On July 20, TIAA-Cref will be holding its annual participant meeting. There is an effort underway to encourage the company to be more socially responsible and accountable to its customers, and representatives will be attending the meeting to bring any common problems directly to the board’s attention.
Are you having customer service problems with TIAA-Cref? Please see the instructions below. Here are my past notable experiences with the company.
In March 2006, I scheduled a transfer from ING Direct to create my first SEP IRA on April 7, leaving enough time for the account to be created before the tax deadline. I noticed the problem the day after the account should have been created. The company did not create the account nor did they deduct funds from my ING account. There was still a week before the tax deadline, so I was not yet up in arms.
By April 18, 2006, the TIAA-Cref account had been created but they still did not deduct my funds. This was after the tax deadline, so I was very concerned that the funds would not be attributed to my 2005 SEP IRA. I had difficulties getting the correct department on the phone.
My 2005 SEP IRA was not funded until April 28, 2006, and my level of concern was much higher. I spoke to an account representative who assured me that even though they were late, my money would be applied to 2005’s tax year and I would get April 7’s price for the investment. My account information online confirmed this.
Fast forward to January 2007. I received my received my tax forms from TIAA-Cref which indicated my SEP applied to the 2006 tax year. I did eventually have this issue resolved, but it surfaced only one week after I reported that thousands of people were having problems with TIAA-Cref. Customers could not access their money, didn’t receive their payments, and couldn’t get in touch with any customer service representative who could fix the problems.
The company acknowledged the problems and attributed the mishaps to implementation of a new computer system. This excuse carried on as the problems did for at least a year, with updated in March and June 2007. Even today, visitors are still voicing their concerns with TIAA-Cref in these comments this year.
Most people’s problems were a lot more frustrating than mine, involving restricted access to money and missing payments from the company. Although I think it may be too late, Neil Wollman, an author who has been following TIAA-Cref’s activities as a socially responsible company over the past twenty-five years, is looking to speak up for consumers at the company’s annual meeting later this month.
If you are currently having issues with TIAA-Cref that you have not been able to resolve by going through the normal channels, please let me know by commenting here using an email address where you can be reached or email me directly at flexo at this domain name. I will pass your information along to Mr. Wollman who will speak to the board of directors on your behalf.
August 8 update: This is now confirmed.
This is unconfirmed but in the last few hours, two employees at TIAA-CREF have written to Consumerism Commentary to share the knowledge that workers in the the Charlotte, North Carolina office are being laid off by management at this very moment. The layoffs began on Monday and will reportedly affect 10% of the workforce.
There have been no media reports yet and no official word from the company. TIAA-CREF has been plagued with customer service problems for the last several years and changes in executive management during that time period has not solved the problems.
Many people, including public school teachers, have no choice but to invest with TIAA-CREF inside 401(k) and 403(b) plans.
The Charlotte Business Journal reported TIAA-CREF laid off 158 out of the city’s total 2,850 employees.
In January 2006, thousands of TIAA-CREF customers experienced service problems with the financial services firm when attempting to transfer funds, withdraw funds, or receive distributions.
The company publicly blamed its problems on a tough transition from one computer system to another. This was the reason for my missing contribution that occurred during this period.
Since then, TIAA-CREF recycled their executive team and brought in new leadership, but technical problems persisted. One year passed, and visitors to Consumerism Community continued reporting their woes. On May 31, 2007 (almost a year and a half after the first major reporting of the issue), Joann wrote:
TIAA CREF has serious customer service problems and the problems detailed on this page are quite typical. Their call center operators are completely ill-equipped to deal with most customer problems. They have been going through a major system conversion for the last several years, and almost all problems are blamed on technical glitches beyond their control. It’s frustrating for those of us who have depended on TIAA CREF and don’t have other options.
A supposed former TIAA-CREF employee of eight years added this commentary in July 2007:
Forty-two percent of the employees have been there two years or less. Morale is extremely poor. It is no wonder that service is poor. Don’t blame the employees. When the current CEO came on board several years ago, there was a need for change and improvement. He seemingly had a plan. However, the execution has been dreadful… Both individual and institutional customers are pulling out their assets. Those of us who can’t are very worried about the future. It is astounding that the Boards of Trustees have let this continue.
The Chief Technology Officer (perhaps the individual responsible for computer system transition problems) was forced out of the company by August 2007, but apparently computer issues are still to blame.
Today, Red wrote in to say the following:
About two years ago, TIAA-CREF failed to deposit my monthly withdrawals for two months. I was told they were transitioning to a new computer system and having trouble. Evidently, they are still using this very lame excuse, because when my monthly withdrawal and directs deposit didn’t happen for July, I called and was told TC is “transitioning to a new computer system.”
In the back of my mind, I wonder just how fast TC wants to get my (and other’s) retirement disbursement out. I mean, is it not to TC’s advantage to hold onto our money just as long as possible (due to computer glitches, of course)?
In January 2006, my contribution to TIAA-CREF was missing. I asked for my contribution to be on a certain date and for the funds to purchase shares in a mutual fund. The date came and went, and no purchase was recorded. It was several weeks before they were able to record my transaction. Since the original date, the price of the mutual fund had increased. When TIAA-CREF eventually recorded the transaction, it was backdated to ensure I received the agreed-upon price for the mutual fund shares.
But I wonder if the same holds true for distributions. If they do not sell an investment as instructed due to a “computer glitch,” are they earning interest or keeping a profit on the funds held by the broker until they finally release the funds to the customer?
Regardless, I am not surprised that customer service representatives are still using the “computer system transition” excuse. How many transitions should a company experience over two and a half years?
