Usccb 2q qir 3 0

Second Quarter 2013

United States Conference of Catholic Bishops

Hewitt EnnisKnupp, Inc.10 South Riverside Plaza, Suite 1600Chicago, IL 60606phone: 1-312-715-1700fax: 1-312-715-1952www.hewittennisknupp.com

CONTENTS

1 Long-Term Pool

9 U.S. Equity

17 International Equity

25 Fixed Income

31 Pension Fund

39 Short-Term Pool

43 Appendix

47 Market Environment

57 Investment Policy Statement

(This page left blank intentionally)

Long-Term Pool

Investment ApproachThe Long-Term Pool, as its name implies, represents monies that the Conference does not anticipate spending in the immediate future. Therefore, the Long-Term Pool has along-term, growth-oriented policy of investing approximately 65% in common stocks.

The assets in the Long-Term Pool are invested with Investment Counselors of Maryland (U.S. stocks), State Street Global Advisors (SSgA) S&P 500 Index Portfolio (U.S. stocks),TCW/Metropolitan West Asset Management (bonds), SSgA Barclays Capital Index Portfolio (bonds), the Catholic United Investment Trust (CUIT) International Equity Fund (foreignstocks), and the Aberdeen EAFE Plus Portfolio (foreign stocks).

The policy benchmark, used for the Long-Term Pool, represents what the Long-Term Pool would earn if the allocation among asset classes were in line with the policy and themanagers performed in line with their respective broad market indices.

Performance CommentaryDuring the second quarter of 2013, the Long-Term Pool outperformed its policy benchmark by 0.3 of a percentage point. Over the one year period, the Long-Term Pool gained12.2%, outperforming its policy benchmark by 0.1 of a percentage point. The Total Fund has fared well against its policy benchmark since inception.

During the second quarter, Aberdeen EAFE Plus and TCW/MetWest lagged their respective benchmarks while CUIT International and ICM outperformed.

2

Long-Term Pool As of June 30, 2013 $266.2 Million and 100.0% of Fund

Highlights

Major Markets Return SummaryEnding June 30, 2013

Second Quarter Year-To-Date1 Year Ending

6/30/133 Years Ending



6/30/13S&P 500 Index 2.9 % 13.8 % 20.6 % 18.5 % 7.0 % 7.3 %MSCI EAFE Index -1.0 4.1 18.6 10.0 -0.6 7.7MSCI Emerging Markets -8.1 -9.6 2.9 3.4 -0.4 13.7Barclays Aggregate Bond Index -2.3 -2.4 -0.7 3.5 5.2 4.5

3


Long-Term Pool Summary

4


Long-Term Pool PerformanceBenchmark: Policy Benchmark

5


Trailing Period Performance

Ending June 30, 2013 Inception

Market Value($)

% ofPortfolio Policy %

2013Q2(%)

YTD(%)

1 Yr(%)

3 Yrs(%)

5 Yrs(%)

10 Yrs(%)

Return(%) Since

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Long-Term Pool 266,176,090 100.0 100.0 0.6 6.3 12.2 11.4 5.5 6.4 10.5 Dec-80Policy Benchmark 0.3 6.2 12.1 12.0 5.7 6.5 10.1 Dec-80

U.S. Equity 143,796,014 54.0 50.0

ICM Common Stock 50,508,613 19.0 35.0 3.8 13.3 17.4 13.7 5.3 6.6 11.6 Dec-80S&P 500 Index 2.9 13.8 20.6 18.5 7.0 7.3 10.9 Dec-80

SSgA S&P 500 Index Portfolio 93,287,401 35.0 65.0 2.8 13.5 20.2 18.3 7.3 7.7 10.2 Dec-86S&P 500 Index 2.9 13.8 20.6 18.5 7.0 7.3 9.9 Dec-86

International Equity 38,997,571 14.7 15.0

CUIT International Equity 19,167,528 7.2 -0.3 2.8 16.8 10.7 -1.2 5.9 5.4 Mar-96MSCI EAFE Index -1.0 4.1 18.6 10.0 -0.6 7.7 4.3 Mar-96

Aberdeen EAFE Plus 19,830,043 7.4 -3.3 0.3 -- -- -- -- 8.0 Jul-12MSCI All Country World ex-U.S. Index -3.1 0.0 -- -- -- -- 12.0 Jul-12

Fixed Income 83,382,505 31.3 35.0

TCW/MetWest 43,404,734 16.3 -2.4 -1.6 3.5 5.8 7.9 6.4 6.8 Sep-98Barclays Aggregate Bond Index -2.3 -2.4 -0.7 3.5 5.2 4.5 5.3 Sep-98

SSgA Barclays Aggregate Bond Index Portfolio 39,977,771 15.0 -2.4 -2.5 -0.8 3.4 5.2 -- 4.8 Feb-05Barclays Aggregate Bond Index -2.3 -2.4 -0.7 3.5 5.2 -- 4.9 Feb-05

XXXXX

6


Calendar Year Performance

2012

(%)2011

(%)2010

(%)2009

(%)2008

(%)2007

(%)2006

(%)2005

(%)2004

(%)2003

(%)_

Long-Term Pool 12.0 0.9 12.1 23.6 -25.8 6.4 12.5 3.9 9.1 21.7Policy Benchmark 12.1 2.1 11.5 20.2 -24.9 6.7 12.7 5.0 9.5 20.6

U.S. Equity

ICM Common Stock 10.2 0.0 10.8 35.4 -34.8 4.4 12.6 2.4 12.5 28.6S&P 500 Index 16.0 2.1 15.1 26.5 -37.0 5.5 15.8 4.9 10.9 28.7

SSgA S&P 500 Index Portfolio 16.0 2.1 15.3 27.4 -36.1 5.7 16.0 5.6 10.4 29.6S&P 500 Index 16.0 2.1 15.1 26.5 -37.0 5.5 15.8 4.9 10.9 28.7

International Equity

CUIT International Equity 19.7 -13.6 14.1 30.6 -46.2 9.7 26.2 6.9 13.2 33.3MSCI EAFE Index 17.3 -12.1 7.8 31.8 -43.4 11.2 26.3 13.5 20.2 38.6

Aberdeen EAFE Plus -- -- -- -- -- -- -- -- -- --MSCI All Country World ex-U.S. Index -- -- -- -- -- -- -- -- -- --

Fixed Income

TCW/MetWest 10.0 5.4 12.2 17.5 -1.6 8.0 5.2 2.6 5.2 10.9Barclays Aggregate Bond Index 4.2 7.8 6.5 5.9 5.2 7.0 4.3 2.4 4.3 4.1

SSgA Barclays Aggregate Bond Index Portfolio 4.1 7.7 6.6 5.9 5.4 6.8 4.2 -- -- --Barclays Aggregate Bond Index 4.2 7.8 6.5 5.9 5.2 7.0 4.3 -- -- --

XXXXX

7


Risk ProfileBenchmark: Policy Benchmark

8


Asset Allocation

U.S. Equity

10

Account InformationAccount Name ICM Common StockAccount Structure Separate AccountInvestment Style ActiveInception Date 12/31/80Account Type US StockBenchmark S&P 500 IndexUniverse

ICM Common Stock As of June 30, 2013 $50.5 Million and 21.8% of Fund

Manager PerformanceBenchmark: S&P 500 Index

Investment ApproachICM's approach to managing stocks is known as a "value" approach, meaning that the manager seeks out stocks expected to perform well because the current price of the stock isdeemed to be lower than what might be considered reasonable given its current financial characteristics. ICM selects and manages 40 to 50 stocks in a typical portfolio that isexpected to perform better than the stock market as a whole, as measured by the S&P 500 Index.

