Tax-Sheltered Annuity 403(b) Program University of Wisconsin May 6, 2016

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1 Annual Report Tax-Sheltered Annuity 403(b) Program University of Wisconsin May 6, 2016 Office of Human Resources and Workforce Diversity University of Wisconsin System Administration 780 Regent St., Suite 224 Madison, WI 53715

2 UNIVERSITY OF WISCONSIN TAX-SHELTERED ANNUITY 403(b) PROGRAM ANNUAL REPORT EXECUTIVE SUMMARY In, 9,393 University of Wisconsin employees contributed to the UW Tax-Sheltered Annuity (TSA) 403(b) Program slightly more than 27% of all employees who are eligible for the Wisconsin Retirement System (WRS). Although almost 31% of those between age 50 and 59 and more than 33% of those between 60 and 69 participate, those who begin to save for retirement too late may not be able to save enough to be adequately prepared. On average, participants contributed a healthy 10.6% of salary, although there were differences among groups of contributors. University staff contributed 9.1% of salary, whereas faculty, academic staff, and limited appointees contributed an average 10.2%, and those not in the Wisconsin Retirement System contributed 19.30% of salary. Contribution Patterns and Assets Contributions to the UW TSA Program increased substantially in, to over $73.2 million an increase of almost $3.8 million. In, Roth after-tax contributions made up over $5.02 million, or 6.85%, of the overall contributions up from 5.47% in 2014, 3.97% in 2013 and 2.62% in There were more than one million dollars of additional Roth deferrals in. In, TIAA-CREF received over $31.2 million in contributions in the UW plan, over 42.7% of the total contributions. Fidelity received the next-largest amount of contributions, slightly more than $26.2 million or 35.8% of contributions. T. Rowe Price received $9.5 million in contributions or roughly 13%. The two insurance companies, Ameriprise and Lincoln, together received 8.5% of contributions, down slightly from 8.6% in Accumulated assets rose slightly by approximately $65 million to $2.16 billion in from $2.095 in Asset Allocation The UW TSA Program offers a wide array of investment options. Most contributions go to a relatively small number of funds, but the variety ensures that employees are able to select the type of investment they want. In, the top ten funds accounted for approximately 31% of all contributions, and the top 50 funds for 65% of contributions. The top fund every year is the TIAA Traditional fixed annuity, which provides a guaranteed return of at least 3% every year; the number two spot every year goes to TIAA-CREF Stock fund. Fidelity Contrafund Class K came in third this year edging out CREF Social Choice. This year 19 of the top 50 funds are Target Retirement Date funds, diversified investments that grow more conservative as the participant gets closer to retirement. In, TSA participants slightly increased the amount of contributions to large-cap funds. Large-cap stock funds attracted 28.13% of current contributions compared to 25.89% in This is quite a shift from the pre-2008 levels: 34.44% in 2007, 34.71% in 2006, 38.36% in 2005, and 41.21% in Contributions to specialty or sector funds increased somewhat in. Real estate funds continue to be the most popular specialty fund, with contributions to these funds up by approximately $200,000 from last year. Other popular sector funds include heath funds and natural resources funds. Contributions to both fixed annuities and to money market funds together made up 12.99% of contributions in a decrease from 2014; however, assets in these very conservative investments have increased slightly from 2014 and represent 23.82% of assets. Bond fund contributions have declined steadily over the past four years, accounting for 7.62% of contributions in compared with 8.19% in Target date funds, also referred to as lifecycle funds, have shown a steady increase in contributions over the years, with 24.03% of all contributions in versus 22.74% of all contributions in 2014 and 19.82% in i

3 Initiatives During the TSA Review Committee and TSA Program staff concentrated on the following issues: Responding to an extensive IRS audit of the UW TSA 403(b) Plan, which the University received in early June. The University responded to the Information Document Requests (IDRs) by the August 16 deadline and met with the IRS on September 15,. The IRS representatives complimented the University on the quality, organization, thoroughness, and timeliness of our responses. (The IRS audit was closed in January 2017, with no adverse findings.) Ensuring that the UW TSA 403(b) Plan is fully compliant with IRS 403(b) Regulations and that all deposits into participant accounts are accurate. UW TSA program staff members have worked with the UW Service Center to improve processes and put audits and safeguards in place to make sure all TSA contributions are remitted timely and accurately. Making sure UW TSA participants have access to the lowest-cost share classes possible. Fidelity and TIAA-CREF offer participants in the UW TSA Plan as many funds as possible with institutional class shares, which generally have the same management team and investment objectives as the respective funds in other share classes the expense ratios are just lower. Having lower expense ratios typically means that returns may be higher. In 2014 staff negotiated with T. Rowe Price to offer the institutional share class for two of the most popular T. Rowe Price funds in the UW line-up, Equity Income and Mid-Cap Growth; this was implemented in. In TIAA-CREF divided its annuity products into three separate tiers, based on expenses. The UW has qualified for the lowest-cost tier. All of these achievements provide a great advantage for our participants. Making certain the UW TSA Plan is well-run, low-cost, and well-funded by carefully reviewing performance, expenses and fees as well as the revenue generated from UW TSA Plan investments. Staff meets with all TSA investment companies every year to thoroughly review customer service, education, investment performance, expenses, and revenue generated by participant investments. With the administrative budgets/revenue accounts provided by Fidelity, TIAA-CREF, and T. Rowe Price, we have been able to provide stable funding for the plan into the future and therefore continue to have no UW participant fee. Facilitating two major outreach initiatives at UW institutions in addition to the standard educational initiatives noted below: o TSA Days for UW-Madison, UW Colleges and UW-Extension and UW System Administration April 20 24,. All TSA companies participated, offering a range of financial planning and financial wellness workshops. TIAA-CREF offered a workshop that was video-streamed from the Pyle Center to five other UW institutions. These events reached over 260 employees. o TIAA-CREF s Postcards From the Future: A Woman s Guide to Financially Ever After sponsored by the UW TSA 403(b) Plan, the UW-Madison Office of Human Resources- Benefits, and University of Wisconsin Women s and Gender Studies Consortium on November 5,. This was held at two locations reaching over 110 attendees. Education Program staff, company representatives, and TSARC members participated in campus presentations, as well as many benefits fairs. Earning statement messages to all employees, including most student hourlies, appeared twice during the year. UW TSA Program staff and benefits staff at the campuses organized TSA events and made arrangements for presentations by UW System staff and TSA companies. TSARC members Mike Stifter and Rob Wolf made TSA presentations at their institutions; Howard Erlanger led an estate-planning workshop. Together with workshops led by TSA Program staff, we reached approximately 276 employees. The workshops presented by our TSA companies reached more than 500 employees. T. Rowe Price offered live and recorded webinars, a cost-effective means of providing participant education that was well received; these webinars reached 76 employees. TSA investment companies continued to offer very popular individual counseling sessions. In counseling was provided at all the UW institutions, reaching more than 3,800 employees. Combined outreach events reached over 4,857 employees. ii

