October 11, 2016

Fall Forum and Annual Membership Meeting

Trends impacting our world: environmental changes, advances in technology, medical breakthroughs, the evolving geopolitical landscape

2000 — The world celebrates the turn of the millennium | The Pyrenean Ibex goes extinct | The dot-com bubble bursts | Vladimir Putin is elected president of Russia | Euro2000 is hosted by Belgium and the Netherlands | Concorde crashes in France, killing 113 | Personal home computers break the 1GHz barrier | Sydney hosts the OlympicGames 2001 — Wikipedia is launched | George Bush is sworn in as the 43rd President of the USA | Space station Mir is deorbited | A devastating terrorist attack leaves 3,000dead in America | Apple launches the iPod 2002 — The Euro enters circulation | Apple introduces the iMac G4 | The world's first cyborg | The dwarf planet Quaoar isdiscovered | The deadliest act of terrorism in the history of Indonesia 2003 — Space Shuttle Columbia disaster | The invasion of Iraq | The Human Genome Project iscompleted | MySpace is launched | China launches its first manned space mission 2004 — The emergence of Web 2.0 | Graphene is isolated | The first recorded hurricane inthe South Atlantic | George W. Bush is re-elected | Athens hosts the Olympic Games | Train bombings in Madrid kill nearly 200 people | Hubble Ultra Deep Field | MarsExploration Rovers | The first privately funded human spaceflight | Facebook is launched | World's first 1 gigabyte SD card | London's skyline gets a new landmark | Asia gets anew tallest building | Indian Ocean earthquake leaves a quarter of a million dead 2005 — Huygens probe reveals images of Titan's surface | YouTube is launched | The DeepImpact probe collides its impactor with comet 9P/Tempel | USB flash drives replace floppy disks | Suicide bombers in London kill 56 people, injure 700 others | HurricaneKatrina floods New Orleans | Angela Merkel becomes the first female Chancellor of Germany 2006 — Crude oil production is reaching a plateau | Twitter is launched | Pluto isdemoted to "dwarf planet" status | North Korea conducts its first nuclear test | The West African black rhino is declared extinct | Saddam Hussein is executed 2007 — Globaleconomic downturn | Nicolas Sarkozy is elected President of the French Republic | Brown succeeds Blair as Prime Minister of Great Britain | Apple debuts the iPhone | Multiplesuicide bombings kill 796 people in Kahtaniya, northern Iraq | Arctic sea ice hits a record low | Amazon releases the Kindle | Google Street View is launched | Benazir Bhutto isassassinated in Pakistan 2008 — Dmitry Medvedev is elected president of Russia | Cyclone Nargis devastates Burma | Oil prices hit a record high | The Internet continues toboom | Breakthrough in facial CGI | Beijing hosts the Olympic games 2009 — Barack Obama is sworn in as 44th president of the USA | Major breakthrough in cancer research| The mouse genome is fully sequenced | Scientists engineer new plastics without the use of fossil fuels | Water is discovered on the Moon | Kepler searches for Earth-likeplanets | Discovery of the first exoplanet that could hold liquid water | Mercury is 98% mapped | 3D scanning enters the consumer market | The tallest man-made structure inhistory is completed | Africa's population reaches one billion 2010 — Haiti is struck by a devastating earthquake | The longest solar eclipse of the 3rd millennium occurs | Appledebuts the iPad | The Constellation Program is essentially cancelled | The worst marine environmental disaster in US history | Scientists create synthetic life | One-fifth ofPakistan is flooded | Solar power is plunging in cost | Augmented Reality is entering the mainstream | Macular degeneration is curable | The first demonstration of solar-sailtechnology | Scientists