs into the Participant WEB site, the participant may

change his or her default model, if desired.

10. Online summary plan description (SPD) and plan notices

a. Safe-Harbor Matching Contribution

b. Qualified Default Investment Alternative

c. Qualified Automatic Contribution Arrangement

11. Hardship distributions are not permitted.

12. Loans are not permitted unless originating under the adopting employer’s prior plan and

transferred to the NSRP as a qualified transfer distribution during the conversion process.

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Frequently Asked Questions

Why is the National Security Retirement Plan™ (NSRP) designed as a safe-harbor plan?

The National Security Retirement Plan™ intent is to be a safe-harbor 401(k) plan in order to lower cost and increase efficiency in the operation and management of the plan.

What is nondiscrimination testing?

The U.S. Government wants to ensure that 401(k) plans do not favor highly compensated employees (HCE) over non-highly compensated employees (NHCE).

A safe-harbor plan which satisfies the nondiscrimination rules for elective employee deferrals and employer matching contributions is exempt from nondiscrimination testing which consists of:

A. Actual Deferral Percentage (ADP) test which compares the deferral percentage of highly compensated employees (HCE) to non-highly compensated employees (NHCE).

B. Actual Contribution Percentage (ACP) test which compares employer matching contributions between the HCEs and the NHCEs.

C. Top-Heavy test which determines if the account balances of key employees is greater than 60% of the total assets of the plan.

Advantage of a Safe-Harbor plan: If you are willing to make a minimum contribution on behalf of your employees, you will be able to maximize your own personal contributions to the plan. Otherwise, if say only a third of your employees choose to put money into the plan, a formula would apply for nondiscrimination which may limit the amount you personally, as a highly compensated employee or key employee, may be able to put into the plan.

How does a safe-harbor plan that otherwise would be top-heavy avoid top-heavy status?

As part of the Economic Growth and Tax Relief Reconciliation Act of 2001 (EGTRRA), Congress offered safe-harbor 401(k) plans an opportunity to be exempt from the top-heavy rules. To be exempt and eliminate the need for top-heavy testing, the plan must consist solely of elective deferrals and contributions which satisfy the ADP/ACP safe-harbor test.

Can an adopting employer maintain other qualified plans for its employees?

No. In order to satisfy the IRS rules for exemption from ADP, ACP, and top-heavy testing, an adopting employer may not maintain any other plans for its employees.

Can I make additional contributions for my employees?

No. In order to be exempt from testing, an adopting employer cannot make additional discretionary non-elective profit sharing contributions or additional matching contributions.

When I join the NSRP what happens to my current plan?

Your current plan will merge with the NSRP and the assets in the plan will transfer to the NSRP.

Why is my current plan merging with the NSRP instead of terminating?

If your current plan terminated, you would be required to distribute the assets to your employees.

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Couldn’t each employee rollover their account into the NSRP if my current plan terminated?

Yes. However, it is rare for employers to terminate a plan and distribute the assets to their employees. According to Ted Benna, President of the 401k Association, “When employees receive a distribution they often spend the money rather than rolling it over to a new plan. Then they need to start building a new retirement nest egg.”

Can I join the NSRP at any time during the year?

Companies that do not have an existing retirement plan may join the NSRP at any time.

Even if you have an existing plan, you can join the NSRP at any time during the year. However, with an existing plan, you should continue to maintain the plan until its plan-year-end. This important step will assist you in avoiding additional ADP and ACP testing or become subject to testing, if your plan is a safe-harbor plan.

Even though you continue your old plan until its plan-year-end, once you adopt the NSRP your payroll deposits will start flowing into the NSRP instead of being deposited into the old plan.

At the end of the plan year for the old plan, you will merge the old plan into the NSRP by transferring the assets to the NSRP. The final step is to complete a final Form 5500 demonstrating that your old plan no longer exists because it merged into a new plan.

Does it matter what date the assets transfer from my old plan to the NSRP?

Yes. When completing the final Form 5500, the date the assets transfer to the NSRP is the date of the plan-year-end for your old plan, rather than the date all of the administrative details associated with physically transferring the assets have been completed.

Who is responsible for filing the final Form 5500 for my old plan?

You are responsible for filing and paying the cost for the final Form 5500.

Who should complete my final Form 5500?

You should consult with your third party administrator (TPA).

Are there any special instructions I should be aware of in completing my final Form 5500?

Yes, your final Form 5500 should be completed in accordance with IRS instructions for plan merger. You should consult with your third party administrator (TPA) before completing your final Form 5500.

General guidelines in completing your final Form 5500

The Internal Revenue Service (IRS) requires the sponsor of the plan to file a final Form 5500 when a plan is terminating and when a plan is merging into another plan. The final Form 5500 serves as a notification to the IRS that no further Form 5500 will be filed for the plan.