4 2012- PLAN ASSETS AND ANNUAL CONTRIBUTIONS BY INVESTMENT COMPANY INSURANCE TOTAL ASSETS (Company Reported) Company Reported RiverSource (IDS) $ 102,235, $ 107,335, $ 111,370, $ 89,612, $ 3,745, $ 3,589, $ 3,539, $ 3,717, $ 3,818, LINCOLN $ 130,766, $ 139,734, $ 137,892, $ 126,406, $ 2,491, $ 3,231, $ 2,442, $ 2,557, $ 2,704, TIAA* $1,058,550, $ 981,951, $ 977,439, $ 855,841, $ 31,268, $ 31,622, $ 29,681, $ 29,793, $ 29,833, Sub- $ 1,291,552, $ 1,229,022, $ 1,226,702, $ 1,071,859, $ 37,506, $ 38,442, $ 35,663, $ 36,068, $ 36,356, MUTUAL FUNDS FIDELITY $ 625,497, $ 618,217, $ 585,279, $ 453,616, $ 26,234, $ 30,924, $ 24,184, $ 23,094, $ 22,075, T ROWE PRICE $ 218,115, $ 218,567, $ 202,658, $ 167,125, $ 9,504, $ 10,276, $ 9,269, $ 9,143, $ 9,131, Dreyfus (frozen ) $ 9,266, $ 9,297, $ 7,823, $ 345, $ 450, $ 445, Sub- $ 843,613, $ 846,050, $ 797,234, $ 628,565, $ 35,738, $ 41,200, $ 33,799, $ 32,688, $ 31,651, Frozen Options WRS CORE* $ 12,964, $ 13,875, $ 14,077, $ 13,554, WRS VARIABLE* $ 2,252, $ 2,375, $ 3,428, $ 3,908, Sub- $ 15,216, $ 16,250, $ 17,505, $ 17,463, ANNUAL CONTRIBUTIONS (UW DREYFUS $ 7,668, DWS (SCUDDER)* $ 3,727, $ 3,938, $ 3,908, $ 3,500, Sub- Dreyfus & D $ 11,396, $ 849,989, $ 801,143, $ 632,066, TOTAL (Current Providers) $ 2,135,165, $ 2,075,073, $ 2,023,937, $ 1,700,425, $ 73,244, $ 79,643, $ 69,463, $ 68,757, $ 68,007, TOTAL (incl WRS) $ 2,150,381, $ 2,091,324, $ 2,041,442, $ 1,717,889, TOTAL (incl Dreyfus, DWS & WRS) $ 2,161,777, $ 2,095,262, $ 2,045,350, $ 1,721,390, *TSA Plan assets include rolled-in assets. In past years TIAA Assets only included assets from contributions. Some company reported contributions include rolled-in contributions. Note: Dreyfus, DWS (Scudder), and WRS are no longer investment options, but past records have been retained for comparison. * Asset balances are available for Dreyfus, DWS (Scudder), and WRS. Since those accounts are still in our plan, we have included them for reference. 1

5 Annual Contributions by Investment Company Type $40,000,000 $35,000,000 $30,000,000 $25,000,000 $20,000,000 $15,000,000 $10,000,000 $5,000, $0 Insurance TIAA-CREF Mutual Funds WRS Insurance $ 9,735, $ 8,697, $ 8,063, $ 9,035, $ 6,522, $ 6,275, $ 5,981, $ 6,237, TIAA-CREF $ 32,029, $ 31,183, $ 31,594, $ 31,604, $ 29,833, $ 29,793, $ 29,681, $ 31,268, Mutual Funds $ 34,031, $ 32,372, $ 33,359, $ 33,744, $ 31,651, $ 32,688, $ 33,799, $ 35,738, WRS $ 1,564, $ - $ - $ - $ - $ 77,360, $ 72,254, $ 73,018, $ 74,384, $ 68,007, $ 68,757, $ 69,463, $ 73,244, Source: UW Payroll records; Vendor Reported, which may include rolled in moneys as well 2012 and after UW Payroll records from HRS 2

