New Opportunities for Your Retirement Strategy. Announcing Upcoming Changes to the Baylor Retirement Plan

Transcription

1 New Opportunities for Your Retirement Strategy Announcing Upcoming Changes to the Baylor Retirement Plan

2 Changes to the Baylor Retirement Plan We are pleased to announce several changes to the Baylor Retirement Plan (the Plan), beginning October 26, These changes are designed to help simplify your investment choices for retirement savings and offer you services and tools to help you make decisions for your future. While these changes are designed to improve the Plan for the Participants, the basic Plan design, including the 10.8% annual employer contribution to the Plan on your behalf, remains unchanged. The Baylor Retirement Plan Administrative Committee (the Committee), which is composed of Baylor faculty and staff members, all of whom belong to churches that are part of the Baptist General Convention of Texas, is responsible for the administration and oversight of the Plan. The Committee hired CAPTRUST, an independent advisor, to conduct a review of all aspects of the Plan investment providers, the fund menu, investment and administrative costs as well as a comparison of best practices of the retirement plans sponsored by higher education institutions. As a result of this review, the Committee has selected TIAA as the single service provider of administrative recordkeeping services for the Plan. With this change, many of your investments with Vanguard and GuideStone will be transferred to the same or similar investments that will be recordkept by TIAA. The new tiered lineup of investment options under the Plan will give you the ability to create a diversified retirement portfolio. Where possible, the Committee attempted to negotiate lower fees for some investment options. This Transition Guide explains these changes and new services in detail. We encourage you to review the information carefully and attend a transition webinar or seminar offered by TIAA to understand how your retirement accounts may be affected. If you need one-on-one help understanding the Plan details, or selecting investments for your assets in the Plan, you can get advice from CAPTRUST Participant Advisory Services. More information on their services is contained within this Transition Guide. We hope these changes enhance your retirement planning experience while ensuring you have choices in how you plan for your retirement. Questions? Call or visit TIAA.org/Baylor

3 Table of Contents You Now Have an Easier Way to Save for Retirement 2 What is Changing? 3 What You Need to Know: A New Chapter is about to Start 4-6 What You Need to Do 7 New Tiered Investment Options Overview 8 Choose Your Plan Investment Path 9 CAPTRUST Participant Advisory Services 10 New Plan TIAA Brokerage Account Option 11 Letting Professionals Manage Your Plan Account for You 12 New Tiered Investment Options Specifics New Plan Investment Lineup, Expenses and Credits Understanding Your Plan Fees and Expenses For All Plan Participants 19 For Plan Participants with TIAA Investments For Plan Participants with Vanguard and GuideStone Investments 22 For Plan Participants with Existing Investments with Other Providers 23 On-site Events Q&A About TIAA 29 We re Here to Help Back cover Questions? Call or visit TIAA.org/Baylor 1

4 You Now Have an Easier Way to Save for Retirement Baylor University is pleased to simplify some features of the Baylor Retirement Plan (the Plan) and offer new services to help you create a diversified retirement portfolio under the Plan to help meet your unique goals for the future. Beginning January 18, 2019, TIAA will act as the single service provider of administrative recordkeeping services for the Plan. You will have the option to invest your contributions in a new tiered investment lineup under the Plan. Vanguard and GuideStone will no longer provide recordkeeping services under the Plan, and your assets held with those providers will transfer to the same or similar investment options to be held at TIAA. This Transition Guide outlines the changes to the Plan and the new advice services available to help you make the best decisions for your future. After reading the guide, you will have information about: The new investment lineup in the Plan and how your Plan assets and future contributions may be affected during the transition. Important actions you need to take and key deadlines for taking such action. The TIAA Brokerage account option and the opportunities and responsibilities associated with such an account. 1 Advice services available to you during the transition and going forward. 1 1 Neither the Committee nor CAPTRUST, the Committee s financial advisor, will monitor the performance of the funds in your personal TIAA Brokerage account. TIAA does not offer investment advice for balances in the TIAA Brokerage accounts. 2 Questions? Call or visit TIAA.org/Baylor

5 What is Changing? Consolidated investment providers under the Plan TIAA will be the single service provider for the Plan. Assets currently held at GuideStone and Vanguard will be transferred to TIAA. Future Plan contributions for all participants will be directed to TIAA. TIAA will issue a new type of Plan account that includes Retirement Choice (RC) and Retirement Choice Plus (RCP) contracts to hold your Plan assets and future contributions. The Retirement Choice (RC) contract will be established to house the assets Baylor contributes on your behalf. The Retirement Choice Plus (RCP) contract will be established to house the assets you contribute. TIAA Brokerage account option This self-directed brokerage account provides experienced investors with access to thousands of additional mutual fund options. 1 New advice services You can receive advice on the Plan s investment options from a CAPTRUST Participant Advisory Services (PAS) representative in person or by phone. An optional fee-based TIAA Retirement Plan Portfolio Manager service reviews your portfolio quarterly and provides investment advice based on your goals and needs. A new tiered investment lineup The Plan will have streamlined mutual fund and annuity contract options. The Plan s new default investment option will be a Vanguard target-date fund. Several options from the lineup have been removed and replaced with new options. Some options have lower fees and a lower overall cost than current selections. What is not changing? Baylor will continue to contribute 10.8% of your annual salary 2 on your behalf. Plan design and rules remain unchanged. Eligibility and vesting provisions remain the same. 1 Neither the Committee nor CAPTRUST, the Committee s financial advisor, will monitor the performance of the funds in your personal TIAA Brokerage account. TIAA does not offer investment advice for balances in the TIAA Brokerage accounts. 2 Subject to the annual compensation limit in Internal Revenue Code 401(a)(17). Questions? Call or visit TIAA.org/Baylor 3

6 What You Need to Know A New Chapter is about to Start Helping you plan and save for the future is important to Baylor University. That s why the Baylor Retirement Plan Administrative Committee (the Committee) is pleased to announce these updates to the Baylor Retirement Plan. Effective January 18, 2019, TIAA will become the single service provider for the Plan. The Committee, with the help of its independent advisor, CAPTRUST, selected TIAA to deliver comprehensive retirement services at a competitive cost. As a result of this change, your balances currently held at Vanguard and GuideStone will be transferred to TIAA. New investment options under the Plan. The Committee, working with CAPTRUST, carefully selected an array of investment options designed to give you the ability to create a diversified retirement portfolio with the assets in your Plan account. You will receive new Retirement Choice (RC) and Retirement Choice Plus (RCP) contracts. These new contracts will hold future contributions along with the mutual fund assets in existing TIAA contracts. Any balance in any existing TIAA and CREF annuity contracts will remain in such contracts, although no new contributions, rollovers or transfers may be made to such annuity contracts. Lower fees. As part of its ongoing supervision of the Plan, the Committee negotiated lower fees in the different investment options when possible. The Committee will continue to negotiate lower fees whenever possible. New independent investment advice resource. CAPTRUST PAS representatives will now offer advice on the investment offerings under the Plan. As a Plan Participant, you have access to CAPTRUST PAS representatives as a resource for investment advice and help with important financial decisions. CAPTRUST is an independent investment advisory firm that will be available to provide investment advice to Plan Participants who need help investing their Plan accounts. CAPTRUST has been providing personalized investment advice to help individual participants in other plans for more than 25 years. New Plan TIAA Brokerage account option. If you would like to have access to even more investment choices, the Committee has added a self-directed brokerage account option under the Plan. Please note: neither the Committee nor its financial advisor, CAPTRUST, will monitor the performance of the funds in your personal TIAA Brokerage account, and advice is not available for balances in such accounts. Retirement Plan Portfolio Manager. This is a TIAA service designed to monitor your Plan account so you don t have to do all the work. Known as a managed account, this service gives you professional oversight and a systematic, disciplined approach to managing your Plan account. continued TIAA and its affiliates, and CAPTRUST and its affiliates, are not affiliated with or in any way related to each other. TIAA acts as a recordkeeper for the Plan and, in that capacity, is not a fiduciary of the Plan. TIAA is not responsible for the advice and education provided by CAPTRUST. TIAA also provides advice and education to Plan Participants and when it provides advice TIAA takes fiduciary responsibility for that advice. CAPTRUST is not responsible for the advice and education provided by TIAA. Neither the Committee nor the University are responsible for any advice provided by either TIAA or CAPTRUST. 4 Questions? Call or visit TIAA.org/Baylor

