Some TIAA-CREF Customers Temporarily Lose Access to Their Money.

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Author: Pulley, John L.

Thousands of TIAA-CREF's customers have been unable to withdraw money from their accounts during the past two months or to transfer assets among funds managed by the giant pension company. The problem arose in November, during the transition to new data-management systems, the company said last week.

The disruption comes at an inopportune time for the company, which has seen its dominance of the higher-education pension-fund market erode in recent years. A key strategy for righting itself is giving customers more options and making financial transactions easier, features that require the replacement of old electronic platforms.

The total number of people affected by the glitch could be as high as 15,000, about one-half of 1 percent of the company's 3.2 million customers, according to a spokesman for TIAA-CREF, formally the Teachers Insurance and Annuity Association-College Retirement Equities Fund.

"As a proportion of our overall client base, it's a relatively small number," said Glen Weiner, the spokesman. "For the people who have been impacted, we understand that this is a big problem."

The company said it had fixed the errors that it knows about, but it conceded that there may be customers with unresolved problems. "We want them to contact us," Mr. Weiner said.

But contact with the company has led to frustration and anger for some customers.

Leland G. Alkire had expected a routine transfer of $15,000 between TIAA-CREF funds on the first trading day of January. When the transfer did not occur on time, as it had for nine consecutive years, he checked the company's Web site. It told him that the funds no longer existed.

Several telephone calls to TIAA-CREF by Mr. Alkire, a retired faculty member at Eastern Washington University, and his wife, Cheryl, resulted in their being put on hold for lengthy periods, according to an e-mail message that they sent to The Chronicle. A fellow retiree reported waits of three hours, Mr. Alkire said in a telephone interview.

The couple eventually took their concerns to his former employer. Eastern Washington's benefits officer "said she is being overwhelmed by calls from people who are not getting their money," the couple wrote.

The transfer of funds finally took place a week late, but the delay meant that the couple had missed out on investment gains of $500.

"It's clear that they need a management shake-up," Mr. Alkire said.

Mr. Weiner acknowledged that "participants have a right to be angry."

The company apologized for the "inconvenience" in a form letter, blaming the problem on "an internal operational issue" and offering to pay bank charges that accrued to customers as a direct result of TIAA-CREF's error. The company said it had sent letters to all affected customers.

But Joanne Sedriks, of Lawrence, Kan., said she had never received such a letter.

She requested a transfer of funds from a TIAA-CREF account to her bank account on November 10. When the money failed to arrive, she called the pension company but was "given a runaround," she said. Then she "panicked" and put in a second request for funds, said Ms. Sedriks, whose husband, a former drama professor at Wayne State College, in Nebraska, died in 2001. Funds from his TIAA-CREF account, which make up a small part of the $360-billion managed by the company, are Ms. Sedriks's primary means of financial support.

The requested withdrawal eventually arrived â€" twice â€" more than a month after she had made the first request.

She was never given an explanation for the delay, she said.

"For the people who have been impacted, we understand that this is a big problem."

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By John L. Pulley