Jump to content

ft6

Members
  • Content Count

    158
  • Joined

  • Last visited

Community Reputation

0 Neutral
  1. ft6

    457 Tpa

    Hi, My wife's school district in Illinois uses CPI as the TPA for their 403(b). They are now looking for a TPA to handle a 457 they are adding. I was told that CPI levies certain fees towards the participants and the school district wants to pay those fees on behalf of the participants as they have done in the past. However, CPI isn't accomadating the wishes of the school district. So, the school district is looking for another TPA to handle the new 457 that they are adding which happens to be a low cost vendor by the name of ASPIRE that offers no load funds with Vanguard. Can anybody recommend another TPA that will work with the district and keep fees low? Thank You!
  2. ft6

    Vanguard 403(B)(7)

    Hi Tony, I received good news today from my wife's school district. Although I lobbied for a 457 plan directly with Fidelity, they woulde not sign the ISA, I guess their holding even the 457 plan orovider to the same standard as the 403b. However, my second choice was ASPIRE as they do offer a 457 with similar fees like the 403b and they will be made available in a few months. Because ASPIRE is already a 403b vendor, it was easier for the school district to bring them on board. If you max out your 403b, lobby your school district for a 457 with ASPIRE like I did and hopefully you will be granted a 457 with ASPIRE.
  3. ft6

    Vanguard 403(B)(7)

    In order to make sure if the fund is available, you need to call ASPIRE and speak with customer service. Give them the name and the ticker symbol and they will check and let you know while on the phone. When I did it in November of 2009, Vanguard Index funds at the time were slightly higher than Fidelity's Spartan Index funds so I used Fidelity's Index funds. I called at the time and all of Fidelity's and Vanguards Index funds were available! Later on I even added Fidelity's GNMA fund. There are thousands to choose from and more than likely what your looking for will be available, but you need to confirm this with them before listing your Investment Elections. Oh, I forgot to mention at the time we did this, Fidelity required a minimum of 10K to invest in their Spartan Index Funds and that was waived! But call them tomorrow just to confirm and like I said, more than likely you will have access to those you want. Forgot to mention and you know this by now, Aspire is one of the good guys. They are a sponsor on this web site and listed at the bottom of the page. This makes sense, I don't think Dan Otter would list them if he didn't feel like we did.
  4. ft6

    Vanguard 403(B)(7)

    In order to make sure if the fund is available, you need to call ASPIRE and speak with customer service. Give them the name and the ticker symbol and they will check and let you know while on the phone. When I did it in November of 2009, Vanguard Index funds at the time were slightly higher than Fidelity's Spartan Index funds so I used Fidelity's Index funds. I called at the time and all of Fidelity's and Vanguards Index funds were available! Later on I even added Fidelity's GNMA fund. There are thousands to choose from and more than likely what your looking for will be available, but you need to confirm this with them before listing your Investment Elections. Oh, I forgot to mention at the time we did this, Fidelity required a minimum of 10K to invest in their Spartan Index Funds and that was waived! But call them tomorrow just to confirm and like I said, more than likely you will have access to those you want.
  5. ft6

    Vanguard 403(B)(7)

    I felt just like you do now Tony when I discovered this, I'm happy for you as you will now be able to invest again in your 403b. I wrote about this in great detail several months ago, I hope others realize they have this option if they have Aspire Financial as an option. What is a real travesty is that if you go off my wife's school district's vendor list, you would have NO idea that this option even existed! I found out by accident and there are many others out there that probably don't know. All we can do is keep spreading the word. I'm happy for you, what a great way to start off the investing year....Oh and by the way, ASPIRE also offers a 457 plan. Same fees, everything is identical. All you need is the school district to give ASPIRE permission to offer the 457 plan. Once they give permission, you can sign up that as well. We are in the process of attempting to get their 457 plan on board as well so that we can max out both of them. If you can afford to max out the 403b, lobby for the 457 through ASPIRE and then max that one out as well. Good luck. P.S. tried to get Fidelity as a 457 plan provider but the SD is having a problem accepting their plan documents as is, but ASPIRE will be just fine considering AXA is the only other alternative.
  6. ft6

    Vanguard 403(B)(7)

