a Morningstar company

Lifetime Asset Allocation Solutions

Odeh H. Akkawi, CFASenior Consultant

March 23, 2010

2 Ibbotson Associates, a Morningstar Inc. companyFOR INFORMATION AND/OR ILLUSTRATION PURPOSES ONLY. SOURCE: IBBOTSON ASSOCIATES, UNLESS OTHERWISE NOTED. NOT FOR PUBLIC DISTRIBUTION. ©2009 Ibbotson Associates, Inc. All rights reserved. Ibbotson Associates, Inc. is a registered investment advisor and wholly owned subsidiary of Morningstar, Inc. The information contained in this presentation is the proprietary material of Ibbotson Associates. Reproduction, transcription or other use, by any means, in whole or in part, without the prior written consent of Ibbotson Associates, is prohibited.

2 IB0008 App1109

Ibbotson Associates Overview

Dedication to innovative researchFounded in 1977 by Roger Ibbotson

Create customized solutions for institutionsExpertise in asset allocation, manager selection and portfolio construction

Leverage two trusted brandsAcquired by Morningstar in 2006a Morningstar company

Asset Allocation

Manager Selection

Portfolio Construction

3 Ibbotson Associates, a Morningstar Inc. companyFOR INFORMATION AND/OR ILLUSTRATION PURPOSES ONLY. SOURCE: IBBOTSON ASSOCIATES, UNLESS OTHERWISE NOTED. NOT FOR PUBLIC DISTRIBUTION. ©2009 Ibbotson Associates, Inc. All rights reserved. Ibbotson Associates, Inc. is a registered investment advisor and wholly owned subsidiary of Morningstar, Inc. The information contained in this presentation is the proprietary material of Ibbotson Associates. Reproduction, transcription or other use, by any means, in whole or in part, without the prior written consent of Ibbotson Associates, is prohibited.

3 IB0008 App1109

Today

Leading provider of investment advisory services

× $48.0 billion assets under advisement for investment consulting× $13.2 billion assets under management for managed accounts

serving over 9.1 million participants

Experienced investment professionals

× Staff averages 10 yrs investment experience

× Most have either Ph.D., CFA, MBA or combination

Award-winning research

× 2 patents granted for asset allocation and human capital

× 75 research papers written or co-authored

$61.2BTotal Assets

100Clients Worldwide (US, Canada, Europe, Asia)

+

6Graham and Dodd Awards

Data as of September 30, 2009.

4 Ibbotson Associates, a Morningstar Inc. companyFOR INFORMATION AND/OR ILLUSTRATION PURPOSES ONLY. SOURCE: IBBOTSON ASSOCIATES, UNLESS OTHERWISE NOTED. NOT FOR PUBLIC DISTRIBUTION. ©2009 Ibbotson Associates, Inc. All rights reserved. Ibbotson Associates, Inc. is a registered investment advisor and wholly owned subsidiary of Morningstar, Inc. The information contained in this presentation is the proprietary material of Ibbotson Associates. Reproduction, transcription or other use, by any means, in whole or in part, without the prior written consent of Ibbotson Associates, is prohibited.

4 IB0008 App1109

Customized Solutions

+Our Strengths Research and Methodology Brand Independence and Experience

Manager Selection

Our consultants meetwith the client to assess initial need and are involvedthroughout the process

Client Customized Solutions

Portfolio Construction

AssetAllocation

Ibbotson Consultants

Our capabilities can beused separately or incombination to producecustomized solutionsdesigned to meet specific client needs

Client

+

5 Ibbotson Associates, a Morningstar Inc. companyFOR INFORMATION AND/OR ILLUSTRATION PURPOSES ONLY. SOURCE: IBBOTSON ASSOCIATES, UNLESS OTHERWISE NOTED. NOT FOR PUBLIC DISTRIBUTION. ©2009 Ibbotson Associates, Inc. All rights reserved. Ibbotson Associates, Inc. is a registered investment advisor and wholly owned subsidiary of Morningstar, Inc. The information contained in this presentation is the proprietary material of Ibbotson Associates. Reproduction, transcription or other use, by any means, in whole or in part, without the prior written consent of Ibbotson Associates, is prohibited.

