1. Vancouver Webcast Pension Fund Investment Report Accountable To You 4th Annual General Meeting October 15, 2005

2. 2 Overview  Structure of investments  Examples of investments  Performance results and current outlook  Corporate governance  Summary

3. 3 STRUCTURE OF INVESTMENTS

4. 4 Governance of the Plan  Trustees determine plan’s investment policies and strategic direction  Day-to-day management is responsibility of investment professionals at bcIMC  Fund is managed for long-term, with the goal of securing pension benefits for current and future beneficiaries

5. 5 Structure of Investments  At $18.2 billion, Municipal Pension Plan is one of the largest pension plans in Canada  Highly diversified investment portfolio— follows the old adage of “not putting all your eggs in one basket”  The plan has investments in 36 countries, in thousands of securities and other income producing assets (e.g., real estate)

6. 6 Growth of the Municipal Pension Plan Basic and Inflation Adjustment Accounts Municipal Pension Plan 1990 to 2005 0 2 4 6 8 10 12 14 16 18 20 19901993199720002004 Billions Basic Account Basic + Inflation

7. 7 Market Value of Basic, IAA & RAA as at December 2004 ($ Billions) Total Portfolio = $18.2 billion Real Estate, Mortgages and Foreign Currency $2.5 (14%) PrivatePlacements $0.5 (3%) US Equities $2.9 (16%) CDN Equities $3.7 (20%) Bonds $5.4 (30%) InternationalEquities $3.0 (16%) Short-term $0.2 (1%)

8. 8 EXAMPLES OF INVESTMENTS

9. 9 Real Estate Investments Yaletown 939 Vancouver Western Canadian Place Calgary

10. 10 Real Estate Investments Marché Central Montreal

11. 11 Real Estate Investments Menkes Office & Industrial Toronto Livingston Place Calgary

12. 12 Private Placements Investments  Owns and operates six state-of-the-art waste-to- energy facilities located major northeastern U.S. cities  Household garbage is used to generate electricity American Ref-Fuel Company

13. 13 Private Placements Investments  Is one of North America’s largest makers of wire products  With production facilities located in Canada and U.S., company headquarters are in Richmond Tree Island Industries

14. 14 Public Equity Investments  Developing an integrated oil sands project in Long Lake, AB  Using its OrCrude tm process, OPTI is able to extract crude oil using steam injection OPTI Canada Inc.

15. 15 Public Equity Investments  13 billion barrels of crude oil reserves  Strategically located in Fort McMurray, AB Suncor Energy Inc.

16. 16 PERFORMANCE RESULTS & OUTLOOK

17. 17 Investment Performance Basic Account as at December 31, 2004  Reason for strong returns in 2004:  High oil prices and strong demand for commodities led to good year from Canadian stocks  Hedging has mitigated the impact of falling US$  Lower interest rates provided good returns on bonds 4.2% 10.0% 4.6% 10.1% 0% 2% 4% 6% 8% 10% 12% 1 Year5 Year Fund ReturnTotal Fund Benchmark

18. 18 Value Added  Investment performance is assessed relative to market conditions  Investment managers can add value through managing the asset mix, security selection, and risks (e.g., hedging against currency fluctuations)  Over past five years, bcIMC and its managers have added $235 million in additional return relative to market benchmark (after fees)

19. 19 Investment Costs  Industry surveys find that bcIMC is a low- cost service provider  Investment costs in 2004 were about 15 cents for every $100 invested. Retail mutual funds often charge between $2 to $3 for every $100 invested

20. 20 Review of 2005 To Date  Canadian equity markets continue to be one of the best performers as global demand for commodities persists  Economic impact of Hurricane Katrina will be devastating for the region but minimal relative to US economy  Bank of Canada recently raised interest rates for the first time since October 2004  Expectation is for modest returns in 2005 and on a go-forward basis

21. 21 Investment Risks  US Current Account deficit  Use of leverage in financial markets  Higher interest rates and debt levels

22. 22 CORPORATE GOVERNANCE

23. 23 Corporate Governance & Proxy Voting  Exercising shareholder rights (e.g., voting proxies) is an important duty as a fiduciary and responsible investor  Trustees delegate voting rights to bcIMC and have instructed bcIMC to act in the best financial interests of the Plan  bcIMC votes in accordance with our Corporate Governance and Proxy Voting Guidelines. These guidelines were developed based on input from MPP and other clients

24. 24 Corporate Governance & Proxy Voting  The goal of the proxy voting process is to influence corporate behaviour and to encourage changes in practices that do not meet expected standards  bcIMC reports quarterly to the Trustees on corporate governance and proxy voting issues. In addition, a summary of our voting record is prepared annually.  bcIMC voted more than 4,200 issues in 2004  bcIMC’s proxy voting results are posted on the website at www.bcimc.com

25. 25 Advocacy for Social Responsibility  In addition to voting proxies, bcIMC may approach corporate management directly on matters of social responsibility  bcIMC expects companies to approach social and environmental issues in a manner that is responsible to the communities and that serves to maximize shareholder value Example 1  bcIMC supports all shareholder proposals asking companies to adopt International Labour Organization (“ILO”) standards

26. 26 Advocacy for Social Responsibility Example 2  Until the mid-1980’s, James Hardie Industries was Australia’s largest manufacturer and supplier of asbestos-containing building products  bcIMC contacted company management advocating that employees who are victims of asbestos poisoning be treated appropriately and that they be fairly compensated for their work related illnesses

27. 27 Corporate Governance & Proxy Voting  Member of:  Canadian Coalition of Good Governance (CCGG)  bcIMC is on CCGG’s Board  International Corporate Governance Network  Asian Corporate Governance Association

28. 28 Summary  Expectation is for more modest returns on a go forward basis  The focus of Trustees and bcIMC is to grow the asset base to secure pension benefits