News: 2004 3rd Quarter

• United Air Lines Pension Plans
  Several defined benefit plans of United Airlines hired IFS to act as Independent Fiduciary regarding funding and contribution matters. The U.S. Department of Labor was actively involved in finalizing the terms of our role as Independent Fiduciary.
• MCI/WorldCom 401k Plan
  The MCI/WorldCom Plan hired IFS as an Independent Fiduciary to decide whether to participate in a proposed settlement of and ERISA class action regarding losses suffered on company stock.
• ARINC Pension Plan
  The defined benefit pension plan of this major airline communication firm hired IFS as an Independent Fiduciary to decide whether and on what terms to accept an excess contribution of the company's headquarters and to lease back the property to the company. IFS recently submitted a report to the U.S. Department of Labor in support of an ERISA prohibited transactions exemption to permit the contribution and leaseback.
• Litigation Support
  Counsel to a multiemployer plan hired IFS to advise it regarding the investment practices of one of the plan's investment managers.

• State of Montana Board of Investments
  The State of Montana Board of Investments hired IFS to conduct an Operational Review of the $9.4 billion in Montana pension and related funds.
• City of Mobile Pension Fund
  This fund hired IFS to develop an RFP for investment consulting services.

Consumers Union selected IFS to provide investment advisory services on an ongoing basis, regarding its corporate investment portfolio.

IFS recently added or completed several fiduciary transactional projects, including:

• California State Teacher's Retirement System (CalSTRS)
  IFS recently completed its verification of various incentive compensation awards to this System's investment staff.
• Service Employees International Union Master Trust
  This fund hired IFS to design and review responses to an RFP for brokerage commission recapture services.
• City of Mobile Pension Plan
  IFS recently completed a limited Operational Review of the investment management services for this Plan.
• James M. Johnston Foundation
  IFS recently completed a limited Operational Review of the investment policies and practices of this endowment fund.

IFS recently completed Operational Reviews for the following clients:

• Western States Office & Professional Employees' Pension Fund
• Upper Peninsula Plumbers' & Pipefitters' Pension Fund
• Las Vegas Laborers Pension Fund

"UAL Corp. - Independent Firm Is Chosen As Trustee for Pension Plans".

UAL Corp. chose an independent fiduciary firm based in Washington to represent the interests of employees invested in the airline's retirement plans. Following an agreement UAL reached with the Labor Department last month......IFS will review funding of the UAL pensions and assert claims or bring litigation on their behalf...

United Airlines Inc., Elk Grove Village, Ill., appointed Independent Fiduciary Services as independent fiduciary for its pension plans. Judge Eugene R. Wedoff, overseeing the bankruptcy case of United parent UAL Corp., Chicago, today concurred with the appointment in U.S. Bankruptcy Court in Chicago, saying the company has the discretion to make such an appointment without court approval. IFS will pursue claims regarding pension contributions owed to the plans with authority to initiate litigation or other action if there appears to be any breach of fiduciary duty related to funding and contribution issues. It will also recommend funding policies to United's board. IFS can use consultants without court approval and at the airline's expense. However, the fiduciary's duties will not include overseeing investment management of pension assets.

Montana Board of Investments, Helena, hired Independent Fiduciary Services as the $6 billion system's first external investment consultant [solely for an Operational Review], said Carroll South, executive director. IFS officials will talk with board members at the end of October and are expected to present tentative investment recommendations in late December, Mr. South said. R.V. Kuhns, Ennis Knupp and Mercer Investment Consulting were the other finalists in the search.

The International Foundation of Employee Benefit Plans recently published the 5th Edition of its Investment Policy Guidebook for Trustees. IFS' Lamont (Monte) Tarbox was invited to contribute a chapter on economically targeted investments ("ETI's"). In it, Monte described the evolution of ETI's over the last twenty years, the changing attitudes of investors and regulators, and why ETI's should have a role in many pension fund portfolios. Other topics in the guidebook include asset allocation, investment guidelines, brokerage services, hedge funds, real estate and proxy voting. Copies are available from the IFEBP by calling (888) 334-3327 option 4 or by visiting the Foundation at www.ifebp.org.

Lamont (Monte) Tarbox .presented a briefing on the U.S. pension system to a visiting delegation of Australian pension fund trustees at this meeting in Los Angeles.

Samuel (Skip) Halpern made a presentation on Fiduciary Audits - What to Expect at the conference held in Washington DC in October 2004.

Barbra Byington and Marc Morlock made a presentation titled, "2005 and Beyond: How Best to Position Your Plan for the Future", to a number of public fund executive investment staff representing various public fund retirement systems around the Mid-Atlantic region. The presentation, and interactive discussion with attendees, touched on the following key areas of interest:

Top Issues Facing Public Plans for the Future

• Status of Your Fund's Profile
• Tools to Position Your Plan for the Future
• Funds Which Have Taken Steps to Prepare for the Future

IFS recently hired Theresa (Terri) L. Deliantis as Administrative Assistant in our New Jersey office.