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State of New Jersey Alternate Benefit Program DEPARTMENT OF THE TREASURY DIVISION OF PENSIONS AND BENEFITS

STATE OF NEW JERSEY

DIVISION OF PENSIONS AND BENEFITS ALTERNATE BENEFIT PROGRAM To members of the Alternate Benefit Program: It has often been said that retirement planning should begin on the day that you commence employment. This statement seems particularly appropriate for your enrollment in the New Jersey Alternate Benefit Program (ABP), because it is a retirement plan in which you play an active role in establishing financial goals, evaluating investment options, and monitoring your retirement portfolio. Whether you are a new participant or have been enrolled in the ABP for many years, you have a continuing opportunity to manage your financial affairs in the manner you deem best suited for your needs, time horizons and risk tolerance. The Alternate Benefit Program is a defined contribution plan that offers substantial opportunities for long-term tax-deferred investment. Six investment carriers are authorized to provide investment options and services in the ABP. This booklet provides an overview of the plan and a brief introduction to the investment carriers. You may direct your ABP contributions to any or all of the companies, and you may also transfer existing account accumulations from one to another. Other ABP features include loans and, at retirement or separation from service, cash distributions and annuity options. The specific plan provisions, requirements and restrictions are detailed in other ABP publications and investment prospectuses. You should, of course, carefully review this material prior to making any investment decision. The array of investment options offered in the ABP provides substantial flexibility for fashioning retirement investment strategies that can accommodate many different personal circumstances and goals. The Division of Pensions and Benefits trusts that your participation in this plan will provide you with substantial long-term financial security and stability.

State of New Jersey Division of Pensions and Benefits

Alternate Benefit Program The Alternate Benefit Program (ABP) is a defined contribution retirement program for eligible employees of the public institutions of higher education in New Jersey. In addition to retirement benefits, the ABP provides members with life insurance and disability coverage. The program allows members to direct their own retirement accounts while offering portability of accumulated contribution balances. Vested members are permitted to allocate and transfer employer and employee contributions to any one or combination of authorized investment carriers. The variety of investment choices and distribution methods offered by the authorized carriers provide members flexibility in meeting their retirement goals. Summary of Benefits · Member contributions on a tax-deferred basis · Tax-deferred employer contributions · Employer-provided group life insurance for eligible active and retired members · Disability benefits if permanently disabled · Loans through the member's investment carrier(s) · A variety of retirement plan options, including lump sum distribution · State-paid health insurance coverage in the State Health Benefits Program if the member retires and has 25 years of ABP service. Mandatory Contributions The member and employer make regular tax-deferred contributions toward retirement savings. Members contribute 5% of base salary and employers contribute 8% of base salary. Voluntary Additional Contributions Under the voluntary 403(b) component of the program, members may make additional contributions on a tax-deferred basis. Members are required to complete a Salary Reduction Agreement to participate. Federal income tax will be deferred on the ABP contributions. However, the calculation of State income taxes, Social Security taxes and other benefits based upon compensation will not be affected. To determine the total percentage of salary a member may defer, a tax deferral calculation must be performed. Life Insurance (Active) Employer-paid group life insurance is provided for all eligible members. No medical examination is required unless the member attained the age of 60 prior to enrollment. Coverage equals three and one half times base salary.

Life Insurance (Retired) Retired members are eligible for paid group life insurance coverage of one-half of base salary if all of the following criteria are met: · 10 years or more of pension service credit · At least age 60 at retirement · Benefits are received within 12 months of the termination of employment, and · Covered by ABP group life insurance plan immediately prior to retirement Life Insurance Conversion When life insurance coverage reduces or ends (at retirement, termination of employment or approved leave of absence), members can convert all or a portion of group life insurance to an individual policy within 31 days by contacting Prudential at 1-800-262-1112 with the policy number G14800.

