REMARKS BY CHAIRMAN ARTHUR LEVITT
              U.S. SECURITIES & EXCHANGE COMMISSION
                   TIAA-CREF OFFICERS' MEETING
                          MAY 23, 1995

     I'm pleased to be here today -- in fact, I'm surprised we
haven't found a way to get together sooner, for we have many
interests in common.  Shareholder activism for one -- your
willingness to step forward and get involved in key corporate
governance issues has won plenty of praise.  It's well-deserved.

     You also set an excellent example earlier this year when you
looked at the use of various "soft dollar" arrangements.  You
showed sincerity and forthrightness in examining a difficult
question, analyzing it, and determining how a practice relates to
your institution and its shareholders.  I think you've
established a model of analysis for all institutional investors,
and I applaud that.

     Today I want to talk to you not about soft dollars, but
about hard facts -- facts of which YOU are well aware, but which
our nation is only beginning to confront.  I'm speaking of the
looming gap between retirement needs and retirement savings. 
Before I discuss the specifics of what the SEC is doing about the
problem, and what I hope other influential organizations like
yours will do, let's review the numbers.  They're startling.

     Within a decade, 76 million baby boomers will begin
retiring, raising the percentage of retirees in the population 
dramatically.  Increasing life expectancy and declining birth
rate will cause the ratio of retirees to workers to soar.  Social
Security is no longer taken for granted -- fully one-third of
respondents to a recent Money magazine poll believe the system
won't be able to send them checks regularly when they retire. 
There's growing recognition that, even assuming that Social
Security benefits will continue, they need to be supplemented by
individual retirement savings.  

     As the major player in the 403(b) market, you know that, at
the same time, the nature of the retirement plan market is
changing.  Defined contribution is displacing defined benefit as
the pension plan of choice, particularly among small employers. 
More than 40 million Americans now have 401(k)s, which today
boast some $300 billion in assets. 

     Under the traditional pension plan, the risk of poor
performance fell on the sponsoring employer.  Under a defined
contribution plan, the risk falls on participants.

     The investor has left the passenger's seat for the driver's
seat -- and, at first glance, this is a positive change, giving
individuals greater control over, and responsibilty for, their
own destiny.  There's only one problem -- most of these new
drivers never learned how to drive and don't have licenses.  

     In the first place, Americans can hardly be called active
savers -- we save 4 to 5 percent of after-tax income; the French
and Germans save 12 percent; the Japanese, 15.  Private savings
per American worker are estimated to be only about one-third of
what will be needed for retirement.

     At the same time, no matter HOW much they may save, too many
Americans simply have no idea how to invest.  Just last week I
read an article about a survey of participants in pension plans. 
More than half didn't know that stocks consistently produce
higher returns over the long term than guaranteed fixed-income
investments.  Many of those responding had no retirement money
invested in stocks.  Fully one-third of those surveyed believed
there was no risk in investing in bonds, and 14 percent believed
there was no investment risk in balanced mutual funds.  Perhaps
most disturbing, the majority of employees had unrealistic
expectations that their investments, combined with Social
Security, would provide them with a comfortable retirement
income.  No wonder that a 1993 study estimated that eight of ten
U.S. households will have less than half the annual income they
need to retire in comfort.

     Not everyone is predicting a crisis.  Business Week, for
example, believes that the golden years of baby boomers will be
saved by a combination of increasing productivity, and a pattern
of higher savings as people enter their 40s and 50s.  While I'm
happy to share their optimism about productivity, I'm hesitant to
see it as a white knight that will save us.  The most prudent
course is to foster higher savings and wiser investment -- and
the one of the best ways to do that is through education. 

     It is imperative that plan participants -- hard-working
Americans struggling to build a secure future for their families
-- have the information they need to make prudent investment
decisions.  Without proper guidance, employees tend not to set
aside enough money -- indeed, the median amount in 401(k)
accounts is only $5,000; or they may invest their plan assets too
conservatively; or they may play the market poorly, coming in
when it's high and jumping out when it's low; or, those working
for profit-making companies may concentrate their holdings too
heavily in the employer's stock, increasing risk and limiting
gains.  We've got to educate employees to participate sooner,
save more, and invest wisely.

