Milliman Financial Risk Management LLC

Item 5 - Fees and Compensation

Hedging and Asset Allocation Advisory Services – Institutional Clients.                        As
compensation for our hedging and asset allocation advisory services for institutional clients, we
may charge for services in one of several ways:

       Fees based on an hourly rate for professionals and other employees assigned to a project
        based upon the nature and scope of the services, and the expertise of the persons
        assigned. Fees are consistent with Milliman FRM’s current hourly rates, which range from
        approximately USD$125 - $1000 per hour and are assigned to each staff member based
        on his or her professional qualifications and experience and disclosed to the client in
        advance.
       Fees based on a percentage of assets subject to Milliman FRM’s risk management
        services, which are calculated according to the market value of the client’s underlying
        portfolio (in the case of institutional insurance company clients, typically the value of the
        liability derived from underlying variable annuity contracts). The asset-based fee will be
        calculated on a schedule; an example fee is 45 basis points of the first USD$100 million,
        40 basis points of the next $100 million, and 35 basis points of the next $300 million. Fees
        are negotiated with the client in advance. Each institutional client has the opportunity to
        review and negotiate the advisory agreement with us prior to selecting our hedging
        services for their account.
       Fixed fees for periodic services, where the fee approximates the cumulative expected
        hourly rate for each Milliman FRM employee for the expected time spent. Fixed fees are
        negotiated with the client in advance.

Either we or a client may terminate an advisory contract by giving the other party advance written
notice according to the terms of our investment advisory agreement. Although we do not solicit or
require prepayment of fees from our clients, any fees paid in advance will be prorated to the date
of termination and any unearned portion thereof will be returned to the client.

We bill institutional clients for fees incurred. As we do not hold custody of client assets, we do not
deduct fees from client assets. Institutional clients are billed in arrears, typically monthly or
quarterly.

You may incur fees in addition to ours, such as custodian fees or mutual fund expenses (such as
where Milliman FRM is the sub-adviser to the fund, and the fund’s primary adviser is also paid a
fee). You will also incur brokerage and other transaction costs; these are discussed in more detail
in Item 12 of this Brochure.

Where requested, we will provide you with an estimate of the cost of a particular service.

We do not accept compensation for the sale of securities or other investment products, including
asset-based sales charges or service fees from the sale of mutual funds.

We may at times impose a minimum advisory fee in order to cover the costs of our investment
advisory services. The minimum size is specific to each type of service and dependent on a variety
of factors, economies of scale and the cost of third-party services needed to render Milliman
FRM’s advisory services. All such fee arrangements are disclosed to you and subject to
negotiation. We may aggregate accounts to meet minimum account sizes; whether we aggregate

 Milliman Financial Risk Management LLC (“Milliman FRM”) Form ADV: Part 2A   Page 7

accounts will be determined on a project-by-project basis and, again, is disclosed to the client and
subject to negotiation.

Advisory and Sub-Advisory Services – Funds and Separately Managed Account
Programs. Our fee for these services is based on a percentage of assets receiving Milliman
FRM’s services, which is calculated according to the market value of the entire fund, SMA
account, or client’s allocated risk transfer account. This asset-based fee will be calculated on a
schedule; an example fee is 45 basis points of the first USD$100 million, 40 basis points of the
next $100 million, and 35 basis points of the next $300 million. Fees are negotiated in advance
with a fund’s board and/or primary adviser and approved by a fund’s board of directors; with the
SMA provider; or with the client, as applicable. Investors are encouraged to contact the fund
administrator as stated in the fund’s offering documents for further information.

Either we or the client or client’s primary advisor, as applicable, may terminate an advisory
contract giving the other party advance written notice according to the terms of our investment
advisory agreement. Although we do not solicit or require prepayment of fees from our clients,
any fees paid to the client or primary advisor in advance will be prorated to the date of termination
and any unearned portion thereof will be returned to the client or primary adviser. A primary
advisor may in turn return such fees to the client on a prorated basis depending on the terms of
the advisory contract with the primary advisor.

