PSRS/PEERS Asset Allocation 

(as of September 30, 2008)

		U.S. Public Equity	Global Public Equity	Public Debt	Real Estate	Private Equity	Absolute Return Pool	Implementation Pool	Cash & Equivalents
	Target Allocation*	34.0%	19.0%	25.0%	7.5%	7.5%	7.0%	0.0%	0.0%
	Actual Allocation	34.6%	18.5%	25.1%	6.1%	4.4%	3.5%	7.6%	0.2%

The time horizon of the Systems’ investment portfolio reflects the long-term nature of the PSRS/PEERS pension obligations.  Accordingly, diversification among investments displaying unique risk and return characteristics provides the framework for selecting an asset allocation that is expected, in the aggregate, to give the funds the highest long-term return within a prudent risk level.  The Systems’ investment portfolio includes strategic, long-term commitments in the following asset classes: U.S. Public Equity, Global Public Equity, Public Debt, Real Estate, Private Equity and Absolute Return Assets.  In April 2007, the Board approved the creation of the Implementation Pool to serve as an interim placeholder for assets that will be invested in the alternative asset classes: Private Equity, Real Estate and the Absolute Return Pool.  The Systems’ asset allocation is reviewed in conjunction with plan liabilities at least every three years.

* The target allocation depicted above was approved by the Board of Trustees on June 9, 2008.