Changes to NYS Deferred Compensation Plan

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TSWNY
Posts: 84
Joined: Sun Mar 13, 2016 1:05 pm

Re: Changes to NYS Deferred Compensation Plan

Postby TSWNY » Wed Apr 19, 2017 8:06 pm

secondact wrote:
TSWNY wrote:
Countermoon wrote:Did anyone else read yesterday's NYSDCP newsletter? They discuss the change in investment options, although not in great detail. Apparently a supplemental newsletter detailing the new funds will be coming out soon.

The changeover is now scheduled for July.



Yeah, I got that email yesterday. I can't believe this is the first time people (other than those who actually read the minutes) are hearing about it.


https://www.nysdcp.com/tcm/nysdcp/stati ... 1Q.pdf?r=1
This is now posted on their site.



I'm already starting to miss my Vanguard Institutional Funds.....Can't figure out why they are ditching them!

RSM
Posts: 34
Joined: Fri Aug 05, 2016 10:31 am

Re: Changes to NYS Deferred Compensation Plan

Postby RSM » Wed Apr 19, 2017 9:13 pm

Thanks for linking the newsletter. Again I will say I don't see how they have made the case for why a CIT is superior to a similar mutual fund.

We will have to wait and see if and by how much the ER are lower. For most I cannot see how the very small if any changes in ER will outweigh the

1) reduced oversight
2) less transparency
3) loss of managing and viewing changes to the value due to the lack of a ticker symbol.

I wonder if there will be changes to the plan's administrative fees.

bennettg
Posts: 17
Joined: Sat Aug 06, 2016 8:28 am

Re: Changes to NYS Deferred Compensation Plan

Postby bennettg » Thu Apr 20, 2017 12:33 pm

I very much share folks' concerns about these changes.

Does anyone know what the relevant rules that the board must follow prior to changing investment options. Is there some required period of time for public (or member) comment? If so, I'm thinking about seeing if the changes could be challenged.

I feel like we've been screwed.

TSWNY
Posts: 84
Joined: Sun Mar 13, 2016 1:05 pm

Re: Changes to NYS Deferred Compensation Plan

Postby TSWNY » Thu Apr 20, 2017 3:20 pm

RSM wrote:Thanks for linking the newsletter. Again I will say I don't see how they have made the case for why a CIT is superior to a similar mutual fund.

We will have to wait and see if and by how much the ER are lower. For most I cannot see how the very small if any changes in ER will outweigh the

1) reduced oversight
2) less transparency
3) loss of managing and viewing changes to the value due to the lack of a ticker symbol.

I wonder if there will be changes to the plan's administrative fees.


This is New York State, so this move most certainly benefitted a very small number of people and done at the expense of a much larger group.

RSM
Posts: 34
Joined: Fri Aug 05, 2016 10:31 am

Re: Changes to NYS Deferred Compensation Plan

Postby RSM » Thu Apr 20, 2017 3:39 pm

I wouldn't say we've been screwed. at least not yet lol.

Seriously though, CITs are not uncommon and BlackRock is certainly a big name in the game. I think the ERs will most likely be lower or at the least the same as the current offerings.

I'm no expert but I think the "decision" is entirely up to the board who has a fiduciary responsibility to the members of the plan.

The newsletter lists costs as;

Administrative Fee $20 per year
AUM fee of .02% assessed semi annually up to $200,000.

So assuming the fees stays the same going forward, the maximum would be $100/year on accounts over $200,000.

I read somewhere an ER for the BlackRock Fund that mirrors the S&P 500 of .009%. So assuming the same $200,000 you are talking another $18 in expense ratio expenses. Can't get much lower then that so if the board of the plan is looking at costs primarily that would be hard to beat.

TinpotInvestor
Posts: 10
Joined: Sun Dec 01, 2013 12:45 am

Re: Changes to NYS Deferred Compensation Plan

Postby TinpotInvestor » Thu Apr 20, 2017 11:02 pm

For me, it's not so much the collective investment trusts (CITs), but that they still don't make it easy to invest in a total stock market (TSM) index fund and a total international stock index fund. For TSM, I have to make do by approximating it with the S&P500, mid cap, and small cap index funds. Good enough, as they say.

And for total international stock, I contribute to a Vanguard IRA account and buy their total international stock index fund. I fill that up before going to the NYSDCP international fund that tracks the EAFE index, which is only developed international markets, and it doesn't have Canada. Not quite total international there. They forgot Canada.

eddot98
Posts: 85
Joined: Wed Jan 01, 2014 11:47 am
Location: The Berkshires

Re: Changes to NYS Deferred Compensation Plan

Postby eddot98 » Fri Apr 21, 2017 12:01 pm

As long as they don't mess with the Stable Value Fund, I will be okay. I read the minutes and it's unclear what they are doing with that. At 1.9 percent, it's our answer to a bond fund for the fixed portion of our holdings. And at our age, 66, it's a fairly large percentage.

Trying2Save
Posts: 12
Joined: Thu Mar 16, 2017 2:25 pm
Location: New York, NY

Re: Changes to NYS Deferred Compensation Plan

Postby Trying2Save » Fri Apr 21, 2017 4:50 pm

Does anyone have any advice for someone who is joining NYSDCP in the next few months? I originally made a post earlier asking for advice on how to allocate my money (with respect to the current plan that is expiring), however this was not taking into account the fact that these funds will be changing.

RSM
Posts: 34
Joined: Fri Aug 05, 2016 10:31 am

Re: Changes to NYS Deferred Compensation Plan

Postby RSM » Fri Apr 21, 2017 5:10 pm

Trying2Save wrote:Does anyone have any advice for someone who is joining NYSDCP in the next few months? I originally made a post earlier asking for advice on how to allocate my money (with respect to the current plan that is expiring), however this was not taking into account the fact that these funds will be changing.


I read your other post regarding fund selection.

If you are investing before July when they plan to change the options I would follow the advise in the other thread.

Vanguard Institutional Index 65%
Vanguard International Index (or whatever the equivalent was) 15%
Vanguard Total Bond Market 20%

After July, or whenever they switch over to the new funds... we will have to see what they actually offer.

I think there will be a

BlackRock Equity Index Fund CIT which should mirror the S&P500 Index. This can take the place of Vanguard Institutional Index Fund
BlackRock Russell 2500 Equity Index CIT which should be similar to a Small Cap Index Fund

and one or two BlackRock Debt Index Funds instead of Vanguard Total Bond Index


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