Updated: My IRA was funded, but not all is well: Still Having Problems With TIAA-Cref? Tell Us Now
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Apparently I was not the only person having problems with TIAA-Cref this year. CNN is reporting that thousands of customers had problems with their scheduled transfers and with accessing their accounts online.
One customer told the newspaper he was “pretty angry” after the computer glitch prevented him from making changes to his portfolio, although TIAA-CREF said his trade would be backdated.
When I contacted the company to report my missing contribution, the customer service representative was very helpful and assured me the account would be adjusted. I had complete confidence, and when I checked my account yesterday, the deposit had been made and backdated.
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I just walked my father through this process with TIAA-CREF. He has worked for the University of Maryland system for over 25 years and had all his retirement with TIAA-CREF. While he still believes his retirement dollars are safe he had questions regarding his plan. He is approaching retirement age and couldn’t get any answers from TIAA-CREF regarding his current investments, or how those investments would be allocated when he does retire. He turned to me since I am a financial advisor at Morgan Stanley. He was so frustrated with the customer service he wanted to move the money out of the plan into an individual IRA. He was told he could not take he money out of the plan unless he retired or was terminated, but he still received no answers from TIAA-CREF related to how his plan will be allocated when he retires. I went through his documents and discovered that his plan would be distributed over 10 year after he initiates the payments in retirement. He was unaware of this and decided he would attempt to roll the entire plan into an IRA when he does retire. I hope he doesn’t have the same problems other like you have had. If I can be of any help you can reply here and I can attempt to help you as well.
If your father has been contributing to T/C for 25 years, I find it unusual that he would have so little understanding of how his retirement program operates. At my institution T/C representatives held almost annual seminars and individual meetings with faculty to explain all the programs. Also, the personnel departments at most universities usually have someone who specializes in T/C matters.
If your father can get onto his computer while on the phone with a T/C rep, they will walk him through their T/C website (www.tiaa-cref.org) where he can get information about his account and get infomation and/or order publications about T/C programs and investments.
If he has a mid 6 figure account with T/C, he can request having a WMA assigned to him, who would have more knowledge about his particular needs, than the average phone rep he might encounter.
There also are some discussion sites where he can ask questions about T/C in particular and other investment and retirement issues.
The first would be the TIAA-CREF Funds forum at the morningstar site where participants discuss T/C issues. (http://socialize.morningstar.com/NewSocialize/forums/100000044/ShowForum.aspx)
Another valuable site would be that of the Bogleheads at http://www.bogleheads.org. Would especially recommend that he look at their listings of investment and retirement publications.
To BH,
Not all institutions are serviced on an yearly basis. Some are lucky to get a rep every few years.
Also, since when did it become the client’s job to have a deep understand of the inner workings of TIAA-CREF?
People that have been employees for 25+ years at TIAA have been given the run around before when it comes to calling the customer service lines.
And, while you may have the assumption that most institutions have someone that specializes in T/C issues, you’d be suprised as to how many have no clue what they are doing when dealing with T/C.
As far as getting a WMA account, it is really worthless and the WMA is mostly calling once a year to try to sell more products. A lot of people on here have even complained about that system of customer service.
Frankly, I’m an employee and I will NEVER invest with T/C because I’ve watched them screw over little old ladies waiting to pay for medication, the children of T/C holders when their parents have passed, and I’ve seen those “concerned” consultants come out of a meeting with someone in tears just to laugh about how ridiculous their whining 1 on 1 client was.
Sadly, I’m not talking about an isolated incident or just one consultant.
This company is really sad, and over the last few weeks I’ve been having to have a real battle with my conscious over if I should stay here with an over inflated salary to keep quite about everything I’ve seen, or if I should just move on to another industry all together where I don’t have to feel like I’m lying ever time I say, “the check is in the mail.”
Sorry to hear about the unpleasant situation at T/C. Is this prevalent throughout T/C or just in the customer service areas,,,,, and how long has this climate existed?
Prior to the 90s it was not difficult, nor even necessary, for clients to understand the workings of TIAA-CREF. Participants only had to decide how to allocate their contributions between CREF Stock and the Traditional Account, and, since you could not withdraw any funds, to select an annuity pay-out program upon retirement.
I’m interested in how much of the present problems and costs at T/C could be attributed to the introduction of all these new funds, the establishment of a “cash-out” procedure, etc.
Are there any “old timers” (20+ years) left that could describe the costs and negative impacts on T/C and participants, due to these changes. The old system worked quite well. To paraphrase… the enemy of a good program is the search for a perfect program.
People do not want more options for them to ask questions. They want solutions. My father wokred with a WMA, and found that service more frustrating than the call center. He felt the service was established soley to push product to higher net worth individuals and not give him answers to his questions. The fact remains TIAA-CREF takes these employees retirement contributions, provides them a few, poor performing investment options and tops that off with poor customer service. That fact is evident by these client and startling employee postings. TIAA-CREF can get away with this becuase the employee’s TIAA-CREF retirement plan is not portable. There is NO incentive for TIAA-CREF to provide even basic customer service since there is no option to roll the money into an IRA unless the employee retires or is terminated. It was clear from my father experience that his only option will be to roll the entire plan out as soon as he retires. An IRA will provide him more investment options and an easier process to have the assets transfer to beneficaries which seems to be a huge issue based on these postings.
Michael, be sure to inquire specifically about any money your father may have in the “TIAA Traditional” guaranteed fund. If more than $2000, it’s very unlikely that he will be able to roll that part into an IRA, except in ten annual installments. Beware. Some phone reps behave as if “everyone knows” that TIAA Traditional is an annuity and not accessible as a lump sum, even after retirement. Others will tell you that you can roll it over in a lump sum when that is not the case. I’d have been totally out of TIAA-CREF years ago if it hadn’t been for that fund.
I am a former WM Advisor and I can honestly say that the “brilliant” series of restructuring took a page from wall street. Give the do nothing and know-nothing execs all the money, get rid of the intelligent employees that had a decent pay, and replace them with lower paid less knowledgable (due to lack of T-C experience) employees. In the end, the client gets the shaft . The WM Group was established under the false premise of unbiased advice while it is actually biased to ALWAYS recommend consolidating assets with TIAA-CREF regardless of the best interest of the client. How can any advice be unbiased when the WMAs have a large part of their compensation based upon meeting their goal of bringing in new assets? (which goes up each calendar year) I’m sure that little tidbit is left out when working with clients by pushing the B-S line of “I’m not working on commission”. Their customer service stinks because they got rid of 99% of the employees who know the ins and outs of how to get things done FOR the client. Now the client comes second, or maybe third, depending on which department you are working with. DO NOT move any funds in excess of $2,000 into TIAA Traditional within a RA or GRA contract. The funds can only be removed in TEN installments over ten years, no compromise unless you annuitize or receive interest on the remaining balance. BEWARE! That feature is an asset retention tool in itself.
Just a little hint for those of you trying to contact someone higher up. Every e-mail at T/C is formatted the same way. The first initial plus the last name @ tiaa-cref.org. So for example John Doe would be JDoe@tiaa-cref.org – There is no DOT in the name like many business addresses.
