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Problems With TIAA-Cref

This article was written by in Investing. 1,333 comments.


Apparently I was not the only person having problems with TIAA-Cref.

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. My minor situation was resolved to my satisfaction.

Do you have any thoughts about TIAA-Cref? Read the over 400 comments below and leave your own if you have an experience with TIAA-Cref to share.

Updated March 7, 2011 and originally published January 11, 2006. If you enjoyed this article, subscribe to the RSS feed or receive daily emails. Follow @ConsumerismComm on Twitter and visit our Facebook page for more updates.

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Luke Landes, also known as Flexo, is the founder of Consumerism Commentary. He has been blogging and writing for the internet since 1995 and has been building online communities since 1991. Find out more about him and follow Luke Landes on Twitter. View all articles by .

{ 1333 comments… read them below or add one }

avatar The Professor February 25, 2011 at 5:01 pm

Fill out the MDO (Minimum Distribution Option) form on their website and mail/fax it to them. This serves as a contract between you and TIAA-CREF whereby they agree to pay you the Required Minimum Distribution for each contract on a monthly,quarterly, or annual basis for the rest of your life.

Good luck and double check their every move. They mess up just about every transaction, no matter how simple.

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avatar Jonathan February 25, 2011 at 11:22 pm

Is this what T/C told you? It’s false and misleading!

You do not have to enter into an MDO contract with them to have T/C pay you your RMD.

Your current contract pursuant to Treasury Department regulations, has to allow for the payment of your RMD. T/C falsely told us that an “interest only account” ONLY pays interest and not the RMD. This is a violation of IRS regulations!!! If you are interested I can cite that portion of the code.

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avatar zkeith February 25, 2011 at 5:36 pm

After reading the comments at this Web site, I was beginning to dread having to deal with TIAA-CREF. However, I’ve found the service to be excellent. I don’t use the phone in contacting TIAA-CREF. Rather, I use the e-mail feature, and I’ve had responses within the 2 business days the Web site mentions. When a representative says he/she will mail me something, it has always happened–and promptly without my having to do any follow-up. When I begin MDO in 2012, perhaps I’ll have a different experience. However, I don’t turn 70.5 until early November 2012, and I will need the first distribution by December 31, 2012. Therefore, I don’t think they will be able to delay processing distributions. You can find the e-mail feature under “Contact Us,” and if you have another question of the person who responded, you can send a reply to that person. I hope I am as pleased with the service I get in the future as I’ve received in the past.

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avatar Jonathan February 25, 2011 at 11:15 pm

After reading your comment, I wonder what your understanding is of the RMD rules are. You don’t have to enter into a new MDO contract to meet the RMD requirements. T/C leads you to believe this – it’s false and misleading.

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avatar The Professor February 25, 2011 at 11:48 pm

Isn’t it entirely absurd that such a simple process should be made so complicated by TIAA-CREF? It’s very frustrating when you can’t get a consistent response from the people who are supposed to be the experts.

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avatar Jonathan February 26, 2011 at 1:09 pm

Each T/C employee seems to have his/her own understanding of the RMD rules – this indicates that they haven’t received correct information, training, to correctly advise clients. I think this may be deliberate. I have started believing that this may be part of something much larger at T/C. I don’t feel that my money is safe there. Do you trust them? Would you be interested in having some government regulatory agency look into what they are doing?

I now understand the RMD rules after doing research on the web – if I was able to gather this information, would it not be simple to provide this knowledge to T/C employees? Or maybe T/C doesn’t want its employees to FULLY understand RMD requirements.

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avatar Ex TIAA-CREF February 26, 2011 at 2:23 pm

As an ex management employee of TIAA-CREF with an insider’s view of the company I can assure you that all of your concerns are valid. TIAA-CREF is without a doubt one of the most dysfunctional companies in the financial services industry. It starts from the top with the CEO, who got the job two years ago most likely because of his close relationship with the Obama administration. Is it any coincidence that Roger Ferguson was on the President’s Economic Recovery Advisory Board and has now been appointed to the President’s Council on Jobs and Competitiveness? His qualifications are dubious at best. He’s not only created zero new jobs at TIAA-CREF, but has reduced the workforce by hundreds since his arrival as CEO. Has the reduced cost structure resulted in benefits to the 3.5 million participants? Hardly. During his reign as CEO, TIAA-CREF has reduced interest rates to the absolute minimum allowed under its contacts with member institutions.
On Monday 2/28/11 TIAA-CREF will pay out millions of dollars – in bonuses to its highest achieving salespeople. What a farce.

avatar Paul March 17, 2011 at 9:34 am

I work we Penn State we are forced to either be in the state system, sres, or TIAA Cref. When I started working here in 1990 I planned on staying for 5 years. 20 years later i;am still here. IS there any way to start a class actionlaw suit against TIAA-CREF? it’s obvious that they do not have mine or anyone eelses best interst in mind. The choices for investments are limted to stocks and bonds. The best fund, mIdcap, I can’t even get into. I’m suppose to be able to and am responsible for making all the investment made with the funds I and Penn state contribute but I have to do so with both hands tied behind my back. If I trade to often I am threatened with a two percent penalty on my trades. The economic times we are in now and the volitity of the stock market demand frequent trades to maximize returns. I move money all aound my IRA and have over a 57% return over the past 15 months. My fees for trading are 10 bucks!
Another problem with TIAA is that there quarterly statements are very misleading. They include contribution when reporting quarterly gains. They also do not provide daily date on any of the premier class of funds to keep track of the accounts. Even when I can get monthly data, the data is provides in a fashion that is extremely hard to work with.

avatar Whatev March 11, 2011 at 11:31 pm

Your comments are misleading. There are other options that reps discuss if you’d bother to ask rather than spending all your time bashing.

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avatar Former Employee March 18, 2011 at 1:43 pm

The problem is with the new computer systems they put in during the 90′s and an attitude that doesn’t lend itself to resolve customer problems quickly. They’d rather set-up a room full of consultants to “escalate” your issue rather than work on it — you are right though, you will get transaction and if it’s late it will be on them assuming you’ve followed all of their “rules” to get the request in “good order” (ex: if they say mail forms and you fax, then that would be on you … many times the requirements are not going to make sense when thinking about risk and your protection or necessity, but you’ll want to do what they ask) .

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avatar Former Employee/Clarify Comment March 18, 2011 at 4:29 pm

Just wanted to say too — the computer changes mentioned were not activated until well after the turn of the century (don’t want to confuse you with things looked at “in the 90′s”).

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avatar Susan Dodge February 26, 2011 at 6:09 pm

How does one go about pulling out of TIAA-CREF. I’ve been trying to roll together RA and SRA accounts from 2 former employers. T/C emailed me a bunch of forms which I completed but now they say they are not all the right forms and yesterday emailed a bunch more, plus some have to come by regualar mail. I’ve had 2 different reps in the month since I started this. The forms they sent yesterday in a PDF won’t print out on my printer. The rep is saying it’s a printer error on my end but other PDFs I received yesterday from other people print just fine. I think they don’t know what they’re doing and it’s scaring me now as it’s my entire life savings at stake.

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avatar Jonathan February 27, 2011 at 2:37 pm

Do you have an iMac? If you do, take the T/C PDF and go to Print (but don’t go any further). When the dialog box opens look at the lower left bottom, “PDF”. Drag and open “save as PDF”. Do it and then print that document.

Pretty hard to transfer funds out – I think we should all join forces and file a formal complaint with the appropriate government agency. You can also contact me at my email address:
alarmingmaestro@willex.com

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avatar Marcella McClure March 17, 2011 at 4:23 pm

Susan what you are experiencing is typical of the lack of service when you want to withdraw from this company. After 10 years of problems with them, I still cannot get them to send the correct forms in a prompt and timely manner. Everyday they delay means profit on your funds for them. I am giving them until Monday to get me mt TPA forms or I will be filing complaints again with the state of NY,

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avatar retired prof March 17, 2011 at 8:25 pm

I’ve had excellent service from TIAA-CREF when I contact them by e-mail. I don’t contact them by phone. When they say they will send something, they do. I’ve had no trouble either receiving materials or receiving the correct materials. Also, they always answer my questions. When using e-mail, they’ve always replied within 2 business days–and sometimes within 1 business day. And you can keep dealing with the same person by putting that person’s name in an attention line at the top of a reply message.

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avatar Ex TIAA-CREF February 27, 2011 at 8:55 pm

There were over 5,000 written complaints filed against TIAA-CREF in 2009, which must be reported to FINRA for disposition. TIAA-CREF is an insurance company based in New York. A good place to start the ball rolling would be the New York State Insurance Department.

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avatar Jonathan February 27, 2011 at 10:30 pm

I am aware of the NYS Insurance Department. I was planning to submit a complaint there but thought if more than one individual did that, it might have a better chance, especially with some media coverage. I don’t know what FINRA is. But NOW I do – just found it on the web – was not aware of FINRA – good place to document my experience.

Any other way to go back and forth?

Have there been complaints relative to T/C submitted to the NYS Insur Dept?

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avatar Ex TIAA-CREF February 28, 2011 at 8:18 am

There have been complaints submitted to the New York State Insurance Department. The main focus has been on the Wealth Management Division of TIAA-CREF, which targets the older, wealthier 403b participants through highly deceptive sales practices.

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avatar Jonathan March 3, 2011 at 12:23 pm

It might be possible that you may know the answer to this question, that others have asked as well:

At T/C, is what they told me correct?: the only way to satisfy the RMD rules is by transferring IPRO monies to an MDO account. Are there other choices that would be better for me?

I have a feeling that an MDO is some how advantageous to T/C – is it? If so, how?
Is there something they are not telling me?

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avatar Marcella McClure March 9, 2011 at 1:30 am

I filed a complaint with the NYS Insur Dept. when TIAA/CREF got their new software platform and misplaced 10,000 when I was trying to rollover my SRA funds to Vanguard. I am now old enough to have this done monthly, and they still screw this up every few years. I am forced by my University to put my mandatory retirement with them and I am lobbying to have other choices made available to us. I am very afraid that I will not get my retirement funds out of them.

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avatar Susan Dodge February 28, 2011 at 7:11 pm

I’ll join in with a group filing complaints but I’m in the process of moving my money out of T/C since my experience last week was so creepy. Terrible customer service from polite young people who are not knowledgeable. I’m retirement age and can move all but some that’s tied up in a traditional TIAA annuity and has to be moved over a 10 year period.

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avatar Marcella McClure March 9, 2011 at 1:31 am

I am more than willing to join in a group complaint.

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avatar Marina Morilla February 28, 2011 at 7:57 pm

Unfortunately I have a lot of money tied up in Tiaa Traditional and I recently learned that not only may I not pull out my money as I need it, but only 1/10th each year for 10 years, but I also learned that the rates that I’m locked in at will never rise, even if the interest rates in the market place rise. I’ll still be stuck with a 3.5% rate for the 10 years after I retire. And I can’t retire for another 4 years! So, I have hard-earned money that could grow substantially if I invested it somewhere else, now that the market is picking up, but I can’t access it and I can’t increase my returns. It’s maddening. Why is this lawful? Does the govt not want retirees to have sufficient moneys to live on?

And the big issue that I have with this set up is that it was never communicated clearly, and in bold print anywhere. This was a total surprise when I went to a local Tiaa-Cref office and sat down with a representative. And a few years before I had tried to go to that same office and the receptionist made it clear that I could not get an apt with a representative in that office. And when you call Tiaa-Cref you have to wait forever to get to a live person, and if you want to have a follow-up conversation later, to get clarification on a few things, you cannot reach the same person again. And their website stinks. It is not user friendly. And… lately I’ve pulled out the other moneys from Tiaa-Cref and they send the checks VIA US MAIL!!! (even though I had requested that they use an overnight courier like Fed Ex or UPS, and I offered to pay the charges) Can you imagine if a check got lost in the mail???? And we all know that mail gets lost. In other words, Tiaa-Cref have no respect for its clients hard earned dollars, and I MOST DEFINITELY WANT TO BE PART OF ANY LAWSUIT AGAINST TIAA-CREF, SHOULD A LAW FIRM TAKE ON THE TASK!

Sorry for the length of my email!

Marina

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avatar Whatev March 11, 2011 at 11:29 pm

So quit moaning and start transferring from traditional to what you consider better investments within your account now, rather than waiting for retirement!

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avatar Susan Dodge March 3, 2011 at 9:05 pm

I think they may be trying to get rid of those of us who have less than the $500K it takes to be a high net worth investor. The reason I think that is that customer service during the process of moving my money out of R/A and into Vanguard was EXCELLENT. Previously I had not even been able to get through the process of opening the rollover IRA to consolidate my various funds into at T/A. They sent wrong forms and wrong instructions and that was only after grilling me about just how much money I had tucked away that could be moved in there. I think it just wasn’t enough to interest them.

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avatar Susan Dodge March 3, 2011 at 9:07 pm

I’m tired. Replace R/A and T/A with T/C in the previous post!!!

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avatar Ex TIAA-CREF March 3, 2011 at 10:08 pm

TIAA-CREF’s main motivation is to prevent assets from leaving for another financial services firm such as Vanguard or Fidelity. Naturally, the larger the account size the more motivated they are. They have many ways of keeping your money from leaving once you are eligible to do so. For example, when you turn 70 they will try to convince you to sign an MDO contract ( Minimum Distribution Option) so that you are tied to TIAA-CREF for the rest of your life. Once you die they will try to convince your heirs to continue the MDO. The IRS requires you to take minimum distributions from your retirement annuities if you are no longer working. It’s a fairly simple calculation. There is nothing that requires you to utilize TIAA-CREF’s MDO. You can receive distributions from your contracts by sending TIAA-CREF the distribution request form.

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avatar Current TIAA-CREF March 5, 2011 at 3:09 pm

so there is a lot of miss information on this site, when you open an MDO contract all you are saying is that you want TC to automatically calculate and send out the minimum RMD payment each year. If you ever want to leave TC we accelerate the RMD payment that year and you are then able to rollover/withdrawal all your money if that is your wish. Every financial services business is trying to keep assets with the company and TC is no different and unfortunately people do have negative experiences with us but TC does care about helping the customers we work with.

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avatar Whatev March 11, 2011 at 11:35 pm

Thanks Current! I was burning up at all this idiotic misinformation!

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avatar Ex TIAA-CREF March 5, 2011 at 11:56 pm

TIAA-CREF’s management could care less about the participants. Their main desire is to get the biggest bonuses possible. Management and employees have been paid over $100 million in cash bonuses since 2005. Meanwhile, the participants receive the lowest possible interest rates in the TIAA Traditional Annuity. Hundreds of thousands of retirees have seen their income drop substantially in recent years. Is this the custodian of millions of participants’ retirement savings or a Wall Street Investment Bank?

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avatar Current TIAA-CREF March 6, 2011 at 7:50 pm

It’s the goal of every worker or employee to get as big a salary or bonus as someone can get, being an ex employee you were part of that same bonus pool and unless you are the first person in history to turn down a bonus you are being somewhat two faced here. Let me guess you were so distraught by the bonuses that were being paid out and how awful TIAA-CREF was to clients that you in good conscience just couldn’t stay with the company anymore right???? I don’t think so, you sound like a bitter employee who was probably with the company for years and received the same bonus that you are complaining about.
Participants who have decided to take an annuity and tie that payment to TIAA Traditional have not seen ANY reduction in their payments over the last few years so again you are giving out misinformation.
TIAA Traditional rates were just increased to 3.85% in RA and GRA contracts and 3.10% in GSRA and SRA contracts and when interest rates are at 0 percent i would say that 3.10% in a liquid account is damn good!

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avatar Ex TIAA-CREF March 6, 2011 at 9:47 pm

First of all, I don’t for TIAA-CREF because they are one of the most unethical organizations I have ever seen. You’ve obviously been brainwashed or are just clueless. As far as your statement about TIAA Traditional being a “liquid account”, I suggest you go back to the first day of training. This annuity is the furthest thing from being “liquid”. In fact, the principal can only be taken over a ten year period. That is not liquid, genius! In terms of your comparison with short term U.S. Treasury rates, you are way off base again. TIAA Traditional is a fixed annuity comprised of a wide variety of investments that do not compare with the safety or liquidity of U,S. Treasuries. I hope you aren’t conveying your flawed logic to the TIAA-CREF participants because that is not only unethical but illegal as well.

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avatar BH March 6, 2011 at 11:17 pm

Can either of you explain what criteria are used to determine if a bonus will be awarded and its size?

Also who gets these bonuses… phone reps, WMAs, IT personnel, management, etc.?

BH

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avatar Ex TIAA-CREF March 7, 2011 at 12:22 am

The biggest bonuses are paid to those individuals who sell the most additional TIAA-CREF products to the Retirement Annuity participants. It also helps if they are higher margin products such as managed portfolios, after tax annuities, and life insurance,

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avatar Current TIAA-CREF March 7, 2011 at 12:28 am

this is not true at all, it is really too bad that he/she is telling people this.

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avatar Current TIAA-CREF March 6, 2011 at 11:21 pm

Your telling me that TIAA Traditional inside of a GSRA, SRA or IRA is not liquid????? I do understand and know that the RA and GRA are not liquid but I’m talking about liquid investments which the GSRA, SRA and IRA are. I’m not talking about US Treasuries, I’m talking about interest rates in general, if i were someone who had $50k in an IRA and i wanted no risk I could go out and put money in a CD and earn half a percent for a 1 year CD or use Traditional and earn 3%. Who cares what the underlying assets of TIAA Traditional are because when you buy a “Fixed annuity” you are transferring the investment risk to the issuing company and the only thing you should be concerned with is how stable the company offering the guarantee is and that’s where ratings come into play. If a consumer were to go out and buy US Treasuries that by no means is a guaranteed investment, sure the US gov’t is more than likely to pay their obligations but the return on those investments would be paltry at this point because general interest rates are so low. I’m curious as to what financial services organization you would deem reputable? I worked for Vanguard before coming to TIAA-CREF and they have huge bonus payouts just like TIAA-CREF and both companies are considered “not for profit”. Lastly, if i was someone who had a bunch of money tied up in Traditional in an RA or GRA contract and my goal is to take all my money out of TIAA-CREF at retirement then i would begin the TPA process nine years before retirement and if people never reviewed or understood their options on their retirement accounts until the year they retire then shame on them……

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avatar Ex TIAA-CREF March 7, 2011 at 12:18 am

TIAA is a stock life insurance company. Since 1988 , both TIAA and CREF have been subject to Federal income taxation following a decision by Congress to end the organization’s tax-exempt status under Section 501 (c) 3 of the Internal Revenue Code.

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avatar Current TIAA-CREF March 6, 2011 at 11:31 pm

just about every employee receives a bonus unless you are on what is called a personal improvement plan which is one step away from being let go by the company. The criteria used is a mixture of sales goals and customer satisfaction and the overall bonus pool is affected by the companies overall performance in the year (NET Flows). Each employee is ranked amongst employees in their area based on a scorecard but the size of the bonus is never known until a week before it is paid out. The size of one’s bonus can be pretty substantial especially when you are talking about WMA’s and especially the asset managers.

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avatar BH March 7, 2011 at 3:23 am

“The criteria used is a mixture of sales goals and customer satisfaction ……”
“Each employee is ranked amongst employees in their area based on a scorecard……”
“The size of one’s bonus can be pretty substantial especially when you are talking about WMA’s and especially the asset managers.”

Thanks for this information, as I have always been confused about how a WMA gets a “+” on their “scorecard”. Leaving aside the issue of getting an accurate measure of “customer satisfaction”, I would like to get some examples of how a WMA meets a “sales goal”. Apparently you disagree with “Ex T-C”‘s examples, so what kind of results could WMAs get that would add to their scorecard? When I contact my WMA what kind of action/transaction could I take that would help her improve her bonus (other than getting satisfactory information/service and reporting this to T/C)?

As a long time participant, I don’t understand what a WMA could “sell” me, that would help them meet some sales goal.

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avatar Ex TIAA-CREF March 7, 2011 at 7:36 am

The “Wealth Management Advisors” are sales reps for TIAA-CREF. They are compensated through a base salary and bonus based primarily on sales. i.e. convincing people like you to transfer their assets from an outside brokerage firm such as Merrill Lynch to a TIAA-CREF managed account.

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avatar Current TIAA-CREF March 6, 2011 at 11:38 pm

Administrative Assistants are even eligible for a bonus.

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avatar Ex TIAA-CREF March 7, 2011 at 12:10 am

The CEO Roger Ferguson received $16mm in bonuses 2008-2009. The biggest bonuses are paid for those groups and individuals that bring the most assets and fees to TIAA-CREF on an annual basis.

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avatar lizzy March 7, 2011 at 12:44 am

O-M-G, where to begin. “Current TIAA-CREF”, you are totally off base on TIAA Traditional, as far as clients are concerned. Take me, for example. I joined my employer’s plan straight out of grad school and didn’t have a clue about retirement investments. Nor did I have a “goal” for retirement when I’d just started working. What I did know was that we were required to allocate at least 50% of contributions to TIAA Traditional, so I did. Oh, sure, I’m a clever girl with an advanced degree, and I should have read all the materials, and probably I did … a few decades ago. But since I couldn’t opt out, what did it matter? Fast-forward to a couple of years before retirement, and I find out that I can’t access that money. I move it all into TPAs, but my retirement planning is screwed, and I’m furious. Easy for you to say “shame on me”, and that’s typical of the smug attitude of TIAA-CREF toward their clients. It’s as if my retirement fund is **your** money, and you’re doing me a whopping favor if you let me have any of it, especially since I’m a stupid bimbo who didn’t memorize the fine print and doesn’t know an RA from a GRA from a GSRA, SRA or IRA. Puh-leeze.

BTW, T-C hasn’t been a nonprofit for a long time. It only pretends to be and gets away with it in part because of its leftover dot-org domain. Vanguard isn’t a nonprofit, either, but it doesn’t claim to be. Prove me wrong.

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avatar Current TIAA-CREF March 7, 2011 at 1:34 am

I did not say that we are a “non-profit” the ex employee is correct in that we had that status changed on us, TIAA-CREF is a “not for profit” don’t ask me what the difference is but we do have that language all over our website.
My “smug” attitude is no way directed at you as a client but more so towards an “ex” employee who is trying to spread mis information about my company and it’s intentions. As far as your retirement planning and the restriction on TIAA Traditional you can always have those TPA payments directed to other more liquid investments or into an IRA so that at retirement you can access your money at retirement. You mentioned that you “had” to allocate 50% of your money to traditional which means you still have 50% in other investments that are completely liquid and accessible at retirement. If your intention is to move money completely out of TC at retirement than unfortunately that money that is in Traditional is restricted and it is probably best that you understand why the restriction exists in the first place. The primary investments in Traditional is Direct Real Estate and long term bonds, in a perfect world we would love to have Traditional be 100% liquid but if that were the case investors would move into the account in bad economic times and then right back out when the market is good and we would need to liquidate those long term investments in order to pay out investors and would be able to pay no where near what the Traditional account is earning now. We have local offices spread across the country and I would hope that you would take advantage of meeting face to face with us in order to help you through the process as i think we could help you plan for your retirement be it with TIAA-CREF or some other firm.

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avatar Ex TIAA-CREF March 7, 2011 at 8:18 am

You are spreading misleading information about TIAA-CREF. According to the website, the TIAA General Account is invested in: $83 billion Bonds/Preferred Stock; $71 billion Structured Finance; $16 billion Mortgages; $8 billion Private Equity/Limited Partnerships; $5 billion Real Estate.

“The participant’s principal, plus a specified rate of interest, are guaranteed by TIAA’s claims-paying ability.”

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avatar lizzy March 7, 2011 at 8:50 pm

“You mentioned that you “had” to allocate 50% of your money to traditional which means you still have 50% in other investments that are completely liquid and accessible at retirement.”

You still don’t get it. First, I retired several years ago and expected **all** my investments to be “completely liquid and accessible at retirement”. Whether 50% or 5%, TIAA Traditional was totally wrong for my situation, yet I was shoved into it and found myself trapped. I did meet face-to-face with a representative, who could only offer the TPA when I was trying to buy a house!! Instead of liquidating Traditional (my lowest-earning investment), I was forced to go into debt and withdraw funds that were earning at high rates. So I lost money two ways, just when I needed it most. Years later, I’m still stuck in a TPA that earns a couple of hundred per quarter if I’m lucky, when the same money could be earning thousands if invested elsewhere.

