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Kind 485APOS COLLEGE RETIREMENT EQUIT

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By Staff , in Investments , at December 20, 2021




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As filed with the U.S. Securities and
Alternate Fee on December 20, 2021
Registration File No. 33-00480 and File No. 811-04415

 

U.S. SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM N-3

 

  REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 x
  Pre-Efficient Modification No. o
  Submit-Efficient Modification No. 57 x
  REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 x
  Modification No. 63 x
  (Verify Applicable Field or Containers)  

 

Faculty Retirement Equities Fund

(Precise Identify of Registrant)

 

Not Relevant

(Identify of Insurance coverage Firm)

 

730 Third Avenue
New York, New York 10017-3206

(Tackle of Insurance coverage Firm’s Principal
Government Workplaces)

 

Insurance coverage Firm’s Phone Quantity,
together with Space Code: (212) 490-9000

 

  Identify and Tackle of Agent for Service:   Copy to:  
  Rachael M. Zufall, Esq.   Christopher P. Harvey, Esq.  
  Faculty Retirement Equities Fund   Adam T. Teufel, Esq.  
  8625 Andrew Carnegie Boulevard   Dechert LLP  
  Charlotte, North Carolina 28262   One Worldwide Place, 40th Flooring  
      100 Oliver Avenue  
      Boston, Massachusetts 02110  

 

Securities to be Registered: Pursuits in
an open-end administration funding firm for particular person and group
versatile cost deferred variable annuity contracts

 

Approximate Date of Proposed Public Providing:

As quickly as practicable after effectiveness
of the Registration Assertion.

 

It’s proposed that this submitting will develop into efficient (examine
acceptable field):

 

o Instantly upon submitting pursuant to paragraph (b)
o On (date) pursuant to paragraph (b)
o 60 days after submitting pursuant to paragraph (a)(1)
o 75 days after submitting pursuant to paragraph (a)(2)
x On March 10, 2022 pursuant to paragraph (a)(1)
o On (date) pursuant to paragraph (a)(2) of rule 485
   
If acceptable, examine the next field:
o This post-effective modification designates a brand new efficient date for a beforehand filed post-effective modification.

Preliminary Prospectus dated
December 20, 2021

 

Topic to Completion

 

The knowledge on this Prospectus
isn’t full and could also be modified. We might not promote these securities till the registration assertion filed with the Securities
and Alternate Fee is efficient. This Prospectus isn’t a proposal to promote securities and isn’t soliciting a proposal to purchase
these securities in any state the place the supply or sale isn’t permitted.

 

PROSPECTUS

APRIL [__], 2022

 

Faculty Retirement Equities Fund (CREF)

Particular person, group and tax-deferred variable annuity contracts

 

This
prospectus (“Prospectus”) describes the person, group and tax-deferred variable annuity contracts CREF provides.
It comprises info it is best to know earlier than buying a CREF variable annuity contract and deciding on your funding choices.
Please learn it fastidiously earlier than investing and hold it for future reference.

 

Funding in a CREF variable annuity
contract is topic to danger and you possibly can lose cash. CREF doesn’t assure the funding efficiency of its accounts, and
you bear all the funding danger. CREF offers variable annuities for retirement and tax-deferred financial savings plans for workers
of schools, universities, different academic and analysis organizations and different governmental and non-profit establishments. CREF’s
predominant goal is to take a position funds on your retirement and pay you revenue based mostly in your alternative of eight funding accounts, every
of which provides 4 courses (every, a “class”) of accumulation or annuity items (collectively, “items”),
Class R1, Class R2, Class R3 and Class R4:

 

Ticker
symbols
Class
R1
Class
R2
Class
R3
Class
R4
Inventory Account QCSTRX QCSTPX QCSTIX  
World Equities
Account
QCGLRX QCGLPX QCGLIX  
Development Account QCGRRX QCGRPX QCGRIX  
Fairness Index Account QCEQRX QCEQPX QCEQIX  
Core Bond Account QCBMRX QCBMPX QCBMIX  
Inflation-Linked
Bond Account
QCILRX QCILPX QCILIX  
Social Alternative Account QCSCRX QCSCPX QCSCIX  
Cash Market Account QCMMRX QCMMPX QCMMIX  

 

You or your employer should purchase a
CREF variable annuity certificates or contract (which collectively will likely be referred to on this prospectus as a “Contract”)
in reference to sure sorts of retirement plans. CREF provides the next sorts of contracts:

 

RA (Retirement Annuity)
(Class R1, R2, R3)

GRA (Group Retirement
Annuity) (Class R1, R2, R3)

SRA (Supplemental Retirement
Annuity) (Class R1, R2, R3)

GSRA (Group Supplemental
Retirement Annuity) (Class R1, R2, R3)

Retirement Alternative and
Retirement Alternative Plus Annuity (all Lessons)

GA (Group Annuity) and
Institutionally Owned GSRAs (Class R1, R2 and R3)

Conventional, Roth IRA
and Rollover (Particular person Retirement Annuity) together with SEP IRAs (Simplified Worker Pension Plans) (Class R1)

Keogh (Class R1)

ATRA (After-Tax Retirement
Annuity) (Class R2)

 

Topic to the phrases of your Contract if you’re a brand new investor,
you could possibly cancel your Contract inside 10 days of receiving it with out paying charges or penalties. In some states, this
cancellation interval could also be longer. Upon cancellation, you’ll obtain both a full refund of the quantity you paid along with your software
or your complete product worth. It’s best to evaluation this Prospectus, or seek the advice of along with your funding skilled, for extra info
in regards to the particular cancellation phrases that apply.

 

Extra details about sure funding merchandise, together with
variable annuities, has been ready by the Securities and Alternate Fee’s (“SEC”) workers and is offered
at Investor.gov

The SEC has not accepted
or disapproved these securities or handed upon the accuracy or adequacy of this prospectus. Any illustration on the contrary
is a prison offense.
The
CREF Accounts aren’t insured or assured by the U.S. Authorities, the Federal Deposit Insurance coverage Company or another governmental
company.

Desk of Contents [to be completed/updated for 485B filing]
   
Particular Phrases XX
Essential Data You Ought to Think about XX
Concerning the Contract XX
Overview of the Contract XX
Price and Expense Tables XX
Principal Dangers of Investing Within the
Contract
XX
Who We Are and Different Associated Data XX
CREF XX
The Accounts XX
Service Suppliers XX
Distribution XX
Voting Rights XX
The Annuity Contracts We Supply XX
Annuity Contracts XX
State Regulatory Approval XX
Contracts Can Differ Pursuant to State
Legal guidelines
XX
Adjustments to the Contract XX
Tax Deferral XX
Beginning Out and Easy methods to Buy a
Contract
XX
Premiums XX
Essential Details about Procedures
for Opening a New Account
XX
What this Means for You XX
Allocations of Premiums XX
How can I Request to Change My Funding
Allocations
XX
Accumulation Models XX
Figuring out the Worth of Your Contract
– Funding Accounts
XX
Variety of Accumulation Models XX
Can I Assign My Contract XX
Can I Cancel My Contract? XX
The Accumulation Interval and Funding
Choices
XX
Funding Choices XX
Different Funding Choices XX
Extra Funding Data and
Choices
XX
Sure Funds We Obtain with Regard
to the Funds
XX
Choice of Funds XX
Including, Closing, or Substituting Portfolios XX
Transfers and Entry to Your Cash XX
Overview XX
Transfers XX
Inside Transfers XX
Systematic Inside Transfers XX
Different Transfers XX
Transfers to and from TIAA Accounts XX
Transfers to Different Corporations XX
Transfers from Different Corporations and Plans XX
Market Timing and Extreme Buying and selling Coverage XX
Withdrawals and Surrenders XX
Lump Sum Profit XX
Systematic Withdrawals XX
Particular Guidelines for Withdrawals to Pay Advisory
Charges
XX
Loans XX
Extra Data on Transfers
and Withdrawals
XX
Switch and Withdrawal Restrictions XX
Easy methods to Request Transfers and Withdrawals XX

What are the Fees and
Bills beneath the Contract
XX
The Base Contract Price XX
Separate Account Cost XX
Mortality and Expense Threat Cost XX
Administrative Expense Cost XX
No Deductions from Premiums or Give up
Cost
XX
No Annual Contract Price or Administration
Account Price
XX
Different Fees and Bills XX
Premium Taxes XX
Fund Bills XX
Employer Plan Charges Withdrawals XX
Sellers XX
The Annuity Interval and Receiving Annuity
Earnings
XX
The Annuity Interval in Basic XX
The Annuity Beginning Date XX
Annuity Earnings Choices XX
Transfers In the course of the Annuity Interval XX
Annuity Funds XX
Calculating the Variety of Annuity Models
Payable
XX
Worth of Annuity Models XX
Advantages Out there Underneath the Contract XX
Demise Advantages XX
Selecting Beneficiaries XX
Your Partner’s Rights XX
Quantity of Demise Profit XX
Cost of Demise Profit XX
Strategies of Cost of Demise Advantages XX
Funds throughout Accumulation Interval XX
Funds throughout Annuity Interval XX
Taxes XX
Extra Data XX
Partner’s Rights to Advantages XX
Timing of Funds to You XX
Authorized Proceedings XX
Texas Non-obligatory Retirement Program Individuals XX
Our Monetary Situation XX
Statements and Studies XX
Monetary Statements XX
Easy methods to Receive Extra Data XX
Errors or Omissions XX
Householding XX
Basic info XX
Digital Prospectus XX
Data from CREF XX
Phone and Web Transactions XX
Buyer Complaints XX
Appendix A XX
Data Relating to the Accounts XX
   
   

Particular Phrases

 

The phrases and phrases beneath are outlined
so you’ll understand how they’re used on this prospectus. To grasp some definitions, you’ll have to check with different outlined
phrases.

 

Account. Any of CREF’s
funding portfolios. Every Account is a separate portfolio with its personal funding goal, which provides 4 courses of items.

 

Accumulation. The
complete worth of your accumulation items beneath the contract.

 

Accumulation Section.
The part throughout which funding account accumulations are held beneath a contract previous to their being annuitized or in any other case
paid out.

 

Accumulation Unit.
A share of participation in an funding account for somebody within the accumulation interval. Every class of every Account has its personal
accumulation unit worth, which generally adjustments day by day.

 

Annuitant. The pure
particular person whose life is utilized in figuring out the annuity funds to be obtained. You’re the Annuitant beneath the contract.

 

Annuity Companion. The
particular person you title, in case you select to obtain revenue beneath a two-life annuity, to obtain an revenue for all times if she or he survives
you. In some contracts, this particular person is known as the second annuitant.

 

Annuity Section. The
part throughout which funding account accumulations are annuitized or in any other case paid out.

Annuity Unit. A measure
used to calculate the quantity of annuity funds, which relies on the bills of Class R3 of every Account.

 

Beneficiary. Any
particular person or establishment you title, in a type passable to us, to obtain advantages in case you die throughout the accumulation interval or
in case you (and your Annuity Companion, in case you have one) die earlier than the tip of any assured interval.

 

Enterprise Day. Any day
the New York Inventory Alternate (“NYSE”) or its affiliated exchanges NYSE Arca Equities or NYSE American (collectively
with NYSE, the “NYSE Exchanges”) is open for buying and selling. A enterprise day usually ends at 4 p.m. Japanese Time or when
buying and selling closes on the NYSE Exchanges, if earlier. A enterprise day might finish early solely as of the newest closing time of the common
(or core) buying and selling session of any of the NYSE Exchanges.

 

Calendar
Day
. Any day of the 12 months. Calendar days finish similtaneously a Enterprise Day.

 

Class. Every Account points
4 courses of items (Class R1, Class R2, Class R3 and Class R4), which have totally different administrative and distribution bills.

 

Commuted Worth. The
current worth of annuity funds due beneath an revenue choice or methodology of cost not based mostly on life contingencies.

 

Companion CREF Certificates.
A companion certificates that was issued to you while you obtained your contract, or if not then, on the later date that you simply first
participated in CREF, if relevant.

 

Contract. The person,
group and tax-deferred variable annuity contracts described on this prospectus beneath the part “The Annuity Contracts
We Supply,” together with your certificates and any endorsements beneath the Contract.

Eligible Establishment. A
nonprofit establishment, together with any governmental establishment, organized in the US.

 

Employer. Your employer
is the group that remits your premiums that you simply make investments beneath your Contract.

 

Good Order. Precise
receipt of an order together with all info and supporting authorized documentation essential to impact the transaction. This info
and documentation usually contains your full software (or full request for redemptions, transfers, or withdrawals
of cost of demise or different advantages) and another info or supporting documentation we might require. With respect to buy
requests, “good order” additionally usually contains receipt of adequate funds by us to impact the transaction. We might,
in our sole discretion, decide whether or not any specific transaction request is in good order and reserve the correct to alter
or waive any good order requirement at any time both typically or with respect to a specific plan, contract or transaction.
As well as, additionally it is doable that if we’re unable to succeed in you to acquire extra or lacking info regarding incomplete
purposes, or transaction requests aren’t in good order, the transaction could also be cancelled.

 

Assured Interval.
The interval throughout which annuity funds remaining due after your demise and the demise of your Annuity Companion, if any, will proceed
to be paid to the payee named to obtain them.

 

Earnings Change Methodology.
The way you select to have your annuity funds revalued. Underneath the annual revenue change methodology, your annuity funds are revalued
as soon as every year. Underneath the month-to-month revenue change methodology, your annuity funds are revalued each month.

Earnings Possibility. Any
of the methods you may elect to obtain your annuity revenue. Additionally it is known as an “annuity choice”

 

Participant. Any particular person
who owns a CREF Contract. Typically an employer generally is a participant.

 

Faculty Retirement Equities Fund Prospectus 5

Premiums. Monies invested
to buy Accumulation Models in an Account.

 

TIAA. Academics Insurance coverage
and Annuity Affiliation of America, which is the companion group of CREF. TIAA provides variable and glued annuities like
TIAA Conventional, TIAA Actual Property Account and TIAA Entry, which can be provided alongside the CREF Accounts. TIAA can also be the
dad or mum firm of CREF’s funding adviser and distributor, and serves as CREF’s administrator.

 

You or Your. This implies
any contract proprietor or any potential contract proprietor. In sure situations, in accordance with the phrases of your employer plan,
your employer might train or restrict sure rights beneath your contract or certificates.

 

Valuation Day Any Enterprise
Day.

 

Faculty Retirement
Equities Fund
Prospectus 6

IMPORTANT INFORMATION YOU SHOULD CONSIDER
ABOUT THE CONTRACTS

 

 
Charges
and Bills
Location
in

Prospectus
Fees
for Early Withdrawals


None

 

[column
to be updated prior to 485B filing]
Transaction
Fees

•The
Contract doesn’t impose a transaction cost nor a switch cost.

 

•At the moment, TIAA doesn’t cost CREF individuals for transfers of their accumulations
to the TIAA Conventional annuity product. Nevertheless, TIAA reserves the correct to cost CREF individuals within the accumulation
part a charge on transfers to TIAA Conventional sooner or later. CREF individuals will obtain prior discover of the imposition
of such a switch charge.

 
Ongoing
Charges and Bills (annual fees
)
The desk beneath describes
the charges and bills that you could be pay every year, relying on the choices you select. Please check with your Contract
specs web page for details about the particular charges you’ll pay every year based mostly on the choices you could have elected.
 
         
  Annual
Price
Minimal Most    
  Annual
Contract Bills (Varies by Contract Account and Class) (as a share of common annual internet property)
% %    
  Non-obligatory
advantages out there for a further cost (for single optionally available profit, if elected)
N/A N/A    
             
As a result of
your Contract is customizable, the alternatives you make have an effect on how a lot you’ll pay. That can assist you perceive the price of proudly owning
your Contract, the next desk exhibits the bottom and highest value you possibly can pay every year, based mostly on present fees.
This estimate assumes that you don’t take withdrawals from the Contract.

 

Faculty Retirement
Equities Fund
Prospectus 7

Lowest Annual Value: $__ Highest
Annual Value: $__

Assumes:

 

• Funding of $100,000

• 5% annual appreciation

• Least costly mixture of Contract Lessons and Account administration charges

• No optionally available advantages

• No gross sales fees

• No extra buy funds, transfers or withdrawals

 

Assumes:

 

• Funding of $100,000

• 5% annual appreciation

• Costliest mixture of Contract Lessons, Account administration charges and optionally available advantages

• No gross sales fees

• No extra buy funds, transfers or withdrawals

 

 

RISKS Location
in Prospectus
Threat
of Loss

You’ll be able to lose cash by investing in your Contract, together with lack of principal.
 
Not
a Quick-Time period Funding


The Contract isn’t designed for short-term investing and isn’t acceptable for an investor
who wants prepared entry to money.

 

• The advantages of a tax deferral product, including premiums over time to the worth of your
Contract and long-term revenue means the Contract is mostly extra helpful to traders with a long run horizon.

 

 
Dangers
Related to Investments


An funding within the Contract is topic to the danger of poor funding efficiency.
Efficiency can range relying on the efficiency of the Accounts that you simply select beneath
the Contract.

 

• Every Account has its personal distinctive dangers.

 

• It’s best to evaluation the Accounts earlier than investing determination.

 

 
Insurance coverage
Firm Dangers

An funding within the Contract is topic to dangers associated to CREF, and any obligations, ensures or advantages of the Contract
are topic to CREF’s claims-paying means. CREF might not be capable of meet its obligations to you. Details about
CREF is offered upon request, by calling [1.877. XXX.XXXX or by visiting tiaa.org/XX.]
 

 

RESTRICTIONS Location
in Prospectus
Investments


Although the Accounts can be found beneath the phrases of your Contract, they might not be out there
beneath the phrases of your employer’s plan. You could solely spend money on these Accounts
out there beneath the phrases of your employer’s plan and this prospectus.

 

• Your employer’s plan might impose extra restrictions, together with restrictions
on allocations of premiums and transfers of accumulation. Please see your employer’s plan.

 

 

 

Faculty Retirement
Equities Fund
Prospectus 8

 


We have now adopted insurance policies and procedures to discourage market timing and extreme transaction
exercise.

 

• We reserve the correct so as to add or shut Accounts, substitute one other Account
with out your consent, or mix Accounts. A substituted Account might have totally different charges and bills.

 

 
Non-obligatory
Advantages


Sure optionally available advantages are topic to a minimal greenback quantity. We reserve the correct
to cancel optionally available advantages at any time.

 

•There are restrictions on the frequency of transactions inside a sure interval.

 

• We might terminate the switch characteristic of the Contract at any time.

 

 

 

TAXES Location
in Prospectus
Tax
Implications


It’s best to seek the advice of with a tax skilled to find out the tax implications of an funding
in and buy funds obtained beneath the Contract.

 

• Withdrawals in your Contract will likely be topic to unusual revenue tax and could also be topic
to tax penalties if taken earlier than age 59½.

 

• Typically, you aren’t taxed till you make a withdrawal from the Contract.

 

• Premium taxes might apply with respect to the Contract.

 

• If you buy the Contract by way of a tax-qualified plan or particular person retirement account
(IRA), you don’t get any extra tax profit.

 

 
     
CONFLICTS OF INTEREST Location
in Prospectus
Funding
Skilled Compensation


No commissions are paid in reference to the distribution of the Contracts, though
CREF reimburses TIAA-CREF Particular person & Institutional Providers, LLC for its bills
incurred within the gross sales of the Contracts.

 

• Some professionals might obtain compensation for promoting the Contract to traders e.g.,
commissions, income sharing, compensation from associates and third events.

 

 

Faculty Retirement
Equities Fund
Prospectus 9

 
These professionals might have a monetary incentive to supply or advocate the Contract over one other funding.
 
Exchanges
Some funding professionals might have a monetary incentive to give you a brand new contract rather than the one you already personal.
It’s best to solely alternate your Contract in case you decide, after evaluating the options, charges, and dangers of each contracts,
that it’s preferable so that you can buy the brand new contract relatively than proceed to personal the present Contract.
*

 

OVERVIEW OF THE CONTRACT

 

Function of the Contract

 

The Contract is a tax-deferred variable annuity contract. It
is designed for retirement planning functions and that will help you accumulate property by way of investments within the Accounts. The worth
of your investments or accumulation items is used to calculate your advantages beneath the Contract. On the finish of the buildup
part, we use that accumulation to calculate the funds that we make throughout the annuity part. These funds can present or
complement your retirement revenue. Typically talking, the longer your accumulation part, the better your collected worth
could also be for setting your annuity payouts and optionally available advantages. The Contract additionally contains an ordinary demise profit to assist financially
shield your designated beneficiary.

 

This Contract could also be acceptable for you in case you have a protracted
funding time horizon. Any withdrawals made throughout the accumulation part will cut back the buildup of the Contract. As a result of
withdrawals will likely be topic to unusual revenue tax and could also be topic tax penalties on early withdrawals if taken earlier than age 59½,
the Contract isn’t meant for people who might have to entry invested funds inside a short-term timeframe or on a frequent
foundation. As well as, the Contract isn’t meant for people who intend to interact in frequent transfers of the funding
accounts.

 

Your monetary purpose in buying the Contract ought to be constant
with a long-term insurance coverage product for retirement revenue or different long-term funding functions
o
ffering the prospect of progress by way of the funding of premiums within the Accounts.

 

Phases of the Contract

 

The contract has two phases: (1) an accumulation part (for
financial savings) and (2) an annuity part (for revenue).

 

Accumulation Section.

 

In the course of the accumulation part, earnings accumulate on a tax-deferred
foundation and are taxed as revenue while you make a withdrawal. Premium funds made throughout the accumulation part are topic to your
employer’s plan and IRC limits and should proceed till the annuity beginning date.

 

To build up worth throughout the accumulation part, it’s possible you’ll allocate
your premiums and earnings into a number of Accounts which can be out there beneath the Contract and your employer’s plan. At the moment,
CREF provides eight Accounts: Inventory, World Fairness, Development, Fairness Index, Core Bond, Inflation-Linked Bond, Social Alternative and Cash
Market. Every Account has totally different funding methods, aims and danger profiles. Quantities that you simply allocate to an Account
will enhance or lower in greenback worth relying on the funding efficiency of the Account.

 

You bear the danger of any decline within the steadiness of your Contract
ensuing from the efficiency of the Accounts you could have chosen. Your accumulation worth might decline considerably, and there
is a danger of lack of all the quantity invested. It’s best to think about the funding aims, dangers, and fees and bills
of every Account fastidiously earlier than investing determination. Extra details about every Account is offered in Appendix
A on the finish of this Prospectus.

 

Annuity Section.

 

You enter the revenue part while you annuitize your Contract.
The annuity part happens after the annuity beginning date and while you or a second annuitant start receiving common annuity funds
out of your Contract. In the course of the revenue part, you’ll obtain a stream of mounted revenue funds for the annuity payout interval
of time you choose. Topic to the provisions beneath your Contract and your employer’s plan, you may elect any one of many
following choices to obtain annuity

 

Faculty Retirement
Equities Fund
Prospectus 10

funds: (1) one-life annuity with or with no assured
interval; (2) annuity for a hard and fast interval; (3) two-life annuities; (4) minimal distributions; (5) lump-sum funds; and (6) Earnings
Take a look at Drive. Please notice that while you annuitize, your investments are transformed to revenue funds and you’ll not have the ability
to make any extra withdrawals out of your Contract. In the course of the annuity part, your annuity items will proceed to be allotted
to the Accounts chosen by you. All accumulation part advantages terminate upon annuitization, together with the usual demise profit.

 

Please notice that while you annuitize, your accumulation will
be transformed to revenue funds. In the event you elect partial annuitization, it’s possible you’ll apply a portion of your accumulation to one of many
revenue cost choices that we provide, whereas the rest of your accumulation can stay invested in your funding account.
Whenever you absolutely annuitize your whole accumulation, usually, you’ll not be capable of make withdrawals out of your contract
and all accumulation part advantages terminate, together with the demise profit.

 

Contract Options

 

The contract offers for the buildup of retirement financial savings
and revenue. The contract provides revenue, demise profit safety and numerous payout choices.

 

Accessing Your Cash. Earlier than your Contract is
annuitized, you may take withdrawals out of your contract. Withdrawals might cut back your account worth, will likely be topic to unusual
revenue tax and could also be topic to tax penalties in case you take a withdrawal earlier than age 59½.

 

Tax Therapy. You
can switch cash between Accounts with out tax implications, and earnings (if any) in your investments are usually tax-deferred.
You might be taxed solely upon: (1) making a withdrawal; (2) give up of the Contract; (3) while you obtain an revenue cost from the
Contract; or (4) cost of a demise profit
.

 

Demise Profit. The Contract contains an ordinary
demise profit, which pays a demise profit to your designated beneficiary on the time of your demise.

 

Loans. To the extent your
employer’s plan offers and in accordance with sure different circumstances, it’s possible you’ll request a mortgage out of your out there funding
account accumulations and it should be requested earlier than your annuity beginning date.
The mortgage
will likely be issued in accordance with the phrases of a mortgage settlement and the mortgage settlement will describe the phrases, circumstances and
any charges or fees for the mortgage.

 

Extra Options

 

Systematic Withdrawals. Topic to the provisions
beneath your Contract, you’ll have withdrawals redeemed from a number of of the Accounts on a scientific foundation. Systematic withdrawals
are usually topic to a minimal quantity of $100 and could also be scheduled to be paid semi-monthly, month-to-month, quarterly, semi-annually
or yearly. Withdrawals might decrease your Contract worth, will likely be topic to unusual revenue tax and could also be topic to a tax penalty
if taken earlier than age 59½.

 

Systematic Transfers. Topic to the provisions
beneath your Contract, systematic transfers between Accounts are usually topic to a minimal quantity of $100. Systematic transfers
could also be scheduled semi-monthly, month-to-month, quarterly, semi-annually or yearly.

 

Systematic Withdrawals to Pay Advisory Charges. Topic
to the provisions beneath your Contract, it’s possible you’ll authorize a sequence of systematic withdrawals to pay the charges of your monetary
advisor. Withdrawals will decrease your Contract worth.

 

Price and Expense Tables of every Contract

 

The next tables describe
the charges and estimated bills that you’ll pay when shopping for, proudly owning, surrendering, or making withdrawals from the Contract.
TIAA or subsidiaries of TIAA present or organize for the supply of companies for CREF “at value” to TIAA and its associates.
Please check with your Contract specs web page for details about the particular charges you’ll pay every year based mostly on the
choices you could have elected.

 

The primary desk describes the
charges and estimated bills that you’ll pay on the time that you simply purchase the Contract, give up or make withdrawals from
the Contract, or switch Contract worth between Accounts. State premium taxes might also be deducted. These charges and bills do
not replicate any advisory charges paid to monetary intermediaries out of your Contract worth or different property. If such fees had been
mirrored, the charges and bills can be larger.
Along with these bills, you
might also be impacted by the consequences of TIAA plan pricing preparations (as mentioned in additional element within the part entitled
“Data from TIAA: TIAA plan pricing and employer plan charges” beneath).

For instance, since all Class R4 individuals take part by way of employer retirement plans,
the whole expense to every Class R4 participant would come with, along with the CREF bills described on this Prospectus, plan-level
charges for TIAA recordkeeping that the plan passes on to the participant.

 

Transaction Bills

 

Faculty Retirement
Equities Fund
Prospectus 11

  Cost
on All Accounts
  Class
R1
Class
R2
Class
R3
Class
R4
Gross sales
Load Imposed on Purchases (as a share of premiums
None None None None
Deferred
Gross sales Load (or Give up Cost) (as a share of premiums or quantity surrendered, as relevant)
None None None None
Alternate
Price or Redemption Price*
None None None None

 

*
At the moment, TIAA doesn’t cost CREF individuals for transfers of their accumulations to the TIAA Conventional annuity product.
Nevertheless, TIAA reserves the correct to cost CREF individuals within the accumulation part a charge on transfers to TIAA Conventional in
the long run. CREF individuals will obtain prior discover of the imposition of such a switch charge.

 

The subsequent
desk describes the charges and bills of every Account that you’ll pay every year throughout the time that you simply personal the Contract.
Not one of the Accounts cost any “Administrative Bills,”
which means
any Contract, Account or comparable charge imposed on all individuals on a greenback foundation and charged on a recurring foundation, nor does any
Account cost any “Non-obligatory Advantages Bills.”

 

Annual
Contract Bills

(as a share of common internet property)

 

          Base contract bills     Administration
Charges
    Different
Bills:
Administrative
Bills
Different
Expense:
Distribution
Bills
    Whole annual
contract
bills
                       
Inventory Account                    
Class R1                        
Class R2                        
Class R3                        
                         
Class R4                        
World Equities Account                    
Class R1                        
Class R2                        
Class R3                        
                         
Class R4                        
Development Account                    
Class R1                        
Class R2                        
Class R3                        
                         
Class R4                        
Fairness Index Account                    
       
Faculty Retirement Equities Fund Prospectus 12

Class R1                        
Class R2                        
Class R3                        
                         
Class R4                        
Core Bond Account                    
Class R1                        
Class R2                        
Class R3                        
                         
Class R4                        
Inflation-Linked Bond Account                    
Class R1                        
Class R2                        
Class R3                        
                         
Class R4                        
Social Alternative Account                    
Class R1                        
Class R2                        
Class R3                        
                         
Class R4                        
Cash Market Account                    
Class R1                        
Class R2                        
Class R3                        
                         
Class R4                        
 

Instance

 

This Instance is meant that will help you examine the price of investing
within the Contract with the price of investing in different variable annuity contracts. These prices embrace transaction bills, annual
Contract bills, and Account working bills. Along with these bills, you might also be impacted by the consequences of TIAA
plan pricing preparations. For instance, since all Class R4 individuals take part by way of employer retirement plans, the whole
expense to every Class R4 participant would come with, along with the CREF bills described on this Prospectus, plan-level charges
for TIAA recordkeeping that the plan passes on to the participant.

 

The Instance assumes that you simply make investments $100,000 within the Contract
for the time intervals indicated and give up your Contract on the finish of every of those time intervals. The Instance additionally assumes that
your funding has a 5% return every year and assumes the most costly mixture of Account working bills. We don’t impose
a give up cost while you make a withdrawal nor can we cost for any elected optionally available profit beneath the Contract. Consequently,
your Contract worth can be the identical whether or not or not you give up, or annuitize on the finish of the relevant time interval. Though
your precise prices could also be larger or decrease, based mostly on these assumptions, your prices can be:

 

  1 12 months   3 years   5 years   10 years  
                 
Inventory Account              
Class R1                
Class R2                
       
Faculty Retirement Equities Fund Prospectus 13

  1 12 months   3 years   5 years   10 years  
                 
Class R3                
                 
Class R4                
World Equities Account              
Class R1                
Class R2                
Class R3                
                 
Class R4                
Development Account              
Class R1                
Class R2                
Class R3                
                 
Class R4                
Fairness Index Account              
Class R1                
Class R2                
Class R3                
                 
Class R4                
Core Bond Account              
Class R1                
Class R2                
Class R3                
                 
Class R4                
Inflation-Linked Bond Account              
Class R1                
Class R2                
Class R3                
                 
Class R4                
Social Alternative Account              
Class R1                
Class R2                
Class R3                
                 
Class R4                
Cash Market Account              
Class R1                
Class R2                
Class R3                
                 
Class R4                

 

Portfolio Turnover

 

The Accounts pay transaction prices, corresponding to commissions, when
they purchase and promote securities (or “flip over” their portfolios). A better portfolio turnover price might point out larger
transaction prices. These prices, which aren’t mirrored in annual Contract bills or within the instance, have an effect on an Account’s
efficiency. Throughout the latest fiscal 12 months, the Accounts’ portfolio turnover charges had been the next percentages of
the common worth of their portfolios:

 

Inventory Account:

       
Faculty Retirement Equities Fund Prospectus 14

World Equities Account:

 

Development Account:

 

Fairness Index Account:

 

Core Bond Account:

 

Inflation-Linked Bond Account:

 

Social Alternative Account:

 

Cash Market Account:

 

PRINCIPAL RISKS OF INVESTING IN THE CONTRACT

 

Investing within the Contracts includes dangers. The next are
the principal dangers of an funding within the Contract. It’s best to fastidiously think about the beneath dangers along with the opposite info
contained on this Prospectus. Extra dangers and particulars relating to numerous dangers and advantages of investing within the Contract are
described in different sections of the Prospectus and within the SAI. These embrace extra particular dangers that every Account could also be topic
to, that are detailed in Appendix A. The Contract could also be topic to extra dangers apart from these recognized and described
within the Prospectus and SAI.

 

Threat of Loss. The Contract is topic to market danger (the
danger that your investments might decline in worth or underperform your expectations). Consequently, you may lose cash by investing
within the Contract, together with lack of principal. An funding within the Contract isn’t a financial institution deposit and isn’t assured by the
U.S. Authorities, the Federal Deposit Insurance coverage Company or another governmental company.

 

Not a Quick-Time period Funding. This Contract isn’t a short-term
funding and isn’t acceptable for an investor who wants prepared entry to money. The Contract
is meant for retirement financial savings or different long-term funding functions. The advantages of tax deferral additionally means the contract
is extra helpful to traders with a very long time horizon. It’s not appropriate as a short-term financial savings car. This implies in case you
plan to withdraw cash or give up the contract for short-term wants, it might not be the correct contract for you.
In the event you
make early withdrawals, it’s possible you’ll be topic to pay unusual revenue tax, together with a tax penalty if you’re beneath age 59½.

 

Funding Threat. As
with all variable annuities, an funding within the Contract is topic to the danger of poor funding efficiency of the Accounts.
Efficiency can range relying on the efficiency of the Accounts you chose which can be out there beneath the Contract. You bear
the danger of any decline within the account steadiness of your Contract ensuing from the efficiency of the Accounts you could have chosen.
Your account worth might decline considerably, and there’s a danger of lack of all the quantity invested. It’s best to evaluation the
Accounts fastidiously earlier than investing determination.

 

Every Account could have its personal distinctive dangers. We don’t assure
the funding efficiency of the Accounts, and also you bear all the funding danger. Extra info relating to the
Accounts out there beneath your Contract is offered beneath on this Prospectus beneath “Appendix A –Data Relating to
the Accounts.”

 

Dangers Related to CREF. An funding within the Contract
is topic to dangers associated to CREF and any obligations, ensures or advantages of the Contract are topic to CREF’s total
monetary power and claims-paying means. You will need to notice that there is no such thing as a assure that we are going to at all times be capable of
meet our claims-paying obligations, and that there are dangers to buying any variable annuity. The “mortality danger”
of every Account is shared amongst those that obtain revenue from it and isn’t assured by both CREF or TIAA. Details about
CREF is offered upon request, by calling [1.877. 518.9161 or visiting TIAA’s website at: tiaa.org/XXXXXX].

 

Doable Antagonistic Tax Penalties. The tax guidelines relevant
to the Contracts range in response to the kind of retirement plan and the phrases and circumstances of the plan. Your rights beneath a Contract
could also be topic to the phrases of the retirement plan itself, whatever the phrases of the Contract. Antagonistic tax penalties might
consequence if contributions, distributions, and different transactions with respect to the Contract aren’t made or effected in compliance
with the regulation. We can not present detailed info on all tax features of the Contracts. Furthermore, the tax features that apply
to a specific particular person’s Contract might range relying on the info relevant to that particular person and state of residence. Tax guidelines
might change with out discover. We can not predict whether or not, when, or how these guidelines might change. Any change might have an effect on Contracts
bought earlier than the change. We can not predict what, if any, laws will really be proposed or enacted. Earlier than making contributions
to your Contract or taking different motion associated to your Contract, it is best to seek the advice of with a tax skilled to find out the tax
implications of an funding in, and funds obtained beneath, the Contract.

       
Faculty Retirement Equities Fund Prospectus 15

Enterprise Continuity Dangers. We’re uncovered to dangers associated
to pure and man-made disasters, corresponding to storms, fires, earthquakes, public well being crises, illness outbreaks and terrorist acts,
which might adversely have an effect on our means to manage a Contract. Within the occasion {that a} pure or man-made catastrophe happens, a big
variety of our workforce or sure key personnel could also be unable to meet their duties. As well as, system outages might impair
our means to function successfully and impair our means to course of contract transactions or to calculate contract values. We
outsource sure vital enterprise features to 3rd events and, within the occasion of a pure or man-made catastrophe, depend upon the
profitable implementation and execution of the enterprise continuity planning of such entities. Whereas we monitor the enterprise continuity
actions of those third events, profitable implementation and execution of their enterprise continuity methods are largely
past our management. If a number of of the third events to whom we outsource such vital enterprise features expertise operational
failures, our means to manage the contract could possibly be impaired.

 

Cyber Security Dangers. With the elevated use of
applied sciences such because the Web to conduct enterprise, we, any third get together administrator, the Accounts, intermediaries and
different affiliated or third get together service suppliers are prone to cyber security dangers. On the whole, cyber security assaults
may end up from an infection by laptop viruses or different malicious software program or from deliberate actions or unintentional occasions,
together with gaining unauthorized entry by way of “hacking” or different means to digital methods, networks, or units
which can be used to service our operations to be able to misappropriate property or delicate info, corrupt information, or trigger
operational disruption. Cyber security assaults will also be carried out in a way that doesn’t require gaining unauthorized
entry, together with by finishing up a “denial-of-service” assault on our or our service suppliers’
web sites. As well as, licensed individuals might inadvertently or deliberately launch and probably destroy confidential or
proprietary info saved on our methods or the methods of our service suppliers.

 

Cyber security failures by us or any of our service suppliers,
the Accounts, or the issuers of securities through which the Accounts make investments, might lead to disruptions to and affect enterprise operations,
and should adversely have an effect on us and the worth of your accumulation items. Such disruptions or impacts might lead to: monetary losses,
interference with our processing of contract transactions, together with the processing of orders from our web site; interference with
our means to calculate unit values; limitations to buying and selling and order processing; your incapacity to transact enterprise with us; violations
of relevant federal and state privateness or different legal guidelines, regulatory fines, penalties, reputational injury, reimbursement or different
compensation prices, or extra compliance prices. We might incur extra, incremental prices to forestall and mitigate the dangers
of cyber security assaults or incidents sooner or later. We and individuals could possibly be negatively impacted by such cyber-attacks or
incidents. Though now we have established enterprise continuity plans and risk-based processes and controls to handle such cyber security
dangers, there are inherent limitations in such plans and methods partly as a result of evolving nature of know-how and cyber security
assault techniques. Consequently, it’s doable that we or our service suppliers will be unable to adequately determine or put together
for all cyber security assaults. As well as, we can not straight management the cyber security plans or methods applied by our
service suppliers.

 

We’re additionally uncovered to dangers associated to pure and man-made
disasters, corresponding to storms, fires, earthquakes, public well being crises and terrorist acts, which might adversely have an effect on our means
to manage the contract. Within the occasion {that a} pure or man-made catastrophe happens, a big variety of our workforce or sure
key personnel could also be unable to meet their duties. As well as, system outages might impair our means to function successfully
and impair our means to course of contract transactions or to calculate contract values. We outsource sure vital enterprise
features to 3rd events and, within the occasion of a pure or man-made catastrophe, depend upon the profitable implementation and execution
of the enterprise continuity planning of such entities. Whereas we monitor the enterprise continuity actions of those third events,
profitable implementation and execution of their enterprise continuity methods are largely past our management. If a number of
of the third events to whom we outsource such vital enterprise features expertise operational failures, our means to manage
the contract could possibly be impaired.

 

Who We Are and Different Associated Data

 

About CREF. Based
in 1952, CREF is a nonprofit membership company established in New York State. Its residence workplace is positioned at 730 Third Avenue,
New York, NY 10017-3206. There are additionally native places of work throughout the US together with Atlanta, Boston, Chicago, Dallas, Denver,
Detroit, New York, Philadelphia, San Francisco and Washington, D.C., in addition to service facilities in New York, Denver and Charlotte.
CREF is a diversified, open-end administration funding firm that’s registered with the SEC beneath the Funding Firm Act
of 1940, as amended (the “1940 Act”). CREF, the primary firm in the US to situation a variable annuity, is
the companion group of TIAA.
CREF can also be topic to regulation by the New York State

       
Faculty Retirement Equities Fund Prospectus 16

Division of Monetary Providers
(“NYSDFS”) and the insurance coverage departments of sure different jurisdictions through which the contracts are provided. For extra
info, see the SAI.

 

TIAA was based in 1918 by the Carnegie Basis
for the Development of Instructing and provides conventional annuities, corresponding to TIAA Conventional. TIAA additionally provides variable annuities
that spend money on, amongst different issues, actual property (the “TIAA Actual Property Account”) and in mutual funds that spend money on
equities and fixed-income investments (“TIAA Entry”). TIAA is positioned at 730 Third Avenue, New York, NY 10017-3206.

 

Collectively, CREF and TIAA type the principal retirement
system for the nation’s schooling and analysis communities and one of many largest retirement methods on the planet based mostly on
property beneath administration. As of December 31, 2021, CREF’s internet property had been roughly $[___] billion and the mixed internet
property for TIAA, CREF and different entities inside the TIAA group totaled roughly $[___] trillion.

 

The Accounts. CREF provides eight Accounts: Inventory, World
Equities, Development, Fairness Index, Core Bond, Inflation-Linked, Social Alternative and Cash Market Accounts. The Accounts are designed
to fund particular person and group variable contracts in retirement plans.

 

Though CREF owns the property of every Account and the obligations
beneath the Contract are obligations of CREF, the Contract states that every Account’s revenue, funding good points, and funding
losses are credited to or charged in opposition to the property of that Account with out regard to CREF or the opposite Accounts’ different
revenue, good points, or losses. Underneath New York regulation, we can not cost any Account with liabilities incurred by another Account, nor
can CREF be charged with any liabilities incurred by TIAA or any of its associates apart from these arising from the Contracts.

 

When the contracts are bought by way of certified plans, earnings
on accumulation within the Accounts aren’t taxed till withdrawn or paid as annuity revenue (see “Taxes,” beneath).

 

You could allocate premiums among the many Accounts.

 

Although the Accounts can be found beneath the phrases of your Contract,
they might not be out there beneath the phrases of your employer’s plan. You could solely spend money on these Accounts out there beneath
the phrases of your employer’s plan. Though provided by TIAA, the TIAA Conventional Annuity, the TIAA Actual Property Account,
and TIAA Entry might not be provided by your employer’s plan and aren’t coated by the phrases of this Prospectus. As well as,
your employer’s plan might impose extra restrictions, together with restrictions on allocations of premiums and transfers
of accumulation. Please see your employer’s plan.

 

CREF reserves the correct to alter the Accounts out there within the
future, together with including, eradicating or merging Accounts, or materially altering their funding traits.

 

As with all variable annuities, your accumulation will enhance
or lower relying on the funding efficiency over time of the Accounts that you choose. We don’t assure the funding
efficiency of any of the Accounts, and also you bear all the funding danger.

 

The knowledge relating to every Account out there beneath your contract,
together with (i) its title, (ii) an announcement regarding its funding aims and techniques; (iii) its funding adviser; (iv)
present bills; and (v) efficiency is offered beneath on this prospectus beneath “Appendix A – Data Relating to
the Accounts”. Expense info relating to the Accounts is positioned above within the part entitled “Price and Expense
Tables of every Contract.”

 

Portfolio Holdings Disclosure. An outline of CREF’s
insurance policies and procedures with respect to the disclosure of the Accounts’ portfolio securities is offered in CREF’s
SAI.

 

Your Voting Rights. What number of votes a participant can forged
on issues that require a vote of individuals will likely be decided individually for every Account. You should have one vote per greenback
of your property in every Account’s accumulation fund, and/or one vote per greenback of the property underlying your annuity in every
Account’s annuity fund on the file date.

 

Points that have an effect on all of the Accounts in considerably the identical
method will likely be voted on by all individuals, with out regard to the person Accounts. Points that don’t have an effect on an Account will
not be voted on by the Account. Points that have an effect on all Accounts, however through which their pursuits aren’t considerably the identical, will
be voted on individually by every Account. Every class could have unique voting rights on any matter submitted to individuals that
relates solely to such class. Every class may even have separate voting rights on any matter submitted to individuals through which
the pursuits of 1 class differ from the pursuits of another class.

 

Administration of the Accounts

       
Faculty Retirement Equities Fund Prospectus 17

The Funding Adviser. TIAA-CREF Funding Administration,
LLC (“TCIM”) manages the property of every CREF Account beneath the supervision of CREF’s Board of Trustees. TCIM
is a completely managed subsidiary of TIAA and is registered as an funding adviser with the SEC beneath the Funding Advisers
Act of 1940. TCIM shares funding personnel with different associates of TIAA, together with Academics Advisors, LLC (“Advisors”).
As of December 31, 2021, TCIM and Advisors collectively had roughly $[444] billion of registered funding firm property beneath
administration. TCIM is positioned at 730 Third Avenue, New York, NY 10017-3206.

 

Underneath its funding administration companies settlement with CREF,
TCIM’s duties embrace managing the property of the Accounts, topic to the supervision of the Board of Trustees. TCIM additionally
arranges for the supply by State Avenue Financial institution and Belief Firm of portfolio accounting, custodial and associated companies for every
Account. TCIM supervises and acts as liaison amongst numerous different service suppliers to the Accounts. All companies offered by TCIM
to the Accounts are offered by TCIM at value.

 

In the course of the fiscal 12 months ended December 31, 2021, CREF’s
Accounts reimbursed TCIM for its mixture funding administration bills expressed as a share of the Accounts’ complete
internet property of [__]%. TCIM’s provides its funding administration companies to the Accounts on an at-cost foundation.

 

A dialogue relating to the idea for the Board of Trustees’
approval of every Account’s funding administration settlement is offered in CREF’s most up-to-date semiannual report back to
individuals for the six-month interval ended June 30. For a free copy of CREF’s participant stories, please name 877-518-9161,
go to CREF’s web site at www.tiaa.org or go to the SEC’s web site at www.sec.gov.

 

Portfolio administration groups

 

Every
Account is managed by a crew of managers, whose members are chargeable for the day-to-day administration of the Account, with experience
within the space(s) relevant to the Account’s investments. Sure crew members are, for instance, principally chargeable for
deciding on acceptable investments for the Account and others are principally chargeable for asset allocation. The next is
a listing of members of the administration groups primarily chargeable for managing every Account’s investments, together with their
related expertise. The members of every crew might change now and again
.

 

·    
Identify & Title
·    Portfolio Position ·    
Expertise Over
Previous 5 Years
Whole
Expertise
(since dates
specified beneath)
At
TIAA

Whole
On
Crew
STOCK ACCOUNT      
Saira Malik, CFA
Senior Managing Director
Portfolio Supervisor Advisors, TCIM and different advisory associates of TIAA—2014
to Current (Head of World Fairness Portfolio Administration)
2003 1995 2008
Hans Erickson, CFA
Senior Managing Director
Portfolio Supervisor Advisors, TCIM and different advisory associates of TIAA—1996 to Current
(oversight and administration duty for all asset allocation funds; oversight for quantitative fairness methods and
fairness index funds previous to 2011)
1996 1988 1996
David Chalupnik, CFA
Senior Managing Director
Portfolio Supervisor Advisors, TCIM and different advisory associates of TIAA—2002 to Current
(portfolio administration of core and value-focused portfolios)
2002 1984 2020
GLOBAL EQUITIES ACCOUNT      
John Tribolet
Managing Director
Portfolio Supervisor Advisors, TCIM and different advisory associates of TIAA—2005 to Current
(portfolio administration of worldwide and worldwide fairness portfolios)
2005 1997 2006
       
Faculty Retirement Equities Fund Prospectus 18

·    
Identify & Title
·    Portfolio Position ·    
Expertise Over
Previous 5 Years
Whole
Expertise
(since dates
specified beneath)
At
TIAA

Whole
On
Crew
GLOBAL EQUITIES ACCOUNT (continued)      
Saira Malik, CFA
Senior Managing Director
Portfolio Supervisor Advisors, TCIM and different advisory associates of TIAA—2014 to Current
(Head of World Fairness Portfolio Administration)
2003 1995 2020
GROWTH ACCOUNT      
Terrence Kontos, CFA
Managing Director
Portfolio Supervisor Advisors, TCIM and different advisory associates of TIAA—2012 to Current
(analysis and portfolio administration of home progress portfolios)
2012 2005 2014
Saira Malik, CFA 
Senior Managing Director
Portfolio Supervisor Advisors, TCIM and different advisory associates of TIAA—2014 to Current
(Head of World Fairness Portfolio Administration)
2003 1995 2020
Karen Hiatt 
Managing Director
Portfolio Supervisor Advisors, TCIM and different advisory associates of TIAA—2021 to Current
(portfolio administration of home large-cap progress portfolios); Allianz—1998 to 2021 (portfolio administration of home
large-cap progress portfolios and head of worldwide know-how crew)
2021 1994 2021
EQUITY INDEX ACCOUNT      
Philip James (Jim)
Campagna, CFA 

Managing Director
Portfolio Supervisor Advisors, TCIM and different advisory associates of TIAA—2005 to Current
(portfolio administration of home and worldwide large-, mid- and small-cap fairness index portfolios)
2005 1991 2005
Lei Liao, CFA
Managing Director
Portfolio Supervisor Advisors, TCIM and different advisory associates of TIAA—2012 to Current
(portfolio administration of home and worldwide large-, mid- and small-cap fairness index portfolios)
2012 2005 2014
Darren Tran, CFA 
Senior Director
Portfolio Supervisor Advisors, TCIM and different advisory associates of TIAA—2005 to Current
(portfolio administration of home and worldwide large-, mid- and small-cap fairness index portfolios)
2005 2000 2019
CORE BOND ACCOUNT      
Joseph Higgins, CFA 
Managing Director
Portfolio Supervisor Advisors, TCIM and different advisory associates of TIAA—1995 to Current
(fixed-income portfolio administration)
1995

1995

 

2011
John Cerra 
Managing Director
Portfolio Supervisor Advisors, TCIM and different advisory associates of TIAA—1985 to Current
(fixed-income portfolio administration)
1985 1985 2003
Jason O’Brien, CFA 
Managing Director
Portfolio Supervisor Advisors, Nuveen Asset Administration and different advisory associates of TIAA—1993
to Current (fixed-income portfolio administration)
2014 1993 2020
       
Faculty Retirement Equities Fund Prospectus 19

·    
Identify & Title
·    Portfolio Position ·    
Expertise Over
Previous 5 Years
Whole
Expertise
(since dates
specified beneath)
At
TIAA

Whole
On
Crew
INFLATION-LINKED BOND ACCOUNT      
John Cerra 
Managing Director
Portfolio Supervisor Advisors, TCIM and different advisory associates of TIAA—1985 to Current
(fixed-income portfolio administration)
1985 1985 2003
Nicholas Travaglino
Managing Director
Portfolio Supervisor Advisors, TCIM and different advisory associates of TIAA—2014 to Current
(fixed-income portfolio administration)
2014 1997 2016
Chad Kemper 
Senior Director
Portfolio Supervisor Advisors, TCIM, Nuveen Asset Administration and different advisory associates of
TIAA—1999 to Current (fixed-income portfolio administration)
2014 1999 2020
SOCIAL CHOICE ACCOUNT      
Stephen Liberatore, CFA
Managing Director 
Portfolio Supervisor Advisors, TCIM and different advisory associates of TIAA—2004 to Current
(fixed-income credit score analysis and portfolio administration)
2004 1994 2004
Philip James (Jim)
Campagna, CFA 

Managing Director
Portfolio Supervisor Advisors, TCIM and different advisory associates of TIAA—2005 to Current
(portfolio administration of home and worldwide large-, mid- and small-cap fairness index portfolios)
2005 1991 2005
Lei Liao, CFA
Managing Director
Portfolio Supervisor Advisors, TCIM and different advisory associates of TIAA—2012 to Current
(portfolio administration of home and worldwide large-, mid- and small-cap fairness index portfolios)
2012 2005 2014
MONEY MARKET ACCOUNT      
Chad Kemper 
Senior Director
Portfolio Supervisor Advisors, TCIM, Nuveen Asset Administration and different advisory associates of
TIAA—1999 to Current (fixed-income portfolio administration)
2014 1999 2020
Andrew Hurst
Director
Portfolio Supervisor Advisors, TCIM and different advisory associates of TIAA—2000 to Current
(fixed-income portfolio administration and operations)
2005 2000 2020

 

The Accounts’ SAI offers extra disclosure about
the compensation construction for every of the Accounts’ portfolio managers, the opposite accounts they handle, complete property in
these accounts and potential conflicts of curiosity, in addition to the portfolio managers’ possession of accumulation items in
every of the Accounts they handle.

 

The Distributor. The principal underwriter and distributor
of the Contracts is TIAA-CREF Particular person & Institutional Providers, LLC (“Providers”), a completely managed subsidiary
of TIAA. Providers is registered with the SEC as a broker-dealer and is a member of the Monetary Trade Regulatory Authority
(“FINRA”). Its deal with is 730 Third Avenue, New York, NY10017. No commissions are paid to sellers as
a share of buy funds. Underwriting commissions aren’t paid to Providers for distribution of the contracts. Every Class
of every Account pays Providers an annual Rule 12b-1 charge to cowl the bills Providers incurs on its behalf on an at-cost foundation,
as much as a most annual charge of 0.25% of common internet property.

       
Faculty Retirement Equities Fund Prospectus 20

Administrator. TIAA, which serves as administrator to
CREF, is positioned at 730 Third Avenue, New York, NY 10017. Administrative bills, that are charged to cowl bills of the administration
and operations of CREF and the Contracts on an at-cost foundation, embrace bills related to recordkeeping, premium allocation,
tax and monetary reporting, accounting, authorized and compliance, amenities, and different contract owner-related companies. Administrative
bills might also embrace sure prices related to the supply by TIAA entities of recordkeeping and different plan-related
companies for plans and their individuals using the contracts.

 

About CREF’s bills

 

CREF deducts bills from the online property of every class of every
Account every Valuation Day for, amongst different companies and bills, funding administration, administration and distribution companies.
Please see the part above entitled “Price and expense tables of every Contract” for the quantities of those estimated
Account-level bills. TIAA or subsidiaries of TIAA present or organize for the supply of those companies for CREF “at
value” to TIAA and its associates. Every Account at the moment points 4 courses of items beneath the contracts: Class R1, Class
R2, Class R3 and Class R4. There are variations among the many bills related to every class, corresponding to totally different administrative
and distribution bills, as described beneath.

