401kSTATEMENTOFWORK021108.docm

STATEMENT OF WORK

BACKGROUND

The Office of the Comptroller of the Currency (OCC), a non-appropriated federal financial regulatory bureau of the Department of the Treasury, established a non-Federal 401(k) plan for its employees in 1999. The Plan was revised in January 2007 to add a Roth feature. Prudential Retirement Services has served as the Plan’s recordkeeper since March 1, 2000. Prudential Retirement Services provides enrollment, education, recordkeeping, and administrative services for all investment options. Prudential Trust Company provides investment management/trustee services for plan assets.

OCC employees are eligible to participate in the Federal Employees Retirement System (FERS) or the Civil Service Retirement System (CSRS), both defined benefit plans. Approximately 75% of OCC employees participate in the FERS retirement system, 24% in CSRS and 1% under Social Security only. OCC employees are also eligible to participate in the Thrift Savings Plan (TSP), the federal tax deferred defined contribution plan. Approximately, 93.6% of OCC employees participate in the TSP and 88% participate in the OCC 401(k).

OCC 401(k) plan participants may defer up to one hundred percent of adjusted base salary and receive an agency matching contribution of one percent. In addition, the OCC has contributed an additional $1,000, each October for the past three years, to all employees’ 401(k) accounts (even if they were not actively participating in the Plan). Currently, the OCC 401(k) has approximately 3400 participants and assets of $124 million. An overview of the Plan, including employee demographics, is provided in Appendix A.

The OCC 401(k) provides employees a diverse mix of investments. The funds menu includes the following asset classes: Balanced funds , Fixed Income, International Equity, S & P 500 Index Fund, Large Cap Growth, Large Cap Value, Large Cap Blend, Small and Midcap Growth, Small and Midcap Value and a Guaranteed Income Fund (cash equivalent).

The plan administrator is the Senior Deputy Comptroller for Office of Management and Chief Financial Officer. The Oversight Committee coordinates overall administration of the plan. The Committee is comprised of seven individuals, representing both management and employees, who serve as the Plan trustees. In addition to the Senior Deputy Comptroller for Office of Management and Chief Financial Officer, the committee is comprised of the Director for Policy Analysis (International & Economic Affairs) Director for Administrative and Internal Law, a District Asset Management Examiner, a Large Banks Asset Management Examiner, and two employee representatives (Bank Examiners). The Plan is administered to comply with Office of Comptroller of the Currency‘s 401(k) plan document, adopted January 1, 1999, revised and restated April 1, 2006, and subsequently updated July 2007. See Appendix B for the Summary Plan Description (SPD). See Appendix for the Investment Policy Statement.

Additional information regarding the OCC is available at www.occ.gov.

OBJECTIVE

OCC seeks the services of an experienced and qualified contractor to provide recordkeeping, investment management, and trustee services for its 401(k) plan. The OCC seeks a provider that excels in the following attributes:

· Understands how the federal government’s Thrift Savings Plan program interacts with the OCC’s 401(k) Plan program

· Offers competitively priced services

· Provides proactive account management and team-based orientation

· Demonstrates reliability and an on-going commitment to quality and technology

· Establishes a high level of data integrity to ensure maximum security

· Committed to cutting edge technology

· Established formal Peer Review Program

· Offers Performance Guarantees based on services performed

SCOPE OF WORK

The services under this contract shall include:

· Investment Management Services with a full range of investment options covering all asset classes

· Administration and Recordkeeping Services

· Daily Valued Recordkeeping System

· Trustee Services

· Education/Communication Services

Services under the current contract expire December 31, 2008. Any conversion to a new service provider would be required to be completed by January 1, 2009.

KEY PERSONNEL AND DIVERSION OF KEY PERSONNEL

The following positions are considered essential to the work to be performed under this contract and are hereby designated as key personnel:

Account Representative/Consultant Client Consultant Investment Advisor/Consultant

Prior to diverting any individual performing in a position designated above, the Contractor shall notify the COTR in writing of the intended diversion. The notification shall include a detailed justification for the change; an explanation of the anticipated impact on the project; and the name and qualifications of the proposed replacement.

