Jump to content
jebjebitz

Switching from Lincoln PDP to Security Benefit DirectInvest

Recommended Posts

Long post here about the process of switching investments to a new carrier and some of the frustrations I encountered along the way.  I switched to Security Benefit from Lincoln to save $60 a year.  I’ll let you decide if it was worth it.

I recently decided to move my investment from Lincoln to Security Benefit.  I heard about Lincoln’s Participant Directed Platform after asking questions on this forum and the Boglehead forum.  Krow was the member that supplied the info and then I was on my way to getting out of my AXA Equivest contract and into Admiral Vanguard funds through the Lincoln PDP.  (Thank again Krow!). I’m a NJ teacher and this is one of the few states that offer this program if I remember correctly.

The Lincoln Plan was great but, there was a $60 annual fee and if I wanted to reallocate funds at some point there was no online platform that would allow me to do this.  You can view statements online but that’s about it.

Security Benefits DirectInvest is similar but, the annual fee is $35, this fee is dropped if your account exceeds 50,000 which mine does.  It also provides a little more in the way of its online accessibility.  So I decided to make the switch.

This has been an  extremely frustrating process.  The switch from AXA to Lincoln was surprisingly easy.  This is because I was in direct contact with a representative from Lincoln.  He walked me through the paperwork, helped me navigate the third party authorization process and contacted me when things were held up for one reason or another.

This was not the case with Security Benefit.  Everything about signing up for DirectInvest turned out to be confusing, slow and just plain frustrating.  To start, they have a step-by-step process set-up online that is not in an order that works.  They tell you to complete an Incoming Funds Request and a Payroll Reduction Agreement before filling out the paperwork to create an account at Security Benefit.  Luckily I called a representative who explained this otherwise I could have been sending money to them with no account to put it in.

So, I filled out the online application which is done through something called DocuSign.  I filled this out, received an email confirmation from DocuSign and then waited, and waited.  It was a month before I heard from Security Benefit.  This was by phone because, get this, they don’t send correspondence through email.  In the month it took for Security Benefit to create this account, I called both DocuSign and Security Benefit and neither could tell me if my account had been set up.

At this point I considered giving up, staying with Lincoln and eating the $60 annual fee.  But, I receive a call a month and a half later and a representative from Security Benefit assures me an account was created and is ready to receive funds.  I just needed to fill out the Salary Reduction Agreement and the Incoming Funds Request.  I stopped contributions to Lincoln and started contributions to Security Benefit with just a quick call to my district payroll department.

Part of the Incoming Funds paperwork requires third party authorization, a signature from, in my particular case, a company called Penserv.  When I made the switch from AXA to Lincoln this was done for me.  In this Security Benefit transfer, I was responsible for faxing paperwork to Penserv.  This is fine but, there was nothing that indicated this step needed to be taken on the paperwork or in any conversation I had with Security Benefit representatives.  I didn’t find this out until about a week later when I called to check on the status of my application.

It gets worse.  I fax the paperwork to Penserv and get third party authorization.  They in turn, fax the paperwork back to Security Benefit.  Security Benefit is unable to find this paperwork.  I only find this out because I call again to check the status of my application.  I call Penserv and ask them to fax the paperwork a second time.  I call again and the paperwork is still not received.  At this point I’m still unaware of how horrible communication at Security Benefit is so I assume Penserv isn’t sending it to the right place.  The rep at Penserv explains that they deal with Security Benefit all the time and refuses to send the paperwork a third time.

Now every time I call Security Benefit I get a different rep.  I provide them with a reference number but it only hints at the inconsistencies taking place.  When I call again I get someone that tells me, “yes, we have received third party authorization and the paperwork has been sent to Lincoln.  We will wait for them to transfer the funds.”  It turns out that it is true that they sent Lincoln the paperwork but, they sent them the Incoming Funds Request without the Penserv signature and without their signature.  I don’t learn about this new development until December 18 when I receive a letter from Security Benefit informing me that Lincoln has refused to transfer my funds.  They do not specify why but go on to explain that the Penserv authorization will expire on December 31.