5 IB0008 App1109

Lifetime Financial Advice

6 Ibbotson Associates, a Morningstar Inc. companyFOR INFORMATION AND/OR ILLUSTRATION PURPOSES ONLY. SOURCE: IBBOTSON ASSOCIATES, UNLESS OTHERWISE NOTED. NOT FOR PUBLIC DISTRIBUTION. ©2009 Ibbotson Associates, Inc. All rights reserved. Ibbotson Associates, Inc. is a registered investment advisor and wholly owned subsidiary of Morningstar, Inc. The information contained in this presentation is the proprietary material of Ibbotson Associates. Reproduction, transcription or other use, by any means, in whole or in part, without the prior written consent of Ibbotson Associates, is prohibited.

6 IB0008 App1109

Traditional Asset Allocation Framework in AccumulationEx

pect

ed R

etur

n

MVO Efficient Frontier

Individual Assets

Standard Deviation

×Optimizer is sensitive to changes in inputs – leadsto large changes in allocations

•Sensitivity Analysis leads to Ibbotsonguidelines

•Re-Sampling minimizes the output of MVO

×Ignores liabilities on one’s assets•Liability-driven investing

×Ignores outcomes•Investors only care about outcomes

×Ignores longevity risk

×Limited only to financial capital noconsideration of human capital

Limitations on Traditional MVO

7 Ibbotson Associates, a Morningstar Inc. companyFOR INFORMATION AND/OR ILLUSTRATION PURPOSES ONLY. SOURCE: IBBOTSON ASSOCIATES, UNLESS OTHERWISE NOTED. NOT FOR PUBLIC DISTRIBUTION. ©2009 Ibbotson Associates, Inc. All rights reserved. Ibbotson Associates, Inc. is a registered investment advisor and wholly owned subsidiary of Morningstar, Inc. The information contained in this presentation is the proprietary material of Ibbotson Associates. Reproduction, transcription or other use, by any means, in whole or in part, without the prior written consent of Ibbotson Associates, is prohibited.

7 IB0008 App1109

An Approach Based by on Modern Portfolio Theory

2007 Graham and Dodd Scroll

8 Ibbotson Associates, a Morningstar Inc. companyFOR INFORMATION AND/OR ILLUSTRATION PURPOSES ONLY. SOURCE: IBBOTSON ASSOCIATES, UNLESS OTHERWISE NOTED. NOT FOR PUBLIC DISTRIBUTION. ©2009 Ibbotson Associates, Inc. All rights reserved. Ibbotson Associates, Inc. is a registered investment advisor and wholly owned subsidiary of Morningstar, Inc. The information contained in this presentation is the proprietary material of Ibbotson Associates. Reproduction, transcription or other use, by any means, in whole or in part, without the prior written consent of Ibbotson Associates, is prohibited.

8 IB0008 App1109

The Human Capital ConceptBeyond the Traditional Asset Allocation Framework

9 Ibbotson Associates, a Morningstar Inc. companyFOR INFORMATION AND/OR ILLUSTRATION PURPOSES ONLY. SOURCE: IBBOTSON ASSOCIATES, UNLESS OTHERWISE NOTED. NOT FOR PUBLIC DISTRIBUTION. ©2009 Ibbotson Associates, Inc. All rights reserved. Ibbotson Associates, Inc. is a registered investment advisor and wholly owned subsidiary of Morningstar, Inc. The information contained in this presentation is the proprietary material of Ibbotson Associates. Reproduction, transcription or other use, by any means, in whole or in part, without the prior written consent of Ibbotson Associates, is prohibited.

9 IB0008 App1109

Total Economic Wealth

Financial Capital

× Tradable assets such as stocks and bonds have traditionally been used when constructing an asset allocation

× Incomplete without considering Human Capital

Human Capital

× An individuals ability to earn and save

× Present value of all your expected future wages including pension and social security

+

10 Ibbotson Associates, a Morningstar Inc. companyFOR INFORMATION AND/OR ILLUSTRATION PURPOSES ONLY. SOURCE: IBBOTSON ASSOCIATES, UNLESS OTHERWISE NOTED. NOT FOR PUBLIC DISTRIBUTION. ©2009 Ibbotson Associates, Inc. All rights reserved. Ibbotson Associates, Inc. is a registered investment advisor and wholly owned subsidiary of Morningstar, Inc. The information contained in this presentation is the proprietary material of Ibbotson Associates. Reproduction, transcription or other use, by any means, in whole or in part, without the prior written consent of Ibbotson Associates, is prohibited.

