At a Glance
Extremely relaxed culture
More diversity needed
"Unstoppable in the education"
A stand-out report card
From the ivory tower to the operating room, TIAA-CREF has been serving its clients for nearly 90 years. Together, the Teachers Insurance and Annuity Association of America, a New York-based life insurance company, and the College Retirement Equities Fund, an open-end investment company, make up a financial services group serving some 3 million members in the academic, medical, cultural and research fields at 15,000 institutions across the United States. As of December 31, 2009, the firm had $363.4 billion in assets under management, making it one of the world’s largest retirement systems.
TIAA-CREF’s three primary business areas are institutional client services, individual client services and asset management. TIAA-CREF’s core offerings include brokerage services, services for plan sponsors, meetings and counseling, trust services, retirement planning and advice, and planning tools and calculators. It also manages a variety of mutual funds. Beyond these services, the firm is also one of the largest institutional real estate investors in the United States with a global portfolio of direct or indirect investments of $60 billion.
In Carnegie’s hall of fame
Legendary New York City philanthropist and steel magnate Andrew Carnegie established the Teachers Insurance and Annuity Association (TIAA) through his Carnegie Foundation in 1918 as a fully funded system of pensions for professors. It was first funded by a combination of grants from the foundation and the Carnegie Corporation of New York which contributed an initial gift of $1 million along with contributions from participating institutions and individuals. The association was incorporated in New York State as a life insurance company led by Henry S. Pritchett, former president of the Massachusetts Institute of Technology (MIT). By the end of its first year, 30 public and private institutions became part of the TIAA network. The 1918 charter of TIAA states that it will conduct business “without profit to the corporation or to its stockholders.” For the first 20 years of its existence, TIAA’s sole shareholder was the Carnegie Corporation. As the company grew, it had to find new ways to adjust to a post-World War II economy which saw the number of college graduates triple, life expectancy soar from 48 to nearly 70 years and inflation explode to more than 7 percent per year in the 1940s. In 1952, the College Retirement Equities Fund (CREF) was created to provide a variable annuity fund to complement TIAA.
However, it wasn’t all smooth sailing for TIAA and CREF which were formed as nonprofit organizations dedicated to serving the nonprofit education and research community. In 1987, as a result of the 1986 Tax Reform Act, TIAA’s life and health insurance operations became taxable, and the Taxpayer Relief Act of 1997 made the rest of TIAA-CREF’s operations taxable. The acts by Congress had a significant effect on TIAA-CREF, transforming it from a pension and insurance organization solely for employees of education and research institutions into a group of financial companies providing products and services to the general public.
A tough time
Like most firms, TIAA-CREF has been affected by the global economic downturn which resulted in low earnings and consumption in 2008. The firm’s assets under management totaled only $363.4 billion, 17.6 percent lower than in the previous year’s end. The firm also declined from No. 9 to No. 30 in the Lipper/Barron’s mutual fund family survey for 2009.
730 Third Ave.
New York, NY 10017
Phone: (212) 490-9000
Employer Type: Private
President & CEO: Roger W. Ferguson, Jr.
2008 Employees (All Locations): 7,500
San Francisco, CA
New York, NY