FINAL Wilshire TRSL SFP Response

Teachers Retirement System of Louisiana
Response to Request for Proposal for Investment Consulting Services
September 17, 2010

September 17, 2010
Table of Contents
Organization and Background ............................................................................................ 1
Standards of Conduct ........................................................................................................ 51
Conflicts of Interest........................................................................................................... 53
Personnel ........................................................................................................................... 56
Research ............................................................................................................................ 60
Investment Policies ........................................................................................................... 72
Asset Allocation and Related Issues ................................................................................. 79
Investment Manager Searches .......................................................................................... 99
Performance Evaluation and Reporting .......................................................................... 107
Technology ..................................................................................................................... 117
Insurance and Liability ................................................................................................... 118
Previous Clients and References ..................................................................................... 121
EXHIBIT B: Fee Schedule ............................................................................................ 126
Appendix
Wilshire Consulting Leadership Biography Tab 1
2010 Asset Allocation Report Tab 2
Sample Defined Benefit Case Study Tab 3
Sample Investment Structure Tab 4
Sample Executive Summary Report Tab 5
Sample Monthly Flash Report Tab 6
Form ADV Part I and II Tab 7
2009 Annual Report and Statement of Financial Condition Tab 8
Code of Ethics Tab 9
Agenda for 2010 Client Conference Tab 10
Sample Monthly and Quarterly Perspectives Tab 11
Wilshire Consulting
Proposal for Investment Consulting Services
Prepared for Teachers Retirement System of Louisiana
Organization and Background

1. Provide the firms name (and the name under which it does business, if different),
including your mailing and physical addresses and the name, telephone, facsimile
number and e-mail addresses of the person within the firm who will serve as the
primary contact for this selection process.
Firm Name: Wilshire Associates Incorporated
Address: 210 Sixth Avenue Suite 3720
Pittsburgh, PA 15222
Telephone: (412) 434-1580
Facsimile: (412) 434-1584
Email: dlindberg@wilshire.com
Client Contact: David L. Lindberg, CFA Managing Director
Mr. David L. Lindberg, CFA, Managing directing is the proposed lead consultant.
Davids team includes Mr. Jim Neill, CFA, Managing Director as co-consultant and Ms.
Felicia Bennett, Vice President, as back-up consultant. They can be reached by phone at
(412) 434-1580, and by email at the following addresses:
David L. Lindberg: dlindberg@wilshire.com

James R. Neill: jneill@wilshire.com
Felicia F. Bennett: fbennett@wilshire.com
The TRSL consulting relationship would be managed from the Pittsburgh, PA office,
where Davids team is based.
2. Briefly, describe your firm and its history (include the year founded).
Wilshire Associates Incorporated (Wilshire or Wilshire Associates) was founded in

1972. Wilshire earned a leadership position in the industry by consistently delivering
innovative investment research and services to the institutional market. For over thirty
years, our clients have trusted Wilshire to lead the institutional investment community by
transforming complex theory into practical applications.
Our timeline exhibits the many accomplishments that Wilshire and its affiliates have
developed on behalf of its clients.
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Wilshire Consulting
The 1970s First to the Market

Wilshire Analytics
Wilshire 5000 IndexSM
Equity and Fixed Income Risk Models
Integrated Asset / Liability Modeling
Equity Style Indexes
Equity and Fixed Income Portfolio Optimization
Wilshire Trust Universe Comparison (Wilshire TUCS)
The 1980s Continued Innovation

Wilshire Consulting
Performance Attribution Models
Holdings-Based Style Measurement Model
Performance Fee Calculation Model
Wilshire New York Office
The 1990s Globalization

Wilshire Compass Consulting Analytics
Canadian Trust Universe Comparison Service
Wilshire Cooperative Universe ServiceSM
Wilshire Pittsburgh Office
Wilshire London Office
Wilshire Amsterdam Office (Wilshire Associates Europe BV)
Wilshire Private Markets
Global Equity and Fixed Income Risk and Attribution Models
Wilshire Canberra Office (Wilshire Australia Pty Limited)
Wilshire Funds Management
The 2000s Investing for Clients in the New Millennium

Risk Budgeting Platform
Wilshire iQuantum Total Fund Analytics
Streamline Business Units
Hedge Fund Consulting
Wilshire Consulting Investment Research Group
Commitment Driven Investing (CDI)
Wilshire Singapore Office
Wilshire Chicago Office
Wilshire Tokyo Office (Wilshire Japan K.K.)
Wilshire TargetPathSM (Custom Target Maturity solution)
Global Pensions 2007 Investment Consultant of the Year Award
Wilshire Denver Office
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Wilshire Consulting
Currently, Wilshire and its affiliates employ approximately 350 people in ten offices and
affiliated companies around the world: Santa Monica (headquarters), Pittsburgh, New
Jersey, Chicago, Denver, London, Amsterdam, Canberra, Singapore and Tokyo.
3. Provide an organizational chart for the firm.
Currently, Wilshire employs approximately 350 people worldwide. An organizational

chart showing functions, positions, and titles of all personnel involved in consulting
services is provided below:

William Bensur, CFA, Managing Director Alex Browning, Senior Associate

Steven Foresti, Managing Director
Mark Brubaker, CFA, Managing Director Joseph Dressel, CFA, CAIA, Senior Associate

Mike Dudkowski, Managing Director Jason Samansky, Senior Associate
Andrew Junkin, CFA, CAIA, Managing Director Stephen Marshall, Managing Director
Karim Simplis, Senior Associate
David Lindberg, CFA, Managing Director Mark Peng, ASA, MAAA, Senior Associate
Catherine Trzeciak, CPA, Senior Associate
Jim Neill, CFA, Managing Director Emmanuel Salta, PhD, Associate
Justin Wiser, CFA, Senior Associate
Eileen Neill, CFA, Managing Director
Ting Yeh, Senior Associate
Marlin Pease, CFA, Managing Director Michael Rush, CFA, Vice President
Bradley Baker, Associate
Maggie Ralbovsky, CFA, Managing Director Russell Walker, Vice President
Andrew Chen, Associate
Michael Schlachter, CFA, Managing Director Todd Douds, CFA, Associate
Jerry Hsu, Associate
Karyn Williams, PhD., Managing Director Joseph Lloyd, Associate
Howard Yata, Managing Director Thao Nguyen, Associate Charles Stunkard, CFA, Managing Director
Felicia Bennett, Vice President J.M. Ruscetti, Senior Analyst
Amy Hemphill, Vice President Nicholas Sefchok, Senior Analyst Karyn Williams, PhD, Managing Director
Michael Patalsky, CFA, Vice President Christopher Shelby, Senior Analyst
Tom Toth, CFA, Vice President Daniel Leguellec, Vice President
Jordan Wittes, Senior Analyst

Christopher Tessman, Vice President
Vardges Markosyan, CFA, Associate
Mangala Murthy, Associate Ali Kazemi, Vice President
Jana DeLuca, Senior Analyst
Swetha Ketty, Senior Analyst
(2 Analysts)
Victor Zhang, Head of Investments
Melissa Watters, Senior Analyst
Jane Aldrich, CFA, Vice President Claire Cohen, Associate
Peter Braganca, Analyst (60 Professionals)
Nick Douty, Analyst (6 Analysts)

Thomas Dunlap, Analyst (firm wide shared resource - 17 professionals) Amy Hemphill, Vice President
David Johnson, Analyst Jason Samansky, Senior Associate
Kaleena Iszkula, Analyst
Razmik Kirakosyan, Analyst
Theodore Hermann, Managing Director
Juan Lozano, Analyst
David Kraemer, Vice President
Taveen Miloyan, Analyst Sharon Riley, Vice President
Kathryn Orchowski, Analyst Meghan Belotti, Senior Associate
Mayank Prasad, Analyst
Andrew Schroeck, Analyst
Liana Shir, Analyst
Valerie Snodgrass, Analyst
Aaron Stuck, Analyst
Brian White, Analyst
Kirk Yogan, Analyst
Heidi Zhang, Analyst
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4. Does the firm engage in other business activities, besides consulting? If so, list the
entire range of services your firm provides.
Wilshire is comprised of four distinct business units: Wilshire Consulting, Wilshire

Private Markets, Wilshire Funds Management, and Wilshire Analytics, as described
below.
Wilshire Consulting
Wilshire Consulting offers the following services:
Wilshire Consulting provides asset / liability analysis and asset / spending

policy analysis, investment structure analysis, manager selection and
evaluation, performance measurement, and investment research services to
private and public pension plans (both defined benefit and defined
contribution plans), foundations / endowments, and insurance companies.
Wilshire Consulting also offers discretionary outsourcing solutions to
institutions. Rooted in Wilshires three decades of experience, our
investment expertise lies in the selection of investment managers, the
blending of complementary managers to control risk, and the monitoring
of these investment solutions to help enhance risk-adjusted performance.
We provide customized investment programs based on the risk tolerance
of the investors we represent.
The Wilshire Compass is a Windows-based software application that
provides institutional clients with analytical tools to evaluate managers,
investment structures, and asset allocations, as well as access to Wilshire
research. Wilshire Compass clients can receive updates to their software,
which includes extensive manager and index databases, via the Internet.
The Wilshire Compass system also allows clients to do custom work and
analysis on data that is not in the database.
Wilshire TargetPathSM was launched in 2007 and is intended to provide
customized target date retirement fund solutions using the Plans existing
investment options. Wilshire TargetPathSM evaluates each age segments
unique employee base in terms of age, income characteristics and other
retirement benefits as part of Wilshires proprietary Needs-Based
Optimization process. Wilshire works with our clients to determine a
policy statement that specifies and calibrates the optimization objective
function thereby controlling the optimizers sensitivity. The objective for
Wilshire TargetPathSM is to create a series of portfolios that will
maximize the probability of being successful in funding participants
retirement income. The program will allow sponsors to provide the robust
retirement income planning their employee is seeking.
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Wilshire Consulting

Wilshire Private Markets provides institutional investors access to global private
markets through portfolios that invest in venture capital, leveraged buyout and other
alternative investment opportunities on a discretionary basis for those clients wishing
to outsource this function.
Wilshire Funds Management

Wilshire Funds Management offers discretionary and non-discretionary manager-of-
manager services as well as outsourcing solutions to financial institutions,
commingled funds, and mutual fund complexes.
Wilshire Analytics
Wilshire Analytics provides investment technology solutions to a broad range of
firms, including central banks, custodial banks, hedge funds, insurance companies,
investment management firms, mutual funds, plan sponsors, state retirement boards,
trust departments, universities and more. Wilshire Analytics products provide a
multitude of services, including risk management, asset allocation, investment
accounting, marketing support, trade order management, portfolio optimization,
scenario analysis and performance measurement to multi-currency portfolios for
multiple asset classes of public securities. Products include Wilshire AxiomSM,
Wilshire AtlasSM, Wilshire AbacusSM , Wilshire iQCompositeSM, Wilshire
iQuantumSM, Wilshire Compass InSiteTM, Wilshire SpectrumSM,, Wilshire Trust
Universe Comparison Service (Wilshire TUCS), and Wilshire Cooperative Universe
ServiceSM (WILCOP).
In addition to the four separate business units, approximately 85 employees support

shared functions such as accounting, marketing, information technology, and database
support.
a. Indicate which services are the firms specialties or areas of expertise.
The following factors distinguish Wilshire from our competitors and

describe the special expertise of our firm:
Research Capabilities
Wilshire Consulting has a dedicated investment research team. Most of
our major competitors utilize existing consultants and manager research
personnel to conduct investment research on a part time basis. We found
several years ago that new investment product proliferation and the
increasingly complex nature of institutional investing warranted the
commitment of resources to a dedicated investment research team staffed
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by individuals with mathematical, statistical and actuarial backgrounds in

order to provide our consultants with sufficient support in client education
and investment decision making efforts. Research topics are the direct
result of client feedback and discussion, and the Investment Research
Group routinely pursues interesting ideas to enable Wilshire to remain a
thought leader in the industry. We find that the combination of
independent research, coupled with client-driven advocacy through
consultant involvement in the research process, ensures an end product
that is focused on relevant challenges facing Wilshires consulting clients.
Investment Technology Resources

A significant focus of the firms resources is on investment technologies
and the application of investment technologies to solve investment-related
problems. One of the first asset allocation models was built at Wilshire, as
were some of the first truly global risk models. The Wilshire Compass
was among the first executive decision tools for fund sponsors and is now
used by funds totaling nearly $1 trillion in assets to develop, monitor and
evaluate their investment programs. Wilshire Consulting also benefits
greatly from accessing the products of Wilshire Analytics, which are
leading edge portfolio risk analytics. We use advanced fixed income
analytics in our performance measurement system, utilize multifactor risk
models for equities to conduct specialized portfolio analysis for our
clients, and use a total fund risk management framework to facilitate
identification, measurement and control of plan-wide risks.
Experienced Staff
Wilshires consulting staff consists of 24 consultants organized into six
consulting teams, each with their own dedicated research and support staff
while also sharing firm wide research and operational support resources.
Each consulting team serves a diversified client base, which includes
corporate and public fund sponsors, endowment and foundation funds, and
non-profit institutional investors.
Our high-quality, long tenured consultants provide client service through a

dedicated team structure. Wilshire senior consultants average nearly 12
years with Wilshire and 17 years with the industry; 90% have post-
graduate degrees and 80% hold the Chartered Financial Analyst
designation. Wilshires consultants have diverse backgrounds with
experience in the investment management, plan sponsor, and custody
businesses. However, absent in our consultants backgrounds is sales or
broker/dealer experience as we do not consider this type of experience to
be sufficiently substantive when it comes to institutional consulting given
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the sophisticated and complex clients that comprise our client base. Many
of our peers employ consultants from the soft side (i.e., sales and
marketing) of the investment industry. This experience often does not
lend itself well to being able to effectively assist clients in the
development and implementation of modern portfolio strategies and
policies.
Service Delivery Model

We combine two prominent service models in investment consulting
today: centralized resources and dedicated client service. We believe that
there must be a dedicated team assigned to each client account in order to
establish an intimate working knowledge of a clients issues and, in effect,
to become the extension of staff. All client service work is handled within
the team and centralized resources are used to leverage the consulting
team's time and expertise. In effect, Wilshire provides each client with the
personalized attention benefits of a small firm and the resources of a large
firm.
b. Provide the percentage of revenue derived from investment

consulting.
Approximately 27% of Wilshires 2009 revenue was derived from

investment consulting services.
c. Are there any areas of potential conflict of interest between such

activities and your consulting function? If so, please identify these
activities and their potential conflict, and explain the safeguards
implemented by the firm to preclude the occurrence of conflicts.
Wilshire receives a substantial portion of its total revenues from the sale of
analytics services that are provided by Wilshire Analytics, a separate
business unit from Wilshire Consulting and Funds Management. A
significant amount of Wilshire Analytics business is generated from
portfolio managers, including most, if not all, of the largest organizations
in the investment industry. In addition, Wilshire has entered into a
relationship with a company to offer the Wilshire Compass product to
Canadian customers, including portfolio managers, analysts and marketing
professionals. A conflict exists because the Wilshire Consulting and
Wilshire Funds Management personnel may be advising clients to hire or
fire these portfolio managers. A conflict would also exist if Wilshire
Consulting or Wilshire Funds Management personnel make
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recommendations or decisions portfolio managers who have invested in a

fund advised by Wilshire.
Because Wilshire provides a variety of advisory and other services

through separate business units, a client of one business unit may seek an
introduction to or information about the products or services of another
Wilshire business unit. A conflict of interest would arise if Wilshire
recommends its own products or services to an advisory client because
Wilshire would benefit from both the advice and the clients purchase of
products and services based on that advice.
Another area for potential conflict is between Wilshire Consulting and

Wilshire Funds Management. Wilshire Funds Management provides
discretionary and non-discretionary manager-of-managers services to
certain investment managers, as well as outsourcing solutions to financial
institutions, commingled funds, and mutual fund complexes. Wilshire
Funds Management receives compensation for providing these services to
investment managers or institutions that may also be recommended for
plan sponsors. Wilshire Funds Management also prepares the initial,
written manager research used by Wilshire Consulting in preparing
Wilshire Consultings recommendations.
It is the policy of Wilshire Associates that recommendations of portfolio

managers or custodians are based solely on the best interests of our clients.
Furthermore, employees in Wilshires Consulting, Private Markets, and
Funds Management business units do not have internal access to the
amounts that those clients pay Wilshire Associates for Analytics solutions
and services. However, it is possible that Wilshire personnel may become
aware of this information as a result of disclosure by a client, from public
sources or otherwise. Finally, Wilshire has adopted procedures to provide
clients of Wilshire Consulting directly with information about revenues
that we receive from managers and other financial services vendors.
d. Disclose all third party business relationships that exist with portfolio
managers, brokers and service providers (universe comparisons, etc.).
Wilshire Consulting does not have any third party business relationships
that exist with portfolio managers, brokers and / or service providers.
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5. List key personnel in the firm with brief biographies for each. Specify those
professionals who would be active in providing services to TRSL under the
proposed contract.
The TRSL consulting relationship would be serviced from the Pittsburgh office, where
David L. Lindbergs team is based. James (Jim) R. Neill, CFA, Managing Director is the
proposed co-consultant and Felicia F. Bennett, Vice President is the proposed back-up
consultant to the TRSL relationship. Other members of the proposed consulting team are
available to support the consultants and to provide back-up assistance as needed.
Biographical information on the proposed consulting team is provided in the table below.
David L. Lindberg, CFA, Managing Director. David joined Wilshire in 2001 to

provide investment consulting services to the firms corporate, public, foundation and
endowment clients in the Pittsburgh office. Prior to joining Wilshire, he spent twelve
years at Carnegie Mellon University where he was Assistant Treasurer and had
responsibility for $1 billion of endowment and plan reserve assets. David earned a B.S.
in Business from the University of Pittsburgh and an M.B.A with a concentration in
finance from Carnegie Mellon University. He is a member of the CFA Institute and the
Pittsburgh Society of Financial Analysts.
James R. Neill, CFA, Managing Director. Jim joined Wilshire Associates in 1999 to
work with the firms investment consulting clients. He has consulting experience with
many types and sizes of investment funds including corporate and public pension funds,
endowments, foundations, and religious organizations. Prior to joining Wilshire, Jim was
a Portfolio Manager and Equity Trader for Laurel Capital Advisors, a subsidiary of
Mellon Bank. His experience at Mellon Bank also included a position as a Senior
Financial Analyst in Mellon Private Asset Management. Jim is a Chartered Financial
Analyst charterholder and is a member of the CFA Institute and the Pittsburgh Society of
Financial Analysts. He earned a B.S. in Business and an M.B.A. with a concentration in
Finance from the University of Pittsburgh. Jim began his investment career in 1995.
Felicia F. Bennett, Vice President. Felicia joined Wilshire in 2006 to provide

investment consulting services to the firms corporate, public, foundation and endowment
clients in the Pittsburgh office. Prior to joining Wilshire, she spent five years at PPG
Industries, Inc. where she ran the Benefits Investment & Financing area and had
responsibility for over $5 billion of global defined benefit, defined contribution and
foundation assets. Prior to PPG, Felicia worked with Alcoa Inc.s $10 billion of U.S.
pension and foundation portfolios for three and a half years, and before that spent seven
years working as an analyst in the Planning and Treasury functions at Carnegie Mellon
University. She earned a B.A. in Political Science & German from Allegheny College
and an M.B.A with concentrations in finance and economics from Carnegie Mellon
University.
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Joseph Dressel, CFA, CAIA Senior Associate. Joe joined Wilshire in 2005 to provide
client service support in the Pittsburgh office. Joe is a CFA and CAIA charterholder and a
member of the CFA Institute, the CFA Society of Pittsburgh and the CAIA Association.
Joe earned a B.S. in Business Administration and a M.B.A. from Duquesne University.
Before joining Wilshire, Joe was a portfolio manager in the Private Wealth Management
group at Mellon Financial. Joe joined Wilshire in 2005 to work with the investment
consulting clients of the firm.
Christopher M. Shelby Jr., Senior Analyst. Chris joined Wilshire in 2007 to provide
performance measurement services and client support. Chris graduated from the
University of Pittsburgh with a B.S. in Finance and an Economics Minor.
Jordan Wittes, Senior Analyst. Jordan joined Wilshire in 2006 to provide performance
measurement services to consulting clients of Jim Neill. He received his B.S. degree
from the University of Pittsburgh. Jordan is a CFA level I candidate.
6. Provide any significant developments in your firm such as changes in ownership,

restructuring, personnel reorganization, terminations, or investigations in the past
five (5) years. Do you anticipate significant future changes in your firm?
Thomas Lynch, head of Wilshire Private Markets left Wilshire in December 2007.
Subsequently, Wilshire appointed the Wilshire Private Markets Management Committee
to overseeing the business unit. In June 2009, Kevin Nee joined Wilshire as President of
Wilshire Private Markets Group
Wilshires Chief Financial Officer and Director of IT, Bob Kuberek, retired May 31,
2008. John Hindman joined Wilshire as the new CFO, effective August 4, 2008 and Jeff
Hapeman was recently named Director of Information Technology and Chief Technology
Officer for Wilshire Associates.
Wilshires Chief Compliance Officer, San Slawson, retired on September 26, 2008, after
nearly 26 years of service to the firm. Aaron Eubanks joined Wilshire as the new CCO,
effective January 7, 2009.
Peter Matheos, Ph.D., Senior Managing Director of Fixed Income Wilshire Analytics left
Wilshire on August 16, 2010.
Other than continuing to expand ownership to other active key employees, no other near
term changes in Wilshires ownership structure or changes in the organization are
anticipated.
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7. What distinguishes your firm in the investment consulting industry? Please note
any significant contributions your firm has made in developing and defining best
practices in the defined benefit and/or defined contribution public pension fund
consulting field.
Wilshire has significant experience working with institutional investors in all aspects of
their needs. For the past 38 years, Wilshire has made major contributions in defining
best practices in the investment consulting field, which has set the firm apart as a
recognized leader in the field. It was Wilshire, for example, that created one of the first
asset / liability models for pension funds in the 1970s, ten years before actuarial and
accounting firms began to duplicate this technology. This model was later expanded to
include asset / spending policy simulations for foundations and endowments, to help
clients guard against the risk of erosion of the real value of their assets. We were also
among the first to recognize the importance of risk management, and produce and
distribute sophisticated investment management tools for such tasks as creating index
funds, optimizing portfolios, developing dedicated and immunized bond portfolios, and
measuring performance.
Wilshire also has extensive experience providing consultation to public pension plans.
Wilshire offers a unique combination of high caliber institutional investment consulting
services with a deep understanding of specialized fund management including socially
responsible practices. We are hands-on consultants who believe our approach is
differentiated among our peers, and we are confident in our abilities to add value through
a mutually beneficial consulting relationship with TRSL.
Unique Services
Wilshire Consulting gains valuable synergies from being part of a diverse firm focused
on the delivery of high quality investment products to the institutional investor
community. Wilshire is distinguishable from its competitors in many areas; however,
there are four areas where we believe we offer services which may not be offered by
other consultants is through our service model, research capabilities, technology, and
value adding benefits.
Advanced Service Model

There are two traditional service models within the Investment Consulting industry. The
first results in an account executive from a large firm where all resources are centralized
and the consultant presents work prepared by functional staff who may have never met
the client, such as manager search committees at some firms. The challenge with this
traditional model is that the account executive may not be familiar with the work he / she
is presenting and the personnel preparing the work may not have direct contact with the
client. This generally leads to one size fits all consulting solutions, despite the
availability of resources that could be used for more customized solutions. The second
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traditional model is the small boutique firm where there are usually one or two senior
consultants who do all the work and provide customized solutions. The challenge with
this approach is that the firm, often times, is small and does not have adequate resources.
Wilshires service model combines the best of both of these models. First, we service
clients using a team approach. Each team has a lead consultant supported by back-up
consultants and dedicated research analysts. While these teams can draw upon the
resources of Wilshire, including those of our other product groups, all of the work and the
custom solutions are developed and prepared by the client consulting team. Therefore,
clients get the depth of resources of a large firm and the personal service of a small firm.
With two or more senior consultants, in a lead and back-up role, clients are assured
complementary skills among the team members to meet all of our clients needs.
Wilshire believes the highest level of general consulting services to clients can best be
achieved with long-term relationships where we have an opportunity to fully understand
and appreciate the objectives, investment risk tolerance, legal obligations, and decision-
making dynamics of our clients. Our experience has verified our belief that for both
parties full-retainer arrangements are most effective for achieving such relationships.
Therefore, Wilshires standard fee structure is an annual retainer that includes all of the
stated services and many special services that periodically arise.
Extensive Research Capabilities

Wilshire relies entirely upon internal resources for its research efforts. Only daily stock
and bond pricing data and quarterly financial statement information are provided from
outside vendors (such as Compustat and Extel). Indeed, a significant portion of
Wilshires business is providing research and analysis to other organizations, including
almost thirty consulting firms.
We believe we have one of the most extensive information and technology resources
among all consulting firms. Our security databases cover over 10,000 U.S. stocks, 12,000
international stocks and all publicly-traded bonds. These databases, in some instances,
include monthly information going back twenty years and daily information for over ten
years. This allows us to back test investment strategies extensively.
Wilshire distributes all research reports to clients so that they are able to review trends
and opportunities in the capital markets. Wilshire presents the findings of its research to
clients through client mailings, the Internet, and client seminars. All of this is included in
our standard fee.
Advanced Technology Capabilities

Wilshire Analytics builds its own software, which it can control and customize in order to
meet clients needs. Our technological capabilities combined with the experience and
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skills of our consulting staff enable us to assist clients with almost any investment issue
imaginable.
Below is a listing of primary technology capabilities used to support Wilshire Consulting.
The Performance Measurement Group works on a proprietary Wilshire developed

Windows-based software application delivered through a UNIX server to staff PCs.
Wilshires proprietary performance measurement software systems combine the latest
innovations in performance attribution analysis with Graphical User Interface (GUI)
technology to yield a self-contained, highly flexible, fully networkable reporting software
package. The system is updated on an as needed basis, with periodic major overhauls
about every five years. No portion of performance production work is subcontracted to
an outside entity. Clients can access and print out completed performance measurement
exhibits and reports through the Internet, by accessing Wilshires home page and using
client password protection. Client reports are customized to report on specific client
portfolios, with comparison to selected indexes and universes.
The Wilshire Compass is a Windows-based software application that provides clients

with analytical tools to evaluate managers and asset allocations, as well as access to
Wilshire research. Wilshire Compass clients can receive updates to their software, which
includes extensive manager and index databases, via the Internet. The Wilshire Compass
is a desktop multi-tiered visual basic application with SQL Server 2000 as its database
engine.
Wilshires extensive databases, which are centrally managed, are also frequently used by
Wilshire Consulting. This includes securities pricing and fundamental characteristics for
equities, fixed income, and real estate and other assets. This is data that Wilshire receives
from a variety of external sources, and then monitors and warehouses centrally on a
server for access and use by the various systems and services delivered by Wilshire.
Other databases maintained are index and manager universe information, used principally
for the Wilshire Compass and the performance measurement system.
The Wilshire Quantum SeriesSM of software products, the Wilshire AtlasSM (U.S. and
non-U.S. Equity), and the Wilshire AxiomSM (U.S. and non-U.S. Fixed Income), are used
extensively for complex analysis on equity and fixed income portfolios. Wilshire
Consulting uses and incorporates into its own services, particularly through the Wilshire
Compass and the Performance Measurement system, the analytical tools developed on
the Wilshire AtlasSM and Wilshire AxiomSM for fixed income and equity analytics.
Wilshire also has a website (www.wilshire.com) where clients can access research
reports (i.e. Wilshire Perspectives), Wilshire index performance and composition, and the
Wilshire Compass downloads. Furthermore, Wilshire offers clients the ability to access
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historic monthly and quarterly performance reports through a fund-specific password-

protected area of our website.
All aspects of Wilshire Consulting capabilities are provided to clients through the
consultants as part of our full retainer fee. This includes manager research databases,
index performance, etc. If a client wants to work directly with specific tools such as the
Wilshire Compass or the Wilshire Atlas (equity portfolio global risk analysis), this can be
incorporated into our service fee offer.
Value Added Benefits