· Funding administration bills. These bills usually embrace funding
administration, portfolio accounting and custodial companies, and are the identical throughout all courses inside an Account as a share
of every class’s common day by day internet property. These bills are included within the class labeled “Administration Bills”
within the expense desk above.
· Administrative bills. Administrative bills cowl two sorts of bills.
The primary kind of bills are charged to every Class to cowl the administration and operations of CREF and the Contracts, together with
bills related to Contract recordkeeping, tax and monetary reporting, accounting, authorized and compliance, amenities, and
different contract owner-related companies. The second kind of bills are charged to Lessons R1, R2 and R3 solely and embrace sure
prices related to the supply by TIAA entities of recordkeeping, premium allocation, and different plan-related companies for
plans and their individuals using the contracts. These administrative bills are allotted to every CREF Account and to every
class inside an Account in accordance with relevant allocation procedures. Which means that individuals invested in a specific
CREF Account will likely be topic to totally different administrative bills relying upon the category of the Account they personal. These bills
are included within the class labeled “Different Bills” within the expense desk above.
· Distribution bills. These bills are paid beneath a distribution plan
that CREF has adopted authorizing cost of Rule 12b-1 or distribution bills. These bills are for all bills related
with the supply of distribution companies for the CREF contracts and, according to the executive companies, relate in
half to bills charged to every Class and partly to bills charged to Lessons R1, R2, and R3 solely. The distribution companies
embrace informing you in regards to the contracts and how one can make investments, serving to employers implement and handle retirement plans and for
sure different functions. The annual distribution expense cost is not going to be greater than 0.25% of an Account’s common day by day
internet property attributable to any class. These bills are allotted to every CREF Account and to every class inside an Account in
accordance with relevant allocation procedures. Which means that individuals invested in a specific CREF Account will likely be topic
to totally different distribution bills relying upon the category of the Account they personal. These bills are included within the class
labeled “Different Bills” within the expense desk above.

 

CREF bills additionally embrace the prices of its audit and authorized companies,
and sure different companies offered by third events, all of that are included in a number of of the expense teams famous above.
These bills could also be allotted to a number of specific CREF Accounts and/or courses in accordance with relevant allocation
procedures.

 

CREF additionally deducts a mortality and expense danger cost that’s
paid to TIAA to ensure that CREF individuals transferring funds to TIAA for the fast buy of lifetime payout annuities
is not going to be charged greater than the speed stipulated within the CREF contract. This mortality and expense danger cost is a direct insurance coverage
cost. This cost is identical throughout all Accounts and courses inside an Account as a share of every class’s common
day by day internet property. This expense is included within the class labeled “Base Contract Expense” within the expense desk above.

 

All bills of an Account not particularly attributable to a
specific class of that Account are allotted to every class of the Account on the idea of the online property attributable to that
class in relation to the combination internet property of the Account. Bills attributable to an Account allotted to a specific class
are borne equally inside an Account as a share of every class’s common day by day internet property by all items inside that class.

       
Faculty Retirement Equities Fund Prospectus 21

The estimated annual expense deduction charges that seem on this
Prospectus replicate estimates of the quantities we at the moment anticipate to deduct to approximate the prices that CREF will incur from Might
1, 2022 by way of April 30, 2023. Precise bills could also be larger or decrease.

 

After the tip of each calendar quarter, CREF reconciles the
quantity deducted from every class of an Account with the bills really incurred by the category of the Account and, if there may be
a distinction, it’s added to or deducted from the category of the Account in equal day by day installments over the remaining days of the
quarter, offered that materials variations could also be repaid within the present calendar quarter, in accordance with accounting rules
usually accepted in the US of America (GAAP). CREF’s at-cost deductions are based mostly on projections of total
bills and the property of every class of an Account, and the scale of any adjusting funds will likely be straight affected by how totally different
the projections are from a category of an Account’s precise property or bills. To the extent that the associated fee projections considerably
differ from an Account’s precise bills, the associated fee deduction charges could also be adjusted.

 

The dimensions of an Account’s property might be affected by a quantity
of things, together with premium progress, participant transfers into or out of the Account and market efficiency affecting the worth
of the Account’s portfolio holdings. As well as, CREF’s working bills can fluctuate based mostly on quite a lot of elements,
together with participant transaction quantity, operational effectivity, and technological, personnel and different infrastructure prices.
Traditionally, the adjusting funds have resulted in each upward and downward changes to CREF’s expense deductions for
the next quarter.

 

CREF revises its expense charges (the day by day deduction price earlier than
the quarterly adjustment) now and again, normally on an annual foundation, in an effort to maintain deductions as shut as doable to
precise bills. CREF makes funds to Providers for distribution companies, pursuant to its 12b-1 plan, as described above.

 

TIAA plan pricing preparations can have an effect on the general prices of
retirement funding for employers and individuals and aren’t mirrored within the CREF “at value” bills described
on this Prospectus. For instance, since all Class R4 individuals take part by way of employer retirement plans, the whole expense
to every Class R4 participant would come with, along with the CREF bills described on this Prospectus, plan-level charges for
TIAA recordkeeping that the plan passes on to the participant. For contracts provided beneath a retirement plan by way of your employer,
please contact TIAA (as famous within the part of this Prospectus entitled “Data from TIAA: TIAA plan pricing, employer
plan charges and potential switch charges” beneath) if you want extra info.

 

Every Account at the moment points 4 courses of items beneath the
Contracts. CREF might sooner or later select to supply extra or fewer courses of items of the Accounts.

 

Aside from the Account-level bills detailed within the part
entitled “Price and Expense Tables of every Contract” above, no different charges and bills are charged by CREF, together with
no gross sales hundreds, fees for optionally available advantages or administrative charges. No commissions are paid on CREF transactions. All Account-level
bills are paid out of the property of the Accounts. Relying upon your state of residence and private circumstances, numerous
premium and different tax penalties might apply to you. Some states assess premium taxes on the certified annuity contract premiums
paid beneath the contract (e.g. 403(b)). We’ll deduct the whole quantity of premium taxes, if any, out of your accumulation based mostly on
present state insurance coverage legal guidelines, topic to the provisions of your contract, and our standing within the state. Typically, premium taxes
vary from 0% to 1%, on certified annuity contract premiums relying on the state. Please seek the advice of your private tax advisor for
extra info in your private tax circumstances.

 

Data from TIAA: TIAA plan pricing, employer plan charges
and potential switch charges

 

TIAA offers recordkeeping and different plan-related companies for
many retirement plans and their individuals investing within the CREF Accounts. An employer that sponsors a retirement plan usually
agrees with TIAA on the companies to be offered and a complete worth for offering these companies to the plan and its individuals.
TIAA plan pricing preparations can have an effect on the general prices of retirement investing for employers and individuals. TIAA plan pricing
preparations aren’t mirrored within the CREF Account bills described on this Prospectus, and should lead to compensation to TIAA
that is kind of than TIAA’s value related to companies for any plan. Specifically, though Class R4 individuals
is not going to be charged for any recordkeeping-related bills by way of Class R4’s expense ratio, the general expense to a participant
would rely on the plan-level charges of TIAA for recordkeeping that the plan passes on to a participant. The main points of

       
Faculty Retirement Equities Fund Prospectus 22

TIAA
plan pricing preparations are the only duty of TIAA and the employer and aren’t mirrored
on this Prospectus. For extra info, name TIAA at 800-842-2252.

 

Your employer might, in accordance with the phrases of your plan,
instruct TIAA to withdraw quantities out of your accumulations beneath your Retirement Alternative or Retirement Alternative Plus contract, and,
in case your certificates so offers, in your GRA, GSRA or GA contract, to, amongst different issues, meet the whole plan worth agreed to
by TIAA and your employer for recordkeeping and different plan-related companies. TIAA additionally reserves, in accordance with its procedures,
the correct to droop or reinstate the employer’s instruction for a plan to make such withdrawals. The quantity and the efficient
date of an employer plan charge withdrawal will likely be in accordance with the phrases of your plan. Withdrawals are effected
by TIAA solely on the instruction of the employer sponsoring the retirement
plan, and a withdrawal can’t be revoked after
its efficient date beneath the plan.

 

At the moment, TIAA doesn’t cost CREF individuals for transfers
of their accumulations to the TIAA Conventional annuity product. Nevertheless, TIAA reserves the correct to cost CREF individuals in
the buildup part a charge on transfers to TIAA Conventional sooner or later. CREF individuals will obtain prior discover of
the imposition of such a switch charge.

 

The Annuity Contracts We Supply.

 

Annuity Contracts. You or your employer should purchase Contracts
we provide (as described beneath) in reference to tax-qualified pension plans beneath Inside Income Code (“IRC”) sections
401(a)/403(a) (together with 401(okay) plans), and plans beneath IRC sections 403(b), 414(d), 415(m), 457(b), or 457(f), in addition to Conventional,
Roth and Rollover IRAs, SEP IRAs, Keogh Contracts. The tax benefits out there with these contracts exist solely by way of
considered one of these kind of retirement plans or accounts. In distinction to many variable annuities, as a result of these Contracts can make investments
in funds out there to most of the people, if the contracts aren’t issued or bought by way of considered one of these kind of retirement
plans, the taxes on good points is not going to be deferred. It’s best to fastidiously think about the benefits and drawbacks of proudly owning a variable
annuity in a tax-qualified plan, in addition to the prices and advantages of the contract (together with annuity revenue), earlier than you buy
the contract in a tax-qualified plan. We additionally supply non-qualified ATRA (After-Tax Retirement Annuity) Contracts. We don’t make
any illustration relating to the tax qualification standing of any plan.

 

As with all variable annuities, your accumulation will enhance
or lower relying on the funding efficiency over time of the Accounts that you choose. We don’t assure the funding
efficiency of the Accounts, and also you bear all the funding danger.

 

Topic to your employer’s plan and/or different eligibility
necessities, we provide the next Contracts:

 


RA (Retirement Annuity)

 


GRA (Group Retirement Annuity)

 


SRA (Supplemental Retirement Annuity)

 


GSRA (Group Supplemental Retirement Annuity)

 


Retirement Alternative and Retirement Alternative Plus Annuity

 


GA (Group Annuity) and Institutionally Owned GSRAs

 


Conventional and Roth IRAs and Rollovers (Particular person Retirement Annuity) together with SEP IRAs (Simplified Worker Pension Plans)

 


Keogh

 


ATRA (After-Tax Retirement Annuity)

 

RA (Retirement Annuity) and GRA (Group Retirement Annuity).
RA and GRA contracts are used primarily for employer sponsored retirement plans. RA contracts are issued on to you. GRA contracts,
that are group contracts, are issued by way of an settlement between your employer and CREF.

 

Relying on the phrases of your employer’s plan, RA premiums
might be paid by your employer, you or each. GRA premiums can solely be paid by your employer (although some premiums could also be paid by
your employer pursuant to a wage discount settlement with you). In case you are paying some or the entire periodic premiums, your
contributions might be in both

       
Faculty Retirement Equities Fund Prospectus 23

pre-tax {dollars} by wage discount, or after-tax {dollars} by payroll deduction. Your employer might
give you the choice of creating contributions within the type of after-tax Roth contributions, although you will be unable to take tax
deductions for these contributions. You may also switch accumulations from one other funding alternative beneath your employer’s
plan to your contract. Your GRA premiums might be from pre-tax or after-tax contributions. As with RAs, you may switch your accumulations
from one other funding alternative beneath your employer’s plan to your GRA contract.

 

SRA (Supplemental Retirement Annuity) and GSRA (Group Supplemental
Retirement Annuity)
. These are usually restricted to supplemental voluntary tax-deferred annuity (TDA) plans and supplemental
401(okay) plans. SRA contracts are issued on to you. GSRA contracts, that are group contracts, are issued by way of an settlement
between your employer and CREF. Typically, your employer pays premiums in pre-tax {dollars} by way of wage discount. Your employer
might give you the choice of creating contributions within the type of after-tax Roth contributions, although you will be unable to take
tax deductions for these contributions. Though you can’t pay premiums straight, you may switch quantities from different TDA plans
topic to the phrases of the plan.

 

Retirement Alternative/Retirement Alternative Plus Annuities. These
are very comparable in operation to the GRAs and GSRAs, respectively, besides that they’re issued on to your employer or your
plan’s trustee. Amongst different rights, the employer retains the correct to switch accumulations beneath these contracts to alternate
funding autos.

 

GA (Group Annuity) and Institutionally-Owned GSRA: These
contracts are used solely for employer retirement plans and are issued on to your employer or your plan’s trustee.
Your employer pays premiums on to CREF (you can’t pay the premiums on to CREF) and your employer or the plan’s
trustee might management the allocation of contributions and transfers to and from these contracts together with withdrawing fully
from CREF. If a GA or Institutionally Owned GSRA contract is issued pursuant to your plan, the principles regarding transferring and
withdrawing your cash, receiving any annuity revenue or demise advantages, and the timing of
funds could also be totally different, and are decided
by your plan. Ask your employer or plan administrator for extra info.

 

Conventional and Roth IRAs: Underneath present regulation it’s possible you’ll make
deductible IRA contributions previous age [70½]. You and your partner can every open a Conventional IRA with an annual contribution
of as much as $[6,000] every or by rolling over funds from one other IRA or an eligible retirement plan, in case you meet CREF’s eligibility
necessities. In case you are age 50 or older, it’s possible you’ll contribute as much as $[7,000]. The mixed restrict on your contributions to a Conventional
IRA and a Roth IRA for a single 12 months is $[6,000], or $[7,000] if you’re age 50 or older, excluding rollovers. (The greenback limits
listed are for 2022; totally different greenback limits might apply in future years. IRA contributions made after age [70½] are
coordinated with any concurrent or future certified charitable distributions to forestall duplicate tax advantages. Seek the advice of along with your
tax advisor for extra info.)

 

You and your partner can every open a Roth IRA with an annual contribution
of as much as $[6,000] or with a rollover from one other IRA or a Conventional IRA issued by CREF, in case you meet CREF’s eligibility
necessities, topic to guidelines relevant to Roth IRA conversions. In case you are age 50 or older, it’s possible you’ll contribute as much as $[7,000].
The mixed restrict on your contributions to a Conventional IRA and a Roth IRA for a single 12 months is $[6,000, or $7,000] if you’re
age 50 or older, excluding rollovers. (The greenback limits listed are for 2022: totally different greenback limits might apply in future years.)

 

Each Conventional and Roth IRAs are issued on to you. Joint
accounts aren’t permissible. Conventional and Roth IRAs might collectively be known as “IRAs” on this Prospectus.

 

Your employer might supply SEP IRAs (Simplified Worker Pension
Plans), that are topic to totally different guidelines.

 

Keogh Contracts: In case you are a self-employed particular person
who owns an unincorporated enterprise you possibly can, previous to 2013, use CREF’s Keogh contracts for a Keogh plan and canopy frequent
regulation staff, topic to CREF’s eligibility necessities. Notice, nevertheless, that whereas CREF will supply new contracts for brand spanking new
entrants into Keogh plans established previous to 2013, it can not supply contracts for Keogh plans that CREF isn’t at the moment
funding.

ATRA (After-Tax Retirement Annuity): The after-tax retirement
annuities (ATRA) are particular person non-qualified deferred annuity contracts, issued to individuals who’re eligible and would really like
to remit private premiums beneath the contractual provisions of their RA contract. To be eligible, you need to have an lively and premium-paying
or paid up RA contract. Notice that the tax guidelines governing these non-qualified contracts differ considerably from the therapy
of certified contracts. Please see the part entitled [“Taxes”] for extra info.

 

Eligibility for IRAs: You and your loved ones members can
open a Conventional IRA or a Roth IRA, topic to the restrictions described above, if you’re a present or retired worker or a
trustee of an Eligible Establishment, or in case you personal a TIAA or

       
Faculty Retirement Equities Fund Prospectus 24

CREF annuity contract or a TIAA particular person insurance coverage contract. In the event you
aren’t already a TIAA or CREF contract holder, to be thought of a retired worker for this goal you need to have beforehand labored
as a full-time or part-time worker, both after attaining age 55 for any period for an Eligible Establishment, or prior
to attaining age 55 for 3 years within the mixture for a number of Eligible Establishments. Within the case of partnerships, a minimum of half
the companions should be eligible people and the partnership itself should be primarily engaged
in schooling or analysis. Earnings limits might prohibit Roth IRA eligibility. For these eligibility functions, your loved ones members
embrace your partner, home associate, mother and father, parents-in-law, youngsters (together with adopted youngsters, step youngsters, foster youngsters
and grandchildren), whether or not grownup or minor youngsters, and siblings.

 

State Regulatory Approval: State regulatory approval might
be pending for sure of those contracts and so they might not at the moment be out there in your state.

 

Contract Variations As a consequence of State Legal guidelines. There are not any materials
state variations of the identical Contract kind from one state-specific contract to a different state particular contract by way of options,
restrictions, limitations, advantages and fees. It’s best to evaluation your Contract together with this prospectus to grasp the product
options, restrictions, limitations, advantages and fees beneath your Contract.

 

Adjustments to the Contract.

 

We will make any adjustments to CREF, the Accounts or to the Contract
as required by relevant insurance coverage regulation, the IRC, or the 1940 Act. We will make some adjustments at our discretion, topic to NYSDFS
and SEC approval, as required. CREF can (i) proceed to function beneath the 1940 Act as an open-end administration funding firm
with Accounts or in another type permitted by regulation, (ii) deregister beneath the 1940 Act if registration is not required,
or (iii) mix with, re-register as, or in any other case develop into an insurance coverage firm separate account, which can be related to
TIAA. To the extent CREF turns into an insurance coverage firm separate account related to TIAA, as permitted by regulation, TIAA can switch
some or all of its property to a different separate account of TIAA or one other insurance coverage firm or switch the Contract to a different
insurance coverage firm.

 

Beginning
Out and Easy methods to Buy a Contract
.

 

Typically, we are going to situation a contract once we obtain a accomplished
software or enrollment type in good order. Good order means precise receipt of the transaction
request together with all info and supporting authorized documentation
essential to impact the transaction. This info
and documentation usually contains your full software (or full request for redemptions, transfers, withdrawals, or
cost of demise or different advantages) and another info or supporting documentation we might require. With respect to buy
requests, good order additionally usually contains receipt of adequate funds by us to impact the acquisition. We might, in our sole discretion,
decide whether or not any specific transaction request (together with, amongst others, a purchase order, redemption, or withdrawal request or
request to pay advantages) is in good order and reserve the correct to alter or waive any good order requirement at any time both
typically or with respect to a specific plan, contract or transaction.

 

In case your software is incomplete and we don’t obtain the required
info and signed software in good order inside 5 enterprise days of our receipt of the preliminary premium, we are going to return
the preliminary premium at the moment. As well as, additionally it is doable that if we’re unable to succeed in you to acquire extra or lacking
info regarding incomplete purposes, or transaction requests that aren’t in good order, the transaction could also be cancelled.

 

If we obtain premiums from
your employer and (the place relevant) a accomplished
software from you earlier than we obtain your particular allocation directions
(or if your allocation directions violate employer plan restrictions or don’t complete 100%),
we are going to make investments all premiums remitted in your behalf within the default choice that your employer has designated. We think about
your employer’s designation of a default choice to be an instruction to us to allocate your premiums to that choice as described
above. It’s best to seek the advice of your plan paperwork or gross sales consultant
to find out your employer’s designated default
choice and to acquire details about that choice. Additional, to the extent you maintain an IRA contract, the default choice will likely be
that fund or Account laid out in your IRA kinds.

 

After we obtain full allocation directions from you in
good order, we are going to comply with your directions for future premiums. Nevertheless, in order for you the premiums beforehand allotted to the
default choice (and earnings or losses on them) to be transferred to the choices recognized in your directions, you need to particularly
request that we switch these quantities from the default choice to your funding choice decisions.

       
Faculty Retirement Equities Fund Prospectus 25

At the moment, CREF doesn’t prohibit the quantity or frequency of
premiums contributed to your contract, though it reserves the correct to impose restrictions. Your employer’s retirement
plan might restrict your premium quantities. There might also be restrictions on remitting premiums to an IRA. As well as, the Inside
Income Code (“IRC”) limits the whole annual premiums to plans certified for favorable tax therapy. If you wish to
straight contribute private premiums beneath the contractual provisions of your RA contract, you may be issued an ATRA contract.
Premiums and any earnings on the ATRA contract is not going to be topic to your employer’s retirement plan. The one restrictions
relating to those premiums are within the contract itself, or to any contract used to fund a non-qualified deferred compensation association.
The Inflation-Linked Bond Account isn’t out there as an funding alternative within the ATRA contract, and this restriction applies to
premiums and likewise to transfers between Accounts beneath the contract.

 

Generally, CREF accepts premiums to a contract throughout your
accumulation interval. As soon as your first premium has been paid, your CREF contract can not lapse or be forfeited for nonpayment of premiums.
CREF can cease accepting premiums to GRA, Retirement Alternative/Retirement Alternative Plus, GSRA, GA, Keogh and Institutional GSRA contracts
at any time. There are at the moment no minimal account values and we don’t cost a low steadiness charge.

 

Notice that we can not settle for bank cards, cash orders, vacationers
checks or digital (together with digital or crypto) currencies (e.g., Bitcoin). As well as, we is not going to settle for a third-party examine
the place the connection of the payor to the Account proprietor can’t be recognized from the face of the examine.

 

For areas the place a 3rd get together administers the receipt of
mail, we is not going to be deemed to have obtained any premiums despatched to the addresses designated for remitting premiums till the third-party
service that administers the receipt of mail by way of these addresses has administered the cost on our behalf.

 

Monetary intermediaries might have their very own necessities for
contemplating transactions to be in good order. In the event you maintain your items by way of an middleman, please contact the middleman for
their particular good order necessities.

 

Essential details about procedures for opening a brand new account.
To assist the US authorities battle the funding of terrorism and cash laundering actions, Federal regulation requires all monetary
establishments, together with us, to acquire, confirm and file info that identifies every one that purchases a contract.

 

What this implies for you. Whenever you apply for a contract,
we are going to ask on your title, road deal with (not a put up workplace field), date of delivery, Social Security quantity and different info,
corresponding to your property phone quantity, that can enable us to determine you. Till you present us with the knowledge we’d like, we might
not be capable of situation a contract or impact any transactions for you.

 

In sure circumstances, we could also be required to dam a contract
proprietor’s means to make sure transactions and should refuse to just accept any premium funds or requests for transfers, withdrawals,
surrenders, annuitization, or demise advantages, till directions are obtained from the suitable regulator. We might also be required
to supply extra details about you and your contract to authorities regulators with out discover or your consent.

 

Class eligibility

 

Every Account at the moment points 4 courses of items beneath the
contracts: Class R1, Class R2, Class R3 and Class R4. Every Account’s investments are held by the Account as a complete, not
by a specific class of items, so an investor’s cash will likely be invested the identical method irrespective of which class is held. Nevertheless,
there are variations among the many bills related to every class, corresponding to totally different administrative and distribution bills.
Sure courses have larger bills than different courses, which is able to decrease the return in your funding when in comparison with a much less
costly class. Eligibility for Class R1, Class R2 and Class R3 is mostly based mostly both upon the quantity of mixture retirement
plan property a participant’s establishment has invested in all CREF Accounts or, for participant property not related to
a retirement plan, the kind of product by way of which the CREF property are held. Eligibility for Class R4 relies upon whether or not a
participant establishment has adopted Retirement Alternative/Retirement Alternative Plus Contracts and entered right into a recordkeeping companies
settlement with TIAA. For functions of allocation of revenue, good points, appreciation/depreciation, and bills, all annuity items will
be aggregated with Class R3.

 

Typically, CREF class eligibility is as follows:

       
Faculty Retirement Equities Fund Prospectus 26

CREF class eligibility
    Institutional purchasers   Particular person and annuity merchandise  
Class R1   Establishments with CREF property beneath administration
beneath $20 million
 

Particular person Retirement Account (IRA)

 

Keogh contract

 

 
Class R2   Establishments with CREF property beneath administration
of $20 million or extra, however lower than $400 million
  After-Tax Retirement Annuity (ATRA)  
Class R3   Establishments with CREF property beneath administration of $400 million or extra.  

Rapid annuity

 

Accumulation Unit Deposit Possibility (AUDO)

 

 
 Class R4   Establishments using Retirement Alternative/ Retirement Alternative Plus
Contracts and which have entered right into a recordkeeping companies settlement with TIAA
  None  

 

Please contact us in case you have questions or would really like help
in figuring out your class eligibility. CREF reserves the correct to alter or droop these eligibility necessities. CREF might add,
delete, or modify a number of Lessons or might cease offering annuity items from a number of Lessons.

 

Selecting Accounts

 

After you obtain your contract, you may
allocate your premiums among the many Accounts except your employer’s plan blocks some Accounts. With RAs, GRAs, GSRAs or Keoghs,
your employer can not block the Inventory or Cash Market Accounts. Allocations you make to an ATRA, SRA or IRA aren’t topic to your
employer’s plan. You’ll be able to change your allocation for future premiums by:

 

· writing to our workplace at P.O. Field 1259, Charlotte, NC 28201;
· utilizing the TIAA Internet Heart’s Account entry characteristic at www.tiaa.org; or
· calling our Automated Phone Service (24 hours a day) at 800-842-2252.

 

You could be required to finish and return sure kinds (in
good order) to impact these transactions

 

Figuring out the worth of your contract—accumulation items

To
decide the sum of money in your account, we use a measure referred to as an accumulation unit. The buildup unit worth (“AUV”)
for every class of every Account relies upon
on the Account’s funding efficiency and the bills of that class. We
calculate AUV on the finish of every Valuation Day. Your accumulation equals the variety of accumulation items you personal in a category of
an Account multiplied by the AUV for that class.

 

How we worth property

TCIM oversees the calculation of the worth
of the property in every Account as of the shut of each Valuation Day. For Accounts apart from the Cash Market Account, we usually
use market quotations or values obtained from impartial pricing companies to worth securities and different devices held by the
Accounts. If market quotations or values from impartial pricing companies aren’t available or aren’t thought of dependable,
we are going to worth the securities utilizing honest worth, as decided in good religion utilizing procedures accepted by the Board of Trustees.
For fixed-income devices, we usually make the most of matrix pricing, which can also be thought of to be honest worth pricing. We may even
use honest worth if occasions that affect the worth of an funding (as decided in TCIM’s discretion) happen between
the time when its worth is set and the time the AUV is calculated. For instance, we are going to use a home security’s
honest worth when the alternate on which the security is principally traded closes early or when buying and selling within the security is halted
and doesn’t resume earlier than the AUV is calculated. Using honest worth pricing can contain reliance
on quantitative fashions or particular person judgment, and should lead to adjustments
to the costs of portfolio securities which can be
used to calculate the AUV. Though we

       
Faculty Retirement Equities Fund Prospectus 27

honest worth portfolio securities on a security-by-security foundation, Accounts that maintain overseas
portfolio securities will see their portfolio securities honest valued extra continuously than different Accounts that don’t maintain overseas
securities.

Honest worth pricing mostly happens
with securities which can be primarily traded outdoors of the US. Honest worth pricing happens, as an example, when there are
market actions in the US after overseas markets have closed, and there may be the expectation that securities traded on
overseas markets will modify based mostly on market actions in the US when their markets open the subsequent day. In these instances,
we are going to honest worth sure overseas securities when it’s believed the final traded worth on the overseas market doesn’t replicate
the worth of that security on the finish of any valuation day (usually 4:00 p.m. Japanese Time). This can have the impact of reducing
the power of market timers to interact in “stale worth arbitrage,” which takes benefit of the perceived distinction
in worth from a overseas market closing worth.

Whereas utilizing a good worth worth for overseas
securities decreases the power of market timers to generate income by exchanging into or out of an affected Account to the detriment
of longer-term traders, it can cut back among the certainty in pricing obtained by utilizing precise market shut costs.

The Accounts’ honest worth pricing
procedures present, amongst different issues, for every Account to look at whether or not to honest worth overseas securities when there’s a motion
within the worth of a U.S. market index between the shut of a number of overseas markets and the shut of the NYSE Exchanges. For these
securities, the Accounts use a good worth pricing service accepted by the Accounts’ Board of Trustees. This pricing service
employs quantitative fashions to worth overseas fairness investments to be able to modify for stale pricing, which happens between the
shut of sure overseas exchanges and the shut of the NYSE Exchanges. Honest worth pricing is subjective in nature and the use
of honest worth pricing by an Account might trigger the AUV of items inside a category of an Account to vary considerably from the AUV
that will have been calculated utilizing market costs on the shut of the overseas alternate on which a portfolio security
is primarily traded. TCIM additionally examines the costs of particular person securities to find out, amongst different issues, whether or not the worth
of such securities displays honest worth on the shut of the NYSE Exchanges based mostly on market actions. Moreover, we might honest
worth any security when it’s believed the final market citation isn’t available or such citation doesn’t characterize
the honest worth of that security.

Cash market devices (apart from these
within the Cash Market Account) are valued utilizing market quotations, impartial pricing sources or values derived from a pricing matrix
that has numerous sorts of cash market devices alongside one axis and numerous maturities alongside the opposite.

The
Cash Market Account’s portfolio securities are valued utilizing their amortized value. This valuation methodology doesn’t issue
in unrealized good points or losses on the Account’s portfolio securities. Amortized value valuation includes first valuing a security
at its value, and thereafter assuming a continuing amortization to maturity of any low cost or premium, whatever the affect of
fluctuating rates of interest on the security’s market worth. Whereas this methodology offers certainty in valuation, there could also be
occasions when the worth of a security, as decided by amortized value, could also be larger or decrease than the worth the Cash Market Account
would obtain if it bought the security. See the SAI for extra info.

 

If it is advisable to cancel

Typically,
it’s possible you’ll cancel any RA, SRA, GSRA, Conventional IRA, Roth IRA, ATRA or Keogh contract in accordance with the contract’s Proper
to Look at provision (except now we have begun making annuity, or another periodic funds from it) topic to the time interval regulated
by the state through which the contract is issued. To cancel a contract, mail or ship the contract with a signed Discover
of Cancellation (out there by contacting CREF) to our residence workplace. We’ll cancel the contract, then ship the entire present accumulation
or premiums, relying on the state through which your contract was issued, to whoever initially submitted the premiums. Except
we’re returning premiums paid as required by state regulation, you’ll bear the funding danger throughout this era. Cancellation
of a contract might have adversarial tax penalties
.

 

Conflicts of Curiosity

 

Please notice that your funding skilled
might obtain compensation for promoting this Contract to you, within the type of a further money profit (e.g., a bonus). Accordingly,
your funding skilled might have a monetary incentive to supply or advocate this Contract over one other funding. As well as,
some funding professionals might have a monetary incentive to give you a brand new contract rather than the one you already personal. You
ought to solely alternate your Contract in case you decide, after evaluating the options, charges, and dangers of each contracts, that it’s
preferable so that you can buy the brand new contract relatively than proceed to personal the present contract.

 

Easy methods to switch and withdraw your cash

Typically, relying on the phrases of your
plan, contracts, tax regulation and relevant governing paperwork, CREF lets you transfer your cash to and from the CREF Accounts in
the next methods:

       
Faculty Retirement Equities Fund Prospectus 28

· From a category of an Account to the identical class of one other Account;
· From the Accounts to the TIAA Actual Property Account, different TIAA separate
accounts or the TIAA Conventional Annuity;
· To the Accounts from the TIAA Actual Property Account, different TIAA separate
accounts or the TIAA Conventional Annuity (topic to sure fees or restrictions beneath the phrases of these contracts);
· From the Accounts to different corporations;
· To the Accounts from different corporations/plans;
· By withdrawing money; or
· By establishing a program of systematic withdrawals and transfers.

These choices (together with any potential
contract-level fees on transfers) could also be restricted by the phrases of your employer’s plan, by present tax regulation, by eligibility
necessities of the product to which you switch or by the phrases of your contract, as set forth beneath. You ought to be conscious that
every Account might now and again, in its discretion, droop, change or terminate the processes and procedures outlined beneath
for buying, withdrawing and transferring your cash to or from an Account. Transfers from an Account to the TIAA Conventional
Annuity, to the TIAA Actual Property Account, to a different TIAA annuity provided by your employer’s plan or to funds provided beneath
the phrases of your plan should usually be a minimum of $1,000 (aside from systematic transfers, which should usually be a minimum of $100)
or your whole accumulation, if much less. These minimums could also be decreased or eradicated sooner or later. Any such change will likely be utilized
uniformly throughout all contracts going ahead. Money withdrawals, transfers to TIAA to
instantly start annuity revenue and transfers to different corporations aren’t topic to a minimal quantity. Transfers from the TIAA
Actual Property Account to the CREF Accounts are restricted to as soon as per calendar quarter and money withdrawals are at the moment free (though
no such restrict applies to transfers from TIAA Entry). As a result of extreme switch exercise can damage efficiency and different individuals,
CREF might sooner or later, topic to relevant state regulation and the phrases of our contract, restrict how usually you switch or in any other case
modify the switch privilege, together with, amongst different issues, putting restrictions on transfers or charging charges for transfers
and/or withdrawals. Transfers and money withdrawals have an efficient date of the enterprise day we obtain your request in good order.
You may also select to have transfers and withdrawals take impact on the finish of any future enterprise day. Any transfers (together with
any potential contract-level fees) to the TIAA Conventional Annuity or to any TIAA separate account will likely be topic to TIAA’s
guidelines and the phrases of TIAA’s contracts. In the event you maintain your items by way of an middleman, please contact the middleman
for any extra necessities which will apply to the transfers and withdrawals described on this part.

In case you are married, it’s possible you’ll be required
by regulation or by your employer’s plan to point out us advance written consent out of your partner earlier than we make sure transactions
in your behalf.

 

Lump-Sum Profit. Topic to the provisions beneath your
Contract, it’s possible you’ll redeem all the present account accumulation as a lump-sum profit or withdraw a lesser quantity from one or
extra of the funding accounts. Typically, withdrawals aren’t permitted lower than $1,000. The lump-sum profit is not going to be out there
earlier than the earliest date permitted beneath your employer’s plan. A portion of your account accumulation out there to withdraw
could also be restricted by your employer’s plan.

 

In case you are married and if some or all your accumulation is
topic to ERISA, your proper to obtain a lump-sum profit is topic to the rights of your partner. Withdrawals might decrease your
Contract worth, will likely be topic to unusual tax and could also be topic to a tax penalty if taken earlier than age 59½.

 

Systematic withdrawals and transfers

In case your employer’s plan permits, you
can arrange a program to make money withdrawals or transfers mechanically by specifying that we withdraw or switch from an Account
accumulation any mounted variety of accumulation items, greenback quantity or share of accumulation till you inform us to cease or till
your accumulation is exhausted. At the moment, this system should be arrange in order that inner transfers should be a minimum of $100. Within the
future, we might eradicate this minimal switch quantity. Every Account might now and again, in its discretion, droop, change or
terminate the processes and procedures for systematic withdrawals and transfers, though the Accounts will notify you if this
happens.

 

Transfers/exchanges to and from CREF Accounts and different TIAA
Accounts and Funds

Topic to your employer’s plan,
present tax regulation, the phrases of your contract or the circumstances beneath, you may switch or alternate some or all your accumulation
from a category of 1 Account to the identical class of one other Account, to TIAA’s Conventional Annuity, to the TIAA Actual Property
Account (topic to sure limitations) or to a different TIAA separate account or to mutual funds that could be provided beneath the phrases
of your plan. Typically, such transfers or exchanges will likely be valued based mostly on every Account’s or different product’s then-current
worth. Such transfers should usually be a minimum of $1,000 (aside from systematic transfers, which should usually be a minimum of $100)
or your whole accumulation, if much less. These minimums could also be decreased or eradicated sooner or later. Any such change will likely be utilized
uniformly throughout all contracts going ahead. You

       
Faculty Retirement Equities Fund Prospectus 29

can even switch from the TIAA Conventional Annuity, the TIAA Actual Property Account,
one other TIAA separate account or mutual funds provided beneath your employer’s plan to CREF contracts. As a result of extreme switch
exercise can damage efficiency and different individuals, CREF might sooner or later, topic to relevant state regulation and the phrases of
your contract, restrict how usually you switch or in any other case modify the switch privilege, together with, amongst different issues, putting
restrictions of transfers or charging charges for transfers and/or withdrawals. CREF additionally reserves the correct to cease accepting or
to restrict inner transfers to any Account at any time.

Underneath RA, SRA, GSRA, GRA, Retirement Alternative,
Retirement Alternative Plus and Keogh contracts, your employer’s plan might prohibit transfers to any Account, besides, for some
contracts, the Inventory and Cash Market Accounts. Underneath IRA contracts, you may switch funds with out employer restrictions amongst
the Accounts and to TIAA’s Conventional Annuity. In case your establishment provides a plan funded with GSRA contracts, you can too
switch CREF funds between SRA and GSRA contracts. Quantities held beneath an ATRA contract can’t be transferred to or from any retirement
plan contract. Transfers from the TIAA Actual Property Account to an Account are restricted to as soon as each calendar quarter. Transfers
to an Account from the TIAA Conventional Annuity beneath RA, GRA or Retirement Alternative contracts can solely be effected over a interval
of time (as much as 10 years), and could also be topic to different limitations, as laid out in your contract.

 

Transfers from different corporations/plans

Topic to your employer’s plan,
federal tax regulation and CREF’s class eligibility necessities, you may normally switch or roll over cash from one other 403(b),
401(a)/403(a) or governmental 457(b) retirement plan to your CREF contract. You might also roll over before-tax quantities in a Conventional
IRA to 403(b) plans, 401(a)/403(a) plans or eligible governmental 457(b) plans, offered such employer plans agree to just accept the
rollover. You’ll be able to switch cash to CREF from different 401(a) and 403(a) plans.
Quantities transferred to CREF could also be topic to the provisions of your authentic employer’s plan.

Equally, topic to your employer’s
plan and CREF’s class eligibility necessities, you could possibly roll over funds from 401(a), 403(a), and 403(b) and governmental
457(b) plans to a CREF Conventional IRA or, topic to relevant revenue limits, from an IRA containing funds initially contributed
to such plans, to both a CREF Conventional or Roth IRA. IRA to IRA rollover guidelines have modified. See the “Taxes” part
for extra info on these developments. Roth quantities in a 403(b) or 401(a) plan can solely be rolled over to a different Roth 403(b)
or 401(a) account or to a Roth IRA, as permitted by relevant regulation and the phrases of the plans. Funds held by the sponsor of a personal
457(b) plan might be transferred solely to a different non-public 457(b) plan sponsor. Accumulations in non-public 457(b) plans might not be rolled
over to a certified plan (e.g., a 401(a) plan), a 403(b) plan, a governmental 457(b) plan or an IRA.

 

Transfers to different corporations

In case you have an RA, GRA, GSRA, Retirement
Alternative, Retirement Alternative Plus or Keogh contract, your proper to switch your cash to an organization apart from CREF might rely on
your employer’s retirement plan. In case your employer participates in our particular switch companies program, we will make computerized
month-to-month transfers out of your RA or GRA contract to a different firm. You might also be capable of switch accumulations in SRA, GSRA,
IRA or Keogh contracts to a different firm topic to sure tax restrictions. IRA to IRA rollover guidelines have modified. See the
“Taxes” part for extra info on these developments. Roth quantities in a 403(b) or 401(a) plan can solely be rolled
over to a different Roth 403(b) or 401(a) account or to a Roth IRA, as permitted by relevant regulation and the phrases of the plans. Underneath
the Retirement Alternative and Retirement Alternative Plus contracts, your employer might switch monies from an Account and apply such
monies to a different Account or funding choice, topic to the phrases of your plan, and with out your consent.

 

Class conversions

CREF will periodically evaluation every institutional
shopper and/or particular person and annuity product and assess whether or not such shopper or product continues to stay eligible for the category
through which it’s invested. If CREF determines {that a} specific participant contract not meets the eligibility necessities
for a specific class, or that it meets the eligibility necessities of one other class and is entitled to obtain companies constant
with that class, CREF might mechanically convert the contract’s worth to a distinct class of the identical Account. Any such conversion
will likely be preceded by written discover to individuals. CREF reserves the correct to say no to transform a CREF contract even when it no
longer meets the eligibility necessities of its present class.

 

Withdrawals

You’ll be able to withdraw some or all your RA,
GRA, GSRA, Retirement Alternative, Retirement Alternative Plus or Keogh accumulations topic to your employer’s plan and sure tax
restrictions. You may also withdraw some or all your SRA or IRA accumulations topic to sure tax restrictions. You can’t
withdraw cash from a contract in case you have already utilized that cash to start receiving lifetime annuity revenue from that contract.
In case you have a small account worth (beneath $4,000) while you depart your employer or retire, your employer’s plan might enable you
to have CREF money out some or all

       
Faculty Retirement Equities Fund Prospectus 30

of your RA. As well as, if you’re married, it’s possible you’ll be required by regulation or your employer’s
plan to supply advance written consent out of your partner earlier than CREF makes sure transactions
in your behalf.

Underneath present federal tax regulation, wage discount
cash (and the revenue on that cash) can’t be withdrawn beneath sure retirement plans (together with, with out limitation, 403(b)
plans) which can be held in your CREF contracts except you might be age 59½, depart your job, develop into disabled, die or fulfill necessities
associated to certified reservist distributions. If the cash is in a 403(b) annuity, these restrictions apply to premiums and earnings
credited after December 31, 1988. The restrictions apply to all wage discount quantities beneath a 401(okay) plan and funds transferred
to CREF from a 403(b)(7) custodial account. In case your employer’s plan permits, you might also be capable of withdraw wage discount
cash for sure hardships as outlined beneath the IRC.

Underneath present federal tax regulation, you might be
not permitted to withdraw from 457(b) plans sooner than the calendar 12 months through which you attain age 70½ for personal plans
or depart your job or are confronted with an unforeseeable emergency (as outlined by regulation). For governmental 457(b) plans solely, the minimal
age for in-service withdrawals has been lowered to 59½. There are usually no early withdrawal tax penalties in case you withdraw
beneath any of those circumstances (i.e., no 10% excise tax on distributions previous to age 59½).

Particular guidelines
and restrictions apply to IRAs. Traders ought to examine with their certified tax advisor
.

 

Withdrawals to pay advisory charges

You’ll be able to arrange a program to have monies
withdrawn straight out of your retirement plan (in case your employer’s plan permits) or IRA accumulations to pay your monetary
adviser. You can be required to finish and return sure kinds to impact these withdrawals, together with how and from which Accounts
you need these monies to be withdrawn. Earlier than you arrange this program, be sure to perceive the doable tax penalties of
these withdrawals. See the dialogue beneath “Taxes” beneath.

 

Loans.

 

To the extent your employer’s plan offers and in accordance
part 72(p) of the IRC, as amended, and ERISA, to the extent relevant, it’s possible you’ll request a Retirement Plan Mortgage out of your out there
funding account accumulations, at any time previous to your annuity beginning date. A Retirement Plan Mortgage reduces the accumulations
from which it’s paid by the quantity of the mortgage chosen.

 

The quantity of a Retirement Plan Mortgage might usually not exceed
the least of:

 

  I.   the
complete of your accumulations;
  II.   50% of the current worth of your vested accrued profit beneath
any of your employer’s plans; and
  III.   $50,000

 

In figuring out the quantity out there for a Retirement Plan Mortgage,
all plans of your employer, together with 403(b), 401(a), 403(a) and 457(b) plans, to the extent loans can be found, and all such
plans of any associated employers beneath IRC Part 414(b), (c) or (m) shall be thought of employer plans for this goal. Your Contract
or the employer plan might impose a most variety of loans out there to you.

 

A request for a Retirement Plan Mortgage should be made on or earlier than
your annuity beginning date in accordance with the phrases of your Contract. A Retirement Plan Mortgage will likely be efficient as of the enterprise
day on which we obtain your request, in a type acceptable to TIAA in addition to any spousal waiver that could be required beneath ERISA
or the phrases of your employer’s plan. TIAA will decide all values as of the tip of the efficient date. You can’t revoke
a request for a Retirement Plan Mortgage after its efficient date.

 

The Retirement Plan Mortgage will likely be issued in accordance with the
phrases of a mortgage settlement. The mortgage settlement will describe the phrases, circumstances and any charges or fees for the mortgage. Typically,
reimbursement could also be achieved through payroll deduction or ACH. The price of a Retirement Plan Mortgage relies on of charges, as opposed
to the distinction or unfold on rates of interest. There’s a $75 one-time origination charge ($125 for residential loans) and a $25 annual
upkeep charge. Any mortgage repayments utilized to this contract will likely be utilized as new premiums.

 

Easy methods to make transfers or withdrawals

To request a switch or withdrawal, you
can do one of many following:

· write to CREF’s workplace at P.O. Field 1259, Charlotte, NC 28201;
· name us at its Automated Phone Service at 800-842-2252; or
       
Faculty Retirement Equities Fund Prospectus 31

· use the TIAA Internet Heart’s Account entry characteristic at www.tiaa.org.

You could be required to finish and return
sure kinds to impact these transactions. We will droop or terminate your means to transact by phone, fax or over the
Web at any time, for any cause, together with to forestall market timing. There could also be tax regulation restrictions on sure transfers.
Earlier than you switch or withdraw money, be sure to additionally perceive the doable federal and different revenue tax penalties.

 

Confirmations

Topic to sure exceptions to be used of
quarterly confirmations for which CREF has obtained exemptive reduction from the SEC, you’ll usually obtain a affirmation
assertion every time you remit premiums, make a switch, take a money withdrawal from an Account or among the many Accounts, if an administrative
adjustment is made to your account or your funding in a single class is transformed to a distinct class. The affirmation assertion
will present the date and quantity of every transaction. Nevertheless, in case you’re utilizing an computerized funding plan, you’ll obtain
an announcement confirming these transactions following the tip of every calendar quarter. The Accounts can droop, change or terminate
the automated funding plan choice at any time, though the Accounts will notify you if this happens.

In case you have any accumulations in an Account,
you may be despatched an announcement every quarter which units forth the next info: premiums paid throughout the quarter, the quantity
and greenback worth of accumulation items within the Accounts credited to the participant throughout the quarter and the steadiness of items
in every Account, money withdrawals and administrative changes if any, from every Account throughout the quarter and any transfers
throughout the quarter. The Accounts aren’t chargeable for any losses resulting from unauthorized or fraudulent directions as long as the
Accounts comply with cheap security procedures to confirm your id. It’s your duty to evaluation and confirm the accuracy
of your affirmation statements instantly after you obtain them.

A minimum of semi-annually, stories containing
the monetary statements of the Accounts and a schedule of investments held by the Accounts through which you could have accumulations will
be made out there to you on the TIAA web site.

 

Market timing/extreme
buying and selling coverage

There are individuals who might attempt to revenue
from making transactions backwards and forwards among the many Accounts, the TIAA Actual Property Account and the mutual funds or different funding
choices out there beneath the phrases of your plan in an effort to “time” the market. As cash is shifted out and in of
the Accounts, the Accounts might incur transaction prices, together with, amongst different issues, bills for purchasing and promoting securities.
These prices are borne by all individuals, together with long-term traders who don’t generate these prices. As well as, market timing
can intrude with environment friendly portfolio administration and trigger dilution if timers are capable of make the most of pricing inefficiencies.
Consequently, the Accounts aren’t acceptable for such market timing and you shouldn’t spend money on the Accounts if you wish to
interact in market timing exercise.

The Board of Trustees has adopted insurance policies
and procedures to discourage this market timing exercise. Underneath these insurance policies and procedures, if, inside a 60-calendar day interval,
a participant redeems or exchanges any monies out of an Account, subsequently purchases or exchanges any monies again into that
similar Account after which redeems or exchanges any monies out of that very same Account, the participant is not going to be permitted to make digital
transfers (i.e., transfers over the Web, by phone or by fax) again into that very same Account by way of a purchase order or
alternate for 90 calendar days.

The Accounts’ market timing insurance policies
and procedures is not going to be utilized to the Cash Market Account or to sure sorts of transactions like systematic withdrawals,
systematic purchases, computerized rebalancings, demise and hardship withdrawals, sure transactions made inside a retirement or
worker profit plan, corresponding to contributions, necessary distributions, loans and employer-initiated transactions, and different varieties
of transactions specified by the Accounts’ administration. As well as, the market timing insurance policies and procedures is not going to apply
to sure tuition (529) packages, funds of funds, wrap packages, asset allocation packages and different comparable packages which can be
accepted by the Accounts’ administration. The Accounts’ administration might also waive the market timing insurance policies and procedures
when it’s believed that such waiver is in an Account’s finest pursuits, together with however not restricted to when it’s decided
that enforcement of those insurance policies and procedures isn’t mandatory to guard the Account from the consequences of short-term buying and selling.

The Accounts additionally reserve the correct to
reject any buy or alternate request, together with when it’s believed {that a} request can be disruptive to an Account’s
environment friendly portfolio administration. The Accounts additionally might droop or terminate your means to transact by phone, fax or over the
Web for any cause, together with the prevention of market timing. A purchase order or alternate request could possibly be rejected or digital
buying and selling privileges could possibly be suspended due to the timing or quantity of the funding or due to a historical past of extreme buying and selling
by the participant. As a result of the Accounts have discretion in making use of this coverage, it’s doable that comparable transaction exercise
could possibly be dealt with in a different way due to the encompassing circumstances.

       
Faculty Retirement Equities Fund Prospectus 32

The Accounts’ portfolio securities
are honest valued, as mandatory (most continuously with respect to overseas holdings), to assist make sure that a portfolio security’s
true worth is mirrored within the Accounts’ AUV, thereby minimizing any potential stale worth arbitrage.

The Accounts search to use their particularly
outlined market timing insurance policies and procedures uniformly to all Account individuals, and to not make exceptions with respect to
these insurance policies and procedures (past the exemptions famous above). The Accounts make cheap efforts to use these insurance policies
and procedures to individuals who personal items by way of omnibus accounts. These efforts might embrace requesting transaction information from
intermediaries now and again to confirm whether or not an Account’s insurance policies are being adopted and/or to instruct intermediaries
to take motion in opposition to individuals who’ve violated an Account’s market timing insurance policies. At occasions, the Accounts might agree
to defer to an middleman’s market timing coverage if the Account’s administration believes that the middleman’s
coverage offers comparable safety of Account individuals’ pursuits. The Accounts have the correct to change their market
timing insurance policies and procedures at any time with out advance discover.

The Accounts aren’t acceptable for market
timing. You shouldn’t spend money on the Accounts if you wish to interact in market timing exercise.

Individuals in search of to interact in market
timing might deploy quite a lot of methods to keep away from detection, and, regardless of the Accounts’ efforts to discourage market timing,
there is no such thing as a assure that CREF or its brokers will be capable of determine such individuals or curtail their buying and selling practices.

In the event you spend money on an Account by way of an
middleman, together with by way of a retirement or worker profit plan, it’s possible you’ll be topic to extra market timing or extreme
buying and selling insurance policies applied by the middleman or plan. Please contact your middleman or employer for extra particulars.

 

Timing of funds to you

On the whole, we are going to make the
following sorts of funds inside seven calendar days after now we have obtained your request in good order:

· money withdrawals;
· transfers to TIAA or to different corporations;
· funds beneath a fixed-period annuity; and
· demise advantages.

Every of these kind of funds
is described additional beneath. The seven-day interval could also be prolonged in sure circumstances, corresponding to an SEC-recognized emergency.
There might also be delays in making funds for different causes (e.g., funds in reference to loans, or in case you have requested
a switch to a different firm and now we have not obtained info we’d like from that firm, or if there may be lacking or incorrect
info in kinds required for revenue tax withholding and reporting functions). In the event you request that withdrawal proceeds from
an Account be transferred to a different funding car and there’s a delay within the funding of these proceeds, you’ll not
expertise the funding efficiency of that funding car throughout such a delay.

 

When you find yourself able to obtain your annuity revenue

 

The annuity interval typically

You’ll be able to obtain an revenue stream from all
or a part of an accumulation in any Account. Typically, as soon as distributions are permitted to start beneath your plan or contract, you
might start to obtain annuity revenue. You ought to be a minimum of age 59½ to start receiving annuity revenue apart from
from a one-life or two-life annuity. In any other case, you’ll have to pay a ten% penalty tax on the taxable quantity, besides beneath sure
circumstances. As well as, you can’t start receiving revenue later than permitted beneath the minimal distribution guidelines of the
IRC. See the part entitled “Taxes” beneath for extra info. Please notice that while you annuitize, your investments
are transformed to revenue funds and you’ll not be capable of make any extra withdrawals out of your Contract.

Additionally, beneath the phrases of the contract,
you can’t start a one-life annuity after age 90 or a two-life annuity after both you or your annuity associate reaches age 90.

Your revenue funds could also be paid out from
the Accounts by way of quite a lot of revenue choices. You’ll be able to choose a distinct revenue choice for various parts of your accumulation,
however when you’ve began one-life or two-life annuity funds you can’t change your revenue choice or annuity associate for
that cost stream.

Normally revenue funds are month-to-month. You
can select quarterly, semiannual and annual funds as properly. CREF has the correct to not make funds at any interval that will
trigger the preliminary cost to be lower than $100. We’ll ship

       
Faculty Retirement Equities Fund Prospectus 33

your funds by digital funds switch to your financial institution or, in your
request, by mail to your property deal with or to your financial institution.

For one-life annuities, two-life annuities,
annuities for a fixed-period, and Earnings Take a look at Drive, your preliminary revenue funds are based mostly on the worth of your accumulation on
the final valuation day earlier than the annuity beginning date. We calculate preliminary revenue based mostly on:

· the quantity of your collected steadiness that you simply apply when starting
to obtain annuity revenue;
· the revenue choice or choices you select; and
· an assumed annual funding return of 4% and, for one-life annuities,
two-life annuities and Earnings Take a look at Drive, mortality assumptions for you and your annuity associate, in case you have one.

In your annuity beginning date, all your
accumulation items allotted to one-life annuities, two-life annuities, or annuities for a hard and fast interval will likely be transformed to annuity
items of the identical Account(s) mechanically. The annuity items will likely be aggregated with Class R3 items for allocating revenue and
bills, no matter which class(es) you owned previous to that date.. Your funds change after the preliminary cost primarily
based mostly on internet funding outcomes and bills for Class R3 items of an Account and the mortality expertise for the revenue change
methodology in Class R3 of that Account.

For one-life annuities, two-life annuities,
annuities for a fixed-period and Earnings Take a look at Drive, there are two revenue change strategies for annuity funds: annual and month-to-month.
Underneath the annual revenue change methodology, funds change every Might 1, based mostly on the web funding outcomes of an Account throughout
the prior 12 months (from the day following the final Valuation Day in March of the prior 12 months by way of the final Valuation Day in March
of the present 12 months). Underneath the month-to-month revenue change methodology, funds change each month, based mostly on the web funding outcomes
throughout the earlier valuation interval. Underneath this methodology, we worth annuity items on the twentieth of every month or on the previous Enterprise
Day if the twentieth isn’t a Enterprise Day. The whole worth of your annuity funds could also be roughly than your complete premiums. For
extra info on the Earnings Take a look at Drive characteristic, please see the part beneath entitled “Annuity revenue choices—Earnings
Take a look at Drive.”

