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TIAA-CREF has agreed to pay $97 million in restitution to tens of thousands of customers who were fraudulently misled into moving their retirement investments into higher-fee accounts offered by the company, New York attorney general Letitia James announced Tuesday. Over the course of six years, tens of thousands of customers were pressured by TIAA advisors to move their investments from low-cost, employer-sponsored retirement plans to higher-cost, individually managed accounts. The program was significantly more expensive for clients and generated hundreds of millions of dollars in fees for TIAA, James said.
"For years, TIAA put profits over people, taking money from people’s hard-earned retirement funds," said James. "TIAA made hundreds of millions of dollars misleading clients and pressuring them into higher-cost investments that picked away at tens of thousands of investors’ retirement accounts."
A TIAA spokesperson said, "We cooperated with regulators, and we’re pleased to settle this matter that covers a time period that ended more than three years ago. We regret the times that we did not live up to our clients’ expectations of us. We have learned some valuable lessons and have applied those lessons to enhancing our training, supervisory controls and disclosures. We started implementing some of these enhancements even before regulators opened their investigations, and we continuously look for ways to better serve our clients’ interests."
