criticalmass wrote: ↑Thu Oct 01, 2020 8:49 amI ... TIEIX has the same expense ratio for all holders. ...
I am sorry to make it more complicated for the OP, who (reasonably) thought he asked a simple question. Both TIAA's decisions, and current trends in institutional retirement plans make evaluating total fund costs quite complicated.
The earlier reply noting "Plan Administration fees" is a helpful start. In addition, to get an "Institutional" class of a fund (like TIEIX, for example) it is usually necessary to invest in an account that has ways other than EXPENSE RATIO to collect income.
In addition, it's NO LONGER POSSIBLE to speak only about expense ratios when discussing mutual fund costs inside employer plans:
When funds have exceptionally low expense ratios, TIAA collects "Plan Servicing Fees", pegged to the size of the holding, in ADDITION to the expense ratio. When funds have moderate or high expense ratios, TIAA remits (to the customer) "Plan Servicing Credits", also pegged to the size of the holding. I believe these costs are related to the inability to offer Revenue Sharing on rock-bottom cost funds, like Vanguard Index Funds (for example.) Conversely, Plan Servicing Credits are intended to compensate the client (well, at least partially) for the transfer of mutual fund income to TIAA, like Revenue Sharing.
TIAA Quote: "TIAA Plan Servicing Fee: A fee paid to TIAA for the costs of recordkeeping, administrative, compliance and employee services that TIAA performs on behalf of the plan sponsor."
Edit: Added quote:"... an annual plan servicing fee of 0.09% ... will be deducted from investments that offer no revenue sharing on a quarterly basis. ... If the revenue sharing amount is less than 0.09%, the difference is applied as a plan servicing fee."
This is related to the current trend to hire TIAA (and others, like Fidelity) to administer a retirement plan, with the investment choices more controlled by the employer than by the plan operator. Presumably a college that engages Fidelity or Vanguard to run a retirement plan has to compensate Fidelity or Vanguard in some way.
I recently paid Plan Servicing Fees in my TIAA RA account (at a small New England private college) for Vanguard Total Bond Market Index Fund Admiral, Vanguard Small-Cap Index Fund Institutional, and Vanguard Total International Stock Index Fund Institutional. At the same time, I got a Plan Servicing Credit for TIAA Real Estate (which happens to be a Variable Annuity, but let that go for now!)
