TIAA-CREF Announces Variable Annuity Income Increases to Most Accounts

April 1, 2011

Income from CREF variable accounts, which are designed to rise and fall with the underlying markets in which they invest, will increase this year. (One exception is the CREF Money Market account, which will be slightly lower.)
If you are receiving retirement annuity income from any of the other CREF accounts and have elected to receive income that is revalued annually, you will see increases in your monthly income beginning on May 1, 2011, when income amounts adjust to reflect the performance of the markets in which each account invests.

Everyone receiving annuity income will receive an Outreach newsletter later this month listing percentage changes in annuity income for the CREF equity, bond and money market variable annuity accounts and the TIAA Real Estate Account. If their income is changing, a Confirmation of Annuity Income statement will accompany the newsletter.

Below are answers to questions you may have. Help is also available at 800 842-2252 where trained retirement specialists can answer your questions and help ensure that your current plan fits 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)

What impact will the change have on my retirement income?

For participants receiving income from CREF variable accounts, income increases reflect account performance for the period ending March 31, 2011. Below is a list of the percentage increase in income for each of the variable annuity accounts:

CREF Stock 12.36%
CREF Money Market -4.40%
CREF Social Choice 6.68%
CREF Global 8.50%
CREF Growth 11.73%
CREF Equity 11.56%
CREF Bond 1.08%
CREF ILB 3.27%
TIAA Real Estate 15.51%

If you’re receiving lifetime annuity income from the TIAA Traditional Annuity, your income from that account will remain the same through at least December 2011.

If you receive Interest-Only income from TIAA, your income remained unchanged beginning April 1, as reflected on your Confirmation of Payment Change statement, which was mailed to you in late March. If you need further information, please call us at 800 842-2252. Monday through Friday 8 a.m. to 10 p.m. ET, and Saturday from 9 a.m. to 6 p.m.

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 monthly changes in income. Both the annual and monthly revaluation methods provide equivalent values over the long term. Note that the deadline to request a change in revaluation method has passed for this year – change requests must have been received by March 31. For assistance, call 800 842-2776.

Why did the CREF Money Market Account decline?

The CREF Money Market Account has been experiencing declining yields due to very low rates available on short-term securities in which the account invests. This reflects prevailing interest rates in the economy and affects money market accounts generally.

Can I change my annuity income allocation?

Yes. You can change the investments from which you receive 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 equity accounts. Note that this money can’t be shifted back – it is best to evaluate the potential risks and rewards of increasing your exposure to equity markets.
You can transfer your savings among the TIAA and CREF accounts by calling 800 842-2776 to speak with a TIAA-CREF retirement specialist.

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.

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.

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

TIAA-CREF Individual & Institutional Services, LLC, and Teachers Personal Investors Services, Inc., Members FINRA, distribute securities products. Annuity contracts and certificates are issued by Teachers Insurance and Annuity Association (TIAA) and College Retirement Equities Fund (CREF), 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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