Questions and Answers about TIAA-CREF's Plan Record-Keeping Relationship with Bowdoin College
A story published by The Chronicle of Higher Education on April 21 discusses a decision by two institutions to end their relationships with TIAA-CREF following service difficulties that date back several years. The following Questions and Answers address those concerns.
Why did Bowdoin College end its relationship with TIAA-CREF?
While we cannot speak for Bowdoin, information on the college's benefits website reports that Bowdoin ended its relationship last year because of concerns over plan record-keeping services that TIAA-CREF provided. While we worked to accommodate Bowdoin's needs, administrators of its plan decided to move in another direction. Bowdoin was clear to note that the concerns had nothing to do with the economic downturn or TIAA-CREF's investment performance. A December 2008 statement from TIAA-CREF on Bowdoin's decision is available here (PDF).
What types of issues did Bowdoin experience?
Last year TIAA-CREF completed a transition to a new retirement plan recordkeeping system and service infrastructure to increase our capability, flexibility and speed in meeting clients' needs. During that complex transition, the demands of serving clients via two platforms at times produced service shortfalls, including delays by us in providing timely, complete reports to plan sponsors. As Bowdoin has acknowledged, administrative problems affecting individual accounts were remedied and no one suffered any financial loss.
Have the problems been corrected?
Since completing the transition and moving all plan and client accounts to our new service platform last year, our quality control measurements show that transactions and reporting are both accurate and timely.
In 2008 and again this year, we delivered 100% of plan reports to clients on time, and have continued to enhance reporting capabilities for plan sponsors. Initial feedback has been positive.
How are other clients responding?
Since last year, thirty institutions have consolidated their retirement plan record-keeping with TIAA-CREF. Nearly a quarter of a million people have moved their savings to TIAA-CREF during over the same period.
Should I be concerned with the accuracy of my TIAA-CREF account statements?
Our quality control measures and feedback we received from plan sponsors show that transactions and reporting are accurate and timely. Since completing the transition last year we also have continued to take steps to improve customer service, and achieve our goal of operational excellence on behalf of the individuals and institutions we serve.
If you experience a problem with your transaction or account, please contact a TIAA-CREF customer service representative at 1 800 842-2776. Representatives are available Monday through Friday from 8 a.m. to 10 p.m. (ET), and Saturday from 9 a.m. to 6 p.m. (ET). See additional ways to Contact Us. We will work to resolve your problem as quickly as possible.
Why did modernizing your systems appear to be such a challenge?
This was an unprecedented technological transformation for TIAA-CREF and essential to meeting our clients' financial needs. In some cases making improvements to our service infrastructure entailed replacing thirty-year-old systems and the software that runs them. Moving all of our plan and client accounts to one platform was a complex undertaking, but one that is already benefiting clients by allowing us to deliver expanded choices of funds and accounts, personalized advice and other advantages on a modern, reliable platform.
How is TIAA-CREF's financial condition in the current environment?
TIAA-CREF's remains strong amid the economic downturn. We're not immune from the market - last year our total assets under management were down about 17 percent – but many other financial companies experienced far steeper declines.
On the fixed income side, TIAA's sober approach to risk management has enabled our organization to minimize exposure to products that other financial companies offered that required those firms to take risks that may not have been in the long-term financial interest of clients saving for retirement. TIAA continues to hold the highest independent financial strength ratings.1 The crediting rate for TIAA Traditional has remained highly competitive.2
On the equity side, our variable annuity accounts and mutual funds have performed well relative to peers, according to Morningstar. Over the 3-year period, 68% of TIAA-CREF's funds and VA accounts have met or exceeded their Morningstar median. Over the 5-year period, 64% of TIAA-CREF's funds and VA accounts have met or exceeded their Morningstar median. The Morningstar median represents the midpoint of an index of comparable funds/accounts grouped by factors such as investment objective and asset class.
1A++, A.M. Best Company (as of 9/08); AAA, Fitch Ratings (as of 8/08); Aaa, Moody's Investors Service (as of 7/08); AAA, Standard & Poor's (as of 8/08) - the highest possible ratings from these independent analysts. 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.
2TIAA Traditional is a guaranteed annuity backed by TIAA's claims-paying ability, and guarantees your principal and a minimum interest rate (generally between 1 and 3%) plus it offers the opportunity for additional amounts in excess of the guaranteed rate. These additional amounts, when declared by the TIAA Board of Trustees, remain in effect for the "declaration year" that begins each March 1. TIAA has credited additional amounts of interest every year since 1948.
Please note that all TIAA-CREF investment products are subject to market risk.
TIAA-CREF Individual & Institutional Services, LLC and Teachers Personal Investors Services, Inc., members FINRA, distribute securities products.
You should consider the investment objectives, risks, charges and expenses carefully before investing. Please call 1 877 518-9161, or go to tiaa-cref.org for a current prospectus that contains this and other information. Please read the prospectus carefully before investing.
Annuity products are issued by TIAA (Teachers Insurance and Annuity Association), New York, NY.
© 2009 and prior years, Teachers Insurance and Annuity Association - College Retirement Equities Fund (TIAA-CREF), New York, NY 10017
