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magmason

Questions About Pension2 Changes

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Hi, I am hoping Scotty D and others can help me with these questions. They are not as complex or informed as the issues raised in Whyme's thread, so I didn't hitchhike onto that discussion.

 

1. I was invested in an Easy Choice portfolio, but after a lengthy assessment and consultation with a TIAA-CREF advisor, we decided I needed a more aggressive approach, and he switched my investments to a lineup he said was appropriate (not Easy Choice).

 

Does this mean I am now in an SDBA? Will I be going through Ameritrade henceforth, and if so, do I have to pay any additional fees they may charge? The fine print in the brochure says "TD Ameritrade is not affiliated with the Voya family of companies." Will my contributions continue to be invested as they are now?

 

2. If I decided to go with an Easy Choice portfolio but did not want it rebalanced every year on my birthday, would this automatically make me self-directed?

 

3. Currently, TIAA-CREF gives investment consultations and prepares personalized planning reports for free. I have taken advantage of these services with good results. Will I now have to pay for these services, and if so, how is this a better plan for me?

 

I am very very anxious about this change. Thank you for your help.

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Hi Dan,

 

Why would I call TIAA-CREF if they are no longer administering the plan? These questions are about the shift to VOYA.

 

I am still hoping Scotty D can answer my questions.

 

Thanks,

 

Maggie

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Magmason,

 

I, too, have a portfolio outside of the Easy Choice menu. I received my P2 package yesterday from CALSTRS and it looks to me like the Easy Choice funds will be at Voya and the others will go to TD Ameritrade SDBA. However, I still had some unanswered questions and immediately called the information phone no. (844.353.2872). To my surprise, a person answered without the usual annoying prompts. Here is some information that was not in the brochure.

 

1. The TD Ameritrade SDBA will have a $50.00 annual fee and there will be no transaction costs per fund.

 

2. My 457 contribution will go directly to Ameritrade and the 403 will arrive a couple of days later because the funds must pass through the TPA.

 

3. The beneficiaries on file at TC will automatically be passed through.

 

I am a DIY investor and do not use the investment services at TC but I did notice in the brochure that there will be free online advice and a "Full Managed Account Service Option....... Participants pay an additional fee for this service." I do know that the advisors at Ameritrade are available over the phone. Anyway, you still have a couple of weeks to make adjustments.

 

I checked out the mutual fund screener in my Ameritrade account and found over 3000 no-load, no transaction fee funds. The fund screener is all Morningstar information, like TC, but a little more cumbersome to use. I'm sure as I use it more often it will become easier to navigate....there is plenty of information for investors to research.

 

I am sure that many more questions will arise so I hope others will share!!! Bob

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Thank you very much, Bob, for your information. I am chagrined that a system that was working very well for me is now going to cost me more. TC offered excellent consulting services and custom plans tailored specifically to my needs, for free. It seems the only people who will really benefit from this change are those who use the Easy Choice Portfolios and who have investments that will charge lower fees. All the fees for my investments will now be the same or higher, plus I now have the $50 fee and no free expert consulting services.

 

Disappointing.

 

When I learn more, I will share information. Thanks again.

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Hey All,

 

Sorry for not seeing this, I'll answer your questions soon. I assure you no one will be placed into the SDBA and forced to pay $50 per year, that is purely optional (and not different then the current setup). I'll try to have answers for you by tomorrow afternoon, it's just been crazy busy.

 

ScottyD

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Hi, I am hoping Scotty D and others can help me with these questions. They are not as complex or informed as the issues raised in Whyme's thread, so I didn't hitchhike onto that discussion.

 

1. I was invested in an Easy Choice portfolio, but after a lengthy assessment and consultation with a TIAA-CREF advisor, we decided I needed a more aggressive approach, and he switched my investments to a lineup he said was appropriate (not Easy Choice).

 

Does this mean I am now in an SDBA? Will I be going through Ameritrade henceforth, and if so, do I have to pay any additional fees they may charge? The fine print in the brochure says "TD Ameritrade is not affiliated with the Voya family of companies." Will my contributions continue to be invested as they are now?

 

2. If I decided to go with an Easy Choice portfolio but did not want it rebalanced every year on my birthday, would this automatically make me self-directed?

 

3. Currently, TIAA-CREF gives investment consultations and prepares personalized planning reports for free. I have taken advantage of these services with good results. Will I now have to pay for these services, and if so, how is this a better plan for me?

 

I am very very anxious about this change. Thank you for your help.