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Risk ProfileBenchmark: S&P 500 Index

Worst PerformersPortfolio Index

Weight % Weight % Return %CIMAREX EN. 1.3% -13.7%FTI CONSULTING 1.6% -12.7%BIG LOTS 1.2% -10.6%INTERNATIONAL BUS.MCHS. 2.3% 1.4% -10.0%APPLE 4.6% 2.6% -9.8%WHITING PTL. 1.9% -9.3%COVIDIEN 0.0% -7.0%SIEMENS SPN.ADR 1:1 0.0% -6.0%NUCOR 1.7% 0.1% -5.3%CH ROBINSON WWD. 1.3% 0.1% -4.7%

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Manager AnalysisBenchmark: S&P 500 Index

Actual $ Actual % US Equity $48,897,227 96.8% Non-US Equity $0 0.0% US Fixed Inc. $0 0.0% Non-US Fixed Inc. $0 0.0% Alternative $0 0.0% Real Estate $0 0.0% Cash $1,611,386 3.2% Other $0 0.0%

Total $50,508,613_

Top Holdings

Weight %

BERKSHIRE HATHAWAY 'B' 4.9%APPLE 4.7%WELLS FARGO & CO 4.1%OCEANEERING 3.7%JP MORGAN CHASE & CO. 3.6%WALT DISNEY 3.4%LOWE'S COMPANIES 3.2%CAPITAL ONE FINL. 3.2%WAL MART STORES 3.1%APTARGROUP 3.1%Total 37.0%

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Best PerformersPortfolio Index

Weight % Weight % Return %WELLPOINT 2.4% 0.2% 24.2%HARMAN INTL.INDS. 2.3% 0.0% 21.8%MICROSOFT 1.6% 1.8% 21.6%CISCO SYSTEMS 1.9% 0.9% 17.4%HOSPIRA 0.9% 0.0% 16.7%CAPITAL ONE FINL. 3.1% 0.3% 14.9%WELLS FARGO & CO 4.0% 1.4% 12.4%INTEL 1.5% 0.8% 12.0%JP MORGAN CHASE & CO. 3.5% 1.4% 11.9%WALT DISNEY 3.3% 0.8% 11.2%

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CharacteristicsPortfolio S&P 500

Number of Holdings 43 500Weighted Avg. Market Cap. ($B) 93.79 102.69Median Market Cap. ($B) 34.72 14.56Price To Earnings 17.48 18.90Price To Book 3.07 3.39Price To Sales 1.85 2.13Return on Equity (%) 19.66 18.36Yield (%) 1.77 2.18Beta 1.04 1.00R-Squared 0.94 1.00

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Sector AttributionBenchmark: S&P 500 Index

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Account InformationAccount Name SSgA S&P 500 Index PortfolioAccount Structure Separate AccountInvestment Style PassiveInception Date 12/31/86Account Type US StockBenchmark S&P 500 IndexUniverse

SSgA S&P 500 Index Portfolio As of June 30, 2013 $93.3 Million and 40.2% of Fund

Manager PerformanceBenchmark: S&P 500 Index

Investment ApproachState Street Global Advisors (SSgA) invests in a broad sample of all stocks of the S&P 500 that are not prohibited by the Conference's socially responsible investment guidelines.SSgA's role is to provide broad diversification while matching the rate of return of the S&P 500 Index. SSgA reported that 7.6% of the S&P 500 Index is excluded from the portfolioas a result of the social screens that are employed.

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SSgA S&P 500 Index Portfolio As of June 30, 2013 $93.3 Million and 40.2% of Fund

Risk ProfileBenchmark: S&P 500 Index



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Investment ApproachThe CUIT International Equity Fund is a socially screened international stock fund established and overseen by Christian Brothers Investment Services (CBIS). Historically, CapitalGuardian, a Los Angeles-based firm, was the sole manager of the CUIT International Fund. Effective April 2, 2001, CBIS added a second investment manager, Jarislowsky FraserLimited, to the CUIT International Fund, with the objective of managing 40% of the Fund. Effective February 1, 2005, Causeway Capital Management replaced Capital Guardian asa manager for the CUIT International Equity Fund with the objective of managing approximately 50% of the Fund. In May of 2007 Principal Global Investors was hired to replaceJarislowsky Fraser Limited. Principal manages approximately 50% of the Fund.

CBIS has decided to allow both managers to extend their portfolio holdings beyond the developed markets of the MSCI EAFE Index and Canada and to selectively invest inemerging markets, subject to a maximum allocation of 15%.

CUIT International Equity As of June 30, 2013 $19.2 Million and 8.3% of Fund

Manager PerformanceBenchmark: MSCI EAFE Index

Account InformationAccount Name CUIT International EquityAccount Structure Commingled FundInvestment Style ActiveInception Date 3/31/96Account Type Non-U.S. Stock - AllBenchmark MSCI EAFE IndexUniverse

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Risk ProfileBenchmark: MSCI EAFE Index

Size DistributionPortfolio

COMPANY SIZE DISTRIBUTIONWeighted Ave. Market Cap. ($B) 41.71Median Market Cap. ($B) 8.66Large Cap. (%) 18.07Medium/Large Cap. (%) 28.46Medium Cap. (%) 29.82Medium/Small Cap. (%) 14.05Small Cap. (%) 9.60

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Actual $ Actual % US Equity $5,745 0.03% Non-US Equity $18,596,849 97.02% US Fixed Inc. $0 0.00% Non-US Fixed Inc. $0 0.00% Alternative $0 0.00% Real Estate $0 0.00% Cash $564,934 2.95% Other $0 0.00%

Total $19,167,528_


Manager AnalysisBenchmark: MSCI EAFE Index

Top Holdings

Weight %

TOYOTA MOTOR 3.4%CASH - USD 2.9%REED ELSEVIER (AMS) 1.7%SIEMENS 1.7%AKZO NOBEL 1.5%KDDI 1.4%NESTLE 'R' 1.4%JGC 1.4%HSBC HOLDINGS 1.3%SAP 1.3%Total 18.0%

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Characteristics

Portfolio MSCI EAFEGross

Number of Holdings 304 908Weighted Avg. Market Cap. ($B) 41.71 54.53Median Market Cap. ($B) 8.66 7.62Price To Earnings 16.38 17.47Price To Book 2.40 2.07Price To Sales 1.53 1.66Return on Equity (%) 15.64 13.49Yield (%) 2.82 3.15Beta 1.03 1.00R-Squared 0.98 1.00

Sector Distribution

Portfolio MSCI EAFEGross

INDUSTRY SECTOR DISTRIBUTION (% Equity)Energy 8.92 6.96Materials 11.45 7.98Industrials 15.83 12.48Consumer Discretionary 12.80 11.71Consumer Staples 10.26 11.76Health Care 6.50 10.49Financials 19.49 25.02Information Technology 4.73 4.57Telecommunications 4.55 5.20Utilities 2.46 3.79

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Manager AnalysisBenchmark: MSCI EAFE Index

Versus MSCI EAFE Gross - Quarter Ending June 30, 2013Manager Index Manager Index

Ending Allocation(USD)

Ending Allocation(USD) Return (USD) Return (USD)

_

Americas Brazil* 0.9% 0.0% -17.2% -18.7%Canada 5.4% 0.0% -6.5% -6.1%Chile* 0.0% 0.0% -15.7% -12.0%Colombia* -- --Mexico* 0.6% 0.0% -3.5% -9.3%Peru* 0.1% 0.0% -15.0% -17.7%United States 0.0% 0.0% 29.1% 0.6%Total-Americas 7.2% 0.0% -7.9% --Europe Austria 0.5% 0.3% 4.8% -2.5%Belgium 0.9% 1.1% -5.3% -4.4%Czech Republic* -- --Denmark 1.1% 1.1% 1.4% -3.9%Finland 0.2% 0.8% -3.7% 1.3%France 7.3% 9.5% 0.2% 3.6%Germany 9.1% 8.7% -2.4% 3.3%Greece 0.0% 0.1% -- -8.4%Hungary* -- --Ireland 1.8% 0.3% 15.2% -1.6%Italy 2.4% 2.0% -0.7% 1.3%Netherlands 4.7% 2.6% -1.6% 2.7%Norway 0.4% 0.8% -14.4% -5.1%Poland* 0.1% 0.0% -9.4% -5.5%Portugal 0.1% 0.2% 0.5% 0.0%Russia* 0.5% 0.0% -9.4% -6.7%Spain 1.1% 2.8% -4.5% 0.0%Sweden 1.8% 3.1% -7.3% -5.2%Switzerland 8.1% 9.2% -3.1% 0.1%United Kingdom 18.7% 21.6% -4.3% -2.2%Total-Europe 58.9% 64.1% -2.5% -0.1%

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Versus MSCI EAFE Gross - Quarter Ending June 30, 2013Manager Index Manager Index