I expected flexibility and control over my retirement investments, along with the option to leave a provider if dissatisfied with its services. TIAA Traditional allows for none of that. It’s a relic of the pension era, similar to Social Security and only marginally more liquid. You can’t even buy your way out by paying a penalty.

T-C does itself a disservice by clinging to unhappy, resentful clients. If I could vote with my feet, I’d be less inclined to badmouth the company. As it is, I’ll be warning people to my dying day to be wary of T-C … and to run far, far away from TIAA Traditional.

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avatar LHR74 March 7, 2011 at 6:58 am

I was employed with TIAA-CREF for over ten years and my most recent position prior to leaving was a Wealth Management Advisor. While there are many purposes of a WMA, the main purpose is to consolidate all available non-TIAA-CREF assets into TIAA-CREF and to make sure that all client assets currently with TIAA-CREF are not sent to another financial services firm. The so-called investment guidance, portfolio review, or whatever title is used now is a way for the advisor to uncover assets that a client has invested elsewhere. Once that happens, the recommendation(s) of the portfolio review then are to consolidqate with TIAA-CREF or the TIAA-CREF Trust Company. The WMA receives a bonus based upon bringing in new client assets to TIAA-CREF. I do not know the current annual goal of the WMA but a recent goal (1 or 2 years ago) was $50 million per advisor of new funds.

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avatar John Mac March 7, 2011 at 7:24 am

I am a TIAA-CREF participant ready to retire. A Wealth Management Group contacted me to set up a meeting. Are you suggesting that the “Advisor” that would like to meet with me ” receives a bonus based upon bringing in new client assets to TIAA-CREF” ? Will I receive good advice or is this just a sales pitch? How much are the potential bonuses? Seems like a bit of a conflict of interest.

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avatar Dale March 7, 2011 at 10:47 am

John, based on your readings of all the postings here, I hope that you take this opportunity to get your assets out of TIAA-CREF as soon as possible. Otherwise, you may be as sorry as most of the experienced posters here; what else can we give you except our true experiences!

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avatar John Mac March 7, 2011 at 11:36 am

3/7/11 This is disconcerting. Isn’t TIAA-CREF renowned as the leader in retirement pensions for colleges throughout the US? I have my entire life savings with this company. I’ve heard some nightmarish stories about TIAA-CREF. Can these really be true or is it more representative of a small group of disgruntled posters?

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avatar Current TIAA-CREF March 7, 2011 at 11:52 am

you should certainly talk with a Wealth Manager and we are the industry leader when it comes to retirement planning and income. I think a lot of posters on here have dealt solely with our phone centers and when you have over 3 million participants there will certainly be some problems that arise. Before you past judgement for yourself you should at least speak face to face with someone at TC and then make a decision for yourself. Hope you have a good experience as that is our goal.

avatar Jonathan March 7, 2011 at 8:03 pm

3/7/11 1932

It’s not about a small group of disgruntled posters !

Look at what T/C did to me. They took my Required Minimum Distribution (RMD) monies in 2010, rolled them over into my IRA and then told me this January that my RMD for 2010 was not satisfied and that I would have to withdraw another $10K from my retirement account before 4/1/11 and pay income tax on it as well as all the other funds distributed in 2010. Put me in a higher tax bracket plus I was forced to remove $10K from my account and as a result, diminish my retirement income.

In 2010 I asked T/C if the monies rolled over into my IRA would count as RMD for 2010 – they told me “yes” and then in January told me the opposite after it was too late.

I not only got conflicting advice but I found out T/C rolled over my monies in violation of IRS rules – and when asked about what they did I got letters from T/C employees that clearly indicated that they had NO understanding of IRS regulations concerning RMD.

Hey “current tiaa-cref”, have any comments about this? How can your organization have employees giving advice who have no understanding themselves of IRS rules and regulations? I have letters from two employees that document my allegations.

John Mac, it’s true. Did you know that you can invest your money in a ladder of municipal bonds that yield 5% and more? And the income you would receive would be totally tax free. Worried about defaults? Look at the default history of municipal bonds. Liquidity? With a ladder of bonds, you would always have some coming due. It’s your money. You would control it and you would be able to take advantage of changing interest rate environments. And there are other investments, preferred stocks, MLPs, REITS, dividend paying common shares, corp bonds, all yielding more than a disgraceful 3.5% – and you have to pay tax on that 3.5% – what are you left with.

It’s not how much you make but how much you keep – how much of your T/C money will YOU keep?

avatar Whatev March 11, 2011 at 11:45 pm

If you have your entire savings with TIAA-CREF, you’ve probably been with them for awhile, right? Rather than listening to “nightmarish stories”, ask yourself how your investments have done for you. Have they grown at an acceptable rate (other than the last couple years of course)? I suggest you call TIAA-CREF, they have wonderful representatives who are happy to answer your questions and address any concerns you may have. Judge for yourself.

avatar EX T/C March 18, 2011 at 8:02 pm

John

LHR74 is basically correct. A WMA exists to retain assets and to bring in more. in this regard TIAA-CREF is no different than any of its competitors. The problem is they market themselves as different. Don’t believe it.
The majority of the WMA advisors do have your best interest at heart but they are put in a stressful situation. They need to serve two masters. the client and the employer. Since a WMA is an RIA they need to put the client’s best interests first. However, they are put under tremendous pressure to meet their numbers. At least a couple of years ago $50,000,000 was the number for tier 1 advisors. for tier 2 it was about $24,000,000 and for tier 3 about $12,000,000 to $15,000,000 annually.

Compensation is determined by assets brought in. Lip service is given to all of the criteria on the ‘scorecard’ but that is a smokescreen. you will never see it in writing, but bonuses are determined largely by asset growth. Bonuses can be in the six figures. I know for a fact. They are just commissions given another name. There is no problem with incenting employees especially if they are selling something of value. but there is a problem if the intent is to avoid the baggage associated with the term and still accomplish the same thing. Money is money. I don’t care what you call it. It is spent the same way.

My suggestion is to meet the advisor and determine for youself if there is value to be had. A couple of hours of your time visiting your money won’t hurt. They will attempt to do a retirement plan which will require data gathering. If you have substantial assets outside of TIAA-CREF they will eventually try to bring them over. If you feel there is value then there is no problem. But, make sure you will be putting yourself in a better position by doing so. Just know that they do not stack up that well in terms of offerings or performance based on what i have seen.

Good Luck and guard yourself.

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avatar Ex TIAA-CREF March 7, 2011 at 8:08 am

The top producing salespeople (Wealth Management Advisors) receive bonuses of $100,0000- $200,000 paid on the last day of February each year.

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avatar Dale March 7, 2011 at 10:44 am

Moderator — Please put a date on the comments, so that we know when and in what order they came in! This is a great website; please make it better and more credible with dates on submissions!

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avatar LHR74 March 7, 2011 at 11:58 am

I left the WMA position because I didn’t like the atmosphere- no hard feelings- just facts of the situation at that time. For all of your sake I hope things change for the better but it does not appear so. There could be a potential conflict of interest but I cannot say for sure. My personal experience with the “advice” being presented was that each and every time the portfolio recommendation was to consolidate funds to TIAA-CREF when it wasn’t necessarily in the client’s best interest. That created many issues for me and my director who wanted assets in at any cost. That was one of the major factors that caused me to leave that institution. Of course, this can also occur at other financial institutions but most of them have weathered that type of storm (conflict of interest) while TIAA-CREF seems be in the eye of that storm. The WMAs and their directors are under tremendous pressure to grow the asset base by bringing in new funds……unbiased advice is a distant second. To those participants who intend to retire and start receiving income I would suggest that they be wary of entering any form of irrevocable income option.

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avatar Current TIAA-CREF March 7, 2011 at 6:08 pm

Valid comments and it seems the culture has changed since you were as the goals for WMAs is no where near the $50 million level. I would say the big concern nowadays is the managed accounts, if clients consolidate to TC and just use the TC funds and annuity investments then where is the downside to clients? They have inexpensive investment options, they can be just as diversified within one company versus 3 – 4 companies and they are getting that classic financial advisor/client relationship at no additional cost. People seem to think consolidating assets into one company is a bad thing yet if you meet with Fidelity, Vanguard, Schwab, etc. they are trying to do the exact same thing and in my opinion having all your assets with one company is fine as long as you have a strong, financially stable company to work with, wouldn’t you agree?
It also seems that the work load that WMAs were strapped with in the past has been alliviated, WMAs have Associate Wealth Managers and Client Relationship specialists that help with the service and maintance of their client base.

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avatar Former WMA March 10, 2011 at 10:21 am

Well at least now you can devote most of your time to selling Managed Accounts.

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avatar Whatev March 11, 2011 at 11:46 pm

Were you conflicted when receiving your bonus?

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avatar ex WMA March 12, 2011 at 11:14 am

Yes, I was “conflicted”. That is why I resigned. I find it hard to work for an unethical organization. Don’t you?

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avatar m. plesset March 7, 2011 at 6:44 pm

“Current TIAA-CREF” asks what’s wrong with their trying to attract client’s other assets. Here’s the worst thing about it, just limiting to TIAA – the miserable performance of the annuities. For an example I took the amount of my accumulation and got quotes from 11 highly rated insurance companies for the same terms (ten year, single life). All 11 had higher payouts than TIAA. Worse yet, the payouts from those companies are guaranteed amounts, where from TIAA only a part is guaranteed. In fairness, TIAA’s payments can go up as well as down, although not necessarily related to the cost of living or inflation rate.

TIAA justifies the lower payouts by a different mortality for their population. There may well be some difference, but the expected longevity for age 74 in the standard U.S. table is about 10.8 years, but 17.1 years in TIAA’s. A difference of 2 years in a mortality table is large, a difference of over 6 years strains credibility.

TIAA gives the strong impression that it’s an altruistic organization, being non-profit, versus those other greedy profit making companies. First, part of the advantage of a non-profit is usually being tax exempt, but TIAA-CREF lost its tax exempt status in 1997. Second, for profit companies have the discipline of being accountable to shareholders, and therefore need to offer competitive products and have some control over costs. As a not for profit with a somewhat captive customer base, and with an evidently passive board, TIAA isn’t really accountable to anybody. Incidentally, one way they’re not different from other companies is that TIAA too has reported significant losses on mortgage backed securities, causing its credit rating to be lowered.

The real negligence is not only at TIAA, but at all the institutions that don’t do their homework on the alternatives, and choose this product by default for their employees.

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avatar Ex client March 7, 2011 at 11:15 pm

great points! Most institutions are stuck with TIAA through long term contracts that are very difficult to break. Their only alternative is add another carrier such as Vanguard, which is a far superior choice.

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avatar Current TIAA-CREF March 7, 2011 at 9:17 pm

i found this message board by typing in “TIAA-CREF complaints” as a google search so i don’t expect a lot of positive experiences voiced on this site. TIAA-CREF has over 3 million participants and thousands upon thousands of conversations with clients each week and there will be miss information given out especially on the MDO rollover to an IRA referenced above, which is really really really bad information and it’s too bad that i couldn’t just put my contact info on this site so people could call and get more accurate information but i don’t think there would be enough hours in the day to take all the calls. If you called into our organization and were given wrong information we would have a record of that and could pull the tape of the conversation and would potentially reverse the transaction so that it shows up as a 2010 distribution and reportable in that year as income. It’s an option but don’t know if it would work.

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avatar Jonathan March 8, 2011 at 11:24 am

3/8/11 1100R
Hey Current TIAA-CREF,
I have a record of the “wrong information”. I HAVE THE RECORD, THE DOCUMENTS, DON’T NEED YOUR RECORDED TELEPHONE CONVERSATIONS. I have two letters from two different T/C employees.
I asked them to reverse the “incorrect” transactions and they stated that the transactions (rolling over RMD monies into an IRA) were allowed pursuant to “TIAA-CREFs interpretation of the tax law.” Their interpretation was that distribution monies from 401A and 403Bs, are not broken down by the IRS into an RMD portion and a distribution portion – so T/C took the distribution monies according to their “interpretation”, considered the monies NOT RMD monies, and rolled them over.
One problem – the IRS regulations clearly state that all distribution monies in a “distribution calendar year” are RMD monies until the RMD requirement has been met.
So, T/C employees (1) violated IRS regulations and did the rollovers, (2) two other T/C employees
had no knowledge of these IRS regulations and (3) a third employee had to refer the issue to T/C tax compliance unit because he had no knowledge. And what do I have after three months? Five 1099-Rs that do not meet IRS requirements.

All TIAA-CREF people out there, here is a simple RMD issue you will all have to deal with during your retirement. If T/C can not deal with this simple tax code requirement, can they manage your money? I think it’s time to do something about this once and for all. Contact me at my email address.

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avatar bart mccollough March 7, 2011 at 11:44 pm

You must be kidding, ever try to get in touch with the person handling your account…You will never reach that person just a representative who doesn’t know anything but will relay the message. Don;t worry when they don’t call back it’s SOP. i REALLY WISH I NEVER INVESTED ANYTHING WITH TC. Can’t get my money out..they keep changing the rules about you can take it out and again you cann;t talk to the person handling your account…being retired is not easy. This company sucks big time..

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avatar Ex client March 8, 2011 at 10:09 am

In this day and age it’s hard to believe that an antiquated organization like TIAA-CREF still exists. The retirement annuity system that they created 90 years ago is outdated. Nobody can understand their rules. What good reason would anybody have to still invest in this anachronism?

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avatar Dale March 8, 2011 at 10:30 am

Exactly. The reasons seem to be ignorance and lack of individual initiative in finding alternatives. Too many people going along with the herd that went before — over the cliff! But it seems that many will pay for it later.

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avatar Jonathan March 8, 2011 at 11:30 am

Bart,

If I add up all the time I spent on the phone with T/C it would translate into DAYS not hours.

AND NOT ONE OF THE PEOPLE I TALKED TO HAD THE PROPER TRAINING TO UNDERSTAND MY ISSUE.

Is this just simply poor training or is it deliberate?

Time for all of us to change the rules not just T/C, change the rules of engagement with T/C.

Email me.

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avatar Retiree March 8, 2011 at 10:30 am

I am retiring this year, my employer has both TIAA-CREF and Fidelity so i decided to talk to both organizations. Fidelity said i had to go to their retail branch where they tried to sell me an annuity…….I then talked to TIAA-CREF and although they did not try and push taking an annuity with them they did make a strong push to consolidate all my assets with them. It seems no matter who i go with there is a little evil in both.

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avatar Jonathan March 8, 2011 at 11:40 am

3/8/11 1131R
Retiree,

Fidelity tried to sell you an annuity. T/C tried to get the rest of your money before selling you anything. I’ll ask you, who do you think is the real evil one? But let’s not call either of them evil. They are just doing business by trying to get your money. Is an annuity the best retirement investment? I do know that financial institutions, insurance companies, make a lot of money by selling annuities. They may be good for the insurance company but not good for you and your retirement.

Perhaps you should consult with a “financial advisor” at a well known investment company such as Morgan Stanley – it’s only a telephone call.

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avatar TIAA March 8, 2011 at 4:42 pm

TIAA-CREF’s consultants and advisors will sell you an annuity without the heavy built-in sales commissions. All employees are compensated with a base salary plus bonus.

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avatar Retiree March 8, 2011 at 11:47 am

Morgan Stanley!!!!! They needed a bailout to stay in business.

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avatar Jonathan March 8, 2011 at 12:25 pm

Retiree,

TIAA-CREF and Fidelity also needed help from the government to stay in business – our government needs help from China in the form of loans, a bailout, to stay in business. Morgan Stanley fully and expeditiously paid back their loans. The US government consulted with Morgan Stanley about the credit crisis. They are now a strong bank and even if they did fail, the failure would have no effect on your investments held by them.

But we’re not talking about the strength of Morgan Stanley, TIAA-CREF, or Fidelity, we’re talking about the investment advice you would receive from each. Fidelity and T/C would gather all your money and place it in an annuity. This is not a comprehensive retirement plan.

Advice is hard to find, finding a good investment advisor is what you need to do first, not find a salesman who wants to sell you an annuity. Look around, find a good advisor first. In my opinion and from my experience, you will not find good advice at T/C. And Fidelity is like going to Wal-Mart.

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avatar WMA March 8, 2011 at 3:15 pm

I beg to differ. TIAA-CREF Wealth Management Advisors provide objective financial advice. We are paid a base salary. There are no commissions for selling products. Bonuses are based strictly on customer service and financial results. We are not trying to “gather all your money and place it in an annuity”. TIAA-CREF is a not-for-profit firm that provides a wide variety of investment options including Brokerage, Managed Accounts, Mutual Funds, and Life Insurance. If you have a Retirement Annuity with TIAA-CREF valued at $500,000+ you can have a Wealth Management Advisor assigned to you in one of 60 offices nationwide. Many of the Advisors are Certified Financial Planners. We’ll even provide a free consultation with an Estate Planning Attorney if you have Trust or tax issues. There is no cost for these services. Can Vanguard, Fidelity, or Morgan Stanley offer this level of service for free? I think not.

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avatar Whatev March 11, 2011 at 11:54 pm

Now you are simply lying!! TIAA-CREF neither asked for nor received TARP funds!

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avatar Jonathan March 12, 2011 at 1:04 pm

3/12/11

Whatev,

You state; “Rather than listening to “nightmarish stories”, ask yourself how your investments have done for you. Have they grown at an acceptable rate (other than the last couple years of course)? I suggest you call TIAA-CREF, they have wonderful representatives who are happy to answer your questions and address any concerns you may have. Judge for yourself.”

My investments have diminished and T/C is taking funds from my “grandfathered” monies each month and paying me with them – if they are paying me with principal, then their stated yield is not correct, is it?

They do not have wonderful representatives who are happy to answer my questions. Their representatives are either poorly trained and provide incorrect information or they are trained in such a way that they provide information that they have been given by T/C that they believe is correct but is in reality not correct. To all the T/C “clients” out there, how many have heard these words: “We don’t provide tax advice.” OR “This is TIAA-CREFs interpretation of the IRS regulations.” These are the responses that you get when you question their information.

Check your statements – mine don’t make any sense, the numbers don’t add up. The statements do not provide you with the necessary figures to keep track of your monies. For example, my statements do not break out each account balance, they are “lumped” together. The “grandfathered” monies do not appear in any statements so I can not keep track of the balances each year. 1099-Rs aggregate accounts – if so, how do you know if the RMD has been satisfied.

T/C tells you that you need to open an MDO account if you want to receive your annual RMD amounts. But US Treasury regulations require that all contracts allow for complying with RMD requirements.

So, T/C representatives, and I have the correspondence to prove it, have not answered my questions and addressed my concerns, they have provided me with false information, by design, unwittingly, because of stupidity? I do not know, but I do know that the information they provide is misleading and in many cases false and misleading. I don’t trust them with my money, would you?

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avatar Ex client March 8, 2011 at 3:31 pm

How come TIAA-CREF needed a bailout? I thought they were in ok financial condition.

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avatar m. plesset March 8, 2011 at 3:43 pm

Since WMA says they provide objective financial advice, I assume that would include steering people away from the TIAA annuity product, which has performance way below the rest of the industry, as I documented a few posts back.

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avatar WMA March 8, 2011 at 4:36 pm

We provide objective financial advice, but we are not in the business of “steering” our clients away from our products and services. Are you?

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avatar Jonathan March 8, 2011 at 7:42 pm

3/8/11 1930R

WMA,
“Objective Financial Advice”? Why is it that the only retirement “investments” my wife has with T/C are six annuities? She doesn’t know anything about investing! The annuity idea came from your people not from her. Where are the municipal bonds in her retirement portfolio? Where are the preferred stocks, corp bonds, index funds?

And then to add insult to injury, she’s locked in at about 3% for ever and if she wants to remove monies from T/C she can only do so by taking out 10% each year. I don’t know what you at T/C call this: “Deceptive practices that result in financial or other losses for consumers in the course of seemingly legitimate business transactions.” This is the definition of consumer fraud.

I have never heard of an investment company taking an individuals money, keeping his money against his will, and paying a 3% return for ever – 3%, you tell me what 3% is – it’s nothing – a person can not live on 3% return.

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avatar Current TIAA-CREF March 8, 2011 at 3:55 pm

TIAA-CREF did not need a bail out, i don’t know what Jonathan is talking about. We actually divested ourselves from a lot of sub prime exposure right when other financial institutions, like Morgan Stanley, were leveraging to the tilt.

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avatar m. plesset March 8, 2011 at 5:39 pm

WMA’s comment on TIAA/CREF’s “objective financial advice” demonstrates a basic point. The company is selling often inferior products, and if it’s in the customer’s best interest to get their funds out, or continue to keep them elsewhere, the “objective advice” isn’t going to tell them that. There’s nothing evil at all about sales or sales people, but it’s somewhat disingenuous to say they’re giving objective financial advice. Of course it’s the client’s fault if they don’t distinguish between independent financial advisers and sales reps from this or any company, but I think the very altruistic image that TIAA/CREF has strongly projected over the years has caused many people to forget that.

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avatar Jonathan March 8, 2011 at 7:44 pm

Deceptive practices that result in financial or other losses for consumers in the course of seemingly legitimate business transactions. Does this sound like TIAA-CREF?

This is the definition of consumer fraud.

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avatar LHR74 March 8, 2011 at 5:47 pm

Advice & financial results? For who? “WMA”, you are trying to tell the people here that (1) you do not have an annual sales goal and (2) that does not determine the level of your bonus? So you could provide sound advice and if the overall performance of your client’s assets were reasonable you would receive a bonus if you didn’t bring in any assets to the company……..Now I beg to differ.
For those of us who haven’t joined the TIAA-CREF kool-aid drinking party you can see some are not even humble enough to admit that the level of service has dropped substantially and layoffs a few years ago cleared out a huge amount of bright people. Assuming the current T/C employees posting here have been employed there long enough, let them not forget how some of their former colleagues were treated merely 6 years ago. Many people agreed to relocate from NYC to Charlotte selling their homes and relocating their families only to be layed-off three months later. Most of those people were long-time employees dedicated to T/C who forgot more than some of the current employess know. Beware “Current TIAA-CREF”, “WMA”, and others. Your time will come and we”ll see if you ontinue to tow the blind company line then.
P.S. A major part of great service is giving correct information to clients andadmitting when you’re wrong. Try it sometime.

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avatar TIAA participant March 8, 2011 at 7:01 pm

It certainly sounds as if there is a good deal of emotion being displayed with these postings. Can someone please clarify some questions I have regarding the consultative process that TIAA-CREF offers? First, there is an Individual Consultant that visits our campus annually. Is this individual here to provide me with advice regarding my Retirement Annuity or are they trying to sell TIAA-CREF funds? I know that when Fidelity sets up a meeting their intention is to try to get me to invest in their funds. Is that TIAA-CREF’s intention also? Secondly, I’ve received several letters from the Wealth Management Group wanting to set up a meeting to discuss my retirement goals. Is this meeting to provide us with advice or are the Advisors going to try to sell me something?

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avatar Jonathan March 8, 2011 at 8:14 pm

Read everything posted at this site – T/Cs intention is to get all your money and lock it up for ever. An annuity is a “product” sold by an insurance company, and they make a lot of money doing this – obviously they are not looking out for you. An example of a PRODUCT is a mortgage backed security, a derivative. I don’t invest in products, I invest in equities, bonds, things that are REAL.

Go to a major financial institution and consult with a financial advisor – establish a relationship with this advisor – he will look out for you.

T/C is looking out for T/C. My wife never really understood what they were doing with her retirement funds – I was too busy with my day to day activities to listen to her or pay any attention to what they were telling her and what they convinced her to do with her funds – now it’s too late.

Within the past three months she has been on line, on the telephone, and writing to T/C. She was constantly complaining to me about her terrible experiences with T/C. I had no choice – I had to get involved and I began to educate myself about T/C and what they had done with my wife’s monies and my conclusion: “Deceptive practices that result in financial or other losses for consumers in the course of seemingly legitimate business transactions”

This may not be entirely true but this is my opinion and how I feel; And I have started looking into T/Cs business practices – I will probably file a complaint with the IRS if the information I get back justifies it.

Go to a real bank and open up an investment account – I have my monies with Morgan Stanley and my financial advisor there looks out for ME! Did anyone ever explain municipal bonds to you? You can have a ladder of munis yielding over 5% tax free. With a ladder properly set up, you will always have bonds coming due, you then take those monies and buy new bonds so that you can keep up with the changing interest rate environment. Give your money to T/C and like my wife, you may have your money locked up for ever at 3% – THIS IS WHAT THEY DID TO MY WIFE. What do you call this kind of business practice?

