A TIAA-CREF RETIREMENT PLAN PRESENTATION TO: MARCH 16, 2010 FOR INSTITUTIONAL INVESTOR USE ONLY. NOT FOR USE WITH OR DISTRIBUTION TO THE PUBLIC.

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1 A RETIREMENT PLAN PRESENTATION TO: MARCH 16, 2010 FOR INSTITUTIONAL INVESTOR USE ONLY. NOT FOR USE WITH OR DISTRIBUTION TO THE PUBLIC.

2 TODAY S DISCUSSION I II III Introductions / Understanding the Goals of Boston Medical Center CHRISTINA PROSCIA, Director Individual & Institutional Client Services Overview ED MOSLANDER, Senior Managing Director Institutional Development & Sales Consultative Guidance and Client Support... CHRISTINA PROSCIA IV Recordkeeping and Compliance Services / Plan Implementation... RAYMOND BELLUCCI, Vice President Technology & Operations V Employee Services PATTY HARTE, Regional Vice President Field Consulting Group VI Digital Strategy Roadmap... JEFFREY FLEISCHMAN, Vice President Chief Digital Officer VII Investments TIM WALSH, Managing Director Product Development & Management VIII Pricing / The Difference..... CHRISTINA PROSCIA FOR INSTITUTIONAL INVESTOR USE ONLY. NOT FOR USE WITH OR DISTRIBUTION TO THE PUBLIC. 1

3 UNDERSTANDING THE CURRENT STATE AND FUTURE GOALS OF BOSTON MEDICAL CENTER CURRENT STATE Three 403(b) plans $396M in total plan assets $35M in total annual contributions 6,000 eligible participants 3,677 active 79 participants with legacy contracts FUTURE GOALS Partner with a single-source provider that delivers outsourced administrative services Fulfill fiduciary obligations and regulatory compliance requirements Deliver clear and concise communication Ensure retirement readiness plan for all participants Consolidate legacy assets to new platform Offer employees an expanded menu of quality, retirement-appropriate investments FOR INSTITUTIONAL INVESTOR USE ONLY. NOT FOR USE WITH OR DISTRIBUTION TO THE PUBLIC. 2

4 STRIVING TO EXCEED YOUR EXPECTATIONS LOW FEE STRUCTURE FOR VALUE-ADDED SERVICES E N H A N C E D Online salary reduction Common remitter service Compliance Coordinator solution Investment Policy Statement development support Actuarial calculations Multiple shift coverage N E W Expanding communications & education plan Additional counseling days Additional group meetings Expanded investment choice Plan Sponsor Dashboard Control of plan assets FOR INSTITUTIONAL INVESTOR USE ONLY. NOT FOR USE WITH OR DISTRIBUTION TO THE PUBLIC. 3

5 OVERVIEW FOR INSTITUTIONAL INVESTOR USE ONLY. NOT FOR USE WITH OR DISTRIBUTION TO THE PUBLIC. 4

6 IS THE 403(b) MARKET LEADER EXTENSIVE EXPERIENCE SERVING HOSPITAL AND HEALTHCARE by the Numbers is the 403(b) market leader (LIMRA, Not-for-Profit Survey) Combined total assets under management of $414 billion Over 3.6 million participants in more than 27,000 retirement plans 639 research, hospital and healthcare clients nationwide $41.8B in assets $2.7B in annual contributions Representative Clients Years with Memorial Sloan Kettering Cancer Center 61 Mount Sinai 45 Dana Farber Cancer Institute 34 Partners HealthCare System 14 Sisters of Providence 4 Data as of December 31, 2009 FOR INSTITUTIONAL INVESTOR USE ONLY. NOT FOR USE WITH OR DISTRIBUTION TO THE PUBLIC. 5

7 A CONSISTENT APPROACH FOR LONG-TERM STABILITY Consistent, Retirement-Focused Investment Approach. Our skilled money managers focus on strategies designed to help provide financial security in retirement. Broad Claims-Paying Ability. paid out more than $10 billion in retirement income and other disbursements to 500,000 participants in 2009 alone. TIAA (life insurance company affiliate) Industry Analyst Rating/Date* A.M. Best Company A++ (12/09) Fitch AAA (6/09) Standard & Poor s AAA (6/09) Moody s Investors Service Aaa (10/09) Strong Capital Position. TIAA has approximately $18 billion in financial reserves as of September 30, Highest Ratings. TIAA s triple-a ratings the highest possible were recently reaffirmed by the nation s four leading ratings agencies.* * These ratings are for TIAA as an insurance company and do not apply to variable annuities, mutual funds or any other product or service not fully backed by the claims-paying ability of TIAA. Ratings are subject to change. There is no guarantee that current ratings will be maintained. FOR INSTITUTIONAL INVESTOR USE ONLY. NOT FOR USE WITH OR DISTRIBUTION TO THE PUBLIC. 6

8 A STRONG COMMITMENT TO DIVERSITY AND INCLUSION Corporate Procurement & Supplier Diversity Supplier Diversity includes suppliers in the sourcing, category management and contract negotiation processes. s diversity objectives are achieved when a business is at least 51 percent owned by women and minorities. Diversity is part of our company history. More importantly, it is integral to our future. President and CEO Roger W. Ferguson Workplace Diversity Historically, the TIAA and CREF boards have had more women and minority trustees than virtually any public corporation Today, 36% of TIAA trustees are women and nearly 30% are minorities Women make up 37% of our senior leaders and 27% of our Executive Management Team 100% 80% 60% 40% 50% Total TIAA Workforce by Race & Gender as of September 30, 2009 Female Male 67% 63% 58% 57% 50% 48% 52% 42% 43% 33% 37% 20% 0% American Indian Asian/Pacific Islander Black Hispanic Two or More Races White FOR INSTITUTIONAL INVESTOR USE ONLY. NOT FOR USE WITH OR DISTRIBUTION TO THE PUBLIC. 7

