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HomeMy Public PortalAbout2011 1st Quarter Report457 Deferred Compensation Plan First Quarter 2011 Executive Summary May 2011 Michael J. Valchine, CAIA, Consultant Kristin Finney-Cooke, CAIA, Senior Consultant Kim Kaczor, Senior Analyst Q1 2011: Capital Markets Summary Qtr. Ytd 1 Yr.3 Yr.5 Yr.10 Yr. World Equity Benchmarks MSCI World World 4.8% 4.8% 13.4%-0.3%2.1% 4.2% Qtr. Ytd 1 Yr.3 Yr.5 Yr.10 Yr. Domestic Equity Benchmarks S&P 500 Large Core 5.9% 5.9% 15.6% 2.4% 2.6% 3.3% Russell 1000 Large Core 6.2% 6.2% 16.7% 3.0% 2.9% 3.8% Russell 1000 Growth Large Growth 6.0% 6.0% 18.3% 5.2% 4.3% 3.0% Russell 1000 Value Large Value 6.5% 6.5% 15.2% 0.6% 1.4% 4.5% S&P Mid Cap 400 Mid Core 9.4% 9.4% 27.0% 10.0% 6.1% 9.4% Russell 2000 Small Core 7.9% 7.9% 25.8% 8.6% 3.3% 7.9% Russell 2000 Growth Small Growth 9.2% 9.2% 31.0% 10.2% 4.3% 6.4% Russell 2000 Value Small Value 6.6% 6.6% 20.6% 6.8% 2.2% 9.0% NAREIT All Composite REIT 7.0% 7.0% 24.7% 2.9% 0.9% 10.9% Qtr. Ytd 1 Yr.3 Yr.5 Yr.10 Yr. International Equity Benchmarks MSCI EAFE Int'l Developed 3.4% 3.4% 10.4%-3.0%1.3% 5.4% MSCI EME Em. Mkt. Eqty. 2.0% 2.0% 18.5% 4.3% 10.7% 16.8% MSCI ACWI ex US International 3.4% 3.4% 13.1%-0.8%3.6% 7.4% S&P EPAC SmallCap Small Cap Int'l 4.3% 4.3% 19.8% 0.3% 3.0% 10.5% Qtr. Ytd 1 Yr.3 Yr.5 Yr.10 Yr. Domestic Fixed Income Benchmarks Barclays Aggregate Core Bonds 0.4% 0.4% 5.1% 5.3% 6.0% 5.6% Barclays High Yield High Yield 3.9% 3.9% 14.3% 12.9% 9.1% 8.6% Barclays 1-10 Muni.Municipal Bond 0.7% 0.7% 2.9% 4.6% 4.7% 4.4% Barclays 1-10 TIPS Inflation 2.3% 2.3% 6.8% 3.6% 6.2% 6.3% 90 Day T-Bill Cash 0.0% 0.0% 0.2% 0.5% 2.2% 2.2% Qtr. Ytd 1 Yr.3 Yr.5 Yr.10 Yr. Global Fixed Income Benchmarks Citigroup World Govt Bond Global Bonds 0.7% 0.7% 7.3% 3.2% 7.3% 7.4% J.P. Morgan EMBI Plus Em. Mkt. Bonds -0.4% -0.4%7.5% 8.0% 7.9% 10.3% Qtr. Ytd 1 Yr.3 Yr.5 Yr.10 Yr. Diversified Benchmark Balanced Index *Diversified 4.1% 4.1% 13.8% 3.9% 4.2% 6.0% * 35% LC, 10% SC, 12% Int'l, 3% Emerging, 25% FI, 5% HY, 5% Global FI, 5% REITS 1 Unemployment numbers continued to improve, nationally falling to 8.8%. U-6 unemployment ended the quarter at 15.7%. U-6 is the broadest measure of unemployment. It includes people who are not actively looking for work, but who have indicated that they want a job and have looked for work (without success) sometime in the past 12 months, and people working part-time because they cannot find full- time work. In a quarter that was marked by tragedy in Japan, instability in the Middle-East and extreme stock market volatility, the S&P 500 Index performed well with a 5.9% return. All S&P 500 sectors advanced, led by the surging energy sector which rose 17% thanks in part to rising oil prices. April 23rd peak September S&P Return: 8.9% August S&P 500 Return: -4.5% Q1 2011: Capital Markets Summary All developed foreign markets, with the exception of Japan, posted gains for the quarter. Emerging markets, not illustrated, were a weaker segment, rising just 2% in U.S. $ terms. The US dollar, weighed down by low interest rates in the US, depreciated 2.4% over the quarter against a basket of currencies (creating gains in US $ terms), and 5.5% against the Euro, specifically. 2 2010 •In-plan Roth rollovers –Effective September 2010 as part of The Small Business Jobs and Credit Act of 2010 •Enhanced target date fund disclosures –DOL Proposed regulations for enhanced disclosures on target date funds published in 2010; final rule has not been issued –SEC Proposed regulations for marketing of target date funds published in June 2010; final rule has not been issued •Fee disclosure regulations –Form 5500, Schedule C is effective beginning 2009 plan year –408(b)(2) interim final regulations published in July 2010; deadline extended from July 16, 2011 to January 1, 2012. This is the rule regarding fee disclosures from service providers to plan sponsors. –404(a) regulation published in October 2010; effective after November 1, 2011. This is the rule regarding fee disclosures from plan sponsors to plan participants. •Lifetime income option initiatives –DOL and Treasury held joint hearings in September 2010 on lifetime income products for retirement savings plans; no regulatory guidance has been issued to date •Stable value uncertainty –Dodd Frank Reform Act enacted in July 2010; CFTC and SEC to determine if wrap contracts are “swaps” and if so, what reserve and disclosure requirements will be. Regulatory guidance expected late summer, early fall. –Sen. Herb Kohl, Chairman Senate Committee on Aging, launched an inquiry into stable value in December 2010; RFIs issued to sponsors, wrap providers, managers and securities lenders Regulatory Update 2011 •Stable value/sec lending update –GAO issued report, “401(K) Plans: Certain Investment Options and Practices That May Restrict Withdrawals Not Widely Understood” on March 10, 2011 –Senate Committee on Aging held hearing on “Securities Lending in Retirement Plans” on March 16, 2011. Concerns aired about withdrawal restrictions in 401(k) plans between 2007 and 2010 due to stable value and sec lending. Guidance sought from DoL. •Investment advice regulations –Proposed regulations issued by the DoL in 2009 and again in 2010; final rule has not been issued •Definition of a fiduciary –DOL proposed updated definition of fiduciary advice and held public hearing in March •Fee disclosure regulations –408(b)(2) effective date