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The Source for Retirement Planning and Investing

Issue 1, 2007

Small changes, big results


Small changes in your contribution strategy may make a big difference over time. Learn more.

Exit strategies
If youre leaving your employer for a new job or for retirement, heres what you need to know before you make a decision about your retirement savings.

Rebalancing act
Why this regular maintenance strategy is important to keep your portfolio on target.

DEPARTMENTS

market beat
Understanding the market
Simple guidelines to help you become a more informed investor.

Contacting Merrill Lynch


Benefits OnLine Web site www.benefits.ml.com Call your Retirement Service Center toll free To learn about distribution options, call the Retirement Education Services team at 1-877-637-1786

investor toolbox

Measuring your investment progress


What is the most effective way to measure your investment performance?

1 The Source for Retirement Planning and Investing Issue 1, 2007

Small changes, big results


Wondering what could happen if you raise the amount you contribute to your retirement plan account? Make it a new years resolution to save more in 2007. Opportunity may be hiding in your retirement plan, just waiting to go to work for you. You may be able to get a bigger tax break by contributing more to your plan. If you just turned 50, you may be eligible for catch up contributions that can help you make up for years when you couldnt save enough. You may even be entitled to free money*, if your employer offers to match some portion of your contribution. Saving for retirement may be one of the biggest financial challenges youll ever face, but even small changes in your contribution strategy can make a difference over time.

To the limit
The IRS maximum amount you can contribute to your employers retirement plan pre-tax in 2007 is $15,500. And its indexed for inflation to rise in $500 increments in future years, whenever the cumulative effects of inflation are high enough. Continued on next page.

* Subject to eligibility and vesting requirements.

2 The Source for Retirement Planning and Investing Issue 1, 2007

Continued from previous page.

After-50 catch up
Saving for retirement is the single most important long-term financial goal for most working Americans. But if you got off to a slow start in your younger years, theres a way to help make up for some lost time. Congress has created a separate category of catch-up contributions for individuals who are age 50 and older. Currently, if you will be at least age 50 anytime during the year, you are eligible to add $5,000 above and beyond the IRS maximum pre-tax 2007 contribution limit of $15,500. If you added $5,000 to your retirement account every year between ages 50 and 65, earning 6% a year, you could end up with quite a catchan additional $116,379.85* for retirement.

Getting a raise or a bonus?


If youre getting a raise or a bonus in 2007, use it to increase your savings by 1%, 2% or more. Youll never miss the dollars in your paycheck, and youll increase your retirement savings.

If youre not contributing the maximum to your plan, consider a strategy to get closer to the mark in the years to come. When you contribute the maximum to your account, you get the full benefit of tax-deferred growth potential. And the higher your contribution, the larger the tax deferral. Thats because the money you contributed is taken out of your pay before federal income tax is calculated. Even if you cant contribute the maximum to your plan today, you may be surprised what you can achieve when you raise your current contributioneven just a little. Say, for example, that you earn $48,000 per year, and contribute 8% of your salary ($320 monthly, $3,840 annually) to your 401(k) and it averages an annual return of 6%. Now, consider what would happen if you raised your contribution by 2% (an increase of $80 monthly, $960 annually), earning the same 6% return.

* This hypothetical illustration assumes an annual contribution of $5,000 and a 6% annual rate of return, compounded yearly. Hypothetical results are for illustrative purposes only and are not meant to represent the past or future performance of any specific investment vehicle. Investment return and principal value will fluctuate and when redeemed the investments may be worth more or less than their original cost. Taxes are due upon withdrawal. If you take a withdrawal prior to age 59 1/2, you may also be subject to a 10% tax penalty.

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Continued from previous page. As you can see in the chart at right, you could accumulate $321,445 after 30 years with your current contribution rate of 8%. But you could accumulate an additional $80,361 in retirement savings if you raised your contribution by just $80 a month for that same 30 years (total of $401,806). Whats $80 a month? A new pair of shoes. Two trips to the movies with you and three friends. Just one night out on the town. You dont have to give them all up. Just a small sacrifice, and look at the difference it could make down the road.