     Recent trends in the investment management industry and in
the media indicate that investors are hungry for financial
information and guidance.  The last several years have seen a
marked increase in the amount of assets invested in vehicles that
make allocation decisions for investors, such as wrap accounts,
asset allocation funds, and mutual funds that invest in other
funds.  Financial planners, paid for the advice they provide and
not for the sales they make, are capturing an increasing share of
the financial planning market.  

     Many newspapers have recently expanded their business
sections.  The New York Times now devotes a large portion of its
Sunday business section to personal finance articles.  There are
more magazines, television, and radio shows devoted to personal
finance than ever before, and their audiences are growing.  In
short, the market is responding to the demands of individual
investors for more financial information and guidance.  

     I can personally attest that investors want and need help in
understanding the myriad investment opportunities available to
them.  Over the past year, I've held a series of investor town
meetings across America.  These meetings not only give me an
opportunity to advise people about the questions they should ask
before they invest, they also provide a forum for hearing what
investors want or need.  I'm amazed at the level of interest out
there -- just last month in Texas, more than 1,500 investors
showed up.  And one of the things they want most is guidance in
selecting appropriate investments while avoiding the pitfalls.

     We must respond to this need -- and by "we" I mean plan
sponsors, plan fiduciaries, administrators, investment advisors,
and fund managers, as well as the SEC.  Investor education may be
costly, but the cost of doing nothing will be far higher -- to
us; to employees; and to our nation.  

     The trend toward defined contribution plans, and the
increase generally in pension plan assets, has had a deep
influence on the agenda and priorities of the SEC.  The
Commission does not regulate pension plans, but we do regulate
mutual funds, in which many plans invest.  The statistics tell an
extraordinary tale.  Approximately 25 percent of all mutual fund
assets now consist of retirement money -- and that proportion is
increasing daily.  Moreover, in 1993, almost HALF of all money
taken in by mutual funds was retirement money.  Let me tell you
about some of the ways the SEC is responding to this trend:

     We're working to improve disclosure to defined contribution
plan participants.  Under current law, individuals purchasing
mutual funds through pension plans may receive far less
information about the funds than they would if they purchased
through a broker or directly from the fund.  Last month, the
staff took an interpretive position that should encourage mutual
funds to provide useful summary information to prospective plan
participants.  The Commission is currently developing a concise,
easy-to-read short form prospectus tailored to this specific
need.  I hope TIAA-CREF will assist us in this effort, as you
have in developing the "profile" prospectus, which features a
short-form summary of key information for comparison.

     The SEC is also encouraging funds to write prospectuses in
plain English.  The more simply and economically you explain
investment products, the better equipped plan participants will
be to make decisions about their retirement.  This is
particularly true for plan sponsors, such as TIAA-CREF, that
offer variable annuity and other complex investment products.  I
believe we share a common goal in trying to improve disclosure,
and I look forward to working with you to achieve it.

     The Commission realizes that to get mutual funds to write
prospectuses more clearly, we need not only to exhort them, but
also to support them.  And so we're expediting our review of
mutual fund prospectuses that are revised in the name of clarity. 
We're also developing a program designed specifically to assist
prospectus writers.  We hope to hold the first workshop, which is
being developed with the assistance of an English professor and
author of a book on writing clearly, by the end of the year.   

     Another goal of this initiative is to provide investors with
better tools for understanding a mutual fund's risk level.  Less
than two months ago, we issued a public request for comments on
ways to improve risk disclosure in fund prospectuses.  We're
hoping that with constructive input from both the fund industry
AND investors, we'll be able to put behind us the days when
investors were surprised, not to say blindsided, by the
performance of their funds.

     The Commission has also expanded the mission of its Office
of Consumer Affairs to include developing educational programs
that will enable investors to better protect themselves and make
wiser investment decisions.  We've produced a series of
pamphlets, handbooks, and brochures designed to teach people
about the different types of investments, and how to invest their
money wisely.  We've instituted a toll-free 800 number that
allows investors to place orders for our educational materials
and also provides answers to the most common questions we
receive.  We're even on the Internet.

