TIAA

DEFINITION of 'TIAA'

TIAA is a financial services company originally founded in 1918 with a $1 million endowment from the Carnegie Foundation. For most of the past century, it was a  nonprofit organization that provided investment and insurance services for those working in education, medicine, culture and research. It went by the name TIAA-CREF, short for Teachers Insurance and Annuity Association - College Retirement Equities Fund, until 2016 when it rebranded under the shortened name of simply TIAA. In 2010, it shifted its model to become a for profit financial services corporation offering retirement products, 529 College Savings Plans, managed investment accounts, checking and savings products, mortgage loans and other managed investment accounts.

As of December 2017, TIAA had more than 5 million active and retired employee accounts at more than 15,000 institutions, with $954 billion under management, according to its website.  It is the number one ranked asset manager of real assets in farmland and U.S. tax exempt assets. It has been ranked the number one 'Best Overall Large Fund company', by the Thomson Reuters Lipper Fund Awards for 5 years in a row, from 2013-2017.

BREAKING DOWN 'TIAA'

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 in 1952

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." TIAA dropped CREF from its name in 2016.

Acquisitions

Since 2012, TIAA has made several acquisitions to grow its portfolio and product offerings.

  • In September of 2012, TIAA bough a shopping center in England called Festival Place for 280 million pounds.
  • In April of 2014, TIAA announced it would acquire Nuveen Investments in a deal valued at $6.25 billion.
  • In August of 2016, TIAA agreed to purchase Everbank Financial Corp. for $2.5 billion in cash. The deal was completed in June of 2017.

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 1992, it introduced the Rollover IRA. In 1995, TIAA offered individuals the ability to invest in directly owned real estate properties. In 1998, the company entered the 529 marketplace.

The CEO of TIAA is Roger Ferguson, who joined the company in 2008. Prior to that, he was the head of financial services for Swiss Re and Chairman Swiss Re American Holding Corporation. He is also the former Vice-Chairman of the board of Governors of the U.S. Federal Reserve System.