During the last several months, a number of large U.S.-based financial institutions have failed or appear to be near failure. This is a direct result of losses incurred related to risky home mortgages and other loans held by these firms, as well as other high-risk transactions. The firms include investment bankers Bear Stearns and Lehman Brothers, along with mortgage lenders Fannie Mae, Freddie Mac, Countrywide Financial, Indymac Bank and insurance giant American International Group (AIG). Merrill Lynch agreed to be purchased by Bank of America in order to avoid a fate similar to Lehman Brothers. There has also been speculation about the future viability of other financial institutions.

The General Board of Pension and Health Benefits (General Board) understands that participants are aware of the current market situation and may have concerns about the financial impact these failures have had or might have on their General Board account balances and/or monthly benefits. We have attempted to address some of these concerns in the following questions and answers.