Great 403b for teachers?

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KESP
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Re: Great 403b for teachers?

Post by KESP » Thu Nov 03, 2016 9:18 am

I had posted on another thread, but thought this was a good place to continue. I have started the conversation with our business manager who told me that under our contract, there is room for another vendor. As I stated in my other post, we are a very small district. I am thinking of pushing the NEA DirectInvest program because I would think the chances of adding that would be easier than trying to get Fidelity or Vanguard to become an option in our very small district. If it's something that I can just get the district to approve and I can do all the signup myself, that would be even better. Just a thought. I will tackle this next week as I will be away for a few days, but appreciate all the work that Steve has done. as well as the feedback from people who have used it.

sschullo
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Re: Great 403b for teachers?

Post by sschullo » Thu Nov 03, 2016 9:19 am

corysold wrote:Thanks for the updates. Hasn't quite been a full year yet, but everything has been smooth and I don't have any issues with the plan at this point. I find the website easy to use and though I haven't changed anything with the plan, I've tried out the system all the way to the final confirmation and it seemed to work just fine.

My sign up experience wasn't as long or arduous as some of the others, perhaps it is a matter of who you speak to or which portal you use to sign up. Frankly, I don't remember exactly how I did it at this point, but I don't remember it being any more difficult than anything I've done at Vanguard.


Thanks for the update, and congratulations.
Public School K-12 Educators: "Ask NOT what your annuity sales person can do for you, ask what you can do to be a Do-It-Yourselfer (DIY)."

Coolstavi
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Re: Great 403b for teachers?

Post by Coolstavi » Fri Nov 04, 2016 9:34 am

Hey all,

I enrolled online in the NEA Direct Invest program through Security Benefit 3 weeks ago. It is finally all set-up today. I will need to wait to see if they deposit my next paycheck correctly into the new account. I have previously had a 403b with them so I already had an online log-in set up. I randomly checked yesterday to see if things were moving and it was in the process of transferring funds. There has been no contact about the account being created or the funds being transferred. Everything is allocated correctly in the percentages I set up.

For those out you who do not have a Security Benefit account already, not sure how you'll know things are moving.

Scott311
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Re: Great 403b for teachers?

Post by Scott311 » Fri Nov 04, 2016 12:39 pm

I just got done skimming through this thread... I was wondering, does anyone know if your district has to offer this plan as an existing option in order to be able to enroll or can one simply be a member of the NEA or any of it's affiliates? I am in Michigan and my wife is a teacher. The Michigan Educational Association is an "affiliate" to the NEA. This plan, barring undetermined hidden fees, is remarkably better than any of the garbage currently offered by her district so it would be great if it was possible to enroll. Can anyone offer any insight into this?

krow36
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Re: Great 403b for teachers?

Post by krow36 » Fri Nov 04, 2016 4:01 pm

Scott311 wrote:I just got done skimming through this thread... I was wondering, does anyone know if your district has to offer this plan as an existing option in order to be able to enroll or can one simply be a member of the NEA or any of it's affiliates?

The district has to have Security Benefit on their list of possible 403b providers. If SB is on the list, then Direct Invest is an option and it doesn't matter if the NEA is the union for the school. If you look over the application form or the contract agreement, you won't see any mention of NEA membership.

If Security Benefit is not on the district's list and there are only very expensive providers, you could try to get a low cost vender added to the list such as Fidelity, Vanguard, Aspire, etc. It's possible that there are options already available from the current providers that are medium cost (<1%) and much better than the annuity-based ripoffs (2-3%) that are usually what the reps sell. If you post the district's list, it's possible we can spot a better plan than what she has now?

sschullo
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Re: Great 403b for teachers?

Post by sschullo » Fri Nov 04, 2016 4:06 pm

Scott311 wrote:I just got done skimming through this thread... I was wondering, does anyone know if your district has to offer this plan as an existing option in order to be able to enroll or can one simply be a member of the NEA or any of it's affiliates? I am in Michigan and my wife is a teacher. The Michigan Educational Association is an "affiliate" to the NEA. This plan, barring undetermined hidden fees, is remarkably better than any of the garbage currently offered by her district so it would be great if it was possible to enroll. Can anyone offer any insight into this?


here is a discussion that may shed light on your questions: http://board.403bwise.com/index.php?showtopic=6120
Public School K-12 Educators: "Ask NOT what your annuity sales person can do for you, ask what you can do to be a Do-It-Yourselfer (DIY)."

Scott311
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Re: Great 403b for teachers?

Post by Scott311 » Mon Nov 07, 2016 9:38 am

Thanks for the replies guys. Actually Krow, thanks to you and others, I was able to seek out a decent plan in her district through Planmember services earlier this year. Not unlike this SB plan, it was a self-directed plan which I had to jump through hoops to get her enrolled, but once that happened, I was able to put her in Vanguard admiral shares. They still tack on a 0.35% fee which is annoying but we are under .5% so that's pretty good.

Anyway, we are friends with a lot of teachers in the district and it's very frustrating that they all seem oblivious to this. They just let their money go in to an Oppenheimer default plan without asking any questions. They listen to a third-party sales person who they think is some expert financial adviser tell them which funds are going to make them a killing. I often think about trying to help but I'm only the spouse of a teacher and don't want to overstep my bounds. Whew, feels good to vent a little. Thanks for all you do guys!

krow36
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Re: Great 403b for teachers?

Post by krow36 » Mon Nov 07, 2016 11:16 pm

scott311, thanks for the update. I see in your March thread that Security Benefit is not on your district's provider list. I’m glad to learn that the self-directed PlanMember Plan is working for you. I think a 403b plan with Vanguard index funds and all fees totaling under 0.50% is definitely usable. There are many 401k plans with similar fees.

It’s a shame that your colleagues don’t get it and are not interested in lower fees, but unfortunately that seems to be a common situation. By leaving the local rep out of the plan, some financial companies are making a good self-directed 403b plan available to DIYers. Have you thought of leaving a copy of the NYT article in the teacher's lounge?

mnnice
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Re: Great 403b for teachers?