Jan 2012 –404(a) effective date Nov 2011; we should see fee disclosure templates from plan record keepers by summer 3 Asset Summary Beginning Beginning End Periods Ending Year Quarter Quarter 31-Mar-11 Universe ($000) (%) ($000) (%) ($000) (%) Composite $31,487 $31,487 $32,941 Lifecycle Options $758 2% $758 2% $1,040 3% Vanguard Target Retirement Income Inv US OE Retirement Income $46 0% $46 0% $60 0% Vanguard Target Retirement 2005 Inv US OE Target Date 2000-2010 $0 0% $0 0% $0 0% Vanguard Target Retirement 2010 Inv US OE Target Date 2000-2010 $205 1% $205 1% $215 1% Vanguard Target Retirement 2015 Inv US OE Target Date 2011-2015 $83 0% $83 0% $70 0% Vanguard Target Retirement 2020 Inv US OE Target Date 2016-2020 $52 0% $52 0% $82 0% Vanguard Target Retirement 2025 Inv US OE Target Date 2021-2025 $64 0% $64 0% $229 1% Vanguard Target Retirement 2030 Inv US OE Target Date 2026-2030 $87 0% $87 0% $96 0% Vanguard Target Retirement 2035 Inv US OE Target Date 2031-2035 $49 0% $49 0% $22 0% Vanguard Target Retirement 2040 Inv US OE Target Date 2036-2040 $67 0% $67 0% $173 1% Vanguard Target Retirement 2045 Inv US OE Target Date 2041-2045 $29 0% $29 0% $65 0% Vanguard Target Retirement 2050 Inv US OE Target Date 2050+$77 0% $77 0% $27 0% Lifestyle Options $4,309 14% $4,309 14% $4,323 13% Vanguard LifeStrategy Income Inv US OE Conservative Allocation $393 1% $393 1% $385 1% Vanguard LifeStrategy Cnsrv Gr Inv US OE Conservative Allocation $618 2% $618 2% $666 2% Vanguard LifeStrategy Moderate Gr Inv US OE Moderate Allocation $2,111 7% $2,111 7% $2,119 6% Vanguard LifeStrategy Growth Inv US OE Aggressive Allocation $1,188 4% $1,188 4% $1,153 3% Core Options $26,419 84% $26,419 84% $27,578 84% Vanguard Prime Money Market Inv US Money Market Taxable $1,034 3% $1,034 3% $1,054 3% Vanguard Retirement Savings Trust $2,632 8% $2,632 8% $3,094 9% Vanguard Total Bond Market Index Inv US OE Intermediate-Term Bond $2,496 8% $2,496 8% $2,398 7% Vanguard Balanced Index Inv US OE Moderate Allocation $3,698 12% $3,698 12% $3,517 11% Vanguard 500 Index Investor US OE Large Blend $3,501 11% $3,501 11% $3,677 11% Vanguard Windsor II Investor US OE Large Value $5,602 18% $5,602 18% $5,989 18% Vanguard US Growth Inv US OE Large Growth $2,296 7% $2,296 7% $2,538 8% Vanguard Mid Capitalization Index Inv US OE Mid-Cap Blend $1,650 5% $1,650 5% $1,706 5% Vanguard Small Cap Index Inv US OE Small Blend $1,699 5% $1,699 5% $1,719 5% Vanguard International Growth Inv US OE Foreign Large Blend $1,810 6% $1,810 6% $1,887 6% 4 Performance Summary – Target Date Funds Notes: Performance is net of fees and is annualized for periods longer than one year. Performance is ranked within Morningstar's style-specific universes, where "1" refers to the top percentile and "100" the bottom percentile. US OE = US open ended mutual fund. Last One Three Five Ten Periods Ending Quarter Year Years Years Years 31-Mar-11 Universe (%)(%)(%) (%) (%) Vanguard Target Retirement Income Inv US OE Retirement Income 2.1 58 9.1 44 4.6 27 5.5 14 n/a Vanguard Retirement Income Benchmark 2.2 9.1 4.6 5.4 n/a Vanguard Target Retirement 2005 Inv US OE Target Date 2000-2010 2.3 74 9.2 78 4.0 34 4.9 13 n/a Vanguard Target 2005 Benchmark 2.4 9.5 4.1 4.9 n/a Vanguard Target Retirement 2010 Inv US OE Target Date 2000-2010 2.9 59 10.9 42 4.2 28 n/a n/a Vanguard Target 2010 Benchmark 3.0 11.1 4.2 n/a n/a Vanguard Target Retirement 2015 Inv US OE Target Date 2011-2015 3.3 57 11.9 44 4.1 17 4.6 8 n/a Vanguard Target 2015 Benchmark 3.4 12.1 4.0 4.5 n/a Vanguard Target Retirement 2020 Inv US OE Target Date 2016-2020 3.7 45 12.7 42 3.9 20 n/a n/a Vanguard Target 2020 Benchmark 3.7 12.8 3.8 n/a n/a Vanguard Target Retirement 2025 Inv US OE Target Date 2021-2025 4.0 56 13.5 56 3.6 21 4.1 15 n/a Vanguard Target 2025 Benchmark 4.1 13.7 3.5 4.0 n/a Vanguard Target Retirement 2030 Inv US OE Target Date 2026-2030 4.4 45 14.3 47 3.3 20 n/a n/a Vanguard Target 2030 Benchmark 4.5 14.4 3.2 n/a n/a Vanguard Target Retirement 2035 Inv US OE Target Date 2031-2035 4.8 40 15.1 50 3.2 24 3.7 18 n/a Vanguard Target 2035 Benchmark 4.9 15.3 3.2 3.6 n/a Vanguard Target Retirement 2040 Inv US OE Target Date 2036-2040 4.8 40 15.3 42 3.4 16 n/a n/a Vanguard Target 2040 Benchmark 4.9 15.4 3.2 n/a n/a Vanguard Target Retirement 2045 Inv US OE Target Date 2041-2045 4.9 54 15.3 58 3.3 19 3.7 20 n/a Vanguard Target 2045 Benchmark 4.9 15.4 3.2 3.6 n/a Vanguard Target Retirement 2050 Inv US OE Target Date 2050+4.9 54 15.3 47 3.3 20 n/a n/a Vanguard Target 2050 Benchmark 4.9 15.4 3.2 n/a n/a Vanguard LifeStrategy Income Inv US OE Conservative Allocation 1.6 91 8.1 76 4.2 58 4.9 31 5.0 32 Vanguard Income Benchmark 1.5 7.0 4.9 5.2 5.7 Vanguard LifeStrategy Cnsrv Gr Inv US OE Conservative Allocation 2.6 54 10.4 39 3.8 67 4.4 47 5.1 29 Vanguard Conservative Gr Benchmark 2.5 8.9 3.9 4.2 5.6 Vanguard LifeStrategy Moderate Gr Inv US OE Moderate Allocation 3.6 62 13.0 31 3.3 59 4.0 38 5.2 26 Vanguard Moderate Gr Benchmark 3.4 11.0 3.0 3.3 5.5 Vanguard LifeStrategy Growth Inv US OE Aggressive Allocation 4.5 43 15.1 25 2.4 62 3.2 50 5.0 44 Vanguard Growth Benchmark 4.3 12.5 1.7 2.1 4.6 Lifestyle Funds Lifecycle Funds 5 Performance Summary – Core Options Notes: Performance is net of fees and is annualized for periods longer than one year. Performance is ranked within Morningstar's style-specific universes, where "1" refers to the top percentile and "100" the bottom percentile. US