1. Improving Educators’ Retirement Outcomes in a Changing Economic Environment AACC Annual Convention April 23, 2012 John Hays, Managing Director TIAA-CREF Jonathan Lightman, Executive Director Faculty Association of California Community Colleges

2. 2For Institutional Investor Use Only. Not for Use With or Distribution to the Public. Welcome During the session, we invite the audience to discuss: What is our common objective? How does faculty retirement planning result in more efficient business operations? What are some issues you need to know? Where are the resources? How do we continue this conversation?

3. 3For Institutional Investor Use Only. Not for Use With or Distribution to the Public. Are Younger Faculty Members Engaging in Retirement Planning?

4. 4For Institutional Investor Use Only. Not for Use With or Distribution to the Public. 2012 Retirement Confidence Survey Just 14% are very confident they will have enough money to live comfortably in retirement (statistically equivalent to the low of 13 percent measured in 2011 and 2009).* 42% identify job uncertainty as the most pressing financial issue facing most Americans today.* Cutbacks to education extend this to public educators. Worker confidence about having enough money for medical and long-term care expenses in retirement remains well below confidence levels for basic expenses.* *Source: Employment Benefit Research Institute 2012 Retirement Confidence Survey

5. 5For Institutional Investor Use Only. Not for Use With or Distribution to the Public. Social Security, the only Defined Benefit plan for most in the private sector, is not available to educators in many states. Those already vested in Social Security may experience “offset” penalties. Genuine savings created through supplemental retirement plans, like 403(b) and 457.

6. 6For Institutional Investor Use Only. Not for Use With or Distribution to the Public. Traditional Structure Educators covered by package of benefits, i.e., health insurance, retirement pension plans, retiree health insurance. Covered by the Social Security and Medicare system A combination of benefits to help lead to a secure retirement for most educators

7. 7For Institutional Investor Use Only. Not for Use With or Distribution to the Public. Growing Importance of Supplemental 403(b) Plans Reduced federal and state budgets driving deep reductions in retirement budgets Potential reductions in Social Security benefits For many individuals, retiree healthcare is no longer guaranteed

8. 8For Institutional Investor Use Only. Not for Use With or Distribution to the Public. At the same-time, complexity continues to grow Differences in the regulatory environment varies across states There are single vendor plans, small multi-vendor, and large multi-vendor plans Some use competitive bidding while others allow “any willing provider.” This fragmented structure and variation in the cost of participating effects retirement accumulations Plan design and costs can vary both within and across states

9. 9For Institutional Investor Use Only. Not for Use With or Distribution to the Public. Continuing the conversation For more information, please contact: Jonathan Lightman, CAE Executive Director Faculty Association of California Community Colleges Faculty Association of California Community Colleges Education Institute 1823 11th Street Sacramento, CA 95811 (916) 447-8555 www.faccc.org John Hays Managing Director, Higher Education Practice TIAA-CREF One Beacon Street, 8 th fl. Boston, MA 02108 781-314-2487 www.tiaa-cref.org

10. 10For Institutional Investor Use Only. Not for Use With or Distribution to the Public. Important Information 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. © 2012 Teachers Insurance and Annuity Association-College Retirement Equities Fund, (TIAA-CREF), 730 Third Avenue, New York, NY 10017 C4282