A publication of the Ohio Deferred Compensation Board

OHIO DEFERRED COMPENSATION

1-877-644-6457 www.Ohio457.org Second Quarter 2013

What’s your excuse for notsaving enough for retirement?Everybody loves a treat now and then, but don’t forget about your financial future.

Maybe you’ve been told that having a healthy retirement account requires picking the “hot” funds.

However, research shows that things might be a little simpler than that. It’s actually consistently increasing your deferrals that gives you the best chance of meeting your long-term goals when compared to just picking the “right” funds.*

“Dahling, you look beautiful just as you are—put that money to work in your Ohio DC account instead.”

A small increase in your deferral each year could make a big difference in reaching your retirement goal. Enrolling in the SMarT Plan automatically increases your deferrals every year, so your account will beon a better path without extra thought or effort.

To find out more about increasing your deferrals, visit www.Ohio457.org or call 1-877-644-6457 today.

* Van Harlow, W. (July 2012). Defined contribution plans: Missing the forest for the trees? [Abstract]. Putnam Institute Research, 2-5.

Save More withOhio DCThe article on page 3 indicates that many people are kidding themselves when it comes to their retirement plans and options. The good news is that participants in Ohio DC might receive a substantial amount of pre-retirement income replacement from their primary pension plan when they retire.

However, that might not be enough for most people to enjoy a comfortable retirement. So savings with Ohio DC could be the key to financial security during retirement.

Of course, saving often involves choices between what we want today and what we will need in the future. Sometimes it’s just a matter of remembering to increase the amount you are deferring.

If retirement is a long way off, it’s easy to enroll in our SMarT plan.

If you are closer to retirement and have the ability to save more, we have Age 50+ Catch-up and Traditional Catch-up options.

Visit our website or call us for more information.

Keith OverlyExecutive Director

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Upcoming Fund Changes Bring You Lower Fees

With more than $9.5 billion in assets, Ohio Deferred Compensation has access to institutionally priced investment options that are not generally available to individual investors. This fall, we plan to make several investment option changes that will further lower fees.

Although we’re making changes to some of our investment options, the underlying investment strategies will remain the same—only the fees are different. On September 13, 2013, investments in the LifePath Portfolios, Vanguard Institutional Index, and Vanguard Small Cap Index will be moved to lower-costing share classes of the identical investment strategies. The Program will also begin to offer a new LifePath 2055 fund for persons with the longest retirement horizon.

Also on September 13, 2013, investors in the Dodge & Cox Balanced fund will have their investment balance and/or deferral allocation moved into the LifePath Portfolio with a target date nearest to their 65th birthday. If you are invested in the Dodge & Cox Balanced fund and wish to make another fund selection instead of LifePath, you can do so before 4:00 p.m. on September 12. You do not need to take any action to have your investments moved automatically. The reasons for closing the Dodge & Cox Balanced fund include:

uThe Dodge & Cox Balanced fund invests in a mix of stocks and bonds that can vary depending on different market factors and the fund manager’s decision. Active management of this fund might result in too much investment risk for some investors.

uThe LifePath portfolios offer a long-term investment strategy that becomes more conservative over time. These options are passively managed to meet their benchmarks, have lower fees, and reduced volatility over time.

On September 13, 2013, investment balances and/or deferral allocations will be moved to the applicable replacement option shown below.

EXISTING OPTIONS REPLACEMENT OPTIONSDodge & Cox Balanced LifePath Portfolios (Q share class)

LifePath Portfolios (J share class) LifePath Portfolios (Q share class)Vanguard Institutional Index (Institutional share class) Vanguard Institutional Index (Institutional plus share class)Vanguard Small Cap Index (Institutional share class) Vanguard Small Cap Index (Institutional plus share class)

Additional information about these investment changes can be found in the 1st Quarter Focus newsletter (April 2013), and at www.Ohio457.org. If you have questions, contact an Account Executive at 1-877-644-6457.

Like other funds, target date funds are subject to market risk and loss. Loss of principal can occur at any time, including before, at, or after the target date. There is no guarantee that target date funds will provide enough income for retirement. These LifePath Portfolios are not available to the public. They are available only through Ohio DC. Because the LifePath Portfolios are not mutual funds, prospectuses are not available. Consider the investment objectives, risks, charges, and expenses carefully before investing by consulting your prospectuses or profiles, which contain this and other information. They are available by calling 1-877-644-6457 or visiting www.Ohio457.org. Read the prospectus or profile carefully before investing.

