WHY CHOOSE TIAA-CREF?

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1 WHY CHOOSE TIAA-CREF? Investing to achieve your personal financial goals often presents substantial challenges. At TIAA-CREF, we have always believed that well-thought-out retirement planning can minimize many of those challenges. That s one of the most important reasons we re the retirement system of choice for more than three million of your colleagues in the academic, medical, cultural and research fields. TIAA S FINANCIAL STRENGTH For its stability, claimspaying ability and overall financial strength, TIAA currently holds top ratings from all four leading insurance company ratings agencies: A++, A.M. Best Company (as of 12/09); AAA, Fitch Ratings (as of 6/09); Aaa, Moody s Investors Service (as of 10/09); AAA, Standard & Poor s (as of 12/09). These ratings do not apply to variable annuities, mutual funds, or any other product or service not fully backed by TIAA s/tiaa-cref Life s claims-paying ability. Ratings are subject to change. There is no guarantee that current ratings will be maintained. INTEGRITY TIAA-CREF is a recognized leader in corporate governance and a strong supporter of reform in the financial services industry. We believe that sound governance should strengthen corporate integrity and at the same time provide an active and reliable line of defense against abuses of authority. EXPERIENCE Since 1918, we have helped thousands of people in the education, healthcare, cultural and research fields save for retirement. Today, more than 3.6 million people at over 15,000 institutions trust TIAA-CREF to help them invest for their futures (as of 12/31/2009). LOW COSTS With our nonprofit heritage, TIAA-CREF is committed to keeping costs low, which is why our expenses are among the lowest in the variable annuities and mutual funds industries. 1 This can help put more of your money toward your retirement. However, lower expenses do not mean higher returns. RETIREMENT CHOICES THAT MATCH YOUR GOALS You can diversify your contributions among a number of annuity accounts and/or mutual funds within a variety of asset classes. There is no absolute guarantee that diversification will protect against loss. OBJECTIVE GUIDANCE We understand the complexities of creating a comprehensive investment strategy, which is the reason our professional TIAA-CREF consultants provide answers that are in your best interest. They understand how your retirement plan works and will help you make informed decisions every step of the way from the beginning of your career through your retirement years. AUTOMATIC PORTFOLIO REBALANCING You can have your TIAA-CREF portfolio annually rebalanced according to its target allocation to ensure your investment strategy remains on track. Rebalancing does not protect against loss or guarantee that an investor s goals or objectives will be met. PERSONALIZED HELP Because we want to help you meet your special retirement planning needs, a professional TIAA-CREF consultant is available regularly at The University of Alaska to meet with you and conduct retirement planning sessions tailored to your situation. To check availability, please call us at , x 0. For questions on your account or assistance by phone please contact The expense ratio on all mutual fund products and Variable Annuity Accounts managed by TIAA-CREF are generally less than half the mutual fund industry average. Source: Morningstar Direct (December 2009), based on Morningstar expense comparisons by category.

2 TIAA-CREF RETIREMENT INVESTMENT CHOICES For full descriptions of all these investment choices, please read the following pages or visit tiaa-cref.org. GENERAL RISK BY ASSET CLASS LOWER RISK HIGHER GUARANTEED MONEY MARKET FIXED INCOME REAL ESTATE EQUITIES RETIREMENT ACCOUNTS ASSET CLASS TYPE ACCOUNTS (ACCOUNT NUMBER) EQUITIES VARIABLE ANNUITY ACCOUNTS CREF Stock Account (002) CREF Global Equities Account (006) CREF Growth Account (007) CREF Equity Index Account (008) REAL ESTATE VARIABLE ANNUITY ACCOUNT TIAA Real Estate Account (009) FIXED INCOME VARIABLE ANNUITY ACCOUNTS CREF Bond Account (005) CREF Inflation-Linked Bond Account (010) MONEY MARKET VARIABLE ANNUITY ACCOUNT CREF Money Account (003)* GUARANTEED** GUARANTEED ANNUITY ACCOUNT TIAA Traditional Account (001) MULTI-ASSET VARIABLE ANNUITY ACCOUNT CREF Social Choice Account (004) * An investment in the CREF Money Account is not a deposit of any bank and is neither insured nor guaranteed by the Federal Deposit Insurance Corporation or any other U.S. government agency. ** Subject to TIAA s claims-paying ability. DEFINITIONS A guaranteed annuity is backed by an insurance company s claims-paying ability, and guarantees principal and a specified minimum interest rate. It may also offer the opportunity for additional amounts in excess of the guaranteed rate. A variable annuity is a contract that provides future payments, usually at retirement. Future payments depend on the performance of the portfolio s securities. Annuity account options are available through contracts issued by TIAA or CREF. These contracts are designed for retirement or other long-term goals, and offer a variety of income options, including lifetime income. Payments from the variable annuity accounts are not guaranteed and will rise or fall based on investment performance. Mutual funds do not offer the range of income options available through annuities.

