Teacher 403B Plans

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aadwen
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Teacher 403B Plans

Post by aadwen » Tue Jul 09, 2019 10:59 pm

Wife's employer uses TCG Advisors

Check out this list of options, thank god Vanguard is on here, the rest look like garbage.

Thoughts?>

https://tcg-doclib.s3.amazonaws.com/tcg ... 195221.pdf

lakpr
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Re: Teacher 403B Plans

Post by lakpr » Wed Jul 10, 2019 4:54 am

There is Fidelity too, except that there are no "two stars" next to it (meaning that they don't accept Roth contributions).
But as you said, you can ignore the rest as you have Vanguard in there.

A440
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Re: Teacher 403B Plans

Post by A440 » Wed Jul 10, 2019 5:59 am

Does TCG charge a fee on top of Vanguard's expense ratio?
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aadwen
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Re: Teacher 403B Plans

Post by aadwen » Fri Jul 12, 2019 12:06 am

lakpr wrote:
Wed Jul 10, 2019 4:54 am
There is Fidelity too, except that there are no "two stars" next to it (meaning that they don't accept Roth contributions).
But as you said, you can ignore the rest as you have Vanguard in there.
Where do you see Fidelity?

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aadwen
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Re: Teacher 403B Plans

Post by aadwen » Fri Jul 12, 2019 12:07 am

A440 wrote:
Wed Jul 10, 2019 5:59 am
Does TCG charge a fee on top of Vanguard's expense ratio?
Hard to tell, see link below, as the fees block has a 1 in it???
http://www.tcgservices.com/docview/#/4 ... anDesc/514

A440
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Re: Teacher 403B Plans

Post by A440 » Fri Jul 12, 2019 6:41 am

I'd give them a call and find out.
My participant-directed plan through Lincoln Investment charges $8.75 per quarter. The 3rd party administrator (OMNI) charges $9 per quarter (3 out of 4 quarters, not sure why this is??). So last year my fees were $62 not including the expense ratio of .04% for Vanguard TSM Admiral share. This fee structure is very close to what I pay for my Vanguard 403b of $60 annually. This is my old 403b when we had Vanguard as a provider in our district before the 2009 rule change. They stopped being a provider because they wouldn't allow loans as our plan document provides. When I separate from service I'll combine the two accounts for simplicity.
FWIW, the dividends always more than cover the fees.
I don't know what the future holds, but I know who holds my future.

Mickey7
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Re: Teacher 403B Plans

Post by Mickey7 » Fri Jul 12, 2019 11:28 am

With the choices you have on the site, I would definitely go for it.

Being a teacher in education and not having much information to go on, I had my initial 403b in my local credit union which was not very good. My account languished there for some time. Did I say languished? I meant bled. With further research found out through TRS that TCG would enable me to utilize Vanguard. Once my final distribution is processed in August I will move it from TCG to Vanguard as a simple retirement account removing TCG from the equation.

Really wish that I would have known about this earlier, but that is life.

EdLaFave
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Re: Teacher 403B Plans

Post by EdLaFave » Fri Jul 12, 2019 12:47 pm

This list has several “great” to “reasonable enough” options:

Vanguard, documented here

Security Benefit’s NEA DirectInvest, documented here.

Lincoln’s PDP

Aspire, documented here.

PlanMember Direct, documented here.

Remember, you can always get your district to add Fidelity and/or Vanguard to the list of approved vendors. I did this in OCPS (FL) and I’m happy to help anybody do it in their district.

lakpr
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Re: Teacher 403B Plans

Post by lakpr » Fri Jul 12, 2019 1:49 pm

aadwen wrote:
Fri Jul 12, 2019 12:06 am
lakpr wrote:
Wed Jul 10, 2019 4:54 am
There is Fidelity too, except that there are no "two stars" next to it (meaning that they don't accept Roth contributions).
But as you said, you can ignore the rest as you have Vanguard in there.
Where do you see Fidelity?
Number 13 on the list. Did I misunderstand the provider?

renue74
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Re: Teacher 403B Plans

Post by renue74 » Fri Jul 12, 2019 2:15 pm

My wife has Aspire. I helped set it up. You have a lot of nice options there.

