Amendment 001.doc

AMENDMENT OF SOLICITATION/MODIFICATION OF CONTRACT

9B. Date (See Item 11)

June 9, 2008

10A. Modification of Contract/Order No.

10B. Date (See Item 13)

11. THIS ITEM ONLY APPLIES TO AMENDMENTS OF SOLICITATIONS

Offers must acknowledge receipt of this amendment prior to the hour and date specified in the solicitation or as amended, by one of the following methods:

submitted; or (c) By separate letter or telegram which includes a reference to the solicitation and amendment numbers. FAILURE OF YOUR ACKNOWLEDG-

MENT TO BE RECEIVED AT THE PLACE DESIGNATED FOR THE RECEIPT OF OFFERS PRIOR TO THE HOUR AND DATE SPECIFIED MAY RESULT

IN REJECTION OF YOUR OFFER. If by virtue of this amendment you desire to change an offer already submitted, such change may be made by telegram or letter, provided each telegram or letter makes reference to the solicitation and this amendment, and is received prior to the opening hour and date specified.

12. Accounting and Appropriation Data (if required)

N/a $

13. THIS ITEM APPLIES ONLY TO MODIFICATIONS OF CONTRACT/ORDERS.

IT MODIFIES THE CONTRACT/ORDER NO. AS DESCRIBED IN ITEM 14.

Set fourth item 14, pursuant to the authority of FAR 43.103 (b)

14. Description of Amendment/Modification (Organized by UCF section headings, including solicitation/contract subject matter where feasible.)

The purpose of this amendment is to clarify that fundamental factor-based strategies will also be considered. See Section C, Scope, for further information. Replacement pages 16, 56-60, and 72-74 to the solicitation are attached. The time and date set for receipt of proposals is unchanged.

Except as provided herein, all terms and conditions of the document referenced in item 9A or 10A, as heretofore changed, remains unchanged and in full force and effect.

(Signature of Contracting Officer) 16C. Date Signed

_____________________________________________(Signature of person authorized to sign)

STANDARD FORM 30 (REV. 10-83)

PREVIOUS EDITIONS UNUSABLE

Prescribed by GSA FAR (48 CFR) 53.243

SECTION C

DESCRIPTION/SPECIFICATIONS/WORK STATEMENT

I.

INTRODUCTION

SCOPE

The investment manager must provide expertise in one or all of the following passive index fund mandates: core small capitalization domestic equity, core non-U.S. developed markets equity, core global emerging markets equity, and real estate equity index fund investment management and potentially custody services. PBGC will limit its consideration to only those proposals from Offerors with the following mandate minimum AUMs:

1. core small capitalization domestic equity

2. core non-U.S. developed markets equity

3. core Canadian equity index fund

4. core global emerging markets equity

5. real estate equity index fund investment management and

6. potentially custody services

Mandatory requirements for passive index fund investment managers are presented in detail in Section L. of this document. PBGC anticipates that $16 to $18 billion will be committed for investment. . In addition to market capitalization-weighted strategies, fundamental factor-based index strategies will also be considered. PBGC is defining fundamental factor-based index strategies as those which weight stocks based upon fundamental financial data, such as price-to-book, dividend yield, etc., versus the current stock price and number of outstanding shares.

STATEMENT OF WORK

The investment management organization retained under contract by PBGC must be responsible for providing investment management, and potentially custody, of the following index fund mandates:

1. PBGC anticipates allocating approximately $2.5 billion in a passive core small capitalization equity index fund, benchmarked to the Dow Jones Wilshire 4500 Index;

2. PBGC anticipates allocating approximately $9 billion in a passive core non-U.S. developed markets equity index fund, benchmarked to the MSCI EAFE Index (or reasonable equivalent );

3. PBGC anticipates allocating approximately $500 million in a passive core Canada equity index fund, benchmarked to the MSCI Canada Index (or reasonable equivalent );

4. PBGC anticipates allocating approximately $3 billion in a passive core global emerging markets equity index fund, benchmarked to the MSCI Emerging Markets Index (or reasonable equivalent);

5. PBGC anticipates allocating approximately $250 million to $3 billion in a passive real estate equity index fund, benchmarked to either the Dow Jones Wilshire Real Estate Securities Index or the Dow Jones Wilshire REIT Index (or reasonable equivalent).