9 CONSULTATIVE GUIDANCE AND CLIENT SUPPORT FOR INSTITUTIONAL INVESTOR USE ONLY. NOT FOR USE WITH OR DISTRIBUTION TO THE PUBLIC. 8

10 OUR GOAL IS TO OFFER THE BEST TOTAL VALUE TO BOSTON MEDICAL CENTER Consultative Guidance and Client Support Low Fee Structure Streamlined, Web-Based Administration Competitive Investment Performance Full Regulatory Compliance Investment Menu Flexibility High-Touch, High-Impact Employee Services FOR INSTITUTIONAL INVESTOR USE ONLY. NOT FOR USE WITH OR DISTRIBUTION TO THE PUBLIC. 9

11 CONSULTATIVE GUIDANCE AND CLIENT SUPPORT DEDICATED TEAMS EXECUTIVE MANAGEMENT TEAM ADMINISTRATOR / STAFF COUNSELING BOSTON MEDICAL CENTER LARRY O CONNOR LEADS THE RELATIONSHIP ADMINISTRATION PLAN IMPLEMENTATION DEDICATED SERVICES EMPLOYEE COUNSELING & EDUCATION EMPLOYEE COMMUNICATIONS FOR INSTITUTIONAL INVESTOR USE ONLY. NOT FOR USE WITH OR DISTRIBUTION TO THE PUBLIC. 10

12 RELATIONSHIP MANAGEMENT DEDICATED SERVICE TEAMS DELIVER INDUSTRY DISTINCTIVE VALUE Managing Consultant Larry O Connor Consultant Colin Pierce Individual Consultant Tammy Kayata Wealth Management Advisor Susan Plunkett Communication Director Kerry Bettenhausen Institutional Liaison Chris Littlejohn Implementation Manager Mike Minutolo Lead point of contact Consultative guidance on plan design and enhancements Information on s range of retirement and financial solutions Administration and recordkeeping assistance One-on-one, on-site advice consultations Group education and enrollment meetings Comprehensive, holistic advice and planning services for more complex needs Communication & Education plan development and execution Assurance of effective plan administration Management of entire conversion/transition process Meeting, deliverables and reporting coordination FOR INSTITUTIONAL INVESTOR USE ONLY. NOT FOR USE WITH OR DISTRIBUTION TO THE PUBLIC. 11

13 RECORDKEEPING AND COMPLIANCE SERVICES / PLAN IMPLEMENTATION FOR INSTITUTIONAL INVESTOR USE ONLY. NOT FOR USE WITH OR DISTRIBUTION TO THE PUBLIC. 12

14 REDESIGNED PLAN ADMINISTRATOR WEBSITE EFFICIENT, CENTRALIZED PLAN MANAGEMENT Convenient Online Access to Data Employee account information Contribution data and remittances Compliance reports WELCOME TO THE NEW PLAN SPONSOR WEBSITE, KERRY RYAN Wide variety of plan-level report templates Report run scheduling preferences, alerts Publications, forms, resources and help FOR INSTITUTIONAL INVESTOR USE ONLY. NOT FOR USE WITH OR DISTRIBUTION TO THE PUBLIC. 13

15 BOSTON MEDICAL CENTER PLAN SPONSOR INITIATIVES COMPLIANCE, TRANSPARENCY AND AUDIT SUPPORT Enhancing financial reporting and transparency, making it easier than ever to stay compliant A complete financial reporting package SAS-70 report Fee disclosure guide Audit support toolkit FOR INSTITUTIONAL INVESTOR USE ONLY. NOT FOR USE WITH OR DISTRIBUTION TO THE PUBLIC. 14

16 PLAN ADMINISTRATOR WEBSITE NEW PLAN SPONSOR DASHBOARD SUPPORTS KEY OBJECTIVES FOR INSTITUTIONAL INVESTOR USE ONLY. NOT FOR USE WITH OR DISTRIBUTION TO THE PUBLIC. 15

17 403(b) RESOURCE CENTER PROVIDES A WEALTH OF INFORMATION TO BOSTON MEDICAL CENTER Plan Fundamentals guide Nondiscrimination guide ERISA compliance materials Sample plan documents Administrator webinars Auditor webinars Help desk to support auditor questions Administrator Webinars Understanding Your New Form 5500 Reports Working with to Prepare for Your First-Year Audit Administrator Website: New User Orientation Auditor Webinars 403(b) Audit Requirements: Understanding TIAA- CREF s Products and Services FOR INSTITUTIONAL INVESTOR USE ONLY. NOT FOR USE WITH OR DISTRIBUTION TO THE PUBLIC. 16

18 SEAMLESS IMPLEMENTATION EXPERIENCE DEDICATED IMPLEMENTATION TEAM DEDICATED PLAN SPONSOR SUPPORT PLAN AND SYSTEM SETUP END-TO-END TESTING POST- IMPLEMENTATION SUPPORT Mike Minutolo oversees entire conversion Senior support team members oversee operations and quality assurance process Regular meetings on deliverables, issues and risks Setup of employer, plan and data elements Recordkeeper interactions for review and delivery of data and specs Full review of enrollment, loan and financial data processes Four levels of testing to ensure integrity of data elements Resolution of any issues identified Chris Littlejohn administers plans according to expectations Single, Integrated Implementation FOR INSTITUTIONAL INVESTOR USE ONLY. NOT FOR USE WITH OR DISTRIBUTION TO THE PUBLIC. 17