The last contribution to my 2007 Roth IRA was invested last Monday. Ever since my first Roth IRA several years ago, I’ve been maximizing the contribution each year by automatically investing equal amounts twice each month. One reason for using that technique, usually known as “dollar cost averaging” was to reduce risk. With the market going up and down throughout the year, sometimes money is invested at a good prices while other times the prices are not as good.
The other option (although it certainly is possible to mix the two strategies) is to invest the entire $5,000 — the maximum for 2008 — in one lump sum. That would give me the benefit of having the entire year for the full amount to grow. That is, if the stock market grows next year, the full amount will grow. If the market is shaky, then I will have put my entire faith in one date in the year.
Another reason I used the dollar cost average strategy each year is it wouldn’t damage my cash flow. I didn’t always have enough savings ready to be invested, and slow, regular investments allowed me to spread out the contribution over twelve months. While I’d like to keep a large amount of cash on hand for when I eventually make a down payment on a house, if I needed to, I could withdraw Roth IRA contributions without penalty for that purpose.
On a side note, I called to stop my 2007 Roth IRA contribution at TIAA-Cref, and I intend on investing my 2008 Roth IRA with Vanguard.
If you maximize your Roth IRA contribution, how do you do it?
At the end of the year, I will be ceasing my investment in TIAA-Cref funds for retirement. There are less expensive options at Vanguard, and TIAA-Cref’s customer service record has been spotty. I haven’t had any problems lately, but other people still face difficulties.
My original post about my problems with TIAA-Cref from almost two years ago still receives occasional comments. Here’s the latest comment, from Ed, with his experience.
After two months of wrangling with TIAA-CREF [to cash out], I was finally able to get a portion of my money. When I called to get the rest, the company told me that they had made a mistake and that it would be 12-15 business days before they could send out the rest of the funds. I knew from my previous interaction with them that they have a system in place to “walk through” payment requests and to get them processed in 3-5 business days. I pushed for the 3-5 day process.
To make a long story short, I told the customer service phone rep to send a message to his supervisor informing him that as soon as I hung up the phone I was going to follow up with the SEC regarding the complaint I filed against TIAA-CREF (I gave them the name of the staff attorney and the file number for my complaint).
You can file a complaint against TIAA-CREF with the SEC here.
The outcome was that the balance of my money was in my checking account in less than 24 hours. Furthermore, it was seemingly impossible to get anyone at the company to do anything that would help me or resolve my case. But after mentioning the SEC, I received at least two calls from TIAA-CREF employees following up — finally — on my case letting me know how sorry they were.
Ed’s success came from filing a complaint with the Securities and Exchange Commission and making sure the customer service representatives were aware of the full complaint information. This escalated his case, and he was able to get some results.
by Flexo on June 19, 2007
in Uncategorized
I am still receiving comments from people who are having technical issues with TIAA-Cref, even almost a year and a half after my first problem with their system in January 2006. I’ve recently received a notice from a reporter who is looking to follow up with this story. If you are still having customer service or technical problems when dealing with TIAA-Cref, please contact Renee Ferguson. Here is her message:
I am a reporter with eWeek magazine and have covered the issues at TIAA-CREF in depth. I was under the impression that many of the company’s systems upgrade issues were resolved, but looking at these posts that doesn’t seem to be the case.
If, as of June 2007, you are still having issues with TIAA-CREF and are willing to speak to the press, please contact me, either via email or by phone. I can be reached at renee_ferguson@ziffdavis.com, or 518.580.8515.
Consider that an open invitation for legitimate issues.
Yesterday, Vanguard announced they have simplified their account fees. Effective on Thursday, here is the new fee structure.
* All fund accounts with a balance of less than $10,000 will be assessed a yearly fee of $20.
Now that’s straightforward. In the old configuration, my recently-opened 2006 SEP IRA would have been charged $20 anyway. So why am I so happy with this change?
Because there are several ways the new $20 fee can be avoided completely by
* keeping each fund account balance over $10,000;
* maintaining total assets at Vanguard at $100,000 or more; or,
* signing up for electronic delivery of all documents, like prospectuses and statements.
With my assets at Vanguard totaling up to only about $3,000, it’s pretty clear which option was my choice.
I have a Roth IRA and another SEP IRA at TIAA-Cref. The problems I’ve had with this organization, while they have settled down except for a request from their lawyers to remove their logo from this page, are well documented. Most importantly, the mutual funds at Vanguard that match up with the mutual funds at TIAA-Cref have lower expense ratios.
The two funds currently invested in my Roth IRA at TIAA-Cref can theoretically be transferred to Vanguard because the balances are each above the $3,000 threshold. My 2005 SEP IRA isn’t above that level, but I may be able to combine it with my 2006 SEP IRA, already at Vanguard, if I don’t mind changing my asset allocation. The 2005 SEP IRA is invested in an international index fund, and the 2006 SEP IRA is invested in the total stock market index fund.
I’d rather have all of my accounts at Vanguard, so I’ll be looking to make this transfer in the next few weeks.
This could be good news for anyone just starting out with investment accounts. Schwab lowered the minimum starting balance to $1,000 from $2,500 (or $2,000 for IRAs)and removed below-the-minimum fees for all their investment accounts as long as at least $100 is deposited into the account on a monthly basis. (Source: BusinessWeek.)
I recently opened a new SEP IRA with Vanguard. I chose Vanguard this time around because my fee-less TIAA-Cref account has too many problems.
Vanguard requires a $2,000 or $3,000 initial deposit (depending on the fund), but a minimum balance of $5,000 per fund to avoid maintenance fees. I’ll have to bring that balance up in the new few months.
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