Changes to NYS Deferred Compensation Plan

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TSWNY
Posts: 94
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!

SimplicityNow
Posts: 119
Joined: Fri Aug 05, 2016 10:31 am

Re: Changes to NYS Deferred Compensation Plan

Postby SimplicityNow » 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: 42
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: 94
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.

SimplicityNow
Posts: 119
Joined: Fri Aug 05, 2016 10:31 am

Re: Changes to NYS Deferred Compensation Plan

Postby SimplicityNow » 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
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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: 23
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.

SimplicityNow
Posts: 119
Joined: Fri Aug 05, 2016 10:31 am

Re: Changes to NYS Deferred Compensation Plan

Postby SimplicityNow » 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

bennettg
Posts: 42
Joined: Sat Aug 06, 2016 8:28 am

Re: Changes to NYS Deferred Compensation Plan

Postby bennettg » Tue May 02, 2017 12:19 pm

I'm thinking of leaving the NYSDCP because of these changes and rolling over my funds into a Vanguard 401k. I like Vanguard's transparency and simplicity.

What is the main benefit of the 457b vs 401k? Is it the lack of a 10% early withdrawal penalty if I retire before 59 1/2 yrs? If I do not plan to retire early, what are other reasons to leave funds in the NYSDCP?

Countermoon
Posts: 28
Joined: Wed Feb 13, 2013 10:22 pm

Re: Changes to NYS Deferred Compensation Plan

Postby Countermoon » Tue May 02, 2017 1:19 pm

bennettg wrote:I'm thinking of leaving the NYSDCP because of these changes and rolling over my funds into a Vanguard 401k. I like Vanguard's transparency and simplicity.

What is the main benefit of the 457b vs 401k? Is it the lack of a 10% early withdrawal penalty if I retire before 59 1/2 yrs? If I do not plan to retire early, what are other reasons to leave funds in the NYSDCP?


I've always understood this to be the biggest benefit, and it's a significant one in my opinion. It gives you access to your funds at any age as long as you separate from your employer. It's great for early retirees but also gives folks flexibility in the event of job loss (not common in the public sector!), health issues, etc.

In other news, I spoke with a NYSDCP rep today regarding additional information on fund options. He told me that the supplemental newsletter should be issued in the first week of June.

TSWNY
Posts: 94
Joined: Sun Mar 13, 2016 1:05 pm

Re: Changes to NYS Deferred Compensation Plan

Postby TSWNY » Tue May 02, 2017 5:38 pm

Countermoon wrote:
bennettg wrote:I'm thinking of leaving the NYSDCP because of these changes and rolling over my funds into a Vanguard 401k. I like Vanguard's transparency and simplicity.

What is the main benefit of the 457b vs 401k? Is it the lack of a 10% early withdrawal penalty if I retire before 59 1/2 yrs? If I do not plan to retire early, what are other reasons to leave funds in the NYSDCP?


I've always understood this to be the biggest benefit, and it's a significant one in my opinion. It gives you access to your funds at any age as long as you separate from your employer. It's great for early retirees but also gives folks flexibility in the event of job loss (not common in the public sector!), health issues, etc.

In other news, I spoke with a NYSDCP rep today regarding additional information on fund options. He told me that the supplemental newsletter should be issued in the first week of June.


I spoke with my Rep yesterday and he said the changes will go into effect middle of July. I am not happy about parting with my Vanguard Institutional Funds, but he said the BlackRock S&P Fund has an expense ratio of 0.0035 (or something close to that, kids were screaming in my ear). BlackRock is not offering a purely small cap fund though. He said it's going to be a mix of small cap and mid caps. Not much I can do about the changes, so I guess I'll have to learn to live with it.

willie838
Posts: 107
Joined: Thu Mar 20, 2014 1:37 am

Re: Changes to NYS Deferred Compensation Plan

Postby willie838 » Wed May 03, 2017 6:04 am

bennettg wrote:I'm thinking of leaving the NYSDCP because of these changes and rolling over my funds into a Vanguard 401k. I like Vanguard's transparency and simplicity.

What is the main benefit of the 457b vs 401k? Is it the lack of a 10% early withdrawal penalty if I retire before 59 1/2 yrs? If I do not plan to retire early, what are other reasons to leave funds in the NYSDCP?


There is another option that is so hidden about this account

NYSdcp has a deal with schwab that allows you to have a SRO, and buy any funds you want in the market.