Those assets must be managed with full discretion in accordance with the fund documents, the policies of PBGC and the strategy and objectives mutually agreed upon between the investment manager and PBGC. Written investment guidelines will be provided to the manager as part of the investment management agreement, if necessary.

The investment manager must be expected to adhere to the investment style for which it was retained, unless mutually agreed upon with PBGC. PBGC may, under this contract, receive any of the investment manager's internal or external investment, market and economic research training materials and support capabilities and services in the performance of PBGC’s investment responsibilities. This does not include proprietary models or information unique to the investment manager’s investment process. Under this contract, PBGC may, at its discretion, utilize other investment advisory services offered by the investment manager.

SECTION L

INSTRUCTIONS TO OFFERORS

L.6 PBGC-15-007 EXPENSES RELATED TO PROPOSAL SUBMISSION (OCT 2004)

The Government is not liable for any costs incurred by any offerors in submitting proposals in response to this solicitation.

L.7 MANDATORY REQUIREMENTS / QUALIFICATION COMPLIANCE

Please complete for each product offered:

NOTE: Proposals must meet all of the following mandatory requirements for each mandate they are proposing on in order to be further evaluated. Please circle the appropriate response.

Passive core small capitalization domestic equity fund:

A.

The firm is registered with the Securities and Exchange Commission as an investment adviser consistent with the Investment Advisers Act of 1940 as of 03/31/08 or, if exempt from registration, the nature of the exemption is disclosed.

B.1 (Cap. Wtd. Index) The firm must manage at least $2 billion as of 03/31/08 in a commingled, pooled or equivalent passive core small capitalization domestic equity fund suitable for a tax-exempt sponsor and benchmarked to either the Dow Jones Wilshire 4500 Index or the Russell 2000 Index.

B.2 (Fund. Index) The firm must manage at least $100 million as of 03/31/08 in a commingled, pooled or equivalent passive core small capitalization domestic equity fund suitable for a tax-exempt sponsor and benchmarked to either the Dow Jones Wilshire 4500 Index or the Russell 2000 Index.

C. The firm agrees to act as an ERISA fiduciary under this contract and will not utilize a sub-advisor(s) in the management of the proposed product.

D. 1a. (Cap. Wtd. Index) The proposed product must have at least 5 years of live performance history as of 03/31/08 (simulated results are not acceptable).

1b. (Fund. Index) The proposed product must have at least 2 years of live performance history as of 03/31/08 (simulated results are not acceptable).

2. The performance history presented in the technical proposal complies with the CFA Institute (CFAI) Global Investment Performance Standards (GIPS).

Y/N

Y/N

Y/N

Y/N

Y/N

E. The offeror accepts the general requirements of this Request for Proposal.

Y/N

The Offeror hereby certifies that it meets all of the mandatory requirements.

Authorized Signature

Date

Title

Name of Firm

SECTION L

INSTRUCTIONS TO OFFERORS

MANDATORY REQUIREMENTS / QUALIFICATION COMPLIANCE

NOTE: Proposals must meet all of the following mandatory requirements for each mandate they are proposing on in order to be further evaluated. Please circle the appropriate response.

Passive real estate equity index fund:

A.

The firm has been registered with the Securities and Exchange Commission as an investment adviser consistent with the Investment Advisers Act of 1940 as of 03/31/08 or, if exempt from registration, the nature of the exemption is disclosed.

