Saving for Health Care Expenses in Retirement

2013 Benefits

This presentation is copyrighted © exclusively by Emeriti

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THE EMERITI PROGRAM during your working years

Your Institution’s Commitment

Giving you a tax-free way to pay your health care expenses in retirement

Providing access to group health insurance when you retire

Offering tax-free reimbursement for other health care expenses

Keeping you informed about retiree health care issues along the way

Your Institution is:

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Comprehensive Retirement Security

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403 (b) Retirement Plan

Accessible for general retirement expenses

Retiree income distribution is taxable

Beneficiaries

Assets passed to the estate

501 (c) (9) – VEBA Retiree Health Plan

Dedicated to health-related retirement expenses

Retiree health benefit distributions are tax-free

Dependents

Assets passed on for mutual benefit of the plan

Emeriti’s Core Benefit Components

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• Tax-advantaged savings and investment vehicle, via VEBA Trusts, for payment of future medical expenses in retirement

Emeriti Health Accounts

• Portable group retiree health insurance options building on the foundation of Medicare

Emeriti Health Insurance

• Tax-free reimbursement of other qualified medical expenses not covered by Medicare or Emeriti insurance options

Emeriti Reimbursement

Benefits

Emeriti

TIAA-CREF

Accumulation Recordkeeping

Trust Services Investment

Management

Proprietary Mutual Funds

Non Proprietary

Mutual Funds

Savitz

Disbursement Recordkeeping

Insurance Premiums

Qualifying Medical

Expenses

Debit Card Manual Claims

Aetna

Retiree Health Plans

HealthPartners

Retiree Health Plans

Emeriti’s Service Providers

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Your Institution Makes Tax-free Employer Contributions*

You Make After-tax Voluntary Contributions

Contributions and earnings disbursed tax free during retirement

You Receive Tax-Free Emeriti Reimbursement Benefits

You Pay for Emeriti Health Insurance Premiums Tax-Free

CONTRIBUTIONS DURING WORKING YEARS

Tax Advantages of Emeriti Health Accounts

DISBURSEMENTS DURING RETIREMENT INVESTMENTS

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*Begins at a pre-designated age. See your Summary Plan Description or talk to your benefits administrator. Your institution may make additional pre-tax contributions in lieu of salary or other benefits.

Your Assets Accumulate Tax-Free

• Lifecycle funds

• Asset diversification among asset classes

• Automatic rebalancing

TIAA-CREF Lifecycle Funds

(Retirement Class)

• A money market mutual fund

• Seeks to assure the value of your investment at $1 per share

TIAA-CREF Money Market Fund

(Retirement Class)

• Some TIAA-CREF proprietary funds

• Some non-proprietary funds from other mutual fund families

Additional Mutual Funds – based on

institution’s election

Investment Options in 2013

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CORE

FUNDS

CORE

PLUS

FUNDS

Why You Need to Save

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Source: EBRI estimates from the 2009 Medical Expenditure Panel Survey.

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Out-of-Pocket

13%

Private Insurance

14%

Medicare 59%

Other 14%*

*VA, Tricare, other private, Medicaid, other.

Medicare is Not Enough

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What Are You Saving For?

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Medicare

• Part B premium

• Part A deductible

• Part B deductible

• Part D deductible

• Part D Coverage Gap cost share

• Part D True Out-of-Pocket) TrOOP

Supplemental Insurance

• Premiums

• Plan deductibles

• Co-pays and co-insurance

Out-of-Pocket Expenses

• Vision

• Hearing

• Medical equipment

• Long-term care

• Nursing home

YEARS OF SAVING

Total: $122,709

Total: $52,397

$5,409

$12,000 $24,000

$28,397

$36,000

$86,709

$48,000

$216,012

$0

$50,000

$100,000

$150,000

$200,000

$250,000

$300,000

10 20 30 40

SAV

ING

S

The power of compounding Just by saving $100 monthly

Potential account earnings

Contributions

These examples are intended for illustrative purposes and are not a prediction of investment results. Your own Plan account may earn more or less than this example. Actual account balances will be determined by the contributions made and any investment gains or losses. Investing in this manner does not ensure a profit or guarantee against loss in declining markets. These examples do not take fees into account and actual balances will generally be reduced by fees. Contributions and earnings accrue tax-free and are paid out tax-free for reimbursement of qualified health expenses. These examples are based on $100 contributions made at the beginning of each month and a 7% annual rate of return compounded monthly. Chart balances shown are end-of-year balances.

Total: $264,012

Total: $17,409

Save Early and Consistently

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Keep This In Mind

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Tax diversity in retirement is key

WHY? Medicare cost shares are increasingly indexed to income: • Medicare Part B premiums • Medicare Part D premiums

Tax-free withdrawal of

$1,000 100 cents on the dollar

Pay with Emeriti Health Account

Taxable withdrawal of approximately

$1,250 80 cents on the dollar in 20% federal income tax bracket

Pay with 403(b) Retirement Plan

Tax Diversity in Retirement in Action

$1,000 medical

bill!

