Multiclassing of CREF VA Accounts

Prior to CREF's Settlement with the SEC (1989), the Expense Ratios (ER) of the CREF Variable Annuity accounts were not reported or regulated the same as open-end mutual funds. (This discussion will focus on CREF Stock, because it's the largest one, and the "original". I will neglect the fact that it was originally equivalent to a domestic-only S&P 500 Index Fund. It is much more diversified today.)

When I first started paying attention, in 1986, the ER for CREF Stock was 0.24%. Once the Settlement was signed, it moved up to 0.32%. Its peak was around 0.64%, in 2009. (Note 1)

FOOTNOTES:

(1) ERs for the CREF VA Accounts are adjusted, as often as daily, and when necessary, retrospectively. That's because CREF pledges to pay for expenses "at cost." As I have pointed out elsewhere, the dollars billed (and subject to approval by CREF) by, say, Nuveen, are determined by Nuveen, and not by CREF. I have chosen to use the annual May 1 Prospectus estimate of ER in this discussion.