August 13, 2007
TIAA-CREF's Unique Advantages
Since 1918, TIAA-CREF has been helping to meet the financial needs of institutions and individuals in the academic, medical, research and cultural fields. Today, as we work to fulfill that mission in the 21st century, our strategic direction has been directly driven by the present and future requirements of those we serve.
We believe the combination of capabilities we have built over the past several years surpasses what is available from many other full-service financial services providers, none of whom share our nonprofit heritage or our unique mission.
We offer:
- Enhanced Products and Services: TIAA-CREF has transformed in order to deliver the broader investment choices and full range of product and services clients have demanded, along with objective, personalized investment advice and improved reliability.
- Long-term Investment Horizon and Choice: TIAA-CREF has a nearly 90-year track record of providing trusted financial services through our consistent, long-term investment approach.
- Dedicated Service to the Nonprofit Community: TIAA-CREF is the only large, full-service financial organization focused solely on serving institutions and individuals in the academic, research, medical and cultural fields.
- Exceptional Value: TIAA-CREF's non-profit structure enables us to provide quality products and services with expense levels that are among the lowest in the insurance and mutual fund industries, as measured by Morningstar Direct. Further, TIAA-CREF consultants receive no sales commission as part of their total compensation. Instead, they are compensated through a salary-plus-incentive program that emphasizes client service excellence.
- Staying Power: Our staying power is part of our commitment to participants' financial security to and through retirement. TIAA-CREF is one of the world's largest retirement systems, with $414 billion in combined assets under management (3/31/07). About a half million retirees currently receive $10 billion in annual income from us.
Investment Capabilities
We offer a diversified lineup of funds and accounts so that retirement plan sponsors can incorporate the options best suited to their employees. Choices include TIAA-CREF annuity accounts, mutual funds, and selected partner funds from other companies.
Among our offerings is a family of seven lifecycle funds with target maturity dates that enable investors to automatically achieve a sensible asset mix that changes over time as retirement approaches. These help meet employees' needs, regardless of their level of sophistication and interest in planning for their retirement.
We are one of the nation's leading managers of socially responsible investments. The CREF Social Choice Account is the nation's largest account of its kind for individual investors, with $8.91 billion under management as of March 31, 2007.
TIAA-CREF is America's largest institutional tax-exempt real estate investor, with a global portfolio of direct and indirect investment of $67 billion. The TIAA-CREF Real Estate Account provides a unique opportunity for individuals to invest in a real estate investment vehicle that offers return and risk characteristics that are usually available only to institutions and high-net-worth investors. Created in 1995, the account has not had a single negative quarter.
Recent awards and citations of our funds attest to our continued investment expertise:
- TIAA-CREF Mutual Funds ranked 7th overall in the 2006 Lipper/Barron's Mutual Fund Family Survey out of 67 fund families, based on an asset-weighted ranking system, over five major fund categories for the year ended 2006.
- TIAA-CREF Mid-Cap Value Index Fund earned the Lipper Fund Award, based on its consistently strong three-year, risk-adjusted performance for the period ending December 31, 2006. The Fund's institutional share class performance ranked number one in Lipper's Mid-Cap Value category.
- More than half of TIAA-CREF mutual funds and annuity accounts received an overall rating of 4 or 5 stars from Morningstar as of 5/31/07. Over ninety percent of our funds and accounts received at least 3 out of 5 stars. Note: Rankings cover all classes of funds provided by TIAA-CREF. Morningstar ratings for TIAA-CREF products are available at: http://www.tiaa-cref.org/
We also remain a leader in corporate governance and social responsibility. Once again we have strengthened our guidelines, as reflected in a newly revised edition of our Policy Statement on Corporate Governance.
TIAA-CREF Annuities and Mutual Funds
TIAA-CREF pioneered the use of variable annuity contracts to fund retirement investing in the 1950s, and we've stood nearly alone in the financial community in our commitment to maintain low costs, high quality and no sales pressure.
Unlike many of our competitors, TIAA-CREF annuities and mutual funds have no sales charges. We aim to keep expenses low, so that more of investors' dollars are working for them. We believe that the option to take lifetime income helps prevent individuals from outliving their assets. We offer several other income options including interest-only payments, minimum distributions, systematic withdrawals, and single-sum distributions, subject to plan rules.
Serving Our Clients Better
In order to deliver the expanded range of products and services, investment performance and choice and objective advice our clients have asked for, as well as streamlined record-keeping and asset management services, we have had to shift from an outmoded, rigid, record keeping platform designed for individual contracts to Open Plan Solutions, a more flexible, modern and plan-based system. During our transition to the new system, some participants have experienced service issues.
While the service issues have affected a relatively small portion of our participants at any point in time, we know that nothing short of fixing all problems and preventing their recurrence will satisfy anyone who has been inconvenienced. Further, we remain committed to compensating individuals for economic loss we have caused as a result of our service problems.
Our number-one priority is to ensure that all participants can rely on their transactions being processed in a timely manner, their account statements being accurate and queries or complaints responded to fully and quickly. We have accelerated our efforts to hasten service improvements and then to attain even higher standards.
Completing the systems conversions and unifying service delivery on a single, reliable, versatile retirement plan platform is essential to these efforts. At this point we have moved about 4,000 institutions representing nearly five million individual contracts and $290 billion of eligible assets to Open Plan Solutions. We are evaluating the pace of our conversion schedule for the remaining institutions in an effort to ensure that we can complete work with minimum disruption to participants.
Our employees are making great progress toward reducing backlogs and improving our systems and processes. We also are adding capacity to our overall customer service initiatives. For example, we recently opened a third telephone counseling center in Dallas, where we plan to add about 100 new consultants by year end. We are also working to assure all our consultants have the training and knowledge to impart the information and advice our clients expect. We recently upgraded and stabilized our telephone counseling center's technology infrastructure, and in the month of May answered 89% of calls within 30 seconds, against an industry standard of 70% of calls answered within 30 seconds.
Our goal is to deliver clients a range of advantages unmatched by many of our competitors, none of whom share our non-profit heritage and commitment to serving those who serve the greater good. We encourage you to contact your TIAA-CREF relationship team if you have any questions or would like additional information about our capabilities.
