How to find a complete list of 403b fees in TIAA plan?

Have a question about your personal investments? No matter how simple or complex, you can ask it here.
Post Reply
magister
Posts: 16
Joined: Thu Jun 21, 2018 4:18 pm

How to find a complete list of 403b fees in TIAA plan?

Post by magister » Sun Jul 01, 2018 9:49 pm

I've accepted a new job at a university, and I'm investigating the 403(b) plan. However, I'm having trouble getting a clear idea of the plan's fees. I have two specific questions, one regarding how to read the plan's fee schedule, and the other regarding how I would know if there were any additional fees not listed in the schedule:

(1) The plan's fee schedule (what TIAA calls its "Quarterly Investment Update") has a column listing gross and net expense ratios, which is to be expected. But it also has another column that lists what it calls a "Plan Services Fee". So, for example, the two relevant columns for the Vanguard 500 Index Fund Admiral Shares are as follows:

gross: 0.04%
net: 0.04%
Shareholder Fees & Restrictions: Pln Svcs Fee: 0.1%/quarterly

I'm assuming that the net expense ratio and the "Plan Services Fee" should be added together. However--and here is the core of my first question--the expression "0.1%/quarterly" seems ambiguous to me. Should it be read as "0.1 per annum, taken proportionately each quarter"? Or should it be read as "0.1% taken each quarter" (i.e., as "0.4% per annum")? This is a big difference; I can't tell whether the annual expenses for the 500 fund are 14 basis points or 44 basis points.

(2) My other question is this: Is it possible that there are other fees charged by the plan that aren't included in the Quarterly Investment Update? If so, how would I find them? I'm unfamiliar with the law surrounding 403(b) plans, so I'm not sure exactly what to look for or whom to ask. I have examined the University's retirement plan document, but it didn't include any specific figures for fees.

Any help would be appreciated.

magister
Posts: 16
Joined: Thu Jun 21, 2018 4:18 pm

Re: How to find a complete list of 403b fees in TIAA plan?

Post by magister » Mon Jul 02, 2018 8:52 am

Bump.

dbr
Posts: 27207
Joined: Sun Mar 04, 2007 9:50 am

Re: How to find a complete list of 403b fees in TIAA plan?

Post by dbr » Mon Jul 02, 2018 8:54 am

In cases like this it is best to call and ask. Just reading the language it says to me 0.4%/annum. You might compare what they say for these Vanguard funds to what the ERs and fees are on other funds in the list.

The Wizard
Posts: 12434
Joined: Tue Mar 23, 2010 1:45 pm
Location: Reading, MA

Re: How to find a complete list of 403b fees in TIAA plan?

Post by The Wizard » Mon Jul 02, 2018 10:43 am

I think your employer pays TIAA certain management fees, so all we investors need worry about is the stated Expense Ratio.
TIAA doesn't charge us an additional $xx per quarter to invest with them.
For example, their s&p 500 index fund (institutional) TISPX has an ER of 0.06%, which isn't too bad for a 403(b) plan...
Attempted new signature...

magister
Posts: 16
Joined: Thu Jun 21, 2018 4:18 pm

Re: How to find a complete list of 403b fees in TIAA plan?

Post by magister » Mon Jul 02, 2018 12:50 pm

I've just spoken with a TIAA rep, who confirmed for me that the "Plan Services Fee" is in fact 0.1% every quarter, so 0.4% annually. Apart from this and the funds' expense ratios, there are no other fees charged to plan participants.

Thanks for your responses.

magister
Posts: 16
Joined: Thu Jun 21, 2018 4:18 pm

Re: How to find a complete list of 403b fees in TIAA plan?

Post by magister » Mon Jul 02, 2018 12:58 pm

Annoyingly, all of the good funds offered by the plan are charged the 0.4% annual fee; TIAA's annuity products offer annual /credits/ in the range of 0.4% to 0.56% per annum.

User avatar
House Blend
Posts: 4516
Joined: Fri May 04, 2007 1:02 pm

Re: How to find a complete list of 403b fees in TIAA plan?

Post by House Blend » Mon Jul 02, 2018 1:06 pm

The Wizard wrote:
Mon Jul 02, 2018 10:43 am
I think your employer pays TIAA certain management fees, so all we investors need worry about is the stated Expense Ratio.
TIAA doesn't charge us an additional $xx per quarter to invest with them.
In case it isn't clear to others reading along, that's completely wrong. TIAA is able and willing to support customers (i.e., employers) who wish to pass administrative fees on to their employees.

Here's a random example I found by Googling:
The TIAA-CREF annual Plan Servicing Fee of 0.075% or $0.75 per $1,000 of assets will be divided into four quarterly payments and deducted from your City and County of Denver 457(b) Deferred Compensation retirement account quarterly. This administrative fee is in addition to investment management fees described on the next page, and will be prorated across the investment options in your plan account(s). On statements, this fee will be listed as a “TIAA-CREF Plan Servicing Fee” and will appear as a debit for each investment option that you hold as of the last day of each quarter.
To the OP: It's unlikely that there are other fees you haven't found out about yet, although one thing to keep in mind is that if you're at a public university, your plan is not subject to ERISA. This means that there is less regulation regarding disclosures to participants.

magister
Posts: 16
Joined: Thu Jun 21, 2018 4:18 pm

Re: How to find a complete list of 403b fees in TIAA plan?

Post by magister » Mon Jul 02, 2018 1:14 pm

Thanks, House Blend.

I am having a minor conniption fit over here. The fee structure is set up so that investors in index funds (including TIAA indices) are effectively subsidizing participants who purchase the annuity products.

The Wizard
Posts: 12434
Joined: Tue Mar 23, 2010 1:45 pm
Location: Reading, MA

Re: How to find a complete list of 403b fees in TIAA plan?

Post by The Wizard » Mon Jul 02, 2018 2:19 pm

magister wrote:
Mon Jul 02, 2018 1:14 pm
Thanks, House Blend.

I am having a minor conniption fit over here. The fee structure is set up so that investors in index funds (including TIAA indices) are effectively subsidizing participants who purchase the annuity products.
I do not have any Plan Servicing Fees subtracted from my TIAA accounts.
I guess some employer plans do, so your mileage may vary...
Attempted new signature...

dbr
Posts: 27207
Joined: Sun Mar 04, 2007 9:50 am

Re: How to find a complete list of 403b fees in TIAA plan?

Post by dbr » Mon Jul 02, 2018 2:44 pm

The Wizard wrote:
Mon Jul 02, 2018 2:19 pm
magister wrote:
Mon Jul 02, 2018 1:14 pm
Thanks, House Blend.

I am having a minor conniption fit over here. The fee structure is set up so that investors in index funds (including TIAA indices) are effectively subsidizing participants who purchase the annuity products.
I do not have any Plan Servicing Fees subtracted from my TIAA accounts.
I guess some employer plans do, so your mileage may vary...
A variation in retirement plans is whether or how much the employer subsidizes costs as a benefit. In my 401k there are no fees assessed or costs offset to cover plan administration and even payroll costs to manage contributions and withdrawals (tax reporting for example).

Post Reply