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Surveys show that we Americans are kidding ourselves—with potentially dire consequences for our retirements. Here are the 7 most common lies we continue to tell ourselves about retirement:

I can’t save any more than I do already. FACT: The fact is that if you’re working, there is always something (alcohol, tobacco, movies, expensive hobbies, or eating out) that you can cut to save a little more.

I will solve my retirement problem by working past 65 or even longer. FACT: Sadly, even though people say they will work, what they don’t count on is losing their job or their health. Some 42% of current retirees stopped working before they were 60 (Source: BlackRock and Boston Research Group poll).

Once I retire, I will find some full- or part-time work to supplement my income and give me a comfortable retirement. FACT: Only 25% of retired workers have any employment income.

My 457 account, 401k, or other supplemental retirement savings will provide the bulk of my retirement income. FACT: Only 15% of retirees get 25% or more of their retirement income from their 457 or 401k-type accounts. About half (47%) of Americans age 45 and over have less than $25,000 in savings.

What Could Wreck Your Retirement?

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I will have enough saved to last my lifetime.FACT: Only 25% of workers think their savings has to last more than 30 years. But people are living longer. What happens if you retire at 65 and outlive your money?

I can rely on Medicare for all of my medical needs once I turn 65. FACT: Medicare does not cover all of one’s medical expenses. A retired couple will need somewhere between $220,000 and $293,000 for ordinary health-related expenses for 20 years of retirement. (Source: Society of Actuaries using data from Health Care Cost Institute).

I have a good idea of how much I’ll need for retirement, and I know how to invest it.FACT: About 45% of workers just guess how much they’ll need for retirement. Only 18% have ever asked a financial planner or advisor for assistance in determining that amount.

So What Can You Do? PLAN.Call the Ohio DC Service Center at 1-877-644-6457 and talk with an Account Executive to get on track.

Or, if you’re close to retirement, meet with a Retirement Planning Specialist (RPS). Read the next article to find out how.

Source: www.TopRetirements.com

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How to PLAN:Retirement Planning Specialists Available for You

Retirement Planning Specialists (RPSs) will be available to meet with you during normal business hours, depending on your location. You must make an appointment for this service to discuss your Ohio DC account. Call 1-877-644-6457, press 3, and an Account Executive will assist you with making your appointment.

RPSs will be in the following locations on these selected dates:

August Meetings:August 1, 2013 Akron Portage Lakes Library August 7, 2013 Cleveland Brecksville LibraryAugust 14, 2013 Toledo Maumee LibraryAugust 22, 2013 Cincinnati Anderson LibraryAugust 28, 2013 Canton Main Library

September Meetings:September 5, 2013 Cleveland Willowick Library September 11, 2013 Toledo Heatherdowns Library September 18, 2013 Cleveland Bay Village LibrarySeptember 26, 2013 Cincinnati Sharonville Library Topics covered by an RPS during your appointment:n Your retirement goalsn General information about tax deferralsnStrategies to help minimize taxesnWithdrawal scenariosnDeferred compensation allocationnCoordinating income from various sources during retirement

Each RPS is a Chartered Financial Consultant (ChFC), who helps Program participants with retirement planning at no charge, in any of three ways––at the Service Center in Columbus, at meeting sites throughout Ohio, or over the phone.

Information presented by the RPS is for educational and planning purposes only and is not intended as investment advice. Neither Nationwide nor its representatives provide tax, legal, or investment advice. Please consult your professional advisor for such advice.

By signing up for eDelivery, you can see your Quarterly Statements and Focus newsletters online any time. There’s no waiting for mail to be delivered, no opening envelopes, and no fumbling with filing and organizing all your papers.

It’s free, simple, and will make your life that much easier. By opting-into eDelivery, your Quarterly Statements will be available online and only a click away. In minutes, you will be set up to receive emails notifying you when your statement is ready. And you will have access to past as well as current statements.

Log in to your account at www.Ohio457.org and select eDelivery today!

Go Paperless!

