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couronne

457 Option In A School Distict

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My district has a 403B plan currently, but I was wondering...if the school district were to add the 457 as an option, does it cost the district money? Thanks in advance!

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Couronne

 

 

If your 457B is a state plan there should be no cost. I know the one I lobbied for is run by the state and it was open to all state employees. It was as easy as filling out a form by the school district. Now if you have a 457B set up differently I don't have an answer for you but I doubt it should cost your school system a thing.

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No, it doesn't cost the district money, but the participants pay the third party administrator through their investments. At Los Angeles Unified we have an advisory committee made up of reps from the various unions, including teachers and administrators, and others. We have kept the fees so low we won a plan design award for our 457(b) plan. We also oversee the 403(b) plan, but there is little we can do to control costs because of state 403(b) laws protecting the insurance industry.

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Couronne,

Your district might already have the 457 option. I've found that districts are not going to be forthright about plans, as illogical as it sounds, because they do not want to come across as "making a recommendation". So, check. And when they answer you, request them to add it, if they do not already.

They might not have ever been asked since teachers often expect we're already getting the best plans and might not even know to request a better option.

By all means, let them tell you. Make them tell you. Make them defend their decision NOT to offer a potentially lower cost alternative. Keep in mind, frequently, the 457 often comes with little to no financial advisement.

Please report back.

Nancy

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Hello all!

 

Upon request, our district has added a 457(b) plan, as I have mentioned in another post. I have begun making contributions...even though there are not A LOT of options, there are several that are very good.

 

I was hoping to transfer (exchange) some of my 403(b) American Funds from AF to the 457(b). But upon further digging, I find that that is not possible...not until I retire? Or reach 59 1/2?

 

It is a bit confusing because one person I spoke with said yes I could but another said...nope! The IRS site has a chart that lists it as yes...you can, but it does not say under what circumstances.

 

Anyway, happy to have the 457(b) now available. ..with great low-fee options. Just trying to learn more about it.

 

Any comments?

Thanks!

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