As we do not hold custody of client assets, we do not deduct fees from client assets. For fund
sub-advisory services, billing clients is the responsibility of the primary adviser. SMA clients will
be billed by the primary adviser according to the terms of their advisory agreement with the
primary adviser and our sub-advisory agreement with the primary adviser or the platform sponsor,
as applicable. Institutional clients are billed in arrears, typically monthly or quarterly.

Investors may incur fees in addition to ours, such as custodian fees or ETF or mutual fund
expenses. Investors will incur brokerage and other transactions costs; these are discussed in
more detail in Item 12 of this Brochure.

Where requested, we will provide clients, primary advisors or platform sponsors with an estimate
...

Item 7 - Types of Clients

Hedging and Asset Allocation Services. These services are provided to life insurers,
pensions, endowments, banks, fund managers, reinsurers and trusts. We may at times impose a
minimum advisory fee in order to cover the costs of our services. The minimum size is specific to
each type of service and dependent on a variety of factors, economies of scale, and the cost of
third-party services needed to render Milliman FRM’s advisory services. All such fee
arrangements are disclosed to clients in advance and subject to negotiation. For certain types of
services, we may aggregate accounts to meet minimum account sizes; whether we aggregate
accounts will be determined on a project-by-project basis and, again, is disclosed to the client and
subject to negotiation.

Advisory and Sub-Advisory Services. Our advisory services consist of advisory or sub-
advisory services provided to mutual funds, private funds, ETFs, UITs, and funds offered through
bank CITs. In the case of advisory services, we may be responsible for the selection of all
investments, which may include derivatives, mutual funds, ETFs, or other securities and cash
required to carry out the strategy selected. In the case of sub-advisory services, typically the
primary adviser or another sub-adviser to the fund is responsible for the selection of underlying
investments, and we are responsible for selecting the particular asset allocation, or, as applicable,
hedge overlay assets, required to carry out the strategy selected. We may at times impose a
minimum advisory fee in order to cover the costs of our investment advisory services. The
minimum size is dependent on a variety of factors, economies of scale, and the cost of third-party
services needed to render Milliman FRM’s advisory services. All such fee arrangements are
disclosed to the fund’s primary adviser and subject to negotiation and approval of the board of
directors of the fund. We may aggregate accounts to meet minimum account sizes; whether we

 Milliman Financial Risk Management LLC (“Milliman FRM”) Form ADV: Part 2A   Page 9

aggregate accounts will be determined on a project-by-project basis and, again, is disclosed to
the primary adviser and subject to negotiation.

Sub-Advisory and Asset Allocation Services – Separately Managed Account
Programs. Our advisory services for SMAs consist of both advisory and sub-advisory services
provided to SMA providers, or primary advisers, who offer individual investors access to such
services through the SMA provider’s platform. For sub-advisory SMA’s the client’s own investment
manager is responsible for the selection of the strategy for the client’s account. We are
responsible for selecting the particular mix of futures, ETFs, or other exchange-traded assets
required to carry out the strategy selected for the client. We may at times impose a minimum
advisory fee in order to cover the costs of our investment advisory services. The minimum size is
specific to each type of service and dependent on a variety of factors, economies of scale, and
the cost of third-party services needed to render Milliman FRM’s advisory services. All such fee
arrangements are disclosed to client through the primary adviser or platform sponsor and subject
to negotiation with the primary adviser or platform sponsor. We may aggregate accounts to meet
minimum account sizes; whether we aggregate accounts will be determined on a project-by-
project basis and, again, is disclosed to the client and subject to negotiation.

For SMA’s where Milliman FRM is the primary advisor, we select the strategy and are responsible
for choosing the securities allocations that are in line with the investor’s objectives. Fees for this
service are negotiated and memorialized in the investment services agreement with the client.
Aggregation of trades across client accounts varies on a case-by-case basis but is disclosed to
the client and subject to negotiation.