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Ohio Deferred CompensationInvestment Performance Report –– As of June 30, 2013

The results shown represent past performance and should not be considered a representation of future performance or experience. Past performance cannot guarantee future results. Current investment results may be lower or higher than quoted in this report. The principal value and investment return of an investment will fluctuate so that an investor's units/shares, when redeemed, may be worth more or less than their original cost. Performance data current to the most recent month-end may be obtained by visiting www.Ohio457.org. Although data is gathered from investment providers, the Program cannot guarantee completeness and accuracy. Please see other important disclosures at the end of this report. Consider the investment objectives, risks, charges, and expenses carefully before investing by consulting your prospectuses, which contain this and other information. Prospectuses are available by calling 1-877-644-6457 or visiting www.Ohio457.org. Read the prospectus carefully before investing. VRU Ticker 2nd Average Annual Returns ExpenseFund # Symbol Quarter YTD 1 Year 3 Year 5 Year 10 Year Ratio (1)

Ohio DC Options LifePath Portfolios Inception Date

120 LifePath Retirement(2) 8/1/2005 n/a(3) -1.96% 0.83% 5.06% 7.69% 5.12% 5.31%(4) 0.25%

121 LifePath 2015(2) 7/5/2006 n/a(3) -1.73% 1.38% 6.14% 8.60% 4.60% 5.03%(4) 0.25%

122 LifePath 2020(2) 8/1/2005 n/a(3) -1.50% 2.44% 8.03% 9.67% 4.59% 5.12%(4) 0.25%

123 LifePath 2025(2) 7/5/2006 n/a(3) -1.27% 3.35% 9.51% 10.65% 4.60% 4.85%(4) 0.25%

124 LifePath 2030(2) 8/1/2005 n/a(3) -1.12% 3.95% 10.79% 11.43% 4.53% 5.10%(4) 0.25%

125 LifePath 2035(2) 7/5/2006 n/a(3) -0.79% 4.84% 12.19% 12.20% 4.52% 4.62%(4) 0.25%

126 LifePath 2040(2) 8/1/2005 n/a(3) -0.80% 5.38% 13.36% 12.86% 4.42% 4.99%(4) 0.25%

127 LifePath 2045(2) 7/5/2006 n/a(3) -0.55% 5.94% 14.46% 13.44% 4.32% 4.31%(4) 0.26%

128 LifePath 2050(2) 9/30/2007 n/a(3) -0.46% 6.61% 15.43% 14.05% 4.50% 1.58%(4) 0.26%

Stable Value (Annualized Return) 2nd Quarter 2013 ––– 2.40% 3rd Quarter 2013 ––– 2.25% 101 Stable Value Option n/a(3) 0.59% 1.21% 2.55% 2.95% 3.41% 4.14% 0.41%

Mutual Funds International Stock Funds 532 Templeton Foreign TFFAX 2.47% 3.68% 23.26% 10.40% 2.25% 8.00% 0.96%

209 Vanguard International Growth VWILX -2.15% 0.90% 15.40% 10.44% 1.21% 8.98% 0.36%

310 Vanguard Total International Stock Index(5) VTSNX -3.24% -0.42% 13.60% 8.24% -0.86% 8.31% 0.12%

Small-Cap Stock Funds 402 FPA Capital(6) FPPTX -1.51% 7.80% 20.66% 16.25% 7.15% 9.53% 0.84%

403 Hartford Small Company HIASX 4.86% 19.03% 23.89% 19.59% 7.16% 10.83% 0.72%

210 Vanguard Small-Cap Index VSCIX 2.77% 15.97% 25.75% 20.06% 10.19% 10.93% 0.08%

Mid-Cap Stock Funds 208 Vanguard Capital Opportunity VHCAX 4.26% 21.16% 34.71% 19.04% 7.95% 11.21% 0.41%

Large-Cap Stock Funds 202 Dodge & Cox Stock DODGX 5.20% 17.55% 30.61% 19.24% 6.67% 7.98% 0.52%

306 Fidelity Contrafund FCNTX 2.05% 11.42% 16.78% 16.69% 5.99% 9.88% 0.74%

307 Fidelity Growth Company FDGRX 3.89% 12.71% 18.02% 20.00% 7.43% 10.39% 0.90%

291 Janus Twenty JAVLX 2.58% 7.77% 15.82% 13.61% 1.18% 9.53% 0.81%

565 Vanguard Institutional Index VINIX 2.91% 13.83% 20.57% 18.43% 7.04% 7.31% 0.04%

Balanced Funds 201 Dodge & Cox Balanced(7) DODBX 3.46% 12.60% 22.92% 15.49% 7.17% 7.18% 0.53%

Bond Funds 207 PIMCO Total Return PTRAX -3.66% -3.14% 0.95% 4.41% 7.00% 5.71% 0.71%

215 Vanguard Total Bond Market Index VBTIX -2.42% -2.48% -0.83% 3.43% 5.18% 4.54% 0.07%

(1) Investment returns for the Ohio DC Options and Mutual Funds have been reduced for gross Expense Ratios. These average Expense Ratios may vary from time to time. The Expense Ratios for the Ohio DC Options are established by the Program and include a 0.09% Program administrative expense.