LHR74 mentioned “DO NOT move any funds in excess of $2,000 into TIAA Tradtional within a RA or GRA contract. The funds can only be removed int TEN installments over ten years, no compromise unless you annutize or receive interest on the remaining balance.
I am one of those folks who was told only about the ten year payout. Can you give more information about the “or receive interest on the remaining balance.” I was given no information about that when I talked to several “T/C call center reps.”
I think TC is awful but some people seem clueless too. How can you not have heard of about Interest Only or 10 Year payout, Due you read nothing sent to you by TC? Clueless people deserve what they get.
I was a representaive there for about a year in 2006-2007. I could not take it any more. Their systems are the problem. Herb Allison really messed things up.
The phone reps are powerless to actually get anything done. They just put in the request. They can’t actually FIX it for you… although they wish they could.
Lots of stories, but I remember a fellow that moved from Germany back to the US several years before. Even though he changed his address many times and requested money be wired to his back for his annual payments, TIAA had sent checks to his old address (which no longer exists) in Germany. It happened for three years after he was in the US. He and the phone reps did everything right. Perfect. And yet the checks still went to Germany every year.
I’ve had people cry on phone, curse at me, everything. I can understand the frustration.
I couldn’t take it anymore and after a year, I walked out and never went back. The morale was horrible.
It is sad that people do not know about the 10-year payment. But there is a reason why it’s locked up. It is guaranteed to NEVER LOSE VALUE.
Currently, it is paying 4.5%and had a 5.25% return for 2008. Name anything else in your portfolio that had a 5.25% return for 2008.
They need to be more clear on the lockup, and clients need to actually read what they are getting into. When I worked there, I really wished that TIAA would warn people about it more. Then again, the word “annuity” should be a red flag. This isn’t a mutual fund!
I had one lady that when she initially signed up, she requested her $ be split into several funds, but the totals did not add up. When that happens, it defaults to the money market fund.
This lady never read anything TC sent her over 28 years. So, for 28 years all of her retirement savings was going into a money market.
She had $230,000, but would have had over $800,000 if the initial mistake was not made.
This is the problem with TC. Someone should have called her to let her know at the beginning. They didn’t. She’s out several hundred grand. Then again, she never once looked? Ever?
To Jan: The TIAA-CREf term is the Interest Only Option.
Instead of receiving the balance via a ten year payout or an irrevocable option such as a lifetime annuity, you should be able to keep the balance in place and receive the interest generated by your balance on a monthly basis. If my memory serves me, the minimum age to initiate the interest is age 55 and you must have terminated from employment. You must receive interest for at least 12 months before you can change to another option such as the ten year payout or an annuity (i.e. anytime from month 13 onward the conversion can be made). Since the interest payments are eligible to be rolled over to an IRA, a minimum of 20% would have to be withheld for federal income taxes. If you want to withhold less than 20% for federal income taxes, you should have the interest payments rolled into an IRA (open one if you do not already have one) an the have the payment immediately taken out of the IRA. That way, you can determine the amount of taxes, if any, you would like to withhold. This can be a great option to generate income for you without locking you into an irrevocable situation, assuming the interest being generated is sufficient. In addition, the balance is preserved and passed on to your beneficiaries in full if you were to die while receiving interest-only payments. Sorry that my response is long-winded but I hope it helps.
If the SEC was so lax in their oversight of the Wall Street firms and other crooks, I am sceptical about what enforcement actions they will take against the inept TIAA-CREF. On the other hand, persistence does pay off and with the current scrutiny of the SEC they may take greater action against TIAA-CREF than they had in the past. If you are experiencing service issues you should be sure to document as much as possible- especially if accumulation transfers and/or payments were delayed. This way, investment losses and/or delayed payment interest can be calculated for you.
Okay, I am three years into a TIAA-CREF account at my new school, and this board – as well as a few other sources – have me concerned. I moved from a public school to a private school and switched from Lincoln Financial to TIAA-CREF, mostly because I hated the high fees at Lincoln. I’m still not sure that was the best move, but as an educator with a two year old daughter there are limits to how much research I can do on a subject I’m only modestly capable of understanding.
Can anyone link me to a site where I can find some good, objective comparisons between companies like TIAA-CREF and Lincoln Financial? I’ve been googling and web-searching for an hour and my mind is numb with all the fiscal language. I think I’d have an easier time speaking the tongue of Mordor. =P
*sighs*
And the tongue of mordor wouldn’t lie to you as well as the folks at TIAA Cref. Put your money somewhere else–anywhere else! I’ve never in my life been so poorly treated by a company that professes to be looking out for my welfare. I’ve had better customer service at McDonald’s!
I was in the same position, my choices were between tiaa, vanguard, and AIG or all three (can split my contributions). Well, I didn’t choose AIG :-)
When I came across this blog, I was concerned at first about the folks issues with tiaa but since most people have a problem when it comes to taking money and I am more interested in saving money, I am not too concerned, I have too many years to go b/f I can think of retiring. The information provided here made me look more at that traditional account and my employer money goes into what they call a retirement annuity that will restrict the payment options from tradition to ten years, interest only or lifetime income but my contributions can go into a supplemental account that doesn’t restrict the distribution options but I get a lower interest rate.
I eventually found http://www.bogleheads.org, you can ask a lot of questions and get great responses, it is run by people who are big fans of vanguard but they also have great tips on tiaa investment options and other companies. I choose to split my money b/t tiaa and vanguard. I like tiaa’s real estate and social choice and traditional and vanguards indexed funds. I found the people I spoke with at both vanguard and tiaa to be helpful and courteous especially with how crazy the market has been.
Thanks folks for your cautionary tales – I hope your issues get resolved soon. I don’t know how people lived w/o the internet!
I requested by FAX a one-time withdrawal from my TIAA Traditional account . This was received by TIAA on 3 Feb 2009. On 4 Feb they sent the wire incorrectly and it was returned on 5 Feb.
The wire was to be sent to Merrill Lynch and forwarded to my account at a Merrill Lynch branch. I have used this route for five years to wire funds. The problem seemed to be that TIAA has never done a two step transfer, so they put all the numbers together in one number, which was rejected by the Merrill Lynch computer.
On 11 February an employee of my bank phoned the supervisor in charge of my transfer and explained to him how to do it properly. As of today, 17 Feb. no wire has been sent. They are still processing the wire transfer. The 32K dollars were taken from my account on 4 Feb and has been “processed” since then.
When I was let go by my employer under very shady circumstances I tried to withdraw my investments from TIAA CREFF. I found I had to jump through so many hurdles including having to communicate with my employer over issues like the date I was fired etc. Finally after several months of contact (5 months) I finally was able to collect my investment except for the TIAA Traditional. I tried to collect that one too, but after they sent me seven pages of forms that needed to be filled out that also required to deal with my former employer who dragged their feet almost as bad as CREFF I gave up and figured I’d never see that money again. I admit I should have complained to some government agency but that’s too much fun for me, now after four years of calling I’m trying again. I’ll let you know how this goes. Be aware that if you need your money out of them be ready to jump through hoops of fire…..Oh by the way you cannot speak to the actual person that handles your account you must speak to an advisor that each time has to be brought up to speed……ridiculous.
