Securities Lending Letter.doc

Dear Securities Lending Partner:

The Pension Benefit Guaranty Corporation (PBGC) has been changing the principles and standards under which we work with the investment community. Earlier this year we adopted a set of best practices for transition managers. The initiative was part of an effort by the PBGC to help identify best practices and protocols to be followed when implementing portfolio transitions, taking in new plans, and rebalancing portfolios. The 12 largest firms that provide transition services signed on to work with PBGC using these industry best practices.

PBGC is now re-examining its securities lending program. With the changes that PBGC is going through and the changes that the securities lending industry is experiencing, this is a particularly opportune and critical time to analyze the industry.

The purpose of this Request for Information (RFI) is to gather information and insight into the securities lending industry. We wish to understand the various business models that exist among providers of securities lending services. We are interested in considering the possibility of using multiple vendors and varying business models to engender competition among vendors. And we seek the opportunity to set standards of transparency and risk analysis that will enhance PBGC’s revenue and security in the securities lending program.

PBGC has a tremendously important mission. We insure the pensions of over 40 million Americans. These are retired flight attendants, steelworkers and nurses who are counting on us for their retirement security when their companies have failed. Protecting them is an inspiring mission and it requires the best possible investment of the assets we hold.

If you would like to assist us in carrying out that mission and reaching higher standards for the institutional investment community, please respond to this RFI.

Sincerely, Charles E. F. Millard

Director