3 INVESTOR QUESTIONNAIRE This worksheet will help you identify how much risk you may be comfortable assuming. Based on your answers, you will be directed to one of the model portfolios that can serve as a starting point for developing your own allocation mix. Just answer each of the six questions below by checking the answer that best represents your opinion. Add up the number of points to determine your score. Your total score will indicate your risk profile as shown following the last page of the worksheet. 1 Inflation, the rise in prices over time, can erode your investment return. Long-term investors should be aware that, if portfolio returns are less than the inflation rate, their ability to purchase goods and services in the future might actually decline. However, portfolios with long-term returns that significantly exceed inflation are associated with a higher degree of risk. Which of the following portfolios is most consistent with your investment philosophy? A. Portfolio 1 will most likely exceed long-term inflation by a significant margin and has a high degree of risk. 18 pts. B. Portfolio 2 will most likely exceed long-term inflation by a moderate margin and has a high to moderate degree of risk. 12 pts. C. Portfolio 3 will most likely exceed long-term inflation by a small margin and has a moderate degree of risk. 6 pts. D. Portfolio 4 will most likely match long-term inflation and has a low degree of risk. 0 pts. 2 Portfolios with the highest average returns also tend to have the highest chance of short-term losses. The table below provides the average dollar return of four hypothetical investments of $100,000 and the possibility of losing money (ending value of less than $100,000) over a one-year holding period. Probabilities After 1 Year Possible Average Value Chance of Losing Money at the End of One Year at the End of One Year Portfolio A $106,000 16% Portfolio B $107,000 21% Portfolio C $108,000 25% Portfolio D $109,000 28% Please select the portfolio with which you are most comfortable. A. Portfolio A 0 pts. B. Portfolio B 8 pts. C. Portfolio C 12 pts. D. Portfolio D 18 pts. 3 Investing involves a trade-off between risk and return. Historically, investors who have received high long-term average returns have experienced greater fluctuations in the value of their portfolio and more frequent short-term losses than have investors in more conservative investments. Considering that, which statement best describes your investment goals? A. Protect the value of my account. In order to minimize the chance for loss, I am willing to accept the lower long-term returns provided by conservative investments. 0 pts. B. Keep risk to a minimum while trying to achieve slightly higher returns than the returns provided by investments that are more conservative. 5 pts. C. Balance moderate levels of risk with moderate levels of returns. 10 pts. D. Maximize long-term investment returns. I am willing to accept large and sometimes dramatic fluctuations in the value of my investments. 15 pts.

4 4 Historically, markets have experienced downturns, both short-term and prolonged, followed by market recoveries. Suppose you owned a well-diversified portfolio that fell by 20% (i.e., $1,000 initial investment would now be worth $800) over a short period, consistent with the overall market. Assuming you still have 10 years until you begin withdrawals, how would you react? A. I would not change my portfolio. 15 pts. B. I would wait at least one year before changing to options that are more conservative. 10 pts. C. I would wait at least three months before changing to options that are more conservative. 5 pts. D. I would immediately change to options that are more conservative. 0 pts. 5 The following graph shows the hypothetical results of four sample portfolios over a one-year holding period. The best potential and worst potential gains and losses are presented. Note that the portfolio with the best potential gain also has the largest potential loss. Which of these portfolios would you prefer to hold? A. Portfolio A 19 pts. B. Portfolio B 12 pts. C. Portfolio C 7 pts. D. Portfolio D 0 pts. 50% 40% 45% 30% 34% RETURN (%) 20% 10% 0% 26% 15% 10% 20% 30% 26% 20% 15% 7% PORTFOLIO A PORTFOLIO B PORTFOLIO C PORTFOLIO D 6 I am comfortable with investments that may frequently experience large declines in value if there is a potential for higher returns. A. Agree 15 pts. B. Disagree 8 pts. C. Strongly disagree 0 pts. TOTAL SCORE IF YOU SCORED 0 19 pts. Conservative. You probably want greater stability and a lower level of risk. Take a look at the Conservative portfolio pts. Moderately Conservative. You re probably looking to strike a balance between safety and growth, but are still very concerned with preserving your existing accumulation. Look at the Moderately Conservative portfolio pts. Moderate Portfolio. You re probably looking to strike a balance between safety and growth. Look at the Moderate portfolio pts. Moderately Aggressive. You re probably willing to take somewhat more risk to achieve greater growth potential. Look at the Moderately Aggressive portfolio pts. Aggressive. You re probably comfortable with a higher level of risk. Look at the Aggressive portfolio. Used with permission Ibbotson Associates, Inc. All rights reserved.

