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HomeMy WebLinkAboutC-7775-2 - Investment Advisory and management Service Agreement - Group Client Number 98310N INVESTMENT ADVISORY AND MANAGEMENT SERVICE AGREEMENT For CITY OF NEWPORT BEACH (the "Plan Sponsor") Group Client Number 98310 Investment Advisory and Management Service Agreement Ef. 3/29/2024 This Investment Advisory and Management Service Agreement sets forth the general terms and conditions under which Empower Advisory Group, LLC (hereinafter referred to as "Adviser") will provide services to City of Newport Beach ("Plan Sponsor") with respect to the employee benefit plan(s) sponsored by Plan Sponsor, as identified in Schedule A (the "Plan" or "Plans"), effective as of March 29, 2024 (the "Effective Date"). Plan Sponsor is engaging Adviser pursuant to this Agreement to provide investment advisory and analytic services to certain participants in employee benefit plans and other compensation programs and arrangements for which Empower Retirement, LLC ("Empower"), provides recordkeeping, administrative and other services for Plan Sponsor as set forth in the service agreement between the Plan Sponsor and Empower ("Service Agreement"). Plan Sponsor maintains the Plan, and on behalf of itself, as Plan Sponsor, and on behalf of the Plan Administrator of the Plan, has the authority to appoint agents and service providers for the Plan. The Plan Sponsor understands that Adviser has selected Morningstar Investment Management, LLC ("Subadviser") to serve as an independent financial expert pursuant to Department of Labor Advisory Opinion 2001-09A (and any modifications or amendments thereto), to perform investment services including advisory services and discretionary Managed Account Services, as further described in Schedule B. NOW, THEREFORE, in consideration of these covenants, mutual representations and agreements contained herein, Adviser and Plan Sponsor agree as follows: 1. Definitions "Agreement" means this Investment Advisory and Management Service Agreement, including any Schedules ("Schedules") that are attached hereto as of the Effective Date or mutually agreed to in writing by the parties. "Advisers Act" shall mean the Investment Advisers Act of 1940, as amended. "Code" shall mean the Internal Revenue Code of 1986, as amended. "ERISA" shall mean the Employee Retirement Income Security Act of 1974, as amended. "Managed Account Participant" shall mean Participants participating in the Managed Account Service, or its successor service. "Managed Account Service" shall mean Adviser's discretionary investment advisory service, as further defined in Schedule B. "Online Advice Participant" shall mean Participants using the Online Advice Service by accepting Adviser's online investment service agreement or terms of use. "Online Advice Service" shall mean Adviser's non -discretionary investment advisory service, Online Advice, or its successor, as further defined in Schedule B. Investment Advisory and Management Service Agreement Ef. 3/29/2024 2 "Opt -out Feature" shall mean a feature of the Managed Account Service selected by the Plan Sponsor through which Participants, designated by the Plan Sponsor, are automatically enrolled in the Managed Account Service, as further defined in Schedule B. "Participant" shall mean an eligible participant, beneficiary or alternate payee who is eligible for the Services. "Plan" shall mean the employee benefit plan or plans or other compensation programs or arrangements maintained by Plan Sponsor as listed in Schedule A (as the same may be amended in writing by the parties from time to time), and/or separately identified in any Schedule. If more than one Plan is covered by this Agreement, any references herein to the Plan shall mean each of the Plans, unless the context requires otherwise. "Plan Administrator" shall mean the "administrator" of the Plan as that term is defined under Section 3(16)(A) of ERISA and Section 414(g) of the Code, or such comparable person responsible for the administration of the Plan in the event the Plan is not subject to such ERISA or Code provisions. "Plan Sponsor"shall mean the entity identified in the opening paragraph of this Agreement. "Rollout Date" shall mean that date on which Adviser has made all of the services provided under this Agreement available to Participants. "Services" shall mean the specific services with respect to the Plan covered by this Agreement (including the Schedules hereto). "Subadviser" shall mean Morningstar Investment Management, LLC. 2. SERVICES PROVIDED BY ADVISER 2.1. This Agreement sets forth the terms and conditions pursuant to which Adviser agrees to provide Services with respect to the Plan pursuant to a Schedule. The terms and conditions of this Agreement shall be deemed to be incorporated by reference into each and every Schedule, without regard to an express reference therein. Adviser acknowledges and agrees that: (i) it is registered with the Securities and Exchange Commission as an investment adviser under the Advisers Act, (ii) it is an investment adviser and fiduciary under the Advisers Act and is a fiduciary under ERISA to the extent it provides Services to Online Advice Participants, and (iii) it is an investment adviser and fiduciary under the Advisers Act and is an investment manager (as defined under Section 3(38) of ERISA) to the extent it provides Services to Managed Account Participants. 2.2. The parties specifically agree that no provision of this Agreement or any Schedule will require Adviser to: (i) provide investment advice to Plan Sponsor or Plan Administrator; (ii) exercise any discretionary authority or discretionary control with respect to the management of the Plan; or (iii) have or exercise any discretionary authority or responsibility in the administration of the Plan, including the selection of the Opt -Out Feature of the Managed Account Service (if applicable). Adviser has no discretion or responsibility to interpret provisions of the Plan or to determine eligibility, participation, or the right to receive benefits under the Plan. 2.3. Adviser shall take appropriate actions and maintain policies and procedures reasonably necessary to ensure Adviser does not engage in any nonexempt prohibited transaction under ERISA in providing Services hereunder. Adviser's policies and procedures are designed to comply with applicable law, including Department of Labor Advisory Opinion 2001-09A (and any modifications or amendments Investment Advisory and Management Service Agreement Ef. 3/29/2024 3 thereto), pursuant to which Adviser has delegated certain obligations under this Agreement to Subadviser, as described in Adviser's Form ADV Brochure. 2.4. Adviser has authorized Empower Financial Services, Inc. ("EFSI"), an affiliate of Adviser, and its licensed agents and registered representatives who are Empower employees (collectively referred to as "Agents") to solicit, refer and market Adviser's services. In addition to their salary, such Agents may earn bonus compensation based upon engaging plan sponsors to offer Adviser's services. Other Agents and Adviser representatives may be indirectly compensated through bonus compensation, in addition to their salary, for communication, education and/or assisting Participants to enroll in Adviser's services. All compensation shall be paid to Agents or Adviser representatives by Adviser. Compensation paid to Agents or Adviser representatives does not increase the fees paid by the Plan and/or their Participants. EAG representatives do not receive commissions in connection with Plan Participant enrollment in the Online Investment Advice or Managed Account service, unless otherwise authorized by the Plan. 2.5. Adviser will discharge its duties under this Agreement (a) with the standard of care and diligence that a professional custodian would observe in these affairs taking into account the prevailing rules, practices, procedures and circumstances in the relevant market and (b) to the extent applicable to Adviser's duties, with the care and skill required under ERISA (as applicable, the "Standard of Care"). 2.6. Nothing in this Agreement is intended to constitute legal or tax advice from Adviser to Plan Sponsor, or to any other party. Plan Sponsor understands that Adviser has not given and may not give legal advice. All issues should be reviewed and discussed with Plan Sponsor's legal counsel and/or tax adviser. 3. RESPONSIBILITIES OF PLAN SPONSOR 3.1. Plan Sponsor or its designated agents shall be responsible for providing to Adviser accurate data and information necessary to enable Adviser to perform the Services required under this Agreement, including but not limited to, timely and reasonable notification of employer -initiated events, the information, materials, instructions or other data referenced in any Schedule, and the information reasonably requested by Adviser to enable it to comply with federal law concerning Know Your Customer rules under the USA PATRIOT Act, in such form and at such time as the parties mutually agree. Adviser reserves the right to reject or return any documents, materials, or other information that are unreadable, corrupted, or which Adviser is otherwise unable to process with notice to Plan Sponsor of the error causing any such rejection or return. Plan Sponsor agrees to provide or to assist Adviser in obtaining all participant data that is necessary to perform its duties under this Agreement, including but not limited to: date of birth, income, gender, and state of residence. Plan Sponsor acknowledges that timely receipt of appropriate information is a prerequisite to the performance of Adviser's Services and Adviser shall not be liable for any delay or failure in the performance under this Agreement due to Plan Sponsor's failure to comply with the information submission deadlines established and communicated to Plan Sponsor by Adviser in a timely manner. 3.2. Plan Sponsor or Plan Administrator shall make all discretionary decisions with respect to the administration of the Plan relative to the Services and shall direct Adviser in accordance with such decisions. Plan Sponsor shall be responsible for selecting and monitoring the investment options offered through the Plan. In addition, Plan Sponsor agrees, for itself and on behalf of the Plan, that neither Adviser nor Subadviser shall have any authority or responsibility under this Agreement for the selection or monitoring of the Plan's investment options, or the provision of investment advice to Plan Sponsor with Investment Advisory and Management Service Agreement Ef. 3/29/2024 4 respect to the Plan's investment options. Plan Sponsor acknowledges that Empower, as the Plan's recordkeeper, may facilitate the use and awareness of the Services during the Plan enrollment process or as otherwise requested by Plan Sponsor and Empower's call center may refer Participants to Adviser's investment adviser representatives if the call concerns the Plan or their Plan account. Plan Sponsor understands and agrees that, in the event the individual terminates or otherwise un-enrolls from the Managed Account Service, such individual's account shall remain invested in the investment options as selected by the Adviser or Subadviser prior to such termination or un-enrollment and that the individual or Plan Sponsor is responsible for changes to the investment options. 3.3. Plan Sponsor shall be responsible for deciding whether to implement the Opt -Out Feature of the Managed Account Service and determining which Participants shall be subject to the Opt -Out Feature and direct Adviser with respect to such decisions. To the extent Plan Sponsor designates the Managed Account Service as the default investment for the Plan, Plan Sponsor shall be responsible for selecting an investment option for purposes of allocating individual accounts until such time as the Adviser begins management of a Managed Account Participant's account; provided, however, in the event the individual is not eligible for the Managed Account Service, such individual's account shall remain invested in the investment options selected by the individual or the Plan Sponsor until the individual or Plan Sponsor directs otherwise. 3.4. Under the terms of this Agreement, Plan Sponsor appoints Adviser as an investment adviser or investment manager, as applicable. As an investment manager, Plan Sponsor authorizes Adviser, without limitation, to initiate with Empower buys, sells, reallocations or other investment transactions and to calculate installment distributions, if applicable, under the Plan for Managed Account Participants. Plan Sponsor acknowledges and agrees that each Managed Account Participant will acknowledge Adviser at the time of participation in the Managed Account Service. Any Managed Account Participant enrolled in the Managed Account Service through the Opt -Out Feature or Plan default process will be deemed, by and through the Plan Sponsor, to have so acknowledged Adviser by the Managed Account Participant's continued participation in the Managed Account Service after the applicable deadline by which such Participant was required to have declined participation in the Managed Account Service. Plan Sponsor understands and acknowledges that: (i) Adviser does not affect investment transactions and that investment transactions will be affected by the appropriate party or agent chosen by the Plan Sponsor, including the Plan's trustee or custodian; (ii) Adviser will communicate, through Empower, information to initiate the investment transactions to such parties; and (iii) Empower will make available to Adviser the investment transaction information related to the investment allocations directed by Adviser. Plan Sponsor also agrees that transactions initiated by Adviser on behalf of Managed Account Participants shall not be subject to any Plan limitations or corporate policy restrictions, such as blackout periods (other than a blackout period applicable to all Managed Account Participants at the same time), preclearance requirements, or other transaction restrictions, unless required by law. 3.5. Plan Sponsor acknowledges and agrees that it has received and read Adviser's Form ADV Brochure and Brochure Supplement as required by Rule 204-3 of the Advisers Act. 3.6. Plan Sponsor understands and agrees that the Plan's investment options shall be held by a custodian or trustee duly appointed by Plan Sponsor. Except with respect to the fee deduction described in Section 4, nothing contained herein shall be deemed to authorize Adviser to take or receive physical possession of any of the assets of the Plan or to confer custody of such assets upon the Adviser within the meaning of Rule 206(4)-2 of the Advisers Act. Adviser does not have any proxy voting or other execution Investment Advisory and Management Service Agreement Ef. 3/29/2024 5 powers under the Plan, the Services, this Agreement or otherwise. Plan Sponsor has designated a person or persons other than Adviser to vote proxies with respect to the Plan's investment options. 3.7. Adviser shall be entitled to rely upon and act upon any instruction, certification, direction or approval received (whether in writing, orally, by telephone, voice response system, fax or other teleprocess, or by other electronic means or other medium, including internet or e-mail transmission, acceptable to Adviser) from Plan Sponsor. Adviser shall have no duty to inquire or question the accuracy or completeness of any data or instructions provided to it; provided, however, that if Adviser has actual knowledge that such data or instructions provided by Plan Sponsor is erroneous or would result in erroneous transmission of such information, it shall so promptly notify Plan Sponsor. 