Teachers Personal Annuity
Profile
Individual Deferred Variable Annuity
September , 1997
This Profile is a summary of some of the more important points that you should
know and consider before purchasing the Contract. The Contract is more fully
discussed in the full Prospectus which accompanies this Profile. Please read the
Prospectus carefully.
(TIAA logo)
Teachers Insurance and Annuity Association
1. What Is The TIAA Variable Annuity Contract?
The TIAA Variable Annuity Contract (the Teachers Personal Annuity) is an
individual flexible-premium (you can contribute varying amounts) deferred
annuity funded through TIAA Separate Account VA-1 (the Separate Account), a
segregated investment account of TIAA. The Contract accepts only after-tax
dollars. The main purpose of the Separate Account is to accumulate, invest, and
then disburse funds for lifetime income or through a variety of payment options.
The Contract allows you to invest in one variable investment portfolio, the
Stock Index Account, as well as the Fixed Account or both. The Stock Index
Account seeks to achieve favorable long-term returns from a diversified
portfolio of domestic stocks. Like all variable annuities, the value of your
accumulation in the Stock Index Account will fluctuate depending upon how the
underlying investments do over time. TIAA does not guarantee the investment
performance of the Stock Index Account, and you bear the entire investment risk.
The Contract has two phases: the accumulation phase and the income phase. During
the accumulation phase, earnings accumulate on a tax-deferred basis and are
taxed as income when you make a withdrawal. The income phase occurs when you
begin receiving payments from the Contract, which currently can only be from the
Fixed Account.
2. What Are The Choices For Annuity Payments?
All annuity payments are currently paid from the Fixed Account. A variable
payment option is not currently available. You have a number of different
options for the payment of annuity income including: Single-Life Annuities,
which pay income as long as you live; Life Annuities with Guaranteed Periods,
which pay income as long as you live or until the end of the guaranteed period
of 10, 15 or 20 years, whichever is longer; Payments for a Fixed Period, which
pay income for a stipulated period of not less than two nor more than thirty
years; and Survivor Annuities, which pay income to you as long as you live, then
continue at either the same or a reduced level for the life of your annuity
partner. A guaranteed period or a fixed period may not exceed your life
expectancy or in the case of a survivor annuity,
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the life expectancies of you and your annuity partner. You can make or change
your income choices at any time before you begin to receive annuity income
payments.
3. How Is The Contract Purchased?
To purchase a Contract, you must complete an application and make an initial
investment of at least $2,000, or $25 using Electronic Funds Transfer (EFT).
Additional contributions must be at least $100, or $25 using EFT or an approved
payroll deduction program at your institution.
To be eligible for this account, either you, your spouse or domestic partner
must be employed (full- or part-time) by, or retired from, a nonprofit or
private elementary or secondary school, college, university or other qualifying
nonprofit Education or Research organization.
4. What Investment Option Is Available?
The variable component of the Teachers Personal Annuity allows you to invest in
the Stock Index Account. The Stock Index Account is a variable investment
account that seeks favorable long-term returns by tracking the overall market
for common stocks publicly traded in the U.S., as represented by a broad stock
market index, the Russell 3000(R) Index.
The Russell 3000 Index consists of the 3,000 largest publicly-traded U.S.
corporations, as determined by the value of their outstanding stock. These
companies represent approximately 98% of the total market value of
publicly-traded U.S. companies. The Stock Index Account invests in a sample of
stocks selected to track the index's return. The Account may not always have the
same return as the index, but it is expected to be very close.
5. What Are The Significant Risks?
You can lose money by investing in the fund.
The value of the portfolio stocks will rise and fall as a result of changes in
market conditions and other company, market or economic news. In general, during
periods when the overall U.S. stock market is rising, the value of your
investment will rise; while in market declines, the value of your investment
will likewise decline. Returns are not guaranteed and principal and returns will
fluctuate over time. The Stock Index Account may be appropriate for investors
who are willing to accept some degree of market fluctuation in pursuit of
potentially higher long-term returns.
6. What Are The Expense Charges?
Charges are deducted each valuation day from the assets of the Separate Account
for various services required to manage investments, administer the Separate
Account and the Contract, and to cover certain insurance risks borne by TIAA. We
expect that expense deductions will be relatively low. Currently, as a
percentage of net assets, the investment advisory charge is 0.07%, the
administrative expense charge is 0.20% and the mortality and expense risk
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charge is 0.10%.
