Employer plan at Ed Jones

Have a question about your personal investments? No matter how simple or complex, you can ask it here.
krow36
Posts: 2331
Joined: Fri Jan 30, 2015 6:05 pm
Location: WA

Re: Employer plan at Ed Jones

Post by krow36 »

retiredjg wrote: Sun Sep 06, 2020 7:45 am https://www.fidelity.com/bin-public/060 ... landoc.pdf
  • "This Prototype Plan may only be used in con- junction with an Internal Revenue Service (“IRS”) Model SIMPLE-IRA, Form 5305-S or Form 5305-SA or an IRS approved Prototype SIMPLE-IRA."
If I'm understanding these two forms correctly, the one you found is the thing that can only be used in conjunction with the IRS Model Simple....and so on. I don't know why they would do that.
I don't see where you are seeing a problem? Doesn't the statement mean that Fidelity's Prototype SIMPLE IRA Plan can be used with either an IRA Model SIMPLE IRA (that is a Form 5304 or a Form 5305) or a Form 5305-S or an a Form 5305-SA . . .? This would seem to confirm that there's no problem with Fidelity providing their Prototype SIMPLE plan to an employer who is using a model Form 5304 plan.
retiredjg
Posts: 41663
Joined: Thu Jan 10, 2008 12:56 pm

Re: Employer plan at Ed Jones

Post by retiredjg »

krow36 wrote: Sun Sep 06, 2020 12:53 pm
retiredjg wrote: Sun Sep 06, 2020 7:45 am https://www.fidelity.com/bin-public/060 ... landoc.pdf
  • "This Prototype Plan may only be used in con- junction with an Internal Revenue Service (“IRS”) Model SIMPLE-IRA, Form 5305-S or Form 5305-SA or an IRS approved Prototype SIMPLE-IRA."
If I'm understanding these two forms correctly, the one you found is the thing that can only be used in conjunction with the IRS Model Simple....and so on. I don't know why they would do that.
I don't see where you are seeing a problem? Doesn't the statement mean that Fidelity's Prototype SIMPLE IRA Plan can be used with either an IRA Model SIMPLE IRA (that is a Form 5304 or a Form 5305) or a Form 5305-S or an a Form 5305-SA . . .? This would seem to confirm that there's no problem with Fidelity providing their Prototype SIMPLE plan to an employer who is using a model Form 5304 plan.
Oh. :shock:

That is not how I read it, but I see that is definitely a possible way to read it and probably a better reading than mine.

But if your reading is correct, why does Fidelity think they can only use 5305?????

Mm8719, you should definitely get the Fido folks to explain this to you. This might be your way in.
krow36
Posts: 2331
Joined: Fri Jan 30, 2015 6:05 pm
Location: WA

Re: Employer plan at Ed Jones

Post by krow36 »

retiredjg wrote: Sun Sep 06, 2020 2:37 pm But if your reading is correct, why does Fidelity think they can only use 5305?????
A few years ago, Vanguard told me that they chose not to offer a Form 5304 SIMPLE. That's still their preference because that's what they include in their Employer's Kit. I think Fidelity chooses to offer only the Form 5305, but could offer the Form 5304 as well. And the Form 5304 makes for more work for the employer. Maybe they both don't care much for making it easy for the employee to go to another FI? Maybe EJ thinks that with the Form 5304 they can hide or deflect the employee's right to go to another FI? Who knows??
retiredjg wrote: Sun Sep 06, 2020 2:37 pm Mm8719, you should definitely get the Fido folks to explain this to you. This might be your way in.
I agree completely! The Fido SIMPLE specialists should also explain it to the EJ rep! :)
Topic Author
Mm8719
Posts: 31
Joined: Sat Jan 12, 2019 1:21 pm