3.8. Plan Sponsor represents that the Plan is qualified under Section 401(a) of the Code, where applicable, that the Plan Administrator has been duly appointed under the Plan, and that the person executing this Agreement is authorized to do so. Plan Sponsor shall be responsible for maintaining the Plan's documents, including any amendments thereto based upon design modifications, for determining operational compliance of the Plan with Plan documents, and, where applicable, for ensuring that the Plan is qualified under Section 401(a) of the Code and its related trust is tax-exempt under Section 501(a) of the Code. Plan Sponsor will notify Adviser promptly if Plan Sponsor should learn of any facts or of any regulatory action or prospective action which may result in the Plan ceasing to be qualified, where applicable, under Section 401(a) of the Code. Plan Sponsor acknowledges that while Adviser may possess and consult a copy of the Plan, trust agreement or related document(s), the possession or consultation of those documents shall not alter or expand Adviser's responsibilities under this Agreement. If the Services will be offered in a non -qualified plan, Plan Sponsor has reviewed the form of payment of Adviser's fees and determined that it is appropriate given the design and operation of the non -qualified plan. 4. FEES & CHARGES 4.1. Adviser shall be entitled to compensation for the Services it provides in accordance with the fee provisions set forth in the applicable Schedule. Fees will be deducted from the Plan's trust or other funding vehicle, charged to Participant accounts, or invoiced to the Plan Sponsor as elected in the applicable Schedule or directed by Plan Sponsor. Plan Sponsor shall be responsible for determining that fees paid are reasonable expenses of administering the Plan. 4.2. Plan Sponsor acknowledges and agrees the Managed Account Service fees will be deducted directly from Managed Account Participant accounts in arrears. Plan Sponsor authorizes Empower to collect these fees on behalf of Adviser and to deduct fees from Managed Account Participant accounts in accordance with the service elections and fees described in Schedule B. 4.3. Adviser may provide additional services pursuant to instruction or direction from the Plan Sponsor. Any fees for such additional services will be agreed upon by Adviser and the Plan Sponsor prior to the provision of additional services. 5. CONFIDENTIAL INFORMATION 5.1. In order to perform the Services, both parties may have access to certain information of the other party, including, without limitation, trade secrets, commercial and competitively sensitive information of the party related to business methods or practices, and proprietary software, websites, programming techniques, documentation and training materials owned or licensed by the party Investment Advisory and Management Service Agreement Ef. 3/29/2024 6 ("Confidential Information"). For the purpose of clarity, any software or website made available by Adviser, including software licensed by third parties ("Adviser Software") is Confidential Information of Adviser. The parties mutually agree to hold all Confidential Information of the other party in confidence and not to disclose any Confidential Information of the other party to anyone except the parties' affiliates, suppliers, and respective personnel who have a need to know such information in connection with the performance or receipt of Services hereunder and who are subject to confidentiality obligations or as directed or approved by the other party or its agents. Confidential Information does not include: information that is otherwise in the public domain through no action of the non -disclosing party; information that is acquired by a party from a person other than the other party or its agents without any obligation of confidentiality; or information that is independently developed by a party without reference to the Confidential Information of the other party. 5.2. In the event a party is required to a make legally required disclosure of the other party's Confidential Information, such party shall notify the other party of the disclosure as soon as reasonably practicable and shall cooperate with any efforts by such party to obtain protective treatment of such Confidential Information to the extent permitted by law. The foregoing shall not apply to (i) broad -based regulatory examinations associated with a party's general business or operations; (ii) disclosures made in conjunction with a law enforcement investigation or inquiry; (iii) or where notice is prohibited by laws. For purposes of Rule 14(b)-1 and Rule 14(b)-2 of the Securities Exchange Act of 1934, as amended from time to time, Plan Sponsor authorizes Adviser, and/or its Affiliates and services providers, to provide the name, address and share position of the Plan with respect to any class of securities registered under the Investment Company Act of 1940 when requested by such SEC registrant for purposes of shareholder meetings. The above -referenced rules prohibit the requesting SEC registrant from using the Plan's name and address for any purpose other than corporate communications of the type contemplated under the rules. 5.3. Plan Sponsor authorizes Adviser to disclose Data to Adviser's Affiliates and service providers who are subject to confidentiality obligations and who have a need to know such information in connection with Adviser's performance of Services under this Agreement. In addition, Plan Sponsor authorizes Adviser to disclose Data to Plan Sponsor's advisors, third -party administrators, service providers (such as payroll providers) and representatives authorized by Plan Sponsor in writing to receive such Data. Adviser may use and disclose, for benchmarking and research purposes, de -identified Data that is aggregated with other anonymized data of a similar nature across Adviser's client base in a manner that makes such Data unidentifiable to a particular individual or plan. Adviser's current Privacy Notice is attached to this Agreement, but shall not lessen any of Adviser's obligations regarding Personal Data hereunder. 6. PRIVACY & DATA SECURITY 6.1. Plan Sponsor acknowledges and agrees that Adviser may receive Participant data from any and all Participants, including those Participants that are not enrolled in the Managed Account Service or the Online Advice Service (as described in Schedule B) and from Plan Sponsor or its authorized agent or advisors. Plan Sponsor authorizes Adviser to obtain all necessary data from Participants, Plan Sponsor, Plan Sponsor's agents or advisors, and Adviser's affiliates, including the Plan's recordkeeper, Empower. 6.2. Adviser and Plan Sponsor agree to maintain and hold in confidence all Data and Confidential Information, as applicable, received in connection with the performance of Services under this Agreement. Adviser and Plan Sponsor agree that their collection, use and disclosure of all Data is and will at all times be conducted in compliance with all applicable data protection and/or privacy laws. Each party Investment Advisory and Management Service Agreement Ef. 3/29/2024 7 will implement, support, and maintain appropriate physical and logical security measures designed to secure Data, and will take all commercially reasonable organizational and technical steps to protect against unlawful and unauthorized processing of Personal Data. In accordance with the foregoing, Adviser and/or its Affiliates maintain a comprehensive data security program designed to safeguard Data and access to the Adviser Software and systems. 6.3. The parties will promptly notify each other in the event of an Information Security Breach. Such notice shall include: (i) the consequences of the breach, including (without limitation) any potential impact on the other party's security measures, systems, Data, Confidential Information, or the Adviser Software; and (ii) the corrective action taken to remedy the breach. In addition to the foregoing, Plan Sponsor will notify Adviser immediately upon discovering a compromise of the security and/or log -on credentials of any Plan Sponsor employee or agent that has a plan administration role in Adviser's system. 6.4. Adviser acknowledges that it is a "financial institution," within the meaning of Regulation S- P, Privacy of Consumer Financial Information, issued by the Securities and Exchange Commission ("Reg S-P") along with the GLBA and other applicable federal and state laws. Adviser acknowledges and agrees that Participant information which uniquely identifies a Participant and as provided to Adviser under this Agreement ("Participant Information") constitutes "personally identifiable financial information," within the meaning of those federal and state laws. Adviser has adopted a privacy policy, which will apply to Participant Information that may be amended from time to time. 6.5. Without limiting the generality of the foregoing, Adviser represents that its security standards and its data security program (as may be amended from time to time), substantially aligns with the 'Cybersecurity Program Best Practices' issued by the U.S. Department of Labor in April 2021. As additional information, clarification, and interpretation are made available further defining the scope, meaning and effect of such guidance (as well as its `Online Security Tips' and 'Tips for Hiring a Service Providerwith Strong Security Practices'), and/or in order to assist Plan Sponsor in meeting their obligations under such guidance (and applicable law) and mitigating cybersecurity and related risks, Adviser agrees to provide additional information regarding its data and cybersecurity practices as reasonably requested by Plan Sponsor. Adviser agrees to comply with all laws applicable to Adviser in its provision of the Services, including cybersecurity laws applicable to Adviser in its provision of the Services. 7. BUSINESS CONTINUITY & DISASTER RECOVERY Adviser will maintain business continuity and disaster recovery procedures to address the security, integrity and availability of the technology, operational, financial, human and other resources required to provide mission -critical Services in the event of a natural disaster or other interruption of normal business operations. Such procedures will be tested at least once annually. Empower Financial Services, Inc.'s current Business Continuity Plan Notice is attached to this Agreement. By executing this Agreement, Plan Sponsor acknowledges receipt of this Notice. 8. RECORDS Adviser shall retain all records in its custody and control that are pertinent to performance under this Agreement in accordance with its record retention policy and as required by law. Subject to the foregoing, each party agrees to return or destroy the other party's Confidential Information and Data once it is no longer required for the purpose of performing or receiving the Services, provided that the parties are not obligated to destroy copies of Confidential Information or Data that must be retained for audit, legal or Investment Advisory and Management Service Agreement Ef. 3/29/2024 8 regulatory purposes, or is stored in non -readily accessible electronic format, such as on archival systems; in such cases Adviser's data protection obligations shall continue until such Data is destroyed in accordance with Adviser's record retention policy. 9. INTELLECTUAL PROPERTY RIGHTS 9.1. Plan Sponsor Materials. As between the parties hereto, excluding Adviser Materials (as defined below), Plan Sponsor shall own all materials, trademarks, tradenames, logos, trade dress, and other Confidential Information provided or made accessible by Plan Sponsor to Adviser for use in providing the Services (collectively, the "Plan Sponsor Materials"). Plan Sponsor Materials do not include data and information in the form supplied by Adviser to Plan Sponsor. Plan Sponsor grants to Adviser a limited, revocable right and license to use Plan Sponsor Materials in connection with its provision of the Services. 9.2. Adviser Materials. As between the parties hereto, Adviser and its affiliates shall own all materials, documentation, user guides, forms, templates, business methods, trademarks, tradenames, logos, websites, Adviser Software, technology, computer codes, domain names, text, graphics, photographs, artwork, interfaces and other information or material provided by Adviser or its affiliates hereunder (collectively, the "Adviser Materials"). Adviser grants to Plan Sponsor a nonexclusive, non- transferable and non-sublicensable license to use the Adviser Materials during the term of the Agreement for purposes of using Adviser's Services hereunder and subject to the terms and conditions set forth in this Agreement and any terms of use associated with Adviser Software. Plan Sponsor and Plan Administrator shall not, and shall not enable third parties to, reproduce, modify, create derivative works of, or distribute any or all of Adviser's services or reverse engineer any of the software or other technology related thereto. All rights with respect to the Adviser Materials not specifically granted hereunder are reserved by Adviser. 10. LIABILITY & INDEMNIFICATION 10.1. Adviser shall defend, indemnify, and hold harmless the Plan Sponsor and its affiliates, members, directors, officers, shareholders, employees, representatives, agents, successors and assigns and the Plan (the "Plan Sponsor Indemnified Parties") from and against any and all expenses, costs, reasonable attorneys' fees, settlements, fines, judgments, damages, liabilities, penalties or court awards asserted by a third party (collectively, "Damages") to the extent resulting from Adviser's (1) breach of this Agreement, (2) negligence, fraud, breach of fiduciary duty or willful misconduct, (3) breach of the Standard of Care, or (4) violation of applicable law. Notwithstanding anything to the contrary herein, Adviser shall not be liable to Plan Sponsor for,: 1) any acts or omissions undertaken at the direction of the Plan Sponsor or any agent of any third party authorized by Plan Sponsor to provide direction to Adviser, including but not limited to prior service providers, investment advisors, or any authorized agent thereof,; or 2) Plan Sponsor's or its designee's failure to provide accurate documents, material, information or data to Adviser or its Affiliates, as applicable, on a timely basis. Notwithstanding the foregoing, the Plan Sponsor shall not be entitled to any indemnification hereunder to the extent its liabilities, losses, costs or expense are attributed to Plan Sponsor's or its Agent's or Adviser representatives' negligence or willful misconduct. 10.2. Plan Sponsor shall defend, indemnify, and hold harmless Adviser and its affiliates, members, directors, officers, shareholders, employees, representatives, agents, successors and assigns and the Plan (the "Adviser Indemnified Parties") from and against any and all Damages to which the Adviser Indemnified Parties may be subjected as a result of Plan Sponsor's (1) negligence, fraud or willful misconduct in connection with the performance of this Agreement, or (2) violation of applicable law. Notwithstanding the foregoing, Adviser shall not be entitled to any indemnification hereunder to the extent Investment Advisory and Management Service Agreement Ef. 3/29/2024 9 its liabilities, losses, costs or expenses are attributed to Advisor's or its Agent's or Adviser representatives' negligence or willful misconduct. 10.3. The party seeking indemnification (the "indemnitee") shall promptly notify the other party (the "indemnitor") of any third party claim for which indemnification is sought, following actual knowledge of such claim, provided that failure to do so shall not relieve the indemnitor of its indemnification obligation except to the extent that it can demonstrate damages attributable to such failure. In the event that any third party claim is brought, the indemnitor shall have the right and option to undertake and control the defense of such action with counsel of its choice, provided however that (1) the indemnitee at its own expense may participate and appear on an equal footing with the indemnitor in the defense of any such claim, and (2) the indemnitee may undertake and control such defense in the event of the material failure of the indemnitor to undertake and control the same. The Adviser Indemnified Parties or Plan Sponsor Indemnified Parties, as applicable, shall not consent to judgment or concede or settle or compromise any claim without the prior written approval of the indemnitor (which approval shall not be unreasonably withheld). 10.4. NOTWITHSTANDING ANYTHING TO THE CONTRARY IN THIS AGREEMENT NEITHER PARTY SHALL BE LIABLE TO THE OTHER FOR ANY INDIRECT, SPECIAL, PUNITIVE, INCIDENTAL, OR CONSEQUENTIAL DAMAGES (INCLUDING, WITHOUT LIMITATION, LOSS OF REVENUE OR PROFIT) EVEN IF THE PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES. 10.5. Adviser represents that it maintains error and omissions insurance, a fidelity bond under Section 412 of ERISA, and other appropriate insurance coverage in amounts sufficient to satisfy all material obligations of Adviser for Services under this Agreement. 11. DISPUTE RESOLUTION The parties shall engage in reasonable and good faith discussions to resolve any dispute arising out of or relating to this Agreement. If the parties are unable to agree between themselves, the parties will submit the dispute to non -binding mediation conducted by a private mediator agreed to by both parties. If the parties cannot agree on a mediator, the mediator may be selected by a nationally recognized, independent arbitration or mediation organization to which the parties mutually agree. The costs of mediation shall be borne equally by the parties, and each party shall pay its own expenses. If the parties are unable to resolve the dispute through non -binding mediation, either party may initiate litigation; provided, however, that if one party requests mediation and the other party rejects the proposal or refuses to participate, the requesting party may initiate litigation immediately upon such refusal. 