    Tony, Just out of curiosity, if you followed those steps, is your school district even listed in Aspire's database? If it is, I would think that is a good sign... By the way, I called Vanguard and they advised me that even though the account is still titled as a 403b7, the beneficiary can treat it as an ASSUMED or INHERITED IRA, each one carries it own distinct advantageous and disadvantegeous, thanks to all that responded...
  7. ft6

    Vanguard 403(B)(7)

    Hi Tony, No, I stumbled upon this myself. I am trying to put together a Financial sheet so that my spouse knows what we have, what options she has if she inherits the various accounts and what to do in case I'm not around. As I was doing this, I read an article about a common mistake that people make when they leave an employer they do not transfer their 401(k) into an Ira, they just let it sit with their previous employer. The author went on to say that because the old 401(k)was transferred into a Rollover IRA, the beneficiary can not stretch out the distributions and will be forced to take a lump sum. By the way Tony, I read your post and you raised some concerns that I want you to be aware of. Like I said in a previous post, Aspire is actually a low cost in comparison to what else in being offered, consider yourself fortunate if Aspire, formerly called 403bFundsource is offered as a vendor. However, if you plan on using a rep you are correct, it's not a great deal at all, they will only add an additional layer of costs. I wrote about this in great detail in a previous post and it sounds like you may be going down this road which I believe you can avoid and should avoid. With Aspire you the option to do a SELF DIRECT account, you DO NOT need a representative! At my wife's school district, Aspire Financial is listed as a vendor and next to them they have several brokers from Edward Joned listed as the reps for Aspire. I learned and discovered by accident after speaking directly with Aspire, that you DO NOT need a broker! All I did on my wife's application where it asked for the broker's name is put "self direct account" and "n/a" where additional broker information was requested. When I called her school district and advised them that I was not using a broker ( so they didn't kick back the application since no broker/dealer information was provided) they even said, "no problem, just make sure you indicate self directed account"... So we are being charged a 40.00 per year account fee plus 15 basis points of the account value. We invest index funds which adds another 10 basis points in fees (using Fidelity Spartan). Again, compared to the other loaded funds and annuity offered we feel blessed that although it's not dirt cheap, it's still wayyyyyy better than the other options. Now I understand why your reporting 90 basis points on a bond index, because your going through a rep. like I thought I had to. Do a self direct account, Aspire offers Vanguard Index funds. You don't need a broker. I wish the school districts would disclose this to it's employees instead of making everyone believe they have to use one. Thanks for the heads up. I was thinking of breaking my appointment and this information may seal the deal. I did notice thats its no longer (Suddenly) called ASPire as it was last time I looked on our school benefits page. Its now called Everence but I spoke to the rep just this past friday and he said he was associated with ASPire so I'm not sure what to make of this. Question. Do I call him and say "I want a self directed account and I don't want to work with you" or do I talk to my personnel director? As usual, when it comes to 403B's I am still a novice and just as susceptible to making the same mistakes I made years ago. Why is this always so complicated?? Hi Tony, Yes, cancel your appointment with this rep. but no need to tell him you want to do a self direct account, it's none of his/her business. Make up an excuse. Here are the steps we had to take to sign up with Aspire at my wife's school district. 1. Go to their web site http://www.403bplan.info/index.php and click on plan search. 2. Select your state, click on NEXT, then select your school district, click on NEXT 3.Click on Plan Detail, left hand side 4.Download the enrollment form and where it asks for any Broker information, write SELF DIRECT ACCOUNT 5.Near the end you will find the Account Investment Election Form, this is where you will write which specific mutual funds you want your money invested in. Mail or Fax the form to Aspire, once they establish your account, then complete a salary reduction agreement and give it to your payroll/403(b) office. If your SRA requests Broker information, write "self direct" account. That's all we did and I believe that's all you need to do. In the event your HR people tell you, you must use a broker dealer, I would resist. They may only be saying that because the form asks for one. I was initially told that my wife needed one but they quickly relented and told me to write "self direct". I know for a fact Aspire allows this because they are the ones that brought it to my attention! So I wouldn't even ask your district, just indicate "self direct" and enjoy the next best option to having Vanguard. 40.00 annual fee, 15 basis of the account value and whatever your mutual funds charge. Since you probably use index funds this will add a few more basis points. Better than the loaded funds and annuities the others are offering, and I mean ALL of the other vendors. ASpire is the only vendor where I can self direct and buy index funds. They offer thousands of funds and charge only the fees I mentioned. I have seen these fees on our account statement and they are legit. Good luck
  8. ft6

