A redemption fee is collected when a shareholder cashes in fund shares before a specified period of time. The fee is designed to discourage investors from making short-term investments in the fund. Short-term investing raises costs by increasing the number of times a fund manager has to sell or otherwise readjust a portfolio to meet a redemption request. Redemption fees are intended to offset those costs and protect the returns of a fund's longer-term shareholders.

The redemption fee will be charged to the participant's account, unless the fee is immaterial.

Plans designed for long-term investing

Your retirement plan is intended to help you accumulate assets for your retirement. The plan and the services provided by Standard Insurance Company have been designed to support your long-term investment needs throughout your working and retirement years.

The plan is not intended to facilitate frequent trades among investment options or provide "day trading" opportunities. Short-term trading adversely affects the plan’s operations and increases the expenses of both the plan and the investment options.

The Standard's agreements with our mutual fund alliance partners require us to adhere to trading rules established in the prospectuses. Short-term or frequent trading is prohibited by most funds, whether or not the trades are subject to redemption fees. Generally, in addition to normal contribution and distribution activity, one purchase and one redemption in an investment option during a 90-day period is considered reasonable transfer activity.

Trading activity will be monitored. If excessive transfer activity is identified, we may suspend the participant’s ability to execute transfers through the Personal Savings Center Web site and INFOLINE telephone system. Any transfers will have to be requested using paper forms and will be executed in conformance with trading guidelines. This may lead to delays in execution of requested transactions.

Reaching financial fitness

For many people, each new year starts with a pledge – one commonly focused on physical fitness. Exercise more. Quit smoking. Eat healthier.

They’re good goals. Better physical fitness can make it easier to do things you want to do — whether it’s working more in the garden or climbing Mt. Everest. If you’re in good physical health, the world is a place full of options, not just things you wish you could do.

The same is true of your financial fitness. When you’re in good financial shape, you choose what to do with your money rather than simply “paying the bills.”

Like the vow to exercise more, improving your financial fitness requires you to start a new habit and stick with it.

Shopaholic?

If there's a six-letter word people hate to hear, it's got to be "budget." Many Americans don't live within their means, which is why so many of us are deep in debt.

But developing a budget — and living within it — are necessary steps if you want to pay off debt and achieve good financial health.

The same is true of your financial fitness. When you’re in good financial shape, you choose what to do with your money rather than simply “paying the bills.”

Following a budget is not a matter of pinching pennies. It's just deciding exactly where those pennies should go and following your plan.

It also means going cold turkey on the credit card purchases — the most difficult step for many people to take. Shopping is an American pastime, so it can be hard to curb the impulse.

No one is suggesting you give it up altogether. But if you've got big credit card debt, keep these tips in mind:

Saving enough?

If knowledge is power, the most powerful knowledge in retirement planning is knowing whether or not you're on track to meet your goals.

If you are on track, you can rest easy. If you're not, you can do something about it.

But if you don't know — or worse, if you don't want to know — you could head into retirement with dreams and plans that are out of whack with your financial reality.

The easiest way to set a goal and follow your progress is through the online calculators available at http://retirement.standard.com.

When you hit the landing page, choose the "Develop Your Plan" link from the menu on the left side of the screen. This will take you to an online quiz that helps you determine how much you should save and how you're doing.

You can take this quiz over the years to make sure you're still saving enough to meet your goals.

Meet your investments

If a friend asked you to invest in a business he was starting, you'd ask questions, beginning with the obvious: What kind of business is it?

Then, you might ask: Who else is investing? What's your strategic plan? How risky is this?

When you think about it, then, isn't it a bit odd that most 401(k) participants know very little about the investments in which they put their retirement savings?

If you think it's because sleeping dust is made partly of terms like "standard deviation" and "expense ratio," you might be right.

Even so it's important to learn at least the basics about each of your investments - and to have access to in-depth details.