6 Contributions by Size of Deferral Participants by Size of Deferral 63.5% 1.0% 6.4% 6.0% 6.1% 6.4% 5.1% 5.6% <=$1000 $1001-$3000 $3001-$5000 $5001-$7000 $7001-$9000 $9001-$11,000 $11,001-$13,000 >$13, % 4.0% 6.2% 25.6% 8.1% 11.7% 14.8% 26.0% <=$1000 $1001-$3000 $3001-$5000 $5001-$7000 $7001-$9000 $9001-$11,000 $11,001-$13,000 >$13,000 Contributions Number of Contributors <=$1000 $ 904,429 $ 897,404 $ 906, $ 815,535 $ 786,528 $ 825,272 $ 766,941 1,559 1,564 1,603 1,456 1, $1001-$3000 $ 6,250,418 $ 5,912,362 $ 5,696, $ 5,003,135 $ 4,835,376 $ 4,741,936 $ 4,709,699 3,210 3,068 2,947 2,598 2, $3001-$5000 $ 6,133,050 $ 5,530,653 $ 5,437, $ 4,701,697 $ 4,565,137 $ 4,581,686 $ 4,396,325 1,515 1,370 1,343 1,168 1, $5001-$7000 $ 6,159,888 $ 5,457,358 $ 5,559, $ 4,656,706 $ 4,473,578 $ 4,401,518 $ 4,448,033 1, $7001-$9000 $ 6,094,993 $ 5,597,386 $ 5,280, $ 4,626,075 $ 4,660,459 $ 4,842,976 $ 4,654, $9001-$11,000 $ 5,505,237 $ 4,886,478 $ 4,898, $ 4,181,472 $ 3,924,070 $ 3,809,975 $ 3,714, $11,001-$13,000 $ 5,345,401 $ 5,041,101 $ 4,761, $ 3,938,512 $ 4,196,365 $ 3,840,975 $ 4,069, >$13,000 $ 40,967,283 $ 38,931,402 $ 40,476, $ 40,084,688 $ 41,315,520 $ 42,418,748 $ 46,486,000 2,345 2,161 2,231 2,148 2, $13,001-$15,000 $ 8,394,412 $ 6,580,643 $ 6,395, $15,001-$17,000 $ 9,462,812 $ 9,585,290 $ 10,431, >$17,000 $ 23,110,059 $ 22,765,468 $ 23,650, ,151 1,102 1,135 $17,001-$19,000 $ 3,318, $19,001-$21,000 $ 7,226, $21,001-$22,000 $ 11,978, >$22,000 $ 1,127, $ 77,360,700 $ 72,254,143 $ 73,018,127 $ 68,007,820 $ 68,757,031 $ 69,463,086 $ 73,244,576 11,412 10,681 10,596 9,477 9,318 9,382 9,327 Average $ 6,779 $ 6,765 $ 6,891 $ 7,176 $ 7,379 $ 7,404 $ 7,853 Median $ 4,200 $ 4,000 $ 4,143 $ 4,000 $ 4,100 $ 4,200 $ 4, records not available because of conversion to new payroll system 3

7 80% 70% 60% 50% 40% 30% 20% 10% 0% TSA Participation by Employee Type University Staff Protective Fa, AS, Li Exec No WRS N % 33.52% 42.49% 61.54% 0.76% 23.55% 50, % 32.97% 41.02% 65.70% 0.65% 23.21% 50, % 31.32% 40.54% 71.43% 0.69% 22.95% 50, % 32.12% 40.74% 70.97% 0.73% 22.96% 51, % 34.55% 40.00% 70.97% 0.75% 22.49% 50, % 32.46% 39.14% 70.97% 0.73% 22.67% 50, % 34.48% 38.14% 66.67% 0.77% 23.30% 48, % 31.86% 35.85% 57.89% 0.81% 21.81% 48, % 30.48% 34.88% 60.00% 1.00% 21.28% 49, % 26.43% 34.21% 54.29% 1.09% 27.37% 56, % 24.27% 32.18% 48.28% 1.16% 17.42% 54, % 25.11% 31.41% 52.78% 1.00% 17.17% 54, % 26.01% 31.04% 60.00% 1.03% 17.23% 54, % 27.36% 30.79% 53.85% 0.94% 17.35% 54,148 Participation of those with WRS 27.07% Source: UW Payroll records Please note: those not eligible for WRS include short-term academic staff, rehired annuitants, graduate assistants and others not likely to participate in the 403(b) plan. N includes all employees except Student Hourly 2011 includes only the period from 4-29 through