    Vanguard 403(B)(7)

    Hi Tony, No, I stumbled upon this myself. I am trying to put together a Financial sheet so that my spouse knows what we have, what options she has if she inherits the various accounts and what to do in case I'm not around. As I was doing this, I read an article about a common mistake that people make when they leave an employer they do not transfer their 401(k) into an Ira, they just let it sit with their previous employer. The author went on to say that because the old 401(k)was transferred into a Rollover IRA, the beneficiary can not stretch out the distributions and will be forced to take a lump sum. By the way Tony, I read your post and you raised some concerns that I want you to be aware of. Like I said in a previous post, Aspire is actually a low cost in comparison to what else in being offered, consider yourself fortunate if Aspire, formerly called 403bFundsource is offered as a vendor. However, if you plan on using a rep you are correct, it's not a great deal at all, they will only add an additional layer of costs. I wrote about this in great detail in a previous post and it sounds like you may be going down this road which I believe you can avoid and should avoid. With Aspire you the option to do a SELF DIRECT account, you DO NOT need a representative! At my wife's school district, Aspire Financial is listed as a vendor and next to them they have several brokers from Edward Joned listed as the reps for Aspire. I learned and discovered by accident after speaking directly with Aspire, that you DO NOT need a broker! All I did on my wife's application where it asked for the broker's name is put "self direct account" and "n/a" where additional broker information was requested. When I called her school district and advised them that I was not using a broker ( so they didn't kick back the application since no broker/dealer information was provided) they even said, "no problem, just make sure you indicate self directed account"... So we are being charged a 40.00 per year account fee plus 15 basis points of the account value. We invest index funds which adds another 10 basis points in fees (using Fidelity Spartan). Again, compared to the other loaded funds and annuity offered we feel blessed that although it's not dirt cheap, it's still wayyyyyy better than the other options. Now I understand why your reporting 90 basis points on a bond index, because your going through a rep. like I thought I had to. Do a self direct account, Aspire offers Vanguard Index funds. You don't need a broker. I wish the school districts would disclose this to it's employees instead of making everyone believe they have to use one.
  9. ft6

    Vanguard 403(B)(7)

    I don't have an answer, just a few thoughts: There is information about inheriting a 403b and tax consequences all over the web. I would be careful about transferring from a low cost company to a higher cost company that will address a potential tax problem. There are many variables, how much are we talking about and what would be the tax if it were fully distributed? Most important, would the tax savings be higher than the costs when you transfer to a higher cost company? Those fees add up over the years, even if its "just a little bit higher."” I would be interested in what you find out. Steve Hi Steve, I am NOT going to transfer this account to her current vendor 403(b)Aspire Financial. The money is sitting in a 403b7 account at Vanguard and will remain there. It wouldn't make sense for us to transfer this money to Aspire since the costs of keeping it at Vanguard outweigh the slightly higher fees at Aspire. Our only concern is how the money is currently being titled. I beleive we should transfer this money out of her 403b7 and into a Rollover Ira (still at Vanguard) so that in the event something happened to the account holder, a beneficiary would have options, like doing a "stretch Ira". If the money is just left in the 403b7 acccount, I beleive this option would not exist and the primary benficiary, me, would have to take a lump sum distribution which I would like to avoid. Were talking about 150K. I will call Vanguard monday morning and I will report back with what they say for others that may be in the same boat. This comes down to possibly retitling the account so a beneficiary does not have to take a lump sum and can stretch out the distributions over their life expectancy and keep the tax shelter in place for the rest of the money so it can continue to compound tax free. At the time we never botherd to convert it to a Rollover IRA because I believe we wanted to avoid a yearly IRA fee which is no longer an issue due to our portfolio size. What's the saying, penny wise, pound foolish?
  10. ft6

    457

    What options does a spouse who inherits a 457(b) have? Can they just leave the money in the plan, but risk losing the ability to do a "stretch Ira"? Can they rollover the money from the 457 into an existing rollover Ira they currently have? Can they rollover the money into an existing Roth Ira? My spouse currently has a Roth Ira at Vanguard and an old 403(b)(7) that we may rollover into a Rollover Ira at Vanguard. If she was allowed to rollover the 457(b)into her existing Roth Ira, that new money coming from the 457 would have to be converted and thus every penny taxed as ordinary income correct? So, if for example 100K from the 457 was transferred into her existing Roth Ira, she would have to claim that 100k as income, correct?
  11. ft6

