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Anyone Heard Of Valuteachers?


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#1 sandra

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Posted 23 October 2007 - 10:40 PM

can reps like this be trusted? They make it all sound good to a teacher like me who doesn't have time to do the research needed to make good choices. What should I do?

#2 geertom

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Posted 23 October 2007 - 11:12 PM

QUOTE(sandra @ Oct 23 2007, 11:40 PM) View Post

can reps like this be trusted? They make it all sound good to a teacher like me who doesn't have time to do the research needed to make good choices. What should I do?

Talk to your employer and ask for help.

The employer should have available the annuity contract forms for you to review. The employer should also have available the same materials on all of the investment vehicles being offered, for you to review. From a legal perspective, the employer is a party to all of the contracts, so they sure ought to have copies.

Whether a lay person is competent to do so is a good question-probably not, although it requires mostly experience. There are two ways to address that problem.

The first is to hire an independent professional, who would have to have lots of experience and the ability to analyze contracts and investments. Sch a person would be correspondingly expensive.

The second, which is my personal preference and appears not to have been noticed, is to allow all investment providers to comment on their own investments AND on the others. With some modest mediation skills, the employer should be able to develop a product comparison that everybody agrees on (or at least one that nobody argues with) and that is low on polemics; raw sales materials from all should be included. Since everybody can take pots######s at everybody else, this will make visible any hitches and will probably get full cost data out, too.

On plan costs, there is a consensus form of disclosure available from the ACLI, the ICI and the SIA, that can be the basic structure on that issue. It is reasonably straightforward to make up a spreadsheet from that form to allow participant modeling (as I can attest, having already done so). Even if you bring in an outsider to do the process, the costs will be dramatically less because the investment providers will do most of the work.

The first is very expensive and the second is novel, so getting either done is problematic. But I do think that as we move forward employers will be pushed towards taking more responsibility for eliminating bad choices or pointing them out in some neutral, non-arbitrary (i.e., not "I like TIAA-CREF. or VALIC, or Vanguard" or "I hate TIAA-CREF, or VALIC or Vanguard") fashion. Where standard practice will land is hard to tell.

Tom Geer
<b>Thomas L. Geer, J.D., LL.M.
National Retirement Plan Solutions</b>
Email: geertom145@gmail.com
Phone 330-545-5215

#3 intruder

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Posted 23 October 2007 - 11:29 PM

[quote name='geertom' date='Oct 24 2007, 12:12 AM' post='16503']
[quote name='sandra' post='16501' date='Oct 23 2007, 11:40 PM']
can reps like this be trusted? They make it all sound good to a teacher like me who doesn't have time to do the research needed to make good choices. What should I do?
[/quote
The second, which is my personal preference and appears not to have been noticed, is to allow all investment providers to comment on their own investments AND on the others. With some modest mediation skills, the employer should be able to develop a product comparison that everybody agrees on (or at least one that nobody argues with) and that is low on polemics; raw sales materials from all should be included. Since everybody can take pots######s at everybody else, this will make visible any hitches and will probably get full cost data out, too.

On plan costs, there is a consensus form of disclosure available from the ACLI, the ICI and the SIA, that can be the basic structure on that issue. It is reasonably straightforward to make up a spreadsheet from that form to allow participant modeling (as I can attest, having already done so). Even if you bring in an outsider to do the process, the costs will be dramatically less because the investment providers will do most of the work.

The first is very expensive and the second is novel, so getting either done is problematic. But I do think that as we move forward employers will be pushed towards taking more responsibility for eliminating bad choices or pointing them out in some neutral, non-arbitrary (i.e., not "I like TIAA-CREF. or VALIC, or Vanguard" or "I hate TIAA-CREF, or VALIC or Vanguard") fashion. Where standard practice will land is hard to tell.

Tom Geer
[/quote]

Tom: Since you are an attorney with an LLM in tax law who has extensive experience in advising employers could you please inform the audience of the liability risk to the employer in developing a "product comparison" if it is not 100% accurate. Also how much would an employer have to pay to retain an advisor such as yourself to prepare/review such a comparison? Do you recommend that public employer use public funds to pay for such a comparison if it will result in increased property taxes or reduce expenditures for school activities/ teacher salaries?

#4 Scottyd

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Posted 23 October 2007 - 11:52 PM

Intruder,

You put the hit the nail right on the head - why should a school district pay for any benefit if its going to cost the taxpayer's something?

Why should teachers get days off, healthcare, or defined benefit plan - it all costs the taxpayers money - what a waste?

How can this waste be justified?