I don't remember how I stumbled across it, but when I spoke with a rep a few weeks ago she said that when you sign up they give you 3 options, go with target date if you're basic, full plan menu if you're intermediate and SRO if you're very advanced.... - lol nice description.

I think I'm going to end up looking into the SRO option deeper and advise others to as well.

My ex has been in Vanguard capital opportunity and it has been a crusher. I tried to get in but it's closed to new investors...... Imagine her situation, in a great and historically well performing fun, and nys forces you to sell out your shares, and you can't buy back in. She was pretty mad when I explained it to her.

TSWNY
Posts: 94
Joined: Sun Mar 13, 2016 1:05 pm

Re: Changes to NYS Deferred Compensation Plan

Postby TSWNY » Wed May 03, 2017 9:22 am

willie838 wrote:
bennettg wrote:I'm thinking of leaving the NYSDCP because of these changes and rolling over my funds into a Vanguard 401k. I like Vanguard's transparency and simplicity.

What is the main benefit of the 457b vs 401k? Is it the lack of a 10% early withdrawal penalty if I retire before 59 1/2 yrs? If I do not plan to retire early, what are other reasons to leave funds in the NYSDCP?


There is another option that is so hidden about this account

NYSdcp has a deal with schwab that allows you to have a SRO, and buy any funds you want in the market.

I don't remember how I stumbled across it, but when I spoke with a rep a few weeks ago she said that when you sign up they give you 3 options, go with target date if you're basic, full plan menu if you're intermediate and SRO if you're very advanced.... - lol nice description.

I think I'm going to end up looking into the SRO option deeper and advise others to as well.

My ex has been in Vanguard capital opportunity and it has been a crusher. I tried to get in but it's closed to new investors...... Imagine her situation, in a great and historically well performing fun, and nys forces you to sell out your shares, and you can't buy back in. She was pretty mad when I explained it to her.



Here is a link to the brochure.

https://www.nysdcp.com/tcm/nysdcp/stati ... ow.pdf?r=1

GrandMasterBlaster
Posts: 90
Joined: Wed Mar 15, 2017 6:01 pm

Re: Changes to NYS Deferred Compensation Plan

Postby GrandMasterBlaster » Wed May 03, 2017 11:54 am

Thanks for that link TSWNY, and thanks for bringing up the SRO Willie - that adds an interesting wrinkle. We've been waiting until the changes went into effect before setting up my wife's 457, simply focusing on our Roths and my SEP so that we didn't have to switch all of our funds when the new plan went into effect. If I'm reading that brochure right, we can basically set up a self-directed option through Schwab for a $15 annual fee (which I believe is less than the annual fee for the regular 457 options)?

Does anyone here have any experience with and care to comment on the SRO through Schwab?

bennettg
Posts: 42
Joined: Sat Aug 06, 2016 8:28 am

Re: Changes to NYS Deferred Compensation Plan

Postby bennettg » Wed May 03, 2017 12:14 pm

I use the SDO, its not that good. The $15 fee is on top of the DCP fees and you must maintain more than 50.001% in the DCP.

We've been screwed.

bennettg
Posts: 42
Joined: Sat Aug 06, 2016 8:28 am

Re: Changes to NYS Deferred Compensation Plan

Postby bennettg » Fri May 05, 2017 1:53 pm

So I met with the local account executive who was very nice, but who could not go beyond the boards "talking points" and address transparency....only that the fees were low.

Maybe we can help one another. In looking at the December 2016 board meeting minutes, the following blackrock CITs will be offered (the AE says that they are not created yet?!):

Blackrock Equity Index Fund F (S&P 500) CIT
Blackrock Russell 2500 Equity Index Fund
Blackrock US Debt Index Fund F Lending CIT

I can find the following ticker symbols for what appear to be similar blackrock products:

Blackrock Equity Index Fund F (S&P 500) CIT---->BSMAX
Blackrock Russell 2500 Equity Index Fund------>BSPIX
Blackrock US Debt Index Fund F Lending CIT------>BMOIX

But what are the differences? When I go to the blackrock website and look up BSMAX , I see options for something called class K and institutional shares.....Is the term "Fund F" just a signal that it is a CIT type of class of share?

My goal is to find analogues of the CITs with ticker symbols so I can go to M* X Ray and make sure my AA is what I want it to be.