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Your Next Steps

Contact your benefits administrator to begin payroll deferred voluntary contributions

Keep an eye out for Emeriti’s life stage communications

Visit EmeritiHealth.org

Register on the Emeriti Benefits Dashboard at MyEmeritiBenefits.org

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ESSENTIAL SERVICES

Call toll-free: 1-866-EMERITI (1-866-363-7484) Monday – Friday 9:00AM to 5:30PM (ET)

• Annual workshops on campus

• National teleconferences

• Investment statement

• Benefits statement

• When you are saving

• When you are nearing retirement

• When you are using retiree health benefits

• Initial age-in kit at Medicare eligibility

• Annual insurance enrollment kit, thereafter

In print | In person | On phone

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DIGITAL SERVICES Online: access via EmeritiHealth.org

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DIGITAL SERVICES

• At-a-glance benefits website

• Register at MyEmeritiBenefits.org

• Check your Emeriti Health Account balance

• Log-in at tiaa-cref.org

• Comprehensive Program website

• Visit EmeritiHealth.org

• Online resource for insurance benefits and health information

• Check your insurance claims

• Order prescriptions online

• Access via EmeritiHealth.org

• Detailed investment information

• Prospectuses, fund fact sheets, performance reports

• Website in development

Online: access via EmeritiHealth.org

• Online resource for insurance benefits and health information

• Access via EmeritiHealth.org

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Log-in at TIAA-CREF.org • Investment choices • Account balances • Contribution history • Recent transactions

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TIAA-CREF Quarterly Statement - Investments Savitz Quarterly Statement – Benefits

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Register today at MyEmeritiBenefits.org • Health Account balances

• Health Insurance enrollments

• Reimbursement Benefit transactions

How to Use the Emeriti Service Center

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1-866-Emeriti

Thank you for calling Emeriti

Please listen carefully, as our menu has changed. YOU WILL HAVE 3 CHOICES

For information about Insurance Enrollment,

press 1

For information about the Reimbursement Benefit,

press 2

For information about the Health Accounts,

press 3

Status of 2012 Services Commitments

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• Improved Emeriti Service Center: 9am – 5:30pm ET 1-866-EMERITI • Dedicated Emeriti representatives

• Improved warm transfers

• Enhanced reimbursement benefit options: • Manual claims can be submitted via direct mail, fax, or uploaded to participant benefits dashboard,

starting in January

• New debit card option in development for 2013

• Online participant dashboard: • At-a-glance summary of Health Account activity, insurance plan information,

and reimbursement benefit transactions.

• Enhanced menu of investment funds and institutional Microsites: • Proprietary and non-proprietary fund choices • Microsites in development for 2013

• Quarterly statements: • Investment statement from TIAA-CREF • Health insurance and reimbursement benefit statement from Savitz

• Improved suite of life-stage communications for participants: • Retired participants • Participants nearing retirement • Younger active participants – in development for 2013

• Improved ACH savings opportunity from personal bank accounts: • Recurring and periodic lump sum savings option – in development for 2013

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Emeriti Program Fees

Fees Actives Retirees*

Emeriti $5.00 $5.00

TIAA-CREF $ .67 $ .67

Savitz $1.00 $6.00

Investment management fees are variable by selected mutual funds (see prospectuses)

Monthly Participant Fees

*Also applies to vested terminated employees

Your employer may cover all or some portion of the service fees. Check with your institution’s benefit administrator if you are uncertain.

Emeriti Retirement Health Solutions is not an insurance company, insurance broker or insurance provider. Summary Plan Description (SPD) This presentation is intended to provide you with a brief summary of some of the details of your Employer’s Emeriti Plan and the Emeriti Program. For a full summary of the terms of your Employer’s Emeriti Plan you must consult the SPD, which will be provided to you upon enrollment or upon request.

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Emeriti Retirement Health Solutions provided this information and is responsible for its content. Emeriti, TIAA-CREF, Savitz, Aetna Life Insurance Company, and HealthPartners are independent corporations and are not legally affiliated. The retirement healthcare program is offered by the employer. Teachers Insurance and Annuity Association (TIAA) will provide services to the plan and make available investment options. TIAA-CREF Trust Company, FSB provides investment management and trust services.

Investment Adviser Status Emeriti Retirement Health Solutions is a registered investment adviser for purposes of selecting the range of investment options for the Emeriti Program, selecting the investment manager for employer and voluntary employee contributions, and providing these and other impersonal educational materials to plan participants. Emeriti does not provide advice to participants about their individual investment selections. The participation interests in the voluntary employee contribution VEBA trusts associated with the Emeriti plans (the “Interests”) may be treated as securities under various state securities laws. The offering of these Interests is subject to compliance with any applicable state law. For residents of Georgia, the Interests are being offered in reliance on paragraph 13 of Code Section 10-5-9 of the Georgia Securities Act of 1973, as amended (the “Georgia Act”). The Interests may not be sold or

transferred except in a transaction which is exempt under the Georgia Act or pursuant to an effective registration under the Georgia Act.

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Addendum

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You pay first $325 as deductible

You pay 25% of drug costs

You pay 97.5% of brand drugs

You pay 79% of generic drugs

You pay 5%

Deductible Initial Coverage Period

Coverage Gap

Catastrophic Coverage

You reach Catastrophic Coverage at $4,750 in true out-of-pocket costs.

You reach the Coverage Gap at $2,970 in total Part D covered drug expenditures (includes plan deductible, your costs and plan costs in the Initial Coverage Period).

Four Components of Part D Benefit

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