TIAA-CREF has agreed to pay more than $19.5 million after allegations that it illegally skimmed money from account holders.
Several college instructors accused TIAA-CREF of keeping money their accounts earned between the time the instructors tried to transfer or withdrawal money and the time TIAA-CREF completed the transaction. TIAA-CREF, the lawsuit alleges, kept roughly $40 million in such gains it should have turned over to its customers. The settlement money will be divided up pro rata by nearly 59,000 educators. The value of the proposed settlement is about half what plaintiff’s attorneys accused TIAA-CREF of keeping. TIAA-CREF is also agreeing to pay $3.3 million in legal fees.
TIAA-CRAF did not admit wrongdoing in the settlement, which has received preliminary but not yet final approval from a federal district court judge in Vermont.
"We are pleased to have reached a settlement, which is pending court approval,” a spokesman for TIAA-CREF said in an email. “We continue to deny any wrongdoing and have resolved this litigation to avoid the distraction and expense of litigation. As always, our clients remain a top priority for us.”