TIAA-CREF Chief On Managing A Financial Mess

In the midst of one of the most volatile stock markets in years, countless Americans are worried about their retirement savings — and how they should allocate their money.

Another person concerned about the retirement needs of about 3.4 million people is Roger Ferguson, the president and CEO of Teachers Insurance and Annuity Association — College Retirement Equities Fund (TIAA-CREF).

TIAA-CREF, a huge retirement system with $420 billion in assets under management, started out serving college professors. It has branched out over the years to include people in other nonprofit fields, including many in public broadcasting. (NPR has a relationship with TIAA-CREF.)

The conventional wisdom when it comes to retirement is to focus on the long term — and it's a point that Ferguson drives home, even for people in their 60s.

"The first thing that people have to recognize is that they will live in retirement for 25 years, 30 years, 35 or more," Ferguson tells NPR's Robert Siegel. "I send notes out to people who have reached 100 years old, and get a number of them back. And so the focus on the long term should not change, even if one is very close to retirement, or frankly, even if one is in retirement."

Ferguson says he is not concerned about baby boomers all choosing to take a payout at the same time. He says they will be able to access their funds.

He also says TIAA-CREF managed to avoid the subprime crisis because its subprime exposure was "really insignificant and miniscule."

That's because the company's risk management and asset management professionals decided the return wasn't high enough for the underlying risk for those securities, he says.

"They made what was a very, very good, smart calculation," Ferguson says. "We're also helped by the fact that we're a privately held, not-for-profit company, which means that we didn't have to chase incremental return to keep the quarter-to-quarter earning stream flowing."

Since Sept. 1, Ferguson says the nonprofit has recorded $500 million in new assets.

But there has also been a spike in calls — 15,000 of them on a recent weekend — from people wanting a "gut check" on the right portfolio in risky times.

"The only thing I worry about, frankly, is when the market drops, our call volumes spike," he says. "That tells me that people are staying glued to the screens, worried about the ups and downs of a very volatile market. And frankly, for my participants, I think they should be focused on educating and teaching, and spending less time worried about the ups and downs of markets, which are going to be beyond their control — and certainly in these troubled times, very volatile."

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