12. TERM & TERMINATION 12.1. Term. Either party may terminate this Agreement with ninety (90) days written notice to the other party of its intent to terminate, unless terminated in accordance with the applicable provisions of Section 12.2 of this Agreement. 12.2. Termination. This Agreement shall terminate automatically in the following circumstances: 12.2.1 Either party notifies the other that it has determined in good faith that the Agreement is not consistent with its fiduciary duties under ERISA or applicable federal or state law; or Investment Advisory and Management Service Agreement Ef. 3/29/2024 10 12.2.2 The Service Agreement for recordkeeping, administrative and other services between Plan Sponsor and Empower terminates or expires; or 12.2.3 The agreement between Adviser and Subadviser terminates or expires and Adviser is unable to contract with a suitable replacement to serve as a Subadviser. 12.3. Effect of Termination. As of the effective date of the termination, Adviser will terminate Participant access to the Services and cease providing any Services to Participants. Plan Sponsor will notify Participants, including Online Advice Participants and Managed Account Participants, of the termination as soon as practicable. Adviser may assist Plan Sponsor in notifying Participants, Online Advice Participants and Managed Account Participants regarding the termination of Services; provided, however, to the extent Plan Sponsor requests such assistance, Adviser reserves the right to charge Plan Sponsor all reasonable fees, costs or expenses incurred by Adviser in connection with the provision of such assistance. Termination of the Agreement does not relieve Plan Sponsor or Managed Account Participants of their respective obligations, if any, to compensate Adviser for Services rendered through the effective date of such termination. If applicable, Adviser shall reimburse Plan Sponsor or Participants for any prepaid amounts that relate to the provision of Services after the effective date of termination. 13. MISCELLANEOUS 13.1. Affiliates & Agents. Plan Sponsor acknowledges and agrees that Adviser may utilize the services of affiliates, agents, vendors and suppliers selected by Adviser. Adviser's use of any such party will not relieve Adviser of its obligations hereunder, and Adviser shall at all times remain liable for the performance of the Services hereunder. Plan Sponsor acknowledges that Adviser has delegated certain of its obligations to Subadviser and that Adviser reserves the right, in its sole discretion, to replace Subadviser upon reasonable prior notice to Plan Sponsor. In the event, the Subadviser terminates its agreement with the Adviser and provides advance notice to the Adviser, Adviser will notify the Plan Sponsor of such change as soon as reasonably practicable. If the Subadviser replacement is deemed unsatisfactory by the Plan Sponsor, the Plan Sponsor may terminate this Agreement at any time in accordance with Section 12 herein. Adviser represents that Subadviser is not affiliated with Adviser or Empower and that Adviser has entered into an agreement with Subadviser that includes representations that the Subadviser: (i) is registered with the Securities and Exchange Commission as an investment adviser under the Advisers Act, and (ii) will maintain the required federal or state investment advisory registrations that permit it to perform its obligations under its agreement with Adviser, and (iii) will act, at all times in providing the methodology and software for Adviser's Services, in conformity with the requirements imposed upon Subadviser as an Subadviser under Department of Labor Advisory Opinion 2001-09A (and any modifications or amendments thereto), to the extent applicable to the Services. 13.2. Relationship of the Parties. The relationship between the parties is that of independent contractors. Neither party nor its personnel shall be considered employees of the other party for any purpose. None of the provisions of this Agreement shall be construed to create an agency, partnership or joint venture relationship between the parties or the partners, officers, or employees of the other party by virtue of either this Agreement or actions taken pursuant of this Agreement. 13.3. No Third Party Beneficiaries. This Agreement is solely for the benefit of the parties hereto and their affiliates and is not intended to confer any rights or remedies upon any other person. Investment Advisory and Management Service Agreement Ef. 3/29/2024 11 13.4. Assignment. This Agreement shall be binding upon and inure to the benefit of each of the parties, their affiliates, successors and permitted assigns; provided, however, that neither party may assign its rights or obligations hereunder without the other party's prior written consent, which will not be unreasonably withheld or delayed, and as consistent with the Advisers Act. 13.5. Entire Agreement. This Agreement, including all Exhibits, Schedules, notices and attachments (including an incorporation by reference of the terms and conditions of this Agreement), constitutes the entire agreement of the Parties with respect to the subject matter hereof and supersedes all prior drafts, agreements, negotiations and proposals, written or verbal, relating to the Services. Except as otherwise provided herein, this Agreement or any Schedule may be amended by written agreement of the parties; for that purpose, emails do not constitute signed writings. Notwithstanding the foregoing, Adviser may add or enhance the Services, update the method of providing the Services without any reduction in service, or modify the Services to comply with applicable laws by providing written notice to Plan Sponsor at least 30 days in advance of the effective date of such change, provided that Plan Sponsor may opt out of certain Services that directly impact Participants and any changes that result in an increase in fees to the Plan. Any Adviser policies that are attached to or referenced in this Agreement may be modified by Adviser at any time. No waiver of any breach of any provision of this Agreement shall constitute a waiver of any prior, concurrent or subsequent breach of such provision or any other provision hereof and no waiver shall be effective unless made in writing. 13.6. Governing Law; Waiver of Jury Trial. To the extent not preempted by federal law, this Agreement shall be construed and enforced in accordance with and governed by the laws of the state of Colorado, without regard to conflict of law principles, and any claim arising under or related to this Agreement shall be subject to the exclusive jurisdiction of the federal and state courts located in Colorado. Both parties agree to waive any right to have a jury participate in the resolution of any dispute or claim arising out of, connected with, related to or incidental to this Agreement to the fullest extent permitted by law. 13.7. Force Majeure. Neither Adviser nor Plan Sponsor shall be liable to the other for any and all losses, damages, costs, charges, attorney fees, payments, expenses or liability due to delay or interruption in performing its obligations hereunder, and without the fault or negligence of such party, due to causes or conditions beyond its control, including, without limitation, labor disputes, riots, war and war- like operations including acts of terrorism, epidemics, explosions, sabotage, civil disturbance, governmental restriction, transportation problems, failure of power or other utilities including phones, internet disruptions, fire or other casualty, natural disasters, epidemics, pandemics, acts of God, disruptions in orderly trading on any relevant exchange or market, or any other cause that is beyond the reasonable control of either party. 13.8. Severability. The provisions of this Agreement are severable, and if for any reason a clause, sentence, paragraph or provision of this Agreement is determined to be invalid by a court or federal or state agency, board or commission having jurisdiction over the subject matter thereof, such invalidity will not affect other provisions of this Agreement that can be given effect without the invalid provision. 13.9. Notices. All formal notices required by this Agreement will be in writing and shall be sent to Adviser as set forth below and to the most current Plan Sponsor and trustee address on file with Adviser. All notices sent shall be effective upon receipt. Investment Advisory and Management Service Agreement Ef. 3/29/2024 12 To Adviser: Ken Verzella (or his successor) Vice President, Participant Advisory Services Empower Advisory Group, LLC 8515 East Orchard Road Greenwood Village, CO 80111 with a copy to: Empower Advisory Group, LLC 8515 East Orchard Road Greenwood Village, CO 80111 Attn: General Counsel 13.10. Headings; Defined Terms; Counterparts. Section headings used in this Agreement are intended for reference purposes only and shall not affect the interpretation of this Agreement. Unless the context requires otherwise, capitalized terms defined in this Agreement have the meanings set forth herein for all purposes of this Agreement including any Schedules or Exhibits. This Agreement may be executed in counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same agreement. The parties' execution and delivery of this Agreement by facsimile, email, or electronic copies shall have the same force and effect as execution and delivery of an original. 13.11. Survival. The provisions of the following sections shall survive the termination of this Agreement: Fees & Charges; Confidential Information; Privacy & Data Security; Liability & Indemnification; Dispute Resolution; Governing Law; Waiver of Jury Trial; Survival; Severability; No Third -Party Beneficiaries; and any other section that would by its context be reasonably expected to survive termination. 13.12. Signatures/Corporate Authenticity. By signing this Agreement the parties certify that they have read and understood it, that they agree to be bound by its terms, and that they have the authority to sign it. This Agreement is not binding on either party until signed by both parties. 13.13. Electronic Signatures. Each party agrees that this Agreement and any other documents to be delivered in connection herewith may be electronically signed, and that any electronic signatures reasonably believed to be genuine on this Agreement or such other documents are the same as handwritten signatures for the purposes of validity, enforceability, and admissibility. Investment Advisory and Management Service Agreement Ef. 3/29/2024 13 i Attest: Date: IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their respective duly authorized officers as of the day and year first above written. EMPOWER ADVISORY GROUP, LLC Signature Ken Verzella Printed Name Vice President — Participant Advisory Services Title Date Signed C, City Clerk CITY OF NEWPORT BEACH: Si atu ��G C,L �. e u ✓l, � Printed Name / V Title 3�z1 ?-a Date Signed APPROVED AS TO FORM: CITY ATTO ' OFFICE Date: _5,�UEY_0 az cCv;'Aaron C. Harp, City Attorney Investment Advisory and Management Service Agreement Ef. 3/29/2024 14 IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their respective duly authorized officers as of the day and year first above written. EMPOWER ADVISORY GROUP, LLC Signature Ken Verzella Printed Name Vice President — Participant Advisory Services Title 03/22/2024 Date Signed j Attest: i �.A d_eilani 1. Brown, MMC, City Clerk Date: CITY OF NEWPORT BEACH: C Si atu Printed Name & / ✓ Title 31.7,1 �u- Date Signed APPROVED AS TO FORM: CITY ATTO EY' OFFICE Date: �C—v Aaron City Attorney �slaola�v�, 03/22/2024 Signature/ Date Signed Tina Wilson Printed Name EVP & Chief Product Development Officer Title Investment Advisory and Management Service Agreement Ef. 3/29/2024 14 SCHEDULE A LIST OF PLANS City of Newport Beach 457 Plan ("457(b) Plan") Group Account Number: 98310-01 City of Newport Beach Deferred Compensation Plan ('401(a) Plan") Group Account Number: 98310-03 Investment Advisory and Management Service Agreement Ef. 3/29/2024 15 SCHEDULE B DISCRETIONARY INVESTMENT ADVISORY AND NON -DISCRETIONARY SERVICES SCHEDULE The parties agree that the Services under this Schedule will commence upon a date as directed by the Plan Sponsor and mutually agreed to by the parties, as administratively and operationally feasible. 1. GENERAL DESCRIPTION OF SERVICES 1.1 Adviser provides a full suite of discretionary and non -discretionary investment advisory services to eligible Participants as selected by the Plan Sponsor. Such services may include set-up services, communications, reporting, investment recommendations, and initiation of investment transactions, subject to the terms and conditions of the Agreement and this Schedule, as the same may be amended in writing by the parties from time to time. 1.2 As part of its Services, Adviser provides Participants access by telephone to the telephone call center (investment adviser representatives available from 7:00 a.m. to 8:00 p.m. Central Time, business days), and Adviser shall provide Participants, and designated representatives of Plan Sponsor, web access to Plan and Participant account information, subject to periodic maintenance and system availability. 2. SERVICE ELECTIONS 2.1 Managed Account Service: 2.1.1 As further described in Adviser's Form ADV Brochure, the Managed Account Service provides discretionary advisory services, consisting of personalized portfolios created by Subadviser based upon the investment options available in the Plan, to Managed Account Participants. The Managed Account service allocates enrolled Participant accounts to personalized portfolios, and automatically rebalances portfolio allocations if Adviser believes rebalancing to be appropriate. 2.1.2 Unless otherwise agreed to by the parties, Adviser will construct portfolios using the Plan's core investment options ("Core Investment Options"), which are those investment options selected for use in the Plan by Plan Sponsor that provide investment choice under the following asset categories: Fixed Income/Cash, Bond, Large Cap, Small/Mid Cap, and International. 2.1.3 Core Investment Options do not include any employer stock alternatives or self - directed brokerage option alternatives. Unless the Plan Sponsor restricts Adviser from selling employer stock held in an account managed by Adviser, Adviser will liquidate employer stock held in an account that Adviser manages. The Plan must select and at all times maintain Core Investment Options that cover the broad asset categories in order to utilize the Managed Account Service and the Online Advice Service. Managed Account Participants may further customize their portfolio by providing additional information to Adviser by phone or online and such information shall be considered by Subadviser to determine portfolio recommendations for the Managed Account Participant. Adviser shall periodically review and rebalance the Managed Account Participant's portfolio. 2.1.4 A Managed Account Participant may cancel his or her participation in the Managed Account Service by calling Adviser's representative or through the website. Upon a Managed Account Investment Advisory and Management Service Agreement Ef. 3/29/2024 16 Participant terminating participation in the Managed Account Service, the Managed Account Participant is solely responsible for the investment of his or her Plan account. 2.1.5 While this Agreement assumes that enrollments of Participants will be performed primarily on an "opt -in" basis such that Participants must voluntarily enroll in the Services described herein, the Plan Sponsor may also desire that Adviser's services be implemented for a designated group of Participants on an "opt -out" basis, pursuant to Plan Sponsor's instruction to Adviser. These opt -out events may occur at the time when the Plan begins receiving recordkeeping services from Adviser's affiliated recordkeeping provider, or on some other occasional or periodic basis. This section of the Agreement will refer to the group of Participants designated for opt -out enrollment as "Enrolling Participants." 2.1.5.1 For the Managed Account Service, Plan Sponsor designates the Participants, identified below, as eligible to be automatically enrolled in the Managed Account Service unless a Participant opts out of enrollment. Plan Sponsor Directed Enrollments (Qualified Default Investment Alternative (QDIA)/Default Investment and/or Opt -Out Campaign Feature) Plan Sponsor designates the following Participants to be enrolled in the Managed Account Service: All eligible Participants All Participants newly eligible for Plan enrollment (QDIA/Default investment) Only Participants hired on and after [insert date] Other [describe eligible population] 2.1.6 Adviser or its affiliated recordkeeper will notify Enrolling Participants of their automatic enrollment into the Managed Account Service at least two times. At least one enrollment notification will take place in advance of the automatic enrollment to give Enrolling Participants adequate opportunity to assess whether to opt -out of the enrollment process. Each Enrolling Participant actually enrolled in the Managed Account Service will be sent materials confirming Managed Account Service enrollment by Adviser shortly after enrollment processing. 