Category Archives: Transparency of financial institutions

Transparency and TIAA-CREF

TIAA-CREF, a pension fund that once served university teachers but now has open enrollment, placed my retirement funds from my years of teaching into an annuity over which I have little or no control

They began a rather small, simple institution – an alternative to the Teacher’s Retirement System in New York which was being raided at the time to lend money to New York City (1973). As with all investment organizations they have become larger and less transparent over the decades.

For example, these days:

  • They never tell me the total sum I have in my two accounts (a bond account and a stock account).
  • They never tell when or how they calculate periodic increases or decreases which, because they are dependent on the market, can give very different outcomes depending on the date and the formula used to make the calculations. In other words they don’t show the math that produces our income in any given year.
  • They end the year at the end of the 1st quarter, perhaps because the market is usually down at that time.
  • Does their year run from March to March, January to January or do they just take a snapshot on one day?
  • The organization has become too top-heavy. There used to be fewer executive officers and they were paid much less (each or the five top execs makes one to several millions). In 2011 these top five people made almost $28 million dollars.
  • Now that I signed up for paperless reports I am no longer sure of how many officers and trustees there are and I no longer know their salaries which may be my fault because I lose track of the e-mails telling me when to access these documents and then they time out. (In fact this info is available on line, at least for 2011 in this pdf –
  • We used to receive a notice of our new income beginning on May 1st each year sometime in April. Now we get the notice after the check is already deposited. So much for planning ahead.

I don’t know if I trust this organization as I once did. Are they doing anything shady or illegal? Considering that such shoddy behavior is considered normal these days they could be doing anything behind the scenes and how would their clients know? They have very good ratings but I don’t know if every fund is evaluated every year.

This lack of transparency is not only disconcerting – it is scary. I know the SEC is supposed to oversee these groups but the SEC has been publically outed as an unreliable overseer. No oversight and a culture that thinks financial institutions are nuts if they don’t wheel and deal – hard to find any level of comfort in this.

However, after market loses to retirement funds following the recession in 2008, the economic recovery, however slow, has been helpful and I am happy to have an annuity that is working to give me some financial stability at least for now. I still believe that transparency should be part of these operations.

By Nancy Brisson