Our position in the marketplace often carries benefits that accrue to our clients. These
benefits can be direct financial items such as lower negotiated management fees or more
subtle matters such as access to limited investment products or to key investment experts,
or the ability to meet with or talk to other fund sponsors about important investment
issues. We also receive the investment managers first call on breaking investment news
or organizational issues.
In summary, Wilshire is a nationally recognized name in the investment consulting

industry. All of our clients benefit substantially from our commitment to investment
consulting, experience, investment technology, integrity, educational approach, and the
additional value added provided through our consulting services.
8. Does the firms consultants have additional responsibilities (such as marketing, etc.)
that are outside their primary consulting duties? If so, specify these responsibilities
and the approximate amount of time dedicated to each activity.
No. The consultants primary responsibilities are investment consulting.
9. Does the firm make periodic recommendations to the Board (i.e., annually, every
two years, etc.) with respect to current investments and future investment issues and
decisions? To what extent does the firm allocate time to forward thinking to keep
clients ahead of the curve on investment issues?
Wilshire's ability to provide advice and counsel to TRSL is a function of our service
model. Shared resources provide the background and nuts and bolts of addressing any
topic or issue that a client may face. The consulting team is ultimately responsible for
crafting Wilshires advice in a custom format within the context of the clients specific
circumstances and risk tolerance. Wilshire inherently recognizes the fact that no two
clients are alike and therefore addresses each one in a separate manner. Wilshire's bona
fides stem from the fact that we have led our entire industry in pioneering solutions to
problems pension fund clients face that have now been so commonly adopted, many
forget it was Wilshire who pioneered them, like integrated asset / liability modeling and
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Wilshire Consulting
equity style indexes. This leading edge philosophy that pervades the entire company can
be brought to bear in the service to the TRSL.
Wilshire Consulting strives to be a thought leader in the financial industry on behalf of

our clients. Our Investment Research Group, database resources, and analytics combine
to give us an advantage in the discovery, analysis, prudent implementation and ongoing
monitoring and review of new investment opportunities as they emerge and develop in
the marketplace.
Once a new trend or influence has been identified and researched, Wilshires research
results are circulated to clients and consultants through our white papers. In addition,
Wilshire distributes research on industry and market trends in three types of regularly
scheduled reports, namely, monthly and quarterly Wilshire Perspectives and our annual
Asset Allocation Report. These reports are sent to our clients and are available
electronically by email and on our website.
10. Does the firm typically initiate discussion on emerging issues or do you respond to
issues raised by clients? Can you describe previous recommendations made by your
firm to other clients and address why the recommendation was made, the
circumstances leading to the recommendation, and the relative success of the action
taken by the client?
Our goal is to provide timely and relevant client communications on a proactive basis.
While we seek to remain on the forefront of emerging issues, clients are welcome to raise
questions to us. To assist in these efforts, Wilshire consultants carry Blackberries and
cell phones and are in constant communication with their office and clients. Further,
Wilshire has established an omnibus email alias: teamlind@wilshire.com. TRSL staff or
Investment Committee members can email Wilshire and all members of the team
assigned to the TRSL account. If the lead consultant is traveling, Jim Neill will ensure
that requests are responded to in a timely fashion. If both David Lindberg and Jim Neill
are traveling, Felicia Bennett is responsible. As President of Wilshire Consulting, Julia
Bonafede backs-up all senior consultants. Her Biography is provided in the Appendix,
Tab 1. Wilshire recognizes that by providing multiple layers of support, we can ensure
that TRSL will be served.
Wilshires extensive track record, high client retention, and industry recognition are the
time tested results of our ability to assist clients in building successful programs. Special
services that we have provided to meet and exceed the needs of our clients vary based on
a clients history and objectives. These range from developing and implementing an
investment program from scratch to the refinement of an established program. The
following examples illustrate how we approach a clients unique situation to implement a
successful program.
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Wilshire Consulting
For a large Southwestern U.S. public pension fund, completely reviewed

asset allocation targets, recommended and implemented high yield, TIPS,
and Real Estate asset classes to improve the portfolios resilience to
possible unexpected inflation shocks. Also restructured public markets
investment program to incorporate greater risk controlled strategies and
reduced costs.
Hired by a large Northeastern U.S. corporate pension fund, evaluated and
implemented a portable alpha program that utilizes alternative investment
strategies like hedge funds and private investments as alpha sources,
combined with derivatives based techniques to manage exposure to the
asset allocation targets.
For a sovereign government fund, evaluated the inclusion of hedge funds
allocation in the portfolio. To satisfy the various goals of the fund that
have different investment time horizons, we segregated the entire fund
into Growth Fund and Permanent Fund segments, where the Growth Fund
holds the alternative investments (private markets, real estate and hedge
funds) while the Permanent Fund holds a diversified portfolio in
traditional investments. The implementation is currently in process.
Hired by newly created corporate plan sponsor to design and implement
operating funds investment portfolio. Involved merging of several entities
into single investment program, hiring of new custodian bank and
investment managers, investment policy development, manager guidelines
development, fee negotiation (implemented performance-based fees for
active managers), benchmark selection, asset allocation objectives setting,
among many other responsibilities.
Proposed comprehensive risk budgeting framework to a large state
pension fund for investment decision-making. Without this framework,
each investment decision was considered individually, without regard to
the effect on the risk for the total fund. After implementation, the fund
will have a target risk budget that the investment team will use allocate
capital to investment ideas with appropriate risk and return characteristics.
Created a new Total Fund Investment Policy to a large corporate pension
fund, and revised all asset-class specific investment policies. This project
was a clean slate review of all of the organizations investment policies
with a goal of simplification and clarity. In addition, Wilshire wrote the
organizations first ever Total Fund Statement of Investment Policy, which
clearly states the investment goals of the organization.
These examples range across several types of clients, illustrating that we regularly work
with clients on problems that are very specific and unique. Wilshire focuses on practical
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solutions using our investment expertise, research, quantitative tools and analysis,
detailed process, and a specialized focus on risk management.
11. State the number of clients, their total assets, and assets by client type for the
following June 30th dates:
Below is a distribution of Wilshire Consulting clients by asset size:
CORPORATE FOUNDATION / PUBLIC

SIZE (MIL) HOSPITAL TOTAL
FUNDS ENDOWMENT FUNDS
$0 $100 10 10 3 0 23
$101 $500 12 19 6 5 42
$501 $1,000 10 3 1 6 20
$1,001 $5,000 15 2 1 8 26
Over $5,000 5 0 0 9 14
Total 52 34 11 28 125
Total Assets $77.9 Bil $9.2 Bil $3.5 Bil $554 Bil $644.6 Bil
Wilshire Consulting clients have an average tenure of nine years and a median account
size of $500 million.
12. Has your firm lost any clients, or portion of a clients business, in the last five years?
If so, please provide the names and contact information of the four (4) most recent
such clients.
We encourage you to contact clients. However, as a matter of courtesy, we would

appreciate the opportunity to contact our clients first before any reference checks are
made. Therefore, we request that you contact David Lindberg at (412) 434-1580 should a
reference check be required with any of the clients list below. All the clients listed are
full-retainer consulting relationships.
BayCare Health System

Mr. Jeff McRae, Treasury Manager
Phone: (727) 820-8047
Buchanan Ingersoll PC
Mr. Hank Winfield, Plan Administrator, Chief Financial Officer
One Oxford Centre
301 Grant Street, 20th Floor
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Phone: (412) 562-3994

Email: winfieldhm@bipc.com
Pennsylvania Tobacco Endowment

Ms. Lauren Lenfest
Executive Director
Dept. of Community & Economic Development
400 North Street, 4th Floor
Commonwealth Keystone Building
Harrisburg, PA 17120
Phone: (717) 720-1359
Evangelical Lutheran Church in America

Dave Lecander
800 Marquette Avenue
Minneapolis, MN 55402-2812
Phone: (612) 752-4240
13. How many asset allocation studies has your firm done in the last three years? When
was the last asset allocation study completed? If you were conducting an asset
allocation study today what return and risk assumptions would you use?
Wilshire has completed approximately 168 asset allocation studies in the last three years.
Asset allocation studies are conducted on an ongoing basis.
Our annual Asset Allocation Report, which outlines the expected risk and return
assumptions for all asset classes, is the basis for all asset allocation work done for
consulting clients throughout the year. The assumptions used in our asset allocation
model are completely developed in-house by Wilshire Consultings Investment Research
Group.
Wilshire believes that the quality of asset class assumptions for return and risk is at least
equally important as the sophistication of its asset allocation technology. Clients
comment favorably upon the intellectual process Wilshire uses to forecast asset class
expected returns, risk, and correlations. Common practice is to simply extrapolate past
performance in projected future performance. Wilshire looks at past performance as
well, but relies more heavily upon forward-looking valuation models intended to capture
market consensus expectations. For example, a dividend discount model is used to
forecast stock returns and Treasury Inflation Protection Security (TIPS) yields are
compared to traditional Treasury yields to forecast inflation. Wilshire published a paper
in The Journal of Portfolio Management (1997) describing a unique method for
forecasting returns and risk on alternative investments. This is particularly important
because most practitioners overstate returns and understate risk on alternative
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Wilshire Consulting
investments. Wilshire prepares a research report for its clients at the beginning of every
year describing its recommended long term asset class return and risk assumptions for all
the asset classes. This asset allocation report is a perennial favorite among Wilshire
clients and others and describes in detail how Wilshire develops its assumptions.
Following are Wilshires forward-looking return, risk, and cash flow assumptions for the
major asset classes covered in our annual Asset Allocation Report, as of January 2010.
Total Return Risk

MY MY
2009 2010 Change 2009 2010 Change
Investment Categories:
U.S. Stocks 8.00 % 7.50 % 0.50 % 16.00 % 16.00 % 0.00 %
Dev ex U.S. Stocks 8.00 7.50 0.50 17.00 17.00 0.00
Emerging Mkt Stocks 8.00 7.50 0.50 24.00 24.00 0.00
Global Stocks 8.20 7.75 0.45 16.00 16.00 0.00
Private Markets 11.15 10.00 1.15 26.00 26.00 0.00
Cash Equivalents 2.25 3.00 0.75 1.25 1.25 0.00
Core Bonds 4.25 4.25 0.00 5.00 5.00 0.00
TIPS 3.50 3.75 0.25 6.00 6.00 0.00
High Yield Bonds 6.75 6.00 0.75 10.00 10.00 0.00
Non U.S. Bonds (Hdg) 3.90 3.90 0.00 4.00 4.00 0.00
U.S. RE Securities 7.25 6.50 0.75 15.00 15.00 0.00
Private Real Estate 7.90 7.35 0.55 12.25 12.25 0.00
Commodities 3.75 4.50 0.75 13.00 13.00 0.00
Real Asset Basket * 6.65 6.75 0.10 7.50 7.50 0.00
Inflation: 1.75 2.50 0.75 1.75 1.75 0.00
Total Returns minus Inflation:
U.S. Stocks 6.25 5.00 1.25
U.S. Bonds 2.50 1.75 0.75
Cash Equivalents 0.50 0.50 0.00
Stocks minus Bonds: 3.75 3.25 0.50
Bonds minus Cash: 2.00 1.25 0.75
* The 2009 MY return/risk uses 2009 MY forecasts with 2010 real asset sub asset class component weights
These assumptions are intended to apply to a 10 year planning horizon. A full analysis of
Wilshires asset class assumptions can be found in our 2010 Asset Allocation Report,
which is provided in the Appendix, Tab 2.
14. Referring to the asset allocation information provided in Exhibit D, comment on the
current structure of TRSLs total portfolio.
Wilshire will provide a thorough evaluation / recommendation of TRSLs investment

structure if selected as the investment consultant. As a Registered Investment Adviser
and Fiduciary, any recommendation(s) Wilshire offers TRSL in absence of a binding
legal agreement, is outside the scope of our approved legal and business best practices.
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Wilshire Consulting
However, taking into account Wilshires extreme interest in working with TRSL, and in
lieu of providing specific investment structure recommendations without a binding legal
agreement, please refer to Appendix, Tab 3 for a defined benefit case study outlining
Wilshires philosophy and approach to recommending / evaluating investment structure
for a large, public defined benefit plan. Additionally, a sample investment structure has
been included in the Appendix, Tab 4.
15. How many liability studies has your firm done in the last three (3) years? When was
the last liability study completed? If you were conducting a liability study today,
what are the primary areas that should be addressed?
Wilshire recommends performing an asset / liability study at the inception of a new

relationship. This initial study is intended to help your consulting team gain a better
understanding of your plan and insure that your fund currently has the optimal asset
allocation given your objectives. Wilshires standard practice is to conduct subsequent
asset / liability studies once every three to five years. These studies should be conducted
more frequently if there is a meaningful change to the plan, such as a freeze in new
benefit accruals, or change to the financial condition of the plan sponsor. In the past
three years, Wilshire has conducted approximately 168 liability studies. Studies are
conducted on an ongoing basis.
Wilshire has extensive experience in providing clients with ongoing advice and specific
analyses for effective liability management. With pension plans, most investment
policies are derived from a review of the liabilities of that plan. The liability
management software maintained at Wilshire is based upon a standard mean variance
optimization system. Liabilities are especially sensitive to changes in interest rates,
making those liabilities highly correlated with the fixed income market. By analyzing
assets and liabilities together in the optimization framework, Wilshire is best able to
understand the way assets and liabilities will move together for different asset mix
strategies.
Finally, the Wilshire model can project simulated results into the future, allowing clients
to simulate possible future outcomes of alternative investment strategies over a period of
ten years or more. Specifically, the models can hypothetically project the expected value
of the investment deficit or surplus under alternative investment strategies after ten years.
All else being equal, clients should elect to employ an investment program that seeks to
reduce a deficit or increase a surplus over time. However, the control of (deficit) /
surplus volatility is also important. The Wilshire models measure the impact of higher
levels of equities on the volatility of the (deficit) / surplus. Thus, clients are also able to
hypothetically pre-experience the potential year-to-year changes in the (deficit) / surplus
for each alternative investment strategy.
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Wilshire Consulting
Asset / Liability Modeling

Wilshire employs all internally developed proprietary asset/liability models which can be
customized based upon our clients respective needs and benefit structures. Our model
works by jointly projecting the asset and liability characteristics of a benefit plan for
periods up to 20 years. It is a Monte Carlo program that simulates thousands of
possible investment returns for each of several asset mixes on the efficient frontier or any
pre-selected asset mix. These simulations are based on the return, risk and correlation
projections as projected by Wilshires annual asset allocation study. Our model
simultaneously projects liabilities, contributions and benefits consistent with the plans
cost method, investment assumptions, and actuarial assumptions for equivalent periods of
time. Asset projections and liability projections are integrated and internally consistent.
Efficient Frontier
9.0%
8.5%
Policy F
8.0%
Policy E
7.5%
Return (%)
Policy D
7.0%
Policy C A B C D E F
6.5%
Stocks 0% 20% 40% 60% 80% 100%
6.0% Policy B Bonds 100 80 60 40 20 0
Return 5.5 6.2 6.8 7.5 8.1 8.8

5.5% Policy A
Risk 7.0 7.6 9.3 11.6 14.2 17.0
5.0%
6.0% 8.0% 10.0% 12.0% 14.0% 16.0%
Standard Deviation (%)
For most clients, the modeling begins with a selection of five to ten different efficient
asset mixes. Efficient asset mixes are those that offer the highest level of return for a
given risk level. Wilshire uses its return, risk, and correlation (or diversification)
forecasts to generate an efficient frontier containing a range of efficient mixes. The
figure above shows an example. Wilshire, with client input, selects a number of these
efficient asset mixes to be used in the asset / liability simulation. The two figures on the
page below show example output from the simulations: future contribution rates and
assets-to-liabilities after 10 years.
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Expected Contribution Rates

85
80
75
70
$ Millions
65 Po licy D
60 Po licy C
Po licy B
55 Po licy A
Curre nt Po licy
50
45
40
2 00 1 20 02 2 00 3 2 00 4 20 0 5 2 0 06 2 00 7 20 08 20 09 2 01 0 20 11
Ye a r
Distribution of Possible Ratios of Assets-to-Liabilities after 10 Years
2.50
2.40
2.19
2.00 2.00
1.83 1st Quartile
1.77
2nd Quartile
Ratio
1.50 1.50 3rd Quartile

1.42
1.35 4th Quartile
1.24 1.28
Initial Ratio
1.10 1.13
1.04 1.07
1.00 1.01
0.87 0.87 0.88 0.89 0.91
0.85
0.65 0.66 0.65 0.64 0.63

0.50
Current A B C D
Policy
The figures above are only two examples of hundreds of possible types of output that
Wilshire generates from its asset / liability simulation. Consultants select those analyses
that they believe best fit the factors that their clients are interested in. Wilshires
extensive software inventory in asset allocation gives clients the ability to examine asset
allocation issues from many different perspectives. Simulation software is available for
actuarial funding, FASB projections, stress testing, spending formula, asset / liability
matching, surplus optimization and much more.
Optimal Asset Mix

Wilshire works closely with clients to determine the optimal asset mix for their needs.
This also means deciding how much risk to take. This can only be done by close
evaluation of the tradeoffs between long-term funding and possible short-term losses
from negative investment returns. The clear identification of objectives and the hierarchy
of the objectives is an important part of this strategy. We have found that there is no
simple formula; rather, our responsibility is to give the decision-makers the information
and tools they need to be thoroughly informed.
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Wilshire Consulting
After selecting the optimal asset mix, Wilshire helps formulate policy ranges for each
asset class and when to rebalance to target weights.
16. Describe the primary role that equity (domestic and international), fixed income
(domestic, international/global, investment grade/high yield), private market
investments (private equity, real assets, and debt related) play in the total portfolio.
Wilshire develops an investment strategy for each of the asset classes chosen during the
asset allocation process. We emphasize the following goals during this process:
Limiting active management to managers who have demonstrated an

ability to add value versus their appropriate benchmark
Reducing management fees and controlling other costs where appropriate
Removing factor risk within the relevant asset classes
The steps we follow to develop the optimal investment structure are outlined below:
Review Investment Structure

After completing an asset allocation study, Wilshire reviews the clients current
investment structure in the context of the new investment policies and objectives. Has
the current structure achieved the funds objectives in the past? Is it likely to achieve the
funds revised objectives in the future? Are there redundancies in the current structure,
or risks that arent properly controlled?
Select Asset Class Benchmark

Benchmark selection determines asset class return and risk characteristics indirectly, by
influencing money managers behavior, and directly, if index funds are used to replicate
the benchmarks. Wilshire begins by assisting the fund sponsor in selecting an
appropriate performance benchmark for each asset class, and the plan in aggregate. We
also work with clients who want to customize benchmarks which will exhibit higher
long-term returns or a lower risk profile, and which adequately meet a clients individual
risk / return tolerances.
Evaluate Alternative Investment Strategies: Active / Passive, Style / Size Tilt

The advantages of active versus passive management vary by asset class and fund size.
Wilshire was one of the first consultants to advocate index funds for U.S. stocks,
particularly for the larger S&P 500 issues. However, we discourage passive alternatives
in markets that are not efficient or in markets where we believe managers can
consistently add value.
For equities, we begin by examining the three basic alternative structures:

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Wilshire Consulting
All passive, style / size neutral

All active, style / size neutral
Mix active / passive, style / size neutral
To determine which is optimal, one must examine the following questions:
How much in index funds?

How is this decision made and what are the criteria?
Which index should be used?
Are index plus funds attractive?
Do style indices add anything?
Are core managers better (worse) than combining specialty managers?
How many managers? How do we weight them?
What disciplines should we have for rebalancing?
How should currency hedging be handled?
Should portable alpha be considered?
For large capitalization U.S. equities, we believe the market has become increasingly
efficient. We believe neither a style bias to value or growth nor a small cap bias will
generate excess returns above the broad market, and passive management is an important
strategy for large pension plans to consider. In increasingly efficient markets, passive
management provides market exposure at a minimal cost (management and trading) to
institutional portfolios. Passive management also reduces the administrative and
investment monitoring burden to in-house staff.
We have recommended to a number of clients that they substantially index the largely
efficient large capitalization U.S. equity segment of their portfolio. This strategy is often
complemented with a balanced application of active large capitalization core, enhanced
index, or, value and growth managers. In the less efficient U.S. small cap equity
segment, we often favor the retention of active managers over passive managers.
Our research staff is focused on identifying the best implementation plan for U.S.
equities, which for most plans represent between 40-60% of total assets. Our strategy is
to build portfolios that are style neutral, have an appropriately sized allocation to index
funds to reflect the markets efficiency, and to help minimize costs of management fees
and transaction costs from turnover.
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We use Wilshires style metric model to identify style risk across the manager team. The
total equity composite can be plotted as well, to determine overall style bias. An
unintended bias can be measured in a number of ways, including re-weighting managers
(optimization where risk is measured versus a style neutral position) or through the
addition or deletion of managers.
We believe the fixed income markets, unlike the equity markets, offer systematic
opportunities with positive long-term returns. Systematic risk factors include: interest
rate risk, credit risk, and prepayment risk.
Our approach to fixed income is to identify the target duration (for young to average age
plans this is typically the market duration) and the optimal weight to each fixed income
sector. We believe that accepting a higher level of prepayment and credit risk can reward
investors over three to five year periods.
We further believe that a small group of fixed income managers have developed good
research across fixed income sectors and thus we favor a generalist approach where one
manager makes small shifts across sectors to capture returns from changing spreads.
In terms of non-U.S. fixed-income investing, we recommend utilizing the leading

handful of fixed income managers who invest internationally on an opportunistic basis
and treat this area as a separate sector. Depending on the clients plan size, high yield
would be managed the same as non-U.S. fixed-income or as a separate allocation.
In terms of non-U.S. equity we do not find the returns from active management due to
stock selection to be superior to U.S. managers. On the contrary, we find the selection of
a long-term weighting to economic regions is the most important decision for successful
results. Our research shows that, on average, active managers lose 1% per year from
stock selection because of the high transaction costs in foreign markets. Managers who
outperform the benchmark generally achieve their results by making good long-term
allocations to economic regions. We focus our analysis on the regional and country
exposure managers are taking.
We believe the developed non-U.S. markets are becoming more efficient and some
segment of this market should be passive. Active emerging markets exposure in this
asset class can help enhance value and reduce overall risk. Our research indicates that the
optimum allocation to emerging markets within a non-U.S. equity portfolio is similar to
their capitalization weighting in the broad based non-U.S. equity benchmarks.
Wilshire uses the same approach for real estate as well as other private market and
hedge fund investments, but allows for lower returns, provided the investment offers
lower risks. In areas of real estate and private markets, Wilshire recommends a
diversified portfolio across market sectors.
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Wilshire believes derivatives can be successfully used to help minimize risk in a portfolio
if used judiciously. We see the primary purposes as substitution for the cash market
instrument, hedging to facilitate risk control and to a lesser extent arbitrage. We do not
support the use of derivatives to speculate, nor do we support the employment of
excessive leverage. We will assist in the drafting of manager guidelines to ensure that
derivative risk is properly managed and monitored.
Investment Structure
We believe that the best investment structures incorporate all the elements of our basic
approach, which are designed to manage risk exposures and reduce costs. However,
because each client is different, each clients investment structure will be drawn
individually taking into consideration the fund size and risk tolerance to optimize the
potential for meeting the clients objectives.
17. Please describe your qualifications and expertise in monitoring private market
assets (e.g. real assets, debt related assets, and private equity).
Wilshire has extensive experience in working with private equity and real estate, as we
believe it plays a strategic role for long-term investors. A brief summary of Wilshire
Consultings experience is provided below:
Private Equity
Wilshire has a long history of providing investment consulting services in private equities
to plan sponsors. We were one of the first general consulting firms to recommend this
asset class to our clients in the early 1980s before it was even recognized as an asset
class for institutional investors. While initially Wilshire Consulting worked with clients
to build private equity programs partnership by partnership, we have since transitioned to
recommending private equity fund of funds as this is the optimal private equity
implementation strategy for the majority of our clients.
Wilshire currently has 56 clients invested in private equities and the total market value of
these investments is $47 billion (as of 09/30/09). Their private equities consist primarily
of both venture capital investments and leveraged buyouts; however, these investments
also contain distressed debt, non-U.S. private equities, mezzanine and other loans, etc.
Our clients private equity allocations generally have between a 70% and 80% allocation
to debt-oriented private equities and 20% to 30% in venture capital type investments.
Over the years, we have worked with many clients in the development of private equity
policy statements and even developed a means of benchmarking private equity
investments using public market proxies. We created a performance analytic within our
performance measurement system for this asset class and can report market benchmark
returns using IRR methodology for a better comparison to our clients private equity
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Wilshire Consulting
portfolios. We also have begun producing an annual private equity fund of funds
provider evaluation report as an internal tool to assist consultants in our respective work
with our clients in identifying top tier private equity fund of fund providers.
To evaluate private equity fund of fund managers, Wilshire has established an asset class
committee comprised of three senior consultants and a research associate. The private
equity committee is responsible for general market research on the asset class and
researching and selecting a universe of institutional quality private equity fund of fund
managers. These managers must complete a Wilshire RFI and meet with the committee
in order to be considered for a search. The committee will then conduct onsite due
diligence meetings with every manager that fulfills our evaluation criteria. The following
exhibit illustrates our private equity fund of funds manager evaluation process.
In terms of evaluating performance, Wilshire analyzes the individual fund IRRs versus
the Venture Economics universe of private equity funds by fund type for the same
vintage year. For example, we would evaluate Fund XYZs 2000 vintage year Early
Stage venture capital fund versus the Venture Economics universe of 2000 vintage year
early stage venture capital funds to see where Fund XYZs results ranked in order to
determine the relative success of the fund. We also compare fund results versus an asset
class benchmark of the Wilshire 5000 + 3% to see if the class of funds is meeting the
broader objective for private equity funds in general.
We do not put much emphasis on funds where the vintage year is less than five years old
as early performance results are generally not indicative of the long term success of the
fund. Instead, we look at a particular private equity fund-of-fund managers prior fund
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Wilshire Consulting
offerings of the same type of fund to determine what the probability of success may be.
For example, if the vintage year of Fund XYZs current LBO fund is 2006, we would
look at prior LBO funds with vintage years greater than five years old to assess the
progress of the performance in the current LBO fund. Additionally, we would look to see
how those prior funds performed against our asset class hurdle rate for LBO funds, in
general as well as versus the Venture Economics universe data for comparable vintage
year LBO funds. We also look at the fund strategy and expected sub-strategy allocations
are to determine the probability of success based upon our understanding of the current
and expected factors driving private equity results.
We believe our strengths lie in our unique, proprietary private equity database of
approximately 40 fund of funds managers, our client base of large, sophisticated plan
sponsors, most of which employ private equities, and the experience of our private equity
fund of fund specialists, which reside within Wilshire Consulting. We believe the
complexities and nature of the private equity asset class require a higher level of
experience in manager evaluation than for traditional asset classes, which are ably
covered by the analysts within Wilshires Manager Research Group. However, since
private equities are illiquid and plan sponsors must be comfortable with the long term
nature of the relationships with the private equities fund of funds managers, we prefer to
have experienced consulting staff oversee our evaluation and monitoring efforts in
private equities. We do not believe we have any weaknesses in this area since we were
one of the first, if not the first, consulting firm to research and subsequently advocate
private equities to our clients.
18. Please describe your qualifications and expertise in selecting, implementing and
monitoring hedge funds, including fund of funds managers.
Wilshires search process for conducting a hedge fund-of-funds manager search starts
with the individuals within Wilshire Consulting who are responsible for following hedge
fund-of-funds. They conduct ongoing evaluation, monitoring and in-depth research of
manager products using our comprehensive manager database, formal scoring process,
and extensive consultant involvement through investment committees.
The following exhibit illustrates the manager evaluation process:
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Manager Database
Consultant Manager
Review Manager Scoring Questionnaires
Committees
Ongoing Manager
Meetings
Manager Database
Wilshire collects and maintains its proprietary and internally developed database of
investment managers and advisors. Currently Wilshires investment product database is
divided into the following major groupings:
CURRENT NUMBER OF
ASSET CLASS INVESTMENT PRODUCTS
U.S. Equity 3,741
Non-U.S. Equity 1,780
U.S. Fixed Income 1,289
Global Fixed Income 466
TOTAL 7,276
Our internally developed database also holds 389 hedge fund-of-funds investment
products and 569 hedge fund products. We maintain separate databases of approximately
70 private equity fund-of-funds products and 50 private real estate managers. In addition,
our real estate database has more than 100 managers.
Hedge fund-of-fund managers are generally scored as follows:
Organization and Firm (15%)

People and Experience (15%)
Product (15%)
Investment Process Portfolio Construction (20%)
Investment Process Risk Management (20%)
Fees (15%)
Manager Questionnaires
Wilshires manager data is collected directly from managers through their responses to
our quantitative and qualitative questionnaires and website data submissions. Wilshires
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databases are unique in that actual equity manager portfolios are input into our databases
so that portfolio characteristics can be calculated in a uniform fashion across all
managers, making manager comparisons more accurate.
Quantitative Information: Wilshire utilizes an internally developed web-based data

collection facility, known as Wilshire Odyssey, to help managers and Wilshire in the
creation and retrieval of quantitative information. This information is then input into our
proprietary Wilshire Compass system. Our quantitative questionnaires are designed to
provide comprehensive profiles of managers who extend beyond just performance
numbers and include general business information such as key professionals, investment
process, research sources, investment style, fees, and performance, including how
performance is calculated. Additionally, we also process portfolios submitted by
managers. Performance data, of course, goes back to inception of the investment product
and is maintained on at least a quarterly basis. Wilshire also requests a response from the
manager regarding CFA Institute compliance and outside audit verification. Minority-
owned, women-owned, and disabled veteran-owned managers are incorporated into the
Wilshire database in the same manner as other managers, according to asset class.
Wilshire uses its security databases to calculate portfolio characteristics, which are
consistent across managers and over time. This capability also differentiates Wilshires
databases from others. For hedge fund-of-fund managers, we compile the following fund
terms and details:
Style (e.g., market neutral, multi-strategy, etc.)