19 OUTSOURCED ADMINISTRATIVE SOLUTIONS EASE BOSTON MEDICAL CENTER S WORKLOAD Data and Asset Transfers Enrollment Services Eligibility and Service Tracking Vesting and Terminations Contribution Remittances and Distributions Refunds Loans and Hardships Web-Based Reporting Plan Financial Report Package Contribution and Compensation Limits Testing and Monitoring Discrimination Testing QDROs Forfeitures Rollovers Custodial Services Quarterly Statements Tax Forms and Filings Customized Salary Reduction Common Remitter Service Compliance Coordinator Solution Investment Policy Statement Development Support Actuarial Calculations Plan Sponsor Dashboard 403(b) Plan Audit Support Signature-Ready Form 5500 FOR INSTITUTIONAL INVESTOR USE ONLY. NOT FOR USE WITH OR DISTRIBUTION TO THE PUBLIC. 18

20 PERFORMANCE GUARANTEES SERVICE QUANTIFIER PENALTY Quarterly Review Statements Plan Reports (for designated reports) Remittance Processing Mailed 5 business days after end of quarter Delivered 20 business days after the end of the quarter (excluding Compliance Coordinator, nonstandard, ad-hoc and/or custom reports) If money and data are received in good order before close of business on the New York Stock Exchange, usually 4 p.m. (ET), we process on that business day (trade date) $500 per day up to $5,000 annually $500 per day up to $1,000 annually Provide economic equivalent of investment experience from appropriate Trade Date through processing date QDRO Processing Four weeks after receipt of complete information, including any court or other required third-party verification Plan Startup; Systems Agreed-upon plan start date 403(b) Regulatory Expertise Configuration Employee Web Access Available 99% of the time on an annual basis, excluding regularly scheduled maintenance $500 per day per transaction up to $5,000 annually $1,000 per day, up to $10,000 $100 per % by quarter up to $2,500 annually Administrator Web Access Available 99% of the time on an annual basis, excluding regularly scheduled maintenance $100 per % by quarter up to $2,500 FOR INSTITUTIONAL INVESTOR USE ONLY. NOT FOR USE WITH OR DISTRIBUTION TO THE PUBLIC. 19

21 EMPLOYEE SERVICES FOR INSTITUTIONAL INVESTOR USE ONLY. NOT FOR USE WITH OR DISTRIBUTION TO THE PUBLIC. 20

22 ADVICE AND PLANNING SERVICES SERVING EMPLOYEES IN THE WAYS THEY PREFER Employee Entry Points ONLINE PHONE ADVISOR INSTITUTION Flexible model allows us to serve your employees based on their unique needs and preferences BOSTON MEDICAL CENTER EMPLOYEES Solutions WEALTH MANAGEMENT RETIREMENT PLANNING ADVICE RETIREMENT CONSULTATION PLANNING TOOLS SEMINARS AND PODCASTS REFERRAL Employee needs and preferences + Solutions CUSTOMIZED COMMUNICATION AND EDUCATION FOR INSTITUTIONAL INVESTOR USE ONLY. NOT FOR USE WITH OR DISTRIBUTION TO THE PUBLIC. 21

23 FIELD CONSULTING GROUP INDIVIDUAL CONSULTANTS OFFER KNOWLEDGE AND EXPERTISE EXPERIENCE DISTINCTIVE VALUE AFFIRMATION FINRA Registered / Insurance Licensed Financial, investment & retirement income training Thorough understanding of your retirement plans Held to Balanced Scorecard People Operations Customer satisfaction Asset growth 2009 Participant Survey Results for IC Tammy Kayata Objective / Integrity: 98% (National average: 97%) Distinctiveness: 73% (National average: 69%) Individual Counseling History 2008: 12 days 2009: 21 days + FES + benefits fair Tammy conducted rounds with Mike Peretti 2010: 26 days scheduled RFP commitment: Up to 2 days per week + 12 FES Your open style of communication has been an important element in letting our employees know that is an approachable institution with great resources to them. This moves our Nurses and staff closer to their retirement goals. This is such an important task and I am grateful that someone as excellent as you in your work as an institutional consultant is working at. On Tammy Kayata, Individual Consultant The above quote may not be representative of the experiences of other participants and are not indicative of future performance or success. They stem strictly from the participants' experiences with broker/dealer-related services and not from any investment advisory services offered by a affiliate. Survey and data information as of December 31, FOR INSTITUTIONAL INVESTOR USE ONLY. NOT FOR USE WITH OR DISTRIBUTION TO THE PUBLIC. 22

24 ADVICE AND PLANNING SERVICES DESIGNED TO ADDRESS THE UNIQUE NEEDS OF EVERY EMPLOYEE GUIDANCE & EDUCATION Asset Allocation Savings Rate Distribution Options Retirement Age PERSONALIZED ADVICE & COUNSELING Objective Advice & Planning Service Personalized Action Plan Plan-Specific Fund Selection All Plans CUSTOMIZED FINANCIAL SOLUTIONS* Holistic Financial Planning Annual Retirement Review Managed Accounts Portfolio Management Fiduciary Services * These services may not be available to all employees. FOR INSTITUTIONAL INVESTOR USE ONLY. NOT FOR USE WITH OR DISTRIBUTION TO THE PUBLIC. 23

25 ADVICE AND PLANNING SERVICES PERSONALIZED RECOMMENDATIONS ACCUMULATION RECOMMENDED SAVINGS RATE RECOMMENDED ASSET ALLOCATION DESIRED RETIREMENT INCOME RECOMMENDED FUND SELECTION FOR INSTITUTIONAL INVESTOR USE ONLY. NOT FOR USE WITH OR DISTRIBUTION TO THE PUBLIC. 24

26 ADVICE AND PLANNING SERVICES PERSONALIZED RECOMMENDATIONS RETIREMENT INCOME FOR INSTITUTIONAL INVESTOR USE ONLY. NOT FOR USE WITH OR DISTRIBUTION TO THE PUBLIC. 25