A contribution increase of just 2% can make a difference!**


$400,000 $350,000 $300,000 $250,000 $200,000 $150,000 $100,000

You could accumulate a total of

$401,800
after 30 years if you increase your contribution to 10% $4,800/year (pre-tax pay)

You could accumulate a total of

$321,400

Free money*
Free money for your retirement account? Thats what you could receive if your employer offers a match on your contributions. Even if you contribute less than the maximum to your plan, it makes good sense to max out the match, if availablecontribute at least enough to get the maximum matching amount possible. In fact, leaving match money on the table is like throwing it away: its lost forever if you pass it by. But when you take advantage of an employer matching contribution, you lock in an immediate return on your investment (although it will be subject to investment performance in your account).

$50,000 $0

after 30 years with a contribution rate of 8% $3,840/year (pre-tax pay)

After 10 Years

After 20 Years

After 30 Years

As you can see, you could accumulate an additional $80,400 if you raised your contribution by just $80 a month for that same 30 years.
**This hypothetical illustration assumes a salary of $48,000, an 8% and 10% contribution rate, respectively; and a 6% annual rate of return, compounded monthly. Hypothetical results are for illustrative purposes only and are not meant to represent the past or future performance of any specific investment vehicle. Investment return and principal value will fluctuate and when redeemed the investments may be worth more or less than their original cost. Taxes are due upon withdrawal. If you take a withdrawal prior to age 59 1/2, you may also be subject to a 10% tax penalty.

Continued on next page.

* Subject to eligibility and vesting requirements.

4 The Source for Retirement Planning and Investing Issue 1, 2007

Continued from previous page.

Start small, aim high


As you turn the calendar to 2007, consider setting a higher goal for your retirement savings. Your target should be to save at least 10% of your pre-tax income for retirement. Thats the amount many experts say youll need to save throughout your working years to build a nest egg that can generate adequate income in retirement. Even if your current contribution falls short of the mark, one of the easiest ways to close the gap is to make small increases over time. Just remember: the balls in your court. In order to defer more of your income for retirement, you must make a new contribution election, according to the procedure for your plan. Put it on your resolution list and do it today. To make an election change or for more information, please contact Merrill Lynch. Log on to Benefits OnLine at www.benefits.ml.com, or call the Retirement Service Center.

Unless otherwise noted, all service marks (registered or otherwise) are the property of Merrill Lynch & Co., Inc. January 2007 Merrill Lynch, Pierce, Fenner & Smith Incorporated. Published in the U.S.A. Member, Securities Investor Protection Corporation (SIPC). 20071020

5 The Source for Retirement Planning and Investing Issue 1, 2007

Exit strategies
Leaving your employer for a new job or for retirement? Heres what you should know before you make a decision about your retirement savings.
If youre changing jobs or leaving the workforce, either temporarily or to retire, you have plenty of company. Its a transition made annually by millions of American workers. Its also a time for deciding what to do with the money youve saved in your employers tax-deferred retirement plan. Before you make a hasty decision, consider that the choices you make today could determine how well you live in retirementwhether its around the corner or decades away.

Help when you need it most


There are a number of facts and rules that may apply to your account balance in the plan when you leave. Its important that you understand each of these before you take action. Merrill Lynch Retirement Education Services is ready to help with the information you need, help in understanding your options, and assistance in taking action. To get started, review your options on the next page, then see the section called Get expert help, which follows.

Continued on next page.

6 The Source for Retirement Planning and Investing Issue 1, 2007

Continued from previous page.

Consider your options


Generally speaking, you have up to four options for your tax-deferred retirement savings, depending on your age and your next step in the workforce

1) Leave your money in your current employers plan


Preserve tax-deferred growth potential No current tax or penalty due Regardless of your reason for leaving, your retirement savings can stay right where they are until age 65or longeras long as your account balance is at least $5,000 (annual administration fees may apply). Savings in a tax-deferred workplace savings plan are protected from creditors under federal law.

2) Roll over to your new employers plan


Preserve tax-deferred growth potential No current tax or penalty due If youre leaving your current employer for a new one, you may be able to roll over your retirement savings to your new employers plan, if the plan allows. With a rollover, youll preserve tax-deferred growth potential and defer current taxes and penalties. However, there may be a waiting periodand not all employer plans accept rollovers. You are also limited to the investment options available in your new plan. Generally, you can withdraw money from your account without the 10% early withdrawal penalty if youre age 59 1/2 or older. In addition, you may qualify for a penalty-free withdrawal for a first-time home purchase and for education expenses. It all adds up to greater choice, control and convenience.

Continued on next page.

7 The Source for Retirement Planning and Investing Issue 1, 2007

Continued from previous page.

