building the right investment approach to help drive ...€¦ · core investment options access to...

FOR INSTITUTIONAL INVESTOR USE ONLY. NOT FOR USE WITH OR DISTRIBUTION TO THE PUBLIC. 1

Building the right investment approach to help drive better employee outcomes Does your retirement plan help your employees become retirement ready?It’s important for you to give your employees what they need to retire comfortably. TIAA-CREF offers a range of retirement options to help them meet their lifelong financial needs. Many conventional plans offer investments designed to help plan participants grow their assets, as well as investment education and self-guided tools. But TIAA-CREF believes today’s plan must offer more, including:

n Lifetime income solutions to help your employees save enough to last their entire retirement.1 Many people are living longer and will need more income for retirement, possibly to last 30 to 40 years.

n 1:1 personalized advice that has encouraged almost two-thirds (62%) of TIAA-CREF’s clients to save more, adjust their portfolio allocation or rebalance.2

Defining a high standardAt TIAA-CREF, we aspire to a high standard of plan success that combines a well-designed plan to help participants prepare for retirement with strong results that help carry them through their retirement years.To help participants prepare for retirement, we make lifetime income offerings our central focus, and that distinguishes us from many other providers. Participants can benefit from our variety of offerings, including:

n An array of educational resources and financial tools n Free access to an easy-to-use, comprehensive online investment tooln 1:1 personalized advice provided by our experienced team of consultants

Not only do we help your participants. We are also committed to helping you maintain a rigorous investment fiduciary compliance process.

Read on to learn about TIAA-CREF’s investment menu, employee engagement and investment fiduciary compliance offerings. All are designed to prepare your employees for retirement and help you meet yourfiduciary obligations.


Plan sponsor challengesQuestions to ask yourself

How do I make sure my employees have the right choices to help them build savings and guarantee their lifelong retirement income?

How do I structure my plan to fulfill myfiduciary responsibilities?

How can I encourage my employees totake the right steps to be more confidentabout retirement?

Offer solutions that not only help employees accumulate assets, but provide flexible options to help meet lifetime income goals.

Build a smart fiduciary process that helps meet participant needs.

Give employees financial education resources and comprehensive, personalized advice.

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TIAA-CREF solutions Goal: to provide you with the best plan value

An investment framework to help all employees preparefor – and live in – retirement

Investment menu: asset accumulation and lifetime income

Asset accumulation and lifetime income should complement each other as important options in your plan. They are both critical to your employees’ retirement readiness. We offer a full menu of low-cost5 lifetime income products and investments that can serve the needs of both accumulatorsand retirees.

1 3Employee engagement: outcome-based education and advice

Proactive communication, education and advice can help participants understand and effectively use their plan. Education and advice should not only support participants while they are working and accumulating assets, but also later when they are in the spend-down stages of their retirement years. TIAA-CREF can help you reach your employees with the information they need and the educational tools and 1:1 in-plan advice that can help them prepare for retirement with confidence.

Investment fiduciary compliance

To help you meet your fiduciary obligations, TIAA-CREF will work with you to employ a rigorous, seven-step process and can work with you and your consultants every step of the way.

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TIAA-CREF offers a wide variety of low-cost5 lifetime income products and investments designed to help your employees build their savings and maintain a comfortable lifetime income.

Investment menu offering: asset accumulation and lifetime income

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Asset accumulationTIAA-CREF can help you build an investment menu as diverse as your employees. We offer more than 10,000 mutual fund options, which include TIAA-CREF funds that have solid track records across all major asset classes.6 A long-term investment approach, attention to cost, and disciplined risk management may help deliver consistent performance.

n For two consecutive years, in 2013 and 2014, TIAA-CREF received the Lipper Fund Award for Best Overall Large Fund Company.7

n Morningstar rated 98% of TIAA-CREF’s funds and variable annuity offerings at an overall rating of 3, 4 or 5 stars across all asset classes. (As of September 30, 2014, 35% have 3 stars, 59% have 4 stars, and 4% have 5 stars.)8

n TIAA-CREF’s fees and expenses are generally less than half the mutual fund industry average, including our mutual fund products and variable annuity accounts.9

n Our active Lifecycle Funds have expenses that are less than 75% of funds in their respective categories, as ranked by Morningstar10

Transparent and low fees

“We are now evolving into the next generation of success standards. The new measurement will be based on back-end results. Rather than, ‘What is the plan doing?’ the question will be, ‘What is the plan producing — will it yield adequate benefits for participants to live on in retirement?’ Success will be measured not by account balances but retirement income.”

