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BY BARBARA PALMER Human Resources administrators are continuing to try to come to an agreement with TIAA-CREF, a nonprofit provider of financial services with decades-old ties to Stanford, to allow employees to contribute retirement funds to TIAA-CREF using the Stanford Retirement Manager system, said Diane Peck, executive director of Human Resources. Stanford Retirement Manager, launched over two phases on the BenefitSU website, consolidates employee and university contributions to retirement plans, including the Tax Deferred Annuity Plan (TDA) and the Stanford Contributory Retirement Plan (SCRP), into one account using an automated system designed by Fidelity Investments. Employees currently can choose to direct retirement contributions to funds managed by Fidelity, the Vanguard Group and TIAA-CREF. Administrators had expected that TIAA-CREF would, like the Vanguard Group, agree to participate in the Fidelity-designed Stanford Retirement Manager, but that hasn't happened. Currently, all employees go to the Stanford Retirement Manager website to enroll or to change the percentage of their salary they wish to contribute to SCRP, including contributions made to TIAA-CREF, said Sue Cunningham, benefits program manager. However, employees who choose to contribute to TIAA-CREF must visit a TIAA-CREF website or customer services office and receive separate financial statements from TIAA-CREF, she said. Approximately 20 percent of university employees contribute retirement funds to TIAA-CREF and contribute 28 percent of total retirement funds to TIAA-CREF. Ties between the nonprofit fund and Stanford go back to 1905, when Andrew Carnegie donated millions to set up a pension system for professors, which later was converted to the 85-year-old Teachers Insurance and Annuity Association -- College Retirement Equities Fund. Stanford added the Stanford Retirement Manager tool in part to more efficiently track compliance of employee retirement accounts with federal law, Peck said. Before PeopleSoft software was implemented for payroll and reporting, the department used an in-house system that did not truly consolidate financial information, Peck said. When the new software replaced the existing personnel systems, Human Resources was faced with a choice of spending "a couple of million dollars" to create an information system or to go to a vendor that already had developed a system, she said. "Like most organizations, we did the latter," she said. "I don't know anybody who builds their own capability anymore. It's just too expensive, not only to do it from scratch but to maintain it." Peck said the department asked for requests for proposals before deciding to implement a system designed by Fidelity. TIAA-CREF did not have an automated tool available, Peck said. Since then, TIAA-CREF has objected to requirements of Stanford Retirement Manager and declined to participate. "My understanding is there is a good deal of dialogue going on between Stanford and various people at TIAA-CREF," said Richard Shafer, a regional vice president for TIAA-CREF. "It seems to me that everybody is intent upon finding a good workable arrangement." "We have put so many ideas on the table to try and get some way to make this work, " Peck said. "Given that we haven't accepted defeat, I don't want to forecast what might happen," she added. "At the end of the day, I would like a solution that will allow people to participate in whatever fund choice they want and do it with as much ease as possible. That's our goal. We are in a very tough financial situation and for us to have to spend a lot of money to solve this problem would not be a good outcome."
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Stanford Report, July 9, 2003