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avatar Current TIAA-CREF March 8, 2011 at 10:54 pm

What a guy…….doesn’t pay any attention to his wife or her financial situation yet will spend so much time on a message board giving advice to complete strangers! “Ladder of munis” COME ON!!!!!

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avatar Jonathan March 9, 2011 at 7:23 pm

3/9/11 1917R

Hey Current T/C,

Are you being paid by T/C to respond on this message board?
After my wife’s experience with T/C, I feel as if it’s my duty to warn other T/C “clients” about how T/C does business. I want to share my outrage.

Tell me why a ladder of municipal bonds is not a good investment choice.

avatar retired prof March 9, 2011 at 8:00 pm

I wouldn’t touch munis with a 10-foot pole given the good chance that a number of them will end up having to default.

avatar Current TIAA-CREF March 9, 2011 at 12:11 am

You talk about “Deceptive practices that result in financial or other losses for consumers in the course of seemingly legitimate business transactions” and then go onto talk about Morgan Stanley!!!!!! They were one step away from being extinct for deceptive and unethical business practices and not for the enrichment of YOU but for the enrichment of themselves………

Oh Yeah what everyone needs is muni bonds, preferred stocks and REITs…………you and Morgan are a match made in heaven, I wonder how many complaints Morgan Stanley gets a year? Oh wait they took tax payer money to survive but that’s okay because they paid it back quickly so according to you that is just fine.

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avatar Current TIAA-CREF March 9, 2011 at 9:58 pm

Well………the first point is that we are talking about retirement accounts so how do muni’s benefit someone who has either an IRA, 403(B) or 401(K)????? Your TC accounts, your wife’s TC accounts and all these posters have RETIREMENT accounts so tax free income generated within these accounts is of ZERO advantage. That is financial planning 101, if you have muni’s inside of an IRA it’s kind of a joke………..

avatar Susan Dodge March 8, 2011 at 7:03 pm

A rep from T/C phoned me today to inquire as to why I pulled my money out of there last week.

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avatar LHR74 March 8, 2011 at 7:35 pm

You will receive both advice and a sales pitch……….The individual consultants and WMAs do indeed provide advice regarding the investment options, asset allocation, income options, etc. A proper portfolio review does indeed take into account your entire investment pool (TIAA-CREF and any other investments outside of TIAA-CREF). Once outside assets are disclosed as part of the portfolio review then the sales pitch starts to get the client to consolidate or rollover those funds into a TIAA-CREF account. This is the standard operating procedure but is certainly not unique to TIAA-CREF.

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avatar TIAA participant March 8, 2011 at 8:17 pm

This may be standard operating procedure in the financial industry. However, I wouldn’t expect this approach from TIAA-CREF. As an altruistic, not-for-profit organization it’s unacceptable to target the participants for sales opportunities under the guise of financial planning. Am I reading this situation correctly?

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avatar Ex-T/C March 9, 2011 at 7:11 pm

TIAA participant, you are reading it exactly as it is. I would not describe TIAA-CREF as “altruistic” anymore. It is now a sales organization, just like all the others. Institutions and Plan Participants (although they are now strictly referred to as “clients”) are separated into categories based on the level of revenue their business provides to the firm. So, big schools and hospitals get personal attention and smaller institutions get the website for all their needs. High-net-worth ($500k+) clients get Wealth Management Advisors and small clients get 1-800-HAPPYTALK. And EVERYONE is targeted for sales opportunities. The T/C you are describing is long gone…

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avatar EX T/C March 19, 2011 at 2:26 pm

Yes you are.

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avatar TIAA participant March 20, 2011 at 3:54 pm

And where is the accountability?

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avatar EX T/C March 21, 2011 at 3:50 am

That is the million dollar question. Most of the senior management team responsible for building the ‘wealth management’ model are no longer with TIAA-CREF or their responsibilities have changed. As of a year ago, those still involved were in a race to try and get the division to pay for itself by this year. I can’t say if they are succeeding. However, I am sure that some expensive parts of the infrastructure were eliminated to help make ends meet. Some people I knew that were in support or background positions are no longer there. There positions were eliminated. Another example is that there used to be 3 district managers covering my old region. now there is only one. Maybe that is your answer. Those that are no longer there have been held accountable for an unworkable business model.

avatar ex WMA March 23, 2011 at 10:09 am

The Wealth Management Group at TIAA-CREF couldn’t care less about the participants. Their main interest is hitting their metrics and getting an annual bonus.

avatar pissed off March 8, 2011 at 7:43 pm

try and get your money from TC, I tried five times…even had an investment firm from Hawaii try. They promised me they would get the money from TC..they also failed and due to frustration they apologized and said it was ridiculous,,,,and it is..Be forewarned start trying to get your money well before you need it. Every time I tried they added another stipulation to the process…

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avatar Retiree March 9, 2011 at 12:59 am

would that happen to be chinen and arinaga?

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avatar WMA March 8, 2011 at 8:47 pm

We don’t have “sales goals” at TIAA-CREF. Wealth Management Advisors have a set of performance metrics that includes Asset Growth. Bonuses are based on a variety of factors and are subjective. The base salary ranges from $100k-$125k and the bonuses from $10k-$200k. Does that answer your question?

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avatar LHR74 March 8, 2011 at 9:15 pm

Evasive at best. So there is no annual new asset growth goal for the WMAs? I was a WMA (one of the first cadre in NYC) so just own up to the clients out there. Asset growth may be one of the so-called performance metrics but it is the primary performance metric. Obviously service, asset retention, etc. are factored in but you are there (for now) to bring in assets plain and simple. What will happen if you do not bring in additional assets of a certain amount or range within the calendar year? You will be shown the door and you know it.

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avatar BH March 8, 2011 at 9:23 pm

Does anyone know when this bonus system was created (in its present form)? Believe there was some form in Biggs time, but was it expanded by Allison?

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avatar WMA March 9, 2011 at 12:15 am

Herb Allison started the Wealth Management Group. That’s when the bonuses really kicked into gear. Herb came from Merrill Lynch and wanted to make sure that TIAA-CREF could attract,retain,and motivate the top performers.

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avatar BH March 9, 2011 at 2:15 am

One of the WMAa that I talked with came from Merrill Lynch. Did Herb attract most of the experienced WMAs from outside companies such as Merrill? How does the base salary of $100K to $125K of WMAs compare with that of a typical phone rep with whom most participants interact?

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avatar Former WMA March 9, 2011 at 11:21 am

Herb Allison started the Wealth Management Group when he left Merrill Lynch to become CEO of TIAA-CREF. He was recruited to T-C to kick start growth at a sleepy old company in a state of decline. Herb radically changed the corporate culture from kumbaya to dog-eat-dog. This created a sales driven environment where employees are rewarded for generating revenue. Naturally, customer service becomes a secondary objective.

The Wealth Management Advisors were primarily recruited from large Brokerage firms such as Merrill Lynch and Morgan Stanley. Most were either washouts or young aggressive guys working on straight commission. The opportunity to work for a base salary and bonus package in the $150k range is a dream come true for these individuals. Once they arrived at TIAA-CREF the reality hit home. The pressure to generate new business is even more so than at their former Stockbroker jobs. Those “Advisors” that can can coerce their assigned customers into transferring all of their money to TIAA-CREF receive enormous bonuses. The WMA’s who can’t produce are fired.

To answer your question regarding the compensation of the Wealth Management Advisor versus the telephone rep, the person you are speaking to on the phone earns about $30k/year. The average Wealth Management Advisor earns $150k.

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avatar BH March 10, 2011 at 12:33 am

Although many of the service issues can be attributed to the new IT system, how much of it can be attributed to the inexperience of many of the phone reps? Does anyone have an estimate of how many WMAs there are and how many phone reps?

avatar BH March 8, 2011 at 11:13 pm

There appears to be some concerns that investments in Traditional Accounts are only receiving returns of 3%. The 3% figure is the guaranteed minimum return, and your restricted RA Traditional Accounts are probably returning above 4%. Traditional accounts operate on what is called a “vintage system” (explained on TIAA website) where the returns on your funds depend upon when they were contributed. For example, funds you contributed in 2008 are returning above 4.5%, and some of those are returning 5.0%.

These vintage rates are adjusted every March 1 and believe there was some slight upwards adjustments this year. A call to your WMA can get you the amounts that you have in each vintage and your overall return. If you don’t have a WMA, perhaps a phone rep. can get this information for you.

For many this makes an investment in the Traditional Account a more attractive fixed income investment than most bond funds. No risk of loss of capital that a bond fund has (especially in the present bond environment), a guaranteed return of 3%, and possible increases in returns each year. Of course if you want higher returns, with more risk, there always are equities.

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avatar Michael Moriarity March 9, 2011 at 12:11 am

You can buy a 10 year US Treasury at 3.6%. This compares favorably to TIAA ,with much greater safety and similar liquidity. TIAA Traditional is not as great a deal as TIAA tells everyone. The investments within the general account are very suspect. You can only remove your principal over a 10 year period even if the investments go bad and TIAA can’t back it up. This type of investment should be illegal in a Retirement Plan.

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avatar Current TIAA-CREF March 9, 2011 at 12:44 am

You all just don’t get it………..you take a 10 year investment at 3.6% and what happens when interest rates increase and you are locked in at that 3.6% bond. Sure you can sell it but guess what you will have to sell it at a loss. You are looking at Traditional and in a liquid account, meaning the SRA or GSRA, where you can move money in and out of Traditional has a 10 year rate of return of 5.14% and the restricted Traditional has a return of 5.75%. In the last 10 years no one has forced people to invest in Traditional, if you don’t want it don’t invest in it……..pretty darn simple. TIAA has been managing money for 90+ years and has never had any problems with it’s investments and we continue to receive the highest possible ratings,through the great depression, through the crash of ’87 and through the worst financial meltdown in history in 2008! TIAA-CREF might not be right for everyone but the one thing you don’t have to worry about is waking up in the morning and TIAA-CREF not being in business.

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avatar m. plesset March 8, 2011 at 11:45 pm

Regarding BH’s post, as I posted a little earlier, for a given amount, a TIAA annuity pays out less than annuities with the same terms from all eleven highly rated insurance companies that I looked at, and the payouts from those are all guaranteed amounts. My post a couple of days ago gives details.

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avatar WMA March 9, 2011 at 12:00 am

I agree with you regarding the pressure to acquire new assets for TIAA-CREF. Your statement about being shown the door if I don’t “bring in additional assets” is conjecture on your part. I’ve never known a Wealth Management Advisor to lose their job if they don’t bring in a high level of new assets. It also depends on the type of assets that are transferred to TIAA-CREF. For example, if a WMA brings in high fee Managed Accounts, as opposed to free Brokerage account, he is rewarded to a greater degree.

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avatar Ex client March 9, 2011 at 12:55 am

So isn’t there a slight conflict of interest when the “Advisor” receives a bigger bonus for placing clients in Managed Accounts versus Brokerage accounts? Is this ever disclosed to the client before they transfer their accounts from their Broker?

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avatar Ex-T/C March 9, 2011 at 7:44 pm

Yes, there is a conflict of interest since your T/C “advisor” will always “advise” you to put your money into the product that produces the most revenue for TIAA-CREF. And he/she won’t disclose this to you since there is no direct link between the sale of a specific product and a specific level of compensation paid for that sale. It is all made purposely blurry so the company can continue to claim “objectivity”. Yes, it is objective to the extent that no direct commissions are paid. However, there is no question that advisors are incentivized, via metric scoring, to convince you buy their more expensive products.

And as far as the claim that WMAs don’t get fired for poor sales performance, I can tell you as a former manager at T/C, who was closely involved in several terminations of WMAs, it happens. It may get dressed up in a performance improvement plan that focuses on a myriad of stats and metrics, but behind the scenes there is only one stat that matters.

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avatar Ex March 9, 2011 at 1:00 am

This is a great website. Are there any others with similar discussions?

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avatar LHR74 March 9, 2011 at 8:19 pm

Thank you, Ex-T/C….As a former WMA I witnessed such terminations (escorted out of the building) and all along the ONLY statistics spoken of were weekly, monthly, quarterly, annual asset growth per WMA. In a distant 2nd place were the number of so-called portfolio reviews which were used to uncover the outside assets of the clients and recommend consolidating with TIAA-CREF. These go hand in hand. Providing the portfolio review opens the door to the sales pitch at the time the portfolio review is delivered to the client.

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avatar Current T-C participant March 9, 2011 at 10:08 pm

I am astounded to read these comments. Are we talking about the same TIAA-CREF that I have invested with for 30 years? I checked out this website when I recently ran into some service issues with T-C. I didn’t expect to see this degree of anger towards a company I always believed to be honest. Are there any attorneys reading these posts that can give a legal opinion about the alleged wrongdoings at TIAA-CREF?

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avatar ex WMA March 11, 2011 at 11:20 am

Working for TIAA-CREF was the single biggest nightmare I’ve ever experienced. Thanks for bringing this dirty little secret to light.

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avatar Marcella McClure March 11, 2011 at 12:04 am

I know that many academics have not paid attention to their employer mandated retirement funds with TIAA/CREF, but everyone should be concerned. This is NOT the TIAA/CREF of 25 years ago. I learned the hard way about six years when I managed to get most of my funds transferred to Vanguard. Very good company. Everyone should be alarmed by the lack of client satisfaction with this company that we are forced to use. I have written to my state’s benefits manager requesting that we be allowed other options and have provided them with this blog site. I have also told our Faculty Senate, Union reps and all the staff. They are horrified as several were just convinced to consolidate all their holdings with TIAA/CREF. This was never a good investment strategy as I have learned. Nothing seems to improved with TIAA/CREF, so I have requested TPA documents to start getting my money out of TIAA traditional annuity. The person on this site who suggested that one start this process 10yrs before retiring is right. My email correspondence has been positive and I have a name and extension for direct contact should there be any complications in initiating this process. I will keep you all posted.

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avatar Former t/c client March 11, 2011 at 12:12 am

I’m glad to see more participants stepping up to the plate and ditching TIAA-CREF. Protesting their incompetence is the only way for them to get the message.

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avatar John Mac March 11, 2011 at 8:16 am

I was skeptical when I first started reading these comments. But there are just too many negative posts to ignore. Marcella, I applaud your initiative. Is anyone else taking this type of action against TIAA-CREF?

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avatar James Smart March 12, 2011 at 1:36 pm

Anybody who does the slightest bit of research on TIAA-CREF realizes that they are horrible to work for and the worst organization to invest your money.

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avatar independentobjective March 12, 2011 at 2:22 pm

A plan sponsor (employer who establishes the plan in which you participate) has a fiduciary duty to select and monitor plan investment providers and investments. Many plan sponsors have erroneously been under an impression that TIAA-CREF is a fiduciary. TIAA-CREF is not a fiduciary to the plan in which you participate.

An impression that TIAA-CREF or its representatives accept a fiduciary role to the plan participants — while perhaps easily formed when marketing materials refer to “advisers” and position their services as if a plan benefit — is also erroneous. A TIAA-CREF WMA has no more obligation to a plan participant than to any person off the street, so to speak.

ERISA, or state law for plans not subject to ERISA, furnishes safeguards for plan participants and penalties for plan sponsors who do not meet their fiduciary responsibility. Bottom line: if you have concerns about a retirement plan service or product provider, in addition to complaining to that provider you can/should complain to the plan sponsor.

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avatar Ron March 12, 2011 at 2:31 pm

Independentobjective:

In plain English please for the rest of us dummies, what are you trying to say? Is TIAA-CREF being deceptive or is this a case of buyer beware?

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avatar Jonathan March 12, 2011 at 2:55 pm

3/12/11

What is ERISA?
Who in New York, furnishes safeguards for plan participants?

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avatar ex T/C March 14, 2011 at 12:50 pm

Call the NY State Insurance Department

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avatar independentobjective March 21, 2011 at 12:20 pm

Generally, the Insurance department would be a good resource if you have a problem with TIAA-CREF’s interpretation or sales of its annuity contracts. That is because TIAA-CREF must file their contracts and the insurance department must approve and supervise the contracts. However, relatively few of the postings on this string have to do with contract terms.

Most of the postings appear to deal with non-contractual difficulties. Examples of non-contractual components include: toll-free telephone service; sales of non-insurance products like brokerage or managed accounts; swift turnaround on requests; offering an adequate range of investment alternatives, or; interpreting laws and regulations. Here is the dynamic: to use these contracts as funding vehicles for a retirement plan “somebody” must make up the difference between a limited set of promises at the contract level and the reasonable demands of defined contribution plans (and their participants) in 2011. When all is said and done, that “somebody” is your plan fiduciary. TIAA-CREF is not your plan fiduciary. You plan fiduciary is set out in a written plan document to which you have access (see your business or HR office) under ERISA (or state law if your plan is not subject to ERISA).

Without more knowledge, your plan fiduciary may assume that TIAA-CREF by itself is doing an adequate job of understanding the plan and participant needs and making up the differences between what TIAA-CREF is contractually obliged to provide and those needs. On the other hand, left to itself, TIAA-CREF will focus on areas where it believes its financials will most benefit (and ignore or allocate minimal resources to less gainful pursuits). Your constructive input to the plan fiduciary should help reveal gaps between the contracual promises and the needs of today’s plan participant. Once the fiduciary is aware of a gap, they have a responsibility to take action — for example, ensure that TIAA-CREF fills those gaps or introduce alternative resources that will address reasonable plan and participant needs.

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avatar TIAA participant March 21, 2011 at 12:43 pm

If I’m understanding you correctly, the 403b participant who thinks that TIAA-CREF has their best interests in mind is sadly mistaken. In other words, we trust TIAA-CREF to be our consultant/advisor on our retirement accounts. Can they be trusted to advise a participant objectively or are they primarily interested in their own “financials” ? If they are leading our institutions and participants to believe that there is a fiduciary relationship, isn’t that a conflict of interest? Please comment. You seem to have a very good understanding of these type of relationships. Do the regulators?

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avatar independentobjective March 21, 2011 at 2:35 pm

Yes, there is a difference between a “fiduciary” (trusted) relationship — where your needs come first — and a lower standard that vendors/providers like TIAA-CREF must satisfy to make products available in the marketplace. It may not be immediately obvious, but close examination of vendors’ choice of words should lead one to conclude that they are not fiduciaries to the plan or participant.

A number of years ago, regulators grew concerned at the number of 403(b) plan sponsors not functioning as fiduciaries but relying unduly upon vendor(s). There is some history and technicality involved. Both the IRS and Department of Labor released new regulations which make clearer than ever that 403(b) plan sponsors have essentially the same responsibilites as do sponsors of other types of employer-sponsored retirement plans, such as 401(k).

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avatar independentobjective March 12, 2011 at 5:46 pm

ERISA is acronym for Employee Retirement Income Security Act of 1974. Contact the Human Resources or Business office of the employer(s) that sent money in your name to TIAA-CREF and ask who is the fiduciary. The fiduciary attaches to the plan, not to a geographic location. If there is no other fiduciary named, the governing board of the employer(s) will be the fiduciary. The fiduciary is obliged to act in the best interest of the plan and participants (not in the interest of plan provider or its representatives).

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avatar Ron March 12, 2011 at 7:39 pm

what do you mean by “in the best interests of the plan and participants”? Please clarify.

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avatar HR March 21, 2011 at 3:54 pm

If TIAA-CREF is providing “advice and planning’ are we liable as an employer in the event that they are not a fiduciary?

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avatar independentobjective March 21, 2011 at 5:36 pm

Be sure to ask TIAA-CREF to document the capacity in which they make available their “advice and planning” and their understanding of the effect this offering has on your fiduciary liability.

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avatar HR March 21, 2011 at 6:22 pm

They are not a fiduciary. The individual consulting service is available to all participants on campus. It is more educational than advisory. Wealth Management is provided to participants with $500k in TIAA-CREF contracts. My understanding is that WM is a financial advisory service. It costs us about 2bp annually.

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avatar independentobjective March 21, 2011 at 10:59 pm

As you describe it, and properly monitored, educational services campus-wide do not increase fidcuciary liability.

Exactly who are the parties to the advisory relationship, and how is an advisory fee paid, in your case? Does each person who makes use of the service voluntarily and revocably agree to services in ecxchange for a 2 bp deduction from his or her own plan account? That would be substantially different from the plan sponsor paying 2 bp directly to the provider from its operating budget, or the plan sponsor allowing a deduction of 2bp from all plan assets (especially when only people with more than 500K accumulations may access the service). As stated before, fiduciaries should be sure to assemble complete documentation from providers whether or not the provider is a fiduciary in an “advisory and planning” service. That documentation should include the provider’s understanding of the plan fiduciary’s role/liability . Absent clear understanding and documentation, yes, the plan fiduciary is exposed.

To make this post relevant to a wider audience, its point is: A plan participant not satisfied with the provider’s services may take the matter up with the plan fiduciary — not just with TIAA-CREF or an industry regulator. The plan fiduciary, as part of their responsibility to select and monitor, must take appropriate action in the interest of the plan and its participants.

avatar EX T/C March 22, 2011 at 1:08 am

you are correct. The wealth management advisor operates as an RIA and is a fiduciary. investment consultants do not work in that capacity. They are the individuals that visit campuses and enroll new clients and do reviews with existng clients.

avatar Law Prof March 13, 2011 at 1:24 am

All fiduciaries have potential liability for the actions of their co-fiduciaries. If a fiduciary knowinglyparticipates in another fiduciary’s breach of responsibility, conceals the breach,or does not act to correct it, both fiduciaries are liable. Therefore,a fiduciary should be aware of others who serve as fiduciaries to the same plan. Fiduciaries are also required to monitor he service provider. When monitoring the employer should followup on participant complaints.

Employers may decide to hire an investment adviser to offer investment advice tailored to individual participants. These advisers are fiduciaries and have a responsibility to the plan participants.

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avatar Prof March 16, 2011 at 8:28 pm

My colleagues informed me today that TIAA-CREF is heavily invested in risky real estate on a worldwide basis and has significant investments in the Japanese stock market. Can anyone comment on this? Does this put our retirement annuities at risk?

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avatar HR March 22, 2011 at 8:57 am

You bring up some really interesting points. If the Wealth Management Advisors are RIA’s, and therefore act as fiduciaries, they then share the responsibility with the Plan sponsor. If their recommendations to the participants are potentially unsuitable does this expose the employer to the liability? How can we make sure that the products and services that the provider sells the participants are in their best interests? We had several complaints following the market downturn from 2008-2010.

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avatar EX T/C March 22, 2011 at 8:30 pm

your first question is a good one. My advice is to pull in your institutions legal resources and get a written opinion. you are in their world now and need to get expert counsel regarding the extent of institutional liability if any. Don’t rely on this website if you need to get an answer.

as for your second question, you can’t make sure of ‘suitability’ unless you are in the room listening and have an understanding of what is being proposed. However, I need to clarify one thing. An RIA is held to a higher standard than suitability. They need to do what is in the best interests of their client. Suitability is a lower standard applied to a broker dealer relationship. The context is that given any transaction is it suitable given the client’s age, and or risk tolerance, and or time horizon, etc. The broker could still pull something off the shelf that is inferior, put some lipstick on it, and sell it. A fiduciary needs to take it to another level. They are not supposed to make any recommendations that put them or their firm first. I am not sure how a proprietary firm does that since thay can only sell their product. TIAA-CREF is a proprietary firm.
They do package independent sub advisors in their fee based instruments and they do have a trust dept. otherwise, it is all TIAA CREF stuff.

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avatar ex WMA March 22, 2011 at 10:45 pm

Great point.There’s clearly a conflict of interest here. A TIAA-CREF Investment Advisor Representative (IAR) can not be objective when he is only compensated to sell proprietary products. The Wealth Management Advisors are under tremendous pressure to sell TIAA-CREF products. This includes the mutual fund wrap product (‘independent subadvisors”) called Portfolio Advisor and the accounts managed by their Trust Company. These are pushed especially hard by the Advisors because of their high fees.
TIAA-CREF isn’t a Plan fiduciary so they aren’t held to those standards. But they are a Registered Investment Advisor, which requires them to disclose potential conflicts of interest to the client when their IAR’s are providing investment advice. Do they?

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avatar gilou March 21, 2011 at 12:24 am

My university offers me to go with Tiaa cref or Vanguard.. I am from France and i do not have a clue of which company to choose

thanks

Gilou

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avatar TIAA March 21, 2011 at 7:41 am

If you read these posts the answer becomes obvious.