3) Roll over to an individual retirement account (IRA)


Preserve tax-deferred growth potential No current tax or penalty due Wide range of investment options No matter what your reason for leaving your employer, you can always roll over your savings to an IRA. It can be easier to manage your retirement savings in a rollover IRA because you can continue to use the IRA to consolidate your eligible retirement assets no matter how many times you change jobs. If youre ready to retire, a rollover IRA can make it easier for you to create a retirement income strategy. Youll also have access to a wider range of investment options including stocks, bonds, mutual funds, CDs and treasuriesand more distribution options for your beneficiaries. Access to investment advice and guidance is also available to you. Generally, you can withdraw money from your account without the 10% early withdrawal penalty if youre age 59 1/2 or older. In addition, you may qualify for a penalty-free withdrawal for a first-time home purchase and for education expenses. It all adds up to greater choice, control and convenience. For most plans, you can make a distribution online at Benefits OnLine and open a rollover IRA in a few easy steps.

4) Withdraw some or all of your plan savings


Forfeit tax-deferred growth potential on the amount withdrawn Subject to immediate 20% withholding for taxes on the withdrawal Income tax due, and potential 10% tax penalty, depending on your age Taking your savings in a cash distribution will leave you owing federal and any applicable state income tax on the amount of any withdrawal, plus a possible 10% tax penalty if you are under age 59 1/2, or under age 55 if you are separated from service. For example, if you are in the 28% tax bracket and withdraw $10,000 from your plan, you would pay $2,800 to federal income tax. You can subtract another $1,000 if youre subject to a 10% tax penalty, leaving you with $6,200 or less if youre also subject to state income tax. Even if youre between jobs, it may be a good idea to exhaust all other options before you withdraw tax-deferred retirement savings because taxes and a potential penalty could dramatically reduce the value of your withdrawal. And if you have an outstanding loan against your account, the balance owed will also be treated as a taxable withdrawal. Continued on next page.

8 The Source for Retirement Planning and Investing Issue 1, 2007

Continued from previous page.

Special tax treatment available for company stock


If you own company stock in your tax-deferred accounts, you may be eligible for a special tax treatment. And if you own stock that has appreciated significantly, this special tax treatment could save you thousands of dollars. Strict rules govern the distribution of company stock and you must follow them to the letter in order to qualify for this special tax treatment. And, if youre under age 59 1/2, this type of distribution may be subject to a 10% early withdrawal penalty. For more information on rules, eligibility and other considerations, consult a financial advisor before you take any action.

Questions about your retirement plan options?


Get the help you need when you call a Merrill Lynch Retirement Education Services representative at (877)-637-1786. Our team of experts is available to answer your questions about the transition to another employer or to retirement. We can also help you understand and evaluate your distribution options and provide a distribution analysis of your retirement savings at no charge. A Retirement Education Specialist can talk with you about your personal situation and give you objective answers as you decide what to do with your savings plan.

Get expert help


The decisions you make today about your retirement savings can have a permanent impact on your retirement future. Thats why half of all job changers consult a professional financial advisor to help them decide what to do with their retirement plan savings. If youre seeking help with your choices, make sure you choose a financial advisor with the expertise and experience to provide the guidance you need. You can elect to work with a Merrill Lynch financial advisor, on a fee-for-service basis, either on the phone or in person at a local branch office.

For assistance in getting started, call a Merrill Lynch Retirement Education Services representative at (877) 637-1786.

Unless otherwise noted, all service marks (registered or otherwise) are the property of Merrill Lynch & Co., Inc. January 2007 Merrill Lynch, Pierce, Fenner & Smith Incorporated. Published in the U.S.A. Member, Securities Investor Protection Corporation (SIPC). 20071020

9 The Source for Retirement Planning and Investing Issue 1, 2007

Rebalancing act
The easiest way to keep your investment plan on track can be the hardest thing you ever do.
One of the basic principles of long-term investing is to have an asset allocation plan and stick to it. But that can be easier said than done. Even if you have a simple asset allocation plana 50/50 split between stock and bond funds, for exampleyoull have to perform a regular maintenance strategy called rebalancing to keep your portfolio on target.

Managing your asset allocation


Asset allocation plans require regular maintenance because markets move at different paces over cycles that can last for several years. For example, stock funds were strong performers in the late 1990s. Then bond funds had their day in the sun, outperforming stock funds from 2000 through 2002. Varying rates of performance are normal, but they are likely to shift your asset allocation plan off its target. The shift may not be obvious after a year or two. But left untended, even a straightforward 50/50 asset allocation could end up way off its mark after five to ten years.