Barton- once you have received the paperwork for withdrawal/rollover, complete all of the personal and withdrawal info. You can send it back without employer verification of termination date because the processing area normally will handle that once they get your forms and that section is left blank. While you were probably not told that by a rep at TIAA-CREF, that is what happens behind the scene in the processing areas. Good luck.
I’m not a big fan of the current management at TIAA-CREF but it is important to state that they have done pretty well on the investment side, particularly with regard to the TIAA investments. One reason is that much of the money invested by the institutions and customers is “locked up” for a minimum of 10 years. Over the years, this has provided a significant advantage, providing better returns from more stable investments. The institutions know this. The fact that the money can’t be withdrawn in a lump sum is on the applications signed by the customers and is spelled out clearly in enrollment material. Many employers offer alternative investments…like CREF…that can be cashed out. This has always been controversial as the funds contributed by employers are meant to provide retirement income.
That said, there is no excuse for the poor service that many people seem to be receiving. Unfortunately, I am one of them. Even former employees are not immune. It is very disheartening. Let’s hope that the new CEO who replaced Allison will foster change.
When I check out annuities at various web sites, the payouts are higher than TIAA. If I take a 20 year gaurantee the payout is 6.99% vs only 6.29 per TIAA. Am I missing something? The
” commercial” offerings are better than TIAA. I hope I am missing something. Is there an TIAA enployee or exemployee who can explain this?
It has taken me more than THREE YEARS to dissolve my retirement at TIAA Cref. Over that span of time they have made a bundle of money from my account and I have now lost a bundle. As of today I have submitted the same forms to the same people six times since January 2009, have been told different information–seriously different information–by every single person at TIAA Cref every time I have called them, and finally have had to threaten them with a lawsuit and an article in the Chronicle of Higher Education to get some resolution. These people are shameless, they are liars, and they are stealing our money. I still don’t have my funds but I’ve given them 48 hours and then I turn a large contingent of Irish solicitors lose on them and I start writing editorials.
For those of you still entertaining the so-called unbiased advice from the TIAA-CREF Wealth Management Group, keep in mind that the INDIVIDUAL asset growth goals for each wealth management advisor in 2009 is $50 million of new assets. Beware of the advice being presented by the TIAA-CREF software and keep in mind that the goal is lingering over each WMAs head. The overall compensation of a WMA is tied significantly to meeting and/or exceeding that goal so the line about being non-commissioned is true but doesn’t give the whole picture.
You say that “the INDIVIDUAL asset growth goals for each wealth management advisor in 2009 is $50 million of new assets”.
It is confusing to me just how a WMA can go about obtaining this goal. Could you give some examples?
My impression is that a WMA only comes into contact with a participant who already has a substantial investment in TIAA, and that although the WMA might be able to talk a participant out of transferring funds out of TIAA, how often would there be an opportunity to get someone to add additional funds to TIAA?
Would you also expand a little on how the “overall compensation of a WMA is tied significantly to meeting and/or exceeding that goal”. Is it a large percentage of the WMA’s salary, and are there any penalties associated with not meeting these goals?
Each WMA is responsible for bringing in new assets to TIAA-CREf in the amount of $50 million. Clients who work with WMAs do indeed have substantial assets at TIAA-CREF but part of the portfolio review process provided by TIAA-CREF is to uncover assets outside of TIAA-CREF that can be brought in from other investment companies. When a client goes forward with a the portfolio review he/she provides information such as account statements regarding outside assets. Once the portfolio review is prepared by TIAA-CREF, over 95% of the time the recommendation is to consolidate outside assets with TIAA-CREF. These assets are not restricted to retirement funds but include stocks, bonds, mutual funds, after-tax annuities, and other financial products.
As far as compensation goes, each WMA does receive a salary and is not paid a commission. If the WMA meets or exceeds the asset growth goal, then the bonus would be anywhere from 25%-50% of their base salary (on average). The environment created by management is that jobs are held over your head. There is an atmosphere of “what have you done for me lately” between the management and the WMAs. Not meeting goals in two consecutive years results in termination of employment, regardless of how pleased the clients are with working with that particular WMA. Unlike TIAA-CREF 10 years ago, it is all about the bottom line and less about outstanding service and looking out for the client.
Thanks, LHR74, for the invaluable info you’ve been providing. I’m considering moving money out of my SRA into an after-tax account (probably with Vanguard). How would this affect my WMA? Is he penalized by having the withdrawal netted against the “new money” he’s bringing in?
Each WMA has to account for assets brought in and assets rolled elsewhere. There is only so much he/she can do to convince a client to keep the funds with TIAA-CREF. Vanguard is great but aren’t your SRA funds are pre-tax in nature? As a result, wouldn’t you roll those funds into another pre-tax account otherwise pay income taxes on the funds?
LHR74: Thanks again. Your point about taxes is a good one, but in my own case, since I’m retired and since I strongly suspect that tax rate increases and/or means- testing of Social Security and Medicare are looming on the horizon, I figure it might be better to take the tax hit now and have less reportable income in the future.
Just in case you are not aware, by paying the tax, believe you should be able to convert your SRA to IRA and then a Roth. Check out the site http://www.fairmark .com for Roth info.
As you say TIAAA-CREF is unlike that of 10 years ago, and is even more unlike that of 20 or 30 years ago. Then we only had to decide how to allocate between Traditional and CREF Stock (a much easier and more productive situation in my view).
WMAs and all the other expensive programs that have been created were not necessary. The primary interaction needed with TIAA-CREF was how to best annuitize your (large) account.
Do appreciate your comments, and have another question.
My understanding is that a portfolio review prepared by TIAA-CREF is first sent out to an “independent” agency for analysis and recommendations. Are these recommendations then sent directly to the client, or Is there any group of “portfolio advisors”, other than the WMAs, who can challenge the views of this outside agent?
Or does TIAA-CREF simply show how particular investment instruments of TIAA-CREF can best satisfy the “independent” outside recommendations?
As you may have surmised by the quotes, I am concerned about how independent the advisor is, and of course how competent they are.
There is no ouside third party that reviews these plans. The technology used to provide the portfolio summary and any recommmendation is supposed to be unbiased. The asset allocation recommendations normally were unbiased regarding the location of the assets and concentrated on asset class (i.e. stocks, bonds, cash, real estate etc). This financial picture is accurate and useful for the client. The plans are produced in-house using non-proprietary software purchased by TIAA-CREF. While the asset allocation recommendation is indeed helpful to the clients, it is my first hand opinion that the plans are provided to the client so the WMAs can uncover outside assets that can be consolidated with TIAA-CREF. Make no mistake, the advisor is not a broker with many financial affiliations but rather a salaried employee of TIAA-CREF. There are few competent WMAs remaining but none are independent nor can they be if they receive all of their salary and additional compensation (bonus) from TIAA-CREF based upon the amount of assets brought to TIAA-CREF from outside sources.
LHR74,
You are mistaken, the plans are not produced in-house. It’s MY job to send out the client information to a 3rd party vendor. This is why WMAs will not make an appointment one week after the first appointment where they gather the financial information of the client. If they ask for a “rush” on the plan, they are dinged down on points because the 3rd party vendor needs time to put it together.
