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1st Quarter Producer Web Conference

1st Quarter Producer Web Conference. Presented By: David Hiss, Regional Vice President Peter Sullivan, Regional Vice President. Overview. Investment Fund Changes S&P Endorsement Letter Advisor Series Open Architecture Transamerica Partner Series III. TRS Investment Process.

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1st Quarter Producer Web Conference

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  1. 1st QuarterProducer Web Conference Presented By: David Hiss, Regional Vice President Peter Sullivan, Regional Vice President For Producer Use Only. Not For Public Distribution.

  2. Overview • Investment Fund Changes • S&P Endorsement Letter • Advisor Series Open Architecture • Transamerica Partner Series III For Producer Use Only. Not For Public Distribution.

  3. TRS Investment Process • Offer Capability for Broad Diversification • Well-Known Managers • Keeps TRS Up With Changes in Market • On-going Monitoring • Fund Changes When Needed • Diversity of Style within Categories For Producer Use Only. Not For Public Distribution.

  4. TRS Investment Process • Sub-Advised Funds (TIM, Templeton, Etc.) • Diversified and “Manager of Managers” Process • Outside Funds For Producer Use Only. Not For Public Distribution.

  5. TRS Investment Process • Fund Performance/Risk Characteristics • 3 Year Track Record Required, 5 Year Preferred • Peer Group Rankings – Top 2 Quartiles 3 and 5 Year • Comparisons versus appropriate benchmarks • Sharpe Ratio Comparisons • Downside Risk • Fund Recognition and Relationships • Major broker-sold funds • Household retail funds For Producer Use Only. Not For Public Distribution.

  6. TRS Investment Process • Fund Addition – Reasons • Competitive Trends • Alliance Relationships • Sub-Advised Opportunities • Need for Replacement Funds • Fund Removal – Reasons • Poor Performance • Expense Ratio Increases • Manager Turnover • Investment Objective Changes For Producer Use Only. Not For Public Distribution.

  7. Director Series II/Partner Series III Fund Additions 1 Contract form number TGP-439-194 or CNT-TALIAC is a group annuity contract issued by Transamerica Life Insurance and Annuity Company, Charlotte, NC, and offered through Transamerica Retirement Services. Form number may vary, and this product may not be available in all jurisdictions. Not available in New York. 2. Group Annuity Contract Form # TA-AP-2001-CONT is underwritten by Transamerica Financial Life Insurance Company (TFLIC), Purchase, NY in the state of New York and administered by Transamerica Retirement Services. Only available in New York. For Producer Use Only. Not For Public Distribution.

  8. Director Series II/Partner Series III Fund Name Changes For Producer Use Only. Not For Public Distribution.

  9. Director Series II/Partner Series III Funds Removed For Producer Use Only. Not For Public Distribution.

  10. Director Series II/Partner Series III Investment Line Up • 5 Strategic Allocation Funds (SAF’s) • 24 Transamerica Selected/TR Transamerica Selected • 41 TI Selected/TR Selected • 2 Cash Management Fund/Stable Value Fund • 72 Total Investment Options • 18 Fund Families* *Transamerica Investment Management is not a fund company For Producer Use Only. Not For Public Distribution.

  11. Advisor Series II Select I Fund Additions • Small Company Equity • Diversified Small-Cap Growth Fund • Diversified Small-Cap Value Fund • Diversified Special Equity Fund • High Yield Bond • Diversified High Yield Bond Fund • Bond • Diversified High Quality Bond Fund • Diversified Intermediate Government Bond Fund The Transamerica Advisor Series II plan administration services are provided by Diversified Investment Advisors and funds are distributed by Diversified Investors Securities Corporation. For Producer Use Only. Not For Public Distribution.

  12. Advisor Series II Select II Fund Additions • Large/Mid Growth Equity • American Funds AMCAP Fund • American Funds Growth Fund of America • Franklin Flex Cap Growth Fund • Global Equity • American Funds New Perspective Fund • Franklin Small-Mid Cap Growth Fund • Large/Mid Blend Equity • Oppenheimer Main Street Fund • Large/Mid Value Equity • American Funds Fundamental Investors Fund • American Funds Washington Mutual Investors Fund • Columbia Mid Cap Value Fund • Mutual Shares Fund • American Funds Balanced Fund For Producer Use Only. Not For Public Distribution.

  13. Advisor Series Fund Changes • INVESCO New Share Class • INVESCO Financial Services Fund, A Shares • INVESCO Leisure Fund, A Shares • INVESCO Technology Fund, A Shares • INVESCO Dynamics Fund, A Shares • INVESCO Core Equity Fund, A Shares • Asset Category Change • Fidelity Advisor Value Strategies Fund • Small Company Equity to Large/Mid Value Equity • Name Changes (Effective 10-13-03) • Liberty Utilities Fund, to Columbia Utilities Fund • Liberty Growth & Income Fund, to Columbia Growth & Income Fund • Liberty Intermediate Bond Fund, to Columbia Intermediate Bond Fund • Liberty Strategic Income Fund, to Columbia Strategic Income Fund For Producer Use Only. Not For Public Distribution.

