PERAC MEMO #48/1998 M E M O R A N D U M TO: All Retirement Systems FROM: Jim Waldman RE: Pooled Funds DATE: October 7, 1998 In an effort to streamline accounting for pooled funds, we are changing the instructions to allow for journal entries for investment income and to separately record realized and unrealized gains and losses. These instructions are the same instructions that were introduced at the Northeast Secretary’s meeting in May as well as at the June MACRS Conference. The new instructions are on page two of this memorandum. For systems that are invested in the PRIT Fund and have not purchased individual segments, you will use ledger number 1199 for the core fund and ledger number 1198 for the PRIT Cash Fund. If you own individual segments of the PRIT Fund, you must use the ledger number that corresponds to the type of fund as indicated on page seven of this memo. Additionally, those that own individual segments will also have a PRIT Cash account which will be recorded in ledger number 1198. Transfers between the core fund, individual segments and the cash fund will be treated as a sale if the funds are transferred out of the account or a purchase if the funds are transferred into the account. Enclosed is a partial list of pooled funds with the appropriate ledger numbers. If you want additional pooled funds added to this list, you can contact me and we will update this list on our website. Attached you will also find examples of individual funds and the appropriate accounting instructions. If you need assistance from our audit staff with these instructions, please feel free to contact me at 617-666-4446, x925 . If you find that you are having difficulty determining the proper entries, you may fax the pooled fund statements to me at 617-666- 4414 and I will fax you back the correct entries that need to be made. MEMORANDUM- Page Two DATE: NEW POOLED ACCOUNTING INSTRUCTIONS (10/98) The accounting entries that are listed below correspond to the numbers on the worksheet.

1. To record a purchase , make the following cash book entry : Debit: Pooled Fund (use appropriate ledger) Credit: Cash
2. To record income as a result of investment income, realized or unrealized gains make the following journal entry : Debit: Pooled Fund (use appropriate ledger) Credit: Investment Income (ledger 4821) Credit: Realized Gain (ledger 4884) Credit: Unrealized Gain (ledger 4886) If there are operating losses , realized or unrealized losses make the following journal entry : Debit: Investment Income (ledger 4821) Debit: Realized Loss (ledger 4885) Debit: Unrealized Loss (ledger 4887) Credit: Pooled Fund (use appropriate ledger)
3. To record management fees* paid from the fund make the following journal entry : Debit: Management Fees (Ledger 5304) Credit: Pooled Fund (use appropriate ledger)
4. To record a sale (in the amount of cash distributed to the system) make the following cash book entry : Debit: Cash Credit: Pooled Fund (use appropriate ledger)
5. To record a stock distribution (in the amount of the market value assigned to the stock distributed) make the following journal entry : Debit: Equities (ledger 1170) Credit: Pooled Fund (use appropriate ledger) If the fee is paid from retirement system cash and not from the pooled fund, a cash book entry would be made on the disbursements page debiting management fees Ledger (5304) and crediting cash. MEMORANDUM- Page Three DATE: NEW POOLED FUND WORKSHEET (10/98) NAME OF FUND___________________________________________________ PERIOD ENDING _________ , 19 PLEASE CHECK ONE OF THE FOLLOWING: MONTHLY STATEMENT QUARTERLY STATEMENT MARKET VALUE AT BEGINNING OF PERIOD $____ PLUS: PURCHASES BY SYSTEM (1)$_______________ ADDITIONS DUE TO INCOME: INVESTMENT INCOME (LOSS) (2)$_______________ REALIZED GAIN (LOSS) (2)$_______________ UNREALIZED GAIN (LOSS) (2)$_______________ LESS: MANAGEMENT FEES (3)$(_____________) SALES BY SYSTEM (4)$() STOCK DISTRIBUTION** ( 5)$() MARKET VALUE AT END OF PERIOD $_______________ *Includes income not reinvested and cash distribution to system