Should a school district waste money in an attempt to attract and retain quality people by offering better benefits than the next school district? Of course not, they might cost their taxpayers a few extra pennies - of course they'll also get teachers who aren't worth anything.

I hope you can see the absurdity of your question. Offering a good, quality retirement plan and spending a reasonable amount on is pure economics - it attracts and retains the best, along with the other benefits. I can't imagine a taxpayer that would be hurt by a community that has the best teachers.

ScottyD

#5 geertom

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Posted 24 October 2007 - 12:45 AM

QUOTE(Scottyd @ Oct 24 2007, 12:52 AM) View Post

Intruder,

You put the hit the nail right on the head - why should a school district pay for any benefit if its going to cost the taxpayer's something?

Why should teachers get days off, healthcare, or defined benefit plan - it all costs the taxpayers money - what a waste?

How can this waste be justified?

Should a school district waste money in an attempt to attract and retain quality people by offering better benefits than the next school district? Of course not, they might cost their taxpayers a few extra pennies - of course they'll also get teachers who aren't worth anything.

I hope you can see the absurdity of your question. Offering a good, quality retirement plan and spending a reasonable amount on is pure economics - it attracts and retains the best, along with the other benefits. I can't imagine a taxpayer that would be hurt by a community that has the best teachers.

ScottyD

Thank you, ScottyD. I agree fully with your comments.

Intruder, your general level of hostility/aggression is undercutting your credibility. You may want to tone it down and back your comments with analysis. People don't come here to watch bear-baiting or ultimate fighting, they come because they have real-world problems that can adversely affect the rest of their lives or because they want to help such people. In my view. basic human respect requires trying to help them. If you don't calm down or increase your constructive comments, people will either ignore you or conclude that you are a useless annoyance, which would be too bad because I think you are smart enough to make a useful contribution.

I do think the liability issue is well worth thinking about. I am interested in any pots######s you care to take at my option two. It may be a silly, it may run out to be a stroke of genius or it may just be ignored. Meaningful pots######s will help me figure out that it's stupid or help me buff and polish it. FYI, I have successfully used the approach in analogous situations, with startlingly good results-competition definitely brings out the worst in the competitors.

As to liability, you have to tell people what the comparison is and isn't and how it was prepared so they can assess its quality and relevance. They also must be told of their ability to retain independent advice, and perhaps to have their adviser's comments reflected in an update. I think if that is properly done the liability risk is less than hiring somebody whose is friends with a school board member to cut costs. And it will certainly cost less than hiring a big consulting firm with no industry ties (if there is such a thing any more). Ultimately, what is the appropriate cost-benefit ratio is in the eye of the beholder

I agree that this sort of thing costs money that people would rather not pay. Hey, I'd rather not be paying for my car. However, some people are going to want the issue addressed, as does sandra. The question is how to get help, and I tossed out some options. Other options are certainly available (getting an M.B.A., subscribing to WSJ and Investors Business Daily, watching Bloomberg 24 hours a day, hiring your own independent adviser, pooling resources of several employees to hire somebody) but that doesn't mean that they are the only options, and certainly not that they are the best in the circumstances in terms of costs and benefits.

I am looking forward to any thoughts or suggestions you may have that address sandra's concerns.

Tom Geer
<b>Thomas L. Geer, J.D., LL.M.
National Retirement Plan Solutions</b>
Email: geertom145@gmail.com
Phone 330-545-5215

#6 Guest_Skeptical_*

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Posted 24 October 2007 - 10:20 AM

QUOTE(sandra @ Oct 23 2007, 10:40 PM) View Post

can reps like this be trusted? They make it all sound good to a teacher like me who doesn't have time to do the research needed to make good choices. What should I do?

Sandra,

This is a case where you should take your time before making a decision. The industry does a brilliant job of perpetuating the myth that an individual investor has to perform time consuming research and devote hours to reading the latest economic news. Just baloney.

Regarding your question about Valuteachers:

They are licensed as an Insurance Agency in the state of Georgia and distribute annuity contracts for Life Insurance Company of the Southwest (LSW) which is owned by National Life. This means that their "reps" are insurance agents who are compensated for the SALE of INSURANCE. They are a distributor of annuities plain and simple. But their web site goes to great length to give potential customers a different impression:

"ValuTeachers is an educational team of Teacher Retirement Specialists".

This is pure marketing. They operate under an Insurance Agency & Agent license. There is no such thing as a licensed Retirement Specialist. ANYONE can use this term.