Long-Term Disability Members are eligible for employer-paid long-term disability after one year of participation in ABP Benefits begin after six months of continuous disability. The plan pays 60% of monthly base salary (reduced by other periodic benefits such as shortterm disability income and Social Security), if totally and permanently disabled. The minimum benefit is $50 per month. In addition, the basic 5% contribution that the member would have been required to make while actively working, is made by the carrier (Prudential Insurance Company). The employer continues to contribute 8% of 1 base salary. Loans Vested members of the Alternate Benefit Program are eligible to receive loans based on their account balances. Members should contact their investment carrier(s) for applications and repayment procedures. Retirement And Cash Distributions A member of the ABP becomes eligible to commence distributions at any age upon termination of employment or retirement. Members may receive benefits in the form of an annuity or cash distribution. Annuity benefits will be calculated by the investment carrier(s) based upon the account accumulation, life expectancy and the distribution option selected. Cash distributions to members under the age of 55 are limited to their employee contributions and accumulations. The remaining employer contributions and earnings are available for distribution upon attaining age 55. Once a member starts collecting benefits from their ABP account (annuity or cash) they are not eligible to enroll in any New Jersey state-administered retirement system nor are they eligible to re-enroll in the Alternate Benefit Program. Employment After Retirement Retired ABP members can return to public employment (including employment covered by ABP) and continue to receive benefits. However, retired members are not eligible for group life insurance or disability insurance. Additionally, retired members will not accrue service credit toward employer-paid health coverage. Certain restrictions may apply to the benefits and features described. For more information, contact your Campus Human Resources Office or the Division of Pensions and Benefits.

State of New Jersey Alternate Benefit Program Providers

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AEtna

Aetna Life Insurance and Annuity Company 151 Farmington Avenue Hartford, CT 06156 1-800-558-6466 - Local Service & Literature 1-800-262-3863 - Customer Account Service

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LINCOLN LIFE

Lincoln National Life Insurance Company Peter C. Ward, CFP 1100 E. Hector St., Suite 318 Conshohocken, PA 19428 1-800-432-9021

™

A Division of Metropolitan Life Insurance Company, NY, NY Met Life Securities, Inc., Supervisory Office, 1125 17th Street, Denver, CO 80202 Message Center 800 492-3 553 ext. 1862 Account Information 800 962-8320 Variable annuities and variable Life insurance offered through Metropolitan Life Insurance Company. Mutual Funds and financial planning offered through MetLife Securities, Inc., a subsidiary of Metropolitan Life Insurance Company.

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Teachers Insurance and Annuity Association College Retirement Equities Fund 730 Third Avenue New York, NY 10017-3206

TIAA CREF

If you have any questions about TIAA-CREF's products and services, please call our Individual Consultants in the Participant Information Center between 8:00 a.m. - 8:00 p.m. 1-800-842-2776 —————————————————————————————————————————————————————

THE COPELAND COMPANIES Personal Retirement Planning Specialists Representing. ..

Travelers Insurance A Member of TravelersGroup The Travelers Insurance Company

The Copeland Companies Metro Corporate Campus I 99 Wood Avenue South, Suite 301 Iselin, New Jersey 08830 Phone: (908) 906-5600 (800) 545-0108 ————————————————————————————————————————————————————— America's Retirement Plan Specialists

VALIC

®

An American General Company

VALIC New Jersey Regional Office 90 Woodbridge Center Drive, Suite 410 Woodbridge, NJ 07095 (908) 750-5611 or 1-800-44-VALIC Fax: (908)636-9350

AEtna

Aetna Life Insurance and Annuity Company 151 Farmington Avenue Hartford, CT 06156 1-800-558-6466 - Local Service & Literature

