AIG VALIC Selected as Exclusive 457(B) Provider and Common-Remitter by the Los Angeles Unified School District.

HOUSTON -- Nation's Second Largest Public School System Selects AIG VALIC Based on Investment Portfolio, Innovative Service Capabilities and Robust On-Site Retirement Education Programs

AIG VALIC, a national leading provider of retirement plan services to for-profit and not-for-profit education, healthcare and government organizations, today announced that it has been selected by the Los Angeles Unified School District (LAUSD) as its exclusive 457(b) retirement plan provider as well as the common-remitter for its 403(b) plan.

LAUSD's selection of AIG VALIC followed a comprehensive review and analysis that included an independent evaluation by Mercer Human Resources Consulting of the District's 457(b) implementation plan. AIG VALIC scored highest in all eight of LAUSD's selection criteria, which reflect the District's intent to offer employees an alternative to the existing 403(b) retirement savings plan, lower costs, reduce penalties and provide access to a broad range of retirement savings education resources.

LAUSD will establish an oversight committee - comprised of union members, district personnel, and an outside investment consultant - which will advise the District regarding the selection of mutual funds to be offered to its employees.

"We are pleased to be selected by the Los Angeles Unified School District as its exclusive 457(b) retirement plan provider," said Bruce R. Abrams, President and CEO of VALIC and the VALIC Retirement Services Company. "We are proud of the retirement products and services we offer and the emphasis we place on customizing retirement planning programs that meet the specific needs of over 28,000 organizations nationwide."

By adding the 457(b) plan to the District's retirement program, LAUSD also provides its employees with another significant benefit. Individuals can now contribute to either the 457(b) plan, the existing plan or both plans, which allows participants to contribute far more - up to $53,000 in 2006 - if they qualify for certain catch-up contributions.

"We conducted a thorough search for a 457(b) plan provider that could offer our employees low-cost mutual fund investment options and had achieved a record of success in working with the unique nature of K-12 retirement plans. We evaluated each retirement services company that responded to our RFP against eight different criteria, and AIG VALIC scored highest in each category," said David Holmquist, Director of Risk Management and Insurance Services, LAUSD. "We are excited to bring this new plan to our employees. AIG VALIC's ability to deliver a low-cost mutual fund product, coupled with on-site education, was a deciding factor in choosing them to administer this vital employee benefits program."

AIG VALIC's comprehensive retirement education programs and tools will address LAUSD's goal of increasing the awareness of, and participation in, the dual retirement savings plans it offers employees. According to LAUSD's 2006 Benefits Survey, only 43% of employees are familiar with the 403(b) plans offered by the District, and only 31% of employees currently invest in it. In addition to assigning a dedicated team of VALIC financial advisors to the District, AIG VALIC will also create customized educational materials, enrollment information and retirement seminars and counseling for District employees. The company will also provide additional client services through the AIG VALIC Customer Care Center.

AIG VALIC will also assist LAUSD in simplifying its multi-carrier retirement plan administration on the 403(b) plan by introducing Retirement Manager(SM), an innovative Internet-based service that provides plan sponsors with improved efficiencies and a variety of administrative services. These include a common-remitter service, while offering plan participants a single point-of-access to comprehensive retirement plan information, financial planning tools, and inquiry and transaction capability across retirement product carriers. Retirement Manager will also benefit LAUSD by streamlining processes and reducing costs. "It is gratifying to know that our strategy to provide state-of-the-art technology, competitive products and robust financial education is truly a differentiator in the marketplace," said Todd Buchanan, Senior Vice President, AIG VALIC. "The addition of LAUSD as a client further strengthens our market leading position in K-12 retirement plan administration."

AIG VALIC is one of the leading retirement plan service providers in the United States. For more than half a century, it has specialized in providing retirement programs and related investment, recordkeeping and administrative services to a variety of employer types, including for-profit and not-for-profit elementary and secondary education institutions, hospitals and healthcare organizations, higher education institutions and governmental entities. AIG VALIC serves 28,000 client groups and more than two million participant accounts. AIG VALIC is the marketing name for the group of companies comprising VALIC Financial Advisors, Inc.; VALIC Retirement Services Company; and The Variable Annuity Life Insurance Company; each of which is a member company of American International Group, Inc.

Established in 1855, the Los Angeles Unified School District (LAUSD) is the second largest school district in the United States. As of January 2006, LAUSD consists of over 1,100 local schools and nearly 900,000 students. LAUSD serves a wide range of education levels, including elementary, middle and senior high schools, as well as independent charter schools, continuation schools, adult and early education centers. An unprecedented 32 elementary schools in LAUSD were recognized as a California Distinguished School this year, the largest number of schools to be honored since the inception of the program in 1985. In addition to the city of Los Angeles, LAUSD serves a number of other neighboring cities, including unincorporated areas of the Los Angeles County.

American International Group, Inc. (AIG), world leaders in insurance and financial services, is the leading international insurance organization with operations in more than 130 countries and jurisdictions. AIG companies serve commercial, institutional and individual customers through the most extensive worldwide property-casualty and life insurance networks of any insurer. In addition, AIG companies are leading providers of retirement services, financial services and asset management around the world. AIG's common stock is listed on the New York Stock Exchange, as well as the stock exchanges in London, Paris, Switzerland and Tokyo.