The State Farm 401(k) Savings Plan Frequent Trading Policy

The State Farm 401(k) Savings Plan is designed as a long-term retirement savings vehicle. As such, the investment options are not designed to be appropriate for investors who desire to trade the investments frequently in anticipation of, or in reaction to, short-term market price movements. Frequent trading of investment-option shares may lead to less efficient management of the investment option’s portfolio, causing the value of the shares to be diluted for the other plan participants.

Therefore, to protect the interests of plan participants, the State Farm 401(k) Savings Plan Administrator has approved a policy with respect to frequent transfers into and out of the plan’s investment options. As of May 1, 2009, if you transfer or reallocate $5,000 or more from any of the State Farm 401(k) Savings Plan investment options, you will not be able to transfer or reallocate any money back into that option for 60 calendar days from the transaction date.

If you have any questions about this change, please call the State Farm 401(k) Plan Service Center toll-free at 1-866-935-4015.  Customer Service Representatives are available between 8 a.m. and 4 p.m., Central Time, Monday through Friday.