27 ADVICE AND PLANNING SERVICES RECOGNIZED FOR EXCELLENCE Forbes 2009 Retirement Guide, Playing the Numbers (9/08). This claim should not be seen as an endorsement by Forbes. FOR INSTITUTIONAL INVESTOR USE ONLY. NOT FOR USE WITH OR DISTRIBUTION TO THE PUBLIC. 26

28 WEALTH MANAGEMENT SERVICES FOR MORE COMPLEX PLANNING NEEDS Personal relationship with a dedicated Wealth Management Advisor Advisors receive no commissions* Personalized action plan with objective recommendations Comprehensive, full team approach Holistic financial planning Best-in-class investments Retirement income management Ongoing, proactive relationship management PORTFOLIO MANAGEMENT ESTATE PLANNING RETIREMENT DISTRIBUTION PLANNING PARTICIPANT AND ADVISORY TEAM WEALTH TRANSFER RETIREMENT ACCUMULATION PLANNING INSURANCE PLANNING * compensates advisors through a salary-plus-incentive program based on client service excellence and financial results. Advisors will only recommend products that help achieve our clients goals. FOR INSTITUTIONAL INVESTOR USE ONLY. NOT FOR USE WITH OR DISTRIBUTION TO THE PUBLIC. 27

29 WORKING WITH BOSTON MEDICAL CENTER TO BUILD A CUSTOMIZED TRANSITION, COMMUNICATION & EDUCATION PLAN Our four-step approach ensures your plan is tailored to meet your business objectives and the diverse needs of your workforce 1 ANALYZE 2 PLAN Understand key drivers Demographics Behavior Environment Chart the course Target audiences Timing Implementation Ongoing 3 EXECUTE 4 MEASURE Deliver via appropriate channels In person By phone Online Mail and Assess and modify Metrics Surveys Feedback FOR INSTITUTIONAL INVESTOR USE ONLY. NOT FOR USE WITH OR DISTRIBUTION TO THE PUBLIC. 28

30 COMMUNICATION AND EDUCATION TRANSITION PLAN Selected Three Dedicated Individual Consultants 60 group seminars Covering all shifts 30 seminars weekly for two weeks Additional departmental meetings Staffed help desk during transition Local Office Counseling Boston Cambridge Waltham Mar 15 Mar 29 Apr 12 May 1 May 19 Jun 7 Jul 1 Jul 5 Strategy meeting BMC general announcement / blasts Admin training Finalize communication & education materials (Posters, flyers, brochures, schedules) Launch / web-based audio Blackout notice Begin employee meetings Transition complete Begin follow-up meetings FOR INSTITUTIONAL INVESTOR USE ONLY. NOT FOR USE WITH OR DISTRIBUTION TO THE PUBLIC. 29

31 DURING THE TRANSITION AND ONGOING COMMUNICATIONS DESIGNED TO MAXIMIZE PARTICIPATION PHASE 1 PLAN & ANNOUNCE Materials/Segmented Message Development Transition Announcements Seminar & Meeting Invitations Administrator Training PHASE 2 ENGAGE & ENROLL Seminars & Enrollment Meetings Enrollment Materials Relaunch of Employee Website PHASE 3 WELCOME & ONGOING New Participant Welcome Kit Financial Education Seminars, Webinars Publications and Mailings s Social Media, iphone applications and itunes downloads FOR INSTITUTIONAL INVESTOR USE ONLY. NOT FOR USE WITH OR DISTRIBUTION TO THE PUBLIC. 30

32 DURING THE TRANSITION AND ONGOING, CONTINUED CAMPAIGNS TARGET SPECIFIC BOSTON MEDICAL CENTER PLAN GOALS GOAL 1 INCREASE USE OF ADVICE Ensure all participants have access to advice Create retirement plan for each participant Give all participants clear action steps to meet retirement goal Assist with income replacement planning * Targeted groups will be tracked and surveyed to determine effectiveness of campaign GOAL 2 INCREASE PARTICIPATION Continue to Partner with BMC to target non-participating employees on-site Conduct Enrollment Workshops Online/By-Phone Enrollment * Campaigns targeted at specific age groups GOAL 3 TARGET LEGACY CONTRACT HOLDERS Outreach currently under way via letter to contract holders Communication sent via Benefits Office to encourage movement Workshop for Contract holders to outline ease of transfer FOR INSTITUTIONAL INVESTOR USE ONLY. NOT FOR USE WITH OR DISTRIBUTION TO THE PUBLIC. 31

33 DEDICATED WEBSITE MAKES PARTICIPATION EASY FOR BOSTON MEDICAL CENTER EMPLOYEES Dedicated website: Plan-specific investments Historical performance Planning tools and publications Account management FOR INSTITUTIONAL INVESTOR USE ONLY. NOT FOR USE WITH OR DISTRIBUTION TO THE PUBLIC. 32

34 myretirement.org ONLINE COMMUNITY HELPS EASE THE RETIREMENT TRANSITION As of December 31, 2009 Total members: 10,346 Average age: 58 Gender: 57% female Activity: 3,700+ join each month More than 225 hot topics: Obama Health Care Bill Long-Term Care Insurance When and Where to Retire Living with Parents Bucket List FOR INSTITUTIONAL INVESTOR USE ONLY. NOT FOR USE WITH OR DISTRIBUTION TO THE PUBLIC. 33

35 DIGITAL STRATEGY ROADMAP FOR INSTITUTIONAL INVESTOR USE ONLY. NOT FOR USE WITH OR DISTRIBUTION TO THE PUBLIC. 34

36 INVESTMENTS FOR INSTITUTIONAL INVESTOR USE ONLY. NOT FOR USE WITH OR DISTRIBUTION TO THE PUBLIC. 35

37 OPEN ARCHITECTURE Flexible Complete open architecture with no proprietary mutual fund requirements Comprehensive Nearly 15,000 mutual funds OPEN ARCHITECTURE Easy Proven process to exchange/replace existing investment options Value Add All mutual fund reimbursements used to offset Boston Medical Center plan expenses FOR INSTITUTIONAL INVESTOR USE ONLY. NOT FOR USE WITH OR DISTRIBUTION TO THE PUBLIC. 36

