Filed within this Form 10-K

The Federal Home Loan Bank of Boston (i.e., the "Bank") has an established incentive compensation plan for the Chief Audit Officer (CAO). This Plan is intended to compensate the CAO in a manner that recognizes the importance of individual performance through metrics linked to his principal functions.

The Audit Committee of the Bank’s Board of Directors (Audit Committee) will determine participation in the Plan.

Criteria for determining whether an award will be payable to the CAO are based upon the goals outlined in Appendix A. The Audit Committee is responsible for setting goals, measuring their achievement, and determining the incentive payment.

Each goal will operate independently of the others. Incentive Opportunity

The CAO will be assigned an incentive award opportunity that is expressed as a percentage of the incumbent’s base salary at year-end 2022, as illustrated in the chart below.

Federal Home Loan Bank of Boston

Chief Audit Officer Incentive Compensation Plan

Goal achievement and individual awards for the goals as outlined in Appendix A will be calculated at the conclusion of 2022 based on results as of December 31, 2022. The CAO will be eligible to receive fifty (50) percent of such award in a cash payment, subject to the final approval of the Audit Committee, and if required, the review of the Federal Housing Finance Agency (FHFA), between March 1 and March 15, 2023. Except as otherwise described under CAO ICP Administration, the CAO must be employed by the Bank on the date of payment of the award to receive the award.

The CAO will be eligible to receive the remaining fifty (50) percent of the award (Deferred Award) as cash between March 1 and March 15, 2025.

Award will be determined at the conclusion of 2024.

Based on input from Bank management and the Audit Committee, the Audit Committee will provide the factor to calculate the final payout of the deferred portion of the incentive compensation payment. The input considered may include an interest rate-based factor, CAO performance for the two-year period and the overall performance of the Bank.

In addition, the following conditions must be satisfied for participants to receive the deferred award opportunity:

•The participant is in employment with the Bank on the payment date, as described below in CAO ICP Administration, and

•Subject to the discretion of the Audit Committee in conference with the Board, the deferred award calculated above may be reduced, (but not to a number that is less than zero) for participant, as applicable, if, during calendar years 2023 and/or 2024, any of the following occur such that if it had occurred prior to the year-end 2022 calculations, it would have negatively impacted the goal results and reduced the associated payout calculation:

i.operational errors or omissions resulting in material revisions to (A) the 2022 financial results, (B) information submitted to FHFA supporting the goal results or payout calculation, or (C) other data used to determine the combined award at year-end 2022;

ii.submission of significant information to the SEC, Office of Finance and/or FHFA materially beyond any deadline or applicable grace period, other than late submissions that are caused by acts of God or other events beyond the reasonable control of the participants, or

iii.failure by the Bank to make sufficient progress, as determined by the FHFA, in the timely remediation of examination and other supervisory findings relevant to the goal results or payout calculation.

•All deferred award payouts shall be subject to the final approval of the Audit Committee and review and non-objection by the FHFA (to the extent required by FHFA).

Federal Home Loan Bank of Boston

Chief Audit Officer Incentive Compensation Plan

The CAO ICP is administered by the Audit Committee of the Board of Directors which shall have full power and binding authority to construe, interpret, and administer the CAO ICP, and to adjust it for extraordinary circumstances.

Extraordinary circumstances may include changes in Bank business, Bank strategy, Internal Audit strategy, Internal Audit department structure, termination or commencement of business lines, impact of severe economic fluctuations, significant growth or consolidation of the membership base, or significant regulatory or other changes impacting the Internal Audit Department, Bank or Bank System.

CAO ICP awards shall not be considered earned or payable, in whole or in part, to any participant for any reason until they are finally determined by the Audit Committee following the end of the plan years and following the non-objection of the FHFA (to the extent required by the FHFA).

Participants must receive a performance rating of “Meets Expectations” or better for 2022 in order to be eligible to receive an IAICP payout.

Any individual hired or promoted into an eligible position during 2022 that is granted an award shall have any such incentive award prorated based on actual base salary paid during the plan year, providing he/she has served a minimum of three months in that role in 2022 and otherwise satisfies the CAO ICP’s requirements.

If an individual becomes a participant of the CAO ICP during the plan year, e.g. due to a job change or promotion, then any CAO ICP award will be prorated based on months in the CAO ICP, provided he/she serves a minimum of three months in the CAO ICP and otherwise satisfies the plan's requirements.

