[Congressional Record Volume 143, Number 128 (Tuesday, September 23, 1997)]
[Extensions of Remarks]
[Page E1828]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]


 INTRODUCTION OF LEGISLATION TO RESTORE THE TAX EXEMPT STATUS OF TIAA-
                                  CREF

                                 ______
                                 

                          HON. RICHARD E. NEAL

                            of massachusetts

                    in the house of representatives

                      Tuesday, September 23, 1997

  Mr. NEAL of Massachusetts. Mr. Speaker, recently, Senators Moynihan, 
D'Amato, and Graham introduced legislation to repeal the provision in 
the Taxpayer Relief Act of 1997 which terminated the tax exempt status 
of TIAA-CREF, the Teacher's Insurance Annuity Association College 
Retirement Equities Fund. Today, along with Representatives Rangel, 
Matsui, Kennelly, Coyne, Lewis of Georgia, and Thurman, I am 
introducing companion legislation.
  This legislation would simply strike section 1042 of the Taxpayer 
Relief Act of 1997 which repeals the tax exempt status of TIAA-CREF and 
Mutual of America. This legislation would restore the tax exemption 
that TIAA-CREF has had since its establishment in 1918 by the Carnegie 
Foundation. TIAA-CREF provides retirement benefits exclusively for 
employees of U.S. colleges, universities, independent schools and other 
nonprofit educational and research organizations. TIAA-CREF serves 
nearly 2 million current and retired employees at over 6,000 
institutions. This repeal also would restore the tax exemption for 
Mutual of America, which has served as pension administrator for 
welfare organizations for over 50 years and is modeled after TIAA-CREF.
  The repeal of TIAA-CREF's 79-year old tax exemption might cost the 
average retiree who receives a $12,000 annual pension about $600 in 
income and this is a 5-percent reduction in pension benefits. Future 
retirees currently paying into the system could face reductions as 
large as 10 to 15 percent. Many of these retirees are not wealthy and 
they include librarians, assistant professors, and teachers at 
community colleges.
  TIAA-CREF was established to insure that the Nation's college 
professors had adequate retirement. TIAA-CREF serves as a model for 
multiemployer pension plans. The creation of TIAA-CREF enabled teachers 
to save for retirement even if they moved from school to school. TIAA-
CREF has always been well managed and sought to shield unsophisticated 
investors from too many choices and risks. Throughout its history, 
TIAA-CREF has maintained a well run pension fund with large reserves. 
The management of TIAA-CREF has focused on counseling and education. We 
should be awarding such plans, not punishing them by removing their 
tax-exempt status. I urge you to join me as an original cosponsor of 
this legislation.

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