TIAA-CREF & Socially Responsible Investing

Q

Would you please address why UCAR provides employees concerned about
socially responsible investing through TIAA-CREF only one option, the
slow-growth Social Choice account? TIAA-CREF also offers the Social Choice
Equity fund, which since inception has had a return about 50% higher
(15.89% vs. 10.01%).

Since inception (10/1/02), the Social Choice Equity fund has returned
15.89%. (1-yr = 10.84%, 3-yr = 9.68%) See
www.tiaa-cref.org/performance/retirement/profiles/1617.html.

Since inception (3/1/90), the Social Choice account has returned only
10.01%. (1-yr = 8.67%, 3-yr = 7.28%, 5-yr = 6.96%, 10-yr = 7.50%) See
www.tiaa-cref.org/performance/retirement/profiles/1005.html.

Answered on April 03, 2007

A

There are a couple of reasons that UCAR employees have not had access to
all of the investment options offered by TIAA-CREF.

The recordkeeping system that TIAA-CREF used could not support additional
options. TIAA-CREF recently upgraded that system to allow more options.
UCAR transitioned to the new system in mid-year and the process was
completed in the fourth quarter of 2006.

There are some fiduciary and legal requirements that must be completed in
order to change the list of investment options offered under the plan. An
updated plan document was approved by the UCAR Board of Trustees this past
February and custodial/recordkeeping agreements are undergoing legal
review. Once the agreements are completed, we will begin a fiduciary review
of all investment options for the plan. We expect to begin that review this
summer. The risk and return on various investment options will be analyzed.
I am sure that the returns on the two social choice funds will be compared
during this analysis.

I expect we will see changes in the investment options later this year.

—Bob Roesch, Director, Human Resources