— Fred Reisch, “Recipe for Success,” PLANSPONSOR Magazine

Building the right investment approach


You can give your employees flexibility and choice with lifetime income products from a company that’s been in the annuity business since 1918. Whether they have a low-cost9 variable annuity or guaranteed13 option, three out of four retirees receiving benefits from us have annuity income as part of their overall retirement distribution.14 In addition to our guaranteed TIAA Traditional Annuity, our wide selection of variable annuities offers exposure to a diverse range of asset classes, including real estate investments. Advantages include:

n Better investor behaviors: Research indicates that individuals are more than twice as likely to annuitize in retirement if they save through an annuity in a DC plan during their working years.15

n More income in retirement: When employees contribute to an annuity over time, they can receive up to 20% more income in retirement than if they purchased it with one lump sum at the end of their employment.16

n Potentially lower cost: In-plan annuities often cost less than those purchased outside of a plan.5 TIAA-CREF annuities are among the lowest cost in the market today.9

n Reassurance for plan sponsors: Offering a lifetime income option increases confidence that employees can retire more comfortably.

n Meeting key employee demand for lifetime income: 72% of participants surveyed by Brightwork Partners said they wanted an annuity as an investment option in their retirement plans.4

Advantages of “in-plan” versus “out-of-plan” annuities

Lifetime income payouts: participants receiveannualized payments of$4.5 billion through our lifetime pension annuity contracts, including 27,000 annuitants over the age of 90.11

Only an insurance company can offer a product guaranteed for life.12

TIAA is one of the three highest rated insurance companies in terms of overall financial strength.

We’re focused on our lifetime income products as the foundation of our platform. Our tiered investment menu helps serve the needs of all employees and seeks to deliver favorable retirement outcomes.

Lifetime income solutions such as annuities, can be offered “in-plan” (while the employee is working) or “out-of-plan” (after the employee has retired).

Lifetime income

Retirement Readiness

Brokerage WindowOptional participant access to broader investment options**

Extended choice

Open Architecture Platform:

Customization and choice

Foundational Lifetime Income*Guaranteed and variable annuities*

“One Decision”Target-date or asset-

allocation funds

Core Investment OptionsAccess to 10,000+ active and

indexed mutual funds

* Guarantees are subject to the issuer’s claims-paying ability. Payments from the variable accounts will rise or fall based on investment performance.** Rarely used by clients and their participants.



Investment fiduciary compliance offering2To help you meet your fiduciary obligations, we employ a rigorous, seven-stepprocess. It includes:

n Understanding your plan’s objectives n Analyzing your plan participants’ lifetime income needsn Meeting your fiduciary responsibilities n Offering employee-engagement strategies and resources

We will work with you and your consultants to help implement these steps and provide attentive, ongoing support.

Advantages of sole recordkeepingTIAA-CREF offers investments designed for asset accumulation and lifetime income products all on a single platform. Our sole recordkeeping model can help improve oversight and offer you a single source for reporting and compliance activities, often with lower plan pricing. It’s also easier for participants to act on advice provided on a sole recordkeeping platform. They can have a better grasp of their holdings with a single, simple-yet-comprehensive statement.

Understand plan objectives plus

participants’ lifetime income

needs. Know your fiduciary and compliance

responsibilities.

Create or review your

Investment Policy Statement.

Update your investment menu.

Monitor and review the

investment options in your plan.

Properly document your

fiduciary activities.

Provide ongoing

participant communication,

education and advice.

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Help your employees get informed with TIAA-CREF’seducational and advisory services.

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While effective plan design is critical, it’s also important to engage participants through proactive communication, education and advice to provide them with the direction they need during their working years and throughout retirement.

At TIAA-CREF, we are constantly working to give our participants the planning and investing resources they need to accumulate their savings and pay themselves when they’re ready. Whether they need to explore different strategies or scenarios, our educational materials, seminars, online tools, articles and more offer extensive, expert help that more than 15,000 plans take advantage of. They include: My TIAA-CREF, Advice and Guidance Center, Retirement Advisor, and Retirement Income Planner.17 We also offer educational workshops and a digital library of almost 200 educational articles.