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STOCK DISTRIBUTION __________ _________________________ $_____________

of shares name of stock market value

__________ _________________________ $_____________

of shares name of stock market value

__________ _________________________ $_____________

of shares name of stock market value

$_____________ total market value **Total market value of new stock should correspond to the decrease in market value of pooled fund. MEMORANDUM- Page Four DATE: Listed below are the ledger accounts to be used for pooled funds and the partial list of pooled funds and their appropriate ledger numbers: For Short Term Investments: 1101-Pooled Short Term Funds For Equities: 1172-Pooled Domestic Equity Funds 1173-Pooled International Equity Funds 1174-Pooled Global Equity Funds (Domestic and International Equities) For Fixed Income Securities: 1181-Pooled Domestic Fixed Income Funds 1182-Pooled International Fixed Income Funds 1183-Pooled Global Fixed Income Funds (Domestic and International Fixed Income) For Alternative Investments: 1193-Pooled Alternative Investments/Private Equity (Venture Capital) For Real Estate Investments: 1194-Pooled Real Estate Funds For Balanced Fund Investments: 1195-Pooled Domestic Balanced Funds (Domestic Equities and Fixed Income) 1196-Pooled International Balanced Funds (International Equities and Fixed Income) For PRIT Fund Investments: 1199-PRIT Fund (This account number is to be used only in instances where the PRIT Core Fund is owned, any individual segment that is owned separately must be listed in the appropriate ledger account as indicated on page 7.) 1198-PRIT Cash -Systems that own shares in either the PRIT Fund or any of the segments of the PRIT Fund will also have funds in the PRIT Cash. Accounting instructions for PRIT Cash will be exactly the same as for other pooled funds. MEMORANDUM- Page Five DATE: Ledger Fund Name Number AELTUS #300 SMALL CAP EQ 1172 AFL-CIO HOUSING TRUST 1181 AIB INVMT MGR FUND 1173 ALLEGIS #50 PARTICIPATING MTG 1194 ALLEGIS #87 REAL ESTATE 1194 ALLEGIS #148 CONGREGATE CARE 1194 ALLMERICA SELECT INTL EQ FUND 1173 BABSON STEW IVRY INT 3 1173 BACHOW INVESTMENT 1193 BAYBANK SMALL CAP FUND 1172 BIAM SAF INTL EQUITY TR 1173 BOSTON CAP VENTURES II 1193 BOSTON CAP VENTURES III 1193 BOSTON CO ACTIVE EQTY FD 1172 BOSTON CO EMERGING MKTS 1173 BOSTON CO INTL EQUITY FD 1174 BOSTON CO PREMIER VALUE EQTY 1172 BOSTON CO SMALL CAP FD 1172 BOSTON MILLENNIA PARTNERS 1193 BRANDES INTL EQUITY TRUST 1173 BRANDYWINE GBL FIXED INCOME 1183 BRANDYWINE INTL EQUITY 1173 BRINSON PARTNERS TRUST 1172 CAREY INSTL PROPERTIES FUND 1194 CHARLES