Philosophy
On-shore vs. Off-shore (potential for UBTI issues for ERISA clients)
Fund structure (e.g., master feeder, etc.)
Target Return
Target Risk
Legal entity (e.g., LP, etc.)
Hurdle Rate
High Water mark
Leverage
Gate provisions
Redemption penalties
Fees
Lock-ups
Performance
AUM
Registered Investment Adviser
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Risk Management characteristics (Leverage, Hedging, Liquidity,

Diversification, and Overall risk management approach)
Fund Administration
Systems description
Fund Compliance
Fund Counterparties
Legal issues
Potential for conflict of interest
Qualitative Information: Wilshire collects and maintains a universe of qualitative

questionnaires submitted by investment managers for the products they offer. Three
types of questionnaires are collected from each firm: one addressing the firm, one
addressing the asset class and one that is product specific. These questionnaires are
maintained electronically. Additionally, Wilshire collects and maintains all marketing
presentations, manager news and manager letters electronically.
Wilshire places much greater emphasis on the assessment of qualitative variables when
evaluating organizations and their respective products. Our manager selection and
review process is labor-intensive and forward-looking, with predominant weighting given
to qualitative factors that we believe are supportive of possible manager out-performance
in the future. Key characteristics that Wilshire may focus on are:
Organizational and / or ownership structure that promotes professional

stability, organic growth and a commitment to excellence.
A compensation structure that clearly and effectively aligns investment

professionals and clients interests (e.g., a significant portion of
professional compensation is tied to client investment results).
A stable, cohesive and seasoned investment professional staff with strong

leadership.
A clearly articulated investment philosophy that is well supported by

empirical evidence.
A disciplined investment process that can consistently capture an

inefficiency or anomaly in the market.
Clear lines of decision making authority and accountability.
Consistent, risk-adjusted performance.
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Competitive and reasonable fees.
Ongoing Manager Meetings

Another important part of our manager evaluation process is manager meetings, which,
for hedge fund of funds, are conducted on an on-going basis by our investment
consultants, who all have deep experience in manager evaluation and monitoring.
Wilshire conducts meetings both at Wilshire offices and on-site at manager offices.
When conducting an on-site visit, our manager research specialists spend several hours in
an investment managers office, meeting with key investment professionals, senior
business management professionals and operations professionals on an individual basis.
Wilshire observes the investment process (e.g. attend investment meetings), reviews
internal research, assesses portfolio management / research tools (e.g. databases,
valuation models, etc.), reviews compliance procedures, and assesses trading capabilities.
Manager research professionals and consulting staff meet with approximately 1,500
managers per year. Our extensive dealings with managers have allowed us to develop a
manager due diligence checklist that details specific issues that should be explored during
on-site visits.
Review Committees
After all products under consideration have been given a preliminary score, Wilshire
consultants become actively involved in the process through Product Review
Committees. Wilshire consultants experience specifically contributes to the manager
research process. Every category is overseen by a Product Review Committee made up
of at least three senior consulting professionals. The Committees role is to interview the
top manager candidates and assign final product rankings. The product evaluations and
rankings are used by all Wilshire consultants to assist clients in the selection of new
products and the evaluation of existing products.
Screening Variables and Capabilities

The consultant then works with the client to determine screening criteria so that a suitable
candidate list can be identified. The clients input is critical at this step of the process.
Our manager database allows us to screen for over 100 different criteria, including
special circumstances.
19. Provide a sample report (monthly, quarterly, and/or annually) that could be used
for TRSLs account.
Wilshire provides investment performance results to its clients in three formats. First, in-
depth performance books are produced quarterly. These reports contain audited and
reconciled performance numbers for all managers and composites in the portfolio, in-
depth analyses of managers and composites, portfolio asset lists, and flow of funds data.
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Second, our consulting staff produces a customized Executive Summary each quarter that
filters the results in the performance report into a format more easily understood by
committees and board members. These reports contain commentary on market
conditions, our interpretation of fund, asset class and manager performance, and our
recommendations for the client. A sample Executive Summary is provided in the
Appendix, Tab 5.
Third, Wilshire generates Monthly Flash reports for clients who request them. These
reports contain the returns for each manager and composite for the most recent period,
and would only be a few pages long. A sample monthly Flash Report is provided in the
Appendix, Tab 6.
20. How would you describe your relationship with your clients? Is this relationship
different for public funds versus other funds (corporate, endowment, etc.)? Please
specifically address the relationship in terms of decision making and reaching a
consensus with staff when differences of opinion exist (i.e., how is the staff and/or
Board involved)?
Wilshires senior consultants develop relationships with each client and nearly all are
different. We believe the differences among client types are natural and require a well
established relationship between the consultant and the client in order to reach effective
decisions. Wilshire has recognized this characteristic of client service for many decades
and has structured the service delivery model in a team fashion for this primary reason.
We limit the number of clients each consulting team serves in order to enable the time
necessary to build an effective client-consultant relationship in each case. Wilshire
builds and maintains strong relationships with staffs and Boards. Our deep experience
with all fund types is a competitive advantage for us and our ability to provide client
service.
A robust structure comprised of an interwoven team is utilized to provide the highest

level of service that Wilshire can deliver. Wilshire consulting teams holds weekly team
meetings to discuss current and upcoming projects. In addition, a monthly Consulting
conference call provides an update on other teams projects and serves as a sounding
board for new ideas and discussion.
An illustration of the communication pipeline, which is applicable to all client

relationships, is provided in the following diagram:
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Consultant Team
Specialized Research Clients foremost link Manager Research
Involved in all aspects
Asset / Liability Qualitative
Leads deep service team
Asset Allocation Quantitative
Asset Class Manager Databases
Topical
Senior Associates & Dedicated Research

Associates Analysts
Strong, capable back -up TRSL Analyze Manager Performance and Data
Leads Manager Searches Customized Research Projects
Oversees Performance Reporting

Wilshire Research Technology
Weekly Team Meetings Wilshire Compass
Investment Industry Research Monthly Division Meetings
Security Valuation Research Wilshire AxiomSM
Wilshire AtlasSM
Market Awareness Quarterly/On-demand client meetings Performance
Monthly Flash Reporting
Password-Protected Client Web -Access Market Databases
TRSL can view Wilshire as an extension of staff. We are available to assist in any way
possible to facilitate the accomplishment of the funds long-term and short-term
objectives. Because Wilshire bills clients on a retainer basis, there is no need to worry
being billed incrementally for time spent on the phone discussing issues or for time spent
in crafting responses to staff questions.
Your proposed lead consultant, David Lindberg, has overall responsibility for the
management of Wilshires relationship with TRSL, including any services or
recommendations we provide. He will ensure that regular communication is maintained
with TRSL and that appropriate resources of Wilshire Consulting are employed. David
will be assisted by Jim Neill and Felicia Bennett, who will serve as relationship back-up
and work closely with David with respect to consulting services and advice provided to
TRSL. They will maintain detailed knowledge of your plan and its investments, and they
are available to assist with day to day communications projects, and meetings.
Ultimately David Lindberg, serving as the lead consultant, is responsible for quality
control and decision-making. The support personnel have a peer review system where
before work is sent to David for review, it is reviewed first by a peer also assigned to the
TRSL account (i.e., Jim Neill and / or Felicia Bennett). The structure of the staffing for
the TRSL account provides for supervision at all levels and also ensures that a consensus
is reached among the team. Support personnel are supervised by senior consultants who
are responsible for quality control and the decision-making process.
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21. In addition to the specific information requested on fees in Exhibit B, please address
any philosophical or practical preferences you have for the compensation structure
and working relationship with TRSL.
Wilshire believes the highest level of general consulting services to clients can best be
achieved with long-term relationships where we have an opportunity to fully understand
and appreciate the objectives, investment risk tolerance, legal obligations, and decision-
making dynamics of our clients. Our experience has verified our belief that full-retainer
consulting arrangements are most effective and beneficial for both parties. Therefore,
Wilshires standard fee structure is an annual retainer that includes all of the stated
services and many special services that periodically arise. Full-retainer consulting
relationships are the most economical way for clients to take advantage of our
capabilities and resources. Wilshires annual retainer fee is all inclusive. As a result,
there would be no separate non-recurring fees or charges associated with account set-up
or transition.
The consulting services in the full-retainer relationship include:
Asset / liability valuation analysis

Investment policy development
Asset class analysis and structuring
Investment manager searches
Public market managers
Alpha transfer programs
Commingled real estate
Fund of funds private equity
Fund of funds hedge funds
Investment manager fee negotiation
Investment manager objectives and guidelines
Custodial searches / record keeping and other vendor searches as
appropriate
Meetings with the investment committee and /or Board
Meetings with investment managers
Quarterly performance measurement reporting
Access to Wilshires topical research reports
Participation in Wilshires annual client conference
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Customized client education
22. Describe the working relationship that you would want with TRSLs outside
actuarial firm.
While our annual Asset Allocation Report is generated completely in-house, Wilshire
consultants will work closely with the client to incorporate the investment professionals
views on the capital markets in testing different projected scenarios. We realize that no
matter how thoughtful and well-developed our assumptions are, they are still assumptions
and there is room for differing views and for analysis of the impact that different views
would have on optimal asset allocation.
23. Describe your firms ability to assist TRSL with a defined contribution plan (e.g.
higher education optional retirement plan).
Wilshire Consulting has been providing investment evaluation and strategic consulting
services to retirement plans since 1981. As a recognized leader in consulting services to
defined benefit (DB) plans, Wilshire consults to some of the largest pension funds in the
world. Most notably, CalPERS has been Wilshires retainer client for over 20 years.
As defined contribution (DC) plans increasingly become the main retirement savings
vehicle for American workers, and as DC plans grow very large in size, the industry is
entering a period of profound changes. These changes can be summarized in one
observation: increasingly DC plans are becoming institutional investors that desire
institutional investment programs, and institutional pricing and transparency, instead of
the historical set up of a menu of discrete mutual funds.
Wilshire is well positioned to introduce DB plan characteristics and investment

advantages into the DC plan framework. We see large defined contribution plans that
can use DB techniques as the growth segment of our consulting practice.
Given Wilshires position in the industry, we are also able to leverage our knowledge of
the money management industry to best benefit the DC plan participants. Wilshires
consultants and the Manager Research Group have intimate knowledge of the strategies,
organizations and individuals that could be involved in the investment options which may
be available to the plan.
a. Does your firm have any defined contribution clients? If so, describe
the scope of services including:
Wilshire has considerable defined contribution consulting experience.

Currently, Wilshire Consulting provides consulting services to 30 defined
contribution plans: four (4) IRC Section 457 plans and 26 401(k) plans.
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Wilshires services to DC plan sponsors include: plan investment structure

design, custom lifecycle funds glide-path design, investment option
review, investment option search, record keeper search, performance
measurement, and education development assistance.
i. Investment structure design
Our overall investment philosophy and approach is to provide

customized solutions for each client, help each client allocate
active risk in the most efficient manner and minimize the total cost
a plan pays while achieving attractive long term results.
This philosophy suggests a set of cost-effective, core fund

offerings that span the risk and return spectrum, allowing defined
contribution plan participants the flexibility to create diversified
portfolios that match their individual risk and return preferences.
The spectrum of offerings must be balanced with careful
consideration of the average participants ability to differentiate
among the available investment choices, enabling him or her to
create efficient risk adjusted portfolios.
The defined contribution plan structure shifts the responsibility of

both asset allocation and setting sufficient savings rates from the
sponsor to the participant. Research shows that this shift in
responsibility often does not result in optimal deferral rates or asset
allocation outcomes because the average DC participant does not
possess the knowledge or the time to forecast required contribution
rates and construct and maintain an efficient portfolio structure.
The passage of the Pension Protection Act in 2006 afforded plan
sponsors safe harbor to automatically direct participant assets into
lifecycle fund and discretionary managed account offerings.
Often what is provided in the market place, however, does not

account for the unique financial circumstances specific to both
individual employers and plan participants. When providing
investment consulting services to defined contribution (DC) plans,
we believe simply providing a menu of investment options to the
participants is not sufficient, because options do not equal
retirement solutions. Wilshire Consulting has remained on the
forefront of asset allocation research for more than 25 years. Our
research supports our views that a generic approach to constructing
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portfolios is not in the best interest of our clients or their

employees.
Over the last year Wilshire Associates has introduced a new

service, distinguishing us from competitors, which is available to
assist plan sponsors in helping employees be better prepared for
retirement.
Wilshire TargetPath
Wilshire TargetPathSM is intended to provide customized target
date retirement fund solutions using the Plans existing investment
options. Wilshire TargetPathSM evaluates each age segments
unique employee base in terms of age, income characteristics and
other retirement benefits as part of Wilshires proprietary Needs-
Based Optimization process. Wilshire works with our clients to
determine a policy statement that specifies and calibrates the
optimization objective function thereby controlling the optimizers
sensitivity. The objective for Wilshire TargetPathSM is to create a
series of portfolios that will maximize the probability of being
successful in funding participants retirement income. The
program will allow sponsors to provide the robust retirement
income planning their employee is seeking.
ii. Creation and maintenance of investment policy statement
Our first priority in creating investment objectives and policy is to

review the financial circumstances and age profile of the
employee-base as a whole in order to assess how asset allocation
may be used to meet our clients objectives and to determine the
risk tolerance, the probability that participant account assets will be
sufficient to provide an adequate retirement.
Wilshire works with clients to specify overall investment

objectives that are consistent with the plans purpose and are
realistic given available investment opportunities. A written policy
statement establishing overall investment objectives is prepared. It
may include specific policies and procedures, asset allocation
guidelines, and performance objectives. Items that should be
included in the investment policy are:
Mission Statement / Objectives

Duties and Responsibilities of all Parties
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Investment Philosophy
Individual Manager Guidelines, if appropriate in separate
accounts
Manager Retention and Evaluation Policy
Wilshire reviews the clients current investment options in the

context of the plans investment policies and objectives. Has the
current structure achieved the plans objectives in the past? Is it
likely to achieve the plans objectives in the future? Are there
redundancies in the current structure, or risks that arent properly
controlled? Does the investment policy include all of the elements
needed to protect participants interests?
Wilshire begins this process by comparing industry defined

contribution survey information regarding plan structure to our
clients investment structure. In particular, we gather information
regarding the plan structures of other similar firms to determine if
the current structure is appropriate and competitive within its
market segment.
Next, we evaluate the expected risk / return characteristics for each

existing investment option to determine if there are any holes
within the risk / return spectrum. In addition, we would evaluate
the sophistication of the participant base to determine if the current
number and type of investment options are appropriate. Any
existing participant surveys regarding satisfaction with the current
plan would be included in this part of the analysis. If none exist,
we will assist the client in creating one.
Finally, we develop an investment strategy for each of the

investment options within the plans structure. In developing these
strategies we would emphasize the following goals:
Limiting active management to managers who have

demonstrated an ability to add value versus their
appropriate benchmark
Reducing management fees and controlling other costs
where appropriate
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Wilshire would then detail our recommendations regarding the

plans investment structure in a presentation we would provide to
the plans committee. Once decisions have been made regarding
the plans investment structure, we would modify the existing
investment policy (or develop a new investment policy if none
exists) to reflect the committees decision. The investment policy
would also provide evaluation search criteria for the selection of
investment option managers.
iii. Ongoing performance measurement and reporting
Quarterly performance reporting of individual investment

managers and investment fund options is integral to our process
and sets Wilshire apart from other institutional investment
consultants. Our objective and analytical approach provides
valuable information in order to evaluate the appropriateness and
success of the entire investment program and each manager within
the program.
Wilshires performance measurement process compares the

performance of the investment option to its stated benchmark. We
also utilize our proprietary risk models and analytics to analyze the
performance results. Our attribution analysis monitors potential
drift, change in manager philosophy, process and / or deviations in
stated guidelines. Wilshire utilizes a proprietary style mapping
analytic process for the total plan as part of the assessment of the
appropriateness of the individual funds. Significant investment or
style drift may create overlap or gaps in the plan option line-up.
We believe this introduces risk to the participants ability to
construct a well diversified portfolio.
Wilshire monitors industry innovations and product offerings

continuously, and conducts periodic reviews and assessments of
the investment program to reflect industry best practices. A good
example is the inclusion of professionally managed solutions (e.g.:
pre-mixed funds or pre-mixed commingled vehicles) as the first
tier of a plans option line-up. Industry surveys and studies have
shown that over the years, constructing efficient and well
diversified portfolios has been challenging for many plan
participants. Professionally managed one-stop solutions are
warranted to be added as the most basic offering for the
participants.
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Wilshire is also continuously monitoring any organizational

changes at the investment organizations that provide options to the
plan. Based on Wilshires experience and position in the
institutional investment community, we have first call status in
the industry when organizations make personnel changes. This
capability allows us to assess the situation immediately, and make
recommendations to our clients in a timely manner.
Our monitoring process provides us with a platform and

framework to provide specific recommendations to the plan
sponsor and assist with any new investment options or provider
searches. Our fund / manager and provider searches rely on our
proprietary databases, on-going due diligence, and customized
client specific criteria.
iv. Investment manager searches
Wilshires manager research process involves two distinct steps:

(1) ongoing manager research and evaluation and (2) client-
directed manager searches and selection. Both the evaluation and
the selection processes rely on our manager research staff,
databases and technology, evaluation model, and Wilshire
consultants.
Manager Search Process
Wilshires search process starts with our dedicated Manager

Research Group, which conducts ongoing evaluation, monitoring
and in-depth research of manager products using our
comprehensive manager database, formal scoring process, and
extensive consultant involvement through investment committees.
The following exhibit illustrates the manager evaluation process:
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Manager Database
Consultant Manager
Review Manager Scoring Questionnaires
Committees
Ongoing Manager
Meetings
Manager Database
Wilshire collects and maintains its proprietary and internally
developed database of investment managers and advisors.
Currently Wilshires investment product database is divided into
the following major groupings:
ASSET CLASS CURRENT NUMBER OF
INVESTMENT PRODUCTS
U.S. Equity 3,732
TOTAL 7,441
Our internally developed database also holds 389 hedge fund-of-

funds investment products and 569 hedge fund products. We
maintain separate databases of approximately 70 private equity
fund-of-funds products and 100 private real estate managers.
Manager Scoring
The Manager Research Group scores managers on the following
six qualitative components: Organization, Information,
Forecasting, Portfolio Construction, Implementation and
Attribution. Each of the components is scored separately on a scale
of 0 to 5 with 5 being the highest. The peer universe is normally
distributed with 2.5 being the median. The score reflects the
analysts view of the managers ability to add value through
different stages of the investment process relative to its peers.
The six components and their relative weightings are described

below.
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Organization (20%) For an investment strategy to thrive, it must

be the product of a solid team and a stable organization. Here, we
look for teams with experience, maturity and vision. We look for
organizational cultures that can attract and maintain such teams
through ownership structures, compensation levels and benefits.
Information Gathering (20%) It is generally accepted in

financial theory that new information drives security prices at the
margin. This is observed empirically as well. Therefore investment
managers must have a robust infrastructure for gathering and
processing information related to securities. Specifically, we want
to know how much managers know about any specific company /
security which is in their investable universe. We are interested in
the depth of the information gathering process, not necessarily the
breadth. We like to see managers with multiple sources of
information. We like managers that gather the information through
their own efforts, such as on-site meetings and industry
conferences. We like managers to understand what information is
largely discounted in the present security price and what
information is unique, or non-consensus.
Due to regulations regarding the disclosure of financial

information and the wide availability of electronic databases, it is
hard for managers to develop truly unique sources of information.
This is an area where it is hard to stand out, yet easy to fall behind.
However, it is a crucial component of the investment process and
is the foundation on which the next stage is built.
Forecasting (20%) Once a manager has information, he / she

develops an outlook for the security. This outlook will always
imply a forecast. In most cases the manager arrives at a valuation
for the security which is the managers forecast of the intrinsic
value. Basically, we would like to know how predictive are the
managers forecasts or how accurate are the managers valuations.
In evaluating the forecasting process we want to understand how
valuations are created, the robustness and sensibility of the
process. We want to understand under what condition the
valuation process is likely to work. Are we likely to see that
environment in the investment style to which the manager
belongs? What is the weakness of the valuation process? What
are the critical variables that the manager needs? Is it a key
discount rate, earnings growth or all of the above? Finally, we
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want to assess the degree to which the manager understands these

same issues. No manager is likely to have the silver bullet for
every situation and we are more comfortable with managers who
understand the limitations of their process.
Portfolio Construction (20%) Building upon a developed

forecast, the manager must bring additional information for
constructing the portfolio. Not only should the manager know
which securities he / she would like to own, but also understand
the risks inherent in each security and then reconcile the return
opportunity with that risk. Therefore, we look at how managers
consider risk, how they create positions, how they manage or trim
positions and how they terminate positions. Each of these
decisions requires balancing the return opportunity with risk.
Implementation (10%) Unfortunately, it is not sufficient to know

which portfolio is best suited to the information. One must also go
out into the market and obtain that portfolio. Our process assesses
the managers ability to transact in the marketplace and reviews
trading to the success of the overall strategy. Strategies in which
there are a sizable amount of assets or those which have a high
level of turnover need to have advanced trading capabilities.
Managers need a keen awareness of trading costs. By evaluating
brokers, managers could gain a competitive edge through
transaction cost management. Wilshire considers the portfolio,
accounting, investment guideline compliance and regulatory
compliance efforts as well when evaluating implementation issues.
Attribution (10%) Finally, our manager evaluation process

assesses the managers ability to understand outcome. In the most
simplistic schemes, managers are concerned solely with
performance. However, attribution (that a manager performs
himself / herself) is review for an equally powerful purpose: the
path to improvement. It informs the manager as to what is
working and what is not. More sophisticated attribution provides a
link between each stage of the investment process and the return
associated with that stage. These links can provide important
direction as to how the manager should adjust their process to
attain or keep a competitive edge. Many managers make a point of
sticking to their discipline during periods of underperformance
but fail to realize that is due, in part, to outdated valuation
methodologies and / or portfolio construction techniques.
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Attribution provides the means by which managers can stay

competitive.
Quantitative Scoring
Wilshire Consulting has developed another way to evaluate
managers by using a quantitative based scoring system for
summarizing historical manager performance in a single number.
In our opinion, the most important step and most time consuming
in manager selection is the qualitative evaluation, focusing on the
organization, investment philosophy and process, resources, etc.
However, a managers performance history up to the evaluation
date also needs to be analyzed to determine how their qualitative
attributes have manifested themselves in risk and return. The
difficulty lies in identifying meaningful metrics, choosing an
appropriate time period, adjusting for risk and considering how a
managers competitors have performed. Wilshire Consultings
Historical Investment Performance (WHIP) Score is an effort to
evaluate risk and return across these various dimensions and
summarize the results in one number to facilitate the performance
comparison of competing managers.
The WHIP score is comprised of three tests plus an adjustment

factor. The Skill Test measures a managers return in excess of a
benchmark and evaluates that performance in relation to the excess
risk that the manager has exhibited. The goal is to determine
whether a managers bets versus the benchmark are paying off
and to be able to fairly compare one manager to the next. While
the WHIP score seeks to automate the quantitative scoring process,
clients are still free to request and review a detailed custom
quantitative analysis of a managers performance or any other
scoring methodology that they may prefer.
Manager Questionnaires
Wilshires manager data is collected directly from managers
through their responses to our quantitative and qualitative
questionnaires and website data submissions. Wilshires databases
are unique in that actual equity manager portfolios are input into
our databases so that portfolio characteristics can be calculated in a
uniform fashion across all managers, making manager comparisons
more accurate. Fixed income portfolio characteristics data is
collected with explicit instructions that managers utilize Wilshires
methodology for calculating current yield, yield-to-maturity
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duration and convexity in order to ensure uniformity of these

measures.
Quantitative Information: Wilshire utilizes an internally developed

web-based data collection facility, known as Wilshire Odyssey, to
help managers and Wilshire in the creation and retrieval of
quantitative information. This information is then input into our
proprietary Wilshire Compass system. Our quantitative
questionnaires are designed to provide comprehensive profiles of
managers who extend beyond just performance numbers and
include general business information such as key professionals,
investment process, research sources, investment style, fees, and
performance, including how performance is calculated.
Additionally, we also process portfolios submitted by managers.
Performance data, of course, goes back to inception of the
investment product and is maintained on at least a quarterly basis.
Wilshire also requests a response from the manager regarding CFA
Institute compliance and outside audit verification. Minority-
owned, women-owned, and disabled veteran-owned managers are
incorporated into the Wilshire database in the same manner as
other managers, according to asset class. Wilshire uses its security
databases to calculate portfolio characteristics, which are
consistent across managers and over time. This capability also
differentiates Wilshires databases from others. We calculate
portfolio characteristics for most managers, which include:
# Portfolio holdings
Debt ratings (bonds)
Risk measures (beta, debt / equity ratio)
Growth measures (ROE, earnings growth)
Maturity, duration (bonds)
Industry weightings
Country weightings
Value measures (P/E, P/B, yield)
Market capitalization measures
Mortgage, corporate weightings
Qualitative Information: Wilshire collects and maintains a

universe of qualitative questionnaires submitted by investment
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managers for the products they offer. Three types of

questionnaires are collected from each firm: one addressing the
firm, one addressing the asset class and one that is product
specific. These questionnaires are maintained electronically.
Additionally, comparisons are more accurate. Fixed income
portfolio characteristics data is collected with explicit instructions
that managers utilize Wilshires methodology for calculating
current yield, yield-to-maturity duration and convexity in order to
ensure uniformity of these measures.
Wilshire places much greater emphasis on the assessment of

qualitative variables when evaluating organizations and their
respective products. Our manager selection and review process is
labor-intensive and forward-looking, with predominant weighting
given to qualitative factors that we believe are supportive of
possible manager out-performance in the future. Key
characteristics that Wilshire may focus on are:
Organizational and / or ownership structure that promotes

professional stability, organic growth and a commitment to
excellence.
A compensation structure that clearly and effectively aligns
investment professionals and clients interests (e.g., a
significant portion of professional compensation is tied to
client investment results).
A stable, cohesive and seasoned investment professional
staff with strong leadership.
A clearly articulated investment philosophy that is well
supported by empirical evidence.
A disciplined investment process that can consistently
capture an inefficiency or anomaly in the market.
Clear lines of decision making authority and accountability.
Consistent, risk-adjusted performance.
Competitive and reasonable fees.

