1905 Financial Security for Teachers
In 1905, Andrew Carnegie established the Carnegie Foundation for the Advancement of Teaching with the express purpose of improving the financial security of instructors. Ultimately, the foundation also made other important contributions to higher education, like creation of the Educational Testing Service, which continues to be the nation’s leading source of useful student exams. But economic enhancement of teaching remained a priority.
In 1907, Carnegie specifically prodded his foundation to investigate the possibility of providing insurance for faculty members. A few years later the foundation began to explore deeply how a practical system of pensions for professors might be created. Several reports later the foundation established the Teachers Insurance and Annuity Association, a private firm seeded with a $1 million grant from Carnegie. In the years following, TIAA received an additional $7 million of donations from Carnegie before it matured into a self-supporting company. A conservative investment strategy allowed it to not only survive but flourish during the Great Depression. Then when inflation made traditional annuities less attractive during the 1950s, the organization created innovative stock-savings accounts under its College Retirement Equities Fund umbrella.
TIAA-CREF’s success and rapid growth allowed academics access to some of the best and most affordable financial services in the U.S. By 2014, TIAA-CREF managed more than $564 billion of teachers’ assets, and served almost five million individuals.