  14. Advisor Series II Funds Removed For Producer Use Only. Not For Public Distribution.

  15. Advisor Series II Investment Options • 19 Select I Funds • 5 SAF’s • 45 Select II Funds • 2 Money Market/Stable Value Fund Options* • 71 total Fund Alternatives *The Transamerica Stable Value Fund is available through Contract Form No. TGP-439-194 or CNT TALIAC, a group annuity contract issued by Transamerica Life Insurance and Annuity Company, Charlotte, NC, and offered through Transamerica Retirement Services. Contract form number may vary, and this product may not be available in all jurisdictions. Not available in New York. For Producer Use Only. Not For Public Distribution.

  16. S&P Independent Objectivity equities The leading provider of independent and objective information, insight, and analysis to customers throughout the world. fixed income funds indices economics/industry ratings For Producer Use Only. Not For Public Distribution.

  17. S & P Endorsement letter Criteria • Objective: This evaluation is to determine if each Transamerica product offers a solid and diverse investment opportunity to its shareholders as determined by S&P’s criteria. • This is to be ascertained in three steps: • Determine if the funds offered in each Transamerica products pass S&P’s fund-level screen. • Establish if each product is diversified in its fund offerings. • Where multiple funds are offered within a style, ascertain whether they are complementary in their investment process and management. Transamerica refers to Transamerica Retirement Services For Producer Use Only. Not For Public Distribution.

  18. Advisor Series Enhancements for 2004 • Key Changes to the Advisor Product: • Underwriting Minimums • Fund / Fund Family Additions • Open Architecture for Fund Selection • Producer Compensation for Stable Value and Money Market Advisor Series Product For Producer Use Only. Not For Public Distribution.

  19. Advisor Series Underwriting Minimums • $3 Million in Total First Year Deposits if no SDBA/ER Stock • $5 Millionin existing plan assets if SDBA is used • $5 Millionin existing plan assets if ER Stock is used • SDBA or ER Stock assets will not count toward meeting requirements Advisor Series Product For Producer Use Only. Not For Public Distribution.

  20. Fund / Fund Family Additions Funds: 71 Total Fund Offerings Available Fund Family Added: American Funds Advisor Series Product For Producer Use Only. Not For Public Distribution.

  21. Advisor Series Open Architecture Responding to the Needs of our Producers TRS will now offer greater freedom to choose the fund portfolio that meets the needs of your clients by offering the ability to select the investments desired without a proprietary requirement. Advisor Series Product For Producer Use Only. Not For Public Distribution.

  22. Advisor Series Open Architecture • Maximum Funds Per Plan Allowed: 17 • Choice of Stable Value Fund or Diversified Money Market Fund • 0, 3, or 5 of the SAF’s may be chosen • No restrictions on Select I or Select II funds • All Select II funds chosen are assessed 0.20% VAC • No VAC for SDBA/ER Stock • SDBA/ER Stock count toward Maximum Fund Limit Advisor Series Product For Producer Use Only. Not For Public Distribution.

  23. Advisor Series Product (50/50) • Product is still the same as before • Choice of Stable Value Fund or Diversified Money Market Fund • As many Select II Funds as Select I Funds chosen (Not including Cash/SAF’s) • 0, 3, or 5 SAF’s may be chosen • SDBA/ER Stock count as Select II Fund choices • Fund Maximum Summary No SAF’s 3 SAF’s 5 SAF’s • Cash Equivalents 1 1 1 • Strategic Allocation Funds (SAF’s) 0 3 5 • Max Select I Funds 8 7 6 • Max Select II Funds 8 7 6 • Max Funds Per plan 17 18 18 • Under Pyramid Alliance Select (50/50), there is no VAC applied to funds Advisor Series Product For Producer Use Only. Not For Public Distribution.

  24. Advisor Series Product Producer Compensation: Assets in the Stable Value Fund or Money Market Funds will be paid .15% on assets in the first year and ongoing. Advisor Series Product For Producer Use Only. Not For Public Distribution.

  25. Partner Series Enhancements • Key Changes for the Partner Series: • Product Availability • Commission Option Changes • Fee Structure Changes Partner Series Changes For Producer Use Only. Not For Public Distribution.

  26. Partner Series Enhancements Product Availability: We can now support Investment Only Defined Benefit Plans Partner Series Changes For Producer Use Only. Not For Public Distribution.

  27. Partner Series Enhancements Commission Option Changes: Commission Options 7, 8 and 9 are no longer available under the Partner Series Product Partner Series Changes For Producer Use Only. Not For Public Distribution.

  28. Partner Series Enhancements Fee Structure Changes: Annual Recordkeeping Fees: 1-24 Participants $500 per Plan 25-49 Participants $20 per participant 50-249 Participants $15 per participant 250-499 Participants $13 per participant 500+ Participants $11 per participant De-Conversion Fees: $300 per Plan Partner Series Changes For Producer Use Only. Not For Public Distribution.

  29. Partner Series Enhancements Fee Structure Changes: Reduction in Contract Asset Charges (CAC): Range of Reductions are 5-20 Basis points from last year based upon asset size. Partner Series Changes For Producer Use Only. Not For Public Distribution.

  30. Partner Series Enhancements Couple Closing Comments on the Partner Series Product: Sales increased to almost $200 Million in this product line in 2003 and we expect that this product will produce $400 Million in 2004. Partner Series Changes For Producer Use Only. Not For Public Distribution.

  31. Q & A For Producer Use Only. Not For Public Distribution.

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