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Everything posted by krow36

  1. bluejay1975 has posted about her/his school district’s 403b457 plan on the Boglehead forum. https://www.bogleheads.org/forum/viewtopic.php?f=1&t=234118 and PMs. This district is a member of a consortium of 39 districts and instead of each district having a number of vendors, now they all have only one—VALIC. The districts were able to reduce costs significantly and also increase participation. Each school in the district is assigned an advisor that is said to be salaried and not working on commission. The consortium is in Missouri and is called Cooperating School District Retirement Trust (CSD-RT). This website explains the new plan to employees: http://1hmfgi1zzk1c24sh788c5ct8.wpengine.netdna-cdn.com/wp-content/uploads/sites/5/2015/10/Frequently-Asked-Questions-CSD-Retirement-Trust.pdf Funds: http://1hmfgi1zzk1c24sh788c5ct8.wpengine.netdna-cdn.com/wp-content/uploads/sites/5/2017/05/CSD-Retirement-Trust-Investment-Options-03.31.17.pdf Vanguard Institutional Index Inst VINIX, ER 0.04% Vanguard Small Cap Index Admiral VSMAX, ER 0.08% Vanguard Total Intl Stock Index Admiral VTIAX, ER 0.07% Vanguard Total Bond Market Index Admiral VBTLX, ER 0.06% Vanguard Target Retirement funds, ER 0.13% to 0.16% also 22 other index and managed funds https://www.edplus.org/cms/lib/MO01928355/Centricity/Domain/101/Retirement Trust Employee Benefit That Benefits All.pdf This website promotes the consortium plans to district administrators. The Investment Management Fee as of 5/31/17 is 0.13% and there’s a $20 Annual Fee. A 3 Fund Portfolio could be had for a total of about 0.20% and $20. Using a Target Retirement fund would total about 0.28% and $20. This plan is about 2 years old and the average costs have been reduced from 1.57% to 0.45% plus $20, while participation has increased by $105M. I realize this can’t happen in states like CA and WA where the insurance lobby has bought laws that prohibit K-12 districts from having a single vendor. For the rest of the country, doesn’t this sort of organization look promising?
  2. Nobody Knows Nothing

    MoeMoney, Our Tony + Tony Isola = 2 Tony's! I don't think Tony Isola visits us here, at least not recently. But thank you Tony for the OP on Tony!
  3. 403b Annuity Salesman Perspective

    The Security Benefit rep must have been selling the NEA “Valuebuilder” MF plan with Option 1? https://securitybenefit.se2.com/#53&RID=46&prodID=127&prodOpt=1&prodCat=RP The funds in this plan have ERs mostly between 1.0% and 1.5%. No thanks! https://securitybenefit.se2.com/#53&RID=46&prodID=127&prodOpt=1&prodCat=RP
  4. Nobody Knows Nothing

    Tony Isola refers to the podcast in the blog, but doesn't provide a link. He does a great interview! https://www.ngpf.org/blog/podcasts/ngpf-podcast-tim-talks-to-tony-isola-an-advocate-for-better-403b-plans/
  5. That is my concern as well. Is there any way for VALIC to make money through their reps other than through the 23bps/annum fee? How does the Trust protect the employees from “rollover conflict of interest”? Is the 403b considered to be an ERISA or a non-ERISA plan? Or something in-between?
  6. How To Find The Right Financial Pro

