October 29 Letter to All Employees

October 29, 2008

Dear New Church and Academy Employees,

Most of us have watched the stock market decline, credit crunch, and financial uncertainty of the last few weeks with concern. Of particular interest to us, AIG, which manages a portion of our retirement savings program, received an $85 billion loan from the Federal Reserve to relieve short-term liquidity issues related to its exposure in high-risk securities. In addition, Wachovia, our primary bank, has experienced financial instability which has led to its acquisition by another bank. This note is intended to update you on our actions related to the financial crisis and our vendors’/providers’/financial services managers’ responses to the situation. While it is impossible to make predictions in this volatile time, we are reassured by the approaches our financial institutions have taken to safeguard our interests and to address the financial crisis.

AIG Retirement Savings Program

We have been in close contact with AIG throughout this troubling cycle. On October 3rd, AIG issued a press release describing its future plans, including the decision to “explore divestiture opportunities for its businesses outside of AIG’s core property and casualty insurance business. The purpose of such divestitures is to repay amounts owed under the $85 billion loan agreement between AIG and the Federal Reserve Bank of New York. One of the business units to be divested is AIG Retirement Services.” What this means is that AIG will look to sell AIG Retirement Services to another firm over the coming months. We have discussed this with our AIG representatives, and are confident that AIG Retirement is still well positioned to manage our retirement savings program.

There will be no disruption of service to our employees while AIG identifies potential buyers for its retirement services. AIG Retirement still remains strong and well-capitalized. If a sale occurs, your funds will remain secure in the retirement savings program. Of course, the performance of individual investments are not guaranteed, as they remain subject to the market. We encourage you to speak with your financial consultant to define specific strategies for your retirement savings.

For more information related to AIG, please see the following documents: AIG Key Points of Interest, AIG Retirement FAQ, and visit their web site at http://www.aigretirement.com for ongoing updates. Remember to check with Joe Weiss (267) 502-2632 or Les Alden (267) 502-2608 if you need help accessing your account.

Our Primary Banking Relationship: Wachovia

Over the past month, we also spent a great deal of time monitoring the situation with Wachovia, our lead bank. It was recently announced that it will be acquired by Wells Fargo. We are pleased to see this situation come to a resolution. We do not expect any disruption with our day-to-day banking activities. We have experienced increased borrowing costs for our construction projects, but we are hopeful, with the recent announcement of federal government support to the banking system, that this will come back into line.

New Church Investment Fund and Northern Trust

The New Church Investment Fund (NCIF), which holds the Church and Academy endowments, has not been immune to the market downturn. Along with many colleges, universities, not for profits, etc., we have seen a decline in market value of our endowment holdings. (Ministers particularly are interested in the NCIF’s performance as they still have a portion of their Investment Savings Plan money invested there.) We have a long-term view with our investment strategy, and do not attempt to “time the market.” The most important thing the NCIF can do is to follow its asset allocation plan among its fixed income and equity investments, and rebalance to that plan regularly. This is particularly important in volatile times such as these.

Northern Trust is the investment custodian for the NCIF and manages a major portion of its investments, held in various market index strategies. Northern Trust has experienced decreased performance this quarter, as have most financial institutions. They have been proactive in their response, and have maintained stability. We will continue to be in communication, but no difficulties are foreseen. If you wish to know more, please see the following documents about Northern Trust: Northern Trust Financial Results, Northern Trust Market Update.

Overall Budgeting & Spending Plans

While the General Church and Academy will continue to move forward with certain new program initiatives and construction projects already under contract, we recognize the importance of being vigilant in monitoring our spending until we see a recovery in the markets. As such, we will not move ahead with new projects requiring money outside our budgets until we have clarity that the market situation will permit us to do so, or unless specific dollars are donated to support such projects. While we can’t predict the market, we do anticipate the need to be thoughtful and measured in our spending.

While this is a period of great uncertainty for all of us, please rest assured that we are monitoring all of our financial relationships very closely, and are confident that our financial services providers/vendors and managers have taken the right steps to move forward.

If you have any questions, please do not hesitate to call/contact Joe Weiss (267) 502-2632 (Joe.Weiss@anc-gc.org) or either of us at any time.

Thank you.

Dan Allen (267) 502-2636 (Daniel.Allen@anc-gc.org) and

David Frazier (267) 502-4919 (David.Frazier@newchurch.org)