B.1 (Cap. Wtd. Index) The firm must manage at least $1 billion as of 03/31/08 in a commingled, pooled or equivalent passive real estate equity index fund suitable for a tax-exempt sponsor and benchmarked to either the Dow Jones Wilshire Real Estate Securities Index or Dow Jones Wilshire Real Estate Investment Trust Index (or reasonable equivalent).

B.2 (Fund. Index) The firm must manage at least $100 million as of 03/31/08 in a commingled, pooled or equivalent passive real estate equity index fund suitable for a tax-exempt sponsor and benchmarked to either the Dow Jones Wilshire Real Estate Securities Index or Dow Jones Wilshire Real Estate Investment Trust Index (or reasonable equivalent).

C. The firm agrees to act as an ERISA fiduciary under this contract and will not utilize a sub-advisor(s) in the management of the proposed product.

D. 1a. (Cap. Wtd. Index) The proposed product must have at least 5 years of live performance history as of 03/31/08 (simulated results are not acceptable).

1b. (Fund. Index) The proposed product must have at least 2 years of live performance history as of 03/31/08 (simulated results are not acceptable).

2. The performance history presented in the technical proposal complies with the CFA Institute (CFAI) Global Investment Performance Standards (GIPS).

Y/N

Y/N

Y/N

Y/N

SECTION L

NOTE: Proposals must meet all of the following mandatory requirements for each mandate they are proposing on in order to be further evaluated. Please circle the appropriate response.

Passive core global emerging markets equity fund:

A.

The firm has been registered with the Securities and Exchange Commission as an investment adviser consistent with the Investment Advisers Act of 1940 as of 03/31/08 or, if exempt from registration, the nature of the exemption is disclosed.

B.1 (Cap. Wtd. Index) The firm must manage at least $1 billion as of 03/31/08 in a commingled, pooled or equivalent passive core global emerging markets equity fund suitable for a tax-exempt sponsor and benchmarked to the MSCI Emerging Markets Index (or reasonable equivalent).

B. 2 (Fund. Index) The firm must manage at least $100 million as of 03/31/08 in a commingled, pooled or equivalent passive core global emerging markets equity fund suitable for a tax-exempt sponsor and benchmarked to the MSCI Emerging Markets Index (or reasonable equivalent).

C. The firm agrees to act as an ERISA fiduciary under this contract and will not utilize a sub-advisor(s) in the management of the proposed product.

D. 1a. The proposed product must have at least 5 years of live performance history as of 03/31/08 (simulated results are not acceptable).

1b. (Fund. Index) The proposed product must have at least 2 years of live performance history as of 03/31/08 (simulated results are not acceptable).

2. The performance history presented in the technical proposal complies with the CFA Institute (CFAI) Global Investment Performance Standards (GIPS).

Y/N

Y/N

Y/N

Y/N

SECTION L

NOTE: Proposals must meet all of the following mandatory requirements for each mandate they are proposing on in order to be further evaluated. Please circle the appropriate response.

Passive core non-U.S. developed markets equity fund:

A.

The firm has been registered with the Securities and Exchange Commission as an investment adviser consistent with the Investment Advisers Act of 1940 as of 03/31/08 or, if exempt from registration, the nature of the exemption is disclosed.

B.1 (Cap. Wgt. Index) The firm must manage at least $10 billion as of 03/31/08 in a commingled, pooled or equivalent passive core non-U.S. developed markets equity fund suitable for a tax-exempt sponsor and benchmarked to the MSCI EAFE Index (or reasonable equivalent).

B.2 (Fund. Index) The firm must manage at least $1 billion as of 03/31/08 in a commingled, pooled or equivalent passive core non-U.S. developed markets equity fund suitable for a tax-exempt sponsor and benchmarked to the MSCI EAFE Index (or reasonable equivalent).

C. The firm agrees to act as an ERISA fiduciary under this contract and will not utilize a sub-advisor(s) in the management of the proposed product.

