2011 Investment Performance of the TIAA General Account

This statement is updated each quarter with the latest performance information for the TIAA General Account.

For nearly a century, TIAA’s disciplined, long-term approach to asset management has enabled us to deliver on our mission to help individuals and institutions plan for lifelong financial security. In recent times, the volatility of financial markets underscores why it is critical to recognize and appropriately manage risk. TIAA strives to identify emerging risks to our business and in the broader economy, and then we take the necessary steps to try to manage and mitigate those risks. By virtue of our mission, we are in it for the long term.

Unlike publicly owned companies that seek return for shareholders, our goal is to create value for individuals and institutions, in the form of high-value services and guaranteed income for life. TIAA’s General Account supports our guaranteed fixed annuity, TIAA Traditional Annuity. The General Account primarily invests in corporate and government bonds, structured finance instruments (such as mortgage-backed securities) and real estate.

TIAA ended 2011 with a record level of capital reserves and recent affirmations of our financial strength by all four major independent rating agencies. TIAA is among the highest-rated insurance companies in the United States, and our capital reserves underscore our company’s stability, claims-paying ability and overall financial strength.*

TIAA had $225.9 billion in total statutory admitted assets, including $16.0 billion in its separate accounts as of December 31, 2011. Moreover, our capital and contingency reserves, which determine our claims-paying ability, grew strongly, ending 2011 at $27.1 billion, an increase of $2.0 billion over year-end 2010.

As of December 31, 2011, TIAA’s General Account portfolio had $0.1 billion in investment gains consisting of net unrealized capital gains of $0.5 billion offset by net unrealized capital losses of $0.4 billion.

In addition, the crediting rate for TIAA Traditional Annuity – currently 3.00% for Retirement Annuities (RA) – remains highly competitive. The average annual return for the TIAA Traditional RA contracts for the 10-year period ended December 31, 2011 is 5.32%, which is significantly higher than the average 10-year Treasury yield during that period and well above the general rate of inflation for most of the past three decades.

Due to the capital position of the General Account, TIAA’s guarantees of principal and minimum rates of interest remain strong. Accordingly, the Trustees of TIAA set the interest rates at a level that allows TIAA to guarantee and pay lifetime income to millions of retirees.

Note: This statement pertains to the TIAA General Account. The TIAA General Account is an insurance company general operating account. It is not available to investors and does not present investment returns to participants. The performance of the investments held in the TIAA General Account support the TIAA Traditional Annuity's guarantees of principal, minimum guaranteed returns, additional amounts and payout obligations.

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