 

Magmason,

 

I'm a little puzzled as to why the TIAA rep would not keep you in Easy Choice, there is an aggressive option (99% risky assets currently), but to answer your question, no you would not be placed in the SDBA. You would have been placed into a portfolio designed by Ibbotson using the core lineup. The SDBA at TIAA is Pershing, but you are not in that account either. TD is not affiliated with Voya, but it is available for those who want more options than are available in the core lineup. If you do nothing, your portfolio should stay the same (with the exception of the TIAA Traditional which you would need to transfer to CREF Money Market just prior to the transition - or sign the letter sent to you). Some other options will be removed and if you are invested in them, they will be automatically mapped to the new option (as will your investment direction for contributions).

 

If you decide to go Easy Choice, it will be rebalanced each quarter going forward with the first rebalance likely in early 2015 and then each quarter thereafter. You wouldn't need to do anything once in the portfolio.

 

Voya offers the Financial Engines services (which is similar to the Ibbotson service you were using) which you can utilize for free or you can allow them to manage your account for an additional fee. You can utilize Financial Engines without using their managed account service.

 

Let me know if this answered your questions.

 

ScottyD

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Thank you very much, Bob, for your information. I am chagrined that a system that was working very well for me is now going to cost me more. TC offered excellent consulting services and custom plans tailored specifically to my needs, for free. It seems the only people who will really benefit from this change are those who use the Easy Choice Portfolios and who have investments that will charge lower fees. All the fees for my investments will now be the same or higher, plus I now have the $50 fee and no free expert consulting services.

 

Disappointing.

 

When I learn more, I will share information. Thanks again.

You do NOT have a $50 fee, that would only apply if you used the brokerage window, which it doesn't appear you do. In addition, the fees for everyone are dropping from .33% to .25% - so you'll certainly benefit. In addition, I think you'll enjoy the Financial Engines service.

 

ScottyD

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Magmason,

 

I, too, have a portfolio outside of the Easy Choice menu. I received my P2 package yesterday from CALSTRS and it looks to me like the Easy Choice funds will be at Voya and the others will go to TD Ameritrade SDBA. However, I still had some unanswered questions and immediately called the information phone no. (844.353.2872). To my surprise, a person answered without the usual annoying prompts. Here is some information that was not in the brochure.

 

1. The TD Ameritrade SDBA will have a $50.00 annual fee and there will be no transaction costs per fund.

 

2. My 457 contribution will go directly to Ameritrade and the 403 will arrive a couple of days later because the funds must pass through the TPA.

 

3. The beneficiaries on file at TC will automatically be passed through.

 

I am a DIY investor and do not use the investment services at TC but I did notice in the brochure that there will be free online advice and a "Full Managed Account Service Option....... Participants pay an additional fee for this service." I do know that the advisors at Ameritrade are available over the phone. Anyway, you still have a couple of weeks to make adjustments.

 

I checked out the mutual fund screener in my Ameritrade account and found over 3000 no-load, no transaction fee funds. The fund screener is all Morningstar information, like TC, but a little more cumbersome to use. I'm sure as I use it more often it will become easier to navigate....there is plenty of information for investors to research.

 

I am sure that many more questions will arise so I hope others will share!!! Bob

Shirley,

 

I want to make sure you know that none of your money is going to TD Ameritrade. It will stay in your core account and in fact your fees will be lower than they are now. I'm not sure who you are talking (please message me and let me know) as unless you already have an brokerage account, you will not be placed into one.

I'd love to answer any questions you have, I don't feel like you received the right answer and I want to make sure you get them.

 

ScottyD

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Scotty D

 

Thank you so much for clarifying this for me. The brochure sent out by Pension 2 presents as if there are only two choices: Easy Choice Portfolios, or SDBA.

 

So, if I choose a lineup within the core lineup but outside Easy Choice, I will access my account with VOYA, as I do now with TIAA-CREF, and not Ameritrade?

 

If I end up choosing an Easy Choice portfolio but do NOT want it rebalanced as I age, will I have that option?

 

Will I have free access to one-on-one personal (not automated) consultations with real live experts who can help me with my individual needs, as I did with TIAA-CREF, or will I have to pay extra for these consultations?

 

Many thanks. I find your answers reassuring and helpful.

 

Maggie

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ScottyD,

 

The information that I received was from the person at 844-electP2. I did not request a name.

 

The contributions to my existing TC 403 account are moved into the brokerage window only upon request. This necessitates a burdensome phone call after each contribution. I have requested an automatic sweep but this was promised but never done.

 

The contributions to my existing TC 457 are automatically deposited into my brokerage account.