What to do? I would suggest getting some basic financial -retirement-investment education before you start. I know many would say that this approach will encourage you to procrastinate and they're right. But unlike your private sector, large company peers who have a low-cost 401(k), your choices are likely to be very, very expensive.

Where to go? I would start with the no-load mutual fund family web sites. (Vanguard.com, Fidelity.com, Troweprice.com) Look for the planning and education tabs.

Now if you meet with the Valuteachers agent and can collect some info, like what product they are recommending (RetireMax Variable Annuity or perhaps an Equity Indexed product), I'd be happy to pull back the curtain for you. DO NOT be pressured to sign up. And take really good notes. I've found that financial sales folks are pretty careful about what they say when they watch you write it down. This is business, and that rep is there to MAKE A SALE not to make sure your retirement is funded. Remember that and you'll do fine.

Hope that helps and keep us posted.

Jim




#7 Guest_Sierra_*

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Posted 24 October 2007 - 11:04 AM

Would this fly? During the first 6 months of employement if an employee opts into a salary reduction 403b he/she will be compelled to invest solely in a MM fund. During the 6 months the participant will be compelled to attend an investment planning seminar paid for by the employer. Only after attending this seminar will an employee be permitted to place his/her money at risk.

Joel

#8 intruder

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Posted 24 October 2007 - 11:52 AM

QUOTE(Scottyd @ Oct 24 2007, 12:52 AM) View Post

Intruder,

You put the hit the nail right on the head - why should a school district pay for any benefit if its going to cost the taxpayer's something?

Why should teachers get days off, healthcare, or defined benefit plan - it all costs the taxpayers money - what a waste?

How can this waste be justified?

Should a school district waste money in an attempt to attract and retain quality people by offering better benefits than the next school district? Of course not, they might cost their taxpayers a few extra pennies - of course they'll also get teachers who aren't worth anything.

I hope you can see the absurdity of your question. Offering a good, quality retirement plan and spending a reasonable amount on is pure economics - it attracts and retains the best, along with the other benefits. I can't imagine a taxpayer that would be hurt by a community that has the best teachers.

ScottyD


I dont know where you live but in the Metropolitan NY area property taxes average 15-20k per home owner and 75- 80% of the SD budgets go to pay salaries and benefits of the SD employees who are covered under a helath care plan, DB plan that permits retirement at age 55 and lifetime retiree health insurance paid by the taxpayers with guaranteed salary increases and teachers are protected from layoffs by tenure. SD arent going to spend budgeted money on a savings plan that is it is not required to pay for under state law when capital projects are not funded. The SDs that pay the highest salaries have the best teachers. No teacher is going to transfer to to another SD because it has a better choice of 403b funds because there is no employer matching contribution.

#9 Guest_Skeptical_*

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Posted 24 October 2007 - 12:23 PM

QUOTE(intruder @ Oct 24 2007, 11:52 AM) View Post

I dont know where you live but in the Metropolitan NY area property taxes average 15-20k per home owner and 75- 80% of the SD budgets go to pay salaries and benefits of the SD employees who are covered under a helath care plan, DB plan that permits retirement at age 55 and lifetime retiree health insurance paid by the taxpayers with guaranteed salary increases and teachers are protected from layoffs by tenure. SD arent going to spend budgeted money on a savings plan that is it is not required to pay for under state law when capital projects are not funded. The SDs that pay the highest salaries have the best teachers. No teacher is going to transfer to to another SD because it has a better choice of 403b funds because there is no employer matching contribution.


Intruder,

You are completely right as your statement speaks volumes about your viewpoint.

The 403(B) is a "supplemental" plan that is in addition to a pension that is decreasingly available to employees in the private sector. But that's no excuse for the really lousy products that are offered to most teachers in a conflicted, opaque, EXTRAORDINARILY PROFITABLE system.

I just don't see a logical rationale for why an employer allows this to go on. Aren't they participants too? I mean is the situation so adversarial that the two sides work to each others disadvantage, and to the great fortune of the Insurance industry?



#10 Guest_Sierra_*

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Posted 24 October 2007 - 02:21 PM

QUOTE(Skeptical @ Oct 24 2007, 01:23 PM) View Post

QUOTE(intruder @ Oct 24 2007, 11:52 AM) View Post

I dont know where you live but in the Metropolitan NY area property taxes average 15-20k per home owner and 75- 80% of the SD budgets go to pay salaries and benefits of the SD employees who are covered under a helath care plan, DB plan that permits retirement at age 55 and lifetime retiree health insurance paid by the taxpayers with guaranteed salary increases and teachers are protected from layoffs by tenure. SD arent going to spend budgeted money on a savings plan that is it is not required to pay for under state law when capital projects are not funded. The SDs that pay the highest salaries have the best teachers. No teacher is going to transfer to to another SD because it has a better choice of 403b funds because there is no employer matching contribution.