7 What You Need to Know A New Chapter is about to Start Plan loans. Plan Participants who borrow against their Plan account will no longer be issued collateralized loans. Starting on or about January 18, 2019, new loans will be offered with a fixed interest rate and funded directly from your Plan account. The loan amount is deducted from your Plan account, and subsequent loan payments, including interest, are credited to your Plan account. For new loans, you will be issued a one-time origination fee. The fee is $75 for general purpose loans and $125 for residential purpose loans. If you currently have an outstanding loan, it will not be affected by this change. There will be no interruption to your repayment schedule and the terms of your loan will continue as issued. If you have a current outstanding loan, you are not required to take any action; your loan payments will continue automatically. Blackout period for Plan assets held at Vanguard and GuideStone. To facilitate a smooth transfer of current investment balances at Vanguard and GuideStone to TIAA, a brief blackout period will take place in January During this time, you will not be able to change your investment choices, request loans, make withdrawals or transfer funds between investment options. The blackout period will only apply to balances currently housed at Vanguard and GuideStone. Please review the enclosed blackout notice for additional details. Any scheduled payroll contributions will continue to be deducted from your paycheck during the blackout period and will be transferred to TIAA at the end of the blackout period. A special note for former and retired employees with account balances in the Plan You are receiving this guide because you are a participant in the Plan. Even though you are not actively contributing, you should review this information carefully to learn how your account could be affected. It is important to note: This transition may impact any systematic transfer instructions you have on file for the Plan after the blackout period has ended. You will receive a separate communication if you are impacted. If you are receiving recurring payments from GuideStone or Vanguard, these payments will continue without interruption. 1 However, if you receive your funds through direct deposit, once your account balances at GuideStone or Vanguard are transferred to TIAA, your future payments will be mailed from TIAA to your home address on file with Baylor University after February 8, 2019, unless you contact TIAA at after the blackout period has ended to provide TIAA with your banking information to resume direct deposit. continued 1 Please note: You will not receive payments from either provider during the blackout period, which is expected to begin January 24, 2019, and end no later than the week of February 4, Should you require a payment during this period or at any time during the transition, please contact GuideStone or Vanguard as soon as possible. Questions? Call or visit TIAA.org/Baylor 5

8 What You Need to Know A New Chapter is about to Start Plan changes starting October 26, 2018 Key dates Beginning the week of October 22 Week of October 22 October 26 On or about January 24, 2019 at 3 p.m. (CT) January 18 (bi-weekly) January 31 (monthly) On or about January 30, 2019 On or about the week of February 4, 2019 Events On-site seminars and information desk begin. See the schedule on pages of this guide. You will be enrolled in a new Plan account at TIAA and receive a confirmation kit with important information on making the most of your participation under the Plan. TIAA representatives will be available to discuss your account and the transition. Open investment election period starts. You may now go online at TIAA.org/Baylor to update your investment choices for contributions made on or after January 18, CAPTRUST Advice Line will be available. Blackout period expected to begin for Plan Participants with assets housed at Vanguard and GuideStone. See accompanying notice for details. Your new Plan account at TIAA in Retirement Choice (RC) and Retirement Choice Plus (RCP) contracts will receive your first payroll contribution. Account balances held at Vanguard and GuideStone will transfer to TIAA. TIAA will become the single service provider for the Plan. Please note: The date of the transfer depends on the accurate, timely transfer of data and assets from Vanguard and GuideStone to TIAA. If this does not occur, the transfer could be delayed. Blackout period for Plan Participants with assets at Vanguard and GuideStone expected to end. You will now be able to access and update your entire Plan account at TIAA, including balances transferred from Vanguard and GuideStone. Please note: The end of the blackout period depends on the accurate, timely transfer of data from Vanguard and GuideStone to TIAA. If this does not occur, the end of the blackout period could be delayed. TIAA-CREF mutual fund balances in the existing Plan will be transferred into the new TIAA contracts. Annuity investments will remain unchanged. 6 Questions? Call or visit TIAA.org/Baylor

9 What You Need to Do Investment election period All Plan Participants will be able to select investment options that will be applicable to contributions made on or after January 18, 2019, from the new menu during an investment election period starting October 26, While you can make changes to your investment elections any time, the investment election period will allow you to select from the new investment options prior to the first contribution on January 18, Starting on October 26, 2018 You may access your new Plan account online at TIAA.org/Baylor. You may change how your future contributions will be invested beginning with payrolls ending on and after January 18, The first contribution to reflect these changes will be made with the payroll ending either January 18, 2019 (bi-weekly), or January 31, 2019 (monthly). Until then, all of your current contributions will be invested in accordance with your existing elections. You should review your beneficiary designation and update if needed. Have questions? Call TIAA at Attend a seminar to get a guided tour of the Plan changes or stop by an information desk outside of one of the seminars to get quick answers to your questions, as described on pages Schedule an advice session with a CAPTRUST Participant Advisory Services (PAS) representative to get personalized retirement plan advice, as described on page 10. For details on how Plan account balances at other providers will transfer to TIAA, refer to the enclosed insert. Beginning October 26, 2018, you may change how your future contributions will be invested in your new TIAA account. If no change is made to your investment elections prior to January 18, 2019, future contributions will follow the same transfer strategy as your existing elections, in most cases. Once the transition is complete, you will be able to make other changes to your existing Plan account balances. Questions? Call or visit TIAA.org/Baylor 7

10 New Tiered Investment Options Overview Investment Tiers The Plan s new investment options will be arranged in a tiered structure, offering a variety of investments from several fund families. You can create a tailored retirement strategy by investing in options from any of the following tiers: Allocation, Active, Passive, Christian-Screened or the TIAA Brokerage account. Tier 1: Allocation Tier 1,2 The Allocation Tier houses options which offer a diversified investment portfolio within a single fund. Many options in this tier are age-based target-date funds. Selecting a target-date fund may be a good choice if you prefer a hands-off approach to managing your retirement savings. Each of these investments creates a diversified portfolio within one fund, based on the fund year nearest to the year you will attain age The target date indicates when you may choose to begin making withdrawals, and the fund s investments become more conservative as the target date approaches. After the target date, the fund may be merged into a fund designed for investors already in retirement. Tier 2: Active Tier The Active Tier consists of actively managed investments, which are managed by a fund manager who buys and sells investments within the portfolio in an attempt to outperform a market benchmark. Tier 3: Passive Tier The Passive Tier uses index mutual funds, which aim to replicate the performance and risk characteristics of one of several market indices (e.g., Standard & Poor s 500 Index). These funds provide broad diversification within a single type of asset class at low costs. Tier 4: Christian-Screened Tier The Christian-Screened Tier allows faith-based investors the opportunity to align their personal investments with biblical values and principles. Because of these special qualities, the fees associated with these funds generally are not subject to the same review by the Committee or its financial advisor, CAPTRUST, as are other investments under the Plan. As a result, the fees associated with funds under the Christian-Screened Tier may in some instances be higher than comparable funds under other tiers. Tier 5: TIAA Brokerage account The TIAA Brokerage account option provides access to thousands of mutual funds from many well-known fund families. While the new investment lineup in the other tiers is designed to meet the needs of most Plan Participants, the brokerage option may appeal to active, experienced investors or those investors who desire investment choices other than the offerings in the Plan. Please note: Neither the Committee nor its financial advisor, CAPTRUST, monitors investments offered through the TIAA Brokerage account option. For more information, see page Target-date funds share the risks associated with the types of securities held by each of the underlying funds in which they invest. In addition to the fees and expenses associated with the target-date funds, there is exposure to the fees and expenses associated with the underlying mutual funds. For more information about the target-date fund applicable to your age, see page 10 of the enclosed insert, Baylor Retirement Plan Asset Transfer Charts. 2 As with all mutual funds, the principal value of a target-date fund isn t guaranteed at any time, even at the target date. The target date represents an approximate date when investors may choose to begin withdrawing from the fund. For more information on target-date funds, see pages 9, 26 and Diversification is a technique to help reduce risk. It is not guaranteed to protect against loss. 8 Questions? Call or visit TIAA.org/Baylor