Aetna Life Insurance and Annuity Company, ALIAC, welcomes the opportunity to provide our variable annuity contract to all eligible participants of the New Jersey Alternate Benefit Program (ABP). We're a company that gives you extensive investment choice for your retirement plan, plus contract flexibility and outstanding customer service. It is our goal to make retirement easy for you. In fact, "Retirement Made Easy" is the theme of a program we developed to educate participants on the process of saving to ensure a comfortable retirement. All our brochures, seminars and services are targeted towards helping you not only understand our product and investment options, but to also provide you with fundamental retirement planning principles that can help you take advantage of your earning years. Since every investor 's investment preferences and risk tolerances are different, ALIAC offers ABP members, a wide range of investment options. You may diversify your investment by selecting any number of these options. And you have the flexibility to make changes as your economic circumstances and financial objectives change. Some investment options are managed by ALIAC and others are managed by highly regarded independent fund managers. Availability of existing investment options and the addition of others depends upon the New Jersey ABP Contract. Every ABP member will receive individual attention from a local retirement planning specialist. The specialist will review the investment options, contract provisions, and loan features available to you. Utilizing computer lap top programs, the specialist can provide you with sample illustrations based upon your personal account participation and financial objectives. Every College (and Campus) will be assigned an ALIAC retirement planning specialist to ensure personal meetings and routine campus visits are constantly available and maintained. You can check the status of your account anytime, 24 hours a day. Our toll-free customer account services line will provide up-to-date information on account values, contributions to date, unit value information, etc. In addition, you can make an investment change right over the phone and we'll send you a notice confirming the change. Each quarter, we'll send you a statement summarizing your account activity. Also, we'll include a news-letter featuring articles on retirement planning, new service innovations, and other pertinent information.

Your retirement security could depend upon the decisions you make today. You can be confident ALIAC will deliver the investment choices, plan flexibility, and quality services you need. Find out about an ALIAC tax deferred annuity by calling our toll-free number (1-800558-6466). We'll provide you with prospectuses and literature containing more complete information, including charges and expenses. Read the prospectuses carefully before you invest. Securities are distributed by Aetna Investment Services, Inc.

LINCOLN LIFE Lincoln Life is proud to be a part of the New Jersey Alternate Benefit Program. Lincoln Life has been the #1 writer of individual annuities for the past three years (Best's Review, Nov. 1992 and 1993, Oct. 1994) by providing people like you with superior service and competitive investment choices. The Alternate Benefit Program (ABP) offers you the advantages of directing your own retirement money, portability, and a variety of investment choices. Lincoln Life can help you maximize the ABP advantages with the Multi Fund" Variable Annuity contract which offers: Multiple Investment Options and Managers The Multi Fund" contract offers a variety of variable funds with well-known investment managers like Fidelity, Janus and Putnam. Free Transfer Privileges At no charge, you can transfer your money among the Lincoln variable funds by simply calling our toll-free line. Loan Provisions Loans are available at low interest rates. No Surrender/Withdrawal Charges · If you retire or terminate employment for any reason. · Annuity payments of 36 months or more. · Death. · For a transfer of all variable funds and 20% of the fixed funds. each year to any other approved carrier for the New Jersey ABP No Administrative Maintenance Fee There are no annual administrative or maintenance fees deducted from your account. Information Access Our automated touch-tone phone service provides access to contract account values, unit value information, transfer of funds, and withdrawal information, and other personal service needs 24 hours a day. Retirement Planning Assistance A local Lincoln Life representative is available to assist you with your retirement planning needs from enrollment to retirement. Our representatives specialize in retirement planning and understand the need for personalized service. To learn more about how Lincoln Life can help you save for retirement, call us toll-free at 1-800-432-9021. There's no obligation, but it just may be the most important choice you make about the ABP and your retirement. Lincoln National Life Insurance Co. is an affiliate of Lincoln National Corp.

MetLife

Fidelity Investments

Calvert Group

METLIFE FINANCIAL FREEDOM ACCOUNT VARIABLE ANNUITY "The New Tradition in Retirement Planning" Many people think of retirement as worry free years-a time to enjoy all those things you've never had time for travel, hobbies, family... and retirement should be that. The Financial Freedom Account variable annuity offers two very important features concerning your retirement planning-growth potential and Choice. Your dollars have the opportunity to Grow to their fullest potential to help you achieve financial security tomorrow ...and you have the freedom to Choose from a variety of funding options, and have access to your monies when you may need them most. Professional Investment Management: MetLife Fidelity Investments Calvert Group Funding Option Categories: Fixed Interest Aggressive Equity Domestic Bonds Diversified

Growth Equity International Equity Socially Responsible

Issuer: Metropolitan Life Insurance Company, New York, NY Transfers Between Options: Unlimited transfers are permitted among the variable funding options. Transfers of up to 20% of the Fixed Interest Account balance maybe made once per certificate year. Benefit Sensitivity: No withdrawal charge will apply: At retirement 'Upon separation from service 'To purchase a life annuity or an income plan for noncommutable period of 5 years or more