Re: Employer plan at Ed Jones

Post by Mm8719 »

krow36 wrote: Sun Sep 06, 2020 5:40 pm
retiredjg wrote: Sun Sep 06, 2020 2:37 pm But if your reading is correct, why does Fidelity think they can only use 5305?????
A few years ago, Vanguard told me that they chose not to offer a Form 5304 SIMPLE. That's still their preference because that's what they include in their Employer's Kit. I think Fidelity chooses to offer only the Form 5305, but could offer the Form 5304 as well. And the Form 5304 makes for more work for the employer. Maybe they both don't care much for making it easy for the employee to go to another FI? Maybe EJ thinks that with the Form 5304 they can hide or deflect the employee's right to go to another FI? Who knows??
retiredjg wrote: Sun Sep 06, 2020 2:37 pm Mm8719, you should definitely get the Fido folks to explain this to you. This might be your way in.
I agree completely! The Fido SIMPLE specialists should also explain it to the EJ rep! :)
Update: apparently my boss took your advice. He asked that the Ed Jones rep call Fidelity directly and get things figured out...

Well, it turns out THIS time the retirement specialist at Fidelity that was available was of the opinion that we could NOT do what we were trying to accomplish. In other words he agreed with the Ed Jones rep that having the existing 5304 and the 5305 with Fidelity could not co exist...

I talked with the local Fidelity rep today and he said he thought about calling the retirement dept again to double check this and see if that is correct ...I told him to not worry about it. Obviously now right wrong or indifferent, since the latest specialist said no, that is what was relayed to my boss and is going to be considered the right answer. I’m still not convinced but also don’t want to keep trying to switch to a company that continues to give inconsistent answers.

SOooo...now I am going to try and switch to my second and third choices, Schwab or Vanguard..Spoke with a very nice and knowledgeable rep at Schwab tonight and she sent a very detailed email explaining it was possible to switch over and outlined the steps. Will be sending that to my boss along with details for Vanguard and hopefully he will be comfortable with one of their adoption agreements.

Still can’t believe this is still being held up and not going as it should. Seems like it should be so simple but it’s turned out to be quite a nightmare ...
Mindbender
Posts: 26
Joined: Sat Feb 01, 2020 7:40 pm

Re: Employer plan at Ed Jones

Post by Mindbender »

Wow this has been quite the adventure to read OP. Keep pushing. :sharebeer
Saving$
Posts: 1974
Joined: Sat Nov 05, 2011 8:33 pm

Re: Employer plan at Ed Jones

Post by Saving$ »

I think your boss is being quite accommodating. Not everything is always optimal, and people have different motivations in their decisions. It sounds like you have cost your boss alot of time and energy on this.

You are contributing 3% to get a 3% match, so max 6% of your income.
Let's be go on the higher side and say your income is $200k/year, so total contribution is $12k.
You are trying to save the 1% EJ fees on $12k/year, or $120/year, which after 5 years may even be $600/year plus earnings.

No, it's not ideal to be at EJ, but the EJ rep has already offered lower cost alternatives. Look for some no load funds through EJ.

Then spend your and your boss time and effort making money for the company so an extra $120-$600/ year can flow back through to you in higher earnings. While you are at it, you might find an opportunity to share some of what you have learned about low cost investing. You might also find out what this EJ plan is costing your employer (note, not what it is costing you or him personally but what it is costing the company) and suggest that there are lower cost alternatives that are 401ks, such as Guideline, or if they want something more sophisticated, Employee Fiduciary.
Mr.BB
Posts: 1350
Joined: Sun May 08, 2016 10:10 am

Re: Employer plan at Ed Jones

Post by Mr.BB »

Make sure you take the time to thank your boss for all his time and patience during this information investigation, and you appreciate the fact that he truly has yours and your coworkers' best interest at heart.
"We are what we repeatedly do. Excellence, then, is not an act, but a habit."
retiredjg
Posts: 41663
Joined: Thu Jan 10, 2008 12:56 pm

Re: Employer plan at Ed Jones

Post by retiredjg »

Mm8719 wrote: Mon Sep 14, 2020 9:24 pm Still can’t believe this is still being held up and not going as it should. Seems like it should be so simple but it’s turned out to be quite a nightmare ...
No doubt this is frustrating, but it appears you will get what you want in the end, even if it is not at Fidelity. Many people do not.