The plans get put together, printed and mailed back to the office where the WMA looks over the plan for about 15 min.
The WMAs are OVERLOADED with work. I work with WMAs in 8 different states. They rarely get the time to even look over the information in the plan, so you can just forget about them challenging any recomendations.
Sorry to burst your bubble, but to say they are produced in-house is the biggest lie ever.
Still with TIAA: I stand corrected regarding the current processing of the plans but I know first hand that they were previously prepared in-house whether you want to believe it or not because I was at TIAA-CREF for over 10 years and I was a WMA. Of course the current WMAs are overloaded with work, they have to bring in $50 million or they’ll get the boot!
By the way, you conveniently left out any mention of the so-called unbiased nature of the plan or the real reason for providing such a plan to the clients. As I previously mentioned, the asset allocation advice is helpful but the real goal is to have client consolidate his/her assets with TIAA-CREF and you know it.
To: BH, Thanks for the tip.
I’m still trying to understand why TIAA annuities pay out so much less than others I find online including NYLife and many others through Fidelity. Anyone have an idea about that. Are their expenses or losses so bad that they are reducing the basic annuty?
It is a little difficult to make comparisons, as there are different annuity programs. For example, there is a graded method where payments start low but increase over time to try to offset inflation issues. Even the payments in the standard method vary based upon the returns of the funds that you annuitize.
Suggest you give them a call to get some of the publications that describe these various options.
Don’t believe online calculations can tell the whole story.
There could be many different reasons none of which I believe are bad. In general, check the mortality tables used by each company. As of recent, TIAA-CREF did use a 2 year set back from the standard mortality tables because historically, clients with TIAA-CREF have a greater life span. This would create a lower payment than another company not using a set back. As mentioned by others, the TIAA Traditional can be paid from the standard or graded methods and that too will make a big difference in the payment. Standard pays the full amount right away while the graded method holds some back for reinvestment creating an increasing payment over time but the graded starts out lower. I frequently discussed these methods with clients and the rule of thumb was that it will take 9 years for the graded payment amount to reach the payment level of the standard and an additional 9 years for the total payout of the graded to exceed the standard payout total. Lastly, annuity payments from the variable accounts assume a return of 4% in the first year to be conservative. If the account performs higher than that, the payment will go up reflecting the difference between the actual payment and the 4% payout. Subsequent payment reflect the full actual performance of the respective variable account. I hope this helps somewhat.
As an added note, you may recall that the setback for CREF is different than for TIAA. I was among those laid off in Aug, 2008 and cannot recall the exact difference but it is different. Details were in the training manuals (if they’re still around)…or possibly in the Knowledge Base info if that’s been accurately documented.
My understanding is that mortality statistics for professors versus the general population indicate appreciably longer lifespans for faculty, hence lower annuity payments.
Can someone explain why TIAA Traditional Interest Only Payments interest rates on funds applied prior to 1994 were dropped from 5.5% to 3.75%, while funds applied this January remained at 4.5%? I have been contributing to TIAA since 1970 with higher rates being applied during the 1970’s, 1980’s and 1990’s while finds applied recently in a low interest environment are getting higher rates.
Many thanks to LHR74 for your unique insights.
Our University dropped TIAA/CREF as an investment option today which is why I sought out this site. I am sure this site will eventually learn the name of our institution, but I’d rather not do it just yet. We are waiting for a clear explanation from our pension committee as to the reason. They mentioned only vague concerns.
I stopped investing in TIAA/CREF many years ago when their investment stategies seemed a little too foggy compared to Vanguard. And I am not a fan of annuities. Not a mortal sin, but I prefer seeing exactly what’s going on. Still, I have noticed over the years that TIAA/CREF has been a strong advocate for shareholders rights and sound corporate governance. I don’t think they are the “bad” guys. So I wish them well, but I’ll invest with V.
The former TIAA-CREF CEO who is largely responsible for the decline in service and loss of quality staff is now in charge of the TARP program. How depressing!
I just found this site in despair after been given the run around by Tiaa Cref trying to rollover my 403b. Each month its a different document they need, even to the extent of now having someone from the non profit I worked at 24 years ago sign that I no longer work there. It looks like at this stage I will need to get a lawyer involved to get my own money out. Does anyone know an independent body I can turn to for help?
Hi all, sorry I’m late to the TIAA-CREF problems party. The reason for my apologie is because I would have loved to help many of you here looking for hands-on guidance for fixing these typical T-C problems.
FWIW, since 2001 I have been making a living off of T-C’s shortcomings. Essentially this is what I do every day, and truth be told, its rather easy (once you completely understand the inner workings of the T-C monster).
I classify T-C participants/account holders into two distinctive groups:
Type A: The blind-eyed everything-will-be-ok-with-my-money TIAA-CREF lovers, therefore I’m committed to them for life.
Type B: It’s obvious that TIAA-CREF can care less about me and my financial future because if they did they would have contacted me at least once in the last [fill in the blank] number of years (from 1 year to 40+ years with no guided intervention… I’ve seen it all).
Finding type B’s that need and want help is how I make a living. Unfortunately I come across type A’s that have spent a lifetime with T-C that suddenly have an epiphany that, in fact, everything isn’t “ok” and now they need help badly because they want to retire but what they really need to retire comfortably just isn’t there. Sadly enough in those cases all that I can do for them is apply a tourniquet and figure out what they need to do to be able to retire as soon as possible without running the risk of outliving their money, and doing so without annuitizing the vast majority of their retirement account. Many of you may know this, but on a side note, annuitization guarantees income for a set amount of time or a lifetime, however it ALSO guarantees loss of control of one’s money. Oh, and it’s irrevocable.
If anyone’s wondering, I represent a very large company who is approved as an “alternate carrier” in many of our country’s higher-ed, defined contribution and supplemental 403(b) retirement plans. Basically, back in the mid 80’s there was a movement by some of the more powerful teachers unions in the country who wanted to break up the monopolization that T-C had in higher-ed. Long story short, after years of legal battling these unions won and the pensions were opened up to approved alternate funding vehicles which allowed T-C participants to move their retirement assets to an approved company of their choice.
Since then, T-C has been bleeding assets every year as more and more institution either fire T-C outright or ad other companies to the game. It’s quite interesting if you ever look at the inception date of the core retirement investment options at T-C you will see that T-C began adding new variable investment options to the RA and SRA portfolio ONLY AFTER THEY started to see their assets move away from them in the late 80’s and early 90’s! Guilty as charged! Before the unions took legal action against T-C, all that T-C offered was TIAA Traditional and CREF Stock. Then all of a sudden there was CREF Money Market, then CREF Bond, then CREF Social Choice, and on and on. Unfair to those who started with T-C in the 60’s, 70’s, & 80’s IMO and many others.
I can go on for hours but I need to get back to my work. If anyone currently needs help with T-C, by all means, post it up and I’ll drop back in later to see what I can do. Remember, you don’t always have to take legal action to get what you need done when it comes to T-C and their inherent problems, it just takes the right financial advisor who knows T-C inside and out to represent you. Many people know they’re a joke of a company, just don’t let them win.