trap antimatter | Speech-to-speech translation is common in mobile phones | Robotic manipulation of non-rigid objects 2011 — Japan is devastated by a9.0 magnitude earthquake and tsunami | The death of Osama bin Laden | Worsening economic crisis in Greece | The world's first synthetic organ transplant | South Sudanbecomes an independent nation | The Space Shuttle fleet is retired | Global population reaches 7bn | USB 3.0 is widely available | 22 nanometer chips enter mass production |China's Three Gorges Dam is fully operational 2012 — The Diamond Jubilee of Queen Elizabeth II | Euro 2012 is held in Poland and Ukraine | London hosts the OlympicGames | Mars Science Laboratory explores the Red Planet | Voyager I crosses the heliopause | Windows 8 is released | Quad-core smartphones and tablets | Nintendolaunches the Wii U | The Abraj Al-Bait Towers are completed in Mecca | The Mayan calendar reaches the end of its current cycle 2013 — North Korea conducts its thirdnuclear test | A meteor explodes over the Russian city of Chelyabinsk | The first creation of human embryonic stem cells by cloning | The NSA documents are leaked | Birth of aroyal baby | China overtakes the USA in scientific research | The Lunar Atmosphere and Dust Environment Explorer (LADEE) is launched by NASA | The first gene therapy inthe Western world | Highly flexible touch sensors are appearing in a range of gadgets | Launch of the PS4 and Xbox One | Uruguay becomes the first nation to allow fulllegalization of cannabis | China's first unmanned Moon landing | The Gaia mission is launched 2014 — Latvia joins the eurozone | The first gay marriages are held in Englandand Wales | Google Glass is launched to the public | Brazil hosts the FIFA World Cup | The 100th anniversary of World War I | 14 nanometer chips are released | Scotlandvotes "no" to independence | The MAVEN probe arrives at Mars | India's first Mars mission | The global average Internet connection is broadband | A comet passes extremelyclose to Mars | Increased automation in retail environments | The IPCC releases its Fifth Assessment Report | The new World Trade Center is opened | The European SingleSupervisory Mechanism (SSM) is operational | The Rosetta probe deploys its lander on comet 67P | The first test flight of NASA's Orion spacecraft | Laser guns are in navaluse | Smart watches are the latest must-have gadget | NATO ends combat operations in Afghanistan 2015 — Lithuania joins the Eurozone | Expo 2015 is held in Milan, Italy |The Large Hadron Collider reaches its maximum operating power | The first self-regulating artificial heart | A new generation of hi-tech supercarriers | Queen Elizabeth II is thelongest reigning monarch in British history | Personal biometric scanners for online banking | Windows 10 is released by Microsoft | The Dawn probe arrives at Ceres | The NewHorizons probe arrives at Pluto | Electric car ownership reaches 1 million worldwide | Trucks with emergency braking systems are mandatory in Europe | The deadline for theMillennium Development Goals 2016 — Completion of the Panama Canal expansion project | Microchipping of all dogs in England | Euro 2016 is held in France | Rio deJaneiro hosts the Olympic Games | Supercomputers reach 100 petaflops | The Juno probe arrives at Jupiter | The world's largest single-aperture telescope is completed inChina | The mining industry is highly automated | Agricultural robots are increasingly common on farms | High-definition CCTV cameras are ubiquitous | OLED displays are inwidespread use | Three-person babies | New drug delivery methods for brain-related conditions | Completion of the i5K project | The first test launch of the Falcon Heavy |Polymer banknotes are introduced by the Bank of England | United States Presidential Election