The preparer will check box (3) at Line B on Form 5500 and show a zero participant count at lines 7a through 7g. The asset values as of the last day of the plan year as reported on Schedule H or Schedule I must be zero.

Schedule H -- Lines 4k and 5a and Schedule I – Lines 4j and 5a (relate to plan termination) must be completed as though the plan was terminated. At line 5b of either schedule, report the transfer of assets to the National Security Retirement Plan.

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If my old plan is subject to testing, who is responsible for completing the testing?

You are responsible for completing and paying the cost for any required testing for your old plan.

Who should perform the testing for my old plan?

You should consult with your third party administrator (TPA).

What if my TPA is unable to complete the final Form 5500 and perform the testing?

Consult Retirement Solutions Advisors, LLC (RSA) the third party administrator for the NSRP.

If a participant wishes to change his or her model (select a different asset allocation model) how often can that be done and is there a fee for making the change?

Participants may change their model at any time online and no fee is charged for changing models.

How are payroll files for the NSRP submitted to the record keeper, Invest n Retire® (INR)?

INR works with several national payroll providers who transfer payroll files to INR electronically for each adopting employer (company) that joins the NSRP. This provides efficiency in processing payroll files and crediting payroll deposits to the custodian. Payroll deposits are also transferred electronically to the custodian by ACH deposit from each company’s payroll account.

How can a participant make a distribution request?

Participants may request distributions online.

Who is responsible for approving distributions?

Retirement Solutions Advisors (TPA) is responsible for reviewing and approving distribution requests.

Is there a fee for processing distributions? No

If our employees have loans in our current plan, can the loans be transferred to the NSRP?

Yes, the NSRP accepts existing loans on conversion. However, no new loans are permitted.

Do you charge a fee for converting loans or maintaining loans? No

Do you charge a set-up or conversion fee when a company joins the NSRP? No

Are any employees excluded from participating in the NSRP?

Yes, certain classes of employees are excluded from participating in the NSRP and include: Union employees, non-resident aliens, temporary employees, leased employees, and contract employees.

Do you provide education and support to the participants?

Invest n Retire® (INR) conducts monthly Participant Overview Webinars on the second Wednesday of each month for employees so that they may have an overview of the INR Participant Website and ask questions. INR has a proprietary retirement calculator to assist participants in determining how much they need to save in order to reach their retirement goal. INR also provides general educational information online such as the basics of investing, FAQ, articles, and the “concept of retirement.”

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The NSRP offers fiduciary services of an ERISA § 3(38) investment manager and the Principal Plan Sponsor acts in the capacity of an ERISA § 3(16) plan administrator. Does the NSRP also include the services of an ERISA § 3(21) advisor?

No. In general an ERISA § 3(21) fiduciary is an advisor who renders advice with respect to the investments of the Plan and serves in a co-fiduciary capacity to the plan which means that the advisor shares fiduciary responsibility and liability for the investments with the other plan fiduciaries.

ERISA section § 3(38) defines an investment manager as a fiduciary who is responsible for providing investment advisory services with one important distinction of possessing discretionary control over the investment decisions for the plan. The 3(38) fiduciary removes the other fiduciaries of the plan from the ongoing investment decision-making process and the liability for those decisions.

Since NSRP, LLC hired an ERISA § 3(38) investment manager who accepted the fiduciary responsibility with discretionary control for selecting, managing, and monitoring the investment options offered in the plan; including, designing asset allocation models which are qualified default investment options (QDIAs), the NSRP does not require the services of an ERISA § 3(21) advisor.

Is Invest n Retire, LLC (the record keeper) a fiduciary to the NSRP?

No. Invest n Retire LLC performs ministerial functions for the Plan; has no discretion over the management of the Plan, or with respect to the investment of plan assets and is not acting in a fiduciary capacity under ERISA.

Is Retirement Solutions Advisors, LLC (the TPA) a fiduciary to the NSRP?

No. Retirement Solutions Advisors, LLC performs ministerial functions for the Plan; has no discretion over the management of the Plan, or with respect to the investment of plan assets and is not acting in a fiduciary capacity under ERISA.

If I wish to join the NSRP as an adopting employer, what information do you need?

Basic information about your company and any existing plan is captured through a secure WEB site.

Who will assist my staff through the set-up process and transfer of assets for an existing plan?

Carol Abrahamson, COO Invest n Retire®, carol@investnretire.com or 503-419-2894 x 101.

Are there any restrictions to joining the NSRP?

There is only one restriction. For efficiency in processing payroll files, each company that joins the NSRP, as an adopting employer, must be an existing or new client of Ceridian.

Contact Carol Abrahamson at carol@investnretire.com and 503-419-2894 x 101 so that she can assist you in contacting a Ceridian representation.

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Supplement Electronic Access to Fee Disclosure

National Security Retirement Plan™

To access information about the fees charged to your 401(k) account for services provided to you and for services provided for the administration of the National Security Retirement Plan™ (the “Plan”), log into the Participant WEB site (the “Site”) at www.investnretire.com and click Participant Login.

