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tony

Vanguard 403b Services A Mess

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Just want to give all of you a heads up and a warning. I have been approached by a retired teacher acquaintance about her attempt and her husband's helping attempt to make a simple Vanguard 403b transfer to a traditional Vanguard IRA for her. Sounds easy right? She wanted my help as they can't take much more of the aggravation dealing with this new 403b Newport group.They do not have their act together. I even question their competence. This is a process I had completed for myself and my wife multiple times with zero problems when Vanguard 403b plans were actually done by Vanguard. My friend has not been so lucky.  I just read through a huge amount of back and forth e-mails and each e-mail is handled by a different specialist. They have asked this individual to fill out the same forms over and over again even though the forms were filled out correctly and completed just fine the first time with all correct signatures and boxes checked . I just got on the phone with Vanguard and I raised H-E-L-L about the incompetent and unorganized  organization they have outsourced their 403b plan supervision to. Each representative either requested information that was already supplied or gave contradictory requests and information . As mentioned previously,this poor teacher has had to fill out the same forms over and over again and each time the form was rejected for different reasons. They even asked for the third party administrator to again verify the needed information that was already sent in! The original form that was sent to her to fill out even had someone else's person information on it including social security number and addresses. How's that for incompetency! This has been going on since November and the transfer is still in limbo and no-one has a clue what is going on and I can guarantee that its nothing this poor teacher did wrong. I hope to help her get this straightened out. This should not be happening. This is just another example why the 403b world needs to change. This can't be an isolated case, not with this much activity. It must be a symptom of a much larger problem. Move over TIAA, make some room for Vanguard .

 

Tony

 

 

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Update

This gets even more comical. The teacher just forwarded an e-mail she just  got from Newport. They tell her she has been filling out the wrong forms (which are the forms They sent her). They attached the new form to fill out BUT its the same form she already filled out BEFORE-TWICE.

Also, while on the phone earlier I told The lady I talked to it would be in everyone's best interest if only one specialist deal with this issue and she agreed and she gave me her name and said going forward she would be the only contact person for this issue. BUT the new e-mail is from yet another, different specialist that wants us to go through her. What?  I can't make this up.

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Library Lady

I've mentioned on this site before that Vanguard may  have grown too quickly for its own good. In terms of the 403b, unless Newport starts getting its act together I would imagine Vanguard will not keep this arrangement.  Vanguard is still tops in my book but this arrangement perplexes me. At this point I would give Fidelity top spot for customer service.Hopefully with time Newport will figure it all out. They just took the helm in early November so they have time to improve. Still I am shocked at what the retired teacher mentioned in my previous post is having to go through just to make a simple Vanguard 403b-to Vanguard IRA rollover. Its not rocket science.

Tony

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Of course, Newport wants people to keep their money in the Retired Teacher's district's plan so they can collect extra fees. While I agree that Vanguard is the ultimate responsible partner, let's be clear that it's not Vanguard thats foot dragging the process. The huge size of Vanguard is little to nothing to do with this problem. 

If enough people complain to Vanguard, they may do something. 

Hopefully its an isolated case, however, the insurance industry also dragged its feet to when those of us wanted out. 

It's a shame because Vanguard, TIAA and in some cases Fidelity have recognized and sympathized with us on the 403b mess for DECADES. No other company has done that. I don't know Newport, and perhaps Vanguard made a mistake hiring them, but as I understand it, Vanguard wanted more of a presence in the public K12 market. I am still not sure what the Newport costs are. And we need to reform the 403b mess. It's not Vanguard responsibility that the 403b is a corrupted mess. This was an attempt to make Vanguard more accessible. But it looks like its backfiring. 

It's interesting what people complain about now. Back in the day, I was just thrilled that I had a no-load mutual fund available in my 403b which has a 12b(1) fee of .25% on top of the regular fee of .75%. did not complain that I had to pay a little more in fees to get the hell out of those horrific annuities into a genuine investment. Yeah, .95% was a high fee compared to what is available these days. 

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I would hate to think Newport would do this purposely to keep folks in their 403b plan so they could collect fees. I guess its possible. We are all aware at what lengths the investment industry will go to. I can tell you if thats their motivation it might work because the retired teacher was ready to quit the process altogether until she ran in to me at the grocery store. But as more people hear about it that tactic would backfire.I remember the constant delay I had to go through years ago trying to get my money away from American Express. They had roadblocks all along the way. You must be persistent .

I won't give up. I will pester them into getting it done as much as I can considering its not my account. Interestingly, the conversation with her TPA has been positive and competent. They don't exactly understand what is going on either. They fulfilled the requirements on their end. They refused to talk to me directly but the teacher call them and relayed information to me. Its been difficult doing this because its not my account.

I don't blame Vanguard at all at this point but if more and more people here and on Bogleheads start mentioning this problem and other problems I would expect Vanguard to sever ties with them.If Newport  is Vanguard's way of better serving the 403b market, they (Newport) needs to be in better control of their game than what I have seen.

I will keep you all posted and hopefully my next post on this particular issue will show a positive conclusion.

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My Friend teacher got a e-mail notification today that her transfer was complete. I won't go on and on about this anymore. You can read what went on above. She thanked me for helping her out but I am not sure what exactly I did outside of drawing attention to her  nine week plight.