Why rebalancing matters


What does it mean if your asset allocation shifts a few percentage points here or there? After it shifts, its no longer your personal asset allocation it no longer reflects your risk tolerance, goals and time horizon. If your stock allocation rises more than bonds, your portfolio becomes more risky. If your bond allocation rises more than stocks, your portfolio becomes more conservative. Either way, its not the allocation you started with. And your goal should be to keep your allocations as close to their targets as possible, using an approach called rebalancing.

Continued on next page.

10 The Source for Retirement Planning and Investing Issue 1, 2007

Continued from previous page.

How rebalancing works


Heres how rebalancing worksat the end of every year, tally up your investments by asset class and check your positions against your intended asset allocation targets (see illustration at right). When a position strays approximately five percentage points above its target, your goal is to cut it back and add a corresponding amount to any position that has fallen below its target (see illustration at right). If you are rebalancing within your retirement account, there are no tax consequences to your actions. However, rebalancing outside your retirement portfolio could involve tax consequences, and its a good idea to consult a tax advisor before you take action. Rebalancing gets more complicated when your portfolio allocations are more complexfor example, if your stock allocation is further divided into categories by investment style or market capitalization. However, the process remains the same.

Heres how rebalancing works


At the end of every year, tally up your investments by asset class and check your positions against your intended asset allocation targets Hypothetical portfolio at the beginning of the year:

50%
Asset Allocation

50%
Asset Allocation

$5,000
Investment Value Stock Funds

$5,000
Investment Value Bond Funds

Same hypothetical portfolio at the end of the year:

Asset Allocat

54.8%ion $6,200 lue

Asset Allocat

45.2%ion $5,100

Investment Va

lue Investment Va Bond Funds

Stock Funds

If your asset allocation shifts, even by a few percentage points, it no longer reflects your personal risk tolerance, goals and time horizon. And your goal should be to keep your allocations as close to their targets as possible.
Continued on next page.

Since the position shifted nearly five percentage points from target, exchange $550 from the stock fund position and invest it in the bond fund to bring the stock/bond allocation back to 50/50.

50%
Asset Allocation

50%
Asset Allocation

$5,650
Investment Value Stock Funds

$5,650
Investment Value Bond Funds

11 The Source for Retirement Planning and Investing Issue 1, 2007

Continued from previous page.

Battling your emotions


Rebalancing may be hard for many investors because it seems to go against the grain: You may have to cut back on the funds that have done well and add to funds that have not kept up. But dont let your emotions get in the way of following through. Rebalancing is what makes asset allocation work over the long term. Many investors who let their stock positions run over the top in the late 1990s might have spared themselves a significant loss in value by rebalancing before the severe downturn in the spring of 2000. Rebalancing is a long-term strategy that seeks to balance your targeted asset allocation with your original risk tolerance. To help you get started in selecting an asset allocation, Benefits OnLine, the plan Web site, includes the Retirement Asset Selector tool. To access the tool, log on to the Benefits OnLine, select the Planning tab at the top of the home page, and Investing. Then, click on Retirement Asset Selector, which can help you identify a basic allocation among stocks, bonds and cash equivalent investments. If you are actively engaged in an asset allocation strategy, you will find that your needs change as you move through the various life stages. For that reason, some professional money managers recommend moving a portion of your assets to a different model several years prior to major life changes. For example, if you are ten years away from retirement, you may consider moving 10% of your holdings into an income-oriented allocation model each year. By the time you retire, your entire portfolio would reflect your revised objectives. Keep in mind that diversification does not assure a profit or protect against a decrease in value in a declining market. An asset allocation strategy may help you identify the asset class you wish to invest in, but you need to learn about the specific mutual funds you are considering, and once invested, monitor their performance. See the Investor Toolbox, report, Measuring your investment progress. If offered in your plan, Merrill Lynch Advice Access or the GoalManager Portfolio Rebalancing Service can simplify the task of choosing investments and keeping your asset allocation in balance. If your plan offers one of these services, and you have not yet taken advantage of it, you can learn more about it at your convenience on Benefits OnLine, www.benefits.ml.com

Continued on next page.

12 The Source for Retirement Planning and Investing Issue 1, 2007

Continued from previous page. For assistance in getting started, call a Merrill Lynch Retirement Education Services representative at (877) 637-1786.

