Welcome to the struggle. Some of us public k-12 teachers have written books, and have started websites. You know one of the most common cliche's in our profession when constructing lessons is to not reinvent the wheel. Below is a list of all that has been done, the websites, books, and almost 30 newspaper and online articles all saying the same thing for two decades, that the 403(b) for public k-12 is best described by either William Bernstein or a reporter: "[teachers] find themselves in one of the dankest, foulest-smelling cellars of the financial world--the 403(b) plan."
Newspaper and Online 403(b) Reports (1994-2017)
1. Where to invest a 403b: almost anywhere
by Melynda Dovel Wilcox, Kiplinger’s Personal Finance, Feb. 1, 1994. (Note: This article discussed only transferring from an annuity or high fee vendor into a low-cost mutual fund).
2. Fighting for 403b funds: With Annuities, you’re stuck with extra fees
by Kevin McCormally, Kiplinger’s September1997 (Note: I learned about this great article after Kathy Kristof’s article).
3. Protect Yourself from American’s Flawed Pension Plans.
By Andrea Rock, December 1, 1997, MONEY Magazine.
4. The Fourth R: It’s Retirement, and for many teachers the arithmetic is narrow investment choices is unsatisfactory. If you are persistent you may be able to get your employer to broaden your choices.
Kathy Kristof, Los Angeles Times, January 18, 1998.
5. For Teachers, Object Lessons From the 401(k)
by Richard A. Oppel Jr. New York Times, June 13, 1999.
6. Public sector retirement savings plans often are accompanied by hefty fees that reduce returns
by Helen Huntley. St. Petersburg Times Online Business, September 26, 1999.
7. 1st Step in Teacher’s Lesson Plan: Crash Course in Investing
by Suzy Hagstrom. Los Angeles Times Makeover special, December 21st, 1999.
8. The Fleecing of 403b participants
by CBSMarketWatch.com May 30, 2000.
9. Feds issue annuity warning
by Marcy Gordon, Associated Press, published in the Daily News, June 6, 2000.
10. Special Report: Shark Attack! Investors in 403b plans, beware: You are especially vulnerable to predators
by Don Kuehn, American Teacher. American Federation of Teachers (AFT) trade magazine, June 2000 (Details of this extraordinary article in Chapter 6).
11. Insurance Agents Weigh in on Column Taking Industry’s Bad Apples to Task
by Liz Pulliam Weston, Sunday, June 18, 2000 Los Angeles Times. Ms. Weston’s response to a complaining insurance agent was brilliant.
12. Retirement plans come in various flavors—403bs can leave a bad taste
by Paul J. Lim. US News and World Report (July 10, 2000).
13. Retirement Savings Plan Costs Teachers, Lawsuit say
by Mary Doclar and Mike Lee. Fort Worth Star-Telegram, Sunday, September 17, 2000.
14. Savings Shock
by Michele M. Capots. Education Week, Vol. 12, Issue 7, Page 9, April 2001.
15. Changes to 403b plans help teachers save
by Sandra Block. Your Money, January, 2002 USA Today.
16. Teachers' 403b plan nonvirtues 'extolled'
, San Diego Union, 2004 by Lynn O'Shaughnessy.
17. Costly Lesson: Some of the biggest names in insurance peddle lousy retirement plans with high fees and low returns. One and a half million teachers blithely signed up for these dogs--often with their unions' blessing.
Forbes Magazine by Neil Weinberg, 2005.
18. Teachers get harsh lesson on investing, Saving for retirement harder with 403b law,
San Diego Union, by David Washburn (2005).
19. As Teachers Sock Money Into 403bs, Few Defenses Exist
, The WSJ, Aug. 25, 2005 by Tom Lauricella.
20. Teachers investment plans flunk, 403b plans could hardly be worse: fees are outrageous, there’s no match and there’s no oversight,
MSN Money, 2005, by Timothy Middleton.
21. Fleecing 403b plan participants
, W. Scott Simon. This is an excellent eight part series of articles tearing the 403b system apart, from total lack of fiduciary responsibility, high costs and the insanity of nobody in the educational establishment looking after the teachers' best interest. Mr. Simon is a Morningstar Advisor contributor.
Fleecing 403b Plan Participants April 5, 2007
Fleecing 403b Plan Participants (Part 2) May 3, 2007
Fleecing 403b Plan Participants (Part 3) June 7, 2007
Fleecing 403b Plan Participants (Part 4) July 5, 2007
Fleecing 403b Plan Participants (Part 5) August2, 2007
Fleecing 403b Plan Participants (Part 6) October 4, 2007
Fleecing 403b Plan Participants (Part 7) November 11, 2007
Fleecing 403b Plan Participants (Part 8) June 5, 2008
22. Prepare for Changes in 403b Plans
, Wall Street Journal, MarketWatch.com, 2007.
23. Fees take huge toll on 403b plans
, Bankrate.com, by Leslie Hggin Geary, 2007.
24. How to avoid 403b pitfalls
, Bankrate.com, by Leslie Haggin Geary, 2007
25. California teachers' supplemental pension plan is flawed, study finds.
Los Angeles Times, by Walter Hamilton, March 2, 2011.
26. Teachers' 403b Plans See Big Changes
, Wall Street Journal, January 4, 2012.
