From: Evelyn and Valmar Schaaf
Sent: August 10, 2006
Subject: File No. S7-03-04

SEC Chairman Christopher Cox

Dear SEC Chairman Cox,

From: Mr and Mrs Valmar A. Schaaf

We are retired persons, each 86 years old, living on social securtiy, returns on investments in Mutual Funds and some Bank CD's. As a typical middle class, middle income,family with two children to raise and educate, we were unable to save any significant amount of money for investments until after our children were grown and self supporting. As a result our savings were low and have been decreasing over time. It is dismaying to us to learn of the extravigant pay scales for Mutual fund CEO's.
Perhaps if action had been taken to reduce pay scales at that time we would be in a better position to meet the expenses of the last years of our lives than we are at this time. So that future investors will have better opportunities than we had, we urge you to act on the information submitted below.

Mutual funds are an increasingly important savings vehicle for tens of millions of working Americans like me. We are the owners of these funds and we bear the risks if they are dominated by self-interested insiders. We look to the Securities and Exchange Commission (SEC) to protect us. I am writing to express my strong support for the proposed rule requiring that mutual fund boards have an independent chairperson and at least 75 percent independent directors. These rules were among the most important reforms adopted by the SEC in the wake of the mutual fund trading and sales abuse scandals.

A recent study by AFSCME and The Corporate Library found mutual funds provide a rubber stamp for excessive management pay, supporting more than three-quarters of all management pay proposals. Ninety percent of institutional investors think the current system overpays executives. We need independent directors to stand up to the excesses of the money managers.

The Investment Company Act requires that mutual funds be managed in the interests of their shareholders. Requiring independent directors and chairpersons will help ensure this safeguard for the small investor, to make sure the little person gets a fair shake.


Evelyn & Valmar Schaaf