TIAA Allocation advice wanted

Have a question about your personal investments? No matter how simple or complex, you can ask it here.
Post Reply
Topic Author
bill1962
Posts: 8
Joined: Wed Jan 13, 2016 3:04 pm

TIAA Allocation advice wanted

Post by bill1962 » Wed Apr 22, 2020 1:59 pm

Marrried 58 year old male living in NY (HCOL). Looking to keep working for another 8-10 years. Wife is looking to go PT in 2 years or so. Currently income $110K, no raises in sight. No debt, no plans to purchase a home. Cars are good for about 4-7 years each.

Jobs, mine is steady. Wife works for a financially shaky educational institution.

Wife’s TIAA – she gives 5% with no match.
My TIAA – I give 5%, they give 11%!

Combined we have in the low $300K in TIAA.
Putting $7,000 in each ROTH, $700 / month each. Currently about $30K in ROTHs.

5 months emergency fund in place.

I have 130K that I can move around and that is allocated as follows:

45% Vanguard Short-Term Bond (VBIRX)
55% TIAA Lifestyle 2035 (TLYIX)

Here are my options in TIAA. I recently rolled over funds from a previous college because I have better options here. What might be good options for allocations?

CREF Bond Market (QCBMPX)
CREF Equity Index (QCEQPX)
CREF Global Equities (QCGLPX)
CREF Growth (QCGRPX)
CREF Inflation-Linked Bond (QCILPX)
CREF Money Market (QCMMPX)
CREF Social Choice (QCSCPX)
CREF Stock Account (QCSTPX)
TIAA Real Estate (QREARX)
TIAA Bond Index (TBIIX)
TIAA Emerging Markets (TEQLX)
TIAA Equity Index (TIEIX)
TIAA Int Equity (TCIEX)
TIAA Large-Cap Index (TILVX)
TIAA Lifestyle 2010 (TLTIX)
TIAA Lifestyle 2015 (TLFIX)
TIAA Lifestyle 2020 (TLWIX)
TIAA Lifestyle 2025 (TLQIX)
TIAA Lifestyle 2030 (TLHIX)
TIAA Lifestyle 2035 (TLYIX)
TIAA Lifestyle 2040 (TLZIX)
TIAA Lifestyle 2045 (TLXIX)
TIAA Lifestyle 2050 (TTLIX)
TIAA Lifestyle 2055 (TTIIX)
TIAA Lifestyle 2060 (TVIIX)
TIAA Lifestyle Index 2065 (TRILX)
TIAA Small Cap Blend (TISBX)
Vanguard Long-Term Bond (VBLAX)
Vanguard Mid-Cap Admiral (VIMAX)
Vanguard Real Estate Admiral (VGSLX)
Vanguard Short-Term Bond (VBIRX)
Vanguard Treasury MM Fund (VUSXX)

theorist
Posts: 631
Joined: Sat Sep 28, 2019 11:39 am

Re: TIAA Allocation advice wanted

Post by theorist » Wed Apr 22, 2020 2:07 pm

You didn’t specify what type of asset allocation you want. Given your general situation, a fund that looks good to me is the TIAA 2035 fund that you’re already invested in elsewhere. It is basically a 70/30 equities/bonds allocation fund, with 30% of the equities in international. It has a low ER.

If that is too aggressive for you, dialing back to e.g. 2030 would alleviate some of that, and so forth.

Nothing better than having a well diversified set it and forget it fund to take care of most of your troubles! (Disclosure: I’m 49 and a lot of my retirement funds are invested in the Vanguard 2035 target date fund, so I practice what I preach.)

Topic Author
bill1962
Posts: 8
Joined: Wed Jan 13, 2016 3:04 pm

Re: TIAA Allocation advice wanted

Post by bill1962 » Wed Apr 22, 2020 2:09 pm

I guess that I am leaning towards 55% equities and 45% fixed income. I was on the 60/40 bandwagon until the market tanked.

tibbitts
Posts: 10759
Joined: Tue Feb 27, 2007 6:50 pm

Re: TIAA Allocation advice wanted

Post by tibbitts » Wed Apr 22, 2020 2:17 pm

I didn't look up the symbols and only know that expense ratios on even the same funds at TIAA are all over the map depending on the institution contract.