 

Please notice that while you annuitize, your accumulation will likely be
transformed to revenue funds. In the event you elect partial annuitization, it’s possible you’ll apply a portion of your accumulation to one of many revenue
cost choices that we provide, whereas the rest of your accumulation can stay invested in your funding account. Whenever you
absolutely annuitize your whole accumulation, usually, you’ll not be capable of make withdrawals out of your contract and all
accumulation part advantages terminate, together with the demise profit.

 

Influence of mortality expertise on annuity funds

For one-life annuities, two-life annuities
and annuities for a fixed-period, how a lot you or your beneficiary obtain in annuity funds from any Account will rely in
half on the shared mortality expertise of the annuity fund (yearly revalued or month-to-month revalued) from which the funds are
made. For instance, if the individuals receiving revenue from an Account’s yearly revalued annuity fund stay longer, as a bunch,
than anticipated, the quantity payable to every particular person will likely be lower than in the event that they as a bunch die ahead of anticipated. So the “mortality
danger” of every Account’s annuity fund is shared amongst those that obtain revenue from it and isn’t assured by both
CREF or TIAA.

 

Annuity beginning date

Ordinarily, annuity funds start on the
date you designate as your annuity beginning date, offered now we have obtained all documentation mandatory for the revenue choice you
have picked. If one thing is lacking, we are going to defer your annuity beginning date till we obtain the lacking info. Your first
annuity cost could also be delayed whereas we course of your alternative of revenue choices and calculate the quantity of your preliminary cost.
You could designate any future date on your annuitization request, in accordance with our procedures and so long as it’s one on
which we course of annuitizations.

Any premiums obtained inside 70 days of
the primary of the month through which funds start could also be used to supply extra annuity revenue. Premiums obtained after 70 days
will stay in your accumulating annuity contract till you could have given additional directions. Ordinarily, your first annuity cost
might be made on any enterprise day between the primary and twentieth of any month.

 

Annuity revenue choices

Each the variety of annuity items you buy
and the quantity of your revenue funds will rely on which revenue choice(s) you choose. Your employer’s plan, tax regulation and
ERISA might restrict which revenue choices you should use to obtain revenue. Federal tax regulation might prohibit your annuity choices, relying
on whom you title as second annuitant or beneficiary. Sure designated beneficiaries might have to obtain cost of demise advantages
inside ten years of the 12 months of your demise to be able to fulfill required minimal distribution (“RMD”) guidelines. For extra
info see “Taxes.” Ordinarily,

       
Faculty Retirement Equities Fund Prospectus 34

you’ll select your revenue choices shortly earlier than you need funds to start,
however you can also make or change your alternative any time earlier than your annuity beginning date.

All the revenue choices present variable
funds, and the quantity of revenue you obtain relies upon partly on the funding expertise of the funding accounts chosen
by you. The present choices are:

· One-Life Annuity with or with out Assured Interval: Pays revenue
so long as you reside. In the event you go for a assured interval (10, 15 or 20 years) and also you die earlier than it’s over, revenue funds
will proceed to your beneficiary till the tip of the interval (though RMD guidelines might require cost inside ten years to keep away from
an excise tax). If you don’t go for a assured interval, all funds finish at your demise—so, it’s doable for you
to obtain just one cost in case you die lower than a month after funds begin. (The 15-year assured interval isn’t out there
beneath all contracts.)
· Annuity for a Mounted Interval: Pays revenue for a set variety of years
chosen by you. The variety of years out there so that you can select from varies by contract and this selection isn’t out there beneath all
contracts.
· Two-Life Annuity with or with out Assured Interval: Pays revenue
to you so long as you reside, then continues at both the identical or a decreased stage for the lifetime of your annuity associate. There are
4 sorts of two-life annuity choices, all out there with or with no assured interval—Full Profit to Survivor, Two-Thirds
Profit to Survivor, 75% Profit to Annuity Companion and a Half-Profit to Annuity Companion. Underneath the Two-Thirds Profit to Survivor
choice, funds to you may be decreased upon the demise of your annuity associate. In the event you go for a assured interval (10, 15 or 20
years) and also you and your annuity associate die earlier than it’s over, revenue funds will proceed to your beneficiary till the tip
of the interval (though RMD guidelines might require cost inside ten years to keep away from an excise tax). If you don’t go for a assured
interval, all funds finish on the demise of the latter of you and your annuity associate, so it’s doable so that you can obtain solely
one cost in case you and your annuity associate die lower than a month after funds begin. (The 15-year assured interval isn’t out there
beneath all contracts.)
· Minimal Distribution Possibility (“MDO”): Typically out there
provided that you need to start annuity funds beneath the IRC minimal distribution necessities. (Some employer plans assist you to elect
this selection earlier—please contact CREF for extra info.) The choice, if elected, mechanically pays an quantity designed
to meet the distribution necessities beneath federal tax regulation. You have to apply your whole accumulation beneath a contract in case you
need to use the MDO. It’s doable that revenue beneath the MDO will stop throughout your lifetime. Previous to age 90, and topic to
relevant plan and authorized restrictions, you may apply any remaining a part of an accumulation utilized to the MDO to another revenue
choice for which you’re eligible. Utilizing the MDO is not going to have an effect on your proper to take a money withdrawal of any accumulation
not but distributed (to the extent {that a} money withdrawal was out there to you beneath your contract and beneath the phrases of your
employer’s plan). This computerized payout choice isn’t out there beneath all contracts. As an alternative, for some contracts, RMDs will
be paid straight from these contracts pursuant to the phrases of your employer’s plan.
· Earnings Take a look at Drive: Earnings Take a look at Drive is an optionally available characteristic that
permits you to strive variable revenue funds for a 2-year interval with out making an irrevocable determination. You keep your accumulation
items throughout the Earnings Take a look at Drive, and funds made throughout the Earnings Take a look at Drive are withdrawals out of your accumulation items.
Funds are calculated to approximate the quantity you’d obtain beneath a One-Life or Two-Life Annuity for the revenue choice
and revenue change methodology you choose, adjusted to replicate the Earnings Take a look at Drive. You’ll be able to change your thoughts throughout the Earnings Take a look at
Drive, and future funds will cease while you notify us of your determination previous to expiration of the 2-year interval. In the event you die throughout
the Earnings Take a look at Drive, funds will cease, and the beneficiary named in your contract will likely be entitled to the remaining accumulation.
(RMD guidelines might require cost inside ten years.) On the finish of the Earnings Take a look at Drive, if funds haven’t been stopped, your
remaining accumulation utilized to the Earnings Take a look at Drive characteristic will likely be transformed to annuity items payable beneath the revenue choice
you selected while you began this characteristic. As soon as the conversion to annuity items takes place, it’s irrevocable. In the event you determine earlier than
the tip of the Earnings Take a look at Drive that you simply need to start annuity revenue funds instantly, it’s possible you’ll achieve this topic to sure election
procedures. The conversion of accumulation items to annuity items might lead to annuity funds which can be better or lesser than
the quantity of the final cost throughout the Earnings Take a look at Drive. We might cease offering the Earnings Take a look at Drive characteristic at any time. The
Earnings Take a look at Drive characteristic might not be out there beneath the phrases of your employer’s plan. For details about withdrawals
out of your contract, see “Easy methods to switch and withdraw your cash.” In the event you determine to Earnings Take a look at Drive your whole accumulation,
any premiums obtained throughout the 2-year interval will likely be utilized to buy accumulation items that will likely be used to extend your
variable revenue funds.

For any of the revenue choices described
above, present federal tax regulation offers that your assured interval can’t exceed the joint life expectancy of you and your
beneficiary or annuity associate, different IRC stipulations might make some revenue choices unavailable to you, and RMD guidelines might require
sure designated beneficiaries to obtain cost of demise advantages inside ten years of your demise to keep away from an excise tax. If
you might be married at your annuity begin date, it’s possible you’ll be required by regulation to decide on an revenue choice that gives survivor annuity
revenue to your partner, except your partner waives the proper.

       
Faculty Retirement Equities Fund Prospectus 35

Receiving Lump-Sum Funds (Retirement
Transition Profit):
In case your employer’s plan permits, you could possibly obtain a single-sum cost of as much as 10% of
the worth of any a part of an accumulation being transformed to a one-life or two-life annuity on the annuity beginning date. Such employer
plan and 10% limitations don’t apply to IRAs. In fact, in case your employer’s plan permits money withdrawals, you may take a
bigger quantity (as much as 100%) of your accumulation in any Account as a money cost. The retirement transition profit will likely be topic
to present federal revenue tax necessities and doable early distribution penalties. See “Taxes.”

Different revenue choices might develop into out there
sooner or later, topic to the phrases of your retirement plan and related federal and state legal guidelines. CREF might cease providing sure
revenue choices sooner or later. For extra details about any annuity choices, please contact CREF.

 

Transfers throughout the annuity interval

After you start receiving annuity revenue
from a one-life annuity, two-life annuity, or annuity for a hard and fast interval, as soon as every calendar quarter, you may switch revenue payable
from one Account to a comparable annuity offering for funds from one other Account, the TIAA Conventional Annuity, one other TIAA
separate account annuity or the TIAA Actual Property Account. A comparable annuity is an annuity that’s payable beneath the identical revenue
choice and has the identical annuitant(s) and remaining assured interval, if any.

Annuitants receiving revenue from TIAA Conventional
one-life or two-life annuities might switch some or all of their revenue to comparable one-life or two-life annuities funded by way of
the Inventory, World Equities, Development, Fairness Index or Social Alternative Accounts. Such transfers are restricted to twenty% of annuity revenue
in any 12 months. A program transferring all revenue in installments yearly over a five-year interval might also be chosen. As soon as revenue
has been transferred from TIAA Conventional, subsequent transfers could also be made solely among the many Inventory, World Equities, Development, Fairness
Index and Social Alternative Accounts. Transfers to different Accounts or again to TIAA Conventional is not going to be permitted. CREF will course of
the switch on the Enterprise Day it receives your request except you’ve requested that the switch take impact on one other future
Enterprise Day.

Transfers beneath the annual revenue cost
methodology will have an effect on your annuity funds starting on the Might 1 following the final Valuation Day in March that’s on or after the
efficient date of the switch. Transfers beneath the month-to-month revenue cost methodology and all transfers into the TIAA Conventional Annuity
will have an effect on your annuity funds starting with the primary cost due after the month-to-month cost valuation day that’s on or after
the switch date. Underneath this methodology, we worth annuity items on the twentieth of every month or on the previous enterprise day if the
twentieth isn’t a Enterprise Day. You’ll be able to swap between the annual and month-to-month revenue change strategies, and the swap will go into impact
on the final Valuation Day in March.

 

Illustrations of annuity funds

Funding efficiency throughout the accumulation
interval impacts the quantity you might be accumulating for retirement. As soon as you might be not accumulating and you start to obtain revenue
funds beneath your CREF contract, funding efficiency (based mostly on Class R1 by way of April 24, 2015 and on Class R3 thereafter)
impacts the quantity of your revenue funds. The next line graphs present how the efficiency of every of the Accounts has affected
the revenue funds of a person participant during the last 20 years. As a result of bills range throughout unit courses, the efficiency
of courses R1, R2, R3 and R4 will range from one another. The road graphs are based mostly on the precise funding efficiency and mortality
expertise of Class R1 (by way of April 24, 2015) and Class R3 (thereafter) of every Account for the interval that’s offered by way of
March 31, 2021. Moreover, these line graphs don’t keep in mind the affect of any TIAA plan pricing the place a number of
CREF Accounts are funding choices in an employer retirement plan. For instance, since all Class R4 individuals take part by way of
employer retirement plans, the return to every Class R4 participant can be decrease after bearing in mind plan-level charges for
TIAA recordkeeping that the plan passes on to the participant.

Earnings proven for every plot level on the
line graphs for the said 12 months is for the cost interval Might 1 of the said 12 months by way of April 1 of the next 12 months. The road
graphs assume that the annuitant obtained an preliminary annuity cost of $1,000 on Might 1 of the primary 12 months offered within the line
graph beneath the annual revenue change methodology. Notice that after April 24, 2015, annuity funds are based mostly on Class R3, which has
decrease administrative and distribution bills than Class R1.

Every plot level on the road graphs for
the said 12 months represents the quantity of the 12 month-to-month annuity funds made in that fiscal 12 months beneath a CREF contract based mostly on
the above assumptions. Every line graph exhibits how revenue funds would have modified over time if the entire participant’s
cash beneath the contract had been initially invested within the Account proven within the line graph.

The adjustments in revenue funds proven in
the road graphs primarily replicate the funding efficiency of Class R1 (by way of April 24, 2015) and Class R3 (thereafter) of
the actual Account. Specifically, the funding efficiency of

       
Faculty Retirement Equities Fund Prospectus 36

an Account might be impacted by the asset class (fairness or fixed-income)
publicity inside the Account. On the whole, elevated or decreased publicity to both fairness or fixed-income securities as totally different
asset courses might have a destructive affect on funding efficiency of an Account in periods of basic market appreciation
or depreciation, because the case could also be. Annuity revenue cost expertise might be impacted by: (i) single asset class publicity ensuing
from annuitizing from a single Account; (ii) blended asset publicity ensuing from annuitizing from a number of Accounts; and (iii)
the interval available in the market cycle through which the annuity payout happens. Mortality expertise inside every Account and different elements can
additionally affect adjustments in funds. To grasp the impact of funding efficiency, take into account that revenue funds replicate
an assumed funding return of 4%. If the funding efficiency of a given class of items of an Account is continually equal to
the assumed funding return of 4% in a given 12 months (and assuming mortality expertise and different elements don’t change), a participant’s
revenue cost within the following 12 months wouldn’t change. If funding efficiency is 10% or 3% in a given 12 months and mortality expertise
(and different elements) don’t change, revenue funds within the following 12 months would enhance by roughly 6% or lower by roughly
1%, respectively.

The road graphs present the impact on revenue
funds of previous funding efficiency and mortality expertise of Class R1 (by way of April 24, 2015) and Class R3 (thereafter)
of every Account. There might be no assurance that future funding efficiency or mortality expertise would be the similar as within the
previous, and revenue funds beneath your contract might change roughly than these proven within the line graphs beneath. The funding
return of an Account will fluctuate over time, and the mortality expertise of the individuals in an Account might change over time.
Each might trigger revenue funds beneath your contract to range. The quantity of your preliminary revenue cost will depend on a number of
elements, together with the scale of your account steadiness that you simply apply to buy revenue, which annuity revenue choice you choose (such
as choices on one or two lives and choices with or with no assured interval), your cost frequency (month-to-month, quarterly, and so on.)
and in your age (and the age of your annuity associate, if any).

 

Inventory Account

 

 

World Equities Account

 

       
Faculty Retirement Equities Fund Prospectus 37

Development Account

 

 

Fairness Index Account

 

 

Core Bond Account

 

 

Inflation-Linked Bond Account

 

       
Faculty Retirement Equities Fund Prospectus 38

Social Alternative Account

 

 

Cash Market Account

 

 

BENEFITS AVAILABLE UNDER THE CONTRACT

 

The next desk summarizes details about the advantages
out there beneath the Contract.

 

Abstract of Advantages
Identify of Profit Function Customary/
Non-obligatory
Most Price Temporary Description of
Restrictions/Limitations
Demise Profit The quantity of the demise profit is the buildup on the valuation day that we authorize cost of the demise profit. Customary No cost ·    Withdrawals might considerably cut back the demise profit.
Lump-Sum Profit (Retirement Transition Profit)

In case your employer’s plan permits, you could possibly obtain
a single-sum cost of as much as 10% of the worth of any a part of an accumulation being transformed to a one-life or two-life annuity
on the annuity beginning date. Such employer plan and 10% limitations don’t apply to IRAs.

 

Topic to the provisions beneath your Contract, it’s possible you’ll redeem
accumulation items usually not lower than $1,000 from one

Non-obligatory No cost

·    Topic usually to a minimal quantity of $1,000.

·    A lump-sum profit is not going to be out there earlier than the earliest date
permitted beneath your employer’s plan.

·    The portion of your accumulation out there to you as a lump-sum profit
could also be restricted by your employer’s plan.

·    In case you are married and if some or all your accumulation is topic
to ERISA, your proper to obtain a lump-sum profit is topic to the rights of your partner.

·    Withdrawals might decrease your Contract worth, will likely be topic to unusual
tax and

       
Faculty Retirement Equities Fund Prospectus 39

 

or extra of the Accounts previous to annuitization.

   

     could also be topic to a tax penalty if taken earlier than age 59½.

 

For extra info on demise advantages, see the part beneath.
For extra info on the lump-sum profit see the part entitled “Lump-sum profit” above.

 

Demise advantages

 

Selecting beneficiaries

Topic to the phrases of your employer’s
plan, demise advantages beneath CREF contracts are payable to the beneficiaries you title. Whenever you buy your annuity contract, you
title a number of beneficiaries to obtain the demise profit in case you die. You’ll be able to usually change your beneficiaries any time earlier than
you die, and, except you instruct in any other case, your annuity associate can do the identical after your demise. Altering beneficiaries might
affect your annuity choices, even for annuities which have already begun to make funds. Adjustments in tax legal guidelines might require sure
designated beneficiaries to obtain cost of demise advantages inside ten years of the 12 months of your demise. For extra info,
see “Taxes.”

 

Quantity of demise profit

In the event you die throughout the accumulation interval,
the demise profit is the quantity of your accumulation. In the event you and your annuity associate die throughout the annuity interval whereas funds
are nonetheless due beneath a fixed-period annuity or for the rest of a assured interval, the demise profit is the current worth,
based mostly on an efficient annual rate of interest of 4%, of the unit annuity funds due for the rest of the interval.

 

Instance

 

If the whole quantity of your premiums equals $100,000 and has
grown to $110,000 resulting from optimistic efficiency of the Accounts you selected to spend money on, then your demise profit will likely be $110,000.
Equally, in case your accumulation has shrunk to $90,000 resulting from destructive efficiency of the Account you selected to spend money on, then your
demise profit will likely be $90,000.

 

Cost of demise profit

To authorize cost and pay a demise profit,
we should have obtained all mandatory kinds and documentation (in good order), together with proof of demise and the number of the
methodology of cost.

Each state has some type of unclaimed
property legal guidelines that impose various authorized and sensible obligations on insurers and, not directly, on individuals, insureds, beneficiaries
and different payees of proceeds. Unclaimed property legal guidelines usually present for escheatment to the state of unclaimed proceeds beneath
numerous circumstances.

Individuals are urged to maintain their very own,
in addition to their insureds’, beneficiaries’ and different payees’, info updated, together with full names, postal
and digital media addresses, phone numbers, dates of delivery, and Social Security numbers. Such updates ought to be communicated
in writing to TIAA at P.O. Field 1259, Charlotte, NC 28201, by calling our Automated Phone Service (24 hours a day) at 800-842-2252,
or through www.tiaa.org.

 

Strategies of cost of demise advantages

Typically, you may select on your beneficiary
the strategy we are going to use to pay the demise profit, however few individuals do that. In the event you select a cost methodology, you can too forestall
your beneficiaries from altering it. Most individuals depart the selection to their beneficiaries. We will forestall any alternative if its preliminary
cost is lower than $25. In case your beneficiary doesn’t particularly instruct us to start out paying demise advantages inside a 12 months of
your demise, we might begin making funds to them over 5 years utilizing the fixed-period annuity methodology of cost. Your alternative
of beneficiary might restrict your choices with regard to cost of the demise profit. Adjustments in tax legal guidelines might require sure designated
beneficiaries to obtain cost of demise advantages inside ten years of your demise to be able to fulfill RMD guidelines. For extra info,
see “Taxes.”

 

Funds throughout accumulation interval

At the moment, the out there strategies of cost
for demise advantages from funds within the accumulation interval are:

· Single-Sum Cost, through which all the demise profit is paid
to your beneficiary directly;
· One-Life Annuity With or With out Assured Interval, through which the
demise profit is paid for the lifetime of the beneficiary or by way of the assured interval, topic to present tax legal guidelines;
       
Faculty Retirement Equities Fund Prospectus 40

· Annuity for a Mounted Interval (solely out there beneath sure contracts),
through which the demise profit is paid for a hard and fast variety of years (topic to the phrases of the contract and present tax legal guidelines);
and
· Minimal Distribution Funds (this selection isn’t out there beneath
all contracts),
through which the beneficiary can elect to have funds made mechanically within the quantities essential to fulfill
the IRC’s minimal distribution necessities. It’s doable beneath this methodology that your beneficiary is not going to obtain revenue
for all times.

These choices might not be out there to a
designated beneficiary beneath federal regulation. Demise advantages are normally paid month-to-month (except you selected a single-sum methodology of cost),
however your beneficiary can swap them to quarterly, semiannual or annual funds. Notice that for Retirement Alternative and Retirement
Alternative Plus contracts, and for IRA contracts which can be issued or opened on or after October 11, 2010, beneficiaries might solely obtain
both a single-sum cost or a one-life annuity (with or with no assured interval).

 

Funds throughout annuity interval

In the event you and your annuity associate die throughout
the annuity interval, your beneficiary can select to obtain any remaining assured periodic funds due beneath your contract (though
RMD guidelines might require cost inside ten years to keep away from excise tax). Alternatively, your beneficiary can select to obtain the
commuted worth of these funds in a single sum except you could have indicated in any other case. The quantity of the commuted worth will likely be
totally different from the whole of the periodic funds that will in any other case be paid.

Ordinarily, demise advantages are topic
to federal tax. If taken as a lump sum, demise advantages can be taxed like full withdrawals. If taken as annuity advantages,
the demise profit can be taxed like annuity funds. For extra info, see the dialogue beneath “Taxes” beneath,
and the SAI.

 

Your partner’s rights to demise advantages

On the whole, your alternative of beneficiary
for demise advantages might, in some instances, be topic to the consent of your partner. Equally, if you’re married on the time of your
demise, federal regulation might usually require a portion of the demise profit be paid to your partner even in case you have named another person
as beneficiary. In the event you die with out having named any beneficiary, any portion of your demise profit not payable to your partner will
usually go to your property except your employer’s plan offers in any other case.

In case you are married, and all or a part of
your accumulation is attributable to contributions made beneath:

A)   
an employer plan topic to ERISA; or

B)   
an employer plan that gives for spousal rights to advantages,

then, solely to the extent required by the IRC or ERISA or the
phrases of your employer plan, your rights to decide on sure advantages are restricted by the rights of your partner to advantages as
follows:

· Partner’s survivor retirement profit. In case you are married in your
annuity beginning date, your revenue profit should be paid beneath a two-life annuity along with your partner as second annuitant.
· Partner’s survivor demise profit. In the event you die earlier than your annuity
beginning date and your partner survives you, the cost of the demise profit to your named beneficiary could also be topic to your partner’s
proper to obtain a demise profit. Underneath an employer plan topic to ERISA, your partner has the correct to a demise advantage of a minimum of
50% of any a part of your accumulation attributable to contributions made beneath such a plan. Underneath an employer plan not topic to
ERISA, your partner might have the correct to a demise profit within the quantity stipulated within the plan.

Your partner might consent to a waiver of
his or her rights to those advantages.

 

Waiver of partner’s rights to demise advantages

In case you are married, and all or a part of
your accumulation is attributable to contributions made beneath:

A)   
an employer plan topic to ERISA; or

B)   
an employer plan that gives for spousal rights to advantages,

then, solely to the extent required by the IRC or ERISA or the
phrases of your employer plan, your partner should consent to a waiver of his or her rights to survivor advantages earlier than you may select:

· an revenue choice apart from a two-life annuity along with your partner as second
annuitant; or
· beneficiaries who aren’t your partner for greater than the proportion of
the demise profit allowed by the employer plan; or
· a lump-sum profit.

In an effort to waive the rights to spousal
survivor advantages, we should obtain, in a type passable to us, your partner’s consent, or a passable verification that
your partner can’t be positioned. A waiver of rights with respect to an revenue choice or a lump-sum profit or withdrawal should be
made in accordance with the IRC and ERISA, or the relevant

       
Faculty Retirement Equities Fund Prospectus 41

provisions of your employer plan. A waiver of the survivor demise
profit might not be efficient whether it is made previous to the sooner of the plan 12 months through which you attain age 35 or your severance from
employment of your employer.

Verification of your marital standing might
be required, in a type passable to us, for functions of creating your partner’s rights to advantages or a waiver of those
rights. (For extra details about the definition of a “partner,” see “Taxes—Definition of Partner beneath
Federal Legislation.”) You could revoke a waiver of your partner’s rights to advantages at any time throughout your lifetime and earlier than
the annuity beginning date. Your partner might not revoke a consent to a waiver after the consent has been given.

 

OTHER FEATURES OF THE CONTRACT

 

Within the chart beneath is a abstract of different
options of the Contract:

 

Inside Transfers Topic to the provisions beneath your Contract, it’s possible you’ll internally switch accumulation items usually not lower than $1,000 from one Account to a different Account or to your companion TIAA contract. Non-obligatory No cost

·    Topic usually to a minimal quantity of $1,000..

·    Inside transfers could also be restricted to not a couple of in a calendar
quarter.

Systematic Withdrawals Topic to the provisions beneath your Contract, it’s possible you’ll redeem accumulation items usually not lower than $100 from a number of of the Accounts on a scientific foundation. Non-obligatory No Cost

·    Topic usually to a minimal quantity of $100.

·    Could also be paid semi-monthly, month-to-month, quarterly, semi-annually or yearly.

·    In case you are married and if some or all your accumulation is topic
to ERISA, your proper to obtain a lump-sum profit is topic to the rights of your partner.

·    Withdrawals might decrease your Contract worth, will likely be topic to unusual revenue tax and could also be topic to a tax penalty if taken earlier than age 59½.

 

Systematic Inside Transfers Topic to the provisions beneath your Contract, it’s possible you’ll internally switch accumulation items usually not lower than $100 from one Account to a different Account or to your companion TIAA contract on a scientific foundation. Non-obligatory No Cost

·    Topic usually to a minimal quantity of $100.

·    Inside transfers could also be scheduled semi-monthly, month-to-month, quarterly,
semi-annually or yearly.

Systematic Withdrawals to Pay Monetary Advisory Charges Topic to the provisions beneath your Contract and in sure conditions, as agreed to between you and a registered funding adviser, you may arrange a program to have cash withdrawn straight out of your Contract to pay your advisor. Non-obligatory No Cost

·    We is not going to assess a cost for the withdrawal of those advisory charges.

·    Withdrawals might decrease your Contract worth.

·    It’s best to seek the advice of a tax adviser relating to the tax therapy of the
cost of adviser charges out of your Contract.

       
Faculty Retirement Equities Fund Prospectus 42

Taxes

The next dialogue relies on present
federal revenue tax legal guidelines and related rules issued by the Division of the Treasury. This part is for basic informational
functions solely, and it doesn’t cowl each state of affairs. It’s best to seek the advice of a certified tax skilled for recommendation earlier than executing
any transaction involving a contract.

In the course of the accumulation interval, premiums
paid in before-tax {dollars}, employer contributions and earnings attributable to those quantities aren’t taxed till they’re withdrawn.
Annuity funds, single-sum withdrawals, systematic withdrawals, and demise advantages are normally taxed as unusual revenue. When
withdrawn, premiums paid in after-tax {dollars} aren’t taxable, however earnings attributable to those quantities are taxable except these
quantities are contributed as Roth IRA contributions or Roth after-tax contributions to a 401(a), 403(b) or governmental 457(b) plan
and sure standards are met earlier than the quantities (and revenue on the quantities) are withdrawn. Demise advantages are normally additionally topic
to federal property and state property or inheritance taxation.

Typically, transfers between certified
retirement plans and between 403(b) plans aren’t taxed or handled as a rollover. Transfers among the many Accounts additionally aren’t taxed.

In the event you obtain a distribution from an IRA
for the needs of a rollover, just one rollover between IRAs is permitted in a 12-month interval. The 12-month restriction interval
applies to the combination of the entire taxpayer’s IRAs, successfully treating them as one IRA for functions of the restrict. Please
seek the advice of your certified tax advisor for extra info earlier than making any IRA rollover.

Typically, contributions you can also make beneath
an employer’s plan are restricted by federal tax legal guidelines. For 2021, worker voluntary wage discount contributions and
Roth after-tax contributions to 403(b) and 401(okay) plans are restricted, collectively, to $19,500 per 12 months ($26,000 per 12 months in case you
are age 50 or older). Sure long-term staff could possibly defer extra quantities in a 403(b) plan. 2021 contributions
to Conventional IRAs and Roth IRAs, apart from rollover contributions, can not usually exceed $6,000 per 12 months ($7,000 per 12 months
if you’re age 50 or older).

The utmost contribution restrict to a 457(b)
non-qualified deferred compensation plan for workers of state and native governments is the lesser of $19,500 ($26,000 in case you
are age 50 or older). Particular catch-up guidelines might allow the next contribution in a number of of the final three years previous to an
particular person’s regular retirement age beneath the plan.

Notice that the greenback quantities listed above
are for 2021; totally different greenback limits might apply in future years. For extra info in your particular most contribution restrict,
it is best to seek the advice of your certified tax advisor.

Early Distributions: If you’d like
to withdraw funds or start receiving revenue from any 401(a), 403(a) or 403(b) retirement plan or an IRA earlier than you attain age 59½,
you’ll have to pay a further 10% early distribution tax on the taxable quantity along with relevant federal and state
revenue taxes. On the whole, nevertheless, there is no such thing as a early distribution penalty on distributions from 401(a), 403(a) or 403(b) retirement
plans or an IRA (1) made on or after the taxpayer reaches age 59½; (2) made on or after the demise of the contract proprietor;
(3) attributable to the taxpayer’s turning into disabled; or (4) made as a part of a sequence of considerably equal periodic
funds for the life (or life expectancy) of the taxpayer. Different exceptions could also be relevant beneath sure circumstances and
particular guidelines could also be relevant in reference to the exceptions enumerated above.

Roth IRA distributions that don’t meet
the definition of a “certified distribution” beneath the Inside Income Code of 1986, as amended (the “Code”)
are includible in gross revenue, and could also be topic to the ten% early distribution tax. The principles regarding Roth IRA distributions
are advanced; it is best to seek the advice of along with your certified tax advisor for extra info.

Minimal Distribution Necessities: The
suspension of RMDs for outlined contribution plans and Conventional IRAs that was in impact throughout 2020, expired as of January 1,
2021.

Generally, for particular person staff
who flip age 70½ after December 31, 2019, funds from certified contracts should start by April 1 of the 12 months after the
12 months the worker reaches age 72, or retirement, if later. Different minimal distribution necessities apply to beneficiaries of deceased
individuals. For CREF Conventional IRAs, and with respect to five% or extra homeowners of the enterprise coated by a Keogh plan, particular person
staff who flip age 70½ after December 31, 2019, RMD funds should start by April 1 of the 12 months after they attain age
72.

Underneath the phrases of sure retirement plans,
the plan administrator might direct CREF to make the RMD required by regulation even when you don’t elect to obtain it. As well as, if
you don’t start RMDs on time, it’s possible you’ll be topic to a 50% excise tax on the quantity it is best to have obtained however didn’t. Roth
IRAs are usually not topic to RMD throughout your lifetime. You might be chargeable for requesting distributions that adjust to the
minimal distribution guidelines. Please seek the advice of your tax advisor for extra info.

With respect to the demise of a participant
or an IRA proprietor after December 31, 2019, most non-spouse beneficiaries will not be capable of fulfill the minimal distribution
necessities by “stretching” payouts over life. As an alternative of cost over their life expectancy, the final rule requires
full distribution to a person non-spouse beneficiary inside a 10-year interval after the 12 months of the participant’s demise.
Sure exceptions apply to “eligible designated beneficiaries,” which

       
Faculty Retirement Equities Fund Prospectus 43

embrace spouses, disabled and chronically ailing
people (or a belief for his or her profit), a minor baby of the participant till she or he reaches the age of majority; and anybody
else who’s older than or no more than 10 years youthful than the participant. This modification applies to distributions to designated
beneficiaries of people who die on and after January 1, 2020.

After, a primary beneficiary dies, the 10-year
distribution interval would usually apply to the beneficiary of the primary deceased beneficiary. The present regulation additionally applies to
One-Life, Two-Life and Mounted Interval annuities starting funds after December 19, 2019. For governmental plans, the above adjustments
within the regulation to designated beneficiary RMDs shall apply to distributions with respect to individuals who die after December 31,
2021, subsequently efficient January 1, 2022. As of January 2021, we proceed to attend on additional steering from the IRS and Treasury
on sure features of the brand new regulation. It’s best to seek the advice of a tax advisor earlier than deciding on an revenue choice or designating a beneficiary.

 

Penalty-free plan withdrawals

Hardship Distribution Guidelines. Present
rules chill out a number of prior 12 months restrictions on taking hardship distributions from outlined contribution plans. Exceptions
to the early withdrawal penalty guidelines embrace distributions made in instances of monetary hardship or unforeseeable emergencies. In contrast to
loans, hardship withdrawals completely cut back your account steadiness and aren’t repaid to the plan with curiosity. Present rules
eradicate the 6-month prohibition on contributions following a hardship distribution in addition to eliminating the requirement that
individuals take out there plan loans earlier than requesting hardship distributions. As well as, present rules enable hardship
withdrawals of earnings on 401(okay) contributions, though earnings on 403(b) contributions stay ineligible for hardship withdrawals.

Certified Delivery or Adoption Distribution.
Plan distributions (as much as $5,000) from an IRA, 401(a), 403(a), 403(b) or governmental eligible deferred compensation plan that
are used to pay for bills associated to the delivery or adoption of a kid are penalty-free. The distribution should be made throughout
the one-year interval starting on the date on which a toddler of the person is born or on which the authorized adoption is finalized.
The $5,000 quantity applies on a person foundation, so for a married couple, every partner might obtain a penalty-free distribution
as much as $5,000 for a certified delivery or adoption. Please seek the advice of your plan paperwork for eligibility.

Withholding on Distributions: If
CREF pays an “eligible rollover” distribution on to you, federal regulation requires CREF to withhold 20% from the taxable
portion. Alternatively, if CREF rolls over such a distribution on to an IRA or employer plan, CREF doesn’t withhold
any federal revenue tax. The 20% necessary withholding additionally doesn’t apply to sure sorts of distributions that aren’t thought of
eligible rollovers, corresponding to funds from IRAs, lifetime annuity funds or minimal distribution funds.

For the taxable portion of non-eligible
rollover distributions, CREF will normally withhold federal revenue taxes except you instruct CREF not to take action, and you might be eligible
to decide out of withholding. Nevertheless, in case you inform CREF to not withhold but it surely doesn’t have the suitable withholding election
certificates on file, then CREF continues to be required to withhold taxes on the distribution. These guidelines additionally apply to distributions
from governmental 457(b) plans. On the whole, all quantities obtained beneath a personal 457(b) plan are taxable and are topic to federal
revenue tax withholding as wages. Nonresident non-citizens of the US who pay U.S. taxes are topic to totally different withholding
guidelines.

Premium Taxes: Some states assess
premium taxes on the certified annuity contract premiums paid beneath the contract (e.g., IRA. 403(b), or 401(okay)). We’ll deduct
the whole quantity of premium taxes, if any, out of your accumulation based mostly on present state insurance coverage legal guidelines, topic to the provisions
of your contract, and our standing within the state. Typically, the place charged, the premium taxes vary from 0% to 1% on certified annuity
contract premiums relying on the state.

 

Particular guidelines for After-Tax Retirement Annuities

In the event you paid premiums on to an
RA and the premiums aren’t topic to your employer’s retirement plan, or in case you have been issued an ATRA contract, then
the next basic dialogue describes CREF’s understanding of present federal revenue tax regulation that applies to those accumulations.
This dialogue doesn’t apply to premiums paid in your behalf beneath the phrases of your employer’s retirement plan. It additionally
doesn’t cowl each state of affairs and doesn’t deal with all doable circumstances.

In Basic: These annuities are
usually not taxed till distributions happen. When distributions happen, they’re taxed as follows:

· Withdrawals, together with withdrawals of all the accumulation beneath the
contract, are usually taxed as unusual revenue to the extent that the contract’s worth is greater than your funding in
the contract (i.e., what you could have paid into it).
· Annuity funds are usually handled partly as taxable unusual revenue
and partly as non-taxable restoration of your funding within the contract till you get well all your funding within the contract.
After that, annuity funds are taxable in full as unusual revenue.
       
Faculty Retirement Equities Fund Prospectus 44

Required Distributions: On the whole,
in case you die after you begin your annuity funds however earlier than all the curiosity within the annuity contract has been distributed, the
remaining portion should be distributed a minimum of as rapidly as beneath the strategy in impact on the date of your demise. In the event you die earlier than
your annuity funds start, all the curiosity in your annuity contract usually should be distributed inside 5 years after
your demise, or be used to supply funds that start inside one 12 months of your demise and that will likely be made for the lifetime of
your designated beneficiary or for a interval not extending past the life expectancy of your designated beneficiary. CREF has issued
an endorsement to your contract that clarifies the wording in provisions regarding required distributions. The “designated
beneficiary” refers to a pure particular person you designate and to whom possession of the contract passes due to your demise.
Nevertheless, if the designated beneficiary is your surviving partner, your surviving partner can proceed the annuity contract because the
new proprietor.

Demise Profit Proceeds: Demise profit
proceeds are taxed like withdrawals of all the accumulation within the contract if distributed in a single sum and are taxed like
annuity funds if distributed as annuity funds. Your beneficiary could also be required to take demise profit proceeds inside a sure
time interval.

Penalty Tax on Sure Distributions:
You could have to pay a penalty tax (10% of the quantity handled as taxable revenue) on distributions you are taking previous to age 59½.
On the whole, nevertheless, there is no such thing as a penalty on distributions (1) made on or after the taxpayer reaches age 59½, (2) made on
or after the demise of the contract proprietor, (3) attributable to the taxpayer turning into disabled, or (4) made as a part of a sequence of
considerably equal periodic funds for the life (or life expectancy) of the taxpayer. Different exceptions could also be relevant beneath
sure circumstances and particular guidelines could also be relevant in reference to the exceptions enumerated above. It’s best to seek the advice of
a tax advisor for details about these exceptions.

Medicare Tax. Distributions from
after-tax contracts (corresponding to ATRA contracts) could also be thought of “funding revenue” for functions of the Medicare tax
on funding revenue. Thus, in sure circumstances, a 3.8% tax could also be utilized to some or the entire taxable portion of distributions
(i.e., earnings) to people whose revenue exceeds sure threshold quantities ($200,000 for
submitting single, $250,000 for married submitting collectively and $125,000 for married submitting individually.) Please seek the advice of a tax advisor for
extra info.

Withholding: Annuity distributions
are usually topic to federal revenue tax withholding however most recipients can normally elect to not have the tax withheld. Pointless
withholdings, delays in cost whereas we try and confirm info and different adversarial tax and monetary penalties might consequence
in case you or your beneficiary don’t present us with a sound Social Security quantity or different taxpayer identification quantity, or if
the taxpayer fails to correctly full and execute tax-related kinds and certifications required for us to course of distributions
and administer your contract.

Sure Designations or Exchanges: Designating
an annuitant, payee or different beneficiary, or exchanging a contract might have tax penalties that ought to be mentioned with a tax
advisor earlier than you interact in any of those transactions.

A number of Contracts: All non-qualified
deferred annuity contracts issued by CREF and sure of its associates to the identical proprietor throughout a calendar 12 months should usually
be handled as a single contract in figuring out when and the way a lot revenue is taxable and the way a lot revenue is topic to the ten% penalty
tax (see above).

Diversification Necessities: The
investments of every Account should be “adequately diversified” to ensure that the ATRA contracts to be handled as annuity
contracts for federal revenue tax functions. It’s meant that every Account (apart from the Inflation-Linked Bond Account) will
fulfill these diversification necessities. We imagine that the CREF Cash Market Account is exempt from in any other case relevant diversification
testing beneath the secure harbor for “authorities cash market funds,” as offered in IRS Discover 2016-32. There are restrictions
on the funding decisions of contracts within the Inflation-Linked Bond Account; see the dialogue beneath beneath “Tax penalties
of allocating to the CREF Inflation-Linked Bond Account beneath a CREF annuity for self-remitted non-qualified funds.”

Proprietor Management: In sure circumstances,
homeowners of non-qualified variable annuity contracts have been thought of for federal revenue tax functions to be the homeowners of the
property of the separate account supporting their contracts resulting from their means to train funding management over these property.
When that is the case, the contract homeowners have been at the moment taxed on revenue and good points attributable to the variable account property.
Whereas CREF believes that the ATRA contracts don’t provide you with funding management over property within the Accounts or another separate
account underlying your ATRA contract, CREF reserves the correct to change the ATRA contracts as mandatory to forestall you from being
handled as an proprietor of the property in an Account.

Premium Taxes: Some states, Puerto
Rico and the District of Columbia assess premium taxes on the non-qualified annuity contract premiums paid beneath the contract.
We’ll deduct the whole quantity of premium taxes, if any, out of your accumulation based mostly on present state insurance coverage legal guidelines, topic
to the provisions of your contract, and our standing within the state. Typically, the premium taxes vary from 0% to three.5% on non-qualified
annuity contract premiums relying on the state.

Please seek the advice of a certified tax advisor
for extra info in relationship to the info surrounding your private monetary state of affairs.

       
Faculty Retirement Equities Fund Prospectus 45

Federal property, reward and generation-skipping switch taxes

Whereas no try is being made to debate
the federal property tax implications of any contract, it is best to take into account that the worth of an annuity contract owned by a decedent
and payable to a beneficiary by advantage of surviving the decedent is included within the decedent’s gross property. Relying on
the phrases of the annuity contract, the worth of the annuity included within the gross property could be the worth of the lump-sum cost
payable to the designated beneficiary or the actuarial worth of the funds to be obtained by the beneficiary. Seek the advice of an property
planning advisor for extra info.

Underneath sure circumstances, the Code might
impose a generation-skipping (“GST”) tax when all or a part of an annuity contract is transferred to, or a demise profit
is paid to, a person two or extra generations youthful than the contract proprietor. Rules issued beneath the Code might require
us to deduct the tax out of your contract, or from any relevant cost, and pay it on to the IRS. For 2021, the federal
property tax, reward tax, and GST tax exemptions and most charges are $11.7 million and 40%, respectively. The potential software
of those taxes underscores the significance of in search of steering from a certified advisor to assist make sure that your property plan adequately
addresses your wants and people of your beneficiaries beneath all doable situations.

 

Particular guidelines for withdrawals to pay advisory charges

In case you have organized for us to pay advisory
charges to your monetary advisor out of your accumulations, these partial withdrawals usually is not going to be handled as taxable distributions
so long as:

· the cost is for bills which can be unusual and mandatory;
· the cost is created from a Part 401 or 403 retirement plan or an IRA;
· your monetary advisor’s cost is barely created from the accumulations
in your retirement plan or IRA, as relevant, and never straight by you or anybody else, beneath the settlement along with your monetary
advisor; and
· as soon as advisory charges start to be paid out of your retirement plan or IRA,
as relevant, you proceed to pay these charges solely out of your plan or IRA, as relevant, and never from another supply.

Nevertheless, withdrawals to pay advisory charges
to your monetary advisor out of your accumulations beneath an ATRA contract will likely be handled as taxable distributions. The IRS has
privately dominated that withdrawals to pay advisory charges beneath some insurers’ non-qualified contracts is not going to be handled as
taxable distributions. TIAA didn’t get hold of a ruling of this sort for the ATRA contract and the contract has not been modified to
put together for such a ruling request. It’s best to seek the advice of a certified tax advisor as as to if it’s possible you’ll exclude from revenue advisory
charges paid to your monetary advisor from ATRA contracts.

 

Residents of Puerto Rico

The IRS’s present place is that
revenue obtained by residents of Puerto Rico is U.S.-source revenue that’s usually topic to United States federal revenue tax.

 

Annuity purchases by nonresident non-citizens of the US
and overseas firms

The
dialogue above offers basic info relating to U.S. federal revenue tax penalties to annuity purchasers who’re U.S.
residents or residents. Purchasers who aren’t U.S. residents or residents will usually be topic to U.S. federal withholding
tax on taxable distributions from annuity contracts at a 30% price, except a decrease treaty price applies. As well as, purchasers
could also be topic to state and/or municipal taxes and taxes that could be imposed by the purchaser’s nation of citizenship or
residence. Potential purchasers are suggested to seek the advice of with a certified tax advisor relating to U.S., state and overseas taxation
with respect to an annuity contract buy
.

 

Overseas tax credit

CREF might profit from any overseas tax credit
attributable to taxes paid by sure funds to overseas jurisdictions to the extent permitted beneath federal tax regulation.

 

Tax penalties of allocating to the CREF Inflation-Linked Bond
Account beneath a CREF annuity for self-remitted non-qualified funds

In case you have a CREF contract which was set
up solely to obtain self-remitted non-qualified funds (i.e., cash that isn’t a part of a pension plan that you simply remit to CREF
straight) and also you allocate any such funds to the CREF Inflation-Linked Bond Account, then earnings, if any, in your complete accumulation
beneath the contract aren’t eligible for tax deferral. Subsequently, it’s possible you’ll be required to pay taxes on such earnings while you allocate
funds beneath the contract to the Inflation-Linked Bond Account.

       
Faculty Retirement Equities Fund Prospectus 46

Different tax penalties

Definition of Partner beneath Federal Legislation.
An individual who meets the definition of “partner” beneath federal regulation, might avail themselves to sure rights and advantages
beneath the contract. Any proper of a partner that’s made out there to proceed the contract and all contract provisions relating
to spouses and spousal continuation can be found solely to an individual who meets the definition of “partner” beneath federal
regulation. IRS steering offers that civil unions and home partnerships that could be acknowledged beneath state regulation aren’t marriages
except denominated as such. Seek the advice of a certified tax advisor for extra info on this topic.

Enacted Tax Laws. The COVID-Associated
Tax Aid Act of 2020, the Taxpayer Certainty and Catastrophe Tax Aid Act of 2020, and the No Surprises Act, all a part of the Consolidated
Appropriations Act, 2021 (“CAA”), had been all signed into regulation on December 27, 2020. The CAA comprises quite a few provisions
associated to retirement and well being plans to supply emergency help and well being care response for people, households and companies
affected by the coronavirus pandemic persevering with into 2021.

The CAA contains reduction beneath outlined contribution
plans (e.g. 401(a), 401(okay), 403(b) and governmental 457(b) plans) with respect to plan loans and withdrawals for sure non-coronavirus
associated pure disasters. Retirement plan reduction might apply when there’s a presidentially declared ‘certified catastrophe space’
between January 1, 2020 and February 25, 2021. Nevertheless, the time period ‘certified catastrophe space’ doesn’t embrace any space
with respect to which such a serious catastrophe has been so declared solely by cause of COVID-19. Subsequently the CAA’s retirement
plan reduction associated to certified catastrophe areas doesn’t apply to COVID-19 solely catastrophe areas. To make the most of the catastrophe
reduction offered beneath the CAA, a person should preserve a principal residence inside the catastrophe space and should have sustained
an financial loss as a result of catastrophe. The catastrophe reduction offered beneath the CAA applies to plans or annuity contracts that allow
the disaster-related reduction and consists of the next:

· Certified Catastrophe-Associated Distributions. Certified people
might take a certified catastrophe distribution from an eligible retirement plan account that doesn’t exceed $100,000 (much less quantities
beforehand taken for a similar certified catastrophe from plans maintained in the identical managed group) with out incurring an early-distribution
tax. If taken, a person might repay the distribution to a certified retirement plan or Particular person Retirement Account (IRA) inside
the three-year interval starting as of the date following the distribution date. Any quantity repaid on this interval is handled as
a tax-free rollover. If the distribution isn’t repaid, the person should pay tax on the distribution, however might unfold the
taxable revenue over a interval of three years.
· Recontribution of Hardship Withdrawals for Dwelling Purchases. Certified
people who requested a hardship withdrawal for the aim of buying or developing a major residence in a certified
catastrophe space, and who had been unable to make use of such hardship withdrawal resulting from such catastrophe, might recontribute the withdrawal beneath
the CAA if made inside a specified time period.
· Certified Catastrophe-Associated Mortgage Aid. For certified catastrophe
loans made to certified people, the restrict on the quantity of a plan certified catastrophe mortgage could also be elevated to the lesser of
(1) 100% (up from 50%) of the certified particular person’s plan account steadiness or (2) $100,000 (up from $50,000). As well as,
mortgage repayments scheduled throughout the catastrophe interval and as much as 180 days following the tip of the catastrophe interval could also be delayed
for one 12 months (or till June 24, 2021, if later).

On March 11, 2021, Congress enacted the
American Rescue Plan Act of 2021 (“American Rescue Plan”) to supply direct financial reduction–together with by way of
provisions that present tax reduction–for the financial system, public well being, people and companies and deal with the persevering with
affect of the 2020 COVID-19 pandemic. The American Rescue Plan contains quite a lot of tax provisions, however none that straight have an effect on
your contract. Please contact your tax advisor for additional particulars on how the American Rescue Plan might have an effect on different features of
your tax issues.

Please seek the advice of along with your tax advisor relating to
the 2021 due dates on your tax filings and the final date for making a 2020 IRA contribution.

Doable Tax Legislation Adjustments. There
is at all times the chance that the tax therapy of your contract might change by laws or in any other case. Nevertheless, the timing
and nature of legislative adjustments is unsure. Seek the advice of a tax advisor with respect to legislative developments and their impact
in your contract. We have now the correct to change the contract in response to legislative adjustments that would in any other case diminish the
favorable tax therapy that annuity contract homeowners at the moment obtain. We make no assure relating to the tax standing of any contract
and don’t intend the above dialogue as tax recommendation.

 

Extra Data

 

Partner’s Rights to Advantages

 

In case you are married, and all or a part of
your accumulation is attributable to contributions made beneath:

       
Faculty Retirement Equities Fund Prospectus 47

A)  an employer plan topic to ERISA; or
B) an employer plan that gives for spousal rights to advantages, then, solely to the extent required by the IRC or ERISA or the phrases of your employer plan, will your rights to decide on sure advantages be restricted by the rights of your partner to advantages as follows:
  · Partner’s survivor retirement profit. In case you are married in your annuity beginning date, your revenue profit should be paid beneath a two-life annuity along with your partner as second annuitant.
  · Partner’s survivor demise profit. In the event you die earlier than your annuity beginning date and your partner survives you, the cost of the demise profit to your named beneficiary could also be topic to your partner’s proper to obtain a demise profit. Underneath an employer plan topic to ERISA, your partner has the correct to a demise advantage of a minimum of 50% of any a part of your accumulation attributable to contributions made beneath such a plan. Underneath an employer plan not topic to ERISA, your partner might have the correct to a demise profit within the quantity stipulated within the plan.

Your partner might consent to a waiver of
his or her rights to those advantages.

 

Waiver of partner’s rights

 

In case you are married, and all or a part of
your accumulation is attributable to contributions made beneath:

A)  an employer plan topic to ERISA; or
B) an employer plan that gives for spousal rights to advantages, then, solely to the extent required by the IRC or ERISA or the phrases of your employer plan, your partner should consent to a waiver of his or her rights to survivor advantages earlier than you may select:
  · an revenue choice apart from a two-life annuity along with your partner as second annuitant; or
  · beneficiaries who aren’t your partner for greater than the proportion of the demise profit allowed by the employer plan; or
  · a lump-sum profit.

In an effort to waive the rights to spousal
survivor advantages, we should obtain, in a type passable to us, your partner’s consent, or a passable verification that
your partner can’t be positioned. A waiver of rights with respect to an revenue choice or a lump-sum profit should be made
in accordance with the IRC and ERISA, or the relevant provisions of your employer plan. A waiver of the survivor demise profit
might not be efficient whether it is made previous to the sooner of the plan 12 months through which you attain age 35 or your severance from employment
of your employer.

Verification of your marital standing might
be required, in a type passable to us, for functions of creating your partner’s rights to advantages or a waiver of those
rights. (For extra details about the definition of a “partner,” see “Taxes—Definition of Partner beneath
Federal Legislation.”) You could revoke a waiver of your partner’s rights to advantages at any time throughout your lifetime and earlier than
the annuity beginning date. Your partner might not revoke a consent to a waiver after the consent has been given.

 

Extra Data

 

Authorized Proceedings. Neither CREF, TCIM or Providers is concerned
in any authorized motion that we think about more likely to have a fabric adversarial impact on CREF, the power of CREF to fulfill its obligations
beneath the contracts, or the power of TCIM or Providers to carry out its contract with CREF.

 

Monetary Statements. CREF’s monetary statements
have been integrated by reference into this Prospectus and are included within the SAI.

 

Buyer Complaints: Buyer complaints
could also be directed to TIAA Buyer Care, P.O. Field 1259, Charlotte, NC 28201-1259, phone 800-842-2252.

Decisions and Adjustments: You could have
to make sure decisions or adjustments (e.g., altering your revenue choice, making a money withdrawal) by written discover in good order
passable to us and obtained at our residence workplace or at another location that has been particularly designated for that goal.
After we obtain a discover of a change in beneficiary or different particular person named to obtain funds, we are going to execute the change as of
the date it was signed, even when the signer has died within the meantime. We’ll execute all different adjustments as of the date obtained
in good order.

Phone and Web Transactions:
You should use TIAA’s Internet Heart’s account entry characteristic over the Web 24 hours a day to examine your account balances
and/or your present allocation percentages, switch between Accounts or to TIAA, and/or allocate future premiums among the many Accounts
and funds out there to you thru TIAA and CREF. The Internet Heart will lead you thru the transaction course of and can use cheap
procedures to verify that directions given are real. TIAA is not going to be chargeable for loss resulting from unauthorized or fraudulent
transactions if it follows such procedures. You should use TIAA’s Automated Phone Service (ATS) which is able to assist you to
examine your accumulation balances and listen to different private account updates 24 hours a day. All transactions made inside the Internet Heart
or the ATS are electronically recorded.

       
Faculty Retirement Equities Fund Prospectus 48

To make use of the ATS, it is advisable to name 800-842-2252
on a touch-tone cellphone. To make use of the Internet Heart’s account entry characteristic, entry the TIAA Web residence web page at www.tiaa.org.

TIAA can droop or terminate your means
to transact by phone, Web or by fax at any time for any cause. Additionally, phone, Web or fax transactions might not
at all times be out there, resulting from circumstances past our management.

Your Voting Rights: Typically, as
a participant in an Account, you may vote to elect CREF Trustees, on any change in funding goal and elementary funding
insurance policies and on another matter requiring a participant vote. You should have the correct to vote based mostly on the worth of accumulation
items credited to your account on the file date for the vote in query. With respect to issues that have an effect on solely a number of
specific class(es) of CREF, solely individuals holding items of such class(es) have the correct to vote on such issues.