OE = US open ended mutual fund. Effective June 1,2010, Vanguard International Growth Fund changed their benchmark from MSCI EAFE to MSCI AC World Ex USA. Last One Three Five Ten Periods Ending Quarter Year Years Years Years 31-Mar-11 Universe (%) (%) (%) (%) (%) Vanguard Prime Money Market Inv 0.0 0.1 0.8 2.4 2.3 BofAML US Treasury Bill 3 Mon 0.0 0.2 0.5 2.2 2.2 Vanguard Retirement Savings Trust 0.7 3.0 3.3 3.8 4.2 RL 3yr GIC 0.7 3.2 4.1 4.2 4.4 Vanguard Total Bond Market Index Inv US OE Intermediate-Term Bond 0.2 87 4.9 75 5.1 64 5.9 43 5.3 46 BarCap US Agg Bond TR USD 0.4 5.1 5.3 6.0 5.6 Vanguard Balanced Index Inv US OE Moderate Allocation 3.9 46 12.6 39 4.9 22 4.7 21 5.2 27 60% S&P 500-40% BarCap Agg 3.7 11.8 4.1 4.4 4.6 Vanguard 500 Index Investor US OE Large Blend 5.9 42 15.5 34 2.3 41 2.5 38 3.2 47 S&P 500 TR 5.9 15.6 2.4 2.6 3.3 Vanguard Windsor II Investor US OE Large Value 6.5 30 11.2 84 2.2 33 2.0 40 4.5 35 Russell 1000 Value TR USD 6.5 15.2 0.6 1.4 4.5 Vanguard US Growth Inv US OE Large Growth 5.9 39 14.7 66 4.3 40 1.8 74 0.6 91 Russell 1000 Growth TR USD 6.0 18.3 5.2 4.3 3.0 Vanguard Mid Capitalization Index Inv US OE Mid-Cap Blend 8.2 47 24.9 38 7.4 43 4.4 49 8.9 24 MSCI US Mid Cap 450 GR USD 8.2 25.2 7.5 4.5 8.4 Vanguard Small Cap Index Inv US OE Small Blend 8.8 29 26.7 31 10.0 21 4.7 27 8.9 40 MSCI US Small Cap 1750 GR USD 8.8 26.9 10.0 4.8 9.5 Vanguard International Growth Inv US OE Foreign Large Blend 3.2 43 16.4 11 0.8 9 4.3 10 6.6 22 MSCI AC World Ex USA NR USD 3.4 13.1 -0.8 3.6 7.4 Capital Preservation Funds Fixed Income Funds Balanced funds Large Cap Equity Funds Small and Mid Cap Equity Funds International Equity Funds 6 NEPC Quarterly Observations Investment Options Changes/ Announcements (recent quarter) Performance Concerns (3 to 5 yrs focus) NEPC DD Committee Recommendation Plan Specific Comments Lifecycle Options Vanguard Target Retirement Funds ---No action advised Vanguard LifeStrategy Funds - - -No action advised Core Options Vanguard Prime Money Market - - - No action advised Vanguard Retirement Savings Trust -Y: All SV Funds on Watch Watch NEPC continues to hold on Watch Vanguard Total Bond Market Index - - No action advised Vanguard Balanced Index - - - No action advised Vanguard 500 Index - - - No action advised Vanguard Windsor II - - - No action advised Vanguard U.S. Growth - Y No action No action advised Vanguard Mid Cap Index - - - No action advised Vanguard Small Cap Index - - - No action advised Vanguard International Growth -- - No action advised 7 NEPC Quarterly Observations NEPC Due Diligence Committee Recommendation Key No Action Informational items have surfaced; no action is recommended. Watch Issues have surfaced to be concerned over; manager can participate in future searches, but current and prospective clients must be made aware of the issues. Hold Serious issues have surfaced to be concerned over; manager cannot be in future searches unless a client specifically requests, but current and prospective clients must be made aware of the issues. Client Review Very serious issues have surfaced with an Investment Manager; manager cannot be in future searches unless a client specifically requests.Current clients must be advised to review the manager. Terminate We have lost all confidence in the product; manager would not be recommended for searches and clients would be discouraged from using. The manager cannot be in future searches unless a client specifically requests. Current clients must be advised to replace the manager. The following pages provide text commentary supporting our observations. A legend key to our recommendations is provided below. 8 NEPC Quarterly Observations Vanguard Retirement Savings Trust II •No action advised, all Stable Value funds remain on Watch at NEPC. Vanguard U.S. Growth •The fund underperformed for the year ending March 31, 2011 having trailed the benchmark by approximately 360 basis points. Three- year and five-year results trail by 90 and 250 basis points respectively. Vanguard stated that the fund underperformed on a relative basis for the year due to poor stock selection in the health care and financial sectors. Three and five-year periods were also negatively impacted by underperformance in 2006 and 2007. During that time, the fund’s overweight to mega cap stocks hurt performance. Performance Concerns Below we identify funds that we have flagged as having performance concerns for their long-term performance (three- and five-years) or for other qualitative reasons. It is typical for funds to be flagged over consecutive quarters. 9 Style Analysis The above “snail trail” displays changes to a fund’s style over time as determined by Morningstar’s holdings-based analysis over the prior three years. The smallest circled plot point represents the furthest period; the largest circled plot point represents the current period. The number of plot points is a function of the frequency of each fund’s release of holdings data. 10 Vanguard Retirement Savings Trust Fund Name:Vanguard Retirement Savings Trust Vehicle Type:Pooled Fund Inception:01/02/1989 MV/BV:103.52% Total AUM:$9.7 billion 30 Day Yield:2.92% Wrap Providers:Rabobank JPMorgan Chase State Street Bank Bank of America Prudential IXIS Corp. & Inv. Bank United of Omaha Manager’s Preferred Benchmark: Citigroup 3-Month T-Bill Index Asset Allocation (%) Traditional Investment Contracts (GICs, BICs, etc.): 5.7% Constant Duration Contracts (Synthetics): 90.2% Cash Investments: 4.1% Fixed Income Characteristics Average Duration:2.7 years Average Quality:Aaa BBB Securities: 0% Below Investment Grade Securities:0% Data Provided by Vanguard as of 3/31/11. 