Location. New York City

State. New York

Key people. Roger W. Ferguson, Jr. CEO

AUM. US $564 billion

TIAA-CREF (Teachers Insurance and Annuity Association – College Retirement Equities Fund) is a financial services organization that is the main retirement provider for people who work in the academic, research, medical, and cultural fields. According to TIAA-CREF, the company serves 3.9 million active and retired employees participating at more than 15,000 institutions, and has $564 billion in assets under management (as of 12/31/13). TIAA-CREF is headquartered in New York city, with 9,000 employees in more than 90 local offices nationwide. [1] [2]

TIAA was chartered in 1918 as a stock life insurance company to provide employees of nonprofit education and research institutions with the means to enhance their future financial security. [3]

CREF. a companion nonprofit organization to TIAA, was founded in 1952 to provide retirement annuities based on investment in common stock. In the 1980s, CREF registered with the Securities and Exchange Commission (SEC) as an investment company under the Investment Company Act of 1940. [3]

TIAA and CREF each has its own Board of Trustees, whose responsibility is to assure that the organization is managed properly. Above the TIAA and CREF Boards of Trustees are the TIAA and CREF Boards of Overseers. [3]

In 1952 TIAA-CREF introduced the world’s first variable annuity. now known as the CREF Stock Account. [3]

In 1996, TIAA-CREF began offering mutual funds to the general public. [4] The firm now offers retirement plans, IRAs, annuities, mutual funds, brokerage services, life insurance. educational savings accounts, and banking. [3]

Contents

Boglehead-style investing at TIAA-CREF

The building blocks of Boglehead-style investing are low-expense-ratio index mutual funds and/or exchange-traded funds (ETFs). Vanguard fans would suggest that Vanguard has the best and most complete lineup of such funds, and that the most convenient place to hold Vanguard mutual funds is directly at Vanguard. Thus, the Bogleheads forum and Wiki tends to be Vanguard-oriented. But investing according to the Boglehead philosophy certainly does not require you to invest at Vanguard or use Vanguard products. Here are some notes on how to do it at TIAA-CREF.

Annuities fund offerings

Some CREF annuities’ fund offerings, such as the international funds, are actively managed. Thus an investor’s fund selection may result in a partially indexed portfolio.

The CREF Stock fund represents a combination of Total US and Total International (excluding US) funds, which is 2/3 of a Three-fund portfolio. Therefore, a three-fund portfolio can be created using only 2 funds:

• CREF Stock (70% Russell 3000 / 30% MSCI Allworld ex-US)
• CREF Bond (Barclays U.S. Aggregate Bond)

Any Vanguard LifeStrategy Fund allocation, and most Vanguard Target Retirement Funds allocations, can be emulated by an appropriate mixture of the Stock and Bond funds. Just use the appropriate Stock/Bond split. [5]

Mutual fund (retail) offerings

Construct a three-fund portfolio using the three available index funds:

• Equity Index (Russell 3000)
• Emerging Markets Stock Index (MSCI Emerging)
• Bond Index Fund (Barclays US Aggregate)

Retirement annuities for 403(b) plans

TIAA-CREF retirement annuities make up a large part of the university and research institution employer provided retirement plan market. TIAA-CREF annuity accounts are managed with much lower costs than most variable annuity offerings. Most of the equity based subaccounts (Global Equity, Stock, Growth, and the equity investments in Social Choice) are actively managed using the following three-part strategy:

• Active management. one part of the portfolio is devoted to active individual stock selection;
• Enhanced indexing. one part of the portfolio employs a quantitative modeled stock selection strategy designed to match the risk characteristics of benchmark market sectors;
• Pure Index. one part of the portfolio is managed to match the performance of the benchmark index.

The investment menu provides one stand-alone index portfolio, the Equity Index fund, based on the Russell 3000 index.

The table below lists the subaccounts that make up the TIAA-CREF line-up of investment options.

CREF Variable Annuity Accounts [6]