8 25% 20% 15% 10% 5% 0% Percent of Salary Deferred University Staff Protective Fa, AS, Li Exec No WRS % 7.83% 9.30% 6.09% 18.71% 9.26% % 7.23% 9.52% 7.08% 22.11% 9.39% % 8.08% 10.07% 8.33% 23.09% 9.93% % 7.97% 10.50% 8.38% 21.98% 10.30% % 7.47% 10.97% 8.30% 22.99% 10.64% % 7.42% 11.07% 8.06% 22.11% 10.72% % 6.86% 10.58% 7.39% 23.52% 10.25% % 7.05% 10.49% 7.70% 20.28% 10.14% % 6.43% 10.77% 7.96% 21.22% 10.39% % 5.90% 10.40% 8.10% 18.90% 10.38% % 5.20% 10.10% 7.60% 20.10% 10.20% % 5.40% 10.20% 8.70% 19.60% 10.42% % 4.60% 10.00% 7.40% 19.30% 10.22% 9.10% 5.60% 10.20% 7.50% 19.30% 10.06% Source: UW Payroll records 2011 figures only from 4/29-12/32 5

9 PARTICIPANT CHARACTERISTICS NUMBER Fa, AS, Li Executives University Staff Protectives No WRS TSA Part. All Emp. TSA Part. All Emp. TSA Part. All Emp. TSA Part. All Emp. TSA Part. All Emp. TSA Part. All Emp ,308 20, ,904 12, ,504 11,432 50, ,213 20, ,998 12, ,023 11,420 50, ,202 21, ,988 12, ,857 11,412 48, ,751 21, ,711 12, ,754 10,681 48, ,673 22, ,680 12, ,190 10,596 49, ,536 22, ,627 12, ,803 10,480 56, ,968 21, ,223 12, ,517 9,492 54, ,934 22, ,157 11, ,262 9,370 54, ,972 22, ,171 11, ,223 9,433 54,750 6,999 22, ,129 11, ,843 9,393 54,148 NOTE: 2011 figures do not include 1/1-4/29 information because of conversion to HRS payroll system The number of All Employees excludes Student Hourly employees. AVERAGE SALARY Fa, AS, Li Executives University Staff Protectives No WRS TSA Part. All Emp. TSA Part. All Emp. TSA Part. All Emp. TSA Part. All Emp. TSA Part. All Emp. TSA Part. All Emp $ 69,053 $ 53,879 $ 174,919 $ 178,377 $ 41,735 $ 31,743 $ 60,699 $ 47,862 $ 20,292 $ 4,174 $ 61,520 $ 32, $ 70,820 $ 55,359 $ 191,384 $ 188,095 $ 42,977 $ 33,093 $ 64,527 $ 50,621 $ 18,936 $ 4,418 $ 63,120 $ 33, $ 73,788 $ 57,314 $ 185,140 $ 176,603 $ 46,440 $ 35,729 $ 68,105 $ 54,040 $ 20,314 $ 4,763 $ 66,261 $ 35, $ 74,556 $ 57,655 $ 196,124 $ 175,348 $ 46,318 $ 35,713 $ 68,193 $ 53,893 $ 22,240 $ 5,023 $ 67,004 $ 36, $ 74,486 $ 56,980 $ 183,512 $ 184,355 $ 46,139 $ 35,356 $ 65,587 $ 52,495 $ 18,988 $ 5,210 $ 66,858 $ 35, $ 76,177 $ 58,842 $ 191,811 $ 190,717 $ 46,685 $ 35,910 $ 64,997 $ 52,094 $ 33,841 $ 11, $ 80,060 $ 61,386 $ 217,402 $ 214,041 $ 48,844 $ 36,859 $ 70,942 $ 57,223 $ 41,175 $ 12, $ 82,015 $ 62,359 $ 202,254 $ 205,445 $ 49,703 $ 37,630 $ 73,923 $ 57,656 $ 38,803 $ 12,307 $ 73,089 $ 36, $ 84,232 $ 64,148 $ 217,016 $ 204,047 $ 50,609 $ 39,048 $ 75,561 $ 61,639 $ 35,080 $ 12,445 $ 75,177 $ 37,404 $ 86,003 $ 65,284 $ 228,507 $ 210,165 $ 52,336 $ 40,395 $ 77,924 $ 63,383 $ 36,579 $ 12,547 $ 75,419 $ 37,808 The All Employees salary includes Student Hourly employees. AVERAGE AGE Fa, AS, Li Executives University Staff Protectives No WRS TSA Part. All Emp. TSA Part. All Emp. TSA Part. All Emp. TSA Part. All Emp. TSA Part. All Emp. TSA Part. All Emp

10 UW TSA Program Participation by Unit and Age < All WRS Employees Percent 2014 Percent 2013 Percent 2012 Percent Madison ,245 1, ,754 4,768 4,720 4, % 29.01% 28.94% 28.94% Milwaukee , % 24.73% 25.32% 25.55% Eau Claire % 30.19% 30.73% 30.93% Green Bay % 25.33% 24.54% 24.63% La Crosse % 27.71% 25.94% 27.52% Oshkosh % 23.26% 23.04% 23.12% Parkside % 25.66% 25.04% 23.24% Platteville % 19.08% 19.20% 19.65% River Falls % 24.11% 24.65% 24.20% Stevens Point % 27.67% 27.30% 28.12% Stout % 18.96% 18.52% 18.98% Superior % 24.78% 24.61% 24.61% Whitewater % 25.97% 26.80% 27.26% Colleges % 20.29% 19.69% 19.44% Extension % 28.73% 28.98% 29.36% System % 42.48% 48.48% 48.48% System-wide % 37.50% 35.19% 64.41% ,421 2,405 3,269 1, ,383 9,436 9,357 9,477 34, % 26.92% 26.87% 27.90% Participation by Age Age < Participants ,423 2,469 3,380 1, Participants ,421 2,405 3,269 1, ,383 9,436 9,357 9,477 10,461 10,596 10,549 11,282 All WRS Employees * 2,446 6,884 8,775 10,678 5, ,656 35,047 34,826 33,970 34,148 34,148 33,474 34,000 Percent # not 11.41% 20.64% 27.41% 30.61% 33.23% 34.51% 17.24% 27.07% 26.92% 26.87% 27.90% 30.63% 31.03% 31.51% 33.18% available 7