11 Choose Your Plan Investment Path Option 1: Selecting a Target-date Fund from the Allocation Tier A diversified retirement portfolio in a single fund of funds How do target-date funds work? Each target-date fund is a fund of funds, primarily invested in shares of other mutual funds. 1 The fund s investments are adjusted from more aggressive to more conservative over time as the target date for each fund approaches. What are some other considerations? As with all mutual funds, the principal value of a target-date fund isn t guaranteed at any time and will fluctuate with the market. The target date indicates when investors may choose to start making withdrawals. However, you are not required to withdraw funds at the target date. A CAPTRUST PAS representative can help you decide whether a target-date fund is right for you, at no extra cost. Option 2: Building Your Own Portfolio from the other Tiers A retirement portfolio of your own design What types of investments are included? The new investment menu offers you a wide range of investment options. These options cover the major asset classes, including equities, fixed income, guaranteed, money market, multi-asset and real estate. What are some other considerations when choosing my own investments? Consider your risk tolerance when selecting investments. If you prefer to work with a financial professional, you may wish to have a CAPTRUST PAS representative suggest a portfolio based on the options available in the Plan. This Plan investment advice is available at no additional cost to you. Please keep in mind that there are risks associated with investing in securities, including possible loss of principal. The Plan is designed to allow you to invest in your Plan account under both investment paths, or a combination of the two. 1 Target-date funds share the risks associated with the types of securities held by each of the underlying funds in which they invest. In addition to the fees and expenses associated with the target-date funds, there is exposure to the fees and expenses associated with the underlying mutual funds. Questions? Call or visit TIAA.org/Baylor 9

12 CAPTRUST Participant Advisory Services We are pleased to announce that CAPTRUST will be available to provide independent financial advice to Plan Participants starting October 26, 2018, at no additional cost to you. Enrollment Retirement advice line: A CAPTRUST Participant Advisory Services (PAS) representative will assist you with your investing questions or help with your Plan and other financial issues. The representatives are available to offer you investment advice and then help you act on the advice by assisting as you navigate the TIAA website. One-on-one meetings: You can schedule an individual appointment with a CAPTRUST PAS representative when they visit our locations. During such an appointment, you can discuss your personal investment goals and get advice on how to invest your Plan account. Retirement Blueprint: For those people who would like to spend 30 minutes going through their financial picture with a counselor, a CAPTRUST PAS representative will deliver a Retirement Blueprint, which is a plan for all your long-term financial needs. captrustadvice.com: On this site, you can schedule appointments at your convenience to speak to a CAPTRUST PAS representative; attend webinars, access educational information, and use calculators and tools. Watch for an announcing when CAPTRUST will be visiting your location to conduct in-person meetings. In the meantime, you may visit their website to schedule an appointment or call them if you have any questions. captrustadvice.com Schedule an appointment Call with questions or for assistance. captrust.com Learn more about CAPTRUST. Throughout the time of this transition, TIAA and GuideStone will also be available to meet with Plan Participants. TIAA representatives will be on campus each week through January 17, 2019, for one-on-one counseling appointments. Go to TIAA.org/schedulenow to make an appointment. Additional sessions beyond January are currently being planned. TIAA and its affiliates, and CAPTRUST and its affiliates, are not affiliated with or in any way related to each other. TIAA acts as a recordkeeper for the Plan and, in that capacity, is not a fiduciary of the Plan. TIAA is not responsible for the advice and education provided by CAPTRUST. TIAA also provides advice and education to Plan Participants and when it provides advice TIAA takes fiduciary responsibility for that advice. CAPTRUST is not responsible for the advice and education provided by TIAA. Neither the Committee nor the University are responsible for any advice provided by either TIAA or CAPTRUST. 10 Questions? Call or visit TIAA.org/Baylor

13 New Plan TIAA Brokerage Account Option Access thousands of mutual funds and many well-known fund families beyond the core investment options. 1 This new self-directed brokerage option is in addition to the other options available in the new tiered investment lineup. It is for Plan Participants with specialized investing needs, or those looking for more choice to direct retirement investments across markets and asset classes outside of the Plan s core lineup. With your self-directed brokerage account, you can independently research and select from thousands of mutual funds. Before investing in a brokerage account, consider contacting TIAA to learn more. Learn more about a brokerage account 2 by contacting TIAA at , weekdays, 7 a.m. to 6 p.m. (CT). It s important to understand that the Committee will not monitor the performance of any fund invested in any Participant s TIAA Brokerage account, and investment advice is not available from CAPTRUST or TIAA for brokerage account assets. Plan Participants will bear the risk of investing through the TIAA Brokerage account. The Committee recommends that you exercise caution and consider seeking outside professional guidance when investing through a TIAA Brokerage account. 2 Please note that you may only invest up to 90% of your Plan account balance in a TIAA Brokerage account. 1 The brokerage account option is available to Plan Participants who maintain both a legitimate U.S. residential address and a legitimate U.S. mailing address. Certain securities may not be suitable for all investors. Securities are subject to investment risk, including possible loss of the principal amount invested. 2 By opening a brokerage account, you will be charged a commission only on applicable transactions and other account-related fees in accordance with the TIAA Commission and Fee Schedule. Please visit TIAA.org/SDA_CAA. Other fees and expenses apply to a continued investment in the funds and are described in the fund s current prospectus. Questions? Call or visit TIAA.org/Baylor 11

14 Letting Professionals Manage Your Plan Account for You New Retirement Plan Portfolio Manager service from TIAA Also known as a managed account, this convenient optional service provides investment advice based on your goals and needs, and a systematic, disciplined approach to managing your Plan account. Your Plan portfolio account is reviewed each quarter and adjusted as needed to help keep it on track with your retirement goals. Features include: Customized advice: Based on your income needs in retirement, TIAA will help you decide how much to save, an appropriate asset mix and specific investment options. Ongoing monitoring and portfolio adjustments: TIAA will make adjustments based on market conditions and other factors that may affect your Plan s investments. These adjustments include quarterly asset reallocation and rebalancing. Modify direction as needed: You can update your preferences online 24/7 or through your advisor and TIAA will fine-tune recommendations. Your managed account financial plan becomes increasingly personalized as you add details to your profile. Quarterly statements: Shows adjustments made to your Plan account so you can see your current investment mix. How much does it cost? If you enroll in this service, an annual fee of.30% will be deducted from your Plan account on a quarterly basis. The fee is based on an average daily balance of your enrolled Plan account during the quarter. For example: If you had an average balance of $10,000 in your Plan account, the annual fee would be $10,000 x.003 = $30, a quarterly fee of $7.50 which would be deducted on the first day of the subsequent quarter. Additional information will be available after January 18, Visit TIAA.org/Baylor. Using the TIAA Retirement Plan Portfolio Manager Service is as easy as: STEP ONE STEP TWO STEP THREE STEP FOUR Setting your monthly retirement income goal. Adding details to your profile like how much you ve already saved. Finding out how much you should save each month to reach your goal. Selecting your strategy and reallocating your portfolio. 12 Questions? Call or visit TIAA.org/Baylor

