TIAA-CREF makes it difficult to roll your retirement account to private IRA


TIAA stand for Teachers Insurance and Annuity Association.  Cref stands for College Retirement Equity Fund. Many teachers/educators are effectively forced to contribute to the TIAA-Cref Employer Retirement Plan. I had no complaints about TIAA-Cref until I decided I wanted to rollover my entire TIAA-Cref retirement account into a private Roth IRA. I worked at Houston Community College for many years and TIAA-Cref has made it next to impossible for me to transfer all my contributions to Fidelity. They require you to fill out multiple error prone forms and snail-mail them to a third-party for verification. The people in Houston are rude and of no assistance, but in the name of fairness and journalistic neutrality please read this article about a CREF account holder who had a hassle free experience and easy time of withdrawing their money from their retirement account. 

The delay and stall tactics of TIAA forced our family to borrow from a disreputable lender in order to make a down payment on our dream home. The interest rate was way too high, but we had no choice because TIAA is making it a struggle to WITHDRAW our money!

I have contributed to TIAA-Cref in more than one state, but have had a teaching job for 6 years now that contributes to another retirement entity. When I contacted TIAA-Cref about rolling over my retirement funds in personal IRAs, I was told I would have to get “third party” administrators at all the Colleges/Universities of my employment to approve the rollovers.

In my case, this would have involved filling out 4 sets of forms and snail mailing each set of forms to each of the four retirement account administrators at the schools of my employment! The money deducted from my paychecks and deposited into any retirement account is mine and I should NOT have to fill out a ton of error prone forms which require the approval of ANYBODY! I went through a similar process with JP Morgan of rolling over a 401K into a private IRA at Charles Schwab and it went smooth as silk with absolutely no hassles. In fact, I consummated the entire rollover online!

If your are as frustrated as me at not being able to easily access money that is yours from TIAA-Cref, Carranza Pryor is the Director, Associate General Counsel, Litigation for TIAA-Cref in Charlotte,NC.

Sometimes, the only way to eradicate absurd policy is to file a lawsuit and based on what I have been reading there are plenty  of irate TIAA-Cref account holders that are upset about the excessively form based policies of TIAA-Cref. Moreover, one should not have to get permission from anybody to collect money that is theirs. What TIAA-Cref is doing is tantamount to borrowing and not paying back their obligation. They full well know that it is a big hassle to fill out all the paper work and make the necessary contacts. In the interim, they are holding YOUR MONEY that much longer and earning interest THAT MUCH LONGER……Not unlike the financial game that American Express plays with its card holders and merchants.

I am closing with a long list of folks who have from minor to serious grievances with the way TIAA-Creff operates. Many of the comments come from Flexo’s excellent blog titled Consumerism Commentary :

I’m just a regular but fairly well educated non-tenure, non-teaching university professor (librarian) who has worked at universities for 37 years. For the past 25 years I’ve been paying into TC and touting their strong commitment to helping the educators of the US. TIAA-Cref made some very big changes during those years including their level of commitment to supporting educators, and for at least a decade their “.org” status is a misnomer. Even so, I continued paying into the TC retirement system. I also, unfortunately, have lived in one of those states where there have been no raises for state university employeesfor the past five years. This means every penny is important to me now that I’ve retired. I retired at the end of spring semester (end of April) and have yet to see one cent from TIAA-Cref.

I made my guesses on the options offered to me for payouts — in my opinion they offer very little in writing about the various options and offer little to no guidance one would expect in the form of a personal financial advisor. I filled out (and am *still* filling out) all of the paper work and have returned it in a reasonable time frame, especially considering most of it has to go through HR people on campus for certification and being notarized. It seems that every time I return properly filled out forms, a few weeks later they come across yet another that has to be filled out before they can begin disbursing any funds. From the dates I been given recently, it will be at least mid-August before I have a chance of seeing anything — early June was their first estimate — and the value of my savings will not be set until after *all* the paperwork is in. (This is a concern because as the stock market continues to decline because of the debt limit political crisis the value of my retirement account — and thus my monthly payment — continues to decrease in value.) If they find more forms to be filled out, certified and notarized it will be September, at the earliest, before I see any funds. I’ve followed the rules, gotten things returned correctly filled out and in a timely manner, and now it’s beginning to look like I won’t receive anything for at least the first four months of retirement — not quite the rosy picture that had been painted before retirement.
If anyone is considering electing to use TIAA-Cref as their retirement vehicle, let me suggest they do at two things before making their decision: 1. talk to at least three *retired* TIAA-Cref members to see what their experiences have been, and 2. if they decided to go with TC, start setting aside a *cash* retirement fund, one that is held in a bank or credit union or under the mattress (remember that for each $100.00 you give the bank for a year, they’ll give you a whopping buck and a quarter return at the end of the year), to tide you through the period of early retirement while TC keeps finding additional forms that have to be filled out before you can receive any funds.  END Comment 1

