SUBJECT:  A Message From The University of California's Treasurer

For your information, the following item is an official message from David H. Russ, Treasurer and Vice President for Investments for the University of California.

If you have questions concerning this Notice, please contact Jackie Edwards, Human Resources Department Benefits Manager, at joedwards@ucsd.edu or (858) 534-5634.

                                                Rogers Davis
                                                Assistant Vice Chancellor -
                                                Human Resources

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A Message from the Treasurer

Dear UC Community:

With the stock market's latest decline and news about corporations' accounting problems, you may be wondering how the University's Retirement Plan is faring in this downturn. We want to assure you that the University's Retirement Plan equity remains strong; benefits to retirees will not be affected; and employees' future pension benefits are secure.

The UC Retirement Plan is a balanced portfolio, with investments in a variety of asset classes designed to reduce risk. Thus, while the major U.S. equity markets declined anywhere from 18-32% over the past year, our plan's total portfolio performed much better, thanks in part to a 9.5% gain in its bond portfolio.

UC's approach to the market is to maintain a diversified portfolio and carefully select its stock investments for long-term returns. Over the past two years, The Regents have also adopted policies to further diversify the investment portfolios to include additional asset classes that minimize the impact of any losses in individual companies and industries.

The results of UC's invest-for-the-long-term strategy have been quite successful. As a result, no employee has had to pay into the UCRP since 1990.

While the stock markets have been very weak recently, it is important to see the big picture. Stocks have provided attractive returns over the long term, with the S&P 500 Index showing an average annualized return of more than 10% over the past decade.

We will keep you informed of any important news regarding Retirement Plan investments as circumstances warrant. In the meantime, you may wish to consult the following online resources regarding the University's retirement plan and your investments, including your 403(b) and defined contribution plans:

A Message from the Treasurer about Equity Investing
< http://www.ucop.edu/treasurer/updates/equity_investing.pdf>

UC Retirement System Adds Treasury Inflation Protected Securities (TIPS)

Performance Information about UC's Tax-Deferred 403(b) and Defined Contribution Plans
< http://www.ucop.edu/bencom/rs/perform.html>
Calculate Your Retirement Savings and Tax Benefits
< http://www.ucop.edu/bencom/rs/fortune/index.html>

                                                Sincerely,

                                                David H. Russ
                                                Treasurer and Vice President
                                                for Investments