Here's one for you all: I have a client who's 65 year old mother recently passed away and had about $900,000 in a TIAA-CREF retirment account (she was a professor). My client is sole bene as she was a widow when she died. I told the client that we need to have TIAA-CREF put the account into an Inherested/Beneficiary IRA and that once they did we could transfer the assets to my custordian. TIAA-CREF said that they could not do this due to the RMD's that my client is required to take and have re-registered the entire account not to a inhereted/bene IRA but something they call a "Savings & Investment Account". As a result it makes the transfer to my custodian not work due to the difference in registration. Has anyone heard of this? Is this some sort of TIAA-CREF proprietary structure so they can keep the assets there? Before the mother passed away, some of the money was in the "TIAA" portion and some was in the "CREF" portion. Now everything is in this "Savings & Investment Account". I have a meeting with the client soon and we are going to do another conf call with tiaa-creff, but do you all have any idea what is going on?
Never, ever, ever trusts TIAA-CREF. They have got to be among the top 5 worst financial firms out there.
She died in 2007. TIAA-CREF acts like they are some sort of holier-than-thou firm but they have some very complicated policies. This one is confusing the hell out of me
It is a TIAA-CREF rule. They have some stupid ones. I have a client that had some TIAA-CREF investments that she wanted to roll. We could roll part of it, but the other they said had to be paid out in 9 equal annual payments and couldn't be sent lump sum. My understanding is that they believe they are trying to save the clients from guys like us. B24 is right. They are one of the worst money managers out there. Missouri fired them from running our 529 plan. They sucked at that too.
I don't know what is meant by the "Savings and Investment Account".
I do believe that TIAA is correct in terms of the RMD. An RMD is due this year and they can't move the money until the RMD is removed. This same thing would happen if she was 72 and still alive and you were just trying to transfer the money to an IRA. The RMD would have to be removed first.
When this money gets rolled over, if TIAA-CREF does not allow beneficiaries to stretch the payments out over the course of their lifetime, she won't be be able to do it in the inherited IRA.
Try living in a college town with a teaching hospital where 3 out of 4 professionals are employed by the U. TIAA-CREF is tough to work with. Client likes them because they think TIAA-CREF has any say in the design of the benefit package, which socks money hand over fist into their accounts during their contributory years.
There are two parts.
TIAA - Is an annuity which you can only roll 10% of the account each year.
CREF - Is the mutual fund account and you can roll 100%.
They without a doubt one of the most difficult companies to get money out of.
Once a person passes, the TIAA portion is liquid without penalty at that time to the beneficiary. These are TSA's which are structured the same way as 403b's. Once your client takes their RMD for the year, request a decedent IRA account be opened. At that point you should be able to request the transfer.
If they refuse, take a look at the plan document to see if they allow 90-24 exchanges. If they do, exchange it with another custodian that will set up a decedent IRA upon transfer.
Finally, if those two things don't work, threaten a complaint that you will have the client write, that should get them moving in the right direction.
The comments about crappy service is correct, and every attempt at getting information for a client will be purposely roadblocked by their phone center (they have to be trained this way). By the way, their funds suck, their service sucks, they give no advice, and their fees have been going up. Why they have this cult following (like Jones) makes no sense.
By the way, their funds suck, their service sucks, they give no advice, and their fees have been going up.
Yeah, OK, granted, but at least they hold client's money hostage.
Death is a qualifying event for a qualified plan so you should be able to move the money. Ask them for their death benefit claim form or what type of paperwork they require. You probably will need to get a copy of the death certificate as well, but ask. With regard to the RMD, they do have to make the payment, but they should be able to make the RMD to the estate or to the beneficiary. The RMD rules simply say that the benefiary/estate must take an RMD according to the deceased person's schedule on a bene account.
You could also have them first transfer the death benefit into the bene's name while at TIAA-CREF using the death benefit claim form and from there have the bene authorize the transfer.
The RMD issue seems to not have much to do with holding the money. TIAA-CREF has a lot of these people in insurance policies. The problem may be if they have some kind of back end load on the policy that they would collect if the contract is liquidated. You should probably have the beneficiary ask for a distribution quote just so they know.
Another issue is that you may need to have the RMD authorized (signed off on) by the executor of the estate THEN you could turn in the death benefit claim form. Depends on how many hoops you need to jump though.
The first thing I would do, though, is just call them and ask them for their death benefit claim forms without mentioning you are trying to roll over the money. If they use a form, that can generally answer a lot of the questions. You may also want to read the 402(f) special tax notice to familiarize yourself and your client with the distribution rights.
Thanks Rankstocks and Akkula. I feel like I'm armed with some good information so that I can sit down with the client, call TIAA-CREF and get this thing moved. This board is a great rescource to those of us on our own and who get stumped every now and then!!!
I'll try to let you know how it all comes out.
Be prepared for the phone service rep to blast you. Tell your client up front that you have heard that TIAA CREF uses a lot of scare tactics, including trying to discredit anyone who calls questioning their policies or authority. They will ask you in the conference call if you have disclosed all of your fees to the client. Like it is any of their business. I wish I had it on a recorder when I called once before, they actually said "Mr. client, you know if you keep your investments here it is free, that guy you are sitting with will charge you a huge fee to invest this money." I kept calm during the call, and prepared the client generically for this type of treatment, but wow was I steaming mad. If they do everything for free I will eat my left foot. TIAA CREF is starting to have career agents call on near term retirees with higher account values, so the lack of service thing only goes as long as they are young or have small accounts. As soon as you call on an account with any money, the troops are deployed. My advice is to really do some work to educate the client on 'retention' strategies and how you don't play those games, but you may have to help the client get 'their' money out of the other firm.