2.1.7 Enrolling Participants may elect not to participate in the Managed Account Service through the methods described in enrollment notifications provided to Participants, such as by calling Adviser to opt -out, or by declining enrollment through Adviser's internet interface. Additionally, if a Participant has made a financial or investment election on their account after enrollment notification, but prior to the automatic enrollment process into the Managed Account Service, the Participant will not be enrolled. 2.1.8 In the event that Enrolling Participants are automatically enrolled when the applicable Plan converts onto the recordkeeping platform provided by Adviser's affiliated recordkeeper, Enrolling Participants' accounts will become actively managed by the Managed Account Service shortly after assets are transferred from the prior recordkeeper. For the short period between asset transfer from the prior recordkeeper until Adviser can assume active management of the account, Enrolling Participants' accounts will be invested in similar investments as were held at the prior recordkeeper, pursuant to mapping instructions received by the Plan Sponsor. Once conversion to the recordkeeping platform is complete, Enrolling Participants may cancel their enrollment in the Managed Account Service at any time by completing the cancellation form available online or by calling Adviser at the Plan's existing toll -free customer service number. 2.1.9 In the event the Plan Sponsor directs Adviser to enroll Participants on an opt -out basis after the initial transition of the Plan to the Empower recordkeeping platform, Adviser may offer a free period Investment Advisory and Management Service Agreement Ef. 3/29/2024 17 for the Managed Account Service, under which no Managed Account Service fees will be assessed to Enrolling Participants within 60 days following enrollment date. 2.1.10 Data requirements for Enrolling Participants: 2.1.10.1 Subject to the information below, if Adviser does not have required indicative data for an Enrolling Participant, the Enrolling Participant will not be enrolled into the Managed Account Service. 2.1.10.2 Plan Sponsor may provide Adviser with default data for use in processing enrollments for Enrolling Participants, and in advising Participant accounts. If Plan Sponsor provides direction to use default data, such as income assumptions, Plan Sponsor agrees that use of such default data is consistent with Adviser's execution of its fiduciary responsibility in providing investment advice to Participants. 2.1.10.3 Gender Assumption. If gender information is missing on any Participant, Plan Sponsor instructs Adviser to default gender assumption to female, unless Plan Sponsor otherwise instructs Adviser, for purposes of processing Managed Account Service enrollment. 2.1.10.4 Date of Birth. If a Participant's date of birth is beyond the mortality tables used by the independent financial expert, or the Participant's date of birth provided to Adviser is invalid, the Participant will not be eligible to be enrolled into the service 2.2 Online Advice Service. Adviser shall provide access to the Online Advice Service to Participants. For the Online Advice Service, Adviser shall provide non -discretionary advisory services, consisting of investment recommendations created by Subadviser based upon the investment options available in the Plan, to Online Advice Participants. Online Advice Participants shall be responsible for implementing the investment recommendations. Beyond the initial recommendation, Adviser is not responsible for providing additional investment recommendations or the management of an Online Advice Participant's account. The Online Advice Service is only available through websites supported by Empower and Subadviser. Managed Account Participants are not eligible for the Online Advice Service while participating in the Managed Account Service. COMMUNICATION AND ONGOING MAINTENANCE 3.1 Enrollment. Plan Sponsor agrees that Adviser will conduct, (at no additional charge to Plan Sponsor), an education/enrollment campaign as part of the rollout of the Services to all eligible Participants and an annual campaign thereafter. The campaign materials will be provided to each Participant and may include, but are not limited to a descriptive brochure, descriptive letter from Plan Sponsor, enrollment form, follow-up communication and other appropriate materials. Participants can enroll in the Managed Account Service through an online website (accessed through the Plan's participant website or enrollment site), Adviser's investment adviser representatives or by returning an enrollment form. 3.2 Ongoing Communications 3.2.1 Communication and ongoing maintenance includes monitoring the use of Services, and integrating Services communications into the Plan's overall communications campaign, including enrollment materials, forms, web site, and group meetings. 3.2.2 As part of a Participant's enrollment in the Managed Account service, the Participant will receive the Managed Account service welcome kit shortly after enrollment. The Participant will receive an Annual Kit shortly after their birthday. Each kit provides the participant an update on their account and reaching their retirement goals. Standard materials may include a discussion of Services in Investment Advisory and Management Service Agreement Ef. 3/29/2024 18 enrollment/education materials, print/email communications specific to the Services, on the web site, and/or in personalized Participant materials. Additional or custom Participant communications materials may be used by Adviser and may be paid for by Adviser, Empower or the Plan Sponsor. Such additional or custom communications may include targeted marketing techniques based upon participant demographical and/or account data (including but not limited to age, income, deferral rates, current investment elections) to identify Participants who may benefit from participation in the Managed Account service. 4. ADVISORY AND PORTFOLIO MANAGEMENT SERVICES FEES Account Balance Managed Account Annual Fee First $100,000 of account balance 0.50 % Next $150,000, up to $250,000 account balance 0.40 % Next $150,000, up to $400,000 account balance 0.30 % Amounts greater than $400,000 0.20 % For example, if a Participant's account balance subject to the Managed Account Service is $50,000, the fee is 0.50% of the account balance. If the account balance subject to the Managed Account service is $500,000, the first $100,000 will be subject to a fee of 0.50%, the next $150,000 will be subject to a fee of 0.40%, the next $150,000 will be subject to a fee of 0.30%, and amounts over $400,000 will be subject to a fee of 0.20%. 5. ADDITION OF NEW PLANS Tax -deferred plans not listed at the top of this Schedule B that are added to Plan Sponsor's program after the Effective Date will not be included in this Agreement, and will be subject to additional fees. 6. LIMITATIONS AND INVESTMENT OPTION CHANGES Services will have limited capabilities for purposes of enrollment, rebalancing or reforecasting for up to ten (10) business days following changes to the investment option lineup. Other functionality will be available during this time. Adviser and Subadviser need to conduct a new analysis of the available investment option array to accommodate these changes. This analysis will take approximately 10 business days, during which time, Online Investment Advice, and the Managed Account service will not be available for Participant use. Once the analysis is complete, Online Investment Advice and the Managed Account service will once again be available. Investment Advisory and Management Service Agreement Ef. 3/29/2024 19 EXHIBIT 1: PRIVACY NOTICE PRIVACY NOTICE ,. I ; . 1, EMPOWER' FACTS What does Empower Retirement, LLC (Empower) do with your personal information? Financial companies choose how they share your personal information. Federal law gives consumers the WHY? right to limit some but not all sharing. Federal law also requires us to tell you how we collect, share and protect your personal information. Please read this notice carefully to understand what we do. The types of personal information we collect and share depend on the product or service you have with us. This information can include: Social Security number and account balances. WHAT? • Retirement assets and transaction history. Employment information and income. When you are no longer our customer, we continue to share your information as described in this notice. All financial companies need to share customers' personal information to run their everyday business. In the HOW? section below, we list the reasons financial companies can share their customers' personal information, the reasons Empower chooses to share and whether you can limit this sharing. REASONS WE CAN SHARE YOUR DOES EMPOWER CAN YOU LIMIT PERSONAL INFORMATION SHARE? THIS SHARING? For our everyday business purposes — such as to process your transactions, maintain your account(s), respond to court orders and legal investigations, or report to credit bureaus For our marketing purposes — to offer our products and services to you Yes No Forjoint marketing with otherfinancial companies No We don't share For our affiliates' everyday business purposes— Yes No information about your transactions and experiences For our affiliates' everyday business purposes— information about your creditworthiness No We don't share For nonaffiliates to market to you No We don't share QUESTIONS? Call toll -free at 855-756-4738 or go to empower.com/privacy Investment Advisory and Management Service Agreement Ef. 3/29/2024 20 WHO WEARE Who is providing this notice? WHAT WE DO How does Empower protect my personal information? How does Empower collect my personal information? V EMPOWER' Empower and its affiliates. A list of companies is provided at the end of this notice. To protect your personal information from unauthorized access and use, we use security measures that comply with federal law. These measures include physical, technical and procedural safeguards, such as building and system security and personnel training. We collect your personal information, for example, when you: Provide account information or apply for a loan. Enter into an investment advisory contractor seek advice about your investments. Tell us about your investment or retirement portfolio. We also collect your personal information from others, such as credit bureaus, affiliates or other companies. Federal law gives you the right to limit only: Sharing for affiliateseveryday business purposes —information about Why can't I limit your creditworthiness. all sharing? Affiliates from using your information to market to you. Sharing for nonaffiliates to market to you. State laws and individual companies may give you additional rights to limit sharing. DEFINITIONS Companies related by common ownership or control. They can be financial and nonfinancial companies. Affiliates Our affiliates include companies with the Empower, Great -West Life & Annuity or Great -West names, as listed below, and otherfinancial companies such as Advised Assets Group, LLC and GWLA. Companies not related by common ownership or control. They can be financial and Nonaffiliates nonfinancial companies. Empower does not share with nonafiliates so they can market to you. A formal agreement between nonaffiliated financial companies that together market Joint marketing financial products or services to you. Empower doesn t jointly market. WHO IS PROVIDING THIS NOTICE? Empower Retirement, LLC; Great -West Life & Annuity Insurance Company; The Great -West Life Assurance Company (U.S. operations); Great -West Life & Annuity Insurance Company of New York; Great -West Financial Retirement Plan Services, LLC; Advised Assets Group, LLC; GWFS Equities, Inc.; The Canada Life Assurance Company (U.S. operations); Great -West Life & Annuity Insurance Company of South Carolina; Great -West Capital Management, LLC; Great -West Funds, Inc.; Great -West Trust Company, LLC; Prudential Retirement Insurance and Annuity Company; Prudential Bank & Trust, FSB; Global Portfolio Strategies, Inc.; TBG Insurance Services Corporation; MC Insurance Agency Services, LLC; Mullin TBG Insurance Agency Services, LLC; and COMOSA REIT Corp. GEN-FLY-WF-1831220-0622 Investment Advisory and Management Service Agreement Ef. 3/29/2024 21 EXHIBIT 2: BUSINESS CONTINUITY PLAN NOTICE B'U SINESS CoNTmurry PLAN NOTICE Empower Financial, Sentiices, Inc. ("Empower'), a subsidiary of Empower Annuity Insurance Company of America and affiliate of Empower Life & Annuity Insurance Company of New 'Fork* and Empower Retirement, LLC„ maintains a comprehensive business continuity plan designed to resp©nrd reasonably and! effectively to. events that (lead to significant business disruption, such as natura'0 disasters, power outages,. or other events of varying scope. This plan defines critical functions and systems, alternate work locationrs, vital books and records, and staff resources, and provides for the oonliinu:ation of business operations with: minimal iimpact, depending on the severity and scope of the disruption_ The plan is reviewed and tested no less than once annually to ensure that the information in the plan is 'kept current and that documented reouvery and continuity strategies adequately support its business operations.. Of utrnost importance to the plan is the ability for customers to maintain access to securities accounts and assets in those accounts. In the event that one of the contact centers or back office operation, facilities bemme . unavailable for any reason, calls would be re -muted to on.e of the finn's alternative contact center or operations ffaidft>es.. In the event of a significant business disruption to the primary office andtor data center, mess to customer acccunts will be providled 1Aa the Company's Web, site and voice response system, operatedl from an: alternative data center.. Customer service wEll continue to be provided by re-routing telephone calls to a contact center located in one or more alternative sites located outside of the region. Secure work frorn home solutbons are available fair al➢ staff. While no contingency plan can eliminate the risk of business interruption„ or prevent temporary delays with mount access, the firms continuity plan is intended to mitigate all reasonable risk and resume critical business operations within: 24 hours or the next business day, whichever is later. Record keeping and admirdstrative services are provided by Empower Retirement, LLC, and; in New York, Empower Life & Annuity Insurance Company of New York, or one of its subsidiaries or affiliates, Securities offered in your account may be offered through another brokerldea'ler f rn other than Empower Financial Services, Inc_„ a wholly, owned subsidiary of Empower Annuity Insurance Company ofAmerica. Please contact ymur Investment provider for more information if needed_ This disclosure is subject to modification at any time. The most current version of this disclosure can be found on the tire Company's website or can be obtained by requesting a written copy by mail BCP — Empower Customer Notice (Ed_ August 2022) Investment Advisory and Management Service Agreement Ef. 3/29/2024 22 Item 1— Cover Page EXHIBIT 3: EAG ADV BROCHURE EMPOWER ADVISORY GROUP, LLC (EAG) Disclosure Brochure for: Online Advice & Managed Account Service 8515 East Orchard Road Greenwood Village, CO 80111 Telephone:855-756-4738 March 31, 2023 This Brochure provides information about the qualifications and business practices of Empower Advisory Group, LLC (EAG). Specifically, this Brochure provides information on the advisory services provided by EAG and sub - advised by Morningstar Investment Management, LLC (Morningstar Investment Management). If you have any questions about the contents of this Brochure, please contact us at 855-756-4738. The information in this Brochure has not been approved or verified by the Securities and Exchange Commission (SEC) or by any state securities authority. EAG is a registered investment adviser under the Investment Advisers Act of 1940 (Advisers Act). Registration of EAG does not imply any level of skill or training. Additional information about EAG is available on the SEC website at www.adviser!nfo.sec.gov or on EAG's website at www.emoower.com/eaz Investment Advisory and Management Service Agreement Ef. 3/29/2024 23 Item 2 — Material Changes This section of the Brochure highlights and discusses any changes that were made since the Adviser's last update on August 1, 2022. This Brochure was updated to address any out-of-date information. Additionally, we made other changes throughout the document to provide information clearly and concisely. There were no material changes to this Brochure from its last update. Additional information about EAG is also available via the SEC's web site www.adviserinfo.sec.gov. The SEC's web site also provides information about any person affiliated with EAG who is registered, or are required to be registered, as an investment adviser representative with EAG. Investment Advisory and Management Service Agreement Ef. 3/29/2024 24 Item 3—Table of Contents Item1— Cover Page......................................................................................................................................... 1 Item2 — Material Changes................................................................................................................................ 