Advice can influence outcomes.Almost two-thirds (62%) of those receiving TIAA-CREF’s personalized advice chose to save more, adjust their portfolio allocation or rebalance.20

Education and tools

Many participants need and want personalized advice about their investments. Up to 88% prefer someone to make specific recommendations they can follow.19

Our knowledgeable consultants provide 1:1 personalized advice both face-to-face and over the phone. The advice is personalized to each employee’s individual situation, such as age, savings rates, plan investments and tolerance for risk. Our “holistic” approach also helps employees with investments outside of TIAA-CREF’s plan. We delivered more than 233,000 advice, guidance and retirement consultations in 2013.18

1:1 personalized advice

Your employees can receive one-on-one advice at our 60 local offices, on the phone by calling our National Contact Center, or by going online through My TIAA-CREF 24/7. We have 200 Financial Consultants and more than 250 Wealth Management Advisors waiting to help them.Convenience

and flexibility



TIAA-CREF’s solid long-term track recordParticipants who invested in TIAA-CREF’s most basic menu offering enjoyed better outcomes than the average self-directed novice over the same 20-year period ending 12/31/13.*

Long-term asset management experience

TIAA-CREF has been investing in fixed income since 1918

We are one of the nation’s largest socially responsible investors.

real estate since 1947

equities since 1952

international markets since since 1972

emerging markets since 1977

Learn more about TIAA-CREF’s investment offerings at www.tiaa-cref.org/public/assetmanagement

* Dalbar, Quantitative analysis of investor behavior, 2013; average investment outcome refers to the universe of all stock and bond mutual fund investors whose actions and financial results are restated to represent a single stock and bond investor.

** For the 20 years ended 12/31/2013, CREF Stock Annuity account returned 8.28% and TIAA Traditional Annuity (RA) returned 5.88% (based on a single investment). The average returns were 5.02% for equity mutual fund investors and 0.71% for fixed income mutual fund investors. Of course, past performance cannot guarantee future results. The quarterly performance for the CREF Stock Account as of 9/30/2014 was as follows: one-year 13.11%, three-year 19.53%, five-year 12.47%, ten-year 7.52%, since-inception 9.92%. Inception date for the CREF Stock Account was 8/1/52. The quarterly performance for the TIAA Traditional Annuity (RA) as of 3/31/2014 was as follows: one-year 3.75%, three-year 3.48%, five-year 4.09%, ten-year 4.29%, since-inception --%. Inception date for TIAA Traditional Annuity (RA) was 1918. The returns quoted represent past performance, which is no guarantee of future results. Returns and the principal value of your investment will fluctuate. Current performance may be higher or lower than that shown above, and you may have a gain or a loss when you redeem your mutual fund shares/annuity account accumulation units. For current performance information, including performance to the most recent month-end, please visit tiaa-cref.org, or call 800 842-2252. Performance may reflect waivers or reimbursements of certain expenses. Absent these waivers or reimbursement arrangements, performance may be lower.

*** Index returns (S&P 500, Barcap Aggregate Indexes) over 20 years ending 12/31/2013. You cannot invest in an index.

Past performance does not guarantee future results.

Average investment outcome for self-directed novice.*

Fixed income: 0.71%

Equity funds: 5.02%

Outcome for TIAA-CREF’s most basic investment options

TIAA Traditional Annuity (RA): 5.88%** (6.50% bonds***)

CREF Stock Annuity: 8.28%** (7.81% stocks***)



A commitment you and your participants can rely on

n Combined assets under management exceed $840 billion as of October 1, 2014.

n “TIAA is among the highest rated insurance companies in the U.S. by the four leading insurance company rating agencies: A.M. Best, Fitch, Moody’s Investors Service and Standard & Poor’s.21

n For more than 90 years we have served not-for-profit organizations, proving that our client relationships span decades, not years.

n We are one of the largest private providers of retirement benefits nationwide

n TIAA-CREF is the not-for-profit retirement market leader.24 We serve more than four million individuals and over 17,000 clients.

n TIAA-CREF is dedicated to the financial well-being of its participants, whether they’re preparing for or living in retirement.

n $342 billion (cumulative) has been paid in annuity and other benefits since 1918.25

n When it comes to helping you prepare for retirement, partnering with TIAA-CREF has its advantages. In fact, in a recent survey of 27 companies, TIAA-CREF participants had the highest average retirement account balances.24

n Personalized retirement plan advice and financial education is available for all employees, regardless of assets, including 1:1 counseling sessions. Plus, we have more than 250 Wealth Advisors to help those with more complex financial needs. TIAA-CREF delivered over 233,000 advice, guidance and retirement consultations in 2013.27

The TIAA-CREF advantagen Lifetime income: TIAA-CREF

distinguishes itself by making lifetime income products the foundation of our platform, complemented by a full open-architecture investment menu and brokerage options.