38 SEVEN BASIC STEPS TO MEETING YOUR INVESTMENT-RELATED FIDUCIARY RESPONSIBILITIES FOR INSTITUTIONAL INVESTOR USE ONLY. NOT FOR USE WITH OR DISTRIBUTION TO THE PUBLIC. 37

39 GUIDED ARCHITECTURE PHILOSOPHY FOR RETIREMENT PROGRAMS We believe effective retirement programs should include investment menus with: Choices suitable for all employees Competent fiduciary mechanisms Offerings designed to accumulate wealth and generate lifetime income Majority of employees are advice-dependent or want a simple solution Some customize but seek affirmation Others will build their own portfolio Benefits and investment policy should address process, prudence and documentation Effective process should facilitate and not sacrifice participant outcomes A diversified, low-cost menu based on structured risk and fully invested asset class exposure is the best strategy for long-term retirement investing FOR INSTITUTIONAL INVESTOR USE ONLY. NOT FOR USE WITH OR DISTRIBUTION TO THE PUBLIC. 38

40 FULL RANGE OF CHOICES A MENU DESIGNED TO SERVE ALL EMPLOYEES NEEDS Plan Sponsors will increase enrollment and participation opportunities with a tiered investment menu designed to offer flexibility and solutions for ALL participants those who seek simplicity and those who require a variety of high-quality options Tier I One Decision Target-date mutual funds Tier II Open Architecture Proprietary and nonproprietary mutual funds Tier III Lifetime Income Options guaranteed and variable annuities* Tier IV Brokerage Window Third-party mutual funds * Guarantees are subject to the issuer s claims-paying ability. FOR INSTITUTIONAL INVESTOR USE ONLY. NOT FOR USE WITH OR DISTRIBUTION TO THE PUBLIC. 39

41 PROPOSED INVESTMENT MENU FOR BOSTON MEDICAL CENTER AS PROVIDED IN RFP TIER I: RETIREMENT FUNDS PREMIER SHARE CLASS* Lifecycle 2010 Lifecycle 2015 Lifecycle 2020 Lifecycle 2025 Lifecycle 2030 Lifecycle 2035 Lifecycle 2040 Lifecycle 2045 Lifecycle 2050 Lifecycle Retirement Income TIER II: PASSIVE CORE CHOICES FIXED INCOME LARGE-CAP BLEND EQUITY INT L EQUITY Vanguard Total Bond Market Index S&P 500 Index International Equity Index TIER III: ACTIVE CORE CHOICES GUARAN- TEED** FIXED INCOME LARGE-CAP VALUE EQUITY LARGE-CAP BLEND EQUITY LARGE-CAP GROWTH EQUITY MID-CAP GROWTH EQUITY SMALL CAP BLEND INT L EQUITY REAL ESTATE TIAA Traditional Retirement Fixed Annuity PIMCO Total Return Eaton Vance Large Cap Value CREF Stock Variable Annuity MainStay Large Cap Growth Hartford Midcap ING Small Company Dodge & Cox International Stock DWS RREEF Real Estate Securities TIER IV: SELF-DIRECTED BROKERAGE ACCOUNT ADDITIONAL MUTUAL FUNDS *** Expanded choice of 800 no-transaction-fee mutual funds and thousands of transaction-fee funds * In addition to fees and expenses associated with the Lifecycle Funds, there are fees and expenses associated with the underlying investments. ** Any guarantees under annuities issued by TIAA are subject to TIAA's claims-paying ability. TIAA Traditional is a guaranteed insurance contract and not an investment for federal securities law purposes. *** Individual securities are not allowable investments in 403(b) plans. See appendix for two additional proposed menus. FOR INSTITUTIONAL INVESTOR USE ONLY. NOT FOR USE WITH OR DISTRIBUTION TO THE PUBLIC. 40

42 HOW TIAA TRADITIONAL AND TIAA STABLE VALUE COMPARE TIAA TRADITIONAL ANNUITY (RC) Plan type: 403(b), 410(a)/(k), 457(b) Public Primary collateral account: TIAA General Account Credit rate structure: Vintage structure for both new and old money Crediting rate reset frequency: New money, generally monthly; old money, annually Minimum crediting rate: 1%-3% Participant-initiated plan benefit withdrawals: Lump-sum withdrawal allowed within 120 days of termination, subject to a 2.5% surrender charge. Otherwise, withdrawals and transfers must be spread over an 84-month period (7 years) in monthly systematic payments Employer liquidity: Over 84 months with a 1.5% surrender charge TIAA STABLE VALUE A Fixed Annuity Providing Capital Preservation and Income Plan type: 403(b), 410(a)/(k), 457(b) Public Primary collateral account: TIAA Separate Account Credit rate structure: Single portfolio rate by pool (no vintages/buckets) Crediting rate reset frequency: Semiannually Minimum crediting rate: 1%-3% Participant-initiated plan benefit withdrawals: Fully liquid, no restrictions (90-day equity wash applies if competing funds exist). Transfers in are restricted for 30 days following a transfer out Employer liquidity: Within 90 days or two years, depending on interest-rate environment, with no surrender charge The TIAA Traditional Annuity is a guaranteed annuity backed by TIAA's claims-paying ability. TIAA Traditional guarantees your principal and a minimum interest rate (typically between 1% and 3%), plus it offers the opportunity for additional amounts in excess of the guaranteed rate. These additional amounts, when declared by the TIAA Board of Trustees, remain in effect for the "declaration year" that begins each March 1. Liquidity and withdrawal restrictions may apply. TIAA Stable Value is a guaranteed annuity contract issued by TIAA. Contributions from different plans are pooled together and deposited in a nonunitized pooled separate account of TIAA. TIAA Stable Value provides a guaranteed minimum rate of interest (typically between 1% and 3%), and the fulfillment of the guarantees provided for in the contract are primarily supported by the assets held in the separate account. If the assets in the separate account are insufficient to meet these obligations, the shortfall is supported by the General Account of TIAA, and is therefore subject to TIAA s claims-paying ability. This product is not a mutual fund, variable annuity or bank product. The obligations of TIAA are not insured by the FDIC or any other federal governmental agency. FOR INSTITUTIONAL INVESTOR USE ONLY. NOT FOR USE WITH OR DISTRIBUTION TO THE PUBLIC. 41

