Retirement plan yields won't return to the long-term norm of roughly 5 to 7 percent until the next decade or two, TIAA President and CEO Roger Ferguson said Tuesday.
"I think 20 years from now, and maybe even 10, we'll get back to what we thought of as the norm," he told CNBC's "Squawk Box." "I'm not a big believer in sort of the new normal. I don't think we're going into a period of incredibly low rates."
It takes a long time to return to normality following a recession triggered by a sudden change in asset values, he said. "That is exactly a process that we're going through."
Ferguson, the former Federal Reserve Board of Governors vice chairman, is running one of the nation's largest retirement providers at a time when the Fed's low interest rates have made it difficult to squeeze yield out of low-risk assets, putting pressure on savers.
In this environment, investors need to move further out on the risk spectrum just to get a 3 percent return, Ferguson said. Alternative investments such as commodities play a more important role in assuring retirement savers meet their investment targets, he added.
But he said the Fed is doing the right thing in gradually normalizing interest rates. Policymakers raised rates for the first time in nearly a decade in December. The Federal Open Market Committee indicated it expects to raise rates twice this year.
"These low rates are an important part of getting the economy back on track, so we have to keep the big macro picture in mind," he said.