SOURCE: Barclays Global Investors

October 10, 2007 12:00 ET

Barclays Global Investors Introduces SponsorMatch™, a New Category of Retirement Income Investing

First Portfolio Solution Utilizing Employer Match That Seeks to Improve Investment Outcomes and Provide Secure Income in Retirement

SAN FRANCISCO, CA--(Marketwire - October 10, 2007) - Barclays Global Investors (BGI), one of the world's largest asset managers, today announced a new investment category for defined contribution (DC) plans. SponsorMatch, a new investment solution focused on the company match, defines a new category in DC investing and seeks to deliver some of the best features of a defined benefit (DB) plan to DC investors. Specifically, SponsorMatch is designed to optimize the company match of DC plans to address growing concerns about securing post-retirement income and dealing with longevity risk. Furthermore, SponsorMatch is designed to meet the criteria outlined in the proposed Department of Labor (DOL) regulations concerning qualified default investment alternatives (QDIA), which help plan sponsors meet their fiduciary responsibilities; it also improves DC participants' ability to achieve their retirement goals.

SponsorMatch is uniquely designed to fully utilize the company match and mitigate investment risks, such as longevity, not generally addressed in most DC products. Traditionally, the company match either has been allocated to company stock or directed into the investment products selected by the plan participant. The shortcomings of both of these options are well documented(1).

As many as two-thirds of all Americans underestimate longevity(2) -- meaning how long they will live -- and the amount of retirement savings they will realistically need to last their lifetime. Despite plan sponsors' efforts to help participants adequately prepare for retirement, there have been no DC investment vehicles specifically focusing on the company match to provide annuitized retirement income that traditional pension plans have historically delivered.

"We created this category with the goal of providing a more direct way for plan sponsors to help improve investment outcomes for future retirees," said Kristi Mitchem, head of the US defined contribution group at BGI. "What is exciting about SponsorMatch is that it is a very innovative solution designed to improve the utilization of a familiar feature in 401(k) plans -- the company match. To the participant, it looks very much like a target-maturity date fund; however, the investment technology underlying the fund is much more sophisticated and provides results that are more like a traditional pension plan."

With SponsorMatch, plan sponsors gain access to an investment vehicle that includes BGI's institutional alpha (strategies which seek above-market returns) and beta (strategies which seek to match market return), combined with deferred annuities. The solution seeks to maximize the value of a company's matching contributions and provide participants with an income stream for retirement.

"We believe SponsorMatch can provide plan sponsors with superior investment results from their match dollars than what is typically achievable from the investment products solely offered on the 401(k) platform," said Mitchem.

Each SponsorMatch Fund Has Three Main Components:

--  An annuity portfolio to provide an income stream. SponsorMatch is
    designed to increase this income stream over time as an employee ages.
--  A beta portfolio to capture market returns. This portfolio is invested
    in line with the asset allocation policies of the 200 largest retirement
    plans in the world, and incorporates an expanded menu of asset classes and
--  An institutional alpha portfolio. This portfolio provides
    diversification benefits, as well as enhanced return potential.

How It Works:

--  The plan sponsor contributes to the SponsorMatch target maturity date
    fund that matches the participant's birth year.
--  BGI manages the fund with the goal of securing a certain level of
    income for retirement, while participating in market gains.
--  SponsorMatch seeks to control exposure to market risk over time by
    increasing the level of the annuity as the participant ages.
--  SponsorMatch is designed to integrate with traditional DC
    recordkeeping platforms to allow for daily liquidity.
--  SponsorMatch is designed to meet the criteria for QDIA as outlined in
    the proposed DOL regulation.
--  There is no specific action required by employees to participate,
    though employees may elect to opt out.

"By combining annuity expertise, asset allocation capabilities and advanced alpha strategies, BGI seeks to help 401(k) plan sponsors provide for DB-like income benefits to DC plan participants," said Mitchem. "BGI has a long history of innovation -- creating the first index strategy, the first quantitative active equity strategy, the first lifecycle portfolios and now the first SponsorMatch portfolios. We are dedicated to transforming the DC landscape with tangible solutions that serve plan sponsors, and in the end, make it easier for individual participants to attain their retirement needs."

Barclays Global Investors is one of the world's largest asset managers and a leading global provider of investment management products and services(3). It has over 2,900 institutional clients and over $2.0 trillion of assets under management. It transformed the investment industry by creating the first index strategy in 1971 and the first quantitative active strategy in 1979. BGI is the global product leader in Exchange Traded Funds with over 190 funds for institutions and individuals trading in 19 markets.

The strategies referred to in this publication are among various investment strategies that are managed by BGI as part of its investment management and fiduciary services. Strategies may include collective investment funds maintained by Barclays Global Investors, N.A. Collective investment funds are available only to certain qualified employee benefit plans and governmental plans and not offered to the general public. Accordingly, prospectuses are not required and prices are not available in local publications. To obtain pricing information, please contact your local service representative.

For ease of reference "BGI" may be used to refer to Barclays Global Investors, N.A. and its asset management affiliates. Barclays Global Investors, N.A., a national banking association operating as a limited purpose trust company, manages the investment strategies and other services referred to in this publication and provides fiduciary and trust services to various institutional investors. Strategies maintained by BGI are not insured by the Federal Deposit Insurance Corporation and are not guaranteed by BGI or its affiliates.

There are risks involved with investing, including possible loss of principal. Risk controls and asset allocation models do not promise any level of performance or guarantee against loss of principal.

This publication is not intended to be an investment advise or recommendation or legal, accounting or tax advice. You may not rely upon this publication in evaluating the merits of investing in SponsorMatch™. Any investment decision with respect to SponsorMatch should be made by you solely upon the information contained in any final offering document or other offering materials relating to SponsorMatch. SponsorMatch is subject to the terms and conditions set forth in any such final offering document or materials (and any changes thereof).

No part of this publication may be reproduced in any manner without BGI's prior consent. Additional information is available on request. Information contained herein is believed to be reliable but BGI does not warrant its accuracy or completeness. Information contained herein represents BGI's own opinions. This publication is not an offer to sell, nor an invitation to apply for any particular product or service.

For further information about Barclays Global Investors, please visit our website © 2007 Barclays Global Investors, N.A. All rights reserved.

(1) Mitchell, O., Utkus, S., 2002. Company stock and retirement plan diversification. Pension Research Council Working Paper 2002-4.; Poterba, J., 2004. Portfolio risk and self-directed retirement savings programs. The Economic Journal 114, C26-C51.

(2) 2005 Risks and Process of Retirement Survey

(3) "P&I/Watson Wyatt World 500," Pensions & Investments, March 2007.