Director, Benefits Strategy & Finance
Vice President, Benefits & Human Resource Operations
Paul J. Yakoboski
Senior Research Fellow
November 2011 |
In 2011, TIAA launched a revised retirement program for its employees. The program redesign was based upon principles that TIAA-CREF has been publicly advocating for retirement plan design that can provide long-term retirement security to all Americans. These principles derive from the premise that the overriding objective of an employer-sponsored retirement program should be to provide participants with an adequate and secure level of income throughout retirement, while balancing the shared responsibility for retirement security between employee and employer. The new program was designed to encourage greater employee savings for retirement through auto-enrollment and by redirecting a portion of company retirement contributions into matching contributions to the TIAA 401(k) Plan and Retirement Healthcare Savings Plan. Prior to January 1, 2011, 53% of TIAA employees were deferring at least 3% of salary into the 401(k) plan and another 10% were deferring between 1% and 3%. After auto-enrollment became effective, the participation rate increased to 95% with an average deferral of 7%. A proactive campaign encouraging every employee to receive retirement planning advice and counseling services was undertaken in conjunction with the launch of the new program.