Thanks in advance.

SimplicityNow
Posts: 119
Joined: Fri Aug 05, 2016 10:31 am

Re: Changes to NYS Deferred Compensation Plan

Postby SimplicityNow » Fri May 05, 2017 3:35 pm

bennettg wrote:So I met with the local account executive who was very nice, but who could not go beyond the boards "talking points" and address transparency....only that the fees were low.

Maybe we can help one another. In looking at the December 2016 board meeting minutes, the following blackrock CITs will be offered (the AE says that they are not created yet?!):

Blackrock Equity Index Fund F (S&P 500) CIT
Blackrock Russell 2500 Equity Index Fund
Blackrock US Debt Index Fund F Lending CIT

I can find the following ticker symbols for what appear to be similar blackrock products:

Blackrock Equity Index Fund F (S&P 500) CIT---->BSMAX
Blackrock Russell 2500 Equity Index Fund------>BSPIX
Blackrock US Debt Index Fund F Lending CIT------>BMOIX

But what are the differences? When I go to the blackrock website and look up BSMAX , I see options for something called class K and institutional shares.....Is the term "Fund F" just a signal that it is a CIT type of class of share?

My goal is to find analogues of the CITs with ticker symbols so I can go to M* X Ray and make sure my AA is what I want it to be.

Thanks in advance.


I think until they tell us exactly what these funds are we are only guessing as to whether they are analogous or not.

BashDash
Posts: 344
Joined: Mon Nov 28, 2016 12:31 pm

Re: Changes to NYS Deferred Compensation Plan

Postby BashDash » Sun May 07, 2017 3:48 pm

Not technically related to this thread but is there an automatic rebalance feature online with the ny 457? I love having that feature on my 403b to help me stay the course.

bennettg
Posts: 42
Joined: Sat Aug 06, 2016 8:28 am

Re: Changes to NYS Deferred Compensation Plan

Postby bennettg » Tue May 09, 2017 12:19 pm

I just got off the phone with the DCP. I asked them about the Expense Ratios for the Blackrock CITs:

S&P is expected to be 0.0084
Russell 2500 is expected to be 0.0225
US Debt Index is expected to be 0.0198

There will not be any changes to the plans admin fees of $10 twice a year ($20) and 2bp AUM up to $200,000.

For folks who follow the 3 fund theory (still would have to stay with their expensive international MCSI index)....do these lower ERs justify the lack of transparency, etc?

Can someone point me to a calculator or spreadsheet where I can calculate my costs with my current investment options versus those described above?

GrandMasterBlaster
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Re: Changes to NYS Deferred Compensation Plan

Postby GrandMasterBlaster » Tue May 09, 2017 1:18 pm

Thanks for the report bennettg!

Since the 457 will only comprise a fraction of our holdings, I'm not too worried about the transparency issues. We'll likely keep one or two funds (S&P for sure) with extremely low costs and make up the rest of our AA in other accounts. Even with the AUM bp and annual fees, it'll be roughly equivalent to the ER of VTSAX, which I'd consider a reasonable tradeoff for the significant extra tax-advantaged space.

NHRATA01
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Location: New York City area

Re: Changes to NYS Deferred Compensation Plan

Postby NHRATA01 » Tue May 09, 2017 1:39 pm

Wow, those are some pretty extremely low ER's for the funds. I hate to lose VG and ticker funds, but on the surface I can't see too much negative with going to these CIT's.

I have an old employer's 401K (457 is my wife's plan) where the Fidelity index funds are CIT's, and the ER's are lower than the Fido indexes in my newer 401K. The only negligible downsides are not having a ticker, and there are no quarterly or yearly distributions - dividends and gains end up in the NAV.

willie838
Posts: 107
Joined: Thu Mar 20, 2014 1:37 am

Re: Changes to NYS Deferred Compensation Plan

Postby willie838 » Sat May 13, 2017 12:43 am

i'm so anxious that this goes into effect in....july? and we have almost no info.


that's because i have multiple plans to overhaul for people, as well as continue to figure out the sro/sdo option's viability

while working 80h/week.


fun fun fun.

willie838
Posts: 107
Joined: Thu Mar 20, 2014 1:37 am

Re: Changes to NYS Deferred Compensation Plan

Postby willie838 » Wed May 17, 2017 1:47 am

Found a lot of info on this site

http://m.pionline.com/article/20161208/ ... ent-lineup



...