11 Vanguard Target Retirement Funds *Holdings shown are targeted allocations for 2011 as reported by Vanguard Domestic Equity International Equity Cash and Fixed Income Real Return Alternatives 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 2055 2050 2045 2040 2035 2030 2025 2020 2015 2010 2005 Income(%)Vanguard Target Retirement Funds Holdings*2050 2040 2030 2020 2010 Income Cash and Fixed Income 10.0 10.0 17.9 32.9 40.4 50.0 Vanguard Total Bond Market II Index Fund 10.0 10.0 17.9 32.9 40.2 45.0 Vanguard Prime Money Market Fund 0.0 0.0 0.0 0.0 0.2 5.0 Domestic Equity 63.0 63.0 57.5 47.0 34.5 21.0 Vanguard Total Stock Market Index Fund 63.0 63.0 57.5 47.0 34.5 21.0 International Equity 27.0 27.0 24.6 20.1 14.8 9.0 Vanguard Total International Stock Index Fund 27.0 27.0 24.6 20.1 14.8 9.0 Real Return Alternatives 0.0 0.0 0.0 0.0 10.4 20.0 Vanguard Inflation-Protected Securities Fund 0.0 0.0 0.0 0.0 10.4 20.0 12 Vanguard Target Retirement Funds Notes: Performance shown is net of fee. 2009 & 2010 category ranks are representative of the new, broader Morningstar universes implemented in 2009. Bmark 1 is a Composite Weighted Indexes prepared by Vanguard. History 2003 2004 2005 2006 2007 2008 2009 2010 Vanguard Retirement Income 6.8 3.3 6.4 8.2 -10.9 14.3 9.4 Bmark 1 6.9 3.4 6.5 8.1 -11.3 14.3 9.4 % Rank Category (2000-2014)42 62 76 3 6 80 42 Vanguard Retirement 2005 7.7 3.6 8.2 8.1 -15.8 16.2 9.7 Bmark 1 7.7 3.8 8.2 8.1 -16.2 16.4 10.0 % Rank Category (2000-2014)21 51 53 4 18 88 79 Vanguard Retirement 2010 7.7 -20.7 19.3 11.4 Bmark 1 7.8 -21.1 19.4 11.6 % Rank Category (2000-2014)6 37 82 33 Vanguard Retirement 2015 9.0 4.9 11.4 7.6 -24.1 21.3 12.5 Bmark 1 9.1 5.0 11.5 7.5 -24.5 21.4 12.6 % Rank Category (2015-2029)46 78 61 32 10 76 34 Vanguard Retirement 2020 7.5 -27.0 23.1 13.1 Bmark 1 7.5 -27.5 23.3 13.3 % Rank Category (2015-2029)34 24 66 35 Vanguard Retirement 2025 10.1 5.5 13.2 7.6 -30.1 24.8 13.8 Bmark 1 10.1 5.5 13.4 7.6 -30.5 25.1 13.9 % Rank Category (2015-2029)23 66 31 31 42 78 37 Vanguard Retirement 2030 7.5 -32.9 26.7 14.4 Bmark 1 7.6 -33.4 27.0 14.5 % Rank Category (2030+)38 6 74 33 Vanguard Retirement 2035 12.0 6.3 15.2 7.5 -34.7 28.2 15.1 Bmark 1 11.9 6.5 15.4 7.5 -35.1 28.5 15.2 % Rank Category (2030+)43 87 34 38 16 64 26 Vanguard Retirement 2040 7.5 -34.5 28.3 15.2 Bmark 1 7.5 -35.1 28.5 15.2 % Rank Category (2030+)38 14 77 35 Vanguard Reitrement 2045 12.9 7.0 16.0 7.5 -34.6 28.2 15.2 Bmark 1 13.0 7.0 16.2 7.5 -35.1 28.5 15.2 % Rank Category (2030+)19 75 25 39 15 83 40 Vanguard Retirement 2050 7.5 -34.6 28.3 15.2 Bmark 1 7.5 -35.1 28.5 15.2 % Rank Category (2030+)38 16 91 35 13 Morningstar DirectSM | Print Date: 5/5/2011 Page 1 of 1 Vanguard LifeStrategy Income Inv VASIX Currency Morningstar Category USD US OE Conservative Allocation Benchmark 1Vanguard Income Custom Benchmark Investment Growth as of 4/30/2011 22k 19 16 13 10 7 Growth of 10,000 10K line Inv: 16,479.64 Bmark 1: 18,190.28 Performance Quartile(within category)& & ( * ( * & & ) ( ) 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011-04 History 4.06 0.12 10.77 6.01 3.23 7.93 6.70 -10.53 12.08 9.22 3.44 Investment Return -4.62 -9.30 3.18 0.91 0.42 1.68 0.49 -4.68 0.88 1.15 0.40 +/- Bmark 1 9 21 66 49 53 49 16 11 92 66 90 % Rank Category Equity Style Summary as of 12/31/2010 30.66 28.30 27.62 4.75 4.20 3.61 0.30 0.30 0.26 Val Core Grth LrgMidSmMarket Cap % Giant 51.53 Large 34.96 Mid 12.64 Small 0.65 Micro 0.22 Average Mkt Cap (mil) 38,116.39 Value Factors % Price/Earnings 13.23 Price/Book 1.96 Price/Sales 1.16 Price/Cash Flow 5.57 Dividend Yield 2.51 Growth Factors % LT Earn Grth 10.07 Historical Earn Grth -18.49 Book Val Grth -49.08 Sales Grth -49.84 Cash Flow Grth -7.67 Historical Equity Sectors 2001-01-31 to 2010-12-31 100% 75 50 25 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Most Recent %Average % Subject B1 Subject B1 Hardware 7.1 — 10.3 — Software 3.6 — 4.5 — Media 2.7 — 3.6 — Telecom 7.1 — 4.3 — Health Care 9.8 — 13.1 — Cons Svcs 7.2 — 8.4 — Bus Svcs 3.1 — 3.8 — Financial 18.8 — 18.6 — Cons Goods 11.4 — 9.1 — Materials 14.1 — 11.6 — Energy 11.3 — 9.3 — Utilities 3.7 — 3.4 — Morningstar Fixed Income Style BoxTM as of 12/31/2010 Ltd Mod Ext HighMedLowAvg Eff Duration 4.08 Avg Eff Maturity 5.63 Avg Credit Quality A Avg Wtd Coupon 4.38 Avg Wtd Price 108.58 Fixed Income Statistics as of 12/31/2010 Avg Eff Duration 4.08 Avg Wtd Coupon 4.38 Avg Eff Maturity 5.63 Avg Wtd Price 108.58 Avg Credit Quality A Data provided by Morningstar 14 Morningstar DirectSM | Print Date: 5/5/2011 Page 1 of 1 Vanguard LifeStrategy Cnsrv Gr Inv VSCGX Currency Morningstar Category USD US OE Conservative Allocation Benchmark 1Vanguard Conservative Growth Custom Benc... Investment Growth as of 4/30/2011 22k 19 16 13 10 7 Growth of 10,000 10K line Inv: 16,178.10 Bmark 1: 17,928.57 Performance Quartile(within category)( ( & & & & & ( ( * * 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011-04 History -0.08 -5.36 16.57 8.02 4.45 10.62 6.99 -19.52 17.06 11.14 4.97 Investment Return -6.19 -12.36 4.90 1.33 0.88 2.05 1.13 -3.90 1.64 1.69 0.52 +/- Bmark 1 51 71 20 13 18 12 13 54 75 32 49 % Rank Category Equity Style Summary as of 12/31/2010 28.95 26.73 26.06 5.30 5.01 