PLANSPONSOR - September/October 2024 - 23

Inside TIAA's $294 Billion
Investment Engine
TIAA CIO Emily Wiener discusses the firm's approach to its General Account portfolio.
ONE of the most powerful women in asset management got
an auspicious start in the business of financial security-but
not in the way you might expect.
A teenage Emilia " Emily " Wiener cut her teeth inside the
bill-counting " cash cage " at her local Kmart in Long Branch,
New Jersey. It was an eye-opening glimpse at the responsibility
of handling stacks of money and an early sign of her
affinity for numbers.
" My father, God bless him, marched me into Kmart and
said: 'She needs a job,' " Wiener says. " So they gave me a
math test and put me on the cash registers. Before long they
said, 'Oh: she's going to the cage.' " Hours were long, dinners
were eaten during short breaks and homework awaited after
clocking out.
Fast forward to today, and Wiener is the chief investment
officer for TIAA's $294 billion General Account, or GA, the
investment engine that paid out more than $5.7 billion in retirement
income to clients in 2023. She joined TIAA as head of
fixed income for the GA in 2016.
TIAA checked in with Emily about how the GA is managed
and the composition of the portfolio.
TIAA: Thanks for chatting with us, Emily. Can you give an
overview of the GA's approach?
Wiener: The GA is specifically built around delivering lifetime
income through TIAA Traditional, our flagship fixed annuity
product
for 403(b) plans.
In recent years,
the GA also has
begun to support lifetime income in 401(k) plans.
We are a liability-driven investor, so we focus on generating
predictable, stable and recurring income from our investment
portfolio to provide participants access to lifetime income.
Uniquely, TIAA can pass on additional crediting rates
and dividends to our participants after we pay our minimum
guaranteed rates, expenses and outlays. TIAA has credited
above minimum rate guarantees every year for over 70 years,
a streak made possible through careful portfolio construction
and diligent capital management.
TIAA: What have higher interest rates meant to the GA
portfolio?
Wiener: Rising interest
rates generally benefit
the GA, as
we can reinvest new money flows and portfolio turnover at
higher interest rates for the ultimate benefit of our participants.
Because interest rates had been so low for so long, the rise
in market rates has been a welcome reprieve in our work to
support participants with strong crediting rates.
QAR-3811140CP-Y0125WX
TIAA: What's inside the GA's portfolio?
Wiener: We maintain a highly diversified, multi-strategy and
global portfolio. About 85% of the GA portfolio is invested
in fixed-income strategies to produce stable, predictable
and recurring income through scheduled coupon interest
payments.
Our anchor fixed-income allocations are investment-grade
securities, both public and private, and high-grade commercial
mortgages. We also include allocations to high-yield fixed
income, structured credit and " safe haven " assets such as
U.S. Treasurys.
Our strategy is to maximize risk-adjusted returns within our
risk appetite, and we invest with the intention of holding to
maturity. We don't actively trade the portfolio to beat any total
return benchmark.
TIAA: How does the GA invest the remainder of the portfolio,
the part that isn't in bonds or commercial mortgage
loans?
Wiener: One thing that sets TIAA's GA apart is that we have
one of the largest capital bases in the industry. This financial
underpinning, combined with the inherent stability of our
liabilities, earns TIAA one of the highest credit ratings among
U.S. insurance companies.
This positioning allows us to dedicate a higher allocation to
alternative investments than many of our insurance company
peers. Alternatives can offer opportunities for diversification
and higher long-term risk-adjusted returns not available in
traditional markets.
We generally hold around 15% of the GA portfolio in real
estate equity, private equity and real assets, including timber,
infrastructure and farmland-think almonds, pistachios and
wine grapes. In real estate, we recently invested in housing
opportunities for low-income residents across the U.S. as part
of our impact investing strategy.
This is an excerpt from an article that appeared in the TIAA TMRW
Magazine.
To read the full article, visit: www.tiaa.org/public/plansponsors/insights/
tmrw/edition-3/how-tiaa-manages-americas-retirement-money
The TIAA General Account is an insurance company account and is not
available to investors as an investment. All guarantees are subject to
TIAA's claims-paying ability. Annuities are issued by Teachers Insurance
and Annuity Association of America (TIAA), New York, NY.
SPONSORED SECTION
http://www.tiaa.org/public/plansponsors/insights/tmrw/edition-3/how-tiaa-manages-americas-retirement-money http://www.tiaa.org/public/plansponsors/insights/tmrw/edition-3/how-tiaa-manages-americas-retirement-money
PLANSPONSOR - September/October 2024

Table of Contents for the Digital Edition of PLANSPONSOR - September/October 2024
