1. 1818 Society Annual Meeting Pension Plan Performance October 11, 2006

2. Road Map Highlights 2005 Participants and Retiree Information
Funded Status
Contribution rates
Strategic Asset Allocation
Market Environment
Plan Performance

3. Highlights 2005 Assets increased by $1.1 billion to $12.4 billion
Closed group liabilities increased by $0.6 billion to $13.5 billion.
SRP gained 11.1%, outperforming the policy portfolio by 2.0%.
Funded Status as of December 31, 2005
Closed Group funded ratio at 0.92
Closed Group funded ratio incl. PV of future staff contributions at 0.96
Bank contribution rate for FY07 set at 18.35% of net salaries

4. SRP - Number of Participants
12,303
11,114
Retirees in 1997 were 65% of actives
6,669
Retirees are 56% of actives
Current Plan participants (active and retirees) total over 18,000 (about 2/3s active and 1/3 retirees).
Pension Reform (HR Reform) in 1998 altered the Plan significantly from being a mature plan with nearly 50% retirees and 50% active staff. The addition of about 5000 NRS and country staff change the make-up of the Plan significantly.
About gross plan participants have been retiring per annum. At current retirement rates, in ten years time the active participants will be largely net plan.
It should be noted that the benefit from the Net Plan is a lump sum if plan service is less than 10 years. Beyond 10 years of service, it is a mandatory pension. Since the Net Plan only started on 15 April 1998, no one would qualify for the mandatory pension before 2008 were it not for the NRS past service credit. Because of NRS service, 5 staff have to date left with more than 10 years service (2 deferred and 3 in receipt of a pension).
[Local staff, in addition to the normal Net Plan benefit, also receive a Termination Grant (TG) of 21% of Final Salary for each year of Bank service before 15 April If their plan service is less than ten years, but the sum of the latter and TG service is ten years or more, they are eligible to convert the entire lump sum payment (ie they cannot elect to convert less than 100%) into an annuity - however, no one has done so to date.]

5. Assets versus Liabilities 1996-2005
Note: The actuarial present value of plan liabilities is determined on the basis of actuarial assumptions and are discounted currently at a 3.5% real rate

6. Plan Funded Status
Note: Funded ratio is Assets/Liabilities. Liabilities are determined on the basis of actuarial assumptions and are discounted currently at a 3.5% real rate

7. SRP – Benefit Payments and Contributions

8. SRP Contribution Rates for FY90 - FY07
Bank contributions were suspended from FY98 to FY02

9. Evolution of Strategic Asset Allocation

10. SRP - Actual Asset Allocation as of December 31, 2005
US Equities
21%
Non-US Equities
18%
Private Equity 8%
Real Estate 4%
Hedge Funds 9%
Global Fixed Income
40%

11. Market Environment 2005 - Equities
Demand from China and India kept commodity prices strong, benefiting Emerging Market countries. The Developed Markets were up more modestly. 11 11

12. Market Environment 2005 – Fixed Income
In spite of the U.S. Fed tightening, Global Fixed Income markets were generally positive. As with in equities, Emerging Markets posted the strongest returns. 12

13. Market Environment 2005 – Alternatives
Strong results from equity-driven strategies were offset by arbitrage strategies in the Hedge Fund area. Private Equity returns were helped by continued realizations, while Real Estate benefited from strong capital flows. 13

14. Plan Performance (2005) Total Plan 11.1 9.1 2.0
Return
Policy
Return
Excess
Return
Total Plan
11.1
9.1
2.0
U.S. Equity
Non-U.S. Equity
Fixed Income
Hedge Funds
Private Equity
Real Estate
Active Currency
In 2005, SRP assets posted a return of 11.1%, outperforming its policy portfolio by 2.0%, with all the asset classes outperforming their benchmarks. 14

15. *Plan Performance (Jan ‘06 – Sept ‘06)
Return
Policy
Return
Excess
Return
Sept 04 YTD Plan
Dec 04
Plan
Total Plan
5.9
6.0
-0.1
3.7
11.0
U.S. Equity
Non-U.S. Equity
Fixed Income
Hedge Funds
Private Equity*
Real Estate*
*PE and RE are preliminary
Absolute returns have come down in 2006.
Markets can change quickly, as witnessed in the last quarter of 2004. 15

16. (period ending December 31, 2005)
Plan Performance
Gross Returns
(period ending December 31, 2005)
Source: Mellon Bank 16

17. (periods ending December 31, 2005)
Plan Performance
Gross Returns
(periods ending December 31, 2005)
Source: Mellon Bank 17

18. Plan Volatility (Periods ending June ‘06)
1 Year
5 Year
10 Year
Total Plan
4.3
7.0
9.4
U.S. Equity
Non-U.S. Equity
Fixed Income
Hedge Funds
Private Equity
Real Estate
Volatility of returns has fallen in most asset classes in recent years.
Lower volatility is accompanied by less differentiation in returns among securities, making it more difficult for active managers to outperform. 18

19. Return to Risk Ratio (Through June ‘06)
1 Year
5 Year
10 Year
Total Plan
2.5
0.9
0.9
U.S. Equity
Non-U.S. Equity
Fixed Income
Hedge Funds
Private Equity
Real Estate
Highest risk adjusted return in many years. 19

20. Concluding Remarks
Funded status of the plan continued to improve during 2005.
Low return/low volatility environment.
Implications for institutional investors:
Diversify
Look for illiquidity/intransparency premium
Focus on long term trends 20