4.56 1.11 1.14 1.15 Val Core Grth LrgMidSmMarket Cap % Giant 48.29 Large 33.32 Mid 14.95 Small 2.51 Micro 0.93 Average Mkt Cap (mil) 31,067.23 Value Factors % Price/Earnings 13.42 Price/Book 1.89 Price/Sales 1.12 Price/Cash Flow 5.35 Dividend Yield 2.59 Growth Factors % LT Earn Grth 10.12 Historical Earn Grth -18.67 Book Val Grth -48.58 Sales Grth -49.46 Cash Flow Grth -7.27 Historical Equity Sectors 2001-01-31 to 2010-12-31 100% 75 50 25 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Most Recent %Average % Subject B1 Subject B1 Hardware 7.1 — 9.7 — Software 3.7 — 4.3 — Media 2.7 — 3.5 — Telecom 7.1 — 4.6 — Health Care 10.2 — 12.4 — Cons Svcs 7.3 — 8.0 — Bus Svcs 3.5 — 4.2 — Financial 18.8 — 19.4 — Cons Goods 10.7 — 9.3 — Materials 14.2 — 11.8 — Energy 10.9 — 9.1 — Utilities 3.8 — 3.5 — Morningstar Fixed Income Style BoxTM as of 12/31/2010 Ltd Mod Ext HighMedLowAvg Eff Duration 3.79 Avg Eff Maturity 5.22 Avg Credit Quality A Avg Wtd Coupon 4.37 Avg Wtd Price 108.80 Fixed Income Statistics as of 12/31/2010 Avg Eff Duration 3.79 Avg Wtd Coupon 4.37 Avg Eff Maturity 5.22 Avg Wtd Price 108.80 Avg Credit Quality A Data provided by Morningstar 15 Morningstar DirectSM | Print Date: 5/5/2011 Page 1 of 1 Vanguard LifeStrategy Moderate Gr Inv VSMGX Currency Morningstar Category USD US OE Moderate Allocation Benchmark 1Vanguard Moderate Growth Custom Benchm... Investment Growth as of 4/30/2011 19k 16 13 10 7 4 Growth of 10,000 10K line Inv: 15,914.80 Bmark 1: 17,417.24 Performance Quartile(within category)* * * & * & * * ( & * 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011-04 History -4.48 -10.32 22.40 10.57 5.69 13.31 7.36 -26.50 20.33 13.31 6.54 Investment Return -6.19 -14.77 6.39 1.77 1.25 2.46 1.68 -2.64 2.00 2.11 0.58 +/- Bmark 1 43 36 29 25 37 17 31 35 74 24 48 % Rank Category Equity Style Summary as of 12/31/2010 26.95 25.47 25.08 5.92 5.61 5.35 2.04 1.79 1.79 Val Core Grth LrgMidSmMarket Cap % Giant 45.10 Large 32.17 Mid 17.00 Small 4.33 Micro 1.39 Average Mkt Cap (mil) 27,909.20 Value Factors % Price/Earnings 13.28 Price/Book 2.00 Price/Sales 1.16 Price/Cash Flow 5.62 Dividend Yield 2.40 Growth Factors % LT Earn Grth 10.31 Historical Earn Grth -0.16 Book Val Grth -40.08 Sales Grth -53.88 Cash Flow Grth -19.98 Historical Equity Sectors 2001-01-31 to 2010-12-31 100% 75 50 25 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Most Recent %Average % Subject B1 Subject B1 Hardware 7.1 — 9.5 — Software 3.7 — 4.2 — Media 2.6 — 3.5 — Telecom 6.5 — 4.7 — Health Care 9.4 — 12.2 — Cons Svcs 7.3 — 7.9 — Bus Svcs 3.6 — 4.3 — Financial 18.4 — 19.8 — Cons Goods 11.8 — 9.5 — Materials 15.0 — 11.9 — Energy 11.3 — 9.0 — Utilities 3.4 — 3.6 — Morningstar Fixed Income Style BoxTM as of 12/31/2010 Ltd Mod Ext HighMedLowAvg Eff Duration 5.00 Avg Eff Maturity 7.00 Avg Credit Quality AA Avg Wtd Coupon 4.34 Avg Wtd Price 109.21 Fixed Income Statistics as of 12/31/2010 Avg Eff Duration 5.00 Avg Wtd Coupon 4.34 Avg Eff Maturity 7.00 Avg Wtd Price 109.21 Avg Credit Quality AA Data provided by Morningstar 16 Morningstar DirectSM | Print Date: 5/5/2011 Page 1 of 1 Vanguard LifeStrategy Growth Inv VASGX Currency Morningstar Category USD US OE Aggressive Allocation Benchmark 1Vanguard Growth Custom Benchmark Investment Growth as of 4/30/2011 19k 16 13 10 7 4 Growth of 10,000 10K line Inv: 15,088.23 Bmark 1: 15,429.21 Performance Quartile(within category)( ( & * ( & * ( ) & * 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011-04 History -8.86 -15.84 28.52 12.58 6.88 16.13 7.46 -34.39 24.99 15.06 8.02 Investment Return -3.19 -13.80 7.92 2.20 1.73 2.90 2.22 -2.24 2.61 2.81 0.62 +/- Bmark 1 55 73 15 26 55 10 47 52 80 22 38 % Rank Category Equity Style Summary as of 12/31/2010 26.64 25.14 24.82 6.02 5.74 5.54 2.20 1.95 1.96 Val Core Grth LrgMidSmMarket Cap % Giant 44.51 Large 31.85 Mid 17.42 Small 4.69 Micro 1.53 Average Mkt Cap (mil) 26,989.54 Value Factors % Price/Earnings 13.30 Price/Book 2.00 Price/Sales 1.16 Price/Cash Flow 5.62 Dividend Yield 2.40 Growth Factors % LT Earn Grth 10.33 Historical Earn Grth -0.21 Book Val Grth -40.44 Sales Grth -53.90 Cash Flow Grth -19.97 Historical Equity Sectors 2001-01-31 to 2010-12-31 100% 75 50 25 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Most Recent %Average % Subject B1 Subject B1 Hardware 7.1 — 9.3 — Software 3.7 — 4.2 — Media 2.6 — 3.4 — Telecom 6.4 — 5.0 — Health Care 9.4 — 12.0 — Cons Svcs 7.3 — 7.8 — Bus Svcs 3.7 — 4.3 — Financial 18.4 — 19.9 — Cons Goods 11.8 — 9.6 — Materials 15.0 — 11.9 — Energy 11.2 — 8.9 — Utilities 3.4 — 3.6 — Morningstar Fixed Income Style BoxTM as of 12/31/2010 Ltd Mod Ext HighMedLowAvg Eff Duration 5.00 Avg Eff Maturity 7.00 Avg Credit Quality AA Avg Wtd Coupon 4.40 Avg Wtd Price 115.34 Fixed Income Statistics as of 12/31/2010 Avg Eff Duration 5.00 Avg Wtd Coupon 4.40 Avg Eff Maturity 7.00 Avg Wtd Price 115.34 Avg Credit Quality AA Data provided by Morningstar 17 Morningstar DirectSM | Print Date: 4/7/2011 Page 1 of 1 Vanguard Total Bond Market Index Inv VBMFX Currency Morningstar Category USD US OE Intermediate-Term Bond Benchmark 1BarCap US Agg Bond TR USD Sector Allocation History as of 12/31/2010 100% 75 50 25 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Fixed Income Sectors as of 2010-12-31 % Inv % Category US Credit 19.54 33.31 Non-US Credit 7.08 8.57 Mortgage 31.40 34.26 US Government 41.98 23.86 Cash —— Morningstar Fixed Income Style BoxTM as of 12/31/2010 Ltd Mod Ext