My advice to all of you when you are attempting to initiate a transfer or rollover if you have never been down this road i before:

1. Call all parties (The sender, and the receiver of your funds)and ask for the paperwork they require  for you to initiate the transfer. This may include the Third Party Administrator  if you are transferring a 403b plan which often has its own forms required to be filled out too. Chances are you will have 2 and possibly three different forms to fill out.

2. Ask them to e-mail you the correct forms. Don't let them direct you to their "Forms" webpage. There are too many forms to look through and its too easy to pick the wrong form or not find the correct one. I remember Aspire directing to me to its forms page. It was difficult to discern which form was correct. I had to call them to make sure i had the right form. I didn't.

3. Make sure the forms are filled out properly with all signatures in the right place. If you are not sure how to fill out the form call them and ask!! If possible, ask them to walk you through the form on the phone step by step. One wrong check and you will add to your frustration as you will have to fill out the forms AGAIN and maybe again!!. Also, make sure you are signing your name the same way. If you use a different nick name or middle initial for whatever reason on different forms you will have to go to bank and get a proof of identity form filled out to prove you are one and the same person. This actually happened to my wife who signed her 403b forms early on with an M (birth middle name) and when she went to transfer she signed her middle name using a O (her maiden last name name). Not every bank or other financial institution offers this service and it was a very frustrating experience getting a medallion signature guarantee. A notary public cannot provide this signature guarantee. Keep your signatures the same.

4. Don't be surprised if the transfer will take four to six weeks and maybe longer to complete. If you make a mistake, you may double your wait time. It really pays to get it done right the first time. Even ,if you have to pester them with questions as you fill out the forms.

5.Try and lock in to one representative from each side. ( Ex. AXA REP-Vanguard rep) Get their names and extensions.  Talk to only them.If problems come up ask for that particular representative to help you solve the problem. If  a  communication problem comes up try and set up a conference call between you and the two  reps . Don't talk to others. If you do you maymake things more complicated because the new person may not be up to speed with what is going on and have a completely wrong solution!!

 

6. Even with all these precautions things may still come up but from my experiences, the above recommendations will help you avoid some of the problems and get your money rolled over or transferred successfully.

Oh and as I stated before, don't be afraid to ask for a supervisor if you feel you are on a merry-go- round and not moving forward. There are times you will run into a representative that does not know what the heck they are doing. Over my many years I have on several occasions been given wrong information so its not that uncommon.

 

Tony

 

 

 

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Thanks Steve

I realized this may be something others will being going through at some point. It  can be a frustrating experience.

 

Tony

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I thought I was done with this thread. Today I received a call from the retired teacher. More confused than ever . She received an e-mail dated today that said her transaction could not be completed and that she needed to to fill out an attached form-which by the way was NOT attached. So i can't tell you what the form was all about.

She had recently received  e-mail confirmation that her transfer was 100% complete  plus a follow up call that the transfer went through and everything was settled.

I am throwing up my hands and praying that this nonsense won't continue. She said she spend 30 minutes on hold this afternoon trying to get through to her contact person but finally just hung up. The person who contacted her this time was not her contact person. Its someone new and they didn't attached any forms!!!  #!!XX***%%%

Could it be they have people working on this transfer not knowing that it has been already completed?

P.S I promise you this not fiction . Its very real.

 

This can't be an isolated case. At this point I just don't believe it.

 

Tony

 

 

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When I rolled over $30,000 from a MetLife 403(b) I'd had for years--I waited so as not to pay surrender fees--to Calstrs Pension 2 at Voya, it took over three months.  They made the check out incorrectly.  The money went AWOL for a several weeks, deducted from my MetLife account but not credited to Voya, and I missed out on a significant uptick during that time.  It was an endless chain of emails and phone calls, for a very simple rollover from one 403(b) account to another.  

Heads up.  Plan ahead.

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magmasson

 

Thank you for adding to this discussion. Like I said before a teacher would never be allowed to get away with this kind of incompetency. I am not surprised that this would happen in the insurance company 403b world because it always seemed to me it was always more about making the sale than offering exceptional customer service. With Vanguard though I would have expected better.

I still have hope my friend will get her problem solved .

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So discouraging to finally have access to low cost funds and run into this many snags. I love Vanguard, and have an IRA with them, but they can’t ignore all these complaints about Newport. It shouldn’t be that difficult! 

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Librarylady

I think these  situations are much more characteristic of  403b plans and its multiple layers of bureaucracy.  Vanguard's regular accounts and their service is very good so  you are good to go in a Vanguard IRA. 403b plans is were you have to be careful.

Tony

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Tony, thanks for helping this person, and thank you for sharing your experience here. I love Vanguard. I got to meet John Bogle; he's written me several kind notes; and at one time it looked like Vanguard was going to sponsor 403bwise. Vanguard has saved me tens and maybe ultimately hundreds of thousands of dollars. But I too had some issues with them as I documented in this Wise story. To their credit the acknowledged this via Twitter (posted below). Let's hope my issue and the one Tony documented is isolated. 

We're sorry for any inconvenience, Dan. We appreciate you taking the time to give this feedback & have shared it with the appropriate team.

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