2Source: Futuretimeline.net 2000-2009 and 2010-2016

Live Poll on Event App

1. Open the Spring Seminar app 2. Select “Live Polls” on the home screen

Or go to: https://crowd.cc/fall-forum

What do you think?

• Major trends impacting world/US

• Technological advancements

• Natural disasters

• Terrorism• Slow down in global economy

• Dissatisfaction/instability with government

• Aging of the population• Immigration

• Major trends impacting stable value

• Low rate interest environment

• Rising interest rate environment

• Managing cash flows• Target date funds

• Litigation

• Wrap capacity• Investment guidelines

• Fees

• Money market fund reform• Financial crisis

• Dodd-Frank

• Regulation

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• U.S. Presidential Election

• Clinton-Kaine

• Trump-Pence

• U.S. Presidential Debate

• Hillary Clinton

• Donald Trump

S&P 500 Index: January 1, 2008 – June 30, 2016

This chart shows the growth of $10,000 based on S&P 500 Index performance over the last several years. Although past performance is no guarantee of future results,

we believe looking at the market’s overall resiliency through several major crises and events helps to gain a fresh perspective on the benefits of investing for the long-

term.

The average annual total return of the S&P 500 Index for the period shown below was 6.59%.

Source: First Trust Advisors L.P. This chart is for illustrative purposes only and not indicative of any actual investment. The S&P 500 Index is an unmanaged index of 500 stocks used to measure large-cap U.S. stock market

performance. Investors cannot invest directly in an index. Index returns do not reflect any fees, expenses, or sales charges. Stocks are not guaranteed and have been more volatile than the other asset classes. These returns

were the result of certain market factors and events which may not be repeated in the future. Past performance is no guarantee of future results.

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Why stable value is a key part of asset allocation

• Stable value is a fundamental component of defined contribution plans because it offers:

• Principal protection

• Steady, predictable returns consistent with a conservative principal protection vehicle

• Benefit-responsive liquidity

• Stable value is a low-risk, cost-effective investment option used by millions of participants to achieve their desired risk tolerance in asset allocation

• Participants who invest in stable value funds are:

• Retirees or individuals nearing retirement who will begin to access retirement funds now or in the near future

• Conservative investors who seek a core portfolio that provides an attractive return coupled with the opportunity for low volatility and preservation of capital

• Moderate or aggressive investors seeking diversification to enhance their overall portfolio risk-adjusted returns

• Individuals seeking an alternative to money market funds and short-term bond funds

Stable value funds are defined by the Financial Accounting Standards Board in “Reporting of Fully Benefit-Responsive Investment Contracts Held by Certain Investment

Companies Subject to the AICPA Investment Company Guide and Defined Contribution Health and Welfare and Pension Plans, FSP AAG INV-1 and SOP 94-4-1”

Money

Market

Funds

Stable

Value

Funds

Bond

Funds

Balanced

Funds

Growth & Income

Funds

Growth

Funds

Company

StockSpecialty

Funds

International/Global

Equity Funds

Funds to the left have potentially more

inflation risk and less investment risk

Funds to the right have potentially less

inflation risk and more investment risk

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Stable value is a leading investment optionin defined contribution retirement plans

• $801 billion invested in stable value funds

• Through 165,000 defined contribution plans

• Comprises 11.6% of $6.73 trillion held in defined contribution plans

• 2.57% average crediting rate as of 12/31/2015

• Stable value is only available to plan participant/investors through employer-sponsored tax qualified, defined contribution plans and some 529 plans

Source: SVIA’s 20th Annual Stable Value Funds Investment and Policy Survey Covering Assets

as of December 31, 2015; and Investment Company Institute’s “Retirement Assets Total $24.1

Trillion in First Quarter 2016” (June 23, 2016)7

Stable value in retirement savings

8Source: Investment Company Institute’s “Retirement Assets Total $24.1 Trillion in First Quarter

2016” (June 23, 2016) and SVIA Annual Stable Value Investment Policy covering December 31,

2006 -2015 and SVIA Stable Value Funds Quarterly Characteristics Survey for First Quarter 2016.

$16,475

$17,736

$14,202

$16,411

$18,206 $18,407

$20,123

$23,257

$24,653$23,956 $24,092

$-

$5,000.00

$10,000.00

$15,000.00

$20,000.00

$25,000.00

$30,000.00

Total Retirement Assets ($Billions)

IRAs DC plans

Private DB plans State & Local DB plans

Federal DB plans Annuities

Total

10.12%

9.54%

19.03%

13.92%

11.88%

14.35%14.07%

12.31%

10.43%

11.58% 11.39%

0.00%

2.00%

4.00%

6.00%

8.00%

10.00%

12.00%

14.00%

16.00%

18.00%

20.00%

$0.00

$1,000.00

$2,000.00

$3,000.00

$4,000.00

$5,000.00

$6,000.00

$7,000.00

$8,000.00

Total DC Assets by SV and Non SV ($billions)

Other DC Assets

Stable Value Assets

Stable Value as a % of DC Assets

Stable value is a core investment in 401(k) plans

* Minor investment options are not shown; therefore, percentages do not add to 100 percent. Percentages are dollar-weighted averages.

† Not all participants are offered a stable value investment option. Only two out of the four plan types in the survey offer stable value funds.

