B-1 STATEMENT OF ADDITIONAL INFORMATION Dated May 1 ...

interest income payable on those obligations, that foreign deposits may be seized or nationalized, thatforeign governmental restrictions such as exchange controls may be adopted which might adversely affectthe payment of principal and interest on those obligations and that the selection of those obligations maybe more difficult because there may be less publicly available information concerning foreign banks orthe accounting, auditing and financial reporting standards, practices and requirements applicable toforeign banks may differ from those applicable to U.S. banks. Foreign banks are not generally subject toexamination by a U.S. Government agency or instrumentality.MANAGEMENT OF THE FUNDGeneralThe Board of Directors of the Fund is responsible for setting and overseeing the investmentobjectives and policies of the Fund, but delegates daily management of the Fund to the Adviser, theSub-Advisers where applicable and the officers of the Fund. Information about the Directors and Officersof the Fund, together with a brief description of their principal occupations during the past five years, theyear they were first elected or appointed to their position with the Fund and certain other information isset forth in Appendix B.An Audit Committee, a Nominating Committee and an Investment Oversight Committee have beenestablished for the Fund. The purpose of the Audit Committee is to act for the Board in overseeing theintegrity of the Fund’s financial statements. To perform this function, the Audit Committee has directaccess to the Fund Officers and internal auditors, as well as the independent accountants. In addition, theAudit Committee may meet with other members of management and employees when, in its judgment,such meetings are warranted. The Nominating Committee is authorized to select and nominate thoseDirectors of the Fund who are not “interested persons” of the Fund (as that term is defined in section2(a)(19) of the Investment Company Act of 1940). While the Nominating Committee is solely responsiblefor the selection and nomination of potential candidates to serve on the Board, the Nominating Committeemay consider and evaluate nominations submitted by shareholders of the Fund. The Investment OversightCommittee oversees the relationship of the Fund with the Adviser and the Sub-Advisers by overseeing theadvisory and sub-advisory contract review process and helping to ensure that the best interests of theFund and its shareholders are served by the terms of each such contract. As of December 31, 2008, theAudit, Nominating and Investment Oversight Committees were comprised of Ms. Allison and Messrs.Huffman, Knetter, McIntosh and Smith, each of whom is not an “interested person” of the Fund withinthe meaning of the Investment Company Act. The Audit Committee normally meets as scheduled inconjunction with Board meetings four times a year. Four meetings of the Audit Committee were held inthe fiscal year ended December 31, 2008. The Nominating Committee meets when necessary to considerthe nomination of new Directors. No meetings of the Nominating Committee were held in the fiscal yearended December 31, 2008. The Investment Oversight Committee meets in conjunction with each regularBoard meeting at which the approval or renewal of an investment advisory or sub-advisory contract isbeing considered. Four meetings of the Investment Oversight Committee were held in the fiscal yearended December 31, 2008.Codes of EthicsThe Fund, Mason Street Advisors, LLC and Northwestern Mutual Investment Services, LLC, aswell as each of the Sub-Advisers to the Portfolios, have adopted codes of ethics under Rule 17j-1 underthe 1940 Act. These codes permit personnel subject to the codes to invest in securities, includingsecurities that may be purchased or held by the Fund.Approval of the Investment Advisory AgreementsOn an annual basis, the Directors of the Fund request and evaluate information that they and theFund’s investment adviser determine to reasonably be necessary for the Directors to evaluate the terms ofthe Investment Advisory Agreements between the Fund and its investment adviser, Mason StreetB-47