 

The information that I received was there will be a $50.00 fee for each account. Regardless, my fees are going from $0.00 to $100.00.

 

Moreover, perhaps I don't understand the difference between "core lineup" and Easy Choice? I assumed that they were the same.

 

Thank you for all the clarity!!!! Bob

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Scotty D

 

Thank you so much for clarifying this for me. The brochure sent out by Pension 2 presents as if there are only two choices: Easy Choice Portfolios, or SDBA.

 

So, if I choose a lineup within the core lineup but outside Easy Choice, I will access my account with VOYA, as I do now with TIAA-CREF, and not Ameritrade?

 

If I end up choosing an Easy Choice portfolio but do NOT want it rebalanced as I age, will I have that option?

 

Will I have free access to one-on-one personal (not automated) consultations with real live experts who can help me with my individual needs, as I did with TIAA-CREF, or will I have to pay extra for these consultations?

 

Many thanks. I find your answers reassuring and helpful.

 

Maggie

Hi Maggie,

 

I apologize for the confusion. Yes, if your funds are from the core they will remain in the core and simply be held at Voya (as they were held at TIAA) - you will NOT have a TDAmeritrade account.

 

If you choose Easy Choice it must be rebalanced each quarter and get more conservative as you get older - however if you are in one of the "Retired" portfolios (which I suspect you are not), they are only rebalanced, they do not change the overall allocation to risky assets each year (but the more risky portfolio "Aggressive Retired" is 60% risky assets).

 

Your access to in-person help will be dependent on your location. There are three people full time in the field (or will be at launch). You will always have access to the Financial Engines software online or over the phone (if you want help from someone live) and that will provide personalized recommendations at no cost. If you choose to implement the recommendations on your own there will continue to be no cost - if you elect to let Financial Engines manage the account and make periodic adjustments, their will be an added fee.

 

Please let me know if this answers your questions and keep asking as many clarifying questions as needed.

 

I am curious as to why you wouldn't want Easy Choice portfolios to automatically adjust.

 

ScottyD

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ScottyD,

 

The information that I received was from the person at 844-electP2. I did not request a name.

 

The contributions to my existing TC 403 account are moved into the brokerage window only upon request. This necessitates a burdensome phone call after each contribution. I have requested an automatic sweep but this was promised but never done.

 

The contributions to my existing TC 457 are automatically deposited into my brokerage account.

 

The information that I received was there will be a $50.00 fee for each account. Regardless, my fees are going from $0.00 to $100.00.

 

Moreover, perhaps I don't understand the difference between "core lineup" and Easy Choice? I assumed that they were the same.

 

Thank you for all the clarity!!!! Bob

Hi Bob,

 

I think I see your issue - you actually are in the Self-Directed Brokerage accounts currently. Technically those accounts at TIAA were always subject to an annual fee. The issue was that TIAA could never figure out how to charge it and so they paid it on your behalf. This was going to change even if CalSTRS remained at TIAA. You can avoid that fee by keeping your money in the core account (i.e., not moving it to the Self-Directed Brokerage). The core lineup has an index fund in nearly every category and allows you to easily build a well diversified portfolio. You can also let CalSTRS do it by choosing Easy Choice (which is a managed portfolio at no cost using the core lineup of funds as allocated by CalSTRS according to your retirement year and risk profile). Building your own portfolio within the core and using Easy Choice are separate, but they use the same funds and are all in the core account (i.e., not in the brokerage).

 

Not sure that helps, but please ask additional clarifying questions and I'll do my best to answer.

ScottyD

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ScottyD,

 

Thank you .....that helps tremendously !!!!

 

Will the 403 and 457 contributions go directly into the Ameritrade account without stopping at Voya?

 

Once again...Thank you...Bob

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ScottyD,

 

The reason I do not want adjustments is this: I was late to the game because a divorce necessitated paying my mortgage rather than saving more than a small chunk every month for retirement, for many years. I'm now putting over 20% of my paycheck into it. Because of this, and because I will get a pension, I was advised by at least three financial advisors to stay with a much more aggressive portfolio. My Easy Choice was Moderate Aggressive, and after about 4 years, slowly became too conservative. I then switched to a very aggressive lineup with no birthday reallocations.

 

I'm retiring in about 5 years and I don't mind taking the risk of another bear market, because I have my guaranteed pension, and I'm in it for the long haul. The way I see it, retirement funds don't just get suspended when I retire, so I'll still have years to recover in case of a downturn. I'll wait to diversify into a more conservative lineup when I actually retire.

 

Thanks so much for all your help.

 

Maggie

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