Cheers
This comment is too funny – an attempt to sell something!
“TIAA-CREF” Problem Solver I am sure you just want to help and I am sure you are going to offer that help for free. Am I right? No managed accounts to annuitize your book, no 12B-1 fees to pay your office expenses. Tell us more about your contact information so you can save us.
Former TIAA-CREF Employee:
As a former employee, you SHOULD know that a client’s money is NOT “tied up”for at least 10 years.” The information you incorrectly disseminated pertains to TIAA Traditional monies invested in two specific contracts usually utilized for investing employer dollars. One contract requires that a client who does not desire to take a settlement option to take their money out in the form of 10 payments over 9 years. The other contract has the same provision while the client is still employed, but allows for a 5 year pay out post-termination. This second contract does allow for a lump sum within 120 days of separation of service with a 2.5% surrender charge. There is NO reqirement for any money to be held for at least 10 years in any of these contracts. A “former employee SHOULD know that.
With regards to interest credits on interest only payouts, think of it this way. That account has a significant portion of it’s underlying holdings in LTB. When those bonds were purchased many years ago, they were paying higher rates that new issues. When those bonds mature and that money needs to be reinvested, it gets reinvested in bonds paying less interest. When your bond holding experience that kind of turnover, you can’t possibly continue to pay higher rates on old vintages when the money you’re making off of your investments can’t support those credits.
Read my comment more carefully. Note that I did not say that all money invested in TIAA is locked up. As a current employee, you should know that SOME is. I was responding to earlier comments from customers who were upset that they could not withdraw all of their TIAA funds resulting from employer contributions in a lump sum. Also note that I was pointing out the historical investment advantage of that being the case.
There is NO provision on ANY contract that holds money for AT LEAST 10 years. None. Zero. Zip. Nada.
Really? Perhaps you’d like to enlighten the readers here about how long it takes to remove (transfer or cash-out) the TIAA Traditional accumulations of a Retirement Annuity (RA) contract that has a balance in excess of $2,000. If you’d like to enlighten yourself see this information copied from the TIAA-CREF website……nice try at disinformation:
*If you have a Retirement Annuity (RA) contract, the TIAA annuity contract does not allow lump-sum cash withdrawals from the TIAA Traditional Annuity and transfers must be spread over a ten-year period. “
You are an employee. If you have elected to have your employer’s (TIAA-CREF) contributions go to a TIAA contract, can you remove the accumulated value in one lump sum?
Balances in excess of $2,000 in the TIAA Traditional account in an RA contract will be paid out via the Transfer Payout Annuity (TPA) OVER 10 years. That’s not the same as having your money “locked up for at least 10 years,” is it? When someone tells me my money “is locked up for at least 10 years” I have visions of not being able to touch a dime of it for at least 10 years. Once again, that’s not the same, is it?
From TAA-CREF’s website:
“*If you have a Retirement Annuity (RA) contract, the TIAA annuity contract does not allow lump-sum cash withdrawals from the TIAA Traditional Annuity and transfers must be spread over a ten-year period. If you have a Group Retirement Annuity (GRA) contract, lump-sum withdrawals are available from the TIAA Traditional Annuity only within 120 days after termination of employment and are subject to a surrender charge. All other withdrawals and transfers to the Real Estate Account or to CREF must be spread over a ten-year period (five years for withdrawals after termination of employment).”
Notice how the quote refers to money being spread out OVER 10 years? Locking up someone’s money is just that, locking it up. Meaning you can’t get to it. ANY of it. Please consult a Webster’s dictionary.
Furthermore, I tend to be one who believes that it’s each investor’s responsibility to know what they’re getting themselves into before they do it. Advisors at TIAA-CREF have ZERO incentive to suggest TIAA Traditional as an investment alternative. It’s not as if there is some conspiracy to hide the liquidity restriction becaue their advisors get some fat commission when clients put money in there. TIAA-CREF advisors discuss this restriction when talking to clients about the account. Additionally, TAA-CREF takes painful steps to ensure that clients are aware that there is a restriction on TIAA Traditional in RA and GRA contracts when someone calls into their phone centers and requestes money to be transfered into that acccount. I have witnessed this first hand.
I don’t think you are intentionally trying to mislead people (at least I hope not), but understand that when you use words/terms like “locked up” and “at least 10 years” you may be conveying a message you don’t intend.
It’s legitimate to say that if you cannot withdraw your *full* investment at any time for almost any reason, your money certainly is “locked.” In this case, it’s just the nature of the product. Now, a customer should know the terms of the agreement before entering within, but this aspect of the contract is often intentionally buried and not advertised. Annuity products are often marketed like mutual funds without much consideration for the differences.
I think that you are playing with words. Most customers would agree that not being able to take the money in a lump sum is tantamount to it being “locked up”. Try to think like a customer. You will be better serving them and your employer.
I want to clarify that my post #258 was in response to #256 by WhatSheSaid, not the recent post by Flexo. Flexo, you are not the one playing with words here.
Note also that WhatSheSiad’s comments were in response to my post #224 where I used the term “locked up”. In that post, I also pointed out that the TIAA investment returns have generally been quite good, perhaps owing to the fact that they can realize higher rates of return due to the stability of the assets. The fact that money invested in some of the employer sponsored traditional plans may be restricted is pointed out on applications as well as in other enrollment material. Moreover, the institutions themselves should ensure that their employees understand the provisions of the plans including and employer restrictions. Do all customers read the material? No, but they should as with any product.
To WhatSheSaid: You owe it to yourself, TIAA-CREF and TIAA-CREF’s customers to understand that the customers are not as fully versed in the contractual and institutional policies as you are. Help them in words that they understand and recognize that you have an obligation to do so. That can be very gratifying.
According to TIAA-CREF’s own literature (the Winter 2009 TIAA Traditional Annuity white paper, which can be found on T/C’s site), TIAA Traditional Annuity held total assets of $176 billion as of 12/31/08 across all retirement plans and accounts. $176 BILLION. It’s the largest fixed annuity in the country. No incentive to put customers there—then offer a non-proprietary option to your customers in this asset class that is liquid. This is a spread product–there is no disclosed expense ratio. None of that money can be moved to a new provider at the plan sponsor’s discretion–it all has to be moved participant by participant. There may not be incentive for the T/C reps, but there is definitely incentive. The majority of it would take 9 years and 1 day to move. Virtually every other leading provider in the field offers stable value products (which this is) that are tremendously more liquid with better rates, some which can be liquidated in 1 day at the participant level and moved to another provider or another investment product. In some cases, a surrender fee may apply, but in many cases, where there are no competing options, there is no charge to the participant. Furthermore, there are also stable value products that offer a plan sponsor a 12 month put or a market value adjustment in the event they want to exercise their fiduciary duty and make a vendor change–which many are.