I think Aspire charges a small fee that is very reasonable. But if you can go directly to Vanguard with this account that would be good.

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fortfun
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Re: Teacher 403B Plans

Post by fortfun » Fri Jul 12, 2019 6:17 pm

EdLaFave wrote:
Fri Jul 12, 2019 12:47 pm
This list has several “great” to “reasonable enough” options:

Vanguard, documented here

Security Benefit’s NEA DirectInvest, documented here.

Lincoln’s PDP

Aspire, documented here.

PlanMember Direct, documented here.

Remember, you can always get your district to add Fidelity and/or Vanguard to the list of approved vendors. I did this in OCPS (FL) and I’m happy to help anybody do it in their district.
How? I've been trying for years...

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aadwen
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Re: Teacher 403B Plans

Post by aadwen » Fri Jul 12, 2019 9:25 pm

Remember, you can always get your district to add Fidelity and/or Vanguard to the list of approved vendors. I did this in OCPS (FL) and I’m happy to help anybody do it in their district.
Can you please provide some details?

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FiveK
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Re: Teacher 403B Plans

Post by FiveK » Fri Jul 12, 2019 9:41 pm

aadwen wrote:
Fri Jul 12, 2019 9:25 pm
Remember, you can always get your district to add Fidelity and/or Vanguard to the list of approved vendors. I did this in OCPS (FL) and I’m happy to help anybody do it in their district.
Can you please provide some details?
Don't know about "always" but many school district union contracts include language that if some number (can be as low as 10 or so) of people sign a request to add a vendor, that vendor must be added.

fposte
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Re: Teacher 403B Plans

Post by fposte » Fri Jul 12, 2019 9:47 pm

lakpr wrote:
Fri Jul 12, 2019 1:49 pm
aadwen wrote:
Fri Jul 12, 2019 12:06 am
lakpr wrote:
Wed Jul 10, 2019 4:54 am
There is Fidelity too, except that there are no "two stars" next to it (meaning that they don't accept Roth contributions).
But as you said, you can ignore the rest as you have Vanguard in there.
Where do you see Fidelity?
Number 13 on the list. Did I misunderstand the provider?
Yup. That’s a seemingly unrelated insurance company. I bet they get a lot of business from people who make that mistake.

EdLaFave
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Re: Teacher 403B Plans

Post by EdLaFave » Sat Jul 13, 2019 10:58 am

fortfun wrote:
Fri Jul 12, 2019 6:17 pm
How? I've been trying for years...
aadwen wrote:
Fri Jul 12, 2019 9:25 pm
Can you please provide some details?
Every district is different and I don't pretend to have all of the answers, but I'll lay out my general recommendations based on my experience.

Do Your Homework
1. Fully understand the vendors/plans currently approved by your district.
2. Fully understand the vendors/plans you want your district to offer.
3. Based on the previous research, you need to be able to concisely and clearly articulate the scale of the problem, why some vendors are exploitative, and why others should replace them. Expect a 90% probability that everybody you speak to will be reasonably ignorant (don't place a bad connotation on that word) and at least partially financially illiterate (again, don't place a bad connotation on that word)...do not condescend to them, be helpful to them.
4. Reach out to the desired vendors and get in touch with somebody that specifically works on 403b/457b enrollment. Learn how enrollment works from their end and get their direct contact information.
5. Learn about your district's bureaucracy as it relates to 403b/457b plans. In Orange County (FL) they have a "Retirement Services" department and above that is somebody with the title of "Senior Director of Risk Management," these are the folks most directly involved in the retirement plans. The district relies on a Third Party Administrator (TPA) to manage the nuts and bolts of running these plans, but for a variety of reasons they unfortunately also rely on them for input/advice. The TPA acts decisively against the best interest of employees, but they MUST obey commands issued from the district. Every five years the district convenes a "fringe committee" (the Union has a seat at the table in addition to district employees) and they're responsible for deciding which vendors will be added to or removed from the approved list. In order to be considered vendors must respond to a Request for Proposal (RFP) that the district posts on a public website. Above all of that is the school board and superintendent, they can absolutely exert influence on this process. All of that is to say, you should understand how your district does business and you should identify the key decision makers.