15 New Tiered Investment Options Specifics New investment options The new lineup offers you flexibility to create a diversified retirement portfolio in your Plan account. 1 To learn more about any of the investment options, including expenses, you can go to TIAA.org and enter the ticker symbol in the site s search feature. Beginning October 26, 2018, you will also be able to view the updated investment lineup and details online at TIAA.org/Baylor. Tier 1: Allocation Tier Tier 2: Active Tier Tier 3: Passive Tier Birth Year Investment Option Ticker Symbol N/A CREF Social Choice Account R2 (variable annuity) QCSCPX N/A CREF Stock Account R2 (variable annuity) QCSTPX Before 1948 Vanguard Target Retirement Income Institutional 2 VITRX Vanguard Target Retirement 2015 Institutional 2 VITVX Vanguard Target Retirement 2020 Institutional 2 VITWX Vanguard Target Retirement 2025 Institutional 2 VRIVX Vanguard Target Retirement 2030 Institutional 2 VTTWX Vanguard Target Retirement 2035 Institutional 2 VITFX Vanguard Target Retirement 2040 Institutional 2 VIRSX Vanguard Target Retirement 2045 Institutional 2 VITLX Vanguard Target Retirement 2050 Institutional 2 VTRLX Vanguard Target Retirement 2055 Institutional 2 VIVLX Vanguard Target Retirement 2060 Institutional 2 VILVX 1998 Present Vanguard Target Retirement 2065 Institutional 2 VSXFX Investment Option Ticker Symbol American Funds EuroPacific Growth R6 RERGX Carillon Eagle Mid-Cap Growth R6 HRAUX Goldman Sachs Small-Cap Growth Insights R6 GINUX MFS Mid-Cap Value R6 MVCKX MFS Value R6 MEIKX Prudential Total Return Bond Q PTRQX T Rowe Price Blue Chip Growth I TBCIX TIAA Real Estate (variable annuity) QREARX TIAA Traditional Annuity (guaranteed annuity) 3 N/A Vanguard International Growth Admiral VWILX Vanguard Treasury Money Market Investor VUSXX Victory Integrity Small-Cap Value R6 MVSSX Investment Option Ticker Symbol Vanguard Developed Markets Index Admiral VTMGX Vanguard Emerging Mkts Stock Index Admiral VEMAX Vanguard FTSE All World ex-us Index Admiral VFWAX Vanguard FTSE Social Index Investor VFTSX Vanguard Institutional Index I VINIX Vanguard Mid-Cap Index Institutional VMCIX Vanguard Real Estate Index Admiral VGSLX Vanguard Small-Cap Index Admiral VSMAX Vanguard Total Bond Market Index I VBTIX continued Questions? Call or visit TIAA.org/Baylor 13

16 New Tiered Investment Options Specifics Tier 4: Christian- Screened Tier Tier 5: Brokerage Account Investment Option GuideStone Funds Aggressive Allocation Institutional GuideStone Funds Balanced Allocation Institutional GuideStone Funds Conservative Allocation Institutional GuideStone Funds Defensive Market Strategies Institutional GuideStone Funds Emerging Markets Equity Institutional GuideStone Funds Equity Index Institutional GuideStone Funds Extended-Duration Bond Institutional GuideStone Funds Global Bond Institutional GuideStone Funds Global Real Estate Securities Institutional GuideStone Funds Growth Allocation Institutional GuideStone Funds Growth Equity Institutional GuideStone Funds International Equity Index Institutional GuideStone Funds International Equity Institutional GuideStone Funds Low-Duration Bond Institutional GuideStone Funds Medium-Duration Bond Institutional GuideStone Funds Money Market Institutional GuideStone Funds MyDestination 2015 Institutional 4 GuideStone Funds MyDestination 2025 Institutional 4 GuideStone Funds MyDestination 2035 Institutional 4 GuideStone Funds MyDestination 2045 Institutional 4 GuideStone Funds MyDestination 2055 Institutional 4 GuideStone Funds Small-Cap Equity Institutional GuideStone Funds Strategic Alternatives Institutional GuideStone Funds Value Equity Institutional See TIAA Brokerage on page 11. Ticker Symbol GAGYX GBAYX GCAYX GDMYX GEMYX GEQYX GEDYX GGBEX GREYX GGRYX GGEYX GIIYX GIEYX GLDYX GMDYX GMYXX GMTYX GMWYX GMHYX GMYYX GMGYX GSCYX GFSYX GVEYX Investment products may be subject to market and other risk factors. See the prospectus by visiting TIAA.org and entering a ticker symbol in the site s search feature. 1 Diversification is a technique to help reduce risk. It is not guaranteed to protect against loss. 2, 4 Target-date funds share the risks associated with the types of securities held by each of the underlying funds in which they invest. In addition to the fees and expenses associated with the target-date funds, there is exposure to the fees and expenses associated with the underlying mutual funds. As with all mutual funds, the principal value of a target-date fund isn t guaranteed at any time, even at the target date. The target date represents an approximate date when investors may choose to begin withdrawing from the fund. 3 TIAA Traditional Annuity is a guaranteed insurance contract and not an investment for federal securities law purposes. Any guarantees under annuities issued by TIAA are subject to TIAA s claims-paying ability. Interest credited includes a guaranteed rate, plus additional amounts as may be established by the TIAA Board of Trustees. Such additional amounts, when declared, remain in effect for the declaration year, which begins each March 1 for accumulating annuities and each January 1 for payout annuities. Additional amounts are not guaranteed for periods other than the period for which they were declared. 14 Questions? Call or visit TIAA.org/Baylor

17 New Plan Investment Lineup, Expenses and Credits Listed in the table are the investment options for the Plan and any associated Revenue Sharing or Plan Services Expense Offset amounts. Account or Fund/Share Class Ticker Gross Expense Ratio 1 (%) Net Expense Ratio 1 (%) Revenue Sharing/ Plan Services Expense Offset 2 (%) American Funds EuroPacific Growth R6 RERGX Carillon Eagle Mid-Cap Growth R6 HRAUX CREF Social Choice Account R2 (variable annuity) QCSCPX CREF Stock Account R2 (variable annuity) QCSTPX Goldman Sachs Small-Cap Growth Insights R6 GINUX GuideStone Funds Aggressive Allocation Institutional GAGYX GuideStone Funds Balanced Allocation Institutional GBAYX GuideStone Funds Conservative Allocation Institutional GCAYX GuideStone Funds Defensive Market Strategies Institutional GDMYX GuideStone Funds Emerging Markets Equity Institutional GEMYX GuideStone Funds Equity Index Institutional GEQYX GuideStone Funds Extended-Duration Bond Institutional GEDYX GuideStone Funds Global Bond Institutional GGBEX GuideStone Funds Global Real Estate Securities Institutional GREYX GuideStone Funds Growth Allocation Institutional GGRYX GuideStone Funds Growth Equity Institutional GGEYX GuideStone Funds International Equity Index Institutional GIIYX GuideStone Funds International Equity Institutional GIEYX GuideStone Funds Low-Duration Bond Institutional GLDYX GuideStone Funds Medium-Duration Bond Institutional GMDYX GuideStone Funds Money Market Institutional GMYXX GuideStone Funds MyDestination 2015 Institutional GMTYX GuideStone Funds MyDestination 2025 Institutional GMWYX GuideStone Funds MyDestination 2035 Institutional GMHYX GuideStone Funds MyDestination 2045 Institutional GMYYX GuideStone Funds MyDestination 2055 Institutional GMGYX GuideStone Funds Small-Cap Equity Institutional GSCYX GuideStone Funds Strategic Alternatives Institutional GFSYX GuideStone Funds Value Equity Institutional GVEYX MFS Mid-Cap Value R6 MVCKX MFS Value R6 MEIKX Prudential Total Return Bond Q PTRQX T. Rowe Price Blue Chip Growth I TBCIX TIAA Real Estate (variable annuity) QREARX TIAA Traditional Annuity (guaranteed annuity) 3 N/A Vanguard Developed Markets Index Admiral VTMGX continued Questions? Call or visit TIAA.org/Baylor 15