For the greater good…..really, who’s? It’s ridiculous that it takes that long for a participant to liquidate their position. All the positioning about dis-intermediation and affecting the remaining shareholders is garbage. That’s what equity washes are for. TIAA-CREF’s financial solvency is tied to the 10 year out, and now they are crediting interest rates at historical lows, very close to the minimum rate. There are better products & better providers, and TIAA-CREF’s clients need to wake up and find them. If TIAA-CREF is so concerned about their participants, then disclose the spread on the product so participants can make informed choices.
It’s important to remember that there are two classes of TIAA Traditional: RA’s and all the rest, such as GSRAs. The RA’s have the highest interest rates, and (currently, the ratio is not fixed…) the others have a rate that’s 0.75% to 1.25% less. Strangely enough (irony), the higher interest rate accounts have the 9-years and a day withdrawal rule. GSRAs and IRAs have NO trading prohibitions at all on their TIAA Traditional. Obviously, in the majority of interest rate situations, longer term instruments pay more. So if you want the higher rate, you have to accept the restriction on what are, after all, your long-term retirement savings.
Younger participants may not know that before 1989, there was no way to get one dollar out of a TIAA Traditional account except as an annuity. So to me (started my retirement savings in 1975), the current withdrawal rules are very lax! You also must be careful not to mush together TIAA-CREF’s rules with the rules selected by paternalistic schools and universities that chose harsher withdrawal and transfer rules when they signed up to offer TIAA-CREF. The “10-Year” rule is TIAA-CREF’s. Some other rules alluded to in this discussion come from the schools’ choices.
I don’t agree with the statement about higher Stable-Value fund rates at competitors. I used to have a union annuity at Mass Mutual, where the stable value fund always paid less than TIAA Traditional. And if you keep up with the news, there were considerable worries about Stable-Value funds in general (I don’t mean Mass Mutual specifically ….) in the current Great Recession. But TIAA’s highest-possible A.M. Best rating has never varied.
TIAA-CREF has lots of problems, but you don’t get something for nothing in the financial markets.
Over the past three-four years I have experienced a a lot of problems with TIAA-CREF, some of which are still not resolved. They continue to make mistakes on Quarterly Reviews and have to be be pressed hard and continually to get them to even consider examining the problem. The “consultants” at the 800 number can handle very routine items but they can not handle serious errors and it is very difficult to reach someone who can, even then they will deny the obvious or procastinate.
If you have the option to move to another provider it is probably a good choice, CREF’s investment record is not good even compared to the market in general.
If you are still having problems with TIAA-Cref, read this. An author who has been following TIAA-Cref’s activities as a socially responsible company over the past twenty-five years, is looking to speak up for consumers at the company’s annual meeting later this month. Please leave comments here with the latest updates about your customer service issues.
For three years now, I have asked TIAA-CREF to provide me of an accounting of how they have arrived at the amount I was to be paid from my Ten Year Payout. I have not received anything that explains how they have arrived at the monthly payout. As recently as June 1, 1009, I request, yet again the same information and have received nothing. Since repeated attempts have failed, can someone please provide me with the name of a lawyer who handles matters with TIAA-CREF.
elp,
The Transfer Payout Annuity (TPA) is essentially a nine year fixed period annuity. The payments are determined the same way as a mortgage payment or car loan payment. Each year you get a combination of principal and interest. The payment could change slightly year over year if interest rates change, but they should be fairly consistent. Your case is probably sitting on someone’s desk who doesn’t understand the product!
Your best bet for action is to write a letter of complaint. Over the last six+ years, TC’s focus has transitioned from providing excellent service to proving quick responses to the tsunami of complaints they receive. I worked there for almost 14 years and still can’t believe the awful transformation I witnessed the company go through. By filing a complaint (use the word “complaint” in the letter), it will be handled differently and you should get a written response from a more experienced consultant.
Hope that helps.
If any CREF participants makling complaints here would like to share your (horror) storiy at the CREF annual meeting, next week, great. Other folks there will be speaking on various issues of social and corporate responsibility. Though you can certainly just show up with your photo ID (and maybe need to have your CREF contract number), they hope you can call in ahead of time to reserve a spot. Here is what they say, with the meeting at 3 PM, Monday July 20, at their HQ at 730 Third Ave. in Manhattan (i believe between 45th and 46th streets, but check):
“If you plan to attend, please call 1 877 535-3910, ext. 222440 to obtain an admission pass. Government-issued picture identification is required to enter the CREF annual meeting. Please note that no laptop computers, recording equipment or cameras will be permitted in the meeting hall. . There will be no provisions for checking bags and packages; therefore, please refrain from carrying oversized items as they will not be permitted into the meeting space.”
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I planned to retire within the year, so a few months ago I wrote and asked for a retirement illustration on a single life annuity conversion. Luckily ( I thought) I had moved all my assets to Guaranteed TIAA funds from CREF right before the stock market collapsed.
Last week I asked for a final estimate on my planned annuity and the estimate is now over a $1000 less than the illustration from a few months ago. I talked to several “advisors” who seem to agree that that much of a change didn’t seem right- especially when they compared the payout with other Triple A rated companies like Fidelity- and thought the illustration had not taken into account the various “vintages” of my accumulations .
Finally, the last advisor said the in January 2009 the Board of Directors reduced the payout interest rate drastically. While I understand interest rates fluctuate – but where is the Guaranteed in “Guaranteed- TIAA” except that TC now has a guaranteed to hold onto my assets for up to ten years Transfer annuity Payout –so I can’t even get the readily available higher payout from other carriers.
And at the new TIAA payout rate I will have to delay my retirement – but the accumulation rate is so low that it will take years to get back where I was. It’s a bait and switch con.
I was told that my complaint is being sent to a Resolution Specialist.
Can anyone tell me what recourse I have. What can I expect from the Resolution Specialist or should I just go to SEC – and or get a lawyer
Look, I don’t work for TIAA-CREF, but your – understandable – complaints are not on as firm a foundation as your degree of anger suggests. I do agree that TIAA-CREF has never made it clear enough that the annuitization payout rate varies. Despite all of their literature and the plain-English contract you have in a drawer somewhere, it was news to me. I only found out because they suddenly started providing the payout rate when you looked at the interest rates for TIAA Traditional on their web site.
But suppose that you went into a bank and asked for a quote on a home equity loan. Then you came back in nine months and tried to take out the loan. Whoa, they say, interest rates have changed, and you can’t have the old rate anymore. Or to put it the other way around, suppose you agreed to lend your brother-in-law $5,000, and then you lost your job and had to take a lower-paying job. You probably couldn’t keep your promise. That corresponds to the decrease in earnings of the General Account of TIAA, where the money for your annuity comes from.
Nobody at TIAA-CREF ever told you that you were “guaranteed” to get the estimated payout. I’ll bet there was even a disclaimer below your quote. What they guaranteed (subject to the claims-paying ability of TIAA …) was that your principal would not go down, and you would never earn less than 3% during the accumulation phase and 2 1/2% during the payout phase. There is no case I know of where that guarantee has not been honored.
(I’m sure you’re not interested in 90 years ago, but they originally promised more than they could earn, because it was such a new idea in 1918. They had to borrow money to make good on those promises, but they did. And they eventually lowered the “guarantee” to 3% for new accounts. But they kept their promises to existing accounts.)