You didn't say what other assets you might have, such as a pension, but generally TIAA is about Real Estate and Traditional, because those are the investments you can't replicate elsewhere. But if you have no other accounts for equities then that's a consideration.

I would say there is virtually no difference between the allocations you mentioned. If anything the market tanking should encourage you toward a higher equity allocation

Topic Author
bill1962
Posts: 8
Joined: Wed Jan 13, 2016 3:04 pm

Re: TIAA Allocation advice wanted

Post by bill1962 » Wed Apr 22, 2020 2:48 pm

No, we have no other assets.

>>If anything the market tanking should encourage you toward a higher equity allocation<< This is true. I guess I overthought it.

Now I need to look into options outside of TIAA for additional retirement funds. Thanks for your help.
Bill

student
Posts: 4897
Joined: Fri Apr 03, 2015 6:58 am

Re: TIAA Allocation advice wanted

Post by student » Wed Apr 22, 2020 2:58 pm

Personally I would do about 55% Equity Index and 45% TIAA Traditional (with a mixture of liquid and illiquid kinds).

theorist
Posts: 631
Joined: Sat Sep 28, 2019 11:39 am

Re: TIAA Allocation advice wanted

Post by theorist » Wed Apr 22, 2020 3:00 pm

bill1962 wrote:
Wed Apr 22, 2020 2:09 pm
I guess that I am leaning towards 55% equities and 45% fixed income. I was on the 60/40 bandwagon until the market tanked.
Then I’d probably go with TLQIX, which is just above 55% equities now, but will glide down and through that in the next year or two.

Topic Author
bill1962
Posts: 8
Joined: Wed Jan 13, 2016 3:04 pm

Re: TIAA Allocation advice wanted

Post by bill1962 » Wed Apr 22, 2020 3:11 pm

student wrote:
Wed Apr 22, 2020 2:58 pm
Personally I would do about 55% Equity Index and 45% TIAA Traditional (with a mixture of liquid and illiquid kinds).
But the Traditional has the annuity portion (generally paid in 10 annual or 84 monthly installments) so I steered away from that.

Bill

student
Posts: 4897
Joined: Fri Apr 03, 2015 6:58 am

Re: TIAA Allocation advice wanted

Post by student » Wed Apr 22, 2020 4:00 pm

bill1962 wrote:
Wed Apr 22, 2020 3:11 pm
student wrote:
Wed Apr 22, 2020 2:58 pm
Personally I would do about 55% Equity Index and 45% TIAA Traditional (with a mixture of liquid and illiquid kinds).
But the Traditional has the annuity portion (generally paid in 10 annual or 84 monthly installments) so I steered away from that.

Bill
What you are describing is the illiquid version. There is a liquid version with no such restrictions. Generally those with names like Retirement Annuity is illiquid and those with names like Supplemental Retirement Annuity is liquid.

tibbitts
Posts: 10759
Joined: Tue Feb 27, 2007 6:50 pm

Re: TIAA Allocation advice wanted

Post by tibbitts » Wed Apr 22, 2020 4:12 pm

bill1962 wrote:
Wed Apr 22, 2020 3:11 pm
student wrote:
Wed Apr 22, 2020 2:58 pm
Personally I would do about 55% Equity Index and 45% TIAA Traditional (with a mixture of liquid and illiquid kinds).
But the Traditional has the annuity portion (generally paid in 10 annual or 84 monthly installments) so I steered away from that.

Bill
I'm not sure what you mean by "annuity portion" - every form of Tradiional has an annuity aspect to it, but the withdrawal restrictions vary. So you have the essentially 9-year version?

sawhorse
Posts: 3560
Joined: Sun Mar 01, 2015 7:05 pm

Re: TIAA Allocation advice wanted

Post by sawhorse » Wed Apr 22, 2020 5:15 pm

tibbitts wrote:
Wed Apr 22, 2020 2:17 pm
I didn't look up the symbols and only know that expense ratios on even the same funds at TIAA are all over the map depending on the institution contract.
This is very true. TIAA CREF plans vary hugely in their expenses and options. What R level is your employer? What version of TIAA Traditional does the plan offer?

