529 PRO The art of administrative simplicity sm presents

529 PRO The art of administrative simplicity sm

presents

Confidential and Proprietary

529 PRO Processing



Open architecture and modular approach make the system highly adaptable - once business requirements

are determined, processing modules (tasks) can specified, developed and implemented with minimal impact

to the existing system

Browser based administrative system with built in on-line enrollment capability

Role based data entry process enhances workflow management

Flexible, highly functional web interfaces make shareholder self-service a reality. These interfaces can be

‘skinned’ to allow for custom look and feel

Supports multiple funding methods to promote investment: Check, ACH, payroll deposit and payroll

deduction (credit card under review)

Supports a ‘two track’ investing approach - the Standard Option rolls beneficiary’s through a series of

investment portfolios based on their age and the Self Directed option which allows the investor to create a

customized portfolio mix from available investment funds / portfolios

• Broad system design allows the program to offer myriad investment options, from’ fund of funds’ portfolios to

individual mutual fund investment options

Integration with Transfer Agency (TA) system platform provides built in access to NSCC trading and

commission modules - also affords the program the ability to offer A, B and C class investment shares

Highly portable system can be integrated with various TA System or record keeping platforms with

minimal code rework


Features529 PRO The art of administrative simplicity sm

Presentation &

Business Rule Layer

TARecord keeping

Layer

Data Repair, Transaction Entry, Inquiries, Reports & Files via Internet

Enrollments, Transactions & Inquiries via Internet

Principal Review via Internet

Statements & Confirmations for Shareholders

Contribution Transactions via Files

Reports for Ops Staffs

to and from OPS, SALES, & MARKETING Staffs, Interested Parties


direct entry by SHAREHOLDERS,BROKERS, OPERATIONS and DP entities

modules for ACH, LOCKBOX, PAYROLL, CREDIT CARD, NSCC, UPromise




Enrollment Processing models


529 PRO database

3 Browser Based Enrollments Applications


data entry interface model• Both Retail and Broker Channel Shareholder paper applications using either a pre-processor or “in-house” entry

on-line entry screens model• Retail (and Broker Channel) Shareholders using on-line entry screens

administrative interface model• Backup data entry system

529 PRO database

TA database

SHAREHOLDERS




Data Entry Enrollment Application

capabilities:• From paper applications to pre-processing tables via browser based screens

• Can be used by a pre-processing entity or by “in-house” processors

• Double key entry/validation and supervisor review by pre-processor is provided – status and role based

• Business rules are incorporated into the code so that only valid data is allowed to move to the database

• Error correction queue by administrative staff – status and role based

PAPER APPLICATIONS DataProcessingApplication

~ businessrules ~

TA

529 PRO

System

BusinessRules




529 PROEnrollment Flow

Logon Form

MDP Associates, Inc.Proprietary and

Confidential

Creator Role Validator Role Supervisor Role

Are theresaved

enrollments?

BlankEnrollment

Form

EnrollmentForm withpreviously

entered data

No Yes

Business Rules(BRs) checkedand enrollmentstored in Create

state

Form displays allaccounts awaiting

validation

Enrollment Formdisplays with datafailing BRs in red.

All data can beovertyped.

Does data passrequired BRs?

Enrollmentstored for

ErrorRecovery

Accountcreated.

No

No Yes

Did validatormake anychanges?

Enrollmentstored in

supervisoryreview state

Yes

Form displays allaccounts insupervisoryreview state

Enrollment formdisplays with data

failing BRs in red anddata changed byvalidator in yellow



ErrorRecovery

Accountcreated.

No Yes

Error RecoveryRole

Form displays allaccounts in errorrecovery state

Enrollment formdisplays with datafailing BRs in red



ErrorRecovery

Accountcreated.

No Yes

Data EntryAdministrator Role

Form displays allaccounts in all

states

Enrollment formdisplays with datafailing BRs in red



ErrorRecovery

Accountcreated.

