Andrew Carnegie raised awareness within the academic community to the need for adequate pensions. As a result, the Carnegie Foundation established Teachers Insurance and Annuity Association (TIAA) in 1918 as a way to support the financial well- being of college teachers.
TIAA was a fully-funded system of pensions for professors. Funding was provided by a combination of grants from the foundation and Carnegie Corporation of New York — including an initial gift of $1 million — and ongoing contributions from participating institutions and individuals.
Incorporated as a life insurance company in the state of New York, TIAA began operation under the leadership of Henry S. Pritchett, a former president of the Massachusetts Institute of Technology. By the end of its first year, 30 public and private institutions had signed on.
From the beginning, TIAA followed a prudent, long-term approach to investing. This strategy allowed the company to weather the Great Depression. Assets under management grew from $19 million in 1929 to $105 million in 1939.
When the Second World War ended, government grants made it possible for many returning veterans to go to college. The number of graduates tripled between 1944 and 1950. TIAA now had nearly 600 participating institutions, but it was facing new challenges.
During the 1940s, inflation averaged more than 7% per year, with a record 18.2% in 1946. Plus, people in the United States were living longer. In just 50 years, the life expectancy of the average American had increased from 48 years to nearly 70. TIAA’s pensions were meant to last a lifetime, and with lives lasting longer and the dollar shrinking, new strategies were needed.
TIAA responded by creating the College Retirement Equities Fund, the world’s first variable annuity, which began operation on July 1, 1952. Later that year, an editor at Fortune suggested: "I think this is the biggest development in the insurance-investment business since the passage of the Social Security Act."
TIAA-CREF continued to provide innovative solutions for building retirement assets. In the 1970s, it was one of the first companies to use an extensive portfolio of international stocks as part of its investment strategy. In 1988, it began expanding its variable annuity offerings. In 1995, it created the TIAA Real Estate Account, allowing participants to invest in directly owned real estate properties.
The balanced approach to building retirement assets pioneered by TIAA-CREF has helped thousands of participants retire with financial security. Since 1918, TIAA-CREF participants have received a total of $316.8 billion in annuity payments and other benefits.1
Today, TIAA-CREF offers a full range of financial services, including retirement plans, IRAs, mutual funds, brokerage services, life insurance, and education savings plans. The company is dedicated to helping individuals and institutions in the academic, medical, governmental, research and cultural fields seek a more secure financial future.
1 As of December 31, 2011. Other benefits from TIAA and CREF include: Additional amounts paid on TIAA Traditional annuity contracts above the guaranteed rate, surrender benefits and other withdrawals, death benefits, health insurance and disability insurance benefits, and all other policy proceeds paid.
Please read the prospectus carefully before investing.
Annuity contracts and certificates are issued by Teachers Insurance and Annuity Association (TIAA) and College Retirement Equities Fund (CREF), New York, NY.TIAA-CREF Individual & Institutional Services, LLC and Teachers Personal Investors Services, Inc., members FINRA, distribute securities products.