10 IB0008 App1109

How the Stage of Your Career Affects Your Human Capital

11 Ibbotson Associates, a Morningstar Inc. companyFOR INFORMATION AND/OR ILLUSTRATION PURPOSES ONLY. SOURCE: IBBOTSON ASSOCIATES, UNLESS OTHERWISE NOTED. NOT FOR PUBLIC DISTRIBUTION. ©2009 Ibbotson Associates, Inc. All rights reserved. Ibbotson Associates, Inc. is a registered investment advisor and wholly owned subsidiary of Morningstar, Inc. The information contained in this presentation is the proprietary material of Ibbotson Associates. Reproduction, transcription or other use, by any means, in whole or in part, without the prior written consent of Ibbotson Associates, is prohibited.

11 IB0008 App1109

Are You a Stock or A Bond?

12 Ibbotson Associates, a Morningstar Inc. companyFOR INFORMATION AND/OR ILLUSTRATION PURPOSES ONLY. SOURCE: IBBOTSON ASSOCIATES, UNLESS OTHERWISE NOTED. NOT FOR PUBLIC DISTRIBUTION. ©2009 Ibbotson Associates, Inc. All rights reserved. Ibbotson Associates, Inc. is a registered investment advisor and wholly owned subsidiary of Morningstar, Inc. The information contained in this presentation is the proprietary material of Ibbotson Associates. Reproduction, transcription or other use, by any means, in whole or in part, without the prior written consent of Ibbotson Associates, is prohibited.

12 IB0008 App1109

How the Volatility of Your Career Affects Your Human Capital

13 Ibbotson Associates, a Morningstar Inc. companyFOR INFORMATION AND/OR ILLUSTRATION PURPOSES ONLY. SOURCE: IBBOTSON ASSOCIATES, UNLESS OTHERWISE NOTED. NOT FOR PUBLIC DISTRIBUTION. ©2009 Ibbotson Associates, Inc. All rights reserved. Ibbotson Associates, Inc. is a registered investment advisor and wholly owned subsidiary of Morningstar, Inc. The information contained in this presentation is the proprietary material of Ibbotson Associates. Reproduction, transcription or other use, by any means, in whole or in part, without the prior written consent of Ibbotson Associates, is prohibited.

13 IB0008 App1109

Typical Life Cycle of Human Capital and Financial Capital

Risks in Accumulation•Expense Risk•Mortality Risk

•Savings Risk•Market Risk

Risks in Retirement•Expense Risk•Longevity Risk

•Bequest Risk•Market Risk

HC +

FC =

Total

Economic

Wealth

14 Ibbotson Associates, a Morningstar Inc. companyFOR INFORMATION AND/OR ILLUSTRATION PURPOSES ONLY. SOURCE: IBBOTSON ASSOCIATES, UNLESS OTHERWISE NOTED. NOT FOR PUBLIC DISTRIBUTION. ©2009 Ibbotson Associates, Inc. All rights reserved. Ibbotson Associates, Inc. is a registered investment advisor and wholly owned subsidiary of Morningstar, Inc. The information contained in this presentation is the proprietary material of Ibbotson Associates. Reproduction, transcription or other use, by any means, in whole or in part, without the prior written consent of Ibbotson Associates, is prohibited.

14 IB0008 App1109

Individual Balance Sheet

Assets Liabilities

Financial Capital

Human CapitalPV of Earnings for Pre-Retirement Expenses

PV of Earnings directed toward Savings

PV of future Social Security and Pensions

Surplus (Deficit)

Future ExpensesPV of Pre-Retirement Expenses

PV of Post-Retirement Expenses

PV of Bequest

PV=Present Value

15 Ibbotson Associates, a Morningstar Inc. companyFOR INFORMATION AND/OR ILLUSTRATION PURPOSES ONLY. SOURCE: IBBOTSON ASSOCIATES, UNLESS OTHERWISE NOTED. NOT FOR PUBLIC DISTRIBUTION. ©2009 Ibbotson Associates, Inc. All rights reserved. Ibbotson Associates, Inc. is a registered investment advisor and wholly owned subsidiary of Morningstar, Inc. The information contained in this presentation is the proprietary material of Ibbotson Associates. Reproduction, transcription or other use, by any means, in whole or in part, without the prior written consent of Ibbotson Associates, is prohibited.

