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Nuveen Lifecycle Income Index CIT Series

The Nuveen Lifecycle Income Index CIT Series (NLI Index CITs) seeks high total return over time through a combination of capital appreciation and income. Each Fund will strategically allocate to the TIAA Secure Income Account1 (“SIA”), a fixed annuity contract that pays guaranteed interest to the Fund. At retirement, subject to applicable Participating Plan requirements and applicable law concerning distributions, SIA affords the opportunity for participants to elect guaranteed lifetime retirement income.

Frequently asked questions

We have designed an interactive FAQ portal designed to help you effectively service the participants in plans that make the NLI available.

FAQ

Investments

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What is the Nuveen Lifecycle Income Index CIT Series (NLI Index CITs)?
  • NLI Index CIT consists of 12 target date funds – 2010 through 2065, in 5-year vintages.

    Each of the 12 target date vintages include a strategic allocation to the TIAA Secure Income Account (“SIA”). The strategic allocation to SIA is introduced at the very beginning of the glidepath, approximately 45 years from Retirement, at ~2.5%. The allocation will gradually increase until the assumed Retirement date, at which point it reaches a maximum strategic allocation of 40%. The purpose of the SIA allocation is to provide participants with the opportunity to build guaranteed lifetime income, during their working years.
How is the SIA allocation within NLI Index CIT sourced?
  • From ~45 years to Retirement until ~15 years to Retirement, the SIA allocation will be fully sourced from the U.S. Aggregate allocation. Beginning at ~15 years to Retirement, the NLI series will start to source SIA from the U.S. Aggregate, Short-Term Bond, and TIPS allocation.
Does SIA provide investment benefit, beyond its ability to be annuitized?
  • Yes, and particularly in the context of a multi-asset portfolio:
    -SIA helps protect against interest rate risk, which is particularly important for older participants who are generally more vulnerable to rising rate environments
    -SIA has principal protection
How does the TIAA Secure Income Account work?
  • While saving for retirement
    Contributions to the TIAA Secure Income Account receive competitive interest rates, regardless of market conditions. These rates will always be greater than or equal to the guaranteed minimum interest rate, which fluctuates between 1% and 3%.

    When one retires (in retirement)
    During retirement, the participants have the option, but not the obligation, to take lifetime income. They can:
    • Annuitize as little as $10,000 or up to their full allocation of the TIAA Secure Income Account if they have less than $10,000 in the account
    • Leave as-is or take systematic withdrawals from the investment option
    • Exchange or roll over into another investment (i.e., IRA) to generate retirement income

    Participants have full flexibility to make combinations of these decisions at any time as their retirement picture evolves. The only limitation is that annuitization decisions must be made before age 90 and in increments of at least $10,000 or the remaining balance of the account.
What type of money sources can be invested in the NLI Index CIT? Roth, after-tax, pretax, match, etc?
  • All these types are permissible subject to plan rules.
Is the TIAA Secure Income Account publicly traded or registered with the SEC? Is there a prospectus?
  • No. The TIAA Secure Income Account isn’t a securities product. It doesn’t have to be registered with the SEC, so a prospectus isn’t necessary. The TIAA Secure Income Account is a guaranteed insurance product. It is subject to oversight by state insurance commissioners including TIAA’s primary state regulator, the New York Department of Financial Services. The TIAA Secure Income Account isn’t a mutual fund and isn’t publicly traded, so there’s no public “ticker” for it, although for the purposes of trading and identification, CUSIPs and internal tickers exist.
Does more than one interest rate apply to a participant’s balance?
  • Typically, yes. The TIAA Secure Income Account credits interest based on when participants make a contribution or transfer. Think of it as interest rate “buckets.” Different portions of the account balance that are in different buckets may earn different interest rates. TIAA refers to these buckets as “vintages.” If participants contribute regularly over time, they will likely have balances in several different buckets, and the amounts in each of these buckets may earn different interest rates.
How does TIAA determine interest rates?
  • When setting interest rates, TIAA considers many factors, including the interest rate environment when the funds were contributed or transferred in, changes in interest rates over time, TIAA’s expenses, the financial experience of TIAA’s General Account, and the need to maintain adequate capital.