_

AsiaPacific Australia 2.4% 8.0% -18.7% -13.9%China* 1.5% 0.0% -10.2% -7.8%Hong Kong 2.2% 3.0% -9.7% -4.7%India* 0.2% 0.0% -14.1% -9.4%Indonesia* 0.3% 0.0% -5.3% -8.6%Japan 18.2% 22.6% 0.3% 4.4%Korea* 1.8% 0.0% -14.9% -7.8%Malaysia* 0.3% 0.0% 0.1% 1.5%New Zealand 0.4% 0.1% -6.7% -10.4%Philippines* 0.0% 0.0% -24.2% -11.1%Singapore 1.4% 1.7% -5.9% -6.3%Taiwan* 0.8% 0.0% -4.8% -2.3%Thailand* 0.5% 0.0% -0.9% -11.4%Total-AsiaPacific 30.1% 35.4% -4.4% -1.7%Other Egypt* -- --Israel 0.0% 0.5% -- -3.7%Morocco* -- --South Africa* 0.6% 0.0% -9.6% -7.2%Turkey* 0.2% 0.0% -21.9% -17.1%Total-Other 0.8% 0.5% -13.1% -3.7%Totals Developed 88.4% 100.0% -2.9% -0.7%Emerging* 8.6% 0.0% -10.6% --Other 0.0% --Cash 2.9% 0.0%

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Account InformationAccount Name Aberdeen EAFE PlusAccount Structure Commingled FundInvestment Style PassiveInception Date 7/31/12Account Type Non-U.S. Stock - AllBenchmark MSCI All Country World ex-U.S. IndexUniverse

Investment ApproachThe objective of the Aberdeen Delaware Business Trust (DBT) EAFE Plus Ethical Fund is to achieve a total return in excess of the MSCI All Country Ex U.S. Index through investingin a diversified portfolio of international equities while taking into consideration the generally accepted principles of the Catholic Church in selecting investments for the portfolio. Thefund will avoid investing in any companies which conflict with those principles. Typically, most investments will be made in the developed international markets, but up to 30% of thefund may be invested in emerging stock markets as defined by the International Finance Corporation (IFCat any point in time (prior to 2010, the maximum emerging marketsexposure was 20%). The Fund employs a bottom up value driven process, and utilizes 3 major screening criteria: 1) Quality, 2) Price, and 3) Ethical screening metrics.

Aberdeen EAFE Plus As of June 30, 2013 $19.8 Million and 8.6% of Fund

Manager PerformanceBenchmark: MSCI All Country World ex-U.S. Index

Size DistributionPortfolio

COMPANY SIZE DISTRIBUTIONWeighted Ave. Market Cap. ($B) 41.59Median Market Cap. ($B) 28.41Large Cap. (%) 17.77Medium/Large Cap. (%) 53.69Medium Cap. (%) 18.72Medium/Small Cap. (%) 5.72Small Cap. (%) 4.10

Actual $ Actual % US Equity $0 0.00% Non-US Equity $19,278,232 97.22% US Fixed Inc. $0 0.00% Non-US Fixed Inc. $0 0.00% Alternative $0 0.00% Real Estate $0 0.00% Cash $551,830 2.78% Other $0 0.00%

Total $19,830,063_

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Manager AnalysisBenchmark: MSCI All Country World ex-U.S. Index

Top Holdings

Weight %

TAIWAN SEMICON.SPN.ADR 1:5 4.1%BRITISH AMERICAN TOBACCO 3.9%ZURICH INSURANCE GROUP 3.6%VODAFONE GROUP 3.6%CENTRICA 3.5%SAMSUNG ELTN.PREF. 3.2%TENARIS ADS. 1:2 3.0%STANDARD CHARTERED 2.9%SHIN-ETSU CHEMICAL 2.8%CASH - USD 2.8%Total 33.2%

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Sector Distribution

Portfolio MSCI ACWIex USA

INDUSTRY SECTOR DISTRIBUTION (% Equity)Energy 9.03 9.33Materials 7.57 8.63Industrials 12.72 10.74Consumer Discretionary 2.12 10.49Consumer Staples 13.69 10.66Health Care 2.52 7.98Financials 23.68 26.42Information Technology 10.67 6.57Telecommunications 9.75 5.62Utilities 5.47 3.53

Characteristics

PortfolioMSCI

ACWI exUSA

Number of Holdings 52 1,823Weighted Avg. Market Cap. ($B) 41.59 48.02Median Market Cap. ($B) 28.41 6.13Price To Earnings 16.36 17.09Price To Book 2.40 2.20Price To Sales 2.21 1.83Return on Equity (%) 16.43 15.05Yield (%) 3.44 3.07Beta (holdings; global) 0.96 0.96R-Squared 1.00

Versus MSCI ACWI ex USA - Quarter Ending June 30, 2013Manager Index Manager Index



_

AsiaPacific Australia 1.4% 5.7% -1.9% -13.9%China* 0.0% 4.0% 0.8% -6.5%Hong Kong 3.5% 2.1% -2.0% -4.7%India* 0.0% 1.5% -- -5.5%Indonesia* 0.0% 0.7% -- -5.8%Japan 11.1% 16.0% 0.2% 4.4%Korea* 3.2% 3.2% -1.7% -10.0%Malaysia* 0.0% 0.9% -- 6.1%New Zealand 0.0% 0.1% -- -10.4%Philippines* 0.0% 0.2% -- -8.2%Singapore 6.9% 1.2% -2.9% -6.3%Taiwan* 5.8% 2.6% 8.6% 1.6%Thailand* 0.0% 0.6% -- -7.3%Total-AsiaPacific 31.9% 38.8% 0.5% -3.0%Other Egypt* 0.0% 0.1% -- -7.3%Israel 0.0% 0.4% -- -3.7%Morocco* 0.0% 0.0% -- -2.7%South Africa* 1.0% 1.6% -- -7.2%Turkey* 0.0% 0.4% -- -15.3%Total-Other 1.0% 2.4% -- -8.2%Totals Developed 80.8% 78.0% -3.1% -1.4%Emerging* 16.4% 22.0% -4.9% -7.9%Other 0.0% --Cash 2.8% 0.0%

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Versus MSCI ACWI ex USA - Quarter Ending June 30, 2013Manager Index Manager Index



_

Americas Brazil* 3.9% 2.5% -21.2% -17.2%Canada 5.2% 7.2% -5.5% -7.3%Chile* 0.0% 0.4% -- -14.6%Colombia* 0.0% 0.3% -- -13.1%Mexico* 2.5% 1.2% -8.4% -10.8%Peru* 0.0% 0.1% -- -27.4%United States -- --Total-Americas 11.6% 11.7% -12.1% -10.6%Europe Austria 0.0% 0.2% -- -2.5%Belgium 0.0% 0.8% -- -4.4%Czech Republic* 0.0% 0.1% -- -6.5%Denmark 0.0% 0.8% -- -3.9%Finland 0.0% 0.5% -- 1.3%France 7.1% 6.7% -1.8% 3.6%Germany 1.5% 6.1% 1.6% 3.3%Greece 0.0% 0.1% -- -8.4%Hungary* 0.0% 0.1% -- 13.1%Ireland 0.0% 0.2% -- -1.6%Italy 2.8% 1.4% -6.2% 1.3%Luxembourg 3.0% 0.0% 0.1% -2.9%Netherlands 0.0% 1.8% -- 2.7%Norway 0.0% 0.6% -- -5.1%Poland* 0.0% 0.3% -- -4.5%Portugal 0.0% 0.1% -- 0.0%Russia* 0.0% 1.3% -- -8.2%Spain 1.6% 2.0% -3.3% 0.0%Sweden 4.7% 2.2% -6.6% -5.2%Switzerland 6.1% 6.5% -2.2% 0.1%United Kingdom 26.0% 15.3% -3.9% -2.2%Total-Europe 52.7% 47.1% -3.4% -0.4%

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Manager AnalysisBenchmark: MSCI All Country World ex-U.S. Index

Fixed Income

Investment ApproachTCW/Metropolitan West Asset Management (MetWest) uses all sectors of the broad bond market, including high yield and foreign securities, but is limited to U.S.dollar-denominated securities such as Yankee and eurodollar bonds. The manager makes limited use of derivative securities for hedging purposes.The manager controls interest rate risk in client portfolios by managing the portfolio's duration within one year of the Barclays Aggregate Bond Index.

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Account InformationAccount Name TCW/MetWestAccount Structure Separate AccountInvestment Style ActiveInception Date 9/30/98Account Type U.S. Fixed IncomeBenchmark Barclays Aggregate Bond IndexUniverse

TCW/MetWest As of June 30, 2013 $43.4 Million and 18.7% of Fund

Manager PerformanceBenchmark: Barclays Aggregate Bond Index

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Risk ProfileBenchmark: Barclays Aggregate Bond Index

28

Quality Ratings Characteristics


Manager AnalysisBenchmark: Barclays Aggregate Bond Index

Sectors

29

Investment ApproachThe objective of the State Street Global Advisors (SSgA) Socially Responsible Aggregate Bond Fund is to match the total rate of return of the Barclays Aggregate Bond Index duringa calendar year. The Fund invests in a well-diversified portfolio that is representative of the domestic investment grade bond market. The portfolio is comprised of the ScreenedCredit Index Common Trust Fund, Passive U.S. Government Bond Index Common Trust Fund, Asset-Backed/Commercial Mortgage Backed Index Common Trust Fund, and theMortgage Backed Index Common Trust Fund. The weights of each underlying fund are rebalanced at the end of every month to match the weights of the Aggregate Index.

