Choice 401(k) Plan Investment Fees

Funds charge investors fees and expenses. A fund with high costs must perform better than a low-cost fund to generate the same returns for you. Even small differences in fees can translate into large differences in returns over time. For example, if you invested $10,000 in a fund that produced a 10% annual return before expenses and had annual operating expenses of 1.5%, then after 20 years you would have roughly $49,725. But if the fund had expenses of only 0.5%, then you would end up with $60,858 – an 18% difference. There is a very handy fee calculator at http://www.sec.gov/investor/tools/mfcc/mfcc-int.htm that can tell you the actual impact of fees on your particular investment. There is also other very helpful information on the SEC web site.

There are several types of fees that may be charged for mutual funds. PERSI charges participants only one fee – the asset management fee for each particular fund. There are no account fees, actuarial risk charges, sales fees, front or back loads to the fund options in the PERSI Choice Plan. The asset management fee is deducted from the return on a daily value basis. In other words, if the value of the funds you have in a particular fund is $1,000 on July 28th and the fee is .10% (or 10 basis points) the fee for that day will be $1,000 times .10% divided by 365. This will be deducted from the performance numbers before the percentage return is officially reported. It your selected mutual fund earned 8.6% return for the year and the fee is .10% your return will be reported as 8.5% for the year with the .10% fee deducted.

The following chart provides the fees for the investment options offered by the PERSI Choice Plan. Note that the PERSI Total Return Fund does not have an investment management fee.

Choice Plan Investment Fees

Fund Name	Asset Class	Fee
PERSI Total Return Fund	Broad Market Diversification Default	0.00%
Mellon Bond Index Fund	Lehman Brothers Aggregate Index	0.11%
Mellon S&P 500 Stock Index Fund	S&P 500 Index	0.08%
Mellon International Index (EAFE) Fund	EAFE Index	0.15%
Mellon 4500 Completion Fund	Wilshire 4500 Completion Index	0.08%
Calvert Socially Responsible (Sudan-free) fund	Balanced fund	0.73%
EB Daily Liquidity U.S. Equity Market Fund	Mellon Wilshire 5000 Stock Index	0.10%
SEI Stable Asset Fund	Stable Value Fixed Income	0.30%
Vanguard Growth & Income Fund	Large Cap Core	0.31%
Dodge & Cox Fixed Income Fund*	Core Plus Fixed Income	0.37%
Brandes International Equity Fund*	International Equity Core	0.93%
T Rowe Price Small-Cap Stock Fund	Small Cap Core	0.96%

* These two funds have a rebate arrangement where you are charged a greater fee on a daily basis and have a rebate credited to your account from time to time so your actual net fees will be at the rate stated on the chart. The rebates are credited shortly after the end of each calendar quarter. NOTE: Dreyfus Premier Midcap Stock R Fund option ended 10/11/2007.