Report Finds Faults at TIAA-CREF

An independent report released Thursday found shortcomings in the governance structure at pension fund TIAA-CREF and provided new details on how two trustees entered into a business deal with the fund’s auditors and kept other trustees in the dark.

TIAA-CREF, a nonprofit organization that manages more than $340 billion for academics and researchers, has been known as an advocate for good corporate governance.

But two of TIAA-CREF’s trustees were forced to resign last year as a result of a business deal they had with auditor Ernst & Young.

The report by former U.S. Atty. Gen. Nicholas Katzenbach found problems with TIAA-CREF’s unique and complicated structure. For instance, the report said the TIAA wing of the group had both a board of trustees and a board of overseers.

“The obvious solution to potential conflict would be elimination of the board of overseers, perhaps through merger with the TIAA board,” the report said. “There is no compelling reason for it to exist as a distinct entity.”