That's why Standard Insurance Company recently introduced new fund descriptions for the investments offered in your company's 401(k) plan. Developed for us by Standard & Poor's, they provide a wealth of information to both novice investors and would-be Wall Street analysts.

Whether it's a fund's investment strategy, asset allocation or top holdings, you'll find important details about each fund presented plainly and succinctly. It will help you understand what the fund manager intends to do with the money you contribute.

Like the questions you'd ask your friend, those are a few things every investor ought to know.

If you're among that smaller group of people concerned about a fund's R2 or its alpha, you'll find those and many other statistical details on the fund description, too.

In addition, we also offer A User's Guide to Fund Descriptions, which defines all the terms you'll come across in the descriptions.

For paper copies of the fund descriptions and the User's Guide, see your human resources staff.

You can also access the fund descriptions online through the Personal Savings Center. Choose "performance" under the investment menu and click on the fund name to read about it.

Risky business

Investing in the financial markets carries unavoidable risk. Most investors understand they can lose money, but many may not understand why it happens.

Downward trends in the financial markets can result in widespread losses, but investors lose money because of how they have invested.

Each investment carries a risk. Wise investors try to balance the types of risk they accept by creating a diversified asset allocation.

A healthy asset allocation - how assets are divided among different types of investments - will include a mix of investments that have different objectives and include different segments of the financial markets.

Using this tactic helps to ease the up-and-down cycles of the markets and the economy.

There are five common types of investment risk and practical strategies to minimize the risk from each investment:

Business risk is the risk that an investment may lose value because a particular company or industry hits the skids. The technology stock crash of 2000 is a good example. To minimize it, invest in mutual funds that focus on different industries, and limit the amount of any individual stock you own, such as employer stock.

Market risk is the chance that the value of your investments will decrease as a result of a decline in the financial markets. Keeping a foothold in non-equity investments such as bonds or Stable Value funds helps minimize this risk.

Inflation risk is the likelihood your investments won't keep pace with inflation. This risk is best countered with an asset allocation weighted with stock funds, which historically outpace inflation.

Interest rate risk is a common risk faced by bond investors, who may see a drop in the value of their investments when interest rates rise. Again, keeping some of your money in stock funds will help counteract this risk.

International risk is faced by foreign or global fund investors who may see the value of their investments decline in the face of political, economic or currency instability in foreign markets. Minimize this risk by investing in multiple foreign markets, as well as the U.S. markets.

Indexed Limits for 2005

The IRS recently announced the 2005 indexed dollar limits applicable to qualified retirement plans.

This update is provided for informational purposes to clients of Standard Insurance Company’s Retirement Plans Division and is not intended as legal advice.

ITEM	IRS CODE REFERENCE	2006 LIMIT	2005 LIMIT
Defined Benefit Dollar Limit	415(b)(1)(A)	$175,000	$170,000
Defined Contribution Dollar Limit	415(c)(1)(A)	$44,000	$42,000
401(k) Employee Deferral Limit¹	402(g)(1)	$15,000	$14,000
Compensation Limit²	401(a)(17); 404(1)	$220,000	$210,000
Highly Compensated Employees Income Limit³	414(q)(1)(B)	$100,000	$95,000
Key Employee Officer	416(i)(1)(A)(i)	$140,000	$135,000
Catch-up Contribution⁴	414(v)	$5,000	$4,000
457 Deferral Limit	457(e)(15)	$15,000	$14,000
Social Security Taxable Wage Base		$94,200	$90,000

1. Employee deferrals to all 401(k) and 403(b) plans must be aggregated for purposes of this limit. Lower limit applies to SIMPLE plans.
2. All compensation from a single employer (including all members of a controlled group) must be aggregated for purposes of this limit.
3. For the 2006 plan year, an employee who earned $95,000 in 2005 is an HCE. For the 2007 plan year, an employee who earns $100,000 in 2006 is an HCE.
4. Available to employees age 50 or older during the calendar year. Lower limit applies to SIMPLE plans.