I feel a lot better, prime cap is a great fund but a different vehicle than capital opportunity...

Going to have to deal with it though.

They have up until 3/18 to make changes effective but expect them sooner.

secondact
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Joined: Mon Apr 10, 2017 4:14 am

Re: Changes to NYS Deferred Compensation Plan

Postby secondact » Thu May 18, 2017 7:44 pm

Thanks for the info. Every bit helps!

Countermoon
Posts: 28
Joined: Wed Feb 13, 2013 10:22 pm

Re: Changes to NYS Deferred Compensation Plan

Postby Countermoon » Wed May 31, 2017 12:34 pm

For those of us (like me) who want to learn more about CITs, I found this Early Retirement forum thread interesting and helpful: http://www.early-retirement.org/forums/ ... 78854.html

I realize CITs have become very common in 401k/457 plans but I can't shake the "too good to be true" feeling.

pacman30
Posts: 1
Joined: Fri Jun 02, 2017 8:23 pm

Re: Changes to NYS Deferred Compensation Plan

Postby pacman30 » Fri Jun 02, 2017 8:52 pm

The Board added Vanguard Strategic Equity Fund. Here is the description. "
Fund facts
This actively managed fund purchases mid- and small-capitalization stocks that the advisor believes have above-average growth potential. The advisor relies on a computer-driven stock selection process in an attempt to build a portfolio with risk characteristics similar to those of the fund’s comparative index, while seeking to provide better returns. Because it focuses on medium-sized and smaller companies, the fund’s performance may be more volatile than that of the broad U.S. stock market. This fund may be considered complementary to a long-term portfolio with large-cap exposure."

willie838
Posts: 107
Joined: Thu Mar 20, 2014 1:37 am

Re: Changes to NYS Deferred Compensation Plan

Postby willie838 » Thu Jun 08, 2017 4:15 am

pacman30 wrote:The Board added Vanguard Strategic Equity Fund. Here is the description. "
Fund facts
This actively managed fund purchases mid- and small-capitalization stocks that the advisor believes have above-average growth potential. The advisor relies on a computer-driven stock selection process in an attempt to build a portfolio with risk characteristics similar to those of the fund’s comparative index, while seeking to provide better returns. Because it focuses on medium-sized and smaller companies, the fund’s performance may be more volatile than that of the broad U.S. stock market. This fund may be considered complementary to a long-term portfolio with large-cap exposure."



lol, i just hedged on energy a few months ago and bought into this fund with my roth.


good eye though. seemed like a solid fund....ER was high by vanguard standards though.

willie838
Posts: 107
Joined: Thu Mar 20, 2014 1:37 am

Re: Changes to NYS Deferred Compensation Plan

Postby willie838 » Mon Jun 12, 2017 2:24 am

ive been in contact with david fisher, the head of the plan

per him, an email was going to be sent out over the last 2 days or so with plan details to those receiving fully electronic communication....i am not paperless so i haven't gotten it yet...

if any member here got it can you cut and paste it up here for everyone? Thank you.

willie838
Posts: 107
Joined: Thu Mar 20, 2014 1:37 am

Re: Changes to NYS Deferred Compensation Plan

Postby willie838 » Mon Jun 12, 2017 7:00 am

most of his correspondence ad sic.



---
A Supplemental Newsletter is going in the mail this week and participants who elected e-delivery will receive an email link tomorrow. This document will include the details you are probably looking for. The changes are effective July 10, 2017.
----
We have sent two Quarterly newsletters announcing changes but could not include all the details until all the contracting issues were resolved (they are.)

-----

The selections were made at the December Board meeting but they are subject to contract negotiations. Sometimes, a suitable contract can’t be negotiated or there are operational issues that make an option unworkable.

---
Me: "Personally I'm pretty dumbfounded that an a group that handles such a large amount of money for NYS workers would do such a poor job of communicating MAJOR plan changes to its members. When i speak about this at work, people think that I am kidding."



You are the first to say this but I respect your opinion. Everyone should have all the pertinent information about a month before anything happens. In many plans, participants are even notified until after changes are made – not the best way in my opinion. 99.9% of our participants are not experts in the financial field and are happy the Board and its consultants are “watching the store” and making changes when appropriate.


----
Expense ratios of CITs? All lower than you are paying now. There will be a link on nysdcp.com that compares the expense ratios of legacy and new options.