Except as described below, any CAO ICP participant who terminates employment for any reason, whether voluntarily or involuntarily, before the applicable award payment date will not be entitled to any award, except as otherwise determined by the Audit Committee, at their sole discretion and subject to review of the FHFA, if required1.

1Where the CAO ICP refers to the participant's termination of employment for purposes of receiving any payment, whether such a termination has occurred will be determined in accordance with Section 409A of the Internal Revenue Code and applicable regulations thereunder.

Federal Home Loan Bank of Boston

Chief Audit Officer Incentive Compensation Plan

•CAO ICP participants who terminate employment with the Bank by reason of death or disability or who are eligible to retire2 from employment with the Bank prior to the March 2023 short-term award payment date may receive a pro rata payment of the fifty-(50) percent short-term incentive opportunity as determined by the Audit Committee and at their sole discretion and subject to the review of the FHFA, if required, based on the months of completed service as an CAO ICP participant during 2022. To be eligible, the participant must complete at least six months of service in 2022 and otherwise satisfy the CAO ICP’s requirements. Participants who die, become disabled, or retire during 2022 will not be eligible for any deferred incentive award.

•CAO ICP participants who terminate employment with the Bank by reason of death or disability prior to the deferred award payment date in March 2025, or who terminate prior to the deferred award payment date and are eligible to retire from employment with the Bank, may become eligible to receive payment of the fifty (50) percent deferred incentive opportunity, subject to the granting of awards based on 2024 year-end results described above, with the approval of the Audit Committee and at their sole discretion, and subject to the review of the FHFA, if required.

Awards to retiring or disabled participants or beneficiaries will be paid at the same time as awards to all active participants. Beneficiary means the participant’s (i) surviving spouse; or (ii) duly appointed and qualified executor or personal representative or estate. The Administrator may permit participants to designate other persons as beneficiaries, but no designation of a beneficiary shall be effective unless made in accordance with the procedure specified by the Administrator and actually received by the Administrator prior to the participant’s death.

The Bank may make such provisions, as it deems appropriate, for withholding payroll taxes in connection with payment of CAO ICP awards.

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Federal Home Loan Bank of Boston

Chief Audit Officer Incentive Compensation Plan

This metric is to ensure that the 2022 Internal Audit Plan (Plan) is completed as approved by the Audit Committee (AC). The Chief Audit Officer (CAO) shall furnish the Committee with periodic reports on the status of the Plan. The reports will indicate which audits and other activities have been completed, are in process, and those set to begin. The Audit Committee reserves the right to replace audits/activities for anticipated Audits, Information System implementations, and other Bank initiatives that are not implemented by Bank management as anticipated. In addition, the Committee reserves the right to amend/modify the Plan during the year as deemed necessary.

Threshold: Complete the planning, fieldwork, and draft of audit issues1 of 14 of the 16 Extreme, Significant, Moderate-Risk and SOX Business and IT Interim audit projects in the 2022 Audit Plan by December 31, 2022 that are scheduled for issuance in 2022. Completion of the remaining 2022 Internal Audit Plan audit projects, as amended, is to be completed in Q1-2023. Changes to the Audit plan will be presented to and discussed with the Audit Committee at the end of the year to determine achievement of this measure.

Federal Home Loan Bank of Boston

Chief Audit Officer Incentive Compensation Plan

1 Complete planning, fieldwork, and draft of audit issues represents that IA has completed its audit work and the only efforts remaining are to coordinate with management to finalize audit findings, management action plans and the audit report.

Target: Audit reports (excluding implementation audits) issued in 2022 from the approved 2022 and 2021 Audit Plans are within +8% of the total budgeted hours as amended. Changes to budgeted hours will be based on changes in expected audit scope if identified during audit planning and on unforeseen circumstances. Budget changes will be presented by the CAO and approved by the Audit Committee

Target plus:

•Eighty-five percent of individual audit projects from the 2022 and 2021 audit plans (excluding implementation audits) issued during 2022 are within +8 percent of amended budgeted hours on an individual audit by audit basis. (e.g., if 25 of the 29 audits are within 8 percent of budget) and,

•A measure of value-added services provided to the Bank that could be in the form of ad-hoc advice upon request, input on processes/controls upon request (not within an audit/review, e.g., advice on how to address exam items), guidance in addressing exam findings, providing information to business that will benefit business processes.

