International Stock Index Fund

Fund Objective

The International Stock Index Fund seeks to match the performance of the Morgan Stanley Capital International Europe, Australia, Far East (MSCI EAFE) Index while providing daily liquidity.

Investment Strategy

The MSCI EAFE Index consists of approximately 1,000 stocks in 21 countries outside of North and South America and represents approximately 85 percent of the free float adjusted total market capitalization in those countries.

The International Stock Index Fund employs an index replication approach to construct a fund that seeks to replicate the returns of the index. The fund attempts to buy and hold all of the index securities in market-weighted proportion; stocks are traded when there is a change to the index. This approach minimizes turnover and transaction costs while at the same time reducing risk through diversification across all 21 markets. In order to facilitate daily liquidity, the International Stock Index Fund may hold up to 20 percent of its value in international equity index futures.

Investment Risk

The International Stock Index Fund is intended for members who want an investment designed to parallel the returns of the MSCI EAFE Index. It is intended as a long-term investment vehicle due to the higher volatility of returns on international common stocks over short-term periods.

Investment Manager

The International Stock Index Fund is provided by the Washington State Investment Board and managed by State Street Global Advisors.

Investment Restrictions

Once a member has transferred money out of the fund, he or she will not be allowed to transfer money back into the same fund for thirty calendar days. The thirty day window will be based on the last time the member made a transfer out of the fund. This restriction will not affect the member’s regular contribution or the ability to leave state service and withdraw from Plan 3. For additional information, please refer to page 2 of the Plan 3 Investment Guide.

* Historic performance is not necessarily indicative of actual future investment performance, which could differ substantially. All performance figures contained herein are provided net of management fees and other expenses but before the WSIB and record keeper expenses. All returns are calculated in U.S. dollars.

** Other expenses are as of March 31, 2008. Expenses include the operating costs associated with portfolio management and items such as custodial fees, audit fees and transfer agent fees. They are usually fixed costs and change in percentage as the fund balance changes.

Fees are calculated based upon your daily account balance.

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