D. 1a. (Cap. Wgt. Index) The proposed product must have at least 5 years of live performance history as of 03/31/08 (simulated results are not acceptable).

1b. (Fund. Index) The proposed product must have at least 2 years of live performance history as of 03/31/08 (simulated results are not acceptable).

2. The performance history presented in the technical proposal complies with the CFA Institute (CFAI) Global Investment Performance Standards (GIPS).

Y/N

Y/N

Y/N

Y/N

SECTION L

NOTE: Proposals must meet all of the following mandatory requirements for each mandate they are proposing on in order to be further evaluated. Please circle the appropriate response.

Passive core Canadian markets equity fund:

A.

The firm has been registered with the Securities and Exchange Commission as an investment adviser consistent with the Investment Advisers Act of 1940 as of 03/31/08 or, if exempt from registration, the nature of the exemption is disclosed.

B. The firm must manage at least $500 million as of 03/31/08 in a commingled, pooled or equivalent passive core Canadian markets equity fund suitable for a tax-exempt sponsor and benchmarked to the MSCI Canada Index (or reasonable equivalent).

C. The firm agrees to act as an ERISA fiduciary under this contract and will not utilize a sub-advisor(s) in the management of the proposed product.

D. 1. The proposed product must have at least 5 years of live performance history as of 03/31/08 (simulated results are not acceptable).

2. The performance history presented in the technical proposal complies with the CFA Institute (CFAI) Global Investment Performance Standards (GIPS).

Y/N

Y/N

SECTION L

INSTRUCTIONS TO OFFERORS

11.

(100 words) How has the indexing methodology and implementation process been improved upon over the time period presented?

12.

(100 words) Describe the initiatives currently underway to enhance your process.

13.

(100 words) Under what circumstances would your firm deviate from the disciplines and procedures thus far?

14.

(100 words) What unique attributes or competitive advantage does each of the proposed subject products have that distinguish it from its competitors’respective offerings in the fulfillment of this assignment?

Benchmark

15.

(300 words) What index/benchmark is recommended for performance evaluation purposes for each of the subject index fund products you would manage for PBGC?

a. What specific factors led to the selection of this recommended index/benchmark?

b. State the associated pros and cons of the recommended benchmark for each respective index fund mandate.

16.

Detail the index construction methodology, the rationale behind the methodology and the entity responsible for constructing the index.

17.

(250 words) Identify the source of the index benchmark returns for each of the proposed subject products. Describe procedures if calculated in-house.

18.

For each proposed subject product, what is the expected annualized tracking error for the anticipated portfolio over a one year period and over a market cycle (i.e., 3 to 5 years)?

a. How is tracking error measured and managed?

19.

How does your firm research indexes? Do you have a dedicated staff that does index research?

B. TRADING

1. (100 words) Is your firm, its parent, or other affiliates a broker/dealer?

a. Does your firm trade for client accounts through this broker/dealer?

b. If so, state how much trading, and the reason for trading with this related party.

2. (500 words) Outline your internal trading capabilities, as follows:

a. Number and experience of trading staff

b. Number of dedicated passive index fund traders for each of the subject products. Describe their experience and tenure at the firm as well as the sector(s) they are responsible for trading. Provide biographical information of the senior passive index fund trading personnel in an attachment.

c. Current actual trading volume

d. Current capability for trading volume and asset levels

e. Procedures for monitoring and minimizing trading costs

SECTION L

INSTRUCTIONS TO OFFERORS

3. (500 words) Describe your crossing capabilities.

a. Has your firm been granted an exemption from the Department of Labor to internally cross for ERISA clients? If so, please provide. If not, please provide an explanation.

b. What is the percentage of purchases that may be expected to be:

i. Crossed within the fund in which PBGC participates, totally cost free

ii. Crossed with other funds managed by your firm

iii. Crossed with other funds managed by other firms

iv. Placed in futures

v. Program or portfolio traded through brokers

vi. If you use any other method, provide estimated share of trading for each method.