Post by mnnice » Tue Nov 08, 2016 8:36 am

I opened a Security Benefit 403b in 2013. It was the least awful of my 403b choices. I ended up leaving public education and have tried two or three times to roll this over to my Rollover IRA. They make it extra difficult. I be hesitant to roll money into it for sure.

I do appreciate the thread as the fee rebate for e-statements and some new Vanguard choices. Thanks

krow36
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Re: Great 403b for teachers?

Post by krow36 » Tue Nov 08, 2016 1:48 pm

mnnice, thanks for posting on this thread about your experience with Security Benefit’s Direct Invest. Have you had the Direct Invest account since 2013, or did you change to Direct Invest from another SB plan? Can you confirm that at the end of a year of contributing, Direct Invest had no fees (beyond the funds’ expense ratio) other than:
An annual fee of $35 for accounts of less than $50,000.
A annual fee of $30 if the employee revokes their agreement to receive all communications by mail instead of electronically.
A $25 withdrawal fee for any withdrawal not requested through the employee’s online account.
I ended up leaving public education and have tried two or three times to roll this over to my Rollover IRA. They make it extra difficult. I be hesitant to roll money into it for sure.

Are you using your Rollover IRA provider’s transfer form to pull your account to them? I expect that SB also has a form you have to complete? Can you tell us the nature of the difficulty? Is the reason you’d "be hesitant to roll money into it” due to the difficulty you’ve had with the transfer, or something else?

mnnice
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Re: Great 403b for teachers?

Post by mnnice » Tue Nov 08, 2016 2:52 pm

krow36 wrote:mnnice, thanks for posting on this thread about your experience with Security Benefit’s Direct Invest. Have you had the Direct Invest account since 2013, or did you change to Direct Invest from another SB plan?I was a new employee to the organization. I ended up just working the 2013-2014 school year. My only SB experience was that year as a direct invest customer Can you confirm that at the end of a year of contributing, Direct Invest had no fees (beyond the funds’ expense ratio) other than:
An annual fee of $35 for accounts of less than $50,000. My fee third quarter of 2016 was $10.52. Last quarter it was $10.30.
A annual fee of $30 if the employee revokes their agreement to receive all communications by mail instead of electronically.
A $25 withdrawal fee for any withdrawal not requested through the employee’s online account.
I ended up leaving public education and have tried two or three times to roll this over to my Rollover IRA. They make it extra difficult. I be hesitant to roll money into it for sure.

Are you using your Rollover IRA provider’s transfer form to pull your account to them? I expect that SB also has a form you have to complete? Yes I also had to fill out a separate third party administrator form. I suspect this is a state of MN requirement? But I never experienced this level of difficulty with other rollovers. Can you tell us the nature of the difficulty? Is the reason you’d "be hesitant to roll money into it” due to the difficulty you’ve had with the transfer, or something else?I would not roll money in because of the difficulties with the transfer and that Vanguard or Fidelity would be lower fees.

Tracker09
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Re: Great 403b for teachers?

Post by Tracker09 » Sun Jan 29, 2017 12:35 pm

My wife tried to sign up for this. Security Benefit is listed as one of her 403b providers. However, both Security Benefit and her school said this plan isn't on of the ones offered to her school. There were no listed plans in the documentation that the school had sent her, just the names of the eligible companies providing 403b. Does she have options to keep pursuing this?

krow36
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Re: Great 403b for teachers?

Post by krow36 » Sun Jan 29, 2017 3:44 pm

If you go to the Security Benefit website and choose “For Individuals”, and the “Mutual Fund Custodial”, you will see NEA DirectInvest. So it is available wherever SB is sold in K-12 schools, as far as I know. There is one exception and that is CA. SB does not list DirectInvest in their offerings in 403bcompare.com and that is a requirement of CA state law.

Can you post a list of the district’s providers? It’s possible there is another low-cost option if you are in CA. If you not in CA, I wonder what the reasons the school district have? DirectInvest is done via the internet and doesn’t involve any local rep. The lists never give details of the various plans a provider offers.

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Re: Great 403b for teachers?

Post by sschullo » Sun Jan 29, 2017 4:17 pm

krow36 wrote:If you go to the Security Benefit website and choose “For Individuals”, and the “Mutual Fund Custodial”, you will see NEA DirectInvest. So it is available wherever SB is sold in K-12 schools, as far as I know. There is one exception and that is CA. SB does not list DirectInvest in their offerings in 403bcompare.com and that is a requirement of CA state law.

Can you post a list of the district’s providers? It’s possible there is another low-cost option if you are in CA. If you not in CA, I wonder what the reasons the school district have? DirectInvest is done via the internet and doesn’t involve any local rep. The lists never give details of the various plans a provider offers.


krow
FYI, I have inquired about this blatant 403bcompare.com omission of Direct Invest with our 403(b) TPA. TSA Consulting Group will report their findings at our next advisory meeting in two weeks.
Public School K-12 Educators: "Ask NOT what your annuity sales person can do for you, ask what you can do to be a Do-It-Yourselfer (DIY)."

Tracker09
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Re: Great 403b for teachers?

Post by Tracker09 » Sun Jan 29, 2017 6:50 pm

krow36 wrote:If you go to the Security Benefit website and choose “For Individuals”, and the “Mutual Fund Custodial”, you will see NEA DirectInvest. So it is available wherever SB is sold in K-12 schools, as far as I know. There is one exception and that is CA. SB does not list DirectInvest in their offerings in 403bcompare.com and that is a requirement of CA state law.

Can you post a list of the district’s providers? It’s possible there is another low-cost option if you are in CA. If you not in CA, I wonder what the reasons the school district have? DirectInvest is done via the internet and doesn’t involve any local rep. The lists never give details of the various plans a provider offers.


We're in CT.

Here's the list
Ameriprise
AXA
Hooker & Holcombe
First Investors
Great American Financial
Horace Mann
Metlife
Security Benefit
VOYA

I look at all of these and the DirectInvest plan seems to be the only one with a low fee option. I could have missed something however.

krow36
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Re: Great 403b for teachers?