User avatar
windaar
Posts: 391
Joined: Thu Mar 08, 2012 7:31 am

Re: TIAA Allocation advice wanted

Post by windaar » Wed Apr 22, 2020 5:21 pm

FWIW in my plan my 401(a) TRAD is illiquid and my 403(b) TRAD is liquid. My TRAD contracts are earning 4% tax free. I am assuming that next March 1 (when they determine interest rates) that figure will go down, but I like that they never lose money. I've had all of my fixed in TIAA TRAD for years.
Nobody knows nothing.

LK2012
Posts: 268
Joined: Mon Apr 30, 2012 4:42 pm

Re: TIAA Allocation advice wanted

Post by LK2012 » Wed Apr 22, 2020 6:03 pm

bill1962 wrote:
Wed Apr 22, 2020 3:11 pm
student wrote:
Wed Apr 22, 2020 2:58 pm
Personally I would do about 55% Equity Index and 45% TIAA Traditional (with a mixture of liquid and illiquid kinds).
But the Traditional has the annuity portion (generally paid in 10 annual or 84 monthly installments) so I steered away from that.

Bill
I think you may be confused about the rule about withdrawing from the least flexible version of the Traditional? If you are trying to transfer money from Traditional, it has to be done over 10 years. But if you retire, everything is annuitized, and the money would be withdrawn over a longer period of time. At least, that's my understanding of it. TIAA has advisors that you could consult to clarify an issue like that.

22twain
Posts: 2436
Joined: Thu May 10, 2012 5:42 pm

Re: TIAA Allocation advice wanted

Post by 22twain » Wed Apr 22, 2020 11:46 pm

LK2012 wrote:
Wed Apr 22, 2020 6:03 pm
If you are trying to transfer money from Traditional, it has to be done over 10 years.
This depends on the type of contract.
But if you retire, everything is annuitized, and the money would be withdrawn over a longer period of time. At least, that's my understanding of it.
Before the year in which you turn 72 (was 70.5 until Congress passed the SECURE Act late last year), you're not required to do anything with your TIAA Traditional. After that point, you must annuitize or take RMDs. My wife reached the age 70.5 milestone last year; she's taking RMDs for now, because we don't need to annuitize yet. I will do the same when I reach 72, unless our situation changes drastically in the meantime.
Help save endangered words! When you write "princiPLE", make sure you don't really mean "princiPAL"!

crefwatch
Posts: 462
Joined: Sun Apr 15, 2007 1:07 pm
Location: New Jersey, USA

Re: TIAA Allocation advice wanted

Post by crefwatch » Thu Apr 23, 2020 6:09 am

Bill, you didn’t include TIAA Traditional in your OP list. Is it available to you? It is a confusing product, almost too complex for this rhread. But with today’s low interest rates, it could be attractive. Some posters here must not be TIAA participants, or they would have used your ticker symbols to learn that your CREF options are R2 expense ratios.

It would be helpful to know the internal plan type at TIAA. Is it perhaps RC or RCP? Might be on the quarterly statement.

Do you want an automatic allocation with age, or do you want to reallocate yourself?

EDIT: Yes, when I said "in your OP list", I meant "Here are my options in TIAA. ..." I also am surprised that TIAA Traditional would not be included in an RC plan. My former employer has switched to RC, where TIAA Traditional has a 1% minimum and is currently paying 3% interest. (3.31.2020)
Last edited by crefwatch on Thu Apr 23, 2020 8:48 am, edited 1 time in total.

student
Posts: 4897
Joined: Fri Apr 03, 2015 6:58 am

Re: TIAA Allocation advice wanted

Post by student » Thu Apr 23, 2020 6:26 am

22twain wrote:
Wed Apr 22, 2020 11:46 pm
LK2012 wrote:
Wed Apr 22, 2020 6:03 pm
If you are trying to transfer money from Traditional, it has to be done over 10 years.
This depends on the type of contract.
But if you retire, everything is annuitized, and the money would be withdrawn over a longer period of time. At least, that's my understanding of it.
Before the year in which you turn 72 (was 70.5 until Congress passed the SECURE Act late last year), you're not required to do anything with your TIAA Traditional. After that point, you must annuitize or take RMDs. My wife reached the age 70.5 milestone last year; she's taking RMDs for now, because we don't need to annuitize yet. I will do the same when I reach 72, unless our situation changes drastically in the meantime.
This is my understanding as well.