The Merrill Lynch Advice Access service uses a probabilistic approach to determine the likelihood that a participant of the service may be able to achieve stated goals and/or to identify a range of potential wealth outcomes that could be realized. You should carefully review the explanation of the methodology used, including key assumptions and limitations, which is provided in the Merrill Lynch Advice Access disclosure statement. It can be obtained through Benefits OnLine or through a Retirement Service Representative. IMPORTANT: The projections or other information shown in the Merrill Lynch Advice Access service regarding the likelihood of various investment outcomes are hypothetical in nature, do not reflect actual investment results and are not guarantees of future results. Results may vary with each use and over time.

Unless otherwise noted, all service marks (registered or otherwise) are the property of Merrill Lynch & Co., Inc. January 2007 Merrill Lynch, Pierce, Fenner & Smith Incorporated. Published in the U.S.A. Member, Securities Investor Protection Corporation (SIPC). 20071020

13 The Source for Retirement Planning and Investing Issue 1, 2007

investor toolbox

Measuring your investment progress


If you want to know how much your children have grown over the past year, you measure them with a yardstick. If you want to know how much YOUVE grown over the past year, you get on a scale. (Ouch!) Measuring your investment performance is a similar exercisejust a little more complicated. Sure, you can compare how much money you had at the beginning of the year to your balance at the end of the year, but that doesnt take into consideration 1) how much you added to your investment during the year and 2) how similar investments performed over the same period.

Compare your funds returns to a benchmark index


A more effective way to measure your investment progress is to compare each one of your funds returns to an index or to a peer group of similar funds over the same period. For example, if you own a large-cap growth fund, compare it to a large-cap growth index, such as the Russell 1000 Growth Index. It tracks the performance of approximately 1000 large growth-oriented companies and it can serve as a guideline for your expectations. If the Russell 1000 Growth Index returned 3% and your fund returned 4%, your investment has done well by comparison. A peer group comparison is also valuable: two big companies, Lipper and Morningstar, offer comparisons among similar mutual funds, grouped by asset class, style, size and other factors. Its nice to know that your fund is somewhere close to average. However, you may want to look at a funds performance over a three- to five-year period before you decide to make a change.

Continued on next page.

14 The Source for Retirement Planning and Investing Issue 1, 2007

Continued from previous page. When comparing the performance of different funds, you may want to review both recent performance and a longer time frame, such as 5 or 10 years, to see how the fund has performed in the current market environment and historically over different market cycles. Monthly fund performance can be found on Benefits OnLine, the plans Web site, under 401(k) Plan tab, then click on Investment Strategy and then Fund Performance. Using benchmarks and peer groups can help you keep fund performance in perspective. Its easy to get discouraged if a fund loses money, but if similar funds experienced the same rough patch, possibly the performance is more a result of market trends instead of the funds style or management. In the box below, youll find a list of some common benchmark indexes. Look for themand others when you evaluate the performance of the funds you own. Typically, your account statement may include both your fund performance and a benchmark index. You can also find comparative measures in your funds annual and semiannual reports. For your convenience, you can check your personal rate of return for your investments anytime on Benefits OnLine.

Benchmark examples
If your investment is a Large-Cap Stock Consider these indexes to compare performance S&P 500 Index1 Dow Jones Industrial Average2 S&P Midcap 400 Index3 Russell 2000 Index4 Lehman Brothers Aggregate Bond Index5 MSCI EAFE Index6

Mid-Cap Stock Small-Cap Stock Core Bond Fund International Stock Fund
1 2

A widely recognized, unmanaged index of 500 publicly traded stocks that includes the reinvestment of dividends. A price-weighted average of 30 actively traded blue chip companies 3 An unmanaged index that consists of 400 domestic stocks chosen for market size, liquidity, and industry group representation. 4 An unmanaged index that measures the performance of the 2,000 smallest companies in the Russell 3000 Index 5 An unmanaged index that tracks the total U.S. bond market including reinvestment of interest. 6 An unmanaged, free float adjusted market capitalization index that is designed to measure developed market equity performance, excluding U.S. and Canada. MSCI is a registered service mark of Morgan Stanley Capital International and its affiliates. It is not possible to invest in an index.

Continued on next page.