Post by krow36 » Sun Jan 29, 2017 10:27 pm

I agree that the SB DirectInvest 403b is the only low-cost option. When you say “both Security Benefit and her school said this plan isn't one of the ones offered to her school”, just who are you talking to? By “Security Benefit”, do you mean the local SB rep? If so, that could be some self-serving disinformation. You can’t rely on the local rep to know anything about NEA DirectInvest which is designed to be a DIY internet based plan that bypasses the rep. SB has a phone # you can call but posters have had variable luck in finding someone knowledgable about DirectInvest. You might have to be persistent about getting someone knowledgable.

By “the school district”, do you mean someone in the HR office? Exactly what did you ask them? If you asked them, is Security Benefit on their provider list, and they said yes, then I think you are OK to use DirectInvest. That should mean that the school district will accept your salary reduction form (either their’s or SB’s). The district does not control which of SB’s plans you select—that is up to your wife! I guess it’s possible that there is someone in the HR office that wants to maintain the present high cost vendors control of the 403b plans. I hope that’s not the case, but if SB is on the list, then NEA DirectInvest should be an option for your wife.

Have you read the NYTimes articles on the K-12 403b problems? The first in the series discusses Security Benefit and their outrageously annuity-based 403b plans. The teacher eventually moved to SB’s DirectInvest plan. https://www.nytimes.com/2016/10/23/your ... share&_r=1

Please let us know how this turns out. Good luck!

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teacher
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Re: Great 403b for teachers?

Post by teacher » Sun Jan 29, 2017 10:42 pm

Over the years, I have seen threads posted on the issue of poor 403b offerings, and it's a shame teachers in other states do not have the benefits made available in our district and state. I was extremely lucky because our union and district office worked together to provided a very comprehensive list of venders. I invested exclusively in Vanguard and ALL open Vanguard funds were available to 403b accounts. I invested directly with Vanguard, so I benefited from Vanguard's low expense ratio. The only drawback was 403b accounts could not qualify for admiral status.

Another option for teachers in other states may be found in their state retirement system. There are other investment options in the CalSTRS 403b plan, but here is the list of Vanguard fund offerings in California's State Retirement System:
VANGUARD TOTAL BOND MARKET
VANGUARD SHORT-TERM BOND INDEX
VANGUARD INFLATION PROTECTED
VANGUARD TOTAL STOCK MARKET
VANGUARD INSTITUTIONAL INDEX
VANGUARD SMALL CAP INDEX
VANGUARD MID CAP INDEX
VANGUARD EMERGING MARKETS
VANGUARD DEVELOPED MARKETS
VANGUARD REIT INDEX

Consider bypassing your district 403b offerings and try checking with your state retirement system. They may have better offerings than your district makes available.

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Re: Great 403b for teachers?

Post by sschullo » Sun Jan 29, 2017 11:11 pm

teacher wrote:Over the years, I have seen threads posted on the issue of poor 403b offerings, and it's a shame teachers in other states do not have the benefits made available in our district and state. I was extremely lucky because our union and district office worked together to provided a very comprehensive list of venders. I invested exclusively in Vanguard and ALL open Vanguard funds were available to 403b accounts. I invested directly with Vanguard, so I benefited from Vanguard's low expense ratio. The only drawback was 403b accounts could not qualify for admiral status.

Another option for teachers in other states may be found in their state retirement system. There are other investment options in the CalSTRS 403b plan, but here is the list of Vanguard fund offerings in California's State Retirement System:
VANGUARD TOTAL BOND MARKET
VANGUARD SHORT-TERM BOND INDEX
VANGUARD INFLATION PROTECTED
VANGUARD TOTAL STOCK MARKET
VANGUARD INSTITUTIONAL INDEX
VANGUARD SMALL CAP INDEX
VANGUARD MID CAP INDEX
VANGUARD EMERGING MARKETS
VANGUARD DEVELOPED MARKETS
VANGUARD REIT INDEX

Consider bypassing your district 403b offerings and try checking with your state retirement system. They may have better offerings than your district makes available.


Hi Teacher,
Happy your district and union work together. And I agree that CalSTRS Pension2 is a great 403(b) plan, and a great option for California teachers.

I have worked as a teacher in California and I had a very different experience. At LAUSD the union says nothing about the 403(b), and districts benefit administrations tell even less. We have an Award Winning 457(b) plan (https://www.bogleheads.org/forum/viewtopic.php?t=143120)and I doubt if many of the employees know about it. So when you say that your union and district work together, I am not only surprised, but shocked. I have had NO experience with anybody working together, the unions have their agenda, the districts had theirs and teachers have no protections against the annuity sharks.

Thanks for your post. You said one thing that is spot on: You are extremely lucky. I only wish that the rest of California were in the same place as your district and union.

Steve
Retired LAUSD teacher
Last edited by sschullo on Mon Jan 30, 2017 11:39 am, edited 1 time in total.
Public School K-12 Educators: "Ask NOT what your annuity sales person can do for you, ask what you can do to be a Do-It-Yourselfer (DIY)."

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teacher
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Re: Great 403b for teachers?

Post by teacher » Sun Jan 29, 2017 11:22 pm

Even our principal was out to protect teachers. She would not allow annuity sales people in the teacher's room to put their brochures in teacher's boxes or meet with them there at lunch. Our union and district had a consensus model for negotiations and with some exceptions, we were able to set common goals. This was only possible as long as the superintendent with the consensus mindset was on board, and when he left, things changed, but the 403b options were already in place and remain so.

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Re: Great 403b for teachers?

Post by sschullo » Mon Jan 30, 2017 11:52 am

teacher wrote:Even our principal was out to protect teachers. She would not allow annuity sales people in the teacher's room to put their brochures in teacher's boxes or meet with them there at lunch. Our union and district had a consensus model for negotiations and with some exceptions, we were able to set common goals. This was only possible as long as the superintendent with the consensus mindset was on board, and when he left, things changed, but the 403b options were already in place and remain so.


