To assure that the NEA Valuebuilder Programs offer superior quality and value, NEA Member Benefits (NEA MB) developed criteria to evaluate and monitor the performance of existing and new investment options.

The criteria are specifically designed to accomplish the following:

To support recommendations for new investment options for the NEA Valuebuilder Program;

To review, on an ongoing basis, the performance of NEA Valuebuilder investment options, as well as investment options of other nationally available variable annuity and mutual fund products that are targeted to the education marketplace; and

To provide a basis for identifying and improving the performance of underperforming NEA Valuebuilder investment options and, if necessary, closing these investment options to new contributions.

CRITERIA

The criteria for evaluating and recommending new investment options, and tracking the performance of existing investment options are:

• INVESTMENT OPTION PERFORMANCE
• RANGE OF OPTIONS
• FINANCIAL INDUSTRY LEADER

INVESTMENT OPTIONS PERFORMANCE

The performance of new and existing investment options will be evaluated and tracked monthly, using independent, publicly available ranking services. These include:

• Lipper Analytical Services Report
• Variable Annuity/Life Performance Report (Morningstar)
• Variable Annuity Research and Data Service (VARDS)

Lipper will be the primary source for investment option performance tracking, since it is the only source that provides the variable annuity option, underlying fund performance, and parent mutual fund performance. Both Morningstar and VARDS offer data that support the information available from Lipper and will be used to supplement Lipper.

Through these independent resources, NEA MB will be able to provide thorough and objective ongoing performance evaluations of the NEA Valuebuilder investment options and other nationally available options.

PERFORMANCE GUIDELINES

Background

The following information is intended to be helpful in understanding how the Evaluation Criteria and Performance Guidelines were developed and how they will be used to identify and measure the performance of new and existing investment options.

There are two types of variable annuity investment options. One is an option that has been issued by an insurance company for its own variable annuity product. In almost all instances, this type of option is proprietary to the issuing insurance company, and it is usually managed by the insurance company.

The second type of investment option is a mutual fund that has been adapted to become a variable annuity separate account. As a variable annuity investment option, the "cloned option" may retain the same investment objective or be patterned after the publicly available mutual fund.

Once a mutual fund is adapted as a variable annuity separate account, it can become part of any variable annuity product, assuming the investment company that manages the mutual fund agrees. In other words, one variable annuity investment option might be available through several annuity products. When the investment option is available through several annuity products, the performance record of the option in a particular annuity product will be affected by the fees and expenses of that annuity product and by the timing of when the investment option was included in that annuity product. Another factor impacting performance is the amount of assets under management in the separate account.

The NEA Valuebuilder Program combines both internally managed, proprietary investment options and externally managed investment options. This is done to achieve maximum diversification and offer different investment strategies from which participants can choose.

Investment Option Performance Criteria

The following are the NEA MB investment option performance and monitoring criteria.

To be eligible for inclusion as an NEA Valuebuilder investment option, an option must rank numerically in the upper third of its investment category (e.g., equity/income, growth, balanced, etc.), based on the fund's performance, for the past three years.

In the case of the Valuebuilder Annuity Products, if a recommended investment option has less than three years' experience, but is otherwise considered attractive, NEA MB will evaluate the three-year performance of the parent mutual fund on which the variable annuity option is based.

The goal of each NEA Valuebuilder investment option is to achieve an ongoing three-year average ranking in the upper third of its investment category.

If an NEA Valuebuilder investment option's performance declines below the upper third ranking, but stays numerically within the top half of its investment objective category, its performance will be reviewed monthly.

If an investment option's performance declines to the lower half of the options in its investment category for a three-month period, it will be placed on "Monitor" status. If the investment option's performance returns to the top half of its investment category for three consecutive months, it will be removed from Monitor status.

EXAMPLE OF NUMERICAL RANKINGS WITHIN INVESTMENT
OBJECTIVE CATEGORY

The graphic shown below depicts the numerical standards that form the basis of the Performance Guidelines and indicates the actions to be taken based on the NEA Valuebuilder investment options' numerical rankings. This graph assumes there are 99 options in the investment category being measured.

|	<-----1----->	|	<-----2---->	|	<-----------3-------------->
|	---------------	|	--------------	|	----------	|	----------	|	--
1		33		50		67		99

1. Required performance ranking within investment objective for inclusion in the NEA Valuebuilder Programs and expected ongoing performance standard.
2. Acceptable performance.
3. Unacceptable performance which triggers placement on Monitor status.

RANGE OF OPTIONS

New investment options that are added should complement or supplement existing NEA Valuebuilder investment options. By offering a range of investment options from low risk to high risk, participants in the NEA Valuebuilder Program can diversify their portfolios and lessen risk while taking full advantage of market opportunities through a complete selection of investment options.

Investment options may complement existing investment options by offering investment objectives not currently available through the NEA Valuebuilder Program.

Investment options may supplement existing investment options by offering investment options that strengthen an investment objective category currently available through the NEA Valuebuilder Programs.

FINANCIAL INDUSTRY LEADER

Once performance criteria have been met, potential investment options will be reviewed and consideration given to the company's position as an industry leader (with corresponding financial strength). An investment option issued by an industry leader may help to provide members with security and comfort.