Work Your Way Up the Chain
1. Start at the bottom of the chain of command for both the district and the union.
2. You will have to educate these people and you'll have to do it both well and in way that is socially acceptable (you can't be rude, demanding, etc.).
3. Be prepared to do as much of their job for them as is possible because they may not be particularly interested in doing this. Perhaps they don't really care about this problem, perhaps they don't want something added to their plate, perhaps they are lazy, perhaps they don't want to rock the boat, whatever.
4. Your job is to clearly lay out the problem, lay out the solution, and offer to do as much work as possible yourself. Since you presumably understand the district's process, you understand the process of the vendors you'd like to see added, and you have contacts...you can probably push these folks right to the finish line and all they have to do is step over it.
5. Be prepared to listen to their concerns and their perspective because you may be able to use that information to remove whatever barriers are in their way (real or imagined)...plus people are more likely to help you if they think you care about their circumstances. It can be a give and take.
6. If you're not getting results (and maybe even if you are), then work your way up the chain of command.
7. If you still aren't getting results then you'll need to network with teachers and put pressure on the bureaucracy until they cave. In my experience, people love to take the path of least resistance and it might be your job to turn the path of inaction into a lot of work for them (constant phone calls, constant speeches at the school board meetings, etc).

Of course after all of this, you can still fail because you don't have the power to approve/deny vendors. However, in my experience the people who do aren't operating with ill-intent and can therefore be moved to do the right thing...even if they do require a lot of prodding (welcome to bureaucracy).

If anybody wants to get started down that path then I'm happy to answer specific questions and provide whatever insight I can. On my blog I documented some of the actions and some of the speeches I gave during my successful effort to get OCPS (FL) to add Vanguard and Fidelity.

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fortfun
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Re: Teacher 403B Plans

Post by fortfun » Sat Jul 13, 2019 4:08 pm

EdLaFave wrote:
Sat Jul 13, 2019 10:58 am
fortfun wrote:
Fri Jul 12, 2019 6:17 pm
How? I've been trying for years...
aadwen wrote:
Fri Jul 12, 2019 9:25 pm
Can you please provide some details?
Every district is different and I don't pretend to have all of the answers, but I'll lay out my general recommendations based on my experience.

Do Your Homework
1. Fully understand the vendors/plans currently approved by your district.
2. Fully understand the vendors/plans you want your district to offer.
3. Based on the previous research, you need to be able to concisely and clearly articulate the scale of the problem, why some vendors are exploitative, and why others should replace them. Expect a 90% probability that everybody you speak to will be reasonably ignorant (don't place a bad connotation on that word) and at least partially financially illiterate (again, don't place a bad connotation on that word)...do not condescend to them, be helpful to them.
4. Reach out to the desired vendors and get in touch with somebody that specifically works on 403b/457b enrollment. Learn how enrollment works from their end and get their direct contact information.
5. Learn about your district's bureaucracy as it relates to 403b/457b plans. In Orange County (FL) they have a "Retirement Services" department and above that is somebody with the title of "Senior Director of Risk Management," these are the folks most directly involved in the retirement plans. The district relies on a Third Party Administrator (TPA) to manage the nuts and bolts of running these plans, but for a variety of reasons they unfortunately also rely on them for input/advice. The TPA acts decisively against the best interest of employees, but they MUST obey commands issued from the district. Every five years the district convenes a "fringe committee" (the Union has a seat at the table in addition to district employees) and they're responsible for deciding which vendors will be added to or removed from the approved list. In order to be considered vendors must respond to a Request for Proposal (RFP) that the district posts on a public website. Above all of that is the school board and superintendent, they can absolutely exert influence on this process. All of that is to say, you should understand how your district does business and you should identify the key decision makers.

