TIAA

The Teachers Insurance and Annuity Association of America-College Retirement Equities Fund (TIAA, formerly TIAA-CREF) is an American financial services organization that is a private provider of financial retirement services in the academic, research, medical, cultural and governmental fields. TIAA is listed on the Fortune 100 and serves over 5 million active and retired employees participating at more than 15,000 institutions and has $1 trillion in combined assets under management with holdings in more than 50 countries (as of December 31, 2017).[2]

Profile

Long organized as a tax-exempt non-profit organization, a 1997 tax bill removed TIAA's tax exemption.[3] It is now organized as a non-profit organization, the TIAA Board of Governors,[4] with taxable subsidiaries; all profits are returned to policyholders.

TIAA bought its Manhattan headquarters building, 730 Third Avenue, in 1955.[5]

History

In 1918, Andrew Carnegie and his Carnegie Foundation for the Advancement of Teaching, under the leadership of Henry S. Pritchett, created the Teachers Insurance and Annuity Association of America (TIAA), a fully funded system of pensions for professors. Funding was provided by a combination of grants from the foundation and the Carnegie Corporation of New York, as well as ongoing contributions from participating institutions and individuals.[8] The policyholders voted in 1921 to implement policyholder representation on the TIAA board so that educators would have a role in running the organization.[9][10] TIAA's namesake and signature investment/insurance product is the TIAA Traditional, which offers a contractually guaranteed return on principal and, at the discretion of the board of trustees on a periodic basis, additional profit/dividend interest over and above the guaranteed return. From the relatively illiquid and stable, long-term investments of its general account, TIAA has been able to consistently add some dividends to TIAA Traditional contributions since 1948.[11]

Annuities and real estate

In 1952, TIAA created the College Retirement Equities Fund (CREF) a variable annuity, in order to diversify its retirement funds.[12]

In 1995, TIAA introduced the TIAA Real Estate account, also a variable annuity, but more stable than equity investments and more flexible than TIAA Traditional.[11]

21st century

On June 15, 2007, TIAA became one of the first U.S. companies to voluntarily adopt, and the first to implement, a policyholder advisory vote on executive compensation policy.

On February 22, 2016, TIAA-CREF rebranded as simply TIAA as part of a new marketing and imaging campaign. CMO Connie Weaver explained that the old name was perceived by customers as being complicated, and that the new branding scheme was meant to portray a simpler and friendlier image of the organization.[13][14]

Environmental Impacts

In May 2021, TIAA announced its net zero by 2050 commitment for the General Account.[15] In 2022, TIAA’s annual climate report, “Ensuring Our Future,”[16] stated that TIAA views climate risk as investment risk. A November 2022 report from the Institute for Energy Economics and Financial Analysis (IEEFA) asserts that TIAA’s failure to divest its fossil fuel holdings to clear its portfolio of financial and environmental risk is strategically unsound.

Environmental Impacts

On October 19, 2022, nearly 300 TIAA clients filed a complaint with the UN-supported Principles for Responsible Investment initiative (PRI), asking PRI to remove TIAA from its list of sustainable investors.[18] TIAA is one of the world’s largest fossil fuel investors,[19] with at least $78 billion[16]

Investments and diversification

2012: bought Festival Place, a shopping center in Basingstoke, England for £280 million.[26]
2013: purchased a 50% stake in the Grand Canal Shoppes, including the Shoppes at the Palazzo, in Las Vegas, Nevada, for net proceeds of US$410 million as part of a new joint venture with General Growth Properties. GGP will continue to oversee the asset management of the project.[27]
2014: announced that it would acquire Nuveen Investments in a deal valued at $6.25 billion.[28]
2016: announced deal to buy EverBank Financial Corp. for $2.5 billion in cash;[29]

type	Non-profit corporation owning subsidiaries for-profit
foundation	1918
founder	Andrew Carnegie
location	730 Third Avenue
hq location city	New York City, New York
hq location country	United States
key people	Thasunda Duckett (CEO)‡R1R‡ Roger W. Ferguson Jr. (former CEO)
revenue	US$40.454 billion (2020)‡R1R‡
net income	US$1.492 billion (FY 2016)
aum	US$1.3 trillion (2020)‡R2R‡
assets	US$615.042 billion (2020)‡R1R‡
equity	US$ 38.871 billion (2020)‡R1R‡
num employees	16,533 (2020)‡R1R‡
subsid	Nuveen, TIAA Bank, Westchester Group
products	Financial services
homepage	tiaa.org

Profile

History

Annuities and real estate

21st century

Environmental Impacts

Environmental Impacts

Investments and diversification

External links

References

Investments and diversification