For Institutional Investor Use Only. Not for use with or distribution to the public.

Employee Engagement

Strategies: The Cornerstone

for Successful Retirement

Outcomes

Connie Weaver,

Executive Vice President

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The world used to be very simple

Richard F. Niebling, Teacher, English Department Phillips Exeter Academy, 1961

| 3 For Institutional Investor Use Only. Not for use with or distribution to the public.

Then it got complicated

Plan Set-up and Design

Approved Plan Investment providers

Establish fiduciary process

Written Plan Document

Universal Availability Requirement

Administrative Procedures

Employer Contributions

Compliance with Plan Audit

Investment menu construction

Multi-generational workforce with

Increasingly complex needs and decisions

Compliance with 5500 filings

Loans and Remittance

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4. Investment

Selection

“Which

investment choices

are best for me?”

External factors drive an increasingly complex decision tree for

Plan Sponsors and Participants….

2. Investment

Selection

“What

investment choices

are best for our

employees?”

“How should

I start?”

5. Awareness and

Planning

“Who can

I trust to give

me advice?”

6. Advisory

1. Recordkeeping

“Who can

we trust

to administer our plan?”

3. Plan Selection

“Which plan

provider do I

trust my retirement

money with ?”

“What’s the

best way to receive

retirement income?”

7. Income

Distribution

B2B

B2C

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Our “Co-Operative” view…enables “Outcomes that Matter”

Plan Provider

Advisor Consultant

Plan Sponsor

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The “Co-Operative” analyst relationships in the Tech Industry

Corporate End Users/Customers

Customer’s IT Buyer

Customer’s

strategy

Content /Consulting

Tech Industry Analyst IT Providers

Advocacy

Consu

lting

IT S

erv

ices

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Plan Sponsor Services

But there is still a bifurcated approach to

defining and driving outcomes

Consulting and

services to

reduce cost,

drive efficiencies

and mitigate risk

Plan

Management

Programs are focused on two sets of customers:

Consulting and

features that

drive the best

employee actions

Plan

Design

Low cost

annuities and

access to a wide

variety of mutual

funds

Investment

Platform

Participant Services

Integrated advice

and education

programs to

drive action

toward financial

well-being

Employee

Engagement

TIAA-CREF’s areas of strength

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Our holistic, interdependent Co-Operative model includes

employee engagement – to achieve customer outcomes

…ensuring the

participant retires with

sufficient replacement

income

A dynamic

ecosystem with

one goal in mind…

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Look to the “science” of employee engagement

to drive better outcomes

Understand

the customer,

environment and their

needs

1 Segment based

on behavioral

characteristics

2 Draw on analysis to

bring together and

create the foundation

of the program

3

Create personalized,

relevant programs

that meet individual

needs

4 Measure to assess

outcomes and refine

programs

5

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Customer insights - the foundation of

our approach to achieving better outcomes

Insights

Historical Brand

Information

Consumer Quantitative

Consumer Qualitative

Institutional Qualitative

Win/Loss Study

Internal Interviews

Competitive Message

Audit

Approximately

8,000 consumers

surveyed

Included plan

sponsors, RIAs,

TPAs and

Consultants

Included front-

line employees

and senior

management

| 11 For Institutional Investor Use Only. Not for use with or distribution to the public.

A hierarchy of needs exists for employees – it dictates their

attitudes towards finances and retirement

Building a nest egg

Supporting life goals

Meeting basic financial demands

86% of young people agree

that retirement is an

important consideration;

51% feel other savings are

more important now1

26% of consumers have

clear savings and investing

goals and a plan to reach

them1

56% of consumers save as much

as they can – 48% still cannot save

as much as they'd like for

retirement, and 30% are very

worried about retirement1

1 Boston Consulting Group, 2011

For most, the aspiration

isn’t so much about

creating a secure

retirement, but managing

their present situation. An

education gap exists.

Planning for retired life

Living

the next

phase

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Engagement focuses on helping employees achieve financial

well-being–it starts by meeting them where they are!

