REVIEW OF TIAA-CREF CREF Money Market Account Fund Objective and Investment Approach The CREF Money Market Account is an active strategy focusing on short-term, high credit quality securities designed to generate high current income while maintaining liquidity and preserving capital. The variable annuity account invests primarily in money market securities that have been ranked in the highest category by at least two nationally recognized statistical rating organizations. In addition, the fund is allowed to invest up to 30% of its assets in money market and debt instruments of domestic and foreign issuers, denominated in U.S. dollars. The average weighted maturity of the account’s securities is 90 days or less, and the longest maturity, except in the case of certain U.S. government securities, is 397 days. Performance Commentary The CREF Money Market Account returned 2.44% for calendar year 2008, exceeding by 39 basis points the iMoneyNet Money Fund Average Index return of 2.05%. The year proved very eventful in commercial paper markets, as Lehman Brothers’ defaults contributed to a freeze in short-term lending between banks and to corporations, and net asset values (NAVs) of several money market funds fell below $1, a highly rare occurrence. The fourth quarter brought a historically low federal funds rate, putting pressure on money market funds and causing many to close or to waive fees. Over all longer time periods, the fund's returns have exceeded those of the Index. Strategy elements that contributed to the account’s consistent success include higher weightings to commercial paper than those in competing products, a laddered maturity approach, smaller investments in floating rate securities than those in competing products, and other factors that place the account ahead of the peer group in most periods. In addition, the account did not hold any commercial paper issued by Lehman Brothers, AIG, or Washington Mutual due to investment policies already in place, allowing the account to avoid losses in those institutions’ paper. Fund Characteristics CREF Money Market Account Total Fund Assets $15.1 billion 30 Day Yield 0.86% Average Maturity 47 days (weighted) Fees 0.54% Annually REVIEW OF TIAA-CREF CREF Money Market Account Historical Returns CREF Money Market iMoneyNet Money Fund Return Return Return Difference 1999 4.9 4.6 0.3 2000 6.4 5.9 0.5 2001 4.0 3.7 0.3 2002 1.5 1.3 0.2 2003 0.8 0.6 0.1 2004 1.0 0.8 0.2 2005 2.9 1.7 1.2 2006 4.7 3.8 0.9 2007 4.9 4.9 0.0 2008 2.4 2.0 0.4 Trailing 3-Year 4.0% 3.7% 0.3 Trailing 5-Year 3.2 2.9 0.2 Trailing 10-Year 3.3 3.1 0.3 Assessment The CREF Money Market Account has demonstrated outperformance versus its benchmark return over the prior ten calendar years. The account has achieved its objective of providing a reasonable level of current income while preserving capital. We recommend retention of this option.