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avatar gilou March 21, 2011 at 9:44 am

more than 500 posts sorry I can’t read all of that. However, i have noticed that most of you are very mad at Tiaa. But since I am not able to find more review about Vanguard, I prefer asking.

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avatar EX T/C March 22, 2011 at 1:12 am

Vanguard would be your best choice.

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avatar TIAA March 21, 2011 at 10:47 am

Vanguard is a far superior option in just about every comparison.

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avatar Ex TIAA-CREF March 21, 2011 at 7:01 pm

Caveat emptor re TIAA-CREF.

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avatar BH March 23, 2011 at 2:39 am

“The Wealth Management Advisors are under tremendous pressure to sell TIAA-CREF products. This includes the mutual fund wrap product (‘independent subadvisors”) called Portfolio Advisor and the accounts managed by their Trust Company.”

What exactly is Portfolio Advisor? Is it available to the typical participant? TIAA-CREF seems to have created a lot of programs and Subsidiaries that are geared for the general market. Is this one of them?

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avatar WMA March 23, 2011 at 8:54 pm

TIAA-CREF’s mutual fund wrap product for Wealth Management clients. $50k min. At $750k the Private Asset Management is recommended.

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avatar ex WMA March 23, 2011 at 9:48 am

The Wealth Management Advisors can now sell a portfolio of Mutual Funds or Exchange Traded Funds to their clients. TIAA-CREF has a deal with the fund groups. They are not offering the best funds, just the ones that will share the revenues with them. It’s stated minimum is $50k. Most clients invest $50k-$750k. A 1% Advisory Fee is tacked onto the expenses. At $750K they are pushed to the Trust Company sales rep, who then tries to sell them another assortment of managed accounts.

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avatar TIAA March 23, 2011 at 10:12 am

So this is just another way to push product?

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avatar Tom Dick and Harry March 25, 2011 at 1:27 pm

I have to laugh. Marv Adams just left the company on March 22. He was head of Technology and Operations. Now he is COO at Ameritrade. He stayed with TIAA for one year. Just enough to get his one year bonus. In the past Marv was with Fidelity, IBM, Banc One, Ford, Citi Bank, TIAA-CREF and now Ameritrade. Five companies in 5 years? How could Roger Fergusion hire President of TIAA hire a man who is so well traveled and has an obviously lack of dedication to the companies and people he works with.

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avatar ex T/C March 25, 2011 at 2:23 pm

The only reason Roger Ferguson was hired as CEO of TIAA-CREF is his connection with the Obama administration. T-C is now targeting the public pension market to peddle its Retirement Annuities. Ferguson’s buddies in D.C. will help pave the way for TIAA-CREF’s newest venture. As far as his management abilities, they’re fairly limited.

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avatar Jules March 26, 2011 at 7:29 am

I have plenty of thoughts about TIAA and none of them good. I’ve been trying to rollover my TIAA and filed paperwork on Feb. 11. It still hasn’t happened. I’ve been lied to over and over and have contacted an ERISA atty to find out what my options are. I will tell anyone who will listen to steer clear of this company. How in good conscience can a company have a SOP that is to lie to customers and mislead them send them is beyond me. If I conducted my business they way they do I’d be in jail or as least have my licenses revoked. Terrible, terrible company.

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avatar ex T/C March 26, 2011 at 12:11 pm

I agree with you Jules. An extraordinary number of participants, ex-participants, employees, and ex-employees feel the same way. What do you mean by SOP?

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avatar Jules March 26, 2011 at 2:25 pm

Standard operating procedure.

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avatar D. Addison April 1, 2011 at 4:33 am

What’s the problem? Was the form filled out improperly, or is the rollover transaction you requested not legally possible?

What lies did they tell you specifically, and how do they benefit from this (generally the purpose of a lie).

I did a contract exchange during the time to you mentioned. It took 2 weeks out of the 4 they initially said for it all to be taken care of. No problems.

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avatar emily horton April 12, 2011 at 5:26 pm

Since Feb. 11? of 2011? I’ve been trying to get my little pittance into a bank account since I retired three years ago. It’s not enough money to warrant an attorney. I’m stuck in paperwork hell.

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avatar rafael compte May 16, 2011 at 7:54 pm

I am a current contributor to my TIACREF account but I would like to end it
and take all moneys out, and would like to know if anyone knows how possible is it to prove lack of compliance with the IRS considering the use of previous statements and the fact the insitution never send me a corrected copy of the plan back in 2008.
As per IRS rules a plan needs to send an amended copy or they are liable and the liabiilty carries an 8K penalty per account not as a whole.

Please reply , if many of us responds we may find a possible class action

Sincerely

Rafael Compte

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avatar Donna Hoffberg June 3, 2011 at 12:26 pm

I am experiencing problem withT/C I sent death certificate of husband April22,2004 and thought all funds were transfered to me the beneficiary. For years I received mail no statements of t/c literature. I called each time still mail kept arriving addressed to deseased husband.Then one day a rep stated he had an IRA! I asked my credit union to write them requesting statements from the date of his death.to present time. It is a very small amount.Is it possible we can band with other discouraged T/C holders (clients) and begin a legal action to increase their response to our predictament. I am a 81 year old widow who is very upset about this company’s slow indifferent attitude..

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avatar Saliwt May 19, 2011 at 4:26 pm

After my employment was terminated at the end of a lengthy illness last year, I cashed in most assets to keep the household running. On 4/26/11 I called TIAA-CREF to close my small retirement account. I thought I was getting good service: paperwork was being sent to me right away and, as long as I returned it promptly, the funds would be direct deposited by May 16. On May 5, I received two packets: one was for an annuity the rep said I’d have to withdraw in five annual payments. I was confused, so I called for help. That day’s rep said I didn’t need that extra paperwork; he rolled the annuity into my money market while I was on hold. I overnighted the docs to TIAA-CREF. When there was no sign of the money on the 16th, I called and was told they were waiting for my former employer to approve the withdrawal. I told them my paperwork didn’t include a form like that. The rep said she’d notify processing that they needed to contact my ex-employer using SOP. The form was e-mailed to the ex on May 16 or 17. On the 17th, the TIAA-CREF Customer Relations Manager said it would take another 2-3 days for his team and my bank to process — once authorization was received. I called again this morning and was told my ex-employer hadn’t responded. I called my former employer and was told “it takes time” and the authorization should be e-mailed sometime 5/20. My car’s starter went out yesterday — while I was paying cash for a dr.’s appt. because I don’t have insurance. I’ve lost my patience with these people!

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avatar Frustrated May 20, 2011 at 8:58 am

I feel your pain. Hang in there, good luck.

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avatar Frustrated May 28, 2011 at 11:38 pm

Can you please tell me what plan you have where you are supposed to receive your $ over 5 years. My husband is having a terrible time with T/C. Apparently, they don’t have funds where you can withdraw your $ at will. When he first retired he wanted to transfer his retirement to another company. At that time, he was told he didn’t have that type of account, instead he would have to take 20% annually over 5 yrs. When he tried to make his withdrawal, he was told he didn’t have the type of account to make cash withdrawals. So they sent paperwork for Transfer payout annuity. We completed the forms and the very next time we talked to a rep, they told we needed to switch it back to its original contract. So, we did and 7 years later, we needed to make a withdrawal (thinking we could take 20%) but we were told we couldn’t because the act wasn’t set up that way. We sent a letter to compliance and received a call from customer service. All their paperwork is very confusing and we’re trying to determine how to proceed further with our complaint at this point. Apparently, we’re not the only one who are getting the run-around. Every time they change your contract, it money in their pockets and we’ve never received anything close to the type of returns I’ve read in this blog. Make no mistake, we’re not idiots either. In my opinion, T/C does not have its customers’ best interest at heart. Does anyone know what my next steps are to take this further. I mean, really, you send a complaint to compliance and it gets intercepted by customer service and they assert them self as the person of authority – NOT!

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avatar Carol June 18, 2011 at 1:06 am

You are singing my song. Your story with TIAA-CREF pretty much echoes my own. This is starting to sound very unethical to me. I also find it ironic that my account has suffered an unprecedented loss since my request to withdraw my funds, was initiated. It’s been one thing after another as to the delay in disbursing my funds. Both myself and my previous employer have complied with every thing they’ve asked. Each time the rep, giving the impression that the check is on the way. That was almost two month ago, and I am on the border of a severe financial hardship, as a result of this constant run around. I am on the verge of speaking with an attorney regarding a class action suit, as there are far too many of us having this experience.

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avatar Donna Hoffberg May 26, 2011 at 11:18 am

I contacted TIAA Creff when I received numerous mailings( Fund Info) for deseased husband George. It was a reminder of the tragic death of a magnificent man. One day the rep said George had an IRA. Never had I received statements. My Enrolled agent did not wish to contact tiaa creff.I wrote a letter requesting statement and once again sent death certificate (april 22, 2004!)Is the next step a lawyer?

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avatar D. Addison April 1, 2011 at 4:27 am

After reading nothing but problems and cynicism, I have to mention uniformly good experiences with TIAA-CREF over 15 years. It bugs me to see how relentlessly and publicly negative some people can be, willing to taint everyone and everything in their obvious frustration.

Through plan changes, contract exchanges, many transactions … no problems. Fantastic presentations at our employer whenever some issue or change comes up, options and procedures and implications clearly and meticulously explained. The presentations flow as if they are reading my mind, answering questions shortly after they form.

Thorough and accurate answers to email questions and phone calls.

I make a point of studying the issues and their literature and web-site before contacting them, so as to use the same terminology. I believe this helps get good results. With all the complex situations that can arise, and the various legal/financial/contract constraints that come up, the more clearly you explain the problem in the proper terminology, the easier they can recognize the issue.

I can imagine times where if I called them and was hostile, short, rude, angry, frustrated, and ignorant of financial issues, things might have been “provoked” to go differently. Instead, I listen carefully, and be sure everything is clear and they have always done the same. A good joke as we kick back to sort it out also helps.

Reading this forum, it’s like a different organization is being discussed.

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avatar Robert Wolf April 1, 2011 at 4:17 pm

Thanks to D. Addison for his encouraging report of his interactions with TIAA-CREF recently and over the past 4 decades. Perhaps not the most exciting returns, but safe and steady with diverse investment options. Almost all limitations I encounter are due to my academic institution’s restrictions not TIAA_CREF.

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avatar Frustrated May 16, 2011 at 10:51 am

D. Allison,
You say “…willing to taint everyone and everything in their obvious frustration.” Does it occur to you that the frustration is due to valid reasons? For the past several weeks, I have been trying to rollover monies to a new IRA with TIAA-CREF. It has been VERY frustrating. The paperwork is confusing (no, I’m not an idiot), some of the reps I’ve spoken with on the phone are condescending and rude at times (they don’t listen), and I’ve had reps give me wrong information (this was admitted to me by another rep). I actually had a rep on the phone who worked with me step-by-step on the paperwork, and I still received a call from another rep saying there was a problem with the paperwork. The rep said he’d e-deliver the correct paperwork which I’d receive the next day. Guess what, I didn’t receive it. Another phone call to TIAA-CREF. The saga still continues.
And you asked: “how do they benefit from this (telling lies)?” Perhaps b/c they don’t want you to withdraw money from them, which I’m ultimately trying to accomplish. Not saying they are lieing, could just be incompetence and/or poor management.

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avatar Donna Hoffberg May 26, 2011 at 11:26 am

I agree. This is a very unethical company.I still have not received satisfaction or resolution: re:my dead husband,s ira. I am the beneficiary My husband died in April 22, 2004. Why did n’t I receive statements. I wonder if there is a federal agency that would respond to my complaint.II f I had been mailed statements this would have been resolved. I did send death certificate and a letter from the the wonderful insurance company that sent an appropriate letter and a small check for life insurance policy Help

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avatar Some guy June 16, 2011 at 4:59 pm

It was D. Addison, not D. Allison. If you can’t even get a name right I can see why you would be frustrated and confused.

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avatar Robert Wolf April 1, 2011 at 4:19 pm

Apologies and Correction:

Thanks to D. Addison for his encouraging report of his interactions with TIAA-CREF, which match mine recently and over the past 4 decades. Perhaps not the most exciting returns, but safe and steady with diverse investment options. Almost all limitations I encounter are due to my academic institution’s restrictions not TIAA_CREF.

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avatar Jonathan April 1, 2011 at 4:50 pm

To D. Addison,

In my case, not the same as discussed here, T.C illegally executed direct rollovers of RMD monies and then lied about the IRS regulations governing this type of transaction.

If T.C lied about IRS code, their employees know nothing about RMD, distribution calendar year, required beginning date, HOW CAN ANYONE TRUST THEM WITH THEIR MONEY?

I receive a return of 3 to 3.5 %. If anyone thinks that’s “great”, even in this low interest rate environment, stay with T.C, but you must certainly know that there are other investments out there that do 5% + with a minimum of risk.

Annuities, annuities, a product sold by insurance companies – every time you walk into a neighborhood branch bank, an employee tries to sell you an annuity – why? because they are very profitable – to the insurance company – not to you, the consumer.

Robert Wolf, do you work for T.C? How about you, D. Addison?

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avatar D. Addison April 2, 2011 at 4:16 am

From comments posted here, it sounds like different institutions can have very different plans with TIAA-CREF.

For ours, they offer about 50 different types of investment funds to pick from, plus a brokerage service where you can buy most stocks, mutual funds or ETFs, traded on public exchanges.

Side-stepped the 2008 down-turn and have been making 15-24% a year since. Admittedly another reason I like TIAA-CREF.

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avatar Jonathan April 2, 2011 at 1:36 pm

What kind of investments yield 15-24% INCOME (not capital gains) a year? If that were the case, I would not only “like” T.C, I would be in love with them.

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avatar retired prof April 2, 2011 at 2:14 pm

Jonathan, do you not periodically look at the performance of your TIAA-CREF investments and then make adjustments accordingly? I do. And since 1975 when I first started paying into TIAA and CREF (initially, a 50/50 split; later 25/75), I have an annualized rate of return of over 8 percent. During that tiime, we have had several economic downturns, recessions, etc. I cannot say I have the same rates of return for my Fidelity, American Funds, and Merrill Lynch accounts. For example, I just checked the 1-year rates of return for the following TIAA-CREF accounts, and found the 1-year rate of return for growth equities is 21.56%, stock, 23.62%, equity index, 23.74%, growth, 23.82%, and international equity, 28.61%. Sounds as though it is time to start loving T/C!

avatar D. Addison April 11, 2011 at 5:46 pm

I was referring to capital gains (+37% for the just concluded 1st quarter of 2011 — but entirely from the brokerage side).

avatar nancyelio April 23, 2011 at 2:05 pm

We’re all dying to know what SAFE investments are out there for 5%. No one is paying that at this point – have you look at the yield for bonds in the last year or two which fund these annuities? During the accumulation phase, I was sometimes getting 11% interest, but those days are long gone. You’re talking about other annunities, which are indeed moneymakers for most insurance companies. TIAA annutities are very low cost, indeed no cost as far as one can tell, as you can see by running the simulation on their website, and they pay more than the all the immediate annuities that I’ve (thoroughly) checked out in prep for taking mine. Sorry you’ve been having such a hard time but I’ve had a pension with them for nearly 30 years and its done well by me. There are explicit, time-consuming rules and paperwork with RMD’s, TPA’s, systematic withdrawls and rollovers and I’ve had to endure some frustations at my other investments company. What did your ERISA contact tell you?

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avatar DG April 1, 2011 at 5:12 pm

you’re joking, right?

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avatar BH April 1, 2011 at 6:08 pm

I don’t think you meant to say that “T.C lied about IRS code”. It would be more accurate to say that some of their employees did not “understand the IRS code”. Join the crowd.

Similarly, it would not be correct to say that one was lying if they said “that there are other investments out there that do 5% + with a minimum of risk”. A more accurate statement would be that that person “did not understand investment risks”.

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avatar Jonathan April 1, 2011 at 10:08 pm

BH,

You’re right, I don’t think I meant to say “lied about IRS Code”(IRC). I meant to say that employees may have intentionally ignored and distorted the language of the IRC to enable transactions in violation of the Code. An example: a direct rollover of a distribution from an annuity plan into an IRA in a “distribution calendar year”. And then T.C cited IRC sections they claim allows this – WRONG ! Plain english is plain english even if it is IRC – anyone reading the cited sections of the code can easily see the sham.

Hey BH, do you really think some of their employees did not “understand the IRC”? “SOME OF THEIR EMPLOYEES ? The “employees” who came up with the distorted explanation of the code were from T.Cs tax compliance unit. They specialize in understanding the code. What about the employees who specialize in investment advice? What do they understand?

In the next post I’ll cite the IRC sections that MAY have been abused.

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avatar DG April 1, 2011 at 11:11 pm

Do you the Wealth advisors know what they’re talking about?

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avatar Jonathan April 2, 2011 at 12:30 am

T.C Wealth Advisor:

Qualifications
• Bachelors degree
• NASD Series 7 and 66 (or combination of 63 and 65) and appropriate State insurance licenses
• Certified Financial Planner (CFP), Chartered Financial Consultant (ChFC), Chartered Mutual Fund Consultant (CMFC), preferred
• Minimum of 5 years of experience in financial sales capacity providing financial planning services to high net worth clients
• Proven track record in generating sales and managing relationships with high net worth clients, including broad technical skills in retirement products, general investment matters and applicable tax and estate planning issues
• Demonstrated experience understanding a client’s unique financial situation, providing appropriate advice and solutions, and exhibiting financial leadership.
• Excellent interpersonal skills and client face-to-face relationship building skills as well as a team player
• Experience with client relationship management (CRM) systems

Goldman-Sachs Wealth Advisor:

Experience/Skills:
▪ Robust financial industry experience – sales and trading experience preferred
▪ Customer service experience / client oriented
▪ Ability to work in a fast-paced environment and think clearly under pressure
▪ Strong quantitative and organizational skill set
▪ Excellent communication skills
▪ Ability to work in team environment
▪ Leadership skills and record of demonstrate achievement
▪ BA required (MBA, CFA or equivalent advanced degree a plus)
▪ Series 7 and 63 registration required

T.C: Bachelors degree
Goldman-Sacks: BA (MBA)

T.C: CFP
Goldman-Sacks: CFA
CHECK OUT DIFFERENCE BETWEEN CFA AND CFP

T.C: experience in financial sales
Proven track record in generating sales
Goldman-Sacks: sales and TRADING experience preferred

T.C: client face-to-face relationship building skills(=SALES)
technical skills in retirement products(=SALES)
Goldman-Sacks: communication skills
quantitative and organizational skill

Which one?: think clearly under pressure
Customer service experience / client oriented

I guess T.C advisors know what they are talking about. I also think they are quite skilled in SALES.

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avatar Professortime June 6, 2011 at 10:34 pm

The turn over for T/C weath advisors is very high they often are not good at thier job. Just do a broker check on them(finra.org) the last one I ran into had 4 jobs in 5yrs. The real difference: work just about anywhere else as a wealth advisor and make 400k+ do the same job at T/C make 50k. So who do you think they are attracting….not the winners. Usually flunkies from other firms.

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avatar Jonathan April 2, 2011 at 11:00 pm

Retired Prof,
Rate of return of 21.56%, 23.62%, 23.74% ??

What is your annual yield WITHOUT the capital appreciation of the assets added in? What was your yield in 2010? You know, dividends, qualified dividends, interest, …..What kind of income did your T.C investments generate? Again, do not include any capital gain, realized or unrealized.

What kind of adjustments can I make? I have no control of the assets in my annuities. I get 3.5% – that’s it, 3.5%

I DON’T LOVE T.C ! Make adjustments? I can’t even get my money out of T.C
You state that even with the “economic downturns” YOU had an 8% return – well, I certainly have had a different experience – my holdings at T.C lost HALF, HALF, of their value !

Retired Prof, you sound as if you work for T.C – if you don’t and you are for real, email me, my email is posted on this message board – we’ll talk. If I don’t hear from you, it’s safe to assume that you do work for T.C and your job is posting disinformation on the internet.

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avatar RC May 21, 2011 at 11:27 am

Do you know of any instance in which it has been proved that
they have misstated their funds , and not been in compliance with IRS rules governing the proper disclosure of new fund investments and rules regarding hardships.

Thank you for your follow up ,
look forward to your response

R. Compte

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avatar retired prof April 2, 2011 at 11:22 pm

Jonathan, I do not work for T/C; I’m a retired professor. I would e-mail you, but I don’t know how to locate your e-mail address. I don’t see it anywhere as public information on this message board.

Those percentages I shared with you are TIAA-CREF returns, and you can make changes in your CREF holding very easily using TIAA-CREF’s online service. You can verify these percentages from the information on TIAA-CREF’s Web site.

You asked what my rate of return was in 2010. It was 12.09 percent. This is calcuated by subtracting the December 31, 2010, holdings value from the December 31, 2009, holdings value and then dividing that amount by the December 31,2009, holdings value. From my lowest value TIAA-CREF value in March 2009 until yesterday, my account grew 50.5 percent without adding to any of my accounts. Because I’m retired, I cannot make additional contributions. My rate of return would be better had I not put so much into TIAA–approximately 35 percent. However, when the CREF side was decreasing daily, at least the TIAA side increased daily.

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avatar Jonathan April 3, 2011 at 1:31 pm

Retired Professor,
I apologize for suggesting that you are a T.C employee.
A portfolio can grow two ways, (1) the holdings can increase in value and (2) the holdings generate income that you do not remove from the portfolio but reinvest.

If a “holding” increases in value and you sell it, that’s a realized capital gain. If a “holding” increases in value and you continue to own it in the portfolio, that increase in value is unrealized capital gain.

Are your “holdings” income producing, do they pay dividends, interest, etc?

Once you know these things, you can calculate the “yield”, the income generated by your “holdings”. What %age yield do your holdings produce? Take the total yield of the holdings in dollars at the end of 2010 and divide by the value of the holdings at the start of 2010.

RETURN is the yield plus the gain.

BUT it may be that your “holdings” produce little if any income – you may be interested in “growing” your portfolio. Then, that’s a different situation. But an older retired individual is more interested in income production than increasing the value of the portfolio. If increasing the value of a portfolio via capital gains is your plan, a gain of 20%+ is what you might expect but if you are interested in generating income, a yield of 6%+ is pretty good. I have a T.C yield of 3.5% and that’s pretty bad – I can not change anything, I can not take my money out, I can not see what my money is invested in, and I can not control what they do with my money – it really is not my money. I should add that I could probably try to remove 10% a year – a lot of good that does considering the number of years I have left.

You state that your rate of return was calculated by subtracting the December 31, 2010, holdings value from the December 31, 2009, holdings value and then dividing that amount by the December 31,2009, holdings value. This is true, but what was your YIELD during this time interval?

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avatar retired prof April 3, 2011 at 4:35 pm

Jonathan, I’m most interested in getting the “bottom line” increased as that translates into dollars when I have to start taking withdrawals because of RMD in about 20 months. Yield is not a big concern of mine at this point. In one of your earlier messages in this thread, you seemed surprised that people were getting returns of 15-24 percent. That is why I shared that information with you.

Here is a breakdown of (by percentage) of my T/C holdings: TIAA, 34.6 percent; CREF stock, 39.88 percent; Equity Index, 8.56 percent; Mid Cap Growth, 7.82 percent; Mid Cap Value, 2.84 percent, and Large Cap Growth, 6.48 percent. I have no control over whether the mutual funds pay dividends; I do know the Mid-Cap Value fund did pay dividends in the first quarter of 2011.

What are your current holdings by percentage?

Here is a link that you might find helpful regarding distributions: http://www.tiaa-cref.org/public/performance/retirement/distributions/index.html

The prospectus, annual reports, and semi annual reports will be helpful to you regarding the CREF side. For the mutual funds, you can find what their holding are using finance/yahoo.com. The prospectus, annual reports, and semi annual reports are all available on T/C’s Web site.

I randomly selected one of my holdings–the Large Cap Growth fund, and it had a 1-year return of 36.16. Contrast this with Fidelity’s Large Cap Growth fund return of 21.91 and Vanguard’s Large Cap Growth fund of 30.37. I’m sure other T/C funds have a lower return than Fidelity and Vanguard, but I suspect T/C also has others that are better than Fidelity or Vanguard.

I just checked my return for the first quarter of 2011. It is 4.15, which translates into an annual return of 16.6 percent. This includes 34.6 percent of my holdings that currently have a 3.85 or lower rate of return (TIAA).