Throughout all this I continue to email the rep from Lincoln who helped me make the switch from AXA.  Without his help I would not have learned that Security Benefit sent the paperwork within the appropriate signatures.  When I called Security Benefit I had to explain this to them and walk them through sending the paperwork a second time.  He also emailed me when the paperwork was received.  

Currently, I have received confirmation from the Lincoln rep that all paperwork is processed and the transfer will take place but have not heard from Security Benefit.  After all of this I half expect them to tell me the Penserv authorization expired and I need to repeat the process.  

If you’ve read this far understand that when switching to Security Benefit you are on your own.  You will deal with someone different each time you call and you may get a different answer depending on who you talk to.  With Lincoln, you’ll pay $60 a year but you’ll have access to a person who can walk you through a transfer.  Hopefully, once I’m past this I’ll appreciate saving $60 a year but, I’m not sure I would have made the switch if I knew how this was going to go ahead of time.

Share this post


Link to post
Share on other sites

Jebjebitz,

I reference you to my post Vanguard 403b is a mess I just posted recently. As you can see things are tough all over. Hang in there. It will be straightened out eventually. My suggestion is to contact Security Benefit  and establish a contact with just one specialist.  Get his or her contact info-phone, extension .Then deal with only that person. Refuse to talk to others. Thats what my friend did and I just heard today that she is making progress after two months of inaction and having to fill out the same paperwork over and over again. This last time I directed her to tell Newport that she would not be filling out anymore paperwork .

.What I am discovering is that too many hands in the pie makes things confusing  for everyone.  I don't understand why companies allow so many folks to get involved. It just causes  more confusion. Each specialist should have a caseload to deal with and should follow that caseload to completion.. At Vanguard/Newport too many different people were involved at different times during the process.

Avoid e-mail. Get the person on the phone. E-mail is too easy to misinterpret. At the same time I would be persistent and specific about what you want done.. Of course if the person on the other end is a complete idiot, then politely end the contact and keep going until you get a specialist who sounds competent and then stick with that person. I would not be afraid to leapfrog the specialist and ask for their direct supervisor if you are not getting anywhere.

Tony

Share this post


Link to post
Share on other sites

When dealing with the reps at Security Benefit you should expect a mixture of incompetence, ignorance, and malevolence. They couldn’t/wouldn’t even confirm that the DirectInvest program exists!

I suggest everybody figure out, on their own, the exact steps to accomplish what they want and execute those steps. Do not rely on them if you can help it.

I documented the exact steps you have to go through to open a DirectInvest account here in OCPS (FL). If I ever walk somebody through a transfer then I’ll document those steps too.

Share this post


Link to post
Share on other sites

Tony,

I read your post about Vanguard after posting my lengthy struggles with Vanguard.  My wife’s district has Vanguard and she had to submit and resubmit paperwork for a few months before she was able to tanager her funds from AXA.  Finding just one rep makes sense, this is what made dealing with Lincoln so easy.  

Share this post


Link to post
Share on other sites

 

Jeb,

Keep us informed. I would expect  this kind of stuff from Security Benefit as Ed mentions  but not Vanguard. I wonder if your wife's problem  originated with AXA. Some of these 403b folks are notorious for making the process difficult.

Share this post


Link to post
Share on other sites
9 hours ago, EdLaFave said:

When dealing with the reps at Security Benefit you should expect a mixture of incompetence, ignorance, and malevolence. They couldn’t/wouldn’t even confirm that the DirectInvest program exists!

I suggest everybody figure out, on their own, the exact steps to accomplish what they want and execute those steps. Do not rely on them if you can help it.

I documented the exact steps you have to go through to open a DirectInvest account here in OCPS (FL). If I ever walk somebody through a transfer then I’ll document those steps too.