11 Allocation of Contributions and Assets Contributions Money Market 2.25% Bonds 7.62% Fixed Annuities, 10.74% Large-cap, 28.13% Balanced, 31.23% Mid-cap, 4.73% Small-cap, 2.67% International, 6.84% Specialties, 5.79% Contr Contr. Assets 2014 Assets Large-cap Value $ 2,324, $ 1,989, $ 64,744, $ 62,210, Large-cap Blend $ 10,135, $ 10,837, $ 342,483, $ 390,732, Large-cap Growth $ 9,947, $ 6,714, $ 308,982, $ 251,382, % 25.89% 34.74% 33.94% Mid-cap Value $ 2,218, $ 1,412, $ 58,447, $ 47,722, Mid-cap Blend $ 601, $ 1,207, $ 8,856, $ 37,788, Mid-cap Growth $ 948, $ 1,216, $ 27,116, $ 30,942, % 5.08% 4.58% 5.61% Small-cap Value $ 278, $ 471, $ 7,076, $ 14,766, Small-cap Blend $ 1,228, $ 1,079, $ 25,113, $ 22,828, Small-cap Growth $ 616, $ 439, $ 17,421, $ 15,676, % 2.64% 2.41% 2.57% Europe Stock $ 126, $ 140, $ 3,373, $ 3,039, Latin Amer. Stock $ 74, $ 112, $ 1,043, $ 1,692, Divers. Emerge. Mkts $ 459, $ 850, $ 7,239, $ 18,926, Divers. Pacific Stock $ 30, $ 32, $ 1,350, $ 1,250, Pacific ex-japan Stock $ 177, $ 192, $ 3,846, $ 4,637, Japan Stock $ 25, $ 22, $ 772, $ 629, Foreign Stock $ 3,001, $ 3,106, $ 61,805, $ 66,351, World Stock $ 1,551, $ 1,555, $ 48,247, $ 50,423, % 7.96% 6.19% 7.08% 8

12 Allocation of Contributions and Assets, cont. Contr Contr. Assets 2014 Assets Conservative Allocation $ 267, $ 270, $ 6,725, $ 7,439, Moderate Allocation $ 5,274, $ 5,243, $ 134,694, $ 137,156, Target Retirement Date $ 19,140, $ 17,169, $ 164,839, $ 153,000, Convertible Bond $ 14, $ 18, $ 1,520, $ 1,773, World Allocation $ 178, $ 126, $ 4,441, $ 4,581, % 30.24% 15.14% 14.65% Long Government $ 172, $ 100, $ 2,660, $ 1,318, Intermediate Govt $ 394, $ 465, $ 10,975, $ 11,229, Short Government $ 151, $ 129, $ 1,754, $ 1,647, Long-Term Bond $ 11, $ 10, $ 326, $ 360, Intermediate-Term Bond $ 2,758, $ 2,722, $ 66,169, $ 65,041, Short-Term Bond $ 300, $ 261, $ 5,310, $ 5,449, Ultrashort Bond $ 4, $ 11, $ 273, $ 388, Inflation Protected Bond $ 758, $ 806, $ 16,808, $ 18,309, High-Yield Bond $ 601, $ 721, $ 12,148, $ 13,415, Multisector Bond $ 419, $ 516, $ 10,947, $ 12,832, International Bond $ 11, $ 5, $ 172, $ 86, Emerging Mkt Bond $ 197, $ 181, $ 2,763, $ 2,832, World Bond $ 119, $ 135, $ 2,889, $ 2,858, Bank Loan $ 166, $ 116, $ 4,037, $ 3,942, % 8.19% 6.66% 6.73% Special.-Communications $ 142, $ 146, $ 3,966, $ 3,605, Special.-Financial $ 78, $ 83, $ 2,305, $ 2,612, Special.-Health $ 1,255, $ 963, $ 37,809, $ 31,701, Special.-Nat. Resources $ 529, $ 535, $ 7,959, $ 10,943, Special.-Prec. Metals $ 65, $ 79, $ 1,170, $ 1,234, Special.-Real Estate $ 1,946, $ 1,746, $ 55,441, $ 51,515, Special.-Technology $ 419, $ 411, $ 20,752, $ 19,447, Special.-Utilities $ 169, $ 124, $ 3,879, $ 5,206, % 5.42% 6.46% 6.08% Money Market $ 1,793, $ 2,389, $ 40,372, $ 42,802, % 3.17% 1.96% 2.06% Fixed Annuities $ 8,553, $ 8,613, $ 450,641, $ 441,344, % 11.41% 21.86% 21.27% $ 79,643, $ 75,491, $ 2,061,679, $ 2,075,073, TIAA assets only include assets from contributions, not rolled-in assets. Source: Investment company reporting 9