You actually have the best of all possible situations - a boss who is willing to work with you and an EJ rep who is expressing what could be legitimate concerns about the company plan and a support group here as well. Frequently people do not get as far as you have without running into problems with their employer.

Please do keep us updated on your final resolution (which I hope/feel will be pretty soon). What you are doing could help many others down the line.
Topic Author
Mm8719
Posts: 31
Joined: Sat Jan 12, 2019 1:21 pm

Re: Employer plan at Ed Jones

Post by Mm8719 »

Saving$ wrote: Tue Sep 15, 2020 12:14 am I think your boss is being quite accommodating. Not everything is always optimal, and people have different motivations in their decisions. It sounds like you have cost your boss alot of time and energy on this.

You are contributing 3% to get a 3% match, so max 6% of your income.
Let's be go on the higher side and say your income is $200k/year, so total contribution is $12k.
You are trying to save the 1% EJ fees on $12k/year, or $120/year, which after 5 years may even be $600/year plus earnings.

No, it's not ideal to be at EJ, but the EJ rep has already offered lower cost alternatives. Look for some no load funds through EJ.

Then spend your and your boss time and effort making money for the company so an extra $120-$600/ year can flow back through to you in higher earnings. While you are at it, you might find an opportunity to share some of what you have learned about low cost investing. You might also find out what this EJ plan is costing your employer (note, not what it is costing you or him personally but what it is costing the company) and suggest that there are lower cost alternatives that are 401ks, such as Guideline, or if they want something more sophisticated, Employee Fiduciary.
You are correct —my boss has been very accommodating. He’s been great throughout this, but that is the norm for him- he’s the best.

In terms of the rest of your response about EJ. I believe you read the earlier posts but not the updates from this year. They did offer low cost alternatives early last year. At that time I was going to switch but the EJ rep all of a sudden offered me decent mutual funds with no loads or any fees. He sold me on sticking around, and since it was easier for everybody (not having to deal with this) I stuck around. Then if you read further, they lasted until a couple months ago...all of a sudden EJ started charging me 5 percent loads...never even called to tell me I just so happened to check a stmt and see it.

That is what brought all this up and made me decide again to switch. I’m not happy sticking with a company that is going to take 5 percent of my money before it even gets invested!

As far as you’re recommendations to spend the extra energy working and earning more money —thank you for the concern but I assure you this has not affected my productivity at work one bit. My boss and I are having quite a nice quarter :wink:
Topic Author
Mm8719
Posts: 31
Joined: Sat Jan 12, 2019 1:21 pm

Re: Employer plan at Ed Jones

Post by Mm8719 »

Mr.BB wrote: Tue Sep 15, 2020 6:28 am Make sure you take the time to thank your boss for all his time and patience during this information investigation, and you appreciate the fact that he truly has yours and your coworkers' best interest at heart.
You’re right to point this out. Not every boss would be this patient and helpful. He is an absolutely great boss and it’s a great family owned organization. I’m blessed to work there and have made a point to remind him of that many times. With that in mind, I called him before I even pursued any of this and got his blessing. I would not have even entertained this if he wasn’t on board, as it would not have been worth messing up our relationship doing something that he was not in favor of. But when we talked about it he said he was on board and would help out in anyway he could —he has remained true to his word on that. Hopefully things get resolved soon..thanks for your response.
Mr.BB
Posts: 1350
Joined: Sun May 08, 2016 10:10 am

Re: Employer plan at Ed Jones

Post by Mr.BB »