Any person offered as replacement for a departed key person must have experience and qualifications comparable to or exceeding the individual vacating the key position. Any person offered as a replacement for a key person, is subject to the acceptance of the COTR.

Appendix A

Plan Information OCC 401(k) Plan

Plan Operational Information

Plan Recordkeeper

Custodial Trustee

Number of Eligible Employees

· Number of Contributing Employees

· Number of Plan Participants with a balance

Payroll Provider

Payroll Frequency

Cash Flow (contributions) Cash Flow (distributions)

Method of Data Remittance

· Contribution Record

· Eligibility Record

Method of Contribution Remittance

Prudential Retirement Services

Prudential Trust Company

US Department of Agriculture, National Finance Center, New Orleans, LA

Biweekly

$22,155,284 $ 3,582,959

Internet Internet

Wire Transfer

Plan Investment Information

Plan Balance as of 12/31/07

· PIMCO Return Fund

· Prudential Government Income Fund

· EuroPacific Growth Fund

· American Balance Fund

· Prudential Jennison Growth Fund

· Fundamental Investors

· Dryden Stock Index Fund

· Franklin Balance Sheet Investment Fund

· Goldman Sachs Mid Cap Value Fund

· Vanguard Mid Cap Growth Index Fund

· Vanguard Sm Cap Value Index Fund

· Vanguard Admiral Fund

· Oakmark Equity & Income Fund

$124,912,818 Million

$ 8,114,604 $ 10,157,127 $ 28,386,904 $ 7,015,144 $ 13,412,847 $ 19,570,586 $ 6,061,458

$ 9,905,192

$ 6,366,519

$ 13,267,164

$ 794,631

$ 1,860,642

Plan Contribution Information

Employee Deferral Rate

Average Adjusted Base Salaries

Catch-up Deferral for employees age 50 or older

Employer Discretionary Contribution

Loans

· # of Outstanding Loans

· Amount of Outstanding Loans

· Minimum Loan Amount

· # of Loans Per Participant Allowed

100% of pre-tax adjusted base salary,[footnoteRef:2], biweekly [2: Adjusted Base Salary is defined as employees’ base salary plus that portion of geographic differential allotted for benefits]

$85,419

Allowed

2% of adjusted base salary, biweekly $1,000 discretionary employer contribution given each October since 2005

$640,373 $1,000 One

Plan Features Eligibility Vesting Employee Contributions Vesting Employee Matching Vesting Employer Automatic 2% Loans Rollover Accounts Post Tax Feature Distribution Options

Roth Auto Enrollment Annuity Income Protection

Immediate upon hire Immediate Immediate 3 years of continuous OCC service General Purpose and Hardship 401(k), 403(b), 457 Under Consideration for 2008 Lump Sum Payment, Periodic Payments, Rollover to another Qualified Plan or IRA Implemented in 2007 Implemented January 20, 2008 Would like to consider Would like to consider

Current Recordkeeping Features

Daily Valued Recordkeeping System

Voice Response and Internet Access to Participant Accounts

Access to Participant Service Representatives 8:00 am to 8:00 pm EST

Paperless Transaction Processing

Internet Access to Plan Sponsor Site

Ad-Hoc Reporting

Participant Education

Appendix B

See the Word document entitled “401K Summary Plan Description update 07 07.doc”

APPENDIX C

INVESTMENT PROGRAM

The purpose of these guidelines is to:

· Document OCC’s 401k Oversight Committee’s policy for selection, monitoring and terminating funds included in OCC’s 401k plan.

· Communicate these policies to the workforce.

Responsibilities of the 401k Oversight Committee are to:

· Make investment decisions consistent with program objectives.

· Ensure that plan participants have:

- Sufficient information to make informed investment decisions.

- Opportunities to make investment elections as often as appropriate for the investment fund.