18 New Plan Investment Lineup, Expenses and Credits Account or Fund/Share Class Ticker Gross Expense Ratio 1 (%) Net Expense Ratio 1 (%) Revenue Sharing/ Plan Services Expense Offset 2 (%) Vanguard Emerging Markets Stock Index Admiral VEMAX Vanguard FTSE All World ex-us Index Admiral VFWAX Vanguard FTSE Social Index Investor VFTSX Vanguard Institutional Index I VINIX Vanguard International Growth Admiral VWILX Vanguard Mid-Cap Index Institutional VMCIX Vanguard Real Estate Index Admiral VGSLX Vanguard Small-Cap Index Admiral VSMAX Vanguard Target Retirement 2015 Institutional VITVX Vanguard Target Retirement 2020 Institutional VITWX Vanguard Target Retirement 2025 Institutional VRIVX Vanguard Target Retirement 2030 Institutional VTTWX Vanguard Target Retirement 2035 Institutional VITFX Vanguard Target Retirement 2040 Institutional VIRSX Vanguard Target Retirement 2045 Institutional VITLX Vanguard Target Retirement 2050 Institutional VTRLX Vanguard Target Retirement 2055 Institutional VIVLX Vanguard Target Retirement 2060 Institutional VILVX Vanguard Target Retirement 2065 Institutional VSXFX Vanguard Target Retirement Income Institutional VITRX Vanguard Total Bond Market Index I VBTIX Vanguard Treasury Money Market Investor VUSXX Victory Integrity Small-Cap Value R6 MVSSX All data as of June 30, Investment products may be subject to market and other risk factors. See the prospectus by visiting TIAA.org and entering a ticker symbol in the site s search feature. 1 Gross expense ratio includes all of an investment s expenses. Net expense ratio takes into account any investment fee waivers and expense reductions, giving an indication of what is currently being charged. 2 Revenue sharing describes the practice of an investment manager, distribution company or transfer agent paying a portion of a mutual fund s expense ratio from their revenues to a plan recordkeeper for keeping track of the ownership of the mutual fund s shares and other shareholder services. Any revenue shared by an investment provider is included as part of each investment s expense ratio (it is not in addition to the published expense ratios). Please note that TIAA Traditional, TIAA Real Estate Account and all CREF Annuity accounts do not have revenue sharing. Rather, TIAA may provide a plan services expense offset that may be applied to the plan s administrative and recordkeeping costs. A plan services expense offset is a reduction to the TIAA recordkeeping fee that TIAA and your plan sponsor agreed to for TIAA s recordkeeping services. The reduction may be available when TIAA and CREF products are offered through the plan. 3 TIAA Traditional Annuity is a guaranteed insurance contract and is not an investment for federal securities law purposes. Any guarantees under annuities issued by TIAA are subject to TIAA s claims-paying ability. Interest credited includes a guaranteed rate, plus additional amounts as may be established by the TIAA Board of Trustees. Such additional amounts, when declared, remain in effect for the declaration year which begins each March 1 for accumulating annuities and each January 1 for payout annuities. Additional amounts are not guaranteed for periods other than the period for which they were declared. 16 Questions? Call or visit TIAA.org/Baylor

19 Understanding Your Plan Fees and Expenses The Committee continually strives to keep the Plan current and aligned with industry best practices. As part of this ongoing process, the Committee has decided to move the Plan from a traditional fee structure to an updated, more transparent arrangement. Participants in the Plan have always paid for different categories of Plan-related costs: recordkeeping fees (paid to the Plan s recordkeepers, such as TIAA), and investment expenses (taken out of individual investments by the managers of the funds in which accounts of the Plan Participants were invested). In the past, Plan Participants, other than those with investments at Vanguard, did not see separate charges for these Plan-related costs on their quarterly statements, as such costs were netted against Plan Participants investment balances. The recordkeeping fees were paid out of the investment expenses charged by the providers of the funds in which the Plan Participants were invested, and were based on the total assets in each Participant s Plan account. Going forward, the Plan recordkeeping fees will be explicitly assessed on a fixed per-participant basis and will be reported on your quarterly statements from TIAA. The investment expenses charged by the managers of the funds in the investment lineup are listed under New investment lineup, expenses and credits on pages Plan recordkeeping fees Going forward, any recordkeeping fees will be deducted proportionately from each investment in your Plan account on the last business day of each quarter and identified as the TIAA Plan Servicing Fee on your quarterly Plan statement. Beginning the first quarter of 2019, TIAA will assess a fixed per-participant recordkeeping fee instead of the current assetbased fee. The new per-participant recordkeeping fee will be $70 per year. The fee will be assessed at $17.50 per quarter, beginning March 29, Investment-specific expenses Each of the Plan s investment options has an expense charge for investment management and associated services. These fees are measured by what is called an expense ratio. Expense ratios are reported as a percentage of assets. For example, an expense ratio for a particular fund of 0.5% means a Plan Participant pays $5 annually for every $1,000 in assets invested in that fund. Knowing the expense ratio charged by each fund helps you understand the cost associated with your investments. In some cases, an investment provider may pay a portion of an investment s expense ratio to TIAA, the recordkeeper, as a means of offsetting the cost of plan administration. This practice is called revenue sharing. 1 In the past, the Plan used revenue sharing to offset recordkeeping fees. Going forward, all revenue sharing generated by your investments will be credited back to your Plan account. If you are invested in funds that provide revenue sharing, these credits will be listed on your quarterly statement as Plan Servicing Credits. You will see them on your statements, beginning on March 29, continued 1 Revenue sharing describes the practice by which investment providers contribute to the cost of Plan administration. Please note that TIAA Traditional and TIAA Real Estate accounts do not have an explicit revenue share. Instead, TIAA offers a Plan Services Expense Offset that is a credit applied to the Plan recordkeeping and administrative fee to offset administrative and recordkeeping costs. A portion of the Plan s administrative and recordkeeping costs are returned back to you. Questions? Call or visit TIAA.org/Baylor 17

20 Understanding Your Plan Fees and Expenses Brokerage fee Plan Participants with self-directed TIAA Brokerage accounts are charged a commission on all transactions and other accountrelated fees in accordance with the TIAA Commission and Fee Schedule. Please visit TIAA.org/SDA_CAA for a complete list of commissions and fees. Other fees and expenses apply to a continued investment in the funds and are described in the current prospectus for each fund. Loan issuance fee This one-time fee is deducted directly from your account at the time a Plan loan is issued. The costs of these loans are $75 per loan for a general purpose loan and $125 per loan for a residential loan. Putting fees in perspective Fees are important, but should be just one factor in your decision-making process. In addition to fees and expenses, you should be sure your Plan investment choices reflect your personal risk tolerance, the time frame until your retirement and the appropriate allocation to suit your investment needs. This table below details how these fees will be applied to your Plan account and underlying contracts each quarter. If you only have RC/RCP contracts The quarterly Plan recordkeeping fee will be deducted directly from your account. If your Plan assets are invested in revenue sharing investments, those revenue sharing amounts will be credited back to your account at the end of each quarter. 1,2 If you only have an existing TIAA legacy contract(s) The quarterly Plan recordkeeping fee will be deducted from the revenue sharing generated by your investments. If the revenue sharing amount your Plan investments generate is equal to or less than the quarterly plan servicing fee, no revenue sharing will be credited back to your account. 2 If you have both RC/RCP contracts and existing TIAA legacy contract(s) The quarterly Plan recordkeeping fee will be deducted first from your RC/RCP contracts, and if any unpaid balance remains, TIAA will collect the remaining balance from the revenue sharing generated by your existing legacy TIAA contract(s). Any remaining revenue sharing amount will be credited back to your account at the end of each quarter. 2 If you invest solely through TIAA Brokerage and don t maintain a balance in an RC contract Going forward, you must keep a balance in your RC contract to allow TIAA to assess recordkeeping fees. Therefore, you may only invest up to 90% of your Plan account balance in a TIAA Brokerage account. 1 If, after looking at the balances in your RC/RCP account(s) and any revenue sharing generated by legacy contracts, as described in the chart, there remains an unpaid balance of the plan servicing fee quarterly amount, the unpaid balance will be waived and will not be assessed against your account in any subsequent quarterly cycle. 2 See pages for the revenue share attributable to each Plan investment option. 18 Questions? Call or visit TIAA.org/Baylor