SSgA Barclays Aggregate Bond Index Portfolio As of June 30, 2013 $40.0 Million and 17.2% of Fund

Manager PerformanceBenchmark: Barclays Aggregate Bond Index

Account InformationAccount Name SSgA Barclays Aggregate Bond Index PortfolioAccount Structure Separate AccountInvestment Style PassiveInception Date 2/28/05Account Type U.S. Fixed IncomeBenchmark Barclays Aggregate Bond IndexUniverse

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SSgA Barclays Aggregate Bond Index Portfolio As of June 30, 2013 $40.0 Million and 17.2% of Fund

Risk ProfileBenchmark: Barclays Aggregate Bond Index

Pension Fund

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Pension Fund As of June 30, 2013 $50.27 Million and 100.0% of Fund

Highlights

Performance CommentaryThe Pension Fund outperformed its policy benchmark by 0.4 percentage points during the second quarter. Over the one year period, the Pension Fund matched its policybenchmark.

The relatively small size of the Pension Fund puts constraints on the number of securities that its underlying managers can hold in their respective portfolios. At times, differences inholdings and weightings may cause the Pension Fund portfolios to produce returns that slightly differ from those corresponding portfolios in the Long-Term Pool.

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Pension Fund Summary

34


Pension Fund PerformanceBenchmark: Policy Benchmark

35


Market Value($)

% ofPortfolio Policy %

2013Q2(%)

YTD(%)

1 Yr(%)

3 Yrs(%)

5 Yrs(%)

10 Yrs(%)

Return(%) Since

_

Pension Fund 50,268,668 100.0 100.0 0.7 6.3 12.1 11.3 5.5 6.4 8.7 Jan-89Policy Benchmark 0.3 6.2 12.1 12.0 5.7 6.5 8.5 Jan-89

U.S. Equity 27,120,460 54.0 50.0

ICM Common Stock 9,061,277 18.0 3.8 13.3 17.5 13.9 5.3 6.7 10.2 Dec-90S&P 500 Index 2.9 13.8 20.6 18.5 7.0 7.3 9.5 Dec-90

SSgA S&P 500 Index Portfolio 18,059,184 35.9 2.8 13.5 20.1 18.2 7.3 7.4 8.1 Oct-95S&P 500 Index 2.9 13.8 20.6 18.5 7.0 7.3 7.9 Oct-95

International Equity 7,541,167 15.0 15.0

CUIT International Equity 4,113,810 8.2 -0.3 2.8 16.8 10.7 -1.1 6.0 5.4 Mar-96MSCI EAFE Index -1.0 4.1 18.6 10.0 -0.6 7.7 4.3 Mar-96

Aberdeen EAFE Plus 3,427,357 6.8 -3.3 0.3 -- -- -- -- 8.0 Jul-12MSCI All Country World ex-U.S. Index -3.1 0.0 -- -- -- -- 12.0 Jul-12

Fixed Income 15,607,041 31.0 35.0

TCW/MetWest 8,590,546 17.1 -2.1 -1.4 3.8 5.7 8.2 6.7 6.7 Sep-98Barclays Aggregate Bond Index -2.3 -2.4 -0.7 3.5 5.2 4.5 5.3 Sep-98

SSgA Barclays Aggregate Bond Index Portfolio 7,016,495 14.0 -0.8 -1.0 0.8 4.0 5.4 -- 4.9 Feb-05Barclays Aggregate Bond Index -2.3 -2.4 -0.7 3.5 5.2 -- 4.9 Feb-05

XXXXX


Trailing Period Performance

36

2012

(%)2011

(%)2010

(%)2009

(%)2008

(%)2007

(%)2006

(%)2005

(%)2004

(%)2003

(%)_

Pension Fund 11.6 0.9 11.1 24.3 -25.2 6.4 12.4 3.7 9.5 21.2Policy Benchmark 12.1 2.1 11.5 20.2 -24.9 6.7 12.7 5.0 9.5 20.6

U.S. Equity

ICM Common Stock 10.2 0.3 10.9 35.5 -35.4 4.4 12.5 3.1 14.1 27.5S&P 500 Index 16.0 2.1 15.1 26.5 -37.0 5.5 15.8 4.9 10.9 28.7

SSgA S&P 500 Index Portfolio 15.4 2.2 15.4 27.3 -35.9 5.5 15.7 4.8 10.1 28.8S&P 500 Index 16.0 2.1 15.1 26.5 -37.0 5.5 15.8 4.9 10.9 28.7


CUIT International Equity 19.7 -13.6 14.1 30.6 -46.3 9.5 27.7 6.8 13.2 32.1MSCI EAFE Index 17.3 -12.1 7.8 31.8 -43.4 11.2 26.3 13.5 20.2 38.6

Aberdeen EAFE Plus -- -- -- -- -- -- -- -- -- --MSCI All Country World ex-U.S. Index -- -- -- -- -- -- -- -- -- --

Fixed Income

TCW/MetWest 9.7 6.0 12.4 18.2 -0.5 7.9 5.2 2.5 5.2 11.7Barclays Aggregate Bond Index 4.2 7.8 6.5 5.9 5.2 7.0 4.3 2.4 4.3 4.1

SSgA Barclays Aggregate Bond Index Portfolio 4.1 7.8 6.4 5.7 5.2 6.8 4.1 -- -- --Barclays Aggregate Bond Index 4.2 7.8 6.5 5.9 5.2 7.0 4.3 -- -- --

XXXXX


Calendar Year Performance

37


Risk ProfileBenchmark: Policy Benchmark

38


Asset Allocation

Short-Term Pool

40

Short-Term Pool As of June 30, 2013 $4.0 Million* and 100.0% of Fund

Short-Term Pool PerformanceBenchmark: Hewitt EnnisKnupp STIF Index

41


Market Value($)

% ofPortfolio

2013Q2(%)

YTD(%)

1 Yr(%)

3 Yrs(%)

5 Yrs(%)

10 Yrs(%)

Return(%) Since

_

Short-Term Pool 542,568 100.0 0.0 0.0 0.1 0.0 0.3 1.8 5.3 Dec-80Hewitt EnnisKnupp STIF Index 0.0 0.0 0.1 0.1 0.3 1.8 5.2 Dec-80

XXXXX

Ending June 30, 20132012

(%)2011

(%)2010

(%)2009

(%)2008

(%)2007

(%)2006

(%)2005

(%)2004

(%)2003

(%)_

Short-Term Pool 0.0 0.1 0.1 0.4 2.8 5.4 5.1 3.1 1.2 1.0Hewitt EnnisKnupp STIF Index 0.1 0.1 0.1 0.4 2.6 5.3 5.0 2.8 1.2 1.2

XXXXX

Short-Term Pool As of June 30, 2013 $4.0 Million* and 100.0% of Fund

Short-Term Pool PerformanceBenchmark: Hewitt EnnisKnupp STIF Index


Appendix

44

Account Fee Schedule Market ValueAs of 6/30/2013 % of Portfolio Estimated Annual

Fee ($)Estimated Annual

Fee (%)_

U.S. Equity No Fee $143,796,014 54.0% -- --

ICM Common Stock 0.42% of Assets $50,508,613 19.0% $213,651 0.42%

SSgA S&P 500 Index Portfolio 0.07% of Assets $93,287,401 35.0% $67,167 0.07%

International Equity No Fee $38,997,571 14.7% -- --

CUIT International Equity 1.08% of Assets $19,167,528 7.2% $207,009 1.08%

Aberdeen EAFE Plus 0.80% of Assets $19,830,043 7.4% $158,640 0.80%

Fixed Income No Fee $83,382,505 31.3% -- --

TCW/MetWest 0.30% of Assets $43,404,734 16.3% $131,950 0.30%

SSgA Barclays Aggregate Bond Index Portfolio 0.11% of Assets $39,977,771 15.0% $43,976 0.11%

