In his time, my Uncle Spencer Levan Kimball was arguably the world's leading expert on insurance law. After serving as Japanese interpreter in World War II and a Rhodes scholarship, he was a young Law School Dean at the University of Utah, an older Law School Dean at the University of Wisconsin (where my father was also on the faculty), and between those two deanships a professor at the University of Michigan Law school for a long time. He lead a revision of the insurance code for the state of Wisconsin and had a hand in a revision of the insurance code for the State of Utah. Spencer finished his academic career in Chicago, as Executive Director of the American Bar Foundation and Seymour Logan Professor of Law at the University of Chicago. He had no formal economic training, but learned some economics from his work on insurance law. And he wrote in his autobiography that rubbing shoulders with others on the Chicago law faculty provided him with some additional education in economics. Below, is Uncle Spence's account of how the University of Chicago decided to allow faculty to invest their required retirement contributions in Vanguard (from A Tale That is Told: The Autobiography of Spencer L. Kimball, pp. 369-370).
The most important Committee on which l served at Chicago was a University ad hoc faculty-administrative committee on faculty retirement annuities. The University was systematically considering all fringe benefits. In that context, Provost Ken Dam, who was also my law school colleague, asked me to chair the committee on December 2, 1980, "to determine whether contributors should be able to invest their contributions, and those made on their behalf by the University, with organizations other than TIAA and CREF." Such a broadening had taken place with regard to supplemental contributions, as a result of a report of a similar committee chaired by Eugene Fama of the Economics Department, one of the developers of the "efficient market" theory justifying index funds. I had taken advantage of the options allowed and had put my own supplemental retirement funds in Vanguard.
The personnel of the committee was excellent, motivated and regular in attending our frequent meetings. On February 24, I wrote a memorandum outlining the questions I thought we needed to discuss, including how far the University should continue its "paternalistic" posture. We heard presentation from TIAA/CREF, which would like us to make no changes, from Vanguard which would like to be cut in on the act, and from Variable Annuity Life Insurance Company. VALIC made such a poor presentation that we dropped it at once. That left us with the addition of Vanguard or the status quo as our two realistic options, for the University administration balked at having a wide range of choices because of administrative costs. Vanguard made an impressive presentation. TIAA/CREF's attitude was the natural one of a monopolist: any change would be for the worse and, in fact, would violate their rights. TIAA tried to use the principles of the American Association of University Professors and American Association of Colleges about retirement benefits to strengthen their position, but that made little impression on us. A few other schools were beginning to break loose from the hegemony of TIAA, Stanford among them. On March 26 I sent the members an initial draft of a report, done "off the top of my head" in order to get something to discuss. On April 21 I sent the committee members a draft into which I had been able to work the numerous suggestions of the others. A week later I sent a draft to the Provost. After minor corrections our final report went to him May 6, 1981, only three months after our appointment, almost a record for University committees dealing with complex and important questions. The report was compressed into 19 double-spaced pages plus appendices. It recommended enlarging the options of the faculty to include some but not all of Vanguard's funds; it retained the restrictions that compelled annuitization or its equivalent. I made appearances to support the proposal, which finally got approval on October 13 and was quickly implemented. TIAA fought a rear guard action against additional alternatives for retirement funds in various universities and colleges but liberalization of retirement fund accumulation methods was spreading in the academic world, with Chicago leading.