TIAA-CREF has been chosen as the Los Angeles Unified School District's new 403(B) retirement plan provider.
Having completed the tendering process, TIAA-CREF will now offer low cost annuities to the district's school teachers, administrators and staff. As a non-profit organisation, TIAA-CREF charges expenses at its cost, which results in low expense levels on its annuities. Its total fees for LA Unified range will from 0.25% to 0.64% annually. According to Morningstar research, the average industry charge for variable annuities is 2.13%.
Speaking about TIAA-CREF's selection, Brian Cressey, second vice president, TIAA-CREF, and director of its Los Angeles office, said: In the Los Angeles district, we clearly heard their call for high-quality retirement funds that are not saddled with high fees and commissions.
403(b) is the section of the US Internal Revenue Code that entitles employees of eligible non-profit organisations to save for retirement by participating in a tax-deferred annuity program. Contributions are tax-deferred, and interest and earnings accumulate on a tax-deferred basis. Generally, people choose to divert a percentage of their salary to 403(B) plans, and in some cases, employers offer matching contributions.
Based in New York, TIAA-CREF currently has $290bn in assets under management and provides retirement plans to education and research institutions in the US. TIAA is the Teachers Insurance and Annuity Association, and CREF is the College Retirement Equities Fund, an open-end, diversified management company registered with the federal Securities Exchange Commission. TIAA-CREF also provides mutual funds, mutual funds IRAs, tuition savings programs, and trust services to the general public.
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