Wallet covered in Red Tape

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

Part I: In which Joel tries to act like a grown up.


You know how there’s always an ad or 50 every week about investing money? Or how you listen to Planet Money all the time because it happens to be on as you are driving from work? And how all those ads and programs encourage you to start saving for retirement. Diversify. Roll-overs. Fully-Vested. Insert other jargon terms that hold zero meaning to me no matter how many times I read definitions.

Reading investment terms makes me nuts – which is sort of ironic since I copyedit a financial newsletter every week. I understand about 10 percent of it. After nearly two years, NONE of it has sunk in. The same is true for ironic. I’ve read the definition of irony 100 times, and had it explained to me about as many, but it’s never stuck. I hope my life never depends on me knowing the definition of ironic.

So there’s going to be some difficulty with telling the following true as shit story about my retirement funds. But what I can do is lay out the case, try to make it readable for people like me who hate lawyer/MBA-speak and let you decide.

This is going to be a series of posts detailing how my 401(b) (or 403(b), like I said, financial terms are meaningless to me, and the info I get from TIAA-CREF doesn’t help the situation), which includes all my retirement savings from 6 years at two jobs, has been hijacked.

Case History, in which I rack up retirement savings for 6 years

I started socking money away into a 401(k) plan at my first job as a reporter at the Daily Journal. I made so little at the time, that doing this put me into credit card debt of $3,000, which was about the same amount I had contributed to the 401(k). There was no employer match, so there was not much benefit to doing their plan other than to start saving for retirement. I put in 7 percent at the time. As a 23 year old, I think that was one of my finer moments in forward thinking.

Retirement savings took a break for several years when I returned to school. The money stayed safely tucked away, ready to be rolled into whatever was next, which was North Dakota State University.

The North Dakota University System’s retirement plan through TIAA-CREF seemed too good to be true. I put in 1.5 percent of my pay, and the system put in 5.5 percent. This raised to 2 percent from me and 9 from the system after two years. This kind of employer match is INSANE. I felt ashamed. Like if the taxpayers of North Dakota found out about it, they would revolt and take my head. Looking at their website, it appears that sanity has hit someone in the system and this ratio has been changed in 2013 to something approaching reality. Not there yet, mind you, but less nuts.

I rolled in the few thousand I had already saved at my prior job. And after 5 years (and an economic recession that hated any chance at growth in the dang thing) I got it up to $21,000. This isn’t much, but over another 25 years, it will grow, right? And TIAA-CREF gets to collect some nice fees throughout that time.

During my 8 months of unemployment, when we were craig’s listing and pawn shopping anything we could out of the apartment to make some gas money, I tried to withdraw some of that savings. They wouldn’t let me. They said withdrawals were not allowed. My guess is that this is to protect people from withdrawing willy nilly, but in practice, it made my time of unemployment with NO checks coming in so much harder, more depressing, and crushing as bills piled up and creditors kept calling. Thoughts about death become comforting in such times, not suicide, but just thinking about death. Finding out that another possible lifeline was off limits didn’t help to stop such thinking.

But we made it through somehow.

Then I landed a new job and started a new 401(k). The new company has a more reasonable match plan. They match my contribution up to 3 percent, and they match half of my contribution for the next 2 percent. That’s all “free” money for contributing. I’m doing 4 right now. Hoping to up that to 5 at some point this year.

Anyway, a year ago, I decided to start the process of rolling my NDSU retirement funds over into the new plan.

This is where things get bat shit crazy. As in, there’s no way this is legal kind of crazy.

Seriously: Crazy Ahead

I called TIAA-CREF to find out how to fill out the transfer paperwork and how much exactly was in my account. The guy on the other end says, “Oh wait, hold on.”

I wait.

He comes back on the line. “OK, it says here that you are not allowed to transfer the funds.”


“These funds are non-transferable until you are 55.”

Jaw drop
Jaw Drop-a-Thon!

jaw drop 2 jaw drop 3 jaw drop 4

“That can’t be right,” I say. “You’re saying that I can’t touch the retirement funds that I put in there to roll them into a new 401(k), or anything?”

“That’s correct.”

“That sounds like the worst plan I’ve ever heard of.”

I’m sorry you feel that way.”

“I mean, that’s just nuts. And I can’t do anything about it?”

“Nope. Is there any other way I can help you?”

“That’s not a serious question is it? I’m going to go check with NDSU, cause there’s no way that this is a real thing.”

It is. Dear sweet Jebus on a stick, it is more real than it has any right to be in a universe that pretends to value things that make sense.

Part II will detail several email exchanges with NDSU about this issue. In part III, I confront the North Dakota University System and TIAA-CREF and share those calls with you. Stay tuned.

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3 thoughts on “TIAA-CREF and North Dakota Stole $28,000 From Me: Part I

  1. I just retired from 43 years of faculty service with SUNY and spent several hours talking to my retirement rep. I told him how I was planning to use my retirement money to make investments myself. He was adamant that I should move some of it into a bond fund offering a low stable rate of return which would be paid out over 10 yearly payments. I have had a small portion of my retirement in such a fund during my career, so I agreed to have 20% moved into that investment. I checked my account for a few days and was horrified at eventually find he had moved 100% of the state contribution into that fund locking most of my retirement money up which would not allow me to use it for self-managed investing as I had told him I was planning to do. I was furious and called him and everyone else in the company I could find. They all told me it was too bad and it could not be changed.
    I have contacted an attorney who specializes in class action suits and He believes there is a good winnable case here. We are looking for any people that this has happened to who would be willing to participate in in this suit. This is worth many thousands of dollars to those of us who have been caught in this situation. Why should we give decades of faithful service only to allow these greedy people to steel our hard earned retirement money for their own benefit??
    Jim Woodhull, woodhujr@yahoo.com

  2. I would like to know if you made any progress in this battle. My wife a former NDSU Prof is looking at options and is now at another institution in another state and would like to move that money. Anything knew?

    1. Unfortunately, we called everyone involved and could not get anything to budge. So now i’m just waiting until I hit 55 and can get it out of there. I’m sure at this point that even then they’ll have some rule that I can’t roll it out, but only take installments. That is, if it even exists anymore.

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