Happy New Year’s Eve!
In preparation for the year 2020, where hindsight is, I have some advice for teachers and others in academic, research, medical, cultural, and governmental fields regarding their retirement savings. After my divorce from a teacher, I spent my life savings surviving post-traumatic stress disorder (PTSD) and starting my new life, including this website and shop and publishing books and magazines (“zines”). I also became a Zumba® instructor! And I bought a 2016 Subaru Outback that is the best vehicle I have ever owned by far. The only money I have left is my share of the retirement savings my ex and I earned together. I would have invested this money already, but it was not available to me when I needed it. I was lucky to be able to get it into my individual retirement account (IRA) so that I can access the money soon (since I am over 50 years old). What I found out along the way has led to the following advice:
- Don’t count on your retirement money if it’s invested in the Teachers Insurance and Annuity Association (TIAA) because there truly is no oversight!
- Don’t sacrifice your youth or health for the promise of retirement someday when you are old and sick and in pain and can hardly do or enjoy anything.
- Don’t invest any more in the TIAA retirement plan than you must for your job.
- Transfer your money to your IRA or take the cash minus taxes if you need it and if you can because you no longer work there, are divorced or are a widow/widower, for example.
- Don’t let too much time pass before you act because if you miss an arbitrary deadline set by TIAA, they might be able to keep your money until you retire or die.
The whole system is based on unsustainable growth. Addiction to continuous, double-digit economic growth is pure greed. Conflict of interest is inherent due to the need to grow your money above and beyond enough to pay themselves always more and get more people beneath them to manage, since those are accepted metrics of success in today’s and yesterday’s business world. The more money they manage, the more power and control they have. Who are “they”? “They” are the people who have the money = power. “They” are old men, mostly white, investing in yesterday. They are so risk-adverse that they expect to profit ever more from control of our necessities. They take what belongs to all and then ration it back out minus their enormous profits. Well, it has worked for them for a long time. But the only thing that doesn’t change is that things change.
TIAA is a nonprofit private retirement firm that has celebrated over 100 years in business. TIAA’s products include investment, banking/loans, and insurance. TIAA is the leading provider of financial services in the academic, research, medical, cultural, and governmental fields. Before you invest any more of your money in the TIAA retirement plan, you should know that most of TIAA’s real estate investments are in regions of the country more at risk due to climate change. The rare Midwestern investments include at least two new luxury apartment high-rises here in the Twin Cities. Many of these buildings around town have “For Lease” signs, including the empty street-level commercial spaces. Why are they building so much “Luxury” and “Upscale” housing when most people can only afford “Affordable” housing? Where are the jobs? In advertisements on LinkedIn for people like me with a Ph.D. degree (mine is in Microbiology and Immunology), TIAA suggests that I serve on a Board of Directors. Where are these jobs posted? Or are they just more volunteer positions that are beginning to seem more like exploitation when people without Ph.D. degrees are getting paid to manage the business or “non-profit”?
TIAA has also been accused of land grabbing in Brazil and other regions by an organization called Friends of the Earth. “By perpetuating large-scale industrial plantation agriculture, TIAA’s land investments perpetuate the destruction of our environment. Allowing foreign investors to dominate the land market squeezes our family farmers and local communities…” (Email received 10/9/2019.)
Starting in the 1950s, during the Civil Rights Movement, the U.S. government put the farm funding in the hands of the local, white political establishment. African Americans were not even allowed to vote. And they were not given the crop subsidies and loans that were given to white farmers who were competitors. Now, TIAA and other pension funds who show up at the bankruptcy auctions own more land in the Mississippi Delta than black farmers do. So, people are calling for reparations due to the Federal government’s discriminatory policies that led to over 12 million acres of land being transferred from 1 million African American families to TIAA and other corporate entities. (Democracy Now!, “The Great Land Robbery: How Federal Policies Dispossessed Black Americans of Millions of Acres,” August 16, 2019.)
Why have banks and auto companies been bailed out with federal government debt when the teachers’ retirement in Puerto Rico was bailed out with debt sold as assets that was purchased by retirement funds for teachers in the mainland? If Puerto Rico has financial problems, due to a hurricane, for example, then teachers in the mainland aren’t going to get their retirement either. Where is the federal government guarantee and oversight? Or do only banks and auto companies, and not educators, get bailed out in the USA?
Organizations like TIAA who now own a lot of our real estate dictate the prices, terms, and conditions of rents and leases. They would rather let a place sit empty than let someone start a new business. Only people with a lot of money can rent. Like in science, you can get a job if you can get a government grant to do research; but you can’t get a grant without a job. So, in answer to the questions of the privileged as to why the rest of us can’t thrive, it’s because you are way too greedy.
