Freestate Advisors LLC

Item 5 – Fees and Compensation

Management Fees for Advisory Services
Clients are charged for our Advisory Services based on a percentage of total assets under management in
accordance with one of the following fee schedules. The fee schedule below is a generic fee schedule and
is not specific to every client.

                               Annual Fee Schedule – Advisory Services

       Assets Managed                   Focused Strategies               SmartRisk Strategies
        $0 - $2,000,000                      1.00%                             1.95%
   $2,000,001 - $5,000,000                   0.75%                             1.50%
   $5,000,001 - $10,000,000                  0.60%                             1.00%
       Over $10,000,001                      0.50%                             0.85%

Freestate Advisors LLC                                                                       Disclosure Brochure

Fees for Freestate Advisors LLC’s services are divided and calculated quarterly in advance based on the
total assets under management at the beginning of the quarter. The initial and final fee charged under an
agreement for services will be pro-rated based on the number of days services are provided in the initial
and final quarters. Although fees are calculated on a quarterly basis, fees are collected monthly. This
means the quarterly fee is divided into three payments and collected monthly in advance. Generally, fees
are deducted directly from the client’s account. Clients must provide the qualified custodian with written
authorization to have fees deducted from the account and paid to Freestate. The Firm sends a bill to the
custodian detailing the amount of the fee to be deducted from the client’s account and paid to Freestate.
Freestate and the client are both responsible for verifying the accuracy of the fee calculation, and the
custodian will not determine whether the fee is properly calculated. Please refer to Item 15 – Custody for
more information.

Upon discretion of Freestate, clients will pay fees directly to Freestate. For clients that pay directly, payment
is due upon the client’s receipt of a billing statement. The qualified custodian will provide client statements,
at least quarterly, showing all disbursements for the account including the amount of the advisory fee, if
deducted directly from the account.

Brokerage commissions and/or transaction ticket fees charged by the qualified custodian will be billed
directly to the client. Freestate does not receive any portion of such commissions or fees from the custodian
or client. In addition, clients will incur certain charges imposed by third parties other than Freestate in
connection with investments made through the account, including but not limited to, mutual fund sales
loads, 12b-1 fees and surrender charges, and IRA and qualified retirement plan fees. Descriptions of these
fees and expenses are available in each investment company security’s prospectus. Management fees
charged by Freestate are separate and distinct from the fees and expenses charged by investment
company securities recommended to clients. In order to avoid conflicts of interest in providing investment
advice to clients, Freestate does not accept and never receives any fees from a third-party in connection
with the investments recommended to clients or implemented in client accounts.

Freestate’s services and fee arrangements will be described in the Client Service Agreement which all
clients must sign prior to services being provided. It should be noted that lower fees for comparable
management or account review services may be available from other sources.

Either party can terminate the Agreement at any time. If services are terminated within five (5) business
days of executing the agreement, services will be terminated without penalty and a refund of any fees paid
in advance will be provided. If services are terminated after the initial five-day period, Freestate will provide
a refund pro-rated based on the number of days elapsed in the quarter. In the event a client terminates
services, termination will be effective from the time Freestate receives written notification or such other time
as mutually agreed upon, subject to the settlement of transactions in progress and the final refund of any
advisory fees due. There will be no penalty charge upon termination. In the event Freestate terminates the
relationship, the agreement will be terminated on the fifth (5th) day after written notification is delivered to
the client or such time as mutually agreed upon, also subject to the settlement of transactions in progress
and the final refund of any advisory fees due.

Retirement Plan Services
For retirement plan sponsor clients, Freestate will charge a fee based on a percentage of the total assets
held in the Plan. Fees are specific to each client and will range from 20 basis points (0.20%) to 100 basis
points (1.00%) based on the complexity of the plan, the size of the plan assets, and the actual services

Freestate Advisors LLC                                                                         Disclosure Brochure

requested. Freestate has also taken into consideration special situations or conflicts of interest where
charging a fee to Client is prohibited under ERISA laws.

Fees for Freestate Advisors LLC’s services are specified in each agreement for services and are generally
calculated and collected quarterly in arrears. The Plan custodian is responsible for fee calculations based
on the total assets held in the Plan at the end of the specified period, and remits fees to Freestate after
deducting them from the Plan participant accounts. The initial and final fee charged under an agreement
for services will be pro-rated based on the number of days services are provided in the initial and final
periods. Clients must provide the qualified custodian with written authorization to have fees deducted from
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Item 7 – Types of Clients

Freestate Advisors LLC generally provides investment advice to the following types of clients:

Freestate Advisors LLC                                                                        Disclosure Brochure

        Individuals
        High-Net Worth Individuals
        Trusts, estates, charitable organizations, or other entities
        Retirement plan sponsors

All clients are required to execute an agreement for services in order to establish a client arrangement with
Freestate and/or the sponsor of third-party money manager platforms.

Minimum Investment Amounts Required

        All clients are required to enter into a written investment advisory agreement prior to the
         establishment of an investment advisor relationship.

        The minimum total investment assets for Advisory Services is $500,000. Exceptions are made at
         our discretion.