    Here's an article about a new network of fee only financial advisors. https://www.nytimes.com/2018/02/02/your-money/financial-planner.html?rref=collection%2Fsectioncollection%2Fyour-money&action=click&contentCollection=your-money&region=&module=stream_unit&version=latest&contentPlacement=10&pgtype=sectionfront
  7. Some will say the CSD-RT fees are too high—they are not competitive with the low-cost providers such as Fidelity and Vanguard. Perhaps we should look at the bigger picture. We all know that the average fee in a multi-vendor 403b that includes high-fee insurance companies is very high, often over 2%!! Most teachers will choose to work with the high-fee annuity salesperson, and maybe only 5-10% will take advantage of internet-based DIY low-fee providers if available. IF your district could choose between a CSD-RT 403b type plan (single providor, multi-district) or a multi-vendor 403b plan of mostly annuity-based plans but which includes a very low-cost DIY Fidelity plan, which do you choose? The former will benefit a greater number of teachers, the latter will benefit the small minority with financial knowledge. Which plan will have a higher participation rate? We realize it costs money to support a low-cost 401k plan in the for-profit world. Large and/or generous companies are able to pick up the considerable costs of a plan that is ERISA compliant. A small for-profit company often uses a plan with ERs as high as 1% that shifts the costs to the employees. Unless it is very large, a single school district doesn’t have the funds and lacks the economy of scale to support a fiduciary based plan. We want the services for every district that the CSD-RT plan provides, but nobody wants to pay for them. With economies of scale, the K-12 employees can afford to pay for these services. CSD-RT Marketing, Legal, Insurance, Administration & Governance-$20 fixed fee/annum. Participants pay a 0.32% (32 bps) annual asset based administrative fee. VALIC Recordkeeping, Administration, Education, Compliance & Advisors-23bps/annum CBIZ Consulting and Investment Advisory Services-8.75bps/annum What do you think? How about some discussion of these ideas! What am I missing? Steve? Ed? Dan? Tony? Others? The silence is deafening.
  8. Thanks for answering the question about Managed Accounts and explaining how the VALIC advisors are compensated. Can you give us an idea of the participation rate and whether it has grown over the 2 years? It’s discouraging to learn that nationally K-12 403b participation is around 30% and most of those are in annuities. I agree that target date funds are an excellent choice. How much more popular is the Fixed Income Option than the TR funds? I’m very impressed with how CBIZ and the CSD have set up the Retirement Trust using RFPs. Is it likely that CBIZ and/or VALIC’s fees will be lowered as the RT grows? Does RT consider itself an ERISA plan? From the History PDF, I believe that the CSD (Cooperating School Districts) organization came before the RT (Retirement Trust). I wonder if this prior phenomenon of school districts working together on a financial level is the secret sauce that allowed a truly fiduciary RT to come about? I also wonder if there was an exceptional leadership factor in setting up the RT, and that person supplied critical financial knowledge that is usually absent? Before the Trust, did the districts have multiple 403b and 457 vendors? If so, was there significant resistance to changing to the Trust?
  9. CSRTCEO, thank you for joining the forum to discuss the Retirement Trust! 403bwise.com welcomes input from organizations running 403b and 457 plans, and the CSD Retirement Trust jumps out as a possible model for other districts and states. Many, if not most of the active posters on this forum have been taken advantage of early in our teaching careers by very expensive annuity salespersons. Or by very expensive 403b(7) salespersons. This results in some skepticism about any 403b plan, especially one where an insurance company, VALIC in this case, has not only record keeping, administration and compliance roles, but also education and advisor roles. However, we realize that teachers typically need a live person to educate them on the basics of investing in 403b or 457 plans. Presenting the basics on an internet website does not seem to get the job done, alas. Is it possible for the VALIC reps to give out basic information without manipulating the uninformed into signing up for a Managed Account? How do you address this possible conflict of interest? What percentage of participants use the advisor for a “Managed Account”? What is the fee schedule for a Managed Account? You mention ”investment management fees” of 0.04% to 0.94%, with an weighted average of 0.17%. Are these the expense ratios?
  10. ERO refund

    I don’t think a rollover from one plan to another ever effects the annual maximum contribution. In other words if you roll over a 403b plan from a previous employer to your current 403b plan, that does not effect the current plan’s annual maximum contribution. If in doubt, ask the IL TRS office.
  11. 403b Annuity Salesman Perspective

    I think the Iowa state run 403b is not a good model for solving the multi-vendor, annuity-based K-14 403b problems. The state of Iowa organized a 403b-7 but ended up with 4 vendors (Horace Mann, MetLife, VALIC and Voya), competing with each other. They all include Vanguard low-cost index funds with about 0.20% AUM added. Who payed for the Iowa study? Did it include the districts with Optional Providers? Can you give us a link to the study? Agreed! Unless we can get rid of the commission-based reps, there will be problems, as you have mentioned, and as this website has been advocating for decades.
  12. 403b Annuity Salesman Perspective

