Your workplace 403(b) retirement plan with VALIC affords you an excellent opportunity to accumulate money for your future. You contribute pretax dollars automatically by convenient payroll reduction, which might lower current income taxes. Your account also benefits from tax-advantaged growth.

You are immediately eligible to begin contributing to the plan.

It’s easy to join – simply decide how much you want to save and how you want to invest contributions to your account. To enroll online, click here or contact your financial advisor for enrollment assistance.

Generally, you may contribute as much as 100% of your annual includible compensation up to $17,000 in 2012. You may increase or decrease the amount you contribute to the plan as often as your employer allows.

You may be able to contribute up to an additional:

• $3,000 if you have 15 or more years of service, work for a qualifying employer and have undercontributed in prior years, and

• $5,500 in 2012 if you are age 50 or older.

You may change your contribution amount or discontinue contributing to your plan at any time. You will have to fill out a Salary Reduction Agreement and fax to the University Treasurer's Office at (774) 455-7592, Attn: 403(b) Plan Administrator. In the meantime, your account will continue to grow on a tax-deferred basis. Please allow one month’s notice for processing.

You are always 100% vested in your own contributions.

You may access your account, 24 hours a day, seven days a week from anywhere, at any time by way of the following:

• VALIC Online by accessing Access Your Account from the home page of this web site

• VALIC by Phone at 1-800-448-2542

VALIC sends all active participants a comprehensive account statement every calendar quarter. This statement documents the activity in your account for the preceding period, including total contributions and transfers among investment options.

You might be able to transfer your vested retirement account balance from a prior employer’s plan to your current workplace retirement plan with VALIC. This can be an excellent way to simplify your financial profile and to ensure your overall investments are suitably diversified and consistent with your investment preferences. However, before you make that decision, check to see if the other provider’s contract imposes surrender charges.

You may choose to participate in Guided Portfolio Services (GPS), a fee-based program that provides independent investment advice and asset management through our association with Ibbotson Associates, Inc. GPS offers two levels of service – one for those who seek professional, full-time management of their assets, and another for those who prefer to manage their own accounts, but still want input and/or advice.

Regardless of the level of service you choose, you'll receive comprehensive investment advice, including wealth forecasting, asset allocation and investment selection. For more information, contact your local financial advisor.

All contributions to your plan will be invested in the Portfolio Director Fixed and Variable Annuity (Portfolio Director). You can invest in one or a mix of up to 20 options at a time. And with Portfolio Director, you have the freedom to transfer money among the variable and fixed options1 without charges or tax consequences, subject to certain limitations as detailed in your prospectus. Fixed options can restrict when and how much you can transfer to other investments and how much you may withdraw from the plan in a single year. Remember that annuities are long-term investments, and the value of the variable options you choose will fluctuate so that your investment values might be worth more or less than the original cost.

Tax-free loans make it possible for you to access your account without permanently reducing your account balance. (Defaulted loan amounts will be taxed as ordinary income and may be subject to a 10% tax penalty if the employee is under age 59½.)

In the event of your death prior to annuitization, VALIC offers a death benefit. Whether you contribute to fixed or variable investment options, VALIC guarantees that your beneficiary will never receive less than the amount contributed provided no withdrawals have been made from the account. Withdrawals will reduce the death benefit, depending on the account value at the time of withdrawal. All guarantees are backed by the claims-paying ability of The Variable Annuity Life Insurance Company (VALIC). See your prospectus for details.

Also, in the event of your death, the benefit passes directly to your named beneficiary. This generally avoids the costs and delays of probate. Your beneficiary can leave all or a portion of the account balance on deposit, depending on the circumstances. Usually, your beneficiary can make withdrawals at any time without VALIC charges, subject to tax laws that might require distributions to occur within certain time frames. There also will be no VALIC charges if the beneficiary chooses to withdraw the entire account balance.

Your plan was established to encourage long-term savings, so withdrawals prior to age 59½ may be subject to federal restrictions and a 10% federal tax penalty.

Generally, depending on your employer’s plan provisions, you may withdraw your account balance if you meet one of the following requirements:

• Attaining age 59½

• Retirement or separation from service

• Your death or total disability

• Hardship

• The following are some events upon which you may withdraw vested amounts without incurring a 10% federal tax penalty:

• Attaining age 59½

• Separation from service at or after age 55

• Your death or total disability

• Taking substantially equal payments after separation from service for a period of five years or attainment of age 59½, whichever is later.

In addition, you must begin taking distributions once you reach age 70½ or you retire, whichever is later.

Depending on your employer’s plan provisions, your withdrawal options include:

• Transferring your vested account balance over to another tax-advantaged plan that accepts rollovers

• Receiving systematic or partial withdrawals

• Taking a lump-sum distribution

• Choosing one of the many annuity options available from VALIC

• Deferring distributions until a later date (but no later than attainment of age 70½) if you are no longer working, allowing your account to continue to grow tax deferred.

Generally, income taxes must be paid on all amounts you withdraw from your plan.

Consult your financial advisor for more specific information.

• More than 60 fixed and variable investment options

• Spanning major asset categories and classes

• Managed by well-known investment managers

• No initial sales charge

• No account maintenance fees

• Easy access to your account

   o No-cost systematic and random transfers among investment options

   o No-cost withdrawals or surrenders

• Multiple income options at retirement

• Portability to maintain continuity if you relocate or change jobs (Portfolio Director may not be available in some states or in some workplace retirement plans)

• Separate Account fees (0.55% to 1.05%) and Fund Annual Expenses apply depending on your contract and the variable option selected. The total current Annual Net Fund Expense is .25% to 1.35%. The current Annual Net Fund Expense is the current annual total fund expense less expense waivers or reimbursements. Fees are subject to change.

Amounts held in your workplace retirement plan(s), as well as in IRAs, are generally tax-deferred (and subject to required minimum distributions), regardless of whether they are used to fund an annuity or another qualifying arrangement, such as a trust or custodial account. Bear in mind that annuities also provide additional features and benefits, including, but not limited to, a guaranteed death benefit and guaranteed lifetime income options, for which a Separate Account fee is charged.

Contributions to your Portfolio Director annuity contract can qualify to be tax-deferred, subject to applicable contribution limits and related rules. That tax deferral is a result of issuing the contract, which satisfies specific important tax law requirements, including plan requirements, under your workplace retirement plan. It does not result from the mere fact that the contract is an annuity. Therefore, you do not receive any additional tax-deferred treatment of earnings beyond the treatment provided by the tax-qualified retirement plan itself.

Generally, higher potential returns involve greater risk and short-term volatility. For example, small-cap, mid-cap, sector and emerging funds can experience significant price fluctuation due to business risks and adverse political developments. International (global) and foreign funds can experience price fluctuation due to changing market conditions, currency values, and economic and political climates. High-yield bond funds, which invest in bonds that have lower ratings, typically experience price fluctuation and a greater risk of loss of principal and income than when investing directly in U.S. government securities such as U.S. Treasury bonds and bills, which are guaranteed by the government for repayment of principal and interest if held to maturity. Mortgage-related funds' underlying mortgages are more likely to be prepaid during periods of declining interest rates, which could hurt the fund's share price or yield and may be prepaid more slowly during periods of rapidly rising interest rates, which might lengthen the fund's expected maturity. Investors should carefully assess the risks associated with an investment in the fund. Fund shares are not insured and are not backed by the U.S. government, and their value and yield will vary with market conditions.