Digital Prospectuses: In the event you
obtained this Prospectus electronically and would really like a paper copy, please name 877-518-9161 and one will likely be despatched to you free
of cost.

Assigning Your Contract: Typically,
neither you nor your beneficiaries can assign possession of a CREF contract to another person.

Errors or Omissions: We reserve
the correct to right any errors or omissions on any type, report or assertion that’s despatched to you.

GA (Group Annuity) Contracts: If
a GA contract is issued pursuant to your plan, the principles regarding transferring and withdrawing your cash, receiving any annuity
revenue or demise advantages and the timing of funds could also be totally different, and are decided by your plan. Contact your employer or
plan administrator for extra info.

Texas Non-obligatory Retirement Program Individuals:
In the event you’re within the Texas Non-obligatory Retirement Program, you (or your beneficiary) can redeem some or all your accumulation
provided that you retire, die or depart your job within the state’s public establishments of upper schooling.

Householding: To decrease bills
and eradicate duplicate paperwork despatched to your property, CREF will mail just one copy of this Prospectus and different required paperwork
to your family, even when a couple of participant lives there. In the event you would favor to proceed to obtain your individual copy of any
doc, write or name CREF at 877-518-9161.

       
Faculty Retirement Equities Fund Prospectus 49

Appendix: Extra Data Concerning the Accounts Out there Underneath
the Contract

 

Your funding choices

Overview of the Accounts

CREF has eight funding portfolios, or Accounts,
that are divided into a number of classes reflecting totally different funding administration methods. They are:

Fairness Accounts:

· World Equities Account

Index Account:

Mounted-Earnings Accounts:

· Inflation-Linked Bond Account

Specialty/Balanced Account:

Cash Market Account:

 

CREF’s purpose is to supply retirement advantages.
CREF has a long-term funding perspective and the Accounts present a variety of funding options. Every Account has its personal
funding goal, insurance policies and particular dangers. The funding goal of an Account can’t be modified with out the approval of a majority
of Account individuals. CREF can change funding insurance policies with out such approval. There is no such thing as a assure that any Account will meet its
funding goal.

Every of the Inventory, World Equities, Fairness Index,
Core Bond and Inflation-Linked Bond Accounts has a coverage of investing, beneath regular circumstances, a minimum of 80% of its respective property
(internet property, plus the quantity of any borrowings for funding functions) in sure securities implied by its title, together with such phrases
as “fairness” and “index.” Every of those Accounts will present its individuals with a minimum of 60 days’ prior
discover earlier than making adjustments to this coverage. The Accounts aren’t acceptable for market timing. You shouldn’t spend money on the Accounts
if you’re a market timer.

 

Fairness Accounts

Inventory Account

Funding Goal: A positive long-term
price of return by way of capital appreciation and funding revenue by investing primarily in a broadly diversified portfolio of frequent
shares.

Principal Funding Methods: Underneath
regular circumstances, the Inventory Account invests a minimum of 80% of its property in a broadly diversified portfolio of frequent shares. CREF’s
funding adviser, TIAA-CREF Funding Administration, LLC (“TCIM”), usually makes use of a mix of three totally different funding
methods to handle the Account—lively administration, quantitative and indexing—and invests in each home and overseas securities
to attain the Account’s funding goal. TCIM seeks to attain the Account’s total funding goal by managing
the Account in segments, every of which can use considered one of these totally different funding methods.

A portion of the Account is managed utilizing an lively
administration technique. With lively administration, TCIM appears for shares that it believes are attractively priced based mostly on an evaluation of the
firm’s prospects for progress in earnings, money movement, revenues or different related measures. TCIM additionally appears for corporations whose
property seem undervalued available in the market. On the whole, TCIM focuses on corporations with shareholder-oriented administration devoted to creating
shareholder worth. The Account might spend money on corporations of any measurement, together with small corporations.

A portion of the Account is managed utilizing a quantitative
technique. With quantitative methods, TCIM might use a number of totally different funding strategies to construct a portfolio of shares that’s structured
to resemble and share the danger traits of varied

       
Faculty Retirement Equities Fund Prospectus 50

segments of the benchmark index, whereas additionally in search of to outperform that
benchmark index. Quantitative methods usually make use of proprietary, quantitative modeling strategies for inventory choice, nation allocation
and portfolio development. Quantitative evaluation includes using mathematical fashions and laptop packages that try and outperform
the index by over- and underweighting sure shares within the index. Relative to TCIM’s different approaches for managing different fairness
accounts, typically, the quantitative methodology is designed in order that the Account diverges from and should outperform its benchmark index,
however stays nearer to the benchmark than different fairness accounts utilizing a standard lively administration type.

A portion of the Account is managed utilizing an index
technique. This portion of the Account is designed to trace numerous segments of the element indices of the Account’s composite
index. This portion of the Account buys most, however not essentially all, of the shares within the indices of its composite index, and can
try and carefully match the general funding traits of its composite index.

The Account invests in overseas shares and different
fairness securities. The Account additionally might spend money on fixed-income securities and cash market devices traded on overseas exchanges or
in different overseas securities markets, or which can be privately positioned. Overseas securities have differing kinds and ranges of danger than home
securities. The Account may even make investments a portion of its overseas investments in rising market securities and, to a lesser extent, overseas
developed market small-cap equities. Underneath regular circumstances, the Account seeks to take care of the weightings of its holdings as roughly
60%–70% home equities and 30%–40% overseas equities. Underneath regular circumstances, the overseas equities portion of the Account
will embrace investments in each developed and rising market securities and in securities of large-, mid- and small-capitalization issuers.
As of December 31, 2020, the market worth of the Account was divided as indicated beneath amongst U.S., overseas developed and overseas
rising market securities:

 

 

 

For a dialogue of extra dangers regarding
investments in overseas securities, see “Extra details about funding methods and dangers” beneath.

Throughout the Account’s globally diversified,
multi-investment type technique, the Account allocates property to quite a lot of underlying funding methods. The allocations to such
methods, together with home or overseas investments in mega-cap, large-cap, mid-cap and small-cap and numerous {industry} sector specializations,
might change over time. As of December 31, 2020, the fairness investments of the Account had been divided amongst issuers with various market capitalizations
as indicated beneath:

 

 

See “Extra about benchmarks and different indices”
beneath for details about the Inventory Account Composite Index.

Principal Funding Dangers: The Account
is topic to the next principal funding dangers:

· issuer danger (usually referred to as monetary danger);
· overseas funding danger;
· lively administration danger;
· quantitative evaluation danger;

Investing in securities traded on overseas exchanges
or in overseas markets includes dangers past these of home investing. These embrace political or social instability, adjustments in forex
charges and the doable imposition of market controls or forex alternate controls. These dangers could also be enhanced with respect to investments
in rising markets. Additionally, in search of enhanced

       
Faculty Retirement Equities Fund Prospectus 51

outcomes relative to an index might trigger that portion of the Account that
is managed utilizing a quantitative technique to underperform the index. Moreover, due to the Account’s measurement, it might be shopping for
or promoting blocks of inventory which can be giant in comparison with the inventory’s buying and selling quantity, making it tough to succeed in the positions referred to as
for by TCIM’s funding selections and/or affecting the inventory’s worth. Consequently, TCIM might not be capable of modify the portfolio
as rapidly as it might like.

As with all funding, you may lose cash by
investing on this Account.

Who Might Need to Make investments: The Inventory Account
could also be finest for people who’ve an extended time horizon, assume shares will carry out properly over time and need to spend money on a broadly diversified
inventory portfolio.

See “Principal dangers of investing within the
Accounts” beneath and “Extra details about funding methods and dangers” beneath for extra info.

 

World Equities Account

Funding Goal: A positive long-term
price of return by way of capital appreciation and revenue from a broadly diversified portfolio that consists primarily of overseas and home
frequent shares.

Principal Funding Methods: Underneath
regular circumstances, the World Equities Account invests a minimum of 80% of its property in fairness securities of overseas and home corporations.
Sometimes, roughly 50% of the Account is invested in overseas securities (together with overseas rising market issuers), and roughly
50% in home securities, as TCIM deems acceptable. Nevertheless, when market circumstances warrant, the Account might make investments greater than 60% of
its property in U.S. issuers. In such instances the Account will make investments a minimum of 30% in overseas issuers. These percentages might range in accordance
to market circumstances. As of December 31, 2020 (previous to a rise within the Account’s allocation to overseas securities), the portfolio
of investments of the Account was divided as indicated beneath amongst U.S., overseas developed market and overseas rising market securities:

 

 

 

Usually, the Account will likely be invested in a minimum of three totally different nations,
considered one of which will likely be the US, though the Account will normally be extra diversified. For a dialogue of extra dangers
regarding investments in overseas securities, together with rising market securities, see “Extra details about funding
methods and dangers” beneath.

The Account can spend money on corporations of any measurement,
together with small corporations. Investing in smaller corporations entails extra danger. See “Principal funding dangers” for the Account
beneath.

TCIM usually makes use of a mix of three totally different
funding methods to handle the Account—lively administration, quantitative and indexing—and invests in each home and
overseas securities. TCIM seeks to attain the Account’s total funding goal by managing the Account in segments, every of
which can use considered one of these totally different funding methods to attain the Account’s funding goal. For that portion of the
Account that’s actively managed, TCIM appears for shares that it believes are attractively priced based mostly on an evaluation of the corporate’s
prospects for progress in earnings, money movement, revenues or different related measures. TCIM additionally appears for corporations whose property seem undervalued
available in the market. On the whole, TCIM focuses on corporations with shareholder-oriented administration devoted to creating shareholder worth.

A portion of the Account is managed utilizing a quantitative
technique. With quantitative methods, TCIM might use a number of totally different funding strategies to construct a portfolio that’s structured to
resemble and share the danger traits of varied segments of the benchmark index, whereas additionally in search of to outperform that benchmark
index. Quantitative methods usually make use of proprietary, quantitative modeling strategies for inventory choice, nation allocation and
portfolio development. Quantitative evaluation includes using mathematical fashions and laptop packages that try and outperform
the index by over- and underweighting sure shares within the index. Relative to TCIM’s different approaches for managing different fairness
accounts, typically, the quantitative methodology is designed in order that the Account diverges from and should outperform its benchmark index,
however stays nearer to the benchmark than different fairness accounts utilizing a standard lively administration type.

A portion of the Account is managed utilizing an index
technique. This portion of the Account is designed to trace numerous segments of the Account’s benchmark index. This portion of the
Account buys most, however not essentially all, of the securities within the Account’s benchmark index, and can try and carefully
match the general funding traits of its benchmark index.

Throughout the Account’s globally diversified,
multi-investment type technique, the Account allocates property to quite a lot of underlying funding methods. The allocations to such
methods, together with home or overseas investments in large-cap, mid-cap and small-cap and numerous {industry} sector specializations,
might change over time.

The benchmark for the World Equities Account
is the MSCI All Nation World Index. See “Extra about benchmarks and different indices” beneath for extra details about
benchmarks.

Principal Funding Dangers: The Account
is topic to the next principal funding dangers:

       
Faculty Retirement Equities Fund Prospectus 52

· issuer danger (usually referred to as monetary danger);
· overseas funding danger;
· lively administration danger;
· quantitative evaluation danger;

Investing in securities traded on overseas exchanges
or in overseas markets includes dangers past these of home investing. These embrace political or social instability, adjustments in forex
charges and the doable imposition of market controls or forex alternate controls. These dangers could also be enhanced with respect to investments
in rising markets. Additionally, in search of enhanced outcomes relative to an index might trigger that portion of the Account that’s managed utilizing a
quantitative technique to underperform the index. The Account might also be topic to market timing danger resulting from “stale worth arbitrage,”
through which an investor seeks to make the most of the perceived distinction in worth from a overseas market closing worth. If not mitigated
by way of efficient insurance policies, market timing can intrude with environment friendly portfolio administration and trigger dilution. The Account has in place
insurance policies and procedures which can be designed to scale back the danger of market timing within the Account.

As with all funding, you may lose cash by
investing on this Account.

Who Might Need to Make investments: The World Equities
Account could also be finest for people who’ve an extended time horizon, assume shares will carry out properly over time and need to take benefit
of the potential of overseas in addition to home markets.

See “Principal dangers of investing within the
Accounts” beneath and “Extra details about funding methods and dangers” beneath for extra info.

 

Development Account

Funding Goal: A positive long-term
price of return, primarily by way of capital appreciation, primarily from a diversified portfolio of frequent shares that current the chance
for distinctive progress.

Principal Funding Methods: Underneath
regular circumstances, the Development Account invests a minimum of 80% of its property in frequent shares and different fairness securities. The Account
invests primarily in giant, well-known, established corporations, significantly when TCIM believes they’ve new or modern merchandise, companies
or processes that improve future earnings prospects. To a lesser extent, the Account might also spend money on smaller, much less seasoned corporations
with progress potential in addition to corporations in new and rising areas of the financial system. The Account might also spend money on corporations so as
to profit from potential acquisitions, reorganizations, company restructurings or different particular conditions.

Development-oriented corporations are corporations with a
robust aggressive place inside their {industry} or a aggressive place inside a really robust {industry}. Typically, progress investing
entails analyzing the standard of an organization’s earnings (i.e., the diploma to which earnings are derived from sustainable sources),
and analyzing corporations as if one can be shopping for the underlying enterprise, not merely buying and selling its fairness. Development investing additionally includes
elementary analysis and qualitative evaluation of specific corporations to be able to determine and profit from specific corporations whose
enterprise prospects seem underappreciated by the market.

The Account might purchase overseas securities and different
devices if TCIM believes they’ve superior funding potential. Relying on funding alternatives, the Account might make investments up
to twenty% of its property in overseas securities. The securities will likely be these traded on overseas exchanges or in different overseas markets and should
be denominated in foreign currency echange or different items.

TCIM usually makes use of a mix of three totally different
funding methods to handle the Account—lively administration, quantitative and indexing—and invests in each home and
overseas securities. TCIM seeks to attain the Account’s total funding goal by managing the Account in segments, every of
which can use considered one of these totally different funding methods. For that portion of the Account that’s actively managed, TCIM appears for shares
that it believes are attractively priced based mostly on an evaluation of the corporate’s prospects for progress in earnings, money movement, revenues
or different related measures. TCIM additionally appears for corporations whose property seem undervalued available in the market. On the whole, TCIM focuses on corporations
with shareholder-oriented administration devoted to creating shareholder worth.

A portion of the Account is managed utilizing a quantitative
technique. With quantitative methods, TCIM might use a number of totally different funding strategies to construct a portfolio of shares that’s structured
to resemble and share the danger traits of varied segments of the benchmark index, whereas additionally in search of to outperform that benchmark
index. Quantitative methods usually make use of proprietary, quantitative modeling strategies for inventory choice, nation allocation and
portfolio development. Quantitative evaluation includes using mathematical fashions and laptop packages that try and outperform
the index by over- and underweighting sure shares within the index. Relative to TCIM’s different approaches for managing different fairness
accounts, typically,

       
Faculty Retirement Equities Fund Prospectus 53

the quantitative methodology is designed in order that the Account diverges
from and should outperform its benchmark index, however stays nearer to the benchmark than different fairness accounts utilizing a standard lively
administration type.

A portion of the Account is managed utilizing an index
technique. This portion of the Account is designed to trace numerous segments of the Account’s benchmark index. This portion of the
Account buys most, however not essentially all, of the securities in its benchmark index, and can try and carefully match the general
funding traits of its benchmark index.

The benchmark for the Development Account is
the Russell 1000® Development Index. See “Extra about benchmarks and different indices” beneath for extra
details about benchmarks.

Principal Funding Dangers: The Account
is topic to the next principal funding dangers:

· issuer danger (usually referred to as monetary danger);
· overseas funding danger;
· type danger/the dangers of progress investing;
· lively administration danger;
· quantitative evaluation danger;

Additionally, shares of corporations concerned in reorganizations
and different particular conditions can usually contain extra danger than unusual securities. The Account will most likely be extra unstable than the
total fairness market resulting from its give attention to extra growth-oriented sectors of the market.

As with all funding, you may lose cash by
investing on this Account.

Who Might Need to Make investments: The Development Account
could also be finest for people who’re in search of long-term capital appreciation and a positive long-term return however are prepared to tolerate
fluctuations in worth. It could even be properly suited to traders in search of publicity to growth-oriented corporations who even have publicity to
different segments of the inventory market, together with selective publicity to value-oriented corporations.

See “Principal dangers of investing within the
Accounts” beneath and “Extra details about funding methods and dangers” beneath for extra info.

 

Index Account

Fairness Index Account

Funding Goal: A positive long-term
price of return from a diversified portfolio chosen to trace the general marketplace for frequent shares publicly traded in the US,
as represented by a broad inventory market index.

Principal Funding Methods:
The Fairness Index Account is designed to trace the U.S. inventory market as a complete and invests in shares in its benchmark index, the
Russell 3000® Index. The Account buys most, however not essentially all, of the securities within the Russell 3000®
Index, and makes an attempt to carefully match the general funding traits of the Index. Utilizing the Russell 3000®
Index isn’t elementary to the Account’s funding goal and insurance policies. The Account can change the index at any
time and can notify its individuals if it does so. See “Extra about benchmarks and different indices” beneath for extra
details about benchmarks.

The Account might also spend money on securities
and different devices, corresponding to futures, whose return relies on inventory market costs. TCIM selects these devices to try
to match the whole return of the Russell 3000® Index however might not at all times achieve this.

The Account is assessed as a diversified
funding firm, as outlined beneath the 1940 Act. Nevertheless, the Account might develop into non-diversified beneath the 1940 Act with out
the approval of Account individuals solely because of a change in relative market capitalization or index weighting of 1
or extra constituents of its benchmark index, the Russell 3000® Index, which the Account seeks to trace.

Principal Funding Dangers: The Account
is topic to the next principal funding dangers:

· issuer danger (usually referred to as monetary danger);
       
Faculty Retirement Equities Fund Prospectus 54

· non-diversification danger.

As with all funding, you may lose cash by
investing on this Account.

Who Might Need to Make investments: The Fairness Index
Account could also be finest for people who’ve an extended time horizon, assume U.S. shares will carry out properly over time and need to spend money on
a broad vary of securities within the U.S. market.

See “Principal dangers of investing within the
Accounts” beneath and “Extra details about funding methods and dangers” beneath for extra info.

 

Mounted-Earnings Accounts

Core Bond Account

Funding Goal: A positive long-term
price of return, primarily by way of excessive present revenue according to preserving capital.

Principal Funding Methods: Underneath
regular circumstances, the Core Bond Account invests a minimum of 80% of its property in a broad vary of fixed-income securities. The bulk
of the Account’s property are invested in U.S. Treasury and different governmental company securities, company bonds and mortgage-backed
or different asset-backed securities. The Account’s holdings are primarily investment-grade securities rated within the high 4 credit standing
classes by Moody’s Traders Service, Inc. (“Moody’s”) or Customary & Poor’s (“S&P”),
or that TCIM determines are of comparable high quality. Mounted-income securities might pay a hard and fast or variable price of curiosity.

The Account will chubby or underweight particular person
securities or sectors as in comparison with their weight within the Bloomberg U.S. Combination Bond Index (the “Bloomberg Index”), the
Core Bond Account’s benchmark index, relying on the place TCIM finds undervalued, neglected or misunderstood points that TCIM believes
supply the potential for superior returns in comparison with the Bloomberg Index. See “Extra about benchmarks and different indices” beneath
for extra details about benchmarks.

The Account can even spend money on below-investment-grade
securities (also called “excessive yield” or “junk” bonds) rated Ba1 or decrease by Moody’s or BB+ or decrease by
S&P, in addition to unrated securities that TCIM determines to be of the same high quality. Nevertheless, TCIM doesn’t intend to take a position greater than
20% of the Account’s property in such securities. The Account can even make overseas investments, together with rising market fixed-income
securities and non-dollar-denominated devices, however such investments aren’t anticipated to exceed 20% of the Account’s property.

The Account can even spend money on mortgage-backed
securities. These can embrace pass-through securities bought by non-public, governmental and government-related organizations, and collateralized
mortgage obligations (“CMOs”). Mortgage pass-through securities are shaped when mortgages are pooled collectively and pursuits
within the pool are bought to traders. The money movement from the underlying mortgages is “handed by way of” to traders in periodic
principal and curiosity funds. CMOs are obligations absolutely collateralized straight or not directly by a pool of mortgages on which funds
of principal and curiosity are devoted to cost of principal and curiosity.

The Account might make sure different investments,
however not as principal funding methods. For instance, the Account might spend money on interest-only and principal-only mortgage-backed securities.
These devices have distinctive traits and are extra delicate to prepayment and extension dangers than conventional mortgage-backed
securities.

TCIM might also use an funding technique referred to as
“mortgage rolls” (additionally known as “greenback rolls”), through which the Account “rolls over” an funding
in a mortgage-backed security earlier than its settlement date in alternate for the same security with a later settlement date. The Account
might also interact in duration-neutral relative worth buying and selling, a method through which the Account buys and sells authorities bonds of an identical
credit score high quality however totally different maturity dates in an try and make the most of unfold differentials alongside the yield curve.

TCIM seeks the Account’s funding goal
by way of lively administration of security choice, sector allocation, yield-curve positioning, and period administration. Whereas the Account
seeks to protect capital as a part of its funding goal, this is just one think about an actively managed method of in search of a positive
long-term price of return. Accordingly, there might be no assurance that the Account will achieve preserving capital, and the Account
might lose cash due to the dangers of funding in bonds and different eligible property, together with rate of interest danger, credit score danger, and different
dangers famous beneath.

The Account might buy and promote futures, choices,
swaps, forwards and different fixed-income by-product devices to hold out the Account’s funding methods. Specifically, the
Account might buy and promote rate of interest futures to try to handle period and/or sure dangers.

Principal Funding Dangers: The Account
is topic to the next principal funding dangers:

· issuer danger (usually referred to as monetary danger);
       
Faculty Retirement Equities Fund Prospectus 55

· revenue volatility danger;
· fixed-income overseas funding danger;
· lively administration danger;
· market volatility, liquidity and valuation danger;
· non-investment-grade securities danger;
· U.S. authorities securities danger;
· illiquid investments danger;
· rising markets danger; and
· portfolio turnover danger.

Rate of interest danger is the danger that costs of
portfolio securities held by the Account might decline if rates of interest rise. For instance, if rates of interest rise by 1%, the market worth
of a portfolio with a period of 5 years will decline by roughly 5%.

As well as, below-investment-grade securities,
that are normally referred to as “high-yield” or “junk” bonds, supply the potential for larger returns but in addition entail
larger dangers. Issuers of below-investment-grade securities could also be in weak monetary well being, their means to pay curiosity and principal
is unsure and so they have the next danger of turning into bancrupt. Small adjustments within the issuer’s creditworthiness can have extra affect
on the worth of lower-rated bonds than would comparable adjustments for investment-grade bonds. Decrease-rated bonds will also be tougher to worth
and promote and their costs might be extra unstable than the costs of higher-quality securities. Excessive-yield bond markets might react strongly
to adversarial information about an issuer or the financial system, or to the notion or expectation of adversarial information.

Keep in mind that each one these dangers can even apply
to the decrease ranges of “investment-grade” securities, for instance, Moody’s Baa and S&P’s BBB. Additionally, securities
initially rated “investment-grade” are typically downgraded later, ought to a scores service imagine the issuer’s enterprise
outlook or creditworthiness has deteriorated. If that occurs to a security within the Account, it might or might not be bought, relying on an
evaluation by TCIM of the issuer’s prospects. Nevertheless, the Account is not going to buy below-investment-grade securities if that will
enhance their quantity within the portfolio above the Account’s present funding goal. The Account doesn’t rely solely on credit score
scores when making funding selections as a result of such scores might not alone be an correct measure of the danger of lower-rated bonds. As an alternative,
TCIM additionally does its personal credit score evaluation, and pays specific consideration to financial tendencies and different market occasions.

The Account can maintain illiquid investments. The
danger of investing in illiquid investments is that they could be tough to promote for the worth at which they’re carried, if in any respect, or
at any worth inside the desired timeframe.

The Account’s investments in mortgage-backed
securities are topic to prepayment or extension danger. That is the chance {that a} change in rates of interest would trigger the underlying
mortgages to be paid off in the end than anticipated.

As with all funding, you may lose cash by
investing on this Account.

Who Might Need to Make investments: The Core Bond Account
could also be finest for people who’ve an extended time horizon, assume bonds will do properly over time and/or need to diversify different holdings
invested in shares.

See “Principal dangers of investing within the
Accounts” beneath and “Extra details about funding methods and dangers” beneath for extra info.

 

Inflation-Linked Bond Account

Funding Goal: An extended-term price
of return that outpaces inflation, primarily by way of funding in inflation-indexed bonds—fixed-income securities whose returns
are designed to trace a specified inflation index over the lifetime of the bond.

Principal Funding Methods: Underneath
regular circumstances, the Inflation-Linked Bond Account invests a minimum of 80% of its property in U.S. Treasury Inflation-Listed Securities
(TIIS). The Account can even spend money on different inflation-indexed bonds issued or assured by the U.S. authorities or its companies, by firms
and different U.S. domiciled issuers in addition to overseas governments. It could additionally spend money on cash market devices or different short-term securities.

Like standard bonds, inflation-indexed bonds
usually pay curiosity at mounted intervals and return the principal at maturity. In contrast to standard bonds, an inflation-indexed bond’s
principal is adjusted periodically to replicate adjustments in a specified inflation index. Inflation-indexed bonds are designed to protect
buying energy over the lifetime of the bond whereas paying a “actual” price of

       
Faculty Retirement Equities Fund Prospectus 56

curiosity (i.e., a return over and above the inflation price).
These bonds are usually issued at a hard and fast rate of interest that’s decrease than that of standard bonds of comparable maturity and high quality,
however they’re anticipated to retain their worth in opposition to inflation over time.

The principal quantity of a TIIS bond is adjusted
periodically for inflation utilizing the Shopper Worth Index for All City Shoppers (“CPI-U”). Curiosity is paid twice a 12 months.
The rate of interest is mounted, however the quantity of every curiosity cost varies because the principal is adjusted for inflation.

The principal quantity of a TIIS funding can
go down in occasions of destructive inflation. Nevertheless, the U.S. Treasury ensures that the ultimate principal cost at maturity is not going to be
lower than the unique principal quantity of the bond.

The curiosity and principal parts of the bonds
could also be “stripped” or bought individually. The Account should buy or promote both element.

The Account can even spend money on inflation-indexed
bonds issued or assured by overseas governments and their companies, in addition to different overseas issuers. These investments are normally
designed to trace the inflation price within the issuing nation. Underneath most circumstances, TCIM doesn’t anticipate the Account’s investments
in inflation-linked bonds of overseas issuers will likely be greater than 25% of its property, though this stage might change.

The Account can even maintain the identical type of fixed-income
securities because the Core Bond Account. These securities will normally be investment-grade. Nevertheless, the Account can make investments as much as 5% of its
property in fixed-income devices which can be rated beneath investment-grade, or in unrated securities of comparable high quality.

The Account might buy and promote futures, choices,
swaps, forwards and different fixed-income by-product devices to hold out the Account’s funding methods. Specifically, the
Account might buy and promote rate of interest futures to try to handle period and/or sure dangers.

Principal Funding Dangers: The Account
is topic to the next principal funding dangers:

· revenue volatility danger;
· fixed-income overseas funding danger;
· lively administration danger;
· market volatility, liquidity and valuation danger;
· illiquid investments danger;
· particular dangers regarding inflation-indexed bonds; and
· U.S. authorities securities danger.

As well as, as a result of the investments within the Account
are “marked-to-market” day by day and since market values will fluctuate, the Account might lose cash on its investments. As
a consequence, its complete return might not really monitor the chosen inflation index yearly.

The benchmark for the Inflation-Linked Bond Account
is the Bloomberg U.S. Treasury Inflation Protected Securities (TIPS) 1–10 12 months Index. See “Extra about benchmarks and different
indices” beneath for extra info on benchmarks.

Market values of inflation-indexed bonds might be
affected by adjustments available in the market’s inflation expectations or adjustments in actual charges of curiosity.

Additionally, the CPI-U might not precisely replicate the
true price of inflation. If the market perceives that the index utilized by TIIS doesn’t precisely replicate inflation, the market worth of
these bonds could possibly be adversely affected. As well as, individuals who select to obtain annuity revenue by way of this Account ought to be
conscious that their revenue may not hold tempo with inflation, particularly if the common said rate of interest on the Account’s inflation-indexed
bonds is beneath roughly 4%.

As with all funding, you may lose cash by
investing on this Account.

Who Might Need to Make investments: The Inflation-Linked
Bond Account could also be finest for people who’re particularly involved about excessive inflation, search a modest “actual” price of return
(i.e., better than the inflation price) and/or need to diversify holdings in shares, standard bonds and different investments.

See “Principal dangers of investing within the
Accounts” beneath and “Extra details about funding methods and dangers” beneath for extra info.

       
Faculty Retirement Equities Fund Prospectus 57

Specialty/Balanced Account

Social Alternative Account

Funding Goal: A positive
long-term price of return that displays the funding efficiency of the monetary markets whereas giving particular consideration to
sure social standards.

Principal Funding Methods:
The Social Alternative Account invests in a diversified set of home and overseas shares and different fairness securities, bonds and different
fixed-income securities, in addition to cash market devices and different short-term debt devices. The Account seeks to take a position
in issuers which can be appropriate from a monetary perspective and whose actions are according to sure environmental, social
and governance (“ESG”) or Influence standards, that are described in additional element beneath.

The Account is balanced, with property divided
between overseas and home shares and different fairness securities (about 60%) and bonds and different fixed-income securities, together with
cash market devices (about 40%). Underneath regular circumstances, the fairness portion of the Account is split between a usually
bigger home and a smaller overseas portion. Underneath regular circumstances, the fixed-income portion of the Account is split
between a usually bigger home and a smaller overseas portion. As of December 31, 2020, the Account was invested in its numerous
market segments as follows: home fairness 41.84%; overseas fairness 18.19%; home fixed-income 31.11%; and overseas fixed-income
8.26%.

When TCIM believes that market circumstances
or transaction wants make it acceptable, the fairness portion of the Account can go as excessive as 70% or as little as 50% by way of
changes to both or each of the home and overseas fairness parts, with corresponding adjustments to the fixed-income
portion. Any of these percentages might be modified even additional if TCIM believes it might be acceptable.

The fairness portion of the Account contains
each a home and a overseas equities portion. The home fairness portion makes an attempt to trace the return of the U.S. inventory
market as represented by the Russell 3000® Index. The overseas fairness portion of the Account makes an attempt to trace the
return of developed overseas markets as represented by the MSCI EAFE + Canada Index. TCIM might make the most of quantitative and/or different
funding methods to facilitate the administration of the general Account.

See “Extra about benchmarks and different
indices” beneath for details about the Social Alternative Account Composite Index.

The ESG and Influence standards the Account
takes into consideration are non-fundamental funding insurance policies. Such standards and the universe of investments that the Account
makes use of could also be modified with out the approval of the Account’s individuals. Whereas TCIM might spend money on issuers that meet these
standards, it isn’t required to spend money on each issuer that meets these standards. As well as, considerations with respect to at least one ESG
evaluation class might not mechanically eradicate an issuer from being thought of an eligible Account funding.

Holdings within the fairness portion of the
Account are topic to sure ESG standards. The ESG standards are usually applied based mostly on information offered by impartial ESG
analysis vendor(s). All the Account’s fairness investments should meet or exceed minimal ESG efficiency requirements to be eligible
for inclusion within the Account. The analysis course of favors corporations with management in ESG efficiency relative to their friends.
Sometimes, environmental evaluation classes embrace local weather change, pure useful resource use, waste administration and environmental
alternatives. Social analysis classes embrace human capital, product security and social alternatives. Governance evaluation
classes embrace company governance, enterprise ethics and governance and public coverage. How properly corporations adhere to worldwide
norms and rules and involvement in main ESG controversies (examples of which can relate to the setting, prospects, human
rights and neighborhood, labor rights and provide chain and governance) are different issues.

The ESG analysis course of for the fairness
portion of the Account is carried out on an industry-specific foundation and includes the identification of key efficiency indicators,
that are given extra relative weight in comparison with the broader vary of potential evaluation classes. When ESG considerations exist,
the analysis course of offers cautious consideration to how corporations deal with the danger and alternatives they face within the context
of their {industry} and relative to their friends. The Account is not going to usually spend money on corporations considerably concerned in sure
enterprise actions, together with, however not restricted to, the manufacturing of alcohol, tobacco, army weapons, firearms, nuclear energy,
thermal coal and playing services and products.

As soon as a universe of ESG-eligible fairness
investments is established, TCIM then makes use of quantitative funding strategies to try to carefully match, to the extent practicable,
the general danger traits of the fairness portion of the Account’s composite benchmark index. Underneath these quantitative
funding strategies, the Account makes use of a danger mannequin to judge the universe of shares through which the fairness portion of the Account
might make investments and to tell the development of a broadly diversified group of shares. The Account’s fairness holdings will usually
encompass a subset of the eligible funding universe. The Account isn’t required to spend money on all corporations that meet the ESG
standards.

The fixed-income portion of the Account
invests in a broad vary of fixed-income devices. Nearly all of this portion of the Account is invested in U.S. Treasury
and different governmental company securities, company bonds and mortgage-backed and different asset-backed securities. This portion’s
holdings consist primarily of investment-grade securities rated within the high 4 credit standing classes by Moody’s or S&P,
or that TCIM determines are of comparable high quality. As much as 5% of this portion might also be

       
Faculty Retirement Equities Fund Prospectus 58

invested in below-investment-grade (“high-yield”)
securities rated Ba1 or decrease by Moody’s or BB+ or decrease by S&P, in addition to unrated securities that TCIM determines to
be of the same high quality. Moreover, this portion of the Account could also be invested in overseas investments, together with rising market
fixed-income securities and non-dollar-denominated devices. Account investments in fixed-income securities issued by company
entities or sure overseas governments are additionally topic to the ESG standards mentioned beforehand.

Holdings within the fixed-income portion of
the Account are additionally topic to sure ESG or Influence standards. In these restricted instances the place impartial ESG standards aren’t out there
for sure sorts of securities or for sure issuers, these securities might nonetheless be eligible for the fixed-income portion
of the Account ought to they meet sure ESG standards established by TCIM. All issuers not in any other case assembly the Influence framework
described beneath should meet or exceed minimal ESG efficiency requirements to be eligible for funding by the fixed-income portion
of the Account.

The ESG standards described above for the
fairness portion of the Account additionally apply to company issuers within the fixed-income portion of the Account. With respect to authorities
issuers, the ESG analysis course of utilized by the fixed-income portion of the Account favors issuers with management in ESG efficiency
relative to all friends. For presidency issuers, usually, environmental evaluation classes embrace the issuer’s means
to guard, harness and complement its pure assets, and to handle environmental vulnerabilities and externalities. Social
evaluation classes embrace the issuer’s means to develop a wholesome, productive and steady workforce and data capital,
and to create a supportive financial setting. Governance evaluation classes embrace the issuer’s institutional capability
to help long-term stability and well-functioning monetary, judicial and political methods, and capability to handle environmental
and social dangers. The federal government ESG analysis course of is carried out on a worldwide foundation and displays how an issuer’s publicity
to and administration of ESG danger issue might have an effect on the long-term sustainability of its financial system.

Moreover, TCIM invests among the
fixed-income portion of the Account in accordance with TIAA’s proprietary Influence framework. These investments present direct
publicity to issuers and/or particular person initiatives with social or environmental advantages. As of December 31, 2020, 42.3% of the Account
was invested in Influence investments. Inside this Influence allocation, the Account seeks alternatives to spend money on publicly traded
fixed-income securities that finance initiatives in areas together with inexpensive housing, neighborhood and financial improvement, renewable
vitality and local weather change and pure assets. These investments are chosen based mostly on the identical monetary standards utilized by TCIM
in deciding on the Account’s different fixed-income investments. The portion of the Account invested in accordance with TIAA’s
proprietary Influence framework isn’t moreover topic to the ESG standards offered by a 3rd get together vendor.

As famous above, the fixed-income portion
of the Account might spend money on sure asset-backed securities, mortgage-backed securities and different securities that characterize pursuits
in property corresponding to swimming pools of mortgage loans, vehicle loans or bank card receivables. These securities are usually issued by
authorized entities established particularly to carry property and to situation debt obligations backed by these property. Asset-backed or mortgage-backed
securities are usually created or “sponsored” by banks or different monetary establishments or by sure authorities sponsored
enterprises corresponding to Fannie Mae or Freddie Mac. TCIM doesn’t take into accounts whether or not the sponsor of an asset-backed security
through which the Account invests meets the ESG standards. That’s as a result of asset-backed securities characterize pursuits in swimming pools of loans,
and never of the continued enterprise enterprise of the sponsor. It’s subsequently doable that the Account might spend money on an asset-backed
or mortgage-backed security sponsored by a financial institution or different monetary establishment through which the Account couldn’t make investments straight.

The fixed-income portion of the Account
might also use a buying and selling approach referred to as “mortgage rolls” or “greenback rolls” through which the Account “rolls
over” an funding in a mortgage-backed security earlier than its settlement date in alternate for the same security with a later
settlement date.

Cash market devices and short-term
debt securities held by the Account are primarily securities with maturities of 397 days or much less on the time of buy that TCIM
believes current minimal credit score dangers, together with “authorities securities” as such time period is outlined within the relevant
guidelines governing cash market funds. The Account can even maintain different kinds of short-term devices. These assist the Account to
preserve liquidity, use money balances successfully and make the most of engaging funding alternatives.

The Account might also purchase and promote choices,
swaps, choices on swaps, futures contracts and choices on futures. The Account might use these devices as hedging strategies,
for money administration functions or to hunt to extend complete return. These devices do, nevertheless, contain particular dangers. The Account
isn’t required to hedge its investments and such devices is not going to be topic to the Account’s ESG standards.

The Board of Trustees of CREF or a delegated
committee thereof (“Board of Trustees”) evaluations the ESG standards used to judge securities held by the Account and
approves the seller of that service. TCIM seeks to make sure that the Account’s investments are according to its ESG and/or
Influence standards, however TCIM can not assure that this may at all times be the case for each Account funding. According to its
tasks, the Board of Trustees evaluates choices for implementing the Account’s ESG analysis standards. TCIM has
the correct to alter the ESG vendor(s) at any time and so as to add to the variety of vendor(s) offering the universe of eligible corporations.
Investing on the idea of ESG standards is qualitative and subjective by

       
Faculty Retirement Equities Fund Prospectus 59

nature, and there might be no assurances that the method utilized
by the Account’s vendor(s) or any judgment exercised by the Board of Trustees or TCIM will replicate the beliefs or values
of any specific investor.

The Account isn’t restricted from investing
in any securities issued or assured by the U.S. authorities or its companies or instrumentalities. The Account might also make investments
in securities issued by different nations or their companies or instrumentalities as accepted by the Board of Trustees.

Principal Funding Dangers: The
Account is topic to the next principal funding dangers:

market danger;

issuer danger (usually referred to as monetary
danger);

overseas funding danger;

lively administration danger;

quantitative evaluation danger;

ESG standards danger;

rate of interest danger;

prepayment danger;

extension danger;

revenue volatility danger;

credit score danger;

name danger;

volatility, liquidity and valuation
danger;

downgrade danger;

mortgage roll danger;

non-investment-grade danger;

illiquid investments danger;

derivatives danger; and

U.S. authorities securities danger.

As with all funding, you may lose cash
by investing on this Account.

Who Might Need to Make investments: The Social
Alternative Account could also be finest for people who need to keep away from investing in corporations that don’t meet sure ESG or Influence standards;
need an Account balanced amongst shares, bonds and cash market devices; and/or need an Account that could be much less unstable than
an Fairness Account.

See “Principal dangers of investing
within the Accounts” beneath and “Extra details about funding methods and dangers” beneath for extra info.

 

Cash Market Account

Cash Market Account

Funding Goal: Excessive present
revenue according to sustaining liquidity and preserving capital.

Principal Funding Methods:
The Account is a “authorities cash market fund” as outlined within the relevant guidelines governing cash market funds and
as such, invests a minimum of 99.5% of its complete property in money, U.S. Authorities securities and/or repurchase agreements which can be collateralized
absolutely by money or U.S. Authorities securities. These investments embrace (1) securities issued by, or whose principal and curiosity
are assured by, the U.S. Authorities or considered one of its companies or instrumentalities and (2) repurchase agreements involving securities
issued or assured by the U.S. Authorities or considered one of its companies or instrumentalities. Quick-term, U.S. Authorities securities
usually pay curiosity that’s among the many lowest for income-paying securities. Due to this, the yield on the Account will possible
be decrease than the yields on funds that spend money on longer-term or lower-quality securities.

The Account’s investments will likely be
made in accordance with the relevant guidelines governing the standard, maturity and diversification of securities and different devices
held by cash market funds. The Account maintains a dollar-weighted common maturity of 60 days or much less and a dollar-weighted common
life to maturity of 120 days or much less, and invests in debt obligations which can be deemed to mature in 397 days or much less.

TCIM limits the Account’s investments
to U.S. Authorities securities or securities that current minimal credit score dangers to the Account and are of eligible high quality.

A authorities cash market fund isn’t
required to impose liquidity charges or redemption gates, and the Account doesn’t at the moment intend to impose such charges and/or gates.
Nevertheless, the Account’s Board of Trustees might elect to topic the Account to such charges and/or gates sooner or later.

       
Faculty Retirement Equities Fund Prospectus 60

The above record of investments isn’t unique
and the Account might make different investments according to its funding goal and insurance policies.

The peer group common to which the Account
is in contrast is the iMoneyNet Cash Fund AveragesTM —All Authorities.

Principal Funding Dangers: You
might lose cash by investing within the Cash Market Account. As a result of the buildup unit worth of the Account will fluctuate, the
worth of your funding might enhance or lower and the Account’s yield could possibly be zero or destructive. An funding within the
Account isn’t insured or assured by the Federal Deposit Insurance coverage Company or another authorities company. The Account’s
sponsor has no authorized obligation to supply help to the Account, and you shouldn’t anticipate that the sponsor will present monetary
help to the Account at any time. The Account is topic to the next principal funding dangers:

  · rate of interest danger;
  · issuer danger (usually referred to as monetary danger);
  · revenue volatility danger;
  · credit score danger;
  · market volatility, liquidity and valuation danger
  · lively administration danger;
  · present revenue danger;
  · U.S. Authorities securities danger; and
  · floating and variable securities danger.

No Fixed Accumulation Worth: In contrast to
most cash market funds, the Cash Market Account doesn’t distribute revenue each day. Subsequently, the Account doesn’t
preserve a continuing worth of $1.00 per unit and the buildup unit worth will fluctuate.

Who Might Need to Make investments: The Cash
Market Account could also be finest for people who’ve a shorter time horizon and/or who’re danger averse.

See “Principal dangers of investing
within the Accounts” beneath and “Extra details about funding methods and dangers” beneath for extra info.

 

Principal dangers of investing within the Accounts

 

Principal dangers of investing in fairness Accounts

On the whole, the worth of fairness investments
fluctuates in response to the efficiency and monetary situation of particular person corporations that situation them and in response to basic
market and financial circumstances. Subsequently, the worth of an funding within the Accounts that maintain fairness securities might lower.
Traders ought to be conscious that in gentle of the present uncertainty, volatility and misery in economies, monetary markets, and
labor and well being circumstances all over the world, the dangers beneath (together with the dangers associated to investing in fixed-income devices)
are heightened considerably in comparison with regular circumstances and subsequently topic an Account’s investments and a shareholder’s
funding in an Account to the danger of decreased yield and /or revenue and sudden and substantial losses. The truth that a specific
danger beneath isn’t particularly recognized as being heightened beneath present circumstances doesn’t imply that the danger isn’t better
than beneath regular circumstances. There is no such thing as a assure that an Account will meet its funding goal.

An funding in an Fairness Account, the
Index Account, or the fairness portion of the Social Alternative Account, or any Account’s fairness investments, usually will likely be
topic to the next principal funding dangers described beneath:

  · Issuer Threat (usually referred to as Monetary Threat)—The chance that the issuer’s earnings prospects and total monetary place will deteriorate, inflicting a decline within the worth of the issuer’s monetary devices over quick or prolonged intervals of time. In occasions of market turmoil, perceptions of an issuer’s credit score danger can rapidly change and even giant, well-established issuers might deteriorate quickly with little or no warning.
  · Market Threat—The chance that the worth of fairness investments might decline in response to basic market and financial circumstances or occasions, together with circumstances and developments outdoors of the monetary markets corresponding to vital adjustments in curiosity and inflation charges, the provision of credit score and the prevalence of different elements, corresponding to pure disasters or public well being emergencies (pandemics and epidemics). Accordingly, the worth of the fairness investments that an Account holds might decline over quick or prolonged intervals of time. Any funding is topic to the danger that the monetary markets as a complete might decline in worth, thereby miserable the funding’s worth. Fairness markets, for instance, are usually cyclical, with intervals when costs usually rise and intervals when costs usually decline. Overseas fairness markets are likely to replicate native financial and monetary circumstances and, subsequently, tendencies usually range from nation to nation and area to area. During times of bizarre volatility or turmoil within the monetary markets, an Account might bear an prolonged interval of decline. From
       
Faculty Retirement Equities Fund Prospectus 61

time to time, an Account might make investments a good portion of
its property in corporations in a number of associated sectors or industries, which might make the Account extra susceptible to adversarial developments
affecting such sectors or industries.

The Accounts that make overseas investments
are topic to:

  · Rising Markets Threat—The chance of overseas funding usually will increase in nations with rising markets. For instance, these nations might have extra unstable governments than developed nations, and their economies could also be based mostly on just a few industries. Rising market nations might also have much less stringent regulation of accounting, auditing, monetary reporting and recordkeeping necessities, which might have an effect on an Account’s means to judge potential portfolio corporations. As a result of their monetary markets could also be very small, share costs of monetary devices in rising market nations could also be unstable and tough to find out. Monetary devices of issuers in these nations might have decrease total liquidity than these of issuers in additional developed nations. As well as, overseas traders such because the Accounts are topic to quite a lot of particular restrictions in lots of rising market nations. The dangers outlined above are sometimes extra pronounced in “frontier markets” through which an Account might make investments. Furthermore, authorized treatments for traders in rising markets (together with by-product litigation) could also be extra restricted, and U.S. authorities (such because the SEC or U.S. Division of Justice) might have much less means to convey actions in opposition to dangerous actors in rising market nations. Frontier markets are these rising markets which can be thought of to be among the many smallest, least mature and least liquid. These elements might make investing in frontier market nations considerably riskier than investing in different nations.
  · Overseas Funding Threat—Overseas investments, which can embrace securities of overseas issuers, securities or contracts traded or acquired in non-U.S. markets or on non-U.S. exchanges, or securities or contracts payable or denominated in non-U.S. currencies, can contain particular dangers that come up from a number of of the next occasions or circumstances: (1) adjustments in forex alternate charges; (2) doable imposition of market controls or forex alternate controls; (3) doable imposition of withholding taxes on dividends and curiosity; (4) doable seizure, expropriation or nationalization of property; (5) extra restricted monetary info or difficulties deciphering it due to overseas rules and accounting requirements; (6) decrease liquidity and better volatility in some overseas markets; (7) the affect of political, social or diplomatic occasions; (8) financial sanctions or different measures by the US or different governments; (9) the issue of evaluating some overseas financial tendencies; and (10) the chance {that a} overseas authorities might prohibit an issuer from paying principal and curiosity to traders outdoors the nation. Brokerage commissions and custodial and transaction prices are sometimes larger for overseas investments, and it might be tough to make use of overseas legal guidelines and courts to implement monetary or authorized obligations. To the extent an Account invests a good portion of its property within the securities of corporations in a single nation or area, it’s extra more likely to be impacted by occasions or circumstances affecting that nation or area. Funding in an Account could also be extra uncovered to a single nation or a area’s cycles, inventory market valuations and forex, which might enhance its danger in contrast with a extra geographically diversified Account. As well as, political, social, regulatory, financial or environmental occasions that happen in a single nation or area might adversely have an effect on the values of that nation or area’s securities and thus the holdings of an Account.

The dangers described above usually
enhance in nations with rising markets. For instance, these nations might have extra unstable governments than developed nations,
and their economies could also be based mostly on just a few industries. Monetary devices of issuers in these nations might have decrease total
liquidity than these of issuers in additional developed nations. Rising market nations usually have much less established authorized, accounting
and monetary reporting methods than these in additional developed markets, which can cut back the scope or high quality of monetary info
out there to traders. Governments in rising market nations are sometimes much less steady and extra more likely to take extra-legal motion
with respect to corporations, industries, property, or overseas possession than these in additional developed markets. Furthermore, it may be extra
tough for traders to convey litigation or implement judgments in opposition to issuers in rising markets or for U.S. regulators to
convey enforcement actions in opposition to such issuers. As a result of the monetary markets of rising market nations could also be very small, costs
of issuers in rising market nations could also be unstable and tough to find out. As well as, overseas traders corresponding to an Account
are topic to a number of particular restrictions in lots of such nations. The economies of some rising markets could also be significantly
uncovered to or affected by a sure {industry} or sector, and subsequently issuers and/or securities of such rising markets could also be
extra affected by the efficiency of such industries or sectors.

The Accounts (or parts of an Account)
which can be managed in response to a progress funding type are topic to:

  · Model Threat/Dangers of Development Investing—Use of both a progress investing or worth investing type entails the danger that fairness securities representing both type could also be out of favor within the market for numerous intervals of time, and lead to underperformance relative to the broader market sector or vital declines within the Account’s portfolio worth. As a consequence of their comparatively excessive valuations, progress shares are usually extra unstable than worth shares. For instance, the worth of a progress inventory might expertise a bigger decline on a forecast of decrease earnings, or a destructive occasion or market improvement, than would a worth inventory. As a result of the worth of progress corporations is commonly a perform of their anticipated earnings progress, there’s a danger that such earnings progress might not happen or can’t be sustained. Accordingly, a inventory with progress traits can have sharp worth declines resulting from decreases in present or anticipated earnings and should lack dividends that may assist cushion its
       
Faculty Retirement Equities Fund Prospectus 62

share worth in a declining market. As well as, progress shares,
at occasions, might not carry out in addition to worth shares or the inventory market typically and could also be out of favor with traders for various
intervals of time.

The Accounts which can be managed, in complete
or partly, in response to indexing strategies are topic to:

  · Index Threat—The chance that the efficiency of an Account might not correspond to, or might underperform, its benchmark index for any time period. Though every Account makes an attempt to make use of the funding efficiency of its respective index as a baseline, it might not duplicate the precise composition of that index. As well as, in contrast to an Account, the returns of an index aren’t decreased by funding and different working bills, and subsequently, the power of an Account to match the efficiency of its index is adversely affected by the prices of shopping for and promoting investments in addition to different bills. Subsequently, no Account can assure that its efficiency will match or exceed its index for any time period.
  · Non-Diversification Threat—Whereas the Fairness Index Account is taken into account to be a diversified funding firm beneath the 1940 Act, this Account might develop into non-diversified beneath the 1940 Act with out Account participant approval when essential to proceed to trace its benchmark index. Non-diversified standing implies that this Account can make investments a better share of its property within the securities of a single issuer than a diversified funding firm. Investing in a non-diversified funding firm includes better danger than investing in a diversified funding firm as a result of a loss in worth of a specific funding might have a better impact on the funding firm’s return since that funding might characterize a bigger portion of the funding firm’s complete portfolio property, which might result in better volatility within the funding firm’s returns.

As a result of the Accounts are managed by an
funding adviser, they’re topic to administration danger.

The Accounts which can be managed, in complete
or partly, in response to lively administration funding strategies are topic to:

  · Energetic Administration Threat—The chance that the efficiency of an Account, which is actively managed, displays partly the power of the portfolio supervisor(s) to make lively funding, strategic or buying and selling selections which can be suited to attaining the Account’s funding goal. Because of technique, funding choice or buying and selling execution, such Account might underperform its benchmark or different funding merchandise with comparable funding aims.

The Accounts which can be managed, in complete
or partly, in response to a quantitative funding methodology are topic to:

  · Quantitative Evaluation Threat—The chance that securities chosen for Accounts which can be actively managed, in complete or partly, in response to a quantitative evaluation methodology can carry out in a different way from the market as a complete based mostly on the mannequin and the elements used within the evaluation, the burden positioned on every issue and adjustments within the issue’s historic tendencies and the danger that such quantitative evaluation and modeling might not adequately keep in mind sure elements, might include design flaws or inaccurate assumptions and should depend on inaccurate information inputs. If inaccurate market information is entered right into a quantitative mannequin, the ensuing info will likely be incorrect. As a result of such fashions are based mostly on assumptions of those and different market elements, the fashions might not keep in mind sure elements, or carry out as meant, and should lead to a decline within the worth of an Account’s portfolio.

The Accounts that spend money on large-cap
securities are topic to:

  · Massive-Cap Threat—The chance that, by specializing in securities of bigger corporations, an Account might have fewer alternatives to determine securities that the market misprices and that these corporations might develop extra slowly than the financial system as a complete or by no means. Additionally, bigger corporations might fall out of favor with the investing public because of market, political and financial circumstances, together with for causes unrelated to their companies or financial fundamentals.
  The Accounts that spend money on medium-sized and small-sized securities are topic to:
  · Mid-Cap Threat—Securities of medium-sized corporations might expertise better fluctuations in worth than the securities of bigger corporations. Now and again, medium-sized firm securities might need to be bought at a reduction from their present market costs or in small heaps over an prolonged interval, since they could be tougher to promote than larger-cap securities. As well as, it might be tough to search out consumers for securities of medium-sized corporations that an Account needs to promote when the corporate isn’t perceived favorably within the market or in periods of poor financial or market circumstances. Such corporations could also be topic to sure enterprise dangers resulting from their smaller measurement, restricted markets and monetary assets, slender product traces and frequent lack of depth of administration. The prices of buying and promoting securities of medium-sized corporations could also be better than these of extra broadly traded securities.
  · Small-Cap Threat—Securities of small-sized corporations might expertise better fluctuations in worth than the securities of bigger corporations. The securities of small-sized corporations usually have decrease total liquidity than these of bigger, extra established corporations. The variety of small-sized corporations whose securities are listed on securities exchanges has been declining whereas investor demand for the securities of such issuers has been growing, in every case relative to historic tendencies, which can enhance an Account’s publicity to illiquid investments danger. Consequently, an Account’s investments within the securities of small-sized corporations could also be tough to buy or promote at an advantageous time or worth, which might forestall the Account from benefiting from funding alternatives. Now and again, small-sized firm securities might need to be bought at a reduction from their present market costs or in small heaps over an prolonged interval, since they could be tougher to promote than larger-cap securities. As well as, it might be tough to search out consumers for securities of small-sized
       
Faculty Retirement Equities Fund Prospectus 63

corporations that an Account needs to promote when the corporate is
not perceived favorably within the market or in periods of poor financial or market circumstances. Such corporations could also be topic
to sure enterprise dangers resulting from their smaller measurement, restricted markets and monetary assets, slender product traces and frequent
lack of depth of administration. The prices of buying and promoting securities of small-sized corporations could also be better than these
of extra broadly traded securities.