LAUSD had two benefits administrators who did understand about the annuity scam that is everywhere in the public K-12 space, and created the 457b plan ten years ago to get around our hideous CA. state insurance code that protects the annuity industry. One retired and the other moved to another post. We are back to what it used to be for five decades. Our union and the district do not discuss these plans (403b or 457b plan) publically. Our district has a policy that no 403b sales are not allowed on campuses, but the district does not enforce it.

Just wanted to point out that outside your district, the volunteer retirement planning world is 180 degrees different from your district. It just depends on how lucky you are to have two or three administrators who understand the problem. Those enlightened administrators are so few, they are almost non-existent in our profession. The scam continues on and on, even with over 30 newspaper accounts since 1997, and the latest was that huge NY Times entire series on the 403b with public k-12 and not a dent in reform.

But we continue...
Last edited by sschullo on Mon Jan 30, 2017 11:56 am, edited 2 times in total.
Public School K-12 Educators: "Ask NOT what your annuity sales person can do for you, ask what you can do to be a Do-It-Yourselfer (DIY)."

sschullo
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Re: Great 403b for teachers?

Post by sschullo » Mon Jan 30, 2017 11:53 am

duplication deleted.
Public School K-12 Educators: "Ask NOT what your annuity sales person can do for you, ask what you can do to be a Do-It-Yourselfer (DIY)."

corysold
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Re: Great 403b for teachers?

Post by corysold » Mon Jan 30, 2017 12:33 pm

Tracker09 wrote:My wife tried to sign up for this. Security Benefit is listed as one of her 403b providers. However, both Security Benefit and her school said this plan isn't on of the ones offered to her school. There were no listed plans in the documentation that the school had sent her, just the names of the eligible companies providing 403b. Does she have options to keep pursuing this?


That same thing happened when we tried to sign my wife up. The SB rep knew nothing of it and the HR contact said the same.

However, when I went online, signed up directly and submitted the paperwork to the district, everything worked just fine.

The key is, it is entirely self directed. You sign up yourself, select your own investments, etc.

Tracker09
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Re: Great 403b for teachers?

Post by Tracker09 » Mon Jan 30, 2017 12:40 pm

corysold wrote:
Tracker09 wrote:My wife tried to sign up for this. Security Benefit is listed as one of her 403b providers. However, both Security Benefit and her school said this plan isn't on of the ones offered to her school. There were no listed plans in the documentation that the school had sent her, just the names of the eligible companies providing 403b. Does she have options to keep pursuing this?


That same thing happened when we tried to sign my wife up. The SB rep knew nothing of it and the HR contact said the same.

However, when I went online, signed up directly and submitted the paperwork to the district, everything worked just fine.

The key is, it is entirely self directed. You sign up yourself, select your own investments, etc.



She tried to do it that way because Security Benefit didn't process her online application. They wanted to hear something from the school. Maybe she should try that over again to get it in the hands of someone else.

krow36
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Re: Great 403b for teachers?

Post by krow36 » Mon Jan 30, 2017 3:26 pm

Tracker09 wrote:She tried to do it that way because Security Benefit didn't process her online application. They wanted to hear something from the school. Maybe she should try that over again to get it in the hands of someone else.

What did Security Benefit want to hear from the school? Did you/she fill out the Account Application, sections 3 and 6 completely with all the school district's information? Are you using the school district's HR or business office, not the school where she teaches?

BashDash
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Re: Great 403b for teachers?

Post by BashDash » Mon Jan 30, 2017 5:28 pm

I recently came across this thread on security invest 403b direct invest and wanted to ask current users of the security benefit direct invest:

Have you been happy thus far? Is it easy to rebalance your allocation? How is their web interface? I just went thru getting out of Voya to Aspire which has a .13 asset fee plus 40$ per year. That is way better than Voya but security benefit direct seems even better. Somehow i overlooked this thread and didnt even realize i had access to this direct invest of security benefit. All i really want is a 2 fund simple portfolio. Would the intermediate bond fund be a good substitute for total bond market that I currently have in my allocation? I'm happy to switch again if it is worth it for the low fee and all else checks out. I love searching for the lowest cost to help balance out the years of high fees in Voya! All I want to do is 80% vtsax and 20% of a bond fund and I'm hoping the one available would be a good one.

I guess the advantage of aspire would be access to anything not just the funds that security benefit direct invest has access too.

Thanks for any input!

krow36
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Re: Great 403b for teachers?

Post by krow36 » Mon Jan 30, 2017 10:09 pm

Yes the Security Benefit NEA Direct invest has lower fees than Aspire. If you read through the thread, you’ll notice that SB and NEA have a lot of baggage. In their other offerings they both are ripping off the K-12 403b innocents. I guess I feel that Aspire’s 0.13%** is a low enough add-on fee, especially when the account balance isn’t large. Your DW’s 75k account times 0.0013 amounts to an extra $97 per year and maybe that is starting to get serious? I respect Aspire as a well-run company that is not trying to rip off their customers. Aspire is proud of their self-directed plan while SB seems to be trying to hide their Direct Invest plan. Not surprisingly the SB reps don’t mention Direct Invest to the innocents because the SB rep’s income depends on selling annuity-based 403b plans.

From what posters have reported, it seems that Aspire’s telephone service is much superior to that of SB. That could change I guess. There doesn’t seem to be any problem with the Direct Invest 403b as far as hidden fees, but SB’s other offerings are awful! The first of the several NY Times articles on the K-12 403b world describes Security Benefit’s awful annuity-based 403b plan. I think you’ve mentioned that one of these articles got you started on the road to a lower-cost 403b provider. https://www.nytimes.com/2016/10/23/your ... share&_r=0

Of course Direct Invest is a lifesaver for those in districts with SB on the provider list and with no low cost MF providor or with only insurance companies pushing annuities. If you do switch from Aspire to the SB Direct Invest, you might consider making an effort of helping your colleagues in high-cost plans to move to either Aspire or SB Direct Invest. I think you’ve already expressed interest in this? Wouldn’t it be great if every teacher in your school was using only Aspire or SB DI?