As I read this, I cannot believe how similar it sounds to my experience; in fact, I eventually contacted the TIAA-CREF Board of Trustees in order to get a withdrawal request honored. In addition, I was never told by the various representatives that I could wait a few months and draw(in one lump sum at the age of 65) the total amount. Instead, I was only told that I had to annutizeover 9 years. I am more fortunate than the situatiion cited above because it took one week shy of two months to get the first amount of a nine year payout. Why not contact the CEO or the Board about this problem?END Comment 2

I also have moved into the camp of the horror of trying to get my money out of TIAA-CREF. I called to get information on a withdrawal. The woman answering said the form could NOT be sent electronically but had to be via surface mail. After a few days, after the date she assured me by which I would receive the form, I got no form. I called again. The man answering said he could send it to me electronically, which he did, and would walk me through how to fill it out, which he did, while I took notes. I printed out the form, filled it in, put a stamp on it for the oversize, mailed it. After a few days, I checked the status. The man answering said there were errors on it and I needed to fill out a new form. By this time I, ordinarily a calm, polite, controlled person, lost it. Plus he could not send me the form right then as he would fill out most of it electronically but I should get it via email the next day. Right now it’s almost two weeks since I made the first request. Each person I speak to gives me a different answer. I need the money now. This company appears to be in almost total disarray. Get all of your money out ASAP. That’s what I intend to do as soon as I straighten out this instant mess, assuming it will be.
How does one contact the Board and CEO. They seem to hide themselves really well.END Comment 3

You can file a complaint with the Better Business Bureau online in about ten minutes (google “better business bureau” and “complaint”). The electronic funds transfer for my withdrawal (after more than a month of failed tries) was initiated the same day they(TIAA-Cref) received my complaint from the BBB, which was just a couple of days after I filled out the online complaint form. You should make sure you keep record of the dates you interacted with various representatives, mailed things, etc.END Comment 4

Of course TIAA-Cref  are nice to you if you want to keep their high fees and low returns. Perhaps P.T.Barnum said it best. But try to pry your funds out of their sticky hands and you will get the full horror show.END Comment 5
I worked at an institution that contributed to a cref account on my behalf for two years. I have moved elsewhere, and I have another retirement account (roth IRa). I am currently trying to withdraw (after an initial failure and the complexity of rolling over to a roth IRA). I sent in forms that were declined by TIAA-Cref because the signatures were over 90 days old (I had to get a notarized signature from my wife who was out of state at the time, a signature from a past employer in another state, neither more wife or I had easy access to fax, so we used the mail, and my wife and I have other jobs to do!).

I received a call and was told I could sort it over the phone when I could get to the internet. When I was able to get to my computer and call, this was not the case. Rather, I was told I had to complete hard copies of the same forms over again along with a tax form, but I wouldn’t have to redo signatures other than my own. Apparently I didn’t need my wife’s signature, because the amount was small enough, but the form should say that, because getting a notarized signature can be a pain for people that work in the middle of nowhere for large chunks of the year! I was told by the rep that he would send me a pre-filled form electronically that I would simply have to print, sign and mail. When that didn’t happen, I called again, and I was told that I did have to get a signature from my former employer (the previous rep had told me I didn’t have to). I just want my money.END Comment 6

I have also experienced the same headaches and hassles enumerated here. I dealt with a “very nice” Customer Resolution Specialist who also indicated I would have to fill out voluminous forms and get notarized signatures from third party administrators. It has been over 8 years since I worked at place that was affiliated with TIAA Cref! I want my money this sucks! I think their lawyer is Carranza Pryor. It may take a class action law suit to change their idiotic policy!END Comment 7

My father worked in academic medicine and, as a result, had 403B retirement accounts with TIAA-CREF for over 50 years. He passed away in December 2008. We immediately established an IRA at TIAA-CREF for my mother, the named beneficiary, to receive the 403B account funds, which were (according to TIAA-CREF’s online account access system) successfully moved to her IRA in 2009.