Ed,

Were you able to email documents to Security Benefit?  This was not an option for me.  My choices were to fill out their application and mail or fax it or, use DocuSign to complete an online application and sign electronically.

It may be different because you are in Florida.  The steps you lay out on your site make more sense than their site though.

Share this post


Link to post
Share on other sites

I never tried to email Security Benefit. I used DocuSign to open the account, OCPS (FL) did whatever they did to begin funding the DirectInvest account, and I used securityretirement.com to manage the account (forgot how I got the login credentials).

My obstacle was OCPS, not Security Benefit. OCPS insisted that DirectInvest wasn’t an option. I documented our struggle, in all of its detail, here.

Share this post


Link to post
Share on other sites

I can sympathise. 

I opened my account with SB, stopped deductions with AXA and started contributions to SB via our TPA.  I incorrectly assumed with the SB account open, sending AXA paperwork with the TPA  contract exchange paperwork to the TPA  would be enough.  -- Nope. Got a letter from AXA saying paperwork was incomplete, they needed the accepting account signatures. So I sent a new round of paperwork to SB asking for signatures and  asked them to return all to me so i could return to TPA to forward to AXA. -- Instead, SB kept all the paperwork and sent me a letter saying they mailed AXA the verification of account.   Then,  I got a letter from AXA saying paperwork was incomplete because of no TPA signatures.  Sooo... round 3,  send paperwork to TPA, they will foward all to SB, hopefully SB gets it right.  AXA"s paperwork specifically states that their forms are the only forms they will accept. I'm so tired of it.

Share this post


Link to post
Share on other sites
13 hours ago, Imua808 said:

I can sympathise. 

I opened my account with SB, stopped deductions with AXA and started contributions to SB via our TPA.  I incorrectly assumed with the SB account open, sending AXA paperwork with the TPA  contract exchange paperwork to the TPA  would be enough.  -- Nope. Got a letter from AXA saying paperwork was incomplete, they needed the accepting account signatures. So I sent a new round of paperwork to SB asking for signatures and  asked them to return all to me so i could return to TPA to forward to AXA. -- Instead, SB kept all the paperwork and sent me a letter saying they mailed AXA the verification of account.   Then,  I got a letter from AXA saying paperwork was incomplete because of no TPA signatures.  Sooo... round 3,  send paperwork to TPA, they will foward all to SB, hopefully SB gets it right.  AXA"s paperwork specifically states that their forms are the only forms they will accept. I'm so tired of it.

Wow!! This is exactly what I was dealing with.  The crazy part was they could not understand why Lincoln would not transfer the funds.  In addition to the TPA they needed to sign it themselves as well.  They kept telling me there were additional steps Lincoln needed to take but it was all held up due to their incompetence.

My account is open now but it only reflects one contribution when I’ve made three.  They’re telling me it’s something my HR department at my school district needs to remedy.  I’ve been working on this since October.

Share this post


Link to post
Share on other sites

Gosh Folks, these  403b companies are supposed to earn their money facilitating our needs and requests. They all seem to have their own singular paperwork requirements and procedures but the investing participant is often left to figure this  stuff all out on their own . Very poor communication. The companies themselves are often in the dark on how to facilitate these  customer requests .This leaves our  accounts in limbo for months for various reasons . This is wrong. Maybe these companies need to have an articulation meeting and standardize  and simplify their procedures and paperwork across the board.. Something is very wrong with the process when so many of us are being left out in the cold when we are the very people they are serving. Teachers would never be able to get away with this in the classroom.

Share this post


Link to post
Share on other sites
12 hours ago, tony said:

Gosh Folks, these  403b companies are supposed to earn their money facilitating our needs and requests. They all seem to have their own singular paperwork requirements and procedures but the investing participant is often left to figure this  stuff all out on their own . Very poor communication. The companies themselves are often in the dark on how to facilitate these  customer requests .This leaves our  accounts in limbo for months for various reasons . This is wrong. Maybe these companies need to have an articulation meeting and standardize  and simplify their procedures and paperwork across the board.. Something is very wrong with the process when so many of us are being left out in the cold when we are the very people they are serving. Teachers would never be able to get away with this in the classroom.