15 IB0008 App1109

Ibbotson’s Investment Management Process

Product typeoptimization

× Including Insurance Products can create a powerful solution

16 Ibbotson Associates, a Morningstar Inc. companyFOR INFORMATION AND/OR ILLUSTRATION PURPOSES ONLY. SOURCE: IBBOTSON ASSOCIATES, UNLESS OTHERWISE NOTED. NOT FOR PUBLIC DISTRIBUTION. ©2009 Ibbotson Associates, Inc. All rights reserved. Ibbotson Associates, Inc. is a registered investment advisor and wholly owned subsidiary of Morningstar, Inc. The information contained in this presentation is the proprietary material of Ibbotson Associates. Reproduction, transcription or other use, by any means, in whole or in part, without the prior written consent of Ibbotson Associates, is prohibited.

16 IB0008 App1109

Managing Mortality RiskAsset Allocation & Life Insurance

17 Ibbotson Associates, a Morningstar Inc. companyFOR INFORMATION AND/OR ILLUSTRATION PURPOSES ONLY. SOURCE: IBBOTSON ASSOCIATES, UNLESS OTHERWISE NOTED. NOT FOR PUBLIC DISTRIBUTION. ©2009 Ibbotson Associates, Inc. All rights reserved. Ibbotson Associates, Inc. is a registered investment advisor and wholly owned subsidiary of Morningstar, Inc. The information contained in this presentation is the proprietary material of Ibbotson Associates. Reproduction, transcription or other use, by any means, in whole or in part, without the prior written consent of Ibbotson Associates, is prohibited.

17 IB0008 App1109

Lifetime Risks:Accumulation Phase

Expense Risk MarketRisk

MortalityRisk

AssetAllocationDecision

SavingsRisk

18 Ibbotson Associates, a Morningstar Inc. companyFOR INFORMATION AND/OR ILLUSTRATION PURPOSES ONLY. SOURCE: IBBOTSON ASSOCIATES, UNLESS OTHERWISE NOTED. NOT FOR PUBLIC DISTRIBUTION. ©2009 Ibbotson Associates, Inc. All rights reserved. Ibbotson Associates, Inc. is a registered investment advisor and wholly owned subsidiary of Morningstar, Inc. The information contained in this presentation is the proprietary material of Ibbotson Associates. Reproduction, transcription or other use, by any means, in whole or in part, without the prior written consent of Ibbotson Associates, is prohibited.

18 IB0008 App1109

Modern Portfolio Theory: Markowitz’s MVO and Sharpe’s CAPM

0

Expe

cted

Ret

urn

Emerging Market Stocks

International StocksLarge Cap Stocks

Human Capital (Bond-like Characteristics)

LT BondsTIPS

Cash

Standard Deviation

Retirement Income Liability(Short TIPS-like characteristics)

Max Sharpe Ratio

Market Portfolio

Stocks: 46%Bonds: 54%

19 Ibbotson Associates, a Morningstar Inc. companyFOR INFORMATION AND/OR ILLUSTRATION PURPOSES ONLY. SOURCE: IBBOTSON ASSOCIATES, UNLESS OTHERWISE NOTED. NOT FOR PUBLIC DISTRIBUTION. ©2009 Ibbotson Associates, Inc. All rights reserved. Ibbotson Associates, Inc. is a registered investment advisor and wholly owned subsidiary of Morningstar, Inc. The information contained in this presentation is the proprietary material of Ibbotson Associates. Reproduction, transcription or other use, by any means, in whole or in part, without the prior written consent of Ibbotson Associates, is prohibited.

19 IB0008 App1109

Human Capital Impacts Asset Allocation Decision

Human Capital

Target Asset Allocation

Financial Capital

+Ú

Safe HCProfessor

BondEquity

54%46%?

?70%30%

80%

20%

60%40%

Risky HCBroker

Average HC

?

?+

+?

?

20 Ibbotson Associates, a Morningstar Inc. companyFOR INFORMATION AND/OR ILLUSTRATION PURPOSES ONLY. SOURCE: IBBOTSON ASSOCIATES, UNLESS OTHERWISE NOTED. NOT FOR PUBLIC DISTRIBUTION. ©2009 Ibbotson Associates, Inc. All rights reserved. Ibbotson Associates, Inc. is a registered investment advisor and wholly owned subsidiary of Morningstar, Inc. The information contained in this presentation is the proprietary material of Ibbotson Associates. Reproduction, transcription or other use, by any means, in whole or in part, without the prior written consent of Ibbotson Associates, is prohibited.