21 For All Plan Participants Changes to the Plan s investment lineup The Committee is taking this opportunity to change the investment options available under the Plan. The new investments, carefully selected by the Committee for the Plan Participants, may give you the ability to create a diversified retirement portfolio in the Plan that matches your investment goals and preferences. See pages 4-6 for more details about these changes. The Committee has decided to: Change the Plan s default investment option. The new default option will be a Vanguard target-date fund. Each target-date fund provides a diversified retirement portfolio in a single fund. For more information on target-date funds, see pages 9, 26 and 27. Remove several investment options from the lineup and replace them with new options. Refer to the enclosed insert, Baylor Retirement Plan Asset Transfer Charts, for details. Restrict several investment options that will no longer accept new contributions. Future contributions will be directed to replacement options. Refer to the enclosed insert, Baylor Retirement Plan Asset Transfer Charts, for details. Choosing different investments Beginning October 26, 2018, you may change the way future contributions will be invested before the new investment menu takes effect. If you do not provide investment instructions during this period, you can always make changes after the new menu is in effect next year. Action steps Get advice. Has it been a while since you reviewed your investment mix under the Plan? You re eligible to receive Plan investment advice at no additional cost. It s all about helping you retire on your terms. Select investments. Once your new TIAA Plan account is issued, you can update your investment choices for future contributions. You will have to make elections for each TIAA contract you have one for employer contributions (RC contract) and one for your employee contributions (RCP contract). Check your beneficiary designation. TIAA will copy any beneficiary information you currently have on file from Vanguard or on your current TIAA account to your new TIAA account. Beneficiary designations with GuideStone and all other providers will be set to Estate. Since it s important to keep your beneficiary designation up to date, please confirm your choice(s). You will have to make elections for each TIAA contract you have one for employer contributions (RC contract) and one for your employee contributions (RCP contract). Attend a seminar. Find out about the Plan changes and steps you may wish to take. See pages 24 and 25. Visit the information desk. Get quick answers about your retirement account. Stop by to speak with a knowledgeable TIAA financial consultant. Questions? Call or visit TIAA.org/Baylor 19

22 For Plan Participants with TIAA Investments Your Plan account and new contracts On or about October 26, 2018, new Retirement Choice (RC)/ Retirement Choice Plus (RCP) contracts will be issued for any Plan Participant who is currently contributing to or holds a balance in TIAA mutual funds. RC contracts will be issued to hold future employer contributions, while RCP contracts will hold employee contributions. Both contracts will accept contributions starting January 18, Once issued the new contract(s), you will receive an enrollment confirmation from TIAA that will provide additional information about your new account(s). Unless you make a change, your current TIAA beneficiary designation(s) will be applied to your new account(s). How your future contributions and current account balances will be affected Starting January 18, 2019, your future contributions will be directed to your new TIAA account and the new investment options. During the week of February 4, 2019, your current TIAA mutual fund balance(s) are scheduled to be transferred to your new TIAA RC and/or RCP account(s) following the transfer strategy noted in the enclosed Baylor Retirement Plan Asset Transfer Charts insert. Your contributions and balance(s) will be invested as shown in the accompanying insert. The Committee selected investment options that are similar to those in the prior lineup. Any balance(s) you have in any existing TIAA annuities will remain in your existing account(s), although no new contributions, rollovers or transfers may be made to these accounts. You can continue to transfer balances among the available TIAA annuity options. If you would like to transfer balances to your new account, contact a TIAA financial consultant for more information. Your beneficiary will be set as follows: If you have assets with TIAA, the beneficiary designation on file with TIAA will be used. If you have Plan assets with another provider, the TIAA beneficiary designation will override all other current designations with those other Plan providers. You may change this direction or update your beneficiary beginning October 26, 2018, by logging in to your account at TIAA.org/Baylor. At a glance On or about October 26, 2018, TIAA will issue new Retirement Choice and/or Retirement Choice Plus contracts. Starting on January 18, 2019, contributions will be directed to your new TIAA Plan account and the new investment options. On or about the week of February 4, 2019, your current mutual fund balances will transfer to your new TIAA account. Contributions and balances will be invested as shown in the enclosed insert Baylor Retirement Plan Asset Transfer Charts. Balances in existing TIAA annuities will remain in those accounts and are closed to new contributions, rollovers or transfers. Be sure to carefully review the rates and benefits of TIAA Traditional in existing and new Retirement Choice and Retirement Choice Plus contracts before making a change. Your current TIAA beneficiary designation(s) will be applied to your new TIAA account. continued If you are contributing to more than one provider In the event you do not make new investment elections, your future contributions starting January 18, 2019, will be directed to your new RC/RCP account(s) and invested in the Vanguard target-date fund that corresponds to the year you turn 65 as shown in the chart on page 10 of the enclosed insert, Baylor Retirement Plan Asset Transfer Charts. For example, if you will turn 65 in 2044, contributions will be directed to the Vanguard Institutional Target Retirement 2045 Fund. 20 Questions? Call or visit TIAA.org/Baylor

23 For Plan Participants with TIAA Investments Understanding your new account(s) There are a number of differences between your TIAA Retirement Annuity (RA), TIAA Supplemental Retirement Annuity (SRA), TIAA Group Retirement Annuity (GRA) and TIAA Group Supplemental Retirement Annuity (GSRA) contracts and the new RC and RCP contracts. The most significant differences relate to the TIAA Traditional Annuity and are highlighted below. If you re thinking about transferring some or all of your account balances to your new RC/RCP contracts, make sure you understand the differences before you initiate a transfer. Under the RC and RCP contracts, TIAA Traditional has a rate guarantee that is between 1% and 3%, determined annually, which may be lower than the guaranteed rate in your current contract. 1 The adjustable rate guarantee in the new contracts allows TIAA to be more responsive to the prevailing interest rate environment, and provides the potential for higher credited rates through the crediting of additional amounts. 2 The TIAA traditional rate for all contracts can be obtained online at TIAA.org/performance. When TIAA Traditional Annuity balances are transferred out of an existing contract, you risk giving up a favorable crediting rate(s) on balances in such contracts. TIAA Traditional Annuity balances in the RC contract can be liquidated within a shorter time frame than under the existing TIAA RA and TIAA GRA contracts. Moving money from an existing contract to a new contract is a permanent decision. Money cannot be moved back into the legacy TIAA contracts. For details, see the contract comparison chart located at TIAA.org/Baylor. If you have questions, call If you have any recurring transfers or rollovers in your current TIAA contracts, you will need to provide updated investment instructions. If you do not provide instructions, future transfers or rollovers may be automatically redirected to your new contracts and the default investment option for the Plan. Please call TIAA at the number above to provide updated instructions or to learn more. 1 Guarantees are subject to TIAA s claims-paying ability. 2 TIAA s Board of Trustees declares whether additional amounts will be paid in March of each year. Additional amounts are not guaranteed. Such additional amounts, when declared, remain in effect for the declaration year which begins each March 1 for accumulating annuities and January 1 for payout annuities. Additional amounts are not guaranteed for periods other than the period for which they were declared. Questions? Call or visit TIAA.org/Baylor 21