Investment Management Fee $266,176,090 100.0% $822,394 0.31%XXXXX

Long-Term Pool

Fee Schedule

45

Account Fee Schedule Market ValueAs of 6/30/2013 % of Portfolio Estimated Annual

Fee ($)Estimated Annual

Fee (%)_

U.S. Equity No Fee $27,120,460 54.0% -- --

ICM Common Stock 0.44% of Assets $9,061,277 18.0% $39,688 0.44%

SSgA S&P 500 Index Portfolio 0.07% of Assets $18,059,184 35.9% $13,003 0.07%

International Equity No Fee $7,541,167 15.0% -- --

CUIT International Equity 1.08% of Assets $4,113,810 8.2% $44,429 1.08%

Aberdeen EAFE Plus 0.80% of Assets $3,427,357 6.8% $27,419 0.80%

Fixed Income No Fee $15,607,041 31.0% -- --

TCW/MetWest 0.35% of Assets $8,590,546 17.1% $30,067 0.35%

SSgA Barclays Aggregate Bond Index Portfolio 0.11% of Assets $7,016,495 14.0% $7,718 0.11%

Investment Management Fee $50,268,668 100.0% $162,324 0.32%XXXXX

Pension Plan

Fee Schedule

46

Market Returns

Second Annualized Periods Ending 6/30/13Quarter 1-Year 3-Year 5-Year 10-Year 15-Year

Domestic Stock Indices:Dow Jones US Total Stock Index 2.8 21.5 18.7 7.4 8.1 4.8S&P 500 Index 2.9 20.6 18.5 7.0 7.3 4.2Russell 3000 Index 2.7 21.5 18.6 7.2 7.8 4.7Russell 1000 Value Index 3.2 25.3 18.5 6.7 7.8 5.5Russell 1000 Growth Index 2.1 17.1 18.7 7.5 7.4 3.1Russell MidCap Value Index 1.7 27.7 19.5 8.9 10.9 8.6Russell MidCap Growth Index 2.9 22.9 19.5 7.6 9.9 6.3Russell 2000 Value Index 2.5 24.8 17.3 8.6 9.3 7.8Russell 2000 Growth Index 3.7 23.7 20.0 8.9 9.6 4.8Domestic Bond Indices:Barclays Capital Aggregate Index -2.3 -0.7 3.5 5.2 4.5 5.5Barclays Capital Govt/Credit Index -2.5 -0.6 3.9 5.3 4.4 5.6Barclays Capital Long Govt/Credit Index -6.1 -4.7 7.0 8.5 6.2 7.0Barclays Capital 1-3 Year Govt/Credit Index -0.1 0.7 1.3 2.5 2.9 4.1Barclays Capital U.S. MBS Index -2.0 -1.1 2.5 4.8 4.7 5.5Barclays Capital High Yield Index -1.4 9.5 10.7 10.9 8.9 6.9Barclays Capital Universal Index -2.4 0.2 4.1 5.5 4.8 5.7Real Estate Indices:NCREIF Property Index -- -- -- -- -- --NCREIF ODCE Index 3.7 11.1 13.9 -1.1 6.0 6.9Dow Jones Real Estate Securities Index -1.3 7.7 18.0 6.8 10.8 9.6FTSE NAREIT US Real Estate Index -2.1 10.2 18.5 7.7 11.0 9.7Foreign/Global Stock Indices:MSCI All Country World Index -0.4 16.6 12.4 2.3 7.6 4.0MSCI All Country World IMI -0.5 17.1 12.6 2.8 8.0 4.5MSCI All Country World ex-U.S. Index -3.1 13.6 8.0 -0.8 8.6 4.6MSCI All Country World ex-U.S. IMI -3.3 13.9 8.1 -0.4 9.0 4.9MSCI All Country World ex-U.S. Small Cap Index -4.4 15.9 9.2 2.6 11.3 7.4MSCI EAFE Index -1.0 18.6 10.0 -0.6 7.7 3.6MSCI EAFE IMI -1.2 18.9 10.3 -0.3 8.0 4.0MSCI EAFE Index (in local currency) 1.2 24.9 9.0 1.2 6.1 2.1MSCI Emerging Markets IMI -8.0 3.7 3.4 0.2 13.8 8.7Foreign Bond Indices:Citigroup World Gov't Bond Index -3.4 -5.7 2.6 2.6 4.8 5.3Citigroup Hedged World Gov't Bond Index -1.3 3.0 3.1 4.5 4.0 4.9Cash Equivalents:Treasury Bills (30-Day) 0.0 0.0 0.0 0.1 1.3 2.1Hewitt EnnisKnupp STIF Index 0.0 0.2 0.2 0.5 2.0 2.8Inflation Index:Consumer Price Index 0.3 1.8 2.3 1.3 2.4 2.4

To protect the confidential and proprietary information included in this material, it

may not be disclosed or provided to any third parties without the approval of Aon

Hewitt.

Market Environment Second Quarter 2013

2

Market Highlights

2.91% 3.09%

-0.98%

-8.08%

-2.33%

-5.71% -6.33%

-1.43%

-9.45%

20.60%

24.21%

18.62%

2.87%

-0.67%

-8.18%

-1.99%

9.50%

-8.01%

-15%

-10%

-5%

0%

5%

10%

15%

20%

25%

30%

S&P 500 Russell 2000 MSCI EAFE MSCI EmergingMarkets

BarclaysAggregate

Barclays LongGov't

Barclays LongCredit

Barclays HighYield

Dow Jones-UBSCommodity

SHORT TERM RETURNS AS OF 06/30/2013

Second Quarter 2013 One-Year

Source: Russell, MSCI, Barclays, DJ-UBS

7.01% 8.77%

-0.63% -0.43%

5.20% 7.50%

9.15% 10.94%

-11.61%

7.30% 9.53%

7.67%

13.66%

4.53% 6.08% 6.25%

8.91%

2.39%

-15%

-10%

-5%

0%

5%

10%

15%

S&P 500 Russell 2000 MSCI EAFE MSCI EmergingMarkets

BarclaysAggregate

Barclays LongGov't

Barclays LongCredit

Barclays HighYield

Dow Jones-UBSCommodity

LONG TERM ANNUALIZED RETURNS AS OF 06/30/2013

Five-Year Ten-Year

Source: Russell, MSCI, Barclays, DJ-UBS

3

Market Highlights

Returns of the Major Capital Markets

Periods Ending 06/30/2013

Second Quarter

Year-to- Date 1-Year 3-Year1 5-Year1 10-Year1

Equity

MSCI All Country World IMI -0.47% 6.40% 17.08% 12.60% 2.79% 8.02%

MSCI All Country World -0.42% 6.05% 16.57% 12.36% 2.30% 7.59%

Dow Jones U.S. Total Stock Market 2.79% 14.18% 21.46% 18.70% 7.41% 8.07%

Russell 3000 2.69% 14.06% 21.46% 18.63% 7.25% 7.81%

S&P 500 2.91% 13.82% 20.60% 18.45% 7.01% 7.30%

Russell 2000 3.09% 15.86% 24.21% 18.67% 8.77% 9.53%

MSCI All Country World ex-U.S. IMI -3.27% 0.18% 13.91% 8.13% -0.41% 8.93%

MSCI All Country World ex-U.S. -3.12% -0.04% 13.63% 7.99% -0.80% 8.62%

MSCI EAFE -0.98% 4.11% 18.62% 10.04% -0.63% 7.67%

MSCI EAFE (100% Hedged) 0.00% 8.79% 20.96% 5.91% -1.23% 3.84%

MSCI EAFE (Local Currency) 1.21% 11.01% 24.93% 8.97% 1.16% 6.07%

MSCI Emerging Markets -8.08% -9.57% 2.87% 3.38% -0.43% 13.66%

Fixed Income

Barclays Global Aggregate -2.78% -4.82% -2.17% 3.55% 3.68% 4.79%

Barclays Aggregate -2.33% -2.45% -0.67% 3.53% 5.20% 4.53%

Barclays Long Gov't -5.71% -7.84% -8.18% 6.18% 7.50% 6.08%

Barclays Long Credit -6.33% -8.01% -1.99% 7.55% 9.15% 6.25%

Barclays Long Gov't/Credit -6.11% -7.97% -4.69% 7.01% 8.50% 6.22%

Barclays US TIPS -7.05% -7.39% -4.77% 4.63% 4.40% 5.19%

Barclays High Yield -1.43% 1.42% 9.50% 10.75% 10.94% 8.91%

SSB Non-U.S. WGBI -3.44% -7.14% -5.72% 2.57% 2.55% 4.78%

JP Morgan EMBI Global (Emerging Markets) -6.06% -8.22% 1.25% 7.85% 8.63% 8.85%

Commodities

Dow Jones-UBS Commodity -9.45% -10.47% -8.01% -0.26% -11.61% 2.39%

Goldman Sachs Commodity -5.93% -5.41% 2.04% 4.73% -15.22% 1.41%

Hedge Funds

HFRI Fund-Weighted Composite2 -0.02% 3.59% 8.29% 4.92% 2.54% 6.17%

HFRI Fund of Funds2 -0.03% 3.28% 7.18% 2.97% -0.63% 3.44%

Real Estate

NAREIT U.S. Equity REITS -1.57% 6.49% 9.42% 18.18% 7.57% 10.88%

NCREIF ODCE3 3.91% 6.71% 12.24% 14.98% -0.14% 6.95%

Private Equity

Thomson Reuters VentureXpert4 3.33% 13.18% 13.18% 13.25% 4.99% 13.16%

Infrastructure

Macquarie Global Infrastructure - North America -2.94% 8.71% 9.42% 17.01% 4.93% 11.08%

MSCI Indices and NCREIF ODCE show net retuns.