HighMedLowAvg Eff Duration 5.00 Avg Eff Maturity 7.00 Avg Credit Quality AA Avg Wtd Coupon 4.49 Avg Wtd Price 107.08 Credit Analysis: % Bonds as of 12/31/2010 AAA 76.51 BB 0.00 AA 4.22 B 0.00 A 10.34 Below B 0.01 BBB 8.92 NR/NA 0.00 Top 10 Holdings as of 12/31/2010 % Weighting CMT Market Liquidity Rate 1.87 US Treasury Note 1.875%0.92 US Treasury Note 0.375%0.89 US Treasury Note 0.875%0.88 US Treasury Note 0.75%0.85 US Treasury Note 1.375%0.77 US Treasury Note 1.75%0.72 US Treasury Bond 6.25%0.71 US Treasury Note 2.75%0.66 US Treasury Note 1.75%0.66 Total Number of Stock Holdings 0 Total Number of Bond Holdings 14041 Total Number of Holdings 14206 Share Class Net Assets (mil)14,437 Investment Growth as of 3/31/2011 20k 18 16 14 12 10 Growth of 10,000 10K line Inv: 17,240.80 Bmark 1: 17,707.72 Performance Quartile(within category)& ( ( * & * & & ) ( ) 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011-03 History 8.43 8.26 3.97 4.24 2.40 4.27 6.92 5.05 5.93 6.42 0.24 Investment Return -0.02 -2.00 -0.13 -0.10 -0.03 -0.07 -0.05 -0.19 0.00 -0.12 -0.18 +/- Bmark 1 24 56 58 38 19 35 11 10 90 73 87 % Rank Category Maturity Breakdown: % Bonds as of 12/31/2010 1-3 20.61 10-14 5.07 3-5 15.08 15-19 2.15 5-6 10.94 20-29 31.03 7-9 12.59 30+2.53 Data provided by Morningstar 18 Morningstar DirectSM | Print Date: 4/7/2011 Page 1 of 1 Vanguard Balanced Index Inv VBINX Currency Morningstar Category USD US OE Moderate Allocation Benchmark 160% S&P 500-40% BarCap Agg Investment Growth as of 3/31/2011 16k 14 12 10 8 6 Growth of 10,000 10K line Inv: 15,568.51 Bmark 1: 14,674.59 Performance Quartile(within category)* * * * ( ( * & ) * * 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011-03 History -3.02 -9.52 19.87 9.33 4.65 11.02 6.16 -22.21 20.05 13.13 3.89 Investment Return 0.70 0.30 1.39 1.03 0.65 -0.09 -0.06 -0.14 1.65 1.00 0.18 +/- Bmark 1 28 28 49 42 56 53 49 13 77 27 46 % Rank Category Equity Style Summary as of 12/31/2010 23.85 23.91 23.71 6.26 6.60 6.83 2.94 2.90 3.01 Val Core Grth LrgMidSmMarket Cap % Giant 41.01 Large 30.24 Mid 19.79 Small 6.68 Micro 2.29 Average Mkt Cap (mil) 26,300.86 Value Factors % Price/Earnings 14.09 Price/Book 2.18 Price/Sales 1.33 Price/Cash Flow 5.90 Dividend Yield 2.17 Growth Factors % LT Earn Grth 10.23 Historical Earn Grth -4.35 Book Val Grth -19.60 Sales Grth -4.57 Cash Flow Grth -1.36 Historical Equity Sectors 2001-01-31 to 2010-12-31 100% 75 50 25 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Most Recent %Average % Subject B1 Subject B1 Hardware 8.8 9.2 9.7 8.8 Software 4.6 4.5 4.6 4.7 Media 3.0 3.2 3.6 3.0 Telecom 6.4 7.2 3.9 6.3 Health Care 10.8 11.0 13.0 13.1 Cons Svcs 8.4 8.4 8.8 8.6 Bus Svcs 4.0 3.2 4.8 3.1 Financial 16.4 16.4 19.5 18.5 Cons Goods 10.7 8.9 8.8 9.5 Materials 12.2 12.1 11.2 11.6 Energy 11.3 12.4 8.8 9.4 Utilities 3.3 3.3 3.4 3.3 Morningstar Fixed Income Style BoxTM as of 12/31/2010 Ltd Mod Ext HighMedLowAvg Eff Duration 5.01 Avg Eff Maturity 7.00 Avg Credit Quality AA Avg Wtd Coupon 4.42 Avg Wtd Price 107.02 Fixed Income Statistics as of 12/31/2010 Avg Eff Duration 5.01 Avg Wtd Coupon 4.42 Avg Eff Maturity 7.00 Avg Wtd Price 107.02 Avg Credit Quality AA Data provided by Morningstar 19 Morningstar DirectSM | Print Date: 4/7/2011 Page 1 of 1 Vanguard 500 Index Investor VFINX Currency Morningstar Category USD US OE Large Blend Benchmark 1S&P 500 TR Investment Growth as of 3/31/2011 16k 14 12 10 8 6 Growth of 10,000 10K line Inv: 12,062.95 Bmark 1: 12,188.32 Performance Quartile(within category)* * * * ( & ( * ( * * 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011-03 History -12.02 -22.15 28.50 10.74 4.77 15.64 5.39 -37.02 26.49 14.91 5.88 Investment Return -0.14 -0.04 -0.18 -0.14 -0.14 -0.15 -0.11 -0.02 0.02 -0.15 -0.04 +/- Bmark 1 37 41 28 36 60 24 51 38 54 31 42 % Rank Category Historical Equity Sectors 2001-01-31 to 2010-12-31 100% 75 50 25 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Most Recent %Average % Subject B1 Subject B1 Hardware 8.9 9.2 10.3 8.8 Software 4.4 4.5 4.5 4.7 Media 3.1 3.2 3.4 3.0 Telecom 7.0 7.2 4.7 6.3 Health Care 10.7 11.0 13.1 13.1 Cons Svcs 8.3 8.4 8.5 8.6 Bus Svcs 3.1 3.2 3.3 3.1 Financial 16.3 16.4 18.5 18.5 Cons Goods 11.0 8.9 9.5 9.5 Materials 11.8 12.1 11.6 11.6 Energy 12.1 12.4 9.4 9.4 Utilities 3.2 3.3 3.3 3.3 Equity Style Summary as of 12/31/2010 29.53 29.80 28.45 4.52 4.09 3.47 0.08 0.07 0.00 Val Core Grth LrgMidSmMarket Cap % Giant 51.70 Large 36.02 Mid 12.13 Small 0.15 Micro 0.00 Average Mkt Cap (mil) 48,105.00 Value Factors % Price/Earnings 13.63 Price/Book 2.23 Price/Sales 1.37 Price/Cash Flow 6.05 Dividend Yield 2.16 Growth Factors % LT Earn Grth 9.93 Historical Earn Grth -4.80 Book Val Grth -1.73 Sales Grth -2.56 Cash Flow Grth -2.29 Top 10 Holdings as of 12/31/2010 % Weighting ExxonMobil Corporation 3.22 Apple, Inc.2.58 Microsoft Corporation 1.83 General Electric Company 1.70 Chevron Corporation 1.60 International Business Machines Corp 1.59 Procter & Gamble Company 1.57 AT&T, Inc.1.52 Johnson & Johnson 1.48 JP Morgan Chase & Co 1.45 Total Number of Stock Holdings 504 Total Number of Bond Holdings — Total Number of Holdings 508 Share Class Net Assets (mil)31,904 Data provided by Morningstar 20 Morningstar DirectSM | Print Date: 4/7/2011 Page 1 of 1 Vanguard Windsor II Investor VWNFX Currency Morningstar Category USD US OE Large Value Benchmark 1Russell 1000 Value TR USD Investment Growth as of 3/31/2011 19k 16 13 10 7 4 Growth of 10,000 10K line