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avatar DG April 3, 2011 at 1:47 pm

Hey guys, what are 3,5,10 year numbers? That’s the only fair comparison. if somebody has access to analysis please provide TIAA-CREF vs. Vanguard vs. Fidelity.

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avatar retired prof April 3, 2011 at 6:29 pm

DG, I have three TIAA-CREF mutual funds, so I did what you suggested. I really not interested in looking up the information for the funds I don’t currently own. In some cases, I may be comparing apples and oranges because one of the companies may have only an index fund while the other two don’t have an index fund in the large, mid, and small cap categories. Here is what I found for the rates of return. I’d say TIAA-CREF’s returns for these three funds are very competitive.

Mid Cap Growth 1 3 5 10 Life
TIAA-CREF 36.16 5,85 4,92 — –
Fidelity 21.91 4.21 -.40 4.25
Vanguard 27.31 5.38 -5.79 9.95

Mid Cap Value
TIAA-CREF 26.33 3.84 4.55 –
Fidelity 22.91 7.08 3.92 8.60
Vanguard 19.34 4.54

Large Cap Growth
TIAA-CREF 24.48 4.63 4.26 —
Fidelity 22.89 4.90 .38 2.29
Vanguard 16.13 2.81 2.97 4.79

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avatar retired prof April 3, 2011 at 6:31 pm

Unfortunately, the tabs in my last post didn’t “hold.” If you are interested in comparing the data, you better look up the rates of return on your own.

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avatar TIAA member April 3, 2011 at 9:06 pm

TIAA is the only retirement choice many Colleges offer. The larger institutions offer more investment choices but the smaller ones do not. If you don’t know a lot about investing and you don’t want to withdraw your funds then TIAA offers a decent place for your money. The investment choices are somewhat conservative but the fund expense charges are low so the overall returns are similar to many company 401-k offerings. TIAA is NOT a benovelant organization. Like all insurance companies their first interest is their own. Wealth Management services are a profit center for TIAA. .

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avatar BH April 3, 2011 at 10:15 pm

“TIAA is NOT a benovelant organization. Like all insurance companies their first interest is their own. Wealth Management services are a profit center for TIAA.”

Hope this is not correct. They are registered as a “not-for-profit” organization.

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avatar Jonathan April 4, 2011 at 9:18 pm

BH,

AARP is another “not-for-profit” making gigantic profits selling health insurance because Obamacare legislation finished off MEDICARE ADVANTAGE. And, well, what do you know!, AARP supported the OBAMAcare legislation. Do you think? Well, it IS being investigated by the IRS.
T.C is another one that needs to be looked at but with its CEO a friend of Obama, you know the answer.

T.C / AARP, same problem.

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avatar TIAA member April 5, 2011 at 9:18 pm

TIAA is not a non profit – it is a “not for profit” or as president Roger Ferguson tells employees “we may be a not for profit but we are definately not for loss”. TIAA has no stockholders to pay dividend to or be accountable to so the more they “profit” the more they can pay out in Wealth Management and executive bonuses and other internal company expenses. The same is true for other Mutual Insurance Companies (who could also claim to be not for profit).

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avatar WMA April 5, 2011 at 11:28 pm

Roger’s bonus doesn’t compare to other CEO bonuses of similar sized financial organizations. I believe his bonus last year was $10 million. That’s peanuts compared to the CEO’s of Morgan Stanley and Goldman Sachs. The Wealth Management Advisors average bonus is only $50k.

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avatar Jonathan April 5, 2011 at 11:34 pm

WMA,

Does this make T.C better than Morgan Stanley or Goldman Sachs? What is the significance of your information?

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avatar WMA April 5, 2011 at 11:41 pm

It’s much cheaper to invest with TIAA-CREF because they keep their compensation costs in line.

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avatar Jonathan April 6, 2011 at 12:19 am

WMA,

OK, I should invest with T.C because it’s cheaper? But what about the investment advice I get from T.C? What about T.C pushing their investment products?

What about NOT being able to take my money out of T.C?
What about the 3.5% yield I’m stuck with? For ever!!!
What about that – ITS CHEAPER? In life you get what you pay for and what I got from T.C is …….. (I think you can fill in the correct word here)!

I think people would be smart to go to a real financial advisor at Morgan Stanley or Goldman Sacks. They are investment banks not an insurance company like T.C

HOW MANY ANNUITIES HAVE YOU TRIED TO SELL THIS MONTH?
An annuity: “an insurance product” that is very profitable for the insurance company, T.C

Profitable for T.C and I am stuck with a 3.5% yield for the rest of my life and all I can do is remove 10% of my money each year – but at my age, I’ll most likely die before any significant amount is “liberated” from T.C

“MUCH CHEAPER TO INVEST WITH TIAA-CREF”? Stupid logic. Everyone, be warned!

avatar Jonathan April 5, 2011 at 11:29 pm

TIAA member,

Do you think this is a good thing or a bad thing?

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avatar Current TIAA-CREF April 9, 2011 at 11:48 pm

Jonathan,

The reason annuities have a reputation is because they are normally high cost investments that have high surrender fees, virtually every account opened at TC is an annuity but without the high costs and surrender fees. If you compare a typical annuity the overall charge for that product is 1.5 – 2% in annual costs, with TC the TOTAL fee is whatever CREF investment you have which averages around .42% which is far cheaper than most mutual funds.

You keep saying that you are stuck with TC, why don’t you just begin paying out your Traditional and have that money reinvested with your fantastic Morgan Stanley advisor? And another thing, you keep mentioning your yield of 3% and there is NO WAY your Traditional is paying that low of an interest rate, you are probably getting at least 4% on that money.

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avatar lizzy April 10, 2011 at 1:07 am

I’d have paid even an exorbitant surrender fee, knowing that my funds would earn it back elsewhere, I’d have much more flexibility, and I’d be DONE with T-C. But no … they insist on forcing me to deal with them by holding my money hostage. Brilliant reputation-building model, isn’t it, to maintain a death grip on irate clients who would pay through the nose to escape? I’ll turn cartwheels of joy and drink a case of champagne on the day I’m finally through with them. Meanwhile, I tell everyone I know to run far, far away from T-C and especially from TIAA Traditional.

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avatar emily h April 12, 2011 at 5:41 pm

Well good luck being through with them, or ever seeing your money again.

avatar independentobjective April 7, 2011 at 12:19 pm

Until 1996, TIAA-CREF was “tax exempt” under Code section 501(c)(3). Its Chartered purpose was to aid and support other tax-exempt educational institutions by providing products and services on terms as advantageous to educators as practicable. Maintaining its tax exempt status helped rein in management discretion — just as colleges and universities are careful to maintain charitable aspects. While a 1996 federal tax act that removed the tax exemption did not affect its status as a New York non-profit, TIAA-CREF changed its charter. Among other things, the changes expanded its scope beyond the educational sector and removed wording about “advantageous” terms.

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avatar DG April 7, 2011 at 12:33 pm

Interesting. What does this mean for the consumer of TIAA-CREF services?

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avatar independentobjective April 7, 2011 at 1:26 pm

That TIAA-CREF once operated. more or less, as a charitable organization contributes to a lingering perception of “altruism” in the minds of consumers of its services. In its tax-exempt phase, TIAA-CREF eschewed certain practices of other insurance/financial services companies in order to preserve a charitable status. Their organization as a non-profit and their “dot org” website date back to the tax-exempt era. Artful wording (e.g., “greater good” tagline) helps obscure today’s reality. Consumers of TIAA-CREF services should be aware that there is little or no reason at this point for TIAA-CREF to refrain from acting in its own best interest. Caveat emptor.

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avatar Ex-T/C April 7, 2011 at 7:00 pm

This certainly sums up the transformation I witnessed first hand as a former employee from the mid nineties to just a few years ago. I did not know about the specific change to the charter, i.e., the elimination of the “advantageous” concept…that was interesting, thank you. The idea that T/C has improved is debatable, but as far as winners and losers go, it’s clear the winners are management and other who enjoy large bonuses. I’m afraid the losers are those plan participants who still see the company in an altruistic light.

avatar Ex-TIAA April 7, 2011 at 2:18 pm

… and they certainly are very good at pitching that whole “for the greater good” stuff. Quite artful, isn’t it? The last time I checked, TIAA-CREF was #86 on the Fortune 500 list. Their revenues are $27 billion/year; profits are $1.4 billion. They manage $450 billion in assets. Their senior management typically receives annual bonuses in the millions. Sound like any non-profits you know?

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avatar Ex-T/C April 7, 2011 at 7:37 pm

Good points, although it is interesting to track their progress on the Fortune 500 from 2000, when they were #19, to 2010, when they came in at #90. Looking forward to this year’s list.

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avatar Ex-TIAA April 7, 2011 at 9:15 pm

TIAA-CREF has been continuously losing market share and revenues over the past decade due to a multitude of reasons that have been eloquently documented on this website. If Vanguard and Fidelity ever get serious about the 403b market, TIAA-CREF will be history. That’s why they are so intent on developing new revenue streams like Wealth Management.

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avatar Ex-T/C April 8, 2011 at 7:10 pm

You are right about their competition. I just learned recently about T/C losing Purdue U. to Fidelity, effective 1/1/11. That was a big, generous plan and the loss hits them where it hurts. This, after losing the lions share of the Stanford U. plan to Vanguard a couple years ago. Ouch. For T/C, there are only losses and saves now…

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avatar luigilou April 10, 2011 at 9:07 pm

I am disappointed that the former T-C employee and Jonathan are attempting to demonize T-C when, to someone who has worked without difficulty with T-C for 30 years, their rants suggest that they didn’t bother to learn the rules. True, if you put your investments in T-C’s “traditional,” guaranteed-rate plan, you can’t yank it out whenever you like. T-C’s rules are clear and are made clear in written documents to investors how the money can be withdrawn.
Whether annuities — which Fidelity and Vanguard also peddle — are a good investment is something for each investor to decide. To use it as a weapon of attack on T-C is amateurish.
Anyone wanting to manage his/her own money probably should take it out of T-C or put it into a self-directed IRA with T-C brokerage. It’s a lot easier to lose your money that way than to leave it in an account managed by salaried advisers who don’t make money every time you trade.
What I’m suggesting to those who are not familiar with T-C is that you read what the angry folks say with skepticism and check out T-C for yourself.

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avatar retired prof April 10, 2011 at 9:52 pm

luigilou, your comments are well taken. A few days ago on this Web site, I mentioned how well I have been served by TIAA-CREF and how well my accounts had performed; in fact, they have performed better than my Fidelity accounts and my American Funds accounts during the recent economic recovery. Jonathon responded by saying that I must work for TIAA-CREF (because I have had a favorable experience) and to prove that I didn’t, I was to e-mail him; however, that wasn’t possible because I don’t have his e-mail address. Because I use TIAA-CREF’s e-mail service to contact T/C (I don’t have time to spend 30 minutes or longer on hold), I’ve always received a full and thoughtful response to all questions asked within the two business days that they promise. I’ve even received information that I didn’t specifically request but which theTIAA-CREF person I was e-mailing thought I would find helpful. In addition, I’d like to add that my annual rate of return since 1975 is currently averaging 8.4 percent, and that includes performance during several recessions and economic downturns. I also compiled some performance data on three different Fidelity, Vanguard, and TIAA-CREF mutual funds for 1, 3, 5, and 10 years; TIAA-CREF was very competitive with all three funds; and, in fact, was the leader in a couple categories. (I used only the mutual funds I currently hold in my TIAA-CREF accounts. Jonathon is concerned about his yield, but I’m concerned about my botton line because that is what translates into dollars when I begin to take required minimum distributions at age 70.5. I guess unlike some others who have TIAA accounts, I knew when I started paying into TIAA-CREF what I was getting with TIAA and what I was getting with CREF. That was my responsibility and my responsibility alone. And if I got into something I didn’t understand, then I needed to ask questions to seek clarification.

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avatar nancyelio April 23, 2011 at 4:22 pm

Yes, you can do better in the stock-market or commodities at this moment. How you can do better than 3.8 or 4% interest or more right now (depending on the years your contributions went into the fund) on money that’s guaranteed never to lose a penny, I can’t imagine. I just pulled out my statements from 2003. No money has gone into it since then because I haven’t worked at the school. My CREF portion doubled from 2003 as of Thursday, 4/21/11 (and I transferred a lot of it over to Traditional that day while the getting is good). I have no idea what it did in 2008-10 because I was afraid to see how much CREF fell after the market collapse; I knew the Traditional was safe and sound. My TIAA Traditional account contains 25% more money than it did at that time. 15 years of funding the two accounts resulted in increasing the funds to more than 75%. I’m very happy with that. It was common knowledge that we couldn’t take the money out of the TIAA traditional when I was working, and it was impressed upon us that the Traditional was safe, the CREF would make substantially more over the long-run, with the small, but real possiblity that it could dive around the retirement years. A few of the teachers who came from other schools had been able to get their money out because of the plans their former schools had set up with TIAA. Our school, which employed a lot of women, had what might be considered a patronizing attitude of wanting to make sure their employees wouldn’t be left without anything except a minimal SS check in retirement and so prohibited withdrawing the funds before that time. It was one area that was explicitly and repeatedly affirmed when one signed up for the pension. They had good reason for this when the plan was set up and women were largely dependent on their husband’s salary. In any case, the people who did take it out because of divorce, unemployment, etc. all said they regretted their decision. It’s been good for me and for other people I know in assuring we have a pretty nice guaranteed income stream throughout our lives. People with 1.5 mil portfolios, a great defined pension plan, continuing health benefits, etc. may find it unnecessary or constrictive because they can live on the recommended 4% of their portfolios and have a decent income while preserving their principle. But those of us who need a guaranteed income every month to supplement Social Security can’t afford to invest in something that can halve or disappear if there’s another market crash during our retirement years. You obviously are not in that category since you haven’t needed to touch your money until 70 1/2, but please understand that a lot of are and specifically invested in TIAA Traditional because we wanted an income that we weren’t tempted to touch or able to take out except in a nine-year payout. Also, TIAA is very careful during transfers from one account to another to make sure that they understand your instructions perfectly. They will never transfer from one account to another unless you call them, make the transfer yourself online, nor will they initiate automatic transfers unless you submit signed documentation to do that. I guess I’m still not understanding how or why this happened. People frequently have large accounts at multiple investment firms and may take all of their minimum distributions from just one of those accounts. How would Merrill know if you were doing that at TIAA or TIAA know if you were doing that at Merrill? So unless you told them specificaly that this was an RMD, you would still be able to transfer money between IRA’s until you tapped them, no? It sounds as though they didn’t know that this was a RMD that was being transferred. The average phone-answerer at TIAA is heads-over heels more knowledgeable than the other large and well-regarded firm I deal with, so that would really surprise me. If it is against the law (tax code) to transfer RMD’s to an IRA, and if they, knowing the money was targetted as a RMD, transferred them to an IRA instead of to your bank-account (per the website), then clearly you have a iron-clad case. Their calls are taped so you shouldn’t have any problem proving that.

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avatar Jonathan April 10, 2011 at 10:53 pm

Luigilou,

If you go back in time with the posts you will find my email address.

The “angry” folks are angry for good reason. Read my postings with skepticism and do check out T.C for yourself – check, see what their reputation is. But let me tell you about how T.C goes about their business, and then ask yourself, do you trust them with your money.

I reached 70.5 years of age in 2010, this is my “first distribution calendar year” for Required Minimum Distribution, (RMD). The IRC (Internal Revenue Code) is very clear, read it for yourself, in a distribution calendar year, RMD monies are not allowed to be rolled over via direct rollover, into an IRA. The IRC goes on to state that any distribution in a distribution calendar year is RMD, until the required minimum distribution is satisfied.

T.C took 90% of my monies (distributions) and rolled the monies over (direct rollover) into my IRA. They then told me that my RMD has not been satisfied for 2010 and that by April 1, 2011 (“Required Beginning Date”) I would have to withdraw a sizable amount from my annuity contracts to be compliant with the IRS requirements relative to RMD. You see, the monies that were rolled over into the IRA appear in T.C 1099-R as “distribution from the IRA” AND NOT distribution from the annuities. Do you follow this so far?

T.C improperly or illegally rolled over my RMD into the IRA and then began to defend their actions by citing meaningless sections from the IRC. Do your own homework! Study the IRC that has to do with RMD. I have letters from T.C employees that prove that they know nothing about the RMD requirements – these same employees are giving me advice about the RMD rules but I did my own homework. How about the T.C employees that give clients advice about their investments? Be skeptical, check it out for yourself.

Reach the magic age of 70.5 yet? Been advised by T.C to sign an MDO contract so that you will never have to worry about RMD again?

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avatar BH April 11, 2011 at 3:08 pm

“T.C took 90% of my monies (distributions) and rolled the monies over (direct rollover) into my IRA.”

Where did YOU tell them to place these funds (assume these were the funds you calculated were necessary to satisfy your RMD requirement).

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avatar D. Addison April 11, 2011 at 5:39 pm

On their own initiative, out of the blue sky, they rolled 90% of your distribution money from “X” (what was the source?) into an IRA? On what authority? Where did they come up with 90%, why not 83% or 100%?

It sounds like you have letters from T.C. containing erroneous information, and that you were a bystander who had no control or participation in the events. You never filled out the paperwork that requested the rollover? This should go along way toward releasing you from penalty if you had no control over the transaction and did not authorize it.

Is it T.C.’s responsibility to compute RMD and prevent you from taking improper actions?

This could be difficult since people can have multiple IRA’s and are allowed to take the RMD from only one of them, or split it anyway they want between more than two IRAs. So it sounds like people are on their own as far as properly determining what their RMD should be because T.C. can’t know what else someone else might have going on.

Anyway, whenever I have called TIAA-CREF, the conversation has been recorded. Any “illegal” advice should be on record.

And the question “do you work for TIAA-CREF” (I don’t) goes both ways … one could ask if the inconsolable public complainers are working for Fidelity or Vanguard.

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avatar Jonathan April 12, 2011 at 10:03 pm

Hey D. Addison,

You just don’t get it! T/C rolled over distributions from an annuity account in a “distribution calendar year”, into an IRA – NOT ALLOWED, IRC !

How it came to this is not relevant – they not only did it in violation of the IRC, they also defend their actions based on a fabricated excuse! This is dishonest !

D. Addison, it is not T/C’s responsibility to compute the RMD but they are accountable for allegedly violating Treasury Department regulations. You talk about multiple IRAs. No, people are not on their own – T/C understands very well what the RMD rules are concerning aggregating minimum distributions – IRAs can be aggregated as well as 403Bs, but 401As can not be.

So, let’s assume that T/C rolled over RMD monies in violation of the IRC. What should all of us on this message board take away from this? And for any non believer out there, I can cite specific sections of the IRC for you. What does all of this say about T/C as a business entity?

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avatar BH April 12, 2011 at 10:53 pm

“How it came to this is not relevant”……

I don’t think is the case. As you said, “No, people are not on their own”. You have two responsibilities:

(1) to tell them how much to transfer (RMD amount),
and more importantly in this instance,
(2) where to transfer the funds

Did you do the latter? Did you tell them to transfer the funds to your bank account, deposit it in one of your mutual fund accounts, send you a check, etc., or did you leave that choice up to them?? If the latter, and you had only one other account with TIAA in which they could deposit the funds, your IRA, then I could understand how the error could be made. Indeed, I would have complimented TIAA if they had caught the problem, rather than blaming them for missing it..

avatar Jonathan April 12, 2011 at 11:33 pm

BH,

I do not think you understand the RMD rules as stated in the IRC, and I don’t think you understand the issues I have presented. Nothing here has anything to do with my responsibilities.

(1) “tell them RMD amount”:
In our case, and in all cases like this, the issue is not “how much”, it is about WHERE the monies go, and what constitutes RMD. The IRC states that in a distribution calendar year, all distributions are to be considered RMD until the RMD requirement has been met. If the RMD for an account in a specific year is $5,000 and $7,500 is distributed from that account, which part of the $7,500 is the RMD portion. Answer: All monies distributed in a calendar year are considered RMD until the RMD amount has been satisfied. That means that the first $5,000 to come out of that account is the RMD portion. And that brings us to the next point,
(2) “where to transfer the funds”: In our case T/C put the RMD funds into an IRA and the IRC states that this is not allowed – RMD monies can not be rolled over into an IRA!
T/C’s position was that the distribution monies were not the RMD portion and that the IRS does not define which part of an annual distribution is RMD. But this is not true, ITS A LIE !

The IRC is very clear about this and I have already stated what the regulation is.

So, the issue here is the violation of the IRC. RMD monies, in our case, were rolled over into an IRA in violation of the IRC. That’s it!

What T/C did has absolutely nothing to do with an RMD amount and it has nothing to do with where the monies should have gone, and it has nothing to do with our responsibilities – simply stated, it’s about RMD monies, they were rolled over into an IRA in violation of the IRC, and thats it!

Do you now understand what they did that was wrong ?

avatar luigilou April 11, 2011 at 4:03 pm

Jonathan’s problems with how T-C dealt with his minimum distribution requirement led me to the T-C website. I don’t know that what I found would have made his transactions smoother, but it seems self-explanatory.
Go here http://www.tiaa-cref.org/ucm/groups/content/@ap_ucm_p_frm_pub/documents/formdocument/tiaa01008490.pdf
to see the form on which T-C members set up how their MD are handled. If you have earned income, you may contribute to your Roth IRA. However, members may re-invest their MDs in numerous funds. Since the IRS taxes distributions when they’re taken, it seems prudent to re-invest them in tax-free ways. Unless you’re a wizard and can generate such great profits in stocks that you don’t mind paying the tax on your growth.
I fail to see how Jonathan was so deceived.

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avatar Jonathan April 12, 2011 at 10:55 pm

Luigilou,

The issue is rolling over distributions into an IRA in a “distribution calendar year”, that is every year beginning with the calendar year when a person reaches 70.5 years of age.

Rollovers of RMD monies into an IRA are not allowed, period! T/C knew this but did it never the less. And then T/C employees, in writing, incorrectly informed us that the RMD had not been satisfied for 2010 and that we needed to take additional monies out of the annuity accounts – ALL TOTALLY WRONG! Had we listened to this advice, WE WOULD HAVE BEEN DAMAGED FINANCIALLY BY THE TRANSACTION.

THIS IS HOW WE WERE DECEIVED. If you are interested, I can go into more detail but for now, it is sufficient to say that T/C employees gave us false information concerning RMD, displayed a complete lack of understanding of the RMD rules, and T/C provided us with defective 1099-Rs for the 2010 income tax reporting – AND THEN THEY DENY DOING ANYTHING WRONG !

I hope everyone out there can clearly see what the problem is. It’s not just about taking total control of your money or bellow average annual yields, it’s about how T/C conducts their business. The facts speak for themselves.

Do you want T/C to control your retirement monies and invest it in what they choose or do you want a professional to invest your money with your preferences in mind? And if you are not satisfied with how your financial advisor is managing your money, wouldn’t you like to be able to take your money elsewhere? It’s your money! BUT WAIT, WRONG! It’s T/Cs money – try and take it elsewhere, try it. CAN YOU ALL SEE WHAT’S WRONG HERE.

Let me be very clear about all this, the T/C money which we effectively have no control over and can not withdraw from T/C in the years we have left to live, has an annual yield of 3.5% – NOT ENOUGH TO LIVE ON ! The money we invested, investments we made in consultation with a financial advisor at Morgan Stanley, provide us with the income necessary for our day to day expenses. I can clearly say that the money invested at Morgan Stanley is all OUR money, investments we control, investments we picked, investments we can get rid of if they go bad. IT’S ALL ABOUT CONTROL OF YOUR MONEY, YOUR INVESTMENTS, MONIES YOU WORKED HARD FOR your entire life! And if we are not satisfied with Morgan Stanley, we can take all of our investments out of there and go where ever we like with them.

But you can’t do that at T/C. Get it?

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avatar retired prof April 12, 2011 at 11:08 pm

Jonathan, when your wife allowed her investments to be put into TIAA, she had some responsibility to know what she was getting into. Basically, she had 3 options for getting the money out, and this is clearly stated in the TIAA literature: 1) RMD, 2) TPA, or 3) interest only payments. I’m wondering why she didn’t have some of her money put into CREF. You mentioned that it was all in TIAA.

As far as the 3.5 percent you claim, TIAA has an annual return of 5.83 percent over the last 10 years. And the current return is 3.85.

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avatar Jonathan April 12, 2011 at 11:58 pm

Retired Professor,

Read my two most recent postings about what T/C did with the RMD monies and what they wrote us.