    While the investment returns of TIAA’s General Account don’t flow directly to TIAA Secure Income Account participants, interest crediting rates reflect, in part, the yields and earnings that TIAA obtains on bonds and other investments.
How might TIAA Secure Income Account declared interest rates behave in a rising/declining interest rate environment?
  • TIAA guarantees that the balance in the TIAA Secure Income Account will never decline even in a rising interest rate environment (assuming the contract is active). In a rising interest rate environment, it’s likely that newly declared interest rates under the TIAA Secure Income Account would also be rising. This contrasts with a typical bond fund, where rising interest rates may result in the bond fund balance decreasing.

    Conversely, during a declining interest rate environment, when it’s possible that a participant’s balance in the bond fund may be increasing, the balance in the TIAA Secure Income Account will not be affected. However, in this situation, it’s likely that newly declared interest crediting rates for the TIAA Secure Income Account wouldn’t be as high, resulting in a participant balance growing at a slower rate.
What are the main features of the TIAA Secure Income Account?
  • The TIAA Secure Income Account:
    • Guarantees consistently positive rates of return that are announced in advance
    • Protects principal and accrued interest from market volatility
    • Gives a participant an opportunity to convert some or all their balance to an annuity that will provide guaranteed retirement income that they, or their spouse or partner, can never outlive • Is fully liquid to a participant for balances not yet converted to lifetime income
    • Offers rates applicable to contributions and transfers (new money rates), which are declared periodically throughout the year and may change as frequently as monthly to provide an appropriate level of responsiveness to changes in the interest rate environment
    • TIAA groups the contribution dollars received over discrete time periods into rate
      buckets (also referred to as vintages), which are composed of one or more contiguous months.
    • Each time a new money rate changes, it creates a new rate bucket.
    • Once established, the interest rate associated with any such rate bucket will continue to be credited to amounts received during the established period through the end of TIAA’s declaration year, which ends on the last day of February.
    • As a result of this structure, over time, a participant may have balances attributable to multiple vintages, each of which may be credited with different interest rates (guaranteed minimum rate plus additional amounts of interest).
    • Effective each March 1, all vintages are reviewed for potential rate resets. Rates resetting on March 1 will be guaranteed through February 28 of the following year (February 29 in leap years).

Operations

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How will participants be mapped into the NLI Index CITs?
  • Participants will be automatically defaulted into their age-appropriate vintage, just like they currently are for our Lifecycle products. It assumes participants will reach 67 years old at the target retirement date and we expand +/-2 years from the target retirement date for each vintage.
Who keeps track of each participant’s accumulated benefits and associated TIAA Loyalty BonusSM?
  • TIAA will maintain data feeds that are fully integrated with recordkeeping and/or middleware platforms, allowing TIAA to perform participant level sub-accounting with respect to participant level benefits.
How will the NLI Index CITs trade?
  • Just like other CITs, the NLI Index CITs will trade via the NSCC with standard T+1 settlement. 
What happens when a Plan wants to redeem out of the NLI Index CITs?
  • Plans must notify SEI (Trustee of the CITs) of the Plan’s desire to redeem out of the Nuveen Lifecycle Income Index Funds at least 90 days prior to the Plan redemption date. Based on market conditions and SIA contractual restrictions, SEI may allow the Plan to redeem before the 90 day notification period elapses.

    For Plan redemptions, Nuveen expects to meet the redemption, on the Plan’s redemption date, such that the non-SIA assets are redeemed at market value and the SIA assets are redeemed at the SIA Adjusted Accumulation Value (AAV). You can think of the SIA Adjusted Accumulation Value (AAV) as a market adjustment to SIA, so that the remaining plan sponsors and plan participants are not negatively impacted by the Withdrawing Plan’s redemption. Note, the Adjusted Accumulation Value is capped at the Contract Accumulation Value of SIA.

    The SIA Adjusted Accumulation Value is calculated by multiplying the Interest Fluctuation Factor (IFF) with the SIA Contract Accumulation Value (CAV) on the Plan’s redemption date.

    If, at the point of Redemption, the Adjusted Accumulation Value is lower than the Guaranteed Minimum Accumulation Value (GMAV) then the plan level redemption will be met, in cash, at the Adjusted Accumulation Value. As an additional level of protection of the plan participants, we will deliver the difference between the AAV and GMAV via a guaranteed funding agreement. Alternatively, the Plan can elect to receive the Full SIA Contract Value to be delivered via a Guaranteed Funding Agreement payable over no more than 5 years (6 installments).