You can’t

get people

from here to here

Working Living through a

secure

retirement

Paying

down

debt

Buying a

home

Managing

expenses

and money

problems

Finding a financial

advisor

Market

volatility

Figuring out

the plan for

retirement

income

Without engaging them about the things

that happen along the way

Putting kids

through

college

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Dollar Stretchers Living paycheck-to-paycheck

Accumulators

Leading comfortable, but

increasingly complex,

lifestyles while

accumulating assets

Transitioners

Shifting from

accumulation to

distribution

Established

Living in

retirement

Life Builders Focused on basic life aspirations

Segmentation provides the way to address individual needs of

customers and make a greater impact

| 14 For Institutional Investor Use Only. Not for use with or distribution to the public.

Customer needs drive the messaging, communication and

engagement in a sequenced and relevant manner

Tier 1:

Dollar

Stretchers

Tier 2:

Life Builders

Tier 3:

Accumulators

Tier 4:

Transitioner

Tier 5:

Established

Plan fundamentals

• Enroll in the plan

• Consolidate for simplicity

• Save to the match

• Diversify investments

High Priority High Priority High Priority Medium Priority NA

Financial fundamentals

• Learn the basics

• Make a budget

• Pay down debt

• Save for emergencies

• Insure for basic protection

High Priority High Priority Low Priority Medium Priority Medium Priority

Maximizing retirement savings

• Save to the max

• Use catch-up savings

• Save beyond the plan

• Save for retirement health expenses

Medium Priority Medium Priority High Priority High Priority Low Priority

Balancing interim goals

• Save for a home

• Plan for college

• Provide for elderly parents

• Save for discretionary goals

• Address complex needs

Low Priority High Priority High Priority

Medium Priority Low Priority

Planning for and living in retirement

• Make a retirement plan

• Manage and track income /

withdrawals

• Plan for the next generation

High Priority

(based on age) Low Priority Low Priority High Priority High Priority

SE

QU

EN

CIN

G B

Y P

RIO

RIT

Y

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Segment Analysis

Deep Dive Data Overlays

Program Design Based on Rigorous Diagnostics

The power of deep dive data analytics drives program

personalization, relevance and better outcomes

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Bringing art, science and technology together to deliver

personalized and actionable messaging…

5. Versioning call

to action

1. Plan level

4. Personalized

allocation data

3. Message driven by

segmentation

2. Participant level

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…and enabling the online experience to be highly

customized by needs

Steve Male, Dollar Stretcher

Maxine Female, Accumulator, IAS Client

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Delivering personalized, actionable messaging across all

channels can maximize outcomes

Digital Experience Phone Experience

Communications

and Education

Advertising and Direct Marketing

1:1 Advice and Planning

Seminars and

Workshops

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Measurement and planning establish benchmarks

and identify areas to dial up or down

Program by the Numbers

PlanFocus

Ongoing Business Planning

Segmentation

For Institutional Investor Use Only. Not for use with or distribution to the public.

Real

Results

For Institutional Investor Use Only. Not for use with or distribution to the public.

| 21 For Institutional Investor Use Only. Not for use with or distribution to the public.

Message Save More

Financial

Education Diversification

Goal Increase Savings Address financial

challenges

Drive Financial

Education Solutions

Call-to-Action Save More, Start today.

Understand the steps

you need to take. We can

help.

Make sure you’re

allocated appropriately

Components

- Budgeting tools

- Retirement Goal

Evaluator

- Drive to increase

contributions

- Budgeting tools

- Personal action plan

- Personal Advice

session

- Online Retirement

Advisor tool

- Review, reallocate,

rebalance

- Online Retirement

Advisor tool

- Personal Advice

session

Real Results #1: The power of segmentation - drive action

through a comprehensive, multi-channel campaign strategy

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Best practices can lead to positive outcomes

Lifestage

Dollar Stretcher Life Builder Accumulator Transitioner Established

Total

Employees* 168,125 262,001 218,483 117,281 29,374

Engaged

Employees* Response

Rate

13,505

8.0%

24,665

9.4%

26,522

12.1%

17,467

14.9%

3,922

13.4%

Employees*

Take Action Action Rate

9,885

73.2%

19,084

77.4%

20,963

79.0%

13,062

74.8%

2,961

75.5%

New Web

Registrants 1,941 2,447 1,741 802 201

Results based on TIAA-CREF 2012 national campaign to 795,264 participants. Response Rate = Engaged Participants/Total Participants.

Action Rate = Participants Taking Action/Engaged Participants. Contribution, advice and allocation results based on those who responded

8.0% 9.4% 12.1% 14.9% 13.4%

73.2% 77.4% 79.0% 74.8% 75.5%

| 23 For Institutional Investor Use Only. Not for use with or distribution to the public.