My Account. Your quarterly statement provides you with fee disclosure for each service provider and the service provided for the fee. The fees are listed on page four of the statement with the annual fee charged and the quarterly fee deducted from your account. If you are charged a fee which is deducted directly from your account for processing distributions or other services, a list will display the type of distribution or service and the fee charged.

You may access the quarterly statement by going to My Account > Quarterly Statement. You may open any of the last four quarterly statements listed in PDF form and view or print the statement.

My Plan. You may also find fee disclosure for each service provider by going to My Plan > Cost for Service which lists each service provider and the annual fee charged for each service. You may also click the link Fee for Investment Options which takes you to the screen Investments > Investment Options for information about the fees deducted from the investments for management services.

Cost for Investments. You may find information about the cost you pay for each investment option available in the Plan by going to Investments > Investment Options. The fee charged and deducted from the investment options for compensation for management services is illustrated in the column Fees as a percent and in the column Fee per $1,000 as a dollar cost per $1,000 dollars invested.

For detailed information about each investment option, you may open the prospectus for the fund by clicking the name of the fund which is highlighted in blue.

You are not charged and no deductions are made from any of the investment options offered in your Plan for 12b-1 fees (marketing fees) or revenue sharing fees (indirect compensation1) paid to a third party. In other words, none of the investments charge a fee which the Department of Labor (DOL) classifies as indirect-compensation (revenue sharing) paid to a third party or fees which the Security and Exchange Commission (SEC) classifies as marketing fees often paid to an investment advisor.

None of the service providers, who provide services to the Plan and to the participants, pay any indirect compensation to a third party.

Designated Investment Alternatives. For information about the designated investment alternatives available in the Plan go to My Plan > Qualified Default Investment Alternative Notice. A summary of the risk/reward characteristics for each investment alternative is available at Investments > Asset Allocation Models and a link is provided to access a report that compares the returns of each model against the indexes which comprise the model (benchmark). A comparison of each investment option against the respective index for the fund may be found at Investments > Investment Options under columns: 1Yr Fund vs. 1 Yr Index, 3 Yr Fund vs. 3 Yr Index and 5 Yr Fund vs. 5 Yr Index.

1

What is indirect compensation? Payment of indirect compensation is perhaps the most confusing topic

surrounding 401(k) plans. The short answer is that indirect compensation is any payment a service provider

receives from sources other than direct compensation from the Plan (participant accounts) or from the plan

sponsor, if the compensation was received in connection with services rendered to the Plan. The simplest

example of indirect compensation would be where Plan X pays Retirement Services (RS) $10,000 for

recordkeeping and consulting, and RS pays ABC Recordkeeper (ABC) $6,500 to do the recordkeeping. The

$10,000 payment to RS is direct compensation and the $6,500 payment to ABC is indirect compensation.

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Principal Plan Sponsor Contact

NATIONAL SECURITY RETIREMENT PLAN, LLC Carol Abrahamson, COO 506 SW 6TH AVE STE 1200 Invest n Retire, LLC

PORTLAND OR 97204 Phone: 503-419-2894 x 101

Email: carol@investnretire.com

As the sponsor for your company’s retirement

plan, the only decision you need to make is

whether you wish to join the National Security

Retirement Plan™ as an adopting employer.

National Security Retirement Plan, LLC is the

Principal Plan Sponsor of the NSRP (the Plan).

NSRP, LLC does not provide investment, tax,

accounting‚ or legal advice.

1 The Briskin Consulting Study of Small-Retirement-Plan Sponsors, by Jeffrey Briskin, Briskin Consulting, July 2010

2 Ibid. 3 Ibid. 4 Under Section 413(c) of the Internal Revenue Code, MEPs are specifically permitted to receive preferential tax

treatment under Title II of ERISA. 5 The Importance of 401(k) Employee-Funded Retirement Plans in the Workplace, commissioned by the

Transamerica Center for Retirement Studies® and conducted by Harris Interactive April 2010 6 Ibid. 7 Ibid. 8 Ibid. 9 Ibid. 10 Ibid. 11 Ibid. 12

Ibid. 13 The Role of Mutual Funds in Retirement and Education Savings‚ Investment Company Institute 2008 Fact Book 14 How to Make Lemonade from your 401k Plan’s Lemons, by Carla Fried, June 2010, CBS MoneyWatch.com 15 Ibid. 16 ERISA §3(38) investment managers may be appointed to manage the investments of a plan with full discretion. 17 The weighted average gross expense ratios for the model portfolios range from 0.24 percent to 0.34 percent.

Model portfolios are constructed using Exchange Traded Funds (ETFs). 18 Department of Labor (DOL) Releases Default Investment Option Safe-Harbor, PlanSponsor.com, 26 Sep. 2006