I do not think RMD is a way “for getting the money out”. The RMD amounts are too small to be considered as a way of getting the money out of T/C

Funny you should mention “interest only payments”. Again this is not a way to remove funds from T/C. T/C told us that “interest only” will not satisfy the RMD requirements because it is only interest that is paid out and it does not provide for any other payouts such as RMD – the interest payments may not be enough to satisfy the RMD in a distribution calendar year, and if additional distributions are required for RMD, T/C will not pay out the additional funds for the satisfaction of the RMD.

Treasury regulations state that all annuity contracts SHALL satisfy the RMD requirements. But T/C insists that the “interest only” will only pay interest and not RMD. T/Cs position seems to be in violation of Treasury Department regulations – if you give me your email, I’ll send you the regulations and the IRC that states the RMD rules.

“she had some responsibility to know what she was getting into”: T/C told her in years prior to her “first distribution calendar year” that she should roll over monies into an IRA. When she reached 70.5 she was not told by T/C people that rollovers could no longer be done AND when she informed them that 2010 was her first distribution calendar year and that she questioned whether her rollovers would be counted as RMD, she was told, YES, the rollovers would be RMD for 2010, and it’s all recorded.

So,how could she assume any responsibility for what she was getting into if the T/C employees didn’t know what they should have. But what is worse is T/Cs position that they did nothing wrong and cited a meaningless section of the IRC. T/C continuously states that “this is our interpretation of the IRC” – but it has nothing to do with interpretation, it’s black and white – the code is the code and it is very clear, and in plain english.

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avatar retired prof April 12, 2011 at 11:46 pm

Jonathan, as I understand the RMD rule, if you withdraw money from a retirement account before the day you reach 70.5 and you don’t let the financial institution know that you intend for the distribution to count toward RMD or if you complete the incorrect form for the distribution (i.e., use a form other than the MDO form), TIAA would not have known that you intended the distribution to count toward RMD. Perhaps that is why it was put into an IRA.

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avatar Jonathan April 13, 2011 at 12:08 am

Retired Professor,

In the calendar year you reach 70.5, that year is known as your first distribution calendar year. This is the first year that RMD has to be satisfied.

RMD is just simply a distribution. Any money coming out of an IRA or 403B for example, is a distribution. The only thing that changes after you reach 70.5 is that you are required to take a distribution that the IRC defines as the minimum – but you can take as much as you like, you only have to take a required minimum, the RMD.

After 70.5, any monies distributed are part of the required minimum until it has been satisfied. Listen, find my email address by going back to previous posts, email me and I’ll give you my phone number and explain it – it’s really quite simple once you understand it.

Basically there is nothing to designate for an RMD, it’s just a distribution like any other distribution but after you reach 70.5 you must take a certain minimum distribution, hence the name, RMD. get it?

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avatar retired prof April 11, 2011 at 8:49 pm

The following is a message posted by Jonathan on March 8, 2011 at 8:14 p.m. Seems to me that Jonathan’s anguish with TIAA-CREF regarding skimpy yields is mostly self-inflicted. His comment that his wife’s funds “are locked up at 3% a year for ever” are simply not true because of RMD. Besides TIAA-CREF adjusts the TIAA rate every March, and the current rate may go up or down. It was paying 5 percent not too long ago, if I remember correctly. The rate just went up to 3.85 percent. If all of Jonathan’s wife’s holdings are in TIAA and none are in CREF, then she had no paper (or real) loss during the recent recession unlike those of us who had both TIAA and CREF holdings.

“Read everything posted at this site – T/Cs intention is to get all your money and lock it up for ever. An annuity is a “product” sold by an insurance company, and they make a lot of money doing this – obviously they are not looking out for you. An example of a PRODUCT is a mortgage backed security, a derivative. I don’t invest in products, I invest in equities, bonds, things that are REAL.

Go to a major financial institution and consult with a financial advisor – establish a relationship with this advisor – he will look out for you.

T/C is looking out for T/C. My wife never really understood what they were doing with her retirement funds – I was too busy with my day to day activities to listen to her or pay any attention to what they were telling her and what they convinced her to do with her funds – now it’s too late.

Within the past three months she has been on line, on the telephone, and writing to T/C. She was constantly complaining to me about her terrible experiences with T/C. I had no choice – I had to get involved and I began to educate myself about T/C and what they had done with my wife’s monies and my conclusion: “Deceptive practices that result in financial or other losses for consumers in the course of seemingly legitimate business transactions”

This may not be entirely true but this is my opinion and how I feel; And I have started looking into T/Cs business practices – I will probably file a complaint with the IRS if the information I get back justifies it.

Go to a real bank and open up an investment account – I have my monies with Morgan Stanley and my financial advisor there looks out for ME! Did anyone ever explain municipal bonds to you? You can have a ladder of munis yielding over 5% tax free. With a ladder properly set up, you will always have bonds coming due, you then take those monies and buy new bonds so that you can keep up with the changing interest rate environment. Give your money to T/C and like my wife, you may have your money locked up for ever at 3% – THIS IS WHAT THEY DID TO MY WIFE. What do you call this kind of business practice?

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avatar BH April 13, 2011 at 1:26 am

Jonathan,

“(2) “where to transfer the funds”: In our case T/C put the RMD funds into an IRA and the IRC states that this is not allowed – RMD monies can not be rolled over into an IRA!
T/C’s position was that the distribution monies were not the RMD portion and that the IRS does not define which part of an annual distribution is RMD. But this is not true”

Since you continue to avoid answering the question about whether you, or your wife, TOLD them “where to transfer the funds”, I will assume that this was not done.

We all understand the RMD & IRC regulations, what T/C did, and what went wrong.

From your comment that “the distribution monies were not the RMD portion”, my suspicion is that she already was involved either in a TPA from a RA, or conversions from a SRA account, into an IRA account, BEFORE she reached the 70.5 age at which RMDs were required, and that these annual transfers were going into an IRA account.

So let me try this question that can have a simple yes or no answer. Was she involved in a transfer of funds from either a RA or SRA, into an IRA, before she reached the age when RMDs were required? This does not require an understanding of either IRC or RMD regulations, or what T/C did.

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avatar Jonathan April 13, 2011 at 2:00 am

BH,

First,I have no idea what a RA or SRA is.

Second, what is your point? Why is it necessary to know if transfers took place before the “first distribution calendar year”?

If we all understand the RMD regulations and what T/C did that was wrong, why don’t we recognize the fact that T/C violated the federal regulations?

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avatar BH April 13, 2011 at 4:06 am

“First,I have no idea what a RA or SRA is.”….. It’s the type of account your wife has. One has withdrawal restrictions and the other does not. Both would require RMDs at 70.5.

“Second, what is your point? Why is it necessary to know if transfers took place before the “first distribution calendar year”?”….. Again you avoid answering a question, this time by asking a question. I’ll have to assume that you do not know the answer at present, but will try to find this information and post later. In an effort to get the question answered, I’ll going to hold off answering your question until you answer mine. Hope you’re curious enough to do this. :-)

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avatar retired prof April 13, 2011 at 7:27 am

Jonathan, you still haven’t answered several questions:

1. What form did you/your wife use to request the distribution purported to be misdirected?
2. Where did the form indicate the distribution was to be placed?
3. Had your wife reached age 70.5 when the request was made? If not, TIAA might have thought it was a regular distribution rather than the RMD. If the incorrect form was used and/or had the T/C client not reached age 70.5, T/C likely thought it was to be a regular distribution rather than a RMD. If that is the case, I seriously doubt T/C is obligated to make a fix.

Second point: From what you have said, you are a strong believer in municipal bonds and the laddering thereof. You might want to take a look at the information in the following link. The relevant paragraph appears below under the heading that begins with “Muni Bonds?. . .
http://finance.yahoo.com/banking-budgeting/article/112529/lazy-portfolio-index-funds-marketwatch?mod=bb-budgeting

“Muni Bonds? $300 Billion Pension Fund Shortfall, Bubble Getting Bigger

State and city finances are so bad off that the $2.9 trillion muni-bond market could see 50-100 defaults, warns guru Meredith Whitney. Worse, not only do these pensions have more than a $300 billion funding shortfall, it will get worse. The Journal: “Battle’s between actuaries vs. local governments over return rates.”

Example: The actuary for Calpers, the $227 billion California Public Employees Retirement System, recommended a conservative 6% return rate assumption. Yet, Calpers’s board kept their “assumed investment return rate at 7.75%, arguing the lower rate would create hardships on local governments.” So they contribute less, but the problem grows, the shortfall gets bigger.”

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avatar Current TIAA-CREF April 13, 2011 at 12:38 pm

There are two very important items to clarify, did you have a Minimum Distribution Option (MDO) contract with TIAA-CREF or did you just request a cash withdrawal? If you requested a cash withdrawal and directed us to send that to an IRA that transaction in NO WAY violates any IRC code all you are doing is moving funds from one pre tax account to another. If you have an MDO contract with us the payments or amounts we send out are not rollover eligible so therefor they would have to be paid out thus satisfying one’s Required Minimum Distribution (RMD). One of the ways to liquidate TIAA Traditional is to choose the MDO option and you are correct that initially those payments are small but as you get older the IRS will require you to take more and more out of your retirement plans.

avatar Jonathan April 13, 2011 at 3:32 pm

Hey “retired prof”,

You seem to know a lot about this retirement stuff for a “retired professor”. Are you sure you are not a T/C employee ? Before I answer your questions will you issue a statement that you ARE NOT a T/C employee? Post it here or even better, send it to my email address and if you like, verify it by providing me with some evidence that you are who you claim, a retired professor – last name and institution where you were employed would do.

You state that T/C is not obligated to “make a fix” if the incorrect form was used AND/OR T/C thought the distribution was “a regular distribution” and not a RMD because the client had not reached age 70.5

None of this has anything to do with a client using an incorrect form, it has to do with T/C allegedly violating federal regulations and laws.

T/C knows my age, they are fully aware of my “required beginning date”. If T/C knows that 2010 is my “first distribution calendar year”, they know that all distributions in 2010 are RMD. They also know that RMD can not be rolled over, it’s a violation of the IRC. How can you state that T/C is not obligated to make a fix? It is herein alleged that T/C violated the IRC. Prove that they didn’t ! All the evidence and facts seem to support the allegation.

As far as Municipal Bonds are concerned, your statement is both false and misleading and could be categorized as disinformation. The Muni issue is too long and complex for this message board, and off topic – just let me say that the information you cite in your post is not fact and a compelling argument can very easily be made that Municipal Bonds are a relatively safe investment that has many advantages for retired persons.

Just read this:
Nonetheless, Whitney is now admitting that public officials are doing what she said they couldn’t or wouldn’t do just three months ago by cutting their budgets, raising taxes, or a combination of both, so they don’t default on their debt. “Every day things get better because politicians are addressing the fiscal challenges more aggressively,” she now says. “Since November, you’ve had more governors take strong austerity measures…everyday the situation gets more focused and that means its closer to a fix.”

Hey T/C, do you recommend Munis for your clients? Why not? Do your “Wealth Management” people offer Munis to their clients?

avatar nancyelio April 23, 2011 at 6:03 pm

Ding, ding, ding. All the pieces fall into place, thanks. What a jerk. What exactly did this guy do? He very belatedly looked at his wife’s retirement plan, didn’t know anything about the plan or even what an RA is, decided it wasn’t getting the returns he wanted, was shocked he couldn’t cash it all out, had her start to TPA it out into a liquid account at TIAA and then what? Somebody told him the IRS requires you to take a percentage out of your tax-deferred investments every year and there wasn’t yet enough money in the TPA to satisfy that? And that’s at least 10% of everything in the annuity? What to do? Hit the Morgan Stanley funds? Surely there are some large IRA’s sitting there in his name. He’s not tapping them because he like the returns and wants to empty out the Traditional account instead. So though he’s now taking the money out as fast as he can, TIAA is at fault because he wants all the money that’s in the fund immediately? Screw the millions of us whose income and returns depend on the slow outflow of cash so that this guy doesn’t have to tap his small fortune over at Morgan. BWAH

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avatar Jonathan April 13, 2011 at 2:43 pm

Current T/C,

The issues I have raised have nothing to do with an MDO contract or requesting a cash withdrawal.

Distributions from my annuity accounts, 401A/403B, via “direct rollover” were rolled over into my IRA in a “distribution calendar year”. This is what is relevant, it has nothing to do with MDO or anything else. This is not allowed by the IRC! This whole issue is about an allegation that T/C violated the IRC and violated the law.

As a T/C employee you know, I hope, that distributions made in a distribution calendar year, are RMD. Pursuant to the IRC, the amount of the distribution is classified as RMD UNTIL the RMD requirement has been met – read the IRC, it is fully explained therein.

You should also know that RMD monies CAN NOT be rolled over into an IRA, right?

So, in my case, in a distribution calendar year, T/C rolled over distributions from an “interest only” account into an IRA. These monies by definition are RMD monies, agree? The IRC states very clearly that RMD monies can not be rolled over. The fact that the funds came from an interest only account do not mean that they are not RMD monies. ALL DISTRIBUTIONS IN A DISTRIBUTION CALENDAR YEAR ARE RMD UNTIL THE RMD REQUIREMENT HAS BEEN MET.(IRC) To repeat, in a distribution calendar year, which start with the year when one reaches 70.5 years of age, all distributions from an MDO account, from an interest only account, etc, are considered by the IRS to be RMD UNTIL the RMD requirement has been met. And these RMD monies CAN NOT be rolled over into an IRA – PERIOD! THATS IT! AND T/C DID ROLLOVER RMD MONIES FROM MY ACCOUNTS.

Another issue you raise is using the MDO option and RMD to liquidate an account. This is false and misleading and borders on consumer fraud if you put it out there to your clients.

RMD amounts are calculated by using a divisor that is based on a persons life expectancy at a given age. The goal of the federal government is to have taxes paid on all retirement monies before the owner dies. It therefore follows that if the calculation is correct, the RMD payouts from the retirement account should bring the account balance to zero just as the account holder dies. This is the ideal goal of the government.

So, what you are suggesting is basically dishonest. Using RMD from a MDO would liquidate the account just as the owner dies. NICE! I think that an account holder would like to liquidate the account long before he/she dies so that he/she can invest the monies at a higher rate of return and have a more fruitful retirement.

Hey Current TIAA-CREFF, the truth is like sunshine, the more light one shines on these issues the clearer they become and hopefully everyone out there who reads this message board will be inspired to do their own homework and shine more light on this issue, “for the greater good”!

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avatar Current TIAA-CREF April 13, 2011 at 4:08 pm

Jonathan,

I don’t even know where to begin……..no one can explain anything to you becasue you never clearly say what type of accounts you have with TIAA CREF and if you think it doesn’t matter than that is why you have so many problems becasue IT DOES MATTER! I know EXACTLY what i am talking about but in each message you leave you make things more and more confusing for ANYONE to understand. What you cannot do is take money out of a 403(b), IRA, 401(A), 401(K) and roll that money over to an IRA and have that specific transaction satisfy one’s RMD becasue the whole point of taking the RMD is to pay tax on the distribution and if you are moving the money from one pre tax account to another you are obviously not paying tax on the distribution. It doesn’t matter if you are 70 1/2 or 80 1/2 you can always do a direct transfer between tax deferred accounts but that amount WILL NOT SATISFY an RMD.

The earlier poster is correct, you need to explain the types of accounts you have or else no one is going to be able to explain anything to you and i think that is your intention, you don’t want anything explained you want to just rant and rave on here.

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avatar Jonathan April 13, 2011 at 5:24 pm

Current TIAA/CREF,

Am I correct in assuming that you work for T/C?

The type of account really has nothing to do with the issues I present. The Department of the Treasury, 26 CFR Parts 1, 31, 54 and 602, clearly states the following: A section 403(b) contract is also required to provide that it will satisfy the required minimum distribution requirements of section 401(a)(9), the incidental benefit requirements of section 401(a), and the rollover distribution rules of section 402(c).

In a distribution calendar year any money coming out of a 401A, 403B, etc, is RMD. You can not rollover RMD, again let me repeat, you cannot roll over RMD monies. You state that you can not take money out and roll it over. What you did not say was that the money that comes out is RMD and the regulations state that RMD CAN NOT BE ROLLED OVER. You are playing with words to confuse.

Again, your statement leads the reader to believe that the monies coming out of a 401A, etc, can not satisfy the RMD requirement if it is rolled over into an IRA. The correct way to phrase this is that the monies coming out ARE RMD monies and they can not be rolled over into an IRA.

Again, I am not talking about direct transfers, I am stating that T/C did a direct rollover from a 401A, etc, into an IRA in a distribution calendar year and reported it as such in my 1099-R. This is in violation of the IRC.

Tell me, what is the significance of the account type?

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avatar Jonathan April 13, 2011 at 3:44 pm

To all TIAA-CREF people out there,

It has come to my attention that TIAA-CREF employees may be using this message board to covertly promote their firms interests and to discredit some of the discussions posted herein. This activity would be classified as deliberate disinformation.

Some have identified themselves as T/C employees and this is fine, engaging them is a good thing. But my warning concerns individuals who claim to be clients of T/C and are not, they are in fact T/C employees. This is dishonest and has serious implications.

If there is anyone out there who believes this to be true, has suspicions, please respond. Remember the sunshine analogy.

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avatar neil April 13, 2011 at 4:01 pm

If you have any evidnce of that, that indeed has strong ramifications and deserves some sort of mini-investigation–like did these folks initiate on their on or did some higher-up ask/order them to post and under false pretenses. Yes, any evidence should be put forth on this as if true, and especially if any person in managment is involved, it is just as bad as giving false information regarding financs–likley more so, as higher-ups involved and ovrt lying as opposed to som/many cases of just mismanagemnt of finances and not overt deception.

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avatar BH April 13, 2011 at 3:56 pm

“the more light one shines on these issues the clearer they become… ”

I’ve given up on getting an answer to the question about whether you were withdrawing funds from your account before 70.5, From the little light that you show from your statement that “T/C rolled over distributions from an “interest only” account into an IRA”, I am going to answer the question myself and state that you had established an interest only distribution from a Traditional RA account long before a RMD was required, and that you had instructed that this distribution (which is not a rollover) be deposited into a IRA account.

YOUR mistake was assuming that when RMDs were required, the distribution of this interest would AUTOMATICALLY be considered funds which would satisfy the RMD requirement. They could not be counted because YOU, not TIAA, had designated that this distribution (not a rollover) be deposited into an IRA account.

So the answer to your question, “These monies by definition are RMD monies, agree?” is NO, not until YOU change where you want these funds to be deposited. You did not do this. TIAA is not responsible for making this change.

It is true that “The fact that the funds came from an interest only account do not mean that they are not RMD monies”, but the fact that YOU had designated that they go into an IRA, does mean that they are not RMD monies..

What you needed to do, when RMDs were required, was to instruct TIAA to send a distribution into one of your non IRA accounts. You could either continue depositing the interest only distributions into your IRA account (where they would not count towards your RMD requirement), or you could CHANGE the destination of those interest only payments into one of your non IRA accounts (where those payments would count towards RMD requirements).

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avatar Current TIAA-CREF April 13, 2011 at 4:11 pm

BH,

THANK YOU, it couldn’t not have been explained any better!

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avatar Current TIAA-CREF April 13, 2011 at 4:20 pm

Jonathan,

Do we really need to address the Muni issue again? Retirement accounts………..muni’s have ZERO advantage in retirement accounts. Also, even if an individual had hundreds of thousnads of dollars in after tax investments their income would also be a factor in determining the advantage of Muni’s because if someone were in a low income tax bracket AND had hundreds of thousands in after tax investments that combination would not provide a big advantage to investing in Muni’s.

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avatar retired prof April 13, 2011 at 5:02 pm

Jonathan, I am who I say I am–a retired professor. If I worked for TIAA-CREF, I would certainly be man enough to admit it. Just because I’ve had a good experience with TIAA-CREF, I don’t think you should assume that I’m an employee of TIAA-CREF. I shouldn’t need to send you proof of such–please just trust me that I am a retired professor.

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avatar Jonathan April 13, 2011 at 5:03 pm

Hey BH,

Admit it, you are a T/C employee – well, are you? You know too much not to be. Tell everyone on this message board, you are a T/C employee whose job it is at T/C to post disinformation here.

Post disinformation? Gee, do you deny it?

You state THAT THE DISTRIBUTIONS WERE NOT RMD AND WERE NOT ROLLOVERS BECAUSE I HAD MADE THE REQUEST TO DEPOSIT THE MONIES IN THE IRA …….

Like I said before, all disinformation. “Not rollovers”, did you say that? My T/C 1099-Rs clearly state in black and white that the monies that went into the IRA WERE ROLLOVERS ! The documents clearly identify the monies as rollovers.

What I request does not allow T/C to violate the law. If I requested that I only wanted 10% withheld when the law states 20%, would T/C do it? NO! The law is the law. You, T/C has to follow the law and the law says that RMD can not be rolled over into an IRA in a distribution calendar year.

It’s not about what I did not do, it’s about what you did, about what T/C did. Well, tell me, do you work for T/C? Is this your job responsibility, going on line all day to confuse T/C clients and protect your employer?

T/C clients out there, I ask you, what kind of investment advisor, plan administrator, manager of your retirement funds, pays people to go on line and deceive you about who they are and what they do, and in the process, spread false information?

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avatar BH April 13, 2011 at 7:01 pm

Johnathan,

No I’m not a TIAA employee, just another one of those retired professors going on line, more like s hobby, trying to learn about and assist others with financial issues. Right now I’m beginning to have some regrets :-).

If I were an employee I would not have made the error you caught when I said that interest only payments going into an IRA were not a rollover….. they are. In my defense, most retirees I know take taxable interest only payments as a distribution to use for living expenses (as a substitute for, or delay of, annuitizing). Didn’t consider that some would “rollover” funds into an IRA, via interest only,… probably in order to avoid the withdraw restrictions of a RA.

However, your following statement indicates to me that you still cannot separate the responsibilities of TIAA from your responsibilities.

“What I request does not allow T/C to violate the law. If I requested that I only wanted 10% withheld when the law states 20%, would T/C do it? NO! The law is the law. You, T/C has to follow the law and the law says that RMD can not be rolled over into an IRA in a distribution calendar year.”

If you request TIAA to provide only 10% of the distribution required to satisfy your RMD needs, they are NOT violating the law if they only follow your instructions. For all they know you could have multiple IRA accounts at other institutions, where you will be withdrawing the additional funds necessary to meet the your overall RMD requirements. It is not their responsibility that YOU withdraw the proper amount from all your accounts.

Nor is it their responsibility to automatically change the destination of your interest only payments when you reach the age of 70.5. Indeed, I believe they would be violating the law if they did so without your expressed permission. So your interest only payments will continue to go into your IRAa, and not count as RMD, unless YOU change their destination. It is not unreasonable for someone to want to continue this interest only”rollover”, in addition to taking RMDs.

You are correct when you say that “…. the law says that RMD can not be rolled over into an IRA in a distribution calendar year.”, but what you are having difficulty with is that the program you signed up for, to “rollover” interest payments into your IRA, is a SEPARATE program from that of taking a RMD from your Traditional Account.

Since not only am I not a TIAA employee, I also am not a certified financial advisor. So take this information as simply my observations and opinions. Since you seem to distrust most of the people who disagree with you, I would recommend that you set up a session with a fee only financial advisor, who is familiar with TIAA programs, to verify the information we have given you. From my teaching experience, I suspect that any more discussions on this topic with you will be fruitless. So, in fear of being accused of providing more disinformation (thanks for the polite term), I will sign off from this discussion.

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avatar Jonathan April 13, 2011 at 10:28 pm

Please BH, let me make one last try at this.

First of all, the 10% and 20% example I used had to do with income tax withholding rules, not RMD – I apologize for the poorly worded example.

Back to RMD 101. In a distribution calendar year, all distributions taken are part of the RMD until it has been satisfied. Interest only payments taken as a distribution in a distribution calendar year are clearly RMD. There is no such thing as a distribution in a distribution calendar year that is not RMD. And because RMD monies are not allowed to be rolled over into an IRA, T/C does not require directions from me, they receive their directions from the IRC. Your statement that interest only payments not count as RMD is not a valid statement.
All payments made (distributions) from an interest only account in a distribution calendar year are by definition, RMD. Again, there is no such thing as an interest only rollover in addition to an RMD. ALL monies (distributions) in a distribution calendar year are RMD.

I’ve now said the same thing over and over again in different ways to make my point. Hope you now understand RMD and that you can not rollover RMD into an IRA beginning with the year when a person reaches 70.5, the so called “first distribution calendar year”.