And real results

Resumed or

increased

contributions

16% Scheduled advice

sessions

22% Reallocated

51%

Results based on TIAA-CREF 2012 national campaign to 795,264 participants. Response Rate = Engaged Participants/Total Participants.

Action Rate = Participants Taking Action/Engaged Participants. Contribution, advice and allocation results based on those who responded

| 24 For Institutional Investor Use Only. Not for use with or distribution to the public.

Source: fr.wikipedia.org/wiki/California_Institute_of_Technology

Behavior

Low savings and contribution rates

Employees not actively managing accounts

Low participation in financial education seminars

and advice sessions

Focus on near-term needs overshadowing

long-term retirement planning

Demographics

Two Unique groups – Caltech campus and JPL

Diverse ethnic cultures/multiple languages with

different attitudes on savings

Population of reluctant retirees

Significantly lower savings rates among women

Source: fr.wikipedia.org/wiki/California_Institute_of_Technology

Real Results #2: Driving outcomes by igniting

engagement at Caltech

| 25 For Institutional Investor Use Only. Not for use with or distribution to the public.

Program Highlights – the “Science of Benefits”

Conducted segmentation research

Created end-to-end financial education program – including workshops,

individual counseling sessions, digital channels

Branded to resonate with target audience

50 workshops conducted over seven months

• Needs-based topics

Multilanguage

Special women’s track

Introduced Gamification: Financial IQ Quiz

| 26 For Institutional Investor Use Only. Not for use with or distribution to the public.

Caltech Results

Over 90% workshops attendees recommend to a friend

84% said workshop prompted them to take action

New IRA accounts increased 122%

Amount of contributions and rollovers to IRAs Doubled

Caltech campus Individual counseling sessions up 47%

Requests for a TIAA-CREF Wealth Mgt. Advisor up 26%

75% of employees who attended multiple sessions

reallocated or rebalanced their portfolio (vs. 26% of those

who did not attend a session)

21% increase among women in supplemental plan

participation; 16% for men

• Lastly, Jet Propulsion Lab (JPL) “Proudly Triumphed”

over Caltech in the battle for the Financial IQ trophy

| 27 For Institutional Investor Use Only. Not for use with or distribution to the public.

Only 26% of women are confident about their investment decisions.

More than half of American women are the primary breadwinners in

their households.

% of women in:

Higher Ed: 70%

Healthcare: 77%

Real Results #3: Build a comprehensive program to relate to

women’s specific needs and drive action

| 28 For Institutional Investor Use Only. Not for use with or distribution to the public.

Leading indicators improved significantly

37%

Over 5,500 employees at over 40+ institutions

164 Workshops

3 Interactive Large-Scale Community Events

4 Interactive On-Site Workshops

Personalized Online Content

Increased their

contributions an

average $1,200

(2X average)

73% Scheduled 1:1

appointment

Results are from TIAA-CREF Women to Women event attendees from 2011 through June 2013.

25%

Accumulators

4% Established

20% Dollar

Stretchers

32% Life

Builders

33% Prospects

19%

Transitioners

By segment: women reached

85% Rated the

workshops

valuable/highly

valuable

| 29 For Institutional Investor Use Only. Not for use with or distribution to the public.

Interactive Workshops

Social Media

& Community

One-on-one Planning Sessions

Video Series

& Webinars

Mentorship

Program

Sponsorship / Partnerships Women’s focused

communications

Personalized

online content Marquee Events

Women-to-Women: A 360° engagement strategy

| 30 For Institutional Investor Use Only. Not for use with or distribution to the public.

The impact of Advice

on actions and

outcomes

How plan design can affect

income replacement ratios

(i.e. loans)

Peer group

benchmarking

Savings rates and

replacement income

ratios

Income

replacement ratios

cross-referenced

by gender, age, tenure

Engagement & action

by life stage

Next Step - Relate the power of employee engagement to

retirement readiness through Plan Outcome Assessment

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Working “Co-Operatively” through the full plan cycle drives

outcomes that matter and retirement readiness

For Institutional Investor Use Only. Not for use with or distribution to the public.

| 33 For Institutional Investor Use Only. Not for use with or distribution to the public.

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