Another important part of our manager evaluation process is
manager meetings, which are conducted on an on-going basis by
both Wilshires Manager Research Group and our investment
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consultants. Wilshire conducts meetings both at Wilshire offices

and on-site at manager offices. When conducting an on-site visit,
our manager research specialists spend several hours in an
investment managers office, meeting with key investment
professionals, senior business management professionals and
operations professionals on an individual basis. Wilshire observes
the investment process (e.g. attend investment meetings), reviews
internal research, assesses portfolio management / research tools
(e.g. databases, valuation models, etc.), reviews compliance
procedures, and assesses trading capabilities. Manager research
professionals and consulting staff meet with approximately 1,500
managers per year. Our extensive dealings with managers have
allowed us to develop a manager due diligence checklist that
details specific issues that should be explored during on-site visits.
Review Committees
After all products under consideration have been given a
preliminary score by Wilshires Manager Research Group,
Wilshire consultants become actively involved in the process
through Product Review Committees. Wilshire consultants
experience specifically contributes to the manager research
process. In addition to the Manager Research Group product
specialists, every category is overseen by a Product Review
Committee made up of at least three senior consulting
professionals. The Committees role is to interview the top
manager candidates and assign final product rankings. The
product evaluations and rankings are used by all Wilshire
consultants to assist clients in the selection of new products and the
evaluation of existing products.
The consultant then works with the client to determine screening

criteria so that a suitable candidate list can be identified. The
clients input is critical at this step of the process. Our manager
database allows us to screen for over 100 different criteria,
including special circumstances.
Manager Recommendation Process
Utilizing the scores produced by our manager evaluation process,

we work with our clients to make a final selection, as illustrated
below:
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Client Specific Mandate

Screening Screening
Process Process
Client Specific Criteria
Quantitative Evaluations
Manager Research Product

Evaluations
Finalist Interviews
Focused Due Focused Due
Diligence Diligence
Selection Award Given
Guideline Development and

Fee Negotiation
The selection process begins by clearly defining the clients

investment assignment and selecting the top 10-20 managers
within the asset class and style. This allows us to narrow the field
to the most qualified candidates.
Wilshire considers each clients unique circumstance in the

selection of investment managers. We are particularly attuned to a
clients risk tolerance, and we are careful to incorporate those
sensitivities into the selection process. During this review, the
clients committee often selects finalist candidates for interviews.
Interviews typically consist of a formal presentation at the client or
Wilshires office. Finally, following the interviews of the finalist
candidates, a selection is made by the client.
v. Specialized projects
Wilshires business model is to provide investment consulting

services on a retainer basis in order to best allocate resources on an
on-going basis and to best serve as a fiduciary to plan sponsor
clients as retainer relationships optimally ensure accountability and
responsibility to a client. Projects are only undertaken when the
probability of a future retainer relationship is high. Project-based
services include: asset / liability modeling, asset allocation policy
development, investment structure analysis, manager evaluation
and selection, investment program evaluation and
recommendations, investment program corporate governance
audits, and risk management assessments.
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b. Does your firm use the same consultants for defined contribution and
defined benefit services?
Yes. Wilshire organizes its consulting practice into consulting teams and
supports these teams with specialized and dedicated resources. As
previously noted, TRSL will be served by a team of Wilshire professionals
led by David Lindberg. While any number of Wilshire professionals will
work on various facets of your required services, David Lindberg, co-
consultant Jim Neill and back-up consultant Felicia Bennett will be the
contact point for delivery of all services.
The groups that are shared resources across Wilshire Consulting are: Asset
Allocation (three professionals), Capital Markets Research (four
professionals), Investment Manager Research (60 professionals, combined
resources within Wilshire), Wilshire Technology (17 professionals),
Operations (six professionals), Performance Reporting (25 professionals),
Securities and Index Database Technology (17 professionals, combined
resources within Wilshire).
As a result of Wilshires commitment to the Investment Consulting

business, each client has access to more than 50 investment professionals
and support staff. In order to provide the highest level of service, access
to these resources is directly managed through the clients consulting
team.
c. Does your firm offer a bundled defined contribution and defined

benefit fee structure? If so, describe.
Yes. Please refer to Exhibit B: Fee Schedule.
24. Attach your firms current Form ADV Part I and II.
Wilshires Form ADV Part I and II is enclosed in the Appendix, Tab 7.
25. Attach your firms current audited Annual Financial Report.
Wilshires most recent Statement of Financial Condition and our annual report for 2009
is enclosed in the Appendix, Tab 8.
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Standards of Conduct
1. Does your firm have a written code of conduct or set of standards for professional
behavior? If yes, explain. Has your firm adopted the CFA Institutes Code of Ethics
and Standards of Professional Conduct?
Yes. Wilshire requires all of its employees to comply with its Compliance Manual,
Standards of Business Conduct and Code of Ethics, and any business units Code of
Ethics. A copy of Wilshires Code of Ethics is provided in the Appendix, Tab 9.
Wilshire employees annually sign an acknowledgement of the Code of Ethics and are
required to fully disclose any potential or actual conflicts of interest.
All employees are required to be familiar with all procedures and policies that are
applicable to them and are subject to discipline for violations. Wilshires Chief
Compliance Officer (CCO) administers our compliance policies and procedures and
reports directly to the CEO and Wilshires Board of Directors. The CCO is responsible
for investigating and dealing with any potential violations of policies or procedures
relating to conflicts of interest. In addition, the CCO is actively involved with regular
testing of our compliance controls, making recommendations to the board and senior
management with respect to implementation of compliance programs, and providing
ongoing reporting.
The Wilshire Consulting Code of Conduct is modeled after the Code of Ethics and
Standards of Professional Conduct of the CFA Institute, and is acknowledged in writing
by our consulting staff upon employment and annually thereafter. It includes an
escalating procedure to our compliance department and the head of Wilshire Consulting.
Wilshire is made up of experienced investment professionals who pride themselves on
upholding the solid reputation Wilshire Associates has earned in the investment
community. Wilshire has instituted and upheld an internal code of conduct, passed by
our Board of Directors, for more than 20 years.
2. How is your code of conduct/ethics monitored and enforced?
In addition to the information provided in the response to Question 1 above, Wilshire

appointed a Chief Compliance Officer who administers our compliance policies and
procedures. The Chief Compliance Officer reports directly to the CEO and Wilshires
Board of Directors.
Aaron Eubanks, Managing Director, was appointed Wilshires Chief Compliance Officer
in 2009 and is focused solely on responsibilities related to compliance.
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3. How are consultants recommendations to clients reviewed and monitored by your

firm? To what degree does your firm adhere to a level of consistency in consultant
recommendations?
The Wilshire philosophy is built upon years of capital market research. Our philosophy
draws upon this research and while each clients portfolio and risk tolerance profile is
unique, we have developed internal guidelines to building a sound investment program
that seeks to maximize return with a thorough knowledge of the inherent risks. Wilshire
Consultings Investment Research Group reviews consultant work internally, so that it
reflects the best thinking of Wilshire. Additionally, the consulting team members review
each others work for philosophical consistency. The consultants engage in a monthly
conference call to discuss client projects and to ensure we are employing best practices
and uniform standards across our clients and to discuss specific client issues which may
either be relevant to a broader cross section of our clients or which need to have a unique
solution with input from the broader group of consultants. Lastly, an annual client survey
is sent to all clients with specific questions aimed at determining the level and quality of
service. The responses to this survey are reviewed by Julia Bonafede, President of
Wilshire Consulting, with direct client follow-up, if deemed necessary, based upon the
client feedback and taken in context with other clients feedback for the responsible
consulting team.
Though each consultants recommendations are fully customized to each client,

consultants generally identify similar market trends, and therefore create a level of
consistency in their recommendations. Any such consistency is a result of current market
conditions as each recommendation is based upon the particular needs of the client, not
Wilshires desire for similar recommendations. In addition, the Investment Research
Group periodically updates our library of best practices to make sure that our research is
consistent with our consulting recommendations.
4. Has your organization, an officer, or principal been involved in actual, pending, or

threatened litigation or administrative, regulatory or similar investigation
proceedings relating to your investment consulting assignments in the past five (5)
years. If so, provide an explanation and indicate the current status or disposition
including censures or reprimands received from the regulatory agency.
No. There has been no involvement in any litigation, arbitration, disciplinary proceeding
or other legal proceedings relating to our consulting activities.
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5. Has your firm ever been required to pay damages or penalties or trade or relinquish
something of value under any of its existing or past contracts as it relates to services
similar to those contemplated by this SFP? If so, describe the situation.
We never defaulted on any contract with a client in the last five years.
6. Has your firm reviewed the Louisiana Code of Governmental Ethics (Ethics
Code), is your firm in compliance, and will your firm prospectively abide by the
Ethics Code. If not, please explain.
Wilshire currently does business in the state of Louisiana, serving as the investment
consultant to the Louisiana Deferred Compensation Plan, and is therefore familiar with
Louisiana Code of Governmental Ethics. With regard to this proposal, we would be
willing to abide by the States Ethics Code pending the award of business.
Conflicts of Interest
1. How does your firm identify and manage conflicts of interest?
Wilshire has committed itself to a culture of compliance and ethical business practices
since its founding in 1972. Recognizing that we operate in multiple areas of the
investment industry, the firm has taken great strides to ensure that our employees
understand and operate within this culture. Wilshire Consulting adopted the CFA
Institute Code of Ethics when it was initially introduced in 1990.
Wilshires Chief Compliance Officer administers our compliance policies and

procedures, and would be responsible for investigating and dealing with any potential
violations of policies or procedures relating to conflicts of interest. The Chief
Compliance Officer reports directly to the CEO and Wilshires Board of Directors.
Wilshire requires all of its employees to comply with its Compliance Manual, Standards
of Business conduct and Code of Ethics, and any business units Code of Ethics. All
employees are required to be familiar with all procedures and policies that are applicable
to them and are subject to discipline for violations.
2. Disclose all potential conflicts of interest issues your firm would have in servicing
TRSL including relationships with custodians, investment managers, brokerage
firms, staff, board members, elected officials, etc.
Wilshire receives a substantial portion of its total revenues from the sale of analytics
services that are provided by Wilshire Analytics, a separate business unit from Wilshire
Consulting and Funds Management. A significant amount of Wilshire Analytics
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business is generated from portfolio managers, including most, if not all, of the largest
organizations in the investment industry.
Because Wilshire provides a variety of advisory and other services through separate
business units, a client of one business unit may seek an introduction to or information
about the products or services of another Wilshire business unit. A conflict of interest
would arise if Wilshire recommends its own products or services to an advisory client
because Wilshire would benefit from both the advice and the clients purchase of
Another area for potential conflict is between Wilshire Consulting and Wilshire Funds
Management. Wilshire Funds Management provides discretionary and non-discretionary
manager-of-managers services to certain investment managers, as well as outsourcing
solutions to financial institutions, commingled funds, and mutual fund complexes.
Wilshire Funds Management receives compensation for providing these services to
investment managers or institutions that may also be recommended for plan sponsors.
Wilshire Funds Management also prepares the initial, written manager research used by
Wilshire Consulting in preparing Wilshire Consultings recommendations.
It is the policy of Wilshire Associates that recommendations of portfolio managers or

custodians are based solely on the best interests of our clients. Furthermore, employees
in Wilshires Consulting, Private Markets, and Funds Management business units do not
have internal access to the amounts that those clients pay Wilshire Associates for
Analytics solutions and services. However, it is possible that Wilshire personnel may
become aware of this information as a result of disclosure by a client, from public sources
or otherwise. Finally, Wilshire has adopted procedures to provide clients of Wilshire
Consulting directly with information about revenues that we receive from managers and
other financial services vendors.
3. Are there any circumstances under which your firm, or any other individual in your
firm, receives compensation, finders fees and/or any other benefit from investment
managers or third parties? If yes, describe in detail.
Wilshire Consulting does not receive any direct or indirect fee compensation from
managers for consulting services, conferences, access or inclusion in our manager
database or manager searches. Wilshire Analytics does provide investment technology
and security databases to institutional investors and investment managers to assist in
money management, as previously noted, and as disclosed in our Form ADV.
Other business units of Wilshire do utilize third-party marketers. For more information,
please refer to Wilshires Form ADV, Part II which is provided in the Appendix, Tab 7.
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4. Does your firm hold or sponsor money manager or client conferences? If so,
describe the fee arrangement with money managers or other sponsors to attend or
present at the conference(s).
Wilshire Consulting does not hold or sponsor money manager conferences.
Wilshire Consulting formally holds a client seminar once a year. Money managers are
not invited to attend or sponsor this conference. During this seminar we hold sessions
outlining our research findings on contemporary topics of interest, workshops, which
include plan sponsor involvement and updates on topics that evolve over a period of time.
Wilshires seminars are conducted entirely by our consultants. Every consultant
participates by providing research on important and relevant investment topics. Wilshire
believes this approach requires our consultants to remain on top of changing events in
the marketplace. The agenda for our 2010 Consulting Client Conference is provided in
the Appendix, Tab 10.
Wilshire Analytics, however, holds user training conferences for its products. Attendees
include: plans sponsors, money managers, banks and insurance companies. Wilshire
Analytics does not charge for user training conferences and Wilshire Consulting staff is
not permitted to attend these training conferences in accordance with our conflict of
interest policies.
5. Does your firm have any formal or informal solicitor agreement, or any like
agreement (finders fee, etc.), with an individual or firm that has or will result in
their receipt of compensation for investment consulting services, monetary or
otherwise, resulting from activities that culminate in your selection by the TRSL
Board to provide investment consulting services?
No. Wilshire Consulting does not have any third party agreements with solicitors.
Other business units of Wilshire do utilize third-party marketers. For more information,
please refer to Wilshires Form ADV, Part II which is provided in the Appendix, Tab 7.
6. Does your firm ever receive fees or other forms of compensation from money
managers, general partners and/or others affiliated with investment firms if you
place clients money with them? If so, identify the party and the nature of the
agreement/relationship.
Wilshire receives a substantial portion of its total revenues from the sale of analytics
services that are provided by Wilshire Analytics, a separate business unit from Wilshire
Consulting and Funds Management. A significant amount of Wilshire Analytics
business is generated from portfolio managers, including most, if not all, of the largest
organizations in the investment industry. In addition, Wilshire has entered into a
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relationship with a company to offer the Wilshire Compass product to Canadian

customers, including portfolio managers, analysts and marketing professionals. A
conflict exists because the Wilshire Consulting and Wilshire Funds Management
personnel may be advising clients to hire or fire these portfolio managers. A conflict
would also exist if Wilshire Consulting or Wilshire Funds Management personnel make
recommendations or decisions portfolio managers who have invested in a fund advised
by Wilshire.
Because Wilshire provides a variety of advisory and other services through separate
business units, a client of one business unit may seek an introduction to or information
about the products or services of another Wilshire business unit. A conflict of interest
would arise if Wilshire recommends its own products or services to an advisory client
because Wilshire would benefit from both the advice and the clients purchase of
Another area for potential conflict is between Wilshire Consulting and Wilshire Funds
Management. Wilshire Funds Management provides discretionary and non-discretionary
manager-of-managers services to certain investment managers, as well as outsourcing
solutions to financial institutions, commingled funds, and mutual fund complexes.
Wilshire Funds Management receives compensation for providing these services to
investment managers or institutions that may also be recommended for plan sponsors.
Wilshire Funds Management also prepares the initial, written manager research used by
Wilshire Consulting in preparing Wilshire Consultings recommendations.
To ensure that clients of Wilshires Consulting and Funds Management business units
receive timely disclosure about conflicts of interest when the compensation received by
Wilshire Associates for services to the clients investment managers and other financial
services vendors may be viewed as a conflict of interest; we have adopted procedures for
providing a conflicts check report for those clients who request it. This report provides
information about the amount Wilshire Associates bills and has billed for Wilshire
services during the current calendar year and the most recently completed calendar year
(to the extent that the managers and other vendors have consented to such disclosure).
The conflict check report is sent directly to the client by our Compliance Department and
is not available to anyone within Wilshire Consulting and Wilshire Funds Management
business units.
Personnel
1. How many investment consultants does your firm have and what is the
client/consultant ratio?
With 24 consultants among 125 clients, Wilshire has one of the lowest clients to
consultant ratios in the industry of 5 to 1.
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2. Describe the firms other staff including support staff, analysts, researchers, and
other professionals.
Wilshire Consulting employs the following professionals:
4 Marketing
24 Consultants
25 Performance Analysts
60 Research (combined resources within Wilshire)
17 Technology / Programming
4 Support Services
3. Identify the individuals (include detailed biographies) that will be assigned as the
lead and back-up consultant to the TRSL account.
As previously noted in response to Question 5 of the Organization and Background

section, David L. Lindberg, CFA, Managing Director, is the proposed lead consultant to
the TRSL account. Jim Neill, CFA, Managing Director, will serve as co-consultant and
Felicia Bennett, Vice President, will serve as back-up consultant. Biographies for these
individuals are also included in response to Question 5 of the Organization and
Background section.
a. Provide contact information for each consultant that will be assigned

to TRSL with a minimum of the following: full name, business
address, business phone, and e-mail address.
The TRSL consulting relationship would be managed from the Pittsburgh,

PA office, where Davids team is based. The office address is:
Wilshire Associates Incorporated

210 Sixth Avenue, Suite 3720
Davids team can be reached by phone at (412) 434-1580, and by email at

the following addresses:
David Lindberg: dlindberg@wilshire.com

Jim Neill: jneill@wilshire.com
Felicia Bennett: fbennett@wilshire.com
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b. The biography should indicate what year each consultant joined your
firm and describe his or her position, current responsibilities, areas of
expertise, years and type of experience, education, professional
designations and memberships, and relevant publications and
presentations.
Please refer to the response above to Question 5 of the Organization and

Background section.
c. Provide a list of their current clients.
David Lindberg has nearly 20 years of institutional investment experience,

the last eight of which he has served in a senior consultant role. He
currently works with a variety of public and non-profit consulting clients.
With dedicated support from his own team of professionals, David
currently serves as the lead consultant to nine Wilshire Consulting clients
that include: four public plans, four endowment / foundations, and one
corporation.
His experience includes consulting to public fund clients, including

county-level funds, corporate and endowment / foundation plan sponsors
as well as defined contribution plan sponsors. This experience
encompasses the full range of consulting services offered by Wilshire,
such as asset / liability analysis, policy development and implementation,
strategic plan development and implementation, manager evaluation and
searches, and portfolio monitoring. Given this long and extensive
experience, David has assisted clients in exploring and resolving a broad
array of investment issues from the mundane to the complex.
The table below provides a list of clients for which David Lindberg and
his team of professionals currently provide investment consulting services.
INCEPTION APPROX ASSET

CLIENT PLAN TYPE YEAR VALUE
Villanova University Corporate 2009 $500 Mil
CVS Caremark Corporate 2006 $600 Mil
Undisclosed Corporate 2009 $1.7 Bil
Undisclosed Corporate 2007 $1.3 Bil
Allegheny County Retirement System Public 2007 $700 Mil
Knox County Public 2004 $200 Mil
Louisiana Deferred Compensation Plan Public 2000 $900 Mil
Ohio Police & Fire Pension Fund Public 1996 $11 Bil
Ohio Tuition Trust Authority Public 2007 $5.0 Bil
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Tennessee Valley Authority Retirement

System Public 1998 $6.5 Bil
Chatham University Endowment 2006 $60 Mil
Pennsylvania State University Endowment 2006 $1.5 Bil
4. State whether the individuals that will be assigned to TRSL have any
responsibilities other than providing consulting services and specify such
responsibilities.
No. David Lindberg, Jim Neill and Felicia Bennetts primary responsibilities are to
provide consulting services.
5. Give a brief description of the firms compensation arrangements for consulting

staff.
Wilshire Consulting uses a competitive base compensation package combined with

revenue sharing, equity ownership in the firm, and an intellectually stimulating
environment. These factors enable us to retain expert staff. Consultants receive
compensation in two forms: base salary and annual bonus. The base salary is
commensurate with industry standards and is increased based on merit. Merit involves
the level and type of client served, and overall contribution to the business units efforts.
The annual bonus is based entirely on client satisfaction and retention in the form of
revenue sharing. Wilshire periodically offers its employees an opportunity to acquire
equity ownership in the firm, enabling them to become shareholders. Because of
Wilshires organizational structure and business practice, equity ownership in Wilshire is
a meaningful retention tool.
As described above, we provide our employees with the opportunity for equity
ownership. However, that equity ownership has to mean something. The equity
ownership has both a current income component and a capital appreciation component so
that the equity provides immediate cash return that does not require the equity to be sold
to realize or capture value. We also have employment agreements with non-compete
clauses for our key employees that also disallow taking other employees with them when
they leave. This requirement extends for two years.
While the financial incentives are a key tool, we believe that is not the only way.
Wilshire has been a stable organization primarily because our employees enjoy a culture
at Wilshire that is intellectually stimulating and where business decisions can still be
made quickly. The organizational structure is flat, and thus review of new ideas and
initiatives can happen quickly. Further, the CEO and business unit heads are involved
with employees, having regular group meetings where ideas can be exchanged. No one is
shy at Wilshire and we all recognize that you never assume where good ideas come from,
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you just have to recognize them when you see them. We believe that our entrepreneurial
culture and the job security we can afford to provide for employees in the financial
services industry allow our staff to show their creativity. Culture is probably the best
means of retaining employees.
6. Describe the firms preference for client communications. For example, does the
firm prefer to have all client communication flow through one contact person?
All communication would flow through your proposed lead consultant, David Lindberg.
As detailed in the response above to Question 20 of the Organization and Background
section, David will ensure that regular communication is maintained with TRSL and that
appropriate resources of Wilshire Consulting are employed. David will be assisted by
Jim Neill and Felicia Bennett, who will serve as relationship back-up and work closely
with David with respect to consulting services and advice provided to TRSL. They will
maintain detailed knowledge of your plan and its investments, and they are available to
assist with day to day communications projects, and meetings.
Research
1. Describe the internal structure and organization of your research department. If no
separate department exists, describe how this function is performed.
Wilshire Consultings Research Group is comprised of our Asset Allocation Group and
Investment Research Group. The Asset Allocation Group focuses on developing and
maintaining Wilshires proprietary asset / liability models, while the Investment Research
Group performs in depth analysis of all aspects of an institutional investment program,
including, for example, capital and alternative market research, investment structure
research and industry analysis.
Under a single research platform, the merging of our Asset Allocation Group and
Investment Research Group ensures the collaboration of distinct, yet complimentary
areas of Wilshires consulting focus. This uniform structure maximizes the research
input of Wilshires lead actuary, who is critical in assisting on research issues pertaining
both directly and indirectly to asset allocation issues.
Wilshire Consultings Research Group has a distinct structure that combines the efforts of
dedicated independent researchers (independent of client service responsibilities) and
senior consultants, who ensure client advocacy and the direction of research work toward
germane subjects that are of particular interest to our clients.
Wilshire Consultings Research Group also benefits from the direct contributions of Julia
Bonafede, President of Wilshire Consulting. Julias personal involvement solidifies
Wilshires research commitment and ensures that the effort continues to receive high
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level priority. To ensure relevancy, senior consultants participate on an ad hoc basis.

