By Renee Boucher Ferguson  |  Posted 2007-08-17 Print this article Print

-CREF Effectively Stealing, Customer Claims"> TIAA-CREF, despite the attempts to inspire an altruistic image and the perception its IT woes are in the past, has proven to be a source of frustration to customers, leading some to file complaints with the Securities and Exchange Commission and at least one to accuse the financial services giant of theft. Despite efforts to recover from an IT infrastructure failure in 2005 and 2006 that affected thousands of TIAA-CREF participants who were unable to access funds in a variety of accounts, customers continue to report difficulty accessing funds, calculating contributions or even accounting for their own money.
In statements to eWEEK and comments on Internet message groups, customers report accounting errors that fail to acknowledge contributions and, worse, deduct from customers accounts.
"At this point, TIAA-CREF has just effectively stolen the December contribution from all the schools employees," said Brian Hoyt, a network administrator at Roland Park Country School, in an e-mail to eWEEK. The majority of his schools employees are being affected by the schools December 2006 conversion to the TIAA-CREFs new automated platform. "Everything seemed fine until mid-March," he wrote. "At that point the majority of employees received a letter indicating either duplicate or incorrect contributions and as a result a deduction was made—a deduction of the 12/15/06 contribution. Looking at TIAA-CREFs own statements there is no indication of anything other than a normal contribution. The money was simply removed and never returned." Hoyt said that he has worked with his schools TIAA-CREF administrator to resolve the issues and found that employee contributions were properly withdrawn from the schools accounts, but not returned when errors were pointed out. "This has been verified by external auditors," said Hoyt, who then initiated a call to TIAA-CREF in April, but by July had not seen any resolution. Hoyt is considering contacting the SEC "in hopes of getting some response." The irony is that complaints and threats of legal action come as TIAA-CREF takes steps to repositions itself as the not-for-profit benefactor of the people and efficient protector of customers financial futures. In its "" marketing campaign launching this week, TIAA-CREF is endeavoring to send a message: with an .org designation—the equivalent of a non-profit status—to its Web site versus a .com, or commercial, address, the company is all about serving those who serve the greater good. "Ever heard of a crash?" asks an Aug. 15 print ad in The New York Times. "As a we dont play to the whims of the market. Instead, we think long term and are committed to consistent performance." Read more here about TIAA-CREF problems of the past. The campaign is also designed to foster an atmosphere of trust as TIAA-CREF executives try to put behind them a "panoply of problems that included difficulties with a new information technology system, which prevented customers from gaining access to accounts; [and] the loss of several big contracts to manage pension and insurance plans for university employees in states like California and New York," according to an Aug. 15 article in The New York Times detailing the marketing concept. Big Problems "TIAA-CREF still has big problems with its higher education accounts," wrote Walter Maner, a computer science professor at Bowling Green State University in Ohio, in a July e-mail to eWEEK. "Starting in June of last year, TIAA-CREF appears to have been subtracting my Tax Deferred Annuity contributions instead of adding them. Their multiple mistakes appear to total into the $34,000-$50,000 range. Cant be sure because, amazingly, there is no one at TIAA-CREF that can answer the following simple question: According to TIAA-CREF records, how much did I contribute to my TDA during the calendar year 2006?" For the calendar year 2006, Maner found nearly a dozen major mistakes. In an effort to make some kind of correction after learning about his issues, TIAA-CREF subtracted Maners contributions and didnt add them back in. "So instead of having a $100 contribution, it was subtracted. So the net difference was $200," explained Maner. "So that made a nearly $40,000 error for 2006, by the time they compounded the subtraction with no credit back. The big problem from the end user stand point is you just cant find out what they think they know; I know what went in from my end." Maner said that TIAA-CREF representatives were unable to answer his balance inquiries because they were only able to see data back to June of 2006. While most of the issues for 2006 were eventually solved as a result of his continuous diligence, Maner said that he is finding new problems with his 2007 statements. About 130 additional employees at BGSU have also been affected by the processing issues at TIAA-CREF, a situation that has forced the school to pull back on its planned conversion to TIAA-CREFs newer automated platform, according to Maner. "Our institution is not recommending TIAA-CREF anymore and is refusing to convert to the new automated system until they get the system corrected. [TIAA-CREF] appears to be willing, but it appears to be an issue with backend processing," said Maner in an Aug. 14 interview with eWEEK. "Its very complicated for [TIAA-CREF]. If they make a mistake in December 06, as they did for me, they have to run backend processing to correct for December, and have to do it every month right up to current date; they have to run separate times for each propagation." Current Issues Remain a Mystery eWEEK reported in January of 2006 that customer woes at TIAA-CREF, initially said by the company to be the result of infrastructure upgrades, were in fact the result of a massive system implementation of SunGards Open Plan Solutions platform that affected thousands of TIAA-CREF participants who were unable to access funds in a variety of accounts, including lump sum annuity disbursements, systematic payments, transfer payout annuities, interest payment retirement options and individual retirement accounts. Page 2: TIAA-CREF Effectively Stealing, Customer Claims


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