**You’ve mentioned several times in your other threads that the Aspire fee is 0.13% added to the fund’s ER. Have you been told that this fee has been reduced to 0.13% from 0.15% and so the website is not up to date? Here’s what the Aspire website says:
What are the fees to participants?
Aspire charges a $40 account fee and a custody fee of 15 basis points (0.15%) of the account value annually for its recordkeeping services. These fees are assessed against the participant's accounts monthly. In most cases, up to $20 of the account fee is used to offset some or all of the TPA's fees. https://www.aspireonline.com/resources/faqs/-in-category/categories/plan-types/403(b)-k-12

BashDash
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Re: Great 403b for teachers?

Post by BashDash » Tue Jan 31, 2017 5:33 am

I'm not quite sure why I keep making that typo regarding the aspire fee. I feel no sense of urgency to move mine from Aspire. I guess I will have to decide whether to move DW there. From last experience, I always feel paranoia that I may be missing some hidden fees.

Teacher88
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Re: Great 403b for teachers?

Post by Teacher88 » Tue Feb 14, 2017 10:27 am

I started investing with Security Benefits DirectInvest plan a year ago. Other than the actual transfer of funds to them, I have had zero issues so far. The website is great, very user friendly. I cannot see where they are charging me any fees other than the ones clearly explained. If your only options are garbage like in my district I would not hesitate to invest with the NEA plan. Not sure why but the actual log in page to access your account is at www.securityretirement.com It took me a while to figure that out.

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Re: Great 403b for teachers?

Post by sschullo » Tue Feb 14, 2017 11:39 am

Teacher88 wrote:I started investing with Security Benefits DirectInvest plan a year ago. Other than the actual transfer of funds to them, I have had zero issues so far. The website is great, very user friendly. I cannot see where they are charging me any fees other than the ones clearly explained. If your only options are garbage like in my district I would not hesitate to invest with the NEA plan. Not sure why but the actual log in page to access your account is at http://www.securityretirement.com It took me a while to figure that out.


Teacher88,
Thanks for the update. Some of us were waiting for a report like yours about the self-direct NEA plan. NEA has contracted to Security Benefit Corporation for record keeping, compliance, and enrollment and sales and of their high cost 403(b)s and gives NEA a reported $2-3 million each year. NEA does nothing except gives this corporation access and recomendation to its 3.5 million members!

The self-directed plan with no commissions, no excessive advisory costs and no annuity products, you reported on, is a result of a lawsuit against the NEA about a decade ago. But as you experienced nobody in NEA or Security benefit corporation talks about it or provides any guidance, and drags their feet about transferring money from the expensive options to Direct Invest (if I understand your comment about "actual transfer of funds to them").

Thanks again for this report.
Steve
Last edited by sschullo on Tue Feb 14, 2017 4:41 pm, edited 2 times in total.
Public School K-12 Educators: "Ask NOT what your annuity sales person can do for you, ask what you can do to be a Do-It-Yourselfer (DIY)."

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Re: Great 403b for teachers?

Post by BashDash » Tue Feb 14, 2017 11:43 am

Thanks for the direct invest report. DW and I have account applications pending. So far everything is going smoothly. We will begin the rollover ( contract exchange ) once we get account numbers. Easily can create a 2 fund portfolio from here on in. We had been sending all new funds to the NY 457 but the direct invest is literally FREE for us as our balance will be above 50k. That even beats the amazing NY 457 low costs. Thanks again for the report.

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Re: Great 403b for teachers?

Post by krow36 » Tue Feb 14, 2017 3:37 pm

Teacher88 wrote:I started investing with Security Benefits DirectInvest plan a year ago. Other than the actual transfer of funds to them, I have had zero issues so far. The website is great, very user friendly. I cannot see where they are charging me any fees other than the ones clearly explained. If your only options are garbage like in my district I would not hesitate to invest with the NEA plan. Not sure why but the actual log in page to access your account is at http://www.securityretirement.com It took me a while to figure that out.

Teacher88, thanks very much for the report on your year's experience with Security Benefits DirectInvest plan. I wish there was a way to get the word out to the many K-12 employees with a provider list with no low-cost 403b options and with SB on that list.

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Re: Great 403b for teachers?

Post by corysold » Tue Feb 14, 2017 4:32 pm

Thanks for the update Teacher88. I've been meaning to post my experience but just kept forgetting.

But I concur with what you said. No hassles so far. No hidden fees. Very nice website. Easy to change/adjust/rebalance funds.

No complaints.

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Re: Great 403b for teachers?

Post by Tracker09 » Sat Feb 18, 2017 9:36 am

sschullo wrote:
Teacher88 wrote:I started investing with Security Benefits DirectInvest plan a year ago. Other than the actual transfer of funds to them, I have had zero issues so far. The website is great, very user friendly. I cannot see where they are charging me any fees other than the ones clearly explained. If your only options are garbage like in my district I would not hesitate to invest with the NEA plan. Not sure why but the actual log in page to access your account is at http://www.securityretirement.com It took me a while to figure that out.


Teacher88,
Thanks for the update. Some of us were waiting for a report like yours about the self-direct NEA plan. NEA has contracted to Security Benefit Corporation for record keeping, compliance, and enrollment and sales and of their high cost 403(b)s and gives NEA a reported $2-3 million each year. NEA does nothing except gives this corporation access and recomendation to its 3.5 million members!

The self-directed plan with no commissions, no excessive advisory costs and no annuity products, you reported on, is a result of a lawsuit against the NEA about a decade ago. But as you experienced nobody in NEA or Security benefit corporation talks about it or provides any guidance, and drags their feet about transferring money from the expensive options to Direct Invest (if I understand your comment about "actual transfer of funds to them").

Thanks again for this report.
Steve


How did you get the loginid for that site? My wife applied and now appears to have been approved but she's received nothing about the account yet.

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Re: Great 403b for teachers?

Post by BashDash » Thu Mar 16, 2017 7:55 am

Just wanted to update this thread: Just finished my transfer of funds to Security Benefit Direct Invest . Relatively Easy. Couple of phone calls to check on the plan number. Got my login set up and I am all set for a two fund Vanguard Total Stock and Total Intermediate low cost portfolio. The set up is really great on the website and I also just set up a semi-annual rebalance as well to 65/35 which works for me. Thanks for all the updates here and on 403bwise.com. Other than the expense ratios, this is going to be free 403b for me as my account is over 50K.

