The great TIAA CREF low cost 403b signed on to LAUSD’s 403b list in 2001. Then they tried unsuccessfully to get the United Teachers Los Angeles (UTLA) “Union Approved” stamp.  

My decade-old story is timely today. The resistance to TIAA CREF entering the PreK-12 educational profession remains strong. Teachers seldom have low cost 403b plans. My story provides clues as to the reasons why the resistance to low cost 403b companies in the PreK-12 market continues to this day.

For the record UTLA terminated the union approval stamp process in 2008.

Chapter 6

TIAA CREF (T/C)’s Effort to Get “Union Approved”

2001

A Maryland native landed in our state, a man so determined the elegant palms rustled along Sunset Blvd and the TSA agents’ flawless tresses shook in his wake. Brian Cressey was the new director of TIAA-CREF’s (T/C) Southern California office. He was blindsided by the pitiful 403bs options available for California educators. With the energy of Captain Ahab and the demeanor of a Zen Master he went to work.

After registering his company onto the Los Angeles Unified School District (LAUSD) 403b list his next step was to apply for the coveted United Teachers-Los Angeles (UTLA) “Union-Approved” stamp.

Under Cressey’s leadership T/C immersed itself with UTLA and went further, a lot further, than submitting the union approval application:

• T/C purchased 24 full-page advertisements costing $22,000 for the twice a month UTLA newspaper.
• Set up two satellite offices to assist LAUSD teachers with 1 to 1 consulting to answer questions by appointment and fill out applications.
• Signed an agreement with the best 403b website in the country, 403bwise.com, to offer online information specific to UTLA members, besides TIAA CREF’s own web services.
• Los Angeles Community College District chose T/C as the preferred vendor for their 457b plan due to Carolyn Widerner’s unconditional support.

Carolyn Widerner was the Executive VP of the Community College Faculty Guild (union) and the CalSTRS board member mentioned in Chapter 3. She spoke positively of T/C as did our 403b Aware group for identical reasons, low costs and almost a century of looking out for educators’ best interests.

More TIAA-CREF (T/C) Outreach

Mr. Cressey reached out in earnest offering three full days each month to provide individual financial advice and group seminars in Los Angeles and Orange Counties. His team invited Southern California PreK-12 districts and community college faculty to  many seminars, including these:

• “Staying on Track in a Market Downturn”
• “A Woman’s Money, A Woman’s Future”
• “Taking a Realistic Look at Equity Returns”
• “Foundations of Estate Planning”
• “Planning Retirement Income”
• “The 2001 Tax Law-Change Means Opportunity”

Mr. Cressey and staff were regular contributors at our 403b Aware group meetings, workshops and the Community College Faculty Guild Annual Benefits Conference. Not bad for a new Californian (more about this fearless man in Chapter 7).

UTLA accepted T/C’s $22,000 ad money without question, but had reservations about everything else. This chapter explained why T/C never got union approved and can be instructive for employees who want to initiate changes with their employer or union.

The previous year our 403b Aware group conducted the first-ever 403b workshop. We continued to make friends with influential people in the union. We thought things were progressing. However, the “honeymoon” with the union leadership went from benign indifference to outright contempt.

I didn’t understand UTLA’s abject unresponsiveness to T/C request for presentation from some union officers. UTLA routine selects not-for-profit vendors to contract for many different professional services such as holding conferences at hotels that have unions. Since T/C is a not-for-profit company, I thought T/C was a shoe-in, after the acknowledgement of T/C as an available vendor at the UTLA annual conference and its 95-year history with higher education institutions. Our Los Angeles neighbor, the Community College District, without question selected T/C as their preferred 457b vendor. T/C and UTLA were a perfect match, I thought. I was wrong, not fully comprehending the politics. The secretive and highly established culture of this union and their union-approved TSA vendors were tight.

Smear Letter?

The UTLA Treasurer who chaired the Member Services Committee forbade a hearing of T/C. This committee hears presentations from outside companies (computers, disability insurance companies, etc) seeking “Union Approved” status. In return for the stamp vendors agree to provide discounts to members for their products or services, door prizes at meetings and conferences, etc., nothing complicated (A 2006 Los Angeles Times investigative report found no backroom deals). When I asked the treasurer if he got T/C’s application, he complained they never showed when invited to present, even though T/C confirmed to me they never got an invitation.

The indifference turned ugly. One of the members of the Member Services Committee (the committee in charge of selecting vendors for “union-approved” status) informed me the Treasurer claimed T/C “smeared” him. She said the treasurer wrote on his own letterheadto all the Committee members about T/C’s alleged smear. She never found the Treasurer’s letter she received.

What a rude awakening. What prompted the Treasurer to go down this route? Was he getting pressure from union members to approve T/C while getting opposition from the approved vendors? LAUSD played strange games with their 403b policy and vendors. But this perverted reaction made LAUSD look like the grown-up in the room with its own trite 403b policies.

The differences between UTLA and the Los Angeles Community College Guild (Union) seemed unreal! The Guild accepted T/C without question while my union, UTLA, wanted nothing to do with them.

In My Opinion…

How could this discrepancy between two unions with overlapping members exist? The UTLA approved vendors have a relationship with the union for decades. LAUSD’s educators gave $100+ million dollars each year, most to these entrenched UTLA approved vendors. TSA presentations and exhibits at the union hall, school cafeterias and after school union meetings with the complimentary doughnuts, sandwiches and beverages are as familiar and entrenched to the educational culture as books, pencils and paper are to students. Many of 700 LAUSD school principals, UTLA chapter chairs and office managers knew the salespeople by first name, many were friends. Many agents claimed to be either former teachers, working teachers moonlighting as agents or claimed their mom, spouse or friend is a teacher.

With the union’s 45,000 members as potential clients the approved vendors aren’t going to chill while a low-cost, not-for-profit competitor might get union approved. TSA agents post on 403bwise.com with ad hominem lies about T/C. Given this picture of so much money at stake, can you imagine the approved vendors having no conversation with UTLA?  T/C never had a chance.

 Summary

Ignoring T/C without a hearing is one thing, but claiming one of the biggest and most respected pension plans smeared an obscure union officer is an appalling small-minded scheme. In my opinion UTLA’s handling of the prestigious TIAA CREF and their legitimate request for a simple presentation was cursory and unprofessional. In 2002 new UTLA officers were elected.