The Social Alternative Account is topic to:

  · ESG Standards Threat—The chance that as a result of the Account’s ESG standards and/or proprietary affect framework exclude securities of sure issuers for nonfinancial causes, the Account might forgo some market alternatives out there to funds or accounts that don’t use these standards.

 

Principal dangers of investing within the Mounted-Earnings
Accounts and the Cash Market Account

An funding in a Mounted-Earnings Account,
the Cash Market Account or the fixed-income portion of the Social Alternative Account, or any Account’s fixed-income investments,
usually will likely be topic to the next principal funding dangers described beneath:

  · Energetic Administration Threat—The chance that the efficiency of an Account, which is actively managed, displays partly the power of the portfolio supervisor(s) to make lively funding, strategic or buying and selling selections which can be suited to attaining the Account’s funding goal. Because of technique, funding choice or buying and selling execution, such Account might underperform its benchmark or different funding merchandise with comparable funding aims.
  · Name Threat—The chance that an issuer will redeem a fixed-income security previous to maturity. This usually occurs when prevailing rates of interest are decrease than the speed specified for the fixed-income security. If a fixed-income security known as early, an Account might not be capable of profit absolutely from the rise in worth that different fixed-income securities expertise when rates of interest decline. Moreover, an Account would possible need to reinvest the payoff proceeds at present yields, that are more likely to be decrease than the fixed-income securities through which the Account initially invested, leading to a decline in revenue.
  · Credit score Threat (a sort of Issuer Threat)—The chance {that a} decline, or perceived decline (whether or not by market individuals, ranking companies, pricing companies or in any other case), in an issuer’s monetary place might forestall it from making principal and curiosity funds on fixed-income investments when due. Credit score danger pertains to the chance that the issuer might default on its obligations, thereby inflicting an Account to lose its funding. Credit score danger is heightened in occasions of market turmoil, when perceptions of an issuer’s credit score danger can rapidly change and even giant, well-established issuers and/or governments might deteriorate quickly with little or no warning. Credit score danger can also be heightened within the case of investments in lower-rated, high-yield fixed-income securities as a result of their issuers are usually in weak monetary well being and their means to pay curiosity and principal is unsure. In comparison with issuers of investment-grade securities, issuers of lower-rated, high-yield fixed-income investments usually tend to encounter monetary difficulties and to be materially affected by such difficulties. Excessive-yield securities might also be comparatively extra illiquid; subsequently, they could be tougher to buy or promote than extra extremely rated securities.
  · Present Earnings Threat—The chance that the revenue an Account receives might fall because of a decline in rates of interest.
  · Derivatives Threat—The dangers related to investing in derivatives could also be totally different from and better than the dangers related to straight investing within the underlying securities and different devices. Derivatives corresponding to swaps are topic to dangers corresponding to liquidity danger, rate of interest danger, market danger, and credit score danger. These derivatives contain the danger of mispricing or improper valuation and the danger that the costs of sure choices, futures, swaps (together with credit score default swaps), forwards and different sorts of by-product devices might not correlate completely with the costs or efficiency of the underlying security, forex, price, index or different asset. Sure derivatives current counterparty danger, or the danger of default by the opposite get together to the contract, and a few derivatives are, or might all of the sudden develop into, illiquid. A few of these dangers exist for futures, choices and swaps which can commerce on established markets. Unanticipated adjustments in rates of interest, securities costs or forex alternate charges might lead to poorer total efficiency of an Account than if it had not entered into derivatives transactions. The potential for loss because of investing in derivatives, and the pace at which such losses might be realized, could also be better than investing straight within the underlying security or different instrument. By-product investments can create leverage by magnifying funding losses or good points, and an Account might lose greater than the quantity invested.
  · Downgrade Threat—The chance that securities are subsequently downgraded ought to TCIM and/or ranking companies imagine the issuer’s enterprise outlook or creditworthiness has deteriorated. If this happens, the values of those investments might decline, or it might have an effect on the issuer’s means to boost extra capital for operational or monetary functions and enhance the possibility of default, as a downgrade could also be seen within the monetary markets as a sign of an issuer’s deteriorating monetary place.
  · Extension Threat—The chance that in intervals of rising rates of interest, debtors might repay their mortgage loans later than anticipated, stopping an Account from reinvesting principal proceeds at larger rates of interest, leading to much less revenue than probably out there. These dangers are usually current in mortgage-backed securities and different asset-backed securities. For instance, householders have the choice to prepay their mortgages. Subsequently, the period of a security backed by residence mortgages can lengthen relying on home-owner prepayment exercise. A decline within the prepayment price and the ensuing enhance in period of fixed-income securities held by an Account can lead to losses to traders within the Account.
       
Faculty Retirement Equities Fund Prospectus 64

  · Mounted-Earnings Overseas Funding Threat—Overseas investments, which can embrace fixed-income securities of overseas issuers, or securities or contracts payable or denominated in non-U.S. currencies, can contain particular dangers that come up from a number of of the next occasions or circumstances: (1) adjustments in forex alternate charges; (2) doable imposition of market controls or forex alternate controls; (3) doable imposition of withholding taxes on dividends and curiosity; (4) doable seizure, expropriation or nationalization of property; (5) extra restricted monetary details about the overseas debt issuer or difficulties deciphering it due to overseas rules and accounting requirements; (6) decrease liquidity and better volatility in some overseas markets; (7) the affect of political, social or diplomatic occasions; (8) financial sanctions or different measures by the US or different governments; (9) the issue of evaluating some overseas financial tendencies; and (10) the chance {that a} overseas authorities might prohibit an issuer from paying principal and curiosity on its debt obligations to traders outdoors the nation. It could even be tough to make use of overseas legal guidelines and courts to drive a overseas issuer to make principal and curiosity funds on its debt obligations. As well as, the price of servicing exterior debt may even usually be adversely affected by rising worldwide rates of interest as a result of many exterior debt obligations bear curiosity at charges that are adjusted based mostly upon worldwide rates of interest.

The dangers described above usually
enhance in nations with rising markets. For instance, the power of a overseas sovereign issuer, particularly in an rising
market nation, to make well timed and supreme funds on its debt obligations could also be strongly influenced by the issuer’s steadiness
of funds, together with export efficiency, its entry to worldwide credit score and investments, fluctuations of rates of interest and
the extent of its overseas reserves. If a deterioration happens within the overseas nation’s steadiness of funds, it might impose
short-term restrictions on overseas capital remittances. As well as, there’s a danger of restructuring sure overseas debt obligations
that would cut back and reschedule curiosity and principal funds. Monetary devices of issuers in these nations might have
decrease total liquidity than these of issuers in additional developed nations. Rising market nations usually have much less established
authorized, accounting and monetary reporting methods than these in additional developed markets, which can cut back the scope or high quality of
monetary info out there to traders. Governments in rising market nations are sometimes much less steady and extra more likely to
take extra-legal motion with respect to corporations, industries, property, or overseas possession than these in additional developed markets.
Furthermore, it may be tougher for traders to convey litigation or implement judgments in opposition to issuers in rising markets or
for U.S. regulators to convey enforcement actions in opposition to such issuers. The economies of some rising markets could also be significantly
uncovered to or affected by a sure {industry} or sector, and subsequently issuers and/or securities of such rising markets could also be
extra affected by the efficiency of such industries or sectors.

  · Floating and Variable Fee Securities Threat— Floating and variable price securities present for adjustment within the rate of interest paid on the obligations. The phrases of such obligations usually present that rates of interest are adjusted based mostly upon an curiosity or market price adjustment as offered within the respective obligations. The adjustment intervals could also be common, and vary from day by day as much as yearly, or could also be event-based, corresponding to based mostly on a change within the prime price. Due to the rate of interest adjustment characteristic, floating and variable price securities present an investor with a sure diploma of safety in opposition to rises in rates of interest, though the investor will take part in any declines in rates of interest as properly. Typically, adjustments in rates of interest could have a smaller impact available on the market worth of floating and variable price securities than available on the market worth of comparable fixed-income obligations. Thus, investing in floating and variable price securities usually permits much less alternative for capital appreciation and depreciation than investing in comparable fixed-income securities. Floating and variable price securities could also be topic to better liquidity danger than different debt securities, which means that there could also be limitations on an Account’s means to promote the securities at any given time. Such securities additionally might lose worth.
  · Illiquid Investments Threat—The chance that illiquid investments could also be tough to promote for the worth at which they’re carried, if in any respect, or at any worth inside the desired timeframe. Illiquid investments are these that aren’t moderately anticipated to be bought or disposed of in present market circumstances in seven calendar days or much less with out the sale or disposition considerably altering the market worth of the funding. Pursuant to relevant SEC rules, an Account might not make investments greater than 15% of its internet property in illiquid investments which can be property. The Accounts have applied a liquidity danger administration program and associated procedures to determine illiquid investments pursuant to this regulation. An Account could also be restricted in its means to spend money on illiquid and “much less liquid” investments, which can adversely have an effect on an Account’s efficiency and skill to attain its funding goal. An Account’s investments in illiquid investments might cut back the returns of the Account as a result of it might be unable to promote the illiquid funding at an advantageous time or worth, which might forestall the Account from benefiting from different funding alternatives. There may be additionally a danger that unusually excessive withdrawal requests from sure giant plans or individuals (corresponding to institutional traders) or asset allocation adjustments, might make it tough for an Account to promote investments in adequate time to permit it to fulfill withdrawals or require an Account to promote illiquid investments at decreased costs or beneath unfavorable circumstances. Illiquid investments might commerce much less continuously, in decrease portions and/or at a reduction as in comparison with extra liquid investments, which can trigger an Account to obtain distressed costs and incur larger transaction prices when promoting such investments. Securities which can be liquid on the time of buy might subsequently develop into illiquid resulting from occasions corresponding to adversarial developments for an issuer, industry-specific developments, market occasions, rising rates of interest, altering financial circumstances or investor perceptions and geopolitical danger. Dislocations in sure elements of the markets are leading to decreased liquidity for sure investments. It’s unsure when monetary markets will enhance and
       
Faculty Retirement Equities Fund Prospectus 65

    financial circumstances will stabilize. Liquidity of monetary markets might also be affected by authorities intervention and political, social, well being, financial or market developments. Throughout interval of market stress, a Fund’s property might probably expertise vital ranges of illiquidity.
  · Earnings Volatility Threat—Earnings volatility refers back to the diploma and pace with which adjustments in prevailing market rates of interest diminish the extent of present revenue from a portfolio of fixed-income securities. The chance of revenue volatility is that the extent of present revenue from a portfolio of fixed-income securities might decline in sure rate of interest environments.
  · Curiosity Fee Threat (a sort of Market Threat)—The chance that the worth or yield of fixed-income investments might decline if rates of interest change. On the whole, when prevailing rates of interest decline, the market values of excellent fixed-income investments (significantly these paying a hard and fast price of curiosity) have a tendency to extend whereas yields on comparable newly issued fixed-income investments are likely to lower, which might adversely have an effect on an Account’s revenue. Conversely, when prevailing rates of interest enhance, the market values of excellent fixed-income investments (significantly these paying a hard and fast price of curiosity) have a tendency to say no whereas yields on comparable newly issued fixed-income investments have a tendency to extend. If a fixed-income funding pays a floating or variable price of curiosity, adjustments in prevailing rates of interest might enhance or lower the funding’s yield. Mounted-income investments with longer durations are usually extra delicate to rate of interest adjustments than shorter-duration investments. Rate of interest danger is mostly heightened in periods when prevailing rates of interest are low or destructive. During times of very low or destructive rates of interest, an Account might not be capable of preserve optimistic returns. As of the date of this Prospectus, rates of interest in the US and in sure overseas markets are at low ranges, which can enhance an Account’s publicity to dangers related to rising rates of interest. On the whole, altering rates of interest might have unpredictable results on the markets and should expose fixed-income and associated markets to heightened volatility. All kinds of things may cause rates of interest to rise (e.g., central financial institution financial insurance policies, inflation charges, basic financial circumstances). With respect to the Cash Market Account, low or destructive rates of interest might trigger the Account to lose worth and expertise a destructive yield.
  · Issuer Threat (usually referred to as Monetary Threat)—The chance that the issuer’s earnings prospects and total monetary place will deteriorate, inflicting a decline within the worth of the issuer’s monetary devices over quick or prolonged intervals of time. In occasions of market turmoil, perceptions of an issuer’s credit score danger can rapidly change and even giant, well-established issuers might deteriorate quickly with little or no warning.
  · Market Volatility, Liquidity and Valuation Threat (sorts of Market Threat)—Buying and selling exercise in fixed-income investments through which an Account invests could also be dramatically decreased or stop at any time, whether or not resulting from basic market turmoil, restricted seller capability, issues skilled by a single firm or a market sector, or different elements, corresponding to pure disasters or public well being emergencies (pandemics and epidemics). In such instances, it might be tough for an Account to correctly worth property represented by such investments. As well as, an Account might not be capable of buy or promote a security at a worth deemed to be engaging, if in any respect, which can inhibit an Account from pursuing its funding methods or negatively affect the values of portfolio holdings. Additional, a rise in rates of interest or different adversarial circumstances (e.g., inflation/deflation, elevated promoting of fixed-income investments throughout different pooled funding autos or accounts, adjustments in investor notion or adjustments in authorities intervention within the markets) might result in elevated redemptions and elevated portfolio turnover, which might cut back liquidity for sure Account investments, adversely have an effect on values of portfolio holdings, and enhance an Account’s prices. If seller capability in fixed-income markets is inadequate for market circumstances, this has the potential to additional inhibit liquidity and enhance volatility within the fixed-income markets. Sure fixed-income investments, with longer durations or maturities might face heightened ranges of liquidity danger.
  · Mortgage Roll Threat— The chance that TCIM is not going to accurately predict mortgage prepayments and rates of interest, which is able to diminish the funding efficiency of an Account in contrast with what such efficiency would have been with out using the technique.
  · Non-Funding-Grade Securities Threat—Issuers of non-investment-grade securities, that are normally referred to as “high-yield” or “junk” bonds, are usually in weaker monetary well being and such securities might be tougher to worth and promote and their costs might be extra unstable than extra extremely rated securities. Whereas these securities usually have larger charges of curiosity, additionally they contain better danger of default than do securities of a higher-quality ranking. As well as, high-yield securities usually are much less liquid than investment-grade securities and the dangers related to high-yield securities are heightened throughout occasions of weakening financial circumstances or rising rates of interest. Any funding in distressed or defaulted securities topics an Account to even better credit score danger than investments in different below-investment-grade securities.
  · Portfolio Turnover Threat—In pursuing its funding aims, the Core Bond Account might interact in buying and selling that leads to a excessive portfolio turnover price, which can range vastly from 12 months to 12 months, in addition to inside a given 12 months. A better portfolio turnover price might lead to correspondingly better transactional bills which can be borne by the Account. Such bills might embrace bid-ask spreads, seller mark-ups and different transactional prices on the sale of securities and reinvestment in different securities, and should consequence within the realization of taxable capital good points (together with short-term good points, that are usually taxed to shareholders as unusual revenue). These prices, which aren’t mirrored in annual account working bills or within the instance thereunder, might have an effect on the Account’s efficiency.
       
Faculty Retirement Equities Fund Prospectus 66

  · Prepayment Threat—The chance that in intervals of falling rates of interest, debtors might repay their mortgage loans ahead of anticipated, forcing an Account to reinvest the unanticipated proceeds at decrease rates of interest, leading to a decline in revenue. These dangers are usually current in mortgage-backed investments and different asset-backed investments. For instance, householders have the choice to prepay their mortgages. Subsequently, the period of a security backed by residence mortgages can shorten relying on home-owner prepayment exercise. An increase within the prepayment price and the ensuing decline in period of fixed-income investments held by an Account can lead to losses to traders within the Account.
  · Particular Dangers of Inflation-Listed Bonds—The chance that market values of inflation-indexed investments held by an Account could also be adversely affected by quite a lot of elements, together with adjustments available in the market’s inflation expectations, adjustments in actual charges of curiosity or declines in inflation (or deflation). There’s a danger that curiosity funds in inflation-indexed investments might fall due to a decline in inflation (or deflation). As well as, the Shopper Worth Index for All City Shoppers (CPI-U) might not precisely replicate the true price of inflation. If the market perceives that any of those occasions have occurred, then the market worth of these investments could possibly be adversely affected.
  · U.S. Authorities Securities Threat— U.S. Treasury obligations and a few obligations of U.S. Authorities companies and instrumentalities are supported by the complete religion and credit score of the U.S. Authorities. Different U.S. Authorities companies or instrumentalities are backed by the correct of the issuer to borrow from the U.S. Treasury. Nonetheless others are supported solely by the credit score of the issuer. No assurance might be provided that the U.S. Authorities would offer monetary help to its companies or instrumentalities if not required to take action by regulation, and such companies or instrumentalities might not have the funds to fulfill their cost obligations sooner or later. Subsequently, securities issued by U.S. Authorities companies or instrumentalities that aren’t backed by the complete religion and credit score of the U.S. Authorities might contain elevated danger of lack of principal and curiosity. As well as, the worth of U.S. Authorities securities could also be affected by adjustments within the credit standing of the U.S. Authorities.

To the extent an Account invests
considerably in securities issued or assured by the U.S. Authorities or its companies or instrumentalities, any market actions,
regulatory adjustments or adjustments in political or financial circumstances that have an effect on the securities of the U.S. Authorities or its companies
or instrumentalities through which an Account invests might have a big affect on the Account’s efficiency. Occasions that
would adversely have an effect on the market costs of securities issued or assured by one U.S. Authorities company or instrumentality might
adversely have an effect on the market costs of securities issued or assured by different companies or instrumentalities.

 

Previous efficiency

 

The next bar charts and efficiency
tables beneath assist illustrate among the dangers of investing within the Accounts, and the way funding efficiency throughout the accumulation
interval varies. The bar charts present CREF funding efficiency throughout the accumulation interval within the type of annual complete returns
of Class R1 items of every Account for the previous 10 calendar years, haven’t been adjusted to replicate present charge charges and don’t
keep in mind any TIAA plan pricing the place a number of CREF Accounts are funding choices in an employer retirement plan.
For instance, since all Class R4 individuals take part by way of employer retirement plans, the return to every Class R4 participant
can be decrease than the Common Annual Whole Returns of CREF for Class R4 after bearing in mind plan-level charges for TIAA recordkeeping
that the plan passes on to the participant. Efficiency displays Contract charges and bills which can be paid by every contractowner.
As a result of the bills might range throughout courses, the efficiency of Class R1 might range from the opposite courses. Beneath every chart, the
finest and worst returns of Class R1 for a calendar quarter throughout this era are famous.

The efficiency tables following the charts
present every Account’s common annual complete returns for Class R1 items, in addition to Class R2 and R3 items (whose efficiency
previous to their inception date on April 24, 2015 (for Class R2 and Class R3) and on April 29, 2021 (for Class R4) relies on Class
R1 efficiency), over the one-year, five-year and ten-year intervals ended December 31, 2021, and the way these returns examine to these
of broad-based securities market indices (and a composite index in some situations). As of October 14, 2016, sure adjustments had been
made to the Cash Market Account’s funding methods. Efficiency info previous to this date displays the Cash Market
Account’s funding methods earlier than this date. As a consequence, the Cash Market Account’s efficiency after October
14, 2016 might differ materially from the efficiency info proven beneath for the interval previous to October 14, 2016. Previous efficiency
doesn’t assure future outcomes.

The benchmarks and different indices listed
beneath are unmanaged, and you can’t make investments straight in an index. Using a specific benchmark or comparative index isn’t
a elementary coverage and might be modified with out participant approval. The Accounts will notify you if such a change is made.

 

AVERAGE ANNUAL TOTAL
RETURNS FOR Class R1 (%)

 

Inventory Account   Development Account

 

       
Faculty Retirement Equities Fund Prospectus 67

 

 

Finest quarter: 21.27%, for the quarter ended June 30, 2020.
Worst quarter: -22.45%, for the quarter ended March 31, 2020.

 

World Equities Account

 

 

 

Finest quarter: 22.55%, for the quarter ended June 30, 2020.
Worst quarter: -21.76%, for the quarter ended March 31, 2020.

 

 

 

Finest quarter: 29.25%, for the quarter ended June 30, 2020.
Worst quarter: -16.83%, for the quarter ended December 31, 2018.

 

Fairness Index Account

 

 

 

Finest quarter: 21.82%, for the quarter ended June 30, 2020.
Worst quarter: -20.91%, for the quarter ended March 31, 2020.

       
Faculty Retirement Equities Fund Prospectus 68

AVERAGE ANNUAL TOTAL
RETURNS FOR Class R1 (%)
(concluded)

 

Core Bond Account

 

 

 

Finest quarter: 4.84%, for the quarter ended June 30, 2020.
Worst quarter: -2.78%, for the quarter ended December 31, 2016.

 

Inflation-Linked Bond Account

 

 

 

Finest quarter: 4.65%, for the quarter ended September 30,
2011. Worst quarter: -7.13%,
for the quarter ended June 30, 2013.

Social Alternative Account

 

 

 

Finest quarter: 13.93%, for the quarter ended June 30, 2020.
Worst quarter: -13.24%, for the quarter ended March 31, 2020.

 

Cash Market Account*

 

 

 

Finest quarter: 0.45%, for the quarter ended September 30,
2019. Worst quarter: 0.00%, for the quarter ended March 31, 2011.

 

* Between July 16, 2009 and March 7, 2017, TIAA withheld (“waived”) a portion of the Rule 12b-1 distribution and/or administrative bills for Class R1, Class R2, and Class R3 of the CREF Cash Market Account (the “Account”) when a category’s yield was lower than zero. With out this waiver, the whole returns of the Account would have been decrease. For a interval of three years after the date an quantity was waived, it was eligible for recoupment by TIAA, beneath sure circumstances. All eligible bills had been recouped by July 2018 for Class R3, September 2018 for Class R2 and June 2019 for Class R1.

Between [______] and December
31, 2021, TIAA waived a portion of the Rule 12b-1 distribution and/or administrative bills for Class R1, Class R2, and Class
R3 of the Account when a category’s yield was lower than zero. With out this waiver, the whole returns of the Account would have
been decrease. TIAA might, for a interval of three years after the date an quantity was waived, get well from the Account a portion of the
quantities waived at such time as the category’s day by day yield can be optimistic absent the impact of the waiver and, in such occasion,
the quantity of restoration on any day will likely be roughly 25% of the category’s yield (internet of all different bills) on that day.
Class R4, which was first provided on or after April 29, 2022, was not topic to the waiver described above. Nevertheless, pursuant
to an expense waiver recoupment settlement between TIAA and CREF, Class R4 of the Account bears its professional rata share of any such recoupment
legal responsibility incurred by Class R1, Class R2, and Class R3 property transferred to Class R4 of the Account in reference to the launch
of Class R4.

       
Faculty Retirement Equities Fund Prospectus 69

For the intervals ended December 31, 2021

 

    Inception date   One 12 months   5 years   Ten years  
Inventory Account                
  Class R1 7/31/1952   17.64 % 12.52 % 10.46 %
  Class R2 4/24/2015   17.84   12.76   10.60 #
  Class R3 4/24/2015   17.91   12.84   10.65 #
  Class R4                                        
Morningstar Aggressive Goal Threat Index
(displays no deductions for charges, bills or taxes)
    13.26   12.20   9.76  
CREF Inventory Account Composite Index
(displays no deductions for charges, bills or taxes)
    17.93   13.52   11.18  
World Equities Account                
  Class R1 5/1/1992   22.48   12.29   9.90  
  Class R2 4/24/2015   22.68   12.53   10.04 #
  Class R3 4/24/2015   22.75   12.61   10.09 #
  Class R4                
MSCI All Nation World Index
(displays reinvested dividends internet of withholding taxes however displays no deductions for charges, bills or different taxes)
    16.25   12.26   9.13  
Development Account                
  Class R1 4/29/1994   40.44   19.31   16.53  
  Class R2 4/24/2015   40.68   19.57   16.68 #
  Class R3 4/24/2015   40.76   19.65   16.73 #
  Class R4                
Russell 1000® Development Index
(displays no deductions for charges, bills or taxes)
    38.49   21.00   17.21  
Fairness Index Account                
  Class R1 4/29/1994   20.35   14.87   13.29  
  Class R2 4/24/2015   20.56   15.12   13.43 #
  Class R3 4/24/2015   20.63   15.19   13.48 #
  Class R4                
Russell 3000® Index
(displays no deductions for charges, bills or taxes)
    20.89   15.43   13.79  
Core Bond Account                
  Class R1 3/1/1990   7.67   4.52   3.83  
  Class R2 4/24/2015   7.85   4.75   3.96 #
  Class R3 4/24/2015   7.92   4.82   4.00 #
  Class R4                
                   
Bloomberg Barclays U.S. Combination Bond Index
(displays no deductions for charges, bills or taxes)
    7.51   4.44   3.84  
Inflation-Linked Bond Account                
  Class R1 5/1/1997   7.78   3.69   2.90  
  Class R2 4/24/2015   7.96   3.91   3.03 #
  Class R3 4/24/2015   8.03   3.98   3.07 #
  Class R4                
Bloomberg Barclays U.S. Treasury Inflation Protected Securities (TIPS) 1-10 12 months Index
(displays no deductions for charges, bills or taxes)
    8.39   4.13   2.88  
       
Faculty Retirement Equities Fund Prospectus 70

    Inception date   One 12 months   5 years   Ten years  
Social Alternative Account                
  Class R1 3/1/1990   13.26 % 9.69 % 8.26 %
  Class R2 4/24/2015   13.45   9.93   8.40 #
  Class R3 4/24/2015   13.52   10.00   8.44 #
  Class R4                
Morningstar Reasonable Goal Threat Index
(displays no deductions for charges, bills or taxes)
    12.82   9.75   7.77  
CREF Social Alternative Account Composite Index
(displays no deductions for charges, bills or taxes)
    13.89   9.89   8.67  
Cash Market Account§                
  Class R1 4/1/1988   0.28   0.63   0.31  
  Class R2 4/24/2015   0.35   0.83   0.41 #
  Class R3 4/24/2015   0.38   0.90   0.45 #
  Class R4                
iMoneyNet Cash Fund Averages™—All Authorities     0.28   0.80   0.41  

 

Present efficiency could also be larger or decrease than that proven,
and you’ll have a achieve or a loss while you redeem your accumulation items.

 

# The efficiency proven for Lessons R2, R3 and R4 that’s previous to their inception date relies on efficiency of the Accounts’
Class R1. The efficiency for these intervals has not been restated to replicate the decrease bills of Lessons R2, R3 and R4.
The CREF Inventory Account Composite Index is a weighted common of two unmanaged indices. As of December 31, 2020 the CREF
Inventory Account Composite Index consisted of: 70.0% Russell 3000® Index (home equities) and 30.0% MSCI ACWI
ex USA IMI (overseas equities). The weights within the composite index roughly replicate the relative sizes of the home
and overseas fairness segments of the Inventory Account. The Account’s composite index, the parts that make up a composite
index and the strategy of calculating a composite index’s efficiency might range over time. See “Extra about benchmarks
and different indices” beneath for extra info.
The CREF Social Alternative Account Composite Index is a weighted common of three unmanaged indices. As of December 31, 2020
the CREF Social Alternative Account Composite Index consisted of: 42.0% Russell 3000® Index, 40.0% Bloomberg Barclays
U.S. Combination Bond Index and 18.0% MSCI EAFE + Canada Index. The weights within the composite index roughly replicate the
relative sizes of the home, home investment-grade bond and developed overseas market segments of the Social Alternative
Account. The Account’s composite index, the parts that make up a composite index and the strategy of calculating
a composite index’s efficiency might range over time. See “Extra about benchmarks and different indices” beneath
for extra info.
§

Between July 16, 2009 and March 7, 2017, TIAA withheld (“waived”) a portion of the
Rule 12b-1 distribution and/or administrative bills for Class R1, Class R2, and Class R3 of the CREF Cash Market Account
(the “Account”) when a category’s yield was lower than zero. With out this waiver, the whole returns of the
Account would have been decrease. For a interval of three years after the date an quantity was waived, it was eligible for recoupment
by TIAA, beneath sure circumstances. All eligible bills had been recouped by July 2018 for Class R3, September 2018 for Class
R2 and June 2019 for Class R1.

Between [______] and December 31, 2021, TIAA waived a portion of the Rule
12b-1 distribution and/or administrative bills for Class R1, Class R2, and Class R3 of the Account when a category’s
yield was lower than zero. With out this waiver, the whole returns of the Account would have been decrease. TIAA might, for a
interval of three years after the date an quantity was waived, get well from the Account a portion of the quantities waived at
such time as the category’s day by day yield can be optimistic absent the impact of the waiver and, in such occasion, the quantity
of restoration on any day will likely be roughly 25% of the category’s yield (internet of all different bills) on that day. Class
R4, which was first provided on or after April 29, 2022, was not topic to the waiver described above. Nevertheless, pursuant
to an expense waiver recoupment settlement between TIAA and CREF, Class R4 of the Account bears its professional rata share of any
such recoupment legal responsibility incurred by Class R1, Class R2, and Class R3 property transferred to Class R4 of the Account in
reference to the launch of Class R4.

 

After-tax returns haven’t been proven, since they aren’t related
to traders within the Accounts who maintain their accumulation items by way of tax-deferred preparations corresponding to 401(a), 401(okay) or 403(b)
plans or IRAs. The benchmark indices replicate no deductions for charges, bills or taxes. For the Cash Market Account’s most
present 7-day yield and for the Core Bond and Inflation-Linked Bond Accounts’ most present 30-day yields, please name
800-842-2252.

 

Extra about benchmarks and different indices

 

The benchmarks and broad-based securities
market and different indices described beneath are unmanaged, and you can’t make investments straight in an index.

Use of any of the next benchmarks,
together with use of a composite index, by an Account isn’t a elementary coverage of the Account, so CREF can substitute a benchmark
with out participant approval. CREF will notify Account individuals when such a benchmark change is made.

 

Extra details about the broad-based
securities market indices for the Inventory Account and Social Alternative Account

The returns proven in opposition to the broad-based
securities market index examine common annual returns of the Inventory Account or Social Alternative Account with a broad measure of market
efficiency. The Morningstar Goal Threat Index Sequence is an asset allocation index sequence comprised of constituent Morningstar
indices and displays international fairness market exposures of 20%, 40%,

       
Faculty Retirement Equities Fund Prospectus 71

60%, 80% or 95% based mostly on an asset allocation methodology from
Ibbotson Associates, a Morningstar firm. The returns of the Morningstar Goal Threat Index Sequence replicate multi-asset class publicity
and comparable danger profiles as these Accounts.

 

Extra details about the composite
indices of the Inventory Account and Social Alternative Account

Along with sure broad-based market
indices, the Inventory Account and Social Alternative Account examine their efficiency to a composite index as described beneath.

The Inventory Account Composite Index is made
up of two unmanaged indices: the Russell 3000® Index (home equities) and the MSCI ACWI ex-USA IMI (overseas
equities). The Inventory Account Composite Index is created by calculating a weighted common of the efficiency of the 2 indices
utilizing the goal weights of the home and overseas segments of the Inventory Account. These weights change to replicate a mix
of the relative market actions of every sector and goal allocations to every sector.

The Social Alternative Account Composite Index
is made up of three unmanaged indices. Every of those unmanaged indices represents the three sorts of market sectors through which the
Social Alternative Account invests, (i.e., home fairness, developed overseas market fairness and home investment-grade bond).
The home fairness market sector is represented by the Russell 3000® Index, the developed overseas market sector
is represented by the MSCI EAFE + Canada Index and the home investment-grade bond sector is represented by the Bloomberg U.S.
Combination Bond Index. The Social Alternative Account Composite Index is created by calculating a weighted common of the efficiency
of those three indices utilizing the goal weights of the home, developed overseas markets fairness, and home investment-grade
bond segments of the Account.

An Account’s composite index, the
parts that make up a composite index and the strategy of calculating a composite index’s efficiency might range over time.

 

Russell 3000 Index

That is the benchmark index for the Fairness
Index Account. The Russell 3000 Index represents the three,000 largest publicly traded U.S. corporations, based mostly on market capitalization
(in response to Frank Russell Firm (“Russell”)). Russell 3000 Index corporations characterize about 98% of the whole market
capitalization of the publicly traded U.S. fairness market. As of March 31, 2021, the Russell 3000 Index had a imply market capitalization
of $391.4 billion and a median market capitalization of $2.3 billion. The biggest market capitalization of corporations within the
Russell 3000 Index was $2.1 trillion. Russell determines the composition of the index based mostly solely on market capitalization and may
change its composition at any time. The Russell 3000 Index is reconstituted (rebalanced) yearly in June, with quarterly preliminary
public providing (“IPO”) additions made in March, September and December.

 

MSCI EAFE + Canada Index

MSCI EAFE + Canada Index is a free float-adjusted
market capitalization weighted index that’s designed to measure the fairness market efficiency of developed markets outdoors of
the US—in Europe, Australasia and the Far East, in addition to in Canada. The MSCI EAFE + Canada Index constructs
indices nation by nation, after which assembles the nation indices into regional indices. To assemble an MSCI nation index, the
MSCI EAFE + Canada Index analyzes every inventory in that nation’s market based mostly on its market capitalization, buying and selling quantity
and vital homeowners. The shares are sorted by free float-adjusted market capitalization, and the most important shares (assembly liquidity
and buying and selling quantity necessities) are chosen till roughly 85% of the free float-adjusted market capitalization of every
nation’s market is reached. When mixed because the MSCI EAFE + Canada Index, the regional index captures roughly 85%
of the free float-adjusted market capitalization of sure developed nations all over the world.

 

MSCI All Nation World ex USA Investable
Market Index

The MSCI ACWI (All Nation World Index)
ex USA Investable Market Index (IMI) is a free float-adjusted market capitalization weighted index that’s designed to measure
the fairness market efficiency by capturing giant and mid-capitalization illustration of developed and rising markets. The MSCI
ACWI ex USA IMI consists of sure nation indices comprising developed and rising market nation indices.

 

MSCI All Nation World Index (ACWI)

That is the benchmark index for the World
Equities Account. The MSCI All Nation World Index (ACWI) is a free float-adjusted market capitalization weighted index that’s
designed to measure the fairness market efficiency by capturing giant and mid-capitalization illustration of shares in each developed
and rising markets.

 

Russell 1000 Development Index

That is the benchmark index for the Development
Account. The Russell 1000 Development Index is a subset of the Russell 1000 Index, which represents the highest 1,000 U.S. fairness securities
in market capitalization (in response to Russell). The Russell 1000 Development Index represents these Russell 1000 Index securities with
larger relative forecasted progress charges and worth/ebook ratios. The Russell 1000 Development Index has larger weightings in these sectors
of the market with usually larger relative valuations and

       
Faculty Retirement Equities Fund Prospectus 72

larger progress charges, together with sectors corresponding to know-how and
well being care. As of March 31, 2021, the Russell 1000 Development Index had a imply market capitalization of $701.3 billion and a median
market capitalization of $17.1 billion. The biggest market capitalization of corporations within the Russell 1000 Development Index was $2.1
trillion. Russell determines the composition of the index based mostly on sure elements and may change its composition at any time.

 

Bloomberg U.S. Combination Bond Index

That is the benchmark index for the Core
Bond Account. The Bloomberg U.S. Combination Bond Index covers the U.S. investment-grade fixed-rate bond market, together with authorities
and company securities, company mortgage go by way of securities, asset-backed securities and industrial mortgage-backed securities.
As of March 31, 2021, this index contained roughly 12,053 points. The Bloomberg U.S. Combination Bond Index represents
securities which can be SEC-registered, taxable and dollar-denominated. To be chosen for inclusion within the Bloomberg U.S. Combination
Bond Index, the securities should have a minimal maturity of 1 12 months. Securities should be rated investment-grade or larger utilizing
the center ranking of Moody’s, S&P and Fitch after dropping the best and lowest out there scores. When a ranking from
solely two companies is offered, the decrease ranking is used. When a ranking from just one company is offered, that ranking is used
to find out index eligibility. As of March 31, 2021, the period of the Bloomberg Index was 6.27 years. Period is a measure
of volatility within the worth of a bond in response to a change in prevailing rates of interest, with an extended period indicating extra
volatility.

 

Bloomberg U.S. Treasury Inflation Protected
Securities (TIPS) 1–10 12 months Index

That is the benchmark for the Inflation-Linked
Bond Account. The Bloomberg U.S. Treasury Inflation Protected Securities (TIPS) 1–10 12 months Index measures the return of fixed-income
securities with fixed-rate coupon funds that modify for inflation as measured by the CPI-U. To be chosen for inclusion in
the Bloomberg U.S. Treasury Inflation Protected Securities (TIPS) 1–10 12 months Index, the securities should have a minimal maturity
of 1 12 months and a most maturity of 9.9999 years, with a minimal par quantity excellent of $250 million.

       
Faculty Retirement Equities Fund Prospectus 73

Extra details about funding methods and dangers

 

At occasions, the Accounts might use sure funding
instruments in in search of to boost returns or hedge danger. This part summarizes these instruments and their dangers. For extra info on
the instruments described and their dangers, please see the SAI.

 

Overseas investments

TCIM has intensive expertise managing overseas
investments, together with these not registered or traded in the US. An Account’s overseas portfolio could also be divided
into segments—some designed to trace overseas markets as a complete, and others with shares chosen individually for his or her funding
potential. TCIM invests in a variety of overseas securities in an effort to scale back the dangers and enhance the chance for
returns for the Accounts. The odds of overseas property in every Account change day by day because of new transactions, market
worth fluctuations and adjustments in overseas forex alternate charges.

Investing in overseas securities, particularly
these not issued by overseas governments, includes dangers past these of home investments.
These embrace:

· Adjustments in forex
alternate charges;
· Doable imposition
of market controls or forex alternate controls;
· Doable imposition
of withholding of taxes on dividends and curiosity;
· Doable seizure,
expropriation, or nationalization of property;
· Extra restricted overseas
monetary info or issue in interpretation resulting from overseas rules and
accounting requirements;
· Decrease liquidity
and better volatility in some overseas markets;
· The affect of political,
social, or diplomatic occasions;
· The issue of
evaluating some overseas financial tendencies;
· The likelihood
{that a} overseas authorities might prohibit an issuer from paying principal and curiosity
to traders outdoors the nation; and
· Issue in utilizing
overseas authorized methods to implement monetary or authorized obligations.

Additionally, brokerage commissions and transaction
prices are sometimes larger for overseas investments.

The Accounts might also spend money on nations with
rising markets. The dangers simply listed usually enhance in rising markets. For instance, these nations might have extra unstable
governments than developed nations, and their economies could also be based mostly on just a few industries. Costs of securities from rising
market nations could also be unstable and tough to find out. As well as, overseas traders are topic to quite a lot of particular
restrictions in lots of rising market nations.

The Accounts (apart from the Cash Market Account)
might use forex transactions to assist shield in opposition to future alternate price uncertainties and to make the most of variations in
alternate charges. Adjustments in alternate charges and alternate management rules might enhance or cut back the worth of a security. Foreign money
transactions contain particular dangers and should restrict potential good points resulting from will increase in a forex’s worth. The Accounts do
not intend to invest in overseas forex alternate transactions or ahead forex contracts.

Accounts with overseas investments might also
be topic to market timing danger resulting from “stale worth arbitrage” through which an investor takes benefit of the perceived
distinction in worth from a overseas market closing worth. If not mitigated by way of efficient insurance policies, market timing can intrude
with environment friendly portfolio administration and trigger dilution. The Accounts have in place insurance policies and procedures which can be designed to
cut back the danger of market timing.

Even contemplating the dangers, overseas funding
provides the possibility to enhance an Account’s diversification and long-term efficiency. Overseas investments let the Accounts
participate within the progress of different nations’ economies and monetary markets, which typically supply higher prospects than
in the US. Furthermore, intervals of rising or falling values usually come at totally different occasions in overseas markets than in U.S.
markets, and worth tendencies can transfer in several instructions. When this occurs, overseas investments might cut back an Account’s
volatility, in contrast with that of the U.S. market as a complete, and should improve long-term returns.

 

World financial danger

Nationwide and regional economies and monetary
markets have gotten more and more interconnected, which will increase the chances that circumstances in a single nation, area or market
may adversely affect issuers in a distinct nation, area or market. Adjustments in authorized, political, regulatory, tax and financial
circumstances might trigger fluctuations in markets and securities costs all over the world, which might negatively affect the worth of
an Account’s investments. Main financial or political disruptions, significantly in giant economies, might have international destructive
financial and market repercussions. Moreover, occasions corresponding to conflict, terrorism, pure and environmental disasters and the unfold
of infectious diseases or different public well being emergencies might adversely have an effect on the worldwide financial system and the markets and issuers
through which an Account invests. These occasions might cut back client demand or financial output, lead to market closure, journey restrictions
or quarantines, and customarily

       
Faculty Retirement Equities Fund Prospectus 74

have a big affect on the financial system. These occasions might additionally
impair the knowledge know-how and different operational methods upon which an Account’s service suppliers, together with the
funding adviser, TCIM, rely, and will in any other case disrupt the power of staff of an Account’s service suppliers to
carry out important duties on behalf of the Accounts. Governmental and quasi-governmental authorities and regulators all through the
world have prior to now responded to main financial disruptions with quite a lot of vital fiscal and financial coverage adjustments,
together with however not restricted to, direct capital infusions into corporations, new financial packages and dramatically decrease rates of interest.
An sudden or fast reversal of those insurance policies, or the ineffectiveness of those insurance policies, might enhance volatility in securities
markets, which might adversely have an effect on an Account’s investments.

 

Mounted-income investments

The Core Bond Account, in addition to different fixed-income
Accounts, might now and again buy senior loans. Senior loans (additionally known as senior financial institution loans) are a type of borrowing
or financing beneath which the financial institution or lender holds a authorized declare to the borrower’s property that’s superior or senior to all
different debt obligations of the borrower. Many senior loans, regardless of their collateral protections, current credit score danger comparable
to high-yield securities. The liquidation of the collateral backing a senior mortgage might not fulfill the borrower’s obligation
to the Account within the occasion of nonpayment of scheduled curiosity or principal. Senior loans additionally expose the Account to name danger
and illiquid investments danger. The secondary marketplace for senior loans might be restricted. Trades might be rare and the values for
senior loans might expertise volatility. In some instances, negotiations for the sale or settlement of senior loans might require weeks
to finish, which can impair the Account’s means to boost money to fulfill redemptions, pay dividends, pay bills or
to make the most of different funding alternatives in a well timed method. If an issuer of a senior mortgage prepays or redeems the mortgage
previous to maturity, the Account should reinvest the proceeds in different senior loans or devices which will pay decrease curiosity
charges.

Sure devices through which an Account might
make investments are topic to charges which can be tied to an rate of interest, such because the London Interbank Provided Fee (“LIBOR”).
The UK’s Monetary Conduct Authority, which regulates LIBOR, has introduced that the FCA will not persuade
nor compel banks to submit charges for the calculation of LIBOR after 2021. On March 5, 2021, the FCA introduced that each one LIBOR settings
will both stop to be offered by an, or not be consultant instantly after December 31, 2021, for all 4 LIBOR
settings (British Pound (“GBP”), Euro, Swiss Franc and Japanese Yen) and one-week and two-month U.S. greenback LIBOR settings,
and instantly after June 30, 2023 for the remaining U.S. greenback LIBOR settings, together with three-month U.S. greenback LIBOR. Alternative
charges which have been recognized embrace the Secured In a single day Financing Fee (“SOFR”), which is meant to switch
U.S. greenback LIBOR and measures the price of in a single day borrowings by way of repurchase settlement transactions collateralized with U.S.
Treasury securities, and the Sterling In a single day Index Common Fee (“SONIA”), which is meant to switch GBP LIBOR
and measures the in a single day rate of interest paid by banks for unsecured transactions within the sterling market, though different substitute
charges could possibly be adopted by market individuals. Though the transition course of away from LIBOR has develop into more and more well-defined
upfront of the anticipated discontinuation date, there stays uncertainty relating to the long run utilization of LIBOR and the
nature of any substitute price. Any potential results of the transition away from LIBOR on an Account or on sure devices
through which an Account invests might be tough to establish, and so they might range relying on elements that embrace, however aren’t restricted
to: (i) present fallback or termination provisions in particular person contracts and (ii) whether or not, how, and when {industry} individuals
develop and undertake new reference charges and fallbacks for each legacy and new merchandise and devices. As well as, rate of interest
provisions included in such contracts might have to be renegotiated in contemplation of the transition away from LIBOR. The transition
might also lead to a discount within the worth of sure devices held by an Account or a discount within the effectiveness of associated
Account transactions corresponding to hedges. As well as, an instrument’s transition to a substitute price might lead to variations
within the reported yields of an Account that holds such instrument. The usefulness of LIBOR as a benchmark might deteriorate throughout
the transition interval and, right now, it isn’t doable to foretell the impact of the institution of SOFR, SONIA or another
substitute charges or another reforms to LIBOR. Any such results of the transition away from LIBOR, in addition to different unexpected
results, might lead to losses to an Account.

 

Choices, futures and different derivatives

The Fairness Accounts, the Index Account and
the fairness portion of the Social Alternative Account might every write (promote) name choices, together with coated name choices, and buy
name and put choices, to attempt to improve revenue, cut back portfolio volatility or shield good points within the Account’s portfolio.
Such choices might embrace put and name choices on securities of the categories through which the Account might make investments and on securities indices
composed of such securities. In writing (promoting) name choices, the Account might quit the chance to revenue on a security
if the market worth of the security rises and the choice is exercised and, conversely, the premiums obtained from name choices
bought might not cut back the extent of account losses in periods of market decline. In buying name and put choices, the Account
might buy a name or put choice that expires with no worth as a result of market worth of the security remaining beneath or above,
as relevant, the strike worth of the choice. In such an occasion, the Account would lose the worth of the premium paid for the decision
or put choice however would additionally obtain no financial profit from the acquisition or sale, as relevant, of the security. The Account
can even write (promote) put choices. In writing put choices, the Account might expertise

       
Faculty Retirement Equities Fund Prospectus 75

losses on a security if the market worth of the security declines
and the choice is exercised and, conversely, the premiums obtained from put choices bought might not cut back the extent of Account losses
in periods of market decline.

As well as, the Fairness Accounts, the Index
Account and the fairness portion of the Social Alternative Account might every purchase and promote futures contracts on securities indices composed
of securities of the categories through which it might make investments, and put and name choices on such futures contracts. The Account might use such
futures contracts and choices on futures contracts for hedging or money administration functions,
or to hunt elevated
complete return. Futures contracts allow an Account to realize publicity to teams of securities and thereby
have the potential to earn returns which can be comparable to people who can be earned by direct investments in these securities or
devices.

The Fairness Accounts, the Index Account and
the fairness portion of the Social Alternative Account can every spend money on different derivatives and comparable monetary devices, corresponding to
fairness swaps and contracts for distinction (together with preparations the place the return is linked to a inventory market index) and equity-linked
fixed-income securities, as long as these derivatives and monetary devices are according to the Account’s funding
goal and restrictions, insurance policies and present rules, besides that such devices is not going to be topic to the Social Alternative
Account’s ESG standards.

The Mounted-Earnings Accounts and the fixed-income
portion of the Social Alternative Account can every additionally spend money on derivatives and different comparable monetary devices, corresponding to swaps
and choices on swaps, as long as these derivatives and monetary devices are according to the Account’s funding
goal and restrictions, insurance policies and present rules, besides that such devices is not going to be topic to the Social Alternative
Account’s ESG standards. For instance, these Accounts can spend money on credit score default swaps (a by-product through which the customer
of the swap makes a sequence of funds to the vendor and, in alternate, receives a cost if the underlying credit score instrument (e.g.,
a bond) goes into default) and rate of interest swaps (a by-product through which one get together exchanges a stream of curiosity funds for
one other get together’s stream of money flows).

The Accounts might also use swaps in in search of
to hedge or handle the dangers related to the property held in an Account, for money administration functions or to hunt to extend
complete return.

The dangers related to investing in derivatives
by any of the Accounts could also be totally different and better than the dangers related to straight investing within the underlying securities
and different devices. Derivatives corresponding to swaps are topic to dangers corresponding to liquidity danger, rate of interest danger, market danger and
credit score danger. These derivatives contain the danger of mispricing or improper valuation and the danger that the costs of sure choices,
futures, swaps and different sorts of by-product devices, and their costs, might not correlate completely with the costs or efficiency
of the underlying security, forex, price, index or different asset. Sure derivatives current the danger of default by the opposite
get together to the contract, and a few derivatives are, or might all of the sudden develop into, illiquid. A few of these dangers exist for futures and choices
which can commerce on established markets. Unanticipated adjustments in rates of interest, securities costs or forex alternate charges might
lead to poorer total efficiency of the Account than if it had not entered into derivatives transactions. The potential for
loss because of investing in derivatives, and the pace at which such losses might be realized, are better than investing straight
within the underlying security or different instrument. Adjustments in regulation regarding a registered funding firm’s use of
derivatives might probably restrict or affect the Accounts’ means to spend money on derivatives and adversely have an effect on the worth
or efficiency of derivatives and the Accounts.

In in search of to handle forex danger, these Accounts
additionally might enter into ahead forex contracts and forex swaps and should purchase or promote put and name choices and futures contracts
on foreign currency echange. Unanticipated adjustments in rates of interest, securities costs or forex alternate charges might lead to poorer
total efficiency of an Account than if it had not entered into any by-product transactions.

 

Illiquid investments

The Cash Market Account might make investments as much as 5%
of its complete property, measured on the time of funding, in illiquid investments. The Inventory Account might make investments as much as the lesser
of 10% of its complete property or 15% of its internet property, measured on the time of funding, in illiquid investments. Every of the opposite
Accounts might make investments as much as 15% of their internet property, measured on the time of funding, in illiquid investments. Such an funding
might not be readily marketable, which might make it tough to promote the funding rapidly at honest market worth.

 

Short-term defensive measures

Though no Account is required to take action in
order to attain its funding goal, any Account might, for short-term defensive functions, make investments all of its property in money
and cash market devices or funds. In doing so, an Account could also be profitable in avoiding market losses however might in any other case fail
to attain its funding goal.

 

Agency dedication agreements and “when issued”
securities

Every Account can enter “agency dedication”
agreements to purchase securities at a hard and fast worth or yield on a specified date. An Account would do that if TCIM expects a decline
in rates of interest, believing it might be higher to commit now with a later situation or supply date. The Accounts might also buy
securities on a “when issued” foundation, with the valuation phrases set on the time of the transaction or with such phrases
set someday previous to the settlement date.

       
Faculty Retirement Equities Fund Prospectus 76

Securities lending

Every Account might lend its securities to brokers
and sellers that aren’t affiliated with TIAA and to sure different monetary establishments. All loans will likely be absolutely collateralized
by money, securities issued or assured by the U.S. Authorities (e.g., Treasury securities) or different collateral permitted
by relevant regulation.

Money collateral obtained by an Account will
usually be invested in high-quality short-term devices, or in a number of funds maintained by the securities lending agent
for the aim of investing money collateral. In the course of the time period of the mortgage, an Account will proceed to have funding dangers with
respect to the securities being loaned, in addition to danger with respect to the funding of the money collateral, and an Account might
lose cash because of a decline within the worth of the funding of such collateral.

As with all extension of credit score, nevertheless, there
are dangers of delay in recovering the loaned securities, or in liquidating the collateral, ought to the borrower of securities default,
develop into the topic of chapter proceedings or in any other case be unable to meet its obligations or fail financially. For extra
info, see the SAI.

 

Borrowing

As a short lived measure for extraordinary or
emergency functions, the Inventory, World Equities, Core Bond, Social Alternative and Cash Market Accounts can borrow cash from banks,
not exceeding 10% of the worth of any of the Accounts’ complete property taken at market worth on the time of borrowing. These
Accounts can even borrow as much as 5% of their property’ worth to purchase securities. Every Account can pledge or in any other case encumber
as much as 10% of its complete property taken at market worth on the time of borrowing as collateral.

The Development, Fairness Index and Inflation-Linked
Bond Accounts can even borrow cash from banks, not exceeding 33 ¹/3%
of every of the Accounts’ complete property taken at market worth on the time of borrowing. These Accounts can borrow from different
sources briefly, however in an quantity that’s not more than 5% of the Accounts’ complete property taken at market worth on the
time of borrowing.

If an Account borrows cash, it might leverage
its portfolio by protecting securities that it would in any other case have bought had it not borrowed cash. The dangers of leverage embrace
a better chance that an Account’s accumulation unit worth might change throughout market fluctuations.

Every Account usually pays switch or
withdrawal proceeds utilizing holdings of money (together with money flows into the Accounts) within the Account’s portfolio, or utilizing
the proceeds from gross sales of portfolio securities. Sure Accounts additionally might meet switch or withdrawal requests by way of overdrafts
on the Accounts’ custodian, by borrowing beneath a credit score settlement to which sure Accounts are events or by borrowing from
sure different registered funding corporations suggested by TCIM or Advisors beneath an inter-fund lending program maintained by the
Accounts and such different registered funding corporations pursuant to exemptive reduction granted by the SEC. These strategies listed in
the foregoing sentence are extra possible for use to fulfill giant switch or withdrawal requests or in occasions of harassed market
circumstances.

 

Funding corporations

Every Account (apart from the Cash Market Account)
might make investments as much as 10% of the worth of its property in non-affiliated funding corporations, together with mutual funds and ETFs. The Accounts
might also use ETFs for money administration functions and different functions, together with to realize publicity to sure sectors or securities
which can be represented by possession in ETFs. When an Account invests in one other funding firm, like an ETF, the Account bears
a proportionate share of bills charged by the funding firm through which it invests.

 

Repurchase agreements

The Accounts can use repurchase agreements
to assist handle money balances.