(2) Returns shown for the periods prior to 12/18/2007 are those of the respective LifePath Index F series, net of historical Program administrative expenses.(3) LifePath Portfolios and Stable Value Option (SVO) are not publicly traded mutual funds and do not have a ticker symbol or prospectus. These options are available only through Ohio Deferred

Compensation. The value of the securities held by the SVO will fluctuate. The SVO focuses on principal preservation and a stable rate of return.(4) Average annual return since inception date.(5) Returns include performance of a different share class achieved prior to the inception of the Admiral or Institutional share classes. Returns were not recalculated to reflect the fees of the Admiral

share class.(6) This fund may be subject to a redemption fee. Please consult the Program website or fund prospectus for additional information.(7) This fund is closed to new investors. All investments and deferral allocations will be moved to a LifePath Portfolio on September 13, 2013.

Account Executives are registered representatives of Nationwide Investment Services Corporation, Member FINRA

6This newsletter is printed on recycled paper.

Investment Performance: Investment returns on the Investment Performance Report do not reflect the deduction of the historical administrative fee. The Board may suspend the administrative fee at its discretion. All reported mutual fund returns assume reinvestment of capital gains and dividends and reflect the fund's expense ratio. The Ohio DC Options are not mutual funds or registered investment companies. Administrative Fee: An administrative fee of $2.00 per quarter was charged 1/1/2000 to 9/30/2006. The quarterly $2.00 administrative fee has been suspended since 10/1/2006 to present.Stable Value Option: Annualized returns are net of investment management, custody, principal protection, and plan administration fees. A fund profile can be obtained for the Stable Value Option by calling 1-877-644-6457 or visiting www.Ohio457.org.LifePath Portfolios: Each LifePath Portfolio is based on a target year (when you expect to begin using your money). Portfolios are designed to provide diversification and asset allocation across several types of investments and asset classes, primarily by investing in underlying funds. The administrative expenses of the LifePath Portfolios includes the Portfolios' proportionate share of the applicable administrative expenses of the underlying funds. There is no guarantee that LifePath Portfolios will provide enough income for retirement.International Funds: Funds that invest internationally involve risks not associated with investing solely in the United States, such as currency fluctuation, political risk, differences in accounting, and the limited availability of information.Small Company Funds: Funds investing in stocks of small or emerging companies may have less liquidity than those investing in larger, established companies and may be subject to greater price volatility and risk than the overall stock market.Bond Funds: Bond funds have the same interest rate, inflation, and credit risks that are associated with the underlying bonds owned by the fund.

Holiday Schedule

Elected StatutorySharon M. Downs Robert Blair Retired Group Director, Ohio Department ofJohn W. Maurer Administrative ServicesRetired Group Edna BrownHeather Link SenateState College and Jay HottingerUniversity Employees House of RepresentativesMatthew G. Schulz, Vice Chair AppointedState Employees Robert SmithCinthia Sledz Investment Expert Miscellaneous Employees James R. TillingKen Thomas Investment ExpertMunicipal Employees VacantHelen Youngblood, Chair Investment ExpertCounty Employees Keith Overly Executive Director

Investment Performance Report Notes

Ohio DC Board of Trustees

NRM-3831OH.29 06/2013

Ohio Deferred Compensation Program is a supplemental retirement benefit plan regulated by Section 457 of the Internal Revenue Code. If you have questions, write, visit, or call an Account Executive.

Ohio Deferred Compensation Service Center257 East Town Street, Suite 457Columbus, OH 43215-4626Walk-in hours: 8:00 a.m. – 4:30 p.m. Monday – FridayPhone hours: 8:00 a.m. – 5:30 p.m. Monday – FridayAutomated Telephone System: 24 hours, 7 days a week

1-877-644-6457 � Ohio457@Nationwide.com

OHIO DEFERRED COMPENSATION

OHIO PUBLIC EMPLOYEES DEFERRED COMPENSATION PROGRAM

Access the website 24/7. Receive the latest Program information. Add or update your email address. Log in at www.Ohio457.org.

Stay Connected

The Service Center and exchange processing will be affected by the following New York Stock Exchange holiday schedule. When the Service Center is closed, you may still access your account by using the automated telephone system or website. Exchanges received on holidays will be processed as of the market close of the next business day.

ExchangesHoliday Date Closed Processed

Day before Open until 1:00 pm After 1:00 pmIndependence Day 7/3/2013 7/5/2013

Independence Day 7/4/2013 7/5/2013

Labor Day 9/2/2013 9/3/2013