2 Item3 —Table of Contents................................................................................................................................ 3 Item4 —Advisory Business............................................................................................................................... 4 Item5 — Fees and Compensation...................................................................................................................... 8 Item 6 — Performance -Based Fees and Side —by Side Management....................................................................10 Item7 —Types of Clients.................................................................................................................................10 Item 8 — Methods of Analysis and Investment Strategies and Risk of Loss..........................................................10 Item 9 — Disciplinary Information.................................................................................................................... 13 Item 10 — Other Financial Industry Activities and Affiliations............................................................................13 Item 11—Code of Ethics, Participation or Interest in Client Transactions and Personal Trading ............................16 Item12 — Brokerage Practices.........................................................................................................................17 Item13 — Review of Accounts.........................................................................................................................18 Item 14 — Client Referrals and Other Compensation.........................................................................................19 Item15 — Custody..........................................................................................................................................19 Item 16 — Investment Discretion.....................................................................................................................19 Item 17 — Voting Client Securities....................................................................................................................19 3 Investment Advisory and Management Service Agreement Ef. 3/29/2024 25 Item 4—Advisory Business: Description of Advisory Firm EAG is a registered investment adviser under the Advisers Act since 2000. It submits notice filings with state securities divisions in all 50 states, the District of Columbia, Guam, US Virgin Islands, and Puerto Rico. EAG offers investment management and advisory services primarily to plan sponsors of employer -sponsored retirement plans such as 401(a), 401(k), 403(b) and 457 plans, including government entities and their participants, and toall account holders of the Empower Premier IRA, Empower Premier Investment account and Empower Managed Portfolio accounts. FAG may also be engaged by individuals to provide investment advisory services within or alongside Personal Strategies+ Advisory Services or Core Managed Account Advisory Services. EAG does not choose the investments offered in employer -sponsored retirement plans. EAG serviced plans receive recordkeeping services through Empower Retirement, LLC (Empower), the recordkeeping entity affiliated with EAG. More Information about EAG's services, including an applicable brochure, can be obtained by contacting EAG at the number provided on the cover page of this Brochure or by visiting EAG's website at www.empower.com/eae. EAG's principal place of business is Greenwood Village, CO. EAG is a wholly owned subsidiary of Empower Annuity Insurance Company of America (EAICA), an insurance company domiciled In the State of Colorado. EAICA is a direct, wholly owned subsidiary of Empower Holdings, Inc. (EHI), a Delaware holding company. EHI is a direct wholly owned subsidiary of Great -West Lifeco U.S. LLC. (Lifeco U.S.) and an indirect wholly owned subsidiary of Great -West Lifeco Inc. (Lifeco), a Canadian holdingcompany. Lifeco is a subsidiary of Power Financial Corporation (Power Financial), a Canadian holding company with substantial interests in the financial services industry. Power Corporation of Canada (Power Corporation), a Canadian holding and management company, has voting control of Power Financial. The Desmarais Family Residuary Trust hasvoting control of Power Corporation, through a group of private holding companies that it controls. Types of Services Discussed in this Brochure: EAG provides a range of direct account holder -level and participant -level Investment services as well as services provided indirectly through private -label arrangements with institutional partners (the Services). The Services include Online Advice (OA) and the Managed Account service (MA Service) or My Total Retirement (MTR). Other services that may be available to clients include Spend -Down Advice, Financial Planning Service and Retirement Income Projection Tools and Services. EAG provides its Services through a proprietary, computer -based software program that is developed and maintained by Morningstar Investment Management. In addition, EAG provides sub -advisory and technology services to outside adviser firms through a service called Advisor Managed Accounts (AMA). This service enables the AMA firms to offer their own investment advisory and management services within retirement plans serviced by Empower. The total sub -advised assets as of December 31, 2022, for this service totaled $2,647,179,764.37. There is no guarantee provided by any party that participation in any of the advisory services will result in a profit. Morningstar Investment Management LLC: Morningstar Investment Management is a registered investment adviser wholly owned by Morningstar, Inc. and is not affiliated with EAG or any company that is affiliated with EAG. Morningstar Investment Management is located in Chicago, Illinois. A copy of its Form ADV Part 2A brochure may be obtained at www.adviserinfo.sec.gov. Morningstar Investment Management serves as an independent financial expert (IFE) in accordance with the Department of Labor SunAmerica Advisory Opinion 2001-09A, dated December 14, 2001(the SunAmerica Opinion). Morningstar Investment Management uses its proprietary methodology to evaluate the available investment options in a retirement plan and to develop an individualized investment strategy for plan participants and account holders. The plan, plan sponsor or plan fiduciary must select and continuously maintain investment options that Investment Advisory and Management Service Agreement Ef. 3/29/2024 26 cover broad asset categories. The investment options selected for the plan generally consist of a broad range of asset classes. More information is provided under Item 10— Other Financial Industry Affiliations. Item 8, Methods of Analysis and Investment Strategies and Risk of Loss discusses the general risks of Investing. The risks associated with the investment options can vary significantly with each particular investment category and the relative risks of categories may change. Accordingly, EAG may make changes from time to time regarding the availability of certain investment options. The fees, risks, responsibilities of plan sponsor/plan provider/participant and limitations for each of these services are discussed in greater detail below. Fees and expenses are also explained in the respective prospectus, which accompanies each investment option, as applicable. Certain EAG's Services rely on Morningstar Investment Management's proprietary methodology, which is based on a review of available quantitative data to analyze and screen the investment options within a plan. Morningstar Investment Management also applies qualitative analysis by investment professionals, such as evaluations of Investment managers, portfolios, and individual investments. The primary sources of information used by Morningstar Investment Management are the extensive databases and methodologies of Morningstar Investment Management and/or its affiliates, and interviews with investment managers. Other sources include financial publications, annual reports, prospectuses, press releases, and SEC filings. Morningstar Investment Management combines this information with other factors —Intl ud ing actuarial data, stockmarket exposure, probability analysis, and mean -variance optimization — into its proprietary software program to analyze a complex set of market data and variables. The result is an advanced model capable of providing investment recommendations and projections of different outcomes. Using this model, Morningstar Investment Management develops an investment strategy tailored to your investment goals. 1. Online Advice OA is based on the software program developed by Morningstar Investment Management. It provides the participant with retirement goal forecasting advice and fund -specific asset allocation recommendations tailored to the specific participant's financial situation and retirement goals. OA is tailored for individuals who wish to manage their own retirement account with the assistance of the service tools and investment advice. OA provides participants with a retirement goal forecast through various assumptions and hypothetical financial and economic scenarios. These scenarios are based on factors such as historic returns, market volatility, cross - correlations, calculated risk premiums, interest rate fluctuations, inflation, and market conditions; all of which have limitations. The participants can interact with OA to see how changes in their decisions about their savings, expected retirement age, level of investment risk and retirement income goal may affect the system's forecast. Participants who enroll in OA are responsible for determining the portfolio allocation that is best suited for their needs and Investment strategy. The investment recommendations provided by OA are limited to the available investment options within the participant's specific retirement plan. OA does not make any recommendations about investing in any individual stocks or other asset classes, including employer stock that may be an investment option under the participant's retirement plan. Participant Responsibilities: Participants are responsible for making their investment decisions and may implement OA recommendations either online or by phone. Participants are also solely responsible for reviewing and updating the information they input in the OA service with respect to the completeness, accuracy, and timeliness of the information. Participants should review their retirement accounts periodically to monitor changes in the market and the value of their Investments. A failure by an individual to review and update their account information through OA may materially affect the content and value of the service. Investment Advisory and Management Service Agreement Ef. 3/29/2024 27 Limitations on the Online Advice Service: The recommendations provided through OA are estimates based on the responses and information provided by the participants. Neither EAG nor Morningstar Investment Management make any guarantees or warranties, express or implied, as to the accuracy, timeliness, or completeness of such Information. The OA service is also subject to the general market and financial conditions existingat the time of use. The retirement goal forecast and investment recommendations provided by OA is not a guarantee of future results, nor is it a guarantee that a participant will achieve their retirement goals. OAshould only be used by participants as a tool in their retirement planning and not as a substitute for their own informed judgment. Neither EAG nor Morningstar Investment Management has an obligation to update any information for a specific individual or to proactively contact the individual to obtain updated information. A failure by an individual to review and update account information through OA may materially affect the content and value of services received from EAG. Managed Account Service (also known as My Total Retirement) EAG offers a discretionary managed account service (Managed Account, MA service or MTR). This is a professional and flexible asset management program based on data resulting from the methodologies and proprietary software program developed and employed by Morningstar Investment Management. In the MA service, EAG has discretionary authority over the allocation of available investment options, without prior participant approval of each transaction. All ongoing investment transfers and investment direction changes are implemented for individuals enrolled in the MAservice. The MA service designs a specific asset allocation portfolio for the participant that reflects the individual's retirement goals, life stages, specified risk constraintand overall financial situation. The MA service considers plan assets and other assets and investments not included within the plan If provided by the participant. On a periodic basis, individual accounts in the MA service are re -forecasted, which may include rebalancing and reallocating the individual's asset allocation portfolio. This is done to maintain alignment with the allocation percentages determined by Morningstar Investment Management through various assumptions and hypothetical financial and economic scenarios. Participants receive an account update and forecast statement annually and can update their personal information at any time by calling EAG at their plan's toll -free customer service number, or byvisiting the appropriate website. Some plan providers may offer a guaranteed lifetime benefit withdrawal option to plan participants who are approaching retirement or are in retirement. If the plan provider offers this service and if the participant meets the retirement criteria established by the plan provider or plan sponsor, the investment strategy may include a suggested amount that can be withdrawn while maintaining income throughout retirement. It may also include information about allocating a portion of the managed account balance for the purchase of an annuity or other guaranteed income product. Limitations on the Managed Accounts Service: When participants enroll in the MA service, they must transfer and allocate their entire retirement account balance to the Managed Account. For participants, there is an exception of employer stock and employer directed monies. Partial management of participants' accountwhere theyare invested in other investment options (such as individual stocks or other asset classes outside of the available investment options) while also participating in the MA service Is not an available alternative. Participant balances In any of these investment options must be liquidated, subject to plan and/or Investment provider restrictions, or the participant cannot be enrolled in the MA service. For participants, certain outside non -advisable assets may be permitted while also participating in the MA service. However, the participant's entire advisable account balance must be allocated to the MA service. Once enrolled in the MA service, participants delegate certain account management functions to EAG including functionality for fund -to -fund transfers, change fund allocations, the dollar cost averaging tool and/or the rebalancer tool. However, individuals in the MA service retain full inquiry access to their accounts and may still Investment Advisory and Management Service Agreement Ef. 3/29/2024 28 request approval for loans or take a distribution withdrawal, if permissible. Participants may un-enroll at any time from the MA service. Once they do so, the participants resume full responsibility for the investment management of their accounts. An individual may un-enroll online or by contacting an EAG investment adviser representative. Spend -Down Advice Participants who are enrolled in any of EAG's Services discussed above are also provided with an additional feature of Spend -Down Advice which includes retirement planning tools. The Spend -Down Advice illustrates how