Inv: 15,148.60 Bmark 1: 14,669.05 Performance Quartile(within category)* * * & * * * ( * ) * 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011-03 History -3.40 -16.86 30.08 18.31 7.01 18.25 2.23 -36.70 27.05 10.62 6.51 Investment Return 2.19 -1.34 0.05 1.82 -0.04 -4.00 2.40 0.15 7.36 -4.89 0.05 +/- Bmark 1 38 35 33 7 34 50 47 53 28 88 30 % Rank Category Historical Equity Sectors 2001-01-31 to 2010-12-31 100% 75 50 25 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Most Recent %Average % Subject B1 Subject B1 Hardware 7.8 1.9 4.5 2.6 Software 4.1 1.7 1.8 1.3 Media 2.3 5.0 2.1 4.2 Telecom 4.6 6.5 4.1 7.0 Health Care 12.4 12.9 10.4 6.9 Cons Svcs 6.8 4.0 5.7 4.4 Bus Svcs 1.2 2.8 2.8 2.1 Financial 20.3 27.8 24.1 31.2 Cons Goods 10.2 7.5 11.6 9.4 Materials 14.3 10.2 12.8 11.0 Energy 12.2 13.0 11.7 13.5 Utilities 3.8 6.8 8.3 6.4 Equity Style Summary as of 12/31/2010 40.46 29.77 16.80 6.69 5.11 0.48 0.53 0.15 0.02 Val Core Grth LrgMidSmMarket Cap % Giant 51.65 Large 35.31 Mid 12.34 Small 0.68 Micro 0.01 Average Mkt Cap (mil) 46,168.44 Value Factors % Price/Earnings 11.71 Price/Book 1.86 Price/Sales 1.30 Price/Cash Flow 3.97 Dividend Yield 2.38 Growth Factors % LT Earn Grth 9.40 Historical Earn Grth -4.41 Book Val Grth 0.20 Sales Grth -1.87 Cash Flow Grth 1.63 Top 10 Holdings as of 12/31/2010 % Weighting ConocoPhillips 3.59 International Business Machines Corp 3.27 Wells Fargo Company 3.08 JP Morgan Chase & Co 2.89 Microsoft Corporation 2.75 Pfizer Inc.2.74 Philip Morris International, Inc.2.15 Occidental Petroleum Corporation 2.10 Raytheon Company 2.04 PNC Financial Services Group Inc.2.03 Total Number of Stock Holdings 249 Total Number of Bond Holdings — Total Number of Holdings 254 Share Class Net Assets (mil)20,504 Data provided by Morningstar 21 Morningstar DirectSM | Print Date: 4/7/2011 Page 1 of 1 Vanguard US Growth Inv VWUSX Currency Morningstar Category USD US OE Large Growth Benchmark 1Russell 1000 Growth TR USD Investment Growth as of 3/31/2011 12k 10 8 6 4 2 Growth of 10,000 10K line Inv: 7,309.80 Bmark 1: 10,621.44 Performance Quartile(within category)) ) ( ( & ) ( * * ) * 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011-03 History -31.70 -35.80 26.10 7.03 11.15 1.77 10.15 -37.82 34.95 11.53 5.92 Investment Return -11.27 -7.92 -3.65 0.73 5.89 -7.31 -1.66 0.62 -2.25 -5.18 -0.11 +/- Bmark 1 85 92 58 55 18 88 68 28 47 83 39 % Rank Category Historical Equity Sectors 2001-01-31 to 2010-12-31 100% 75 50 25 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Most Recent %Average % Subject B1 Subject B1 Hardware 13.9 15.9 18.3 16.0 Software 10.2 7.2 6.7 8.0 Media 2.2 1.7 4.4 2.5 Telecom 10.4 7.1 2.9 3.5 Health Care 7.8 9.6 22.1 18.7 Cons Svcs 10.9 12.7 9.7 12.7 Bus Svcs 4.5 4.8 2.3 4.8 Financial 12.3 5.2 14.5 7.3 Cons Goods 9.8 9.8 5.4 10.5 Materials 10.2 14.9 9.1 10.9 Energy 7.8 11.1 4.2 4.3 Utilities 0.0 0.1 0.3 0.8 Equity Style Summary as of 12/31/2010 2.63 17.56 65.81 0.58 2.62 10.81 0.00 0.00 0.00 Val Core Grth LrgMidSmMarket Cap % Giant 32.78 Large 52.93 Mid 14.29 Small 0.00 Micro 0.00 Average Mkt Cap (mil) 32,346.75 Value Factors % Price/Earnings 17.67 Price/Book 3.05 Price/Sales 2.25 Price/Cash Flow 12.77 Dividend Yield 1.26 Growth Factors % LT Earn Grth 13.78 Historical Earn Grth 3.20 Book Val Grth 12.20 Sales Grth 1.62 Cash Flow Grth 3.66 Top 10 Holdings as of 12/31/2010 % Weighting CMT Market Liquidity Rate 7.16 Apple, Inc.5.19 Google, Inc.3.36 Qualcomm, Inc.3.22 Microsoft Corporation 2.25 Priceline.com, Inc.2.12 Schlumberger, Ltd.1.89 Nike, Inc. B 1.79 CME Group, Inc. A 1.74 Allergan, Inc.1.71 Total Number of Stock Holdings 112 Total Number of Bond Holdings — Total Number of Holdings 117 Share Class Net Assets (mil)3,010 Data provided by Morningstar 22 Morningstar DirectSM | Print Date: 4/7/2011 Page 1 of 1 Vanguard Mid Capitalization Index Inv VIMSX Currency Morningstar Category USD US OE Mid-Cap Blend Benchmark 1MSCI US Mid Cap 450 GR USD Investment Growth as of 3/31/2011 22k 18 14 10 6 2 Growth of 10,000 10K line Inv: 20,838.92 Bmark 1: 20,064.46 Performance Quartile(within category)* * ( & & * * ( & * * 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011-03 History -0.50 -14.61 34.14 20.35 13.93 13.60 6.02 -41.82 40.22 25.46 8.18 Investment Return 5.88 1.85 -4.91 -0.17 -0.01 -0.15 -0.17 -0.02 -0.27 -0.23 -0.06 +/- Bmark 1 36 41 55 19 13 46 44 69 25 29 47 % Rank Category Historical Equity Sectors 2001-01-31 to 2010-12-31 100% 75 50 25 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Most Recent %Average % Subject B1 Subject B1 Hardware 8.5 — 8.9 — Software 3.8 — 4.6 — Media 3.2 — 2.6 — Telecom 2.4 — 2.1 — Health Care 9.6 — 10.9 — Cons Svcs 9.8 — 10.0 — Bus Svcs 5.0 — 8.2 — Financial 17.0 — 18.7 — Cons Goods 10.5 — 8.1 — Materials 15.0 — 10.6 — Energy 9.8 — 9.3 — Utilities 5.4 — 6.3 — Equity Style Summary as of 12/31/2010 0.92 1.52 3.86 29.41 31.43 31.62 0.24 0.47 0.53 Val Core Grth LrgMidSmMarket Cap % Giant 0.00 Large 6.25 Mid 92.51 Small 1.24 Micro 0.00 Average Mkt Cap (mil) 5,864.02 Value Factors % Price/Earnings 16.14 Price/Book 2.12 Price/Sales 1.07 Price/Cash Flow 6.80 Dividend Yield 1.87 Growth Factors % LT Earn Grth 10.67 Historical Earn Grth -0.53 Book Val Grth -3.78 Sales Grth -3.13 Cash Flow Grth 6.71 Top 10 Holdings as of 12/31/2010 % Weighting Cameron International Corporation 0.55 Host Hotels & Resorts, Inc.0.53 SanDisk Corporation 0.52 Starwood Hotels & Resorts Worldwide, Inc.0.51 Goodrich Corporation 