1. Annual Meeting of 1818 Society Pension Plan Performance October 22, 2008

2. 2 Pension Plan and Endowments Roadmap 1.Highlights 2007 2.Update 2008 and Recent Market Stress 3.Determinants of Plan Long Term Performance 4.Concluding Remarks

3. 3 SRP - Funded Status Funded ratio is (MV of Assets)/(Liabilities)

4. 4 Total Bank Contribution Rates for FY03 - FY09

5. 5 SRP Plan Performance (2007)  Alternative investments continued playing a key role

6. 6 SRP - Change in Asset Allocation Policy, October 2007 Old TargetNew Target Non US Equity 16% Fixed Income 40% US Equity 19% Hedge Funds Up to 12% Private Equity Up to 12% Real Estate Up to 8% Cash Up to 1% Overlay Strategies 2% Real Estate 12.5% Infrastructure 2.5% Timber 2.5% Fixed Income for hedging 25% Cash 1% US Equity 4.5% Non-US Equity 4.5% Hedge Funds Strategies 23% Private Equity 15% Emerging Market Equity 5% Commodities 2.5% Equity Strategies Absolute Return Strategies Fixed Income Strategies Real Return Strategies

7. 7 Pension Plan and Endowments Roadmap 1.Highlights 2007 2.Update 2008 and Recent Market Stress 3.Determinants of Plan Long Term Performance 4.Concluding Remarks

8. 8 Pension Plan and Endowments General Market Developments Update on Recent Market Developments Unprecedented market conditions have led to losses in most asset classes Asset Class Returns YTD (as of October 16 2008) Russell 3000-37.5% MSCI World exUS-40.0% MSCI EM Free-48.7% DJ AIG Commodity Index-25.7% EMBI-16.1% Lehman Global Aggregate exUS0.9% Lehman US Aggregate-1.4% Lehman Brothers U.S. Tips Index-3.1%

9. 9 Pension Plan and Endowments General Market Developments Update on Recent Market Developments Equity market gyrations accelerated in October. Dow drops the most ever in 1 day, and subsequently stages the biggest rally since 1930s, only to fall back again

10. 10 Pension Plan and Endowments Government interventions to stem the crisis Update on Recent Market Developments Unprecedented government intervention across the world: Liquidity and lending guarantees Interest rate cuts Bank retail deposit guarantees Bank recapitalization Asset purchase Short selling bans Blanket deposit guarantees US Guarantee all senior debt issued by banks for next 3 years Cut rates to 1.5% on Oct 8 Increase bank deposit to USD 250K from USD 100K. Non interest bearing accounts unlimited guarantee Will purchase troubled bank assets up to USD 700bn. Will use of up to USD250bn of the USD 700bn “bail-out package” to inject in banks. Half in the 9 big banks; other half for smaller lenders and thrifts Temporarily banned short selling in financial companies. Ban lifted Oct 8. EU Cut rates to 3.75% on Oct 8 Guarantee deposits for up to EUR100K UK Guarantee new short and medium-term debt issued by banks Cut rates to 4.5% on Oct 8 Increase deposit guarantee to GBP50K RBS and Lloyds get GBP39bn capital injection. Another GBP25bn available for Tier 1 capital to other banks. Short selling in financial stock until Jan 2009 Germany Provides EUR400bn in bank guarantees Blanket guarantee for all private bank accounts Provides EUR100bn in state funds to recapitalize banks Short selling in financial stock until Jan 2009 Australia Plans AUD8bn purchases of residential mortgage backed securities Blanket guarantee for entire deposit base

11. 11 Pension Plan and Endowments SRP Performance Update on Recent Market Developments SRP has lost value

12. 12 Pension Plan and Endowments SRP Performance Update on Recent Market Developments Diversification has helped cushion losses A scenario analysis of returns and risk of different hypothetical asset allocations show: The target SAA has highest risk adjusted returns in all scenarios The actual return of SRP are below the target SAA returns but above all other scenarios Actual SRP losses were less than for a “risk averse” 40% eq / 60% fixed income portfolio Total return comparison of different asset allocations

13. 13 Pension Plan and Endowments Roadmap 1.Highlights 2007 2.Update 2008 and Recent Market Stress 3.Determinants of Plan Long Term Performance 4.Concluding Remarks

14. 14 Pension Plan and Endowments Approaches to SRP Management Cyclicality and Sources of Alpha Progressive improvement in the amount and consistency of Excess Return over time Excess Return has increased three-fold in the past 5 years

15. 15 Pension Plan and Endowments Approaches to SRP Management Cyclicality and Sources of Alpha Gradual improvement in managing downside risk Since 2002: major effort to increase portfolio diversification and investment in alternatives

16. 16 Pension Plan and Endowments Diversification across Asset Classes Improves Excess Returns Greater diversification and low excess returns correlation across asset classes are two main reasons for improvement of excess returns

17. 17 Pension Plan and Endowments Diversification within Asset Classes Improves Excess Returns Greater diversification within each asset class across active managers has also positively contributed to reduce the overall volatility Impact is greatest in the highest return producers: alternative asset classes

18. 18 Pension Plan and Endowments 2008 Alpha generation: A Damage-Control Year Cyclicality and Sources of Alpha Environment has made it difficult for active managers to add Alpha Plan has done better than market average in public equities and roughly in line in fixed income * Market average is composed of 197 different active managers in the Fixed Income space and 293 in the Public Equity space. ** per annum Preliminary indicators confirm this trend for the quarter ending September 30th. Data will not be available till mid-November

19. 19 Pension Plan and Endowments Roadmap 1.Highlights 2007 2.Update 2008 and Recent Market Stress 3.Determinants of Plan Long Term Performance 4.Concluding Remarks

20. 20 Pension Plan and Endowments Concluding Remarks An unprecedented market environment has prompted an unprecedented government response Short-term performance will continue to be volatile Plan’s increased diversification across asset classes and active managers has been a major determinant of performance and stronger risk management Diversification will continue to contribute to the downside protection of the Plan Crisis will be tough in the short term but will bring better risk/return metrics: better buying opportunities for the long term investor