PARTICIPANT FEE DISCLOSURE Page 7 of 11 UNDERSTANDING RISKS Stock markets are volatile and can decline in response to adverse developments. Particular funds can react differently to these developments. Here is a list of some but not all of the risks associated with the funds. For specific risks related to each fund, see the fund's prospectus. 1. MONEY MARKET FUNDS: These funds are not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Although they seek to preserve the value of your investment at $1.00 per share, it's possible to lose money by investing in money market funds. The fund may impose a fee upon sale of shares or temporarily suspend the ability to sell shares if the fund's liquidity falls below required minimums because of market conditions or other factors. 2. INTERNATIONAL/EMERGING MARKETS FUNDS: Funds that invest internationally involve risks not associated with investing solely in the United States, such as currency fluctuation, political risk, differences in accounting and the limited availability of information. 3. SMALL-/MID-CAP FUNDS: Funds investing in stocks of small-cap, mid-cap or emerging companies may have less liquidity than those investing in larger, established companies and may be subject to greater price volatility and risk than the overall stock market. 4. LARGE CAP FUNDS: Funds that invest in stocks of large-cap companies (those with a market capitalization value of more than $10 billion) and represent the majority of the U.S. equity market. They are often looked to as core portfolio investments. Characteristics often associated with large cap stocks include transparency and stability. 5. HIGH-YIELD FUNDS: Funds that invest in high-yield securities are subject to greater credit risk and price fluctuations than funds that invest in higher-quality securities. 6. NONDIVERSIFIED FUNDS: Funds that invest in a concentrated sector or focus on a relatively small number of securities may be subject to greater volatility than a more diversified investment. 7. SPECIALTY FUNDS: Funds that invests predominantly or exclusively in a single industry, sector, or region of the world. Specialty funds perform well when their industries perform well, but they are risky because there is no attempt at diversification. 8. GOVERNMENT FUNDS: While the funds invest primarily in the securities of the U.S. government and its agencies, the values are not guaranteed by these entities. 9. REAL ESTATE FUNDS: Funds that focus on real estate investing are sensitive to economic and business cycles, changing demographic patterns and government actions. 10. FUND-OF-FUNDS: Designed to provide diversification and asset allocation across several types of investments and asset classes, primarily by investing in underlying funds. Therefore, in addition to the expenses of the portfolio, you are indirectly paying a proportionate share of the applicable fees and expenses of the underlying funds. 11. BOND FUNDS: These funds have the same interest rate, inflation and credit risks associated with the underlying bonds owned by the fund. Interest rate risk is the possibility of a change in the value of a bond due to changing interest rates. Inflation risk arises from the decline in value of cash flows due to loss of purchasing power. Credit risk is the potential loss on an investment based on the bond issuer's failure to repay on the amount borrowed. 12. TARGET DATE/MATURITY FUNDS: For products that do include Target Date/Maturity funds please keep in mind that like other funds, target date funds are subject to market risk and loss. Loss of principal can occur at any time, including before, at or after the target date. There is no guarantee that target date funds will provide enough income for retirement. 13. MANAGED VOLATILITY FUNDS: Funds that are designed to offer traditional long-term investments blended with a strategy that seeks to mitigate risk and manage portfolio volatility. These funds may not be successful in reducing volatility, and it is possible that the funds' volatility management strategies could result in losses greater than if the funds did not use such strategies.