43 SIMULTANEOUS GOALS OF OUR PROCESS AND PLATFORM 1 HELP PLAN SPONSORS FULFILL THEIR FIDUCIARY RESPONSIBILITIES Plan sponsors should be focused on proper process 2 HELP IMPROVE PARTICIPANT OUTCOMES GOAL OF ERISA Measuring success (the correct scoreboard) should equal a larger monthly retirement check or a higher account balance or a combination of both FOR INSTITUTIONAL INVESTOR USE ONLY. NOT FOR USE WITH OR DISTRIBUTION TO THE PUBLIC. 42

44 PRICING FOR INSTITUTIONAL INVESTOR USE ONLY. NOT FOR USE WITH OR DISTRIBUTION TO THE PUBLIC. 43

45 LOW-FEE STRUCTURE FOR A FULL RANGE OF SOLUTIONS Full Range of Solutions Dedicated Client Service Team Advice and Counseling Services Communication Programs Annual Plan & Investment Reviews Enrollment Services Suite SOLE RECORDKEEPER 18 bps on plan assets Compliance & Fiduciary Services Open Investment Architecture Outsourced Administration Customized Employee Website Telephone Counseling Center FOR INSTITUTIONAL INVESTOR USE ONLY. NOT FOR USE WITH OR DISTRIBUTION TO THE PUBLIC. 44

46 THE DIFFERENCE FOR INSTITUTIONAL INVESTOR USE ONLY. NOT FOR USE WITH OR DISTRIBUTION TO THE PUBLIC. 45

47 THE DIFFERENCE SERVICE EXCELLENCE received 13 Best-in-Class awards in PlanSponsor magazine s annual Defined Contribution Survey. Overall, more than 88% of client respondents said they would recommend.* Market Size Small Plans ($5M - $50M) Large (> $200M - $1B) Mega (> $1B) Service Category - Participant Service Fees - Education Program - Asset Allocation Focus - Communication Materials - Education Program - Enrollment Assistance - Asset Allocation Focus - Reporting Timeliness - Retiree Services - Participant Service Fees Plan Sponsor Services - Form 5500 Accuracy - Responsiveness - Regulation Updates * Based on 133 client responses as of September 1, FOR INSTITUTIONAL INVESTOR USE ONLY. NOT FOR USE WITH OR DISTRIBUTION TO THE PUBLIC. 46

48 STANDS READY TO MEET THE GOALS OF BOSTON MEDICAL CENTER BMC GOAL Single-source provider SOLUTION Streamlined, web-based plan management; outsourced administration services Fulfill fiduciary / regulatory requirements Full regulatory support Coordinated, effective communication and education program High-touch, high-impact employee services Ensure retirement readiness Deliver advice to all participants to support retirement income planning Consolidate legacy assets to new platform s state-of-the-art OPS platform Expanded investment menu Open architecture; high-quality, low-cost investments* * Applies to mutual fund and variable annuity account expense ratios. Morningstar Direct (December 2009), based on Morningstar expense comparisons by category. FOR INSTITUTIONAL INVESTOR USE ONLY. NOT FOR USE WITH OR DISTRIBUTION TO THE PUBLIC. 47

49 BOSTON MEDICAL CENTER AND BENEFITS OF AN EXCLUSIVE RELATIONSHIP Streamlined High-Impact Simplified Consultative Plan Employee Investment Client Support = Management Services Monitoring HIGH- VALUE SERVICES ONE TEAM dedicated to serving your needs supports implementation of best-practice solutions that align with your benefits and workforce objectives ONE SOURCE for administration, recordkeeping and compliance services leads to better strategic plan management ONE PROVIDER for counseling, education and communication creates a consistent experience that is vital to increasing plan participation ONE PLATFORM for all investments makes it easy to monitor your menu ONE PRICE for all-inclusive services provides Boston Medical Center with the highest overall value FOR INSTITUTIONAL INVESTOR USE ONLY. NOT FOR USE WITH OR DISTRIBUTION TO THE PUBLIC. 48

50 MAKE A CHANGE FOR THE GOOD. SM FOR INSTITUTIONAL INVESTOR USE ONLY. NOT FOR USE WITH OR DISTRIBUTION TO THE PUBLIC. 49

51 APPENDIX FOR INSTITUTIONAL INVESTOR USE ONLY. NOT FOR USE WITH OR DISTRIBUTION TO THE PUBLIC. 50

52 SAMPLE PLAN IMPLEMENTATION TIMELINE Timeline Milestone Who Action Initial Conversion Meeting, Boston Medical Center and Mercer Introduce conversion team Review overall project, timeline and communication strategy with Boston Medical Center and Mercer Deliver Recordkeeping Agreement and any other legal documentation Deliver remittance file layout (if necessary) Upon Selection Prerequisite Activities BMC and Mercer Sign statement of work Finalize fund lineup and mapping strategy Endorse Recordkeeping Agreement Amendment and any other legal documents; Institutional Setup and Design document; and Institutional Contract Applications Provide current recordkeeping with letter of intent Request for Test Conversion File Requests test conversion file from current recordkeeper 3/15/10 (- 10 weeks) Communications Planning Test Conversion File BMC and Mercer Current Recordkeeper Delivers final communication strategy Approve communication & education plan Sends test conversion file to FOR INSTITUTIONAL INVESTOR USE ONLY. NOT FOR USE WITH OR DISTRIBUTION TO THE PUBLIC. 51