    The Security Benefit NEA Direct Invest has an administration fee of $35 if the balance is <$50k, $0>$50k. There is no AUM fee. I wonder if the rep wasn't selling other expensive SB products? YES! All great ideas, but. . . .Because the employer is not required to be a fiduciary, we're stuck with the current K-14 non-ERISA multi-providor 403b mess. If the district is VERY large, or districts combine for 403b/457 purposes, or the state takes on the job, it seems to be possible to implement the single provider, low-cost 403b-7 platform. And IF there is no state law requiring a multi-vendor 403b. Otherwise, I think we are dreaming.
  13. 403b Annuity Salesman Perspective

    I think many of us would agree with you on most of the above. However AXA, MetLife, Security Benefit are not going to hire salespersons on salary to sell custodial accounts and Roth IRAs are they? Don't you think a single-vendor 403b is the only fix for the current K-14 403b mess?
  14. I think the 403b Model Disclosure is an attempt by the profiteers to keep the multi-vendor mess in place. It’s laughable that NEA was involved in it’s development. I wonder how many millions they received for the loan of their acronym? NTSA is an industry mouthpiece/lobbyist. Both NTSA, ARA and NEA want to keep the multi-vendor annuity salespeople prowling the schools. Scottyd on NTSA: http://teachersadvocate.blogspot.com/2016/04/ntsa-continues-shameful-campaign.html and http://teachersadvocate.blogspot.com/2016/09/ntsa2013.html Scottyd on ARA: http://teachersadvocate.blogspot.com/2016/04/american-retirement-association-opposed.html and http://teachersadvocate.blogspot.com/2016/04/debunked-asppa-study-used-to-push.html Scottyd probably has written about the 403b Model Disclosure but I didn’t get past the 2016 articles above. School districts do not have the power, funding, or knowledge to administer a 403b Model Disclosure. 403bcompare.com, administered by CalSTRS (the CA teacher’s pension organization) probably does about as good a job as can be done. They have state-wide power, knowledge and funding, all of which individual school districts lack. Although 403bcompare is a great resource, I don’t think it prevents 1000’s of California K-14 employees from falling for expensive, inappropriate annuity-based 403b plans. It’s clear to me that K-14 employees need a single vendor 403b, controlled by organizations that have the a fiduciary relationship to the employer and employees.
  15. 403b Annuity Salesman Perspective

    Let's not highjack this important thread. Ken your letter deserves a thread of its own. It's not easy reading but I'm working at it (although it's way above my pay grade).
  16. 403b Annuity Salesman Perspective

    Yeah Tony, I know that most teachers don’t even contribute to a 403b or 457. And that the vast majority of those who do, contribute to an annuity! If a bunch of county school districts in Missouri can get together and work out 403b and 457 plans that are fiduciary based, very low-cost custodial accounts, there’s hope. And they are continuing to add county school districts to the consortium. Check out the link! As long as a district has multiple vendors, even if a Fidelity or Vanguard is included, I don’t think the vast majority of teachers will be end up with a low-cost custodial account which is our long term goal I hope. The states that have laws that prevent a district moving to a single-vendor 403b (CA, WA, TX etc.) will eventually see the light. Tony you say it’s not happening, but I think it IS happening! All those state based 457 plans are evidence that the message is getting through and action has been taken to give K-14 employees a fiduciary-based plan. There are school districts with excellent fiduciary-based 403b plans—they do exist. So it’s possible, and I think we need to publicize the districts where it has happened. Let's emphasize the victories as well as pointing out the outrages. I only know of a few but there are no doubt more. (Chicago, NYC, Montgomery County, MD, and those MO county districts).
  17. 403b Annuity Salesman Perspective

    Ed and Tony, I don’t agree that we’ve heard enough from the OP. Yes we’ve heard most of it before, but everyone needs to hear again and again! 403bannuitysalesman’s posts are very valuable to the reform movement. To have a 403b annuity salesperson detailing the ethical problems is much more convincing than are complaints from teachers, their spouses, and reformers. Not only more convincing to teachers, but to school administrators, unions, state legislators, congress, etc, that can actually do something about it. He is willing to expose the industry from the inside. Perhaps this thread could help inform district administrators of the need to move to reduce the provider list? The K-14 403b doesn’t have to be killed, it can be fixed. Witness what a number of Missouri counties have done! I don’t believe that 403bannuitysalesman himself is committing all the outrages conflicts of interest that he describes. We don’t really know what he himself currently sells to teachers but he implies that he does not do rollovers that result in surrender fees. I noticed that the OP included a CFP tag on this thread. I wonder if he has that credential? OP have you always worked as a 403b annuity salesman, or is this a job you’ve taken up recently? Do you consider yourself a sort of industry whistleblower?
  18. 403b Annuity Salesman Perspective