Holdings of CITs? Available in the fact sheets for each fund. In many cases, the CIT offered is a clone of a mutual fund where you can get such information from Morningstar etc.


-How can they be tracked? (i have my NYSDCP mutual funds listed under "other" investments on Vanguard- and they're very easily trackable and transparent, this also allows for a complete overview of cumulative retirements assets as most are held outside of the NYS 457B plan. Since the Plan has other options such as the Stable Income Fund and International Funds, this is not a new issue. Most participants just plug in the values in whatever financial software they have. I might add, anecdotally and as a Certified Financial Planner and Chartered Financial Analyst licensee for many years, that the goals and objectives of what and how you are tracking things matters a lot. For example, I have seen investors spend a tremendous amount of time worrying about how much of a certain stock is held by a mutual fund and very little time monitoring their stocks/bonds/cash allocations.

------[b] "Vanguard Capital Oppurtunity (i believe) is being removed. It is a closed fund. Can the people that are lucky enough to hold shares and still be able to purchase into this fund- continue to hold on to it? Or will their fund holdings be liquidated and installed into some less than transparent CIT?"
- that is not for me, an associate has this fund, i did not try to get into it before it was closed to new investors- and it has been the primary driver to her account flourishing (approx 13% ROI/Year since inception)



The Cap Opps fund is being transferred to the PRIMECAP fund managed by the same organization. Vanguard realized the high level of overlap between the funds and agreed to accept the assets into PRIMECAP (a mutual fund but very inexpensive.) If you like to do comparisons, chart the last ten years performance (Morningstar does this well) of the two funds. It is basically one line.

-----

I think you will find the next communications more fulfilling. There was a lot to digest with all the changes coming up and we tried to parse out the broader picture issues first with the details to follow. I would close by saying the financial services industry, and the products available, have changed dramatically in the last few years. It would be much “easier” for the Board to just continue with what we have but the procurement process is designed to get the best value for our participants.


------

and finally upon basically apologizing for my tone.....i'm unsure if being a little upset was unreasonable, but it is 6/12 and it goes into effect on 7/10 and we have almost 0 conrete information....alas, I told him i was a boglehead.




---John Bogle is one of my favorites also. Vanguard has provided a great service to retail investors and, in many cases, institutional shareholders like the Plan as well. The race to the bottom has had some good effects but has also caused some distortions. Nothing stays static very long these days.

Since the Plan will “map” holdings to keep asset allocations fundamentally unchanged, you may find that the changes may require little activity on your part.

SimplicityNow
Posts: 119
Joined: Fri Aug 05, 2016 10:31 am

Re: Changes to NYS Deferred Compensation Plan

Postby SimplicityNow » Mon Jun 12, 2017 7:09 am

willie838 wrote:most of his correspondence ad sic.



---
A Supplemental Newsletter is going in the mail this week and participants who elected e-delivery will receive an email link tomorrow. This document will include the details you are probably looking for. The changes are effective July 10, 2017.
----
We have sent two Quarterly newsletters announcing changes but could not include all the details until all the contracting issues were resolved (they are.)

-----

The selections were made at the December Board meeting but they are subject to contract negotiations. Sometimes, a suitable contract can’t be negotiated or there are operational issues that make an option unworkable.

---
Me: "Personally I'm pretty dumbfounded that an a group that handles such a large amount of money for NYS workers would do such a poor job of communicating MAJOR plan changes to its members. When i speak about this at work, people think that I am kidding."



You are the first to say this but I respect your opinion. Everyone should have all the pertinent information about a month before anything happens. In many plans, participants are even notified until after changes are made – not the best way in my opinion. 99.9% of our participants are not experts in the financial field and are happy the Board and its consultants are “watching the store” and making changes when appropriate.


----
Expense ratios of CITs? All lower than you are paying now. There will be a link on nysdcp.com that compares the expense ratios of legacy and new options.


Holdings of CITs? Available in the fact sheets for each fund. In many cases, the CIT offered is a clone of a mutual fund where you can get such information from Morningstar etc.


