FAQ’s developed in response to participant questions about the recent hiring of Mercer Consulting, Inc. as the DAP Investment Consultant and co-fiduciary to the Board of Directors.

1. What is the reasoning behind the decision to add the consultant?

Due to the retirement of the Chief Investment Officer for the Plan, the Board of Directors (Board) of the Directed Account Plan has hired Mercer Investment Consulting, Inc. (Mercer) as an independent advisor and consultant to the Board.

In January, the Board of Directors engaged HS2 Solutions, Inc. (HS2) to assist with issuing a Request for Proposal (RFP) to assess the current marketplace and evaluate selected investment consultants to support the Board of Directors for the Directed Account Plan. The objective of this RFP was to ensure:

• The information and advice provided to the DAP reflects industry standards and best practices;
• The investment consultant supports a strong fiduciary process and governance structure; and
• The fees are appropriate for the type and quality of the services provided.

The Board selected finalists based on the evaluation of proposals submitted in response to this RFP. The finalists were interviewed by the Board and Mercer was selected as the new Investment Consultant for the Directed Account Plan effective August 1, 2015.

2. What is the estimated increase on the cost of management of the DAP?

The investment consultant fee is a component of the administrative expenses for the Plan. The total 2015 administrative expenses are budgeted slightly lower than the total 2014 administrative expenses. The 2016 administrative expense budget proposal will be voted on at the fourth quarter board meeting. It is anticipated that total Administrative Expenses will remain largely unchanged.

The additional costs associated with hiring Mercer will be largely offset by cost savings from the retirement of the internal Investment Officer as well as lower costs related to the new recordkeeping contract with Empower.

3. Are there any business or familial links among Mercer, DAP executives and board members?

There are not any business or familial links among the Mercer, DAP executives or board members.

4. What specific expertise does Mercer offer?

Mercer Consulting, Inc. is in the business of improving plan outcomes for both participants and providers. Mercer will serve as co-fiduciary to the Plan in conjunction with the Board and will assist the Board with their expertise in monitoring investment performance, structuring the investment line-up provided to the participants, and will provide manager selection, portfolio modeling and asset allocation services.

Mercer is a leading global provider of investment advice and service with extensive research capabilities. There are over 100 staff members involved in the research process alone and the majority (79%) have an MBA, CFA, Actuarial, Masters or other relevant qualifications. A dedicated team of three highly qualified individuals (Phillip Suess – CFA, Joseph Libbra, CAIA and CIMA, and Austin Roberds) will work directly with the Board.

5. How is the DAP better served by this recordkeping/investment consultant comboas compared to Fidelity?

Empower has been serving as the Directed Account Plan’s recordkeeping service provider since October 2, 2014. Empower has improved our Plan administratively by giving our participants the option to set up an Automatic Required Minimum Distribution (Auto RMD) where participants can designate their tax withholdings, timing of their RMD payment and specify a direct deposit to their bank account for automatic reoccurring RMDs. Fidelity only administered the mid-December automatic RMD by mailed check with a fixed tax withholding for all participants. We now have a team of 30 Empower customer representatives dedicated to the DAP participants allowing for specialized training and more personalized service for our participants. The DAP also has a dedicated communications team to improve our plan communications. We have already improved Enrollment Kits and Investment Guides. The compliance and administrative services that Empower provides for the Plan Sponsor are also improved. Look for an improved dap401k.com web site next year.

Empower, Mercer and DAP have formed a strong partnership with the focus on moving the DAP to the forefront with regards to a lifelong retirement solution for our participants

Please CLICK HERE to view the October 2015 Heads Up newsletter. There is a letter from the Chairman in this newsletter that addresses some of these questions.