Statement on TIAA-CREF's Participation in U.S. Treasury Money Market Insurance Program

TIAA-CREF has determined that its two eligible mutual funds, the TIAA-CREF Institutional Mutual Funds Money Market Fund (all three share classes) and the TIAA-CREF Life Money Market Fund, will participate in the U.S. Treasury Department Temporary Guarantee Program for Money Market Funds.

The CREF Money Market Account can not participate because it does not maintain a constant accumulation unit value (AUV) pegged at $1.00 or more, which is part of the federal program's requirements. Thus, the account is not eligible for the Treasury's stable value extension program announced on October 8, 2008. (See answer to Question 4 below.)

Key Points

• To help support investor confidence in this time of market instability, TIAA-CREF is participating in the federal money market insurance program.
  
  
• Eligible funds will be covered by the new insurance program. The TIAA-CREF Institutional Money Market Fund (Retirement Class-TIEXX, Retail Class-TIRXX and Institutional Class-TCIXX) and TIAA-CREF Life Money Market Fund are eligible to participate and will be covered by this insurance program.
  
  
  • Because it does not seek to maintain a constant accumulation unit value (AUV) pegged at $1.00 or more, the CREF Money Market Account is not eligible to participate in this insurance program.
    
    
• We have confidence in all of our money market portfolios. We feel confident in the security of all of our money market funds and accounts because their portfolios:
  
  
  • have steered clear of troubled companies
  • invest in only high-quality holdings
  • have experienced no defaults or downgrades.
    
    
• The cost of participating in this program will be paid by investors in each fund. The Treasury Department is charging one-one hundredth of a percent (or one basis point) of the total fund net assets as of September 19, 2008, the date when the guarantee begins.
  
  
  • That means the cost for insuring a $1,000 investment in a money market fund is ten cents.

Background on the Federal Money Market Insurance Program
The U.S. Treasury Department's Temporary Guarantee Program for Money Market Funds guarantees the $1.00 share price of participating money market funds. The guarantee will be triggered only if a participating fund liquidates its assets as a result of its net asset value falling below $.995, commonly referred to as "breaking the buck."

Under the program, coverage is provided to shareholders for amounts that they held in participating money market funds as of the close of business on September 19, 2008. Any increase in the number of shares held in an account after the close of business on September 19, 2008 will not be guaranteed. Please see the bottom of this piece for some examples of how this works in various situations.

Investors cannot sign up for the guarantee themselves; the Treasury Department's guarantee arrangement is made with the funds. The plan is scheduled to be in place for three months—ending December 18, 2008—but can be extended up until September 18, 2009, at the discretion of the Department.

Funds participating in the initial three-month period will be required to renew their participation after December 18 if the program is renewed. The cost and conditions of the extended program will be determined by the Treasury at that time.

Frequently Asked Questions about the Federal Money Market Insurance Program:

1. Is TIAA-CREF participating in the Treasury's Temporary Guarantee Program for Money Market Funds?
   Yes. All of TIAA-CREF's eligible money market funds are participating in the program to help support investor confidence in this time of market instability.
   
   
2. Which TIAA-CREF money market funds and accounts are participating in the program?
   TIAA-CREF Institutional Money Market Fund (Retirement Class-TIEXX, Retail Class-TIRXX, and Institutional Class-TCIXX) and TIAA-CREF Life Money Market Fund are participating in the program. The CREF Money Market Account is not eligible to participate in the program.
   
   
3. Is the CREF Money Market Account eligible to participate in the Treasury's stable value extension program announced on October 8, 2008?
   No. The CREF Money Market Account was not eligible for the federal program as originally crafted, nor is it eligible to participate in the federal stable value extension program announced on October 8, 2008. The CREF Account is ineligible because it does not seek to maintain a constant unit value of $1.00 or more. 
   
   
4. Why is the CREF Money Market Account not eligible to participate in the government's money market insurance program?
   The CREF Money Market Fund Account is not eligible to participate in the program because it does not seek to maintain a constant accumulation unit value (AUV) pegged at $1.00 or more, which is part of the federal program's requirements. The rules governing the federal program state, that in order to be eligible, a money market fund or account must maintain a daily unit value of $1.00 or more, which the CREF account does not.
   
   
5. How then is the CREF Money Market Account valued?
   The CREF Money Market Account does not maintain a constant unit price of $1.00, as it does not make distributions, and it values securities that are more than 60 days from maturity at market value.
   
   The account's value is calculated each business day, not as a net asset value (NAV), or an accumulation unit value (AUV), but at an annuity unit value (AUV). This latter AUV valuation method provides more detail on smaller value changes than the traditional one, based on a $1.00 share price. Using the traditional method, the share price is not adjusted unless the value of the share drops by half a percentage point, an event called "breaking the buck." The largest drop in the account's AUV over the last five years was less than 0.7 cents for the period ending October 7, 2008.
   
   
6. What investments are eligible for coverage?
   Under the program, coverage is provided to shareholders for amounts that they held in participating money market funds as of the close of business on September 19, 2008. Any increase in the amounts held by a shareholder on September 19, 2008, or any amounts in an account held by a newer shareholder will not be covered by the program.
   
   
7. If TIAA-CREF has full confidence in its money market portfolios, why participate in the government money market insurance program?
   TIAA-CREF is participating in the program to help support investor confidence in general during this time of unprecedented market instability. We believe that it is unlikely that we would ever need the guarantee offered by the program; however, we feel this additional protection will be reassuring to our participants.
   
   
8. How much does this program cost and who is covering the cost to participate in the program?
   The cost of participating in this program will be paid by investors in each fund. The Treasury Department is charging one-one hundredth of a percent (or one basis point) of each fund's total assets as of September 19, 2008, the date when the guarantee begins, to participate in the program. That means the cost for insuring a $1,000 investment in a money market fund is ten cents.
   
   
9. Can I join the federal money market insurance program on my own?
   Investors cannot sign up individually. Each money market fund decides whether to sign up for the program.
   
   
10. Where can I learn more about the U.S. Treasury Temporary Guarantee Program for Money Market Funds and official program updates?
    For more details on the program, visit the U.S. Treasury site at: http://www.sec.gov/divisions/investment/mmtempguarantee.htm

Examples of how the coverage of the federal insurance program works

• Say a shareholder owned 200 shares of ABC Money Market Fund on September 19, sold 100 on September 22, and purchased 50 on September 30. If the fund breaks the buck on October 10, all 150 of the shareholder's shares would be covered under the guarantee program—even though some of those shares were purchased after September 19. As long as it remains in effect, the guarantee program will protect investments in the ABC Money Market Fund up to the amount that was held as of September 19.
  
  
• A shareholder who owned 100 shares in ABC Money Market Fund—Institutional Class on September 19, 2008, and subsequently exchanged all of them into ABC Money Market Fund - Retail Class (i.e., made a share class exchange within the Fund) will not lose coverage under the program should ABC break the buck.
  
  
• A shareholder owned 200 shares of ABC Money Market Fund as of September 19. If the fund breaks the buck on October 10 and the shareholder still owns 200 shares, all shares are covered under the program.
  
  
• A shareholder owned 200 shares of ABC Money Market Fund on September 19, and sold 100 on September 22. If the fund breaks the buck on October 10, 100 of the shareholder's shares would be covered.
  
  
• A shareholder owned 200 shares of ABC Money Market Fund on September 19. The shareholder purchases 50 shares on September 22, so the shareholder owns 250 total shares. The fund breaks the buck on October 10. Only the initial 200 shares would be covered under the guarantee program.