27. Law limits L.A. school district's efforts to simplify 403b plan, Pensions and Investments.
By Robert Steyer, July 9, 2012
28. New York Times. Series of five articles on Public k-12 403(b) plans. October, 2016 (See Below for link to all five articles).
Websites devoted to 403(b) and its many problems.
#1 – Dan Otter is a teacher and LONG time crusader for better 403(b) plans and increased education among teachers about 403(b)’s. Dan has either been through or heard it all when it comes to 403(b) issues. As is the case with most teachers Dan was approached in his classroom early in his career by an insurance salesman pitching an expensive and inappropriate annuity-based retirement plan. Dan has a book and podcast on the topic of 403(b) and manages the forums at his website http://www.403bWise.com
where teachers share and discuss their experiences with 403(b) retirement plans. The media frequently cites him for his experience and knowledge about teacher retirements.
#2 – Andrew Hallam writes at AndrewHallam.com and is a former teacher and long-time student of investing. Andrew amassed over $1 million before the age of 40 and wrote a book about it. He continues to write about investing and retirement at his website. Read my review of his book here: https://www.amazon.com/gp/customer-revi ... 0470830069
#3 – Steve Schullo is the webmaster of this blog http://www.latebloomerwealth.com
, the author of two books and a retired Los Angeles Unified School District teacher who writes at LateBloomerWealth. Steve is frequently cited by media outlets for his experience and wisdom about the 403(b) situation facing teachers (high fees, low returns) and continues to be a staunch supporter of a better system for teacher retirement systems. Books: Late Bloomer Millionaire and Fighting Powerful Interests: Educators Challenge Tax-sheltered Annuities and WIN! (free pdf download from Steve’s blog).
Below are my latest quotes in Kiplinger and the massively comprehensive 403(b) report in the New York Times 5 Part series:
Kiplinger Magazinehttp://www.kiplinger.com/article/retire ... 401-k.html
2. New York Times (October 2016-November 2016): https://www.nytimes.com/2016/10/29/your ... .html?_r=0
Note: The NY Times published a series of five articles on the 403(b) with public k-12 school districts, not just the one I was quoted in the link here. Read them all. Links are below. You and your colleagues will understand and protect yourself from the hideous over-the-top aggressive sales pitch from annuity agents who have state insurance laws protecting them at the expensive of naive' teachers. The series ran from October 21, 2016 through November 5, 2016.
NY Times 403(b) Part 1: https://www.nytimes.com/2016/10/23/your ... pe=article
NY Times 403(b) Part 2: https://www.nytimes.com/2016/10/27/your ... pe=article
NY Times 403(b) Part 3: https://www.nytimes.com/2016/10/29/your ... ities.html
NY Times 403(b) Part 4: https://www.nytimes.com/2016/11/03/your ... plans.html
NY Times 403(b) Part 5: https://www.nytimes.com/2016/11/05/your ... -tips.html
#4 – Ed Mills is known as the “Millionaire Educator” and writes at writes at www.MillionaireEducator.com
. Ed and his wife have amassed nearly $1 million at the time of this post…on a teacher’s salary. Ed and his wife have used an amazing technique for saving and investing as well as taught overseas for a few years to amass enough money that they could put a huge portion of their salaries directly into their retirement accounts. They now regularly transfer school districts to roll their 403(b)’s into IRA’s with Vanguard (who I heartily endorse).
#5 – Tony Isola is a former teacher and Certified Financial Planner (CFP) who writes at http://www.TonyIsola.com
. Tony is a fired up advocate for teachers who is heated about the 403(b) options provided to most teachers. Tony knows both teaching and investing and provides a unique voice from someone working tirelessly on your behalf.
#6 – Dave Grant is also a Certified Financial Planner (CFP) who writes at http://www.FinanceforTeachers.com
Dave is married to a teacher and shares a similar story about the 403(b) market available to teachers. Dave is a speaker and author as well as a trustworthy teacher advocate. Dave is experienced in dealing with a broad range of financial options for teachers and is available to come speak at schools in the Chicagoland area.
#7 – Scott Dauenhauer is another Certified Financial Planner (CFP) who writes his blog Teachers Advocate: http://teachersadvocate.blogspot.com/
He is one of the brains that created the best 403(b) in California under the guidance of the state’s teacher pension system: Pension2. He just released his 2nd book for financial advisors who want to work with k-12 public school teachers: Wild West: Providing Fiduciary Advice to Public School Employees
#8 - Ed LaFave early in his career as a software engineer he was taken advantage several times by financial institutions. Eventually, enough was enough and he learned how to invest on his own. He writes, "I’ve been paying it forward by spreading that knowledge ever since. His wife works for OCPS (Florida teacher) and we went through the nightmare of setting up her 403b in March of 2017. We’re now committed to preventing OCPS employees from being victimized by that same process." https://educatorsfightingforfairness.wo ... b-vendors/
Yet after all of this advocacy, nothing much has changed!!!! Even with the recent DOL changes that require some form of fiduciary standards for 401(K) plans, our 4 million teachers are not protected by the annuity sharks one iota! Unfortunately, another generation of teachers will fall prey to the annuity sharks that are everywhere, in classrooms during recess, cafeterias, union halls, every major school district professional development offering free lunches.
Once again, welcome to the struggle. I will pm you a message about the latest development that may come to fruition.
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)."