long the desired income may last in retirement and determines how much spendable income the participant may be able to sustain throughout their retirement. The Spend -Down Advice provides both the amount and sources of income available throughout their retirement. The services provided under Spend -Down Advice provide projections of spendable income and do not constitute investment advice under the Investment Advisers Act of 1940. Retirement Income Projection Took and Services EAG may offer online tools and services for participants to convert projected or actual retirement savings into estimated monthly retirement income. This interactive retirement planning service consists of various retirement income projection tools. These tools are informational in nature, do not reflect actual investment results, and are not guarantees of future results. These tools do not constitute investment advice under the Investment Advisers Act of 1940. Enrollment in EAG's Services: Plan providers and plan sponsors select the Service(s) (i.e., OA and/or the MA service) that are made available to plan participants and how participants can authorize the Service(s). Participants must agree to the terms of a user agreement (Terms of Service). Terms may be amended by EAG from time to time, to allow continued use of any of the Services. As part of a participant's enrollment in the MA service, the participant receives a MA Welcome Kit shortly after enrollment. The participant additionally receives an Annual Kit. Each kit provides the participant an update on their account and information on reaching their retirement goals. In certain instances, Plan Sponsors may authorize EAG to enroll participants automatically in the MA service based on information provided to EAG by the Plan Sponsors. In such instances, current participants in the Plan receive the Terms of Service and are given a defined period of time in which to cancel or opt -out of the MA service without incurring an advisory fee (the Free Period or Promotional Period). Participants' automatic enrollment in the Service by the Plan Sponsors is based upon personal financial information provided by the Plan Sponsor, including date of birth, salary, gender, and state of residence. Participants may review this information online or by contacting an EAG investment adviser representative. Participants are solely responsible for reviewing the personal financial information they or their Plan Sponsor provide, and for notifying EAG of any changes or updates. Participants who are eligible for their employer -sponsored retirement plan or that otherwise elect to opt -in after the Free Look or Promotional Period concludes, may not be eligible for a waiver of advisory fees that is otherwise available in the Free Look or Promotional Period. The advice and recommendations provided through the Services are based on the responses or other information provided by or about the participant by the Plan Sponsor and/or the participant. Neither EAG nor Morningstar Investment Management make any guarantees or warranties, express or implied, as to the accuracy, timeliness, or completeness of such information. The Services are also subject to the general market and financial conditions existing at the time of usage. The retirement goal forecast and investment advice recommendations are not a guarantee of future results and are not a guarantee that a particular person will achieve their retirement goals. Termination of Services: Participants may cancel their participation in OA or the MA service at any time. Participants utilizing OA must complete their cancellation online. Participants utilizing the MA service may cancel online or by calling an EAG investment adviser representative at the toll -free customer service number. Investment Advisory and Management Service Agreement Ef. 3/29/2024 29 After cancellation of the: 1. OA service, the individual will no longer have access to the online investment recommendations. Because EAG does not effect changes to the participant's/account holder's asset allocation and account balances, the individual's balances will not be affected unless and until the Individual affirmatively changes their asset allocation and balance after the cancellation of OA. 2. MA service, the participant will have the ability to make allocation and investment option changes to their account, usually one to two business days following cancellation. Accordingly, the participant's asset allocation will remain the same as established in the MA service unless and until the participant affirmatively changes his/her asset allocation after cancellation of the MA service. Participant Information: The use and storage of any information is provided at the individual's sole risk and responsibility. Such information includes, without limitation, an individual's personal and non-public information, account number, password, Identification, portfolio information, account balances and any other information available on an individual's personal computer. The individual is responsible for providing and maintaining the communications equipment (including personal computers and modems) and telephone or other services required for accessing and using electronic or automated services, and for all communications service fees and charges incurred by the individual in accessing these services. EAG shall not bear any responsibility for either errors or failures caused by the malfunction of any computer, communication systems, any computer viruses, and related problems that may be associated with the use of the Services. Assets Under Management: With respect to the services provided by EAG, as of December 31, 2022: Discretionary investment management among all services: 1 $70,413,154,579 Non -discretionary investment advisory services among all services $15,683,122,665 in the amount of: Total discretionary and noniJiscretionary investment management $86,096,277,244 and advisory services in the amount of: Item 5 — Fees and Compensation: For employer -sponsored retirement plans, fees are subject to negotiation by the plan sponsor which may include plan -level pricing credits depending on the various option(s) selected by the plan for its participants. In some instances, if agreed to by the plan, the plan sponsors or recordkeeper may pay EAG's fees on behalf of plan participants. EAG reserves the right to offer discounted fees or other promotional pricing or to waive fees for any particular period of time subject to proper notification and disclosure. 1. Online Advice Service Fees EAG does not charge a separate fee for OA. 2. Managed Account Service Fees Participants may be charged a fee for the MA service based on the Terms of Service with the participant and/or the plan sponsor's agreement with EAG. EAG may offer plans tiered pricing schedules based on the enrollment method the plan uses for offering or enrolling its participants in the MA service. Such options 8 Investment Advisory and Management Service Agreement Ef. 3/29/2024 30 include, but are not limited to, pricing schedules based on the plan sponsor's selection of an optoutversus opt -in enrollment methodology. Applicable pricing schedules for each of the options are made available to the plan sponsors, which they may use to select the option for their employer -sponsored retirement plan. Pursuant to the Terms of Service and/or the plan sponsor's agreementwith EAG, the fee for the MA service is based upon a percentage of assets managed. The applicable fee for the Managed Account service varies. It is fully disclosed to participants prior to or at the time of enrollment within the enrollment disclosure materials. In addition, the fee is disclosed to participants in the Terms of Service when the participant enrolls in the MA service. The maximum annualized fee that may be charged to a participant is 0.65%of the participant's account balance. The advisory fee is debited from the participant's account following each applicable billing period. If a participant cancels enrollment in the MA service at any time within a given billing period, pursuant to the participant's Terms of Service and/or the plan sponsor's agreement with EAG, the participant's fee is based upon a percentage of assets managed during the billing period. The fee will be debited from the participant's account or paid by the plan sponsor according to EAG's agreement and procedures. If the plan sponsor terminates its service agreement with the plan's record keeping service provider, the participant's advisory fee is debited as of such date of termination or paid by the plan sponsor according to EAG's agreement and procedures. 3. Retirement Income Projection Tools and Services EAG does not charge a separate fee to plan sponsors or participants for the retirement income projection tools and services. 4. Other Fees and Expenses In addition to any previously negotiated and disclosed recordkeeper fees, commission payments and other administrative servicing fees and expenses for each plan, EAG may pay cash compensation or referral fees to unaffiliated firms for soliciting and referring plan sponsors and their participants to enroll in EAG's MA service. Accounts invested in mutual funds, separate accounts, collective investment alternatives and other investments may be subjectto other investment fees. Fees such as fund operating expenses or redemption fees may be imposed at the investment company level. Information about the fees imposed by specific investment choices is available in the fund prospectuses or offering memoranda for the securities. EAG may allocate member assets to funds or investment alternatives with these fees or costs. All securities transactions that occur as a result of the services provided by EAG as described In this Brochure are executed by Empower Financial Services, Inc., (EFSI) for which it may receive compensation in the form of 12b-1 fees or other compensation from mutual fund companies or from the other investments that may be available as program investment options. A participant will pay advisory fees to EAG for the MA service and indirectly to ECM if Empower Funds are included in the retirement plan investment options. The fees paid to ECM for management of the Empower Funds are included in the fund share price. EAG and EFSI representatives may recommend that you use the Services. If you elect to use MA, EAG will earn additional compensation in the form of advisory fees. Also, EAG and EFSI representatives are eligible for incentive compensation, through bonus payments, in addition to their salary, for communication, education and/or assisting plan participants to enroll in the Services. The incentive compensation an EAG or EFSI representative receives depends on position type, but generally is calculated based on Empower's profitability and the achievement of individual performance goals that may Include factors unrelated to the adoption of investment products or services offered through Empower, such as the Services. Investment Advisory and Management Service Agreement Ef. 3/29/2024 31 Item 6—Performance-Based Fees and Side —by Side Manaaemerrt EAG does not charge any performance —based or side -by side management fees. Item 7 —Types of Clients EAG provides investment advice to participants in their retirement plans for which Empower provides recordkeeping services. Members typically must be considered residents of the United States, the U.S. Virgin Islands, Guam, or Puerto Rico. The plan sponsor may apply additional restrictions for participation due to plan or regulatory requirements. EAG may also be engaged by individuals to provide investment advisory services within or alongside an Empower Premier IRA, an Empower Managed Portfolio account, an Empower Premier Investment Account, Personal Strategies+Advisory Services or Core Managed Account Advisory Services. Item 8— Methods of Analysis and Investment Strategies and Risk of Loss The Services described in this Brochure are based- on the proprietary asset allocation and retirement income projection methodologies developed by Morningstar Investment Management. The development of investment advice by Morningstar Investment Management involves the investment methodologies across the products and services described herein. Morningstar Investment Management or its affiliates focus on specific investment areas such as capital market assumptions and a valuation -driven approach to asset allocation. Analysis Methods: In providing advisory services, Morningstar Investment Management reviews available quantitative data to analyze and screen the investment options within a plan. The portfolios are typically constrained to a set of investment options defined by the plan sponsor, which may include EAG affiliated investment products. The analysis will include quantitative analytics and fundamental research on the investment options available. Morningstar Investment Management draws on Morningstar's comprehensive database of fund and security analytics. Morningstar Investment Management uses a combination of portfolios and customizations as part of a larger portfolio construction process. For MA and OA, they generate unique portfolios (ranging from conservative to aggressive) for each retirement plan or product using a customized approach to blending traditional asset allocation models with liability -driven investing and decumulation strategies. Which asset classes and sub -asset classes are used to build these model portfolios is dependent on the specific investment options available within the plan. Using this model, they develop an investment strategy tailored to your investment goals and assign you to one of those portfolios. They start with all of the available information received from the service provider and/or you and then make assumptions about certain pieces of information. You have the ability to review and refine some of these assumed data points through the website or over the phone. These assumptions can have a significant impact on the strategies created for you and are related to social security income, salary growth, inflation rates, retirement income goal, and risk capacity. They combine this information with other factors into a proprietary software program that can provide investment recommendations and a projection of different outcomes. They use a concept called total wealth to determine your risk capacity. This helps determine an appropriate target risk level for your retirement account by considering your risk exposure in all your other accounts that you've told us about that are earmarked for retirement. The total wealth methodology accounts for your financial capital (total saved assets and tradeable assets such as stocks and bonds) as well as your human capital (future earnings and savings potential). Using this methodology, they assign a target risk level based on your total economic worth. The target risk level changes over time to help ensure you are still investing in a portfolio for your specific situation and risk capacity. In general, we try to provide a smooth transition from an aggressive equity portfolio to a more conservative fixed portfolio as you near retirement. Investment Advisory and Management Service Agreement Ef. 3/29/2024 32 Investment Strategy: If accumulating for retirement, the investment strategy is generally based on information such as retirement account balances, expected retirement age, savings rate and other preferences provided by the individual. If you have already retired, and if the plan provider offers a guaranteed lifetime withdrawal benefit program, the Investment strategy is based upon account balances, additional cash flows, and life expectancy. This retirement strategy may include some or all of the following: • Retirement Income Goal (accumulation phase): The retirement income goal is the projected amount of money after tax that will be needed by the individual throughout retirement. This calculation can be based on current income, adjusted to reflect the estimated dollar value at retirement age. Typically, they use an amount equal to 100%of your take-home pay (although some plan providers may requesta different rate, e.g., 80%of gross pay), and then the Services project the after-tax value of that amount at retirement age to determine a retirement income goal. The individual has an option to change this projected retirement income amount. • Income Outlook (accumulation phase): The income outlook is a projection of the annual income that the individual may receive during retirement. This is based on an annualized view of the accumulated investment wealth, combined with social security benefits and any pension or other income provided to EAG. • Total Retirement Income (in -retirement phase): If your plan provider or plan sponsor offers the in - retirement services, total retirement income is the projected amount of money, that one can expect to receive on an annual basis in order to maintain income