TIAA-CREF, the $200 billion retirement system for educators, will open a personal trust division early next year that will initially offer financial planning, a spokesman confirmed.

The unnamed trust services group will be available to the 1.9 million current and future retirees in the Teachers Insurance and Annuity Association-College Retirement Equities Fund, a multiple employer pension system.

TIAA-CREF declined to disclose what charter it would get for regulatory authority to act as a trustee.

This month, the company named Joseph J. Gazzoli president of its trust division. He had been an executive vice president in personal trust at the former Boatmen's Trust Co., St. Louis, which was acquired by NationsBank Corp.

He resigned from NationsBank late last year and will make St. Louis the headquarters of TIAA-CREF trust services.

"It's a logical extension of the retirement planning and insurance services we've been providing for nearly 60 years," a TIAA-CREF spokesman said. "Our clients have a great amount of confidence and trust in us. They have expressed a desire for us to offer trust services."

TIAA-CREF may have a captive audience. It is unlikely its clients would meet the seven-figure trust minimums set by traditional providers, such as banks, said Kim E. Baptiste, a partner in the trust and estate department of Schulte, Roth & Zabel, a New York law firm.

"This is not the type of client that typically deals with corporate trustees," Mr. Baptiste said. "Out of default, a lot of people will stick with TIAA-CREF."

Cross-selling trust services to pension fund clients is not a new approach. Personal trust salespeople at banks have done it for years with mixed success, according to Daniel J. Wroblewski, president of First Trade Union Trust Co., Los Angeles.

First Trade, which manages pensions for labor unions, has at times considered using its personal trust services as a way to retain assets of clients who are retiring.

"The jury is still out on whether that works," said Mr. Wroblewski, a former personal trust sales manager at First Interstate Bancorp and Northern Trust Corp.

TIAA-CREF's move into an additional fee-income business coincides with its loss of status as a tax-exempt organization. Under a provision of this summer's federal tax legislation, the earnings of TIAA-CREF's pension operation became taxable for the first time. Previously, TIAA-CREF only paid taxes on sales of annuities and life and disability insurance.

The TIAA-CREF spokesman said the foray into financial planning is not in response to the tax-status change.

"This is not in any way a consequence," he said. "This was in the works. This was planned significantly before we even became aware of the possibility of losing the tax-exemption."

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