RIVER PTRSHP VII 1193 CHARLES RIVER PTRSHP VIII 1193 COHEN & STEERS REALTY SHARES 1193 COLUMBUS CIRCLE INVESTORS 1172 COMM BIOVENTURES III 1193 COMM BIOVENTURES IV 1193 COPLEY PARTNERS #1 1193 COPLEY PARTNERS #2 1193 DEAN WITTER REALTY 1194 DELAWARE INTL GL FXED INC 1182 DIVERSIFIED INVESTMT ADVSRS 1172 DREYFUS SMALL CAP FUND 1172 EQUITABLE RE. INVEST MGMT 1194 EQUITABLE VALUE ENHANCE II 1194 EUROPACIFIC GROWTH FD 1173 FEDERATED/ENTERPRISE FD 1181 FIDELITY CONTRA FUND 1195 FIDELITY EQUITY INCOME 1195 FIDELITY FUND INC 1172 MEMORANDUM- Page Six DATE: FIDELITY GROWTH & INCOME FD 1172 FIDELITY GROWTH & INCOME FD 1172 FIDELITY MAGELLAN FD 1172 FIDELITY RE. HIGH INC II 1194 FIDELITY VALUE FUND 1195 FLAGSHIP S&P 500 (STATE STREET) 1172 FLEET SMALL CAP EQUITY FUND 1172 FRANK RUSSELL EQUITY I 1172 FRANK RUSSELL INTL FD 1173 FRK RUSSELL TACTL ASSET 1195 GALAXY FD EQTY VAL CLC 1172 GFM INT’L INV BD FD #64 1182 GUINNESS FLIGHT GBL GRP TR 1182 GUINNESS FLT INTL EQUITY TR 1173 HALPERN DENNY FD II 1193 HAMBRO EUROPEAN VENTURES III 1193 HAMBRO N. IRELAND VENTURE 1193 HANCOCK FORESTREE IV LP 1193 HEITMAN R E. FUND V 1194 HOTCHKIS & WILEY INTL GRP TR 1173 IAI GRWTH EQUTY COLLECTIVE FD 1172 IAI MID-CAP GROWTH FD 1174 INVESCO HIGH YIELD INCOME FD 1181 INVESCO TR INTL EQUITY FUND 1173 IRISH LIFE INTL EQUITY PRODUCT 1173 ITC EQUITY R E. FUND 1194 JANUS FUND 1174 JMIC SMALL CAP FD 1172 JOHN HANCOCK SPCL EQUITY FD 1172 JULIUS BAER INT’L GOV 1182 KEYSTONE SMALL CAP GRWTH FD 1172 LAZARD INTL EQUITY 1173 LEHN&BABSON 90’S INV PROG 1194 LEHNDORF & BABSON III 1194 LEHNDORF & BABSON IV 1194 LOOMIS SAYLES INV TRUST 1195 MAS DOMESTIC FIXED FD 1181 MAS EQUITY FUND 1172 MAS FIXED INCOME PORTFOLIO 1181 MAS LARGE CAP VALUE PRODUCT 1172 MATRIX STOCK FD 1172 MERRILL LYNCH GIC 1181 MET LIFE BD FD #135 1181 MET LIFE BROAD MKT #41 1181 MET LIFE MKT PLUS #110 1181 MET LIFE R.E. TOWER - 11396 1194 MEMORANDUM- Page Seven DATE: MET LIFE TOWER FD 1194 METLIFE REAL ESTATE SERIES II 1194 METRIC APT CO-INVEST TR 1194 METRIC INST APT FD I 1194 METRIC INST APT FD II 1194 MFS BOND FUND-A 1183 MIG RESIDENTIAL REIT INC 1194 MONTGOMERY EMERG MKTS FD 1173 MORGAN GRENFELL INVMT TR 1183 MUTUAL BEACON FUND 1195 NEW ENGLAND GROWTH I 1193 NEW ENGLAND GROWTH FD II 1193 NORTH ATLANTIC VENTURESS II 1193 NORTH BRIDGE VENTURE I 1193 NORTH BRIDGE VENTURE II 1193 PAINEWEBBER EQTY II 1194 PAINEWEBBER EQTY III 1194 PAINEWEBBER INDEP LIV MTG 1194 PALMER ORGANIZATION III 1193 PANAGORA BOND INDEX FUND 1181 PANAGORA EQUITY INDEX FD 1172 PANAGORA TAA EQUITY FD 1195 PHOENIX RE ADV (RESA) 1194 PIMCO LOW DURATION FD 1181 PIMCO TOTAL RETURN FD 1183 PIONEER VENTURES LP II 1193 PRISM