    Vanguard 403(B)(7)

    My spouse use to contribute directly with Vanguard when they were a vendor in her old 403(b)(7). After losing Vanguard as a vendor, we decided to just leave the money with Vanguard. Her new 403(b) is with Aspire Financial and although they are low cost, we rather just leave the old 403(b) with Vanguard and not transfer it to Aspire. However, while doing some estate planning I think I stumbled upon a potential problem I was unaware of. I am going to call Vanguard first thing Monday morning but wanted to see if anybody here could validate my concerns. By leaving the account as is titled "Jane Smith-403(b)(7)", does the primary beneficiary lose the ability to do a "stretch ira" since this account has not been rolled over into an Ira? It just dawned on me that this oversight could lead to just one option, a costly lump sum distribution, left as is. In addition to the loss of the tax shelter. Am I correct? By not having rolled this old 403(b)(7)over into an IRA does a beneficiary lose the "stretch Ira" option and have a lump sum distribution as the only option? At the time, Vanguard never raised this concern and I never thought about it till I was doing some research on the best and most tax efficient ways to inherit an IRA. Thanks for any input.
  12. ft6

    403(B) New Rules And Regs

    Ok for what it's worth, I just called CPI and they said they will not require an Information Sharing Agreement with a 457 Vendor. However, with a 403(b) an Information Signing Agreement is required for a Vendor to do business with the SD. I asked the CPI rep. if it will be as simple as the SD sending them the contributions and they just forward that money to Fidelity, she said yes. She was with the "Vendor" customer service dept.at CPI. I hope she is right and that the school district doesn't throw any obstacles our way by holding the 457 plan to a "higher standard". I'll keep you posted.
  13. ft6

    403(B) New Rules And Regs

    Steve, There is a sub committe for the school district's 403b composed of school district administrators and from I was told they also oversee the 457. I know that Fidelity has it's own plan document that the school district needs to sign off on. I work for a municipality in Illinois and secured Fidelity as our 457 plan provider and it was very a very easy process. The village attorney looked over the plan documents and then the village clerk signed them, that was it. No issues. I am concerned that either the TPA or the school district will say that there is additional documents that Fidelity will not sign and therefore can not be added, which in my opinion is wrong because all this "paperwork" was a result of the new IRS rules governing 403b's. I believe the school district will treat the 457 like the 403b and even after obtaining the necesary minimum amount of participants, were gonna be told sorry, but I hope I am wrong! Were still waiting for a response from the School District. I'm going to call the TPA to see what they say, thanks Steve....
  14. Do the new rules and regs that were imposed by the IRS on 403b's, extend to 457's or were they just intended for 403b's. I believe these were created and implemented for 403b's and not 457's. I am asking because I finally obtained the minimum amount of people needed to add Fidelity as a 457 vendor and I am anticipating in the near future the school district official telling me that Fidelity can't be added because they won't sign the TPA's agreement, who happens to be CPI, the same problem we had with keeping Fidelity and Vanguard in the school district's 403b. To my knowledge, the 457 should not be affected by the new rules and regs that affected the 403b's, am I correct? Thanks
  15. Hi fty, Did you read my response to you at Bogleheads.org? Steve Yes I did Steve, Thank you and sorry about the delay in responding. Steve and others, I have another question. A teacher that is currently contributing to a 403(b) with Putnum wants to know if she can roll that money in her 403b with Putnum into the Fidelity 457 if we succeed in getting Fidelity. I think she can do a rollover if memory serves me correct. I remember my wife doing a rollover from Zurich Kemper to Vanguard 12 years ago, is this still allowed and can rollovers be from a 403b to a 457? Thanks I will check back later. I just got off the phone with the Fidelity 457 dept and here is what they said. If a person is still employed with the same employer that is providing the 403b and 457 plan, they can not roll the money over from the 403b to the 457. If they leave the employer and go to work for another employer that offers a 457, then they can roll the old 403b money into the 457 plan with th new employer, provided the 457 plan with the new employer allows this (see plan documents) So as long as you remain employed with your current employer you can not roll money from a 403b to a 457, however you can roll it to another 403b that your current employer provides. My friend has a 403b with Putnum at her school district, at least she can tranfer to another low cost 403b, so all is not lost fortunately for her.
×