No Yes


ON-LINE ENTRY

capabilities:• Business rules incorporated into entry screens insure only valid data is captured

• Browser based entry screens allow retail shareholders to enter data directly

• Browser based entry screens allow broker assisted shareholders to enter directly

529 PRO

System

BusinessRules

TA

On-line Enrollment Application


DirectShareholder

EntryScreens

~ businessrules ~



ADMINISTRATIVE ENTRY

capabilities:• Browser based user interface screens serve as a backup DE system

• Business rules incorporated into the code

• Administrative staff use to maintenance any enrollment issues

529 PRO

System

BusinessRules

TA

Administrative Enrollment Application


ADMINUser

Interface

~ businessrules ~



Principal Review model


529 PRO

System

BusinessRules

TA

capabilities:• Browser based interface screens allows Registered reps from any location to access the records

• Registered reps perform principal review for retail or broker channel accounts

• Applicable sponsor related algorithms are integrated into the module

• Account approval changes the enrollment record status to allow the enrollment to proceed

REGISTERED

REPRESENTATIVES

Administrative Principal Review Application


ADMINUser

Interface

~ businessrules ~



Contribution modules


529 PRO database

Contribution Processing Modules

capabilities:ACH module• Initial and periodic transactions are created and processed• Data is warehoused until trade date• Pre note processing is performed• ACH Debits and ACH Reject Files created & business rules applied• Epicware edits are included

Coupon Module• “Reminder” for shareholders making periodic check contributions• Data is warehoused until “reminder” date• Facilitates lockbox processing

Lockbox module• Initial and periodic transactions are processed• File is reformatted into contribution transaction & business rules applied• Transactions are matched to enrollment data to reconcile

Payroll module (push)• Periodic transactions are processed• Data is warehoused until trade date• Preliminary & confirming files insure proper credit prior to funding• Transactions are created & passed through business rules

TA database

Payroll module (pct)• File & funding received from payroll entity• Data is warehoused until trade date• Transactions are created & passed through business rules

NSCC module• Subsequent transactions are processed• Broker initiated NSCC trades are executed• Module translates NSCC trade into contribution and fund purchase• Transactions are passed through BR’s prior to posting

UPromise module• Subsequent transactions are processed• Accounts are specially flagged to identify • Confirming files insure proper credit prior to funding• File is reformatted into contribution transactions• File is passed through BR’s prior to posting

Credit Card module• TBD

SHAREHOLDER

CONTRIBUTIONS



EPICWARE

Thompson

Financial

AutomatedClearingHouse

Funding instructionssent by shareholders via enrollment and other processing from all entry points

Monthly data updates

Monthly data updates

529 PRO

System


BusinessRules

Pre note failures and debit rejects are returned

SHAREHOLDERS

ACH data is warehoused for processing on assigned trade date(s)

ACH FILE is transmitted to the Clearing House and

contribution transactions are posted to the tables

REJECT FILES are returned

DDA

A wire is sent by the Clearing House to credit the DDA – should balance to the ACH file

TA

ACH Contribution Module


ACHModule

~ businessrules ~


529 PRO

System


BusinessRules

SHAREHOLDERS

COUPON data is warehoused for processing on invoicing date(s)

COUPON FILE is produced and invoices sent to shareholders

TA

Funding instructionssent by shareholders via enrollment and other processing from all entry points

Coupon Contribution Module


COUPONModule

~ businessrules ~


SHAREHOLDERSLockbox

Institution

529 PRO

System


BusinessRules

A flat file is produced by the lockbox institution

DDA

A wire is sent to credit the DDA – should balance to CHECK file

Paper backup is sent to pre-processor and then to operations for retention

The flat CHECK FILE file is reformatted into contribution transactions.

The resultant transactions are reviewed using the program’s rules and regulations prior to posting transactions to the tables.