MSCI EAFE (100% Hedged) shows price return.

All other indices show total returns. 1 Periods are annualized. 2 Latest 5 months of HFR data are estimated by HFR and may change in the future. 3 Second quarter results are preliminary.

4 Benchmark is as of 12/31/2012.

4

Global Equity Markets

Global equity markets were volatile over the quarter. Members of the Federal Reserve began to openly discuss tapering QE in

the second half of the year, triggering weakness in U.S. equity prices towards the end of the quarter. Continued concerns

around the strength of the economic recovery outside of the United Stated negatively impacted international equity markets.

The USA, Europe ex-UK, and Japan were the only markets to post positive, albeit muted, returns.

Japan proved to be the best performing region as the improving trend in Japanese economic data continued. The worst

performing region was Pacific ex-Japan IMI.

-0.47% -3.27%

2.59%

-1.89%

3.40%

-7.93%

-3.10%

0.46%

-11.56%

-8.01%

17.08% 13.91%

20.57%

13.57%

21.28%

2.93%

13.35%

23.27%

11.27%

3.66%

-20%

-10%

0%

10%

20%

30%

40%

50%

ACWI IMI 50.8%ACWI ex-U.S.

IMI

49.2%USA IMI

7.8%UK IMI

8.3%Japan IMI

3.8%Canada IMI

0.2%Israel IMI

14.9%Europe ex-

UK IMI

4.6%Pacific ex-Japan IMI

11.2%Emerging

Markets IMI

GLOBAL MSCI IMI INDEX RETURNS AS OF 06/30/2013

Second Quarter 2013 One-Year

Source: MSCI

5

Global Equity Markets

The two exhibits on this slide illustrate the percentage that

each country/region represents of the global equity market

as measured by the MSCI All Country World IMI Index and

the MSCI All Country World ex-U.S. IMI Index.

UK 15.3%

Canada 7.4%

Pacific ex-Japan 9.1%

Japan 16.4%

Europe ex-UK 29.3%

Israel 0.4%

Latin America 4.2%

Asia 14.2%

Eastern Europe, Middle East &

Africa 3.7%

Emerging Markets 22.1%

MSCI ALL COUNTRY WORLD EX-U.S. IMI INDEX GEOGRAPHIC ALLOCATION AS OF 06/30/2013

Source: MSCI

6

U.S. Equity Markets

The first quarter rally extended into the first half of Q2. However, mid-May announcements by the Fed on the potential for

tapering its QE program caused the markets to give up most of the gains accumulated up to that time in 2013.

The Russell 3000 rose 2.69% during the quarter and returned 21.46% over the one-year period.

During the second quarter, the Consumer Discretionary, Financials, Healthcare, and Industrials sectors were the best

performing sectors, posting returns of 7.27%, 5.18%, 4.06%, and 2.18%, respectively. The Materials and Utilities sectors were

the worst performing sectors, producing returns of -2.73% and -2.11%, respectively.

Overall, small cap outperformed both mid cap and large cap modestly during the second quarter. Value outperformed growth in

the large cap sectors but growth prevailed over value in the small- and mid-cap sectors.

2.69% 3.92%

1.74% 1.65% 2.87% 2.47%

3.74%

21.46%

24.29%

14.85%

27.65%

22.88% 24.77%

23.67%

0%

10%

20%

30%

40%

50%

Russell 3000 33.1%Large Value

31.3%Large Growth

15.0%Medium Value

12.8%Medium Growth

4.0%Small Value

3.8%Small Growth

RUSSELL STYLE RETURNS AS OF 06/30/2013

Second Quarter 2013

One-Year

Source: Russell Indexes

2.69%

7.27%

-0.84%

0.97%

5.18% 4.06% 2.18% 1.49%

-2.73%

1.99%

-2.11%

21.46%

33.83%

17.53% 18.38%

31.17%

27.40% 25.20%

8.72%

13.08% 13.08%

8.82%

-10%

0%

10%

20%

30%

40%

50%

Russell 3000 13.1%Cons. Disc.

9.6% Energy

9.3%Cons. Stap.

17.7%Financials

12.4%Healthcare

11.3% Industrials

17.1%IT

3.7%Materials

2.5%Telecomms

3.3%Utilities

RUSSELL GICS SECTOR RETURNS AS OF 06/30/2013

Second Quarter 2013

One-Year

Source: Russell Indexes

7

U.S. Fixed Income Markets

The Barclays Aggregate Bond Index returned -2.32% in the second quarter as bond yields were pushed higher on comments made by the Federal Reserve.

Asset-backed securities was the strongest performing sector, returning -0.80%.

In the investment grade market, higher quality bonds outperformed lower quality bonds.

High yield bonds marginally outperformed investment grade bonds.

From a maturity perspective, shorter term bonds outperformed, with the 1-3 yr. and 3-5 yr. posting returns of -0.17% and -1.38%, respectively, during the second quarter.

-1.91% -2.76%

-3.27% -3.87%

-1.44% -1.28% -0.58%

0.95%

1.97%

9.49%

-6%

-4%

-2%

0%

2%

4%

6%

8%

10%

12%

Aaa Aa A Baa High Yield

BARCLAYS AGGREGATE RETURNS BY QUALITY AND HIGH YIELD RETURNS AS OF 06/30/2013

Second Quarter 2013

One-Year

Source: Barclays Live

-0.17%

-1.38%

-2.40%

-3.84%

-5.96%

0.68%

0.11%

-0.15%

-1.02%

-4.55%

-7%

-6%

-5%

-4%

-3%

-2%

-1%

0%

1%

2%

1-3 Yr. 3-5 Yr. 5-7 Yr. 7-10 Yr. >10 Yr.

BARCLAYS AGGREGATE RETURNS BY MATURITY AS OF 06/30/2013

Second Quarter 2013

One-Year


8

U.S. Fixed Income Markets

The Treasury yield curve steepened during the quarter; the intermediate (1 to 10 years) and long-term segments of the yield

curve rose.

The 10-year U.S. Treasury yield ended the quarter at a yield of 2.52%, roughly 65 basis points higher than its level at the

beginning of the quarter.

10-year TIPS yields broke into positive territory for the first time since the second half of 2011; 10-year TIPS yield rose 117

basis points to 0.53% over the quarter.

0.0%

0.5%

1.0%

1.5%

2.0%

2.5%

3.0%

3.5%

4.0%

0 5 10 15 20 25 30

Maturity (Years)

U.S. TREASURY YIELD CURVE

06/30//2012

3/31/2013

6/30/2013

Source: U.S. Department of Treasury

-2.0%

-1.0%

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

Jun 03 Jun 04 Jun 05 Jun 06 Jun 07 Jun 08 Jun 09 Jun 10 Jun 11 Jun 12 Jun 13

U.S. 10-YEAR TREASURY AND TIPS YIELDS 10Y TIPS Yield

10Y Treasury Yield

Source: U.S. Department of Treasury

9

European Fixed Income Markets

Q2 of 2013 brought the sixth straight negative quarter of GDP for the Eurozone, making the current recession the longest on

record for the bloc. Acknowledging the impact of lower than expected economic growth on structural budget reform, the

European Commission extended the deadline for half a dozen states that are working on reducing their excessive budget

deficits to rein in those deficits.

Spreads remained constant during the quarter.