Recently, I was surprised to learn that TIAA, a directed record keeper for the Minnesota State Colleges and Universities (MNSCU) Individual Retirement Account Plan and MNSCU Supplemental Retirement Plan (the Plans), does not act in a fiduciary capacity when processing Qualified Domestic Relations Orders (QDROs) for the Plans. A fiduciary is a person or organization that acts on behalf of another person or persons to manage assets. That TIAA does not act in a fiduciary capacity when processing QDROs impacts any teacher who gets divorced. Further, if TIAA has no fiduciary duty regarding QDROs, then what fiduciary duty, if any, does TIAA have? What are the impacts on retirements of teachers and others in academic, research, medical, cultural, and governmental fields?
I discovered TIAA’s lack of fiduciary duty regarding QDROs through my divorce and QDRO. TIAA still owes me over $1,000. I explained the matter to the State of Minnesota Attorney General Keith Ellison’s office who then wrote a letter to TIAA. In their response, TIAA wrote the following: “TIAA is a directed record keeper for the MNSCU Individual Retirement Account Plan and MNSCU Supplemental Retirement Plan (the Plans) and does not act in a fiduciary capacity when processing Qualified Domestic Relations Orders (QDROs) for the Plans.”
The U.S. Department of Labor, Employee Benefits Security Administration (EBSA) only oversees private-sector pension and health plans. “There truly is no oversight,” they said!
Where is the oversight? Who has the authority to order TIAA to respond to an individual consumer complaint or to take a particular course of action in a given case? I am reporting this case because I believe it gives reason for concern that our teachers deserve to know. Employees, spouses, and next of kin need to know and understand the implications of how our retirement is being managed by an organization that does not appear to be acting in our best interests. What is the due process?
Below is the last letter I wrote to TIAA. I am still waiting for a response more than 8 months later…
Lots of Love,
April 13, 2019
Teachers Insurance and Annuity Association of America
730 Third Avenue
New York, NY 10017-3206
Dear Teachers Insurance and Annuity Association of America (TIAA),
Please mail me the instructions for your appeals process so that I can write an administrative appeal to report problems with my Qualified Domestic Relations Order (QDRO). TIAA still owes me $1029.51 due to error and obstruction on TIAA’s part. Further, the facts of this case show that TIAA did not fulfill their legal obligation, their fiduciary duty, to act in my best interests. TIAA clearly acted in its own best interests, contrary to my best interests. I have a witness and documentation of the facts of this case detailed below.
My ex-husband and I requested a direct rollover of the funds to my Traditional IRA account in writing to TIAA multiple times starting before November 7, 2018. I had a divorce and QDRO qualifying as a separation from service and giving me the right to request a direct rollover. In response to the QDRO, TIAA transferred the funds to new accounts that they created in the wrong name, i.e., my previous name that was changed during my divorce. TIAA has known about my name change since at least June 19, 2018 when they sent a letter responding to the Certificate of Dissolution received on June 18, 2018.
TIAA did not honor my written requests for a direct rollover. As stated in the last letter to me from TIAA dated February 13, 2019, the IRS Special Tax Notice 402(f) “was sent to your online account on December 19, 2018. Also, keep in mind that this notice is only applicable when you initiate a distribution request. For this reason, you only received to your online account after you requested the distribution.” I had been requesting a direct rollover starting before November 7, 2018, so why was the IRS Special Tax Notice 402(f) not sent to me until December 19, 2018? I have received plenty of correspondence to my address listed above and even to my email. So, why was the IRS Special Tax Notice 402(f) not sent to my home or email address if TIAA was acting in my best interests? And why wasn’t I notified that the form had been sent to an online account I didn’t even know I had? I never authorized or even wanted an online account. I received the IRS Special Tax Notice 402(f) for the first time in a letter dated January 10, 2019, and then only pursuant to my request in an email to TIAA on January 2, 2019. TIAA still maintains that they have done nothing wrong.
When I finally received the IRS Special Tax Notice 402(f), I learned that, “If you choose a direct rollover, the Plan will make the payment directly to your IRA or an employer plan.” But this is not what happened. TIAA’s error setting up my accounts in the wrong name and their inability to fix the problem in a timely manner or even admit they made a mistake ended up costing me over $1029.51 as my funds lost money while they delayed the transfer yet again. I tried multiple times over the phone with TIAA to get my name corrected. TIAA told me over the phone that my name would be corrected in 2-3 days, but it was not. I wrote a letter to TIAA dated December 12, 2018 inquiring about the wrong name on correspondence they sent me. I received a “Notice of Name Change form” on December 22, 2018 that was dated December 12, 2018. It was when I told TIAA that I would write to my state Attorney General and the judge who signed the QDRO and the public that TIAA finally fixed my name and processed my request for a direct rollover.
I also learned from the IRS Special Tax Notice 402(f) that payments made under a QDRO are exempt from the 10% additional income tax on early distributions. As my ex-husband Dr. Michael G. Klug, Ph.D. can attest, TIAA has assured us for the last six months that I would have to pay the 10% penalty if I took an early distribution. This incorrect information is in TIAA’s interest but not mine if they do not want to give me my money. This is especially true since my ex-husband made it very clear to TIAA that I was homeless last summer and needed the money.
