Table of Contents
- What Is the Teachers Insurance Annuity Association (TIAA)?
- Key Takeaways on TIAA
- Understanding the Teachers Insurance Annuity Association (TIAA)
- Adding the College Retirement Equities Fund (CREF)
- TIAA Acquisitions and Innovations
- Leadership at TIAA
- TIAA Retirement Products
- Eligibility and Comparisons
- The Bottom Line
What Is the Teachers Insurance Annuity Association (TIAA)?
Let me explain TIAA directly: it's a financial organization that delivers investment and insurance services specifically for people working in nonprofit sectors like academia, research, medicine, government, and culture.
You should know its history ties back to Andrew Carnegie, whose Carnegie Foundation for the Advancement of Teaching set up the original entity to handle professors' pension needs. Founded in 1918 with a $1 million endowment from that foundation, it operated as TIAA-CREF—standing for Teachers Insurance and Annuity Association-College Retirement Equities Fund—until rebranding to just TIAA in 2016.
Key Takeaways on TIAA
TIAA stands for Teachers Insurance and Annuity Association, and it's currently led by Thasunda Brown Duckett as president and CEO. As a for-profit institution, it focuses on pension, insurance, and investment services, primarily for teachers and their families. It was once part of the College Retirement Equities Fund (CREF), which became a separate entity in 2016.
Understanding the Teachers Insurance Annuity Association (TIAA)
TIAA started as a nonprofit and retains that in its charter, but Congress ended its tax-exempt status in the 1997 Taxpayer Relief Act. Now it's a nonprofit with taxable subsidiaries, and all profits go back to policyholders. You'll find it offers retirement products, 529 college savings plans, managed investment accounts, savings products, and brokerage accounts.
Distributions from the TIAA Traditional account get determined annually by the board. The headquarters is in New York, with 133 offices across the U.S. as of 2024. Right now, TIAA handles nearly 5 million active and retired employee accounts at over 15,000 institutions, managing $1.2 trillion. Its investment arm, Nuveen, ranks first in real assets for farmland in 2024. It earned the top spot as Best Overall Large Fund company from Refinitiv Lipper Fund Awards for six straight years from 2013 to 2018, and won the Lipper Best Mixed Assets Large Fund Group award for five years from 2016 to 2020.
Adding the College Retirement Equities Fund (CREF)
While TIAA's 1918 creation provided guaranteed lifetime income and insurance for teachers, the 1952 launch of CREF marked a shift toward diversified financial services. With life expectancies rising, CREF let individuals add equity investments via a variable annuity to extend retirement income through stock returns. Fortune magazine called it the biggest insurance investment development since the 1935 Social Security Act. TIAA dropped CREF from its name in 2016.
TIAA Acquisitions and Innovations
In recent years, TIAA has expanded through acquisitions. In April 2014, it bought Nuveen Investments for $6.25 billion. Then in April 2015, it took full ownership of TIAA Henderson Real Estate by purchasing its partner's stake for £80 million. In August 2016, it agreed to acquire EverBank Financial Corp. for $2.5 billion, completing the deal in June 2017.
TIAA has a track record of adopting investment strategies early. In 1979, it incorporated international stocks broadly. By 1990, it added the CREF Social Choice Account for socially responsible investing. In 1992, it introduced the Rollover IRA. Direct real estate investments came in 1995, and it entered the 529 market in 1998.
Leadership at TIAA
On May 1, 2021, Thasunda Brown Duckett took over as TIAA’s president and CEO, becoming one of only two Black women leading Fortune 500 companies. She previously headed Chase Consumer Banking. Fortune named her one of its Most Powerful Women in 2021, American Banker ranked her the 7th Most Powerful Woman in Banking in 2019, and Black Enterprise listed her among the Most Powerful Women in Corporate America in 2015.
TIAA Retirement Products
TIAA provides various retirement options. The TIAA-CREF Traditional Plan is an employer-sponsored defined-contribution plan similar to a 401(k), but it differs in structure, funding, investments, and payouts, emphasizing lifetime income over wealth accumulation. It can use fixed or variable annuities, with eight variable CREF options: Stock Account, Growth Account, Global Equities Account, Equity Index Account, Social Choice Account, Bond Market Account, Inflation-Linked Bond Account, and Money Market Account. These plans focus on annuitizing funds for guaranteed annual income, acting more like a defined-benefit pension than a 401(k).
You can buy personal annuities directly from TIAA, either fixed for steady growth even in downturns with no withdrawals required before age 90 and tax-deferred growth, or variable for potential higher returns but market risks, with no contribution limits and over 60 investment choices. Funds grow tax-deferred, you can invest or withdraw anytime, and at retirement, opt for lifetime income or a lump sum without surrender charges.
TIAA also offers traditional and Roth IRAs, plus rollovers from or to other plans like 401(k)s or 403(b)s. Traditional IRAs give upfront tax breaks but tax withdrawals, while Roths use after-tax contributions for tax-free withdrawals. It includes SEP and SIMPLE IRAs for small businesses.
Target-date funds, called lifecycle funds by TIAA, let you invest in mutual funds that automatically shift from high-risk to low-risk as your retirement date approaches.
Eligibility and Comparisons
These plans are for workers in nonprofit sectors like academia, research, medicine, government, and culture—originally started for professors in 1918. A TIAA-CREF plan isn't the same as a 401(k); both are defined-contribution, but 401(k)s aim to maximize supplemental income, while TIAA annuitizes for guaranteed lifetime income. TIAA isn't a nonprofit but is owned by a not-for-profit with a charter to operate without profit, after losing tax-exempt status in 1997.
The Bottom Line
TIAA is a for-profit organization offering pension, insurance, and investment services mainly for teachers and families, founded over 100 years ago to help those in helping professions secure retirement confidence. It serves over five million employees at more than 15,000 institutions, extending beyond education to research, medical, cultural, and governmental fields.
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