Systematic Withdrawal:

Death Benefit :

A full withdrawal may be made from the MetLife Fixed Interest Account in 5 substantially equal payments over a period of 4 years The greatest of the account value, total contributions less any

partial withdrawals, or the highest account value as of 12/31 following any 5th year certificate anniversary less any subsequent withdrawals or outstanding loan balances Contact People: Stephan DiPierno, Acct. Exec. OR Mark Stuart, Reg. Sales Mgr. 1(800) 492-3553 ext.1862 1(800) 492-3553 ext.1729 Please call for a free Financial Freedom Account prospectus which includes more complete in formation, including charges and expenses. Please read the prospectus carefully before you invest or send money. Metropolitan Life Insurance Company New York, New York

950212X(exp0296)MLIC-LD

TIAA-CREF: The Retirement Experts TIAA-CREF has been providing retirement benefits to members of the education and research communities for over 75 years. TIAA is the third largest life insurance company in the nation, and CREF is an investment company registered with the SEC. Together, nonprofit TIAA-CREF is the nation's largest pension system, with over $135 billion in assets, 5,200 participating institutions and 1.7 million participants. Let's take a quick glance at what TIAA-CREF offers: Safety: Based upon its claims-paying abilities, TIAA has the highest possible ratings from the insurance industry's leading ratings agencies -- Standard and Poor's, Duff & Phelps, Moody's, and A.M. Best Co. (These ratings don't apply to CREF, an investment company). Investment Choices: The TIAA traditional annuity guarantees principal and interest; CREF's variable annuity offers seven distinct investment accounts: the Stock, Money Market, Bond Market, Social Choice, Global Equities, Growth and Equity Index Accounts. Investment Flexibilities: You can allocate contributions to any combination of TIAA and the CREF Accounts, and change your allocation at any time, with no fees or charges. You may also transfer accumulated funds within CREF, or to TIAA, at any time, without restriction (minimum transfer is $1,000). Transfers from TIAA must be at least $10,000 and are made over a 10 year period in substantially equal installments. Distribution Options: At retirement, you can select interest-only payments from TIAA, lifetime annuities, full or partial cash withdrawals from CREF, a ten-year payout from TIAA, minimum distribution payments or any combination of these options. Low Expenses: According to Standard and Poor's Insurance Ratings Analysis 1994 and Lipper Analytical Services, Inc., Lipper-Director 's Analytical Data, 1994 (Quarterly), our expenses and operating costs are among the lowest in the mutual fund and insurance industries. Plus, our Individual Consultants are dedicated retirement specialists, not commissioned salespeople, so more of your retirement dollars are working for you. Services: You'll receive a report each quarter which summarizes all transactions, such as contributions, transfers and opening/closing accumulations. Plus, your annual Annuity Benefits Report will provide year-end balances and an estimate of your retirement income. And our toll-free telephone network is there for you, whenever you need it: Participant Information Center: 1 800 842-2776 Automated Telephone Service: 1 800 842-2252 Tax-Deferred Annuities Calculation Unit: 1 800 842-2733, ext. 2929 Life Insurance and TDA Planning Center: 1 800 223-1200

TIAA CREF

Teachers Insurance and Annuity Association College Retirement Equities Fund 730 Third Avenue New York, NY 10017-3206

THE COPELAND COMPANIES On Campus Counselors

Representing

Travelers Insurance A Member of TravelersGroup Year Founded - 1863 · Assets - $32 Billion

•Iselin •East Brunswick Service Centers

Each pay, over 18, 000 New Jersey public employees currently contribute to a tax-deferred retirement program serviced by The Copeland Companies. These individuals are implementing their plan for financial independence. Our fully staffed service center is located in Metro Corporate Campus in Iselin and our National headquarters is in East Brunswick, NJ.