- Choice of a broad range of investment options from across the risk spectrum.

The following limits apply to the 401k Oversight Committee’s responsibilities:

· The OCC, the Executive Committee, the Oversight Committee and the Investment Manager(s) do NOT guarantee the performance of investment funds.

· Past performance of the funds does not guarantee future returns.

Criteria for the selection of investment funds include:

· Long-term investment performance consistent with fund objectives, as demonstrated by Morningstar ratings, Lipper peer group rankings, and other indicators selected for use by the Committee.

· A range of investments within the menu of funds (initially five to eight) selected that mix value and growth style funds and passively and actively managed funds.

· An assessment of funds, the quality of the companies held and the qualifications, management strategy and philosophy of the fund managers.

· The reasonableness of fees charged to employees.

· The provision of a broad choice among asset classes and levels of risk. To meet that goal, asset classes may include, but not be limited to the following:

- Cash Investments

- Investment and Non-Investment Grade Bonds

- Stocks

- Blended Funds - Mix of Stocks and Bonds

- Socially Responsible Funds

Note: See ATTACHMENT A for more detailed information about the classes and levels of risk.

Investment funds selected will not include:

Funds comprised of 25% or more bank companies.

The Committee may terminate funds from the menu when:

· Indicators show consistent, long-term, under-performance; a breach in the stated guidelines; significant alteration in policy or management; or a low selection by employees.

· The funds make-up is altered so that national bank stocks comprise more than 25% of the fund.

· Fund performance is inconsistent with fund objectives.

ATTACHMENT A TO APPENDIX C

Cash Investments

· Money-market funds

· Stable-value funds (e.g., Guaranteed Investment Contracts) (GICs)

Bonds

· Investment Grade

· Indexed fund(s)

· U.S. Government bond fund

· Corporate bond fund

· Non-investment Grade

· High Yield fund These tend to be higher risk than domestic stocks, but may be less risky than international stocks.

Stocks

· Indexed Fund(s)

· U.S. Large Cap Stock Fund

· U.S. Small Cap Stock Fund

· International and/or Global Stock Fund

· International Fund

· Global Fund

· Regional Fund

· Emerging Market Fund

Blended Funds - Mix of Stocks and Bonds

· Asset Allocation funds

· Balanced Asset Fund(s)

Socially Responsible Funds Levels of risk will differ depending on the type of fund (value, money market, balanced, etc).

Please refer to the Glossary for the definitions of the types of funds.

GLOSSARY

Active Management Funds - In actively managed funds, managers actively analyze individual markets in an attempt to outperform a selected index, and to provide employees wider choices and diversity of risk, with the potential of outperforming the market indices.

Asset Allocation Funds blend a variety of funds into broad-based asset allocations that are appropriate for predefined investor profiles. These funds attempt to provide a mix of risk and return suitable to predefined investor profiles, e.g., low risk, moderate risk or high risk investors.) Investors who either do not have the time or investment knowledge to construct a diversified mix of investment options from individual asset categories sometimes like these funds. However, asset allocation funds may have two layers of fees - fees of the included funds, plus fees to manage the asset allocation fund. The mix of stocks and bonds in asset allocation and balance asset funds can differ significantly. Depending on an employee’s risk tolerance and on the employee’s proximity to retirement, among other factors, the mix of stocks and bonds appropriate for each employee will differ. OCC will only offer these funds when the number of investment options allow the plan to include at least 3 of these funds that cross the risk spectrum.

Balanced Asset Funds invest in a relatively fixed combination of both stocks and bonds. A fund manager’s discretion to change the percentage of assets invested in stocks and bonds depends on the individual fund.

Corporate Bond Funds invest mainly in bonds issued by various companies.

Emerging Market Funds are international/global funds comprised of new, less established markets.”

Global Funds hold both U.S. and non-U.S. securities. Historically, international funds have tended to be riskier for the same rates of return than domestic funds. In addition, international funds may be affected by fluctuations in currency.

