Despite a low interest rate environment in the United States, for the second year in a row, the TIAA Board of Trustees has voted to increase total income (guaranteed income plus additional amounts) in 2014 for participants who receive lifetime annuity income from the TIAA Traditional Annuity.1
Board’s decision reflects strong capital position
The TIAA Board of Trustees’ decision reflects the strong capital position of the General Account, which supports the TIAA Traditional guaranteed fixed annuity. Although participants in the TIAA Traditional Annuity do not invest directly in the General Account portfolio, the investment performance of that portfolio supports the annuity’s minimum guaranteed returns, additional amounts and payout obligations. TIAA’s General Account is the source of the earnings, financial strength and stability that back the TIAA Traditional Annuity.
Below are details for those receiving income from the TIAA Traditional lifetime annuity:
- If you’re receiving income from the Standard Payment Method, your monthly payments will increase by about 2% in 2014.1
- If you’re receiving income from the Graded Payment Method, your income will increase on average about 4.9% for 2014 and 2015.1
- The Principal and Interest rate, which is applicable to beneficiaries who want to receive interest only from TIAA Traditional, is 3% for 2014, the same rate as 2013.
Participants who are receiving annuity income from TIAA Traditional should consult the Outreach newsletter .
Stabilizing income
Launched with the founding of TIAA in 1918, the TIAA Traditional Annuity is a guaranteed fixed annuity. TIAA Traditional helps stabilize the income of annuitants through the guaranteed income it provides. Participants may also receive additional amounts, which are determined annually by the Trustees of TIAA and are not guaranteed for future years. Each December, the Board of Trustees of TIAA sets the rates that determine income levels for the following calendar year.