20 IB0008 App1109

Asset Allocation with Insurance Products

Human Capital,

Questionnaire Collect info such as: Age, income, bequest preference, dependents, life expectancy, risk tolerance

Ins

Asset AllocationDecide if need Mutual Funds, ETFs, Separate Accounts

Life Insurance Face Value or

Annuity Product

Inputs Outputs

CMA Capital Market Assumptions

Financial Capitaland Current Savings

21 Ibbotson Associates, a Morningstar Inc. companyFOR INFORMATION AND/OR ILLUSTRATION PURPOSES ONLY. SOURCE: IBBOTSON ASSOCIATES, UNLESS OTHERWISE NOTED. NOT FOR PUBLIC DISTRIBUTION. ©2009 Ibbotson Associates, Inc. All rights reserved. Ibbotson Associates, Inc. is a registered investment advisor and wholly owned subsidiary of Morningstar, Inc. The information contained in this presentation is the proprietary material of Ibbotson Associates. Reproduction, transcription or other use, by any means, in whole or in part, without the prior written consent of Ibbotson Associates, is prohibited.

21 IB0008 App1109

Total Economic Wealth

22 Ibbotson Associates, a Morningstar Inc. companyFOR INFORMATION AND/OR ILLUSTRATION PURPOSES ONLY. SOURCE: IBBOTSON ASSOCIATES, UNLESS OTHERWISE NOTED. NOT FOR PUBLIC DISTRIBUTION. ©2009 Ibbotson Associates, Inc. All rights reserved. Ibbotson Associates, Inc. is a registered investment advisor and wholly owned subsidiary of Morningstar, Inc. The information contained in this presentation is the proprietary material of Ibbotson Associates. Reproduction, transcription or other use, by any means, in whole or in part, without the prior written consent of Ibbotson Associates, is prohibited.

22 IB0008 App1109

Life Cycle of Human Capital

$025 30 35 40 45 50 55 60 65

$200,000

$400,000

$600,000

$800,000

$1,000,000

$1,200,000

Insurance NeedInsu

ranc

e N

eed

Age

23 Ibbotson Associates, a Morningstar Inc. companyFOR INFORMATION AND/OR ILLUSTRATION PURPOSES ONLY. SOURCE: IBBOTSON ASSOCIATES, UNLESS OTHERWISE NOTED. NOT FOR PUBLIC DISTRIBUTION. ©2009 Ibbotson Associates, Inc. All rights reserved. Ibbotson Associates, Inc. is a registered investment advisor and wholly owned subsidiary of Morningstar, Inc. The information contained in this presentation is the proprietary material of Ibbotson Associates. Reproduction, transcription or other use, by any means, in whole or in part, without the prior written consent of Ibbotson Associates, is prohibited.

23 IB0008 App1109

Total Economic Worth

Human Capital Financial Capital

BondEquity

70%

30% ?

?

High Human Capital Higher insurance demandHigh Human Capital Risky Asset Allocation

+

24 Ibbotson Associates, a Morningstar Inc. companyFOR INFORMATION AND/OR ILLUSTRATION PURPOSES ONLY. SOURCE: IBBOTSON ASSOCIATES, UNLESS OTHERWISE NOTED. NOT FOR PUBLIC DISTRIBUTION. ©2009 Ibbotson Associates, Inc. All rights reserved. Ibbotson Associates, Inc. is a registered investment advisor and wholly owned subsidiary of Morningstar, Inc. The information contained in this presentation is the proprietary material of Ibbotson Associates. Reproduction, transcription or other use, by any means, in whole or in part, without the prior written consent of Ibbotson Associates, is prohibited.

24 IB0008 App1109

Total Economic Worth

BondEquity

70%30%

?

?+

Human Capital Financial Capital

Low Human Capital Low insurance demandLow Human Capital Conservative Asset Allocation

25 Ibbotson Associates, a Morningstar Inc. companyFOR INFORMATION AND/OR ILLUSTRATION PURPOSES ONLY. SOURCE: IBBOTSON ASSOCIATES, UNLESS OTHERWISE NOTED. NOT FOR PUBLIC DISTRIBUTION. ©2009 Ibbotson Associates, Inc. All rights reserved. Ibbotson Associates, Inc. is a registered investment advisor and wholly owned subsidiary of Morningstar, Inc. The information contained in this presentation is the proprietary material of Ibbotson Associates. Reproduction, transcription or other use, by any means, in whole or in part, without the prior written consent of Ibbotson Associates, is prohibited.

