TIAA Traditional and Gains

[austin3515]

1) Can someone please explain why the TIAA-Traditional account shows Realized and Unrealized gains on the statement of changes in net assets? It seems unusual for a guaranteed investment.

2) Related question: Why don't the CREF Mutual Funds have to pay any dividends? Is it because 100% of the investors are tax qualified plans?

[austin3515]

I just read a note written by an auditor regarding this very topic:

Per discussion with TIAA-CREF, and review of the TIAA-CREF Auditor Guide, ____notes that the realized and unrealized gains and losses on the TIAA Traditional Annuity represents interest. The TIAA Traditional provides both guaranteed interest and discretionary interest. The guaranteed interest is recorded as earnings in the trust report. In order to record the discretionary interest, the TIAA-CREF recordkeeping system unitized the TIAA Traditional Annuity and the discretionary interest is recorded as realized and unrealized gains in the trust report. Accordingly, _____ will reclassify the realized and unrealized gains to interest income