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

Jun

08

Au

g 0

8

Oct

08

Dec

08

Feb

09

Ap

r 0

9

Jun

09

Au

g 0

9

Oct

09

Dec

09

Feb

10

Ap

r 1

0

Jun

10

Au

g 1

0

Oct

10

Dec

10

Feb

11

Ap

r 1

1

Jun

11

Au

g 1

1

Oct

11

Dec

11

Feb

12

Ap

r 1

2

Jun

12

Au

g 1

2

Oct

12

Dec

12

Feb

13

Ap

r 1

3

Jun

13

EUROZONE PERIPHERAL BOND SPREADS (10-YEAR SPREADS OVER GERMAN BUNDS)

Spain Italy

Portugal Greece

Ireland

Source: DataStream

10

Credit Spreads

Credit spreads rose across all markets during the quarter.

The Global Emerging Markets segment experienced the largest increase in spreads during the quarter.

As of June 30, 2013, credit spreads across most segments were lower relative to a year ago; the sole exception was Long Gov’t, for which the credit spread rose by 1 basis point.

Spread (bps) 6/30/2013 3/31/2013 6/30/2012 Quarterly Change (bps) 1-Year Change (bps)

U.S. Aggregate 61 56 77 5 -16

Long Gov't 6 4 5 2 1

Long Credit 198 183 228 15 -30

Long Gov't/Credit 124 113 130 11 -6

MBS 60 58 76 2 -16

CMBS 150 133 235 17 -85

ABS 58 49 59 9 -1

Corporate 152 139 199 13 -47

High Yield 492 457 615 35 -123

Global Emerging Markets 345 287 408 58 -63


UNITED STATES CONFERENCE OF CATHOLIC BISHOPS

INVESTMENT POLICY FOR THE

LONG-TERM INVESTMENT POOL

(With all revisions through July 31, 2012)

Introduction

The purpose of these guidelines is to establish the investment policy for the management of the assets of

the Long-Term Investment Pool (the Pool) of the United States Conference of Catholic Bishops.

Distinction of Responsibilities

The Conference’s Committee on Budget and Finance assumes the responsibility for the development,

review and monitoring of the investment policy. This responsibility includes (1) determining acceptable

levels of market risk, (2) determining the allocation of assets among common stock, fixed income

instruments and such other types of investments as the Committee determines are appropriate and (3)

selection and review of external investment managers.

The investment managers appointed to execute the policy shall invest the Pool’s assets in accordance with

the policy and their judgments concerning relative investment values. In particular, the investment

managers are accorded full discretion, within policy limits, to (1) select individual securities, (2) adjust the

maturity mix, where applicable, and (3) diversify the Pool's assets. As an overriding principle, the

investment managers shall not invest in securities deemed inappropriate by the Conference and indicated

as such by a list provided and periodically updated by the Conference.

Allocation of Assets

It is the Committee's policy to invest the Long-Term Pool’s assets in the following proportions:

Target Range

U.S. Stock

50%

46-54%

Foreign Stock

15%

13-17%

Total Stock

65%

61-69%

Fixed Income

35%

31-39%

Ordinary cash flows will be used to maintain the allocation as close as practical to the normal allocation. If

cash flows are insufficient to maintain the allocation within the permissible ranges as of any calendar

quarter-end, the Conference's finance staff shall transfer balances as necessary between stocks and fixed

income securities to bring the allocation back within the allowable ranges.

For purposes of asset allocation review, any cash held in the common stock managers’ portfolios will be

counted as common stock.

Diversification

The Long-Term Investment Pool is to be broadly diversified to reduce the impact of large losses in individual

investments in a manner that is in keeping with fiduciary standards. To further this end, the Conference will

use multiple investment managers and a common stock indexed portfolio.

Proxy Voting

The Committee on Budget and Finance delegates the responsibility for voting proxies to the individual

investment managers employed to manage assets. The Committee expects proxies to be voted vigorously

and in the best interests of the Conference and in a manner consistent with the teachings of the Church.

Liquidity

Investment managers employed are to assume no need to maintain cash reserves for liquidity purposes

unless advised to do so by the Conference’s finance staff.

When managers do hold cash in their accounts, such cash will be invested in the short-term investment fund

of the custodian bank, with the exception of any direct cash investments by investment managers, limited to

the following:

U.S. Treasury securities

Commercial paper that carries the highest rating from at least two major rating agencies

Repurchase agreements that are at least 100% collateralized by U.S. Treasury securities

Investment Objectives

The investment objective of the Long-Term Investment Pool is to equal or exceed the rate of return of a

benchmark consisting of 50% of the S&P 500 Stock Index, 7.5% of the Morgan Stanley Capital International

Europe, Australasia and Far East (EAFE) Stock Index, 7.5% of the Morgan Stanley Capital International All

Country World ex-U.S. Index and 35% of the Barclays Aggregate Bond Index and to achieve an above-

median ranking in a universe of balanced funds with similar investment policies over reasonable

measurement periods.

The investment objective of the domestic equity investments will be to exceed the rate of return of the S&P

500 Stock Index and to achieve an above-median ranking in a universe of equity funds over reasonable


The investment objective of the foreign stock investments will be to exceed the rate of return of a blended

foreign stock benchmark consisting of 50% of the Morgan Stanley EAFE Stock Index and 50% of the

Morgan Stanley Capital International All Country World ex-U.S. Index and to achieve an above-median

ranking in a universe of foreign stock funds over reasonable measurement periods.

The investment objective of the fixed income investments will be to exceed the rate of return of the Barclays

Aggregate Bond Index and to achieve an above-median ranking in a universe of fixed income funds over

reasonable measurement periods.

Each manager’s performance will be evaluated after the impact of investment management fees. When

evaluating investment results, consideration shall be given to the possible effect of investment restrictions.

Use of Derivatives

Derivative instruments may be used for any of the purposes listed below. Derivative instruments shall be

defined as any contract or investment vehicle whose performance, risk characteristics, or value is based on

a specific asset, interest rate, or index value.

To gain broad stock or bond market exposure in a manner that does not create the effect of leverage in

the overall portfolio.

To convert financial exposure in a given currency to that of another currency (e.g., to hedge Japanese

yen exposure back to the U.S. dollar).

To adjust the duration of a bond portfolio in a manner that is consistent with the accepted approach of

the manager and other policies and guidelines provided to the manager.

To make other portfolio adjustments that are consistent with other elements of the Long-Term Pool’s

investment policies and guidelines and that, when viewed from a total portfolio standpoint, do not

increase risk or expected volatility of rate-of-return in the portfolio.

All other uses of derivatives are prohibited unless specifically approved by the Committee on Budget and

Finance. Investment managers are expected to have internal risk management programs in place to ensure

that derivative-based strategies do not result in magnified risks to the portfolio.

Common Stocks

The common stock portfolio should be diversified by the number of stocks, industry and economic sector

exposure and other appropriate investment characteristics.

Fixed Income Investments

Fixed income investments should not be exposed to significant levels of interest rate risk or credit risk

relative to those inherent in the benchmark. The effective duration of the fixed income segment of the

portfolio should remain within one year of the effective duration of the Barclays Aggregate Bond Index.

I. There are no limitations on the Pool’s investment in the following categories of fixed income

securities:

Bonds or notes issued by the U.S. Government or U.S. Government Agencies.

Mortgage-backed pass-through securities issued by U.S. Government Agencies and

commercial mortgage-backed securities with a minimum credit quality of BBB (or equivalent)

by at least one major rating agency.

Derivative mortgage securities, such as collateralized mortgage obligations (CMOs), with

volatility characteristics less than or equal to those of the underlying collateral securities.

Investment-grade corporate bonds or notes issued in the U.S. and denominated in U.S.

dollars. Investment grade issues shall be defined as those rated BBB (or equivalent) or higher


Asset-backed securities (e.g., those backed by credit card, auto or home equity loans) that are

rated AAA (or equivalent) by at least one major rating agency.

Securities issued under SEC Rule 144A (subject to the credit quality restrictions cited later in

this policy).

II. In order to take advantage of opportunities for diversification and higher risk-adjusted returns, the

Pool may invest up to 25% of total fixed income assets in a combination of the types of securities

listed below.

Non-investment-grade corporate bonds or notes issued in the U.S. and denominated in U.S.

dollars. Non-investment grade issues shall be defined as those that lack a rating of BBB (or

equivalent) or higher from at least one major rating agency. No more than 10% of the total

fixed income portfolio should be invested in such securities, and a minimum credit quality of

BB applies. Moreover, the portfolio’s non-investment-grade holdings are limited to a maximum

of 1% in any single issuer.