25 IB0008 App1109

Higher risk aversion × More insurance× Conservative asset allocation

Higher bequest motive × More insurance× Little or no impact on asset allocation

Higher current wealth × Less Insurance× Conservative asset allocation

Higher correlation (income vs. returns)

× Less insurance× Conservative asset allocation

Older × Less insurance× Conservative asset allocation

Asset Allocation, Life Insurance, and Human Capital

26 Ibbotson Associates, a Morningstar Inc. companyFOR INFORMATION AND/OR ILLUSTRATION PURPOSES ONLY. SOURCE: IBBOTSON ASSOCIATES, UNLESS OTHERWISE NOTED. NOT FOR PUBLIC DISTRIBUTION. ©2009 Ibbotson Associates, Inc. All rights reserved. Ibbotson Associates, Inc. is a registered investment advisor and wholly owned subsidiary of Morningstar, Inc. The information contained in this presentation is the proprietary material of Ibbotson Associates. Reproduction, transcription or other use, by any means, in whole or in part, without the prior written consent of Ibbotson Associates, is prohibited.

26 IB0008 App1109

Managing Longevity RiskAsset Allocation & Annuities

27 Ibbotson Associates, a Morningstar Inc. companyFOR INFORMATION AND/OR ILLUSTRATION PURPOSES ONLY. SOURCE: IBBOTSON ASSOCIATES, UNLESS OTHERWISE NOTED. NOT FOR PUBLIC DISTRIBUTION. ©2009 Ibbotson Associates, Inc. All rights reserved. Ibbotson Associates, Inc. is a registered investment advisor and wholly owned subsidiary of Morningstar, Inc. The information contained in this presentation is the proprietary material of Ibbotson Associates. Reproduction, transcription or other use, by any means, in whole or in part, without the prior written consent of Ibbotson Associates, is prohibited.

27 IB0008 App1109

Lifetime Risks:Disbursement Phase

Expense Risk MarketRisk

LongevityRisk

AssetAllocationDecision

BequestRisk

28 Ibbotson Associates, a Morningstar Inc. companyFOR INFORMATION AND/OR ILLUSTRATION PURPOSES ONLY. SOURCE: IBBOTSON ASSOCIATES, UNLESS OTHERWISE NOTED. NOT FOR PUBLIC DISTRIBUTION. ©2009 Ibbotson Associates, Inc. All rights reserved. Ibbotson Associates, Inc. is a registered investment advisor and wholly owned subsidiary of Morningstar, Inc. The information contained in this presentation is the proprietary material of Ibbotson Associates. Reproduction, transcription or other use, by any means, in whole or in part, without the prior written consent of Ibbotson Associates, is prohibited.

28 IB0008 App1109

Retirees Should Plan for a Long RetirementProbability of a 65-year-old living to various ages

Source: Annuity 2000 Mortality Tables.

0

25

50

75

100%

65 years old 70 75 80 85 90 95 100 105

• Male• Female• At least one spouse

78 86

85 91

91 96

81

88

93

29 Ibbotson Associates, a Morningstar Inc. companyFOR INFORMATION AND/OR ILLUSTRATION PURPOSES ONLY. SOURCE: IBBOTSON ASSOCIATES, UNLESS OTHERWISE NOTED. NOT FOR PUBLIC DISTRIBUTION. ©2009 Ibbotson Associates, Inc. All rights reserved. Ibbotson Associates, Inc. is a registered investment advisor and wholly owned subsidiary of Morningstar, Inc. The information contained in this presentation is the proprietary material of Ibbotson Associates. Reproduction, transcription or other use, by any means, in whole or in part, without the prior written consent of Ibbotson Associates, is prohibited.

29 IB0008 App1109

Thought Leadership in Traditional / Insurance Hybrids

30 Ibbotson Associates, a Morningstar Inc. companyFOR INFORMATION AND/OR ILLUSTRATION PURPOSES ONLY. SOURCE: IBBOTSON ASSOCIATES, UNLESS OTHERWISE NOTED. NOT FOR PUBLIC DISTRIBUTION. ©2009 Ibbotson Associates, Inc. All rights reserved. Ibbotson Associates, Inc. is a registered investment advisor and wholly owned subsidiary of Morningstar, Inc. The information contained in this presentation is the proprietary material of Ibbotson Associates. Reproduction, transcription or other use, by any means, in whole or in part, without the prior written consent of Ibbotson Associates, is prohibited.

