PENSION

YOUR PENSION AND ANNUITY FUND

The Hawaii Electricians Pension Fund (defined benefit plan) and the Hawaii Electricians Annuity Fund (defined contribution plan) were established to provide pension and retirement benefits to all employees, their families, and dependents who satisfy eligibility requirements as determined by the Trustees of the Fund. The Pension Fund and the Annuity Fund are funded by signatory employers under collective bargaining agreements with Local Union 1186 IBEW, which obligates the employer to make contributions to the plan on behalf of the participants.

Each Fund is administered by a Board of Trustees comprised of three Union Trustees who are appointed by Local Union 1186 and three Employer Trustees who are appointed by the Trustees Selection Panel.

The Trustees have the responsibility of carrying out the purpose of the Fund to provide benefits to Employees in the Plan.

One of the duties of the Trustees is to manage and invest the Trust assets in real property and securities. To assist them with managing and investing assets, the Trustees have retained First Hawaiian Bank as the Funds' Custodian, UBS Financial Services, Inc. as the Investment Advisor and Consultant, Colliers Monroe as the Real Estate Manager, Honolulu Actuarial Consultants, Inc. as the Actuary, and Alston Hunt Floyd & Ing as the Legal Counsel.

YOUR FUNDS' INVESTMENTS

Asset Allocation is the most important element in investing that determines success or failure in achieving your goals and objectives. The decision to allocate assets into different classes is more important than the process of choosing the actual stocks, bonds and other securities in the portfolio. Asset allocation is a process the Trustees go through to carefully consider how best to distribute a Fund's assets among the major investment classes of assets to maximize returns and to achieve the Fund's objectives.

• How much of a Fund's assets should be in stocks, in bonds, in real estate or held in cash?
• What is the risk return for each class of investments?
• What are the market and economic conditions that could affect investments?

Assisting the Trustees in determining asset allocation is the Funds' investment monitor and advisor - Ron Kikawa/Gregg Matsuura from UBS Financial Services, Inc. After carefully researching, planning and discussing with the Trustees, the advisors will recommend an asset allocation to best achieve a Fund's objectives.

After determining a Fund's Asset Allocation, the Trustees will retain investment managers to invest in particular sectors of the Fund's allocation. Investment managers are fiduciaries designated by the Trustees to manage, acquire or dispose of assets of the Trust. To select investment managers, the Trustees go through a search process that involves a universe of managers that have been screened for past performances and conduct personal interviews with the prospective managers.

YOUR FUND’S SERVICE PROVIDERS

Investment Consultant - UBS Financial Services,Inc.
UBS Financial Services, Inc. assists the Trustees in the preparation of the investment policies and objectives of the Fund and the preparation of investment guidelines for each investment manager of the Fund. Periodically, UBS Financial Services, Inc. reviews and evaluates the policies and make recommendations to amend the policies when necessary. UBS Financial Services, Inc. prepares quarterly evaluation reports for each investment manager and each Fund's total portfolio. The evaluation report measures how each manager and the Fund's portfolio is performing against designated benchmarks. If a manager has consistently underperformed its benchmark, UBS Financial Services, Inc. would recommend replacing that manager. UBS Financial Services, Inc. would assist the Trustees in the search for a new manager by providing a list of prospective managers that met certain criteria and standards.

Fund Custodian - First Hawaiian Bank Trust Department
First Hawaiian Bank provides all the custodial services that are necessary for the safekeeping and control of the assets of the Funds. The custodial services provided are: collection services - collect monthly employer contributions, investment income and all other receipts; payment services - pay plan benefits, expenses and other disbursements; securities - maintain control and safekeeping of all assets; administrative services - prepare monthly reports of assets, employer contributions, investment income, deposits, and disbursements.

Actuary -Honolulu Actuarial Consultants, Inc. (Hawaii)
The Pension Fund is required to have an annual actuarial valuation of its plan performed by an enrolled actuary. The Trustees have retained Charles Furuike, from Honolulu Actuarial Consultants, Inc. as the Pension Fund's actuary. The enrolled actuary is a professional who is trained in advanced mathematics. He analyzes employee and financial data to determine if employer contributions and the amount of a Fund's assets are adequate to pay current and future benefits. The actuarial valuation is complex and involves calculations of credit balance/funding deficiency, minimum/maximum employer contribution requirements, employer withdrawal liabilities, actuarial accrued liabilities and actuarial gains and losses. The actuary also assists the Trustees with the compliance of ERISA and Internal Revenue Service rules and requirements.

Legal Consul - Aston, Hunt, Floyd & Ing