TIAA-CREF Endorses Guaranteed Income Choices in Retirement Plans

NEW YORK, May 3, 2010

All Americans should have investment choices in their workplace retirement accounts that would guarantee a lifetime stream of income, said TIAA-CREF in comments filed by the company with the U.S. Department of Labor (DOL) on Friday.

“A low-cost, fixed annuity can make all the difference in whether one outlives their savings or can afford life’s essential expenses throughout retirement,” said TIAA-CREF President and CEO Roger W. Ferguson, Jr. “Today most retirement accounts emphasize wealth accumulation, with little thought to how that wealth will translate into retirement income. A guaranteed income option helps ensure that workers build lifetime financial security.”

TIAA-CREF manages retirement savings on behalf of 3.7 million Americans.

According to the 2009 McKinsey Consumer Retirement Survey, 60 percent of defined-contribution retirement plan participants are interested in an investment option that provides guaranteed income in retirement. The number of consumers worried about a lack of guaranteed income more than doubled from earlier this decade, according to McKinsey.

TIAA-CREF’s comments in response to the Request for Information Regarding Lifetime Income Options for Participants in Retirement Plans, issued jointly by the DOL and the Department of the Treasury, emphasized the following points:

  • A guaranteed income option is an integral piece of any retirement plan. A lifetime annuity that provides guaranteed income is appropriate for most retirees, especially those with limited resources to meet their retirement needs.
  • Workers should have access to a fixed annuity that offers a guaranteed return on investment during their working years. TIAA-CREF supports the use of a fixed annuity because it allows individuals to take advantage of interest rates rising and falling across a number of economic cycles, which can provide a higher, more predictable income stream at retirement than if they were to transfer accumulations into a fixed annuity at retirement and annuitize during a low-interest rate environment.
  • Participants should not be required to annuitize their entire retirement accumulation, and should have access to partial annuitization options. This recognizes the unique nature of retirement planning, encourages use of annuities, and addresses participant concerns about depleting savings or removing financial flexibility during retirement.
  • In recent years, TIAA-CREF has found that nearly one-third of its participants choose to annuitize some portion of their assets. Approximately 17 percent of those beginning an income stream choose to fully annuitize. Those partially annuitizing often use other income options offered by TIAA-CREF to complement their lifetime income choice.
  • There is no “one-size-fits-all” option when it comes to retirement planning. Throughout their careers workers need access to a number of diverse investment and income options, a variety of planning tools, financial literacy programs, and personalized objective guidance to ensure they establish and maintain a comprehensive retirement savings plan.

On the issue of expenses, TIAA-CREF stated that keeping expenses low is a crucial element in the successful management of retirement accounts. The company also endorsed steps to increase transparency and establish uniform disclosure of fees, expenses, surrender charges, and returns to help further reduce costs associated with annuity products.

A copy of TIAA-CREF’s full responses to the DOL’s request for information is available here.


TIAA-CREF ( is a national financial services organization with $414 billion in combined assets under management (12/31/09) and the leading provider of retirement services in the academic, research, medical and cultural fields.

TIAA-CREF Individual & Institutional Services, LLC and Teachers Personal Investors Services, Inc., members FINRA, distribute securities products.

Media Contact:
Chad Peterson, TIAA-CREF, 704 988-6811

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

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