is not budging in the face of criticism from a Democratic senator that its advertisements urging investors to roll over their Thrift Savings Plan or 401(k) to a Fidelity IRA are "misleading." TIAA-CREF
, however, which was also on the receiving end of criticism from Sen. Herbert Kohl
(D-WI), decided to withdraw its own advertisement.
Kohl, chairman of the Senate's Special Committee on Aging, penned letters on July 15 to Fidelity CEO Ned Johnson
to see the letter) and TIAA-CREF CEO Roger Ferguson, Jr.
for the letter), informing them of a hearing on retirement saving. Kohl also told them to "reexamine" their firms' rollover ads aimed at TSP participants and withdraw those ads.
In his July 26 letter
to Kohl, Scott David
, Fidelity's president of retirement services, defended the advertisement, saying: "Fidelity's advertising and enrollment materials encourage individuals to learn about the investment options that are available to them so that they can make the right decisions to meet their individual needs."
David added that Fidelity, "through its marketing and advertising aims to accurately educate and inform Americans of products and services that can best meet their individual needs."
TIAA-CREF, on the other, hand, decided to yank its ad. In his letter
to Kohl on July 16, Ed Van Dolsen
, executive vice president of institutional client services, said the New York company "regrets any misunderstanding" that may have been caused by its ad aimed at TSP participants.
"To avoid any additional confusion, the company will not run this advertisement in the future," Van Dolsen wrote.
Kohl released the letters on Tuesday. The letters are the subject of Wednesday's Wall Street Journal Fund Track column
"I applaud TIAA-CREF's decision to pull the ads, and am disappointed that Fidelity has not chosen to follow suit," Kohl said in a statement on Tuesday. "The TSP has the lowest administrative costs of any retirement program in the country and I think these misleading ads are a disservice to hard-working public servants."
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