1. 1 North Carolina Supplemental Retirement Plans Performance Evaluation Report Second Quarter 2016

2. Total Plan Management Summary Asset Allocation Current Asset Allocation As of June 30, 2016 Current Tier Allocation As of June 30, 2016 Prior Period Asset Allocation As of March 31, 2016 Prior Period Tier Allocation As of March 31, 2016 Source: TIAA-CREF 2

3. Total Plan Asset Allocation Asset Allocation by Tier As of June 30, 2016 Source: TIAA-CREF 3

4. Total Plan Performance Summary (returns are reported net of fees and are annualized for time periods over a year) Source: Morningstar Direct 4

5. Total Plan Performance Summary 5 1 Morningstar Stable Value Universe unavailable for TIAA Stable Value Indicates fund currently on Watch List or Recommended for Removal Source: Morningstar Direct; TIAA

6. Total Plan Performance Summary 6 All performance data taken from Morningstar database except for TIAA Real Estate and TIAA Stable Value performance Fund benchmarks match those defined within fund prospectus documents unless otherwise footnoted **Benchmarks used for TIAA Stable Value, PIMCO Inflation Response Multi-Asset Fund, and PIMCO All Asset Fund Instl match those which were cited in Mercer's Q3 2015 report ***Fund universe categories are defined by the respective Morningstar Institutional Mutual Fund Universe (except for PIMCO Inflation Response Multi-Asset Fund for which the Inflation-Protected Bond universe was deemed a better fit) Source: Morningstar Direct; TIAA

7. Investment Expense Analysis Analysis reflects investment expenses only and does not include an evaluation of plan recordkeeping costs. Median Net Expense Ratios based off of Morningstar defined universes unless otherwise specified. 7 2 Does not include the 49 basis point administration fee applied to all funds (TIAA CREF Stable Value Fund, TIAA Real Estate Account, T. Rowe Price Growth & Income Fund, and AllianzGI NFJ International Value Funds have lower administrative fees) *Median institutional share class net expense ratio as defined by the respective Morningstar Institutional Mutual Fund Universe (passive mutual fund peer universes only include funds which are categorized as “Index Fund”) **Using TIAA Stable Value Net Exp. Ratio as proxy for Median Net Exp. Ratio since Morningstar Stable Value Universe is unavailable Source: Morningstar Direct

8. Total Plan Watch List Vanguard Windsor II Admiral Fund Since 2Q15 This fund was recommended to be placed on watch by Mercer in 3Q15 due to 4 consecutive quarters of underperformance as measured by trailing 3-year returns. The fund underperformed across all time periods for the quarter ending 6/30/16. This is a large cap core fund with a slight value bias. A slice of the fund (12%) is sub-advised by Hotchkis & Wiley (also a fund manager in the 401(k) and 457 plans). o Positive performance from consumer staples and IT was not enough to offset poor stock selection within energy and financials The fund’s largest subadvisor, Barrow, Hanley, Mewhinney and Strauss, lost James Barrow who stepped down effective 12/31/15. This subadvisor manages the lion’s share of fund assets with a 60% allocation. o Jeff Fahrenbruch and David Ganucheau were announced to succeed Barrow as co-managers. Although both have been at the firm since 2011 and utilize the same investment process, Morningstar has downgraded their rating from Silver to Bronze and will continue to monitor the performance of Barrow’s successors. 8 AllianzGI NFJ International Value Fund Since 3Q15 This fund has been recommended for removal from fund line-up by Mercer and received SRP Board approval to eliminate after exceeding 4 consecutive quarters of underperformance as measured by trailing 3-year returns. The fund continues to underperform across all time periods for the quarter ending 6/30/16.

9. Total Plan Watch List JPMorgan Core Bond Fund Since 1Q16 This fund has been recommended for removal from fund line-up by Mercer and received SRP Board approval to eliminate due to consistent organizational concerns related restructuring of Columbus office and departures of key team members. Staff is currently evaluating eligible replacement strategies. The fund outperformed for the quarter and 5-year trailing but underperformed on a 1 and 3 year basis for the period ending 6/30/16. 9