Intruder,

You are completely right as your statement speaks volumes about your viewpoint.

The 403(B) is a "supplemental" plan that is in addition to a pension that is decreasingly available to employees in the private sector. But that's no excuse for the really lousy products that are offered to most teachers in a conflicted, opaque, EXTRAORDINARILY PROFITABLE system.

I just don't see a logical rationale for why an employer allows this to go on. Aren't they participants too? I mean is the situation so adversarial that the two sides work to each others disadvantage, and to the great fortune of the Insurance industry?


Intruder:

YOU ARE WRONG WHEN YOU ASSERT THAT THE TAX IS $15,000-20,000.

I reside in the metro ny area and my real estate tax for 2007 is $8972.47.

Joel

#11 Vince

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Posted 24 October 2007 - 03:04 PM

http://blog.nj.com/n...w_property.html

None of the numbers in this study come close to the 15-20k range.



http://www.nytimes.c...7bloomberg.html

QUOTE
The average yearly tax bill for a condominium owner is $6,449, so a 5 percent cut would translate to $322 annually. The average tax bill on a house is $3,098, and a 5 percent cut would save $160.





#12 Guest_Skeptical_*

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Posted 26 October 2007 - 03:08 PM

Sandra,

What happened to you? Or was this just a clever little debate starter??

Curious,

Jim

#13 intruder

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Posted 26 October 2007 - 06:26 PM

QUOTE(Skeptical @ Oct 24 2007, 01:23 PM) View Post

QUOTE(intruder @ Oct 24 2007, 11:52 AM) View Post

I dont know where you live but in the Metropolitan NY area property taxes average 15-20k per home owner and 75- 80% of the SD budgets go to pay salaries and benefits of the SD employees who are covered under a helath care plan, DB plan that permits retirement at age 55 and lifetime retiree health insurance paid by the taxpayers with guaranteed salary increases and teachers are protected from layoffs by tenure. SD arent going to spend budgeted money on a savings plan that is it is not required to pay for under state law when capital projects are not funded. The SDs that pay the highest salaries have the best teachers. No teacher is going to transfer to to another SD because it has a better choice of 403b funds because there is no employer matching contribution.


Intruder,

You are completely right as your statement speaks volumes about your viewpoint.

The 403(B) is a "supplemental" plan that is in addition to a pension that is decreasingly available to employees in the private sector. But that's no excuse for the really lousy products that are offered to most teachers in a conflicted, opaque, EXTRAORDINARILY PROFITABLE system.

I just don't see a logical rationale for why an employer allows this to go on. Aren't they participants too? I mean is the situation so adversarial that the two sides work to each others disadvantage, and to the great fortune of the Insurance industry?


Skeptical:

The following is my analysis of the obstacles to changing 403b plans that you have noted.

In public employment, the entity controlling the 403b plan is a SD acting as the employer or a school board consisting of non teachers who do not participate in the plan. The difference between union represention in the private sector versus the public sector as posted on this board is that in the private sector, under federal law, unions are the exclusive bargaining agent with employers for salary and all benefits. If the union wants a particular benefit it is negotated with the employer. In the public sector, e.g., SD, 403b programs are not considered to be a negotiated benefit which leads to 2 opposite outcomes: In large metropolitian SD the SD will ingore the attempts by individual union members to change the 403b program because the program is not a benefit under state law that has to be negotiated (the union is only interested in increasing the $ amount of wages or benefits paid to members. 403b plans do not increase $ amount of employee benefits paid to employees). In smaller SD individual employees can approach the SD or the board and effecutate change because the union has no interest making changes because it is not a negotiated benefit. As an additional complication, the ability to restructure benefits is not possible in states that require that all providers be accommodated.

I am not an opponent of decent pay for teachers but given the opposition of property tax owners who face annual property tax increases in excess of 6%, SD in the NYC area are reluctant to become involved in improving a benefit for teachers that is not negotiated with the union if it requires the expenditure of budgeted funds.

#14 Guest_Skeptical_*

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Posted 26 October 2007 - 10:08 PM

Intruder,

Thanks for the reply and the view behind the curtain. I understand the reality of the practical barriers you describe in your post and you did a good job of articulating them. It does give me better perspective of your position and just plain helps me understand where the heck you're coming from at times.

Best regards,

Jim