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Re: Great 403b for teachers?

Post by EdLaFave » Mon Apr 17, 2017 9:08 pm

Just wanted to share my experience:

1. After extensive research and dealing with awful sales reps, I discovered NEA DirectInvest was the best option for my wife.
2. We filled out the paper work to enroll and thought we were done.
3. The Orange County School Board (Fl) contacted my wife and told her "somebody" had to sign off on the paperwork to be official. Sounded weird but I was busy, whatever.
4. OCPS sent my wife an adviser who enrolled her in a high expense ratio and sales load product.
5. She came home and started mentioning "classes of shares" and I immediately had the advisor cancel the enrollment.
6. I called OCPS Retirement Services and they were VERY rude and VERY insistent that NEA DirectInvest wasn't even an option. They continued to insist that I needed to sign up through an advisor. They refused to send me any documentation about what plans were available, much less how they worked. They declined to even look into the matter. When I repeated back the things they were telling me they repeatedly said "sir, those are your words not mine." Eventually I just had to hang up.
7. I spent 15-20 hours on the phone with Security Benefit, OCPS, TXA, and the advisor that they sent to my wife. Nobody knew a damn thing about NEA DirectInvest.
8. Finally I found the owner of a local investment company who knew about NEA DirectInvest. He said only 2 or 3 people in all of Florida had ever enrolled in the program. I asked him to call OCPS Retirement Services and explain it was a real thing.
9. FINALLY, I was allowed to enroll and the first deposit went through recently. As far as I know I haven't seen unexpected fees but it is still very early.

I am in the middle of calling and begging OCPS to reform the system. I am meeting with the CTA union next week to try to lobby for change. I'm planning to go to school board meetings. Apparently the plans are being renegotiated in Jan of 2018.

I am fully committed to raising as much hell as possible to bring about change. Any advice on how to accomplish these goals...

1. The district should provide all the plan information to the employees.
2. The district should explain the tyranny of compounding costs.
3. The district should explain the three fund portfolio.
4. The district should eliminate these awful plans as options at all.
5. The district should provide a free or fee based fiduciary for the employees.
6. The district should crack down on these thieves from coming into the schools and peddling their theft.

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Re: Great 403b for teachers?

Post by sschullo » Mon Apr 17, 2017 9:31 pm

EdLaFave wrote:Just wanted to share my experience:

1. After extensive research and dealing with awful sales reps, I discovered NEA DirectInvest was the best option for my wife.
2. We filled out the paper work to enroll and thought we were done.
3. The Orange County School Board (Fl) contacted my wife and told her "somebody" had to sign off on the paperwork to be official. Sounded weird but I was busy, whatever.
4. OCPS sent my wife an adviser who enrolled her in a high expense ratio and sales load product.
5. She came home and started mentioning "classes of shares" and I immediately had the advisor cancel the enrollment.
6. I called OCPS Retirement Services and they were VERY rude and VERY insistent that NEA DirectInvest wasn't even an option. They continued to insist that I needed to sign up through an advisor. They refused to send me any documentation about what plans were available, much less how they worked. They declined to even look into the matter. When I repeated back the things they were telling me they repeatedly said "sir, those are your words not mine." Eventually I just had to hang up.
7. I spent 15-20 hours on the phone with Security Benefit, OCPS, TXA, and the advisor that they sent to my wife. Nobody knew a damn thing about NEA DirectInvest.
8. Finally I found the owner of a local investment company who knew about NEA DirectInvest. He said only 2 or 3 people in all of Florida had ever enrolled in the program. I asked him to call OCPS Retirement Services and explain it was a real thing.
9. FINALLY, I was allowed to enroll and the first deposit went through recently. As far as I know I haven't seen unexpected fees but it is still very early.

I am in the middle of calling and begging OCPS to reform the system. I am meeting with the CTA union next week to try to lobby for change. I'm planning to go to school board meetings. Apparently the plans are being renegotiated in Jan of 2018.

I am fully committed to raising as much hell as possible to bring about change. Any advice on how to accomplish these goals...

1. The district should provide all the plan information to the employees.
2. The district should explain the tyranny of compounding costs.
3. The district should explain the three fund portfolio.
4. The district should eliminate these awful plans as options at all.
5. The district should provide a free or fee based fiduciary for the employees.
6. The district should crack down on these thieves from coming into the schools and peddling their theft.


Beware of CTA. They now have their own 403(b) product! I doubt if they would be helpful. All I know about CTAs plan is from 403bcompare.com. It appears fine, but I have no other information from anywhere else, and the way it was kept under raps for years makes me very suspicous.

NEA's self directed plan is on the 403bcompare.com website for the first time in California.
You are doing good work, because the 403b system is totally unresponsive to people who will not sign up willy nilly! There is a bunch of us advocates who want to meet online to brainstorm strategies. I would love your participation. I live in S. California too, and worked as a teacher at LAUSD.
Steve
Last edited by sschullo on Wed Apr 19, 2017 6:07 am, edited 1 time in total.
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Re: Great 403b for teachers?

Post by EdLaFave » Mon Apr 17, 2017 9:33 pm

I'm in Orange County, Florida (Orlando). Still I am happy to join together with anybody pushing for change.

How does CTA (the union) have their own plan? What is it called? Going through this process I didn't see it. Maybe it is just out west?

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Re: Great 403b for teachers?

Post by krow36 » Mon Apr 17, 2017 11:38 pm

Steve thought you were in the CA Orange County, as did I at first. The CTA 403b is just for CA teachers. I'll answer your post Tuesday. Congratulations on pushing through the obstacle course!

Check out this recent BashDash thread. viewtopic.php?f=1&t=214475

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Re: Great 403b for teachers?

Post by teacher » Tue Apr 18, 2017 9:01 am

EdLaFave wrote:
How does CTA (the union) have their own plan? What is it called?

