Frequently Asked Questions about Mutual Fund Consolidation

New York, April 27, 2009

As previously announced, five indexed TIAA-CREF Mutual Funds will be combined into two indexed TIAA-CREF Mutual Funds on June 12, 2009. The change is detailed in the chart below and explained further in a list of questions and answers about the change.

Why are you combining these funds?

The goal of this combination is to streamline TIAA-CREF’s mutual fund lineup by reducing the number of funds with overlapping investment strategies, while still providing participants with a full roster of funds in key asset classes at attractive fee levels. The five indexed funds affected are being consolidated into the indexed TIAA-CREF Funds, shown in the table above, that have overlapping investment objectives with similar or lower expense ratios. Additional information on these fund consolidations is also included in the latest TIAA-CREF Funds Prospectus.

If I have money in any of these five funds, what do I need to do?

This consolidation will be seamless and will not require any action on the part of current investors. Participants and other investors will receive shares of the acquiring funds equal in value to their shares in the target funds on the date of the transfer, and this is not considered a taxable event.

Will there be any increase to the fees and expenses as a result of the consolidation?

While many factors affect expense ratios, the expense ratios of the acquiring funds are expected to be similar or lower than those of the target funds after the consolidation.

How does this consolidation eliminate duplication and save costs?

The goal of the index fund consolidation is to streamline our existing fund lineup and defray operating costs by eliminating funds that have similar investment objectives, while still providing funds in key asset classes at comparable fee levels. In addition, the five funds are being consolidated due to a current and anticipated future lack of demand, which reduces the funds’ economies of scale and impedes their long-term economic viability.

Even though this consolidation will result in cost savings, isn’t it important to have index funds that cover a variety of different asset classes?

The index funds that TIAA-CREF offers still provide participants and plan sponsors with a wide array of investment strategies that comprehensively cover the domestic equity markets. For example, most of the index funds that we will continue to offer are subsections of the Russell 3000® Index, which represents approximately 98% of the U.S. equity markets. More specifically, with regard to the small-cap space, the continued availability of the Small-Cap Blend Index Fund covers both the growth and value components of small-cap investment universe in one offering.

With regard to the mid-cap space, the merged funds were indexed to the various Russell mid-cap indexes, which represent 800 of the smallest companies in the Russell 1000® indexes, based on market capitalization. These stocks are also present in the previously mentioned Russell 3000 Index through the Equity Index Fund. Because the mid-cap funds are actually subsets of other indexes, participants still have the ability to seek complete coverage of the domestic equity markets through our remaining available index funds.

For plan sponsors and participants who would still like exposure to mid-cap stocks, we will continue to offer the actively-managed TIAA-CREF Mid-Cap Growth Fund and the TIAA-CREF Mid-Cap Value Fund, both of which are not impacted by this fund consolidation. These funds remain available for use by plan sponsors and their participants.

Why aren’t the affected TIAA-CREF Mid-Cap Index Funds consolidating into the TIAA-CREF actively-managed mid-cap funds?

The Equity Index Fund was selected as the acquiring fund instead of our actively-managed mid-cap funds because it is assumed that the clients who chose to invest in the mid-cap index funds were most interested in the index characteristics of these particular funds. As such, we identified the Equity Index Fund as having the characteristics that were closest to the mid-cap index funds that are being consolidated (and this includes a comparable expense ratio as well). Generally speaking, clients who choose actively-managed mid-cap funds have done so because of a preference over passively-managed funds. It is important to reiterate that our actively-managed mid-cap funds (the Mid-Cap Growth Fund and the Mid-Cap Value Fund) are not subject to this consolidation and will continue to be available to plan sponsors and their participants.

Why can’t the acquiring fund for the TIAA-CREF Mid-Cap Index Funds (target funds) be the existing CREF Equity Index Account as opposed to the TIAA-CREF Equity Index Fund?

For legal purposes, the acquiring funds need to be mutual funds in order for the merger to take effect. The impacted funds cannot merge into CREF accounts because they are variable annuities, and not pure investment mutual funds. The acquiring funds were selected because they most closely matched the investment objectives, strategies and expense ratios of the particular index funds that were being closed.

Can plan sponsors map assets to funds other than the acquired funds? Can they be assisted with this process?

This consolidation is a fund action that is currently expected to take place on June 12, 2009. Any assets in the target funds on the consolidation date will be automatically transferred to the appropriate acquiring funds. To prevent this action from taking place, please keep in mind that any requested remapping of assets in the target funds to funds other than the acquired funds will take between six and ten weeks to complete depending on the complexity of the individual situation.