throughout retirement. • IMPORTANT: When Morningstar Investment Management determines the income projections described above, these projections are based on hypothetical performance data and do not represent actual or guaranteed results. Your projections may vary over time with each additional use of the service. Estimated Tax: Morningstar Investment Management estimates federal, state income, and capital gains taxes based on marginal tax rate calculations. These calculations are used when Morningstar Investment Management conducts income simulations. Tax data is updated annually based on the United States Internal Revenue Code (IRC) and similar state tax data. Morningstar Investment Management uses income data for the individual and their spouse/partner to estimate federal and state tax exposure. The tax exposure is appropriately reduced for pre-tax deferrals, tax - deferred capital gains, and yield and distribution of Roth proceeds. Based on the information that the individual provides, Morningstar Investment Management provides an estimate of the tax exposure but may not include all tax considerations. Please consult a tax adviser for a complete understanding ofyour tax situation. General Risks of Investing: Investing in securities involves risk of loss that clients should be prepared to bear. Neither EAG nor Morningstar Investment Management or their affiliates guarantees that the recommendations will result in achieving the retirement income goal. Neither EAG nor Morningstar Investment Management or their affiliates can guarantee that negative returns can or will be avoided in any of the recommendations. An investment's future performance may differ substantially from its historical performance and as a result, may incur a loss. Past performance is no guarantee of future results. Additionally, the plan provider may make changes from time to time with respect to the investment options available in the plan. 11 Investment Advisory and Management Service Agreement Ef. 3/29/2024 33 While a diversified investment portfolio, including a portfolio of investment products representing different asset categories, can mitigate some risks, it does not and cannot prevent all loss. Ultimately, such risks are borne by the investor. Below are some of the common factors that can produce a loss in a client's account and/or in a specific investment product or asset category: • Market Risk: Stock and bond markets are volatile and can decline significantly in response to adverse issuer, political, regulatory, market, or economic developments in the U.S. and in other countries. Market risk may affect a single company, a sector of the economy, a country or geopolitical region, or the market as a whole. Market risk may impact stock and or bond markets in unanticipated and different ways. • Business Risk: These risks are associated with a particular industry or a particular company within an industry. • Capitalization Risk: Small -cap and mid -cap companies may be hindered due to limited resources or less diverse products or services. Their stocks have historically been more volatile than the stocks of larger, more established companies. • Category or Style Risk: During various periods of time, one category or style may underperform or outperform other categories and styles. • Credit Risk: The risk that the issuer of a security may be unable to make interest payments and/or repay principal when due. A downgrade to an issuer's credit rating or a perceived change in an issuer's financial strength may affect a security's value and impact the performance of the issue — along with any mutual fund or exchange -traded fund which holds it. • Interest Rate Risk: The marketvalue of a debt security is affected significantly by changes In interest rates. When interest rates rise the security's market value declines. When interest rates decline, market values rise. The longer bond maturity results in the greater the risk and the higher yield. Conversely, the shorter bond maturity results in the lower risk and the lower yield. • Inflation Risk: When any type of inflation is present, purchasing power may be eroding at the rate of inflation. • Reinvestment Risk: The risk that future proceeds from Investments may have to be reinvested at a potentially lower rate of return (i.e., interest rate). This relates primarily to fixed income securities. • Exchange -traded funds: Exchange -traded funds present market and liquidity risks because they are listed on a public securities exchange and are purchased and sold via the exchange at the listed price. The price will vary based on current market conditions and may deviate from the net asset value of the exchange - traded fund's underlying portfolio. There may also be an inactive market for certain funds, and/or losses from trading In secondary markets. • Target Date Funds: Generally, the asset allocation of each target date fund will change on an annual basis with the asset allocation becoming more conservative as the fund nears the target retirement date. The target date is the approximate date when investors plan to start withdrawing their money. The principal value of the fund(s) in a plan's lineup is not guaranteed at any time, including at the time of target date and/or withdrawal. • An Investment in a money market fund is not insured or guaranteed by the FDIC orany other government agency. Although some money market funds such as U.S. Government money market funds strive to preserve the value of the investment at $1.00 per share, it is possible to lose money by investing in a money market fund. Additionally, other money market funds may operate under new rules and regulations permitting them to have a floating value per share. A floating value may be more or less than $1.00 per share depending on market conditions and impose liquidity/redemption fees for large or frequent withdrawals. 12 Investment Advisory and Management Service Agreement Ef, 3/29/2024 34 For more complete information about any of the mutual funds or investment product available within the retirement plan, please contact your retirement plan service provider. Risks Associated with Particular Types of Securities: Neither EAG nor its sub -advisers recommend a particular type of security. The plan sponsor or its agent is responsible for determining the retirement plan's menu of investment options. It Is the participant's responsibility for reading all disclosure and related materials, including prospectuses, statements of additional Information and other similar material. Rem 9 — Disciplinary Information Registered investment advisers are required to disclose all material facts regarding any legal or disciplinary events that would be material to your evaluation of EAG or the integrity of EAG's management. EAG has no legal or disciplinary event to report relative to this Item. Item 10— Other Financial Industry Activities and Affiliations EAG is not a registered broker -dealer. However, due to the organizational structure of EAG's parent company, EAICA, certain registered representatives of EFSI are also supervised persons of EAG and are required to comply with EAG policies and procedures when acting in that capacity. EAG and its management persons are not registered as a futures commission merchant, commodity pool operator, a commodity trading advisor, or an associated person of the foregoing entities. Other Financial Industry Affiliations: EAG has arrangements that are material to its advisory business or its clients/participants with the related entities shown below. These related entities may receive certain fees that are unrelated to EAG's fees for its Services. Recordkeeping and Administrative Services Company: Empower Retirement LLC (Empower) is a comprehensive administrative and recordkeeping services provider for financial institutions and employers, which include educational, advisory, enrollment, and communication services for employer -sponsored defined contribution plans and associated defined benefit plans under Internal Revenue Code Section 401(a), 401(k), 403(b), 408, and 457. Insurance Companies: Empower Annuity Insurance Company of America (EAIC4) is an insurance company domiciled In the State of Colorado. EAG is a wholly owned direct subsidiary of EAICA. EAICA, pursuant to various agreements, may provide investment products, recordkeeping, and other administrative services through its affiliates. Empower Life & Annuity Insurance Company of New York (ELAINY) is an insurance company domiciled in the State of New York. EAG is an affiliate of ELAINY through common ownership where EAICA is the sole owner of both EAG and ELAINY. ELAINY, pursuant to various agreements, may provide investment products and administrative services through Its affiliate, Empower, to retirement plans for which EAG may also provide its services. EmpowerAnnuity Insurance Company (EAIC) is an insurance company domiciled in the State of Connecticut. EAG is an affiliate of EAIC through common ownership where EAICA is the sole owner of both EAG and EAIC. EAIC, pursuant to various agreements, may provide investment products and administrative services individually and through its affiliate, Empower, to retirement plans for which EAG may also provide its services. 13 Investment Advisory and Management Service Agreement Ef. 3/29/2024 35 Broker -Dealer: Empower Financial Services, Inc. (EFSI), an affiliate of EAG, is a registered limited broker -dealer and wholly owned subsidiary of EAICA. EFSI may provide wholesaling, direct sales, enrollment and/or communication services to retirement plans and their participants for which EAG may also provide its services. All transactions which occur as a result of participation in the Service are executed by EFSI. EFSI may receive compensation in the form of 12b-1 fees or other compensation from the mutual fund companies or from the other investments that may be available as investment options. Trust Company: Empower Trust Company, LLC (ETC) is a trust company and affiliate of EAG. ETC is a wholly owned subsidiary of EAICA. ETC is chartered under the laws of the State of Colorado. ETC may provide discretionary or directed trustee and/or custodial services for EAG's clients. ETC also serves as the trustee for certain collective investment trusts, which may be available as investment options, and is the custodian of all Empower Premier IRA accounts. Investment Company: Empower Funds, Inc. (EFI) is an investment company affiliated with EAG. It is registered under the Investment Company Act of 1940. Empower Funds may provide Investment products to retirement plans and IRAs for which EAG may also provide Its services. Empower Funds is managed by Empower Capital Management, LLC as discussed below. Shares of Empower Funds may be available for purchase by retirement plans advised by EAG or to account holders ofthe Empower Premier IRA. Investment Advisers: Empower Capital Management, LLC (ECM), an affiliate of EAG, is an investment adviser for Empower Funds and is registered under the Investment Advisers Act of 1940. It is a wholly owned subsidiary of EAICA. EAG provides managed account and advice services to participants in certain defined contribution plans. It also provides services to account holders of the Empower Premier IRA which may have as investment options certain portfolios of Empower Funds managed by ECM. Putnam Investment Management LLCis a registered investment adviser (PIM). EAG is under common control with PIM and is an affiliate of PIM. Shares of Putnam retail mutual funds may be available for purchase by retirement plans or by the Empower Premier IRA holders. PIM serves as a sub -adviser to certain funds in the Empower Core Strategies lineup. Irish Life Investment Managers Limited — a Dublin, Ireland based, SEC registered investment adviser. ILIM is part of the Great -West Lifeco, Inc. (GWL) group of companies; GWL has operations In Canada, the United States, Europe, and Asia through ownership of companies including EAICA and PIM. EAG Is wholly owned subsidiary of EAICA. EAICA is an indirect wholly owned subsidiary of GWL which controls ILIM. ILIM manages the Index series of Empower Funds. Branding: The affiliated companies of EAG, ECM, EFSI, EAICA, EAIC, ELAINY, Empower Funds, Empower Holdings, LLC, Empower Retirement, LLC, and ETC operate under the multiple brands of Empower, Empower Retirement and Empower Institutional depending upon the products, services and retirement markets involved. These brands do not materially affect the internal structure of EAG or EAG's corporate ownership. Conflicts of Interest: The investment options available in a plan are generally established by the plan sponsor/client through which our services are delivered. In some cases, the plan investment options may include, or be comprised solely of, affiliated 14 Investment Advisory and Management Service Agreement Ef. 3/29/2024 36 investment options of the institutional client or of EAG. EAG does not receive compensation from its parent company or any of its affiliates as a result of these allocations. EAG has a relationship with Morningstar Investment Management wherein Morningstar Investment Management acts as sub -adviser for the advisory services. EAG has entered into an agreement with Morningstar Investment Management under which, EAG receives advisory services fees for providing services to retirement plan clients. EAG mitigates these conflicts of interest related to affiliated investment options by utilizing Morningstar Investment Management as sub -adviser who remains independent from EAG and its related persons with respect to their methods of analysis and Investment strategies. Morningstar Investment Management's methodology also controls the investment allocations and recommendations. A client/account holder will pay advisory fees to EAG for MAS, and indirectly to ECM, if Empower Funds are included in the retirement plan investment options. The fees paid to ECM for management of the Empower Funds are included in the fund share price. Conflicts relating to fund recommendations: The Services operate by recommending or allocating a user's assets to funds available within a plan. The funds available for EAG's recommendations within a plan are generally established by the plan sponsor/client through which the Services are delivered, rather than by EAG. In some cases, the investment options may include or be comprised solely of investment options sponsored by EAG's affiliates. In other cases, the investment options may make third party payments described below. When this occurs, EAG's affiliates may receive additional compensation as a result of EAG's recommendations or allocations. These forms of additional affiliate compensation are: • Proprietary investment funds. EAG's affiliates offer proprietary investment funds, and EAG may recommend or allocate your assets to our affiliates' proprietary investment funds, including proprietary mutual funds and collective investment trusts. These proprietary investment funds generate additional investment management fees to EAG's family of companies. This is because EAG's affiliates provide Investment management services to the proprietary fund for services like administering, managing, and supervising these funds. For example, a plan participant using the Services will pay advisory fees to EAG and indirectly to ECM if Empower Funds are included in the retirement plan investment options, and EAG recommends an allocation to a Empower Funds product. The fees paid to ECM for management of the Empower Funds are included in the fund share price. • Proprietary insurance products. EAG's parent company, EAICA, offers proprietary insurance products for investment EAG may recommend or allocate your assets to different types of EAICA insurance products and funding agreements. The majority of EAICA insurance products are annuity contracts that are structured either as a general account product or as a separate account product. If you invest in a general account product, which is an insurance product backed by the general account of an insurance company, EAG's affiliates generate revenue by retaining spread (which is the difference between actual earnings on contracts offered by the insurer), and the crediting rate declared and guaranteed by the insurer through the contract. EAG's affiliates may also receive different types of fee income if you invest in the general account or separate account products, and other third -party payments associated with investments held in the separate account. • Third PartyPayments. EAG's affiliates may receive payments from other firms, non-proprietary investment funds or products, or providers, such as revenue sharing payments, in connection with the investments made pursuant to our recommendation or investment management. Conflicts related to increased use and promotion of the Services: • Increased advisoryfee income. EAG's representatives may recommend that you use the Services. If