    Please note, the Guaranteed Funding Agreement is a General Account based solution intended to provide a more seamless experience to a client looking to terminate. It is not intended as a long-term option and TIAA would not be supplying this solution to a plan looking for a long-term stable value (or money market) replacement. We would set a crediting rate that aligns with the expected payout stream (i.e., over a 5-year term). Since this will likely involve a shorter average-weighted maturity/life than the investment strategy employed for the general account more broadly, we would anticipate the crediting rate would be lower in an upward-sloping yield curve environment. However, this is hypothetical and it is difficult to estimate as there are a variety of factors to consider here. But, that would be generally how we'd approach crediting rate setting in this scenario.
Are specific agreements required with each Plan’s recordkeeper?
  • Yes. Each Plan’s recordkeeper must enter into a Facilitation Agreement with TIAA. This Agreement will establish the data feeds that TIAA requires to perform participant level sub-accounting, specific to each participant’s accrued benefits. Additionally, each recordkeeper will need to have Non-Exclusive Servicing Agreement (NESA) in place with SEI. 

Participant experience

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Do participants have flexibility to invest in any/all of the vintages?
  • Yes. While the participant will be automatically defaulted into their age-appropriate vintage, they can actively elect to invest in any of the NLI Index CIT vintages – irrespective of their age. Note, this is not the case for all of our competitors. Some competitors age-gate their vintages, limiting the participants’ ability to invest with full flexibility, as a result of constraints placed by their annuity providers. That said, it is worth noting, if a participant liquidates their position in a NLI vintage and remaps into a different NLI Index CIT vintage, they will lose their accrued benefits.
Can the participant choose how much to annuitize?
  • Yes. The participant can choose to annuitize a portion or the entirety of the SIA allocation within the NLI Index CIT in which they are invested. For a full annuitization, there is no minimum dollar annuitization requirement. For a partial annuitization, a participant is required to annuitize, at least, $10,000. Note, here we are specifically referring to the assets invested in the underlying SIA allocation – not the amount of total asset invested in the NLI series. During, and throughout retirement, the annuitized participant will have access to a TIAA Lifetime Income Consultant and educational literature/content.
At what age is a participant eligible to annuitize?
  • Per ERISA tax rules, beginning at age 59.5, participants become eligible for penalty free annuitization and can annuitize at any point thereafter, until age 90. Note, subject to plan rules, participants may have the flexibility to annuitize before, or after, age 59.5. However, the lifetime income projections provided by TIAA assume participants are annuitizing at age 65 and selecting a single life payment with a 10-year period certain. Importantly, if participants annuitize before age 65, they would receive a reduced payout rate based on interest and longevity rates at the time of annuitization (similar to Social Security, which reduces payout for early registrations). Similarly, if participants annuitize after age 65, they would receive a higher payout rate based on interest and longevity rates at the time of annuitization.
Can the participant choose to annutize more than the assets they have in the SIA allocation within the NLI Index CIT in which they are invested?
  • Yes, the participant can choose to annuitize more than their SIA allocation within the NLI Index CIT in which they are invested. Since the amount above their SIA allocation was not invested in SIA, it did not accrue any loyalty bonus and therefore, will receive the new money payout rate offered by TIAA at the time of annuitization.
What happens if the participant does annuitize?
  • Upon annuitization, we envision the following processes:

    the participant’s balance, invested in the target date vintage, will be liquidated in proportion to the dollar amount they are seeking to annuitize and will be sent to TIAA.

    the remaining balance will stay invested in their existing target date vintage and TIAA will adjust the participant’s notional SIA balance pro-rata based on the actual withdrawal taken from the CIT.