Topic Author
bill1962
Posts: 8
Joined: Wed Jan 13, 2016 3:04 pm

Re: TIAA Allocation advice wanted

Post by bill1962 » Thu Apr 23, 2020 8:32 am

crefwatch wrote:
Thu Apr 23, 2020 6:09 am
It would be helpful to know the internal plan type at TIAA. Is it perhaps RC or RCP?

Do you want an automatic allocation with age, or do you want to reallocate yourself?
Actually, I do not have the TIAA Traditional in this account.

My plan type is an RC. Automatic allocation for now, then as I develop more knowledge I'd switch to allocating by myself.

Thanks!

tibbitts
Posts: 10759
Joined: Tue Feb 27, 2007 6:50 pm

Re: TIAA Allocation advice wanted

Post by tibbitts » Thu Apr 23, 2020 8:37 am

bill1962 wrote:
Thu Apr 23, 2020 8:32 am
crefwatch wrote:
Thu Apr 23, 2020 6:09 am
It would be helpful to know the internal plan type at TIAA. Is it perhaps RC or RCP?

Do you want an automatic allocation with age, or do you want to reallocate yourself?
Actually, I do not have the TIAA Traditional in this account.

My plan type is an RC. Automatic allocation for now, then as I develop more knowledge I'd switch to allocating by myself.

Thanks!
I wasn't even aware TIAA had employer plans that excluded Traditional - you are saying it is not an option or that you have not selected it?

Topic Author
bill1962
Posts: 8
Joined: Wed Jan 13, 2016 3:04 pm

Re: TIAA Allocation advice wanted

Post by bill1962 » Thu Apr 23, 2020 8:45 am

It's not an option. I just double-checked my account on the website.

bikechuck
Posts: 756
Joined: Sun Aug 16, 2015 9:22 pm

Re: TIAA Allocation advice wanted

Post by bikechuck » Thu Apr 23, 2020 10:08 am

bill1962 wrote:
Wed Apr 22, 2020 3:11 pm
student wrote:
Wed Apr 22, 2020 2:58 pm
Personally I would do about 55% Equity Index and 45% TIAA Traditional (with a mixture of liquid and illiquid kinds).
But the Traditional has the annuity portion (generally paid in 10 annual or 84 monthly installments) so I steered away from that.

Bill
As a 67 year old with money in TIAA traditional from one of my former employers I have half of my TIAA Traditional in an SRA (fully liquid) and half in an RA (subject to the 10 year restriction). I do not mind the ten year restriction at all because it is one of the features that allows TIAA to pay a good yield with more stability than a traditional bond fund.

Unless things change or I make a decision to annuitize some of these funds in my mid to later 70s I intend to hold both of these investments for the rest of my life. Beginning in 2021 I will start taking interest only distributions from both to provide a portion of my income needs.

Just don't let the non liquid traditional grow to more than X% of your portfolio and then the liquidity issues associated with the RA are not bad at all. You will need to define X based on your own situation and comfort level.

bikechuck
Posts: 756
Joined: Sun Aug 16, 2015 9:22 pm

Re: TIAA Allocation advice wanted

Post by bikechuck » Thu Apr 23, 2020 10:15 am

LK2012 wrote:
Wed Apr 22, 2020 6:03 pm
bill1962 wrote:
Wed Apr 22, 2020 3:11 pm
student wrote:
Wed Apr 22, 2020 2:58 pm
Personally I would do about 55% Equity Index and 45% TIAA Traditional (with a mixture of liquid and illiquid kinds).
But the Traditional has the annuity portion (generally paid in 10 annual or 84 monthly installments) so I steered away from that.

Bill
I think you may be confused about the rule about withdrawing from the least flexible version of the Traditional? If you are trying to transfer money from Traditional, it has to be done over 10 years. But if you retire, everything is annuitized, and the money would be withdrawn over a longer period of time. At least, that's my understanding of it. TIAA has advisors that you could consult to clarify an issue like that.
My understanding after several conversations with TIAA is that everything does not need to be annuitized at retirement. I have been retired for almost three years and I have not touched my investments in Traditional. I plan to take RMDs rather than annuitizing if my portfolio looks solid if and when I reach the age of 72.

student
Posts: 4897
Joined: Fri Apr 03, 2015 6:58 am

Re: TIAA Allocation advice wanted

Post by student » Thu Apr 23, 2020 10:45 am

bill1962 wrote:
Thu Apr 23, 2020 8:32 am
crefwatch wrote:
Thu Apr 23, 2020 6:09 am
It would be helpful to know the internal plan type at TIAA. Is it perhaps RC or RCP?

