TIAA-CREF and North Dakota Stole $28,000 From Me: Part II

No preamble. Part I is here. Moving on to Part II

So here’s the email I sent:


I worked for NDSU from January 2007 to September 2011, and contributed to the TIAA-CREF retirement plan during that time.

I am now with a new employer and was hoping to roll over my contributions into my current 401(k) plan. When I called TIAA-CREF, I was informed that this was not allowed and that the funds are not accessible at all until I’m 55.

I have a hard time believing NDSU would sign up for such a restrictive plan, and that I am not allowed to roll over the contributed funds into the new plan to save on administration fees for what is a relatively small amount of money.

Please tell me that TIAA-CREF is mistaken and that employee contributions to their retirement accounts are not locked in even when they move to better employment elsewhere. Thank you for your help.

Here’s what I got in reply.

Unfortunately, that is correct information.  The plan document developed for the entire North Dakota University System states that once a participant separates employment, they are not allowed to rollover or withdraw the funds unless they have less than $10,000 accumulated cash balance in their account or are age 55 or older.

I sent back a quick reply that never received a response. Not that I deserved one. I got a bit snippy, but wouldn’t you be if someone was holding 21,000 dollars of your money ransom? I’m actually proud that I didn’t swear up a storm. Anyway here’s what I said:

Thanks for getting back to me so quickly.

Wow, that’s a crappy plan. So will I be paying fees on this account for the next 20 years then?

Wow, stunned. Is the thinking that this will incentivize people to never leave the university system? I don’t see how this is a positive way to handle retirement benefits in any way shape or form, at least from the employee point of view.

Ugh. So I had a convo with the wife.

Becky: Someone could say it’s your fault that you didn’t do anything before it hit $10,000.

Me: No. I couldn’t do anything while I still worked there. It was a mandatory deposit from my paycheck, and you aren’t allowed to roll anything over if you still work at the place, so I’d have had to quit my job, roll it over, then get re-hired.

Becky: If it’s mandatory, this is not OK. You have no choice!

I emailed the 401(k) person at my new job to update her on what was going on. She was flabbergasted by this news. She had never heard of such a ridiculous and rigid plan. She also suggested I talk to the NDSU people to get their summary plan, so I did.

I sent another email to NDSU:

Where can I get a Summary Plan for the NDUS TIAA CREF retirement plan?

My current employer’s HR person is rather incredulous that this is an actual thing – a mandatory retirement plan that I invested in (and rolled over my previous 401(k) into!) that I now cannot manage or roll into my current 401(k) plan. Especially when the email newsletter I received just yesterday from TIAA-CREF notes:

Investment, insurance and annuity products are not FDIC insured, are not bank guaranteed, are not bank deposits, are not insured by any federal government agency, are not a condition to any banking service or activity, and may lose value.

So in essence, they won’t let me do anything, and won’t guarantee that they won’t mess it up, and I have no control over my retirement funds? I have trouble believing this is true.

Thank you for your help.

The Reply:

You still have the ability to move your funds within the plan to other investment options, you just aren’t able to take it out until age 55.  Here is a link to the plan document:

Thanks, NDSU

So basically the answer is you can move the money around within TIAA-CREF, kind of like playing a crane game at Chuck-E-Cheese – you can nudge the stuffed animals around the cage, but you’ll never claw any out, all the while paying fees to play.

Come for the fun, stay because we will never let you leave
Come for the fun, stay because we will never let you leave

I forwarded this on to my current HR person for help in deciphering the plan document. Her main response: “Wow, that’s tough!” She also gave me some advice on looking at certain IRS codes to see if there are any distribution rules that apply. My action on that has not happened. In any case, she said it would be a long shot and wished me luck in searching for a loophole.

I emailed NDSU again:

As the plan appears to have been amended in 1993 and 2003, any chance this will change in 2013?

Got this back:

Not that I am aware of.  The past amendments have never been in regard to changes in distribution rules.

Even with all the emails and phone conversations, it’s all so very hard to believe. I’m still reeling from this lock-box set up for the North Dakota University System that forces employees to put money into a retirement fund, doesn’t let them roll it over if they move on to bigger and better things, and essentially treats them like a child.

Becky: What do you mean?

Me: Huh?

Becky: Treat you like a child?

Me: Oh, well, I mean it’s like a parent saying “You have to put your money into this account, you don’t get a choice, and you don’t get to manage it until you are 55. Trust me, I know what’s best for you. You are too stupid to be trusted with your own money/retirement plans.”

Becky: I see. We’ll show them who’s responsible with money. We’re gonna take what we can get when we’re 55 and blow it all on one game of blackjack… But in all seriousness, aren’t you being more responsible with your money now because you don’t want to pay administration fees at two places?

On top of all of this, I just feel like I was ripped off from the money that I rolled into the NDSU system’s fund. I’ll likely be paying fees for this fund that I don’t even have any control over for the next 20 years minimum. I can’t take a loan against it. I can’t withdraw it. I can’t do a thing with it except to move it around within different TIAA-CREF investments.

What’s the problem with that, you may ask. It’s like any other 401(k), isn’t it?

No. It isn’t. Every accountant I’ve asked, every financial counselor, every HR person that works in retirement systems that treat people like adults, typically does not believe me that this exists. Every person I know who used to work for Higher Ed in North Dakota is surprised by the fact they can’t roll out their retirement funds. So it’s obviously not explained well at the time of enrollment. My accountant – a 70-year-old cartoon teddy bear of a stereotypical sweet elderly person you think might pull out a nice cuppa tea from his pocket while you sit there with your W2s – looked like he wanted to slap my mouth when I said I wasn’t allowed to roll out my 401 from North Dakota.

From this...
Let’s look at your donation deductions, shall we?
to this
You’re telling me you can’t roll it out?!

On top of all that, this is TIAA-CREF. I have a particular beef with them because when my wife called to roll out her investments from her time in MN higher ed., they had been putting her money into an account under the wrong social security number. So, my trust of their ability to handle my money and future = 0.

I’m not a corporate executive for crying out loud. These aren’t stock options I was given in the company I worked for. There are no federal rules to keep me from insider trading my $21,000. I’m a nobody.

I am super pissed about this, as you can likely tell by now. I don’t like being treated like a kid. I don’t like someone else holding my money without my having any say in the matter.

I think 1,400+ words is a bit much to ask of readers, so I’m ending part II here. In Part III I’ll talk to the person at NDUS who must handle dozens of calls like mine a month judging by her tone, who gives me the corporate-speak rundown on why they feel they can do this. I talk to TIAA-CREF in person and on the phone in hopes of maybe, hopefully, at the very least getting the $3,000 I rolled into the program from my previous plan. All that and more on why this sucks and why I consider it theft on Tuesday.


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1 thought on “TIAA-CREF and North Dakota Stole $28,000 From Me: Part II

  1. Columbia University/ Tiaa-Cref stole over 50K from me . Worked in B&G at Lamont Doherty from 80 to 85 when they decieded to replace alot of us with less paid “non English” speaking people. They promised me I would get my 401K money one day. For about 20 yrs I got statments then one a day a letter saying I was not vested afterall and that was that. Who got my money?

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