13 50 Most-Used Funds Based on Contributions Company Fund Name Ticker Fund Type Contributions Assets 1 TIAA-CREF TIAA Traditional Annuity Fixed $ 7,669, $ 385,940, TIAA-CREF CREF Stock R3 QCSTIX Large Blend $ 4,029, $ 200,678, Fidelity Fidelity Contrafund - Class K FCNKX Large Growth $ 2,117, $ 75,261, TIAA-CREF CREF Social Choice R3 QCSCIX Moderate Allocation $ 1,963, $ 52,182, Fidelity Fidelity Freedom K 2025 Fund K Shares FKTWX Target Date $ 1,487, $ 13,998, TIAA-CREF TIAA Real Estate QREARX Specialty-Real Estate $ 1,479, $ 44,391, Spartan 500 Index Fund - Institutional 7 FidelitySpartan Class FXSIX Large Blend $ 1,476, $ 30,318, TIAA-CREF CREF Growth R3 QCGRIX Large Growth $ 1,444, $ 54,061, Fidelity Fidelity Freedom K 2020 Fund K Shares FFKDX Target Date $ 1,421, $ 19,004, Fidelity Fidelity Freedom K 2030 Fund K Shares FFKEX Target Date $ 1,378, $ 10,441, Fidelity Fidelity Freedom K 2040 Fund K Shares FFKFX Target Date $ 1,351, $ 9,089, TIAA-CREF CREF Equity Index R3 QCEQPX Large Blend $ 1,237, $ 40,193, TIAA-CREF CREF Global Equities R3 QCGLIX World Stock $ 1,170, $ 40,212, TIAA-CREF Lifecycle Fund Institutional Share TCYIX Target Date $ 1,166, $ 8,044, TIAA-CREF Lifecycle Fund Institutional Share TCWIX Target Date $ 1,162, $ 10,519, TIAA-CREF Lifecycle Fund Institutional Share TCIIX Target Date $ 1,062, $ 7,466, TRowePrice T Rowe Price Retirement 2030 Fund TRRCX Target Date $ 1,037, $ 6,482, TIAA-CREF CREF Bond Market R3 QCBMIX Intermediate-Term Bond $ 913, $ 23,576, TIAA-CREF Lifecycle Fund Institutional Share TCRIX Target Date $ 894, $ 7,231, Spartan Market Index Fund - 20 FidelitySpartan Institutional Class FSKTX Large Blend $ 876, $ 14,244, Fidelity Fidelity Freedom K 2035 Fund K Shares FKTHX Target Date $ 869, $ 7,942, TIAA-CREF Lifecycle Fund Institutional Share TCOIX Target Date $ 774, $ 5,672, Fidelity Fidelity Low-Priced Stock Fund - Class K FLPKX Mid-Cap Value $ 750, $ 25,747, Fidelity Fidelity Blue Chip Growth Fund - Class K FBGKX Large Growth $ 705, $ 18,368, Fidelity Fidelity Freedom K 2045 Fund K Shares FFKGX Target Date $ 689, $ 3,773, Fidelity Fidelity Growth Company Fund - Class K FGCKX Large Growth $ 688, $ 16,779, Fidelity Fidelity Balanced Fund - Class K FBAKX Moderate Allocation $ 676, $ 15,316, Spartan U.S. Bond Index Fund - 28 FidelitySpartan Institutional Class FXSTX Intermediate-Term Bond $ 647, $ 10,542, TRowePrice T Rowe Price Capital Appreciation Fund PRWCX Moderate Allocation $ 637, $ 17,032, TIAA-CREF S&P 500 Index - Institutional Share TISPX Large Blend $ 625, $ 8,143, Fidelity Fidelity Freedom K Fund K Shares FKVFX Target Date $ 607, $ 7,707, Lincoln Fixed Account Fixed $ 605, $ 51,786, TIAA-CREF CREF Inflation-Linked Bond R3 QCILIX Inflation Protected Bond $ 603, $ 13,056, TRowePrice T Rowe Price Retirement 2020 Fund TRRBX Target Date $ 598, $ 7,570, TIAA-CREF International Equity Index - Institutional Share TCIEX Foreign Large Blend $ 526, $ 9,879, TIAA-CREF Lifecycle Fund - Institutional Share TCNIX Target Date $ 517, $ 7,177, Fidelity Fidelity Value Fund - Class K FVLKX Mid-Cap Value $ 517, $ 9,664, FidelitySelect Fidelity Select Biotechnology Portfolio FBIOX Specialty-Health $ 500, $ 14,330, Ameriprise Variable Portfolio - Moderate Portfolio Moderate Allocation $ 488, $ 9,355, TRowePrice T Rowe Price Retirement 2025 Fund TRRHX Target Date $ 463, $ 5,623, Fidelity Diversified International Fund - 41 Fidelity Class K FDIKX Foreign Large Blend $ 447, $ 10,255, Fidelity Fidelity Freedom K 2050 Fund K Shares FFKHX Target Date $ 447, $ 1,810, TIAA-CREF Mid Cap Value - Institutional Share TIMVX Mid-Cap Value $ 433, $ 8,466, TIAA-CREF Social Choice Equity - Institutional Share TISCX Large Blend $ 433, $ 4,587, Spartan International Index Fund - Fidelity 45 FidelitySpartan Advantage Class FSIVX Foreign Large Blend $ 426, $ 5,765, TIAA-CREF Large Cap Value Index - Institutional Share TILVX Large Value $ 418, $ 7,655, TIAA-CREF Lifecycle Fund Institutional Share TTFIX Target Date $ 410, $ 1,734, TIAA-CREF Growth and Income Fund - Institutional Share TIGRX Large Growth $ 406, $ 6,432, Variable Portfolio - Moderately Aggressive 49 Ameriprise Portfolio Moderate Allocation $ 396, $ 7,783, TRowePrice T Rowe Price Retirement 2035 Fund TRRJX Target Date $ 379, $ 2,470, of Top 50 Funds $ 52,038, $ 1,375,773,