In December 2010, as we attempted to arrange a Required Minimum Distribution (RMD) from my mother’s IRA, TIAA-CREF informed us that the distributions in 2009 were not completed properly and everything needed to be reversed to enable TIAA-CREF to start the process from the beginning. Of course, with the online system completely at odds with this news, I involved my mother’s accountants. With only a few days left in the tax year, TIAA-CREF moved all funds back to my father’s name (he had then been deceased for 2 years), paid an RMD from his accounts (twice as much as would have been paid from my mother’s IRA), and then distributed the funds to my mother’s IRA. TIAA-CREF acknowledged its errors and promised to reimburse my mother’s additonal costs.

Now, 8 months later, TIAA-CREF is refusing to reimburse my mother’s out-of-pocket costs, which are about $25,000 ($18,000 in additional 2010 income taxes plus legal and accounting fees). I have filed complaints with the SEC, the state Office of Financial Regulation, two state senators, and my father’s two prior employers, and I have an attorney poised to sue.

It is remarkable to me that a large institution like TIAA-CREF is actually attempting to get away with this type of abuse. I suppose that the company believes the legal fees for my mother to litigate would be too high for $25,000 in controversy. We’ll see. I am one who believes in doing the right thing, even if it costs to see justice prevail.

Suffice it to say that, anyone doing business with TIAA-CREF does so at his or her own financial peril. The company is unscrupulous in its business relationships with retirees and their beneficiaries. A totally despicable organization in my experience.



26 comments on “TIAA-CREF makes it difficult to roll your retirement account to private IRAAdd yours →

  1. Luke Landes, the handsome guy who founded Consumerism Commentary, has much more to tell you about issues related to TIAA CREF .

    Read what happened to this poor guy. It is a comment made at the excellent web site maintained by Landes:

    My dealings with TIAA over the last couple months is the worst experience I’ve ever had with a financial institution. Well over a month to get my first distribution, 300 minutes of phone time (that’s 5 hours) was wasted and I pay 10 cents a minute (that’s $30.) Now working on over 2 weeks on the second distribution and the process really is just getting started. I’ve been lied too, their customer service phone system is the worst I’ve ever had to deal with, there is no way to get to the same person twice. Every person you talk to is polite but nothing really gets done. I’ve gotten so mad I’ve been hung up on. I can’t get to upper management to complain even though 3 times I’ve been told I would get an email. The official complaint is probably the way to go.

    1. I believe it was Stephanie Taylor Christensen who had significant issue with TIAA Direct making unauthorized withdrawal from her private account. She is a personal finance writer and probably could recommend an attorney if you have grievance against TIAA CREF.

  2. Holy Cow! Thought is was just me. I am no longer employed by my school (as of 6/30/2013). I called today to get ALL my 403b retirement funds rolled over into an IRA at a different institution. They are telling me the money is tied up in an annuity and they won’t disburse all the funds. I think this is ludicrous. Can an individual file a complaint with the SEC? I though 403b monies were heavily protected by federal laws.

    1. Tony,
      Ludicrous is putting it quite mildly. Illegal is a better description of their, almost institutional, tacit policy of making it hard and time-consuming to either rollover or cash out! I eventually got my stuff rolled over to Charles Schwab, but only after an inordinate amount of time and stress. I am sure TIAA has a high paid cadre of lawyers that would quash any single individual’s lawsuit. Good luck and let us know how it ends up for you.

  3. Wow, I’m trying to roll my money into an outside company IRA. They really don’t want me to take it out. It’s in a 403(b) at an ex-employer where I worked for 20 years. They’re telling me that the portion invested in the “traditional guaranteed” fund can’t be taken out all at once. It has to be done over 5 years. The guy on the phone couldn’t explain why, he just said “it’s been this way for over 24 years”.
    Now I’m supposed to wait for the snail mail package, but after reading above, I’m worried about what I’m going to have to fill out, how much of a hassle it will be, and whether they’ll ultimately reject it.
    I’m standing by ready to file a BBB complaint (as someone did above) if they cause me any more problems!

