FHLBank San Francisco 2008 EXECUTIVE INCENTIVE PLAN

EXHIBIT 10.5

FHLBank San Francisco

2008 EXECUTIVE INCENTIVE PLAN

PLAN PURPOSE

To optimize individual and Bank performance in accomplishing Board approved goals and objectives.

PLAN OBJECTIVES

To motivate Bank executives to exceed individual and Bank goals which support the business plan and long-term strategic plan. To attract and retain outstanding executives by providing a competitive total compensation program, including annual incentive award opportunity.

ELIGIBILITY

Participants are Bank executives whose performance has a major impact on the Bank’s success. The 2008 participants are the incumbents in the Bank’s executive officer positions, including:

Executive Vice President                         Senior Vice President

Participants must be employed by the Bank when payment is disbursed to be eligible for an incentive award for the current plan year. Participants hired, promoted, or who have a leave of absence during the plan year are eligible to participate on a pro-rata basis. Participants hired or promoted on or after October 1^st will not be eligible to participate during the current plan year.

INCENTIVE GOALS AND MEASURES

Incentive Goals

For each participant there are individual goals, discretionary goals and Bank goals, which are specifically weighted for each participant. The individual goals support the Bank-wide goals and objectives. The discretionary goals represent achievements that were not necessarily measured or identified under the participant’s individual goals and assessed by the President and Chief Operating Officer for the Senior Vice Presidents, and by the President for the Chief Operating Officer.

The three Bank goals’ target achievement levels for 2008 are:

An outline of the three Bank goal weights and measures are attached as an exhibit.

Incentive Goal Achievement Measures

The plan rewards levels of goal achievement, as follows:

Award Determination

Awards will be based on success in achieving individual and Bank goals. In the case of the three Bank goals and objectives, the same achievement measures apply to all participants. At yearend, accomplishments will be assessed and a percentage of achievement will be determined for each goal and any award determination will be at the discretion of the Board.

For each goal, the percentage of achievement will be multiplied by the applicable weights. Each weighted achievement will then be added to determine the total weighted achievement. The basis for award opportunity is total weighted achievement. Performance from 75-99% (threshold level) is below the target achievement level and, therefore, will result in an award less than a target award. Performance below the threshold achievement level normally will not result in an incentive award. The President and the Board of Directors have full discretion to modify any and all incentive payments.

Incentive Award Pool

The Board approves an incentive award pool at the beginning of the plan period. Portions of the pool may be allocated by the President to plan participants at the end of the plan period based upon their overall goal achievement levels.

APPROVAL OF INCENTIVE AWARDS

All recommended incentive awards must be approved by the President and the Board of Directors prior to payment. The Board of Directors has the discretion to approve awards for achievement below 75% total weighted achievement. Award recommendations are presented to the Board of Directors at the January 2009 Board meeting.

PLAN ADMINISTRATION AND IMPLEMENTATION

The President is responsible for overseeing the administration and interpretation of the Plan.

FEDERAL HOME LOAN BANK OF SAN FRANCISCO

2008 Corporate Goals

Dividend Spread Goal for 2008

Market Penetration, Volume and Conversion Goals for 2008

Community Investment Goals for 2008

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