14 50 Most-Used Funds Based on 2014 Contributions For comparison Company Fund Name Ticker Fund Type Contributions Assets 1 TIAA-CREF TIAA Traditional Annuity Fixed $ 7,439, $ 378,803, TIAA-CREF CREF Stock Large Blend $ 4,215, $ 218,228, TIAA-CREF CREF Social Choice Moderate Allocation $ 1,990, $ 53,514, Fidelity Fidelity Contrafund - Class K FCNKX Large Growth $ 1,838, $ 73,824, Fidelity Fidelity Freedom K 2025 Fund K Shares FKTWX Target date $ 1,703, $ 12,001, Fidelity Fidelity Freedom K 2030 Fund K Shares FFKEX Target Date $ 1,685, $ 9,724, Fidelity Fidelity Freedom K 2020 Fund K Shares FFKDX Target Date $ 1,505, $ 17,716, FidelitySpartan Spartan 500 Index Fund - Institutional Cl. FXSIX Large Blend $ 1,442, $ 29,804, TIAA-CREF CREF Growth Large Growth $ 1,372, $ 51,243, TIAA-CREF TIAA Real Estate Specialty-Real Estate $ 1,273, $ 39,919, TIAA-CREF CREF Equity Index Large Blend $ 1,216, $ 42,475, TIAA-CREF CREF Global Equities World Stock $ 1,195, $ 42,142, TIAA-CREF Lifecycle Fund Institutional Share TCWIX Target Date $ 1,039, $ 9,407, Fidelity Fidelity Freedom K 2040 Fund K Shares FFKFX Target date $ 1,036, $ 8,139, TIAA-CREF CREF Bond Intermediate-Term Bond $ 982, $ 24,526, Lincoln Fixed account Fixed $ 951, $ 50,070, TIAA-CREF Lifecycle Fund Institutional Share TCIIX Target Date $ 947, $ 6,364, TIAA-CREF Lifecycle Fund Institutional Share TCYIX Target Date $ 922, $ 7,656, Fidelity Fidelity Freedom K 2035 Fund K Shares FKTHX Target date $ 856, $ 7,835, TIAA-CREF Lifecycle Fund Institutional Share TCRIX Target Date $ 809, $ 6,400, Fidelity Fidelity Freedom K 2045 Fund K Shares FFKGX Target date $ 769, $ 3,480, Spartan Market Index Fund - 22 FidelitySpartan Institutional Class FSKTX Large Blend $ 730, $ 12,822, Fidelity Fidelity Low-Priced Stock Fund - Class K FLPKX Mid-Cap Blend $ 726, $ 27,295, TIAA-CREF Lifecycle Fund Institutional Share TCOIX Target Date $ 697, $ 4,814, TRowePrice T Rowe Price Capital Appreciation Fund PRWCX Moderate Allocation $ 684, $ 16,214, TIAA-CREF CREF Inflation-linked Bond Inflation Protected Bond $ 639, $ 14,281, TRowePrice T Rowe Price Retirement 2030 Fund TRRCX Target Date $ 620, $ 5,348, Fidelity Fidelity Money Market Fund SPRXX Money Market $ 590, $ 2,573, Spartan U.S. Bond Index Fund - 29 FidelitySpartan Institutional Class FXSTX Intermediate-Term Bond $ 572, $ 10,274, Fidelity Fidelity Balanced Fund - Class K FBAKX Moderate Allocation $ 560, $ 15,611, Ameriprise Variable Portfolio - Moderate Portfolio Moderate Allocation $ 555, $ 10,003, TIAA-CREF International Equity Index - Institutional Sh. TCIEX Foreign Large Blend $ 549, $ 8,924, TIAA-CREF Lifecycle Fund - Institutional Share TCNIX Target Date $ 512, $ 7,378, Fidelity Fidelity Blue Chip Growth Fund - Class K FBGKX Large Growth $ 496, $ 16,685, TRowePrice T Rowe Price Retirement 2020 Fund TRRBX Target Date $ 477, $ 7,577, TIAA-CREF S&P 500 Index - Institutional Share TISPX Large Blend $ 462, $ 6,831, FidelitySelect Fidelity Select Biotechnology Portfolio FBIOX Specialty-Health $ 446, $ 10,854, Fidelity Fidelity Diversified International - Class K FDIKX Foreign Large Blend $ 437, $ 9,588, TRowePrice T Rowe Price Mid-Cap Growth Fund RPMGX Mid-Cap Growth $ 431, $ 12,510, Fidelity Fidelity Growth Company Fund - Class K FGCKX Large Growth $ 420, $ 15,691, TRowePrice T Rowe Price Equity Income Fund PRFDX Large Value $ 415, $ 14,458, Fidelity Freedom Index 2025 Fund - Class 42 Fidelity W (available 7/28/14) FQIFX Target Date $ 412, $ 923, Fidelity Fidelity Freedom K 2050 Fund K Shares FFKHX Target date $ 409, $ 1,502, TIAA-CREF Mid Cap Value - Institutional Share TIMVX Mid-Cap Value $ 404, $ 9,667, Fidelity Fidelity Cash Reserves FDRXX Money Market $ 375, $ 9,483, TRowePrice T Rowe Price Retirement 2025 Fund TRRHX Target Date $ 366, $ 5,244, TIAA-CREF Social Choice Equity - Institutional Share TISCX Large Blend $ 346, $ 4,332, TIAA-CREF Growth and Income Fund - Institutional Sh TIGRX Large Blend $ 346, $ 5,987, TIAA-CREF CREF Money Market Money Market $ 339, $ 5,736, TRowePrice T Rowe Price Retirement 2040 Fund TRRDX Target Date $ 336, $ 3,158, of Top 50 Funds $ 49,559, $ 1,369,062,