53 SAMPLE PLAN IMPLEMENTATION TIMELINE, CONTINUED Timeline Milestone Who Action 3/24/10 (- 8 weeks) Test Remittance File BMC Sends test remittance file to (if necessary) 5/19/10 (- 6 weeks) Blackout Notice Sends required blackout notice to all affected plan participants Sends prelaunch communications to all plan participants (if necessary) 6/9/10 (- 3 weeks) Complete Testing of Conversion File Concludes test file review Completes trial conversion process 6/24/10 (- 1 week) Enrollment Enrolls participants in accounts/contracts Sends Welcome Kit with PIN numbers, instructions, etc. to participants Blackout Period Begins Current Recordkeeper Initiates blackout period (determines timing) 6/30/10 (- 1 day) Plan Asset Valuation Current Recordkeeper Valuates plan assets at close of business FOR INSTITUTIONAL INVESTOR USE ONLY. NOT FOR USE WITH OR DISTRIBUTION TO THE PUBLIC. 52

54 SAMPLE PLAN IMPLEMENTATION TIMELINE, CONTINUED Timeline Milestone Who Action 7/1/10 (0 day) Asset Transfer Current Recordkeeper Wires plan assets to Conversion Initiated Reconciles data and assets at the plan level Final Conversion File Current Recordkeeper Sends final reconciled participant data to (delivery date determined by current recordkeeper) 7/9/10 (+ 5-7 days) Conversion Completed Blackout Ends Loads successfully all transactions to recordkeeping platform Sends Conversion Confirmation Statement to each affected participant; participants begin using TIAA- CREF services Provides Conversion Summary Report 8/30/10 (+ 30 days) Post-Conversion Process Ends Migrates all services from Conversion Team to Service Teams FOR INSTITUTIONAL INVESTOR USE ONLY. NOT FOR USE WITH OR DISTRIBUTION TO THE PUBLIC. 53

55 COMPREHENSIVE EDUCATION FINANCIAL EDUCATION SEMINARS: ON SITE & ON DEMAND NEW HIRE / EARLY CAREER Just Starting Out A Tax-Smart Way to Save for Retirement Investment Checkup Save for Tomorrow. Start Today MID-CAREER How Am I Doing? Understanding and Achieving Your Long-Term Financial Goals Are You on Target? Meeting Financial Challenges at Midcareer Five Habits of Highly Successful Investors APPROACHING RETIREMENT Your Retirement: A Personal Journey, A New Beginning Ready, Set, Retire! (5-10 years away) Retirement Countdown (1 year away) Your Retirement Income Options (1 year away) OTHER Charting Your Course: A Financial Guide for Women Investing for Life s Goals Tax-Smart Ways to Save and Invest Staying on Track in a Volatile Market A History of Strength and Stability IRA Education Workshop Web Seminar FOR INSTITUTIONAL INVESTOR USE ONLY. NOT FOR USE WITH OR DISTRIBUTION TO THE PUBLIC. 54

56 EASY-TO-READ QUARTERLY STATEMENTS Helping to Ensure Retirement Readiness ranked 7th out of 25 providers in DALBAR s survey of quarterly statements*, earning an overall score of compared to the industry average of * 12th Annual Trends and Best Practices in Investor Statements. FOR INSTITUTIONAL INVESTOR USE ONLY. NOT FOR USE WITH OR DISTRIBUTION TO THE PUBLIC. 55

57 PROPOSED INVESTMENT MENU FOR BOSTON MEDICAL CENTER MENU WITH REVENUE SHARE TIER I: RETIREMENT FUNDS PREMIER SHARE CLASS* Lifecycle 2010 Lifecycle 2015 Lifecycle 2020 Lifecycle 2025 Lifecycle 2030 Lifecycle 2035 Lifecycle 2040 Lifecycle 2045 Lifecycle 2050 Lifecycle Retirement Income TIER II: PASSIVE CORE CHOICES FIXED INCOME LARGE-CAP BLEND EQUITY INT L EQUITY Bond Index Institutional S&P 500 Index Institutional International Equity Index Inst l TIER III: ACTIVE CORE CHOICES GUARAN- TEED** FIXED INCOME BALANCED LARGE- CAP VALUE EQUITY LARGE- CAP GROWTH EQUITY MID- CAP VALUE EQUITY MID- CAP GROWTH EQUITY SMALL- CAP VALUE EQUITY SMALL- CAP GROWTH EQUITY WORLD REAL ESTATE NATURAL RESOURCES TIAA Traditional Retirement Fixed Annuity TIAA Stable Value Fixed Annuity Lord Abbett S/T Duration Income PIMCO GNMA PIMCO Total Return Templeton Global Bond T. Rowe Price Capital Appreciation Eaton Vance Large Cap Value Jennison Growth Mid-Cap Value Morgan Stanley Inst l Mid Cap Growth Columbia Small Cap Value Lord Abbett Developing Growth American Funds EuroPac DWS RREEF Real Estate Securities Jennison Natural Resources TIER IV: SELF-DIRECTED BROKERAGE ACCOUNT ADDITIONAL MUTUAL FUNDS *** Expanded choice of 800 no-transaction-fee mutual funds and thousands of transaction-fee funds * In addition to fees and expenses associated with the Lifecycle Funds, there are fees and expenses associated with the underlying investments. ** Any guarantees under annuities issued by TIAA are subject to TIAA's claims-paying ability. TIAA Traditional is a guaranteed insurance contract and not an investment for federal securities law purposes. *** Individual securities are not allowable investments in 403(b) plans. FOR INSTITUTIONAL INVESTOR USE ONLY. NOT FOR USE WITH OR DISTRIBUTION TO THE PUBLIC. 56