4. For each method in (3) above, provide your estimate of average commissions per share, market impact per share, and any other transaction and custodian costs incurred. Provide the cost of futures contracts separately.

5. (50 words) Discuss your policy regarding, and current use of, "soft dollars," directed trades and recapture programs. If you have soft dollar relationships with broker-dealers, disclose the following:

a. Soft dollar policy and when last reviewed.

b. % of trades executed tied to soft dollar relationships.

c. List of resources funded by soft dollars that would normally be funded with hard dollars.

6. (25 words) What would you expect the average portfolio turnover to be for each of the subject products?

7. (Core small cap domestic equities product) If applicable, describe how your firm managed the transition to the free-float weighted index calculation version instituted by Wilshire on May 3, 2004.

8. (200 words) Describe the firm’s passive index fund trading capabilities as they relate to derivatives for each of the subject products.

9. (350 words) Provide a description of your passive index fund trading platform, including systems (proprietary and off-the-shelf) for execution and processing.

a. Describe the allocation objectives and implementation procedures across all accounts. What is the process by which trades are allocated across separate accounts as opposed to commingled accounts and transition management clients? Describe both the tactic of allocating the initial trade as well as the strategy of building positions across accounts.

b. Is trading segmented by investment product platforms? Specifically, are there dedicated traders for derivatives?

c. Indicate the trading systems you use (e.g. Instinet, POSIT, etc.) and the percentage of trades completed on each system.

10. What processes do you have in place for ensuring pre- and post-trade guideline compliance? What functions are automated? What process do you have in place for human verification? Who signs off on final trading? Describe the oversight procedures that would minimize the risk of traders acting outside of their given latitude in executing trades.

SECTION L

INSTRUCTIONS TO OFFERORS

11. Indicate any enhancements your firm is contemplating to its passive index fund trading capabilities.

12. Does your firm affirm its own trades? If not, who does and why?

13. (250 words) Describe your method for a) monitoring and b) minimizing implementation shortfall, including any outside transaction cost monitoring services subscribed to.

C.

SAMPLE PORTFOLIO

Submit a sample portfolio (preferably an actual portfolio) as of 3/31/2008, in the following format, which would reflect the investment style of each of the subject products. Provide in an Excel or comparable format spreadsheet. Preferably, the following list should sort the holdings by industry sector.

CUSIP #

Cost

Total Market Value Percentage of Total Portfolio

D. FUND FLOWS

1. (100 words) Describe your requirements for the acceptance of transfers of assets in-kind into the respective proposed index funds.

2. (Core small cap domestic equities product) (500 words) Describe, in detail, procedures you would follow in converting PBGC’s present Dow Jones Wilshire 4500 index fund to your management. How would you incorporate existing holdings into your portfolio? How would you value these holdings? How would you determine the assets to be transferred and the amount of each asset? Include all fees and other charges. Discuss the anticipated time frame and costs (transaction costs and market impact) to initially invest PBGC’s funds (assume $3 billion). Discuss how these costs would differ if the assets totaled either $2 billion or $4 billion.

3. (250 words) Describe, in detail, the timing (dates each of the proposed subject index funds are open) and procedures involved in accommodating a client’s cash flows. What are the charges and notice requirements for purchases and redemptions? Can funds be wired on settlement date?

4. Describe the typical fund flow for each product at each opening, delineating openings which have greater or lesser flow than the average in dollars and the reasons why. Describe the seasonality of client fund flows if applicable (i.e., is there a month or quarter that client flow is greater?). Describe how this flow has changed over the most recent year.

E. CUSTODY

1. Where are the respective index funds custodied?

2. Is the custodian affiliated with you? How many years has the firm been in the custody business? Provide total assets and equity assets in custody by year, for each of the past 5 calendar years. Submit a copy of the custodian agreement for each of the proposed index funds.

PAGE

Amendment 001 Page -