Fund Revenue Equalization SM For Plan Sponsor and Financial Professional Use Only Emerging Markets Overview Experience tells us that retirement plan participants are more likely to fully utilize the benefits of their retirement program when they have a thorough understanding of their plan and the administrative fees, if any, that they are paying. With this in mind, Transamerica Retirement Solutions has been leading the industry toward a level system of recognizing the fees associated with the administrative costs of a retirement plan to ensure all participants are paying a similar proportion of the general plan administrative fees based on their account balance in each of the plan’s core funds. Transamerica calls this Fund Revenue Equalization. What is Fund Revenue Equalization SM ? Fund Revenue Equalization is related to the expense ratio of an investment fund that is offered under the plan and the component of the expense ratio that the fund company pays to the retirement plan recordkeeper (Transamerica or its affiliates). Many, though not all, fund companies provide such revenue to retirement plan recordkeepers, which is intended to compensate service providers like Transamerica for administrative services such as transaction processing, statement production, and call center staffing. Because these payments usually vary from one fund to another or from one fund company to another, each participant’s selected funds may be supporting a different percentage of administrative expenses based on the funds the participant chooses and how much the participant has invested in these funds. While plan participants receive full information about the expenses of each plan investment option, a closer look at the revenue component may reveal that a participant who selects higher-fee funds that make greater administrative revenue payments to Transamerica is effectively bearing a larger portion of a plan’s administrative expenses than others who select lower-fee funds that pay little or no revenue toward the administrative costs. This is particularly prevalent with investors who use actively managed funds versus investors who use passive index funds. Transamerica’s Fund Revenue Equalization method is designed so that all participants bear a similar percentage charge for the plan’s administrative services, no matter which investment funds they choose. Transamerica has been leading the industry toward a level system of recognizing the fees associated with the administrative costs of a retirement plan.