Mm8719 wrote: Tue Sep 15, 2020 6:21 pm
Mr.BB wrote: Tue Sep 15, 2020 6:28 am Make sure you take the time to thank your boss for all his time and patience during this information investigation, and you appreciate the fact that he truly has yours and your coworkers' best interest at heart.
You’re right to point this out. Not every boss would be this patient and helpful. He is an absolutely great boss and it’s a great family owned organization. I’m blessed to work there and have made a point to remind him of that many times. With that in mind, I called him before I even pursued any of this and got his blessing. I would not have even entertained this if he wasn’t on board, as it would not have been worth messing up our relationship doing something that he was not in favor of. But when we talked about it he said he was on board and would help out in anyway he could —he has remained true to his word on that. Hopefully things get resolved soon..thanks for your response.
:sharebeer
"We are what we repeatedly do. Excellence, then, is not an act, but a habit."
Topic Author
Mm8719
Posts: 31
Joined: Sat Jan 12, 2019 1:21 pm

Re: Employer plan at Ed Jones

Post by Mm8719 »

retiredjg wrote: Tue Sep 15, 2020 7:31 am
Mm8719 wrote: Mon Sep 14, 2020 9:24 pm Still can’t believe this is still being held up and not going as it should. Seems like it should be so simple but it’s turned out to be quite a nightmare ...
No doubt this is frustrating, but it appears you will get what you want in the end, even if it is not at Fidelity. Many people do not.

You actually have the best of all possible situations - a boss who is willing to work with you and an EJ rep who is expressing what could be legitimate concerns about the company plan and a support group here as well. Frequently people do not get as far as you have without running into problems with their employer.

Please do keep us updated on your final resolution (which I hope/feel will be pretty soon). What you are doing could help many others down the line.
Thanks for your encouragement !! I will be sure to keep updating
Topic Author
Mm8719
Posts: 31
Joined: Sat Jan 12, 2019 1:21 pm

Re: Employer plan at Ed Jones

Post by Mm8719 »

Ok guys ...I believe we made a nice break through today..

So first I got a reply back from Vanguard advising that they weren’t able to do what we were trying to accomplish. I’m pretty sure this was incorrect, as I had been told previously by a Vanguard rep, and have seen on here that it IS possible. But that got me thinking I should continue looking for another option outside of Fidelity, Schwab, Vanguard..I did a small bit of research on TD Ameritrade and decided to give them a call.

Got a rep with TDA immediately. Didn’t have to be bounced around in search of a knowledgeable person—the first guy I spoke with said he was very familiar with the difference between a 5304 and 5305—that is the first question I’ve been asking ppl and lately once I ask that I get transferred..but this guy knew exactly what I was talking about. He said that TDA does offer a 5304. And since they do...the process to open up an acct and transfer from EJ is very SIMPLE— :D —he said my employer does NOT need to set up an acct with them. They will not even have to fill out paperwork. He said all that is required is for me to fill out the application, authorization to transfer from EJ to fund the acct, and then give my employer the info for where to start sending a check or Direct Deposit to at TDA. He went through the process twice and confirmed multiple times this was all that was needed. Man...almost sounds too good to be true. The rep is going to send me an email later today that summarizes the steps and provides some literature to look through. But if everything is as he says it is...this will be a lot easier of a process and I’m almost certain TDA will be my new DFI.

I’d like to hear yalls take..anyone have experience with TDA? I did a search within the forum and did not find nearly as much as the other 3 I had previously looked into. But the investment options appear to be very similar. The rep also mentioned I would have access to a local rep for no additional cost. They will not manage my asssets but are more so there to bounce ideas off of, provide additional opinions, be another customer service contact etc. sounds good in theory at least..doubt I would take advantage of that often but it’s nice to know the option is there.

Also, obviously they are also merging with Schwab soon. The rep said he was unsure how things would shake out and could not comment much on that, but said they have thousands of ppl who have Simple IRAs there via the 5304 (without their employer having a plan at TDA) so he didn’t think the merger would affect that whatsoever. Schwab seems solid so as long as it wouldn’t affect my eligibility to have my 5304 simple there then I also see that as a pro.