Bonds issued by non-U.S. entities of developed industrial countries that maintain a credit

rating of A or higher from at least one major rating agency. No more than 20% of the total

fixed income portfolio should be invested in such securities, and total foreign currency

exposure may not exceed 10% of the fixed income portfolio.

Debt instruments issued by any non-U.S. entity that does not meet the above criteria,

including those located in Eastern Europe, Latin America, and the Pacific Rim. No more than

5% of the total fixed income portfolio should be invested in such securities, with a maximum of

1% in any single issuer.

Investment-grade taxable or tax-exempt debt securities issued by U.S. municipalities. No

more than 10% of the total fixed income portfolio should be invested in such securities.

Individual managers may be given guidelines that do not conform with the overall fixed income

policy so long as the aggregate of the managers’ portfolios is in line with policy guidelines.

UNITED STATES CONFERENCE OF CATHOLIC BISHOPS

INVESTMENT POLICY FOR THE

PENSION FUND

(With all revisions through July 31, 2012)

Introduction

The purpose of these guidelines is to establish the investment policy for the management of the assets of

the pension fund (the Fund) of the United States Conference of Catholic Bishops.

Distinction of Responsibilities

The Conference’s Committee on Budget and Finance assumes the responsibility for the development,

review and monitoring of the investment policy. This responsibility includes (1) determining acceptable

levels of market risk, (2) determining the allocation of assets among common stock, fixed income

instruments and such other types of investments as the Committee determines are appropriate and (3)

selection and review of external investment managers.

The investment managers appointed to execute the policy shall invest the Fund’s assets in accordance with

the policy and their judgments concerning relative investment values. In particular, the investment

managers are accorded full discretion, within policy limits, to (1) select individual securities, (2) adjust the

maturity mix, where applicable, and (3) diversify the Fund’s assets. As an overriding principle, the

investment managers shall not invest in securities deemed inappropriate by the Conference and indicated

as such by a list provided and periodically updated by the Conference.

Allocation of Assets

It is the Committee's policy to invest the pension fund’s assets in the following proportions:

Target Range

U.S. Stock

50%

46-54%

Foreign Stock

15%

13-17%

Total Stock

65%

61-69%

Fixed Income

35%

31-39%

Ordinary cash flows will be used to maintain the allocation as close as practical to the normal allocation. If

cash flows are insufficient to maintain the allocation within the permissible ranges as of any calendar

quarter-end, the Conference's finance staff shall transfer balances as necessary between stocks and fixed

income securities to bring the allocation back within the allowable ranges.

For purposes of asset allocation review, any cash held in the common stock managers’ portfolios will be

counted as common stock.

Diversification

The pension fund is to be broadly diversified to reduce the impact of large losses in individual investments

in a manner that is in keeping with fiduciary standards. To further this end, the Conference will use multiple

investment managers and a common stock indexed portfolio.

Proxy Voting

The Committee on Budget and Finance delegates the responsibility for voting proxies to the individual

investment managers employed to manage assets. The Committee expects proxies to be voted vigorously

and in the best interests of the plan participants and in a manner consistent with the teachings of the

Church.

Liquidity

Investment managers employed are to assume no need to maintain cash reserves for liquidity purposes

unless advised to do so by the Conference’s finance staff.

When managers do hold cash in their accounts, such cash will be invested in the short-term investment fund

of the custodian bank, with the exception of any direct cash investments by investment managers, limited to

the following:

U.S. Treasury securities

Commercial paper that carries the highest rating from at least two major rating agencies

Repurchase agreements that are at least 100% collateralized by U.S. Treasury securities

Investment Objectives

The investment objective of the Long-Term Investment Pool is to equal or exceed the rate of return of a

benchmark consisting of 50% of the S&P 500 Stock Index, 7.5% of the Morgan Stanley Capital International

Europe, Australasia and Far East (EAFE) Stock Index, 7.5% of the Morgan Stanley Capital International All

Country World ex-U.S. Index and 35% of the Barclays Aggregate Bond Index and to achieve an above-

median ranking in a universe of balanced funds with similar investment policies over reasonable


The investment objective of the domestic equity investments will be to exceed the rate of return of the S&P

500 Stock Index and to achieve an above-median ranking in a universe of equity funds over reasonable


The investment objective of the foreign stock investments will be to exceed the rate of return of a blended

foreign stock benchmark consisting of 50% of the Morgan Stanley EAFE Stock Index and 50% of the

Morgan Stanley Capital International All Country World ex-U.S. Index and to achieve an above-median

ranking in a universe of foreign stock funds over reasonable measurement periods.

The investment objective of the fixed income investments will be to exceed the rate of return of the L

Barclays Aggregate Bond Index and to achieve an above-median ranking in a universe of fixed income

funds over reasonable measurement periods.

Each manager’s performance will be evaluated after the impact of investment management fees. When

evaluating investment results, consideration shall be given to the possible effect of investment restrictions.

Use of Derivatives

Derivative instruments may be used for any of the purposes listed below. Derivative instruments shall be

defined as any contract or investment vehicle whose performance, risk characteristics, or value is based on

a specific asset, interest rate, or index value.

To gain broad stock or bond market exposure in a manner that does not create the effect of leverage in

the overall portfolio.

To convert financial exposure in a given currency to that of another currency (e.g., to hedge Japanese

yen exposure back to the U.S. dollar).

To adjust the duration of a bond portfolio in a manner that is consistent with the accepted approach of

the manager and other policies and guidelines provided to the manager.

To make other portfolio adjustments that are consistent with other elements of the Long-Term Pool’s

investment policies and guidelines and that, when viewed from a total portfolio standpoint, do not

increase risk or expected volatility of rate-of-return in the portfolio.

All other uses of derivatives are prohibited unless specifically approved by the Committee on Budget and

Finance. Investment managers are expected to have internal risk management programs in place to ensure

that derivative-based strategies do not result in magnified risks to the portfolio.

Common Stocks

The common stock portfolio should be diversified by the number of stocks, industry and economic sector

exposure and other appropriate investment characteristics.

Fixed Income Investments

Fixed income investments should not be exposed to significant levels of interest rate risk or credit risk

relative to those inherent in the benchmark. The effective duration of the fixed income segment of the

portfolio should remain within one year of the effective duration of the Barclays Aggregate Bond Index.

I. There are no limitations on the Pool’s investment in the following categories of fixed income

securities:

Bonds or notes issued by the U.S. Government or U.S. Government Agencies.

Mortgage-backed pass-through securities issued by U.S. Government Agencies and

commercial mortgage-backed securities with a minimum credit quality of BBB (or equivalent)


Derivative mortgage securities, such as collateralized mortgage obligations (CMOs), with

volatility characteristics less than or equal to those of the underlying collateral securities.

Investment-grade corporate bonds or notes issued in the U.S. and denominated in U.S.

dollars. Investment grade issues shall be defined as those rated BBB (or equivalent) or higher


Asset-backed securities (e.g., those backed by credit card, auto or home equity loans) that are

rated AAA (or equivalent) by at least one major rating agency.

Securities issued under SEC Rule 144A (subject to the credit quality restrictions cited later in

this policy).

II. In order to take advantage of opportunities for diversification and higher risk-adjusted returns, the

Pool may invest up to 25% of total fixed income assets in a combination of the types of securities

listed below.

Non-investment-grade corporate bonds or notes issued in the U.S. and denominated in U.S.

dollars. Non-investment grade issues shall be defined as those that lack a rating of BBB (or

equivalent) or higher from at least one major rating agency. No more than 10% of the total

fixed income portfolio should be invested in such securities, and a minimum credit quality of

BB applies. Moreover, the portfolio’s non-investment-grade holdings are limited to a maximum

of 1% in any single issuer.

Bonds issued by non-U.S. entities of developed industrial countries that maintain a credit

rating of A or higher from at least one major rating agency. No more than 20% of the total

fixed income portfolio should be invested in such securities, and total foreign currency

exposure may not exceed 10% of the fixed income portfolio.

Debt instruments issued by any non-U.S. entity that does not meet the above criteria,

including those located in Eastern Europe, Latin America, and the Pacific Rim. No more than

5% of the total fixed income portfolio should be invested in such securities, with a maximum of

1% in any single issuer.

Investment-grade taxable or tax-exempt debt securities issued by U.S. municipalities. No

more than 10% of the total fixed income portfolio should be invested in such securities.

Individual managers may be given guidelines that do not conform with the overall fixed income

policy so long as the aggregate of the managers’ portfolios is in line with policy guidelines.


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