15 Educational Initiatives In TSA Program staff continued to promote education efforts by providing support and resources for benefits staff at our institutions, working with our investment companies, updating our written informational pieces, and making information available to employees on our website. Achievements include the following: Encouraging investment company participation in educational efforts. Individual counseling sessions continued to be popular. In TIAA-CREF held 657 one-on-one counseling sessions; Fidelity held 462; Lincoln held 504 and Ameriprise (RiverSource) held 2,159. T. Rowe Price counseled 16 employees at one-on-one counseling sessions; phone sessions were not tracked. In investment companies reached approximately 3,800 employees through individual counseling. Facilitating TSA investment companies participation in campus benefits fairs: Fidelity, TIAA-CREF and T. Rowe Price had representatives at all 13 benefits fairs at 4-year campuses. Ameriprise attended 7, and Lincoln attended 5. Facilitating TSA Days for UW-Madison, UW-Extension and UW-System Administration April 20 24,. Fidelity presented Building a Portfolio for Any Weather. TIAA-CREF presented the Starting Line: Why and How Retirement Saving Begins Now; Halfway There: A Retirement Checkup; and Retirement Dollars: Saving Enough and Making Them Last, which was streamed from the Pyle Center to five UW institutions. T. Rowe Price presented Retirement Planning Made Simple and Roth Contributions. Ameriprise presented Confident Retirement. Lincoln presented Market Bubbles: Understanding Their Causes and Potential Ways to Avoid Them. Facilitating TIAA-CREF s Postcards From the Future: A Woman s Guide to Financially Ever After sponsored by the UW TSA 403(b) Plan, the UW-Madison Office of Human Resources-Benefits, University of Wisconsin Women s and Gender Studies Consortium and TIAA-CREF. TIAA-CREF followed up by providing individual counseling sessions for those who attended. Facilitating other workshops Ameriprise presented Confident Retirement and TIAA-CREF presented Halfway There: A Retirement Checkup at UW-Madison s Retirement Week November T. Rowe Price presented Retirement Plan Savings Strategy at UW-Madison and UW-Milwaukee December 1, 2 and 3. Facilitating the T. Rowe Price recorded webinars, Retirement Planning Made Simple, Roth Contributions, and Financial Priorities for Women with 12, 49 and 15 employees viewing respectively. Other recorded T. Rowe Price webinars for its educational institution clients were also made available to UW employees. Coordinating TSA messages on earning statements. Student hourlies and university staff employees received a message on their March 19 and October 29 paychecks. Faculty/academic staff/limited employees received a message on their April 1 and October 30 paychecks. A link takes employees directly to the TSA website. Creating Fidelity, T. Rowe Price and TIAA-CREF quick enrollment cards. Posting articles Save for Your Future with the TSA 403(b) Program and 2016 TSA Compensation Limits Announced on the employee portal. Posting It s Easy to Invest in the TSA Program on the UW System Office of Human Resources & Workforce Diversity landing page carousel. Compiling June 30 and December 31 TSA company Investment Returns and Selected Returns, which are posted on our website and provided to the campus TSA Coordinators for dissemination to employees. Creating webpages for the TSA Program on the Office of Human Resources and Workforce Diversity website. Updating resources available on our website including current contribution limits, fund returns, the Schedule of Individual Counseling Sessions, the Salary Reduction Agreement, the revised Selected Returns, Question and Answer Guide and Quick Guide to the TSA Program, TSA Review Committee Meeting minutes, and the Annual Report. Presenting workshops for UW employees and families at UW institutions. Date Location Attendance January 21 Madison 12 February 17 Madison 18 March 18 Madison 12 April 8 and 9 La Crosse Rob Wolf and Cedric Steine 22 April 13 Madison 11 May 19 Madison 10 June 10 Madison 7 July 21 La Crosse Rob Wolf and Cedric Steine 20 July 21 Madison 25 August 19 Madison 17 September 15 Madison 12 September 17 Parkside 14 September 22 Platteville 10 October 1 Madison Howard Erlanger 40 October 14 Madison 10 October 21 and 22 River Falls Mike Stifter and Eric Sterner 8 November 17 Madison 16 December 8 Madison 10 December 14 River Falls Mike Stifter and Eric Sterner Warm thanks to TSA coordinators at UW institutions who made presentations, organized TSA events, and made arrangements for the presentations by investment companies and System staff. The Program is greatly enhanced by their work. 12