Would love to hear feedback on whether or not TDA seems to be a good choice. I’m 99 percent sure that’s the route I’m taking but wanted to make sure I’m not missing anything here..
retiredjg
Posts: 41663
Joined: Thu Jan 10, 2008 12:56 pm

Re: Employer plan at Ed Jones

Post by retiredjg »

Have no thoughts or comments. Just want to wish you good luck!
Topic Author
Mm8719
Posts: 31
Joined: Sat Jan 12, 2019 1:21 pm

Re: Employer plan at Ed Jones

Post by Mm8719 »

retiredjg wrote: Wed Sep 16, 2020 4:20 pm Have no thoughts or comments. Just want to wish you good luck!
Thank you
krow36
Posts: 2331
Joined: Fri Jan 30, 2015 6:05 pm
Location: WA

Re: Employer plan at Ed Jones

Post by krow36 »

I think TDA will be fine for your SIMPLE IRA account. They have a reputation for providing good service. Congratulations and Best Wishes! I admire you and your employer’s patience and perseverance. :D

I’ve been looking over the EJ SIMPLE IRA Packet that contains information for both the employer and the employee. In the EJ Salary Reduction Agreement Form, to be filled out by the employee, I found the only reference in the whole packet on the employee’s ability to choose a FI that is different than the employer’s choice of a FI. Just those 4 lines.
Financial Institution Information
Account Number: _______________________________________________ 
Financial Institution's Name: _______________________________________________
Branch Address: _______________________________________________ 
Branch City, State, & Zip: ______________________________________
http://pn.b5z.net/i/u/10012410/f/Simple_IRA_Packet.pdf
There is a note (to the employer) on their Form 5304 SIMPLE IRA form that it should not be used unless the employer wants to allow the employee their choice of a FI.

OP, did you notice those 4 lines and realize that using them, you could choose your FI? I wonder if EJ will continue to provide this form before every election period so that you can select your FI? Or will TDA provide their own Salary Reduction Form?
alshayed
Posts: 69
Joined: Fri Aug 19, 2016 1:34 pm

Re: Employer plan at Ed Jones

Post by alshayed »

Mm8719 wrote: Wed Sep 16, 2020 4:11 pm Would love to hear feedback on whether or not TDA seems to be a good choice.
I used TDA for a SIMPLE IRA about 15 years ago in a similar situation where I didn't want to use the same custodian as the rest of the company. Everything worked great for me, the company (employer) just sent a check out every pay period and there wasn't any drama.
Topic Author
Mm8719
Posts: 31
Joined: Sat Jan 12, 2019 1:21 pm

Re: Employer plan at Ed Jones

Post by Mm8719 »

krow36 wrote: Wed Sep 16, 2020 8:58 pm I think TDA will be fine for your SIMPLE IRA account. They have a reputation for providing good service. Congratulations and Best Wishes! I admire you and your employer’s patience and perseverance. :D

I’ve been looking over the EJ SIMPLE IRA Packet that contains information for both the employer and the employee. In the EJ Salary Reduction Agreement Form, to be filled out by the employee, I found the only reference in the whole packet on the employee’s ability to choose a FI that is different than the employer’s choice of a FI. Just those 4 lines.
Financial Institution Information
Account Number: _______________________________________________ 
Financial Institution's Name: _______________________________________________
Branch Address: _______________________________________________ 
Branch City, State, & Zip: ______________________________________
http://pn.b5z.net/i/u/10012410/f/Simple_IRA_Packet.pdf
There is a note (to the employer) on their Form 5304 SIMPLE IRA form that it should not be used unless the employer wants to allow the employee their choice of a FI.

OP, did you notice those 4 lines and realize that using them, you could choose your FI? I wonder if EJ will continue to provide this form before every election period so that you can select your FI? Or will TDA provide their own Salary Reduction Form?
The form does not look familiar, but I assume I filled it out when I first started with the company 3 years ago. But I do know that I have not been required to fill out any additional paperwork since then.

