Significant Updates to the Investment Funds Description

Since December 31, 2006

Fund Changes for the Balanced Social Values Plus Fund

The inception of the Balanced Social Values Plus Fund (BSVP) is December 31, 1997. Since the fund's inception, it has held both equity and fixed income securities, and the strategy has maintained a social impact component. BSVP was first managed by Mellon Equity Associates. For the equity segment, the firm managed a balanced portfolio for BSVP and employed a quantitative approach for setting asset allocation targets and selecting domestic stock positions. The fixed-income portion of the portfolio held public fixed income securities and was managed by Mellon Bond Associates on behalf of Mellon Equity.

In April 2002, Mellon Equity was replaced as managers of BSVP. Brown Capital Management assumed responsibility for investing the equity segment of the fund. The firm employed a bottom-up stock selection process and purchased stocks of companies expected to grow earnings at a pace faster than the general economy. In addition, in order to add an element of social impact investing for the fixed income segment, the fund began investing in affordable housing mortgages, which is managed by General Board staff.

Beginning October 1, 2007, and going forward, the General Board engaged the services of Northern Trust Global Investors (NTGI). NTGI manages the equity portion of the fund as an index fund which reduces the fund's performance variance compared to its benchmark and also reduces fund expenses.  The fund's equity holdings mirror the Domini 400 Social Index (SM). The Domini 400 is well known among socially responsible investors.  It is similar to the S&P 500 in that it holds the stocks of approximately 250 large companies also held by the S&P 500 and 150 smaller companies. The Domini 400 is unique because in addition to excluding companies that produce alcohol, tobacco, weapons, and other products and services prohibited by the Social Principles, it also screens for companies that have positive environmental, social, and governance records. The General Board continues to internally manage the fixed-income component of BSVP by holding loans originated through the General Board's Positive Social Purpose Investment Program (PSPIP).

Since the inception of the fund, the custom benchmark for BSVP is as follows:

• from 12/31/1997 through 03/31/2002 60% S&P 500 Index, 30% Lehman Brothers U.S. Government/Credit Index, and 10% Merrill Lynch 90-day Treasury Bill Index;
• from 04/01/2002 through 12/31/2003 60% S&P 500 Index, 30% Lehman Brothers Fixed Rate Mortgage Backed Securities Index, and 10% Merrill Lynch 90-day Treasury Bill Index;
• from 01/01/2004 through 09/30/2007 60% Russell 3000 Index, 30% Lehman Brothers Fixed Rate Mortgage Backed Securities Index, and 10% Merrill Lynch 90-day Treasury Bill Index;
• from 10/01/2007 through the present 60% Domini 400 Social Index, 30% Lehman Brothers Fixed Rate Mortgage Backed Securities Index, and 10% Merrill Lynch 90-day Treasury Bill Index.

Postive Social Purpose Investment Program Pricing Policy

Through PSPIP, the General Board funds both short and long-term loans to qualified projects such as affordable housing and community development initiatives. Short term loans range from two to seven years, and long-term loans range from 15 to 30 years. The portfolio holds both current loans and forward commitments in which the General Board agrees to finance a project at a future date.

Each day the General Board assesses the fair market value of the total loan portfolio. This consists of the current fair market value of outstanding loans as well as the fair market value of the forward commitments. The fair market value of the program's portfolio is directly linked to interest rates for U.S. Treasury securities with similar maturity dates compared to the General Board's loans. Additionally, the General Board assesses the credit risk of each loan and adds a factor to the interest rate, which represents the risk of default and lack of readily available market for selling the loans.  Presently, this credit risk factor is updated daily or weekly depending on the underlying loan. Once a fair interest rate is determined, the General Board calculates the value of each loan and derives a total portfolio value.

Expense Ratios for 2006

Short Term Investment Fund: 0.35%

Stable Value Fund:  0.39%

Inflation Protection Fund: 0.45%

Domestic Bond Fund: 0.46%

Multiple Asset Fund: 0.64%

Balanced Social Values Plus Fund: 0.74%

Domestic Stock Fund: 0.68%

International Stock Fund: 0.77%