  4. There has been a systemic delay of closing my account and returning MY money. Despite repeated attempts, multiple phone calls, and 2 overnight mailings, I am no closing to getting my money than I was before I started. I cannot get a definitive answer of when I will get MY money.
    11/21/13 – I phone Tiaa-Cref and requested a withdraw of 100% of my funds in order to purchase a house. I explained that it was critically important that this be processed quickly because we were buying a house, and we weren’t the only ones interested in buying theta house. They emailed the forms to my Tiaa-Cref account, and I printed them from my inbox at Tiaa-Cref.
    The forms indicated that a signature from the plan administrator was required and I did not have that form. I called Tiaa-Cref and was told that I did need that form, and it was emailed directly to my personal email account. (Days later I was told that I did not need the plan administrator form because I am retired.) The email with the form arrived after 5pm, costing me another day because the bank where I needed to go to get a medallion signature closed at 5pm.
    I complete all the forms and overnighted them to Tiaa-Cref.
    11/23/13 I follow up with a phone call and was told that there is a 14-day hold placed on the account because it is a new address. We submitted a letter from our new bank with a medallion signature guarantee that we are who we say we are and Tiaa Cref told us this would prevent a 14-day hold being placed on the account. When asked why there is a 14-day hold the Tiaa Cref call taker said she was “looking at the letter” (I assume the documents are in a scanned file that she could view), and she didn’t know why there was a hold on the account. She said she sent an email to the 2 people processing our withdraw request asking why there was a hold on the account, and would call us back. She did call back, but it was after 5pm, so another day was lost.
    When the Tiaa Cref representative finally does call, she tells us that we did not include our new address on the letter that the bank sent. No one from Tiaa Cref notified us of this problem by email or phone call. They sent a letter via postal mail. Not notifying us by secure email to my Tiaa Cref account or to my personal email address, the same way they sent the forms to us in the past, was another method to delay sending us OUR MONEY, and closing our account. There was a medallion signature on the letter guaranteeing that it was indeed us. Since the money is being wired into our account, and they had a bank medallion signature guaranteeing it was us, our address is immaterial. The bank’s medallion signature, certifying that we are who we say we are, carried a $500,000 liability insurance, so even if a fraud or error occurred, the loss would not be Tiaa Cref’s loss, but the bank’s loss.
    I follow up with a phone call and I am told that all the forms are there and that we would receive our money.
    12/2/13 – I follow up today with a phone call and I am told by the Tiaa Cref representative that answered the phone, that he is “tying all the information together” so it can be processed.
    I was told to call after 2pm to check the status and if not happy to have it elevated to a supervisor.
    When I called back at 2pm the representative told me that the administrators handling my account are out to lunch. When I told her I wanted the complaint elevated, I was told that only her boss can do that and her boss is out.
    I want MY MONEY and I want my Tiaa Cref account closed.
    All I am getting is doublespeak and no money. I need help in getting Tiaa Cref to give me MY MONEY.
    I filed a complaint with the SEC, the BBB, AARP and notified the college’s HR department. If anyone has had any success in speeding up the process, please let me know.
    I wonder if it was this hard to get money out of Bernie Madoff at the end?

    1. Jan,
      Sorry to hear something as critical as making a down payment on your new home is at stake! TIAA is monolithic and insensitive. As you mentioned their dilatory actions regarding making it difficult to withdraw YOUR money are intentional/systemic. They still have $700 of mine from when I worked in Houston. I did manage to get $6000 rolled over, but met many headaches and hassles….. Got an uplifting belly laugh out of your Bernie Madoff comparison!!

  5. To add to the above, my contract was never changed to disclose that TIAA was allowing annual withdrawals directly from TIAA. First published information of the ten year option from TIAA was on page three of the quarterly statement in 2010 when they added the word “cash” to withdrawals. I complained to the Board of Directors, SEC, BBB and CA Dept of Insurance. TIAA simply fails to tell the truth to these agencies and as result there is a stalemate that can only be broken by a lawsuit. Should it be this difficult to obtain funds that TIAA has held for over 30 years ?