Since the consultants primary responsibility is serving their clients, the rotating nature of
their participation in research ensures that they can satisfy their primary objective.
However, since client issues often are the genesis for research ideas, the senior
consultants are instrumental in bringing those issues forward and seeing that the attendant
research contains practical recommendations and is carried through to completion.
While many research topics are the direct result of client feedback and discussion,
Wilshire Consultings Research Group routinely pursues interesting ideas to enable
Wilshire to remain a thought leader in the industry. We find that the combination of
independent research, coupled with client-driven advocacy through consultant
involvement in the research process, ensures an end product that is focused on relevant
challenges facing Wilshires consulting clients.
The Investment Research Group generates research reports for Wilshire clients in the
following four major category types:
Asset Class and Investment Strategy White Papers
Wilshire prepares a research report for its clients at the beginning of every year
describing its recommended long term asset class return and risk assumptions for all
recognized asset classes. The report describes in detail how Wilshire generates the
assumptions used in all of our asset allocation studies. This asset allocation report is a
perennial favorite among Wilshire clients and others. A full analysis of Wilshires asset
class assumptions can be found in our 2010 Asset Allocation Report, which is provided
in the Appendix, Tab 2. Throughout the year, Wilshire produces white papers which are
focused on particular asset classes and investment themes. These reports are designed to
provide educational and historical background, assess return and risk potential, examine
structural trends in the asset class, and present actionable recommendations that consider
implementation issues. White papers are sent electronically on an ongoing basis to
clients as part of the overall relationship and are often generated as the result of specific
client needs and / or in response to new trends in the industry. Wilshire strives to
produce at least six topical research reports a year.
Market / Economic Reviews

Wilshire distributes a monthly Wilshire Perspectives newsletter, which contains major
market index returns for all pertinent time periods in a tabular format. During the first
week of each quarter, a quarterly Wilshire Perspectives is published, which includes a
market commentary from our Investment Research Group. The goal of our Capital
Markets Review is to outline recent and long-term market activity and results. Wilshires
Manager Research Group also provides a quarterly review of the most significant
investment manager developments of the recently ended quarter. The monthly and
quarterly Wilshire Perspectives newsletters are made available to clients electronically
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via email and through our website. The most recent monthly and quarterly Wilshire
Perspectives are provided in the Appendix, Tab 11.
Topical / Event Driven

Wilshire Consultings Investment Research Group closely monitors activities within the
capital markets and issues research notes on material events which are pertinent to our
clients investments. All event driven research notes are focused on providing sufficient
background and information, in a timely and easy to read manner, to assist Wilshire
clients in determining an appropriate response to important industry events. As with all
investment research reports, these publications are made available to Wilshires
consulting clients electronically via email and through our website.
Industry Trends
Each year, Wilshire produces three surveys on pension plan funding levels: one for
States, one for Cities and Counties, and a third for Corporations. These reports are
extremely popular with Wilshire clients as they serve as useful measures of how
individual plans compare with their peers. Wilshires funding reports have become a
widely referenced source for researchers in both the private and public sectors.
The following table provides a representative sample of timely research topics that
Wilshire Consulting has provided to its clients.
YEAR PUBLICATION TITLE

2010 Benchmarking Private Investments
2010 Risk-Focused Diversification
2009 Wilshire Historical Investment Performance (WHIP) Score
2009 Use of Leverage in Investment Portfolios
2009 Implications of Return Non-normality on Asset Allocation
2009 SOS - TARP, TALF, PPIP, BAB
2009 Emerging Markets Debt (Two Parts)
2009 U.S. Government Activity in 2008-09 and Long Bonds
2008 2008 Stock Market Sell-off: Steeper than the Average Bear?
2008 Credit Crisis Events of 2008
2008 Commodities Market Price Spike
2008 Examining the Home Country Bias
2008 Non-U.S. Equity Investment Structure
2007 Real Asset Investments
2007 Rule 144A and the Capital Formation Landscape
2007 Thoughts on TIPS Correlations
2007 Timberland Investments
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Internet
Clients also have access to an extensive database of Wilshire research papers through a
password-protected area of our website. This database is searchable by topic and
keyword, allowing clients to find the paper that best suits their needs.
Client Seminars
Annually, Wilshire Consulting holds a client seminar where a major portion of our latest
research is presented. We encourage all clients to attend our client seminar to find out
more about the issues facing the fund sponsor community. No external sources are used
at this client seminar.
Client Education
Wilshire believes first and foremost that our role is an extension of our clients internal
staff and as a resource to our clients Boards and Committees. As such, we have always
emphasized fiduciary education as the primary means of enabling our clients, as fiduciaries,
to build sound investment processes and make efficient and appropriate investment
decisions.
We believe we have one of the deepest investment research capabilities amongst our peers,
as we have always maintained a dedicated capital markets and actuarial research effort.
We have only broadened this research effort in recent years in recognition of the many
more investment opportunities and decisions facing our plan sponsor clients given the
increased breadth of strategies and asset classes. As we only work with clients on a
retainer basis, we expect to be retained through the long term so that we, and our clients,
will be able to measure the efficacy of our advice. Thus, we are very focused on ensuring
our clients understand all facets of the decisions they are making so that everyone will be
satisfied with the ultimate outcome. This is only achieved through regular education and
communication. Wilshire has provided educational sessions to its clients on a number of
topics, including: Financial Futures, Fixed Income Strategy, International Investing,
Performance Fees, Securities Lending, Strategic Asset Allocation and Tactical Asset
Allocation. All of these sessions have been geared to assist a busy committee and
internal staff in learning about emerging and complex investment issues.
Analytic Resources
The computer-based analytical tool Wilshire offers to clients is the Wilshire Compass,
which is a PC-based executive information and consulting tool. The Wilshire Compass
combines comprehensive databases with sophisticated investment technology to assist the
fund sponsor in developing investment policies, evaluating and implementing investment
strategies and monitoring the investment program. The analytic system is designed to
address all levels of fund analysis including asset allocation, manager team analysis, style
risk management, manager selection and performance evaluation and monitoring. This is
a separate service and is not included in the General Consulting retainer fee, if clients
wish, they can subscribe to the Wilshire Compass separately.
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2. Describe the manner in which external resources and sources of information are
used in the research process. How does your firm integrate internal and external
research?
Wilshire relies almost entirely upon internal resources for its research efforts. Only daily
stock and bond pricing data and quarterly financial statement information (for example;
IDC and WorldScope) are accessed through outside vendors. Indeed, a significant
portion of Wilshires business is providing research and analysis to other organizations.
Wilshire also actively monitors publicly distributed research (from investment managers,
academics, industry trade groups, government agencies, etc.) and subscribes to major
research publications to keep abreast of leading industry research.
We believe we have one of the most extensive information and technology resources
among all consulting firms. Our security databases cover over 7,000 U.S. stocks, 12,000
non-U.S. stocks, and all publicly-traded bonds. These databases, in some instances,
include monthly information going back 25 years and daily information for over 10 years.
This allows us to back test investment strategies extensively.
Wilshire has internally developed most of the modern investment technology in use in the
industry today. In many instances, this technology was originated by Wilshire. A sample
includes:
Asset / liability model

Index Fund Systems
Bond Dedication System
Portfolio Optimization
Portfolio Insurance Model
Performance Measurement
Manager Screening
Pension Surplus Optimization
FASB Projection Model
Currency Hedging Model
Futures Valuation Model
Wilshire 5000 Total Market IndexSM
Wilshire generally uses external sources as a guide to formulate research questions and
then our consultants and research staff endeavor to conduct independent internal reviews.
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Wilshire uses internal databases (e.g. the Wilshire Compass, which includes historical
data on a vast number of indices and in excess of 7,000 investment products, mutual
funds, and manager returns) and systems to come up with conclusions that we deliver to
clients. All throughout our research process we verify and compare outside research
results to our independent conclusions in order to come up with the most conclusive
analysis possible.
Further, senior members of our research and consulting teams are frequent speakers,
panelists and advisory board members at industry conferences. These venues serve as
ideal settings to share research and perspective with our peers across the investment
community.
The foundation of analyzing, monitoring, and reporting on investment opportunities lies

in the breadth and quality of a firms database and risk management tools. Wilshire
invests several hundred thousand dollars each year in databases from leading providers in
the industry. In addition, Wilshire has developed many of the widely used market indices
from this database (e.g. Wilshire 5000 Total Market IndexSM) that others follow today.
Wilshire also belongs to several professional associations, including: Group Council of
Institutional Investors, Institute for Fiduciary Education, the CFA Institute and the Q
Group. Wilshire participates in select domestic and international institutional investor
conferences with an educational objective. Wilshire also subscribes to the Spencer
reports, which provide frequent, regular updates regarding pension legislation and
ERISA-related issues for defined benefit and defined contribution plans.
The non-U.S. marketplace has shown more and more interest in Wilshires capabilities
and products. This has led to our expansion of operations to London, Amsterdam,
Canberra, Singapore, and Tokyo. The cross-fertilization of consulting and our analytics
products further enhances our reporting and tracking capabilities of global trends and
influences.
3. Describe your firms public defined benefit and/or defined contribution research
and investment research provided to clients?
The Investment Research Group generates research reports for Wilshire clients in the
following four major category types:
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Asset Class and Investment Strategy White Papers: Wilshire prepares a research
report for its clients at the beginning of every year describing its recommended long term
asset class return and risk assumptions for all recognized asset classes. The report
describes in detail how Wilshire generates the assumptions used in all of our asset
allocation studies. This asset allocation report is a perennial favorite among Wilshire
clients and others. A full analysis of Wilshires asset class assumptions can be found in
our 2010 Asset Allocation Report, which is provided in the Appendix, Tab 2.
Throughout the year, Wilshire produces white papers which are focused on particular
asset classes and investment themes. These reports are designed to provide educational
and historical background, assess return and risk potential, examine structural trends in
the asset class, and present actionable recommendations that consider implementation
issues. White papers are sent electronically on an ongoing basis to clients as part of the
overall relationship and are often generated as the result of specific client needs and / or
in response to new trends in the industry. Wilshire strives to produce at least six topical
research reports a year.
Market / Economic Reviews: Wilshire distributes a monthly Wilshire Perspectives

newsletter, which contains major market index returns for all pertinent time periods in a
tabular format. During the first week of each quarter, a quarterly Wilshire Perspectives is
published, which includes a market commentary from our Investment Research Group.
The goal of our Capital Markets Review is to outline recent and long-term market activity
and results. Wilshires Manager Research Group also provides a quarterly review of the
most significant investment manager developments of the recently ended quarter. The
monthly and quarterly Wilshire Perspectives newsletters are made available to clients
electronically via email and through our website. The most recent monthly and quarterly
Wilshire Perspectives are provided in the Appendix, Tab 11.
Topical / Event Driven: Wilshire Consultings Investment Research Group closely

monitors activities within the capital markets and issues research notes on material events
which are pertinent to our clients investments. All event-driven research notes are
focused on providing sufficient background and information, in a timely and easy to read
manner, to assist Wilshire clients in determining an appropriate response to important
industry events. As with all investment research reports, these publications are made
available to Wilshires consulting clients electronically via email and through our
website.
Industry Trends: Each year, Wilshire produces three surveys on pension plan funding
levels: one for States, one for Cities and Counties, and a third for Corporations. These
reports are extremely popular with Wilshire clients as they serve as useful measures of
how individual plans compare with their peers. Wilshires funding reports have become
a widely referenced source for researchers in both the private and public sectors.
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The computer-based analytical tool Wilshire offers to clients is the Wilshire Compass,
described in further detail in the following response, which is a PC-based executive
information and consulting tool. The Wilshire Compass combines comprehensive
databases with sophisticated investment technology to assist the fund sponsor in
developing investment policies, evaluating and implementing investment strategies and
monitoring the investment program. The analytic system is designed to address all levels
of fund analysis including asset allocation, manager team analysis, style risk
management, manager selection and performance evaluation and monitoring. This is a
separate service and is not included in the General Consulting retainer fee, although each
of our clients has access to the database through their respective consultant.
4. Describe your firms ability to provide customized analytical tools to your clients.
Describe specific features.
We take full advantage of Wilshires stature as a leading provider of analytical software

to the investment industry. These products include Wilshire Consultings Wilshire
Compass, and Wilshire Analytics Wilshire AtlasSM, Wilshire AxiomSM, and Wilshire
AbacusSM.
Our technological capabilities, combined with the experience and skills of our consulting
staff, enable us to assist clients with almost any investment issue imaginable. Wilshire
builds all its own software using Java, Microsoft SQL, Windows C/C++ with C-tree
database, which it can control and customize in order to meet clients needs. Below is a
listing of primary technology and capabilities used to support the efforts of Wilshire
Consulting.

exhibits and reports through the Internet by accessing Wilshires home page and using
portfolios with comparison to selected indexes and universes.

with analytical tools to evaluate managers, investment structures, and asset allocations, as
well as access the Wilshire research. Wilshire Compass clients can receive updates to
their software, which includes extensive manager and index databases, via the Internet.
The Wilshire Compass is a desktop multi-tiered visual basic application with SQL Server
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2000 as its database engine. Wilshires consultants use these products daily in
conduction analyses for their clients.
The Wilshire Quantum Series is Wilshires family of investment technology software

components providing performance measurement, performance attribution, risk
management, portfolio optimization and trade order management for multi-currency
portfolios. Today, Wilshire provides technology tools to hundreds of institutions
worldwide.
The Wilshire AbacusSM is a comprehensive multi-currency GIPS-compliant performance

measurement system. It supports the full range of investment instruments and, due to the
Wilshire Abacus flexible underlying architecture, can be modified easily to support new
instruments. A flexible text and graphical custom report writer enables generation of
holdings, transaction, and performance reports.
The Wilshire AtlasSM provides an integrated collection of tools to manage and analyze
global equity portfolios for both active and passive strategies. Its large historical
database of pricing and fundamentals for over 75,000 U. S. and international securities
provides a foundation for daily performance attribution, risk analysis, portfolio
construction, and optimization. Additionally, the Wilshire Atlas index fund maintenance
tools allow full benchmark replication, stratified sampling techniques, tilt fund strategies,
and tax-efficient trading strategies, and supports rebalancing as often as daily.
The Wilshire AxiomSM provides a complete set of applications for managing risk and
enhancing returns and analyzing the impact of portfolio construction on risk and return in
global fixed income portfolios. It allows users to analyze portfolio risk and performance
in a multi-factor risk model framework. The Wilshire Axiom is a powerful portfolio
optimization tool; along with standard indexation, immunization and dedication
strategies, users can use interest rate forecasts to create portfolios with optimal projected
performance. Liability and cash flow analyses are also available.
non-U.S. equity), and the Wilshire AxiomSM (U.S. and non-U.S. fixed Income), are used
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the Wilshire AtlasSM and Wilshire AxiomSM for fixed income and equity analytics.
The Wilshire iQuantumSM is an integrated performance measurement, performance

attribution and risk management solution for multi-currency, multi-asset class portfolios.
Wilshire iQuantum is built on the foundation of more than three decades of Wilshire's
sophisticated analytical models to provide the most robust attribution and risk analytics in
the investment industry. Building on the success of the popular Quantum suite, Wilshire
iQuantum assists firms with portfolio analysis, management and reporting.
Wilshire Risk Management Consulting - Since the inception of our Consulting practice
nearly 30 years ago, Wilshire has worked with clients to identify risks that will not be
systematically rewarded and to implement structures that help minimize or eliminate
those risks. Very few organizations are structured to combine plan sponsor know-how,
analytical expertise and technical systems essential elements required to support plan
sponsor risk management. Wilshires ability to leverage these resources puts us in a
unique position to define best practices.
historical monthly and quarterly performance reports through a fund-specific password-
index performance, etc. If a client wants to work directly with specific tools such as the
Wilshire Compass or the Wilshire AtlasSM (equity portfolio global risk analysis), this can
be incorporated into our service fee offer.
5. Describe your firms process for monitoring industry and market trends affecting
investment funds and public (defined benefit and defined contribution) plans.
Wilshire Consulting strives to be a thought leader in the financial industry on behalf of

our clients. Our Investment Research Group, database resources, and analytics combine
to give us an advantage in the discovery, analysis, prudent implementation and ongoing
monitoring and review of new investment opportunities as they emerge and develop in
the marketplace. Among the highlights of Wilshire Consultings investment research
efforts:
Comprehensive analyses of strategic and tactical opportunities in the public

markets, with frequent updates as financial engineering innovations bring new
instruments to market;
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Thorough examinations and re-evaluations of the ever-changing landscape of

alternative investments;
Wilshires annual Pension Funding Studies, widely-publicized and highly-
regarded in the industry, surveying the structure and financial health of corporate,
state and city/county pension plans;
Seminal research on the management of currency exposure risk in institutional
portfolios, with a focus on the role of currency management in global investment
programs. Exposure to non-home market currencies represents a source of
portfolio risk from which investors cannot assume systematic reward. Currency
hedging represents one method of mitigating currency risk, albeit at additional
cost to the investment program. Active currency management techniques attempt
to capture excess return on short-term currency movement; the track record of
active currency managers varies considerably. Wilshires approach is to review
each clients risk tolerance and non-home market asset exposures to determine the
prudent course of action.
Frequent assessments of market conditions and liquidity challenges during the
major market dislocation of 2007-2008. Global markets suffered a Perfect Storm
of calamitous events during this period; the bursting of the global real estate
bubble combined with overextended credit and over-levered assets to bring about
the spectacular collapses of Bear Stearns and Lehman Brothers as well as a
worldwide liquidity crisis that required international central bank involvement to
restore stability and investor confidence. Wilshire research helped clients
negotiate the challenging market environment of wildly volatile asset valuations
and unprecedented yield spreads, and revealed emerging investment opportunities
as markets regained more stable footing.
Numerous research papers and presentations exploring Real Assets:
Commodities, Real Estate, Infrastructure, TIPS and Inflation-Linked Fixed
Income, etc. Real Asset space comprises a wide variety of assets whose price
movements correlate positively with inflation. They can offer unique
diversification benefits to institutional portfolios as well as a potential source of
higher risk-adjusted return. Within an asset-liability framework, real assets can
also offer a source of inflation hedge vis--vis projected benefits or spending
requirements.
Ongoing research on the utilization of leverage within a pension plans asset
allocation strategy, with a major article published February 2010 entitled, Risk-
Focused Diversification. As institutional investors work to satisfy spending
requirements, their portfolios become dominated by high risk asset classes such as
equity. While dollars held in such investments is meaningful, it is the risk these
asset classes contribute to overall portfolio volatility that is really glaring.
Leverageessentially borrowed or short cashcan help rebalance the risk
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contribution by increasing the amount invested in low risk but more efficient asset
classes while still targeting the portfolio's required return. The theory behind the
strategy is sound, although inclusion in a portfolio will bring new and complex
risks that must be thoroughly understood by investors. Results in strategies that
have been implemented are encouraging, and Wilshire is continuing to research
any and all aspects of utilizing leverage within asset allocation.
Wilshire Consultings dedicated Investment Research Group and field consultants work
closely with other industry peers and are knowledgeable about the innovations and new
developments in the market. We conduct proprietary research to analyze trends and
developments, and devise new solutions to help our clients react.
The foundation of analyzing, monitoring and reporting on market trends lies in the
breadth and quality of a firms database and risk management tools. Wilshire invests
several hundred thousand dollars each year in databases from leading providers in the
industry. In addition, Wilshire has developed many of the widely used market indices
from this database (e.g. Wilshire 5000 Total Market IndexSM ) that others follow today.
Wilshire Consultings Research Group, database resources and analytics give us an

advantage in the understanding of market trends. Wilshire invests several hundred
thousand dollars each year in databases from leading providers in the industry. In
addition, Wilshire has developed many of the widely used market indices from this
database (e.g. Wilshire 5000 Total Market IndexSM) that others follow today. Wilshire
also belongs to several professional associations, including: Group Council of
Institutional Investors, Institute for Fiduciary Education, the CFA Institute and the Q
Group. Wilshire participates in select domestic and international institutional investor
conferences with an educational objective. Wilshire also subscribes to the Spencer
reports, which provide frequent, regular updates regarding pension legislation and
ERISA-related issues for defined benefit and defined contribution plans.
The non-U.S. marketplace has shown more and more interest in Wilshires capabilities
and products. This has led to our expansion of operations to London, Amsterdam,
Canberra, Singapore, and Tokyo. The cross-fertilization of consulting and our analytics
products further enhances our reporting and tracking capabilities of global trends and
influences.
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Investment Policies
1. Describe your approach to the analysis of applicable legal and practical
parameters/restrictions under which TRSL operates (Louisiana State statutes,
pension liquidity needs, etc.).
Wilshire has over 25 years of experience developing investment policies, procedures and
guidelines for public pension plans, seeking to develop strategies structured to optimally
meet our clients unique investment objectives. This work necessitates us operating
within a broad variety of investment guidelines and policies as well as in accordance to
specific State statutes and client needs (i.e., pension liquidity). Our experience provides
Wilshire the breadth and depth of knowledge in analysis of applicable legal and practical
parameters / restrictions.
Furthermore, as the consultant to the Louisiana State Deferred Compensation Plan, we

are already familiar with working within Louisiana state statutes.
2. Describe your approach to investment policy construction, including investment

objectives and risk control policies.
Wilshire Consulting has over 25 years of experience in developing investment policies,

procedures and guidelines for public pension funds. Our approach to developing an
investment policy follows the same format for all public pension fund clients.
Investment policy and guidelines are integral to all aspects of Wilshires investment
consulting services. The following diagram demonstrates our method and process in
providing investment consulting services to our clients. The process begins with asset
allocation and the inherent asset / liability evaluation, moves through developing an
investment structure and choosing appropriate managers, and finally evaluates the whole
program through our performance monitoring program.
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The development of the policy is an interactive process between the organizations

management / trustees and the consultant. Following is a description of the policy
development process:
Management Information System

Performance Evaluation and 90-95% of Return and Risk
Attribution Consider Liabilities and Firm
MANAGEMENT ASSET Risk as Well as Assets
Manage Costs
Policies and Guidelines AND ALLOCATION
MONITORING
RESEARCH
NEW IDEAS
MANAGER INVESTMENT
3-5% of Return and Risk SELECTION STRUCTURE 5-7% of Return and Risk
Consistent with Structures Strategic Approach (market
Strategy efficiencies, active / passive, style)
Skew Probability Distribution Risk Management
Benchmarks
Reviewing Financial Condition

Before recommendations regarding asset allocation or minimum rate of return can be
made, it is essential to understand the dynamics of the investment funds cash flows.
Using cash flow projections we develop with the client and its actuary, we carefully
examine the financial condition of the fund. With the direct involvement of the client, we
project best and worst case scenarios for asset values and cash flows, over various time
horizons. This step helps us assess one form of risk tolerance of the fund.
We have actuaries on staff who work with the consultants to review and understand a
clients actuarial valuation to ensure a thorough understanding of a plans current
financial condition.
Determining Asset Allocation

The goal of the asset allocation process is to produce a set of efficient portfolios that
have the dual objective of maximizing the safety of the pension benefit stream while
simultaneously minimizing the pension cost to the sponsor. Wilshires asset / liability
research group collaborates with the clients actuary to produce the best estimate of the
clients current and future pension benefit. Wilshires asset / liability model considers the
funds assets and liabilities in measuring both the economic as well as the accounting
value of this pension commitment.
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Wilshire consultants work closely with the client to determine the optimal asset mix for
their particular funding needs. This mix considers the appropriate level of risk for the
plan and produces a risk budget by asset class and for manager allocations within the
investment structure of each of the selected asset classes. The reporting produced by this
analysis helps guide the client in establishing targets and guidelines for managing total
portfolio risk.
Wilshires asset / liability analysis evaluates the tradeoffs between long-term funding and
the possibility of short-term financial reporting volatility. This analysis assists Wilshires
consultants and our clients in determining scenarios to help control pension expense
volatility in the short-term in order to anticipate the necessity of taking protective
measures for some portion of the obligation in the context of a long-term strategic
investment program. Since each clients individual liabilities are unique, we have found
that there is no simple formula; rather, our responsibility is to give the decision-makers
the information and tools they need to be thoroughly informed and to act as a guide
through the funding challenges of today and in the future.
Setting Investment Policies and Guidelines

Wilshire works with clients to specify overall objectives that are consistent with the
plans financial requirements, reflect the asset allocation strategy, and are realistic given
available investment opportunities. A written policy statement establishing overall
investment objectives is prepared. It includes specific policies and procedures, asset
allocation guidelines, and performance objectives. Items that should be included in the
investment policy are:
Mission Statement / Objectives

Asset Allocation Policy
Duties and Responsibilities of all Parties
Investment Philosophy
Individual Manager Guidelines
Proxy Voting Policy
Brokerage or Soft-Dollar Policy
Manager Retention and Evaluation Policy
Rebalancing Policy
Securities Lending
Corporate Governance
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Derivatives Policy
Establishing Investment Structure

After completion of the fund simulation study, Wilshire reviews the current investment
structure by asset class in the context of the new investment policy and objectives. An
efficient investment structure can help minimize performance slippage and facilitate
control at the fund level of pension management. At this stage, Wilshire evaluates the
appropriateness of alternative investment strategies such as active versus passive
implementation, manager style, number of managers, etc.
Establishing Investment Manager Guidelines

Wilshire will also prepare investment manager guidelines, which contain several
elements to effectively monitor a manager. The guidelines contain the following
elements:
A qualitative description of style and the strategic role the manager will
play in the structure
Investment characteristics the portfolio is to exhibit which can be
compared to the actual characteristics each quarter
A list of permitted investments which differ by asset class
A list of restrictions (e.g., derivatives)
Performance objectives (return and risk)
Implementing New Strategic Mix

Once a new strategic asset mix has been determined, a rebalancing plan must be
implemented to rebalance the funds assets to this new allocation. Wilshire believes that
reallocation should not be done opportunistically (i.e., via market timing). Rather, the
assets should be redirected over a sufficient period of time through cost minimizing and
risk-controlled techniques (e.g., dollar cost averaging).
Wilshires Risk Budgeting and Risk Measurement software platform is a total fund
management process for allocating investment risk across portfolios and fund managers,
and for monitoring compliance across funds and individual accounts. Risk budgeting
offers at least four significant benefits to total fund managers:
1. Provides a consistent, objective framework for making decisions about

asset allocation and manager weighting.
2. Exposes risks that are unintended and potentially unmanaged, enabling
managers to address problems before they impact the fund.
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3. Reduces the cost of contracting for investment management services by

making it possible to formulate and monitor compliance with investment
guidelines more efficiently. Similarly, using comparable measures of risk
for the fund, Wilshire standardizes risk reporting and measurement, and
provides greater transparency in fund risk to participants.
4. Increases the latitude that managers have to add value by allowing
investment guidelines to be formulated less restrictively.
The figure below illustrates how risk budgeting fits directly into the fund management
process.
Risk Budgeting Process

Step 1
Goal Setting
Step 2
Capital Market
Asset Allocation / Risk Assumptions
Budgeting
Step 3 Manager
Manager Weighting / Forecasts
Step 4
Guidelines
Portfolio
Management
Step 5
Risk Management and
Rebalancing
The first step in the fund management process is to define investment risk. Often this is
accomplished with the support and assistance of outside consultants. If for example the
sponsors goal is to add value through active management, the sponsor, together with its
consultant might elect to define risk as (the standard deviation of) tracking error; where
tracking error is the difference between the returns of a fund and a broad capital market
benchmark. In this case the sponsor would determine the benchmark to reflect the goals
and the objectives of the fund.
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The risk budget is established by the fund sponsor during the asset allocation process
(Step 2). Then, inputs from the sponsor and the managers are used to determine the
manager weighting consistent with the risk budget (Step 3).
Finally, to track fund risk and performance, and to insure compliance with manager
guidelines and the total risk budget, the sponsor employs the risk budgeting framework to
perform periodic reviews of the fund in which fund risk is analyzed and contributions to
fund risk by manager are determined (Step 4). The sponsor uses this information to adjust
manager weightings or to execute other transactions, such as completion trades, to assure
overall compliance with the risk budget (Step 5).
At the heart of Wilshires risk management and attribution capabilities lies the Wilshire
iQuantumSM which leverages Wilshires state of the art equity and fixed income factor
models to provide total fund risk estimates, including support for alternative assets.
On the equity side, Wilshires 15-year historical database of prices and fundamental data
on over 85,000 securities spanning 88 countries provides the foundation for its industry
leading Wilshire Atlas GR6 Equity Risk ModelSM, which decomposes investment risk
into regions, countries, industries, and fundamentals.
For fixed income, the Wilshire Axiom Global Credit Risk ModelSM is among the most
comprehensive and granular factor models for fixed income risk available in the market.
It measures more than 450 term structure, sector, quality, other spread and currency
effects. Underlying this model is a 15 year historical database of over 3.5 million fixed
income securities, as well as a staff of dedicated and experienced structured finance
specialists, whose responsibility is to model securities for all Wilshires analytical and
consulting clients. Through its analytical products Wilshires clients have access to a
structured security database including 180,000 Agency CMO bonds, 70,000 whole loan
and home equity bonds, 20,000 CMBS bonds, 3,500 Auto and Card ABS bonds.
Applying these ideas and drawing on its infrastructure and experience, Wilshire has
developed a sophisticated risk budgeting platform that represents a complete risk
management solution which incorporates all of the data and technologies required to
implement risk budgeting, including capital markets data and assumptions, asset
allocation tools, manager weightings tools, and risk management and reporting tools.
Reports are carefully tailored to the risk budgeting process, and provide key information,
such as total fund tracking error; contribution to total tracking error and marginal tracking
error by asset class, manager and risk factor; and security-level concentration. Decision
oriented analytics include manager correlation reports which show the lowest cost
method to achieve a change in expected risk.
Wilshires process is designed to pick up where asset allocation leaves off to establish an
integrated implementation plan that reflects the risk profile imposed by the asset
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allocation decision. Further, the integrated risk budgeting approach ensures that the
monitoring is not done in isolation, but is another output of the entire risk budgeting
process.
Wilshire looks to protect clients in the development of policies to control risk including,
but not limited to:
Asset Allocation
Derivatives Use
Securities Lending
Cash Management
Manager Monitoring
Wilshire helps clients develop policies in each of these areas to control risk. For asset
allocation, Wilshire provides advice on re-balancing policies to ensure that profits are
regularly taken and redeployed in an under-weighted asset class of the investment
program. We help each client establish a tolerance range that is wide enough so that the
investment program is not whipsawed, but tight enough to ensure the original asset
allocation objective is met. Combined with rebalancing rules that look to avoid the
temptation to market time, the rebalancing policy looks to reduce risk stemming from
veering too far from a clients stated asset allocation policy.
Wilshire also assists clients in developing a policy pertaining to derivatives use that
protects against the leveraging of the program where not intended through the use of
derivatives, specifying how derivatives can be used, designating counter-party credit
quality and establishing the policies that its money managers need to maintain if they
intend to use derivatives in the client account.
With respect to securities lending, Wilshire assists clients in establishing policies to

determine the means by which securities must be lent and the requirements of a securities
lending program with respect to the credit quality of the broker who may be borrowers in
the program, the collateral requirements of the program, the need to protect ownership
rights of the securities out on loan and set forth the requirements for stress-testing the
interest rate risk of the securities lending program collateral pool.
All pension funds have to manage cash. At times, assets of the plan need to be liquidated
to meet benefit payments. Another form of risk control is establishing a policy about the
manager in which cash shall be raised from the investment program to meet the benefit
payment and plan expense needs. We help clients develop a plan for forecasting cash
needs, comparing it to the income generation forecasts of the investment program and
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establishing the priorities for taking cash from the investment program in the most cost
effective way possible.
Wilshire helps clients establish investment manager guidelines that address tolerance
ranges for the various risk factors that a money manager may exhibit. These tolerance
ranges then provide another form of risk budget, other than what was discussed above.
The risk factors dovetail with Wilshires performance report so that these risk factor
characteristics can be monitored each quarter to ensure that a manager is not deviating
from its style and introducing more risk into the investment program than what was
anticipated.
3. Describe your capabilities in the development of appropriate shareholder

responsibility and proxy voting policies and procedures in consultation with the
TRSL Board, staff, and counsel.
A philosophy towards the determination of appropriate shareholder responsibility and the

voting of proxies is unique to each plan. As an investment consulting firm, it is not
Wilshires role to determine such philosophy, however, as a fiduciary adviser, Wilshire
could work in consultation with the TRSL Board, staff and counsel.
4. Describe the process for maintaining a continuous review of investment policies.
Wilshire Consulting continuously monitors and conducts thorough reviews of our clients
investment policy, investment strategy, and portfolio mix every quarter via our regular
performance monitoring services unless a more frequent review is required. Wilshire
will usually formally review a clients asset allocation policy every three to five years.
Additionally, consultants review a clients fund performance and structure as a part of our
quarterly performance report, which includes an attribution analysis. A sample Executive
Summary of our quarterly performance review is provided in the Appendix, Tab 5.
In addition to receiving monthly and quarterly reports, clients meet and have conference
calls with their consulting team frequently to discuss not only performance, but also any
other issues or concerns that they have concerning the fund.
Asset Allocation and Related Issues

