Service Update for TIAA-CREF Participants

TIAA-CREF continues to take steps to offer you a wider range of financial products and services that broaden your investment choices and help you make sound financial decisions. We are improving our service infrastructure to increase our capability, flexibility and speed in meeting your needs. We are adding telephone consultants with the training to serve you better and revamping our web sites to improve their ease of use. We continue to build on TIAA-CREF's extraordinary record of providing financial security and to reinforce our organization's strong financial position.

To deliver these and other benefits, we are shifting to a more modern and flexible plan-based retirement record-keeping system rather than continue to use a more rigid, outmoded one. Throughout this complex transition, some individuals have experienced delayed transactions and other service shortfalls. We apologize for any issues or problems this transition may have caused.

We are working to resolve all service matters and improve service to both institutions and individuals. While some individuals may continue to experience delays, overall customer service continues to show improvement. With this in mind, we have posted below some frequently asked questions about service issues and the actions TIAA-CREF is taking to uphold our historic mission of meeting your financial needs on the best terms practicable.

What has caused the transaction delays and other service issues?

The transition itself is complex. We needed to move quickly to the new platform while carefully adhering to hundreds of specific rules in tens of thousands of different retirement plans for the approximately 15,000 institutions we serve. We undertook detailed and careful advance planning for the transition as well as for an ongoing series of enhancements. Overall, the transition has gone as planned and we anticipated and managed a number of potential problems ahead of time.

However, the complexity of this undertaking lent itself to unforeseen issues. In some cases, delays have resulted from the strains placed on our existing processes and staff. In other cases, our tradition of accommodating institutional retirement plan remittances in a variety of formats has, at times, required substantial effort to correct before processing. We have been working with institutional clients to help ensure the data they send to us is in a form that will allow for processing without delay. By ensuring that all transactions meet these new guidelines, we expect to offer plan participants faster transaction processing and improved service overall.

Where there have been shortfalls, what are you doing to fix the problems?

We are taking steps to help ensure that all participants can rely on their transactions being processed in a timely manner, their account statements are accurate, and queries or complaints responded to and resolved quickly and completely. These steps include reallocating and prioritizing processing personnel and other resources, adjusting workforce scheduling, adding and training new employees in our pension and IRA areas, implementing new data management systems, correcting errors and fixing their root causes, working with our institutional clients to enhance procedures for conveying remittance data and contributions, and improving the systems that tie together our back-end operations with our front offices.

We also are adding capacity to our overall customer service initiatives. For example, in July we  opened a third telephone counseling center in Dallas. We have upgraded our telephone switches and networks, and added enhanced call routing capabilities in our Charlotte, Denver and Dallas facilities.  We also implemented new technology that provides participants with call-back options designed to reduce telephone hold times.

What guidance can you give clients who have a service problem?

If you experience a problem with your transaction or account, please contact a TIAA-CREF customer service representative at 1 800 842-2776. Representatives are available Monday through Friday from 8 a.m. to 10 p.m. (ET), and Saturday from 9 a.m. to 6 p.m. (ET).  See additional ways to Contact Us.  We will work to resolve your problem as quickly as possible.

When do you expect these issues to be resolved?

We have more work to do to accelerate service improvements and then to attain even higher standards. Until then, we are working to process all client transactions in a timely fashion and will continue compensating individuals for economic loss as a result of delays we have caused.

Companies update technology all the time. Why has it appeared to be such a challenge for TIAA-CREF?

This is an unprecedented transformation for TIAA-CREF and essential to meeting our clients' evolving financial needs. For us, the update encompasses moving to a modern plan-based system and away from an individual contract-based system, demanding careful adherence to hundreds of specific rules in tens of thousands of different retirement plans for about 15,000 institutions. In some cases making improvements to our service infrastructure has entailed replacing thirty-year-old systems and the software that runs them. It is a complex undertaking, but one that will benefit clients by allowing us to deliver expanded choices of funds and accounts, personalized advice and other advantages on a single, reliable platform.

What benefits can TIAA-CREF clients expect as result of the company's transformation?

We believe the combination of capabilities we have built over the past several years surpasses what is available from many other full-service financial services providers, none of whom share our nonprofit heritage or our unique mission. Even as we work aggressively to improve service delivery and complete the transition to our new system, we have made progress on our participants' behalf in other areas:

• Two-thirds of TIAA-CREF’s mutual funds and annuity accounts have outperformed their Morningstar averages over the past 3 and 5 years.
• We have dramatically expanded our fund lineup to include new proprietary products and those from other fund managers.
• TIAA is one of only three U.S. insurance company groups to receive the highest ratings from the nation's four leading rating agencies.ⁱ
• Eight out of ten Wealth Management clients continue to rank our industry-award-winning Advice ⁱⁱ service as distinctive in the industry.
• With nearly $9.3 billion in assets as of September 30, 2007, the CREF Social Choice Account is the largest socially screened investment vehicle for individual investors in the United States.
• Our website was rated by Dalbar, an independent evaluator, as one of the two most improved in the financial industry.ⁱⁱⁱ
• We continue to take sound steps in the areas of Corporate Governance and Social Responsibility. For example, this year TIAA became the first U.S. company to introduce a policyholder vote on executive compensation policy.^iv 

We aim to deliver participants a range of advantages unmatched by many large full service financial organizations, none of whom share our non-profit heritage and commitment to serving those who work in the academic, research, medical and cultural fields.