Here's the Link for the CTA (California Teachers Association) 403b/457 Plans:
http://ctainvest.org/home/403b-457-Plans.aspx
It is exclusive to California educators, but I would ask around to see if your state teacher's association has similar offerings.

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Re: Great 403b for teachers?

Post by krow36 » Tue Apr 18, 2017 11:05 pm

EdLaFave wrote:I am fully committed to raising as much hell as possible to bring about change. Any advice on how to accomplish these goals...

1. The district should provide all the plan information to the employees.
2. The district should explain the tyranny of compounding costs.
3. The district should explain the three fund portfolio.
4. The district should eliminate these awful plans as options at all.
5. The district should provide a free or fee based fiduciary for the employees.
6. The district should crack down on these thieves from coming into the schools and peddling their theft.

It’s great that you are discussing better plans with the OCPS Retirement Services office, the Board and the union—good luck! Maybe give them a copy of one of the NY Times articles on teachers 403b plans?

I think a meeting to discuss the basics like BashDash did, can also make real progress in helping teachers and administrators understand the long-term effect of the fees they are paying. The Orange County Public Schools’ 403b vendor list does have several low to medium-cost options. Security Benefit NEA Direct Invest, PlanMember Direct, and perhaps TIAA are worth serious consideration. The PlanMember Direct and perhaps TIAA offer a lower cost 457 plan also.

Unfortunately the legal foundation is just not there for the K-12 403b to be as good as they should be. The 403b plans of large universities are usually excellent, but the university takes on a fiduciary roll to insure that excellence. In K-12 school districts, the district’s role is usually very limited and they do not vet the providers or their offerings.

At this time the school districts can’t be legally forced to act in their employees’ best interest. Not enough teachers realize they are being taken advantage of by the financial institutions, and they don’t know enough to demand that a low-cost provider be on the list. And when there is a low-cost provider on the list, teachers don’t know enough to use it! Amazing, it seems to be an education problem! If every teacher who saw the light about fees (and moved from an annuity to an index MF 403b) then committed to helping 2 other teachers see the light, and this continued, some real progress would result.

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Re: Great 403b for teachers?

Post by pondering » Tue Apr 18, 2017 11:08 pm

I would assume a letter is a more effective means of asking an organization to do something it doesn't want to do. Followed up by a phone call, and a certified letter, return receipt requested.
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Re: Great 403b for teachers?

Post by EdLaFave » Wed Apr 19, 2017 12:16 am

I appreciate the responses but they're disheartening because it sounds like you're saying that the institutions are so broken that the only solution is a mass (education) movement for OCPS employees.

I plan to push forward on that front but that is a steep uphill battle relative to convincing a select few (board members and union leadership) to change the system.

Either way I will push forward on both fronts and hope to find some measure of success.

I'm trying to plot out a wise approach but generally speaking I'm going into this completely blind (except for investment knowledge). Any information/wisdom on strategy would be awesome:

1. Is there any advice about the structure of organizations?
2. Is there a select group of decision makers (job titles) I should focus on?
3. Are there job titles I should flat out avoid discussing this with because they're in the pocket of these financial institutions?
4. Is the problem one of ignorance, corruption, and/or laziness?
5. Is there any other information that might help me build a sound strategy?

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Re: Great 403b for teachers?

Post by sschullo » Wed Apr 19, 2017 6:04 am

EdLaFave wrote:I appreciate the responses but they're disheartening because it sounds like you're saying that the institutions are so broken that the only solution is a mass (education) movement for OCPS employees.

I plan to push forward on that front but that is a steep uphill battle relative to convincing a select few (board members and union leadership) to change the system.

Either way I will push forward on both fronts and hope to find some measure of success.

I'm trying to plot out a wise approach but generally speaking I'm going into this completely blind (except for investment knowledge). Any information/wisdom on strategy would be awesome:

1. Is there any advice about the structure of organizations?
2. Is there a select group of decision makers (job titles) I should focus on?
3. Are there job titles I should flat out avoid discussing this with because they're in the pocket of these financial institutions?
4. Is the problem one of ignorance, corruption, and/or laziness?
5. Is there any other information that might help me build a sound strategy?


Hi Ed,
PM me for your contact information. I am trying to organize a group of like-minded folks, usually us k12 educators, to do something about this terrible situation, that has not changed much for over half century. Fixed indexed annuities are still sold to 22-year-old teachers, and that has to stop!
There is a possibility that a powerful consumer organization is going to get involved because they read the New York Times series on the 403b last fall.

In the meantime here are my responses to your questions:
You probably already experienced this but don't be surprised when the decision makers have no idea what you are talking about.
In the public k-12 institutions, to my knowledge, 403(b) is NEVER talked about publically. For 50 years, our profession has allowed the annuity agents to do everything. Since there is no ongoing discussion anywhere with the teachers' unions, school boards or districts benefits departments where teachers could at least get a 2nd opinion, they are totally vulnerable to the very slick sales pitches. Our colleagues have little chance and are easily influenced by the sharks. There is a long history in which I will not bore you for this very strange situation.

1. Talk to the chief of staff of board members. Be prepared and explain what you want very simply. Sometimes one of the staffers has an interest in this area. Its rare but I ran into one years ago. With the unions, you have to start at the committee level and work your way up to the decision makers. In my opinion, working with the unions is a waste of time as the most involved members have either no interest, or the ones that are interested and know what you are talking about, will not help you. As they don't know how to provide objective information for fear of liability. Also be prepared with responses such as "403b is a private matter that the union has no business" or just blank looks.

2. As mentioned above, board members' chief of staff, writing a letter to the union president, writing letters to each board of education CC to chief financial officer and the benefits director.

3. To my knowledge, nobody is "in the pocket." Unions and districts are filled with bureaucrats who only protect themselves and each has their agendas. Corruption requires a type of street smarts and intelligence, Union and district leadership have neither.

4. Ignorance is the biggest problem. Our profession has a pension plan and 70% of public k12 educators feel that they do not need to save. The institution will take care of them. HOWEVER, here is a bigger problem but I cannot prove it, and there is no immediate solution. I think every public school in the country has a very savvy teacher or administrator that is very knowledgeable about investing but remain silent. As krow36 said above, if those savvy folks helped two of their colleagues, the 403b mess would be reformed OVERNIGHT! But they just don't say or do anything. It is one of the biggest mysterious of our profession. I have a story that would back up my opinion on this buts it's too long to write here.