1. Discuss the theory and methodology of the asset allocation models your firm
employs.
We believe that strategic asset allocation is the key to a successful investment program.
Industry research and our experience prove that the asset allocation decision has the
greatest impact on a portfolios long-term return and risk profile. Wilshire embraced this
important concept over 30 years ago when the firm developed one of the industrys first
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asset / liability models in 1974. Since that time, Wilshire has added to its asset allocation
credentials by performing thousands of asset allocation studies and continually evaluating
and enhancing our methodology.
Wilshire has continued this tradition by now offering a new approach to asset / liability
modeling, which we call Cost / Risk Optimization. This innovative approach is based
on the dual objective of maximizing the safety of benefits at a given level of resources
while simultaneously minimizing the long-term costs at an acceptable level of risk. Risk
is defined differently for specific investor objectives, and our approach explicitly
minimizes the risk that is important to the fund. Our approach incorporates the best
interests of the plan participants, taxpayers, and other stakeholders.
Wilshire utilizes proprietary optimization methodologies (as well as existing ones, such
as mean-variance and surplus optimization) to select a comprehensive set of efficient
policy portfolios. A stochastic simulation program illustrates the impact of the policy
portfolio choice on funded levels, unfunded liabilities, and required resources. These
simulations are based on forward-looking expectations (return, risk and correlations) for
the major asset classes as projected by Wilshires annual asset allocation study. The
model simultaneously projects assets, actuarial liabilities, resources / revenues and
benefits consistent with the plans actuarial and capital market assumptions for as many
years as needed.
The optimal policy portfolio is a function of the clients current financial condition,
tolerance for various risks, overall investment objectives, liquidity needs, applicable legal
constraints, unique considerations with respect to plan design or participants, and the
capital market opportunities available to the client.
The Decision Process
The following diagram depicts a four-step process that Wilshire uses for recommending
an allocation policy.
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Step 1: Capital Markets Research

1. Annual capital market assumptions review
2. Historical and forward-looking analysis
3. Traditional and non-traditional asset classes
Step 2: Liability Analysis

1. Liability the stream of benefit payments on the
plans design and population
2. Volatility of the benefit stream
3. Projected actuarial and accounting liabilities
Step 3: Asset / Liability Optimization

1. Proprietary models safer benefits at lower cost
2. Traditional optimization methods (mean-variance
and surplus optimization)
Step 4: Optimal Policy Portfolio

1. Stochastic simulation of selected policy portfolios
2. Optimal likelihood of shortfall
3. Optimal level of contributions
4. Optimal volatility of components of actuarial and
accounting reports
5. Optimal asset side characteristics
Wilshire consultants work with each client to identify the opportunity set of asset classes
to be considered and alternative portfolios that best meet long-term goals while
minimizing short-term risks. After selecting the optimal policy portfolio, Wilshire
prepares a written asset allocation policy that includes target allocations as well as a plan
for ongoing rebalancing of assets to the target asset allocation.
Step 1: Capital Markets Research

Wilshire believes that the quality of asset class assumptions for return and risk is as
important as the sophistication of its asset allocation technology. Clients comment
favorably upon the intellectual process Wilshire uses to forecast asset class expected
returns, risk, and correlations.
Wilshire uses forward-looking valuation models that capture market consensus

expectations rather than relying solely on the common practice of extrapolating past
performance to project future performance. For example, a dividend discount model used
to forecast stock returns and Treasury Inflation Protection Security (TIPS) yields are
compared to traditional Treasury yields to forecast inflation. Wilshire published a paper
in The Journal of Portfolio Management (1997) describing a unique method for
forecasting returns and risk on alternative investments. This is particularly important
because most practitioners overstate returns and understate risk on alternative investments.
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Wilshire prepares a research report for its clients at the beginning of every year
describing its recommended long-term asset class return and risk assumptions for all the
asset classes. A copy of our 2010 Asset Allocation Report is included in the Appendix,
Tab 2.
Step 2: Liability Analysis

Wilshires Commitment Driven Investing (CDI) model focuses on the true liability of the
plan the stream of benefit payments promised to plan participants. The structure of the
liability is at the front and center of the analysis. In order to develop the stream of benefit
payments, Wilshire relies on long-term demographic assumptions developed by the
plans actuary for the purposes of the annual actuarial valuation. Wilshires objective is to
expand the work your actuary has already performed by including the volatility of the
liability and incorporate the resulting object (the pension commitment) into the asset
allocation framework. As a result, the model presents an internally consistent approach
to both actuarial and asset allocation work.
The plan has made a commitment to provide retirement benefits to plan participants. The
goal of the plan sponsor is to fund the pension commitment the stream of benefit
payments determined by the plans population and benefit package. The volatility of the
benefit stream is, for the most part, caused by inflation. The plans actuary usually
provides a point estimate for each payment in the stream (otherwise, Wilshire uses its
proprietary models to do so). Then Wilshire analyzes the volatility of the stream and
incorporates potential benefit improvements, if any. Given the inflation-related nature of
the volatility of the benefit stream, it is critical to ensure that our modeling of inflation
impacts the asset and liability sides in a consistent manner. The augmented benefit
stream is one of the cornerstones of Wilshires asset / liability optimization model.
The actuarial and accounting liabilities are important, as well. Starting with the plans
demographic characteristics at the present, Wilshire models future actuarial and
accounting liabilities by moving the existing population forward, utilizing the
demographic assumptions provided by the actuary. Future entrants usually replace the
plan participants who leave active status. Wilshires models can incorporate growing or
declining active populations as well. As a result, Wilshire generates a series of actuarial
and accounting liabilities for as many years as needed. Some of those liabilities are
modeled in a deterministic way, while others are modeled in a stochastic way in order to
stay consistent with certain bond portfolios on the asset side. All these liabilities are
subsequently used in stochastic simulations of the plans reporting condition.
Step 3: Asset / Liability Optimization

Optimization procedures are at the heart of the portfolio selection process. Wilshire has
extensive experience in dealing with traditional portfolio optimization methodologies
such as mean-variance and surplus optimizations. We realize that mean-variance
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optimization is still popular among many plan sponsors; surplus optimization has gained
some popularity lately as well. Consequently, these methodologies are readily available
for our clients. However, we believe that Wilshires optimization technique is a superior
approach as it is directly related to the plans core business.
The following principles are the foundation of Wilshires approach to asset / liability
optimization: 1) The core business of a pension plan is to fund the pensions promised to
participants; 2) The primary risk to the core business is to run out of money before the
plan has met the terms of its commitments; 3) The role of the policy portfolio is to
manage the riskiness of the plans core business.
Cost-Risk Efficient Frontiers
Current Policy Portfolio Efficient Frontier I Efficient Frontier II Market Value of Assets Risk Free Asset
4.0
3.5
3.0
2.5
2.0
1.5
1.0
0.5
0.0
50% 60% 70% 80% 90% 100%
Benefit Security
This recognition implies two objectives for the optimal policy portfolio. First, for every
level of future contributions, it is desirable to produce the policy portfolio that maximizes
the likelihood that this level of contributions is sufficient to fund promised benefits. In
this case, it is in the best interests of the plan participants to maximize the safety of
benefits at reasonable cost. Second, for each level of risk, it is desirable to minimize the
present value of future contributions that is sufficient to fund promised benefits at this
risk level. It is clearly in the best interests of shareholders to minimize the cost of
providing pension benefits at a reasonable risk level. Wilshire can demonstrate that both
objectives lead to the same set of policy portfolios. The resulting efficient frontier (the
cost-risk frontier) contains policy portfolios that take into account the primary concerns
of plan participants (safer benefits) and plan sponsor (lower cost). The frontier also
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helps to identify the tradeoff between the plans potential funding shortfall and future
costs.
Wilshire considers each clients unique financial condition to determine the most
appropriate measurements of risk. Wilshire then selects the optimization methodology
that properly reflects the clients risk profile. In most cases, as recognition of the fact that
each client faces a multitude of risks, Wilshire builds several efficient frontiers based on
various definitions and measurements of risk.
Step 4: Optimal Policy Portfolio

The optimal policy portfolio can be selected based on an acceptable level of contributions
or shortfall risk. However, Wilshire recognizes the importance of the components of
actuarial and accounting reports. We employ stochastic simulation to allow the client to
hypothetically pre-experience the impact of alternative investment strategies on the
components of those reports in the future.
Several policy portfolios from conservative to aggressive are selected on the

frontier(s) generated during the asset / liability optimization step. A stochastic simulation
program illustrates the impact of the policy portfolio choice on funded status, unfunded
liabilities, and required contributions. These simulations are based on forward-looking
expectations (return, risk and correlations) for the major asset classes as determined by
Wilshires annual Asset Allocation Study. The model simultaneously projects assets,
actuarial liabilities, contributions and benefits consistent with the plans actuarial and
capital market assumptions for as many years as needed. The policy portfolios that
generate unacceptable volatility levels of the funded status, unfunded liabilities, or
required contributions are rejected.
Distribution of Funded Ratio

2.50
2.40
2.19
2.00 2.00
1.77
1.83 1st Quartile
2nd Quartile
Ratio
1.50 1.50 3rd Quartile

1.42
1.35 4th Quartile
1.24 1.28
Initial Ratio
1.10 1.13
1.04 1.07
1.00 1.01
0.87 0.87 0.88 0.89 0.91
0.85
0.65 0.66 0.65 0.64 0.63

0.50
Current A B C D
Policy
Wilshire works closely with clients to determine the optimal policy portfolio for their
needs. This also means deciding how much risk to take. This can only be done by close
evaluation of the tradeoffs between long-term funding and possible short-term losses
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from negative investment returns. The clear identification of objectives and the hierarchy
of the objectives is an important part of this strategy. We have found that there is no
simple formula; rather, our responsibility is to give decision-makers the tools they need to
make an informed decision.
Like any asset / liability model, the input assumptions have a great deal of impact on the
results. We spend considerable internal resources in developing our annual view of
expected returns, volatility, and correlations. In performing our studies, we examine the
sensitivity of the results to initial assumptions and discuss the import of this with our
client. In cases where the staff of investment professionals will likely have well-defined
views on the capital markets, we would incorporate their views into the range of initial
inputs. By varying these inputs and discussing the ramifications thoroughly with our
clients, we are able to convey a more robust and richer picture of the risk / return
tradeoffs.
After selecting the optimal asset mix, Wilshire formulates policy ranges for each asset
class and identifies the rebalancing strategy. Wilshire recommends performing an asset /
liability study at the inception of a new relationship. This initial study is intended to help
your consulting team gain a better understanding of your plan and insure that your fund
currently has the optimal asset allocation given your objectives. Wilshires standard
practice is to conduct subsequent asset / liability studies once every three to five years.
These studies should be conducted more frequently if there is a meaningful change to the
plan, such as a freeze in new benefit accruals, or to the financial condition of the plan
sponsor.
a. What are the advantages and disadvantages of your model?
Because Wilshire Consulting maintains its own proprietary asset / liability

models and full-time actuarial and programming staff, we are able to
utilize an array of models in order to reflect clients unique characteristics.
Thus, it is our flexibility, combined with extensive experience that makes
our asset allocation approach unique. Wilshires asset allocation tools
range from the classic asset-only models to the most advanced portfolio
selection models that utilize detailed information about a clients financial
commitments. These methodologies can incorporate various objectives
(economic, accounting, actuarial, separately or altogether) the client may
have. Because we create and maintain all of our asset allocation and asset
/ liability modeling software in-house, our models are highly customizable
and flexible and can accommodate any number of major or sub-asset
classes as well as virtually any constraint that may affect the clients asset
allocation decision. Our analysis is based on capital market assumptions
that include, but not limited to, expected returns, standard deviations and
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correlations for each major asset class. The assumptions, along with full
documentation of their derivation, are published at least annually.
Furthermore, Wilshire Consultings Asset Allocation Group employs three

full time dedicated actuarial professionals to maintain and evolve our asset
/ liability modeling capabilities and to support consultants, and clients
directly, in asset allocation projects. The Investment Research Group is
responsible for researching and producing our annual capital market
assumptions for use within asset allocation and asset / liability modeling
projects.
b. How do you develop asset class assumptions?
Wilshire Associates is an asset allocation pioneer, having created one of

the first asset / liability models for defined benefit plans in 1974. We
have performed literally thousands of asset allocation studies for clients.
Our annual Asset Allocation Report, which outlines the expected risk and
return assumptions for all asset classes, is the basis for all asset allocation
work done for consulting clients throughout the year. The assumptions
used in our asset allocation model are completely developed in-house by
Wilshire Consultings Investment Research Group.
Wilshire believes that the quality of asset class assumptions for return and
risk is at least equally important as the sophistication of its asset allocation
technology. Clients comment favorably upon the intellectual process
Wilshire uses to forecast asset class expected returns, risk, and
correlations. Common practice is to simply extrapolate past performance
in projected future performance. Wilshire looks at past performance as
well, but relies more heavily upon forward-looking valuation models
intended to capture market consensus expectations. For example, a
dividend discount model is used to forecast stock returns and Treasury
Inflation Protection Security (TIPS) yields are compared to traditional
Treasury yields to forecast inflation. Wilshire published a paper in The
Journal of Portfolio Management (1997) describing a unique method for
forecasting returns and risk on alternative investments. This is particularly
important because most practitioners overstate returns and understate risk
on alternative investments. Wilshire prepares a research report for its
clients at the beginning of every year describing its recommended long
term asset class return and risk assumptions for all the asset classes. This
asset allocation report is a perennial favorite among Wilshire clients and
others and describes in detail how Wilshire develops its assumptions.
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Following are Wilshires forward-looking return, risk, and cash flow

assumptions for the major asset classes covered in our annual Asset
Allocation Report, as of January 2010.
Total Return Risk

MY MY
2009 2010 Change 2009 2010 Change
Investment Categories:
U.S. Stocks 8.00 % 7.50 % 0.50 % 16.00 % 16.00 % 0.00 %
Dev ex U.S. Stocks 8.00 7.50 0.50 17.00 17.00 0.00
Emerging Mkt Stocks 8.00 7.50 0.50 24.00 24.00 0.00
Global Stocks 8.20 7.75 0.45 16.00 16.00 0.00
Private Markets 11.15 10.00 1.15 26.00 26.00 0.00
Cash Equivalents 2.25 3.00 0.75 1.25 1.25 0.00
Core Bonds 4.25 4.25 0.00 5.00 5.00 0.00
TIPS 3.50 3.75 0.25 6.00 6.00 0.00
High Yield Bonds 6.75 6.00 0.75 10.00 10.00 0.00
Non U.S. Bonds (Hdg) 3.90 3.90 0.00 4.00 4.00 0.00
U.S. RE Securities 7.25 6.50 0.75 15.00 15.00 0.00
Private Real Estate 7.90 7.35 0.55 12.25 12.25 0.00
Commodities 3.75 4.50 0.75 13.00 13.00 0.00
Real Asset Basket * 6.65 6.75 0.10 7.50 7.50 0.00
Inflation: 1.75 2.50 0.75 1.75 1.75 0.00
Total Returns minus Inflation:
U.S. Stocks 6.25 5.00 1.25
U.S. Bonds 2.50 1.75 0.75
Cash Equivalents 0.50 0.50 0.00
Stocks minus Bonds: 3.75 3.25 0.50
Bonds minus Cash: 2.00 1.25 0.75
* The 2009 MY return/risk uses 2009 MY forecasts with 2010 real asset sub asset class component weights
These assumptions are intended to apply to a 10 year planning horizon. A

full analysis of Wilshires asset class assumptions can be found in our
2010 Asset Allocation Report, which is provided in the Appendix, Tab 2.
c. Has your model been revised in the last three (3) years? If so, what
was the change?
Wilshire employs all internally developed proprietary asset / liability

models which can be customized based upon our clients respective needs
and benefit structures.
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d. What changes to the model do you expect to make over the next three
(3) years?
As noted in the previous response, Wilshire employs all internally

developed proprietary asset / liability models which can be customized
based upon our clients respective needs and benefit structures.
As previously noted in the response above to Question 1.a., Wilshire has a

team of individuals dedicated to maintain and evolve our asset / liability
modeling capabilities as well as to support consultants, and clients
directly, in asset allocation projects. Our Asset Allocation Group consists
of Stephen Marshall, Managing Director, Mark Peng, ASA, MAAA,
Senior Associate, and Emmanuel Salta, Ph.D., Associate. Stephen and
Mark are responsible for the day-to-day support of the senior consultants
in the asset allocation work they do for clients. Emmanuel is responsible
for maintaining Wilshires proprietary asset allocation models and
conducting asset allocation studies.
2. Explain your firms philosophy and biases regarding:

a. Active versus passive management
Wilshire Consulting believes that there are varying degrees of market

efficiency depending on which sector of the market is being studied. For
instance, large cap companies are heavily followed by analysts and release
timely information for investors to use so it will be much more difficult to
find and exploit mispricings on a consistent basis. However, smaller
companies are less visible and generally do not have an army of analysts
dissecting their every move. In this case, astute investors might be able to
consistently incorporate information into their portfolios that allow them
to generate returns above the market. By applying these theoretical
principles across a spectrum of market segments, we begin with the
following philosophical views regarding active opportunities within
various investment categories.
INVESTMENT MARKET
CATEGORY OBSERVATIONS
Equity
U.S. Large Cap Highly Efficient
U.S. Small Cap Moderately Efficient
Non-U.S. Developed Moderately Efficient
Market
Non-U.S. Emerging Inefficient
Market
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Private Markets Inefficient

Fixed Income
Core-Oriented Moderately Efficient
High Yield Inefficient
Alternative / Other
Public Real Estate Moderately Efficient
(REITS)
Private Real Estate Inefficient
Commodities Inefficient
Currency Inefficient
We believe that passive management is an important and cost

effective strategy. In efficient markets, passive management provides
market exposure at a minimal cost (management and trading) to
institutional portfolios. Passive management also reduces the
administrative and investment monitoring burden to in-house staff.
We believe that the decision to select active versus passive

management is part of the investment structuring process.
Determining an optimal mix between active and passive is a matter of
investor preference, risk tolerance, and the ability to find consistent
sources of alpha. Wilshire consultants utilize quantitative methods to
work with each clients unique profile to develop the optimal mix between
active and passive management given these objectives. We generally
recommend that passive options be available to participants for the core
asset classes, and look to complement the passive funds with a limited
number of differentiable active options for participants who wish to utilize
active management when building their own retirement portfolios.
Specifically, we have recommended to a number of clients that they

substantially index the highly efficient large capitalization U.S. equity
segment of their portfolio. This strategy is often complemented with a
balanced application of active large capitalization core, enhanced index,
or, value and growth managers. In the less efficient U.S. small cap equity
segment, we often favor the retention of active managers over passive
managers.
Unlike the equity markets, we believe that the fixed income markets offer
systematic risks with positive long-term returns. These systematic risk
factors include: interest rate risk, credit risk, and prepayment risk. Our
approach to fixed income is to identify and monitor the clients target
duration (for young to average age plans this is typically the market
duration) and the optimal weight to each fixed income sector. We believe
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accepting higher levels of prepayment and credit risk can reward investors
over three- to five-year periods.
As with other investment characteristics, such as establishing a strategic

policy portfolio, the optimal allocation between active and passive
management should be driven by the plan sponsors objectives and
relative risk tolerance with respect to market efficiency.
b. Market capitalization
For large capitalization U.S. equities, we believe the market has become
increasingly efficient. We believe neither a style bias to value or growth
nor a small cap bias will generate excess returns above the broad market,
and passive management is an important strategy for large pension plans
to consider. In increasingly efficient markets, passive management
provides market exposure at a minimal cost (management and trading) to
institutional portfolios. Passive management also reduces the
administrative and investment monitoring burden to in-house staff.
We have recommended to a number of clients that they substantially index

the largely efficient large capitalization U.S. equity segment of their
portfolio. This strategy is often complemented with a balanced
application of active large capitalization core, enhanced index, or, value
and growth managers. In the less efficient U.S. small cap equity segment,
we often favor the retention of active managers over passive managers.
Our research staff is focused on identifying the best implementation plan

for U.S. equities, which for most plans represent between 40-60% of total
assets. Our strategy is to build portfolios that are style neutral, have an
appropriately sized allocation to index funds to reflect the markets
efficiency, and to help minimize costs of management fees and transaction
costs from turnover.
We use Wilshires style metric model to identify style risk across the
manager team. The total equity composite can be plotted as well, to
determine overall style bias. An unintended bias can be measured in a
number of ways, including re-weighting managers (optimization where
risk is measured versus a style neutral position) or through the addition or
deletion of managers.
We believe the fixed income markets, unlike the equity markets, offer
systematic opportunities with positive long-term returns. Systematic risk
factors include: interest rate risk, credit risk, and prepayment risk.
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Our approach to fixed income is to identify the target duration (for young
to average age plans this is typically the market duration) and the optimal
weight to each fixed income sector. We believe that accepting a higher
level of prepayment and credit risk can reward investors over three to five
year periods.
We further believe that a small group of fixed income managers have

developed good research across fixed income sectors and thus we favor a
generalist approach where one manager makes small shifts across sectors
to capture returns from changing spreads.
In terms of non-U.S. fixed-income investing, we recommend utilizing the

leading handful of fixed income managers who invest internationally on
an opportunistic basis and treat this area as a separate sector. Depending
on the clients plan size, high yield would be managed the same as non-
U.S. fixed-income or as a separate allocation.
In terms of non-U.S. equity we do not find the returns from active

management due to stock selection to be superior to U.S. managers. On
the contrary, we find the selection of a long-term weighting to economic
regions is the most important decision for successful results. Our research
shows that, on average, active managers lose 1% per year from stock
selection because of the high transaction costs in foreign markets.
Managers who outperform the benchmark generally achieve their results
by making good long-term allocations to economic regions. We focus our
analysis on the regional and country exposure managers are taking.
c. Style and style drift
In efficient markets such as the U.S. stock market, Wilshire believes that
investors are not rewarded for taking style and size bets away from the
broad market. We have witnessed that size and style exhibit cycles with
frequent regularity, yet over time, the returns delivered by each respective
style or size are generally similar. We have also observed that it is
especially difficult to time these cycles with repeatable skill. Thus, we
recommend clients adopt style and size neutral portfolios with some minor
flexibility (i.e., within reasonable rebalancing parameters) to over or under
weight styles or sizes for short periods of time, although this is not
actively encouraged by Wilshire.
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d. Internal versus external management
Wilshire consultants have extensive experience with both internal and

external management. The advantages of internal management of a
portion of TRSLs portfolio would include heightened day-to-day
oversight and potentially lower management and transaction costs. The
disadvantages include spreading TRSLs existing resources too thin if the
fund was not able to add personnel to supplement current activities,
insufficient scale required to attain sufficiently beneficial cost advantages
versus external management, and (for active management only) inability
to attract and retain skilled investment professionals.
3. Describe your firms capabilities and experience in assisting internal management.
When the plan sponsor has access to sufficient internal personnel and systems resources
and capabilities, Wilshire is comfortable working with such resources in developing
internal management strategies. Some of our largest clients manage both passive and
active approaches in-house and we have evaluated these strategies similar to externally
managed assets in order to provide an independent review on behalf of the clients Board
and to ensure best practices are being employed. A successful internally managed
passive strategy can generate significant savings for the plan sponsor from a fee
perspective. However, absent appropriate internal resources, Wilshire would recommend
external active management versus internal active management.
4. Describe your firms capabilities and experience in alternative (i.e. private markets)
investment arena.
Wilshire Consulting has extensive experience in assisting clients in the area of alternative
investments. We have a 20-year track record assisting clients to diversify their portfolios
into alternative investments, including real estate, private equity, venture capital, and
hedge funds. Annually, Wilshire assesses each asset class including the different types of
alternative investments in our annual Asset Class Assumptions report. In this report,
Wilshire determines the forward looking return, risk and correlation assumptions to be
used in our asset allocation process.
Wilshire Consultings Investment Research Group produces white papers throughout the
year on many broad investment topics and has a particular focus on alternative
investments. Each team member is assigned 2 or 3 general investment topics in addition
to focused topics such as commodities; hedge fund of funds, direct real-estate, timber or
private equity. The focused responsibility requires detailed knowledge of that particular
investment or asset class together with knowledge of the particular investment vehicles
available to investors. Wilshire Consulting teams interact with the particular investment
research team member assigned to the relevant alternative investment to assist clients
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with implementation within their respective investment programs. White papers

produced by the Investment Research Group are provided to clients on a regular basis.
As a complement to our Investment Research Group, our alternative asset class

committees employ dedicated resources for identifying and monitoring private equity
fund of funds, commingled real estate managers and hedge fund of fund managers.
Wilshire uses the same disciplined process for these managers that we use with
identifying top managers in more traditional asset classes. Our research includes
manager interviews, both onsite and at Wilshires offices. Our manager databases allow
for multiple screening criteria and are constantly being updated. We have developed a
manager scorecard for these three alternative categories that identify both quantitative
and qualitative factors. We continually work with our clients alternative asset managers
to ensure transparency to the extent possible.
Wilshire Private Markets (WPM), a business unit of Wilshire Associates, has been an
active participant in private equity since 1984. From 1984 to 1996 WPM provided non-
discretionary separate account services. In 1996 WPM began providing discretionary
fund-of-funds management for clients and implemented its first separate account program
in 1997. Since 1997 WPM has provided fund-of-fund management and separate account
services for institutional investors globally.
a. List the factors you would consider in recommending an alternative

investment.
Wilshire believes that alternative investments play an important role as

potential sources of both asset class diversification and alpha generation.
We view alternative strategies in the same disciplined manner as we do
traditional strategies.
The benefits from adding any new asset class, or sub-asset class, to an
existing pension portfolio derive from its risk / return characteristics and
from its correlations with existing asset classes. Alternative assets can
potentially offer higher returns (private equity) and lowly-correlated return
patterns (real estate and commodities) to traditional asset classes. These
characteristics can help improve the risk-return relationship of an
investment program when included in asset allocation.
We view the appropriateness of particular investment vehicles on a case

by case basis, and focus on the institutional-quality of all investment
vehicles. We do not believe any asset class, in and of itself, is
inappropriate for a fund as long as there are viable, institutional-quality
instruments by which to implement such an investment.
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The factors we would consider in recommending alternative investment

options are as follows:
Appropriateness for client given their unique return and risk
preferences
Feasibility to implement by client
Associated costs
Availability of appropriate vehicles and options
The term alternatives does not have a clear definition. The most
common interpretation includes all investment products except long-only
portfolios of publicly-traded stocks and bonds. This would include private
equity, (including buyout, mezzanine, and venture capital), private real-
estate and commodities. Hedge funds and portable alpha strategies, while
not considered a separate asset class, are represented by our alternative
asset class committees. Currently, roughly half of our clients have
investments in one or more of these alternative asset classes. Our
dedicated asset class committees actively assist consultants and clients
with all aspects of alternative asset allocation design and implementation.
b. Describe your firms due diligence process for assessing the risk and
performance characteristics of alternative investments.
As noted in the response above, Wilshire believes it has developed a

leading research effort that is predictive, powerful and precisely
articulated. Our quantitative component is supplemented by a qualitative
component largely focused on the five key steps of the investment process
that all hedge fund managers must undertake. There is also a measure
taken of the organization, but this measure is designed to reflect the hedge
funds ability to manage fiduciary responsibility and sustainability from a
business perspective.
Information the ability of the hedge fund to collect information.