Tim-
I understand that TC cannot guaranteed at the exact estimated payment amount. However, I requested my estimate within a year of retirement as they suggest, and the year to year variations have been relativley stable. I think most people would have reasonably relied that the estimate would be close to the final payout amount.
A few month later when I checked the estimate on the TC website and was shocked at the drop. I contacted TC, I was told by the advisor that it must be a mistake. Two month later after I submitted my retirement request I was informed that it was not a mistake, but that my entire TIAA account collapsed based on a Board of Directors decison to drastically reduce the rate. So I expereinced a 15 – 25% drop in my monthly payout estimate , without any notice or warning from TC about an unprecedented event.
A reduction that TC did not publicize and thier “advisors” were not aware of. Many of my colleagues are equally affected and angry. We will be filing a SEC complaint. Meanwhile, we are reaching out to other colleague and looking for an attorney to take on a class action lawsuit. Contact me if you simialrly situated.
Your title of bait and switch attracted me because I have been baited and switched regarding an inherited IRA that I was encouraged to put in the TIAA fund at 5% and then after I had agreed told that I could not but should put it in managed allocation which I was told was a balanced fund. It was not. Their adviser never provided me with the promised prospectus after I had signed transfer forms (he told me that they were in his car and he would give it to me on his way out, it never happened and I was trusting.I have filed an SEC complaint but they only mediate or pass your complaint back to TIAA. They cannot get you your money back. Additionally if you are dealing with pension rather than their so-called wealth management program , brokers, mutual funds and the like, your complaint has to go to the labor department not the SEC. The SEC does do not seem to be able to force justice or regulation upon these companies. In my case TIAA did not even respond to an order from them to respond to me. Beware any information you or advice you get from TIAA-CREF retirement or “wealth advisors. In our case they misled us, misrepresented their products and selves to us and delayed us until a large part of our retirement was gone.
I have not posted to site before but I have several colleagues who have left TIAA-CREF entirely because they were not happy with them upon retirement.
TIAA is plagued with politics. I know many key people in their business group mainly in the Wealth Management and they have a common story that their IT is incapable and even though they are spending millions of dollars on their system and stability, they are not getting much out of it. The problem is that their outflows are going to be a lot more because their client base who is ready to retire is increasing as they have very old clientele, while inflows are declining. So this company is going for a spin!! watchout..
I understand that TIAA has spent millions and millions on two IT centers. One duplicates the other. the cost of these on their annual budget must be taxing on their expenses. Its state of the art. But the cost of having these is questionable.
Jim, you said “TIAA is plagued with politics”. Could you expand on this a little? Who’s involved and what are the issues and conflicts?
Would also appreciate it if you could get those key people in the business group to give a little history abut what went wrong with the IT system. Who built the thing and why did they make the transition when it obviously was not ready?
elp wrote on July 17, 2009 at 12:49 pm
“Since repeated attempts have failed, can someone please provide me with the name of a lawyer who handles matters with TIAA-CREF.”
Try: http://www.stockbrokerfraudblog.com/2008/08/2nd_circuit_reinstates_tiaacre_1.html
I’ve lost confidence in TIAA-Cref ’s integrity. Their administrative fees actually caused my 401k Money Market account it to LOSE value over the last quarter – money I moved from Growth Funds to keep from losing big when the Market began to tank. OMG ! So, they ate up any interest earned, and then dipped into my principal. I’m getting away from TIAA-Cref ASAP, and looking into more sensible options. It’s really a shame because I’ve had the account since the early ’90’s and no longer have confidence in their practices regarding OUR money which they are (mis)managing.
Hi All,
The last time I wrote on this site was 2006 and I can see that things are not better. My University just starting allowing other companies besides TIAA/CREF for our mandatory retirement. What is a good site to check these other options out? Fidelity is one of them.
I have finally managed after 3 months of mess to move ALL of my allowed funds out of TIAA/CREF and now have my monthly SRA rolled over to Vanguard. At first I was told by several associates I could not do this but I am 60 and they were unaware of their own rules. I like Vanguard, they have been very helpful to me but my University does not allow our mandatory retirement to go there.
I have been with TIAA/CREF since 1997 and up until this past year, I have had no complaints.
Two things happened this past year that have caused me serious concern. FIrst, I called them back in the beginning of October 2008 when the market was in a free fall and requested them to move all available funds from my SRA to TIAA Traditional. When I checked my quarterly statement at the end of 2008, I learned that this had not been done.
Second, it was my understanding that the funds transferred into TIAA Traditional would be earning 4%, which was the rate of return guaranteed at that time. This has not been the case. They are only paying a 3% return. Do I need to contact the SEC?
All vintage rates are adjusted every year on March 1. Any funds deposited in October 2008 are now earning 3.5%. All funds deposited after October 2008 are now earning 3.0%. The guarantee is that 3.0% is the minimum rate that you will ever receive. Not too bad in the present environment for a fixed income investment.
If you can show that you requested the transfer in October 2008, you may be able to get them to move your funds into the October vintage. Give them a call.
My husband died in June 2008 at 43 yrs old. When i got around to checking into the account it had lost a signiicant amount of money. I asked why I wasn’t sent any statements. I was told I could not access the account,as the beneficiary, because I had not sent in a death certificate. In the meantime my husbands employer notified them imediately of his death with a death certificate. How else would they have known he was deceased? They have caused me more anguish and I have yet to get up the courage to deal with them.
I have had people say everyone is in the same boat with losing money. Not true. If you are still here and contributing you are not in my boat.
If anyone has any words of encouragement, I welcome them.
See my post below and shoot me an email, I can help you. I have clients who dealt with the same thing you are going through. Too bad I just came across your post as I would have liked to help you sooner.
Best
Chris in NY
I started a new 403(b) account with TIAA-CREF earlier this year after starting with a new employer simply because my old employer used TIAA-CREF. Within three months, I realized things were very wrong (for many of the same reasons noted by others here–missing contributions, misallocated funds, incredibly incompetent customer service) and opened a new 403b with Vanguard. It took me three more months to get my money wrested from TIAA-CREF's grubby fingers and into my Vanguard account. but I am out of there.
Looking at this blog, it is clear that the problems are systemic. For more evidence, check out the below recent article, and get out if you can.
link
In August I took over financial control of my 82 year old mothers finances. I went online to the TIAA-CREFF website to change the bank for all of her monthly fixed payment life annuities. I did not realize at the time that 1 of the 5 accounts was not showing up on the website at all. That accounts check was being deposited to the old account but I wanted it in the new account with the other 4. After numerous calls the 5th account finally showed up online and I was told in December that all was fixed.
If is now the 5th of the month and to date, she has received no checks this month at all. I was told yesterday that somebody had changed all the account numbers and made a single numberal error so the deposits were rejected and that it was all fixed now and the deposits were resend yesterday.
As of this AM I checked online and no funds are pending. My mother now has no income to date for the month.
Are they incompetent or are there other issues. Are they in trouble finacially and hiding it?
On top of all that, their website has been down for over 48 hours so you can’t check anything online. My next call will be to the SEC and CNBC to find out if there are others who are not getting paid.
