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A Newsletter for the State of Connecticut Deferred Compensation Plan

February 2001

State Comptroller Nancy Wyman	This issue of "Getting There" explains how to analyze the information available regarding the valuing of your State of Connecticut Deferred Compensation Plan account.
	Tracking Investment Options:
	What's My Account Worth?

As you save for your retirement through the State's Deferred Compensation Plan, it's important to keep track of your account and invest wisely based on your personal situation. The plan offers a variety of investment vehicles to give you the choice and flexibility you need for selecting the types of funds that are best for you.

Investment Options

The plan offers you a choice of investments from three different financial services organizations: ING Aetna Financial Services, Hartford Life Insurance Company and Phoenix Investment Partners. Daily performance information is available by looking through the newspaper or on the Internet. However, depending on which investment you're checking, you may see a daily price for your investment that differs from the daily price listed on your personalized quarterly statement:

• Phoenix Investments - the price shown on your statement will be the same as the publicly quoted prices you've seen published because Phoenix offers retail mutual funds that any individual investor may invest in.
• ING Aetna and Hartford Investments - the publicly quoted price won't match the price on your statement because the price of the investment options offered to you are specific to your qualified retirement plan.

What Accounts for the Difference in Prices

Let's look at an example of why you may see different values. Suppose the newspaper lists one of the plan's mutual funds with a net asset value (NAV) of $40 a share. But your statement lists the value of the units in your account at only $36. This is because the $36 figure on your statement is the value of your Deferred Compensation account, measured as the accumulation unit value (AUV).

To understand why the two figures are so different, we need to explain how the investment products for ING Aetna Financial Services and Hartford Life Insurance Company work. These financial services providers let you accumulate assets in a separate account until retirement, and then provide future payments to you at or during retirement. Through the separate account, you can invest in various investment options. The amount of the future payments depends on the performance of the underlying investment accounts - for example, the mutual funds - you choose to invest in through the financial services provider.

When you invest in either ING Aetna or Hartford, you are buying "units" of a "separate account." This separate account holds the money and then invests in one or more mutual funds; you are not directly buying shares of mutual funds. In addition, there are accounting differences, as well as dissimilar applicable fees and expenses, between AUV and NAV.

What NAV and AUV Measure

• NAV - measures the value of the shares of a mutual fund - that is, the dollar value of one share of a fund. NAVs are commonly printed in most daily newspapers or on the Internet, and are a popular way for individuals to track their investments.
• AUV - measures the value of the units in the separate account.

The value of a mutual fund is measured using NAV. Since ING Aetna and Hartford invest in mutual funds, the NAV of the mutual fund does affect the value of your account. Generally, if the NAV of the underlying mutual fund increases, the AUV will generally go up. If the securities in the underlying fund's portfolio drop in price, the fund's NAV will decrease, and so, usually, will the AUV.

So, while the AUV and NAV are related, they are, in fact, using two different methods of price calculation, so generally they will not be equal to each other.

Investment Fund Performance & Operating Fees

For the Period Ending December 31, 2000

You may invest your contributions with any one of the plan's three financial services organizations: ING Aetna Financial Services, Hartford Life Insurance Company and Phoenix Investment Partners.

The following charts will help you evaluate your investment choices - both mutual funds and annuity options. They show the historical rates of return for each financial services organization's available investment options and the various operating fees that may be assessed against these options for the period ending December 31, 2000.

The rates of return columns are "net of expenses" and reflect the actual returns that would be applied to your account. This means that they already exclude the operating fees a financial services organization may charge you for managing, investing or marketing a particular investment option. Operating expenses appear in separate columns.

About Your Fund Choices

To help you identify between these two types of options, variable annuities appear in italic print. When
comparing two similarly styled mutual funds or annuity options, be sure to:

• Recognize that while a fund's past performance may help you understand how well or poorly it has performed over a period of time, it's no guarantee of future results.
• Consider the total expenses each fund charges as well as the kinds of services or benefits it provides. Keep in mind that you can reduce your overall investing costs by monitoring these expenses and taking them into account in your investment selection process.

Since each financial services organization offers similar investment opportunities, it's a good idea to review the materials from each of these organizations before you make your decision as to where to invest your money. Then, select the one financial services organization that offers the investment options and products that best match your personal financial goals.

* After the close of business on November 26, 1997, the PPI MFS Emerging Equities fund replaced the Alger American Small Cap fund and the PPI Scudder International fund replaced the Scudder VLIF International fund. The five-year rate of return includes performance for the Alger American Small Cap and the Scudder VLIF International funds from 6/30/95 to 11/26/97 and the current funds from 11/27/97 to the present. For more information, please call your Aetna representative.