30 IB0008 App1109

Asset Allocation with Insurance Products

Human Capital,

Questionnaire Collect info such as: Age,income, bequest preference, dependents, life expectancy, risk tolerance

Ins

Asset AllocationDecide if need Mutual Funds, ETFs, Separate Accounts

Life Insurance Face Value or

Annuity Product

Inputs Outputs

CMA Capital Market Assumptions

Financial Capitaland Current Savings

31 Ibbotson Associates, a Morningstar Inc. companyFOR INFORMATION AND/OR ILLUSTRATION PURPOSES ONLY. SOURCE: IBBOTSON ASSOCIATES, UNLESS OTHERWISE NOTED. NOT FOR PUBLIC DISTRIBUTION. ©2009 Ibbotson Associates, Inc. All rights reserved. Ibbotson Associates, Inc. is a registered investment advisor and wholly owned subsidiary of Morningstar, Inc. The information contained in this presentation is the proprietary material of Ibbotson Associates. Reproduction, transcription or other use, by any means, in whole or in part, without the prior written consent of Ibbotson Associates, is prohibited.

31 IB0008 App1109

Impact of Guaranteed Lifetime Income Annuity*

*Graph does not include pension and social security

32 Ibbotson Associates, a Morningstar Inc. companyFOR INFORMATION AND/OR ILLUSTRATION PURPOSES ONLY. SOURCE: IBBOTSON ASSOCIATES, UNLESS OTHERWISE NOTED. NOT FOR PUBLIC DISTRIBUTION. ©2009 Ibbotson Associates, Inc. All rights reserved. Ibbotson Associates, Inc. is a registered investment advisor and wholly owned subsidiary of Morningstar, Inc. The information contained in this presentation is the proprietary material of Ibbotson Associates. Reproduction, transcription or other use, by any means, in whole or in part, without the prior written consent of Ibbotson Associates, is prohibited.

32 IB0008 App1109

Factor

Proportion to Implement withPA Reason

Large Bequest* Lower Preference to leave more

High Income Sustainability* Higher Preference for personal consumption

High Subjective Survival Probability*

Higher Perceived longevity risk / suitability

High Fees Lower Fees reduce returns

High Income* Varies Ratio of wealth to income need

Large Wealth* Varies Ratio of wealth to income need

* Factors that are typically solicited using a retirement income questionnaire.

Asset Allocation with Payout Annuity:Key Factors

33 Ibbotson Associates, a Morningstar Inc. companyFOR INFORMATION AND/OR ILLUSTRATION PURPOSES ONLY. SOURCE: IBBOTSON ASSOCIATES, UNLESS OTHERWISE NOTED. NOT FOR PUBLIC DISTRIBUTION. ©2009 Ibbotson Associates, Inc. All rights reserved. Ibbotson Associates, Inc. is a registered investment advisor and wholly owned subsidiary of Morningstar, Inc. The information contained in this presentation is the proprietary material of Ibbotson Associates. Reproduction, transcription or other use, by any means, in whole or in part, without the prior written consent of Ibbotson Associates, is prohibited.

33 IB0008 App1109

Lifetime Advice Solution

× The investor experience is enhanced: More holistic, lifetime advice tailored to the individual needs of the client

× Innovative solution that addresses advisors need for retirement income solutions

× Hedges mortality risk (Life Insurance)

× Hedges longevity risk (Annuities)

× Unbiased, third party recommendation

× Integrated sales solution

34 Ibbotson Associates, a Morningstar Inc. companyFOR INFORMATION AND/OR ILLUSTRATION PURPOSES ONLY. SOURCE: IBBOTSON ASSOCIATES, UNLESS OTHERWISE NOTED. NOT FOR PUBLIC DISTRIBUTION. ©2009 Ibbotson Associates, Inc. All rights reserved. Ibbotson Associates, Inc. is a registered investment advisor and wholly owned subsidiary of Morningstar, Inc. The information contained in this presentation is the proprietary material of Ibbotson Associates. Reproduction, transcription or other use, by any means, in whole or in part, without the prior written consent of Ibbotson Associates, is prohibited.

34 IB0008 App1109