Do you think this is happening with self-Directed plans only?  If someone uses a rep, and the rep handles all of the transfer process, do you think that rep has to call 5 - 10 times to make sure the transfer is running smoothly?  I’m being serious.  There just seems to be something about transferring funds from one company to another that reveals a major breakdown in communication between these companies.

On a separate note:  The Security Benefit website is 100 times better than the Lincoln website.  I think once I get all of my funds in order I will be happy I made the switch.  My money is still in limbo as of today but I hope to get this fixed sometime this week.

Share this post


Link to post
Share on other sites

 

Quote

Do you think this is happening with self-Directed plans only?

 

I doubt it. Its across the 403b board probably.  However, most companies and their advisors don't want you to transfer money  out and perhaps they are less inclined to do it on a timely basis in hopes that you will have second thoughts and leave it were it is. I would hope thats not the case but advisors lose money when you transfer out so even if you use them to fill out forms, the motivation to stall might still be there. I do know the paperwork has to be completed correctly and sometimes self-direct folks might not fill out the forms right. You do have to know the terminology used on the forms and know the difference between terms like rollover and transfer . If you check the wrong box, its back to a new form. That alone can cause a huge delay. Also every company seems to have  different forms, requirements, and procedures. Also you have to look at the work culture. High turnover might give you less experienced specialists who are learning on the job.I am sure they also need to cover their behinds to keep the iRS happy and not break any laws. In my case my Vanguard rollovers ,state 457 transfers/rollovers, and my Aspire transfers/rollovers  have always been smooth and with no glitches. Thats why I am very concerned about Vanguard's new relationship with Newport.

Having said that its a bit crazy how the 403b world is compared to how much simpler it is to do a transfer or whatever outside these plans even when companies have different forms and requirements.. Much easier, and I have been there and done that. No Comparison. The 403 b is weighted down with a huge administrative bureaucracy. 

I would suggest you become a pest . The squeaky wheel gets the oil.

P.S. Compare how easy it is to sign up for a 403b compared to trying to exit one. That says it all.

Share this post


Link to post
Share on other sites

My cynical self thinks Security Benefit makes it as difficult as possible because they really didn't want to offer this product, they just did it so they could say they offer it. It disgusts me that the NEA doesn't provide low costs options and instead push more expensive models because they are making money off of it. I just went through the transfer process from AXA to Aspire, and it went pretty smoothly. Aspire actually wants your business, apparently unlike Security Benefit DirectInvest. 

Share this post


Link to post
Share on other sites
Quote

My cynical self thinks Security Benefit makes it as difficult as possible because they really didn't want to offer this product, they just did it so they could say they offer it. 

You are  probably right. Thats why we need to keep letting everyone know that direct invest is available and encourage everyone to not let them discourage you from getting to it. I never trusted the NEA's motivations.

Share this post


Link to post
Share on other sites
1 hour ago, tony said:

I would suggest you become a pest . The squeaky wheel gets the oil.

P.S. Compare how easy it is to sign up for a 403b compared to trying to exit one. That says it all.

I rarely take this approach but resorted to it in my last phone call.  When they told me it was up to me to contact HR and find my two missing contributions I regretfully lost my patience.  I got a manager on the phone and stressed the fact that they had done absolutely nothing for me and this is one more step I had to take on my own.  One more thing I had to explain to someone else in the hopes that maybe Security Benefit would get it right on their end this time.  She could care less.

I’m in agreement with Library Lady and think, at least on some level, they’re ok with people struggling their way through the transfer process.  That makes me want to get this done even more.  It might be helpful if I start a new thread that outlines the steps that should be taken similar to the way Ed does on his site.

Share this post


Link to post
Share on other sites

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now

×