Believe it or not, TDA advised that my employer will not have to fill out any forms at all. I asked about that form in particular, or if any other forms would be needed for them to begin funding the acct, but the TDA rep advised no..he said we will just provide my employer the address or info to begin either mailing a check or direct depositing contributions into my new TDA acct. Seems almost too good to be true, but it actually does line up with how the EJ rep previously said it was supposed to work..
Topic Author
Mm8719
Posts: 31
Joined: Sat Jan 12, 2019 1:21 pm

Re: Employer plan at Ed Jones

Post by Mm8719 »

alshayed wrote: Wed Sep 16, 2020 9:20 pm
Mm8719 wrote: Wed Sep 16, 2020 4:11 pm Would love to hear feedback on whether or not TDA seems to be a good choice.
I used TDA for a SIMPLE IRA about 15 years ago in a similar situation where I didn't want to use the same custodian as the rest of the company. Everything worked great for me, the company (employer) just sent a check out every pay period and there wasn't any drama.
Excellent, glad to hear that. Do you recall if your employer had to fill out any paperwork, or was it as simple to get set up as the TDA rep makes it sound ?
Saving$
Posts: 1974
Joined: Sat Nov 05, 2011 8:33 pm

Re: Employer plan at Ed Jones

Post by Saving$ »

Mm8719 wrote: Tue Sep 15, 2020 6:13 pm
Saving$ wrote: Tue Sep 15, 2020 12:14 am I think your boss is being quite accommodating. Not everything is always optimal, and people have different motivations in their decisions. It sounds like you have cost your boss alot of time and energy on this.

You are contributing 3% to get a 3% match, so max 6% of your income.
Let's be go on the higher side and say your income is $200k/year, so total contribution is $12k.
You are trying to save the 1% EJ fees on $12k/year, or $120/year, which after 5 years may even be $600/year plus earnings.

No, it's not ideal to be at EJ, but the EJ rep has already offered lower cost alternatives. Look for some no load funds through EJ.

Then spend your and your boss time and effort making money for the company so an extra $120-$600/ year can flow back through to you in higher earnings. While you are at it, you might find an opportunity to share some of what you have learned about low cost investing. You might also find out what this EJ plan is costing your employer (note, not what it is costing you or him personally but what it is costing the company) and suggest that there are lower cost alternatives that are 401ks, such as Guideline, or if they want something more sophisticated, Employee Fiduciary.
You are correct —my boss has been very accommodating. He’s been great throughout this, but that is the norm for him- he’s the best.

In terms of the rest of your response about EJ. I believe you read the earlier posts but not the updates from this year. They did offer low cost alternatives early last year. At that time I was going to switch but the EJ rep all of a sudden offered me decent mutual funds with no loads or any fees. He sold me on sticking around, and since it was easier for everybody (not having to deal with this) I stuck around. Then if you read further, they lasted until a couple months ago...all of a sudden EJ started charging me 5 percent loads...never even called to tell me I just so happened to check a stmt and see it.

That is what brought all this up and made me decide again to switch. I’m not happy sticking with a company that is going to take 5 percent of my money before it even gets invested!

As far as you’re recommendations to spend the extra energy working and earning more money —thank you for the concern but I assure you this has not affected my productivity at work one bit. My boss and I are having quite a nice quarter :wink:
Tell EJ you will only buy no load funds. If you buy load funds such as American, I think they start charging you loads if you buy Class A share, and over x amount they say they are required to sell A shares and not allowed to sell you C shares or some such silliness.

Or better yet educate this understanding boss on how the company can get a MUCH better retirement option for EVERYONE, with what sound like would be much less messing around.
alshayed
Posts: 69
Joined: Fri Aug 19, 2016 1:34 pm

Re: Employer plan at Ed Jones

Post by alshayed »

Mm8719 wrote: Wed Sep 16, 2020 9:25 pm Do you recall if your employer had to fill out any paperwork, or was it as simple to get set up as the TDA rep makes it sound?
Other than the IRS Form 5304 I don't recall any other paperwork, it was super easy and straightforward. 10/10 would do again!
Post Reply