Confirm that the Audit Committee can certify to the Board of Directors at the end of the fiscal year that it has fulfilled its responsibilities as outlined in its Charter, met the requirements of applicable FHFA regulations (Sect. 1232), those required by the Sarbanes-Oxley Act, and the expectations of Advisory Bulletins 2020-04, Financial Reporting and Disclosure and External Audit and AB 2016-05, Internal Audit Governance and Function.

•Update the charters of the Audit Committee, the Chief Auditor Officer, and the Internal Audit Department to reflect any new requirements to ensure that the charters comply with regulatory requirements and include best practices.

•Provide periodic updates on how the Audit Committee is meeting its responsibilities.

•Certify to the Audit Committee that it complies with all applicable requirements. Ensure that the Audit Committee complies with all FHFA regulations and the best

Federal Home Loan Bank of Boston

Chief Audit Officer Incentive Compensation Plan

Assist the Audit Committee in the evaluation of the external auditor.

•Threshold plus: Conduct an appraisal of Audit Committee effectiveness by means of a self-assessment guide that measures key principles and practices. The survey will be completed in the fall (Oct/Nov) to measure progress in achieving committee effectiveness.

•Coordinate and present orientation materials that provide an overview of the Audit Committee responsibilities for new members of the Board of Directors and the Audit Committee. Coordinate and provide ongoing education opportunities for committee members.

Excess: Not Applicable to this goal.

Ensure timely IA review that the [^^^] 2021 FHFA examination findings and 2020 examination finding [^^^] have been remediated. As information is provided to IA from Bank management, the receipt of information will be logged, an internal audit staff member will review the materials, and an email will be sent acknowledging the receipt of the materials within 10 business days.

Testing to document remediation will be completed and the results communicated to Bank management within 30 business days of the receipt of the final documentation. Should additional information be required before testing can be completed, IA will communicate such to Bank management. This measurement will not consider the timing of sustainability testing that may be scheduled to occur after the target date. (i.e. after enough time has elapsed to test a sample of required activities, e.g., month-end reconciliations, Committee/board meetings, etc.)

Threshold: Adherence to the timelines for [^^^] examination findings for Internal Audit to review and determine if/that the remediation plans have been completed and no repeat FHFA examination comments based on insufficient Internal Audit testing of management remediation efforts. (Repeat findings are determined by the results of the FHFA review of findings remediation as noted in the 2022 ROE)

Target: Adherence to the timelines for [^^^] examination findings for Internal Audit to review and determine if/that the remediation plans have been completed and [^^^] repeat FHFA examination comments based on insufficient Internal Audit testing of management remediation efforts.

Federal Home Loan Bank of Boston

Chief Audit Officer Incentive Compensation Plan

Excess: Target plus completion of remediation testing and results communication to Bank Management within 15 business days of receipt of the final documentation from Bank Management. Full excess will be reached if [^^^] examination findings are remediated and communicated to Bank Management within 15 business days of receipt of the final documentation from Bank Management. A pro-rated portion award between Target and Excess will be awarded for the percentage of the findings meeting this measure (e.g., if remediation and communication occurs within 15 business days for [^^^] of the [^^^] examination findings remediation plans, then the award will be Target plus 71% of the Excess award).

Note: If significant changes to the timing of remediation action completion dates are implemented, the CAO will inform the Committee for consideration of either measuring or modifying this goal. This measure does not include findings with IA as responsible party, if any.

Effective communication and dialogue between the Chief Audit Officer (CAO), the Chief Executive Officer, and senior management.

The Audit Committee will monitor this metric during the year at regularly scheduled quarterly meeting and at year-end through discussions with the CAO, CEO, and senior management.

Using a questionnaire, the CAO will solicit feedback from Bank staff on their interaction with the CAO and Internal Audit staff on areas such as communication, administration, and partnering activities that occurred from December 2021 and during the 2022. The survey results will be anonymous and reported independently by HR to the Chair of the Audit Committee.

The Audit Committee is responsible for the measurement of this metric and will take into consideration interaction between the CAO, Internal Audit staff and Bank management for this goal.

Threshold: Annual Questionnaire results indicate neutral (“2.5 – 2.2”) overall results and confirmation from management that communications with the CAO have been two or less times a year. (Score results are on a 5-point scale, 1 is the highest rating and 5 is the lowest rating.)