THE TRAVELERS INSURANCE COMPANY · Competitive Fixed Interest Rate —————————————————————————————————————————————————————

· Experienced Fund Managers (Options under The Travelers Universal Annuity) —————————————————————————————————————————————————————

· Fund Transfers As Often As You Wish —————————————————————————————————————————————————————

· Complete Range of Retirement Payout Options, including lump sum withdrawals —————————————————————————————————————————————————————

· Attractive Loan Provisions PERSONAL INVESTMENT SERVICES · Personal Asset Diversification Program —————————————————————————————————————————————————————

· Computerized Personal Investment Profiling —————————————————————————————————————————————————————

· On-Campus Investment Counselors —————————————————————————————————————————————————————

· Contribution Limits Calculation Guarantee —————————————————————————————————————————————————————

· Group Meetings/Individual Counseling —————————————————————————————————————————————————————

For more information, including fees, charges, and expenses, your Copeland Account Executive will give you each applicable prospectus, disclosure statement, and investment advisory agreement. You should carefully read all investment information before you decide to direct investment. Elizabeth O'Brien · REGIONAL MANAGER The Copeland Companies Metro Corporate Campus I, Iselin (908) 906-5600 .(800)545-0108 . FAX(908) 906-5656

Michael St. Clair · PRESIDENT, EDUCATION GROUP The Copeland Companies Two Tower Center, East Brunswick (908) 214-2000 . FAX(908) 214-2027

Copeland Associates, Inc. • Copeland Equities, Inc.

Portfolio Director: VALIC®

"Bankers Trust Company "Dreyfus "T. Rowe Price "Franklin Templeton

Introducing Portfolio Director from VALIC. Portfolio Director, VALIC's combination fixed and variable annuity, offers New Jersey Alternate Benefit Program participants a broad selection of investment options and access to professional fund managers. This program also provides a method for selecting investments and combining them to create a diversified retirement portfolio. Portfolio Director features: CProfessional Investment Management Portfolio Director gives you access to widely known fund managers and subadvisers, including Bankers Trust, Dreyfus, T Rowe Price, Templeton and VALIC. C A wide array of investment options from nine asset classes C Investment Flexibility ·Invest in one fund option or a mix of up to seven options at a time ·No-cost, unlimited transfers among fund options ·Transfer up to 20% of Fixed Account Plus balance each contract year C Accessibility · No contract withdrawal or surrender charges · Policy loans (subject to employer plan restrictions) C No Sales Charges Or Maintenance Fees · No sales charges to reduce your contributions · No annual contract maintenance fees C Personal, One-To-One Service VALIC retirement plan specialists are assigned to every college and university in New Jersey. They bring VALIC service to you -- when and where you need it. C · Computer-Based Retirement Planning VALIC specialists use laptop computers to bring you an array of valuable financial services, including: · 4SIGHT™ Retirement Planning Services · Portfolio Optimizer Asset Allocation Services If you would like more information about VALIC or Portfolio Director, please contact the VALIC New Jersey Regional Office at:

VALIC New Jersey Regional Office 90 Woodbridge Center Drive, St. 410 Woodbridge, NJ 07095 (908) 750-5611 or 1-800-44-VALIC Fax. (908)636-9350

An American General Company For more complete information about VALIC and Portfolio Director, including charges and expenses, please request a prospectus by calling 1-800-44-VALIC (1-800-448-2542). Please read the prospectus carefully before investing or sending money. Portfolio Director is distributed by The Variable Annuity Marketing Company (VAMCO).

Questions and Answers Regarding the New Jersey Alternate Benefit Program (ABP) 1

What decisions do I have to make regarding my ABP participation?

2

How do I make the investment decisions described above?

3

Is there any limit to the additional voluntary tax-deferred contributions I may make to my ABP account?

You must decide which investment carrier(s) will receive and invest your ABP contributions. If you select more than one carrier, you must allocate your contributions among them and determine the investment products to which you wish to have your contributions directed. You will also need to review your opportunity to make additional voluntary contributions.

The ABP provides a choice of investment carriers and types of investments. As you consider these options, please keep in mind some general investment guidelines. Read carefully all promotional literature and investment prospectuses. Consider such factors as the experience and background of the investment carrier, the nature of the product or fund selections that it offers, charges or fees applicable to an account or an investment, the investment performance record, provisions or restrictions governing transfers (both within the carrier's funds and between carriers), the availability and cost of loans, and the type of customer services and retirement planning assistance. Consider your time horizon, level of risk tolerance, financial objectives, other financial assets and anticipated financial needs and the diversity of your investments. Review your investments from time to time in light of any changes in your personal situation or investment strategy.

