Cut costs, enhance outcomes: The next evolution in plan design
Time to read: 3 minutes
TIAA RetirePlus® is a QDIA-eligible retirement plan default solution that delivers institutional-quality portfolio management at 41% lower fees and expenses on average.1
Diligent plan sponsors increasingly demand what sounds like the impossible: lower fees and better participant outcomes. However, both goals can be pursued through plan design that upgrades a standard target date fund to take advantage of scale and strategic product building blocks. TIAA RetirePlus, a model-based solution that can serve as a qualified default investment alternative (QDIA) under ERISA rules,2 can provide plan participants with more for less. An analysis of TIAA RetirePlus implementations shows that participants invested through TIAA RetirePlus save an average of 41% in lower fees and expenses compared to those who are not.
The anatomy of cost savings
TIAA RetirePlus can deliver better retirement readiness,
- Optimized building blocks for strategic allocation. TIAA RetirePlus models can blend actively managed and index strategies to harness the efficiency of broad market access when appropriate, while retaining active management when that skillset can add value.
- Low fees. Unlike many custom target date solutions that add layers of fees for professional management, TIAA RetirePlus allows for sophisticated portfolio construction and ongoing oversight without additional wrap charges.3
- Access to institutional share classes. The scale and structure of TIAA RetirePlus may unlock lower-cost institutional investment options that small plans and individuals typically can't access.
- Supports consultant value-add. TIAA RetirePlus’ cost efficiencies allow consultants to add their expertise and customization while still delivering net savings to participants. It's a win-win that enhances the value proposition for all stakeholders.
The TIAA Traditional advantage
Many plan sponsors that use
Unlike mutual funds, fixed annuities don’t have a stated expense ratio. Instead, they work more like bank certificates of deposit (CD), where the cost is accounted for when determining the interest rates participants receive. With CDs, the purchaser pays no fee because the bank invests the purchaser’s money in return for a specified interest rate. Similarly, with in-plan fixed annuities, expenses are factored in before the interest rate that’s applied to account balances or retirement check amounts is set.4
Since 1948, TIAA has credited interest above our guaranteed rates on one or more contracts every year and has paid more total lifetime income benefits than it has guaranteed every year since 1949.5
The bottom line: Demonstrable savings and better outcomes
Fees on investments have trended downward, and TIAA RetirePlus represents the next phase of value for employees—allowing them to pay less while also gaining access to features that address modern retirement challenges.
For ERISA plan sponsors seeking a cost-effective way to put participants on track for secure retirements, TIAA RetirePlus is an option to consider.6
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1 Represents the average expense ratio of TIAA participants using TIAA RetirePlus® models compared to those that are not using TIAA RetirePlus models. Expenses for TIAA RetirePlus models vary and are dependent on the underlying plan menu. Based on an analysis of 595 client plans where TIAA is the recordkeeper and all participants have access to TIAA RetirePlus. All participants are weighted equally. As of December 31, 2025.
2 TIAA RetirePlus Pro® is an investment advisory service that provides a custom-model approach with the ability to personalize glidepath(s) based on plan demographics. The fiduciary or 3(38) investment manager chooses the investment options and allocations in the portfolios, including investments that may not be on the core menu. TIAA RetirePlus Select® is a service that provides a predefined set of asset allocation models. Allocations and years-to-retirement approach are determined by Mesirow Financial®. Mesirow is not affiliated with TIAA. Mesirow refers to Mesirow Financial Holdings, Inc. and its divisions, subsidiaries and affiliates. The Mesirow name and logo are registered service marks of Mesirow Financial Holdings, Inc. ©2024, Mesirow Financial Holdings, Inc. All rights reserved. Advisory services offered through Mesirow Financial Investment Management, Inc. an SEC-registered investment advisor.
3 Fees may be assessed for TIAA RetirePlus Pro services outside the customary administration and servicing of the plan. Three different TIAA RetirePlus Pro fees may be assessed on a regular quarterly basis: Plan Advisor Fee—Fee charged by the investment consultant retained by the plan to develop the Models and assign participants to Models paid out on a quarterly basis; Model Service Fee—Fee charged by a third-party advisor to provide supplemental advisory services to the plan or investment consultant in the situation where a plan already has an investment consultant, but chooses to hire an additional, separate third-party advisor solely to support the Models; Program Sponsor Fee—Fee that covers expenses incurred by TIAA in administering TIAA RetirePlus Pro.