    Any new dollars allocated to SIA, for the participant, will be invested at the new money rate (if the participant partially annuitizes, the un-annuitized SIA allocation will maintain its accrued benefits while all new dollars allocated to SIA will earn new money rates).
What happens if the participant does not annuitize?
  • If the participant chooses not to annuitize, they can stay in their age-appropriate vintage – or whatever vintage they’re invested in – and decide to take systematic withdrawals throughout their retirement. Note, in order for participants to take systematic withdraws, plan documents must allow for it.
Under what circumstances would a participant, invested in the NLI Index CIT, forfeit accrued SIA benefits?
  • A participant would forfeit their benefits, and any accumulated loyalty bonus, if they:
    • fully liquidate their position in the NLI (or roll their NLI balance from from employer A to employer B)
    • choose never to annuitize the SIA allocation within their NLI vintage
    • liquidate their position in their NLI vintage and remap into a different NLI vintage.
Is the target date solution, and the annuity benefit, portable?
  • This solution was designed with portability in mind. See below for certain examples of how this TDF solution, and the associated annuity benefits, are portable:
    Plan Level Recordkeeper Change: the NLI Index CITs, and any associated accrued benefits, are fully portable to another recordkeeper that also support the NLI Index CITs.
    Participant Level Rollover: a participant can liquidate their position in the NLI Index CIT vintage, and roll their Secure Income Account balance into a TIAA annuity, within a TIAA IRA, while maintaining their loyalty bonus.
    Participant Termination: Subject to plan rules, the participant could retain their balance in-plan and receive all of the benefits of the in-plan structure. If the plan does not allow terminated participants to remain in-plan, then the option to rollover to a TIAA fixed annuity within a TIAA IRA would be available, as described above.
    See description of different Loyalty Bonus portability scenarios
What resources are available to help participants evaluate their annuitization options?
  • To help the participant with the annuitization decision, they have access to a TIAA Lifetime Income Consultant and educational literature/content. Specifically, participants will benefit from:
    • Answers to questions about the benefits of lifetime income
    • Personalized lifetime retirement income illustrations
    • Answers to questions about how to begin lifetime retirement income and payment options
    • Help with choosing type and frequency of lifetime retirement income payments, joint life annuities and minimum guarantee payment periods
    • Discussions at or near retirement about:
    - Optimizing lifetime income start dates
    - Benefits of lifetime income
    - Various income options
    - Value of TIAA Secure Income Account accumulation
    - Process to begin to elect lifetime income payments
For participants that annuitize, how will they get paid and interact with TIAA following annuitization?
  • Participants that elect to convert some or all of their balance in the TIAA Secure Income Account to lifetime income will begin to receive monthly, quarterly, semiannual or annual payments directly from TIAA. The frequency of payments and mode of delivery will be based on the participant’s election on TIAA’s lifetime income selection form.

    TIAA will provide 1099R tax forms directly to the participant.
How are lifetime income payments treated for tax purposes? 
  • Although we can’t provide tax or financial advice, the income the plan’s participants receive under a lifetime income election will be taxed appropriately based on the source type of the contributions used to purchase the life annuity.

    For example, lifetime income purchased with pretax contributions is ordinarily fully taxable as ordinary income.

    However, if the plan’s participants have made after-tax contributions to the plan, all or part of their lifetime income may be tax free. The tax-free portion depends on how much they’ve contributed and the structure of the lifetime income.
Can participants who annuitize choose how much tax they want withheld from lifetime income payments?
  • Participants residing in the United States may generally choose the amount to be withheld.

    Participants who do not make an election to withhold will have federal income tax withheld from lifetime income as if they were married claiming three withholding allowances.

    A participant’s state of domicile or residence may also require income tax to be withheld from lifetime income annuity payments.

    Special withholding rules apply to payments made overseas or to non-resident alien individuals.
Will lifetime income payments count towards a participant’s required minimum distributions?
  • Participants required to take Required Minimum Distribution (RMD) in the year they begin annuity income will automatically satisfy the amount required for the inaugural year in direct proportion of the amount converted to lifetime income.

    Beyond the inaugural year, lifetime income payments do not satisfy RMD calculated on assets not converted to lifetime income.

    Participants may elect to fully satisfy RMD prior to annuitization. Lifetime income payments will be in addition to the RMD, with no non-RMD impact to the non-annuitized balances.
If a plan has multiple money sources, how is that handled?
  • Recordkeepers with plans using the TIAA Secure Income Account that include multiple money sources (EE/ER, post-tax/pretax) will need to either support the proration of the investment amount across money sources on their platform, or preferably, provide an account identifier on the files sent inbound to TIAA to identify the record as belonging to another money source.

    If the participant is annuitizing amounts in pretax and post-tax sources, TIAA will rely on the recordkeeper to provide the split of the amount used to purchase the life annuity so that we can properly set up the payout annuity records and handle tax reporting.
What type of of lifetime income options are available if they decide to annuitize?
  • Participants can convert some or all of their TIAA Secure Income Account accumulation to guaranteed lifetime income.

    · Single Life Annuity pays income for as long as a participant lives.
    · Joint Life Annuity pays income as long as the participant or their designated survivor is living, including 50% to second annuitant (QJSA, if spouse); 66% to last survivor; 75% to second annuitant; and 100% to last survivor.
    · These options can include a guarantee period (i.e., 10, 15 or 20 years) so that payments will continue to those the participant designates if the participant passes before the end of the guarantee period.
    · Participants are permitted to annuitize multiple times over multiple time periods: e.g., participant annuities a portion of their account and then waits a few years while gauging their health status before deciding to annuitize some or all of their remaining balance.
How does the TIAA Secure Income Account help with retirement planning?
  • The TIAA Secure Income Account offers the benefits of any fixed annuity: It can provide stability, protection, and flexibility. It offers a solid foundation for retirement savings, because its guaranteed returns don’t fluctuate with market volatility, thereby protecting this portion of retirement savings from losses. This can be especially important as participants approach and live in retirement—when market downturns may have a more severe impact on one’s retirement plan or standard of living.