    I agree. Walk into your nearby bank or Edward Jones office and you will not be sold low-cost index funds, or even lower-cost actively managed funds, and probably will be stuck with an >1% AUM fee. I think I've read that the overall average ER of funds in 401k plans is around 1%? Of course selling variable annuities takes it to another level! The rollover scams another level above that!
  19. 403b Annuity Salesman Perspective

    Do the districts you work with have a low-cost mutual fund based provider on their list, as well as annuity selling vendors? Does your insurance company offer a MF based 403b plan? What do you think of 403bcompare.com?
  20. 403b Annuity Salesman Perspective

    I agree with Tony that 403bannuitysalesman’s post doesn’t tell us anything we didn’t already know. I would like to thank him for describing the Wild West K-14 403b scene from the inside. I doubt he would have posted if he didn’t think doing so might help change the scene. We are dealing with a 403b system with many different factors that can be and usually are conflicted. The sales reps, the insurance and finance companies the sales reps work for, the district HR office, the district’s elected governing board, the TPA, the unions both local and national, the state legislature, the IRS and DoL and Congress. And of course most teachers are not bothering to educate themselves on the basics of what they are buying. How can we make use of 403bannuitysalesman’s post? It looks like a powerful educational tool to me!
  21. I’ve been collecting state 457b plans and their links for a few months. Today I stumbled on to a 2012 post by Joel proposing that a list of state plans would be useful addition to the 403bwise forum. He was thinking mainly of state 403b plans but suggested there should be a list for 457b plans as well. http://board.403bwise.com/index.php?showtopic=5419 Were lists of state plans established on the forum back in 2012? Do you think it would be useful? It seem like the question comes up on this forum and on the BH forum fairly often. What do you think? 457b STATE PLANS AL DCP: http://www.rsa-al.gov/uploads/files/RSA-1_Member_Handbook_bookmarked.pdf http://www.aasbo.com/uploads/7/4/4/7/74479591/kit_gallup_aasbo.pdf http://www.rsa-al.gov/index.php/members/rsa-1/rate-of-return/ http://www.rsa-al.gov/index.php/members/rsa-1/historical-returns/ AR http://portal.arbene...es/default.aspx https://myplan.voya....myplan.voya.com AZ https://www.arizonadc.com/iApp/tcm/arizonadc/about/index.jsp CA DCP and 403b: CALSTRS Pension2: http://www.calstrs.com/sites/main/files/file-attachments/easy_choice_portfolios.pdf DCP and 403b: CALSTRS fees: http://www.calstrs.com/sites/main/files/file-attachments/p2_fee.pdf CO DCP and a 401k are available to K-12 employees statewide https://www.copera.org/programs/peraplus-401k457-and-pera-dc-plan-information CT There are a few districts on the list but it also seems that State employment is required (see application form)? Can other districts be added to the list? http://www3.prudenti...etail-page.html http://www3.prudenti.../your-plan.html IA Iowa state 403b plan: https://das.iowa.gov/sites/default/files/hr/ric/403b/documents/AAG_ERE.pdf Core Investment providers: HMann, MassMutual, VALIC, VOYA: all low cost; their fees: https://das.iowa.gov/sites/default/files/hr/ric/documents/prod_fees.pdf Also uses 5 “Optional providers”: SB, AXA, Lincoln, EFS and Great American., fees/load add up to about 1.0% or more. No bargain. their fees: https://das.iowa.gov/sites/default/files/hr/ric/403b/documents/AAG_ERE_OP.pdf HI DCP: http://islandsavings...t-the-plan.html The "getting started" page: http://islandsavings...ng-started.html And the investments that are available: http://islandsavings...nvestments.html LA DCP: https://louisianadcp...rs.com/login.do Core funds: https://louisianadcp...98228-01&db=pnp more info: http://board.403bwis...?showtopic=6459 MA DCP: https://mass-smart.gwrs.com ME DCP: Maine teachers are State employees and receive their pension through MaineSTRS. They can use the Maine Saves 457 which has a choice of 3 providers: Mass Mutual, VALIC and Voya. http://www.mainesaves457.com/my-investment-options/ VALIC funds: http://www.mainesaves457.com/wp-content/uploads/2016/08/Valic-Fund-Fact-Sheets.pdf The other two providers include low-cost funds as well. MN DCP: https://www.msrs.state.mn.us/web/employers/mndcp NC 457b Plan: https://www.nctreasurer.com/Retirement-and-Savings/Managing-My-Retirement/Pages/NC-Total-Retirement.aspx also has a 401k and 403b NH Teachers are members of the NH Retirement System so should be eligible for the NH DCP plan. https://nhdcp.gwrs.c...cu=NHampshireWR NY DCP: guide to the plan https://www.nysdcp.com/iApp/tcm/nysdcp/about/index.jsp guide to investinghttps://www.nysdcp.com/tcm/nysdcp/static/Brochure_NYSDCP_Education_Kit.pdf?r=1 plan partners & fees https://www.nysdcp.com/tcm/nysdcp/static/fee_transparency.pdf?r=1 OH DCP: https://www.ohio457.org/tcm/ohio457/static/2015_4q_focus_newsletter.pdf OK There is a Oklahoma Teachers Retirement 403b plan, run by VOYA, but no 457 plan. The lowest ER looks like 0.62%. https://otrs.beready2retire.com/investments/investment-options/666277 https://otrs.beready2retire.com/investments/investment-performance/666277 OR DCP: http://www.oregon.gov/pers/OSGP/Pages/index.aspx DCP fees: http://www.oregon.gov/pers/OSGP/docs/fee_structure.pdf SC DCP: https://southcarolinadcp.gwrs.com/wrFundOverview.do?accu=SouthCarolinaWR&groupID=98955-01&db=pnp NOT FOR TEACHERS?: https://www.fascore.com/PDF/SouthCarolina/planFeaturesAndHighlights.pdf VA DCP: http://www.varetirem...d-profiles.html WA DCP: https://www.dcprovider.com/PDF/washington/DCP_Enrollment_Booklet.pdf performance: https://docs.retirementpartner.com/ioag/98953-01_IOAG.pdf WI DCP: https://wisconsin.gwrs.com/login.do WV DCP: https://dcprovider.com/PDF/WVirginiaWR/enroll.pdf
  22. 2017 Return, costs and asset allocation

