March 23, 2007

An Update for Clients from TIAA-CREF

All of us at TIAA-CREF are honored to have the opportunity to help meet the financial needs of the institutions and individuals we serve. As we take steps to bring you a new service platform more attuned to your needs, we also want to be sure we are keeping you apprised of the scope and status of service issues affecting some clients and steps we're taking to address them.

Completing the transition to the new platform will enable us to improve service to you. The new platform also enables us to bring your retirement plan more personalized services, broader investment choices, objective advice, and improved reliability. We recognize that you have a choice of plan providers and want to ensure we're meeting your needs.

Improving Service

We are a mission-driven organization and care greatly about our clients, so it is troubling to us when we fall short of the high standards we set for ourselves. Over time, as we have introduced new capabilities and increased the volumes of transactions we process, the specific nature of service concerns has evolved. We continue to address problems as quickly as possible.

Reducing transaction delays. While the number of transactions on our new platform continues to increase, the number of delayed transactions continues to fall. In February, we completed approximately eight million transactions on the new platform, a thirty-three percent increase from December. At virtually the same time, our backlog of delayed transactions has declined. We continue to add resources, including additional personnel, to our transaction processing teams. Our people also are putting in significant overtime in such areas as pension processing and telephone counseling, with the goal of improving our responsiveness to you.

Ensuring Accuracy. We know for some of you our platform upgrade has not been as seamless as either you or we would like. While our error rate processing transactions on the new platform is small compared with our monthly volumes, we recognize that clients who have encountered a service problem are frustrated. We take these problems very seriously, and are working aggressively to resolve them. Of course, this is small consolation to individuals who have been impacted by service issues. We are addressing each individual's case, and have pledged to reimburse anyone who has incurred expenses as a result of our delays.

Reducing telephone wait times. For the first two months of this year, our telephone counseling centers answered 45 percent of calls — on average — within 30 seconds. In February, 59 percent of calls were answered within 30 seconds, which is up from 36 percent in January. Our goal by later this year is to exceed the industry standard of 70 percent of calls answered within 30 seconds. To help achieve this, we are opening a third telephone counseling center in Dallas, adding consultants, and assuring they have the training and knowledge to impart the information and advice our clients expect.

Displaying transactions online. We're working diligently to remedy problems in conforming information about participants' contributions that is displayed on our websites with their actual contributions recorded in our systems. While all the contributions are in fact accounted for, we recognize that this display problem is unnerving. We also are continuing to add institutional reporting capabilities to online services for plan administrators.

Making the Most of Your Investment in TIAA-CREF

One of the best parts of our job is speaking directly with retirement plan sponsors to learn what we can do to help you fulfill your many responsibilities on behalf of your plan and its participants.

Remitting correctly. One way we are going to reduce errors, streamline processes and improve your experience is to revise our procedures for accepting remittance lists and contributions. Our focus will be on standardizing such information with the goal of avoiding processing snags. We will work closely with plan administrators to help your plan adopt these new standards in a way that works for you.

Reviewing the basics. Some administrators have found it helpful to take a refresher course on our new platform. It eliminates the theoretical and allows you to review the practical questions that impact the way the platform works for you day-in and day-out. If you'd like to take advantage of this additional guidance, please let us know.

Recent Developments

As we go through this transformation, we remain focused on meeting your retirement needs.

• Our investment performance was recognized recently in the 2006 Lipper/Barron's Fund Family Survey when we recently ranked 7th out of 67 mutual fund families. TIAA-CREF fund family rankings are for the one- and five-year periods (ending 12/31/06) among 67 and 62 funds respectively; ten-year rankings are not available. The Lipper/Barron's Fund Family survey uses an asset-weighted ranking system. Each family's funds were weighted by asset size, and the family's overall ranking was determined by weighting five fund categories in proportion to their overall importance within Lipper's fund universe.
• The TIAA-CREF Mid-Cap Value Index Fund was honored by Lipper for consistently strong three-year risk-adjusted performance for the period ending December 31, 2006, relative to peers. The fund's institutional share class performance ranked number one in Lipper's mid-cap value category.
• The capital base underpinning our pension obligations is stronger than ever, and is more than four  times statutory requirements.
• Our website, tiaa-cref.org, is tied for most improved by Dalbar, a leading financial-services market research firm, moving to 13th from 26th overall, with more improvements on the way.
• Our industry-award-winning personalized, objective investment advice offering continues its success, with 93% of general participants expressing satisfaction with it. TIAA-CREF was selected 2005 Advice Provider of the Year by Defined Contribution & Savings Plan Alert, a publication of Institutional Investor.

Of course, the acknowledgment that matters most is when you tell us we've exceeded your expectations.

Here to Help You

We stand ready to respond as quickly as possible to your needs. Individuals who experience a problem should contact us via phone at 1 800 842-2776 or via email. Please visit www.tiaa-cref.org/about/contact/index.html for complete contact information.

Plan sponsors who experience a problem, or who have participants who experience a problem, should contact their institutional relationship manager. Plan sponsors without an individual relationship manager should contact us via our Administrator Telephone Center at
1 888 842-7782.

We will work to resolve your problem, and keep you up to date along the way. Thank you for your continued patience and loyalty as we work to meet your evolving financial needs.