VENTURE PARTNERS I 1193 PRIT CAPITAL FUND (CORE FUND) PRIT DOMESTIC EQUITY FUND PRIT INTERNATIONAL EQUITY FUND PRIT EMERGING MARKET FUND PRIT FIXED INCOME FUND PRIT CORE REAL ESTATE FUND PRIT VINTAGE YEAR ACCOUNT 1199 1172 1173 1173 1181 1194 1193 PUTNAM CORE GROWTH EQ(MWRA) 1172 PUTNAM EUROPE GROWTH FD 1173 PUTNAM HORIZON MGMT TR 1172 PUTNAM INT’L TRUST 1173 PUTNAM INT’L FIXED INCOME TR 1182 PUTNAM MID CAP EQUITY TRUST 1172 PUTNAM WORLD INCOME TR 1183 RHUMBLINE EXTENDED MKT FD 1172 RHUMBLINE GROUP TRUST 1172 RHUMBLINE RUSSELL 200 INX FD 1172 RHUMBLINE S&P500 INDEX FUND 1172 RICE MEZZANINE LENDERS LP 1194 MEMORANDUM- Page Eight DATE: RII TIMBERLAND III LLC 1194 RII WORLD TIMBERFUND 1194 RII WORLD TIMBERFUND LP 1194 ROWE PRICE FLEMING EQ FD 1173 RUSSELL 1000 INDEX FD 1172 SAM BOND FUND 1181 SAM STOCK FUND 1172 SAFECO INTERNATNL STOCK FND 1173 SALUS MKT NEUTRAL CONSERVATIVE 1172 SCOTTISH EQUITABLE INTL FND 1182 SCUDDER INTL EQTY FD 1173 SECTOR PLUS GROUP TRUST 1172 SELIGMAN HENDERSON GRP TRUST 1173 SENTINEL REALTY PTNRS II 1194 SENTINEL REALTY PTNRS III 1194 SHURGARD INST LP 1194 SHURGARD INST LP II 1194 SMITH BARNEY INTL EQTY 1173 SOGEN OVERSEAS FUND 1173 SSGA BALANCED GROWTG FUND 1195 SSGA SHORT TERM BOND FUND 1181 SSGA/FREEDOM EQ STYLE FD 1172 SSR APARTMENT VALUE FUND L.P. 1194 SSR APARTMENT VALUE FUND 1194 STANDISH FIXED INCOME FD 1183 STANDISH INT’L EQUITY FD 1173 STANDISH INTL FIXED FD 1182 STANDISH SMALL CAPITALIZATION 1172 STATE ST DAILY ACTIVE DEVLPD 1173 STATE ST DAILY BOND MKT FD 1181 STATE ST GVMT CORP BOND FD 1181 STATE ST GRWTH EQTY #40 1172 STATE ST INTERMEDIATE BOND FD 1181 STATE ST INTL FIXED INCOME FD 1182 STATE ST INTL INDEX FUND 1173 STATE ST MATRIX SMLL CAP 1172 STATE ST PASSIVE EMERG MKTS FD 1173 STATE ST REIT FUND 1193 STATE ST RES OPP HIGH YLD BND 1181 STATE ST RES OPP NONDOLLAR BD 1173 STATE ST RESH CAP APP#43 1172 STATE ST RESH SMALL CAP#96 1172 STATE ST RUSSELL 1000 GRWTH FD 1172 STATE ST RUSSELL 1000 VALUE FD 1172 STATE ST RUSSELL 2000 GRWTH FD 1172 MEMORANDUM- Page Nine DATE: STATE ST RUSSELL 2000 VALUE FD 1172 STATE ST S&P MIDCAP FUND 1172 STATE ST BOND MKT INDEX FD 1181 STATE ST DAILY ACTIVE FD 1172 STATE ST DAILY GVMT FD 1181 TA REALTY ASSOC FUND III 1194 TA REALTY ASSOC FUND IV 1193 TEMPLETON FOREIGN SAF 1173 TICONDEROGA PARTNERS III 1193 WARBURG PINCUS INTL FD 1173 WASHINGTON MUTUAL 1172 WORLD ASSET MGMT S&P 500 1172 WPG CORP DEV ASSOC IV LP 1193 WRIGHT INVESTORS’ SERVICE 1173 WTC-STRAT TOTAL RETURN FD 1183 WTC-CIF SMALL CAP 2000 1172 WTC-CIF EMERGING MKT PORT 1173 WTC-CIF US HIGH YIELD FUND 1181 WTC-INTL STOCK PORT 1173 WTC STRUCT MID CAP PORT 1172 ZERO STAGE CAPITAL LP V 1193