4 Unlike CDs, fixed annuities are not FDIC insured. Fixed annuity interest rates may change periodically and there is no fixed maturity date.
5 TIAA may share profits with TIAA Traditional Annuity owners through higher interest and income benefits beyond guaranteed amounts which, when declared, are guaranteed for the declaration period.
6 TIAA does not provide legal or tax advice. Consult your legal counsel to determine how to structure your plan.
You should consider the investment objectives, principal strategies, principal risks, portfolio turnover rate, performance data, and fee and expense information of each underlying investment carefully before directing an investment based on the model. For a free copy of the program description and the prospectus or other offering documents for each of the underlying investments (containing this and other information), call TIAA at 877-518-9161. Please read the program description and the prospectuses or other offering documents for the underlying investments carefully before investing.
This material is for informational, educational or non-fiduciary sales opportunities and/or activities only and does not constitute investment advice (e.g., fiduciary advice under ERISA or otherwise), a securities recommendation under all securities laws, or an insurance product recommendation under state insurance laws or regulations to invest through a model or to purchase any security or advice about investing or managing retirement savings. It does not take into account any specific objectives or circumstances of any particular customer, or suggest any specific course of action.
No registration under the Investment Company Act, the Securities Act or state securities laws—the model is not a mutual fund or other type of security and will not be registered with the Securities and Exchange Commission as an investment company under the Investment Company Act of 1940, as amended, and no units or shares of the model will be registered under the Securities Act of 1933, as amended, nor will they be registered with any state securities regulator. Accordingly, the model is not subject to compliance with the requirements of such acts, nor may plan participants investing in underlying investments based on the model avail themselves of the protections thereunder, except to the extent that one or more underlying investments or interests therein are registered under such acts.
No guarantee – Neither the models nor any investment made pursuant to the models are deposits of, or obligations of, or guaranteed or endorsed by TIAA or their affiliates (except with respect to certain annuities sponsored by TIAA or its affiliates), or insured by the Federal Deposit Insurance Corporation, or any other agency. There is no guarantee that the underlying investments will provide adequate income at and through retirement and participants may experience losses. Participants should not allocate their retirement savings to the underlying investments unless they can readily bear the consequences of such loss.
Assets allocated to the underlying investments based on the model will be invested in underlying mutual funds and annuities that are permissible investments under the plan. Some or all of the underlying investments included in the model may be sponsored or managed by TIAA or its affiliates and pay fees to TIAA and its affiliates. In general, the value of a model-based account will fluctuate based on the performance of the underlying investments in which the account invests. For a detailed discussion of the risks applicable to an underlying investment, please see the prospectus or disclosure document for such underlying investment.
Converting some or all of your savings to income benefits is an irrevocable decision once benefit payments begin.
TIAA RetirePlus Select® and TIAA RetirePlus Pro® are administered by Teachers Insurance and Annuity Association of America (“TIAA”) as plan recordkeeper. TIAA-CREF Individual & Institutional Services, Member FINRA and SIPC distributes securities products. SIPC only protects customers' securities and cash held in brokerage accounts. TIAA and CREF annuity contracts and certificates are issued by Teachers Insurance and Annuity Association of America (TIAA) and College Retirement Equities Fund (CREF), New York, NY, respectively. Each is solely responsible for its own financial condition and contractual obligations. Transactions in the underlying investments invested in based on the models on behalf of the plan participants are executed through TIAA-CREF Individual & Institutional Services, LLC.
TIAA RetirePlus®, TIAA RetirePlus Pro® and TIAA RetirePlus Select® are registered trademarks of Teachers Insurance and Annuity Association of America.
TIAA Traditional is a fixed annuity issued by TIAA (Teachers Insurance and Annuity Association of America), New York, NY: Form series including but not limited to: 1000.24; G-1000.4; IGRS-01-84-ACC; IGRSP-01-84-ACC; 6008.8. Not all contracts are available in all states or currently issued. TIAA contract guarantees are subject to TIAA’s claims-paying ability.