 

Extra details about index suppliers

 

Russell indexes

Supply: London Inventory Alternate Group plc and
its group undertakings (collectively, the “LSE Group”). © LSE Group 2021. FTSE Russell is a buying and selling title of sure
of the LSE Group corporations. “FTSE®,” “Russell®
and “FTSE Russell®” are emblems of the related LSE Group corporations and are utilized by another
LSE Group firm beneath license. All rights within the FTSE Russell indexes or information vest within the related LSE Group firm which owns
the index or the information. Neither LSE Group nor its licensors settle for any legal responsibility for any errors or omissions within the indexes or
information and no get together might depend on any indexes or information contained on this communication. No additional distribution of information from the LSE
Group is permitted with out the related LSE Group firm’s categorical written consent. The LSE Group doesn’t promote, sponsor
or endorse the content material of this communication.

       
Faculty Retirement Equities Fund Prospectus 77

MSCI indexes

Supply: MSCI. The MSCI info might solely
be used on your inner use, might not be reproduced or redisseminated in any type and might not be used as a foundation for or a element
of any monetary devices or merchandise or indices. Not one of the MSCI info is meant to represent funding recommendation or
a advice to make (or chorus from making) any type of funding determination and might not be relied on as such. Historic
information and evaluation shouldn’t be taken as a sign or assure of any future efficiency evaluation, forecast or prediction.
The MSCI info is offered on an “as is” foundation and the person of this info assumes all the danger of any
use fabricated from this info. MSCI, every of its associates and one another particular person concerned in or associated to compiling, computing
or creating any MSCI info (collectively, the “MSCI Events”) expressly disclaims all warranties (together with,
with out limitation, any warranties of originality, accuracy, completeness, timeliness, non-infringement, merchantability and health
for a specific goal) with respect to this info. With out limiting any of the foregoing, in no occasion shall any MSCI Social gathering
have any legal responsibility for any direct, oblique, particular, incidental, punitive, consequential (together with, with out limitation, misplaced
earnings) or another damages. (www.msci.com)

 

Bloomberg indexes

Supply: Bloomberg Index Providers Restricted.
BLOOMBERG® is a trademark and service
mark of Bloomberg Finance L.P. and its associates (collectively “Bloomberg
”). Bloomberg or Bloomberg’s
licensors personal all proprietary rights within the Bloomberg Indices. Bloomberg doesn’t approve or endorse this materials, or assure
the accuracy or completeness of any info herein, or make any guarantee, categorical or implied, as to the outcomes to be obtained
therefrom and, to the utmost extent allowed by regulation, shall not have any legal responsibility or duty for harm or damages arising
in connection therewith.

 

Morningstar indexes

©2021 Morningstar. All Rights Reserved.
The knowledge contained herein: (1) is proprietary to Morningstar and/or its content material suppliers; (2) might not be copied or distributed;
and (3) isn’t warranted to be correct, full or well timed. Neither Morningstar nor its content material suppliers are chargeable for
any damages or losses arising from any use of this info.

       
Faculty Retirement Equities Fund Prospectus 78

Extra
details about CREF is contained in its Assertion of Extra Data (“SAI”), dated Might 1, 2022, which is
integrated by reference into this Prospectus. The Prospectus, SAI and CREF’s annual report and semiannual report, which
are integrated by reference herein, are on file with the SEC. For a free copy of any of those paperwork, to request extra
details about CREF or the Accounts or to make different investor inquiries, write to us at 730 Third Avenue, New York, NY 10017-3206,
Attn: TIAA Imaging Providers, name us at 877-518-9161 or go to our web site at www.tiaa.org.

 

You might also get hold of stories and different details about CREF on the
SEC’S web site at www.sec.gov and copies of this info could also be obtained, upon cost of a duplicating charge, by digital
request on the following e-mail deal with: [email protected]

 

EDGAR Contract Identifier: [_________]

       
Faculty Retirement Equities Fund Prospectus 79

PRELIMINARY STATEMENT OF ADDITIONAL INFORMATION

DATED December 20, 2021

SUBJECT TO COMPLETION

 

The knowledge on this Assertion of Extra Data isn’t full and could also be modified. We might not promote these securities till
the registration assertion filed with the Securities and Alternate Fee is efficient. This Assertion of Extra Data
isn’t a proposal to promote these securities and isn’t soliciting a proposal to purchase these securities in any state the place the supply or
sale isn’t permitted.

 

Assertion of
Extra Data

 

 

Particular person, Group and Tax-Deferred Variable Annuity Contracts

 

Issued by

 

Faculty Retirement Equities Fund

 

April [__], 2022

 

    Tickers by Class    
         
Account Identify   Class R1 Class R2 Class R3 Class
R4
 
Inventory Account   QCSTRX QCSTPX QCSTIX    
World Equities Account   QCGLRX QCGLPX QCGLIX    
Development Account   QCGRRX QCGRPX QCGRIX    
Fairness Index Account   QCEQRX QCEQPX QCEQIX    
Core Bond Account   QCBMRX QCBMPX QCBMIX    
Inflation-Linked Bond Account   QCILRX QCILPX QCILIX    
Social Alternative Account   QCSCRX QCSCPX QCSCIX    
Cash Market Account   QCMMRX QCMMPX QCMMIX    

 

CREF provides the next sorts of contracts:

 

RA (Retirement Annuity)
(Class R1, R2, R3)

GRA (Group Retirement
Annuity) (Class R1, R2, R3)

SRA (Supplemental Retirement
Annuity) (Class R1, R2, R3)

GSRA
(Group Supplemental Retirement Annuity) (Class R1, R2, R3)

Retirement Alternative and
Retirement Alternative Plus Annuity (all Lessons)

 

GA (Group Annuity) and
Institutionally Owned GSRAs (Class R1, R2, R3)

Conventional, Roth IRA
and Rollover (Particular person Retirement Annuity) together with SEP IRAs (Simplified Worker Pension Plans) (Class R1)

Keogh (Class R1)

ATRA (After-Tax Retirement
Annuity) (Class R2)

 

This Assertion of Extra
Data (“SAI”) isn’t a prospectus. The SAI comprises extra info that it is best to think about earlier than investing
in any of the variable annuity contracts or certificates (the “contracts”) of
the Faculty Retirement Equities Fund (“CREF”). The present prospectus dated April 29, 2022 with respect to the
contracts (the “Prospectus”) is offered with out cost upon written or oral request to Faculty Retirement Equities
Fund, 730 Third Avenue, New York, NY 10017-3206, Consideration: Imaging Providers; Phone 877-518-9161. The audited monetary statements
of CREF for the fiscal interval ended December 31, 2021 are integrated into this SAI by reference to CREF’s report on Kind
N-CSR, which comprises the Annual Report back to individuals. Capitalized or outlined phrases used within the Prospectus are integrated into
this SAI.

Desk of contents

 

 

CREF and its operations

 

CREF is in contrast to most different corporations
that provide variable annuities. Normally, variable annuities are issued by insurance coverage corporations by way of segregated asset accounts
referred to as “separate accounts.” The insurance coverage firm performs administration and different companies for the separate account
and, for a charge, assumes sure mortality and expense dangers. In distinction, CREF is legally impartial from any insurance coverage firm,
together with Academics Insurance coverage and Annuity Affiliation (“TIAA”), its companion group. Funding advisory, distribution
and administrative companies are offered for CREF beneath agreements with TIAA or its associates.

CREF is a diversified, open-end administration
funding firm that points variable annuity contracts to residents of all 50 states, the District of Columbia, Puerto Rico,
U.S. territories and overseas nations. Based in 1952, CREF is a nonprofit membership company established in New York State.
CREF is registered with the Securities and Alternate Fee (“SEC”) beneath the Funding Firm Act of 1940, as
amended (the “1940 Act”). CREF can also be topic to the Not-For-Revenue Company Legislation of New York and to regulation
by the New York Division of Monetary Providers (“NYDFS”) and insurance coverage departments (as an insurance coverage firm) in a number of
different jurisdictions.

Among the many bills which CREF deducts
from the online property of every Account every valuation day are bills for funding administration, administration and distribution
companies. TIAA or subsidiaries of TIAA present or organize for the supply of those companies for CREF on an “at value”
foundation by TIAA and its associates. Every Account at the moment points 4 courses of items: Class R1, Class R2, Class R3 and Class R4.
There are variations among the many charges and bills related to every class corresponding to totally different administrative and distribution
bills. Previous to April 24, 2015, CREF provided just one class, which grew to become Class R1 on that date with the addition of Class R2
and R3 on that date. Subsequently, Class R4 was launched on April 29, 2022. Consequently, historic info on this SAI that
refers to Class R1 of an Account displays details about all the Account.

CREF’s estimated annual bills,
which seem in its Prospectus, replicate estimates of the quantities that we at the moment anticipate to deduct to approximate the prices that
CREF will incur from Might 1, 2022 by way of April 30, 2023. Precise bills could also be larger or decrease. After the tip of each quarter,
CREF reconciles the quantity deducted from every class of an Account with the bills the category of the Account really incurred
and, if there’s a distinction, such distinction is added to or deducted from the category of the Account in equal day by day installments
over the remaining days of the quarter, offered that materials variations could also be repaid within the present calendar quarter, in accordance
with accounting rules usually accepted in the US of America (GAAP). CREF’s at value deductions are based mostly
on projections of total bills and the property of every class of an Account, and the scale of any adjusting funds will likely be straight
affected by how totally different the projections are from a category of an Account’s precise property or bills. To the extent that
the associated fee projections considerably differ from an Account’s precise bills, the associated fee deduction charges could also be adjusted.

 

Funding restrictions

 

Pursuant to CREF’s Constitution (the
“Constitution”), not one of the funding funds (the “Accounts”) will spend money on any frequent shares or shares of
any company, joint inventory affiliation or enterprise belief in an quantity in extra of a specified share, to not exceed 10%
(besides with the approval of the NYDFS) of voting shares of such entity, that will trigger such entity to be managed by, or develop into
a subsidiary of, CREF as outlined in New York insurance coverage regulation, though this restriction is not going to apply to funding in an entity
shaped or acquired by CREF for a lawful enterprise goal. This restriction can’t be modified with out an modification to the Constitution.
(The Constitution could also be amended solely by the motion of the CREF Board of Governors and provided that the NYDFS certifies the modification as
lawful and equitable.)

 

2 Assertion of Extra Data  ■  Faculty
Retirement Equities Fund

The next restrictions, not set
forth in CREF’s Constitution, are elementary insurance policies with respect to the Accounts and might not be modified with out the approval
of a majority of the excellent voting securities, as that time period is outlined beneath the 1940 Act, within the affected Account.

Every of the Accounts is assessed
as “diversified” inside the which means of the 1940 Act, as set forth in Restrictions #5 and #6 beneath. Nevertheless, the Fairness
Index Account might develop into non-diversified beneath the 1940 Act with out the approval of Account individuals solely because of
a change in relative market capitalization or index weighting of a number of constituents of its benchmark index. Subsequently, this
Account has a distinct diversification-related coverage than the opposite Accounts as famous in Restrictions #5 and #6 beneath:

1. Not one of the Accounts will situation senior securities (the issuance and gross sales of choices and futures not being thought of the issuance of senior securities);
2. Neither the Inventory nor the Cash Market Account will make quick gross sales, besides when the Account has, by cause of possession of different securities, the correct to acquire securities of equal form and quantity that will likely be held as long as the Account is in a brief place;
3. The Inventory, World Equities, Core Bond, Social Alternative and Cash Market Accounts is not going to borrow cash, besides: (a) they could buy securities on margin, as described in restriction 12 beneath; and (b) from banks as a short lived measure for extraordinary or emergency functions, after which solely in quantities not in extra of 10% of the worth of the Account’s complete property, taken at market worth on the time of borrowing. The Development, Fairness Index and Inflation-Linked Bond Accounts is not going to borrow cash, besides: (a) they could buy securities on margin, as described in restriction 12 beneath; and (b) (i) from banks solely in quantities not in extra of 33¹/3% of the Account’s complete property taken at market worth on the time of borrowing, or (ii) for short-term functions in an quantity not exceeding 5% of the Account’s complete property taken at market worth on the time of borrowing. Cash could also be briefly obtained by way of financial institution borrowing, relatively than by way of the sale of portfolio securities, when such borrowing seems extra engaging for an Account; however, any financial institution borrowings by an Account might, relying on market circumstances, have an effect on funding returns;
4. Not one of the Accounts will underwrite the securities of different corporations, besides as it might be deemed to take action in a sale of restricted portfolio securities;
5. The Fairness Index Account is not going to, with respect to a minimum of 75% of the worth of its complete property, make investments greater than 5% of its complete property within the securities of anybody issuer (together with repurchase agreements with anybody major seller) apart from securities issued or assured by the U.S. Authorities, or its companies or instrumentalities, besides as could also be essential to approximate the composition of its benchmark index.
  With respect to one another Account, the Account is not going to, with respect to a minimum of 75% of the worth of its complete property, make investments greater than 5% of its complete property within the securities of anybody issuer (together with repurchase agreements with anybody major seller) apart from securities issued or assured by the U.S. Authorities, its companies or instrumentalities;
6. The Fairness Index Account is not going to, with respect to a minimum of 75% of the worth of its complete property, buy greater than 10% of the excellent voting securities of an issuer, besides that such restriction shall not apply to securities issued or assured by the U.S. Authorities, its companies or instrumentalities, and besides as could also be essential to approximate the composition of its benchmark index.
  With respect to one another Account, the Account is not going to, with respect to a minimum of 75% of the worth of its complete property, buy greater than 10% of the excellent voting securities of an issuer, besides that such restriction shall not apply to securities issued or assured by the U.S. Authorities, its companies or instrumentalities;
7. Not one of the Accounts will make an funding in an {industry} if after giving impact to that funding the Account’s holding in that {industry} would exceed 25% of the Account’s complete property—this restriction, nevertheless, doesn’t apply to investments in obligations issued or assured by the U.S. Authorities, its companies or instrumentalities, and, with respect to the Cash Market Account, to certificates of deposit, or securities issued or assured by home banks and branches of home banks and financial savings and mortgage associations and financial savings banks; utilities will likely be divided in response to their companies (in order that, for instance, fuel distribution and transmission, electrical and phone every will likely be thought of a separate {industry});
8. The Inventory, World Equities, Development, Fairness Index and Cash Market Accounts is not going to buy actual property or mortgages straight, though the Core Bond, Inflation-Linked Bond and Social Alternative Accounts might buy or maintain actual property or mortgages straight, topic to funding restriction 14 beneath (regarding illiquid investments); the Inventory, World Equities, Development and Social Alternative Accounts might, nevertheless, purchase shares of actual property funding trusts listed on inventory exchanges or reported on the NASDAQ system, and the Accounts might purchase pass-through mortgage securities and securities collateralized by mortgages;
9. Not one of the Accounts will buy commodities or commodities contracts, besides to the extent futures are bought as described herein;
10. Not one of the Accounts will make investments greater than 5% of its complete property within the securities of anybody funding firm; an Account might not personal greater than 3% of an funding firm’s excellent voting securities, and complete holdings of funding firm securities might not exceed 10% of the worth of an Account’s complete property (the SEC workers takes the place that though sure issuers of collateralized mortgage obligations could also be funding corporations, an Account’s means to accumulate collateralized mortgage obligations of such issuers wouldn’t be topic to those restrictions);

 

Faculty Retirement Equities Fund  ■  Assertion of Extra Data 3

11. Not one of the Accounts will make loans, besides: (a) that the Inventory and Cash Market Accounts might make loans of portfolio securities (not exceeding 20% of the worth of their complete property), and the World Equities, Development, Fairness Index, Core Bond, Inflation-Linked Bond and Social Alternative Accounts might make loans of portfolio securities not exceeding 33% of the worth of their complete property, that are collateralized by both money, U.S. Authorities securities, or different means permitted by relevant regulation, equal to a minimum of 102% of the market worth of the loaned securities, or such lesser share as could also be permitted by the NYDFS (to not fall beneath 100% of the market worth of the loaned securities), as reviewed day by day; (b) loans by way of entry into repurchase agreements (the acquisition of publicly traded debt obligations not being thought of within the making of a mortgage); (c) to the extent licensed beneath the contracts, loans to Individuals in quantities not better than the worth of their accumulations, to the extent permitted by regulation; (d) privately positioned debt securities could also be bought; or (e) participation pursuits in loans, and comparable investments, could also be bought;
12. Not one of the Accounts will buy any security on margin (besides that an Account might get hold of such short-term credit score as could also be mandatory for the clearance of purchases and gross sales of portfolio securities);
13. Neither the Inventory nor the Cash Market Account will buy or promote choices or futures besides these listed on home or overseas securities, choices or commodities alternate; nevertheless, the World Equities, Development, Fairness Index, Core Bond, Inflation-Linked Bond and Social Alternative Accounts might buy or promote choices or futures that aren’t listed on an alternate; and
14. Not one of the Accounts will make investments greater than 10% of its complete property in repurchase agreements maturing in additional than seven days, and different illiquid investments, besides that the World Equities, Development, Fairness Index, Core Bond, Inflation-Linked Bond or Social Alternative Accounts might make investments to a better extent in such investments if, and to the extent, permitted by regulation.

Excluding share restrictions
regarding borrowings, if a share restriction is adhered to on the time of funding, a later enhance or lower in share
past the required restrict ensuing from a change of values in portfolio securities is not going to be thought of a violation.

Every Account is taken into account to be diversified
beneath the 1940 Act except in any other case specified herein.

 

Non-principal investments of the Inventory, World
Equities, Development and Fairness Index Accounts

 

The Inventory, World Equities, Development
and Fairness Index Accounts (collectively, the “Fairness and Index Accounts”) might make sure different investments, however not
as principal methods. Along with shares, the Fairness and Index Accounts might maintain different sorts of securities and different investments
with fairness traits, corresponding to convertible bonds, most well-liked inventory, warrants and depository receipts. The Fairness and Index
Accounts might also spend money on short-term debt securities of the identical kind as these held by the Cash Market Account and different kinds
of short-term devices for money administration and different functions. Investing in these devices is meant to assist the Accounts
preserve liquidity, use money balances successfully and make the most of engaging funding alternatives. The Fairness Accounts
additionally might make investments as much as 20% of their property in fixed-income securities. TCIM might also handle money within the Accounts by investing in
cash market funds or different short-term devices.

The Fairness and Index Accounts might also
purchase and promote: (1) put and name choices, together with coated name choices, on securities of the categories they every might spend money on and
on securities indices composed of such securities; (2) futures contracts on securities indices composed of securities of the categories
through which every might make investments; and (3) put and name choices on such futures contracts. They might additionally purchase and promote inventory index futures
contracts. The Fairness and Index Accounts might use such choices and futures contracts for hedging, money administration, and to hunt to
enhance complete return. Futures contracts allow an Account to realize publicity to teams of securities and thereby have the potential
to earn returns which can be comparable to people who can be earned by direct investments in these securities or devices.

The Fairness and Index Accounts might make investments
in non-affiliated funding firm securities, corresponding to exchange-traded funds (“ETFs”). The Fairness and Index Accounts
might use ETFs for money administration functions and different functions, together with to realize publicity to sure sectors or securities that
are represented by possession in ETFs. When an Fairness or Index Account invests in ETFs or different funding corporations, the Account
bears a proportionate share of bills charged by the funding firm through which it invests.

In
in search of to handle forex danger, these Accounts additionally might enter into ahead
forex contracts and forex swaps and should
purchase or promote put and name choices and futures contracts on, and securities listed to, foreign currency echange. Though the Fairness and
Index Accounts might use choices, futures or forex contracts at occasions to hedge sure dangers, it isn’t the intent of those Accounts
to hedge all fairness or forex dangers of the Accounts at any specific time.

The Fairness and Index Accounts might
spend money on different derivatives and different comparable monetary devices, corresponding to fairness swaps, as long as these derivatives and monetary
devices are according to the Account’s funding goal and restrictions, insurance policies and present rules. The
Accounts might use swaps to hedge or handle the dangers related to the property held in an Account, to handle money and to hunt to
enhance complete return.

The Fairness and Index Accounts might
additionally maintain fixed-income securities that they purchase by way of mergers, recapitalizations or different conditions. When TCIM believes
market circumstances are favorable, these Accounts might also spend money on bonds or different debt devices just like these investments
made by the Core Bond Account. The Fairness and Index Accounts might also spend money on debt securities with costs or rates of interest that
are linked to the return of a inventory market index.

For extra info on these and
different investments the Accounts might make the most of, please see the part entitled “Funding Insurance policies and Threat Concerns”
on this SAI.

 

4 Assertion of Extra Data  ■  Faculty
Retirement Equities Fund

Non-principal investments of the Core Bond and Inflation-Linked
Bond Accounts

 

The Core Bond and Inflation-Linked
Bond Accounts (collectively, the Mounted-Earnings Accounts”) might make sure different investments, however not as principal methods.
As an illustration, the Core Bond and Inflation-Linked Bond Accounts might maintain the identical type of cash market and different short-term
devices and debt securities because the Cash Market Account, in addition to different kinds of short-term devices. The Core Bond Account
might also maintain most well-liked inventory and customary inventory by way of conversion of bonds or train of warrants.

The Core Bond and Inflation-Linked
Bond Accounts might also purchase and promote choices, futures contracts and choices on futures (together with choices and futures on overseas
currencies). They might additionally enter into ahead forex contracts and purchase and promote securities listed to foreign currency echange. These
Accounts might use choices and futures as a hedging approach, for money administration functions or to hunt to extend complete return.
These Accounts might also use these strategies to assist handle forex danger.

The Core Bond and Inflation-Linked
Bond Accounts might purchase and promote swaps and choices on swaps. These Accounts might use these devices as hedging strategies, for
money administration functions, and search to extend complete return. These devices do, nevertheless, contain particular dangers. These Accounts
aren’t required to hedge investments.

The Core Bond and Inflation-Linked
Bond Accounts might spend money on interest-only and principal-only mortgage-backed securities. These devices have distinctive traits
and are extra delicate to prepayment danger and extension danger than conventional mortgage-backed securities.

As well as, the Core Bond and
Inflation-Linked Bond Accounts might spend money on non-affiliated funding corporations, corresponding to ETFs, for money administration and different functions,
together with to realize publicity to sure sectors or securities which can be represented by possession in ETFs. When invested in different funding
corporations, these Accounts will bear their proportionate share of bills charged by these funding corporations.

For extra info on these and
different investments the Accounts might make the most of, please see the part entitled “Funding Insurance policies and Threat Concerns”
on this SAI.

 

Funding insurance policies and danger issues

 

Credit score facility

 

Borrowing and Lending Amongst Associates.
Sure Accounts take part in an unsecured revolving credit score facility for short-term or emergency functions, together with, with out
limitation, funding of participant redemptions that in any other case may require the premature disposition of securities. Sure accounts
or sequence of the TIAA-CREF Funds (“TCF”), TIAA-CREF Life Funds (“TCLF”) and TIAA Separate Account VA-1
(“VA-1”), every of which is managed by Academics Advisors, LLC (“Advisors”), an affiliate of CREF’s
funding adviser, TIAA-CREF Funding Administration, LLC (“TCIM”), additionally take part on this credit score facility. An annual
dedication charge for the credit score facility is borne by the taking part funds and Accounts. Curiosity related to any borrowing
beneath the credit score facility will likely be charged to the borrowing Accounts at charges which can be based mostly on a specified price of curiosity.

If an Account borrows cash, it might
leverage its portfolio by protecting securities it would in any other case have needed to promote. Leveraging exposes an Account to particular dangers,
together with better fluctuations in accumulation unit worth (“AUV”) in response to market adjustments.

Moreover, the SEC has granted an
exemptive order (the “Order”) allowing the Accounts to take part in an inter-fund lending facility whereby the
taking part Accounts might straight lend to and borrow cash from one another and sure different registered funding corporations,
as described beneath, for short-term functions (e.g., to fulfill switch or withdrawal requests or to cowl unanticipated money shortfalls)
(the “Inter-Fund Program”). Sure accounts or sequence of TCF, TCLF and VA-1, every of which is managed by Advisors,
an affiliate of TCIM, or an affiliate of Advisors, might also take part within the Inter-Fund Program, and every such account or sequence,
in addition to every Account, is taken into account to be a “Fund” for the aim of the outline of the Inter-Fund Program
on this part.

The Inter-Fund Program is topic to
quite a lot of circumstances, together with, amongst different issues, the necessities that: (i) no Fund might borrow or lend cash by way of the
Inter-Fund Program except it receives a extra favorable rate of interest than is offered from a financial institution or different monetary establishment
for a comparable transaction; (ii) no Fund might borrow on an unsecured foundation by way of the Inter-Fund Program except the Fund’s
excellent borrowings from all sources instantly after the inter-fund borrowing complete 10% or much less of its complete property, offered
that if the borrowing Fund has a secured borrowing excellent from another lender, together with however not restricted to a different Fund,
the inter-fund mortgage should be secured on a minimum of an equal precedence foundation with a minimum of an equal share of collateral to
mortgage worth; (iii) if a Fund’s complete excellent borrowings instantly after an inter-fund borrowing can be better than
10% of its complete property, the Fund might borrow by way of the inter-fund mortgage on a secured foundation solely; (iv) no Fund might lend cash if
the mortgage would trigger its mixture excellent loans by way of the Inter-Fund Program to exceed 15% of its present internet property at
the time of the mortgage; (v) a Fund’s inter-fund loans to anybody Fund shall not exceed 5% of the lending Fund’s internet property;
(vi) the period of inter-fund loans will likely be restricted to the time required to obtain cost for securities bought, however in no occasion
greater than seven days; and (vii) every inter-fund mortgage could also be referred to as on one enterprise day’s discover by a lending Fund and should
be repaid on any day by a borrowing Fund. As well as, a Fund might take part within the Inter-Fund Program provided that and to the extent
that such participation is according to the Fund’s funding goal and funding insurance policies, together with the basic
funding insurance policies on borrowing and lending set forth above, and licensed by its portfolio supervisor(s).

 

Faculty Retirement Equities Fund  ■  Assertion of Extra Data 5

Because of the Accounts’ elementary
funding insurance policies, beneath the Inter-Fund Program, solely sure Accounts are permitted to be debtors (and solely to a lesser extent
than is permitted by the Order), and no Accounts are permitted to be lenders. The Board of Trustees has accepted the Accounts’
participation within the Inter-Fund Program and is chargeable for ongoing oversight of the Inter-Fund Program, as required by the
Order.

The restrictions detailed above and the
different circumstances of the SEC exemptive order allowing the Inter-Fund Program are designed to reduce the dangers related to
the Inter-Fund Program for each the lending Fund and the borrowing Fund. Nevertheless, no borrowing or lending exercise is with out danger.
When a Fund borrows cash from one other Fund, there’s a danger that the mortgage could possibly be referred to as on sooner or later’s discover or not renewed,
through which case the Fund might need to borrow from a financial institution at the next price or take different actions to repay such mortgage if an inter-fund
mortgage isn’t out there from one other Fund. Any delay in reimbursement to a lending Fund might lead to a misplaced funding alternative
or extra prices.

 

Short-term defensive positions

 

The Accounts might take short-term defensive
positions. During times when TCIM believes there are unstable market, financial, political or forex circumstances domestically
or overseas, TCIM might assume, on behalf of an Account, a short lived defensive posture and (1) with out limitation, maintain money and/or
spend money on cash market devices, or (2) prohibit the securities markets through which the Account’s property will likely be invested
by investing these property in securities markets deemed by TCIM to be conservative in gentle of the Account’s funding goal
and insurance policies. Underneath regular circumstances, every Account might make investments a portion of its complete property in money or cash market devices
or funds for money administration functions, pending funding in accordance with the Account’s funding goal and insurance policies
and to fulfill working bills. To the extent that an Account holds money or invests in cash market devices, it might not obtain
its funding goal. Money property are usually not income-generating and would affect an Account’s efficiency.

 

Extra dangers ensuing
from market or different occasions and authorities intervention in monetary markets

 

Nationwide and regional economies and
monetary markets have gotten more and more interconnected, which will increase the chances that circumstances in a single nation, area
or market may adversely affect issuers in a distinct nation, area or market. Adjustments in authorized, political, regulatory, tax
and financial circumstances might trigger fluctuations in markets and securities costs all over the world, which might negatively affect
the worth of an Account’s investments. Main financial or political disruptions, significantly in giant economies, might have
international destructive financial and market repercussions. Occasions corresponding to conflict, terrorism, pure and environmental disasters and the unfold
of infectious diseases or different public well being emergencies might adversely have an effect on the worldwide financial system and the markets and issuers
through which an Account invests. These occasions might cut back client demand or financial output, lead to market closures, journey restrictions
or quarantines, and customarily have a big affect on the financial system. These occasions might additionally impair the knowledge know-how
and different operational methods upon which an Account’s service suppliers, together with TCIM, rely, and will in any other case disrupt
the power of staff of an Account’s service suppliers to carry out important duties on behalf of an Account.

The current unfold of an infectious
respiratory sickness attributable to a novel pressure of coronavirus (generally known as COVID-19) has precipitated volatility, extreme market dislocations
and liquidity constraints in lots of markets, together with markets for the investments the Accounts maintain, and should adversely have an effect on the
Accounts’ investments and operations. The transmission of COVID-19 and efforts to include its unfold have resulted in journey
restrictions and disruptions, closed worldwide borders, enhanced well being screenings at ports of entry and elsewhere, disruption
of and delays in healthcare service preparation and supply, quarantines, occasion and repair cancellations or interruptions, disruptions
to enterprise operations (together with workers furloughs and reductions) and provide chains, and a discount in client and enterprise spending,
in addition to basic concern and uncertainty that has negatively affected the financial system. These disruptions have led to instability
within the market, together with fairness and debt market losses and total volatility, and have negatively affected the roles market.
The affect of COVID-19, and different infectious sickness outbreaks, epidemics or pandemics which will come up sooner or later, contains disruption
of or destructive results on the economies of many countries or all the international financial system, a decline within the monetary well-being and
efficiency of particular person issuers, debtors and sectors and the well being of the markets usually in probably vital and
unexpected methods. As well as, the affect of infectious sickness, corresponding to COVID-19, could also be better in circumstances or geographies
the place the related healthcare system is both much less established or inadequately ready to reply to the importance of the
sickness. This disaster or different public well being crises might exacerbate different pre-existing political, social and financial dangers in sure
nations or globally. The unfold of COVID-19 or different infectious sickness outbreaks, epidemics or pandemics which will come up within the
future might result in vital financial downturns or recessions in economies all through the world.

Governmental and quasi-governmental
authorities and regulators all through the world have prior to now responded to main financial disruptions with quite a lot of vital
fiscal and financial coverage adjustments, together with however not restricted to direct capital infusions into corporations, new financial packages
and dramatically decreasing of rates of interest. For instance, in response to the outbreak of COVID-19, the U.S. Authorities handed the
Coronavirus Assist, Aid and Financial Security Act (“CARES Act”) into regulation in March 2020, which offers roughly
$2.0 trillion in financial reduction to sure companies and people affected by COVID-19. Moreover, the U.S. Authorities
handed the American Rescue Plan Act of 2021 (“American Rescue Plan”) into regulation in March 2021, which offers for about
$1.9 trillion in direct financial reduction provisions to handle the persevering with affect of COVID-19 on the financial system, public well being,
people and companies. The American Rescue Plan builds upon lots of the measures from the CARES Act and subsequent

 

6 Assertion of Extra Data  ■  Faculty
Retirement Equities Fund

COVID-19 associated laws. There can
be no assure that the CARES Act, American Rescue Plan or different financial stimulus payments (inside the US or different affected
nations all through the world) will likely be adequate or could have their meant results to mitigate the destructive impact of COVID-19
on the financial system. As well as, an sudden or fast reversal of such insurance policies might enhance volatility in securities markets,
which might adversely have an effect on an Account’s investments. As mentioned elsewhere on this SAI, in periods when rates of interest
are low (or destructive), an Account’s yield (or complete return) might also be low and fall beneath zero. Very low or destructive curiosity
charges might enlarge rate of interest danger. Altering rates of interest, together with charges that fall beneath zero, might have unpredictable results
on markets, might lead to heightened market volatility and should detract from Account efficiency to the extent an Account is uncovered
to such rates of interest and/or volatility.

Till any coverage or regulatory adjustments
are made, it isn’t doable to foretell the affect such adjustments might have on the worth of portfolio holdings of an Account, the
issuers thereof or TIAA (or their associates). It’s unclear whether or not such requires change will proceed as a result of COVID-19 outbreak,
or whether or not extra or totally different requires change will come up as a result of COVID-19 outbreak. Laws
or regulation might also change the best way through which an Account itself is regulated. Such laws or regulation might restrict or preclude
an Account’s means to attain its funding goal.

Governments or their companies might also
purchase distressed property from monetary establishments and purchase possession pursuits in these establishments. The implications of
authorities possession and disposition of those property are unclear, and such a program might have optimistic or destructive results on the
liquidity, valuation and efficiency of an Account’s portfolio holdings. Moreover, unstable monetary markets can expose
an Account to better market and liquidity danger and potential issue in valuing portfolio holdings, in addition to probably
larger portfolio turnover and associated transaction prices. TCIM will monitor developments and search to handle every Account in a way
according to attaining its funding goal, however there might be no assurance that TCIM will likely be profitable in doing so.

The worth of an Account’s holdings
can also be usually topic to the danger of future native, nationwide, or international financial disturbances based mostly on unknown weaknesses in
the markets through which an Account invests. For instance, any public well being emergency might cut back client demand or financial output,
lead to market closures, journey restrictions or quarantines, and customarily have a big affect on the financial system, which in
flip might adversely have an effect on an Account’s investments. Within the occasion of such a disturbance, issuers of securities held by an
Account might expertise vital declines within the worth of their property and even stop operations, or might obtain authorities help
accompanied by elevated restrictions on their enterprise operations or different authorities intervention. As well as, it isn’t sure
that the U.S. Authorities will intervene in response to a future market disturbance and the impact of any such future intervention
can’t be predicted. It’s tough for issuers to arrange for the affect of future monetary downturns, though corporations can
search to determine and handle future uncertainties by way of danger administration packages.

Traders ought to be conscious that present
uncertainty, volatility and misery in economies, monetary markets, and labor and well being circumstances all over the world considerably
heighten the dangers recognized beneath in comparison with regular circumstances and subsequently topic an Account’s investments and a shareholder’s
funding in an Account to the danger of decreased yield and/or revenue and sudden and substantial losses. The truth that a specific
danger isn’t particularly recognized as being heightened beneath present circumstances doesn’t imply that the danger isn’t better than
beneath regular circumstances.

 

Illiquid investments

 

The Accounts have applied a written
liquidity danger administration program (the “Liquidity Threat Program”), as required by relevant SEC regulation, moderately
designed to evaluate and handle the Accounts’ liquidity danger. Because of its designation as Liquidity Threat Program administrator
by the Board, TCIM can also be chargeable for figuring out the liquidity of investments held by every Account. The Cash Market Account
might make investments as much as 5% of its complete property, measured on the time of funding, in illiquid securities. The Inventory Account might make investments
as much as the lesser of 10% of its complete property or 15% of its internet property, measured on the time of funding, in illiquid investments.
Every of the opposite Accounts might make investments as much as 15% of their internet property, measured on the time of funding, in illiquid investments
which can be property. Illiquid investments are these that aren’t moderately anticipated to be bought or disposed of in present market circumstances
in seven calendar days or much less with out the sale or disposition considerably altering the market worth of the funding.

Investments could also be illiquid due to, amongst different elements, the absence of a buying and selling market or misery in a buying and selling market, making
it tough to worth the investments or get rid of them promptly on the worth at which they’re carried. Investments in illiquid
investments or holding securities which have develop into illiquid pose dangers of potential delays in resale. Limitations on or delays
in resale might have an adversarial impact on the marketability of portfolio securities, and it might be tough for the Accounts to
get rid of illiquid investments promptly or to promote such investments for the worth at which they’re carried, if in any respect, or at
any worth inside the desired timeframe. The Accounts might obtain distressed costs and incur larger transaction prices when promoting
illiquid investments. There may be additionally a danger that unusually excessive redemption requests, together with redemption requests from sure
giant shareholders (corresponding to institutional traders), asset allocation adjustments, or different uncommon market circumstances might make it
tough for an Account to promote investments in adequate time to permit it to fulfill redemptions. Redemption requests might require
an Account to promote illiquid investments at decreased costs or beneath unfavorable circumstances, which can negatively affect an Account’s
efficiency. The rules adopted by the SEC might restrict an Account’s means to take a position
in illiquid investments, which can adversely have an effect on an Account’s efficiency and skill to attain its funding goal.

 

Faculty Retirement Equities Fund  ■  Assertion of Extra Data 7

Restricted securities

 

The Accounts might spend money on restricted
securities. A restricted security is one which has a contractual restriction on resale or can’t be resold publicly till it’s
registered beneath the Securities Act of 1933, as amended (the “1933 Act”). Now and again, restricted securities
might be thought of illiquid beneath the Accounts’ Liquidity Threat Program. Nevertheless, purchases by an Account of securities of
overseas issuers provided and bought outdoors the US might not be thought of illiquid although they’re restricted.

 

Most well-liked inventory

 

The Accounts (apart from the Cash
Market Account) can spend money on most well-liked inventory according to their funding aims. Most well-liked inventory pays dividends at a
specified price and customarily has choice over frequent inventory within the cost of dividends and the liquidation of the issuer’s
property however is junior to the debt securities of the issuer in those self same respects. In contrast to curiosity funds on debt securities,
dividends on most well-liked inventory are usually payable on the discretion of the issuer’s board of administrators, and shareholders
might endure a lack of worth if dividends aren’t paid. Most well-liked shareholders usually don’t have any authorized recourse in opposition to the issuer
if dividends aren’t paid. The market costs of most well-liked shares are topic to adjustments in rates of interest and are extra delicate
to adjustments within the issuer’s creditworthiness than are the costs of debt securities. Underneath unusual circumstances, most well-liked
inventory doesn’t carry voting rights.

 

Small and medium capitalization corporations

 

Some Accounts might spend money on frequent
shares of issuers with small or medium market capitalizations. An funding in frequent shares of issuers with small or medium market
capitalizations usually includes better danger and worth volatility than an funding in frequent shares of bigger, extra established
corporations. This elevated danger could also be as a result of better enterprise dangers of their small or medium measurement, restricted markets and monetary
assets, slender product traces and frequent lack of administration depth. The securities of small and medium capitalization corporations
are sometimes traded within the over-the-counter market, and may not be traded in volumes typical of securities traded on a nationwide
securities alternate. Thus, the securities of small and medium capitalization corporations are more likely to be much less liquid and topic
to extra abrupt or erratic market actions than securities of bigger, extra established corporations.

 

Preliminary public choices (“IPOs”)

 

Some Accounts might make investments a portion
of their property in securities of corporations providing shares in IPOs. IPOs might have a magnified efficiency affect on an Account
with a small asset base. The affect of IPOs on an Account’s efficiency possible will lower because the Account’s asset
measurement will increase. IPOs might not be persistently out there to an Account for investing, significantly because the Account’s asset base
grows. As a result of IPO shares continuously are unstable in worth, an Account might maintain IPO shares for a really quick time period. This
might enhance the portfolio turnover of an Account and should result in elevated bills for the Account, corresponding to commissions and transaction
prices. By promoting shares, an Account might notice taxable good points it can subsequently distribute to shareholders. As well as, the
marketplace for IPO shares might be speculative and/or inactive for prolonged intervals of time. The restricted variety of shares out there for
buying and selling in some IPOs might make it tougher for an Account to purchase or promote vital quantities of shares with out an unfavorable
affect on prevailing costs. Holders of IPO shares (together with an Account) might be affected by substantial dilution within the worth
of the IPO issuer’s shares, by gross sales of extra shares and by focus of management in present administration and principal
shareholders.

The Account’s funding in IPO
shares might embrace the securities of unseasoned corporations (corporations with lower than three years of steady operations), which
current dangers significantly better than frequent shares of extra established corporations. These corporations might have restricted working
histories and their prospects for profitability could also be unsure. These corporations could also be concerned in new and evolving companies
and could also be susceptible to competitors and adjustments in know-how, markets and financial circumstances. These corporations might also be extra
depending on key managers and third events and should have restricted product traces.

 

Choices and futures

 

The Accounts (apart from the Cash
Market Account) might interact in choices (places and calls) and futures methods to the extent permitted by the NYDFS and topic
to SEC and Commodity Futures Buying and selling Fee (“CFTC”) necessities. The Accounts might use choices and futures methods
as hedging strategies, for money administration functions or to hunt to extend complete return. Choices and futures transactions might enhance
an Account’s transaction prices and portfolio turnover price and will likely be initiated solely when according to its funding
goal. Not one of the Accounts are required to hedge any investments.

Choices. Choices-related actions
might embrace: (1) the sale of name choice contracts (together with coated name choices) and the buy of name choice contracts,
together with for the aim of closing a purchase order transaction; (2) shopping for put choice contracts (together with coated put choices) and
promoting put choice contracts, together with to shut out a place acquired by way of the buy
of such choices; and (3) promoting name choice contracts or shopping for put choice contracts on teams of securities and on futures on
teams of securities, and shopping for comparable name choice contracts or promoting put choice contracts, together with to shut out a place
acquired by way of a sale of such choices. This record of options-related actions isn’t meant to be unique, and the Accounts
might interact in different sorts of choices transactions according to their funding aims and insurance policies and relevant regulation.

A name choice is a short-term contract
(usually for 9 months or much less) that provides the purchaser of the choice the correct however not the duty to buy the underlying
security at a hard and fast train worth at any time (American type) or at a set time (European type) prior

 

8 Assertion of Extra Data  ■  Faculty
Retirement Equities Fund

to the expiration of the choice regardless
of the market worth of the security throughout the choice interval. As consideration for the decision choice, the purchaser pays the vendor
a premium, which the vendor retains whether or not or not the choice is exercised. The vendor of a name choice has the duty, upon
the train of the choice by the purchaser, to promote the underlying security on the train worth. Promoting a name choice would
profit the Account if, over the choice interval, the underlying security declines in worth or doesn’t respect above the combination
of the train worth and the premium. Nevertheless, the Account dangers an “alternative loss” of earnings if the underlying
security appreciates above the combination worth of the train worth and the premium.

The Account might shut out a place
acquired by way of promoting a name choice by shopping for a name choice on the identical security with the identical train worth and expiration
date as the decision choice that that they had beforehand bought on that security. Relying on the premium for the decision choice bought
by an Account, the Account will notice a revenue or loss on the transaction on that security.

A put choice is the same short-term
contract that provides the purchaser of the choice the correct to promote the underlying security at a hard and fast train worth at any time
previous to the expiration of the choice whatever the market worth of the security throughout the choice interval. As consideration
for the put choice, an Account, because the purchaser, pays the vendor a premium, which the vendor retains whether or not or not the choice
is exercised. The vendor of a put choice has the duty, upon the train of the choice by the purchaser, to buy the
underlying security on the train worth. The shopping for of a coated put contract limits the draw back publicity for the funding
within the underlying security. The chance of buying a put choice is that the market worth of the underlying inventory prevailing on
the expiration date could also be above the choice’s train worth. In that case, the choice would expire nugatory and all the
premium can be misplaced.

The Account might shut out a place
acquired by way of shopping for a put choice by promoting an an identical put choice on the identical security with the identical train worth and expiration
date because the put choice that that they had beforehand purchased on the security. Relying on the premium for the put choice bought by
the Account, the Account would notice a revenue or loss on the transaction.

Along with choices (each calls
and places) on particular person securities, there are additionally choices on teams of securities, such because the choices on the Customary & Poor’s
100 Index, that are traded on the Chicago Board Choices Alternate. There are additionally choices on the futures of teams of securities
such because the Customary & Poor’s 500 Index and the New York Inventory Alternate Composite Index. The promoting of such calls can
be utilized in anticipation of, or in, a basic market or market sector decline which will adversely have an effect on the market worth of an Account’s
portfolio of securities. To the extent that an Account’s portfolio of securities adjustments in worth in correlation with a given
inventory index, the sale of name choices on the futures of that index would considerably cut back the danger to the portfolio of a market
decline, and, by so doing, present a substitute for the liquidation of securities positions within the portfolio with resultant transaction
prices. A danger in all choices, significantly the comparatively new choices on teams of securities and on the futures on teams of securities,
is a doable lack of liquidity. This will likely be a serious consideration of TCIM earlier than it offers in any choice on behalf of an Account.

There may be one other danger in connection
with promoting a name choice on a bunch of securities or on the futures of teams of securities. This arises due to the imperfect
correlation between actions within the worth of the decision choice on a specific group of securities and the worth of the underlying
securities held within the portfolio. In contrast to a coated name on a person security, the place a big motion on the upside for the
name choice will likely be offset by the same transfer on the underlying inventory, a transfer within the worth of a name choice on a bunch of securities
might not be offset by the same transfer within the worth of securities held as a result of distinction within the composition of the actual
group and the portfolio itself.

Futures. To the extent permitted
by relevant regulatory authorities, the Accounts (apart from the Cash Market Account) might buy and promote futures contracts
on securities or different devices, or on teams or indices of securities or different devices. The aim of hedging strategies
utilizing monetary futures is to guard the principal worth of the Account in opposition to adversarial adjustments available in the market worth of securities
or devices in its portfolio, and to acquire higher returns on investments than out there within the money market. Since these are
hedging strategies, the good points or losses on the futures contract usually will likely be offset by losses or good points, respectively, on the
hedged funding. Futures contracts additionally could also be offset previous to the long run date by executing an reverse futures contract transaction.

A futures contract on an funding
is a binding contractual dedication which, if held to maturity, usually will lead to an obligation to make or settle for supply,
throughout a specific future month, of the securities or instrument underlying the contract.

By buying a futures contract—assuming
a “lengthy” place—TCIM will legally obligate an Account to just accept the long run supply of the underlying security
or instrument and pay the agreed worth. By promoting a futures contract—assuming a “quick” place—TCIM
will legally obligate an Account to make the long run supply of the security or instrument in opposition to cost of the agreed worth.

Positions taken within the futures markets
aren’t usually held to maturity, however are as an alternative liquidated by way of offsetting transactions which will lead to a revenue or a
loss. Whereas futures positions taken by an Account normally will likely be liquidated on this method, an Account might as an alternative make or take
supply of the underlying securities or devices each time it seems economically advantageous to an Account to take action. A clearing
company related to the alternate on which futures are traded assumes duty for closing out positions and ensures
that the sale and buy obligations will likely be carried out with regard to all positions that stay open on the termination of the
contract.

A inventory index futures contract, in contrast to
a contract on a selected security, doesn’t present for the bodily supply of securities, however merely offers for earnings and
losses ensuing from adjustments available in the market worth of the contract to be credited or debited on the shut of every buying and selling day to
the respective accounts of the events to the contract. On the contract’s expiration date, a last money settlement happens

 

Faculty Retirement Equities Fund  ■  Assertion of Extra Data 9

and the futures positions are closed out.
Adjustments available in the market worth of a specific inventory index futures contract replicate adjustments within the specified index of fairness securities
on which the long run relies.

Inventory index futures could also be used to
hedge the fairness investments of the Inventory, World Equities, Development, Fairness Index, or Social Alternative Accounts with regard to market
(systematic) danger (involving the market’s evaluation of total financial prospects), as distinguished from inventory particular
danger (involving the market’s analysis of the deserves of the issuer of a specific security). By establishing an acceptable
“quick” place in inventory index futures, TCIM might search to guard the worth of portfolio securities held by the Inventory,
World Equities, Development, Fairness Index and Social Alternative Accounts in opposition to an total decline available in the market for fairness securities.
Alternatively, in anticipation of a usually rising market, TCIM can search to keep away from dropping the good thing about apparently low present
costs by establishing a “lengthy” place in inventory index futures and later liquidating that place as specific fairness
securities are in truth acquired. To the extent that these hedging methods are profitable, the Account will likely be affected to a
lesser diploma by adversarial total market worth actions, unrelated to the deserves of particular portfolio fairness securities, than
would in any other case be the case.

In contrast to the acquisition or sale of a security,
no worth is paid or obtained by an Account upon the acquisition or sale of a futures contract. Initially, an Account will likely be required
to deposit in a segregated account with the dealer (futures fee service provider) carrying the futures account on behalf of the
Account an amount of money, U.S. Treasury securities, or different permissible property equal to a share of the contract quantity as
decided by the clearinghouse. This quantity is called “preliminary margin.” The character of preliminary margin in futures
transactions is totally different from that of margin in security transactions in that futures contract margin doesn’t contain the borrowing
of funds by the client to finance the transactions. Slightly, the preliminary margin is within the nature of a efficiency bond or good
religion deposit on the contract that’s returned to an Account upon termination of the futures contract assuming all contractual
obligations have been happy. Subsequent funds to and from the dealer, referred to as “variation margin,” will likely be made
each day as the worth of the underlying inventory index fluctuates, making the lengthy and quick positions within the futures contract
roughly beneficial, a course of generally known as “marking to the market.”

For instance, when an Account has bought
a inventory index futures contract and the worth of the underlying inventory index has risen, that place could have elevated in worth,
and the Account will obtain from the dealer a variation margin cost equal to that enhance in worth. Conversely, the place an Account
has bought a inventory index futures contract and the worth of the underlying inventory index has declined, the place can be much less
beneficial and the Account can be required to make a variation margin cost to the dealer. At any time previous to expiration of
the futures contract, the Account might elect to shut the place by taking an reverse place that can function to terminate
the Account’s place within the futures contract. A last dedication of variation margin is then made, more money is
required to be paid by or launched to the Account, and the Account realizes a loss or a achieve. The dangers inherent within the buy
or sale of inventory index futures are, in a basic sense, just like the dangers inherent within the buy or sale of bond index futures.
A bond index assigns relative values to the bonds included within the index. The index fluctuates with adjustments available in the market values
of these bonds included, and the events to the bond index futures contract comply with take or make supply of an amount of money
equal to a specified greenback quantity occasions the distinction between the index worth on the shut of the final buying and selling day of the contract
and the worth at which the index future was initially written. No bodily supply of the underlying bonds within the index is made.

There are a number of dangers in connection
with using a futures contract as a hedging machine. One danger arises due to the imperfect correlation between actions
within the costs of the futures contracts and actions within the securities or devices which can be the topic of the hedge. TCIM,
on behalf of an Account, will try to scale back this danger by participating in futures transactions, to the extent doable, the place, in
TCIM’s judgment, there’s a vital correlation between adjustments in the costs of the futures contracts and the costs
of the Account’s portfolio securities or devices sought to be hedged.

Profitable use of futures contracts
for hedging functions is also topic to TCIM’s means to accurately predict actions within the course of the market. For
instance, it’s doable that the place an Account has bought futures to hedge its portfolio in opposition to declines available in the market, the index
on which the futures are written might advance and the values of securities or devices held within the Account’s portfolio
might decline. If this occurred, the Account would lose cash on the futures and likewise expertise a decline in worth in its portfolio
investments. Nevertheless, TCIM believes that over time the worth of an Account’s portfolio will have a tendency to maneuver in the identical course
because the market indices which can be meant to correlate to the worth actions of the portfolio securities or devices sought to
be hedged.

It additionally is feasible that, for instance,
if an Account has hedged in opposition to the opportunity of a decline available in the market adversely affecting shares held in its portfolio and
inventory costs elevated as an alternative, the Account will lose half or the entire advantage of elevated worth of these shares that it has
hedged as a result of it can have offsetting losses in its futures positions. As well as, in such conditions, if an Account has inadequate
money, it might need to promote securities or devices to fulfill day by day variation margin necessities. Such gross sales could also be, however is not going to
essentially be, at elevated costs that replicate the rising market. The Account might need to promote securities or devices at a
time when it might be disadvantageous to do so.

Along with the chance that
there could also be an imperfect correlation, or no correlation in any respect, between actions within the futures contracts and the portion of
the portfolio being hedged, the costs of futures contracts might not correlate completely with actions within the underlying security
or instrument resulting from sure market distortions. First, all transactions within the futures market are topic to margin deposit and
upkeep necessities. Slightly than assembly extra margin deposit necessities, traders might shut futures contracts by way of
offsetting transactions that would distort the conventional relationship between the index and futures markets. Second, the margin necessities
within the futures market are much less onerous than margin necessities within the securities market, and consequently the futures market might
appeal to extra speculators than the securities market does. Elevated participation by speculators within the futures market additionally

 

10 Assertion of Extra Data  ■  Faculty
Retirement Equities Fund

might trigger short-term worth distortions.
As a consequence of the opportunity of worth distortion within the futures market and likewise due to the imperfect correlation between actions
within the futures contracts and the portion of the portfolio being hedged, even an accurate forecast of basic market tendencies by TCIM
nonetheless might not lead to a profitable hedging transaction over a really quick time interval.

The Accounts (apart from the Cash
Market Account) might also use futures contracts, choices on futures contracts and swaps as hedging strategies, to handle their money
movement extra successfully and to hunt to extend complete return. These devices will, nevertheless, solely be utilized in accordance with sure
CFTC exemptive provisions that allow TCIM to say an exclusion from the definition of a “commodity pool operator”
beneath the Commodity Alternate Act with regard to CREF. TCIM has claimed an exclusion from the definition of the time period “commodity
pool operator” beneath the Commodity Alternate Act and the rules thereunder and, subsequently, isn’t at the moment topic to
registration or regulation as a commodity pool operator with regard to the Accounts. If the exclusion turns into unavailable, an Account
might incur extra bills.

 

Agency dedication agreements and buy of “when-issued”
securities

 

The Accounts can enter into agency dedication
agreements for the acquisition of securities on a specified future date. Thus, an Account might buy, for instance, problems with fixed-income
devices on a “when-issued” foundation, whereby the cost obligation, or yield to maturity, or coupon price on the devices
might not be mounted on the time of the transaction. As well as, the Accounts might spend money on asset-backed securities on a delayed supply
foundation. This reduces an Account’s danger of early reimbursement of principal, however exposes the Accounts to some extra danger that
the transaction is not going to be consummated.

When an Account enters right into a agency
dedication settlement, legal responsibility for the acquisition worth—and the rights and dangers of possession of the securities—accrues
to the Account on the time it turns into obligated to buy such securities, though supply and cost happen at a later date.
Accordingly, if the market worth of the security ought to decline, the impact of the settlement can be to obligate the Account to
buy the security at a worth above the present market worth on the date of supply and cost. As well as, sure guidelines
of the Monetary Trade Regulatory Authority (“FINRA”) embrace necessary margin necessities that can require the
Accounts to put up collateral in reference to their to-be-announced (“TBA”) transactions. There is no such thing as a comparable requirement
relevant to the Accounts’ TBA counterparties. The required collateralization of TBA trades might enhance the price of TBA
transactions to the Accounts and impose added operational complexity. In the course of the time the Account is obligated to buy such
securities, will probably be required to segregate property beneath present regulatory necessities. See “Segregated accounts”
beneath.

