In December, 2012, a revenue credit will be posted to the TIAA-CREF accounts of participants in the Washington State University Retirement Plan (WSURP) or the Voluntary Investment Program (VIP). The TIAA-CREF investment vehicles have associated costs to cover administrative and recordkeeping components of your account. TIAA-CREF has notified WSU that these costs for 2011 and first half of 2012 were lower than expected, hence resulting in a revenue credit.
Human Resource Services sent a notice to active participants of this change on Tuesday, December 18, 2012. TIAA-CREF sent a similar notice to inactive and retired WSURP and VIP participants.
Questions and Answers regarding the Revenue Credit
1. What is the revenue credit I am receiving from TIAA-CREF?
TIAA-CREF charges fees to the investment accounts offered through TIAA-CREF that are used to cover administrative and recordkeeping costs. From 2011 and the first half of 2012, the amount paid towards these costs was greater than what was needed to cover the actual costs. The excess is being returned to WSURP and VIP participants as a revenue credit.
We were later notified by TIAA-CREF the deposit would not occur until the week of January 7th, for active participants. For separated employees with TIAA-CREF accounts, the deposit will be occuring mid-January.
3. How will the credit be invested?
The credit will be invested in accordance with the allocation participants have identified/selected for their accounts.
In the event future administrative and recordkeeping fees exceed the actual cost of administering the plan, revenue credits could/would be issued.
Per TIAA-CREF, prior to 2011 all employer accounts were administrated jointly, and associated fees were not determined on a plan-by-plan/employer-by-employer basis. This allowed TIAA-CREF to adjust fees across the board, either lowering them (when there was a revenue credit), or raising them. As of 2011, TIAA-CREF administers accounts on a plan-by-plan basis. This has resulted in participants on some plans being issued a revenue credit, if under their plan they paid fees that exceeded actual costs, which is the case for WSU’s plan. Reversely, if the plan the individual participates in did not collect sufficient fees to cover the costs, these participants could see an increase in associated fees in the future.
TIAA-CREF has informed WSU this is not possible; credits can only be addressed via the revenue credit process.
Contact TIAA-CREF at 1-800-842-2776.
TIAA-CREF at 1-800-842-2776.