n Personalized advice: TIAA-CREF has a diversified model for providing personalized advice

on employees’ retirement plan investment options. Our model offers comprehensive options, flexibility and convenience.

n Rigorous investment fiduciary process: TIAA-CREF works with you and your consultants to implement a comprehensive fiduciary compliance process.

n Record and strength: We pay over $13 billion per year in annuity payments and disbursements to participants.25

A continuing commitment to guaranteed retirement income

Dedicated to finding solutions for plan sponsors

TIAA stability and strength


n TIAA Traditional is backed by a $232.4 billion general account,22 and $31.9 billion in capital reserves helps protect participants’ retirements.23 We have credited additional amounts to TIAA Traditional Annuity every year for the past 65 years.


1 Any guarantees under annuities issued by TIAA are subject to TIAA’s claims-paying ability.

2 TIAA-CREF Advice analysis of 60,990 TIAA-CREF participants who received retirement plan advice or guidance and took action in the 12 months ending 7/31/2014. The overall action rate of 62% includes 19% who chose to save more and 55% who chose to change their future allocations and/or rebalance their portfolio.

3 “Open architecture” includes proprietary funds and nonproprietary funds.

4 72% of participants surveyed said they would be somewhat or very interested in contributing to an investment option in their 401(k), 403(b) or 457 plan that focuses mainly on generating guaranteed monthly income in retirement (instead of accumulating a specific amount) — Retirement Research Inc., Brightwork Partners study, 2011.

5 Applies to variable annuity expense ratios. Source: Morningstar Direct, September 30, 2014. The expense ratio on all variable annuity accounts managed by TIAA-CREF is generally less than half the mutual fund industry average. 69% are less than half their respective Morningstar Universe average and 58% are less than half their respective Morningstar Universe median.

6 The number of options noted represents proprietary and nonproprietary funds. Past performance does not guarantee future results.

7 The Lipper Award is given to the group with the lowest average decile ranking of three years’ Consistent Return for eligible funds over the three-year period ended 11/30/12 and 11/30/13 respectively. TIAA-CREF was ranked against 36 fund companies in 2012 and 48 fund companies in 2013 with at least five equity, five bond, or three mixed-asset portfolios. Past performance does not guarantee future results.

8 Morningstar ratings include Retail, Retirement, Premier and Institutional fund share classes; CREF Variable Annuity Accounts; and the Life Funds. Please note Morningstar rates CREF group variable annuities within the open-end mutual fund universe. Current rankings may be higher or lower on a monthly basis. Morningstar is an independent service that rates mutual funds and variable annuities. The top 10% of accounts in an investment category receive five stars, the next 22.5% receive four stars, and the next 35% receive three stars. Morningstar proprietary ratings reflect historical risk-adjusted performance and can change every month. They are calculated from the account’s three-, five- and ten-year average annual returns in excess of 90-day Treasury bill returns with appropriate fee adjustments, and a risk factor that reflects subaccount performance below 90-day T-bill returns. The overall star ratings are Morningstar’s published ratings, which are weighted averages of its three-, five- and ten-year ratings for periods ended September 30, 2014. Past performance cannot guarantee future results. For current performance and rankings, please visit https://www.tiaa-cref.org/public/tcfpi/InvestResearch

9 Source: Morningstar Direct, September 30,2014 based on Morningstar expense comparisons by category.

10 TIAA-CREF Lifecycle Funds Retirement Share Class expense ratios vs. Morningstar U.S. Open-End Mutual Fund Target Date peer group, effective September 30, 2014. The target date for Lifecycle funds is the approximate date when investors plan to start withdrawing their money. The principal value of the fund(s) is not guaranteed at any time, including at the target date.

11 As of December 31, 2013

12 Lifteime Income in Defined Contribution Plans: A Fiduciary Approach, Fred Reish, Bruce Ashton, Joseph Faucher, Drinker, Biddle & Reath LLP, 2012

13 Any guarantees under annuities issued by TIAA are subject to TIAA’s claims-paying ability. Payments from the variable accounts will rise or fall based on investment performance.

14 TIAA-CREF Internal Research.

15 TRENDS AND ISSUES: Retirees, Annuitization and Defined Contribution Plans white paper, Paul. J. Yakoboski, TIAA-CREF Institute (April 2010)

16 TIAA-CREF Actuarial, as of 7/1/14, someone who was in TIAA Traditional for 25 years and amassed $100,000 through level monthly contributions would receive monthly income of $625 (Age 65, Single Life Annuity with 10 years guaranteed), which is 18% more than someone transferring $100,000 to TIAA the day before retirement. Contributing to the TIAA Traditional Annuity in a DC plan for 30 years resulted in a 24% higher monthly income payment. Past performance is not a guarantee of future results. Based upon TIAA-CREF proprietary research.