Do you want an automatic allocation with age, or do you want to reallocate yourself?
Actually, I do not have the TIAA Traditional in this account.

My plan type is an RC. Automatic allocation for now, then as I develop more knowledge I'd switch to allocating by myself.

Thanks!
Thanks for the info. I have never heard of a TIAA plan on its own products without TIAA Traditional. I now have an example.

student
Posts: 4897
Joined: Fri Apr 03, 2015 6:58 am

Re: TIAA Allocation advice wanted

Post by student » Thu Apr 23, 2020 10:47 am

bikechuck wrote:
Thu Apr 23, 2020 10:08 am
bill1962 wrote:
Wed Apr 22, 2020 3:11 pm
student wrote:
Wed Apr 22, 2020 2:58 pm
Personally I would do about 55% Equity Index and 45% TIAA Traditional (with a mixture of liquid and illiquid kinds).
But the Traditional has the annuity portion (generally paid in 10 annual or 84 monthly installments) so I steered away from that.

Bill
As a 67 year old with money in TIAA traditional from one of my former employers I have half of my TIAA Traditional in an SRA (fully liquid) and half in an RA (subject to the 10 year restriction). I do not mind the ten year restriction at all because it is one of the features that allows TIAA to pay a good yield with more stability than a traditional bond fund.

Unless things change or I make a decision to annuitize some of these funds in my mid to later 70s I intend to hold both of these investments for the rest of my life. Beginning in 2021 I will start taking interest only distributions from both to provide a portion of my income needs.

Just don't let the non liquid traditional grow to more than X% of your portfolio and then the liquidity issues associated with the RA are not bad at all. You will need to define X based on your own situation and comfort level.
This is similar to my plan when I retire in another 10-15 years (hopefully).

crefwatch
Posts: 462
Joined: Sun Apr 15, 2007 1:07 pm
Location: New Jersey, USA

Re: TIAA Allocation advice wanted

Post by crefwatch » Fri Apr 24, 2020 8:20 am

I see that the Contract Comparison sheet put out by TIAA uses this paragraph for RC and RCP plans:

"Enables the institution to have full control over the funding options in the plan, add or delete options and “map” assets to other funds."
(PDF file) https://www.tiaa.org/public/pdf/RC_Comp ... _8_fin.pdf

So it appears to me that the omission of TIAA Traditional is a decision of the employer using an RC plan. I brought up the option simply because the OP seems to have some interest in total risk in his portfolio. But apparently his HR Dept. or Investment Committee rejected TIAA Traditional.

LK2012
Posts: 268
Joined: Mon Apr 30, 2012 4:42 pm

Re: TIAA Allocation advice wanted

Post by LK2012 » Tue Apr 28, 2020 8:53 pm

22twain wrote:
Wed Apr 22, 2020 11:46 pm
LK2012 wrote:
Wed Apr 22, 2020 6:03 pm
If you are trying to transfer money from Traditional, it has to be done over 10 years.
This depends on the type of contract.
But if you retire, everything is annuitized, and the money would be withdrawn over a longer period of time. At least, that's my understanding of it.
Before the year in which you turn 72 (was 70.5 until Congress passed the SECURE Act late last year), you're not required to do anything with your TIAA Traditional. After that point, you must annuitize or take RMDs. My wife reached the age 70.5 milestone last year; she's taking RMDs for now, because we don't need to annuitize yet. I will do the same when I reach 72, unless our situation changes drastically in the meantime.
Thanks for the additional details.

talzara
Posts: 1017
Joined: Thu Feb 12, 2009 7:40 pm

Re: TIAA Allocation advice wanted

Post by talzara » Wed Apr 29, 2020 12:25 pm

tibbitts wrote:
Thu Apr 23, 2020 8:37 am
I wasn't even aware TIAA had employer plans that excluded Traditional - you are saying it is not an option or that you have not selected it?
student wrote:
Thu Apr 23, 2020 10:45 am
Thanks for the info. I have never heard of a TIAA plan on its own products without TIAA Traditional. I now have an example.
TIAA Retirement Choice contracts are different from the old TIAA contracts. Take a look at page 2 of the TIAA contract comparison: https://www.tiaa.org/public/pdf/RC_Comp ... _8_fin.pdf

For the RA/GRA/SRA/GSRA contracts, "TIAA Traditional, CREF Stock and CREF Money Market must be available for both contributions and transfers."