Federal Home Loan Bank of Boston

Chief Audit Officer Incentive Compensation Plan

Excess: Annual Questionnaire results indicate excellent (“>1.60”) overall results and confirmation from management that communications with the CAO have been more frequent than three times a year and include dialogue is collaborative to improve the audit process and interaction (e.g., work to improve SOX process/controls, collaborate with ERM on approach to viewing risk, coordinate with Management to discuss systems implementations, improve SOAF reporting, etc.).

To increase IT and budget efficiency.

Threshold: By November 30, 2022, document and provide to the Internal Audit team and Bank Technology a checklist of control considerations to technology projects.

Target: By September 30, 2022, document and provide to the Internal Audit team and Bank Technology a checklist of control considerations to technology projects

Excess: By July 31, 2022, document and provide to the Internal Audit team and Bank Technology a checklist of control considerations to technology projects.

To improve IA process documentation and risk assessment.

Threshold: By July 31, 2022, research adjustments to the risk assessment methodology for measuring the control environment scoring and run scenario analyses for a sample of audit entities. Based on the results of the analyses, develop recommendations for modifying the risk assessment methodology.

Target: By September 30, 2022, Threshold plus conduct scenario analyses detailing the impact to all Bank Technology and General audit project residual risk ratings and present the results of the analyses with a recommendation on updating the risk assessment methodology and scoring to the Audit Committee, including a preliminary summary of the impact to the audit universe residual risk ratings.

Excess: By December 31, 2022, Target plus present to the Audit Committee the 2023 Internal Audit Plan based on implementation of the updated risk assessment methodology. Include heat maps of both inherent and residual risk scoring for the internal audit entity universe.

Continue to modernize IA electronic records management and presentation.

Federal Home Loan Bank of Boston

Chief Audit Officer Incentive Compensation Plan

Threshold: By September 30, 2022, assess the current data analytics capabilities both within IA and across the Bank and produce a summary of the evaluation.

Target: By October 31, 2022, Threshold plus develop a data analytics strategy document outlining the goals and objectives of the data analytics program and how Internal Audit plans to use and incorporate data analytics into the audit life cycle.

Excess: By December 8, 2022, Target plus present a data analytics roadmap to the Audit Committee, containing the milestones that identify the key stages and deliverables (e.g., plan to apply in a sample of audits) of the data analytics program.

To meet FHFA and professional certification expectations for continuing education and skills development.

Threshold: Internal Audit professional staff obtain on average 40 hours or applicable professional training support of professional certifications and building audit and/or Bank-specific skills and/or knowledge.

Target: Threshold plus identify skills the team needs and work with IA team members to include those skills in the IA team member training plans.

A)Areas could include data analytics, data visualization, Cyber/AWS, etc. engage third-party resources to work with Internal Audit staff to help build subject matter knowledge and experience with Internal Audit staff (e.g., engage third party resources to provide expertise in key areas such as IT, IS, Treasury, Risk Management).

B)Consider engaging third-party resources to i. Work with IA staff to build subject matter knowledge and/or ii. develop and deliver Bank specific training for the IA team to further staff skills and improve on the effectiveness of the related audits.

Excess: Target, plus attainment of four audit related professional certifications (e.g., CIA, CIDA, Certificate in Financial Services Audit, CISA, etc.).

Federal Home Loan Bank of Boston

Chief Audit Officer Incentive Compensation Plan

Enhance stature among the FHLB system CAE group. (5%)

Meet Expectation: Organize the 2021 PwC evaluation for the FHLB System and present results to the AC and ACCG.

Exceed Expectation: Organize/manage a training session for the ACCG meetings in May or October.

Engage staff to take on larger roles and more responsibility for managing internal audits and business unit relationships. Including: providing more opportunities to make audit scoping decisions, decisions on audit issues, managing audit opening and closing meetings; taking leading roles in projects; learning new areas of the Bank, etc.

Meet Expectation: Ensure key Internal Audit team members have a meaningful development plan in connection with the Bank Talent Review by June 30, 2022.

Exceed Expectation: Must complete “meets expectation” and coordinate to have IA managers (Cindy, Ron, and Steve) present to the Audit Committee two times during the year other than the presentation of the draft audit plan in December.

Establish topics for regular presentation by managers to the Audit Committee.