If TIAA were indeed acting in my best interests, then they would have written the QDRO to reflect all my legal options instead of just the one option that is in TIAA’s best interest but not mine, i.e. that the funds be applied to TIAA annuities. If TIAA were acting in my best interest, then one would have expected TIAA to send me the IRS Special Tax Notice 402(f) back in June of 2018 detailing all my options. Still, I requested a direct rollover all along, and my request was denied.
Even though Dr. Klug informed TIAA in writing last June that I have PTSD, TIAA has been triggering my PTSD severely for over six months now, as my ex-husband is my witness. Getting triggered is life-threatening to me. I have been long-term unemployed through no fault of my own. I am an experienced and accomplished doctorate level scientist (Ph.D. Microbiology and Immunology, Indiana University School of Medicine 1997). Even though I had money saved, I have been denied places to rent and denied the opportunity to start a business such as a dance studio or contract testing laboratory, especially with the very large real estate holdings by organizations like TIAA who demand income before they will rent property.
TIAA is trying to convince teachers like my ex-husband and their families to invest more money in their retirement portfolios. However, I really felt the whole time during my extensive interactions with TIAA that they did not want to give me my retirement funds that I have earned. Indeed, I had to fight tooth-and-nail over six months of time and starting more than two years ago to get my money from them. I also found that TIAA made grave errors while still asserting that “TIAA has made no error.” It concerns me that TIAA is either incompetent or dishonest, and either way, I have little trust left in them and their promises for the future of this country.
I believe that I should have the court ordered amount of $ in my savings account free of the 10% early withdrawal tax instead of having $1029.51 less than the court ordered amount in my IRA where I will have to pay the 10% early withdrawal tax to access the funds before retirement age. I believe I had the legal right to have the funds accessible to me as cash and without the extra 10% penalty, which would be in my best interests and consistent with what my ex-husband and I requested. When I finally received the IRS Special Tax Notice 402(f) from TIAA after the fact and pursuant to my written request, I noticed on page 2 that payments made under a QDRO are exempt from the 10% additional income tax on early distributions (please see attached IRS Special Tax Notice 402(f), page 2). However, TIAA acted in their own best interests, not ours.
I really believe that TIAA has treated me and probably others wrongly and I am writing in hopes of justice and peace.
Dr. Marie D. Kube, Ph.D.
Documentation available upon request:
Qualified Domestic Relations Order (QDRO)
Copy of my letter to Minnesota Attorney General Keith Ellison describing why I believe TIAA is not complying with legal requirements
Copy of letter sent to TIAA on June 15, 2018 by my ex-husband Dr. Michael Klug, Ph.D.
Copy of letter from TIAA dated June 19, 2018 acknowledging receipt of Certificate of Dissolution
Certificate of Dissolution detailing my name change
Emails between Dr. Klug and TIAA on June 27, 2018
Email from Dr. Klug to TIAA on Sept. 2, 2018 with draft DRO document originally emailed by TIAA on June 26, 2018
Copy of letter from TIAA dated Sept. 6, 2018 stating that the draft DRO is unacceptable
Email from Dr. Klug to TIAA on Sept. 10, 2018 with revised draft DRO
Copy of letter from TIAA dated Sept. 14, 2018 stating that the revised draft DRO is acceptable and QDRO is required
Copy of letter sent to TIAA dated Nov. 7, 2018 with court certified QDRO and requesting that the funds be deposited in my IRA
Copy of letter from TIAA dated Nov. 13, 2018 stating that the DRO is unacceptable without the personal information that we were required to remove for the judge to sign
Email to TIAA on Nov. 30, 2018 with confidential information form and letter that was also mailed on December 3, 2018
Copy of letter to TIAA dated Dec. 12, 2018 regarding TIAA’s error setting up new accounts in the wrong name when I had requested a direct rollover
Copy of letter from TIAA dated Dec. 12, 2018 and received on Dec. 22, 2018 asking me to fill out a change of name form due to TIAA’s error
Copy of confirmation statement from TIAA of marital property division on Dec. 11, 2018
Copies of letters from TIAA dated Dec. 19, 2018 confirming my request to rollover my funds, which took place on Dec. 20, 2018
Email from TIAA asking me review IRS Notice 402(f) which was not accessible to me
Email to TIAA on Jan. 2, 2019 regarding the missing IRS Special Tax Notice 402(f) and $1029.51 less issued than court ordered
Email from TIAA on Jan. 3, 2019 acknowledging my Jan. 2, 2019 email
Copy of letter from TIAA dated Jan. 10, 2019 in response to my Jan. 2, 2019 email and Dec. 12, 2018 letter
Copy of letter to TIAA dated Jan. 24, 2019
Copy of letter from TIAA dated Feb. 13, 2019
IRS Special Tax Notice 402(f)