-How can they be tracked? (i have my NYSDCP mutual funds listed under "other" investments on Vanguard- and they're very easily trackable and transparent, this also allows for a complete overview of cumulative retirements assets as most are held outside of the NYS 457B plan. Since the Plan has other options such as the Stable Income Fund and International Funds, this is not a new issue. Most participants just plug in the values in whatever financial software they have. I might add, anecdotally and as a Certified Financial Planner and Chartered Financial Analyst licensee for many years, that the goals and objectives of what and how you are tracking things matters a lot. For example, I have seen investors spend a tremendous amount of time worrying about how much of a certain stock is held by a mutual fund and very little time monitoring their stocks/bonds/cash allocations.

------[b] "Vanguard Capital Oppurtunity (i believe) is being removed. It is a closed fund. Can the people that are lucky enough to hold shares and still be able to purchase into this fund- continue to hold on to it? Or will their fund holdings be liquidated and installed into some less than transparent CIT?"
- that is not for me, an associate has this fund, i did not try to get into it before it was closed to new investors- and it has been the primary driver to her account flourishing (approx 13% ROI/Year since inception)



The Cap Opps fund is being transferred to the PRIMECAP fund managed by the same organization. Vanguard realized the high level of overlap between the funds and agreed to accept the assets into PRIMECAP (a mutual fund but very inexpensive.) If you like to do comparisons, chart the last ten years performance (Morningstar does this well) of the two funds. It is basically one line.

-----

I think you will find the next communications more fulfilling. There was a lot to digest with all the changes coming up and we tried to parse out the broader picture issues first with the details to follow. I would close by saying the financial services industry, and the products available, have changed dramatically in the last few years. It would be much “easier” for the Board to just continue with what we have but the procurement process is designed to get the best value for our participants.


------

and finally upon basically apologizing for my tone.....i'm unsure if being a little upset was unreasonable, but it is 6/12 and it goes into effect on 7/10 and we have almost 0 conrete information....alas, I told him i was a boglehead.




---John Bogle is one of my favorites also. Vanguard has provided a great service to retail investors and, in many cases, institutional shareholders like the Plan as well. The race to the bottom has had some good effects but has also caused some distortions. Nothing stays static very long these days.

Since the Plan will “map” holdings to keep asset allocations fundamentally unchanged, you may find that the changes may require little activity on your part.



Thanks for taking the time to write to NYSDCP. A lot of information in the response. I am trying to be optimistic and am at least encouraged by the length and detail of the response you received.

greyny
Posts: 12
Joined: Sat Jun 23, 2012 9:29 am

Re: Changes to NYS Deferred Compensation Plan

Postby greyny » Tue Jun 13, 2017 9:14 am

How would one most accurately replicate Vanguard Total Stock Market Index Fund (VTSMX) with the new Equity Index Fund (S&P 500) and the Russell 2500 Index Fund? I think I am in the ballpark after reading the wiki, but I would like an expert's opinion.

Thanks for the thread. This has been much more informative than anything provided by NYSDCP to date.

SimplicityNow
Posts: 119
Joined: Fri Aug 05, 2016 10:31 am

Re: Changes to NYS Deferred Compensation Plan

Postby SimplicityNow » Tue Jun 13, 2017 3:17 pm

I think a combination of approximately 81% S&P 500 and 19% Russell 2500 would get you close.

Edit: I'm no expert ;)

mischievousj
Posts: 1
Joined: Wed Jun 14, 2017 10:33 am

Re: Changes to NYS Deferred Compensation Plan

Postby mischievousj » Wed Jun 14, 2017 10:36 am

Just going to leave this link here:

https://www.nysdcp.com/iApp/tcm/nysdcp/ ... e_2017.jsp

Looks like there is complete information on the website now for all upcoming changes.

NHRATA01
Posts: 426
Joined: Sat Oct 22, 2011 1:57 pm
Location: New York City area

Re: Changes to NYS Deferred Compensation Plan

Postby NHRATA01 » Thu Jun 15, 2017 9:55 am

Looking through the fund fact sheets, the Black Rock equity and US debt index funds show an ER of 0.00%, although below state it is 0.02%. I'm certain it can't be zero, so I assume for my comparison purposes 0.02% is the number to go with? Likewise the Russel 2500 shows 0.01% but then states 0.02% as the Total Annual Operating Expense. A little confusing.

EDIT: Ok this shows a little better expense comparison: https://www.nysdcp.com/tcm/nysdcp/stati ... NY.pdf?r=1

I have to say, despite maybe a rollout that could've been more effective, the fact they are managing to lower already extremely low expenses for a boglehead type index portfolio is most impressive.

