Susan Kozik Leaves TIAA-CREF

TIAA-CREF announced last week that it is looking for a new executive to replace technology chief Susan Kozik, who left the financial services company on August 2. Kozik had been with TIAA-CREF, which manages more than $414 billion in assets and serves 3.2 million individuals, as its CTO since August 2003. Peter Murphy, the company’s chief information security officer, was appointed acting CTO until a new executive vice president in charge of information technology and operations is found.

Kozik’s resignation comes as the company continues to struggle with a huge, complex overhaul of its core technology platform. The company is replacing its legacy record keeping platform with a more flexible, modern platform called Open Plan Solutions so that TIAA-CREF can offer its customers new products and more personalized service.

The transition to the new system has not been smooth. Pensioners have reported payment delays and lack of access to their account balances online. TIAA-CREF set up an FAQ page on its web site to address customers’ questions about the upgrade and the subsequent service problems they’ve encountered. In November 2006, TIAA-CREF created a new position, senior vice president of client experience, which reports to CEO Herb Allison. It also hired a new chief customer sciences officer.

The problems at TIAA-CREF have been a concern for customers for some time. In an interview last year, Mike Trzesniowski, the head of plant engineering at Lehigh University, which is one of TIAA-CREF’s pensioners, couldn’t access his accounts on TIAA-CREF’s web site during the spring and summer of 2006. But that was the least of his problems: the quarterly statements he received from TIAA-CREF were inaccurate, and contributions were not automatically deducted from his paycheck and put into his group supplementary retirement annuity (GSRA) account.

“It’s like going to a bank and having the bank tell you, ‘We don’t know what your balance is’,” says Trzesniowski, adding that others had it worse than him: Some people couldn’t withdrawing funds from their TIAA-CREF accounts, he says.

Ron Klug, a spokesperson for the New York State Insurance department, says consumers have filed 32 complaints against TIAA-CREF to date this year. In 2006, 34 complaints were filed.

When asked if Kozik’s resignation had anything to do with the problematic platform upgrade and the customer service problems it has caused, a spokesperson for the

company said that her departure was not about the past:

“Sue’s departure reflects the next phase of our strategy, which calls for us to join together technology and operations. TIAA-CREF’s long term strategy is to further enhance our information technology capability and deliver the highest quality service to clients,” says Chad Peterson, TIAA-CREF’s director of corporate media relations. “Sue Kozik’s leadership has contributed significantly to our strategic transformation.”

Peterson says the individual hired for the new EVP of information technology and operations position will be responsible for creating the architecture for reengineering business processes, scaling technology operations in order to grow the business and further strengthening the capabilities that allow TIAA-CREF to deliver new products and services.