  6. I too am stuck in the TIAA CREF black hole. I tried to withdraw all of my money from a 403b and roll it over to an IRA at another institution. I need to do this to purchase years of service in a state retirement account. While I understand that with real estate and other investments they need to slow down withdrawals, they should require a separate signature before putting money in the annuity. It is such an unusual and long term restriction that I would have never put money there if I had been more clearly warned when I first allocated my contributions. It will cost me a lot of money to purchase the same years of service credit. I would have been better off to put the money in a stock or bond fund anyway. I wanted diversification. I got more than I bargained for. I complained to a TIAA CREF representative and he just laughed…

  7. I have a considerable sum in stocks and bonds from a former employer (403b). According to TIAA-CREF, I can only roll over 1/2, then the 1/2 must go into an immediate annuity. They say this rule is from the employer as they want to ensure I have adequate income like the state retirement system. I can only withdraw about 4% a year. I have looked at the documents I was forced to sign in a dark, dingy room at the end of a lengthy day of orientation (more on dental insurance than retirement). I cannot find anything about the limited roll over.

  8. I dealt with Houston Community College employee Stephen Regan who was their benefits manager. Was trying to get $1500 of mine from TIAA and Mr Regan was not much help. I have not worked for HCC in over 6 years and still can not withdraw my money!! How do they get way with what amounts to theft of your hard earned money?

    1. It was my understanding that if your balance was under $2000 you could withdraw the entire balance ? Not sure if that rule is the same for all participants ?

      1. This is correct but is only allowed one time after employment. If you’ve done it once and then moved back in it cannot be done again. Call the call center and request a small sum transfer. If its eligible they will allow it to occur.

  9. Did a complaint with the better business bureau really have any effect on TIAA? I have an on-going dispute with TIAA over a transfer payout annuity that they never executed. I had 2 accounts: a retirement annuity and a group retirement annuity. I submitted the paperwork (correctly) for both but TIAA only executed 1. The money in the other annuity just sat there until I noticed that the balance was too high. I contacted customer support and TIAA acknowledged it was their error. But they still refused to execute the contract and transfer the money that should have been. They wanted me to sign a 2nd 10-year payout annuity contract, which I refused to do. I did a FINRA mediation with them, but they wouldn’t budge. This dispute has been going on for 4 years.

    1. The BBB would only divulge that 16 other complaints had been documented against TIAA in the Houston area. TIAA recognizes litigation by disgruntled account holders as an additional cost of doing business. They still have $1000 of my hard earned dollars as a psych instructor at HCC. Also taught Brazilians coping skills and some Spanish.

      They don’t mind all the bitching and complaining that happen at sites like this as long as we do not unite culminating in a class action suit. Hopefully, many future educators will NOT invest with TIAA as a result of the injustices promulgated here.

      Very sorry they have withheld the money from you for 4 tears.

  10. While I understand the frustration people really ought to read the documents they receive when setting up their retirement account. Page 1 of the contract that is delivered, before any contributions ever go in, states in bold letters on the front page the restrictions they will run into should they put money into TIAA traditional. A lawyer cannot prosecute someone based on your lack of due diligence. I can guarantee it is very legal and not something new. These same people were also not complaining when their Traditional accumulations lost absolutely NOTHING during 2008-2009, and in fact many kept earning between 4-5% throughout. What a terrible business practice!
    As for the Third Party Administrator, please do your homework as this is not a TIAA-CREF policy, but is the decision of the employer. There are literally millions of people at TIAA-CREF who are rolling money out of an account with nothing more than a phone call, but if an admin chooses to make it difficult to do this, they are granted that right.
    This is an alarmist article designed to intentionally misinform by not providing accurate or complete information. I guess that’s the internet age though.

    1. Thanks for revealing yourself as being affiliated/empoyed with TIAA-CREF . It is understandable that you would want to defend their unpardonable practices. I am so comforted that TIAA-CREF is conducting themselves “legally” which rarely corresponds to fair.
      I will make it simple for you as your position is clearly specious and full of holes. TIAA-CREF has retirement contributions of former school teachers who want it back. This FACT is independent of all the 3rd party nonsense that you are promulgating.