As an financial services rep with one of the largest, private financial institutions in North America (one that didn’t need/take any TARP funds) I will say that the sooner yours and your mother’s relationship with TIAA-CREF come to a close the better off both of you will be.
I’ve made a career by absorbing tens of millions of dollars that were once ‘managed’ by TIAA-CREF and taken over those accounts through my company. And that is the only time when these types of games that you are speaking of will cease for you.
Type into Google the following: TIAA-CREF and see what the most commonly searched words are that follow the name TIAA-CREF. The 4th most commonly searched phrase is “TIAA-CREF problem.” You are one of thousands of people who have dealt with and will continue to deal with mind-numbing issues related to money and this company’s lack of administratively knowing how to handle it.
My clients all agree that there’s a reason why TIAA-CREF has some of the lowest investment fees in the investment world, and that’s because you really do get what you pay for when it comes to TIAA-CREF.
I wish you the best of luck dealing with them.
-Chris in NY
One would think that TIAA-CREF could hire staff and/or add additional computer capability so that the system is not overwhelmed by its clients trying to access their online accounts. The system was down all night on January 4, supposedly because of high volume, it was back up around 3:30 a.m. CST the morning of January 5, and then it was back down when I checked around 6:15 a.m. CST the morning of January 5. The standard message indicates TIAA-CREF is working on the situation.
As a former T/C employee (14 years), I can tell you a little about what is troubling them.
Financially, they are strong in that they did not invest substantially in “toxic” assets. This was the problem that affected so many financial companies, but not T/C. However, the low revenue streams they get from their products, made worse by the severe market decreases last year, have caused major belt-tightening to occur. Also, the loss of client assets to competitors (much of it due to all the servicing problems described above) compounds the problem. As a result, T/C has laid off a lot of “experienced” (i.e., higher paid) staff. When I left T/C in 2008, over 50% of the company staff had been there for less than three years. This all began in 2003 when Herb Allison (now running Fannie Mae) took over as CEO. Herb is a cost-cutting kinda guy, and he laid off 500+ employees, many of them experienced IT pros, while at the same time trying to ram through a new, very complex IT record-keeping system. Great idea, but horribly executed. This has been the primary cause of all the servicing problems we have seen over there over the last six years. An extremely complex new system, full of bugs, and no one over there knows how to use it. I am not kidding when I tell you they have IT staff who have told me they could not figure out how to fix the problem when clients experienced missed or incorrect payments, or plan information went missing. They just tried different random solutions until one finally worked. That is why so many of the issues mentioned by so many of these posts claim that the same problem kept happening over and over again. And then you call in to complain, and you end up dealing with someone who is very polite, but who doesn’t understand the system either. They will probably try to sell you something though, since the new CEO (Roger) has said plainly that he wants to implement a “sales culture” there, so now all the phone reps are under intense pressure to bring in new assets. Welcome to the new TIAA-CREF.
Over two years ago I attempted to transfer my holdings in the TIAA-CREF Real Estate Fund into another fund. TIAA-CREF had made this option unavailable online. Prior to this time all funds could be accessed and managed online. I then attempted to transfer my holdings on the phone (TIAA-CREF’s website stated that the Real Estate Fund could not be managed online.) I was put on hold and could not reach a consultant. Since that time my accounts lost approximately 1/3 of their value due in large part to losses in the Real Estate Fund. TIAA-CREF’s change in policy is directly responsible for my loss.
If TIAA-CREF is going to change their policy to not allow online management (which I object to as it was not the policy when I decided to invest in the Real Estate Fund in 2005) it behooves them to have consultants available to handle phone requests. TIAA-CREF’s phone availability has always been poor and it continues to deteriorate to the point where it is almost impossible to get someone without waiting nearly an hour, and even if you can get a consultant, they are usually pretty clueless and unhelpful.
I am outraged that I was not able to make the transfer that would have preserved most of my retirement account. TIAA-CREF is responsible for this loss and should be held accountable. Furthermore, the policy that led to my loss should be changed to allow customers to fully manage their funds online as phone consultants are seldom available.
Not correct that TIAA hasn’t had problems with bad investments, they have had significant losses from mortgage backed securities, and A.M. Best has downgraded their credit rating outlook to negative. The losses recognized so far (through 9/30/09) are $7.2 billion, with very possibly more to come. Their financial strength is still highly rated, but in order to repair their balance sheet there may be some impact on interest/dividend rates paid.
I just read a post where TIAA had some downgrading in their credit rating and has had some significant amount of loss.
I’ have heard that TIAA gives large bonus money out, just like Wallstreet and the banks that were bailed out.
Is this still the practice there? Are they still spending large amounts of money in IT with several data centers as backups while not providing 24 hour web availability?
Don’t trust this company- and do not give them your money.
I know that seems like a broad, and unsupported statement. -After being seriously burned by this company- I must advise anyone who wishes to invest their money to carefully review all of their options- check up on who you are doing business with.
They have had continual IT problems that have led to devastating problems for their customers- it also seems that these problems are self perpetuating- basically they keep happening, and the company avoids taking responsibility for them-
I have had difficulties with TIAA CREF for years. They reported in error to the IRS and it took three years to sort it out and still is not fixed. One can never get a person dedicated to the problem, even tho TIAA CREF admitted they had made mistakes. The IRS is still on my case. I took the bulk of my retirement savings and put them in another fund family.
Now I read that TIAA CREF will outsource 1500 jobs in Denver to India. I will pull out the remainder of what I have at TIAA CREF. This is a company that presents itself as investing for the higher good. Job loss in the US in no way can be construed as a higher good.
Susan, can you tell me where you heard about such outsourcing to India–where I can verify that. I have been involved for 25 years with/against TC on issues of social respsonsibility. Recently the American Federation of Teachers passed a resolution relevant to TC on labor issues. And if this is true, I need to know for my effotrts. Thanks, and sorry about your personal situation. Neil
I saw a couple of articles in online newspapers out of Denver. One, I think, was the Denver Business Journal. However, I think the figure was lower than 1500. They also said that the jobs would be moved by attrition.
Here is another link to an article concerning the outsourcing. The Denver office has about 1,400 employees, and apparently this would affect about 70 positions.
http://denver.bizjournals.com/denver/stories/2010/01/25/daily87.html
The CEO is on the presidents economic recovery advisory team. The CEO has been outsourcing jobs to India for a couple of years. This is a fact. The primary investors in this company traditionally have been educators. These dedicated professionals are preparing and educating our youth to enter a job market where their retirement savings manager is outsourcing those very jobs to a foreign country,
This is the very same TIAA-CREF that relocated employees to Charlotte after they sold their homes in the tri-state area (NY, NJ, CT) and brought their families to NC only to get laid-off 6-12 months later. This company didn’t know 6 months in advance that they would be having a mass layoff? I find that very hard to believe so the only conclusion remaining is that they did know and let those poor people sell their home and relocate their lives anyway.There are very few redeeming qualities about this company that remain. There are a handful of people who actually know what they’re doing but they are far outnumbered by the incompetent upper management.
JQPUBLICX, Thanks for the info. Can you verify that in some way or where I can get info showing that they have been outsourcing to India for years–and its effects on employees? thanks, neil
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