Work Your Way Up the Chain
1. Start at the bottom of the chain of command for both the district and the union.
2. You will have to educate these people and you'll have to do it both well and in way that is socially acceptable (you can't be rude, demanding, etc.).
3. Be prepared to do as much of their job for them as is possible because they may not be particularly interested in doing this. Perhaps they don't really care about this problem, perhaps they don't want something added to their plate, perhaps they are lazy, perhaps they don't want to rock the boat, whatever.
4. Your job is to clearly lay out the problem, lay out the solution, and offer to do as much work as possible yourself. Since you presumably understand the district's process, you understand the process of the vendors you'd like to see added, and you have contacts...you can probably push these folks right to the finish line and all they have to do is step over it.
5. Be prepared to listen to their concerns and their perspective because you may be able to use that information to remove whatever barriers are in their way (real or imagined)...plus people are more likely to help you if they think you care about their circumstances. It can be a give and take.
6. If you're not getting results (and maybe even if you are), then work your way up the chain of command.
7. If you still aren't getting results then you'll need to network with teachers and put pressure on the bureaucracy until they cave. In my experience, people love to take the path of least resistance and it might be your job to turn the path of inaction into a lot of work for them (constant phone calls, constant speeches at the school board meetings, etc).

Of course after all of this, you can still fail because you don't have the power to approve/deny vendors. However, in my experience the people who do aren't operating with ill-intent and can therefore be moved to do the right thing...even if they do require a lot of prodding (welcome to bureaucracy).

If anybody wants to get started down that path then I'm happy to answer specific questions and provide whatever insight I can. On my blog I documented some of the actions and some of the speeches I gave during my successful effort to get OCPS (FL) to add Vanguard and Fidelity.
Thank you EdLaFave.

Slapshot
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Re: Teacher 403B Plans

Post by Slapshot » Sun Jul 14, 2019 2:27 pm

Is this a 403b in which the school district provides a match? If not, just do it on your own. When I was teaching, my district just offered outrageously expensive options without any match. So I set up a Vanguard 403b myself and then got the district to deposit my contribution directly into Vanguard so I never saw the money in my take home check. That way I never had to worry about any fees or costs from 2nd parties. It worked out fine.
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Re: Teacher 403B Plans

Post by LadyGeek » Mon Jul 15, 2019 7:57 pm

Requested by fortfun, I have created a wiki page based on EdLaFave's post. See: Wiki - How to campaign for a better 403(b) plan

Wiki comments should be made in the above thread.

This thread is for helping aadwen select appropriate funds.
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Socrates
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Re: Teacher 403B Plans

Post by Socrates » Mon Jul 15, 2019 8:16 pm

Long time educator here (K-12 and college)

Vanguard is obviously excellent, but they have limited fund choices with 403(b). My 403(b) fund is primarily Vanguard index funds: TSM, Small Cap Index, Corporate Bond, Health care, REIT.

Aspire is also very good and I learned about them on this forum. They charge and addition .15 expense ratio, but they are essentially a brokerage that allows you to purchase many different funds. I have Vanguard Wellesley through them as well a VBILX (both are not offered through the 403(b) Vanguard. Aspire allows you to buy into other funds for a very low cost if you are into that: e.g., Pimco, PrimeCap, American Funds, DFA, etc.

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EdLaFave
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Re: Teacher 403B Plans

Post by EdLaFave » Mon Jul 15, 2019 8:34 pm

Socrates wrote:
Mon Jul 15, 2019 8:16 pm
Vanguard is obviously excellent, but they have limited fund choices with 403(b). My 403(b) fund is primarily Vanguard index funds: TSM, Small Cap Index, Corporate Bond, Health care, REIT.
I believe your employer likely negotiated to have Vanguard offer only a subset of funds. If you ever look into it, I’d like to know why the list is so limited.

