Declines in Variable Annuity Income From the CREF and TIAA Real Estate Accounts

April 21, 2009

TIAA-CREF is well positioned to navigate tough times in the market-it has done so successfully through many recessions in our nine decades-but we also know how difficult changes in your income can be, even in the short term.

Unfortunately, income from the CREF and TIAA variable annuity accounts, which are designed to rise and fall with the underlying markets in which they are invested, will decline this year because of the dramatic drop in the markets. If you are receiving retirement annuity income from any of the CREF accounts or TIAA Real Estate that adjusts annually, you will see reductions in your monthly income starting on May 1, 2009, when income amounts adjust to reflect the performance of the markets where each account is invested.

Below we answer questions you may have. Help is also available at 800 842-2776 where trained retirement specialists can answer your questions and ensure that your current plan is best tailored to fit your needs. (Retirement specialists are available Monday through Friday from 8 a.m. to 10 p.m., or Saturday from 9 a.m. to 6 p.m., ET)

  1. What impact will the change have on my retirement income?

    If you're receiving lifetime annuity income from the TIAA Traditional Annuity, your income will remain the same through at least December 2009.

    If you receive Interest-Only income from TIAA, your income declined effective April 1, as shown on your Confirmation of Payment Change statement that was mailed to you in late March. If you need further information, please call TIAA-CREF at 800 842-2776. Our consultants are available Monday through Friday 8 a.m. to 10 p.m. ET, and Saturday from 9 a.m. to 6 p.m.

    For those receiving income from the variable accounts, declines are based on market conditions as of March 31, 2009. Below is a list of the percentage drop in income for each of the variable annuity accounts:

    CREF Stock -44.46%
    CREF Global Equities -47.23%
    CREF Equity Index -42.56%
    CREF Growth -39.22%
    CREF Social Choice -29.26%
    TIAA Real Estate -25.47%
    CREF Bond Market -4.48%
    CREF Inflation-Linked Bond -7.30%
    CREF Money Market -2.53%

     
  2. What can I do about the drop in my retirement annuity income?

    Review your portfolio, ensure your asset allocation is still aligned with your goals and tolerance for risk, and remember that if you allocated a portion of your investments to equities as part of a diversified portfolio1, you did so for a good reason.
     
  3. The income I receive is revalued annually. Can I switch to a monthly valuation method?

    Yes, you can choose variable annuity income that changes either annually or monthly, or you can select a combination. Having the same income for a year can help you maintain a predictable household budget. But if you can accept greater income variability, and want your income to reflect the performance of your investments immediately, you can choose to experience gradual shifts in income. Both the annual and monthly revaluation methods provide equivalent values over the long term. Note that requests to change your revaluation method must be made by March 31. For assistance, call 800 842-2776.
     
  4. Can I change my annuity income allocation?

    Yes. You can change the investments from which you receive retirement annuity income. TIAA-CREF offers these options:

    • Move your investments among the nine TIAA-CREF variable annuity accounts.
    • Transfer from the variable annuity accounts to the TIAA Traditional Annuity-these transfers can be made as often as once per calendar quarter.
    • Each year you can transfer up to 20 percent of your TIAA Traditional Annuity to the CREF accounts. Note that this money can't be shifted back-it is best to evaluate the potential risks and rewards of increasing your exposure in equity markets.
    You can transfer your savings among the TIAA and CREF accounts by calling 800 842-2776 and speaking with a TIAA-CREF retirement specialist.
     
  5. If I transfer, when does my income change?

    If you transfer among the variable accounts, your allocation will change right away, but your variable income will change on May 1 - if it is revalued annually. If you transfer among variable accounts and your income is revalued monthly, or if you transfer from a variable account to the TIAA Traditional Annuity or from the TIAA Traditional Annuity to the CREF equity accounts, you'll see a change in either your next payment or the following one, depending on the day of the month when you make the transfer.

Be assured that, thanks to prudent and disciplined risk management and a long-term investment philosophy, TIAA-CREF remains financially stable despite these tumultuous economic times, counting $363 billion in assets under management to start 2009. In addition, 76% percent of TIAA-CREF's variable annuities and mutual funds rated by Morningstar exceeded their category median over the three-year period ending December 31, 2008, and 72% exceeded their category median over the five-year period ending December 31, 2008.2

All TIAA-CREF investment products are subject to market risk and other risk factors.

For performance information on TIAA-CREF investment products, please go to www.tiaa-cref.org.

1 Diversification is a technique to help reduce risk. There is no absolute guarantee that diversification will protect against a loss of income.

2 The Morningstar median represents the midpoint of an index of comparable funds/accounts grouped by factors such as investment objective and asset class.

You should consider the investment objectives, risks, charges and expenses carefully before investing. Please call 877 518-9161, or go here for a current prospectus that contains this and other information. Please read the prospectus carefully before investing.

Annuity products are issued by TIAA (Teachers Insurance and Annuity Association), New York, NY.

The CREF Money Market Account is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency.

Variable annuity account options are available through contracts issued by TIAA or CREF. These contracts are designed for retirement or other long-term goals, and offer a variety of income options, including lifetime income. Payments from the variable annuity accounts [and mutual funds] are not guaranteed and will rise or fall based on investment performance.

Mutual funds do not offer the range of income options available through annuities

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© 2013 and prior years, Teachers Insurance and Annuity Association - College Retirement Equities Fund (TIAA-CREF), New York, NY 10017