What is the quality and non-consensus aspect of that information?
We consider the source of the information (proprietary or third
party), the frequency and the uniqueness of the information.
Forecasting The ability of the hedge fund to turn information into
specific statements about the future return of securities, and how
much of that return can they demonstrate is excess return relative
to risk and what the investment horizon is.
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Portfolio Construction The ability of the hedge fund manager to

turn forecasts into portfolios that are the best expression of the
forecasts. Active risk of the portfolio should reflect the non-
consensus information in the forecast and minimize exposure to
risks that have no information driving them.
Implementation The ability to trade and get the ideal portfolio
implemented. We endeavor to learn as much as possible about
implementation goals, turnover, transaction costs and value added
from trading.
Attribution The managers ability to understand and articulate
what is working and what isnt working and how to improve. This
includes a review of how they approach performance attribution,
research process, agenda and budget.
Organization The ability of the organization to execute its
fiduciary duty. This is different from most views on organization,
which state that stable organizations will have positive alpha.

WPM has a comprehensive due diligence process for private equity
investments. The origination process begins with the development of
investment strategies for each sector. Market research is based on the
careful study of valuation levels, growth opportunities, and exit
alternatives within each category. By identifying promising areas of
investment, WPM is able to focus on those partnerships which it believes
are best able to execute those opportunities.
Partnership research is focused on proactive contact with leading general

partners. Based on recent history, WPM expects that general partners from
the WPM master database will bring 500 new funds to market this year.
By identifying a select group of prospective investments well in advance,
WPM is allowed considerable lead time to intensely focus on the best
opportunities, thereby having a better opportunity to influence terms and
conditions of selected partnerships for better alignment of interests.
Partnership due diligence incorporates a review of the investment track

record of each senior investment professional, their ability to access deal
flow, transact at discounts to the public markets, add value through active
management and manage growth. The process includes on-site meetings
with managers, a review of portfolio companies and extensive reference
checks. In addition, WPM places extensive emphasis on expected
performance as part of its due diligence process. While past performance
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is considered important, it cannot predict future performance.

Accordingly, WPM combines knowledge of the key drivers of
performance with proprietary tools to estimate expected returns. Each
partnership is scrutinized in an attempt to determine the management
teams ability to achieve top-quartile performance. During the
investigation process, WPM builds a due diligence file for each
investment opportunity. This due diligence file contains many of, but is
not limited to, the following 19 sections:
1) Due diligence report 11) Fund memorandum

2) Fund agreement and comments 12) Notes of meetings w/mgt. team
3) Reference call sheets 13) Reference call log
4) Marketplace information 14) Valuation guidelines
5) Prior fund performance analysis 15) WPM questionnaire
6) Commitment list 16) Management biographies
7) Financial statements 17) Press clippings
8) Fund marketing materials 18) Business plans for portfolio
investments
9) Valuations / financials of portfolio 19) A list of limited partners
10) Limited partner reports
The due diligence process helps us produce leads to the preparation of a

due diligence report, which is the investment recommendation analysis
presented to the investment committee. One of the unique aspects of this
process is a risk and return analysis performed using our proprietary due
diligence model. We designed this financial model specifically for buyout
investments in order to perform a scenario analysis on the key factors
impacting returns and risks.
c. Describe your firms ability to monitor alternative investment

performance (i.e. vintage year universe comparisons).
Because our client base is heavily oriented towards large, sophisticated

institutional plan sponsors, we have always been, and continue to be, at
the forefront of new investment opportunities in non-traditional
investment strategies and asset classes. We have dedicated resources both
within Wilshire Consulting and within Wilshires Manager Research
Group to be able to effectively evaluate and monitor these strategies.
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Because of these resources and our thoughtful approach to evaluating new

investment opportunities, we have sometimes been at odds with the herd
mentality which oftentimes leads plan sponsors to hastily invest in new
strategies without taking sufficient time and rigor to assess what the risks
and pitfalls may be.
A good example of this is hedge funds. We have steadfastly maintained

that while we see a role for hedge funds within institutional portfolios, we
see these as strategies and not as an asset class into itself. We have
generally recommended clients employ these as part of portable alpha
programs, or, with respect to more directional funds, within existing
broader asset classes, such as equities or bonds. Lastly, we have often
recommended TIPS as an inflation hedge, instead of traditional real estate,
because it is a relative low cost, low administrative oversight strategy
which is best suited for many of our clients that wish to have an effective
inflation hedge, but do not have the desire to invest in real estate.
We do not recommend gold or other physical commodities to our clients

as we do not believe the characteristics of these assets meet the standards
generally used to define asset classes, such as a consistent risk premium
and broad institutional ownership.
d. Describe the use of alternative investments in current client portfolios.
The role of alternative investments within our clients portfolios varies

depending upon the type of investment. The role of private equity is long
term growth. The role of hedge funds is to provide alpha over a passive
benchmark within asset classes when used as a portable alpha strategy
(Wilshires recommended implementation) or as a risk reduction tool
when viewed as a separate asset class. Private equity consists primarily of
venture capital and leveraged buyouts; however, these investments also
contain distressed debt, non-U.S. private equity, mezzanine financing and
other loans. Our clients private equity allocations generally have between
a 70% and 80% allocation to buyout-oriented private equity and 20% to
30% in venture capital type investments. Hedge fund strategies range
from market neutral to directional strategies. We recommend our clients
emphasize market neutral strategies (approximately 50%) with some
exposure to event-driven and long-short strategies.
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5. Describe your firms methodology for identifying and evaluating investment

opportunities, and describe your policy of recommending asset allocation changes in
response to changes in the investment environment. Describe the added value
associated with these recommendations.
The vast majority of Wilshires asset allocation work focuses on the development and
implementation of a long-term strategic asset allocation policy that is appropriate for the
clients unique liabilities, return objectives and risk tolerance. Our view is that strategic
asset allocation is the main driver of a funds return and risk experience and the key
factor which determines whether financial and investment objectives will ultimately be
satisfied. We believe this is the single most important decision a plan sponsor can make.
There are circumstances, however, where a tactical allocation may be warranted.

Wilshire focuses tactical reallocation recommendations around major asset classes as
well as sub-asset classes such as small cap U.S. equity, emerging markets, high yield,
non-U.S. fixed income securities and inflation-protected securities (such as TIPS). We
generally recommend that our clients maintain allocations to these asset classes
consistent with the funds stated long term targets, but recognize that there are times
when valuations are either markedly attractive or unattractive and which could provide an
opportunity for risk reduction or return enhancement. When excessive valuations are
observed (or other risk factors are high), we would maintain an allocation near the low
end of the rebalancing range, or eliminate the allocation if appropriate. When valuations
are particularly attractive, we may recommend an allocation at the high end of the
rebalancing range.
We also implement tactical allocation via the retention of managers that have
demonstrated the capability to make such decisions. For example, certain managers have
exhibited skill in global macro type strategies whereby they allocate to many small and
uncorrelated positions among global markets at a macro level. Wilshire has worked with
certain clients in implementing such strategies. In addition, Wilshire prefers to use these
strategies for their alpha-generating capabilities and then overlaying them on other asset
classes for a desired beta exposure.
To summarize our view, Wilshire believes that the asset allocation policy should
primarily be managed with a strategic focus and implemented utilizing disciplined
rebalancing policies; however, we believe that incremental value may be added through
certain tactical allocation decisions when market conditions dictate.
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Investment Manager Searches

1. Do you maintain a proprietary database of managers; use a third-party database; or
both?
Wilshire collects and maintains its proprietary and internally developed database of
investment managers and advisors. Currently, Wilshires stock and bond manager
databases cover over 7,000 investment products, almost 23,000 mutual funds, and
approximately 5,000 hedge funds1. Wilshires investment product database is divided
into the following major groupings:
ASSET CLASS CURRENT NUMBER OF

INVESTMENT PRODUCTS
U.S. Equity 3,732
TOTAL 7,441
Our internally developed database also holds 389 hedge fund-of-funds investment
products and 569 hedge fund products. We maintain separate databases of
approximately 70 private equity fund-of-funds products and 50 private real estate
managers. In addition, our real estate database has more than 100 managers.
Manager data is obtained directly from investment managers, who fill out Wilshires
quantitative and qualitative questionnaires on a quarterly basis. Over 52 pieces of
business information are collected which encompass key professionals, investment
process, research sources, investment style, fees, and performance, including how
performance is calculated. Additionally, we also process portfolios submitted by
managers, which give us over 60 pieces of quantitative information. All of this
information is gathered via Wilshire Odyssey, our on-line data submission site.
Because there is no manual input, the data is not subject to error after it enters
Wilshires databases. The managers themselves can erroneously input data. There
are automated checks built into the system which enable us to go back to the
managers and report apparent errors. Wilshire uses its security databases to calculate
portfolio characteristics, which are consistent across managers and over time. This
capability differentiates Wilshires databases from others.
Business and portfolio information combine into approximately 110 data items,
which for most database managers extends back more than five years. Performance
data, of course, goes back to inception of the investment product and is maintained on
1
External vendors provide hedge fund and mutual fund databases.
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a quarterly basis. From this database we create a manager resume for each
investment product summarizing business, performance and portfolio information.
This information is then input into our proprietary Wilshire Compass system, which
is a PC-based information and consulting tool for analyses that guide the plan sponsor
through a disciplined investment process. It combines comprehensive databases with
sophisticated proprietary investment technology to develop investment policies,
evaluate and implement investment strategies, and monitor the plans investment
program. Mutual Fund data is also input into the Wilshire Compass system using the
same format and integrating qualitative information on managers already in our
database. This allows consultants and clients to screen mutual fund products using the
same process as that used for institutional products.
Wilshire does not charge any fee, direct or indirect, for participation in our databases.
Wilshire maintains an open architecture with respect to our manager databases. We
neither solicit nor accept any remuneration from managers included within our
manager databases. All data provided by managers is on a voluntary basis. The only
cost that a manager incurs to participate in our databases is the cost of their time to
enter the information.
a. How many managers/products are contained in the database(s) that

you use?
i. Public equities
ii. Public fixed income
iii. Private equity
iv. Private fixed income and debt related (i.e. mezzanine,
distressed debt, etc.)
v. Real Assets
vi. Hedge funds
vii. Other
Please refer to the response provide above to Question 1 of the Investment

Manager Searches section.
b. How would the database(s) be available to TRSL staff?
Access to the databases is coordinated through the lead consultant. Some

clients may choose to subscribe to the Wilshire Compass, the Wilshire
AtlasSM, and / or the Wilshire AxiomSM software systems to perform more
in-depth analyses of their investment portfolio. Although Wilshire
provides in-depth analyses as a part of our full-retainer services, some
clients also like to have direct access to these programs for additional
internal analysis of their funds.
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c. If you use a third-party database, list the vendor(s).
Not applicable.
2. For firms that have a proprietary database(s):

a. Do you charge managers direct or indirect fee to be included in the
database(s)?
No. As noted in the response above to Question 1, Wilshire does not

charge any fee, direct or indirect, for participation in our databases.
Wilshire maintains an open architecture with respect to our manager
databases. We neither solicit nor accept any remuneration from managers
included within our manager databases. All data provided by managers is
on a voluntary basis. The only cost that a manager incurs to participate in
our databases is the cost of their time to enter the information.
b. Do you sell access to third-parties?
The Wilshire Compass system, comprising the quantitative elements of

our manager research database, is offered to institutional investors by an
annual retainer fee for subscription to this software system. The Wilshire
Compass is a Windows-based software application that provides clients
with analytical tools to evaluate managers and asset allocations, as well as
access to Wilshire research. Wilshires qualitative database is not
included in the Wilshire Compass and is available to Consulting clients
only.
c. What advantages does your proprietary database(s) have over your

competitors?
Wilshires advantages, we believe, are numerous. First, we have

developed an easy to use electronic interface which eliminates manual
input error for any aspect of the data we collect. Second, we collect actual
portfolios, or in the case of fixed income, portfolio characteristics, so that
we can evaluate portfolio characteristics on an apples to apples basis.
Additionally, having this level of detail enables us to utilize our
sophisticated portfolio analytics to independently determine whether a
manager is implementing their strategy as they claim and how consistently
they are doing so. Third, because our database is not purchased and we
have dedicated programming resources, we are able to continually add
new manager evaluation tools and reports. Fourth, our systems are able to
store all the data we collect which means that for some managers, we have
historical quarterly data going back ten years or more. This is not a
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capability that most investment managers have for their own investment
products! Thus, we believe our databases provide us with a powerful
knowledge advantage in terms of our ability to evaluate investment
managers and products relative to our competitors.
d. How often are managers in your database reviewed, and under what
circumstances are managers added to and/or deleted from the
database(s)?
Wilshires manager data is collected directly from managers through their

responses to our quantitative and qualitative questionnaires and website
data submissions. The databases are continuously updated as new
information is obtained, but at a minimum of at least quarterly. Wilshires
databases are unique in that actual equity manager portfolios are input into
our databases so that portfolio characteristics can be calculated in a
uniform fashion across all managers, making manager comparisons more
accurate. Fixed income portfolio characteristics data is collected with
explicit instructions that managers utilize Wilshires methodology for
calculating current yield, yield-to-maturity duration and convexity in order
to ensure uniformity of these measures.
Quantitative Information:
Wilshire utilizes an internally developed web-based data collection
facility, known as Wilshire Odyssey, to help managers and Wilshire in the
creation and retrieval of quantitative information. This information is then
input into our proprietary Wilshire Compass system. Our quantitative
questionnaires are designed to provide comprehensive profiles of
managers who extend beyond just performance numbers and include
general business information such as key professionals, investment
process, research sources, investment style, fees, and performance,
including how performance is calculated. Additionally, we also process
portfolios submitted by managers. Performance data, of course, goes back
to inception of the investment product and is maintained on at least a
quarterly basis. Wilshire also requests a response from the manager
regarding CFA Institute compliance and outside audit verification.
Minority-owned, women-owned, and disabled veteran-owned managers
are incorporated into the Wilshire database in the same manner as other
managers, according to asset class. Wilshire uses its security databases to
calculate portfolio characteristics, which are consistent across managers
and over time. This capability also differentiates Wilshires databases
from others. We calculate portfolio characteristics for most managers,
which include:
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# Portfolio holdings
Debt ratings (bonds)
Risk measures (beta, debt / equity ratio)
Growth measures (ROE, earnings growth)
Maturity, duration (bonds)
Industry weightings
Country weightings
Value measures (P/E, P/B, yield)
Market capitalization measures
Mortgage, corporate weightings
Qualitative Information:
Wilshire collects and maintains a universe of qualitative questionnaires
submitted by investment managers for the products they offer. Three
types of questionnaires are collected from each firm: one addressing the
firm, one addressing the asset class and one that is product specific. These
questionnaires are maintained electronically. Additionally, comparisons
are more accurate. Fixed income portfolio characteristics data is collected
with explicit instructions that managers utilize Wilshires methodology for
calculating current yield, yield-to-maturity duration and convexity in order
to ensure uniformity of these measures.

Wilshire conducts manager meetings on an on-going basis by both
Wilshires Manager Research Group and our investment consultants.
Wilshire conducts meetings both at Wilshire offices and on-site at
manager offices. When conducting an on-site visit, our manager research
specialists spend several hours in an investment managers office, meeting
with key investment professionals, senior business management
professionals and operations professionals on an individual basis.
Wilshire observes the investment process (e.g. attend investment
meetings), reviews internal research, assesses portfolio management /
research tools (e.g. databases, valuation models, etc.), reviews compliance
procedures, and assesses trading capabilities. Manager research
professionals and consulting staff meet with approximately 1,500
managers per year. Generally, Wilshires Manager Research Group meets
with active managers on a face-to-face basis once per year. For passive or
quantitative managers, frequency is dependent on organizational issues.
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Additionally, consultants meet with each of their clients managers at least

annually; many of these meetings are conducted on site.
Peer Group Comparisons

Wilshire utilizes both market indexes and peer ranking to conduct relative
performance comparisons. We believe that appropriate market indexes are
the most relevant comparison in the evaluation of manager or asset class
performance. That said, it is appropriate to review peer rankings to gauge
the relative success of the respective investment manager. Lacking this
additional comparative perspective, a board could conclude that their
manager was abysmal and seek to put the firm on watch or even replace
them. Thus we prefer to use all available comparisons, but emphasize
market index comparisons. There are three data systems that the
Performance Measurement Group utilizes to deliver its relative
performance comparisons that have all been internally developed and
maintained:
Index Databases
Index databases are utilized to compare levels of performance and
investment characteristics to specific indices. Our database can provide
style benchmarks as well as develop normal portfolios for clients.
Wilshire has recommended both standard published indices as well as
custom benchmarks tailored to a clients individual needs. Wilshires
index database contains over 1,100 indices that are directly collected from
original index sources, both U.S. and non-U.S. Internal Wilshire indices
are updated daily and all outside indices are updated monthly.
Manager Universe Databases

Manager universe databases are utilized to compare a managers
performance to its appropriate peer group. Wilshire collects and maintains
its proprietary and internally developed database of investment managers
and advisors. Our manager database is divided by asset class and product
category and has performance data since inception. No payment is
required from managers to participate in our database to ensure no conflict
of interest. Managers submit their data to Wilshire quarterly and such data
is maintained by Wilshires Manager Research Group in our central
database. Currently, Wilshires stock and bond manager databases cover
over 7,000 investment products (representing over 1,500 investment
managers), 23,000 mutual funds provided by Morningstar, and
approximately 3,000 hedge funds.
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Total Fund Universe

The Wilshire Cooperative Universe ServiceSM (WILCOPSM) is used for
comparisons of total funds and asset class portfolios. The live portfolio
returns in this database come from the pooled effort of many of the largest
and most respected investment consultants, including Wilshire
Consulting. With total assets of approximately $800 billion, the 14,000+
institutional portfolios include public employee, corporate defined benefit,
eleemosynary and Taft-Hartley plans. Total fund data is resident on our
internal system with data received from Wilshire Consulting clients and
WILCOP clients, which are small and medium size consultants across the
U.S., and is updated quarterly.
The great variety of information available in WILCOP allows Wilshire to

compare clients performance in many different ways: against funds
similar in size and type, with similar or different asset allocation
strategies.
Wilshire will add a manager to our database should it meet the following
criteria:
A minimum of $100 million in assets

Open for business
Institutional quality product
Managers are not deleted from our database unless at the request of the
manager. In the event a product is no longer available it will continue to
be listed in our database but will be labeled closed.
e. Describe how your firm gathers, verifies, updates, and maintains the
data collected on the manager database(s).
Please refer to the response provided above the Question 2.d.
3. Describe your firms process for evaluation and selection of investment managers
including your process for meeting and conducting on-site visits.
Wilshires manager search process is described in detail in response to Question 23.a.iv

in the Organization and Background section.
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valuation models, etc.), reviews compliance procedures, and assesses trading capabilities.
Manager research professionals and consulting staff meet with approximately 1,500
managers per year. Generally, Wilshires Manager Research Group meets with active top
tier managers on a face-to-face basis once per year. For passive or quantitative managers,
frequency is dependent on organizational issues. Additionally, consultants meet with
each of their clients managers at least annually; many of these meetings are conducted
on-site.
4. Describe how your firms process for evaluation and selection of investment
managers adds value beyond the mere provision of raw data. Has your firm added
alpha/excess returns? If so, please describe.
Wilshire capabilities and philosophy in providing manager oversight consulting services

is defined by the depth and experience of Wilshires Manager Research Group and the
method through which we obtain manager product information. Also, Wilshires
proprietary analytics, and the fact that we collect and store portfolio level data, provide us
with advanced manager portfolio insights. This is a capability not offered by our peers,
who rely predominantly upon historical return data as the basis for their views on
managers. In addition to our databases, which are free and open for participation to all
institutional managers, we also have a full-time, dedicated staff of manager research
professionals. Generally, Wilshires Manager Research Group meets with active top tier
managers on a face-to-face basis once per year. Often, as part of our due diligence
process, this meeting takes place on-site at the managers offices. For passive or
quantitative managers, frequency is dependent on organizational issues. The manager
research analysts conduct daily meetings with all classes of investment managers both in
our offices in Santa Monica and Pittsburgh.
valuation models, etc.), reviews compliance procedures, and assesses trading
capabilities. Manager research professionals and consulting staff meet with
approximately 1,500 managers per year. Generally, Wilshires Manager Research Group
meets with all top tier managers on a face-to-face basis once per year. Additionally,
consultants meet with each of their clients managers at least annually; many of these
meetings are conducted on site.
Additionally, Wilshire Consulting has developed another way to evaluate managers by

using a quantitative based scoring system for summarizing historical manager
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performance in a single number. In our opinion, the most important step and most time
consuming in manager selection is the qualitative evaluation, focusing on the
organization, investment philosophy and process, resources, etc. However, a managers
performance history up to the evaluation date also needs to be analyzed to determine how
their qualitative attributes have manifested themselves in risk and return. The difficulty
lies in identifying meaningful metrics, choosing an appropriate time period, adjusting for
risk and considering how a managers competitors have performed. Wilshire
Consultings Historical Investment Performance (WHIP) Score is an effort to evaluate
risk and return across these various dimensions and summarize the results in one number
to facilitate the performance comparison of competing managers.
The WHIP score is comprised of three tests plus an adjustment factor. The Skill Test
measures a managers return in excess of a benchmark and evaluates that performance in
relation to the excess risk that the manager has exhibited. The goal is to determine
whether a managers bets versus the benchmark are paying off and to be able to fairly
compare one manager to the next. While the WHIP score seeks to automate the
quantitative scoring process, clients are still free to request and review a detailed custom
quantitative analysis of a managers performance or any other scoring methodology that
they may prefer.
Performance Evaluation and Reporting

1. Does your firm have the capability of using rates of return calculated by TRSLs
custodian bank in your performance evaluation reports?
Yes. The decision by the TRSL to have all performance and attribution analysis
performed by its custodian would have no impact on our process. Wilshire is a full-
retainer consultant engaged with providing our clients our best thinking about asset
allocation, investment structure and manager selection and evaluation. In order to
provide the Foundation with the best information possible, we gather performance data
and load portfolio positions into our systems. Because the actual return calculations are
straightforward, the function of gathering performance data and portfolio positions will
serve two purposes. First, it will allow us to review the data for accuracy (custodial
services often do not perform return reconciliation). Second, loading the portfolio
positions into our system will enable our team to build an efficient investment structure
for TRSL.
2. Can your firm provide custom benchmarks, including investment style benchmarks,
and peer universe rankings (i.e. public defined benefit pension funds)?
Wilshire is a leader in the development of benchmarks. In the 1970s, recognizing the

narrowness of the Dow Jones Industrial Average and the S&P 500 Index, Wilshire
created a full market index, the Wilshire 5000 to measure U.S. stock market performance
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(now re-branded the Wilshire 5000 Total Market IndexSM). Selection of the Wilshire
5000 by both Alan Greenspan and Dr. William Sharpe for their work respectively and as
a measure of the full U.S. market is a gratifying recognition of the strength of Wilshires
work.
Wilshire pioneered the entire category of U.S. equity style indexes, having come out with
the Wilshire Target Indexes for large cap growth and value, small cap growth and value
and core large cap and small cap indexes in 1988. Further, we developed the Wilshire
Real Estate Securities IndexSM that is now recognized by institutional real estate
securities managers as an institutional quality real estate securities index. It was the
index chosen by State Street Global Advisors against which to develop its real estate
securities exchange-traded fund. Wilshire has had considerable experience in leading the
way on index creation for our competitors to follow.
Custom Benchmarks
Wilshire recognizes the importance of customizing indices and analyses to clients
individual circumstances. Since we have the entire source of data comprising the indices on
our U.S. and non-U.S. equity and bond databases, we are able to easily alter these indices to
reflect special circumstances.
The following are some of the sources of the benchmark databases Wilshire uses:
American Stock Exchange H&Q NYSE

Citigroup Global Markets IFC NASDAQ
First Boston Barclays Capital Payden & Rygel
Frank Russell Merrill Lynch Richards & Tierney
Financial Times JP Morgan Standard & Poors
Froley Revy MSCI Toronto Stock Exchange
Goldman Sachs NAREIT Wilshire Associates
The previous sources account for approximately 500 standard indices contained in
Wilshires benchmark database. These benchmarks are updated either monthly or
quarterly, and characteristic information is collected on the majority of the indices to
enable total fund and manager attribution.
Wilshire has been a leader in creating custom indices to measure investment

performance. Our experience began in 1975 when we created the Wilshire 5000 Equity
Index (now re-branded the Wilshire 5000 Total Market IndexSM), representing a
capitalization weighted average return for all publicly traded U.S. stocks. Since that time
we have created several other custom U.S. equity indices. These include:
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Wilshire 5000 Total Market IndexSM

Wilshire 5000 IndexSM - Price
Wilshire 4500
Wilshire 4500 - Price
Wilshire U.S. Large-CapSM
Wilshire U.S. Mid-CapSM
Wilshire U.S. Small-CapSM
Wilshire U.S. Micro-CapSM
Wilshire U.S. Top 2500 GrowthSM
Wilshire U.S. Top 2500 ValueSM
Wilshire U.S. Large-Cap GrowthSM
Wilshire U.S. Large-Cap ValueSM
Wilshire U.S. Mid-Cap GrowthSM
Wilshire U.S. Mid-Cap ValueSM
Wilshire U.S. Small-Cap GrowthSM
Wilshire U.S. Small-Cap ValueSM
Wilshire Small Cap 250
Wilshire Small Cap 250 - Price
Wilshire REIT
3. Discuss the portfolio analytics your firm is capable of providing?
Among institutional consulting firms, Wilshire is a preeminent provider of analytical

software to the investment industry. These products include Wilshire Compass, Wilshire
Atlas, Wilshire Axiom, and Wilshire AbacusSM.
Our technological capabilities, combined with the experience and skills of our consulting
staff, enable us to assist clients with almost any investment issue imaginable. Wilshire
builds all its own software using Java, Microsoft SQL, Windows C/C++ with C-tree
database, which it can control and customize in order to meet clients needs. Below is a
listing of primary technology capabilities used to support the efforts of Wilshire
Consulting:

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exhibits and reports through the Internet, by accessing Wilshires home page and using
portfolios, with comparison to selected indexes and universes.

