A nonprofit organization that provides investment and insurance services for those working in education, medicine, culture and research. TIAA-CREF, short for Teachers Insurance and Annuity Association - College Retirement Equities Fund, has a history that dates back to the late Andrew Carnegie, whose Carnegie Foundation for the Advancement of Teaching created the initial organization in order to service the pension needs of professors.
As of late 2005, the TIAA-CREF had more than 15,000 clients, amounting to more than $360 billion in assets under management. Its clients are predominantly institutional and come from the nonprofit and educational sectors. The firm started as a pension administration business, and the core operations of the TIAA-CREF remain geared toward retirement plan administration and a line of annuity products.
BREAKING DOWN 'TIAA-CREF'
In 2016, TIAA-CREF rebranded itself as TIAA to portray a simpler and cleaner image while acknowledging the company's 100-year history. The company continues to offer services to customers such as individual retirement accounts (IRAs), mutual funds, annuities, brokerage,529 plans, insurance, banking, home loans and estate planning.
The Addition of CREF
While the creation of TIAA in 1918 as a means of providing guaranteed lifetime income and insurance was a groundbreaking new resource for teachers and educators, it was the establishment of CREF in 1952 that started the company on the road to becoming a diverse financial services firm. Citing rapidly increasingly life expectancies, CREF
allowed individuals the opportunity to add equity investments to their personal portfolios through a variable annuity product. It was designed to use the higher expected returns of stocks to help stretch out the retirement income streams of workers. Fortune Magazine described CREF as "the biggest development in the insurance investment business since the passage of the Social Security Act in 1935."
Innovative Product Offerings
TIAA has demonstrated a history of accepting investment strategies before the strategies became mainstream. In 1979, the company was one of the first to utilize a broad portfolio of international stocks as part of its investment strategy. In 1990, it added the CREF Social Choice Account to its lineup, giving customers a socially responsible investing option. In 1995, TIAA offered individuals the ability to invest in directly owned real estate properties. In 1998, the company entered the 529 marketplace.
Solid Investment Results
TIAA has received much recognition for the performance of many of its products. The company operates the 529 programs for 10 different states, including the highly ranked plans from California, Michigan and Minnesota. TIAA Investments was awarded Lipper's Best Overall Large Fund Company recognition based on the three-year, risk-adjusted performance across multiple asset classes among 37 mutual fund families. TIAA also received the U.S. Lipper Fund Award for Best Mixed Assets Large Fund Company, the top ranking among 39 mutual fund families eligible for the award.