58 PROPOSED INVESTMENT MENU FOR BOSTON MEDICAL CENTER NONPROPRIETARY MENU TIER I: RETIREMENT FUNDS T. ROWE PRICE RETIREMENT* TIER II: PASSIVE CORE CHOICES T. Rowe Price Retirement Income GUARAN- TEED** FIXED INCOME LARGE-CAP BLEND EQUITY INT L EQUITY Vanguard Total Bond Market Index Vanguard 500 Index Investor Vanguard Total Int l Stock Index FIXED INCOME BALANCED LARGE- CAP VALUE EQUITY TIER III: ACTIVE CORE CHOICES LARGE- CAP GROWTH EQUITY MID- CAP VALUE EQUITY MID- CAP GROWTH EQUITY SMALL- CAP VALUE EQUITY SMALL- CAP GROWTH EQUITY WORLD REAL ESTATE NATURAL RESOURCES TIAA Traditional Retirement Fixed Annuity TIAA Stable Value Fixed Annuity Blackrock Inflation Protected Bond PIMCO GNMA PIMCO Total Return Templeton Global Bond Vanguard S/T Bond Index T. Rowe Price Capital Appreciation Eaton Vance Large Cap Value Jennison Growth Perkins Mid Cap Value Morgan Stanley Inst l Mid Cap Growth Columbia Small Cap Value Lord Abbett Developing Growth American Funds EuroPac DWS RREEF Real Estate Securities Jennison Natural Resources * In addition to fees and expenses associated with the Lifecycle Funds, there are fees and expenses associated with the underlying investments. ** Any guarantees under annuities issued by TIAA are subject to TIAA's claims-paying ability. TIAA Traditional is a guaranteed insurance contract and not an investment for federal securities law purposes. *** Individual securities are not allowable investments in 403(b) plans. TIER IV: SELF-DIRECTED BROKERAGE ACCOUNT ADDITIONAL MUTUAL FUNDS *** Expanded choice of 800 no-transaction-fee mutual funds and thousands of transaction-fee funds FOR INSTITUTIONAL INVESTOR USE ONLY. NOT FOR USE WITH OR DISTRIBUTION TO THE PUBLIC. 57

59 RETIREMENT PLANS AND PRODUCTS CONTRACT TYPES RETIREMENT PLANS Retirement Annuity (RA) Original contract type Individually owned Assets not mappable Group Retirement Annuity (GRA) Group contract Institution joins master trust agreement and individual certificates issued to employees Assets not mappable Retirement Choice (RC) Institution-controlled contract Assets mappable SUPPLEMENTAL PLANS Supplemental Retirement Annuity (SRA) Employee elective contributions Individually owned Assets not mappable Loans not available Group Supplemental Retirement Annuity (GSRA) Employee elective contributions Individually owned Assets not mappable Loans available Retirement Choice Plus (RCP) Institution-controlled contract Assets mappable Loans not available FOR INSTITUTIONAL INVESTOR USE ONLY. NOT FOR USE WITH OR DISTRIBUTION TO THE PUBLIC. 58

60 IMPORTANT INFORMATION Individual & Institutional Services, LLC and Teachers Personal Investors Services, Inc., members FINRA, distribute securities products. Advisory services offered by Advice and Planning Services, a division of Individual & Institutional Services, LLC, a Registered Investment Advisor. Annuity contracts and certificates are issued by Teachers Insurance and Annuity Association (TIAA) and College Retirement Equities Fund (CREF), New York, NY. products may be subject to market and other risk factors. See the applicable product literature, or visit tiaa-cref.org for details. Investment products are not FDIC insured, may lose value and are not bank guaranteed. You should consider the investment objectives, risks, charges and expenses carefully before investing. Go to tiaa-cref.org for a prospectus that contains this and other information. Please read the prospectus carefully before investing Teachers Insurance and Annuity Association-College Retirement Equities Fund (), New York, NY C47031 FOR INSTITUTIONAL INVESTOR USE ONLY. NOT FOR USE WITH OR DISTRIBUTION TO THE PUBLIC. 59

61 IMPORTANT INFORMATION, CONTINUED Retirement Annuity (RA) TIAA Contract form series /CREF Certificate series C STD.1; Group Retirement Annuity (GRA) Contract form series G or G ; G or G (not available in all states)/cref Certificate series CG ; Supplemental Retirement Annuity (SRA) TIAA Contract form series /CREF Certificate series ; Group Supplemental Retirement Annuity (GSRA) TIAA Contract form series G (GSRA s are not available in all states)/cref Certificate series CG1250.1; Retirement Choice (RC) TIAA Contract form Series - IGRS-01-5-ACC, IGRS ACC, and IGRS ACC/ TIAA Certificate series - IGRS-CERT1-5-ACC, IGRS-CERT1-60-ACC, IGRS-CERT1-84-ACC/ CREF Contract form series: CIGRS/CREF Certificate series: CIGRS-CERT1; Retirement Choice Plus (RCP) TIAA Contract form series - IGRSP-01-5-ACC, IGRSP ACC, IGRSP ACC/ TIAA Certificate series - IGRSP-CERT1-5-ACC, IGRSP-CERT1-60-ACC, IGRSP-CERT1-84-ACC/CREF Contract form series: CIGRSP CREF Certificate series: CIGRSP-CERT Teachers Insurance and Annuity Association-College Retirement Equities Fund (), New York, NY C47031 FOR INSTITUTIONAL INVESTOR USE ONLY. NOT FOR USE WITH OR DISTRIBUTION TO THE PUBLIC. 60