Participatory Notes. A few of
the Accounts might spend money on participatory notes issued by banks or broker-dealers which can be designed to duplicate the efficiency
of sure non-U.S. corporations traded on a non-U.S. alternate. Participatory notes are a sort of equity-linked by-product which usually
are traded over-the-counter. Despite the fact that a participatory notice is meant to replicate the efficiency of the underlying fairness securities
on a one-to-one foundation in order that traders is not going to usually achieve or lose extra in absolute phrases
than they might have made or misplaced had they invested within the underlying securities straight, the efficiency outcomes of participatory
notes is not going to replicate precisely the efficiency of the issuers or markets that the participatory notes search to duplicate resulting from
transaction prices and different bills. Investments in participatory notes contain dangers usually related to a direct funding
within the underlying securities. As well as, participatory notes are topic to counterparty danger, which is the danger that the broker-dealer
or financial institution that points the notes is not going to fulfill its contractual obligation to finish the transaction with an Account. Participatory
notes represent basic unsecured, unsubordinated contractual obligations of the banks or broker-dealers that situation them, and
an Account is counting on the creditworthiness of such banks or broker-dealers and has no rights beneath a participatory notice in opposition to
the issuers of the securities underlying such participatory notes. There might be no assurance that the buying and selling worth or worth
of participatory notes will equal the worth of the underlying fairness securities they search to replicate.

Grasp Restricted Partnerships.
Among the Accounts might spend money on fairness securities issued by grasp restricted partnerships (“MLPs”). An MLP is an entity,
mostly a restricted partnership that’s taxed as a partnership, publicly traded and listed on a nationwide securities alternate.
Holders of frequent items of MLPs usually have restricted management and restricted voting rights as in comparison with holders of a company’s
frequent shares. Most well-liked items issued by MLPs aren’t usually listed or traded on an alternate. Holders of most well-liked items can
be entitled to a variety of voting and different rights. MLPs are restricted by the Subchapter M of Chapter 1 of the Inside Income
Code of 1986, as amended (the “Code”) to solely apply to enterprises that interact in sure companies, largely pertaining
to using pure assets, corresponding to petroleum and pure fuel extraction and transportation, though another enterprises
might also qualify as MLPs.

There are particular tax dangers related
with investments in MLPs. The profit derived from an funding in an MLP is essentially depending on the MLP being handled as a partnership
for federal revenue tax functions. A change to present tax regulation, or a change within the underlying enterprise mixture of a given MLP, might
lead to an MLP being handled as a company for federal revenue tax functions. If an MLP had been handled as a company, the MLP
can be required to pay federal revenue tax on its taxable revenue. This would scale back the amount of money out there for distribution
by the MLP, which might lead to a discount of the worth of an Account’s funding within the MLP and decrease revenue to the
Account. Moreover, since MLPs usually conduct enterprise in a number of states, an Account could also be topic to revenue or franchise
tax in every of the states through which the partnership does enterprise. The extra value of making ready and submitting the tax returns and
paying the associated taxes might adversely affect an Account’s return on its funding in MLPs.

Investments held by MLPs could also be comparatively
illiquid, limiting the MLPs’ means to range their portfolios promptly in response to adjustments in financial or different circumstances,
and MLPs might have restricted monetary assets. Securities of MLPs might commerce occasionally and in restricted

 

Faculty Retirement Equities Fund  ■  Assertion of Extra Data 11

quantity, and so they could also be topic to extra
abrupt or erratic worth actions than frequent shares of bigger or extra broadly-based corporations. An Account’s funding in
MLPs additionally topics the Account to the dangers related to the particular {industry} or industries through which the MLP invests. MLPs
are usually thought of rate of interest delicate investments, and in periods of rate of interest volatility, might not present engaging
returns.

Royalty Belief. Among the Accounts
might spend money on publicly-traded royalty trusts. Royalty trusts are income-oriented fairness investments that not directly, by way of the
possession of belief items, present traders (referred to as “unit holders”) with publicity to vitality sector property corresponding to coal,
oil and pure fuel. A royalty belief usually acquires an curiosity in pure useful resource corporations or chemical corporations and distributes
the revenue it receives to the traders of the royalty belief. A sustained decline in demand for crude oil, pure fuel and refined
petroleum merchandise might adversely have an effect on revenue and royalty belief revenues and money flows. Elements that would result in a lower
in market demand embrace a recession or different adversarial financial circumstances, a rise available in the market worth of the underlying commodity,
larger taxes or different regulatory actions that enhance prices, or a shift in client demand for such merchandise. A rising curiosity
price setting might adversely affect the efficiency of royalty trusts. Rising rates of interest might restrict the capital appreciation
of royalty trusts due to the elevated availability of other investments at extra aggressive yields.

Personal Investments in Public Fairness.
Among the Accounts might buy fairness securities in a personal placement which can be issued by issuers who’ve excellent, publicly-traded
fairness securities of the identical class (“non-public investments in public fairness” or “PIPES”). Shares in PIPES
usually aren’t registered with the SEC till after a sure time interval from the date the non-public sale is accomplished. This restricted
interval can final many months. Till the general public registration course of is accomplished, PIPES are restricted as to resale and an Account
can not freely commerce the securities. Typically, such restrictions trigger the PIPES to be illiquid throughout this time. PIPES might include
provisions that the issuer pays specified monetary penalties to the holder if the issuer doesn’t publicly register the restricted
fairness securities inside a specified time period, however there is no such thing as a assurance that the restricted fairness securities will likely be publicly
registered, or that the registration will stay in impact.

Particular Function Acquisition Corporations.
Among the Accounts might spend money on fairness securities of particular goal acquisition corporations (“SPACs”). Additionally recognized
as a “clean examine firm,” a SPAC is an organization with no industrial operations that’s shaped solely to boost capital
from traders for the aim of buying a number of present non-public corporations. SPACs usually have pre-determined time frames
to make an acquisition (usually two years) or the SPAC will liquidate. An Account might buy items or shares of SPACs that
have accomplished an IPO on a secondary market, throughout a SPAC’s IPO or by way of a PIPES providing. See “Personal Investments
in Public Fairness” above for details about PIPES choices.

Except and till an acquisition is
accomplished, a SPAC usually invests its property in U.S. Authorities securities, cash market securities and money. As a result of SPACs have
no working historical past or ongoing enterprise apart from in search of acquisitions, the worth of their securities is especially dependent
on the power of the entity’s administration to determine and full a worthwhile acquisition. There is no such thing as a assure that the
SPACs through which an Account invests will full an acquisition or that any acquisitions which can be accomplished will likely be worthwhile.
Public stockholders of SPACs corresponding to an Account might not be afforded a significant alternative to vote on a proposed preliminary enterprise
mixture as a result of sure stockholders, together with stockholders affiliated with the administration of the SPAC, might have adequate
voting energy, and a monetary incentive, to approve such a transaction with out help from public stockholders. Consequently, a
SPAC might full a enterprise mixture although a majority of its public stockholders don’t help such a mix. Some
SPACs might pursue acquisitions solely inside sure industries or areas, which can enhance the volatility of their costs.

The non-public corporations that SPACs purchase
are sometimes unseasoned and lack a buying and selling historical past, a monitor file of reporting to traders and broadly out there analysis protection.
Securities of SPAC-derived corporations are thus topic to excessive worth volatility and speculative buying and selling. As well as, the possession
of many SPAC-derived corporations usually contains giant holdings by enterprise capital and personal fairness traders who search to promote their
shares within the public market within the months following a enterprise mixture transaction when shares restricted by lock-up are launched,
inflicting even better worth volatility and doable downward stress throughout the time that locked-up shares are launched.

 

Debt devices usually

 

A debt instrument held by an Account
will likely be affected by basic adjustments in rates of interest that can, in flip, lead to will increase or decreases available in the market worth
of the instrument. The market worth of non-convertible debt devices (significantly fixed-income devices) in an Account’s
portfolio might be anticipated to range inversely to adjustments in prevailing rates of interest. In intervals of declining rates of interest, the
yield of an Account holding a big quantity of debt devices will are usually considerably larger than prevailing market charges,
and in intervals of rising rates of interest, the Account’s yield will are usually considerably decrease. As well as, when rates of interest
are falling, cash obtained by such an Account from the continual issuance of its items will possible be invested in portfolio
devices producing decrease yields than the steadiness of its portfolio, thereby decreasing the Account’s present yield. In intervals
of rising rates of interest, the alternative consequence might be anticipated to happen. During times of declining rates of interest, as a result of the
rates of interest on adjustable price securities usually reset downward, their market worth is unlikely to rise to the identical extent
as the worth of comparable fixed-rate securities. Rate of interest danger is mostly heightened in periods when prevailing curiosity
charges are low or destructive, and through such intervals, an Account might not be capable of preserve a optimistic yield or yields on par with
historic ranges. Particularly, with respect to the Cash Market Account, low or destructive rates of interest might result in destructive
yields. Adjustments in rates of interest, amongst different elements, might

 

12 Assertion of Extra Data  ■  Faculty
Retirement Equities Fund

additionally adversely have an effect on the liquidity of
an Account’s fixed-income investments. The dangers related to rising rates of interest are heightened given the current low
rate of interest setting.

The marketplace for fixed-income devices
has persistently grown over the previous three a long time whereas the expansion of capability for conventional sellers to interact in fixed-income
buying and selling has not saved tempo and in some instances has decreased. Consequently, seller inventories of sure sorts of fixed-income devices,
and the power of sellers to “make markets” in such devices, are at or close to historic lows in relation to market
measurement. As a result of sellers appearing as market makers present stability to a market, the numerous discount in seller inventories might
probably result in decreased liquidity and elevated volatility within the fixed-income markets. Such points could also be exacerbated throughout
intervals of financial uncertainty or market volatility.

Scores as Funding Standards.
Nationally Acknowledged Statistical Scores Group (“NRSRO”) scores characterize the opinions of these organizations
as to the standard of securities that they price. Though these scores, that are relative and subjective and aren’t absolute
requirements of high quality, are utilized by TCIM as considered one of many standards for the number of portfolio securities on behalf of the Accounts,
TCIM additionally depends upon its personal evaluation to judge potential investments.

Subsequent to its buy by an Account,
a difficulty of securities might stop to be rated or its ranking could also be decreased beneath the minimal required for buy by the Account.
These occasions is not going to require the sale of the securities by an Account. Nevertheless, TCIM will think about the occasion in its dedication
of whether or not the Account ought to proceed to carry the securities. To the extent {that a} NRSRO’s ranking adjustments because of
a change within the NRSRO or its ranking system, TCIM will try to make use of comparable scores as requirements for his or her investments in accordance
with their funding aims and insurance policies.

Sure Funding-Grade Debt Obligations.
Though obligations rated Baa by Moody’s or BBB by S&P are thought of investment-grade, they could be considered as being
topic to better dangers than different investment-grade obligations. Obligations rated Baa by Moody’s are thought of medium-grade
obligations that lack excellent funding traits and have speculative traits as properly, whereas obligations rated
BBB by S&P are thought to be having solely an satisfactory capability to pay principal and curiosity.

U.S. Authorities Debt Securities.
The Accounts might spend money on U.S. Authorities securities. These embrace: debt obligations of various maturities issued by the U.S.
Treasury or issued or assured by the Federal Housing Administration, Farmers Dwelling Administration, Export-Import Financial institution of the
United States, Small Enterprise Administration, Authorities Nationwide Mortgage Affiliation (“GNMA”), Basic Providers Administration,
any of the assorted establishments that beforehand had been, or at the moment are, a part of the Farm Credit score System, together with the Nationwide
Financial institution for Cooperatives, the Farm Credit score Banks and the Banks for Cooperatives, Federal Dwelling Mortgage Banks, Federal Dwelling Mortgage Mortgage
Company (“FHLMC”), Federal Intermediate Credit score Banks, Federal Land Banks, Federal Nationwide Mortgage Affiliation
(“FNMA”), Maritime Administration, Tennessee Valley Authority and District of Columbia Armory Board. Direct obligations
of the U.S. Treasury embrace quite a lot of securities that differ of their rates of interest, maturities and situation dates. Sure of
the foregoing U.S. Authorities securities are supported by the complete religion and credit score of the US. These U.S. Authorities
securities current restricted credit score danger in comparison with different sorts of debt securities however aren’t freed from danger. Different U.S. Authorities
securities are supported by the correct of the company or instrumentality to borrow an quantity restricted to a selected line of credit score
from the U.S. Treasury or by the discretionary authority of the U.S. Authorities or GNMA to buy monetary obligations of the
company or instrumentality, that are thus topic to a better quantity of credit score danger than these supported by the complete religion and
credit score of the US. Nonetheless different U.S. Authorities securities are solely supported by the credit score of the issuing company or instrumentality,
that are topic to better credit score danger as in comparison with different U.S. Authorities securities. The utmost potential legal responsibility of the
issuers of some U.S. Authorities securities might exceed then present assets, together with any authorized proper to help from the U.S.
Treasury. As a result of the U.S. Authorities isn’t obligated by regulation to help an company or instrumentality that it sponsors, or such
company’s or instrumentality’s securities, an Account solely invests in U.S. Authorities securities when TCIM determines
that the credit score danger related to the duty is appropriate for the Account.

It’s doable that issuers of U.S.
Authorities securities is not going to have the funds to fulfill their cost obligations sooner or later. FHLMC and FNMA have been working
beneath conservatorship, with the Federal Housing Finance Administration (“FHFA”) appearing as their conservator, since
September 2008. The FHFA and U.S. Presidential administration have made public statements relating to plans to think about ending the
conservatorships. Underneath a letter settlement between the FHFA (in its function as conservator) and the U.S. Treasury, the FHFA is prohibited
from eradicating its conservatorship of every enterprise till all litigation relating to the conservatorship has ended and every enterprise
has retained fairness capital ranges equal to 3 % of their complete property. It’s unclear how lengthy will probably be earlier than the FHFA
will be capable of take away its conservatorship of the enterprises beneath this letter settlement. Within the occasion that FHLMC or FNMA are
taken out of conservatorship, it’s unclear how their respective capital construction can be constructed and what affect, if any,
there can be on FHLMC’s or FNMA’s creditworthiness and ensures of sure mortgage-backed securities. The entities
are dependent upon the continued help of the U.S. Division of the Treasury and FHFA to be able to proceed their enterprise operations.
These elements, amongst others, might have an effect on the long run standing and function of FHLMC and FNMA and the worth of their securities and the
securities which they assure.

Uncertainty relating to the standing of
negotiations within the U.S. Congress to extend the statutory debt ceiling might enhance the danger that the U.S. Authorities might default
on funds on sure U.S. Authorities securities, together with these held by the Accounts. On one event, the long-term credit score
ranking of the US was downgraded by a minimum of one main ranking company because of disagreements inside the U.S. Authorities
over elevating the debt ceiling to repay excellent obligations. Related conditions sooner or later might lead to larger curiosity
charges, decrease costs of U.S. Treasury securities and will enhance the prices of varied sorts of debt, which can adversely have an effect on
the Accounts.

 

Faculty Retirement Equities Fund  ■  Assertion of Extra Data 13

Dangers of Decrease-Rated, Decrease-High quality
Debt Devices.
Decrease-rated debt securities (i.e., these rated Ba or decrease by Moody’s or BB or decrease by S&P) are
typically known as “high-yield” or “junk” bonds. Every of the Accounts (aside from the Cash Market
Account) might spend money on lower-rated debt securities. These securities are thought of, on steadiness, as predominantly speculative with
respect to capability to pay curiosity and repay principal in accordance with the phrases of the duty and can usually contain
extra credit score danger than securities within the higher-rated classes. Reliance on credit score scores entails better dangers with regard to
lower-rated securities than it does with regard to higher-rated securities, and TCIM’s success is extra dependent upon its
personal credit score evaluation with regard to lower-rated securities than is the case with regard to higher-rated securities. The market values
of such securities are likely to replicate particular person company developments to a better extent than do higher-rated securities, which
react primarily to fluctuations within the basic stage of rates of interest. Such lower-rated securities additionally are usually extra delicate
to financial circumstances than are higher-rated securities. Antagonistic publicity and investor perceptions, whether or not or not based mostly on elementary
evaluation, relating to lower-rated bonds might depress costs and liquidity for such securities. To the extent an Account invests in
these securities, elements adversely affecting the market worth of lower-rated securities will adversely have an effect on the Account’s
AUV. As well as, an Account might incur extra bills to the extent it’s required to search restoration upon a default in
the cost of principal or curiosity on its portfolio holdings.

An Account might have issue disposing
of sure lower-rated securities for which there’s a skinny buying and selling market. As a result of not all sellers preserve markets in lower-rated
securities, there is no such thing as a established retail secondary market for a lot of of those securities, and TCIM anticipates that they might
be bought solely to a restricted variety of sellers or institutional traders. To the extent there’s a secondary buying and selling marketplace for lower-rated
securities, it’s usually not as liquid as that for higher-rated securities. The dearth of a liquid secondary marketplace for sure
securities might make it tougher for the Accounts to acquire correct market quotations for functions of valuing their property.
Market quotations are usually out there on many lower-rated points solely from a restricted variety of sellers and should not essentially
characterize agency bids of such sellers or costs for precise gross sales. When market quotations aren’t available, lower-rated securities
should be honest valued utilizing procedures accepted by the Board of Trustees. This valuation is tougher and judgment performs a better
function in such valuation when there are much less dependable goal information out there.

Any debt instrument, irrespective of its
preliminary ranking, might, after buy by an Account, have its ranking lowered as a result of deterioration of the issuer’s
monetary place. TCIM might decide that an unrated security is of comparable high quality to securities with a specific ranking.
Such unrated securities are handled as in the event that they carried the ranking of securities with which TCIM compares them.

Decrease-rated debt securities could also be
issued by firms within the progress stage of their improvement. They might even be issued in reference to a company reorganization
or as a part of a company takeover. Corporations that situation such lower-rated securities are sometimes extremely leveraged and should not
have out there to them extra conventional strategies of financing. Subsequently, the danger related to buying the securities of such
issuers is larger than can be the case with higher-rated securities. For instance, throughout an financial downturn or a sustained
interval of rising rates of interest, extremely leveraged issuers of lower-rated securities might expertise monetary stress. Throughout
such intervals, such issuers might not have adequate revenues to meet their curiosity cost obligations. The issuer’s
means to service its debt obligations might also be adversely affected by particular company developments, the issuer’s
incapacity to fulfill particular projected enterprise forecasts or the unavailability of extra financing.

The chance of loss resulting from default by
the issuer is considerably better for the holders of lower-rated securities as a result of such securities are usually unsecured and
are sometimes subordinated to different collectors of the issuer.

It’s doable {that a} main financial
recession might adversely have an effect on the marketplace for lower-rated securities. Any such recession may severely have an effect on the marketplace for
and the values of such securities, in addition to the power of the issuers of such securities to repay principal and pay curiosity
thereon.

The Accounts (apart from the Cash
Market Account) might purchase lower-rated securities which can be bought with out registration beneath the federal securities legal guidelines and subsequently
carry restrictions on resale. The Accounts might incur particular prices in disposing of such securities, however will usually incur
no prices when the issuer is chargeable for registering the securities.

The Accounts might also purchase lower-rated
securities throughout an preliminary underwriting. Such securities contain particular dangers as a result of they’re new points. The Accounts have
no association with any particular person regarding the acquisition of such securities, and TCIM will fastidiously evaluation the credit score and different
traits pertinent to such new points. An Account might now and again take part on committees shaped by collectors to
negotiate with the administration of financially troubled issuers of securities held by the Account. Such participation might topic
the Account to bills corresponding to authorized charges and should make the Account an “insider” of the issuer for functions of the
federal securities legal guidelines, and, subsequently, might prohibit the Account’s means to commerce in or purchase extra positions in
a specific security when it would in any other case need to take action. Participation by an Account on such committees additionally might expose the
Account to potential liabilities beneath the federal chapter legal guidelines or different legal guidelines governing the rights of collectors and debtors.
The Account would take part on such committees solely when TCIM believes that such participation is important or fascinating to implement
the Account’s rights as a creditor or to guard the worth of securities held by the Account.

Company Debt Securities. An
Account might spend money on company debt securities of U.S. and overseas issuers and/or maintain its property in these securities for money
administration functions. The funding return of company debt securities displays curiosity earnings and adjustments available in the market worth
of the security. The market worth of a company debt obligation could also be anticipated to rise and fall inversely with rates of interest
usually. There additionally exists the danger that the issuers of the securities might not be capable of meet their obligations on curiosity
or principal funds on the time referred to as for by an instrument.

 

14 Assertion of Extra Data  ■  Faculty
Retirement Equities Fund

Zero Coupon Obligations. Some
of the Accounts might spend money on zero coupon obligations. Zero coupon securities usually pay no money curiosity (or dividends within the
case of most well-liked inventory) to their holders previous to maturity. Accordingly, such securities normally are issued and traded at a deep
low cost from their face or par worth and customarily are topic to better fluctuations of market worth in response to altering
rates of interest than securities of comparable maturities and credit score high quality that pay money curiosity (or dividends within the case of
most well-liked inventory) on a present foundation. Though an Account will obtain no funds on its zero coupon securities previous to their
maturity or disposition, will probably be required for federal revenue tax functions usually to incorporate in its dividends to shareholders
every year an quantity equal to the annual revenue that accrues on its zero coupon securities. Such dividends will likely be paid from the
money property of the Account, from borrowings or by liquidation of portfolio securities, if mandatory, at a time that the Account
in any other case wouldn’t have completed so. To the extent an Account is required to liquidate thinly traded securities, the Account could also be
capable of promote such securities solely at costs decrease than if such securities had been extra broadly traded. The dangers related to holding
securities that aren’t readily marketable could also be accentuated at such time. To the extent the proceeds from any such tendencies
are utilized by an Account to pay distributions, the Account will be unable to buy extra income-producing securities with
such proceeds, and consequently its present revenue in the end could also be decreased.

Floating and Variable Fee Devices.
Variable and floating price securities present for a periodic adjustment within the rate of interest paid on the obligations. The phrases
of such obligations present that rates of interest are adjusted periodically based mostly upon an rate of interest adjustment index as offered
within the respective obligations. The adjustment intervals could also be common, and vary from day by day as much as yearly, or could also be occasion based mostly,
corresponding to based mostly on a change within the prime price. The rate of interest on a floater is a variable price which is tied to a different curiosity
price, corresponding to a cash market index or U.S. Treasury invoice price. The rate of interest on a floater resets periodically, usually each
1–3 months. Among the Accounts might spend money on floating and variable price devices. Earnings securities might present for
floating or variable price curiosity or dividend funds. The floating or variable price could also be decided by reference to a recognized
lending price, corresponding to a financial institution’s prime price, a certificates of deposit price or the London InterBank Provided Fee (“LIBOR”).
Alternatively, the speed could also be decided by way of an public sale or remarketing course of. The speed additionally could also be listed to adjustments in
the values of the rate of interest of securities listed, forex alternate price or different commodities. Variable and floating price
securities are usually much less delicate than fixed-rate securities to rate of interest adjustments and to have larger yields when curiosity
charges enhance. Nevertheless, throughout rising rates of interest, adjustments within the rate of interest of an adjustable price security might lag adjustments
in market charges. The quantity by which the charges are paid on an revenue security might enhance or lower and could also be topic to periodic
or lifetime caps. Fluctuations in rates of interest above these caps might trigger adjustable price securities to behave extra like fixed-rate
securities in response to excessive actions in rates of interest.

An Account (apart from the Cash Market
Account) might also spend money on inverse floating price debt devices (“inverse floaters”). The rate of interest on an inverse
floater resets in the other way from the market price of curiosity to which the inverse floater is listed. An inverse floating
price security might exhibit better worth volatility than a fixed-rate obligation of comparable credit score high quality. Such securities might
additionally pay a price of curiosity decided by making use of a a number of to the variable price. The extent of will increase and reduces within the
worth of securities whose charges range inversely with adjustments in market charges of curiosity usually will likely be bigger than comparable
adjustments within the worth of an equal principal quantity of a fixed-rate security having comparable credit score high quality redemption provisions
and maturity.

LIBOR is a median rate of interest,
decided by the Intercontinental Alternate Benchmark Administration, which banks cost each other for using short-term
cash. As well as, the phrases of many investments, financings or different transactions within the U.S. and globally have been traditionally
tied to LIBOR, which features as a reference price or benchmark for numerous industrial and monetary contracts. The UK’s
(“UK”) Monetary Conduct Authority (“FCA”) has introduced plans to discontinue supporting LIBOR and transition
away from LIBOR. Nevertheless, subsequent bulletins by the FCA, the LIBOR administrator and different regulators point out that it’s
doable that sure LIBOR tenors (maturities) might proceed past 2021 and probably the most broadly used LIBOR tenors might proceed till
mid-2023. There stays uncertainty relating to the long run use of LIBOR and the character of any substitute price, and any potential
results of the transition away from LIBOR on an Account or on sure devices through which an Account invests aren’t recognized. Numerous
monetary {industry} teams have begun planning for that transition and sure regulators and {industry} teams have taken actions
to ascertain different reference charges (e.g., the Secured In a single day Financing Fee, which measures the price of in a single day borrowings
by way of repurchase settlement transactions collateralized with U.S. Treasury securities and is meant to switch U.S. greenback LIBOR
with sure changes). The usefulness of LIBOR as a benchmark might deteriorate throughout the transition interval and, right now,
it isn’t doable to foretell the impact of the institution of any substitute charges or another reforms to LIBOR. The transition
course of might contain, amongst different issues, a rise in volatility or illiquidity of markets for devices that at the moment rely
on LIBOR, a discount within the worth of sure devices held by an Account or a discount within the effectiveness of associated Account
transactions corresponding to hedges. Numerous pending legislative proposals, together with within the U.S. Congress and the New York state legislature,
might have an effect on the transition of LIBOR-based devices as properly by allowing trustees and calculation brokers to transition devices
with no LIBOR transition language to another reference price chosen by such brokers. These legislative proposals embrace
secure harbors from legal responsibility, which can restrict the recourse an Account might have if the choice reference price doesn’t absolutely
compensate the Account for the transition of an instrument from LIBOR. It’s unsure whether or not such legislative proposals will
be signed into regulation. Any such results, in addition to different unexpected results, might lead to losses to an Account.

Overseas Debt Obligations. The
debt obligations of overseas governments and entities might or might not be supported by the complete religion and credit score of the overseas authorities.
An Account might purchase securities issued by sure “supra-national” entities, which embrace entities designated or supported
by governments to advertise financial reconstruction or improvement, worldwide banking organizations
and

 

Faculty Retirement Equities Fund  ■  Assertion of Extra Data 15

associated
authorities companies. Examples are the Worldwide Financial institution for Reconstruction and Improvement
(extra generally generally known as
the “World Financial institution”), the Asian Improvement Financial institution and the Inter-American Improvement Financial institution.

The governmental members of those supra-national
entities are “stockholders” that usually make capital contributions and could also be dedicated to make extra capital
contributions if the entity is unable to repay its borrowings. A supra-national entity’s lending actions could also be restricted
to a share of its complete capital, reserves and internet revenue. There might be no assurance that the constituent overseas governments
will proceed to have the ability or prepared to honor their capitalization commitments for these entities.

Mortgage Participations and Assignments;
Direct Loans.
Sure Accounts might buy participations and/or assignments in industrial loans. Such investments could also be
secured or unsecured and should pay curiosity at mounted or floating charges. Mortgage participations and assignments contain particular varieties
of danger, together with rate of interest danger, liquidity danger and the dangers of being a lender.

Mortgage participations usually characterize
direct participation, along with different events, in a mortgage to a company borrower, and customarily are provided by banks or different
monetary establishments or lending syndicates. Sure Accounts might take part in such syndications, or should buy a part of a mortgage,
turning into an element lender. When buying mortgage participations, an Account assumes the credit score danger related to the company borrower
and should assume the credit score danger related to an interposed financial institution or different monetary middleman. The mortgage participations through which
an Account intends to take a position might not be rated by any nationally acknowledged ranking service.

Investments in loans by way of a direct
task of the monetary establishment’s pursuits with respect to the mortgage might contain extra dangers to the Accounts.
The purchaser of an task usually succeeds to all of the rights and obligations beneath the mortgage settlement with the identical rights
and obligations because the assigning lender. Assignments might, nevertheless, be organized by way of non-public negotiations between potential assignees
and potential assignors, and the rights and obligations acquired by the purchaser of an task might differ from, and be extra
restricted than, these held by the assigning lender. If a mortgage is foreclosed, an Account might develop into half proprietor of any collateral,
and would bear the prices and liabilities related to proudly owning and disposing of the collateral. As well as, it’s conceivable
that beneath rising authorized theories of lender legal responsibility, an Account could possibly be held liable as co-lender. It’s unclear whether or not loans
and different types of indebtedness supply securities regulation protections in opposition to fraud and misrepresentation. Within the absence of definitive
regulatory steering, the Accounts depend on TCIM’s analysis in an try and keep away from conditions the place fraud or misrepresentation
might adversely have an effect on the Accounts.

Loans might not be readily marketable
and could also be topic to restrictions on resale. In some instances, negotiations concerned in disposing of loans might require weeks to finish.
Consequently, some loans could also be tough or inconceivable to get rid of readily at what TCIM believes to be a good worth. As well as,
valuation of illiquid loans includes a better diploma of judgment in figuring out an Account’s NAV than if that worth had been
based mostly on out there market quotations, and will lead to vital variations within the Account’s day by day share worth. On the
similar time, some mortgage pursuits are traded amongst sure monetary establishments and accordingly could also be deemed liquid. Because the market
for various kinds of loans develops, the liquidity of those devices is anticipated to enhance. Nevertheless, now and again, loans
could also be illiquid. Funding in mortgage participations and assignments are thought of to be debt obligations for functions of the Belief’s
funding restriction regarding the lending of funds or property by an Account.

A mortgage is commonly administered by an
agent financial institution appearing as agent for all holders. The agent financial institution administers the phrases of the mortgage, as specified within the mortgage settlement.
As well as, the agent financial institution is generally chargeable for the gathering of principal and curiosity funds from the company borrower
and the apportionment of those funds to the credit score of all establishments that are events to the mortgage settlement. Except, beneath
the phrases of the mortgage, an Account has direct recourse in opposition to the company borrower, the Account might need to depend on the agent
financial institution or different monetary middleman to use acceptable credit score treatments in opposition to a company borrower. A monetary establishment’s
employment as agent financial institution could be terminated within the occasion that it fails to look at a requisite commonplace of care or turns into bancrupt.
A successor agent financial institution would usually be appointed to switch the terminated agent financial institution, and property held by the agent financial institution beneath
the mortgage settlement ought to stay out there to holders of such indebtedness. Nevertheless, if property held by the agent financial institution for the profit
of an Account had been decided to be topic to the claims of the agent financial institution’s basic collectors, the Account may incur
sure prices and delays in realizing cost on a mortgage or mortgage participation and will endure a lack of principal and/or curiosity.
In conditions involving different interposed monetary establishments (e.g., an insurance coverage firm or governmental company) comparable dangers
might come up.

Purchasers of loans rely primarily
upon the creditworthiness of the company borrower for cost of principal and curiosity. If an Account doesn’t obtain scheduled
curiosity or principal funds on such indebtedness, the Account’s share worth and yield could possibly be adversely affected. Loans
which can be absolutely secured supply an Account extra safety than an unsecured mortgage within the occasion of non-payment of scheduled curiosity
or principal. Nevertheless, there is no such thing as a assurance that the liquidation of collateral from a secured mortgage would fulfill the company
borrower’s obligation, or that the collateral might be liquidated. Within the occasion of the chapter of a borrower, an Account
might expertise delays or limitations in its means to appreciate the advantages of any collateral securing a mortgage.

Sure Accounts might spend money on mortgage
participations and assignments with credit score high quality corresponding to that of issuers of its securities investments. Indebtedness of
corporations whose creditworthiness is poor includes considerably better dangers, and could also be extremely speculative. Some corporations might
by no means repay their indebtedness, or might pay solely a small fraction of the quantity owed. Consequently, when investing in indebtedness
of corporations with poor credit score, an Account bears a considerable danger of dropping all the quantity invested. The Accounts might make
investments in mortgage participations and assignments to attain capital appreciation, relatively than to hunt revenue.

For functions of limits on an Account’s
complete property invested in anybody issuer and the quantity of an Account’s complete property which can be invested in issuers inside the
similar {industry}, an Account usually will deal with the company borrower because the “issuer” of indebtedness held by the Account.
Within the case of mortgage participations the place a financial institution or different lending establishment serves as a monetary middleman between an

 

16 Assertion of Extra Data  ■  Faculty
Retirement Equities Fund

Account and the company borrower, if
the participation doesn’t shift to the Account the direct debtor-creditor relationship with the company borrower, SEC interpretations
require the Account to deal with each the lending financial institution or different lending establishment and the company borrower as “issuers.”
Treating a monetary middleman as an issuer of indebtedness might prohibit an Account’s means to spend money on indebtedness
associated to a single monetary middleman, or a bunch of intermediaries engaged in the identical {industry}, even when the underlying
debtors characterize many alternative corporations and industries.

Loans aren’t traded on an alternate
or comparable market however by way of a secondary market comprised of sellers and different institutional individuals. Loans are usually
topic to prolonged settlement intervals and should take greater than seven days to settle. Throughout this era, an Account might search different
sources of liquidity together with using an overdraft facility with the Accounts’ custodian or by borrowing beneath a credit score
settlement to which the Accounts are events.

Sure loans might not be thought of
securities beneath the federal securities legal guidelines. In such circumstances, fewer authorized protections could also be out there with respect to an
Account’s funding in loans. Specifically, if a mortgage isn’t thought of a security beneath the federal securities legal guidelines, sure
authorized protections usually out there to securities traders beneath the federal securities legal guidelines, corresponding to these in opposition to fraud and
misrepresentation, might not be out there.

To the extent permitted by relevant
regulation, an Account might also make a number of direct loans, which can be secured or unsecured, to a industrial borrower (every, a “Direct
Mortgage”). To the extent it makes a Direct Mortgage, an Account would negotiate the phrases of such Direct Mortgage with the borrower
pursuant to a personal transaction. The Account will base its dedication of whether or not or to not make a Direct Mortgage on, amongst different
elements, TCIM’s evaluation of the borrower’s creditworthiness, in addition to any collateral obtained by the Account or
recourse out there to the Account within the occasion of premature or non-payment of curiosity and reimbursement of principal to the Account.
By making a number of Direct Loans, an Account can be uncovered to the danger that the borrower will default or develop into bancrupt.
In such situations, the Account might lose cash. Direct Loans additionally expose an Account to liquidity and rate of interest danger. Direct
Loans aren’t publicly traded, might not have a secondary market, and could also be illiquid. The absence of a secondary market might affect
an Account’s means to promote and/or worth its Direct Loans. An Account’s efficiency with respect to a Direct Mortgage
will rely, partly, on the Account’s (or TCIM’s, on the Account’s behalf) means to barter advantageous
phrases with a borrower.

Structured or Listed Securities
(together with Alternate-Traded Notes, Fairness-Linked Notes and Inflation-Listed Bonds).
Among the Accounts might spend money on structured
or listed securities. The worth of the principal of and/or curiosity on such securities relies on a reference corresponding to a selected
forex, rate of interest, commodity, index or different monetary indicator (the “Reference”) or the relative change in
two or extra References. The rate of interest or the principal quantity payable upon maturity or redemption could also be elevated or decreased
relying upon adjustments within the relevant Reference. The phrases of the structured or listed securities might present that in sure
circumstances no principal is due at maturity and, subsequently, might lead to a lack of an Account’s funding. Structured
or listed securities could also be positively or negatively listed, in order that appreciation of the Reference might produce a rise or
a lower within the rate of interest or worth of the security at maturity. As well as, adjustments in rates of interest or the worth of the
security at maturity could also be some a number of of the change within the worth of the Reference. Consequently, structured or listed securities
might entail a better diploma of market danger than different sorts of debt securities. Structured or listed securities might also be extra
unstable, have decrease total liquidity and be tougher to precisely worth than much less advanced securities. Structured and listed
securities are usually topic to the identical dangers as different fixed-income securities along with the particular dangers related
with linking the cost of principal and/or curiosity funds (or different payable quantities) to the efficiency of a Reference.

An Account might also spend money on inflation-indexed
bonds. Inflation-indexed bonds are fixed-income securities whose principal worth is periodically adjusted in response to the speed
of inflation. Two constructions are frequent. The U.S. Treasury and another issuers use a construction that accrues inflation into the
principal worth of the bond. Most different issuers pay out the Shopper Worth Index (“CPI”) accruals as a part of a semiannual
coupon.

If the periodic adjustment price measuring
inflation falls, the principal worth of inflation-indexed bonds will likely be adjusted downward, and consequently the curiosity payable
on these securities (calculated with respect to a smaller principal quantity) will likely be decreased. Reimbursement of the unique bond principal
upon maturity (as adjusted for inflation) is assured within the case of a U.S. Treasury inflation-indexed bond, even throughout a interval
of deflation, though the inflation-adjusted principal obtained could possibly be lower than the inflation-adjusted principal that had accrued
to the bond on the time of buy. Nevertheless, the present market worth of the bonds isn’t assured and can fluctuate. An Account
might also spend money on different inflation-related bonds which can or might not present the same assure. If a assure of principal
isn’t offered, the adjusted principal worth of the bond repaid at maturity could also be lower than the unique principal.

The worth of inflation-indexed bonds
is anticipated to alter in response to adjustments in actual rates of interest. Actual rates of interest in flip are tied to the connection between
nominal rates of interest and the speed of inflation. Subsequently, if the speed of inflation rises at a sooner price than nominal curiosity
charges, actual rates of interest may decline, resulting in a rise in worth of inflation-indexed bonds. In distinction, if nominal curiosity
charges enhance at a sooner price than inflation, actual rates of interest may rise, resulting in a lower in worth of inflation-indexed
bonds.

Whereas these securities are anticipated
to be protected against long-term inflationary tendencies, short-term will increase in inflation might result in a decline in worth. If curiosity
charges rise resulting from causes apart from inflation (for instance, resulting from adjustments in forex alternate charges), traders in these securities
might not be protected to the extent that the rise isn’t mirrored within the bond’s inflation measure.

 

Faculty Retirement Equities Fund  ■  Assertion of Extra Data 17

The periodic adjustment of U.S. inflation-indexed
bonds is tied to the Shopper Worth Index for All City Shoppers (“CPI-U”), which isn’t seasonally adjusted and which
is calculated month-to-month by the U.S. Bureau of Labor Statistics. The CPI-U is a measurement of adjustments in the price of dwelling,
made up of parts corresponding to housing, meals, transportation and vitality. Inflation-indexed bonds issued by a overseas authorities
are usually adjusted to replicate a comparable inflation index calculated by that authorities. There might be no assurance that the
CPI-U or any overseas inflation index will precisely measure the actual price of inflation within the costs of products and companies. Furthermore,
there might be no assurance that the speed of inflation abroad will likely be correlated to the speed of inflation within the United
States.

Unfavorable Curiosity Charges. A destructive
rate of interest coverage is an unconventional central financial institution financial coverage software the place nominal goal rates of interest are set with a
destructive worth (i.e., beneath zero %) meant to assist create self-sustaining progress within the native financial system. If a financial institution fees
destructive curiosity, as an alternative of receiving curiosity on deposits, a depositor should pay the financial institution charges to maintain cash with the financial institution. In
a destructive rate of interest setting, debt devices might commerce at destructive yields, which implies the purchaser of the instrument
might obtain at maturity lower than the whole quantity invested. In response to current volatility and financial uncertainty, the U.S.
Authorities and sure overseas central banks have taken steps to stabilize markets by, amongst different issues, decreasing rates of interest.
Consequently, as of the date of this SAI, rates of interest in the US are at traditionally low ranges, and sure European
nations and Japan have pursued destructive rate of interest insurance policies. Unfavorable rates of interest might develop into extra prevalent amongst overseas
(non-U.S.) issuers, and probably inside the U.S., and a interval of low (together with destructive) rates of interest might persist for
a sustained interval. To the extent an Account has a financial institution deposit or holds a debt instrument with a destructive rate of interest to maturity,
the Account would generate a destructive return on that funding.

Plenty of elements might contribute
to debt devices buying and selling at a destructive yield. Whereas destructive yields might be anticipated to scale back demand for fixed-income investments
buying and selling at a destructive rate of interest, traders could also be prepared to proceed to buy such investments for quite a lot of causes
together with, however not restricted to, worth insensitivity, arbitrage alternatives throughout fixed-income markets, rules-based funding
methods, capital preservation, decreased volatility, or decreased funding alternatives. If destructive rates of interest develop into
extra prevalent available in the market and/or if destructive rates of interest persist for a sustained time period, it’s anticipated that traders
might search to reallocate property to different income-producing property corresponding to investment-grade and high-yield debt devices, or fairness
investments that pay a dividend, absent different market dangers which will make such different investments unattractive. This elevated
demand for larger yielding property might trigger the worth of such devices to rise whereas triggering a corresponding lower in
yield over time, thus decreasing the worth of such different investments. As well as, a transfer to larger yielding investments might
trigger traders, together with an Account, to hunt fixed-income investments with longer period and/or probably decreased credit score
high quality to be able to search the specified stage of yield. These issues might restrict an Account’s
means to find fixed-income devices containing the specified danger/return profile. Altering rates of interest, together with, however
not restricted to, charges that fall beneath zero, might have unpredictable results on the markets and should expose fixed-income and associated
markets to heightened volatility and potential illiquidity.

Convertible
Securities
. Convertible securities usually have much less potential for achieve or loss than frequent shares. Convertible securities
usually present yields larger than the underlying frequent shares, however usually decrease than comparable non-convertible securities.
Due to this larger yield, convertible securities usually promote at costs above their “conversion worth,” which
is the present market worth of the inventory to be obtained upon conversion. The distinction between this conversion worth and the worth
of convertible securities will range over time relying on adjustments within the worth of the underlying frequent shares and rates of interest.
When the underlying frequent shares decline in worth, convertible securities will have a tendency to not decline to the identical extent as a result of
of the curiosity or dividend funds and the reimbursement of principal at maturity for sure sorts of convertible securities. Nevertheless,
securities which can be convertible apart from on the choice of the holder usually don’t restrict the potential for loss to the identical
extent as securities convertible on the choice of the holder. When the underlying frequent shares rise in worth, the worth of convertible
securities might also be anticipated to extend. On the similar time, nevertheless, the distinction between the market worth of convertible
securities and their conversion worth will slender, which implies that the worth of convertible securities will usually not enhance
to the identical extent as the worth of the underlying frequent shares. As a result of convertible securities might also be rate of interest delicate,
their worth might enhance as rates of interest fall and reduce as rates of interest rise. Convertible securities are additionally topic to
credit score danger, and are sometimes lower-quality securities.

Contingent Capital Securities.
Contingent capital securities (typically known as “CoCos”) are issued primarily by non-U.S. monetary establishments,
which have loss absorption mechanisms benefitting the issuer constructed into their phrases. CoCos usually present for necessary conversion
into the frequent inventory of the issuer or a write-down of the principal quantity or worth of the CoCos upon the prevalence of sure
“triggers.” These triggers are usually linked to regulatory capital thresholds or regulatory actions calling into
query the issuing banking establishment’s continued viability as a going concern. Fairness conversion or principal write-down
options are tailor-made to the issuer and its regulatory necessities and, in contrast to conventional convertible securities, conversions
aren’t voluntary.

A set off occasion for CoCos would possible
be the results of, or associated to, the deterioration of the issuer’s monetary situation (e.g., a lower within the issuer’s
capital ratio) and standing as a going concern. In such a case, with respect to CoCos that present for conversion into frequent inventory
upon the prevalence of the set off occasion, the market worth of the issuer’s frequent inventory
obtained
by an Account could have possible declined, maybe considerably, and should proceed to say no, which can adversely
have an effect on the Account’s internet asset worth. Additional, the issuer’s frequent inventory can be subordinate to the issuer’s
different courses of securities and subsequently would worsen an Account’s standing in a chapter continuing. As well as, as a result of
the frequent inventory of the issuer might not pay a dividend, traders in these devices

 

18 Assertion of Extra Data  ■  Faculty
Retirement Equities Fund

might expertise a decreased revenue price,
probably to zero. In view of the foregoing, CoCos are sometimes rated beneath funding grade and are topic to the dangers of excessive
yield securities.

CoCos could also be topic to an computerized
write-down (i.e., the automated write-down of the principal quantity or worth of the securities, probably to zero, and
the cancellation of the securities) beneath sure circumstances, which might lead to an Account dropping a portion or all of its
funding in such securities. As well as, an Account might not have any rights with respect to reimbursement of the principal quantity
of the securities that has not develop into due or the cost of curiosity or dividends on such securities for any interval from (and together with)
the curiosity or dividend cost date falling instantly previous to the prevalence of such computerized write-down. An computerized write-down
might additionally lead to a decreased revenue price if the dividend or curiosity cost relies on the security’s par worth. Coupon
funds on CoCos could also be discretionary and could also be cancelled by the issuer for any cause or could also be topic to approval by the issuer’s
regulator and could also be suspended within the occasion there are inadequate distributable reserves.

In sure situations, traders in
CoCos might endure a lack of capital forward of fairness holders or when fairness holders don’t. The costs of CoCos could also be unstable.
There is no such thing as a assure that an Account will obtain a return of principal on CoCos. Any indication that an computerized write-down
or conversion occasion might happen might be anticipated to have a fabric adversarial impact available on the market worth of CoCos.

 

Mortgage-backed and asset-backed securities

 

Mortgage-Backed and Asset-Backed
Securities Typically.
Among the Accounts might spend money on mortgage-backed and asset-backed securities, which characterize direct
or oblique participation in, or are collateralized by and payable from, mortgage loans secured by actual property or devices
derived from such loans. Mortgage-backed securities embrace numerous sorts of mortgage-related securities corresponding to authorities stripped
mortgage-related securities, adjustable-rate mortgage-related securities and collateralized mortgage obligations. Among the Accounts
might also spend money on asset-backed securities, which characterize participation in, or are secured by and payable from, property corresponding to
motorcar installment gross sales contracts, installment mortgage contracts, leases of varied sorts of actual and private property, receivables
from revolving credit score (i.e., bank card) agreements and different classes of receivables. These property are usually pooled and
securitized by governmental, government-related or non-public organizations by way of using trusts and particular goal entities
established particularly to carry property and to situation debt obligations backed by these property. Asset-backed or mortgage-backed securities
are usually created or “sponsored” by banks or different monetary establishments or by sure government-sponsored enterprises
corresponding to FNMA or FHLMC.

Funds or distributions of principal
and curiosity could also be assured as much as sure quantities and for sure time intervals by letters of credit score or pool insurance coverage insurance policies
issued by a monetary establishment non-affiliated with the belief or company. Different credit score enhancements additionally might exist.

With respect to the Social Alternative Account,
TCIM doesn’t take into accounts whether or not the sponsor of an asset-backed security through which the Account invests meets the Account’s
screening standards. That’s as a result of asset-backed securities characterize pursuits in swimming pools of loans, and never of the continued enterprise
enterprise of the sponsor. It’s subsequently doable that the Account might spend money on an asset-backed or mortgage-backed security
sponsored by a financial institution or different monetary establishment through which the Account couldn’t make investments straight.

Mortgage Go-By way of Securities.
Among the Accounts might spend money on mortgage pass-through securities. Mortgage-related securities characterize swimming pools of mortgage loans
assembled on the market to traders by numerous governmental companies, corresponding to GNMA, by government-related organizations, corresponding to FNMA
and FHLMC, in addition to by non-public issuers, corresponding to industrial banks, financial savings and mortgage establishments, mortgage bankers and personal
mortgage insurance coverage corporations.

Pursuits in swimming pools of mortgage-related
securities differ from different types of debt securities, which usually present for periodic cost of curiosity in mounted quantities
with principal funds at maturity or specified name dates. As an alternative, these securities present a month-to-month cost which consists
of each curiosity and principal funds. In impact, these funds are a “pass-through” of the month-to-month funds made
by the person debtors on their residential or industrial mortgage loans, internet of any charges paid to the issuer or guarantor
of such securities. Extra funds are attributable to repayments of principal ensuing from the sale of the underlying property,
refinancing or foreclosures, internet of charges or prices which can be incurred. Some mortgage-related securities are described as “modified
pass-through.” These securities entitle the holder to obtain all curiosity and principal funds owed on the mortgage pool,
internet of sure charges, on the scheduled cost dates no matter whether or not or not the mortgagor really makes the cost.

Business banks, financial savings and mortgage
establishments, non-public mortgage insurance coverage corporations, mortgage bankers and different secondary market issuers additionally create pass-through
swimming pools of standard residential mortgage loans. Such issuers might, as well as, be the originators and/or servicers of the underlying
mortgage loans in addition to the guarantors of the mortgage-related securities. Swimming pools created by such non-governmental issuers usually
supply the next price of curiosity than authorities and government-related swimming pools as a result of there are not any direct or oblique authorities
or company ensures of funds within the former swimming pools. Nevertheless, well timed cost of curiosity and principal of those swimming pools could also be supported
by numerous types of insurance coverage or ensures, together with particular person mortgage, title, pool and hazard insurance coverage and letters of credit score.
The insurance coverage and ensures are issued by governmental entities, non-public insurers and the mortgage poolers. Such insurance coverage and
ensures, and the creditworthiness of the issuers thereof, will likely be thought of in figuring out whether or not a mortgage-related security
meets an Account’s funding high quality requirements. There might be no assurance that the non-public insurers or guarantors can meet
their obligations beneath the insurance coverage insurance policies or assure preparations. An Account might purchase mortgage-related securities with out
insurance coverage or ensures if, by way of an examination of the mortgage expertise and practices of the originator/servicers and poolers,
TCIM determines that the securities meet the Account’s high quality requirements. Though the marketplace for such securities is turning into
more and more

 

Faculty Retirement Equities Fund  ■  Assertion of Extra Data 19

liquid, securities issued by sure non-public
organizations might not be readily marketable, particularly within the present monetary setting. As well as, current developments
within the fixed-income and credit score markets might have an adversarial affect on the liquidity of mortgage-related securities.

Underneath the course of FHFA, GNMA and
FHLMC have entered right into a joint initiative to develop a typical securitization platform for the issuance of a uniform Mortgage-Backed
Security (the “Single Security Initiative”), which might usually align the traits of FNMA and FHLMC certificates.
The Single Security Initiative launched in June 2019, and is meant to maximise liquidity for each FNMA and FHLMC MBS within the
“to-be-announced” market. Whereas the preliminary results of the issuance of a uniform Mortgage-Backed Security available on the market
for mortgage-related securities have been comparatively minimal, the long-term results that the Single Security Initiative might have
available on the market for mortgage-backed securities are unsure.

Collateralized Mortgage Obligations
(“CMOs”).
CMOs are structured into a number of courses, every bearing a distinct said maturity. Much like a bond,
curiosity and pay as you go principal are paid, typically, on a month-to-month foundation. Precise maturity and common life will depend on the
prepayment expertise of the collateral. CMOs present for a modified type of name safety by way of a de facto breakdown of the
underlying pool of mortgages in response to how rapidly the loans are repaid. Month-to-month cost of principal obtained from the pool
of underlying mortgages, together with prepayments, is first returned to traders holding the shortest maturity class. Traders holding
the longer maturity courses obtain principal solely after the primary class has been retired.
An investor is partially guarded in opposition to a ahead of desired return of principal due to the sequential funds.

In a typical CMO transaction, a company
(“issuer”) points a number of sequence (e.g., A, B, C, Z) of CMO bonds (“Bonds”). Proceeds of the Bond providing
are used to buy mortgages or mortgage pass-through certificates (“Collateral”). The Collateral is pledged to a
third get together trustee as security for the Bonds.

Principal and curiosity funds from
the Collateral are used to pay principal on the Bonds within the order A, B, C, Z. The Sequence A, B, and C Bonds all bear present curiosity.
Curiosity on the Sequence Z Bond is accrued and added to principal and a like quantity is paid as principal on the Sequence A, B, or C
Bond at the moment being paid off. When the Sequence A, B, and C Bonds are paid in full, curiosity and principal on the Sequence Z Bond
start to be paid at the moment. With some CMOs, the issuer serves as a conduit to permit mortgage originators (primarily builders or financial savings
and mortgage associations) to borrow in opposition to their mortgage portfolios.

The common maturity of pass-through
swimming pools of mortgage-related securities through which among the Accounts might make investments varies with the maturities of the underlying mortgage
devices. As well as, a pool’s said maturity could also be shortened by unscheduled funds on the underlying mortgages.
Elements affecting mortgage prepayments embrace the extent of rates of interest, basic financial and social circumstances, location of
the mortgaged property and age of the mortgage. For instance, in intervals of falling rates of interest, the speed of prepayment tends
to extend, thereby shortening the precise common lifetime of the mortgage-related security. Conversely, when rates of interest are rising,
the speed of prepayment tends to lower, thereby lengthening the precise common lifetime of the mortgage-related security. Accordingly,
it isn’t doable to precisely predict the common lifetime of a specific pool. Reinvestment of prepayments might happen at larger
or decrease charges than initially anticipated. Subsequently, the precise maturity and realized yield on pass-through or modified pass-through
mortgage-related securities will range based mostly upon the prepayment expertise of the underlying pool of mortgages. For functions of
calculating the common lifetime of the property of the related Account, the maturity of every of those securities would be the common
lifetime of such securities based mostly on the latest estimated annual prepayment price.

Asset-Backed Securities Unrelated
to Mortgage Loans.
Among the Accounts might spend money on asset-backed securities which can be unrelated to mortgage loans. These embrace,
however aren’t restricted to, bank card securitizations, auto and tools lease and mortgage securitizations and price discount bonds.
Within the case of bank card securitizations, it’s typical to have a revolving grasp belief situation “comfortable bullet” maturities
representing a fractional curiosity in trusts whose property encompass revolving bank card receivables. Auto and tools lease
and mortgage securitizations reference particular static asset swimming pools whereby month-to-month funds of principal and curiosity are handed by way of
on to certificates holders usually so as of seniority. The last word efficiency of those securities is a perform of
each the creditworthiness of the debtors in addition to restoration obtained on collateral foreclosed upon by the respective belief(s).
Fee discount bonds characterize a secured curiosity in future price restoration on stranded utility property which will consequence from, for
instance, storm damages or environmental prices. Sometimes these prices are recouped over time from a broad price payer base. The efficiency
of those securities would rely primarily upon a continuance of adequate price base to repay the notes within the specified time
body and a steady regulatory setting.