5 MODEL PORTFOLIOS It all depends on how you feel about risk. The descriptions below provide a sample of common investment portfolios. To determine the right mix for you, get in touch with a TIAA-CREF consultant. CONSERVATIVE Downturns make me very nervous. I ll accept lower long-term growth in exchange for rock solid stability. 40% Fixed Income 27% Guaranteed 13% Equities 13% Cash/Money 7% Real Estate MODERATELY CONSERVATIVE I can tolerate some volatility in a small portion of my investments for the chances of a higher return longer term. 29% Fixed Income 22% Guaranteed 33% Equities 9% Cash/Money 7% Real Estate MODERATE I want an equal balance of risk and return, not tilted toward either stability or growth. 20% Fixed Income 15% Guaranteed 53% Equities 5% Cash/Money 7% Real Estate MODERATELY AGGRESSIVE I m willing to accept greater volatility and risk by tilting my investments toward growth. 13% Fixed Income 7% Guaranteed 71% Equities 0% Cash/Money 9% Real Estate AGGRESSIVE I can stomach a big drop in my investments value even over several years in pursuit of long-term growth. 0% Fixed Income 5% Guaranteed 85% Equities 0% Cash/Money 10% Real Estate The model portfolios presented here were not created specifically for you and may not take into account your particular retirement goals or investment preferences. The ultimate allocation decision is up to you after you have considered investment information that pertains to your own personal circumstances. The specific asset allocations generated by Ibbotson and shown in these portfolios are based on well-known optimization techniques, using historical return, volatility and correlation data from indexes like the Russell Keep in mind, this optimization procedure is based on assumptions about historical market data, and future market conditions may vary from these assumptions. Used with permission Ibbotson Associates, Inc. All rights reserved.

6 HOW TO ENROLL ONLINE You re just a few clicks away from enrolling with TIAA-CREF under the University of Alaska retirement plans. TO ENROLL ONLINE STEP 1 Log on to: STEP 2 Choose the plan you wish to enroll in and follow the instructions. Before you make any investment decisions, it s important to determine your risk tolerance. To help you with this, we have educational materials, calculators and portfolio models on our website that can assist you with your asset allocation at tiaa-cref.org. A prospectus containing more information regarding the variable annuity accounts and mutual funds is also available on the website and should be reviewed carefully before you allocate funds or make any changes. STEP 3 If you re enrolling/changing your fund sponsor under the Pension Plan or ORP, be sure to also complete the Pension/ORP Fund Sponsor Enrollment or Change Form. If you re enrolling/changing your fund sponsor in the Tax-Deferred Annuity (TDA) plan, please complete the TDA Salary Reduction Agreement form. Both forms are available from your regional human resources office or through ONLINE ENROLLMENT ACCESS CODES All employees except adjunct, temporary and student employees: AKP462 Adjunct, temporary and student employees: AK2317 FOR HELP For assistance with this process, please call TIAA-CREF at , weekdays from 8 a.m. to 10 p.m. (ET), or Saturdays from 9 a.m. to 6 p.m. (ET). We will guide you through the entire online enrollment process. As soon as you ve completed the online enrollment, you ll receive a verification message. Remember that saving for retirement is a long-term commitment. Withdrawals of earnings prior to age are subject to ordinary income tax and a federal 10% penalty may apply. Investing in securities involves market risks. Past performance is not a guarantee of future results. Investment return and principal value will fluctuate so an investor s share, when redeemed, will be worth more or less than the original cost. If you have a Retirement Annuity (RA) contract, the TIAA annuity contract does not allow lump-sum cash withdrawals from the TIAA Traditional Annuity and transfers must be spread out in 10 payments over a nine-year period. If you have a Group Retirement Annuity (GRA) contract, lump-sum withdrawals are available from the TIAA Traditional Annuity only within 120 days after termination of employment and are subject to a surrender charge. All other withdrawals and all transfers to the TIAA Real Estate Account or to CREF must be spread out in 10 payments over a nine-year period (five years for withdrawals after termination of employment for a GRA). You should consider the investment objectives, risks, charges and expenses carefully before investing. Please call or visit tiaa-cref.org for a prospectus that contains this and other information. Please read the prospectus carefully before investing. TIAA-CREF Individual & Institutional Services, LLC and Teachers Personal Investors Services, Inc., members FINRA, distribute securities products. Annuity contracts and certificates are issued by Teachers Insurance and Annuity Association (TIAA) and College Retirement Equities Fund (CREF), New York, NY. Investment products are not FDIC insured, may lose value and are not bank guaranteed. Retirement Annuity (RA) TIAA Contract form series /CREF Certificate series C STD.1; Group Retirement Annuity (GRA) contract form series G or G ; G or G (not available in all states)/cref Certificate series CG ; Supplemental Retirement Annuity (SRA) TIAA Contract form series /CREF Certificate series ; Group Supplemental Retirement Annuity (GSRA) TIAA Contract form series G (GSRAs are not available in all states)/cref Certificate series CG Teachers Insurance and Annuity Association-College Retirement Equities Fund (TIAA-CREF), New York, NY C AYS (03/10)