TIAA-CREF Opens Personal Trust Subsidiary

TIAA-CREF, the largest private pension system in the world, opened its doors for personal trust business on Thursday.

TIAA-CREF Trust Co., St. Louis, will seek business from the two million participants in the national pension system its parent manages, as well as from the general public.

Its New York parent organization, Teachers Insurance and Annuity Association College Retirement Equities Fund, was founded in 1918 to manage retirement plans for educators. TIAA-CREF has $236 billion of assets under management in pensions for 8,200 employers, including universities and secondary schools.

It expanded into trust soon afer moving into the mutual fund market. TIAA-CREF began offering a family of six no-load mutual funds to its participants in September and to investors outside the pension system in February.

The trust company operates under a thrift charter and is registered with the Securities and Exchange Commission as an investment adviser. It will initially field internal referrals, and plans to have a staff of 40 by the end of the year, up from 20 today.

In addition to targeting the traditional high end of the trust business, which typically works with bank trust departments, TIAA-CREF intends to be accessible to a broader market.

"We will have what I would call a very classic peer trust operation, with all the bells and whistles for high-net-worth clients," said Joseph J. Gazzoli, president and chief executive officer of the trust company.

"We also clearly have as part of our mission to be there to serve TIAA- CREF participants when they need us, even if they only have $200,000 or $300,000," he said. Mr. Gazzoli added that he expects the first trust clients from outside the TIAA-CREF system to be relatives of participants.

Before joining TIAA-CREF in April 1997 to establish the trust business, Mr. Gazzoli was executive vice president in charge of personal trust at the former Boatmen's Bancshares, St. Louis, which has since been bought by NationsBank Corp.

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