      One should be able to contact TIAA-CREF directly and get every last penny without any HASSLES without having to go through 3rd party or original employer!!

      Oh yeah thee 4.5 % you were bragging about was easy to achieve in that time period by just buying bond funds at a place like Charles Schwab.

      Crawl back under your rock please.

    2. That would make sense except they changed the rules after their contract was established. I am flabbergasted that no class action suits have been initiated given the illegality of altering the language of a contract after both parties have signed it!?!

  11. In the late 1980’s TIAA entered into a settlement agreement with the SEC to provide better instructions as to withdrawals from TIAA traditional. Five years later an amendment was made to my contract that said I could transfer my funds to a CREF variable annuity. No disclosure was made that I could also receive funds in cash and they even failed to send the CREF contract for over 20 years. When I finally found out about this lack of disclosure and asked TIAA to fix their mistake, they responded by lying about the contents of calls made to them. Apparently not all calls are recorded, only the ones they choose. I have found them to be extremely dishonorable as they simply lie about facts. They try to avoid relinquishing funds in any way possible, whether it be delays in paperwork or providing false information as to what your benefits are. I hope someday they will be held accountable for all of their nonsense.

    1. Pat,

      Not to pry into your personal life, but are you familiar with the AI work of Dr. Roy Lachman who teaches at the University of Houston? The good doctor is an advocate of the abused and appears to have done some research regarding the monolithic actions of large financial institutions. You would likely espouse the views he advances.

  12. I just retired from 43 years of faculty service with SUNY and spent several hours talking to my retirement rep. I told him how I was planning to use my retirement money to make investments myself. He was adamant that I should move some of it into a bond fund offering a low stable rate of return which would be paid out over 10 yearly payments. I have had a small portion of my retirement in such a fund during my career, so I agreed to have 20% moved into that investment. I checked my account for a few days and was horrified at eventually find he had moved 100% of the state contribution into that fund locking most of my retirement money up which would not allow me to use it for self-managed investing as I had told him I was planning to do. I was furious and called him and everyone else in the company I could find. They all told me it was too bad and it could not be changed.
    I have contacted an attorney who specializes in class action suits and He believes there is a good winnable case here. We are looking for any people that this has happened to who would be willing to participate in in this suit. This is worth many thousands of dollars to those of us who have been caught in this situation. Why should we give decades of faithful service only to allow these greedy people to steel our hard earned retirement money for their own benefit??
    Jim Woodhull, or 516-658-8381

  13. I cannot believe that this is happening in the U.S.! This is outrageous. Please give me a favorable response. I am an outsider who has family that are professors and teachers. One of them has spent time, legal fees and cannot get money out. This sounds like a communist organization.

  14. TIAA-CREF was the only retirement investment account offered when I began my career as a university professor forty years ago. Young people today have many better and less expensive investment opportunities and I encouage you to use them. This is your grandfather’s retirement account and you should consider investing with Fidelity, Vanguard, and other low-cost providers.

    These stories and others have led to a current class action lawsuit (Cummings v. TIAA-CREF). I have had numerous administrative problems and delays over the past decade as I attempt to withdraw my retirement savings. TIAA revels in their sluggish, antiquated system and annoying lack of customer service. Please look elsewhere.

    1. Hi Bob!,

      I believe I had you as my professor as I recognize that lucid and professional exposition of yours. I never lost respect for you despite the grade dispute that you managed to ignore in the midst of my other burdens during that dreary segment of my life. How is your wife? Unfortunately the term MILF had not crept into popularity back then or she would have been so designated. I have had much better luck with TIAA-CREF and have seen my money grow without any issues. Perhaps you should be more patient with the forms that are required to transfer funds. I recall that you really did not enjoy pushing paper. Glad I was able to catch up with you in this unlikely communication channel with the two of us being on the opposite sides of a perceived issue. Life is full of ironies and surprises! 🙂

    2. Jonathan Ping wrote lucidly about significant customer issues with faculty at Bowdoin College in Brunswick Maine. A substantial percentage opposed compulsory participation in Tiaa cref pension plan like products citing piss poor customer service and sluggish response times when trying to cash out after death of spouse, getting fired or retirement.

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