For the RC contracts, they are not required. The institution can choose whether or not to offer them.

User avatar
ResearchMed
Posts: 10279
Joined: Fri Dec 26, 2008 11:25 pm

Re: TIAA Allocation advice wanted

Post by ResearchMed » Wed Apr 29, 2020 1:48 pm

talzara wrote:
Wed Apr 29, 2020 12:25 pm
tibbitts wrote:
Thu Apr 23, 2020 8:37 am
I wasn't even aware TIAA had employer plans that excluded Traditional - you are saying it is not an option or that you have not selected it?
student wrote:
Thu Apr 23, 2020 10:45 am
Thanks for the info. I have never heard of a TIAA plan on its own products without TIAA Traditional. I now have an example.
TIAA Retirement Choice contracts are different from the old TIAA contracts. Take a look at page 2 of the TIAA contract comparison: https://www.tiaa.org/public/pdf/RC_Comp ... _8_fin.pdf

For the RA/GRA/SRA/GSRA contracts, "TIAA Traditional, CREF Stock and CREF Money Market must be available for both contributions and transfers."

For the RC contracts, they are not required. The institution can choose whether or not to offer them.
Is there any difference in the type(s) of institutions that can offer each of the types of contracts?

RM
This signature is a placebo. You are in the control group.

student
Posts: 4897
Joined: Fri Apr 03, 2015 6:58 am

Re: TIAA Allocation advice wanted

Post by student » Wed Apr 29, 2020 1:56 pm

ResearchMed wrote:
Wed Apr 29, 2020 1:48 pm
talzara wrote:
Wed Apr 29, 2020 12:25 pm
tibbitts wrote:
Thu Apr 23, 2020 8:37 am
I wasn't even aware TIAA had employer plans that excluded Traditional - you are saying it is not an option or that you have not selected it?
student wrote:
Thu Apr 23, 2020 10:45 am
Thanks for the info. I have never heard of a TIAA plan on its own products without TIAA Traditional. I now have an example.
TIAA Retirement Choice contracts are different from the old TIAA contracts. Take a look at page 2 of the TIAA contract comparison: https://www.tiaa.org/public/pdf/RC_Comp ... _8_fin.pdf

For the RA/GRA/SRA/GSRA contracts, "TIAA Traditional, CREF Stock and CREF Money Market must be available for both contributions and transfers."

For the RC contracts, they are not required. The institution can choose whether or not to offer them.
Is there any difference in the type(s) of institutions that can offer each of the types of contracts?

RM
This is just speculation on my part. Since TIAA Traditional guaranteed rate is lower in RC, I think this is TIAA attempt to lower the risk. As for the type of institutions, I do not know. University of Rochester has moved to the new system. https://rochester.edu/working/hr/benefi ... hanges.pdf Even Duke. https://hr.duke.edu/benefits/retirement ... al-annuity

crefwatch
Posts: 462
Joined: Sun Apr 15, 2007 1:07 pm
Location: New Jersey, USA

Re: TIAA Allocation advice wanted

Post by crefwatch » Wed Apr 29, 2020 2:08 pm

ResearchMed wrote:
Wed Apr 29, 2020 1:48 pm
Is there any difference in the type(s) of institutions that can offer each of the types of contracts?
RM
Contracts between TIAA and any institution are negotiated like any other contract. In recent years, legislation and regulation of (among other things) the Fiduciary Duty of plan organizers has changed what colleges (and other institutions) want from a retirement investing provider. TIAA has (I mean, since 1989) had to learn to actually compete with other providers. Lately, they have created a business of providing record-keeping for institutions that may not even have TIAA plans as options for their employees.