    The TIAA Secure Income Account can also provide a foundation of protected lifetime income. Participants can use this, for example, to help cover their essential living expenses in retirement. Of course, participants won’t be required to convert any of their account balance to lifetime income, but they have the choice.

    Any amounts that a participant doesn’t convert to lifetime income can remain in the account and continue to earn interest (depending on the rules of the employer’s plan). A participant can choose to withdraw these amounts in full or in part later, at whatever pace suits their needs.


Communication & education resources
Use the sample content in these target communications for benefit communications.

We're here to help

When your participants are ready to discuss lifetime income options, estimates of lifetime income, or want to learn more about how the SIA allocation of NLI can deliver a retirement paycheck for life, contact a TIAA Lifetime Income Consultant today at 844-7INCOME.. We are available Weekdays, 8 am–10 pm (ET) and Saturdays, 9 am–6 pm (ET). 

1. TIAA Secure Income Account is a guaranteed insurance contract and not an investment for federal securities law purposes. Any guarantees under annuities issued by TIAA are subject to TIAA's claims-paying ability.

Converting some or all of your savings to income benefits (referred to as "annuitization") is a permanent decision.  Once income benefit payments have begun, you are unable to change to another option. 

Lifetime income payments from TIAA Secure Income Account may include a TIAA Loyalty BonusSM which is discretionary and determined annually.

Retirement paycheck refers to the annuity income received in retirement.  Guarantees of fixed monthly payments are only associated with TIAA's fixed annuities.

Annuity contracts may contain terms for keeping them in force.  Plan recordkeepers can provide participants with costs and complete details.   

TIAA Secure Income Account is a fixed annuity product issued through this contract by Teachers Insurance and Annuity Association of America (TIAA), 730 Third Avenue, New York, NY, 10017: Form series including but not limited to: TIAA-UQDIA-002-K and related state specific versions. Not all contracts are available in all states or currently issued. TIAA Secure Income Account is issued by Teachers Insurance and Annuity Association of America (TIAA), New York, NY.

SEI Trust Company (the “Trustee”) serves as the trustee of the Nuveen Lifecycle Income Index CIT Series (the “Funds”) and maintains ultimate fiduciary authority over the management of, and the investments made, in the Funds. The Funds are part of a Collective Investment Trust (the “Trust”) operated by the Trustee. The Trustee is a trust company organized under the laws of the Commonwealth of Pennsylvania and wholly owned subsidiary of SEI Investments Company (SEI).

The Trust is managed by the Trustee based on the investment advice of Nuveen Fund Advisors, LLC, the investment adviser to the trust.

The Trust is a trust for the collective investment of assets of participating tax qualified pension and profit-sharing plans and related trusts, and governmental plans as more fully described in the Declaration of Trust. As a bank collective trusts, the Trust is exempt from registration as an investment company.

Important Information on Risk

Investing involves risk; principal loss is possible. There is no guarantee the Funds investment objectives will be achieved. The Funds are fund of funds subject to the risks of their underlying funds in proportion to each Fund allocation. Underlying funds invest primarily in stocks, bonds and real estate. Large cap stocks may grow more slowly than the overall market. Growth stocks and stocks issued by smaller companies are more volatile than other stocks. Bonds lose value when the issuer is unable to make interest and principal payment when due or faces a decline in its credit quality. They experience volatility when interest rates fluctuate. Rising interest rates can cause bond prices to fall. Non-US investments involve risks including currency fluctuation, political and economic instability, and lack of liquidity and differing legal and accounting standards. These risks are magnified in emerging markets. Real estate investment involves risk caused by economic downturns, reduced rents, property tax increases, and interest rate and tax law changes.

A plan fiduciary should consider the Funds’ objectives, risks, and expenses before investing. This and other information can be found in the Declaration of Trust and the Funds’ Disclosure Memorandum. The Fund is not a mutual fund, and its units are not registered under the Securities Act of 1933, as amended, or the applicable securities laws of any state or other jurisdiction.

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