15 The Source for Retirement Planning and Investing Issue 1, 2007

Continued from previous page. You wouldnt expect to measure the depth of the ocean with a yardstick. If you want an accurate measure of your investment performance, make sure youre using appropriate indexes and peer groups. Finally, once you have evaluated your mutual funds, it is important to monitor each funds performance on a regular basis and assess its performance against your financial goals as well as your targeted asset allocation. Keep in mind that past performance does not guarantee future results. To make an election change or for more information, please contact Merrill Lynch. Log on to Benefits OnLine at www.benefits.ml.com, or call the Retirement Service Center.

toolbox extra!
Easy online access to your accounts 24/7*
You can manage your plan account when its convenient for youvirtually 24 hours a day, seven days a week through Benefits OnLine, the plan Web site. Log on to www.benefits.ml.com for these easy-to-use features: View account information for your employer-sponsored plan(s) Perform investment, saving, distribution and loan transactions View transaction history and account statements Calculate your personal rate of return View investment information and performance Receive quarterly account statements and transaction confirmations online Use modeling and retirement planning tools Receive account alerts and messages
* Certain features may not be available based on your plans parameters.

Unless otherwise noted, all service marks (registered or otherwise) are the property of Merrill Lynch & Co., Inc. January 2007 Merrill Lynch, Pierce, Fenner & Smith Incorporated. Published in the U.S.A. Member, Securities Investor Protection Corporation (SIPC). 20071020

16 The Source for Retirement Planning and Investing Issue 1, 2007

market beat
Understanding the market
Thanks to the Internet, and an emphasis on saving for retirement, its easier than ever to find information on investing and the financial markets. In fact, today there is so much information that it can be hard to know what you should knowand what you should ignore. Here are some simple guidelines that can help you become a more informed investor

1) Choose one or two reliable sources of information.


All major regional newspapers have regular financial pages that report on the economy and the financial markets. There are free financial Web sites that can be even more timely in reporting breaking news. An easy Web search will allow you to select one that you are comfortable with. And many investment companies sponsor Web sites that provide a wealth of objective financial news. You may wish to avoid the hype that comes over the Internet from individual pitchmen or fliers that come in the mail, offering to sell you a program or a newsletter that offers a guarantee of high returns.

2) Know the difference between news and opinion.


Reputable financial sources aim to be unbiased in their reporting of newsand typically give their sources. For example, an article on the economic growth rate is likely to cite the Bureau of Economic Analysis as its information source and a report on consumer confidence typically comes from a survey conducted by the Conference Board. However, most financial publications and Web sites also feature columns by financial experts who give their opinions. Its important to know the difference between news and opinionand to weigh them accordingly. Continued on next page.

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Continued from previous page.

3) Keep market news in perspective.


Some people are financial news junkies. They watch the ticker tape on their TV or computer screens throughout the day. And they obsess over the financial numbers that are reported on the front page of the Wall Street Journals Money & Investing section. Yet, daily market news doesnt add much to your financial knowledgeand it can make you lose your perspective in a volatile market. A more practical strategy is to check in on a few key market factors at the end of every month or quarter. Avoid taking action purely on the basis of what is happening in the market. Let your target asset allocation guide your investment strategy.

New Trading Rule to Stop Market Timing


As you are probably aware, mutual funds families are now able to discourage short-term trading in and out of a fund by implementing trading controls on mutual funds offered by employer-sponsored plans. However, the decision to implement controls is up to each fund family, and some fund families may decide against implementing such controls. If you want to know the applicable controls for a specific fund offered by your plan, youll find it on your plan Web site or through the Retirement Service Center. Be sure to check these important policies before you buy or sell shares of a mutual fund in your plan account.

4) Read the investment reports you receive from your mutual fund company.
Twice a year you receive a financial report about the funds you own, and at least once a year the report includes a message from the portfolio manager telling how the fund was managed and explaining its performance. These reports can help you understand fund performance in the context of the market environment of the period. They tell a more complete story than the raw performance figures. Use them to gain a better understanding of your fund and how it aims to achieve its goals over the long term.

Continued on next page.

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Continued from previous page. For a broader overview of economic activity in the U.S. and around the world, you can also select the Market Pulse tab on Benefits OnLine, where you will find Recent News Headlines, Mutual Funds Insights, Market Indices and other financial information.

Unless otherwise noted, all service marks (registered or otherwise) are the property of Merrill Lynch & Co., Inc. January 2007 Merrill Lynch, Pierce, Fenner & Smith Incorporated. Published in the U.S.A. Member, Securities Investor Protection Corporation (SIPC). 20071020