0.49 Consol Energy, Inc.0.49 Altera Corp.0.49 Dover Corporation 0.49 FMC Technologies, Inc.0.47 Cliffs Natural Resources Inc.0.47 Total Number of Stock Holdings 455 Total Number of Bond Holdings — Total Number of Holdings 457 Share Class Net Assets (mil)5,602 Data provided by Morningstar 23 Morningstar DirectSM | Print Date: 4/7/2011 Page 1 of 1 Vanguard Small Cap Index Inv NAESX Currency Morningstar Category USD US OE Small Blend Benchmark 1MSCI US Small Cap 1750 GR USD Investment Growth as of 3/31/2011 26k 22 18 14 10 6 Growth of 10,000 10K line Inv: 21,869.81 Bmark 1: 22,679.12 Performance Quartile(within category)( ( * * * * * ( * & * 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011-03 History 3.10 -20.02 45.63 19.90 7.36 15.66 1.16 -36.07 36.12 27.72 8.81 Investment Return -0.12 -1.66 -1.76 -0.11 -0.12 -0.11 -0.05 0.13 -0.03 -0.10 -0.03 +/- Bmark 1 73 71 36 43 42 42 30 53 26 25 29 % Rank Category Historical Equity Sectors 2001-01-31 to 2010-12-31 100% 75 50 25 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Most Recent %Average % Subject B1 Subject B1 Hardware 7.5 — 8.3 — Software 6.4 — 4.9 — Media 1.5 — 1.7 — Telecom 4.3 — 2.2 — Health Care 9.9 — 11.6 — Cons Svcs 9.0 — 9.7 — Bus Svcs 8.1 — 10.1 — Financial 20.1 — 21.1 — Cons Goods 9.8 — 6.4 — Materials 14.0 — 14.2 — Energy 6.1 — 5.6 — Utilities 3.4 — 4.1 — Equity Style Summary as of 12/31/2010 0.00 0.00 0.00 5.48 9.13 13.17 23.72 23.62 24.89 Val Core Grth LrgMidSmMarket Cap % Giant 0.00 Large 0.00 Mid 27.62 Small 56.64 Micro 15.74 Average Mkt Cap (mil) 1,429.52 Value Factors % Price/Earnings 17.26 Price/Book 1.87 Price/Sales 1.08 Price/Cash Flow 6.14 Dividend Yield 2.09 Growth Factors % LT Earn Grth 11.93 Historical Earn Grth -4.31 Book Val Grth -25.80 Sales Grth -10.97 Cash Flow Grth 1.31 Top 10 Holdings as of 12/31/2010 % Weighting CMT Market Liquidity Rate 0.38 Riverbed Technology, Inc.0.27 Gentex Corporation 0.26 Informatica Corporation 0.25 Wabco Holdings Incorporated 0.24 Signet Jewelers Ltd 0.23 SM Energy Co 0.23 Del Monte Foods Company 0.23 Camden Property Trust 0.22 Gardner Denver, Inc.0.22 Total Number of Stock Holdings 1738 Total Number of Bond Holdings — Total Number of Holdings 1742 Share Class Net Assets (mil)5,270 Data provided by Morningstar 24 Morningstar DirectSM | Print Date: 4/21/2011 Page 1 of 1 Vanguard International Growth Inv VWIGX Currency Morningstar Category USD US OE Foreign Large Blend Benchmark 1MSCI AC World Ex USA NR USD Investment Growth as of 3/31/2011 22k 18 14 10 6 2 Growth of 10,000 10K line Inv: 16,668.79 Bmark 1: 17,737.61 Performance Quartile(within category)* ( * * * * & ( & & * 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011-03 History -18.92 -17.79 34.45 18.95 15.00 25.92 15.98 -44.94 41.63 15.66 3.21 Investment Return 0.82 -2.84 -6.38 -1.95 -1.62 -0.73 -0.67 0.59 0.18 4.51 -0.20 +/- Bmark 1 28 62 39 30 39 37 22 62 10 8 43 % Rank Category Equity Style Summary as of 12/31/2010 17.03 31.64 39.24 2.82 2.22 5.79 1.15 0.00 0.12 Val Core Grth LrgMidSmMarket Cap % Giant 53.93 Large 33.96 Mid 10.89 Small 0.29 Micro 0.94 Average Mkt Cap (mil) 28,359.68 Value Factors % Price/Earnings 13.72 Price/Book 2.18 Price/Sales 1.23 Price/Cash Flow 6.29 Dividend Yield 2.45 Growth Factors % LT Earn Grth 14.31 Historical Earn Grth -10.07 Book Val Grth 1.16 Sales Grth -7.33 Cash Flow Grth 3.76 Historical Equity Sectors 2001-01-31 to 2010-12-31 100% 75 50 25 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Most Recent %Average % Subject B1 Subject B1 Hardware 3.3 — 3.8 — Software 3.8 — 1.4 — Media 0.3 — 2.3 — Telecom 4.9 — 6.0 — Health Care 5.1 — 7.3 — Cons Svcs 8.4 — 8.0 — Bus Svcs 2.6 — 5.6 — Financial 18.4 — 22.6 — Cons Goods 16.6 — 16.5 — Materials 26.2 — 17.4 — Energy 8.9 — 6.6 — Utilities 1.6 — 2.5 — Region Exposure as of 12/31/2010 % Greater Asia 34.61 Japan 11.95 Australasia 4.33 Asia Developed 7.81 Asia Emerging 10.51 Americas 11.58 North America 2.99 Latin America 8.59 Greater Europe 53.81 United Kingdom 18.43 Europe Developed 32.61 Europe Emerging 1.28 Africa/Middle East 1.49 Data provided by Morningstar 25 Appendix •NEPC uses, as a data source, the plan’s custodian bank or service provider for asset balances, calculation of accruals, transfers, exchanges and contribution deferral information. While NEPC has exercised reasonable professional care in preparing this report, we cannot guarantee the accuracy of all source information contained within. •This report is provided as a management aid for the client’s internal use only. Fund performance contained in this report does not constitute a recommendation by NEPC. •Information in this report on fund returns, market indices and security characteristics is received from sources external to NEPC. While efforts are made to ensure that this external data is accurate, NEPC cannot accept responsibility for errors that may occur. •(c) Morningstar 2011. All rights reserved. Use of this content requires expert knowledge. It is to be used by specialist institutions only. The information contained herein: (1) is proprietary to Morningstar and/or its content providers; (2) may not be copied, adapted or distributed; and (3) is not warranted to be accurate, complete or timely. Neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of this information, except where such damages or losses cannot be limited or excluded by law in your jurisdiction. Past financial performance is no guarantee of future results. 26