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Under the Investment Manager Monitoring Guidelines, the SBA will develop a "Watch List" to define the conditions that will cause the SBA to evaluate continued retention of an investment manager or investment product. Each quarter, SBA Defined Contribution Programs staff reviews data, analysis and recommendations from the SBA's manager monitoring consultant, Mercer Consulting. As a result of this process, investment products can be identified for enhanced monitoring (i.e., Watch Listed), which initiates a series of steps outlined in the Guidelines (provided above as a PDF).

Placing a manager on "Watch List" is an intermediate step towards either resolving the problem or terminating the manager. Please note that in providing this information, the SBA is not in any way intending to influence or inform your investment decisions. Also, this list can change at any time without prior notice from the SBA.

Products Subject to Enhanced Monitoring

Various investment products have been subjected to enhanced monitoring for performance through the time periods shown in the "Due Diligence" section. Please contact the MyFRS Financial Guidance Line toll-free at 1-866-446- 9377, Option 1, for any further questions or updated information on funds.

12/31/13 Fourth Quarter 2013*

PIMCO Total Return Fund Organizational Changes Summary
The Fund is being placed on Watch List in the Fourth Quarter 2013 due to recent organizational changes at PIMCO. In January 2014, Mohamed El-Erian, the firm's CEO and Co-CIO announced his departure from the firm. Because of his highly influential role in setting overall firm investment policy and direction, under FRS Investment Plan Manager Monitoring Guidelines, this change is considered to be material. Mercer Consulting will be monitoring the changes in upper management at PIMCO and make a recommendation if further action is warranted.

*Please note that in providing this information, the SBA is not in any way intending to influence or inform your investment decisions. Also, this list can change at any time without prior notice from the SBA.

12/31/13 Fourth Quarter 2013*

PIMCO Total Return Fund Organizational Changes Summary
The Fund is being placed on Watch List in the Fourth Quarter 2013 due to recent organizational changes at PIMCO. In January 2014, Mohamed El-Erian, the firm's CEO and Co-CIO announced his departure from the firm. Because of his highly influential role in setting overall firm investment policy and direction, under FRS Investment Plan Manager Monitoring Guidelines, this change is considered to be material. Mercer Consulting will be monitoring the changes in upper management at PIMCO and make a recommendation if further action is warranted.

Pioneer Performance Summary
The Fund is being placed on Watch List due to recent underperformance against both its benchmark and its peer group for trailing 3-year and 5-year periods. The Fund's organization and portfolio management process has not been review by Mercer Consulting and is slated to undergo a review sometime over the next 2-3 quarters.

*Please note that in providing this information, the SBA is not in any way intending to influence or inform your investment decisions. Also, this list can change at any time without prior notice from the SBA.