Asset Class Descriptions The Public Growth allocation accesses the strong, long-term returns of publicly traded equity markets. Through ownership stakes in publicly traded global companies, equities benefit from economic growth and corporate value creation. The Public Growth portfolio includes geographically diverse and liquid public equity strategies that are expected to generate attractive absolute returns in a relatively low-cost manner. Public Growth The Public Growth allocation accesses the strong, long-term returns of publicly traded equity markets. Through ownership stakes in publicly traded global companies, equities benefit from economic growth and corporate value creation. The Public Growth portfolio includes geographically diverse and liquid public equity strategies that are expected to generate attractive absolute returns in a relatively low-cost manner. Private Growth The Private Growth investments are almost exclusively held in illiquid closed-end funds. In addition to accepting the economic growth and corporate profitability risks found in the other equity segments, Private Growth investments are subject to risks associated with illiquidity, appraised valuations, leverage, and episodic performance. The Private Growth portfolio is expected to deliver large idiosyncratic positive returns over a full market cycle by accessing value creation that is not accessible in more informationally efficient public markets. The Private Growth portfolio is diversified across general partners, vintage years, strategies, industries, investment types and geographies. Private Equity The Private Equity allocation primarily invests in the equity of unlisted companies and provides value-add services such as operational turnaround, product and sales optimization, management sourcing, and strategic guidance. Private Equity strategies may also invest in unlisted debt in circumstances when distress or special situations provide opportunities for equity-like investment outcomes. Non-Core Real Estate The Non-Core Real Estate allocation seeks to profit from real estate asset price appreciation through value creation activities such as property enhancements, tenant management, legal workouts, or opportunistic investments benefiting from mispricing or distress in the real estate capital markets. Income Role: Over a full market cycle, the Income Bucket seeks to achieve a meaningful yield premia over the investment grade fixed income market (Bloomberg Barclays Aggregate Index) and produce a stable income return stream to help mitigate the system’s negative cashflow. Structure: The Income Bucket Portfolio consists of high yielding public and private fixed income strategies and investments in derivatives that offer a yield or premium. Asset Classes: Equity Options Investments in the Equity Options portfolio collect stable income in the form of option premiums and seek to capitalize on a persistent volatility risk premium (compensation that investors earn for providing protection against unexpected market volatility). The strategies in the Equity Options portfolio are fully collateralized. Emerging Markets Debt ("EMD") The Emerging Markets Debt allocation invests in debt instruments issued by sovereign, quasi-sovereigns, and corporations in developing economies. Debt investments may be issued in broadly used currencies, such as the U.S. Dollar or Euro, or in an emerging market country’s local currency. Collateralized Loan Obligations ("CLOs") The CLO allocation invests in structured securities that are backed by an industry-diverse pool of senior secured bank loans made to sub-investment grade businesses. CLO debt and equity securities are sold in tranches, where each CLO tranche has a different priority of claim on cash-flow distributions. Liquid Credit Strategies included in the Liquid Credit allocation primarily invest in below-investment grade liquid corporate debt securities that offer a higher yield than investment grade corporate bonds. In addition to income generation, Liquid Credit investments may produce return through price appreciation that is driven by economic improvement and issuer performance. Private Credit Private Credit invests in non-traded, non-control performing debt for which current interest income represents the majority of returns. The Private Credit allocation is anchored by strategies that make direct senior loans to smaller companies across sectors, supplemented by esoteric debt strategies such as specialty finance, hard asset-backed lending, and royalties, among others. Crisis Protection Class The Crisis Protection Class (“CPC”) is expected to protect the portfolio during a significant and sustained equity market crisis by appreciating in value during extended periods of significant equity market declines. The CPC is designed to include assets that maintain liquidity during equity market drawdowns, enabling ERSRI to fund benefit payments with assets that have recently appreciated instead of selling depreciated equity investments. In addition to being negatively correlated with equity risk, the CPC is volatile enough to produce a meaningful positive return in response to the market drawdown period. The CPC is designed to exhibit similar volatility to that of the Growth Bucket to allow for substantial returns during periods of significant stress in equity markets. Given this design, the CPC may experience short-term periods of negative returns on its own, especially during non-crisis periods. However, the allocation is expected to positively contribute to the long-term risk-adjusted return of the Total Plan. The CPC targets an equal allocation between its two underlying asset classes, which will be rebalanced to a 50%/50% split if end-of-month (47.5%/52.5%) or intra-month (46.5%/53.5%) thresholds are breached. Systematic Trend Following Systematic Trend Following is a momentum based long-short strategy that seeks to capture both periodic appreciation and periodic depreciation trends that evolve and dissipate across a very wide array of liquid global markets. Systematic Trend Following strategies invest in liquid, exchange-traded futures and forwards across multiple markets including equity, fixed income, commodities and currencies. Long Duration Treasuries Investments included in the Long Duration Treasury Portfolio are long-dated high-quality bonds (Treasuries and full faith and credit Government-backed Agency securities only). The purpose of the long duration U.S. Treasury portfolio is to smooth the volatility of the overall ERSRI portfolio in times of steep equity market decline, by capturing the “flight to quality” effect in an equity market crisis environment. Inflation Protection Class The Inflation Protection Class aims to protect against unanticipated spikes in inflation or long periods of inflation that can have a detrimental impact on the purchasing power of an asset portfolio. The Inflation Protection portfolio is also designed to provide diversification and an element of growth return. Private Real Assets (ex-Real Estate) The Private Real Assets (ex-Real Estate) portfolio primarily consists of privately listed infrastructure funds that invest in physical systems vital to the broad economy or certain essential sectors such as transportation, energy, water/wastewater, and telecommunication. These investments may be supplemented with smaller allocations to funds that invest in resource assets like farmland, mining, or timberland. Core Real Estate Core Real Estate seeks to earn returns through investments in substantially leased, income-producing properties located principally in economically diversified metropolitan areas. Core Real Estate properties generally demonstrate predictable income flows with a high proportion of anticipated total return from tenant rents. Core Real Estate typically has low leverage and limited operational risk relative to Non-Core Real Estate. Volatility Protection Class The purpose of the Volatility Protection Class is to protect against unanticipated spikes in volatility or long periods of volatility that can have a detrimental impact on the long-term performance of an asset portfolio. The Volatility Protection Class is designed to achieve return stability through exposure to assets that provide diversification to the total Portfolio due to low correlation with other classes. Absolute Return Absolute return investments seek to generate performance through active selection of securities and asset classes, with little-to-no consistent bias to broad markets (i.e. beta). Investing in a broad range of securities including equities, fixed income, commodities, currency, and derivatives, absolute return funds serve as diversifiers, seeking returns from active investment decisions, both long and short (i.e. alpha). Investment Grade Fixed Income (ex-Treasuries) The Investment Grade Fixed Income (ex-Treasuries) allocation seeks to provide diversification through broad exposure to U.S. investment grade corporate fixed income securities, including but not limited to U.S. corporate bonds and U.S. Agency mortgage-backed securities. The allocation accepts lower expected returns in exchange for more consistent cash flows and generally more stable valuations. Strategic Cash The Strategic Cash portfolio seeks to obtain a level of current income while prioritizing the preservation of principal and liquidity via investments in high quality U.S. dollar- denominated money market and fixed income securities of domestic and foreign issuers, U.S. Government securities, and repurchase agreements.