CSD-RT RFP Recordkeeping_Administration Services Response 3-

This report is intended for use by the management of the Variable Annuity Life Insurance Company ("VALIC") and its subsidiaries.

VALIC Retirement Services Company ("VRSCO") and VALIC Financial Advisors, Inc. ("VFA"), its user entities, and the independent

auditors of its user entities, and is not intended and should not be used by anyone other than these specified parties.

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VALIC

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Loans

VALIC determines the availability and administration of loans for all lines of business based on regulatory guidance

from the investment arrangement, the Internal Revenue Service, the associated Plan Document, and ERISA

requirements, when applicable. For ERISA loan requests, an acknowledged ERISA Loan FormDisclosure Statement

is required with all applicable loan documentation prior to processing loan requests

(4.2)

. In addition, for annuity

contracts and accounts, interest rate parameters are promulgated by product specific rules.

When a participant requests a loan through the available service channels for either the group mutual fund

or annuity products, VALIC verifies the availability of the loan and, if all paperwork is in good order, enters

the information into its record keeping system.

VALIC.com

and AGILEnet validate participant eligibility to

request a loan and the amount allowed

(4.1).

Documentation and approvals included with the loan request

are validated by comparing information on the loan request documentation to data contained in the record

keeping system. An independent quality review is performed for completeness and accuracy before setting up

the loan. If the loan information is correct, the loan is approved for setup. If an error is identified, the request is

returned with instructions for correction

(4.3)

. A check and correspondence describing the loan parameters is

sent to the participant.

Benefit Payments

Benefit payments may occur as a result of participant retirement, death, disability, termination of employment, in-

service withdrawal, or hardship depending on the individual plan parameters. Participant requests are processed in

accordance with regulatory requirements, withdrawal restrictions as determined by the plan document, ERISA and

spousal consent requirements, and applicable product provisions. If in good order the transaction is processed with

a disbursement available on the following business day. If the request is not in good order, it is pended to obtain the

needed information.

Benefit payments include full and partial one-time withdrawals, periodic payments, also referred to as systematic

withdrawals; death claim settlements or rollovers/transfers to another financial institution. Participant and plan

documentation is reviewed for completeness of required documents, accuracy against participant information

in the record keeping systems, and that proper signatures were obtained prior to completion of benefit payment

processing

(6.1)

. An independent quality review is performed to ensure accuracy and completeness

(6.2)

. Benefit

payments failing to process in the record keeping system are recorded on an error report. This report is reviewed

daily and appropriate corrections are made

(6.3)

III. Description of the VALIC Defined Contribution Plan Administration System