After I got Vanguard added to our district, employees have sent me the list of available funds and it is lengthy. I didn’t take the time to verify that it contained literally every Vanguard fund, but it sure looked like it did.

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Re: Teacher 403B Plans

Post by Socrates » Mon Jul 15, 2019 8:59 pm

I believe your employer likely negotiated to have Vanguard offer only a subset of funds. If you ever look into it, I’d like to know why the list is so limited.

No......Here is the list from the 403(b) website which matches my fund choices also:

https://www.vanguard.com/pdf/403BINVT.pdf
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EdLaFave
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Re: Teacher 403B Plans

Post by EdLaFave » Mon Jul 15, 2019 9:17 pm

Socrates wrote:
Mon Jul 15, 2019 8:59 pm

No......Here is the list from the 403(b) website which matches my fund choices also:

https://www.vanguard.com/pdf/403BINVT.pdf
I didn’t take the time to see if this list is equal to the list others have sent me.

However, my confusion centers on your use of the words “limited fund choices”. It’s hard for me to use the word “limited” to describe a lineup of 50+ funds with target date, fixed allocation, total market, and specific asset funds.

Problem solved, thanks for the link.

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Re: Teacher 403B Plans

Post by Socrates » Mon Jul 15, 2019 10:11 pm

“limited fund choices”
not all the fund choices....Fidelity, for example, offers all its funds for 403(b) clients.

Vanguard doesn't offer many of its popular and IMHO quality funds like Wellesley, Wellington, VBILX, International Explorer, etc.
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Re: Teacher 403B Plans

Post by EdLaFave » Mon Jul 15, 2019 10:23 pm

Socrates wrote:
Mon Jul 15, 2019 10:11 pm
Fidelity, for example, offers all its funds for 403(b) clients.

Vanguard doesn't offer many of its popular and IMHO quality funds like Wellesley, Wellington, VBILX, International Explorer, etc.
I’ve been told Fidelity does not offer all of its funds to 403b clients. Specifically I was told Fidelity does not offer the 0% expense ratio funds. This information is coming from people invested in fidelity through OCPS (FL). I’ve not done an exhaustive check to see if there are others.

If want those Vanguard funds that’s fine. However, I do want to point out that Vanguard does offer an Intermediate-Term Investment-Grade bond fund in their 403b, which I believe is VBILX.

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Re: Teacher 403B Plans

Post by Socrates » Mon Jul 15, 2019 10:33 pm

If want those Vanguard funds that’s fine. However, I do want to point out that Vanguard does offer an Intermediate-Term Investment-Grade bond fund in their 403b, which I believe is VBILX.
Vanguard does not offer VBILX in their 4039b) which is approximately 50% treasury 50% corporate and recommended by Bogle (Google C. Benz Morning star interview) . They do offer a handful of bond funds and the one you mention is VFIDX.

Fidelity may not offer every single fund, but they do offer 180 funds which is a very nice selection. I have the Total stock Market fund (I forgot the ticker) and Fidelity Total Bond. Again, most of my 403(b) is in Vanguard. I am very happy, I just wished they offered more of a selection. Limited references a small selection of funds as compared to say an IRA (i.e. 50 or 60 vs 180). I supplement the funds I mentioned earlier in my 457 and IRA.
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Re: Teacher 403B Plans

Post by Aku09 » Mon Jul 15, 2019 10:38 pm

So are you able to choose any vendor and set up your own 403b plan if you don’t like what your school district offers?

My wife just went back to teaching last year for a very small school district. At the end of the year the only option they gave her was a 403b with American fidelity utilizing variable annuities. I knew it was probably garbage, but I talked to their “agent” on the phone for quite some time and he assured me the only fees were $15 year plus expense ratios which were not inflated. Also said I did not have to withdraw and convert to an annuity and could take it out just like a 401k. I had my wife sign up and contribute 10% of her paycheck.

