Second Quarter Update from TIAA-CREF CEO Roger Ferguson
Roger W. Ferguson, Jr.
Dear TIAA-CREF Participant:
Volatility was the hallmark of the second quarter of 2010, as events from Europe to the Gulf of Mexico roiled markets and signs pointed to an uneven recovery for the American economy.
In an up-and-down market, TIAA-CREF continues to focus on helping you build lifetime financial security. Our goal is to protect your principal, help it grow, and provide advice and guidance to help you get through this period of uncertainty.
Keeping Things in Perspective
While financial markets have experienced some gains since June 30, they didn’t fare too well in the last quarter. The Dow Jones Industrial Average fell 10%, while the S&P 500 and NASDAQ each shed about 12%.
Troubles in Greece and other European debt markets created a general market anxiety about the resiliency of the global economic recovery.
The situation in the Gulf of Mexico added a new dimension to the prevailing uncertainty.
And U.S. economic indicators – such as employment, consumer confidence, and housing – displayed both bright spots and causes for concern that will likely last throughout this year.
But it’s important to keep things in perspective. If you’re investing for the long term, the second quarter of 2010 is just one milepost on a savings path that may encompass 160 quarters or more.
Investors with a long-term horizon – and that includes people approaching retirement with an appropriate mix of investments – shouldn’t feel pressured to change course in the face of short-term volatility.
Planning for the Long-Term
Just as your outlook is long-term, so is ours. We take a risk-based, long-term approach to managing your retirement savings.
Our philosophy has been tested over nearly a century, through numerous economic cycles. We are fully invested, we are diversified, and we are keeping our eyes on multi-year results, not short-term market fluctuations.
By offering access to a wide range of asset classes, TIAA-CREF gives you the opportunity to stay diversified, which can help to check downside trends and harness upside potential.
Our record of investment performance stands with anyone’s.
As of June 30, 91% of our variable annuities and mutual funds had an overall Morningstar rating of three (70%), four (16%), or five (5%) stars for the three-year period.1
We also strive to keep fees low, so that more of your money keeps working for you.
And we are committed to maintaining a stable financial footing, to meet our promises to provide you with retirement income. One proof point: Moody’s Investors Service recently reaffirmed TIAA’s Aaa rating with a stable outlook, which reflects the excellent financial security TIAA offers.2 (It should be noted that these ratings are subject to change and do not apply to variable annuities, mutual funds, or any other product or service not fully backed by TIAA’s/TIAA-CREF Life’s claims-paying ability.)
Advice and Guidance for You
Even with a long-term outlook, it’s smart to ask questions and periodically review your savings and investment plan.
TIAA-CREF’s noncommissioned advisors put your interests first.3 They are prepared to answer your questions, help you think through your goals, and develop a plan that’s uniquely suited to you.
To meet the needs of even more of our participants, we now offer Spanish-language advice sessions with TIAA-CREF professionals. And our new Spanish-language website makes key information available 24/7.
Call us at (800) 842-2252 to talk to an advisor or visit us on the Web to watch and listen to TIAA-CREF analysts discuss the latest market developments.
Retirement Security for All Americans
Over the past 92 years, we’ve learned a thing or two about planning for retirement, and we are sharing our knowledge with the public and with policymakers
The first step to enhancing retirement security is saving more. TIAA-CREF is sponsoring a contest on Facebook called “Raise the Rate,” which challenges individuals to personally save more and to submit ideas for how we can raise our national savings rate.
We’re also vocal about the need for all Americans to have access to guaranteed income in retirement.4
The Departments of Labor and Treasury are looking into ways to increase guaranteed income options. We shared our opinion that all workers should have a choice of a lifetime income option that offers low, clearly disclosed costs.
Looking Ahead, Earning Your Trust
Through all that we do, the benchmark by which we judge our success is the trust you place in us.
We were pleased to learn in May that TIAA-CREF ranked as the most trusted brand among 67 financial services companies in a survey conducted by Harris Interactive.5
As we look to the future, we will continue to focus on earning your trust and confidence. We will do that by listening to you, learning from you, and meeting and anticipating your needs.
Please contact us any time to let us know how we can help you pursue your long-term financial goals. In a turbulent market environment, you can rest assured that TIAA-CREF’s commitment to you is unwavering.
Sincerely,
Roger W. Ferguson, Jr.
President and CEO
1For each fund/account with at least a three-year history, Morningstar calculates a Morningstar Rating™ based on a Morningstar Risk-Adjusted Return measure that accounts for variation in a fund’s/account’s monthly performance (including the effects of sales charges, loads, and redemption fees), placing more emphasis on downward variations and rewarding consistent performance. Where applicable, Morningstar’s performance rankings are based on linked performance that considers the differences in expense ratios, while actual performance data shown does not reflect such differences. The top 10 percent of funds/accounts in a category receive five stars, the next 22.5 percent receive four stars, and the next 35 percent receive three stars, the next 22.5 percent receive two stars and the bottom 10 percent receive one star. (Each share class is counted as a fraction of one fund/account within this scale and rated separately, which may cause slight variations in the distribution percentages. Based on Morningstar data for share classes [not funds] that have completed one calendar year of performance.)
2TIAA has the highest rating for insurance financial strength from all four major rating agencies. Moody’s: Financial strength is Aaa with a stable outlook (as of 7/10). S&P: Financial strength is AAA with a negative outlook (as of 5/10). Fitch: Financial strength is AAA with a stable outlook (as of 4/10). A.M. Best: Financial strength is A++ with a stable outlook (as of 12/09). These ratings do not apply to variable annuities, mutual funds, or any other product or service not fully backed by TIAA’s/TIAA-CREF Life’s claims-paying ability.
3TIAA-CREF compensates advisors through a salary-plus-incentive program based on client service excellence and financial results. Advisors will only recommend products that help achieve our clients’ goals.
4Guaranteed income is based on the policy-issuer’s claims-paying ability.
5This year’s EquiTrend® Study was conducted online between January 12 and 21, 2010 among 19,708 U.S. consumers ages 15 and over. The total number of brands rated was 1,151. Each respondent was asked to rate a total of 60 randomly selected brands and each brand received approximately 1,000 ratings. Data were weighted to be representative of the entire U.S. population of consumers ages 15 and over on the basis of age, gender, education, race/ethnicity, region and income; data from respondents ages 18 and over were also weighted for their propensity to be online. The EquiTrend® study evaluates a range of attributes including: Equity, Consumer Connection, Commitment, Energy, Brand Behavior, Brand Advocacy, and Trust.
TIAA-CREF products may be subject to market and other risk factors. See the applicable product literature, or visit www.tiaa-cref.org for details.
Diversification is a technique to help reduce risk. There is no absolute guarantee that diversification will protect against a loss of income.
TIAA-CREF Individual & Institutional Services, LLC and Teachers Personal Investors Services, Inc., members FINRA, distribute securities products.