17 TIAA-CREF is not providing investment advice and is not a plan fiduciary with respect to the education and information presented herein. Note also that TIAA cannot and does not provide legal advice. Consult such advice from your tax and legal advisors. The TIAA-CREF Retirement Advisor will provide asset allocation advice based upon the information that you provide. It will not provide specific recommendations regarding your other retirement assets.

18 Source: TIAA-CREF Advice analysis of 233,489 TIAA-CREF participants who received retirement plan advice or guidance or a TIAA-CREF Financial Planning report in the 12 months ending 12/31/2013.

19 Source: Cisco Study, 2011, 1000 investors, among whom only 12% believed they could do better investing on their own, and 88% said they prefer to get advice.

For more information about TIAA-CREF and what we offer, visit tiaa-cref.org, contact your Relationship Manager, or call the Administrator Telephone Center at 888 842-7782, Monday through Friday, 8 a.m. to 8 p.m. (ET).

10FOR INSTITUTIONAL INVESTOR USE ONLY. NOT FOR USE WITH OR DISTRIBUTION TO THE PUBLIC.

20 Source: TIAA-CREF Advice analysis of 60,990 TIAA-CREF participants who received retirement plan advice or guidance and took action in the 12 months ending 7/31/2014. The overall action rate of 62% includes 19% who chose to save more and 55% who chose to change their future allocations and/or rebalance their portfolio.

21 For its stability, claims-paying ability and overall financial strength, TIAA is one of only three insurance groups in the United States to currently hold the highest possible rating from three of the four leading insurance company rating agencies: A.M. Best (A++ as of 5/14), Fitch (AAA as of 4/14) and Standard & Poor’s (AA+ as of 7/14). It currently holds the second highest possible rating from Moody’s Investors Service (Aa1 as of 10/14). Per S&P criteria, the downgrade of U.S. long-term government debt limits the highest rating of U.S. insurers to AA+ (the second-highest rating available). There is no guarantee that current ratings will be maintained. Ratings represent a company’s ability to meet policyholders’ obligations and do not apply to variable annuities, mutual funds or any other product or service not fully backed by TIAA’s claims-paying ability.

22 The investment performance of the TIAA General Account portfolio supports TIAA fixed annuity minimum guaranteed returns, additional amounts and payout obligations. TIAA’s General Account is the source of the earnings, financial strength and stability that back the TIAA Traditional Annuity. It is not available to investors and does not present investment returns to participants.

23 As of June 30, 2014. Applies to TIAA, the insurance company affiliate, which backs TIAA Traditional and our other guaranteed products. Capital reserve represents total statutory capital, which comprises capital and surplus, and asset valuation reserve for TIAA.

24 Source: LIMRA, Secure Retirement Institute, Not-for-Profit Market Survey, third-quarter 2014 results. Based on a survey of 27 companies. TIAA-CREF ranked first in total assets. Ranking does not reflect investment performance.

25 As of 12/31/13. Benefits include annuity payments from TIAA and CREF, additional amounts paid on TIAA Traditional above the guaranteed rate, surrender benefits and other withdrawals, death benefits, health insurance and disability insurance benefits, and all other policy proceeds paid.

26 Source: LIMRA, Secure Retirement Institute, Not-for-Profit Market Survey, third-quarter 2014 results. Average assets per participant based on full-service business. Please note average retirement account balances are not a measure of performance of TIAA-CREF retirement offerings.

27 TIAA-CREF Advice analysis of 233,489 TIAA-CREF participants who received retirement plan advice or guidance or a TIAA-CREF Financial Planning report in the 12 months ending 12/31/2013.

TIAA-CREF Individual & Institutional Services, LLC, Teachers Personal Investors Services, Inc., and Nuveen Securities LLC, members FINRA, distribute securities products. Annuity contracts and certificates are issued by Teachers Insurance and Annuity Association of America (TIAA) and College Retirement Equities Fund (CREF), New York, NY. Each is solely responsible for its own financial condition and contractual obligations.

TIAA-CREF products may be subject to market and other risk factors. See the applicable product literature, or visit tiaa-cref.org for details.

You should consider the investment objectives, risks, charges and expenses carefully before investing. Call 877-518-9161 for current product and fund prospectuses that contain this and other information. Please read the prospectuses carefully before investing.

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