Just started contributing last month and we logged into her account and looked at the prospectus. It’s ridiculous the fees there are. In addition there is a 3% sales charge and other fees totaling nearly 5%. The only withdrawal options are converting to an annuity as well. In short...everything he said was a lie and we are in the process of stopping contributions and withdrawing the money that is in there (roughly $350). I consider it a lesson and from now on I’ll get a copy of the prospectus before signing up for anything. Although I’m upset at the numerous lies I was told.

My only other option for her would be to do a Backdoor Roth considering my higher income. If I can set up her own personal 403b through vanguard that would be great, but I was unaware this was possible.

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Re: Teacher 403B Plans

Post by EdLaFave » Mon Jul 15, 2019 10:42 pm

Aku09 wrote:
Mon Jul 15, 2019 10:38 pm
So are you able to choose any vendor and set up your own 403b plan if you don’t like what your school district offers?
Somebody on this thread claims the answer is yes. That runs counter to my experience and the experience of everybody I’ve talked to who has experience with 403bs.

I can always be surprised, but I believe strongly that you cannot pick a 403b plan unless it is approved by the district. I know for a fact that’s the case in my district.

Make sure to consider a 457b if it is available to you and your only 403b option is garbage.
Last edited by EdLaFave on Mon Jul 15, 2019 10:48 pm, edited 1 time in total.

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Re: Teacher 403B Plans

Post by EdLaFave » Mon Jul 15, 2019 10:47 pm

Socrates wrote:
Mon Jul 15, 2019 10:33 pm
the one you mention is VFIDX.
Thanks. I wish Vanguard would have posted symbols in that PDF.

Somebody I know told me they have access to VBILX. It isn’t clear if they’re wrong or not, I can only take their word for it.

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Re: Teacher 403B Plans

Post by Aku09 » Mon Jul 15, 2019 10:52 pm

I believe the 403b is the only option she has to her. At least that’s the only option she has been presented with. It’s a very small and rural district.

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Re: Teacher 403B Plans

Post by MNGopher » Mon Jul 15, 2019 11:33 pm

EdLaFave wrote:
Mon Jul 15, 2019 9:17 pm
Socrates wrote:
Mon Jul 15, 2019 8:59 pm

No......Here is the list from the 403(b) website which matches my fund choices also:

https://www.vanguard.com/pdf/403BINVT.pdf
I didn’t take the time to see if this list is equal to the list others have sent me.

However, my confusion centers on your use of the words “limited fund choices”. It’s hard for me to use the word “limited” to describe a lineup of 50+ funds with target date, fixed allocation, total market, and specific asset funds.

Problem solved, thanks for the link.

Once Vanguard was added to my districts approved vendor list, I was able to purchase any of their funds I wanted. The only one I've ever bought is the 2025 Target Date Fund, so maybe there are some that are off limits, but I was never shown any restrictive list of any kind.

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Re: Teacher 403B Plans

Post by A440 » Tue Jul 16, 2019 6:06 am

FWIW, Vanguard would not "sign off" on our Board's 403b plan document, as the document provides for 403b loans and this is not something Vanguard allows. This is what I was told by Vanguard when I tried to get them added as a vendor. So we need to go through another vendor to get a Vanguard fund. Not too much of a problem if you use a PDP (Participant-directed plan; not a Professional Development Plan as we know it in our profession :happy )
I don't know what the future holds, but I know who holds my future.

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Re: Teacher 403B Plans

Post by KESP » Thu Jul 18, 2019 8:28 pm

I also strongly doubt you can set up your own 403b with whoever you want. It’s often quite a fight to get another vendor added to the list. Many teachers seem to be totally uninterested in investing, and would rather depend on the predatory “advisors” that gift us with free pads, donuts and pens on a regular basis. It took me a year to get Aspire added to our vendor list. No one was fighting me, it just wasn’t a priority. It is helpful if you can get the union on board. You have to be willing to do the legwork by yourself, which I was perfectly fine with. The site 403bwise is very helpful as well for information and moral support.

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