24 For Plan Participants with Vanguard and GuideStone Investments Enrollment You will be enrolled in a new Plan account at TIAA on or about October 26, 2018, and sent an enrollment confirmation. Retirement Choice (RC) contracts will be issued to hold future employer contributions, while Retirement Choice Plus (RCP) contracts will hold employee contributions. Both contracts will accept contributions starting January 18, Beneficiary Beneficiary designations will be transferred from Vanguard. Plan Participants with GuideStone investments will have their beneficiary set to Estate. Please be sure to update your beneficiary information as soon as you receive confirmation of your new TIAA contract being issued. You may do this online at TIAA.org/Baylor or by calling TIAA at Systematic transfers. This transition may impact any systematic transfer instructions you have on file with the Plan. If applicable, existing scheduled transfers will be directed to the Plan s default investment option in your new contract unless you contact TIAA to provide new instructions. If you are contributing to more than one provider In the event you do not make investment elections in your new TIAA account, your future contributions starting January 18, 2019, will be directed to your new RC and/or RCP accounts and invested in the Vanguard target-date fund that corresponds to the year you turn 65 as shown in the chart on page 10 of the enclosed insert, Baylor Retirement Plan Asset Transfer Charts. For example, if you will turn 65 in 2044, contributions will be directed to the Vanguard Institutional Target Retirement 2045 Fund. Your beneficiary will be set as follows: If you have Plan assets with TIAA, the beneficiary designation on file with TIAA will be used. If you do not have Plan assets with TIAA but do have Plan assets with Vanguard, the Vanguard beneficiary designation will be used. Beneficiary designations at GuideStone do not transfer. You may change this direction and update your beneficiary beginning October 26, 2018, by logging in to your account at TIAA.org/Baylor. How your future contributions and current account balances will be affected Starting January 18, 2019, your contributions to the Plan will be directed to your new TIAA account and the new investment options. On or about January 30, 2019, your current Plan account balance(s) at Vanguard and GuideStone are scheduled to be transferred to your new TIAA account. Please note: The date of the transfer depends on the accurate, timely transfer of data and assets from Vanguard and GuideStone to TIAA. If this does not occur, transfers could be delayed. Your contributions and balances will be transferred as shown in the enclosed insert, Baylor Retirement Plan Asset Transfer Charts. The Committee selected investment options that are similar to those in the prior lineup. GuideStone Participants only: There will be no change to the GuideStone investments available under the plan, with the exception of the GuideStone Financial Resources Capital Preservation Fund, which will no longer be available under the Plan. At a glance On or about October 26, 2018, TIAA will issue new Retirement Choice and/or Retirement Choice Plus contracts for your Plan. Starting on January 18, 2019, contributions will be directed to your new TIAA account and the new investment options. On or about January 30, 2019, any current balances with Vanguard and GuideStone will transfer to your new TIAA account(s). Contributions and balances will be invested as shown in the enclosed insert, Baylor Retirement Plan Asset Transfer Charts. Vanguard beneficiary designations transfer to TIAA. GuideStone beneficiary designations will be set to Estate. Review and update your beneficiary designations as soon as you receive your TIAA account(s) confirmation. If you have systematic transfers with these providers, provide TIAA with new instructions for these payments, if necessary. 22 Questions? Call or visit TIAA.org/Baylor

25 For Plan Participants with Existing Investments with Other Providers Including Voya Financial (formerly ING), American Funds Service Company/ Capital Bank and Trust, Ameriprise, Prudential Annuities Life Assurance Corp., Travelers/MetLife, VALIC Enrollment You will be enrolled in a new TIAA account on October 26, 2018, and sent an enrollment confirmation. Retirement Choice (RC) contracts will be issued to hold future employer contributions, while Retirement Choice Plus (RCP) contracts will hold employee contributions. Both contracts will accept contributions starting January 18, Beneficiary Your beneficiary designation will be set to Estate. Please be sure to update your beneficiary information as soon as you receive confirmation of your new TIAA contracts being issued. You may do this online at TIAA.org/Baylor or by calling TIAA. How your future contributions and current account balances will be affected In the event you do not make investment elections in your new TIAA account, starting January 18, 2019, your future contributions will be directed to such account and invested in the Vanguard target-date fund that corresponds to the year you turn 65 as shown on page 10 in the enclosed insert Baylor Retirement Plan Asset Transfer Charts. For example, if you will turn 65 in 2044, contributions will be directed to the Vanguard Institutional Target Retirement 2045 Fund. Any account balances you have with the six providers mentioned above will remain in your existing accounts with such providers. If you wish to transfer these balances to TIAA, you may do so by contacting them directly at At a glance On or about October 26, 2018, TIAA will issue new Retirement Choice and/or Retirement Choice Plus contracts. Unless you direct otherwise, starting on January 18, 2019, your contributions will be directed to your new TIAA account and invested in the Vanguard target-date fund that corresponds to the year you turn 65, as shown in the enclosed insert, Baylor Retirement Plan Asset Transfer Charts. Your beneficiary designation will be set to Estate. Review and update your beneficiary information as soon as you receive your TIAA account confirmation. Unless you direct otherwise, your existing balances with the six providers named on this page will remain in your existing accounts. Questions? Call or visit TIAA.org/Baylor 23

26 On-site Events Real-time answers to your questions Seminars Consider attending a seminar presented by a TIAA financial consultant to learn more about the changes to the Baylor Retirement Plan. DATE TIME LOCATION Wednesday, October 24, 2018 Lunch 12 noon 1 p.m. BSB E234 Thursday, October 25, 2018 Morning 10 a.m. 11 a.m. Afternoon 3 p.m. 4 p.m. Jones Library 200 (Session for Libraries and ITS) BSB E234 Friday, October 26, 2018 Morning 10 a.m. 11 a.m. Webinar* Tuesday, October 30, 2018 Lunch 12 noon 1 p.m. Evening 5:30 p.m. 6:30 p.m. Jones Library 200 (Session for Libraries and ITS) BSB E234 Wednesday, October 31, 2018 Lunch 12 noon 1 p.m. BSB E234 Thursday, November 1, 2018 Afternoon 3:30 p.m. 4:30 p.m. LHSON 403.AB (Dallas campus) Tuesday, November 6, 2018 Evening 5:30 p.m. 6:30 p.m. BSB E234 Wednesday, November 7, 2018 Lunch 12 noon 1 p.m. BSB E234 Thursday, November 8, 2018 Evening 5:30 p.m. 6:30 p.m. Mayborn Museum Studies Classroom 1701 Monday, November 12, 2018 Afternoon 2 p.m. 3 p.m. Webinar* Tuesday, November 13, 2018 Evening 5:30 p.m. 6:30 p.m. BSB E234 Wednesday, November 14, 2018 Lunch 12 noon 1 p.m. BSB E234 Thursday, November 15, 2018 Evening 5:30 p.m. 6:30 p.m. Mayborn Museum Studies Classroom 1701 Tuesday, November 27, 2018 Lunch 12 noon 1 p.m. BSB E234 Wednesday, November 28, 2018 Morning 10 a.m. 11 a.m. Afternoon 1 p.m. 2:30 p.m. Jones Library 200 (Session for Libraries and ITS) Pat Neff 300 Conference Room Thursday, November 29, 2018 Lunch 11:30 a.m. 1 p.m. BSB E234 Tuesday, December 4, 2018 Lunch 12 noon 1 p.m. School of Social Work, Rooms 320/1 Wednesday, December 5, 2018 Lunch 11:30 a.m. 1 p.m. BSB E234 Thursday, December 6, 2018 Lunch 11:30 a.m. 1 p.m. Student Union Building Cowden Room Tuesday, December 11, 2018 Lunch 12 noon 1 p.m. BSB E234 Wednesday, December 12, 2018 Lunch 11:30 a.m. 1 p.m. Student Union Building Cowden Room Thursday, December 13, 2018 Lunch 12 noon 1:30 p.m. Evening 5:30 p.m. 7 p.m. Foster 428 Friday, December 14, 2018 Morning 10 a.m. 11 a.m. Webinar* Tuesday, December 18, 2018 Lunch 12 noon 1 p.m. BSB E234 Wednesday, December 19, 2018 Afternoon 2 p.m. 3 p.m. HR Training Room continued 24 Questions? Call or visit TIAA.org/Baylor

