Comments on: Problems With TIAA-Cref

By: Brian

Brian — Thu, 29 Oct 2009 20:23:43 +0000

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

By: Kathy

Kathy — Tue, 13 Oct 2009 01:17:13 +0000

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.

By: BH

BH — Sun, 11 Oct 2009 03:55:21 +0000

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.

By: JohnQPublic

JohnQPublic — Sat, 10 Oct 2009 22:41:32 +0000

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?

By: Marcella McClure

Marcella McClure — Tue, 29 Sep 2009 03:05:27 +0000

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.

By: LB

LB — Wed, 23 Sep 2009 23:21:16 +0000

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.

By: Skinner

Skinner — Sat, 12 Sep 2009 10:45:11 +0000

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

By: BH

BH — Thu, 03 Sep 2009 05:31:52 +0000

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?

By: Andy S.

Andy S. — Tue, 01 Sep 2009 21:09:44 +0000

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.

By: Jim

Jim — Tue, 01 Sep 2009 17:57:55 +0000

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..

By: fergrimes

fergrimes — Thu, 27 Aug 2009 16:28:22 +0000

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.

By: Bait and Switch

Bait and Switch — Tue, 25 Aug 2009 14:16:22 +0000

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.

By: Tim

Tim — Tue, 25 Aug 2009 13:17:23 +0000

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.

By: Tim

Tim — Mon, 24 Aug 2009 17:38:45 +0000

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.)

By: Bait and Switch

Bait and Switch — Mon, 24 Aug 2009 08:42:05 +0000

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

By: Ex-T/C

Ex-T/C — Wed, 12 Aug 2009 21:27:25 +0000

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.

By: Neil Wollman

Neil Wollman — Fri, 17 Jul 2009 20:38:10 +0000

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.”

By: elp

elp — Fri, 17 Jul 2009 16:49:21 +0000

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.

By: Bill

Bill — Sun, 12 Jul 2009 15:38:03 +0000

Hi,

We are having difficulty getting TIAA to honor my Father’s internet designation because his ex-wife is contesting it. Funny thing is they honored it for his life insurance policy. Any hints? Thank you, Bill

By: Bill

Bill — Sun, 12 Jul 2009 15:30:08 +0000

If you found a good attorney please email their info. We are experiencing problems with TIAA regarding the changing of beneficiary designations over the internet. Thank you, Bill

By: Flexo

Flexo — Thu, 09 Jul 2009 22:51:05 +0000

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.

By: Donald Myers

Donald Myers — Mon, 06 Jul 2009 04:04:42 +0000

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.

By: Don T

Don T — Fri, 19 Jun 2009 03:01:32 +0000

This will be the 3RD straight year that i have not recieved my Annual Payout from my Annuity at TIAA-CREF on time. The payment is supposed to be Directly Deposited into my Bank Account on May 1. I have to make phone Calls to Customer Service Staff including Supervisors who tell me Basicly anything from where Very Sorry this happended again, we are having Trouble Understanding the Rules of your plan, and we will send you Different Paperwork Etc. So far this year, I have sent 2 Sets of paperwork, made 6 Phone Calls, and still have not recieved my Annual Payout as of this date. I resigned my position at Lake forest College in 2007.

By: Interested Bystander

Interested Bystander — Wed, 17 Jun 2009 03:22:04 +0000

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.

By: Former TIAA-CREF employee

Former TIAA-CREF employee — Sat, 13 Jun 2009 11:49:10 +0000

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.