Mortgage Greenback Rolls. Some
of the Accounts might enter into mortgage “greenback rolls” through which the Account sells securities for supply within the present
month and concurrently contracts with a counterparty to repurchase both comparable or considerably an identical securities on a
specified future date. To be thought of “considerably an identical,” the securities returned to an Account usually
should: (1) be collateralized by the identical sorts of underlying mortgages; (2) be issued by the identical company and be a part of the identical
program; (3) have the identical authentic said maturity; (4) have an identical internet coupon charges; (5) have an identical type and kind
in order to supply the identical dangers and rights; and (6) fulfill “good supply” necessities, which means that the combination
principal quantities of the securities delivered and obtained again should be inside 2.5% of the preliminary quantity delivered. The Account
loses the correct to obtain principal and curiosity paid on the securities bought. Nevertheless, the Account would profit to the extent
of any worth obtained for the securities bought and the decrease ahead worth for the long run buy (sometimes called the “drop”)
plus the curiosity earned on the short-term funding awaiting the settlement date of the ahead buy. Except such advantages
exceed the revenue and achieve or loss resulting from mortgage repayments that will have been realized on the securities bought as a part of the
mortgage greenback roll, using this system will diminish the funding

 

20 Assertion of Extra Data  ■  Faculty
Retirement Equities Fund

efficiency of the Account in contrast with
what such efficiency would have been with out using mortgage greenback rolls. The Account will maintain and preserve in a segregated
account till the settlement date money or liquid property in an quantity equal to the ahead buy worth. The advantages derived
from using mortgage greenback rolls might depend on TCIM’s means to accurately predict mortgage prepayments and curiosity
charges. There is no such thing as a assurance that mortgage greenback rolls might be efficiently employed. In reference to mortgage greenback roll transactions,
an Account might obtain securities with funding traits which can be totally different than these initially bought by the Account,
which can adversely have an effect on the sensitivity of the Account to adjustments in rates of interest.

 

Securities lending

 

Topic to the Accounts’ funding
restrictions regarding loans of portfolio securities set forth above, sure Accounts might lend their securities. The Accounts
might lend their securities to brokers and sellers that aren’t affiliated with TIAA, are registered with the SEC and are members
of FINRA, and likewise to sure different monetary establishments. All loans will likely be absolutely collateralized. Any borrower of an Account’s
portfolio securities should preserve acceptable collateral, marked to market day by day, with the Account’s custodian (or a sub-custodian
or a particular “tri-party” custodian). In reference to the lending of its securities, an Account will obtain as collateral
money, securities issued or assured by the U.S. Authorities (e.g., Treasury securities), or different collateral permitted by relevant
regulation, which always whereas the mortgage is excellent will likely be maintained in quantities equal to a minimum of 102% of the present market
worth of the excellent loaned securities for U.S. equities and fixed-income property and 105% for non-U.S. equities, or such lesser
share as could also be permitted by the NYDFS and SEC interpretations (to not fall beneath 100% of the market worth of the loaned securities
not together with a decline within the worth of the collateral), as reviewed day by day. Money collateral obtained by an Account will usually
be invested in high-quality short-term devices, or in a number of Accounts maintained by the securities lending agent for the
goal of investing money collateral, together with a fund that qualifies as a “authorities cash market fund” beneath the
SEC guidelines governing cash market funds. Funding of money collateral in a fund that qualifies as a “authorities cash market
fund” is not going to be topic to any relevant ESG standards of an Account. In the course of the time period of the mortgage, an Account will proceed
to have funding dangers with respect to the securities being loaned, in addition to danger with respect to the funding of the money
collateral, and an Account might lose cash because of the funding of such collateral. As well as, an Account might endure
a loss if the mortgage terminates and the Account is compelled to liquidate investments at a loss to be able to return the money collateral
to the borrower.

By lending its securities, an Account
will obtain quantities equal to the curiosity or dividends paid on the securities loaned and, as well as, will anticipate to obtain
a portion of the revenue generated by the short-term funding of money obtained as collateral or, alternatively, the place securities
or letter of credit score are used as collateral, a lending charge paid on to the Account by the borrower of the securities. Underneath
sure circumstances, a portion of the lending charge could also be paid or rebated to the borrower by the Account. Such loans will likely be terminable
by the Account at any time and won’t be made to associates of CREF. The Account might terminate a mortgage of securities so as
to regain file possession of, and to train helpful rights associated to, the loaned securities, together with, however not essentially
restricted to, voting or subscription rights or sure tax advantages, and TCIM might, within the train of its fiduciary duties, terminate
a mortgage within the occasion {that a} vote of holders of these securities is required on a fabric matter. The Account might pay cheap
charges to individuals non-affiliated with the Account for companies, for arranging such loans, or for appearing as securities lending agent
(every an “Agent”). Loans of securities will likely be made solely to corporations deemed creditworthy. In lending its securities, an
Account bears the market danger with respect to the funding of collateral and the danger the Agent might default on its contractual
obligations to the Account. The Agent bears the danger that the borrower might default on its obligation to return the loaned securities
because the Agent is contractually obligated to indemnify the Account if on the time of a default by a borrower some or the entire loaned
securities haven’t been returned. Substitute funds for dividends obtained by an Account for securities loaned out by the Account
is not going to be thought of as certified dividend revenue or as eligible for the company dividend obtained deduction. Every Agent is
licensed to interact a third-party financial institution as a particular “tri-party” custodian for securities lending actions and enter
right into a separate custodian endeavor with every relevant borrower beneath the Accounts’ securities lending program.

In the course of the fiscal 12 months ended December
31, 2021, the Agent for every relevant Account offered numerous companies to the Account, together with finding debtors, monitoring
day by day the worth of the loaned securities and collateral, requiring extra collateral from debtors as mandatory, money collateral
administration, certified dividend administration, negotiation of mortgage phrases, number of securities to be loaned, recordkeeping and account
servicing, monitoring dividend exercise and materials proxy votes regarding loaned securities, and arranging for return of loaned
securities to the Account at mortgage termination.

For the fiscal 12 months ended December
31, 2021 for the next Accounts, the desk beneath displays the greenback quantities of revenue obtained and the compensation paid to
an Agent, together with any share of income generated by the securities lending program paid to an Agent (“income cut up”),
associated to the securities lending actions of every such Account in existence throughout the interval:

 

Faculty Retirement Equities Fund  ■  Assertion of Extra Data 21

        Charges
and/or compensation for securities lending actions and associated companies
           
Account   Gross
revenue
from
securities
lending
actions
    Charges paid to
securities
lending
agent
from a
income cut up
    Charges paid for
any money
collateral
administration
service
that
aren’t
included within the
income cut up
*   Administrative
charges not
included
in
income cut up
    Indemnification
charges not
included
in
income cut up
    Rebates
(paid to
debtors)
    Different
charges not
included in
income
cut up
    Combination
charges/
compensation
for
securities
lending
actions
    Web
revenue from
securities
lending
actions
 
Inventory Account   $       $       $       $     $     $       $     $       $    
World Equities Account                                                                  
Development Account                                                                  
Fairness Index Account                                                                  
Social Alternative Account                                                                  

* Together with charges deducted from a pooled money collateral reinvestment car.

 

Rules adopted by federal banking
regulators beneath the Dodd-Frank Wall Avenue Reform and Shopper Safety Act require that
sure certified monetary contracts (“QFCs”) with counterparties
which can be a part of U.S. or overseas international systemically
essential banking organizations be amended to incorporate contractual restrictions on close-out and cross-default rights. QFCs embrace,
however aren’t restricted to, securities contracts, commodities contracts, ahead contracts, repurchase agreements, securities lending
agreements and swap agreements, in addition to associated grasp agreements, security agreements, credit score enhancements, and reimbursement
obligations. If a coated counterparty of an Account or sure of the coated counterparty’s associates had been to develop into topic
to sure insolvency proceedings, the Account could also be briefly unable to train sure default rights, and the QFC could also be
transferred to a different entity. These necessities might affect an Account’s credit score and counterparty dangers.

 

Repurchase agreements

 

Repurchase agreements are considered one of a number of
short-term autos the Accounts can use to handle money balances successfully. In a repurchase settlement, the Account buys an underlying
debt instrument on the situation that the vendor agrees to purchase it again at a hard and fast worth and time (normally not more than every week and
by no means greater than a 12 months). Repurchase agreements have the traits of loans by an Account, and will likely be absolutely collateralized
(both with bodily securities or proof of ebook entry switch to the account of the custodian financial institution) always. Throughout
the time period of the repurchase settlement, the Account coming into into the settlement retains the security topic to the repurchase settlement
as collateral securing the vendor’s repurchase obligation, regularly screens the market worth of the security topic
to the settlement, and requires the Account’s vendor to deposit with the Account extra collateral equal to any quantity
by which the market worth of the security topic to the repurchase settlement falls beneath the resale quantity offered beneath the
repurchase settlement. Every Account will enter into repurchase agreements solely with member banks of the Federal Reserve System,
or with major sellers in U.S. Authorities securities or their wholly owned subsidiaries whose creditworthiness has been reviewed
and located passable by TCIM and who’ve, subsequently, been decided to current minimal credit score danger.

Securities underlying repurchase agreements
will likely be restricted to certificates of deposit, industrial paper, bankers’ acceptances, or obligations issued or assured by
the U.S. Authorities or its companies or instrumentalities, through which the Account coming into into the settlement might in any other case make investments.

If a vendor of a repurchase settlement
defaults and doesn’t repurchase the security topic to the settlement, the Account coming into into the settlement would look to the
collateral underlying the vendor’s repurchase settlement, together with the securities topic to the repurchase settlement, for
satisfaction of the vendor’s obligation to the Account. In such occasion, the Account may incur disposition prices in liquidating
the collateral and may endure a loss if the worth of the collateral declines. As well as, if chapter proceedings are instituted
in opposition to a vendor of a repurchase settlement, realization upon the collateral could also be delayed or restricted.

 

Foreign money transactions

 

The worth of an Account’s property
(apart from the Cash Market Account) as measured in U.S. {dollars} could also be affected favorably or unfavorably by adjustments in overseas
forex alternate charges and alternate management rules, and the Account might incur prices in reference to conversions between
numerous currencies. To handle the affect of such elements on AUVs, the Accounts (apart from the Cash Market Account) might interact
in overseas forex transactions in reference to their investments in overseas securities. These transactions might also let TCIM
“lock in” alternate charges when shopping for or promoting overseas securities on behalf of the Accounts. The Accounts is not going to
speculate in overseas forex, and can enter into overseas forex transactions solely to “hedge” the forex danger
related to investing in overseas securities. Though such transactions have a tendency to reduce the danger of loss resulting from a decline
within the worth of the hedged forex, additionally they might restrict any potential achieve that may consequence ought to the worth of such forex
enhance.

The Accounts will conduct their forex
alternate transactions both on a spot (i.e., money) foundation on the price prevailing within the forex alternate market, or by way of ahead
contracts to buy or promote foreign currency echange. A ahead forex contract includes an obligation to buy or promote a selected
forex at a future date, which can be any mounted variety of days from the date of the contract agreed upon by the events, at a
worth set on the time of the contract. These contracts are entered into with giant industrial banks or different forex merchants that
are individuals within the interbank market.

 

22 Assertion of Extra Data  ■  Faculty
Retirement Equities Fund

By coming into right into a ahead contract
for the acquisition or sale of overseas forex concerned in an underlying security transaction, an Account is ready to shield itself
in opposition to doable loss between commerce and settlement dates for that buy or sale ensuing from an adversarial change within the relationship
between the U.S. greenback and such overseas forex. This apply is usually known as “transaction hedging.”
As well as, when it seems that a specific overseas forex might endure a considerable decline in opposition to the U.S. greenback, an Account
might enter right into a ahead contract to promote an quantity of overseas forex approximating the worth of some or all of its portfolio
securities denominated in such overseas forex. This apply is usually known as “portfolio hedging.” Equally,
when it seems that the U.S. greenback might endure a considerable decline in opposition to a overseas forex, an Account might enter right into a ahead
contract to purchase that overseas forex for a hard and fast greenback quantity.

The Accounts (apart from the Cash
Market Account) might also hedge their overseas forex alternate price danger by participating in forex monetary futures, choices and
“cross-hedge” transactions. In “cross-hedge” transactions, an Account holding securities denominated in
one overseas forex will enter right into a ahead forex contract to purchase or promote a distinct overseas forex (one which usually
tracks the forex being hedged with regard to cost actions). Such cross-hedges are anticipated to assist shield an Account in opposition to
a rise or lower within the worth of the U.S. greenback in opposition to sure foreign currency echange.

The Accounts (apart from the Cash
Market Account) might maintain a portion of their respective property in financial institution deposits denominated in foreign currency echange, in order to facilitate
funding in overseas securities in addition to shield in opposition to forex fluctuations and the necessity to convert such property into U.S.
{dollars} (thereby additionally decreasing transaction prices). Foreign money charges in overseas nations might fluctuate considerably over quick intervals
of time for quite a lot of causes, together with adjustments in rates of interest, intervention (or the failure to intervene) by U.S. or overseas
governments, central banks or supra-national entities such because the Worldwide Financial Fund, or by the imposition of forex
controls or different political developments in the US or overseas. To the extent these monies are transformed again into U.S.
{dollars}, the worth of the property so maintained will likely be affected favorably or unfavorably by adjustments in overseas forex alternate
charges and alternate management rules.

The forecasting of short-term forex
market motion is extraordinarily tough and whether or not a short-term hedging technique will likely be profitable is extremely unsure. Furthermore,
it’s inconceivable to accurately forecast with absolute precision the market worth of portfolio securities on the expiration of a
overseas forex ahead contract. Accordingly, an Account could also be required to purchase or promote extra forex on the spot market
(and bear the expense of such transaction) if TCIM’s predictions relating to the motion of overseas forex or securities
markets show inaccurate. As well as, using cross-hedging transactions might contain particular dangers, and should depart an Account
in a much less advantageous place than if such a hedge had not been established. As a result of overseas forex ahead contracts are privately
negotiated transactions, there might be no assurance that the Account could have flexibility to rollover the overseas forex ahead
contract upon its expiration if it wishes to take action. Moreover, there might be no assurance that the opposite get together to the contract
will carry out its obligations thereunder.

 

Swap transactions

 

Every Account (apart from the Cash
Market Account) might, to the extent permitted by the relevant state and federal regulatory authorities, enter into privately negotiated
“swap” transactions with different monetary establishments to be able to make the most of funding alternatives usually
not out there in public markets (generally called an over-the-counter, “OTC” or “uncleared” swap). In
basic, these transactions contain “swapping” a return based mostly on sure securities, devices, or monetary indices
with one other get together, corresponding to a industrial financial institution, in alternate for a return based mostly on totally different securities, devices, or monetary
indices.

By coming into right into a swap transaction,
an Account could possibly shield the worth of a portion of its portfolio in opposition to declines
in market worth. Every Account (apart from the Cash Market Account) might also enter into swap transactions to facilitate implementation
of allocation methods between totally different market segments or nations or to make the most of market alternatives which will come up
now and again. The Account could possibly improve its total efficiency if the return provided by the opposite get together to the swap
transaction exceeds the return swapped by the Account. Nevertheless, there might be no assurance that the return an Account receives from
the counterparty to the swap transaction will exceed the return it swaps to that get together.

In a credit score default swap, the credit score
default safety purchaser makes periodic funds, generally known as premiums, to the credit score default safety vendor. In return the credit score
default safety vendor will make a cost to the credit score default safety purchaser upon the prevalence of a specified credit score
occasion. A credit score default swap can check with a single issuer or asset, a basket of issuers or property or index of property, every recognized
because the reference entity or underlying asset. An Account might act as both the customer or the vendor of a credit score default swap. An
Account might purchase or promote credit score default safety on a basket of issuers or property, even when quite a lot of the underlying property referenced
within the basket are lower-quality debt securities. In an unhedged credit score default swap, an Account buys credit score default safety
on a single issuer or asset, a basket of issuers or property or index of property with out proudly owning the underlying asset or debt issued
by the reference entity. Credit score default swaps contain better and totally different dangers than investing straight within the referenced asset
as a result of, along with market danger, credit score default swaps embrace liquidity, counterparty and operational danger.

Credit score default swaps enable an Account
to accumulate or cut back credit score publicity to a specific issuer, asset or basket of property. If a swap settlement requires funds
by the Account, the Account should be ready to make such funds when due. If the Account is the credit score default safety vendor,
the Account will expertise a loss if a credit score occasion happens and the credit score of the reference entity or underlying asset has deteriorated.
If the Account is the credit score default safety purchaser, the Account will likely be required to pay premiums to the credit score default safety
vendor. Within the case of a bodily settled credit score default swap through which the Account is the safety vendor, the

 

Faculty Retirement Equities Fund  ■  Assertion of Extra Data 23

Account should be ready to pay par for
and take possession of debt of a defaulted issuer delivered to the Account by the credit score default safety purchaser. Any loss would
be offset by the premium funds the Account receives as the vendor of credit score default safety.

Whereas the Accounts will solely enter
into swap transactions with counterparties TCIM considers creditworthy (and can monitor the creditworthiness of events with which
it enters into swap transactions), a danger inherent in swap transactions is that the opposite get together to the transaction might default
on its obligations beneath the swap settlement. In occasions of basic market turmoil, the creditworthiness of even giant, well-established
counterparties might decline quickly. If the opposite get together to a swap transaction defaults on its obligations, the Account coming into
into the settlement can be restricted to the settlement’s contractual treatments. There might be no assurance that an Account will
succeed when pursuing its contractual treatments. To attenuate an Account’s publicity within the occasion of default, it can normally
enter into swap transactions on a internet foundation (i.e., the events to the transaction will internet the funds payable to one another earlier than
such funds are made). When an Account enters into swap transactions on a internet foundation, the online quantity of the surplus, if any, of
the Account’s obligations over its entitlements with respect to every such swap settlement will likely be accrued each day
and, beneath present regulatory necessities, an quantity of liquid property having an mixture market worth a minimum of equal to the accrued
extra will likely be segregated by the Account’s custodian. Underneath present regulatory necessities, to the extent an Account enters
into swap transactions apart from on a internet foundation, the quantity segregated would be the full quantity of the Account’s obligations,
if any, with respect to every such swap settlement, accrued each day. See “Segregated accounts” beneath.

Moreover, sure standardized
swaps that had been traditionally traded OTC should now be transacted by way of a futures fee service provider and cleared by way of a clearinghouse
that serves as a central counterparty (generally called a “cleared” swap). Alternate buying and selling and central clearing
are meant to scale back counterparty credit score danger and enhance liquidity, but it surely doesn’t make cleared swap transactions risk-free.
Relying on the scale of an Account and different elements, the margin required beneath the principles of a clearinghouse and by a clearing
member could also be in extra of the collateral required to be posted by the Account to help its obligations beneath the same uncleared
swap. Nevertheless, the CFTC and different relevant regulators have adopted guidelines imposing sure margin necessities, together with minimums,
on uncleared swaps which can lead to an Account and its counterparties posting larger quantities for uncleared swaps.

Along with different swap transactions,
sure Accounts might buy and promote Contracts for Distinction (“CFDs”). A CFD is a type of fairness swap through which its
worth relies on the fluctuating worth of some underlying asset (e.g., shares of a specific inventory or a inventory index). A CFD is
a contract between two events, purchaser and vendor, stipulating that the vendor pays to the customer the distinction between the
nominal worth of the underlying inventory on the opening of the contract and the inventory’s worth on the shut of the contract.
The dimensions of the contract and the contract’s expiration date are usually negotiated by the events to the CFD transaction.
CFDs allow an Account to take quick or lengthy positions on an underlying inventory and thus probably seize good points on actions in
the share costs of the inventory with out the necessity to personal the underlying inventory.

By coming into right into a CFD transaction,
an Account might incur losses as a result of it might face lots of the similar sorts of dangers as proudly owning the underlying fairness security straight.
For instance, an Account may purchase a brief place in a CFD and the contract worth on the shut of the transaction could also be better
than the contract worth on the opening of the transaction. This can be resulting from, amongst different elements, a rise available in the market worth
of the underlying fairness security. In such a state of affairs, the Account must pay the distinction in worth of the contract to
the vendor of the CFD. As with different sorts of swap transactions, CFDs additionally carry counterparty danger, i.e., the danger that the counterparty
to the CFD transaction could also be unable or unwilling to make funds or to in any other case honor its monetary obligations beneath the phrases
of the contract. If the counterparty had been to take action, the worth of the contract, and of the Account’s shares, could also be decreased.

Entry right into a CFD transaction might, in
sure circumstances, require the cost of an preliminary margin and adversarial market actions in opposition to the underlying inventory might require
the customer to make extra margin funds.

Sure Accounts might also spend money on
credit score default swaps (“CDS”). CDS are contracts through which the customer makes a cost or sequence of funds to the vendor
in alternate for a cost if the reference security or asset (e.g., a bond or an index) undergoes a “credit score occasion”
(e.g., a default). CDS share many dangers frequent to different sorts of swaps and derivatives, together with credit score danger, counterparty danger
and market danger. Sure Accounts might also spend money on credit score default swap indices (“CDX”). A CDX is a portfolio of credit score
default swaps with comparable traits, corresponding to credit score default swaps on high-yield bonds. Sure CDX indices are topic to
necessary central clearing and alternate buying and selling, which can cut back counterparty credit score danger and enhance liquidity in comparison with different
CDS or CDX transactions. As well as, there could also be disputes between the customer and vendor of a CDS settlement or inside the swaps
market as a complete as as to if a credit score occasion has occurred or what the cost ought to be. Such disputes might lead to litigation
or different delays, and the result could possibly be adversarial for the customer or vendor.

Swap agreements could also be illiquid and,
in such circumstances, could possibly be topic to the restrictions on illiquid investments. See “Illiquid investments” above.

To the extent that there’s an imperfect
correlation between the return on an Account’s obligation to its counterparty beneath the swap and the return on associated property
in its portfolio, the swap transaction might enhance the Account’s monetary danger. No Account will enter right into a swap transaction
that’s inconsistent with its funding goal, insurance policies and techniques. The Accounts (apart from the Cash Market Account)
might interact in swap transactions to hedge or handle the dangers related to property held in, or to facilitate the implementation
of portfolio methods of buying and promoting property for, the Account, to handle their money movement extra effectively and to hunt
to extend complete return.

 

24 Assertion of Extra Data  ■  Faculty
Retirement Equities Fund

Segregated accounts

 

In reference to when-issued securities,
agency commitments, swap transactions and sure different transactions through which an Account incurs an obligation to make funds in
the long run, beneath present regulatory necessities, the Account concerned could also be required to segregate property with its custodian
financial institution or inside its portfolio in quantities adequate to settle the transaction. To the extent required, such segregated property will
encompass liquid property, together with fairness or different securities, or different devices corresponding to money, U.S. Authorities securities or
different obligations as could also be permitted by regulation.

In October 2020, the SEC adopted Rule
18f-4 beneath the 1940 Act offering for the regulation of a registered funding firm’s use of derivatives and sure
associated devices. Underneath Rule 18f-4, a registered funding firm’s derivatives publicity is proscribed by way of a value-at-risk
check and the Rule requires the adoption and implementation of a derivatives danger administration program for sure derivatives customers.
Nevertheless, topic to sure circumstances, restricted derivatives customers (as outlined in Rule 18f-4) wouldn’t be topic to the complete necessities
of Rule 18f-4. Compliance with Rule 18f-4 will likely be required in August 2022. Because the Accounts come into compliance with Rule 18f-4,
the Accounts’ method to asset segregation and protection necessities will likely be impacted as a result of, in reference to the adoption
of Rule 18f-4, the SEC additionally eradicated the asset segregation framework arising from prior SEC steering for masking derivatives
and sure monetary devices, efficient as of the compliance date for the Rule. Rule 18f-4 might restrict an Account’s
means to interact in sure derivatives transactions and/or enhance the prices of such derivatives transactions, which might adversely
have an effect on the worth or efficiency of the Account.

 

Funding corporations

 

Funding Corporations. Topic
to sure exceptions and limitations, an Account might make investments as much as 5% of its property in any single non-affiliated funding firm
and as much as 10% of its property in all different non-affiliated funding corporations within the mixture. Nevertheless, no Account can maintain extra
than 3% of the whole excellent voting inventory of any single funding firm. When an Account invests in one other funding firm,
it bears a proportionate share of bills charged by the funding firm through which it invests. Moreover, an Account might
spend money on different non-affiliated funding corporations corresponding to exchange-traded funds (“ETFs”), for money administration and
different functions, topic to the restrictions set forth above. An Account might also use ETFs to realize publicity to sure sectors or
securities which can be represented by possession in ETFs.

In October 2020, the SEC adopted sure
regulatory adjustments and took different actions associated to the power of an funding firm to spend money on one other funding firm.
Compliance with these regulatory adjustments will likely be required by January 2022. These adjustments embrace, amongst different issues, amendments
to the present regulatory framework, the adoption of recent Rule 12d1-4 beneath the 1940 Act, and the rescission of sure exemptive
reduction issued by the SEC allowing such investments in extra of statutory limits and the withdrawal of sure associated SEC workers
no-action letters. These adjustments and actions might adversely affect every Account’s funding methods and operations.

Alternate-Traded Funds. Moreover,
sure Accounts might spend money on different sorts of funding corporations, which can embrace ETFs for money administration, funding publicity
or defensive functions. ETFs usually search to trace the efficiency of an fairness, fixed-income or balanced index by holding in
its portfolio both the contents of the index or a consultant pattern of the securities within the index. Some ETFs, nevertheless,
choose securities according to the ETF’s funding aims and insurance policies irrespective of the composition of an
index. Sometimes, an Account would buy ETF shares to acquire publicity to all or a portion of the inventory or bond market. An
funding in an ETF usually presents the identical major dangers as an funding in a standard inventory, bond or balanced mutual
fund (i.e., one that isn’t exchange-traded) that has the identical funding goal, methods, and insurance policies. The worth of an
ETF can fluctuate inside a variety, and an Account might lose cash investing in an ETF if the costs of the securities owned
by the ETF go down. As well as, ETFs are topic to the next dangers that don’t apply to standard mutual funds: (1) the
market worth of the ETF’s shares might commerce at a reduction or premium to their AUV; (2) an lively buying and selling marketplace for an ETF’s
shares might not develop or be maintained; or (3) buying and selling of an ETF’s shares could also be halted if the itemizing alternate’s
officers deem such motion acceptable, the shares are de-listed from the alternate, or the activation of market-wide “circuit
breakers” (that are tied to giant decreases in inventory costs) halts inventory buying and selling usually. Most ETFs are funding
corporations. Subsequently, an Account’s purchases of ETF shares usually are topic to the restrictions on an Account’s
investments in different funding corporations, that are described above beneath the heading “Funding corporations.” As
with different funding corporations, when an Account invests in an ETF, it can bear sure investor bills charged by the ETF.
Typically, an Account will deal with an funding in an ETF as an funding in the kind of security or index to which
the ETF is making an attempt to supply funding publicity. For instance, an funding in an ETF that makes an attempt to supply the return
of the fairness securities represented within the Russell 3000® Index will likely be thought of as an fairness funding by the
Account.

Alternate-Traded Notes (“ETNs”)
and Fairness-Linked Notes (“ELNs”).
An Account might buy shares of ETNs or ELNs. ETNs and ELNs are fixed-income
securities with principal and/or curiosity funds (or different funds) linked to the efficiency of referenced currencies, curiosity
charges, commodities, indices or different monetary indicators (every, a “Reference”), or linked to the efficiency of a
specified funding technique (corresponding to an choices or forex buying and selling program). ETNs are traded on an alternate, whereas ELNs are
not. Usually, ETNs and ELNs are structured as uncollateralized medium-term notes. Sometimes, an Account would buy ETNs or ELNs
to acquire publicity to all or a portion of the monetary markets or particular funding methods. As a result of ETNs and ELNs are structured
as fixed-income securities, they’re usually topic to the dangers of fixed-income securities, together with (amongst different dangers) the
danger of default by the

 

Faculty Retirement Equities Fund  ■  Assertion of Extra Data 25

issuer of the ETN or ELN. The worth of an
ETN or ELN can fluctuate inside a variety, and an Account might lose cash investing in an ETN or ELN if the worth of the Reference
or the efficiency of the required funding technique goes down. As well as, ETNs and ELNs are topic to the next dangers
that don’t apply to most fixed-income securities: (1) the market worth of the ETNs or ELNs might commerce at a reduction to the market
worth of the Reference or the efficiency of the required funding technique; (2) an lively buying and selling marketplace for ETNs or ELNs might
not develop or be maintained; or (3) buying and selling of ETNs could also be halted if the itemizing alternate’s officers deem such motion acceptable,
the ETNs are de-listed from the alternate or the activation of market-wide “circuit breakers” (that are tied to giant
decreases in inventory costs) halts inventory buying and selling usually.

When an Account invests in an ETN or
ELN, it can bear sure investor bills charged by these merchandise. Whereas ETNs and ELNs are structured as fixed-income obligations,
relatively than as funding corporations, they often present publicity to a specified market sector or index like ETFs, however are additionally
topic to the final dangers of fixed-income securities, together with danger of default by their issuers.

Typically, an Account will deal with an
funding in an ETN or ELN as an funding in the kind of security or index to which the ETN or ELN is making an attempt to supply
funding publicity. For instance, an funding in an ELN that makes an attempt to supply the return of the fairness securities represented
within the Russell 3000 Index will likely be thought of as an fairness funding by an Account, and never a fixed-income funding.

 

Overseas
investments

 

As described extra absolutely within the Prospectus,
sure of the Accounts might spend money on overseas securities, together with these in rising markets. Along with the basic
danger elements mentioned within the Prospectus and beneath, there are a variety of country- or region-specific dangers and different issues
which will adversely have an effect on these investments. Lots of the dangers are extra pronounced for investments in rising market nations,
as described beneath.

On December 31, 2021, overseas investments
(together with securities held as collateral for securities lending) represented the next percentages of market worth for every
Account:

 

  Inventory Account     %
  World Equities Account        
  Development Account        
  Fairness Index Account        
  Core Bond Account        
  Inflation-Linked Bond Account        
  Social Alternative Account        
  Cash Market Account        

 

To satisfy an Account’s funding
goal, the Board of Trustees or its Funding Committee can change the proportion of the portfolio dedicated to overseas investments,
topic to the bounds in CREF’s constitution.

Basic. Since overseas corporations
might not be topic to accounting, auditing or monetary reporting practices, disclosure and different necessities corresponding to these
relevant to U.S. corporations, there could also be much less publicly out there details about a overseas firm than a couple of U.S. firm,
and it might be tough to interpret the knowledge that’s out there. There could also be difficulties in acquiring or imposing judgments
in opposition to overseas issuers and it additionally is commonly tougher to maintain at the moment knowledgeable of company actions which have an effect on the costs
of portfolio securities. In sure nations, there may be much less authorities supervision and regulation of inventory exchanges, brokers
and listed corporations than in the US. Quantity and liquidity in most overseas markets are lower than in the US,
and securities of many overseas corporations have decrease total liquidity and are extra unstable than securities of comparable U.S.
corporations. However the truth that every Account usually intends to accumulate the securities of overseas issuers solely the place
there are public buying and selling markets, investments by an Account within the securities of overseas issuers might have a tendency to extend the dangers
with respect to the liquidity of the Account’s portfolio and the Account’s means to fulfill a lot of shareholder
redemption requests ought to there be financial or political turmoil in a rustic through which the Account has a considerable portion of
its property invested or ought to relations between the US and overseas nations deteriorate markedly. Securities might
commerce at worth/earnings multiples larger than comparable U.S. securities and such ranges might not be sustainable. Mounted commissions
on some overseas securities exchanges are larger than negotiated commissions on U.S. exchanges, though TCIM endeavors to attain
probably the most favorable internet outcomes on the Accounts’ portfolio transactions.

Overseas markets have totally different clearance
and settlement procedures, and in sure markets there have been occasions when settlements have been unable to maintain tempo with the
quantity of securities transactions, making it tough to conduct these transactions. Settlement practices for transactions in
overseas markets might differ from these within the U.S. markets. Such variations embrace delays past intervals customary within the United
States and practices, corresponding to supply of securities previous to receipt of cost, which enhance the probability of “failed
settlement.” The lack of an Account to make meant security purchases resulting from settlement issues might trigger the Account
to overlook engaging funding alternatives. Losses to the Account resulting from subsequent declines within the worth of portfolio securities,
or liabilities arising out of the Account’s incapacity to meet a contract to promote these securities, might consequence from failed
settlements. As well as,

 

26 Assertion of Extra Data  ■  Faculty
Retirement Equities Fund

proof of securities possession could also be
unsure in lots of overseas nations. Consequently, there’s a danger that an Account’s commerce particulars could possibly be incorrectly or
fraudulently entered on the time of the transaction, leading to a loss to the Account.

With respect to sure overseas nations,
there may be the opportunity of expropriation or confiscatory taxation, political or social instability, or diplomatic developments
that would have an effect on the Account’s investments in these nations. The economies of some nations differ unfavorably from the
U.S. financial system in such respects as progress of nationwide product, price of inflation, capital reinvestment, useful resource self-sufficiency,
and steadiness of funds place. As well as, the interior politics of some overseas nations aren’t as steady as within the United
States. Governments in sure overseas nations proceed to take part to a big diploma, by way of possession curiosity or
regulation, of their respective economies. Motion by these governments might have a big impact on market costs of securities
and cost of dividends. The economies of many overseas nations are closely dependent upon worldwide commerce and are accordingly
affected by protecting commerce limitations and financial circumstances of their buying and selling companions. The enactment by these buying and selling companions
of protectionist commerce laws might have a big adversarial impact upon the securities markets of such nations.

Terrorism and associated geopolitical dangers
have led, and should sooner or later lead, to elevated short-term market volatility and should have adversarial long-term results on world
economies and markets usually.

 

Funding and repatriation restrictions

 

Overseas funding within the securities
markets of sure overseas nations is restricted or managed to various levels. These restrictions restrict and, at occasions, preclude
funding in sure of such nations (particularly rising market nations) and enhance the associated fee and bills of Accounts investing
in them. These restrictions might take the type of prior governmental approval, limits on the quantity or kind of securities held by
foreigners, and limits on the sorts of corporations through which foreigners might make investments. Extra or totally different restrictions could also be imposed
at any time by these or different nations through which the Accounts make investments. As well as, the repatriation (i.e., remitting again to the
United States) of each funding revenue and capital from a number of overseas nations is restricted and managed beneath sure
rules, together with in some instances the necessity for sure authorities consents. The Accounts could possibly be adversely affected by delays
in or a refusal to grant any required governmental registration or approval for repatriation.

 

Taxes

 

The dividends and curiosity payable on
sure of the Accounts’ overseas portfolio securities could also be topic to overseas withholding and, in another instances, different
taxes, thus decreasing the online quantity of revenue out there for distribution to the Accounts’ individuals.

 

Rising market securities

 

TCIM considers an “rising market
security” to be a security that’s principally traded on a securities alternate of an rising market or that’s issued by
an issuer that’s positioned or has major operations in an rising market.

 

Rising markets

 

Investments in corporations domiciled in
rising market nations could also be topic to probably larger dangers than investments in corporations in developed nations. The
time period “rising market” describes any nation or market that’s usually thought of to be rising or creating by
main organizations within the worldwide monetary neighborhood, such because the Worldwide Finance Company, or by monetary {industry}
analysts like MSCI, Inc., which compiles the MSCI Rising Markets Index, and J.P. Morgan Chase & Co., which compiles a number of
fixed-income rising markets benchmarks; or different nations or markets with comparable rising traits. Rising markets
can embrace each nation on the planet besides the US, Canada, Japan, Australia, New Zealand and most nations positioned
in Western Europe. However the foregoing, the fixed-income portfolio administration crew usually views Israel as an rising
market.

Dangers of investing in rising markets
and rising market securities embrace: (i) much less social, political and financial stability; (ii) the smaller measurement of the
markets for these securities and the at the moment low or nonexistent quantity of buying and selling that leads to an absence of liquidity and in
better worth volatility; (iii) the shortage of publicly out there info, together with stories of funds of dividends or
curiosity on excellent securities, and fewer stringent regulation of accounting, auditing, monetary reporting and recordkeeping
necessities, which might have an effect on an Account’s means to judge potential portfolio corporations; (iv) sure nationwide
insurance policies which will prohibit an Account’s funding alternatives, together with restrictions on funding in issuers or industries
deemed delicate to nationwide pursuits; (v) native taxation; (vi) the absence of developed constructions governing non-public
or overseas funding or permitting for judicial redress for harm to personal property; (vii) the absence till lately, in
sure nations, of a capital construction or market-oriented financial system; (viii) the chance that current favorable financial
developments in sure nations could also be slowed or reversed by unanticipated political or social occasions in these nations; (ix) restrictions
which will make it tough or inconceivable for the Account to vote proxies, train shareholder rights, pursue authorized treatments, and
get hold of judgments in overseas courts; (x) the danger of uninsured loss resulting from misplaced, stolen, or counterfeit inventory certificates;
(xi) doable losses by way of the holding of securities in home and overseas custodial banks and depositories; (xii) heightened
alternatives for governmental corruption; (xiii) giant quantities of overseas debt to finance primary governmental duties that
might result in restructuring or default; (xiv) restricted authorized treatments for traders in rising markets (together with by-product
litigation) and a restricted means of U.S. authorities (e.g., SEC and U.S. Division of Justice) to convey actions in opposition to dangerous actors;
and (xv) heavy reliance on exports that could be severely affected by international financial downturns.

 

Faculty Retirement Equities Fund  ■  Assertion of Extra Data 27

As well as, some nations through which
the Accounts might make investments have skilled substantial, and in some intervals, extraordinarily excessive charges of inflation for a few years. Inflation
and speedy fluctuations in inflation charges have had and should proceed to have destructive results on the economies and securities markets
of sure nations. Additional, the economies of rising market nations usually are closely dependent upon worldwide commerce
and, accordingly, have been and should proceed to be adversely affected by commerce limitations, alternate controls, managed changes
in relative forex values and different protectionist measures imposed or negotiated by the nations with which they commerce.

The dangers outlined above are sometimes extra
pronounced in “frontier markets” through which an Account might make investments. Frontier markets are these rising markets which can be
thought of to be among the many smallest, least mature and least liquid, and consequently, the dangers of investing in rising markets
are magnified in frontier markets. This magnification of dangers is the results of quite a lot of elements, together with: authorities possession
or management of elements of the non-public sector and of sure corporations; commerce limitations; alternate controls; managed changes in relative
forex values and different protectionist measures imposed or negotiated by the nations with which frontier market nations commerce;
much less uniformity in accounting and reporting necessities; unreliable securities valuation; better danger related to custody
of securities; and the comparatively new and unsettled securities legal guidelines in lots of frontier market nations. As well as, the markets
of frontier nations usually have low buying and selling volumes, resulting in a better potential for excessive worth volatility and illiquidity.
This volatility could also be additional elevated by the actions of some giant traders. For instance, a considerable enhance or lower
in money flows of mutual funds investing in these markets might considerably have an effect on native securities costs and, subsequently, the
AUV of an Account. All of those elements might make investing in frontier market nations considerably riskier than investing in
different nations, together with extra developed and conventional rising market nations, and any considered one of them might trigger the AUV of
an Account to say no.

Funding in Canada. The United
States is Canada’s largest buying and selling associate and overseas investor, and developments in financial coverage do have a big
affect on the Canadian financial system. The increasing financial and monetary integration of the US, Canada, and Mexico by way of
the United States-Mexico-Canada Settlement (“USMCA”) (which changed the North American Free Commerce Settlement (“NAFTA”)
efficient July 1, 2020) has made, and can possible proceed to make, the Canadian financial system and securities market extra delicate to
North American commerce patterns. Development in creating nations abroad will possible change the composition of Canada’s commerce
and overseas funding composition within the close to future. The Canadian financial system suffered from a recession as a result of 2008–2009
worldwide financial downturn. The Canadian financial system has proven indicators of restoration from this recession, however there might be no assurance
that such restoration will likely be sustained. The relative power of the Canadian greenback in opposition to the U.S. greenback now and again
might negatively have an effect on Canada’s exporting industries. Reducing imports from Asian and European Union (“EU”)
producers, new or altering commerce rules, adjustments in alternate charges or a recession of the Chinese language or EU economies might
have an adversarial affect on the financial system of Canada.

Canada’s parliamentary system
of presidency is, typically, steady. Nevertheless, one of many provinces, Quebec, does have a separatist get together whose goal is to
obtain sovereignty and elevated self-governing authorized and monetary powers. As well as, the Canadian market is comparatively concentrated
in issuers concerned within the manufacturing and distribution of pure assets corresponding to forest merchandise, metals, agricultural merchandise,
and vitality associated merchandise like oil, fuel, and hydroelectricity. Accordingly, adjustments within the provide and demand of such commodity
assets, each domestically and internationally, can have a big impact on Canadian market efficiency.

Funding in Europe. The EU
is an intergovernmental and supra-national union of sure European nations, generally known as member states. A key exercise of the EU
is the institution and administration of a typical single market, consisting of, amongst different issues, a single forex and a typical
commerce coverage. Probably the most broadly used forex within the EU (and the unit of forex of the European Financial and Financial Union (“EMU”))
is the euro, which is in use in lots of the member states. Along with adopting a single forex, EMU member states usually
not management their very own financial insurance policies. As an alternative, the authority to direct financial coverage is exercised by the European Central
Financial institution and, consequently, EMU member states are considerably affected by fiscal and financial insurance policies applied by the EMU and
European Central Financial institution.

Whereas financial and financial convergence
within the EU might supply new alternatives for these investing within the area, traders ought to be conscious that the success of the EU is
not wholly assured. Europe should grapple with quite a lot of challenges, any considered one of which might threaten the survival of this monumental
endeavor. Many disparate economies proceed to regulate to a unified financial system, the absence of alternate price flexibility,
and the lack of financial sovereignty. Europe’s economies are various, its governments are decentralized, and its cultures
differ broadly. As member states unify their financial and financial insurance policies, actions in European markets will lose the profit
of diversification inside the area. Excessive unemployment might pose political danger. A number of member states may exit the union,
putting the forex and banking system in jeopardy. Main points at the moment dealing with the EU relate to its membership, construction,
procedures and insurance policies; they embrace the adoption, abandonment or adjustment of the constitutional treaty, the EU’s enlargement
to the south and east, and resolving the EU’s problematic fiscal and democratic accountability. All or any of those challenges
might have an effect on the worth of an Account’s investments economically tied to the EU.

The EU has been extending its affect
to the south and east. For former Iron Curtain member states, membership serves as a powerful political impetus to make use of tight fiscal
and financial insurance policies. However, a number of entrants lately are former Soviet satellites that stay burdened to numerous
extents by the inherited inefficiencies of centrally deliberate economies just like that which existed beneath the outdated Soviet Union.

As well as, sure member states in
the EU have needed to settle for help from supra-governmental companies such because the Worldwide Financial Fund and the European
Monetary Stability Facility. The European Central Financial institution has additionally intervened to buy

 

28 Assertion of Extra Data  ■  Faculty
Retirement Equities Fund

eurozone debt to be able to search to stabilize
markets and cut back borrowing prices. Responses to those monetary issues by European governments, central banks and others, together with
austerity measures and reforms, might not work, might lead to social unrest, and should restrict future progress and financial restoration or
produce other unintended penalties. Additional defaults or restructurings by governments and others of their debt might have extra
adversarial results on economies, monetary markets and asset valuations all over the world.

The EU has the most important financial system within the
world in response to information compiled by the Worldwide Financial Fund, and is anticipated to develop additional over the subsequent decade as extra
nations be a part of. Nevertheless, the EU’s financial progress has been beneath that of the US most years since 1990, and the
financial efficiency of sure of its key members is a matter of significant concern to coverage makers. Though financial circumstances
range amongst EU member states, there may be continued concern about nationwide stage help for the euro and the accompanying coordination
of fiscal and wage coverage of EU member states.

As well as, many EU members suffered
extreme financial declines throughout and after the 2008–2009 worldwide financial downturn. These declines led to fiscal crises
for the governments of sure members together with Portugal, Eire, Italy, Greece and Spain. Some EU member states required exterior
help to fulfill their obligations, and all of those member states run the danger of default on their debt, doable bailout by
the remainder of the EU or debt restructuring, which can require collectors to bear losses. These occasions adversely affected the alternate
price of the euro and should proceed to considerably have an effect on each nation in Europe, together with nations that don’t use the euro.
Sure of the bigger European economies have proven restricted indicators of restoration from the 2008–2009 worldwide financial downturn;
nevertheless, vital dangers nonetheless threaten the potential restoration, such as excessive official money owed and deficits, getting older populations,
over-regulation of non-financial companies and doubts in regards to the sustainability of the EMU. These nations might want to make
sure financial and political selections to be able to restore sustainable financial progress and monetary coverage. Whereas many initiatives
have been instituted to strengthen regulation and supervision of monetary markets within the EU, better regulation is anticipated in
the long run.

Additional, it’s doable that the euro might
be deserted sooner or later by EU member states which have already adopted its use, and the consequences of such an abandonment or
a member state’s compelled expulsion from the euro on that member state, on the EMU, and on international markets are inconceivable to
predict and could possibly be destructive. The exit of any member state out of the euro would possible have a big destabilizing impact
on all eurozone nations and their economies and a destructive impact on the worldwide financial system as a complete. As well as, beneath these
circumstances, it might be tough to worth investments denominated in euros or in a substitute forex.

In a June 2016 referendum, residents
of the UK voted to go away the EU. On January 31, 2020, the UK withdrew from the EU. Negotiators representing the UK and EU got here
to a commerce settlement on December 24, 2020. The settlement leaves many features of the UK-EU commerce relationship topic to additional
negotiation. However this settlement, there may be more likely to be appreciable uncertainty as to the UK’s post-transition
framework, and the framework will possible proceed to develop because the UK continues to barter totally different features of the buying and selling
association. It’s not doable to anticipate the long term affect to the financial, authorized, political, regulatory and social framework
that can consequence from any agreements between the UK and the EU. As well as, such agreements might result in ongoing political, regulatory
and financial uncertainty and intervals of exacerbated volatility in each the UK and in wider European markets for a while.

The affect of the UK’s withdrawal
on the UK and European economies and the broader international financial system could possibly be vital, leading to destructive impacts, corresponding to elevated
volatility and illiquidity, probably decrease financial progress and decreased asset valuations. The UK’s withdrawal from
the EU might have a destabilizing affect on the EU to the extent different member states equally search to withdraw from the union and
might trigger extra market disruption globally and introduce new authorized and regulatory uncertainties. It could even have a destructive
affect on the financial system and forex of the UK because of anticipated, perceived or precise adjustments to the UK’s financial
and political relations with the EU. The UK’s withdrawal might lead to decrease progress for corporations within the UK, EU and globally,
which might have an adversarial impact on the worth of an Account’s investments. An Account might make investments within the UK (throughout
the transition interval and afterwards), different EU members and in non-EU nations which can be straight or not directly affected by the
exit of the UK from the EU. All or any of those challenges might have an effect on the worth of an Account’s investments economically
tied to the UK or EU and should have an adversarial impact on the Account’s efficiency. Moreover, the willingness or means
of monetary and different counterparties to enter into transactions could also be affected by the UK’s withdrawal.

Funding in Japanese Europe.
Investing within the securities of Japanese European issuers includes dangers not normally related to investing within the extra developed
markets of Western Europe. Adjustments occurring in Japanese Europe at the moment might have long-term potential penalties. These adjustments
might lead to rising requirements of dwelling, decrease manufacturing prices, rising client spending and substantial financial progress.

Latest political and financial reforms
don’t eradicate the opportunity of a return to centrally deliberate economies and state-owned industries. Investments in Japanese
European nations might contain dangers of nationalization, expropriation and confiscatory taxation. In lots of the nations of Japanese
Europe, there is no such thing as a inventory alternate or formal marketplace for securities. Such nations might also have authorities alternate controls,
currencies with no recognizable market worth relative to the established currencies of Western market economies, little or no expertise
in buying and selling in securities, no accounting or monetary reporting requirements, an absence of a banking and securities infrastructure to
deal with such buying and selling and a authorized custom which doesn’t acknowledge rights in non-public property.

Japanese European markets are significantly
delicate to social, political, financial, and forex occasions in Russia and should endure heavy losses because of their buying and selling
and funding hyperlinks to the Russian financial system and forex. Russia additionally might try to say its affect within the area by way of
financial and even army measures, because it did with Georgia in 2008 and Ukraine starting in 2014. Because of current occasions
involving Ukraine and Russia, the US and different nations have imposed financial sanctions on sure Russian people
and monetary establishments. Japanese European markets will likely be considerably affected by the fiscal and financial controls

 

Faculty Retirement Equities Fund  ■  Assertion of Extra Data 29

of the EMU. Adjustments in rules on commerce,
reducing imports or exports, adjustments within the alternate price of the euro and recessions amongst European nations might have a big
adversarial impact on the economies of different European nations together with these of Japanese Europe.

Funding in Saudi Arabia. The
Saudi Arabian authorities exerts substantial affect over many features of the non-public sector. Whereas the political state of affairs in
Saudi Arabia is mostly steady, future political instability or instability within the bigger Center East area might adversely
affect the financial system of Saudi Arabia, significantly with respect to overseas investments. Sure issuers positioned in Saudi Arabia might
function in, or have dealings with, nations topic to sanctions and/or embargoes imposed by the U.S. Authorities and the United
Nations and/or nations recognized by the U.S. Authorities as state sponsors of terrorism. Investments in Saudi Arabia are additionally
topic to the danger of expropriation or nationalization of property or the danger of restrictions on overseas investments and repatriation
of capital.

Saudi Arabian issuers could also be impacted
by the numerous ties within the Saudi Arabian financial system to petroleum exports. Consequently, adjustments inside the petroleum {industry} might
have a big affect on the general well being of the Saudi Arabian financial system. Moreover, the Saudi Arabian financial system depends closely
on overseas labor and adjustments within the availability of this labor provide might have an adversarial impact on the financial system.

The power of overseas traders to
spend money on Saudi Arabian issuers is comparatively new and untested, and such means could also be revoked or restricted by the federal government
of Saudi Arabia sooner or later, which can materially have an effect on an Account. An Account could also be unable to acquire or preserve the required
licenses, which might have an effect on the Account’s means to purchase and promote securities at full worth. Moreover, an Account’s
possession of any single issuer listed on the Saudi Arabian Inventory Alternate could also be restricted by the Saudi Arabia Capital Market Authority
(“CMA”). The securities markets in Saudi Arabia might not be as developed as these in different nations. Consequently, securities
markets in Saudi Arabia are topic to better dangers related to market volatility, decrease market capitalization, decrease buying and selling
quantity, illiquidity, inflation, better worth fluctuations, uncertainty relating to the existence of buying and selling markets, governmental
management and heavy regulation of labor and {industry}. Main disruptions or regulatory adjustments might happen within the Saudi Arabian market,
which might negatively affect an Account.

An Account’s means to take a position
in Saudi Arabian securities relies on the power of TCIM and/or the Account to take care of its respective standing as a Overseas Portfolio
Supervisor and/or a Certified Overseas Investor (“QFI”), as relevant, with the CMA and, if relevant, an Account as
a shopper of a QFI who has been accepted by the CMA (“QFI Consumer”). QFI rules and native market infrastructure
are comparatively new and haven’t been examined and the CMA might discontinue the QFI regime at any time. Any change within the QFI system
usually, together with the opportunity of TCIM or an Account dropping its Overseas Portfolio Supervisor, QFI and/or QFI Consumer standing,
as relevant, might adversely have an effect on the Account.

Funding in Russia. Russia
has skilled political, social and financial turbulence because of a long time of Communist rule. As well as, there’s a heightened
danger of political corruption and weak and variable authorities oversight. To date, lots of the nation’s financial reform
initiatives haven’t but been applied or profitable. On this setting, there may be at all times the danger that the nation’s
authorities will abandon the present program of financial reform and change it with drastically totally different political and financial
insurance policies that will be detrimental to the pursuits of overseas traders.

Together with the final dangers of investing
in rising markets, investing within the Russian market is topic to vital dangers as a result of much less developed state of Russia’s
banking system and its settlement, clearing and securities registration processes as in comparison with extra developed markets. With the
implementation of the Nationwide Settlement Depository in Russia (“NSD”) as a acknowledged central securities depository,
title to Russian equities is now based mostly on the data of the NSD and never the native registrars. The implementation of the NSD is
usually anticipated to lower the danger of loss in reference to recording and transferring title to securities; nevertheless, loss
should happen. To the extent that an Account suffers a loss regarding title or company actions regarding its portfolio
securities, it might be tough for the Account to implement its rights or in any other case treatment the loss.

There may be little long-term historic
information on the Russian securities market as a result of it’s comparatively new, and a considerable proportion of securities transactions in
Russia are privately negotiated outdoors of inventory exchanges. The inexperience of the Russian securities market and the restricted quantity
of buying and selling in securities available in the market might make acquiring correct costs on portfolio securities from impartial sources extra
tough than in additional developed markets. Moreover, due to much less stringent auditing and monetary reporting requirements that
apply to corporations working in Russia, there may be little strong company info out there to traders. Consequently, it might
be tough to evaluate the worth or prospects of an funding in Russian corporations.

The USA and the regulatory
our bodies of sure different nations, in addition to the EU, imposed financial sanctions, which may encompass prohibiting sure securities
trades, sure non-public transactions within the vitality sector, asset freezes and prohibition of all enterprise, in opposition to sure Russian
people and Russian company entities. The USA enacted a regulation that codified and expanded present sanctions in opposition to
Russia and likewise licensed new sanctions. The EU might additionally broaden, strengthen and/or in any other case change present sanctions. These
sanctions, and even the specter of additional sanctions, might impair an Account’s means to spend money on securities it views as
engaging funding alternatives or to promote securities or different monetary devices as wanted to fulfill shareholder redemptions.
Such sanctions might consequence within the decline of the worth and liquidity profile of Russian securities, a weakening of the ruble or
different adversarial penalties to the Russian financial system. These sanctions might additionally consequence within the fast freeze of Russian securities,
or impair the marketplace for depositary receipts tied to such securities. Sanctions might additionally lead to Russia taking countermeasures
or retaliatory actions which can additional impair the worth and liquidity of Russian securities or depositary receipts tied to Russian
securities.

 

30 Assertion of Extra Data  ■  Faculty
Retirement Equities Fund

Funding in Latin America.
The historical past of sure Latin American nations has been characterised by political, financial and social instability, intervention
by the army in civilian and financial spheres, and political corruption. For traders, this has meant extra danger precipitated
by intervals of regional battle, political corruption, totalitarianism, protectionist measures, nationalizations, hyperinflation,
debt crises, sudden and enormous forex devaluation, and army intervention. Nevertheless, there have been adjustments on this regard,
significantly prior to now decade. Democracy is turning into properly established in some nations. A transfer