TIAA and CREF: Program Features and Recent Evidence on Performance and Utilization
Goodman, Benjamin, and David P. Richardson (2014). " TIAA and CREF: Program Features and Recent Evidence on Performance and Utilization." TIAA-CREF Institute Research Dialogue #114, March 2014.
16 Pages Posted: 18 Feb 2015 Last revised: 27 Feb 2020
Date Written: September 30, 2014
Abstract
Hybrid retirement plans that combine the best features of defined benefit and defined contribution plans can provide an efficient and equitable method of ensuring retirement security for workers. Co-operative pension structures also enhance retirement security through risk pooling and leveraging economies of scale. Yet most U.S. private sector workers are not covered by these types of plan design. The TIAA-CREF system, which began in 1918 and covers millions of workers in the non-profit sector, provides an example of a plan design with features of a hybrid co-operative pension. We examine the historical performance of the core components, TIAA (a guaranteed fixed annuity) and CREF (a variable annuity), discuss key design features, and analyze data on contributions, investment returns, risk pooling, and retirement distribution characteristics.
Keywords: Pensions, Annuity, Retirement Plans
JEL Classification: G22, M52
Suggested Citation: Suggested Citation