This is a summary of the annual report for the Insurance and Benefits Trust of PORAC E.I.N. 68-6068469 Plan No. 501 for the year ended December 31, 2004.  The annual report has been filed with the Internal Revenue Service, Employee Benefits Security Administration, and U.S. Department of Labor as required under the Employee Retirement Income Security Act of 1974 (ERISA).

 The plan has contracts with Standard Insurance Company to provide certain Life Insurance, Long-term Disability, Temporary Disability Benefits incurred under the terms of the plan.  The total premiums paid for the plan year ended December 31, 2004 was $1,791,028.

 Because they are so called “experience-rated” contracts, the premium costs are affected by, among other things, the number and size of claims.  Of the total insurance premiums paid for the plan year ended December 31, 2003, the premiums paid under such “experience-rated” contracts were $1,791,028 and the total of all benefit claims paid under these experience-rated contracts during the plan year was $627,163.

 The net assets of the Trust at the end of the year totaled $11,418,599 compared to $11,123,049 at the beginning of the year.  The value of plan assets, after subtracting liabilities of the plan, was $6,814,818 as of December 31, 2004, compared to $7,323,843 as of January 1, 2004.  During the plan year, the plan experienced an decrease in its net assets of $509,025.  This decrease includes unrealized appreciation or depreciation in the value of plan assets; that is, the difference between the value of the plan’s assets at the end of the year and the value of the assets at the beginning of the year, or the cost of assets acquired during the year.  During the plan year, the plan had total income of $5,073,916 including participant contributions of $3,274,339, realized gains of $983,490 from the sale of assets, earnings from investments of $310,014, and other income of $506,073.

 Plan expenses were $5,582,941.  These expenses included, $2,698,328 for Long-term disability benefits paid, $427,509 for Premiums paid for Long-term Disability Insurance, $ 215,371 for Premiums paid for Accidental Death, Group Life Insurance & AD&D, Administrative expenses of $382,933 for Myers-Stevens, $422,209 for Standard Insurance Company, $96,559 for PORAC expenses, $281,212 for Miscellaneous expenses and $384,000 for Death benefits paid. 

RIGHTS TO ADDITIONAL INFORMATION

 You have a right to receive a copy of the full annual report, or any part thereof, upon request.  The items listed below are included in that report.

1.             An Independent Auditors’ Report

2.            Financial information and information on payments

3.            Assets held for investment

4.            Transactions in excess of five percent of trust assets

5.           Insurance information, including sales commissions paid by 

              insurance carriers.

To obtain a copy of the full annual report, or any part thereof, write the office of the plan administrator, Insurance and Benefits Trust PORAC, 4010 Truxel Road, Sacramento, Ca 95834.  The telephone number is 916-928-3777.  The charge to cover copying costs will be $2.75 for the full annual report, or 25 cents per page for any part thereof.

 You also have the right to receive from the plan administrator, on request and at no charge, a statement of assets and liabilities of the plan and accompanying notes, or a statement of income and expenses of the plan and accompanying notes, or both.  If you request a copy of the full annual report from the plan administrator, these two statements and accompanying notes will be included as part of that report.  The charge to cover copying costs given above does not include a charge for the copying of these portions of the report because these portions are furnished without charge.

 You also have the legally protected right to examine the annual report at the office of Insurance and Benefits Trust of PORAC, 4010 Truxel Road, Sacramento, Ca  95834 and at the U.S. Department of Labor in Washington, D.C. or to obtain a copy from the U.S. Department of Labor upon payment of copying costs.  Requests to the Department should be addressed to:  Public Disclosure Room, N1513, Employee Benefits Security Administration, U.S. Department of Labor, 200 Constitution Avenue, N.W., Washington, D.C. 20210.