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 @flexo on Twitter and visit our Facebook page for more updates.
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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.
So this is just another way to push product?
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.
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.
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.
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?
Standard operating procedure.
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.
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.
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
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..
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!
I feel your pain. Hang in there, good luck.
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!
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.
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?
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.
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.
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.
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
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.
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.
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?
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.
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.
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!
I was referring to capital gains (+37% for the just concluded 1st quarter of 2011 — but entirely from the brokerage side).
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?
you’re joking, right?
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”.
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.
Do you the Wealth advisors know what they’re talking about?
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.
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.
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.
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
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.
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?
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).
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.
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
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.
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. .
“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.
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.
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).
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.
WMA,
Does this make T.C better than Morgan Stanley or Goldman Sachs? What is the significance of your information?
It’s much cheaper to invest with TIAA-CREF because they keep their compensation costs in line.
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!
TIAA member,
Do you think this is a good thing or a bad thing?
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.
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.
Well good luck being through with them, or ever seeing your money again.
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.
Interesting. What does this mean for the consumer of TIAA-CREF services?
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.
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.
… 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?
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.
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.
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…
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.
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.
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.
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?
“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).
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.
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?
“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..
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 ?
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.
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?
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.
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.
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.
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?
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?
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.
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?
“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. :-)
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.”
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.
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?
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
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”!
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.
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?
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.
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.
“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).
BH,
THANK YOU, it couldn’t not have been explained any better!
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.
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.
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?
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.
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.
it’s funny how Jonathan expects everyone to answer his questions yet won’t answer questions posed to him?
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.
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.
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.
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.
Jonathan, you might find some of the information in the following link helpful, such as the information about correcting IRA and rollover mistakes. link
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.
Jonathan, didn’t this happen over a year ago, specifically reported in January 2010?
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).
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.
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.
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.
“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?
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
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.
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.
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.
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.
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.
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.
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) ?
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
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?
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.
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.
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”.
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.
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.
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.
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 !
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).
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.
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.
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.
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?
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.
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.”
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.
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?
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.
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
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.
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.
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.
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.
I’m going to ask that this thread remain on the topic of TIAA-Cref.
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.
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.
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.
Thank you Mike O for confirming were the problems lies. This is a TIAA/CREF issue, not an issue about someone not understanding.
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!!!
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…
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.
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.
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.
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
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.
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.
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!!!
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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