    Our asset allocation is 40% equities, 60% bonds and has been for the last 10 years. Prior to that it was 50/50 since we retired. We've been retired 25 years. Vanguard portfolio as of 31 Dec 2017: 1 yr, 11.2% 3 yrs, 6.1% 5 yrs, 8.0% 10 yrs, 7.2% Vanguard (92% of investments) average ER is 0.14% as per Portfolio Watch. TIAA (8%)
  23. TIAA Traditional

    Vanguard's Total Bond Market and Intermediate-term Bond Index funds did not loose much during the 2008-2009 downturn. I can see preferring TIAA Traditional because of it's higher guaranteed 3% return compared to the bond funds present return. Maybe concern for rising inflation that results in rising interest rates would be a better reason to use TIAA Traditional? Is the rate actually 3% on your district's TIAA plan?
  24. 457B State Plans for K-12 employees

    Added the Oklahoma State Teachers Retirement 403b plan. It's run by VOYA, but there is no 457 plan. The lowest ER looks like 0.62%? https://otrs.beready2retire.com/investments/investment-options/666277 https://otrs.beready2retire.com/investments/investment-performance/666277
  25. Who Decides 457 Vendors?

    You are right—that law doesn’t seem to address the question of who determines the providers on the employer’s 403b list, the district or the TPA. I guess your quote from the NYT article explains it—the district may delegate the job to the TPA. Scott Dauenhauer, CFP, (ScottyD on this forum) in his book Wild West, Providing Fiduciary Advice to Public School Employees explains the many conflicts of interest that TPAs can have. Regardless, you have to work with both the TPA office and the HR office. If you continue to talk (nice) to them, I think they will realize that your quest to add a CalSTRS Pension2 457 option is very reasonable. Neither office wants to be accused of having a conflict of interest. There may be a procedure to add a provider, and in some districts it involves the union. Shine some daylight on what’s going on! Yes, it’s pathetic that a teacher has to be the one to work this out—as if you didn’t have enough to keep you busy already?? (I’m a retired teacher.)