you enroll in certain Services, EAG will earn additional compensation. • Increased affiliatefeeincome. When you use the Services, EAG may recommend you increase contributions or utilize other savings or investment strategies. EAG's affiliates provide a bundle of recordkeeping, trust, custody, brokerage, investment, and other related services to retirement plans. Ifyou pay for these related services through an arrangement where our affiliates charge a direct fee, EAG's affiliates may receive 15 Investment Advisory and Management Service Agreement Ef. 3/29/2024 37 additional fees for these services. These additional fees result from EAG's recommendations because you may contribute, invest, or transact in more assets with EAG's family of companies. EAG's affiliates may receive payments from other firms, non-proprietary Investment funds or products, or providers, such as revenue sharing payments, in connection with the investments made pursuant to our recommendation or investment management. Representative Compensation. EAG has authorized EFSI, an affiliate of EAG, and Its licensed agents and registered representatives who are Empower employees (collectively referred to as Agents) to solicit, refer and market EAG's services. In addition to their salary, Agents may earn bonus compensation based upon engaging plan sponsors to offer EAG's services. Other Agents and EAG representatives may be indirectly compensated through bonus compensation, in addition to their salary, for communication, education and/or assisting participants to enroll in EAG's Services. Compensation paid to Agents or EAG representatives does not increase the fees paid by the plan, plan sponsor or participants. The incentive compensation an EAG representative receives depends on position type, but generally is calculated based on Empower and/or EAICA profitability and the achievement of individual performance goals that may include factors unrelated to an account holder's adoption of investment products or services offered through Empower. Agents and EAG representatives' individual performance goals and their related incentive compensation is based on a combination of factors includingthe number and quality of customer engagements during the measurement period and the amount of customer assets retained as result of the engagements. The rate of incentive compensation considers the total amount of retained or accumulated assets, compared with the monthly asset goal, as determined by EAG on a periodic basis. The asset goal is generally set on an annual basis and may differ by product or account type. Additional factors include certain qualitative factors, such as leadership, teamwork, client experience, quality and efficiency of client interactions, and adherence to corporate policies and regulatory standards. Other Business Activities: Certain senior managers and officers of EAG may also serve as executive officers of EAG's parent company, ERICA and other affiliates of EAG. item 11— Code of Ethics. Participation or Interest in Client Transactions and Personal Trading EAG's Code of Ethics EAG has adopted a written Code of Ethics (the Code) in compliance with Rule 204A-1 of the Investment Advisers Act of 1940 (Advisers Act). The Code sets forth standards of business conduct expected of advisory personnel. It requires certain of EAG's advisory personnel to report their personal securities holdings and transactions in accordance with the Advisers Act. EAG's advisory personnel are required to comply with the Code. A copy of the Code will be provided to current or prospective clients upon request. The Code includes provisions related to: • Fiduciary responsibility to clients; • Compliance with federal securities laws; • Protection and safeguarding of confidential information; • Giving and receiving gifts, gratuities, and entertainment; • Political contributions; • Reporting and monitoring personal securities transactions; • Avoiding and disclosing conflicts of interest; and • Reporting violations ofthe Code. Personal Trading: The Code requires pre -clearance of certain securities transactions. Officers, managers, and certain employees of EAG (collectively, Access Persons) may trade for their own personal accounts in securities which are recommended to and/or purchased for EAG's advisory clients. However, because the Code would permit Access Persons to invest 16 Investment Advisory and Management Service Agreement Ef. 3/29/2024 38 in the same securities as clients in some circumstances, there is a possibility that employees could benefit from market activity by a client in a security held by an Access Person. As a result, trading is continually monitored in accordance with the Code and federal securities laws. The Code Is intended to ensure that the personal securities transactions and the outside business activities of EAG's Access Persons do not interfere with making decisions in the best interest of advisory clients. Principal Trading: EAG has adopted a policy and practice not to engage in any principal transactions. EAG holds no investments for its own accounts which could be bought from, or sold to, an advisory client In the event of any change in EAG's policy, any such change must be approved by management. Any principal transactions would be permitted only after meeting the review and approval requirements described under the anti -fraud section of the Advisers Act. Participation or Interest in Client Transactions: Affiliate EFSI effects Securities Transactions forAdvisory Clients Registered representatives of EFSI may provide wholesaling, direct sales, enrollment, and/or communication services to retirement plans and their participants for which EAG may also provide Its services. In return, EFSI may receive fees from either the plan or the investment provider (fund families). All securities transactions which occur as a result of EAG's services, as described in this Brochure, are executed by EFSI. EFSI may receive compensation in the form of 12b-1 fees or other compensation from mutual fund companies or from the other investments that may be available as plan investment options. In all Instances, EAG's affiliation with these entities is disclosed. Allocations in the investment options are solely determined and based on Morningstar Investment Management's software and not determinations made by EAG. The compensation paid by EAG to Morningstar Investment Management for Morningstar Investment Management's proprietary software advice program does not vary based on the allocations made or recommended by Morningstar Investment Management. Because Morningstar Investment Management is unaffiliated with EAG and EFSI, EAG does not believe there is a conflict of Interest. Affiliate EAIG4 or ELAINY Proprietary Investments Investment options into which participant or accountholder assets may be allocated, pursuant to the CA or the MA services may be through a fixed and variable deferred annuity issued by EAICA or ELAINY. Because Morningstar Investment Management is unaffiliated with EAG, EAICA, ELAINY and their affiliates, EAG does not believe there is a conflict of interest However, in all instances, EAG's affiliation with EAICA and/or EAICA's affiliates, as applicable, will be disclosed. Affiliate Empower Retirement LLC Empower Retirement, LLC receives a 35 by shareholder service fee from the applicable shares of Empower Funds for recordkeeping and administrative services provided for account holders, pursuant to a Shareholder Services Agreement between the parties. Item 12 — Brokeraee Practices Brokerage Selection; Best Execution: For retirement plans, the plan sponsor or its agent selects the broker -dealer used by the retirement plan and determines the reasonableness of the compensation. EAG does not select or recommend broker -dealers for stock transactions or self -directed brokerage accounts and does not determine the reasonableness of broker -dealer's compensation. Transactions recommended by Morningstar Investment Management for the Service are processed by EAG's affiliated recordkeeper, Empower, and generally executed through EFSI. Investment Advisory and Management Service Agreement Ef. 3/29/2024 39 Soft Dollar practices: As a matter of policy, EAG does not utilize research or other products or services from third parties in connection with client securities transactions on a soft -dollar commission basis. Directed Brokerage: The plan sponsor may elect to offer brokerage services to participants in the retirement plan. EAG does not participate in such decisions and does not provide recommended portfolios or investment recommendations on assets held in a brokerage account under the retirement plan. Trade Aggregation: EAG does not bunch orders or engage in block trades to execute equity orders for clients. Client accounts are generally held in trust per regulatory requirements. Further, most trades are mutual funds where trade aggregation does provide any additional client benefits. Rem 13 — Review of Accounts At least annually, EAG personnel review the methodologies used by Morningstar Investment Management to power the CA and MA services to ensure that they are consistent with investment advisory best practices, current technology, applicable law, and the terms of the agreement between EAG and Morningstar Investment Management. Neither EAG nor Morningstar Investment Management review the personal financial information of participants as provided by the participants or the Plan Sponsor and do not assume responsibility for any incomplete or erroneous information. Such information, which includes date of birth, salary, gender and/or state of residence, must be reviewed periodically by the participant and/or the Plan Sponsor who in turn are responsible for notifying EAG of any changes, errors, or omissions to such information. EAG conducts the following review of its clients' accounts: Online Advice: EAG does not conduct review of its participants accounts in respect to investment oversight, monitoring, or rebalancing. Participants receive from EAG's investment recommendations based on the investment options provided in their specific retirement plan. It is the responsibility of OA clients to review and update their accounts to adjust for changes in the investments they own and to determine whether the recommendations are suitable for their particular investment needs. CA clients should also review and update their accounts if significant changes occur in their personal circumstances. Managed Account Service: Under the MA service, participant assets in the investment options are monitored, rebalanced, and reallocated on a periodic basis by EAG, based on Morningstar Investment Management's software program. On an annual basis, based on the individual's birth date, those enrolled in the MA service will receive an Annual Kit containing an account update and forecast statement. Morningstar Investment Management updates the capital market assumptions underlying their methodology used to construct the asset classes, at least annually, then makes changes to the portfolio allocations, as necessary. The portfolios are also monitored on a regular basis on current portfolio allocations and adjustments are made as necessary. Reporting to Clients: Participants enrolled in the MA service receive a MA Welcome Kit shortly after enrollment and an account update at least annually. Participants enrolled in CIA can review their accounts and generate their own reports at any time. Individuals are encouraged to update significant changes to their personal information via the appropriate toll -free 18 Investment Advisory and Management Service Agreement Ef, 3/29/2024 40 customer service number. In addition, all individuals receiving Services are provided quarterly account statements generated by the plan's recordkeeper. Item 14—Client Referrals and Other Compensation EAG has authorized EFSI, an affiliate of EAG, and its licensed agents and registered representatives who are Empower employees (collectively referred to as Agents) to solicit, refer and market EAG's services. EAG does not pay any compensation directly to EFSI or its Agents for the solicitation activities performed by EFSI and its Agents. The Agents receive compensation in the form of a salary and a variable bonus paid by Empower. No commissions are paid to Agents for the Services by EAG or EFSI. Agents may earn bonus compensation based upon engaging plan sponsors to offer EAG's services. Other Agents and EAG representatives may be indirectly compensated through bonus compensation, in addition to their salary, for communication, education and/or assisting participants to enroll in EAG's Services. The incentive compensation an EAG representative receives depends on position type, but generally is calculated based on Empower and/or EAICA profitability and the achievement of individual performance goals that may include factors unrelated to an account holder's adoption of investment products or services offered through Empower. Agents and EAG representatives' individual performance goals and their related incentive compensation is based on a combination of factors including the number and quality of customer engagements during the measurement period and the amount of customer assets retained as result of the engagements. The rate of incentive compensation considers the total amount of retained or accumulated assets, compared with the monthly asset goal, as determined by EAG on a periodic basis. The asset goal is generally set on an annual basis and may differ by product or account type. Additional factors may include certain qualitative factors, such as leadership, teamwork, client experience, quality and efficiency of client interactions, and adherence to corporate policies and regulatory standards. Compensation paid to Agents or EAG representatives does not increase the fees paid by the plan, plan sponsor or Members. Item 15 —Custody EAG does not maintain actual custody of its clients' cash, bank accounts, or securities. Pursuant to Rule 206(4)-2 of the Advisers Act as amended, EAG is deemed to have constructive custody with respect to certain client funds and securities. This is because an affiliated party is the custodian and directed or discretionary trustee of certain retirement plan accounts. In addition to annual audits, these accounts, are subject to surprise custody verifications by an independent public accountant each year, as required by Rule 206(4)-2. If applicable, EAG's clients receive periodic account statements (at least quarterly) from their custodian and should carefully review these statements. Certain clients may have assets held by unaffiliated custodians. Item 16 — Investment Discretion EAG provides discretionary investment management services for those plan participants who enroll and participate in the MA service; EAG does not offer or engage in discretionary investment services for CA. The MA service is a professional, flexible asset management program that utilizes data from the methodologies and proprietary software program developed and employed by its IFE, Morningstar Investment Management. To provide the MA service to plan participants, EAG retains discretionary authority over the allocation of available investment options without requiring prior approval of each transaction. All ongoing investment transfers and investment direction changes are implemented for plan participants enrolled in the Managed Account service. Item 17 — Voting Client Securities EAG does not assume the responsibility to aid or vote proxies or other issuer communications regarding your Account, or to exercise voting or other decision -making authority regarding proxies or other issuer communications. Correspondence regarding the matters described in this section will be handled in connection with the Plan's policies and service provider arrangements. 19 Investment Advisory and Management Service Agreement Ef. 3/29/2024 41 EAG, as a registered investment adviser, and as a matter of practice, does not accept authority to vote client securities in connection with any of the services described in this Brochure. Correspondence regardingthe matters described in this section will be handled in connection with the Plan's policies and service provider arrangements. Item 18 — Financial Information As previously discussed, under certain circumstances FAG has discretionary authority over certain client funds and securities. Accordingly, EAG is required to disclose information about its financial condition that is reasonably likely to impair its ability to meet contractual commitments to its clients. EAG has no financial commitment that impairs its ability to meet contractual commitments to its clients, nor has EAG been the subject of a bankruptcy proceeding. Further, EAG does not require or solicit prepayment of fees in excess of $1,200 per client more than six months in advance. 20 Investment Advisory and Management Service Agreement Ef. 3/29/2024 42