Yes. Federal law limits the amount of additional tax-deferred contributions that you may make. The limit is based on the amount of your salary and any previous contributions. Each year, you must calculate the maximum allowable contribution. Your ABP carrier can help you with this calculation. Please contact your personnel/benefits administrator for information regarding the completion of a Salary Reduction Agreement needed to make any voluntary contributions to your ABP account.

4

Can I take a loan from my ABP account?

Yes, if you are vested. You must apply directly to your investment carrier(s) for a loan. The terms and conditions for a loan may vary among investment carriers.

5

When do I vest in the ABP?

6

When can I receive benefits from the ABP?

7

How will my benefits be paid?

8

Will employment after retirement affect my benefits?

You are vested in the ABP when you begin your second year of employment at your institution or if you have an existing qualified retirement account from your previous employer. From that point on, all of the contributions and accumulations in your account belong to you and will provide benefits to you at the time that you are eligible to receive them. If you leave your institution prior to becoming vested, you will receive a refund of your "employee" contributions, including any investment gain or loss. The "employer" contributions will be returned to your employer.

You will be eligible to receive distributions from your ABP account at any time after you retire or otherwise terminate your employment, regardless of age. It is important to understand that once you choose to receive a distribution after leaving employment you are considered to be in a retired status and will not be eligible to reenroll in the ABP even if you should subsequently return to a teaching or administrative position at a New Jersey public institution covered by the ABP. After you leave employment you may decide to delay receiving benefits until some future time, thereby providing the opportunity for your account to accumulate a greater value, and to preserve your right to resume ABP participation upon subsequent employment. However, if you delay the receipt of benefits after you retire or otherwise terminate employment, you must begin to receive benefits no later than April 1st of the year following the year in which you attain the age of 70 . However, if you are eligible for life insurance or state health benefits coverage and you delay receiving benefits, you may forfeit your right to coverage.

You may receive your benefits in the form of a cash distribution and/or an annuity from the carrier(s) with whom you have invested your account funds. Annuity benefits will be calculated by your investment carrier(s) based upon the value of your account, your life expectancy and the distribution option that you select. You may elect to receive some or all of your account in the form of a cash distribution. If you are under the age of 55, you may receive a cash distribution of only the employee's contributions and accumulations. If you are 55 or over you may receive a cash distribution from your total account value (i.e. both employee and employer's contributions and accumulations).

Employment after retirement will not affect the receipt of your ABP benefits. However, once you receive retirement benefits you may not re-enroll in the ABP if you are subsequently employed at a New Jersey public institution of higher education. Nor will you be eligible to enroll in any other New Jersey state-administered retirement system if you are subsequently employed in a New Jersey public sector position. Furthermore, as a retired ABP member, you will not be eligible for group life

insurance or disability insurance in such employment, nor can you accrue service credit toward employer-paid health coverage. However, you will continue to be eligible for any insurance benefits that accrue to you as a retired ABP member.

This member booklet provides an overview of the major provisions of the New Jersey Alternate Benefit Program (ABP). This information should be used for general guidance only, and should not be construed as a definitive statement of the requirements or limitations that may apply in specific situations. The provisions of the Alternate Benefit Program are controlled exclusively by the terms of the New Jersey laws governing the ABP and the corresponding regulations set forth in the New Jersey Administrative Code. In addition, an investment carrier may establish additional conditions or limitations with regard to a particular investment or distribution option. In the event of any conflict between the terms of this summary and the terms of the legal documents controlling the Alternate Benefit Program or of any investment or distribution option, the Provisions of the legal documents will control.. Prior to making any investment or distribution decision, a participant should carefully review the information contained in the appropriate sales literature, contract or prospectus. Participants should understand that the availability of an investment carrier and any particular investment or distribution option in the ABP does not constitute a recommendation for that carrier or option. Neither the State of New Jersey nor your employer accepts any responsibility for the financial condition of an investment carrier or for the future value of any investment or distribution option. Printed on recycled paper

ABP-80-84-395