     During the coming year, we hope to do even more in the way
of education.  We'll prepare an Investor Information Kit
containing our educational brochures and pamphlets as well as
other materials, such as a video on investor rights and remedies,
and worksheets that will help investors determine whether they
are saving enough for their retirement.  We'll continue to work
with personnel offices, unions, and the Department of Labor to
educate employees at the point where they need to make a decision
about retirement savings.  We'll also be developing a curriculum
on personal finance for high school and adult classes to bring
our message to the people who need it most.

     TIAA-CREF is certainly an appropriate place to speak about
education.  Since its establishment in 1918, this organization
has stood for the importance of education generally, as well as
the particular needs of individuals planning for retirement.

     Over the years, as the investment landscape has changed,
TIAA-CREF has grown and responded.  First, it supplemented TIAA's
fixed annuity by offering variable annuities through CREF. 
Later, it expanded the market-based investment options available
to its participants.  In addition to the longstanding stock
account, CREF now offers several equity accounts, a bond account,
foreign equities and even a social choice account.  

     TIAA-CREF has never lost sight of the constituency it
serves, individual investors.  You have responded well to their
increasing demands for information about saving and investing for
retirement.  Some of the materials you've developed could easily
serve as models for others.  The experience you've accumulated
will serve TIAA-CREF well as you and your colleagues in the
investment management industry prepare to meet the challenges of
the next decade:  Educating a generation of investors who, unlike
their predecessors, will be solely responsible for ensuring that
they have enough money for retirement.

     The Commission is always seeking to improve its efforts at
investor education, and would like to tap your knowledge and
experience.  We'd like to work with you to improve the quality of
the materials available to investors.  Our curriculum on personal
finance is an excellent opportunity -- perhaps you could help us
recruit volunteer teachers.  You and your participants have
enormous expertise that could help us develop a curriculum, train
teachers, and get courses into the classroom.

     Our efforts to educate must reach investors -- but they must
also reach the recipients of the roughly 10 million lump sum
distributions made each year.  Jobs may end; but whether one is
changing jobs or retiring, the need to invest wisely NEVER ends. 

     Our efforts must also reach the 40 percent of those eligible
for a retirement plan, but not taking advantage of it.   We must
work together to motivate those employees, who are often at the
bottom of the income scale.  It's not enough to reach out to
professors, for example, who are more likely to know something
about finance and economics.  We've also got to reach the
cafeteria workers; the custodians, janitors, and groundkeepers;
and the secretaries and support staff.

     Educating investors is NOT a sacrifice of time and resources
in behalf of the American worker.  Educating investors is in your
own interest.  Peter Drucker calls retirement savings one of four
great markets of the future.  In the last decade alone,
individual annuities have grown from a $6 billion to a $60
billion business.  Investment management today is a very
competitive field -- and increasingly, the place where companies
are going head-to-head with competitors is in the quality of the
educational services they provide to plan sponsors.

     Companies are taking a cue from Madison Avenue and using
high-powered marketing techniques to reach participants or
potential participants.  Outside communications consultants are
being called in to help.

     Sophisticated advertising techniques, such as market
segmentation studies and targeted audiences, are becoming the
norm.  

     Retirement planning workbooks and software are being made
available, offering various strategies for employees to meet
their funding goals.  

     I was delighted to read last March that TIAA-CREF had
established an Internet site, to better serve and communicate
with participants.  That's precisely the kind of innovation
that's needed.

     Indeed, there's no lack of good ideas about ways to impress
upon employees the need to invest well today.  Some are easy --
posting returns on the various investment options, for example,
for all employees to see.  If you've educated your participants
well, they'll know not to switch investments back and forth
chasing the last quarter's returns -- they'll take the long view.

     Other ideas would perhaps be more difficult to implement,
but they may also be more effective.  Former SEC Commissioner
Carter Beese, for example, suggested that participants'
statements compare their current retirement account balance to
the amount employees SHOULD have in order to retire with 60 to 70
percent of their retirement age salary -- there's a figure few
people could easily ignore.  

     Those are just a few of the intriguing ideas on the market
today.  As diverse as they are, they have a common goal in
education -- education that draws eligible people into a program;
education that increases their sophistication once there; and
education that encourages them to save enough for a comfortable
retirement.  

     You excel in education; we want to learn from you, and work
with you, to prepare investors today for a secure tomorrow. 
That's a goal we share -- and if we work together, it's a goal we
can achieve.  Thank you.

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