Source: “401(k) Plan Asset Allocation, Account Balances and Loan Activity in 2014,” Jack

VanDerhei, EBRI, Sarah Holden, ICI; Louis Alonso, EBRI; and Steven Bass, ICI, EBRI Issue

Brief, April 2016, No. 423,

11% 11%

15%

12%10% 11%

10%

7% 6%4% 4%

7%5% 4% 4% 4% 4% 4%

0%

10%

20%

30%

40%

50%

60%

2006 2007 2008 2009 2010 2011 2012 2013 2014

Average Asset Allocation by Age

Equity Funds Target Date/Life Cycle Funds Company Stock Balanced Funds Bond Funds Stable Value † Money Funds

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Stable value offered in two of the four plans covered by EBRI: asset allocation is age appropriate

Source: “401(k) Plan Asset Allocation, Account Balances and Loan Activity in 2014,” Jack

VanDerhei, EBRI, Sarah Holden, ICI; Louis Alonso, EBRI; and Steven Bass, ICI, EBRI Issue

Brief, April 2016, No.423

0.00%

10.00%

20.00%

30.00%

40.00%

50.00%

Equity Funds Target-Date Funds Non-Target-Date BalancedFunds

Bond Funds Money Funds Stable Value

Average Asset Allocation in Plans with Stable Value

20s 30s 40s 50s 60s All

0.00%

10.00%

20.00%

30.00%

40.00%

50.00%

Equity Funds Target-Date Funds Non-Target-DateBalanced Funds

Bond Funds Money Funds Stable Value Company Stock

Average Asset Allocation in Plans with Stable Value and Company Stock

20s 30s 40s 50s 60s All

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Stable value plays significant role in 401(k) plans

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60.01% 58% 54% 54% 51% 51% 49%39% 43%

0%

50%

100%

0

10

20

30

2006 2007 2008 2009 2010 2011 2012 2013 2014

401(k) Plans that Offer Stable Value Based on Plan Participants (Millions)

Number of Participants Participants in Plans that Offer SV Percentage

60% 62% 59.90% 59.49% 56.15% 57.50% 54.44%45.76% 49%

0%

20%

40%

60%

80%

$0

$1,000

$2,000

2006 2007 2008 2009 2010 2011 2012 2013 2014

401(k) Plans that Offer Stable Value Based on Assets ($Billions)

Total AUM Total Assets from Plans with SV Option Percentage

51% 45% 46% 45%36% 35% 34% 27% 35%

0%

20%

40%

60%

80%

$0

$50,000

$100,000

2006 2007 2008 2009 2010 2011 2012 2013 2014

401(k) Plans that Offer Stable Value Based on Plans

All Plans Total Plans with SV Option Percentage

Source: “401(k) Plan Asset Allocation, Account Balances and Loan Activity in 2014,” Jack

VanDerhei, EBRI, Sarah Holden, ICI; Louis Alonso, EBRI; and Steven Bass, ICI, EBRI Issue

Brief, April 2016, No.423

401(k) Plans With Stable Value & Lifecycle/Target Date Investment Options

12

60.01% 58%54% 54%

51% 51% 49%

39%43%

0%

68%72% 71%

68% 68% 68% 66%73%

0.00%

10.00%

20.00%

30.00%

40.00%

50.00%

60.00%

70.00%

80.00%

0

5

10

15

20

25

30

2006 2007 2008 2009 2010 2011 2012 2013 2014

401(k) Plan Participants

Number of Participants Total Participants in Plans that Offer SV Participants in Plans that Offer Lifecycle/Target Date

Participants with Stable Value Option Participants with Lifecycle/Target Date Option

60% 62% 60% 59%56% 58%

54%

46% 49%

0

65%

73% 71%64% 66% 66% 65%

71%

0%

10%

20%

30%

40%

50%

60%

70%

80%

$-

$500.00

$1,000.00

$1,500.00

$2,000.00

$2,500.00

2006 2007 2008 2009 2010 2011 2012 2013 2014

401(k) Plan Assets

51%45% 46% 45%

36% 35% 34%27%

35%

0

67%

75% 77%70% 72% 72% 71% 71%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

-

10,000.00

20,000.00

30,000.00

40,000.00

50,000.00

60,000.00

70,000.00

80,000.00

90,000.00

2006 2007 2008 2009 2010 2011 2012 2013 2014

401(k) Plans

For more information:

Stable Value Investment Association

1025 Connecticut Avenue, NW

Suite 1000

Washington, DC 20036

Phone 202-580-7620

Fax 202-580-7621

www.stablevalue.org

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