Growth stocks are securities of companies that are expected to grow faster than average. Managers of growth stock funds attempt to identify stocks with high growth potential.

Guaranteed Investment Contracts (GICs) See stable value funds.

High Yield Funds own non-investment grade assets (bonds). High yield funds are generally considered higher risk than some stocks, but less risky than international stock funds.

Indexed Funds, also known as passive management funds, are normally less expensive and have tended to outperform actively managed funds over time. Indexed Funds are comprised of a diversified mix of company stocks or bonds in the same proportion as they are represented in a market index. Examples of market indexes include Standard and Poor’s 500 index of large companies, the Russell 2000, for small companies, and the Shearson-Lehman Brothers Government and Corporate Bond Index, which tracks investment grade bond performance. The risk characteristics of index funds differ markedly depending on the market index followed.

International Funds hold only non-U.S. Securities. Historically, international funds have tended to be riskier for the same rates of return than domestic funds. In addition, international funds may be affected by fluctuations in currency.

Investment Grade Bonds, included in government and corporate bond funds, fall between cash investments and stocks in risk and return characteristics.

Money-market Funds invest in short-term, high quality loans such as treasury bills, certificates of deposit, and commercial paper. Although not guaranteed, the original investment normally remains stable. Interest fluctuates because the fund buys and sells loans frequently.

Non-investment Grade Bonds, which may be called High Yield Funds are considered high risk and return, but may not be as risky as international stocks.

Passive Management Funds, also known as indexed funds, are normally less expensive and have tended to outperform actively managed funds over time. Indexed Funds are comprised of a diversified mix of company stocks or bonds in the same proportion as they are represented in a market index. Examples of market indexes include the Standard and Poor’s 500 index of large companies, the Russell 2000, for small companies, and the Shearson-Lehman Brothers Government and Corporate Bond Index, which tracks investment grade bond performance.

Regional Funds are international funds comprised of securities from a small group of neighboring countries.

Socially Responsible Funds include companies based both on financial performance and societal concerns. For example, the funds may include companies that have positive records based on human rights, the environment, animal testing, etc. and/or may exclude companies that have negative performance in those areas or whose products include weapons, alcohol, tobacco, and gambling. Levels of risk will differ depending on the type of fund (value, money market, balanced, etc).

Stable-value Funds offer stability of principal. This term could apply to money market funds, but is normally used to refer to a fund that invests in Guaranteed Investment Contracts (GICs) with insurance companies or GIC alternatives with other institutions, like banks. The “guarantee” refers to a rate of interest that is guaranteed for the life of an individual contract. The “guarantee” is only as good as the financial condition of the company that provides it.

Third Party Administrator handles the Plan recordkeeping functions.

Trustee holds plan assets. In OCC’s 401(k) Plan, the trustee normally will not manage the plan’s investments because the participants will direct their own investments. The trustee is responsible to process contributions and investment transactions, preparing financial statements, and disbursing funds to pay participants or to pay fees and expenses of the trust.

U.S. Government Bond Funds invest mainly in bonds issued by the US government, one of its agencies, or both.

U.S. Large Cap Stock Funds invest in stocks of companies with values, defined by market capitalization (stock price * outstanding shares), generally of several billion dollars, and may use the S&P 500 as its benchmark for performance

U.S. Small Cap Stock Funds invest in stocks of companies with values, defined by market capitalization, which may be less than $1 billion, and tend to use the Wilshire 4500 as a benchmark to measure performance. Stocks of small cap companies have great potential for large gains, but are also more volatile than other companies. Small cap companies tend to have greater risk of failure than large cap companies.

Value Stocks are securities that are relatively inexpensive based on measures of the relative “health” of the company, as indicated by current earnings, current cash flow, and book value. There may be perceptions related to the company’s industry, management or other reasons that have caused the companies to be perceived less favorably than performance would indicate. These stocks are considered undervalued. The managers of value funds try to identify companies that appear ready to show a turnaround, resulting in an increase in earnings and stock prices.