And to add one last item, the “required beginning date”. This is April 1, in the year following the first distribution calendar year. By this date, you are required to satisfy the RMD requirement for the first distribution calendar year. It’s a three month grace period given by the IRS for the first year RMD must be taken.

And I should point out that the RMD requirement applies to ALL types of contracts, not just MDO.

I’m glad that you simply made an error and were not a T/C employee posting disinformation. I hope you continue with your hobby and continue to assist others – please, don’t have any regrets. Your intentions are quite honorable.

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avatar Current TIAA-CREF April 13, 2011 at 6:30 pm

it’s funny how Jonathan expects everyone to answer his questions yet won’t answer questions posed to him?

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avatar Jonathan April 13, 2011 at 9:52 pm

CURRENT TIAA-CREF,
No, it’s funny how YOU refuse to acknowledge that your job at T/C is to spread disinformation on the web. Well, do you work for T/C, yes or no?

I’m the T/C client, I am not answering questions, I ask them. I’m the victim, not you.

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avatar Current TIAA-CREF April 13, 2011 at 10:06 pm

I don’t think there is any doubt that i am a TIAA-CREF employee and i’ve never tried to hide that, i think i have actually said it in earlier posts.

I think it is pretty clear that you are not a victim, i think that you made the mistake of assuming TIAA CREF was going to process a transaction in a certain way and based on the fact that you never answer ANYONE’s questions on this message board be it a TIAA CREF employee or not.

There is not one shred of information that i have posted that is incorrect and I’m sorry that you refuse to listen to anything anyone tries to tell you.

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avatar Jonathan April 14, 2011 at 11:33 am

Hey Current TIAA-CREF,

If you do not object, I would like to address you as “TIAA-CREF Employee” going forward. I think this is a better description of who you are.

You are paid to respond to postings on this message board, are you not? It is part of your job responsibility, is it not?

To everyone out there that reads these postings, remember, I am the one who has been victimized by T/C. T/C via a DIRECT ROLLOVER, took my RMD monies, and placed them into my IRA. This is a fact, the 1099-Rs clearly document this.

The T/C employee’s defense to my allegation is that “I don’t answer his questions”. But T/C should be addressing my allegations, I should not be answering T/C questions – there are no questions to answer, the facts and the documents make very clear what T/C did with my distributions.

Back to RMD 101. There is no distinct monetary entity called RMD. RMD is a quantifier, RMD is not separate from “distribution”. RMD is just merely a MINIMUM distribution that needs to be taken in a calendar year during and after one reaches 70.5 years of age.

The year that one reaches 70.5 is defined by the IRS as the “first distribution calendar year”. The IRS requires that one take distributions in this year and all following years based on a formula that would deplete the account of all funds by the end of the account holder’s life expectancy.

For arguments sake, let’s assume the account holder (RMD requirements apply to all accounts) receives distributions in years before reaching 70.5 – NOTHING changes when the “first distribution calendar year” arrives. The only thing that is different is that the account holder is now required by the IRS to take a defined minimum amount of distribution – while the account holder can take more, he/she must take the required minimum. As in previous years, these monies received by the account holder are distributions but after 70.5 the minimum amount of the distributions taken is defined by the IRS.

AGAIN, an RMD is not something distinct and separate from distributions, it defines the amount of the distribution that must be taken in a calendar year during and after one reaches 70.5
I should also add that if an account holder had not been taking any distributions prior to reaching 70.5, the IRS requires that he/she take at least the required minimum when reaching 70.5 and every following year so that the account is depleted by the end of the account holders life expectancy.

The IRS also specifically requires that this distribution, the required minimum amount as defined by a formula, SHALL NOT be rolled over into an IRA.

What T/C did to me: My distributions were rolled over into my IRA before I reached 70.5 – this did not end during my “first distribution calendar year” as it should have. In the year that I became 70.5, my distributions were subject to the RMD rules and regulations – this is NOT something I have to notify T/C about – they knew this, and they continued to roll over these distributions.

So,in 2010 when my RMD requirement started, T/C changed nothing, I still received distributions but these distributions were now subject to RMD. And monies that are subject to RMD rules, CAN NOT be rolled over – it’s that simple.

To “T/C Employee”: Cite the Section of the IRC (Internal Revenue Code) that allowed T/C to roll over my distributions into my IRA during my first distribution calendar year.

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avatar retired prof April 14, 2011 at 11:48 am

Jonathan, yesterday, I had decided to disassociate myself from this particular thread because it seemed to be going nowhere. But then I got a thought that is probably not relevant to your situation, but I thought I’d share it anyway. Recall that in 2009 the Feds suspended RMD for one year. I know 2010 was your first distribution year, but one would have had until April 1, 2010, to take the 2009 RMD. Could this have played a role in your situation?

Secondly, if TIAA-CREF did in fact make an error, what attempts have been made to have it corrected? Why don’t you use the e-mail service that you will find on the TIAA-CREF Web page (under Contact Us) to see if someone can “fix” your situation. At least you can have an ongoing dialog with the same person over several e-mail sessions. I’ve found the TIAA-CREF e-mail service to be excellent. I’d avoid the phone. Perhaps the person you get connected with can help you; and if that person can’t, perhaps someone else in that office can.

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avatar retired prof April 14, 2011 at 12:48 pm

Jonathan, you might find some of the information in the following link helpful, such as the information about correcting IRA and rollover mistakes. link

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avatar Jonathan April 14, 2011 at 3:20 pm

Retired Professor,

Thought this was interesting:

Obviously, TIAA-CREF is not some fly-by-night Wall Street outfight but often regarded as among the cream of FINRA’s member firm crop. As such, I was taken aback when I noted that the Financial Industry Regulatory Authority (FINRA) had just posted an Acceptance, Waiver and Consent (AWC) settlement involving TIAA-CREF Individual & Institutional Services LLC.

According to the AWC, TIAA-CREF failed to
report quarterly statistical and summary information to FINRA regarding a substantial number of customer complaints;
establish,maintain and enforce a supervisory system reasonably designed to identify, capture, analyze and report customer complaints that are required to be reported pursuant to NASD Rule 3070(c);
put adequate systems and procedures in place to ensure that all customer complaints were identified and forwarded to the appropriate firm personnel, adequately train all personnel who might potentially receive customer complaints regarding proper handling of complaints, and
ensure that sufficient guidance was given to personnel who were responsible for reviewing complaints to determine which complaints were reportable.
Although the imposed sanction of a Censure and a $100,000 likely underscores the relatively minor nature of the misconduct, it is still an eye opener to see such a highly regarded member firm cited for failing to properly intake customer complaints and to report same.

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avatar retired prof April 14, 2011 at 9:48 pm

Jonathan, didn’t this happen over a year ago, specifically reported in January 2010?

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avatar Ex-T/C April 14, 2011 at 4:28 pm

I have resisted chiming in on this discussion, but no more.

First of all, let me state I am NOT a T/C employee. I used to be, but I can assure you that I have no interest in distributing any kind of T/C propaganda. Back in the day, I did consult thousands of T/C participants on plan rules, including RMD. It’s been awhile, though.

The simple rule of RMD is this: The owner of a qualified tax-deferred vehicle (403b, IRA, whatever) must take a RMD payment by April 1 of the year following the year in which he/she turns 70.5. This means if you turn 70.5 in 2010, you have until 4/1/11 to take your 2010 RMD. You would then have until 12/31/11 to take your 2011 RMD. The decision to take one RMD in 2010 and one in 2011 vs. taking two in 2011 is usually a matter of preference related to taxes.

The sticking point here seems to be the definition of the word “distribution”. The kind of distribution the IRS has in mind for an RMD is “taxable”. That means literally removing the funds from the qualified retirement product and taking the funds as cash. When you do that, you pay taxes on the amount removed.

However, the IRS does not deny you the right to move funds around from one qualified account into another. That’s a rollover. Let’s say you had an IRA in a financial services company that you no longer liked (we’ll call it “TC”). However, it’s 2010, and you just turned 70.5. You want to roll over your funds to a better company, called MS. According to Jonathan’s understanding of the rules, this could not be done without first taking your 2010 RMD. I do not believe this to be true, since you legally have until 4/1/11 to take that taxable distribution. The IRS can not require you to take that taxable distribution just because you want to leave lousy TC for lovely MS. The rule states that you have until 4/1/11 to take the tax hit, period. Otherwise, you have a situation where the IRS is holding your funds hostage in a bad company and if that company were to do something, say, fraudulent, it would be an ugly situation for the IRS.

This is why a “rollover” is not the same thing as a “distribution” from the IRS’ standpoint. And it is also why poor Jonathan’s funds were allowed to continue to be rolled over to his IRA. Because they can. It’s perfectly allowable.

All the IRS really cares about is prying a taxable withdrawal out of your qualified account by 4/1/11 and beyond. What you do with your tax deferred money up to that point is not their business. And whether you choose to roll over funds or not doesn’t matter. The RMD amount will be based on the total aggregate amount of tax deferred dollars owned on 12/31/09 (for the 2010 RMD) and 12/31/10 (for the 2011 RMD). Where the money sits is irrelevant.

Now I reallize that TIAA’s lack of liquidity complicates the matter, but it does not change the basic rule. T/C was under no obligation to automatically convert Jonathan’s rollovers into taxable withdrawals. In fact, they can’t without his permission. And the IRS can’t force them. Everything has to be initiated by the customer. And believe me, I am no cheerleader for T/C. I rolled over as much as I could out of my old T/C accounts into my non-T/C brokerage IRA.

I invite anyone to analyze and update my possibly atrophied understanding of the rules, but I’m pretty sure they haven’t changed THAT much (although I’m in management now and you know how that goes).

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avatar Current TIAA-CREF April 14, 2011 at 6:56 pm

You are EXACTLY right. Thank you for being objective in your response.

And no Jonathan, my job is not to respond on obscure message boards. You are trying to taint readers opinions by spreading misleading information, everyone on here who has something positive to say about TC you say is giving false information or is a TC employee and it is a little childish.

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avatar Jonathan April 14, 2011 at 11:04 pm

Retired Professor,

Yes, more than a year ago, I think.

It was nice to hear from you today, glad you did not “retire” from your position on this message board.

I didn’t have the time to respond to your first posting today but I will tomorrow. I didn’t have the time tonight to respond to the T/C employee BUT I HAD TO! And now I think I have to respond to Mr. Ex T/C.

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avatar Jonathan April 14, 2011 at 11:10 pm

Hey Ex-T/C,

Good to hear from you again.

You got the first part right but the rest I believe is not correct.

2010 was my” first distribution calendar year”, I reached 70.5. For arguments sake lets just say that the tax-deferred vehicle is a 403B. And there is also an IRA.

In a distribution calendar year all distributions coming out of the 403B are RMD until the RMD has been satisfied. You can check the code and also read the example of this presented in the code.

Also, the code states that RMD can not be rolled over into an IRA.

I don’t think you roll over funds into another company, you transfer the funds. But I am not entirely sure and do not want to get off topic.

In my case, I have until 4/1/11 to meet the RMD requirements for 2010. The 4/1 date is called the “required beginning date”. BUT the fact is that all distributions made in 2010 are RMD and the IRS gives you a grace period to satisfy the RMD requirements the first year, of three months. BUT, again, the distributions made in 2010 are RMD.

Remember, I was taking distributions throughout 2010 and they are RMD. I merely had until 4/1/11 to satisfy the required minimum for 2010. However, all the monies distributed in 2010, my FIRST distribution calendar year, were the RMD for 2010.

AND RMD IN 2010 CAN NOT BE ROLLED OVER INTO AN IRA.

The issue is not T/C’s obligation to convert the rollovers into taxable withdrawals. The issue is that the rollovers are illegal. Again, in a distribution calendar year, RMD monies can not be rolled over.

Questions? It might be easier if I answer specific questions rather than write a narrative.

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avatar BH April 14, 2011 at 11:33 pm

“Questions? It might be easier if I answer specific questions rather than write a narrative.”

Amen! Hope that offer includes me. Let me try it out.

You said, ” I was taking distributions throughout 2010 and they are RMD”

Question: Are these the funds that T/C “mistakenly” rolled over into your IRA account?

avatar Ex-T/C April 15, 2011 at 12:12 pm

Jonathan,

From Investopedia (they’re usually right):

Rule 3: Transferring Your IRA in an RMD Year
Prior to 2002, many IRA custodians would not allow an IRA owner to transfer an RMD amount to another IRA custodian. The IRA owner would have been required either to distribute the RMD amount prior to the transfer or leave the RMD amount behind to be distributed by the applicable deadline. This is no longer required. As allowed by the final RMD regulations, you may transfer your entire IRA balance even if an RMD is due, provided you take the RMD from the receiving IRA by the applicable deadline.

Maybe your IRC handbook is pre-2002

avatar T/C Proponent April 14, 2011 at 7:59 pm

Actually, I wouldn’t be surprised if Jonathan isn’t a municipal bond broker at Morgan Stanley.and all of this stuff he has been posting, most of which is very difficult or impossible to follow, is just fluff.

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avatar Jonathan April 15, 2011 at 1:00 pm

T/C Proponent,

No, Jonathan is not a muni broker at Morgan Stanley. The concept of investing in Munis is presented as an alternative to a T/C annuity where your money is held captive and the investor has no control over what his money is invested in.

If you could, you would get your money or installments out of the annuity, pay the taxes which you do with RMD anyway, invest the money in municipal bonds of your choosing and have a steady tax free income stream until you die.

If you do the math, by taking funds out of the low yielding annuity, paying the income tax and receiving higher yielding tax free income from the reinvested monies, you not only have more income , but YOU CONTROL YOUR MONEY and you no longer are subject to the RMD rules which T/C forces you to do via something they call an MDO.

Maybe you believe that Municipal Bonds are all about to default. Then you can invest in other income producing items such as preferred stocks (there are many kinds), Master Limited Partnerships(MLP), Royalty Trusts. The point is that there are MANY investments with low risk that have much higher yields than a T/C annuity. Just look at the MLP – did you know that you pay no tax on the return you receive, it is deferred? Open your eyes and look around. Seek professional advice. Do your homework.

Or you can do business with T/C like the professor, who just 6 months after investing more than a $1M in an annuity, died and T/C got all the money. The estate sued T/C and lost, a contract is a contract. But I ask you out there, did T/C know about the woman’s terminal lung condition when they sold her the annuity?

Look at what T/C did to that poor professor, check it out on the internet. While T/C won the case, the point I am making is that this is what they did to her.

T/C had the woman invest in an annuity, over $1M. She had a terminal lung condition when she did this / did T/C know? She died 6 months later and T/C go all the money and the estate had nothing left to comply with the wishes in her will.

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avatar Jonathan April 14, 2011 at 10:35 pm

HEY TIAA-CREF EMPLOYEE,

Your job is well done, you put me down and you put this message board down but you do not address any of the concerns posted here. “Obscure message board”, boy!, you spend a lot of time on this obscure message board. Why? WHY !! Do the postings here create a potential threat to T/C?

Is your employer concerned about its past history, failing to report quarterly statistical and summary information to FINRA regarding a SUBSTANTIAL number of customer complaints?

“You are trying to taint readers opinions”, “spreading misleading information”, “you say … giving false information”, “childish”. Your response to my concerns is to attack me, T/C’s response to my concerns is to attack me.

You have never addressed the allegation that T/C illegally rolled over RMD monies. You have never cited the sections of the IRC that allows T/C to roll over RMD monies. You have never responded to my questions. Your only response has been that I have not responded to your questions. Well, I am the client and I am questioning your employer’s actions. You don’t respond to my concerns by asking me questions. AND YOU DON’T ATTACK ME ! My actions are not being questioned here, TIAA-CREF’s are.

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avatar TIAA member April 15, 2011 at 7:28 am

Most TIAA licensed agents (unlike WMA) know little about investing or tax rules. They are only trained on TIAA products and proceedures and told that all other investment companies are bad “commission oriented” places while TIAA is “not for profit”. They tount their TIAA fund as “the only safe and guaranteed fund” not knowing that other insurance companies can also offer fixed annuities and without the 10 year restrictions. TIAA does not take responsibility for the bad or misinformed information they give out. See their disclaimers.

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avatar Jonathan April 15, 2011 at 1:29 pm

TIAA Member,

It may be true that TIAA Agents know little if anything about tax rules. BUT, I have been dealing indirectly with T/C’s tax compliance unit. They are the ones generating the disinformation by citing regulations that are irrelevant. How do I know they are irrelevant? Because I can read english and they are clearly stated for all to read – there is nothing grey about them.

Send me your email if interested and I can send them to you via PDF.

While T/C does not take responsibility for bad or misinformed information, what if this “bad” information was sent out willfully to deceive? I must emphasize that I am not alleging any wrongdoing by T/C.

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avatar Jonathan April 15, 2011 at 1:06 pm

Hey BH,

I hope you receive this, there was no “reply” box under your post.
Of course the offer includes you !

Yes, the distributions taken in 2010 are the funds T/C rolled over into my IRA.

I hope that before you make any further statements you continue to ask questions and as I answer them, you will understand what the RMD rules are.
Let’s continue this question by question – thank you.

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avatar BH April 15, 2011 at 1:35 pm

Great! Now, was T/C taking these interest distributions prior to 2010, (when you turned 70.5?), and rolling them over into your IRA? i.e. Were they doing this in 2009, 2008, etc., (when you had not yet turned 70.5) ?

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avatar Jonathan April 15, 2011 at 1:53 pm

BH,

On 4/13/11 you went thru this BUT this time we will do it again, one question at a time, OK?

Answer: Yes

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avatar BH April 15, 2011 at 2:15 pm

Appreciate the response. Now, if T/C had not rolled over these funds into your IRA account (in violation of IRC rules), but instead had distributed them into a taxable account, your RMD requirement would have been satisfied by these distributions alone?

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avatar Jonathan April 15, 2011 at 2:44 pm

BH,

I do not know how to answer this question.

T/C really has no choice, the monies taken out of the retirements accounts, the distributions in 2010, ARE by definition required minimum distribution.

The issue is not satisfying my RMD requirement for 2010.

The distributions from these accounts in my first distribution calendar year or in any distribution calendar year, are RMD until the required amount has been satisfied.

The RMD requirement is specific for each account, separately. Some types of accounts can be aggregated and some can not be, so you have to look at the RMD for each account and satisfy it. So, the answer is yes, the distributions from each account in 2010 did satisfy the RMD for each of the accounts.

Again, T/C does not have the option of rollingover these monies, the regs are clear, RMD can not be rolled over. And it is fact that the monies / distributions that came out of the retirement accounts in 2010 are RMD.

avatar Jonathan April 15, 2011 at 7:10 pm

BH,

You should read the posting I just made addressed to Ex-T/C

Yes, the RMD requirement for 2010 would have been satisfied if the distributions had appeared on a 1099-R as a taxable event, a Code 7, a “normal distribution”, instead what T/C reported, Code G—Direct rollover of a distribution, not a taxable event.

avatar Jonathan April 15, 2011 at 1:18 pm

Ex T/C,

My situation did not involve a “transfer”, T/C did “rollovers”. And rollovers are very different from a transfer. The RMD rules state that RMD “rollovers” are not allowed.

And my rollovers were from 401A and 403B entities and they have different rules concerning “Aggregating”.

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avatar Ex-T/C April 15, 2011 at 2:47 pm

OK, let’s get to basics. There are three ways to move funds from one retirement vehicle to another without incurring a tax liability:

1. Direct Transfer. This is a transfer of qualified funds from one custodian to another, usually between like plans. So, for instance, let’s say you had a 403b at Employer A and it was adminstered by T/C. You leave employer A for Employer B, who has a 403b plan administered at Fidelity. If you wanted to move your T/C assets from T/C to Fidelity, you would do a 403b to 403b direct transfer.

2. Direct Rollover. This is just like a direct transfer except it typically involves moving plan funds to a Traditional IRA. Let’s say you wanted to move funds from your 403b at T/C to an IRA at Morgan Stanley, without taking possession of the funds. That is a direct rollover.

3. Rollover. Let’s call this a “classic” rollover. This is a transaction where you take physical possession of a check from your current qualified account and you physically deliver it (within 60 days) to the company of your choice for deposit into another qualified account like an IRA.

Classic rollovers have different rules that apply since you are receiving the funds in hand, and therefore have the option of cashing out and turning it into a taxable event. You may be correct that this kind of transaction would have strings attached in a RMD year, but that is irrevlevant since this is not the kind of transaction you have going on at T/C. What you have at T/C is more like a direct rollover, which is just like a direct transfer except it involves an IRA. It does not have to be between two different companies; it can be internal. The rules that I cited in my previous message applies to direct transfers AND direct rollovers, since they are essentially the same thing.

I think the problem here is that you know about rollovers and your know about direct transfers, but what you have happening at T/C is a hybrid of the two, a direct rollover. The rules of direct rollovers are not the same as classic rollovers, they are like direct transfers.

Unfortunately, industry lingo tends to use the term “rollover” to mean any kind of movement of funds from one qualified account to another, which causes confusion. I believe this to be the case here.

As cited before, you can do a direct rollover in a RMD year, even prior to taking out an RMD. That’s what is happening in your T/C accounts, and it is not illegal.

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avatar Jonathan April 15, 2011 at 7:00 pm

Ex-T/C,

Yes,you can do a direct rollover in a RMD year AS LONG AS YOU TAKE THE RMD FIRST. Read these paragraphs taken from the IRS:

You must report a direct rollover of an eligible rollover distribution. A direct rollover is the direct payment of the distribution from a qualified plan, section 403(b) plan, or a governmental section 457(b) plan to a traditional IRA, Roth IRA, or other eligible retirement plan

An eligible rollover distribution is any distribution of all or any portion of the balance to the credit of the employee (including net unrealized appreciation (NUA)) from a qualified plan, a section 403(b) plan or a governmental section 457(b) plan except: …….
An RMD (under section 401(a)(9)). A plan administrator is permitted to assume there is no designated beneficiary for purposes of determining the minimum distribution.

A–7: (a) General rule. Except as provided in paragraphs (b) and (c) of this Q&A, if a minimum distribution is required for a calendar year, the amounts distributed during that calendar year are treated as required minimum distributions under section 401(a)(9), to the extent that the total required minimum distribution under section 401(a)(9) for the calendar year has not been satisfied. Accordingly, these amounts are not eligible rollover distributions. For example, if an employee is required under section 401(a)(9) to receive a required minimum distribution for a calendar year of $5,000 and the employee receives a total of $7,200 in that year, the first $5,000 distributed will be treated as the required minimum distribution and will not be an eligible rollover distribution and the remaining $2,200 will be an eligible rollover distribution if it otherwise qualifies. If the total section 401(a)(9) required minimum distribution for a calendar year is not distributed in that calendar year (e.g., when the distribution for the calendar year in which the employee reaches age 701/2 is made on the following April 1), the amount that was required but not distributed is added to the amount required to be distributed for the next calendar year in determining the portion of any distribution in the next calendar year that is a required minimum distribution.

What T/C did was a direct rollover of funds that were NOT “eligible rollover distributions”. They were not eligible rollover distributions because a minimum distribution was required for calendar year 2010.

Like you said, you can do a direct rollover in a RMD year. Look at the IRS example. After the $5,000 RMD was satisfied, the remaining $2,200 is an “eligible rollover distribution” and can be directly rolled over.

I think a lot of this is semantics. We are not talking about “direct rollover”, we are talking about Direct Rollover of an “eligible rollover distribution”.

So, in my case, the distributions from the various retirement accounts were not eligible rollover distributions because the RMD had not been satisfied and it therefore follows that these monies could not be rolled over via a direct rollover. My 1099-Rs document all this.

Again, just to make my point, this is not about rollovers, it’s about ELIGIBLE ROLLOVER DISTRIBUTIONS.

I rest my case.

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avatar Ex-T/C April 15, 2011 at 9:35 pm

Jonathan,

Thank you for cutting and pasting all that interesting IRC language. I noticed you did the same in a previous post regarding T/C’s issues with complaints resulting in a $100,000 fine. I remember reading that article, word for word, months ago. I even knew the guy who triggered the investigation.

Anyway, I’d like you to focus on the very first part of the IRC language:

“An eligible rollover distribution is any distribution of all or any portion of the balance to the credit of the employee (including net unrealized appreciation (NUA)) from a qualified plan, a section 403(b) plan or a governmental section 457(b) plan except: …….
An RMD….”