27 On-site Events DATE TIME LOCATION Thursday, December 20, 2018 Lunch 11:30 a.m. 1 p.m. BRIC Symposium 2160 Tuesday, January 8, 2019 Lunch 11:30 a.m. 1 p.m. BSB E234 Wednesday, January 9, 2019 Lunch 12 noon 1 p.m. HR Training Room Thursday, January 10, 2019 Lunch 12 noon 1:30 p.m. Evening 5:30 p.m. 7 p.m. Foster 428 Friday, January 11, 2019 Afternoon 2 p.m. 3 p.m. Webinar* Tuesday, January 15, 2019 Lunch 11:30 a.m. 1 p.m. Student Union Building Cowden Room Wednesday, January 16, 2019 Lunch 11:30 a.m. 1 p.m. BSB E234 Thursday, January 17, 2019 Lunch 11:30 a.m. 1 p.m. Student Union Building Cowden Room Information desk Have just one or two questions to ask? Consider stopping by the information desk to speak with a TIAA representative one hour before and one hour after each live session listed above. TIAA financial consultants will be on site throughout this time to conduct one-on-one appointments to review your new account and help you understand how these changes will affect you personally. To schedule an appointment, go to TIAA.org/schedulenow. * Webinar instructions can be obtained by visiting baylor.edu/hr or by contacting Baylor Human Resources at or askhr@baylor.edu. You may also access this information and the full schedule at TIAA.org/Baylor. Questions? Call or visit TIAA.org/Baylor 25

28 Q&A 1. Why is the Committee updating the Plan? The Committee, as part of its ongoing commitment to providing you with competitive retirement benefits, recently conducted a review of the Plan. As a result of this review, and a related bidding process, the Committee selected TIAA as the single provider for administrative recordkeeping services because TIAA offered the best overall value for the Plan. The resulting changes are intended to give you the investments, services and tools you need to pursue your retirement savings goals. 2. How can I learn about the new investment options? A list of the new investment options is included in this guide. You can visit the dedicated Plan website at TIAA.org/ Baylor for additional information. 3. What if I would like help making investment choices? You can get personalized advice on the Plan s investment options from a CAPTRUST PAS representative. This service is available as part of your retirement program at no additional cost to you. To schedule a session with CAPTRUST, call or schedule online at captrustadvice.com. 4. What happens to my current outstanding loan, systematic withdrawal, TPA (transfer payout annuity), or required minimum distribution? You will receive separate communications if any actions are required on your part. 5. Will loans continue to be available? Yes, the Plan allows Participants to borrow against their retirement accounts. See details on page How do target-date funds work? Each target-date fund consists of underlying mutual funds that invest in a broad range of asset classes. The allocations and risk level depend on how many years remain until the fund s target date. To help reduce risk as the fund s target date approaches, the fund s mix of stocks, bonds and other types of investments is adjusted to a more conservative mix. To see a list of the target-date funds available in the Plan and corresponding birth years, please refer to the Baylor Retirement Plan Asset Transfer Charts insert. continued 1 Target-date funds share the risks associated with the types of securities held by each of the underlying funds in which they invest. In addition to the fees and expenses associated with the target-date funds, there is exposure to the fees and expenses associated with the underlying mutual funds 26 Questions? Call or visit TIAA.org/Baylor

29 Q&A 7. What else should I know about target-date funds? As with all mutual funds, the principal value of a target-date fund isn t guaranteed at any time and will fluctuate with market changes. The target date indicates when investors may choose to start making withdrawals. However, you are not required to withdraw your money at the target date. After the target date, some of your money may be merged into a fund with a more stable asset allocation. 1 A CAPTRUST PAS representative can help you decide whether a target-date fund is right for you. 8. I am currently contributing to TIAA. What happens to my current account balances and future contributions? Starting October 26, 2018, you can direct the investment of contributions made on or after January 18, 2019, to other options on the new investment menu. If no action is taken, the Committee has provided instructions to invest future contributions as reflected on the enclosed insert Baylor Retirement Plan Asset Transfer Charts, and your TIAA mutual fund balances will move to your new TIAA contract(s) during the week of February 4, Does it make sense to consolidate all of my retirement accounts? Some individuals might find it easier to manage their retirement money by working with only one provider. That said, transferring balances from other plans can sometimes trigger costs. Before consolidating outside retirement balances, contact the Baylor HR Service Center to see if you can transfer those balances directly to your TIAA Plan account. You should carefully consider all your options. For instance, you may be able to leave money with a prior provider, roll over money to an IRA, or cash out all or part of another account. Weigh the advantages and disadvantages of each option carefully, including investment options and services, fees and expenses, withdrawal options, required minimum distributions, tax treatment and your particular financial needs. You should seek the guidance of your financial professional and tax advisor before consolidating balances from other plans. continued Questions? Call or visit TIAA.org/Baylor 27

30 Q&A 10. Can I move money from an existing TIAA Plan account to a new one? Yes, but it s a move you ll want to weigh carefully. You may move money out of your existing TIAA contracts to a new contract, subject to any restrictions that apply to the investments. However, any assets that you move out of your existing contract(s) cannot be moved back. Assets in the TIAA Traditional Annuity deserves special attention. For instance, money moved out of TIAA Traditional in the existing contracts will no longer receive the 3% minimum guaranteed rate. In short, the pros and cons are different for every Plan Participant. To learn more about the TIAA Traditional Annuity, liquidity rules, and the differences between RC and RCP contracts, please see the contract comparison chart at TIAA.org/contractcomparison or contact TIAA at What if I am splitting my contributions among TIAA, Vanguard and GuideStone? In the event you do not make investment elections in your new TIAA account, and if you are contributing to more than one provider, your allocations starting January 18, 2019, will be directed to the new TIAA account and invested in the Vanguard target-date fund that corresponds to the year you turn 65 as shown on page 10 of the Baylor Retirement Plan Asset Transfer Charts insert. For example, if you will turn 65 in 2044, contributions will be directed to the Vanguard Institutional Target Retirement 2045 Fund. Your beneficiary designation will be set as follows: If you have assets with TIAA, the beneficiary designation on file with TIAA will be used. If you do not have assets with TIAA but do with Vanguard, the Vanguard beneficiary designation will be used. Beneficiary designations at GuideStone and any other provider do not transfer. You may change this direction and update your beneficiary designation beginning October 26, 2018, by logging in to your account at TIAA.org/Baylor. 12. What are annuities? Annuities are special types of insurance contracts. There are different types of annuities, but they are typically designed to give you the opportunity to help grow your money while you re working and provide you with the option to receive income for life when you retire. In fact, annuities are the only retirement products that can guarantee to pay you (or you and a spouse or partner) income for life. Guaranteed annuities (also known as fixed annuities): These annuities earn a minimum guaranteed interest rate on your contributions, plus the potential for additional amounts of interest. In retirement, guaranteed annuities can offer you income for life that will never fall below a certain guaranteed level and provide income that is guaranteed to last for your lifetime. 1 TIAA Traditional Annuity is an example of a guaranteed (fixed) annuity. Variable annuities: The assets in these contracts are invested in a variety of asset classes and account values will fluctuate based on the performance of the investments in the accounts. It is possible to lose money in variable annuities. In retirement, variable annuities can provide an income stream that is guaranteed to last for your lifetime, but the actual amount will rise or fall based on investment performance of the assets in the contract. CREF Stock is an example of a variable annuity. 13. What is different about the Christian-Screened Tier options? Persons committed to their Christian faith make decisions every day based on values and beliefs. So why would financial decisions be any different? One way you can do that is by choosing to invest in companies whose morals and values align with your own. Through the Christian-Screened Tier options, you will be able to access a full lineup of target-date, asset allocation, equity, fixed income, real asset and alternative/specialty funds that allow you to move with purpose toward your financial goals while also staying true to your personal values. 1 Guarantees are based on the claims-paying ability of the issuing company. 28 Questions? Call or visit TIAA.org/Baylor

31 About TIAA Providing strong support on the road to retirement no matter where you are today TIAA s purpose has remained constant since TIAA was established 100 years ago: We re here to help you save for and generate income during retirement. Over the years, we ve regularly enhanced the ways we deliver on our purpose. As an organization with deep roots among nonprofits in higher education, government, hospital/medical, research, religious institutions and K-12 TIAA is committed to continuous learning. And when we see opportunities to enhance our retirement plan services, we share them with the institutions we serve TIAA Teachers Insurance and Annuity Association of America created Questions? Call or visit TIAA.org/Baylor 29