with analytical tools to evaluate managers, investment structures, and asset allocations, as
well as access the Wilshire research. Wilshire Compass clients can receive updates to
their software, which includes extensive manager and index databases, via the Internet.
The Wilshire Compass is a desktop multi-tiered visual basic application with SQL Server
2000 as its database engine. Wilshires consultants use these products daily in
conducting analyses for their clients.
non-U.S. equity), and the Wilshire AxiomSM (U.S. and non-U.S. fixed income), are used
the Wilshire AtlasSM and the Wilshire AxiomSM for fixed income and equity analytics.
The Wilshire iQuantumSM is an integrated performance measurement, performance

attribution and risk management solution for multi-currency, multi-asset class portfolios.
Wilshire iQuantum is built on the foundation of more than three decades of Wilshire's
sophisticated analytical models to provide the most robust attribution and risk analytics in
the investment industry. Building on the success of the popular Quantum suite, Wilshire
iQuantum assists firms with portfolio analysis, management and reporting.
Wilshire Risk Management Consulting - Since the inception of our Consulting practice
nearly 30 years ago, Wilshire has worked with clients to identify risks that will not be
systematically rewarded and to implement structures that help minimize or eliminate
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those risks. Very few organizations are structured to combine plan sponsor know-how,
analytical expertise and technical systems essential elements required to support plan
sponsor risk management. Wilshires ability to leverage these resources puts us in a
unique position to define best practices.
historical monthly and quarterly performance reports through a fund-specific password-
index performance, etc. If a client is interested in directly working with specific tools
such as the Wilshire Compass or the Wilshire AtlasSM (equity portfolio global risk
analysis), this can be incorporated into our service fee offer.
a. Do you have international analytic capabilities?
Yes, please refer to the response above to Question 3.
i. List capabilities
b. Do you have alternative (private market) asset analytic capabilities?
i. List capabilities
4. Describe your firms capabilities in the development of risk/return characteristics of

the asset mix as a whole and of each asset class category and manager style.
Wilshire believes that return should only be measured and evaluated in the context of risk
taken. The primary tools we use to describe, quantify and evaluate risk are the Wilshire
AtlasSM, the Wilshire AxiomSM, and recently, the Wilshire iQuantumSM which incorporate
best-of-class equity and fixed income risk models. These ex-ante, multi-factor risk
models use advanced statistical and investment theory. They are used by asset managers
around the world to provide a comprehensive understanding of the investment risks in
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their portfolios. We believe it is a major comparative advantage to have the developers

and designers of these systems at our disposal.
Among the types of risks our systems provide are:
Portfolio Beta
Fundamental Factors (Size, Price-to-Book, Earnings, Momentum, etc.)
Yield
Manager Style
Industry Exposure
Security Concentration (Marginal Risk Analysis)
Portfolio Duration
Credit Quality
Term Structure
Spread Duration
Active Risk
Active Risk Decomposition
Currency Risk / Hedging Impact
These tools and metrics measure ex-ante risk at varying horizons. Using notional (versus
market) exposures derived from holdings information, and equity, fixed income and
currency factor covariance, expected standard deviations of absolute, relative and total
risk are estimated and attributed in dimensions that relate directly to managers
investment strategies.
Wilshires performance report allows us to calculate returns on many levels: the total
fund level, the composite or asset class level, and the manager level. Each of these can,
in turn, be measured against the appropriate benchmark, the funds investment policy and
a universe of peers.
Our portfolio analytics are unique given Wilshire Consultings use of the many products
developed by Wilshire Analytics. These include global equity and bond risk modeling.
Thus, we are able to provide a wide array of standard and custom portfolio analysis on a
large number of characteristics in addition to returns and return attribution. Wilshire can
accurately assess the influence of style and size bets in equity portfolios, the influence of
country and currency bets in non-U.S. portfolios and the impact of duration, convexity,
and credit exposures in bond portfolios, to name just a few of the factors we routinely
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analyze. For example, our equity sector attribution analytic calculates the precise
contribution to return from each sector exposure. Further, we can look within sectors to
determine which stocks impacted results the most. Quarter in and quarter out, this type
of detail enables us to better understand what themes are present in a managers portfolio
and whether they are implementing their strategy in a manner consistent with their stated
investment philosophy.
5. What risk monitoring capabilities does your firm provide (i.e. Value at Risk).
Wilshire has extensive capabilities in the use of Value-at-Risk (VaR) analysis through
our proprietary Wilshire Compass system. VAR can be calculated on an absolute basis
(i.e. absolute loss vs. initial starting value) or on a relative basis (relative to an expected
return, a liability stream, or any other custom benchmark).
VAR analysis is a good short-term risk management tool and when used in conjunction
with broader evaluation methods is an excellent method for evaluating the impact short-
term risk management decisions have on the potential long-term value of the fund.
However, because VAR analysis focuses exclusively on the lower tail of portfolio
outcomes, it may needlessly discourage investors from accepting systematic market risks
that ultimately reward investors with longer investment horizons.
In the graph below, we calculate the absolute and relative VARs for a $1,000,000
portfolio over several time periods with 95% confidence. Notice that the maximum
expected loss or absolute VAR relative to todays $1,000,000 billion starting value is
$65.7M over three months and $91.9M over twelve months.
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The VAR Analysis model in the Wilshire Compass can also be used to calculate VARs
for different portfolio mixes over a single time period. In the graph below, we compute
VARs for four different asset mixes over a twelve-month time interval. Based on the
analysis, Portfolio 4 has the lowest VAR of $57.2M and Portfolio 1 has the highest VAR
of $91.9M over a twelve-month period, assuming 95% confidence.
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Wilshire feels that VAR analysis is an effective tool for monitoring exposure to financial
market risk. It provides comparability of risk and a standard framework to evaluate and
communicate risk. However, VAR appears most relevant for measuring the risk of loss
over exceedingly short time horizons. It assumes positions remain constant and may not
capture all risk elements, such as event risk. Traditional asset allocation and risk
management tools provide greater insights for long term investors. Therefore, Wilshire
typically utilizes mean-variance optimization when consulting on asset allocation
decisions. It is our experience that most clients prefer to follow this traditional method.
6. What investment policy compliance monitoring capabilities does your firm provide?
Because Wilshires performance measurement system is proprietary and Executive

Summaries are customized for each client, we have the ability to systematically review
and comment on whether managers are appropriately implementing clients guidelines
or account restrictions. Our quarterly analytics can be used to highlight these guideline
issues in order to ascertain the managers successful adherence to client guidelines. We
have religious and non-profit clients who often have security or industry restrictions.
Our analytics are structured to enable us to easily screen on these characteristics, as well
as others, in order to effectively monitor guideline compliance and account restrictions.
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7. What factors do you consider to be critical in reporting performance?
All aspects of Wilshires performance reporting are geared towards enabling both the
consultant and the client to understand how portfolios are meeting the clients objectives,
from both return and risk perspectives. In many cases, we are able to structure the
reporting to also ensure the clients investment policy and manager guidelines are being
met sufficiently. Examples of exhibits which enable us to assess risk are our holdings-
based style map, fixed income quality breakdown, and non-U.S. equity country allocation
analyses. We regularly utilize our Wilshire Compass system to evaluate client managers
on multiple levels. Examples include our rolling skill and information ratio analyses,
peer comparisons and fixed income style maps.
On a qualitative level, we utilize Wilshires Manager Research Group to regularly review

client managers for organizational issues, such as personnel changes, product changes,
regulatory issues, when they arise, and other qualitative aspects. Thus, between our
regular quantitative analysis and qualitative reviews, we provide clients with a complete
picture of how well a manager is performing in fulfilling their respective mandate from a
performance and compliance perspective in addition to how the managers firm is faring,
in general.
All of Wilshires performance reports are geared towards analyzing numerical and
operating performance for the clients investment vehicles and the funds overall. Clearly,
we seek to design a report and Executive Summary that allow the client to determine if
the goals, objectives and policy are being met.
8. Do you have the ability to customize reports for clients?
Wilshires performance measurement system is proprietary, which allows us to conduct

and report on customized analyses for our clients. Therefore, a client may have a
significant amount of input into the content and format of their respective performance
report. There is flexibility in producing non-calendar period results. Wilshire currently
provides several clients with fiscal year period results depending upon their respective
fiscal year cycles. Unless additional systems need to be developed or extensive
programming is required, there is no additional cost for customizing client reporting.
Wilshire provides investment performance results to its clients in three formats. First, in-
depth performance books are produced quarterly. These reports contain audited and
reconciled performance numbers for all managers and composites in the portfolio, in-
depth analyses of managers and composites, portfolio asset lists, and flow of funds data.
An example of our quarterly Performance Analysis Report is provided under separate
cover.
Second, our consulting staff produces a customized Executive Summary each quarter that
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filters the results in the performance report into a format more easily understood by
committees and board members. These reports contain commentary on market
conditions, our interpretation of fund, asset class and manager performance, and our
recommendations for the client. A sample Executive Summary is provided in the
Appendix, Tab 5.
Third, Wilshire generates Monthly Flash reports for clients who request them. These
reports contain the returns for each manager and composite for the most recent period,
and would only be a few pages long. A sample monthly Flash Report is provided in the
Appendix, Tab 6.
9. What period of time is required to prepare reports after the end of the each month?
Quarterly Performance Analysis Reports are generated anywhere between 20 to 30

business days after quarter-end, depending upon the types of asset classes in which
clients invest and the timely receipt of information from custodian banks and managers.
Quarterly Executive Summary reports are provided along with the Quarterly Performance
reports and are also available 20 to 30 business days after quarter-end.
Monthly Flash Reports are available within 10 to 15 days after month-end, depending
upon the ability of the master trustee to provide Wilshire finalized month-end numbers
and the types of asset classes in which the client invests.
Technology
1. What technology capabilities beyond any internal investment manager database(s)
do your firm have that added value to the investment consulting and monitoring
process?
Wilshire earned a leadership position in the industry by specializing in innovative

investment research and services. For over thirty years, our clients have trusted Wilshire
to lead the institutional investment community by transforming complex theory into
practical applications as we have developed a number of innovative market standards for
our clients:
Wilshire Analytics
Wilshire 5000 Index (now re-branded the Wilshire 5000 Total Market
IndexSM)
Equity and Fixed Income Risk Models
Integrated Asset / Liability Modeling
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Equity Style Indexes

Equity and Fixed Income Portfolio Optimization
Wilshire Trust Universe Comparison (Wilshire TUCS)
A significant focus of the firms resources is on investment technologies and the

application of investment technologies to solve investment-related problems. One of the
first asset allocation models was built at Wilshire, as were some of the first truly global
risk models. The Wilshire Compass was among the first executive decision tools for
fund sponsors and is now used by funds totaling nearly $1 trillion in assets to develop,
monitor and evaluate their investment programs. Wilshire Consulting also benefits
greatly from accessing the products of Wilshire Analytics, which are leading edge
portfolio risk analytics. We use advanced fixed income analytics in our performance
measurement system and utilize multifactor risk models for equities to conduct
specialized portfolio analysis for our clients.
Insurance and Liability

1. What limitation on liability, if any, do you impose through your contract?
Except in matters in which a court of competent jurisdiction makes a final and binding
determination that Wilshire acted, or failed to act, in a manner which constitutes gross
negligence, willful misconduct or bad faith, the aggregate liability of Wilshire to any one
or more other parties in connection with Wilshires engagement as contemplated in this
RFP shall not exceed the total amount of fees received by Wilshire from TRSL in the
contract year in which the claim occurred.
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2. Describe the levels of coverage for error and omissions insurance and any fiduciary
or professional liability insurance your firm carries?
AGGREGATE A.M.
TYPE OF POLICY / BOND LIABILITY INSURER BEST
LIMIT RATING
General Liability $2,000,000 Chubb Insurance Co. A++
Investment Advisors Errors $10,000,000* St. Paul Travelers A
and Omissions*
Electronic Data Processing $2,125,000 Chubb Insurance Co. A++
Commercial Excess Liability $4,000,000 Chubb Insurance Co. A++
Business Personal Property $12,535,000 Chubb Insurance Co. A++
Workers Compensation $1,000,000 Zenith Insurance Co. A-
Employers Liability
Employee Benefits Errors and $1,000,000 Chubb Insurance Co. A++
Omissions
Most errors and omissions coverage deals with discretionary items, and since
Wilshire does not have discretion over most of our clients assets, we do not find it
necessary to have such coverage for our general consulting practice. However, for
those clients who for legal or other reasons require errors and omissions coverage, we
carry errors and omissions insurance and would amend our policy to cover the
additional client and add the additional cost to our consulting fee. We currently
maintain an errors and omissions policy, with a limit of $10,000,000 with St. Paul
Travelers Insurance Company. However, as explained above, this coverage applies
to specified consulting clients only.
3. Is coverage on a per client basis, or is the coverage applied to the firm as a whole?
As noted above, most errors and omissions coverage deals with discretionary items, and
since Wilshire does not have discretion over most of our clients assets, we do not find it
necessary to have such coverage for our general consulting practice. However, for those
clients who for legal or other reasons require errors and omissions coverage, we carry
errors and omissions insurance and would amend our policy to cover the additional client
and add the additional cost to our consulting fee. We currently maintain an errors and
omissions policy, with a limit of $10,000,000 with St. Paul Travelers Insurance
Company. However, as explained above, this coverage applies to specified consulting
clients only.
4. List your insurance carrier(s).
Please refer to the response above to Question 2.
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5. Describe your disaster recovery plan and facilities.
Wilshire has an extensive back up and file duplication process to eliminate the risk of file
deletion or corruption. All Wilshire files are backed up daily and there is an off-site
location to which archive files are sent for security purposes. Furthermore, to prevent
outside infiltration into our extensive files and databases, Wilshire ensures that all files
are protected by advanced technology security procedures, including firewalls.
In addition, Wilshire has procedures implemented to ensure that system access to

information of an operating group is limited to that groups members. Each Wilshire
operating group and business unit accesses information related to its business through
separate file servers and / or separate drives or shared servers. Access to servers and
drives is controlled by individual user access through our separate IT group. There are
distinct client contact databases for each group on their own servers to ensure that
Wilshire Analytics databases are not shared with consultants and vice versa. Commonly
used analytical tools like the Wilshire AtlasSM and Wilshire AxiomSM are used
independently; therefore, any client portfolios that Wilshire Analytics may be working on
cannot be accessed by other groups.
In order to provide for increased redundancy for critical systems, to ensure Internet
connectivity, and to mitigate the potential effects of rolling energy blackouts and other
energy outages, Wilshire undertook the following major technology initiatives:
Wilshire has implemented a co-location strategy for the companys

production and back-up servers that support primary business applications.
Wilshire has installed a secondary Uninterruptible Power System (UPS) to
back-up critical business servers and network hardware, and integrated it
into the companys Emergency Power Plan.
Also, Wilshire installed secure network connections VPN (Virtual Private
Network) with its remote offices outside of Santa Monica in Pittsburgh,
Jersey City, London, Amsterdam, and Canberra.
Each office has back-ups at a corresponding office. For Wilshire Consulting, Santa
Monica backs up the Pittsburgh office and the Pittsburgh office backs up Santa Monica.
These initiatives represent a significant technology investment in production performance
and disaster recovery assets not only in facilities and hardware, but also in network
configurations to implement them.
6. Describe your firms procedures in the event that key personnel, particularly those
assigned to TRSL, should leave the firm or become incapacitated.
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If the lead consultant should leave the firm or become incapacitated, it is the duty of the
back-up consultant to resume work on the account. Having several professionals
assigned to the account ensures that they will be familiar with all client issues.
Additionally, as President of Wilshire Consulting, Julia Bonafede backs-up all senior
consultants.
Wilshire delivers our consulting services to clients using a team approach. Each of
Wilshires consulting teams is composed of at least two senior consultants who manage
the overall client relationship. Consulting associates provide back-up for the senior
consultants as well as research support for client projects. Additional research and
performance specialists manage all data analysis. Team sizes vary by number of clients
managed by consultants. Wilshire Consulting adds resources as necessary to maintain
our high quality of service.
Previous Clients and References

1. Provide a representative list of clients for which you provide consulting services.
Include your ten largest clients based on asset size and the three (3) defined benefit
public retirement system clients. TRSL will use this list to select at least three (3)
references.
A representative list of current Wilshire Consulting clients is provided in the following

table.
APPROXIMATE
CLIENT TYPE ASSET VALUE INCEPTION
Alltel Corporation Corporation $900 Mil 1984
Ahmanson Foundation Other Non-Profit $1.1 Bil 2000
Army and Air Force Exchange Fed/State Govt $5.6 Bil 1995
Bayer Corporation Corporation $6.5 Bil 1984
CalPERS Fed/State Govt $180 Bil 1984
Concordia Plan Services Religious $2.5 Bil 2010
Dallas Employees Retirement Fund Local Govt $3.3 Bil 1994
Daughters of Charity Religious $1.4 bil 1988
Dole Food Company Corporation $240 Mil 1994
Ferro Corporation Corporation $280 Mil 2004
Franchise Insurance Group Insurance $100 Mil 2009
Goodyear Tire and Rubber Corporation $6.5 Bil 1983
Hawker Beechcraft Corporation $1 Bil 2007
Health Net, Inc. Corporation $1.2 Bil 2003
Houston Municipal Employees Local Govt $2.4 Bil 1995
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Knox County ERS, TN Fed/State Govt $170 Mil 2000

Massachusetts Port Authority ERS Fed/State Govt $410 Mil 1999
Montgomery County ERS, MD Local Govt $3 Bil 1997
Newell Rubbermaid Corporation $500 Mil 2009
Owens Corning Corporation $860 Mil 1985
Ohio Police and Fire Pension Fund Fed/State Govt $10.8 Bil 1996
Ohio Tuition Trust Authority College Savings $5 Bil 2007
Plan
Pennsylvania Public Schools Fed/State Govt $70 Bil 1998
Southern Ute Indian Tribe Native American $1.6 Bil 2002
Nation
Summa Health Care Insurance $500 Mil 2008
Stanford Hospitals and Clinics Health Care $800 Mil 2007
Stanley Black and Decker Corporation $1.5 Bil 1990
Sysco Corporation Corporation $2.5 Bil 2009
Teledyne Technologies Corporation $600 Mil 2001
University of Connecticut Educational $320 Mil 2001
Foundation
University of Reno Educational $500 Mil 2007
University of South Florida Educational $170 Mil 2000
Foundation
Villanova University Educational $500 Mil 2010
The following is a summary of Wilshire Consultings 10 largest full-retainer clients. A

description of the services provided in our full-retainer consulting relationship is
provided in the end of this response.
PHONE APPROXIMATE INCEPTION

CLIENT CONTACT NUMBER ASSET VALUE YEAR
California Public Employees Anne
(916) 795-3400 $180 Bil 1984
Retirement System (CalPERS) Stausboll
Non-Discloseable Public Fund N/A N/A $62.8 Bil 2006
PA Public Schools Retirement Alan Van
(717) 720-4702 $47.0 Bil 1998
System Noord
Lisa
LACERA (626) 564-6132 $35.4 Bil 2006
Mazzocco
Non-Discloseable Public Fund N/A N/A $20.7 Bil 1987
Non-Discloseable Corporation N/A N/A $12.5 Bil 1998
Ohio Police & Fire Pension
Ted Hall (614) 628-8414 $10.8 Bil 1996
Fund
Non-Discloseable Corporation N/A N/A $7.4 Bil 1984
Tennessee Valley Authority Pat Brackett (865) 632-8578 $5 $10 Bil 1998
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Retirement System
SUPERVALU, Inc Gary Martin (952) 828-4919 $5 $10 Bil 2006
The consulting services provided in the full-retainer relationship include:
Analysis of the financial condition of your plan

Asset / Liability Valuation Analysis
Public market mangers
Custodial searches / record keeping and other vendor searches as
appropriate
Meetings with the investment committee and / or Board
We encourage you to contact clients. However, as a matter of courtesy, we would

appreciate the opportunity to contact our clients first before any reference checks are
made. Therefore, we request that you contact David Lindberg at (412) 434-1580 should
a reference check be required with any of the clients list below. All the clients listed are
full-retainer consulting relationships.
Ohio Police & Fire Pension Fund

Mr. Ted Hall, Chief Investment Officer
140 East Town Street, 8th Floor
Columbus, OH 43215-5146
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Phone: (614) 628-8414

Client Since: 1996
Retirement Board of Allegheny County

Mr. Mark P. Flaherty
Room 104 Courthouse
436 Grant Street
Phone: (412) 350-4650
Client Since: 2007
State of Louisiana Deferred Compensation Plan

Emery Bares, Chairman (Retired)
2237 South Acadian Thruway, Suite 702
Baton Rouge, LA 70808
Phone: (225) 275-0806
Client Since: 2000
Tennessee Valley Authority Retirement System

Pat Brackett
400 Summer Place Tower - 400 West Summit Hill Dr
Knoxville, TN 37902
Phone: (865) 632-8578
Client Since: 1998
2. Provide a list of clients who have terminated your consulting relationship during the
past three (3) years and their reason(s) for doing so, if known. Include the entitys
name, a contact person with title, and telephone number.
APPROX
CLIENT YEAR ASSET REASON CONTACT PHONE
VALUE
Evangelical Lutheran
2010 $1 - $5 Bil Changed vendors Dave Lecander (612) 752-4240
Church Board of Pensions
Northwest Airlines 2010 $1 - $5 Bil Consolidation Teri Richardson (612) 727-6242
The Osborn 2010 <$50 Mil Outsourced Mason Rees (212) 272-5770
Childrens Institute 2010 $100-$500 Mil Changed vendors Jody Mulvihill (412) 240-4200
Reynolds & Reynolds 2010 $100-$500 Mil Changed vendors Michael Gapinski (937) 785-4495
ThyssenKrupp USA, Inc 2010 $1 $2 Bil Changed vendors Deric Righter (248) 643-3605
Medical Mutual of Ohio 2009 $100 - $500 Mil Terminated Plan Darrel Castricone (216) 687-7045
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City of Memphis 2009 $1 $2 Bil Changed vendors Roland McElrath (901) 5766657
University of Pittsburgh 2009 $1-2 Bil Changed vendors Amy Marsh (412) 624-6620
Los Angeles Library Discontinued use of

2009 <$25 Mil Quinn Stills (310) 656-6300
Foundation consultant
New York Life Insurance 2009 $1 - $5 Bil Changed vendors Rufus Devenport (212) 576-6642
Discontinued use of a
Avon Corporation 2009 $1 - $5 Bil Mr. Joseph Kulhanek (212) 282-5237
consultant
Fletcher Jones Foundation 2009 $100-$500 Mil Changed vendors Ms. Christine Sisley (213) 943-4646
Carnegie Mellon University 2009 $1 - $5 Bil Changed vendors N/A (412) 268-1980
Buchanan Ingersoll 2009 $100-$500 Mil Consolidation Hank Winfield (412) 562-3994
Kaiser Aluminum and

2009 $100-$500 Mil Changed vendors Ken Kawaichi (510) 654-3292
Chemical Corporation
BayCare Health System 2008 $1 - $5 Bil Changed vendors Jeff McRae (727) 820-8047
Town of Arlington ERS 2008 $100- $500 Mil Outsourced to State John Bilafer (781) 316-3031
Rhode Island ERS 2008 $5- $10 Bil Changed vendors Ken Goodreau (401) 222-8578
Mardag Foundation 2008 <$100 Mil Consolidation Jack Pohl (612) 224-5463
City of Woonsocket 2008 <$100 Mil Changed vendors Al Brien (401) 767-9208
Ohio Bureau of Workers

2008 $15 - $20 Bil Changed vendors C. Bruce Dunn (614) 466-0088
Comp
Discontinued use of a
American Public Media 2007 $100 - $500 Mil Mark Alfuth (651) 290-1540
consultant
United Water Resources 2007 $100 - $500 Mil Changed vendors Michael Algranati (201) 750-3413
PSEG 2007 $1 - $5 Bil Changed vendors Peter W. Caruso (973) 430-5222
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EXHIBIT B: FEE SCHEDULE
TRSL is seeking assistance with two primary responsibilities in this SFP. The first
is a general investment consultant to its defined benefit investment portfolio. The
second is a general investment consultant to its Optional Retirement Plan (ORP)
which is a defined contribution program available to higher education personnel.
TRSL is accepting proposals for the Defined Benefit service only, the Defined
Contribution service only, and a combined Defined Benefit Defined Contribution
service.
Please refer to Exhibit D, TRSL System Summary for assistance in determining

your fee. State your fee for the services required for a defined benefit only, a
defined contribution only, and/or a combined defined benefit - defined contribution
fee proposal.
Defined Benefit Defined Contribution Combined DB -

Only Only DC*
Year One $500k $150k $550k
Year Two * * *
Year Three * * *
Year Four * * *
Year Five * * *
Please allocate the Combined DB - DC fee proposal between defined benefit and defined
contribution. TRSL has separate funding sources for each which requires precise cost allocations.
* Wilshire believes the highest level of general consulting services to clients can best
be achieved with long-term relationships where we have an opportunity to fully
understand and appreciate the objectives, investment risk tolerance, legal
obligations, and decision-making dynamics of our clients. Our experience has
verified our belief that full-retainer consulting arrangements are most effective and
beneficial for both parties. Therefore, Wilshires standard fee structure is an annual
retainer that includes all of the stated services and many special services that
periodically arise. Full-retainer consulting relationships are the most economical
way for clients to take advantage of our capabilities and resources.
The consulting services in the full-retainer relationship include:
Asset / liability valuation analysis

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Wilshire Consulting

Public market managers
Fund of funds hedge funds
Custodial searches / record keeping and other vendor searches as appropriate
Meetings with the investment committee and /or Board
As noted above, for TRSL, our proposed annual retainer fee is $550,000, plus
reasonable travel expenses for meetings, manager searches and other related services.
This fee is subject to a one year minimum time period and is guaranteed for that time
period. Wilshire builds an annual inflation escalator into our retainer fee. Therefore,
our annual fee is adjusted each year (on the month-end closest to the contract
anniversary) to reflect the change in the prior 12-month level of the Consumer Price
Index (CPI).
Wilshires annual retainer fee is all inclusive. As a result, there would be no separate
non-recurring fees or charges associated with account set-up or transition.
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FINAL Wilshire TRSL SFP Response

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FINAL Wilshire TRSL SFP Response

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Teachers Retirement System of Louisiana

Response to Request for Proposal for Investment Consulting Services

September 17, 2010

Organization and Background

Firm Name: Wilshire Associates Incorporated

Address: 210 Sixth Avenue Suite 3720

Telephone: (412) 434-1580

Facsimile: (412) 434-1584

Client Contact: David L. Lindberg, CFA Managing Director

David L. Lindberg: dlindberg@wilshire.com

Wilshire Associates Incorporated (Wilshire or Wilshire Associates) was founded in

The 1970s First to the Market

The 1980s Continued Innovation

The 1990s Globalization

The 2000s Investing for Clients in the New Millennium

3. Provide an organizational chart for the firm.

Currently, Wilshire employs approximately 350 people worldwide. An organizational

Wilshire is comprised of four distinct business units: Wilshire Consulting, Wilshire

Wilshire Consulting provides asset / liability analysis and asset / spending

Wilshire Private Markets

Wilshire Funds Management

In addition to the four separate business units, approximately 85 employees support

a. Indicate which services are the firms specialties or areas of expertise.

The following factors distinguish Wilshire from our competitors and

by individuals with mathematical, statistical and actuarial backgrounds in

Investment Technology Resources

Our high-quality, long tenured consultants provide client service through a

Service Delivery Model

b. Provide the percentage of revenue derived from investment

Approximately 27% of Wilshires 2009 revenue was derived from

c. Are there any areas of potential conflict of interest between such

recommendations or decisions portfolio managers who have invested in a

Because Wilshire provides a variety of advisory and other services

Another area for potential conflict is between Wilshire Consulting and

It is the policy of Wilshire Associates that recommendations of portfolio

David L. Lindberg, CFA, Managing Director. David joined Wilshire in 2001 to

Felicia F. Bennett, Vice President. Felicia joined Wilshire in 2006 to provide

6. Provide any significant developments in your firm such as changes in ownership,

Advanced Service Model

Extensive Research Capabilities

Advanced Technology Capabilities

Below is a listing of primary technology capabilities used to support Wilshire Consulting.

The Performance Measurement Group works on a proprietary Wilshire developed

The Wilshire Compass is a Windows-based software application that provides clients

historic monthly and quarterly performance reports through a fund-specific password-

Value Added Benefits

In summary, Wilshire is a nationally recognized name in the investment consulting

No. The consultants primary responsibilities are investment consulting.

Wilshire Consulting strives to be a thought leader in the financial industry on behalf of

For a large Southwestern U.S. public pension fund, completely reviewed

Below is a distribution of Wilshire Consulting clients by asset size:

CORPORATE FOUNDATION / PUBLIC

We encourage you to contact clients. However, as a matter of courtesy, we would

BayCare Health System

Phone: (412) 562-3994

Pennsylvania Tobacco Endowment

Evangelical Lutheran Church in America

Total Return Risk

Wilshire will provide a thorough evaluation / recommendation of TRSLs investment

Wilshire recommends performing an asset / liability study at the inception of a new

Asset / Liability Modeling

Return 5.5 6.2 6.8 7.5 8.1 8.8

Standard Deviation (%)

Expected Contribution Rates