Shareholders send initial and subsequent contributions to the applicable lockbox institution

OPERATIONS

TA

Lockbox Contribution Module


LOCKBOXModule

~ businessrules ~


529 Operations

Reoccurring payments Enrollment forms with/without payments

Daily wire

Archiving

Imaging

Paper backups (Overnight Mail)

Paper backups (O

vernight Mail)

Paper Processing


DDA

STEP 2

Pre –Processor

TA

STEP 1

LockboxInstitution LOCKBOX

Module

~ businessrules ~

DDA Report

DataProcessingApplication

~ businessrules ~

529 PRO

System

BusinessRules

ENROLLMENTrecords match toCHECK FILE records to reconcile contribution transactions.


Employer

Data files are exchanged to insure accurate processing at both entities

529 PRO

System


BusinessRules

SHAREHOLDERS

PAYROLL data is warehoused for processing on payroll date

EMPLOYER FINANCIAL FILE is transmitted and contribution transactions are created and posted to the tables

REJECT FILES are returned to EMPLOYER

DDA

A wire is sent by the EMPLOYER to credit the DDA – should balance to the EMPLOYER file

TA

Funding Instructionssent by shareholders via enrollment and other processing from all entry points

Payroll Deduction Contribution Module


PAYROLLModule

~ businessrules ~


CreditCard Company

529 PRO

System


BusinessRules

Contribution transactions are created

Rejects are returnedSHAREHOLDERS

CC data is warehoused for processing on trade date

CC FILE is transmitted to Credit Card Company

DDA

A wire is sent by the Credit Card Company to credit the DDA – should balance to the CREDIT CARD FILE

TA

Credit Card Contribution Module

Funding Instructionssent by shareholders via enrollment and other processing from all entry points


Credit CardModule

~ businessrules ~


SHAREHOLDERSUPromiseProgram

529 PRO

System


BusinessRules

A flat file is produced by UPromise

DDA

A wire is sent to credit the DDA – should balance to UPromise file

The financial file is reformatted to create contribution transactions.

The resultant transactions are reviewed using the program’s rules and regulations prior to posting transactions to the tables.

Shareholdersaccumulatecredits in theirUPromise Program

TA

Data files are exchanged to insure accurate processing at both entities

UPromise Contribution Module


UPromiseModule

~ businessrules ~



NSCC Processing


SHAREHOLDERS Broker

529 PRO

System


BusinessRules

Broker purchases shares via NSCC

DDA

NSCC module translates NSCC special trade into a contribution – and subsequently the funds are purchased and the funds reconciled

Shareholders place a trade with broker from funds deposited in brokerage account

TA

The payment is made

NSCC Contribution Module


NSCCModule

~ businessrules ~

NSCC



NSCC Processing

529 Institution

Trustee

National SecuritiesClearing

Corp

FUND

Price/Dividends

Orders

Confirmations

Position Information

Price/Dividends

Orders

Confirmations

Settlement


Price/Dividends

Orders

Confirmations

Settlement



NSCC – Commission Settlement ServicesOverview• Commission Settlement is the most efficient method of accurately reporting fund commission information to financial services firms.

Using a standard format in NSCC's centralized processing environment, the service supports all types of fund commissions including Contingent Deferred Sales Charge (CDSC) payouts, 12b-1 fees (or trail commissions), or other types of payments. Settlement occurs through NSCC's settlement system.

• Commission Settlement is accessible via CPU-to-CPU links, or through PCWeb Direct - a Web interface that allows NSCC participants direct access to NSCC services over the Internet. Transmissions are limited to no more than two hours per file.

• Commission Settlement is a service offering of National Securities Clearing Corporation, the nation's leading provider of centralized clearance, settlement and information services to more than 2,500 brokers, dealers, banks, mutual funds, insurance carriers and other organizations. NSCC develops standardized, automated solutions that promote connectivity, efficiency and lower risk in the financial services marketplace. NSCC is a subsidiary of The Depository Trust & Clearing Corporation (DTCC).