There has also been a gradual change in what the next generation of retirement investors want. For example, the word "annuity" has been so tarred in innumerable investment articles that reasonable, low-cost products like TIAA Traditional simply have no takers among the young. And as others observed, TIAA is smart enough to not be writing 3% minimum guarantees any more.

I don't believe that TIAA has any restrictions on contract negotiation that depend on the type of institution. It is true that the asset total at an institution can affect the share class (that is, expense ratio) of CREF Variable Annuity accounts. There are also variations in total expenses depending on the size and exact offerings at various institutions. In some cases, this is done by periodic rebates to either the overall plan expenses or to all participants in a plan. Those are called "Servicing Credits."

Under Herb Allison, TIAA tried expanding into serving profit-making businesses, but after his departure, they re-focused on the Not For Profit market, their original area.

But I think the simple answer to your question is, "No."

talzara
Posts: 1017
Joined: Thu Feb 12, 2009 7:40 pm

Re: TIAA Allocation advice wanted

Post by talzara » Thu Apr 30, 2020 12:52 pm

crefwatch wrote:
Wed Apr 29, 2020 2:08 pm
ResearchMed wrote:
Wed Apr 29, 2020 1:48 pm
Is there any difference in the type(s) of institutions that can offer each of the types of contracts?
RM
Contracts between TIAA and any institution are negotiated like any other contract. In recent years, legislation and regulation of (among other things) the Fiduciary Duty of plan organizers has changed what colleges (and other institutions) want from a retirement investing provider. TIAA has (I mean, since 1989) had to learn to actually compete with other providers. Lately, they have created a business of providing record-keeping for institutions that may not even have TIAA plans as options for their employees.
Retirement Choice is TIAA's competitor to Fidelity. RC is more like the Fidelity 403(b) than the old TIAA contract.

RA/GRA/SRA/GSRA contracts are individual contracts owned directly by the employee. The RC contracts are group contracts, so the investment options are under the direct control of the university. They can choose to replace a mutual fund and move all participant balances to a different mutual fund.

RA/GRA/SRA/GSRA contracts are a bundle of services. The costs of running the 403(b) plan were loaded onto the expense ratios of the TIAA and CREF annuities. The RC contracts are more flexible. A plan can charge a fee directly to the participants instead of relying on revenue-sharing.

The investment advisor for the Maryland Optional Retirement Plan reports:
When TIAA was first retained as an ORP vendor, the only contract available to the State was the Retirement Annuity (RA). These are individually-owned contracts or certificates that are controlled by plan participants. Because the contracts are controlled by the participants, the Board does not have complete flexibility over investment options and the ability to map assets to other funds.

...

Under the current individual contracts, all administrative fees are paid through revenue sharing from the investment line-up. Any revenue sharing in excess of TIAA’s 9.5 basis points (bps) requirement is credited pro-rata to all participants with an account balance. TIAA is unable to directly charge participant accounts under the existing individual contract structure.

https://sra.maryland.gov/sites/main/fil ... -12-31.pdf

User avatar
ResearchMed
Posts: 10279
Joined: Fri Dec 26, 2008 11:25 pm

Re: TIAA Allocation advice wanted

Post by ResearchMed » Thu Apr 30, 2020 1:08 pm

talzara wrote:
Thu Apr 30, 2020 12:52 pm
When TIAA was first retained as an ORP vendor, the only contract available to the State was the Retirement Annuity (RA). These are individually-owned contracts or certificates that are controlled by plan participants. Because the contracts are controlled by the participants, the Board does not have complete flexibility over investment options and the ability to map assets to other funds.

...

Under the current individual contracts, all administrative fees are paid through revenue sharing from the investment line-up. Any revenue sharing in excess of TIAA’s 9.5 basis points (bps) requirement is credited pro-rata to all participants with an account balance. TIAA is unable to directly charge participant accounts under the existing individual contract structure.

https://sra.maryland.gov/sites/main/fil ... -12-31.pdf

We were told this applied to all CREF funds, too.
Hence, when plan was moved, only Trad Ann, TREA, and CREF funds remained. The 'mutual funds' got mapped or moved to cash (if person preferred, etc.).

The contract with *person*, not plan, meant there were some extra protections.

RM
This signature is a placebo. You are in the control group.

Post Reply