5. Keep at it. Things have improved in the last 25 years that I have been involved. In my school district, Los Angeles Unified, we have an Award Winning 457(b) plan with several Vanguard funds. The problem is with our third party administrators and their lackluster performance. Because our advisory committee demanded transparency of fees and reduced the costs to 25 basis points the current TPA has only 2 reps in the field, and the district does nothing to publicize the Award Winning Plan.

PM me and I can email you a PDF file of a book I wrote about my experiences over the last 25 years and how a small group of us got that Award Winning 457b plan into reality. It was and still is a great victory.

Stay in touch because I would have given up years ago if it wasn't for the comradery. You are not alone! And progress has been made.

Steve
Retired elementary teacher
Public School K-12 Educators: "Ask NOT what your annuity sales person can do for you, ask what you can do to be a Do-It-Yourselfer (DIY)."

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Re: Great 403b for teachers?

Post by teacher » Wed Apr 19, 2017 8:24 am

This is an effort to improve investment options and provide transparency about costs of options in 403b plans at the national level.
"The 403(b) Model Disclosure Form, as it’s called, will set transparency standards and give school employees a comparison of their investment options and the fees that brokers and providers receive. School districts will adopt to use the model and ask for the necessary information from their providers to be simplified on a form for teachers to review."
NEA Offers New Tool to Clear Up 403(b) Plan Confusion
https://www.districtadministration.com/article/nea-offers-new-tool-clear-403b-plan-confusion

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Re: Great 403b for teachers?

Post by EdLaFave » Wed Apr 19, 2017 8:47 am

I applaud the idea of disclosing fees in a transparent way but I dislike NEA's implementation of the 403(b) Model Disclosure Form http://www.ntsa-net.org/LinkClick.aspx? ... portalid=4.

My biggest criticism is that it provides no context for understanding just how significant a 2% fee is. Most people will conclude it is negligible. I think these fees should be visible but FAR more prominently you should see a single percentage: (expected money lost to fees over investment lifetime) / (expected profit over investment lifetime). Of course you'd have to build assumptions into that calculation (investment duration, money invested per year, and expected market return) but seeing that the 2% fee is costing you more than 60% of your profits is far more impactful and accurate.

My secondary criticism is that a small fraction of people will read 5 pages...it has to be far simpler with the most important information displayed as a single number in the top, in bold, in huge font, highlighted.

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Re: Great 403b for teachers?

Post by sschullo » Wed Apr 19, 2017 8:58 am

teacher wrote:This is an effort to improve investment options and provide transparency about costs of options in 403b plans at the national level.
"The 403(b) Model Disclosure Form, as it’s called, will set transparency standards and give school employees a comparison of their investment options and the fees that brokers and providers receive. School districts will adopt to use the model and ask for the necessary information from their providers to be simplified on a form for teachers to review."
NEA Offers New Tool to Clear Up 403(b) Plan Confusion
https://www.districtadministration.com/article/nea-offers-new-tool-clear-403b-plan-confusion


Hi teacher,
The entire model is a ruse as the insurance industry that NEA talked to knew no school district can monitor or enforce all insurance agents to provide this form to teachers. Do you really think an insurance agent is going to disclose all costs!!!???

NEA IS USELESS! Furthermore, they have an outstanding 401k plan with their 700 employees with Vanguard as their plan! But for their members, yeah, I really don't have to tell you.

The same people that talked to NEA made a presentation to our committee at LAUSD. And we rejected their piece of crap immediately because it was a joke. We knew the game. They insulted one of the most knowledge committees in the country.

The presenters were so angry they left the meeting in a huff! Our committee has no power to require the hundreds of 403(b) agents to disclose costs, nor does LAUSD possess the expensive and expansive infrastructure to enforce and monitor any such directive. LAUSD has hundreds of agents roaming our schools and our advisory committee has little idea what they are doing. Agents don't have to disclosure as they are fully protected by our outdated insurance code.

Yeah, they can talk and support all they want about transparency and support that's a good idea, but the school systems and the unions will not enforce it, even if they could.

Steve
Last edited by sschullo on Wed Apr 19, 2017 12:34 pm, edited 2 times in total.
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Re: Great 403b for teachers?

Post by teacher » Wed Apr 19, 2017 9:02 am

I couldn't agree more, EdLaPave. So much needs to be improved, including at the national level. It may help to develop a curriculum to be shared in lunch rooms across the nation. It could include factoids like this: One percent of the current portfolio in fees equates to 10% in ten years, or 2% equates to 20% in ten years. Or, in twenty years, 1% in fees translates to 20% of the current portfolio.Those facts really motivated me to become an independent investor.

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Re: Great 403b for teachers?

Post by KESP » Wed Apr 19, 2017 9:07 am

If the NEA really wanted to help us, they would not promote a company that sells their membership variable annuity products. Instead, they would have Vanguard or Fidelity as the company on their website selling their products. I believe this would make it easier to have those options added to our choices in individual districts. Short of that, I'm not impressed by what they are doing.

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Re: Great 403b for teachers?

Post by sschullo » Wed Apr 19, 2017 9:12 am

KESP wrote:If the NEA really wanted to help us, they would not promote a company that sells their membership variable annuity products. Instead, they would have Vanguard or Fidelity as the company on their website selling their products. I believe this would make it easier to have those options added to our choices in individual districts. Short of that, I'm not impressed by what they are doing.


+1
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Re: Great 403b for teachers?

Post by teacher » Wed Apr 19, 2017 12:10 pm

If the NEA really wanted to help us, they would not promote a company that sells their membership variable annuity products. Instead, they would have Vanguard or Fidelity as the company on their website selling their products. I believe this would make it easier to have those options added to our choices in individual districts. Short of that, I'm not impressed by what they are doing
.
I couldn't agree more. Grassroots solutions should be sought state-by-state, district-by-district, instigated by educators.

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