TIAA Accused of Pilfering $50M in Plan Loan Repayments

TIAA siphons interest payments from university and nonprofit workers who take loans from their TIAA-managed retirement plans, a new lawsuit alleges (Haley v. Teachers Inv. & Annuity Assoc., S.D.N.Y., No. 1:17-cv-00855, complaint filed 2/3/17).

The proposed class action, filed Feb. 3 by a participant in Washington University’s 403(b) retirement plan, claims that TIAA systematically fails to credit the interest on plan loan repayments to the account of the participant who took out the loan, instead keeping some of that interest for itself. TIAA earns more than $50 million in “ill-gotten gains” each year from this practice, ...