Countermoon
Posts: 28
Joined: Wed Feb 13, 2013 10:22 pm

Re: Changes to NYS Deferred Compensation Plan

Postby Countermoon » Thu Jun 15, 2017 12:23 pm

Thanks for posting this information. I don't think I got an e-mail about the plan changes, but I read the documents on the website.

I guess I'll just use the BlackRock S&P 500 and Russell 2500 funds with tickers to track the corresponding CITs in the NYSDCP.

Bbddl
Posts: 1
Joined: Sat Jun 17, 2017 1:28 pm

Re: Changes to NYS Deferred Compensation Plan

Postby Bbddl » Sat Jun 17, 2017 1:34 pm

Countermoon wrote:Thanks for posting this information. I don't think I got an e-mail about the plan changes, but I read the documents on the website.

I guess I'll just use the BlackRock S&P 500 and Russell 2500 funds with tickers to track the corresponding CITs in the NYSDCP.


A few years ago my wife had an account with John Hancock. There was no ticker available for the fund we were invested in. It was an Insurance product I was not able to be tracked easily.

How is it that will be able to track these new offerings from New York State deferred comp?

Trying2Save
Posts: 23
Joined: Thu Mar 16, 2017 2:25 pm
Location: New York, NY

Re: Changes to NYS Deferred Compensation Plan

Postby Trying2Save » Thu Jun 29, 2017 12:56 pm

Does anyone know if NYSDCP offers an auto-rebalancing feature? When I look it up on the website, it states this:

"Many employers offer automatic asset rebalancing for the Plan, often at no extra charge to participants.

If your employer offers this feature, your Account Executive can explain your options, including how frequently your Plan account is rebalanced and what portion of your assets is to be rebalanced." - source: https://www.nysdcp.com/iApp/tcm/nysdcp/ ... ancing.jsp

I tried calling my Account Executive but there was no response. Additionally, I emailed participant service and they told me: "At this time, the plan does not offer an automatic asset rebalancing", which seems to contradict the website.

I also do not understand why auto-rebalancing would be based on the employer. It seems like something the Plan should either offer or not.

Best regards,
Trying2Save

ikowik
Posts: 88
Joined: Tue Dec 23, 2014 6:52 pm

Re: Changes to NYS Deferred Compensation Plan

Postby ikowik » Thu Jun 29, 2017 1:39 pm

Information on all fund changes came in mail a few weeks ago, but thanks to this thread I already knew most of it :beer
It is likely not rational, but lack of ticker symbols for the CITs makes me a little anxious.
Anyway, much of my investment was already in Vanguard Wellington which is staying. I transferred the smaller amounts existing in Vanguard Total Bond and Mid-cap funds to Wellington as well.

willie838
Posts: 107
Joined: Thu Mar 20, 2014 1:37 am

Re: Changes to NYS Deferred Compensation Plan

Postby willie838 » Mon Jul 03, 2017 2:54 am

are you guys noticing a differential on your accounts when you total up your dividend distributions, and the listed quarterly dividend distributions?

for 3/30-6/1

the quarter activity lists 143.`

but my totals equaled, 200.71 .... when i added them up individually.

so that's


57.71 difference in value......which, even for the listed 19.07 fee would still leave money unaccounted for.



...

can someone compare their dividends listed total, then the sum that they reach when totaling the listed dividend payouts?


.....

also, maybe it was lost on me before, but you do like that the * differential between the gross expense ratio and the net expense ratio goes to the fund manager for fees n blah blah..." i always understood this to be the case for mutual funds...

but that wording is now in the plan (maybe it always was), so that differential goes to the nysdcp for fees and blah blah.

......

boo.

~

TSWNY
Posts: 94
Joined: Sun Mar 13, 2016 1:05 pm

Re: Changes to NYS Deferred Compensation Plan

Postby TSWNY » Mon Jul 10, 2017 11:16 am

How is everyone's transition going? I guess I don't see any issues on my end yet. I did notice that all share prices are $10.00 though. I'm in the BlackRock S&P500, Russell 2500 and the Bond index funds.

secondact
Posts: 9
Joined: Mon Apr 10, 2017 4:14 am

Re: Changes to NYS Deferred Compensation Plan

Postby secondact » Mon Jul 10, 2017 6:58 pm

So far, so good. Apparently these are just "transition accounts", and our money will be moved to the replacement funds or trusts within a week or so.


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