Benefits• Expedites the distribution and settlement of fund commissions • Simplifies the reconciliation process by providing standardized formats for the exchange of records between funds and firms • Reduces costs associated with manual processing of commission payments • Accommodates single-batch processing • Consolidates money settlement with other NSCC activity

How the service works • Input from Funds

Single-batch files are sent to NSCC for processing by 10 a.m., Monday through Saturday.Errors can be corrected through a reversal of the transmission by the fund.

• Output to FirmsTwo single-batched files of detailed and summary commission data are sent to firms after 11 a.m., Monday through Saturday.

• SettlementSettlement for commission files transmitted to NSCC by 2 p.m. occurs the following day. One day prior to settlement date, the NSCC notifies both fund and firms of their commission settlement obligation. Commissions are netted with other mutual fund/clearing corporation activity at the end of the day, and settlement takes place in Fed Funds.

Inquiry modules




SHAREHOLDERS ON-LINE

529 PRO

System

BusinessRules

TA

On-line Inquiry Application


RetailScreens

~ businessrules ~

SPONSORS ON-LINE

SponsorScreens

~ businessrules ~

ADMINISTRATORS ON-LINE AdminScreens

~ businessrules ~

capabilities:• View transaction history

• View all displayed data

capabilities:• Client transaction history• Sales reporting• Commission detail

capabilities:• All 529 processing and historic information


Maintenance modules




SHAREHOLDERS ON-LINE

529 PRO

System

BusinessRules

TA

On-line Maintenance Application


RetailScreens

~ businessrules ~

SPONSORS ON-LINE

SponsorScreens

~ businessrules ~

ADMINISTRATORS ON-LINE AdminScreens

~ businessrules ~

capabilities:• Change demographics, confirm delivery, password

• Change funds, allocations

• Add beneficiaries, programs, funding, contributions• Cancel funding• Request distributions

capabilities:• Change demographics

capabilities:• All 529 processing



TA


RetailScreens

~ businessrules ~

AdminScreens

~ businessrules ~

capabilities:• qualified and non-qualified

• only aged contributions eligible

• check to shareholder, university or

beneficiary

• confirmation to shareholder

or

ACH credit to university


DPApplication

~ businessrules ~

DistributionModule

~ businessrules ~

529 PRO

System

BusinessRules

SHAREHOLDER

REQUEST

on-line

paper

any


Distribution Module529 PRO The art of administrative simplicity sm


TA


capabilities:• ability to reallocate across investment tracks

• reallocations maintained within share class

• share lot and tax lot information detail is maintained

• one per calendar year rule enforced


ReallocationModule

~ businessrules ~

529 PRO

System

BusinessRules

on-line

paper

any

RetailScreens

~ businessrules ~

AdminScreens

~ businessrules ~

DPApplication

~ businessrules ~

SHAREHOLDER

REQUEST


Reallocation Module529 PRO The art of administrative simplicity sm

Output modules



529 PRO database

TA database

Output Module


Daily Output

FileModule

~ businessrules ~

Sponsor

Broker

capabilities:• Operational reports

• Statements

• Confirmations

• Daily Activity File



Shareholder Service model


model529 Web Center

E-mail system

529 Plan Representatives-Respond to shareholder telephone inquiries-Respond to shareholder email inquiries

Recordingarchives

E-mail systemarchives

AT+TLanguage line

Broker Support-Calls WebCenter with questions

Licensed Brokers-Respond to broker trade and investment questions-Respond to broker commission questions

Brokers via Telephone

VRU

Research questions

Research responses

Shareholder Service Processing

TA

529 PRO

System

BusinessRules

Shareholders via Telephone

Shareholders via mail and E-mail

Broker Support

529 OPS

E-mail system

Shareholders via VRU



Documents

529 PRO The art of administrative simplicity sm presents