TIAA-CREF to customers: Please read the letter (if you can)

TIAA-CREF: Whose greater good?

I hate obfuscation. This week, TIAA-CREF sent my wife the letter I’ve attached to this post as a PDF. It’s unsigned, unaddressed and clearly written by an attorney…but the marketing guys got into the act as well.

The letter is a notice of a price increase….but it never says TIAA-CREF is raising prices. It only says that “estimated expenses will increase by eight to ten basis points.”

Check out this copy:

The revised estimated expenses also reflect costs unanticipated at the time of the original estimate in the prospectuses, including expenses associated with operating two platforms to serve institutional retirement plans pending completion of plan conversions to the new platform and costs associated with processing delays and delays in realizing anticipated savings.

In other words, we have to raise prices because we have duplicate computer systems, neither of which serve you, the individual investor. We screwed up merging them, and not only didn’t we save the money we thought we would, we have to spend more. You get to pay for it.

OK, I get it. This wealthy company, ostensibly dedicated to teachers, professors, nurses and other non-profit employees and hiding behind noble ideas like serving the “greater good” and leveraging “the power of .org,” can’t simply say “we’re raising prices.”

Instead we get a long, apologetic argument about better service to “institutional clients,” (sales) visits to campuses, and a quote from Forbes backing up that when you call these people, they’re happy to sell you more overpriced investments. We also get some nice footnotes where the name should be of a human being taking responsibility for the price increase.

(I didn’t attach the expense ratios, but ranging from .48% to .905%, I hope many of the company’s customers will realize that there are far less expensive options available.)

A song that’s in high rotation on my iPod these days is the lovely duet Please Read the Letter from the unlikely pairing of Robert Plant and Alison Krauss (yes, I know:  heavy  metal and bluegrass…who’d have thunk it? Go ahead and blow 89 cents on the song. You’ll love it).

TIAA-CREF’s marketing and legal people should listen carefully to some of the song’s lyrics:

…A fool could read the signs
Maybe baby
You’d better check between the lines
Please read the letter,
I wrote it in my sleep
With help and consultation from
The angels of the deep…


6 responses to “TIAA-CREF to customers: Please read the letter (if you can)”

  1. Lily Avatar

    Worst company I have ever had to deal with. I wish my University would kick this company out of our retirement plan. We have no other choice but the lack of service and abuse I have had to suffer over the last 10yrs is incredible. This dead horse needs to be put out to pasture.

  2. […] often use my blog to diss marketing that’s stupid, misleading, dangerous or derivative.  This time it’s my pleasure to share marketing that’s on […]

  3. […] often use my blog to diss marketing that’s stupid, misleading, dangerous or derivative.  This time it’s my pleasure to share marketing that’s on […]

  4. Retiree Avatar

    TIAA-Cref has been happy to hide that their phones and internet website have not been available from 2 to 4 pm. I wonder why? Has any one else have trouble accessing their accounts?

  5. TIAA Victim 4167836 Avatar
    TIAA Victim 4167836

    Typical. It is time to get rid of TIAA-CREF from the American retirement investment landscape. We need to get busy and vote on TIAA-CREF with our feet by: a) stopping our own contributions to this idiot organization, b) stopping our colleagues from giving additional contributions and c) convincing our non-profits to eliminate them from their options lists.
    I first became in involved with TIAA-CREF in 1977. Looking back, it turned out to be a dismal day. How dismal only became apparent during the past decade or so as I approached retirement!
    TIAA has never had a useful program for tracking investment returns and paying out lumpsums. Once they’ve got your money, you are absolutely out of luck. It will be annuitized on a mysterious schedule that favors them, and leaves you sipping gruel. There is no way to track the performance of any asset allocation you may choose in the annuity program. The only thing you can be certain of with TIAA-CREF is that your money will underperform any other way to invest your retirement contributions you can imagine. This explains why TIAA-CREF has no true lumpsum program. If they had one, everyone would use it!
    Today, with all the options available, any non-profit employee who gives these turkeys even a single additional penny of their retirement contributions is nuts, no spell that NUTS. If you have friends who are using them, get them to stop NOW. Let’s vote with our feet.
    If your non-profit is still using these jerks as one of their options, get them to at least STOP (and move their 403b programs to Fidelity [not AIG!!], and be a hero to your friends by keeping them from getting screwed. It is also a benefit to your non-profit, because their precious funds will magically start doing more, instead of less good.

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