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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Non-automated on-demand checks and wire transfer requests are approved and quality reviewed through TAPS

prior to issue

(7.7)

. Automated manual check requests are automatically sent to SAP for processing subsequent to

a TAPS request from the requestor. The request in the TAPS database is noted as SAP Export with respective batch

number

(7.6)

Death claim disbursements are approved based on limits defined in business procedures. Evidence of approval is

retained

(7.9)

All surrenders and withdrawals are approved based on limits defined in business policies. Evidence of approval is

retained

(7.10)

Electronic Fund Transfers (EFT)

EFT annuity disbursements are executed systematically through the record keeping system, which is

interfaced to SAP and then transmitted to the bank for processing. Accounting performs daily reconciliation

of EFT totals processed in SAP to the transmission file received from the bank. Any discrepancies are

investigated and resolved

(7.8)

. In addition, monthly reconciliations are performed and approved by

management to ensure the bank’s EFT transactions are tracked and recorded in the SAP ledger. Any

discrepancies are investigated and resolved

(7.11)

General Ledger Interface

Group Annuity Product

Once the record keeping system batch cycle completes, transactions are transmitted directly to SAP for both

systematic and manual disbursements. Each transaction is systematically journalized, which updates SAP and

the appropriate general ledger accounts. The systematic transactions are validated within SAP general ledger

mapping tables. Finance performs a daily balancing of record keeping system general ledger entries in SAP. Any

unbalanced general ledger entries are corrected

(7.4)

. Finance compares the record keeping system balance

totals to the general ledger balances on a monthly basis

(7.5)

. Suspense reports are generated daily, monthly,

and quarterly for each general ledger account. Each user department is responsible for researching and clearing

suspense items. Since each transaction is coded with a User ID, the person who entered the transaction has to

back out and re-enter the correct amounts so that the item is deleted from suspense and recorded in the correct

accounts. If the User ID is no longer valid, then the manager of the business unit that processed the transaction

will research and resolve the outstanding item.

III. Description of the VALIC Defined Contribution Plan Administration System