Let’s see, “a distribution of all or any portion of the balance to the credit of the employee”. “The credit of the employee”, hmmm, what could that mean? It means that the distribution was made payable to YOU. When the distribution is made payable to YOU, the IRS understands that YOU now have control of the funds, and can then either “rollover” the funds to another carrier, or, cash the check and pay the taxes. When YOU take the funds in YOUR name, the IRS states that YOU must deduct the RMD amount and pay the taxes, and then they allow you to rollover the balance.

In the case of a direct transfer/rollover, the check is not made payable to YOU. It is made payable to the receiving institution. That is why in the case of a direct rollover from Company A to Company B, it will not be made payable to “Jonathan”. It will be made payable to “Company B FBO Jonathan”. FBO stands for “For Benefit Of”. YOU cannot cash that check. Since you cannot cash the check, it is still not considered a distribution “to the credit of the employee”. Everything you pasted after that, including the example, does not apply.

I guess I will have to re-cut/paste my previous e-mail regarding the final RMD regulations as they apply to rollovers in a RMD year:

Rule 3: Transferring Your IRA in an RMD Year
Prior to 2002, many IRA custodians would not allow an IRA owner to transfer an RMD amount to another IRA custodian. The IRA owner would have been required either to distribute the RMD amount prior to the transfer or leave the RMD amount behind to be distributed by the applicable deadline. This is no longer required. As allowed by the final RMD regulations, you may transfer your entire IRA balance even if an RMD is due, provided you take the RMD from the receiving IRA by the applicable deadline.

Case closed.

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avatar Jonathan April 15, 2011 at 11:32 pm

Ex-T/C,

Here is an example that sums up my situation with T/C:

Question: 
An 80 year old individual has funds in a 401(k) account and a traditional IRA. She retired from the employer that sponsors the 401(k) plan as of January 1 of this year.
She rolled over a portion of her 401(k) balance to her traditional IRA on January 2 of this year, as a direct rollover. This was the first distribution from her 401(k) for the year.
How does that affect her RMD from her 401(k) account for this year? Can the RMD for the 401(k) be taken from the balance that remains in the 401(k)?
Answer: 
Under the RMD rule, the first amount distributed from a retirement account includes the account owner’s RMD. This includes direct rollovers from the retirement account. As such, the amount which was rolled over to the traditional IRA includes her RMD amount. As a result, the traditional IRA now has an excess contribution which must be corrected by her tax filing deadline, including extensions, in order to avoid the 6% IRS penalty. 
The following example illustrates:
Example
§ 80 year old individual’s 401(k) account has a balance of $400,000 as of December 31 of last year
§ She is required to use the uniform table[1], which indicates a life expectancy of 18.7
§ Her RMD for this year is $21,390
§ She rolled over $200,000 from the 401(k) to her traditional IRA on January 2 of this year.
§ She did not take the RMD before completing the rollover.
The result:
Because she did not take the RMD before the $200,000 was rolled over to the IRA, the RMD of $21,390 is included in the $200,000. This means that the RMD was already satisfied for the 401(k) when the rollover amount was distributed from the 401(k). However, the rollover of the RMD has created an ineligible rollover of $21,390 to the IRA. This ineligible rollover has in turn resulted in an excess contribution, which needs to be corrected by her tax filing due date for this year, plus extensions. If she files her tax return by the due date, she receives an automatic 6-month extension to correct the excess (that is until October 15 of next year for calendar year filers).

SO, IN MY CASE, T/C CREATED AN INELIGIBLE ROLLOVER THAT HAS RESULTED IN AN EXCESS CONTRIBUTION TO MY IRA.

If I did not understand this and did not take the proper corrective action, I would have been damaged by T/C’s transactions. In addition, T/C’s position is that they did nothing wrong – not true. And T/C defended their actions by fabricating excuses, blaming me, semantics, citing meaningless irrelevant regulations.

And now, CASE CLOSED !

avatar BH April 15, 2011 at 3:44 pm

Jonathan

Whoa, too much information. We ran out of nesting space on our thread, so have to start a new one.

Think you did answer my question with, “So, the answer is yes, the distributions from each account in 2010 did satisfy the RMD for each of the accounts.”

But to clarify, the exception was that the distribution from your T/C account did not satisfy the RMD requirement for that account, because it was rolled over, rather than being distributed. However, if they had distributed, rather than rolled over the funds, my question was: Would this have satisfied your overall RMD requirement? (I’m assuming here that your overall RMD requirement was not met for 2010 and that the problem was due to T/C’s error).

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avatar retired prof April 15, 2011 at 8:38 pm

Jonathan, wasn’t it your responsibility to have your 1099-R corrected? To illustrate, in 2010, I had a callable CD that the financial institution called. However, when I received my 1099 in early 2011, I noticed it displayed a penalty for early withdrawal. I didn’t do an early withdrawal to deserve the penalty. I would have preferred that the institution not call the CD (I preferred the higher interest rate I was receiving before the CD was called more than the rate I received after it was called). I contacted the financial institution, and a new 1099 was readily prepared. No other person would have spotted the error had I not. I know of other taxpayers who have needed to have their 1099s corrected. It is a rather simple process and readily accepted by the financial institution if it was issued in error.

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avatar Jonathan April 15, 2011 at 11:38 pm

Retired Professor,

T/C would not correct the 1099-Rs. They stated that they were correct. But if you read my last posting, just above this one ending with “case closed”, you’ll understand what T/C did to me.

No one deserves to be treated like this – T/C needs to be held accountable.

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avatar Ex-T/C April 16, 2011 at 2:51 am

Jonathan,

I’m sorry, but your last post completely destroys any credibility you may have had on this board. You have said you are 70.5 last year, but now you speak of an 80-year old. It is obvious that you are not here to discuss the problems that TIAA-CREF has had, you just want free advice on how their plans work.

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avatar Jonathan April 16, 2011 at 11:59 am

Hey Ex-T/C,

Wise up! The 80 year old example was copied from the internet, it is a hypothetical – let’s stick to the issues here and stop attacking me. You know, the other person, Current T/C, also attacked me instead of engaging in the technicalities. Maybe you are the same person. Maybe not.

“Free advice on how their plans work”? Why do I care about how their plans work.

The 80 year old example is basically my situation – well, what’s wrong with this hypothetical?

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avatar Ex-T/C April 16, 2011 at 9:38 pm

Jonathan,

FYI, you only get to “rest your case” one time.

Our discussion/debate centered on the legality of the transaction in question, i.e., the transfer of funds from the interest only account to the IRA. You showed me the IRC language that was at the heart of your argument. It did not take me long to see the fundamental flaw in your position. In fact, I had been looking for the citation that would open your eyes to your misunderstanding of the RMD rule we were discussing. You provided it. This debate is over.

If you wish to continue this obsession, I suggest you petition the IRS for a private letter ruling. Bernard Wolfman over at Harvard did it in the 90′s and actually got T/C to change one of their policies as a result.

Alas, you are no Bernard Wolfman.

Also, I am not the same person as Current TIAA. Who are you, Charlie Sheen? Starting to sound like it.

You question my comment that you are looking for free advice, and in your next breath you ask me to analyze your “hypothetical” and comment on it. Go find yourself a tax advisor and pay for it.

As I have stated, I am no cheerleader for T/C. However, although I may disagree with the direction of the company, I do not doubt the integrity of it’s employees, many of whom I still know. You have suggested that the company pays its employees to go online to spread misinformation. That may be the only thing more delusional than your interpretation of the tax code.

I’m sure this post will generate another frenetic post from you, but I won’t be reading it. As Retired Prof implied, this is getting tedious.

Bye.

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avatar retired prof April 16, 2011 at 7:40 am

Jonathan, why did you throw an example at us that differs significantly from what you have been saying all along? That just adds more confusion to your dealings with T/C; and as Ex-T/C says, it “destroys any credibility you may have had on this board.” I’m glad you are “closing your case.”

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avatar Jonathan April 16, 2011 at 12:10 pm

Retired Professor,

I said in my post, “here is an example”, I didn’t say I was the 80 year old. I think Ex-T/C drinks Cool Aid or he is affiliated with T/C.

The 80 year old example DOES NOT differ at all from my situation, it is my situation. AND IT CAME FROM THE INTERNET, check it out, do a search.

Remember, I am not here to develop credibility on a message board. I am here to present FACTS so that others may understand what T/C is doing. My facts speak for themselves and like I have stated in many of my posts, DO YOUR OWN HOMEWORK, don’t take my work for it. Do your own homework!

My “case” is still open and I will post developments here.

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avatar retired prof April 16, 2011 at 1:03 pm

Jonathan, if you had been one of my students when I was teaching, I would have had to give you a grade of F in my course (university policy) because of your plagiarized example without citing the source. I would have had no choice even if you had had a grade of A up to the point of plagiarism.

I found the example (word for word) at http://www.retirementdictionary.com/faqs/761/rmd-cannot-be-rolled-over-and-must-be-taken-other-distributions , But what about the last sentence in the Internet article that reads as follows (taken from the source in the link cited in my last sentence, which you did not include in your earlier post: Following is the sentence: “The RMD for the IRA is a separate issue and must be taken from the IRA by the deadline (December 31).”

Also, in your post of April 15, 2011, at 11:32 p.m. to this board, you said the following:

“If I did not understand this and did not take the proper corrective action, I would have been damaged by T/C’s transactions. In addition, T/C’s position is that they did nothing wrong – not true. And T/C defended their actions by fabricating excuses, blaming me, semantics, citing meaningless irrelevant regulations.”

This is the first if your posts I can recall in which you say that you were able “to take corrective action” and that had you not done so, you “would have been damaged by T/C’s transactions.” Until I read this sentence, I was under the impression that you were continuing to be wronged by T/C and that is why you keep posting messages to this board regarding this issue But according to your statement you were able to take some type of corrective action. As a result, did you suffer any lingering negative financial consequences? And, if so, did you have legal counsel to guide you in their remediation?

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avatar Jonathan April 16, 2011 at 4:15 pm

Retired Professor,

Well, as far as the plagiarized example is concerned, when I copied it from the web site to a text program (I copy to text program, assemble all, and then copy the completed text file an paste here) I changed the text style to reflect that it came from somewhere else, but when I pasted it on this message board, the stylized text was gone and I was too lazy to do anything about it. Sorry. You never would have given me an F for plagiarizing anything, I never did.

“The RMD is a separate issue…”: In the example and in my case, the issue is that the rollover from the 401(k) in the example was an ineligible rollover, the rollover of the RMD from the 401(k) to the IRA, the $21,390. This $21,390 is the RMD from the 401(k). The RMD FROM THE IRA is something else. In a distribution calendar year, a required minimum distribution is required for all retirement accounts, IRA, 401(K), 401(A), 403(B), …….

So, the last statement(sentence) in the web example is the RMD from the IRA but the problem is the RMD from the 401(k), two different RMDs.

I am continuing to be wronged by T/C. Their tax compliance people state that they did nothing wrong, they refuse to correct the 1099-Rs. And so I have to attach a “statement” to my tax return and hope that the IRS accepts it, but this is not guaranteed. No I did not take corrective action, I only wrote an explanation for the IRS of what T/C did – hopefully this will suffice. But it may not, and then what?

I did consult with people at the IRS and followed their advice – but the next IRS employee may come along with a different take on this whole thing. But why shouldn’t T/C be held accountable for this whole affair? I allege that they did something wrong and they deny it.

One day it will be determined if they did something wrong and the results will be posted here. But my experience should serve as a warning to all those T/C clients out there that read these postings.

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avatar Neil April 16, 2011 at 1:10 pm

All this, it seems to me, is just way to technical for likely most all the rest of us–and seems to be going round and round, while the basic message of neding to be careful when dealing with tTC has already been long made. Two suggestions: Migh you folks.take this off- line and communcat with each other by email or phone. And if any resolution, lt us know. Or rmayb you folks or the moderator can arrange for a neutral third party to give an opinion and rsolve this. Thanks, Neil

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avatar Jonathan April 16, 2011 at 4:32 pm

Greetings, Neil:

While the information I have been presenting may be of a technical nature, it is meant to educate all who read this message board. It has to be technical so that the T/C defenders are not allowed to deceive the readers with misinformation as they have attempted to do since I have been posting here. And when they can not dispute the technical facts I present here, they attack me.

When you read the posts, even though you may not understand everything, you have the option of asking questions on this message board or go and do your own research on the web, do your own homework. Like I have said, don’t take my word for it, find the answers yourself.

The idea here, message board , is that ideas are freely exchanged and we can all learn something. I hope you have learned about the RMD rules and if you need to learn more, at least you now know where to go to get the answers. And you also learned that T/C employees not only monitor this message board, they engage with people who post here.

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avatar retired prof April 16, 2011 at 5:08 pm

Jonathan, I know readers are getting really tired of this thread, myself included, but here is the definition of plagiarism: :” to steal and pass off (the ideas or words of another) as one’s own : use (another’s production) without crediting the source.” I take this from the following source: http://www.merriam-webster.com/dictionary/plagiarizing . (Jonathan, note that this is my attribution).

And, yes, had you been a student in my class and had you taken someone else’s material and not given proper attribution of the material, that is plagiarism, clear and simple. Plagiarism is concerned with text (words), not text style or format. So many of today’s students seem to believe that they can simply cut and paste text they find on the Internet, claim it as their own, and not provide a proper citation. When caught, they suffer serious consequences because they violate academic integrity policies. When faculty plagiarize, they are severely punished. When textbook authors plagiarize, they sometimes have to pay a huge financial settlement to the person whose material was plagiarized. Politicians who plagiarize others’ work and include it in their speeches often have their campaigns derailed when caught. I point all of this out because I was confused about the reference to the 80-year-old woman, Ex T-C was confused, and I’m sure most others who might have read the content of that post were confused, although I suspect some people have quit reading these posts because they are tired of them. To those people, I apologize. But I thought Jonathan needed to be set straight on the concept of plagiarism.

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avatar Ex-T/C April 17, 2011 at 12:07 am

Retired Prof,

Thank you for your comments on plagiarism. It was something that gnawed at me a bit, which prompted me to comment a few posts back about my recognition of some of the writings on this board.

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avatar retired prof April 17, 2011 at 7:40 am

EX-T/C

Plagiarism has become a very serious issue in higher education, and the penalties for plagiarizing are very serious. I know this to be true because before I retired, I served on the committee that developed the current academic integrity policy used at the university where I used to teach. A student who receives a grade of F in a course for plagiarizing has a special identifier put on his/her transcript, and the second course grade of F he/she receives for plagiarizing results in his/her being dismissed from the university.

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avatar Luke Landes ♦127,495 (Platinum) April 17, 2011 at 9:40 am

I’m going to ask that this thread remain on the topic of TIAA-Cref.

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avatar Marcella McClure April 24, 2011 at 12:14 pm

This site has become very ugly with attacks on those who have had bad dealings with TIAA/CREF. I have started the TPA process for my Traditional. So far so good, everything is working as it should ONLY AFTER I GOT AN ADULT on the phone who could answer my questions and assume me that this would be rolled over into my TIAA/CREF IRA money market account. This is AFTER I was told I would have to accept a check and the wrong paperwork sent to me. I have been with TIAA/CREF as mandated by various employers over the last 30 yr. People start having trouble when they try to REMOVE funds. Years ago I’d tried for over a year to transfer previous employment funds out of TIAA/CREF–when this FINALLY occurred TWICE the amount I was allowed to transfer was send to another company !!!!!! That took only a few weeks to get fixed. Then when TIAA/CREF changed their software platform THEY LOST 10,000 of my money and MY STATE HAD TO HELP ME GET IT BACK. TIAA/CREF is simply NOT the company it used to be. This is verified by the growing number of Universities that are dropping TIAA/CREF from their retirement programs and I am requesting my state to GIVEN ME OTHER OPTIONS. I have filed appropriate complaints at the state and federal level on TIAA/CREF twice ! The day I retire is the day all funds that I can legally remove from TIAA/CREF will be moved. I will have to wait for the TPA transfer to run its course,just after I am 70 to get the rest of that money. Stop bashing people for their problems with TIAA/CREF. This site has become negative and shows that too many people have too much free time on their hands.

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avatar Mike O April 26, 2011 at 4:52 pm

I am a Financial Advisor and have been assisting my clients for the past 12 years in managing their money. My experience is TIAA-CREF has the most restictive (impossible) requirements to move money out for any reason. I have basically given up trying to assist any client in moving money out and into a consolidated account under my management. My last attempt was for a 50 year old terminally ill client. The only available withdrawal option was a period certain annuity with an internal rate of return of .78%. A 10 year payoff for someone who needed the money today? I really don’t understand how a financial institution get away with not releasing money to their clients upon request.Not one financial institution I’ve worked with over the past 12 years has restriction in place that are anywhere near those implemented by TIAA-CREF.

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avatar nancyelio April 26, 2011 at 8:43 pm

Mike: I’m terribly sorry to hear that. I hope you’ve managed to start a TPA out of the funds right away. I’ve actually never thought about it before as if I die before beginning the annuity, the funds will go to my beneficiary, either in a lump sum or in an annuity if he/she chose. For a person without a spouse or another source of income it is rotten to be going through this and having to fight for money that is hers. Most of us have a mixture of the restricted and liquid accounts there so we can tap into one if need be. However, the conditions of the Traditional account’s withdrawal in a case like that are set by the school, hospital, etc, where your client worked. Some institutions specifically allow lump sum withdrawal in case of terminal illness. Something isn’t right with that interest rate though, don’t know what you mean by “internal”. While it’s sitting there, it’s getting at minimum 3%. So sorry for your client.

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avatar Marcella A McClure April 26, 2011 at 5:29 pm

Thank you Mike O for confirming were the problems lies. This is a TIAA/CREF issue, not an issue about someone not understanding.

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avatar earlymusicus May 5, 2011 at 10:36 am

I worked for a local 4-year university for a number of years and participated in their retirement pension which was with TIAA-Cref. Now, 11 years after having left my job there (I moved onto a better job, but was laid off from that when the economy tanked in 2007), and in desperate financial straits due to a lay-off in 2007 and still not being able to get a full-time job, I need to access the $48,000 I have in a TIAA-Cref traditional, in order to avoid bankruptcy and/or homelessness. TIAA-Cref will only allow me to have $400 a month, spread out over 10 years! That is not even half of my monthly bills. I don’t know how I’m going to survive. They say that’s all they let me have. It’s MY MONEY, for God’s sake! I only have 31 months to get through until I’m age 62 and can start collecting Social Security. That $48,000 is more than enough to get me through to age 62, but I need to be able to have access to that money in an amount that will cover my monthly bills ($832) plus some money for food and gas for car, as well as being able to access that money in order to pay property taxes and if there are any emergencies that come up. This is killing me! It’s MY MONEY!!! They are driving me to bankruptcy and homelessness with this BS! How can they get away with this? I’m a 99er, long-term unemployed, an older worker and thus the employers don’t even want to look at me for a job, despite my good clerical skills. This is CRIMINAL on the part of TIAA-Cref! I need that money NOW. Do I have to get a lawyer on them? Do I have to sue? Or do I just have to be an obedient little schmuck and say, “Yes, massa TIAA-Cref. You can keep my money.”? The rep I talked to was so breezy and friendly – laughing and all. Yeah, this is real funny. I’m about to end up on the street because of them. That’s real funny. So it’s like I don’t even have that money. It’s useless to me. They can keep MY money and make tons of interest on it, but I can’t access MY money! This should be illegal! I had no choice in accounts when I participated in the pension plan, didn’t even know there were choices, wasn’t told anything beyond what the minimum percentage of my bi-weekly gross was that I could put in it. I need that money NOW – not when I’m 62. I need it NOW TO SURVIVE!!!

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avatar Ex-T/C May 5, 2011 at 4:16 pm

earlymusicus,

I am sorry to read about your very difficult situation. Unfortunately, the kind of account you have at TIAA-CREF has very strict limitations when it comes to how fast you can get the funds out. It’s written into the contract. Getting an attorney or suing won’t help. It’s been done before and it never works.

Your best bet is to write a letter to the office of the CEO (Roger Ferguson) requesting a “hardship withdrawal”. Use that term, it’s the lingo they use. Your letter will be forwarded to a department in the company that handles special requests (called Participant Relations). Include any documentation you may have that supports your story. They get many requests similar to yours that get turned down. However, I do remember every once in a while hearing about exceptions made due to extenuating circumstances. It’s probably your only chance.

Good luck…

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avatar another old guy May 5, 2011 at 5:08 pm

You’ve probably seen ads on TV for “getting your money now” by signing over your 10-year annuity payments in exchange for up front cash.

The institution where you accrued your retirement money may allow loans against the account balance, can’t hurt to ask.

Also, you might want to talk to a tax attorney. You may have options such as getting a divorce (of convenience) and having the court order you to give your $48k to your ex-spouse which would break the money out of your retirement plan immediately, etc.

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avatar lizzy May 5, 2011 at 7:53 pm

T-C loan availability, even if allowed under that plan, is based on the amount in one’s non-TIAA Traditional funds. Been there, done that. It requires conversion of 110% of the loan amount from those other funds TO TIAA-Traditional in a separate loan contract.

In other words, you can’t use existing TIAA-Traditional as collateral, and you can’t use existing other funds “as is” as collateral. Anyhow, if Earlymusicus had that much with T-C outside the Traditional fund, he could simply withdraw it (having terminated from that employer) and wouldn’t need a loan.

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avatar another old guy May 5, 2011 at 7:47 pm

Oh yeah, regarding asking for a hardship withdrawal – it might help to talk to your University retirement office, and see if they will join with you in requesting the withdrawal. After all, it’s their retirement plan, and their concurrence might improve your chances.

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avatar Rcompte May 31, 2011 at 4:38 pm

Glad to be able to help.

there is a law or chapter under IRS 403b , that would force any and all investment companies to send an amended copy of their original contract if any substantial changes occurred. All you may need to do is date , the time when these conversations or letters happened, and be able to send a copy to the IRS, of course you want to make sure that all liability lies with them before sending such letter.
I am not licensed I simply know how to read these things, and I believe many of us, regardless of the employer have a legitimate gripe with TIACREF , going forward.

I hope this information helps

Please keep me informed

Rafael Compte

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avatar The Doge of St. Louis June 2, 2011 at 4:30 pm

For what it’s worth, my wife and I have been trying to to a simple rollover of her TIAA-CREF funds (she retired over a year ago) to a qualified retirement account set up by our financial planner. Our first session on the phone with TIAA-CREF and our financial planner on line got disconnected. We got back in and arranged to have the proper paperwork sent to us for the transfer. We got the paperwork, filled it out as required, and sent it to our FP who then sent it to TIAA-CREF. A week later they called my wife and said they couldn’t transfer the funds unless she gave them the account number of the account our FP had set up for us – never mind that they had already been sent that information. Then they insisted that they’d have to send us a check and that taxes would be deducted from it – never mind that this isn’t supposed to happen for a rollover. Now they’re going to send us yet another piece of paper which we have to sign allowing our FP act on our behalf once again. I’m waiting to see what the next obstacle is.

By way of contrast I did this same thing with most of my AT&T 401K (managed by Fidelity) a few months ago and it went smooth as silk. Very good customer service and very helpful.

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avatar George Jones June 16, 2011 at 3:54 am

I was facing a Finacial hardship and i tried to get a withdrawel from Tiaa Cref to pay some bills. They
told me that i already received a payment earlier this year and the bills i faxed to them was not current
enough to receive a early withdrawel payment. One is a funeral bill and the other is a electric bill that is past due and was getting shut off. They refused to give me any of my money that i put in my account over the years. They dont care if you live or die as long as they get to use your money. Please dont put your money in Tiaa Cref and if you did Heaven help you.

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avatar Mimi June 17, 2011 at 9:01 pm

Please do not use TIAA-CREF Brokerage!!
I have a conservative account with TIAA-CREF Brokerage and found that within two days I lost about $10,000. When I signed up with the brokerage, the manager promised me to call me once a month and update me about my account, which he never did. About two weeks ago I called him and expressed my concerns about how they invested my money. He was very happy and said I should not tell them what to do. I felt I was lied to. Please do not use their service. They lied!!!

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avatar Mike Storm July 13, 2011 at 7:06 pm

I had an account with TIAA-CREF for many years but decided to take advantage of the security and protection of my principle in an Index Annuity product presented by california educators in Los Angeles. They were able to successfully move my 403(b) and I am averaging 5-7% per year. Tiaa-Cref only offers their traditional annuity which doesn’t really show good upward movement in your account (low interest rate). Good luck!

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