Although the investment advisor to the Account is entitled to an annual fee of
0.30% of the Account's average daily net assets, it has voluntarily agreed to
waive a portion of its fee. TIAA reserves the right to increase the mortality
and expense risk charge to a maximum of 1.00% per year. TIAA guarantees that
total annual expenses will not exceed 1.50%.
The following chart is designed to help you understand the charges under the
Contract. The "Total Annual Charges" column shows the sum of the insurance
charges and the portfolio charges. The example shows the expenses, in dollars,
you would incur on a hypothetical investment of $1,000 over several periods,
assuming a 5% annual return on assets.
(Chart 1)
Examples:
Total Total Total Total Annual
Annual Annual Annual Expenses
Insurance Portfolio Charges At End Of:
Charges Charges
1 year 10 years
Separate 0.10% 0.27% 0.37% $4 $47
Account
(Caption1) This table reflects all expenses other than state premium taxes.
7. How Are Contributions And Earnings Taxed?
The Contract accepts only after-tax dollars and, unlike other TIAA-CREF
annuities, it can't be part of an employer retirement plan that accepts pre-tax
investments.
Contributions to a Teachers Personal Annuity don't reduce your current taxable
income. However, your earnings under the annuity are generally tax deferred
until you make a cash withdrawal from the Contract or receive annuity payments.
If you make a cash withdrawal of earnings prior to age 59 1/2, a 10% federal tax
penalty may apply, in addition to regular income tax. Contracts in certain
states are also subject to a state premium tax.
In some states, premium taxes may be deducted when premiums are paid, when cash
withdrawals are taken, or from the accumulation when it's applied to provide
annuity payments.
Taxation of annuity products may be complex and is subject to change. Be sure to
consult your tax advisor for complete details.
8. Will I Have Access To My Money?
Yes, you can withdraw any amount from $1,000 and up as often as you like from
the Stock
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Index Account. Currently, there is no sales or "surrender" charge if you
withdraw some or all of your accumulation. Of course, you may also have to pay
income tax on any earnings and a tax penalty on any cash withdrawals prior to
age 59 1/2.
9. Who Is The Investment Advisor For The Stock Index Account And How Has The
Stock Index Account Performed?
Teachers Advisors, Inc. (Advisors) manages the assets of the Stock Index
Account. A wholly-owned subsidiary of TIAA, Advisors is registered under the
Investment Advisor=s Act of 1940.
The charts below show the total return for the Stock Index Account for the time
periods indicated. Performance results shown in these charts reflect the waiver
of a portion of the investment advisory fee. If such waiver had not been in
effect, performance results would have been lower. Performance results reflect
all expenses other than state premium taxes.
(Chart 2)
Calendar Year
36.17% 21.54%
1995 1996
(Caption2) Past performance does not guarantee future results.
(Chart 3)
AVERAGE TOTAL RETURN FOR PERIOD ENDING JUNE 30, 1997
Since Inception (11/1/94) 1 Year
Stock Index Account 27.29% 30.46%
Russell 3000 27.72% 30.58%
(Caption3) The Russell 3000 Index is a trademark of the Frank Russell Company.
The Russell 3000 is an unmanaged index and its returns may not match the returns
of the Stock Index Account.
10. What Death Benefits Are Available Under The Contract?
If you die before receiving annuity payments, your beneficiary will receive a
death benefit. The amount of death benefit will equal the greater of (1) the
amount you have accumulated in your accounts on the day we receive proof of
death or (2) the total premiums paid under the Contract minus any cash
withdrawals.
11. What Other Services Are There?
o Automated Service Center. Our Automated Service Center offers an easy way for
you to obtain information about your investment. Just call 1 800 223-1200 and
use your assigned Personal Access Code to confidentially obtain vital account
information. If you have a touch-tone phone, the service is available to you 24
hours a day. From a rotary phone, the service is available between the hours of
8:00 a.m. and 8:00 p.m., Monday through Friday,
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Eastern Time.
o Electronic Funds Transfer. With this convenient service, making contributions
to your account is easier than ever. You can transfer funds from your checking
account to your Teachers Personal Annuity Contract on a regular basis--up to 2
times per month. And, keeping track of contributions is easy since each transfer
will appear on your monthly checking account statement and on your Teachers
Personal Annuity Quarterly Report.
12. Can I Get More Information On The Separate Account?
If you need more information, including annual and semi-annual reports, please
contact us at:
Teachers Insurance and Annuity Association
730 Third Avenue, New York, NY 10017-3206
1 800 223-1200
The variable component of the Teachers Personal Annuity contract is distributed
by Teachers Personal Investors Services, Inc.
